Berkshire Hathaway Q3 earnings fall to $22.1B
At September 30, 2026, Berkshire reported $1.303907 trillion in assets and $336.735 billion in short-term U.S. Treasury Bill investments.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Berkshire Hathaway Inc. reported third-quarter and first-nine-month 2026 results, with total revenue of $105.647 billion in the quarter versus $94.972 billion in 2025 and $301.130 billion for nine months versus $277.212 billion. Net earnings attributable to Berkshire shareholders were $22.112 billion in the quarter, compared with $30.796 billion, while nine-month earnings were $57.885 billion, compared with $47.769 billion. Third-quarter investment gains were $11.946 billion, versus $21.939 billion.
Berkshire completed its acquisition of Occidental Petroleum Corporation’s OxyChem chemicals business on January 2, 2026, for approximately $9.4 billion in cash consideration. It completed its acquisition of Taylor Morrison Home Corporation on July 24, 2026, for $72.50 per share in cash, or approximately $6.8 billion in aggregate. At September 30, 2026, short-term U.S. Treasury Bill investments were $336.735 billion and total assets were $1.303907 trillion. Nine-month net cash flows from operating activities were $33.914 billion, compared with $34.777 billion in 2025, and acquisitions of treasury stock were $13.757 billion.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointThird-quarter revenue was $105.647 billion, versus $94.972 billion in 2025.
- Moderate pointNine-month Berkshire shareholder earnings were $57.885 billion, versus $47.769 billion.
Negative
- Moderate pointThird-quarter Berkshire shareholder earnings were $22.112 billion, versus $30.796 billion in 2025.
Filing Explained
In the third quarter of 2026, Berkshire paid
Key Figures
Key Terms
equity method financial
retroactive reinsurance financial
incurred-but-not-reported financial
discount accretion financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were BRK’s third-quarter 2026 revenue and earnings?
Who retained the legacy environmental liabilities in BRK’s OxyChem deal?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number
(Exact name of Registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) |
(Address of principal executive office) (Zip Code)
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(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
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Name of each exchange on which registered
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Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Smaller reporting company |
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Emerging growth company |
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No
Number of shares of common stock outstanding as of October 28, 2026:
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Class B — |
BERKSHIRE HATHAWAY INC.
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Part I – Financial Information |
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Item 1. Financial Statements |
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Consolidated Balance Sheets—September 30, 2026 and December 31, 2025 |
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Consolidated Statements of Earnings—Third Quarter and First Nine Months 2026 and 2025 |
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Consolidated Statements of Comprehensive Income—Third Quarter and First Nine Months 2026 and 2025 |
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Consolidated Statements of Changes in Shareholders’ Equity—Third Quarter and First Nine Months 2026 and 2025 |
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Consolidated Statements of Cash Flows—First Nine Months 2026 and 2025 |
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Notes to Consolidated Financial Statements |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
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Controls and Procedures |
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Part II – Other Information |
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Item 1A. |
Risk Factors |
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Unregistered Sales of Equity Securities and Use of Proceeds and Issuer Repurchases of Equity Securities |
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Item 3. |
Defaults Upon Senior Securities |
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Mine Safety Disclosures |
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Other Information |
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Exhibits |
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Signature |
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1
Part I Financial Information
Item 1. Financial Statements
BERKSHIRE HATHAWAY INC.
and Subsidiaries
CONSOLIDATED BALANCE SHEETS
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Total assets |
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——————
*
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See accompanying Notes to Consolidated Financial Statements
2
BERKSHIRE HATHAWAY INC.
and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(dollars in millions)
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Liabilities: |
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Unpaid losses and loss adjustment expenses - retroactive reinsurance |
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Unearned insurance premiums |
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Accounts payable, accruals and other liabilities |
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Payable for purchases of U.S. Treasury Bills |
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Aircraft repurchase liabilities and unearned lease revenues |
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Notes payable and other borrowings |
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Railroad, Utilities and Energy: |
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Accounts payable, accruals and other liabilities |
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Regulatory liabilities |
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Notes payable and other borrowings |
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Income taxes, principally deferred |
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Total liabilities |
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Shareholders’ equity: |
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Common stock at par value |
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Capital in excess of par value |
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Treasury stock, at cost |
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Berkshire shareholders’ equity |
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Noncontrolling interests |
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Total shareholders’ equity |
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Total liabilities and shareholders’ equity |
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See accompanying Notes to Consolidated Financial Statements
3
BERKSHIRE HATHAWAY INC.
and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS
(dollars in millions except per share amounts)
(Unaudited)
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Third Quarter |
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First Nine Months |
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2026 |
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2025 |
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2025 |
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Revenues: |
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Insurance and Other: |
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Insurance premiums earned |
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Sales and service revenues |
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Leasing revenues |
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Railroad, Utilities and Energy: |
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Utilities and energy operating revenues |
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Total revenues |
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Investment gains (losses) |
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Costs and expenses: |
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Insurance and Other: |
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Insurance losses and loss adjustment expenses |
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Life, annuity and health insurance benefits |
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Insurance underwriting expenses |
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Cost of sales and services |
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Cost of leasing |
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Selling, general and administrative expenses |
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Interest expense |
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Railroad, Utilities and Energy: |
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Railroad transportation expenses |
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Utilities and energy cost of sales and other expenses |
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Other expenses |
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Interest expense |
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Total costs and expenses |
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Earnings before income taxes and equity method earnings |
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Equity method earnings (losses) |
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Earnings before income taxes |
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Income tax expense |
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Net earnings |
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Earnings attributable to noncontrolling interests |
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Net earnings attributable to Berkshire shareholders |
$ |
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$ |
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$ |
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$ |
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Net earnings per average equivalent Class A share |
$ |
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$ |
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$ |
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$ |
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Net earnings per average equivalent Class B share* |
$ |
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$ |
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$ |
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$ |
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Average equivalent Class A shares outstanding |
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Average equivalent Class B shares outstanding |
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——————
*
See accompanying Notes to Consolidated Financial Statements
4
BERKSHIRE HATHAWAY INC.
and Subsidiaries
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(dollars in millions)
(Unaudited)
|
Third Quarter |
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First Nine Months |
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2026 |
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2025 |
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2026 |
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2025 |
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Net earnings |
$ |
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$ |
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$ |
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$ |
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Other comprehensive income: |
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Unrealized gains (losses) on investments |
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Applicable income taxes |
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Foreign currency translation |
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Applicable income taxes |
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( |
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( |
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Long-duration insurance contract discount rate changes |
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Applicable income taxes |
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Defined benefit pension plans |
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Applicable income taxes |
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Other, net |
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Other comprehensive income, net |
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Comprehensive income |
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Comprehensive income attributable to noncontrolling interests |
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Comprehensive income attributable to Berkshire shareholders |
$ |
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$ |
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See accompanying Notes to Consolidated Financial Statements
5
BERKSHIRE HATHAWAY INC.
and Subsidiaries
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(dollars in millions)
(Unaudited)
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Berkshire shareholders’ equity |
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Common stock |
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Accumulated |
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Retained |
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Treasury |
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Non- |
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Total |
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2026 |
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Balance at December 31, 2025 |
$ |
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$ |
( |
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$ |
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$ |
( |
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$ |
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$ |
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Net earnings |
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— |
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Other comprehensive income, net |
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— |
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— |
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Acquisitions of common stock |
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Transactions with noncontrolling interests |
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— |
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— |
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— |
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( |
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Balance at March 31, 2026 |
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Net earnings |
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— |
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— |
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Other comprehensive income, net |
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— |
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— |
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Acquisitions of common stock |
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— |
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( |
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— |
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Transactions with noncontrolling interests |
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Balance at June 30, 2026 |
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Net earnings |
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Other comprehensive income, net |
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Acquisitions of common stock |
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Transactions with noncontrolling interests |
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— |
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( |
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Balance at September 30, 2026 |
$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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2025 |
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Balance at December 31, 2024 |
$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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Net earnings |
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Other comprehensive income, net |
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Transactions with noncontrolling interests |
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— |
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Balance at March 31, 2025 |
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Net earnings |
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— |
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— |
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Other comprehensive income, net |
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Transactions with noncontrolling interests |
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— |
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— |
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— |
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( |
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( |
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Balance at June 30, 2025 |
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( |
) |
|
|
|
( |
) |
|
|
|
|
||||
Net earnings |
|
— |
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|||
Other comprehensive income, net |
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
( |
) |
|
( |
) |
Transactions with noncontrolling interests |
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
( |
) |
Balance at September 30, 2025 |
$ |
|
$ |
( |
) |
$ |
|
$ |
( |
) |
$ |
|
$ |
|
||||
See accompanying Notes to Consolidated Financial Statements
6
BERKSHIRE HATHAWAY INC.
and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in millions)
(Unaudited)
|
|
First Nine Months |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net earnings |
|
$ |
|
|
$ |
|
||
Adjustments to reconcile net earnings to operating cash flows: |
|
|
|
|
|
|
||
Investment (gains) losses |
|
|
( |
) |
|
|
( |
) |
Depreciation and amortization |
|
|
|
|
|
|
||
Discount accretion on investments, principally U.S. Treasury Bills |
|
|
( |
) |
|
|
( |
) |
Other |
|
|
( |
) |
|
|
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Unpaid losses and loss adjustment expenses |
|
|
|
|
|
|
||
Deferred charges - retroactive reinsurance |
|
|
|
|
|
|
||
Unearned insurance premiums |
|
|
|
|
|
|
||
Receivables and originated loans |
|
|
( |
) |
|
|
( |
) |
Other assets |
|
|
( |
) |
|
|
( |
) |
Other liabilities |
|
|
|
|
|
|
||
Income taxes |
|
|
|
|
|
|
||
Net cash flows from operating activities |
|
|
|
|
|
|
||
Cash flows from investing activities: |
|
|
|
|
|
|
||
Purchases of equity securities |
|
|
( |
) |
|
|
( |
) |
Sales of equity securities |
|
|
|
|
|
|
||
Purchases of U.S. Treasury Bills and fixed maturity securities |
|
|
( |
) |
|
|
( |
) |
Sales of U.S. Treasury Bills and fixed maturity securities |
|
|
|
|
|
|
||
Redemptions and maturities of U.S. Treasury Bills and fixed maturity securities |
|
|
|
|
|
|
||
Acquisitions of businesses, net of cash acquired |
|
|
( |
) |
|
|
( |
) |
Purchases of property, plant and equipment and equipment held for lease |
|
|
( |
) |
|
|
( |
) |
Other |
|
|
|
|
|
|
||
Net cash flows from investing activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
||
Proceeds from borrowings of insurance and other businesses |
|
|
|
|
|
|
||
Repayments of borrowings of insurance and other businesses |
|
|
( |
) |
|
|
( |
) |
Proceeds from borrowings of railroad, utilities and energy businesses |
|
|
|
|
|
|
||
Repayments of borrowings of railroad, utilities and energy businesses |
|
|
( |
) |
|
|
( |
) |
Changes in short-term borrowings, net |
|
|
( |
) |
|
|
|
|
Acquisitions of treasury stock |
|
|
( |
) |
|
|
— |
|
Other, principally transactions with noncontrolling interests |
|
|
( |
) |
|
|
( |
) |
Net cash flows from financing activities |
|
|
( |
) |
|
|
( |
) |
Effects of foreign currency exchange rate changes |
|
|
( |
) |
|
|
|
|
Increase (decrease) in cash and cash equivalents and restricted cash |
|
|
( |
) |
|
|
|
|
Cash and cash equivalents and restricted cash at the beginning of the year* |
|
|
|
|
|
|
||
Cash and cash equivalents and restricted cash at the end of the third quarter* |
|
$ |
|
|
$ |
|
||
* Cash and cash equivalents and restricted cash are comprised of: |
|
|
|
|
|
|
||
Beginning of the year— |
|
|
|
|
|
|
||
Insurance and Other |
|
$ |
|
|
$ |
|
||
Railroad, Utilities and Energy |
|
|
|
|
|
|
||
Restricted cash included in other assets |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
End of the third quarter— |
|
|
|
|
|
|
||
Insurance and Other |
|
$ |
|
|
$ |
|
||
Railroad, Utilities and Energy |
|
|
|
|
|
|
||
Restricted cash included in other assets |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
See accompanying Notes to Consolidated Financial Statements
7
BERKSHIRE HATHAWAY INC.
and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2026
Note 1. General
The accompanying unaudited Consolidated Financial Statements include the accounts of Berkshire Hathaway Inc. (“Berkshire” or “Company”) consolidated with the accounts of all subsidiaries and affiliates in which Berkshire holds a controlling financial interest as of the financial statement date. In these notes, the terms “us,” “we” or “our” refer to Berkshire and its consolidated subsidiaries. Reference is made to Berkshire’s most recently issued Annual Report on Form 10-K (“Annual Report”), which includes information necessary or useful to understanding Berkshire’s businesses and financial statement presentations. Our significant accounting policies and practices were presented as Note 1 to the Consolidated Financial Statements included in the Annual Report.
Financial information in this Quarterly Report reflects all adjustments that are, in the opinion of management, necessary to a fair statement of results for the interim periods in accordance with accounting principles generally accepted in the United States (“GAAP”). For several reasons, our results for interim periods may not be indicative of results to be expected for the year. The timing and magnitude of catastrophe losses incurred by insurance subsidiaries and the estimation error inherent to the process of determining liabilities for unpaid losses of insurance subsidiaries can be more significant to results of interim periods than to results for a full year. Changes in market prices of our investments in equity securities and the related changes in unrealized gains and losses will produce significant volatility in our interim and annual earnings. In addition, gains and losses from the periodic revaluation of certain assets and liabilities denominated in foreign currencies and asset impairment charges may cause significant variations in periodic net earnings.
Significant estimates are used in the preparation of our Consolidated Financial Statements, including those associated with evaluations of certain long-lived assets, goodwill and indefinite-lived intangible assets for impairment, expected credit losses on amounts owed to us and the estimation of losses assumed under insurance and reinsurance contracts. Estimates may be subject to significant adjustments in future periods due to ongoing macroeconomic and geopolitical events, as well as changes in industry or company-specific factors. Actual results may differ from the estimates included in our Consolidated Financial Statements.
In November 2024, the Financial Accounting Standards Board issued Accounting Standards Update 2024-03, “Disaggregation of Income Statement Expenses” (“ASU 2024-03”), which requires disclosure in the notes to the financial statements of specific categories underlying certain expense captions on the income statement, as well as certain qualitative disclosures. ASU 2024-03 may be adopted prospectively or retrospectively and is effective for annual reporting periods beginning after December 15, 2026, with early adoption permitted. We are evaluating the impacts this pronouncement will have on disclosures in our Consolidated Financial Statements.
Note 2. Business acquisitions
Our long-held strategy is to acquire businesses that we believe possess consistent earnings power, good returns on equity and able and honest management. Financial results attributable to a business acquisition are included in our Consolidated Financial Statements beginning on the acquisition date.
On
On
8
Notes to Consolidated Financial Statements
Note 2. Business acquisitions
The combined preliminary values of OxyChem and TMHC’s assets acquired and liabilities assumed as of the respective acquisition dates are summarized as follows (in millions).
Cash and cash equivalents |
$ |
|
|
Inventories |
|
|
|
Property, plant and equipment |
|
|
|
Goodwill and other intangible assets |
|
|
|
Other assets |
|
|
|
Assets acquired |
$ |
|
|
|
|
|
|
Accounts payable, accruals and other liabilities |
$ |
|
|
Notes payable and other borrowings |
|
|
|
Liabilities assumed |
|
|
|
Net assets |
$ |
|
|
Note 3. Investments in fixed maturity securities
Investments in fixed maturity securities are summarized as follows (in millions).
|
|
Amortized |
|
|
Unrealized |
|
|
Unrealized |
|
|
Fair |
|
||||
September 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Treasury, U.S. government corporations and agencies |
|
$ |
|
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
|
||
Foreign governments |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Corporate and other |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
December 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Treasury, U.S. government corporations and agencies |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|||
Foreign governments |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Corporate and other |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
Investments in fixed maturity securities are generally classified as available-for-sale. As of September 30, 2026, approximately
|
|
Due in one |
|
|
Due after one |
|
|
Due after five |
|
|
Due after |
|
|
Mortgage- |
|
|
Total |
|
||||||
Amortized cost |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Fair value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
9
Notes to Consolidated Financial Statements
Note 4. Investments in equity securities
Investments in equity securities are summarized as follows (in millions).
|
Cost Basis |
|
|
Net Unrealized |
|
|
Fair Value |
|
|||
September 30, 2026 |
|
|
|
|
|
|
|
|
|||
Banks, insurance and finance |
$ |
|
|
$ |
|
|
$ |
|
|||
Consumer products |
|
|
|
|
|
|
|
|
|||
Commercial, industrial and other |
|
|
|
|
|
|
|
|
|||
|
$ |
|
|
$ |
|
|
$ |
|
|||
December 31, 2025 |
|
|
|
|
|
|
|
|
|||
Banks, insurance and finance |
$ |
|
|
$ |
|
|
$ |
|
|||
Consumer products |
|
|
|
|
|
|
|
|
|||
Commercial, industrial and other |
|
|
|
|
|
|
|
|
|||
|
$ |
|
|
$ |
|
|
$ |
|
|||
Our investments in equity securities over the years have been concentrated in relatively few companies. The fair value of our
Additionally, we own common stock of The Kraft Heinz Company (“Kraft Heinz”) and Occidental, which we account for under the equity method. See Note 5. Since 2019, we have also owned Occidental non-voting Cumulative Perpetual Preferred Stock and common stock warrants. These investments are recorded at fair value and included as equity securities in our Consolidated Balance Sheets, as such investments are not in-substance common stock under GAAP and are not eligible for the equity method.
The Occidental preferred stock accrues dividends at
As of September 30, 2026, we owned
Note 5. Equity method investments
Berkshire and its subsidiaries hold investments that are accounted for pursuant to the equity method. The most significant of these are our investments in the common stock of Kraft Heinz and Occidental. As of September 30, 2026, we owned
We also own a
10
Notes to Consolidated Financial Statements
Note 5. Equity method investments
Our investments in Kraft Heinz, Occidental and Berkadia are summarized as follows (in millions). Kraft Heinz and Occidental common stocks are publicly-traded and the fair values are based on quoted market prices as of our balance sheet dates. The carrying values of Kraft Heinz and Occidental include reductions for other-than-temporary impairment losses recorded in our second and fourth quarters of 2025, respectively.
|
Carrying Value |
|
|
Fair Value |
|
||||||||||
|
September 30, |
|
|
December 31, |
|
|
September 30, |
|
|
December 31, |
|
||||
Kraft Heinz |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Occidental |
|
|
|
|
|
|
|
|
|
|
|
||||
Berkadia |
|
|
|
|
|
|
|
|
|
|
|
||||
|
$ |
|
|
$ |
|
|
|
|
|
|
|
||||
Our equity in earnings and distributions received from equity method investments are as follows (in millions).
|
Equity in Earnings |
|
|
Distributions Received |
|
||||||||||||||||||||||||||
|
Third Quarter |
|
|
First Nine Months |
|
|
Third Quarter |
|
|
First Nine Months |
|
||||||||||||||||||||
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||||||
Kraft Heinz* |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Occidental* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Berkadia |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
——————
*
As of September 30, 2026, the carrying value of our investment in Kraft Heinz common stock exceeded fair value by $
We recorded a pre-tax impairment loss of approximately $
As a result of the impairment loss recorded in the second quarter of 2025, Berkshire’s share of Kraft Heinz shareholders’ equity exceeded Berkshire’s equity method carrying value by approximately $
On May 19, 2025, Berkshire’s representatives on the Kraft Heinz Board of Directors resigned. Since the timing and extent of financial information we receive from Kraft Heinz became limited to the information Kraft Heinz makes publicly available, we concluded our receipt of such information was no longer sufficiently timely for concurrent inclusion in our Consolidated Financial Statements. Thus, we began recognizing the equity method effects attributable to this investment on a one-quarter lag beginning with our second quarter of 2025.
