(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Number of shares of common stock outstanding as of ~~October 27, 2021:~~July 26, 2022:

	September 30, 2021		December 31, 2020		June 30, 2022		December 31, 2021
	(Unaudited)				(Unaudited)
ASSETS
Insurance and Other:
Cash and cash equivalents*	$	65,156	$	44,714	$	26,534	$	85,319
Short-term investments in U.S. Treasury Bills		79,209		90,300		74,803		58,535
Investments in fixed maturity securities		18,125		20,410		21,136		16,434
Investments in equity securities		310,739		281,170		327,662		350,719
Equity method investments		16,658		17,303		17,494		17,375
Loans and finance receivables		20,397		19,201		21,877		20,751
Other receivables		37,277		32,310		39,678		35,388
Inventories		20,191		19,208		24,560		20,954
Property, plant and equipment		20,722		21,200		20,517		20,834
Equipment held for lease		14,752		14,601		15,125		14,918
Goodwill		47,090		47,121		46,951		47,117
Other intangible assets		28,643		29,462		27,992		28,486
Deferred charges under retroactive reinsurance contracts		11,732		12,441
Deferred charges - retroactive reinsurance						10,213		10,639
Other		16,301		14,580		16,302		15,854
		706,992		664,021		690,844		743,323
Railroad, Utilities and Energy:
Cash and cash equivalents*		4,833		3,276		4,074		2,865
Receivables		4,324		3,542		4,815		4,177
Property, plant and equipment		153,401		151,216		156,771		155,530
Goodwill		26,680		26,613		26,667		26,758
Regulatory assets		3,842		3,440		4,259		3,963
Other		20,686		21,621		22,430		22,168
		213,766		209,708		219,016		215,461
	$	920,758	$	873,729	$	909,860	$	958,784

	September 30, 2021			December 31, 2020			June 30, 2022			December 31, 2021
	(Unaudited)						(Unaudited)
LIABILITIES AND SHAREHOLDERS’ EQUITY
Insurance and Other:
Unpaid losses and loss adjustment expenses	$	85,754		$	79,854		$	88,560		$	86,664
Unpaid losses and loss adjustment expenses under retroactive reinsurance contracts		39,721			40,966			37,234			38,256
Unearned premiums		25,239			21,395			25,727			23,512
Life, annuity and health insurance benefits		22,409			21,616			22,562			22,452
Other policyholder liabilities		8,863			8,670			8,998			9,330
Accounts payable, accruals and other liabilities		31,154			29,279			31,387			30,376
Derivative contract liabilities		286			1,065
Aircraft repurchase liabilities and unearned lease revenues		5,840			5,856			5,907			5,849
Notes payable and other borrowings		39,645			41,522			42,640			39,272
		258,911			250,223			263,015			255,711
Railroad, Utilities and Energy:
Accounts payable, accruals and other liabilities		15,978			15,224			16,193			15,696
Regulatory liabilities		7,226			7,475			7,290			7,214
Notes payable and other borrowings		75,320			75,373			76,441			74,990
		98,524			98,072			99,924			97,900
Income taxes, principally deferred		82,248			74,098			77,268			90,243
Total liabilities		439,683			422,393			440,207			443,854
Shareholders’ equity:
Common stock		8			8			8			8
Capital in excess of par value		35,603			35,626			35,204			35,592
Accumulated other comprehensive income		(4,834	)		(4,243	)		(6,175	)		(4,027	)
Retained earnings		494,775			444,626			496,126			534,421
Treasury stock, at cost		(53,072	)		(32,853	)		(63,934	)		(59,795	)
Berkshire Hathaway shareholders’ equity		472,480			443,164			461,229			506,199
Noncontrolling interests		8,595			8,172			8,424			8,731
Total shareholders’ equity		481,075			451,336			469,653			514,930
	$	920,758		$	873,729		$	909,860		$	958,784

	Third Quarter				First Nine Months				Second Quarter					First Six Months
	2021		2020		2021		2020		2022			2021		2022			2021
Revenues:
Insurance and Other:
Insurance premiums earned	$	17,727	$	15,913	$	51,314	$	47,256	$	18,087		$	17,163	$	35,579		$	33,587
Sales and service revenues		36,722		32,703		107,163		93,332		40,220			36,743		78,082			70,441
Leasing revenues		1,565		1,316		4,336		3,905		1,887			1,447		3,559			2,771
Interest, dividend and other investment income		1,795		1,717		5,544		6,143		2,861			1,898		4,723			3,749
		57,809		51,649		168,357		150,636		63,055			57,251		121,943			110,548
Railroad, Utilities and Energy:
Freight rail transportation revenues		5,761		5,148		16,917		15,101		6,612			5,778		12,556			11,156
Energy operating revenues		5,225		4,451		14,375		11,504		4,935			4,302		9,753			9,150
Service revenues and other income		1,788		1,776		4,647		3,888		1,578			1,783		2,738			2,859
		12,774		11,375		35,939		30,493		13,125			11,863		25,047			23,165
Total revenues		70,583		63,024		204,296		181,129		76,180			69,114		146,990			133,713

Investment and derivative contract gains		4,921		31,582		38,015		1,392
Investment and derivative contract gains (losses)										(66,919	)		27,394		(68,897	)		33,094

Costs and expenses:
Insurance and Other:
Insurance losses and loss adjustment expenses		13,939		11,667		37,078		32,712		13,620			12,175		26,952			23,139
Life, annuity and health insurance benefits		1,568		1,311		4,507		4,101		1,282			1,459		2,605			2,939
Insurance underwriting expenses		3,239		3,228		9,318		9,219		2,461			3,065		5,228			6,079
Cost of sales and services		28,984		25,957		84,275		74,565		31,633			28,761		61,418			55,291
Cost of leasing		1,116		854		2,980		2,605		1,498			982		2,730			1,864
Selling, general and administrative expenses		4,889		5,181		13,844		14,304		3,762			5,045		8,013			8,955
Goodwill and intangible asset impairments		—		25		—		10,659
Interest expense		286		263		860		817		302			298		566			574
		54,021		48,486		152,862		148,982		54,558			51,785		107,512			98,841
Railroad, Utilities and Energy:
Freight rail transportation expenses		3,527		3,161		10,625		9,625		4,260			3,588		8,185			7,098
Utilities and energy cost of sales and other expenses		3,497		3,101		10,306		8,326		3,844			3,220		7,435			6,809
Other expenses		1,582		1,481		4,238		3,422		1,527			1,563		2,683			2,656
Interest expense		770		737		2,322		2,209		785			778		1,555			1,552
		9,376		8,480		27,491		23,582		10,416			9,149		19,858			18,115
Total costs and expenses		63,397		56,966		180,353		172,564		64,974			60,934		127,370			116,956
Earnings before income taxes and equity method earnings		12,107		37,640		61,958		9,957
Earnings (loss) before income taxes and equity method earnings										(55,713	)		35,574		(49,277	)		49,851
Equity method earnings		377		290		775		333		231			147		607			398
Earnings before income taxes		12,484		37,930		62,733		10,290
Income tax expense		1,840		7,517		11,824		3,167
Net earnings		10,644		30,413		50,909		7,123
Earnings (loss) before income taxes										(55,482	)		35,721		(48,670	)		50,249
Income tax expense (benefit)										(12,106	)		7,296		(10,879	)		9,984
Net earnings (loss)										(43,376	)		28,425		(37,791	)		40,265
Earnings attributable to noncontrolling interests		300		276		760		437		379			331		504			460
Net earnings attributable to Berkshire Hathaway shareholders	$	10,344	$	30,137	$	50,149	$	6,686
Net earnings per average equivalent Class A share	$	6,882	$	18,994	$	33,025	$	4,160
Net earnings per average equivalent Class B share*	$	4.59	$	12.66	$	22.02	$	2.77
Net earnings (loss) attributable to Berkshire Hathaway shareholders									$	(43,755	)	$	28,094	$	(38,295	)	$	39,805
Net earnings (loss) per average equivalent Class A share									$	(29,754	)	$	18,488	$	(26,005	)	$	26,078
Net earnings (loss) per average equivalent Class B share*									$	(19.84	)	$	12.33	$	(17.34	)	$	17.39
Average equivalent Class A shares outstanding		1,503,013		1,586,698		1,518,513		1,607,041		1,470,577			1,519,576		1,472,628			1,526,392
Average equivalent Class B shares outstanding		2,254,518,838		2,380,046,304		2,277,769,582		2,410,561,550		2,205,865,262			2,279,363,382		2,208,942,539			2,289,587,640

	Third Quarter						First Nine Months						Second Quarter						First Six Months
	2021			2020			2021			2020			2022			2021			2022			2021
Net earnings	$	10,644		$	30,413		$	50,909		$	7,123
Net earnings (loss)													$	(43,376	)	$	28,425		$	(37,791	)	$	40,265
Other comprehensive income:
Unrealized appreciation of investments		(89	)		19			(164	)		42			(211	)		12			(447	)		(75	)
Applicable income taxes		20			(4	)		38			(13	)		44			(2	)		95			18
Foreign currency translation		(643	)		791			(616	)		(77	)		(1,751	)		312			(2,067	)		27
Applicable income taxes		6			(3	)		(8	)		34			63			(11	)		52			(14	)
Defined benefit pension plans		54			(24	)		158			86			15			43			41			104
Applicable income taxes		(13	)		8			(42	)		(14	)		(4	)		(9	)		(9	)		(29	)
Other, net		38			16			45			(19	)		68			13			155			7
Other comprehensive income, net		(627	)		803			(589	)		39			(1,776	)		358			(2,180	)		38
Comprehensive income		10,017			31,216			50,320			7,162			(45,152	)		28,783			(39,971	)		40,303
Comprehensive income attributable to noncontrolling interests		288			302			762			423			350			202			472			338
Comprehensive income attributable to Berkshire Hathaway shareholders	$	9,729		$	30,914		$	49,558		$	6,739		$	(45,502	)	$	28,581		$	(40,443	)	$	39,965

	Berkshire Hathaway shareholders’ equity																		Berkshire Hathaway shareholders’ equity
	Common stock and capital in excess of par value			Accumulated other comprehensive income			Retained earnings			Treasury stock			Non- controlling interests			Total			Common stock and capital in excess of par value			Accumulated other comprehensive income			Retained earnings			Treasury stock			Non- controlling interests			Total
For the third quarter and first nine months of 2021
For the second quarter and first six months of 2022
Balance at December 31, 2021																			$	35,600		$	(4,027	)	$	534,421		$	(59,795	)	$	8,731		$	514,930
Net earnings																				—			—			5,460			—			125			5,585
Other comprehensive income, net																				—			(401	)		—			—			(3	)		(404	)
Acquisition of common stock																				—			—			—			(3,111	)		—			(3,111	)
Transactions with noncontrolling interests																				(6	)		—			—			—			(129	)		(135	)
Balance at March 31, 2022																			$	35,594		$	(4,428	)	$	539,881		$	(62,906	)	$	8,724		$	516,865
Net earnings (loss)																				—			—			(43,755	)		—			379			(43,376	)
Other comprehensive income, net																				—			(1,747	)		—			—			(29	)		(1,776	)
Acquisition of common stock																				—			—			—			(1,028	)		—			(1,028	)
Transactions with noncontrolling interests																				(382	)		—			—			—			(650	)		(1,032	)
Balance at June 30, 2022																			$	35,212		$	(6,175	)	$	496,126		$	(63,934	)	$	8,424		$	469,653

For the second quarter and first six months of 2021
Balance at December 31, 2020	$	35,634		$	(4,243	)	$	444,626		$	(32,853	)	$	8,172		$	451,336		$	35,634		$	(4,243	)	$	444,626		$	(32,853	)	$	8,172		$	451,336
Net earnings		—			—			11,711			—			129			11,840			—			—			11,711			—			129			11,840
Other comprehensive income, net		—			(327	)		—			—			7			(320	)		—			(327	)		—			—			7			(320	)
Acquisition of common stock		—			—			—			(6,565	)		—			(6,565	)		—			—			—			(6,565	)		—			(6,565	)
Transactions with noncontrolling interests		4			—			—			—			(119	)		(115	)		4			—			—			—			(119	)		(115	)
Balance at March 31, 2021	$	35,638		$	(4,570	)	$	456,337		$	(39,418	)	$	8,189		$	456,176		$	35,638		$	(4,570	)	$	456,337		$	(39,418	)	$	8,189		$	456,176
Net earnings		—			—			28,094			—			331			28,425			—			—			28,094			—			331			28,425
Other comprehensive income, net		—			351			—			—			7			358			—			351			—			—			7			358
Acquisition of common stock		—			—			—			(6,028	)		—			(6,028	)		—			—			—			(6,028	)		—			(6,028	)
Transactions with noncontrolling interests		5			—			—			—			(136	)		(131	)		5			—			—			—			(136	)		(131	)
Balance at June 30, 2021	$	35,643		$	(4,219	)	$	484,431		$	(45,446	)	$	8,391		$	478,800		$	35,643		$	(4,219	)	$	484,431		$	(45,446	)	$	8,391		$	478,800
Net earnings		—			—			10,344			—			300			10,644
Other comprehensive income, net		—			(615	)		—			—			(12	)		(627	)
Acquisition of common stock		—			—			—			(7,626	)		—			(7,626	)
Transactions with noncontrolling interests		(32	)		—			—			—			(84	)		(116	)
Balance at September 30, 2021	$	35,611		$	(4,834	)	$	494,775		$	(53,072	)	$	8,595		$	481,075

For the third quarter and first nine months of 2020
Balance at December 31, 2019	$	35,666		$	(5,243	)	$	402,493		$	(8,125	)	$	3,772		$	428,563
Net earnings (loss)		—			—			(49,746	)		—			49			(49,697	)
Adoption of new accounting pronouncement		—			—			(388	)		—			—			(388	)
Other comprehensive income, net		—			(1,478	)		—			—			(53	)		(1,531	)
Acquisition of common stock		—			—			—			(1,575	)		—			(1,575	)
Transactions with noncontrolling interests		(39	)		—			—			—			(98	)		(137	)
Balance at March 31, 2020	$	35,627		$	(6,721	)	$	352,359		$	(9,700	)	$	3,670		$	375,235
Net earnings		—			—			26,295			—			112			26,407
Other comprehensive income, net		—			754			—			—			13			767
Acquisition of common stock		—			—			—			(5,115	)		—			(5,115	)
Transactions with noncontrolling interests		(4	)		—			—			—			(37	)		(41	)
Balance at June 30, 2020	$	35,623		$	(5,967	)	$	378,654		$	(14,815	)	$	3,758		$	397,253
Net earnings		—			—			30,137			—			276			30,413
Other comprehensive income, net		—			777			—			—			26			803
Acquisition of common stock		—			—			—			(9,260	)		—			(9,260	)
Transactions with noncontrolling interests		6			—			—			—			—			6
Balance at September 30, 2020	$	35,629		$	(5,190	)	$	408,791		$	(24,075	)	$	4,060		$	419,215

	First Nine Months						First Six Months
	2021			2020			2022			2021
Cash flows from operating activities:
Net earnings	$	50,909		$	7,123
Adjustments to reconcile net earnings to operating cash flows:
Net earnings (loss)							$	(37,791	)	$	40,265
Adjustments to reconcile net earnings (loss) to operating cash flows:
Investment (gains) losses		(37,235	)		(2,032	)		68,589			(32,384	)
Depreciation and amortization		8,013			7,692			5,413			5,345
Other, including asset impairment charges		(717	)		10,934
Other								(2,586	)		33
Changes in operating assets and liabilities:
Losses and loss adjustment expenses		4,809			4,480
Deferred charges reinsurance assumed		709			735
Unpaid losses and loss adjustment expenses								1,505			2,357
Deferred charges - retroactive reinsurance								426			473
Unearned premiums		3,958			2,544			2,384			2,375
Receivables and originated loans		(6,810	)		(3,223	)		(6,372	)		(4,825	)
Other assets		(1,558	)		(1,673	)		(4,686	)		(909	)
Other liabilities		1,928			2,446			1,467			(664	)
Income taxes		7,620			201			(12,988	)		7,493
Net cash flows from operating activities		31,626			29,227			15,361			19,559
Cash flows from investing activities:
Purchases of equity securities		(5,004	)		(22,406	)		(57,269	)		(3,589	)
Sales of equity securities		11,975			28,564			12,044			8,596
Purchases of U.S. Treasury Bills and fixed maturity securities		(106,399	)		(153,897	)		(100,355	)		(99,731	)
Sales of U.S. Treasury Bills and fixed maturity securities		15,945			23,744			54,637			10,814
Redemptions and maturities of U.S. Treasury Bills and fixed maturity securities		103,294			81,252			23,681			77,541
Purchases of loans and finance receivables		(70	)		(619	)		(22	)		(56	)
Collections of loans and finance receivables		283			268			130			218
Acquisitions of businesses, net of cash acquired		(204	)		(111	)		(103	)		(104	)
Purchases of property, plant and equipment and equipment held for lease		(9,244	)		(9,516	)		(6,833	)		(5,663	)
Other		1,505			(1,685	)		(83	)		541
Net cash flows from investing activities		12,081			(54,406	)		(74,173	)		(11,433	)
Cash flows from financing activities:
Proceeds from borrowings of insurance and other businesses		2,952			3,435			6,972			2,949
Repayments of borrowings of insurance and other businesses		(3,010	)		(2,116	)		(1,440	)		(2,481	)
Proceeds from borrowings of railroad, utilities and energy businesses		2,939			6,424			3,189			1,464
Repayments of borrowings of railroad, utilities and energy businesses		(2,609	)		(2,449	)		(1,374	)		(2,546	)
Changes in short term borrowings, net		(689	)		(1,062	)		(85	)		(65	)
Acquisition of treasury stock		(20,192	)		(15,712	)		(4,191	)		(12,560	)
Other		(755	)		(196	)		(1,464	)		(339	)
Net cash flows from financing activities		(21,364	)		(11,676	)		1,607			(13,578	)
Effects of foreign currency exchange rate changes		(98	)		(340	)		(277	)		(112	)
Increase (decrease) in cash and cash equivalents and restricted cash		22,245			(37,195	)		(57,482	)		(5,564	)
Cash and cash equivalents and restricted cash at beginning of year*		48,396			64,632			88,706			48,396
Cash and cash equivalents and restricted cash at end of third quarter*	$	70,641		$	27,437
*Cash and cash equivalents and restricted cash are comprised of the following:
Cash and cash equivalents and restricted cash at end of second quarter*							$	31,224		$	42,832
*Cash and cash equivalents and restricted cash are comprised of:
Beginning of year—
Insurance and Other	$	44,714		$	61,151		$	85,319		$	44,714
Railroad, Utilities and Energy		3,276			3,024			2,865			3,276
Restricted cash included in other assets		406			457			522			406
	$	48,396		$	64,632		$	88,706		$	48,396
End of third quarter—
End of second quarter—
Insurance and Other	$	65,156		$	23,078		$	26,534		$	38,924
Railroad, Utilities and Energy		4,833			3,739			4,074			3,374
Restricted cash included in other assets		652			620			616			534
	$	70,641		$	27,437		$	31,224		$	42,832

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 affiliates 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 Berkshire’s most recently issued Annual Report on Form 10-K (“Annual Report”), which includes information necessary or useful to understanding Berkshire’s 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 Report reflects all 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, our 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 more significant to results of interim periods than 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, ~~changes in the fair values of certain derivative contract liabilities,~~ gains and losses from the periodic revaluation of certain assets and liabilities denominated in foreign currencies and the magnitude of asset impairment charges ~~can~~may cause significant variations in periodic net earnings.

~~The novel coronavirus (“COVID-19”) spread rapidly across~~To varying degrees, the ~~world in 2020 and was declared a~~COVID-19 pandemic ~~by the World Health Organization. The~~continues to affect our operating businesses. Significant government and private sector ~~responses~~actions have been taken since 2020 to ~~contain its~~control the spread ~~began to significantly affect our operating businesses in March~~and mitigate the economic effects of ~~2020. The COVID-19 pandemic adversely affected nearly all of our operations during 2020 and in particular during~~ the ~~second quarter, although the effects varied significantly. Beginning~~virus. Actions in the ~~third quarter~~latter part of ~~2020, many~~2021 and during 2022 included temporary business closures or restrictions of ~~our businesses experienced significantly higher sales and earnings relative~~business activities in various parts of the world in response to the ~~second quarter, reflecting higher customer demand. The extent~~emergence of variants of the virus. Notwithstanding these efforts, significant disruptions of supply chains and higher costs have persisted in 2022. Further, the development of geopolitical conflicts in 2022 have contributed to disruptions of supply chains, resulting in cost increases for commodities, goods and services in many parts of the world. The economic effects from these events over longer terms cannot be reasonably estimated at this time. Risks and uncertainties resulting from the pandemic that may affect our future earnings, cash flows and financial condition include the ability to vaccinate a significant number of people in the U.S. and throughout the world, as well as the long-term effect from the pandemic on the demand for certain of our products and services. Accordingly, 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 under insurance and reinsurance contracts, may be subject to significant adjustments in future periods.

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

In August 2018, the ~~FASB~~Financial Accounting Standards Board issued ~~ASU~~Accounting Standards Update 2018-12 “Targeted Improvements to the Accounting for Long-Duration ~~Contracts.”~~Contracts” (“ASU 2018-12”). ASU 2018-12 requires ~~periodic~~ reassessment of ~~actuarial~~cash flow assumptions at least annually and revision of discount rate assumptions ~~used to value~~each reporting period in valuing policyholder liabilities ~~and deferred acquisition costs~~ of long-duration ~~insurance and reinsurance contracts, with~~contracts. Under ASU 2018-12, the effects offrom changes in cash flow assumptions are reflected in earnings and the effects offrom changes in discount rate assumptions are reflected in other comprehensive income. Currently, the ~~actuarial~~cash flow and discount rate assumptions are ~~established~~set at the contract inception date and not subsequently changed, except under limited circumstances. ASU 2018-12 ~~requires~~is to be applied retrospectively to the earliest period presented in the financial statements, will require new disclosures and is effective for fiscal years beginning after December 15, 2022, with early adoption permitted.

We will adopt ASU 2018-12 as of January 1, 2023 using the modified retrospective method, whereby revised cash flow and discount rate assumptions as of January 1, 2021 (the transition date) are ~~evaluating~~applied to contracts then in-force, with liabilities then remeasured as provided under the standard. The cumulative effects from discount rate assumption changes as of the transition date will be recorded in accumulated other comprehensive income and the cumulative effect from cash flow assumption changes will be recorded in retained earnings. While we have not finalized our assessment of the impact of the adoption as of the transition date, we currently believe that the changes in discount rate assumptions will have a greater effect on our recorded liabilities than changes in cash flow assumptions. We currently estimate that as of January 1, 2021, the adoption of ASU 2018-12 will reduce our consolidated shareholders’ equity between $6 billion and $7 billion from the amount previously reported, primarily due to the low interest rate environment at that time. However, the ultimate impact of adopting ASU 2018-12 will be based on the discount rate and cash flow assumptions determined as of the January 1, 2023 adoption date. We, therefore, continue to evaluate the effect this standard will have on our Consolidated Financial Statements.

Investments in fixed maturity securities as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021 are summarized ~~as follows~~by type below (in millions).

	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
September 30, 2021
June 30, 2022
U.S. Treasury, U.S. government corporations and agencies	$	3,358	$	30	$	—		$	3,388	$	8,893	$	7	$	(159	)	$	8,741
Foreign governments		12,407		38		(27	)		12,418		10,935		14		(122	)		10,827
Corporate bonds		1,510		431		—			1,941		993		257		(3	)		1,247
Other		327		52		(1	)		378		293		30		(2	)		321
	$	17,602	$	551	$	(28	)	$	18,125	$	21,114	$	308	$	(286	)	$	21,136
December 31, 2020
December 31, 2021
U.S. Treasury, U.S. government corporations and agencies	$	3,348	$	55	$	—		$	3,403	$	3,286	$	22	$	(5	)	$	3,303
Foreign governments		11,233		110		(5	)		11,338		10,998		29		(33	)		10,994
Corporate bonds		4,729		464		(2	)		5,191		1,363		412		(1	)		1,774
Other		414		66		(2	)		478		317		47		(1	)		363
	$	19,724	$	695	$	(9	)	$	20,410	$	15,964	$	510	$	(40	)	$	16,434

Investments in foreign governments include securities issued by national and provincial government entities as well as instruments that are unconditionally guaranteed by such entities. As of ~~September~~June 30, ~~2021,~~2022, approximately ~~90%~~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 fixed maturity securities ~~as of September~~at June 30, ~~2021~~2022 are summarized below by contractual maturity ~~dates (in millions).~~dates. Amounts are in millions. Actual maturities may differ from contractual maturities due to ~~early call or~~ prepayment rights held by issuers.

Due in one

year or less

Due after one

year through

five years

Due after five

years through

ten years

Due after

ten years

Mortgage-

backed

securities

Total

Due in one

year or less

Due after one

year through

five years

Due after five

years through

ten years

Due after

ten years

Mortgage-

backed

securities

Total

Amortized cost

9,433

7,225

487

206

251

17,602

10,305

10,057

460

208

21,114

Fair value

9,436

7,283

758

350

298

18,125

10,220

9,888

702

234

21,136

Investments in equity securities as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021 are summarized as follows (in millions).

	Cost Basis		Net Unrealized Gains		Fair Value		Cost Basis		Net Unrealized Gains		Fair Value
September 30, 2021*
June 30, 2022*
Banks, insurance and finance	$	26,809	$	60,931	$	87,740	$	36,837	$	39,655	$	76,492
Consumer products		34,973		119,421		154,394		41,785		118,294		160,079
Commercial, industrial and other		42,406		26,199		68,605		71,100		19,991		91,091
	$	104,188	$	206,551	$	310,739	$	149,722	$	177,940	$	327,662

	Cost Basis		Net Unrealized Gains		Fair Value		Cost Basis		Net Unrealized Gains		Fair Value
December 31, 2020*
December 31, 2021*
Banks, insurance and finance	$	26,312	$	40,167	$	66,479	$	26,822	$	62,236	$	89,058
Consumer products		34,747		111,583		146,330		36,076		154,945		191,021
Commercial, industrial and other		47,561		20,800		68,361		41,707		28,933		70,640
	$	108,620	$	172,550	$	281,170	$	104,605	$	246,114	$	350,719

As of June 30, 2022, we owned 151.6 million shares of American Express Company (“American Express”) common stock representing 20.2% 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 and agreed to passivity commitments to the Board of Governors of the Federal Reserve System, which collectively restrict our ability to exercise significant influence over the operating and financial policies of American Express. Accordingly, we have not applied the equity method of accounting with respect to our investment in American Express and continue to record our investment at fair value.

