Berkshire Hathaway Inc 8-K, filed Mar 1, 2021
Berkshire Hathaway Inc (BRK-B)
About this 8-K
Berkshire Hathaway Inc filed this 8-K on March 1, 2021, reporting on events of February 27, 2021.
Items reported
- Item 2.02: Financial results
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| ITEM 2.02 | Results of Operations and Financial Condition. |
On February 27, 2021, Berkshire Hathaway Inc. issued a press release announcing the Company’s earnings for the fourth quarter and year ended December 31, 2020. A copy of this press release is furnished with this report as an exhibit to this Form 8-K.
| ITEM 9.01 | Financial Statements and Exhibits |
| Exhibit 99.1 | Berkshire Hathaway Inc. Earnings Release Dated February 27, 2021. | |
| Exhibit 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| March 1, 2021 | BERKSHIRE HATHAWAY INC. | |||||
| /s/ Marc D. Hamburg | ||||||
| By: Marc D. Hamburg | ||||||
| Senior Vice President and Chief Financial Officer | ||||||
Exhibit 99.1
BERKSHIRE HATHAWAY INC.
NEWS RELEASE
| FOR IMMEDIATE RELEASE | February 27, 2021 |
Omaha, NE (BRK.A; BRK.B) –
Berkshire’s operating results for the fourth quarter and full year of 2020 and 2019 are summarized in the following paragraphs. However, we urge investors and reporters to read our 2020 Annual Report, which has been posted at www.berkshirehathaway.com. The limited information that follows in this press release is not adequate for making an informed investment judgment.
Earnings of Berkshire Hathaway Inc. and its consolidated subsidiaries for the fourth quarter and full year of 2020 and 2019 are summarized below. Earnings are stated on an after-tax basis. (Dollar amounts are in millions, except for per share amounts).
| Fourth Quarter | Full Year | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Net earnings attributable to Berkshire shareholders |
$ | 35,835 | $ | 29,159 | $ | 42,521 | $ | 81,417 | ||||||||
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| Net earnings (loss) includes: |
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| Investment and derivative gains/losses – |
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| Investments (1) |
$ | 30,446 | $ | 24,527 | $ | 31,717 | $ | 56,272 | ||||||||
| Derivatives |
380 | 212 | (126 | ) | 1,173 | |||||||||||
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| 30,826 | 24,739 | 31,591 | 57,445 | |||||||||||||
| Impairment of intangible assets (2) |
(12 | ) | — | (10,992 | ) | — | ||||||||||
| Operating earnings |
5,021 | 4,420 | 21,922 | 23,972 | ||||||||||||
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| Net earnings attributable to Berkshire shareholders |
$ | 35,835 | $ | 29,159 | $ | 42,521 | $ | 81,417 | ||||||||
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| Net earnings per average equivalent Class A Share |
$ | 23,015 | $ | 17,909 | $ | 26,668 | $ | 49,828 | ||||||||
| Net earnings per average equivalent Class B Share |
$ | 15.34 | $ | 11.94 | $ | 17.78 | $ | 33.22 | ||||||||
| Average equivalent Class A shares outstanding |
1,557,026 | 1,628,138 | 1,594,469 | 1,633,946 | ||||||||||||
| Average equivalent Class B shares outstanding |
2,335,539,124 | 2,442,207,505 | 2,391,703,454 | 2,450,919,020 | ||||||||||||
Note: Per share amounts for the Class B shares are 1/1,500th of those shown for the Class A.
| (1) | Generally Accepted Accounting Principles (“GAAP”) require that we include the changes in unrealized gains/losses of our equity security investments as a component of investment gains/losses in our earnings statements. In the table above, investment gains/losses in 2020 include gains of $24.5 billion in the fourth quarter and $26.8 billion in the full year and in 2019 include gains of $23.6 billion in the fourth quarter and $53.7 billion for the full year due to changes during the fourth quarter and the full year in the unrealized gains that existed in our equity security investment holdings. Investment gains/losses in 2020 also include after-tax realized gains on sales of investments of $4.4 billion during the fourth quarter and $4.9 million during the full year. In 2019, investment gains/losses include after-tax realized gains of $1.0 billion during the fourth quarter and $2.6 billion during the full year. |
The amount of investment gains/losses in any given quarter is usually meaningless and delivers figures for net earnings per share that can be extremely misleading to investors who have little or no knowledge of accounting rules.
| (2) | Impairments of intangible assets in 2020 include charges of $9.8 billion recorded in the second quarter attributable to impairments of goodwill and certain identifiable intangible assets that were recorded in connection with Berkshire’s acquisition of Precision Castparts Corp. in 2016. After-tax impairments of intangible assets in 2019 were $435 million and are included in operating earnings. |
An analysis of Berkshire’s operating earnings follows (dollar amounts are in millions).
| Fourth Quarter | Full Year | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Insurance-underwriting |
$ | (299 | ) | $ | (857 | ) | $ | 657 | $ | 325 | ||||||
| Insurance-investment income |
1,270 | 1,443 | 5,039 | 5,530 | ||||||||||||
| Railroad, utilities and energy |
1,995 | 1,874 | 8,252 | 8,321 | ||||||||||||
| Other businesses |
2,467 | 2,230 | 8,300 | 9,372 | ||||||||||||
| Other |
(412 | ) | (270 | ) | (326 | ) | 424 | |||||||||
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| Operating earnings |
$ | 5,021 | $ | 4,420 | $ | 21,922 | $ | 23,972 | ||||||||
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Approximately $9 billion was used to purchase shares during the fourth quarter bringing the total for the year to approximately $25 billion. On December 31, 2020, there were 1,543,960 Class A equivalent shares outstanding. Insurance float (the net liabilities we assume under insurance contracts) was approximately $138 billion at December 31, 2020, an increase of $9 billion since yearend 2019.
Use of Non-GAAP Financial Measures
This press release includes certain non-GAAP financial measures. The reconciliations of such measures to the most comparable GAAP figures in accordance with Regulation G are included herein.
Berkshire presents its results in the way it believes will be most meaningful and useful, as well as most transparent, to the investing public and others who use Berkshire’s financial information. That presentation includes the use of certain non-GAAP financial measures. In addition to the GAAP presentations of net earnings, Berkshire shows operating earnings defined as net earnings exclusive of investment and derivative gains/losses and impairments of goodwill and intangible assets.
Although the investment of insurance and reinsurance premiums to generate investment income and investment gains or losses is an integral part of Berkshire’s operations, the generation of investment gains or losses is independent of the insurance underwriting process. Moreover, as previously described, under applicable GAAP accounting requirements, we are now required to include the changes in unrealized gains/losses of our equity security investments as a component of investment gains/losses in our periodic earnings statements. In sum, investment gains/losses for any particular period are not indicative of quarterly business performance.
About Berkshire
Berkshire Hathaway and its subsidiaries engage in diverse business activities including insurance and reinsurance, utilities and energy, freight rail transportation, manufacturing, retailing and services. Common stock of the company is listed on the New York Stock Exchange, trading symbols BRK.A and BRK.B.
Cautionary Statement
Certain statements contained in this press release are “forward looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not guaranties of future performance and actual results may differ materially from those forecasted.
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Contact
Marc D. Hamburg
402-346-1400