11
Notes to Consolidated Financial Statements
Note 5. Equity method investments
Summarized financial information of Kraft Heinz follows (in millions).
|
June 27, |
|
|
September 27, |
|
||
Assets |
$ |
|
|
$ |
|
||
Liabilities |
|
|
|
|
|
||
|
Quarter Ended |
|
|
Quarter Ended |
|
|
Nine Months Ended |
|
|
Six Months Ended |
|
||||
Net sales |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Net losses attributable to Kraft Heinz common shareholders |
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net losses attributable to Kraft Heinz common shareholders included after-tax goodwill and indefinite-lived intangible asset impairment losses of $
Summarized financial information of Occidental follows (in millions).
|
June 30, |
|
|
September 30, |
|
||
Assets |
$ |
|
|
$ |
|
||
Liabilities |
|
|
|
|
|
||
|
Quarter Ended June 30, |
|
|
Nine Months Ended June 30, |
|
||||||||||
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Total revenues and other income |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Net earnings attributable to Occidental common shareholders |
|
|
|
|
|
|
|
|
|
|
|
||||
Net earnings attributable to Occidental common shareholders in its first six months of 2026 included an after-tax gain of approximately $
Note 6. Investment gains (losses)
Investment gains (losses) are summarized as follows (in millions).
|
Third Quarter |
|
|
First Nine Months |
|
||||||||||
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Equity securities: |
|
|
|
|
|
|
|
|
|
|
|
||||
Change in unrealized investment gains (losses) during the |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Investment gains (losses) during the period on securities sold |
|
|
|
|
|
|
|
|
|
|
( |
) |
|||
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fixed maturity securities: |
|
|
|
|
|
|
|
|
|
|
|
||||
Gross realized gains |
|
|
|
|
|
|
|
|
|
|
|
||||
Gross realized losses |
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Other |
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Equity securities gains and losses include unrealized gains and losses from changes in fair values during the period on equity securities we owned at the end of the period, as well as gains and losses on securities we sold during the period. In the preceding table, investment gains and losses on equity securities sold during the period represent the difference between the sales proceeds and the fair value of the equity securities sold at the beginning of the applicable period or, if later, the purchase date.
12
Notes to Consolidated Financial Statements
Note 6. Investment gains (losses)
Proceeds from sales of equity securities were approximately $
Note 7. Loans and finance receivables
Loans and finance receivables are principally manufactured home installment loans, and to a lesser extent, commercial loans and certain site-built home loans and are summarized as follows (in millions).
|
September 30, |
|
|
December 31, |
|
||
Loans and finance receivables, before allowances and discounts |
$ |
|
|
$ |
|
||
Allowances for credit losses |
|
( |
) |
|
|
( |
) |
Unamortized acquisition discounts and points |
|
( |
) |
|
|
( |
) |
|
$ |
|
|
$ |
|
||
Reconciliations of the allowance for credit losses on loans and finance receivables follow (in millions).
|
2026 |
|
|
2025 |
|
||
Balance at the beginning of the year |
$ |
|
|
$ |
|
||
Provision for credit losses |
|
|
|
|
|
||
Charge-offs, net of recoveries |
|
( |
) |
|
|
( |
) |
Balance at September 30 |
$ |
|
|
$ |
|
||
As of September 30, 2026, substantially all manufactured and certain site-built home loans were evaluated collectively for impairment, and we considered approximately
|
Origination Year |
|
|
|
|
||||||||||||||||||||||
|
2026 |
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
2022 |
|
|
Prior |
|
|
Total |
|
|||||||
Performing |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Non-performing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Note 8. Other receivables
Other receivables are summarized as follows (in millions).
|
September 30, |
|
|
December 31, |
|
||
Insurance and other: |
|
|
|
|
|
||
Insurance premiums receivable |
$ |
|
|
$ |
|
||
Reinsurance recoverables |
|
|
|
|
|
||
Trade receivables |
|
|
|
|
|
||
Other |
|
|
|
|
|
||
Allowances for credit losses |
|
( |
) |
|
|
( |
) |
|
$ |
|
|
$ |
|
||
Railroad, utilities and energy: |
|
|
|
|
|
||
Trade receivables |
$ |
|
|
$ |
|
||
Other |
|
|
|
|
|
||
Allowances for credit losses |
|
( |
) |
|
|
( |
) |
|
$ |
|
|
$ |
|
||
Provisions for credit losses with respect to other receivables were $
13
Notes to Consolidated Financial Statements
Note 9. Inventories
Inventories of our insurance and other businesses are comprised of the following (in millions).
|
September 30, |
|
|
December 31, |
|
||
Raw materials and supplies |
$ |
|
|
$ |
|
||
Work in process |
|
|
|
|
|
||
Finished manufactured goods |
|
|
|
|
|
||
Goods acquired for resale |
|
|
|
|
|
||
Real estate inventory |
|
|
|
|
|
||
|
$ |
|
|
$ |
|
||
Real estate inventory includes the costs of developing and constructing housing communities and site-built homes. The increase in real estate inventory during 2026 was primarily attributable to the TMHC acquisition in July. Inventories, materials and supplies of our railroad, utilities and energy businesses are included in other assets and were approximately $
Note 10. Property, plant and equipment
A summary of property, plant and equipment of our insurance and other businesses follows (in millions). The increase in property, plant and equipment in 2026 was primarily attributable to the OxyChem and TMHC acquisitions.
|
|
September 30, |
|
|
December 31, |
|
||
Land, buildings and improvements |
|
$ |
|
|
$ |
|
||
Machinery and equipment |
|
|
|
|
|
|
||
Furniture, fixtures and other |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Accumulated depreciation |
|
|
( |
) |
|
|
( |
) |
|
|
$ |
|
|
$ |
|
||
A summary of property, plant and equipment of our railroad, utilities and energy businesses follows (in millions). The utility generation, transmission and distribution systems and interstate natural gas pipeline assets are owned by regulated public utility and natural gas pipeline subsidiaries.
|
|
September 30, |
|
|
December 31, |
|
||
Railroad: |
|
|
|
|
|
|
||
Land, track structure and other roadway |
|
$ |
|
|
$ |
|
||
Locomotives, freight cars and other equipment |
|
|
|
|
|
|
||
Construction in progress |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Accumulated depreciation |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
Utilities and energy: |
|
|
|
|
|
|
||
Utility generation, transmission and distribution systems |
|
|
|
|
|
|
||
Interstate natural gas pipeline assets |
|
|
|
|
|
|
||
Independent power plants and other |
|
|
|
|
|
|
||
Construction in progress |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Accumulated depreciation |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
14
Notes to Consolidated Financial Statements
Note 10. Property, plant and equipment
Property, plant and equipment depreciation expense for the first nine months of 2026 and 2025 is summarized below (in millions).
|
|
2026 |
|
|
2025 |
|
||
Insurance and other |
|
$ |
|
|
$ |
|
||
Railroad, utilities and energy |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
Note 11. Equipment held for lease
Equipment held for lease includes railcars, aircraft and other equipment, including over-the-road trailers, intermodal tank containers, cranes, storage units and furniture. Equipment held for lease is summarized below (in millions).
|
September 30, |
|
|
December 31, |
|
||
Railcars |
$ |
|
|
$ |
|
||
Aircraft |
|
|
|
|
|
||
Other |
|
|
|
|
|
||
|
|
|
|
|
|
||
Accumulated depreciation |
|
( |
) |
|
|
( |
) |
|
$ |
|
|
$ |
|
||
Equipment held for lease depreciation expense in the first nine months was $
|
Third Quarter |
|
|
First Nine Months |
|
||||||||||
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Fixed |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Variable |
|
|
|
|
|
|
|
|
|
|
|
||||
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Note 12. Goodwill and other intangible assets
Reconciliations of the changes in the carrying value of goodwill for the first nine months of 2026 and for the year ended December 31, 2025 follow (in millions).
|
September 30, |
|
|
December 31, |
|
||
Balance at the beginning of the year* |
$ |
|
|
$ |
|
||
Business acquisitions |
|
|
|
|
|
||
Other, including impairments and foreign currency translation |
|
( |
) |
|
|
( |
) |
Balance at the end of the period* |
$ |
|
|
$ |
|
||
——————
*
15
Notes to Consolidated Financial Statements
Note 12. Goodwill and other intangible assets
Other intangible assets are summarized below (in millions).
|
September 30, 2026 |
|
|
December 31, 2025 |
|
||||||||||||||
|
Gross |
|
Accumulated |
|
Net |
|
|
Gross |
|
Accumulated |
|
Net |
|
||||||
Insurance and other: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Customer relationships |
$ |
|
$ |
|
$ |
|
|
$ |
|
$ |
|
$ |
|
||||||
Trademarks and trade names |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Patents and technology |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
$ |
|
$ |
|
$ |
|
|
$ |
|
$ |
|
$ |
|
||||||
Railroad, utilities and energy:* |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Customer relationships and contracts |
$ |
|
$ |
|
$ |
|
|
$ |
|
$ |
|
$ |
|
||||||
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
$ |
|
$ |
|
$ |
|
|
$ |
|
$ |
|
$ |
|
||||||
——————
*
Intangible assets with indefinite lives were $
Note 13. Unpaid losses and loss adjustment expenses
Reconciliations of the changes in unpaid losses and loss adjustment expenses (“LAE”) liabilities (“claim liabilities”), excluding liabilities under retroactive reinsurance contracts (see Note 14), follow (in millions).
|
2026 |
|
|
2025 |
|
||
Balance at the beginning of the year: |
|
|
|
|
|
||
Gross liabilities |
$ |
|
|
$ |
|
||
Reinsurance recoverable on unpaid losses |
|
( |
) |
|
|
( |
) |
Net liabilities |
|
|
|
|
|
||
Losses and LAE incurred: |
|
|
|
|
|
||
Current accident year |
|
|
|
|
|
||
Prior accident years |
|
( |
) |
|
|
( |
) |
Total |
|
|
|
|
|
||
Losses and LAE paid: |
|
|
|
|
|
||
Current accident year |
|
( |
) |
|
|
( |
) |
Prior accident years |
|
( |
) |
|
|
( |
) |
Total |
|
( |
) |
|
|
( |
) |
Foreign currency effect |
|
|
|
|
|
||
Balance at September 30: |
|
|
|
|
|
||
Net liabilities |
|
|
|
|
|
||
Reinsurance recoverable on unpaid losses |
|
|
|
|
|
||
Gross liabilities |
$ |
|
|
$ |
|
||
Our claim liabilities under property and casualty insurance and reinsurance contracts are based upon estimates of the ultimate claim costs associated with claim events that have occurred as of the balance sheet date and include estimates for incurred-but-not-reported (“IBNR”) claims. Losses and LAE incurred and paid in the preceding table related to events occurring in the current year (“current accident year”) and events occurring in all prior years (“prior accident years”). Losses and LAE incurred and paid are net of reinsurance recoveries. We experienced no significant catastrophe events (losses exceeding $
16
Notes to Consolidated Financial Statements
Note 13. Unpaid losses and loss adjustment expenses
We reduced estimated ultimate claim liabilities for prior accident years’ claims by $
Our primary insurance businesses reduced prior accident years’ ultimate claims estimates in the first nine months by $
Our reinsurance businesses reduced estimated ultimate claim liabilities for prior accident years in the first nine months of 2026 by $
Note 14. Retroactive reinsurance contracts
Retroactive reinsurance policies provide indemnification of losses and LAE of short-duration insurance contracts with respect to underlying loss events that occurred prior to the contract inception date. Exposures may include significant asbestos, environmental and other mass tort claims. Retroactive reinsurance contracts generally stipulate aggregate policy limits, and our exposure to such claims under these contracts is likewise limited.
|
2026 |
|
|
2025 |
|
||
Balance at the beginning of the year |
$ |
|
|
$ |
|
||
Losses and LAE incurred |
|
( |
) |
|
|
|
|
Losses and LAE paid |
|
( |
) |
|
|
( |
) |
Foreign currency effect |
|
|
|
|
|
||
Balance at September 30 |
$ |
|
|
$ |
|
||
|
|
|
|
|
|
||
Losses and LAE incurred |
$ |
( |
) |
|
$ |
|
|
Deferred charge adjustments |
|
|
|
|
|
||
Losses and LAE incurred, including deferred charge adjustments |
$ |
|
|
$ |
|
||
We classify incurred and paid losses and LAE based on the inception dates of the contracts, which reflect when our exposure to losses began. Substantially all of the losses and LAE incurred and paid summarized in the preceding table related to contracts incepting prior to 2020. Losses and LAE incurred include changes in estimated ultimate liabilities and related adjustments to deferred charge assets arising from the changes in the estimated timing and amount of loss. In the third quarter of 2026, a retroactive reinsurance contract that incepted in 2016 was commuted and terminated with the counterparty in exchange for a payment of $
Note 15. Long-duration insurance contracts
A summary of our long-duration life, annuity and health insurance benefits liabilities disaggregated by our principal product categories follows (in millions).
|
September 30, |
|
|||||
|
2026 |
|
|
2025 |
|
||
Periodic payment annuity (“Annuities”) |
$ |
|
|
$ |
|
||
Life and health |
|
|
|
|
|
||
Other |
|
|
|
|
|
||
|
$ |
|
|
$ |
|
||
17
Notes to Consolidated Financial Statements
Note 15. Long-duration insurance contracts
Reconciliations of the liabilities for each of our principal product categories follow (in millions). This information reflects the changes in discounted present values of expected future policy benefits and expected future net premiums before reinsurance ceded.
|
Annuities |
|
|
Life and health |
|
||||||||||
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Expected future policy benefits: |
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at the beginning of the year |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Balance at the beginning of the year - original discount rates |
|
|
|
|
|
|
|
|
|
|
|
||||
Effects of cash flow assumption changes |
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Effects of actual versus expected experience |
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Change in benefits, net |
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Interest accrual |
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency effect |
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Balance at September 30 - original discount rates |
|
|
|
|
|
|
|
|
|
|
|
||||
Effects of changes in discount rate assumptions |
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance at September 30 |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||
Expected future net premiums: |
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at the beginning of the year |
|
|
|
|
|
|
$ |
|
|
$ |
|
||||
Balance at the beginning of the year - original discount rates |
|
|
|
|
|
|
|
|
|
|
|
||||
Effects of cash flow assumption changes |
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Effects of actual versus expected experience |
|
|
|
|
|
|
|
|
|
|
|
||||
Change in premiums, net |
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Interest accrual |
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency effect |
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at September 30 - original discount rates |
|
|
|
|
|
|
|
|
|
|
|
||||
Effects of changes in discount rate assumptions |
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Balance at September 30 |
|
|
|
|
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||
Liabilities for future policy benefits: |
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at September 30 |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Reinsurance recoverables |
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance at September 30, net of reinsurance recoverables |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Other information relating to our long-duration insurance liabilities as of September 30, 2026 and 2025 follows (dollars in millions).
|
Annuities |
|
|
Life and health |
|
||||||||||
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Undiscounted expected future gross premiums |
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
||
Discounted expected future gross premiums |
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Undiscounted expected future benefits |
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average discount rate |
|
% |
|
|
% |
|
|
% |
|
|
% |
||||
Weighted average accretion rate |
|
% |
|
|
% |
|
|
% |
|
|
% |
||||
Weighted average duration |
|
|
|
|
|
|
|
||||||||
18
Notes to Consolidated Financial Statements
Note 15. Long-duration insurance contracts
Gross premiums earned and interest expense before reinsurance ceded for the first nine months of 2026 and 2025 were as follows (in millions).
|
Gross premiums |
|
|
Interest expense |
|
||||||||||
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Annuities |
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
||
Life and health |
|
|
|
|
|
|
|
|
|
|
|
||||
Note 16. Notes payable and other borrowings
Notes payable and other borrowings of our insurance and other businesses are summarized below (dollars in millions). The weighted average interest rates and maturity date ranges are based on borrowings as of September 30, 2026.
|
|
Weighted |
|
|
September 30, |
|
|
December 31, |
|
|||
Insurance and other: |
|
|
|
|
|
|
|
|
|
|||
Berkshire Hathaway Inc. (“Berkshire”): |
|
|
|
|
|
|
|
|
|
|||
U.S. Dollar denominated due |
|
|
% |
|
$ |
|
|
$ |
|
|||
Euro denominated due |
|
|
% |
|
|
|
|
|
|
|||
Japanese Yen denominated due |
|
|
% |
|
|
|
|
|
|
|||
Berkshire Hathaway Finance Corporation (“BHFC”): |
|
|
|
|
|
|
|
|
|
|||
U.S. Dollar denominated due |
|
|
% |
|
|
|
|
|
|
|||
Great Britain Pound denominated due |
|
|
% |
|
|
|
|
|
|
|||
Euro denominated due |
|
|
% |
|
|
|
|
|
|
|||
Other subsidiary borrowings due |
|
|
% |
|
|
|
|
|
|
|||
Short-term subsidiary borrowings |
|
|
% |
|
|
|
|
|
|
|||
|
|
|
|
|
$ |
|
|
$ |
|
|||
Berkshire borrowings consist of senior unsecured debt. Berkshire repaid approximately $
Borrowings of BHFC, a wholly-owned finance subsidiary of Berkshire, consist of senior unsecured notes used to fund manufactured home loans originated or acquired and equipment held for lease of certain subsidiaries. BHFC borrowings are fully and unconditionally guaranteed by Berkshire. Berkshire also guarantees certain debt of other subsidiaries, aggregating approximately $
The carrying values of Berkshire and BHFC non-U.S. Dollar denominated senior notes (€
Notes payable and other borrowings of our railroad, utilities and energy businesses are summarized below (dollars in millions). The weighted average interest rates and maturity date ranges are based on borrowings as of September 30, 2026.
|
|
Weighted |
|
|
September 30, |
|
|
December 31, |
|
|||
Railroad, utilities and energy: |
|
|
|
|
|
|
|
|
|
|||
Berkshire Hathaway Energy Company (“BHE”) and subsidiaries: |
|
|
|
|
|
|
|
|
|
|||
BHE senior unsecured debt due |
|
|
% |
|
$ |
|
|
$ |
|
|||
Subsidiary and other debt due |
|
|
% |
|
|
|
|
|
|
|||
Short-term borrowings |
|
|
% |
|
|
|
|
|
|
|||
Burlington Northern Santa Fe LLC (“BNSF”) and subsidiaries due |
|
|
% |
|
|
|
|
|
|
|||
|
|
|
|
|
$ |
|
|
$ |
|
|||
19
Notes to Consolidated Financial Statements
Note 16. Notes payable and other borrowings
BHE subsidiary debt represents amounts issued pursuant to separate financing agreements. Substantially all of the assets of certain BHE subsidiaries are, or may be, pledged or encumbered to support or otherwise secure such debt. These borrowing arrangements generally contain various covenants, including those which pertain to leverage ratios, interest coverage ratios and/or debt service coverage ratios. BNSF’s borrowings are primarily senior unsecured debentures. As of September 30, 2026, BHE, BNSF and their subsidiaries were in compliance with all applicable debt covenants. Berkshire does not guarantee any debt, borrowings or lines of credit of BHE, BNSF or their subsidiaries.
