Berkshire Hathaway (BRK-B) 10-Q 7 Aug 09 2009 Q2 Quarterly report Financial data

Document Information

Document Information
	6 Months Ended Jun. 30, 2009
Document information
Document type	10-Q
Amendment flag	false
Document period end date	2009-06-30

Entity Information

Entity Information (USD $)
	6 Months Ended Jun. 30, 2009	Jun. 30, 2008	Jul. 31, 2009 Class A	Jul. 31, 2009 Class B
Entity Information
Entity registrant name	Berkshire Hathaway Inc.
Entity central index key	0001067983
Current fiscal year end date	--12-31
Entity well-known seasoned issuer	Yes
Entity voluntary filers	No
Entity current reporting status	Yes
Entity filer category	Large Accelerated Filer
Entity public float		$126,497,000,000
Entity Listing items
Entity common stock, shares outstanding			1,057,259	14,834,062

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (USD $)
In Millions	Jun. 30, 2009	Dec. 31, 2008
Insurance and Other:
ASSETS
Cash and cash equivalents	$21,439	$24,302
Investments in fixed maturity securities	32,018	27,115
Investments in equity securities	45,794	49,073
Other investments	30,365	21,535
Receivables	15,778	14,925
Inventories	6,387	7,500
Property, plant and equipment	17,016	16,703
Goodwill	27,535	27,477
Other assets	13,306	13,257
Total assets	209,638	201,887
LIABILITIES
Losses and loss adjustment expenses	58,867	56,620
Unearned premiums	8,831	7,861
Life and health insurance benefits	3,898	3,619
Accounts payable, accruals and other liabilities	14,676	14,987
Notes payable and other borrowings	4,379	4,349
Total liabilities	90,651	87,436
Utilities and Energy:
ASSETS
Cash and cash equivalents	875	280
Property, plant and equipment	29,987	28,454
Goodwill	5,363	5,280
Other assets	5,597	7,556
Total assets	41,822	41,570
LIABILITIES
Accounts payable, accruals and other liabilities	5,800	6,175
Notes payable and other borrowings	19,708	19,145
Total liabilities	25,508	25,320
Finance and Financial Products:
ASSETS
Cash and cash equivalents	2,197	957
Investments in fixed maturity securities	4,150	4,517
Loans and finance receivables	13,631	13,942
Goodwill	1,024	1,024
Other assets	3,184	3,502
Total assets	24,186	23,942
LIABILITIES
Accounts payable, accruals and other liabilities	2,580	2,656
Derivative contract liabilities	12,299	14,612
Notes payable and other borrowings	14,697	13,388
Total liabilities	29,576	30,656
Consolidated:
ASSETS
Cash and cash equivalents	24,511	25,539
Total assets	275,646	267,399
LIABILITIES
Income taxes, principally deferred	11,074	10,280
Total liabilities	156,809	153,692
SHAREHOLDERS' EQUITY
Common stock and capital in excess of par value	27,089	27,141
Accumulated other comprehensive income	7,505	3,954
Retained earnings	79,933	78,172
Berkshire Hathaway shareholders' equity	114,527	109,267
Noncontrolling interests	4,310	4,440
Total shareholders' equity	118,837	113,707
Total liabilities and shareholders' equity	$275,646	$267,399

Condensed Consolidated Statemen

Condensed Consolidated Statements of Earnings (USD $)
In Millions, except Share data	3 Months Ended Jun. 30, 2009		3 Months Ended Jun. 30, 2008		6 Months Ended Jun. 30, 2009		6 Months Ended Jun. 30, 2008
Insurance and Other:
Revenues:
Insurance premiums earned	$6,485		$6,231		$14,668		$12,440
Sales and service revenues	15,587		17,332		29,897		32,092
Interest, dividend and other investment income	1,454		1,261		2,772		2,445
Investment gains/losses	33		671		(429)		786
Other-than-temporary impairments of investments	(30)		(429)		(3,126)		(429)
Total revenues	23,529		25,066		43,782		47,334
Costs and expenses:
Insurance losses and loss adjustment expenses	4,072		3,695		10,086		7,735
Life and health insurance benefits	403		452		885		942
Insurance underwriting expenses	1,885		1,524		3,233		2,921
Cost of sales and services	13,128		14,106		25,086		26,214
Selling, general and administrative expenses	2,073		2,049		4,036		3,909
Interest expense	38		40		72		73
Total costs and expenses	21,599		21,866		43,398		41,794
Utilities and Energy:
Revenues:
Operating revenues	2,502		2,992		5,471		6,348
Other revenues	153		43		133		81
Total revenues	2,655		3,035		5,604		6,429
Costs and expenses:
Cost of sales and operating expenses	1,955		2,410		4,310		4,994
Interest expense	298		296		589		590
Total costs and expenses	2,253		2,706		4,899		5,584
Finance and Financial Products:
Revenues:
Interest income	419		458		837		896
Investment gains/losses	(30)		4		62		4
Derivative gains/losses	2,357		689		840		(952)
Other	677		841		1,266		1,557
Total revenues	3,423		1,992		3,005		1,505
Costs and expenses:
Interest expense	174		157		337		306
Other costs and expenses	790		893		1,509		1,660
Total costs and expenses	964		1,050		1,846		1,966
Consolidated:
Revenues:
Total revenues	29,607		30,093		52,391		55,268
Costs and expenses:
Total costs and expenses	24,816		25,622		50,143		49,344
Earnings before income taxes and equity method earnings	4,791		4,471		2,248		5,924
Income tax expense	1,520		1,443		506		1,851
Earnings from equity method investments	113		0		196		0
Net earnings	3,384		3,028		1,938		4,073
Less: Earnings attributable to noncontrolling interests	89		148		177		253
Net earnings attributable to Berkshire Hathaway	$3,295		$2,880		$1,761		$3,820
Average common shares outstanding [1]	1,551,724	[1]	1,548,982	[1]	1,550,610	[1]	1,548,688	[1]
Net earnings per share attributable to Berkshire Hathaway shareholders [1]	$2,123	[1]	$1,859	[1]	$1,136	[1]	$2,467	[1]
[1]Average shares outstanding include average Class A common shares and average Class B common shares determined on an equivalent Class A common stock basis. Net earnings per common share attributable to Berkshire Hathaway shown above represents net earnings per equivalent Class A common share. Net earnings per Class B common share is equal to one-thirtieth (1/30) of such amount.

