10-QPeriod: Q3 FY2021

BERKSHIRE HATHAWAY INC Quarterly Report for Q3 Ended Sep 30, 2021

Filed November 8, 2021For Securities:BRK-BBRK-A

Summary

Berkshire Hathaway Inc. (BRK-B) reported strong financial results for the first nine months of 2021, with net earnings attributable to shareholders reaching $50.15 billion, a significant increase from $6.69 billion in the same period of 2020. This growth was primarily driven by substantial investment and derivative gains, which totaled $38.02 billion for the nine months, compared to $1.39 billion in the prior year. Operating businesses also showed solid performance, with revenue increasing to $204.30 billion from $181.13 billion. The company maintained a robust financial position, with shareholders' equity growing to $481.08 billion as of September 30, 2021. Berkshire Hathaway continued its share repurchase program, acquiring $20.19 billion of its own stock during the first nine months of the year. The company also maintained substantial liquidity, with cash, cash equivalents, and U.S. Treasury Bills totaling $144.4 billion.

Financial Highlights

28 data points
Beta

Revenue

$70.58B

Net Income

$10.64B

15.1% Net Margin

Total Assets

$920.76B

Cash & Equivalents

$70.64B

Free Cash Flow

$8.49B

Financial Statements
Beta
Revenue$70.58B
Operating Expenses$63.40B
Net Income$10.64B

Key Highlights

  • 1Net earnings attributable to Berkshire Hathaway shareholders increased significantly to $50.15 billion for the first nine months of 2021, up from $6.69 billion in the same period of 2020.
  • 2Total revenues across all segments grew to $204.30 billion for the first nine months of 2021, compared to $181.13 billion in the prior year.
  • 3Investment and derivative gains surged to $38.02 billion in the first nine months of 2021, a substantial increase from $1.39 billion in the first nine months of 2020, largely contributing to the net earnings growth.
  • 4Shareholders' equity strengthened to $481.08 billion as of September 30, 2021, up from $451.34 billion at the end of 2020.
  • 5The company repurchased $20.19 billion of its Class A and Class B shares during the first nine months of 2021.
  • 6Cash, cash equivalents, and U.S. Treasury Bills remained robust at $144.4 billion as of September 30, 2021, providing significant financial flexibility.
  • 7Insurance underwriting operations experienced a net loss of $0.36 billion for the first nine months of 2021, impacted by catastrophe losses and higher claims frequency/severity in auto insurance, contrasting with an underwriting profit of $0.96 billion in the same period of 2020.

Frequently Asked Questions

The substantial increase in net earnings to $50.15 billion was primarily driven by a significant surge in investment and derivative gains, which rose to $38.02 billion compared to $1.39 billion in the prior year's comparable period. While operating businesses also performed well, the gains from investments in equity securities were the most impactful factor.

Insurance underwriting operations reported a net loss of $356 million for the first nine months of 2021, a decrease from a net profit of $956 million in the same period of 2020. This decline was influenced by approximately $2.2 billion in incurred losses from significant catastrophe events, such as Hurricane Ida and floods in Europe, and higher claims frequencies and severities in the auto insurance business, particularly at GEICO. Reductions in estimated prior year loss reserves partially offset these impacts.

Berkshire Hathaway continued its share repurchase program, acquiring $20.19 billion of its Class A and Class B common stock during the first nine months of 2021. The program allows for repurchases when management believes the stock price is below intrinsic value and will not be utilized if cash, cash equivalents, and U.S. Treasury Bills fall below $30 billion.

The company maintained a very strong capital base and significant liquidity. Shareholders' equity increased to $481.08 billion as of September 30, 2021. Furthermore, cash, cash equivalents, and U.S. Treasury Bills totaled $144.4 billion, underscoring Berkshire's commitment to financial strength and ample liquidity.