In the first nine months of 2026, BHE subsidiaries issued $
Unused and available lines of credit and commercial paper capacity to support operations and provide additional liquidity for our subsidiaries were approximately $
Note 17. Fair value measurements
Our financial assets and liabilities are summarized below, with fair values shown according to the fair value hierarchy (in millions). The carrying values of cash and cash equivalents, U.S. Treasury Bills, other receivables and accounts payable, accruals and other liabilities are considered to be reasonable estimates of or otherwise approximate the fair values.
|
Carrying |
|
|
Fair Value |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|||||
September 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Investments in fixed maturity securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
U.S. Treasury, U.S. government corporations |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
||||
Foreign governments |
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
||||
Corporate and other |
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
||||
Investments in equity securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Investments in Kraft Heinz & Occidental common stock |
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
Loans and finance receivables |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Other assets |
|
|
|
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|
|
|
|
|
|
|
|
|
|
|||||
Other liabilities |
|
|
|
|
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|
|
|
|
|
|
|
|||||
Notes payable and other borrowings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Insurance and other |
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
||||
Railroad, utilities and energy |
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|||||
December 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Investments in fixed maturity securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
U.S. Treasury, U.S. government corporations |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
||||
Foreign governments |
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
||||
Corporate and other |
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
||||
Investments in equity securities |
|
|
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|
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|
|
|
|
|
|
|
|||||
Investments in Kraft Heinz & Occidental common stock |
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
Loans and finance receivables |
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
||||
Other assets |
|
|
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|
|
|
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|
|||||
Other liabilities |
|
|
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|
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|
|
|
|
|
|||||
Notes payable and other borrowings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Insurance and other |
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
||||
Railroad, utilities and energy |
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|||
20
Notes to Consolidated Financial Statements
Note 17. Fair value measurements
The fair values of substantially all of our financial instruments were measured using market or income approaches. The hierarchy for measuring fair value consists of Levels 1 through 3, which are described below.
Level 1 – Inputs represent unadjusted quoted prices for identical assets or liabilities exchanged in active markets.
Level 2 – Inputs include directly or indirectly observable inputs (other than Level 1 inputs) such as quoted prices for similar assets or liabilities exchanged in active or inactive markets; quoted prices for identical assets or liabilities exchanged in inactive markets; other inputs that may be considered in fair value determinations of the assets or liabilities, such as interest rates and yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates; and inputs that are derived principally from or corroborated by observable market data through correlation or other means. Pricing evaluations generally reflect discounted expected future cash flows, which incorporate yield curves for instruments with similar characteristics, such as credit ratings, estimated durations and yields for other instruments of the issuer or entities in the same industry sector.
Level 3 – Inputs include unobservable inputs used in the measurement of assets and liabilities. Management is required to use its own assumptions regarding unobservable inputs because there is little, if any, market activity in the assets or liabilities and it may be unable to corroborate the related observable inputs. Unobservable inputs require management to make certain projections and assumptions about the information that would be used by market participants in valuing assets or liabilities.
Reconciliations of significant assets and liabilities measured and carried at fair value on a recurring basis with the use of significant unobservable inputs (Level 3) follow (in millions).
|
Balance at the |
|
|
Gains (losses) |
|
|
Balance at |
|
|||
Investments in equity securities: |
|
|
|
|
|
|
|
|
|||
2026 |
$ |
|
|
$ |
|
|
$ |
|
|||
2025 |
|
|
|
|
|
|
|
|
|||
Quantitative information as of September 30, 2026 for the significant assets and liabilities measured and carried at fair value on a recurring basis with the use of significant unobservable inputs (Level 3) follows (dollars in millions).
|
Fair |
|
|
Principal Valuation |
|
Unobservable |
|
Weighted |
|
Investments in equity securities: |
|
|
|
|
|
|
|
|
|
Preferred stock |
$ |
|
|
Discounted cash flow |
|
Expected duration |
|
||
|
|
|
|
|
|
Discounts for liquidity |
|
||
Common stock warrants |
|
|
|
Warrant pricing model |
|
Expected duration |
|
||
|
|
|
|
|
|
Volatility |
|
||
Investments in equity securities in the preceding table include our investments in certain preferred stocks and common stock warrants, which do not have readily determinable market values as defined by GAAP. These investments are private placements and are not traded in securities markets. We applied discounted cash flow techniques in valuing the preferred stock and we made assumptions regarding the expected duration of the investment and the effects of illiquidity and subordination in liquidation. In valuing the common stock warrants, we used a warrant valuation model. While most of the inputs to the warrant model are observable, we made assumptions regarding the expected duration and volatility.
Note 18. Common stock
Changes in shares of Berkshire’s common stock are shown in the table below. In addition to our common stock,
|
Class A, $ |
|
|
Class B, $ |
|
||||||||||||||
|
Issued |
|
Treasury |
|
Outstanding |
|
|
Issued |
|
Treasury |
|
Outstanding |
|
||||||
Balance at December 31, 2025 |
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
|
|
||||
Conversions of Class A to |
|
( |
) |
|
— |
|
|
( |
) |
|
|
|
|
— |
|
|
|
||
Treasury stock acquired |
|
— |
|
|
( |
) |
|
( |
) |
|
|
— |
|
|
( |
) |
|
( |
) |
Balance at September 30, 2026 |
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
|
|
||||
21
Notes to Consolidated Financial Statements
Note 18. Common stock
Each Class A common share is entitled to
We provide earnings per share data on the Consolidated Statements of Earnings for average equivalent Class A shares outstanding and average equivalent Class B shares outstanding. Average equivalent Class A shares outstanding represents average Class A shares outstanding plus one-fifteen-hundredth (1/1,500) of the average Class B shares outstanding. Average equivalent Class B shares outstanding represents average Class B shares outstanding plus
Note 19. Income taxes
Our consolidated effective income tax rates were
The Organization for Economic Co-operation and Development (“OECD”) previously issued Pillar Two model rules introducing a global minimum tax of 15%. While the U.S. has not adopted the Pillar Two rules, various countries have enacted legislation to adopt the rules. In January 2026, the OECD issued additional guidance, including a safe harbor framework for certain U.S.-parented multinational groups. We do not currently expect these rules will have a material effect on our consolidated income taxes.
Note 20. Accumulated other comprehensive income
A summary of the net changes in after-tax accumulated other comprehensive income attributable to Berkshire shareholders follows (in millions).
|
Unrealized investment gains (losses) |
|
Foreign currency translation |
|
Long-duration insurance contracts |
|
Defined benefit pension plans |
|
Other |
|
Total |
|
||||||
2026 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance at the beginning of the year |
$ |
|
$ |
( |
) |
$ |
|
$ |
|
$ |
|
$ |
( |
) |
||||
Other comprehensive income |
|
( |
) |
|
( |
) |
|
|
|
( |
) |
|
( |
) |
|
|
||
Balance at September 30, 2026 |
$ |
|
$ |
( |
) |
$ |
|
$ |
|
$ |
|
$ |
( |
) |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
2025 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance at the beginning of the year |
$ |
|
$ |
( |
) |
$ |
|
$ |
|
$ |
|
$ |
( |
) |
||||
Other comprehensive income |
|
|
|
|
|
( |
) |
|
( |
) |
|
( |
) |
|
|
|||
Balance at September 30, 2025 |
$ |
|
$ |
( |
) |
$ |
|
$ |
|
$ |
|
$ |
( |
) |
||||
22
Notes to Consolidated Financial Statements
Note 21. Supplemental cash flow information
A summary of supplemental cash flow information for the first nine months of 2026 and 2025 follows (in millions).
|
2026 |
|
|
2025 |
|
||
Cash paid during the period for: |
|
|
|
|
|
||
Income taxes |
$ |
|
|
$ |
|
||
Interest: |
|
|
|
|
|
||
Insurance and other |
|
|
|
|
|
||
Railroad, utilities and energy |
|
|
|
|
|
||
Non-cash investing and financing activities: |
|
|
|
|
|
||
Liabilities assumed in connection with business acquisitions |
|
|
|
|
|
||
Note 22. Contingencies and commitments
We are parties in a variety of legal actions that routinely arise out of the normal course of business, including legal actions seeking to establish liability directly through insurance contracts or indirectly through reinsurance contracts issued by Berkshire subsidiaries. Plaintiffs occasionally seek punitive or exemplary damages. We do not currently believe that such normal and routine litigation will have a material effect on our financial condition or results of operations. Information concerning certain legal matters involving certain of our subsidiaries follows.
Wildfires
PacifiCorp, a wholly-owned subsidiary of Berkshire Hathaway Energy Company (“BHE”), operates as a regulated electric utility in Utah, Oregon, Wyoming and other Western states. PacifiCorp is party to a variety of legal actions arising from wildfires that occurred in 2020 and 2022. Such actions are described below.
2020 Wildfires and 2022 McKinney Fire
The 2020 Wildfires occurred in September 2020, when a severe weather event with high winds contributed to several major wildfires, resulting in real and personal property and natural resource damage, personal injuries and loss of life and widespread power outages in Oregon and Northern California. The wildfires spread across certain parts of PacifiCorp’s service territory and surrounding areas across multiple counties in Oregon and California, burning over
Both the U.S. Department of Agriculture Forest Service (“USFS”) and the Oregon Department of Forestry (“ODF”) completed investigation reports related to a wildland fire that was first reported outside the Santiam Canyon on August 16, 2020 (“Beachie Creek Fire”), approximately three weeks before the severe weather event described above. ODF’s report concluded that embers from the pre-existing Beachie Creek Fire caused 12 fires within the Santiam Canyon. ODF’s report also found that PacifiCorp’s power lines did not contribute to the overall spread of fire into the Santiam Canyon even though PacifiCorp’s power lines ignited seven spot fires within the Santiam Canyon that were each suppressed.
The Beachie Creek Fire that spread into the Santiam Canyon burned approximately
The 2022 McKinney Fire occurred on July 29, 2022, when a wildfire began in Siskiyou County, California within PacifiCorp’s service territory, burning over
23
Notes to Consolidated Financial Statements
Note 22. Contingencies and commitments
Complaints and Demands Associated with the Wildfires
A significant number of complaints and demands alleging similar claims related to the Wildfires have been filed in Oregon and California, including a class action complaint in Oregon associated with the 2020 Wildfires (the “James” case) for which certain jury verdicts were issued as described below. The plaintiffs seek damages for economic losses, noneconomic losses, including mental suffering, emotional distress, personal injury and loss of life, punitive damages, other damages and attorneys’ fees. Several insurance carriers also filed subrogation complaints in Oregon and California with similar allegations. Additionally, PacifiCorp received correspondence from the U.S. and Oregon Departments of Justice regarding the potential recovery of certain costs and damages alleged to have occurred on federal and state lands in connection with certain of the 2020 Wildfires. As described below, substantially all outstanding complaints and demands are associated with the 2020 Wildfires, specifically the James case and the state of Oregon demands.
Substantially all amounts sought in outstanding complaints and demands filed in Oregon are associated with the James mass complaints described below, as well as stayed cases for which motions have been filed for consolidation into the James case and state of Oregon demands. Oregon law provides for doubling of economic and property damages in the event the defendant is found to have acted with gross negligence, recklessness, willfulness or malice. Oregon law provides for trebling of damages associated with timber, shrubs and produce in the event the defendant is determined to have willfully and intentionally trespassed. For class actions, amounts specified by the plaintiffs in the complaints include amounts based on estimates of the potential class size, which ultimately may be significantly greater than estimated.
PacifiCorp has settled various claims associated with the 2020 and 2022 Wildfires, including all wrongful death claims and federal government demands and complaints. For the Archie Creek fire, Slater fire and 2022 McKinney Fire, settlements have been reached with substantially all plaintiffs. For the Santiam Canyon, Echo Mountain Complex, South Obenchain and 242 fires, while PacifiCorp settled claims with individual plaintiffs who were granted substitution of counsel in the James case, claims remain outstanding for a substantial number of plaintiffs associated with the James case. In addition, claims have been settled with certain Oregon wineries and with the federal government. PacifiCorp is also actively cooperating with the Oregon Department of Justice on resolving its alleged claims.
The James Case
On September 30, 2020, a class action complaint against PacifiCorp captioned Jeanyne James et al. v. PacifiCorp, (“James”) was filed in Oregon Circuit Court in Multnomah County, Oregon (“Multnomah County Circuit Court Oregon”). The complaint was filed by Oregon residents and businesses who sought to represent a class of all Oregon citizens and entities whose real or personal property was harmed beginning on September 7, 2020, by wildfires in Oregon allegedly caused by PacifiCorp. In November 2021, the plaintiffs filed an amended complaint to limit the class to include Oregon citizens allegedly impacted by the Santiam Canyon, Echo Mountain Complex, South Obenchain and 242 fires, as well as to add claims for noneconomic damages. The amended complaint alleged that PacifiCorp’s assets contributed to the Oregon wildfires occurring on or after September 7, 2020, and that PacifiCorp acted with gross negligence, among other things. The amended complaint seeks damages similar to those described above, including not less than $
The Multnomah County Circuit Court Oregon determined that the James case would be divided into a liability phase (“Phase I”) and a damages phase (“Phase II”). In June 2023, a jury in the Phase I liability trial found PacifiCorp’s conduct grossly negligent, reckless and willful as to each of the
Following the Phase I verdict,
24
Notes to Consolidated Financial Statements
Note 22. Contingencies and commitments
While PacifiCorp’s appeal of the Phase I verdict was pending, the Multnomah County Circuit Court Oregon held numerous Phase II trials in which a series of juries awarded damages to groups of James class members. The majority of these trials were scheduled pursuant to a case management order called “CMO No. 11.” PacifiCorp has filed notices of appeal for the subsequent jury verdicts in the Phase II trials once limited judgments are entered and any post-trial motions filed. The James jury verdicts to date have awarded total net damages of approximately $
The Oregon Court of Appeals’ April 2026 opinion reversing the Phase I verdict explained that the Multnomah County Circuit Court Oregon erred in instructing the jury that they could “assume that the evidence at the trial applies to all class members.” The Oregon Court of Appeals further concluded that the erroneous jury instruction “was prejudicial to PacifiCorp” because it “gave rise to some likelihood that the jury reached an erroneous result.” Because the Oregon Court of Appeals reversed and remanded on the instructional error issue presented in PacifiCorp’s appellate brief, it did not address the majority of PacifiCorp’s other appealed issues. However, the Oregon Court of Appeals emphasized that the Multnomah County Circuit Court Oregon has the authority on remand to reconsider its class certification decision and reconsider whether a single class is appropriate in this case. The Oregon Court of Appeals determined PacifiCorp was the prevailing party and awarded costs to PacifiCorp.
On May 13, 2026, the James plaintiffs filed a petition with the Oregon Supreme Court for review of the April 2026 Oregon Court of Appeals opinion. On June 25, 2026, the Oregon Supreme Court issued an order allowing the petition for review and oral argument was held on November 3, 2026.
Estimated Losses for and Settlements Associated with the Wildfires
A provision for a loss contingency is recorded when it is probable a liability has been incurred and the amount of loss can be reasonably estimated. PacifiCorp evaluates the related range of reasonably estimated losses and records a loss based on its best estimate within that range or the lower end of the range if there is no better estimate.
Based on the facts and circumstances available to PacifiCorp as of the date of this filing, including (i) cause and origin investigations; (ii) ongoing settlement and mediation activities; (iii) other litigation matters and upcoming legal proceedings; and (iv) the status of the James case, PacifiCorp recorded cumulative estimated probable losses associated with the Wildfires of approximately $
To date through September 30, 2026, PacifiCorp paid approximately $
25
Notes to Consolidated Financial Statements
Note 22. Contingencies and commitments
It is reasonably possible PacifiCorp will incur material additional losses beyond the amounts accrued for the Wildfires that could have a material adverse effect on PacifiCorp’s liquidity and financial condition. PacifiCorp is currently unable to reasonably estimate a specific range of possible additional losses that could be incurred due to the number of properties and parties involved, including claimants in the class to the James case, the variation in the types of properties and damages and the ultimate outcome of legal actions, including mediation, settlement negotiations, jury verdicts and the James appeals process, including the April 2026 Oregon Court of Appeals opinion and the plaintiffs’ appeal with the Oregon Supreme Court.
HomeServices of America, Inc.
HomeServices of America, Inc. (“HomeServices”) is also a wholly-owned subsidiary of BHE. HomeServices is currently defending against several antitrust cases, all in federal district courts. In each case, plaintiffs claim HomeServices and certain of its subsidiaries (and in one case, BHE) conspired with co-defendants to artificially inflate real estate commissions by following and enforcing multiple listing service (“MLS”) rules that require listing agents to offer a commission split to cooperating agents in order for the property to appear on the MLS (“Cooperative Compensation Rule”). None of the complaints specify damages sought. However, two cases also allege Texas state law deceptive trade practices claims, for which plaintiffs have asserted damages totaling approximately $
In one of these cases, Burnett (formerly Sitzer) et al. v. HomeServices of America, Inc. et al. (the “Burnett case”), a jury trial in the U.S. District Court for the Western District of Missouri (“U.S. District Court”) returned a verdict for the plaintiffs on October 31, 2023, finding that the named defendants participated in a conspiracy to follow and enforce the Cooperative Compensation Rule, which conspiracy had the purpose or effect of raising, inflating, or stabilizing broker commission rates paid by home sellers. The jury further found that the class plaintiffs had proved damages of $
The final HomeServices settlement agreement reached with the plaintiffs on April 25, 2024 settles all claims asserted against HomeServices and certain of its subsidiaries in the Burnett case and effectuates a nationwide class settlement. The final settlement agreement includes scheduled payments totaling $
Other legal matters
In September 2024, National Indemnity Company (“NICO”) entered into a settlement agreement concerning certain non-insurance affiliates that filed voluntary petitions under Chapter 11 of the bankruptcy code in the United States Bankruptcy Court for the District of New Jersey (the “Court”) in 2023. Under the terms of the settlement agreement, NICO agreed to pay $
NICO and its affiliates also entered into a proposed Consent Decree and Environmental Settlement Agreement (“CDESA”) with the bankruptcy estate, the United States Environmental Protection Agency and various state environmental agencies to resolve certain environmental liabilities arising from various sites owned or operated by the debtor non-insurance affiliates. The CDESA was filed with the Court on April 3, 2026.
On October 22, 2026, the Court issued opinions approving the settlement and CDESA. Both orders remain subject to potential appeals.
Berkshire and certain of its subsidiaries are also involved in other kinds of legal actions, some of which assert or may assert claims or seek to impose fines and penalties. We currently believe that liabilities that may arise as a result of such other pending legal actions will not have a material effect on our consolidated financial condition or results of operations.