1_Condensed Consolidated Statem

Condensed Consolidated Statements of Cash Flows (USD $)
In Millions	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
Cash flows from operating activities:
Net cash flows from operating activities	$7,497	$4,991
Cash flows from investing activities:
Purchases of fixed maturity securities	(7,450)	(26,754)
Purchases of equity securities	(974)	(5,513)
Purchases of other investments	(6,068)	0
Sales of fixed maturity securities	2,282	11,950
Redemptions and maturities of fixed maturity securities	2,716	6,807
Sales of equity securities	1,343	1,764
Purchases of loans and finance receivables	(148)	(1,045)
Principal collections on loans and finance receivables	356	370
Acquisitions of businesses	(221)	(5,424)
Purchases of property, plant and equipment	(2,633)	(2,538)
Other investing activities	1,156	959
Net cash flows from investing activities	(9,641)	(19,424)
Cash flows from financing activities:
Proceeds from borrowings of finance businesses	1,504	4,118
Proceeds from borrowings of utilities and energy businesses	992	1,047
Proceeds from other borrowings	58	84
Repayments of borrowings of finance businesses	(216)	(2,602)
Repayments of borrowings of utilities and energy businesses	(230)	(1,120)
Repayments of other borrowings	(306)	(133)
Change in short term borrowings	(339)	(107)
Acquisitions of noncontrolling interests and other	(387)	(31)
Net cash flows from financing activities	1,076	1,256
Effects of foreign currency exchange rate changes	40	7
Decrease in cash and cash equivalents	(1,028)	(13,170)
Cash and cash equivalents at beginning of year	25,539	44,329
Cash and cash equivalents at end of first six months	$24,511	$31,159

Supplemental Cash Flow Informat

Supplemental Cash Flow Information (USD $)
In Millions	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
Insurance and Other:
Supplemental cash flow information - Cash paid during the period for:
Interest	$74	$93
Cash and cash equivalents are comprised of the following:
Cash and cash equivalents at beginning of year	24,302	37,703
Cash and cash equivalents at end of first six months	21,439	28,148
Utilities and Energy:
Supplemental cash flow information - Cash paid during the period for:
Interest	556	592
Cash and cash equivalents are comprised of the following:
Cash and cash equivalents at beginning of year	280	1,178
Cash and cash equivalents at end of first six months	875	1,002
Finance and Financial Products:
Supplemental cash flow information - Cash paid during the period for:
Interest	299	257
Cash and cash equivalents are comprised of the following:
Cash and cash equivalents at beginning of year	957	5,448
Cash and cash equivalents at end of first six months	2,197	2,009
Consolidated:
Supplemental cash flow information - Cash paid during the period for:
Income taxes	1,333	1,921
Supplemental cash flow information - Non-cash investing activity:
Liabilities assumed in connection with acquisitions of businesses	0	4,309
Cash and cash equivalents are comprised of the following:
Cash and cash equivalents at beginning of year	25,539	44,329
Cash and cash equivalents at end of first six months	$24,511	$31,159

General

General
	6 Months Ended Jun. 30, 2009
General note
Note 1. General	Note 1.General The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of Berkshire Hathaway Inc. (Berkshire or Company) consolidated with the accounts of all its subsidiaries and affiliates in which Berkshire holdscontrolling financial interests as of the financial statement date. Reference is made to Berkshires most recently issued Annual Report on Form 10-K (Annual Report) that included information necessary or useful to understanding Berkshires businesses and financial statement presentations. In particular, Berkshires significant accounting policies and practices were presented as Note 1 to the Consolidated Financial Statements included in the Annual Report. Certain immaterial amounts in 2008 have been reclassified to conform with the current year presentation. Financial information in this Report reflects any adjustments (consisting only of normal recurring 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 a number of reasons, Berkshires results for interim periods are not normally indicative of results to be expected for the year. The timing and magnitude of catastrophe losses incurred by insurance subsidiaries and the estimation error inherent to the process of determining liabilities for unpaid losses of insurance subsidiaries can be relatively more significant to results of interim periods than to results for a full year. Variations in the amounts and timing of investment gains/losses and other-than-temporary impairments of investments can cause significant variations in periodic net earnings. Investment gains/losses are recorded when investments are sold or in instances when investments are required to be marked-to-market. In addition, changes in the fair value of derivative assets/liabilities associated with derivative contracts that do not qualify for hedge accounting treatment can cause significant variations in periodic net earnings.