Our equity security investments also include Occidental Petroleum Corporation (“Occidental”) Cumulative Perpetual Preferred Stock with an aggregate liquidation value of $10 billion and warrants to purchase up to 83.86 million shares of Occidental common stock at an exercise price of $59.62 per share. The preferred stock accrues dividends at 8% per annum and is redeemable at the option of Occidental commencing in 2029 at a redemption price equal to 105% of the liquidation preference, plus any accumulated and unpaid dividends orand is mandatorily redeemable under specified events. Dividends on the preferred stock are payable in cash or, at Occidental’s option, in shares of Occidental common stock. The warrants are exercisable in whole or in part until one year after the redemption of the preferred stock. During the first six months of 2022, we also acquired approximately 17% of the outstanding common stock of Occidental, which had a fair value of $9.3 billion as of June 30, 2022.

Berkshire and its subsidiaries hold investments in certain businesses that are accounted for pursuant to the equity method. Currently, the most significant of these is our investment in the common stock of The Kraft Heinz Company (“Kraft Heinz”). Kraft Heinz ~~is one of the world’s largest manufacturers~~manufactures and ~~marketers of~~markets food and beverage products, including condiments and sauces, cheese and dairy, meals, meats, refreshment beverages, coffee and other grocery products. Berkshire currently owns ~~325,442,152~~26.6% of the outstanding shares of Kraft Heinz common ~~stock representing 26.5% of the outstanding shares.~~stock.

~~Our~~We recorded equity method earnings from our investment in Kraft Heinz ~~produced equity method earnings~~ of ~~$194~~$71 million in the ~~third~~second quarter and ~~$337~~$277 million in the first ~~nine~~six months of ~~2021. In 2020, our Kraft Heinz investment generated~~2022. We recorded an equity method ~~earnings~~loss of ~~$159~~$7 million in the ~~third~~second quarter and ~~losses~~earnings of ~~$180~~$143 million in the first ~~nine months. Our earnings in the first nine~~six months of ~~2020 included charges of approximately $850 million for our proportionate share of the goodwill and intangible asset impairment charges recorded by Kraft Heinz.~~2021. We received dividends on the common stock of ~~$391~~$260 million in ~~each of~~ the first ~~nine~~six months of ~~2021~~both 2022 and ~~2020,~~2021, which were recorded as reductions to the carrying value of our investment.

Shares of Kraft Heinz common stock are ~~publicly-traded~~publicly traded and the fair value of our investment was approximately ~~$12.0~~$12.4 billion at ~~September~~June 30, ~~2021~~2022 and ~~$11.3~~$11.7 billion at December 31, ~~2020.~~2021. The carrying value of our investment was approximately ~~$13.3~~$13.0 billion at ~~September~~June 30, ~~2021~~2022 and $13.1 billion at December 31, ~~2020.~~2021. As of ~~September~~June 30, ~~2021,~~2022, the carrying value of our investment exceeded the fair value based on the quoted market price by ~~approximately 10%.~~5% of the carrying value. We evaluated our investment in Kraft Heinz for ~~impairment.~~impairment as of June 30, 2022. Based on the prevailing facts and circumstances, we concluded recognition of an impairment loss in earnings was not ~~required as of September 30, 2021.~~required.

Summarized consolidated financial information of Kraft Heinz follows (in millions).

September 25,

2021

December 26,

2020

June 25,

2022

December 25,

2021

Assets

94,897

99,830

91,676

93,394

Liabilities

44,659

49,587

42,674

43,942

	Third Quarter				First Nine Months						Second Quarter					First Six Months
	2021		2020		2021		2020				2022		2021			2022		2021
Sales	$	6,324	$	6,441	$	19,333	$	19,246			$	6,554	$	6,615		$	12,599	$	13,009
Net earnings (loss) attributable to Kraft Heinz common shareholders		733		597		1,269		(676	)	*		265		(27	)		1,041		536

Other investments that we account for pursuant to the equity method include Berkadia Commercial Mortgage LLC (“Berkadia”), Pilot Travel Centers LLC (“Pilot”) ~~and~~, Electric Transmission Texas, LLC (“ETT”) and Iroquois Gas Transmission System L.P. (“Iroquois”). The aggregate carrying value of these investments was approximately ~~$3.4~~$4.5 billion as of ~~September~~June 30, ~~2021~~2022 and ~~$4.0~~$4.3 billion as of December 31, ~~2020. Our~~2021. We recorded equity method earnings from these entities in the first ~~nine~~six months ~~were $438~~of $330 million in 2022 and $255 million in 2021. We received aggregate distributions in the first six months of $137 million in 2022 and $982 million in 2021, ~~and $513 million in 2020. During the first nine months of 2021, we received distributions of $1.0 billion from these other investees,~~ including a ~~non-recurring~~special distribution received from Pilot of $849 million in the first ~~quarter.~~quarter of 2021. Additional information concerning these investments follows.

We own a 50% interest in Berkadia, with Jefferies Financial Group Inc. (“Jefferies”) owning the other 50% interest. Berkadia provides capital solutions, ~~investments~~investment sales advisory and mortgage servicing for multifamily and commercial real estate. A source of funding for Berkadia’s operations is through commercial paper, which was $1.47 billion at ~~September~~June 30, ~~2021~~2022 and is limited to $1.5 billion. Berkadia’s commercial paper is supported by a surety policy issued by a Berkshire insurance subsidiary. Jefferies is obligated to indemnify us for one-half of any losses incurred under the policy.

A Berkshire Hathaway Energy ~~Company subsidiary owns a~~(“BHE”) subsidiaries own 50% ~~interest~~noncontrolling interests in ETT, an owner and operator of electric transmission assets in ~~the Electric Reliability Council of~~ Texas, ~~footprint. American Electric Power~~and Iroquois, which owns ~~the other 50% interest.~~ and operates a natural gas pipeline located in New York and Connecticut.

We own a 38.6% interest in Pilot, headquartered in Knoxville, Tennessee. Pilot ~~is the largest operator of~~operates travel centers in North America through more than ~~1,000~~800 retail locations across 44 U.S. states and 6 Canadian provinces and ~~through wholesale distribution.~~is a leading supplier of fuel to third parties. The Haslam family currently owns a 50.1% interest in Pilot and a third party owns the remaining 11.3% interest. We ~~also entered into~~have an agreement to acquire an additional 41.4% interest in Pilot in 2023, with the Haslam family retaining a 20% interest. As a result, Berkshire will become the majority owner of Pilot in 2023.

Investment and derivative contract gains/losses in the ~~third~~second quarter and first ~~nine~~six months of ~~2021~~2022 and ~~2020~~2021 are summarized as follows (in millions).

	Third Quarter						First Nine Months						Second Quarter						First Six Months
	2021			2020			2021			2020			2022			2021			2022			2021
Investment gains (losses):
Equity securities:
Change in unrealized investment gains (losses) during the period on securities held at the end of the period	$	4,759		$	30,837		$	36,163		$	16,458		$	(66,860	)	$	27,014		$	(68,548	)	$	31,548
Investment gains (losses) on securities sold during the period		75			1,330			889			(13,901	)
Investment gains on securities sold during the period														32			144			34			670
		4,834			32,167			37,052			2,557			(66,828	)		27,158			(68,514	)		32,218
Fixed maturity securities:
Gross realized gains		24			12			59			53			6			15			12			35
Gross realized losses		(7	)		(2	)		(20	)		(22	)		(27	)		(12	)		(76	)		(13	)
Other		—			(552	)		144			(556	)		(5	)		12			(11	)		144
Investment gains (losses)		4,851			31,625			37,235			2,032			(66,854	)		27,173			(68,589	)		32,384
Derivative contract gains (losses)		70			(43	)		780			(640	)		(65	)		221			(308	)		710
	$	4,921		$	31,582		$	38,015		$	1,392		$	(66,919	)	$	27,394		$	(68,897	)	$	33,094

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 Consolidated Statements of Cash Flows, we received proceeds from sales of equity securities of approximately $12.0 billion in the first ~~nine~~six months of ~~2021~~2022 and ~~$28.6~~$8.6 billion in the first ~~nine~~six months of ~~2020.~~2021. In the preceding table, investment gains and losses on equity securities sold during the period represent 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. ~~Our taxable~~Taxable gains/losses on equity securities sold are generally the difference between the proceeds from sales and original cost. ~~Taxable~~Equity securities sold produced taxable gains ~~in the third quarter and first nine months~~ of ~~2021 were $941 million and $2.9 billion, respectively, and were $3.9 billion and $666~~$76 million in the ~~third~~second quarter of 2022 and taxable losses of $663 million in the first six months of 2022 compared to taxable gains of $228 million in the second quarter and $2.0 billion in the first ~~nine~~six months of ~~2020, respectively.~~2021.

~~The~~Our derivative contract gains and losses derive from equity index put option contracts written prior to March 2008 on four major equity indexes. ~~Information related to these~~As of June 30, 2022, we had six open contracts, ~~follows (dollars in millions).~~

~~Notional~~which had an aggregate fair value ~~in the preceding table represents the~~liability of $186 million and an aggregate ~~undiscounted amounts payable assuming the~~notional value of each index is zero at each contract’s expiration date. Intrinsic value is the undiscounted liability assuming the contracts are settled based on the index values and foreign currency exchange rates as of the balance sheet date. Substantially all open contracts as of September 30, 2021 will expire by February 2023. Future payments, if any, under any given contract will be required if the index value is below the contract strike price at the contract expiration date. We received aggregate premiums on the contract inception dates of $1.5 billion with respect to unexpired contracts as of September 30, 2021 and we have no counterparty credit risk.$2.5 billion.

	September 30, 2021			December 31, 2020			June 30, 2022			December 31, 2021
Loans and finance receivables before allowances and discounts	$	21,685		$	20,436		$	23,238		$	22,065
Allowances for uncollectible loans		(744	)		(712	)
Allowances for credit losses								(803	)		(765	)
Unamortized acquisition discounts and points		(544	)		(523	)		(558	)		(549	)
	$	20,397		$	19,201		$	21,877		$	20,751

Loans and finance receivables are principally manufactured home loans, and to a lesser extent, ~~commercial~~site-built home loans and ~~site-built home~~commercial loans. Reconciliations of the allowance for credit losses on loans and finance receivables for ~~each of~~ the first ~~nine~~six months of ~~2021~~2022 and ~~2020~~2021 follow (in millions).

							First Six Months
	2021			2020			2022			2021
Balance at beginning of year	$	712		$	167		$	765		$	712
Adoption of ASC 326		—			486
Provision for credit losses		65			177			50			49
Charge-offs, net of recoveries		(33	)		(99	)		(12	)		(22	)
Balance at September 30	$	744		$	731
Balance at June 30							$	803		$	739

As of ~~September~~June 30, ~~2021,~~2022, approximately 99% of manufactured and site-built home ~~loan balances~~loans were evaluated collectively for impairment. As of ~~September~~June 30, ~~2021,~~2022, we considered approximately 97% of ~~the loan balances~~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 ~~September~~June 30, ~~2021~~2022 follows (in millions).

	Origination Year														Origination Year
	2021		2020		2019		2018		2017		Prior		Total		2022		2021		2020		2019		2018		Prior		Total
Performing	$	3,794	$	3,264	$	2,308	$	1,748	$	1,300	$	7,126	$	19,540	$	3,322	$	3,807	$	2,972	$	2,098	$	1,588	$	7,480	$	21,267
Non-performing		2		3		6		6		5		40		62		1		4		7		7		6		43		68
	$	3,796	$	3,267	$	2,314	$	1,754	$	1,305	$	7,166	$	19,602	$	3,323	$	3,811	$	2,979	$	2,105	$	1,594	$	7,523	$	21,335

We are also party to two commercial loan agreements with an ~~agreement~~aggregate carrying value of $1.9 billion at June 30, 2022 and December 31, 2021. The larger of these loans is with Seritage Growth Properties (“Seritage”), which had a carrying value of $1.44 billion as of June 30, 2022 and December 31, 2021. The Seritage loan is pursuant to ~~provide~~ a $2.0 billion term loan facility ~~which expires on July 31, 2023. The~~and the outstanding loan ~~under the facility was approximately $1.6 billion at September 30, 2021 and December 31, 2020, and~~ is secured by mortgages on its real estate properties. InThe Seritage loan agreement, as amended, allows optional loan prepayments without penalty and further provides Seritage with the ~~first quarter~~option to extend the maturity of ~~2020, we provided a~~the loan to ~~Lee Enterprises, Inc. in connection with its acquisition~~July 31, 2025, if the outstanding principal has been reduced to $800 million by the original expiration date of ~~our newspaper operations and the repayment of its then outstanding credit facilities. The loan balance was $483 million as of September 30, 2021 and $524 million at December~~July 31, ~~2020. We are the sole lender to each~~2023. Each of these ~~entities and each of these~~commercial loans is current as to payment status.

	September 30, 2021			December 31, 2020			June 30, 2022			December 31, 2021
Insurance and other:
Insurance premiums receivable	$	16,151		$	14,025		$	17,391		$	15,050
Reinsurance recoverables		4,892			4,805			4,836			4,900
Trade receivables		13,579			11,521			14,511			12,971
Other		3,344			2,637			3,648			3,146
Allowances for uncollectible accounts		(689	)		(678	)
Allowances for credit losses								(708	)		(679	)
	$	37,277		$	32,310		$	39,678		$	35,388
Railroad, utilities and energy:
Trade receivables	$	3,780		$	3,235		$	4,167		$	3,678
Other		720			438			789			650
Allowances for uncollectible accounts		(176	)		(131	)
Allowances for credit losses								(141	)		(151	)
	$	4,324		$	3,542		$	4,815		$	4,177

Provisions for credit losses in the first ~~nine~~six months with respect to receivables summarized above were ~~$335~~$211 million in ~~2021~~2022 and ~~$449~~$209 million in ~~2020.~~2021. Charge-offs, net of recoveries, in the first ~~nine~~six months were ~~$279~~$189 million in ~~2021~~2022 and ~~$238~~$171 million in ~~2020.~~2021.

	September 30, 2021		December 31, 2020		June 30, 2022		December 31, 2021
Raw materials	$	5,389	$	4,821	$	6,558	$	5,743
Work in process and other		3,290		2,541		3,750		3,192
Finished manufactured goods		4,446		4,412		5,396		4,530
Goods acquired for resale		7,066		7,434		8,856		7,489
	$	20,191	$	19,208	$	24,560	$	20,954

A summary of property, plant and equipment of our insurance and other businesses follows (in millions).

	September 30, 2021			December 31, 2020			June 30, 2022			December 31, 2021
Land, buildings and improvements	$	13,846		$	13,799		$	14,055		$	14,070
Machinery and equipment		25,849			25,488			26,082			26,063
Furniture, fixtures and other		4,670			4,530			4,872			4,640
		44,365			43,817			45,009			44,773
Accumulated depreciation		(23,643	)		(22,617	)		(24,492	)		(23,939	)
	$	20,722		$	21,200		$	20,517		$	20,834

A summary of property, plant and equipment of railroad and utilities and energy businesses follows (in millions). The utility generation, transmission and distribution systems and interstate natural gas pipeline assets are owned by regulated public utility and natural gas pipeline subsidiaries.

	September 30, 2021			December 31, 2020			June 30, 2022			December 31, 2021
Railroad:
Land, track structure and other roadway	$	65,167		$	63,824		$	65,821		$	65,843
Locomotives, freight cars and other equipment		13,784			13,523			15,957			13,822
Construction in progress		1,030			916			1,186			1,027
		79,981			78,263			82,964			80,692
Accumulated depreciation		(14,641	)		(13,175	)		(16,988	)		(14,978	)
		65,340			65,088			65,976			65,714
Utilities and energy:
Utility generation, transmission and distribution systems		89,026			86,730			90,810			90,223
Interstate natural gas pipeline assets		17,044			16,667			17,547			17,423
Independent power plants and other assets		13,009			12,671			14,488			13,695
Construction in progress		4,343			3,308			4,774			4,196
		123,422			119,376			127,619			125,537
Accumulated depreciation		(35,361	)		(33,248	)		(36,824	)		(35,721	)
		88,061			86,128			90,795			89,816
	$	153,401		$	151,216		$	156,771		$	155,530

Depreciation expense for the first ~~nine~~six months of ~~2021~~2022 and ~~2020~~2021 is summarized below (in millions).

	First Nine Months					First Six Months
	2021			2020		2022		2021
Insurance and other	$	1,725	��	$	1,725	$	1,127	$	1,148
Railroad, utilities and energy		4,485			4,105		3,091		2,990
	$	6,210		$	5,830	$	4,218	$	4,138

Equipment held for lease includes railcars, aircraft, over-the-road trailers, intermodal tank containers, cranes, storage units and furniture. ~~A summary of equipment~~Equipment held for lease ~~follows~~is summarized below (in millions).

	September 30, 2021			December 31, 2020			June 30, 2022			December 31, 2021
Railcars	$	9,482		$	9,402		$	9,558		$	9,448
Aircraft		8,852			8,204			9,798			9,234
Other		5,031			4,868			5,116			5,053
		23,365			22,474			24,472			23,735
Accumulated depreciation		(8,613	)		(7,873	)		(9,347	)		(8,817	)
	$	14,752		$	14,601		$	15,125		$	14,918

Depreciation expense for equipment held for lease in the first ~~nine~~six months was ~~$861~~$593 million in ~~2021~~2022 and ~~$900~~$570 million in ~~2020.~~2021. Fixed and variable operating lease revenues for the ~~third~~second quarter and first ~~nine~~six months of ~~2021~~2022 and ~~2020~~2021 are summarized below (in millions).

	Third Quarter				First Nine Months				Second Quarter				First Six Months
	2021		2020		2021		2020		2022		2021		2022			2021
Fixed lease revenue	$	1,151	$	1,047	$	3,318	$	3,205	$	1,264	$	1,105	$	2,452		$	2,167
Variable lease revenue		414		269		1,018		700		623		342		1,107	��		604
	$	1,565	$	1,316	$	4,336	$	3,905	$	1,887	$	1,447	$	3,559		$	2,771

Reconciliations of the changes in the carrying value of goodwill for the first ~~nine~~six months of ~~2021~~2022 and for the year ended December 31, ~~2020~~2021 follow (in millions).

	September 30, 2021			December 31, 2020			June 30, 2022			December 31, 2021
Balance at beginning of year	$	73,734		$	81,882		$	73,875		$	73,734
Acquisitions of businesses		182			1,758
Impairment charges		—			(10,033	)
Business acquisitions								35			353
Other, including foreign currency translation		(146	)		127			(292	)		(212	)
Balance at end of period*	$	73,770		$	73,734		$	73,618		$	73,875

~~Other intangible assets~~The gross carrying amounts and related accumulated amortization of other intangible assets are summarized as follows (in millions).

	September 30, 2021				December 31, 2020				June 30, 2022						December 31, 2021
	Gross carrying amount		Accumulated amortization		Gross carrying amount		Accumulated amortization		Gross carrying amount		Accumulated amortization		Net carrying value		Gross carrying amount		Accumulated amortization		Net carrying value
Insurance and other:
Customer relationships	$	27,331	$	6,281	$	27,374	$	5,756	$	27,308	$	6,763	$	20,545	$	27,335	$	6,450	$	20,885
Trademarks and trade names		5,178		797		5,206		779		5,174		811		4,363		5,176		802		4,374
Patents and technology		4,763		3,442		4,766		3,313		4,846		3,598		1,248		4,763		3,484		1,279
Other		3,317		1,426		3,339		1,375		3,304		1,468		1,836		3,390		1,442		1,948
	$	40,589	$	11,946	$	40,685	$	11,223	$	40,632	$	12,640	$	27,992	$	40,664	$	12,178	$	28,486
Railroad, utilities and energy:
Customer relationships	$	678	$	388	$	678	$	361	$	678	$	412	$	266	$	678	$	396	$	282
Trademarks, trade names and other		1,005		133		1,003		98		1,014		168		846		1,015		146		869
	$	1,683	$	521	$	1,681	$	459	$	1,692	$	580	$	1,112	$	1,693	$	542	$	1,151

Intangible asset amortization expense in the first ~~nine~~six months was ~~$942~~$602 million in ~~2021~~2022 and ~~$962~~$637 million in ~~2020.~~2021. Intangible assets with indefinite lives were ~~$18.3~~$18.4 billion as of ~~September~~June 30, ~~2021~~2022 and $18.5 billion as of December 31, ~~2020~~2021 and primarily related to certain customer relationships and trademarks and trade names.

During 2020, we concluded it was necessary to reevaluate goodwill and indefinite-lived intangible assets of certain of our reporting units for impairment due to the disruptions arising from the COVID-19 pandemic. We recorded pre-tax goodwill impairment charges of approximately $10 billion and pre-tax indefinite-lived intangible asset impairment charges of $638 million in the second quarter of 2020. Approximately $10 billion of these charges related to Precision Castparts Corp. (“PCC”), the largest business within Berkshire's manufacturing segment. The carrying value of PCC-related goodwill and indefinite-lived intangible assets prior to the impairment charges was approximately $31 billion.

Our liabilities for unpaid losses and loss adjustment expenses (also referred to as “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”) claims. A reconciliation of the changes in claim liabilities, excluding liabilities under retroactive reinsurance contracts (see Note 14), for each of the ~~nine-month~~six-month periods ending ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 follows (in millions).

	2021			2020			2022			2021
Balances at beginning of year:
Gross liabilities	$	79,854		$	73,019		$	86,664		$	79,854
Reinsurance recoverable on unpaid losses		(2,912	)		(2,855	)		(2,960	)		(2,912	)
Net liabilities		76,942			70,164			83,704			76,942
Incurred losses and loss adjustment expenses:
Current accident year events		38,447			31,777
Prior accident years’ events		(2,151	)		69
Current accident year								27,427			23,651
Prior accident years								(887	)		(1,064	)
Total		36,296			31,846			26,540			22,587
Paid losses and loss adjustment expenses:
Current accident year events		(15,277	)		(11,691	)
Prior accident years’ events		(15,076	)		(15,259	)
Current accident year								(10,085	)		(8,406	)
Prior accident years								(13,820	)		(11,169	)
Total		(30,353	)		(26,950	)		(23,905	)		(19,575	)
Foreign currency translation adjustment		(119	)		124
Balances at September 30:
Foreign currency effect								(568	)		31
Balances at June 30:
Net liabilities		82,766			75,184			85,771			79,985
Reinsurance recoverable on unpaid losses		2,988			2,857			2,789			2,973
Gross liabilities	$	85,754		$	78,041		$	88,560		$	82,958

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”). ~~Current accident year incurred~~Incurred and paid losses ~~in 2021 included approximately $2.7 billion from significant catastrophe events (losses in excess~~and loss adjustment expenses are net of ~~$100 million per event) in~~reinsurance recoveries. In the ~~U.S. and Europe, including approximately $2.2 billion in the third quarter, primarily from Hurricane Ida and floods in Europe.~~

Wefirst six months, we recorded a net ~~reduction~~reductions of estimated ultimate liabilities for prior accident years of ~~$2.2~~$887 million in 2022 and $1.1 billion in ~~the first nine months of~~ 2021, ~~compared to a net increase of $69 million in 2020,~~ which produced a corresponding ~~decrease in 2021 and an increase in 2020~~reductions in incurred losses and loss adjustment ~~expenses.~~expenses in those periods. These ~~amounts represented 2.8% in 2021 and 0.1% in 2020~~reductions, as percentages of the net liabilities at the beginning of each ~~year.~~year, were 1.1% in 2022 and 1.4% in 2021.

Estimated ultimate liabilities for prior ~~years’ loss events with respect to~~accident years from primary insurance ~~were reduced $1.6 billion~~ in the first ~~nine~~six months ~~of 2021 compared to $273~~were reduced by $313 million in ~~2020.~~2022 and $1.1 billion in 2021. The ~~reduction~~reductions in ~~2021~~each period derived primarily from private passenger automobile, ~~claims, and to a lesser extent~~ medical professional liability and workers’ compensation claims and in 2022 were partly offset by increases in ultimate liabilities for other casualty claims. Estimated ultimate liabilities for prior ~~years’ loss events related~~years attributable to property and casualty reinsurance ~~assumed~~ in the first ~~nine~~six months decreased ~~$564~~$574 million in ~~2021~~2022 and increased ~~$342~~$35 million in ~~2020, which included increased provisions for legacy casualty exposures.~~2021.

Retroactive reinsurance policies provide indemnification of losses and loss adjustment expenses of short-duration insurance contracts with respect to underlying loss events that occurred prior to the contract inception date. Claims payments may commence immediately after the contract date or, when applicable, ~~once~~after a contractual retention amount has been reached. Reconciliations of the changes in estimated liabilities for retroactive reinsurance unpaid losses and loss adjustment expenses (“claim liabilities”) and related deferred charges ~~reinsurance assumed~~ for each of the ~~nine-month~~six-month periods ending ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 follow (in millions).

