BERKSHIRE HATHAWAY INC.

2021
ANNUAL REPORTBERKSHIRE HATHAWAY INC.
2021 ANNUAL REPORTTABLE OF CONTENTS

Berkshire’s Performance vs. the S&P 500 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

Chairman’s Letter* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3-12Form 10-K –Business Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Description of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Management’s Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Management’s Report on Internal Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Independent Auditor’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

K-1
K-24
K-27
K-32
K-66
K-67
K-70
K-75

Appendices –Annual Meeting Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A-1
Greg Abel Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A-3
Property/Casualty Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A-5
Operating Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A-6
Stock Transfer Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A-7
Directors and Officers of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inside. . . Back Cover*Copyright© 2022 By Warren E. Buffett
All Rights Reserved1Berkshire’s Performance vs. the S&P 500
Annual Percentage ChangeYear1965 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1966 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1967 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1968 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1969 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1970 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1971 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1972 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1973 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1974 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1975 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1976 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1977 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1978 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1979 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1980 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1981 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1982 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1983 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1984 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1985 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1986 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1987 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1988 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1989 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1990 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1991 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Compounded Annual Gain – 1965-2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Overall Gain – 1964-2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

in Per-Share
Market Value ofBerkshire
49.5
(3.4)
13.3
77.8
19.4
(4.6)
80.5
8.1
(2.5)
(48.7)
2.5
129.3
46.8
14.5
102.5
32.8
31.8
38.4
69.0
(2.7)
93.7
14.2
4.6
59.3
84.6
(23.1)
35.6
29.8
38.9
25.0
57.4
6.2
34.9
52.2
(19.9)
26.6
6.5
(3.8)
15.8
4.3
0.8
24.1
28.7
(31.8)
2.7
21.4
(4.7)
16.8
32.7
27.0
(12.5)
23.4
21.9
2.8
11.0
2.4
29.6
20.1%
3,641,613%

Note: Data are for calendar years with these exceptions: 1965 and 1966, year ended 9/30; 1967, 15 months ended 12/31.

2in S&P 500
with Dividends
Included
10.0(11.7)
30.9
11.0
(8.4)
3.9
14.6
18.9
(14.8)(26.4)
37.2
23.6
(7.4)
6.4
18.2
32.3
(5.0)
21.4
22.4
6.1
31.6
18.6
5.1
16.6
31.7
(3.1)
30.5
7.6
10.1
1.3
37.6
23.0
33.4
28.6
21.0
(9.1)
(11.9)(22.1)
28.7
10.9
4.9
15.8
5.5
(37.0)
26.5
15.1
2.1
16.0
32.4
13.7
1.4
12.0
21.8
(4.4)
31.5
18.4
28.7
10.5%
30,209%BERKSHIRE HATHAWAY INC.

To the Shareholders of Berkshire Hathaway Inc.:
Charlie Munger, my long-time partner, and I have the job of managing a portion of your savings. We arehonored by your trust.
Our position carries with it the responsibility to report to you what we would like to know if we were theabsentee owner and you were the manager. We enjoy communicating directly with you through this annual letter, andthrough the annual meeting as well.
Our policy is to treat all shareholders equally. Therefore, we do not hold discussions with analysts nor large
institutions. Whenever possible, also, we release important communications on Saturday mornings in order tomaximize the time for shareholders and the media to absorb the news before markets open on Monday.
A wealth of Berkshire facts and figures are set forth in the annual 10-K that the company regularly files with
the S.E.C. and that we reproduce on pages K-1 – K-119. Some shareholders will find this detail engrossing; others
will simply prefer to learn what Charlie and I believe is new or interesting at Berkshire.
Alas, there was little action of that sort in 2021. We did, though, make reasonable progress in increasing the
intrinsic value of your shares. That task has been my primary duty for 57 years. And it will continue to be.
What You Own
Berkshire owns a wide variety of businesses, some in their entirety, some only in part. The second grouplargely consists of marketable common stocks of major American companies. Additionally, we own a few non-U.S.
equities and participate in several joint ventures or other collaborative activities.
Whatever our form of ownership, our goal is to have meaningful investments in businesses with both durable
economic advantages and a first-class CEO. Please note particularly that we own stocks based upon our expectations
about their long-term business performance and not because we view them as vehicles for timely market moves. That
point is crucial: Charlie and I are not stock-pickers; we are business-pickers.
I make many mistakes. Consequently, our extensive collection of businesses includes some enterprises thathave truly extraordinary economics, many others that enjoy good economic characteristics, and a few that are
marginal. One advantage of our common-stock segment is that – on occasion – it becomes easy to buy pieces ofwonderful businesses at wonderful prices. That shooting-fish-in-a-barrel experience is very rare in negotiatedtransactions and never occurs en masse. It is also far easier to exit from a mistake when it has been made in themarketable arena.

3

Surprise, Surprise
Here are a few items about your company that often surprise even seasoned investors:•

Many people perceive Berkshire as a large and somewhat strange collection of financial assets. In truth,
Berkshire owns and operates more U.S.-based “infrastructure” assets – classified on our balance sheet as
property, plant and equipment – than are owned and operated by any other American corporation. That
supremacy has never been our goal. It has, however, become a fact.
At yearend, those domestic infrastructure assets were carried on Berkshire’s balance sheet at $158 billion.
That number increased last year and will continue to increase. Berkshire always will be building.

•Every year, your company makes substantial federal income tax payments. In 2021, for example, we paid
$3.3 billion while the U.S. Treasury reported total corporate income-tax receipts of $402 billion.
Additionally, Berkshire pays substantial state and foreign taxes. “I gave at the office” is an unassailable
assertion when made by Berkshire shareholders.
Berkshire’s history vividly illustrates the invisible and often unrecognized financial partnership between
government and American businesses. Our tale begins early in 1955, when Berkshire Fine Spinning and
Hathaway Manufacturing agreed to merge their businesses. In their requests for shareholder approval, these
venerable New England textile companies expressed high hopes for the combination.
The Hathaway solicitation, for example, assured its shareholders that “The combination of the resources andmanagements will result in one of the strongest and most efficient organizations in the textile industry.” That
upbeat view was endorsed by the company’s advisor, Lehman Brothers (yes, that Lehman Brothers).
I’m sure it was a joyous day in both Fall River (Berkshire) and New Bedford (Hathaway) when the union
was consummated. After the bands stopped playing and the bankers went home, however, the shareholders
reaped a disaster.
In the nine years following the merger, Berkshire’s owners watched the company’s net worth crater from$51.4 million to $22.1 million. In part, this decline was caused by stock repurchases, ill-advised dividends
and plant shutdowns. But nine years of effort by many thousands of employees delivered an operating loss
as well. Berkshire’s struggles were not unusual: The New England textile industry had silently entered an
extended and non-reversible death march.
During the nine post-merger years, the U.S. Treasury suffered as well from Berkshire’s troubles. All told, thecompany paid the government only $337,359 in income tax during that period – a pathetic $100 per day.
Early in 1965, things changed. Berkshire installed new management that redeployed available cash andsteered essentially all earnings into a variety of good businesses, most of which remained good through theyears. Coupling reinvestment of earnings with the power of compounding worked its magic, and shareholders
prospered.
Berkshire’s owners, it should be noted, were not the only beneficiary of that course correction. Their “silent
partner,” the U.S. Treasury, proceeded to collect many tens of billions of dollars from the company in income
tax payments. Remember the $100 daily? Now, Berkshire pays roughly $9 million daily to the Treasury.

4

In fairness to our governmental partner, our shareholders should acknowledge – indeed trumpet – the factthat Berkshire’s prosperity has been fostered mightily because the company has operated in America. Our
country would have done splendidly in the years since 1965 without Berkshire. Absent our American home,
however, Berkshire would never have come close to becoming what it is today. When you see the flag, say
thanks.
•From an $8.6 million purchase of National Indemnity in 1967, Berkshire has become the world leader ininsurance “float” – money we hold and can invest but that does not belong to us. Including a relatively small
sum derived from life insurance, Berkshire’s total float has grown from $19 million when we entered theinsurance business to $147 billion.
So far, this float has cost us less than nothing. Though we have experienced a number of years when insurance
losses combined with operating expenses exceeded premiums, overall we have earned a modest 55-year
profit from the underwriting activities that generated our float.
Of equal importance, float is very sticky. Funds attributable to our insurance operations come and go daily,
but their aggregate total is immune from precipitous decline. When it comes to investing float, we cantherefore think long-term.
If you are not already familiar with the concept of float, I refer you to a long explanation on page A-5. To
my surprise, our float increased $9 billion last year, a buildup of value that is important to Berkshire owners
though is not reflected in our GAAP (“generally-accepted accounting principles”) presentation of earnings
and net worth.
Much of our huge value creation in insurance is attributable to Berkshire’s good luck in my 1986 hiring of
Ajit Jain. We first met on a Saturday morning, and I quickly asked Ajit what his insurance experience had
been. He replied, “None.”
I said, “Nobody’s perfect,” and hired him. That was my lucky day: Ajit actually was as perfect a choice as
could have been made. Better yet, he continues to be – 35 years later.
One final thought about insurance: I believe that it is likely – but far from assured – that Berkshire’s float
can be maintained without our incurring a long-term underwriting loss. I am certain, however, that there will
be some years when we experience such losses, perhaps involving very large sums.
Berkshire is constructed to handle catastrophic events as no other insurer – and that priority will remain longafter Charlie and I are gone.

Our Four Giants
Through Berkshire, our shareholders own many dozens of businesses. Some of these, in turn, have acollection of subsidiaries of their own. For example, Marmon has more than 100 individual business operations,
ranging from the leasing of railroad cars to the manufacture of medical devices.
•

Nevertheless, operations of our “Big Four” companies account for a very large chunk of Berkshire’s value.
Leading this list is our cluster of insurers. Berkshire effectively owns 100% of this group, whose massive
float value we earlier described. The invested assets of these insurers are further enlarged by the extraordinary
amount of capital we invest to back up their promises.

5

The insurance business is made to order for Berkshire. The product will never be obsolete, and sales volume
will generally increase along with both economic growth and inflation. Also, integrity and capital will forever
be important. Our company can and will behave well.
There are, of course, other insurers with excellent business models and prospects. Replication of Berkshire’s
operation, however, would be almost impossible.
•

Apple – our runner-up Giant as measured by its yearend market value – is a different sort of holding. Here,our ownership is a mere 5.55%, up from 5.39% a year earlier. That increase sounds like small potatoes. But
consider that each 0.1% of Apple’s 2021 earnings amounted to $100 million. We spent no Berkshire funds
to gain our accretion. Apple’s repurchases did the job.
It’s important to understand that only dividends from Apple are counted in the GAAP earnings Berkshire
reports – and last year, Apple paid us $785 million of those. Yet our “share” of Apple’s earnings amounted
to a staggering $5.6 billion. Much of what the company retained was used to repurchase Apple shares, an act
we applaud. Tim Cook, Apple’s brilliant CEO, quite properly regards users of Apple products as his firstlove, but all of his other constituencies benefit from Tim’s managerial touch as well.

•

BNSF, our third Giant, continues to be the number one artery of American commerce, which makes it anindispensable asset for America as well as for Berkshire. If the many essential products BNSF carries wereinstead hauled by truck, America’s carbon emissions would soar.
Your railroad had record earnings of $6 billion in 2021. Here, it should be noted, we are talking about theold-fashioned sort of earnings that we favor: a figure calculated after interest, taxes, depreciation,amortization and all forms of compensation. (Our definition suggests a warning: Deceptive “adjustments” toearnings – to use a polite description – have become both more frequent and more fanciful as stocks haverisen. Speaking less politely, I would say that bull markets breed bloviated bull . . ..)BNSF trains traveled 143 million miles last year and carried 535 million tons of cargo. Both accomplishments
far exceed those of any other American carrier. You can be proud of your railroad.

•

BHE, our final Giant, earned a record $4 billion in 2021. That’s up more than 30-fold from the $122 million
earned in 2000, the year that Berkshire first purchased a BHE stake. Now, Berkshire owns 91.1% of thecompany.
BHE’s record of societal accomplishment is as remarkable as its financial performance. The company had
no wind or solar generation in 2000. It was then regarded simply as a relatively new and minor participant in
the huge electric utility industry. Subsequently, under David Sokol’s and Greg Abel’s leadership, BHE has
become a utility powerhouse (no groaning, please) and a leading force in wind, solar and transmission
throughout much of the United States.
Greg’s report on these accomplishments appears on pages A-3 and A-4. The profile you will find there is notin any way one of those currently-fashionable “green-washing” stories. BHE has been faithfully detailing its
plans and performance in renewables and transmissions every year since 2007.
To further review this information, visit BHE’s website at brkenergy.com. There, you will see that thecompany has long been making climate-conscious moves that soak up all of its earnings. More opportunities
lie ahead. BHE has the management, the experience, the capital and the appetite for the huge power projects
that our country needs.

6Investments
Now let’s talk about companies we don’t control, a list that again references Apple. Below we list our fifteen
largest equity holdings, several of which are selections of Berkshire’s two long-time investment managers, Todd
Combs and Ted Weschler. At yearend, this valued pair had total authority in respect to $34 billion of investments,
many of which do not meet the threshold value we use in the table. Also, a significant portion of the dollars that Todd
and Ted manage are lodged in various pension plans of Berkshire-owned businesses, with the assets of these plans notincluded in this table.
12/31/21
Percentage ofCompany
Owned

SharesCompany

151,610,700
907,559,761
1,032,852,006
66,835,615
225,000,000
3,828,941
38,245,036
400,000,000
52,975,000
89,241,000
81,714,800
93,776,200
24,669,778
143,456,055
158,824,575

American Express Company . . . . . . . . . . . . . . . . . . . .
Apple Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bank of America Corp. . . . . . . . . . . . . . . . . . . . . . . . .
The Bank of New York Mellon Corp. . . . . . . . . . . . .
BYD Co. Ltd.**. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charter Communications, Inc. . . . . . . . . . . . . . . . . . .
Chevron Corporation . . . . . . . . . . . . . . . . . . . . . . . . . .
The Coca-Cola Company . . . . . . . . . . . . . . . . . . . . . .
General Motors Company . . . . . . . . . . . . . . . . . . . . . .
ITOCHU Corporation . . . . . . . . . . . . . . . . . . . . . . . . .
Mitsubishi Corporation . . . . . . . . . . . . . . . . . . . . . . . .
Mitsui & Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Moody’s Corporation . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. Bancorp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Verizon Communications Inc. . . . . . . . . . . . . . . . . . .
Others*** . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Equity Investments Carried at Market . . . . . . . .

*
**
***

19.9
5.6
12.8
8.3
7.7
2.2
2.0
9.2
3.6
5.6
5.5
5.7
13.3
9.7
3.8

Cost*
Market(in millions)
1,287
24,80431,089161,155
14,63145,952
2,918
3,882
232
7,693
643
2,496
3,420
4,488
1,299
23,684
1,616
3,106
2,099
2,728
2,102
2,593
1,621
2,219
248
9,636
5,384
8,058
9,387
8,253
26,62939,972$ 104,605$ 350,719

This is our actual purchase price and also our tax basis.
Held by BHE; consequently, Berkshire shareholders have only a 91.1% interest in this position.
Includes a $10 billion investment in Occidental Petroleum, consisting of preferred stock and warrants tobuy common stock, a combination now being valued at $10.7 billion.

In addition to the footnoted Occidental holding and our various common-stock positions, Berkshire also owns
a 26.6% interest in Kraft Heinz (accounted for on the “equity” method, not market value, and carried at $13.1 billion)
and 38.6% of Pilot Corp., a leader in travel centers that had revenues last year of $45 billion.
Since we purchased our Pilot stake in 2017, this holding has warranted “equity” accounting treatment. Earlyin 2023, Berkshire will purchase an additional interest in Pilot that will raise our ownership to 80% and lead to ourfully consolidating Pilot’s earnings, assets and liabilities in our financial statements.

7

U.S. Treasury Bills
Berkshire’s balance sheet includes $144 billion of cash and cash equivalents (excluding the holdings of
BNSF and BHE). Of this sum, $120 billion is held in U.S. Treasury bills, all maturing in less than a year. That stakeleaves Berkshire financing about 1⁄ 2 of 1% of the publicly-held national debt.
Charlie and I have pledged that Berkshire (along with our subsidiaries other than BNSF and BHE) will always
hold more than $30 billion of cash and equivalents. We want your company to be financially impregnable and neverdependent on the kindness of strangers (or even that of friends). Both of us like to sleep soundly, and we want ourcreditors, insurance claimants and you to do so as well.
But $144 billion?
That imposing sum, I assure you, is not some deranged expression of patriotism. Nor have Charlie and I lost
our overwhelming preference for business ownership. Indeed, I first manifested my enthusiasm for that 80 years ago,on March 11, 1942, when I purchased three shares of Cities Services preferred stock. Their cost was $114.75 andrequired all of my savings. (The Dow Jones Industrial Average that day closed at 99, a fact that should scream to you:
Never bet against America.)
After my initial plunge, I always kept at least 80% of my net worth in equities. My favored status throughoutthat period was 100% – and still is. Berkshire’s current 80%-or-so position in businesses is a consequence of myfailure to find entire companies or small portions thereof (that is, marketable stocks) which meet our criteria for longterm holding.
Charlie and I have endured similar cash-heavy positions from time to time in the past. These periods arenever pleasant; they are also never permanent. And, fortunately, we have had a mildly attractive alternative during2020 and 2021 for deploying capital. Read on.
Share Repurchases
There are three ways that we can increase the value of your investment. The first is always front and centerin our minds: Increase the long-term earning power of Berkshire’s controlled businesses through internal growth orby making acquisitions. Today, internal opportunities deliver far better returns than acquisitions. The size of thoseopportunities, however, is small compared to Berkshire’s resources.
Our second choice is to buy non-controlling part-interests in the many good or great businesses that are
publicly traded. From time to time, such possibilities are both numerous and blatantly attractive. Today, though, wefind little that excites us.
That’s largely because of a truism: Long-term interest rates that are low push the prices of all productive
investments upward, whether these are stocks, apartments, farms, oil wells, whatever. Other factors influencevaluations as well, but interest rates will always be important.
Our final path to value creation is to repurchase Berkshire shares. Through that simple act, we increase yourshare of the many controlled and non-controlled businesses Berkshire owns. When the price/value equation is right,
this path is the easiest and most certain way for us to increase your wealth. (Alongside the accretion of value tocontinuing shareholders, a couple of other parties gain: Repurchases are modestly beneficial to the seller of the
repurchased shares and to society as well.)8Periodically, as alternative paths become unattractive, repurchases make good sense for Berkshire’s owners.
During the past two years, we therefore repurchased 9% of the shares that were outstanding at yearend 2019 for a total
cost of $51.7 billion. That expenditure left our continuing shareholders owning about 10% more of all Berkshirebusinesses, whether these are wholly-owned (such as BNSF and GEICO) or partly-owned (such as Coca-Cola andMoody’s).
I want to underscore that for Berkshire repurchases to make sense, our shares must offer appropriate value.
We don’t want to overpay for the shares of other companies, and it would be value-destroying if we were to overpay
when we are buying Berkshire. As of February 23, 2022, since yearend we repurchased additional shares at a cost of$1.2 billion. Our appetite remains large but will always remain price-dependent.
It should be noted that Berkshire’s buyback opportunities are limited because of its high-class investor base.
If our shares were heavily held by short-term speculators, both price volatility and transaction volumes would
materially increase. That kind of reshaping would offer us far greater opportunities for creating value by making
repurchases. Nevertheless, Charlie and I far prefer the owners we have, even though their admirable buy-and-keep
attitudes limit the extent to which long-term shareholders can profit from opportunistic repurchases.
Finally, one easily-overlooked value calculation specific to Berkshire: As we’ve discussed, insurance “float”
of the right sort is of great value to us. As it happens, repurchases automatically increase the amount of “float” pershare. That figure has increased during the past two years by 25% – going from $79,387 per “A” share to $99,497, ameaningful gain that, as noted, owes some thanks to repurchases.
A Wonderful Man and a Wonderful Business
Last year, Paul Andrews died. Paul was the founder and CEO of TTI, a Fort Worth-based subsidiary ofBerkshire. Throughout his life – in both his business and his personal pursuits – Paul quietly displayed all the qualities
that Charlie and I admire. His story should be told.
In 1971, Paul was working as a purchasing agent for General Dynamics when the roof fell in. After losing ahuge defense contract, the company fired thousands of employees, including Paul.
With his first child due soon, Paul decided to bet on himself, using $500 of his savings to found Tex-Tronics(later renamed TTI). The company set itself up to distribute small electronic components, and first-year sales totaled$112,000. Today, TTI markets more than one million different items with annual volume of $7.7 billion.
But back to 2006: Paul, at 63, then found himself happy with his family, his job, and his associates. But hehad one nagging worry, heightened because he had recently witnessed a friend’s early death and the disastrous resultsthat followed for that man’s family and business. What, Paul asked himself in 2006, would happen to the many people
depending on him if he should unexpectedly die?
For a year, Paul wrestled with his options. Sell to a competitor? From a strictly economic viewpoint, thatcourse made the most sense. After all, competitors could envision lucrative “synergies” – savings that would beachieved as the acquiror slashed duplicated functions at TTI.
But . . . Such a purchaser would most certainly also retain its CFO, its legal counsel, its HR unit. Their TTI
counterparts would therefore be sent packing. And ugh! If a new distribution center were to be needed, the acquirer’s
home city would certainly be favored over Fort Worth.

9Whatever the financial benefits, Paul quickly concluded that selling to a competitor was not for him. He next
considered seeking a financial buyer, a species once labeled – aptly so – a leveraged buyout firm. Paul knew, however,that such a purchaser would be focused on an “exit strategy.” And who could know what that would be? Brooding
over it all, Paul found himself having no interest in handing his 35-year-old creation over to a reseller.
When Paul met me, he explained why he had eliminated these two alternatives as buyers. He then summed
up his dilemma by saying – in far more tactful phrasing than this – “After a year of pondering the alternatives, I want
to sell to Berkshire because you are the only guy left.” So, I made an offer and Paul said “Yes.” One meeting; one
lunch; one deal.
To say we both lived happily ever after is an understatement. When Berkshire purchased TTI, the company
employed 2,387. Now the number is 8,043. A large percentage of that growth took place in Fort Worth and environs.
Earnings have increased 673%.
Annually, I would call Paul and tell him his salary should be substantially increased. Annually, he would tellme, “We can talk about that next year, Warren; I’m too busy now.”
When Greg Abel and I attended Paul’s memorial service, we met children, grandchildren, long-time
associates (including TTI’s first employee) and John Roach, the former CEO of a Fort Worth company Berkshire hadpurchased in 2000. John had steered his friend Paul to Omaha, instinctively knowing we would be a match.
At the service, Greg and I heard about the multitudes of people and organizations that Paul had silently
supported. The breadth of his generosity was extraordinary – geared always to improving the lives of others,
particularly those in Fort Worth.
In all ways, Paul was a class act.
************
Good luck – occasionally extraordinary luck – has played its part at Berkshire. If Paul and I had not enjoyeda mutual friend – John Roach – TTI would not have found its home with us. But that ample serving of luck was only
the beginning. TTI was soon to lead Berkshire to its most important acquisition.
Every fall, Berkshire directors gather for a presentation by a few of our executives. We sometimes choose
the site based upon the location of a recent acquisition, by that means allowing directors to meet the new subsidiary’s
CEO and learn more about the acquiree’s activities.
In the fall of 2009, we consequently selected Fort Worth so that we could visit TTI. At that time, BNSF,
which also had Fort Worth as its hometown, was the third-largest holding among our marketable equities. Despite thatlarge stake, I had never visited the railroad’s headquarters.
Deb Bosanek, my assistant, scheduled our board’s opening dinner for October 22. Meanwhile, I arranged toarrive earlier that day to meet with Matt Rose, CEO of BNSF, whose accomplishments I had long admired. When I
made the date, I had no idea that our get-together would coincide with BNSF’s third-quarter earnings report, which
was released late on the 22nd.
The market reacted badly to the railroad’s results. The Great Recession was in full force in the third quarter,and BNSF’s earnings reflected that slump. The economic outlook was also bleak, and Wall Street wasn’t feelingfriendly to railroads – or much else.

10

On the following day, I again got together with Matt and suggested that Berkshire would offer the railroad abetter long-term home than it could expect as a public company. I also told him the maximum price that Berkshire
would pay.
Matt relayed the offer to his directors and advisors. Eleven busy days later, Berkshire and BNSF announced
a firm deal. And here I’ll venture a rare prediction: BNSF will be a key asset for Berkshire and our country a century
from now.
The BNSF acquisition would never have happened if Paul Andrews hadn’t sized up Berkshire as the righthome for TTI.
ThanksI taught my first investing class 70 years ago. Since then, I have enjoyed working almost every year withstudents of all ages, finally “retiring” from that pursuit in 2018.
Along the way, my toughest audience was my grandson’s fifth-grade class. The 11-year-olds were squirmingin their seats and giving me blank stares until I mentioned Coca-Cola and its famous secret formula. Instantly, every
hand went up, and I learned that “secrets” are catnip to kids.
Teaching, like writing, has helped me develop and clarify my own thoughts. Charlie calls this phenomenon
the orangutan effect: If you sit down with an orangutan and carefully explain to it one of your cherished ideas, you
may leave behind a puzzled primate, but will yourself exit thinking more clearly.
Talking to university students is far superior. I have urged that they seek employment in (1) the field and (2)with the kind of people they would select, if they had no need for money. Economic realities, I acknowledge, mayinterfere with that kind of search. Even so, I urge the students never to give up the quest, for when they find that sortof job, they will no longer be “working.”
Charlie and I, ourselves, followed that liberating course after a few early stumbles. We both started as parttimers at my grandfather’s grocery store, Charlie in 1940 and I in 1942. We were each assigned boring tasks and paid
little, definitely not what we had in mind. Charlie later took up law, and I tried selling securities. Job satisfaction
continued to elude us.
Finally, at Berkshire, we found what we love to do. With very few exceptions, we have now “worked” formany decades with people whom we like and trust. It’s a joy in life to join with managers such as Paul Andrews or
the Berkshire families I told you about last year. In our home office, we employ decent and talented people – no jerks.
Turnover averages, perhaps, one person per year.
I would like, however, to emphasize a further item that turns our jobs into fun and satisfaction - - - - working
for you. There is nothing more rewarding to Charlie and me than enjoying the trust of individual long-term
shareholders who, for many decades, have joined us with the expectation that we would be a reliable custodian of theirfunds.
Obviously, we can’t select our owners, as we could do if our form of operation were a partnership. Anyone
can buy shares of Berkshire today with the intention of soon reselling them. For sure, we get a few of that type ofshareholder, just as we get index funds that own huge amounts of Berkshire simply because they are required to doso.

11

To a truly unusual degree, however, Berkshire has as owners a very large corps of individuals and families
that have elected to join us with an intent approaching “til death do us part.” Often, they have trusted us with a large– some might say excessive – portion of their savings.
Berkshire, these shareholders would sometimes acknowledge, might be far from the best selection they could
have made. But they would add that Berkshire would rank high among those with which they would be most
comfortable. And people who are comfortable with their investments will, on average, achieve better results than those
who are motivated by ever-changing headlines, chatter and promises.
Long-term individual owners are both the “partners” Charlie and I have always sought and the ones weconstantly have in mind as we make decisions at Berkshire. To them we say, “It feels good to ‘work’ for you, and you
have our thanks for your trust.”
The Annual Meeting
Clear your calendar! Berkshire will have its annual gathering of capitalists in Omaha on Friday, April 29th
through Sunday, May 1st. The details regarding the weekend are laid out on pages A-1 and A-2. Omaha eagerly awaits
you, as do I.
I will end this letter with a sales pitch. “Cousin” Jimmy Buffett has designed a pontoon “party” boat that is
now being manufactured by Forest River, a Berkshire subsidiary. The boat will be introduced on April 29 at ourBerkshire Bazaar of Bargains. And, for two days only, shareholders will be able to purchase Jimmy’s masterpiece at
a 10% discount. Your bargain-hunting chairman will be buying a boat for his family’s use. Join me.
February 26, 2022

Warren E. Buffett
Chairman of the Board

12

UNITED STATESSECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2021
OR
TRANSITIONREPORT
PURSUANTTOSECTION13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF☐
1934
For the transition period fromtoCommission file number 001-14905

BERKSHIRE HATHAWAY INC.
(Exact name of Registrant as specified in its charter)

Delaware47-0813844

State or other jurisdiction ofincorporation or organization(I.R.S. Employer
Identification No.)3555 Farnam Street, Omaha, Nebraska

68131(Address of principal executive office)(Zip Code)Registrant’s telephone number, including area code (402) 346-1400
Securities registered pursuant to Section 12(b) of the Act:

Title of each classClass A Common StockClass B Common Stock0.750% Senior Notes due 2023
1.125% Senior Notes due 2027
1.625% Senior Notes due 2035
1.300% Senior Notes due 2024
2.150% Senior Notes due 2028
0.625% Senior Notes due 2023
0.000% Senior Notes due 2025
2.375% Senior Notes due 2039
0.500% Senior Notes due 2041
2.625% Senior Notes due 2059

Trading Symbols
BRK.A
BRK.B
BRK23
BRK27
BRK35
BRK24
BRK28
BRK23A
BRK25
BRK39
BRK41
BRK59

Name of each exchange on which registered
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☑

No ☐

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑
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. Yes ☑ No ☐Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant toRule 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). Yes ☑ No ☐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. Large accelerated filer ☑ Accelerated filer ☐ Nonaccelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period forcomplying 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 has filed a report on and attestation to its management’s assessment of the effectiveness of its
internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public
accounting firm that prepared or issued its audit report. ☑
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑
State the aggregate market value of the voting stock held by non-affiliates of the Registrant as of June 30, 2021: $503,600,000,000*
Indicate the number of shares outstanding of each of the Registrant’s classes of common stock:
February 14, 2022—Class A common stock, $5 par value
615,333 shares
February 14, 2022—Class B common stock, $0.0033 par value
1,291,212,661 shares
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement for the Registrant’s Annual Meeting to be held April 30, 2022 are incorporated in Part III.
* This aggregate value is computed at the last sale price of the common stock as reported on the New York Stock Exchange on June 30,
2021. It does not include the value of Class A common stock and Class B common stock held by Directors and Executive Officers of
the Registrant and members of their immediate families, some of whom may not constitute “affiliates” for purpose of the Securities
Exchange Act of 1934.

Table of Contents
Page No.

Part I
Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.

Business Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . K-1.....
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . K-24......
Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . K-27......
Description of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . K-27......
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . K-29......
Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . K-30......
Part II

Item 5.
Item 6.
Item 7.
Item 7A.
Item 8.

Item 9.
Item 9A.
Item 9B.

Market for Registrant’s Common Equity, Related Security Holder Matters and Issuer
Purchases of Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . K-30......
[Reserved]
Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . K-32......
Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . K-66......
Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . K-67......
Consolidated Balance Sheets—
December 31, 2021 and December 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . K-70......
Consolidated Statements of Earnings—
Years Ended December 31, 2021, December 31, 2020, and December 31, 2019 . . . . . . . . . . . . . . . . . K-72........
Consolidated Statements of Comprehensive Income—Years Ended December 31, 2021, December 31, 2020, and December 31, 2019 . . . . . . . . . . . . . . . . . K-73........
Consolidated Statements of Changes in Shareholders’ Equity—
Years Ended December 31, 2021, December 31, 2020, and December 31, 2019 . . . . . . . . . . . . . . . . . K-73........
Consolidated Statements of Cash Flows—
Years Ended December 31, 2021, December 31, 2020, and December 31, 2019 . . . . . . . . . . . . . . . . . K-74........
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . K-75.......
......
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . . . . . K-113
Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . K-113.......
Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . K-113.......
Part III

Item 10.
Item 11.
Item 12.
Item 13.
Item 14.

.......
Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . K-113.......
Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . K-113
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder....
Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . K-113.......
Certain Relationships and Related Transactions and Director Independence . . . . . . . . . . . . . . . . . . . K-113.......
Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . K-113
Part IV

Item 15.

Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . K-113......

Exhibit Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . K-117......
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . K-119......

Part I
Item 1. Business Description
Berkshire Hathaway Inc. (“Berkshire,” “Company” or “Registrant”) is a holding company owning subsidiaries
engaged in numerous diverse business activities. The most important of these are insurance businesses conducted on both a
primary basis and a reinsurance basis, a freight rail transportation business and a group of utility and energy generation anddistribution businesses. Berkshire also owns and operates numerous other businesses engaged in a variety of manufacturing,
services, retailing and other activities. Berkshire is domiciled in the state of Delaware, and its corporate headquarters is in
Omaha, Nebraska.
Berkshire’s operating businesses are managed on an unusually decentralized basis. There are few centralized or
integrated business functions. Berkshire’s corporate senior management team participates in and is ultimately responsible forsignificant capital allocation decisions, investment activities and the selection of the Chief Executive to head each of theoperating businesses.
Berkshire’s senior management is also responsible for establishing and monitoring Berkshire’s corporate governancepractices, including monitoring governance efforts, including those at the operating businesses, and participating in the
resolution of governance-related issues as needed. Berkshire’s Board of Directors is responsible for assuring an appropriate
successor to the Chief Executive Officer. The Berkshire Code of Business Conduct and Ethics emphasizes, among otherthings, the commitment to ethics and compliance with the law and provides basic standards for ethical and legal behavior of
its employees.
Human capital and resources are an integral and essential component of Berkshire’s businesses. Berkshire and its
consolidated subsidiaries employed approximately 372,000 people worldwide at the end of 2021, of which approximately
77% were in the United States and 21% were represented by unions. Employees engage in a wide variety of occupations.
Consistent with Berkshire’s decentralized management philosophy, Berkshire’s operating businesses individually establish
specific policies and practices concerning the attraction and retention of personnel within the organizations. Given the wide
variations in the nature and size of business activities, policies and practices often vary widely among Berkshire’s operating
subsidiaries. Policies and practices commonly address, among other things: maintaining a safe work environment andminimizing or eliminating workplace injuries; offering competitive compensation to employees, which includes various
health insurance and retirement benefits, as well as other benefits such as incentives to recognize and reward performance;wellness programs; training, learning and career advancement opportunities; and hiring practices intended to identify
qualified candidates and promote diversity and inclusion in the workforce.
Insurance and Reinsurance Businesses
Berkshire’s insurance and reinsurance business activities are conducted through numerous domestic and foreign-based
insurance subsidiaries. Berkshire’s insurance subsidiaries provide insurance and reinsurance of property and casualty risks
and reinsurance of life and health risks worldwide. Berkshire’s insurance subsidiaries employed approximately 50,500 people
at the end of 2021. For purposes of this discussion, entities that provide insurance or reinsurance are referred to as insurers.
In direct or primary insurance activities, the insurer assumes the risk of loss from persons or organizations that are
directly subject to the risks. Such risks may relate to property, casualty (or liability), life, accident, health, financial or otherperils that may arise from an insurable event. In reinsurance activities, the insurer assumes defined portions of risks that otherdirect insurers or reinsurers assumed in their own insuring activities.
Reinsurance contracts are normally classified as treaty or facultative contracts. Treaty reinsurance refers to reinsurance
coverage for all or a portion of a specified group or class of risks ceded by a direct insurer or reinsurer, while facultativereinsurance involves coverage of specific individual underlying risks. Reinsurance contracts are further classified as quotashare or excess. Under quota-share (proportional or pro-rata) reinsurance, the reinsurer shares proportionally in the original
premiums and losses of the direct insurer or reinsurer. Excess (or non-proportional) reinsurance provides for theindemnification of the direct insurer or reinsurer for all or a portion of the loss in excess of an agreed upon amount or“retention.” Both quota-share and excess reinsurance contracts may provide for aggregate limits of indemnification.
Insurance and reinsurance are generally subject to regulatory oversight throughout the world. Except for regulatory
considerations, there are virtually no barriers to entry into the insurance and reinsurance industry. Competitors may bedomestic or foreign, as well as licensed or unlicensed. The number of competitors within the industry is not known. Insurers
compete on the basis of reliability, financial strength and stability, financial ratings, underwriting consistency, service,business ethics, price, performance, capacity, policy terms and coverage conditions.

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Insurers based in the United States (“U.S.”) are subject to regulation by their states of domicile and by those states inwhich they are licensed to write policies on an admitted basis. The primary focus of regulation is to assure that insurers arefinancially solvent and that policyholder interests are otherwise protected. States establish minimum capital levels for
insurance companies and establish guidelines for permissible business and investment activities. States have the authority tosuspend or revoke a company’s authority to do business as conditions warrant. States regulate the payment of dividends byinsurance companies to their shareholders and other transactions with affiliates. Dividends, capital distributions and othertransactions of extraordinary amounts are subject to prior regulatory approval.
Insurers may market, sell and service insurance policies in the states where they are licensed. These insurers arereferred to as admitted insurers. Admitted insurers are generally required to obtain regulatory approval of their policy forms
and premium rates. Non-admitted insurance markets have developed to provide insurance that is otherwise unavailable
through admitted insurers. Non-admitted insurance, often referred to as “excess and surplus” lines, is procured by either statelicensed surplus lines brokers who place risks with insurers not licensed in that state or by the insured party’s direct
procurement from non-admitted insurers. Non-admitted insurance is subject to considerably less regulation with respect topolicy rates and forms. Reinsurers are normally not required to obtain regulatory approval of premium rates or reinsurance
contracts.
The insurance regulators of every state participate in the National Association of Insurance Commissioners (“NAIC”).
The NAIC adopts forms, instructions and accounting procedures for use by U.S. insurers in preparing and filing annual
statutory financial statements. However, an insurer’s state of domicile has ultimate authority over these matters. In addition to
its activities relating to the annual statement, the NAIC develops or adopts statutory accounting principles, model laws,
regulations and programs for use by its members. Such matters deal with regulatory oversight of solvency, risk management,compliance with financial regulation standards and risk-based capital reporting requirements.
U.S. states, through the NAIC, and international insurance regulators through the International Association of
Insurance Supervisors (“IAIS”) have been developing standards and best practices focused on establishing a common set ofprinciples (“Insurance Core Principles”) and framework (“ComFrame”) for the regulation of large multi-national insurancegroups. The IAIS is developing capital standards for internationally active insurance groups (the “Insurance CapitalStandard”) based on a consolidated group approach and is also evaluating a potentially comparable group capital standard
based on the aggregation of regulated entities and their underlying local capital requirements (the “Aggregation Method”).
The IAIS standards address a variety of topics regarding supervision, coordination of regulators, insurance capital standards,
risk management and governance. While the IAIS standards do not have legal effect, the states and the NAIC are
implementing various group supervision regulatory tools and mandates that are responsive to certain IAIS standards. U.S.
state regulators have formed supervisory colleges intended to promote communication and cooperation amongst the various
domestic and international insurance regulators. The Nebraska Department of Insurance acts as the lead supervisor for ourgroup of insurance companies and chairs the Berkshire supervisory college. U.S. state regulators now require insurancegroups to file an annual report, the Own Risk Solvency Assessment or ORSA, with the group’s lead supervisor. The NAIC
recently adopted a group capital calculation based on methodology similar to the Aggregation Method, which leverages the
NAIC’s existing Risk Based Capital standards. The NAIC’s group capital calculation is a tool designed to help the leadsupervisor understand the capital adequacy across an insurance group. The NAIC is also developing further tools, including
various liquidity assessments, that will likely be imposed on insurance groups in the near future.
Berkshire’s insurance companies maintain capital strength at exceptionally high levels, which differentiates them fromtheir competitors. Collectively, the combined statutory surplus of Berkshire’s U.S.-based insurers was approximately $301
billion at December 31, 2021. Berkshire’s major insurance subsidiaries are rated AA+ by Standard & Poor’s and A++(superior) by A.M. Best with respect to their financial condition and claims paying ability.
The Terrorism Risk Insurance Act of 2002 established within the Department of the Treasury a Terrorism Insurance
Program (“Program”) for commercial property and casualty insurers by providing federal reinsurance of insured terrorism
losses. The Program currently extends to December 31, 2027 through other Acts, most recently the Terrorism Risk Insurance
Program Reauthorization Act of 2019. Hereinafter these Acts are collectively referred to as TRIA. Under TRIA, theDepartment of the Treasury is charged with certifying “acts of terrorism.” Coverage under TRIA occurs if the industry
insured loss for certified events occurring during the calendar year exceeds $200 million in any calendar year.
To be eligible for federal reinsurance, insurers must make available insurance coverage for acts of terrorism, by
providing policyholders with clear and conspicuous notice of the amount of premium that will be charged for this coverage
and of the federal share of any insured losses resulting from any act of terrorism. Assumed reinsurance is specifically
excluded from TRIA participation. TRIA currently also excludes certain forms of direct insurance (such as personal andcommercial auto, burglary, theft, surety and certain professional liability lines). Reinsurers are not required to offer terrorism
coverage and are not eligible for federal reinsurance of terrorism losses.

K-2

In the event of a certified act of terrorism, the federal government will reimburse insurers (conditioned on theirsatisfaction of policyholder notification requirements) for 80% of their insured losses in excess of an insurance group’s
deductible. Under the Program, the deductible is 20% of the aggregate direct subject earned premium for relevant commerciallines of business in the immediately preceding calendar year. The aggregate deductible in 2022 for Berkshire’s insurancegroup is expected to approximate $1.6 billion. There is also an aggregate program limit of $100 billion on the amount of thefederal government coverage for each TRIA year.
The extent of insurance regulation varies significantly among the countries in which our non-U.S. operations conductbusiness. While each country imposes licensing, solvency, auditing and financial reporting requirements, the type and extent
of the requirements differ substantially. For example:•

in some countries, insurers are required to prepare and file monthly and/or quarterly financial reports, andin others, only annual reports;•some regulators require intermediaries to be involved in the sale of insurance products, whereas otherregulators permit direct sales contact between the insurer and the customer;•

the extent of restrictions imposed upon an insurer’s use of local and offshore reinsurance vary;•

policy form filing and rate regulation vary by country;•

the frequency of contact and periodic on-site examinations by insurance authorities differ by country;•

the scope and prescriptive requirements of an insurer’s risk management and governance framework varysignificantly by country; and•regulatory requirements relating to insurer dividend policies vary by country.

Significant variations can also be found in the size, structure and resources of the local regulatory departments that oversee
insurance activities. Certain regulators prefer close relationships with all subject insurers and others operate a risk-based
approach.
Berkshire’s insurance group operates in some countries through subsidiaries and in some countries through branches ofsubsidiaries. Berkshire insurance subsidiaries are located in several countries, including Germany, the United Kingdom(“U.K.”), Ireland, Australia and South Africa, and also maintain branches in several other countries. Most of these foreign
jurisdictions impose local capital requirements. Other legal requirements include discretionary licensing procedures, local
retention of funds and records, and data privacy and protection program requirements. Berkshire’s international insurancecompanies are also subject to multinational application of certain U.S. laws.
There are various regulatory bodies and initiatives that impact Berkshire in multiple international jurisdictions and thepotential for significant effect on the Berkshire insurance group could be heightened as a result of recent industry andeconomic developments.
In 2016, the U.K. voted in a national referendum to withdraw from the European Union (“EU”) (“Brexit”), which
resulted in the U.K.’s withdrawal from the EU on January 31, 2020. In anticipation of the U.K. leaving the EU, Berkshire
Hathaway European Insurance DAC in Ireland was established to permit property and casualty insurance and reinsurance
businesses to continue to operate in the EU, and Berkshire continues to maintain a substantial presence in London following
Brexit.
Berkshire’s insurance underwriting operations include the following groups: (1) GEICO, (2) Berkshire Hathaway
Primary Group and (3) Berkshire Hathaway Reinsurance Group. Except for retroactive reinsurance and periodic payment
annuity products that generate significant amounts of up-front premiums along with estimated claims expected to be paid
over long time periods (creating “float,” see Investments section), Berkshire expects to achieve an underwriting profit overtime and to reject inadequately priced risks. Underwriting profit is defined as earned premiums less associated incurred
losses, loss adjustment expenses and underwriting and policy acquisition expenses. Underwriting profit does not include
income earned from investments. Additional information related to each of Berkshire’s underwriting groups follows.
GEICO—GEICO is headquartered in Chevy Chase, Maryland. GEICO’s insurance subsidiaries consist of Government
Employees Insurance Company, GEICO General Insurance Company, GEICO Indemnity Company, GEICO Casualty
Company, GEICO Advantage Insurance Company, GEICO Choice Insurance Company, GEICO Secure Insurance Company,
GEICO County Mutual Insurance Company, GEICO Texas County Mutual Insurance Company and GEICO Marine
Insurance Company. The GEICO companies primarily offer private passenger automobile insurance to individuals in all 50
states and the District of Columbia. GEICO also provides insurance for motorcycles, all-terrain vehicles, recreational
vehicles, boats and small commercial fleets and acts as an agent for other insurers who offer homeowners, renters, life andidentity management insurance to individuals who desire insurance coverages other than those offered by GEICO.
K-3

GEICO’s marketing is primarily through direct response methods in which applications for insurance are submitted
directly to the companies via the Internet or by telephone, and to a lesser extent, through captive agents. GEICO conducts
business through regional service centers and claims adjustment and other facilities in 39 states.
The automobile insurance business is highly competitive in the areas of price and service. GEICO competes for private
passenger automobile insurance customers in the preferred, standard and non-standard risk markets with other companies thatsell directly to the customer and with companies that use agency sales forces, including State Farm, Allstate, Progressive and
USAA. GEICO’s advertising campaigns and competitive rates contributed to a cumulative increase in voluntary policies-inforce of approximately 26.0% over the past five years. According to the most recently published A.M. Best data for 2020, thefive largest automobile insurers had a combined market share in 2020 of approximately 59.7% based on written premiums,
with GEICO’s market share being the second largest at approximately 13.5%. GEICO’s written premiums in 2020 werereduced by the effects of the GEICO Giveback Program implemented in response to significant reductions in claim
frequencies attributable to reduced policyholder driving during the initial stages of the COVID-19 pandemic. Pandemicrelated premium credit programs of other private passenger insurers may not have been reported as premium reductions,which impacts the industry data reported by A.M Best. Since the publication of that data, GEICO’s management estimates its
current market share is approximately 14.2%. Seasonal variations in GEICO’s insurance business are not significant.
However, extraordinary weather conditions or other factors may have a significant effect upon the frequency or severity of
automobile claims.
State insurance departments stringently regulate private passenger auto insurance. As a result, it is difficult for
insurance companies to differentiate their products. Competition for private passenger automobile insurance, which issubstantial, tends to focus on price and level of customer service provided. GEICO’s cost-efficient direct response marketing
methods and emphasis on customer satisfaction enable it to offer competitive rates and value to its customers. GEICO
primarily uses its own claims staff to manage and settle claims. The name and reputation of GEICO are material assets andmanagement protects those and other service marks through appropriate registrations.
Berkshire Hathaway Primary Group—The Berkshire Hathaway Primary Group (“BH Primary”) is a collection of
independently managed insurers that provide a wide variety of insurance coverages to policyholders located principally in the
United States. These various operations are discussed below.
National Indemnity Company (“NICO”), domiciled in Nebraska, and certain affiliates (“NICO Primary”) underwrite
commercial motor vehicle and general liability insurance on an admitted basis and on an excess and surplus basis. Insurance
coverages are offered nationwide primarily through insurance agents and brokers.
The Berkshire Hathaway Homestate Companies (“BHHC”) is a group of insurers offering workers’ compensation,commercial auto and commercial property coverages to a diverse client base. BHHC has a national reach, with the ability toprovide first-dollar and small to large deductible workers’ compensation coverage to employers in all states, except thosewhere coverage is available only through state-operated workers’ compensation funds. NICO Primary and BHHC are eachbased in Omaha, Nebraska.
Berkshire Hathaway Specialty Insurance (“BH Specialty”) offers commercial property, casualty, healthcare
professional liability, executive and professional, surety, travel, medical stop loss and homeowner’s insurance throughBerkshire Hathaway Specialty Insurance Company and other Berkshire insurance affiliates. BH Specialty writes primary andexcess policies on an admitted and surplus basis in the U.S., and on a local or foreign non-admitted basis outside the U.S. BH
Specialty is based in Boston, Massachusetts, with regional offices currently in several U.S. cities. BH Specialty also
maintains international offices located in Australia, New Zealand, Canada and several countries in Asia, Europe and the
Middle East. BH Specialty writes business through wholesale and retail insurance brokers, as well as managing general
agents.
MedPro Group (“MedPro”) is a leading provider of healthcare liability (“HCL”) insurance in the United States.
MedPro provides customized HCL insurance, claims, patient safety and risk solutions to physicians, surgeons, dentists andother healthcare professionals, as well as hospitals, senior care and other healthcare facilities. Additionally, MedPro provides
HCL insurance solutions to international markets through other Berkshire insurance affiliates, delivers liability insurance toother professionals, and offers specialized accident and health insurance solutions to colleges and other customers through its
subsidiaries and other Berkshire insurance affiliates. MedPro is based in Fort Wayne, Indiana.
U.S. Liability Insurance Company (“USLI”) includes a group of five specialty insurers that underwrite commercial,professional and personal lines insurance on an admitted basis, as well as on an excess and surplus basis. USLI markets
policies in all 50 states, the District of Columbia and Canada through wholesale and retail insurance agents. USLI companies
also underwrite and market a wide variety of specialty insurance products. USLI is based in Wayne, Pennsylvania.

K-4

Berkshire Hathaway GUARD Insurance Companies (“GUARD”) is a group of five insurance companies that provide afull suite of commercial insurance products, as well as homeowners policies to over 350,000 small to mid-sized businesses
and homeowners. These offerings are made through independent agents and retail and wholesale brokers. GUARD is basedin Wilkes-Barre, Pennsylvania.
MLMIC Insurance Company (“MLMIC”) has been the leading writer of medical professional liability insurance in
New York State for over 40 years. MLMIC distributes the majority of its policies on a direct basis to medical and dental
professionals, health care providers and hospitals.
Berkshire Hathaway Reinsurance Group—Berkshire’s combined global reinsurance business, referred to as theBerkshire Hathaway Reinsurance Group (“BHRG”), offers a wide range of coverages on property, casualty, life and healthrisks to insurers and reinsurers worldwide. BHRG conducts business activities in 24 countries. Reinsurance business iswritten through NICO and certain other Berkshire insurance subsidiaries (collectively, the “NICO Group”) and General Re
Corporation, domiciled in Delaware, and its subsidiaries (collectively the “General Re Group”). BHRG’s underwriting
operations in the U.S. are based in Stamford, Connecticut.
The type and volume of business written is dependent on market conditions, including prevailing premium rates andcoverage terms. The level of underwriting activities often fluctuates significantly from year to year depending on theperceived level of price adequacy in specific insurance and reinsurance markets as well as from the timing of particularly
large reinsurance transactions.
Property/casualty
The NICO Group offers traditional property/casualty reinsurance on both an excess-of-loss and a quota-share basis,
catastrophe excess-of-loss treaty and facultative reinsurance, and primary insurance on an excess-of-loss basis for large or
unusual risks. The type and volume of business written by the NICO Group may vary significantly from period to period
resulting from changes in perceived premium rate adequacy and from unique or large transactions. A significant portion of
NICO Group’s annual reinsurance premium volume currently derives from a 20% quota-share agreement with Insurance
Australia Group Limited (“IAG”) that expires July 1, 2025. IAG is a multi-line insurer in Australia, New Zealand and otherAsia-Pacific countries.
The General Re Group conducts a global property and casualty reinsurance business. Reinsurance contracts are written
on both a quota-share and excess basis for multiple lines of business. Contracts are primarily in the form of treaties, and to alesser degree, on a facultative basis. General Re Group conducts business in North America primarily through General
Reinsurance Corporation (“GRC”), which is licensed in the District of Columbia and all states, except Hawaii, where it is anaccredited reinsurer. GRC conducts operations in North America from its headquarters in Stamford, Connecticut and through12 branch offices in the U.S. and Canada.
In North America, the General Re Group includes General Star National Insurance Company, General Star Indemnity
Company and Genesis Insurance Company, which offer a broad array of specialty and surplus lines and property, casualty
and professional liability coverages. Such business is marketed through a select group of wholesale brokers, managing
general underwriters and program administrators, and offer solutions for the unique needs of public entity, commercial andcaptive customers.
General Re Group’s international reinsurance business is conducted on a direct basis through General Reinsurance AG,
based in Cologne, Germany, and through several other subsidiaries and branches in numerous other countries. International
business is also written through brokers, including Faraday Underwriting Limited (“Faraday”), a wholly-owned subsidiary.
Faraday owns the managing agent of Syndicate 435 at Lloyd’s of London and provides capacity and participates in 100% of
the results of Syndicate 435.
Life/health
The General Re Group also conducts a global life and health reinsurance business. In the U.S. and internationally, theGeneral Re Group writes life, disability, supplemental health, critical illness and long-term care coverages. The life/healthbusiness is marketed on a direct basis. Life/health net premiums written by the General Re Group in 2021 were primarily in
the Asia Pacific, United States and Western Europe.
Berkshire Hathaway Life Insurance Company of Nebraska (“BHLN”), a subsidiary of NICO, and its affiliates write
reinsurance covering various forms of traditional life insurance exposures and, on a limited basis, health insurance exposures.
BHLN and affiliates are parties to contracts that reinsure certain guaranteed minimum death, income and similar benefit risks
on closed-blocks of variable annuity risks under reinsurance contracts, with the most recent contract incepting in 2014.

