(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 ~~July 26, 2022:~~April 25, 2023:

Second Quarter

First Six Months

2022

2021

2022

2021

Revenues:

Insurance and Other:

Insurance premiums earned
$
18,087

$
17,163

$
35,579

$
33,587

Sales and service revenues

40,220

36,743

78,082

70,441

Leasing revenues

1,887

1,447

3,559

2,771

Interest, dividend and other investment income

2,861

1,898

4,723

3,749

63,055

57,251

121,943

110,548

Railroad, Utilities and Energy:

Freight rail transportation revenues

6,612

5,778

12,556

11,156

Energy operating revenues

4,935

4,302

9,753

9,150

Service revenues and other income

1,578

1,783

2,738

2,859

13,125

11,863

25,047

23,165

Total revenues

76,180

69,114

146,990

133,713

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

13,620

12,175

26,952

23,139

Life, annuity and health insurance benefits

1,282

1,459

2,605

2,939

Insurance underwriting expenses

2,461

3,065

5,228

6,079

Cost of sales and services

31,633

28,761

61,418

55,291

Cost of leasing

1,498

982

2,730

1,864

Selling, general and administrative expenses

3,762

5,045

8,013

8,955

Interest expense

302

298

566

574

54,558

51,785

107,512

98,841

Railroad, Utilities and Energy:

Freight rail transportation expenses

4,260

3,588

8,185

7,098

Utilities and energy cost of sales and other expenses

3,844

3,220

7,435

6,809

Other expenses

1,527

1,563

2,683

2,656

Interest expense

785

778

1,555

1,552

10,416

9,149

19,858

18,115

Total costs and expenses

64,974

60,934

127,370

116,956

Earnings (loss) before income taxes and equity method earnings

(55,713
)

35,574

(49,277
)

49,851

Equity method earnings

231

147

607

398

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

379

331

504

460

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

1,470,577

1,519,576

1,472,628

1,526,392

Average equivalent Class B shares outstanding

2,205,865,262

2,279,363,382

2,208,942,539

2,289,587,640

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

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

Net earnings

—

—

11,711

—

129

11,840

Other comprehensive income, net

—

(327
)

—

—

7

(320
)
Acquisition of common stock

—

—

—

(6,565
)

—

(6,565
)
Transactions with noncontrolling interests

4

—

—

—

(119
)

(115
)
Balance at March 31, 2021

$
35,638

$
(4,570
)

$
456,337

$
(39,418
)

$
8,189

$
456,176

Net earnings

—

—

28,094

—

331

28,425

Other comprehensive income, net

—

351

—

—

7

358

Acquisition of common stock

—

—

—

(6,028
)

—

(6,028
)
Transactions with noncontrolling interests

5

—

—

—

(136
)

(131
)
Balance at June 30, 2021

$
35,643

$
(4,219
)

$
484,431

$
(45,446
)

$
8,391

$
478,800


	First Six Months						First Quarter
	2022			2021			2023			2022
Cash flows from operating activities:
Net earnings (loss)	$	(37,791	)	$	40,265
Adjustments to reconcile net earnings (loss) to operating cash flows:
Net earnings							$	35,757		$	5,705
Adjustments to reconcile net earnings to operating cash flows:
Investment (gains) losses		68,589			(32,384	)		(34,758	)		1,735
Depreciation and amortization		5,413			5,345			3,051			2,703
Other		(2,586	)		33			(1,293	)		(960	)
Changes in operating assets and liabilities:
Unpaid losses and loss adjustment expenses		1,505			2,357			22			558
Deferred charges - retroactive reinsurance		426			473			172			215
Unearned premiums		2,384			2,375			1,686			1,912
Receivables and originated loans		(6,372	)		(4,825	)		(922	)		(3,536	)
Inventories								(15	)		(1,842	)
Other assets		(4,686	)		(909	)		(987	)		(328	)
Other liabilities		1,467			(664	)		(2,649	)		(165	)
Income taxes		(12,988	)		7,493			8,629			829
Net cash flows from operating activities		15,361			19,559			8,693			6,826
Cash flows from investing activities:
Purchases of equity securities		(57,269	)		(3,589	)		(2,873	)		(51,119	)
Sales of equity securities		12,044			8,596			13,283			9,724
Purchases of U.S. Treasury Bills and fixed maturity securities		(100,355	)		(99,731	)		(45,515	)		(58,746	)
Sales of U.S. Treasury Bills and fixed maturity securities		54,637			10,814			12,982			37,795
Redemptions and maturities of U.S. Treasury Bills and fixed maturity securities		23,681			77,541			25,364			6,571
Purchases of loans and finance receivables		(22	)		(56	)
Collections of loans and finance receivables		130			218
Acquisitions of businesses, net of cash acquired		(103	)		(104	)		(7,629	)		(34	)
Purchases of property, plant and equipment and equipment held for lease		(6,833	)		(5,663	)		(3,713	)		(3,090	)
Other		(83	)		541			182			333
Net cash flows from investing activities		(74,173	)		(11,433	)		(7,919	)		(58,566	)
Cash flows from financing activities:
Proceeds from borrowings of insurance and other businesses		6,972			2,949			—			6,977
Repayments of borrowings of insurance and other businesses		(1,440	)		(2,481	)		(4,946	)		(614	)
Proceeds from borrowings of railroad, utilities and energy businesses		3,189			1,464			—			405
Repayments of borrowings of railroad, utilities and energy businesses		(1,374	)		(2,546	)		(1,244	)		(395	)
Changes in short term borrowings, net		(85	)		(65	)		1,098			(183	)
Acquisition of treasury stock		(4,191	)		(12,560	)		(4,450	)		(3,180	)
Other		(1,464	)		(339	)
Other, principally transactions with noncontrolling interests								(380	)		(367	)
Net cash flows from financing activities		1,607			(13,578	)		(9,922	)		2,643
Effects of foreign currency exchange rate changes		(277	)		(112	)		47			53
Increase (decrease) in cash and cash equivalents and restricted cash		(57,482	)		(5,564	)		(9,101	)		(49,044	)
Cash and cash equivalents and restricted cash at beginning of year*		88,706			48,396			36,399			88,706
Cash and cash equivalents and restricted cash at end of second quarter*	$	31,224		$	42,832
Cash and cash equivalents and restricted cash at end of first quarter*							$	27,298		$	39,662
*Cash and cash equivalents and restricted cash are comprised of:
Beginning of year—
Insurance and Other	$	85,319		$	44,714		$	32,260		$	85,319
Railroad, Utilities and Energy		2,865			3,276			3,551			2,865
Restricted cash included in other assets		522			406			588			522
	$	88,706		$	48,396		$	36,399		$	88,706
End of second quarter—
End of first quarter—
Insurance and Other	$	26,534		$	38,924		$	23,805		$	35,542
Railroad, Utilities and Energy		4,074			3,374			2,942			3,571
Restricted cash included in other assets		616			534			551			549
	$	31,224		$	42,832		$	27,298		$	39,662

Note 1. General

The accompanying unaudited Consolidated Financial Statements include the accounts of Berkshire Hathaway Inc. (“Berkshire” or “Company”) consolidated with the accounts of all its subsidiaries and 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, the magnitude of gains and losses from the periodic revaluation of certain assets and liabilities denominated in foreign currencies and ~~the magnitude of~~ asset impairment charges may cause significant variations in periodic net earnings.

To varying degrees, the consequences of the COVID-19 pandemic ~~continues~~continue to affect our operating businesses. Significant government and private sector actions have been taken since 2020 to control the spread and mitigate the economic effects of the ~~virus. Actions in the latter part of 2021~~virus and during 2022 included temporary business closures or restrictions of business activities in various parts of the world in response to the emergence of variants of the virus. Notwithstanding these efforts, significant disruptions of supply chains and higher costs have persisted in 2022. Further, theits variants. The development of geopolitical conflicts, supply chain disruptions and government actions to slow inflation in ~~2022~~recent years have ~~contributed to disruptions of supply chains, resulting in cost increases for commodities, goods and services in many parts of the world.~~produced varying effects on our operating businesses. The economic effects from these events over longer terms cannot be reasonably estimated at this time. 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.

Note 2. New accounting pronouncements

~~In August 2018, the Financial Accounting Standards Board issued~~We adopted Accounting Standards Update 2018-12 “Targeted Improvements to the Accounting for ~~Long-Duration~~Long Duration Contracts” (“ASU 2018-12”). as of January 1, 2023, which modifies the accounting, reporting and disclosures related to long duration insurance contracts and most significantly the measurement of our long duration life, annuity and health benefit liabilities. ASU 2018-12 ~~requires reassessment~~was applied retrospectively to contracts in-force beginning as of ~~cash flow assumptions at least annually~~January 1, 2021 (the “transition date”). The Consolidated Financial Statements for 2022 and ~~revision of discount rate assumptions each reporting period in valuing policyholder liabilities of long-duration contracts. Under ASU 2018-12,~~2021 were revised to reflect the effects ~~from~~of the adoption of ASU 2018-12. As of the transition date, the after-tax impact of changes in cash flow assumptions ~~are reflected~~were recorded in retained earnings and the after-tax effect of changes in discount rates assumptions were recorded in accumulated other comprehensive income. The effects of the adoption of ASU 2018-12 on our Consolidated Financial Statements as of January 1, 2021 and for the years ending December 31, 2022 and 2021 are included in Part II, Item 5 of this Report.

Beginning as of January 1, 2021, the cash flow assumptions used in measuring benefit liabilities are reviewed at least annually, with the effects of assumption changes recorded in earnings. Further, the discount rate assumptions used in measuring benefit liabilities are revised each quarterly reporting period based on the prevailing observable upper-medium grade (generally considered to be single A-rated credit ratings) corporate bond yields that reflect the duration characteristics and currency attributes of the liabilities, using interpolation for durations between the observable yields. Changes to benefits liabilities arising from changes in discount rate assumptions are ~~reflected~~recorded in other comprehensive income. ~~Currently, the cash flow~~In measuring benefit liabilities and ~~discount rate assumptions are set at the contract inception date and not subsequently changed, except~~amortizing capitalized acquisition costs under ~~limited circumstances.~~long duration insurance contracts, we generally aggregate contracts by issuance year. ASU 2018-12 ~~is to be applied retrospectively to the earliest period presented in the financial statements, will require new~~also requires certain disclosures ~~and is effective~~ for ~~fiscal years beginning after December 15, 2022, with early adoption permitted.~~long duration insurance liabilities. See Note 16.

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 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.7

Notes to Consolidated Financial Statements (Continued)

Note 2. New accounting pronouncements (Continued)

The effects from adopting ASU 2018-12 on affected line items from our Consolidated Statement of Earnings and Comprehensive Income for the quarter ended March 31, 2022 follows in millions, except per share amounts.


	First Quarter 2022
	Previously reported			Increase (decrease)			As revised
Revenues:
Insurance premiums earned	$	17,492		$	(4	)	$	17,488
Costs and expenses:
Life, annuity and health insurance benefits		1,323			14			1,337
Insurance underwriting expenses		2,767			(163	)		2,604
Earnings before income taxes		6,812			145			6,957
Income tax expense		1,227			25			1,252
Net earnings		5,585			120			5,705
Net earnings attributable to Berkshire Hathaway shareholders	$	5,460		$	120		$	5,580
Other comprehensive income:
Foreign currency translation		(316	)		1			(315	)
Long duration insurance contracts		—			2,419			2,419
Other comprehensive income, net		(404	)		2,420			2,016
Comprehensive income attributable to Berkshire Hathaway shareholders	$	5,059		$	2,540		$	7,599
Net earnings per average equivalent Class A share	$	3,702		$	82		$	3,784
Net earnings per average equivalent Class B share	$	2.47		$	0.05		$	2.52

Note 3.4. Investments in fixed maturity securities

Investments in fixed maturity securities as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 are summarized by type below (in millions).

	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
June 30, 2022
										Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
March 31, 2023
U.S. Treasury, U.S. government corporations and agencies	$	8,893	$	7	$	(159	)	$	8,741	$	9,588	$	8	$	(191	)	$	9,405
Foreign governments		10,935		14		(122	)		10,827		11,184		48		(144	)		11,088
Corporate bonds		993		257		(3	)		1,247		1,532		263		(4	)		1,791
Other		293		30		(2	)		321		261		24		(3	)		282
	$	21,114	$	308	$	(286	)	$	21,136	$	22,565	$	343	$	(342	)	$	22,566
December 31, 2021
December 31, 2022
U.S. Treasury, U.S. government corporations and agencies	$	3,286	$	22	$	(5	)	$	3,303	$	10,039	$	12	$	(249	)	$	9,802
Foreign governments		10,998		29		(33	)		10,994		10,454		50		(177	)		10,327
Corporate bonds		1,363		412		(1	)		1,774		1,945		256		(6	)		2,195
Other		317		47		(1	)		363		2,735		77		(8	)		2,804
	$	15,964	$	510	$	(40	)	$	16,434	$	25,173	$	395	$	(440	)	$	25,128

~~Investments~~The fair value of investments in ~~foreign governments include~~U.S. Treasury securities ~~issued by national~~as of March 31, 2023 included approximately $8.8 billion of securities that mature in 2023 and ~~provincial government entities as well as instruments that are unconditionally guaranteed by such entities.~~2024. As of ~~June 30, 2022,~~March 31, 2023, approximately ~~94%~~93% 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 at ~~June 30, 2022~~March 31, 2023 are summarized below by contractual maturity dates. Amounts are in millions. Actual maturities may differ from contractual maturities due to prepayment rights held by issuers.

Due in 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

$
10,305

$
10,057

$
460

$
84

$
208

$
21,114

Fair value

10,220

9,888

702

92

234

21,136


	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	$	14,038	$	7,426	$	780	$	139	$	182	$	22,565
Fair value		13,832		7,370		1,016		149		199		22,566

Note 4.5. Investments in equity securities

Investments in equity securities as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 are summarized as follows (in millions).


	Cost Basis		Net Unrealized Gains		Fair Value
March 31, 2023*
Banks, insurance and finance	$	24,023	$	41,292	$	65,315
Consumer products		40,003		144,506		184,509
Commercial, industrial and other		57,316		21,021		78,337
	$	121,342	$	206,819	$	328,161

——————

* Approximately 77% of the aggregate fair value was concentrated in five companies (American Express Company – $25.0 billion; Apple Inc. – $151.0 billion; Bank of America Corporation – $29.5 billion; The Coca-Cola Company – $24.8 billion and Chevron Corporation – $21.6 billion).


	Cost Basis		Net Unrealized Gains		Fair Value
December 31, 2022*
Banks, insurance and finance	$	25,893	$	43,663	$	69,556
Consumer products		40,508		112,384		152,892
Commercial, industrial and other		65,209		21,136		86,345
	$	131,610	$	177,183	$	308,793

——————

* Approximately 75% of the aggregate fair value was concentrated in five companies (American Express Company – $22.4 billion; Apple Inc. – $119.0 billion; Bank of America Corporation – $34.2 billion; The Coca-Cola Company – $25.4 billion and Chevron Corporation – $30.0 billion).

Cost Basis

Net Unrealized Gains

Fair Value

June 30, 2022*

Banks, insurance and finance

$
36,837

$
39,655

$
76,492

Consumer products

41,785

118,294

160,079

Commercial, industrial and other

71,100

19,991

91,091

$
149,722

$
177,940

$
327,662

*	Approximately 69% of the aggregate fair value was concentrated in5 companies (American Express Company – $21.0 billion; Apple Inc. – $125.1 billion; Bank of America Corporation – $32.2 billion; The Coca-Cola Company – $25.2 billion and Chevron Corporation – $23.7 billion).

Cost Basis

Net Unrealized Gains

Fair Value

December 31, 2021*

Banks, insurance and finance

$
26,822

$
62,236

$
89,058

Consumer products

36,076

154,945

191,021

Commercial, industrial and other

41,707

28,933

70,640

$
104,605

$
246,114

$
350,719

*	Approximately 73% of the aggregate fair value was concentrated in 4 companies (American Express Company – $24.8 billion; Apple Inc. – $161.2 billion; Bank of America Corporation – $46.0 billion and The Coca-Cola Company – $23.7 billion).

Notes to Consolidated Financial Statements (Continued)

Note 4.5. Investments in equity securities (Continued)

During 2022, we began to acquire common stock of Occidental Petroleum Corporation (“Occidental”). Our aggregate voting interest in Occidental exceeded 20% on August 4, 2022 and we adopted the equity method as of that date. See Note 6. We report our investments in Occidental Cumulative Perpetual Preferred Stock and Occidental common stock warrants at fair value as equity securities, as such interests are not in-substance common stock under GAAP and are not eligible for the equity method.

As of ~~June 30, 2022,~~March 31, 2023, our investment in Occidental preferred stock had an aggregate liquidation value of approximately $9.5 billion. During March of 2023, Occidental issued mandatory redemption notifications at a price of 110% of the liquidation value, plus accrued and unpaid dividends for $474 million of preferred stock liquidation value due to excess distributions by Occidental to its common stockholders, as defined under the agreement. 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. Our investment in Occidental warrants allows us to purchase up to 83.86 million shares of Occidental common stock at an exercise price of $59.62 per share. The warrants are exercisable in whole or in part until one year after the redemption of the preferred stock.

As of March 31, 2023, we owned 151.6 million shares of American Express Company (“American Express”) common stock representing ~~20.2%~~20.4% 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~~Directors. We have also agreed to passivity commitments toas requested by the Board of Governors of the Federal Reserve System, which collectively, in our judgment, restrict our ability to exercise significant influence over the operating and financial policies of American Express. Accordingly, we ~~have~~do not ~~applied~~use the equity method ~~of accounting~~ with respect to our investment in American Express common stock and we 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 and 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.

Note 6.7. Investment and derivative contract ~~gains/losses~~gains (losses)

Investment and derivative contract ~~gains/losses~~gains (losses) in the ~~second~~first quarter of 2023 and ~~first six months of~~ 2022 ~~and 2021~~ are summarized as follows (in millions).


	Second Quarter						First Six Months						First Quarter
	2022			2021			2022			2021			2023			2022
Investment gains (losses):
Equity securities:
Change in unrealized investment gains (losses) during the period on securities held at the end of the period	$	(66,860	)	$	27,014		$	(68,548	)	$	31,548		$	31,317		$	(1,775	)
Investment gains on securities sold during the period		32			144			34			670			370			89
		(66,828	)		27,158			(68,514	)		32,218			31,687			(1,686	)
Fixed maturity securities:
Gross realized gains		6			15			12			35			124			6
Gross realized losses		(27	)		(12	)		(76	)		(13	)		(52	)		(49	)
Other		(5	)		12			(11	)		144			2,999			(6	)
Investment gains (losses)		(66,854	)		27,173			(68,589	)		32,384			34,758			(1,735	)
Derivative contract gains (losses)		(65	)		221			(308	)		710			—			(243	)
	$	(66,919	)	$	27,394		$	(68,897	)	$	33,094		$	34,758		$	(1,978	)

Notes to Consolidated Financial Statements (Continued)

Note 7. Investment and derivative contract gains (losses) (Continued)

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~~$13.3 billion in the first ~~six months~~quarter of ~~2022~~2023 and ~~$8.6~~$9.7 billion in the first ~~six months~~quarter of ~~2021.~~2022. 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. Taxable ~~gains/~~gains and losses on equity securities sold are generally the difference between the proceeds from sales and original cost. Equity securities sold produced taxable gains of ~~$76 million in the 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~~$2.2 billion in the first ~~six months~~quarter of ~~2021.~~2023 compared to taxable losses of $739 million in 2022.

