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1、UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 10-Q(Mark One)QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30,2023ORTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT O

2、F 1934 For the transition period from toCommission file number 001-14905BERKSHIRE HATHAWAY INC.(Exact name of registrant as specified in its charter)Delaware47-0813844(State or other jurisdiction of incorporation or organization)(I.R.S.Employer Identification Number)3555 Farnam Street,Omaha,Nebraska

3、 68131(Address of principal executive office)(Zip Code)(402)346-1400(Registrants telephone number,including area code)(Former name,former address and former fiscal year,if changed since last report)Securities registered pursuant to Section 12(b)of the Act:Title of each class Trading Symbols Name of

4、each exchange on which registered Class A Common StockClass B Common Stock1.300%Senior Notes due 20240.000%Senior Notes due 20251.125%Senior Notes due 20272.150%Senior Notes due 20281.500%Senior Notes due 20302.000%Senior Notes due 20341.625%Senior Notes due 20352.375%Senior Notes due 20390.500%Seni

5、or Notes due 20412.625%Senior Notes due 2059BRK.ABRK.BBRK24BRK25BRK27BRK28BRK30BRK34BRK35BRK39BRK41BRK59New York Stock ExchangeNew York Stock ExchangeNew York Stock ExchangeNew York Stock ExchangeNew York Stock ExchangeNew York Stock ExchangeNew York Stock ExchangeNew York Stock ExchangeNew York Sto

6、ck ExchangeNew York Stock ExchangeNew York Stock ExchangeNew York Stock ExchangeIndicate 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 r

7、egistrant 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 to Rule 405 of Regulation S-T(232.405 o

8、f 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,smaller reporting company,or an emerging grow

9、th 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 filerNon-accelerated filerSmaller reporting company Emerging growth company If an emerging grow

10、th company,indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the Registrant is a shell company(as def

11、ined in Rule 12b-2 of the Exchange Act).Yes No Number of shares of common stock outstanding as of July 26,2023:Class A 575,320Class B 1,308,070,2681BERKSHIRE HATHAWAY INC.Page No.Part I Financial Information Item 1.Financial Statements Consolidated Balance SheetsJune 30,2023 and December 31,20222 Co

12、nsolidated Statements of EarningsSecond Quarter and First Six Months 2023 and 20224 Consolidated Statements of Comprehensive IncomeSecond Quarter and First Six Months 2023 and 20225 Consolidated Statements of Changes in Shareholders EquitySecond Quarter and First Six Months 2023 and 20226 Consolidat

13、ed Statements of Cash FlowsFirst Six Months 2023 and 20227 Notes to Consolidated Financial Statements8Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations31Item 3.Quantitative and Qualitative Disclosures About Market Risk52Item 4.Controls and Procedures52Part I

14、I Other Information 52Item 1.Legal Proceedings52Item 1A.Risk Factors52Item 2.Unregistered Sales of Equity Securities and Use of Proceeds and Issuer Repurchases of Equity Securities53Item 3.Defaults Upon Senior Securities53Item 4.Mine Safety Disclosures53Item 5.Other Information53Item 6.Exhibits54Sig

15、nature 54 2Part I Financial InformationItem 1.Financial StatementsBERKSHIRE HATHAWAY INC.and SubsidiariesCONSOLIDATED BALANCE SHEETS(dollars in millions)June 30,2023December 31,2022(Unaudited)ASSETSInsurance and Other:Cash and cash equivalents*$44,611$32,260Short-term investments in U.S.Treasury Bil

16、ls97,32292,774Investments in fixed maturity securities22,35325,128Investments in equity securities353,409308,793Equity method investments27,49328,050Loans and finance receivables23,53023,208Other receivables45,59043,490Inventories25,29525,366Property,plant and equipment21,41321,113Equipment held for

17、 lease16,02815,584Goodwill50,98251,522Other intangible assets29,81929,187Deferred charges-retroactive reinsurance9,4549,870Other19,91719,657787,216726,002Railroad,Utilities and Energy:Cash and cash equivalents*5,4443,551Receivables6,0674,795Property,plant and equipment171,747160,268Goodwill34,87126,

18、597Regulatory assets5,4525,062Other30,77622,190254,357222,463$1,041,573$948,465*Includes U.S.Treasury Bills with maturities of three months or less when purchased of$24.5 billion at June 30,2023 and$2.6 billion at December 31,2022.See accompanying Notes to Consolidated Financial Statements3BERKSHIRE

19、 HATHAWAY INC.and SubsidiariesCONSOLIDATED BALANCE SHEETS(dollars in millions)June 30,2023December 31,2022(Unaudited)LIABILITIES AND SHAREHOLDERS EQUITYInsurance and Other:Unpaid losses and loss adjustment expenses$109,030$107,472Unpaid losses and loss adjustment expenses-retroactive reinsurance con

20、tracts34,42135,415Unearned premiums31,17328,657Life,annuity and health insurance benefits19,63519,753Other policyholder liabilities10,86811,370Accounts payable,accruals and other liabilities31,99933,201Aircraft repurchase liabilities and unearned lease revenues7,3756,820Notes payable and other borro

21、wings41,38946,538 285,890289,226Railroad,Utilities and Energy:Accounts payable,accruals and other liabilities20,23416,615Regulatory liabilities6,7197,369Notes payable and other borrowings83,95876,206 110,911100,190Income taxes,principally deferred93,01177,368Total liabilities489,812466,784Redeemable

22、 noncontrolling interests3,210Shareholders equity:Common stock88Capital in excess of par value35,14035,167Accumulated other comprehensive income(4,240)(5,052)Retained earnings582,543511,127Treasury stock,at cost(73,568)(67,826)Berkshire Hathaway shareholders equity539,883473,424Noncontrolling intere

23、sts8,6688,257Total shareholders equity548,551481,681$1,041,573$948,465See accompanying Notes to Consolidated Financial Statements 4BERKSHIRE HATHAWAY INC.and SubsidiariesCONSOLIDATED STATEMENTS OF EARNINGS(dollars in millions except per share amounts)(Unaudited)Second QuarterFirst Six Months20232022

24、20232022Revenues:Insurance and Other:Insurance premiums earned$20,561$18,081$40,357$35,569Sales and service revenues39,12640,22077,51478,082Leasing revenues2,0791,8874,1233,559Interest,dividend and other investment income3,8462,8617,0754,72365,61263,049129,069121,933Railroad,Utilities and Energy:Fre

25、ight rail transportation revenues5,8086,61211,80912,556Utility and energy operating revenues19,5934,93534,5109,753Service revenues and other income1,4901,6052,5082,80226,89113,15248,82725,111Total revenues92,50376,201177,896147,044Investment and derivative contract gains(losses)33,061(66,919)67,819(

26、68,897)Costs and expenses:Insurance and Other:Insurance losses and loss adjustment expenses14,08913,62028,31026,952Life,annuity and health insurance benefits1,1281,1861,9132,523Insurance underwriting expenses3,7292,3777,3164,981Cost of sales and services30,62131,63360,94061,418Cost of leasing1,4571,

27、4982,9342,730Selling,general and administrative expenses5,0053,76210,6078,013Interest expense356,34354,378112,662107,183Railroad,Utilities and Energy:Freight rail transportation expenses4,0144,2608,1758,185Utilities and energy cost of sales and other expenses18,1593,84432,0057,435Other ex

28、penses1,1891,5272,0602,683Interest expense9357851,8251,55524,29710,41644,06519,858Total costs and expenses80,64064,794156,727127,041Earnings(loss)before income taxes and equity method earnings44,924(55,512)88,988(48,894)Equity method earnings5112041,199543Earnings(loss)before income taxes45,435(55,3

29、08)90,187(48,351)Income tax expense(benefit)9,236(12,066)18,231(10,814)Net earnings(loss)36,199(43,242)71,956(37,537)Earnings attributable to noncontrolling interests287379540504Net earnings(loss)attributable to Berkshire Hathaway shareholders$35,912$(43,621)$71,416$(38,041)Net earnings(loss)per ave

30、rage equivalent Class A share$24,775$(29,663)$49,152$(25,832)Net earnings(loss)per average equivalent Class B share*$16.52$(19.78)$32.77$(17.22)Average equivalent Class A shares outstanding1,449,5421,470,5771,452,9711,472,628Average equivalent Class B shares outstanding2,174,313,6702,205,865,2622,17

31、9,456,8162,208,942,539*Class B shares are economically equivalent to one-fifteen-hundredth of a Class A share.Accordingly,net earnings per averageequivalent Class B share outstanding is equal to one-fifteen-hundredth of the equivalent Class A amount.See Note 19.See accompanying Notes to Consolidated

32、 Financial Statements 5BERKSHIRE HATHAWAY INC.and SubsidiariesCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(dollars in millions)(Unaudited)Second QuarterFirst Six Months2023202220232022Net earnings(loss)$36,199$(43,242)$71,956$(37,537)Other comprehensive income:Unrealized gains(losses)on investmen

33、ts(41)(211)206(447)Applicable income taxes2144(32)95Foreign currency translation383(1,750)632(2,065)Applicable income taxes(21)63(15)52Long-duration insurance contract discount rate changes4872,7341205,812Applicable income taxes(125)(587)(49)(1,246)Defined benefit pension plans2155241Applicable inco

34、me taxes(6)(4)(12)(9)Other,net5768(63)155Other comprehensive income,net7573728392,388Comprehensive income36,956(42,870)72,795(35,149)Comprehensive income attributable to noncontrolling interests308350567472Comprehensive income attributable to Berkshire Hathaway shareholders$36,648$(43,220)$72,228$(3

35、5,621)See accompanying Notes to Consolidated Financial Statements6BERKSHIRE HATHAWAY INC.and SubsidiariesCONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY(dollars in millions)(Unaudited)Berkshire Hathaway shareholders equityCommon stockand capital inexcess of parvalueAccumulatedothercomprehe

36、nsiveincomeRetainedearningsTreasurystockNon-controllinginterestsTotalFor the second quarter and first six months of 2023Balance at December 31,2022 as previously reported$35,175$(6,591)$511,602$(67,826)$8,257$480,617Adoption of ASU 2018-121,539(475)1,064Balance at December 31,2022 as revised35,175(5

37、,052)511,127(67,826)8,257481,681Net earnings35,50425335,757Other comprehensive income,net76682Acquisition of common stock(4,439)(4,439)Transactions with noncontrolling interests and other(11)7(4)Balance at March 31,2023$35,164$(4,976)$546,631$(72,265)$8,523$513,077Net earnings35,91228736,199Other co

38、mprehensive income,net73621757Acquisition of common stock(1,303)(1,303)Transactions with noncontrolling interests and other(16)(163)(179)Balance at June 30,2023$35,148$(4,240)$582,543$(73,568)$8,668$548,551 For the second quarter and first six months of 2022Balance at December 31,2021 as originally