Accounting pronouncements adopt

Accounting pronouncements adopted in 2009
	6 Months Ended Jun. 30, 2009
Accounting pronouncements adopted in 2009 note
Note 2. Accounting pronouncements adopted in 2009	Note 2.Accounting pronouncements adopted in 2009 As of January1, 2009, Berkshire adopted SFAS No.160, Noncontrolling Interests in Consolidated Financial Statementsan amendment of ARB No.51 (SFAS 160). SFAS 160 requires that noncontrolling interests (formerly known as minority interests) be displayed in the consolidated balance sheet as a separate component of shareholders equity and that the consolidated net earnings attributable to the noncontrolling interests be clearly indentified and presented in the consolidated statement of earnings. In addition, changes in ownership interests where the parent retains a controlling interest are to be reported as transactions affecting shareholders equity. Previously such transactions were reported as additional investment purchases (potentially resulting in recognition of additional other assets, including goodwill, or liabilities). During the first six months of 2009, Berkshire acquired certain noncontrolling interests in subsidiaries that resulted in a reduction to shareholders equity attributable to Berkshire of approximately $118 million, representing the excess of consideration paid over the previously recorded balance sheet carrying amount of the acquired noncontrolling (minority) interests. Effective April 1, 2009, Berkshire adopted three Staff Positions (FSP) that were issued by the FASB in April 2009 to amend Financial Accounting Standards (FAS) relating to financial instruments. These FSPs are discussed in the following three paragraphs. FSP FAS 115-2 and FAS 124-2 Recognition and Presentation of Other-Than-Temporary Impairments amends the recognition, measurement and presentation standards for other-than-temporary impairments of debt securities and requires additional disclosure requirements for both debt and equity securities. With respect to an investment in a debt security, an other-than-temporary impairment occurs if the investor (a)intends to sell before amortized cost is recovered, (b)will more likely than not be required to sell before amortized cost is recovered or (c)does not expect to ultimately recover the amortized cost basis even if it does not intend to sell. Under (a)and (b)the entire other-than-temporary loss is recognized in earnings. Under (c)a credit loss is recognized in earnings to the extent that the present value of expected cash flows is less than the amortized cost basis and any difference between fair value and the amortized cost basis net of the credit loss is reflected in other comprehensive income net of applicable income taxes. The effect of adopting this FSP was not material to Berkshires Consolidated Financial Statements. FSP FAS 157-4 Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly (FSP FAS 157-4) clarifies that adjustments to quoted market prices may be required in illiquid or disorderly markets in order to estimate fair value in accordance with SFAS 157 Fair Value Measurements and provides guidance on the circumstances indicating whether markets are illiquid or disorderly. FSP FAS 157-4 prescribes no specific methodology for

Accounting pronouncements to be

Accounting pronouncements to be adopted
	6 Months Ended Jun. 30, 2009
Accounting pronouncements to be adopted note
Note 3. Accounting pronouncements to be adopted	Note 3.Accounting pronouncements to be adopted In June 2009, the FASB issued two Financial Accounting Standards relating to securitizations and special-purpose entities.SFAS No. 166, Accounting for Transfers of Financial Assets-an amendment of FASB Statement No. 140 (SFAS 166) eliminates the concept of a qualifying special-purpose entity (QSPE) and the exemption for QSPEs from the consolidation guidance prescribed in FASB Interpretation No. 46(R) Consolidation of Variable Interest Entities (revisedDecember 2003)an interpretation of ARB No. 51.SFAS 166 also modifies the derecognition criteria for transfers of financial assets.SFAS No. 167, Amendments to FASB Interpretation No. 46(R) (SFAS 167) includes new criteria for determining the primary beneficiary of variable interest entities and increases the frequency in which reassessments must be made to determine the primary beneficiary of such variable interest entities.SFAS 166 and SFAS 167 also require additional disclosures and are effective for financial statements issued for fiscal periods beginning after November 15, 2009.Berkshire is currently evaluating the impact that these accounting standards will have on its consolidated financial statements. In June 2009, the FASB issued Statement No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles-a replacement of FASB Statement No. 162 (SFAS 168).SFAS 168 supersedes existing Financial Accounting Standards and introduces FASB Accounting Standards Codification (the Codification) as the single source of authoritative GAAP.The Codification does not change existing GAAP and accordingly, SFAS 168 will not have a material impact on Berkshires consolidated financial statements.SFAS 168 is effective for financial statements issued for interim periods ending after September 15, 2009.

Business acquisitions

Business acquisitions
	6 Months Ended Jun. 30, 2009
Business acquisitions note
Note 4. Business acquisitions	Note 4.Business acquisitions Berkshires long-held acquisition strategy is to purchase businesses with consistent earnings, good returns on equity, able and honest management and at sensible prices. On March18, 2008, Berkshire acquired 60% of Marmon Holdings, Inc. (Marmon), a private company owned by trusts for the benefit of members of the Pritzker Family of Chicago, for $4.5 billion. In the second quarter of 2008, subsequent to this acquisition, Berkshire acquired additional shares of Marmon and currently owns 63.6%. Under the terms of the original purchase agreement, Berkshire will acquire the remaining interests in Marmon between 2011 and 2014 for consideration based on the future earnings of Marmon. Berkshire also acquired several other relatively small businesses during 2008. Consideration paid for all businesses acquired in 2008 (including Marmon) was approximately $6.1 billion. Marmon consists of approximately 130 manufacturing and service businesses that operate independently within eleven diverse business sectors. These sectors are: Engineered Wire Cable, serving energy related markets, residential and non-residential construction and other industries; Building Wire, producing copper electrical wiring for residential, commercial and industrial buildings; Transportation Services Engineered Products, including railroad tank cars and intermodal tank containers; Highway Technologies, primarily serving the heavy-duty highway transportation industry; Distribution Services for specialty pipe and steel tubing; Flow Products, producing a variety of metal products and materials for the plumbing, HVAC/R, construction and industrial markets; Industrial Products, including metal fasteners, safety products and metal fabrication; Construction Services, providing the leasing and operation of mobile cranes primarily to the energy, mining and petrochemical markets; Water Treatment equipment for residential, commercial and industrial applications; Retail Store Fixtures, providing store fixtures and accessories for major retailers worldwide; and Food Service Equipment, providing food preparation equipment and shopping carts for restaurants and retailers worldwide. Marmon operates more than 250 manufacturing, distribution and service facilities, primarily in North America, Europe and China. The results of operations for businesses acquired in 2008 are included in Berkshires consolidated results from the effective date of each acquisition. The following table sets forth certain unaudited pro forma consolidated earnings data for the first six months of 2008 as if each acquisition occurring during 2008 was consummated on the same terms at the beginning of the year. Pro forma data for 2009 was not materially different from the amounts reported. Amounts are in millions, except earnings per share. 2008 Total revenues $ 56,678 Net earnings attributable to Berkshire Hathaway 3,867 Earnings per equivalent ClassA common share attributable to Berkshire Hathaway shareholders 2,497