Commitments and other
On February 15, 2026, PacifiCorp and Portland General Electric Company and an affiliate of Portland General Electric Company (together, the “PGE Entities”) entered into an Asset Purchase and Service Area Transfer Agreement to sell to the PGE Entities certain PacifiCorp assets and liabilities associated with PacifiCorp’s Washington operations for a base sales price of $
26
Notes to Consolidated Financial Statements
Note 23. Revenues from contracts with customers
The following tables summarize customer contract revenues disaggregated by reportable segment and the source of the revenue (in millions). Other revenues, which are not considered to be revenues from contracts with customers under GAAP, are primarily insurance premiums earned, interest, dividend and other investment income and leasing revenues.
|
BNSF |
|
BHE |
|
Manufacturing |
|
Service |
|
Pilot |
|
McLane |
|
Insurance, |
|
Total |
|
||||||||
Three months ended September 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Manufactured products: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Industrial and commercial |
$ |
— |
|
$ |
— |
|
$ |
|
$ |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
|
|||
Building |
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
||
Consumer |
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
||
Grocery and convenience store distribution |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
|
||
Food and beverage distribution |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
|
||
Auto sales |
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
||
Other retail and wholesale distribution |
|
— |
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
— |
|
|
|
||||
Service |
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|||||||
Electricity and natural gas |
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
||
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|||||||
Other revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Nine months ended September 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Manufactured products: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Industrial and commercial |
$ |
— |
|
$ |
— |
|
$ |
|
$ |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
|
|||
Building |
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
||
Consumer |
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
||
Grocery and convenience store distribution |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
|
||
Food and beverage distribution |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
|
||
Auto sales |
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
||
Other retail and wholesale distribution |
|
— |
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
— |
|
|
|
||||
Service |
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|||||||
Electricity and natural gas |
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
||
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|||||||
Other revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
27
Notes to Consolidated Financial Statements
Note 23. Revenues from contracts with customers
|
BNSF |
|
BHE |
|
Manufacturing |
|
Service |
|
Pilot |
|
McLane |
|
Insurance, |
|
Total |
|
||||||||
Three months ended September 30, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Manufactured products: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Industrial and commercial |
$ |
— |
|
$ |
— |
|
$ |
|
$ |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
|
|||
Building |
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
||
Consumer |
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
||
Grocery and convenience store distribution |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
|
||
Food and beverage distribution |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
|
||
Auto sales |
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
||
Other retail and wholesale distribution |
|
— |
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
— |
|
|
|
||||
Service |
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|||||||
Electricity and natural gas |
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
||
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|||||||
Other revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Nine months ended September 30, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Manufactured products: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Industrial and commercial |
$ |
— |
|
$ |
— |
|
$ |
|
$ |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
|
|||
Building |
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
||
Consumer |
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
||
Grocery and convenience store distribution |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
|
||
Food and beverage distribution |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
|
||
Auto sales |
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
||
Other retail and wholesale distribution |
|
— |
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
— |
|
|
|
||||
Service |
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|||||||
Electricity and natural gas |
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
||
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|||||||
Other revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
A summary of transaction prices allocated to the significant unsatisfied remaining performance obligations related to contracts with expected durations exceeding one year as of September 30, 2026 and the timing of when the performance obligations are expected to be satisfied follows (in millions).
|
|
Less than |
|
|
Greater than |
|
|
Total |
|
|||
Electricity and natural gas |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Other sales and service contracts |
|
|
|
|
|
|
|
|
|
|||
Note 24. Business segment data
Berkshire’s numerous and diverse businesses are managed on an unusually decentralized basis. These businesses are aggregated into operating segments in a manner that reflects how Berkshire views the business activities. Certain operating segments are aggregated into reportable business segments based upon similar products or product lines, marketing strategies, and selling and distribution characteristics. The tabular information that follows shows data of Berkshire’s business segments reconciled to amounts reflected in our Consolidated Financial Statements. Intersegment transactions are not eliminated from segment results when those transactions are considered in assessing the results of the respective segments and are not considered to be material. Furthermore, investment gains and losses, goodwill and indefinite-lived intangible asset impairments and amortization of certain acquisition accounting adjustments or certain other corporate income and expense items are not considered in assessing the financial performance of operating businesses. Collectively, these items are included in corporate, eliminations and other to reconcile segment totals to consolidated amounts. OxyChem and TMHC are included in the manufacturing segment beginning as of the respective acquisition dates.
28
Notes to Consolidated Financial Statements
Note 24. Business segment data
We view our insurance segment as possessing
|
Third Quarter 2026 |
|
||||||||||||||||
Insurance |
GEICO |
|
BH Primary |
|
BHRG |
|
Total |
|
Investment |
|
Total |
|
||||||
Premiums earned and investment income |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Losses and LAE |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|||||
Life, annuity and health benefits |
|
— |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|||
Other segment items |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Earnings before income taxes |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||
|
First Nine Months 2026 |
|
||||||||||||||||
Insurance |
GEICO |
|
BH Primary |
|
BHRG |
|
Total |
|
Investment |
|
Total |
|
||||||
Premiums earned and investment income |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Losses and LAE |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|||||
Life, annuity and health benefits |
|
— |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|||
Other segment items |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Earnings before income taxes |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||
|
Third Quarter 2025 |
|
||||||||||||||||
Insurance |
GEICO |
|
BH Primary |
|
BHRG |
|
Total |
|
Investment |
|
Total |
|
||||||
Premiums earned and investment income |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Losses and LAE |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|||||
Life, annuity and health benefits |
— |
|
— |
|
|
|
|
|
|
— |
|
|
|
|||||
Other segment items |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Earnings before income taxes |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||
|
First Nine Months 2025 |
|
||||||||||||||||
Insurance |
GEICO |
|
BH Primary |
|
BHRG |
|
Total |
|
Investment |
|
Total |
|
||||||
Premiums earned and investment income |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Losses and LAE |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|||||
Life, annuity and health benefits |
— |
|
— |
|
|
|
|
|
|
— |
|
|
|
|||||
Other segment items |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Earnings before income taxes |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||
Other segment items related to insurance underwriting include commissions and brokerage expenses and other insurance underwriting expenses.
29
Notes to Consolidated Financial Statements
Note 24. Business segment data
|
|
|
|
|
Third Quarter |
|
First Nine Months |
|
||||||||
BNSF |
|
|
|
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
||||
Revenues |
|
|
|
|
$ |
|
$ |
|
$ |
|
$ |
|
||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Compensation and benefits |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fuel |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other segment items |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings before income taxes |
|
|
|
|
$ |
|
$ |
|
$ |
|
$ |
|
||||
Other segment items of BNSF include purchased services, equipment rents and materials and other expenses.
|
|
|
|
|
Third Quarter |
|
First Nine Months |
|
||||||||
BHE |
|
|
|
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
||||
Revenues |
|
|
|
|
$ |
|
$ |
|
$ |
|
$ |
|
||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Energy cost of sales |
|
|
|
|
|
|
|
|
|
|
|
|||||
Energy operations and maintenance |
|
|
|
|
|
|
|
|
|
|
|
|||||
Energy depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|||||
Real estate operating costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|||||
Other segment items |
|
|
|
|
|
|
|
|
|
|
|
|||||
Total costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings before income taxes |
|
|
|
|
$ |
|
$ |
|
$ |
|
$ |
|
||||
Other segment items of BHE primarily consist of property taxes and other expenses.
|
Manufacturing |
|
Service and retailing |
|
||||||||||||||||||||
|
Third Quarter |
|
First Nine Months |
|
Third Quarter |
|
First Nine Months |
|
||||||||||||||||
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
||||||||
Revenues |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of sales and services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of leasing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other segment items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings before income taxes |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
Other segment items of manufacturing, service and retailing primarily consist of selling, general and administrative expenses.
30
Notes to Consolidated Financial Statements
Note 24. Business segment data
|
McLane |
|
Pilot |
|
||||||||||||||||||||
|
Third Quarter |
|
First Nine Months |
|
Third Quarter |
|
First Nine Months |
|
||||||||||||||||
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
||||||||
Revenues |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of sales and services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other segment items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings before income taxes |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
$ |
|
|||||||
Other segment items of McLane include distribution center operating and delivery expenses and general and administrative expenses. Other segment items of Pilot primarily consist of store operating, interest and general and administrative expenses.
Reconciliations of revenues and earnings before income taxes of our business segments to the consolidated amounts follow (in millions).
|
Revenues |
|
Earnings before income taxes |
|
||||||||||||||||||||
|
Third Quarter |
|
First Nine Months |
|
Third Quarter |
|
First Nine Months |
|
||||||||||||||||
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
||||||||
Total operating businesses |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
Investment gains (losses) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
|
||||
Equity method earnings |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
( |
) |
|||
Corporate, eliminations and other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
Additional segment data follows (in millions).
|
Interest expense |
|
Income tax expense (benefit) |
|
||||||||||||||||||||
|
Third Quarter |
|
First Nine Months |
|
Third Quarter |
|
First Nine Months |
|
||||||||||||||||
Business segments |
2026 |
|
2025 |
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
||||||||
Insurance |
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||
BNSF |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
BHE |
|
|
|
|
|
|
|
|
|
( |
) |
|
( |
) |
|
( |
) |
|
( |
) |
||||
Manufacturing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Service and retailing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
McLane |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Pilot |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation to consolidated amount |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Investment gains (losses) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
|
||||
Equity method earnings |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
( |
) |
|||
Corporate, eliminations and other |
|
( |
) |
|
( |
) |
|
( |
) |
|
( |
) |
|
|
|
|
|
|
|
|
||||
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
31
Notes to Consolidated Financial Statements
Note 24. Business segment data
|
Capital expenditures |
|
Depreciation and amortization |
|
||||||||||||||||||||
|
Third Quarter |
|
First Nine Months |
|
Third Quarter |
|
First Nine Months |
|
||||||||||||||||
Business segments |
2026 |
|
2025 |
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
||||||||
Insurance |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
BNSF |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
BHE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Manufacturing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Service and retailing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
McLane |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Pilot |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
$ |
|
$ |
|
$ |
|
$ |
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation to consolidated amount |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Corporate, eliminations and other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
|
|
|
Goodwill |
|
Identifiable assets |
|
||||||||
Business segments |
|
|
September 30, |
|
December 31, |
|
September 30, |
|
December 31, |
|
||||
Insurance |
|
|
$ |
|
$ |
|
$ |
|
$ |
|
||||
BNSF |
|
|
|
|
|
|
|
|
|
|
||||
BHE |
|
|
|
|
|
|
|
|
|
|
||||
Manufacturing |
|
|
|
|
|
|
|
|
|
|
||||
Service and retailing |
|
|
|
|
|
|
|
|
|
|
||||
McLane |
|
|
|
|
|
|
|
|
|
|
||||
Pilot |
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
$ |
|
$ |
|
|
|
|
|
||||
Reconciliation to consolidated amount |
|
|
|
|
|
|
|
|
|
|||||
Corporate and other |
|
|
|
|
|
|
|
|
|
|
||||
Goodwill |
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
$ |
|
$ |
|
||||
32
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations
Net earnings attributable to Berkshire shareholders are disaggregated in the table that follows. Amounts are after deducting income taxes and exclude earnings attributable to noncontrolling interests (in millions).
|
Third Quarter |
|
|
First Nine Months |
|
||||||||||
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Insurance – underwriting |
$ |
1,352 |
|
|
$ |
2,369 |
|
|
$ |
4,800 |
|
|
$ |
5,697 |
|
Insurance – investment income |
|
2,734 |
|
|
|
3,181 |
|
|
|
8,472 |
|
|
|
9,441 |
|
BNSF |
|
1,729 |
|
|
|
1,449 |
|
|
|
4,664 |
|
|
|
4,129 |
|
Berkshire Hathaway Energy (“BHE”) |
|
1,612 |
|
|
|
1,489 |
|
|
|
3,617 |
|
|
|
3,288 |
|
Manufacturing, service and retailing |
|
4,042 |
|
|
|
3,616 |
|
|
|
11,711 |
|
|
|
10,277 |
|
Investment gains (losses) |
|
9,407 |
|
|
|
17,311 |
|
|
|
20,851 |
|
|
|
17,243 |
|
Other-than-temporary impairment of investment in Kraft Heinz |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3,760 |
) |
Other |
|
1,236 |
|
|
|
1,381 |
|
|
|
3,770 |
|
|
|
1,454 |
|
Net earnings attributable to Berkshire shareholders |
$ |
22,112 |
|
|
$ |
30,796 |
|
|
$ |
57,885 |
|
|
$ |
47,769 |
|
Through our subsidiaries, we engage in numerous diverse business activities. The business segment data (Note 24 to the accompanying Consolidated Financial Statements and Note 26 to the Consolidated Financial Statements included in Form 10-K for the year ended December 31, 2025) should be read in conjunction with this discussion.
Our periodic operating results may be affected in future periods by the impacts of ongoing macroeconomic and geopolitical conflicts and events, including wars, developing international trade policies and tariffs, as well as changes in industry or company-specific factors or events. Considerable uncertainty remains as to the ultimate outcome of these events. We are currently unable to reliably predict the ultimate impact on our businesses, whether through changes in the availability of products, supply chain costs and efficiency, and customer demand for our products and services. It is reasonably possible there could be adverse consequences on our operating businesses, as well as on our investments in equity securities, which could significantly affect our earnings.
After-tax earnings from insurance underwriting declined 42.9% in the third quarter and 15.7% in the first nine months of 2026 compared to 2025. Each of our three underwriting groups generated lower underwriting earnings in the third quarter of 2026 relative to 2025. GEICO produced lower underwriting earnings in the first nine months of 2026 compared to 2025, which was partially offset by increased earnings from the reinsurance and other primary insurance groups. We experienced no losses from significant catastrophe events in the first nine months of 2026. After-tax losses from significant events were approximately $850 million in the first nine months of 2025. After-tax earnings from insurance investment income declined $447 million (14.1%) in the third quarter and $969 million (10.3%) in the first nine months of 2026 versus the same periods in 2025, attributable to lower interest income, reflecting lower interest rates.
After-tax earnings of BNSF increased 19.3% in the third quarter and 13.0% in the first nine months of 2026 compared to 2025. Earnings in 2026 benefited from higher shipping volumes and improved operating efficiencies, partly offset by increases in fuel costs. After-tax earnings of BHE increased 8.3% in the third quarter and 10.0% in the first nine months of 2026 compared to 2025, which reflected higher earnings from the U.S. utilities and natural gas pipelines businesses, partially offset by lower earnings from other energy and real estate brokerage businesses.
After-tax earnings from our manufacturing, service and retailing businesses increased 11.8% in the third quarter and 14.0% in the first nine months of 2026 compared to 2025. The increases were driven by earnings increases in our industrial products and service businesses.
Investment gains (losses) regularly include significant unrealized gains and losses from changes in market prices of our investments in equity securities and in foreign currency exchange rates applicable to certain of our investments. We believe that investment gains and losses, whether realized from dispositions or unrealized from changes in market prices and exchange rates, are often meaningless in understanding our reported periodic results or evaluating our periodic economic performance. These gains and losses have caused, and will continue to cause, significant volatility in our periodic earnings.
We recorded an other-than-temporary impairment loss in the second quarter of 2025 on our investment in The Kraft Heinz Company (“Kraft Heinz”), which is accounted for under the equity method. See Note 5 to the accompanying Consolidated Financial Statements.
Other earnings in the preceding table include foreign currency exchange rate gains and losses on Berkshire and BHFC non-U.S. Dollar denominated borrowings, as well as earnings on equity method investments and corporate investment income and expenses. After-tax other earnings declined $145 million in the third quarter and increased $2.3 billion in the first nine months of 2026 compared to 2025, primarily due to variations in the periodic foreign currency exchange gains and losses and increased earnings from equity method investments.
33
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations
Insurance—Underwriting
We write primary insurance and reinsurance policies covering property and casualty risks, as well as life and health risks. Our insurance and reinsurance businesses are GEICO, Berkshire Hathaway Primary Group (“BH Primary”) and Berkshire Hathaway Reinsurance Group (“BHRG”). We strive to generate pre-tax underwriting earnings (defined as premiums earned less insurance losses/benefits incurred and underwriting expenses) over the long term in all business categories, except in our retroactive reinsurance and periodic payment annuity businesses. We continue to instruct our underwriting managers to decline writing insurance business when the premiums are deemed inadequate to the risks underwritten, without regard to the impact on premium volume. Time-value-of-money concepts are important considerations in establishing premiums received at the inception of our retroactive reinsurance and periodic payment annuity contracts. While no new retroactive reinsurance or periodic payment annuity contracts have been written in recent years, we will continue to record charges to earnings related to the run-off of pre-existing contracts over the remaining claim settlement periods.
Our periodic underwriting earnings may be subject to considerable volatility from the timing and magnitude of significant property catastrophe loss events. We currently consider consolidated pre-tax losses exceeding $150 million from an event occurring in the current year to be significant. Changes in estimates for unpaid losses and loss adjustment expenses (“LAE”), including amounts established for occurrences in prior years, and foreign currency transaction gains and losses arising from the remeasurement of non-functional currency denominated assets and liabilities can also significantly affect our periodic underwriting results.
Underwriting results of our insurance businesses are summarized below (dollars in millions).
|
Third Quarter |
|
|
First Nine Months |
|
||||||||
|
2026 |
|
2025 |
|
|
2026 |
|
2025 |
|
||||
Pre-tax underwriting earnings: |
|
|
|
|
|
|
|
|
|
||||
GEICO |
$ |
982 |
|
$ |
1,773 |
|
|
$ |
3,392 |
|
$ |
5,767 |
|
BH Primary |
|
119 |
|
|
506 |
|
|
|
868 |
|
|
425 |
|
BHRG |
|
582 |
|
|
884 |
|
|
|
1,868 |
|
|
1,227 |
|
Pre-tax underwriting earnings |
|
1,683 |
|
|
3,163 |
|
|
|
6,128 |
|
|
7,419 |
|
Income taxes |
|
331 |
|
|
794 |
|
|
|
1,328 |
|
|
1,722 |
|
Net underwriting earnings |
$ |
1,352 |
|
$ |
2,369 |
|
|
$ |
4,800 |
|
$ |
5,697 |
|
Effective income tax rate |
|
19.7 |
% |
|
25.1 |
% |
|
|
21.7 |
% |
|
23.2 |
% |
GEICO
GEICO writes property and casualty insurance policies, primarily private passenger auto insurance, in all 50 states and the District of Columbia. Additionally, GEICO writes insurance for certain commercial auto risks, which currently represents less than 5% of premiums written. GEICO offers its policies mainly by direct response methods where most customers apply for insurance coverage directly to the company, and, to a lesser extent, through insurance agencies. GEICO also operates an insurance agency that offers insurance policies written by third parties for individuals desiring coverages that are generally not offered by GEICO, such as homeowners, renters, condominium, life and identity protection insurance. A summary of GEICO’s pre-tax underwriting results follows (dollars in millions).
|
Third Quarter |
|
|
First Nine Months |
|
||||||||||||||||||||
|
2026 |
|
2025 |
|
|
2026 |
|
2025 |
|
||||||||||||||||
|
Amount |
|
% |
|
Amount |
|
% |
|
|
Amount |
|
% |
|
Amount |
|
% |
|
||||||||
Premiums written |
$ |
11,714 |
|
|
|
$ |
11,744 |
|
|
|
|
$ |
34,512 |
|
|
|
$ |
34,253 |
|
|
|
||||
Premiums earned |
$ |
11,405 |
|
|
100.0 |
|
$ |
11,264 |
|
|
100.0 |
|
|
$ |
33,882 |
|
|
100.0 |
|
$ |
33,080 |
|
|
100.0 |
|
Losses and LAE |
|
8,733 |
|
|
76.6 |
|
|
8,047 |
|
|
71.5 |
|
|
|
25,654 |
|
|
75.7 |
|
|
23,416 |
|
|
70.8 |
|
Underwriting expenses |
|
1,690 |
|
|
14.8 |
|
|
1,444 |
|
|
12.8 |
|
|
|
4,836 |
|
|
14.3 |
|
|
3,897 |
|
|
11.8 |
|
Total losses and expenses |
|
10,423 |
|
|
91.4 |
|
|
9,491 |
|
|
84.3 |
|
|
|
30,490 |
|
|
90.0 |
|
|
27,313 |
|
|
82.6 |
|
Pre-tax underwriting earnings |
$ |
982 |
|
|
|
$ |
1,773 |
|
|
|
|
$ |
3,392 |
|
|
|
$ |
5,767 |
|
|
|
||||
34
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Insurance—Underwriting
GEICO
Premiums written declined $30 million (0.3%) in the third quarter and increased $259 million (0.8%) in the first nine months of 2026 compared to 2025, reflecting continued growth in policies-in-force, offset by lower average premiums per policy. Premiums earned increased $141 million (1.3%) in the third quarter and $802 million (2.4%) in the first nine months of 2026 compared to 2025.