~~Our derivative contract~~Other investment gains ~~and~~in the first quarter of 2023 included approximately $3 billion from the remeasurement of our pre-existing 38.6% interest in Pilot through the application of acquisition accounting under GAAP. See Note 3. As of March 31, 2023, our exposure to losses ~~derive from~~in the future under our two outstanding equity index put option contracts written prior to March 2008 on four major equity indexes. As of June 30, 2022, we had six open contracts, which had an aggregate fair value liability of $186 million and an aggregate notional value of $2.5 billion.

~~Notes to Consolidated Financial Statements~~ is insignificant.~~(Continued)~~

Note 8.9. Other receivables

Other receivables are comprised of the following (in millions).

June 30,
2022

December 31,
2021

Insurance and other:

Insurance premiums receivable
$
17,391

$
15,050

Reinsurance recoverables

4,836

4,900

Trade receivables

14,511

12,971

Other

3,648

3,146

Allowances for credit losses

(708
)

(679
)

$
39,678

$
35,388

Railroad, utilities and energy:

Trade receivables
$
4,167

$
3,678

Other

789

650

Allowances for credit losses

(141
)

(151
)

$
4,815

$
4,177

~~Notes~~ Receivables of the railroad, utilities and energy businesses at March 31, 2023 included approximately $2.1 billion related to ~~Consolidated Financial Statements~~ Pilot.~~(Continued)~~

~~Note 8. Other receivables~~ ~~(Continued)~~


	March 31, 2023			December 31, 2022
Insurance and other:
Insurance premiums receivable	$	19,212		$	18,395
Reinsurance recoverables		7,191			7,106
Trade receivables		15,069			14,510
Other		4,871			4,154
Allowances for credit losses		(669	)		(675	)
	$	45,674		$	43,490
Railroad, utilities and energy:
Trade receivables	$	5,855		$	4,182
Other		1,112			754
Allowances for credit losses		(153	)		(141	)
	$	6,814		$	4,795

Provisions for credit losses in the first ~~six months~~quarter with respect to receivables summarized above were ~~$211~~$151 million in ~~2022~~2023 and ~~$209~~$92 million in ~~2021.~~2022. Charge-offs, net of recoveries, in the first ~~six months~~quarter were ~~$189~~$149 million in ~~2022~~2023 and ~~$171~~$95 million in ~~2021.~~2022.

Note 9.10. Inventories

Inventories of our insurance and other businesses are comprised of the following (in millions).


	March 31, 2023		December 31, 2022
Raw materials	$	6,484	$	6,381
Work in process and other		3,365		3,464
Finished manufactured goods		5,955		5,739
Goods acquired for resale		9,695		9,782
	$	25,499	$	25,366

Inventories of our railroad, utilities and energy businesses are included in other assets and were approximately $4.4 billion at March 31, 2023, of which approximately $2.2 billion was attributable to Pilot.

June 30,
2022

December 31,
2021

Raw materials
$
6,558

$
5,743

Work in process and other

3,750

3,192

Finished manufactured goods

5,396

4,530

Goods acquired for resale

8,856

7,489

$
24,560

$
20,954

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


	June 30, 2022			December 31, 2021			March 31, 2023			December 31, 2022
Land, buildings and improvements	$	14,055		$	14,070		$	14,533		$	14,761
Machinery and equipment		26,082			26,063			27,190			26,690
Furniture, fixtures and other		4,872			4,640			5,193			4,847
		45,009			44,773			46,916			46,298
Accumulated depreciation		(24,492	)		(23,939	)		(25,708	)		(25,185	)
	$	20,517		$	20,834		$	21,208		$	21,113

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. Assets of Pilot are included in land, buildings, improvements and other within the utilities and energy section of the following table.


	March 31, 2023			December 31, 2022
Railroad:
Land, track structure and other roadway	$	67,861		$	67,350
Locomotives, freight cars and other equipment		16,003			16,031
Construction in progress		1,773			1,743
		85,637			85,124
Accumulated depreciation		(18,334	)		(17,899	)
		67,303			67,225
Utilities and energy:
Utility generation, transmission and distribution systems		93,123			92,759
Interstate natural gas pipeline assets		18,492			18,328
Independent power plants and other assets		14,610			14,650
Land, buildings, improvements and other		8,205			—
Construction in progress		6,246			5,357
		140,676			131,094
Accumulated depreciation		(39,006	)		(38,051	)
		101,670			93,043
	$	168,973		$	160,268

June 30,
2022

December 31,
2021

Railroad:

Land, track structure and other roadway

$
65,821

$
65,843

Locomotives, freight cars and other equipment

15,957

13,822

Construction in progress

1,186

1,027

82,964

80,692

Accumulated depreciation

(16,988
)

(14,978
)

65,976

65,714

Utilities and energy:

Utility generation, transmission and distribution systems

90,810

90,223

Interstate natural gas pipeline assets

17,547

17,423

Independent power plants and other assets

14,488

13,695

Construction in progress

4,774

4,196

127,619

125,537

Accumulated depreciation

(36,824
)

(35,721
)

90,795

89,816

$
156,771

$
155,530

Depreciation expense for the first ~~six~~three months of ~~2022~~2023 and ~~2021~~2022 is summarized below (in millions).

Second Quarter

First Six Months

2022

2021

2022

2021

Fixed lease revenue
$
1,264

$
1,105

$
2,452

$
2,167

Variable lease revenue

623

342

1,107
��

604

$
1,887

$
1,447

$
3,559

$
2,771

Reconciliations of the changes in the carrying value of goodwill for the first ~~six~~three months of ~~2022~~2023 and for the year ended December 31, ~~2021~~2022 follow (in millions).


	March 31, 2023			December 31, 2022
Balance at beginning of year	$	78,119		$	73,875
Business acquisitions		6,112			4,657
Other, including foreign currency translation		(729	)		(413	)
Balance at end of period*	$	83,502		$	78,119

——————

* Net of accumulated goodwill impairments of $11.0 billion as of March 31, 2023 and December 31, 2022.

June 30,
2022

December 31,
2021

Balance at beginning of year

$
73,875

$
73,734

Business acquisitions

35

353

Other, including foreign currency translation

(292
)

(212
)
Balance at end of period*

$
73,618

$
73,875

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

Other intangible assets of the railroad, utilities and energy businesses are included in other ~~intangible~~assets. The net carrying value of such assets at March 31, 2023 included $7.4 ~~(Continued)~~

billion related to Pilot. Intangible asset amortization expense in the first ~~six months~~quarter was ~~$602~~$429 million in ~~2022~~2023 and ~~$637~~$303 million in ~~2021.~~2022. Intangible assets with indefinite lives were ~~$18.4~~$20.9 billion as of ~~June 30, 2022~~March 31, 2023 and ~~$18.5~~$18.3 billion as of December 31, ~~2021~~2022 and primarily related to certain customer relationships and trademarks and trade names.

Note ~~13.~~14. Unpaid losses and loss adjustment expenses

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)~~15), for each of the ~~six-month~~three-month periods ending ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~ follows (in millions).


	2023			2022
Balances at beginning of year:
Gross liabilities	$	107,472		$	86,664
Reinsurance recoverable on unpaid losses		(5,025	)		(2,960	)
Net liabilities		102,447			83,704
Incurred losses and loss adjustment expenses:
Current accident year		14,776			13,375
Prior accident years		(740	)		(251	)
Total		14,036			13,124
Paid losses and loss adjustment expenses:
Current accident year		(3,841	)		(3,908	)
Prior accident years		(9,747	)		(8,091	)
Total		(13,588	)		(11,999	)
Foreign currency effect		93			(106	)
Balances at March 31:
Net liabilities		102,988			84,723
Reinsurance recoverable on unpaid losses		4,969			2,944
Gross liabilities	$	107,957		$	87,667

2022

2021

Balances at beginning of year:

Gross liabilities
$
86,664

$
79,854

Reinsurance recoverable on unpaid losses

(2,960
)

(2,912
)
Net liabilities

83,704

76,942

Incurred losses and loss adjustment expenses:

Current accident year

27,427

23,651

Prior accident years

(887
)

(1,064
)
Total

26,540

22,587

Paid losses and loss adjustment expenses:

Current accident year

(10,085
)

(8,406
)
Prior accident years

(13,820
)

(11,169
)
Total

(23,905
)

(19,575
)
Foreign currency effect

(568
)

31

Balances at June 30:

Net liabilities

85,771

79,985

Reinsurance recoverable on unpaid losses

2,789

2,973

Gross liabilities
$
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”). Incurred and paid losses and loss adjustment expenses are net of reinsurance recoveries.

In the first ~~six months,~~quarter, we recorded net reductions of estimated ultimate liabilities for prior accident years of ~~$887~~$740 million in ~~2022~~2023 and ~~$1.1 billion~~$251 million in ~~2021,~~2022, which produced corresponding reductions in incurred losses and loss adjustment expenses in those periods. These reductions, as percentages of the net liabilities at the beginning of each year, were ~~1.1%~~0.7% in ~~2022~~2023 and ~~1.4%~~0.3% in ~~2021.~~2022.

~~Estimated~~We reduced estimated ultimate liabilities for prior accident years ~~from~~of primary insurance businesses in the first ~~six months were reduced~~quarter by ~~$313~~$379 million in ~~2022~~2023 and ~~$1.1 billion~~$114 million in ~~2021. The~~2022. In 2023, the reductions ~~in each period derived primarily from~~were driven by private passenger ~~automobile,~~auto claims, whereas the decreases in 2022 were primarily attributable to private passenger auto, medical professional liability and workers’ compensation claims, ~~and in 2022 were~~ partly offset by increases ~~in ultimate liabilities for~~with respect to other casualty claims. ~~Estimated~~In the first quarter, estimated ultimate liabilities for prior accident years ~~attributable to~~of property and casualty reinsurance ~~in the first six months decreased $574~~businesses were reduced $361 million in ~~2022~~2023 and ~~increased $35~~$137 million in ~~2021.~~ 2022.

Notes to Consolidated Financial Statements (Continued)

Note ~~14.~~15. Retroactive reinsurance contracts

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, 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~~incurred losses and loss adjustment expenses to the amounts recorded in the Consolidated Statements of Earnings for each of the ~~six-month~~three-month periods ~~ending June 30,~~ended March 31, 2023 and 2022 ~~and 2021~~ follow (in millions).

	2022						2021
	Unpaid losses and loss adjustment expenses			Deferred charges - retroactive reinsurance			Unpaid losses and loss adjustment expenses			Deferred charges - retroactive reinsurance			2023			2022
Balances at beginning of year	$	38,256		$	(10,639	)	$	40,966		$	(12,441	)	$	35,415		$	37,855
Incurred losses and loss adjustment expenses:
Current year contracts		—			—			82			—			—			—
Prior years’ contracts		(14	)		426			(3	)		473			14			(7	)
Total		(14	)		426			79			473			14			(7	)
Paid losses and loss adjustment expenses		(1,008	)		—			(808	)		—			(372	)		(547	)
Balances at June 30	$	37,234		$	(10,213	)	$	40,237		$	(11,968	)
Incurred losses and loss adjustment expenses, net of deferred charges	$	412					$	552
Foreign currency effect														6			(5	)
Balances at March 31													$	35,063		$	37,296
Incurred losses and loss adjustment expenses above													$	14		$	(7	)
Deferred charge amortization and adjustments														171			215
Incurred losses and loss adjustment expenses included in the Consolidated Statements of Earnings													$	185		$	208

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 began. Incurred losses and loss adjustment expenses in the ~~first six months for prior years’ contracts were $412 million in 2022 and $470 million in 2021 and included recurring amortization~~Consolidated Statements of ~~deferred charges and the effect of~~Earnings include changes in estimated liabilities and related deferred charge asset amortization and adjustments arising from the changes in estimated timing and amount of ~~expected~~ future loss payments. Currently, our largest retroactive reinsurance contract is between our subsidiary, National Indemnity Company, and certain subsidiaries of American International Group, Inc. (collectively, “AIG”). Our estimated claim liabilities with regard to the AIG contract were approximately $15.2 billion at June 30, 2022 and $15.8 billion at December 31, 2021. DeferredUnamortized deferred charges related to ~~the AIG contract~~retroactive reinsurance contracts were ~~$4.24~~$9.7 billion at ~~June 30, 2022~~March 31, 2023 and ~~$4.45~~$10.4 billion at March 31, 2022.

Note 16. Long duration insurance contracts

We write periodic payment annuity and life and health insurance contracts. A summary of the impacts of adopting ASU 2018-12 on our periodic payment annuity and life and health insurance benefits liabilities as of the January 1, 2021 transition date follows in millions.


	Periodic payment annuities			Life and health			Total
Balance at December 31, 2020, as previously reported	$	10,974		$	10,642		$	21,616
Reclassifications to other policyholder liabilities		(286	)		(929	)		(1,215	)
Balance at December 31, 2020 after reclassifications		10,688			9,713			20,401
Change in discount rate assumptions		6,553			1,447			8,000
Change in cash flow assumptions		(117	)		552			435
Balance as of January 1, 2021	$	17,124		$	11,712		$	28,836

The reclassifications to other policyholder liabilities are primarily related to certain liabilities arising under our variable annuity guarantee reinsurance contracts. These liabilities are not classified as life, annuity and health insurance benefits liabilities under ASU 2018-12. A summary of our life, annuity and health insurance benefits liabilities as of March 31, 2023 and 2022, disaggregated for our two primary product categories, periodic payment annuities and life and health insurance, follows (in millions). Other liabilities primarily consist of incurred-but-not-reported claims and claims in the course of settlement.


	March 31,
	2023		2022
Periodic payment annuities	$	11,174	$	13,867
Life and health		5,633		6,792
Other liabilities		3,130		3,524
	$	19,937	$	24,183

Notes to Consolidated Financial Statements (Continued)

Note 16. Long duration insurance contracts (Continued)

Reconciliations of our periodic payment annuity and life and health insurance benefits liabilities for the first three months of 2023 and 2022 follow (in millions). The information reflects the changes in discounted present values of expected future policy benefits and expected future net premiums. In this context, net premiums represent the portion of expected gross premiums that are required to provide for future policy benefits and variable expenses.


	Periodic payment annuities						Life and health
	2023			2022			2023			2022
Expected future policy benefits:
Balance at beginning of period	$	10,640		$	16,153		$	52,008		$	63,648
Balance at beginning of period at original discount rate		11,549			11,261			63,584			60,133
Impact of cash flow assumption changes		—			—			(1	)		486
Effect of actual from expected results		1			1			(519	)		90
Change in benefits, net		(116	)		43			(747	)		(517	)
Interest accrual		133			135			425			404
Foreign currency effect		19			(23	)		47			(167	)
Ending balance at original discount rate		11,586			11,417			62,789			60,429
Effect of changes in discount rate assumptions		(412	)		2,450			(12,169	)		(2,386	)
Expected future policy benefits at March 31	$	11,174		$	13,867		$	50,620		$	58,043

Expected future net premiums:
Balance at beginning of period							$	46,129		$	55,960
Balance at beginning of period at original discount rate								56,535			53,277
Impact of cash flow assumption changes								2			458
Effect of actual from expected results								(413	)		22
Change in premiums, net								(660	)		(357	)
Interest accrual								371			351
Foreign currency effect								47			(184	)
Ending balance at original discount rate								55,882			53,567
Effect of changes in discount rate assumptions								(10,895	)		(2,316	)
Expected future net premiums at March 31							$	44,987		$	51,251

Liability for future policy benefits at March 31	$	11,174		$	13,867		$	5,633		$	6,792
Reinsurance recoverables		—			—			(1,565	)		(1,857	)
Liability for future policy benefits at March 31, net of reinsurance recoverables	$	11,174		$	13,867		$	4,068		$	4,935

The undiscounted and discounted expected future gross premiums to be collected and undiscounted expected future benefits for periodic payment annuities and life and health insurance as of March 31, 2023 and 2022 are summarized below (in millions).


	Undiscounted expected future gross premiums				Discounted expected future gross premiums				Undiscounted expected future benefits
	2023		2022		2023		2022		2023		2022
Periodic payment annuities	$	—	$	—	$	—	$	—	$	31,244	$	30,647
Life and health		107,831		105,433		64,421		63,904		102,881		100,529

Gross premiums earned on long duration contracts are included in insurance premiums earned and interest expense associated with long duration insurance contracts is included as a component of life, annuity and health benefits expenses in our Consolidated Statements of Earnings. Gross premiums earned and interest expense for the first three months of 2023 and 2022 were as follows (in millions).


	Gross Premiums				Interest Expense
	2023		2022		2023		2022
Periodic payment annuities	$	—	$	169	$	133	$	135
Life and health		1,004		1,143		54		53

Notes to Consolidated Financial Statements (Continued)

Note 16. Long duration insurance contracts (Continued)

The weighted average current discount rates and interest accretion rates established at contract inception for the periodic payment annuities and life and health insurance are summarized below.


	March 31,
	2023			2022
Periodic payment annuities
Weighted average discount rate		5.0	%		3.6	%
Weighted average accretion rate		4.8	%		4.9	%
Weighted average duration (in years)	18			20
Life and health
Weighted average discount rate		4.9	%		3.4	%
Weighted average accretion rate		3.2	%		3.5	%
Weighted average duration (in years)	14			14

Deferred policy acquisition costs for our long duration insurance contracts were $748 million at March 31, 2023 and $631 million at March 31, 2022.

We also reinsure closed blocks of guaranteed minimum death and living benefits associated with variable annuity products, referred to as market risk benefits. Such liabilities are included in other policyholder liabilities and are measured at estimated fair value under ASU 2018-12. Such liabilities were approximately $1.2 billion as of March 31, 2023 and $1.25 billion as of December 31, ~~2021.~~2022. During the first quarter of 2023, we reduced liability estimates by $65 million, for the effects of changes in securities markets, interest rates and other inputs used to estimate liabilities. Cash settlements during the first quarter of 2023 were insignificant.

Note ~~15.~~17. Notes payable and other borrowings

Notes payable and other borrowings of our insurance and other businesses 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 ~~June 30, 2022.~~March 31, 2023.