Investments in fixed maturity s

Investments in fixed maturity securities
	6 Months Ended Jun. 30, 2009
Investments in fixed maturity securities note
Note 5. Investments in fixed maturity securities	Note 5.Investments in fixed maturity securities Investments in securities with fixed maturities as of June 30, 2009 and December 31, 2008 are shown below (in millions). Amortized Unrealized Unrealized Fair Cost Gains Losses * Value June 30, 2009 U.S. Treasury, U.S. government corporations and agencies $ 2,425 $ 61 $ (2 ) $ 2,484 States, municipalities and political subdivisions 4,052 266 (2 ) 4,316 Foreign governments 11,077 351 (42 ) 11,386 Corporate bonds and redeemable preferred stocks 13,227 1,238 (1,070 ) 13,395 Mortgage-backed securities 4,318 326 (57 ) 4,587 $ 35,099 $ 2,242 $ (1,173 ) $ 36,168 Insurance and other 31,261 1,859 (1,102 ) 32,018 Finance and financial products 3,838 383 (71 ) 4,150 $ 35,099 $ 2,242 $ (1,173 ) $ 36,168 Amortized Unrealized Unrealized Fair Cost Gains Losses * Value December 31, 2008 U.S. Treasury, U.S. government corporations and agencies $ 2,107 $ 123 $ (2 ) $ 2,228 States, municipalities and political subdivisions 4,504 242 (5 ) 4,741 Foreign governments 9,106 343 (59 ) 9,390 Corporate bonds and redeemable preferred stocks 10,798 394 (1,568 ) 9,624 Mortgage-backed securities 5,400 338 (89 ) 5,649 $ 31,915 $ 1,440 $ (1,723 ) $ 31,632 Insurance and other 27,618 1,151 (1,654 ) 27,115 Finance and financial products 4,297 289 (69 ) 4,517 $ 31,915 $ 1,440 $ (1,723 ) $ 31,632 * Includes unrealized losses of $199 million at June 30, 2009 and $176 million at December 31, 2008 related to securities that have been in an unrealized loss position for 12 months or more. The amortized cost and estimated fair value of securities with fixed maturities at June 30, 2009 are summarized below by contractual maturity dates. Actual maturities will differ from contractual maturities because issuers of certain of the securities retain early call or prepayment rights. Amounts are in millions. Due after one Due after five Due in one year through years through Due after Mortgage-backed year or less five years ten years ten years securities Total Amortized cost $ 4,805 $ 15,459 $ 6,566 $ 3,951 $ 4,318 $ 35,099 Fair value 4,944 16,028 6,106 4,503 4,587 36,168

Investments in equity securitie

Investments in equity securities
	6 Months Ended Jun. 30, 2009
Investments in equity securities note
Note 6. Investments in equity securities	Note 6.Investments in equity securities Investments in equity securities are summarized below (in millions). Unrealized Unrealized Fair Cost Basis Gains Losses Value June 30, 2009 American Express Company $ 1,287 $ 2,236 $ $ 3,523 The Coca-Cola Company 1,299 8,299 9,598 ConocoPhillips 2,525 187 2,712 Johnson Johnson 2,322 6 (152 ) 2,176 Kraft Foods Inc. 4,330 (1,029 ) 3,301 The Procter Gamble Company 5,484 (786 ) 4,698 Wells Fargo Company 6,917 2,368 (1,600 ) 7,685 Other 12,098 2,433 (2,430 ) 12,101 $ 36,262 $ 15,529 $ (5,997 ) $ 45,794 Unrealized Unrealized Fair Cost Basis Gains Losses Value December 31, 2008 American Express Company $ 1,287 $ 1,525 $ $ 2,812 The Coca-Cola Company 1,299 7,755 9,054 ConocoPhillips 6,820 (2,422 ) 4,398 Johnson Johnson 1,847 24 (76 ) 1,795 Kraft Foods Inc. 4,330 (832 ) 3,498 The Procter Gamble Company 5,484 200 5,684 Wells Fargo Company 6,703 2,850 (580 ) 8,973 Other 12,370 2,428 (1,939 ) 12,859 $ 40,140 $ 14,782 $ (5,849 ) $ 49,073 Berkshire uses no bright-line test in determining whether impairments are temporary or other-than-temporary. Berkshire considers several factors in determining other-than-temporary impairment losses including the current and expected long-term business prospects of the issuer, the length of time and relative magnitude of the price decline and its ability and intent to hold the investment until the price recovers. Unrealized losses at June 30, 2009 included $1,034 million related to securities that have been in an unrealized loss position for 12 months or more. Approximately 90% of the gross unrealized losses at June 30, 2009 were concentrated in six issuers. Unrealized losses generally ranged from 15% to 50% of cost. In managements judgment, the future earnings potential and underlying business economics of these companies are favorable and Berkshire possesses the ability and intent to hold these securities until their prices recover.Changing market conditions and other facts and circumstances may change the business prospects of these issuers as well as Berkshires ability and intent to hold these securities until the prices recover.Accordingly, other-than-temporary impairment charges may be recorded in future periods with respect to one or more of these securities.