	2021						2020						2022						2021
	Unpaid losses and loss adjustment expenses			Deferred charges reinsurance assumed			Unpaid losses and loss adjustment expenses			Deferred charges reinsurance assumed			Unpaid losses and loss adjustment expenses			Deferred charges - retroactive reinsurance			Unpaid losses and loss adjustment expenses			Deferred charges - retroactive reinsurance
Balances at beginning of year	$	40,966		$	(12,441	)	$	42,441		$	(13,747	)	$	38,256		$	(10,639	)	$	40,966		$	(12,441	)
Incurred losses and loss adjustment expenses:
Current year contracts		82			—			—			—			—			—			82			—
Prior years’ contracts		(9	)		709			131			735			(14	)		426			(3	)		473
Total		73			709			131			735			(14	)		426			79			473
Paid losses and loss adjustment expenses		(1,318	)		—			(786	)		—			(1,008	)		—			(808	)		—
Balances at September 30	$	39,721		$	(11,732	)	$	41,786		$	(13,012	)
Balances at June 30													$	37,234		$	(10,213	)	$	40,237		$	(11,968	)
Incurred losses and loss adjustment expenses, net of deferred charges	$	782					$	866					$	412					$	552

In 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 ~~begins.~~began. Incurred losses and loss adjustment expenses in the first six months for prior years’ contracts were ~~$700~~$412 million in 2022 and $470 million in 2021 and ~~$866 million in 2020, which consisted of~~included recurring amortization of deferred charges and the ~~effects~~effect of changes in the ~~expected~~ timing and amount of expected future loss payments. ~~Berkshire’s~~Currently, our largest retroactive reinsurance contract is between our subsidiary, National Indemnity Company, ~~(“NICO”), is party to a contract with~~and certain subsidiaries of American International Group, Inc. (collectively, “AIG”)~~, in which NICO’s ultimate liability is contractually limited to $20 billion. Claim payments to AIG commenced in 2021.~~. Our estimated ~~unpaid~~ claim liabilities with regard to the AIG contract were approximately ~~$16.8~~$15.2 billion at ~~September~~June 30, ~~2021, reflecting paid claims of $837 million during the first nine months of 2021,~~2022 and ~~$17.7~~$15.8 billion at December 31, ~~2020.~~2021. Deferred charges related to the AIG contract were ~~approximately $5.0~~$4.24 billion at ~~September~~June 30, ~~2021~~2022 and ~~$5.4~~$4.45 billion at December 31, ~~2020.~~2021.

Notes payable and other borrowings are summarized below (in millions). The weighted average interest rates and maturity date ranges shown in the following tables are based on borrowings as of ~~September~~June 30, ~~2021.~~2022.

	Weighted Average Interest Rate			September 30, 2021		December 31, 2020		Weighted Average Interest Rate			June 30, 2022		December 31, 2021
Insurance and other:
Berkshire Hathaway Inc. (“Berkshire”):
U.S. Dollar denominated due 2022-2047		3.3	%	$	6,817	$	8,308
U.S. Dollar denominated due 2023-2047									3.3	%	$	6,225	$	6,820
Euro denominated due 2023-2041		1.0	%		7,934		8,326		1.0	%		7,189		7,792
Japanese Yen denominated due 2023-2060		0.6	%		7,028		6,031		0.6	%		6,706		6,797
Berkshire Hathaway Finance Corporation (“BHFC”):
U.S. Dollar denominated due 2022-2051		3.6	%		10,757		10,766
U.S. Dollar denominated due 2027-2052									3.6	%		14,455		10,758
Great Britain Pound denominated due 2039-2059		2.5	%		2,315		2,347		2.5	%		2,093		2,325
Other subsidiary borrowings due 2021-2045		4.1	%		4,497		4,682
Euro denominated due 2030-2034									1.8	%		1,304		—
Other subsidiary borrowings due 2022-2045									4.1	%		4,375		4,438
Subsidiary short-term borrowings		2.8	%		297		1,062		3.7	%		293		342
				$	39,645	$	41,522				$	42,640	$	39,272

In ~~the first nine months of 2021,~~January 2022, Berkshire repaid ~~€550~~$600 million ~~and $1.5 billion~~ of maturing senior ~~notes. In January 2021, Berkshire~~notes and issued ~~€600 million of 0.5% senior notes due in 2041. In April 2021, Berkshire issued ¥160~~¥128.5 billion (approximately ~~$1.5~~$1.1 billion) of senior notes with maturity dates ranging from ~~2026~~2027 to ~~2041~~2052 and a weighted average interest rate of 0.5%.

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 equipment held for lease of certain subsidiaries. BHFC borrowings are fully and unconditionally guaranteed by Berkshire. In ~~January 2021,~~March 2022, BHFC issued $4.5 billion of senior notes with maturity dates ranging from 2027 to 2052 with a weighted average interest rate of 3.4% and €1.25 billion (approximately $1.4 billion) of senior notes maturing in 2030 and 2034 with a weighted average interest rate of 1.8%. In May 2022, BHFC repaid ~~$750~~$775 million of maturing senior ~~notes and issued $750 million of 2.5% senior notes due in 2051.~~notes.

The carrying values of Berkshire and BHFC non-U.S. Dollar denominated senior notes (€~~6.9~~8.15 billion, £1.75 billion and ~~¥785.5~~¥914 billion par at ~~September~~June 30, ~~2021)~~2022) reflect the applicable exchange rates as of ~~the~~each balance sheet ~~dates.~~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 resulted in pre-tax gains of ~~$264~~$1.4 billion in the second quarter and $2.1 billion in the first six months of 2022 as compared to pre-tax losses of $45 million in the ~~third~~second quarter and ~~$939~~pre-tax gains of $675 million in the first ~~nine~~six months of 2021. ~~In 2020, exchange rate changes produced pre-tax losses of $549 million in the third quarter and $447 million in the first nine months.~~

~~In addition to BHFC borrowings,~~ Berkshire ~~guaranteed approximately $3.9 billion~~also guarantees debt of other ~~subsidiary borrowings~~subsidiaries, aggregating approximately $3.8 billion at ~~September~~June 30, ~~2021.~~2022. Generally, Berkshire’s guarantee of a subsidiary’s debt obligation is an absolute, unconditional and irrevocable guarantee for the full and prompt payment when due of all payment obligations.

	Weighted Average Interest Rate			September 30, 2021		December 31, 2020		Weighted Average Interest Rate			June 30, 2022		December 31, 2021
Railroad, utilities and energy:
Berkshire Hathaway Energy Company (“BHE”) and subsidiaries:
BHE senior unsecured debt due 2023-2051		4.3	%	$	13,001	$	13,447
Subsidiary and other debt due 2021-2064		4.1	%		37,096		36,420
BHE senior unsecured debt due 2023-2053									4.3	%	$	13,992	$	13,003
Subsidiary and other debt due 2022-2064									4.1	%		37,125		36,759
Short-term borrowings		1.6	%		1,968		2,286		2.8	%		1,948		2,009
Burlington Northern Santa Fe ("BNSF") and subsidiaries due 2021-2097		4.5	%		23,255		23,220
Burlington Northern Santa Fe ("BNSF") and subsidiaries due 2022-2097									4.5	%		23,376		23,219
				$	75,320	$	75,373				$	76,441	$	74,990

BHE subsidiary debt represents amounts issued pursuant to separate financing agreements. 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, which pertain to leverage ratios, interest coverage ratios and/or debt service coverage ratios. In April 2022, BHE issued $1.0 billion of 4.6% senior notes due in 2053. During the first ~~nine~~six months of ~~2021,~~2022, BHE ~~and its~~ subsidiaries ~~repaid $1.7 billion of term debt and~~ issued ~~$2.1~~approximately $1.3 billion of term debt with a weighted average interest rate of ~~3.0%~~3.5% and ~~maturities~~maturity dates ranging from ~~2051~~2024 to 2052.

BNSF’s borrowings are primarily senior unsecured debentures. In June 2022, BNSF issued $1.0 billion of 4.45% debentures due in 2053. During the first ~~nine~~six months of ~~2021,~~2022, BNSF repaid ~~$888~~$800 million of ~~debt and issued $925 million of 3.3%~~ term ~~debt due in 2051.~~debt. As of ~~September~~June 30, ~~2021,~~2022, BNSF, BHE and their subsidiaries were in compliance with all applicable debt covenants. Berkshire does not guarantee any debt, borrowings or lines of credit of BNSF, BHE or their subsidiaries.

~~As of September 30, 2021, our~~Our subsidiaries ~~had~~have unused lines of credit and commercial paper capacity ~~aggregating approximately $10.5 billion~~ to support short-term borrowing programs and provide additional liquidity. ~~Such unused~~Unused lines of credit were approximately $10.3 billion at June 30, 2022, which included approximately $8.8 billion related to BHE and its subsidiaries.

Our financial assets and liabilities are summarized below as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, 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 their fair values.

	Carrying Value		Fair Value		Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Carrying Value		Fair Value		Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
September 30, 2021
June 30, 2022
Investments in fixed maturity securities:
U.S. Treasury, U.S. government corporations and agencies	$	3,388	$	3,388	$	3,345	$	43	$	—	$	8,741	$	8,741	$	8,704	$	37	$	—
Foreign governments		12,418		12,418		11,074		1,344		—		10,827		10,827		10,367		460		—
Corporate bonds		1,941		1,941		—		1,941		—		1,247		1,247		—		1,247		—
Other		378		378		—		378		—		321		321		—		321		—
Investments in equity securities		310,739		310,739		298,633		8		12,098		327,662		327,662		315,715		7		11,940
Investment in Kraft Heinz common stock		13,290		11,983		11,983		—		—		12,959		12,412		12,412		—		—
Loans and finance receivables		20,397		21,743		—		2,391		19,352		21,877		22,827		—		2,048		20,779
Derivative contract assets ⁽¹⁾		540		540		15		407		118		669		669		27		541		101
Derivative contract liabilities:
Railroad, utilities and energy ⁽¹⁾		130		130		3		69		58
Equity index put options		286		286		—		—		286
Derivative contract liabilities ⁽¹⁾												617		617		14		345		258
Notes payable and other borrowings:
Insurance and other		39,645		42,851		—		42,810		41		42,640		39,474		—		39,430		44
Railroad, utilities and energy		75,320		87,965		—		87,965		—		76,441		73,513		—		73,513		—
December 31, 2020
December 31, 2021
Investments in fixed maturity securities:
U.S. Treasury, U.S. government corporations and agencies	$	3,403	$	3,403	$	3,358	$	45	$	—	$	3,303	$	3,303	$	3,261	$	42	$	—
Foreign governments		11,338		11,338		9,259		2,079		—		10,994		10,994		10,286		708		—
Corporate bonds		5,191		5,191		—		5,191		—		1,774		1,774		—		1,774		—
Other		478		478		—		478		—		363		363		—		363		—
Investments in equity securities		281,170		281,170		271,848		38		9,284		350,719		350,719		339,225		8		11,486
Investment in Kraft Heinz common stock		13,336		11,280		11,280		—		—		13,112		11,683		11,683		—		—
Loans and finance receivables		19,201		20,554		—		2,692		17,862		20,751		22,174		—		2,178		19,996
Derivative contract assets ⁽¹⁾		270		270		1		72		197		329		329		6		230		93
Derivative contract liabilities:
Railroad, utilities and energy ⁽¹⁾		121		121		6		96		19
Equity index put options		1,065		1,065		—		—		1,065
Derivative contract liabilities ⁽¹⁾												376		376		2		150		224
Notes payable and other borrowings:
Insurance and other		41,522		46,676		—		46,665		11		39,272		42,339		—		42,292		47
Railroad, utilities and energy		75,373		92,593		—		92,593		—		74,990		87,065		—		87,065		—

The fair values of substantially all of our financial instruments were measured using market or income approaches. The hierarchy for measuring fair value consists of Levels 1 through 3, which are described below.

Level 1 – Inputs represent unadjusted quoted prices for identical assets or liabilities exchanged in active markets.

Level 2 – Inputs include directly or indirectly observable inputs (other than Level 1 inputs) such as quoted prices for similar assets or liabilities exchanged in active or inactive markets; quoted prices for identical assets or liabilities exchanged in inactive markets; other inputs that may be considered in fair value determinations of the assets or liabilities, such as interest rates and yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates; and inputs that are derived principally from or corroborated by observable market data by correlation or 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 instruments of the issuer or entities in the same industry sector.

Level 3 – Inputs include unobservable inputs used in the measurement of assets and liabilities. Management is required to use its own assumptions regarding unobservable inputs because there is little, if any, market activity in the assets or liabilities and it may be unable to corroborate the related observable inputs. Unobservable inputs require management to make certain projections and assumptions about the information that would be used by market participants in valuing assets or liabilities.

Reconciliations of significant assets and liabilities measured and carried at fair value on a recurring basis with the use of significant unobservable inputs (Level 3) for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 follow (in millions).

	Balance at beginning of year			Gains (losses) included in earnings			Acquisitions, dispositions and settlements			Balance at September 30			Balance at beginning of year			Gains included in earnings		Acquisitions, dispositions and settlements		Transfers out of Level 3		Balance at June 30
Investments in equity securities:
2022													$	11,480		$	455	$	—	$	—	$	11,935
2021	$	8,978		$	1,713		$	1,100		$	11,791			8,978			1,559		1,100		—		11,637
2020		10,405			(2,235	)		(1	)		8,169

Equity index put option contract liabilities:
2021		(1,065	)		780			(1	)		(286	)		(1,065	)		710		—		—		(355	)
2020		(968	)		(640	)		61			(1,547	)

Quantitative information as of ~~September~~June 30, ~~2021~~2022 with respect to significant assets and liabilities measured and carried at fair value on a recurring basis with the use of significant unobservable inputs (Level 3) follows (dollars in millions).

Fair

Value

Principal Valuation

Techniques

Unobservable

Inputs

Weighted

Average

Fair

Value

Principal Valuation

Techniques

Unobservable

Inputs

Weighted

Average

Investments in equity securities:

Preferred stock

11,179

Discounted cash flow

Expected duration

7 years

10,051

Discounted cash flow

Expected duration

7 years

Discount for transferability

restrictions and subordination

355 basis points

Discount for transferability

restrictions and subordination

372 bps

Common stock warrants

612

Warrant pricing model

Expected duration

8 years

1,884

Warrant pricing model

Expected duration

7 years

Volatility

37%

Volatility

38%

Equity index put option contract liabilities

286

Option pricing model

Volatility

18%

Investments in equity securities in the preceding table include our investments in certain preferred stocks and common stock warrants that do not have readily determinable market values as defined under GAAP. These investments are subject to contractual restrictions on transferability and may contain provisions that 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 subordination in liquidation. In valuing the common stock warrants, we used a warrant valuation model. While most of the inputs to the model are observable, we made assumptions regarding the expected duration and volatility of the warrants.

Our equity index put option derivative contracts are illiquid and contain contract terms that are not standard in derivatives markets. For example, we are not required to post collateral under most of our contracts. We determine the fair value of the equity index put option contract liabilities based on the Black-Scholes option valuation model.

Changes in Berkshire’s issued, treasury and outstanding common stock during the first ~~nine~~six months of ~~2021~~2022 are shown in the table below. In addition to our common stock, 1,000,000 shares of preferred stock are authorized, but NaN are issued.

Each Class A common share is entitled to 1 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 stock. 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, 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 ~~1,493,097~~1,468,461 shares outstanding as of ~~September~~June 30, ~~2021~~2022 and ~~1,543,960~~1,477,429 shares outstanding as of December 31, ~~2020.~~2021.

Since 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 Class A share. Average equivalent Class A shares outstanding represents average Class A shares outstanding plus one-fifteen-hundredth (1/1,500) of the average Class B shares outstanding. Average equivalent Class B shares outstanding represents average Class B shares outstanding plus 1,500 times the average Class A shares outstanding.

Berkshire’s common stock repurchase program permits Berkshire to repurchase its Class A and Class B shares any time that Warren Buffett, Berkshire’s Chairman of the Board and Chief Executive Officer, and Charlie Munger, Vice Chairman of the Board, believe that the repurchase price is below Berkshire’s intrinsic value, conservatively determined. The program continues to allow share repurchases in the open market or through privately negotiated transactions and does not specify a maximum number of shares to be repurchased. However, repurchases will not be made if they would reduce the total value of Berkshire’s consolidated cash, cash equivalents and U.S. Treasury Bills 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.

Our consolidated effective income tax rates were ~~14.7% for~~21.8% in the ~~third~~second quarter and ~~18.8% for~~22.4% in the first ~~nine~~six months of ~~2021~~2022 compared to ~~19.8% for~~20.4% in the ~~third~~second quarter and ~~30.8% for~~19.9% in the first ~~nine~~six months of ~~2020.~~2021. Our effective income tax rate normally reflects recurring benefits from dividends-received deductions applicable 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, ~~the magnitude of~~including investment gains or losses with respect 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.

A summary of the net changes in after-tax accumulated other comprehensive income attributable to Berkshire Hathaway shareholders for the ~~nine~~six months ending ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 follows (in millions).

	Unrealized appreciation of investments, net			Foreign currency translation			Defined benefit pension plans			Other			Accumulated other comprehensive income			Unrealized appreciation of fixed maturity securities, net			Foreign currency translation			Defined benefit pension plans			Other			Accumulated other comprehensive income
First nine months of 2021
First six months of 2022
Balance at beginning of year	$	536		$	(3,082	)	$	(1,645	)	$	(52	)	$	(4,243	)	$	369		$	(4,092	)	$	(347	)	$	43		$	(4,027	)
Other comprehensive income, net		(126	)		(619	)		112			42			(591	)		(352	)		(1,971	)		27			148			(2,148	)
Balance at end of period	$	410		$	(3,701	)	$	(1,533	)	$	(10	)	$	(4,834	)	$	17		$	(6,063	)	$	(320	)	$	191		$	(6,175	)

First nine months of 2020
First six months of 2021
Balance at beginning of year	$	481		$	(4,346	)	$	(1,369	)	$	(9	)	$	(5,243	)	$	536		$	(3,082	)	$	(1,645	)	$	(52	)	$	(4,243	)
Other comprehensive income, net		29			(28	)		67			(15	)		53			(58	)		(1	)		73			10			24
Balance at end of period	$	510		$	(4,374	)	$	(1,302	)	$	(24	)	$	(5,190	)	$	478		$	(3,083	)	$	(1,572	)	$	(42	)	$	(4,219	)

A summary of supplemental cash flow information is presented in the following table (in millions).

	First Nine Months				First Six Months
	2021		2020		2022		2021
Cash paid during the period for:
Income taxes	$	4,002	$	2,715	$	1,951	$	2,508
Interest:
Insurance and other		1,040		892		567		699
Railroad, utilities and energy		2,335		2,174		1,564		1,580

We are parties in a variety of legal actions that routinely arise out of the normal course of business, including legal actions seeking to establish liability directly through insurance contracts or indirectly through reinsurance contracts issued by Berkshire subsidiaries. Plaintiffs occasionally seek punitive or exemplary damages. We do not believe that such normal and routine litigation will have a material effect on our financial condition or results of operations. Berkshire and certain of its subsidiaries are also involved in other kinds of legal actions, some of which assert or may assert claims or seek to impose fines and penalties. We believe that any liability that may arise as a result of other pending legal actions will not have a material effect on our consolidated financial condition or results of operations.

~~On November 1, 2020,~~ Berkshire ~~Hathaway Energy~~and Alleghany Corporation (“~~BHE”~~Alleghany”) entered into a definitive agreement and plan of merger dated as of March 20, 2022, whereby Berkshire will acquire all of Alleghany’s outstanding common stock for cash of approximately $11.6 billion. The Alleghany shareholders voted to approve and adopt the agreement and plan of merger on June 9, 2022. The acquisition of Alleghany is expected to close in the fourth quarter of 2022 and is subject to the receipt of various regulatory approvals and customary closing conditions. Alleghany owns property and casualty reinsurance and insurance businesses as well as a diverse portfolio of non-financial businesses.

In June 2022, BHE acquired the BHE common stock held by Greg Abel, Berkshire’s Vice Chairman - non-insurance operations, for $870 million. The purchase was pursuant to the terms of a ~~large portion~~shareholders agreement between Berkshire, BHE and BHE’s non-controlling shareholders. Berkshire recorded a charge of $362 million to capital in excess of par value for the excess of the natural gas transmission and storage business of Dominion Energy, Inc. (“Dominion”) for approximately $2.5 billion. The acquisition included a partial ownership of a liquefied natural gas export, import and storage facility (“Cove Point”), consisting of 100% ofconsideration paid over the general partnership interest and 25% of the limited partnership interests. We treat Cove Point as a consolidated subsidiary because we have the power to direct the activities that most significantly affect its economic performance and the obligation to absorb losses and the right to receive benefits which could be significant to Cove Point. The faircarrying value of the ~~assets~~ acquired was $13.4 billion, including residual goodwill of $1.7 billion, and the fair value of the liabilities assumed was $7.0 billion, including the assumption of approximately $5.6 billion of debt. We also recorded noncontrolling interests of $3.9 billion attributable to limited partnership interests in Cove Point that are held by third parties. In addition, BHE previously agreed to acquire certain other of Dominion’s pipeline business for approximately $1.3 billion. Effective July 9, 2021, BHE and Dominion agreed to terminate this planned transaction due to ongoing uncertainty in obtaining the necessary regulatory approvals.interest.

We recognize revenue when a good or service is transferred to a customer. A good or service is transferred when or as the customer obtains control of that good or service. Revenues are based on the consideration we expect to receive in connection with our promises to deliver goods and services to our customers.

The following tables summarize customer contract revenues disaggregated by reportable segment and the source of the revenue for the ~~third~~second quarter and first ~~nine~~six months of ~~2021~~2022 and ~~2020~~2021 (in millions). Other ~~revenues included in consolidated revenues were primarily insurance premiums earned, interest, dividend and other investment income and leasing~~ revenues, which are not considered to be revenues from contracts with customers under ~~GAAP.~~GAAP, are primarily insurance premiums earned, interest, dividend and other investment income and leasing revenues.

	Manufacturing		McLane Company		Service and Retailing		BNSF		Berkshire Hathaway Energy		Insurance, Corporate and Other		Total		Manufacturing		McLane		Service and Retailing		BNSF		Berkshire Hathaway Energy		Insurance, Corporate and other		Total
Three months ending September 30, 2021
Three months ending June 30, 2022
Manufactured products:
Industrial and commercial products	$	5,600	$	—	$	43	$	—	$	—	$	—	$	5,643	$	6,142	$	—	$	48	$	—	$	—	$	—	$	6,190
Building products		5,005		—		—		—		—		—		5,005		5,970		—		—		—		—		—		5,970
Consumer products		4,758		—		—		—		—		—		4,758		5,509		—		—		—		—		—		5,509
Grocery and convenience store distribution		—		7,933		—		—		—		—		7,933		—		7,979		—		—		—		—		7,979
Food and beverage distribution		—		4,478		—		—		—		—		4,478		—		5,002		—		—		—		—		5,002
Auto sales		—		—		2,423		—		—		—		2,423		—		—		2,675		—		—		—		2,675
Other retail and wholesale distribution		742		—		3,913		—		—		—		4,655		818		—		4,265		—		—		—		5,083
Service		400		175		1,073		5,747		1,586		—		8,981		302		248		1,078		6,596		1,561		—		9,785
Electricity and natural gas		—		—		—		—		5,138		—		5,138		—		—		—		—		4,740		—		4,740
Total		16,505		12,586		7,452		5,747		6,724		—		49,014		18,741		13,229		8,066		6,596		6,301		—		52,933
Other revenues		951		26		1,202		14		289		19,087		21,569		995		33		1,527		16		212		20,464		23,247
	$	17,456	$	12,612	$	8,654	$	5,761	$	7,013	$	19,087	$	70,583	$	19,736	$	13,262	$	9,593	$	6,612	$	6,513	$	20,464	$	76,180

Nine months ending September 30, 2021
Six months ending June 30, 2022
Manufactured products:
Industrial and commercial products	$	16,549	$	—	$	142	$	—	$	—	$	—	$	16,691	$	12,074	$	—	$	97	$	—	$	—	$	—	$	12,171
Building products		14,518		—		—		—		—		—		14,518		11,389		—		—		—		—		—		11,389
Consumer products		13,525		—		—		—		—		—		13,525		10,602		—		—		—		—		—		10,602
Grocery and convenience store distribution		—		23,104		—		—		—		—		23,104		—		15,685		—		—		—		—		15,685
Food and beverage distribution		—		12,838		—		—		—		—		12,838		—		9,564		—		—		—		—		9,564
Auto sales		—		—		7,485		—		—		—		7,485		—		—		5,202		—		—		—		5,202
Other retail and wholesale distribution		2,199		—		11,577		—		—		—		13,776		1,540		—		8,440		—		—		—		9,980
Service		1,099		509		3,060		16,875		4,219		—		25,762		566		462		2,084		12,527		2,673		—		18,312
Electricity and natural gas		—		—		—		—		14,048		—		14,048		—		—		—		—		9,454		—		9,454
Total		47,890		36,451		22,264		16,875		18,267		—		141,747		36,171		25,711		15,823		12,527		12,127		—		102,359
Other revenues		2,821		78		3,287		42		755		55,566		62,549		1,950		65		2,861		29		364		39,362		44,631
	$	50,711	$	36,529	$	25,551	$	16,917	$	19,022	$	55,566	$	204,296	$	38,121	$	25,776	$	18,684	$	12,556	$	12,491	$	39,362	$	146,990

	Manufacturing		McLane Company		Service and Retailing		BNSF		Berkshire Hathaway Energy		Insurance, Corporate and Other		Total		Manufacturing		McLane		Service and Retailing		BNSF		Berkshire Hathaway Energy		Insurance, Corporate and other		Total
Three months ending September 30, 2020
Three months ending June 30, 2021
Manufactured products:
Industrial and commercial products	$	4,889	$	—	$	54	$	—	$	—	$	—	$	4,943	$	5,586	$	—	$	49	$	—	$	—	$	—	$	5,635
Building products		4,322		—		—		—		—		—		4,322		5,114		—		—		—		—		—		5,114
Consumer products		4,036		—		—		—		—		—		4,036		4,604		—		—		—		—		—		4,604
Grocery and convenience store distribution		—		7,905		—		—		—		—		7,905		—		7,729		—		—		—		—		7,729
Food and beverage distribution		—		3,968		—		—		—		—		3,968		—		4,356		—		—		—		—		4,356
Auto sales		—		—		2,195		—		—		—		2,195		—		—		2,750		—		—		—		2,750
Other retail and wholesale distribution		599		—		3,182		—		—		—		3,781		754		—		4,008		—		—		—		4,762
Service		370		144		865		5,135		1,474		—		7,988		370		183		1,053		5,763		1,593		—		8,962
Electricity and natural gas		—		—		—		—		4,356		—		4,356		—		—		—		—		4,198		—		4,198
Total		14,216		12,017		6,296		5,135		5,830		—		43,494		16,428		12,268		7,860		5,763		5,791		—		48,110
Other revenues		929		23		966		14		396		17,202		19,530		947		27		1,094		15		294		18,627		21,004
	$	15,145	$	12,040	$	7,262	$	5,149	$	6,226	$	17,202	$	63,024	$	17,375	$	12,295	$	8,954	$	5,778	$	6,085	$	18,627	$	69,114

Nine months ending September 30, 2020
Six months ending June 30, 2021
Manufactured products:
Industrial and commercial products	$	15,639	$	—	$	143	$	—	$	—	$	—	$	15,782	$	10,949	$	—	$	99	$	—	$	—	$	—	$	11,048
Building products		11,682		—		—		—		—		—		11,682		9,513		—		—		—		—		—		9,513
Consumer products		10,373		—		—		—		—		—		10,373		8,767		—		—		—		—		—		8,767
Grocery and convenience store distribution		—		23,051		—		—		—		—		23,051		—		15,171		—		—		—		—		15,171
Food and beverage distribution		—		11,561		—		—		—		—		11,561		—		8,360		—		—		—		—		8,360
Auto sales		—		—		5,999		—		—		—		5,999		—		—		5,062		—		—		—		5,062
Other retail and wholesale distribution		1,691		—		8,735		—		—		—		10,426		1,457		—		7,664		—		—		—		9,121
Service		1,105		398		2,460		15,059		3,238		—		22,260		699		334		1,987		11,128		2,633		—		16,781
Electricity and natural gas		—		—		—		—		11,190		—		11,190		—		—		—		—		8,910		—		8,910
Total		40,490		35,010		17,337		15,059		14,428		—		122,324		31,385		23,865		14,812		11,128		11,543		—		92,733
Other revenues		2,686		69		2,884		42		964		52,160		58,805		1,870		52		2,085		28		466		36,479		40,980
	$	43,176	$	35,079	$	20,221	$	15,101	$	15,392	$	52,160	$	181,129	$	33,255	$	23,917	$	16,897	$	11,156	$	12,009	$	36,479	$	133,713

A summary of the transaction price allocated to the significant unsatisfied remaining performance obligations relating to contracts with expected durations in excess of one year as of ~~September~~June 30, ~~2021~~2022 and the timing of when the performance obligations are expected to be satisfied follows (in millions).

