BRK-BBerkshire Hathaway

Item 402(v)(2)(iii) of Regulation S-K specifies the calculations required to derive compensation actually paid. These calculations relate exclusively to defined benefit and actuarial pension plan and stock and option award amounts.

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It appears, however, that in calculating compensation actually paid for your principal executive officer, you have subtracted the amounts included in the “All Other Compensation” column of the Summary Compensation Table. Please confirm that, in future filings, the compensation actually paid calculations will be conducted in accordance with Item 402(v)(2)(iii) of Regulation S-K. In addition, compensation actually paid calculations must be included in a footnote, pursuant to Item 402(v)(3) of Regulation S-K. The net earnings (loss) amounts included in your pay versus performance table for the fiscal years presented do not agree to the net earnings (loss) amounts reported in your audited GAAP financial statements. It appears that you use net earnings (loss) attributable 2. to Berkshire Hathaway shareholders, as reported in your audited GAAP financial statements. Please confirm that, in future filings, you will include net earnings (loss) without adjustment for all years covered by the table. See Item 402(v)(2)(v) of Regulation S-K and refer to Regulation S-K Compliance and Disclosure Interpretation 128D.08. 3. Please confirm that, in future filings, you will provide disclosure regarding the relationship between compensation actually paid and net earnings (loss). See Item 402(v)(5)(ii) of Regulation S-K. If you include information in addition to that specified in Item 402(v) of Regulation S-K, such as the relationship between compensation actually paid and operating earnings, please ensure that such disclosure is “clearly identified as supplemental, not misleading, and not presented with greater prominence than the required disclosure.” See Pay Versus Performance, Release No. 34-95607 (August 25, 2022) [87 FR 55134 (September 8, 2022)] at Section II.F.3.

The purpose of this letter is to respond to the Division of Corporation Finance’s letter dated August 9, 2024 (“Corp Finance Letter”). As requested, we confirm that we will revise our Pay Versus Performance disclosures in future proxy statements in accordance with the topics discussed in the Corp Finance Letter. Read in the reply ↗

Please identify the principal executive officer, as well as each named executive officer included in the calculation of average non-PEO NEO compensation, and the fiscal years in which such persons are included. You may provide this information in a footnote to the pay versus performance table. See Regulation S-K Item 402(v)(3).

The purpose of this letter is to respond to the Division of Corporation Finance’s letter dated July 28, 2023 (“Corp Finance Letter”). As requested, we confirm that we will enhance Pay Versus Performance disclosures in future proxy statements in accordance with topics discussed in the Corp Finance Letter. One letter for all the questions, without numbered answers. Read the reply ↗

It appears that you have not provided the relationship disclosures required by Regulation S-K Item 402(v)(5). Please provide this required disclosure. Although you may provide this information graphically, narratively, or a combination of the two, this disclosure must be separate from the pay versus performance table required by Regulation S-K Item 402(v)(1) and must provide a clear description of each separate

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relationship indicated in subparagraphs (i), (ii), and (iv) of Regulation S-K Item 402(v)(5). Please note, it is not sufficient to state that no relationship exists, even if a particular measure is not used in setting compensation.

See the reply above.

Please expand upon the role that your Lead Independent Director plays in the leadership of the board. For example, please enhance your disclosure to address whether or not your Lead Independent Director may: • represent the board in communications with shareholders and other stakeholders; • require board consideration of, and/or override your CEO on, any risk matters; or • provide input on design of the board itself.

The purpose of this letter is to respond to the Division of Corporation Finance’s letter dated September 2, 2022 (“Corp Finance Letter”). As requested, we confirm that we will enhance future proxy disclosures in accordance with topics discussed in the Corp Finance Letter as well as to any material developments to Berkshire Hathaway’s risk oversight structure. One letter for all the questions, without numbered answers. Read the reply ↗

Please expand upon how your board administers its risk oversight function. For example, please disclose: • why your board elected to retain responsibility for risk oversight rather than assign oversight to a board committee; • the timeframe over which you evaluate risks (e.g., short-term, intermediate-term, or long-term) and how you apply different oversight standards based upon the immediacy of the risk assessed; •

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whether you consult with outside advisors and experts to anticipate future threats and trends, and how often you re-assess your risk environment; • how the board interacts with management to address existing risks and identify significant emerging risks; • whether you have a Chief Compliance Officer and to whom this position reports; and • how your risk oversight process aligns with your disclosure controls and procedures.

See the reply above.

We note your disclosure related to Goodwill and indefinite-lived intangible asset impairment here and on page 40 of your Form 10-Q for the Quarterly Period ended March 31, 2021. In regards to your goodwill and the related impairment evaluation, please revise your future filings to identify the at-risk reporting units (i.e., fair value is not substantially in excess of the carrying value) and disclose the percentage

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by which fair value exceeded carrying value as of the date of the most recent test and the amount of goodwill allocated to the reporting unit.

In future filings beginning with the quarterly report on Form 10-Q for the period ended June 30, 2021, we will revise disclosures to identify the at-risk reporting units (i.e. where we believe the fair value is not substantially in excess of the carrying value) and disclose the percentage by which fair value exceeded carrying value as of the date of the most recent impairment test and the amount of goodwill allocated to the reporting unit. Read in the reply ↗

With respect to your Geico claims development table presented on page K-88, please tell us why you do not provide disaggregated claims development tables for auto liability and physical damage. In this regard, we note your disclosure on page K-87 that your estimates for liability coverage are more uncertain primarily due to the longer claim-tails, the greater chance of protracted litigation and the incompleteness of

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facts at the time the case estimate is first established. Please also provide us the information that would be provided in the separate tables for auto liability and physical damage, if available. Note 5. Equity method investments, page 9

GEICO pays most physical damage claims shortly after the occurrence date. For the 2018 accident year, physical damage claims representing approximately 97% of physical damage incurred losses and ALAE (approximately $8.3 billion) were paid in 2018. On average, approximately 98% of physical damage incurred losses and ALAE are paid during the accident year. Unpaid physical damage losses and ALAE at December 31, 2018 were an insignificant component of GEICO’s consolidated unpaid losses and ALAE.

