BRK.A GEICO

Our aggregate claim liability estimates recorded at the end of 2022 were reduced by $1.5 billion during 2023, which produced a corresponding increase to pre-tax earnings. The assumptions used to estimate liabilities at December 31, 2023 reflect the most recent frequency and severity estimates. Future development of recorded liabilities will depend on whether actual frequency and severity of claims are more or less than anticipated.


BRK.A GEICO

With respect to liabilities for BI claims, we believe it is reasonably possible that average claims severities will change by at least one percentage point from the projected severities used in establishing the recorded liabilities at December 31, 2023. We estimate that a one percentage point increase or decrease in BI severities would produce a $210 million increase or decrease in recorded liabilities, with a corresponding decrease or increase in pre-tax earnings. Many of the economic forces that would likely cause BI severity to differ from expectations would likely also cause severities for other injury coverages to differ in the same direction.


BRK.A Berkshire Hathaway Reinsurance Group

BHRG’s liabilities for unpaid losses and loss adjustment expenses derive primarily from reinsurance contracts issued through the NICO, General Re and TransRe Groups. A summary of BHRG’s property and casualty unpaid losses and loss adjustment expenses, other than retroactive reinsurance losses and loss adjustment expenses, as of December 31, 2023 follows (in millions). ####Property####Casualty####Total Reported case liabilities##$##8,159##$##11,455##$##19,614 IBNR liabilities####9,105####22,769####31,874 Gross unpaid losses and loss adjustment expenses####17,264####34,224####51,488 Reinsurance recoverable####689####1,481####2,170 Net unpaid losses and loss adjustment expenses##$##16,575##$##32,743##$##49,318


Gross unpaid losses and loss adjustment expenses consist primarily of traditional property and casualty coverages written under excess-of-loss and quota-share treaties. Under certain contracts, coverage can apply to multiple lines of business written and the ceding company may not report loss data by such lines consistently, if at all. In those instances, we judgmentally allocate losses to property and casualty coverages based on internal estimates.


The nature, extent, timing and perceived reliability of loss information received from ceding companies varies widely depending on the type of coverage and the contractual reporting terms. Reinsurance contract terms, conditions and coverages also tend to lack standardization and may evolve more rapidly than primary insurance policies.


BRK.A Property and casualty insurance unpaid losses

The loss information provided under many facultative (individual risk) or per occurrence excess contracts may be comparable to the information received under a primary insurance contract. However, loss information with respect to aggregate excess-of-loss and quota-share contracts is often in a summary form rather than on an individual claim basis. Loss data includes currently recoverable paid losses, as well as case loss estimates. Ceding companies infrequently provide reliable IBNR loss estimates.


Loss reporting to reinsurers is typically slower than primary insurers. In the U.S., client reporting is generally required at quarterly intervals ranging from 30 to 90 days after the end of the quarterly period, while outside of the U.S., reinsurance reporting practices may vary further, with some clients reporting annually ranging from 90 to 180 days after the end of the annual period. To the extent that reinsurers assume and cede underlying risks from other reinsurers, further delays in claims reporting may occur. The relative impact of reporting delays on the reinsurer may vary depending on the type of coverage, contractual reporting terms, the magnitude of the claim relative to the attachment point of the reinsurance coverage and other reasons.


As reinsurers, the premium and loss data we receive is at least one level removed from the underlying claimant, so there is a risk that the loss data reported is incomplete, inaccurate or the claim is outside the coverage terms. We maintain internal procedures to determine that the information is complete and in compliance with the contract terms. Generally, our reinsurance contracts permit us to access the ceding company’s records with respect to the subject business, thus providing the ability to audit the reported information. In the normal course of business, disputes occasionally arise concerning whether claims are covered by our reinsurance policies. We resolve most coverage disputes through negotiation with the client. If disputes cannot be resolved, our contracts generally provide arbitration or alternative dispute resolution processes. We believe there are no coverage disputes at this time for which an adverse resolution would likely have a material impact on our consolidated results of operations or financial condition.


Establishing claim liability estimates for reinsurance requires evaluation of loss information received from our clients. We generally rely on the ceding companies’ reported case loss estimates. We independently evaluate certain reported case losses and if appropriate, we use our own case liability estimate. For instance, as of December 31, 2023, our case loss estimates exceeded ceding company estimates by approximately $575 million for certain legacy workers’ compensation claims occurring over 10 years ago. We also periodically conduct detailed reviews of individual client claims, which may cause us to adjust our case estimates.


Although liabilities for losses are initially determined based on pricing and underwriting analysis, we use a variety of actuarial methodologies that place reliance on the extrapolation of historical data, loss development patterns, industry data and other benchmarks. The estimate of the IBNR liabilities also requires judgment by actuaries and management to reflect the impact of additional factors like change in business mix, volume, claim reporting and handling practices, inflation, social and legal environment and the terms and conditions of the contracts. The methodologies generally fall into or are hybrids of one or more of the following categories:


Paid and incurred loss development methods consider expected case loss emergence and development patterns, together with expected loss ratios by year. Factors affecting our loss development analysis include, but are not limited to, changes in the following: client claims reporting and settlement practices, the frequency of client company claim reviews, policy terms and coverage (such as loss retention levels and occurrence and aggregate policy limits), loss trends and legal trends that result in unanticipated losses. Collectively, these factors influence our selections of expected case loss emergence patterns.


Incurred and paid loss Bornhuetter-Ferguson methods consider actual paid and incurred losses and expected reporting patterns of paid and incurred losses, taking the initial expected ultimate losses into account to determine an estimate of the expected unpaid or unreported losses.


Frequency and severity methods commonly focus on a review of the number of anticipated claims and the anticipated claims severity and may also rely on development patterns to derive such estimates. However, our processes and techniques for estimating liabilities in such analyses generally rely more on a per-policy assessment of the ultimate cost associated with the individual loss rather than with an analysis of historical development patterns of past losses.


Additional analysis – In some cases we have established reinsurance claim liabilities on a contract-by-contract basis, determined from case loss estimates reported by the ceding company and IBNR liabilities that are primarily a function of an anticipated loss ratio for the contract and the reported case loss estimate. Liabilities are adjusted upward or downward over time to reflect case losses reported versus expected case losses, which we use to form revised judgment on the adequacy of the expected loss ratio and the level of IBNR liabilities required for unreported claims. Anticipated loss ratios are also revised to include estimates of known major catastrophe events.


Our claim liability estimation process for short-tail lines, primarily property exposures, utilizes a combination of the paid and incurred loss development methods and the incurred and paid loss Bornhuetter-Ferguson methods. Certain property catastrophe, individual risk and aviation excess-of-loss contracts tend to generate low frequency/high severity losses. Our processes and techniques for estimating liabilities under such contracts generally rely more on a per contract assessment of the ultimate cost associated with the individual loss event rather than with an analysis of the historical development patterns of past losses.


For our long-tail lines, primarily casualty exposures, we may rely on different methods depending on the maturity of the business, with estimates for the most recent years being based on priced loss expectations and more mature years reflecting the paid or incurred development pattern indications.


In 2023, workers’ compensation claims reported losses were less than expected. As a result, we reduced estimated ultimate losses for prior years’ loss events by $116 million. We estimate that increases of ten percent in the tail of the expected loss emergence pattern and in the expected loss ratios would produce a net increase of approximately $1.0 billion in IBNR liabilities, producing a corresponding decrease in pre-tax earnings. We believe it is reasonably possible for these assumptions to increase at these rates.


For other casualty losses, other than asbestos and environmental, we reduced estimated ultimate liabilities for prior years’ events by approximately $225 million in 2023. For certain significant casualty and general liability portfolios, we estimate that increases of five percent in the claim-tails of the expected loss emergence patterns and in the expected loss ratios could produce a net increase in our nominal IBNR liabilities and a corresponding reduction in pre-tax earnings of approximately $2 billion, although outcomes of greater than or less than $2 billion are possible.


The change in estimated ultimate liabilities for asbestos and environmental claims, excluding amounts assumed under retroactive reinsurance contracts was not significant in 2023. Net liabilities for such claims were approximately $2.0 billion at December 31, 2023. Loss estimations for these exposures are difficult to determine due to the changing legal environment and increases may be required in the future if new exposures or claimants are identified, new claims are reported or new theories of liability emerge.


BRK.A Retroactive reinsurance

Our retroactive reinsurance contracts cover loss events occurring before the contract inception dates. Claim liabilities associated with our retroactive reinsurance contracts predominately pertain to casualty or liability exposures. We expect the claim-tails will be very long. At December 31, 2023, gross unpaid losses were $34.6 billion and deferred charges were $9.5 billion.


BRK.A Retroactive reinsurance

Our contracts are generally subject to maximum limits of indemnification and, as such, we currently expect that maximum remaining gross losses payable under our retroactive policies will not exceed $50 billion. Absent significant judicial or legislative changes affecting asbestos, environmental or mass tort exposures, we also currently believe it unlikely that losses will develop upward to the maximum losses payable or downward by more than 15% of our current estimated gross liability.


