01—Abstract
Summary
Summary of the 8-K filed February 24, 2025. Cited figures are marked; the original filing is the authoritative source.
Berkshire Hathaway's Q4 and full-year 2024 earnings release, furnished under Item 2.02 of this 8-K, shows that reported net earnings are heavily distorted by investment gains and losses.
Full-year 2024 net earnings attributable to Berkshire shareholders were $88.995 billiona, down from $96.223 billion in 2023, while Q4 2024 net earnings were $19.694 billion versus $37.574 billion a year earlier. Investment gains/losses accounted for much of the swing: after-tax losses of about $38.1 billion from changes in unrealized equity gains, offset by $79.6 billion of after-tax realized gains for the full year, produced a net investment gain of $41.558 billion for 2024 versus $58.873 billion in 2023. Operating earnings, which exclude investment gains and losses, are the more useful measure of underlying performance.
They rose to $47.437 billionb for full-year 2024 from $37.350 billion in 2023, and to $14.527 billion in Q4 2024 from $8.481 billion. Insurance underwriting earnings jumped to $9.020 billion from $5.428 billion, and insurance investment income rose to $13.670 billion from $9.567 billion. BNSF was slightly lower at $5.031 billion, while Berkshire Hathaway Energy grew to $3.730 billion from $2.331 billion.
Other controlled businesses were roughly flat at $13.072 billionc. Insurance float reached about $171 billion, up $2 billion year over year, and Berkshire repurchased roughly $2.9 billion of its shares in 2024.
The release itself cautions that the limited information it contains is not adequate for an informed investment decision and directs investors to the 2024 Annual Report. Investors should weigh the operating earnings trend and float growth more heavily than quarterly per-share GAAP figures, which the company itself describes as potentially misleading.
02—Key points
Key Highlights
- Full-year 2024 operating earnings rose about 27% to $47.437 billion from $37.350 billion in 2023, led by insurance underwriting and investment income.
- Full-year 2024 GAAP net earnings attributable to Berkshire shareholders fell to $88.995 billion from $96.223 billion, mainly because of a smaller investment gain ($41.558 billion vs. $58.873 billion).
- Insurance underwriting earnings nearly doubled to $9.020 billion in 2024 from $5.428 billion, and Q4 2024 underwriting earnings were $3.409 billion versus $848 million in Q4 2023.
- Insurance investment income increased to $13.670 billion from $9.567 billion, reflecting higher interest rates on the float-funded portfolio.
- Berkshire Hathaway Energy operating earnings climbed to $3.730 billion from $2.331 billion, while BNSF was slightly lower at $5.031 billion versus $5.087 billion.
- Insurance float grew to about $171 billion at year-end 2024, up $2 billion from year-end 2023.
- Berkshire repurchased approximately $2.9 billion of its shares during 2024.
03—Questions
Frequently Asked Questions
Did Berkshire's earnings decline in 2024?
Reported GAAP net earnings fell to $88.995 billion from $96.223 billion, but operating earnings, which exclude investment gains and losses, rose to $47.437 billion from $37.350 billion. The GAAP decline reflects a smaller investment gain, not weaker underlying operations.
Why are the investment gains and losses so volatile?
GAAP requires changes in unrealized gains and losses on equity securities to flow through earnings each period. In 2024 this produced after-tax unrealized losses of about $38.1 billion for the full year, which were more than offset by $79.6 billion of realized gains. The company notes that quarterly investment results are usually not meaningful for assessing business performance.
Which segments drove the improvement in operating earnings?
Insurance underwriting (up $3.6 billion), insurance investment income (up $4.1 billion), and Berkshire Hathaway Energy (up $1.4 billion) were the main contributors. Other operating items also improved, including a $1.4 billion positive 'Other' line in 2024 versus a $175 million loss in 2023.
What does insurance float tell investors?
Float is the net liabilities Berkshire assumes under insurance contracts, which it can invest for its own benefit. It stood at about $171 billion at year-end 2024, a $2 billion increase, indicating a stable and substantial source of investable capital.
Should investors rely on this press release for an investment decision?
No. The company explicitly states that the press release contains limited information and is not adequate for an informed investment judgment. Investors are directed to the 2024 Annual Report for complete financial details and management commentary.
04—Continue