	Weighted Average Interest Rate			June 30, 2022		December 31, 2021		Weighted Average Interest Rate			March 31, 2023		December 31, 2022
Insurance and other:
Berkshire Hathaway Inc. (“Berkshire”):
U.S. Dollar denominated due 2023-2047		3.3	%	$	6,225	$	6,820
Euro denominated due 2023-2041		1.0	%		7,189		7,792
Japanese Yen denominated due 2023-2060		0.6	%		6,706		6,797
U.S. Dollar denominated due 2025-2047									3.5	%	$	3,733	$	6,231
Euro denominated due 2024-2041									1.1	%		6,029		7,344
Japanese Yen denominated due 2023-2060									0.7	%		7,716		7,818
Berkshire Hathaway Finance Corporation (“BHFC”):
U.S. Dollar denominated due 2027-2052		3.6	%		14,455		10,758
Great Britain Pound denominated due 2039-2059		2.5	%		2,093		2,325
Euro denominated due 2030-2034		1.8	%		1,304		—
Other subsidiary borrowings due 2022-2045		4.1	%		4,375		4,438
U.S. Dollar denominated due 2027-2052									3.6	%		14,459		14,458
Great Britain Pound denominated due 2039-2059									2.5	%		2,122		2,078
Euro denominated due 2030-2034									1.8	%		1,349		1,332
Other subsidiary borrowings due 2023-2051									4.7	%		4,924		5,967
Subsidiary short-term borrowings		3.7	%		293		342		6.3	%		1,104		1,310
				$	42,640	$	39,272				$	41,436	$	46,538

Notes to Consolidated Financial Statements (Continued)

Note ~~15.~~17. Notes payable and other borrowings (Continued)

In ~~January 2022,~~the first quarter of 2023, Berkshire repaid ~~$600 million~~approximately $3.9 billion of maturing senior ~~notes and issued ¥128.5 billion (approximately $1.1 billion) of senior notes with maturity dates ranging from 2027 to 2052 and a weighted average interest rate of 0.5%.~~notes. Borrowings of BHFC, a wholly owned finance subsidiary of Berkshire, consist of senior unsecured notes used to fund manufactured housing loans originated or acquired and equipment held for lease of certain subsidiaries. In April 2023, Berkshire issued ¥164.4 billion (approximately $1.2 billion) of senior notes and repaid ¥56.3 billion of maturing senior notes. BHFC borrowings are fully and unconditionally guaranteed by Berkshire. InBerkshire also guarantees certain debt of other subsidiaries, aggregating approximately $2.7 billion at March ~~2022, BHFC issued $4.5 billion~~31, 2023. Generally, Berkshire’s guarantee of ~~senior notes with maturity dates ranging from 2027 to 2052 with~~ a ~~weighted average interest rate~~subsidiary’s debt obligation is an absolute, unconditional and irrevocable guarantee for the full and prompt payment when due 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 $775 million of maturing senior notes.all payment obligations.

The carrying values of Berkshire and BHFC non-U.S. Dollar denominated senior notes (€~~8.15~~6.85 billion, ~~£1.75~~£1.75 billion and ~~¥914~~¥1,029 billion par at ~~June 30, 2022)~~March 31, 2023) reflect the applicable exchange rates as of each balance sheet date. The effects of changes in foreign currency exchange rates during the period are recorded in earnings as a component of selling, general and administrative expenses. Changes in the exchange rates ~~resulted in~~produced pre-tax ~~gains~~losses of ~~$1.4 billion in the second quarter and $2.1 billion~~$26 million in the first ~~six months~~quarter of ~~2022 as compared to pre-tax losses of $45 million in the second quarter~~2023 and pre-tax gains of ~~$675~~$716 million in the first ~~six months~~quarter of ~~2021.~~2022.

~~Berkshire also guarantees debt~~Notes payable and other borrowings of ~~other subsidiaries, aggregating approximately $3.8 billion at June 30, 2022. Generally, Berkshire’s guarantee~~our railroad, utilities and energy businesses are summarized below (in millions). The weighted average interest rates and maturity date ranges are based on borrowings as 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.~~March 31, 2023.


	Weighted Average Interest Rate			June 30, 2022		December 31, 2021		Weighted Average Interest Rate			March 31, 2023		December 31, 2022
Railroad, utilities and energy:
Berkshire Hathaway Energy Company (“BHE”) and subsidiaries:
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
BHE senior unsecured debt due 2023-2053									4.4	%	$	13,597	$	13,996
Subsidiary and other debt due 2023-2064									4.3	%		37,553		37,639
Short-term borrowings		2.8	%		1,948		2,009		5.6	%		1,819		1,119
Burlington Northern Santa Fe ("BNSF") and subsidiaries due 2022-2097		4.5	%		23,376		23,219
Pilot Travel Centers (“Pilot”) and subsidiaries:
Pilot borrowings due 2023-2028									6.6	%		5,878		—
Short-term borrowings									6.2	%		594		—
Burlington Northern Santa Fe (“BNSF”) and subsidiaries due 2023-2097									4.6	%		22,747		23,452
				$	76,441	$	74,990				$	82,188	$	76,206

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, including 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 six months of 2022, BHE subsidiaries issued approximately $1.3 billion of term debt with a weighted average interest rate of 3.5% and maturity dates ranging from 2024 to 2052.

Pilot’s borrowings primarily represent syndicated loans. 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 six months of 2022, BNSF repaid $800 million of term debt.~~ As of ~~June 30, 2022,~~March 31, 2023, BNSF, Pilot, 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, Pilot or their subsidiaries.

Our subsidiaries have unused lines of credit and commercial paper capacity to support short-term borrowing programs and provide additional liquidity. Unused lines of credit were approximately ~~$10.3~~$13.1 billion at ~~June 30, 2022,~~March 31, 2023, which included approximately ~~$8.8~~$9.0 billion related to BHE and its subsidiaries.

Note ~~16.~~18. Fair value measurements

Our financial assets and liabilities are summarized below as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, 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~~or otherwise approximate the fair values.


	Carrying Value		Fair Value		Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
March 31, 2023
Investments in fixed maturity securities:
U.S. Treasury, U.S. government corporations and agencies	$	9,405	$	9,405	$	9,370	$	35	$	—
Foreign governments		11,088		11,088		10,738		350		—
Corporate bonds		1,791		1,791		—		1,109		682
Other		282		282		—		282		—
Investments in equity securities		328,161		328,161		316,550		12		11,599
Investments in Kraft Heinz & Occidental common stock		25,960		25,802		25,802		—		—
Loans and finance receivables		23,144		23,736		—		1,241		22,495
Derivative contract assets (1)		504		504		132		340		32
Derivative contract liabilities (1)		287		287		11		109		167
Notes payable and other borrowings:
Insurance and other		41,436		37,534		—		37,502		32
Railroad, utilities and energy		82,188		77,743		—		77,743		—

December 31, 2022
Investments in fixed maturity securities:
U.S. Treasury, U.S. government corporations and agencies	$	9,802	$	9,802	$	9,733	$	69	$	—
Foreign governments		10,327		10,327		9,854		473		—
Corporate bonds		2,195		2,195		—		1,546		649
Other		2,804		2,804		—		2,804		—
Investments in equity securities		308,793		308,793		296,610		9		12,174
Investments in Kraft Heinz & Occidental common stock		24,421		25,491		25,491		—		—
Loans and finance receivables		23,208		23,428		—		1,513		21,915
Derivative contract assets (1)		589		589		56		474		59
Derivative contract liabilities (1)		242		242		8		122		112
Notes payable and other borrowings:
Insurance and other		46,538		41,961		—		41,061		900
Railroad, utilities and energy		76,206		67,651		—		67,651		—

——————

Carrying
Value

Fair Value

Quoted
Prices
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

June 30, 2022

Investments in fixed maturity securities:

U.S. Treasury, U.S. government corporations
and agencies

$
8,741

$
8,741

$
8,704

$
37

$
—

Foreign governments

10,827

10,827

10,367

460

—

Corporate bonds

1,247

1,247

—

1,247

—

Other

321

321

—

321

—

Investments in equity securities

327,662

327,662

315,715

7

11,940

Investment in Kraft Heinz common stock

12,959

12,412

12,412

—

—

Loans and finance receivables

21,877

22,827

—

2,048

20,779

Derivative contract assets ⁽¹⁾

669

669

27

541

101

Derivative contract liabilities ⁽¹⁾

617

617

14

345

258

Notes payable and other borrowings:

Insurance and other

42,640

39,474

—

39,430

44

Railroad, utilities and energy

76,441

73,513

—

73,513

—

December 31, 2021

Investments in fixed maturity securities:

U.S. Treasury, U.S. government corporations
and agencies

$
3,303

$
3,303

$
3,261

$
42

$
—

Foreign governments

10,994

10,994

10,286

708

—

Corporate bonds

1,774

1,774

—

1,774

—

Other

363

363

—

363

—

Investments in equity securities

350,719

350,719

339,225

8

11,486

Investment in Kraft Heinz common stock

13,112

11,683

11,683

—

—

Loans and finance receivables

20,751

22,174

—

2,178

19,996

Derivative contract assets ⁽¹⁾

329

329

6

230

93

Derivative contract liabilities ⁽¹⁾

376

376

2

150

224

Notes payable and other borrowings:

Insurance and other

39,272

42,339

—

42,292

47

Railroad, utilities and energy

74,990

87,065

—

87,065

—

(1)

Assets are included in other assets and liabilities are included in accounts payable, accruals and other liabilities.

⁽¹⁾	~~Assets are included in other assets and liabilities are included in accounts payable, accruals and other liabilities.~~

Notes to Consolidated Financial Statements (Continued)

Note ~~16.~~18. Fair value measurements (Continued)

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

Level 1 – Inputs represent 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 ~~six~~three months ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~ follow (in millions).


	Balance at beginning of year		Gains (losses) included in earnings			Acquisitions, dispositions and settlements			Transfers out of Level 3		Balance at March 31
Investments in equity securities:
2023	$	12,169	$	(54	)	$	(521	)	$	—	$	11,594
2022		11,480		855			—			—		12,335

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

1,559

1,100

—

11,637

Equity index put option contract liabilities:

2021

(1,065
)

710

—

—

(355
)

Quantitative information as of ~~June 30, 2022 with respect to~~March 31, 2023 for the 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

10,051

Discounted cash flow

Expected duration

7 years

9,602

Discounted cash flow

Expected duration

6 years

Discount for transferability

restrictions and subordination

372 bps

Discounts for liquidity
and subordination

372 bps

Common stock warrants

1,884

Warrant pricing model

Expected duration

7 years

1,992

Warrant pricing model

Expected duration

6 years

Volatility

38%

Volatility

40%

Investments in equity securities in the preceding table include our investments in certain preferred ~~stocks~~stock and common stock warrants that do not have readily determinable market values as defined under GAAP. These investments are ~~subject to~~private placements with contractual ~~restrictions on transferability~~terms that restrict transfers and ~~may contain provisions that~~currently prevent us from economically hedging our investments. We applied discounted cash flow techniques in valuing the preferred stock and we made assumptions regarding the expected duration of the investment and the effects of liquidity and subordination in 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.

Note ~~17.~~19. Common stock

Changes in Berkshire’s issued, treasury and outstanding common stock during the first ~~six months~~quarter of ~~2022~~2023 are shown in the table below. In addition to our common stock, 1,000,000 shares of preferred stock are authorized, but ~~NaN~~none are issued.

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


	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, 2022		651,450			(59,886	)		591,564			1,509,969,352		(207,715,276	)		1,302,254,076
Conversions of Class A to Class B common stock		(359	)		—			(359	)		538,500		—			538,500
Treasury stock acquired		—			(5,103	)		(5,103	)		—		(6,716,864	)		(6,716,864	)
Balances at March 31, 2023		651,091			(64,989	)		586,102			1,510,507,852		(214,432,140	)		1,296,075,712

Each Class A common share is entitled to 1one 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 ~~1,468,461~~1,450,152 shares outstanding as of ~~June 30, 2022~~March 31, 2023 and ~~1,477,429~~1,459,733 shares outstanding as of December 31, ~~2021.~~2022.

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)~~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)~~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~~Bill holdings below ~~$30~~$30 billion. The repurchase program does not obligate Berkshire to repurchase any specific dollar amount or number of Class A or Class B shares and there is no expiration date to the program.

Note ~~18.~~20. Income taxes

Our consolidated effective income tax rates were ~~21.8% in the second quarter and 22.4%~~20.1% in the first ~~six months~~quarter of ~~2022~~2023 compared to ~~20.4% in the second quarter and 19.9%~~18.0% in the first ~~six months~~quarter of ~~2021.~~2022. 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, 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.

Notes to Consolidated Financial Statements (Continued)

Note ~~19.~~21. Accumulated other comprehensive income

A summary of the net changes in after-tax accumulated other comprehensive income attributable to Berkshire Hathaway shareholders for the ~~six~~three months ending ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~ follows (in millions).


	Unrealized gains (losses) on investments			Foreign currency translation			Long duration insurance contracts			Defined benefit pension plans			Other			Total
First quarter of 2023
Beginning of year as previously reported	$	(187	)	$	(6,140	)	$	—		$	(552	)	$	288		$	(6,591	)
Adoption of ASU 2018-12		—			(2	)		1,541			—			—			1,539
Beginning balance as revised		(187	)		(6,142	)		1,541			(552	)		288			(5,052	)
Other comprehensive income		194			244			(291	)		44			(115	)		76
Balance at end of period	$	7		$	(5,898	)	$	1,250		$	(508	)	$	173		$	(4,976	)

First quarter of 2022
Beginning of year as previously reported	$	369		$	(4,092	)	$	—		$	(347	)	$	43		$	(4,027	)
Adoption of ASU 2018-12		—			—			(4,096	)		—			—			(4,096	)
Beginning balance as revised		369			(4,092	)		(4,096	)		(347	)		43			(8,123	)
Other comprehensive income		(186	)		(314	)		2,419			20			80			2,019
Balance at end of period	$	183		$	(4,406	)	$	(1,677	)	$	(327	)	$	123		$	(6,104	)

Unrealized
appreciation of
fixed maturity
securities, net

Foreign
currency
translation

Defined benefit
pension plans

Other

Accumulated
other
comprehensive
income

First six months of 2022

Balance at beginning of year

$
369

$
(4,092
)

$
(347
)

$
43

$
(4,027
)
Other comprehensive income, net

(352
)

(1,971
)

27

148

(2,148
)
Balance at end of period

$
17

$
(6,063
)

$
(320
)

$
191

$
(6,175
)

First six months of 2021

Balance at beginning of year

$
536

$
(3,082
)

$
(1,645
)

$
(52
)

$
(4,243
)
Other comprehensive income, net

(58
)

(1
)

73

10

24

Balance at end of period

$
478

$
(3,083
)

$
(1,572
)

$
(42
)

$
(4,219
)

Note ~~20.~~22. Supplemental cash flow information

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


	First Quarter
	2023		2022
Cash paid during the period for:
Income taxes	$	312	$	336
Interest:
Insurance and other		491		365
Railroad, utilities and energy		799		708
Non-cash investing and financing activities:
Liabilities assumed in connection with business acquisitions		10,747		9

First Six Months

2022

2021

Cash paid during the period for:

Income taxes

$
1,951

$
2,508

Interest:

Insurance and other

567

699

Railroad, utilities and energy

1,564

1,580

Note ~~21.~~23. Contingencies and commitments

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 currently 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.

Berkshire and Alleghany Corporation (“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.25

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 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 consideration paid over the carrying value of the acquired noncontrolling interest.

Note ~~22.~~24. Revenues from contracts with customers

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 ~~second~~first quarter of 2023 and ~~first six months of~~ 2022 ~~and 2021~~ (in millions). Revenues from Pilot in 2023 are for the two months ending March 31, 2023. Other revenues, which are not considered to be revenues from contracts with customers under GAAP, are primarily insurance premiums earned, interest, dividend and other investment income and leasing revenues.

Manufacturing

McLane

Service
and
Retailing

BNSF

Berkshire
Hathaway
Energy

Insurance,
Corporate
and other

Total

Three months ending June 30, 2022

Manufactured products:

Industrial and commercial products

$
6,142

$
—

$
48

$
—

$
—

$
—

$
6,190

Building products

5,970

—

—

—

—

—

5,970

Consumer products

5,509

—

—

—

—

—

5,509

Grocery and convenience store distribution

—

7,979

—

—

—

—

7,979

Food and beverage distribution

—

5,002

—

—

—

—

5,002

Auto sales

—

—

2,675

—

—

—

2,675

Other retail and wholesale distribution

818

—

4,265

—

—

—

5,083

Service

302

248

1,078

6,596

1,561

—

9,785

Electricity and natural gas

—

—

—

—

4,740

—

4,740

Total

18,741

13,229

8,066

6,596

6,301

—

52,933

Other revenues

995

33

1,527

16

212

20,464

23,247

$
19,736

$
13,262

$
9,593

$
6,612

$
6,513

$
20,464

$
76,180

Six months ending June 30, 2022

Manufactured products:

Industrial and commercial products

$
12,074

$
—

$
97

$
—

$
—

$
—

$
12,171

Building products

11,389

—

—

—

—

—

11,389

Consumer products

10,602

—

—

—

—

—

10,602

Grocery and convenience store distribution

—

15,685

—

—

—

—

15,685

Food and beverage distribution

—

9,564

—

—

—

—

9,564

Auto sales

—

—

5,202

—

—

—

5,202

Other retail and wholesale distribution

1,540

—

8,440

—

—

—

9,980

Service

566

462

2,084

12,527

2,673

—

18,312

Electricity and natural gas

—

—

—

—

9,454

—

9,454

Total

36,171

25,711

15,823

12,527

12,127

—

102,359

Other revenues

1,950

65

2,861

29

364

39,362

44,631

$
38,121

$
25,776

$
18,684

$
12,556

$
12,491

$
39,362

$
146,990

~~Notes to Consolidated Financial Statements~~ ~~(Continued)~~

~~Note 22. Revenues from contracts with customers~~ ~~(Continued)~~


	Manufacturing		McLane		Service and Retailing		BNSF		Berkshire Hathaway Energy		Pilot		Insurance, Corporate and other		Total
Three months ending March 31, 2023
Manufactured products:
Industrial and commercial products	$	7,229	$	—	$	65	$	—	$	—	$	—	$	—	$	7,294
Building products		4,758		—		—		—		—		—		—		4,758
Consumer products		4,035		—		—		—		—		—		—		4,035
Grocery and convenience store distribution		—		7,793		—		—		—		—		—		7,793
Food and beverage distribution		—		4,762		—		—		—		—		—		4,762
Auto sales		—		—		2,565		—		—		—		—		2,565
Other retail and wholesale distribution		799		—		4,230		—		—		422		—		5,451
Service		354		284		1,326		5,985		811		21		—		8,781
Electricity, natural gas and fuel		—		—		—		—		5,291		9,015		—		14,306
Total		17,175		12,839		8,186		5,985		6,102		9,458		—		59,745
Other revenues		1,090		42		1,716		16		337		38		22,409		25,648
	$	18,265	$	12,881	$	9,902	$	6,001	$	6,439	$	9,496	$	22,409	$	85,393

Three months ending March 31, 2022
Manufactured products:
Industrial and commercial products	$	5,932	$	—	$	49	$	—	$	—	$	—	$	—	$	5,981
Building products		5,419		—		—		—		—		—		—		5,419
Consumer products		5,093		—		—		—		—		—		—		5,093
Grocery and convenience store distribution		—		7,706		—		—		—		—		—		7,706
Food and beverage distribution		—		4,562		—		—		—		—		—		4,562
Auto sales		—		—		2,527		—		—		—		—		2,527
Other retail and wholesale distribution		722		—		4,175		—		—		—		—		4,897
Service		264		214		1,006		5,931		1,112		—		—		8,527
Electricity and natural gas		—		—		—		—		4,714		—		—		4,714
Total		17,430		12,482		7,757		5,931		5,826		—		—		49,426
Other revenues		955		32		1,334		13		189		—		18,894		21,417
	$	18,385	$	12,514	$	9,091	$	5,944	$	6,015	$	—	$	18,894	$	70,843