Losses and LAE increased $686 million (8.5%) in the third quarter and $2.2 billion (9.6%) in the first nine months of 2026 compared to 2025. GEICO’s loss ratio (losses and LAE to premiums earned) was 76.6% in the third quarter and 75.7% in the first nine months of 2026, increases of 5.1 and 4.9 percentage points, respectively, compared to 2025. The loss ratio increases reflected the impact of higher claims frequencies and average severities, in addition to lower average earned premiums per policy.
Private passenger auto claims frequencies increased in the first nine months of 2026 for bodily injury coverage (four to six percent range) and property damage and collision coverages (two to four percent range) compared to 2025. Private passenger auto average claims severities in the first nine months of 2026 increased for bodily injury coverages (nine to eleven percent range) and property damage and collision coverages (zero to three percent range) compared to 2025. Losses and LAE included reductions in the ultimate loss estimates for prior accident years’ claims of $628 million in the first nine months of 2026 compared to $495 million in 2025.
Underwriting expenses increased $246 million (17.0%) in the third quarter and $939 million (24.1%) in the first nine months of 2026 compared to 2025. The expense ratio (underwriting expense to premiums earned) was 14.3% in the first nine months of 2026, an increase of 2.5 percentage points compared to 2025 driven primarily by increases in commissions and advertising expenses. Earnings from GEICO’s insurance agency (third-party commissions, net of operating expenses) are included as a reduction of underwriting expenses.
Berkshire Hathaway Primary Group
BH Primary consists of numerous separately managed businesses that provide a wide variety of primarily commercial insurance solutions, including healthcare professional liability, workers’ compensation, automobile, general liability, property and specialty coverages. BH Primary insurers include Berkshire Hathaway Specialty Insurance Group (“BHSI”), RSUI, CapSpecialty, Berkshire Hathaway Homestate Group (“BHHC”), MedPro, GUARD Insurance Companies (“GUARD”), NICO Primary Group (“NICO Primary”), Berkshire Hathaway Direct (“BH Direct”) and U.S. Liability Insurance companies (“USLI”).
A summary of BH Primary’s pre-tax underwriting results follows (dollars in millions).
|
Third Quarter |
|
|
First Nine Months |
|
||||||||||||||||||||
|
2026 |
|
2025 |
|
|
2026 |
|
2025 |
|
||||||||||||||||
|
Amount |
|
% |
|
Amount |
|
% |
|
|
Amount |
|
% |
|
Amount |
|
% |
|
||||||||
Premiums written |
$ |
4,855 |
|
|
|
$ |
5,273 |
|
|
|
|
$ |
13,941 |
|
|
|
$ |
14,516 |
|
|
|
||||
Premiums earned |
$ |
4,622 |
|
|
100.0 |
|
$ |
4,711 |
|
|
100.0 |
|
|
$ |
13,886 |
|
|
100.0 |
|
$ |
13,965 |
|
|
100.0 |
|
Losses and LAE |
|
3,085 |
|
|
66.7 |
|
|
2,842 |
|
|
60.3 |
|
|
|
8,888 |
|
|
64.0 |
|
|
9,487 |
|
|
67.9 |
|
Underwriting expenses |
|
1,418 |
|
|
30.7 |
|
|
1,363 |
|
|
29.0 |
|
|
|
4,130 |
|
|
29.7 |
|
|
4,053 |
|
|
29.1 |
|
Total losses and expenses |
|
4,503 |
|
|
97.4 |
|
|
4,205 |
|
|
89.3 |
|
|
|
13,018 |
|
|
93.7 |
|
|
13,540 |
|
|
97.0 |
|
Pre-tax underwriting earnings |
$ |
119 |
|
|
|
$ |
506 |
|
|
|
|
$ |
868 |
|
|
|
$ |
425 |
|
|
|
||||
Premiums written declined $418 million (7.9%) in the third quarter and $575 million (4.0%) in the first nine months of 2026 compared to 2025, reflecting year-to-date declines across several primary group business units, including RSUI (11.5%), BHHC (9.7%), MedPro (5.1%) and GUARD (14.5%). The year-to-date decline included lower volumes in property, student health and commercial package policy business.
Losses and LAE increased $243 million (8.6%) in the third quarter and decreased $599 million (6.3%) in the first nine months of 2026 in relation to 2025. The loss ratio increased 6.4 percentage points in the third quarter and decreased 3.9 percentage points in the first nine months compared to 2025. Losses incurred from significant catastrophe occurrences in the first nine months of 2025 were approximately $305 million from wildfires in Southern California, which occurred in the first quarter, compared to none in 2026.
35
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Insurance—Underwriting
Berkshire Hathaway Primary Group
We reduced ultimate loss estimates for prior accident years’ claims by $24 million in the third quarter and $468 million in the first nine months of 2026. Ultimate loss estimates for prior accident years’ claims were reduced by $190 million in the third quarter and increased by $211 million in the first nine months of 2025. The year-to-date reductions in 2026 were primarily attributable to lower-than-expected property losses and, to a lesser extent, automobile liability and other casualty losses. The year-to-date increases in 2025 were primarily due to increases in estimated losses for casualty exposures, partially offset by reductions in property and automobile liability loss estimates.
Underwriting expenses increased $77 million (1.9%) in the first nine months of 2026 compared to 2025. The increase reflected generally higher expenses across our businesses, attributable to a combination of factors, including changes in business mix and personnel levels, and was partially offset by lower expenses at GUARD.
Berkshire Hathaway Reinsurance Group
The Berkshire Hathaway Reinsurance Group (“BHRG”) offers excess-of-loss and quota-share reinsurance coverages on property and casualty risks to insurers and reinsurers worldwide through the NICO, General Re and TransRe Groups. We also write life and health reinsurance coverages through the General Re Group and Berkshire Hathaway Life Insurance Company of Nebraska. A summary of BHRG’s pre-tax underwriting results follows (in millions).
|
Third Quarter |
|
|
First Nine Months |
|
||||||||
|
2026 |
|
2025 |
|
|
2026 |
|
2025 |
|
||||
Property/casualty |
$ |
779 |
|
$ |
1,065 |
|
|
$ |
2,554 |
|
$ |
2,178 |
|
Life/health |
|
80 |
|
|
50 |
|
|
|
257 |
|
|
172 |
|
Retroactive reinsurance |
|
(167 |
) |
|
(141 |
) |
|
|
(593 |
) |
|
(618 |
) |
Periodic payment annuity |
|
(175 |
) |
|
(126 |
) |
|
|
(459 |
) |
|
(538 |
) |
Variable annuity |
|
65 |
|
|
36 |
|
|
|
109 |
|
|
33 |
|
Pre-tax underwriting earnings |
$ |
582 |
|
$ |
884 |
|
|
$ |
1,868 |
|
$ |
1,227 |
|
Property/casualty
A summary of property/casualty reinsurance pre-tax underwriting results follows (dollars in millions).
|
Third Quarter |
|
|
First Nine Months |
|
||||||||||||||||||||
|
2026 |
|
2025 |
|
|
2026 |
|
2025 |
|
||||||||||||||||
|
Amount |
|
% |
|
Amount |
|
% |
|
|
Amount |
|
% |
|
Amount |
|
% |
|
||||||||
Premiums written |
$ |
5,544 |
|
|
|
$ |
5,183 |
|
|
|
|
$ |
16,762 |
|
|
|
$ |
16,340 |
|
|
|
||||
Premiums earned |
$ |
5,018 |
|
|
100.0 |
|
$ |
5,173 |
|
|
100.0 |
|
|
$ |
14,959 |
|
|
100.0 |
|
$ |
15,516 |
|
|
100.0 |
|
Losses and LAE |
|
2,858 |
|
|
57.0 |
|
|
2,685 |
|
|
51.9 |
|
|
|
8,184 |
|
|
54.7 |
|
|
9,038 |
|
|
58.2 |
|
Underwriting expenses |
|
1,381 |
|
|
27.5 |
|
|
1,423 |
|
|
27.5 |
|
|
|
4,221 |
|
|
28.2 |
|
|
4,300 |
|
|
27.8 |
|
Total losses and expenses |
|
4,239 |
|
|
84.5 |
|
|
4,108 |
|
|
79.4 |
|
|
|
12,405 |
|
|
82.9 |
|
|
13,338 |
|
|
86.0 |
|
Pre-tax underwriting earnings |
$ |
779 |
|
|
|
$ |
1,065 |
|
|
|
|
$ |
2,554 |
|
|
|
$ |
2,178 |
|
|
|
||||
Premiums written increased $361 million (7.0%) in the third quarter and $422 million (2.6%) in the first nine months of 2026 compared to 2025. The increases were primarily attributable to new policies in the second and third quarters of 2026, including a whole account reinsurance agreement with certain wholly-owned insurance subsidiaries of Tokio Marine Holdings, Inc. (“Tokio Marine”), which commenced on April 1, 2026. Under the agreement, NICO assumes on a quota-share basis a portion of the non-life premiums written and related losses and expenses of Tokio Marine on risks attaching over a ten-year term. Premiums written to-date through September 30, 2026 under this agreement were approximately $700 million, reflecting our current estimates. Otherwise, premium volumes in 2026 were constrained by increased price competition in U.S. property markets.
Losses and LAE increased $173 million (6.4%) in the third quarter and declined $854 million (9.4%) in the first nine months of 2026 compared to 2025. The loss ratio in 2026 increased 5.1 percentage points in the third quarter and decreased 3.5 percentage points in the first nine months compared to 2025. There were no losses incurred from significant catastrophe event occurrences in the first nine months of 2026 compared to $760 million in 2025 from wildfires in Southern California, which occurred in the first quarter. Additionally, changes in prior accident years’ ultimate loss estimates reduced losses and LAE by $1.2 billion in the first nine months of 2026 compared to $898 million in 2025. The reductions in each period were primarily attributable to lower-than-expected property losses, partially offset by increases in casualty loss estimates.
36
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Insurance—Underwriting
Berkshire Hathaway Reinsurance Group
Underwriting expenses decreased $42 million (3.0%) in the third quarter and $79 million (1.8%) in the first nine months of 2026 compared to 2025. Expense ratios were substantially unchanged in the third quarter and first nine months of 2026 compared to 2025. Underwriting expenses in 2026 reflected changes in business mix, increases in general and administrative expenses and reduced foreign currency exchange losses from the remeasurement of certain non-functional currency denominated liabilities related to reinsurance contracts.
Life/health
A summary of our life/health reinsurance pre-tax underwriting results follows (dollars in millions).
|
Third Quarter |
|
|
First Nine Months |
|
||||||||||||||||||||
|
2026 |
|
2025 |
|
|
2026 |
|
2025 |
|
||||||||||||||||
|
Amount |
|
% |
|
Amount |
|
% |
|
|
Amount |
|
% |
|
Amount |
|
% |
|
||||||||
Premiums written |
$ |
1,389 |
|
|
|
$ |
1,300 |
|
|
|
|
$ |
4,186 |
|
|
|
$ |
3,890 |
|
|
|
||||
Premiums earned |
$ |
1,390 |
|
|
100.0 |
|
$ |
1,297 |
|
|
100.0 |
|
|
$ |
4,188 |
|
|
100.0 |
|
$ |
3,883 |
|
|
100.0 |
|
Life and health benefits |
|
1,001 |
|
|
72.0 |
|
|
1,002 |
|
|
77.3 |
|
|
|
3,023 |
|
|
72.2 |
|
|
3,001 |
|
|
77.3 |
|
Underwriting expenses |
|
309 |
|
|
22.2 |
|
|
245 |
|
|
18.8 |
|
|
|
908 |
|
|
21.7 |
|
|
710 |
|
|
18.3 |
|
Total benefits and expenses |
|
1,310 |
|
|
94.2 |
|
|
1,247 |
|
|
96.1 |
|
|
|
3,931 |
|
|
93.9 |
|
|
3,711 |
|
|
95.6 |
|
Pre-tax underwriting earnings |
$ |
80 |
|
|
|
$ |
50 |
|
|
|
|
$ |
257 |
|
|
|
$ |
172 |
|
|
|
||||
Premiums earned increased $305 million (7.9%) in the first nine months of 2026 compared to 2025, primarily due to favorable foreign currency translation effects and increased premiums in U.S. and international markets. Pre-tax underwriting earnings increased $85 million in the first nine months of 2026 compared to 2025. The earnings increase reflected lower mortality, partially offset by higher underwriting expenses, including foreign currency transaction losses.
Retroactive reinsurance
Pre-tax underwriting losses, before foreign currency exchange gains and losses, were $590 million in the first nine months of 2026 versus $508 million in 2025. Losses reflected changes in estimated ultimate liabilities and related deferred charges during each period. There were no significant changes in the estimated ultimate liabilities during the first nine months of 2026 and 2025. Foreign currency exchange gains and losses derive from the remeasurement of liabilities of non-functional currency denominated contracts of U.S. subsidiaries. Pre-tax foreign currency exchange gains and losses were insignificant in the first nine months of 2026 compared to losses of $110 million in the first nine months of 2025.
Unpaid losses and LAE for retroactive reinsurance contracts were $28.1 billion at September 30, 2026, a decline of $2.9 billion from December 31, 2025, primarily due to loss payments, including $1.12 billion associated with a contract commutation in the third quarter. Deferred charge assets on retroactive reinsurance were $7.2 billion and $8.1 billion at September 30, 2026 and December 31, 2025, respectively. Deferred charge balances will be charged to earnings over the expected remaining claims settlement periods.
Periodic payment annuity
Pre-tax underwriting losses, before foreign currency impacts, were $163 million in the third quarter and $467 million in the first nine months of 2026 versus $152 million in the third quarter and $428 million in the first nine months of 2025. These losses derived primarily from the accretion of discounted annuity liabilities. Pre-tax foreign currency exchange gains and losses on non-functional currency denominated contracts of U.S. subsidiaries were relatively insignificant in the 2026 periods, compared to gains of $26 million in the third quarter and losses of $110 million in the first nine months of 2025. Annuity liabilities were $13.4 billion at September 30, 2026, which includes the effects of discount rate changes recorded in accumulated other comprehensive income, as well as liabilities of $4.0 billion on contracts without life contingencies.
Variable annuity
Earnings or losses on our variable annuity guarantee reinsurance contracts are affected by changes in securities markets, interest rates, foreign currency exchange rates and policyholder behavior. While these contracts have been in run-off for many years, periodic earnings are subject to considerable volatility from the inherent volatility of market prices and rates.
37
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Insurance—Investment Income
A summary of net investment income attributable to our insurance operations follows (dollars in millions).
|
Third Quarter |
|
|
First Nine Months |
|
|
Percentage Change |
|
|||||||||||||
|
2026 |
|
2025 |
|
|
2026 |
|
2025 |
|
|
Third |
|
|
First Nine |
|
||||||
Interest and other investment income |
$ |
2,262 |
|
$ |
2,626 |
|
|
$ |
6,722 |
|
$ |
7,669 |
|
|
|
(13.9 |
)% |
|
|
(12.3 |
)% |
Dividend income |
|
1,057 |
|
|
1,090 |
|
|
|
3,586 |
|
|
3,611 |
|
|
|
(3.0 |
) |
|
|
(0.7 |
) |
Pre-tax net investment income |
|
3,319 |
|
|
3,716 |
|
|
|
10,308 |
|
|
11,280 |
|
|
|
(10.7 |
) |
|
|
(8.6 |
) |
Income taxes |
|
585 |
|
|
535 |
|
|
|
1,836 |
|
|
1,839 |
|
|
|
|
|
|
|
||
Net investment income |
$ |
2,734 |
|
$ |
3,181 |
|
|
$ |
8,472 |
|
$ |
9,441 |
|
|
|
|
|
|
|
||
Effective income tax rate |
|
17.6 |
% |
|
14.4 |
% |
|
|
17.8 |
% |
|
16.3 |
% |
|
|
|
|
|
|
||
Pre-tax investment income in the third quarter and first nine months of 2026 declined 10.7% and 8.6%, respectively, compared to 2025, primarily attributable to lower interest income, reflecting lower short-term interest rates. Dividend income varies from period to period due to changes in the investment portfolio and the amount, frequency and timing of dividends from investees. We continue to believe that maintaining ample liquidity is paramount and insist on safety over yield with respect to short-term investments.
Invested assets of our insurance businesses derive from shareholder capital and net liabilities assumed under insurance contracts or “float.” The major components of float are unpaid losses and LAE, including liabilities under retroactive reinsurance contracts, life, annuity and health benefit liabilities, unearned premiums and certain other liabilities, which are reduced by insurance premiums receivable, reinsurance receivables, deferred charges on retroactive reinsurance contracts and deferred policy acquisition costs. The effect of discount rate changes on long-duration insurance contracts, which are recorded in accumulated other comprehensive income, are excluded from float, as such amounts are not included in earnings in the Consolidated Statements of Earnings.
Float was approximately $178.5 billion at September 30, 2026, an increase of $2.1 billion from December 31, 2025. The cost of float is measured as the ratio of pre-tax underwriting earnings to float balances. Our combined insurance operations generated pre-tax underwriting earnings in the first nine months of 2026 and 2025, and the average cost of float was negative in each period.
A summary of cash and investments held in our insurance businesses follows (in millions).
|
September 30, |
|
December 31, |
|
||
Cash, cash equivalents and U.S. Treasury Bills* |
$ |
230,941 |
|
$ |
212,651 |
|
Equity securities |
|
333,359 |
|
|
294,144 |
|
Fixed maturity securities |
|
16,933 |
|
|
17,466 |
|
Other, including loans to affiliates |
|
3,880 |
|
|
4,702 |
|
|
$ |
585,113 |
|
$ |
528,963 |
|
——————
* Includes unsettled purchases of U.S. Treasury Bills of $15.4 billion at September 30, 2026 and $167 million at December 31, 2025. Such amounts were also included in liabilities and were paid shortly after the respective balance sheet date.
A summary of fixed maturity investments as of September 30, 2026 follows (in millions).
|
Amortized |
|
Unrealized |
|
Carrying |
|
|||
U.S. Treasury, U.S. government corporations and agencies |
$ |
2,693 |
|
$ |
(21 |
) |
$ |
2,672 |
|
Foreign governments |
|
13,040 |
|
|
(37 |
) |
|
13,003 |
|
Corporate and other |
|
1,106 |
|
|
152 |
|
|
1,258 |
|
|
$ |
16,839 |
|
$ |
94 |
|
$ |
16,933 |
|
U.S. government obligations are rated AA+ or Aa1 by the major rating agencies. Approximately 95% of our foreign government investments were rated AA or higher by at least one of the major rating agencies. Foreign government securities are issued or unconditionally guaranteed by national or provincial government entities.