39、reported$35,600$(4,027)$534,421$(59,795)$8,731$514,930Adoption of ASU 2018-12(4,096)(535)(4,631)Balance at December 31,2021 as revised35,600(8,123)533,886(59,795)8,731510,299Net earnings5,5801255,705Other comprehensive income,net2,019(3)2,016Acquisition of common stock(3,111)(3,111)Transactions with

40、 noncontrolling interests and other(6)(129)(135)Balance at March 31,2022$35,594$(6,104)$539,466$(62,906)$8,724$514,774Net earnings(loss)(43,621)379(43,242)Other comprehensive income,net401(29)372Acquisition of common stock(1,028)(1,028)Transactions with noncontrolling interests and other(382)(650)(1

41、,032)Balance at June 30,2022$35,212$(5,703)$495,845$(63,934)$8,424$469,844See accompanying Notes to Consolidated Financial Statements7BERKSHIRE HATHAWAY INC.and SubsidiariesCONSOLIDATED STATEMENTS OF CASH FLOWS(dollars in millions)(Unaudited)First Six Months20232022Cash flows from operating activiti

42、es:Net earnings(loss)$71,956$(37,537)Adjustments to reconcile net earnings to operating cash flows:Investment(gains)losses(67,819)68,589Depreciation and amortization6,1475,413Other(3,126)(2,592)Changes in operating assets and liabilities:Unpaid losses and loss adjustment expenses2751,505Deferred cha

43、rges-retroactive reinsurance416426Unearned premiums2,4922,384Receivables and originated loans(1,194)(6,455)Inventories505(4,080)Other assets(980)(620)Other liabilities(2,721)1,247Income taxes15,176(12,923)Net cash flows from operating activities21,12715,357Cash flows from investing activities:Purcha

44、ses of equity securities(7,442)(57,269)Sales of equity securities25,83312,044Purchases of U.S.Treasury Bills and fixed maturity securities(99,060)(100,355)Sales of U.S.Treasury Bills and fixed maturity securities39,99154,637Redemptions and maturities of U.S.Treasury Bills and fixed maturity securiti

45、es59,81523,681Acquisitions of businesses,net of cash acquired(8,516)(103)Purchases of property,plant and equipment and equipment held for lease(8,398)(6,833)Other51325Net cash flows from investing activities2,736(74,173)Cash flows from financing activities:Proceeds from borrowings of insurance and o

46、ther businesses1,2256,972Repayments of borrowings of insurance and other businesses(5,388)(1,440)Proceeds from borrowings of railroad,utilities and energy businesses2,7883,189Repayments of borrowings of railroad,utilities and energy businesses(2,187)(1,374)Changes in short-term borrowings,net582(85)

47、Acquisition of treasury stock(5,850)(4,191)Other,principally transactions with noncontrolling interests(803)(1,464)Net cash flows from financing activities(9,633)1,607Effects of foreign currency exchange rate changes24(273)Increase(decrease)in cash and cash equivalents and restricted cash14,254(57,4

48、82)Cash and cash equivalents and restricted cash at beginning of year*36,39988,706Cash and cash equivalents and restricted cash at end of second quarter*$50,653$31,224*Cash and cash equivalents and restricted cash are comprised of:Beginning of yearInsurance and Other$32,260$85,319Railroad,Utilities

49、and Energy3,5512,865Restricted cash included in other assets588522$36,399$88,706End of second quarterInsurance and Other$44,611$26,534Railroad,Utilities and Energy5,4444,074Restricted cash included in other assets598616$50,653$31,224See accompanying Notes to Consolidated Financial Statements 8BERKSH

50、IRE HATHAWAY INC.and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTSJune 30,2023Note 1.General The accompanying unaudited Consolidated Financial Statements include the accounts of Berkshire Hathaway Inc.(“Berkshire”or“Company”)consolidated with the accounts of all its subsidiaries and affilia

51、tes in which Berkshire holds controlling financial interests as of the financial statement date.In these notes,the terms“us,”“we”or“our”refer to Berkshire and its consolidated subsidiaries.Reference is made to Berkshires most recently issued Annual Report on Form 10-K(“Annual Report”),which includes

52、 information necessary or useful to understanding Berkshires businesses and financial statement presentations.Our significant accounting policies and practices were presented as Note 1 to the Consolidated Financial Statements included in the Annual Report.Financial information in this Quarterly Repo

53、rt reflects all adjustments that are,in the opinion of management,necessary to a fair statement of results for the interim periods in accordance with accounting principles generally accepted in the United States(“GAAP”).For several reasons,our results for interim periods are not normally indicative

54、of results to be expected for the year.The timing and magnitude of catastrophe losses incurred by insurance subsidiaries and the estimation error inherent to the process of determining liabilities for unpaid losses of insurance subsidiaries can be more significant to results of interim periods than

55、to results for a full year.Given the size of our equity security investment portfolio,changes in market prices and the related changes in unrealized gains and losses on equity securities will produce significant volatility in our interim and annual earnings.In addition,the magnitude of gains and los

56、ses from the periodic revaluation of certain assets and liabilities denominated in foreign currencies and asset impairment charges may cause significant variations in periodic net earnings.To varying degrees,our operating businesses have been impacted by government and private sector actions to miti

57、gate the adverse economic effects of the COVID-19 virus and its variants as well as by the development of geopolitical conflicts,supply chain disruptions and government actions to slow inflation.The economic effects from these events over longer terms cannot be reasonably estimated at this time.Acco

58、rdingly,significant estimates used in the preparation of our financial statements,including those associated with evaluations of certain 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 un

59、der insurance and reinsurance contracts,may be subject to significant adjustments in future periods.Note 2.New accounting pronouncements We adopted Accounting Standards Update 2018-12“Targeted Improvements to the Accounting for Long-Duration Contracts”(“ASU 2018-12”)as of January 1,2023,which modifi

60、es the accounting,reporting and disclosures related to long-duration insurance contracts,including the measurement of our long-duration life,annuity and health benefit liabilities.ASU 2018-12 was applied retrospectively to contracts in-force beginning as of January 1,2021(the“transition date”).As of

61、 the transition date,the after-tax impact of changes in cash flow assumptions were recorded in retained earnings and the after-tax effect of changes in discount rate assumptions were recorded in accumulated other comprehensive income.Our Consolidated Financial Statements for the years ending Decembe

62、r 31,2022 and 2021 and as of the January 1,2021 transition date were revised for the effects of adopting ASU 2018-12.These effects were included in Part II,Item 5 to our Form 10-Q for the period ending March 31,2023.Beginning as of January 1,2021,the cash flow assumptions used to measure benefit lia

63、bilities are reviewed at least annually,with the effects of assumption changes recorded in earnings.The discount rate assumptions used to measure benefit liabilities are revised each quarterly reporting period with the effects of changes reported in other comprehensive income.Discount rates are base

64、d on the prevailing upper-medium grade corporate bond yields(generally single A-rated credit ratings)that reflect the duration characteristics and currency attributes of the liabilities.In measuring benefit liabilities and amortizing capitalized acquisition costs under long-duration insurance contra

65、cts,we generally aggregate contracts by issuance year.See Note 16 for disclosures related to our long-duration insurance contracts.A summary of the impacts of adopting ASU 2018-12 on our periodic payment annuity and life and health insurance benefits liabilities as of the January 1,2021 transition d

66、ate follows in millions.Periodic paymentannuitiesLife and healthTotalBalance at December 31,2020,as previously reported$10,974$10,642$21,616Reclassifications to other policyholder liabilities(286)(929)(1,215)Balance at December 31,2020 after reclassifications10,6889,71320,401Change in discount rate

67、assumptions6,5531,4478,000Change in cash flow assumptions(117)552435Balance as of January 1,2021$17,124$11,712$28,8369Notes to Consolidated Financial Statements(Continued)Note 2.New accounting pronouncements(Continued)The reclassifications to other policyholder liabilities are primarily related to c

68、ertain liabilities arising under our variable annuity guarantee reinsurance contracts.These liabilities are not classified as life,annuity and health insurance benefits liabilities under ASU 2018-12.The effects of adopting ASU 2018-12 on our Consolidated Statements of Earnings and Comprehensive Inco

69、me for the second quarter and first six months of 2022 follows in millions,except per share amounts.Second QuarterFirst Six MonthsPreviously reportedIncrease(decrease)As revisedPreviously reportedIncrease(decrease)As revisedRevenues:Insurance premiums earned$18,087$(6)$18,081$35,579$(10)$35,569Costs

70、 and expenses:Life,annuity and health insurance benefits1,282(96)1,1862,605(82)2,523Insurance underwriting expenses2,461(84)2,3775,228(247)4,981Earnings(loss)before income taxes(55,482)174(55,308)(48,670)319(48,351)Income tax expense(benefit)(12,106)40(12,066)(10,879)65(10,814)Net earnings(loss)(43,

71、376)134(43,242)(37,791)254(37,537)Net earnings(loss)attributable to Berkshire Hathaway shareholders$(43,755)$134$(43,621)$(38,295)$254$(38,041)Other comprehensive income:Foreign currency translation(1,751)1(1,750)(2,067)2(2,065)Long-duration insurance contracts2,1472,1474,5664,566Other comprehensive

72、 income,net(1,776)2,148372(2,180)4,5682,388Comprehensive income attributable to Berkshire Hathaway shareholders$(45,502)$2,282$(43,220)$(40,443)$4,822$(35,621)Net earnings(loss)per average equivalent Class A share$(29,754)$91$(29,663)$(26,005)$173$(25,832)Net earnings(loss)per average equivalent Cla

73、ss B share$(19.84)$0.06$(19.78)$(17.34)$0.12$(17.22)In March 2023,the FASB issued Accounting Standards Update 2023-02,“Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method”(“ASU 2023-02”).ASU 2023-02 permits reporting entities to elect to account for tax equ

74、ity investments,regardless of the tax credit program from which the income tax credits are received,using the proportional amortization method if certain conditions are met.Currently,the proportional amortization method is limited to certain affordable housing tax credit investments.ASU 2023-02 is e

75、ffective for fiscal years beginning after December 15,2023,and is applied either on a retrospective basis beginning as of the earliest period presented or a modified retrospective basis in the period of adoption.We are evaluating the effects of this standard on our Consolidated Financial Statements.

