Summary
This filing is an amendment to Berkshire Hathaway's third-quarter 10-Q report for the period ending September 30, 2001. The primary purpose of the amendment is to restate the financial statements to reflect a change in accounting for Berkadia LLC. Previously accounted for using the equity method, Berkadia is now consolidated, which increased assets and liabilities of the finance and financial products businesses by approximately $5.5 billion, though it had no impact on reported interim earnings or shareholders' equity. The report details significant underwriting losses in the insurance segment, primarily due to the September 11th terrorist attacks, which resulted in an estimated pre-tax charge of $2.275 billion. Despite these losses, the company's strong balance sheet and diverse business operations are highlighted.
Key Highlights
- 1Restatement of Q3 2001 financials due to change in accounting for Berkadia LLC from equity method to consolidation, increasing assets and liabilities by $5.5 billion without impacting earnings or equity.
- 2Significant pre-tax underwriting losses of $2.275 billion recorded in the reinsurance businesses related to the September 11, 2001 terrorist attacks.
- 3GEICO reported an underwriting gain of $130 million for Q3 2001, driven by lower loss ratios and reduced expenses, despite a slight decrease in policies-in-force.
- 4General Re experienced substantial underwriting losses, particularly in its North American property/casualty segment, heavily impacted by the September 11th attacks and unfavorable reserve adjustments.
- 5Non-insurance businesses saw significant revenue growth due to recent acquisitions, though some were adversely affected by the general economic slowdown and the September 11th attacks.
- 6Policyholder float increased to $33.3 billion at September 30, 2001, largely due to reserves set aside for September 11th losses.
- 7Berkshire Hathaway completed several significant acquisitions during the first nine months of 2001, including Shaw Industries, Johns Manville, MiTek Inc., and XTRA Corporation, deploying approximately $4.8 billion in cash.