38
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
BNSF
Burlington Northern Santa Fe, LLC (“BNSF”) operates one of the largest railroad systems in North America, with over 32,500 route miles of track in 28 states. BNSF also operates in three Canadian provinces. BNSF classifies its major business groups by type of product shipped, including consumer products, agricultural and energy products, industrial products and coal. A summary of BNSF’s earnings follows (dollars in millions).
|
|
Third Quarter |
|
|
First Nine Months |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Railroad operating revenues |
|
$ |
6,870 |
|
|
$ |
5,988 |
|
|
$ |
19,391 |
|
|
$ |
17,390 |
|
Railroad operating expenses |
|
|
4,388 |
|
|
|
3,841 |
|
|
|
12,591 |
|
|
|
11,409 |
|
Railroad operating earnings |
|
|
2,482 |
|
|
|
2,147 |
|
|
|
6,800 |
|
|
|
5,981 |
|
Other revenues (expenses), net |
|
|
57 |
|
|
|
44 |
|
|
|
173 |
|
|
|
164 |
|
Interest expense |
|
|
(273 |
) |
|
|
(279 |
) |
|
|
(826 |
) |
|
|
(821 |
) |
Pre-tax earnings |
|
|
2,266 |
|
|
|
1,912 |
|
|
|
6,147 |
|
|
|
5,324 |
|
Income taxes |
|
|
537 |
|
|
|
463 |
|
|
|
1,483 |
|
|
|
1,195 |
|
Net earnings |
|
$ |
1,729 |
|
|
$ |
1,449 |
|
|
$ |
4,664 |
|
|
$ |
4,129 |
|
Effective income tax rate |
|
|
23.7 |
% |
|
|
24.2 |
% |
|
|
24.1 |
% |
|
|
22.4 |
% |
A summary of BNSF’s railroad freight volumes by business group follows (cars/units in thousands).
|
|
Cars/Units |
|
|
Percentage Change |
|
|||||||||||||||||
|
|
Third Quarter |
|
|
First Nine Months |
|
|
Third |
|
First Nine |
|
||||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
Quarter |
|
Months |
|
|||||||
Consumer products |
|
|
1,557 |
|
|
|
1,474 |
|
|
|
4,421 |
|
|
|
4,194 |
|
|
|
5.6 |
% |
|
5.4 |
% |
Agricultural and energy products |
|
|
379 |
|
|
|
350 |
|
|
|
1,152 |
|
|
|
1,043 |
|
|
|
8.3 |
|
|
10.5 |
|
Industrial products |
|
|
376 |
|
|
|
362 |
|
|
|
1,067 |
|
|
|
1,044 |
|
|
|
3.9 |
|
|
2.2 |
|
Coal |
|
|
295 |
|
|
|
322 |
|
|
|
854 |
|
|
|
911 |
|
|
|
(8.4 |
) |
|
(6.3 |
) |
|
|
|
2,607 |
|
|
|
2,508 |
|
|
|
7,494 |
|
|
|
7,192 |
|
|
|
3.9 |
|
|
4.2 |
|
Railroad operating revenues increased 14.7% in the third quarter and 11.5% in the first nine months of 2026 compared to 2025. Car/unit volumes increased 3.9% and 4.2% in the third quarter and the first nine months of 2026, respectively, relative to the same periods in 2025. Average revenue per car/unit increased 10.5% in the third quarter and 7.1% in the first nine months of 2026, primarily from higher fuel surcharge revenue and higher yield. Pre-tax earnings increased 18.5% in the third quarter and 15.5% in the first nine months of 2026 compared to 2025.
Consumer products operating revenues were $2.5 billion in the third quarter and $6.9 billion in the first nine months of 2026, increases of 16.5% and 12.5%, respectively, from 2025. The revenue increases were attributable to higher average revenue per car/unit, primarily from higher fuel surcharge revenue, and volume increases. Volumes in the third quarter and the first nine months of 2026 increased 5.6% and 5.4%, respectively, in relation to 2025, primarily due to higher intermodal shipments resulting from higher West Coast imports and tightening truck capacity.
Agricultural and energy products operating revenues were $1.9 billion in the third quarter and $5.6 billion in the first nine months of 2026, increases of 18.9% and 17.2%, respectively, from 2025. The revenue increases in 2026 were attributable to higher average revenue per car/unit, arising from higher fuel surcharge revenue, higher yield and volume increases of 8.3% in the third quarter and 10.5% in the first nine months of 2026 relative to 2025. The volume increases were primarily due to higher grain, petroleum fuels, and oilseeds and meals shipments.
Industrial products operating revenues were $1.5 billion in the third quarter and $4.1 billion in the first nine months of 2026, increases of 15.2% and 9.1%, respectively, from 2025. The revenue increases were attributable to higher average revenue per car/unit from increases in fuel surcharge revenue and yield, along with increased volumes of 3.9% in the third quarter and 2.2% in the first nine months. The volume increases were primarily due to higher steel, aggregates, minerals, and cement shipments.
Coal operating revenues were $0.8 billion in the third quarter and $2.3 billion in the first nine months of 2026, slight increases from the same periods in 2025. The revenue increases were attributable to higher average revenue per car/unit from increases in fuel surcharge revenue and yield, partially offset by a decline in volumes of 8.4% in the third quarter and 6.3% in the first nine months of 2026. The volume declines were primarily due to plant retirements and lower demand, attributable to lower natural gas prices.
39
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
BNSF
Railroad operating expenses increased $547 million (14.2%) in the third quarter and $1.2 billion (10.4%) in the first nine months of 2026 compared to 2025. Compensation and benefits expenses rose less than 1% in the third quarter and in the first nine months of 2026 compared to 2025, reflecting increases from wage inflation, substantially offset by improved employee productivity. Fuel expenses increased $468 million (60.6%) in the third quarter and $941 million (42.0%) in the first nine months of 2026 compared to 2025, reflecting higher average fuel prices and higher volume, partially offset by increased fuel efficiency. Equipment rents, materials and other expenses increased $27 million (6.0%) in the third quarter and $97 million (6.9%) in the first nine months of 2026 compared to 2025. The increases were primarily related to higher volume and increased litigation and casualty related expenses.
Income tax expense increased $74 million (16.0%) in the third quarter and $288 million (24.1%) in the first nine months of 2026 compared to the same periods in 2025, primarily due to higher pre-tax earnings, as well as the impacts of changes in enacted state income tax rates.
BHE
Berkshire Hathaway Energy Company (“BHE”) is a holding company with subsidiaries that primarily operate within the energy industry. BHE’s domestic regulated utility interests include PacifiCorp, MidAmerican Energy Company (“MEC”) and NV Energy. BHE’s natural gas pipelines consist of five domestic regulated interstate natural gas pipeline systems and a 75% interest in a liquefied natural gas export, import and storage facility. Other energy subsidiaries operate two regulated electricity distribution businesses in Great Britain (“Northern Powergrid”), a regulated electricity transmission-only business in Alberta, Canada, and a diversified portfolio of mostly renewable power projects and investments. Another BHE subsidiary, HomeServices of America, Inc. (“HomeServices”), operates a residential real estate brokerage business and a residential real estate brokerage franchise business in the United States.
The rates BHE’s regulated utility and energy businesses charge customers for energy and services are largely based on the costs of business operations, including income taxes and a return on capital, and are subject to regulatory approval. To the extent such costs are not allowed in the approved rates, operating results will be adversely affected. A summary of BHE’s net earnings follows (dollars in millions).
|
|
Third Quarter |
|
|
First Nine Months |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Energy operating revenues |
|
$ |
6,590 |
|
|
$ |
6,059 |
|
|
$ |
17,813 |
|
|
$ |
16,695 |
|
Real estate operating revenues |
|
|
1,154 |
|
|
|
1,185 |
|
|
|
3,289 |
|
|
|
3,309 |
|
Other |
|
|
26 |
|
|
|
60 |
|
|
|
64 |
|
|
|
74 |
|
Total revenues |
|
|
7,770 |
|
|
|
7,304 |
|
|
|
21,166 |
|
|
|
20,078 |
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Energy cost of sales |
|
|
1,956 |
|
|
|
1,876 |
|
|
|
5,002 |
|
|
|
4,841 |
|
Energy operating expenses |
|
|
2,853 |
|
|
|
2,711 |
|
|
|
8,281 |
|
|
|
8,021 |
|
Real estate operating costs and expenses |
|
|
1,130 |
|
|
|
1,146 |
|
|
|
3,259 |
|
|
|
3,227 |
|
Interest expense |
|
|
752 |
|
|
|
658 |
|
|
|
2,197 |
|
|
|
1,968 |
|
Total costs and expenses |
|
|
6,691 |
|
|
|
6,391 |
|
|
|
18,739 |
|
|
|
18,057 |
|
Pre-tax earnings |
|
|
1,079 |
|
|
|
913 |
|
|
|
2,427 |
|
|
|
2,021 |
|
Income tax benefit* |
|
|
(574 |
) |
|
|
(606 |
) |
|
|
(1,337 |
) |
|
|
(1,385 |
) |
Net earnings after income taxes |
|
|
1,653 |
|
|
|
1,519 |
|
|
|
3,764 |
|
|
|
3,406 |
|
Noncontrolling interests and preferred stock dividends |
|
|
41 |
|
|
|
30 |
|
|
|
147 |
|
|
|
118 |
|
Net earnings attributable to Berkshire shareholders |
|
$ |
1,612 |
|
|
$ |
1,489 |
|
|
$ |
3,617 |
|
|
$ |
3,288 |
|
Effective income tax rate |
|
|
(53.2 |
)% |
|
|
(66.4 |
)% |
|
|
(55.1 |
)% |
|
|
(68.5 |
)% |
——————
* Includes significant production tax credits primarily from wind-powered electricity generation.
40
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
BHE
The discussion of BHE’s operating results that follows is based on after-tax earnings, reflecting how the energy businesses are managed and evaluated. A summary of net earnings attributable to Berkshire shareholders follows (dollars in millions).
|
|
Third Quarter |
|
|
First Nine Months |
|
|
Percentage Change |
|
||||||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
|
Third |
|
First Nine |
|
||||||
U.S. utilities |
|
$ |
1,044 |
|
|
$ |
850 |
|
|
$ |
2,000 |
|
|
$ |
1,712 |
|
|
|
22.8 |
% |
|
16.8 |
% |
Natural gas pipelines |
|
|
185 |
|
|
|
153 |
|
|
|
1,033 |
|
|
|
824 |
|
|
|
20.9 |
|
|
25.4 |
|
Other energy businesses |
|
|
254 |
|
|
|
259 |
|
|
|
800 |
|
|
|
909 |
|
|
|
(1.9 |
) |
|
(12.0 |
) |
Real estate brokerage |
|
|
21 |
|
|
|
33 |
|
|
|
29 |
|
|
|
63 |
|
|
|
(36.4 |
) |
|
(54.0 |
) |
Corporate interest and other |
|
|
108 |
|
|
|
194 |
|
|
|
(245 |
) |
|
|
(220 |
) |
|
|
(44.3 |
) |
|
(11.4 |
) |
|
|
$ |
1,612 |
|
|
$ |
1,489 |
|
|
$ |
3,617 |
|
|
$ |
3,288 |
|
|
|
8.3 |
|
|
10.0 |
|
The U.S. utilities operate independently in several states, including Utah, Oregon, Wyoming and other Western states (PacifiCorp), Iowa and Illinois (MEC) and Nevada (NV Energy). Net earnings increased $194 million (22.8%) in the third quarter and $288 million (16.8%) in the first nine months of 2026 compared to 2025, reflecting increases in electric utility margin and other income combined with higher income tax benefits from recognized production tax credits and the impact of wildfire loss accruals at PacifiCorp of $100 million in the third quarter of 2025, partially offset by increases in interest expense and other energy operating expenses.
The U.S. utilities’ electric utility margin was $2.9 billion in the third quarter and $7.1 billion in the first nine months of 2026, increases of $325 million (12.7%) and $542 million (8.2%), respectively, compared to 2025. The increases reflected higher retail customer and wholesale volumes and higher retail customer rates in certain territories, partially offset by higher energy cost of sales. Retail customer volumes increased 5.5% (up 7.2% at MEC, 6.3% at NV Energy and 4.0% at PacifiCorp) in the first nine months of 2026 compared to 2025, primarily due to higher customer usage and an increase in the average number of customers. The increase in energy operating expenses was primarily due to higher depreciation and amortization expense and higher operations and maintenance costs, including vegetation management and other wildfire prevention costs.
Net earnings of natural gas pipelines increased $32 million in the third quarter and $209 million in the first nine months of 2026 compared to 2025. The increases reflected higher transportation and storage revenues from a general rate case and higher variable liquefied natural gas revenues.
Net earnings of other energy businesses decreased $5 million in the third quarter and $109 million in the first nine months of 2026 compared to 2025. The year-to-date decline was primarily due to lower earnings at Northern Powergrid from lower distribution revenues due to lower tariffs from inflation adjustments beginning in the second quarter of 2025 and higher interest expense.
Net earnings of real estate brokerage businesses decreased $12 million in the third quarter and $34 million in the first nine months of 2026 compared to 2025, primarily due to lower revenues, as well as charges in the second quarter of 2026 associated with a litigation settlement. The real estate brokerage business continues to be negatively impacted by the limited availability of homes for sale, attributable in part to elevated interest rates, and high home prices.
Corporate interest and other net losses include BHE corporate interest expense and unallocated general and administrative expenses and income taxes, including tax credits recognized on a consolidated basis.
41
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Manufacturing, Service and Retailing
A summary of revenues and earnings of our manufacturing, service and retailing businesses follows (dollars in millions).
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Third Quarter |
|
|
First Nine Months |
|
Percentage Change |
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
Third |
|
First Nine |
|
||||||
|
2026 |
|
2025 |
|
|
2026 |
|
2025 |
|
Quarter |
|
Months |
|
||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Manufacturing |
$ |
24,001 |
|
$ |
20,047 |
|
|
$ |
67,241 |
|
$ |
58,782 |
|
|
19.7 |
% |
|
14.4 |
% |
Service and retailing |
|
40,451 |
|
|
34,666 |
|
|
|
113,555 |
|
|
100,806 |
|
|
16.7 |
|
|
12.6 |
|
|
$ |
64,452 |
|
$ |
54,713 |
|
|
$ |
180,796 |
|
$ |
159,588 |
|
|
17.8 |
|
|
13.3 |
|
Pre-tax earnings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Manufacturing |
$ |
3,861 |
|
$ |
3,584 |
|
|
$ |
11,037 |
|
$ |
9,547 |
|
|
7.7 |
% |
|
15.6 |
% |
Service and retailing |
|
1,461 |
|
|
1,136 |
|
|
|
4,365 |
|
|
3,826 |
|
|
28.6 |
|
|
14.1 |
|
|
|
5,322 |
|
|
4,720 |
|
|
|
15,402 |
|
|
13,373 |
|
|
12.8 |
|
|
15.2 |
|
Income taxes and noncontrolling interests |
|
1,280 |
|
|
1,104 |
|
|
|
3,691 |
|
|
3,096 |
|
|
|
|
|
||
Net earnings* |
$ |
4,042 |
|
$ |
3,616 |
|
|
$ |
11,711 |
|
$ |
10,277 |
|
|
|
|
|
||
Effective income tax rate |
|
23.3 |
% |
|
22.7 |
% |
|
|
23.2 |
% |
|
22.4 |
% |
|
|
|
|
||
Pre-tax earnings as a percentage of revenues |
|
8.3 |
% |
|
8.6 |
% |
|
|
8.5 |
% |
|
8.4 |
% |
|
|
|
|
||
——————
* Excludes certain acquisition accounting expenses, primarily related to amortization of intangible assets recorded in connection with certain of our business acquisitions. The after-tax acquisition accounting expenses excluded from net earnings were $111 million in the third quarter and $338 million in the first nine months of 2026 and $123 million in the third quarter and $371 million in the first nine months of 2025. These expenses are included in “Other” in the summary of net earnings on page 33 and in the “Other” earnings table on page 48.
Manufacturing
Our manufacturing group consists of a variety of industrial, building and consumer products businesses. A summary of revenues and pre-tax earnings of these operations follows (dollars in millions).
|
Third Quarter |
|
|
First Nine Months |
|
||||||||||
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
||||
Industrial products |
$ |
12,200 |
|
|
$ |
9,471 |
|
|
$ |
35,546 |
|
|
$ |
28,072 |
|
Building products |
|
8,351 |
|
|
|
7,000 |
|
|
|
21,346 |
|
|
|
20,112 |
|
Consumer products |
|
3,450 |
|
|
|
3,576 |
|
|
|
10,349 |
|
|
|
10,598 |
|
|
$ |
24,001 |
|
|
$ |
20,047 |
|
|
$ |
67,241 |
|
|
$ |
58,782 |
|
Pre-tax earnings: |
|
|
|
|
|
|
|
|
|
|
|
||||
Industrial products |
$ |
2,337 |
|
|
$ |
1,851 |
|
|
$ |
6,845 |
|
|
$ |
5,260 |
|
Building products |
|
1,112 |
|
|
|
1,151 |
|
|
|
3,033 |
|
|
|
3,078 |
|
Consumer products |
|
412 |
|
|
|
582 |
|
|
|
1,159 |
|
|
|
1,209 |
|
|
$ |
3,861 |
|
|
$ |
3,584 |
|
|
$ |
11,037 |
|
|
$ |
9,547 |
|
Pre-tax earnings as a percentage of revenues: |
|
|
|
|
|
|
|
|
|
|
|
||||
Industrial products |
|
19.2 |
% |
|
|
19.5 |
% |
|
|
19.3 |
% |
|
|
18.7 |
% |
Building products |
|
13.3 |
|
|
|
16.4 |
|
|
|
14.2 |
|
|
|
15.3 |
|
Consumer products |
|
11.9 |
|
|
|
16.3 |
|
|
|
11.2 |
|
|
|
11.4 |
|
42
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Manufacturing, Service and Retailing
Industrial products
The industrial products group includes complex metal components and products for aerospace, power and general industrial markets (Precision Castparts Corp. (PCC)), specialty chemicals (The Lubrizol Corporation (Lubrizol)), metal cutting tools/systems (IMC International Metalworking Companies (IMC)), and Marmon Holdings, Inc. (Marmon) which consists of numerous autonomous manufacturing, service and leasing businesses aggregated into twelve groups. Other industrial products group members also produce equipment and systems for the livestock and agricultural industries (CTB International), drag reducing agents for pipelines (LiquidPower Specialty Products), structural steel fabrication products (W&W|AFCO) and beginning in August 2025, rodent control products (Bell Laboratories). On January 2, 2026, Berkshire acquired a chemicals business (OxyChem) from Occidental Petroleum Corporation. OxyChem produces basic chemicals.