76、Note 3.Significant 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

77、beginning on their respective acquisition dates.On January 31,2023,we acquired an additional 41.4%interest in Pilot Travel Centers,LLC(“Pilot”)for approximately$8.2 billion.We previously owned a 38.6%interest in Pilot and accounted for that investment under the equity method.We now possess a control

78、ling interest in Pilot for financial reporting purposes.We applied the equity method through the end of January 2023 and began consolidating Pilots financial statements in our Consolidated Financial Statements on February 1,2023.Pilot is headquartered in Knoxville,Tennessee and operates travel cente

79、rs in North America(primarily under the names Pilot or Flying J)with more than 650 travel center locations across 43 U.S.states and six Canadian provinces.Pilot also has over 150 retail locations in the U.S.and Canada where it sells diesel fuel through various arrangements with third party travel ce

80、nters.Among its business activities,Pilot operates large wholesale fuel and fuel marketing platforms in the U.S.and operates a water hauling and disposal business in the oil fields sector.As Pilots most significant business activities involve purchasing and selling fuel(energy)on a wholesale and ret

81、ail basis,and engaging in other energy-related business activities,including oil field services,we have included Pilot within the railroad,utilities and energy sections of our Consolidated Balance Sheet and Consolidated Statement of Earnings beginning February 1,2023.10Notes to Consolidated Financia

82、l Statements(Continued)Note 3.Significant business acquisitions(Continued)Pilots revenues and net earnings attributable to Berkshire shareholders included in Berkshires Consolidated Financial Statements for the five months ending June 30,2023 were$24.3 billion and$197 million,respectively.Our equity

83、 method earnings from Pilot for the month of January 2023 were$105 million.In applying the acquisition method of accounting,we were required to remeasure our previously held 38.6%investment in Pilot to fair value.In the first quarter of 2023,we recognized a one-time,non-cash remeasurement gain of ap

84、proximately$3.0 billion,representing the excess of the fair value of that interest over the carrying value under the equity method,as a component of investment gains(losses).The holder of the remaining noncontrolling interest in Pilot has the option to require us to redeem for cash,all or a portion

85、of the interest beginning in 2024.The cash consideration will be based on Pilots future earnings,cash and debt.We have concluded that the remaining Pilot noncontrolling interest represents a redeemable interest under GAAP and are presenting such interests between liabilities and shareholders equity

86、in the Consolidated Balance Sheet.We valued the noncontrolling interest at fair value as of the acquisition date.Thereafter,we will increase or decrease the redeemable noncontrolling interest by the share of the earnings or losses attributable to the interest and will further adjust the balance,as a

87、ppropriate,if the current estimated redemption value exceeds the carrying value.The preliminary values of Pilots assets acquired,liabilities assumed and redeemable noncontrolling interests as of January 31,2023 are summarized as follows(in millions).The valuations of certain assets and liabilities,i

88、ncluding property,plant and equipment,other intangible assets and goodwill,as of the acquisition date have not been finalized and are provisional.PilotProperty,plant and equipment$8,082Goodwill and other intangible assets13,309Other assets6,994Assets acquired$28,385Notes payable$5,876Other liabiliti

89、es4,774Liabilities assumed10,650Noncontrolling interests,predominantly redeemable3,370Net assets$14,365On October 19,2022,Berkshire acquired all of the outstanding common stock of Alleghany Corporation(“Alleghany”)for$11.5 billion.Alleghany operates a group of property and casualty reinsurance and i

90、nsurance businesses.It also owns a portfolio of non-financial businesses.Goodwill arising from Berkshires acquisition is not expected to be deductible for income tax purposes.A summary of the values of the Alleghany assets acquired and liabilities assumed as of October 19,2022 follows(in millions).A

91、lleghanyCash,cash equivalents and U.S.Treasury Bills$3,762Investments in fixed maturity and equity securities15,982Loans and other receivables5,650Goodwill3,900Other intangible assets2,659Other assets3,637Assets acquired$35,590Unpaid losses and loss adjustment expenses$15,080Unearned premiums3,536No

92、tes payable2,169Other liabilities3,300Liabilities assumed24,085Net assets$11,505Certain unaudited pro forma revenue and consolidated earnings(loss)data for the six months ended June 30,2022 as if the Alleghany and Pilot acquisitions were consummated on the same terms at the beginning of 2022 follows

93、(in millions,except per share amounts).June 30,2022Revenues$188,855Net earnings(loss)attributable to Berkshire Hathaway shareholders(38,169)Net earnings(loss)per equivalent Class A common share(25,919)11Notes to Consolidated Financial Statements(Continued)Note 4.Investments in fixed maturity securit

94、ies Investments in fixed maturity securities as of June 30,2023 and December 31,2022 are summarized by type below(in millions).AmortizedCostUnrealizedGainsUnrealizedLossesFairValueJune 30,2023U.S.Treasury,U.S.government corporations and agencies$9,242$2$(192)$9,052Foreign governments11,57170(160)11,

95、481Corporate bonds1,333228(7)1,554Other25020(4)266$22,396$320$(363)$22,353December 31,2022U.S.Treasury,U.S.government corporations and agencies$10,039$12$(249)$9,802Foreign governments10,45450(177)10,327Corporate bonds1,945256(6)2,195Other2,73577(8)2,804$25,173$395$(440)$25,128As of June 30,2023,the

96、 fair value of investments in U.S.Treasury securities that mature in 2023 and 2024 was approximately$8.3 billion.As of June 30,2023,approximately 94%of our foreign government holdings were rated AA or higher by at least one of the major rating agencies.The amortized cost and estimated fair value of

97、fixed maturity securities at June 30,2023 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.Due in oneyear or lessDue after one year throughfive yearsDue after five years throug

98、hten yearsDue afterten yearsMortgage-backedsecuritiesTotalAmortized cost$15,632$5,748$708$136$172$22,396Fair value15,4525,65491614518622,353Note 5.Investments in equity securities Investments in equity securities as of June 30,2023 and December 31,2022 are summarized as follows(in millions).Cost Bas

99、isNet Unrealized GainsFair ValueJune 30,2023*Banks,insurance and finance$23,547$43,056$66,603Consumer products36,550169,760206,310Commercial,industrial and other55,56024,93680,496$115,657$237,752$353,409*Approximately 78%of the aggregate fair value was concentrated in five companies(American Express

100、 Company$26.4 billion;Apple Inc.$177.6 billion;Bank of America Corporation$29.6 billion;The Coca-Cola Company$24.1 billion and Chevron Corporation$19.4 billion).Cost BasisNet Unrealized GainsFair ValueDecember 31,2022*Banks,insurance and finance$25,893$43,663$69,556Consumer products40,508112,384152,

101、892Commercial,industrial and other65,20921,13686,345$131,610$177,183$308,793*Approximately 75%of the aggregate fair value was concentrated in five companies(American Express Company$22.4 billion;Apple Inc.$119.0 billion;Bank of America Corporation$34.2 billion;The Coca-Cola Company$25.4 billion and

102、Chevron Corporation$30.0 billion).12Notes to Consolidated Financial Statements(Continued)Note 5.Investments in equity securities(Continued)During 2022,we began to acquire common stock of Occidental Petroleum Corporation(“Occidental”).Our aggregate voting interest in Occidental exceeded 20%on August

103、4,2022 and we adopted the equity method as of that date.See Note 6.We report our investments in Occidental Cumulative Perpetual Preferred Stock and Occidental common stock warrants at fair value as equity securities in our Consolidated Balance Sheets,as such interests are not in-substance common sto

104、ck under GAAP and are not eligible for the equity method.The Occidental 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 value,plus any accumulated and unpaid dividends.As of June 3

105、0,2023,our investment in Occidental preferred stock had an aggregate liquidation value of approximately$8.8 billion.During the first six months of 2023,Occidental issued mandatory redemption notifications at a price of 110%of the liquidation value,plus accrued and unpaid dividends for$1.2 billion of

106、 the aggregate liquidation value.The mandatory redemptions were due to excess distributions by Occidental to its common stockholders(as defined under the terms of Occidental preferred stock certificate of designations).Our investment in Occidental warrants allows us to purchase up to 83.86 million s

107、hares of Occidental common stock at an exercise price of$59.62 per share.The warrants are exercisable in whole or in part until one year after the date the preferred stock is fully redeemed.On June 30,2023,we owned 151.6 million shares of American Express Company(“American Express”)common stock repr

108、esenting 20.6%of the American Express outstanding common stock.Since 1995,we have been party to an agreement with American Express whereby we agreed to vote a significant portion of our shares in accordance with the recommendations of the American Express Board of Directors.We have also agreed to pa

109、ssivity commitments as requested by the Board of Governors of the Federal Reserve System,which collectively,in our judgment,restrict our ability to exercise significant influence over the operating and financial policies of American Express.Accordingly,we do not use the equity method with respect to

110、 our investment in American Express common stock and we continue to record our investment at fair value.Note 6.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

111、are our investments in the common stock of The Kraft Heinz Company(“Kraft Heinz”)and Occidental.As of June 30,2023,we owned 26.5%of the outstanding Kraft Heinz common stock and 25.1%of the outstanding Occidental common stock,which excludes the potential effect of the exercise of the Occidental commo

112、n stock warrants.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.Occidental is an international energy company,whose activities include oil and natural gas exploration

113、,development and production and chemicals manufacturing businesses.Occidentals financial information is not available in time for concurrent reporting in our Consolidated Financial Statements.Therefore,we report the equity method effects for Occidental on a one-quarter lag.The common stock of Kraft

114、Heinz and Occidental are publicly traded.The fair values and our carrying values of these investments in addition to the carrying values of our other significant equity method investments are summarized as follows(in millions).We evaluated our investments in Kraft Heinz and Occidental for other-than

115、-temporary impairment as of June 30,2023,and based on the prevailing facts and circumstances,concluded the recognition of an impairment charge in earnings was not required.Carrying ValueFair ValueJune 30,2023December 31,2022June 30,2023December 31,2022Kraft Heinz$13,199$12,937$11,553$13,249Occidenta

116、l13,86111,48413,17912,242Other4333,629$27,493$28,05013Notes to Consolidated Financial Statements(Continued)Note 6.Equity method investments(Continued)Our other significant equity method investments included Pilot through January 31,2023.Beginning February 1,2023,we ceased accounting for Pilot under

117、the equity method and began consolidating Pilot for financial reporting purposes.Our investment in Pilot under the equity method was$3.2 billion at December 31,2022.Other significant equity method investments also included our 50%interest in Berkadia Commercial Mortgage LLC(“Berkadia”)with Jefferies

118、 Financial Group Inc.(“Jefferies”)owning the other 50%interest.Berkadia provides capital solutions,investment sales advisory and mortgage servicing for multifamily and commercial real estate.Berkadias commercial paper borrowing capacity(currently limited to$1.5 billion)is supported by a surety polic

119、y issued by a Berkshire insurance subsidiary.Jefferies is obligated to indemnify us for one-half of any losses incurred under the policy.The carrying values of our investments in Kraft Heinz and Berkadia approximate our share of the net equity of each of these entities.The carrying value of our inve

120、stment in Occidental common stock exceeded our share of its shareholders equity as of March 31,2023 by approximately$9 billion.Based upon the limited information available to us,we concluded the excess represents goodwill.Our earnings and distributions received from equity method investments are sum

