Summary
Berkshire Hathaway Inc. (BRK-B) reported its third-quarter and nine-month results for the period ending September 30, 2001. The company experienced a significant net loss of $679 million in the third quarter, primarily due to a substantial pre-tax charge of $2.275 billion related to estimated losses from the September 11, 2001 terrorist attacks. For the first nine months of the year, net earnings were $700 million, a sharp decline from $2.244 billion in the same period of 2000. Despite the net loss in the quarter, the company's non-insurance businesses showed strong revenue growth, driven by recent acquisitions, with revenues increasing by over 100% for both the quarter and nine-month period. However, the insurance segment, particularly General Re, incurred substantial underwriting losses. The company's financial condition remains robust, with shareholders' equity at $57 billion and significant cash and invested assets. Berkshire also continued its acquisition strategy, deploying approximately $4.8 billion in cash for business acquisitions during the first nine months of 2001.
Key Highlights
- 1Significant third-quarter net loss of $679 million, largely driven by $2.275 billion in pre-tax charges related to the September 11th terrorist attacks on Berkshire's reinsurance businesses.
- 2Nine-month net earnings significantly decreased to $700 million from $2.244 billion in the prior year, primarily due to the impact of the September 11th events.
- 3Non-insurance businesses demonstrated robust revenue growth, with Q3 revenues up 103.3% and nine-month revenues up 101.7% year-over-year, largely due to recent acquisitions like Shaw Industries and Johns Manville.
- 4Insurance underwriting operations, particularly General Re, incurred substantial losses. General Re reported a pre-tax underwriting loss of $1.9 billion in Q3 related to the September 11th attacks.
- 5Policyholder float grew to $33.3 billion as of September 30, 2001, with a notable increase in the third quarter due to reserves set for September 11th losses.
- 6Berkshire continued its aggressive acquisition strategy, investing approximately $4.8 billion in cash for business acquisitions during the first nine months of 2001.
- 7The company's financial position remains strong, with $57 billion in shareholders' equity and substantial cash and invested assets, excluding finance and financial products businesses.