Revenues of the industrial products group were $12.2 billion in the third quarter and $35.5 billion in the first nine months of 2026, increases of $2.7 billion (28.8%) and $7.5 billion (26.6%), respectively, compared to the same periods in 2025. The increases were primarily attributable to business acquisitions and increases at several of our pre-existing business units. Pre-tax earnings increased $486 million (26.3%) in the third quarter and $1.6 billion (30.1%) in the first nine months of 2026 compared to 2025. Pre-tax earnings as a percentage of revenues for the group were 19.3% for the first nine months of 2026, an increase of 0.6 percentage points compared to 2025.
PCC’s revenues were $3.2 billion in the third quarter and $9.2 billion in the first nine months of 2026, increases of 19.1% and 13.9%, respectively, compared to the same periods in 2025. The increases were driven by increased sales of aerospace and industrial gas turbine products for power applications, primarily attributable to strong customer demand and higher prices, due in part to pass through of rising costs of certain raw materials. PCC’s pre-tax earnings increased 29.6% in the third quarter and 32.2% in the first nine months of 2026 relative to 2025. The earnings increases in 2026 reflected the aerospace and industrial gas turbine sales growth and pricing and improved manufacturing efficiencies. Earnings in 2025 and 2026 were impacted by a fire at a fasteners facility that occurred in the first quarter of 2025, including the related insurance recoveries. Future sales and earnings growth will depend on successfully increasing production and expanding capacity, as necessary, to meet customer demand.
Lubrizol’s revenues were $1.7 billion in the third quarter and $5.1 billion in the first nine months of 2026, increases of 9.3% and 7.7%, respectively, compared to 2025. The increases were primarily attributable to higher volumes and selling prices and favorable year-to-date foreign currency translation effects, partially offset by unfavorable product mix. The increases in selling prices were necessitated by significant increases in raw materials, energy and supply chain costs that began in the latter part of the first quarter and continued through the third quarter of 2026, resulting in increased production costs. Lubrizol’s pre-tax earnings increased 10.3% in the third quarter and 14.4% in the first nine months of 2026 compared to 2025. The increases reflected the impacts of higher sales volumes and prices, partially offset by higher raw materials costs, operating expenses, and unfavorable product mix.
Marmon’s revenues were $3.6 billion in the third quarter and $10.4 billion in the first nine months of 2026, increases of 10.8% and 7.2%, respectively, compared to the same periods in 2025. The increases were primarily attributable to the transition of Acme Brick from our building products group to Marmon beginning January 1, 2026. Otherwise, revenue increases in the first nine months of 2026 were generated in the Plumbing & Refrigeration (21.6%) and Electrical (15.3%) groups, primarily attributable to higher copper prices and increased volumes. These increases were partially offset by lower revenues from the Retail Solutions (10.4%), Industrial Products (8.4%), Rail & Leasing (7.4%) and Water Technologies (5.4%) groups, primarily due to lower sales volumes and the effects of business divestitures.
Marmon’s pre-tax earnings increased 8.2% in the third quarter and 6.8% in the first nine months of 2026 in comparison with 2025. The year-to-date increase was primarily due to increased gains on business divestitures and real estate disposals, the addition of Acme Brick, and tariff refunds. Otherwise, earnings among Marmon’s business groups were mixed. In the first nine months of 2026, earnings increases were generated by the Plumbing & Refrigeration, Medical and Crane Services groups, primarily attributable to higher copper spreads and volumes, higher implant volumes and higher demand in the U.S., respectively. Lower earnings were generated in the first nine months of 2026 by the Transportation Products, Rail & Leasing and Foodservice Technologies groups. The Rail & Leasing earnings decline reflected lower railcar repair demand, while the Transportation Products and Foodservice Technologies group declines were primarily attributable to lower sales volume and higher material and freight costs.
43
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Manufacturing, Service and Retailing
IMC’s revenues were approximately $1.25 billion in the third quarter and $3.7 billion in the first nine months of 2026, increases of 20.0% and 22.4%, respectively, compared to 2025. IMC has experienced significant raw materials price increases, which began in 2025 and continued through the first nine months of 2026, which necessitated selling price increases. Customer demand and sales volumes also increased over the first nine months of 2026, primarily attributable to customers accelerating purchases. IMC’s pre-tax earnings in the third quarter and first nine months of 2026 increased 29.8% and 47.1%, respectively, relative to 2025, reflecting increases in sales and gross margin rates, including favorable fixed manufacturing cost absorption and product sales mix, partially offset by higher raw materials costs and selling expenses. The impacts of rising raw materials prices are expected to have a negative effect on IMC’s earnings over the remainder of 2026 and into 2027. IMC operates globally and manufactures a large portion of its products in Israel. IMC’s operations in Israel have not been significantly impacted by the conflicts in the region.
OxyChem’s revenues were $1.3 billion in the third quarter and $3.9 billion in the first nine months of 2026. OxyChem generated pre-tax earnings of $71 million in the third quarter and $192 million in the first nine months of 2026, which included the effects of incremental depreciation and amortization expense related to acquisition accounting fair value adjustments. In addition, revenues and earnings increases were also generated in the first nine months of 2026 by each of the other industrial products businesses.
Building products
The building products group includes our homebuilding businesses, Clayton Homes and Taylor Morrison Home Corporation (“TMHC”), collectively referred to as “Homebuilding Businesses,” which offer site-built home construction and land development, manufactured (factory-built) homes, and related lending and financial services. TMHC was acquired by Berkshire on July 24, 2026, and is included in our Consolidated Financial Statements beginning as of that date. See Note 2 to the accompanying Consolidated Financial Statements. Other building products businesses currently include flooring (Shaw), insulation, roofing and engineered products (Johns Manville), paint and coatings (Benjamin Moore) and residential and commercial construction and engineering products and systems (MiTek).
Aggregate revenues of the building products group increased $1.4 billion (19.3%) in the third quarter and $1.2 billion (6.1%) in the first nine months of 2026 compared to 2025. Pre-tax earnings declined $39 million (3.4%) in the third quarter and $45 million (1.5%) in the first nine months of 2026 compared to 2025.
Revenues of our Homebuilding Businesses were $4.7 billion in the third quarter and $11.0 billion in the first nine months of 2026, increases of 41.4% and 15.0%, respectively, compared to 2025. Revenues from homebuilding activities increased $1.2 billion (47.1%) in the third quarter and $1.1 billion (15.8%) in the first nine months of 2026 compared to 2025. Site-built units sold increased 87.2% in the third quarter and 30.2% in the first nine months of 2026 relative to the same periods in 2025. These increases were primarily attributable to TMHC, which produced home sales of approximately $1.1 billion from the acquisition date through September 30, 2026. In the first nine months of 2026, factory-built home sales declined 1.4% versus 2025, reflecting a 2.7% decline in units sold and changes in sales mix.
Lending, financial services and other revenues of the Homebuilding Businesses increased 24.5% in the third quarter and 12.9% in the first nine months of 2026 compared to 2025, primarily due to other revenues of TMHC and increased interest income from higher average manufactured home loan balances and average interest rates. Manufactured housing-related loan balances, net of discounts and allowances for credit losses, were approximately $30.7 billion as of September 30, 2026, an increase of 6.4% since September 30, 2025. These loans are largely funded by borrowings from Berkshire finance affiliates.
Pre-tax earnings of the Homebuilding Businesses were $575 million in the third quarter and $1.4 billion in the first nine months of 2026, an increase of 6.7% in the third quarter and a decrease of 1.3% in the first nine months compared to 2025. The third quarter increase reflected earnings from TMHC, partially offset by reduced earnings from Clayton Homes, primarily attributable to lower gross margins on its homebuilding activities. Financial services pre-tax earnings in the first nine months of 2026 were relatively unchanged as the increase in interest income was substantially offset by increased interest expense, largely attributable to increased borrowings from affiliates, and higher operating expenses. The corresponding interest income from the borrowings from affiliates is included in the “Other” earnings section on page 48.
Our other building products businesses generated revenues of approximately $3.6 billion in the third quarter and $10.4 billion in the first nine months of 2026, declines of $29 million (0.8%) and $202 million (1.9%), respectively, versus the same periods in 2025. The revenue declines reflected the impact of the transition of Acme Brick to Marmon beginning January 1, 2026, partially offset by revenue increases from the remaining businesses of 3.5% in the third quarter and 2.3% in the first nine months of 2026. Revenues in 2026 reflected higher selling prices, in general, and increased volumes for insulation and roofing products, partially offset by lower volumes for flooring and coatings products.
44
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Manufacturing, Service and Retailing
Other building products pre-tax earnings declined $75 million (12.3%) in the third quarter and $27 million (1.7%) in the first nine months of 2026 compared to 2025. The earnings declines reflected the negative impacts of lower gross margins from higher raw materials and other input costs at certain of our businesses and the Acme transition to Marmon, partially offset by refunds received in the second and third quarters of 2026 of trade tariffs paid primarily in 2025, as well as lower restructuring and legal settlement costs compared to 2025.
Consumer products
The consumer products group includes leisure vehicles (Forest River), several apparel and footwear operations (including Fruit of the Loom, Garan, H.H. Brown Shoe Group and Brooks Sports) and a manufacturer of high-performance alkaline batteries (Duracell). This group also includes a global toy company (Jazwares), jewelry products (Richline) and custom picture framing products (Larson-Juhl).
Consumer products group revenues were approximately $3.5 billion in the third quarter and $10.3 billion in the first nine months of 2026, declines of 3.5% and 2.3%, respectively, compared to 2025. The revenue declines were driven by Fruit of the Loom and Forest River, primarily attributable to lower sales volumes, unfavorable changes in sales mix and the impacts of exiting unprofitable lines of business at Fruit of the Loom, partially offset by higher average selling prices. These declines were partially offset by revenue increases at Brooks Sports, Duracell, Richline and our other apparel and footwear businesses, attributable to combinations of higher volumes, changes in sales mix and/or favorable foreign currency translation effects.
Pre-tax earnings of our consumer products group declined 29.2% in the third quarter and 4.1% in the first nine months of 2026 versus 2025. These declines were driven by lower advanced manufacturing production tax credits at Duracell. In the third quarter of 2025, Duracell determined certain of its battery product components manufactured in the U.S. were eligible for the refundable advanced manufacturing production income tax credits beginning in the 2023 tax year and recorded the eligible credits for the 2023, 2024 and first nine months of 2025 periods in the third quarter of 2025. Before the impacts of the aforementioned tax credits, the earnings of the group increased 5.2% in the first nine months of 2026 compared to 2025, primarily attributable to earnings increases from the footwear and apparel businesses and partially offset by lower earnings from Forest River and Duracell. The increase from the footwear and apparel businesses reflected a combination of increases in gross margin rates, including the impacts of tariff refunds, the favorable impacts of business restructurings and, in certain instances, increased sales volumes. The earnings decline from Forest River was primarily due to the reduction of gross margins from lower sales and unfavorable changes in sales mix, partially offset by lower selling, general and administrative expenses. The earnings decline from Duracell was primarily due to expenses associated with the relocation of certain administrative facilities.
Service and retailing
A summary of revenues and pre-tax earnings of our service and retailing businesses follows (dollars in millions).
|
Third Quarter |
First Nine Months |
|
||||||||||||
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
||||
Service |
$ |
7,093 |
|
|
$ |
5,752 |
|
|
$ |
20,401 |
|
|
$ |
16,922 |
|
McLane |
|
12,327 |
|
|
|
13,191 |
|
|
|
36,381 |
|
|
|
37,967 |
|
Retailing |
|
4,886 |
|
|
|
4,841 |
|
|
|
14,451 |
|
|
|
14,496 |
|
Pilot |
|
16,145 |
|
|
|
10,882 |
|
|
|
42,322 |
|
|
|
31,421 |
|
|
$ |
40,451 |
|
|
$ |
34,666 |
|
|
$ |
113,555 |
|
|
$ |
100,806 |
|
Pre-tax earnings: |
|
|
|
|
|
|
|
|
|
|
|
||||
Service |
$ |
844 |
|
|
$ |
678 |
|
|
$ |
2,508 |
|
|
$ |
2,055 |
|
McLane |
|
135 |
|
|
|
173 |
|
|
|
452 |
|
|
|
530 |
|
Retailing |
|
299 |
|
|
|
302 |
|
|
|
982 |
|
|
|
971 |
|
Pilot |
|
183 |
|
|
|
(17 |
) |
|
|
423 |
|
|
|
270 |
|
|
$ |
1,461 |
|
|
$ |
1,136 |
|
|
$ |
4,365 |
|
|
$ |
3,826 |
|
Pre-tax earnings as a percentage of revenues: |
|
|
|
|
|
|
|
|
|
|
|
||||
Service |
|
11.9 |
% |
|
|
11.8 |
% |
|
|
12.3 |
% |
|
|
12.1 |
% |
McLane |
|
1.1 |
|
|
|
1.3 |
|
|
|
1.2 |
|
|
|
1.4 |
|
Retailing |
|
6.1 |
|
|
|
6.2 |
|
|
|
6.8 |
|
|
|
6.7 |
|
Pilot |
|
1.1 |
|
|
|
(0.2 |
) |
|
|
1.0 |
|
|
|
0.9 |
|
45
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Manufacturing, Service and Retailing
Service
Our service group includes NetJets and FlightSafety (aviation services), which offer shared ownership programs for general aviation aircraft and high technology training products and services to operators of aircraft, and TTI, a distributor of electronics components. Our other service businesses franchise and service a network of quick service restaurants (Dairy Queen), lease transportation equipment (XTRA) and furniture (CORT), provide third party logistics services that primarily serve the petroleum and chemical industries (Charter Brokerage), distribute electronic news, multimedia and regulatory filings (Business Wire), provide various facilities engineering and construction management services (IPS-Integrated Project Services, LLC (IPS)) and operate a television station in Miami, Florida (WPLG). McLane, which we view as a service business, is addressed separately since it is deemed a separate segment for financial reporting purposes.
Service group revenues increased $1.3 billion (23.3%) in the third quarter and $3.5 billion (20.6%) in the first nine months of 2026 relative to 2025, driven by TTI, aviation services and IPS. Revenues increased in the first nine months at TTI (30.0%), aviation services (15.7%) and IPS (19.2%). The revenue increase at TTI reflected continuing high customer demand, favorable foreign currency translation effects and inventory cost-based price increases. The increase in demand, in part, was attributable to customers responding to potential further price increases and supply chain concerns, including extended inventory order lead times. Revenue growth in the future will be influenced by constraints in supplier capacities. The revenue increase from aviation services was primarily due to increases in the number of aircraft in shared ownership programs, in-flight hours flown, training hours and average prices. The revenue increase at IPS was primarily attributable to life sciences and data center construction and other construction consulting services.
Service group pre-tax earnings increased $166 million (24.5%) in the third quarter and $453 million (22.0%) in the first nine months of 2026 compared to 2025, primarily attributable to TTI, aviation services and overall increases at our smaller businesses. Pre-tax earnings as a percentage of revenues rose 0.2 percentage points in the first nine months of 2026 compared to 2025. The earnings increases from TTI reflected increases in revenues and improved operating expense leverage, partially offset by increased foreign currency exchange losses. TTI’s gross sales margin rates were slightly higher in the first nine months of 2026 than in 2025, as the impact of improved product mix was largely offset by increased tariff costs. Inventory cost and supply chain uncertainties could negatively impact TTI’s gross margins in the future. The earnings increases from aviation services were primarily attributable to increased revenues and lower contract losses, partially offset by higher flight crew and instructor costs and higher maintenance, fuel, subcontract and other variable costs.
McLane
McLane Company, Inc. (“McLane”) operates a wholesale distribution business that provides grocery and non-food consumer products to retailers and convenience stores (“retail”) and to restaurants (“restaurant”). McLane also operates businesses that are wholesale distributors of distilled spirits, wine and beer (“beverage”). McLane’s retail and restaurant businesses generate very high sales volumes and low profit margins.
McLane’s revenues declined 6.5% in the third quarter and 4.2% in the first nine months of 2026 compared to 2025, primarily due to lower retail business sales (9.0% year-to-date), partially offset by increased restaurant sales (3.9% year-to-date). The year-to-date decline in retail business sales was attributable to lower volumes, primarily from net customer losses and changes in business mix, partially offset by the impact of price inflation. The year-to-date increase in restaurant sales was attributable to increased volumes and cost-based price increases. Pre-tax earnings declined $38 million (22.0%) in the third quarter and $78 million (14.7%) in the first nine months of 2026 relative to 2025, reflecting declines in overall gross sales margins, including the impact of lower inventory price change gains, partially offset by reductions in operating expenses and higher other income and gains from asset sales in the first quarter of 2026.
Retailing
Our retailing businesses include Berkshire Hathaway Automotive, Inc. (“BHA”), which consists of over 80 auto dealerships that sell new and pre-owned automobiles and offer repair services and related products. BHA also offers and insures vehicle service contracts and related insurance products. Our retailing businesses also include four home furnishings businesses (Nebraska Furniture Mart, R.C. Willey, Jordan’s and Star Furniture), which sell furniture, appliances, flooring and electronics.
Other retailing businesses include three jewelry businesses (Borsheims, Helzberg and Ben Bridge), See’s Candies (confectionery products), Pampered Chef (high-quality kitchen tools), Oriental Trading Company (party supplies, school supplies and toys and novelties) and Detlev Louis Motorrad, a retailer of motorcycle accessories based in Germany. Pilot Travel Centers (“Pilot”), which we view primarily as a retailing business, is addressed separately since it is deemed a segment for financial reporting purposes.
46
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Manufacturing, Service and Retailing
Retailing group aggregate revenues in the third quarter and first nine months of 2026 were relatively unchanged compared to 2025. BHA’s revenues represented about 71% of retailing group revenues in the first nine months of 2026. BHA’s revenue increased 0.8% in the third quarter and declined 0.6% in the first nine months of 2026 compared to 2025. New and pre-owned vehicle retail sales increased 1.9% in the third quarter and declined 0.7% in the first nine months of 2026 compared to 2025, reflecting lower unit sales and changes in sales mix. Additionally, BHA’s service contract and parts service and repair revenues increased in the first nine months of 2026 compared to 2025.
Aggregate revenues of the other retailing businesses increased slightly in the third quarter and first nine months of 2026 versus 2025. Several of our other retailing businesses continued to experience sluggish customer demand, attributable to a combination of increased competition and the impacts of higher economic uncertainty and changes in consumer confidence.
Retailing group pre-tax earnings declined 1.0% in the third quarter and increased 1.1% in the first nine months of 2026 compared to 2025. BHA’s pre-tax earnings declined 6.2% in the third quarter and increased 0.8% in the first nine months of 2026 compared to 2025. The year-to-date increase reflected higher earnings from service and service contract operations, substantially offset by lower vehicle gross sales margins. Aggregate pre-tax earnings for the remainder of our retailing group increased $14 million in the third quarter and $5 million in the first nine months of 2026 compared to 2025, reflecting gains from asset sales and increased finance income in the third quarter.
Pilot
Pilot operates travel centers, primarily under the names Pilot or Flying J, and fuel-only retail locations. Pilot also operates large wholesale fuel and fuel marketing platforms in the U.S. Pilot’s revenues increased $5.3 billion (48.4%) in the third quarter and $10.9 billion (34.7%) in the first nine months of 2026 compared to 2025, primarily attributable to higher fuel prices. Retail fuel volumes increased slightly in the third quarter and decreased slightly in the first nine months of 2026 versus 2025.