We establish liability estimates by individual contract, considering exposure and development trends, historical aggregate loss payment patterns and project expected ultimate losses under various scenarios. We apply judgmental probability factors to these scenarios to determine an expected outcome. We also monitor subsequent loss payment activity and ceding company reports and other available information. We re-estimate ultimate losses when significant events or significant deviations from expectations are revealed.


Certain of our retroactive reinsurance contracts include asbestos, environmental and other mass tort claims. Our estimated liabilities for asbestos and environmental exposures were approximately $12.2 billion at December 31, 2023. We do not consistently receive reliable detailed underlying claims data from all ceding companies, particularly with respect to multi-line or aggregate excess-of-loss policies. When possible, we conduct a detailed analysis of the underlying loss data to make an estimate of ultimate reinsured losses. When detailed loss information is unavailable, we may apply recent industry trends and projections to aggregate client data. Judgments in these areas necessarily consider the stability of the legal and regulatory environment under which we expect claims will be adjudicated. Legal reform and legislation could also have a significant impact on our ultimate liabilities.


Deferred charges for retroactive reinsurance contracts, which at contract inception, represents the excess of the estimated ultimate liability for unpaid losses over premiums received. Deferred charges are subsequently charged to pre-tax earnings in future periods based on the expected timing and amount of loss payments. We adjust deferred charge balances for the impact of changes in the expected timing and ultimate amount of claim payments. Based on the contracts in effect as of December 31, 2023, we estimate that amortization expense in 2024 will approximate $900 million.


We increased estimated ultimate liabilities for prior years’ retroactive reinsurance contracts by $1.1 billion in the fourth quarter of 2023, primarily for asbestos, environmental and other casualty exposures. This increase, net of related changes in unamortized deferred charges, produced an incremental pre-tax underwriting loss of approximately $650 million.


BRK.A Other Critical Accounting Estimates

Our Consolidated Balance Sheet at December 31, 2023 includes goodwill of acquired businesses of $84.6 billion and indefinite-lived other intangible assets of $18.9 billion. We evaluate these assets for impairment annually in the fourth quarter and on an interim basis if the facts and circumstances lead us to believe that more likely than not there has been an impairment.


Goodwill and indefinite-lived intangible asset impairment reviews include determining the estimated fair values of our reporting units and of indefinite-lived intangible assets. Several methods may be used to estimate fair values, including market quotations, multiples of earnings and other valuation techniques. We primarily use discounted projected future earnings or cash flow methods in determining fair values. 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 reviews. Due to the inherent subjectivity and uncertainty in forecasting future cash flows and earnings over long periods of time, actual results may differ materially from the forecasts. If the carrying value of a reporting unit exceeds the estimated fair value of the reporting unit, then the excess, limited to the carrying amount of goodwill, is charged to earnings as an impairment loss. If the carrying value of the indefinite-lived intangible asset exceeds fair value, the excess is charged to earnings as an impairment loss.


As of December 31, 2023, we concluded it was more likely than not that goodwill recorded in our Consolidated Balance Sheet was not impaired. The fair value estimates of reporting units are and will likely be significantly affected by assumptions on the long-term effects of the COVID-19 pandemic on the reporting units businesses, as well as other assumptions concerning the long-term economic performance of the reporting units, which we cannot reliably predict. Consequently, any fair value estimates can be subject to wide variations.


In connection with the annual goodwill impairment review conducted in the fourth quarter of 2023, the estimated fair values of nine reporting units did not exceed our carrying values by at least 20%. These reporting units included Precision Castparts Corp. (“PCC”) and three reporting units acquired in late 2022 and early 2023. Our estimated fair value of PCC was approximately $32.6 billion, exceeding our carrying value of approximately $29.7 billion by 10%. Our carrying value of PCC included goodwill of approximately $7.5 billion. The three reporting units acquired in late 2022 and early 2023 included PTC, Jazwares and IPS. The fair values of these entities at December 31, 2023 totaled approximately $21.5 billion, which exceeded our carrying values by 1.5%. Goodwill associated with these reporting units was $8.5 billion. The remaining five other reporting units had an aggregate estimated fair value of approximately $4.4 billion, which exceeded our aggregate carrying value of approximately 10%. The carrying value of these units included goodwill of approximately $1.3 billion.


BRK.A Market Risk Disclosures

Our Consolidated Balance Sheets include substantial amounts of assets and liabilities whose fair values are subject to market risks. Our significant market risks are primarily associated with equity prices, interest rates, foreign currency exchange rates and commodity prices. The fair values of our investment portfolios remain subject to considerable volatility. The following sections address the significant market risks associated with our business activities.


BRK.A Equity Price Risk

Investments in equity securities represent the most significant portion of our consolidated investment portfolio. Strategically, we strive to invest in businesses that possess excellent economics and able and honest management, and we prefer to invest a meaningful amount in each company. Historically, equity investments have been concentrated in relatively few issuers. At December 31, 2023, approximately 79% of the total fair value of equity securities was concentrated in five companies.


BRK.A Equity Price Risk

We often hold our equity securities for long periods and short-term price volatility has occurred in the past and will occur in the future. We also strive to maintain significant levels of shareholder capital and ample liquidity to provide a margin of safety against short-term price volatility.


BRK.A Equity Price Risk

The following table summarizes our investments in equity securities, other than our investments in Kraft Heinz and Occidental common stocks, and the estimated effects of a hypothetical 30% increase and a 30% decrease in market prices as of those dates. The selected 30% hypothetical increase and decrease does not reflect the best or worst case scenario. Indeed, results from declines could be far worse due both to the nature of equity markets and the aforementioned concentrations existing in our equity investment portfolio. Dollar amounts are in millions. ####Fair Value##Hypothetical Price Change####Estimated Fair Value After Hypothetical Change in Prices####Estimated Increase (Decrease) in Net Earnings (1)## December 31, 2023################ Investments in equity securities##$##353,842##30% increase##$##457,993##$##82,281## ######30% decrease####249,885####(82,129##) December 31, 2022################ Investments in equity securities##$##308,793##30% increase##$##399,087##$##71,344## ######30% decrease####218,688####(71,195##)


BRK.A Equity Price Risk

(1)The estimated increase (decrease) is after income taxes.


BRK.A Interest Rate Risk

We also invest in bonds, loans or other interest rate sensitive instruments. Our strategy is to acquire or originate such instruments at prices or with interest rates considered appropriate relative to the perceived credit risk. We also issue debt in the ordinary course of business to fund business operations, business acquisitions and for other general purposes. We attempt to maintain high credit ratings in order to minimize the cost of our debt. We generally do not utilize derivative products, such as interest rate swaps, to manage interest rate risks and we do not attempt to match maturities of assets and liabilities.


BRK.A Interest Rate Risk

The fair values of our fixed maturity investments, loans and finance receivables and notes payable and other borrowings will fluctuate in response to changes in market interest rates. Increases and decreases in interest rates generally translate into decreases and increases in fair values of these instruments. Additionally, fair values of interest rate sensitive instruments may be affected by the creditworthiness of the issuer, prepayment options, relative values of alternative investments, the liquidity of the instrument and other general market conditions.


BRK.A Interest Rate Risk

The following table summarizes the estimated effects of hypothetical changes in interest rates on our significant assets and liabilities that are subject to significant interest rate risk. We assumed that the interest rate changes occur immediately and uniformly to each category of instrument and that there were no significant changes to other factors used to determine the value of the instrument. The hypothetical changes in interest rates do not reflect the best or worst case scenarios. Actual results may differ from those reflected in the table. Dollars are in millions. ##############Estimated Fair Value After Hypothetical Change in Interest Rates (bp=basis points)######## ####Fair Value####100 bp decrease####100 bp increase######200 bp increase####300 bp increase December 31, 2023###################### Assets:###################### Investments in fixed maturity securities##$##23,758##$##23,937##$##23,585####$##23,419##$##23,258 Investments in equity securities*####8,688####9,069####8,329######7,990####7,670 Loans and finance receivables####24,190####25,187####23,266######22,409####21,612 Liabilities:######################


BRK.A Notes payable and other borrowings:######################

Insurance and other####39,184####42,750####36,161######33,581####31,361 Railroad, utilities and energy####81,036####88,915####74,379######68,792####64,043 December 31, 2022###################### Assets:###################### Investments in fixed maturity securities##$##25,128##$##25,619##$##24,659####$##24,215##$##23,794 Investments in equity securities*####9,964####10,434####9,523######9,109####8,719 Loans and finance receivables####23,428####24,249####22,633######21,907####21,228 Liabilities:######################


Insurance and other####41,961####45,535####38,941######36,367####34,157 Railroad, utilities and energy####67,651####74,698####61,725######56,710####52,430


BRK.A Foreign Currency Risk

Certain of our subsidiaries operate in foreign jurisdictions and we transact business in foreign currencies. In addition, we hold investments in common stocks of major multinational companies, who have significant foreign business and foreign currency risk of their own. We generally do not attempt to match assets and liabilities by currency and do not use derivative contracts to manage foreign currency risks in a meaningful way.


