BERKSHIRE HATHAWAY INC (BRK-A, BRK-B)
Berkshire Hathaway’s 2024 10-K underscores a diversified empire dominated by its insurance float, led by GEICO’s auto profit and underwriting gains from its primary and reinsurance groups. Investment yields rose sharply on record short-term balances. BNSF reported flat revenues with modest cost s...
Berkshire Hathaway 2024 10-K: A Comprehensive Review
Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) remains one of Wall Street’s most closely watched conglomerates, presided over by Warren Buffett and led operationally by Vice Chairmen Greg Abel (non-insurance) and Ajit Jain (insurance). Berkshire’s decentralized model spans property & casualty insurance, freight rail transportation, regulated utilities & energy, manufacturing, services and retailing. The firm’s hallmark is a strong insurance float, deployed largely into equity securities, short-term investments and fixed income, with an emphasis on safety over yield.
Warren.AI 💰 8.5 / 10
Key Highlights
• Net earnings attributable to Berkshire shareholders for the year ended December 31, 2024: $88.995 billion (2023: $96.223 billion; 2022: $(22.759 billion)). • Underwriting profit (pre-tax) across GEICO, BH Primary and BH Reinsurance: $11.4 billion in 2024 vs. $6.9 billion in 2023 and a slight loss in 2022. • Insurance investment income (net of taxes & non-controlling interests): $13.67 billion in 2024 vs. $9.57 billion in 2023 and $6.48 billion in 2022. • BNSF Railway net income: $5.031 billion in 2024, down 1.1% from 2023 ($5.087 billion). • Berkshire Hathaway Energy (BHE) net earnings to Berkshire: $3.73 billion in 2024, up from $2.33 billion in 2023. • Investment gains (realized & unrealized) of $41.56 billion in 2024 vs. $58.87 billion in 2023 and $(53.61 billion) in 2022.
1. Business Overview
Insurance Operations
GEICO: The direct‐to‐consumer auto insurer wrote $42.9 billion of premiums in 2024, earned a pre-tax underwriting profit of $7.8 billion (loss of $1.88 billion in 2022) and achieved a loss ratio of 71.8%. Interest‐earning float grew to $171 billion. GEICO’s investment income surged on higher short-term yields and treasury bill balances.
Berkshire Hathaway Primary Group: A cohort of specialty and commercial insurers (BHSI, BHHC, RSUI, CapSpecialty, MedPro, GUARD, NICO Primary, BH Direct and USLI) generated $18.7 billion of premiums earned and a pre-tax underwriting profit of $855 million in 2024.
Berkshire Hathaway Reinsurance Group: Through National Indemnity, General Re, TransRe and BHLN, the group achieved a pre-tax underwriting profit of $2.74 billion. Retroactive reinsurance and periodic payment annuity policies remain in run-off, with pre-tax underwriting losses of $846 million and $597 million respectively (exclusive of currency gains/losses).
Investments & Float
Berkshire’s insurance float, which funds investment portfolios, stood at $171 billion at year-end 2024. The conglomerate’s insurance businesses generated negative flattening underwriting costs of float, meaning underwriting profits more than offset claim costs. Investment allocations remain equity-heavy (53% of insurance investments), with significant stakes in Apple, Bank of America, Occidental, Kraft Heinz and other large positions. Cash, equivalents and U.S. Treasury Bills of $213 billion underscore the preference for liquidity.
Burlington Northern Santa Fe (BNSF)
BNSF’s Class I freight railroad system moved 9.59 million carloads/units in 2024 (up 6.5% vs. 2023). Operating revenues of $23.36 billion were flat, while operating earnings of $7.47 billion edged up 0.7%. The railroad saw volume growth in consumer and agricultural products but continued weakness in coal traffic. Cost productivity improvements offset higher compensation and litigation accruals.
Berkshire Hathaway Energy (BHE)
U.S. Utilities (PacifiCorp, MEC, NV Energy) reported combined net earnings attributable to BHE of $1.96 billion in 2024 vs. $906 million in 2023. Wildfire accruals declined sharply from $1.7 billion in 2023 to $346 million in 2024. Retail volumes rose 3.6%, and margin growth was driven by regulatory rate adjustments in several jurisdictions.
Natural Gas Pipelines (Northern Natural, Kern River, BHE GT&S, others) contributed $1.23 billion in 2024 vs. $1.08 billion in 2023, reflecting rate case wins and reduction in noncontrolling interests.
Other Energy (Northern Powergrid UK, AltaLink Canada, renewables portfolio) generated $1.33 billion of net earnings in 2024 vs. $1.02 billion in 2023, aided by tariff escalations in the UK and Alberta and strong renewable dispatch volumes.
HomeServices of America: The real estate brokerage segment incurred modest losses due to lower transaction volumes and one-time litigation charges.
Manufacturing, Services & Retailing
Manufacturing: Revenues rose 2.7% to $77.2 billion in 2024. Precision Castparts posted 12% revenue growth, Lubrizol held flat, IMC faced a 2.2% revenue dip and Marmon revenues dipped 1.7%. Pre-tax profit margins in manufacturing improved to 16.8%.
Service & Retail: Aggregate revenues declined 3.9% to $138.7 billion in 2024. Gains at FlightSafety, NetJets and TTI were offset by softness at Pilot Travel Centers (now 100% owned), automotive dealers, home furnishing retailers and See’s Candy, which faced supply constraints.
2. Financial Strength and Capital Allocation
- Shareholder Equity: $387 billion at 12/31/24 vs. $328 billion at 12/31/23.
- Cash & Equivalents: Berkshire held $172 billion in cash, short-term investments and Treasury Bills on a consolidated basis.
- Debt: BNSF and BHE maintain investment-grade debt, with ample liquidity lines. Berkshire carries no corporate debt.
- Share Repurchases: Berkshire repurchases shares opportunistically when market price is below conservative intrinsic value. No shares repurchased in Q4'24; $30 billion cash floor.
- Insurance Ratings: AA+ (S&P); A++ (A.M. Best). Consolidated statutory surplus of ~ $310 billion at 12/31/24.
3. Risks & Outlook
Key Risks: Catastrophe exposure, underwriting earnings volatility, equity market swings, cybersecurity threats, succession planning, regulatory changes, GHG/ESG regulations, economic cycles.
Outlook: Berkshires strong float, prudent investment allocation, favored manufacturing and energy franchises and fortress balance sheet provide considerable competitive advantage. While near-term volatility in insurance underwriting results and investment income will persist, the overall free-cash-flow engine and capital-light manufacturing and services businesses offer stable earnings over the cycle. Continued disciplined capital deployment—share repurchases and acquisitions—should further enhance intrinsic value.
Investment Potential: On a scale of 1 (no potential) to 10 (100% return opportunity), Berkshire s long-run return prospects remain compelling at 8.5, driven by exceptional franchises, management’s record of capital allocation and robust balance sheet.
Net Profit: Berkshire Hathaway Inc. generated $88.995 billion of net earnings attributable to shareholders for the year ended December 31, 2024.