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While more uncertain than physical damage losses, approximately 96% of auto liability losses and ALAE incurred are normally paid within five years. As such, we did not believe that disclosing separate tables for GEICO’s physical damage and auto liability claims would provide more meaningful or useful information when compared to the combined tables disclosed in Note 15.

Supplemental unaudited average historical claims duration information based on the net incurred and paid losses and ALAE data by accident year follows. The percentages show the average portions of net losses and ALAE paid by each succeeding year, with year 1 representing the current accident year.

Average Annual Percentage Payout of Incurred Losses by Age, Net of

Reinsurance

In Year

GEICO Consolidated *

61.7

%

19.6

8.1

4.9

2.8

GEICO Physical Damage

97.9

2.3

-0.2

0.0

GEICO Auto Liability

42.5

28.9

12.6

7.5

4.2

*

As disclosed in Note 15 to the December 31, 2018 Consolidated Financial Statements. Provided for comparison.

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As requested, GEICO’s incurred and paid losses and ALAE, net of reinsurance, are summarized by accident year below for physical damage and auto liability claims as of December 31, 2018. Dollars are in millions.

Physical Damage

Accident

Year

Incurred losses and ALAE through December 31,

IBNR and Case

Development

Liabilities

Cumulative

Number of

Reported Claims

(in thousands)

2014*

2015*

2016*

2017*

2018

2014

$

5,303

5,224

5,216

5,218

5,223

5,878

2015

6,135

6,049

6,041

6,046

6,595

2016

7,079

6,982

6,992

7,201

2017

8,198

8,002

8,216

8,345

321

8,451

Incurred losses and ALAE

34,608

Cumulative Paid Losses and ALAE through December 31,

5,148

5,242

5,220

5,958

6,067

6,044

6,050

6,851

7,008

7,001

7,870

8,030

8,078

Paid losses and ALAE

34,382

Net unpaid losses and ALAE for 2014 – 2018 accident years

226

Net unpaid losses and ALAE for accident years before 2014

(7

)

Net unpaid losses and ALAE

219

Unaudited supplemental information.

Auto Liability

Incurred Losses and ALAE through December 31,

9,220

9,196

9,193

9,215

9,275

137

2,097

10,590

10,666

10,785

10,824

298

2,329

11,800

12,184

12,149

783

2,431

14,095

13,864

2,112

2,599

15,383

4,217

2,517

61,495

3,981

6,694

7,806

8,512

8,914

4,579

7,694

9,133

10,007

5,069

8,716

10,330

5,806

9,944

6,218

45,413

16,082

510

16,592

Unaudited supplemental information

While we believe that the disclosures provided in Note 15 to the December 31, 2018 Consolidated Financial Statements were reasonable and informative, we intend to include separate disclosure of the physical damage and auto liability components of GEICO’s losses and ALAE data in future annual filings, in lieu of consolidated data. Pursuant to paragraph 944-40-50-4B of Accounting Standards Codification 944 Financial Services – Insurance, the disclosure about claims development by accident year should present information for the number of years for which claims incurred typically remain outstanding, but need not exceed 10 years. Substantially all of GEICO’s physical damage claims are paid within two years of the occurrence, including an average payout of 98% during the accident year. Therefore, data for the physical damage claims will be limited to no more than two years. The preceding table includes five years of data for illustrative purposes.

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We note that the carrying value of your equity method investment in Kraft Heinz exceeds its fair value by approximately $3.1 billion as of March 31, 2019. Please tell us how you considered the guidance in ASC 323-10-35-32 in determining that this loss in value of your investment was not other than temporary.

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In this regard, we acknowledge that the carrying value of your investment as of March 31, 2019 does not include your share of Kraft Heinz's first quarter 2019 earnings/(losses) as they have not yet been reported. However, we also note that Kraft Heinz has yet to file their 2018 Annual Report and recently announced a restatement related to the 2016 and 2017 annual periods and 2018 quarterly periods. Please include an assessment of these factors as potential indicators of other-than-temporary impairment in your response.

In evaluating whether or not an impairment loss should be recognized as of March 31, 2019, Berkshire considered ASC 323-10-35-32, which provides:

“A loss in value of an investment that is other than a temporary decline shall be recognized. Evidence of a loss in value might include, but would not necessarily be limited to, absence of an ability to recover the carrying amount of the investment or inability of the investee to sustain an earnings capacity that would justify the carrying amount of the investment.

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A current fair value of an investment that is less than its carrying amount may indicate a loss in value of the investment. However, a decline in the quoted market price below the carrying amount or the existence of operating losses is not necessarily indicative of a loss in value that is other than temporary. (Emphasis added) All are factors that shall be evaluated.”

Berkshire considered the following factors in assessing the excess of carrying value over fair value as of March 31, 2019:

•

The magnitude of the excess of carrying value over fair value and the length of time that such excess existed.

As of December 31, 2018, Berkshire’s carrying value of Kraft Heinz was $13.8 billion and market value was $14.0 billion ($43.04 per share).

Kraft Heinz shares traded at or above the year-end market price until

February 22, 2019. On February 21, 2019, Kraft Heinz issued a press release containing unaudited year-end 2018 financial information. Kraft Heinz also disclosed that the Commission was investigating certain of its accounting and financial reporting practices. The market price of its common stock declined $13.23 per share on February 22 to $34.95 and the market price was $32.65 per share at the end of the first quarter. The fair value of Berkshire’s investment in Kraft Heinz as of March 31, 2019 was approximately $10.6 billion or 22% less than Berkshire’s carrying value of $13.7 billion.

Operating results of the investee.

In February 2019, Kraft Heinz disclosed a pre-tax loss of

$14.4 billion (unaudited) for the fourth quarter of 2018, which included pre-tax intangible asset and goodwill impairment losses of $15.4 billion. For the 2018 year, Kraft Heinz disclosed an unaudited pre-tax loss of $11.3 billion, which included pre-tax intangible asset and goodwill impairment losses of $15.9 billion. The impairment charges recorded in 2018 appear to relate to the Kraft Foods Group acquisition in 2015. Pre-tax earnings in 2018 before impairment charges were $4.6 billion.