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Retroactive reinsurance
NICO also periodically writes retroactive reinsurance contracts. Retroactive reinsurance contracts indemnify cedingcompanies against the adverse development of claims arising from loss events that have already occurred under property andcasualty policies issued in prior years. Coverages under such contracts are provided on an excess basis (above a statedretention) or for losses payable after the inception of the contract with no additional ceding company retention. Contracts arenormally subject to aggregate limits of indemnification, which can be exceptionally large in amount. Significant amounts ofasbestos, environmental and latent injury claims may arise under these contracts.
The concept of time-value-of-money is an important element in establishing retroactive reinsurance contract prices andterms since loss payments may occur over decades. Normally, expected ultimate losses payable under these policies are
expected to exceed premiums, thus producing underwriting losses. Nevertheless, this business is written, in part, because of
the large amounts of policyholder funds generated for investment, the economic benefit of which will be reflected throughinvestment results in future periods.
Periodic payment annuity
BHLN writes periodic payment annuity insurance policies and reinsures existing annuity-like obligations. Under thesepolicies, BHLN receives upfront premiums and agrees in the future to make periodic payments that often extend for decades.
These policies generally relate to the settlement of underlying personal injury or workers’ compensation cases of otherinsurers, known as structured settlements. Consistent with retroactive reinsurance contracts, time-value-of-money concepts
are an important factor in establishing annuity premiums, and underwriting losses are expected from the periodic accretion oftime-value discounted liabilities.
Investments of insurance businesses—Berkshire’s insurance subsidiaries hold significant levels of invested assets.
Investment portfolios are primarily managed by Berkshire’s Chief Executive Officer. Investments include a very large
portfolio of publicly traded equity securities, which are concentrated in relatively few issuers, as well as fixed maturity
securities and cash and short-term investments. Generally, there are no targeted allocations by investment type or attempts tomatch investment asset and insurance liability durations. However, investment portfolios have historically included a muchgreater proportion of equity securities than is customary in the insurance industry.
Invested assets derive from shareholder capital as well as funds provided from policyholders through insurance andreinsurance business (“float”). Float is the approximate amount of net policyholder funds generated through underwriting
activities that is available for investment. The major components of float are unpaid losses and loss adjustment expenses, life,
annuity and health benefit liabilities, unearned premiums and other policyholder liabilities less premium and reinsurance
receivables, deferred policy acquisition costs and deferred charges on assumed retroactive reinsurance contracts. On a
consolidated basis, float has grown from approximately $91 billion at the end of 2016 to approximately $147 billion at theend of 2021. The cost of float can be measured as the net pre-tax underwriting loss as a percentage of average float. In eachof the three years ending December 31, 2021, Berkshire’s consolidated cost of float was negative, as its insurance businesses
produced net underwriting gains.
Railroad Business—Burlington Northern Santa Fe
Burlington Northern Santa Fe, LLC (“BNSF”) is based in Fort Worth, Texas, and through BNSF Railway Company(“BNSF Railway”) operates one of the largest railroad systems in North America. BNSF Railway had approximately 35,000
employees at the end of 2021. BNSF also operates a relatively smaller third-party logistics services business.
In serving the Midwest, Pacific Northwest, Western, Southwestern and Southeastern regions and ports of the UnitedStates, BNSF transports a range of products and commodities derived from manufacturing, agricultural and natural resource
industries. Freight revenues are covered by contractual agreements of varying durations or common carrier published prices
or company quotations. BNSF’s financial performance is influenced by, among other things, general and industry economic
conditions at the international, national and regional levels.
BNSF’s primary routes, including trackage rights, allow it to access major cities and ports in the western and southern
United States as well as parts of Canada and Mexico. In addition to major cities and ports, BNSF Railway efficiently serves
many smaller markets by working closely with approximately 200 shortline railroads. BNSF Railway has also entered into
marketing agreements with other rail carriers, expanding the marketing reach for each railroad and their customers. For theyear ending December 31, 2021, approximately 38% of freight revenues were derived from consumer products, 24% fromindustrial products, 23% from agricultural products and 15% from coal.

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Regulatory Matters
BNSF is subject to federal, state and local laws and regulations generally applicable to its businesses. Rail operations
are subject to the regulatory jurisdiction of the Surface Transportation Board (“STB”), the Federal Railroad Administration of
the United States Department of Transportation (“DOT”), the Occupational Safety and Health Administration (“OSHA”), as
well as other federal and state regulatory agencies and Canadian regulatory agencies for operations in Canada. The STB has
jurisdiction over disputes and complaints involving certain rates, routes and services, the sale or abandonment of rail lines,
applications for line extensions and construction, and the merger with or acquisition of control of rail common carriers. The
outcome of STB proceedings can affect the profitability of BNSF Railway’s business.
The DOT and OSHA have jurisdiction under several federal statutes over a number of safety and health aspects of rail
operations, including the transportation of hazardous materials. BNSF Railway is required to transport these materials to theextent of its common carrier obligation. State agencies regulate some aspects of rail operations with respect to health andsafety in areas not otherwise preempted by federal law.
Environmental Matters
BNSF’s rail operations, as well as those of its competitors, are also subject to extensive federal, state and local
environmental regulation covering discharges to the ground or waters, air emissions, toxic substances and the generation,
handling, storage, transportation and disposal of waste and hazardous materials. Such regulations effectively increase thecosts and liabilities associated with rail operations. Environmental risks are also inherent in rail operations, which frequently
involve transporting chemicals and other hazardous materials.
Many of BNSF’s land holdings are or have been used for industrial or transportation-related purposes or leased tocommercial or industrial companies whose activities may have resulted in discharges onto the property. Under federal (inparticular, the Comprehensive Environmental Response, Compensation and Liability Act) and state statutes, BNSF may beheld jointly and severally liable for cleanup and enforcement costs associated with a particular site without regard to fault or
the legality of the original conduct. BNSF may also be subject to claims by third parties for investigation, cleanup, restorationor other environmental costs under environmental statutes or common law with respect to properties they own that have been
impacted by BNSF operations.
Consumption of diesel fuel by locomotives accounted for approximately 80% of BNSF’s greenhouse gas (“GHG”)
emissions in its baseline year of 2018. BNSF management has committed to a broad sustainability model, applying sciencebased approaches, that will provide a 30% reduction in BNSF’s GHG-emissions by 2030 from its baseline year of 2018.
BNSF intends to continue improvements in fuel efficiency and increased utilization of renewable diesel fuel. Long-term
solutions, such as battery-electric and hydrogen locomotives, are also being evaluated and field-tested.
Competition
The business environment in which BNSF operates is highly competitive. Depending on the specific market,
deregulated motor carriers and other railroads, as well as river barges, ships and pipelines, may exert pressure on price andservice levels. The presence of advanced, high service truck lines with expedited delivery, subsidized infrastructure andminimal empty mileage continues to affect the market for non-bulk, time-sensitive freight. The potential expansion of longer
combination vehicles could further encroach upon markets traditionally served by railroads. In order to remain competitive,
BNSF Railway and other railroads seek to develop and implement operating efficiencies to improve productivity.
As railroads streamline, rationalize and otherwise enhance their franchises, competition among rail carriers intensifies.
BNSF Railway’s primary rail competitor in the Western region of the United States is the Union Pacific Railroad Company.
Other Class I railroads and numerous regional railroads and motor carriers also operate in parts of the same territories servedby BNSF Railway.
Utilities and Energy Businesses—Berkshire Hathaway Energy
Berkshire currently has a 91.1% ownership interest in Berkshire Hathaway Energy Company (“BHE”). BHE is a global
energy company with subsidiaries and affiliates that generate, transmit, store, distribute and supply energy. BHE’s locallymanaged businesses are organized as separate operating units. BHE’s domestic regulated energy interests are comprised offour regulated utility companies serving approximately 5.2 million retail customers, five interstate natural gas pipelinecompanies with approximately 21,100 miles of operated pipeline having a design capacity of approximately 21 billion cubicfeet of natural gas per day and ownership interests in electricity transmission businesses. BHE’s Great Britain electricity
distribution subsidiaries serve about 3.9 million electricity end-users and its electricity transmission-only business in Alberta,
Canada serves approximately 85% of Alberta’s population. BHE’s interests also include a diversified portfolio ofindependent power projects, a liquefied natural gas export, import and storage facility, the largest residential real estate
brokerage firm in the United States, and one of the largest residential real estate brokerage franchise networks in the UnitedStates. BHE employs approximately 24,000 people in connection with its various operations.
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General Matters
PacifiCorp is a regulated electric utility company headquartered in Oregon, serving electric customers in portions ofUtah, Oregon, Wyoming, Washington, Idaho and California. The combined service territory’s diverse regional economy
ranges from rural, agricultural and mining areas to urban, manufacturing and government service centers. No single segmentof the economy dominates the combined service territory, which helps mitigate PacifiCorp’s exposure to economic
fluctuations. In addition to retail sales, PacifiCorp sells electricity on a wholesale basis.
MidAmerican Energy Company (“MEC”) is a regulated electric and natural gas utility company headquartered in
Iowa, serving electric and natural gas customers primarily in Iowa and also in portions of Illinois, South Dakota and
Nebraska. MEC has a diverse retail customer base consisting of urban and rural residential customers and a variety ofcommercial and industrial customers. In addition to retail sales and natural gas transportation, MEC sells electricity andnatural gas on a wholesale basis.
NV Energy, Inc. (“NV Energy”) is an energy holding company headquartered in Nevada, primarily consisting of two
regulated utility subsidiaries, Nevada Power Company (“Nevada Power”) and Sierra Pacific Power Company (“Sierra
Pacific”) (collectively, the “Nevada Utilities”). Nevada Power serves retail electric customers in southern Nevada and Sierra
Pacific serves retail electric and natural gas customers in northern Nevada. The Nevada Utilities’ combined service territory’s
economy includes gaming, mining, recreation, warehousing, manufacturing and governmental services. In addition to retailsales and natural gas transportation, the Nevada Utilities sell electricity and natural gas on a wholesale basis.
As vertically integrated utilities, BHE’s domestic utilities own approximately 29,400 net megawatts of generation
capacity in operation and under construction. The domestic utilities business is subject to seasonal variations principally
related to the use of electricity for air conditioning and natural gas for heating. Typically, regulated electric revenues arehigher in the summer months, while regulated natural gas revenues are higher in the winter months.
The Great Britain distribution companies consist of Northern Powergrid (Northeast) plc and Northern Powergrid(Yorkshire) plc, which own a substantial electricity distribution network that delivers electricity to end-users in northeast
England in an area covering approximately 10,000 square miles. The distribution companies primarily charge supply
companies regulated tariffs for the use of their distribution systems.
AltaLink L.P. (“AltaLink”) is a regulated electric transmission-only utility company headquartered in Calgary, Alberta.
AltaLink’s high voltage transmission lines and related facilities transmit electricity from generating facilities to major load
centers, cities and large industrial plants throughout its 87,000 square mile service territory.
The natural gas pipelines consist of BHE GT&S, LLC (“BHE GT&S”), Northern Natural Gas Company (“Northern
Natural”) and Kern River Gas Transmission Company (“Kern River”). BHE GT&S was acquired on November 1, 2020.
BHE GT&S, based in Virginia, operates three interstate natural gas pipeline systems that consist of approximately
5,400 miles of natural gas transmission, gathering and storage pipelines and operates seventeen underground natural gas
storage fields in the eastern region of the United States. BHE GT&S’s large underground natural gas storage assets andpipeline systems are part of an interconnected gas transmission network that provides transportation services to utilities andnumerous other customers. BHE GT&S is also an industry leader in liquefied natural gas solutions through its investments inand ownership of several liquefied natural gas facilities located throughout the eastern region of the United States.
Northern Natural, based in Nebraska, operates the largest interstate natural gas pipeline system in the United States, asmeasured by pipeline miles, reaching from west Texas to Michigan’s Upper Peninsula. Northern Natural’s pipeline system
consists of approximately 14,300 miles of natural gas pipelines. Northern Natural’s extensive pipeline system, which isinterconnected with many interstate and intrastate pipelines in the national grid system, has access to supplies from multiple
major supply basins and provides transportation services to utilities and numerous other customers. Northern Natural also
operates three underground natural gas storage facilities and two liquefied natural gas storage peaking units. Northern
Natural’s pipeline system experiences significant seasonal swings in demand and revenue, with the highest demand typicallyoccurring during the months of November through March.
Kern River, based in Utah, operates an interstate natural gas pipeline system that consists of approximately 1,400 miles
and extends from supply areas in the Rocky Mountains to consuming markets in Utah, Nevada and California. Kern Rivertransports natural gas for electric and natural gas distribution utilities, major oil and natural gas companies or affiliates ofsuch companies, electric generating companies, energy marketing and trading companies, and financial institutions.
BHE Renewables, based in Iowa, owns interests in independent power projects having approximately 4,900 net
megawatts of generation capacity that are in service in California, Texas, Illinois, Nebraska, New York, Arizona, Minnesota,
Kansas, Iowa and Hawaii. These independent power projects sell power generated primarily from wind, solar, geothermaland hydro sources under long-term contracts. Additionally, $6.9 billion has been invested in wind projects sponsored by third
parties, commonly referred to as tax equity investments.
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Regulatory Matters
PacifiCorp, MEC and the Nevada Utilities are subject to comprehensive regulation by various federal, state and local
agencies. The Federal Energy Regulatory Commission (“FERC”) is an independent agency with broad authority to
implement provisions of the Federal Power Act, the Energy Policy Act of 2005 and other federal statutes. The FERC
regulates rates for wholesale sales of electricity; transmission of electricity, including pricing and regional planning for the
expansion of transmission systems; electric system reliability; utility holding companies; accounting and records retention;
securities issuances; construction and operation of hydroelectric facilities; and other matters. The FERC also has theenforcement authority to assess civil penalties of up to $1.4 million per day per violation of rules, regulations and orders
issued under the Federal Power Act. MEC is also subject to regulation by the Nuclear Regulatory Commission pursuant to
the Atomic Energy Act of 1954, as amended, with respect to its 25% ownership of the Quad Cities Nuclear Station.
With certain limited exceptions, BHE’s domestic utilities have an exclusive right to serve retail customers within theirservice territories and, in turn, have an obligation to provide service to those customers. In some jurisdictions, certain classesof customers may choose to purchase all or a portion of their energy from alternative energy suppliers, and in somejurisdictions retail customers can generate all or a portion of their own energy. Historically, state regulatory commissions
have established retail electric and natural gas rates on a cost-of-service basis, designed to allow a utility the opportunity torecover what each state regulatory commission deems to be the utility’s reasonable costs of providing services, including afair opportunity to earn a reasonable return on its investments based on its cost of debt and equity. The retail electric rates ofPacifiCorp, MEC and the Nevada Utilities are generally based on the cost of providing traditional bundled services, including
generation, transmission and distribution services; however, rates are available for transmission-only and distribution-onlyservices.
Northern Powergrid (Northeast) and Northern Powergrid (Yorkshire) each charge fees for the use of their distribution
systems that are controlled by a formula prescribed by the British electricity regulatory body, the Gas and Electricity Markets
Authority. The current eight-year price control period runs from April 1, 2015 through March 31, 2023.
AltaLink is regulated by the Alberta Utilities Commission (“AUC”), pursuant to the Electric Utilities Act (Alberta), thePublic Utilities Act (Alberta), the Alberta Utilities Commission Act (Alberta) and the Hydro and Electric Energy Act(Alberta). The AUC is an independent quasi-judicial agency, which regulates and oversees Alberta’s electricity transmission
sector with broad authority that may impact many of AltaLink’s activities, including its tariffs, rates, construction, operations
and financing. Under the Electric Utilities Act, AltaLink prepares and files applications with the AUC for approval of tariffs
to be paid by the Alberta Electric System Operator (“AESO”) for the use of its transmission facilities, and the terms andconditions governing the use of those facilities. The AESO is an independent system operator in Alberta, Canada thatoversees Alberta’s integrated electrical system (“AIES”) and wholesale electricity market. The AESO is responsible fordirecting the safe, reliable and economic operation of the AIES, including long-term transmission system planning.
The natural gas pipelines are subject to regulation by various federal and state agencies. The natural gas pipeline andstorage operations of BHE GT&S, Northern Natural and Kern River are regulated by the FERC pursuant to the Natural Gas
Act and the Natural Gas Policy Act of 1978. Under this authority, the FERC regulates, among other items, (a) rates, charges,
terms and conditions of service; (b) the construction and operation of interstate pipelines, storage and related facilities,
including the extension, expansion or abandonment of such facilities; and (c) the construction and operation of liquefied
natural gas import/export facilities. Interstate natural gas pipeline companies are also subject to regulations administered by
the Office of Pipeline Safety within the Pipeline and Hazardous Materials Safety Administration, an agency of the DOT.
Federal pipeline safety regulations are issued pursuant to the Natural Gas Pipeline Safety Act of 1968, as amended, which
establishes safety requirements in the design, construction, operation and maintenance of interstate natural gas pipeline
facilities.
Environmental Matters
BHE and its energy businesses are subject to federal, state, local and foreign laws and regulations regarding climatechange, renewable portfolio standards, air and water quality, emissions performance standards, coal combustion byproductdisposal, hazardous and solid waste disposal, protected species and other environmental matters that have the potential toimpact current and future operations. In addition to imposing continuing compliance obligations, these laws and regulations,such as the Federal Clean Air Act, provide regulators with the authority to levy substantial penalties for noncompliance,
including fines, injunctive relief and other sanctions.
The Federal Clean Air Act, as well as state laws and regulations impacting air emissions, provides a framework forprotecting and improving the nation’s air quality and controlling sources of air emissions. These laws and regulations
continue to be promulgated and implemented and will impact the operation of BHE’s generating facilities and require them toreduce emissions at those facilities to comply with the requirements.

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Renewable portfolio standards have been established by certain state governments and generally require electricity
providers to obtain a minimum percentage of their power from renewable energy resources by a certain date. Utah, Oregon,
Washington, California, Iowa and Nevada have adopted renewable portfolio standards. In addition, the potential adoption ofstate or federal clean energy standards, which include low-carbon, non-carbon and renewable electricity generating resources,
may also impact electricity generators and natural gas providers.
In December 2015, an international agreement was negotiated by 195 nations to create a universal framework forcoordinated action on climate change in what is referred to as the Paris Agreement. The Paris Agreement reaffirms the goalof limiting global temperature increase well below 2 degrees Celsius, while urging efforts to limit the increase to 1.5 degrees
Celsius; establishes commitments by all parties to make nationally determined contributions and pursue domestic measures
aimed at achieving the commitments; commits all countries to submit emissions inventories and report regularly on theiremissions and progress made in implementing and achieving their nationally determined commitments; and commits all
countries to submit new commitments every five years, with the expectation that the commitments will get more aggressive.
In the context of the Paris Agreement, the United States agreed to reduce greenhouse gas emissions 26% to 28% by 2025
from 2005 levels. The Paris Agreement formally entered into force on November 4, 2016. The United States completed its
withdrawal from the Paris Agreement on November 4, 2020. President Biden accepted the terms of the climate agreement on
January 21, 2021, and the United States completed its reentry on February 19, 2021. New commitments to the Paris
Agreement were announced in April 2021, with the United States pledging to cut its overall greenhouse gas emissions by 5052% below 2005 levels by 2030 and to reach 100% carbon pollution-free electricity by 2035.
On October 10, 2017, the Environmental Protection Agency (“EPA”) issued a proposal to repeal the Clean Power Plan,
which was intended to achieve an overall reduction in carbon dioxide emissions from existing fossil-fueled electric
generating units of 32% below 2005 levels. On June 19, 2019, the EPA repealed the Clean Power Plan and issued theAffordable Clean Energy rule, which fully replaced the Clean Power Plan. In the Affordable Clean Energy rule, the EPA
determined that the best system of emissions reduction for existing coal fueled power plants is heat rate improvements andidentified a set of candidate technologies and measures that could improve heat rates. Measures taken to meet the standardsof performance must be achieved at the source itself. On January 19, 2021, the D.C. Circuit Court of Appeals vacated theAffordable Clean Energy Rule in its entirety. In October 2021, the U.S. Supreme Court agreed to hear an appeal of thatdecision. Arguments in the case will be held in February 2022 and a decision regarding the scope of the EPA’s authority toregulate greenhouse gas emissions under the Clean Air Act is expected by June 2022. Increasingly, states are adopting
legislation and regulations to reduce greenhouse gas emissions, and local governments and consumers are seeking increasing
amounts of clean and renewable energy.
BHE and its energy subsidiaries continue to focus on delivering reliable, affordable, safe and clean energy to its
customers and on actions to mitigate its greenhouse gas (“GHG”) emissions. BHE’s primary source of GHG emissions is thegeneration of electricity from its power plants that are fueled by coal or natural gas. In managing its electricity generation,
BHE works with its regulators to protect the energy and economic needs of customers by considering costs, reliability andsources of electric generation. Over the years, BHE has invested heavily in owned wind, solar and geothermal generation,with cumulative investments of $30.1 billion through 2021 and has retired 16 coal generation units. As a result, BHE has
reduced its annual GHG emissions by about 20% from 2005 levels. BHE plans to continue investing in wind, solar and otherlow-carbon generation in the future and to retire an additional 16 coal generation units between 2022 and 2030 in a reliable
and cost-effective manner, thereby achieving a 50% reduction in GHG emissions from 2005 levels in 2030.
Non-Energy Businesses
HomeServices of America, Inc. (“HomeServices”) is the largest residential real estate brokerage firm in the UnitedStates. In addition to providing traditional residential real estate brokerage services, HomeServices offers other integrated realestate services, including mortgage originations and mortgage banking, title and closing services, property and casualty
insurance, home warranties, relocation services and other home-related services. It operates under 55 brand names withapproximately 46,000 real estate agents in over 900 brokerage offices in 33 states and the District of Columbia.
HomeServices’ franchise network currently includes approximately 360 franchisees primarily in the United States, andinternationally in over 1,600 brokerage offices with over 53,000 real estate agents under two brand names. In exchange forcertain fees, HomeServices provides the right to use the Berkshire Hathaway HomeServices or Real Living brand names andother related service marks, as well as providing orientation programs, training and consultation services, advertisingprograms and other services.
HomeServices’ principal sources of revenue are dependent on residential real estate sales, which are generally higher
in the second and third quarters of each year. This business is highly competitive and subject to general real estate market
conditions.

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Manufacturing Businesses
Berkshire’s numerous and diverse manufacturing subsidiaries are grouped into three categories: (1) industrial products,(2) building products and (3) consumer products. Berkshire’s industrial products businesses manufacture components foraerospace and power generation applications, specialty chemicals, metal cutting tools, and a variety of other products
primarily for industrial use. The building products group produces prefabricated and site-built residential homes, flooringproducts, insulation, roofing and engineered products, building and engineered components, paint and coatings and bricks
and masonry products. The consumer products group manufactures recreational vehicles, alkaline batteries, various apparelproducts, jewelry and custom picture framing products. Information concerning the major activities of these three groups
follows. Berkshire’s manufacturing businesses employed approximately 187,000 people at the end of 2021.
Industrial products
Precision Castparts
Precision Castparts Corp. (“PCC”) manufactures complex metal components and products, provides high-quality
investment castings, forgings, fasteners/fastener systems and aerostructures for critical aerospace and power and energy
applications. PCC also manufactures seamless pipe for coal-fired, industrial gas turbine (“IGT”) and nuclear power plants;
downhole casing and tubing, fittings and various mill forms in a variety of nickel and steel alloys for severe-service oil andgas environments; investment castings and forgings for general industrial, armament, medical and other applications; nickel
and titanium alloys in all standard mill forms from large ingots and billets to plate, foil, sheet, strip, tubing, bar, rod, extruded
shapes, rod-in-coil, wire and welding consumables, as well as cobalt alloys, for the aerospace, chemical processing, oil andgas, pollution control and other industries; revert management solutions; fasteners for automotive and general industrial
markets; specialty alloys for the investment casting and forging industries; heat treating and destructive testing services forthe investment cast products and forging industries; grinder pumps and affiliated components for low-pressure sewer
systems; critical auxiliary equipment and gas monitoring systems for the power generation industry; and metalworking tools
for the fastener market and other applications.
Investment casting technology involves a multi-step process that uses ceramic molds in the manufacture of metalcomponents with more complex shapes, closer tolerances and finer surface finishes than parts manufactured using othermethods. PCC uses this process to manufacture products for aircraft engines, IGT and other aeroderivative engines,
airframes, medical implants, armament, unmanned aerial vehicles and other industrial applications. PCC also manufactureshigh temperature carbon and ceramic composite components, including ceramic matrix composites, for use in nextgeneration aerospace engines.
PCC uses forging processes to manufacture components for the aerospace and power generation markets, including
seamless pipe for coal-fired, IGT and nuclear power plants, and downhole casings and tubing pipe for severe service oil andgas markets. PCC manufactures high-performance, nickel-based alloys used to produce forged components for aerospace andnon-aerospace applications in such markets as oil and gas, chemical processing and pollution control. These titanium
products are used to manufacture components for the commercial and military aerospace, power generation, energy and otherindustrial end markets.
PCC is also a leading developer and manufacturer of highly engineered fasteners, fastener systems, aerostructures andprecision components, primarily for critical aerospace applications. These products are produced for the aerospace and powerand energy markets, as well as for construction, automotive, heavy truck, farm machinery, mining and construction
equipment, shipbuilding, machine tools, medical equipment, appliance and recreation markets.
PCC has several significant customers, including aerospace original equipment manufacturers (Boeing and Airbus) andaircraft engine manufacturer suppliers (General Electric, Rolls Royce and Pratt &Whitney). The majority of PCC’s sales arefrom customer orders or demand schedules pursuant to long-term agreements. Contractual terms may provide for terminationby the customer, subject to payment for work performed. PCC typically does not experience significant order cancellations,although periodically it receives requests for delays in delivery schedules. Since the onset of the COVID-19 pandemic in
2020, delay requests increased, with delivery dates extending in some cases beyond 2021.
The effects of the COVID-19 pandemic produced significant adverse effects on the PCC aerospace business in 2020
and 2021. The sudden and material reductions in air travel led to aircraft build rate reductions and customer destocking at
extraordinary rates. The grounding of the Boeing 737 MAX also adversely impacted 2020 and 2021 and quality issues with
the Boeing 787 negatively impacted 2021. Aircraft build rates have not recovered in any meaningful way. During 2020, PCC
significantly reduced its worldwide workforce by about 40% to help align operations to reduced aircraft build rates. The
restructuring actions taken began to improve margins in late 2020 and further margin improvements were achieved in 2021.

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PCC is subject to substantial competition in all of its markets. Components and similar products may be produced bycompetitors, who use either the same types of manufacturing processes as PCC or other processes. Although PCC believes its
manufacturing processes, technology and experience provide advantages to its customers, such as high quality, competitive
prices and physical properties that often meet more stringent demands, alternative forms of manufacturing can be used to
produce many of the same components and products. Despite intense competition, PCC is a leading supplier in most of its
principal markets. Several factors, including long-standing customer relationships, technical expertise, state-of-the-art
facilities and dedicated employees, aid PCC in maintaining competitive advantages.
Several raw materials used in PCC products, including certain metals such as nickel, titanium, cobalt, tantalum andmolybdenum, are found in only a few parts of the world. These metals are required for the alloys used in manufactured
products. The availability and costs of these metals may be influenced by private or governmental cartels, changes in worldpolitics, labor relations between the metal producers and their workforces and inflation.
PCC is currently subject to various federal, state and foreign environmental laws concerning, among other things,
water discharges, air emissions, waste management, toxic materials use reduction and environmental cleanup. Laws andregulations continue to evolve, and it is reasonably possible that environmental standards will become more stringent in the
future, particularly under air quality and water quality laws and standards related to climate change, including reporting ofgreenhouse gas emissions. As a result, it is also reasonably likely that PCC will be regularly required to make additional
expenditures, including capital expenditures, which could be significant, relating to environmental matters.
Lubrizol
The Lubrizol Corporation (“Lubrizol”) is a specialty chemical and performance materials company that manufactures
products and supplies technologies for the global transportation, industrial and consumer markets. Lubrizol currently operates
two business segments: Lubrizol Additives, which produces engine lubricant additives, driveline lubricant additives andindustrial specialties products; and Lubrizol Advanced Materials, which includes engineered materials (engineered polymers
and performance coatings) and life sciences (beauty and personal care, and health and home care solutions).
Lubrizol Additives’ products are used in a broad range of applications including engine oils, transmission fluids, gearoils, specialty driveline lubricants, fuels, metalworking fluids and compressor lubricants for transportation and industrial
applications. Lubrizol Advanced Materials’ products are used in many different types of applications including beauty,
personal care, home care, over-the-counter pharmaceuticals, medical devices, performance coatings, sporting goods,
plumbing and fire sprinkler systems. Lubrizol is an industry leader in many of the markets in which it competes, and its
principal lubricant additives competitors are Infineum International Ltd., Chevron Oronite Company and Afton Chemical
Corporation. Lubrizol Advanced Materials’ businesses compete in many markets with a variety of competitors in eachproduct line.
With its considerable patent portfolio, Lubrizol uses its technological leadership position and applies its sciencecapabilities, formulation know-how and market expertise in product development to improve the demand, quality and valueof its solutions. Lubrizol also leverages its scientific and applications knowledge to meet and exceed customer performanceand sustainability requirements. While Lubrizol typically has patents that expire each year, it invests resources to protect its
intellectual property and to develop or acquire innovative products for the markets it serves. Lubrizol uses many specialty
and commodity chemical raw materials in its manufacturing processes. Raw materials are primarily feedstocks derived frompetroleum and petrochemicals and, generally, are obtainable from several sources. The materials that Lubrizol chooses topurchase from a single source typically are subject to long-term supply contracts to ensure supply reliability.
Lubrizol operates its business on a global basis through more than 100 offices, laboratories, production facilities andwarehouses on six continents, the most significant of which are North America, Europe, Asia and South America. Lubrizol
markets its products worldwide through direct sales, sales agents and distributors. Lubrizol’s customers principally consist ofmajor global and regional oil companies and industrial and consumer products companies. Some of Lubrizol’s largest
customers also may be suppliers. During 2021, no single customer accounted for more than 10% of Lubrizol’s consolidated
revenues. In 2021, the COVID-19 pandemic continued to have an adverse effect on many of the markets that Lubrizol serves,
as did worldwide supply chain disruptions, affecting both the availability of raw materials and fulfillment of customer orders.
In addition, the occurrence and duration of the February 2021 winter storms and freezing temperatures in Texas significantlyinterrupted operations at Lubrizol’s manufacturing facilities.
Lubrizol expends significant capital to ensure the safety of its employees and the communities where it operates, aswell as delivering on its commitments to operational excellence and cybersecurity. Lubrizol also makes significant capital
investments to ensure reliable supply and compliance with regulations governing its operations, while reducing theirenvironmental footprint.

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Lubrizol is subject to foreign, federal, state and local laws to protect the environment, limit manufacturing waste andemissions, ensure product and employee safety and regulate trade. While the company believes that its policies, practices andprocedures are designed to limit the risks of non-compliance with laws and consequent financial liability, it experienced a fireat one of its chemical manufacturing facilities in 2019, which resulted in significant cleanup and remediation costs. Lubrizol
also suffered a fire in 2021 that resulted in a total loss of its grease manufacturing facility. The operation of chemical
manufacturing plants entails ongoing environmental and other risks, and significant capital expenditures, costs or liabilities
could be incurred in the future.
IMC
IMC International Metalworking Companies (“IMC”) is one of the world’s three largest multinational manufacturers ofconsumable precision carbide metal cutting tools for applications in a broad range of industrial end markets. IMC’s principal
brand names include ISCAR®, TaeguTec®, Ingersoll®, Tungaloy®, Unitac®, UOP®, It.te.di®, Qutiltec®, Tool—Flo®, PCT®
and IMCO®. IMC’s primary manufacturing facilities are in Israel, the United States, South Korea, Japan, Germany, Italy,
Switzerland, India and China.
IMC has five primary product lines: milling tools, gripping tools, turning/thread tools, drilling tools and tooling. The
main products are split within each product line between consumable cemented tungsten carbide inserts and steel tool
holders. Inserts comprise the vast majority of sales and earnings. Metal cutting inserts are used by industrial manufacturers to
cut metals and are consumed during their use in cutting applications. IMC manufactures hundreds of types of highly
engineered inserts within each product line that are tailored to maximize productivity and meet the technical requirements ofcustomers. IMC’s staff of scientists and engineers continuously develop and innovate products that address end user needs
and requirements.
IMC’s global sales and marketing network operates in virtually every major manufacturing center around the world,
staffed with highly skilled engineers and technical personnel. IMC’s customer base is very diverse, with its primarycustomers being large, multinational businesses in the automotive, aerospace, engineering and machinery industries. IMC
operates a regional central warehouse system with locations in Israel, the United States, Belgium, Korea, Japan and China.
Additional small quantities of products are maintained at local IMC offices to provide on-time customer support andinventory management.
IMC competes in the metal cutting tools segment of the global metalworking tools market. The segment includes
hundreds of participants who range from small, private manufacturers of specialized products for niche applications andmarkets to larger, global multinational businesses (such as Sandvik and Kennametal, Inc.) with a wide assortment of products
and extensive distribution networks. Other manufacturing companies such as Kyocera, Mitsubishi, Sumitomo, Ceratizit andKorloy also play a significant role in the cutting tool market.
Cemented tungsten carbide powder is the main raw material used in manufacturing cutting tools. Most of IMC’s
metalworking insert products are made from tungsten. While supplies are currently adequate, a significant disruption orconstraints in production processing facilities could cause a price increase.
IMC is committed to follow, comply and obey all government and environmental regulations and requirements of all
applicable laws. IMC considers environmental preservation and pollution prevention as important factors in all operations
and activities. IMC production facilities are built with the highest standards and follow all applicable regulations.
MarmonMarmon Holdings, Inc. (“Marmon”) is a global industrial organization comprising 11 diverse business groups andmore than 100 autonomous manufacturing and service businesses. Marmon’s manufacturing and service operations are
conducted at approximately 400 manufacturing, distribution and service facilities located primarily in the United States, aswell as 22 other countries worldwide. Marmon’s business groups are as follows.
Foodservice Technologies manufactures beverage dispensing and cooling equipment, hot and cold food preparationand holding equipment and related products for restaurants, global brand owners and other foodservice providers. Operations
are based in the U.S. with manufacturing in the U.S., Mexico, China, the U.K., Germany and Italy. Products are soldprimarily throughout the U.S., Europe and Asia.
Water Technologies manufactures water treatment equipment for residential, commercial and industrial applications
worldwide. Operations are based primarily in the U.S., Canada, China, Singapore, India and Mexico with business centers
located in Belgium, France, Poland, Germany, the U.K., Italy, Switzerland and U.A.E.
Transportation Products serves the automotive, heavy-duty highway transportation and aerospace industries with
precision-molded plastic components; fastener thread solutions; metal tubing; auto aftermarket transmission and chassis
products; platform and lowbed trailers; and truck and trailer components. Operations and business are conducted primarily in
the U.S., Mexico, Canada, Europe and Asia.
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Retail Solutions provides retail environment design services; in-store digital merchandising, dispensing and display
fixtures; shopping, material handling and security carts. Operations and business are conducted in the U.S., U.K. and Czech
Republic.
Metal Services provides specialty metal pipe, tubing and related value-added services to customers across a broad
range of industries. Operations are based in the U.S., Canada and Mexico and business is conducted primarily in thosecountries.
Electrical produces electrical wire for use in residential and commercial buildings, and specialty wire and cable for use
in energy, transit, aerospace, defense, communication and other industrial applications. Operations are based in the U.S.,
Canada, India and England. Business is conducted globally and primarily in the U.S., Canada, India, the U.K., U.A.E. andChina.
Plumbing & Refrigeration supplies copper tubing and copper, brass, aluminum and stainless-steel fittings andcomponents for the plumbing, HVAC and refrigeration markets; custom coils ducting, air handling units and heatpipe for the
HVAC market; HVAC systems and structures for military, nuclear and medical markets and aluminum and brass forgings formany commercial and industrial applications. Business and operations are conducted primarily in the U.S.
Industrial Products supplies construction fasteners; masonry and stone anchoring systems used in commercial
construction; two component polymer products for anchoring, bonding and repair applications, gloves and other protective
wear; gear drives, gearboxes, fan drives and pump drives for various markets; wind machines for agricultural use; andwheels, axles and gears for rail, mining and other applications and equipment for the manufacture and assembly of lead acidbatteries. Operations are primarily based in the U.S., U.K., Canada and China and business is conducted in those countries.
Rail & Leasing manufactures, leases and maintains railcars; leases intermodal tank containers; manufactures mobile
railcar movers; provides in-plant rail switching and loading services; performs track construction and maintenance; andmanufactures steel tank heads and cylinders.
Union Tank Car Company (“UTLX”) is the largest component of Rail & Leasing and is a leading designer, builder andfull-service lessor of railroad tank cars and other specialized railcars. Together with its Canadian affiliate Procor, UTLX
owns a fleet of approximately 122,000 railcars for lease to customers in chemical, petrochemical, energy andagricultural/food industries. UTLX manufactures tank cars in the U.S. and performs railcar maintenance services at more than
100 locations across North America.
UTLX has a diversified customer base, both geographically and across industries. UTLX, while subject to cyclicality
and significant competition in most of its markets, competes by offering a broad range of high-quality products and services
targeted at its niche markets. Railcars are typically leased for multiple-year terms and most of the leases are renewed upon
expiration. Due to selective ongoing capital investment, utilization rates (the number of railcars on lease as a percentage ofthe total fleet) of the railcar fleet are generally high.
Intermodal tank containers are leased through EXSIF Worldwide. EXSIF is a leading international lessor of intermodaltank containers with a fleet of approximately 75,000 units, primarily serving chemical producers and logistics operators.
Crane Services is a provider of mobile cranes and operators in North America and Australia with a combined fleet of
approximately 1,100 cranes, primarily serving the energy, mining, petrochemical and infrastructure markets.
Medical (formed in 2019 through the acquisition of the Colson Medical Companies) develops, manufactures anddistributes a wide range of innovative medical devices in the extremities fixation, craniomaxillofacial surgery, neurosurgery,biologics, aesthetics and powered instruments markets. The group’s leading-edge medical technology and products are used
globally to help improve patient care and outcomes. Operations are based in the U.S., Europe and China. Business isconducted primarily in North and South America, Europe, Asia and Australia.
Certain Marmon business, including the Rail and Medical groups, are subject to government regulation and oversight.
Marmon has numerous known environmental matters which are subject to on-going monitoring and/or remediation efforts.
Marmon follows all federal, state and local environmental regulations.
Other industrial products
CTB International Corp. (“CTB”), headquartered in Milford, Indiana, is a leading global designer, manufacturer andmarketer of a wide range of agricultural systems and solutions for preserving grain, producing poultry, pigs and eggs, and forprocessing poultry, fish, vegetables and other foods. CTB operates from facilities located around the globe and supports
customers through a worldwide network of independent distributors and dealers.

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CTB competes with a variety of manufacturers and suppliers, many of which offer only a limited number of the
products offered by CTB and four of which offer products across several of CTB’s product lines. Competition is based on theprice, value, reputation, quality and design of the products offered and the customer service provided by distributors, dealers
and manufacturers of the products. CTB’s leading brand names, distribution network, diversified product line, productsupport and high-quality products enable it to compete effectively. CTB manufactures its products primarily from galvanizedsteel, steel wire, stainless steel and polymer materials and supplies of these materials have been sufficient in recent years.
LiquidPower Specialty Products Inc. (“LSPI”), headquartered in Houston, Texas, is a global leader in the science ofdrag reduction application (“DRA”) technology by maximizing the flow potential of pipelines, increasing operational
flexibility and throughput capacity, and efficiencies for customers. LSPI develops innovative flow improver solutions withcustomers in over 20 countries on five continents, treating over 50 million barrels of hydrocarbon liquids per day. LSPI’s
DRA offering is part of a comprehensive, full-service solution that encompasses industry-leading technology, quality
manufacturing, technical support and consulting, a reliable supply chain, injection equipment and field service. LSPI is
subject to foreign, federal, state and local laws to protect the environment and limit manufacturing waste and emissions.
The Scott Fetzer companies are a group of businesses that manufacture, distribute, service and finance a wide variety
of products for residential, industrial and institutional use.
Building Products
ClaytonClayton Homes, Inc. (“Clayton”), headquartered near Knoxville, Tennessee, is a vertically integrated housing company
offering traditional site-built homes and off-site built housing, including modular, manufactured, CrossMod™ and tiny
homes. In 2021, Clayton delivered approximately 50,000 off-site built and 11,000 site-built homes. Clayton also offers homefinancing and insurance products and competes on price, service, location and delivery capabilities.
All Clayton Built® off-site homes are designed, engineered and assembled in the United States. As of December 2021,
off-site backlog was $1.4 billion, up 10% from the prior year. Clayton sells its homes through independent and companyowned home centers, realtors and subdivision channels. Clayton considers its ability to make financing available to retailpurchasers a factor affecting the market acceptance of its off-site built homes. Clayton’s financing programs utilize
proprietary loan underwriting guidelines to evaluate loan applicants, which include ability to repay calculations, including
debt to income limits, and incorporate residual income and credit score requirements.
Since 2015, Clayton’s site-built division, Clayton Properties Group, has expanded through the acquisition of ninebuilders across 14 states with over 300 subdivisions, supplementing the portfolio of housing products offered to customers.
Clayton’s site-builders currently own and control approximately 83,000 homesites, with a home order backlog ofapproximately $2.5 billion.
Historically, access to key inputs such as lumber, steel and resin products has been adequate. During 2021, theavailability and pricing of these and other inputs has been volatile. Input shortages coupled with labor and subcontractor
availability have increased the time to construct a home, constraining our ability to meet current demand.
Clayton’s home building business regularly makes capital and non-capital expenditures with respect to compliancewith federal, state and local environmental regulations, primarily related to erosion control, permitting and stormwater
protection for site-built home subdivisions. The financing business originates and services loans which are federally regulatedby the Consumer Financial Protection Bureau, various state regulatory agencies and reviewed by the U.S. Department of
Housing and Urban Development, the Government National Mortgage Association and government-sponsored enterprises.
Shaw
Shaw Industries Group, Inc. (“Shaw”), headquartered in Dalton, Georgia, is a leading manufacturer and distributor of
carpet and flooring products. Shaw designs and manufactures over 4,100 styles of tufted carpet, wood and resilient flooring
for residential and commercial use under about 30 brand and trade names and under certain private labels. Shaw also
provides project management and installation services. Shaw’s manufacturing operations are fully integrated from theprocessing of raw materials used to make fiber through the finishing of carpet. Shaw manufactures and distributes carpet tile
throughout Europe. Shaw also manufactures or distributes a variety of hardwood, wood plastic composite (WPC), stone
plastic composite (SPC) and vinyl and laminate floor products (“hard surfaces”). Shaw’s soft and hard surface products are
sold in a broad range of patterns, colors and textures. Shaw operates Shaw Sports Turf and Southwest Greens International,
LLC, which provide synthetic sports turf, golf greens and landscape turf products. In 2021, Shaw’s businesses include
Watershed Geosynthetics, LLC, which sells innovative and patented environmental solutions for utility, waste management,
erosion control and mining industries.

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Shaw products are sold wholesale to over 47,000 retailers, distributors and commercial users throughout the UnitedStates, Canada and Mexico and are also exported to various overseas markets. Shaw’s wholesale products are marketed
domestically by over 2,100 salaried and commissioned sales personnel directly to retailers and distributors and to large
national accounts. Shaw’s seven carpet, nine hard surface, one sample full-service distribution facility, three sample satellite
locations and 30 redistribution centers, along with centralized management information systems, enable it to provide promptand efficient delivery of its products to both its retail customers and wholesale distributors.
Substantially all carpet manufactured by Shaw is tufted carpet made from nylon, polypropylene and polyester. In thetufting process, yarn is inserted by multiple needles into a synthetic backing, forming loops, which may be cut or left uncut,
depending on the desired texture or construction. During 2021, Shaw processed approximately 97% of its requirements for
carpet yarn in its own yarn processing facilities. The availability of raw materials is adequate, but costs are impacted bypetro-chemical and natural gas price changes. Raw material cost changes are periodically factored into selling prices tocustomers.
The soft floor covering industry is highly competitive with only a handful of key players domestically where themajority of Shaw’s business occurs. There are numerous manufacturers, domestically and internationally, that are engaged in
hard surface floor covering production, distribution and sales. According to industry estimates, carpet accounts forapproximately 44% of the total United States consumption of all flooring types. The principal competitive measures within
the floor covering industry are quality, style, price and service.
Johns ManvilleJohns Manville Corporation (“JM”), headquartered in Denver, Colorado, is a leading manufacturer and marketer ofpremium-quality products for building insulation, mechanical and industrial insulation, commercial roofing and roof
insulation, as well as fibers and nonwovens for commercial, industrial and residential applications. JM serves markets that
include aerospace, automotive and transportation, air handling, appliance, HVAC, pipe and equipment, filtration,waterproofing, building, flooring, interiors and wind energy. Fiberglass is the basic material in a majority of JM’s products,
although JM also manufactures a significant portion of its products with other materials to satisfy the broader needs of its
customers. Raw materials are generally available in sufficient quantities from various sources for JM to maintain and expand
its current production levels. JM regards its patents and licenses as valuable, however it does not consider any of its
businesses to be materially dependent on any single patent or license. JM operates over 40 manufacturing facilities in North
America and Europe and conducts research and development at its technical center in Littleton, Colorado and at otherfacilities in the U.S. and Europe.
Fiberglass is made from earthen raw materials and recycled glass, together with agents to bind many of its glass fibers.
JM’s products also contain materials other than fiberglass, including various chemical and petrochemical-based materials
used in roofing and other specialized products. JM uses recycled material when available and suitable to satisfy the broader
needs of its customers. The raw materials used in these various products are generally readily available in sufficient quantities
from various sources to maintain and expand its current production levels.
JM identifies and strives to mitigate risk with respect to material applicable laws and regulations, including
environmental laws and regulations. JM’s operations are subject to a variety of federal, state and local environmental laws
and regulations, which regulate or impose liability for the discharge of materials into the air, land and water and govern theuse and disposal of hazardous substances and use of chemical substances. The most relevant of the federal laws are theFederal Clean Air Act, the Clean Water Act, the Toxic Substances Control Act, the Resource Conservation and Recovery Act
and the Comprehensive Environmental Response, Compensation and Liability Act, which are administered by the EPA.
Canadian and European regulatory authorities have also adopted their own environmental laws and regulations. JM
continually monitors new and pending regulations and assesses their potential impact on the business. JM’s capital projects
regularly address environmental compliance and are generally incidental to other capital projects.
JM sells its products through a wide variety of channels including contractors, distributors, retailers, manufacturers andfabricators. JM operates in highly competitive markets, with competitors comprising primarily several large global andnational manufacturers and smaller regional manufacturers. JM holds leadership positions in the key markets that it serves.
JM’s products compete primarily on value, differentiation and customization, and breadth of product line. Sales of JM’s
products are moderately seasonal due to increases in construction activity that typically occur in the second and third quartersof the calendar year. JM sees a marketplace trend in customer purchasing decisions being influenced by the sustainable andenergy efficient attributes of its products, services and operations.
MiTek
MiTek Industries, Inc. (“MiTek”), based in Chesterfield, Missouri, operates in two separate markets: residential andcommercial. MiTek operates worldwide with sales in over 100 countries and with manufacturing facilities and/or
sales/engineering offices located in 21 countries.
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In the residential building market, MiTek is a leading supplier of engineered connector products, construction
hardware, engineering software and services and computer-driven manufacturing machinery to the truss component market ofthe building components industry. MiTek’s primary customers are component manufacturers who manufacture prefabricatedroof and floor trusses and wall panels for the residential building market. MiTek also sells construction hardware tocommercial distributors and do-it-yourself retail stores.
A significant raw material used by MiTek is hot dipped galvanized sheet steel. While supplies are presently adequate,
variations in supply have historically occurred, producing significant variations in cost and availability.
Benjamin Moore
Benjamin Moore & Co. (“Benjamin Moore”), headquartered in Montvale, New Jersey, is one of North America’s
leading manufacturers of premium quality residential, commercial and industrial maintenance coatings. Benjamin Moore iscommitted to innovation and sustainable manufacturing practices. The Benjamin Moore premium portfolio spans the brand’s
flagship paint lines including Aura®, Regal® Select, Ultra Spec®, ben®, ADVANCE®, ARBORCOAT® and more. The
Benjamin Moore diversified brands include specialty and architectural paints from Coronado®, Insl-x® and Lenmar®.
Benjamin Moore coatings are available from its more than 7,500 independently owned and operated paint, decorating andhardware retailers throughout the United States and Canada as well as 75 countries globally. In July 2019, Benjamin Moore
announced the expansion of its relationship with Ace Hardware (“Ace”), through which Benjamin Moore has become thepreferred paint supplier for approximately 3,800 Ace stores, which are included in the count above. Through this agreement,these Ace stores are afforded the opportunity to carry a full line premium assortment of Benjamin Moore products or a
streamlined offering of Regal® Select and ben®, or ben® only branded products. As part of the expansion, Benjamin Moore
assumed responsibility for manufacturing Clark+Kensington® and Royal®, as well as the balance of Ace’s private label
paint brands.
In addition, Benjamin Moore operates an online “pick up in store” program, which allows consumers to place orders
via an e-commerce site or, for national accounts and government agencies, via its customer information center. These orders
may be picked up at the customer’s nearest retailer or delivered. For national accounts, drop-ship orders can be fulfilled by
Benjamin Moore if a minimum gallon threshold is met.
Benjamin Moore competes with numerous manufacturers, distributors and paint, coatings and related products
retailers. Product quality, product innovation, breadth of product line, technical expertise, service and price determine thecompetitive advantage. Competitors include other paint and decorating stores, mass merchandisers, home centers,
independent hardware stores, hardware chains and manufacturer-operated direct outlets, such as Sherwin-Williams Company,
PPG Industries, Inc., The Valspar Corporation, The Home Depot, Inc. and Lowe’s Companies, Inc.
The most significant raw materials in Benjamin Moore products are titanium dioxide, monomers, polymers andpigments. Historically, these materials have been generally available, with pricing and availability subject to fluctuation. In
2021, raw material supply constraints and increased customer demand for products prevailed and disrupted Benjamin
Moore’s ability to build inventory. A major winter storm that impacted the Gulf Coast region of the United States in Februaryof 2021 caused substantial supply chain disruptions for Benjamin Moore, which contributed to significant inflation in
manufacturing costs.
Benjamin Moore undertakes to comply with applicable regulations relating to protection of the environment andworkers’ safety and products meet or exceed environmental standards. Benjamin Moore has certain known pastenvironmental matters, which are subject to on-going monitoring and/or remediation efforts.
Acme
Acme Brick Company (“Acme”), headquartered in Fort Worth, Texas, manufactures and distributes clay bricks (Acme
Brick®) and concrete block (Featherlite). In addition, Acme distributes numerous other building products of othermanufacturers, including floor and wall tile, wood flooring and other masonry products. Products are sold primarily in theSouth Central and Southeastern United States through company-operated sales offices. Acme distributes products primarily
to homebuilders and masonry and general contractors.
Over the past three years, Acme closed multiple manufacturing and sales facilities. Acme operates 12 clay brickmanufacturing sites located in four states, three concrete block facilities and a quarrying operation all located in Texas. The
demand for Acme’s products is seasonal, with higher sales in the warmer weather months, and is subject to the level ofconstruction activity, which is cyclical. Acme also owns and leases properties and mineral rights that supply raw materials
used in many of its manufactured products. Acme’s raw materials supply is believed to be adequate.

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The brick industry is subject to the EPA Maximum Achievable Control Technology Standards (“MACT”). As required
under the 1990 Clean Air Act, the EPA developed a list of source categories that require the development of National
Emission Standards for Hazardous Air Pollutants, which are also referred to as MACT Standards (“Rule”). Key elements of
the MACT Rule include emission limits established for certain hazardous air pollutants and acidic gases. Acme’s brick plants
are in compliance with the current Rule.
Consumer Products
ApparelFruit of the Loom Inc. (“FOL”), headquartered in Bowling Green, Kentucky, is primarily a manufacturer anddistributor of basic apparel, underwear, casualwear, athletic apparel and sports equipment. Products under the Fruit of the
Loom® and JERZEES® labels are primarily sold in the mass merchandise, mid-tier chains and wholesale markets. In the
Vanity Fair Brands product line, Vassarette®, Curvation® and Radiant® by Vanity Fair are sold in the mass merchandise
market, while Vanity Fair® and Lily of France® products are sold to mid-tier chains and department stores. FOL also markets
and sells apparel, sports equipment and balls to team dealers and athletic apparel, sports equipment and balls to sporting
goods retailers under the Russell Athletic® and Spalding® brands. Additionally, Spalding® markets and sells balls and sports
equipment in the mass merchandise market and dollar store channels. In 2021, a significant portion of FOL’s sales were toWalmart Inc.(“Walmart”).
FOL generally performs its own knitting, cloth finishing, cutting, sewing and packaging for apparel. For the North
American market, which is FOL’s predominant sales region, cloth manufacturing is primarily performed in Honduras. Laborintensive cutting, sewing and packaging operations are in Central America, the Caribbean and Vietnam. For the European
market, products are either sourced from third-party contractors in Europe or Asia or sewn in Morocco from textiles
internally produced in Morocco. Bras, athletic equipment, sporting goods and other athletic apparel lines are generally
sourced from third-party contractors located primarily in Asia.
U.S.-grown cotton fiber and U.S.-manufactured polyester fiber are the main raw materials used in manufacturing
FOL’s products. Historically, fibers have been purchased from a limited number of third parties. In 2015, FOL entered into
an agreement with one key supplier to provide the majority of its yarn spinning/raw material conversion services. As a result,yarn production was primarily with one supplier. Supply chain issues related to the COVID pandemic including labor
shortage at suppliers, yarn shortages, and price inflation in raw materials and freight resulted in FOL utilizing alternative
sources of raw materials and yarn in 2021. Further, FOL has contracted with an additional supplier for a significant portion of
FOL’s yarn spinning/raw material conversion services that is scheduled to begin in July 2022. If relationships with supplierscannot be maintained or delays occur in obtaining alternative sources of supply, production and operating results can beadversely affected. FOL’s markets are highly competitive, consisting of many domestic and foreign manufacturers anddistributors. Competition is generally based upon product features, quality, customer service and price.
Garan Incorporated (“Garan”), headquartered in New York, New York designs, manufactures, imports and sells
apparel primarily for children, including boys, girls, toddlers and infants. Products are sold under its own trademarks
Garanimals® and 365 Kids from Garanimals®, as well as customer private label brands. Garan conducts its business throughoperating subsidiaries located in the United States, Central America and Asia. Garan’s products are sold through its
distribution centers in the United States. Fechheimer Brothers Company (“Fechheimers”) manufactures and distributes
uniforms, principally for the public service and safety markets, including police, fire, postal and military markets.
Fechheimers is based in Cincinnati, Ohio.
The BH Shoe Holdings Group, headquartered in Greenwich, Connecticut, manufactures and distributes work, rugged
outdoor and casual shoes and western-style footwear under a number of brand names, including Justin, Tony Lama®,
Chippewa®, BØRN®, B•Ø•C®, Carolina®, EuroSofft, Söfft, Double-H Boots®, Nursemates® and Comfortiva®. Brooks Sports,
Inc., headquartered in Seattle, Washington, markets and sells performance running footwear and apparel to specialty andnational retailers and directly to consumers under the Brooks® brand. A significant volume of the shoes sold by Berkshire’s
shoe businesses are manufactured or purchased from sources located outside the United States. Products are sold worldwide
through a variety of channels including department stores, footwear chains, specialty stores, catalogs and the Internet, as wellas through company-owned retail stores.