Other Investments

Other Investments
	6 Months Ended Jun. 30, 2009
Other Investments note
Note 7. Other Investments	Note 7.Other Investments A summary of other investments as of June 30, 2009 and December31, 2008 follows (in millions). June 30, 2009 Cost Unrealized Gains Fair Value Carrying Value Fixed maturity and equity $ 20,089 $ 3,036 $ 23,125 $ 22,907 Equity method 6,350 561 6,911 7,458 $ 26,439 $ 3,597 $ 30,036 $ 30,365 December31, 2008 Cost Unrealized Gains Fair Value Carrying Value Fixed maturity and equity $ 14,452 $ 36 $ 14,488 $ 14,675 Equity method 5,919 352 6,271 6,860 $ 20,371 $ 388 $ 20,759 $ 21,535 Fixed maturity and equity investments in the preceding table include perpetual preferred stock and common stock warrants of The Goldman Sachs Group, Inc. (GS) and The General Electric Company (GE) and preferred stock and subordinated notes of Wm. Wrigley Jr. Company (Wrigley). These securities were acquired in the fourth quarter of 2008. Berkshire owns 50,000 shares of 10% Cumulative Perpetual Preferred Stock of GS (GS Preferred) and Warrants to purchase 43,478,260 shares of common stock of GS (GS Warrants) which were acquired for a combined cost of $5 billion. The GS Preferred may be redeemed at any time by GS at a price of $110,000 per share ($5.5 billion in aggregate). The GS Warrants expire in 2013 and can be exercised for an additional aggregate cost of $5 billion ($115/share). Berkshire also owns 30,000 shares of 10% Cumulative Perpetual Preferred Stock of GE (GE Preferred) and Warrants to purchase 134,831,460 shares of common stock of GE (GE Warrants) which were acquired for a combined cost of $3 billion. The GE Preferred may be redeemed beginning in October 2011 by GE at a price of $110,000 per share ($3.3 billion in aggregate). The GE Warrants expire in 2013 and can be exercised for an additional aggregate cost of $3 billion ($22.25/share). Berkshire owns $4.4 billion par amount of 11.45% subordinated notes due 2018 of Wrigley (Wrigley Notes) and $2.1 billion of 5% preferred stock of Wrigley (Wrigley Preferred). The Wrigley Notes and Wrigley Preferred were acquired in connection with Mars, Incorporateds acquisition of Wrigley. On March23, 2009, Berkshire acquired a 12% convertible perpetual capital instrument issued by Swiss Re at a cost of 3 billion Swiss Francs (CHF), which is also the face amount of the instrument. The instrument has no maturity or mandatory redemption date but can be redeemed under certain conditions at the option of Swiss Re at 140% of the face amount until March23, 2011 and thereafter at 120% of the face amount. The instrument possesses no voting rights and is subordinated to senior securities of Swiss Re as defined in the agreement. Beginning March23, 2012, the instrument can be converted into 120,000,000 common shares of Swiss Re (a rate of 25 CHF per share of Swiss Re common stock). On April1, 2009, Berkshire acquired 3,000,000 shares of Series A Cumulative Convertible Perpetual Preferred Stock of The Dow Chemical Company (Dow Preferre

Investment Gains and Losses

Investment Gains and Losses
	6 Months Ended Jun. 30, 2009
Investment gain loss note
Note 8. Investment Gains/Losses	Note 8.Investment Gains/Losses Investment gains/losses are summarized below (in millions). Second Quarter First Six Months 2009 2008 2009 2008 Fixed maturity securities: Gross gains from sales and other disposals $ 22 $ 82 $ 172 $ 106 Gross losses from sales and other disposals (1 ) (9 ) (1 ) Equity securities: Gross gains from sales 61 600 95 677 Gross losses from sales (51 ) (4 ) (559 ) (4 ) Other (29 ) (2 ) (66 ) 12 $ 3 $ 675 $ (367 ) $ 790 Net investment gains/losses are reflected in the Condensed Consolidated Statements of Earnings as follows (in millions). Second Quarter First Six Months 2009 2008 2009 2008 Insurance and other $ 33 $ 671 $ (429 ) $ 786 Finance and financial products (30 ) 4 62 4 $ 3 $ 675 $ (367 ) $ 790