Kraft Heinz has not experienced a series of operating losses. Previously reported cumulative pre-tax earnings over the three years ending September 29, 2018 were approximately $14.7 billion.

Kraft Heinz disclosed its intentions to divest certain non-core businesses and to deleverage its balance sheet.

Kraft Heinz continues to own a large number of well-known products and brands that we believe will produce considerable earnings in the future.

Kraft Heinz reduced the quarterly dividend on its common stock from $0.625 to $0.40 per share in 2019. In the first quarter of 2019, Berkshire received a dividend of approximately $130 million from Kraft Heinz. While lower than in recent years, such dividends are significant and demonstrate Kraft Heinz’s ability to generate cash flow in the future.

Ability and intent to hold until recovery.

Berkshire has not disposed of any shares of Kraft Heinz common stock and currently has no intention to do so.

Berkshire also has the ability to hold its Kraft Heinz shares until fair value recovers and exceeds carrying value.

For these reasons, we concluded that as of March 31, 2019, the excess of carrying value over fair value of Berkshire’s investment in Kraft Heinz common stock was, in our judgment, temporary and that no impairment loss should be recorded in

Berkshire’s first quarter 2019 financial statements. While we concluded that recognition of an impairment loss was not required at March 31, 2019, we may determine that an impairment loss will be required in a subsequent accounting period.

Such determination will be based on the prevailing facts and circumstances, including those related to Kraft Heinz’s reported results and disclosures, as well as from changes in the market price of its common stock.

As noted by the Commission, Kraft Heinz has not yet released its audited financial statements for 2018 and its financial results for the first quarter of 2019 were not available to Berkshire. As disclosed in Berkshire’s March 31, 2019 Form 10-Q, Berkshire will record its share of Kraft Heinz’s earnings (or losses) and other comprehensive income for 2019 as well as its share of the cumulative impact on earnings from the expected restatements by Kraft Heinz of certain of its prior year financial statements in the period such information becomes available. On May 6,

2019, Kraft Heinz filed a Form 8-K, which contained the information summarized below.

Kraft Heinz disclosed its intention to restate its financial statements from 2016 through 2018. In that disclosure, Kraft Heinz provided the preliminary financial statement effects of those restatements, which produced an aggregate reduction in net income of $62 million over that three-year period. Based on that disclosure, we believe

Berkshire’s equity method share of these preliminary adjustments are quantitatively immaterial to Berkshire’s consolidated financial statements.

Kraft Heinz also disclosed that it expected to report two or more material weaknesses in internal control over its financial reporting.

This information, as well as other available information, will be considered in the future impairment evaluations.

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Please tell us why you believe it is appropriate to include “other” operations (apparently comprised of your Manufacturing, McLane Company and Service and Retailing operations) with your insurance operations in your balance sheets and statements of earnings. In this regard, we note that you separately provide balance sheet and statement of earnings information for what appears to be these operations in Mr.

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Buffett’s February 25, 2017 letter to shareholders on page 14 of your 2016 Annual Report. In your response, please tell us what is different between these “other” operations and your Railroad, Utilities and Energy and Finance and Financial Products operations to cause the latter two groups to be presented separately in your basic financial statements. Reference for us the authoritative literature you rely upon to support your presentation, including an analysis of the appropriate provisions of Articles 5 and 7 of Regulation S-X.

The presentations in the consolidated balance sheets and statements of earnings in Item 8 of Form 10-K reflect the significant industry diversification of our subsidiaries, which include significant businesses that fit into Articles 5 and 7 of Regulation S-X. Among these subsidiaries are insurance, regulated utilities and railroad, and finance and financial products businesses, which each possess unique characteristics. As a result, we developed a three-tiered approach for the balance sheet and statement of earnings presentations.

We have used this tiered presentation for the past 10 years.

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We believe these presentations provide a more meaningful and informative communication of our financial position and results of operations than traditional aggregate presentations. Our presentations utilize line item descriptions from Articles 5 and 7 to the extent applicable and material. Additional discussion on the unique elements in each of the three tiers follows.

Office of Healthcare and Insurance

United States Securities and

Exchange Commission

Page

Historically, the Insurance and Other businesses were weighted primarily to insurance, although that weighting has declined over the past decade, primarily due to business acquisitions. For instance, about 80% of the assets of our Insurance and Other businesses related to insurance operations at December 31, 2006 compared to about 60% at December 31, 2016. At December 31, 2016, insurance subsidiaries held approximately 90% of Insurance and Other business cash and investments. Such amount (approximately $206 billion) represented about 82% of insurance business assets. In addition, approximately 95% of our insurance business non-income tax liabilities were specifically identified in our balance sheet. Insurance businesses accounted for approximately 90% of Insurance and Other investment income and investment gains in 2016, and all underwriting-related revenues and expenses were specifically identified in the statements of earnings. Other businesses include manufacturing, service and retailing businesses, as well as the parent company. Except for the parent company, this group generally does not issue new debt.

The Railroad, Utilities and Energy businesses are regulated operations that possess material long-lived assets, and relatively significant levels of long-term debt to fund operations and capital expenditures. The debt of these entities is non-recourse to Berkshire and Berkshire regularly discloses that it does not guaranty and is not obligated to support the debt issued by the entities in this group. We believe these distinctions are important and justify the separate presentation in the consolidated balance sheets and statements of earnings.

The Finance and Financial Products businesses are currently concentrated in asset leasing

(railcars, trailers and furniture) and manufactured housing (construction and financing). We view each of these business activities as possessing significant financing elements pertaining to sizable portfolios of assets held for lease and manufactured housing installment loans. This group includes a wholly-owned financing subsidiary that provides funding to support the leasing business and the lending activities of the manufactured housing business. We believe this distinction is important and justifies the separate presentation in the consolidated balance sheets and statements of earnings.

To summarize, we believe that our consolidated balance sheet and statement of earnings presentations are informative and reasonable given our significant diversification and the unique characteristics of certain of our businesses. We also believe our existing balance sheet and statement of earnings formats comply with Regulation S-X. Were more traditional presentations used, we would eliminate or combine several identical or similar captions, which would condense the presentations, but we believe would reduce transparency. We also believe that traditional presentations would result in no new line items presented compared to our current three-tier presentations.