121、marized in the following table(in millions).As previously indicated,we are reporting the equity method effects for Occidental on a one-quarter lag.Thus,the earnings we recorded in 2023 related to Occidentals earnings for the fourth quarter of 2022 and first quarter of 2023.Equity method earnings att

122、ributable to Pilot were$105 million for the month ending January 31,2023,$95 million for the second quarter of 2022 and$202 million for the first six months of 2022.Equity in EarningsDistributions ReceivedSecond QuarterFirst Six MonthsSecond QuarterFirst Six Months20232022202320222023202220232022Kra

123、ft Heinz$265$71$487$277$130$130$260$260Occidental2346043661Other21882190$511$204$1,199$543$187$218$342$350Summarized consolidated financial information of Kraft Heinz follows(in millions).July 1,2023December 31,2022Assets$90,956$90,513Liabilities40,94241,643Second QuarterFirst Six Months2

124、023202220232022Sales$6,721$6,554$13,210$12,599Net earnings attributable to Kraft Heinz common shareholders1,0002651,8361,041Summarized consolidated financial information of Occidental follows(in millions).March 31,2023December 31,2022Assets$71,600$72,609Liabilities42,04142,524Quarter ending March 31

125、,2023Six months ending March 31,2023Total revenues and other income$7,258$15,584Net earnings attributable to Occidental common shareholders9832,71014Notes to Consolidated Financial Statements(Continued)Note 7.Investment and derivative contract gains(losses)Investment and derivative contract gains(lo

126、sses)in the second quarter and first six months of 2023 and 2022 are summarized as follows(in millions).Second QuarterFirst Six Months2023202220232022Investment gains(losses):Equity securities:Change in unrealized investment gains(losses)during the period on securities held at the end of the period$

127、33,046$(66,860)$63,763$(68,548)Investment gains on securities sold during the period31321,00134 33,077(66,828)64,764(68,514)Fixed maturity securities:Gross realized gains8613212Gross realized losses(25)(27)(77)(76)Other1(5)3,000(11)Investment gains(losses)33,061(66,854)67,819(68,589)Derivative contr

128、act gains(losses)(65)(308)$33,061$(66,919)$67,819$(68,897)Equity securities gains and losses include unrealized gains and losses from changes in fair values during the period on equity securities we still own,as well as gains and losses on securities we sold during the period.As reflected in the Con

129、solidated Statements of Cash Flows,we received proceeds from sales of equity securities of approximately$25.8 billion in the first six months of 2023 and$12.0 billion in the first six months of 2022.In the preceding table,investment gains and losses on equity securities sold during the period repres

130、ent the difference between the sales proceeds and the fair value of the equity securities sold at the beginning of the applicable period or,if later,the purchase date.Taxable gains and losses on equity securities sold are generally the difference between the proceeds from sales and original cost.Equ

131、ity securities sold produced taxable gains of$2.4 billion in the second quarter and$4.6 billion in the first six months of 2023 compared to taxable gains of$76 million in the second quarter of 2022 and taxable losses of$663 million in the first six months of 2022.Other investment gains in the first

132、six months of 2023 included approximately$3 billion from the remeasurement of our pre-existing 38.6%interest in Pilot through the application of acquisition accounting under GAAP.Note 8.Loans and finance receivables Loans and finance receivables are summarized as follows(in millions).June 30,2023Dec

133、ember 31,2022Loans and finance receivables before allowances and discounts$25,064$24,664Allowances for credit losses(912)(856)Unamortized acquisition discounts and points(622)(600)$23,530$23,208Loans and finance receivables are principally manufactured home loans,and to a lesser extent,commercial lo

134、ans and site-built home loans.Reconciliations of the allowance for credit losses on loans and finance receivables for the first six months of 2023 and 2022 follow(in millions).First Six Months20232022Balance at beginning of year$856$765Provision for credit losses9050Charge-offs,net of recoveries(34)

135、(12)Balance at June 30$912$80315Notes to Consolidated Financial Statements(Continued)Note 8.Loans and finance receivables(Continued)As of June 30,2023,substantially all manufactured and site-built home loans were evaluated collectively for impairment.As of June 30,2023,we considered approximately 97

136、%of these loans to be current as to payment status.A summary of performing and non-performing home loans before discounts and allowances by year of loan origination as of June 30,2023 follows(in millions).Origination Year 20232022202120202019PriorTotalPerforming$3,273$4,568$3,459$2,694$1,907$7,933$2

137、3,834Non-performing75101064482$3,280$4,573$3,469$2,704$1,913$7,977$23,916We are also a lender under commercial loan agreements,which had an aggregate principal value of approximately$1.1 billion at June 30,2023 and$1.9 billion at December 31,2022.The largest commercial loan is currently to Seritage

138、Growth Properties,with an unpaid principal balance of$550 million at June 30,2023.Our commercial loans are generally secured by real estate properties or by other assets.Note 9.Other receivables Other receivables are comprised of the following(in millions).Receivables of the railroad,utilities and e

139、nergy businesses at June 30,2023 included approximately$1.6 billion related to Pilot.June 30,2023December 31,2022Insurance and other:Insurance premiums receivable$19,700$18,395Reinsurance recoverables7,1867,106Trade receivables15,16014,510Other4,2044,154Allowances for credit losses(660)(675)$45,590$

140、43,490Railroad,utilities and energy:Trade receivables$5,228$4,182Other998754Allowances for credit losses(159)(141)$6,067$4,795Provisions for credit losses in the first six months with respect to these receivables were$278 million in 2023 and$211 million in 2022.Charge-offs,net of recoveries,in the f

141、irst six months were$280 million in 2023 and$189 million in 2022.Note 10.Inventories Inventories of our insurance and other businesses are comprised of the following(in millions).June 30,2023December 31,2022Raw materials$6,395$6,381Work in process and other3,5323,464Finished manufactured goods5,5455

142、,739Goods acquired for resale9,8239,782$25,295$25,366Inventories of our railroad,utilities and energy businesses are included in other assets and were approximately$4.3 billion at June 30,2023,of which approximately$1.9 billion was attributable to Pilot.16Notes to Consolidated Financial Statements(C

143、ontinued)Note 11.Property,plant and equipment A summary of property,plant and equipment of our insurance and other businesses follows(in millions).June 30,2023December 31,2022Land,buildings and improvements$14,695$14,761Machinery and equipment27,46426,690Furniture,fixtures and other5,2974,847 47,456

144、46,298Accumulated depreciation(26,043)(25,185)$21,413$21,113A 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 pu

145、blic utility and natural gas pipeline subsidiaries.Assets of Pilot are included in land,buildings,improvements and other within the utilities and energy section of the following table.June 30,2023December 31,2022Railroad:Land,track structure and other roadway$68,885$67,350Locomotives,freight cars an

146、d other equipment16,05116,031Construction in progress2,0091,743 86,94585,124Accumulated depreciation(18,750)(17,899)68,19567,225Utilities and energy:Utility generation,transmission and distribution systems94,35192,759Interstate natural gas pipeline assets18,60518,328Independent power plants and othe

147、r assets14,68014,650Land,buildings,improvements and other8,300Construction in progress7,6105,357 143,546131,094Accumulated depreciation(39,994)(38,051)103,55293,043$171,747$160,268Depreciation expense for the first six months of 2023 and 2022 is summarized below(in millions).First Six Months20232022

148、Insurance and other$1,158$1,127Railroad,utilities and energy3,4943,091$4,652$4,218Note 12.Equipment held for lease Equipment held for lease includes railcars,aircraft and other equipment,including over-the-road trailers,intermodal tank containers,cranes,storage units and furniture.Equipment held for

149、 lease is summarized below(in millions).June 30,2023December 31,2022Railcars$9,747$9,612Aircraft11,43810,667Other5,3475,212 26,53225,491Accumulated depreciation(10,504)(9,907)$16,028$15,58417Notes to Consolidated Financial Statements(Continued)Note 12.Equipment held for lease(Continued)Depreciation

150、expense for equipment held for lease in the first six months was$623 million in 2023 and$593 million in 2022.Fixed and variable operating lease revenues for the second quarter and first six months of 2023 and 2022 are summarized below(in millions).Second QuarterFirst Six Months2023202220232022Fixed

151、lease revenue$1,478$1,264$2,895$2,452Variable lease revenue6016231,2281,107$2,079$1,887$4,123$3,559Note 13.Goodwill and other intangible assets Reconciliations of the changes in the carrying value of goodwill for the first six months of 2023 and for the year ended December 31,2022 follow(in millions

152、).June 30,2023December 31,2022Balance at beginning of year$78,119$73,875Business acquisitions8,4134,657Other,including acquisition period remeasurements and foreign currency translation(679)(413)Balance at end of period*$85,853$78,119*Net of accumulated goodwill impairments of$11.0 billion as of Jun

153、e 30,2023 and December 31,2022.Other intangible assets are summarized below(in millions).Other intangible assets of the railroad,utilities and energy businesses are included in other assets.The net carrying value of such assets at June 30,2023 included$6.6 billion related to Pilot.June 30,2023Decemb

154、er 31,2022GrosscarryingamountAccumulatedamortizationNetcarryingvalueGrosscarryingamountAccumulatedamortizationNetcarryingvalueInsurance and other:Customer relationships$28,276$7,558$20,718$27,765$7,174$20,591Trademarks and trade names5,6268384,7885,6038224,781Patents and technology5,0603,9011,1594,9

155、433,7481,195Other4,8101,6563,1544,1501,5302,620$43,772$13,953$29,819$42,461$13,274$29,187Railroad,utilities and energy:Customer relationships and contracts$5,334$695$4,639$1,507$541$966Trademarks and trade names2,228512,Other1,093621,03119042148$8,655$808$7,847$1,914$622$1,292Intangible a

156、sset amortization expense in the first six months was$872 million in 2023 and$602 million in 2022.Intangible assets with indefinite lives were$20.5 billion as of June 30,2023 and$18.3 billion as of December 31,2022 and primarily related to certain customer relationships and trademarks and trade name

157、s.18Notes to Consolidated Financial Statements(Continued)Note 14.Unpaid losses and loss adjustment expenses A reconciliation of the changes in unpaid losses and loss adjustment expenses(“claim liabilities”),excluding liabilities under retroactive reinsurance contracts(see Note 15),for each of the si

158、x-month periods ending June 30,2023 and 2022 follows(in millions).20232022Balances at beginning of year:Gross liabilities$107,472$86,664Reinsurance recoverable on unpaid losses(5,025)(2,960)Net liabilities102,44783,704Incurred losses and loss adjustment expenses:Current accident year29,82727,427Prio

159、r accident years(1,948)(887)Total27,87926,540Paid losses and loss adjustment expenses:Current accident year(9,968)(10,085)Prior accident years(16,664)(13,820)Total(26,632)(23,905)Foreign currency effect267(568)Balances at June 30:Net liabilities103,96185,771Reinsurance recoverable on unpaid losses5,