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Other consumer products
Forest River, Inc. (“Forest River”) is a manufacturer of recreational vehicles (“RV”), utility cargo trailers, buses andpontoon boats, headquartered in Elkhart, Indiana with products sold in the United States and Canada through an independent
dealer network. Forest River has numerous manufacturing facilities located in six states and is a leading manufacturer of RVs
with numerous brand names, including Forest River, Coachmen RV and Prime Time. Utility cargo trailers are sold under avariety of brand names. Buses are sold under several brand names, including Starcraft Bus. Pontoon boats are sold under theBerkshire, South Bay and Trifecta brand names. The RV industry is very competitive. Competition is based primarily on
price, design, quality and service. The industry has consolidated over the past several years and is currently concentrated in a
few companies, the largest of which had a market share of approximately 41% based on industry data as of December 2021.
Forest River held a market share of approximately 36% at that time.
Forest River is subject to regulations of the National Traffic and Motor Vehicle Safety Act, the safety standards forrecreational vehicles established by the U.S. Department of Transportation and similar laws and regulations issued by the
Canadian government. Forest River is a member of the Recreational Vehicle Industry Association, a voluntary association ofrecreational vehicle manufacturers which promotes safety standards for recreational vehicles. Forest River believes its
products comply in all material respects to the standards that govern its products.
The Duracell Company (“Duracell”), headquartered in Chicago, Illinois, is a leading manufacturer of high-performance
alkaline batteries. Duracell manufactures batteries in the U.S., Europe and China and provides a network of worldwide sales
and distribution centers. Costco and Walmart are significant customers, representing approximately 30% of Duracell’s annual
revenue. There are several competitors in the battery manufacturing market with Duracell holding an approximately 29%
market share of the global alkaline battery market. Management believes there are currently sufficient sources of raw
materials available, which are primarily steel, zinc, manganese and nickel-based chemistries.
Albecca Inc. (“Albecca”), headquartered in Suwanee, Georgia, operates in the U.S., Canada and 12 other countries,
with products primarily under the Larson-Juhl® name. Albecca designs, manufactures and distributes a complete line of highquality, branded custom framing products, including wood and metal moulding, matboard, foamboard, glass and framing
supplies. Complementary to its framing products, Albecca offers art printing and fulfillment services.
Richline Group, Inc., headquartered in New York, New York, operates five strategic business units: Richline Jewelry,
Richline Digital, LeachGarner, Rio Grande and Inverness. Each business unit is a manufacturer and/or distributor of precious
metal, non-precious metal, diamond and gem products to specific target markets including large jewelry chains, department
stores, shopping networks, mass merchandisers, e-commerce retailers and artisans plus worldwide manufacturers andwholesalers and the medical, electronics and aerospace industries.
Service and Retailing Businesses
Service Businesses
Berkshire’s service businesses provide grocery and foodservice distribution, professional aviation training programs,
shared aircraft ownership programs and distribution of electronic components. Other service businesses include franchisingand servicing of quick service restaurants, media businesses (television and information distribution), as well as logistics
businesses. Berkshire’s service businesses employed approximately 48,500 people at the end of 2021. Information
concerning these activities follows.
McLaneMcLane Company, Inc. (“McLane”) provides wholesale distribution services in all 50 states to customers that include
convenience stores, discount retailers, wholesale clubs, drug stores, military bases, quick service restaurants and casual
dining restaurants. McLane provides wholesale distribution services to Walmart, which accounted for approximately 16.5%
of McLane’s revenues in 2021. McLane’s other significant customers include 7-Eleven (approximately 13.9% of revenues)
and Yum! Brands, (approximately 11.5% of revenues). McLane’s business model is based on a high volume of sales, rapid
inventory turnover and stringent expense controls. Operations are currently divided into three business units: grocery
distribution, foodservice distribution and beverage distribution.
McLane’s grocery distribution unit, based in Temple, Texas, maintains a dominant market share within theconvenience store industry and serves most of the national convenience store chains and major oil company retail outlets.
Grocery operations provide products to approximately 48,600 retail locations nationwide, including Walmart. McLane’s
grocery distribution unit operates 25 distribution facilities in 20 states.
McLane’s foodservice distribution unit, based in Carrollton, Texas, focuses on serving the quick service and casual
dining restaurant industry with high quality, timely-delivered products. Operations are conducted through 47 facilities in 22
states. The foodservice distribution unit services approximately 34,000 restaurants nationwide.

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Through its subsidiaries, McLane also operates wholesale distributors of distilled spirits, wine and beer. The beverage
unit operates as Empire Distributors and operations are conducted through 14 distribution centers in Georgia, North Carolina,
Tennessee and Colorado. Empire Distributors services approximately 26,500 retail locations in the southeastern United States
and Colorado.
FlightSafety
FlightSafety International Inc. (“FlightSafety”) is an industry leading provider of professional aviation training services
and flight simulation products. FlightSafety and FlightSafety Textron Aviation Training, a joint venture with Textron whichbegan operations in 2019, provide high technology training to pilots, aircraft maintenance technicians, flight attendants anddispatchers who operate and support a wide variety of business, commercial and military aircraft. The training is provided
using a large fleet of advanced full flight simulators at learning centers and training locations in the United States, Australia,
Brazil, Canada, France, Japan, Norway, South Africa and the United Kingdom. Compliance with applicable environmental
regulations is an inherent requirement to operate the facilities. The vast majority of the instructors, training programs andflight simulators are qualified by the United States Federal Aviation Administration (“FAA”) and other aviation regulatory
agencies around the world.
FlightSafety is also a leader in the design and manufacture of full flight simulators, visual systems, displays and otheradvanced technology training devices. This equipment is used to support FlightSafety training programs and is offered forsale to airlines and government and military organizations around the world. Manufacturing facilities are located in
Oklahoma, Missouri and Texas. FlightSafety strives to maintain and manufacture simulators and develop courseware usingstate-of-the-art technology and invests in research and development as it builds new equipment and training programs.
NetJets
NetJets Inc. (“NetJets”) is the world’s leading provider of shared ownership programs for general aviation aircraft.
NetJets’ global headquarters is located in Columbus, Ohio, with most of its logistical and flight operations based at John
Glenn Columbus International Airport. NetJets’ European operations are based in Lisbon, Portugal. The shared ownershipconcept is designed to meet the travel needs of customers who require the scale, flexibility and access of a large fleet thatwhole aircraft ownership cannot deliver. In addition, shared ownership programs are available for corporate flightdepartments seeking to outsource their general aviation needs or add capacity for peak periods and for others that previously
chartered aircraft.
With a focus on safety and service, NetJets’ programs are designed to offer customers guaranteed availability ofaircraft, predictable operating costs and increased liquidity. NetJets’ shared aircraft ownership programs permit customers toacquire a specific percentage of a certain aircraft type and allows customers to utilize the aircraft for a specified number offlight hours annually. In addition, NetJets offers prepaid flight cards and other aviation solutions and services for aircraft
management, customized aircraft sales and acquisition, ground support and flight operation services under a number ofprograms including NetJets Shares™, NetJets Leases™ and the NetJets Card Program™.
NetJets is subject to the rules and regulations of the FAA, the Portuguese Civil Aviation Authority and the European
Union Aviation Safety Agency. Regulations address aircraft registration, maintenance requirements, pilot qualifications andairport operations, including flight planning and scheduling as well as security issues and other matters. NetJets maintains acomprehensive training and development program in compliance with regulatory requirements for pilots, flight attendants,
maintenance mechanics, and other flight operations specialists.
TTI
TTI, Inc. (“TTI”), headquartered in Fort Worth, Texas, is a global specialty distributor of passive, interconnect,
electromechanical, discrete, and semiconductor components used by customers in the manufacturing and assembling ofelectronic products. TTI’s customer base includes original equipment manufacturers, electronic manufacturing services,original design manufacturers and military and commercial customers, as well as design and system engineers. TTI’s
distribution agreements with the industry’s leading suppliers allow it to uniquely leverage its product cost and to expand its
business by providing new lines and products to its customers. TTI operates sales offices and distribution centers from morethan 100 locations throughout North America, South America, Europe, Asia and Israel.
TTI services a variety of industries including telecommunications, medical devices, computers and office equipment,
military/aerospace, automotive and industrial electronics. TTI’s core customers include businesses in the design throughproduction stages in the electronic component supply chain, which supports its high-volume business, and its Mouser
subsidiary, which supports a broader base of customers with lower volume purchases through internet-based marketing.

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Other services
XTRA Corporation (“XTRA”), headquartered in St. Louis, Missouri, is a leading transportation equipment lessor
operating under the XTRA Lease® brand name. XTRA manages a diverse fleet of approximately 87,000 units located at 47
facilities throughout the United States. The fleet includes over-the-road and storage trailers, chassis, temperature-controlledvans and flatbed trailers. XTRA is one of the largest lessors (in terms of units available) of over-the-road trailers in North
America. Transportation equipment customers lease equipment to cover cyclical, seasonal and geographic needs and as a
substitute for purchasing equipment. Therefore, as a provider of marginal capacity to its customers, XTRA’s utilization rates
and operating results tend to be cyclical. In addition, transportation providers often use leasing to maximize their asset
utilization and reduce capital expenditures. By maintaining a large fleet, XTRA is able to provide customers with a broad
selection of equipment and quick response times.
International Dairy Queen Inc. develops and services a worldwide system of over 7,000 franchised restaurants
operating primarily under the names DQ Grill and Chill®, Dairy Queen® and Orange Julius® that offer various dairy desserts,
beverages, prepared foods and blended fruit drinks. Business Wire Inc. (“Business Wire”) transmits full-text news releases,
regulatory filings, photos and other multimedia content to journalists, financial professionals, investor services, regulatory
authorities and the general public. Releases are distributed globally via Business Wire’s patented NX network. CORT
Business Services Corporation (“CORT”) is a leading national provider of rental furniture and related services in the “rent-torent” segment of the furniture rental industry. CORT’s primary revenue streams include furniture rental to individuals,
businesses, government agencies, the trade show and events industry and retail sales of new and used furniture. WPLG, Inc.
is an ABC affiliate broadcast station in Miami, Florida and Charter Brokerage Holdings Corp. is a leading non-asset based
third party logistics provider to the petroleum and chemical industries. Until March 2020, other services included thenewspaper publishing businesses conducted through The Buffalo News and BH Media Group, Inc. These operations weresold in 2020.
Retailing Businesses
Berkshire’s retailing businesses include automotive, home furnishings and several other operations that sell various
consumer products. Berkshire’s retailing businesses employed approximately 26,000 people at the end of 2021. Information
regarding each of these operations follows.
Berkshire Hathaway Automotive
Berkshire Hathaway Automotive, Inc. (“BHA”) and its affiliates is one of the largest automotive retailers in the UnitedStates, currently operating 105 new vehicle franchises through 82 dealerships located primarily in major metropolitan
markets in the United States. The dealerships sell new and used vehicles, vehicle maintenance and repair services, extended
service contracts, vehicle protection products and other aftermarket products. BHA also arranges financing for its customers
through third-party lenders. BHA operates 28 collision centers directly connected to the dealerships’ operations and owns andoperates two auto auctions and a fluid maintenance products distribution company.
Dealership operations are highly concentrated in the Arizona and Texas markets, with approximately 75% of
dealership-related revenues derived from sales in these markets. BHA currently maintains franchise agreements with 27
different vehicle manufacturers, although it derives a significant portion of its revenue from the Toyota/Lexus, General
Motors, Ford/Lincoln, Nissan/Infiniti and Honda/Acura brands. Approximately 90% of BHA’s annual revenues are fromdealerships representing these manufacturers.
The retail automotive industry is highly competitive. BHA faces competition from other large public and private
dealership groups, as well as individual franchised dealerships and competition via the Internet. Given the pricing
transparency available via the Internet, and the fact that franchised dealers acquire vehicles from the manufacturers on thesame terms irrespective of volume, the location and quality of the dealership facility, customer service and transaction speed
are key differentiators in attracting customers.
BHA’s overall relationships with the automobile manufacturers are governed by framework agreements. The
framework agreements contain provisions relating to the management, operation, acquisition and ownership structure of
BHA’s dealerships. Failure to meet the terms of these agreements could adversely impact BHA’s ability to acquire additional
dealerships representing those manufacturers. Additionally, these agreements contain limitations on the number ofdealerships from a specific manufacturer that may be owned by BHA.

K-21

Individual dealerships operate under franchise agreements with the manufacturer, which grants the dealership entity anon-exclusive right to sell the manufacturer’s brand of vehicles and offer related parts and service within a specified market
area, as well as the right to use the manufacturer’s trademarks. The agreements contain various requirements and restrictions
related to the management and operation of the franchised dealership and provide for termination of the agreement by the
manufacturer or non-renewal for a variety of causes. States generally have automotive dealership franchise laws that provide
substantial protection to the franchisee, and it is difficult for a manufacturer to terminate or not renew a franchise agreement
outside of bankruptcy or with “good cause” under the applicable state franchise law.
BHA also develops, underwrites and administers various vehicle protection plans as well as life and accident andhealth insurance plans sold to consumers through BHA’s dealerships and third-party dealerships. BHA also develops
proprietary training programs and materials and provides ongoing monitoring and training of the dealership’s finance andinsurance personnel.
Home furnishings retailing
The home furnishings businesses consist of Nebraska Furniture Mart Inc. (“NFM”), R.C. Willey Home Furnishings(“R.C. Willey”), Star Furniture Company (“Star”) and Jordan’s Furniture, Inc. (“Jordan’s”). These businesses offer a wide
selection of furniture, bedding and accessories. In addition, NFM and R.C. Willey sell a full line of major household
appliances, electronics, computers and other home furnishings and offer customer financing to complement their retail
operations. An important feature of each of these businesses is their ability to control costs and to produce high businessvolume by offering significant value to their customers.
NFM operates its business from four retail complexes with almost 4.5 million square feet of retail, warehouse andadministrative facilities located in Omaha, Nebraska, Clive, Iowa, Kansas City, Kansas and The Colony, Texas. NFM also
owns Homemakers Furniture located in Urbandale, Iowa, which has approximately 600,000 square feet of retail, warehouseand administrative space. NFM is the largest furniture retailer in each of these markets. R.C. Willey, based in Salt Lake City,
Utah, currently operates eleven full-line retail home furnishings stores and three distribution centers. These facilities include
approximately 1.5 million square feet of retail space with five stores located in Utah, one store in Meridian, Idaho, threestores in Nevada (Las Vegas and Reno) and two stores in the Sacramento, California area.
Jordan’s operates a retail furniture business from seven locations with approximately 890,000 square feet of retailspace in stores located in Massachusetts, New Hampshire, Rhode Island, Maine and Connecticut. The retail stores aresupported by an 800,000 square foot distribution center in Taunton, Massachusetts. Jordan’s is the largest furniture retailer,
as measured by sales, in Massachusetts, Maine and New Hampshire. Jordan’s is well known in its markets for its unique store
arrangements and advertising campaigns. Star has operated home furnishings retail stores in Texas for many years. Star’s
retail facilities currently include about 700,000 square feet of retail space in 10 locations in Texas, including seven in
Houston.
Other retailing
Borsheim Jewelry Company, Inc. (“Borsheims”) operates from a single store in Omaha, Nebraska. Borsheims is ahigh-volume retailer of fine jewelry, watches, crystal, china, stemware, flatware, gifts and collectibles. Helzberg’s Diamond
Shops, LLC. (“Helzberg”) is based in North Kansas City, Missouri, and operates a chain of 173 retail jewelry stores in 34
states, which includes approximately 400,000 square feet of retail space. Helzberg’s stores are located in malls, lifestyle
centers, power strip centers and outlet malls, and all stores operate under the name Helzberg Diamonds® or Helzberg
Diamonds Outlet®. The Ben Bridge Corporation (“Ben Bridge Jeweler”), based in Seattle, Washington, operates 74 retailjewelry stores under three different brand names, located primarily in major shopping malls in nine western states and in
British Columbia, Canada. Thirty-five of its retail locations are upscale jewelry stores selling loose diamonds, finishedjewelry and high-end timepieces. Thirty-eight of its retail locations are concept stores operating under a franchise agreementthat sell only Pandora jewelry. One store is a Breitling concept store, selling only Breitling timepieces.
See’s Candy Shops, Incorporated (“See’s”) produces boxed chocolates and other confectionery products with anemphasis on quality and distinctiveness in two large kitchens in Los Angeles and South San Francisco and a facility in
Burlingame, California. See’s operates approximately 250 retail and volume saving stores located mainly in California andother Western states, as well as over 125 seasonal locations. See’s revenues are highly seasonal with approximately half of its
annual revenues earned in the fourth quarter.
The Pampered Chef, Ltd. (“Pampered Chef”) is a premier direct seller of distinctive high-quality kitchenware productswith sales and operations in the United States, Canada, Germany, Austria and France and operations in China. Pampered
Chef’s product portfolio consists of approximately 420 Pampered Chef® branded kitchenware items in categories ranging
from stoneware and cutlery to grilling and entertaining. Pampered Chef’s products are available through its sales force ofindependent cooking consultants and online.

K-22

Oriental Trading Company (“OTC”) is a leading multi-channel retailer and online destination for fun-value-priced
party supplies, seasonal products, arts and crafts, toys and novelties, school supplies, educational games and patient
giveaways. OTC, headquartered in Omaha, Nebraska, serves a broad base of nearly four million customers annually,
including consumers, schools, churches, non-profit organizations, medical and dental offices, online marketplaces and otherbusinesses. OTC offers a unique assortment of over 80,000 fun products emphasizing proprietary designs. OTC operates both
direct-to-consumer and business-to-business brands including Oriental Trading®, Fun Express®, MindWare®, SmileMakers®,
Morris Costumes® and HalloweenExpress.com® and utilizes digital and print marketing along with dedicated sales teams todrive traffic and industry-leading customer satisfaction.
Detlev Louis Motorrad (“Louis”), headquartered in Hamburg, Germany, is a leading retailer of motorcycle apparel andequipment in Europe. Louis carries over 32,000 different products from more than 600 manufacturers, primarily covering theclothing, technical equipment and leisure markets. Louis has over 80 stores in Germany, Austria, Switzerland and theNetherlands and also sells via the Internet throughout most of Europe.
Additional information with respect to Berkshire’s businesses
Revenue, earnings before taxes and identifiable assets attributable to Berkshire’s reportable business segments areincluded in Note 25 to Berkshire’s Consolidated Financial Statements contained in Item 8, Financial Statements andSupplementary Data. Additional information regarding Berkshire’s investments in fixed maturity and equity securities is
included in Notes 3 and 4, respectively, to Berkshire’s Consolidated Financial Statements.
Berkshire owns 26.6% of the outstanding common stock of The Kraft Heinz Company (“Kraft Heinz”). Kraft Heinz is
one of the largest food and beverage companies in the world, with sales in numerous countries within developed andemerging markets and territories. Kraft Heinz manufactures and markets food and beverage products, including condiments
and sauces, cheese and dairy meals, meats, refreshment beverages, coffee and other grocery products, throughout the world,
under a diverse mix of iconic and emerging brands. Berkshire subsidiaries also own a 50% joint venture interest in Berkadia
Commercial Mortgage LLC, a 38.6% interest in Pilot Travel Centers LLC, a 50% joint venture interest in ElectricTransmission Texas, LLC and a 50% noncontrolling interest in Iroquois Gas Transmission System L.P. Information
concerning these investments is included in Note 5 to Berkshire’s Consolidated Financial Statements.
Berkshire maintains a website (http://www.berkshirehathaway.com) where its annual reports, certain corporate
governance documents, press releases, interim shareholder reports and links to its subsidiaries’ websites can be found.
Berkshire’s periodic reports filed with the SEC, which include Form 10-K, Form 10-Q, Form 8-K and amendments thereto,
may be accessed by the public free of charge from the SEC and through Berkshire. Electronic copies of these reports can beaccessed at the SEC’s website (http://www.sec.gov) and indirectly through Berkshire’s website(http://www.berkshirehathaway.com). Copies of these reports may also be obtained, free of charge, upon written request to:
Berkshire Hathaway Inc., 3555 Farnam Street, Omaha, NE 68131, Attn: Corporate Secretary.

K-23

Item 1A. Risk Factors
Berkshire and its subsidiaries (referred to herein as “we,” “us,” “our” or similar expressions) are subject to certain risks
and uncertainties in its business operations which are described below. The risks and uncertainties described below are notthe only risks we face. Additional risks and uncertainties that are presently unknown or are currently deemed immaterial may
also impair our business operations.
General Business Risks
Terrorist acts could hurt our operating businesses.
A cyber, biological, nuclear or chemical attack could produce significant losses to our worldwide operations. Our
business operations could be adversely affected from such acts through the loss of human resources or destruction of
production facilities and information systems. We share the risk with all businesses.
Cyber security risks
We rely on technology in virtually all aspects of our business. Like those of many large businesses, certain of our
information systems have been subject to computer viruses, malicious codes, unauthorized access, phishing efforts, denial-ofservice attacks and other cyber-attacks and we expect to be subject to similar attacks in the future as such attacks become
more sophisticated and frequent. A significant disruption or failure of our technology systems could result in service
interruptions, safety failures, security events, regulatory compliance failures, an inability to protect information and assets
against unauthorized users and other operational difficulties. Attacks perpetrated against our systems could result in loss ofassets and critical information and expose us to remediation costs and reputational damage.
Although we have taken steps intended to mitigate these risks, including business continuity planning, disasterrecovery planning and business impact analysis, a significant disruption or cyber intrusion at one or more of our significant
operations could adversely affect our results of operations, financial condition and liquidity. Additionally, if we are unable toacquire, develop, implement, adopt or protect rights around new technology, we may suffer a competitive disadvantage,
which could also have an adverse effect on our results of operations, financial condition and/or liquidity.
Cyber-attacks could further adversely affect our ability to operate facilities, information technology and businesssystems or compromise confidential customer and employee information. Political, economic, social or financial market
instability or damage to or interference with our operating assets, customers or suppliers from cyber-attacks may result inbusiness interruptions, lost revenues, higher commodity prices, disruption in fuel supplies, lower energy consumption,
unstable markets, increased security, repair or other costs, or may materially adversely affect us in ways that cannot be
predicted at this time. Any of these risks could materially affect our consolidated financial results. Furthermore, instability inthe financial markets resulting from terrorism, sustained or significant cyber-attacks or war could also have a material
adverse effect on our ability to raise capital. We share these risks with all businesses.
We are dependent on a few key people for our major investment and capital allocation decisions.
Major investment decisions and all major capital allocation decisions are made by Warren E. Buffett, Chairman of theBoard of Directors and Chief Executive Officer, age 91, in consultation with Charles T. Munger, Vice Chairman of the Boardof Directors, age 98. In 2018, Berkshire’s Board of Directors appointed Mr. Gregory Abel as Vice Chairman of Berkshire’s
non-insurance operations and Mr. Ajit Jain as Vice Chairman of Berkshire’s insurance operations. Mr. Abel and Mr. Jain
each report directly to Mr. Buffett. Mr. Buffett continues to be responsible for major capital allocation and investment
decisions.
If for any reason the services of our key personnel, particularly Mr. Buffett, were to become unavailable, there could bea material adverse effect on our operations. Should a replacement for Mr. Buffett be needed currently, Berkshire’s Board of
Directors has agreed that Mr. Abel should replace Mr. Buffett. The Board continually monitors this risk and could alter its
current view regarding a replacement for Mr. Buffett in the future. We believe that the Board’s succession plan, together withthe outstanding managers running our numerous and highly diversified operating units helps to mitigate this risk.

K-24

We need qualified personnel to manage and operate our various businesses.
In our decentralized business model, we need qualified and competent management to direct day-to-day businessactivities of our operating subsidiaries and to manage changes in future business operations due to changing business orregulatory environments. Our operating subsidiaries also need qualified and competent personnel in executing their businessplans and serving their customers, suppliers and other stakeholders. Our inability to recruit and retain qualified andcompetent managers and personnel could negatively affect the operating results, financial condition and liquidity of our
subsidiaries and Berkshire as a whole.
Investments are unusually concentrated in equity securities and fair values are subject to loss in value.
We concentrate a high percentage of the equity security investments of our insurance subsidiaries in a relatively small
number of equity securities. A significant decline in the fair values of our larger investments in equity securities may produce
a material decline in our consolidated shareholders’ equity and our consolidated earnings.
Since a large percentage of our equity securities are held by our insurance subsidiaries, significant decreases in the fairvalues of these investments will produce significant declines in the statutory surplus of our insurance business. Our large
statutory surplus is a competitive advantage, and a long-term material decline could have an adverse effect on our claimspaying ability ratings and our ability to write new insurance business thus potentially reducing our future underwriting
profits.
Competition and technology may erode our business franchises and result in lower earnings.
Each of our operating businesses face intense competition within markets in which they operate. While we manage ourbusinesses with the objective of achieving long-term sustainable growth by developing and strengthening competitive
advantages, many factors, including technological changes, may erode or prevent the strengthening of competitive
advantages. Accordingly, our future operating results will depend to some degree on our operating units successfully
protecting and enhancing their competitive advantages. If our operating businesses are unsuccessful in these efforts, ourperiodic operating results in the future may decline.
Unfavorable general economic conditions may significantly reduce our operating earnings and impair our ability toaccess capital markets at a reasonable cost.
Our operating businesses are subject to normal economic cycles affecting the general economy or the specificindustries in which they operate. Significant deteriorations of economic conditions over a prolonged period could produce amaterial adverse effect on one or more of our significant operations. In addition, our utilities and energy businesses and ourrailroad business regularly utilize debt as a component of their capital structures and depend on having access to borrowed
funds through the capital markets at reasonable rates. To the extent that access to the capital markets is restricted or the costof funding increases, these operations could be adversely affected.
Epidemics, pandemics or other outbreaks, including COVID-19, could hurt our operating businesses.
The outbreak of COVID-19 has adversely affected, and in the future it or other epidemics, pandemics or outbreaks may
adversely affect, our operations, including our equity securities portfolio. This is or may be due to closures or restrictions
requested or mandated by governmental authorities, disruption to supply chains and workforce, reduction of demand for our
products and services, credit losses when customers and other counterparties fail to satisfy their obligations to us, andvolatility in global equity securities markets, among other factors. We share most of these risks with all businesses.
Regulatory changes may adversely impact our future operating results.
Over time, in response to financial markets crises, global economic recessions, and social and environmental issues,
regulatory initiatives were adopted in the United States and elsewhere. Such initiatives addressed for example, the regulationof banks and other major financial institutions, products and environmental and global-warming matters. These initiatives
impact all of our businesses, albeit in varying ways. Increased regulatory compliance costs could have a significant negative
impact on our operating businesses, as well as on the businesses in which we have a significant, but not controlling economic
interests. We cannot predict whether such initiatives will have a material adverse impact on our consolidated financial
position, results of operations and/or cash flows.
Data privacy regulations have recently been enacted in various jurisdictions in the U.S. and throughout the world.
These regulations address numerous aspects related to the security of personal information that is stored in our information
systems, networks and facilities. Failure to comply with these regulations could result in reputational damage and significant
penalties.

K-25

Risks unique to our regulated businesses
Our tolerance for risk in our insurance businesses may result in significant underwriting losses.
When properly paid for the risk assumed, we have been and will continue to be willing to assume more risk from asingle event than any other insurer has knowingly assumed. Accordingly, we could incur a significant loss from a single
catastrophe event resulting from a natural disaster or man-made catastrophes such as terrorism or cyber-attacks. We employ
various disciplined underwriting practices intended to mitigate potential losses and attempt to take into account all possible
correlations and avoid writing groups of policies from which pre-tax losses from a single catastrophe event might aggregate
above $10 billion. However, despite our efforts, it is possible that losses could manifest in ways that we do not anticipate andthat our risk mitigation strategies are not designed to address. Additionally, various provisions of our policies, such as
limitations or exclusions from coverage, negotiated to limit our risks, may not be enforceable in the manner we intend. Our
tolerance for significant insurance losses may result in lower reported earnings in a future period.
The degree of estimation error inherent in the process of estimating property and casualty insurance loss reserves
may result in significant underwriting losses.
The principal cost associated with the property and casualty insurance business is claims. In writing property andcasualty insurance policies, we receive premiums today and promise to pay covered losses in the future. However, it will takedecades before all claims that have occurred as of any given balance sheet date will be reported and settled. Although we
believe that liabilities for unpaid losses are adequate, we will not know whether these liabilities or the premiums charged forthe coverages provided were sufficient until well after the balance sheet date. Estimating insurance claim costs is inherently
imprecise. Our estimated unpaid losses arising under contracts covering property and casualty insurance risks are large ($125billion at December 31, 2021), and a small percentage increase to those liabilities can result in materially lower reported
earnings.
Climate change may impact our businesses.
Climate change could cause increases in hurricanes, floods, wildfires, and other risks that could produce losses
affecting our businesses. Also, failure to comply with new or existing regulations or reinterpretations of existing regulations
relating to climate change could have a significant adverse effect on our financial results.
Changes in regulations and regulatory actions can adversely affect our operating results and our ability to allocate
capital.
Our insurance businesses are subject to regulation in the jurisdictions in which we operate. Such regulations may relate
to among other things, the types of business that can be written, the rates that can be charged for coverage, the level of capitalthat must be maintained, and restrictions on the types and size of investments that can be made. Regulations may also restrict
the timing and amount of dividend payments to Berkshire by these businesses. U.S. state insurance regulators andinternational insurance regulators are also actively developing various regulatory mechanisms to address the regulation oflarge internationally active insurance groups, including regulations concerning group capital, liquidity, governance and risk
management. Accordingly, changes in regulations related to these or other matters or regulatory actions imposing restrictions
on our insurance businesses may adversely impact our results of operations and restrict our ability to allocate capital.
Our railroad business conducted through BNSF is also subject to a significant number of laws and regulations withrespect to rates and practices, taxes, railroad operations and a variety of health, safety, labor, environmental and othermatters. Failure to comply with applicable laws and regulations could have a material adverse effect on BNSF’s business.
Governments may change the legislative and/or regulatory framework within which BNSF operates, without providing any
recourse for any adverse effects that the change may have on the business. Complying with legislative and regulatory changes
may pose significant operating and implementation risks and require significant capital expenditures.
BNSF derives significant amounts of revenue from the transportation of energy-related commodities, particularly coal.
To the extent that changes in government policies limit or restrict the usage of coal as a source of fuel in generating
electricity or alternate fuels, such as natural gas, or displace coal on a competitive basis, revenues and earnings could be
adversely affected. As a common carrier, BNSF is also required to transport toxic inhalation hazard chemicals and otherhazardous materials. A release of hazardous materials could expose BNSF to significant claims, losses, penalties andenvironmental remediation obligations. Changes in the regulation of the rail industry could negatively impact BNSF’s ability
to determine prices for rail services and to make capital improvements to its rail network, resulting in an adverse effect on our
results of operations, financial condition and/or liquidity.

K-26

Our utilities and energy businesses operated under BHE are highly regulated by numerous federal, state, local andforeign governmental authorities in the jurisdictions in which they operate. These laws and regulations are complex, dynamic
and subject to new interpretations or change. Regulations affect almost every aspect of our utilities and energy businesses.
Regulations broadly apply and may limit management’s ability to independently make and implement decisions regarding
numerous matters including: acquiring businesses; constructing, acquiring, disposing or retiring of operating assets; operating
and maintaining generating facilities and transmission and distribution system assets; complying with pipeline safety andintegrity and environmental requirements; setting rates charged to customers; establishing capital structures and issuing debt;
managing and reporting transactions between our domestic utilities and our other subsidiaries and affiliates; and paying
dividends or similar distributions. Failure to comply with or reinterpretations of existing regulations and new legislation or
regulations, such as those relating to air and water quality, renewable portfolio standards, emissions performance standards,
climate change, coal combustion byproduct disposal, hazardous and solid waste disposal, protected species and otherenvironmental matters, or changes in the nature of the regulatory process may have a significant adverse impact on our
financial results.
Our railroad business requires significant ongoing capital investment to improve and maintain its railroad network sothat transportation services can be safely and reliably provided to customers on a timely basis. Our utilities and energy
businesses also require significant amounts of capital to construct, operate and maintain generation, transmission anddistribution systems to meet their customers’ needs and reliability criteria. Additionally, system assets may need to be
operational for long periods of time in order to justify the financial investment. The operational or financial failure of capitalprojects may not be recoverable through rates that are charged to customers. Further, a significant portion of costs of capital
improvements may be funded through debt issued by BNSF and BHE and their subsidiaries. Disruptions in debt capital
markets that restrict access to funding when needed could adversely affect the results of operations, liquidity and/or capital
resources of these businesses.
Item 1B. Unresolved Staff Comments
None.
Item 2. Description of Properties
The properties used by Berkshire’s business segments are summarized in this section. Berkshire’s railroad and utilities
and energy businesses, in particular, utilize considerable physical assets in their businesses.
Railroad Business—Burlington Northern Santa Fe
Through BNSF Railway, BNSF operates over 32,500 route miles of track (excluding multiple main tracks, yard tracks
and sidings) in 28 states, and also operates in three Canadian provinces. BNSF owns over 23,000 route miles, including
easements, and operates over 9,000 route miles of trackage rights that permit BNSF to operate its trains with its crews overother railroads’ tracks. As of December 31, 2021, the total BNSF Railway system, including single and multiple main tracks,yard tracks and sidings, consisted of over 50,000 operated miles of track.
BNSF operates various facilities and equipment to support its transportation system, including its infrastructure,
locomotives and freight cars. It also owns or leases other equipment to support rail operations, such as vehicles. Support
facilities for rail operations include yards and terminals throughout its rail network, system locomotive shops to perform
locomotive servicing and maintenance, a centralized network operations center for train dispatching and network operations
monitoring and management, computers, telecommunications equipment, signal systems and other support systems. Transfer
facilities are maintained for rail-to-rail as well as intermodal transfer of containers, trailers and other freight traffic andinclude approximately 25 intermodal hubs located across the system. BNSF owns or holds under non-cancelable leases
exceeding one year approximately 7,500 locomotives and 63,600 freight cars, in addition to maintenance of way and otherequipment.
In the ordinary course of business, BNSF incurs significant costs in repairing and maintaining its properties. In 2021,
BNSF recorded approximately $2 billion in repairs and maintenance expense.

K-27

Utilities and Energy Businesses—Berkshire Hathaway Energy
BHE’s energy properties consist of the physical assets necessary to support its electricity and natural gas businesses.
Properties of BHE’s electricity businesses include electric generation, transmission and distribution facilities, as well as coalmining assets that support certain of BHE’s electric generating facilities. Properties of BHE’s natural gas businesses include
natural gas distribution facilities, interstate pipelines, storage facilities, liquefied natural gas facilities, compressor stations
and meter stations. The transmission and distribution assets are primarily within each of BHE’s utility service territories. In
addition to these physical assets, BHE has rights-of-way, mineral rights and water rights that enable BHE to utilize its
facilities. Pursuant to separate financing agreements, the majority of these properties are pledged or encumbered to support orotherwise provide the security for the related subsidiary debt. BHE or its affiliates own or have interests in the following
types of operating electric generating facilities at December 31, 2021:

Energy Source

EntityLocation by SignificanceWind

PacifiCorp, MEC and BHE
Renewables

Iowa, Wyoming, Texas, Nebraska,
Washington, California, Illinois, Montana,
Oregon and Kansas
Nevada, Utah, Iowa, Illinois, Washington,
Wyoming, Oregon, Texas, New York,Arizona and Canada
Wyoming, Iowa, Utah, Nevada, Colorado
and Montana
California, Texas, Arizona, Minnesota and
NevadaWashington, Oregon, Idaho, California,
Utah, Hawaii, Montana, Illinois andWyoming
Illinois
California and Utah
Total

Natural gas

Coal
Solar
Hydroelectric

NuclearGeothermal(1)

PacifiCorp, MEC, NV Energy,
BHE Renewables and BHE
CanadaPacifiCorp, MEC and
NV Energy
BHE Renewables and
NV Energy
PacifiCorp, MEC andBHE Renewables
MEC
PacifiCorp and BHE Renewables

FacilityNet
Capacity(MW) (1)Net
Owned
Capacity(MW) (1)

11,517

11,517

11,112

10,833

13,235

8,193

1,719

1,571

1,149
1,823
377
40,932

1,149
456
377
34,096

Facility Net Capacity in megawatts (MW) represents the lesser of nominal ratings or any limitations under applicableinterconnection, power purchase, or other agreements for intermittent resources and the total net dependable
capability available during summer conditions for all other units. An intermittent resource’s nominal rating is the
manufacturer’s contractually specified capability (in MW) under specified conditions. Net Owned Capacity indicates
BHE’s ownership of Facility Net Capacity.

As of December 31, 2021, BHE’s subsidiaries also have electric generating facilities that are under construction in
Nevada, Iowa and Canada having total Facility Net Capacity and Net Owned Capacity of 421 MW.
PacifiCorp, MEC and NV Energy own electric transmission and distribution systems, including approximately 27,700
miles of transmission lines and approximately 1,660 substations and gas distribution facilities, including approximately
27,700 miles of gas mains and service lines.
Northern Powergrid (Northeast) and Northern Powergrid (Yorkshire) operate an electricity distribution network that
includes approximately 17,400 miles of overhead lines, approximately 43,300 miles of underground cables andapproximately 780 major substations. AltaLink’s electricity transmission system includes approximately 8,200 miles oftransmission lines and approximately 310 substations.
The BHE GT&S pipeline system consists of approximately 5,400 miles of natural gas transmission, gathering andstorage pipelines located in portions of Maryland, New York, Ohio, Pennsylvania, Virginia, West Virginia, South Carolina
and Georgia. Storage services are provided through the operation of 17 underground natural gas storage fields located in
Pennsylvania, West Virginia and New York. BHE GT&S also operates, as the general partner, and owns a 25% limited
partnership interest in one liquefied natural gas export, import and storage facility in Maryland and operates and has
ownership interests in three modular liquefied natural gas facilities in Alabama, Florida and Pennsylvania.

K-28

Northern Natural’s pipeline system consists of approximately 14,300 miles of natural gas pipelines, including
approximately 5,800 miles of mainline transmission pipelines and approximately 8,500 miles of branch and lateral pipelines.
Northern Natural’s end-use and distribution market area includes points in Iowa, Nebraska, Minnesota, Wisconsin, South
Dakota, Michigan and Illinois and its natural gas supply and delivery service area includes points in Kansas, Texas,
Oklahoma and New Mexico. Storage services are provided through the operation of one underground natural gas storage
field in Iowa, two underground natural gas storage facilities in Kansas and two liquefied natural gas storage peaking units,
one in Iowa and one in Minnesota.
Kern River’s system consists of approximately 1,400 miles of natural gas pipelines, which extends from the system’s
point of origination in Wyoming through the Central Rocky Mountains into California.
Other Segments
Significant physical properties used by Berkshire’s other business segments are summarized below:
Business

Insurance:
GEICO
BHRG
BH Primary

Manufacturing

Country

U.S.
U.S.
Non-U.S.
U.S.
Non-U.S.

Property/Facility type

Locations in 23 countries
Locations in 7 countries

U.S.

Non-U.S.

Service

Locations

Locations in 63 countries

U.S.

Non-U.S.

Locations in 19 countries

Number of Properties
Owned
LeasedOffices and claims centers
Offices
Offices
Offices
Offices

10
1
1
5
—

113
27
37
48
15

Manufacturing facility
Offices/Warehouses
Retail/Showroom
Housing subdivisions
Manufacturing facility
Offices/Warehouses
Retail/Showroom

484
214
231
319
179
106
—

113
476
195
—
111
437
4

Training facilities/Hangars
Offices/Distribution
Production facilities
Leasing/Showroom/Retail
Training facilities/Hangars
Offices/Distribution

12
15
4
31
1
—

93
135
3
49
12
47

McLaneU.S.

Distribution centers
Offices

59
4

27
1

Retailing

U.S.

Offices/Warehouses
Retail/Showroom
Offices/Warehouses
Retail/Offices

23
139
1
—

27
498
7
91

Non-U.S.

Locations in 6 countries

Item 3. Legal Proceedings
Berkshire and its subsidiaries are parties in a variety of legal actions that routinely arise out of the normal course ofbusiness, including legal actions seeking to establish liability directly through insurance contracts or indirectly throughreinsurance 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 ofoperations. 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 believe that any liability that may arise as a result of otherpending legal actions will not have a material effect on our consolidated financial condition or results of operations.

K-29

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-K.
Executive Officers of the Registrant
Following is a list of the Registrant’s named executive officers:
Name

Age

Warren E. Buffett
Charles T. Munger
Gregory E. Abel
Ajit Jain
Marc D. Hamburg

91
98
59
70
72

Position with Registrant

Chairman and Chief Executive Officer
Vice Chairman
Vice Chairman – Non-Insurance Operations
Vice Chairman – Insurance Operations
Senior Vice-President – Chief Financial Officer

Since

1970
1978
2018
2018
1992

Each executive officer serves, in accordance with the by-laws of the Registrant, until the first meeting of the Board of
Directors following the next annual meeting of shareholders and until a successor is chosen and qualified or until suchexecutive officer sooner dies, resigns, is removed or becomes disqualified.
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 “forwardlooking” 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, arealso forward-looking statements as defined by the Act. Forward-looking statements are based on current expectations andprojections 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 notguarantees 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 todiffer materially from such forward-looking statements include, but are not limited to, changes in market prices of ourinvestments in fixed maturity and equity securities; losses realized from derivative contracts; the occurrence of one or morecatastrophic events, such as an earthquake, hurricane, 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 otheroutbreaks, including COVID-19, that negatively affect our operating results and restrict our access to borrowed funds throughthe 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 affectthe prices of securities or the industries in which we do business.
Part II
Item 5. Market for Registrant’s Common Equity, Related Security Holder Matters and Issuer Purchases of Equity
Securities
Market Information
Berkshire’s Class A and Class B common stock are listed for trading on the New York Stock Exchange, trading
symbols: BRK.A and BRK.B, respectively.
Shareholders
Berkshire had approximately 1,400 record holders of its Class A common stock and 18,400 record holders of its
Class B common stock at February 15, 2022. Record owners included nominees holding at least 346,000 shares of Class A
common stock and 1,287,000,000 shares of Class B common stock on behalf of beneficial-but-not-of-record owners.
Dividends
Berkshire has not declared a cash dividend since 1967.

K-30

Common Stock Repurchase Program
Berkshire’s common stock repurchase program permits Berkshire to repurchase its Class A and Class B shares at any
time that Warren Buffett, Berkshire’s Chairman of the Board and Chief Executive Officer, and Charles Munger, Vice
Chairman of the Board, believe that the repurchase price is below Berkshire’s intrinsic value, conservatively determined.
Repurchases may be in the open market or through privately negotiated transactions. Information with respect to Berkshire’s
Class A and Class B common stock repurchased during the fourth quarter of 2021 follows.

Total number ofsharespurchased

PeriodOctoberClass A common stock
Class B common stock
NovemberClass A common stock
Class B common stock
DecemberClass A common stock
Class B common stock*

Average pricepaid per share

Total number ofMaximumsharesnumber or value ofpurchased asshares that yet
part of publicly
may beannounced
repurchased underprogramthe program

680 $
5,862,551 $

431,525.72
282.86680
5,862,551

*
*

403 $
7,013,482 $

430,172.46
284.39403
7,013,482**

1,828 $
6,259,164 $439,625.92
287.62

1,828
6,259,164**

The program does not specify a maximum number of shares to be repurchased or obligate Berkshire to repuTe rchase any
specific dollar amount or number of Class A or Class B shares and there is no expiration date to the repurchaseprogram. Berkshire will not repurchase its common stock if the repurchases reduce the total value of Berkshire’s
consolidated cash, cash equivalentst and U.S. Treasury Bills holdings to less than $30 billion.

Stock Performance Graph
The following chart compares the subsequent value of $100 invested in Berkshire common stock on December 31,
2016 with a similar investment in the Standard & Poor’s 500 Stock Index and in the Standard & Poor’s Property – Casualty
Insurance Index**.

260

Berkshire Hathaway Inc.

240

233

S&P 500 Index*
S&P 500 Property & Casualty Insurance Index*

220

DOLLARS

200

181

180
157

153

160

187
184

147

140

122 122

120

122

100

125

139

142

2019

2020

117
116

80
60
2016

2017

2018

2021

*

Cumulative return for the Standard & Poor’s indices based on reinvestment of dividends.

**

It would be difficult to develop a peer group of companies similar to Berkshire. The Corporation owns subsidiaries
engaged in a number of diverse business activities of which the most important is the property and casualty insurance
business and, accordingly, management has used the Standard & Poor’s Property—Casualty Insurance Index forcomparative purposes.
K-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations
Net earnings attributable to Berkshire Hathaway shareholders for each of the past three years are disaggregated in thetable that follows. Amounts are after deducting income taxes and exclude earnings attributable to noncontrolling interests (inmillions).
2021

Insurance – underwriting
Insurance – investment income
Railroad
Utilities and energy
Manufacturing, service and retailing
Investment and derivative gains/losses
Other*Net earnings attributable to Berkshire Hathaway shareholders
∗

$

$

728
4,807
5,990
3,495
11,12062,3401,315
89,795

2020

$

$

657 $
5,039
5,161
3,091
8,300
31,591(11,318)
42,521 $

2019

325
5,530
5,481
2,840
9,372
57,445424
81,417

Includes goodwill and indefinite-lived intangible asset impairment charges of $259 million in 2021, $11.0 billion in2020 and $435 million in 2019, which includes our share of charges recorded by Kraft Heinz.

Through our subsidiaries, we engage in numerous diverse business activities. We manage our operating businesses onan unusually decentralized basis. There are few centralized or integrated business functions. Our senior corporate
management team participates in and is ultimately responsible for significant capital allocation decisions, investment
activities and the selection of the Chief Executive to head each of the operating businesses. The business segment data (Note
25 to the accompanying Consolidated Financial Statements) should be read in conjunction with this discussion.
The COVID-19 pandemic negatively affected most of our businesses beginning in March of 2020, with the effects todate ranging from relatively minor to severe. Earnings of most of our manufacturing, service and retailing businesses
declined considerably, and in certain instances severely, in the second quarter of 2020. Over the second half of 2020 andcontinuing in 2021, many of these businesses experienced significant recoveries in revenues and earnings, in some instances
exceeding pre-pandemic levels. However, many of our businesses were negatively affected by ongoing global supply chain
disruptions, including those attributable to major winter storms and a hurricane in North America, which contributed tohigher input costs. We cannot reliably predict future economic effects of the pandemic or when business activities at ouroperations will completely normalize. Nor can we predict how these events will alter the future consumption patterns ofconsumers and businesses we serve.
Our insurance businesses generated after-tax earnings from underwriting of $728 million in 2021, $657 million in 2020
and $325 million in 2019. In each year, we generated underwriting earnings from primary insurance and underwriting losses
from reinsurance. Insurance underwriting results included after-tax losses from significant catastrophe events ofapproximately $2.3 billion in 2021, $750 million in 2020 and $800 million in 2019. Underwriting results in 2021 werefavorably impacted by reductions in incurred losses for prior accident years under property and casualty contracts.
Underwriting results in 2021 were negatively impacted by reductions in earned premium from the GEICO Giveback
program, higher private passenger auto claims frequencies and severities estimates and higher losses in the life reinsurance
business. Underwriting results in 2020 included the effects of the pandemic, arising from premium reductions from the
GEICO Giveback program, reduced claims frequencies for private passenger automobile insurance and increased loss
estimates for certain commercial insurance and property and casualty reinsurance business.
After-tax earnings from insurance investment income in 2021 decreased 4.6% compared to 2020 and declined 8.9% in2020 versus 2019. Earnings in 2021 and 2020 were negatively affected by declines in interest rates on our substantial
holdings of cash and U.S. Treasury Bills.

K-32

Management’s Discussion and Analysis (Continued)
Results of Operations (Continued)
After-tax earnings of our railroad business in 2021 rose 16.1% compared to 2020 and decreased 5.8% in 2020
compared to 2019. The earnings increase in 2021 reflected overall higher freight volumes, higher average revenue per
car/unit and improved productivity, partly offset by higher average fuel prices and volume related costs. Earnings in 2020reflected lower railroad operating revenues from lower shipping volumes, attributable to the negative effects of the COVID19 pandemic, partly offset by lower operating costs and the effects of productivity improvements. After-tax earnings of ourutilities and energy business in 2021 increased 13.1% versus 2020 and increased 8.8% in 2020 compared to 2019. The
increase in 2021 included higher earnings from the utilities and natural gas pipelines businesses, including the effects of abusiness acquisition, and from the real estate brokerage business, while the earnings increase in 2020 reflected increased tax
benefits from renewable energy and increased earnings from the real estate brokerage business.
Earnings in 2021 from our manufacturing, service and retailing businesses increased 34.0% versus 2020 and declined
11.4% in 2020 versus 2019. Many of our businesses generated significantly higher earnings in 2021 compared to 2020.
While customer demand for products was relatively high during the year, several of our businesses experienced higher
materials, freight and other input costs attributable to ongoing disruptions in global supply chains. The effects of the COVID19 pandemic have varied among our businesses relative to significance and duration.
Other earnings included after-tax goodwill and indefinite-lived intangible asset impairment charges of $259 million in
2021, $11.0 billion in 2020 and $435 million in 2019. Such amounts included our share of impairment charges recorded by
Kraft Heinz. Approximately $9.8 billion of the charges in 2020 were attributable to impairments of goodwill and indefinitelived intangible assets recorded in connection with Berkshire’s acquisition of Precision Castparts in 2016. Other earnings in
2021 also included after-tax foreign exchange rate gains of $955 million and after-tax losses of $764 million in 2020 related
to non-U.S. Dollar denominated debt issued by Berkshire and its U.S.-based finance subsidiary, Berkshire Hathaway FinanceCorporation (“BHFC”).
Investment and derivative gains/losses in each of the three years presented predominantly derived from ourinvestments in equity securities and included significant net unrealized gains from market price changes. We believe thatinvestment and derivative gains/losses, whether realized from dispositions or unrealized from changes in market prices of
equity securities, are generally meaningless in understanding our reported quarterly or annual results or evaluating the
economic performance of our operating businesses. These gains and losses have caused and will continue to cause significant
volatility in our periodic earnings.
Insurance—Underwriting
Our management views our insurance businesses as possessing two distinct activities – underwriting and investing.
Underwriting decisions are the responsibility of the unit managers, while investing decisions are the responsibility ofBerkshire’s Chairman and CEO, Warren E. Buffett and Berkshire’s corporate investment managers. Accordingly, weevaluate performance of underwriting operations without any allocation of investment income or investment gains and losses.
We consider investment income as an integral component of our aggregate insurance operating results. However, we consider
investment gains and losses, whether realized or unrealized, as non-operating. We believe that such gains and losses are notmeaningful in understanding the periodic operating results of our insurance businesses.
The timing and magnitude of catastrophe losses can produce significant volatility in our periodic underwriting results,
particularly with respect to our reinsurance businesses. Generally, we consider incurred losses exceeding $100 million from acurrent year catastrophic event to be significant. The significant catastrophe events in 2021 included Hurricane Ida and floodsin Europe in the third quarter, as well as Winter Storm Uri in the first quarter.
Changes in estimates for unpaid losses and loss adjustment expenses, including amounts established for occurrences inprior years, can also significantly affect our periodic underwriting results. Unpaid loss estimates, including estimates underretroactive reinsurance contracts, were approximately $125 billion as of December 31, 2021. Our periodic underwriting
results may also include significant foreign currency transaction gains and losses arising from the changes in the valuation of
non-U.S. Dollar denominated liabilities of our U.S. based insurance subsidiaries due to foreign currency exchange rate
fluctuations.

K-33

Management’s Discussion and Analysis (Continued)
Insurance—Underwriting (Continued)
Underwriting results of certain of our commercial insurance and reinsurance businesses were negatively affected in
2021 and 2020 by estimated losses and costs associated with the COVID-19 pandemic, including incremental provisions forclaims and uncollectible premiums and incremental operating costs to maintain customer service levels. The effects of thepandemic on future periods may be affected by judicial rulings and regulatory and legislative actions pertaining to insurance
coverage and claims and by its effects on general economic activity, which we cannot reasonably estimate at this time.
We provide primary insurance and reinsurance products covering property and casualty risks, as well as life and healthrisks. Our insurance and reinsurance businesses are GEICO, Berkshire Hathaway Primary Group and Berkshire Hathaway
Reinsurance Group.
Underwriting results of our insurance businesses are summarized below (dollars in millions).
2021

Pre-tax underwriting earnings (loss):
GEICO
Berkshire Hathaway Primary Group
Berkshire Hathaway Reinsurance Group
Pre-tax underwriting earnings
Income taxes and noncontrolling interests
Net underwriting earnings
Effective income tax rate

$

$

2020

1,259 $
607
(930)
936
208
728 $
22.2%

2019

3,428 $
110
(2,700)
838
181
657 $
21.5%

1,506
383
(1,472)
417
92
325
24.2%

GEICO
GEICO writes private passenger automobile insurance, offering coverages to insureds in all 50 states and the District ofColumbia. GEICO markets its policies mainly by direct response methods where most customers apply for coverage directly
to the company via the Internet or over the telephone. A summary of GEICO’s underwriting results follows (dollars inmillions).
2021
AmountPremiums written
Premiums earned
Losses and loss adjustment expenses
Underwriting expenses
Total losses and expenses
Pre-tax underwriting earnings

$
$

$

2020
%

38,39537,70630,9995,448
36,4471,259$
100.0 $
82.2
14.5
96.7
$

Amount34,92835,09326,018
5,647
31,665
3,428

2019
%

$
100.0 $
74.1
16.1
90.2
$

Amount36,01635,57228,9375,129
34,066
1,506

%

100.0
81.3
14.5
95.8

GEICO’s pre-tax underwriting earnings in 2021 and 2020 were significantly affected by changes in average claims
frequencies. Beginning in the first quarter of 2020 and continuing through the first quarter of 2021, average claims
frequencies were significantly below historical levels from the effects of less driving by policyholders during the COVID-19
pandemic. These effects were partially offset by higher average claims severities and lower premiums earned from the
GEICO Giveback program, which provided for a 15% premium credit to all voluntary auto and motorcycle new policies orpolicies renewing between April 8, 2020 and October 7, 2020. Starting in the second quarter of 2021, average claims
frequencies began to increase as driving by policyholders increased. In addition, average property claims severities increased
due to increases in used vehicle valuations.