BRK.A Foreign Currency Risk

Our net assets subject to financial statement translation into U.S. Dollars are primarily in our insurance, utilities and energy and certain manufacturing subsidiaries. A portion of our financial statement translation-related impact from changes in foreign currency rates is recorded in other comprehensive income. In addition, we include gains or losses from changes in foreign currency exchange rates in net earnings related to non-U.S. Dollar denominated assets and liabilities of Berkshire and its U.S.-based subsidiaries. A summary of these gains (losses), after-tax, for each of the years ending December 31, 2023 and 2022 follows (in millions). ####2023######2022## Non-U.S. denominated debt included in net earnings##$##211####$##1,263## Net liabilities under certain reinsurance contracts included in net earnings####(241##)####482## Foreign currency translation included in other comprehensive income####749######(2,050##)


BRK.A Commodity Price Risk

Our subsidiaries use commodities in various ways in manufacturing and providing services. As such, we are subject to price risks related to various commodities. In most instances, we attempt to manage these risks through the pricing of our products and services to customers. To the extent that we are unable to sustain price increases in response to commodity price increases, our operating results will likely be adversely affected. We generally do not utilize derivative contracts to manage commodity price risks to any significant degree.


BRK.A Quantitative and Qualitative Disclosures About Market Risk

See “Market Risk Disclosures” contained in Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”


BRK.A Management’s Report on Internal Control Over Financial Reporting

Management of Berkshire Hathaway Inc. is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in the Securities Exchange Act of 1934 Rule 13a-15(f). Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023, as required by the Securities Exchange Act of 1934 Rule 13a-15(c). In making this assessment, we used the criteria set forth in the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the framework in Internal Control—Integrated Framework (2013), our management concluded that our internal control over financial reporting was effective as of December 31, 2023.


The effectiveness of our internal control over financial reporting as of December 31, 2023 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which appears on page K-67.


Berkshire Hathaway Inc.


BRK.A To the Shareholders and the Board of Directors of

Berkshire Hathaway Inc.


Opinions on the Financial Statements and Internal Control over Financial Reporting


We have audited the accompanying consolidated balance sheets of Berkshire Hathaway Inc. and subsidiaries (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of earnings, comprehensive income, changes in shareholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).


In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.


BRK.A Change in Accounting Principle

As discussed in Note 1 to the financial statements, effective January 1, 2023, the Company adopted Accounting Standards Update 2018-12 Targeted Improvements to the Accounting for Long-Duration Contracts, using the modified retrospective approach.


BRK.A Basis for Opinions

The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on these financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.


BRK.A Basis for Opinions

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.


BRK.A Basis for Opinions

Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.


BRK.A Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.


BRK.A REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (Continued)

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


BRK.A Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.


BRK.A Critical Audit Matters

Unpaid Losses and Loss Adjustment Expenses — Refer to Notes 1 and 16 to the financial statements


BRK.A Critical Audit Matter Description

The Company’s unpaid losses and loss adjustment expenses (“claim liabilities”) include short duration property and casualty insurance and reinsurance contracts. Key assumptions affecting certain of these claim liabilities include anticipated claims and their severity, expected loss ratios, and expected patterns of paid and incurred losses.


BRK.A Critical Audit Matter Description

Given the subjectivity of estimating these key assumptions, performing audit procedures to evaluate whether certain of these claim liabilities were appropriately recorded as of December 31, 2023 required a high degree of auditor judgment and an increased extent of effort, including the need to involve our actuarial specialists.


BRK.A How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the key assumptions affecting certain of these claim liabilities included the following, among others: •We tested the operating effectiveness of controls over claim liabilities, including those over the key assumptions. •We tested the underlying data that served as the basis for the actuarial analysis to evaluate that the inputs to the actuarial estimate were accurate and complete. •With the assistance of our actuarial specialists: •We developed independent estimates of the claim liabilities, including loss data and industry claim development factors as needed, and compared our estimates to management’s estimates. •We compared prior year estimates of expected incurred losses to actual experience during the most recent year to identify potential bias in management’s determination of the claim liabilities.


Unpaid Losses and Loss Adjustment Expenses — Retroactive Reinsurance Contracts — Refer to Notes 1 and 17 to the financial statements


BRK.A Critical Audit Matter Description

The Company’s unpaid losses and loss adjustment expenses under retroactive reinsurance contracts (“retroactive claim liabilities”) include property and casualty retroactive reinsurance contracts. Key assumptions affecting certain of these retroactive claim liabilities include anticipated claims and their severity, expected loss ratios, and expected patterns of paid and incurred losses.


BRK.A Critical Audit Matter Description

Given the subjectivity of estimating these key assumptions, performing audit procedures to evaluate whether certain of these claim liabilities were appropriately recorded as of December 31, 2023, required a high degree of auditor judgment and an increased extent of effort, including the need to involve our actuarial specialists.


Our audit procedures related to the key assumptions affecting claim liabilities included the following, among others: •We tested the operating effectiveness of controls over claim liabilities, including those over the key assumptions.


•We tested the underlying data that served as the basis for the actuarial analysis, including historical claims, to test that the inputs to the actuarial estimate were accurate and complete. •With the assistance of our actuarial specialists: •We developed independent claim liability estimates for certain retroactive reinsurance contracts and compared our estimates to management’s estimates. For other retroactive reinsurance contracts, we evaluated the process used by management to develop the estimated claim liabilities. •We compared prior year estimates of expected incurred losses to actual experience during the most recent year to identify potential bias in management’s determination of the claim liabilities.


Goodwill and Indefinite-Lived Intangible Assets — Refer to Notes 1 and 13 to the financial statements


BRK.A Critical Audit Matter Description

The Company’s evaluation of goodwill and indefinite-lived intangible assets for impairment involves the comparison of the fair value of each reporting unit or asset to its carrying value. As of December 31, 2023, goodwill of approximately $8 billion and indefinite-lived intangible assets of $13 billion were recorded at the Precision Castparts Corp. (“PCC”) reporting unit. PCC primarily uses discounted projected future net earnings to estimate fair value, which requires management to make significant estimates and assumptions related to forecasted future revenue, earnings before interest and taxes (“EBIT”), and discount rates.


BRK.A Critical Audit Matter Description

Given the significant judgments made by management in their evaluation of potential impairment of PCC goodwill and PCC indefinite-lived intangible assets and the difference between their fair values and carrying values, performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions required a high degree of auditor judgment. Increased audit effort, including the need to involve our fair value specialists, was required to test management’s estimates and assumptions of forecasted future revenue and EBIT and the selection of the discount rate.


Our audit procedures related to forecasts of future revenue and EBIT and the selection of the discount rate for the PCC reporting unit and certain customer relationships included the following, among others: •We tested the effectiveness of controls over goodwill and indefinite-lived intangible assets, including those over the forecasts of future revenue and EBIT and the selection of the discount rate. •We evaluated management’s ability to accurately forecast future revenue and EBIT by comparing prior year forecasts to actual results in the respective years. •We evaluated the reasonableness of management’s current revenue and EBIT forecasts by comparing the forecasts to historical results, newly executed long-term contracts, customer demand and build schedules, and forecasted information included in analyst and industry reports and certain peer companies’ disclosures. •With the assistance of our fair value specialists, we evaluated the valuation methodologies, the terminal growth rates and discount rate, including testing the underlying source information and the mathematical accuracy of the calculations, and developed a range of independent estimates and compared those to the terminal growth rates and discount rate selected by management. •With the assistance of our fair value specialists, we evaluated the valuation methodologies, and the terminal growth rates and discount rate. We tested the underlying source information and mathematical accuracy of calculations and developed a range of independent estimates and compared those to the terminal growth rates and discount rate selected by management.


BRK.A February 24, 2024

We have served as the Company’s auditor since 1985.


BRK.A K-69

BERKSHIRE HATHAWAY INC.


BRK.A CONSOLIDATED BALANCE SHEETS (dollars in millions)

######December 31,#### ####2023######2022 ASSETS########## Insurance and Other:########## Cash and cash equivalents*##$##33,672####$##32,260 Short-term investments in U.S. Treasury Bills####129,619######92,774 Investments in fixed maturity securities####23,758######25,128 Investments in equity securities####353,842######308,793 Equity method investments####29,066######28,050 Loans and finance receivables####24,681######23,208 Other receivables####44,174######43,490 Inventories####24,159######25,366 Property, plant and equipment####22,030######21,113 Equipment held for lease####16,947######15,584 Goodwill####50,868######51,522 Other intangible assets####29,327######29,187 Deferred charges - retroactive reinsurance####9,495######9,870 Other####19,568######19,657 ####811,206######726,002 Railroad, Utilities and Energy:########## Cash and cash equivalents*####4,350######3,551 Receivables####7,086######4,795 Property, plant and equipment####177,616######160,268 Goodwill####33,758######26,597 Regulatory assets####5,565######5,062 Other####30,397######22,190 ####258,772######222,463 ##$##1,069,978####$##948,465


* Includes U.S. Treasury Bills with maturities of three months or less when purchased of $4.8 billion at December 31, 2023 and $2.6 billion at December 31, 2022.