160、0692,789Gross liabilities$109,030$88,560Our claim liabilities under property and casualty 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”

161、)claims.Incurred losses and loss adjustment expenses shown in the preceding table were recorded in earnings and related to insured 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

162、 expenses are net of reinsurance recoveries.In the first six months,we recorded net reductions of estimated ultimate liabilities for prior accident years of$1.9 billion in 2023 and$887 million in 2022,which produced corresponding reductions in incurred losses and loss adjustment expenses.These reduc

163、tions,as percentages of the net liabilities at the beginning of each year,were 1.9%in 2023 and 1.1%in 2022.We reduced estimated ultimate liabilities for prior accident years of primary insurance businesses in the first six months by$1.1 billion in 2023 and$313 million in 2022.In 2023,the reductions

164、were driven by private passenger auto claims,whereas the decreases in 2022 were primarily attributable to private passenger auto,medical professional liability and workers compensation claims,partly offset by increases with respect to other casualty claims.In the first six months,estimated ultimate

165、liabilities for prior accident years of property and casualty reinsurance businesses were reduced$883 million in 2023 and$574 million in 2022.19Notes to Consolidated Financial Statements(Continued)Note 15.Retroactive reinsurance contracts Retroactive reinsurance policies provide indemnification of l

166、osses and loss adjustment expenses of short-duration insurance contracts with respect to underlying loss events that occurred prior to the contract inception date.Reconciliations of the changes in estimated liabilities for retroactive reinsurance unpaid losses and loss adjustment expenses and incurr

167、ed losses and loss adjustment expenses to the amounts recorded in the Consolidated Statements of Earnings for each of the six-month periods ended June 30,2023 and 2022 follow(in millions).20232022Balances at beginning of year$35,415$37,855Incurred losses and loss adjustment expenses:Current year con

168、tractsPrior years contracts15(14)Total15(14)Paid losses and loss adjustment expenses(1,033)(1,008)Foreign currency effect24(157)Balances at June 30$34,421$36,676Incurred losses and loss adjustment expenses above$15$(14)Deferred charge amortization and adjustments416426Incurred losses and loss adjust

169、ment expenses included in the Consolidated Statements of Earnings$431$412In the preceding table,classifications of incurred losses and loss adjustment expenses are based on the inception dates of the contracts,which reflect when our exposure to losses began.Claims payments may commence immediately a

170、fter the contract date or,when applicable,after a contractual retention amount has been reached.Incurred losses and loss adjustment expenses in the Consolidated Statements of Earnings include changes in estimated liabilities and related deferred charge asset amortization and adjustments arising from

171、 the changes in estimated timing and amount of future loss payments.Unamortized deferred charges related to retroactive reinsurance contracts were$9.5 billion at June 30,2023 and$9.9 billion at December 31,2022.Note 16.Long-duration insurance contractsWe write periodic payment annuity and life and h

172、ealth insurance contracts,which are considered long-duration insurance contracts under GAAP.A summary of our life,annuity and health insurance benefits liabilities as of June 30,2023 and 2022,disaggregated for our two primary product categories,periodic payment annuities and life and health insuranc

173、e,follows(in millions).Other liabilities primarily consist of incurred-but-not-reported claims and claims in the course of settlement.June 30,20232022Periodic payment annuities$10,820$11,826Life and health5,5235,810Other liabilities3,2923,316$19,635$20,95220Notes to Consolidated Financial Statements

174、(Continued)Note 16.Long-duration insurance contracts(Continued)Reconciliations of our periodic payment annuity and life and health insurance benefits liabilities for the first six months of 2023 and 2022 follow(in millions).The information reflects the changes in discounted present values of expecte

175、d future policy benefits and expected future net premiums.In this context,net premiums represent the portion of expected gross premiums that are required to provide for future policy benefits and variable expenses.Periodic payment annuitiesLife and health2023202220232022Expected future policy benefi

176、ts:Balance at beginning of period$10,640$16,153$52,008$63,648Balance at beginning of period at original discount rate11,54911,26163,58460,133Impact of cash flow assumption changes10318Effect of actual from expected results23(411)248Change in benefits,net(230)85(1,346)(1,285)Interest accrual266268852

177、807Foreign currency effect83(109)100(1,645)Ending balance at original discount rate11,67011,50862,78958,576Effect of changes in discount rate assumptions(850)318(12,741)(8,191)Expected future policy benefits at June 30$10,820$11,826$50,048$50,385Expected future net premiums:Balance at beginning of p

178、eriod$46,129$55,960Balance at beginning of period at original discount rate56,53553,277Impact of cash flow assumption changes18324Effect of actual from expected results(251)90Change in premiums,net(1,222)(988)Interest accrual745701Foreign currency effect83(1,550)Ending balance at original discount r

179、ate55,90851,854Effect of changes in discount rate assumptions(11,383)(7,279)Expected future net premiums at June 30$44,525$44,575Liability for future policy benefits at June 30$10,820$11,826$5,523$5,810Reinsurance recoverables(1,549)(1,650)Liability for future policy benefits at June 30,net of reins

180、urance recoverables$10,820$11,826$3,974$4,160The undiscounted and discounted expected future gross premiums to be collected and undiscounted expected future benefits for periodic payment annuities and life and health insurance as of June 30,2023 and 2022 are summarized below(in millions).Undiscounte

181、d expected future gross premiumsDiscounted expected future gross premiumsUndiscounted expected future benefits202320222023202220232022Periodic payment annuities$31,232$31,084Life and health108,089107,64765,59964,832103,012102,305Gross premiums earned on long-duration contracts are included in insura

182、nce premiums earned and interest expense associated with long-duration insurance contracts is included as a component of life,annuity and health benefits expenses in our Consolidated Statements of Earnings.Gross premiums earned and interest expense for the first six months of 2023 and 2022 were as f

183、ollows(in millions).Gross PremiumsInterest Expense2023202220232022Periodic payment annuities$337$266$268Life and health1,6441,79310710621Notes to Consolidated Financial Statements(Continued)Note 16.Long-duration insurance contracts(Continued)The weighted average discount rates,interest accretion rat

184、es and the average contract durations as of June 30,2023 and 2022 for periodic payment annuities and life and health insurance are summarized below.June 30,20232022Periodic payment annuitiesWeighted average discount rate5.3%4.7%Weighted average accretion rate4.8%4.9%Weighted average duration18 years

185、18 yearsLife and healthWeighted average discount rate5.0%4.5%Weighted average accretion rate3.3%3.3%Weighted average duration14 years14 yearsWe also reinsure closed blocks of guaranteed minimum death and living benefits associated with variable annuity products,referred to as market risk benefits.Th

186、ese liabilities are included in other policyholder liabilities and are measured at estimated fair value under ASU 2018-12.Such liabilities were approximately$1.0 billion as of June 30,2023 and$1.25 billion as of December 31,2022.During the first six months of 2023,we reduced liability estimates by$1

187、94 million,for the effects of changes in securities markets,interest rates and other inputs used to estimate liabilities.Cash settlements during the first six months of 2023 were relatively insignificant.Note 17.Notes payable and other borrowings Notes payable and other borrowings of our insurance a

188、nd other businesses are summarized below(in millions).The weighted average interest rates and maturity date ranges are based on borrowings as of June 30,2023.WeightedAverageInterest RateJune 30,2023December 31,2022Insurance and other:Berkshire Hathaway Inc.(“Berkshire”):U.S.Dollar denominated due 20

189、25-20473.5%$3,735$6,231Euro denominated due 2024-20411.1%6,0697,344Japanese Yen denominated due 2024-20600.7%7,8507,818Berkshire Hathaway Finance Corporation(“BHFC”):U.S.Dollar denominated due 2027-20523.6%14,46014,458Great Britain Pound denominated due 2039-20592.5%2,1862,078Euro denominated due 20

190、30-20341.8%1,3581,332Other subsidiary borrowings due 2023-20514.6%4,9085,967Subsidiary short-term borrowings6.6%8231,310$41,389$46,53822Notes to Consolidated Financial Statements(Continued)Note 17.Notes payable and other borrowings(Continued)In the first six months of 2023,Berkshire repaid approxima

191、tely$4.3 billion of maturing senior notes.In April 2023,Berkshire issued 164.4 billion(approximately$1.2 billion)of senior notes.Borrowings of BHFC,a wholly owned finance subsidiary of Berkshire,consist of senior unsecured notes used to fund manufactured housing loans originated or acquired and equi

192、pment held for lease of certain subsidiaries.BHFC borrowings are fully and unconditionally guaranteed by Berkshire.Berkshire also guarantees certain debt of other subsidiaries,aggregating approximately$2.7 billion at June 30,2023.Generally,Berkshires guarantee of a subsidiarys debt obligation is an

193、absolute,unconditional and irrevocable guarantee for the full and prompt payment when due of all payment obligations.The carrying values of Berkshire and BHFC non-U.S.Dollar denominated senior notes(6.85 billion,1.75 billion and 1,137 billion par at June 30,2023)reflect the applicable exchange rates

194、 as of each balance sheet date.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 produced pre-tax gains of$555 million in the second quarter and$529 million

195、in the first six months of 2023 as compared to pre-tax gains of$1.4 billion in the second quarter and$2.1 billion in the first six months of 2022.Notes payable and other borrowings of our railroad,utilities and energy businesses are summarized below(in millions).The weighted average interest rates a

196、nd maturity date ranges are based on borrowings as of June 30,2023.WeightedAverageInterest RateJune 30,2023December 31,2022Railroad,utilities and energy:Berkshire Hathaway Energy Company(“BHE”)and subsidiaries:BHE senior unsecured debt due 2023-20534.4%$13,599$13,996Subsidiary and other debt due 202

197、3-20644.3%38,02137,639Short-term borrowings5.5%2,2431,119Pilot Travel Centers(“Pilot”)and subsidiaries due 2023-20287.0%5,789Burlington Northern Santa Fe(“BNSF”)and subsidiaries due 2023-20974.6%24,30623,452$83,958$76,206BHE subsidiary debt represents amounts issued pursuant to separate financing ag

198、reements.Substantially all of the assets of certain BHE subsidiaries are,or may be,pledged or encumbered to support or otherwise secure such debt.These borrowing arrangements generally contain various covenants,including covenants which pertain to leverage ratios,interest coverage ratios and/or debt

199、 service coverage ratios.In May 2023,a BHE subsidiary issued$1.2 billion of 5.5%first mortgage bonds due in 2054.During the first six months of 2023,BHE and its subsidiaries repaid approximately$1.4 billion of term debt.Pilots borrowings primarily represent secured syndicated loans.BNSFs borrowings