K-34

Management’s Discussion and Analysis (Continued)
Insurance—Underwriting (Continued)
GEICO (Continued)
2021 versus 2020
Premiums written in 2021 increased $3.5 billion (9.9%) compared to 2020, which included a reduction of
approximately $2.9 billion attributable to the GEICO Giveback program. Premiums earned in 2021 increased $2.6 billion(7.4%) compared to 2020. The GEICO Giveback Program reduced earned premiums by approximately $2.5 billion in 2020
with the remainder of the impact included in 2021. Voluntary auto policies-in-force in 2021 were slightly higher compared to2020.
Losses and loss adjustment expenses increased $5.0 billion (19.1%) compared to 2020. GEICO’s ratio of losses andloss adjustment expenses to premiums earned (the “loss ratio”) increased 8.1 percentage points compared to 2020. The
increase in the loss ratio reflected an increase in average claims frequencies and severities and higher losses from significant
catastrophe events, partially offset by increased reductions of ultimate estimated losses for claims occurring in prior years.
Claims frequencies in 2021 were higher for all coverages, including property damage and bodily injury (thirteen to
fourteen percent range), personal injury (sixteen to seventeen percent range) and collision (twenty-one to twenty-two percent
range). Average claims severities in 2021 were also higher for property damage coverage (two to three percent range),collision coverage (fifteen to sixteen percent range) and bodily injury coverage (eight to ten percent range). Ultimate claim
loss estimates for claims occurring in prior years were reduced approximately $1.8 billion in 2021 and $253 million in 2020,
which produced corresponding reductions in losses and loss adjustment expenses. Losses incurred attributable to Hurricane
Ida in 2021 were $375 million, while losses in 2020 included $81 million attributable to Hurricanes Laura and Sally and U.S.
wildfires.
Underwriting expenses decreased $199 million (3.5%) compared to 2020, reflecting lower advertising expenses.
GEICO’s expense ratio (underwriting expenses to premiums earned) decreased 1.6 percentage points in 2021, reflecting
lower nominal expenses and higher premiums earned.
2020 versus 2019
Premiums written and earned in 2020 decreased $1.1 billion (3.0%) and $479 million (1.3%), respectively, compared
to 2019. The GEICO Giveback program reduced premiums written $2.9 billion and premiums earned $2.5 billion in 2020.
Voluntary auto policies-in-force increased approximately 820,000 during 2020.
Losses and loss adjustment expenses in 2020 decreased $2.9 billion (10.1%) compared to 2019. GEICO’s loss ratio
was 74.1%, a decrease of 7.2 percentage points compared to 2019. The decrease in the loss ratio reflected declines in claims
frequencies, partly offset by increases in claims severities and the impact of lower premiums earned attributable to the
GEICO Giveback program.
Claims frequencies in 2020 were lower for property damage, bodily injury and personal injury protection coverages(twenty-eight to thirty percent range) and collision coverage (twenty-three to twenty-four percent range) compared to 2019.
Average claims severities in 2020 were higher for property damage and collision coverages (eight to ten percent range) andbodily injury coverage (twelve to thirteen percent range). Losses and loss adjustment expenses included net reductions of$253 million in 2020 for decreases in the ultimate loss estimates for claims occurring in prior years compared to net increasesof $42 million in 2019. Losses incurred included $81 million in 2020 from Hurricanes Laura and Sally and U.S. wildfires.
There were no losses from significant catastrophe events in 2019.
Underwriting expenses in 2020 increased $518 million (10.1%) compared to 2019, reflecting higher employee-related,advertising and technology costs, partly offset by lower premium taxes. GEICO’s expense ratio in 2020 was 16.1%, anincrease of 1.6 percentage points compared to 2019. The expense ratio increase was primarily attributable to the decline inearned premiums from the GEICO Giveback program.

K-35

Management’s Discussion and Analysis (Continued)
Insurance—Underwriting (Continued)
Berkshire Hathaway Primary Group
The Berkshire Hathaway Primary Group (“BH Primary”) provides a variety of commercial insurance solutions,
including healthcare professional liability, workers’ compensation, automobile, general liability, property and specialty
coverages for small, medium and large clients. BH Primary’s larger insurers include Berkshire Hathaway Specialty Insurance(“BH Specialty”), Berkshire Hathaway Homestate Companies (“BHHC”), MedPro Group, Berkshire Hathaway GUARD
Insurance Companies (“GUARD”), National Indemnity Company (“NICO Primary”) and U.S. Liability Insurance Company(“USLI”). A summary of BH Primary underwriting results follows (dollars in millions).
2021
AmountPremiums written
Premiums earned
Losses and loss adjustment expenses
Underwriting expenses
Total losses and expenses
Pre-tax underwriting earnings

$
$

$

2020
%

12,595
11,575
8,107
2,861
10,968607$
100.0 $
70.0
24.8
94.8
$

Amount10,212
9,615
7,129
2,376
9,505
110

2019
%

$
100.0 $
74.1
24.7
98.8
$

Amount

9,843
9,165
6,336
2,446
8,782
383

%

100.0
69.1
26.7
95.8

Premiums written increased $2.4 billion (23.3%) in 2021 compared to 2020, reflecting increases from BH Specialty(36%), MedPro Group (16%), NICO Primary (25%), GUARD (7%), BHHC (5%) and USLI (20%). The increases wereacross multiple coverages and occurred in several markets.
Premiums written increased $369 million (3.7%) in 2020 compared to 2019, reflecting increased premiums writtenfrom BH Specialty (34%) and MedPro Group (9%), partially offset by a 13% decrease in premiums written by our otherprimary insurers. The decline in volume by our other primary insurers was primarily due to lower workers’ compensation andcommercial automobile volumes and the effect of the divestiture of Applied Underwriters in October 2019.
BH Primary’s loss ratios were 70.0% in 2021, 74.1% in 2020 and 69.1% in 2019. Losses and loss adjustment expenses
attributable to significant catastrophe events were $402 million in 2021 from Hurricane Ida and Winter Storm Uri and $207
million in 2020 from Hurricanes Laura and Sally and U.S. wildfires. Losses and loss adjustment expenses were reduced $631
million in 2021, $265 million in 2020 and $499 million in 2019 for net reductions in estimated ultimate liabilities for prioryears’ loss events. Losses in 2020 also included increased liabilities of $167 million attributable to the pandemic.
BH Primary insurers write significant levels of commercial and professional liability and workers’ compensation
insurance and the related claim costs may be subject to high severity and long claim-tails. Accordingly, we could experiencesignificant increases in claims liabilities in the future attributable to higher-than-expected claim settlements, adverse litigation
outcomes or judicial rulings and other factors not currently anticipated.
Underwriting expenses increased $485 million (20.4%) in 2021 compared to 2020, reflecting the increase in business,changes in business mix and the costs associated with new product development. The expense ratio in 2021 was relatively
unchanged versus 2020. The expense ratio in 2020 declined 2.0 percentage points compared to 2019 and reflected changes inbusiness mix and the impact of the Applied Underwriters divestiture.
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 several subsidiaries, led by National Indemnity
Company (“NICO”), General Reinsurance Corporation and General Reinsurance AG. We also write life and healthreinsurance coverages through General Re Life Corporation, General Reinsurance AG and Berkshire Hathaway Life
Insurance Company of Nebraska (“BHLN”). We periodically assume property and casualty risks under retroactive
reinsurance contracts written through NICO. In addition, we write periodic payment annuity contracts through BHLN.

K-36

Management’s Discussion and Analysis (Continued)
Insurance—Underwriting (Continued)
Berkshire Hathaway Reinsurance Group (Continued)
Generally, we strive to generate underwriting profits. However, time-value-of-money concepts are important elementsin establishing prices for retroactive reinsurance and periodic payment annuity businesses due to the expected long durationsof the claim liabilities. We expect to incur pre-tax underwriting losses from such businesses, primarily through deferredcharge amortization and discount accretion charges. We receive premiums at the inception of these contracts, which are thenavailable for investment. A summary of BHRG’s premiums and pre-tax underwriting results follows (dollars in millions).
Premiums written
2021
2020
2019

Property/casualty
Life/health
Retroactive reinsurance
Periodic payment annuity
Variable annuity

Pre-tax underwriting
earnings (loss)
2021
2020
2019

Premiums earned
2021
2020
2019

$ 14,149 $ 13,295 $ 10,428 $ 13,740 $ 12,214 $ 9,911 $
5,621
5,848
4,963
5,648
5,861
4,869
136
38
684
136
38
684
658
566
863
658
566
863
15
14
14
15
14
14
$ 20,579 $ 19,761 $ 16,952 $ 20,197 $ 18,693 $ 16,341 $667 $ (799) $
16
(421)
(18)
159
(782) (1,248) (1,265)
(508)
(617)
(549)
114
(18)
167
(930) $ (2,700) $ (1,472)

Property/casualty
A summary of property/casualty reinsurance underwriting results follows (dollars in millions).
2021
AmountPremiums written
Premiums earned
Losses and loss adjustment expenses
Underwriting expenses
Total losses and expenses
Pre-tax underwriting earnings (loss)

$
$

$

2020
%

14,14913,7409,878
3,195
13,073667$
100.0 $
71.9
23.2
95.1
$

Amount13,295
12,214
9,898
3,115
13,013
(799)

2019
%

$
100.0 $
81.0
25.5
106.5
$

Amount10,428
9,911
7,313
2,582
9,895
16

%

100.0
73.8
26.0
99.8

Premiums written increased $854 million (6.4%) in 2021 compared to 2020, primarily attributable to net new business,increased participations and improved prices on renewals and favorable currency translation effects. The increase wasprimarily attributable to property coverages. Premiums written increased $2.9 billion (27.5%) in 2020 compared to 2019. The
increase was primarily attributable to net new business and increased participations on renewals.
Losses and loss adjustment expenses were relatively unchanged in 2021 compared to 2020, while the loss ratio
decreased 9.1 percentage points. The loss ratio was 71.9% in 2021, 81.0% in 2020 and 73.8% in 2019. Losses incurredarising from significant catastrophe events in 2021 (Hurricane Ida, flooding in Europe and Winter Storm Uri) were $2.1
billion, which were partially offset by reductions in estimated ultimate liabilities for losses occurring in prior years of $718
million. Losses incurred in 2020 included $667 million from significant catastrophe events (Hurricanes Laura and Sally andU.S. wildfires), losses attributable to the COVID-19 pandemic of $964 million and increases in estimated ultimate liabilities
for losses occurring in prior years of $162 million. Incurred losses from significant catastrophe events during 2019 were $1.0
billion and derived from Typhoons Faxai and Hagibis and various U.S. and non-U.S. wildfires, which were partially offset by
reductions in estimated ultimate liabilities for losses occurring in prior years of $295 million.
Underwriting expenses are primarily commissions and brokerage costs. The expense ratio in 2021 decreased 2.3
percentage points compared to 2020, primarily attributable to changes in business mix and foreign currency effects.
Underwriting expenses increased $533 million (20.6%) in 2020 compared to 2019, reflecting the increase in premiums
earned.

K-37

Management’s Discussion and Analysis (Continued)
Insurance—Underwriting (Continued)
Berkshire Hathaway Reinsurance Group (Continued)
Life/health
A summary of our life/health reinsurance underwriting results follows (dollars in millions).
2021
AmountPremiums written
Premiums earned
Life and health insurance benefits
Underwriting expenses
Total benefits and expenses
Pre-tax underwriting earnings (loss)

$
$

$

2020
%

5,621
5,648
4,933
1,136
6,069
(421)

$
100.0 $
87.3
20.2
107.5
$

Amount

5,848
5,861
4,883
996
5,879
(18)

2019
%

$
100.0 $
83.3
17.0
100.3
$

Amount

4,963
4,869
3,800
910
4,710
159

%

100.0
78.0
18.7
96.7

Life/health premiums written decreased $227 million (3.9%) in 2021 compared to 2020. Premiums written in 2020
included $710 million from a contract that covered U.S. health risks that incepted in the fourth quarter of 2019 and did notrenew in 2021. Otherwise, premiums written in 2021 increased 9.4% versus 2020, primarily due to volume growth in the
Asia Pacific region and favorable foreign currency translation effects. Underwriting results in 2021 were negatively affectedby significant increases in mortality in the U.S., South Africa, India and Latin America, attributable to the pandemic.
Life/health premiums written increased $885 million (17.8%) in 2020 compared to 2019. Approximately $480 millionof the increase was attributable to the contract covering U.S. health insurance risks, and the remainder of the increase wasprimarily from volume growth in Asia and Europe. Underwriting earnings in 2020 were negatively affected by increased life
benefits from COVID-19-related claims and from increased liabilities from changes in underlying assumptions in estimating
disability benefit liabilities in Australia, which were mostly offset by lower other life claims and reduced losses from U.S.
long-term care business that is in run-off. Results in 2019 included a one-time pre-tax underwriting gain of $163 million
attributable to an amendment of a yearly renewable term life contract.
Retroactive reinsurance
Pre-tax underwriting losses in each year derived from the amortization of deferred charges and changes in theestimated timing and amounts of future claim payments. Underwriting results also include foreign currency exchange gains
and losses from the effects of changes in foreign currency exchange rates on non-U.S. Dollar denominated liabilities of our
U.S. subsidiaries. Underwriting results included pre-tax foreign currency gains of $56 million in 2021 and losses of $139
million in 2020 and $76 million in 2019.
Pre-tax underwriting losses before foreign currency gains/losses were $838 million in 2021, $1.1 billion in 2020 and$1.2 billion in 2019. Estimated ultimate claim liabilities for contracts written in prior years were reduced $974 million in
2021 and $399 million in 2020. After adjustments to the related unamortized deferred charges from changes in the estimatedtiming and amount of the future claim payments, such reductions produced pre-tax underwriting earnings of $142 million in
2021 and $230 million in 2020.
Gross unpaid losses assumed under retroactive reinsurance contracts were $38.3 billion at December 31, 2021, adecline of $2.7 billion since December 31, 2020. The decline was primarily attributable to paid claims of approximately $1.9
billion and the reduction in estimated ultimate claim liabilities. Unamortized deferred charges related to retroactive
reinsurance contracts were $10.6 billion at December 31, 2021, a decline of $1.8 billion since December 31, 2020,
attributable to the effects of the changes in the estimated timing and amount of the future claim payments and periodic
amortization. Deferred charge amortization will be included in underwriting earnings over the expected remaining claims
settlement periods.

K-38

Management’s Discussion and Analysis (Continued)
Insurance—Underwriting (Continued)
Berkshire Hathaway Reinsurance Group (Continued)
Periodic payment annuity
Periodic payment annuity premiums earned increased $92 million (16.3%) in 2021 compared to 2020, which decreased$297 million (34.4%) versus 2019. Periodic payment annuity business is both price and demand sensitive. Our premium
volumes in 2021 and 2020 were affected by pandemic-related delays in underlying claim settlements, which reduced the
supply of available business. Our volumes written may also change rapidly due to changes in prices, which are affected byprevailing interest rates, the perceived risks and durations associated with the expected annuity payments, as well as the levelof competition.
Periodic payment annuity contracts normally produce pre-tax underwriting losses deriving from the recurring discountaccretion of annuity liabilities. Underwriting results also include gains or losses from the effects of changes in mortality andinterest rates and from foreign currency exchange rate changes on non-U.S. Dollar denominated liabilities of our U.S.
subsidiaries. Pre-tax underwriting results included foreign currency gains of $18 million in 2021 and losses of $67 million in2020 and $40 million in 2019.
Excluding foreign currency gains/losses, pre-tax underwriting losses from periodic payment annuity contracts were$526 million in 2021, $550 million in 2020 and $509 million in 2019. Pre-tax losses in 2021 were partially offset by theeffects of higher mortality and by higher interest rates applicable to settlements under certain contracts. Discounted annuity
liabilities were $15.1 billion at December 31, 2021 and had a weighted average discount rate of approximately 3.9%.
Variable annuity
Variable annuity guarantee reinsurance contracts produced pre-tax earnings of $114 million in 2021, losses of $18
million in 2020 and earnings of $167 million in 2019. The results from these contracts are affected by changes in securities
markets, interest rates and foreign currency exchange rates, which can be volatile, and from the periodic amortization of
expected profit margins. The comparative increase in underwriting earnings in 2021 was primarily attributable to the net
effects of interest rate changes and, to a lesser extent, changes in securities markets.
Insurance—Investment Income
A summary of net investment income attributable to our insurance operations follows (dollars in millions).
2021

Interest and other investment income
Dividend income
Pre-tax net investment income
Income taxes and noncontrolling interests
Net investment income
Effective income tax rate

$

$

589
5,060
5,649
842
4,807
14.9%

2020

$

$

1,059
4,890
5,949
910
5,039
15.3%

2019

$

$

2,075
4,525
6,600
1,070
5,530

Percentage change
2021 vs 2020
2020 vs 2019(44.4)%
3.5(5.0)(49.0)%
8.1
(9.9)

16.1%

Interest and other investment income declined $470 million (44.4%) in 2021 compared to 2020, which in turn, declined$1.0 billion (49.0%) compared to 2019. These declines were primarily due to lower income from short-term investments andfixed maturity securities. We continue to hold substantial balances of cash, cash equivalents and short-term U.S. Treasury
Bills. Short-term interest rates declined over the second half of 2019 and throughout 2020. Low rates prevailed through 2021,
which resulted in significantly lower interest income. Nevertheless, we believe that maintaining ample liquidity is paramountand we insist on safety over yield with respect to short-term investments.

K-39

Management’s Discussion and Analysis (Continued)
Insurance—Investment Income (Continued)
Dividend income included $121 million in 2021 and $26 million in 2020 from investments in preferred stock ofBerkshire Hathaway Energy. Such amounts are deducted from earnings of the utilities and energy segment. Dividend income
may vary from period to period due to changes in the investment portfolio and the frequency and timing of dividends fromcertain investees. Dividend income increased $365 million (8.1%) in 2020 compared to 2019. The increase was primarily
attributable to dividends from the investment in $10 billion liquidation value of 8% cumulative preferred stock of Occidental
Petroleum Corporation (“Occidental”) on August 8, 2019, partly offset by lower dividends from common stock investments.
Invested assets of our insurance businesses derive from shareholder capital and from net liabilities under insurance andreinsurance contracts or “float.” The major components of float are unpaid losses and loss adjustment expenses, including
liabilities under retroactive reinsurance contracts, life, annuity and health insurance benefit liabilities, unearned premiums andother liabilities due to policyholders, reduced by insurance premiums and reinsurance receivables, deferred charges assumed
under retroactive reinsurance contracts and deferred policy acquisition costs. Float approximated $147 billion at December
31, 2021, $138 billion at December 31, 2020 and $129 billion at December 31, 2019. Our combined insurance operations
generated pre-tax underwriting earnings in each of the past three years, and consequently, the average cost of float for eachyear was negative.
A summary of cash and investments held in our insurance businesses as of December 31, 2021 and 2020 follows (inmillions).
December 31,
2021

Cash, cash equivalents and U.S. Treasury Bills
Equity securities
Fixed maturity securities
Other

$

2020

90,688334,907
16,386
4,296
446,277$$$

67,082
269,498
20,3176,220
363,117

Fixed maturity investments as of December 31, 2021 were as follows (in millions).
Amortized
cost

U.S. Treasury, U.S. government corporations and agencies
Foreign governments
Corporate bonds
Other

$

$

3,278
10,9971,350
292
15,917

Unrealized
gains/losses

$

$

17 $
(4)
411
45
469 $

Carrying
value

3,295
10,993
1,761
337
16,386

U.S. government obligations are rated AA+ or Aaa by the major rating agencies. Approximately 93% of all foreign
government obligations were rated AA or higher by at least one of the major rating agencies. Foreign government securities
include obligations issued or unconditionally guaranteed by national or provincial government entities.

K-40

Management’s Discussion and Analysis (Continued)
Railroad
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 businessgroups by type of product shipped including consumer products, industrial products, agricultural products and coal. A
summary of BNSF’s earnings follows (dollars in millions).

Railroad operating revenues
Railroad operating expenses:
Compensation and benefits
Fuel
Purchased services
Depreciation and amortization
Equipment rents, materials and other
Total
Railroad operating earnings
Other revenues (expenses):
Other revenues
Other expenses, net
Interest expense
Pre-tax earnings
Income taxes
Net earnings
Effective income tax rate$$

Percentage change
2021 vs 2020 2020 vs 2019

2021

2020

2019

22,513 $20,181 $

22,745

11.6%(11.3)%

4,696
2,766
2,033
2,444
1,763
13,702
8,811

4,542
1,789
1,954
2,460
1,684
12,429
7,752

5,270
2,944
2,049
2,389
2,028
14,680
8,065

3.4
54.6
4.0
(0.7)
4.7
10.2
13.7

(13.8)(39.2)(4.6)
3.0(17.0)(15.3)
(3.9)

769
(687)
(1,032)
7,861
1,871
5,990 $
23.8%

688
(611)
(1,037)
6,792
1,631
5,161 $
24.0%

770
(515)
(1,070)
7,250
1,769
5,481
24.4%

11.8
12.4
(0.5)
15.7
14.7
16.1

(10.6)
18.6
(3.1)
(6.3)
(7.8)
(5.8)

The following table summarizes BNSF’s railroad freight volumes by business group (cars/units in thousands).
2021

Consumer products
Industrial products
Agricultural products
Coal
Total cars/units

5,673
1,709
1,224
1,529
10,135

Cars/Units
2020

5,266
1,622
1,189
1,404
9,481

2019

5,342
1,931
1,146
1,802
10,221

Percentage change
2021 vs 2020
2020 vs 2019

7.7%
5.4
2.9
8.9
6.9

(1.4)%(16.0)
3.8(22.1)(7.2)

2021 versus 2020
Railroad operating revenues increased 11.6% in 2021 compared to 2020, reflecting higher volumes of 6.9%, as well as
a 3.5% increase in average revenue per car/unit resulting from business mix changes and higher fuel surcharge revenue
attributable to higher fuel prices. Pre-tax earnings were $7.9 billion in 2021, an increase of 15.7% from 2020. The COVID-19
pandemic caused a significant economic slowdown that adversely affected our volumes in 2020. Revenue changes in 2021
were driven by continued improvements from the 2020 effects of the COVID-19 pandemic, partially offset by the ongoing
disruptions in the global supply chain.

K-41

Management’s Discussion and Analysis (Continued)
Railroad (Continued)
Operating revenues from consumer products increased 13.7% in 2021 to $8.3 billion compared to 2020, reflecting
increased volumes of 7.7% and higher average revenue per car/unit. The volume increase was primarily due to growth inintermodal in both international and domestic shipments driven by increased retail sales, inventory replenishments byretailers and increased e-commerce activity.
Operating revenues from industrial products were $5.3 billion in 2021, an increase of 5.0% from 2020. Volumes
increased 5.4% while average revenue per car/unit was nearly unchanged from 2020. The volume increase was primarily due
to improvement in the U.S. industrial economy, driving higher volumes in the construction and building sectors, partially
offset by lower petroleum volumes due to unfavorable market conditions in the energy sector.
Operating revenues from agricultural products increased 5.8% to $5.1 billion in 2021 compared to 2020. The revenuechange reflected a volume increase of 2.9% due to higher domestic grain shipments and higher volumes of ethanol andrelated commodities, as well as higher revenue per car/unit.
Operating revenues from coal increased 21.5% to $3.2 billion in 2021 compared to 2020 attributable to higher volumesof 8.9% in 2021, as well as higher average revenue per car/unit. The volume increase in 2021 was attributable to increased
electricity generation, higher natural gas prices and improved export demand.
Railroad operating expenses were $13.7 billion in 2021, an increase of $1.3 billion (10.2%) compared to 2020. The
ratio of railroad operating expenses to railroad operating revenues decreased 0.7 percentage points to 60.9% in 2021 versus
2020. The increase in railroad operating expenses reflected higher volumes and higher average fuel prices, partially offset by
the favorable impact of productivity improvements.
Compensation and benefits expenses increased $154 million (3.4%) in 2021 compared to 2020, primarily due toincreased volumes, wage inflation and health and welfare costs, partially offset by productivity improvements. Fuel expenses
increased $977 million (54.6%) compared to 2020, primarily due to higher average fuel prices. Purchased service expenses
increased $79 million (4.0%) compared to 2020, primarily due to higher volumes and the effects of insurance recoveries in2020 related to 2019 flooding, partially offset by improved productivity. Equipment rents, materials and other expenses
increased $79 million (4.7%) compared to 2020, due to higher volume-related costs.
2020 versus 2019
Railroad operating revenues declined 11.3% in 2020 versus 2019, reflecting a 7.2% decrease in volume and a 4.5%
decrease in average revenue per car/unit. The decrease in revenue per car/unit was attributable to lower fuel surcharge
revenue driven by lower fuel prices and business mix changes. The overall volume decrease was primarily due to the
COVID-19 pandemic, which severely impacted volumes through the first half of 2020 and caused significant economic
disruptions that adversely affected the demand for transportation services. Volumes sequentially improved during the second
half of 2020 from earlier periods and recovered overall to pre-pandemic levels by the end of the year.
Pre-tax earnings were $6.8 billion in 2020, a decrease of 6.3% from 2019, principally due to the negative impacts ofthe pandemic on volumes. In addition, pre-tax earnings in 2019 included an operating revenue increase related to thefavorable outcome of an arbitration hearing and a retirement plan curtailment gain that is included in other expenses, net in
the preceding table. These effects were partially offset by significant improvements in 2020 in service, system velocity andcost performance compared to 2019, along with lower costs related to severe winter weather and flooding on parts of the
network, which negatively affected expenses and service levels in 2019.
Operating revenues from consumer products of $7.3 billion in 2020 declined 7.6% compared to 2019, primarily due toa 6.3% decrease in average revenue per car/unit along with lower volumes. The volume decrease was primarily due to theimpact of the pandemic. Lower international and automotive volumes were offset by higher domestic intermodal volumes.
Increased retail sales, inventory replenishments by retailers and e-commerce activity produced recovery of intermodal
volumes in the second half of 2020.

K-42

Management’s Discussion and Analysis (Continued)
Railroad (Continued)
Operating revenues from industrial products were $5.0 billion in 2020, a decrease of 17.0% from 2019. The decrease
was primarily attributable to the decline in volume and to a lesser extent lower average revenue per car/unit. Volumes
decreased primarily due to lower U.S. industrial production driven by the pandemic, including reduced production anddemand in the energy sector, which lowered sand and petroleum products volume, and reduced steel demand, which loweredtaconite volume.
Operating revenues from agricultural products increased 2.9% to $4.8 billion in 2020 compared to 2019. The increase
was due to higher volumes, partially offset by slightly lower average revenue per car/unit. The volume increase was primarily
due to higher grain and meal exports, partially offset by lower ethanol and sweeteners shipments.
Operating revenues from coal decreased 28.5% to $2.7 billion in 2020 compared to 2019. This decrease was primarily
due to lower volumes, as well as lower revenues per car/unit. Volumes decreased primarily due to lower natural gas prices,
lower electricity demand driven by the pandemic, utility coal plant retirements and mild temperatures.
Railroad operating expenses declined 15.3% to $12.4 billion in 2020 as compared to 2019. The ratio of railroad
operating expenses to railroad operating revenues declined 2.9 percentage points to 61.6% in 2020 versus 2019. Railroad
operating expenses in 2020 reflected lower volume-related costs, productivity improvements, the effects of cost control
initiatives and improved weather conditions compared to 2019.
Compensation and benefits expenses decreased $728 million (13.8%) in 2020 compared to 2019, primarily due tolower employee counts associated with lower volume and improved workforce productivity. Fuel expenses decreased $1.2
billion (39.2%) compared to 2019, primarily due to lower average fuel prices, lower volumes and improved fuel efficiency.
Purchased services expense declined $95 million (4.6%) compared to 2019. The decrease was primarily due to lower volume,
improved productivity and higher insurance recoveries in 2020 related to network flooding in 2019. Equipment rents,
materials and other expense decreased $344 million (17.0%) compared to 2019, primarily due to lower volume-related costs,
the effects of cost controls and lower personal injury and derailment expenses.
Utilities and Energy
We currently own a 91.1% ownership interest in Berkshire Hathaway Energy Company (“BHE”), which operates a
global energy business. BHE’s domestic regulated utility interests include PacifiCorp, MidAmerican Energy Company(“MEC”) and NV Energy. BHE subsidiaries also operate two regulated electricity distribution businesses referred to as
Northern Powergrid in Great Britain. BHE’s natural gas pipelines consist of five domestic regulated interstate natural gas
pipeline systems and a 25% interest in a liquefied natural gas export, import and storage facility (“LNG interest”), which
BHE operates and consolidates for financial reporting purposes. Three of the natural gas pipeline systems and the LNG
interest were acquired on November 1, 2020 from Dominion Energy, Inc. (“BHE GT&S”). Other energy businesses include a
regulated electricity transmission-only business in Alberta, Canada (“AltaLink, L.P.”) and a diversified portfolio of mostly
renewable independent power projects and investments. BHE also operates the largest residential real estate brokerage firmand one of the largest residential real estate brokerage franchise networks in the United States.

K-43

Management’s Discussion and Analysis (Continued)
Utilities and Energy (Continued)
The rates our regulated businesses charge customers for energy and services are based in large part on the costs ofbusiness operations, including income taxes and a return on capital, and are subject to regulatory approval. To the extent suchcosts are not allowed in the approved rates, operating results will be adversely affected. A summary of BHE’s net earnings
follows (dollars in millions).
2021

Revenues:
Energy operating revenue
Real estate operating revenue
Other income (loss)
Total revenue
Costs and expense:
Energy cost of sales
Energy operating expense
Real estate operating costs and expense
Interest expense
Total costs and expense
Pre-tax earnings
Income tax expense (benefit)*
Net earnings after income taxes
Noncontrolling interests of BHE subsidiaries
Net earnings attributable to BHE
Noncontrolling interests and preferred stock dividends
Net earnings attributable to Berkshire Hathaway shareholders
Effective income tax rate
*

$

$

2020

18,9356,215(163)
24,987

$

5,504
8,535
5,710
2,054
21,803
3,184(1,177)
4,361
399
3,962
467
3,495 $
(37.0)%

2019

15,556
5,396
79
21,031

$

4,187
7,539
4,885
1,941
18,552
2,479(1,010)
3,489
71
3,418
327
3,091 $
(40.7)%

15,371
4,473
270
20,114
4,586
6,824
4,251
1,835
17,496
2,618
(526)
3,144
18
3,126
286
2,840
(20.1)%

Includes significant production tax credits from wind-powered electricity generation.

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 BHE follows (dollars in millions).
2021

PacifiCorp
MidAmerican Energy Company
NV Energy
Northern Powergrid
Natural gas pipelines
Other energy businesses
Real estate brokerage
Corporate interest and other

$

$

889 $
883
439
247
774
680
387
(337)
3,962 $

2020

741 $
818
410
201
528
697
375
(352)
3,418 $

2019

773
781
365
256
422
608
160
(239)
3,126

Percentage change
2021 vs 2020
2020 vs 2019

20.0%
7.9
7.1
22.9
46.6
(2.4)
3.2
(4.3)
15.9

(4.1)%
4.7
12.3(21.5)
25.1
14.6
134.4
47.3
9.3

2021 versus 2020
PacifiCorp operates a regulated electric utility in portions of several Western states, including Utah, Oregon andWyoming. After-tax earnings increased $148 million in 2021 compared to 2020. The increase reflected higher utility margin(operating revenue less cost of sales) and increased income tax benefits from the impacts of ratemaking as well as higher
production tax credits recognized on new wind-powered generating facilities placed in-service. The earnings increase waspartially offset by lower allowances for equity and borrowed funds used during construction and higher operating expenses.
Operating expenses in 2021 reflected increased depreciation expense from the impacts of a deprecation study effective
January 1, 2021, and incremental costs associated with wind-powered generating facilities placed in-service, offset by lower
costs associated with wildfires and a settlement agreement.

K-44

Management’s Discussion and Analysis (Continued)
Utilities and Energy (Continued)
PacifiCorp utility margin was $3.5 billion in 2021, an increase of $145 million compared to 2020. The increasereflected higher retail revenue from increases in customer volumes and higher wholesale and other revenue, partially offset
by higher thermal generation and purchased power costs. Retail customer volumes increased 3.1% in 2021 as compared to2020, primarily due to higher customer usage, an increase in the average number of customers and the favorable impacts ofweather.
MEC operates a regulated electric and natural gas utility primarily in Iowa and Illinois. After-tax earnings increased$65 million in 2021 compared to 2020. The increase reflected higher electric utility margin and increased income tax
benefits, partly offset by higher operating expenses. The increase in operating expenses included incremental costs associatedwith wind-powered generating facilities placed in-service and higher natural gas distribution costs, partially offset by lower
storm restoration costs. The income tax benefit increases were mainly due to higher production tax credits recognized on new
wind-powered generating facilities placed in-service, partially offset by the impacts of ratemaking.
MEC electric utility margin increased $190 million to $2.0 billion in 2021 compared to 2020. The electric utility
margin increase was attributable to higher operating revenue from increases in retail and wholesale customer volumes, aswell as favorable wholesale prices, partially offset by higher thermal generation and purchased power costs. Electric retailcustomer volumes increased 5.8% in 2021 as compared to 2020, primarily due to increased usage by certain industrial
customers and the favorable impacts of weather.
NV Energy operates regulated electric and natural gas utilities in Nevada. After-tax earnings increased $29 million in
2021 compared to 2020. The increase reflected lower operating expenses, lower net interest and finance expense and lower
income tax expense from the impacts of ratemaking, partially offset by lower electric utility margin. The decreases inoperating expenses were mainly due to lower earnings sharing, partially offset by higher depreciation expense fromadditional assets placed in-service.
NV Energy’s electric utility margin decreased $97 million to $1.6 billion in 2021 compared to 2020. The decrease wasprimarily due to revenue reductions from lower base tariff general rates in 2021 and a favorable regulatory decision in 2020,
partially offset by a 3.3% increase in electric retail customer volumes. The increase in electric retail customer volumes wasprimarily due to an increase in the average number of customers, higher customer usage and the favorable impacts ofweather.
Northern Powergrid’s after-tax earnings increased $46 million in 2021 compared to 2020. The increase reflected higher
tariff rates and units distributed, lower write-offs of gas exploration costs, lower pension expense and favorable foreign
currency exchange rate movements in 2021, partially offset by the impact of increases in the United Kingdom corporate
income tax rate. Earnings in 2021 included deferred income tax expense of $109 million related to the enactment in June
2021 of an increase in the income tax rate from 19% to 25%, effective April 1, 2023. Earnings in 2020 included deferredincome tax expense of $35 million related to the enactment in July 2020 of an increase in the income tax rate from 17% to19%, effective April 1, 2020.
Natural gas pipelines’ after-tax earnings increased $246 million in 2021 compared to 2020. Earnings in 2021 included
BHE GT&S for the full year compared to two months in 2020. The incremental earnings in 2021 from BHE GT&S were$211 million. In addition, earnings in 2021 reflected the effects of higher margins on natural gas sales and higher
transportation revenue at Northern Natural Gas due to increased demand from the February 2021 winter storms, partially
offset by lower transportation revenue primarily due to lower volumes for the remainder of the year.
Other energy businesses’ after-tax earnings in 2021 decreased $17 million compared to 2020. The decrease was mainly
due to a decline in wind tax equity investment earnings of $56 million, which included increased losses from pre-existing tax
equity investments of $165 million, largely attributable to the February 2021 winter storms, partially offset by increased
income tax benefits from projects reaching commercial operation over the past twelve months. Earnings in 2021 from otherenergy projects increased due to higher operating revenue from owned renewable energy projects and a transmission
investment, as well as favorable foreign currency exchange rate movements in 2021.
Real estate brokerage after-tax earnings increased $12 million in 2021 compared to 2020. The increase was due to acomparative increase in closed brokerage transaction volumes in 2021, partially offset by lower funded mortgage volume due
to a decrease in refinance activity.
Corporate interest and other after-tax earnings increased $15 million in 2021 compared to 2020. The increase wasprimarily due to favorable comparative state income tax benefits and higher earnings from non-regulated energy services,
offset by higher operating expenses and higher interest expense from corporate debt issued in 2020.

K-45

Management’s Discussion and Analysis (Continued)
Utilities and Energy (Continued)
2020 versus 2019
PacifiCorp after-tax earnings decreased $32 million in 2020 compared to 2019. The decrease reflected higher operating
expenses and net interest expense, partially offset by increased production tax credit benefits driven by repowered windprojects placed in-service, higher utility margin and higher other income. The increase in operating expenses was largely due
to costs associated with wildfires, a settlement agreement and pension benefits.
PacifiCorp utility margin was $3.3 billion in 2020, an increase of $47 million compared to 2019. The increase reflected
higher operating revenue from an increase in average retail prices and lower generation and purchased power costs, partially
offset by lower operating revenue from a decline in retail customer volumes. The decline in retail customer volumes was dueto the impacts of the pandemic, partly offset by an increase in the average number of customers and the favorable impacts ofweather.
MEC after-tax earnings increased $37 million in 2020 compared to 2019. The increase reflected increased income tax
benefits, primarily from production tax credits, driven by repowered and new wind projects placed in-service, and the effectsof ratemaking. These effects were partially offset by higher depreciation expense from additional assets placed in-service,higher net interest expense, lower other income and lower electric and natural gas utility margins.
MEC electric utility margin decreased $10 million to $1.8 billion in 2020 compared to 2019. The electric utility margindecrease was attributable to lower operating revenue from unfavorable wholesale prices and price impacts from changes inretail sales mix. These effects were mostly offset by lower generation and purchased power costs and higher operating
revenue from a 1.2% increase in retail customer volumes. The increase in electric retail customer volumes was primarily due
to increased usage by certain industrial customers, partially offset by the impacts of the pandemic. Natural gas utility margindecreased $9 million in 2020 compared to 2019, due to the unfavorable impacts of weather.
NV Energy after-tax earnings increased $45 million in 2020 compared to 2019. The increase reflected higher electricutility margin and lower income tax expense from the favorable impacts of ratemaking, partially offset by higher operating
expenses. The increase in operating expenses was mainly due to higher earnings sharing accruals for customers at Nevada
Power Company and higher depreciation expense from additional assets placed in-service.
NV Energy electric utility margin increased $100 million to $1.7 billion in 2020 compared to 2019. The increase wasprimarily due to higher operating revenue from a 1.5% increase in electric retail customer volumes, including distributiononly service customers and price impacts from changes in retail sales mix. The increase in electric retail customer volumes
was primarily due to the favorable impacts of weather, partially offset by the impacts of the pandemic.
Northern Powergrid after-tax earnings decreased $55 million in 2020 compared to 2019. The earnings decreasereflected write-offs of gas exploration costs and higher income tax expense, in large part from a change in the United
Kingdom corporate income tax rate, partially offset by lower pension costs and interest expense.
Natural gas pipelines after-tax earnings increased $106 million in 2020 compared to 2019. The increase was primarily
due to $73 million of earnings from BHE GT&S, the favorable impact of a rate case settlement at Northern Natural Gas andhigher transportation volume and rates, partially offset by higher depreciation, operating expenses and interest expenses.
Other energy business after-tax earnings in 2020 increased $89 million compared to 2019. The increase was primarily
due to increased income tax benefits from renewable wind tax equity investments, largely from projects reaching commercial
operation, partially offset by lower operating revenue and higher operating expenses from geothermal and natural gas units.
Real estate brokerage after-tax earnings increased $215 million in 2020 compared to 2019. The increase reflected
higher earnings from mortgage and brokerage services. The increase in earnings from mortgage services was attributable tohigher refinance activity from the favorable interest rate environment and the earnings increase from brokerage services wasdue to an increase of 13.1% in closed transaction dollar volume.
Corporate interest and other after-tax earnings decreased $113 million in 2020 compared to 2019. The decline wasprimarily due to higher interest expense and lower state income tax benefits.

K-46

Management’s Discussion and Analysis (Continued)
Manufacturing, Service and Retailing
A summary of revenues and earnings of our manufacturing, service and retailing businesses follows (dollars inmillions).

Revenues
Manufacturing
Service and retailing
Pre-tax earnings
Manufacturing
Service and retailing
Income taxes and noncontrolling interests
Net earnings*
Effective income tax rate
Pre-tax earnings as a percentage of revenues
*

2021

2020

2019

$ 68,730
84,282$ 153,012$ 59,079
75,018$ 134,097$ 62,730
79,945$ 142,675$

9,841 $ 8,010 $ 9,522
4,711
2,879
2,843
14,552
10,88912,365
3,432
2,589
2,993
$ 11,120 $ 8,300 $ 9,372
23.0%
23.3%
23.7%
9.5%
8.1%
8.7%

Percentage change
2021 vs 2020
2020 vs 2019

16.3%
12.3
14.1

(5.8)%
(6.2)
(6.0)

22.9%
63.6
33.6

(15.9)%
1.3(11.9)

Excludes certain acquisition accounting expenses, which primarily related to the amortization of identified intangible
assets recorded in connection with our business acquisitions. The after-tax acquisition accounting expenses excluded
from earnings above were $690 million in 2021, $783 million in 2020 and $788 million in 2019. In 2020, net earnings
also excluded after-tax goodwill and indefinite-lived intangible asset impairment charges of $10.4 billion. These
expenses are included in “Other” in the summary of earnings on page K-32 and in the “Other Berkshire corporate”
earnings section on page K-56.
Manufacturing

Our manufacturing group includes a variety of industrial, building and consumer products businesses. A summary ofrevenues and pre-tax earnings of our manufacturing operations follows (dollars in millions).

Revenues
Industrial products
Building products
Consumer products
Pretax earnings
Industrial products
Building products
Consumer products

2020

2019

$ 28,176
24,974
15,580$ 68,730$ 25,667
21,244
12,168$ 59,079$ 30,594
20,327
11,809$ 62,730

9.8%
17.6
28.0

(16.1)%
4.5
3.0

$

$

$

19.0%
18.6
41.9

(33.4)%
8.4
11.7$
Pre-tax earnings as a percentage of revenues
Industrial products
Building products
Consumer products

Percentage change
2021 vs 2020
2020 vs 2019

2021

4,469
3,390
1,982
9,841
15.9%
13.6%
12.7%

K-47

$

3,755
2,858
1,397
8,010
14.6%
13.5%
11.5%

$

5,635
2,636
1,251
9,522
18.4%
13.0%
10.6%

Management’s Discussion and Analysis (Continued)
Manufacturing, Service and Retailing (Continued)
Industrial products
The industrial products group includes metal 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, which consists of more than 100 autonomous manufacturing
and service businesses, internally aggregated into eleven groups, and includes equipment leasing for the rail, intermodal tankcontainer and mobile crane industries. The industrial products group also includes equipment and systems for the livestock
and agricultural industries (CTB International) and a variety of industrial products for diverse markets (Scott Fetzer andLiquidPower Specialty Products).
2021 versus 2020
Revenues of the industrial products group in 2021 increased $2.5 billion (9.8%) from 2020. Pre-tax earnings increased$714 million (19.0%) compared to 2020 and pre-tax earnings as a percentage of revenues in 2021 was 15.9%, an increase of
1.3 percentage points compared 2020.
PCC’s revenues were $6.5 billion in 2021, a decrease of $853 million (11.6%) compared to 2020. Historically, PCC
has derived significant revenues and earnings from aerospace products. The COVID-19 pandemic contributed to material
declines in commercial air travel and original equipment manufacturing (“OEM”) aircraft production in 2021 and 2020.
While commercial air travel increased in both the U.S. and international markets in 2021 versus 2020, demand remains well
below pre-pandemic levels, especially for international routes. Long-term industry forecasts continue to show growth andstrong demand for travel, however, the recovery has been uneven between domestic and international markets. Air traffic
recovery will continue to be impacted by the pandemic, though likely more on a seasonal or localized basis as the pandemic
shifts to an endemic phase. Near term recovery in build rates will lag recovery in air travel due to the significant finishedgoods inventory following quality issues with the Boeing 737 and Boeing 787 planes and industry supply chain issues.
PCC’s pre-tax earnings in 2021 were $1.2 billion, an increase of 78.8% compared to 2020. The increase reflects theactions taken by management to resize, restructure and improve operations and to prepare for more normalized demand for
PCC’s products, as well as from a decline in restructuring costs. We do not expect significant increases in PCC’s aerospacerevenues or earnings to occur in the near term, primarily due to the relatively low aircraft build rates related to Boeing’s
significant inventory levels and the ongoing impact of the COVID-19 pandemic on commercial air travel.
Lubrizol’s revenues were $6.5 billion in 2021, an increase of 8.6% compared to 2020. The increase reflects higher
average selling prices, driven by significant increases in materials and other manufacturing costs, as well as slightly higher
volumes. Sales volumes in the Additives product lines were negatively affected by severe winter storms in February 2021,
which caused the temporary shut-down of several U.S. facilities, as well as other temporary production shut-downs in thesecond half of 2021.
Lubrizol’s pre-tax earnings in 2021 decreased 50.8% compared to 2020. Earnings in 2021 included significant losses
related to a fire in June 2021 at a facility of Chemtool Incorporated, a Lubrizol subsidiary, located in Rockton, Illinois andimpairment charges in the second half of 2021 related to an underperforming business in the Advanced Materials productlines. These losses and charges aggregated $257 million in 2021. Earnings in 2021 were also negatively impacted by theeffects of accelerating raw material costs and the previously mentioned temporary shut-down of Additives production
facilities, which resulted in lost sales and incremental manufacturing costs.
Marmon’s revenues were $9.8 billion in 2021, an increase of $2.1 billion (27.9%) compared to 2020. Revenues in 2021
from the Electrical, Metal Services and Plumbing & Refrigeration groups increased 54% over 2020, accounting for over halfof the aggregate increase in Marmon’s revenues. These increases were attributable to higher volumes and prices, including
the impact of significantly higher average copper and metal prices. Revenues of most of Marmon’s other groups, particularly
those serving the construction, automotive, heavy-duty truck and restaurant markets, also increased in 2021, reflecting higher
volumes and favorable foreign currency translation effects. These increases were partially offset by the impact of divestituresand business closures in the Water Technologies and Retail Solutions groups and lower lease revenues in the Rail & Leasinggroup, reflecting fewer railcars on lease and changes in lease mix.
Marmon’s pre-tax earnings in 2021 increased 40.3% compared to 2020. The increase was primarily due to earnings
increases in the Electrical, Metal Services and Plumbing & Refrigeration groups due to higher volumes and average margins.
Earnings of several other business groups also increased attributable to higher sales volumes, sales mix changes and lower
restructuring charges, which were partially offset by lower earnings from the Rail & Leasing and Water Technologies groups.

K-48

Management’s Discussion and Analysis (Continued)
Manufacturing, Service and Retailing (Continued)
Industrial products (Continued)
IMC’s revenues increased 19.5% in 2021 compared to 2020, reflecting improving business conditions in mostgeographic regions and favorable foreign currency translation effects. IMC’s pre-tax earnings increased 47.7% in 2021 versus
2020, primarily attributable to higher customer demand, improved manufacturing efficiencies, operating cost managementsaving initiatives and favorable foreign currency translation effects.
2020 versus 2019
Revenues of the industrial products group in 2020 declined $4.9 billion (16.1%) from 2019, while pre-tax earnings
declined $1.9 billion (33.4%). Pre-tax earnings as a percentage of revenues for the group was 14.6% in 2020 compared to
18.4% in 2019.
PCC’s revenues were $7.3 billion in 2020, a decrease of $3.0 billion (28.9%) compared to 2019. The COVID-19
pandemic contributed to material declines in commercial air travel and aircraft production. Airlines responded to thepandemic by delaying delivery of aircraft orders or, in some cases, cancelling aircraft orders, resulting in significant
reductions in build rates by aircraft manufacturers and significant inventory reduction initiatives by PCC’s customers.
Further, Boeing’s 737 MAX aircraft production issues contributed to the declines in aerospace product sales across theindustry in 2020. These factors resulted in significant declines in demand for PCC’s aerospace products in 2020. PCC’s salesof products for power markets increased 2.2% in 2020, primarily driven by increases in industrial gas turbine products, offset
by reductions in oil and gas products.
PCC’s pre-tax earnings were $650 million in 2020, a decrease of 64.5% compared to 2019, which reflected the decline
in aerospace product sales as well as increased manufacturing inefficiencies attributable to lower volumes. In response to theeffects of the pandemic, PCC took aggressive restructuring actions to resize operations in response to reduced expectedvolumes in aerospace markets. PCC’s worldwide workforce was reduced by about 40% from the end of 2019. PCC recorded
restructuring, inventory and fixed asset charges of approximately $295 million in 2020. Earnings as a percentage of revenues
were negatively impacted in 2020 due to inefficiencies associated with aligning operations to reduced aircraft build rates.
Lubrizol’s revenues were $5.95 billion in 2020, a decrease of 8.0% compared to 2019. The decline was primarily
attributable to lower volumes from economic effects of the pandemic and a fire at an Additives manufacturing, blending andstorage facility in Rouen, France at the end of the third quarter of 2019, which resulted in the temporary suspension ofoperations. Revenues in 2020 also reflected lower selling prices, partly offset by favorable changes in sales mix. Lubrizol’s
consolidated volume for the year declined 9% in 2020 compared to 2019 due to declines in the Additives and Engineered
Materials product lines, partly offset by higher volumes in Life Science products.
Lubrizol’s pre-tax earnings in 2020 were approximately $1.0 billion, essentially unchanged compared to 2019. The
effects of lower sales volumes, including the effects from the Rouen fire, and lower average selling prices were offset bylower average raw material costs, lower operating expenses and insurance recoveries in 2020 associated with the Rouen fire.
Marmon’s revenues were $7.6 billion in 2020, a decrease of $681 million (8.2%) compared to 2019. Excluding theeffects of business acquisitions, revenues decreased in essentially all groups, primarily attributable to lower demand from theeffects of the pandemic. The largest effects were experienced in the Transportation Products and Foodservice Technologies
groups. Additionally, revenues decreased due to lower metal prices in the Metal Services group and the effect of businessdivestitures in 2019. Declines in oil prices in 2020 also adversely affected demand and revenues in the Rail & Leasing andCrane Services groups. Marmon acquired the Colson Medical companies on October 31, 2019, which represents Marmon’s
Medical group.
Marmon’s pre-tax earnings in 2020 decreased $312 million (24.3%) compared to 2019. The decrease reflected thedeclines in revenues and increased restructuring charges. Restructuring initiatives were initiated in response to the lower
product demand, particularly in the sectors most impacted by the pandemic.

K-49

Management’s Discussion and Analysis (Continued)
Manufacturing, Service and Retailing (Continued)
Industrial products (Continued)
IMC’s revenues declined 13.2% in 2020 compared to 2019, reflecting negative economic effects from the pandemic on
demand for cutting tools in most geographic regions, partly offset by the effects of business acquisitions. IMC’s pre-tax
earnings declined 26.6% in 2020 versus 2019, attributable to declines in sales and margins due to lower volumes and tochanges in sales mix.
Building products
The building products group includes manufactured and site-built home construction and related lending and financial
services (Clayton Homes), flooring (Shaw), insulation, roofing and engineered products (Johns Manville), bricks andmasonry products (Acme Building Brands), paint and coatings (Benjamin Moore) and residential and commercial
construction and engineering products and systems (MiTek).
2021 versus 2020
Revenues of the building products group increased $3.7 billion (17.6%) in 2021 and pre-tax earnings increased $532
million (18.6%) compared to 2020. Pre-tax earnings as percentages of revenues were 13.6% in 2021 and 13.5% in 2020.
During 2021, our businesses experienced strong customer demand and higher sales volumes. We also experienced various
forms of supply chain disruptions, which affected the general economy, and contributed to considerable raw material andlogistics cost inflation and supply constraints.
Clayton Homes’ revenues were approximately $10.5 billion in 2021, an increase of $1.9 billion (22.2%) over 2020.
Revenues from home sales increased $1.8 billion (26.5%) in 2021 to approximately $8.3 billion, reflecting increased revenue
per home sold, changes in sales mix and a net increase in new units sold. Unit sales of site-built homes increased 15.8% in
2021, while factory-built manufactured home unit sales increased 1.5%. Site-built home unit sales were constrained by longer
construction periods arising from supply chain constraints and labor shortages. Financial services revenues, which include
mortgage origination and services, insurance and interest income from lending activities, increased 7.8% in 2021 compared
to 2020. Loan balances, net of allowances for credit losses, were approximately $18.8 billion as of December 31, 2021, an
increase of approximately $1.7 billion compared to December 31, 2020.
Pre-tax earnings of Clayton Homes were approximately $1.7 billion in 2021, an increase of $440 million (35.3%)
compared to 2020. Earnings in 2021 reflected higher earnings from home sales, mortgage originations, net interest income
and lower provisions for expected credit losses, partially offset by the impact of rising manufacturing and supply chain costs.
The provision for expected credit losses in 2020 was unusually high and included provisions for the expected impact of the
COVID-19 pandemic. The comparative decline in the provision for expected credit losses was due to fewer actual andanticipated loan foreclosures.
Aggregate revenues of our other building products businesses were approximately $14.5 billion in 2021, an increase of
14.4% versus 2020. The increase was primarily due to higher average selling prices driven by significantly higher input andsupply chain costs, as well as higher unit volumes for paint and coatings, flooring, insulation, roofing and other engineered
products.
Pre-tax earnings of the other building products businesses were approximately $1.7 billion in 2021, an increase of 5.7%
over 2020. Pre-tax earnings as a percentage of revenues was 11.8% in 2021, a 1.0 percentage point decrease compared to2020. While customer demand in 2021 was generally strong, reduced availability of materials and other product inputs fromsupply chain disruptions negatively affected sales and operating results. In addition, higher costs for raw materials and freightand higher restructuring and impairment charges contributed to the reduction in our pre-tax margin rates.
2020 versus 2019
Revenues of the building products group increased $917 million (4.5%) in 2020 compared to 2019 and pre-tax earnings
increased $222 million (8.4%) over 2019. Pre-tax earnings as percentages of revenues were 13.5% in 2020 and 13.0% in
2019.

K-50

Management’s Discussion and Analysis (Continued)
Manufacturing, Service and Retailing (Continued)
Building products (Continued)
Clayton Homes’ revenues were approximately $8.6 billion in 2020, an increase of $1.3 billion (17.1%) over 2019. The
increase was primarily due to increases in home sales of $1.0 billion (18.4%), driven by increases in units sold and revenue
per home sold and by changes in sales mix. Unit sales of site-built homes increased 28.6% in 2020 over 2019, while revenue
per home increased slightly. Manufactured home unit sales increased 2.8% in 2020. Financial services revenues increased
13.7% in 2020 compared to 2019, attributable to increased loan originations and average outstanding loan balances. Loanbalances, net of allowances for credit losses, were approximately $17.1 billion at December 31, 2020 compared to$15.9 billion as of December 31, 2019.
Pre-tax earnings of Clayton Homes were approximately $1.25 billion in 2020, an increase of $152 million (13.9%)
compared to 2019. The earnings increase reflected higher earnings from home sales, partly offset by higher materials costs,
which lowered manufactured housing gross margin rates. Earnings in 2020 also benefitted from increased interest income,lower interest expense and higher earnings from mortgage services, partly offset by increased provisions for credit andinsurance losses.
Aggregate revenues of our other building products businesses were approximately $12.6 billion in 2020, a decrease of
2.6% versus 2019. The revenue decrease reflected lower flooring volumes, in part attributable to the negative effects of the
COVID-19 pandemic, partially offset by increased paint and coatings volumes, including volumes from a new agreementwith Ace Hardware Stores, and increased volumes in residential markets.
Pre-tax earnings of the other building products businesses were approximately $1.6 billion in 2020, an increase of 4.6%
over 2019. The earnings increase reflected the effects of lower average input costs, operating cost containment efforts andlower facilities closure costs.
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 custom picture framing products (Larson-Juhl) and jewelry products(Richline).
2021 versus 2020
Consumer products revenues increased $3.4 billion (28.0%) in 2021 versus 2020. Revenues from Forest River
increased 40.2% in 2021 compared to 2020, driven by a 27.6% increase in recreational vehicle unit sales and higher average
selling prices, primarily due to significant increases in manufacturing costs.
Revenues of several of our other consumer products businesses were significantly higher in 2021 as compared to 2020.
The initial impacts of the pandemic in the first half of 2020 from temporary retail store closures and reduced demand had asevere impact on most of these businesses. Apparel and footwear revenues increased 25.3% in 2021 compared to 2020,reflecting significant increases in unit sales, partly attributable to inventory restocking by certain customers, and fromincreased consumer demand. Revenues from Richline increased 39.9%, while revenues from Duracell increased 2.4%.
Consumer products pre-tax earnings increased $585 million (41.9%) in 2021 compared to 2020 and as a percentage ofrevenues in 2021 increased 1.2 percentage points to 12.7%. The increase reflected significant earnings increases at many ofour businesses, driven by Forest River, the apparel and footwear businesses, Richline and Larson-Juhl. However, ourconsumer products businesses, particularly the apparel and footwear businesses, also experienced significant cost increases
and supply chain disruptions, causing pre-tax margins in the second half of 2021 to be 1.1 percentage points lower than in thefirst half of the year.
2020 versus 2019
Consumer products revenues increased $359 million (3.0%) in 2020 versus 2019, while pre-tax earnings increased$146 million (11.7%). Pre-tax earnings as a percentage of revenues in 2020 increased 0.9 percentage points to 11.5%.