BRK.A K-70

BERKSHIRE HATHAWAY INC.


########December 31,###### ####2023########2022## LIABILITIES AND SHAREHOLDERS’ EQUITY############## Insurance and Other:############## Unpaid losses and loss adjustment expenses##$##111,082######$##107,472## Unpaid losses and loss adjustment expenses - retroactive reinsurance contracts####34,647########35,415## Unearned premiums####30,507########28,657## Life, annuity and health insurance benefits####20,213########19,753## Other policyholder liabilities####11,545########11,370## Accounts payable, accruals and other liabilities####32,402########33,201## Aircraft repurchase liabilities and unearned lease revenues####8,253########6,820##


BRK.A Notes payable and other borrowings####42,692########46,538##

####291,341########289,226## Railroad, Utilities and Energy:############## Accounts payable, accruals and other liabilities####22,461########16,615## Regulatory liabilities####6,818########7,369##


BRK.A Notes payable and other borrowings####85,579########76,206##

####114,858########100,190## Income taxes, principally deferred####93,009########77,368## Total liabilities####499,208########466,784## Redeemable noncontrolling interests####3,261########—## Shareholders’ equity:############## Common stock####8########8## Capital in excess of par value####34,480########35,167## Accumulated other comprehensive income####(3,763##)######(5,052##) Retained earnings####607,350########511,127## Treasury stock, at cost####(76,802##)######(67,826##) Berkshire Hathaway shareholders’ equity####561,273########473,424## Noncontrolling interests####6,236########8,257## Total shareholders’ equity####567,509########481,681## ##$##1,069,978######$##948,465##


BRK.A K-71

BERKSHIRE HATHAWAY INC.


BRK.A CONSOLIDATED STATEMENTS OF EARNINGS (dollars in millions except per share amounts)

########Year Ended December 31,###### ####2023####2022######2021 Revenues:############## Insurance and Other:############## Insurance premiums earned##$##83,403##$##74,576####$##69,460 Sales and service revenues####155,687####157,518######145,043 Leasing revenues####8,416####7,514######5,988 Interest, dividend and other investment income####15,561####10,263######7,465 ####263,067####249,871######227,956 Railroad, Utilities and Energy:############## Freight rail transportation revenues####23,791####25,802######23,177 Utility and energy operating revenues####72,693####21,023######18,891 Service revenues and other income####4,931####5,324######6,161 ####101,415####52,149######48,229 Total revenues####364,482####302,020######276,185 Investment and derivative contract gains (losses)####74,855####(67,899##)####78,542 Costs and expenses:############## Insurance and Other:############## Insurance losses and loss adjustment expenses####57,187####57,646######49,964 Life, annuity and health benefits####4,029####5,243######5,824 Insurance underwriting expenses####15,270####11,706######12,559 Cost of sales and services####122,569####124,319######114,138 Cost of leasing####6,037####5,550######4,201 Selling, general and administrative expenses####22,605####19,506######18,843 Interest expense####1,258####1,187######1,086 ####228,955####225,157######206,615 Railroad, Utilities and Energy:############## Freight rail transportation expenses####16,464####17,282######14,477 Utilities and energy cost of sales and other expenses####67,964####15,896######13,959 Other expenses####4,016####4,984######5,615 Interest expense####3,745####3,165######3,086 ####92,189####41,327######37,137 Total costs and expenses####321,144####266,484######243,752 Earnings (loss) before income taxes and equity method earnings####118,193####(32,363##)####110,975 Equity method earnings####1,973####1,863######886 Earnings (loss) before income taxes####120,166####(30,500##)####111,861 Income tax expense (benefit)####23,019####(8,502##)####20,912 Net earnings (loss)####97,147####(21,998##)####90,949 Earnings attributable to noncontrolling interests####924####761######1,012 Net earnings (loss) attributable to Berkshire Hathaway shareholders##$##96,223##$##(22,759##)##$##89,937 Net earnings (loss) per average equivalent Class A share##$##66,412##$##(15,494##)##$##59,554 Net earnings (loss) per average equivalent Class B share*##$##44.27##$##(10.33##)##$##39.70 Average equivalent Class A shares outstanding####1,448,880####1,468,876######1,510,180 Average equivalent Class B shares outstanding####2,173,319,709####2,203,313,642######2,265,269,867


* Net earnings per average equivalent Class B share outstanding are equal to one-fifteen-hundredth of the equivalent Class A amount. See Note 22.


BRK.A K-72

BERKSHIRE HATHAWAY INC.


BRK.A CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (dollars in millions)

##########Year Ended December 31,######## ####2023######2022######2021## Net earnings (loss)##$##97,147####$##(21,998##)##$##90,949## Other comprehensive income:################## Unrealized gains (losses) on investments####477######(713##)####(217##) Applicable income taxes####(100##)####158######50## Foreign currency translation####782######(2,138##)####(1,011##) Applicable income taxes####(7##)####22######(6##) Long-duration insurance contract discount rate changes####(237##)####7,177######2,108## Applicable income taxes####49######(1,540##)####(453##) Defined benefit pension plans####578######(253##)####1,775## Applicable income taxes####(123##)####47######(457##) Other, net####(101##)####250######100## Other comprehensive income, net####1,318######3,010######1,889## Comprehensive income####98,465######(18,988##)####92,838## Comprehensive income attributable to noncontrolling interests####953######700######1,030## Comprehensive income attributable to Berkshire Hathaway shareholders##$##97,512####$##(19,688##)##$##91,808##


BERKSHIRE HATHAWAY INC.


BRK.A CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (dollars in millions)

############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## Balance at December 31, 2020##$##35,634####$##(4,243##)##$##444,626####$##(32,853##)##$##8,172####$##451,336## Adoption of ASU 2018-12####—######(5,751##)####(677##)####—######—######(6,428##) Balance at January 1, 2021####35,634######(9,994##)####443,949######(32,853##)####8,172######444,908## Net earnings (loss)####—######—######89,937######—######1,012######90,949## Other comprehensive income, net####—######1,871######—######—######18######1,889## Acquisition of common stock####—######—######—######(26,942##)####—######(26,942##) Transactions with noncontrolling interests and other####(34##)####—######—######—######(471##)####(505##) Balance at December 31, 2021####35,600######(8,123##)####533,886######(59,795##)####8,731######510,299## Net earnings (loss)####—######—######(22,759##)####—######761######(21,998##) Other comprehensive income, net####—######3,071######—######—######(61##)####3,010## Acquisition of common stock####—######—######—######(8,031##)####—######(8,031##) Transactions with noncontrolling interests and other####(425##)####—######—######—######(1,174##)####(1,599##) Balance at December 31, 2022####35,175######(5,052##)####511,127######(67,826##)####8,257######481,681## Net earnings (loss)####—######—######96,223######—######924######97,147## Other comprehensive income, net####—######1,289######—######—######29######1,318## Acquisition of common stock####—######—######—######(8,976##)####—######(8,976##) Transactions with noncontrolling interests and other####(687##)####—######—######—######(2,974##)####(3,661##) Balance at December 31, 2023##$##34,488####$##(3,763##)##$##607,350####$##(76,802##)##$##6,236####$##567,509##


BRK.A K-73

BERKSHIRE HATHAWAY INC.


BRK.A CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in millions)

##########Year Ended December 31,######## ####2023######2022######2021## Cash flows from operating activities:################## Net earnings (loss)##$##97,147####$##(21,998##)##$##90,949## Adjustments to reconcile net earnings (loss) to operating cash flows:################## Investment (gains) losses####(74,855##)####67,623######(77,576##) Depreciation and amortization####12,486######10,899######10,718## Other####(6,023##)####(4,206##)####(3,382##) Changes in operating assets and liabilities:################## Unpaid losses and loss adjustment expenses####2,628######4,057######4,194## Deferred charges - retroactive reinsurance####375######769######1,802## Unearned premiums####1,854######1,861######2,306## Receivables and originated loans####(1,949##)####(5,621##)####(5,864##) Inventories####1,426######(4,779##)####(1,862##) Other assets####(1,328##)####(378##)####154## Other liabilities####2,570######1,995######2,658## Income taxes####14,865######(12,872##)####15,330## Net cash flows from operating activities####49,196######37,350######39,427## Cash flows from investing activities:################## Purchases of equity securities####(16,462##)####(67,930##)####(8,448##) Sales of equity securities####40,631######33,664######15,849## Purchases of U.S. Treasury Bills and fixed maturity securities####(235,007##)####(183,922##)####(152,637##) Sales of U.S. Treasury Bills and fixed maturity securities####52,302######90,088######27,188## Redemptions and maturities of U.S. Treasury Bills and fixed maturity securities####153,201######66,318######160,402## Acquisitions of businesses, net of cash acquired####(8,604##)####(10,594##)####(456##) Purchases of property, plant and equipment and equipment held for lease####(19,409##)####(15,464##)####(13,276##) Other####685######239######770## Net cash flows from investing activities####(32,663##)####(87,601##)####29,392## Cash flows from financing activities:################## Proceeds from borrowings of insurance and other businesses####2,133######7,822######2,961## Repayments of borrowings of insurance and other businesses####(5,921##)####(1,502##)####(3,032##) Proceeds from borrowings of railroad, utilities and energy businesses####5,684######4,873######3,959## Repayments of borrowings of railroad, utilities and energy businesses####(5,390##)####(2,426##)####(4,016##) Changes in short term borrowings, net####2,407######(596##)####(624##) Acquisitions of treasury stock####(9,171##)####(7,854##)####(27,061##) Other, principally transactions with noncontrolling interests####(4,147##)####(1,979##)####(695##) Net cash flows from financing activities####(14,405##)####(1,662##)####(28,508##) Effects of foreign currency exchange rate changes####116######(394##)####(1##) Increase (decrease) in cash and cash equivalents and restricted cash####2,244######(52,307##)####40,310## Cash and cash equivalents and restricted cash at the beginning of the year*####36,399######88,706######48,396## Cash and cash equivalents and restricted cash at the end of the year*##$##38,643####$##36,399####$##88,706## * Cash and cash equivalents and restricted cash at the end of year are comprised of:################## Insurance and Other##$##33,672####$##32,260####$##85,319## Railroad, Utilities and Energy####4,350######3,551######2,865## Restricted cash included in other assets####621######588######522## ##$##38,643####$##36,399####$##88,706##