Manufacturing

McLane

Service
and
Retailing

BNSF

Berkshire
Hathaway
Energy

Insurance,
Corporate
and other

Total

Three months ending June 30, 2021

Manufactured products:

Industrial and commercial products

$
5,586

$
—

$
49

$
—

$
—

$
—

$
5,635

Building products

5,114

—

—

—

—

—

5,114

Consumer products

4,604

—

—

—

—

—

4,604

Grocery and convenience store distribution

—

7,729

—

—

—

—

7,729

Food and beverage distribution

—

4,356

—

—

—

—

4,356

Auto sales

—

—

2,750

—

—

—

2,750

Other retail and wholesale distribution

754

—

4,008

—

—

—

4,762

Service

370

183

1,053

5,763

1,593

—

8,962

Electricity and natural gas

—

—

—

—

4,198

—

4,198

Total

16,428

12,268

7,860

5,763

5,791

—

48,110

Other revenues

947

27

1,094

15

294

18,627

21,004

$
17,375

$
12,295

$
8,954

$
5,778

$
6,085

$
18,627

$
69,114

Six months ending June 30, 2021

Manufactured products:

Industrial and commercial products

$
10,949

$
—

$
99

$
—

$
—

$
—

$
11,048

Building products

9,513

—

—

—

—

—

9,513

Consumer products

8,767

—

—

—

—

—

8,767

Grocery and convenience store distribution

—

15,171

—

—

—

—

15,171

Food and beverage distribution

—

8,360

—

—

—

—

8,360

Auto sales

—

—

5,062

—

—

—

5,062

Other retail and wholesale distribution

1,457

—

7,664

—

—

—

9,121

Service

699

334

1,987

11,128

2,633

—

16,781

Electricity and natural gas

—

—

—

—

8,910

—

8,910

Total

31,385

23,865

14,812

11,128

11,543

—

92,733

Other revenues

1,870

52

2,085

28

466

36,479

40,980

$
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 ~~June 30, 2022~~March 31, 2023 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
Electricity and natural gas	$	4,019	$	22,226	$	26,245
							Less than 12 months		Greater than 12 months		Total
Electricity, natural gas and fuel							$	3,331	$	20,146	$	23,477
Other sales and service contracts		1,642		2,789		4,431		3,346		5,134		8,480

Note ~~23.~~25. Business segment data

Our operating businesses include a large and diverse group of insurance, manufacturing, service and retailing businesses. We organize our reportable business segments in a manner that reflects how management views those business activities. Certain businesses are 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. We acquired control of Pilot Travel Centers (“Pilot”) on January 31, 2023. Pilot’s revenues, costs and earnings are included in our Consolidated Financial Statements and is considered a reportable segment beginning February 1, 2023. In this presentation, the revenues and pre-tax earnings of the Pilot segment are for the two months ending March 31, 2023. Previously, our earnings from Pilot were determined under the equity method and are included in earnings from equity method investments. Revenues and earnings before income taxes by segment for the ~~second~~first quarter of 2023 and ~~first six months of~~ 2022 ~~and 2021~~ were as follows (in millions).


	Second Quarter					First Six Months						First Quarter
	2022		2021			2022			2021			2023			2022
Revenues of Operating Businesses
Insurance:
Underwriting:
GEICO	$	9,807	$	9,546		$	19,361		$	18,469		$	9,626		$	9,554
Berkshire Hathaway Primary Group		3,313		2,755			6,431			5,409			3,961			3,118
Berkshire Hathaway Reinsurance Group		4,967		4,862			9,787			9,709			6,209			4,816
Investment income		2,284		1,459			3,648			2,873			2,392			1,364
Total insurance		20,371		18,622			39,227			36,460			22,188			18,852
BNSF		6,640		5,809			12,608			11,210			6,019			5,968
BHE		6,518		6,085			12,501			12,009
Berkshire Hathaway Energy (“BHE”)													6,451			6,020
Pilot Travel Centers (“Pilot”)													9,508			—
Manufacturing		19,772		17,412			38,193			33,325			18,289			18,421
McLane		13,262		12,295			25,777			23,917			13,059			12,515
Service and retailing		9,617		8,977			18,732			16,935			9,931			9,115
		76,180		69,200			147,038			133,856			85,445			70,891
Reconciliation of segments to consolidated amount
Corporate, eliminations and other		—		(86	)		(48	)		(143	)		(52	)		(48	)
	$	76,180	$	69,114		$	146,990		$	133,713		$	85,393		$	70,843


	First Quarter
	2023			2022
Earnings Before Income Taxes of Operating Businesses
Insurance:
Underwriting:
GEICO	$	703		$	(178	)
Berkshire Hathaway Primary Group		268			92
Berkshire Hathaway Reinsurance Group		231			301
Investment income		2,385			1,361
Total insurance		3,587			1,576
BNSF		1,649			1,809
BHE		223			713
Pilot		136			—
Manufacturing		2,611			2,824
McLane		113			82
Service and retailing		1,221			1,135
		9,540			8,139
Reconciliation of segments to consolidated amount
Investment and derivative gains (losses)		34,758			(1,978	)
Interest expense, not allocated to segments		(114	)		(104	)
Equity method investments		688			339
Corporate, eliminations and other		(120	)		561
	$	44,752		$	6,957

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

Net ~~earnings/loss~~earnings 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).

* Includes certain businesses in which Berkshire had between a 20% and 50% ownership interest.

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 2325 to the accompanying Consolidated Financial Statements) should be read in conjunction with this discussion.

InTo varying degrees the consequences of the COVID-19 pandemic ~~continues~~continue to affect our operating businesses. ~~Significant government~~Government and private sector actions ~~have been~~were taken ~~since~~beginning in 2020 intended to control the spread and mitigate the adverse economic effects of the ~~virus. Actions in the latter part~~virus and its variants. The development of 2021 and during 2022 included periodic temporary business closures or restrictions of business activities in various parts of the world in response to the emergence of variants of the virus. Notwithstanding these efforts, significant disruptions of supply chains and higher costs have persisted. Further,global geopolitical conflicts, ~~including the Russia-Ukraine conflict, have developed~~supply chain disruptions and government actions to slow inflation in 2022. While direct losses to-date have not been material to consolidated results, these events had indirect impacts by contributing to the disruptions of global supply chains, resulting in cost increases for goods and services in parts of the world where we operate.recent years has produced varying economic effects on our operating businesses. We cannot reliably predict the future economic effects of these events on our ~~businesses or when our operations will normalize. Nor can we reliably predict how these events will alter the future consumption patterns of consumers and businesses we serve.~~businesses.

Insurance underwriting generated after-tax earnings ~~increased $205~~of $911 million ~~(54.5%) in the second quarter and decreased $512 million (44.9%)~~ in the first ~~six months~~quarter of 2023 and $167 million in the first quarter of 2022, versus 2021. In each period, underwriting earnings from GEICO declined, primarily attributable to increases in claims frequencies and 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 arisingwhich was revised from the ~~remeasurement~~previously reported amount of ~~non-U.S. Dollar denominated liabilities on insurance contracts of our U.S. insurance subsidiaries due to strengthening~~$47 million as a result of the ~~U.S. Dollar and improved life results.~~adoption of ASU 2018-12 on January 1, 2023. See Note 2 to the accompanying Consolidated Financial Statements. After-tax earnings from insurance investment income increased ~~56.4% in the second quarter and 26.7%~~$799 million in the first ~~six months~~quarter of ~~2022~~2023 compared to ~~2021,~~2022, mostly attributable to ~~increased dividend income and higher~~increases in short-term interest rates.

After-tax earnings of ~~our railroad business increased 9.8% in the second quarter and 9.7%~~BNSF decreased 9.0% in the first ~~six months~~quarter of ~~2022~~2023 compared to ~~2021. These increases reflected higher revenue per car/unit, partly offset by~~2022. The comparative decrease was primarily attributable to lower overall freight volumes and higher fuel and other operating costs. After-tax earnings of ~~our utilities and energy business increased 3.5% in the second quarter and 5.1%~~BHE decreased 46.3% in the first ~~six months~~quarter of ~~2022~~2023 compared to ~~2021.~~2022. The ~~increases~~decrease reflected ~~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, other energy businesses and real estate brokerage businesses.

As disclosed in Note 3 to the accompanying Consolidated Financial Statements, we increased our ownership in Pilot from 38.6% to 80% on January 31, 2023 and we are consolidating Pilot’s results beginning February 1, 2023. In 2022 and through January 31, 2023, earnings from Pilot on our 38.6% interest were determined under the equity method and are included in non-controlled businesses in the preceding table.

After-tax earnings from our manufacturing, service and retailing businesses ~~increased 8.2% in the second quarter and 11.6%~~decreased 1.4% in the first ~~six months~~quarter of ~~2022~~2023 versus ~~2021. Results~~2022. Earnings in the first quarter of 2023 were mixed among our various businesses. While ~~customer demand~~results for certain industrial products manufacturers and services ~~was relatively good in~~businesses improved versus 2022, the ~~first six months~~results of ~~2022, we continue to experience~~ the ~~negative effects of higher materials, freight, labor~~building and ~~other input costs.~~consumer products businesses generally deteriorated.

Investment and derivative contract gains (losses) in the first quarters of 2023 and ~~losses in~~ 2022 ~~and 2021~~ predominantly derived from our investments in equity securities and ~~includes~~included significant net unrealized gains and losses from market price ~~changes during the period.~~changes. We believe that investment gains and ~~derivative gains/~~losses on investments in equity securities, 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 operating businesses. These gains and losses have caused and will continue to cause significant volatility in our periodic earnings. ~~Other earnings~~Investment and derivative contract gains (losses) also included an after-tax ~~foreign currency exchange gains related to non-U.S. Dollar denominated debt~~non-cash remeasurement gain of ~~$1.1 billion in the second quarter and $1.6~~$2.4 billion in the first ~~six months~~quarter of ~~2022, compared~~2023 related to ~~after-tax losses~~our previously held 38.6% interest in Pilot through the application of ~~$45 million and after-tax gains of $480 million in~~ the ~~second quarter and first six months of 2021, respectively.~~acquisition accounting method.

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

Other earnings included after-tax foreign exchange rate losses of $17 million in the first quarter of 2023 and after-tax gains of $522 million in the first quarter of 2022 related to the non-U.S. Dollar denominated debt issued by Berkshire and its U.S.-based finance subsidiary, Berkshire Hathaway Finance Corporation (“BHFC”).

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~~We currently consider pre-tax incurred losses exceeding ~~$100~~$150 million from a current year catastrophic event to be significant. Significant ~~catastrophe events~~catastrophes in the first ~~six months included~~quarter were Cyclone Gabrielle and floods in New Zealand in 2023 and floods in Australia ~~and South Africa~~ in ~~2022 and Winter Storm Uri in 2021.~~2022.

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 ~~$126~~$143 billion as of ~~June 30, 2022.~~March 31, 2023. Our periodic underwriting results may also include significant foreign currency transaction gains and losses arising from the changes in the valuation of non-U.S. Dollar denominated liabilities of our ~~U.S. based~~U.S.-based insurance subsidiaries due to foreign currency exchange rate fluctuations.

Underwriting results of certain of our commercial insurance and reinsurance businesses have been affected by estimated losses and costs associated with the COVID-19 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 legal and regulatory actions pertaining to insurance coverage, 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 (“BH Primary”) and Berkshire Hathaway Reinsurance ~~Group.~~ Group (“BHRG”). Berkshire acquired Alleghany Corporation (“Alleghany”) on October 19, 2022. Through its subsidiaries, Alleghany operates property and casualty insurance and reinsurance businesses, which are included in the BH Primary and BHRG underwriting results.

We strive to produce pre-tax underwriting earnings (premiums earned less insurance losses/benefits incurred and underwriting expenses) over the long term in all business categories, except for BHRG’s retroactive reinsurance and periodic payment annuity contracts. Time-value-of-money is an important element in establishing prices for these contracts. We normally receive all premiums at the contract inception date, which are immediately available for investment. Ultimate claim payments can extend for decades and are expected to exceed premiums, producing underwriting losses over the claim settlement periods, primarily through deferred charge asset amortization and discounted liability accretion charges.

Underwriting results of our insurance businesses are summarized below (dollars in millions). BHRG’s pre-tax underwriting earnings for the first quarter of 2022 were $301 million, an increase from the previously reported amount of $156 million due to the impact of the retrospective adoption of ASU 2018-12 with respect to our long duration insurance contracts.

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

GEICO primarily 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).

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

GEICO’s pre-tax underwriting ~~loss~~earnings in the first ~~half~~quarter of ~~2022~~2023 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 and $445 million (2.3%) in the first six months of 2022 compared to 2021. The increases were primarily attributable to increases in~~ average premiums per auto policy, a reduction in advertising costs, as well as favorable prior accident year development. Premiums written in the first quarter of 2023 decreased $205 million (2.0%) compared to the first quarter of 2022. Premiums earned increased $72 million (0.8%) as average premiums per auto policy increased 15.2% due to rate increases, ~~partially~~ offset by a decrease in ~~policies in-force. Premiums earned increased $261~~policies-in-force of 2.4 million ~~(2.7%~~(13.0%) 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 attributablesince March 31, 2022. GEICO significantly reduced advertising over that period, which contributed to the ~~remaining impact of the GEICO Giveback program that provided a 15% premium credit to new and renewing voluntary auto and motorcycle policies written between April 8, 2020 and October 7, 2020.~~reduction in policies-in-force.

Losses and loss adjustment expenses ~~increased $1.5 billion (19.5%) in the second quarter and $3.6 billion (25.3%)~~ in the first ~~six months~~quarter of ~~2022~~2023 decreased $552 million (6.5%) compared to ~~2021.~~the first quarter of 2022. GEICO’s ratio of losses and loss adjustment expenses to premiums earned ~~was 92.8% in the second quarter and 91.2%~~ in the first ~~six months~~quarter of ~~2022, increases~~2023 was 83.0%, a decrease of ~~13.0~~6.4 percentage points ~~and 15.0 percentage points, respectively,~~ compared to the ~~same periods~~first quarter of 2022, which reflected the impact of higher average premiums per auto policy, favorable reserve development for prior accident years, the reduction in ~~2021, which reflected~~policies-in-force, and lower claims frequencies. Somewhat offsetting the favorable impact of these items were increases in claims ~~frequencies and severities for~~severities. GEICO’s reductions in the ~~current year and lower reductions of~~ultimate claim loss estimates for prior years’ loss ~~events.~~events were $338 million in the first quarter of 2023 and $92 million in the first quarter of 2022. The reduction in loss estimates for prior years’ events in 2023 reflected decreased estimates across several coverages.

Claims frequencies in the first ~~six months~~quarter of ~~2022~~2023 were ~~higher~~lower for ~~all coverages, including~~ property damage (five to six percent range) and collision (six to seven percent range), while claims frequencies increased for bodily injury (four to five percent range)~~, collision (ten to eleven percent range), bodily injury (six to seven percent range)~~ and personal injury ~~(seven~~(three to ~~eight~~four percent range). Average claims severities in the first ~~six months~~quarter of ~~2022~~2023 were higher for property damage coverage ~~(eleven~~(twenty-one to ~~twelve~~twenty-two percent range), collision coverage ~~(nineteen~~(seven to ~~twenty~~eight percent range) and bodily injury coverage ~~(nine~~(eight to ~~eleven~~ten percent range). ~~Losses and loss adjustment~~

Underwriting expenses ~~reflected reductions in the ultimate loss estimates for prior years’ loss events of $207 million~~ in the first ~~six months~~quarter of ~~2022~~2023 were $931 million, a decrease of $257 million (21.6%) compared to $846 million in the first six months of 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 decreased $114 million (8.7%) in the second quarter and $363 million (13.2%) in the first six months of 2022 compared to 2021, reflecting lower advertising costs in both periods and lower employee-related costs in the first six months.2022. GEICO’s expense ratio (underwriting ~~expense~~expenses to premiums earned) ~~was 12.2%~~ in the ~~second~~first quarter ~~and first six months~~ of ~~2022, decreases of 1.4 percentage points and 2.7 percentage points, respectively,~~2023 was 9.7% compared to 12.5% in 2022. These decreases were driven by the ~~same periods~~reduction in ~~2021, attributable to both the decreases in expenses as well as the increases in earned premiums.~~advertising expenses.

The Berkshire Hathaway Primary Group ~~(“BH Primary”) provides~~consists of several independently managed businesses that provide a variety of primarily commercial insurance solutions, including healthcare professional liability, workers’ compensation, automobile, general liability, property and specialty coverages for small, medium and large clients. BH 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”), Berkshire Hathaway Direct Insurance Company (“BH Direct”) and U.S. Liability Insurance Company (“USLI”). ~~A summary of BH Primary underwriting results follows (dollars in millions).~~

~~Premiums written increased $561 million (19.1%) in the second quarter~~This group also includes Alleghany’s RSUI Group Inc. 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%~~CapSpecialty, Inc. (“Alleghany Insurance”), ~~USLI (17%) and BHHC (14%). The increases were primarily on property and casualty coverages in the U.S. across several markets.~~beginning October 19, 2022.

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

A summary of BH ~~Primary’s loss ratio was 67.7%~~Primary underwriting results follows (dollars in ~~the second quarter and 70.2%~~millions).

Premiums written increased $766 million (22.6%) in the first ~~six months~~quarter of ~~2022, a decrease of 3.3 percentage points in the second quarter and relatively unchanged in the first six months~~2023 compared to ~~2021.~~ 2022. The increase was primarily due to the inclusion of Alleghany Insurance ($570 million), as well as increased volumes from BH Specialty, BH Direct and USLI.

Losses and loss adjustment expenses increased $382 million (16.8%) in the first quarter of 2023 compared to 2022, primarily due to the impact of Alleghany Insurance ($233 million). BH Primary’s loss ratio decreased 5.8 percentage points in the first quarter of 2023 compared to 2022, reflecting changes in business mix (including the impact of Alleghany Insurance), lower incurred losses from current year catastrophes and increased reductions in loss estimates for prior years’ events. Incurred losses from significant ~~catastrophe events~~catastrophes during the first quarter were $37 million in 2023 and $75 million in ~~the first six months of 2022 compared to $156 million in 2021. Losses~~2022. Incurred losses and loss adjustment expenses ~~also included~~reflected net reductions in estimated ultimate liabilities for prior years’ loss events of ~~$106~~$41 million in the first ~~six months~~quarter of ~~2022 compared to $253~~2023 and $22 million in ~~2021.~~the first quarter of 2022. BH Primary insurers write significant levels of workers’ compensation, commercial and professional liability insurance and the related claim costs may be subject to high severity and long claim-tails. WeClaims liabilities could ~~experience significant increases in claims liabilities in the future attributable~~be greater than anticipated due to ~~higher-than-expected claim settlements, adverse litigation outcomes or judicial rulings and other factors not currently anticipated.~~a variety of factors.