K-51

Management’s Discussion and Analysis (Continued)
Manufacturing, Service and Retailing (Continued)
Consumer products (Continued)
The comparative increase in revenues reflected increases from Forest River and Duracell, partially offset by lower
apparel and footwear revenues. Forest River revenues increased 11.7% in 2020 compared to 2019, primarily attributable to asignificant increase in recreational vehicle unit sales over the last half of the year and changes in sales mix. Unit sales in thesecond half of 2020 increased 31% over the second half of 2019. Revenues from Duracell increased 10.0% in 2020 compared
to 2019, reflecting the effects of changes in sales mix and increased volume. Apparel and footwear revenues declined 6.1% in2020 compared to 2019.
Apparel and footwear sales volumes in the first half of 2020, particularly in the second quarter, reflected the negative
effects of the pandemic, which included retail store closures, reduced or cancelled orders and pandemic-related disruptions atcertain manufacturing facilities. Sales recovered somewhat in the second half of 2020, attributable to higher consumer
demand and inventory restocking by retailers. Brooks Sports revenues were higher, partly attributable to the effect of the
reduced sales in 2019 that were caused by shipping delays at a new distribution facility.
Pre-tax earnings were $1.4 billion in 2020, an increase of $146 million (11.7%) compared to 2019. The increase wasprimarily attributable to Forest River and Duracell, partially offset by lower earnings from apparel and footwear. The overall
increase reflected the effects of sales volumes changes and ongoing expense management efforts.
Service and retailing
A summary of revenues and pre-tax earnings of our service and retailing businesses follows (dollars in millions).

Revenues
Service
Retailing
McLanePre-tax earnings
Service
Retailing
McLane2020

2019$ 15,872
18,96049,450$ 84,282$ 12,346
15,832
46,840$ 75,018$ 13,496
15,99150,458$ 79,945

28.6%
19.8
5.6

(8.5)%
(1.0)
(7.2)

$

$

$

67.0%
76.0
(8.4)

(4.8)%
17.6(12.8)$
Pre-tax earnings as a percentage of revenues
Service
Retailing
McLanePercentage change
2021 vs 2020
2020 vs 2019

2021

2,672
1,809
230
4,711
16.8%
9.5%
0.5%

$

1,600
1,028
251
2,879
13.0%
6.5%
0.5%

$

1,681
874
288
2,843
12.5%
5.5%
0.6%

ServiceOur service group consists of several businesses. The largest of these businesses are NetJets and FlightSafety (aviation
services), which offer shared ownership programs for general aviation aircraft and high technology training products andservices to operators of aircraft, and TTI, a distributor of electronics components. Our other service businesses franchise andservice 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) and operate a television station in Miami,
Florida (WPLG).

K-52

Management’s Discussion and Analysis (Continued)
Manufacturing, Service and Retailing (Continued)
Service (Continued)
2021 versus 2020
Service group revenues increased $3.5 billion (28.6%) in 2021 compared to 2020, primarily attributable to higher
revenues from TTI and the aviation services businesses. Revenues from TTI increased 37.4% in 2021 versus 2020, primarily
attributable to significantly higher volumes across all significant markets and product categories, and to a lesser extent,
higher average prices and changes in sales mix. Customer demand accelerated throughout 2021, as customers attempted tomaintain adequate inventories in response to high demand for components in end products and effects of supply chain
disruptions. Revenues from aviation services increased 27.5% in 2021 over low 2020 levels, primarily due to higher training
hours (24%) and customer flight hours (70%).
Pre-tax earnings of our service business group increased $1.1 billion (67.0%) to $2.7 billion. Pre-tax earnings of thegroup as a percentage of revenues were 16.8% in 2021, an increase of 3.8 percentage points compared to 2020. Earnings atnearly all service businesses increased in 2021 compared to 2020, with the largest increases from TTI, the aviation services
businesses and the XTRA leasing business. TTI’s earnings increase was primarily attributable to the increases in sales
volumes, as well as from improved operating cost leverage and changes in sales mix. The increase in earnings from aviation
services was attributable to the favorable effects of higher volume, changes in business mix, increased operating efficiencies,
lower impairment charges and the effects of past restructuring efforts, partly offset by higher subcontractor costs attributable
to the significant increase in flight demand.
2020 versus 2019
Service group revenues declined $1.15 billion (8.5%) in 2020 compared to 2019 and pre-tax earnings decreased $81
million (4.8%). Pre-tax earnings of the group as a percentage of revenues were 13.0% in 2020, an increase of 0.5 percentage
points compared to 2019.
The aggregate revenues of NetJets and FlightSafety in 2020 declined $816 million (13.5%) compared to 2019,reflecting lower demand for air travel and aviation services attributable to the COVID-19 pandemic. NetJets experienced adecline in customer flight hours of 27% and FlightSafety’s commercial and corporate simulator training hours declined 30%
from 2019. The comparative service group revenue decline also reflected the disposition of the newspaper operations inMarch of 2020 and lower revenues from CORT, which was driven by lower demand attributable to the pandemic. These
declines were partially offset by revenue increases from TTI and WPLG.
The decline in earnings reflected lower earnings from NetJets, TTI and CORT and the divestiture of the newspaper
operations, partly offset by higher earnings from XTRA, Business Wire, WPLG and FlightSafety. TTI’s earnings declinereflected lower average gross margin rates, attributable to product mix changes and sales price pressures deriving from ample
inventory availability. The decline at NetJets was primarily attributable to increased asset impairment charges andrestructuring costs, partly offset by lower general and administrative expenses and a slight net increase in margins. The
decline at CORT was driven by lower revenues, partly offset by the effects of cost control initiatives. The increase at
FlightSafety was attributable to the effects of contract losses of approximately $165 million recorded in 2019 with respect toan existing government contract and cost control efforts in 2020, which more than offset significantly lower earnings fromcommercial and corporate training services.
Retailing
Our largest retailing business is Berkshire Hathaway Automotive, Inc. (“BHA”), representing 62% of our combined
retailing revenue in 2021. BHA consists of over 80 auto dealerships that sell new and pre-owned automobiles and offer repair
services and related products. BHA also operates two insurance businesses, two auto auctions and an automotive fluid
maintenance products distributor. Our retailing businesses also include four home furnishings retailing businesses (Nebraska
Furniture Mart, R.C. Willey, Star Furniture and Jordan’s), which sell furniture, appliances, flooring and electronics. The
home furnishings group represented 21% of the combined retailing revenues in 2021.
Other retailing businesses include three jewelry retailing businesses (Borsheims, Helzberg and Ben Bridge), See’s
Candies (confectionary products), Pampered Chef (high quality kitchen tools), Oriental Trading Company (party supplies,
school supplies and toys and novelties) and Detlev Louis Motorrad (“Louis”), a retailer of motorcycle accessories based inGermany.

K-53

Management’s Discussion and Analysis (Continued)
Manufacturing, Service and Retailing (Continued)
Retailing (Continued)
2021 versus 2020
Retailing group revenues in 2021 increased $3.1 billion (19.8%) compared to 2020. BHA’s revenues increased 19.0%
in 2021 compared to 2020, with vehicle sales, service and repair, and finance and service contract revenues each increasing
versus 2020. Revenues from vehicle sales in 2021 increased $1.7 billion (20.7%) versus 2020, primarily due to higher
average selling prices, as well as a 2.7% increase in units sold. However, new vehicle unit sales in the second half of 2021
declined 18% compared to the second half of 2020, reflecting significant new vehicle supply shortages at OEMs attributable
to the global computer chip shortages and other supply chain disruptions. Home furnishings group revenues increased 22.0%
in 2021 as compared to 2020, attributable to higher consumer demand and higher average selling prices, driven by higher
inventory and freight costs.
Pre-tax earnings in 2021 of the retailing group increased $781 million (76.0%) from 2020 and the pre-tax margin rateincreased 3.0 percentage points to 9.5%. BHA’s pre-tax earnings increased 47.5% in 2021 compared to 2020, primarily due
to increased vehicle sales margins and higher earnings from finance and service contract activities. In addition, earnings in
2021 benefitted from lower floorplan interest expense, attributable to significant declines in inventory levels, and fromongoing operating cost control efforts.
Home furnishings group pre-tax earnings increased 67.6% in 2021 versus 2020, reflecting generally higher averagegross margin rates and sales mix changes and cost control efforts, partly offset by higher personnel costs. Aggregate pre-tax
earnings for the remainder of our retailing group increased $321 million in 2021 compared to 2020. The initial effects of thepandemic in 2020 were severe for most of our other retailers due to the restricted operations at many of those businesses.
Results in 2021 also benefitted from relatively strong consumer demand and the effects of restructuring efforts in 2020.
2020 versus 2019
Retailing group revenues in 2020 declined $159 million (1.0%) compared to 2019. The spread of COVID-19 resulted
in the temporary closures or restricted operations at several of our retailing businesses and effected consumer spending
patterns during 2020. The severity and duration of the effects from the pandemic varied widely at our retail operations.
BHA’s revenues decreased 2.9% in 2020 compared to 2019. BHA’s revenues in 2020 reflected decreases in new andpre-owned vehicle sales of 2.6%, as well as lower vehicle service and repair revenues. Home furnishings revenues were
essentially unchanged in 2020 compared to 2019. The retailing group experienced lower revenues in the first half of 2020,
attributable to restricted store hours, which were substantially offset by increased revenues over the second half of the year.
However, supply chain disruptions had a negative effect on obtaining product at certain times, which negatively affectedsales levels.
The effects of the pandemic contributed to significantly lower sales in 2020 for our jewelry stores, See’s Candies andOriental Trading Company, which were more than offset by significant revenue increases from Pampered Chef and Louis.
Sales volumes generally increased and operating results improved beginning in the latter part of the second quarter as ouroperations slowly reopened.
Retail group pre-tax earnings increased $154 million (17.6%) in 2020 from 2019. BHA’s pre-tax earnings increased
37.7%, primarily due to lower selling, general and administrative expenses, lower floorplan interest expense and higher
average gross sales margin rates. Aggregate pre-tax earnings for the remainder of our retailing group increased 1.1% in 2020
compared to 2019, reflecting higher earnings from the home furnishings businesses and from Pampered Chef, which were
substantially offset by lower earnings from our other retailing operations.
Home furnishings group pre-tax earnings increased $79 million (36%) in 2020 versus 2019, reflecting generally higher
average gross margin rates, sales mix changes and fewer sales promotions and lower advertising and other operating
expenses. Certain of our other operations, including Pampered Chef and Louis experienced significant earnings increases in
2020, while others, including See’s Candies and Oriental Trading Company, experienced significant declines driven by thenegative effects of the pandemic.

K-54

Management’s Discussion and Analysis (Continued)
Manufacturing, Service and Retailing (Continued)
Retailing (Continued)
McLaneMcLane Company, Inc. (“McLane”) operates a wholesale distribution business that provides grocery and non-foodconsumer products to retailers and convenience stores (“grocery”) and to restaurants (“foodservice”). McLane also operates
businesses that are wholesale distributors of distilled spirits, wine and beer (“beverage”). The grocery and foodservice
businesses generate high sales and very low profit margins. These businesses have several significant customers, including
Walmart, 7-Eleven, Yum! Brands and others. Grocery sales comprised about 63% of McLane’s consolidated sales in 2021
with food service comprising most of the remainder. A curtailment of purchasing by any of its significant customers could
have an adverse impact on periodic revenues and earnings.
2021 versus 2020
Revenues increased $2.6 billion (5.6%) in 2021 compared to 2020. Revenues from the grocery business increased 1.5%
compared to 2020, while revenues from the foodservice and beverage businesses increased 13.1% and 17.8%, respectively.
The foodservice business was significantly impacted by pandemic-related restaurant closures in 2020.
Pre-tax earnings decreased $21 million (8.4%) in 2021 as compared to 2020. The decrease reflected significant
increases in personnel, contract transportation and fuel costs, which more than offset the favorable impact of higher sales andslightly higher gross sales margins. McLane’s grocery and food service operations were significantly affected in 2021 by
upstream supply chain constraints, including the effects of labor and truck driver shortages, which contributed to higher
inventory costs reflected in a LIFO inventory reserve increase of $130 million, and disruptions in inventory availability.
These upstream supply chain effects, together with the truck driver and warehouse personnel shortages that we areexperiencing, adversely affected our customer service levels and reduced our operating efficiencies. In response, our hiring
and wage and benefits costs increased significantly in 2021. The increase in fuel expense was primarily attributable tosignificant increases in petroleum prices. We expect the current difficult operating environment to continue through 2022.
2020 versus 2019
Revenues declined $3.6 billion (7.2%) in 2020 compared to 2019. The decline was attributable to COVID-19-related
restaurant closures (particularly in the casual dining category) in the foodservice business and lower sales in certain productcategories within the grocery business. McLane operates on a 52/53-week fiscal year and 2020 included 52 weeks compared
to 53 weeks in 2019. Otherwise, revenues declined 5.2% in the grocery business and 7.7% in the foodservice business in2020 as compared to 2019.
Pre-tax earnings decreased $37 million (12.8%) in 2020 as compared to 2019. The earnings decrease included theeffects of increased LIFO inventory reserves of $22 million, credit and inventory losses of $12 million in the foodservice
operations and the impact of lower sales.
Investment and Derivative Contract Gains/Losses
A summary of investment and derivative contract gains/losses follows (dollars in millions).
2021

Investment gains/losses
Derivative contract gains/losses
Gains/losses before income taxes and noncontrolling interests
Income taxes and noncontrolling interests
Net earnings
Effective income tax rate

K-55

$

$

77,576 $966
78,542
16,202
62,340 $
20.4%

2020

40,905 $(159)
40,746
9,155
31,591 $
21.7%

2019

71,123
1,484
72,607
15,16257,44520.9%

Management’s Discussion and Analysis (Continued)
Investment and Derivative Contract Gains/Losses (Continued)
Investment gains/losses
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 due to the magnitude of ourequity securities portfolio and the inherent volatility of equity securities prices. Pre-tax investment gains/losses included net
unrealized gains of approximately $76.4 billion in 2021, $55.0 billion in 2020 and $69.6 billion in 2019 attributable tochanges in market prices of equity securities we held at the end of each year. In each year, we also recorded pre-tax gains andlosses from market value changes during each year on equity securities sold during such year, including gains of $1.0 billion
in 2021, losses of $14.0 billion in 2020 and gains of $1.6 billion in 2019. Taxable investment gains on equity securities sold,which is generally the difference between sales proceeds and the original cost basis of the securities sold, were $3.6 billion in
2021, $6.2 billion in 2020 and $3.2 billion in 2019.
We believe that investment gains/losses, whether realized from sales or unrealized from changes in market prices, areoften meaningless in terms of understanding our periodic consolidated earnings or evaluating our periodic economic
performance. We continue to believe the investment gains/losses recorded in earnings, including the changes in market prices
for equity securities, in any given period has little analytical or predictive value.
Derivative contract gains/losses
Derivative contract gains/losses include the changes in fair value of our equity index put option contract liabilities,
which relate to contracts that were originated prior to March 2008. A vast majority of these contracts have since expired.
Contracts comprising 63% of the remaining notional value as of December 31, 2021 will expire in the first quarter of 2022.
The periodic changes in the fair values of these liabilities are recorded in earnings and, historically, were significant,primarily due to the volatility of underlying equity markets. As of December 31, 2021, the intrinsic value of our equity index
put option contracts was near zero and our recorded liability at fair value was approximately $99 million. Our ultimate
payment obligations, if any, under our contracts will be determined as of the contract expiration dates based on the intrinsic
value as defined under the contracts. The pre-tax gains and losses in each of the past three years reflected changes in theequity index values and shorter remaining contract durations. Settlement payments to counterparties over the past three years
were insignificant.
Other
A summary of after-tax other earnings/losses follows (in millions).
2021

Equity method earnings
Acquisition accounting expenses
Goodwill and intangible asset impairments
Corporate interest expense, before foreign currency effects
Foreign currency exchange rate gains (losses) on Berkshire
and BHFC non-U.S. Dollar senior notes
Other Berkshire corporate

$

$

2020

2019

881 $
(690)
—
(305)

665 $
(783)
(10,381)
(334)

1,023
(788)
(96)
(280)

955
474
1,315

(764)
279
(11,318) $

58
507
424

$

After-tax equity method earnings include our proportionate share of earnings attributable to our investments in Kraft
Heinz, Pilot, Berkadia, Electric Transmission of Texas and Iroquois Gas Transmission Systems. Our after-tax earnings from
Kraft Heinz were $317 million in 2021, $170 million in 2020 and $488 million in 2019. Our earnings from Kraft Heinz
included our after-tax share of goodwill and other intangible asset impairment charges recorded by Kraft Heinz in each year.
Our after-tax share of such charges was $259 million in 2021, $611 million in 2020 and $339 million in 2019.

K-56

Management’s Discussion and Analysis (Continued)
Other (Continued)
After-tax acquisition accounting expenses include charges arising from the application of the acquisition method in
connection with certain of Berkshire’s past business acquisitions. Such charges arise primarily from the amortization or
impairment of intangible assets recorded in connection with those business acquisitions. Goodwill and intangible asset
impairments in 2020 included after-tax charges of $9.8 billion attributable to impairments of goodwill and certain identifiableintangible assets that were recorded in connection with our acquisition of PCC in 2016. See Other Critical Accounting
Policies on page K-62 for additional details.
Foreign currency exchange rate gains and losses pertain to Berkshire’s Euro and Japanese Yen denominated debt and
BHFC’s Great Britain Pound denominated debt. Changes in foreign currency exchange rates produce unrealized gains andlosses from the periodic revaluation of these liabilities into U.S. Dollars. The gains and losses recorded in any given period
can be significant due to the magnitude of the borrowings and the inherent volatility in foreign currency exchange rates.
Berkshire corporate items consist primarily of Berkshire parent company investment income and corporate expenses, otherintercompany interest income where the interest expense is included in earnings of the operating businesses and unallocatedincome taxes.
Financial Condition
Our consolidated balance sheet continues to reflect very significant liquidity and a very strong capital base.
Consolidated shareholders’ equity at December 31, 2021 was $506.2 billion, an increase of $63.0 billion since December 31,
2020. Net earnings attributable to Berkshire shareholders was $89.8 billion and included after-tax gains on our investments ofapproximately $61.6 billion. Over each of the last three years, investment gains and losses from changes in the market pricesof our investments in equity securities produced exceptional volatility in our periodic earnings.
Berkshire’s common stock repurchase program, as amended, permits Berkshire to repurchase its Class A and Class B
shares at prices below Berkshire’s intrinsic value, as conservatively determined by Warren Buffett, Berkshire’s Chairman of
the Board and Chief Executive Officer, and Charlie Munger, Vice Chairman of the Board. The program does not specify amaximum number of shares to be repurchased and does not require any specified repurchase amount. The program is
expected to continue indefinitely. We will not repurchase our stock if it reduces the total amount of Berkshire’s consolidated
cash, cash equivalents and U.S. Treasury Bill holdings below $30 billion. Financial strength and redundant liquidity will
always be of paramount importance at Berkshire. Berkshire paid $27.1 billion in 2021 to repurchase shares of its Class A andB common stock.
At December 31, 2021, our insurance and other businesses held cash, cash equivalents and U.S. Treasury Bills of$143.9 billion, which included $119.6 billion in U.S. Treasury Bills. Investments in equity and fixed maturity securities(excluding our investment in Kraft Heinz) were $367.2 billion. Our fixed maturity securities at December 31, 2021 included
approximately $14.4 billion of investments that mature in 2022 and 2023.
Our consolidated borrowings at December 31, 2021 were $114.3 billion, of which over 95% were by the Berkshire
parent company, BHFC, BNSF and BHE and its subsidiaries. Expected principal and interest payments related to ourconsolidated borrowings in each of the next five years are (in billions): $10.2 in 2022; $14.6 in 2023; $9.7 in 2024; $9.9 in
2025; and $8.7 in 2026.
Berkshire parent company debt outstanding at December 31, 2021 was $21.4 billion, a decrease of $1.3 billion since
December 31, 2020, which was primarily due to the effects of foreign currency exchange rate changes on Euro and Japanese
Yen denominated debt. In 2021, Berkshire repaid Euro and U.S. Dollar denominated debt aggregating approximately $2.2
billion of maturing senior notes and issued Euro and Yen denominated senior notes aggregating approximately $2.2 billion
with maturity dates ranging from 2026 to 2041 and a weighted average interest rate of 0.5%. In January 2022, Berkshire
repaid $600 million of maturing senior notes and issued ¥128.5 billion (approximately $1.1 billion) of senior notes withmaturity dates ranging from 2027 to 2052 and a weighted average interest rate of 0.5%.
Berkshire’s insurance and other subsidiary outstanding borrowings were approximately $17.9 billion at December 31,
2021, which included senior note borrowings of BHFC, a wholly-owned financing subsidiary, of approximately $13.1 billion.
BHFC’s borrowings are used to fund a portion of loans originated and acquired by Clayton Homes and equipment held forlease by our railcar leasing business. In 2021, BHFC repaid $750 million of maturing senior notes and issued $750 million of
2.5% senior notes due in 2051. Berkshire guarantees BHFC’s senior notes for the full and timely payment of principal andinterest.

K-57

Management’s Discussion and Analysis (Continued)
Financial Condition (Continued)
BNSF’s outstanding debt was $23.2 billion as of December 31, 2021, relatively unchanged from December 31, 2020.
During 2021, BNSF repaid $1.54 billion of debt and issued $1.55 billion of debentures with a weighted average interest rateof 3.1% with maturity dates in 2051 and 2052. Outstanding borrowings of BHE and its subsidiaries were $51.8 billion at
December 31, 2021, a decrease of $382 million since December 31, 2020. In 2021, BHE and its subsidiaries issued new term
debt of approximately $2.2 billion with maturity dates ranging from 2028 to 2052 and repaid term debt of approximately$2.5 billion. Berkshire does not guarantee the repayment of debt issued by BNSF, BHE or any of their subsidiaries.
In each of the past three years, our diverse group of businesses generated net operating cash flows of approximately$39 billion. Our consolidated capital expenditures for property, plant and equipment and equipment held for lease were $13.3
billion in 2021, which included capital expenditures by our railroad, utilities and energy businesses (BNSF and BHE) of $9.5
billion. BNSF and BHE maintain very large investments in capital assets (property, plant and equipment) and will regularly
make significant capital expenditures in the normal course of business. We forecast capital expenditures of these two
operations will approximate $11.1 billion in 2022.
Contractual Obligations
We are party to other contracts associated with ongoing business activities, which will result in cash payments tocounterparties in future periods. Certain obligations are included in our Consolidated Balance Sheets, such as operating leaseliabilities and shared aircraft repurchase liabilities of NetJets. Estimated payments of these liabilities in each of the next five
years are (in billions): $1.6 in 2022; $1.5 in 2023; $1.4 in 2024; $1.2 in 2025; and $1.2 in 2026.
We are also obligated to pay claims arising from property and casualty insurance companies. Such liabilities, including
amounts from retroactive reinsurance, were approximately $125 billion at December 31, 2021. We currently forecast claim
payments in 2022 of approximately $29 billion with respect to claims occurring prior to 2022. Additionally, we estimate net
payments of approximately $3 billion in 2022 for life, health and annuity benefits under contracts. However, the timing andamount of the payments under insurance and reinsurance contracts are contingent upon the outcome of future events. Actual
payments will likely vary, perhaps materially, from the forecasted payments, as well as from the liabilities currently recordedin our Consolidated Balance Sheet. We anticipate that these payments will be funded by operating cash flows.
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 aredelivered or services are provided. As of December 31, 2021, the largest categories of our long-term contractual obligations
primarily related to fuel, capacity, transmission and maintenance contracts and capital expenditure commitments of BHE andBNSF and aircraft purchase commitments of NetJets. We estimate future payments associated with these contracts over the
next five years of approximately $19 billion, including $8 billion in 2022. We also have an agreement to acquire an
additional 41.4% of Pilot in 2023 and agreements to acquire certain non-controlling interests of consolidated subsidiaries.
Reference is made to Note 26 to the Consolidated Financial Statements for additional information regarding thesecommitments.
Critical Accounting Policies
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. A discussion of
our principal accounting policies that required the application of significant judgments as of December 31, 2021 follows.
Property and casualty insurance unpaid losses
We record liabilities for unpaid losses and loss adjustment expenses (also referred to as “gross unpaid losses” or “claim
liabilities”) based upon estimates of the ultimate amounts payable for loss events occurring on or before the balance sheet
date. The timing and amount of ultimate loss payments are contingent upon, among other things, the timing of claim
reporting from insureds and ceding companies and the final determination of the loss amount through the loss adjustment andsettlement process. We use a variety of techniques in establishing claim liabilities, which may require significant judgments
and assumptions.
As of the balance sheet date, recorded claim liabilities include estimates for reported claims and for claims not yetreported. The period between the loss occurrence date and loss settlement date is the “claim-tail.” Property claims usually
have relatively short claim-tails, absent litigation. Casualty claims usually have longer claim-tails, occasionally extending for
decades. Casualty claims may be more susceptible to litigation and the impact of changing contract interpretations. The legal
environment and judicial process further contribute to extending claim-tails.
K-58

Management’s Discussion and Analysis (Continued)
Property and casualty losses (Continued)
Our consolidated claim liabilities, including liabilities from retroactive reinsurance contracts, as of December 31, 2021
were approximately $125 billion, of which 80% related to GEICO and the Berkshire Hathaway Reinsurance Group.
Additional information regarding significant uncertainties inherent in the processes and techniques for estimating unpaid
losses of these businesses follows.
GEICO
GEICO predominantly writes private passenger auto insurance. As of December 31, 2021, GEICO’s gross unpaid
losses were $23.9 billion and claim liabilities, net of reinsurance recoverable, were $22.7 billion. GEICO’s claim reserving
methodologies produce liability estimates based upon the individual claims. The key assumptions affecting our liability
estimates include projections of ultimate claim counts (“frequency”) and average loss per claim (“severity”). We utilize a
combination of several actuarial estimation methods, including Bornhuetter-Ferguson and chain-ladder methodologies.
Claim liability estimates for automobile liability coverages (such as bodily injury (“BI”), uninsured motorists, andpersonal injury protection) are more uncertain due to the longer claim-tails, so we establish additional case development
estimates. As of December 31, 2021, case development liabilities averaged approximately 34% of the case reserves. We
select case development factors through analysis of the overall adequacy of historical case liabilities.
Incurred-but-not-reported (“IBNR”) claim liabilities are based on projections of the ultimate number of claims
expected (reported and unreported) for each significant coverage. We use historical claim count data to develop age-to-age
projections of the ultimate counts by quarterly accident period, from which we deduct reported claims to produce the numberof unreported claims. We estimate the average costs per unreported claim and apply such estimates to the unreported claim
counts, producing an IBNR liability estimate. We may record additional IBNR estimates when actuarial techniques are
difficult to apply.
We test the adequacy of the aggregate claim liabilities using one or more actuarial projections based on claim closure
models and paid and incurred loss triangles. Each type of projection analyzes loss occurrence data for claims occurring in agiven period and projects the ultimate cost.
Our claim liability estimates recorded at the end of 2020 were reduced by $1.8 billion during 2021, which produced acorresponding increase to pre-tax earnings. The assumptions used to estimate liabilities at December 31, 2021 reflect themost recent frequency and severity estimates. Future development of recorded liabilities will depend on whether actual
frequency and severity of claims are more or less than anticipated.
With respect to liabilities for BI claims, we believe it is reasonably possible that average claims severities will change
by at least one percentage point from the projected severities used in establishing the recorded liabilities at December 31,
2021. We estimate that a one percentage point increase or decrease in BI severities would produce a $290 million increase or
decrease in recorded liabilities, with a corresponding decrease or increase in pre-tax earnings. Many of the economic forcesthat would likely cause BI severity to differ from expectations would likely also cause severities for other injury coverages todiffer in the same direction.
Berkshire Hathaway Reinsurance Group
BHRG’s liabilities for unpaid losses and loss adjustment expenses derive primarily from reinsurance contracts issued
through NICO and General Re. A summary of BHRG’s property and casualty unpaid losses and loss adjustment expenses,
other than retroactive reinsurance losses and loss adjustment expenses, as of December 31, 2021 follows (in millions).
Property

Reported case liabilities
IBNR liabilities
Gross unpaid losses and loss adjustment expenses
Reinsurance recoverable
Net unpaid losses and loss adjustment expenses

$

$

K-59

6,602
6,780
13,382
181
13,201

Casualty

$

$

9,630
15,227
24,857892
23,965

Total

$

$

16,23222,007
38,2391,073
37,166

Management’s Discussion and Analysis (Continued)
Property and casualty losses (Continued)
Berkshire Hathaway Reinsurance Group (Continued)
Gross unpaid losses and loss adjustment expenses consist primarily of traditional property and casualty coverages
written primarily under excess-of-loss and quota-share treaties. Under certain contracts, coverage can apply to multiple linesof business written and the ceding company may not report loss data by such lines consistently, if at all. In those instances,
we allocate losses to property and casualty coverages based on internal estimates.
In connection with reinsurance contracts, the nature, extent, timing and perceived reliability of loss information
received from ceding companies varies widely depending on the type of coverage and the contractual reporting terms.
Reinsurance contract terms, conditions and coverages also tend to lack standardization and may evolve more rapidly than
primary insurance policies.
The nature and extent of loss information provided under many facultative (individual risk) or per occurrence excess
contracts may be comparable to the information received under a primary insurance contract. However, loss information withrespect to aggregate excess-of-loss and quota-share contracts is often in a summary format rather than on an individual claim
basis. Loss data includes recoverable paid losses, as well as case loss estimates. Ceding companies infrequently provide
reliable IBNR loss estimates.
Loss reporting to reinsurers is typically slower in comparison to primary insurers. In the U.S., such reporting is
generally required at quarterly intervals ranging from 30 to 90 days after the end of the quarterly period, while outside of the
U.S., reinsurance reporting practices may vary further. In certain countries, clients report annually from 90 to 180 days after
the end of the annual period. To the extent that reinsurers assume and cede underlying risks from other reinsurers, further
delays in claims reporting may occur. The relative impact of reporting delays on the reinsurer may vary depending on thetype of coverage, contractual reporting terms, the magnitude of the claim relative to the attachment point of the reinsurance
coverage, and for other reasons.
As reinsurers, the premium and loss data we receive is at least one level removed from the underlying claimant, so
there is a risk that the loss data reported is incomplete, inaccurate or the claim is outside the coverage terms. We maintaincertain internal procedures to determine that the information is complete and in compliance with the contract terms.
Generally, our reinsurance contracts permit us to access the ceding company’s records with respect to the subject business,thus providing the ability to audit the reported information. In the normal course of business, disputes occasionally arise
concerning whether claims are covered by our reinsurance policies. We resolve most coverage disputes through negotiation
with the client. If disputes cannot be resolved, our contracts generally provide arbitration or alternative dispute resolution
processes. There are no coverage disputes at this time for which an adverse resolution would likely have a material impact on
our consolidated results of operations or financial condition.
Establishing claim liability estimates for reinsurance assumed requires evaluation of loss information received from ourclients. We generally rely on the ceding companies’ reported case loss estimates. We independently evaluate certain reported
case losses and if appropriate, we use our own case liability estimate. For instance, as of December 31, 2021, our case loss
estimates exceeded ceding company estimates by approximately $700 million for certain legacy workers’ compensation
claims occurring over 10 years ago. We also periodically conduct detailed reviews of individual client claims, which may
cause us to adjust our case estimates.
Although liabilities for losses are initially determined based on pricing and underwriting analysis, we use a variety ofactuarial methodologies that place reliance on the extrapolation of actual historical data, loss development patterns, industry
data and other benchmarks, as appropriate. The estimate of the IBNR liabilities also requires judgment by actuaries andmanagement to reflect the impact of additional factors like change in business mix, volume, claim reporting and handlingpractices, inflation, social and legal environment and the terms and conditions of the contracts. The methodologies generally
fall into one of the following categories or are hybrids of one or more of the following categories:

K-60

Management’s Discussion and Analysis (Continued)
Property and casualty losses (Continued)
Berkshire Hathaway Reinsurance Group (Continued)
Paid and incurred loss development methods – these methods consider expected case loss emergence and development
patterns, together with expected loss ratios by year. Factors affecting our loss development analysis include, but are notlimited to, changes in the following: client claims reporting and settlement practices; the frequency of client company claim
reviews; policy terms and coverage (such as loss retention levels and occurrence and aggregate policy limits); loss trends; andlegal trends that result in unanticipated losses. Collectively, these factors influence our selections of expected case loss
emergence patterns.
Incurred and paid loss Bornhuetter-Ferguson methods – these methods consider actual paid and incurred losses andexpected patterns of paid and incurred losses, taking the initial expected ultimate losses into account to determine an estimateof the expected unpaid or unreported losses.
Frequency and severity methods – these methods commonly focus on a review of the number of anticipated claims andthe anticipated claims severity and may also rely on development patterns to derive such estimates. However, our processes
and techniques for estimating liabilities in such analyses generally rely more on a per-policy assessment of the ultimate costassociated with the individual loss rather than with an analysis of historical development patterns of past losses.
Additional analysis – in some cases we have established reinsurance claim liabilities on a contract-by-contract basis,
determined from case loss estimates reported by the ceding company and IBNR liabilities that are primarily a function of an
anticipated loss ratio for the contract and the reported case loss estimate. Liabilities are adjusted upward or downward overtime to reflect case losses reported versus expected case losses, which we use to form revised judgement on the adequacy ofthe expected loss ratio and the level of IBNR liabilities required for unreported claims. Anticipated loss ratios are also revised
to include estimates of known major catastrophe events.
Our claim liability estimation process for short-tail lines, primarily property exposures, utilizes a combination of thepaid and incurred loss development methods and the incurred and paid loss Bornhuetter-Ferguson methods. Certain
catastrophe, individual risk and aviation excess-of-loss contracts tend to generate low frequency/high severity losses. Our
processes and techniques for estimating liabilities under such contracts generally rely more on a per contract assessment of
the ultimate cost associated with the individual loss event rather than with an analysis of the historical development patternsof past losses.
For our long-tail lines, primarily casualty exposures, we may rely on different methods depending on the maturity ofthe business, with estimates for the most recent years being based on priced loss expectations and more mature years
reflecting the paid or incurred development pattern indications.
In 2021, certain workers’ compensation claims reported losses were less than expected. As a result, we reduced
estimated ultimate losses for prior years’ loss events by $136 million. We estimate that increases of ten percent in the tail ofthe expected loss emergence pattern and in the expected loss ratios would produce a net increase of approximately $1.0
billion in IBNR liabilities, producing a corresponding decrease in pre-tax earnings. We believe it is reasonably possible forthese assumptions to increase at these rates.
For other casualty losses, excluding asbestos, environmental, and other latent injury claims, we reduced estimatedultimate liabilities for prior years’ events by approximately $375 million in 2021. For certain significant casualty and generalliability portfolios, we estimate that increases of five percent in the claim-tails of the expected loss emergence patterns and in
the expected loss ratios would produce a net increase in our nominal IBNR liabilities and a corresponding reduction in pretax earnings of approximately $950 million, although outcomes of greater than or less than $950 million are possible given
the diversification in worldwide business.
The change in estimated ultimate liabilities for asbestos, environmental and other latent injury claims, excluding
amounts assumed under retroactive reinsurance contracts was not significant in 2021. Net liabilities for such claims wereapproximately $2.1 billion at December 31, 2021. Loss estimations for these exposures are difficult to determine due to thechanging legal environment and increases may be required in the future if new exposures or claimants are identified, newclaims are reported or new theories of liability emerge.

K-61

Management’s Discussion and Analysis (Continued)
Property and casualty losses (Continued)
Retroactive reinsurance
Our retroactive reinsurance contracts cover loss events occurring before the contract inception dates. Claim liabilities
associated with our retroactive reinsurance contracts predominately pertain to casualty or liability exposures. We expect theclaim-tails to be very long. As of December 31, 2021, gross unpaid losses were $38.3 billion and deferred charges were $10.6
billion.
Our contracts are generally subject to maximum limits of indemnifications and, as such, we currently expect thatmaximum remaining gross losses payable under our retroactive policies will not exceed $54 billion. Absent significant
judicial or legislative changes affecting asbestos, environmental or latent injury exposures, we also currently believe it
unlikely that losses will develop upward to the maximum losses payable or downward by more than 15% of our estimatedgross liability.
We establish liability estimates by individual contract, considering exposure and development trends. In establishing
our liability estimates, we often analyze historical aggregate loss payment patterns and project expected ultimate losses undervarious scenarios. We assign judgmental probability factors to these scenarios and an expected outcome is determined. Wethen monitor subsequent loss payment activity and review ceding company reports and other available information
concerning the underlying losses. We re-estimate the expected ultimate losses when significant events or significant
deviations from expected results are revealed.
Certain of our retroactive reinsurance contracts include asbestos, environmental and other latent injury claims. Ourestimated liabilities for such claims were approximately $12.3 billion at December 31, 2021. We do not consistently receive
reliable detailed data regarding asbestos, environmental and latent injury claims from all ceding companies, particularly withrespect to multi-line or aggregate excess-of-loss policies. When possible, we conduct a detailed analysis of the underlying
loss data to make an estimate of ultimate reinsured losses. When detailed loss information is unavailable, we develop
estimates by applying recent industry trends and projections to aggregate client data. Judgments in these areas necessarily
consider the stability of the legal and regulatory environment under which we expect claims will be adjudicated. Legal reformand legislation could also have a significant impact on our ultimate liabilities.
We reduced estimated ultimate liabilities for prior years’ retroactive reinsurance contracts by $974 million in 2021,
which after the changes in related deferred charges, resulted in pre-tax earnings of $142 million. In 2021, we paid losses andloss adjustment expenses of $1.9 billion with respect to our retroactive reinsurance contracts.
In connection with our retroactive reinsurance contracts, we also record deferred charges, which at contract inception
represents the excess, if any, of the estimated ultimate liability for unpaid losses over premiums received. We amortize
deferred charges, which produces charges to pre-tax earnings in future periods based on the expected timing and amount ofloss payments. We also adjust deferred charge balances due to changes in the expected timing and ultimate amount of claim
payments and the effects of the adjustments are included in pre-tax earnings. Significant changes in such estimates may havea significant effect on unamortized deferred charge balances. Based on the contracts in effect as of December 31, 2021, we
estimate that amortization expense in 2022 will approximate $950 million.
Other Critical Accounting Policies
Our Consolidated Balance Sheet at December 31, 2021 includes goodwill of acquired businesses of $73.9 billion andother indefinite-lived intangible assets of $18.5 billion. We evaluate these assets for impairment annually in the fourth quarterand on an interim basis if the facts and circumstances lead us to believe that more-likely-not there has been an impairment.
Goodwill and indefinite-lived intangible asset impairment reviews include determining the estimated fair values of ourreporting units and indefinite-lived intangible assets. The key assumptions and inputs used in such determinations may
include forecasting revenues and expenses, cash flows and capital expenditures, as well as an appropriate discount rate andother inputs. Significant judgment by management is required in estimating the fair value of a reporting unit and in
performing impairment reviews. Due to the inherent subjectivity and uncertainty in forecasting future cash flows andearnings over long periods of time, actual results may differ materially from the forecasts. If the carrying value of theindefinite-lived intangible asset exceeds fair value, the excess is charged to earnings as an impairment loss. If the carrying
value of a reporting unit exceeds the estimated fair value of the reporting unit, then the excess, limited to the carrying amountof goodwill, will be charged to earnings as an impairment loss.

K-62

Management’s Discussion and Analysis (Continued)
Other Critical Accounting Policies (Continued)
As of December 31, 2021, we concluded it is more likely than not that goodwill recorded in our Consolidated Balance
Sheet was not impaired. The fair value estimates of reporting units are and will likely be significantly affected byassumptions on the severity, duration or long-term effects of the pandemic on the reporting unit’s business, as well as otherassumptions concerning the long-term economic performance of the reporting unit, which we cannot reliably predict.
Consequently, any fair value estimates in such instances can be subject to wide variations.
We primarily use discounted projected future earnings or cash flow methods in determining fair values. The key
assumptions and inputs used in such methods may include forecasting revenues and expenses, cash flows and capital
expenditures, as well as an appropriate discount rate and other inputs. A significant amount of judgment is required inestimating the fair value of a reporting unit and in performing goodwill impairment tests.
In connection with the annual goodwill impairment review conducted in the fourth quarter of 2021, the estimated fairvalues of five reporting units did not exceed our carrying values by at least 20%. The most significant of these reporting units
was Precision Castparts Corp. (“PCC”). The estimated fair value of PCC was approximately $34.5 billion, exceeding ourcarrying value of approximately $31.1 billion by 10.7%. Our carrying value of PCC included goodwill of approximately $7.5
billion. For the four other reporting units, our aggregate estimated fair value was approximately $2.5 billion, which exceeded
our aggregate carrying value of approximately $2.3 billion by 9.2%. Our carrying value of these units included goodwill of
approximately $1.2 billion.
In the second quarter of 2020, we quantitively reevaluated goodwill for impairment for certain reporting units, andmost significantly for PCC. As a result of our reviews, we recorded pre-tax goodwill impairment charges of $10.0 billion andindefinite-lived intangible asset impairment charges of $638 million, of which approximately $10 billion related to PCC.
Prior to the reevaluation, the carrying value of PCC-related goodwill was approximately $17 billion. Additionally, thecarrying value of PCC-related indefinite-lived intangible assets was approximately $14 billion. Substantially all of theseamounts were recorded in connection with Berkshire’s acquisition of PCC in 2016. The initial effects of the COVID-19
pandemic on commercial airlines and aircraft manufacturers were particularly severe. At that time, we considered several
factors in our reevaluation, including but not limited to the announcements by airlines concerning potential future demand,
employment levels and aircraft orders, announcements by manufacturers of reduced aircraft production, and the actions wewere taking or may be taking in the future to restructure operations. Consequently, we deemed it prudent under the prevailingcircumstances to increase discount rates and reduce prior long-term forecasts of future cash flows for purposes of reviewing
for impairments.
Market Risk Disclosures
Our Consolidated Balance Sheets include substantial amounts of assets and liabilities whose fair values are subject tomarket risks. Our significant market risks are primarily associated with equity prices, interest rates, foreign currency
exchange rates and commodity prices. The fair values of our investment portfolios remain subject to considerable volatility.
The following sections address the significant market risks associated with our business activities.
Equity Price Risk
Equity securities represent a significant portion of our consolidated investment portfolio. Strategically, we strive toinvest in businesses that possess excellent economics and able and honest management, and we prefer to invest a meaningfulamount in each company. Historically, equity investments have been concentrated in relatively few issuers. At December 31,
2021, approximately 73% of the total fair value of equity securities was concentrated in four companies.
We often hold our equity securities for long periods and short-term price volatility has occurred in the past and will
occur in the future. We also strive to maintain significant levels of shareholder capital and ample liquidity to provide amargin of safety against short-term price volatility.

K-63

Management’s Discussion and Analysis (Continued)
Equity Price Risk (Continued)
We are also subject to equity price risk with respect to our equity index put option contracts, although our equity priceexposure has declined significantly as a vast majority of the contracts written to date have expired. Our ultimate liability withrespect to these contracts is determined from the movement of the underlying stock index between the contract inception dateand expiration date. The fair values of our liabilities arising from these contracts are also affected by changes in other factors.
The following table summarizes our equity securities and equity index put option contract liabilities as ofDecember 31, 2021 and 2020 and the estimated effects of a hypothetical 30% increase and a 30% decrease in market prices
as of those dates. The selected 30% hypothetical increase and decrease does not reflect the best or worst case scenario.
Indeed, results from declines could be far worse due both to the nature of equity markets and the aforementioned
concentrations existing in our equity investment portfolio. Dollar amounts are in millions.

Fair Value

December 31, 2021
Investments in equity securities$

350,719 30% increase $30% decrease
99 30% increase
30% decrease

452,936 $
248,606
5
1,088

81,136(81,053)
74
(781)

$

281,170 30% increase $30% decrease
1,065 30% increase
30% decrease

362,830 $
199,547
257
2,702

63,321(63,293)638(1,293)Equity index put option contract liabilities
December 31, 2020
Investments in equity securities
Equity index put option contract liabilities(1)

Estimated
Estimated
Fair Value after
Hypothetical
Increase (Decrease)
HypotheticalPrice Change Change in Prices in Net Earnings (1)The estimated increase (decrease) is after income taxes at the statutory rate in effect as of the balance sheet date.
Interest Rate Risk

We may also invest in bonds, loans or other interest rate sensitive instruments. Our strategy is to acquire or originate
such instruments at prices considered appropriate relative to the perceived credit risk. We also issue debt in the ordinary
course of business to fund business operations, business acquisitions and for other general purposes. We attempt to maintainhigh credit ratings, in order to minimize the cost of our debt. We infrequently utilize derivative products, such as interest rate
swaps, to manage interest rate risks and we do not attempt to match maturities of assets and liabilities.
The fair values of our fixed maturity investments, loans and finance receivables, and notes payable and otherborrowings will fluctuate in response to changes in market interest rates. Interest rate risks associated with the valuations of
our equity index put option contract liabilities are no longer considered significant due to the short duration of remaining
exposures as of December 31, 2021. Increases and decreases in interest rates generally translate into decreases and increases
in fair values of these instruments. Additionally, fair values of interest rate sensitive instruments may be affected by thecreditworthiness of the issuer, prepayment options, relative values of alternative investments, the liquidity of the instrument
and other general market conditions.

K-64

Management’s Discussion and Analysis (Continued)
Interest Rate Risk (Continued)
The following table summarizes the estimated effects of hypothetical changes in interest rates on our significant assets
and liabilities that are subject to significant interest rate risk at December 31, 2021 and 2020. We assumed that the interest
rate changes occur immediately and uniformly to each category of instrument and that there were no significant changes toother factors used to determine the value of the instrument. The hypothetical changes in interest rates do not reflect the best
or worst case scenarios. Actual results may differ from those reflected in the table. Dollars are in millions.
Estimated Fair Value after Hypothetical Change inInterest Rates(bp=basis points)
100 bp100 bp200 bp300 bpdecreaseincreaseincreaseincrease

Fair
Value

December 31, 2021
Assets:Investments in fixed maturity securities
Investments in equity securities*
Loans and finance receivables$

Liabilities:
Notes payable and other borrowings:
Insurance and otherRailroad, utilities and energy
Equity index put option contracts
December 31, 2020
Assets:Investments in fixed maturity securities
Investments in equity securities*
Loans and finance receivables
Liabilities:
Notes payable and other borrowings:
Insurance and otherRailroad, utilities and energy
Equity index put option contracts*

16,434
10,864
22,174$42,33987,06599$

20,4108,891
20,554

46,676
92,593
1,065

16,624
11,45722,982$

46,55997,474105$

20,622
9,408
21,47250,754
102,926
1,125

16,231
10,313
21,417$38,72478,472
94$

20,1398,413
19,91642,78583,0701,008

16,036
9,798
20,714$35,68371,28989$

19,8797,970
19,21939,51475,484953

15,847
9,319
20,054

33,10465,24684$

19,628
7,559
18,57036,73969,093900

Includes Cumulative Perpetual Preferred Stocks
Foreign Currency Risk

Certain of our subsidiaries operate in foreign jurisdictions and we transact business in foreign currencies. In addition,
we hold investments in common stocks of major multinational companies, who have significant foreign business and foreign
currency risk of their own. We generally do not attempt to match assets and liabilities by currency and do not use derivative
contracts to manage foreign currency risks in a meaningful way.

K-65

Management’s Discussion and Analysis (Continued)
Foreign Currency Risk (Continued)
Our net assets subject to financial statement translation into U.S. Dollars are primarily in our insurance, utilities andenergy and certain manufacturing and service subsidiaries. A portion of our financial statement translation-related impact
from changes in foreign currency rates is recorded in other comprehensive income. In addition, we include gains or losses
from changes in foreign currency exchange rates in net earnings related to non-U.S. Dollar denominated assets and liabilities
of Berkshire and U.S.-based subsidiaries. A summary of these gains (losses), after-tax, for each of the years ending
December 31, 2021 and 2020 follows (in millions).
2021

Non-U.S. denominated debt included in net earnings
Net liabilities under certain reinsurance contracts included in net earnings
Foreign currency translation included in other comprehensive income

$

2020

955 $
58
(1,021)

(764)
(163)
1,264

Commodity Price Risk
Our subsidiaries use commodities in various ways in manufacturing and providing services. As such, we are subject toprice risks related to various commodities. In most instances, we attempt to manage these risks through the pricing of our
products and services to customers. To the extent that we are unable to sustain price increases in response to commodity priceincreases, our operating results will likely be adversely affected. We do not utilize derivative contracts to manage commodity
price risks to any significant degree.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
See “Market Risk Disclosures” contained in Item 7 “Management’s Discussion and Analysis of Financial Condition
and Results of Operations.”
Management’s Report on Internal Control Over Financial Reporting
Management of Berkshire Hathaway Inc. is responsible for establishing and maintaining adequate internal control overfinancial reporting, as such term is defined in the Securities Exchange Act of 1934 Rule 13a-15(f). Under the supervision andwith the participation of our management, including our principal executive officer and principal financial officer, we
conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31,
2021, as required by the Securities Exchange Act of 1934 Rule 13a-15(c). In making this assessment, we used the criteria set
forth in the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on our evaluation under the framework in Internal Control—Integrated
Framework (2013), our management concluded that our internal control over financial reporting was effective as ofDecember 31, 2021.
The effectiveness of our internal control over financial reporting as of December 31, 2021 has been audited by
Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which appears on page K67.
Berkshire Hathaway Inc.
February 26, 2022

K-66

Item 8. Financial Statements and Supplementary Data
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors ofBerkshire Hathaway Inc.
Omaha, Nebraska
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Berkshire Hathaway Inc. and subsidiaries (the“Company”) as of December 31, 2021 and 2020, the related consolidated statements of earnings, comprehensive income,changes in shareholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2021, and therelated notes (collectively referred to as the “financial statements”). We also have audited the Company’s internal control
over financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of theCompany as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in
the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States ofAmerica. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial
reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued
by COSO.
Basis for Opinions
The Company’s management is responsible for these financial statements, for maintaining effective internal control overfinancial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in theaccompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an
opinion on these financial statements and an opinion on the Company’s internal control over financial reporting based on our
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)(PCAOB) and are required to be independent with respect to the Company in accordance with the US federal securities laws
and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and performthe audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether
due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the financial statements included performing procedures to assess the risks of material misstatement of thefinancial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures
included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits
also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining
an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testingand evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included
performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a
reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and proceduresthat (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts andexpenditures of the company are being made only in accordance with authorizations of management and directors of thecompany; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.

K-67

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (Continued)
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current-period audit of the financial statementsthat were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosuresthat are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as awhole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit
matters or on the accounts or disclosures to which they relate.
Unpaid Losses and Loss Adjustment Expenses— Refer to Notes 1 and 16 to the financial statements
Critical Audit Matter Description
The Company’s unpaid losses and loss adjustment expenses (“claim liabilities”) under short duration property and casualty
insurance and reinsurance contracts are $86,664 million as of December 31, 2021. The key assumptions affecting certain
claim liabilities include expected loss and expense (“loss”) ratios, expected claim count emergence patterns, expected loss
payment emergence patterns and expected loss reporting emergence patterns.
Given the subjectivity of estimating these key assumptions, performing audit procedures to evaluate whether claim liabilities
were appropriately recorded as of December 31, 2021, required a high degree of auditor judgment and an increased extent ofeffort, including the need to involve our actuarial specialists.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the key assumptions affecting certain claim liabilities included the following, among others:• We tested the operating effectiveness of controls over claim liabilities, including those over the key assumptions.
• We evaluated the methods and assumptions used by management to estimate the claim liabilities by:• Testing the underlying data that served as the basis for the actuarial analysis, such as historical claims and earned
premium, to test that the inputs to the actuarial estimate were reasonable.
• Comparing management’s prior-year claim liabilities to actual development during the current year to identify
potential bias in the determination of the claim liabilities.
• With the assistance of our actuarial specialists:• We developed independent estimates of the claim liabilities, including loss data and industry claim development
factors as needed, and compared our estimates to management’s estimates.
• We compared management’s change in ultimate loss and loss adjustment expense to prior year estimates to test thereasonableness of the prior year estimates and assessed unexpected development.
Unpaid Losses and Loss Adjustment Expenses Under Retroactive Reinsurance Contracts — Refer to Notes 1 and 17 to thefinancial statements
Critical Audit Matter Description
The Company’s unpaid losses and loss adjustment expenses (“claim liabilities”) for property and casualty retroactive
reinsurance contracts are $38,256 million as of December 31, 2021. The key assumptions affecting certain claim liabilities
and related deferred charge reinsurance assumed assets (“related assets”) include expected loss and expense (“loss”) ratios,
expected loss payment emergence patterns and expected loss reporting emergence.
Given the subjectivity of estimating these key assumptions, performing audit procedures to evaluate whether claim liabilities
were appropriately recorded as of December 31, 2021, required a high degree of auditor judgment and an increased extent ofeffort, including the need to involve our actuarial specialists.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the key assumptions affecting claim liabilities and related assets included the following,among others:• We tested the operating effectiveness of controls over claim liabilities and related assets, including those over the key
assumptions.

K-68

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (Continued)••

We evaluated the methods and assumptions used by management to estimate the claim liabilities and related assets by:• Testing the underlying data that served as the basis for the actuarial analysis, including historical claims, to test thatthe inputs to the actuarial estimate were reasonable.
• Comparing management’s prior-year claim liabilities to actual development during the current year to identify
potential bias in the determination of the claim liabilities and related assets.
With the assistance of our actuarial specialists:• We developed independent claim liability estimates for certain retroactive reinsurance contracts and compared ourestimates to management’s estimates. For other retroactive reinsurance contracts and related assets, we evaluated theprocess used by management to develop the estimated claim liabilities and related assets.
• We compared management’s change in ultimate loss and loss adjustment expense to prior year estimates, assessed
unexpected development and assessed internal rates of return.