Derivative contracts of finance

Derivative contracts of finance and financial products businesses
	6 Months Ended Jun. 30, 2009
Derivative contracts of finance and financial products businesses note
Note 9. Derivative contracts of finance and financial products businesses	Note 9.Derivative contracts of finance and financial products businesses Derivative contracts of Berkshires finance and financial products businesses, with limited exceptions, are not designated as hedges for financial reporting purposes. These contracts were initially entered into with the expectation that the premiums received would exceed the amounts ultimately paid to counterparties. Changes in the fair values of such contracts are reported in earnings as derivative gains/losses. A summary of derivative contracts outstanding as of June 30, 2009 and December31, 2008 follows (in millions). June 30, 2009 December31, 2008 Assets(3) Liabilities Notional Value Assets(3) Liabilities Notional Value Equity index put options $ $ 8,233 $ 37,480 (1) $ $ 10,022 $ 37,134 (1) Credit default obligations: High yield indexes 2,507 6,383 (2) 3,031 7,892 (2) States/municipalities 1,049 16,042 (2) 958 18,364 (2) Individual corporate 80 3,775 (2) 105 3,900 (2) Other 439 461 503 528 Counterparty netting and funds held as collateral (239 ) (31 ) (295 ) (32 ) $ 200 $ 12,299 $ 208 $ 14,612 (1) Represents the aggregate undiscounted amount payable at the contract expiration dates assuming that the value of each index is zero at the contract expiration date. (2) Represents the maximum undiscounted future value of losses payable under the contracts, assuming a sufficient number of credit defaults occur. The number of losses required to exhaust contract limits under substantially all of the contracts is dependent on the loss recovery rate related to the specific obligor at the time of the default. (3) Included in other assets of finance and financial products businesses. A summary of derivative gains/losses included in the Condensed Consolidated Statements of Earnings are as follows (in millions). Second Quarter First Six Months 2009 2008 2009 2008 Equity index put options $ 1,956 $ 326 $ 1,790 $ (851 ) Credit default obligations 391 339 (960 ) (136 ) Other 10 24 10 35 $ 2,357 $ 689 $ 840 $ (952 ) Berkshire has written equity index put option contracts on four major equity indexes including three indexes outside of the United States. These contracts are European style options and will be settled on the contract expiration dates, which occur between June 2018 and January 2028. Future payments, if any, under these contracts will be required if the underlying index value is below the strike price at the contract expiration dates. Premiums on these contracts were received in full at the contract inception dates and therefore Berkshire has no counterparty credit risk. At June 30, 2009, the

Fair value measurements

Fair value measurements
	6 Months Ended Jun. 30, 2009
Fair value measurements note
Note 10. Fair value measurements	Note 10.Fair value measurements The fair values of Berkshires financial assets and liabilities as of June 30, 2009 and December 31, 2008 are shown in the following table (in millions). The carrying values of cash and cash equivalents, accounts receivable and accounts payable, accruals and other liabilities are deemed to be reasonable estimates of their fair values. Carrying Value Fair Value June 30, 2009 Dec. 31, 2008 June 30, 2009 Dec. 31, 2008 Insurance and other: Investments in fixed maturity securities $ 32,018 $ 27,115 $ 32,018 $ 27,115 Investments in equity securities 45,794 49,073 45,794 49,073 Other investments 30,365 21,535 30,036 20,759 Notes payable and other borrowings 4,379 4,349 4,365 4,300 Finance and financial products: Investments in fixed maturity securities 4,150 4,517 4,150 4,517 Derivative contract assets (1) 200 208 200 208 Loans and finance receivables 13,631 13,942 13,679 14,016 Notes payable and other borrowings 14,697 13,388 15,165 13,820 Derivative contract liabilities 12,299 14,612 12,299 14,612 Utilities and energy: Derivative contract assets (1) 252 324 252 324 Notes payable and other borrowings 19,708 19,145 20,547 19,144 Derivative contract liabilities (2) 575 729 575 729 (1) Included in Other assets (2) Included in Accounts payable, accruals and other liabilities Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. Fair value measurements assume the asset or liability is exchanged in an orderly manner; the exchange is in the principal market for that asset or liability (or in the most advantageous market when no principal market exists); and the market participants are independent, knowledgeable, able and willing to transact an exchange. Nonperformance risk (credit risk) is considered in valuing liabilities. Fair values for substantially all of Berkshires financial instruments were measured using market or income approaches. Considerable judgment may be required in interpreting market data used to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that could be realized in an actual current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value. SFAS 157 establishes a hierarchy for measuring fair value consisting of Levels 1 through 3. Level 1 Inputs represent unadjusted quoted prices for identical assets or liabilities exchanged in active markets. Substantially all of Berkshires equity investments are traded on an exchange in active markets and fair valu

Receivables

Receivables
	6 Months Ended Jun. 30, 2009
Receivables note
Note 11. Receivables	Note 11.Receivables Loans and receivables of insurance and other businesses are comprised of the following (in millions). June 30, 2009 December31, 2008 Insurance premiums receivable $ 5,935 $ 4,961 Reinsurance recoverables 3,164 3,235 Trade and other receivables 7,120 7,141 Allowances for uncollectible accounts (441 ) (412 ) $ 15,778 $ 14,925 Loans and finance receivables of finance and financial products businesses are comprised of the following (in millions). June 30, 2009 December31, 2008 Consumer installment loans and finance receivables $ 12,937 $ 13,190 Commercial loans and finance receivables 1,011 1,050 Allowances for uncollectible loans (317 ) (298 ) $ 13,631 $ 13,942

Property, plant and equipment

Property, plant and equipment
	6 Months Ended Jun. 30, 2009
Property, plant and equipment note
Note 12. Property, plant and equipment	Note 12.Property, plant and equipment Property, plant and equipment of insurance and other businesses is comprised of the following (inmillions). Rangesof estimatedusefullife June 30, 2009 December31, 2008 Land $ 742 $ 751 Buildings and improvements 340years 4,502 4,351 Machinery and equipment 325years 11,701 11,009 Furniture, fixtures and other 320years 1,747 1,856 Assets held for lease 1230years 5,600 5,311 24,292 23,278 Accumulated depreciation (7,276 ) (6,575 ) $ 17,016 $ 16,703 Property, plant and equipment of utilities and energy businesses is comprised of the following (in millions). Rangesof estimatedusefullife June 30, 2009 December31, 2008 Utility generation, distribution and transmission system 585years $ 34,654 $ 32,795 Interstate pipeline assets 367 years 5,657 5,649 Independent power plants and other assets 330 years 1,260 1,228 Construction in progress 1,897 1,668 43,468 41,340 Accumulated depreciation (13,481 ) (12,886 ) $ 29,987 $ 28,454 The utility generation, distribution and transmission system and interstate pipeline assets are the regulated assets of public utility and natural gas pipeline subsidiaries. At June 30, 2009 and December31, 2008, accumulated depreciation related to regulated assets was $13.0 billion and $12.5 billion, respectively. Substantially all of the construction in progress related to the construction of regulated assets.