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Please tell us why it is appropriate to present your investments in U.S. Treasury Bills in a subtotal along with your cash and cash equivalents instead of classifying these investments as fixed maturity securities. Tell us how your presentation complies with Rules 7-03(a)1 and 7-03(a)2 of Regulation S-X and why you do not classify U.S. Treasury Bills as debt securities as defined in ASC 320-10-20.

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Reference for us the authoritative literature you relied upon to support your presentation.

U.S. Treasury Bills are highly liquid and in our view the safest alternative available for cash management purposes. The maximum maturity of U.S. Treasury Bills is 52 weeks and therefore these investments present minimal risk from interest rate changes.

Our balance sheet caption “U.S. Treasury Bills” includes U.S. Treasury Bills that were in excess of three months and within a year of maturity at the time of their acquisition.

Rest of the answer

Accordingly, we believe these holdings meet the definition of short-term investments under Rule 7-03(a)1(g)—Short-term investments, as clarified by Note 4 to the Rule, which indicates that such investments mature within one year. In addition, Rule 7-03(a)1(a), as clarified by Note 2 to the Rule, indicates that fixed maturity securities have maturities beyond one year. Our presentation of such holdings as a separate line item also reflects the significant concentration of our holdings as of December 31, 2016, which we believe is meaningful and relevant to financial statement users.

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Please tell us why you do not present sales revenues and service revenues on separate lines as stipulated in Rule 5-03(b)1 of Regulation S-X.

We concluded that service revenues were not significant in each period presented for purposes of separate disclosure in the consolidated statements of earnings. Rule 5-03(b) also provides that income under Rule 5-03(b)1, which is not more than 10% of the sum of the items may be combined with another class. Consolidated service revenues (including rental income) were less than 5% of gross revenues in each of the past three years.

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We intend to continue monitoring service revenue levels and, if significant, agree to present such amounts separately in the consolidated statement of earnings.

A summary of service revenues follows (dollars in millions):

2016

2015

2014

Insurance and Other

$

7,260

6,273

5,517

Finance and Financial Products (1)

3,240

3,053

2,907

Total service revenues

10,500

9,326

8,424

Total revenues

223,604

210,943

194,699

Percentage of service to total revenues

4.7

%

4.4

4.3

(1) Includes rental income of equipment and furniture leasing businesses.

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Please tell us how you account for your warrants to purchase 700 million shares of Bank of America common stock and reference for us the authoritative literature you rely upon to support your accounting. In your response tell us the fair value and cost of the warrants depicted in the table on this page and how you determined each amount.

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Also reconcile the cost and fair value to the apparent $10.5 billion intrinsic value inherent in the warrants as disclosed in Mr. Buffett’s February 25, 2017 letter to shareholders on page 19 of your 2016 Annual Report and explain why the fair value of all your other investments is not at least $10.5 billion greater than their cost.

In 2011, we acquired Bank of America perpetual preferred stock with a liquidation value of $5 billion and common stock warrants to acquire 700 million shares of Bank of America common stock. The preferred stock is callable by Bank of America beginning in May 2019. The warrants expire in 2021. We may exercise the warrants by paying $5 billion in cash or we may use the preferred stock as consideration for the cost of the warrant shares. The warrants are legally detached from the preferred stock and are exercisable separately.

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The preferred stock may be called by Bank of America without affecting the warrants.

In determining the applicable accounting for the warrants, we evaluated their terms and conditions and concluded they were freestanding financial instruments for accounting purposes based on the definition in ASC 480-10. The warrants can only be settled by physical delivery of shares and cannot be effectively net settled. Accordingly, the warrants did not meet the definition of a derivative under ASC 815-10-15-83, as one of the three criteria in that definition, the ability to net settle the contract, was not met. Therefore, we concluded the warrants were equity securities and we applied the guidance in ASC 944-325, which provides that equity securities are carried at fair value with the unrealized gains and losses reflected in other comprehensive income.

Since their acquisition, we have estimated the fair value of the warrants utilizing a warrant valuation model which has many of the same inputs as a call option valuation model. The warrant model also considers the potential dilution of the value of existing common stock upon exercising the warrants. As of

December 31, 2016, the common stock to be received upon the exercise of the warrants represented about 6.5% of the outstanding shares of Bank of America common stock on a diluted basis. Further, under the terms of our related investment agreement with Bank of America, we cannot enter into hedging transactions with respect to either the warrants or the common shares issuable upon exercise. Our valuation model includes a valuation discount for these restrictions.

The intrinsic value referred to in the Chairman’s letter represents the fair value of the underlying common stock at

December 31, 2016 reduced by the $5 billion exercise price. It does not include adjustments for potential stock price volatility, time value or certain other inputs used in the warrant valuation model.

The aggregate cost of the Bank of America investments was $5 billion, of which we allocated $4 billion to the preferred stock and $1 billion to the warrants based on our evaluation of the fair values at the acquisition date. At December 31, 2016, the estimated fair value of the warrants reflected in Note 5 to the consolidated financial statements was $9,597 million, which was $873 million less than the intrinsic value at December 31, 2016. The difference was primarily due to the impact of potential common stock price dilution upon exercise and valuation discount attributable to the contractual restrictions that prohibit us from entering into hedging transactions. As of December 31, 2016, the estimated fair value of the preferred stock was $4,862 million and, thus, the aggregate estimated fair value of the preferred stock and warrants was $14,459 million.

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Please tell us the types of contracts included in each of your General Re, BHRG and BH Primary claims development tables and explain how you determined your disclosures do not obscure useful information by aggregating contracts that have significantly different characteristics.

Rest of the question

In addition, specifically address the following in your response:  Tell us why the General Re claims development table includes workers’ compensation coverage when the disclosure beginning on page 3 does not appear to indicate that General Re writes this coverage.  Confirm that the health reinsurance portion of General Re’s life/health reinsurance business is included in its claims development table and that the life portion is excluded. If this is not true, tell us why.  Tell us how workers’ compensation, medical professional and commercial auto coverages in your BH Primary table have similar characteristics. Refer to ASC 944-40-50-4H.