Less than

12 months

Greater than

12 months

Total

Less than

12 months

Greater than

12 months

Total

Electricity and natural gas

2,761

21,377

24,138

4,019

22,226

26,245

Other sales and service contracts

1,402

2,203

3,605

1,642

2,789

4,431

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 grouped 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. Revenues and earnings before income taxes by segment for the ~~third~~second quarter and first ~~nine~~six months of ~~2021~~2022 and ~~2020~~2021 were as follows (in millions).

	Third Quarter						First Nine Months					Second Quarter					First Six Months
	2021			2020			2021			2020		2022		2021			2022			2021
Revenues of Operating Businesses
Insurance:
Underwriting:
GEICO	$	9,604		$	8,540		$	28,073		$	26,689	$	9,807	$	9,546		$	19,361		$	18,469
Berkshire Hathaway Primary Group		2,964			2,490			8,373			7,103		3,313		2,755			6,431			5,409
Berkshire Hathaway Reinsurance Group		5,159			4,883			14,868			13,464		4,967		4,862			9,787			9,709
Investment income		1,339			1,223			4,212			4,486		2,284		1,459			3,648			2,873
Total insurance		19,066			17,136			55,526			51,742		20,371		18,622			39,227			36,460
BNSF		5,790			5,176			17,000			15,195		6,640		5,809			12,608			11,210
Berkshire Hathaway Energy		7,013			6,226			19,022			15,392
BHE													6,518		6,085			12,501			12,009
Manufacturing		17,496			15,170			50,821			43,238		19,772		17,412			38,193			33,325
McLane Company		12,612			12,040			36,529			35,079
McLane													13,262		12,295			25,777			23,917
Service and retailing		8,679			7,279			25,614			20,272		9,617		8,977			18,732			16,935
		70,656			63,027			204,512			180,918		76,180		69,200			147,038			133,856
Reconciliation of segments to consolidated amount
Corporate, eliminations and other		(73	)		(3	)		(216	)		211		—		(86	)		(48	)		(143	)
	$	70,583		$	63,024		$	204,296		$	181,129	$	76,180	$	69,114		$	146,990		$	133,713

	Third Quarter						First Nine Months						Second Quarter						First Six Months
	2021			2020			2021			2020			2022			2021			2022			2021
Earnings Before Income Taxes of Operating Businesses
Earnings (Loss) Before Income Taxes of Operating Businesses
Insurance:
Underwriting:
GEICO	$	(289	)	$	276		$	1,360		$	3,320		$	(487	)	$	626		$	(665	)	$	1,649
Berkshire Hathaway Primary Group		(23	)		(126	)		349			(63	)		242			166			334			372
Berkshire Hathaway Reinsurance Group		(708	)		(441	)		(1,298	)		(2,033	)		967			(327	)		1,123			(590	)
Investment income		1,337			1,220			4,205			4,480			2,283			1,456			3,644			2,868
Total insurance		317			929			4,616			5,704			3,005			1,921			4,436			4,299
BNSF		2,029			1,777			5,667			4,855			2,151			1,979			3,960			3,638
Berkshire Hathaway Energy		1,375			1,122			2,797			2,074
BHE														564			739			1,240			1,422
Manufacturing		2,445			2,255			7,595			5,765			3,028			2,714			5,852			5,150
McLane Company		(8	)		96			179			205
McLane														76			84			158			187
Service and retailing		1,110			779			3,234			1,745			1,199			1,186			2,334			2,124
		7,268			6,958			24,088			20,348			10,023			8,623			17,980			16,820
Reconciliation of segments to consolidated amount
Investment and derivative gains		4,921			31,582			38,015			1,392
Investment and derivative gains (losses)														(66,919	)		27,394			(68,897	)		33,094
Interest expense, not allocated to segments		(128	)		(116	)		(386	)		(363	)		(100	)		(144	)		(204	)		(258	)
Equity method investments		377			290			775			333			231			147			607			398
Goodwill and intangible impairments		—			(25	)		—			(10,659	)
Corporate, eliminations and other		46			(759	)		241			(761	)		1,283			(299	)		1,844			195
	$	12,484		$	37,930		$	62,733		$	10,290		$	(55,482	)	$	35,721		$	(48,670	)	$	50,249

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Net ~~earnings~~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).

Through 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 significant capital allocation decisions, investment activities and the selection of the Chief Executive to head each of the operating businesses. The business segment data (Note 23 to the accompanying Consolidated Financial Statements) should be read in conjunction with this discussion.

~~The~~In varying degrees, the COVID-19 pandemic ~~negatively affected most of~~continues to affect our operating ~~businesses beginning in March~~businesses. Significant government and private sector actions have been taken since 2020 to control the spread and mitigate the economic effects of ~~2020, with~~ the ~~effects to date ranging from relatively minor to severe. Earnings of most of our manufacturing, service and retailing businesses declined considerably, and in certain instances severely,~~virus. Actions in the ~~second quarter~~latter part of ~~2020. Over~~2021 and during 2022 included periodic temporary business closures or restrictions of business activities in various parts of the ~~second half~~world in response to the emergence of ~~2020~~variants of the virus. Notwithstanding these efforts, significant disruptions of supply chains and ~~continuing~~higher costs have persisted. Further, geopolitical conflicts, including the Russia-Ukraine conflict, have developed in ~~2021, many~~2022. While direct losses to-date have not been material to consolidated results, these events had indirect impacts by contributing to the disruptions of ~~these businesses experienced significant recoveries in revenues and earnings, in some instances exceeding pre-pandemic levels. However, many of our businesses were negatively affected by ongoing~~ global supply ~~chain disruptions, including those attributable to major winter storms~~chains, resulting in cost increases for goods and ~~a hurricane~~services in ~~North America, which contributed to higher input costs.~~parts of the world where we operate. We cannot reliably predict future economic effects of ~~the pandemic~~these events on our businesses or when ~~business activities at~~ our operations will ~~completely~~ normalize. Nor can we reliably predict how these events will alter the future consumption patterns of consumers and businesses we serve.

Insurance underwriting ~~produced~~ after-tax ~~losses of $784~~earnings increased $205 million (54.5%) in the ~~third~~second quarter and ~~earnings of $356~~decreased $512 million (44.9%) in the first ~~nine~~six months of 2022 versus 2021. ~~After-tax incurred losses~~In each period, underwriting earnings from ~~significant catastrophe events were approximately $1.7 billion~~GEICO declined, primarily attributable to increases in the third quarter and $2.2 billion in the first nine months of 2021, which were partly offset by reductions in incurred losses for prior accident years’ loss events. Underwriting results in 2021 also reflected earned premium reductions from the GEICO Giveback program, higher private passenger auto claims frequencies and ~~higher losses~~severities and lower reductions of ultimate claim estimates for prior years’ losses. Underwriting earnings in 2022 from reinsurance activities increased compared to 2021, reflecting foreign currency exchange rate gains arising from the remeasurement of non-U.S. Dollar denominated liabilities on insurance contracts of our U.S. insurance subsidiaries due to strengthening of the U.S. Dollar and improved life ~~reinsurance business.~~results. After-tax earnings from insurance investment income increased ~~14.4%~~56.4% in the ~~third~~second quarter and ~~decreased 4.8%~~26.7% in the first ~~nine~~six months of ~~2021 as~~2022 compared to ~~2020, reflecting lower interest~~2021, attributable to increased dividend income and higher ~~dividend income in both periods.~~interest rates.

After-tax earnings of our railroad business increased ~~14.2%~~9.8% in the ~~third~~second quarter and ~~17.4%~~9.7% in the first ~~nine~~six months of ~~2021~~2022 compared to ~~2020. The~~2021. These increases reflected higher revenue per car/unit, partly offset by lower overall ~~higher~~ freight volumes and ~~lower costs due to improved productivity, partly offset by~~ higher ~~average~~ fuel costs. After-tax earnings of our utilities and energy business increased ~~7.2%~~3.5% in the ~~third~~second quarter and ~~13.5%~~5.1% in the first ~~nine~~six months of ~~2021~~2022 compared to ~~2020.~~2021. The ~~year-to-date increase~~increases reflected ~~increased~~higher earnings from tax equity investments and from the natural gas pipeline and Northern Powergrid businesses, partly offset by lower earnings from the U.S. regulated utilities and ~~natural gas pipelines businesses, including the effects of a business acquisition, and from the~~ real estate brokerage ~~business. Earnings~~businesses. After-tax earnings from our manufacturing, service and retailing businesses increased ~~15.3%~~8.2% in the ~~third~~second quarter and ~~42.8%~~11.6% in the first ~~nine~~six months of ~~2021~~2022 versus ~~2020. Many of~~2021. Results were mixed among our ~~businesses generated significantly higher earnings over the first half of 2021 compared to 2020, which included significant adverse effects from the pandemic.~~various businesses. While customer demand for products ~~remained~~and services was relatively ~~high, earnings~~good in the ~~third quarter~~first six months of ~~2021 were sequentially lower than~~2022, we continue to experience the ~~second quarter. Several~~negative effects of ~~our businesses experienced~~ higher materials, freight, labor and other input ~~costs attributable to ongoing disruptions in global supply chains.~~costs.

Investment and derivative contract gains and losses in ~~2021~~2022 and ~~2020~~2021 predominantly derived from our investments in equity securities and ~~included significant~~includes unrealized gains and losses from market price ~~changes.~~changes during the period. We believe that investment and derivative gains/losses, whether realized from dispositions or unrealized from changes in market prices of equity securities, are generally meaningless in understanding our reported quarterly or annual results or in evaluating the economic performance of our businesses. These gains and losses have caused and will continue to cause significant volatility in our periodic earnings. Other earnings included after-tax foreign currency exchange gains related to non-U.S. Dollar denominated debt of $1.1 billion in the second quarter and $1.6 billion in the first six months of 2022, compared to after-tax losses of $45 million and after-tax gains of $480 million in the second quarter and first six months of 2021, respectively.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Our management views our insurance businesses as possessing two distinct activities – underwriting and investing. Underwriting decisions are the responsibility of the unit managers, while investing decisions are the responsibility of Berkshire’s Chairman and CEO, Warren E. Buffett, and Berkshire’s corporate investment managers. Accordingly, we evaluate performance of underwriting operations without any allocation of investment income or investment gains and losses. We consider investment income as an integral component of our aggregate insurance operating results. However, we consider investment gains and losses, whether realized or unrealized, as non-operating. We believe that such gains and losses are 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 with respect to our reinsurance businesses. Generally, we consider incurred losses ~~in excess of~~exceeding $100 million from a current year catastrophic event to be significant. ~~The significant~~Significant catastrophe events in ~~2021~~the first six months included ~~Hurricane Ida and~~ floods in ~~Europe~~Australia and South Africa in ~~the third quarter, as well as~~2022 and Winter Storm Uri in ~~the first quarter.~~2021.

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 under retroactive reinsurance contracts, were approximately ~~$125.5~~$126 billion as of ~~September~~June 30, ~~2021.~~2022. 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~~U.S. based insurance subsidiaries due to foreign currency exchange rate fluctuations.

Underwriting results ~~for~~of certain of our commercial insurance and reinsurance businesses ~~were negatively~~have been affected ~~in 2021 and 2020~~ by estimated losses and costs associated with the COVID-19 ~~pandemic, including estimated provisions for claims and uncollectible premiums and incremental operating costs to maintain customer service levels. The~~pandemic. While the effects of the pandemic on underwriting results in the first six months of 2022 were insignificant, results in future periods may be affected by ~~judicial rulings~~legal and regulatory ~~and legislative~~ actions pertaining to insurance coverage, ~~and claims and by its effects on general economic activity,~~ which we cannot reasonably estimate at this time.

We provide primary insurance and reinsurance products covering property and casualty risks, as well as life and health risks. Our insurance and reinsurance businesses are GEICO, Berkshire Hathaway Primary Group and Berkshire Hathaway Reinsurance Group. Underwriting results of our insurance businesses are summarized below (dollars in millions).

	Third Quarter						First Nine Months						Second Quarter						First Six Months
	2021			2020			2021			2020			2022			2021			2022			2021
Pre-tax underwriting earnings (loss):
GEICO	$	(289	)	$	276		$	1,360		$	3,320		$	(487	)	$	626		$	(665	)	$	1,649
Berkshire Hathaway Primary Group		(23	)		(126	)		349			(63	)		242			166			334			372
Berkshire Hathaway Reinsurance Group		(708	)		(441	)		(1,298	)		(2,033	)		967			(327	)		1,123			(590	)
Pre-tax underwriting earnings		(1,020	)		(291	)		411			1,224			722			465			792			1,431
Income taxes and noncontrolling interests		(236	)		(78	)		55			268			141			89			164			291
Net underwriting earnings (loss)	$	(784	)	$	(213	)	$	356		$	956
Net underwriting earnings													$	581		$	376		$	628		$	1,140
Effective income tax rate		23.0	%		26.6	%		13.6	%		21.9	%		19.4	%		19.0	%		20.7	%		20.3	%

GEICO writes 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 GEICO’s underwriting results follows (dollars in millions).

	Third Quarter									First Nine Months								Second Quarter									First Six Months
	2021					2020				2021				2020				2022					2021				2022					2021
	Amount			%		Amount		%		Amount		%		Amount		%		Amount			%		Amount		%		Amount			%		Amount		%
Premiums written	$	10,097				$	8,446			$	29,333			$	26,217			$	9,416				$	9,230			$	19,681				$	19,236
Premiums earned	$	9,604			100.0	$	8,540		100.0	$	28,073		100.0	$	26,689		100.0	$	9,807			100.0	$	9,546		100.0	$	19,361			100.0	$	18,469		100.0
Losses and loss adjustment expenses		8,486			88.4		6,858		80.3		22,566		80.4		19,238		72.1		9,105			92.8		7,617		79.8		17,649			91.2		14,080		76.2
Underwriting expenses		1,407			14.6		1,406		16.5		4,147		14.8		4,131		15.5		1,189			12.2		1,303		13.6		2,377			12.2		2,740		14.9
Total losses and expenses		9,893			103.0		8,264		96.8		26,713		95.2		23,369		87.6		10,294			105.0		8,920		93.4		20,026			103.4		16,820		91.1
Pre-tax underwriting earnings (loss)	$	(289	)			$	276			$	1,360			$	3,320			$	(487	)			$	626			$	(665	)			$	1,649

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

GEICO’s pre-tax underwriting ~~earnings in 2021 and 2020 were significantly affected by changes in average claims frequencies. Beginning~~loss in the first half of 2022 reflected increased claims severities, primarily due to significant cost inflation in automobile markets, which began to accelerate in the second half of 2021. Increases in used car prices are producing increased claims severities on total losses and shortages of car parts are contributing to increased claims severities on partial losses. In addition, injury claims severities continue to trend higher than general inflation rates.

Premiums written increased $186 million (2.0%) in the second quarter ~~of 2020~~ and ~~continuing through~~$445 million (2.3%) in the first ~~quarter~~six months of ~~2021,~~2022 compared to 2021. The increases were primarily attributable to increases in average ~~claims frequencies were significantly below historical levels from the effects of less driving by policyholders during the COVID-19 pandemic. These effects were~~premiums per auto policy due to rate increases, partially offset by ~~lower premiums~~a decrease in policies in-force. Premiums earned ~~from~~increased $261 million (2.7%) in the second quarter and $892 million (4.8%) in the first six months of 2022 compared to 2021. Premiums earned in the first six months of 2021 included a reduction of approximately $460 million attributable to the remaining impact of the GEICO Giveback program and higher average claims severities. Starting in the second quarter of 2021, average claims frequencies began to increase as driving by policyholders increased. In addition, average property claims severities increased due to the increase in the valuation of used vehicles.

Premiums written increased $1.7 billion (19.5%) in the third quarter and $3.1 billion (11.9%) in the first nine months of 2021 compared to 2020. The comparative increases reflected the effects of the GEICO Giveback Program, which reduced premiums written $1.5 billion in the third quarter and $2.8 billion in the first nine months of 2020. The GEICO Giveback programthat provided a 15% premium credit to ~~all~~ new and ~~renewal~~renewing voluntary auto and motorcycle policies written between April 8, 2020 and October 7, ~~2020, and reduced premiums written by approximately $2.9 billion over that six-month period. Voluntary auto policies-in-force increased approximately 159,000 during the first nine months of 2021.~~

~~Premiums earned increased $1.1 billion (12.5%) in the third quarter and $1.4 billion (5.2%) in the first nine months of 2021 compared to~~ 2020. The GEICO Giveback premium credit reduced premiums earned approximately $475 million in 2021 (mostly in the first quarter) and $1.3 billion in the first nine months of 2020, including $1.0 billion in the third quarter.

Losses and loss adjustment expenses increased ~~$1.6~~$1.5 billion ~~(23.7%~~(19.5%) in the ~~third~~second quarter and ~~$3.3~~$3.6 billion ~~(17.3%~~(25.3%) in the first ~~nine~~six months of ~~2021~~2022 compared to ~~2020.~~2021. GEICO’s ratio of losses and loss adjustment expenses to premiums earned ~~increased 8.1 percentage points~~was 92.8% in the ~~third~~second quarter and ~~8.3 percentage points~~91.2% in the first ~~nine~~six months of ~~2021~~2022, increases of 13.0 percentage points and 15.0 percentage points, respectively, compared to the same periods in ~~2020. The~~2021, which reflected increases ~~reflected overall increases~~ in ~~average~~ claims frequencies and severities for the current year and ~~approximately $400 million in pre-tax losses attributable to Hurricane Ida, partially offset by increased~~lower reductions of ~~claim~~ loss estimates for prior years’ loss events.

Claims frequencies in the first ~~nine~~six months of ~~2021~~2022 were higher for all coverages, including property damage ~~(twelve~~(four to ~~thirteen~~five percent range), collision (ten to eleven percent range), bodily injury ~~(thirteen~~(six to ~~fourteen percent range), personal injury (sixteen to seventeen~~seven percent range) and ~~collision (twenty-one~~personal injury (seven to ~~twenty-two~~eight percent range). Average claims severities in the first ~~nine~~six months of ~~2021~~2022 were higher for property damage coverage ~~(four~~(eleven to ~~five~~twelve percent range), collision coverage ~~(thirteen~~(nineteen to ~~fourteen~~twenty percent range) and bodily injury coverage ~~(ten~~(nine to ~~twelve~~eleven percent range). ~~Ultimate claim~~Losses and loss adjustment expenses reflected reductions in the ultimate loss estimates for prior years’ loss events ~~were reduced approximately $1.2 billion~~of $207 million in the first ~~nine~~six months of ~~2021, which produced corresponding reductions in losses and loss adjustment expenses. The effects of changes in estimates for prior years’ loss events were relatively insignificant~~2022 compared to $846 million in the first ~~nine~~six months of ~~2020.~~2021. The reductions in 2022 reflected decreases for bodily and personal injury coverages, partially offset by increases for collision and property damage coverages, while the reductions in 2021 were across all major coverages.

Underwriting expenses ~~were relatively flat~~decreased $114 million (8.7%) in the second quarter and $363 million (13.2%) in the first ~~nine~~six months of ~~2021~~2022 compared to ~~2020,~~2021, reflecting ~~higher technology costs, offset by~~ lower advertising costs in both periods and lower employee-related ~~expenses.~~costs in the first six months. GEICO’s expense ratio (underwriting expense to premiums earned) ~~decreased 0.7~~was 12.2% in the second quarter and first six months of 2022, decreases of 1.4 percentage points ~~in the first nine months of 2021~~and 2.7 percentage points, respectively, compared to ~~2020, reflecting~~ the ~~increase~~same periods in ~~premiums earned.~~2021, attributable to both the decreases in expenses as well as the increases in earned premiums.

The Berkshire Hathaway Primary Group (“BH Primary”) provides a variety of commercial insurance solutions, including healthcare ~~malpractice,~~professional liability, workers’ compensation, automobile, general liability, property and specialty coverages for small, medium and large clients. BH ~~Primary~~Primary’s larger insurers include Berkshire Hathaway Specialty Insurance (“BH Specialty”), Berkshire Hathaway Homestate Companies (“BHHC”), MedPro Group, Berkshire Hathaway GUARD Insurance Companies (“GUARD”), National Indemnity Company (“NICO Primary”), and U.S. Liability Insurance Company (“USLI”)~~, Central States Indemnity Company and MLMIC Insurance Company.~~. A summary of BH Primary underwriting results follows (dollars in millions).

	Third Quarter										First Nine Months									Second Quarter								First Six Months
	2021					2020					2021				2020					2022				2021				2022				2021
	Amount			%		Amount			%		Amount		%		Amount			%		Amount		%		Amount		%		Amount		%		Amount		%
Premiums written	$	3,506				$	3,003				$	9,357			$	7,607				$	3,504			$	2,943			$	6,896			$	5,851
Premiums earned	$	2,964			100.0	$	2,490			100.0	$	8,373		100.0	$	7,103			100.0	$	3,313		100.0	$	2,755		100.0	$	6,431	��	100.0	$	5,409		100.0
Losses and loss adjustment expenses		2,240			75.6		1,976			79.4		6,044		72.2		5,369			75.6		2,243		67.7		1,955		71.0		4,517		70.2		3,804		70.3
Underwriting expenses		747			25.2		640			25.7		1,980		23.6		1,797			25.3		828		25.0		634		23.0		1,580		24.6		1,233		22.8
Total losses and expenses		2,987			100.8		2,616			105.1		8,024		95.8		7,166			100.9		3,071		92.7		2,589		94.0		6,097		94.8		5,037		93.1
Pre-tax underwriting earnings (loss)	$	(23	)			$	(126	)			$	349			$	(63	)
Pre-tax underwriting earnings																				$	242			$	166			$	334			$	372

Premiums written increased $561 million (19.1%) in the second quarter and $1.0 billion (17.9%) in the first six months of 2022 compared to 2021, reflecting year-to-date increases at BH Specialty (26%), USLI (17%) and BHHC (14%). The increases were primarily on property and casualty coverages in the U.S. across several markets.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Premiums written increased $503 million (16.7%) in the third quarter and $1.8 billion (23.0%) in the first nine months of 2021 compared to 2020, primarily attributable to a 42% year-to-date increase from BH Specialty in professional liability, casualty and property lines of business. In addition, several of our other underwriting units experienced year-to-date premiums written increases, including MedPro Group (19%), NICO Primary (32%), GUARD (8%) and USLI (20%) in various coverages and markets, partly offset by lower volumes for workers’ compensation business.

BH Primary’s loss ratio ~~declined 3.8~~was 67.7% in the second quarter and 70.2% in the first six months of 2022, a decrease of 3.3 percentage points in the ~~third~~second quarter and ~~3.4 percentage points~~relatively unchanged in the first ~~nine~~six months compared to 2021. Losses and loss adjustment expenses from significant catastrophe events were $75 million in the first six months of ~~2021 versus 2020. The year-to-date decline reflected increased~~2022 compared to $156 million in 2021. Losses and loss adjustment expenses also included net reductions in estimated ultimate liabilities for prior years’ loss events of ~~$420 million in 2021 compared to $190 million in 2020. Losses and loss adjustment expenses in 2021 from significant catastrophe events were approximately $260 million in the third quarter and $420~~$106 million in the first ~~nine months, arising primarily from Hurricane Ida in the third quarter and Winter Storm Uri in the first quarter. Incurred losses in the first nine~~six months of ~~2020 included approximately $400~~2022 compared to $253 million ~~attributable to the pandemic and Hurricanes Laura and Sally~~ in ~~the third quarter.~~2021. BH Primary insurers ~~also~~ write significant levels of workers’ compensation, commercial and professional liability ~~and workers’ compensation business~~insurance and the related claim costs may be subject to high severity and long claim-tails. ~~Accordingly, we~~We could experience significant increases in claims liabilities in the future attributable to higher-than-expected claim settlements, adverse litigation outcomes or judicial rulings and other factors not currently anticipated.

Underwriting expenses increased $194 million (30.6%) in the ~~third~~second quarter and $347 million (28.1%) in the first ~~nine~~six months of ~~2021 increased $107 million (16.7%) and $183 million (10.2%), respectively,~~2022 compared to ~~2020.~~the same periods in 2021. The expense ratio ~~decreased 1.7~~increased 2.0 percentage points in the second quarter and 1.8 percentage points in the first ~~nine~~six months ~~of 2021, reflecting~~compared to 2021. These increases reflected costs associated with new business development and changes in business mix.

