Berkshire Hathaway Inc 10-K Annual Report February 2025
Progressive reported a full year combined ratio of 88.8%, which is higher than GEICO’s 81.5% combined ratio but still excellent and well below Progressive’s 96% combined ratio target. By all accounts, Berkshire had a banner year with record operating earnings of $47.4 billion. This was driven by much better insurance underwriting results as well as higher investment income. However, we should note that the “Other” line item includes $1.1 billion of foreign currency exchange gains related to non-U.S. The sprawling manufacturing, service, and retailing group, represented by the “Other controlled businesses” line, posted slightly lower profits. The increase in interest income is due primarily to large increases in Berkshire’s treasury bill portfolio which was partially offset by slightly lower treasury bill rates during the final quarter of the year.
Table of Contents
Drivers of Operating Earnings
It is too mentally taxing to try to jump in and out of a stock simply because its value seems a bit on the high side. The situation would be different if a stock is trading at a level that could plausibly result in no return for five or ten years, but that has never really been the case for Berkshire Hathaway. As a result, it seems better to just hold the stock unless there is a need to raise cash or some clearly superior opportunity comes along that carries reasonable levels of risk.
Material Contracts, Statements, Certifications & more
Revenues increased from the prior year periods driven by gains across most business segments. Net earnings for the third quarter and first nine months of 2007 increased significantly compared to the prior year periods. We also have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
National Indemnity Company
The report provides Berkshire’s financial statements and disclosures for the quarter as required by the SEC. This document is Berkshire Hathaway’s Form 10-Q quarterly report filed with the SEC for the quarter ending June 30, 2008. It includes Berkshire’s consolidated financial statements and disclosures for the quarter, including information on revenues, costs and expenses, assets, liabilities, cash flows and business acquisitions. Berkshire operates businesses in insurance and other investments, utilities and energy, and finance and financial products.
- I would be surprised to see any repurchases unless the stock declines by at least 15% from current levels and we might need a 20% decline, to about $600,000 on the Class A shares, before Mr. Buffett regains his enthusiasm for large repurchases.
- However, this may or may not show up immediately in other line items of Berkshire’s income statement.
- Progressive reported a full year combined ratio of 88.8%, which is higher than GEICO’s 81.5% combined ratio but still excellent and well below Progressive’s 96% combined ratio target.
- It would be highly unrealistic for Berkshire shareholders to regard GEICO’s 2024 underwriting profits to be in any way “normal” given the historically low combined ratio.
SEC Filing Financial Summary
There is no law that says that Berkshire will continue to compound at such rates, but in any given year, we can be sure that Berkshire will deliver tens of billions of dollars in after-tax operating income alone, in addition to posting gains on securities on a normalized basis. If Berkshire seems “expensive” today at 1.65x book value, that problem will most likely work itself out in short order as value continues to accrete to owners and management retains all earnings. Warren Buffett stopped focusing on book value several years ago after reporting on that figure for decades. He did so not because he viewed book value as a representation of Berkshire’s intrinsic value, but because he felt that rates of change in book value roughly approximated rates of change in intrinsic value, which he has always said far exceeds book value.
- But after a subsequent spike in the stock price in late summer, I failed to take my own advice and sold shares in my retirement accounts, thinking that I would owe no taxes on the sale and shares were getting too expensive.
- As a result, GEICO experienced significant underwriting losses between Q and Q and also lost market share to Progressive.
- This post is by no means a comprehensive summary of the report and only includes a few topics that I decided to write about.
- The report provides Berkshire’s financial statements and disclosures for the quarter as required by the SEC.
- This resulted in an ultra-low expense ratio of under 10% for the full year, although the expense ratio climbed up to 11.6% in the fourth quarter as management felt confident enough to increase advertising spending.
- Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
This document is Berkshire Hathaway’s quarterly report filed with the SEC for the period ending June 30, 2005. It includes Berkshire’s consolidated balance sheet, showing over $194 billion in total assets including over $162 billion in insurance and other assets, and over $28 billion in finance and financial products assets. It also shows over $94 billion in total liabilities, including over $45 billion in losses and loss adjustment expenses for its insurance operations.
This resulted in an ultra-low expense ratio of under 10% for the full year, although the expense ratio climbed up to 11.6% in the fourth quarter as management felt confident enough to increase advertising spending. I’ve written about GEICO in detail several times over the past few years, with the most recent article appearing after the 2023 annual report. This gem of a business performed strongly for decades but underinvested in technology which resulted in its main competitor, Progressive, achieving an advantage in underwriting appropriately for risks assumed. As a result, GEICO experienced significant underwriting losses between Q and Q and also lost market share to Progressive. Management took steps to raise premiums and cut costs which restored underwriting profitability starting in 2023.
See when company executives buy or sell their own stock
As I type this article, such conditions seem quite unlikely, but sentiment can change quickly in financial markets and there is a significant amount of macroeconomic uncertainty regarding taxes, trade policy, and spending. Shareholders should take some solace in the fact that Berkshire continues to earn ~4.25% on its treasury bill portfolio while Mr. Buffett waits for a fat pitch. There was a time when I enthusiastically spent my weekends reading annual reports, but those days are now a distant memory. Every year, I wake up on a Saturday morning in late February to eagerly await the release of Berkshire Hathaway’s annual report.
But within a year, it is highly likely that Berkshire’s intrinsic value will have “caught up” to today’s “overvaluation” and you could very well never have an opportunity to buy back your position berkshire hathaway annual and interim reports at a lower price. Berkshire Hathaway reports have an aggregate usefulness score of 4.7 based on 346 reviews. A debt of gratitude is owed to those who have digitized files and made them available for others. If you have or know of other files not contained in these archives, please let me know via the contact form at the bottom of the page.
Financial Stability Report
My “base case” is that a company with a “typical” ownership profile is likely to have a “typical” culture eventually. It seems certain that the small number of remaining Class A shares in existence after the Buffett Foundation winds down will be held almost exclusively by large institutions unless the shares are split at some point in the coming years. I should mention that I have received some pushback on my concerns about Berkshire’s culture in the long run, which was the subject of an article last week. As an example, let’s say that you believe that Berkshire’s intrinsic value is $690,000 per Class A share when the stock price is $750,000. You could sell your share today, hoping to buy it back at a lower level in the future.