Note 14 to the consolidated financial statements reflects a significant expansion of disclosures related to unpaid losses and loss adjustment expenses, and includes disaggregated accident year incurred and paid loss and allocated loss adjustment expenses (“ALAE”) information for certain business categories. The information in Note 14 relates to amounts reported in the consolidated balance sheets as losses and loss adjustment expenses and on amounts reported in the consolidated statements of earnings as insurance losses and loss adjustment expenses.

Rest of the answer

The amounts reported under these captions derive from property and casualty insurance and reinsurance contracts.

Our property and casualty insurance and reinsurance contracts include various lines of business or coverage, which are considered short-duration contracts under ASC 944. The caption “property and casualty” is consistent with the U.S. statutory reporting by property and casualty insurance companies and the format of the accident year data required by ASC 944-40-50 was based on schedules provided by U.S. property and casualty insurance companies to their regulators. In describing General Re’s business in Item 1 of Form 10-K, “property and casualty” was used merely to distinguish that business from life and health business. We consider workers’ compensation insurance as a form of casualty insurance.

In determining the level of disaggregated disclosures under ASC 944-40-50, we considered the guidance provided under ASC

944-40-55-9B and ASC 944-40-55-9C. The disaggregation of our business is consistent with our presentations for segment reporting in Note 23 to the consolidated financial statements, and with the presentations in Management’s Discussion and

Analysis with respect to underwriting results and critical accounting policies regarding unpaid losses and loss adjustment expenses. In our view, maintaining consistency with segment and management’s discussion presentations was important, particularly in the first year of the new disclosure requirements.

We provided disaggregated disclosures for General Re and BHRG, as each was disclosed separately in our segment note. However, there is overlap between these groups relative to the types of business written, processes and management. General Re and BHRG are primarily engaged in reinsurance and the types of contracts are similar. BHRG and General Re reinsure property and casualty risks. Coverages are provided under excess-of-loss and quota-share contracts and the risks assumed can be on a facultative or treaty basis. Under certain contracts, the coverage can apply to multiple lines of business written by the ceding company, whether property, casualty or combined, and the ceding company may not report loss data by line of business consistently, if at all. Further, line of business classifications used in non-U.S. jurisdictions may not be consistent with those in the U.S. In those instances, we allocate losses to coverage based on internal estimates, which may be broadly limited to property or casualty.

As of December 31, 2016, General Re’s and BHRG’s net unpaid losses and ALAE were primarily attributable to casualty coverages. General Re’s net unpaid losses and ALAE attributable to casualty coverages were about 85% of its $14.0 billion total, while BHRG’s liabilities attributable to casualty coverages were about 55% of its $10.2 billion total. We recognize that property claims usually have a shorter claim-tail than casualty claims. However, in our judgment, further disaggregation by line of business or contract type would not be as meaningful or useful to financial statement users as our disclosed aggregate information in understanding the potential uncertainty in the timing and amount of General Re’s and BHRG’s cash flows arising from unpaid losses and loss adjustment expenses.

All claim liabilities arising from life and health insurance contracts were included in life, annuity and health insurance benefits in our consolidated balance sheets. Such amounts are not included in the disclosures in Note 14. Depending on a contract’s terms, health insurance can be either a long-duration or short-duration contract under ASC 944. General

Re’s health insurance claim liabilities from short-duration contracts at December 31, 2016 were less than $350 million. We concluded such amounts were immaterial in relation to consolidated unpaid losses and loss adjustment expenses and did not include these liabilities in General Re’s claim development tables.

BH Primary operates a large number of distinct operations that offer a wide variety of insurance contracts primarily to commercial customers. At December 31, 2016, net unpaid losses and ALAE of such operations were approximately $10.2 billion or approximately 14% of our consolidated net unpaid losses and ALAE, including retroactive reinsurance. The most significant types of contracts relate to workers’ compensation, medical professional and other liability (general and commercial auto). At December 31,

2016, the largest component of BH Primary’s net liabilities was medical professional, which was $3.7 billion, representing approximately 35% of BH Primary’s total net unpaid losses and ALAE and approximately 5% of our consolidated net unpaid losses and ALAE, including retroactive reinsurance. Claim-tails can be long in all three categories of business cited. As a result, we concluded that as of December 31, 2016, further disaggregation would not be useful in understanding the potential uncertainty in the timing and amount of BH Primary’s cash flows arising from unpaid losses and loss adjustment expenses.

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Please tell us why the net unpaid losses and allocated loss adjustment expenses for accident years before the oldest year presented in each of your claims development tables is unaudited. ASC 944-40-50-4B identifies all periods presented in the disclosure about claims development that precede the most recent reporting period as supplementary information.

Rest of the question

However, the aggregate remaining liability for unpaid losses and allocated loss adjustment expenses for accident years prior to the oldest year presented must be audited as it is necessary to reconcile the ending obligation in each claims development table to the liability on the ending balance sheet.

We did not believe ASC 944-40-50 was clear on this matter and, after consulting with our auditors, interpreted it to mean that the information that preceded the earliest year presented was supplemental. However, we acknowledge that net unpaid losses and ALAE was audited. We also acknowledge that net unpaid losses and ALAE derived from the cumulative accident year incurred and paid losses and ALAE were also audited. Therefore, the difference representing earlier accident years was audited.

Rest of the answer

In future filings, net unpaid losses for accident years before the earliest year presented will not be described as unaudited supplemental information.

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Please represent to us that you will revise future earnings releases furnished under Item 2.02 of Form 8-K to:  Reorder your non-GAAP reconciliation to start with net earnings attributable to Berkshire shareholders and reconcile to “operating earnings;” and  Separately present the income tax effect of your non-GAAP adjustments.

Rest of the question

For more guidance, refer to Questions 102.10 and 102.11 of the Compliance and Disclosure Interpretations for Non-GAAP Financial Measures revised on May 17, 2016.