The Berkshire Hathaway Reinsurance Group (“BHRG”) offers excess-of-loss and quota-share reinsurance coverages on property and casualty risks to insurers and reinsurers worldwide through several subsidiaries, led by National Indemnity Company (“NICO”), General Reinsurance Corporation and General Reinsurance AG. We also ~~offer~~write life and health reinsurance coverages through General Re Life Corporation, General Reinsurance AG and Berkshire Hathaway Life Insurance Company of Nebraska (“BHLN”). We periodically assume property and casualty risks under retroactive reinsurance contracts written through NICO. In addition, we write periodic payment annuity contracts through BHLN.

Generally, we strive to generate underwriting profits. However, time-value-of-money concepts are important elements in establishing prices for retroactive reinsurance and periodic payment annuity ~~businesses~~business due to the expected long durations of the claim liabilities. We expect to incur pre-tax underwriting losses from such ~~businesses,~~business, primarily through deferred charge amortization and discount accretion charges. We receive premiums at the inception of these contracts, which are then available for investment. A summary of ~~Berkshire Hathaway Reinsurance Group’s~~BHRG’s premiums and pre-tax underwriting results follows ~~(in~~(dollars in millions).

	Third Quarter										First Nine Months										Second Quarter										First Six Months
	Premiums earned				Pre-tax underwriting earnings (loss)						Premiums earned				Pre-tax underwriting earnings (loss)						Premiums earned				Pre-tax underwriting earnings (loss)						Premiums earned				Pre-tax underwriting earnings (loss)
	2021		2020		2021			2020			2021		2020		2021			2020			2022		2021		2022			2021			2022		2021		2022			2021
Property/casualty	$	3,637	$	3,428	$	(247	)	$	99		$	10,385	$	8,859	$	121		$	(706	)	$	3,531	$	3,354	$	976		$	202		$	6,930	$	6,748	$	1,381		$	368
Life/health		1,328		1,378		(181	)		17			3,932		4,147		(522	)		63			1,265		1,299		75			(169	)		2,513		2,604		63			(341	)
Retroactive reinsurance		—		5		(158	)		(394	)		82		39		(620	)		(896	)		—		82		(52	)		(220	)		—		82		(242	)		(462	)
Periodic payment annuity		191		68		(94	)		(209	)		458		409		(374	)		(411	)		168		123		(27	)		(144	)		337		267		(130	)		(280	)
Variable annuity		3		4		(28	)		46			11		10		97			(83	)		3		4		(5	)		4			7		8		51			125
	$	5,159	$	4,883	$	(708	)	$	(441	)	$	14,868	$	13,464	$	(1,298	)	$	(2,033	)	$	4,967	$	4,862	$	967		$	(327	)	$	9,787	$	9,709	$	1,123		$	(590	)

A summary of property/casualty reinsurance underwriting results follows (dollars in millions).

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

~~A summary of property/casualty reinsurance underwriting results follows (dollars in millions).~~

Premiums written increased ~~$155~~$733 million ~~(3.9%~~(21.4%) in the ~~third~~second quarter and ~~$913~~$736 million ~~(8.3%~~(9.4%) in the first ~~nine~~six months of ~~2021~~2022 compared to the same periods in ~~2020. The~~2021, reflecting net increases ~~reflected net~~from new property business ~~increased participations on renewals, improved prices~~ and ~~favorable~~rates, partially offset by unfavorable foreign currency translation effects.

Losses and loss adjustment expenses ~~increased $442~~decreased $229 million ~~(17.4%~~(10.0%) in the ~~third~~second quarter and ~~$448~~$329 million ~~(6.2%~~(7.0%) in the first ~~nine~~six months, ~~of 2021 compared to 2020. The~~while the loss ratio ~~increased 7.9~~declined 10.0 percentage points in the ~~third~~second quarter and ~~decreased 7.7~~6.6 percentage points in the first ~~nine~~six months of ~~2021~~2022 compared to ~~2020.~~2021. Losses ~~and loss adjustment expenses in 2021 included provisions for estimated liabilities~~incurred arising from significant catastrophe events ~~of approximately $1.5 billion~~were $443 million in the ~~third~~second quarter and ~~$1.9 billion~~$758 million in the first nine months. These provisions were attributable to Hurricane Ida and flooding in Europe in the third quarter and Winter Storm Uri in the first quarter. Estimated losses attributable to significant catastrophes in 2020 were approximately $300 million and derived from Hurricanes Laura and Sally in the third quarter.

~~Losses incurred in the first nine~~six months of ~~2021 also included $564 million from a net decrease~~2022, which were partially offset by reductions in estimated ultimate liabilities for losses occurring in prior ~~years’ loss events.~~years of $437 million in the second quarter and $574 million in the first six months. Losses incurred from significant catastrophe events were $108 million in the second quarter and ~~loss adjustment expenses~~$418 million in ~~2020 included a year-to-date net increase~~the first six months of 2021. Changes in estimated ultimate liabilities for prior years’ loss events ~~of $342 million and losses attributable to the COVID-19 pandemic of $113 million~~were relatively insignificant in the ~~third~~second quarter and ~~$688 million in the~~ first ~~nine months.~~six months of 2021.

Underwriting expenses ~~are primarily commissions and brokerage costs. The expense ratio in 2021 increased 1.8~~as percentages of premiums earned decreased 11.6 percentage points in the ~~third~~second quarter and ~~decreased 1.5~~7.8 percentage points in the first ~~nine~~six months of 2022 compared to ~~the same periods in 2020,~~2021, primarily attributable to foreign currency effects and changes in business mix. Underwriting expenses included foreign currency exchange gains of $308 million in the second quarter and $389 million in the first six months of 2022, primarily related to a third quarter 2021 intercompany reinsurance agreement in which a non-U.S. based Berkshire subsidiary ceded non-U.S. Dollar denominated liabilities to a U.S. based Berkshire subsidiary. Under U.S. GAAP, the effects of exchange rate changes from the remeasurement of liabilities assumed by the U.S. subsidiary are reflected in earnings as its functional currency is the U.S. Dollar. The net foreign currency exchange rate effects from translating the financial statements of the non-U.S. subsidiary to the U.S. Dollar are included in other comprehensive income.

A summary of our life/health reinsurance underwriting results follows (dollars in millions).

	Third Quarter									First Nine Months									Second Quarter									First Six Months
	2021					2020				2021					2020				2022				2021					2022				2021
	Amount			%		Amount		%		Amount			%		Amount		%		Amount		%		Amount			%		Amount		%		Amount			%
Premiums written	$	1,332				$	1,383			$	3,929				$	4,153			$	1,249			$	1,296				$	2,492			$	2,597
Premiums earned	$	1,328			100.0	$	1,378		100.0	$	3,932			100.0	$	4,147		100.0	$	1,265		100.0	$	1,299			100.0	$	2,513		100.0	$	2,604			100.0
Life and health insurance benefits		1,247			93.9		1,142		82.9		3,733			94.9		3,328		80.3		964		76.2		1,235			95.1		2,015		80.2		2,486			95.5
Underwriting expenses		262			19.7		219		15.9		721			18.4		756		18.2		226		17.8		233			17.9		435		17.3		459			17.6
Total benefits and expenses		1,509			113.6		1,361		98.8		4,454			113.3		4,084		98.5		1,190		94.0		1,468			113.0		2,450		97.5		2,945			113.1
Pre-tax underwriting earnings (loss)	$	(181	)			$	17			$	(522	)			$	63			$	75			$	(169	)			$	63			$	(341	)

Life/health premiums written decreased ~~3.7%~~$47 million (3.6%) in the ~~third~~second quarter and ~~5.4%~~$105 million (4.0%) in the first ~~nine~~six months of ~~2021~~2022 compared to ~~2020. Premiums written~~the same periods in 2020 included $131 million in the third quarter and $497 million in the first nine months from a policy that covered U.S. health insurance risks that did not renew in 2021. Otherwise, premiums written in the first nine months of 2021, ~~increased 7.7% versus 2020,~~ primarily due to ~~favorable~~lower volumes in the Asia Pacific and North America regions and from unfavorable foreign currency translation effects. Life and health benefits declined $271 million (21.9%) in the second quarter and $471 million (18.9%) in the first six months of 2022 compared to 2021, attributable to lower mortality. Underwriting results in ~~the third quarter and first nine months of~~ 2021 were negatively affected by significant, pandemic-related increases in mortality in the U.S., South Africa, India and Latin America due to the pandemic. Underwriting results in 2020 reflected COVID-19-related claim estimates of $68 million in the third quarter and $172 million in the first nine months, as well as from increased liabilities from changes in underlying assumptions in estimating disability benefit liabilities in Australia.

~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

Pre-tax underwriting losses in each period derived from the amortization of deferred charges and changes in the estimated timing and amounts of future claim payments. Underwriting results also include foreign currency exchange gains and losses from the effects of changes in foreign currency exchange rates on non-U.S. Dollar denominated liabilities of our U.S. subsidiaries. Before foreign currency exchange effects, pre-tax underwriting losses were $227 million in the third quarter and $690 million in the first nine months of 2021 compared to $282 million in the third quarter and $874 million in the first nine months of 2020. Foreign currency exchange gains were ~~$69 million in the third quarter and $70~~$157 million in the first ~~nine~~six months of 2022, substantially all of which was in the second quarter. Foreign currency exchange gains/losses were insignificant in the corresponding 2021 ~~compared to~~periods. Pre-tax underwriting losses ~~of $112~~before foreign currency exchange effects were $204 million in the ~~third~~second quarter and ~~$22~~$399 million in the first ~~nine~~six months of ~~2020.~~2022 compared to $220 million in the second quarter and $463 million in the first six months of 2021.

~~Gross unpaid~~Unpaid losses assumed under retroactive reinsurance contracts ~~were $39.7~~declined $1.0 billion in the first six months of 2022 to $37.2 billion at ~~September~~June 30, ~~2021, declining $1.2 billion since December 31, 2020,~~2022, primarily due to loss payments. Unamortized deferred charges related to ~~such~~retroactive reinsurance contracts ~~were $11.7~~declined $426 million in the first six months of 2022 to $10.2 billion at ~~September~~June 30, ~~2021, a decline of $709 million since December 31, 2020,~~2022, primarily attributable to periodic amortization. Deferred charge amortization will be ~~charged to~~included in underwriting earnings over the expected remaining claims settlement periods.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Periodic payment annuity premiums earned increased ~~$123~~$45 million ~~(180.9%~~(36.6%) in the ~~third~~second quarter and ~~$49~~$70 million ~~(12.0%~~(26.2%) in the first ~~nine~~six months of ~~2021~~2022 compared to ~~2020.~~the same periods in 2021. Periodic payment annuity business is both price and demand ~~sensitive. Our premium volumes in 2021~~sensitive and ~~2020 were constrained, attributable in part to pandemic related delays in underlying claim settlements, which reduced~~ the supply of available ~~business. The~~business is affected by the timing of underlying legal claim settlements. Our volumes written may ~~also~~ change rapidly due to changes in prices, which are affected by prevailing interest rates, the perceived risks and durations associated with the expected annuity payments, as well as the level of competition.

Periodic payment annuity contracts normally produce pre-tax underwriting losses deriving from the recurring discount accretion of annuity liabilities. Underwriting results also include ~~the effects of mortality, interest rate changes that may affect expected settlements under certain contracts and~~ gains or losses from the effects of changes in mortality and interest rates and from foreign currency exchange ~~rates~~rate changes on non-U.S. Dollar denominated liabilities of our U.S. subsidiaries. Pre-tax underwriting results included foreign currency ~~exchange~~ gains of ~~$45~~$116 million in the ~~third~~second quarter and ~~$25~~$160 million in the first ~~nine~~six months of ~~2021~~2022 compared to losses of ~~$73~~$10 million in the ~~third~~second quarter and ~~gains of $38~~$20 million in the first ~~nine~~six months of ~~2020.~~2021.

~~Excluding~~Pre-tax underwriting losses before foreign currency exchange ~~gains/losses, pre-tax underwriting losses~~effects were ~~$139~~$143 million in the ~~third~~second quarter and ~~$399~~$290 million in the first ~~nine~~six months of ~~2021 compared to $136~~2022 and $134 million in the ~~third~~second quarter and ~~$449~~$260 million in the first ~~nine~~six months of 2020, which primarily derived from the recurring discount accretion of annuity liabilities. Pre-tax losses in the first nine months of 2021 were partially offset by the effects of higher mortality and the effects of higher interest rates applicable to settlements under certain contracts.2021. Discounted annuity liabilities were ~~$14.8~~$15.4 billion at ~~September~~June 30, ~~2021, having~~2022 and had a weighted average discount rate of approximately 3.9%.

Variable annuity guarantee reinsurance contracts produced pre-tax losses of ~~$28~~$5 million in the ~~third~~second quarter and ~~earnings~~gains of ~~$97~~$51 million in the first ~~nine~~six months of ~~2021~~2022 compared to ~~earnings~~pre-tax gains of ~~$46~~$4 million in the ~~third~~second quarter and ~~losses of $83~~$125 million in the first ~~nine~~six months of ~~2020.~~2021. The results from these contracts ~~reflect changes in our estimated liabilities for underlying guaranteed benefits, which~~ are affected by changes in securities markets, ~~and~~ interest rates and foreign currency exchange rates, which can be volatile, and from the periodic amortization of expected profit margins. Underwriting ~~results from these contracts are volatile, reflecting the volatility of securities markets, interest rates and foreign currency exchange rates. The change in underwriting~~ earnings in the first ~~nine~~six months of 2022 and 2021 ~~compared to 2020 was~~were primarily attributable to the net effects of interest rate changes and ~~to a lesser extent,~~ changes in securities markets ~~partly offset by lower underlying lapse rate assumptions.~~

~~Item 2. Management’s Discussion~~which were unfavorable in 2022 and ~~Analysis of Financial Condition and Results of Operations~~favorable in 2021.

A summary of net investment income attributable to our insurance operations follows (dollars in millions).

	Third Quarter						First Nine Months						Percentage Change						Second Quarter						First Six Months						Percentage Change
	2021			2020			2021			2020			Third Quarter			First Nine Months			2022			2021			2022			2021			Second Quarter			First Six Months
Dividend income																			$	2,055		$	1,298		$	3,252		$	2,551			58.3	%		27.5	%
Interest and other investment income	$	141		$	196		$	458		$	870			(28.1	)%		(47.4	)%		228			158			392			317			44.3			23.7
Dividend income		1,196			1,024			3,747			3,610			16.8			3.8
Pre-tax net investment income		1,337			1,220			4,205			4,480			9.6			(6.1	)		2,283			1,456			3,644			2,868			56.8			27.1
Income taxes and noncontrolling interests		176			205			617			711									377			237			568			441
Net investment income	$	1,161		$	1,015		$	3,588		$	3,769								$	1,906		$	1,219		$	3,076		$	2,427
Effective income tax rate		13.1	%		16.9	%		14.7	%		15.9	%								16.5	%		16.3	%		15.6	%		15.4	%

~~Interest and other investment~~Dividend income ~~declined $55 million (28.1%)~~increased 58.3% in the ~~third~~second quarter and ~~$412 million (47.4%)~~27.5% in the first ~~nine~~six months of ~~2021~~2022 compared to ~~same periods~~2021. The increases in ~~2020, primarily~~2022 reflected an overall increase in equity security investments during the first six months of 2022. Dividend income also varies from period to period due to ~~lower income~~changes in the investment portfolio and the frequency and timing of dividends from short-term investments and fixed maturity securities. We continue to hold substantial balances of cash, cash equivalents and U.S. Treasury Bills. We expect that prevailing low interest rates will continue to negatively affect our earnings from such investments and from fixed maturity securities for at least the remainder of 2021. Nevertheless, we believe that maintaining ample liquidity is paramount and we insist on safety over yield with respect to short-term investments.certain investees. Dividend income ~~in 2021~~ included ~~$26~~$13 million in the ~~third~~second quarter and ~~$101~~$29 million in the first ~~nine~~six months of 2022 and $37 million in the second quarter and $75 million in the first six months of 2021 from investments in preferred stock of Berkshire Hathaway Energy. Such amounts are deducted from earnings of the utilities and energy segment. ~~Dividend~~

Interest and other investment income ~~may vary from period~~increased 44.3% in the second quarter and 23.7% in the first six months of 2022 compared to ~~period~~the same periods in 2021. The increases were primarily due to ~~changes~~increases in ~~the investment portfolio~~short-term interest rates. We continue to hold substantial balances of cash, cash equivalents and ~~the frequency~~short-term U.S. Treasury Bills. While exceptionally low interest rates prevailed in recent years, interest rates began to increase during 2022. The effects of such increases are expected to be reflected in our earnings as maturing investments are replaced by new investments. We continue to believe that maintaining ample liquidity is paramount and ~~timing~~we insist on safety over yield with respect to short-term investments.

Item 2. Management’s Discussion and Analysis of ~~dividends from certain investees.~~Financial Condition and Results of Operations

Invested assets of our insurance businesses derive from shareholder capital and from net liabilities under insurance and reinsurance contracts or “float.” The major components of float are unpaid losses and loss adjustment expenses, including liabilities under retroactive reinsurance contracts, life, annuity and health benefit liabilities, unearned premiums and other liabilities due to policyholders, which are reduced by insurance premiums receivable, reinsurance receivables, deferred charges assumed under retroactive reinsurance contracts and deferred policy acquisition costs. Float approximated ~~$145~~$147 billion at ~~September~~June 30, ~~2021~~2022 and ~~$138 billion at~~ December 31, ~~2020.~~2021. Our combined insurance operations generated pre-tax underwriting earnings in the first ~~nine~~six months of ~~2021~~2022 and ~~2020,~~2021, and consequently, the average cost of float for each period was negative.

A summary of cash and investments held in our insurance businesses as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021 follows (in millions).

	September 30, 2021		December 31, 2020		June 30, 2022		December 31, 2021
Cash, cash equivalents and short-term investments in U.S. Treasury Bills	$	89,098	$	67,082
Cash, cash equivalents and U.S. Treasury Bills					$	58,034	$	90,688
Equity securities		296,038		269,498		312,777		334,907
Fixed maturity securities		18,069		20,317		21,028		16,386
Other		5,119		6,220		3,421		4,296
	$	408,324	$	363,117	$	395,260	$	446,277

Fixed maturity securities as of ~~September~~June 30, ~~2021~~2022 were as follows (in millions).

	Amortized Cost		Unrealized Gains		Carrying Value		Amortized Cost		Unrealized Gains (Losses)			Carrying Value
U.S. Treasury, U.S. government corporations and agencies	$	3,349	$	30	$	3,379	$	8,884	$	(152	)	$	8,732
Foreign governments		12,406		11		12,417		10,880		(107	)		10,773
Corporate bonds		1,488		430		1,918		981		255			1,236
Other		304		51		355		260		27			287
	$	17,547	$	522	$	18,069	$	21,005	$	23		$	21,028

U.S. government obligations are rated AA+ or Aaa by the major rating agencies. Approximately ~~90%~~94% of all foreign government obligations were rated AA or higher by at least one of the major rating ~~agencies.~~agencies as of June 30, 2022. Foreign government securities include obligations issued or unconditionally guaranteed by national or provincial government entities.

~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

Burlington Northern Santa Fe, LLC (“BNSF”) operates one of the largest railroad systems in North America, with ~~approximately~~over 32,500 route miles of track in 28 states. BNSF also operates in three Canadian provinces. BNSF classifies its major ~~railroad~~ business groups by type of product shipped ~~which includes~~including consumer products, industrial products, agricultural products and coal. A summary of BNSF’s earnings follows (dollars in millions).

	Third Quarter						First Nine Months						Second Quarter						First Six Months
	2021			2020			2021			2020			2022			2021			2022			2021
Railroad operating revenues	$	5,591		$	5,001		$	16,421		$	14,698		$	6,454		$	5,609		$	12,231		$	10,830
Railroad operating expenses:
Compensation and benefits		1,168			1,105			3,477			3,306			1,213			1,145			2,437			2,309
Fuel		705			394			1,948			1,335			1,276			693			2,137			1,243
Purchased services		510			479			1,525			1,429			509			510			1,008			1,015
Depreciation and amortization		608			616			1,832			1,836			618			608			1,242			1,224
Equipment rents, materials and other		338			393			1,262			1,219			460			433			986			924
Total		3,329			2,987			10,044			9,125			4,076			3,389			7,810			6,715
Railroad operating earnings		2,262			2,014			6,377			5,573			2,378			2,220			4,421			4,115
Other revenues (expenses):
Other revenues		199			175			579			497			186			200			377			380
Other expenses, net		(176	)		(155	)		(514	)		(436	)		(159	)		(180	)		(329	)		(338	)
Interest expense		(256	)		(257	)		(775	)		(779	)		(254	)		(261	)		(509	)		(519	)
Pre-tax earnings		2,029			1,777			5,667			4,855			2,151			1,979			3,960			3,638
Income taxes		491			430			1,362			1,187			487			463			925			871
Net earnings	$	1,538		$	1,347		$	4,305		$	3,668		$	1,664		$	1,516		$	3,035		$	2,767
Effective income tax rate		24.2	%		24.2	%		24.0	%		24.5	%		22.6	%		23.4	%		23.4	%		23.9	%

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

	Cars/Units														Cars/Units								Percentage Change
	Third Quarter				First Nine Months				Percentage Change						Second Quarter				First Six Months				Second			First Six
	2021		2020		2021		2020		Third Quarter			First Nine Months			2022		2021		2022		2021		Quarter			Months
Consumer products		1,425		1,390		4,307		3,766		2.5	%		14.4	%		1,379		1,489		2,654		2,882		(7.4	)%		(7.9	)%
Industrial products		443		388		1,280		1,218		14.2			5.1			421		438		824		837		(3.9	)		(1.6	)
Agricultural products		265		293		896		855		(9.6	)		4.8			303		313		608		631		(3.2	)		(3.6	)
Coal		404		360		1,127		1,036		12.2			8.8			373		384		759		723		(2.9	)		5.0
		2,537		2,431		7,610		6,875		4.4			10.7			2,476		2,624		4,845		5,073		(5.6	)		(4.5	)

Railroad operating revenues increased ~~11.8%~~15.1% in the ~~third~~second quarter and ~~11.7%~~12.9% in the first ~~nine~~six months of ~~2021~~2022 compared to ~~2020. Railroad operating revenues in~~ 2021 ~~reflected higher volumes of 4.4% in the third quarter and 10.7% in the first nine months, as well as~~primarily due to a ~~5.3%~~21.9% quarter-to-date and a ~~0.3%~~17.9% year-to-date increase in average revenue per car/~~unit. Higher~~unit resulting from higher fuel surcharge revenue driven by higher fuel prices, along with increased rates per car/~~unit~~unit. Railroad operating revenues reflected lower volumes of 5.6% in the second quarter and ~~increased fuel surcharges, principally from higher fuel prices, were offset by business mix changes.~~4.5% in the first six months of 2022 compared to 2021. Pre-tax earnings ~~were $2.0 billion and $5.7 billion~~increased 8.7% in the ~~third~~second quarter and 8.9% in the first ~~nine~~six months of ~~2021, respectively, increases of 14.2% and 16.7%, respectively,~~2022 compared to the corresponding 2020 periods. The COVID-19 pandemic caused a significant economic slowdown that adversely affected our volumes in 2020. Revenue changes were driven by continued improvements from the 2020 effects of the COVID-19 pandemic, partially offset by the ongoing disruptions in the global supply chain.2021.

Operating revenues from consumer products were ~~$2.1~~$2.5 billion in the ~~third~~second quarter and ~~$6.1~~$4.5 billion in the first ~~nine~~six months of ~~2021,~~2022, increases of ~~11.2%~~17.6% and ~~16.3%~~14.1%, respectively, from ~~2020. Volumes increased 2.5% in the third quarter and 14.4% in the first nine months of 2021, with a~~2021. The increases reflected higher average revenue per car/unit, partially offset by volume decreases of 7.4% in ~~both periods.~~the second quarter and 7.9% in the first six months of 2022 as compared to 2021. The volume decreases were primarily due to lower international intermodal shipments resulting from supply chain disruptions, partially offset by modest increases ~~for the first nine months of 2021 resulted from growth~~ in domestic intermodal ~~in both international~~ and ~~domestic shipments driven by increased retail sales, inventory replenishments by retailers and increased e-commerce activity, as well as from growth in~~ automotive ~~shipments.~~

~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

Operating revenues from industrial products were ~~$1.4~~$1.5 billion in the ~~third~~second quarter and ~~$3.9~~$2.8 billion in the first ~~nine~~six months of ~~2021,~~2022, increases of ~~15.2%~~7.8% and ~~3.5%~~6.9%, respectively, from ~~2020. Volumes increased 14.2% in the third quarter and 5.1% in the first nine months, with a~~2021. The increases reflected higher average revenue per car/unit, partially offset by volume decreases of 3.9% in the ~~third~~second quarter and ~~a lower average revenue per car/unit~~1.6% in the first ~~nine~~six months of 2022 as compared to 2021. The volume ~~increases~~decreases were primarily due to ~~improvement~~a decrease in petroleum shipments related to lower demand for crude by rail and network challenges, with the decrease in the ~~U.S. industrial economy, driving higher volumes in the construction and building sectors,~~first six months partially offset by ~~lower petroleum~~increased volumes ~~due to unfavorable market conditions~~ in ~~the energy sector.~~other product categories.

Operating revenues from agricultural products ~~decreased 10.4%~~were $1.4 billion in the ~~third~~second quarter ~~to $1.1 billion~~ and ~~increased 7.1% to $3.6~~$2.7 billion in the first ~~nine~~six months of ~~2021,~~2022, increases of 9.1% and 6.4%, respectively, compared to 2021. The increases were primarily attributable to higher average revenue per car/unit, partially offset by decreased volumes of 3.2% in the ~~same periods~~second quarter and 3.6% in ~~2020.~~the first six months of 2022 as compared to 2021. The ~~revenue changes reflected~~ volume decreases ~~of 9.6% in the third quarter~~were primarily due to lower grain exports, ~~and lower average revenue per car/unit. Volumes increased 4.8% in the first nine months due to higher domestic and export grain shipments,~~partially offset by higher volumes of ~~ethanol~~renewable diesel and ~~related commodities and higher revenue per car/unit.~~oil feedstocks.