BRK.A K-74

BERKSHIRE HATHAWAY INC.


BRK.A December 31, 2023 (1)Significant accounting policies and practices (a)Nature of operations and basis of consolidation

Berkshire Hathaway Inc. (“Berkshire”) is a holding company owning subsidiaries engaged in numerous diverse business activities, including insurance and reinsurance, freight rail transportation, utilities and energy, manufacturing, service and retailing. In these notes the terms “us,” “we,” or “our” refer to Berkshire and its consolidated subsidiaries. Further information regarding our reportable business segments is contained in Note 26. Information concerning significant business acquisitions completed over the past three years appears in Note 2. We believe that reporting the Railroad, Utilities and Energy subsidiaries separately is appropriate given the relative significance of their long-lived assets, capital expenditures and debt, which is not guaranteed by Berkshire.


BRK.A December 31, 2023 (1)Significant accounting policies and practices (a)Nature of operations and basis of consolidation (b)Use of estimates in preparation of financial statements

The accompanying Consolidated Financial Statements include the accounts of Berkshire consolidated with the accounts of all subsidiaries and affiliates in which we hold a controlling financial interest as of the financial statement date. Normally a controlling financial interest reflects ownership of a majority of the voting interests. We consolidate variable interest entities (“VIE”) when we possess both the power to direct the activities of the VIE that most significantly affect its economic performance, and we (a) are obligated to absorb the losses that could be significant to the VIE or (b) hold the right to receive benefits from the VIE that could be significant to the VIE. Intercompany accounts and transactions have been eliminated. Certain immaterial balances in the Consolidated Financial Statements have been reclassified in prior years to conform to current year presentations.


We prepare our Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States (“GAAP”) which requires us to make estimates and assumptions that affect the reported amounts of certain assets and liabilities at the balance sheet date and the reported amounts of certain revenues and expenses during the period. Our estimates of unpaid losses and loss adjustment expenses are subject to considerable estimation error due to the inherent uncertainty in projecting ultimate claim costs. In addition, estimates and assumptions associated with determinations of deferred charges on retroactive reinsurance contracts, fair values of certain financial instruments and evaluations of goodwill and indefinite-lived intangible assets for impairment require considerable judgment. Actual results may differ from the estimates used in preparing our Consolidated Financial Statements.


Our operating businesses have been impacted to varying degrees in recent years by government and private sector actions to mitigate the adverse economic effects of the COVID-19 virus and its variants as well as by the development of geopolitical conflicts, supply chain disruptions and government actions to slow inflation. The economic effects from these events over longer terms cannot be reasonably estimated at this time. Accordingly, significant estimates used in the preparation of our Consolidated 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.


(c)Cash and cash equivalents and short-term investments in U.S. Treasury Bills


BRK.A December 31, 2023 (1)Significant accounting policies and practices (a)Nature of operations and basis of consolidation (b)Use of estimates in preparation of financial statements (d)Investments in fixed maturity securities

Cash equivalents consist of demand deposit and money market accounts and investments with maturities of three months or less when purchased. Short-term investments in U.S. Treasury Bills have maturities exceeding three months and less than one year at the time of purchase.


We classify investments in fixed maturity securities on the acquisition date and at each balance sheet date. Securities classified as held-to-maturity are carried at amortized cost, reflecting the ability and intent to hold the securities to maturity. Securities classified as trading are acquired with the intent to sell in the near term and are carried at fair value with changes in fair value reported in earnings. All other securities are classified as available-for-sale and are carried at fair value. Our investments in fixed maturity securities are classified as available-for-sale. We amortize the difference between the original cost and maturity value of a fixed maturity security to earnings using the interest method.


BRK.A Notes to Consolidated Financial Statements (1)Significant accounting policies and practices (d)Investments in fixed maturity securities (e)Investments in equity securities

We record investment gains and losses on available-for-sale fixed maturity securities in earnings when the securities are sold. For securities in an unrealized loss position, we recognize a loss in earnings for the excess of amortized cost over fair value if we intend to sell before the price recovers. As of the balance sheet date, we evaluate whether the other unrealized losses are attributable to credit losses or other factors. We consider the severity of the decline in value, creditworthiness of the issuer and other relevant factors. We record an allowance for credit losses, limited to the excess of amortized cost over fair value, with a corresponding charge to earnings if the present value of estimated expected cash flows is less than the present value of contractual cash flows. The allowance may be subsequently increased or decreased based on the prevailing facts and circumstances. The portion of the unrealized loss that we believe is not related to a credit loss is recognized in other comprehensive income.


BRK.A Notes to Consolidated Financial Statements (1)Significant accounting policies and practices (d)Investments in fixed maturity securities (e)Investments in equity securities (f)Investments under the equity method

We carry investments in equity securities at fair value and record the changes in fair values in the Consolidated Statements of Earnings as a component of investment gains and losses.


We utilize the equity method to account for investments when we possess the ability to exercise significant influence, but not control, over the operating and financial policies of the investee. The ability to exercise significant influence is presumed when the investor possesses more than 20% of the voting interests of the investee. This presumption may be overcome based on specific facts and circumstances that demonstrate that the ability to exercise significant influence is restricted. We apply the equity method to investments in common stock and other investments when such investments possess substantially identical subordinated interests to common stock, and do not apply the equity method to investments that are not in-substance common stock as defined by GAAP.


BRK.A Notes to Consolidated Financial Statements (1)Significant accounting policies and practices (d)Investments in fixed maturity securities (e)Investments in equity securities (f)Investments under the equity method (g)Loans and finance receivables

In applying the equity method, we record the investment at cost and subsequently increase or decrease the carrying amount of the investment by our proportionate share of the net earnings or losses and other comprehensive income of the investee. We record dividends or other equity distributions as reductions in the carrying value of the investment. If net losses reduce our carrying amount to zero, additional net losses may be recorded if other investments in the investee are at-risk, even if we have not committed to provide financial support to the investee. Such additional equity method losses are based upon the change in our claim on the investee’s book value.


Loans and finance receivables are primarily manufactured home loans, and to a lesser extent, commercial loans and site-built home loans. We carry substantially all loans and finance receivables at amortized cost, net of allowances for expected credit losses, based on our ability and intent to hold such loans to maturity. Acquisition costs and loan origination and commitment costs paid and fees received, as well as acquisition premiums or discounts, are amortized to investment income as yield adjustments over the lives of the loans.


Measurements of expected credit losses include provisions for non-collection, whether the risk is probable or remote. Expected credit losses on manufactured home loans are based on the net present value of future principal payments less estimated expenses related to the charge-off and foreclosure of expected uncollectible loans and include provisions for loans that are not in foreclosure. Our principal credit quality indicator is whether the loans are performing. Expected credit loss estimates consider historical default rates, collateral recovery rates, historical runoff rates, interest rates, reductions of future cash flows for modified loans and the historical time elapsed from last payment until foreclosure, among other factors. In addition, our estimates consider current conditions and reasonable and supportable forecasts.


Loans are considered delinquent when payments are more than 30 days past due. We place loans over 90 days past due on nonaccrual status and accrued but uncollected interest is reversed. Subsequent collections on the loans are first applied to the principal and interest owed for the most delinquent amount. We resume interest income accrual once a loan is less than 90 days delinquent.


BRK.A Notes to Consolidated Financial Statements (1)Significant accounting policies and practices (g)Loans and finance receivables (h)Other receivables

Loans are considered non-performing when the foreclosure process has started. Once a loan is in the process of foreclosure, interest income is not recognized until the foreclosure is cured or the loan is modified. Once a modification is complete, interest income is recognized based on the terms of the new loan. Foreclosed loans are charged off when the collateral is sold. Loans not in foreclosure are evaluated for charge-off based on individual circumstances concerning the future collectability of the loan and the condition of the collateral securing the loan.