200、are primarily senior unsecured debentures.In June 2023,BNSF issued$1.6 billion of 5.2%debentures due in 2054.During the first six months of 2023,BNSF repaid approximately$700 million of term debt.As of June 30,2023,BHE,BNSF and Pilot and their subsidiaries were in compliance with all applicable debt

201、 covenants.Berkshire does not guarantee any debt,borrowings or lines of credit of BHE,BNSF,Pilot or their subsidiaries.Our subsidiaries have unused lines of credit and commercial paper capacity to support short-term borrowing programs and provide additional liquidity.Unused lines of credit were appr

202、oximately$12.0 billion at June 30,2023,which included approximately$8.6 billion related to BHE and its subsidiaries.23Notes to Consolidated Financial Statements(Continued)Note 18.Fair value measurements Our financial assets and liabilities are summarized below as of June 30,2023 and December 31,2022

203、,with fair values shown according to the fair value hierarchy(in millions).The carrying values of cash and cash equivalents,U.S.Treasury Bills,other receivables and accounts payable,accruals and other liabilities are considered to be reasonable estimates of or otherwise approximate the fair values.C

204、arryingValueFair ValueQuotedPrices(Level 1)SignificantOtherObservableInputs(Level 2)SignificantUnobservableInputs(Level 3)June 30,2023Investments in fixed maturity securities:U.S.Treasury,U.S.government corporations and agencies$9,052$9,052$9,017$35$Foreign governments11,48111,48111,170311Corporate

205、bonds1,5541,554908646Other266266266Investments in equity securities353,409353,409342,5961110,802Investments in Kraft Heinz&Occidental common stock27,06024,73224,732Loans and finance receivables23,53024,0201,09722,923Derivative contract assets(1)3553557425625Derivative contract liabilities(1)30930948

206、73188Notes payable and other borrowings:Insurance and other41,38936,10036,07129Railroad,utilities and energy83,95877,04077,040December 31,2022Investments in fixed maturity securities:U.S.Treasury,U.S.government corporations and agencies$9,802$9,802$9,733$69$Foreign governments10,32710,3279,854473Cor

207、porate bonds2,1952,1951,546649Other2,8042,8042,804Investments in equity securities308,793308,793296,610912,174Investments in Kraft Heinz&Occidental common stock24,42125,49125,491Loans and finance receivables23,20823,4281,51321,915Derivative contract assets(1)5895895647459Derivative contract liabilit

208、ies(1)2422428122112Notes payable and other borrowings:Insurance and other46,53841,96141,061900Railroad,utilities and energy76,20667,65167,651(1)Assets are included in other assets and liabilities are included in accounts payable,accruals and other liabilities.24Notes to Consolidated Financial Statem

209、ents(Continued)Note 18.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 unadjust

210、ed 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 asset

211、s 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 f

212、rom or corroborated by observable market data by correlation or other means.Pricing evaluations generally reflect discounted expected future cash flows,which incorporate yield curves for instruments with similar characteristics,such as credit ratings,estimated durations and yields for other instrume

213、nts of the issuer or entities in the same industry sector.Level 3 Inputs include unobservable inputs used in the measurement of assets and liabilities.Management is required to use its own assumptions regarding unobservable inputs because there is little,if any,market activity in the assets or liabi

214、lities and it may be unable to corroborate the related observable inputs.Unobservable inputs require management to make certain projections and assumptions about the information that would be used by market participants in valuing assets or liabilities.Reconciliations of significant assets and liabi

215、lities measured and carried at fair value on a recurring basis with the use of significant unobservable inputs(Level 3)for the six months ended June 30,2023 and 2022 follow(in millions).Balance atbeginningof yearGains(losses)included in earningsAcquisitions,dispositionsandsettlementsTransfers out of

216、 Level 3Balance at June 30Investments in equity securities:2023$12,169$(86)$(1,286)$10,797202211,48045511,935Quantitative information as of June 30,2023 for the significant assets and liabilities measured and carried at fair value on a recurring basis with the use of significant unobservable inputs(

217、Level 3)follows(dollars in millions).FairValuePrincipal ValuationTechniquesUnobservableInputsWeightedAverageInvestments in equity securities:Preferred stock$8,994Discounted cash flowExpected duration6 years Discounts for liquidity and subordination372 bpsCommon stock warrants1,803Warrant pricing mod

218、elExpected duration6 years Volatility40%Investments in equity securities in the preceding table include our investments in certain preferred stock and common stock warrants that do not have readily determinable market values as defined under GAAP.These investments are private placements with contrac

219、tual terms that restrict transfers and currently prevent us from economically hedging our investments.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 liquidity and subordination in

220、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.25Notes to Consolidated Financial Statements(Continued)Note 19.Common stock Chang

221、es in Berkshires issued,treasury and outstanding common stock during the first six months of 2023 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)Class B,$0.0033 Par V

222、alue(3,225,000,000 shares authorized)IssuedTreasuryOutstandingIssuedTreasuryOutstandingBalances at December 31,2022651,450(59,886)591,5641,509,969,352(207,715,276)1,302,254,076Conversions of Class A to Class B common stock(9,871)(9,871)14,806,50014,806,500Treasury stock acquired(6,145)(6,145)(9,071,

223、308)(9,071,308)Balances at June 30,2023641,579(66,031)575,5481,524,775,852(216,786,584)1,307,989,268Each Class A common share is entitled to one vote per share.Class B common stock possesses dividend and distribution rights equal to one-fifteen-hundredth(1/1,500)of such rights of Class A common stoc

224、k.Each Class B common share 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 of Class A common stock is convertible

225、,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 were 1,447,541 shares outstanding as of June 30,2023 and 1,459,733 shares outstanding as of December 31,2022.Sinc

226、e we have two classes of common stock,we provide earnings per share data on the Consolidated Statements of Earnings for average equivalent Class A shares outstanding and average equivalent Class B shares outstanding.Class B shares are economically equivalent to one-fifteen-hundredth(1/1,500)of a Cla

227、ss 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 the average

228、 Class A shares outstanding.Berkshires common stock repurchase program permits Berkshire to repurchase its shares any time that Warren Buffett,Berkshires Chairman of the Board and Chief Executive Officer,and Charlie Munger,Vice Chairman of the Board,believe that the repurchase price is below Berkshi

229、res intrinsic value,conservatively determined.The program continues to allow share repurchases in the open market or through privately negotiated transactions and does not specify a maximum number of shares to be repurchased.However,repurchases will not be made if they would reduce the total value o

230、f Berkshires 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.Note 20.Income taxes Our c

231、onsolidated effective income tax rates were 20.3%in the second quarter and 20.2%in the first six months of 2023 compared to 21.8%in the second quarter and 22.4%in the first six months of 2022.Our effective income tax rate normally reflects recurring benefits from dividends-received deductions applic

232、able to investments in certain equity securities and production tax credits related to wind-powered electricity generation placed in service in the U.S.Our periodic effective income tax rate will also vary due to the changes in mix of pre-tax earnings,including investment gains or losses with respec

233、t to our investments in equity securities,the amount of non-deductible goodwill impairment charges and other expenses and the underlying income tax rates applicable in the various taxing jurisdictions,and enacted changes thereto.26Notes to Consolidated Financial Statements(Continued)Note 21.Accumula

234、ted other comprehensive income A summary of the net changes in after-tax accumulated other comprehensive income attributable to Berkshire Hathaway shareholders for the six months ending June 30,2023 and 2022 follows(in millions).Unrealizedgains(losses)on investmentsForeign currency translationLong-d

235、uration insurance contractsDefined benefit pension plansOtherTotalFirst six months of 2023Beginning of year as previously reported$(187)$(6,140)$(552)$288$(6,591)Adoption of ASU 2018-12(2)1,5411,539Beginning balance as revised(187)(6,142)1,541(552)288(5,052)Other comprehensive income1745927141(66)81

236、2Balance at end of period$(13)$(5,550)$1,612$(511)$222$(4,240)First six months of 2022 Beginning of year as previously reported$369$(4,092)$(347)$43$(4,027)Adoption of ASU 2018-12(4,096)(4,096)Beginning balance as revised369(4,092)(4,096)(347)43(8,123)Other comprehensive income(352)(1,969)4,56627148

237、2,420Balance at end of period$17$(6,061)$470$(320)$191$(5,703)Note 22.Supplemental cash flow information A summary of supplemental cash flow information is presented in the following table(in millions).First Six Months20232022Cash paid during the period for:Income taxes$2,962$1,951Interest:Insurance

238、 and other725567Railroad,utilities and energy1,8571,564Non-cash investing and financing activities:Liabilities assumed in connection with business acquisitions10,81521Note 23.Contingencies and commitments We are parties in a variety of legal actions that routinely arise out of the normal course of b

239、usiness,including legal actions seeking to establish liability directly through insurance contracts or indirectly through reinsurance contracts issued by Berkshire subsidiaries.Plaintiffs occasionally seek punitive or exemplary damages.Generally,we do not believe that such normal and routine litigat

240、ion 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 currently believe that any liability that

241、 may arise as a result of other pending legal actions will not have a material effect on our consolidated financial condition or results of operations.PacifiCorp,a wholly owned subsidiary of Berkshires 92%owned subsidiary,Berkshire Hathaway Energy Company(“BHE”),operates as a regulated electric util

242、ity in Oregon and other Western states.In September 2020,a severe weather event resulting in high winds,low humidity and warm temperatures contributed to several major wildfires(the“2020 Wildfires”),which resulted in real and personal property and natural resource damage,personal injuries and loss o

243、f life and widespread power outages in Oregon and Northern California.The wildfires spread across certain parts of PacifiCorps service territory and surrounding areas across multiple counties in Oregon and California,including Siskiyou County,California;Jackson County,Oregon;Douglas County,Oregon;Ma

244、rion County,Oregon;Lincoln County,Oregon;and Klamath County,Oregon,burning over 500,000 acres in aggregate.Third-party reports for these wildfires indicate over 2,000 structures destroyed,including residences;several structures damaged;multiple individuals injured;and several fatalities.27Notes to C

245、onsolidated Financial Statements(Continued)Note 23.Contingencies and commitments(Continued)Investigations into the cause and origin of each wildfire are complex and ongoing and being conducted by various entities,including the U.S.Forest Service,the California Public Utilities Commission,the Oregon

246、Department of Forestry,the Oregon Department of Justice,PacifiCorp and various experts engaged by PacifiCorp.Numerous lawsuits on behalf of plaintiffs related to the 2020 Wildfires have been filed in Oregon and California,including a class action complaint against PacifiCorp that was filed in 2020,c

247、aptioned Jeanyne James et al.v.PacifiCorp et al.,in Multnomah County Circuit Court,Oregon(the“James case”).Amounts sought in the lawsuits,complaints and demands filed in Oregon total over$7 billion,excluding any doubling or trebling of damages included in the complaints.Generally,the complaints file

248、d in California do not specify damages sought and are not included in this amount.Final determinations of liability will only be made following the completion of comprehensive investigations,litigation and similar processes.Several insurance carriers have filed subrogation complaints in Oregon and C

249、alifornia with allegations similar to those made in the aforementioned lawsuits.Additionally,certain governmental agencies have informed PacifiCorp that they are contemplating filing actions in connection with certain of the Oregon 2020 Wildfires.In June 2023,a jury issued a verdict for the 17 named

250、 plaintiffs in the James case.The plaintiffs seek damages for economic losses,non-economic losses,including mental suffering,emotional distress,personal injury and loss of life,punitive damages,other damages and attorneys fees.PacifiCorp intends to vigorously appeal the jurys findings and damage awa

251、rds,including whether the case can proceed as a class action.The appeals process and further actions could take several years.Based on the facts and circumstances available to us as of the date of this filing,which includes the status of the verdict in the James case with respect to the 17 named pla

252、intiffs,other litigation and recent settlements,PacifiCorp has accrued cumulative estimated pre-tax probable losses associated with the 2020 Wildfires of$1,018 million through June 30,2023,or$608 million net of probable insurance recoveries.PacifiCorps cumulative accrual includes estimates of probab

253、le losses for fire suppression costs,real and personal property damages,natural resource damages for certain areas and non-economic damages such as personal injury damages and loss of life damages that are considered probable of being incurred and that it is reasonably able to estimate at this time.