Operating revenues from coal were ~~$867 million~~$1.0 billion in the ~~third~~second quarter and ~~$2.3~~$1.9 billion in the first ~~nine~~six months of ~~2021,~~2022, increases of ~~33.2%~~30.2% and ~~18.5%~~29.9%, respectively, from ~~2020,~~2021. The increases were primarily attributable to ~~higher volumes of 12.2% in the third quarter and 8.8% in the first nine months, as well as from~~ higher average revenue per car/unit. ~~Volume increases~~Volumes decreased 2.9% in ~~2021 were attributable~~the second quarter primarily due to network challenges, while volumes increased 5.0% in the first six months of 2022 due to increased electricity generation, higher natural gas prices and improved export demand.

Railroad operating expenses were ~~$3.3~~$4.1 billion in the ~~third~~second quarter and ~~$10.0~~$7.8 billion in the first ~~nine~~six months of ~~2021,~~2022, increases of ~~$342~~$687 million ~~(11.4%~~(20.3%) and ~~$919 million (10.1%~~$1.1 billion (16.3%), respectively, compared to 2021, primarily due to significant increases in the ~~same periods in 2020. The~~cost of fuel, as well as higher compensation and benefits expenses. Our ratio of railroad operating expenses to railroad operating revenues ~~decreased 0.2~~increased 2.8 percentage points to ~~59.5%~~63.2% in the ~~third~~second quarter and ~~0.9~~1.9 percentage points to ~~61.2%~~63.9% in the first ~~nine~~six months of ~~2021~~2022 versus the ~~2020~~comparable 2021 periods. ~~The increases in railroad operating expenses reflected higher volumes and higher average fuel prices, partially offset by productivity improvements.~~

Compensation and benefits expenses increased ~~$63~~$68 million ~~(5.7%~~(5.9%) in the ~~third~~second quarter and ~~$171~~$128 million ~~(5.2%~~(5.5%) in the first ~~nine~~six months of ~~2021~~2022 compared to ~~2020. The increases were~~2021, primarily due to ~~increased volumes, partially offset by productivity improvements.~~wage inflation, health and welfare costs and lower productivity. Fuel expenses increased ~~$311~~$583 million ~~(78.9%~~(84.1%) in the ~~third~~second quarter and ~~$613~~$894 million ~~(45.9%~~(71.9%) in the first ~~nine~~six months of ~~2021~~2022 compared to ~~2020,~~2021, primarily due to higher ~~average~~ fuel prices. Purchased service expenses increased $31 million (6.5%) in the third quarter and $96 million (6.7%) in the first nine months of 2021 compared to 2020, primarily due to higher volumes and the effects of insurance recoveries in 2020 related to 2019 flooding,prices, partially offset by ~~improved productivity. Equipment rents, materials~~lower volumes.

Item 2. Management’s Discussion and ~~other expenses decreased $55 million (14.0%) in the third quarter, primarily due to a gain on land sale,~~Analysis of Financial Condition and ~~increased $43 million (3.5%) in the first nine months~~Results of ~~2021 compared to 2020 due to higher volume-related costs.~~Operations

We currently own ~~91.1% of the outstanding common stock~~92% of Berkshire Hathaway Energy Company (“BHE”), which operates a global energy business. BHE’s domestic regulated utility interests ~~are comprised of~~include PacifiCorp, MidAmerican Energy Company (“MEC”) and NV Energy. ~~In Great Britain,~~ BHE subsidiaries also operate two regulated electricity distribution businesses referred to as Northern ~~Powergrid.~~Powergrid in Great Britain. BHE’s natural gas pipelines consist of five domestic regulated interstate natural gas pipeline systems and a 25% interest in a liquefied natural gas export, import and storage facility (“LNG interest”), which BHE operates and consolidates for financial reporting purposes. ~~Three of the natural gas pipeline systems and the LNG interest were acquired on November 1, 2020 from Dominion Energy, Inc. (“BHE GT&S”).~~ Other energy businesses include a regulated electricity transmission-only business in Alberta, Canada (“AltaLink, L.P.”) and a diversified portfolio of mostly renewable independent power projects and investments. BHE also operates ~~the largest~~a residential real estate brokerage ~~firm~~business and ~~one~~a large network of ~~the largest~~ residential real estate brokerage ~~franchise networks~~franchises in the United States.

~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

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

	Third Quarter						First Nine Months						Second Quarter						First Six Months
	2021			2020			2021			2020			2022			2021			2022			2021
Revenues:
Energy operating revenue	$	5,225		$	4,451		$	14,375		$	11,504		$	4,940		$	4,301		$	9,763		$	9,150
Real estate operating revenue		1,743			1,742			4,738			3,828			1,672			1,763			2,879			2,995
Other income (loss)		45			33			(91	)		60			(94	)		21			(141	)		(136	)
Total revenue		7,013			6,226			19,022			15,392			6,518			6,085			12,501			12,009
Costs and expense:
Energy cost of sales		1,385			1,169			4,064			3,095			1,525			1,110			2,985			2,679
Energy operating expense		2,132			1,952			6,302			5,301			2,343			2,134			4,496			4,170
Real estate operating costs and expense		1,608			1,503			4,312			3,492			1,555			1,584			2,734			2,704
Interest expense		513			480			1,547			1,430			531			518			1,046			1,034
Total costs and expense		5,638			5,104			16,225			13,318			5,954			5,346			11,261			10,587
Pre-tax earnings		1,375			1,122			2,797			2,074			564			739			1,240			1,422
Income tax expense (benefit)*		(398	)		(412	)		(842	)		(778	)		(421	)		(212	)		(704	)		(444	)
Net earnings after income taxes		1,773			1,534			3,639			2,852			985			951			1,944			1,866
Noncontrolling interests of BHE subsidiaries		103			4			311			11			120			102			229			208
Net earnings attributable to BHE		1,670			1,530			3,328			2,841			865			849			1,715			1,658
Noncontrolling interests and preferred stock dividends		174			135			389			252			99			109			199			215
Net earnings attributable to Berkshire Hathaway shareholders	$	1,496		$	1,395		$	2,939		$	2,589		$	766		$	740		$	1,516		$	1,443
Effective income tax rate		(28.9	)%		(36.7	)%		(30.1	)%		(37.5	)%		(74.6	)%		(28.7	)%		(56.8	)%		(31.2	)%

The discussion of BHE’s operating results that follows is based on after-tax earnings, reflecting how the energy businesses are managed and evaluated. A summary of net earnings attributable to BHE follows ~~(in~~(dollars in millions).

	Third Quarter				First Nine Months						Percentage Change						Second Quarter						First Six Months						Percentage Change
	2021		2020		2021			2020			Third Quarter			First Nine Months			2022			2021			2022			2021			Second Quarter			First Six Months
PacifiCorp	$	333	$	286	$	728		$	629			16.4	%		15.7	%	$	83		$	226		$	213		$	395			(63.3	)%		(46.1	)%
MidAmerican Energy Company		373		337		728			695			10.7			4.7			204			211			445			355			(3.3	)		25.4
NV Energy		282		249		416			367			13.3			13.4			93			100			122			134			(7.0	)		(9.0	)
Northern Powergrid		83		26		162			172			219.2			(5.8	)		71			(25	)		182			79		*				130.4
Natural gas pipelines		144		78		627			321			84.6			95.3			188			100			497			483			88.0			2.9
Other energy businesses		230		207		521			527			11.1			(1.1	)		310			229			483			291			35.4			66.0
Real estate brokerage		102		177		321			246			(42.4	)		30.5			84			135			105			219			(37.8	)		(52.1	)
Corporate interest and other		123		170		(175	)		(116	)		(27.6	)		50.9			(168	)		(127	)		(332	)		(298	)		32.3			11.4
	$	1,670	$	1,530	$	3,328		$	2,841			9.2			17.1		$	865		$	849		$	1,715		$	1,658			1.9			3.4

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

PacifiCorp operates a regulated electric utility in portions of several Western states, including Utah, Oregon and Wyoming. After-tax earnings ~~increased $47~~decreased $143 million in the ~~third~~second quarter and ~~$99~~$182 million in the first ~~nine~~six months of ~~2021~~2022 as compared to ~~2020. These~~2021. The decreases reflected higher operating expenses and lower income tax benefits mainly from lower production tax credits recognized, partially offset by slight increases ~~reflected higher~~in utility margin (operating revenue less cost of sales), lower operating expenses in the third quarter and increased income tax benefits from the impacts of ratemaking as well as higher production tax credits recognized on new wind-powered generating facilities placed in-service.. The ~~earnings~~ increases ~~were partially offset by higher year-to-date operating expenses and lower allowances for equity and borrowed funds used during construction. The comparative changes~~ in operating expenses reflected ~~increased depreciation expense~~higher costs associated with wildfires, higher general and plant maintenance costs and incremental costs from ~~the impacts of a deprecation study effective January 1, 2021, and~~ additional assets placed ~~in-service, offset by costs recognized in the third quarter of 2020 associated with a settlement agreement and wildfires.~~

~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

PacifiCorp’s utility margin was ~~approximately $1.0 billion~~$863 million in the ~~third~~second quarter and ~~$2.7~~$1.7 billion in the first ~~nine~~six months of ~~2021,~~2022, increases of $6 million and ~~$131~~$20 million, respectively, from the comparable periods in ~~2020. These~~2021. The increases reflected higher ~~retail~~operating revenue from ~~increases~~favorable retail and wholesale pricing, partially offset by lower operating revenue from decreases in retail customer volumes and higher ~~wholesale and other revenue, partially offset by higher~~ thermal generation ~~and purchased power~~ costs. Retail customer volumes ~~increased 2.1%~~decreased 3.3% in the ~~third~~second quarter and ~~4.4%~~0.7% in the first ~~nine~~six months of ~~2021 as~~2022 compared to ~~2020,~~2021, primarily due to ~~higher customer usage, a favorable~~the unfavorable impact of weather and lower customer usage, partially offset by an increase in the average number of customers.

MEC operates a regulated electric and natural gas utility primarily in Iowa and Illinois. After-tax earnings ~~increased $36~~decreased $7 million in the ~~third~~second quarter and ~~$33~~increased $90 million in the first ~~nine~~six months of ~~2021~~2022 compared to ~~2020. These increases~~2021. The increase for the first six months reflected higher electric utility margin and increased income tax benefits, partly offset by higher operating expenses. The ~~increases~~increase in operating expenses included higher costs associated with certain regulatory mechanisms as well as incremental costs associated with additional wind-powered generating facilities placed ~~in-service and higher natural gas distribution costs, partially offset by storm restoration costs recognized in the third quarter of 2020.~~in-service. The income tax benefit ~~increases were~~increase was mainly due to higher production tax credits recognized on new wind-powered generating facilities placed in-service, partially offset by the impacts of ratemaking.

MEC’s electric utility margin was ~~$691~~$551 million in the ~~third~~second quarter and ~~$1.6~~$1.0 billion in the first ~~nine~~six months of ~~2021,~~2022, increases of ~~13%~~14% and 8%18%, respectively, versus ~~2020. These~~2021. The increases were attributable to higher operating revenue from ~~wholesale~~increased retail and ~~retail~~wholesale customer volumes and favorable wholesale pricing, partially offset by higher ~~thermal generation and~~ purchased power costs. Electric retail customer volumes increased ~~5.6%~~3.3% in the ~~third~~second quarter and ~~6.5%~~4.4% in the first ~~nine~~six months of ~~2021~~2022 as compared to ~~2020,~~2021, primarily due to ~~increased~~higher customer usage ~~by certain industrial customers~~ and the favorable ~~impacts~~impact of weather.

NV Energy operates regulated electric and natural gas utilities in Nevada. After-tax earnings ~~increased $33~~decreased $7 million in the ~~third~~second quarter and ~~$49~~$12 million in the first ~~nine~~six months of ~~2021~~2022 compared to ~~2020. These increases~~2021. The decreases reflected ~~lower~~higher operating expenses ~~lower interest expense~~from increased plant operations and ~~lower income tax expense from the impacts of ratemaking, partially offset by lower electric utility margin. The decreases in operating~~maintenance expenses, ~~were mainly due to lower~~higher comparative accruals for earnings sharing ~~partially offset by higher depreciation expense~~and incremental costs from additional assets placed in-service.

NV Energy’s electric utility margin was ~~$621~~$404 million in the ~~third~~second quarter and ~~$1.3 billion~~$710 million in the first ~~nine~~six months of ~~2021, decreases of 6% and 4%, respectively,~~2022, relatively unchanged compared to ~~2020. These decreases were primarily due to revenue reductions from lower base tariff general rates and a favorable regulatory decision in 2020, partially offset by a 4.2% increase in electric~~2021. Electric retail customer volumes ~~for~~increased 0.4% in the second quarter and 2.0% in the first ~~nine~~six months of 2022 compared to 2021, ~~price impacts from changes in sales mix and~~primarily due to an increase in the average number of ~~customers. The increase in electric retail customer volumes was primarily due to~~customers and higher customer usage, ~~and~~partially offset by the ~~favorable impacts~~unfavorable impact of weather.

Northern Powergrid’s after-tax earnings increased ~~$57~~$96 million in the ~~third~~second quarter and ~~decreased $10~~$103 million in the first ~~nine~~six months of ~~2021~~2022 as compared to ~~2020. These changes reflected~~2021, reflecting the ~~impacts of changes~~impact on deferred income taxes in 2021 from an increase in the United Kingdom ~~corporate~~ income tax rate, ~~higher distribution revenue, mainly from increased tariff rates and units distributed, and from favorable~~partially offset by unfavorable foreign currency exchange rate movements in ~~2021.~~2022. Earnings in ~~the first nine months~~each period of 2021 included deferred income tax expense of $109 million related to the enactment in June 2021 of an increase in the United Kingdom income tax rate from 19% to 25%, effective April 1, 2023, while earnings in each period of 2020 included deferred income tax expense of $35 million related to the enactment in July 2020 of an increase in the income tax rate from 17% to 19%, effective April 1, 2020.2023.

Natural gas pipelines’ after-tax earnings increased ~~$66~~$88 million in the ~~third~~second quarter and ~~$306~~$14 million in the first ~~nine~~six months of ~~2021~~2022 compared to ~~2020. Earnings in 2021 from~~2021. The increases were primarily due to higher earnings at BHE GT&S, ~~were $74 million~~largely from favorable state income tax adjustments, the impacts of an agreement in ~~the third quarter~~principle related to a general rate case and ~~$247 million in the first nine months. In addition,~~lower operating expenses. The year-to-date ~~earnings increased from the effects of~~increase was offset by higher margins on natural gas sales and higher transportation revenue ~~at Northern Natural Gas, largely~~in the first quarter of 2021 due to ~~increased~~an increase in demand ~~from~~as a result of the February 2021 winter storms.

Other energy businesses’ after-tax earnings increased ~~$23~~$81 million in the ~~third~~second quarter and ~~decreased $6~~$192 million in the first ~~nine~~six months of ~~2021~~2022 compared to ~~2020.~~2021. The ~~third quarter~~increases in earnings ~~increase was mainly due to higher operating revenue from a transmission investment. The decrease in year-to-date earnings was~~were primarily due to ~~a decline in~~increased wind tax equity investment earnings of ~~$48~~$40 million ~~partially offset by~~in the second quarter and $158 million in the first six months of 2022 as well as from higher operating revenue from owned renewable energy projects. The ~~decrease~~increases in wind tax equity investment earnings ~~was primarily due to increased losses from preexisting tax equity investments of $123 million, largely attributable to the February 2021 winter storms, partially offset by~~reflected increased income tax benefits from projects reaching commercial operation over the past twelve months. The comparative increase in year-to-date earnings also reflected the impact of significant losses in the first quarter of 2021 on pre-existing tax equity investments due to the February 2021 winter storms.

Real estate brokerage after-tax earnings decreased $51 million in the second quarter and $114 million in the first six months of 2022 compared to 2021. The decreases in earnings were primarily attributable to lower earnings from mortgage services due to a decrease in funded volume and in refinancing activity, and lower earnings from brokerage and settlement services from a decrease in closed units at existing companies.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Real estate brokerage after-tax earnings decreased $75 million in the third quarter and increased $75 million in the first nine months of 2021 compared to 2020. The decrease in the third quarter reflected lower earnings from mortgage services due to a decrease in funded volume largely attributable to a decrease in refinance activity. The earnings increase during the first nine months was due to a comparative increase in closed brokerage transaction volumes in 2021.

Corporate interest and other after-tax ~~earnings decreased $47~~losses increased $41 million in the ~~third~~second quarter and ~~$59~~$34 million in the first ~~nine~~six months of ~~2021~~2022 compared to ~~2020,~~2021, reflecting lower federal income tax credits recognized, ~~changes in operating expenses (lower in the third quarter and higher in the first nine months) and higher interest expense from corporate debt issued in 2020, as well as~~partially offset by higher earnings from non-regulated energy ~~services.~~services in the first six months.

A summary of revenues and earnings of our manufacturing, service and retailing businesses follows (dollars in millions).

	Third Quarter						First Nine Months						Percentage Change						Second Quarter						First Six Months							Percentage Change
	2021			2020			2021			2020			Third Quarter			First Nine Months			2022			2021				2022			2021			Second Quarter			First Six Months
Revenues
Manufacturing	$	17,496		$	15,170		$	50,821		$	43,238			15.3	%		17.5	%	$	19,772		$	17,412			$	38,193		$	33,325			13.6	%		14.6	%
Service and retailing		21,291			19,319			62,143			55,351			10.2			12.3			22,879			21,272				44,509			40,852			7.6			9.0
	$	38,787		$	34,489		$	112,964		$	98,589								$	42,651		$	38,684			$	82,702		$	74,177
Pre-tax earnings
Manufacturing	$	2,445		$	2,255		$	7,595		$	5,765			8.4	%		31.7	%	$	3,028		$	2,714			$	5,852		$	5,150			11.6	%		13.6	%
Service and retailing		1,102			875			3,413			1,950			25.9			75.0			1,275			1,270				2,492			2,311			0.4			7.8
		3,547			3,130			11,008			7,715									4,303			3,984				8,344			7,461
Income taxes and noncontrolling interests		841			784			2,679			1,882									1,054			980				2,070			1,838
Net earnings*	$	2,706		$	2,346		$	8,329		$	5,833								$	3,249		$	3,004			$	6,274		$	5,623
Effective income tax rate		22.9	%		24.4	%		23.7	%		24.0	%								24.0	%		24.1	%			24.3	%		24.1	%
Pre-tax earnings as a percentage of revenues		9.1	%		9.1	%		9.7	%		7.8	%								10.1	%		10.3	%			10.1	%		10.1	%

~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

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

	Third Quarter						First Nine Months						Second Quarter						First Six Months
	2021			2020			2021			2020			2022			2021			2022			2021
Revenues
Industrial products	$	7,192		$	6,173		$	21,050		$	19,320		$	7,714		$	7,186		$	15,189		$	13,858
Building products		6,374			5,672			18,404			15,497			7,710			6,402			14,422			12,030
Consumer products		3,930			3,325			11,367			8,421			4,348			3,824			8,582			7,437
	$	17,496		$	15,170		$	50,821		$	43,238		$	19,772		$	17,412		$	38,193		$	33,325
Pre-tax earnings
Industrial products	$	1,124		$	940		$	3,508		$	2,781		$	1,270		$	1,242		$	2,486		$	2,384
Building products		833			825			2,576			2,088			1,307			973			2,451			1,743
Consumer products		488			490			1,511			896			451			499			915			1,023
	$	2,445		$	2,255		$	7,595		$	5,765		$	3,028		$	2,714		$	5,852		$	5,150
Pre-tax earnings as a percentage of revenues
Industrial products		15.6	%		15.2	%		16.7	%		14.4	%		16.5	%		17.3	%		16.4	%		17.2	%
Building products		13.1	%		14.5	%		14.0	%		13.5	%		17.0	%		15.2	%		17.0	%		14.5	%
Consumer products		12.4	%		14.7	%		13.3	%		10.6	%		10.4	%		13.0	%		10.7	%		13.8	%

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The industrial products group includes metal products for aerospace, power and general industrial markets (Precision Castparts Corp. (“PCC”)), specialty chemicals (The Lubrizol Corporation (“Lubrizol”)), ~~complex~~ metal cutting tools/systems (IMC International Metalworking Companies (“IMC”)) and Marmon, which consists of more than 100 autonomous manufacturing and service businesses, ~~including equipment~~internally aggregated into eleven groups, and includes leasing for the rail, intermodal tank container and mobile crane ~~industries, which are internally aggregated into eleven groups.~~industries. The industrial products group also includes equipment and systems for the livestock and agricultural industries (CTB International) and a variety of industrial products for diverse markets (Scott Fetzer and LiquidPower Specialty Products).

Revenues of the industrial products group ~~in 2021~~ increased ~~$1.0 billion (16.5%~~$528 million (7.3%) in the ~~third~~second quarter and ~~$1.7~~$1.3 billion ~~(9.0%~~(9.6%) in the first ~~nine~~six months of 2022 compared to ~~2020.~~2021. Pre-tax earnings ~~in 2021~~ increased ~~$184~~$28 million ~~(19.6%~~(2.3%) in the ~~third~~second quarter and ~~$727~~$102 million ~~(26.1%~~(4.3%) in the first ~~nine~~six months of 2022 compared to ~~2020.~~2021. Pre-tax earnings as a percentage of revenues for the group were ~~16.7%~~16.4% for the first ~~nine~~six months of ~~2021, an increase~~2022, a decrease of ~~2.3~~0.8 percentage points compared to ~~2020.~~2021. Operating results in 2022 were negatively affected by a combination of higher materials and energy costs, manufacturing inefficiencies attributable to supply chain disruptions and labor shortages and asset impairment charges, which largely offset the impacts of increased average selling prices and increased demand for certain product categories. Operating results of this group’s international businesses were also negatively impacted in 2022 by the stronger U.S. Dollar.

PCC’s revenues were ~~$1.6~~$1.8 billion in the ~~third~~second quarter ~~of 2021, an increase of 6.6% over 2020, while revenues~~and $3.6 billion in the first ~~nine~~six months ~~decreased 16.4%~~of 2022, increases of 13.3% in the second quarter and 13.0% in the first six months compared to ~~2020. Historically,~~2021. PCC ~~has derived~~derives significant revenues and earnings from sales of aerospace products. The ~~COVID-19 pandemic contributed~~revenue increases in 2022 were primarily attributable to ~~material declines in commercial air travel~~higher demand for aerospace products, and ~~original equipment manufacturing (“OEM”) aircraft production in 2020.~~ to a lesser extent, general industrial products.

While commercial air travel increased in both the U.S. and international markets, traffic remains below pre-COVID-19 pandemic levels, especially for international routes. Long-term industry forecasts continue to show growth and strong demand for air travel and aerospace products. However, further recovery likely will continue to be uneven, attributable in part to travel restrictions imposed from time-to-time to control the spread of variants of the COVID-19 virus, as well as from the changes in supply chain conditions, including the availability of workers.

Commercial aircraft delivery rates by original equipment manufacturers of narrow-body aircraft have rebounded since the onset of the pandemic. However, deliveries of wide-body aircraft remain relatively low, in part attributable to the pause in the ~~U.S. increased in 2021, global demand remains below pre-pandemic levels,~~Boeing 787 program, as ~~efforts to manage the pandemic continue.~~it works through production quality issues.

PCC’s pre-tax earnings increased ~~$217~~$7 million in the ~~third~~second quarter and ~~$445~~$24 million in the first ~~nine~~six months of ~~2021~~2022 compared to ~~2020. The increases reflect~~2021, reflecting the ~~aggressive~~impact of increased revenues, substantially offset by a year-to-date reduction in pension plan income of $29 million, materials and utilities cost inflation and manufacturing inefficiencies attributable to worker shortages. PCC management continues to take actions ~~previously taken by management~~ to ~~resize~~improve operations, maintain safety and ~~restructure operations. We do not expect significant increases~~prepare for increased demand for PCC’s products. Growth in PCC’s revenues and earnings will be predicated on the ability to increase production levels to match the significant growth in aerospace ~~revenues or earnings to occur in the near term attributable to relatively low aircraft build rates, inventory levels currently within the industry supply chain and the ongoing impact~~demand, as well as resolution of the ~~COVID-19 pandemic on commercial air travel.~~quality issues associated with the Boeing 787.

Lubrizol’s revenues were approximately ~~$1.6~~$1.7 billion in the ~~third~~second quarter and ~~$5.0~~$3.4 billion in the first ~~nine~~six months of ~~2021,~~2022, increases of ~~9.6%~~3.5% in the second quarter and ~~13.4%, respectively, over~~0.5% in the ~~same periods in 2020.~~first six months compared to 2021. The revenue increases reflected higher average selling prices, ~~driven~~partially offset by ~~significant increases~~lower volumes. Sales volumes through the first half of 2022 were restricted by raw material supply constraints and unplanned temporary maintenance shutdowns, which limited Lubrizol’s production capabilities. The increase in average selling prices was due to escalating prices for raw materials, ~~and other manufacturing costs,~~including oil feedstocks, as well as ~~higher volumes~~for utilities, packaging, shipping and freight costs.

Lubrizol’s pre-tax earnings increased 60.2% in the second quarter and were relatively unchanged in the first ~~nine months. Sales volumes~~six months of 2022 compared to 2021. Earnings in the ~~Additives product lines~~second quarter of 2021 included property losses, asset impairment charges and containment and response costs of approximately $160 million in connection with a fire at its Chemtool facility in Rockton, Illinois in June 2021. Earnings in 2021 were also negatively ~~affected~~impacted by ~~severe winter storms in February 2021, which caused~~ the weather-related temporary shut-down of ~~several U.S.~~Additives facilities ~~as well as other temporary production shut-downs~~ in the ~~third~~U.S. in the first quarter, ~~of 2021.~~which resulted in lost sales and various incremental and non-recurring manufacturing and other operating costs. Earnings in 2022 included a comparative increase in insurance recoveries in connection with fires at facilities in 2021 and 2020 and were negatively impacted by rising raw material costs, lower sales volumes, and higher expenses from the unplanned temporary shutdowns, partially offset by higher selling prices.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Lubrizol’s pre-tax earnings decreased 76.9% in the third quarter and 39.0% in the first nine months of 2021 compared to 2020. Earnings in 2021 were negatively impacted by significant losses related to a fire in June 2021 at a facility of Chemtool Incorporated, a Lubrizol subsidiary, located in Rockton, Illinois and impairment charges in the third quarter related to an underperforming business in the Advanced Materials product lines. These losses and charges aggregated $73 million in the third quarter and $229 million in the first nine months of 2021. Earnings in 2021 were also negatively impacted by the effects of accelerating raw material costs and the previously mentioned temporary shut-down of Additives production, which resulted in lost sales and incremental manufacturing costs.