Goodwill and Indefinite-Lived Intangible Assets — Refer to Notes 1 and 13 to the financial statements
Critical Audit Matter Description
The Company’s evaluation of goodwill and indefinite-lived intangible assets for impairment involves the comparison of thefair value of each reporting unit or asset to its carrying value. The Company evaluates goodwill and indefinite-lived
intangible assets for impairment at least annually. When evaluating goodwill and indefinite-lived intangible assets for
impairment, the fair value of each reporting unit or asset is estimated. Significant judgment is required in estimating fairvalues and performing impairment tests. The Company primarily uses discounted projected future net earnings or net cash
flows and multiples of earnings to estimate fair value, which requires management to make significant estimates andassumptions related to forecasts of future revenue, earnings before interest and taxes (“EBIT”), and discount rates. Changes
in these assumptions could have a significant impact on the fair value of reporting units and indefinite-lived intangible assets.
The Precision Castparts Corp. (“PCC”) reporting unit reported approximately $21 billion of goodwill and indefinite-lived
intangible assets as of December 31, 2021. Given the significant judgments made by management to estimate the fair valueof the PCC reporting unit and certain customer relationships with indefinite lives along with the difference between their fairvalues and carrying values, performing audit procedures to evaluate the reasonableness of management’s estimates andassumptions related to forecasts of future revenue and EBIT and the selection of the discount rate required a high degree ofauditor judgment and an increased extent of effort, including the need to involve our fair value specialists.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to forecasts of future revenue and EBIT and the selection of the discount rate for the PCC
reporting unit and certain customer relationships included the following, among others:• We tested the effectiveness of controls over goodwill and indefinite-lived intangible assets, including those over theforecasts of future revenue and EBIT and the selection of the discount rate.
• We evaluated management’s ability to accurately forecast future revenue and EBIT by comparing prior year
forecasts to actual results in the respective years.
• We evaluated the reasonableness of management’s current revenue and EBIT forecasts by comparing the forecasts
to historical results and forecasted information included in analyst and industry reports and certain peer companies’
disclosures.
• With the assistance of our fair value specialists, we evaluated the valuation methodologies, the long-term growth
rates and discount rate, including testing the underlying source information and the mathematical accuracy of thecalculations, and developed a range of independent estimates and compared those to the long-term growth rates anddiscount rate selected by management.
/s/ Deloitte & Touche LLP
Omaha, Nebraska
February 26, 2022
We have served as the Company’s auditor since 1985.

K-69

BERKSHIRE HATHAWAY INC.
and Subsidiaries
CONSOLIDATED BALANCE SHEETS(dollars in millions)
December 31,
2021

ASSETS
Insurance and Other:
Cash and cash equivalents*
Short-term investments in U.S. Treasury Bills
Investments in fixed maturity securities
Investments in equity securities
Equity method investments
Loans and finance receivables
Other receivables
Inventories
Property, plant and equipment
Equipment held for lease
Goodwill
Other intangible assets
Deferred charges - retroactive reinsurance
Other

$

Railroad, Utilities and Energy:
Cash and cash equivalents*
Receivables
Property, plant and equipment
Goodwill
Regulatory assets
Other
$
*

85,31958,535
16,434
350,719
17,37520,75135,388
20,954
20,834
14,91847,11728,486
10,63915,854
743,323
2,865
4,177
155,530
26,758
3,963
22,168215,461
958,784

2020

$

$

44,71490,30020,410281,170
17,303
19,20132,31019,20821,20014,601
47,121
29,462
12,441
14,580664,0213,276
3,542
151,216
26,613
3,440
21,621
209,708
873,729

Includes U.S. Treasury Bills with maturities of three months or less when purchased of $61.7 billion at December 31,
2021 and $23.2 billion at December 31, 2020.
See accompanying Notes to Consolidated Financial Statements

K-70

BERKSHIRE HATHAWAY INC.
and Subsidiaries
CONSOLIDATED BALANCE SHEETS(dollars in millions)
December 31,
2021

LIABILITIES AND SHAREHOLDERS’ EQUITY
Insurance and Other:
Unpaid losses and loss adjustment expenses
Unpaid losses and loss adjustment expenses under retroactive reinsurance contracts
Unearned premiums
Life, annuity and health insurance benefits
Other policyholder liabilities
Accounts payable, accruals and other liabilities
Aircraft repurchase liabilities and unearned lease revenues
Notes payable and other borrowings$

Railroad, Utilities and Energy:
Accounts payable, accruals and other liabilities
Regulatory liabilities
Notes payable and other borrowings
Income taxes, principally deferred
Total liabilities
Shareholders’ equity:
Common stock
Capital in excess of par value
Accumulated other comprehensive income
Retained earnings
Treasury stock, at cost
Berkshire Hathaway shareholders’ equity
Noncontrolling interests
Total shareholders’ equity$
See accompanying Notes to Consolidated Financial Statements

K-71

86,664
38,256
23,512
22,4529,330
30,376
5,849
39,272
255,711

2020$

79,85440,966
21,395
21,616
8,670
30,344
5,856
41,522
250,223

15,696
7,214
74,99097,90090,243443,854

15,224
7,475
75,37398,072
74,098422,393835,592(4,027)534,421(59,795)
506,199
8,731
514,930
958,784 $

835,626(4,243)444,626(32,853)
443,164
8,172
451,336
873,729BERKSHIRE HATHAWAY INC.
and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS(dollars in millions except per share amounts)
2021

Revenues:
Insurance and Other:
Insurance premiums earned
Sales and service revenues
Leasing revenues
Interest, dividend and other investment income$

Year Ended December 31,
2020

2019

69,478 $145,043
5,988
7,465
227,974

63,401 $127,0445,209
8,092
203,746

61,078
134,989
5,856
9,240
211,163

Total revenues

23,177
18,891
6,052
48,120276,094

20,75015,5405,474
41,764
245,510

23,357
15,353
4,743
43,453
254,616

Investment and derivative contract gains

78,54240,746

72,60749,964
6,007
12,569114,138
4,201
18,843—
1,086
206,808

43,951
5,812
12,798101,091
3,520
19,80910,671
1,105
198,757

44,456
4,986
11,200107,041
4,003
19,226
96
1,056
192,064

Railroad, Utilities and Energy:
Freight rail transportation revenues
Energy operating revenues
Service revenues and other income

Costs and expenses:
Insurance and Other:
Insurance losses and loss adjustment expenses
Life, annuity and health insurance benefits
Insurance underwriting expenses
Cost of sales and services
Cost of leasing
Selling, general and administrative expenses
Goodwill and intangible asset impairments
Interest expense
Railroad, Utilities and Energy:
Freight rail transportation expenses
Utilities and energy cost of sales and other expenses
Other expenses
Interest expense
Total costs and expenses
Earnings before income taxes and equity method earnings
Equity method earnings
Earnings before income taxes
Income tax expense
Net earnings
Earnings attributable to noncontrolling interests
Net earnings attributable to Berkshire Hathaway shareholders
Net earnings per average equivalent Class A share
Net earnings per average equivalent Class B share*
Average equivalent Class A shares outstanding
Average equivalent Class B shares outstanding*

14,477
13,12015,436
13,959
11,638
11,296
5,615
4,796
4,002
3,086
2,978
2,905
37,13732,532
33,639243,945
231,289
225,703110,691
54,967
101,520
995
726
1,176
111,686
55,693
102,696
20,87912,44020,90490,80743,25381,792
1,012
732
375
$
89,795 $42,521 $81,417$59,460 $26,668 $49,828$39.64 $
17.78 $
33.22
1,510,180
1,594,469
1,633,946
2,265,269,867 2,391,703,454 2,450,919,020

Class B shares are economically equivalent to one-fifteen-hundredth of a Class A share. Accordingly, net earnings per
average equivalent Class B share outstanding is equal to one-fifteen-hundredth of the equivalent Class A amount. See
Note 21.
See accompanying Notes to Consolidated Financial Statements
K-72

BERKSHIRE HATHAWAY INC.
and Subsidiaries
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(dollars in millions)2021

Net earnings
Other comprehensive income:Unrealized appreciation of fixed maturity securities
Applicable income taxes
Foreign currency translation
Applicable income taxes
Defined benefit pension plans
Applicable income taxes
Other, net
Other comprehensive income, net
Comprehensive income
Comprehensive income attributable to noncontrolling interests
Comprehensive income attributable to Berkshire Hathaway shareholders

Year Ended December 31,
2020$

90,807

$

$

(217)
50
(1,011)
(6)
1,775
(457)
100
234
91,041
1,030
90,011 $43,253

2019$

81,792

74
(19)
1,284
3
(355)
74
(42)
1,019
44,272751
43,521 $

142
(31)
323
(28)
(711)
155
(48)
(198)
81,594405
81,189BERKSHIRE HATHAWAY INC.
and Subsidiaries
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY(dollars in millions)
Berkshire Hathaway shareholders’ equity
Commonstock andAccumulated
capital inotherTreasury
excess of comprehensive Retained
earnings
stock
par value
incomeBalance December 31, 2018
Net earnings
Other comprehensive income, net
Issuance (acquisition) of common stock
Transactions with noncontrolling interests
Balance December 31, 2019
Net earnings
Adoption of new accounting pronouncement
Other comprehensive income, net
Acquisition of common stock
Transactions with noncontrolling interests
Balance December 31, 2020
Net earnings
Other comprehensive income, net
Acquisition of common stock
Transactions with noncontrolling interests
Balance December 31, 2021

$ 35,715 $
—
—
21
(70)
35,666————(32)
35,634———(34)$ 35,600 $(5,015) $321,112 $ (3,109) $—81,417
—
(228)
—
—
—
—
(5,016)—(36)—(5,243) 402,493(8,125)—42,521
—
—
(388)
—
1,000
—
—
—
— (24,728)———(4,243) 444,626 (32,853)—
89,795—216———— (26,942)———(4,027) $534,421 $(59,795) $See accompanying Notes to Consolidated Financial Statements

K-73

Noncontrollinginterests

Total

3,797 $352,500
375
81,79230(198)—(4,995)(430)(536)
3,772 428,563
732
43,253
—
(388)
19
1,019
—
(24,728)
3,649
3,617
8,172 451,336
1,012
90,80718234—(26,942)
(471)
(505)
8,731 $514,930

BERKSHIRE HATHAWAY INC.
and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS(dollars in millions)
2021

Cash flows from operating activities:
Net earnings
Adjustments to reconcile net earnings to operating cash flows:
Investment (gains) losses
Depreciation and amortization
Other, including asset impairment charges
Changes in operating assets and liabilities:
Unpaid losses and loss adjustment expenses
Deferred charges - retroactive reinsurance
Unearned 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
Purchases of loans and finance receivables
Collections of loans and finance receivables
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
Acquisition of treasury stock
Other
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 beginning of year
Cash and cash equivalents and restricted cash at end of year ** Cash and cash equivalents and restricted cash at end of year are comprised of:Insurance and Other
Railroad, Utilities and Energy
Restricted cash included in other assets

$

$
$

$

Year Ended December 31,
2020
2019

90,80743,253$81,792(77,576)
10,718(3,397)(40,905)
10,596
11,263(71,123)
10,064(1,254)

4,595
1,802
2,306
(5,834)(1,686)
2,389
15,29739,421

4,819
1,307
1,587
(1,609)(1,109)3,376
7,195
39,773

6,087
357
1,707
(2,303)(2,011)
190
15,181
38,687(8,448)15,849(152,637)
27,188160,402
(88)
561
(456)
(13,276)297
29,392(30,161)
38,756(208,429)
31,873
149,709(772)
393(2,532)(13,012)(3,582)(37,757)(18,642)
14,336(136,123)
15,929137,767(75)
345(1,683)(15,979)(1,496)(5,621)

2,961(3,032)
3,959(4,016)(624)(27,061)(695)(28,508)5
40,31048,39688,706 $

5,925(2,700)8,445(3,761)(1,118)(24,706)(429)(18,344)92(16,236)
64,632
48,396 $

8,144(5,095)5,400(2,638)266(4,850)
(497)
730
25
33,82130,81164,63285,3192,865
522
88,70644,714
3,276
406
48,396

61,151
3,024
457
64,632

See accompanying Notes to Consolidated Financial Statements

K-74

$

$

$

$

$

BERKSHIRE HATHAWAY INC.
and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2021

(1)

Significant accounting policies and practices(a)Nature of operations and basis of consolidation

Berkshire Hathaway Inc. (“Berkshire”) is a holding company owning subsidiaries engaged in a number ofdiverse business activities, including insurance and reinsurance, freight rail transportation, utilities and energy,
manufacturing, service and retailing. In these notes the terms “us,” “we,” or “our” refer to Berkshire and its
consolidated subsidiaries. Further information regarding our reportable business segments is contained in Note 25.
Information concerning business acquisitions completed over the past three years appears in Note 2. We believe thatreporting the Railroad, Utilities and Energy subsidiaries separately is appropriate given the relative significance of theirlong-lived assets, capital expenditures and debt, which is not guaranteed by Berkshire.
The accompanying Consolidated Financial Statements include the accounts of Berkshire consolidated with theaccounts of all subsidiaries and affiliates in which we hold a controlling financial interest as of the financial statement
date. Normally a controlling financial interest reflects ownership of a majority of the voting interests. We consolidate
variable interest entities (“VIE”) when we possess both the power to direct the activities of the VIE that mostsignificantly affect its economic performance, and we (a) are obligated to absorb the losses that could be significant to
the VIE or (b) hold the right to receive benefits from the VIE that could be significant to the VIE. Intercompany
accounts and transactions have been eliminated.
(b)

Use of estimates in preparation of financial statements

We prepare our Consolidated Financial Statements in conformity with accounting principles generally acceptedin the United States (“GAAP”) which requires us to make estimates and assumptions that affect the reported amountsof assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses during the period.
Our estimates of unpaid losses and loss adjustment expenses are subject to considerable estimation error due to theinherent uncertainty in projecting ultimate claim costs. In addition, estimates and assumptions associated with theamortization of deferred charges on retroactive reinsurance contracts, determinations of fair values of certain financial
instruments and evaluations of goodwill and indefinite-lived intangible assets for impairment require considerable
judgment. Actual results may differ from the estimates used in preparing our Consolidated Financial Statements.
The novel coronavirus (“COVID-19”) spread rapidly across the world in 2020 and was declared a pandemic by
the World Health Organization. The government and private sector responses to contain its spread began tosignificantly affect our operating businesses in March of 2020. The COVID-19 pandemic adversely affected nearly allof our operations during 2020, although the effects varied significantly. The extent of the effects over longer terms on
the demand for certain of our products and services cannot be reasonably estimated at this time. Accordingly,
significant estimates used in the preparation of our financial statements including those associated with evaluations ofcertain long-lived assets, goodwill and other intangible assets for impairment, expected credit losses on amounts owed
to us and the estimations of certain losses assumed under insurance and reinsurance contracts may be subject tosignificant adjustments in future periods.
(c)Cash and cash equivalents and short-term investments in U.S. Treasury Bills

Cash equivalents consist of demand deposit and money market accounts and investments with maturities of threemonths or less when purchased. Short-term investments in U.S. Treasury Bills consist of U.S. Treasury Bills withmaturities exceeding three months at the time of purchase and are stated at amortized cost, which approximates fairvalue.
(d)Investments in fixed maturity securities

We classify investments in fixed maturity securities on the acquisition date and at each balance sheet date.
Securities classified as held-to-maturity are carried at amortized cost, reflecting the ability and intent to hold the
securities to maturity. Securities classified as trading are acquired with the intent to sell in the near term and are carriedat fair value with changes in fair value reported in earnings. All other securities are classified as available-for-sale andare carried at fair value. Substantially all of investments in fixed maturity securities are classified as available-for-sale.
We amortize the difference between the original cost and maturity value of a fixed maturity security to earnings using
the interest method.

K-75

Notes to Consolidated Financial Statements (Continued)(1)

Significant accounting policies and practices (Continued)(d)Investments in fixed maturity securities (Continued)

We record investment gains and losses on available-for-sale fixed maturity securities when the securities are
sold, determined on a specific identification basis. For securities in an unrealized loss position, we recognize a loss inearnings for the excess of amortized cost over fair value if we intend to sell before the price recovers. As of the balance
sheet date, we evaluate whether the other unrealized losses are attributable to credit losses or other factors. We consider
the severity of the decline in value, creditworthiness of the issuer and other relevant factors. We record an allowancefor credit losses, limited to the excess of amortized cost over fair value, with a corresponding charge to earnings if thepresent value of estimated cash flows is less than the present value of contractual cash flows. The allowance may besubsequently increased or decreased based on the prevailing facts and circumstances. The portion of the unrealized loss
that we believe is not related to a credit loss is recognized in other comprehensive income.
(e)

Investments in equity securities

We carry substantially all investments in equity securities at fair value and record the subsequent changes in fairvalues in the Consolidated Statements of Earnings as a component of investment gains or losses.
(f)

Investments under the equity method

We utilize the equity method to account for investments when we possess the ability to exercise significant
influence, but not control, over the operating and financial policies of the investee. The ability to exercise significant
influence is presumed when the investor possesses more than 20% of the voting interests of the investee. This
presumption may be overcome based on specific facts and circumstances that demonstrate that the ability to exercise
significant influence is restricted. We apply the equity method to investments in common stock and other investments
when such investments possess substantially identical subordinated interests to common stock.
In applying the equity method, we record the investment at cost and subsequently increase or decrease thecarrying amount of the investment by our proportionate share of the net earnings or losses and other comprehensive
income of the investee. We record dividends or other equity distributions as reductions in the carrying value of theinvestment. If net losses reduce our carrying amount to zero, additional net losses may be recorded if other investmentsin the investee are at-risk, even if we have not committed to provide financial support to the investee. Such additional
equity method losses, if any, are based upon the change in our claim on the investee’s book value.
(g)Loans and finance receivables

Loans and finance receivables are primarily manufactured home loans, and to a lesser extent, commercial loans
and site-built home loans. We carry substantially all loans and finance receivables at amortized cost, net of allowancesfor expected credit losses, based on our ability and intent to hold such loans to maturity. Acquisition costs and loan
origination and commitment costs paid and fees received, as well as acquisition premiums or discounts, are amortizedas yield adjustments over the lives of the loans.
Prior to 2020, credit losses were measured when non-collection was considered probable based on the prevailingfacts and circumstances. Beginning in 2020, measurements of expected credit losses include provisions for noncollection, whether the risk is probable or remote. Expected credit losses on manufactured home loans are based on the
net present value of future principal payments less estimated expenses related to the charge-off and foreclosure of
expected uncollectible loans and include provisions for loans that are not in foreclosure. Our principal credit quality
indicator is whether the loans are performing. Expected credit loss estimates consider historical default rates, collateral
recovery rates, historical runoff rates, interest rates, reductions of future cash flows for modified loans and thehistorical time elapsed from last payment until foreclosure, among other factors. In addition, our estimates consider
current conditions and reasonable and supportable forecasts.
Loans are considered delinquent when payments are more than 30 days past due. We place loans over 90 days
past due on nonaccrual status and accrued but uncollected interest is reversed. Subsequent collections on the loans are
first applied to the principal and interest owed for the most delinquent amount. We resume interest income accrual
once a loan is less than 90 days delinquent.
Loans are considered non-performing when the foreclosure process has started. Once a loan is in the process offoreclosure, interest income is not recognized until the foreclosure is cured or the loan is modified. Once a modificationis complete, interest income is recognized based on the terms of the new loan. Foreclosed loans are charged off when
the collateral is sold. Loans not in foreclosure are evaluated for charge-off based on individual circumstances
concerning the future collectability of the loan and the condition of the collateral securing the loan.
K-76

Notes to Consolidated Financial Statements (Continued)(1)

Significant accounting policies and practices (Continued)(h)Other receivables

Other receivables include balances due from customers, insurance premiums receivable and reinsurance losses
recoverable, as well as other receivables. Trade receivables, insurance premium receivables and other receivables areprimarily short-term in nature with stated collection terms of less than one year from the date of origination.
Reinsurance recoverables are comprised of amounts ceded under reinsurance contracts or pursuant to mandatory
government-sponsored insurance programs. Reinsurance recoverables relate to unpaid losses and loss adjustment
expenses arising from property and casualty contracts and benefits under life and health contracts. Receivables arestated net of estimated allowances for uncollectible balances. Prior to 2020, we recorded provisions for uncollectiblebalances when it was probable counterparties or customers would be unable to pay all amounts due based on thecontractual terms and historical loss history.
Beginning in 2020, we adopted a new accounting pronouncement that affects the measurement of allowances for
credit losses. In measuring credit loss allowances, we primarily utilize credit loss history, with adjustments to reflectcurrent or expected future economic conditions when reasonable and supportable forecasts of losses deviate from
historical experience. In evaluating expected credit losses of reinsurance recoverables on unpaid losses, we review thecredit quality of the counterparty and consider right-of-offset provisions within reinsurance contracts and other formsof credit enhancement including collateral, guarantees and other available information. We charge-off receivables
against the allowances after all reasonable collection efforts are exhausted.
(i)

Derivatives

We carry derivative contracts in accounts payable, accruals and other liabilities in our Consolidated Balance
Sheets at fair value, net of reductions permitted under master netting agreements with counterparties. We record thechanges in fair value of derivative contracts that do not qualify as hedging instruments for financial reporting purposesin earnings or, if such contracts involve our regulated utilities subsidiaries, as regulatory assets or liabilities when
inclusion in regulated rates is probable.
(j)Fair value measurements

As defined under GAAP, fair value is the price that would be received to sell an asset or paid to transfer aliability between market participants in the principal market or in the most advantageous market when no principal
market exists. Adjustments to transaction prices or quoted market prices may be required in illiquid or disorderly
markets in estimating fair value. Alternative valuation techniques may be appropriate under the circumstances todetermine the value that would be received to sell an asset or paid to transfer a liability in an orderly transaction.
Market participants are assumed to be independent, knowledgeable, and able and willing to transact an exchange andnot acting under duress. Our nonperformance or credit risk is considered in determining the fair value of liabilities.
Considerable judgment may be required in interpreting market data used to develop the estimates of fair value.
Accordingly, estimates of fair value presented herein are not necessarily indicative of the amounts that could be
realized in a current or future market exchange.
(k)Inventories

Inventories consist of manufactured goods, goods or products acquired for resale and homes constructed for sale.
Manufactured inventory costs include materials, direct and indirect labor and factory overhead. At December 31, 2021,
we used the last-in-first-out (“LIFO”) method to value approximately 31% of consolidated inventories with theremainder primarily determined under first-in-first-out and average cost methods. Non-LIFO inventories are stated at
the lower of cost or net realizable value. The excess of current or replacement costs over costs determined under LIFO
was approximately $1.9 billion as of December 31, 2021 and $1.1 billion as of December 31, 2020.
(l)

Property, plant and equipment

We record additions to property, plant and equipment used in operations at cost, which includes asset additions,improvements and betterments. With respect to constructed assets, all materials, direct labor and contract services aswell as certain indirect costs are capitalized. Indirect costs include interest over the construction period. With respect toconstructed assets of our utility and energy subsidiaries that are subject to authoritative guidance for regulated
operations, capitalized costs also include an allowance for funds used during construction, which represents the cost ofequity funds used to finance the construction of the regulated facilities. Normal repairs and maintenance and othercosts that do not improve the property, extend its useful life or otherwise do not meet capitalization criteria are charged
to expense as incurred.

K-77

Notes to Consolidated Financial Statements (Continued)(1)

Significant accounting policies and practices (Continued)(l)Property, plant and equipment (Continued)

Depreciation of assets of our regulated utilities and railroad is generally determined using group depreciation
methods where rates are based on periodic depreciation studies approved by the applicable regulator. Under groupdepreciation, a composite rate is applied to the gross investment in a particular class of property, despite differences inthe service life or salvage value of individual property units within the same class. When such assets are retired or sold,no gain or loss is recognized. Gains or losses on disposals of all other assets are recorded through earnings.
We depreciate property, plant and equipment used by our other businesses to the estimated salvage value
primarily using the straight-line method over estimated useful lives. Ranges of estimated useful lives of depreciable
assets used in our other businesses are as follows: buildings and improvements – 5 to 50 years, machinery andequipment – 3 to 25 years and furniture, fixtures and other – 3 to 15 years. Ranges of estimated useful lives ofdepreciable assets unique to our railroad business are as follows: track structure and other roadway – 10 to 100 years
and locomotives, freight cars and other equipment – 6 to 43 years. Ranges of estimated useful lives of assets unique toour regulated utilities and energy businesses are as follows: utility generation, transmission and distribution systems –5 to 80 years, interstate natural gas pipeline assets – 3 to 80 years and independent power plants and other assets – 2 to
50 years.
We evaluate property, plant and equipment for impairment when events or changes in circumstances indicatethat the carrying value of such assets may not be recoverable or when the assets are held for sale. Upon the occurrenceof a triggering event, we assess whether the estimated undiscounted cash flows expected from the use of the asset andthe residual value from the ultimate disposal of the asset exceeds the carrying value. If the carrying value exceeds theestimated recoverable amounts, we reduce the carrying value to fair value and record an impairment loss in earnings,
except with respect to impairment of assets of our regulated utility and energy subsidiaries where the impacts ofregulation are considered in evaluating the carrying value.
(m)

LeasesWe are party to contracts where we lease property to others (“lessor” contracts) and where we lease property
from others (“lessee” contracts). We record acquisitions of and additions to equipment that we lease to others at cost.
We depreciate equipment held for lease to estimated salvage value primarily using the straight-line method overestimated useful lives ranging from 3 to 35 years. We use declining balance depreciation methods for assets when therevenue-earning power of the asset is greater during the earlier years of its life. We also evaluate equipment held forlease for impairment consistent with policies for property, plant and equipment.
When we lease assets from others, we record right-of-use assets and lease liabilities. Right-of-use assets
represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to makelease payments arising from the lease. In this regard, lease payments include fixed payments and variable paymentsthat depend on an index or rate. The lease term is generally considered the non-cancellable lease period. Certain lease
contracts contain renewal options or other terms that provide for variable payments based on performance or usage.
Options are not included in determining right-of-use assets or lease liabilities unless it is reasonably certain that options
will be exercised. Generally, incremental borrowing rates are used in measuring lease liabilities. Right-of-use assets are
subject to review for impairment. As permitted under GAAP, we do not separate lease components from non-lease
components by class of asset and do not record assets or liabilities for leases with terms of one year or less.
(n)

Goodwill and other intangible assets

Goodwill represents the excess of the acquisition price of a business over the fair value of identified net assets ofthat business. We evaluate goodwill for impairment at least annually. When evaluating goodwill for impairment, weestimate the fair value of the reporting unit. Several methods may be used to estimate a reporting unit’s fair value,
including market quotations, asset and liability fair values and other valuation techniques, including, but not limited to,
discounted projected future net earnings or net cash flows and multiples of earnings. When the carrying amount of areporting unit, including goodwill, exceeds the estimated fair value, the excess is charged to earnings as an impairment
loss.
Intangible assets with indefinite lives are also tested for impairment at least annually and when events or changes
in circumstances indicate that, more-likely-than-not, the asset is impaired. Significant judgment is required inestimating fair values and performing goodwill and indefinite-lived intangible asset impairment tests. We amortize
intangible assets with finite lives in a pattern that reflects the expected consumption of related economic benefits or ona straight-line basis over the estimated economic useful lives. Intangible assets with finite lives are reviewed for
impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable.
K-78

Notes to Consolidated Financial Statements (Continued)(1)

Significant accounting policies and practices (Continued)(o)Revenue recognition

We earn insurance premiums on prospective property/casualty insurance and reinsurance contracts over the loss
exposure or coverage period in proportion to the level of protection provided. Premiums are generally earned inproportion to the coverage provided, which is generally ratable over the term of the contract with unearned premiums
computed on a monthly or daily pro-rata basis. Premiums on retroactive property/casualty reinsurance contracts are
generally received in full and are earned at the inception of the contracts, as all underlying loss events covered by thepolicies occurred prior to contract inception. Premiums for life reinsurance and periodic payment annuity contracts areearned when due. Premiums for periodic payment annuity contracts are usually received in full at the inception of thecontracts. Premiums earned are stated net of amounts ceded to reinsurers. Premiums earned on contracts withexperience-rating provisions reflect estimated loss experience under such contracts.
Sales and service revenues are recognized when goods or services are transferred to a customer. A good orservice is transferred when (or as) the customer obtains control of that good or service. Revenues are based on theconsideration we expect to receive in connection with our promises to deliver goods and services to our customers.
We manufacture and/or distribute a wide variety of industrial, building and consumer products. Our sales
contracts provide customers with these products through wholesale and retail channels in exchange for consideration
specified under the contracts. Contracts generally represent customer orders for individual products at stated prices.
Sales contracts may contain either single or multiple performance obligations. In instances where contracts containmultiple performance obligations, we allocate the revenue to each obligation based on the relative stand-alone selling
prices of each product or service.
Sales revenue reflects reductions for returns, allowances, volume discounts and other incentives, some of which
may be contingent on future events. In certain customer contracts, sales revenue includes certain state and local excise
taxes billed to customers on specified products when those taxes are levied directly upon us by the taxing authorities.
Sales revenue excludes sales taxes and value-added taxes collected on behalf of taxing authorities. Sales revenue
includes consideration for shipping and other fulfillment activities performed prior to the customer obtaining control of
the goods. We also elect to treat consideration for such services performed after control has passed to the customer assales revenue.
Our product sales revenues are generally recognized at a point in time when control of the product transfers to
the customer, which coincides with customer pickup or product delivery or acceptance, depending on terms of thearrangement. We recognize sales revenues and related costs with respect to certain contracts over time, primarily fromcertain castings, forgings and aerostructures contracts. Control of the product units under these contracts transfers
continuously to the customer as the product is manufactured. These products generally have no alternative use and thecontract requires the customer to provide reasonable compensation if terminated for reasons other than breach ofcontract.
The primary performance obligation under our freight rail transportation service contracts is to move freightfrom a point of origin to a point of destination. The performance obligations are represented by bills of lading which
create a series of distinct services that have a similar pattern of transfer to the customer. The revenues for eachperformance obligation are based on various factors including the product being shipped, the origin and destination
pair and contract incentives, which are outlined in various private rate agreements, common carrier public tariffs,
interline foreign road agreements and pricing quotes. The transaction price is generally a per car/unit amount totransport railcars from a specified origin to a specified destination. Freight revenues are recognized over time as theservice is performed because the customer simultaneously receives and consumes the benefits of the service. Revenues
recognized represent the proportion of the service completed as of the balance sheet date. Invoices for freighttransportation services are generally issued to customers and paid within 30 days or less. Customer incentives, which
are primarily provided for shipping a specified cumulative volume or shipping to/from specific locations, are recorded
as a reduction to revenue on a pro-rata basis based on actual or projected future customer shipments.

K-79

Notes to Consolidated Financial Statements (Continued)(1)

Significant accounting policies and practices (Continued)(o)Revenue recognition (Continued)

Our energy revenue derives primarily from tariff-based sales arrangements approved by various regulatorycommissions. These tariff-based revenues are mainly comprised of energy, transmission, distribution and natural gas
and have performance obligations to deliver energy products and services to customers which are satisfied over time asenergy is delivered or services are provided. Our nonregulated energy revenue primarily relates to our renewableenergy business. Energy revenues are equivalent to the amounts we have the right to invoice and correspond directlywith the value to the customer of the performance to date and include billed and unbilled amounts. Payments from
customers are generally due within 30 days of billing. Rates charged for energy products and services are establishedby regulators or contractual arrangements that establish the transaction price, as well as the allocation of price among
the separate performance obligations. When preliminary regulated rates are permitted to be billed prior to final
approval by the applicable regulator, certain revenue collected may be subject to refund and a liability for estimatedrefunds is accrued. Other service revenues derive from contracts with customers in which performance obligations are
satisfied over time, where customers receive and consume benefits as we perform the services or at a point in time
when the services are provided. Other service revenues primarily derive from real estate brokerage, automotive repair,aircraft management, aviation training, franchising and news distribution.
Leasing revenue is generally recognized ratably over the term of the lease or based on usage, if applicable under
the terms of the contract. A substantial portion of our lessor contracts are classified as operating leases.
(p)

Losses and loss adjustment expenses

We record liabilities for unpaid losses and loss adjustment expenses under property/casualty insurance andreinsurance contracts for loss events that have occurred on or before the balance sheet date. Such liabilities represent
the estimated ultimate payment amounts without discounting for time value.
We base liability estimates on (1) loss reports from policyholders and cedents, (2) individual case estimates and(3) estimates of incurred but not reported losses. Losses and loss adjustment expenses in the Consolidated Statementsof Earnings include paid claims, claim settlement costs and changes in estimated claim liabilities. Losses and loss
adjustment expenses charged to earnings are net of amounts recovered and estimates of amounts recoverable underceded reinsurance contracts. Reinsurance contracts do not relieve the ceding company of its obligations to indemnify
policyholders with respect to the underlying insurance and reinsurance contracts.
(q)

Retroactive reinsurance contracts

We record liabilities for unpaid losses and loss adjustment expenses under short duration retroactive reinsurance
contracts consistent with property/casualty insurance and reinsurance contracts described in Note 1(p). With respect toretroactive reinsurance contracts, we also record deferred charge assets at the inception of the contracts, representing
the excess, if any, of the estimated ultimate claim liabilities over the premiums earned. We subsequently amortize thedeferred charge assets over the expected claim settlement periods using the interest method. Changes to the estimatedtiming or amount of future loss payments also produce changes in deferred charge balances. We apply changes in such
estimates retrospectively and the resulting changes in deferred charge balances, together with periodic amortization, areincluded in insurance losses and loss adjustment expenses in the Consolidated Statements of Earnings.
(r)Insurance policy acquisition costs

We capitalize the incremental costs that directly relate to the successful sale of insurance contracts, subject toultimate recoverability. For short duration contracts, we subsequently amortize such costs to underwriting expenses as
the related premiums are earned. Acquisition costs related to long duration life insurance contracts are amortized overthe expected premium-paying period in proportion to the anticipated premiums over the life of the policy. Suchanticipated premiums are estimated using the same assumptions used for computing liabilities for future policy
benefits. Direct incremental acquisition costs include commissions, premium taxes and certain other costs associatedwith successful efforts. We expense all other underwriting costs as incurred. The recoverability of capitalized insurance
policy acquisition costs generally reflects anticipation of investment income. The unamortized balances are included inother assets and were approximately $3.4 billion and $3.25 billion at December 31, 2021 and 2020, respectively.

K-80

Notes to Consolidated Financial Statements (Continued)(1)

Significant accounting policies and practices (Continued)(s)Life and annuity insurance benefits

We compute liabilities for benefits under life insurance contracts based upon estimated future investment yields,
expected mortality, morbidity and lapse or withdrawal rates, as well as estimates of premiums we expect to receive andexpenses we expect to incur in the future. These assumptions, as applicable, also include a margin for adverse
deviation and may vary with the characteristics of the contract’s date of issuance, policy duration and country of risk.
The interest rate assumptions used may vary by contract or jurisdiction. We discount periodic payment annuity
liabilities based on the implicit rate as of the inception of the contracts such that the present value of the liabilities
equals the premiums. Discount rates for most contracts range from 3% to 7%.
(t)Regulated utilities and energy businesses

Certain energy subsidiaries prepare their financial statements in accordance with authoritative guidance forregulated operations, reflecting the economic effects of regulation from the ability to recover certain costs from
customers and the requirement to return revenues to customers in the future through the regulated rate-setting process.
Accordingly, certain costs are deferred as regulatory assets and certain income is accrued as regulatory liabilities.
Regulatory assets and liabilities will be amortized into operating expenses and revenues over various future periods.
Regulatory assets and liabilities are continually assessed for probable future inclusion in regulatory rates byconsidering factors such as applicable regulatory or legislative changes and recent rate orders received by otherregulated entities. If future inclusion in regulatory rates ceases to be probable, the amount no longer probable ofinclusion in regulatory rates is charged or credited to earnings (or other comprehensive income, if applicable) or
returned to customers.
(u)Foreign currency

The accounts of our non-U.S. based subsidiaries are measured, in most instances, using functional currencies
other than the U.S. Dollar. Revenues and expenses in the financial statements of these subsidiaries are translated into
U.S. Dollars at the average exchange rate for the period and assets and liabilities are translated at the exchange rate asof the end of the reporting period. The net effects of translating the financial statements of these subsidiaries areincluded in shareholders’ equity as a component of accumulated other comprehensive income. Gains and losses arisingfrom transactions denominated in a currency other than the functional currency of the reporting entity, including gains
and losses from the remeasurement of assets and liabilities due to changes in currency exchange rates, are included inearnings.
(v)

Income taxes

Berkshire files a consolidated federal income tax return in the United States, which includes eligible subsidiaries.
In addition, we file income tax returns in state, local and foreign jurisdictions as applicable. Provisions for current
income tax liabilities are calculated and accrued on income and expense amounts expected to be included in the income
tax returns for the current year. Income taxes reported in earnings also include deferred income tax provisions.
Deferred income tax assets and liabilities are computed on differences between the financial statement bases andtax bases of assets and liabilities at the enacted tax rates. Changes in deferred income tax assets and liabilities
associated with components of other comprehensive income are charged or credited directly to other comprehensive
income. Otherwise, changes in deferred income tax assets and liabilities are included as a component of income tax
expense. The effect on deferred income tax assets and liabilities attributable to changes in enacted tax rates are charged
or credited to income tax expense in the period of enactment. Valuation allowances are established for certain deferred
tax assets when realization is not likely.
Assets and liabilities are established for uncertain tax positions taken or positions expected to be taken in income
tax returns when such positions, in our judgment, do not meet a more-likely-than-not threshold based on the technicalmerits of the positions. Estimated interest and penalties related to uncertain tax positions are included as a componentof income tax expense.

K-81

Notes to Consolidated Financial Statements (Continued)(1)

Significant accounting policies and practices (Continued)(w)

New accounting pronouncements adopted in 2020

We adopted Accounting Standards Codification (“ASC”) 326 “Financial Instruments-Credit Losses” on January
1, 2020. ASC 326 provides for the measurement of expected credit losses on financial assets that are carried atamortized cost based on the net amounts expected to be collected. Measurements of expected credit losses therefore
include provisions for non-collection, whether the risk is probable or remote. Prior to the adoption of ASC 326, credit
losses were measured when non-collection was considered probable. Upon adoption of ASC 326, we recorded a charge
to retained earnings of $388 million representing the cumulative after-tax increase in our allowances for credit losses.
(x)

New accounting pronouncements adopted in 2019

Berkshire adopted ASC 842 “Leases” on January 1, 2019 with respect to contracts in effect as of the adoption
and elected to not restate prior period financial statements. Most significantly, ASC 842 requires a lessee to recognize aliability to make operating lease payments and an asset with respect to its right to use the underlying asset for the lease
term. Upon adoption, we recorded operating lease right-of-use assets of approximately $6.2 billion, lease liabilities of$5.9 billion and reduced other assets by approximately $300 million.
(y)

New accounting pronouncements to be adopted subsequent to December 31, 2021

In August 2018, the Financial Accounting Standards Board issued Accounting Standards Update 2018-12“Targeted Improvements to the Accounting for Long-Duration Contracts” (“ASU 2018-12”). ASU 2018-12 requires
reassessment of cash flow assumptions at least annually and revision of discount rate assumptions each reporting
period in valuing policyholder liabilities and related deferred acquisition costs of long-duration insurance andreinsurance contracts. The effects from changes in cash flow assumptions are reflected in earnings and the effects fromchanges in discount rate assumptions are reflected in other comprehensive income. Currently, the cash flow anddiscount rate assumptions are set at the contract inception date and not subsequently changed, except under limited
circumstances. ASU 2018-12 is to be applied retrospectively to the earliest period presented in the financial statements,
requires new disclosures and is effective for fiscal years beginning after December 15, 2022, with early adoption
permitted.
We currently intend to adopt ASU 2018-12 as of January 1, 2023 using the modified retrospective method,which provides that the revised cash flow and discount rate assumptions as of January 1, 2021 (the transition date) beapplied to contracts then in-force, with liabilities then remeasured as provided under the standard. The cumulative
effects from discount rate assumption changes as of the transition date will be reflected in accumulated othercomprehensive income and the cumulative effect from cash flow assumption changes will be included in retained
earnings. While we have not finalized our assessment of the impact of the adoption as of the transition date, wecurrently believe that the changes in discount rate assumptions will have a greater effect on our recorded liabilities thanchanges in cash flow assumptions. We also preliminarily estimate that the changes in discount rate assumptions as ofJanuary 1, 2021 will increase our life, health and annuity benefit liabilities from the amounts previously reported due tothe historically low interest rate environment at that time. However, the ultimate impact of adopting ASU 2018-12 will
be based on the discount rate and cash flow assumptions determined as of the January 1, 2023 adoption date. We,
therefore, continue to evaluate the effect this standard will have on our Consolidated Financial Statements.
(2)

Business acquisitions

Our long-held acquisition strategy is to acquire businesses that have consistent earning power, good returns on equity
and able and honest management. Financial results attributable to business acquisitions are included in our Consolidated
Financial Statements beginning on their respective acquisition dates.
Berkshire Hathaway Energy (“BHE”) acquired certain businesses of Dominion Energy, Inc. (“Dominion”) on
November 1, 2020, pursuant to a definitive agreement with Dominion in July 2020. The acquired businesses included natural
gas transmission, gathering and storage pipelines, natural gas storage capacity and partial ownership of a liquefied natural gas
export, import and storage facility (“Cove Point”). In October 2020, BHE and Dominion also agreed to provide for the
exclusion of certain pipeline businesses from the initial agreement and entered into a second acquisition agreement withrespect to the excluded pipeline businesses. The closing of the second agreement was subject to regulatory and customary
closing conditions; however, in July 2021, BHE and Dominion agreed to terminate the second agreement.

K-82

Notes to Consolidated Financial Statements (Continued)(2)

Business acquisitions (Continued)

The cost of the acquisition was approximately $2.5 billion after post-closing adjustments as provided in the agreement.
The fair values of identified assets acquired and liabilities assumed and residual goodwill are summarized as follows (inmillions).
Property, plant and equipment
Goodwill
Other
Assets acquired$

Notes payable and other borrowings
Other
Liabilities assumed
Noncontrolling interests
Net assets

$

9,264
1,741
2,398
13,403

$

5,615
1,358
6,973
3,916
2,514

$

As part of this acquisition, BHE acquired an indirect 25% economic interest in Cove Point, consisting of 100% of thegeneral partnership interest and 25% of the limited partnership interests. We concluded that Cove Point is a VIE and that wehave the power to direct the activities that most significantly impact its economic performance as well as the obligation toabsorb losses and receive benefits which could be significant to Cove Point. Therefore, we treat Cove Point as a consolidated
subsidiary. The noncontrolling interests are attributable to the limited partner interests held by third parties.
In each of the past three years, we also completed several smaller-sized business acquisitions, which we consider as“bolt-ons” to several of our existing business operations. We do not believe that these acquisitions are material, individuallyor in the aggregate to our Consolidated Financial Statements.
(3)

Investments in fixed maturity securities

Investments in fixed maturity securities as of December 31, 2021 and 2020 are summarized by type below (inmillions).
Amortized
Cost

December 31, 2021
U.S. Treasury, U.S. government corporations and agencies $Foreign governments
Corporate bonds
Other$
December 31, 2020
U.S. Treasury, U.S. government corporations and agencies $Foreign governments
Corporate bonds
Other$

Unrealized
Gains

3,286
10,9981,363
317
15,964$

3,348
11,233
4,729
414
19,724$$$

Unrealized
Losses

22
29
412
47
510

$

55
110
464
66
695

$

$

$

Fair
Value

(5) $
(33)
(1)
(1)
(40) $

3,303
10,994
1,774
363
16,434

— $
(5)
(2)
(2)
(9) $

3,403
11,3385,191
478
20,410Investments in foreign governments include securities issued by national and provincial government entities as well as
instruments that are unconditionally guaranteed by such entities. As of December 31, 2021, approximately 93% of ourforeign government holdings were rated AA or higher by at least one of the major rating agencies. The amortized cost andestimated fair value of fixed maturity securities at December 31, 2021 are summarized below by contractual maturity dates.
Amounts are in millions. Actual maturities may differ from contractual maturities due to prepayment rights held by issuers.

Amortized cost
Fair value

Due in one
year or lessDue after one
year throughfive years

Due after five
years throughten years

Due after
ten years

$

$

$

$

9,171
9,165

6,044
6,086

K-83

307
559

207
347

Mortgagebacked
securities

$

235
277

Total

$ 15,964
16,434

Notes to Consolidated Financial Statements (Continued)(4)

Investments in equity securities

Investments in equity securities as of December 31, 2021 and 2020 are summarized based on the primary industry of
the investee in the table below (in millions).
Net
Unrealized
Gains

Cost
Basis

December 31, 2021 *Banks, insurance and financeConsumer products
Commercial, industrial and other$$*

26,822
36,076
41,707
104,605

$

$

$

$

89,058191,02170,640350,719

Approximately 73% of the aggregate fair value was concentrated in four companies (American Express Company –$24.8 billion; Apple Inc. – $161.2 billion; Bank of America Corporation – $46.0 billion and The Coca-Cola Company– $23.7 billion).
Net
Unrealized
Gains

Cost
Basis

December 31, 2020 *Banks, insurance and financeConsumer products
Commercial, industrial and other$$*

62,236
154,945
28,933
246,114

Fair
Value

26,312
34,74747,561
108,620$$

40,167
111,583
20,800172,550

Fair
Value

$

$

66,479146,330
68,361
281,170

Approximately 68% of the aggregate fair value was concentrated in four companies (American Express Company –$18.3 billion; Apple Inc. – $120.4 billion; Bank of America Corporation – $31.3 billion and The Coca-Cola Company– $21.9 billion).

Investments in commercial, industrial and other equity securities include our investments in Occidental Corporation(“Occidental”), which we acquired in 2019. These investments were acquired for a total of $10 billion and consist of
Occidental Cumulative Perpetual Preferred Stock with an aggregate liquidation value of $10 billion and warrants, whichcurrently permit us to purchase up to 83.86 million shares of Occidental common stock at an exercise price of $59.62 pershare. The preferred stock accrues dividends at 8% per annum and is redeemable at the option of Occidental commencing in
2029 at a redemption price equal to 105% of the liquidation preference plus any accumulated and unpaid dividends and is
mandatorily redeemable under certain specified events. The warrants are exercisable in whole or in part until one year after
the redemption of the preferred stock.
(5)

Equity method investments

Berkshire and its subsidiaries hold investments in certain businesses that are accounted for pursuant to the equity
method. Currently, the most significant of these is our investment in the common stock of The Kraft Heinz Company (“Kraft
Heinz”). Kraft Heinz is one of the world’s largest manufacturers and marketers of food and beverage products, including
condiments and sauces, cheese and dairy, meals, meats, refreshment beverages, coffee and other grocery products. Berkshire
currently owns 26.6% of the outstanding shares of Kraft Heinz common stock.
We recorded equity method earnings from our investment in Kraft Heinz of $269 million in 2021, $95 million in 2020
and $493 million in 2019. Equity method earnings included the effects of goodwill and identifiable intangible asset
impairment charges recorded by Kraft Heinz. Our share of such charges was approximately $350 million in 2021, $850
million in 2020 and $450 million in 2019. We received dividends from Kraft Heinz of $521 million in each of 2021, 2020
and 2019, which we recorded as reductions in our carrying value.
Shares of Kraft Heinz common stock are publicly-traded and the fair value of our investment was approximately $11.7
billion at December 31, 2021 and $11.3 billion at December 31, 2020. The carrying value of our investment wasapproximately $13.1 billion at December 31, 2021 and $13.3 billion at December 31, 2020. As of December 31, 2021, thecarrying value of our investment exceeded the fair value based on the quoted market price by approximately 11% of thecarrying value. We evaluated our investment in Kraft Heinz for impairment. Based on the prevailing facts and circumstances,
we concluded recognition of an impairment charge in earnings was not required as of December 31, 2021.

K-84

Notes to Consolidated Financial Statements (Continued)(5)

Equity method investments (Continued)
Summarized consolidated financial information of Kraft Heinz follows (in millions).
December 25,
2021

AssetsLiabilities$

93,39443,942

Year ending
December 25,
2021

Sales
Net earnings attributable to Kraft Heinz common shareholders$$

26,042
1,012

December 26,
2020$

99,83049,587

Year ending
December 26,
2020

$
$

26,185356

Year ending
December 28,
2019

$
$

24,977
1,935

Other investments accounted for pursuant to the equity method include our investments in Berkadia Commercial
Mortgage LLC (“Berkadia”), Pilot Travel Centers LLC (“Pilot”), Electric Transmission Texas, LLC (“ETT”) and beginningin 2021, Iroquois Gas Transmission System L.P. (“Iroquois”). The aggregate carrying value of our investments in these
entities was $4.3 billion as of December 31, 2021 and $4.0 billion as of December 31, 2020. Our equity method earnings inthese entities were $726 million in 2021, $631 million in 2020 and $683 million in 2019. During 2021, we received
distributions of approximately $1.2 billion from these investees. Additional information concerning these investments
follows.
We own a 50% interest in Berkadia, with Jefferies Financial Group Inc. (“Jefferies”) owning the other 50% interest.
Berkadia is a servicer of commercial real estate loans in the U.S., performing primary, master and special servicing functions
for U.S. government agency programs, commercial mortgage-backed securities transactions, banks, insurance companies andother financial institutions. Berkadia funds a portion of its operations through commercial paper borrowings, which are
currently limited to $1.5 billion. On December 31, 2021, Berkadia’s commercial paper outstanding was $1.47 billion.
Berkadia’s commercial paper is supported by a surety policy issued by a Berkshire insurance subsidiary. Jefferies is obligatedto indemnify us for one-half of any losses incurred under the policy. BHE subsidiaries own a 50% noncontrolling interest in
ETT, an owner and operator of electric transmission assets in Texas and a 50% noncontrolling interest in Iroquois, whichowns and operates a natural gas pipeline located in New York and Connecticut.
We own a 38.6% interest in Pilot, headquartered in Knoxville, Tennessee. Pilot is the largest operator of travel centers
in North America with more than 800 retail locations across 44 U.S. states and six Canadian provinces and through wholesale
distribution. Pilot’s revenues in 2021 were approximately $45 billion. The Haslam family currently owns a 50.1% interest in
Pilot and a third party owns the remaining 11.3% interest. We have an agreement to acquire in 2023 an additional 41.4%
interest in Pilot with the Haslam family retaining a 20% interest. As a result, Berkshire will become the majority owner of
Pilot in 2023.
(6)

Investment and derivative contract gains/losses

Investment and derivative contract gains/losses for each of the three years ending December 31, 2021 are summarized
as follows (in millions).
2021

Investment gains (losses):
Equity securities:
Change in unrealized investment gains (losses) during the year on
securities held at the end of the year
Investment gains (losses) during the year on securities sold$

Fixed maturity securities:
Gross realized gains
Gross realized losses
Other
Investment gains (losses)
Derivative contract gains (losses)$

K-85

76,375997
77,372

2020

2019

$

54,951 $(14,036)
40,91569,581
1,585
71,16685(29)
148
77,576966
78,542 $

56
(27)
(39)
40,905(159)
40,746 $

87
(25)
(105)
71,123
1,484
72,607

Notes to Consolidated Financial Statements (Continued)(6)

Investment and derivative contract gains/losses (Continued)

Equity securities gains and losses include unrealized gains and losses from changes in fair values during the year on
equity securities we still owned at the end of the year, as well as gains and losses on securities we sold during the year. As
reflected in the Consolidated Statements of Cash Flows, we received proceeds of approximately $15.8 billion in 2021, $38.8
billion in 2020 and $14.3 billion in 2019 from sales of equity securities. In the preceding table, investment gains and losses
on equity securities sold during the year represent the difference between the sales proceeds and the fair value of the equity
securities sold at the beginning of the applicable year or, if later, the purchase date. Our taxable gains and losses on equity
securities sold are generally the difference between the proceeds from sales and original cost. Taxable gains were $3.6 billion
in 2021, $6.2 billion in 2020 and $3.2 billion in 2019.
The derivative contract gains and losses derive from equity index put option contracts written prior to March 2008 on
four major equity indexes. Information related to these contracts follows (dollars in millions).
December 31,
2021

Balance sheet liabilities - at fair value
Notional value
Intrinsic value
Weighted average remaining life (in years)

$

2020

99
6,992
—
0.5

$

1,065
10,991727
1.2

Notional value in the preceding table represents the aggregate undiscounted amounts payable assuming the value ofeach index is zero on each contract’s expiration date. Intrinsic value is the undiscounted liability assuming the contracts aresettled based on the index values and foreign currency exchange rates as of the balance sheet date. Contracts comprising 63%of the notional value as of December 31, 2021 will expire in the first quarter of 2022. Future payments, if any, under any
given contract will be required if the index value is below the contract strike price at the contract expiration date. We
received aggregate premiums on the contract inception dates of $1.3 billion with respect to unexpired contracts as ofDecember 31, 2021 and we have no counterparty credit risk.
(7)

Loans and finance receivables
Loans and finance receivables are summarized as follows (in millions).
December 31,
2021

Loans and finance receivables before allowances and discounts
Allowances for credit losses
Unamortized acquisition discounts and points

$

2020

22,065 $
(765)
(549)
20,751 $$

20,436(712)(523)
19,201Loans and finance receivables are principally manufactured home loans, and to a lesser extent, commercial loans andsite-built home loans. Reconciliations of the allowance for credit losses on loans and finance receivables for 2021, 2020 and2019 follow (in millions).
2021

Balance at beginning of year
Adoption of ASC 326
Provision for credit losses
Charge-offs, net of recoveries
Balance at December 31

$

2020

712 $
—
88
(35)
765 $

$

2019

167 $
486
177
(118)
712 $

177
—
125
(135)
167

At December 31, 2021, approximately 99% of manufactured and site-built home loan balances were evaluatedcollectively for impairment. At December 31, 2021, we considered approximately 97% of the loan balances to be current as
to payment status. A summary of performing and non-performing home loans before discounts and allowances by year ofloan origination as of December 31, 2021 follows (in millions).
Origination Year2021

Performing
Non-performing
Total

$
$

4,898
4
4,902

2020

$
$

3,164
5
3,169

2019

$
$

2018

2,238
6
2,244
K-86

$
$

1,694
7
1,701

2017

$
$

1,259
5
1,264

Prior

$
$

6,842
40
6,882

Total

$
$

20,095
67
20,162

Notes to Consolidated Financial Statements (Continued)(7)

Loans and finance receivables (Continued)

We are also party to commercial loan agreements with Seritage Growth Properties (“Seritage”) and Lee Enterprises,
Inc, (“Lee”), in which loan balances aggregated $1.9 billion at December 31, 2021 and $2.1 billion at December 31, 2020.
The Seritage loan is pursuant to a $2.0 billion term loan facility and the outstanding loan is secured by mortgages on its realestate properties. During the fourth quarter of 2021, the loan agreement with Seritage was amended to allow optional loan
prepayments without penalty and on December 31, 2021, Seritage made a loan prepayment of $160 million. The amendments
further provide Seritage with the option to extend the maturity of the loan to July 31, 2025, if the outstanding principal has
been reduced to $800 million by the original expiration date of July 31, 2023. The loan to Lee matures in 2045 and was madein connection with its acquisition of our newspaper operations and the repayment by Lee of its then outstanding credit
facilities. We are the sole lender to each of these entities and each of these loans is current as to payment status.
(8)

Other receivables
Other receivables are comprised of the following (in millions).
December 31,
2021

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

December 31,
2020

15,0504,900
12,971
3,146(679)
35,388

$

3,678
650
(151)
4,177

$

$

$

$

14,025
4,805
11,521
2,637(678)
32,310
3,235
438
(131)
3,542

$

Provisions for credit losses with respect to receivables summarized above were $441 million in 2021, $564 million in2020 and $363 million in 2019. Charge-offs, net of recoveries, were $420 million in 2021, $401 million in 2020 and $350
million in 2019.
(9)Inventories
Inventories are comprised of the following (in millions).
December 31,
2021

Raw materials
Work in process and otherFinished manufactured goods
Goods acquired for resale

$

$

2020

5,743
3,192
4,530
7,489
20,954

$

$

4,821
2,541
4,412
7,434
19,208(10) Property, plant and equipment
A summary of property, plant and equipment of our insurance and other businesses follows (in millions).
December 31,
2021

Land, buildings and improvements
Machinery and equipment
Furniture, fixtures and other$Accumulated depreciation$

K-87

14,070 $26,0634,640
44,773(23,939)
20,834 $2020

13,79925,4884,530
43,817(22,617)
21,200Notes to Consolidated Financial Statements (Continued)(10) Property, plant and equipment (Continued)
A summary of property, plant and equipment of railroad and 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.
December 31,
2021

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 assets
Construction in progress
Accumulated depreciation$

2020

65,843 $13,822
1,027
80,692(14,978)
65,714

63,824
13,523916
78,263(13,175)
65,08890,223
17,423
13,695
4,196
125,537(35,721)89,816
155,530 $

86,73016,667
12,671
3,308
119,376(33,248)
86,128151,216

Depreciation expense for each of the three years ending December 31, 2021 is summarized below (in millions).
2021

Insurance and otherRailroad, utilities and energy

$

2020

2,318
5,990
8,308

$

$

2,320
5,799
8,119

$

2019

$

2,269
5,297
7,566

$

(11) Equipment held for lease
Equipment held for lease includes railcars, aircraft, over-the-road trailers, intermodal tank containers, cranes, storage
units and furniture. Equipment held for lease is summarized below (in millions).
December 31,
2021

Railcars
Aircraft
Other

$

2020

9,448 $
9,234
5,053
23,735(8,817)
14,918 $Accumulated depreciation
$

9,402
8,204
4,868
22,474(7,873)
14,601

Depreciation expense for equipment held for lease was $1,158 million in 2021, $1,200 million in 2020 and$1,181 million in 2019. Fixed and variable operating lease revenues for each of the three years ending December 31, 2021 aresummarized below (in millions).
2021

Fixed lease revenue
Variable lease revenue

$
$

K-88

4,482
1,506
5,988

2020

$
$

4,262
947
5,209

2019

$
$

4,415
1,441
5,856

Notes to Consolidated Financial Statements (Continued)(11) Equipment held for lease (Continued)
A summary of future operating lease receipts as of December 31, 2021 follows (in millions).
2022

$

2023

2,922

$

2024

2,233

$

2025

1,623

$

2026

1,009

$

Thereafter

536

$

Total

392

$

8,715

(12) Leases
We are party to contracts where we lease property from others under contracts classified as operating leases. We
primarily lease office and operating facilities, locomotives, freight cars, energy generation facilities and transmission assets.
The weighted average remaining term of our operating leases was approximately 7.2 years at December 31, 2021 and 7.3
years at December 31, 2020. Operating lease right-of-use assets are included in other assets and were $5,091 million at
December 31, 2021 and $5,579 million at December 31, 2020. Our lease liabilities are included in accounts payable, accruals
and other liabilities and were $4,991 million at December 31, 2021 and $5,469 million at December 31, 2020. The weighted
average discount rate used to measure lease liabilities was approximately 3.5% at December 31, 2021 and 3.6% at December
31, 2020. A summary of our remaining future operating lease payments reconciled to lease liabilities as of December 31,
2021 and December 31, 2020 follows (in millions).