254、For certain aspects of the 2020 Wildfires for which loss is considered probable,information necessary to reasonably estimate the potential losses,such as those related to certain areas of natural resource damages,is not currently available.It is reasonably possible PacifiCorp will incur significant

255、additional losses beyond the amounts currently accrued;however,we are currently unable to reasonably estimate the range of possible additional losses that could be incurred due to the number of properties and parties involved,including claimants in the class to the James case,the variation in those

256、types of properties and lack of available details and the ultimate outcome of legal actions.On July 10,2023,BHE announced that it had executed an agreement to acquire an additional 50%interest in Cove Point LNG,LP,which would increase its interest to 75%.The transaction is valued at$3.3 billion and

257、is subject to applicable regulatory approvals.28Notes to Consolidated Financial Statements(Continued)Note 24.Revenues from contracts with customers The following tables summarize customer contract revenues disaggregated by reportable segment and the source of the revenue for the second quarter and f

258、irst six months of 2023 and 2022(in millions).Revenues from Pilot in 2023 are for the five months ending June 30,2023.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

259、and leasing revenues.ManufacturingMcLaneServiceandRetailingBNSFBerkshireHathawayEnergyPilotInsurance,Corporateand otherTotalThree months ending June 30,2023Manufactured products:Industrial and commercial products$7,221$54$7,275Building products5,1785,178Consumer products4,3434,343Grocery and conveni

260、ence store distribution7,5357,535Food and beverage distribution4,9024,902Auto sales2,7892,789Other retail and wholesale distribution8144,1386815,633Service3472131,3905,7911,217889,046Electricity,natural gas and fuel4,77913,90318,682Total17,90312,6508,3715,7915,99614,67265,383Other revenues1,171471,7

261、38173546123,73227,120$19,074$12,697$10,109$5,808$6,350$14,733$23,732$92,503Six months ending June 30,2023Manufactured products:Industrial and commercial products$14,450$119$14,569Building products9,9369,936Consumer products8,3788,378Grocery and convenience store distribution15,32815,328Food and beve

262、rage distribution9,6649,664Auto sales5,3545,354Other retail and wholesale distribution1,6138,3681,10311,084Service7014972,71611,7762,02810917,827Electricity,natural gas and fuel10,07022,91832,988Total35,07825,48916,55711,77612,09824,130125,128Other revenues2,261893,454336919946,14152,768$37,339$25,5

263、78$20,011$11,809$12,789$24,229$46,141$177,89629Notes to Consolidated Financial Statements(Continued)Note 24.Revenues from contracts with customers(Continued)ManufacturingMcLaneServiceandRetailingBNSFBerkshireHathawayEnergyPilotInsurance,Corporateand otherTotalThree months ending June 30,2022Manufact

264、ured products:Industrial and commercial products$6,142$48$6,190Building products5,9705,970Consumer products5,5095,509Grocery and convenience store distribution7,9797,979Food and beverage distribution5,0025,002Auto sales2,6752,675Other retail and wholesale distribution8184,2655,083Service3022481,0786

265、,5961,5619,785Electricity and natural gas4,7404,740Total18,74113,2298,0666,5966,30152,933Other revenues995331,5271623920,45823,268$19,736$13,262$9,593$6,612$6,540$20,458$76,201Six months ending June 30,2022Manufactured products:Industrial and commercial products$12,074$97$12,171Building products11,3

266、8911,389Consumer products10,60210,602Grocery and convenience store distribution15,68515,685Food and beverage distribution9,5649,564Auto sales5,2025,202Other retail and wholesale distribution1,5408,4409,980Service5664622,08412,5272,67318,312Electricity and natural gas9,4549,454Total36,17125,71115,823

267、12,52712,127102,359Other revenues1,950652,8612942839,35244,685$38,121$25,776$18,684$12,556$12,555$39,352$147,044A 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 June

268、 30,2023 and the timing of when the performance obligations are expected to be satisfied follows(in millions).Less than12 monthsGreater than12 monthsTotalElectricity,natural gas and fuel$3,390$20,764$24,154Other sales and service contracts3,3775,2588,63530Notes to Consolidated Financial Statements(C

269、ontinued)Note 25.Business segment data Our operating businesses include a large and diverse group of insurance,manufacturing,service and retailing businesses.We organize our reportable business segments in a manner that reflects how management views those business activities.Certain businesses are g

270、rouped together for segment reporting based upon similar products or product lines and marketing,selling and distribution characteristics,even though those business units are operated under separate local management.We acquired control of Pilot Travel Centers(“Pilot”)on January 31,2023.Pilots revenu

271、es,costs and earnings are included in our Consolidated Financial Statements,and Pilot is considered a reportable segment beginning February 1,2023.In this presentation,the revenues and pre-tax earnings of the Pilot segment are for the five months ending June 30,2023.Previously,our earnings from Pilo

272、t were determined under the equity method and are included in earnings from equity method investments.Revenues and earnings(loss)before income taxes by segment for the second quarter and first six months of 2023 and 2022 were as follows(in millions).Second QuarterFirst Six Months2023202220232022Reve

273、nues of Operating BusinessesInsurance:Underwriting:GEICO$9,714$9,807$19,340$19,361Berkshire Hathaway Primary Group4,2333,3138,1946,431Berkshire Hathaway Reinsurance Group6,6144,96112,8239,777Investment income2,9182,2845,3103,648Total insurance23,47920,36545,66739,217BNSF5,8286,64011,84712,608Berkshi

274、re Hathaway Energy(“BHE”)6,3626,54512,81312,565Pilot Travel Centers(“Pilot”)14,75424,262Manufacturing19,10219,77237,39138,193McLane12,88313,26225,94225,777Service and retailing10,1419,61720,07218,732 92,54976,201177,994147,092Reconciliation of segments to consolidated amountCorporate,eliminations an

275、d other(46)(98)(48)$92,503$76,201$177,896$147,044Second QuarterFirst Six Months2023202220232022Earnings(Loss)Before Income Taxes of Operating BusinessesInsurance:Underwriting:GEICO$514$(487)$1,217$(665)Berkshire Hathaway Primary Group272242540334Berkshire Hathaway Reinsurance Group8271,1411,0581,442

276、Investment income2,9122,2835,2973,644Total insurance4,5253,1798,1124,755BNSF1,6152,1513,2643,960BHE6245918471,304Pilot186322Manufacturing3,1033,0285,7145,852McLaneService and retailing1,2621,1992,4832,334 11,44410,22420,98418,363Reconciliation of segments to consolidated amountInvestment

277、and derivative gains(losses)33,061(66,919)67,819(68,897)Interest expense,not allocated to segments(103)(100)(217)(204)Equity method investments5112041,199543Corporate,eliminations and other5221,2834021,844$45,435$(55,308)$90,187$(48,351)31Item 2.Managements Discussion and Analysis of Financial Condi

278、tion and Results of Operations Results of Operations Net earnings(loss)attributable to Berkshire Hathaway shareholders are disaggregated in the table that follows.Amounts are after deducting income taxes and exclude earnings attributable to noncontrolling interests(in millions).Second QuarterFirst S

279、ix Months2023202220232022Insurance underwriting$1,247$715$2,158$882Insurance investment income2,3691,9064,3383,076BNSF1,2641,6642,5113,035Berkshire Hathaway Energy(“BHE”)7857891,2011,564Pilot Travel Centers(“Pilot”)114197Manufacturing,service and retailing3,3893,2496,3716,274Non-controlled businesse

280、s*5351821,103464Investment and derivative contract gains(losses)25,869(53,038)53,308(54,618)Other3409122291,282Net earnings(loss)attributable to Berkshire Hathaway shareholders$35,912$(43,621)$71,416$(38,041)*Includes certain businesses in which Berkshire had between a 20%and 50%ownership interest.T

281、hrough our subsidiaries,we engage in numerous diverse business activities.We manage our operating businesses on an unusually decentralized basis.There are few centralized or integrated business functions.Our senior corporate management team participates in and is ultimately responsible for significa

282、nt 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.To varying degrees,our op

283、erating businesses have been impacted by government and private sector actions taken to mitigate the adverse economic effects of the COVID-19 virus and its variants as well as by the development of global geopolitical conflicts,supply chain disruptions and government actions to slow inflation.We can

284、not reliably predict the future economic effects of these events on our businesses.Insurance underwriting generated earnings of$1.25 billion in the second quarter and$2.16 billion in the first six months of 2023 versus$715 million in the second quarter and$882 million in the first six months of 2022

285、.Earnings in 2022 reflect increases of$134 million in the second quarter and$254 million in the first six months from the previously reported amounts attributable to the adoption of ASU 2018-12 on January 1,2023.Earnings from insurance investment income increased$463 million in the second quarter an

286、d$1.3 billion in the first six months of 2023 compared to 2022.The increases were primarily due to higher short-term interest rates,partly offset by lower dividend income.Earnings of BNSF declined 24.0%in the second quarter and 17.3%in the first six months of 2023 compared to 2022.The decreases were

287、 primarily attributable to lower overall freight volumes and higher non-fuel operating costs,offset by lower fuel costs.After-tax earnings of BHE were essentially unchanged in the second quarter and declined 23.2%in the first six months of 2023 compared to 2022.The earnings decline in the first six

288、months reflected lower earnings from the U.S.regulated utilities,other energy businesses and real estate brokerage businesses.As disclosed in Note 3 to the accompanying Consolidated Financial Statements,we increased our ownership in Pilot from 38.6%to 80%on January 31,2023 and we are consolidating P

289、ilots results beginning February 1,2023.In 2022 and through January 31,2023,earnings from Pilot on our 38.6%interest were determined under the equity method and are included in earnings from non-controlled businesses in the preceding table.Earnings from our manufacturing,service and retailing busine

290、sses increased 4.3%in the second quarter and 1.5%in the first six months of 2023 versus 2022.While earnings for certain industrial products manufacturers and services businesses improved versus 2022,earnings of several of our building products,consumer products and retailing businesses deteriorated.