Inventories

Inventories
	6 Months Ended Jun. 30, 2009
Inventories note
Note 13. Inventories	Note 13.Inventories Inventories are comprised of the following (in millions). June 30, 2009 December31, 2008 Raw materials $ 984 $ 1,161 Work in process and other 543 607 Finished manufactured goods 2,444 2,580 Purchased goods 2,416 3,152 $ 6,387 $ 7,500

Income taxes

Income taxes
	6 Months Ended Jun. 30, 2009
Income taxes note
Note 14. Income taxes	Note 14.Income taxes The liability for income taxes as of June 30, 2009 and December31, 2008 is as follows (in millions). June 30, 2009 December31, 2008 Payable currently $ (344 ) $ 161 Deferred 10,574 9,316 Other 844 803 $ 11,074 $ 10,280

Notes payable and other borrowi

Notes payable and other borrowings
	6 Months Ended Jun. 30, 2009
Notes payable and other borrowings note
Note 15. Notes payable and other borrowings	Note 15.Notes payable and other borrowings Notes payable and other borrowings of Berkshire and its subsidiaries are summarized below (in millions). June 30, 2009 December31, 2008 Insurance and other: Issued or guaranteed by Berkshire due 2009-2035 $ 2,431 $ 2,275 Issued by subsidiaries and not guaranteed by Berkshire due 2009-2041 1,948 2,074 $ 4,379 $ 4,349 Debt issued or guaranteed by Berkshire includes short term borrowings of $2.0 billion as of June 30, 2009 and $1.8 billion as of December31, 2008. June 30, 2009 December31, 2008 Utilities and energy: Issued by MidAmerican Energy Holdings Company (MidAmerican) and its subsidiaries and not guaranteed by Berkshire: MidAmerican senior debt due 2012-2037 $ 5,121 $ 5,121 Subsidiary debt due 2009-2039 14,351 13,573 Other 236 451 $ 19,708 $ 19,145 MidAmerican senior debt is unsecured and has a weighted average interest rate of about 6.3% as of June 30, 2009. Subsidiary debt of utilities and energy businesses represents amounts issued by subsidiaries of MidAmerican pursuant to separate financing agreements and has a weighted average interest rate of about 6% as of June 30, 2009. All or substantially all of the assets of certain MidAmerican subsidiaries are or may be pledged or encumbered to support or otherwise secure the debt. These borrowing arrangements generally contain various covenants including, but not limited to, leverage ratios, interest coverage ratios and debt service coverage ratios. As of June 30, 2009, MidAmerican and its subsidiaries were in compliance with all applicable covenants. Subsidiary debt with an aggregate par amount of $1.0 billion was issued in the first quarter of 2009. These subsidiary debt obligations mature in 2019 and 2039 and have interest rates of 5.5% and 6.0%. June 30, 2009 December31, 2008 Finance and financial products: Issued by Berkshire Hathaway Finance Corporation (BHFC) and guaranteed by Berkshire $ 12,049 $ 10,778 Issued by other subsidiaries and guaranteed by Berkshire due 2009-2027 696 706 Issued by other subsidiaries and not guaranteed by Berkshire due 2009-2036 1,952 1,904 $ 14,697 $ 13,388 Debt issued by BHFC matures between 2010 and 2018 and pays interest at a weighted average rate of approximately 4.3% as of June 30, 2009. In 2009, BHFC issued $1 billion par amount of 4% notes due in 2012 and $250 million of 5.4% notes due in 2018.

Shareholders' equity

Shareholders' equity
	6 Months Ended Jun. 30, 2009
Shareholders' equity note
Note 16. Shareholders' equity	Note 16.Shareholders equity The following table summarizes Berkshires ClassA and B common stock activity during the first six months of 2009. ClassAcommonstock (1,650,000sharesauthorized) Issued and Outstanding ClassBcommonstock (55,000,000sharesauthorized) Issued and Outstanding Balance at December31, 2008 1,059,001 14,706,996 Issuance of Class B common stock and conversions of Class A common stock to Class B (1,691 ) 125,449 Balance at June 30, 2009 1,057,310 14,832,445 Each share of ClassA common stock ($5 par per share) is convertible, at the option of the holder, into thirty shares of Class B common stock ($0.1667 par per share). Class B common stock is not convertible into ClassA common stock. Class B common stock has economic rights equal to one-thirtieth (1/30)of the economic rights of ClassA common stock. Accordingly, on an equivalent ClassA common stock basis, there are 1,551,725 shares outstanding at June 30, 2009 and 1,549,234 shares outstanding at December31, 2008. Each ClassA common share is entitled to one vote per share. Each Class B common share possesses the voting rights of one-two-hundredth (1/200)of the voting rights of a ClassA share. ClassA and Class B common shares vote together as a single class. In March 2009, Berkshire issued 74,574 shares of Class B common stock to acquire certain noncontrolling shareholder interests in MidAmerican. Changes in shareholders equity for the first six months of 2008 and 2009 are shown in the table below (in millions). Berkshire Hathaway shareholders equity Commonstock and capital in excess of par value Accumulated other comprehensive income Retained earnings Total Non- controlling interests Balance at December31, 2007 $ 26,960 $ 21,620 $ 72,153 $ 120,733 $ 2,668 Net earnings 3,820 3,820 253 Other comprehensive income, net (6,739 ) (6,739 ) (55 ) Issuance of common stock 180 180 Changes in noncontrolling interests: Business acquisitions 1,570 Noncontrolling interests acquired (206 ) Balance at June 30, 2008 $ 27,140 $ 14,881 $ 75,973 $ 117,994 $ 4,230 Balance at December31, 2008 $ 27,141 $ 3,954 $ 78,172 $ 109,267 $ 4,440 Net earnings 1,761 1,761 177 Other comprehensive income, net 3,442 3,442 22 Issuance of common stock 175 175 Changes in noncontrolling interests: Noncontrolling interests acquired (227 ) 109 (118 ) (329 ) Balance at June 30, 2009 $ 27,089 $ 7,505 $ 79,933 $ 114,527 $ 4,310 Berkshires comprehensive income for the second quarter and first six months of 2009 and 2008 is shown in the table below (in mi