We will revise future earnings releases to start with net earnings attributable to Berkshire shareholders and reconcile to operating earnings. We will separately present the income tax effect of non-GAAP adjustments. Read in the reply ↗

In your response to prior comment 2 you acknowledge that your investments in U.S. Treasury Bills are short-term investments under Rule 7-03(a)1(g) of Regulation S-X. We note that the classification as investments is also consistent with the definition of debt securities in ASC 320-10-20. Under Rules 7-03(a)1 and 7-03(a)2 of Regulation S-X investments are to be presented separately from cash.

Rest of the question

Please represent to us that in future filings you will present your investments in U.S. Treasury Bills as short-term investments included with your other investments and not with your cash and cash equivalents. In this regard, you are not precluded from highlighting the nature of these short-term investments in a liquidity discussion in Management’s Discussion and Analysis. This comment also applies to the presentation in the Finance and Financial Products section of your balance sheet as Rules 5-02.1 and 5-02.2 of Regulation S-X do not contemplate a subtotal combining marketable securities with cash.

We acknowledge that listing short-term investments under an investment heading in the Consolidated Balance Sheets is a strict application of Regulation S-X Rule 210.7-03(a)1. As stated in our prior response dated April 14, 2017, our consolidated financial statements include significant businesses that fit into Articles 5 and 7 of Regulation S-X. We also note that, as stated at the beginning of Articles 5 and 7 of Regulation S-X, the captions described in the Rules should appear on the face of the statements or notes, except as otherwise permitted by the Commission.

Our

U.S.

Rest of the answer

Treasury Bill investments were not included in cash and cash equivalents. We believe that the presentation of U.S. Treasury Bills between cash and cash equivalents and other investments is logical, given their short-durations, and that they are readily convertible to known amounts of cash and possess an insignificant risk of changes in values due to changes in interest rates. We described that position as U.S. Treasury Bills to illustrate the concentration of the asset position.

We believe our presentations were clear, meaningful and relevant given the magnitude of the balances. Nevertheless, in future filings, investments in short-term U.S. Treasury Bills will not be shown under a heading with cash and cash equivalents. To illustrate, our December 31, 2016 and 2015 Consolidated Balance Sheets with the proposed presentations follow.

Ms. Sharon M. Blume, Accounting Branch Chief

United States Securities and

Exchange Commission

Page and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(dollars in millions)

December 31,

2016

2015

ASSETS

Insurance and Other:

Cash and cash equivalents

$

23,581

56,612

Short-term investments in U.S. Treasury Bills

47,338

4,569

Investments in fixed maturity securities

23,432

25,988

Investments in equity securities

120,471

110,527

Other investments

14,364

15,683

Investments in The Kraft Heinz Company (Fair Value: 2016 – $28,418, 2015 –

$32,042)

15,345

23,424

Receivables

27,097

23,303

Inventories

15,727

11,916

Property, plant and equipment

19,325

15,540

Goodwill

53,994

37,188

Other intangible assets

33,481

9,148

Deferred charges reinsurance assumed

8,047

7,687

Other

7,126

6,697

409,328

348,282

Railroad, Utilities and Energy:

3,939

3,437

123,759

120,279

24,111

24,178

Regulatory assets

4,457

4,285

13,550

12,833

169,816

165,012

Finance and Financial Products:

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We acknowledge your response to prior comment 4. Please tell us why your warrants to purchase 700 million shares of Bank of America common stock cannot effectively be net settled and therefore do not qualify for derivative accounting.

Rest of the question

In this regard, it appears from the warrant agreement included as Annex B to the Securities Purchase Agreement filed as Exhibit 1.1 to Bank of America’s Form 8-K filed on August 25, 2011, that you may exercise the warrant in whole or in part. Since Bank of America common stock is exchange traded and the smallest warrant exercise amount appears to be a single share, it appears that the underlying common stock is readily convertible into cash and that the warrants meet the net settlement criterion as outlined in Case A of Example 7 at ASC 815-10-55-99.

The determination of whether the shares of common stock received upon the exercise of the warrants are readily convertible to cash under ASC 815-10-15-119 requires analysis and judgment. That section provides that if the asset delivered is readily convertible to cash, then it can result in the net settlement criteria being met.

Rest of the answer

ASC 815-10-15-131 also provides that

“shares of stock in a publicly traded entity to be received upon the exercise of a stock purchase warrant do not meet the characteristic of being readily convertible to cash if both of the following conditions exist: (a) the stock purchase warrant is issued by an entity only for its own stock (or stock of its consolidated subsidiaries) and (b) the sale or transfer of the issued shares is restricted (other than in connection with being pledged as collateral) for a period of 32 or more days from the date the stock purchase warrant is exercised.” Based on these provisions, the ability to readily convert the instrument to cash can be precluded if there are significant restrictions to the ability to exercise, sell or dispose of the instrument.

While the warrants may be converted in whole or in part, as described in Annex B (Form of

Warrant) of the Securities Purchase Agreement, we also considered Article IV of the Securities Purchase Agreement and Annex C (Form of Registration Rights Agreement) to the Securities Purchase Agreement. Article IV provides that the warrants are exercisable only into the stock of the issuer (Bank of America), and the shares received upon exercising the warrants will not be registered under the Securities Act of 1933 (“Act”) when issued, and may not be transferred, except under

Rule 144 or under an exemption from registration under the Act. We believe that the sale under Rule 144 or under a registration exemption significantly restricts our ability to readily convert the shares of common stock received upon exercising of the warrants to cash.

Berkshire possesses registration rights pursuant to a Registration Rights Agreement under Annex C to the Securities Purchase Agreement. Those rights allow Berkshire to request that Bank of America register the shares issued upon exercise of the warrants on a best efforts basis. However, that request may only be made after the warrants are exercised and the common shares are issued. Also, while Bank of America is required to use its best efforts to file a registration statement for resale of shares issued upon exercise of the warrants, it has up to 45 days to file a registration statement. In addition, Berkshire is limited to three “demand registration” requests and one “shelf registration” request, which must each occur at least six months apart. The value of common shares to be registered must be in increments of at least $1 billion. Further, the issuer may further delay the registration of the shares under other conditions, as provided in the Registration Rights Agreement.