291、Investment and derivative contract gains(losses)in each period of 2023 and 2022 predominantly derived from our investments in equity securities and included significant net unrealized gains and losses from market price changes.We believe that investment gains and losses on investments in equity secu

292、rities,whether realized from dispositions or unrealized from changes in market prices,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 s

293、ignificant volatility in our periodic earnings.Investment and derivative contract gains(losses)also included an after-tax non-cash remeasurement gain of$2.4 billion in the first quarter of 2023 related to our previously held 38.6%interest in Pilot through the application of the acquisition accountin

294、g method.32Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations Results of Operations(Continued)Other earnings included after-tax foreign exchange rate gains of$465 million in the second quarter and$448 million in the first six months of 2023 and$1.1 billion in

295、 the second quarter and$1.6 billion in the first six months of 2022.These gains related to the non-U.S.Dollar denominated debt issued by Berkshire and its U.S.-based finance subsidiary,Berkshire Hathaway Finance Corporation(“BHFC”).InsuranceUnderwriting Our management views our insurance businesses

296、as possessing two distinct activities underwriting and investing.Underwriting decisions are the responsibility of the unit managers,while investing decisions are the responsibility of Berkshires Chairman and CEO,Warren E.Buffett,and Berkshires corporate investment managers.Accordingly,we evaluate th

297、e economic 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 unreali

298、zed,as non-operating.We believe that such gains and losses are not meaningful in understanding the quarterly or annual operating results of our insurance businesses.The timing and magnitude of catastrophe losses can produce significant volatility in our periodic underwriting results,particularly wit

299、h respect to our reinsurance businesses.We currently consider pre-tax incurred losses exceeding$150 million from a current year catastrophic event to be significant.Significant catastrophe events in the first six months of 2023 were a cyclone and floods in New Zealand and floods in Australia in 2022

300、.Each of these events occurred in the first quarter of the year.Changes in estimates for unpaid losses and loss adjustment expenses,including amounts established for occurrences in prior years,can also significantly affect our periodic underwriting results.Unpaid loss estimates,including estimates u

301、nder retroactive reinsurance contracts,were approximately$143 billion as of June 30,2023.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

302、subsidiaries due to foreign currency exchange rate fluctuations.We provide primary insurance and reinsurance products covering property and casualty risks,as well as life and health risks.Our insurance and reinsurance businesses are GEICO,Berkshire Hathaway Primary Group(“BH Primary”)and Berkshire H

303、athaway Reinsurance Group(“BHRG”).Berkshire acquired Alleghany Corporation(“Alleghany”)on October 19,2022.Alleghany operates a property and casualty insurance business through its subsidiaries,RSUI Group Inc.and CapSpecialty,Inc.(“RSUI and CapSpecialty”or“Alleghany Insurance”),and a reinsurance busi

304、ness through Transatlantic Reinsurance Company and affiliates(“TransRe Group”).Underwriting results of Alleghany Insurance are included in BH Primary and underwriting results of TransRe Group are included in BHRG.We strive to produce pre-tax underwriting earnings(premiums earned less insurance losse

305、s/benefits incurred and underwriting expenses)over the long term in all business categories,except for BHRGs retroactive reinsurance and periodic payment annuity contracts businesses.Time-value-of-money is an important element in establishing prices for policies written by these businesses.We normal

306、ly receive all premiums at the contract inception date,which are immediately available for investment.Ultimate claim payments can extend for decades and are expected to exceed premiums,producing underwriting losses over the claim settlement periods,primarily through deferred charge asset amortizatio

307、n and discounted liability accretion charges.Underwriting results of our insurance businesses are summarized below(dollars in millions).BHRGs pre-tax underwriting earnings for the second quarter and first six months of 2022 increased$174 million and$319 million,respectively,from pre-tax earnings pre

308、viously reported due to the adoption of ASU 2018-12.Second QuarterFirst Six Months2023202220232022Pre-tax underwriting earnings(loss):GEICO$514$(487)$1,217$(665)Berkshire Hathaway Primary Group272242540334Berkshire Hathaway Reinsurance Group8271,1411,0581,442Pre-tax underwriting earnings1,6138962,81

309、51,111Income taxes and noncontrolling interests366181657229Net underwriting earnings$1,247$715$2,158$882Effective income tax rate22.6%20.1%23.4%20.6%33Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations InsuranceUnderwriting(Continued)GEICO GEICO primarily wri

310、tes private passenger automobile insurance,offering coverages to insureds in all 50 states and the District of Columbia.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 GEI

311、COs underwriting results follows(dollars in millions).Second QuarterFirst Six Months2023202220232022Amount%Amount%Amount%Amount%Premiums written$9,449$9,416$19,509$19,681Premiums earned$9,714100.0$9,807100.0$19,340100.0$19,361100.0Losses and loss adjustment expenses8,19284.39,10592.816,18483.717,649

312、91.2Underwriting expenses1,00810.41,18912.21,93910.02,37712.2Total losses and expenses9,20094.710,294105.018,12393.720,026103.4Pre-tax underwriting earnings(loss)$514$(487)$1,217$(665)GEICOs pre-tax underwriting earnings in the first six months of 2023 reflected higher average premiums per auto poli

313、cy,a reduction in advertising costs,as well as reductions in prior accident years claims estimates.Premiums written and earned were substantially unchanged in the second quarter and first six months of 2023 compared to 2022.Premiums in 2023 reflected rate increases during the past 12 months that pro

314、duced higher average premiums per auto policy(16.3%),as well as a 2.7 million decrease(14.4%)in policies-in-force over that period.GEICO significantly reduced advertising in 2022 and 2023,which contributed to the reduction in policies-in-force.Losses and loss adjustment expenses declined$913 million

315、(10.0%)in the second quarter and$1.5 billion(8.3%)in the first six months of 2023 compared to 2022.GEICOs loss ratio(losses and loss adjustment expenses to premiums earned)was 84.3%in the second quarter and 83.7%in the first six months of 2023,decreases of 8.5 percentage points and 7.5 percentage po

316、ints,respectively,compared to the same periods in 2022.These decreases reflected the impact of higher average premiums per auto policy,additional reductions in prior accident years claims estimates,the reduction in policies-in-force and lower claims frequencies,partially offset by increases in avera

317、ge claims severities.Losses and loss adjustment expenses in the first six months of 2023 included reductions in the ultimate loss estimates for prior accident years claims of$888 million compared to$207 million in 2022.The reduction in 2023 reflected decreased estimates across several coverages,whil

318、e the reductions in 2022 were primarily attributable to bodily and personal injury coverages,partially offset by increases for collision and property damage coverages.Claims frequencies in the first six months of 2023 were lower for property damage(seven to eight percent range)and collision(seven to

319、 eight percent range)coverages,while claims frequencies increased for bodily injury(three to four percent range)and personal injury(one to two percent range)coverages.Average claims severities in the first six months of 2023 were higher for property damage(twenty-one to twenty-three percent range),c

320、ollision(seven to nine percent range)and bodily injury(seven to nine percent range)coverages.Underwriting expenses declined$181 million(15.2%)in the second quarter and$438 million(18.4%)in the first six months of 2023 compared to 2022.GEICOs expense ratio(underwriting expense to premiums earned)was

321、10.4%in the second quarter and 10.0%in the first six months of 2023,decreases of 1.8 percentage points and 2.2 percentage points,respectively,compared to the same periods in 2022.These decreases were driven by the reduction in advertising expenses.Berkshire Hathaway Primary Group The Berkshire Hatha

322、way Primary Group consists of several independently managed businesses that provide a variety of primarily commercial insurance solutions,including healthcare professional liability,workers compensation,automobile,general liability,property and specialty coverages for small,medium and large clients.

323、BH Primarys 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”),Berkshire Hathaway Direct Insurance Company(“BH Direct”)and

324、 U.S.Liability Insurance Company(“USLI”).This group also includes Alleghany Insurance beginning October 19,2022.34Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations InsuranceUnderwriting(Continued)Berkshire Hathaway Primary Group(Continued)A summary of BH Pri

325、marys underwriting results follows(dollars in millions).Second QuarterFirst Six Months2023202220232022Amount%Amount%Amount%Amount%Premiums written$4,757$3,504$8,915$6,896Premiums earned$4,233100.0$3,313100.0$8,194100.0$6,431100.0Losses and loss adjustment expenses2,86167.62,24367.75,51767.34,51770.2

326、Underwriting expenses1,10026.082825.02,13726.11,58024.6Total losses and expenses3,96193.63,07192.77,65493.46,09794.8Pre-tax underwriting earnings$272$242$540$334Premiums written increased$1.3 billion(35.8%)in the second quarter and$2.0 billion(29.3%)in the first six months of 2023 compared to 2022.T

327、he increases were primarily due to the inclusion of Alleghany Insurance($746 million in the second quarter and$1.3 billion in the first six months),as well as comparative increases from BH Specialty and BH Direct.Losses and loss adjustment expenses increased$618 million(27.6%)in the second quarter a

328、nd$1.0 billion(22.1%)in the first six months of 2023 compared to 2022.The loss ratio decreased 0.1 percentage points in the second quarter and 2.9 percentage points in the first six months of 2023 compared to 2022,reflecting changes in business mix(including the impact of Alleghany Insurance),lower

329、incurred losses from current year catastrophes and increased reductions in loss estimates for prior years events.Incurred losses from significant catastrophes occurring in the first six months were$36 million in 2023 and$75 million in 2022.Incurred losses and loss adjustment expenses in the first si

330、x months reflected net reductions in estimated ultimate liabilities for prior accident years claims of$177 million in 2023 and$106 million in 2022.BH Primary insurers write significant levels of workers compensation,commercial and professional liability insurance and the related claim costs may be s

331、ubject to high severity and long claim-tails.Ultimate claims liabilities could be greater than anticipated due to a variety of factors,including from adverse legal and judicial rulings.Underwriting expenses increased$272 million(32.9%)in the second quarter and$557 million(35.3%)in the first six mont

332、hs of 2023 compared to 2022.The expense ratio increased 1.0 percentage points in the second quarter and 1.5 percentage points in the first six months of 2023 compared to 2022.The increases were primarily attributable to changes in business mix,including the effects of the Alleghany Insurance acquisi

333、tion.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,General Reinsurance AG and,beginning October 19,2022,TransRe Group.We also writ