Year 1

December 31:
2021
2020

$

1,238
1,342

Year 2

$

1,038
1,111

Year 3$835
905

Year 4$631
725

Year 5$418
544

Thereafter

Total
lease
payments

Amountrepresenting
interest

$

$

$

1,571
1,691

5,731
6,318

Lease
liabilities(740) $
(849)

4,991
5,469

Components of operating lease costs for the three years ending December 31, 2021, by type, are summarized in thefollowing table (in millions).
2021

Operating lease cost
Short-term lease cost
Variable lease cost
Sublease income
Total lease cost

$

$

2020

1,426 $
154
223
(10)
1,793 $

2019

1,413 $
145
228
(10)
1,776 $

1,459
178
276
(24)
1,889

(13) Goodwill and other intangible assets
Reconciliations of the changes in the carrying value of goodwill during 2021 and 2020 follow (in millions).
December 31,
2021

Balance at beginning of year
Business acquisitions
Impairment charges
Other, including foreign currency translation
Balance at end of year**$$

73,734 $
353
—
(212)
73,875 $2020

81,882
1,758(10,033)
127
73,734

Net of accumulated goodwill impairments of $11.0 billion as of December 31, 2021 and 2020.

During 2020, we reevaluated goodwill and indefinite-lived intangible assets of certain of our reporting units for
impairment due to the disruptions arising from the COVID-19 pandemic, which we believed most significantly affected the
air travel, commercial aerospace and supporting industries. We recorded goodwill impairment charges of approximately $10
billion and indefinite-lived intangible asset impairment charges of $638 million in the second quarter of 2020. Approximately$10 billion of these charges pertained to Precision Castparts Corp. (“PCC”), one of the largest businesses within Berkshire’s
manufacturing segment. The carrying values of PCC-related goodwill and indefinite-lived intangible assets prior to theimpairment charges were approximately $31 billion. The impairment charges were determined based on discounted cash flow
methods and reflected our assessments of the risks and uncertainties associated with the aerospace industry. Significant
judgment is required in estimating the fair value of a reporting unit and in performing impairment tests. Due to the inherent
uncertainty in forecasting future cash flows and earnings, actual results in the future may vary significantly from theforecasts.

K-89

Notes to Consolidated Financial Statements (Continued)(13) Goodwill and other intangible assets (Continued)
The gross carrying amounts and related accumulated amortization of other intangible assets are summarized as follows(in millions).
December 31, 2021
Gross
carrying
amountInsurance and other:
Customer relationships
Trademarks and trade names
Patents and technology
Other
Railroad, utilities and energy:
Customer relationships
Trademarks, trade names and otherAccumulated
amortization$ 27,335 $
5,176
4,763
3,390
$ 40,664 $$$December 31, 2020
Net
carrying
value

Gross
carrying
amount6,450 $ 20,885 $ 27,374 $
802
4,374
5,206
3,484
1,279
4,766
1,442
1,948
3,339
12,178 $ 28,486 $ 40,685 $

678 $
1,015
1,693 $

396 $
146
542 $

282 $
869
1,151 $Net
carrying
value

Accumulated
amortization

5,756 $ 21,618
779
4,427
3,313
1,453
1,375
1,964
11,223 $ 29,462

678 $
1,003
1,681 $

361 $
98
459 $

317
905
1,222

Intangible asset amortization expense was $1,252 million in 2021, $1,277 million in 2020 and $1,317 million in 2019.
Estimated amortization expense over the next five years is as follows (in millions): 2022 – $1,189; 2023 – $1,120; 2024 –$1,023; 2025 – $939 and 2026 – $846. Intangible assets with indefinite lives were $18.5 billion as of December 31, 2021 and$18.3 billion as of December 31, 2020 and primarily related to certain customer relationships and trademarks and trade
names.
(14) Supplemental cash flow information
A summary of supplemental cash flow information for each of the three years ending December 31, 2021 is presented
in the following table (in millions).
2021

Cash paid during the year for:
Income taxes
Interest:
Insurance and otherRailroad, utilities and energy
Non-cash investing and financing activities:
Liabilities assumed in connection with business acquisitions
Operating lease liabilities arising from obtaining right-of-use assets

$

5,412

2020

$

5,001

2019

$

5,415

1,227
3,162

1,001
3,006

1,011
2,879

102
687

6,981
729

766
782

(15) Dividend restrictions – Insurance subsidiaries
Payments of dividends by our insurance subsidiaries are restricted by insurance statutes and regulations. Without priorregulatory approval, our principal insurance subsidiaries may declare up to approximately $30 billion as ordinary dividends
during 2022. Investments in fixed maturity and equity securities and short-term investments on deposit with U.S. state
insurance authorities in accordance with state insurance regulations were approximately $6.4 billion at December 31, 2021
and $5.5 billion at December 31, 2020.
Combined shareholders’ equity of U.S. based insurance subsidiaries determined pursuant to statutory accounting rules(Surplus as Regards Policyholders) was approximately $301 billion at December 31, 2021 and $237 billion at December 31,
2020. Statutory surplus differs from the corresponding amount based on GAAP, due to differences in accounting for certain
assets and liabilities. For instance, deferred charges reinsurance assumed, deferred policy acquisition costs, unrealized gains
on certain investments and related deferred income taxes are recognized for GAAP but not for statutory reporting purposes.
In addition, the carrying values of certain assets, such as goodwill and non-insurance entities owned by our insurance
subsidiaries, are not fully recognized for statutory reporting purposes.

K-90

Notes to Consolidated Financial Statements (Continued)(16) Unpaid losses and loss adjustment expenses
Our liabilities for unpaid losses and loss adjustment expenses (also referred to as “claim liabilities”) under property andcasualty insurance and reinsurance contracts are based upon estimates of the ultimate claim costs associated with claim
occurrences as of the balance sheet date and include estimates for incurred-but-not-reported (“IBNR”) claims. A
reconciliation of the changes in claim liabilities, excluding liabilities under retroactive reinsurance contracts (see Note 17),for each of the three years ending December 31, 2021 is as follows (in millions).
2021

Balances at beginning of year:
Gross liabilities
Reinsurance recoverable on unpaid losses
Net liabilities
Incurred losses and loss adjustment expenses:
Current accident year
Prior accident years
Total
Paid losses and loss adjustment expenses:
Current accident year
Prior accident years
Total
Foreign currency effectBusiness acquisition (disposition)
Balances at December 31:
Net liabilities
Reinsurance recoverable on unpaid losses
Gross liabilities

$

$

2020

2019

79,854 $(2,912)
76,94273,019 $(2,855)70,16468,458(3,060)65,39852,099(3,116)48,98343,400(356)
43,04443,335(752)
42,583(22,897)(18,904)(41,801)(420)—(17,884)(18,862)(36,746)480—(19,482)(17,642)(37,124)
(23)
(670)

83,7042,960
86,66476,942
2,912
79,85470,164
2,855
73,019$$Incurred losses and loss adjustment expenses shown in the preceding table were recorded in earnings and related toinsured events occurring in the current year (“current accident year”) and events occurring in all prior years (“prior accident
years”). Incurred and paid losses and loss adjustment expenses are net of reinsurance recoveries. Current accident year
incurred losses included approximately $2.9 billion in 2021, $950 million in 2020 and $1.0 billion in 2019 from significant
catastrophe events (losses in excess of $100 million per event) occurring in the respective year. Current accident year
incurred losses from private passenger auto insurance also increased significantly in 2021 as compared to 2020, primarily due
to increased claims frequencies and severities. In 2020, current accident year incurred losses reflected low private passenger
auto claims frequencies and increased loss estimates for certain commercial insurance and reinsurance business attributable to
the COVID-19 pandemic.
We recorded net reductions of estimated ultimate liabilities for prior accident years of $3.1 billion in 2021, $356
million in 2020 and $752 million in 2019, which produced corresponding reductions in incurred losses and loss adjustment
expenses in those periods. These reductions, as percentages of the net liabilities at the beginning of each year, were 4.0% in
2021, 0.5% in 2020 and 1.1% in 2019.
Estimated ultimate liabilities for prior accident years from primary insurance were reduced by $2.4 billion in 2021,$518 million in 2020 and $457 million in 2019. The reductions in 2021 and 2020 derived primarily from private passenger
auto and medical professional liability claims. In both 2021 and 2020, we also lowered estimated ultimate liabilities for prioraccident years with respect to workers’ compensation claims, which were largely offset by increases in ultimate liabilities forother casualty claims. The decrease in incurred losses for prior accident years in 2019 reflected reductions in medical
professional liability and workers’ compensation estimates partially offset by higher other casualty estimates. Estimatedultimate liabilities for prior accident years related to property and casualty reinsurance decreased $718 million in 2021,
increased $162 million in 2020 and decreased $295 million in 2019. The increase in 2020 included increased claims
estimates for legacy casualty exposures.

K-91

Notes to Consolidated Financial Statements (Continued)(16) Unpaid losses and loss adjustment expenses (Continued)
Estimated net claim liabilities for environmental, asbestos and other latent injury exposures were approximately $2.1
billion at December 31, 2021 and 2020. These liabilities are subject to change due to changes in the legal and regulatoryenvironment. We are unable to reliably estimate additional losses or a range of losses that are reasonably possible for theseclaims.
Disaggregated information concerning our claims liabilities is provided below and in the pages that follow. The effectsof businesses acquired or disposed during the year are reflected in the data presented on a retrospective basis. A
reconciliation of the disaggregated net unpaid losses and allocated loss adjustment expenses (the latter referred to as“ALAE”) of GEICO, Berkshire Hathaway Primary Group (“BH Primary”) and Berkshire Hathaway Reinsurance Group(“BHRG”) to our consolidated unpaid losses and loss adjustment expenses as of December 31, 2021 follows (in millions).

GEICO
PhysicalDamageUnpaid losses and ALAE, net
Reinsurance recoverable
Unpaid unallocated loss
adjustment expenses
Other unpaid losses and loss
adjustment expenses
Unpaid losses and loss adjustment
expenses

$

GEICO
Auto
Liability

BH
Primary
MedicalProfessional
Liability

729 $ 19,768 $
11
1,085

BH Primary
Workers’Compensation
and Other
Casualty

8,506 $28

BHRG
Property

BHRG
Casualty

Total

13,579 $ 13,119 $ 23,611 $ 79,312
639
181
892
2,836
2,448
2,068
$ 86,664

GEICO
GEICO’s claim liabilities predominantly relate to various types of private passenger auto liability and physical damage
claims. For such claims, we establish and evaluate unpaid claim liabilities using standard actuarial loss development methods
and techniques. The actuarial methods utilize historical claims data, adjusted when deemed appropriate to reflect perceived
changes in loss patterns. Claim liabilities include average, case, case development and IBNR estimates.
We establish average liabilities based on expected severities for newly reported physical damage and liability claims
prior to establishing individual case reserves when insufficient time or information is available for specific claim estimatesand for large volumes of minor physical damage claims that once reported are quickly settled. We establish case loss
estimates for liability claims, including estimates for loss adjustment expenses, as the facts and merits of the claim areevaluated.
Claim estimates for liability coverages normally reflect greater uncertainty than physical damage coverages, primarily
due to the longer claim-tails, the greater chance of litigation and the time needed to evaluate facts at the time the caseestimate is first established. The “claim-tail” is the period between the claim occurrence date and claim settlement or payment
date. Consequently, we establish additional case development liabilities, which are usually percentages of the case liabilities.
For unreported claims, IBNR liabilities are estimated by projecting the ultimate number of claims expected (reported andunreported) for each significant coverage and deducting reported claims to produce estimated unreported claims. The productof the average cost per unreported claim and the number of unreported claims produces the IBNR liability estimate. We may
record supplemental IBNR liabilities in certain situations when actuarial techniques are difficult to apply.

K-92

Notes to Consolidated Financial Statements (Continued)(16) Unpaid losses and loss adjustment expenses (Continued)
GEICO’s net incurred and paid auto physical damage and liability losses and ALAE are summarized by accident year
below. IBNR and case development liabilities are as of December 31, 2021. Claim counts are established when accidents that
may result in a liability are reported and are based on policy coverage. Each claim event may generate claims under multiple
coverages, and thus may result in multiple counts. The “Cumulative Number of Reported Claims” includes the combined
number of reported claims for all auto policy coverages. Dollars are in millions.
Physical Damage
Incurred Losses and ALAE through December 31,
Accident
Year

2020*

2020
2021

$

IBNR and Case
Development
Liabilities

2021

8,603

$

Incurred losses and ALAE

$

8,396
12,135
20,531$

Cumulative
Number ofReported
Claims(in thousands)

64
420

7,935
8,967

IBNR and Case
Development
Liabilities

Cumulative
Number ofReported
Claims(in thousands)

Cumulative Paid Losses and ALAE through December 31,
Accident
Year

2020*

2020
2021

$

2021

8,118

$

Paid losses and ALAE
Net unpaid losses and ALAE for 2020 – 2021 accident years
Net unpaid losses and ALAE for accident years before 2020
Net unpaid losses and ALAE

$

8,385
11,427
19,812719
10729

Auto Liability
Incurred Losses and ALAE through December 31,
Accident
Year

2017
2018
2019
2020
2021

2017*

$

2018*

14,095$

13,864
15,383

2019*$

13,88815,226
16,901

2020*

$

2021

13,824
14,985
16,678
14,637$

Incurred losses and ALAE$

13,777
14,83816,191
14,024
17,481
76,311

Cumulative Paid Losses and ALAE through December 31,
Accident
Year

2017
2018
2019
2020
2021

2017*

$

5,806

2018*

$

9,944
6,218

2019*

$

11,79910,772
6,742

2020*

$

12,72912,658
11,671
5,395

Paid losses and ALAE
Net unpaid losses and ALAE for 2017 – 2021 accident years
Net unpaid losses and ALAE for accident years before 2017
Net unpaid losses and ALAE*

Unaudited required supplemental information

K-93

2021

$

$

13,26013,757
13,851
9,839
6,450
57,157
19,154614
19,768

$

232
495
1,202
2,564
5,541

2,646
2,713
2,778
2,087
2,216

Notes to Consolidated Financial Statements (Continued)(16) Unpaid losses and loss adjustment expenses (Continued)
BH Primary
BH Primary’s liabilities for unpaid losses and loss adjustment expenses primarily derive from medical professional
liability and workers’ compensation and other casualty insurance, which includes commercial auto and general liability
insurance. Net incurred and paid losses and ALAE are summarized by accident year in the following tables, disaggregated by
medical professional liability coverages and workers’ compensation and other casualty coverages. IBNR and casedevelopment liabilities are as of December 31, 2021. The cumulative number of reported claims reflects the number ofindividual claimants and includes claims that ultimately resulted in no liability or payment. Dollars are in millions.
Medical Professional Liability
We estimate the ultimate expected incurred losses and loss adjustment expenses for medical professional claim
liabilities using a variety of commonly accepted actuarial methodologies, such as the paid and incurred development method
and Bornhuetter-Ferguson based methods, as well as other techniques that consider insured loss exposures and historical andexpected loss trends, among other factors. These methodologies produce loss estimates from which we determine our best
estimate. In addition, we study developments in older accident years and adjust initial loss estimates to reflect recent
developments based upon claim age, coverage and litigation experience.
Incurred Losses and ALAE through December 31,
Accident
Year

2012
2013
2014
2015
2016
2017
2018
2019
2020
2021

2012*

2013*

2014*

2015*

2016*

2017*

2018*

2019*

2020*

2021

$1,336 $1,306 $1,277 $1,223 $1,168 $1,078 $1,035 $ 998 $ 988 $ 971 $
1,328 1,296 1,261 1,195 1,127 1,086 1,019
985
978
1,370 1,375 1,305 1,246 1,218 1,127 1,061
1,033
1,374 1,342 1,269 1,290 1,218 1,157
1,093
1,392 1,416 1,414 1,394 1,341
1,288
1,466 1,499 1,495 1,474
1,382
1,602 1,650 1,659
1,580
1,670 1,691
1,663
1,704
1,751
1,852
Incurred losses and ALAE $13,591
Cumulative Paid Losses and ALAE through December 31,

Accident
Year

2012
2013
2014
2015
2016
2017
2018
2019
2020
2021

2012*

$

2013*

15 $

2014*

2015*

2016*

93 $ 218 $ 377 $
15
90
219
21
106
23

2017*

2018*

2019*

2020*

2021

522 $ 642 $ 725 $ 789 $ 830 $
368
518
635
743
793
238
396
540
671
752
108
218
382
543
663
22
115
274
461
620
27
128
300
457
35
166
367
39
160
34

Paid losses and ALAE
Net unpaid losses and ALAE for 2012 – 2021 accident years
Net unpaid losses and ALAE for accident years before 2012
Net unpaid losses and ALAE*

Cumulative
Number of
IBNR and Case
Reported
Development
ClaimsLiabilities(in thousands)

Unaudited required supplemental information

K-94

848
821
788
719
712
582
543
314
148
36
5,511
8,080
426
$ 8,506

51
62
108
136
213
328
495
869
1,319
1,672

11

11
11
12
15
21
23
20
27
15

Notes to Consolidated Financial Statements (Continued)(16) Unpaid losses and loss adjustment expenses (Continued)
Workers’ Compensation and Other Casualty
We periodically evaluate ultimate loss and loss adjustment expense estimates for the workers’ compensation and othercasualty claims using a combination of commonly accepted actuarial methodologies such as the Bornhuetter-Ferguson andchain-ladder approaches using paid and incurred loss data. Paid and incurred loss data is segregated and analyzed by state dueto the different state regulatory frameworks that may impact certain factors, including the duration and amount of loss
payments. We also separately study the various components of liabilities, such as employee lost wages, medical expenses andthe costs of claims investigations and administration. We establish case liabilities for reported claims based upon the facts
and circumstances of the claim. The excess of the ultimate projected losses, including the expected development of caseestimates, and the case-basis liabilities is included in IBNR liabilities.
Incurred Losses and ALAE through December 31,
Accident
Year

2012*

2013*

2014*

2015*

2016*

2017*

2018*

2019*

2020*

2021

Cumulative
Number of
IBNR and Case
Reported
Development
ClaimsLiabilities(in thousands)

2012 $ 873 $ 850 $ 837 $ 791 $ 780 $ 762 $ 750 $ 736 $ 718 $ 709 $2013
1,258 1,228 1,178 1,127 1,096 1,072 1,050 1,028
1,008
2014
1,743 1,638 1,614 1,548 1,482 1,497 1,477
1,460
2015
2,169 2,127 2,042 2,014 2,025 1,997
2,006
2016
2,511 2,422 2,359 2,325 2,365
2,370
2017
3,044 2,907 2,842 2,843
2,852
2018
3,544 3,412 3,480
3,536
2019
4,074 4,102
4,175
2020
4,421
4,278
2021
5,197
Incurred losses and ALAE $27,591

39
96
163
242
396
503
908
1,278
2,089
3,545

53

67
90
111
115
139
160
173
141
218

Cumulative Paid Losses and ALAE through December 31,
Accident
Year

2012*

2013*

2014*

2015*

2012 $ 116 $ 299 $ 414 $
2013
177
422
2014
239
2015
2016
2017
2018
2019
2020
2021

2016*

2017*

2018*

2019*

2020*

2021

560 $ 592 $ 611 $ 626 $ 634 $ 640
725
793
835
858
874
884
800 1,007 1,111 1,176 1,214
1,245
700 1,017 1,289 1,488 1,570
1,648
329
775 1,148 1,461 1,661
1,778
441 1,003 1,434 1,771
1,956
538 1,198 1,683
2,028
682 1,478
2,022
695
1,391
833
Paid losses and ALAE 14,425
Net unpaid losses and ALAE for 2012 – 2021 accident years 13,166
Net unpaid losses and ALAE for accident years before 2012413
Net unpaid losses and ALAE $13,579

*

501 $
609
557
289

Unaudited required supplemental information

BHRG
We use a variety of methodologies to establish BHRG’s estimates for property and casualty claims liabilities. Thesemethodologies include paid and incurred loss development techniques, incurred and paid loss Bornhuetter-Ferguson
techniques and frequency and severity techniques, as well as ground-up techniques when appropriate.
Our claims liabilities are principally a function of reported losses from ceding companies, case development and IBNR
liability estimates. Case loss estimates are reported under our contracts either individually or in bulk as provided under theterms of the contracts. We may independently evaluate case losses reported by the ceding company, and if deemed
appropriate, we may establish case liabilities based on our estimates.
K-95

Notes to Consolidated Financial Statements (Continued)(16) Unpaid losses and loss adjustment expenses (Continued)
Estimated IBNR liabilities are affected by expected case loss emergence patterns and expected loss ratios, which areevaluated as groups of contracts with similar exposures or on a contract-by-contract basis. Estimated case and IBNR
liabilities for major catastrophe events are generally based on a per-contract assessment of the ultimate cost associated with
the individual loss event. Claim count data is not provided consistently by ceding companies under our contracts or isotherwise considered unreliable.
Net incurred and paid losses and ALAE of BHRG are disaggregated based on losses that are expected to have shorter
claim-tails (property) and losses expected to have longer claim-tails (casualty). Under certain contracts, the coverage canapply to multiple lines of business written by the ceding company, whether property, casualty or combined, and the cedingcompany may not report loss data by such lines consistently, if at all. In those instances, we allocated losses to property andcasualty coverages based on internal estimates. BHRG’s disaggregated incurred and paid losses and ALAE are summarized
by accident year. IBNR and case development liabilities are as of December 31, 2021. Dollars are in millions.
Property
Incurred Losses and ALAE through December 31,
Accident
Year

2012
2013
2014
2015
2016
2017
2018
2019
2020
2021

2012*

2013*

2014*

2015*

2016*

2017*

2018*

2019*

2020*

2021

$ 3,129 $ 2,822 $ 2,621 $ 2,382 $ 2,330 $ 2,327 $ 2,309 $ 2,294 $ 2,285 $ 2,305 $
3,198
3,035
2,690
2,600
2,579
2,520
2,469
2,455
2,453
2,619
2,408
2,297
2,154
2,100
2,028
1,999
1,996
3,256
3,103
2,546
2,950
2,948
2,971
2,975
3,261
3,890
3,616
3,585
3,589
3,578
5,253
4,953
4,806
4,698
4,631
4,375
4,467
4,344
4,227
4,065
4,234
3,992
5,795
6,048
6,669
Incurred losses and ALAE $38,874
Cumulative Paid Losses and ALAE through December 31,

Accident
Year

2012
2013
2014
2015
2016
2017
2018
2019
2020
2021

*

IBNR and Case
Development
Liabilities

2012*

$

2013*

2014*

2015*

2016*

2017*

2018*

2019*

2020*

2021

259 $ 1,218 $ 1,796 $ 1,934 $ 2,022 $ 2,097 $ 2,117 $ 2,162 $ 2,180 $ 2,201
515
1,424
1,863
2,060
2,180
2,260
2,300
2,328
2,352
465
1,234
1,555
1,693
1,758
1,808
1,838
1,860
577
1,596
1,946
2,141
2,245
2,427
2,510
705
1,794
2,186
2,647
2,899
3,083
1,025
2,712
3,633
3,944
4,163
907
2,310
2,831
3,061
748
2,247
2,830
956
2,882
1,214
Paid losses and ALAE 26,156
Net unpaid losses and ALAE for 2012 – 2021 accident years 12,718
Net unpaid losses and ALAE for accident years before 2012401
Net unpaid losses and ALAE $13,119

Unaudited required supplemental information

K-96

31
29
33
154
112
141
461
541
1,504
3,405

Notes to Consolidated Financial Statements (Continued)(16) Unpaid losses and loss adjustment expenses (Continued)
Casualty
Incurred Losses and ALAE through December 31,
Accident
Year

2012
2013
2014
2015
2016
2017
2018
2019
2020
2021

2012*

2013*

2014*

2015*

2016*

2017*

2018*

2019*

2020*

IBNR and Case
Development
Liabilities2021$ 2,792 $ 2,974 $ 2,808 $ 2,871 $ 2,799 $ 2,686 $ 2,619 $ 2,562 $ 2,556 $ 2,557 $
2,132
2,268
2,298
2,141
2,086
2,032
1,937
1,865
1,837
1,872
2,069
2,038
2,001
1,915
1,952
1,942
1,847
1,877
2,082
2,109
2,008
1,882
1,844
1,817
1,906
2,115
2,023
1,980
1,900
1,843
2,193
2,685
2,563
2,470
2,383
2,924
3,559
3,482
3,340
3,429
3,901
3,780
3,861
3,987
3,744
Incurred losses and ALAE $27,135

372
331
431
395
451
582
904
1,521
2,147
2,584

Cumulative Paid Losses and ALAE through December 31,
Accident
Year

2012
2013
2014
2015
2016
2017
2018
2019
2020
2021

*

2012*

$

2013*

308 $

2014*

2015*

2016*

2017*

2018*

2019*

2020*

2021

747 $ 1,139 $ 1,368 $ 1,525 $ 1,650 $ 1,750 $ 1,810 $ 1,868 $ 1,906
290
519
805
933
1,037
1,139
1,199
1,256
1,290
149
477
642
752
874
959
1,103
1,147
196
489
713
833
924
1,014
1,088
253
555
732
862
960
1,043
230
564
819
1,269
1,376
265
867
1,639
1,909
353
896
1,176
404
970
307
Paid losses and ALAE 12,212
Net unpaid losses and ALAE for 2012 – 2021 accident years 14,923
Net unpaid losses and ALAE for accident years before 2012
8,688
Net unpaid losses and ALAE $23,611

Unaudited required supplemental information

Required supplemental unaudited average historical claims duration information based on the net losses and ALAE
incurred and paid accident year data in the preceding tables follows. The percentages show the average portions of net losses
and ALAE paid by each succeeding year, with year 1 representing the current accident year.
Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance
In Year

1

2

GEICO Physical Damage
GEICO Auto Liability
BH Primary Medical Professional Liability
BH Primary Workers’ Compensation and Other Casualty
BHRG Property
BHRG Casualty

97%
41%
2%
16%
19%
11%

3%
30%
8%
21%
36%
16%

K-97

3

4

5

6

13% 8% 4%
12% 14% 13% 11%
16% 12% 8% 4%
16% 8% 5% 4%
13% 9% 6% 5%

7

8

9

10

8%
3%
2%
5%

5%
2%
1%
3%

4%
1%
1%
2%

2%
1%
1%
2%

Notes to Consolidated Financial Statements (Continued)(17) Retroactive reinsurance contracts
Retroactive reinsurance policies provide indemnification of losses and loss adjustment expenses of short-duration
insurance contracts with respect to underlying loss events that occurred prior to the contract inception date. Claims payments
may commence immediately after the contract date or, when applicable, after a contractual retention amount has beenreached. Reconciliations of the changes in estimated liabilities for retroactive reinsurance unpaid losses and loss adjustment
expenses (“claim liabilities”) and related deferred charge reinsurance assumed assets for each of the three years ended
December 31, 2021 follow (in millions).
2021
2020
2019
Unpaid losses Deferred Unpaid losses Deferred Unpaid losses Deferredand losscharges and loss
charges and loss
charges adjustment
retroactive
adjustment
retroactive
adjustment
retroactive
expenses
reinsurance
expenses
reinsurance
expenses
reinsurance

Balances at beginning of year$
Incurred losses and loss adjustment expenses:
Current year contracts
Prior years’ contracts
Total
Paid losses and loss adjustment expenses
Balances at December 31$
Incurred losses and loss adjustment expenses, netof deferred charges$

40,966 $ (12,441) $42,441 $ (13,747) $41,834 $ (14,104)

153
(17)
(974)
1,819
(821)
1,802
(1,889)—38,256 $ (10,639) $

—
—
(399)
1,306
(399)
1,306
(1,076)—40,966 $ (12,441) $

1,138
(453)
378
810
1,516
357
(909)
—
42,441 $ (13,747)

981

$

907

$

1,873

In the preceding table, classifications of incurred losses and loss adjustment expenses are based on the inception datesof the contracts, which reflect when our exposures to losses began. We do not believe that analysis of losses incurred andpaid by accident year of the underlying event is relevant or meaningful given that our exposure to losses incepts when thecontract incepts. Further, we believe the classifications of reported claims and case development liabilities have little or nopractical analytical value.
Currently, our largest retroactive reinsurance contract is between our subsidiary, National Indemnity Company, andcertain subsidiaries of American International Group, Inc. (collectively, “AIG”). Our estimated unpaid claim liabilities withregard to the AIG contract were approximately $15.8 billion at December 31, 2021 and $17.7 billion at December 31, 2020.
Claim payments under this contract commenced in 2021 and were $1.2 billion during 2021. Deferred charges related to the
AIG contract were approximately $4.5 billion at December 31, 2021 and $5.4 billion at December 31, 2020.
Incurred losses and loss adjustment expenses related to contracts written in prior years were $845 million in 2021,$907 million in 2020 and $1,188 million in 2019, which included recurring amortization of deferred charges and the effect ofchanges in the timing and amount of expected future loss payments.
In establishing retroactive reinsurance claim liabilities, we analyze historical aggregate loss payment patterns andproject losses into the future under various probability-weighted scenarios. We expect the claim-tail to be very long for many
contracts, with some lasting several decades. We monitor claim payment activity and review ceding company reports andother information concerning the underlying losses. We reassess and revise the expected timing and amounts of ultimate
losses periodically or when significant events are revealed through our monitoring and review processes.
Estimated claim liabilities for retroactive reinsurance included estimates for environmental, asbestos and other latent
injury exposures of approximately $12.3 billion at December 31, 2021 and $12.5 billion at December 31, 2020. Retroactive
reinsurance contracts are generally subject to aggregate policy limits and thus, our exposure to such claims under thesecontracts is likewise limited. We monitor evolving case law and its effect on environmental and other latent injury claims.
Changing laws or government regulations, newly identified toxins, newly reported claims, new theories of liability, newcontract interpretations and other factors could result in increases in these liabilities, which could be material to our results ofoperations. We are unable to reliably estimate the amount of additional net loss or the range of net loss that is reasonably
possible.

K-98

Notes to Consolidated Financial Statements (Continued)(18) Notes payable and other borrowings
Notes payable and other borrowings are summarized below (in millions). The weighted average interest rates andmaturity date ranges shown in the following tables are based on borrowings as of December 31, 2021.
Weighted
Average
Interest Rate

Insurance and other:Berkshire Hathaway Inc. (“Berkshire”):
U.S. Dollar denominated due 2022-2047
Euro denominated due 2023-2041
Japanese Yen denominated due 2023-2060
Berkshire Hathaway Finance Corporation (“BHFC”):
U.S. Dollar denominated due 2022-2051
Great Britain Pound denominated due 2039-2059
Other subsidiary borrowings due 2022-2045
Short-term subsidiary borrowings

December 31,
2021

2020

3.3% $
1.0%
0.6%

6,820
7,792
6,797

3.6%
2.5%
4.0%
2.9%

10,758
2,325
4,438
342
39,272

$

$

$

8,308
8,326
6,031
10,766
2,347
4,682
1,062
41,522

During 2021, Berkshire repaid €550 million and $1.5 billion of maturing senior notes and issued €600 million of 0.5%
senior notes due in 2041 and ¥160 billion (approximately $1.5 billion) of senior notes with maturity dates ranging from 2026
to 2041 and a weighted average interest rate of 0.5%. In January 2022, Berkshire repaid $600 million of maturing debt andissued ¥128.5 billion (approximately $1.1 billion) of senior notes with maturity dates ranging from 2027 to 2052 and aweighted average interest rate of 0.5%.
Borrowings of BHFC, a wholly owned finance subsidiary of Berkshire, consist of senior unsecured notes used to fundmanufactured housing loans originated or acquired and equipment held for lease of certain subsidiaries. BHFC borrowings
are fully and unconditionally guaranteed by Berkshire. In 2021, BHFC repaid $750 million of maturing senior notes andissued $750 million of 2.5% senior notes due in 2051.
The carrying values of Berkshire and BHFC non-U.S. Dollar denominated senior notes (€6.9 billion, £1.75 billion and¥785.5 billion par) reflect the applicable exchange rates as of the balance sheet dates. The effects of changes in foreign
currency exchange rates during the period are recorded in earnings as a component of selling, general and administrative
expenses. Changes in the exchange rates resulted in pre-tax gains of $1.3 billion in 2021, pre-tax losses of $1.0 billion in2020 and pre-tax gains of $192 million in 2019.
Berkshire also guarantees debt of other subsidiaries, aggregating approximately $3.8 billion at December 31, 2021.
Generally, Berkshire’s guarantee of a subsidiary’s debt obligation is an absolute, unconditional and irrevocable guarantee forthe full and prompt payment when due of all payment obligations.
Weighted
Average
Interest Rate

Railroad, utilities and energy:
Berkshire Hathaway Energy Company (“BHE”) and subsidiaries:
BHE senior unsecured debt due 2023-2051
Subsidiary and other debt due 2022-2064
Short-term borrowings
Burlington Northern Santa Fe (“BNSF”) and subsidiaries due 2022-2097

4.3% $
4.1%
1.4%
4.5%
$

December 31,
2021

13,003 $36,7592,009
23,21974,990 $2020

13,44736,4202,286
23,22075,373

BHE subsidiary debt represents amounts issued pursuant to separate financing agreements. Substantially all of theassets of certain BHE subsidiaries are, or may be, pledged or encumbered to support or otherwise secure debt. Theseborrowing arrangements generally contain various covenants, including covenants which pertain to leverage ratios, interest
coverage ratios and/or debt service coverage ratios. During 2021, BHE and its subsidiaries issued term debt of approximately$2.2 billion with maturity dates ranging from 2028 to 2052 and a weighted average interest rate of 3.2% and repaid $2.5
billion of term debt.

K-99

Notes to Consolidated Financial Statements (Continued)(18) Notes payable and other borrowings (Continued)
BNSF’s borrowings are primarily senior unsecured debentures. During 2021, BNSF issued $1.55 billion of term debt
with maturity dates in 2051 and 2052 and a weighted average interest rate of 3.1% and repaid debt of $1.54 billion. As of
December 31, 2021, BNSF, BHE and their subsidiaries were in compliance with all applicable debt covenants. Berkshire
does not guarantee any debt, borrowings or lines of credit of BNSF, BHE or their subsidiaries.
Our subsidiaries had unused lines of credit and commercial paper capacity to support short-term borrowing programs
and provide additional liquidity. Unused lines of credit were approximately $10.4 billion at December 31, 2021, which
included approximately $8.7 billion related to BHE and its subsidiaries.
Debt principal repayments expected during each of the next five years are as follows (in millions). Amounts in 2022
include short-term borrowings.
2022

Insurance and otherRailroad, utilities and energy

$
$

2023

1,933
4,206
6,139

$
$

5,879
4,832
10,711

2024

$
$

2,154
3,991
6,145

2025

$

2026

2,703
3,792
6,495

$

$

3,422
2,033
5,455

$

(19) Income taxes
The liabilities for income taxes reflected in our Consolidated Balance Sheets are as follows (in millions).
December 31,
2021

Currently payable (receivable)
Deferred
Other

$

$

2020

(482) $
89,6791,046
90,243 $(276)
73,261
1,113
74,098The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax
liabilities are shown below (in millions).
December 31,
2021

Deferred tax liabilities:
Investments – unrealized appreciation
Deferred charges reinsurance assumed
Property, plant and equipment and equipment held for lease
Goodwill and other intangible assets
Other

$

55,4372,234
31,323
6,748
4,094
99,8362020$

40,181
2,613
30,2036,753
3,736
83,486(1,091)(990)(1,868)(1,349)(4,859)(10,157)
89,679 $(1,135)(900)(2,193)(1,421)(4,576)(10,225)
73,261

Deferred tax assets:
Unpaid losses and loss adjustment expenses
Unearned premiums
Accrued liabilities
Regulatory liabilities
Other
Net deferred tax liability$

We have not established deferred income taxes on accumulated undistributed earnings of certain foreign subsidiaries,
which are expected to be reinvested indefinitely. Repatriation of all accumulated earnings of foreign subsidiaries would be
impracticable to the extent that such earnings represent capital to support normal business operations. Generally, no U.S.
federal income taxes will be imposed on future distributions of foreign earnings under current law. However, distributions to
the U.S. or other foreign jurisdictions could be subject to withholding and other local taxes.

K-100Notes to Consolidated Financial Statements (Continued)(19) Income taxes (Continued)
Income tax expense reflected in our Consolidated Statements of Earnings for each of the three years ending
December 31, 2021 was as follows (in millions).
2021

FederalState
Foreign$$
Current
Deferred

$
$

2020

2019

20,345 $
(527)
1,061
20,879 $10,596
1,086
758
12,440$5,326
15,553
20,8795,052
7,388
12,440$$$19,069625
1,210
20,904$

5,818
15,086
20,904$

Income tax expense is reconciled to hypothetical amounts computed at the U.S. federal statutory rate for each of thethree years ending December 31, 2021 in the table below (in millions).
2021

2020

2019

Earnings before income taxes$

111,686$

55,693$

102,696

Hypothetical income tax expense computed at the U.S. federal statutory rate
Dividends received deduction and tax-exempt interest
State income taxes, less U.S. federal income tax benefit
U.S. income tax credits
Goodwill impairments
Other differences, net$

23,454(457)(417)(1,860)—159
20,879$

11,696(448)
858(1,519)1,977(124)
12,440$21,566
(433)
494
(942)
20
199
20,904$
Effective income tax rate

18.7%

$

22.3%

$

20.4%

We file income tax returns in the United States and in state, local and foreign jurisdictions. We have settled income tax
liabilities with the U.S. federal taxing authority (“IRS”) for tax years through 2011. The U.S. federal income tax returns from2012 through 2019 remain open, and tax years 2014 through 2019 are under audit. We are also under audit or subject to audit
with respect to income taxes in many state and foreign jurisdictions. It is reasonably possible that certain of these income tax
examinations will be settled in 2022. We currently do not believe that the outcome of unresolved issues or claims will bematerial to our Consolidated Financial Statements.
At December 31, 2021 and 2020, net unrecognized tax benefits were $1,046 million and $1,113 million, respectively.
Included in the balance at December 31, 2021, were $878 million of tax positions that, if recognized, would impact theeffective tax rate. The remaining balance in net unrecognized tax benefits principally relates to tax positions where theultimate recognition is highly certain but there is uncertainty about the timing of recognition. Because of the impact ofdeferred income tax accounting, these positions, when recognized, would not affect the annual effective income tax rate.
Other differences, net included expense of $60 million in 2020 and $377 million in 2019 for uncertain tax positions related toinvestments by a subsidiary in certain tax equity investment funds that generated income tax benefits from 2015 through2018. We concluded it was more likely than not those income tax benefits are not valid. We do not expect any material
increases to the estimated amount of unrecognized tax benefits during 2022.

K-101

Notes to Consolidated Financial Statements (Continued)(20) Fair value measurements
Our financial assets and liabilities are summarized below as of December 31, 2021 and December 31, 2020, with fairvalues 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 estimatesof their fair values.

Carrying
Value

December 31, 2021
Investments in fixed maturity securities:
U.S. Treasury, U.S. government corporations andagencies
Foreign governments
Corporate bonds
Other
Investments in equity securities
Investment in Kraft Heinz common stock
Loans and finance receivables
Derivative contract assets (1)Derivative contract liabilities:
Railroad, utilities and energy (1)Equity index put options (1)Notes payable and other borrowings:
Insurance and otherRailroad, utilities and energy
December 31, 2020
Investments in fixed maturity securities:
U.S. Treasury, U.S. government corporations andagencies
Foreign governments
Corporate bonds
Other
Investments in equity securities
Investment in Kraft Heinz common stock
Loans and finance receivables
Derivative contract assets (1)Derivative contract liabilities:
Railroad, utilities and energy (1)Equity index put options (1)Notes payable and other borrowings:
Insurance and otherRailroad, utilities and energy
(1)

$

$

3,303
10,994
1,774
363
350,719
13,112
20,751
329

QuotedPrices(Level 1)

Fair Value

$

3,303
10,994
1,774
363
350,719
11,683
22,174
329

$

3,261
10,286——339,225
11,683—
6

Significant
Other
Observable
Inputs(Level 2)

Significant
Unobservable
Inputs(Level 3)

$

$

42
708
1,774
363
8
—
2,178
230

—
—
—
—
11,486—19,996
93

277
99

277
99

2
—

51
—

224
99

39,272
74,99042,33987,065——42,29287,06547—

3,403
11,3385,191
478
281,170
13,336
19,201
270

$

3,403
11,3385,191
478
281,170
11,28020,554
270

$

3,358
9,259
—
—
271,848
11,280
—
1

$

45
2,079
5,191
478
38
—
2,692
72

$

—
—
—
—
9,284
—
17,862
197

121
1,065

121
1,065

6
—

96
—

19
1,065

41,52275,373

46,676
92,593——

46,66592,593

11—

Assets are included in other assets and liabilities are included in accounts payable, accruals and other liabilities.

K-102

Notes to Consolidated Financial Statements (Continued)(20) Fair value measurements (Continued)
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 by correlation or othermeans. 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 isrequired to use its own assumptions regarding unobservable inputs because there is little, if any, market activity in theassets 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 assets and liabilities measured and carried at fair value on a recurring basis with the use ofsignificant unobservable inputs (Level 3) for each of the three years ending December 31, 2021 follow (in millions).
Balance at
beginningof yearInvestments in equity securities:
2021
2020
2019
Equity index put option contract liabilities:
2021
2020
2019

Gains (losses)
included inearnings

Acquisitions,dispositions
andsettlements

Transfers outof Level 3

Balance at
December 31,

$

8,978
10,4051$

1,902 $
(1,426)
404

1,100
—
10,000$(500) $
(1)—

11,4808,97810,405$(1,065) $(968)(2,452)

966 $
(159)
1,484

—
62
—

$

99
—
—

—
(1,065)(968)$

We acquired investments in Occidental Cumulative Perpetual Preferred Stock (“Occidental Preferred”) and Occidental
common stock warrants in August 2019 at an aggregate cost of $10 billion. We currently consider the related fair value
measurements to contain Level 3 inputs. See Note 4 for information regarding these investments.
Quantitative information as of December 31, 2021 for assets and liabilities measured and carried at fair value on arecurring basis with the use of significant unobservable inputs (Level 3) follows (in millions).

Investments in equity securities:
Preferred stock

Common stock warrants

Fair
Value

Principal
Valuation
Techniques$ 10,864

Discounted cash flow

616

Warrant pricing model

K-103

Unobservable
Inputs

Weighted
Average

Expected duration
Discount for transferability
restrictions and subordination

7 years

Expected duration
Volatility

7 years
37%

372 bps

Notes to Consolidated Financial Statements (Continued)(20) Fair value measurements (Continued)
Investments in equity securities in the preceding table include our investments in certain preferred and common stock
warrants that do not have readily determinable market values as defined under GAAP. These investments are subject tocontractual restrictions on transferability and contain provisions that currently prevent us from economically hedging ourinvestments. 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 subordination in liquidation. In valuing the common stock
warrants, we used a warrant valuation model. While most of the inputs to the model are observable, we made assumptions
regarding the expected duration and volatility of the warrants.
(21) Common stock
Changes in Berkshire’s issued, treasury and outstanding common stock during the three years ending December 31,
2021 are shown in the table below. In addition to our common stock, 1,000,000 shares of preferred stock are authorized, but
none are issued.
Class A, $5 Par Value(1,650,000 shares authorized)
IssuedTreasury Outstanding

Balance December 31, 2018
Conversions of Class A common stock toClass B common stock and exercises of
replacement stock options
Treasury stock acquired
Balance December 31, 2019
Conversions of Class A common stock toClass B common stock
Treasury stock acquired
Balance December 31, 2020
Conversions of Class A common stock toClass B common stock
Treasury stock acquired
Balance December 31, 2021

742,213Class B, $0.0033 Par Value(3,225,000,000 shares authorized)
IssuedTreasury
Outstanding(12,897)

729,316 1,373,558,983(6,138,909) 1,367,420,074(22,906)——(4,440)719,307 (17,337)(22,906)
34,624,869(4,440)—701,970 1,408,183,852—
34,624,869(17,563,410) (17,563,410)(23,702,319) 1,384,481,533(40,784)—— (17,255)
678,523 (34,592)(40,784)
61,176,000—
61,176,000(17,255)— (95,614,062) (95,614,062)
643,931 1,469,359,852 (119,316,381) 1,350,043,471(12,622)—— (14,196)
665,901 (48,788)(12,622)
18,933,000—
18,933,000(14,196)— (78,501,968) (78,501,968)
617,113 1,488,292,852 (197,818,349) 1,290,474,503

Each Class A common share is entitled to one vote per share. Class B common stock possesses dividend anddistribution rights equal to one-fifteen-hundredth (1/1,500) of such rights of Class A common stock. Each Class B commonshare possesses voting rights equal to one-ten-thousandth (1/10,000) of the voting rights of a Class A share. Unless otherwise
required under Delaware General Corporation Law, Class A and Class B common shares vote as a single class. Each share ofClass A common stock is convertible, at the option of the holder, into 1,500 shares of Class B common stock. Class B
common stock is not convertible into Class A common stock. On an equivalent Class A common stock basis, there were1,477,429 shares outstanding as of December 31, 2021 and 1,543,960 shares outstanding as of December 31, 2020.
Since we have two classes of common stock, we provide earnings per share data on the Consolidated Statements ofEarnings for average equivalent Class A shares outstanding and average equivalent Class B shares outstanding. Class B
shares are economically equivalent to one-fifteen-hundredth (1/1,500) of a Class A share. 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 1,500 times
average Class A shares outstanding.
Berkshire’s common stock repurchase program, as amended, permits Berkshire to repurchase shares any time that
Warren Buffett, Berkshire’s Chairman of the Board and Chief Executive Officer, and Charlie Munger, Vice Chairman of theBoard, believe that the repurchase price is below Berkshire’s intrinsic value, conservatively determined. The program
continues to allow share repurchases in the open market or through privately negotiated transactions and does not specify amaximum number of shares to be repurchased. However, repurchases will not be made if they would reduce the total value ofBerkshire’s consolidated cash, cash equivalents and U.S. Treasury Bill holdings below $30 billion. The repurchase program
does not 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 program.

K-104

Notes to Consolidated Financial Statements (Continued)(22) Revenues from contracts with customers
We recognize revenue when a good or service is transferred to a customer. A good or service is transferred when or as
the customer obtains control of that good or service. Revenues are based on the consideration we expect to receive inconnection with our promises to deliver goods and services to our customers. The following tables summarize customer
contract revenues disaggregated by reportable segment and the source of the revenue for each of the three years ended
December 31, 2021 (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.

2021

Manufactured products:
Industrial and commercial products
Building products
Consumer products
Grocery and convenience store distribution
Food and beverage distribution
Auto sales
Other retail and wholesale distribution
ServiceElectricity and natural gas
Total
Other revenues

Manufacturing$$

McLaneService andretailing

BNSFBerkshire Insurance,
Hathaway Corporate
Energyand other

Total

22,184 $
— $
159 $
— $
— $
— $ 22,343
19,604—————
19,604
18,540—————18,540— 31,245————
31,245— 17,332————
17,332
—
—
9,966
—
—
—
9,966
2,997
—
15,898———18,895
1,486
751
4,123 23,120
5,583—
35,063————
18,264—
18,26464,811 49,328
30,146 23,120
23,847— 191,252
3,766
122
4,601
57
1,096
75,20084,842
68,577 $ 49,450 $ 34,747 $ 23,177 $ 24,943 $ 75,200 $276,094

2020

Manufactured products:
Industrial and commercial products
Building products
Consumer products
Grocery and convenience store distribution
Food and beverage distribution
Auto sales
Other retail and wholesale distribution
ServiceElectricity and natural gas
Total
Other revenues$ 20,772 $
— $
192 $
— $
— $
— $ 20,964
15,943—————
15,943
14,757—————
14,757—30,795————30,795—
15,368————15,368
—
—
8,258
—
—
—
8,258
2,452
—
12,470———14,922
1,456
584
3,332
20,693
4,595—
30,660————15,066—
15,06655,38046,747
24,252
20,693
19,661—
166,733
3,598
93
3,859
57
1,353
69,817
78,777$ 58,978 $ 46,840 $ 28,111 $ 20,750 $ 21,014 $ 69,817 $245,510

2019

Manufactured products:
Industrial and commercial products
Building products
Consumer products
Grocery and convenience store distribution
Food and beverage distribution
Auto sales
Other retail and wholesale distribution
ServiceElectricity and natural gas
Total
Other revenues$ 25,311 $
— $
184 $
— $
— $
— $ 25,495
15,620—————15,62014,120—————14,120—33,057————33,057—
16,767————
16,767
—
—
8,481
—
—
—
8,481
2,299
—
12,213———
14,512
1,642
539
4,062
23,302
4,096—
33,641————
14,819—14,81958,99250,36324,94023,302
18,915—
176,512
3,632
95
4,459
55
1,181
68,682
78,104$ 62,624 $ 50,458 $ 29,399 $ 23,357 $ 20,096 $ 68,682 $254,616

K-105

Notes to Consolidated Financial Statements (Continued)(22) Revenues from contracts with customers (Continued)
A summary of the transaction price allocated to the significant unsatisfied remaining performance obligations relating
to contracts with expected durations in excess of one year as of December 31, 2021 and the timing of when the performanceobligations are expected to be satisfied follows (in millions).
Less than
12 months

Electricity and natural gas
Other sales and service contracts$

Greater than
12 months

2,607
1,411

$

21,038
2,236

Total

$

23,645
3,647(23) Pension plans
Certain of our subsidiaries sponsor defined benefit pension plans. Benefits under the plans are generally based on yearsof service and compensation or fixed benefit rates. Plan sponsors may make contributions to the plans to meet regulatory
requirements and may also make discretionary contributions. The components of our net periodic pension expense ffor each of
the three years ending December 31, 2021 follow (in millions).
2021

Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial losses and other
Net periodic pension expense

$

$

2020

257 $
410
(1,008)203(138) $

235 $
510
(955)
171
(39) $

2019

224
618
(936)
26
(68)

The projected benefit obligation (“PBO”) is the actuarial present value of benefits earned based upon service andcompensation prior to the valuation date and, if applicable, includes assumptions regarding future compensation levels.
Benefit obligations under qualified U.S. defined benefit pension plans are funded through assets held in trusts. Pension
obligations under certain non-U.S. plans and non-qualified U.S. plans are unfunded and the aggregate PBOs of such plans
were $1.4 billion and $1.6 billion as of December 31, 2021 and 2020, respectively. The cost of certain BHE pension plans are
expected to be recoverable through the regulated rate making process.
The funded status at year end 2021 and 2020 and reconciliations of the changes in PBOs and plan assets related to
BHE’s pension plans and all other pension plans for each of the two years ending December 31, 2021 follow (in millions).
2021
Other

Total

5,282 $
46
109
(214)
(185)
(258)
4,780 $

15,147 $
211
301
(795)
(22)
(830)
14,012 $20,429 $257
410(1,009)(207)(1,088)18,792 $5,158 $
41
(214)
382
(185)
(24)
5,158 $
(378) $

12,780 $
124
(795)
1,401
(22)
(26)
13,462 $550 $17,938 $165(1,009)
1,783
(207)
(50)
18,620 $
172 $

BHE

Benefit obligations
PBO beginning of year
Service cost
Interest cost
Benefits paid
Settlements
Actuarial (gains) losses and other
PBO end of year
Plan assets
Plan assets beginning of year
Employer contributions
Benefits paid
Actual return on plan assets
Settlements
Other
Plan assets end of year
Funded status – net (asset) liability

$

$
$

$
$

K-106

2020
Other

Total

4,898 $
33
133
(285)
(63)
566
5,282 $

13,808 $
202
377
(709)
(12)
1,481
15,147 $

18,706
235
510
(994)
(75)
2,047
20,4294,808 $
69
(285)
554
(63)
75
5,158 $
124 $

11,688 $
127
(709)
1,820
(12)
(134)
12,780 $2,367 $

16,496
196
(994)
2,374
(75)
(59)
17,9382,491

BHENotes to Consolidated Financial Statements (Continued)(23) Pension plans (Continued)
The funded status reflected in assets was $1,954 million and in liabilities was $2,126 million at December 31, 2021.
The funded status included in assets was $1,351 million and in liabilities was $3,842 million at December 31, 2020.
The accumulated benefit obligation (“ABO”) is the actuarial present value of benefits earned based on service andcompensation prior to the valuation date. The ABO was $17.9 billion at December 31, 2021 and $19.4 billion at December
31, 2020. Information for plans with PBOs and ABOs in excess of plan assets as of December 31, 2021 and 2020 follows (inmillions).
2021

PBOs
Plan assets$

ABOs
Plan assets

2020

9,643 $
7,518

12,775
9,018

9,111
7,429

10,875
7,820

Weighted average assumptions used in determining PBOs and net periodic pension expense follow.
2021

Discount rate applicable to PBOs
Expected long-term rate of return on plan assets
Rate of compensation increase
Discount rate applicable to net periodic pension expense

2020

2.7%
6.1
2.6
2.4

2019

2.3%
6.2
2.6
3.1

3.1%
6.4
2.5
4.0

Pension benefit payments expected over the next ten years are as follows (in millions): in 2022 – $1,048; in 2023 –$1,006; in 2024 – $1,007; in 2025 – $1,013; in 2026 – $1,014; and in 2027 to 2031 – $4,948. Sponsoring subsidiaries expect
to contribute $149 million to the plans in 2022.
Fair value measurements of plan assets as of December 31, 2021 and 2020 follow (in millions).

