What was the impact of Hurricanes Katrina and Rita on Berkshire Hathaway's financial results?

Hurricanes Katrina and Rita caused significant catastrophe losses for Berkshire Hathaway's insurance businesses, totaling approximately $2.99 billion for the first nine months of 2005. This substantially impacted the underwriting results of the insurance segment, contributing to a net underwriting loss for the period.

What were the key acquisitions made by Berkshire Hathaway during this period?

During the first nine months of 2005, Berkshire Hathaway acquired Medical Protective Corporation (Med Pro) and Forest River, Inc. The aggregate consideration for all acquisitions in 2005, including these, was $1.8 billion. These acquisitions are expected to contribute to revenue and earnings growth in their respective segments.

How is Berkshire Hathaway's investment portfolio performing, particularly its major equity holdings?

Berkshire Hathaway's investment portfolio continues to be a significant driver of its financial performance. Investments in equity securities, including major holdings like American Express and Coca-Cola, showed substantial fair value increases. The company anticipates a significant non-cash pre-tax investment gain of approximately $5 billion in the fourth quarter of 2005 from the exchange of its Gillette Company shares for Procter & Gamble shares.

What is the status of the investigations involving General Reinsurance?

General Reinsurance and its affiliates are cooperating with ongoing governmental investigations related to Reciprocal of America (ROA) and non-traditional insurance products. Several former and current employees have been involved in these investigations, with some pleading guilty to charges related to misstating financial statements. While Berkshire believes these matters will not have a material adverse effect on its business, they are significant ongoing legal proceedings.

BRK-B/BRK-A 10-Q Quarterly Report Q3 FY2005

Summary

Berkshire Hathaway Inc. reported solid financial performance for the third quarter and first nine months of 2005, despite significant catastrophe losses impacting its insurance segment. Net earnings for the nine months ended September 30, 2005, were $3.4 billion, a decrease from $4.0 billion in the prior year period, largely due to higher insurance losses. However, the company demonstrated strong revenue growth across its diverse business segments, including insurance, non-insurance operations, and finance. Significant investments were made in acquisitions, including Medical Protective Corporation and Forest River, Inc., bolstering the company's portfolio. The company's balance sheet remains robust, with shareholders' equity at $89.5 billion and substantial cash and invested assets. While the insurance underwriting segment experienced a net loss of $475 million for the nine-month period primarily due to $2.99 billion in catastrophe losses from Hurricanes Katrina and Rita, strong investment income and robust earnings from non-insurance businesses helped to offset these impacts. The company also reported a significant unrealized gain on its pending conversion of MidAmerican Energy Holdings Company stock, anticipating full consolidation in early 2006.

Key Highlights

1Net earnings for the first nine months of 2005 were $3.4 billion, down from $4.0 billion in the prior year, impacted by substantial catastrophe losses.
2Total revenues increased to $56.3 billion for the first nine months of 2005 from $54.4 billion in the same period of 2004.
3Insurance underwriting segment experienced a net loss of $475 million for the first nine months of 2005, primarily due to $2.99 billion in losses from Hurricanes Katrina and Rita.
4Acquisitions of Medical Protective Corporation and Forest River, Inc. were completed, with aggregate consideration of $1.8 billion for 2005 acquisitions.
5Shareholders' equity remained strong, totaling $89.5 billion as of September 30, 2005.
6Investment portfolio saw significant gains, including a pending $5 billion pre-tax gain from the exchange of Gillette shares for Procter & Gamble shares.
7Berkshire Hathaway Finance Corporation issued $5.25 billion in medium-term notes to finance loan portfolio acquisitions.

BERKSHIRE HATHAWAY INC Quarterly Report for Q3 Ended Sep 30, 2005

Summary

Key Highlights

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