Other receivables include balances due from customers, insurance premiums receivable and reinsurance losses recoverable, as well as other receivables. Trade receivables, insurance premiums receivables and other receivables are primarily short-term in nature with stated collection terms of less than one year from the date of origination. Reinsurance recoverables are comprised of amounts ceded under reinsurance contracts or pursuant to mandatory government-sponsored insurance programs. Reinsurance recoverables relate to unpaid losses and loss adjustment expenses arising from property and casualty contracts and benefits under life and health contracts. Receivables are stated net of estimated allowances for uncollectible balances.


BRK.A Notes to Consolidated Financial Statements (1)Significant accounting policies and practices (g)Loans and finance receivables (h)Other receivables (i)Derivatives

We measure expected credit losses primarily utilizing credit loss history. In addition, our credit loss estimates consider current conditions and reasonable and supportable forecasts. In evaluating expected credit losses of reinsurance recoverables on unpaid losses, we review the credit quality of the counterparty and consider right-of-offset provisions within reinsurance contracts and other forms of credit enhancement including collateral, guarantees and other available information. We charge off receivables against the allowances after reasonable collection efforts are exhausted.


BRK.A Notes to Consolidated Financial Statements (1)Significant accounting policies and practices (g)Loans and finance receivables (h)Other receivables (i)Derivatives (j)Fair value measurements

We carry assets and liabilities arising from derivative contracts at fair value in other assets and accounts payable, accruals and other liabilities in our Consolidated Balance Sheets. Balances are net of reductions permitted under master netting agreements with counterparties. We record the changes in fair value of derivative contracts that do not qualify as hedging instruments for financial reporting purposes in earnings or, if such contracts involve our regulated utilities subsidiaries, as regulatory assets or liabilities when inclusion in regulated rates is probable.


BRK.A Notes to Consolidated Financial Statements (1)Significant accounting policies and practices (g)Loans and finance receivables (h)Other receivables (i)Derivatives (j)Fair value measurements (k)Inventories

As defined under GAAP, fair value is the price that would be received to sell an asset or paid to transfer a liability between market participants in the principal market or in the most advantageous market when no principal market exists. Adjustments to transaction prices or quoted market prices may be required in illiquid or disorderly markets when estimating fair value. In such circumstances, alternative valuation techniques may be appropriate to determine the value that would be received to sell an asset or paid to transfer a liability in an orderly transaction. Market participants are assumed to be independent, knowledgeable, and able and willing to transact an exchange and not acting under duress. Our nonperformance or credit risk is considered in determining the fair value of liabilities. Considerable judgment may be required in interpreting market data used to develop the estimates of fair value. Accordingly, estimates of fair value presented herein are not necessarily indicative of the amounts that could be realized in a current or future market exchange.


Inventories consist of manufactured goods, goods or products acquired for resale and homes constructed for sale. Manufactured inventory costs include materials, direct and indirect labor and factory overhead. At December 31, 2023, we used the last-in-first-out (“LIFO”) method to value approximately 30% of consolidated inventories with the remainder primarily determined under first-in-first-out and average cost methods. Non-LIFO inventories are stated at the lower of cost or net realizable value. The excess of current or replacement costs over costs determined under LIFO was approximately $2.3 billion as of December 31, 2023 and $2.5 billion as of December 31, 2022.


BRK.A Notes to Consolidated Financial Statements (1)Significant accounting policies and practices (l)Property, plant and equipment and equipment held for lease

We use property, plant and equipment in our operations. We also own equipment that we lease to others under lease contracts. We record additions to such property at cost, which includes asset additions, improvements and betterments. With respect to constructed assets, all materials, direct labor and contract services as well as certain indirect costs are capitalized. Indirect costs include interest over the construction period. With respect to constructed assets of our utility and energy subsidiaries that are subject to authoritative guidance for regulated operations, capitalized costs also include an allowance for funds used during construction, which represents the cost of equity funds used to finance the construction of the regulated facilities. Normal repairs and maintenance and other costs that do not improve the property, extend its useful life or otherwise do not meet capitalization criteria are charged to expense as incurred.


Depreciation of assets of our regulated utilities and railroad is generally determined using group depreciation methods where rates are based on periodic depreciation studies approved by the applicable regulator. Under group depreciation, a composite rate is applied to the gross investment in a particular class of property, despite differences in the service life or salvage value of individual property units within the same class. When such assets are retired or sold, no gain or loss is recognized. Gains or losses on disposals of all other assets are recorded through earnings.


Ranges of estimated useful lives of depreciable assets unique to our railroad business are as follows: track structure and other roadway – 10 to 100 years and locomotives, freight cars and other equipment – 6 to 45 years. Ranges of estimated useful lives of assets unique to our utilities and energy businesses are as follows: utility generation, transmission and distribution systems – 5 to 80 years, interstate natural gas pipeline assets – 3 to 80 years, independent power plants and other assets – 2 to 50 years, buildings and improvements – 10 to 30 years and machinery, equipment and other – 3 to 10 years. We depreciate property, plant and equipment used by our other businesses to the estimated salvage value primarily using the straight-line method over estimated service lives. Ranges of estimated service lives of depreciable assets used in our other businesses are as follows: buildings and improvements – 5 to 50 years, machinery and equipment – 3 to 25 years and furniture, fixtures and other – 3 to 15 years. We depreciate the equipment held for lease to estimated salvage value primarily using the straight-line method over estimated useful lives ranging from 3 to 35 years. We use declining balance depreciation methods for assets when the revenue-earning power of the asset is greater during the earlier years of its life.


BRK.A Notes to Consolidated Financial Statements (1)Significant accounting policies and practices (l)Property, plant and equipment and equipment held for lease (m)Leases

We evaluate property, plant and equipment and equipment held for lease for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable or when the assets are held for sale. Upon the occurrence of a triggering event, we assess whether the estimated undiscounted cash flows expected from the use of the asset and the residual value from the ultimate disposal of the asset exceeds the carrying value. If the carrying value exceeds the estimated recoverable amounts, we reduce the carrying value to fair value and record an impairment loss in earnings, except with respect to impairment of assets of our regulated utility and energy subsidiaries where the impacts of regulation are considered in evaluating the carrying value.


BRK.A Notes to Consolidated Financial Statements (1)Significant accounting policies and practices (l)Property, plant and equipment and equipment held for lease (m)Leases (n)Goodwill and other intangible assets

We are party to contracts where we lease property from others. When we lease assets from others, we record right-of-use assets and lease liabilities. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. In this regard, lease payments include fixed payments and variable payments that depend on an index or rate. The lease term is considered the non-cancellable lease period. Certain lease contracts contain renewal options or other terms that provide for variable payments based on performance or usage. Options are not included in determining right-of-use assets or lease liabilities unless it is reasonably certain that options will be exercised. Generally, incremental borrowing rates are used in measuring lease liabilities. Right-of-use assets are subject to review for impairment. As permitted under GAAP, for some leases we do not separate lease components from non-lease components by class of asset and we do not record assets or liabilities for leases with terms of one year or less.


Goodwill represents the excess of the acquisition price of a business over the acquisition date values of identified net assets of that business. We evaluate goodwill for impairment at least annually. When evaluating goodwill for impairment, we estimate the fair value of the reporting unit. Several methods may be used to estimate a reporting unit’s fair value, including market quotations, asset and liability fair values and other valuation techniques, including, but not limited to, discounted projected future net earnings or net cash flows and multiples of earnings. When the carrying amount of a reporting unit, including goodwill, exceeds the estimated fair value, the excess up to the balance of goodwill is charged to earnings as an impairment loss.


BRK.A Notes to Consolidated Financial Statements (1)Significant accounting policies and practices (n)Goodwill and other intangible assets (o)Revenue recognition

Intangible assets with indefinite lives are also tested for impairment at least annually and when events or changes in circumstances indicate that, more-likely-than-not, the asset is impaired. Significant judgment is required in estimating fair values and performing goodwill and indefinite-lived intangible asset impairment tests. We amortize intangible assets with finite lives in a pattern that reflects the expected consumption of related economic benefits or on a straight-line basis over the estimated economic useful lives. Intangible assets with finite lives are reviewed for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable.


We earn insurance premiums on prospective property/casualty insurance and reinsurance contracts over the loss exposure or coverage period in proportion to the level of protection provided. We earn premiums, in most cases, ratably over the term of the contract with unearned premiums computed on a monthly or daily pro-rata basis. Premiums on retroactive property/casualty reinsurance contracts are normally received in full and are fully earned at the inception of the contracts, as all underlying loss events covered by the policies occurred prior to contract inception. Premiums for life reinsurance and periodic payment annuity contracts are earned when due. Premiums for periodic payment annuity contracts are fully received and earned at the inception of the contracts. Premiums earned are stated net of amounts ceded to reinsurers. Premiums earned on contracts with experience-rating provisions reflect estimated loss experience under such contracts.