Pilot’s pre-tax earnings increased $200 million in the third quarter and $153 million (56.7%) in the first nine months of 2026 compared to 2025. The increases reflected higher gross margins, partially offset by increases in depreciation and amortization and store operating and general and administrative expenses. Additionally, pre-tax earnings in the third quarter of 2026 included a loss of $116 million in connection with a business disposition that closed on November 2, 2026. In 2025, Pilot recorded charges in the third quarter from adjustments to certain fuel related balance sheet accounts, which substantially offset gains from asset dispositions earlier in the year. Gross margins in the first nine months of 2026 were also negatively affected by net losses on derivative contracts included in earnings from increases in fuel and commodity prices. The effects of price increases on the underlying physical inventory and commodity values are deferred until sold. Volatility in fuel prices can produce volatility in Pilot’s periodic earnings.
Investment Gains (Losses)
A summary of earnings from investment gains (losses) follows (dollars in millions).
|
Third Quarter |
|
|
First Nine Months |
|
||||||||||
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Investment gains (losses) |
$ |
11,946 |
|
|
$ |
21,939 |
|
|
$ |
26,418 |
|
|
$ |
21,868 |
|
Income taxes and noncontrolling interests |
|
2,539 |
|
|
|
4,628 |
|
|
|
5,567 |
|
|
|
4,625 |
|
Net earnings (losses) |
$ |
9,407 |
|
|
$ |
17,311 |
|
|
$ |
20,851 |
|
|
$ |
17,243 |
|
Effective income tax rate |
|
21.3 |
% |
|
|
21.1 |
% |
|
|
21.1 |
% |
|
|
21.1 |
% |
Unrealized gains and losses arising from changes in market prices of our investments in equity securities are included in our reported earnings, which significantly increases the volatility of our periodic net earnings given the magnitude of our equity securities portfolio and the inherent volatility of equity securities prices. Unrealized gains and losses on our investments in equity securities also include the effects of changes in foreign currency exchange rates on investments in equity securities of non-U.S. issuers that are held by our U.S.-based subsidiaries.
Pre-tax investment gains and losses included net unrealized gains of $11.8 billion in the third quarter and $24.5 billion in the first nine months of 2026 and $20.6 billion in the third quarter and $23.6 billion in the first nine months of 2025 attributable to changes during the period in market prices on equity securities we held at the end of each period. Taxable investment gains and losses on equity securities sold, which are generally the difference between sales proceeds and the original cost basis of the securities sold, were gains of $2.2 billion in the third quarter and $11.8 billion in the first nine months of 2026 compared to $10.4 billion in the third quarter and $18.7 billion in the first nine months of 2025.
We believe that investment gains and losses, whether realized from sales or unrealized from changes in market prices, are often meaningless in terms of understanding our reported consolidated earnings or evaluating our periodic economic performance. We also continue to believe the investment gains and losses recorded in earnings in any given period have little analytical or predictive value.
47
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Other
A summary of after-tax other earnings follows (in millions).
|
Third Quarter |
|
|
First Nine Months |
|
|
||||||||||
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
|
||||
Investment income |
$ |
930 |
|
|
$ |
904 |
|
|
$ |
2,854 |
|
|
$ |
2,639 |
|
|
Foreign currency exchange rate gains (losses) on Berkshire |
|
(343 |
) |
|
|
331 |
|
|
|
232 |
|
|
|
(1,259 |
) |
|
Equity method earnings |
|
789 |
|
|
|
276 |
|
|
|
1,155 |
|
|
|
576 |
|
* |
Acquisition accounting expenses |
|
(111 |
) |
|
|
(123 |
) |
|
|
(338 |
) |
|
|
(371 |
) |
|
Other earnings (losses) |
|
(29 |
) |
|
|
(7 |
) |
|
|
(133 |
) |
|
|
(131 |
) |
|
|
$ |
1,236 |
|
|
$ |
1,381 |
|
|
$ |
3,770 |
|
|
$ |
1,454 |
|
|
——————
* Excludes other-than-temporary impairment loss on our investment in Kraft Heinz. See Note 5 to the Consolidated Financial Statements.
Investment income includes corporate interest income and dividend income not allocated to operating businesses. After-tax corporate investment income increased $26 million in the third quarter and $215 million in the first nine months of 2026 compared to 2025, primarily due to increased investments in U.S. Treasury Bills, including investments derived from capital distributions from Berkshire subsidiaries, partially offset by lower interest rates and effects of cash used in business acquisitions in 2026.
Foreign currency exchange rate gains and losses on Berkshire’s and BHFC’s senior notes represent the effects of changes in foreign currency exchange rates recognized in earnings from the periodic revaluation of non-U.S. Dollar denominated senior note liabilities into U.S. Dollars. The gains and losses recorded in any given period can be significant due to the size of the borrowings and the inherent volatility in foreign currency exchange rates.
Equity method earnings shown in the preceding table include our earnings from Kraft Heinz, Occidental and Berkadia. After-tax equity method earnings increased $513 million in the third quarter and $579 million in the first nine months of 2026 compared to 2025 due to increased earnings from Occidental in each period and Kraft Heinz in the first nine months. Historically, we recorded our share of Occidental earnings on a one-quarter lag and, during the second quarter of 2025, we began recording our share of Kraft Heinz’s earnings on a one-quarter lag.
Acquisition accounting expenses include charges arising from the application of the acquisition method of accounting in connection with certain of Berkshire’s past business acquisitions. These charges are primarily from the amortization of intangible assets recorded in connection with those acquisitions. Other earnings and losses primarily include unallocated corporate and other general and administrative expenses, interest expense, income tax expense and interest income on certain intercompany loans.
Financial Condition
Our Consolidated Balance Sheet continues to reflect significant liquidity and a very strong capital base. Berkshire’s shareholders’ equity at September 30, 2026 was $761.4 billion, an increase of $43.9 billion since December 31, 2025. Net earnings attributable to Berkshire shareholders were $57.9 billion for the first nine months of 2026, which included after-tax investment gains of approximately $20.9 billion. Investment gains and losses from changes in the market prices of our investments in equity securities usually produce significant volatility in our earnings.
Berkshire’s common stock repurchase program permits Berkshire to repurchase its Class A and Class B shares at prices below Berkshire’s intrinsic value, as conservatively determined by Berkshire’s Chief Executive Officer after consultation with the Chairman of the Board. We are not committed to a minimum or subject to a maximum repurchase amount. We will not repurchase our stock if it reduces our consolidated cash, cash equivalents and U.S. Treasury Bills holdings to below $30 billion. Financial strength and redundant liquidity will always be of paramount importance at Berkshire. Berkshire acquired $14.4 billion of treasury stock in the first nine months of 2026, including purchases in September that were settled in October.
At September 30, 2026, our insurance and other businesses held investments in cash, cash equivalents and U.S. Treasury Bills (net of payables for purchases in September that settled in October) of $352.3 billion. Investments in equity and fixed maturity securities, excluding our equity method investments, were $352.6 billion. On January 2, 2026, Berkshire acquired OxyChem for approximately $9.4 billion. Additionally, Berkshire acquired TMHC on July 24, 2026, for aggregate cash consideration of approximately $6.8 billion.
48
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Financial Condition
Excluding borrowings of BHE and BNSF, our borrowings at September 30, 2026 were $45.8 billion, primarily issued by Berkshire and BHFC. Berkshire’s outstanding debt at September 30, 2026 was approximately $20.4 billion, a decrease of $2.2 billion since December 31, 2025. The decline was primarily attributable to repayments of maturing debt of $3.7 billion, partially offset by debt issued in April. Berkshire issued ¥272.3 billion ($1.7 billion) of senior notes in April 2026 with maturity dates ranging from 2029 to 2056 and a weighted average interest rate of 2.4%.
Senior note borrowings of BHFC, a wholly-owned financing subsidiary, were approximately $18.2 billion at September 30, 2026, substantially unchanged from December 31, 2025. BHFC’s borrowings are used to fund a portion of home loans originated and acquired by Clayton Homes and equipment held for lease by Marmon’s railcar leasing business. Berkshire guarantees BHFC’s senior notes for the full and timely payment of principal and interest.
BNSF’s outstanding debt was $23.5 billion as of September 30, 2026, a decrease of $535 million since December 31, 2025. BHE’s aggregate borrowings were $61.5 billion at September 30, 2026, an increase of $2.2 billion from December 31, 2025. In the first nine months of 2026, BHE subsidiaries issued $4.8 billion of term debt, with a weighted average interest rate of 5.8% and maturity dates ranging from 2029 to 2056. BHE subsidiaries repaid term debt of $1.3 billion and reduced short-term borrowings by $1.1 billion. Berkshire does not guarantee the repayment of debt issued by BNSF, BHE or any of their subsidiaries or affiliates.
In the first nine months of 2026, our diverse group of businesses generated net cash flows from operating activities of $33.9 billion. Our consolidated capital expenditures for property, plant and equipment and equipment held for lease were $16.1 billion in the first nine months of 2026, of which $10.2 billion was attributable to BNSF and BHE. BNSF and BHE maintain large investments in capital assets (property, plant and equipment) and regularly make significant capital expenditures in the normal course of business. BHE and BNSF forecast capital expenditures of approximately $4.7 billion over the remainder of 2026.
Contractual Obligations
We are party to other contracts associated with ongoing business activities, which will result in cash payments to counterparties in future periods. Certain obligations are included in our Consolidated Balance Sheets, such as borrowings, operating lease liabilities and shared aircraft repurchase liabilities.
We are also obligated to pay claims arising from property and casualty contracts issued by our insurance subsidiaries, including amounts from retroactive reinsurance. However, the timing and amount of the payments under insurance and reinsurance contracts are contingent upon the outcome of future events. Actual payments will likely vary, perhaps materially, from any forecasted payments, as well as from the liabilities recorded in our Consolidated Balance Sheets. We anticipate that these payments will be funded by cash flows from operating activities.
Other obligations pertaining to the acquisition of goods or services in the future, such as certain purchase obligations, are not currently reflected in the Consolidated Financial Statements and will be recognized in future periods as the goods are delivered or services are provided. Except as otherwise disclosed in this Quarterly Report, our contractual obligations as of September 30, 2026 were, in the aggregate, not materially different from those disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in Berkshire’s Annual Report on Form 10-K for the year ended December 31, 2025.
Critical Accounting Estimates
Certain accounting policies require us to make estimates and judgments in determining the amounts reflected in our Consolidated Financial Statements. Such estimates and judgments necessarily involve varying and possibly significant degrees of uncertainty. Accordingly, certain amounts currently recorded in our Consolidated Financial Statements will likely be adjusted in the future based on new available information and changes in other facts and circumstances. Reference is made to “Critical Accounting Estimates” discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Berkshire’s Annual Report on Form 10-K for the year ended December 31, 2025.
Our Consolidated Balance Sheet as of September 30, 2026 included estimated liabilities for unpaid losses and loss adjustment expenses from property and casualty insurance and reinsurance contracts of $152.3 billion. Due to the inherent uncertainties in the processes of establishing these liabilities, the actual ultimate claim amounts will likely differ from the currently recorded amounts. A small percentage change in estimates of this magnitude can result in a material effect on periodic earnings. The effects from changes in these estimates are recorded as a component of insurance losses and loss adjustment expenses in the period of the change.
49
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Critical Accounting Estimates
Our Consolidated Balance Sheet as of September 30, 2026 included goodwill of acquired businesses of $83.4 billion and indefinite-lived intangible assets of $19.0 billion. In connection with the annual goodwill impairment review conducted in the fourth quarter of 2025, our estimated fair values of four reporting units did not exceed our carrying values by at least 20%, as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025. Our estimated aggregate fair value of these units at that time was approximately $27.7 billion, which exceeded our aggregate carrying value of approximately $26.2 billion. Goodwill of these reporting units totaled approximately $9.2 billion.
Goodwill and indefinite-lived intangible asset impairment reviews include determining the estimated fair values of the reporting units and of the indefinite-lived intangible assets. Several methods and inputs may be used to estimate fair values, and significant judgments are required in making such estimates. Due to the inherent subjectivity and uncertainty in forecasting future cash flows and earnings over long periods of time, actual results may differ materially from the forecasts.
As of September 30, 2026, we concluded that more likely than not, the goodwill and other indefinite-lived intangible assets recorded in our Consolidated Balance Sheet were not impaired. However, the fair value estimates of the reporting units and assets are subject to change based on market and economic conditions, as well as events affecting our businesses or the industries in which they operate, which we cannot reliably predict. It is reasonably possible that adverse changes in such conditions or events could result in the recognition of impairment losses in our Consolidated Financial Statements in the future.
Information concerning accounting pronouncements to be adopted in the future is included in Note 1 to the accompanying Consolidated Financial Statements.
Forward-Looking Statements
Investors are cautioned that certain statements contained in this document as well as some statements in periodic press releases and some oral statements of Berkshire officials during presentations about Berkshire or its subsidiaries are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”). Forward-looking statements include statements which are predictive in nature, which depend upon or refer to future events or conditions, or which include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates” or similar expressions. In addition, any statements concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies or prospects and possible future Berkshire actions, which may be provided by management, are also forward-looking statements as defined by the Act. Forward-looking statements are based on current expectations and projections about future events and are subject to risks, uncertainties and assumptions about Berkshire and its subsidiaries, economic and market factors and the industries in which we do business, among other things. These statements are not guarantees of future performance and we have no specific intention to update these statements.
Actual events and results may differ materially from those expressed or forecasted in forward-looking statements due to a number of factors. The principal risk factors that could cause our actual performance and future events and actions to differ materially from such forward-looking statements include, but are not limited to, changes in market prices of our investments in equity securities; the occurrence of one or more catastrophic events, such as an earthquake, hurricane, geopolitical conflict, act of terrorism or cyber-attack that causes losses insured by our insurance subsidiaries and/or losses to our business operations; the frequency and severity of epidemics, pandemics or other outbreaks, and other events that negatively affect our operating results and restrict our access to borrowed funds through the capital markets at reasonable rates; changes in laws or regulations affecting our insurance, railroad, utilities and energy and finance subsidiaries; changes in federal income tax laws; and changes in general economic and market factors that affect the prices of securities or the industries in which we do business.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Reference is made to Berkshire’s Annual Report on Form 10-K for the year ended December 31, 2025 and the “Market Risk Disclosures” included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” As of September 30, 2026, there were no material changes in the market risks described in Berkshire’s Annual Report.
Item 4. Controls and Procedures
As of the end of the period covered by this Quarterly Report on Form 10-Q, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and the Senior Vice President (Chief Financial Officer), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, the Chief Executive Officer and the Senior Vice President (Chief Financial Officer) concluded that the Company’s disclosure controls and procedures are effective in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company’s periodic SEC filings. During the quarter, there have been no significant changes in the Company’s internal control over financial reporting or in other factors that could significantly affect internal control over financial reporting.
50
Part II Other Information
Item 1. Legal Proceedings
Berkshire and its subsidiaries are parties in a variety of legal actions that routinely arise out of the normal course of business, including legal actions seeking to establish liability directly through insurance contracts or indirectly through reinsurance contracts issued by Berkshire subsidiaries. Plaintiffs occasionally seek punitive or exemplary damages. We do not believe that such normal and routine litigation will have a material effect on our financial condition or results of operations.
Reference is made to Note 22 to the accompanying Consolidated Financial Statements for information concerning certain litigation involving Berkshire subsidiaries. Berkshire and certain of its subsidiaries are also involved in other kinds of legal actions, some of which assert or may assert claims or seek to impose fines and penalties. We currently believe that any liability that may arise from other pending legal actions will not have a material effect on our consolidated financial condition or results of operations.
Item 1A. Risk Factors
Our significant business risks are described in Item 1A to Form 10-K for the year ended December 31, 2025, to which reference is made herein. The risks and uncertainties we describe are not the only ones facing us. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business or operations. Any adverse effect on our business, financial condition or operating results could result in a decline in the value of our securities and the loss of all or part of your investment.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds and Issuer Repurchases of Equity Securities
Berkshire’s common stock repurchase program currently permits Berkshire to repurchase its Class A and Class B shares any time that Berkshire’s Chief Executive Officer, after consultation with the Chairman of the Board, believes that the repurchase price is below Berkshire’s intrinsic value, conservatively determined. Repurchases may be in the open market or through privately negotiated transactions. Berkshire’s common stock repurchases during the third quarter of 2026 are summarized as follows.
Period |
Total number of |
|
Average price |
|
Total number of |
|
Maximum number or |
|||
July |
|
|
|
|
|
|
|
|||
Class A common stock |
|
2,465 |
|
$ |
745,578.23 |
|
|
2,465 |
|
* |
Class B common stock |
|
3,131,323 |
|
|
496.24 |
|
|
3,131,323 |
|
* |
August |
|
|
|
|
|
|
|
|||
Class A common stock |
|
88 |
|
|
755,245.63 |
|
|
88 |
|
* |
Class B common stock |
|
1,548,314 |
|
|
503.99 |
|
|
1,548,314 |
|
* |
September |
|
|
|
|
|
|
|
|||
Class A common stock |
|
1,983 |
|
|
758,332.88 |
|
|
1,983 |
|
* |
Class B common stock |
|
7,705,322 |
|
|
506.64 |
|
|
7,705,322 |
|
* |
——————
* The program does not specify a maximum number of shares to be repurchased or obligate Berkshire to repurchase any specific dollar amount or number of Class A or Class B shares and there is no expiration date to the repurchase program. Berkshire will not repurchase its common stock if the repurchases reduce the value of Berkshire’s consolidated cash, cash equivalents and U.S. Treasury Bills holdings to less than $30 billion.
Item 3. Defaults Upon Senior Securities
None
51
Item 4. Mine Safety Disclosures
Information regarding the Company’s mine safety violations and other legal matters disclosed in accordance with Section 1503(a) of the Dodd-Frank Reform Act is included in Exhibit 95 to this Form 10-Q.
Item 5. Other Information
Berkshire has not adopted a Rule 10b5-1 trading arrangement (as defined in Item 408(a)(1)(i) of Regulation S-K) and no directors or executive officers
Item 6. Exhibits
|
a. Exhibits |
|
|
3(i) |
Restated Certificate of Incorporation Incorporated by reference to Exhibit 3(i) to Form 10-K filed on March 2, 2015. |
|
|
3(ii) |
Amended and Restated By-Laws Incorporated by reference to Exhibit 3(ii) to Form 8-K filed on May 7, 2026. |
|
|
31.1 |
Rule 13a-14(a)/15d-14(a) Certifications |
|
|
31.2 |
Rule 13a-14(a)/15d-14(a) Certifications |
|
|
32.1 |
Section 1350 Certifications |
|
|
32.2 |
Section 1350 Certifications |
|
|
95 |
Mine Safety Disclosures |
|
|
101 |
The following financial information from Berkshire Hathaway Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2026, formatted in iXBRL (Inline Extensible Business Reporting Language) includes: (i) the Cover Page, (ii) the Consolidated Balance Sheets, (iii) the Consolidated Statements of Earnings, (iv) the Consolidated Statements of Comprehensive Income, (v) the Consolidated Statements of Changes in Shareholders’ Equity, (vi) the Consolidated Statements of Cash Flows, and (vii) the Notes to Consolidated Financial Statements, tagged in summary and detail. |
|
|
104 |
Cover Page Interactive Data File (formatted as iXBRL and contained in Exhibit 101) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
BERKSHIRE HATHAWAY INC. |
|
|
(Registrant) |
|
|
|
Date: November 7, 2026 |
|
/S/ CHARLES C. CHANG |
|
|
(Signature) |
|
|
Charles C. Chang, |
|
|
Senior Vice President and |
|
|
Principal Financial Officer |
52