Underwriting expenses increased ~~$194~~$285 million ~~(30.6%) in the second quarter and $347 million (28.1%~~(37.9%) in the first ~~six months~~quarter of ~~2022~~2023 compared to 2022. Alleghany Insurance underwriting expenses for the ~~same periods in 2021. The expense ratio~~first quarter of 2023 were $139 million. Underwriting expenses as percentages of premiums earned increased 2.0 percentage points in the ~~second~~first quarter ~~and 1.8 percentage points in the first six months~~of 2023 compared to ~~2021. These increases reflected costs associated with new business development and~~2022. The increase was primarily attributable to 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.~~AG and, beginning October 19, 2022, Alleghany’s Transatlantic Reinsurance Company and affiliates (“TransRe Group”). We also 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,~~NICO and 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 business due to the expected long durations of the claim liabilities. We expect to incur pre-tax underwriting losses from such 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 BHRG’s premiums and pre-tax underwriting results follows ~~(dollars~~(in millions). Pre-tax underwriting losses in ~~millions).~~the first quarter of 2022 were increased $14 million for the life and health business and $16 million for the periodic payment annuity business, while earnings from the variable annuity business were increased $175 million from the previously reported amounts due to the retrospective adoption of ASU 2018-12.

~~A summary of property/casualty reinsurance underwriting results follows (dollars in millions).~~31

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 $733 million (21.4%)~~ in the ~~second~~first quarter ~~and $736~~of 2023 included $1.3 billion from the inclusion of TransRe Group. Otherwise, premiums written increased $542 million ~~(9.4%~~(12.4%) in the first ~~six months~~quarter of ~~2022~~2023 compared to ~~the same periods in 2021, reflecting~~2022, primarily due to net increases ~~from~~in new and renewal property business and higher rates, partially offset by unfavorable foreign currency translation effects.

Losses and loss adjustment expenses ~~decreased $229 million (10.0%) in the second quarter and $329 million (7.0%~~increased $1.1 billion (46.8%) in the first ~~six months, while~~quarter of 2023 compared to 2022, primarily from the inclusion of TransRe Group ($700 million). The loss ratio ~~declined 10.0 percentage points in the second quarter and 6.6~~decreased 2.1 percentage points in the first ~~six months~~quarter of ~~2022~~2023 compared to 2021. Losses incurred arising from significant catastrophe events were $443 million in the second quarter and $758 million in the first six months of 2022, which were partially offset by reductions in estimated ultimate liabilities for losses occurring in prior years of $437 million in the second quarter and $574 million in the first six months.2022. Losses incurred from significant ~~catastrophe events~~catastrophes during the first quarter were ~~$108~~$407 million in ~~the second quarter~~2023 and ~~$418~~$315 million in ~~the first six months of 2021. Changes~~2022. Losses and loss adjustment expenses included reductions in estimated ultimate liabilities for prior years’ ~~loss~~ events ~~were relatively insignificant~~of $361 million in the ~~second~~first quarter of 2023 and ~~first six months of 2021.~~

~~Underwriting expenses as percentages of premiums earned decreased 11.6 percentage points~~$137 million in the ~~second~~first quarter ~~and 7.8~~of 2022.

The expense ratio increased 6.4 percentage points in the first ~~six months~~quarter of ~~2022~~2023 compared to ~~2021,~~2022, primarily attributable to foreign currency exchange rate effects and changes in business ~~mix.~~mix, including the impact of TransRe Group. Underwriting expenses in the first quarter of 2023 included $385 million related to TransRe Group. Underwriting expenses also included foreign currency exchange ~~gains~~losses of ~~$308 million in the second quarter and $389~~$74 million in the first ~~six months~~quarter of 2023 compared to gains of $81 million in the first quarter of 2022, ~~primarily~~ related to ~~a third quarter 2021 intercompany reinsurance agreement in which a non-U.S. based Berkshire subsidiary ceded~~the remeasurement of certain non-U.S. Dollar denominated liabilities ~~to a~~of our 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.insurance subsidiaries.

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

~~Life/health premiums written decreased $47 million (3.6%) in the second quarter and $105 million (4.0%)~~Pre-tax underwriting earnings in the first ~~six months~~quarter of ~~2022~~2023 reflected the impact of life insurance contract commutations in 2023, as well as lower claims incurred compared to the ~~same periods~~first quarter of 2022. The life insurance contract commutations drove most of the comparative decreases in ~~2021, primarily due to lower volumes in the Asia Pacific~~premiums earned and ~~North America regions and from unfavorable foreign currency translation effects. Life~~life and health benefits ~~declined $271 million (21.9%) in~~incurred.

Retroactive reinsurance underwriting results primarily derive from the ~~second quarter and $471 million (18.9%) in the first six months~~runoff of 2022 compared to 2021, attributable to lower mortality. Underwriting results in 2021 were negatively affected by significant, pandemic-related increases in mortality in the U.S., South Africa, India and Latin America.

contracts written several years ago. 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. ~~Foreign currency exchange gains~~Pre-tax underwriting losses were ~~$157~~$195 million in the first ~~six months~~quarter of 2022, substantially all of which was in the second quarter. Foreign currency exchange gains/losses were insignificant in the corresponding 2021 periods. Pre-tax underwriting losses before foreign currency exchange effects were $204 million in the second quarter2023 and ~~$399~~$190 million in the first ~~six months~~quarter of 2022, ~~compared~~primarily related to ~~$220 million in the second quarter and $463 million~~deferred charge amortization. The effects of foreign currency exchange were relatively insignificant in the first ~~six months~~quarter of ~~2021.~~2023 and 2022.

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

Gross unpaid losses assumed under retroactive reinsurance contracts ~~declined $1.0 billion in the first six months of 2022 to $37.2~~were $35.1 billion at ~~June 30,~~March 31, 2023, a decline of $352 million since December 31, 2022, primarily ~~due~~attributable to ~~loss payments.~~paid claims. Unamortized deferred charges related to retroactive reinsurance contracts ~~declined $426 million in the first six months of 2022 to $10.2~~were $9.7 billion at ~~June 30, 2022, primarily attributable to periodic amortization.~~March 31, 2023, a decline of $171 million since December 31, 2022. Deferred charge amortization will be 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 $45 million (36.6%) in the second quarter and $70 million (26.2%) in the first six months of 2022 compared to the same periods in 2021.~~ Periodic payment annuity business is both price and demand sensitive and the supply of available business is affected by the timing of underlying legal claim settlements. Our volumes written may 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~~Our periodic payment annuity contracts normally produce pre-tax underwriting losses ~~deriving~~ from the recurring ~~discount~~ accretion of time-value discounted annuity ~~liabilities.~~liabilities, which includes discount accruals on liabilities of contracts without life contingencies. Underwriting results also include gains or losses ~~from the effects of changes in mortality and interest rates and~~ from foreign currency exchange rate changes on non-U.S. Dollar denominated liabilities of our U.S. subsidiaries. Pre-tax underwriting results included foreign currency ~~gains~~losses of ~~$116 million in the second quarter and $160~~$19 million in the first ~~six months~~quarter of ~~2022 compared to losses~~2023 and gains of ~~$10 million in the second quarter and $20~~$23 million in the first ~~six months~~quarter of ~~2021.~~2022.

Pre-tax underwriting losses before foreign currency exchange effects were ~~$143 million in the second quarter and $290~~$145 million in the first ~~six months~~quarter of ~~2022~~2023 and ~~$134 million in the second quarter and $260~~$142 million in the first ~~six months~~quarter of ~~2021.~~2022. Discounted ~~annuity~~ liabilities were ~~$15.4~~$15.1 billion at ~~June 30, 2022 and had a weighted average~~March 31, 2023, which included $4.0 billion for contracts without life contingencies. We adopted ASU 2018-12 on January 1, 2023. ASU 2018-12 requires that the discount rates on contracts with life-contingent liabilities be adjusted quarterly based upon prevailing interest rates. The effects of discount rate ~~of approximately 3.9%.~~changes are reflected in other comprehensive income.

~~Variable~~The run-off of our variable annuity guarantee reinsurance contracts produced pre-tax ~~losses of $5 million in the second quarter and~~ gains of ~~$51~~$63 million in the first ~~six months~~quarter of ~~2022 compared to pre-tax gains of $4 million in the second quarter~~2023 and ~~$125~~$231 million in the first ~~six months~~quarter of ~~2021.~~2022. The results from these contracts are affected by changes in securities markets, interest rates and foreign currency exchange rates, which can be volatile, and from the periodic amortization of expected profit margins. Underwriting earnings in the first six months of 2022 and 2021 were primarily attributable to the net effects of interest rate changes and changes in securities markets which were unfavorable in 2022 and favorable in 2021.

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

Dividend income increased ~~58.3% in the second quarter and 27.5%~~3.9% in the first ~~six months~~quarter of ~~2022~~2023 compared to ~~2021. The increases~~2022. Income in the first quarter included $8 million in 2023 and $16 million in 2022 ~~reflected an overall increase in equity security investments during~~from BHE preferred stock. Such amounts were deducted from earnings of the ~~first six months of 2022.~~BHE segment. Dividend income ~~also~~ varies from period to period due to changes in the investment portfolio and the frequency and timing of dividends from certain investees. Dividend income included $13 million in the second quarter and $29 million in the first 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.

Interest and other investment income increased ~~44.3% in the second quarter and 23.7%~~$977 million in the first ~~six months~~quarter of ~~2022~~2023 compared to the same ~~periods~~period in ~~2021.~~2022. The ~~increases were~~increase was primarily due to increases in short-term interest rates. We continue to hold substantial balances of cash, cash equivalents and 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 we insist on safety over yield with respect to short-term investments.

Item 2. Management’s Discussion and Analysis of 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 ~~$147~~$165 billion at ~~June 30, 2022~~March 31, 2023 and $164 billion at December 31, ~~2021.~~2022. Our combined insurance operations generated pre-tax underwriting ~~earnings~~gains of $1.2 billion in the first ~~six months~~quarter of ~~2022 and 2021,~~2023 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 ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 follows (in millions).

Fixed maturity securities as of ~~June 30, 2022~~March 31, 2023 were as follows (in millions).

U.S. government obligations are rated AA+ or Aaa by the major rating agencies. Approximately ~~94%~~93% of all foreign government obligations were rated AA or higher by at least one of the major rating agencies as of ~~June 30, 2022. Foreign government securities include obligations issued or unconditionally guaranteed by national or provincial government entities.~~March 31, 2023.

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

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).

Railroad operating revenues increased ~~15.1% in the second quarter and 12.9%~~1.9% in the first ~~six months~~quarter of ~~2022~~2023 compared to ~~2021~~2022, primarily ~~due~~attributable to a ~~21.9% quarter-to-date and a 17.9% year-to-date~~14.0% increase in average revenue per car/unit resulting from higher fuel surcharge revenue driven by higher fuel prices ~~along with~~and increased rates per car/~~unit. Railroad operating revenues reflected lower volumes of 5.6%~~unit, partially offset by a 10.3% decrease in ~~the second quarter and 4.5%~~unit volume. BNSF’s pre-tax earnings were $1.6 billion in the first ~~six months~~quarter of ~~2022~~2023, an 8.8% decrease compared to ~~2021. Pre-tax earnings increased 8.7% in the second quarter and 8.9% in the first six months of 2022 compared to 2021.~~2022.

Operating revenues from consumer products were ~~$2.5 billion in the second quarter and $4.5~~$1.9 billion in the first ~~six months of~~quarter, a 10.4% decrease from 2022, ~~increases of 17.6% and 14.1%, respectively, from 2021. The increases reflected~~attributable to 16.4% lower volumes, partially offset by higher average revenue per car/~~unit, partially offset by volume decreases of 7.4% in the second quarter and 7.9% in the first six months of 2022 as compared to 2021.~~unit. The volume ~~decreases were~~decrease was primarily due to lower ~~international~~ intermodal shipments resulting from ~~supply chain disruptions,~~lower west coast imports and the loss of an intermodal customer, partially offset by ~~modest increases~~an increase in ~~domestic intermodal and~~ automotive ~~volumes.~~volume from higher vehicle production.

Operating revenues from industrial products were ~~$1.5 billion in the second quarter and $2.8~~$1.4 billion in the first ~~six months~~quarter of ~~2022, increases of 7.8% and 6.9%, respectively,~~2023, a 6.4% increase from ~~2021. The increases reflected higher average revenue per car/unit, partially offset by volume decreases of 3.9% in the second quarter and 1.6% in the first six months of~~ 2022, ~~as compared to 2021. The volume decreases were~~ primarily due to a decrease in petroleum shipments related to lower demand for crude by rail and network challenges, with the decrease in the first six months partially offset by increased volumes in other product categories.

Operating revenues from agricultural products were $1.4 billion in the second quarter and $2.7 billion in the first six months of 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%~~a 3.7% decrease in ~~the second quarter~~volumes. The volume decrease was primarily due to lower demand for chemicals and ~~3.6%~~plastics, lumber and paper shipments.

Operating revenues from agricultural products were $1.5 billion in the first ~~six months~~quarter of ~~2022 as~~2023, an 8.8% increase compared to ~~2021.~~2022, reflecting higher average revenue per car/unit, partially offset by a 1.6% decrease in volumes. The volume ~~decreases were~~decrease was primarily due to lower grain exports, partially offset by higher volumes of domestic grains, renewable diesel and ~~oil~~ feedstocks.

Operating revenues from coal were $1.0 billion in the ~~second~~first quarter ~~and $1.9 billion in the first six months~~ of ~~2022, increases of 30.2% and 29.9%, respectively,~~2023, a 15.7% increase from ~~2021.~~2022. The ~~increases were primarily~~increase was attributable to higher average revenue per car/~~unit. Volumes decreased 2.9% in the second quarter primarily~~unit, partially offset by lower volumes of 4.2%. The volume decrease derived from weather related impacts and moderating demand due to ~~network challenges, while volumes increased 5.0% in the first six months of 2022 due to increased electricity generation, higher~~lower natural gas ~~prices and improved export demand.~~prices.

Railroad operating expenses were ~~$4.1 billion in the second quarter and $7.8~~$4.0 billion in the first ~~six months~~quarter of ~~2022, increases~~2023, an increase of ~~$687~~$292 million ~~(20.3%~~(7.8%) ~~and $1.1 billion (16.3%), respectively,~~ compared to ~~2021,~~2022. The increase was primarily due to ~~significant~~ increases in the cost of fuel, as well as higher compensation and benefits expenses. Our ratio of railroad operating expenses to railroad operating revenues in the first quarter of 2023 increased ~~2.8~~3.8 percentage points to ~~63.2% in the second quarter and 1.9 percentage points to 63.9% in the first six months of 2022~~68.4% versus ~~the comparable 2021 periods.~~2022.

Compensation and benefits expenses increased ~~$68~~$89 million ~~(5.9%) in the second quarter and $128 million (5.5%~~(7.3%) in the first ~~six months~~quarter of ~~2022~~2023 compared to ~~2021,~~2022, primarily due to increased headcount, wage inflation, ~~health and welfare costs~~ and lower productivity. Fuel expenses increased ~~$583~~$103 million ~~(84.1%) in the second quarter and $894 million (71.9%~~(12.0%) in the first ~~six months~~quarter of ~~2022~~2023 compared to ~~2021,~~2022, primarily due to higher average fuel prices, partially offset by lower volumes. Purchased services expenses increased $12 million (2.4%) in the first quarter of 2023 compared to 2022, primarily due to general inflation. Equipment rents, materials and other expenses increased $67 million (12.7%) in the first quarter of 2023 compared to 2022. The increase was primarily due to general inflation, increased casualty and litigation costs and higher property and other miscellaneous taxes.

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

We currently own 92% of Berkshire Hathaway Energy Company (“BHE”), which operates a global energy business. BHE’s domestic regulated utility interests include PacifiCorp, MidAmerican Energy Company (“MEC”) and NV Energy. ~~BHE subsidiaries also operate two regulated electricity distribution businesses referred to as Northern 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. Other energy businesses include two regulated electricity distribution businesses operated by BHE subsidiaries (referred to as Northern Powergrid) in Great Britain, a regulated electricity transmission-only business in Alberta, Canada (“AltaLink, L.P.”) ~~and~~, a diversified portfolio of mostly renewable independent power projects and ~~investments.~~investments and an unregulated retail energy services company. BHE also operates a residential real estate brokerage business and a large network of ~~residential~~ real estate brokerage franchises in the United States.

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).

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 (dollars in millions).

~~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 decreased $143 million in the second quarter and $182 million in the first six months of 2022 as compared to 2021. The decreases reflected higher operating expenses and lower income tax benefits mainly from lower production tax credits recognized, partially offset by slight increases in utility margin (operating revenue less cost of sales). The increases in operating expenses reflected higher costs associated with wildfires, higher general and plant maintenance costs and incremental costs from additional assets placed in-service.

PacifiCorp’s utility margin was $863 million in the second quarter and $1.7 billion in the first six months of 2022, increases of $6 million and $20 million, respectively, from the comparable periods in 2021. The increases reflected higher operating revenue from favorable retail and wholesale pricing, partially offset by lower operating revenue from decreases in retail customer volumes and higher thermal generation costs. Retail customer volumes decreased 3.3% in the second quarter and 0.7% in the first six months of 2022 compared to 2021, primarily due to 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 decreased $7 million in the second quarter and increased $90 million in the first six months of 2022 compared to 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 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. The income tax benefit 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 $551 million in the second quarter and $1.0 billion in the first six months of 2022, increases of 14% and 18%, respectively, versus 2021. The increases were attributable to higher operating revenue from increased retail and wholesale customer volumes and favorable wholesale pricing, partially offset by higher purchased power costs. Electric retail customer volumes increased 3.3% in the second quarter and 4.4% in the first six months of 2022 as compared to 2021, primarily due to higher customer usage and the favorable impact of weather.

NV Energy operates regulated electric and natural gas utilities in Nevada. After-tax earnings decreased $7 million in the second quarter and $12 million in the first six months of 2022 compared to 2021. The decreases reflected higher operating expenses from increased plant operations and maintenance expenses, higher comparative accruals for earnings sharing and incremental costs from additional assets placed in-service.

NV Energy’s electric utility margin was $404 million in the second quarter and $710 million in the first six months of 2022, relatively unchanged compared to 2021. Electric retail customer volumes increased 0.4% in the second quarter and 2.0% in the first six months of 2022 compared to 2021, primarily due to an increase in the average number of customers and higher customer usage, partially offset by the unfavorable impact of weather.

Northern Powergrid’s after-tax earnings increased $96 million in the second quarter and $103 million in the first six months of 2022 as compared to 2021, reflecting the impact on deferred income taxes in 2021 from an increase in the United Kingdom income tax rate, partially offset by unfavorable foreign currency exchange rate movements in 2022. Earnings in 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.