Sales and service revenues are recognized when goods or services are 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.


We manufacture and/or distribute a wide variety of industrial, building and consumer products. Our sales contracts provide customers with products directly or through wholesale and retail channels in exchange for consideration specified under the contracts. Contracts generally represent customer orders for individual products at stated prices. Sales contracts may contain either single or multiple performance obligations. In instances where contracts contain multiple performance obligations, we allocate the revenue to each obligation based on the relative stand-alone selling prices of each product or service.


Sales revenues reflect reductions for returns, allowances, late delivery penalties, volume discounts and other incentives, some of which may be contingent on future events. In certain customer contracts, sales revenues include certain state and local excise taxes billed to customers on specified products when those taxes are levied directly upon us by the taxing authorities. Sales revenues exclude sales taxes and value-added taxes collected on behalf of taxing authorities. Sales revenues include consideration for shipping and other fulfillment activities performed prior to the customer obtaining control of the goods. We also elect to treat consideration for such services performed after control has passed to the customer as sales revenue.


Product sales revenues are generally recognized at a point in time when control of the product transfers to the customer, which coincides with customer pickup or product delivery or acceptance, depending on terms of the arrangement. We recognize sales revenues and related costs with respect to certain contracts over time, relating to certain bridge and structural steel, castings, forgings and aerostructures contracts. Control of the product units under these contracts transfers continuously to the customer as the product is manufactured. These products generally have no alternative use and the contract requires the customer to provide reasonable compensation if terminated for reasons other than breach of contract.


The primary performance obligation under our freight rail transportation service contracts is to move freight from a point of origin to a point of destination. The performance obligations are represented by bills of lading which create a series of distinct services that have a similar pattern of transfer to the customer. The revenues for each performance obligation are based on various factors including the product being shipped, the origin and destination pair and contract incentives, which are outlined in various private rate agreements, common carrier public tariffs, interline foreign road agreements and pricing quotes. The transaction price is generally a per car/unit amount to transport railcars from a specified origin to a specified destination. Freight revenues are recognized over time as the service is performed because the customer simultaneously receives and consumes the benefits of the service. Revenues recognized represent the portion of the service completed as of the balance sheet date. Invoices for freight transportation services are generally issued to customers and paid within 30 days or less. Customer incentives, which are primarily provided for shipping a specified cumulative volume or shipping to/from specific locations, are recorded as a reduction to revenue on a pro-rata basis based on actual or projected future customer shipments.


BRK.A Notes to Consolidated Financial Statements (1)Significant accounting policies and practices (o)Revenue recognition

Utilities and energy revenues derive primarily from regulated electricity and natural gas sales and sales of fuel. Regulated electricity and natural gas revenues are primarily tariff-based sales arrangements approved by various regulatory commissions. These tariff-based revenues are mainly comprised of energy, transmission, distribution and natural gas and have performance obligations to deliver energy products and services to customers which are satisfied over time as energy is delivered or services are provided. Such revenues are equivalent to the amounts we have the right to invoice and correspond directly with the value to the customer of the performance to date and include billed and unbilled amounts. Payments from customers are generally due within 30 days of billing. Rates charged for regulated energy products and services are established by regulators or contractual arrangements that establish the transaction price, as well as the allocation of price among the separate performance obligations. When preliminary regulated rates are permitted to be billed prior to final approval by the applicable regulator, certain revenue collected may be subject to refund and a liability for estimated refunds is accrued. Nonregulated energy revenues include fuel sales, and to a lesser extent, renewable energy and other products. Fuels sold include diesel, gasoline and related products sold on a retail and wholesale basis. Fuel sales are recognized at the point-in-time when the product is delivered, and control is transferred to the customer, and include related excise taxes.


Other service revenues derive from contracts with customers in which performance obligations are satisfied over time, where customers receive and consume benefits as we perform the services or at a point in time when the services are completed. Other service revenues primarily derive from real estate brokerage, automotive repair, aircraft management, aviation training, franchising activities and news distribution.


BRK.A Notes to Consolidated Financial Statements (1)Significant accounting policies and practices (o)Revenue recognition (p)Losses and loss adjustment expenses

Leasing revenue is generally recognized ratably over the term of the lease or based on usage, if applicable under the terms of the contract. A substantial portion of our lessor contracts are classified as operating leases.


We record liabilities for unpaid losses and loss adjustment expenses under property/casualty insurance and reinsurance contracts for loss events that have occurred on or before the balance sheet date. Such liabilities represent the estimated ultimate payment amounts without discounting for time value.


BRK.A Notes to Consolidated Financial Statements (1)Significant accounting policies and practices (o)Revenue recognition (p)Losses and loss adjustment expenses (q)Retroactive reinsurance contracts

We base liability estimates on (1) loss reports from policyholders and cedents, (2) individual case estimates and (3) estimates of incurred but not reported losses. Losses and loss adjustment expenses in the Consolidated Statements of Earnings include paid claims, claim settlement costs and changes in estimated claim liabilities. Losses and loss adjustment expenses in the Consolidated Statements of Earnings are stated net of amounts recovered and estimates of amounts recoverable under ceded reinsurance contracts. Reinsurance contracts do not relieve the ceding company of its obligations to indemnify policyholders with respect to the underlying insurance and reinsurance contracts.


BRK.A Notes to Consolidated Financial Statements (1)Significant accounting policies and practices (o)Revenue recognition (p)Losses and loss adjustment expenses (q)Retroactive reinsurance contracts (r)Insurance policy acquisition costs

We record liabilities for unpaid losses and loss adjustment expenses under short duration retroactive reinsurance contracts consistent with property/casualty insurance and reinsurance contracts described in Note 1(p). With respect to retroactive reinsurance contracts, we also record deferred charge assets at the inception of the contracts, representing the excess, if any, of the estimated ultimate claim liabilities over the premiums earned. We subsequently amortize the deferred charge assets over the expected claim settlement periods using the interest method. Changes to the estimated timing or amount of future loss payments also produce changes in deferred charge assets. We apply changes in such estimates retrospectively and the resulting changes in deferred charge assets, together with periodic amortization, are included in insurance losses and loss adjustment expenses in the Consolidated Statements of Earnings.


We capitalize the direct incremental costs that relate to the successful sale of insurance contracts, subject to ultimate recoverability. Direct incremental acquisition costs include commissions, premium taxes and certain other costs associated with successful efforts. We expense all other underwriting costs as incurred. For short duration property and casualty insurance contracts, we amortize deferred policy acquisition costs over the contract term as the related premiums are earned. For long-duration life and health insurance contracts, we amortize deferred policy acquisition costs at a constant level based on the expected amount of insurance in-force and the expected term of the contract using the assumptions consistent with those used in determining related insurance liabilities. Deferred policy acquisition costs are included in other assets and were approximately $4.6 billion and $3.8 billion at December 31, 2023 and 2022, respectively, of which $3.9 billion and $3.2 billion, respectively, related to property and casualty insurance contracts.


BRK.A Notes to Consolidated Financial Statements (1)Significant accounting policies and practices (s)Life, annuity and health insurance benefits

Liabilities for life, annuity and health insurance benefits under long-duration insurance contracts represent the present value of expected future cash outflows from future benefit payments and non-acquisition variable expenses, less the present value of expected future “net premiums” which is the portion of gross premiums required to provide for all expected future benefits and variable expenses. Periodic payment and annuity reinsurance contracts are regarded as limited payment contracts under GAAP. Such liabilities include the present value of expected future payments based on the discount rates used to measure benefit liabilities and a deferred profit liability, representing the unamortized excess of gross premiums received over the net premiums established at the inception of the contract.


BRK.A Notes to Consolidated Financial Statements (1)Significant accounting policies and practices (s)Life, annuity and health insurance benefits (t)Regulated utilities and energy businesses

In estimating future cash flows, we consider the timing and amount of future claims, premiums and expenses, which require estimates of future investment yields, expected mortality, morbidity and lapse rates. Cash flow assumptions are reviewed at least annually, with the effects of assumption changes recorded in earnings. The discount rate assumptions used to measure benefit liabilities are revised each reporting period based on the prevailing upper-medium grade corporate bond yields (generally single-A rated credit ratings) that reflect the duration characteristics and currency attributes of the liabilities. In measuring benefit liabilities, we generally group contracts by contract issue year. The effects of changes in discount rates are recorded in other comprehensive income.


Certain energy subsidiaries prepare their financial statements in accordance with authoritative guidance for regulated operations, reflecting the economic effects of regulation from the ability to recover certain costs from customers and the requirement to return revenues to customers in the future through the regulated rate-setting process. Accordingly, certain costs are deferred as regulatory assets and certain income is accrued as regulatory liabilities.


BRK.A Notes to Consolidated Financial Statements (1)Significant accounting policies and practices (s)Life, annuity and health insurance benefits (t)Regulated utilities and energy businesses (u)Foreign currency

Regulatory assets and liabilities will be amortized into operating expenses and revenues over various future periods. Regulatory assets and liabilities are continually assessed for probable future inclusion in regulatory rates by considering factors such as applicable regulatory or legislative changes and recent rate orders received by other regulated entities. If future inclusion in regulatory rates ceases to be probable, the amount no longer probable of inclusion in regulatory rates is charged or credited to earnings (or other comprehensive income, if applicable) or returned to customers.