Marmon’s revenues were ~~$2.6~~$2.8 billion in the ~~third~~second quarter and ~~$7.2~~$5.4 billion in the first ~~nine~~six months of ~~2021,~~2022, increases of ~~30.0%~~10.3% in the second quarter and ~~26.3%, respectively,~~17.5% in the first six months compared to ~~2020.~~2021. The Transportation, Metal Services, Retail and Electrical groups generated significant revenue increases ~~were~~in the first six months of 2022, primarily ~~due~~attributable to higher ~~metal prices~~volumes and average metals prices. These groups contributed approximately 70% of Marmon’s aggregate revenue increase in the ~~Electrical, Metal Services and Plumbing & Refrigeration groups and higher volumes in most of~~ first six months.

Marmon’s other business groups, particularly those serving the construction, automotive, heavy-duty truck and restaurant markets. These increases were partially offset by the impact of divestitures and business closurespre-tax earnings decreased 5.8% in the ~~Water Technologies~~second quarter and ~~Retail Solutions groups and a year-to-date decline~~increased 14.6% in the first six months of 2022 compared to 2021. Earnings in the second quarter of 2022 included losses of approximately $90 million in the Rail & Leasing group ~~revenues.~~

~~Marmon’s pre-tax earnings~~related to the shutdown of its business in ~~2021 increased $106 million (38.3%) in the third quarter and $268 million (33.5%) in~~Russia. In the first ~~nine months compared to 2020. Earnings in the first nine~~six months of ~~2021 reflected~~2022, the Transportation, Metal Services, Retail, Electrical and Industrial Products groups contributed meaningful increases in earnings, due to a combination of higher ~~earnings across several business groups,~~sales volumes and margins and ongoing cost management, partially offset by lower earnings from the Rail & Leasing ~~and Water Technologies groups.~~group.

IMC’s revenues were ~~$862~~$930 million in the ~~third~~second quarter and ~~$2.7~~$1.9 billion in the first ~~nine~~six months of ~~2021,~~2022, increases of ~~23.4%~~1.7% in the ~~third~~second quarter and ~~22.2%~~5.0% in the first ~~nine~~six months compared to ~~2020.~~2021. Revenues in ~~the first nine months of 2021~~2022 reflected ~~improving business conditions~~increased sales in ~~most~~several geographic regions, partially offset by lower revenues in Asia and ~~favorable~~unfavorable foreign currency translation effects. IMC’s pre-tax earnings ~~increased 59.4%~~decreased 9.6% in the ~~third~~second quarter and ~~63.6%~~1.0% in the first ~~nine~~six months of 2022 compared to 2021, ~~versus 2020, primarily attributable to~~as the revenue increases were more than offset by higher ~~customer demand, improved manufacturing efficiencies, operating cost management saving initiatives~~raw material costs and ~~favorable~~unfavorable foreign currency translation effects.

The building products group includes manufactured and site-built home construction and related lending and financial services (Clayton Homes), flooring (Shaw), insulation, roofing and engineered products (Johns Manville), bricks and masonry products (Acme Building Brands), paint and coatings (Benjamin Moore) and residential and commercial construction and engineering products and systems (MiTek).

Revenues of the building products group increased ~~$702 million (12.4%~~$1.3 billion (20.4%) in the ~~third~~second quarter and ~~$2.9~~$2.4 billion ~~(18.8%~~(19.9%) in the first ~~nine~~six months of ~~2021~~2022 and pre-tax earnings increased $334 million (34.3%) in the second quarter and $708 million (40.6%) in the first six months of 2022 compared to ~~2020.~~2021. Residential ~~housing~~home construction in the U.S. ~~was~~continued to be relatively strong ~~during 2020 and through~~throughout the first ~~nine months~~half of ~~2021. However,~~2022. During the ~~effects~~first half of 2022, interest rates in the U.S. increased significantly compared to the previous low-rate environment. The increases in home mortgage interest rates will very likely slow demand for new home construction, which could adversely impact our businesses. We also continue to be negatively affected by persistent supply chain disruptions ~~limited our sales and contributed to production delays~~ and significant cost increases for ~~key~~many raw materials and other inputs, including ~~lumber, steel, petrochemical-based materials,~~ energy, freight ~~labor~~ and ~~fixtures. These effects necessitated sales price increases.~~labor.

Clayton Homes’ revenues ~~were approximately $2.6~~increased 28.1% to $3.4 billion in the ~~third~~second quarter and ~~$7.6~~25.0% to $6.2 billion in the first ~~nine~~six months of ~~2021, increases of $317 million (13.7%) and $1.5 billion (24.5%), respectively,~~2022 compared to ~~2020.~~2021. Revenues from home sales increased ~~$297 million (16.6%) in the third quarter and $1.4~~$1.2 billion ~~(29.4%~~(30.5%) in the first ~~nine~~six months of ~~2021, reflecting a net increase in units sold,~~2022, primarily due to higher average selling prices and increased ~~revenue per~~volume. New home ~~sold and changes in~~unit sales ~~mix. Unit sales of site-built homes~~also increased ~~22.7%~~9.8% in the first ~~nine~~six months of ~~2021, while~~2022, reflecting an 11.3% increase in higher factory-built manufactured home unit sales ~~increased 4.5%. Unit sales of~~and a 3.1% increase in site-built ~~homes declined in the third quarter of 2021 versus 2020, attributable to longer construction periods arising from supply chain constraints and labor shortages.~~home unit sales. Financial services revenues, which include mortgage origination and services, insurance and interest income from lending activities, increased ~~9.6%~~4.3% in the first ~~nine~~six months of ~~2021~~2022 compared to ~~2020.~~2021. Loan balances, net of allowances for credit losses, were approximately ~~$18.3~~$20.0 billion as of ~~September~~June 30, ~~2021,~~2022, an increase of approximately $1.2 billion from December 31, 2021.

Pre-tax earnings of Clayton Homes increased $168 million (36.9%) in the second quarter and $262 million (30.9%) in the first six months of 2022 compared to ~~December 31, 2020.~~2021. Earnings in 2022 reflected higher home sales, gross margins and net interest income and relatively low credit losses.

Aggregate revenues of our other building products businesses were approximately ~~$3.7~~$4.3 billion in the ~~third~~second quarter and ~~$10.8~~$8.2 billion in the first ~~nine~~six months of ~~2021,~~2022, increases of ~~$385~~$555 million ~~(11.5%~~(14.9%) in the second quarter and ~~$1.4~~$1.1 billion ~~(15.0%~~(16.3%)~~, respectively,~~ in the first six months versus ~~2020.~~2021. The increases were primarily due to higher average selling prices driven by higher input and ~~supply chain~~transportation costs, ~~as well as~~and to a lesser extent, from higher unit volumes ~~for paint~~ and ~~coatings~~product mix changes.

Pre-tax earnings of our other building products businesses increased $166 million (32.1%) in the second quarter and ~~certain residential flooring, insulation~~$446 million (49.8%) in the first six months of 2022 compared to 2021. Earnings as a percentage of revenues in the first six months of 2022 increased 3.7 percentage points versus 2021. Year-to-date earnings in 2022 benefitted from an increase in pre-tax gains from a business divestiture and ~~engineered products.~~asset sales of $111 million, primarily in the first quarter. The increase in earnings in 2022 also reflected the impact of severe winter storms in the first quarter of 2021, which reduced sales and produced incremental production and other operating costs in the first half of 2021.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Pre-tax earnings of our building products group were relatively unchanged in the third quarter of 2021 versus 2020, while earnings increased $488 million (23.4%) in the first nine months. Pre-tax earnings of Clayton Homes were $391 million in the third quarter and $1.2 billion in the first nine months of 2021, increases of $52 million (15.3%) and $380 million (44.2%), respectively, compared to 2020. Earnings in the first nine months of 2021 reflected higher earnings from home sales, mortgage originations, net interest income and a decline of $116 million in the provision for expected credit losses, partially offset by the impact of rising manufacturing and supply chain costs. The provision for expected credit losses in the first nine months of 2020 were unusually high and included provisions for the expected impact of the COVID-19 pandemic. The comparative decline in the provision for expected credit losses is due to fewer actual and anticipated loan foreclosures.

Pre-tax earnings of our other building products businesses declined $45 million (9.2%) in the third quarter and increased $108 million (8.8%) in the first nine months of 2021 compared to the same periods in 2020. Earnings as a percentage of revenues decreased 2.7 percentage points in the third quarter and 0.7 percentage points in the first nine months of 2021 versus 2020. While customer demand was generally strong, reduced availability of materials and other product inputs from supply chain disruptions negatively affected sales and operating results. Higher materials costs, reduced availability of certain materials and freight services and higher restructuring and impairment charges reduced our pre-tax margin rates in 2021.

The consumer products group includes leisure vehicles (Forest River), several apparel and footwear operations (including Fruit of the Loom, Garan, Fechheimer, H.H. Brown Shoe Group and Brooks Sports) and high-performance batteries (Duracell). This group also includes custom picture framing products (Larson-Juhl) and jewelry products (Richline).

Consumer products group revenues increased approximately ~~$605~~$524 million ~~(18.2%~~(13.7%) in the ~~third~~second quarter and ~~$2.9~~$1.1 billion ~~(35.0%~~(15.4%) in the first ~~nine~~six months of ~~2021~~2022 compared to ~~2020. Revenues~~2021, reflecting higher revenues from Forest River and lower revenues from apparel and footwear businesses. Forest River’s revenues increased ~~24.7%~~34.1% in the ~~third~~second quarter and ~~45.3%~~37.0% in the first ~~nine~~six months of ~~2021~~2022 compared to ~~2020,~~2021, driven by higher average selling prices and a 5.3% year-to-date increase in unit sales. Forest River experienced exceptional sales ~~increase~~growth in recent years, however there are signs of ~~37.5% in recreational vehicles.~~slowing demand which could reverse that trend. Revenues ~~in 2021 were, in general, significantly higher at several~~ of our ~~other~~apparel and footwear businesses ~~that were severely impacted by~~declined $93 million (7.2%) in the ~~pandemic~~second quarter and $137 million (5.4%) in the first ~~half~~six months of ~~2020. Apparel and footwear~~2022 compared to 2021, reflecting lower revenues ~~increased 18.5%~~from apparel (15.5% in the ~~third~~second quarter and ~~35.4%~~10.1% in the first ~~nine months of 2021 compared~~six months), partly offset by higher revenues from footwear. The declines in apparel revenues were driven by lower volumes, as retail customers reduced orders in response to ~~2020, reflecting significant comparative increases in unit sales, attributable in part to inventory restocking by certain customers and increased consumer demand.~~rising inventories.

Pre-tax earnings of our consumer products group ~~were substantially unchanged~~declined $48 million (9.6%) in the ~~third~~second quarter and ~~increased $615~~$108 million ~~(68.6%~~(10.6%) in the first ~~nine~~six months of ~~2021~~2022 versus ~~2020.~~2021. Pre-tax earnings as a percentage of revenues decreased ~~2.3 percentage points in the third quarter and increased 2.7~~3.1 percentage points in the first ~~nine~~six months of ~~2021~~2022 compared to ~~2020. Earnings~~2021. The declines in ~~the third quarter~~earnings in 2022 reflected ~~higher~~lower aggregate earnings ~~at Forest River offset by lower earnings~~ from Duracell and the apparel and footwear businesses. The comparative increase in pre-tax earnings for the first nine months reflected significant earnings increases at all of our businesses, driven by Forest River, the apparel and footwear businesses, partially offset by higher earnings from Forest River. Forest River’s earnings increases were primarily due to the increases in sales, partly offset by higher materials costs. Apparel and ~~Duracell.~~footwear earnings declined about 50% in the second quarter and in the first half of 2022 compared to 2021. Our ~~consumer products~~apparel businesses ~~are also experiencing cost increases attributable to~~were negatively impacted by lower sales volumes, reduced manufacturing efficiencies and higher input costs, including raw material, freight, labor and other operating costs. While supply chain ~~disruptions.~~

~~Item 2. Management’s Discussion~~restrictions eased somewhat in the second quarter of 2022, we expect that the operating earnings of these businesses for the remainder of 2022 will be likely lower, due to slowing demand and ~~Analysis of Financial Condition and Results of Operations~~

A summary of revenues and pre-tax earnings ~~(loss)~~ of our service and retailing businesses follows (dollars in millions).

	Third Quarter						First Nine Months						Second Quarter						First Six Months
	2021			2020			2021			2020			2022			2021			2022			2021
Revenues
Service	$	4,131		$	3,068		$	11,718		$	9,093		$	4,737		$	3,982		$	9,260		$	7,587
Retailing		4,548			4,211			13,896			11,179			4,880			4,995			9,472			9,348
McLane Company		12,612			12,040			36,529			35,079
McLane														13,262			12,295			25,777			23,917
	$	21,291		$	19,319		$	62,143		$	55,351		$	22,879		$	21,272		$	44,509		$	40,852
Pre-tax earnings (loss)
Pre-tax earnings
Service	$	696		$	470		$	2,013		$	1,155		$	756		$	727		$	1,480		$	1,317
Retailing		414			309			1,221			590			443			459			854			807
McLane Company		(8	)		96			179			205
McLane														76			84			158			187
	$	1,102		$	875		$	3,413		$	1,950		$	1,275		$	1,270		$	2,492		$	2,311
Pre-tax earnings (loss) as a percentage of revenues
Pre-tax earnings as a percentage of revenues
Service		16.8	%		15.3	%		17.2	%		12.7	%		16.0	%		18.3	%		16.0	%		17.4	%
Retailing		9.1	%		7.3	%		8.8	%		5.3	%		9.1	%		9.2	%		9.0	%		8.6	%
McLane Company		(0.1	)%		0.8	%		0.5	%		0.6	%
McLane														0.6	%		0.7	%		0.6	%		0.8	%

Our service ~~business~~ group ~~offers~~consists of several businesses. The largest of these businesses are NetJets and FlightSafety (aviation services), which offer shared ownership programs for general aviation aircraft ~~(NetJets)~~ and high technology training products and services to operators of aircraft, ~~(FlightSafety). We also distribute electronic components (TTI),~~and TTI, a distributor of electronics components. Our other service businesses franchise and service a network of quick service restaurants (Dairy Queen), lease transportation equipment (XTRA) and ~~offer~~furniture (CORT), provide third party logistics services that primarily serve the petroleum and chemical industries (Charter Brokerage)~~. Other service businesses include transportation equipment leasing (XTRA)~~, ~~furniture leasing (CORT),~~distribute electronic news, ~~distribution,~~ multimedia and regulatory filings (Business Wire) and ~~the operation of~~operate a television station in Miami, Florida (WPLG).

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Service group revenues increased ~~$1.1 billion (34.6%~~$755 million (19.0%) in the ~~third~~second quarter and ~~$2.6~~$1.7 billion ~~(28.9%~~(22.1%) in the first ~~nine~~six months of ~~2021~~2022 compared to ~~2020.~~2021. Revenues from TTI increased ~~45.3%~~16.3% in the ~~third~~second quarter and ~~40.9%~~22.3% in the first ~~nine~~six months of 2022 versus 2021, ~~versus 2020. The increases reflected accelerating~~reflecting strong demand ~~across~~in nearly all significant ~~markets, as customers attempt~~markets. During the second quarter, we saw signs that growth is beginning to ~~maintain adequate inventories~~decelerate, in ~~response~~part attributable to ~~high demand for components in end products and~~higher inventory levels within the supply ~~chain disruptions.~~chain. Revenues from aviation services (NetJets and FlightSafety) increased ~~31.0%~~22.6% in the ~~third~~second quarter and ~~25.4%~~23.0% in the first ~~nine~~six months of ~~2021 over low 2020 levels, primarily~~2022 compared to 2021. The increases reflected year-to-date increases in training hours (29%), customer flight hours (25%) and fuel surcharges to customers due to ~~higher training hours and significantly higher customer flight hours.~~significant increases in fuel prices, partially offset by the effects from changes in sales mix.

Pre-tax earnings of the service group increased ~~$226~~$29 million ~~(48.1%~~(4.0%) in the ~~third~~second quarter and ~~$858~~$163 million ~~(74.3%~~(12.4%) in the first ~~nine~~six months of ~~2021 versus 2020.~~2022 compared to 2021. Pre-tax earnings as a percentage of revenues ~~increased 1.5 percentage points in the third quarter and 4.5~~decreased 1.4 percentage points in the first ~~nine~~six months of ~~2021~~2022 compared to ~~2020.~~2021. The ~~increase~~increases in earnings ~~for the third quarter was primarily due to TTI. Earnings at most of our service businesses increased significantly in the first nine months of 2021 compared to 2020, with the largest~~reflected increases from TTI and ~~the~~CORT and decreases from aviation ~~services businesses.~~services. The increases in ~~year-to-date~~ earnings from NetJets and FlightSafety were primarily attributable to improved operating margins from higher volume, changes in business mix, increased operating efficiencies and the effects of past restructuring efforts. TTI’s earnings increasesTTI were primarily attributable to the increases in sales and improved operating cost leverage. The decreases in earnings from aviation services were attributable to the need to utilize more subcontracted aircraft due to the exceptional increase in customer flight hours, and from higher equipment maintenance and other operating costs, which more than offset the increases in revenues.

Our largest retailing business is Berkshire Hathaway Automotive, Inc. (“BHA”), ~~which~~representing 65% of our combined retailing revenue in the first six months of 2022. BHA consists of over 80 auto dealerships that sell new and pre-owned automobiles and offer repair services and related products. BHA ~~represents about 64% of our combined retailing revenues in the first nine months of 2021. BHA~~ also operates two insurance businesses, two auto auctions and an automotive fluid maintenance products distributor. Our retailing businesses also include four home furnishings retailing businesses (Nebraska Furniture Mart, R.C. Willey, Star Furniture and Jordan’s), which sell furniture, appliances, flooring and ~~electronics and represent about 21%~~electronics. The home furnishings group represented 20% of the combined retailing revenues in the first ~~nine~~six months of ~~2021.~~ 2022.

Other retailing businesses include three jewelry retailing businesses (Borsheims, Helzberg and Ben Bridge), See’s Candies (confectionary products), Pampered Chef (high quality kitchen tools), Oriental Trading Company (party supplies, school supplies and toys and novelties) and Detlev Louis Motorrad (“Louis”), a ~~Germany-based~~ retailer of motorcycle ~~accessories.~~

~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

Retailing group revenues ~~increased approximately $337~~decreased $115 million ~~(8.0%~~(2.3%) in the ~~third~~second quarter and ~~$2.7 billion (24.3%) in the first nine months of 2021 compared to 2020. BHA’s revenues in the third quarter and first nine months of 2021~~ increased ~~9.8% and 22.2%, respectively, over 2020, primarily due to increases in pre-owned vehicle unit sales, higher volumes of new auto sales~~$124 million (1.3%) in the first six months ~~and higher average selling prices. New auto unit sales declined significantly in the third quarter~~ of ~~2021, reflecting inventory shortages caused by supply chain disruption at OEMs. Home furnishings group revenues increased 11.7% in the third quarter and 27.5% in the first nine months of 2021 as~~2022 compared to ~~2020 attributable to higher consumer demand and higher average selling prices.~~

~~Pre-tax earnings increased $105 million (34.0%)~~2021. BHA’s revenues in the third quarter and $631 million (106.9%) in the first nine months of 2021 compared to 2020. Operating results of our retailing businesses were severely impacted by the pandemic beginning in March of 2020 and continued through the second quarter ~~of 2020. Over the second half of 2020~~declined 1.0% and ~~through~~increased 3.8% in the first six months of ~~2021,~~2022 compared to the same periods in 2021. BHA’s revenues from new and ~~pre-tax earnings of these businesses increased, and in certain instances increased to levels exceeding those in pre-pandemic periods. Results~~used vehicle sales decreased 2.7% in the ~~third~~second quarter ~~of 2021 moderated somewhat relative to~~and increased 2.8% in the first six months ~~reflecting~~of 2022 compared to 2021. Revenues from service and repair and finance and service contract revenues each increased versus 2021. Revenues from vehicle sales reflected higher average vehicle transaction prices, partly offset by lower unit sales. Unit sales continue to be constrained by low new vehicle production by original equipment manufacturers, attributable to the ~~effects of~~ongoing global computer chip shortages and other supply chain ~~disruptions, which,~~disruptions. Home furnishings group revenues were relatively unchanged in ~~particular, worsened with respect~~the second quarter and in the first six months of 2022 compared to ~~new automobiles.~~2021, as higher average selling prices were substantially offset by lower transaction volumes.

Retailing group pre-tax earnings decreased $16 million (3.5%) in the second quarter and increased $47 million (5.8%) in the first six months of 2022 compared to 2021. BHA’s pre-tax earnings increased ~~26.2%~~17.2% in the ~~third~~second quarter and ~~47.3%~~21.7% in the first ~~nine~~six months of ~~2021~~2022 compared to ~~2020,~~2021, primarily due to increases in vehicle ~~sales~~gross profit margins and ~~earnings from~~ finance and service contract ~~activities, as well as from lower floorplan interest expense, primarily attributable to significant declines in inventory levels,~~earnings per vehicle sold and from operating cost control efforts. Over the remainder of 2022, BHA’s comparative new vehicle gross profit margin rates may decline compared to 2021, as the current environment of elevated margins began during the second half of 2021. Aggregate pre-tax earnings for the remainder of our retailing group ~~increased $63~~decreased $52 million (20.8%) in the ~~third~~second quarter and ~~$447~~$35 million (8.0%) in the first ~~nine~~six months of ~~2021~~2022 compared to ~~2020. The initial effects of the pandemic in 2020 were severe for most of our other retailers~~2021, primarily due to declining earnings from the ~~restricted operations at many of those businesses during the first half of 2020. Results in 2021 also benefitted from relatively strong consumer demand~~furniture retailers and ~~the effects of restructuring efforts in 2020.~~Pampered Chef.

McLane operates a wholesale distribution business that provides grocery and non-food consumer products to retailers and convenience stores (“grocery”) and to restaurants (“foodservice”). McLane also operates businesses that are wholesale distributors of distilled spirits, wine and beer (“beverage”). The grocery and foodservice businesses generate high sales and very low profit margins. These businesses have several significant customers, including Walmart, 7-Eleven, Yum! Brands and others. Grocery sales ~~typically comprise about two-thirds~~comprised 61% of McLane’s consolidated sales in the first six months of 2022, with foodservice ~~comprising much~~representing most of the remainder. A curtailment of purchasing by any of its significant customers could have an adverse impact on McLane’s periodic revenues and earnings. ~~The grocery~~

Item 2. Management’s Discussion and ~~foodservice businesses continue to operate in an intensely competitive business environment.~~Analysis of Financial Condition and Results of Operations

Revenues increased ~~$572~~$967 million ~~(4.8%~~(7.9%) in the ~~third~~second quarter and ~~$1.45~~$1.9 billion ~~(4.1%~~(7.8%) in the first ~~nine~~six months of ~~2021~~2022 compared to ~~2020. Revenues~~2021, reflecting increases in the first six months of 2022 of 3.4% from the grocery business ~~were relatively unchanged over the first nine months of 2021, while revenues~~and 16.5% from the foodservice and beverage businesses increased 10.9% and 21.1%, respectively, compared to the first nine months of 2020. The foodservice business was significantly impacted by pandemic-related restaurant closures in 2020.

business. Pre-tax earnings decreased ~~$104~~$8 million (9.5%) in the ~~third~~second quarter and ~~$26~~$29 million (15.5%) in the first ~~nine~~six months of ~~2021~~2022 compared to ~~2020. The decreases were~~2021, primarily attributable to higher personnel costs, fuel expense and ~~fuel expense. McLane’s operations have been adversely affected~~insurance costs, partly offset by ~~supply chain disruptions, including shortages of truck drivers, affecting inventory and customer deliveries. There is~~ increased ~~competition for drivers within the trucking industry.~~gross sales margins. The increase in fuel expense was primarily attributable to significant increases in petroleum prices. McLane’s grocery and food service operating results continue to be adversely affected by supply chain constraints, including the effects of labor and truck driver shortages and higher inventory costs. We expect the current difficult operating environment to continue for the remainder of 2022.

A summary of investment and derivative contract gains/losses follows (dollars in millions).

~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

Unrealized gains and losses arising from changes in market prices of investments in equity securities are included in our reported earnings, which significantly increases the volatility of our periodic net earnings due to the magnitude of our equity securities portfolio and the inherent volatility of equity securities prices. Unrealized gains and losses also include the effects of changes in foreign currency exchange rates on investments in non-U.S. issuers that are held by our U.S. based subsidiaries. Pre-tax investment gains/losses included net unrealized ~~gains~~losses of ~~$4.8~~$66.9 billion in the ~~third~~second quarter and ~~$36.2~~$68.5 billion in the first ~~nine~~six months of ~~2021~~2022 compared to net unrealized gains of ~~$30.8~~$27.0 billion in the ~~third~~second quarter and ~~$16.5~~$31.5 billion in the first ~~nine~~six months of ~~2020~~2021 on securities we held at the end of the applicable period. ~~Investment~~ Taxable investment gains/losses ~~from market value changes in the first nine months of 2020~~ on equity securities sold ~~in 2020 were $13.9 billion.~~

~~Taxable investment gains on equity securities sold, which~~ is generally the difference between sales proceeds and the original cost ~~basis~~ of the securities ~~sold, were $0.9 billion~~sold. Sales of equity securities produced taxable gains of $76 million in the ~~third~~second quarter and ~~$2.9~~taxable losses of $663 million in the first six months of 2022 compared to taxable gains of $228 million in the second quarter and $2.0 billion in the first ~~nine~~six months of 2021. ~~Taxable investment gains on equity securities were $3.9 billion in the third quarter and $0.7 billion in the first nine months of 2020.~~

We believe that investment gains/losses, whether realized from sales or unrealized from changes in market prices, are often meaningless in terms of understanding our reported consolidated earnings or evaluating our periodic economic performance. We continue to believe the investment gains/losses recorded in earnings in any given period has little analytical or predictive value.