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

Other energy businesses’ after-tax earnings increased $81 million in the second quarter and $192 million in the first six months of 2022 compared to 2021. The increases in earnings were primarily due to increased wind tax equity investment earnings of $40 million 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 increases in wind tax equity investment earnings 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

~~Corporate interest~~Our U.S. utilities operate in several states, including Utah, Oregon and ~~other after-tax losses increased $41 million in the second quarter~~Wyoming (PacifiCorp), Iowa and ~~$34~~Illinois (MEC) and Nevada (NV Energy). After-tax earnings decreased $237 million in the first ~~six months~~quarter of ~~2022~~2023 compared to ~~2021, reflecting lower federal income tax credits recognized,~~2022. The earnings decrease reflected higher operating expenses, partially offset by higher ~~earnings~~electric utility margin (operating revenue less cost of sales), higher other income and lower state income taxes. Operating expenses increased primarily due to a pre-tax increase of $359 million in loss accruals (net of expected insurance recoveries) associated with the 2020 wildfires, as well as from ~~non-regulated energy services~~increases in general and plant maintenance costs.

The U.S. utilities’ electric utility margin was $1.7 billion in the first quarter of 2023, an increase of $62 million (3.8%) compared to the first quarter of 2022. The increase reflected higher operating revenue from favorable retail and wholesale pricing and increases in retail customer volumes, partially offset by increases in thermal generation and purchased power costs and lower wholesale volumes. Retail customer volumes increased 2.6% (3.3% at PacifiCorp, 1.0% at MEC and 2.9% at NV Energy) in the first quarter of 2023 compared to the first quarter of 2022, primarily due to increases in customer usage and in the average number of customers.

After-tax earnings of natural gas pipelines increased $47 million in the first quarter of 2023 compared to the first quarter of 2022. The increase was primarily due to higher regulated transportation and storage services revenues from certain general rate cases.

After-tax earnings of other energy businesses decreased $156 million in the first quarter of 2023 compared to the first quarter of 2022. The decrease was primarily due to a deferred income tax charge of $82 million recognized in March 2023 related to the enactment of a new Energy Profits Levy income tax in the United Kingdom, lower earnings from changes in unrealized positions on derivative contracts and unfavorable results from natural gas, solar and geothermal generating facilities due to increased maintenance costs and lower solar generation due to weather events in California. Partially offsetting these earnings decreases were increased wind tax equity investment earnings of $36 million.

After-tax earnings of real estate brokerage decreased $55 million in the first quarter of 2023 compared to the first quarter of 2022. The decrease reflected lower brokerage services revenues and margins, primarily due to a 29% reduction in closed brokerage transaction volumes, as well as lower mortgage services revenues and margins from a 41% decrease in closed transaction volumes, attributable to the impact of rising interest rates and a corresponding slowdown in home sales.

On January 31, 2023, we acquired an additional 41.4% interest in Pilot Travel Centers, LLC (“Pilot”), and we currently own an 80% controlling interest. Thus, we began consolidating Pilot’s results of operations in our Consolidated Statements of Earnings on February 1, 2023. Through January 31, 2023, we owned a 38.6% interest in Pilot, which we accounted for under the equity method. Our proportionate share of Pilot’s net earnings for the month ending January 31, 2023 and first quarter 2022 are included in equity method earnings in the accompanying Consolidated Statements of Earnings.

Pilot is headquartered in Knoxville, Tennessee and operates travel centers in North America (primarily under the names Pilot or Flying J) with more than 650 travel center locations across the U.S. and in six ~~months.~~Canadian provinces. Pilot also has over 150 retail locations in the U.S. and Canada where it sells diesel fuel through various arrangements with third party travel centers. A substantial portion of Pilot’s revenues and earnings derive from marketing fuel on a wholesale and retail basis and from other energy-related activities.

Our earnings from Pilot for the two months ending March 31, 2023 are summarized below (in millions).

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

Pilot’s revenues and earnings are highly dependent on fuel, prices and margins. Revenues for the two months ending March 31, 2023 were $9.5 billion. Revenues for the first three months of 2023 and 2022 were approximately $14.5 billion and $13.9 billion, respectively. For the first quarter of 2023, Pilot sold approximately 4.7 billion gallons of diesel fuel, gasoline and other fuel-related products.

Pilot’s pre-tax earnings for the two months ending March 31, 2023 were $136 million. Operating and other expenses included depreciation and amortization expense of $168 million, a significant portion of which derived from depreciation of property, plant and equipment assets and amortization of intangible assets that were remeasured to fair value in connection with the application of the acquisition accounting method in 2023. Fuel prices and margins were elevated in 2022 and remained elevated during the first quarter of 2023.

Pilot’s consolidated pre-tax earnings for the three months ending March 31, 2023 and 2022 are summarized below. Revenues, costs and expenses for the first quarter of 2022 and first month of 2023 are based on Pilot’s historical accounting and are not included in our Consolidated Financial Statements, whereas such information for the two months ending March 31, 2023 was included in our Consolidated Financial Statements. Dollars are in millions.

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

* Excludes certain acquisition accounting expenses, primarily related to the amortization of identifiable intangible assets recorded in connection with our business acquisitions. The after-tax acquisition accounting expenses excluded from earnings were $202 million in the first quarter of 2023 and $161 million in the first quarter of 2022. These expenses are included in “Other” in the summary of earnings on page 28 and in the “Other” earnings section on page 44.

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 these operations follows (dollars in millions).

~~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”)), metal cutting tools/systems (IMC International Metalworking Companies (“IMC”)) and Marmon, which consists of more than 100 autonomous manufacturing and service businesses, internally aggregated into eleven groups, and includes leasing for the rail, intermodal tank container and mobile crane 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). Beginning October 19, 2022, this group also includes businesses acquired in connection with Alleghany consisting of the structural steel fabrication products business conducted through W&W|AFCO Steel, as well as other businesses that became part of Marmon.

Revenues of the industrial products group increased ~~$528 million (7.3%) in the second quarter and $1.3~~$1.4 billion ~~(9.6%~~(18.6%) in the first ~~six months~~quarter of ~~2022~~2023 compared to ~~2021. Pre-tax~~2022 and pre-tax earnings increased ~~$28~~$225 million ~~(2.3%~~(18.5%) ~~in the second quarter and $102 million (4.3%) in the first six months of 2022 compared to 2021.~~. Pre-tax earnings as a percentage of revenues for the group were ~~16.4%~~16.3% for the first ~~six months~~quarters of ~~2022, a decrease of 0.8 percentage points compared to 2021. Operating results in 2022 were negatively affected by a combination of higher materials~~2023 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.2022. Operating results of ~~this group’s international businesses were also negatively impacted~~the group in ~~2022 by~~ the ~~stronger U.S. Dollar.~~first quarter of 2023 reflected the impact of business acquisitions and overall improved operating results at our pre-existing businesses.

PCC’s revenues were ~~$1.8 billion in the second quarter and $3.6~~$2.25 billion in the first ~~six months~~quarter of ~~2022, increases~~2023, an increase of ~~13.3% in the second quarter and 13.0% in the first six months~~28.1% compared to ~~2021.~~2022. PCC derives significant revenues and earnings from sales of aerospace products. The revenue ~~increases~~increase in ~~2022 were~~2023 was primarily attributable to higher demand for aerospace products, while power/energy and general and industrial products also contributed 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.~~overall revenue increase. 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 Boeing 787 program, as it works through production quality issues.

PCC’s pre-tax earnings increased ~~$7 million in the second quarter and $24 million~~23.0% in the first ~~six months~~quarter of ~~2022~~2023 compared to ~~2021, reflecting the impact of increased revenues, substantially offset by a year-to-date reduction~~2022. Results in ~~pension plan income of $29 million, materials~~2023 reflected improving manufacturing and ~~utilities cost inflation and manufacturing inefficiencies attributable~~operating efficiencies. We are continuing to ~~worker shortages. PCC management continues to take actions~~strive to improve ~~operations,~~manufacturing efficiencies, maintain safety and prepare for ~~increased~~increasing demand for PCC’s products. ~~Growth~~Continued growth in PCC’s revenues and earnings will be predicated on the ability to successfully increase production levels to match the ~~significant~~expected growth in aerospace ~~demand, as well as resolution of the quality issues associated with the Boeing 787.~~products demand.

Lubrizol’s revenues were approximately $1.7 billion in the ~~second~~first quarter ~~and $3.4 billion in the first six months~~ of ~~2022, increases~~2023, an increase of ~~3.5% in the second quarter and 0.5% in the first six months~~5.2% compared to ~~2021.~~2022. The revenue ~~increases~~increase reflected higher average selling prices, partially offset by lower ~~volumes. Sales~~ volumes ~~through~~and unfavorable foreign currency translation effects from the stronger U.S. Dollar. Lower sales volumes in the first ~~half~~quarter of ~~2022~~2023 were ~~restricted by raw material supply constraints and unplanned temporary maintenance shutdowns, which limited Lubrizol’s production capabilities. The increase~~attributable to general market weakness in ~~average selling prices was due to escalating prices for raw materials, including oil feedstocks, as well as for utilities, packaging, shipping and freight costs.~~the global economy, resulting in lower demand in certain product lines.

Lubrizol’s pre-tax earnings increased 60.2% in the second quarter and were relatively unchanged in the first six months of 2022 compared to 2021. Earnings in the 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 impacted by the weather-related temporary shut-down of Additives facilities in the U.S.34.7% in the first quarter ~~which resulted in lost sales and various incremental and non-recurring manufacturing and other operating costs.~~of 2023 compared to 2022. Earnings in ~~2022 included a comparative increase in insurance recoveries in connection with fires at facilities in 2021 and 2020 and~~2023 were ~~negatively~~favorably impacted by ~~rising~~higher selling prices and favorable product mix, partially offset by the continued rise of raw material costs, lower sales volumes, higher operating expenses, and ~~higher expenses from the unplanned temporary shutdowns, partially offset by higher selling prices.~~unfavorable foreign currency translation effects.

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

Marmon’s revenues were ~~$2.8 billion in the second quarter and $5.4~~$3.1 billion in the first ~~six months~~quarter of ~~2022, increases~~2023, an increase of ~~10.3% in the second quarter and 17.5% in the first six months~~16.4% compared to ~~2021. The Transportation, Metal~~2022. Business acquisitions including AP Emissions Technologies and three former Alleghany businesses: Kentucky Trailer, Wilbert Funeral Services, ~~Retail~~Inc. and ~~Electrical~~Wilbert Plastics Services, accounted for nearly 70% of the growth. Nearly all of Marmon’s business groups generated higher revenues in 2023, led by significant ~~revenue~~ increases in the first six months of 2022, primarily attributable to higher volumes and average metals prices. These groups contributed approximately 70% of Marmon’s aggregate revenue increase in the first six months.

Marmon’s pre-tax earnings decreased 5.8% in the second quarter and 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 related to the shutdown of its business in Russia. In the first six months of 2022, the~~ Transportation, Metal Services ~~Retail, Electrical~~ and ~~Industrial Products~~Crane groups, ~~contributed meaningful increases in earnings,~~ due to ~~a combination of~~ higher ~~sales~~ volumes and ~~margins~~pricing improvements. Our Electrical, Metal Services and ~~ongoing cost management, partially~~Plumbing & Refrigeration groups faced headwinds in revenue in 2023 attributed to lower steel and copper prices and slowing residential construction activity. Our international businesses were challenged by foreign currency translations as a result of the stronger U.S. Dollar.

Marmon’s pre-tax earnings in the first quarter of 2023 increased 13.5% compared to 2022, with business acquisitions accounting for 27% of the increase. Most of Marmon’s business groups generated higher comparative first quarter earnings in 2023, led by the Transportation group, as well as from the Water Technologies, Retail Solutions, Metals Services and Crane Services groups, primarily attributable to revenue growth. The first quarter earnings increase was partly offset by lower earnings ~~from~~in the Electrical group driven by falling demand and compressing margins in the building wire business and the Rail & Leasing ~~group.~~group attributable to higher repair costs and lower railcar disposal gains.

IMC’s revenues were ~~$930 million in the second quarter and $1.9~~$1.0 billion in the first ~~six months~~quarter of ~~2022, increases~~2023, an increase of ~~1.7% in the second quarter and 5.0% in the first six months~~5.2% compared to ~~2021.~~2022. Revenues in ~~2022~~2023 reflected increased organic sales in ~~several geographic regions,~~North America and from business acquisitions, partially offset by lower revenues in Asia, ~~and~~ unfavorable foreign currency translation ~~effects.~~from a stronger U.S. Dollar and the impact of the Russia-Ukraine conflict. IMC’s pre-tax earnings ~~decreased 9.6% in the second quarter and 1.0%~~increased 3.5% in the first ~~six months~~quarter of ~~2022~~2023 compared to ~~2021, as the revenue increases were more than~~2022. The impact of higher revenues was partially offset by higher raw material costs, changes in sales mix and ~~unfavorable foreign currency translation effects.~~the impact of the Russia-Ukraine conflict.

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 $1.3 billion (20.4%) in the second quarter and $2.4 billion (19.9%~~decreased $702 million (10.5%) in the first ~~six months~~quarter of ~~2022~~2023 and pre-tax earnings ~~increased $334~~decreased $249 million ~~(34.3%~~(21.8%) ~~in the second quarter and $708 million (40.6%) in the first six months of 2022~~ compared to ~~2021. Residential~~2022. Our building products businesses have benefited in recent years from the low interest rate environment and strong residential and commercial construction markets. The effects of significant increases in interest rates, including home ~~construction in the U.S. continued to be relatively strong throughout the first half of 2022. During the first half of 2022,~~mortgage interest rates in the U.S. ~~increased significantly compared to~~over the ~~previous low-rate environment. The increases in home mortgage interest rates will very likely slow~~past year, has slowed demand for ~~new~~our home ~~construction, which could adversely impact~~building businesses and certain of our other building products businesses. ~~We also continue~~As such, our businesses are likely to ~~be negatively affected by persistent supply chain disruptions~~experience declines in comparative revenues and ~~significant cost increases for many raw materials and other inputs, including energy, freight and labor.~~earnings over the remainder of 2023.

Clayton Homes’ revenues ~~increased 28.1%~~decreased 10.7% to ~~$3.4 billion in the second quarter and 25.0% to $6.2~~$2.5 billion in the first ~~six months~~quarter of ~~2022~~2023 compared to ~~2021.~~2022. Revenues from home sales ~~increased $1.2 billion (30.5%~~decreased $353 million (15.8%) in the first ~~six months~~quarter of ~~2022, primarily due to~~2023, reflecting lower unit sales partially offset by higher average selling ~~prices and increased volume.~~prices. New home unit sales ~~also increased 9.8%~~decreased 18.0% in the first ~~six months~~quarter of ~~2022, reflecting an 11.3% increase~~2023, including a 16.9% decrease in ~~higher~~ factory-built manufactured ~~home unit sales~~homes and a ~~3.1% increase~~23.1% decrease in site-built home unit sales. We expect unit sales will continue to remain below 2022 in the near term. Financial services revenues, which include mortgage origination and services, insurance and interest income from lending activities, increased ~~4.3%~~8.8% in the first ~~six months~~quarter of ~~2022~~2023 compared to ~~2021.~~2022. Loan balances, net of allowances for credit losses, were approximately ~~$20.0~~$21.8 billion as of ~~June 30, 2022,~~March 31, 2023, an increase of ~~approximately $1.2 billion~~2.3% from December 31, ~~2021.~~2022.

Pre-tax earnings of Clayton Homes ~~increased $168~~decreased $78 million ~~(36.9%) in the second quarter and $262 million (30.9%~~(16.1%) in the first ~~six months of 2022~~quarter 2023 compared to ~~2021.~~2022, primarily attributable to lower sales volumes. Earnings from financial services declined 9.3% in the first quarter of 2023 versus 2022, ~~reflected~~reflecting increased expected loan loss provisions and higher ~~home sales, gross margins~~operating and ~~net~~ interest ~~income and relatively low credit losses.~~expenses.

Aggregate revenues of our other building products businesses were approximately ~~$4.3 billion in the second quarter and $8.2~~$3.5 billion in the first ~~six months~~quarter of ~~2022, increases~~2023, a decrease of ~~$555~~$401 million ~~(14.9%~~(10.3%) ~~in the second quarter and $1.1 billion (16.3%) in the first six months~~ versus ~~2021. The increases~~2022. Comparative revenues were ~~primarily~~lower at all our other building products businesses, generally due to lower sales volumes, partly offset by higher average ~~selling prices driven by higher input and transportation costs, and to a lesser extent, from higher unit volumes and product mix changes.~~prices.

Pre-tax earnings of our other building products businesses ~~increased $166~~decreased $170 million ~~(32.1%) in the second quarter and $446 million (49.8%~~(25.8%) in the first ~~six months~~quarter of ~~2022~~2023 compared to ~~2021.~~2022. Earnings as a percentage of revenues in the first ~~six months~~quarter of ~~2022 increased 3.7~~2023 decreased 2.9 percentage points versus ~~2021. Year-to-date earnings~~2022. Earnings in 2023 at certain of our businesses were negatively impacted by lower sales and reduced gross sales margins. Earnings in 2022 benefitted from ~~an increase~~higher selling prices and strong demand in certain product categories, as well as a pre-tax ~~gains~~gain from a business divestiture ~~and 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.$94 million.

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

The consumer products group includes ~~leisure~~recreational 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). and beginning October 19, 2022, Jazwares, LLC (Jazwares), a global toy company acquired in connection with the Alleghany acquisition.

Consumer products group revenues ~~increased approximately $524~~decreased $818 million ~~(13.7%) in the second quarter and $1.1 billion (15.4%~~(19.3%) in the first ~~six months~~quarter of ~~2022~~2023 compared to ~~2021, reflecting higher~~2022. The decline reflected lower revenues ~~from~~at Forest River and ~~lower revenues from~~certain of our apparel and footwear ~~businesses.~~ operations, partially offset by the impact of the Jazwares acquisition.

Forest River’s revenues ~~increased 34.1% in the second quarter and 37.0%~~declined 38.6% in the first ~~six months~~quarter of ~~2022~~2023 compared to ~~2021, driven by higher average selling prices and a 5.3% year-to-date increase~~2022, reflecting an overall 44% decline in unit sales. Forest River experienced ~~exceptional~~strong unit sales ~~growth~~ in recent years ~~however there are signs~~and through the first half of ~~slowing demand which could reverse that trend.~~ 2022. Since then, volumes have declined, attributable in part to the impact of rising interest rates, inflation and other macroeconomic conditions.

Revenues of our apparel and footwear businesses declined ~~$93~~$68 million ~~(7.2%) in the second quarter and $137 million (5.4%~~(5.7%) in the first ~~six months~~quarter of ~~2022~~2023 compared to ~~2021,~~2022, reflecting lower revenues from apparel ~~(15.5% in the second quarter and 10.1% in the first six months)~~(12.1%), partly offset by higher revenues from footwear. The ~~declines~~decline in apparel ~~revenues were~~revenue was driven by lower ~~volumes,~~volume, as ~~retail customers reduced orders~~order delays and cancellations persisted in response to ~~rising inventories.~~the elevated inventory levels of retail business customers. Duracell’s revenues in first quarter of 2023 declined 4.5% versus 2022, primarily due to lower volume and unfavorable foreign currency translation effects of the stronger U.S. Dollar.

Pre-tax earnings of our consumer products group declined ~~$48~~$189 million ~~(9.6%) in the second quarter and $108 million (10.6%~~(40.7%) in the first ~~six months~~quarter of 2023 versus 2022, ~~versus 2021.~~primarily attributable to lower earnings from Forest River and the apparel and footwear businesses. Pre-tax earnings as a percentage of revenues decreased ~~3.1~~2.9 percentage points in the first ~~six months~~quarter of ~~2022~~2023 compared to 2021. The declines in earnings in 2022 reflected lower aggregate earnings from 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. 2022.