We believe the restrictions/delays under Article IV and Annex C of the Securities Purchase Agreement significantly impede

Berkshire’s ability to readily convert the warrants and the common stock received upon the exercise of the warrants to cash. We, therefore, believe the warrants are not readily convertible to cash based on ASC 815-10-15-119 and that the warrants do not meet the net settlement requirement in paragraph ASC 815-10-15-83 c. Accordingly, we concluded that the warrants did not meet the definition of a derivative.

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We acknowledge your response to prior comment 5. Please elaborate on your conclusion for each of your General Re, BHRG and BH Primary claims development tables that you believe that further disaggregation (either by line of business, contract type or claims settlement tail) would not be as meaningful or useful to users of your financial statements as your disclosed aggregate information in understanding potential

Rest of the question

uncertainty in the timing and amount of cash flows from claims. In your response, specifically address the following:  Tell us your consideration for including the development of loss reserve estimates in your conclusion, consistent with the basic principle outlined in paragraph BC2 of ASU 2015-09.  Provide us the information that would be provided in the separate tables by material line of business for each of these segments, if available.  Provide us the information that would be provided in the separate tables for short-tail business versus long-tail business for your BHRG segment, if available.  If the information requested in the preceding two bullets is not available, demonstrate to us otherwise that material differing development trends by line of business and/or settlement tail are not obscured by aggregating differing lines of business. In other words, tell us whether material favorable development trends in some lines of business are offset by material unfavorable development trends in other lines of business within your currently presented tables.

In determining the level of detail to include in our Consolidated Financial Statements, we considered the disclosure objectives discussed in BC2 of ASU 2015-09 and ASC

944-40-50-4H. As indicated in BC2, the primary objectives are to increase transparency into the estimation process, improve comparability by requiring consistent disclosure of information, and provide information on the timing, amount and uncertainty of cash flows.

Rest of the answer

As further indicated in BC2, “there is no method to objectively measure the costs to implement the new guidance or the value of improved information in the financial statements.”

We operate a wide variety of property and casualty insurance and reinsurance businesses that offer a wide variety of contracts and coverages. For certain of those businesses, particularly reinsurance, the mix of contracts and coverages can vary widely from year to year and over time based upon changes in prevailing market conditions and underwriting opportunities. As a result, we believe selecting lines of business or contract types that are likely to be significant over time for purposes of these disclosures can be difficult, given the current level of diversification and business levels within General Re, BHRG and BH Primary.

As noted in BC33 of ASU

2015-09, the guidance does not prescribe any specific factor to be used as the basis for disaggregating the disclosures. Rather, it provides flexibility for preparers to consider different approaches. It also provides principal-based guidance and examples concerning approaches to disaggregation. We elected to disaggregate our consolidated loss and loss adjustment expense liabilities based upon our four reportable insurance underwriting segments consistent with one of the examples provided in

ASC 944-40-55-9C. As discussed in ASC 944-40-55-9B and as noted in our response dated April 14, 2017, we considered how insurance liabilities for unpaid losses and loss adjustment expenses were presented for other purposes.

The level of disaggregation is ultimately a matter of judgment based on the facts and circumstances. We continue to believe that the disaggregated disclosures included in our Consolidated Financial Statements were meaningful and reasonable under the circumstances.

The following table summarizes our consolidated liability for unpaid losses and loss adjustment expenses as of December 31, 2016. Dollars are in millions.

December 31, 2016

Percentage of consolidated unpaid losses and loss adjustment expenses

Unpaid losses and ALAE, net of reinsurance recoverable:

GEICO

12,981

16.9

%

General Re (18.2% of consolidated liabilities):

Property

1,917

2.5

Casualty

12,056

15.7

BHRG (13.2% of consolidated liabilities):

4,555

5.9

5,617

7.3

BH Primary (13.2% of consolidated liabilities):

Medical professional liability

3,713

4.8

Workers’ compensation

3,357

4.4

All other property and casualty lines

3,103

4.0

47,299

61.5

Reinsurance recoverable:

1,084

1.4

General Re

611

0.8

BHRG

121

0.2

BH Primary

1,099

2,915

3.8

Retroactive reinsurance, unpaid losses and loss adjustment expenses

24,675

32.1

Other short-duration insurance, unpaid losses and loss adjustment expenses

1,390

1.8

Discount on workers’ compensation reinsurance liabilities

(1,433

)

(1.9

)%

Unpaid unallocated loss adjustment expenses

2,072

2.7

26,704

34.7

Unpaid losses and loss adjustment expenses

76,918

100.0

With respect to the unpaid losses and ALAE of General Re, BHRG and BH Primary, and using 10% of consolidated unpaid losses and loss adjustment expenses as a measure of materiality, only General Re’s casualty liabilities meet that threshold. It should also be noted that while GEICO’s unpaid losses and ALAE represented 16.9% of consolidated unpaid losses and loss adjustment expenses, GEICO’s losses and loss adjustment expenses incurred in 2016, 2015 and 2014 were approximately 68%, 70% and 60%, respectively, of Berkshire’s consolidated losses and loss adjustment expenses incurred in those years. As disclosed in Note 14 to the Consolidated Financial Statements, a substantial portion of GEICO’s claims over the past several accident years were paid within five years of the occurrence.

In the pages that follow, we are providing further disaggregated net losses and ALAE data for

General Re, BHRG and BH Primary in response to the Commission’s request. With respect to General Re and BHRG, the disaggregated data is based on losses that are expected to have short-tails (described as property) and those expected to have long-tails (described as casualty). The processes and methods used by BHRG and General Re in estimating losses are similar. General Re’s net unpaid property losses and ALAE were approximately 2.5% of our consolidated unpaid losses and loss adjustment expenses as of December 31, 2016. Accordingly, such liabilities could be considered immaterial for separate disclosure purposes.

As stated in our prior response dated April 14, 2017, BHRG and General Re reinsure property and casualty risks. Coverages are provided under excess-of-loss and quota-share contracts and the risks assumed can be on a facultative or treaty basis. Under certain contracts, the coverage can apply to multiple lines of business written by the ceding company, whether property, casualty or combined, and the ceding company may not report loss data by line of business consistently, if at all. Further, line of business classifications used in non-U.S. jurisdictions may not be consistent with those in the U.S. In those instances, we allocate losses to coverage based on internal estimates, which may be broadly limited to property or casualty.