Derivative contract gains/losses include the changes in fair value of our few remaining equity index put option contract liabilities, which relate to contracts ~~that were~~ originated ~~prior to March~~between 2004 and 2008. The ~~periodic~~gains and losses from the changes in the fair values of these liabilities are recorded in earnings and can be significant due to the volatility of market prices in the ~~underlying~~related equity securities markets. As of ~~September~~June 30, ~~2021,~~2022, the intrinsic value of our remaining equity index put option contracts was ~~$83~~$179 million and our recorded liability at fair value was ~~$286~~$186 million. Our ultimate payment obligations, if any, under these contracts will be determined as of the contract expiration dates based on the intrinsic value as defined ~~under~~in the contracts.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

	Third Quarter						First Nine Months						Second Quarter						First Six Months
	2021			2020			2021			2020			2022			2021			2022			2021
Equity method earnings	$	310		$	244		$	665		$	346		$	205		$	141		$	512		$	355
Acquisition accounting expenses		(169	)		(195	)		(532	)		(593	)		(162	)		(183	)		(323	)		(363	)
Goodwill and intangible asset impairments		—			(19	)		—			(10,369	)
Corporate interest expense, before foreign currency effects		(75	)		(80	)		(232	)		(252	)		(67	)		(77	)		(137	)		(157	)
Foreign currency exchange rate gains (losses) on Berkshire and BHFC non-U.S. Dollar senior notes		196			(412	)		676			(329	)		1,061			(45	)		1,583			480
Income tax expense adjustments		—			(60	)		—			(60	)
Other		87			32			76			363			80			(5	)		159			(11	)
	$	349		$	(490	)	$	653		$	(10,894	)	$	1,117		$	(169	)	$	1,794		$	304

After-tax equity method earnings include our proportionate share of earnings attributable to our investments in Kraft Heinz, Pilot, Berkadia, ~~and~~ Electric Transmission of ~~Texas. Our after-tax~~Texas and Iroquois Gas Transmission Systems. Equity method earnings increased $157 million in the first six months of 2022 versus 2021, primarily due to higher earnings from Kraft Heinz ~~were $168 million for the third quarter~~ and $323 million for the first nine months of 2021. Our Kraft Heinz investment produced after-tax earnings of $142 million for the third quarter and an after-tax loss of $56 million for the first nine months of 2020, which included after-tax losses of $59 million in the third quarter and $611 million in the first nine months associated with goodwill and intangible asset impairment charges recorded by Kraft Heinz.Pilot.

After-tax acquisition accounting expenses include charges arising from the application of the acquisition method in connection with certain of Berkshire’s past business acquisitions. Such charges arise primarily from the amortization of intangible assets recorded in connection with those business acquisitions. Goodwill and intangible asset impairments in the first nine months of 2020 included $9.8 billion attributable to impairments of goodwill and certain identifiable intangible assets recorded in connection with our acquisition of PCC in 2016.

Foreign currency exchange rate gains and losses pertain to Berkshire’s Euro and Japanese Yen denominated debt and BHFC’s Euro and Great Britain Pound denominated debt. Changes in foreign currency exchange rates produce unrealized gains and losses from the periodic revaluation of these liabilities into U.S. Dollars. In 2022, we recorded significant foreign currency exchange rate gains on these debt issues, due to strengthening of the U.S. Dollar, which reduced the U.S Dollar carrying value of the debt. These gains were largely offset by losses included in investment gains/losses, pertaining to non-U.S. Dollar denominated investments held by our U.S. based subsidiaries. The gains and losses recorded in any given period can be significant due to the magnitude of the borrowings and the inherent volatility in foreign currency exchange rates.

~~Item 2. Management’s Discussion~~ Other earnings/loss consist primarily of Berkshire parent company investment income and ~~Analysis~~corporate expenses, other intercompany interest income where the interest expense is included in earnings of ~~Financial Condition~~the operating businesses and ~~Results of Operations~~unallocated income taxes.

Our ~~consolidated balance sheet~~Consolidated Balance Sheet continues to reflect very significant liquidity and a very strong capital base. Consolidated shareholders’ equity attributable to Berkshire shareholders at ~~September~~June 30, ~~2021~~2022 was ~~$472~~$461.2 billion, ~~an increase~~a decrease of ~~$29.3~~$45.0 billion since December 31, ~~2020.~~2021. Net ~~earnings~~loss attributable to Berkshire shareholders ~~were $50.1~~was $38.3 billion in the first ~~nine~~six months of ~~2021 and~~2022, which included after-tax ~~gains~~losses on our investments of ~~approximately $29.4 billion. Changes~~$54.4 billion, substantially all of which occurred in the second quarter. Investment gains and losses from changes in the market prices of our investments in equity securities ~~can~~will produce significant volatility in our earnings.

Berkshire’s common stock repurchase program, as amended, permits Berkshire to repurchase its Class A and Class B shares at prices below Berkshire’s intrinsic value, as conservatively determined by Warren Buffett, Berkshire’s Chairman of the Board and Chief Executive Officer, and Charlie Munger, Vice Chairman of the Board. The program ~~allows share repurchases in the open market or through privately negotiated transactions and~~ does not specify a maximum number of shares to be ~~repurchased.~~repurchased and does not require any specified repurchase amount. The program is expected to continue indefinitely. We will not repurchase our stock if it reduces the total amount of Berkshire’s consolidated cash, cash equivalents and U.S. Treasury Bills holdings below $30 billion. Financial strength and redundant liquidity will always be of paramount importance at Berkshire. Berkshire paid ~~$20.2~~$4.2 billion in the first ~~nine~~six months of ~~2021~~2022 to repurchase shares of its Class A and B common stock.

At ~~September~~June 30, ~~2021,~~2022, our insurance and other businesses held cash, cash equivalents and U.S. Treasury Bills of ~~$144.4~~$101.3 billion, which included ~~$116.6~~$76.1 billion in U.S. Treasury Bills. Investments in equity and fixed maturity securities (excluding our investment in Kraft Heinz) were ~~$328.9~~$348.8 billion. During the first six months of 2022, we paid cash of $57.3 billion to acquire equities securities and we received proceeds of $12.0 billion from sales of equity securities.

Our consolidated borrowings at June 30, 2022 were $119.1 billion, of which over 95% were by the Berkshire parent company, BHFC, BNSF and BHE and its subsidiaries. In the first six months of 2022, Berkshire and certain of its subsidiaries issued term debt of approximately $10.2 billion in the aggregate.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Berkshire parent company outstanding debt at ~~September~~June 30, ~~2021~~2022 was ~~$21.8~~$20.1 billion, a decrease of ~~$886 million~~$1.3 billion since December 31, ~~2020, which was primarily due to the effects of foreign currency exchange rate changes on Euro and Japanese Yen denominated debt.~~2021. In ~~the first nine months of 2021,~~January 2022, Berkshire repaid ~~€550~~$600 million ~~and $1.5 billion~~ of maturing senior ~~notes. In the first nine months of 2021, Berkshire~~notes and issued ~~€600 million of 0.5% senior notes due in 2041 and ¥160~~¥128.5 billion (approximately ~~$1.5~~$1.1 billion) of senior notes with maturity dates ranging from ~~2026~~2027 to ~~2041~~2052 and a weighted average interest rate of 0.5%. Berkshire’s borrowings decreased $1.8 billion in the first six months of 2022 from changes in foreign currency exchange rates on its non-U.S. Dollar denominated debt. Berkshire parent company debt ~~maturing~~maturities over the next twelve months approximate $4.3 billion, all of which is ~~$600 million.~~in the first six months of 2023.

Berkshire’s insurance and other subsidiary outstanding borrowings were ~~$17.9~~$22.5 billion at ~~September~~June 30, ~~2021,~~2022, which included senior note borrowings of BHFC, a wholly-owned financing subsidiary, of approximately ~~$13.1~~$17.9 billion. BHFC’s borrowings are used to fund a portion of loans originated and acquired by Clayton Homes and equipment held for lease by our railcar leasing business. In ~~January 2021,~~March 2022, BHFC ~~repaid $750 million~~issued $4.5 billion of ~~maturing~~ senior notes with maturity dates ranging from 2027 to 2052 and a weighted average interest rate of 3.4% and issued ~~$750 million~~€1.25 billion of ~~2.5%~~ senior notes ~~due~~maturing in ~~2051.~~2030 and 2034 with a weighted average interest rate of 1.8%. Aggregate maturities of BHFC debt ~~maturing over~~in the ~~next twelve~~first six months isof 2022 were $775 million. Berkshire guarantees BHFC’s senior notes for the full and timely payment of principal and interest.

~~Our railroad, utilities and energy businesses (conducted by~~BNSF’s outstanding debt was $23.4 billion as of June 30, 2022, an increase of $157 million from December 31, 2021. In June 2022, BNSF ~~and BHE) maintain very large investments~~issued $1.0 billion of 4.45% debentures due in ~~capital assets (property, plant and equipment) and will regularly make significant capital expenditures in the normal course of business. Capital expenditures of these two operations in~~2053. During the first ~~nine~~six months of ~~2021~~2022, BNSF repaid $800 million of term debt. Outstanding borrowings of BHE and its subsidiaries were ~~$6.7~~$53.1 billion at June 30, 2022, an increase of $1.3 billion from December 31, 2021. In April 2022, BHE issued $1.0 billion of 4.6% senior notes due in 2053, and ~~we currently forecast additional capital expenditures~~during the first six months of 2022, subsidiaries issued approximately ~~$3.1~~$1.3 billion of term debt with a weighted average interest rate of 3.5% and maturity dates ranging from 2024 to 2052. Aggregate debt maturities for BHE and BNSF over the ~~remainder of 2021.~~

next twelve months approximate $2.6 billion. Berkshire does not guarantee the repayment of debt issued by BNSF, BHE or any of their subsidiaries and is not committed to provide capital to support BNSF, BHE or any of their subsidiaries. ~~BNSF’s outstanding debt was $23.3 billion as of September 30, 2021, relatively unchanged from December 31, 2020. During~~

In the first ~~nine~~six months of ~~2021, BNSF repaid $888 million~~2022, our diverse group of ~~debt~~businesses generated net operating cash flows of approximately $15.4 billion. Our consolidated capital expenditures for property, plant and ~~issued $925 million of 3.3% debentures due~~equipment and equipment held for lease were $6.8 billion in ~~2051. Outstanding borrowings of BHE and its subsidiaries were $52.1 billion at September 30, 2021, relatively unchanged from December 31, 2020. During~~ the first ~~nine~~six months of ~~2021,~~2022, which included capital expenditures by our railroad, utilities and energy businesses (BNSF and BHE) of $4.8 billion. BNSF and BHE maintain very large investments in capital assets (property, plant and ~~its subsidiaries repaid $1.7~~equipment) and will regularly make significant capital expenditures in the normal course of business. We forecast additional capital expenditures of approximately $6.6 billion of term debt and issued $2.1 billion of term debt with a weighted average interest rate of 3.0% with due dates in 2051 and 2052, and short-term borrowings decreased by $318 million. Aggregate debt maturities for BHE and BNSF over the ~~next twelve months approximate $2.4 billion.~~remainder of 2022.

We are party to other contracts associated with ongoing business ~~and financing~~ activities, which will result in cash payments to counterparties in future periods. Certain obligations are included in our Consolidated Balance Sheets, such as ~~notes payable, which require~~operating lease liabilities and shared aircraft repurchase liabilities of NetJets.

We are also obligated to pay claims arising from property and casualty insurance companies. Such liabilities, including amounts from retroactive reinsurance, were $125.8 billion at June 30, 2022. However, the timing and amount of the payments under insurance and reinsurance contracts are contingent upon the outcome of future events. Actual payments ~~on contractually specified dates and~~will likely vary, perhaps materially, from any forecasted payments, as well as from the liabilities currently recorded in ~~fixed and determinable amounts.~~ our Consolidated Balance Sheet. We anticipate that these payments will be funded by operating cash flows.

Other obligations pertaining to the acquisition of goods or services in the future, such as certain purchase obligations, are not currently reflected in the ~~financial statements~~Consolidated Financial Statements and will be recognized in future periods as the goods are delivered or services are provided. ~~The timing~~As of June 30, 2022, the largest categories of our long-term contractual obligations primarily related to fuel, capacity, transmission and ~~amount~~maintenance contracts and capital expenditure commitments of BHE and BNSF and aircraft purchase commitments of NetJets.

On March 21, 2022, we agreed to acquire all of the ~~payments under certain contracts, such as insurance and reinsurance contracts, are contingent upon the outcome~~outstanding shares of ~~future events and the actual payments will likely vary, perhaps materially, from the estimated liabilities currently recorded in our Consolidated Balance Sheet.~~

~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

~~In the first nine months of 2021, Berkshire and certain of its subsidiaries issued term debt~~Alleghany Corporation (“Alleghany”) common stock for cash consideration of approximately ~~$5.9~~$11.6 billion, subject to Alleghany shareholder approval and receipt of various regulatory approvals. We currently anticipate this acquisition will close in the ~~aggregate. Principal~~fourth quarter of 2022. We also have an agreement to acquire an additional 41.4% of Pilot in 2023 and ~~interest payments associated with these borrowings~~agreements to acquire certain non-controlling interests of consolidated subsidiaries, which are ~~expected as follows:~~described in ~~2021 – $27 million;~~Note 26 to the Consolidated Financial Statements included in ~~2022 through 2025 – $121 million per annum; and thereafter – $8.8 billion.~~Item 8 of Berkshire’s Annual Report on Form 10-K for the year ended December 31, 2021.

Except as otherwise disclosed in this Quarterly Report, our contractual obligations as of ~~September~~June 30, ~~2021~~2022 were, in the aggregate, not materially different from those disclosed in ~~the “Contractual Obligations” section of~~ “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in Berkshire’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Certain accounting policies require us to make estimates and judgments that affect the amounts reflected in the Consolidated Financial Statements. Such estimates and judgments necessarily involve varying, and possibly significant, degrees of uncertainty. Accordingly, certain amounts recorded in the financial statements will likely be adjusted in the future based on new available information and changes in other facts and circumstances. Reference is made to “Critical Accounting Policies” discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Berkshire’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

Our Consolidated Balance Sheet as of ~~September~~June 30, ~~2021~~2022 includes estimated liabilities of ~~$125.5~~$125.8 billion for unpaid losses and loss adjustment expenses from property and casualty insurance and reinsurance contracts. Due to the inherent uncertainties in the processes of establishing these liabilities, the actual ultimate claim amounts will likely differ from the currently recorded amounts. A very small percentage change in estimates of this magnitude can result in a material effect on periodic earnings. The effects from changes in these estimates are recorded as a component of insurance losses and loss adjustment expenses in the period of the change.

Our Consolidated Balance Sheet as of ~~September~~June 30, ~~2021~~2022 included goodwill of acquired businesses of ~~$73.8~~$73.6 billion and indefinite-lived intangible assets of ~~$18.3~~$18.4 billion. We evaluate these assets for impairment at least annually and we conducted our most recent annual review during the fourth quarter of ~~2020.~~2021. In connection with that annual goodwill impairment review, the estimated fair values of five reporting units did not exceed our carrying values by at least 20%. The most significant of these reporting units was Precision Castparts Corp. (“PCC”). The estimated fair value of PCC was approximately $34.5 billion, exceeding our carrying value of approximately $31.1 billion by 10.7%. Our carrying value of PCC included goodwill of approximately $7.5 billion. For the four other reporting units, our aggregate estimated fair value was approximately $2.5 billion, which exceeded our aggregate carrying value of approximately $2.3 billion by 9.2%. Our carrying value of these units included goodwill of approximately $1.2 billion.

Goodwill and indefinite-lived intangible asset impairment reviews include determining the estimated fair values of our reporting units and assets. The key assumptions and inputs used in such determinations may include forecasting revenues and expenses, cash flows and capital expenditures, as well as an appropriate discount rate and other inputs. Significant judgment by management is required in estimating the fair value of a reporting unit and in performing impairment tests. Due to the inherent subjectivity and uncertainty in forecasting future cash flows and earnings over long periods of time, actual results may vary materially from the forecasts.

As of ~~September~~June 30, ~~2021,~~2022, we concluded it is more likely than not that goodwill recorded in our Consolidated Balance Sheet was not impaired. The long-term adverse effects of the COVID-19 pandemic on certain of our reporting units may prove to be worse than we currently anticipate, and we may need to record goodwill or indefinite-lived intangible asset impairment charges in future periods. Making estimates of the fair value of reporting units and judgments on goodwill impairments at this time are and will likely be significantly affected by assumptions on the severity, duration or long-term effects of the pandemic on a reporting unit’s business, which we cannot reliably predict. Consequently, any fair value estimates in such instances can be subject to wide variations.

As of the most recent annual goodwill impairment review, the estimated fair values of certain reporting units did not exceed our carrying values by at least 20%. The most significant of these reporting units was Precision Castparts Corp. (“PCC”). The estimated fair value of PCC was approximately $35.5 billion, exceeding our carrying value of approximately $32.1 billion by 10.6%. Our carrying value of PCC included goodwill of approximately $7.5 billion. For the four other reporting units where estimated fair value did not exceed carrying value by at least 20%, their aggregate estimated fair value of approximately $1.5 billion exceeded our aggregate carrying value of approximately $1.4 billion by 10.0%. Our carrying value of these units included goodwill of approximately $600 million.

Information concerning new accounting pronouncements is included in Note 2 to the accompanying Consolidated Financial Statements.

~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

Investors are cautioned that certain statements contained in this document as well as some statements in periodic press releases and some oral statements of Berkshire officials during presentations about Berkshire or its subsidiaries are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”). Forward-looking statements include statements which are predictive in nature, which depend upon or refer to future events or conditions, or which include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates” or similar expressions. In addition, any statements concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies or prospects and possible future Berkshire actions, which may be provided by management, are also forward-looking statements as defined by the Act. Forward-looking statements are based on current expectations and projections about future events and are subject to risks, uncertainties and assumptions about Berkshire and its subsidiaries, economic and market factors and the industries in which we do business, among other things. These statements are not guarantees of future performance and we have no specific intention to update these statements.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Actual events and results may differ materially from those expressed or forecasted in forward-looking statements due to a number of factors. The principal risk factors that could cause our actual performance and future events and actions to differ materially from such forward-looking statements include, but are not limited to, changes in market prices of our investments in fixed maturity and equity securities; losses realized from derivative contracts; the occurrence of one or more catastrophic events, such as an earthquake, hurricane, act of terrorism or cyber-attack that causes losses insured by our insurance subsidiaries and/or losses to our business operations; the frequency and severity of epidemics, pandemics or other outbreaks, including COVID-19, that negatively affect our operating results and restrict our access to borrowed funds through the capital markets at reasonable rates; the adverse impacts from geopolitical events; changes in laws or regulations affecting our insurance, railroad, utilities and energy and finance subsidiaries; changes in federal income tax laws; and changes in general economic and market factors that affect the prices of securities or the industries in which we do business.

Reference is made to Berkshire’s most recently issued Annual Report and in particular the “Market Risk Disclosures” included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” As of ~~September~~June 30, ~~2021,~~2022, there were no material changes in the market risks described in Berkshire’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

As of the end of the period covered by this Quarterly Report on Form 10-Q, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Chairman (Chief Executive Officer) and the Senior Vice President (Chief Financial Officer), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, the Chairman (Chief Executive Officer) and the Senior Vice President (Chief Financial Officer) concluded that the Company’s disclosure controls and procedures are effective in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company’s periodic SEC filings. During the quarter, there have been no significant changes in the Company’s internal control over financial reporting or in other factors that could significantly affect internal control over financial reporting.

Berkshire and its subsidiaries are parties in a variety of legal actions that routinely arise out of the normal course of business, including legal actions seeking to establish liability directly through insurance contracts or indirectly through reinsurance contracts issued by Berkshire subsidiaries. Plaintiffs occasionally seek punitive or exemplary damages. We do not believe that such normal and routine litigation will have a material effect on our consolidated financial condition or results of operations. Berkshire and certain of its subsidiaries are also involved in other kinds of legal actions, some of which assert or may assert claims or seek to impose fines and penalties. We believe that any liability that may arise as a result of other pending legal actions will not have a material effect on our consolidated financial condition or results of operations.

Our significant business risks are described in Item 1A to Form 10-K for the year ended December 31, ~~2020,~~2021, to which reference is made herein. The risks and uncertainties we describe are not the only ones facing us. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business or operations. Any adverse effect on our business, financial condition or operating results could result in a decline in the value of our securities and the loss of all or part of your investment.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds and Issuer Repurchases of Equity Securities

Period	Total number of shares purchased		Average price paid per share		Total number of shares purchased as part of publicly announced program		Maximum number or value of shares that yet may be repurchased under the program	Total number of shares purchased		Average price paid per share		Total number of shares purchased as part of publicly announced program		Maximum number or value of shares that yet may be repurchased under the program
July
April
Class A common stock		938	$	420,100.50		938	*		—	$	—		—	*
Class B common stock		6,387,847	$	278.13		6,387,847	*		—	$	—		—	*

August
May
Class A common stock		868	$	430,704.66		868	*		—	$	—		—	*
Class B common stock		6,535,695	$	285.41		6,535,695	*		—	$	—		—	*

September
June
Class A common stock		1,323	$	419,236.93		1,323	*		2,397	$	425,870.54		2,397	*
Class B common stock		9,580,995	$	277.74		9,580,995	*		25,462	$	276.75		25,462	*

Information regarding the Company’s mine safety violations and other legal matters disclosed in accordance with Section 1503(a) of the Dodd-Frank Reform Act is included in Exhibit 95 to this Form 10-Q.

Pursuant to the requirement of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.


Delaware	47-0813844
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

Class A —	~~619,938~~599,924
Class B —	~~1,303,476,707~~1,301,126,370

		Page No.

Part I – Financial Information

Item 1. Financial Statements
	Consolidated Balance Sheets—~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021	2-3
	Consolidated Statements of Earnings—~~Third~~Second Quarter and First ~~Nine~~Six Months ~~2021~~2022 and ~~2020~~2021	4
	Consolidated Statements of Comprehensive Income—~~Third~~Second Quarter and First ~~Nine~~Six Months ~~2021~~2022 and ~~2020~~2021	5
	Consolidated Statements of Changes in Shareholders’ Equity—~~Third~~Second Quarter and First ~~Nine~~Six Months ~~2021~~2022 and ~~2020~~2021	65
	Consolidated Statements of Cash Flows—First ~~Nine~~Six Months ~~2021~~2022 and ~~2020~~2021	76
	Notes to Consolidated Financial Statements	~~8-24~~7-23
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	~~25-45~~24-43
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4543
Item 4.	Controls and Procedures	4543

Part II – Other Information

Item 1.	Legal Proceedings	4543
Item 1A.	Risk Factors	4543
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds and Issuer Repurchases of Equity Securities	4644
Item 3.	Defaults Upon Senior Securities	4644
Item 4.	Mine Safety Disclosures	4644
Item 5.	Other Information	4644
Item 6.	Exhibits	4745

Signature		4745

	Class A, $5 Par Value (1,650,000 shares authorized)									Class B, $0.0033 Par Value (3,225,000,000 shares authorized)
	Issued			Treasury			Outstanding			Issued		Treasury			Outstanding
Balances at December 31, 2020		678,523			(34,592	)		643,931			1,469,359,852		(119,316,381	)		1,350,043,471
Conversions of Class A to Class B common stock		(11,849	)		—			(11,849	)		17,773,500		—			17,773,500
Treasury stock acquired		—			(11,285	)		(11,285	)		—		(59,366,771	)		(59,366,771	)
Balances at September 30, 2021		666,674			(45,877	)		620,797			1,487,133,352		(178,683,152	)		1,308,450,200

	Class A, $5 Par Value (1,650,000 shares authorized)									Class B, $0.0033 Par Value (3,225,000,000 shares authorized)
	Issued			Treasury			Outstanding			Issued		Treasury			Outstanding
Balances at December 31, 2021		665,901			(48,788	)		617,113			1,488,292,852		(197,818,349	)		1,290,474,503
Conversions of Class A common stock to Class B common stock		(11,544	)		—			(11,544	)		17,316,000		—			17,316,000
Treasury stock acquired		—			(4,402	)		(4,402	)		—		(6,850,133	)		(6,850,133	)
Balances at June 30, 2022		654,357			(53,190	)		601,167			1,505,608,852		(204,668,482	)		1,300,940,370


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

	September 30, 2021		December 31, 2020
Balance sheet liabilities - at fair value	$	286	$	1,065
Notional value		8,251		10,991
Intrinsic value		83		727
Weighted average remaining life (in years)		0.6		1.2


	a. Exhibits

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

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

31.1	Rule 13a-14(a)/15d-14(a) Certifications

31.2	Rule 13a-14(a)/15d-14(a) Certifications

32.1	Section 1350 Certifications

32.2	Section 1350 Certifications

95	Mine Safety Disclosures

101	The following financial information from Berkshire Hathaway Inc.’s Quarterly Report on Form 10-Q for the quarter ended ~~September~~June 30, ~~2021,~~2022, formatted in iXBRL (Inline Extensible Business Reporting Language) includes: (i) the Cover Page (ii) the Consolidated Balance Sheets, (iii) the Consolidated Statements of Earnings, (iv) the Consolidated Statements of Comprehensive Income, (v) the Consolidated Statements of Changes in Shareholders’ Equity, (vi) the Consolidated Statements of Cash Flows, and (vii) the Notes to Consolidated Financial Statements, tagged in summary and detail.

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

		BERKSHIRE HATHAWAY INC.
		(Registrant)

Date: ~~November~~August 6, ~~2021~~2022		/S/ MARC D. HAMBURG
		(Signature)
		Marc D. Hamburg,
		Senior Vice President and
		Principal Financial Officer