Apparel and footwear earnings declined ~~about 50% in the second quarter and~~18% in the first ~~half~~quarter of ~~2022~~2023 compared to ~~2021.~~2022. Our apparel businesses ~~were~~continue to be negatively ~~impacted~~affected by lower sales volumes, reduced manufacturing efficiencies and higher ~~input costs, including raw material, freight, labor and other operating~~manufacturing costs. ~~While supply chain restrictions eased somewhat in the second quarter of 2022, we~~We expect that ~~the~~comparative operating earnings of these businesses ~~for the remainder of 2022~~ will be ~~likely~~ lower in the near term.

Earnings from Forest River declined 57%, primarily due to ~~slowing~~the decrease in unit sales, which reduced manufacturing efficiencies, and from unfavorable changes in product mix. We currently expect demand for recreational vehicles will remain relatively low and ~~high costs.~~Forest River’s earnings in the near term to decline versus 2022.

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

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

Our service group consists of several businesses. The largest of these businesses are NetJets and FlightSafety (aviation services), which offer shared ownership programs for general aviation aircraft and high technology training ~~products~~services and ~~services~~products to operators of aircraft, 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 furniture (CORT), provide third party logistics services that primarily serve the petroleum and chemical industries (Charter Brokerage), distribute electronic news, multimedia and regulatory filings (Business Wire) and operate a television station in Miami, Florida (WPLG).

~~Item 2. Management’s Discussion and Analysis~~ Beginning October 19, 2022, this group includes IPS Integrated Project Services, LLC (IPS), a provider of ~~Financial Condition and Results of Operations~~various services in facilities construction management.

Service group revenues increased ~~$755~~$796 million ~~(19.0%) in the second quarter and $1.7 billion (22.1%~~(17.6%) in the first ~~six months~~quarter of ~~2022~~2023 compared to ~~2021.~~2022. The increase was primarily due to increased revenues from aviation services, the impact of the IPS acquisition ($302 million), and increased revenues from TTI. Revenues ~~from~~of TTI increased ~~16.3% in the second quarter and 22.3%~~5.8% in the first ~~six months~~quarter of 2023 compared to 2022. TTI sales levels during 2022 were relatively strong. However, beginning in the third quarter of 2022, ~~versus 2021, reflecting strong demand~~new orders slowed in ~~nearly all significant markets. During the second quarter, we saw signs that growth is beginning to decelerate,~~certain regions and markets, in part attributable to ~~higher~~elevated inventory levels within the supply chain. These conditions are expected to continue in 2023 and we may experience comparative revenue declines in future periods. Revenues from aviation services ~~(NetJets and FlightSafety)~~ increased ~~22.6% in the second quarter and 23.0%~~18.8% in the first ~~six months~~quarter of ~~2022~~2023 compared to ~~2021.~~2022. The ~~increases reflected year-to-date~~revenue increase was primarily due to increases in ~~training hours (29%), customer~~the number of aircraft in shared aircraft ownership programs and in flight hours ~~(25%) and fuel surcharges to customers due to significant increases in fuel prices, partially offset by the effects from changes in sales mix.~~across NetJets’ various programs, as well as higher average rates.

Pre-tax earnings of the service group increased ~~$29~~$113 million ~~(4.0%) in the second quarter and $163 million (12.4%~~(15.6%) in the first ~~six months~~quarter of ~~2022~~2023 compared to ~~2021.~~2022. Pre-tax earnings as a percentage of revenues decreased ~~1.4~~0.3 percentage points in the first ~~six months~~quarter of ~~2022~~2023 compared to ~~2021.~~2022. The ~~increases in~~ earnings ~~reflected increases from TTI and CORT and decreases from aviation services. The increases in earnings from TTI were~~increase was primarily attributable to ~~the increases~~higher overall margin rates in ~~sales and improved operating cost leverage. The decreases in earnings from~~ aviation services ~~were attributable~~businesses, primarily due to changes in business mix, and to the ~~need to utilize more subcontracted aircraft due to~~impact of the ~~exceptional increase in customer flight hours, and from higher equipment maintenance and other operating costs, which more than offset the increases in revenues.~~IPS acquisition.

Our largest retailing business is Berkshire Hathaway Automotive, Inc. (“BHA”), representing ~~65%~~67% of our combined retailing revenue in the first ~~six months~~quarter of ~~2022.~~2023. BHA consists of over 80 auto dealerships that sell new and pre-owned automobiles and offer repair services and related products. BHA also offers vehicle service contracts and operates two insurance ~~businesses, two auto auctions and an automotive fluid maintenance products distributor.~~businesses. 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. The home furnishings group represented ~~20%~~18% of the combined retailing revenues in the first ~~six months~~quarter of ~~2022.~~2023.

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 retailer of motorcycle accessories based in Germany.

Retailing group revenues decreased $115 million (2.3%) in the second quarter and increased $124 million (1.3%) in the first six months of 2022 compared to 2021. BHA’s revenues in the second quarter declined 1.0% and increased 3.8% in the first six months of 2022 compared to the same periods in 2021. BHA’s revenues from new and used vehicle sales decreased 2.7% in the second quarter and increased 2.8% in the first six months 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 ongoing global computer chip shortages and other supply chain disruptions. Home furnishings group revenues were relatively unchanged in the ~~second~~first quarter ~~and~~of 2023 compared to 2022, reflecting an increase at BHA, offset by lower revenues from our other retailers. BHA’s revenues in the first ~~six months~~quarter of ~~2022~~2023 increased 3.6% compared to ~~2021, as higher average selling prices were substantially offset by~~2022. Revenues from new vehicle sales increased 6.9% in the first quarter of 2023 compared to 2022 while revenues from pre-owned vehicle sales declined 4.0%. Unit sales in the first quarter of 2023 increased 0.9%, primarily from new vehicles. While new vehicle levels remain well below historical levels, supplies continue to gradually increase. Revenues from BHA’s service/repair operations in the first quarter of 2023 increased 11.1% versus 2022. Other retailing revenues declined 5.5% in the first quarter of 2023 versus 2022, primarily due to lower ~~transaction volumes.~~sales volumes at our home furnishings businesses.

Retailing group pre-tax earnings decreased ~~$16~~$27 million ~~(3.5%) in the second quarter and increased $47 million (5.8%~~(6.6%) in the first ~~six months~~quarter of ~~2022~~2023 compared to ~~2021.~~2022. BHA’s pre-tax earnings increased ~~17.2% in the second quarter and 21.7%~~30.9% in the first ~~six months~~quarter of ~~2022~~2023 compared to ~~2021, primarily due to increases in~~2022. BHA’s earnings increase reflected higher earnings from service/repair and finance/service contract operations and lower operating expenses, partially offset by lower vehicle ~~gross profit~~sales margins and ~~finance and service contract earnings per vehicle sold and from operating cost control efforts. Over the remainder of 2022,~~higher floor plan interest expense. BHA’s comparative ~~new~~ vehicle gross profit margin rates, ~~may decline compared to 2021, as~~before the ~~current environment~~effects of ~~elevated margins began during~~LIFO, peaked in the ~~second~~first half of ~~2021.~~2022 and have since declined. Aggregate pre-tax earnings for the remainder of our retailing group decreased ~~$52~~$91 million ~~(20.8%) in the second quarter and $35 million (8.0%~~(45.1%) in the first ~~six months~~quarter of ~~2022~~2023 compared to ~~2021,~~2022, primarily due to ~~declining~~a 49.6% decrease in earnings from the ~~furniture retailers~~home furnishings businesses, and ~~Pampered Chef.~~the impact of a gain in 2022 related to the divestiture of certain jewelry stores.

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

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.~~margins and operate in a highly competitive environment. These businesses have several significant customers, including Walmart, 7-Eleven, Yum! Brands and others. Grocery sales comprised 61% of McLane’s consolidated sales in the first ~~six months~~quarter of ~~2022,~~2023, with foodservice 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.

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

Revenues increased ~~$967~~$544 million ~~(7.9%) in the second quarter and $1.9 billion (7.8%~~(4.3%) in the first ~~six months~~quarter of ~~2022~~2023 compared to ~~2021,~~2022, reflecting ~~increases in the first six months~~an increase of ~~2022 of 3.4%~~3.5% from the grocery business and ~~16.5%~~5.7% from the foodservice business. Pre-tax earnings ~~decreased $8~~increased $31 million ~~(9.5%) in the second quarter and $29 million (15.5%~~(37.8%) in the first ~~six months~~quarter of ~~2022~~2023 compared to ~~2021, primarily attributable to higher personnel costs, fuel expense and insurance costs,~~2022. The increase in earnings reflected a slight increase in the gross sales margin rate, partly offset by ~~increased gross sales margins. The increase in fuel expense was primarily~~higher personnel expenses.

After-tax earnings of our non-controlled businesses include our proportionate share of earnings attributable to ~~significant increases~~our investments in ~~petroleum prices. McLane’s grocery~~Kraft Heinz, Occidental Petroleum, Pilot and ~~food service operating results continue~~Berkadia. Earnings attributable to ~~be adversely affected by supply chain constraints, including~~these businesses increased $286 million in the ~~effects~~first quarter of ~~labor~~2023 versus 2022, primarily due to earnings from the inclusion of Occidental Petroleum in 2023. As of January 31, 2023, Berkshire acquired a controlling interest in Pilot. We applied the equity method through the end of January 2023 on our pre-existing 38.6% interest and ~~truck driver shortages~~began consolidating Pilot’s financial statements in our Consolidated Financial Statements on February 1, 2023. See Notes 3 and ~~higher inventory costs. We expect~~6 to the ~~current difficult operating environment to continue for the remainder of 2022.~~Consolidated Financial Statements.

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

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~~U.S.-based subsidiaries.

Pre-tax investment ~~gains/~~gains and losses in the first quarter included net unrealized gains of $31.3 billion in 2023 compared to net unrealized losses of ~~$66.9~~$1.8 billion in ~~the second quarter and $68.5 billion in the first six months of~~ 2022 ~~compared to net unrealized gains of $27.0 billion in the second quarter and $31.5 billion in the first six months of 2021~~ on securities we held at the end of the applicable period. Taxable investment ~~gains/~~gains and losses on equity securities sold is generally the difference between sales proceeds and the original cost of the securities sold. Sales of equity securities in the first quarter produced taxable gains of ~~$76 million~~$2.2 billion in ~~the second quarter and~~2023 compared to taxable losses of ~~$663~~$739 million in 2022. Pre-tax investment gains in the first ~~six months~~quarter of ~~2022 compared~~2023 included a non-cash gain of $3 billion related to ~~taxable gains~~the remeasurement of ~~$228 million~~our pre-existing interest in Pilot to fair value through the ~~second quarter and $2.0 billion in the first six months~~application of ~~2021.~~acquisition accounting upon attaining control of Pilot for financial reporting purposes.

We believe that investment ~~gains/~~gains and 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/~~gains and losses recorded in earnings in any given period has little analytical or predictive value.

Derivative contract ~~gains/~~gains and losses include the changes in fair value of our few remaining equity index put option contract ~~liabilities, which relate to contracts originated between 2004 and 2008.~~liabilities. The ~~gains and losses from the~~periodic changes in the fair values of these liabilities are recorded in ~~earnings~~earnings. Substantially all of our contracts have expired and ~~can be significant due~~our exposure to ~~the volatility of market prices~~loss in the related equity securities markets. As of June 30, 2022, the intrinsic value of our remaining equity index put option contracts was $179 million and our recorded liability at fair value was $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 in the contracts.future is insignificant.

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

After-tax equity method earnings include our proportionate share of earnings attributable to our investments in Kraft Heinz, Pilot, Berkadia, Electric Transmission of 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 and 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.

Foreign currency exchange rate gains and losses pertain to Berkshire’s and BHFC’s Euro, Great Britain Pound 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. Other ~~earnings/loss~~earnings consist primarily of Berkshire parent company investment income and corporate expenses, other intercompany interest income where the interest expense is included in earnings of the operating businesses and unallocated income taxes.

Our Consolidated Balance Sheet continues to reflect ~~very~~ significant liquidity and a very strong capital base. Our Consolidated shareholders’ equity ~~attributable to Berkshire shareholders~~ at ~~June 30, 2022~~March 31, 2023 was ~~$461.2~~$504.6 billion, ~~a decrease~~an increase of ~~$45.0~~$31.1 billion since December 31, ~~2021.~~2022. Net ~~loss~~earnings attributable to Berkshire shareholders was ~~$38.3~~$35.5 billion in the first ~~six months~~quarter of ~~2022,~~2023, which included after-tax ~~losses~~gains on our investments of ~~$54.4 billion, substantially all of which occurred in the second quarter.~~$27.4 billion. Investment gains and losses from changes in the market prices of our investments in equity securities 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 does not specify a maximum number of shares to be 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 ~~$4.2~~$4.4 billion in the first ~~six months~~quarter of ~~2022~~2023 to repurchase shares of its Class A and B common stock.

At ~~June 30, 2022,~~March 31, 2023, our insurance and other businesses held cash, cash equivalents and U.S. Treasury Bills of ~~$101.3~~$127.7 billion, which included ~~$76.1~~$106.9 billion in U.S. Treasury Bills. Investments in equity and fixed maturity securities (excluding our ~~investment~~investments in Kraft ~~Heinz)~~Heinz and Occidental common stock) were ~~$348.8~~$350.7 billion. During the first ~~six months~~quarter of ~~2022,~~2023, we paid cash of ~~$57.3~~$2.9 billion to acquire ~~equities~~equity securities and we received proceeds of ~~$12.0~~$13.3 billion from sales of equity securities. On January 31, 2023, we acquired an additional 41.4% interest in Pilot for approximately $8.2 billion.

Our consolidated borrowings at ~~June 30, 2022~~March 31, 2023 were ~~$119.1~~$123.6 billion, of which over 95% were by the Berkshire parent company, BHFC, BNSF, ~~and~~ BHE and its ~~subsidiaries.~~subsidiaries and Pilot. In the first ~~six months~~quarter of ~~2022, Berkshire and certain of its subsidiaries issued~~2023, we paid approximately $6.2 billion on maturing term debt ofand increased short-term borrowings by approximately ~~$10.2 billion in the aggregate.~~$1.1 billion.

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

Berkshire parent company outstanding debt at ~~June 30, 2022~~March 31, 2023 was ~~$20.1~~$17.5 billion, a decrease of ~~$1.3~~$3.9 billion since December 31, ~~2021. In January~~ 2022 ~~Berkshire repaid $600 million~~due to repayments of maturing ~~senior notes and~~debt during the first quarter. In April 2023, Berkshire issued ~~¥128.5~~¥164.4 billion (approximately ~~$1.1~~$1.2 billion) of senior notes ~~with maturity dates ranging from 2027 to 2052~~ and ~~a weighted average interest rate~~repaid ¥56.3 billion 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 maturities over the next twelve months approximate $4.3 billion, all of which is in the first six months of 2023.maturing notes.

~~Berkshire’s insurance and other subsidiary outstanding borrowings were $22.5 billion at June 30, 2022, which included senior~~Senior note borrowings of BHFC, a wholly-owned financing subsidiary, ofwere approximately $17.9 ~~billion.~~billion at March 31, 2023, substantially unchanged from December 31, 2022. 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 March 2022, BHFC issued $4.5 billion of senior notes with maturity dates ranging from 2027 to 2052 and a weighted average interest rate of 3.4% and issued €1.25 billion of senior notes maturing in 2030 and 2034 with a weighted average interest rate of 1.8%. Aggregate maturities of BHFC debt in the first six months of 2022 were $775 million. Berkshire guarantees BHFC’s senior notes for the full and timely payment of principal and interest.

BNSF’s outstanding debt was ~~$23.4~~$22.7 billion as of ~~June 30, 2022, an increase~~March 31, 2023, a decrease of ~~$157~~$705 million from December 31, ~~2021. In June 2022, BNSF issued $1.0 billion of 4.45% debentures due in 2053. During the first six months of 2022, BNSF repaid $800 million of term debt.~~2022. Outstanding borrowings of BHE and its subsidiaries were ~~$53.1~~$53.0 billion at ~~June 30, 2022,~~March 31, 2023, an increase of ~~$1.3 billion~~$215 million from December 31, 2021. In April 2022, BHE issued $1.0 billion of 4.6% senior notes due in 2053, and during the first six months of 2022, subsidiaries issued approximately $1.3 billion of term debt with a weighted average interest rate of 3.5% and maturity dates ranging from 2024 to 2052.2022. Aggregate debt maturities for BHE and BNSF over the next twelve months approximate ~~$2.6~~$3.9 billion. Borrowings of Pilot were $6.5 billion as of March 31,2023, of which $5.9 billion was outstanding as of the January 31, 2023 acquisition date. Berkshire does not guarantee the repayment of debt or other borrowings issued by BNSF, BHE, Pilot or any of their subsidiaries ~~and is not committed to provide capital to support BNSF, BHE~~ or ~~any of their subsidiaries.~~affiliates.

In the first ~~six months~~quarter of ~~2022,~~2023, our diverse group of businesses generated net operating cash flows of ~~approximately $15.4~~$8.7 billion. Our consolidated capital expenditures for property, plant and equipment and equipment held for lease were ~~$6.8~~$3.7 billion in the first ~~six months~~quarter of ~~2022,~~2023, which included capital expenditures by our railroad, utilities and energy businesses (BNSF, BHE and ~~BHE)~~Pilot) of ~~$4.8~~$2.6 billion. BNSF and BHE maintain very large investments in capital assets (property, plant and equipment) and will regularly make significant capital expenditures in the normal course of business. ~~We forecast additional~~Forecasted capital expenditures ~~of approximately $6.6 billion~~ for BHE and BNSF over the remainder of ~~2022.~~2023 approximate $11.7 billion.

On August 16, 2022, the Inflation Reduction Act of 2022 (“the 2022 act”) was signed into law. The 2022 act contains numerous provisions, including a 15% corporate alternative minimum income tax on “adjusted financial statement income”, expanded tax credits for clean energy incentives and a 1% excise tax on corporate stock repurchases. The provisions of the 2022 act become effective for tax years beginning after December 31, 2022. On December 27, 2022, the IRS and Department of Treasury issued initial guidance for taxpayers subject to the corporate alternative minimum tax. The guidance addresses several, but not all, issues that needed clarification. The IRS and Department of Treasury intend to release additional guidance in the future. We will continue to evaluate the impact of the 2022 act as more guidance becomes available. We currently do not expect a material impact on our Consolidated Financial Statements.

We are party to other contracts associated with ongoing business activities, which will result in cash payments to counterparties in future periods. Certain obligations are included in our Consolidated Balance Sheets, such as 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~~$143 billion at ~~June 30, 2022.~~March 31, 2023. However, the timing and amount of the payments under insurance and reinsurance contracts are contingent upon the outcome of future events. Actual payments will likely vary, perhaps materially, from any forecasted payments, as well as from the liabilities currently recorded in 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 Consolidated Financial Statements and will be recognized in future periods as the goods are delivered or services are provided. As of ~~June 30, 2022,~~March 31, 2023, the largest categories of our long-term contractual obligations primarily related to fuel, capacity, transmission and maintenance contracts and capital expenditure commitments of BHE and BNSF, ~~and~~ aircraft purchase commitments of ~~NetJets.~~NetJets and certain raw materials purchase commitments.