With respect to BH Primary, we are providing disaggregated data for medical professional liability and workers’ compensation lines of business. As of December 31, 2016, these were BH Primary’s two largest individual lines of business in terms of unpaid losses and ALAE. The actuarial processes and methods used in estimating medical professional liability and workers’ compensation losses are similar. BH Primary’s “all other” net unpaid losses and ALAE ($3,103 million or 4% of our consolidated unpaid losses and loss adjustment expenses) were attributable to various lines of business, including commercial auto, other liability and various other property and casualty coverages. We believe that such net unpaid losses and ALAE are immaterial for purposes of disaggregated disclosures.

In applying disclosure guidance under ASC 944-40-50, we believe companies are compelled to re-evaluate disaggregated disclosures each year due to changes in facts and circumstances, which may result in changes to the disaggregated components. For instance, significant business acquisitions or reinsurance transactions during the period may result in significant changes in the composition of unpaid losses and loss adjustment expenses, which may result in new or expanded disclosures for categories that become significant or the reduction or elimination of disclosures for categories that are no longer significant. We will re-evaluate our disclosures in 2017 and consider the effects of significant business acquisitions and reinsurance transactions occurring during the year as well as other changes in our businesses and will make appropriate modifications to our disaggregated disclosures.

General Re – Property

Accident Year

Incurred Losses and ALAE through December 31,

IBNR and Case

Development

Liabilities

2007

2008

2009

2010

2011

2012

2013

2014

900

938

866

847

836

829

822

819

821

1,032

1,075

1,027

1,007

974

958

942

935

934

820

858

803

765

746

740

736

733

1,015

1,121

1,065

1,022

964

956

1,228

1,179

1,070

1,019

977

963

917

853

755

718

702

1,060

1,078

1,012

967

768

767

728

870

875

141

783

387

Incurred losses and ALAE

8,462

Cumulative Paid Losses and ALAE through December 31,

219

627

729

762

776

805

807

811

277

724

826

876

898

907

909

910

913

213

554

658

695

704

709

712

714

195

589

813

860

890

248

664

824

856

869

881

143

493

585

595

615

218

635

784

825

116

455

558

163

495

120

Paid losses and ALAE

6,842

Net unpaid losses and ALAE for 2007—2016 accident years

1,620

Net unpaid losses and ALAE for accident years before

297

Net unpaid losses and ALAE

General Re – Casualty

957

952

880

745

737

716

691

888

936

772

727

713

701

883

932

901

777

750

735

698

117

874

823

748

135

947

827

773

706

152

893

997

885

833

295

1,017

982

887

360

972

1,076

1,066

500

941

1,124

636

786

8,356

194

291

370

419

486

504

515

524

170

311

348

382

406

420

441

180

239

299

361

433

447

193

261

334

383

414

449

177

262

390

436

171

244

321

376

276

337

211

306

198

3,565

4,791

7,265

Supplemental average historical claims duration information based on General Re’s net losses and ALAE incurred and paid accident year data follows.

Average Annual Percentage Payout of Incurred Losses by Age, Net of Reinsurance

In Years

General Re Combined

14.8%

31.0%

12.2%

6.8%

4.6%

3.2%

2.6%

1.1%

1.2%

0.9%

General Re Property

22.4%

45.1%

14.0%

4.5%

2.4%

1.4%

1.3%

0.1%

0.3%

0.5%

General Re Casualty

6.7%

16.5%

10.3%

9.4%

7.1%

5.5%

4.2%

2.2%

2.3%

BHRG – Property

812

666

659

602

563

555

553

551

1,944

1,592

1,696

1,427

1,369

1,429

1,399

1,373

1,367

1,520

1,154

1,404

1,365

1,288

1,268

1,231

1,483

1,568

1,502

1,354

1,328

1,319

2,712

2,708

2,544

2,513

2,554

2,537

2,190

1,955

1,851

1,649

1,612

2,079

1,904

1,629

1,585

1,828

1,641

1,570

2,343

2,195

2,444

1,355

16,408

343

467

512

532

537

544

545

548

546

182

692

1,138

1,219

1,256

1,290

1,344

1,353

183

538

1,062

1,120

1,186

1,215

1,223

134

567

1,081

1,194

1,254

320

1,480

1,948

2,184

2,280

2,350

111

1,198

1,325

1,393

287

756

1,040

1,193

346

999

401

579

11,968

4,440

115

BHRG – Casualty

998

1,008

993

1,025

988

1,020

1,005

920

131

1,444

1,538

1,292

1,476

1,466

1,284

1,232

1,211

241

1,454

1,704

1,561

1,559

1,491

1,460

1,440

214

1,406

1,247

1,706

1,836

1,814

1,927

1,835

393

1,864

1,923

1,797

1,934

1,919

601

1,240

1,306

494

944

922

415

864

363

946

552

12,540

139

424

481

523

583

626

651

663

675

454

757

800

841

861

189

644

669

1,140

322

655

923

232

650

924

1,131

1,195

1,250

249

566

882

1,126

229

314

581

254

149

199

7,365

5,175

442

Supplemental average historical claims duration information based on BHRG’s net losses and ALAE incurred and paid accident year data follows.

BHRG Combined

14.7%

28.2%

17.2%

6.3%

3.9%

1.9%

1.0%

0.7%

BHRG Property

14.6%

36.3%

22.2%

10.6%

5.2%

2.7%

1.6%

0.6%

(0.4)%

BHRG Casualty

19.4%

12.7%

8.1%

7.4%

4.8%

2.5%

BH Primary – Medical Professional Liability

IBNR and

Case

Cumulative

Number of

Reported

Claims

(in thousands)

653

637

617

428

394

331

315

671

620

580

488

438

404

373

350

694

665

608

437

403

685

639

571

505

462

693

647

147

680

599

227

312

793

791

769

928

886

6,004

153

237

289

294

148

200

279

307

(6

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