Fair Value
Total

December 31, 2021
Cash and cash equivalents
Equity securities
Fixed maturity securities
Investment funds and other$$December 31, 2020
Cash and cash equivalents
Equity securities
Fixed maturity securities
Investment funds and other$$

Level 1

992
11,3433,422
2,863
18,620$383
11,383
3,173
2,999
17,938$$$

Level 2901
10,3582,226
180
13,665$

243
10,123
2,214
198
12,778$$$

Level 3

91
660
1,168
361
2,280

$

140
851
926
398
2,315

$

$

$

Investment
funds andpartnerships
at net asset
value

—
325
28
57
410

$

—
409
33
56
498

$

$

$

—
—
—
2,265
2,265
—
—
—
2,347
2,347

See Note 20 for a discussion of the three levels of fair value measurements. Plan assets are generally invested with thelong-term objective of producing earnings to adequately cover expected benefit obligations, while assuming a prudent levelof risk. Allocations may change due to changing market conditions and investment opportunities. The expected rates ofreturn on plan assets reflect subjective assessments of expected long-term investment returns. Generally, past investment
returns are not given significant consideration when establishing assumptions for expected long-term rates of return on plan
assets. Actual experience will differ from the assumed rates of return.

K-107

Notes to Consolidated Financial Statements (Continued)(23) Pension plans (Continued)
A reconciliation of the pre-tax accumulated other comprehensive income (loss) related to defined benefit pension plansfor each of the two years ending December 31, 2021 follows (in millions).
2021

Balance beginning of year
Amount included in net periodic pension expense
Actuarial gains (losses) and other
Balance end of year

$

$

2020

(2,251)
170
1,596
(485)

$

(1,896)141(496)(2,251)$

Several of our subsidiaries also sponsor defined contribution retirement plans, such as 401(k) or profit-sharing plans.
Employee contributions are subject to regulatory limitations and the specific plan provisions. Several plans provide for
employer matching contributions up to levels specified in the plans and provide for additional discretionary contributions as
determined by management. Our defined contribution plan expense was approximately $1.0 billion in 2021, $1.4 billion in2020 and $1.2 billion in 2019.
(24) Accumulated other comprehensive income
A summary of the net changes in after-tax accumulated other comprehensive income attributable to Berkshire
Hathaway shareholders for each of the three years ending December 31, 2021 follows (in millions).
Unrealized
appreciation of
fixed maturity
securities, net

Balance December 31, 2018
Other comprehensive income
Reclassifications into net earnings
Balance December 31, 2019
Other comprehensive income
Reclassifications into net earnings
Balance December 31, 2020
Other comprehensive income
Reclassifications into net earnings
Balance December 31, 2021$$

Foreigncurrencytranslation

370 $
160
(49)
481
78
(23)
536
(123)
(44)
369 $

K-108

Defined benefit
pension plans(4,603) $257—(4,346)
1,264—(3,082)(1,021)
11(4,092) $(816) $
(644)
91
(1,369)(385)
109(1,645)1,163
135(347) $

Other

Accumulated
othercomprehensive
income

34 $
(48)
5
(9)
(52)
9
(52)
80
15
43 $

(5,015)(275)
47(5,243)905
95(4,243)99
117(4,027)

Notes to Consolidated Financial Statements (Continued)(25) Business segment data
Our operating businesses include a large and diverse group of insurance, manufacturing, service and retailingbusinesses. We organize our reportable business segments in a manner that reflects how management views those businessactivities. Certain businesses are grouped together for segment reporting based upon similar products or product lines,
marketing, selling and distribution characteristics, even though those business units are operated under separate local
management.
The tabular information that follows shows data of reportable segments reconciled to amounts reflected in our
Consolidated Financial Statements. Intersegment transactions are not eliminated from segment results when management
considers those transactions in assessing the results of the respective segments. Furthermore, our management does notconsider investment and derivative gains/losses, impairments or amortization of certain business acquisition accounting
adjustments related to Berkshire’s business acquisitions or certain other corporate income and expense items in assessing thefinancial performance of operating units. Collectively, these items are included in reconciliations of segment amounts toconsolidated amounts.
Berkshire’s operating segments are as follows.
Business Identity

Business Activity

Insurance:
GEICO

Underwriting private passenger automobile insurance mainly by direct
response methods

Berkshire Hathaway Primary Group

Underwriting multiple lines of property and casualty insurance policies
for primarily commercial accounts

Berkshire Hathaway Reinsurance Group

Underwriting excess-of-loss, quota-share and facultative reinsurance
worldwide

Railroad (“BNSF”)

Operation of one of the largest railroad systems in North America
through Burlington Northern Santa Fe LLC

Utilities and energy (“BHE”)

Regulated electric and gas utility, including power generation anddistribution activities and real estate brokerage activities throughBerkshire Hathaway Energy Company and affiliates

Manufacturing

Manufacturers of numerous products including industrial, consumer andbuilding products, including home building and related financial
services

McLane Company (“McLane”)

Wholesale distribution of groceries and non-food items

Service and retailing

Providers of numerous services including shared aircraft ownershipprograms, aviation pilot training, electronic components distribution,
various retailing businesses, including automobile dealerships and trailer
and furniture leasing

K-109

Notes to Consolidated Financial Statements (Continued)(25) Business segment data (Continued)
A disaggregation of our consolidated data for each of the three most recent years is presented as follows (in millions).
Revenues
2020

2021

Operating Businesses
Insurance:
Underwriting:
GEICO$
Berkshire Hathaway Primary Group
Berkshire Hathaway Reinsurance Group
Insurance underwriting
Investment income
Total insurance
BNSF
BHE
Manufacturing
McLaneService and retailing
Reconciliation to consolidated amount
Investment and derivative gains (losses)
Interest expense, not allocated to segments
Equity method investments
Goodwill and intangible asset impairments
Corporate, eliminations and other

37,706
11,57520,197
69,478
5,662
75,14023,282
24,987
68,73049,45034,832
276,42135,093
9,615
18,693
63,401
5,960
69,361$35,572
9,165
16,341
61,078
6,615
67,693

20,86921,031
59,07946,84028,178245,358

23,515
20,11462,73050,45829,487
253,997

—
—
—
—
—
—
—
—
(327)
152
$ 276,094 $ 245,510

—
—
—
—
619
$ 254,616

2021

Operating Businesses
Insurance
BNSF
BHE
Manufacturing
McLaneService and retailing$$

Reconciliation to consolidated amount
Investment and derivative gains
Interest expense, not allocated to segments
Equity method investments
Corporate, eliminations and other
$

—
1,032
2,054
704
—
38
3,828

Interest expense
2020

$

—
455
—
(111)
4,172 $

—
1,037
1,941
737
—
61
3,776

$

$

—
1,070
1,835
752
—
86
3,743

1,259 $
607
(930)
936
5,649
6,585

3,428 $
110
(2,700)
838
5,949
6,787

1,506
383
(1,472)
417
6,600
7,017

7,861
3,184
9,841
230
4,481
32,182

6,792
2,479
8,010
251
2,628
26,947

7,250
2,618
9,522
288
2,555
29,25078,54240,746
72,607
(455)
(483)
(416)
995
726
1,176
—
(10,671)(96)
422(1,572)175$ 111,686 $ 55,693 $ 102,696

2019

—
483
—
(176)
4,083 $

K-110

Earnings before income taxes
2021
2020
2019

2019

2021

Income tax expense
2020

2019

$

1,050 $
1,871
(1,177)
2,193
61
1,086
5,084

1,089 $
1,631
(1,010)
1,795
71
669
4,245

1,166
1,769
(526)
2,253
71
603
5,336

—
416
—
(198)
3,961 $

16,025
(96)
106
(240)
20,879 $

8,855
(102)
57
(615)
12,440 $15,159(88)
148
349
20,904

Notes to Consolidated Financial Statements (Continued)(25) Business segment data (Continued)
2021

Operating Businesses
Insurance
BNSF
BHE
Manufacturing
McLaneService and retailing

$

62
2,910
6,611
2,100
106
1,487
$ 13,276
2021

Operating Businesses
Insurance
BNSF
BHE
Manufacturing
McLaneService and retailing

Capital expenditures
2020
2019

$

50
3,063
6,765
2,133
98
903
$ 13,012

$

108
3,608
7,364
2,981
158
1,760
$ 15,979

Depreciation of tangible assets
2021
2020
2019

$

$

Goodwill at year-end
2020
2019

$ 15,181
14,852
11,90625,463232
6,241$ 73,875$ 15,224
14,851
11,76325,512232
6,152$ 73,734$ 15,289
14,851
9,979
34,800734
6,229$ 81,882

Reconciliation to consolidated amountCorporate and other
Goodwill

72
2,406
3,584
2,037
189
1,177
9,465

$

$

74
2,423
3,376
2,026
204
1,216
9,319

$

$

82
2,350
2,947
1,951
225
1,192
8,747

Identifiable assets at year-end
2021
2020
2019

$ 482,813
76,586112,117
107,231
6,841
28,221
813,809$ 399,169
73,809109,286
104,318
6,771
26,173
719,526$ 364,550
73,69988,651
104,437
6,872
26,494
664,703

71,10073,875$ 958,784

80,46973,734$ 873,729

71,14481,882$ 817,729

Property/casualty and life/health insurance premiums written and earned are summarized below (in millions).
2021

Premiums Written:
DirectAssumed
Ceded
Premiums Earned:
DirectAssumed
Ceded

Property/Casualty
2020

2019

2021

Life/Health
2020

2019

$ 53,829 $ 47,838 $ 47,578 $
12,461
11,533
10,214(1,015)(898)(821)$ 65,275 $ 58,473 $ 56,971 $

649 $
5,685
(40)
6,294 $

510 $
5,960
(42)
6,428 $

839
5,046
(45)
5,840

$ 52,139 $ 46,418 $ 46,540 $
12,072
11,4499,643(1,054)(907)(851)$ 63,157 $ 56,960 $ 55,332 $

649 $
5,713
(41)
6,321 $

510 $
5,973
(42)
6,441 $

839
4,952
(45)
5,746

K-111

Notes to Consolidated Financial Statements (Continued)(25) Business segment data (Continued)
Insurance premiums written by geographic region (based upon the domicile of the insured or reinsured) aresummarized below (in millions).
2021

United States
Western Europe
Asia Pacific
All other$$

Property/Casualty
2020

55,451 $
4,613
3,822
1,389
65,275 $50,250 $
3,751
3,410
1,062
58,473 $2019

50,529 $
2,535
3,114
793
56,971 $2021

Life/Health2020

2,161 $
1,298
2,030
805
6,294 $

2,820 $
1,120
1,652
836
6,428 $

2019

2,553
908
1,582
797
5,840

Consolidated sales, service and leasing revenues were $151.0 billion in 2021, $132.3 billion in 2020 and $140.8 billion
in 2019. Sales, service and leasing revenues attributable to the United States were 85% in 2021, 86% in 2020 and 85% in2019 of such amounts. The remainder of sales, service and leasing revenues were primarily in Europe, Canada and the Asia
Pacific region. Railroad, utilities and energy revenues were $48.1 billion in 2021, $41.8 billion in 2020 and $43.5 billion in
2019. In each of the three years, approximately 96% of such revenues were attributable to the United States. At December 31,
2021, approximately 89% of our consolidated net property, plant and equipment and equipment held for lease was located in
the United States with the remainder primarily in Canada and the United Kingdom.
(26) 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 byBerkshire subsidiaries. Plaintiffs occasionally seek punitive or exemplary damages. We do not believe that such normal androutine litigation will have a material effect on our financial condition or results of operations. 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 believe that any liability that may arise as a result of other pending legal actions will not have amaterial effect on our consolidated financial condition or results of operations.
Our subsidiaries regularly make commitments in the ordinary course of business for the future purchase of goods andservices used in their businesses, which are not yet reflected in our Consolidated Financial Statements. The most significant
of our long-term commitments relate to our railroad, utilities and energy businesses and our shared aircraft ownership andleasing business. As of December 31, 2021, estimated future payments under those arrangements were as follows: $8 billion
in 2022, $4 billion in 2023, $3 billion in 2024, $2 billion in 2025, $2 billion in 2026 and $15 billion after 2026.
As indicated in Note 5, we have an agreement to acquire an additional 41.4% ownership interest in Pilot in 2023. Atthat time, Pilot will become a consolidated subsidiary. Additionally, we may be obligated to acquire certain noncontrollinginterests in less-than-wholly-owned subsidiaries in the future, pursuant to the terms of agreements with the noncontrollingshareholders. The timing and the amount of any future payments that might be required to such noncontrolling shareholders
are contingent on future actions of the noncontrolling owners and the value of the interest being acquired. If we had acquired
the additional interest in Pilot and all outstanding noncontrolling interests as of December 31, 2021, we estimate theaggregate cost of these acquisitions would approximate $11 billion.

K-112

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None
Item 9A. Controls and Procedures
At the end of the period covered by this Annual Report on Form 10-K, the Corporation carried out an evaluation, under
the supervision and with the participation of the Corporation’s management, including the Chairman (Chief Executive
Officer) and the Senior Vice President (Chief Financial Officer), of the effectiveness of the design and operation of the
Corporation’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, theChairman (Chief Executive Officer) and the Senior Vice President (Chief Financial Officer) concluded that the Corporation’s
disclosure controls and procedures are effective in timely alerting them to material information relating to the Corporation(including its consolidated subsidiaries) required to be included in the Corporation’s periodic SEC filings. The report called
for by Item 308(a) of Regulation S-K is incorporated herein by reference to Management’s Report on Internal Control Over
Financial Reporting, included on page K-66 of this report. The attestation report called for by Item 308(b) of Regulation S-K
is incorporated herein by reference to the Report of Independent Registered Public Accounting Firm, included on page K-67
of this report. There has been no change in the Corporation’s internal control over financial reporting during the quarter
ended December 31, 2021 that has materially affected, or is reasonably likely to materially affect, the Corporation’s internal
control over financial reporting.
Item 9B. Other Information
None
Part III
Except for the information set forth under the caption “Executive Officers of the Registrant” in Part I hereof,
information required by this Part (Items 10, 11, 12, 13 and 14) is incorporated by reference from the Registrant’s definitive
proxy statement, filed pursuant to Regulation 14A, for the Annual Meeting of Shareholders of the Registrant to be held on
April 30, 2022, which meeting will involve the election of directors.
Part IV
Item 15. Exhibits and Financial Statement Schedules(a)1. Financial Statements
The following Consolidated Financial Statements, as well as the Report of Independent Registered Public Accounting
Firm, are included in Part II Item 8 of this report:
PAGE

Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34)
Consolidated Balance Sheets—
December 31, 2021 and December 31, 2020
Consolidated Statements of Earnings—
Years Ended December 31, 2021, December 31, 2020, and December 31, 2019
Consolidated Statements of Comprehensive Income—Years Ended December 31, 2021, December 31, 2020, and December 31, 2019
Consolidated Statements of Changes in Shareholders’ Equity—
Years Ended December 31, 2021, December 31, 2020, and December 31, 2019
Consolidated Statements of Cash Flows—
Years Ended December 31, 2021, December 31, 2020, and December 31, 2019
Notes to Consolidated Financial Statements
2. Financial Statement Schedule
Report of Independent Registered Public Accounting Firm
Schedule I—Parent Company Condensed Financial Information
Balance Sheets as of December 31, 2021 and 2020, Statements of Earnings and Comprehensive Income
and Cash Flows for the years ended December 31, 2021, December 31, 2020 and December 31, 2019
and Note to Condensed Financial Information
Other schedules are omitted because they are not required, information therein is not applicable, or is reflected in
the Consolidated Financial Statements or notes thereto.
(b) Exhibits
See the “Exhibit Index” at page K-117.
K-113

K-67
K-70
K-72
K-73
K-73
K-74
K-75

K-114

K-115

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors ofBerkshire Hathaway Inc.
Omaha, Nebraska
Opinion on the Financial Statement Schedule
We have audited the consolidated financial statements of Berkshire Hathaway Inc. and subsidiaries (the “Company”) as ofDecember 31, 2021 and 2020, and for each of the three years in the period ended December 31, 2021, and the Company’s
internal control over financial reporting as of December 31, 2021, and have issued our report thereon dated February 26,
2022; such consolidated financial statements and report are included elsewhere in this Form 10-K. Our audits also included
the financial statement schedule of the Company listed in the Index at Item 15. This financial statement schedule is the
responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial
statement schedule based on our audits. In our opinion, such financial statement schedule, when considered in relation to thefinancial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
/s/ Deloitte & Touche LLP
Omaha, Nebraska
February 26, 2022

K-114

BERKSHIRE HATHAWAY INC. (Parent Company)
Condensed Financial Information(Dollars in millions)
Schedule I
Balance Sheets
December 31,
2021

Assets:Cash and cash equivalents
Short-term investments in U.S. Treasury Bills
Investments in and advances to/from consolidated subsidiaries
Investment in The Kraft Heinz Company
Other assets$$
Liabilities and Shareholders’ Equity:
Accounts payable, accrued interest and other liabilities
Income taxes, principally deferred
Notes payable and other borrowings$

Berkshire Hathaway shareholders’ equity$

2020

18,797
9,681
486,862
13,112
140
528,592$

237
747
21,40922,393506,199
528,592$$$

12,32929,773411,826
13,336108467,372
369
1,174
22,66524,208443,164
467,372

Statements of Earnings and Comprehensive Income
2021

Income items:
From consolidated subsidiaries:
Dividends and distributions
Undistributed earnings$

Investment gains (losses)
Equity in net earnings of The Kraft Heinz Company
Other income
Cost and expense items:
General and administrative
Interest expense
Foreign exchange (gains) losses on non-U.S. Dollar denominated debt
Income tax expense (benefit)
Net earnings attributable to Berkshire Hathaway shareholders
Other comprehensive income attributable to Berkshire Hathaway shareholders
Comprehensive income attributable to Berkshire Hathaway shareholders$

See Note to Condensed Financial Information

K-115

Year ended December 31,
2020

13,46274,81988,28135
269
73
88,6582019$

26,110 $17,40243,512(24)
95
328
43,911

15,603
65,23780,840
(125)
493
780
81,988136444(1,281)(436)(1,137)
89,795216
90,011 $

194
489
970
(263)
1,390
42,521
1,000
43,521 $

122
591
(193)
51
571
81,417(228)
81,189BERKSHIRE HATHAWAY INC. (Parent Company)
Condensed Financial Information(Dollars in millions)
Schedule I (continued)
Statements of Cash Flows
2021

Cash flows from operating activities:
Net earnings attributable to Berkshire Hathaway shareholders
Adjustments to reconcile net earnings to cash flows from operating activities:
Investment gains/losses
Undistributed earnings of consolidated subsidiaries
Non-cash dividends from subsidiaries
Income taxes payable
Other
Net cash flows from operating activities
Cash flows from investing activities:
Investments in and advances to/from consolidated subsidiaries, net
Purchases of U.S. Treasury Bills
Sales and maturities of U.S. Treasury Bills
Other
Net cash flows from investing activities
Cash flows from financing activities:
Proceeds from borrowings
Repayments of borrowings
Acquisition of treasury stock
Other
Net cash flows from financing activities
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Other cash flow information:
Income taxes paid
Interest paid$$$

Year ended December 31,
2020
2019

89,795$42,521$

81,417(35)(74,819)(2,126)(389)(1,038)
11,38824(17,402)(8,296)(72)
1,100
17,875125(65,237)
—
(56)
(693)
15,556(174)(34,988)
57,296—
22,134(1,947)(54,715)
59,035
11
2,384

60(40,107)
36,943737(2,367)

2,174(2,167)(27,061)—(27,054)
6,468
12,32918,797 $2,923(1,151)(24,706)—(22,934)(2,675)15,004
12,329 $

3,967
(758)
(4,850)19(1,622)
11,5673,437
15,004

3,403
377

3,391
359

3,531
364

$

$

Note to Condensed Financial Information
Berkshire currently owns 26.6% of the outstanding shares of The Kraft Heinz Company (“Kraft Heinz”) common
stock, which is accounted for pursuant to the equity method. See Note 5 to the accompanying Consolidated Financial
Statements for additional information regarding this investment.
In 2021, the Parent Company repaid €550 million of maturing senior notes and $1.5 billion of maturing senior notes
and issued €600 million of 0.5% senior notes due in 2041 and ¥160 billion (approximately $1.5 billion) of senior notes withmaturity dates ranging from 2026 to 2041 with a weighted average interest rate of 0.5%. As of December 31, 2021, theParent Company’s non-U.S. Dollar denominated borrowings included €6.9 billion and ¥785.5 billion par value senior notes.
The gains and losses from the periodic remeasurement of these non-U.S. Dollar denominated notes due to changes in foreign
currency exchange rates are included in earnings. In January 2022, Berkshire repaid $600 million of maturing debt and issued¥128.5 billion (approximately $1.1 billion) of senior notes with maturity dates ranging from 2027 to 2052 and a weighted
average interest rate of 0.5%.
Parent Company debt maturities over the next five years are as follows: 2022—$600 million; 2023—$4,467 million;
2024—$2,080 million; 2025—$1,681 million and 2026—$3,378 million. The Parent Company guarantees certain debt ofsubsidiaries, which aggregated approximately $17.0 billion at December 31, 2021, which was primarily debt issued byBerkshire Hathaway Finance Corporation. Such guarantees are an absolute, unconditional and irrevocable guarantee for thefull and prompt payment when due of all present and future payment obligations. The Parent Company has also provided
guarantees in connection with certain retroactive reinsurance contracts issued by subsidiaries. The amounts of subsidiary
payments under these contracts, if any, is contingent upon the outcome of future events.

K-116

EXHIBIT INDEXExhibit No.

2(i)Agreement and Plan of Merger dated as of June 19, 1998 between Berkshire and General Re Corporation.
Incorporated by reference to Annex I to Registration Statement No. 333-61129 filed on Form S-4.

2(ii)Agreement and Plan of Merger dated as of November 2, 2009 by and among Berkshire, R Acquisition
Company, LLC and BNSF. Incorporated by reference to Annex A to Registration Statement No. 333-163343
on Form S-4.

2(iii)

Agreement and Plan of Merger dated August 8, 2015, by and among Berkshire, NW Merger Sub Inc. andPrecision Castparts Corporation (“PCC”) Incorporated by reference to Exhibit 2.1 to PCC’s Current Report on
Form 8-K filed on August 10, 2015 (SEC File No. 001-10348)

3(i)Restated Certificate of Incorporation Incorporated by reference to Exhibit 3(i) to Form 10-K filed on March 2,
2015.

3(ii)

By-Laws Incorporated by reference to Exhibit 3(ii) to Form 8-K filed on May 4, 2016.

4.1

Indenture, dated as of December 22, 2003, between Berkshire Hathaway Finance Corporation, Berkshire
Hathaway Inc. and The Bank of New York Mellon Trust Company, N.A. (as successor to J.P. Morgan Trust
Company, National Association), as trustee. Incorporated by reference to Exhibit 4.1 on Form S-4 of Berkshire
Hathaway Finance Corporation and Berkshire Hathaway Inc. filed on February 4, 2004. SEC File No. 333112486

4.2

Indenture, dated as of February 1, 2010, among Berkshire Hathaway Inc., Berkshire Hathaway FinanceCorporation and The Bank of New York Mellon Trust Company, N.A., as trustee. Incorporated by reference to
Exhibit 4.1 to Berkshire’s Registration Statement on Form S-3 filed on February 1, 2010. SEC File No. 333164611

4.3

Indenture, dated as of January 26, 2016, by and among Berkshire Hathaway Inc., Berkshire Hathaway FinanceCorporation and The Bank of New York Mellon Trust Company, N.A., as trustee. Incorporated by reference to
Exhibit 4.1 to Berkshire’s Registration Statement on Form S-3 filed on January 26, 2016. SEC File No. 333209122

4.4

Indenture, dated as of December 1, 1995, between BNSF and The First National Bank of Chicago, as trustee.
Incorporated by reference to Exhibit 4 on Form S-3 of BNSF filed on February 8, 1999.

4.5

Indenture, dated as of October 4, 2002, by and between MidAmerican Energy Holdings Company and The
Bank of New York, Trustee. Incorporated by reference to Exhibit 4.1 to the Berkshire Hathaway Energy
Company Registration Statement No. 333-101699 dated December 6, 2002.

4.6

Indenture, dated as of January 28, 2022, by and among Berkshire Hathaway Inc., as an issuer and a guarantor ofthe debt securities issued by Berkshire Hathaway Finance Corporation, Berkshire Hathaway FinanceCorporation, as an issuer, and The Bank of New York Mellon Trust Company, N.A., as trustee. Incorporated byreference to Exhibit 4.1 to Berkshire’s Registration Statement on Form S-3 filed on January 28, 2022. SEC FileNo 333-262384.
Other instruments defining the rights of holders of long-term debt of Registrant and its subsidiaries are
not being filed since the total amount of securities authorized by all other such instruments does notexceed 10% of the total assets of the Registrant and its subsidiaries on a consolidated basis as ofDecember 31, 2021. The Registrant hereby agrees to furnish to the Commission upon request a copy of
any such debt instrument to which it is a party.

10.1

Equity Commitment Letter of Berkshire Hathaway Inc. with Hawk Acquisition Holding Corporation dated
February 13, 2013. Incorporated by reference to Exhibit 10.1 on Form 8-K of Berkshire Hathaway Inc. filed on
February 14, 2013.

14

Code of Ethics
Berkshire’s Code of Business Conduct and Ethics is posted on its Internet website atwww.berkshirehathaway.com

21

Subsidiaries of Registrant

23

Consent of Independent Registered Public Accounting Firm
K-117

Exhibit No.

31.1

Rule 13a—14(a)/15d-14(a) Certification

31.2

Rule 13a—14(a)/15d-14(a) Certification

32.1

Section 1350 Certification

32.2

Section 1350 Certification

95

Mine Safety Disclosures

101

The following financial information from Berkshire Hathaway Inc.’s Annual Report on Form 10-K for the year
ended December 31, 2021, 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 inShareholders’ Equity, (vi) the Consolidated Statements of Cash Flows, and (vii) the Notes to Consolidated
Financial Statements and Schedule I, tagged in summary and detail.

104

Cover Page Interactive Data File (formatted as iXBRL and contained in Exhibit 101)

K-118

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Date: February 26, 2022

/S/

MARC D. HAMBURG
Marc D. Hamburg
Senior Vice President andPrincipal Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by thefollowing persons on behalf of the Registrant and in the capacities and on the dates indicated.
/S/ WARREN E. BUFFETT
Warren E. Buffett/S/ GREGORY E. ABEL

Chairman of the Board of
Directors—Chief Executive Officer

February 26, 2022
Date

Director—Vice Chairman—Non-Insurance Operations

February 26, 2022
Date

Director

February 26, 2022
Date

Director

February 26, 2022
Date

Director

February 26, 2022
Date

Director

February 26, 2022
Date

Director

February 26, 2022
Date

Director

February 26, 2022
Date

Director

February 26, 2022
Date

Director

February 26, 2022
Date

Director—Vice Chairman—Insurance Operations

February 26, 2022
Date

Director—Vice Chairman

February 26, 2022
Date

Director

February 26, 2022
Date

Director

February 26, 2022
Date

Senior Vice President—Principal Financial Officer

February 26, 2022
Date

Vice President—Principal Accounting Officer

February 26, 2022
Date

Gregory E. Abel

/S/ HOWARD G. BUFFETT
Howard G. Buffett/S/ SUSAN A. BUFFETT
Susan A. Buffett/S/ STEPHEN B. BURKE
Stephen B. Burke/S/ KENNETH I. CHENAULT
Kenneth I. Chenault/S/ CHRISTOPHER C. DAVIS
Christopher C. Davis/S/ SUSAN L. DECKER
Susan L. Decker/S/ DAVID S. GOTTESMANDavid S. Gottesman/S/ CHARLOTTE GUYMAN
Charlotte Guyman/S/ AJIT JAIN
Ajit Jain/S/ CHARLES T. MUNGERCharles T. Munger/S/ RONALD L. OLSON
Ronald L. Olson/S/ MERYL B. WITMER
Meryl B. Witmer/S/ MARC D. HAMBURG
Marc D. Hamburg/S/ DANIEL J. JAKSICH
Daniel J. Jaksich

K-119

BERKSHIRE HATHAWAY INC.
ANNUAL MEETING INFORMATIONHEALTH AND SAFETY INFORMATION
As part of our commitment to the health and safety of our shareholders, proof of COVID-19 vaccination
will be required to attend the 2022 Annual Meeting and the Berkshire Bazaar of Bargains.
Berkshire has partnered with CLEAR Health Pass to help make your entry to the Annual Meetingseamless. The easy, free, and secure health pass can be created with just a few taps on your smartphone.
We encourage you to complete your health screening with CLEAR Health Pass ahead of time.
Your one-time enrollment only takes a few minutes and can be done from anywhere. Download the app,tap “Get Started” on the Health Pass button, enter event code BRK2022 to access the 2022 Annual
Meeting and follow the instructions.
••

Already a CLEAR Member? Just use the email address for your existing membership and snap aselfie to confirm that you are you.
New to CLEAR? There is no cost to you in using CLEAR Health Pass. Grab your ID (driver’s
license or passport) and your phone – then you’ll never need your ID for CLEAR again!

Shareholders who use CLEAR will use Fast Pass doors to gain entry to the CHI Health Center.
For international attendees and shareholders who do not use the CLEAR app, we will have marked doors
for you to provide proof of COVID-19 vaccination and proper identification. Digital or hard copy of your
COVID-19 vaccination record will be required.
ANNUAL MEETING SCHEDULE – SATURDAY, APRIL 30
CHI Health Center
7:00am
8:30am
9:15amNoon
1:00pm
3:30pm3:45pmDoors Open
Annual Meeting Movie
Q & A Session
Lunch BreakQ & A Session
Short Recess
Formal Business Meeting

Details: Becky Quick, of CNBC will review questions that shareholders have submitted by e-mail and selectthose she believes will have the widest interest. Questions can be submitted to Becky atberkshirequestions@cnbc.com. We will have a drawing at 8:15 am at each of the 11 microphone locations for
those shareholders wishing to ask questions themselves. At the meeting, Warren will alternate the questions
asked by Becky and the shareholders in attendance.
At the morning session, Warren as well as Charlie, Greg and Ajit will be available to answer questions. At theafternoon session, Warren and Charlie will be available to answer questions.
CNBC will webcast the April 30th Berkshire meeting, going live at 8:45 am central time and will begin the
webcast of the Q & A session at 9:15 am central time. Visit www.cnbc.com/BRKlive22.

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BERKSHIRE HATHAWAY INC.
ANNUAL MEETING INFORMATIONOTHER SPECIAL EVENTS INFORMATION
Friday, April 29
Berkshire Bazaar of Bargains (Shareholder Shopping Day)-CHI Health Center

Noon – 5pm

Details: An extended afternoon of shopping for our shareholders. (Must provide proof of COVID-19 vaccinationand have a meeting credential to participate.)
Borsheims Shareholder-Only Shopping Night

6:00pm – 8:00pm

Saturday, April 30
NFM’s Berkshire Picnic

5:30pm – 8:00pm

Details: NFM will be hosting a Berkshire Picnic at the Omaha store with food and live entertainment.
Sunday, May 1
Berkshire Hathaway “Invest in Yourself” 5K presented by Brooks 8:00am – 11:00am
Details: Brooks and Berkshire Hathaway are bringing the Run Happy spirit to the Annual Shareholders Meetingby again hosting the “Invest in Yourself” 5K fun run and walk. The event will be held in downtown Omaha. Run,
jog, or walk to the starting line by registering at www.investinyourself5k.com.
Borsheims Shareholder-Only Shopping Day 11:00am – 4:00pm
NFM Shareholder Discount Period
Wednesday, April 20 through Tuesday, May 3(Discounts also available at Dallas/Fort Worth, Kansas City and Des Moines Stores.)Store Hours:
Sunday – Friday: 11am – 8pm | Saturday: 10am – 8pm
Borsheims Shareholder Discount Period
Saturday, April 23 through Sunday, May 8
Store Hours:
Monday – Friday*: 10am – 6pm
Saturday**: 10am – 5:30pm | Sunday***Closed* Shareholder-Only Shopping Night, Friday, April 29 / 6 – 8pm** Shareholder Shopping Day, Saturday, April 30 / 10am – 5:30pm*** Shareholder-Only Shopping Day Sunday, May 1 / 11am – 4pm
Books for Shareholders
The Bookworm will be back with a selection of books. Shareholders receive a 20% discount. The books selected
for sale at the Berkshire annual meeting are available year round at www.bookwormomaha.com. Shareholders
with credentials also receive the 20% shareholder discount Friday, April 29 through Monday, May 2, at The
Bookworm, 90th and Center Street.

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BERKSHIRE HATHAWAY INC.
To the Shareholders of Berkshire Hathaway Inc.:
Warren has asked me to provide a summary of Berkshire’s actions related to sustainability within its
operating companies. The management of these actions is owned by Berkshire’s exceptional operating CEOs.
Under their leadership, and with my support, many of Berkshire’s diverse businesses have developed
sustainability frameworks and are independently disclosing environmental initiatives and data, such as
greenhouse gas (“GHG”) emissions.
Berkshire Hathaway Energy (“BHE”) and Burlington Northern Santa Fe (“BNSF”) – two of Berkshire’s
giants – have long been engaged in delivering sustainable outcomes that benefit all constituencies including
customers, communities, state and federal governments and Berkshire’s shareholders. The two businesses
generated aggregate net earnings of $10.0 billion in 2021 and their direct GHG emissions represent more than
90% of Berkshire’s direct emissions – a huge margin. Other subsidiaries, of course, are important, but Berkshire
will have failed if BHE and BNSF do not achieve their GHG emissions reduction goals.
Here are the annual GHG emissions from these two businesses:
Annual GHG Emissions(million metric tons)

Baseline

Company

BHE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BNSF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2021

2030
Target

79.9
18.6

63.5
15.8

39.9
13.0

98.5

79.3

52.9

BHE has selected 2005 as its baseline for GHG emissions – a year many others in the utility industry utilize.
BHE’s primary source of GHG emissions is the generation of electricity from power plants that are fueled bycoal and natural gas. BHE’s utilities work with their regulators to implement state policies that protect the energy
and economic needs of its constituents. BHE cannot develop a renewable energy project or retire a coal plant
without the support of regulators, who ensure that any action taken by BHE is made in the best interest ofcustomers.
I am pleased to report that BHE’s ability to make significant investments in renewables has created theopportunity to actively reduce coal generation while maintaining reliability and keeping customer costs low inthe process.
Specifically, BHE has become a leading force in wind, solar and transmission activity across much of the
U.S. BHE, through its Iowa utility MidAmerican Energy, began construction of its first wind turbines in 2004,
investing a little over $300 million in these assets. Today, MidAmerican has over 3,400 turbines in operation andhas invested $13.6 billion in wind production. This incredible expenditure helps MidAmerican to produce
renewable energy equivalent to 88% of its Iowa customers’ annual energy needs. It is attracting new customers
too – data center activity is growing exponentially throughout Iowa, driven by MidAmerican’s combination of
low cost and clean power. This is not the end of MidAmerican’s journey – just last month, the company
announced plans for a new $3.9 billion wind and solar project, which will enable renewable generation in excess
of its customers’ annual usage in Iowa by 2025.
The commitment to renewables goes beyond Iowa. In addition to the $13.6 billion invested in wind at
MidAmerican, BHE has invested $16.5 billion in other wind, solar and geothermal energy projects that it
operates and has financed an additional $6.9 billion for other operators.

A-3

While making these significant investments in renewables, BHE has retired 16 of its coal generation units.
Looking ahead, BHE plans to retire an additional 16 coal units between 2022 and 2030 in a reliable and cost-effective
manner for its customers, thereby achieving its 50% GHG emissions reduction target for 2030. Progress has been
consistent with this objective.
Simultaneously, BHE plans to invest billions of dollars in wind, solar and storage capacity, as well as invest in
new transmission lines in the West – a story told in Berkshire’s 2020 annual report. These transmission lines
connect remote noncarbon resources to far-away population centers. As additional noncarbon generation is
deployed and transmission is expanded, BHE plans to retire all remaining coal units by 2049 and all natural gas
units by 2050, enabling it to achieve net zero GHG emissions.
BHE routinely communicates in detail its approach to decarbonization, outlining its strategies and the capital it
will deploy to achieve this objective. BHE’s regulated U.S. utilities issue third-party debt as part of their capital
structure. Consequently, BHE has made environmental disclosures every year for the past 15 years through investor
presentations. These documents are publicly available on BHE’s website.
BNSF has selected 2018 as its GHG emissions baseline year, which is consistent with its largest peer in theWest. BNSF’s GHG emissions profile is comprised of the consumption of diesel fuel in its locomotives (accounting
for 80% of its baseline GHG emissions), the third-party production and transportation of those fuels and, to a lesser
extent, the consumption of natural gas and electricity across its broader operations.
BNSF is a common carrier railroad with a federal legal obligation to transport any commodity – including coaland hazardous materials – upon its customers’ request. Yet, the environmental impacts of the transportation of thesegoods are reduced thanks to BNSF’s focus on safety and efficiency. By nature, rail is the most environmentally
efficient mode of land-based transportation, moving its customers’ products more than three times as far as trucks
on a per ton mile basis. To build on this, BNSF has committed to and embraced a broader sustainability model,
applying a science-based approach that will provide a 30% reduction in BNSF’s GHG emissions by 2030 as
measured from its baseline. Progress has been consistent with this objective.
More will follow. Berkshire’s railroad will continue its improvements in fuel efficiency and increase its
utilization of renewable diesel fuel. Long-term solutions, such as battery-electric and hydrogen locomotives, arealso being evaluated and field tested. When successful, these measures will lower BNSF’s GHG emissions andincrease its cost competitiveness. Sustainability is fundamental to BNSF’s value proposition.
BHE and BNSF are not alone when it comes to these sustainability endeavors at Berkshire. Many subsidiaries
have also been responding to their customers’ varied needs by carrying out commitments to sustainable outcomes
and communicating environmental information. Equally, these efforts make good business sense.
For example, many consumers are interested in improved environmental outcomes for apparel products. As aresult, three of Berkshire’s manufacturing businesses that specialize in these products – Fruit of the Loom, Brooks
Sports and Garan – each disclose the environmental impacts of the products they sell and their plans to reduce those
impacts long term. Further, all three businesses have committed to 2030 GHG emissions reduction targets,consistent with the expectations of each customer base. This information can be found on their websites.
Additionally, four manufacturing businesses across Berkshire’s industrial and building products groups –Lubrizol, Johns Manville, Acme Brick and Shaw Industries – disclose on their websites recent GHG emissions dataand other sustainability information that is most relevant to their customers and operations.
Berkshire’s culture is strong, and its operating managers daily demonstrate ownership and accountability by
being responsive to the needs of their customers. The managers of these subsidiaries will continue to own all
business decisions, including their approach to sustainability and related environmental outcomes. Berkshire’s
businesses are exceptionally well positioned to deliver on ever-changing customer expectations regarding
sustainability, in both resources and attitude, while also driving value for Berkshire’s shareholders. I am supportiveof these outlined objectives and fully committed to Berkshire’s ongoing journey of delivering sustainable solutions.
February 26, 2022

Gregory E. AbelVice Chairman – Non-Insurance Operations

A-4

BERKSHIRE HATHAWAY INC.
PROPERTY/CASUALTY INSURANCE*
Our property/casualty (“P/C”) insurance business has been the engine propelling Berkshire’s growth since 1967, the year we acquired
National Indemnity and its sister company, National Fire & Marine, for $8.6 million. Today, National Indemnity is the largest P/C company inthe world as measured by net worth. Insurance is a business of promises, and Berkshire’s ability to honor its commitments is unmatched.
One reason we were attracted to the P/C business was the industry’s business model: P/C insurers receive premiums upfront and pay
claims later. In extreme cases, such as claims arising from exposure to asbestos, or severe workplace accidents, payments can stretch overmany decades.
This collect-now, pay-later model leaves P/C companies holding large sums – money we call “float” – that will eventually go to others.
Meanwhile, insurers get to invest this float for their own benefit. Though individual policies and claims come and go, the amount of float aninsurer holds usually remains fairly stable in relation to premium volume. Consequently, as our business grows, so does our float. And how it
has grown, as the following table shows:

Year
1970
1980
1990
2000
2010
2018
2019

Float (in millions)............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................

$

39
237
1,632
27,871
65,832
122,732
129,423

We may in time experience a decline in float. If so, the decline will be very gradual – at the outside no more than 3% in any year. The
nature of our insurance contracts is such that we can never be subject to immediate or near-term demands for sums that are of significance to
our cash resources. That structure is by design and is a key component in the unequaled financial strength of our insurance companies. That
strength will never be compromised.
If our premiums exceed the total of our expenses and eventual losses, our insurance operation registers an underwriting profit that adds tothe investment income the float produces. When such a profit is earned, we enjoy the use of free money – and, better yet, get paid for holdingit.
For the P/C industry as a whole, the financial value of float is now far less than it was for many years. That’s because the standard
investment strategy for almost all P/C companies is heavily – and properly – skewed toward high-grade bonds. Changes in interest rates
therefore matter enormously to these companies, and during the last decade the bond market has offered pathetically low rates.
Consequently, insurers suffered, as year by year they were forced – by maturities or issuer-call provisions – to recycle their “old”
investment portfolios into new holdings providing much lower yields. Where once these insurers could safely earn 5 cents or 6 cents on eachdollar of float, they now take in only 2 cents or 3 cents (or even less if their operations are concentrated in countries mired in the never-neverland of negative rates).
Some insurers may try to mitigate their loss of revenue by buying lower-quality bonds or non-liquid “alternative” investments promisinghigher yields. But those are dangerous games and activities that most institutions are ill-equipped to play.
Berkshire’s situation is more favorable than that of insurers in general. Most important, our unrivaled mountain of capital, abundance of
cash and a huge and diverse stream of non-insurance earnings allow us far more investment flexibility than is generally available to othercompanies in the industry. The many choices open to us are always advantageous – and sometimes have presented us with major
opportunities.
Our P/C companies have meanwhile had an excellent underwriting record. Berkshire has now operated at an underwriting profit for 16 of
the last 17 years, the exception being 2017, when our pre-tax loss was a whopping $3.2 billion. For the entire 17-year span, our pre-tax gain
totaled $27.5 billion, of which $400 million was recorded in 2019.
That record is no accident: Disciplined risk evaluation is the daily focus of our insurance managers, who know that the rewards of float
can be drowned by poor underwriting results. All insurers give that message lip service. At Berkshire it is a religion, Old Testament style.
As I have repeatedly done in the past, I will emphasize now that happy outcomes in insurance are far from a sure thing: We will mostcertainly not have an underwriting profit in 16 of the next 17 years. Danger always lurks.
Mistakes in assessing insurance risks can be huge and can take many years – even decades – to surface and ripen. (Think asbestos.) A
major catastrophe that will dwarf hurricanes Katrina and Michael will occur – perhaps tomorrow, perhaps many decades from now. “The Big
One” may come from a traditional source, such as wind or earthquake, or it may be a total surprise involving, say, a cyber attack having
disastrous consequences beyond anything insurers now contemplate. When such a mega-catastrophe strikes, Berkshire will get its share of thelosses and they will be big – very big. Unlike many other insurers, however, handling the loss will not come close to straining our resources,
and we will be eager to add to our business the next day.
* Reproduced from Berkshire Hathaway Inc. 2019 Annual Report

A-5

BERKSHIRE HATHAWAY INC.
OPERATING COMPANIESINSURANCE:GEICO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Berkshire Hathaway Reinsurance Group . . . . . . . . .
General Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Berkshire Hathaway Homestate Companies . . . . . . .
Berkshire Hathaway Specialty . . . . . . . . . . . . . . . . . .
Berkshire Hathaway GUARD Insurance Companies . .
MedPro Group Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . .
MLMIC Insurance Companies . . . . . . . . . . . . . . . . . .
National Indemnity Primary Group . . . . . . . . . . . . . .
United States Liability Insurance Companies . . . . . .
Central States Indemnity . . . . . . . . . . . . . . . . . . . . . . .

Employees

RAILROAD, UTILITIES AND ENERGY:

41,005
538
2,014
1,149
1,214
1,270
1,108
238
862
1,055
27

BNSF:
BNSF Railway . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BNSF Logistics . . . . . . . . . . . . . . . . . . . . . . . . . . .
Berkshire Hathaway Energy Company:
Corporate Office . . . . . . . . . . . . . . . . . . . . . . . . . .
PacifiCorp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MidAmerican Energy . . . . . . . . . . . . . . . . . . . . . .
NV Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Northern Powergrid . . . . . . . . . . . . . . . . . . . . . . .
BHE Pipeline Group . . . . . . . . . . . . . . . . . . . . . . .
BHE Transmission . . . . . . . . . . . . . . . . . . . . . . . .
BHE Renewables . . . . . . . . . . . . . . . . . . . . . . . . . .
MidAmerican Energy Services . . . . . . . . . . . . . .
HomeServices of America . . . . . . . . . . . . . . . . . .

50,480

Employees
35,125
550
32
4,783
3,427
2,273
2,527
2,692
726
345
75
6,757
59,312

MANUFACTURING:
Acme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benjamin Moore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Brooks Sports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Clayton Homes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CTB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Duracell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fechheimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forest River . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fruit of the Loom . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Garan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
H. H. Brown Shoe Group . . . . . . . . . . . . . . . . . . . . . . .
IMC International Metalworking Companies . . . . . .
Johns Manville . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Larson-Juhl . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LiquidPower Specialty Products, Inc. . . . . . . . . . . . .
Lubrizol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marmon(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MiTek Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Precision Castparts . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Richline Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Scott Fetzer Companies . . . . . . . . . . . . . . . . . . . . . . . .
Shaw Industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SERVICE AND RETAILING:
1,794
2,042
1,117
20,830
2,685
2,975
426
13,45732,591
3,899
1,163
13,016
7,748
867
433
8,368
22,8355,510
19,804
2,386
1,823
21,482

Affordable Housing Partners, Inc. . . . . . . . . . . . . . . .
Ben Bridge Jeweler . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Berkshire Hathaway Automotive . . . . . . . . . . . . . . . .
Borsheims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Business Wire . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charter Brokerage . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dairy Queen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Detlev Louis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
FlightSafety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Helzberg Diamonds . . . . . . . . . . . . . . . . . . . . . . . . . . .
Jordan’s Furniture . . . . . . . . . . . . . . . . . . . . . . . . . . . .
McLane Company . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nebraska Furniture Mart . . . . . . . . . . . . . . . . . . . . . .
NetJets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Oriental Trading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pampered Chef . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
R.C. Willey Home Furnishings . . . . . . . . . . . . . . . . . .
See’s Candies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Star Furniture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TTI, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
WPLG, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
XTRA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

187,251

27
696
9,530
136
415
172
1,966
493
1,403
4,005
1,657
1,040
26,204
4,407
6,616
1,278
348
2,591
2,546
426
8,043
210
375
74,584

Berkshire Hathaway Corporate Office . . . . . . . . . . . . . .

26
371,653(1)

Marmon Holding, Inc. (“Marmon”) is a holding company that conducts operations through more than 100
manufacturing and service businesses organized into 11 business groups.

A-6

BERKSHIRE HATHAWAY INC.
STOCK TRANSFER AGENT
EQ Shareowner Services (“EQ”), a division of Equiniti Trust Company, P. O. Box 64854, St. Paul, MN
55164-0854 serves as Transfer Agent and Registrar for the Company’s common stock. Correspondence may bedirected to EQ at the address indicated or at www.shareowneronline.com. Telephone inquiries should be directedto the Shareowner Relations Department at 1-877-602-7411 between 7:00 A.M. and 7:00 P.M. Central Time.
Certificates for re-issue or transfer should be directed to the Transfer Department at the address indicated.
Berkshire has two classes of common stock designated Class A common stock and Class B common stock.
Each share of Class A common stock is convertible, at the option of the holder, into 1,500 shares of Class B
common stock. Shares of Class B common stock are not convertible into shares of Class A common stock.
Registered owner’s holding Berkshire stock in certificate form or through EQ’s direct registration system,
may contact EQ directly for instructions regarding changes in registration, including shareowner’s mailingaddress or conversion of Class A shares to Class B shares. Correspondence may be directed to EQ at the address
indicated above or at www.shareowneronline.com. Telephone inquiries should be directed to the Shareowner
Relations Department at 1-877-602-7411 between 7:00 A.M. and 7:00 P.M. Central Time. Certificates for
re-issue or transfer should be directed to the Transfer Department at the address indicated above. Shareowners
can also view account information at the EQ website www.shareowneronline.com.
If a shareowner has lost or misplaced stock certificates, he or she should contact EQ to arrange forreplacements. Transfer agent’s, including EQ, will require the shareowner to provide an indemnification bondbased on the value of the share certificate being replaced. Shareholders are encouraged to contact EQ periodicallyto verify the mailing address of record to assure that Company communications are delivered. We encourage you
to vote on shareholder proposals contained in our annual proxy solicitation. Contact with EQ is establishedautomatically through the voting process.
Shareholders of record wishing to convert Class A common stock into Class B common stock may contact
EQ in writing. Along with the underlying stock certificate, shareholders should provide EQ with specific written
instructions regarding the number of shares to be converted and the manner in which the Class B shares are to beregistered. We recommend that you use certified or registered mail addressed to EQ Shareowner Services, 1110
Centre Pointe Curve, Suite 101, Mendota Heights, MN 55120 when delivering the stock certificates and written
instructions.
Owners holding Berkshire common stock in street name (in a bank, broker or other nominee account)should contact the bank, broker or nominee for changes in registration. If Class A shares are held in “street
name,” shareholders wishing to convert all or a portion of their holding to Class B should contact their broker orbank nominee. It will be necessary for the nominee to make the request for conversion.

A-7

BERKSHIRE HATHAWAY INC.
DIRECTORSOFFICERSWARREN E. BUFFETT,
Chairman and CEO of Berkshire

WARREN E. BUFFETT, Chairman and CEO
CHARLES T. MUNGER, Vice Chairman

CHARLES T. MUNGER,
Vice Chairman of Berkshire
GREGORY E. ABEL,
Vice Chairman of Berkshire - Non Insurance Operations

GREGORY E. ABEL, Vice Chairman - Non Insurance Operations
AJIT JAIN, Vice Chairman - Insurance Operations
MARC D. HAMBURG, Senior Vice President and CFO

AJIT JAIN,
Vice Chairman of Berkshire - Insurance Operations
HOWARD G. BUFFETT,
Chairman and Chief Executive Officer of the Howard G.
Buffett Foundation, a charitable foundation that directs
funding for humanitarian and conservation related issues.

DANIEL J. JAKSICH, Vice President, Controller
MARK D. MILLARD, Vice President
JO ELLEN RIECK, Vice President
KERBY S. HAM, Treasurer

SUSAN A. BUFFETT,
Chairman of the Susan Thompson Buffett Foundation andof the Sherwood Foundation, each of which is a grant
making foundation.

REBECCA K. AMICK, Director of Internal Auditing

STEPHEN B. BURKE,
Former Chairman and CEO of NBCUniversal, a media andentertainment company.
KENNETH I. CHENAULT,
Chairman and Managing Director of General Catalyst, aventure capital firm and Former Chairman and CEO of
American Express Company.
CHRISTOPHER C. DAVIS,
Chairman of Davis Advisors, an investment management
and counseling firm.
SUSAN L. DECKER,
Founder and CEO of Raftr, a community-building platform
for university students and administrators.
DAVID S. GOTTESMAN,
Senior Managing Director of First Manhattan Company,
an investment advisory firm.
CHARLOTTE GUYMAN,
Independent Director of Space Needle/Chihuly Garden &Glass, Landings Holdings and Evercase.
RONALD L. OLSON,
Partner of the law firm of Munger, Tolles & Olson LLPMERYL B. WITMER,Managing member of the General Partner of Eagle CapitalPartners L.P., an investment partnership.
Letters from Annual Reports (1977 through 2021), quarterly reports, press releases and other information about Berkshire may
be obtained on the Internet at www.berkshirehathaway.com.

BERKSHIRE HATHAWAY INC.
Executive Offices — 3555 Farnam Street, Omaha, Nebraska 68131