Item 2. Management’s Discussion and Analysis of ~~the outstanding shares~~Financial Condition and Results of Alleghany Corporation (“Alleghany”) common stock for cash consideration of approximately $11.6 billion, subject to Alleghany shareholder approval and receipt of various regulatory approvals. We currently anticipate this acquisition will close in the fourth quarter of 2022. We also have an agreement to acquire an additional 41.4% of Pilot in 2023 and agreements to acquire certain non-controlling interests of consolidated subsidiaries, which are described in Note 26 to the Consolidated Financial Statements included in Item 8 of Berkshire’s Annual Report on Form 10-K for the year ended December 31, 2021.Operations

Except as otherwise disclosed in this Quarterly Report, our contractual obligations as of ~~June 30, 2022~~March 31, 2023 were, in the aggregate, not materially different from those disclosed in “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, ~~2021.~~

~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations~~2022.

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, ~~2021.~~2022.

Our Consolidated Balance Sheet as of ~~June 30, 2022~~March 31, 2023 includes estimated liabilities of ~~$125.8~~$143 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 ~~June 30, 2022~~March 31, 2023 included goodwill of acquired businesses of ~~$73.6~~approximately $83 billion and indefinite-lived intangible assets of ~~$18.4 billion.~~$21 billion, which included $9.5 billion of goodwill associated with the Alleghany and Pilot acquisitions. We evaluate these assets for impairment at least annually and we conducted our most recent annual review during the fourth quarter of ~~2021.~~2022. In connection with ~~that~~the annual goodwill impairment review conducted in the fourth quarter of 2022, the estimated fair values of ~~five~~six 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~~Our estimated fair value of PCC was approximately ~~$34.5~~$31.5 billion, exceeding our carrying value of approximately ~~$31.1~~$30.3 billion by ~~10.7%~~4.0%. Our carrying value of PCC included goodwill of approximately $7.5 billion. For the ~~four~~five other reporting units, our aggregate estimated fair value was approximately ~~$2.5~~$4.5 billion, which exceeded our aggregate carrying value of approximately ~~$2.3~~$4.1 billion by ~~9.2%~~9.9%. Our carrying value of these units included goodwill of approximately ~~$1.2~~$1.4 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 ~~June 30, 2022,~~March 31, 2023, we concluded it is more likely than not that goodwill recorded in our Consolidated Balance Sheet was not impaired. The long-term adverse ~~effects~~consequences of the COVID-19 pandemic, geopolitical conflicts and general changes in business conditions 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 inherently subjective and will likely continue to be significantly affected by assumptions on the severity, duration or long-term effects of ~~the pandemic~~adverse events 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.

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 on Form 10-K for the year ended December 31, 2022 and in particular the “Market Risk Disclosures” included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” As of ~~June 30, 2022,~~March 31, 2023, 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, 2021.~~Report.

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 currently 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, ~~2021,~~2022, 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

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. Repurchases may be in the open market or through privately negotiated transactions. Information with respect to Berkshire’s Class A and Class B common stock repurchased during the ~~second~~first quarter of ~~2022~~2023 follows.

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.

~~None~~As disclosed in Notes 2 and 16 to the accompanying Consolidated Financial Statements included in this Form 10-Q, we adopted ASU 2018-12 on January 1, 2023 on the modified retrospective basis beginning as of the January 1, 2021 transition date. Most significantly, ASU 2018-12 changed the measurement of our long duration life, annuity and health insurance benefit liabilities, primarily attributable to changes in discount rate assumptions used in measuring such liabilities. ASU 2018-12 also made relatively minor modifications to the accounting for deferred policy acquisition cost amortization and changed the classification and measurement of certain market risk benefit liabilities, such as those related to variable annuity contracts.

A summary of the revisions to the affected balances included in our previously reported Consolidated Financial Statements for the years ended December 31, 2021 and 2022 and as of the January 1, 2021 transition date follows. Amounts are in millions, except per share amounts.

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 —	~~599,924~~ 585,848
Class B —	~~1,301,126,370~~ 1,295,970,861


		Page No.

Part I – Financial Information

Item 1. Financial Statements
	Consolidated Balance Sheets—~~June 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022	~~2-3~~2
	Consolidated Statements of Earnings—~~Second~~First Quarter 2023 and ~~First Six Months~~ 2022 ~~and 2021~~	4
	Consolidated Statements of Comprehensive Income—~~Second~~First Quarter 2023 and ~~First Six Months~~ 2022 ~~and 2021~~	5
	Consolidated Statements of Changes in Shareholders’ Equity—~~Second~~First Quarter 2023 and ~~First Six Months~~ 2022 ~~and 2021~~	5
	Consolidated Statements of Cash Flows—First ~~Six Months~~Quarter 2023 and 2022 ~~and 2021~~	6
	Notes to Consolidated Financial Statements	~~7-23~~7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	~~24-43~~28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4347
Item 4.	Controls and Procedures	4347

Part II – Other Information		47

Item 1.	Legal Proceedings	4347
Item 1A.	Risk Factors	4347
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds and Issuer Repurchases of Equity Securities	4448
Item 3.	Defaults Upon Senior Securities	4448
Item 4.	Mine Safety Disclosures	4448
Item 5.	Other Information	4448
Item 6.	Exhibits	4550

Signature		4550


	June 30, 2022			December 31, 2021			March 31, 2023			December 31, 2022
	(Unaudited)						(Unaudited)
LIABILITIES AND SHAREHOLDERS’ EQUITY
Insurance and Other:
Unpaid losses and loss adjustment expenses	$	88,560		$	86,664		$	107,957		$	107,472
Unpaid losses and loss adjustment expenses under retroactive reinsurance contracts		37,234			38,256			35,063			35,415
Unearned premiums		25,727			23,512			30,359			28,657
Life, annuity and health insurance benefits		22,562			22,452			19,937			19,753
Other policyholder liabilities		8,998			9,330			11,231			11,370
Accounts payable, accruals and other liabilities		31,387			30,376			32,842			33,201
Aircraft repurchase liabilities and unearned lease revenues		5,907			5,849			7,052			6,820
Notes payable and other borrowings		42,640			39,272			41,436			46,538
		263,015			255,711			285,877			289,226
Railroad, Utilities and Energy:
Accounts payable, accruals and other liabilities		16,193			15,696			19,683			16,615
Regulatory liabilities		7,290			7,214			6,858			7,369
Notes payable and other borrowings		76,441			74,990			82,188			76,206
		99,924			97,900			108,729			100,190
Income taxes, principally deferred		77,268			90,243			86,206			77,368
Total liabilities		440,207			443,854			480,812			466,784
Redeemable noncontrolling interests								3,183			—
Shareholders’ equity:
Common stock		8			8			8			8
Capital in excess of par value		35,204			35,592			35,156			35,167
Accumulated other comprehensive income		(6,175	)		(4,027	)		(4,976	)		(5,052	)
Retained earnings		496,126			534,421			546,631			511,127
Treasury stock, at cost		(63,934	)		(59,795	)		(72,265	)		(67,826	)
Berkshire Hathaway shareholders’ equity		461,229			506,199			504,554			473,424
Noncontrolling interests		8,424			8,731			8,523			8,257
Total shareholders’ equity		469,653			514,930			513,077			481,681
	$	909,860		$	958,784		$	997,072		$	948,465


	Pilot
Property, plant and equipment	$	8,136
Goodwill and other intangible assets		13,347
Other		6,934
Assets acquired	$	28,417
Notes payable	$	5,876
Other		4,789
Liabilities assumed		10,665
Noncontrolling interests, predominantly redeemable		3,370
Net assets	$	14,382


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


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

	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
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
Net earnings		—			—			11,711			—			129			11,840
Other comprehensive income, net		—			(327	)		—			—			7			(320	)
Acquisition of common stock		—			—			—			(6,565	)		—			(6,565	)
Transactions with noncontrolling interests		4			—			—			—			(119	)		(115	)
Balance at March 31, 2021	$	35,638		$	(4,570	)	$	456,337		$	(39,418	)	$	8,189		$	456,176
Net earnings		—			—			28,094			—			331			28,425
Other comprehensive income, net		—			351			—			—			7			358
Acquisition of common stock		—			—			—			(6,028	)		—			(6,028	)
Transactions with noncontrolling interests		5			—			—			—			(136	)		(131	)
Balance at June 30, 2021	$	35,643		$	(4,219	)	$	484,431		$	(45,446	)	$	8,391		$	478,800


	Alleghany
Cash, cash equivalents and U.S. Treasury Bills	$	3,762
Investments in fixed maturity and equity securities		15,982
Loans and other receivables		5,650
Goodwill and other intangible assets		6,559
Other		3,637
Assets acquired	$	35,590
Unpaid losses and loss adjustment expenses	$	15,080
Unearned premiums		3,536
Notes payable		2,169
Other		3,300
Liabilities assumed		24,085
Net assets	$	11,505


	March 31, 2022
Revenues	$	87,548
Net earnings attributable to Berkshire Hathaway shareholders		5,666
Net earnings per equivalent Class A common share		3,842

	Cost Basis		Net Unrealized Gains		Fair Value
June 30, 2022*
Banks, insurance and finance	$	36,837	$	39,655	$	76,492
Consumer products		41,785		118,294		160,079
Commercial, industrial and other		71,100		19,991		91,091
	$	149,722	$	177,940	$	327,662


	Carrying Value				Fair Value
	March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022
Kraft Heinz	$	13,033	$	12,937	$	12,585	$	13,249
Occidental		12,927		11,484		13,217		12,242
Other		443		3,629
	$	26,403	$	28,050


	Equity in Earnings				Distributions Received
	First Quarter				First Quarter
	2023		2022		2023		2022
Kraft Heinz	$	222	$	206	$	130	$	130
Occidental		370		—		25		—
Other		96		133		—		2
	$	688	$	339	$	155	$	132


	April 1, 2023		December 31, 2022
Assets	$	90,943	$	90,513
Liabilities		41,590		41,643


	Quarter ending December 31, 2022
Total revenues and other income	$	8,326
Net earnings attributable to Occidental common shareholders		1,727


	March 31, 2023			December 31, 2022
Loans and finance receivables before allowances and discounts	$	24,629		$	24,664
Allowances for credit losses		(876	)		(856	)
Unamortized acquisition discounts and points		(609	)		(600	)
	$	23,144		$	23,208


	Origination Year
	2023		2022		2021		2020		2019		Prior		Total
Performing	$	1,845	$	4,830	$	3,549	$	2,752	$	1,956	$	8,204	$	23,136
Non-performing		2		4		11		10		7		47		81
	$	1,847	$	4,834	$	3,560	$	2,762	$	1,963	$	8,251	$	23,217

	June 30, 2022						December 31, 2021
	Gross carrying amount		Accumulated amortization		Net carrying value		Gross carrying amount		Accumulated amortization		Net carrying value
Insurance and other:
Customer relationships	$	27,308	$	6,763	$	20,545	$	27,335	$	6,450	$	20,885
Trademarks and trade names		5,174		811		4,363		5,176		802		4,374
Patents and technology		4,846		3,598		1,248		4,763		3,484		1,279
Other		3,304		1,468		1,836		3,390		1,442		1,948
	$	40,632	$	12,640	$	27,992	$	40,664	$	12,178	$	28,486
Railroad, utilities and energy:
Customer relationships	$	678	$	412	$	266	$	678	$	396	$	282
Trademarks, trade names and other		1,014		168		846		1,015		146		869
	$	1,692	$	580	$	1,112	$	1,693	$	542	$	1,151

	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			1,559		1,100		—		11,637

Equity index put option contract liabilities:
2021		(1,065	)		710		—		—		(355	)

	Unrealized appreciation of fixed maturity securities, net			Foreign currency translation			Defined benefit pension plans			Other			Accumulated other comprehensive income
First six months of 2022
Balance at beginning of year	$	369		$	(4,092	)	$	(347	)	$	43		$	(4,027	)
Other comprehensive income, net		(352	)		(1,971	)		27			148			(2,148	)
Balance at end of period	$	17		$	(6,063	)	$	(320	)	$	191		$	(6,175	)

First six months of 2021
Balance at beginning of year	$	536		$	(3,082	)	$	(1,645	)	$	(52	)	$	(4,243	)
Other comprehensive income, net		(58	)		(1	)		73			10			24
Balance at end of period	$	478		$	(3,083	)	$	(1,572	)	$	(42	)	$	(4,219	)

	Second Quarter						First Six Months						Percentage Change
	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		228			158			392			317			44.3			23.7
Pre-tax net investment income		2,283			1,456			3,644			2,868			56.8			27.1
Income taxes and noncontrolling interests		377			237			568			441
Net investment income	$	1,906		$	1,219		$	3,076		$	2,427
Effective income tax rate		16.5	%		16.3	%		15.6	%		15.4	%


	First Quarter						Percentage
	2023			2022			Change
Dividend income	$	1,244		$	1,197			3.9	%
Interest and other investment income		1,141			164			595.7
Pre-tax net investment income		2,385			1,361			75.2
Income taxes and noncontrolling interests		416			191
Net investment income	$	1,969		$	1,170
Effective income tax rate		17.4	%		14.1	%


	Amortized Cost		Unrealized Gains (Losses)			Carrying Value		Amortized Cost		Unrealized Gains (Losses)			Carrying Value
U.S. Treasury, U.S. government corporations and agencies	$	8,884	$	(152	)	$	8,732	$	9,578	$	(182	)	$	9,396
Foreign governments		10,880		(107	)		10,773		11,106		(95	)		11,011
Corporate bonds		981		255			1,236		1,525		259			1,784
Other		260		27			287		228		19			247
	$	21,005	$	23		$	21,028	$	22,437	$	1		$	22,438


	Cars/Units								Percentage Change						Cars/Units
	Second Quarter				First Six Months				Second			First Six			First Quarter				Percentage
	2022		2021		2022		2021		Quarter			Months			2023		2022		Change
Consumer products		1,379		1,489		2,654		2,882		(7.4	)%		(7.9	)%		1,066		1,275		(16.4	)%
Industrial products		421		438		824		837		(3.9	)		(1.6	)		389		404		(3.7	)
Agricultural products		303		313		608		631		(3.2	)		(3.6	)		300		305		(1.6	)
Coal		373		384		759		723		(2.9	)		5.0			369		385		(4.2	)
		2,476		2,624		4,845		5,073		(5.6	)		(4.5	)		2,124		2,369		(10.3	)


	Two months ending
	March 31, 2023
Revenues	$	9,508
Cost of sales		8,805
Operating and other expenses		496
Interest expense		71
Pre-tax earnings		136
Income taxes and noncontrolling interests		53
Net earnings attributable to Berkshire Hathaway shareholders	$	83

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
April
Class A common stock		—	$	—		—	*
Class B common stock		—	$	—		—	*

May
Class A common stock		—	$	—		—	*
Class B common stock		—	$	—		—	*

June
Class A common stock		2,397	$	425,870.54		2,397	*
Class B common stock		25,462	$	276.75		25,462	*


	Dec. 31, 2020			January 1, 2021						December 31, 2021									December 31, 2022
	Previously reported			Increase (decrease)			As revised			Previously reported			Increase (decrease)			As revised			Previously reported			Increase (decrease)			As revised
Assets:
Other receivables	$	32,310		$	738		$	33,048		$	35,388		$	580		$	35,968		$	43,506		$	(16	)	$	43,490
Other		14,580			—			14,580			15,854			24			15,878			19,628			29			19,657
Total assets		873,729		$	738			874,467			958,784		$	604			959,388			948,452		$	13			948,465
Liabilities and shareholders’ equity:
Unearned premiums		21,395		$	(56	)		21,339			23,512		$	(56	)		23,456			28,657		$	—			28,657
Life, annuity and health insurance benefits		21,616			7,220			28,836			22,282			5,013			27,295			22,421			(2,668	)		19,753
Other policyholder liabilities		8,670			1,697			10,367			9,901			1,485			11,386			10,101			1,269			11,370
Income taxes, principally deferred		74,098			(1,695	)		72,403			90,243			(1,207	)		89,036			77,020			348			77,368
Total liabilities		422,393			7,166			429,559			443,854			5,235			449,089			467,835			(1,051	)		466,784
Accumulated other comprehensive income		(4,243	)		(5,751	)		(9,994	)		(4,027	)		(4,096	)		(8,123	)		(6,591	)		1,539			(5,052	)
Retained earnings		444,626			(677	)		443,949			534,421			(535	)		533,886			511,602			(475	)		511,127
Berkshire Hathaway shareholders’ equity		443,164			(6,428	)		436,736			506,199			(4,631	)		501,568			472,360			1,064			473,424
Total shareholders’ equity		451,336			(6,428	)		444,908			514,930			(4,631	)		510,299			480,617			1,064			481,681
Total liabilities and shareholders’ equity		873,729		$	738			874,467			958,784		$	604			959,388			948,452		$	13			948,465


	Year ended December 31, 2021									Year ended December 31, 2022
	Previously reported			Increase (decrease)			As revised			Previously reported			Increase (decrease)			As revised
Revenues:
Insurance premiums earned	$	69,478		$	(18	)	$	69,460		$	74,645		$	(69	)	$	74,576
Cost and expenses:
Life, annuity and health insurance benefits		6,007			(183	)		5,824			5,152			91			5,243
Insurance underwriting expenses		12,569			(10	)		12,559			11,942			(236	)		11,706
Earnings (loss) before income taxes		111,686			175			111,861			(30,576	)		76			(30,500	)
Income tax expense (benefit)		20,879			33			20,912			(8,518	)		16			(8,502	)
Net earnings (loss)		90,807			142			90,949			(22,058	)		60			(21,998	)
Net earnings (loss) attributable to Berkshire Hathaway shareholders		89,795			142			89,937			(22,819	)		60			(22,759	)
Other comprehensive income:
Foreign currency translation		(1,011	)		—			(1,011	)		(2,136	)		(2	)		(2,138	)
Long duration insurance contracts		—			2,108			2,108			—			7,177			7,177
Applicable income taxes		—			(453	)		(453	)		—			(1,540	)		(1,540	)
Other comprehensive income, net		234			1,655			1,889			(2,625	)		5,635			3,010
Comprehensive income attributable to Berkshire Hathaway shareholders		90,011			1,797			91,808			(25,383	)		5,695			(19,688	)
Net earnings (loss) per average equivalent Class A share	$	59,460		$	94		$	59,554		$	(15,535	)	$	41		$	(15,494	)
Net earnings (loss) per average equivalent Class B share	$	39.64		$	0.06		$	39.70		$	(10.36	)	$	0.03		$	(10.33	)


	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~~May 4, ~~2016.~~2022.

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 ~~June 30, 2022,~~March 31, 2023, 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: ~~August~~May 6, ~~2022~~2023		/S/ MARC D. HAMBURG
		(Signature)
		Marc D. Hamburg,
		Senior Vice President and
		Principal Financial Officer