BRK.A Notes to Consolidated Financial Statements (1)Significant accounting policies and practices (s)Life, annuity and health insurance benefits (t)Regulated utilities and energy businesses (u)Foreign currency (v)Income taxes

The accounts of certain subsidiaries are measured using functional currencies other than the U.S. Dollar. Revenues and expenses in the financial statements of these subsidiaries are translated into U.S. Dollars at the average exchange rate for the period and assets and liabilities are translated at the exchange rate as of the end of the reporting period. The net effects of translating the financial statements of these subsidiaries are included in shareholders’ equity as a component of accumulated other comprehensive income. Gains and losses arising from transactions denominated in a currency other than the functional currency of the entity, including gains and losses from the remeasurement of assets and liabilities due to changes in currency exchange rates, are included in earnings.


Berkshire files a consolidated federal income tax return in the U.S., which includes eligible subsidiaries. In addition, we file income tax returns in U.S. state and local and in foreign jurisdictions. Provisions for current income tax liabilities are calculated and accrued on income and expense amounts expected to be included in the income tax returns for the current year. Income taxes reported in earnings also include deferred income tax provisions.


Deferred income tax assets and liabilities are computed on differences between the financial statement bases and tax bases of assets and liabilities at the enacted tax rates. Changes in deferred income tax assets and liabilities associated with components of other comprehensive income are charged or credited directly to other comprehensive income. Otherwise, changes in deferred income tax assets and liabilities are included as a component of income tax expense. The effect on deferred income tax assets and liabilities attributable to changes in enacted tax rates are charged or credited to income tax expense in the period of enactment. Valuation allowances are established for certain deferred income tax assets when realization is not likely.


Liabilities are established for uncertain tax positions taken or positions expected to be taken in income tax returns when such positions, in our judgment, do not meet a more-likely-than-not threshold based on the technical merits of the positions. Estimated interest and penalties related to uncertain tax positions are included as a component of income tax expense.


BRK.A Notes to Consolidated Financial Statements (1)Significant accounting policies and practices (w)Accounting pronouncement adopted in 2023

We adopted Accounting Standards Update 2018-12, “Targeted Improvements to the Accounting for Long-Duration Contracts” (“ASU 2018-12”), as of January 1, 2023, which modified the accounting, reporting and disclosures related to our long-duration insurance contracts. See Note 1(s). ASU 2018-12 was applied retrospectively as of January 1, 2021 (the “transition date”) to contracts in-force as of the transition date. As of the transition date, the after-tax impact of changes in cash flow assumptions were recorded in retained earnings and the after-tax effect of changes in discount rate assumptions were recorded in accumulated other comprehensive income.


Certain items in the accompanying Consolidated Financial Statements in 2022 and 2021 were revised in connection with the retrospective adoption. The revisions in 2022 and 2021 were primarily attributable to the effects of discount rate changes, which were recorded in accumulated other comprehensive income, and are shown in the accompanying Consolidated Statements of Comprehensive Income and Statements of Changes in Shareholders’ Equity. We also increased previously reported net earnings attributable to Berkshire Hathaway shareholders by $142 million in 2021 and $60 million in 2022. We believe such effects are immaterial to our Consolidated Financial statements.


A summary of the effects of adopting ASU 2018-12 on selected financial statement line items as of the transition date follows (in millions). ####Balance at December 31, 2020######Increase (decrease)######Balance at January 1, 2021## Life, annuity and health insurance benefits##$##21,616####$##7,220####$##28,836## Other policyholder liabilities####8,670######1,697######10,367## Income taxes, principally deferred####74,098######(1,695##)####72,403## Accumulated other comprehensive income####(4,243##)####(5,751##)####(9,994##) Retained earnings####444,626######(677##)####443,949## Berkshire Hathaway shareholders’ equity####443,164######(6,428##)####436,736##


(x) Accounting pronouncements to be adopted subsequent to December 31, 2023


In March 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2023-02, “Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method” (“ASU 2023-02”). ASU 2023-02 permits reporting entities to elect to account for tax equity investments from which the income tax credits are received using the proportional amortization method at the program level if certain conditions are met. Currently, the proportional amortization method is limited to certain affordable housing tax credit investments. ASU 2023-02 is effective for fiscal years beginning after December 15, 2023. We believe that the adoption of ASU 2023-02 will not have a material effect on our Consolidated Financial Statements.


In November 2023, the FASB issued Accounting Standards Update 2023-07, “Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which requires disclosures of significant expenses by segment and interim disclosure of items that were previously required on an annual basis. ASU 2023-07 is to be applied on a retrospective basis and is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. We are evaluating the impact of ASU 2023-07 on disclosures in our Consolidated Financial Statements.


In December 2023, the FASB issued Accounting Standards Update 2023-09, “Improvements to Income Tax Disclosures” (“ASU 2023-09”), which provides for additional disclosures primarily related to the income tax rate reconciliations and income taxes paid. ASU 2023-09 requires entities to annually disclose the income tax rate reconciliation using both amounts and percentages, considering several categories of reconciling items, including state and local income taxes, foreign tax effects, tax credits and nontaxable or nondeductible items, among others. Disclosure of the reconciling items is subject to a quantitative threshold and disaggregation by nature and jurisdiction. ASU 2023-09 also requires entities to disclose net income taxes paid or received to federal, state and foreign jurisdictions, as well as by individual jurisdiction, subject to a five percent quantitative threshold. ASU 2023-09 may be adopted on a prospective or retrospective basis and is effective for fiscal years beginning after December 15, 2024 with early adoption permitted. We are evaluating the impact of ASU 2023-09 on disclosures in our Consolidated Financial Statements.


BRK.A Notes to Consolidated Financial Statements (2)Significant business acquisitions

Our long-held acquisition strategy is to acquire businesses that have consistent earning power, good returns on equity and able and honest management. Financial results attributable to business acquisitions are included in our Consolidated Financial Statements beginning on their respective acquisition dates.


On January 31, 2023, we acquired an additional 41.4% interest in Pilot Travel Centers, LLC (“PTC”) for approximately $8.2 billion. The acquisition increased our interest to 80%, representing a controlling interest in PTC for financial reporting purposes as of that date. We began consolidating PTC’s financial statements in our Consolidated Financial Statements on February 1, 2023. Since PTC’s most significant business activities involve purchasing and selling fuel (energy) on a wholesale and retail basis, and other energy-related businesses, we include PTC within the railroad, utilities and energy sections of our Consolidated Balance Sheet and Consolidated Statement of Earnings beginning February 1, 2023. We previously owned a 38.6% interest in PTC, which we accounted for under the equity method through the end of January 2023.


PTC operates more than 650 travel center and 75 fuel-only locations across 44 U.S. states and five Canadian provinces, primarily under the names Pilot or Flying J, as well as large wholesale fuel and fuel marketing businesses in the U.S. PTC also sells diesel fuel at other locations in the U.S. and Canada through various arrangements with third party travel centers and operates a water disposal business in the oil fields sector. PTC’s revenues and net earnings attributable to Berkshire shareholders for the eleven months ending December 31, 2023 were $51.7 billion and $603 million, respectively. In applying the acquisition method of accounting, we remeasured our previously held 38.6% investment in PTC to fair value and recognized a one-time, non-cash remeasurement gain of approximately $3.0 billion, representing the excess of the fair value of that interest over the carrying value under the equity method. In addition, we valued the noncontrolling interests at fair value as of January 31, 2023.


Pilot Corporation, the holder of the remaining noncontrolling interests in PTC, had an annual option to require us to redeem for cash all or a portion of its interests beginning in 2024. The redemption price was to be based on a multiple of PTC’s earnings for the preceding year, with specified other adjustments, including the amount of PTC’s net debt. Pilot Corporation filed a lawsuit against Berkshire during the fourth quarter of 2023 concerning the application of certain terms underlying the formula for calculating the purchase price to be paid upon exercise of the option. Subsequently, Berkshire filed a counterclaim against Pilot Corporation. All litigation between Pilot Corporation and Berkshire was settled in January 2024, and we acquired Pilot Corporation’s noncontrolling interest in PTC for $2.6 billion, increasing our interest in PTC to 100%.


A summary of the values of PTC’s assets acquired, liabilities assumed and redeemable noncontrolling interests as of January 31, 2023 are summarized as follows (in millions). Goodwill from this acquisition is expected to be deductible for income tax purposes. Assets acquired########Liabilities assumed and noncontrolling interests## Property, plant and equipment##$##8,015##Notes payable##$##5,876 Goodwill####6,605##Other liabilities####4,918 Other intangible assets####6,853###### Other assets####7,047##Liabilities assumed####10,794 ######Noncontrolling interests, predominantly redeemable####3,361 Assets acquired##$##28,520##Liabilities assumed and noncontrolling interests##$##14,155 Net assets##$##14,365######