Business segment data

Business segment data
	6 Months Ended Jun. 30, 2009
Business segment data note
Note 17. Business segment data	Note 17.Business segment data Berkshires consolidated segment data for the second quarter and first six months of 2009 and 2008 is as follows (in millions). Revenues Second Quarter First Six Months 2009 2008 2009 2008 Operating Businesses: Insurance group: Premiums earned: GEICO $ 3,394 $ 3,086 $ 6,655 $ 6,118 General Re 1,426 1,488 2,805 3,192 Berkshire Hathaway Reinsurance Group 1,210 1,156 4,297 2,140 Berkshire Hathaway Primary Group 455 501 911 990 Investment income 1,437 1,221 2,747 2,320 Total insurance group 7,922 7,452 17,415 14,760 Finance and financial products 1,099 1,303 2,108 2,461 Marmon 1,286 1,901 2,540 2,166 McLane 7,864 7,269 14,857 14,258 MidAmerican 2,655 3,035 5,604 6,429 Shaw 1,029 1,337 2,032 2,561 Other businesses 5,204 6,986 9,999 13,377 27,059 29,283 54,555 56,012 Reconciliation of segments to consolidated amount: Investment and derivative gains/losses* 2,330 935 (2,653 ) (591 ) Eliminations and other 218 (125 ) 489 (153 ) $ 29,607 $ 30,093 $ 52,391 $ 55,268 Earningsbefore income taxes and equitymethodearnings Second Quarter First Six Months 2009 2008 2009 2008 Operating Businesses: Insurance group: Underwriting: GEICO $ 111 $ 298 $ 259 $ 484 General Re 276 102 260 144 Berkshire Hathaway Reinsurance Group (291 ) 79 (88 ) 108 Berkshire Hathaway Primary Group 29 81 33 106 Net investment income 1,422 1,204 2,720 2,293 Total insurance group 1,547 1,764 3,184 3,135 Finance and financial products 135 254 262 495 Marmon 170 261 332 289 McLane 66 68 209 141 MidAmerican 402 329 705 845 Shaw 30 82 85 133 Other businesses 171 874 322 1,567 2,521 3,632 5,099 6,605 Reconciliation of segments to consolidated amount: Investment and derivative gains/losses* 2,330 935 (2,653 ) (591 ) Interest expense, excluding interest allocated to operating businesses (15 ) (9 ) (23 ) (17 ) Eliminations and other (45 ) (87 ) (175 ) (73 ) $ 4,791 $ 4,471 $ 2,248 $ 5,924 * Includes other-than-temporary impairments of investments.

Contingencies

Contingencies
	6 Months Ended Jun. 30, 2009
Contingencies note
Note 18. Contingencies	Note 18.Contingencies Berkshire and its subsidiaries are parties in a variety of legal actions arising out of the normal course of business. In particular, such legal actions affect Berkshires insurance and reinsurance businesses. Such litigation generally seeks to establish liability directly through insurance contracts or indirectly through reinsurance contracts issued by Berkshire subsidiaries. Plaintiffs occasionally seek punitive or exemplary damages. Berkshire does not believe that such normal and routine litigation will have a material effect on its 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 in substantial amounts. a) Governmental Investigations Berkshire, General Re Corporation (General Re) and certain of Berkshires insurance subsidiaries, including General Reinsurance Corporation (General Reinsurance) and National Indemnity Company (NICO) have been continuing to cooperate fully with the U.S. Securities and Exchange Commission (SEC), the U.S. Department of Justice, the U.S. Attorney for the Eastern District of Virginia and the New York State Attorney General (NYAG) in their ongoing investigations of non-traditional products. General Re originally received subpoenas from the SEC and NYAG in January 2005. Berkshire, General Re, General Reinsurance and NICO have been providing information to the government relating to transactions between General Reinsurance or NICO (or their respective subsidiaries or affiliates) and other insurers in response to the January 2005 subpoenas and related requests and, in the case of General Reinsurance (or its subsidiaries or affiliates), in response to subpoenas from other U.S. Attorneys conducting investigations relating to certain of these transactions. In particular, Berkshire and General Re have been responding to requests from the government for information relating to certain transactions that may have been accounted for incorrectly by counterparties of General Reinsurance (or its subsidiaries or affiliates). The government has interviewed a number of current and former officers and employees of General Re and General Reinsurance as well as Berkshires Chairman and CEO, Warren E. Buffett, in connection with these investigations. In one case, a transaction initially effected with American International Group (AIG) in late 2000 (the AIG Transaction), AIG has corrected its prior accounting for the transaction on the grounds, as stated in AIGs 2004 10-K, that the transaction was done to accomplish a desired accounting result and did not entail sufficient qualifying risk transfer to support reinsurance accounting. General Reinsurance has been named in related civil actions brought against AIG. As part of their ongoing investigations, governmental authorities have also inquired about the accounting by certain of Berkshires insurance subsidiaries for certain assumed and ceded finite reinsurance transactions. In June 2005, John Houldsworth, the former Chief Executive Officer of Cologne Reinsurance Company (Du