BERKSHIRE HATHAWAY INC.
NEWS RELEASE
FOR IMMEDIATE RELEASE March 6, 1997
Berkshire Hathaway Inc.'s growth during 1996 in per-share book
value exceeded the S&P 500 gain for the sixteenth consecutive year and
29th out of the last 32 years. In 1996 Berkshire Hathaway Inc.'s per-
share book value grew from $14,426 to $19,011 or 31.8%. The overall
gain for the S&P 500 was 23.0%. The S&P figures are pre-tax whereas the
Berkshire numbers are after-tax. Over the last 32 years, book value has
increased at a rate of 23.8% compounded annually.
Earnings from operations in 1996 include the results of GEICO
Corporation whose underwriting results were outstanding. During 1996
GEICO's voluntary auto policy count grew 10%, the largest annual rate of
growth during the past 20 years. More importantly the growth in
voluntary policies accelerated during the year, led by major gains in
standard and non-standard auto lines.
Earnings for the years ended December 31, 1996 and 1995 are
summarized below. Amounts are stated on an after-tax basis (dollar
amounts are in millions, except per share amounts).
1996 1995*
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Earnings from operations. . . . . . . . . . . . . $ 883.4 $ 669.9
Realized investment gain. . . . . . . . . . . . . 1,605.2 125.0
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Net earnings. . . . . . . . . . . . . . . . . . . $2,488.6 $ 794.9
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Average Class A equivalent shares outstanding . . 1,205,257 1,187,102
Earnings per share:
Earnings from operations . . . . . . . . . . $ 733 $ 564
Net earnings . . . . . . . . . . . . . . . . $2,065 $ 670
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* Restated - On January 2, 1996, Berkshire completed the acquisition of
the approximately 49% of GEICO common stock not previously owned. In
prior years Berkshire's investment in GEICO common stock had been
carried at market value. As a result of obtaining control of GEICO in
1996, generally accepted accounting principles require that prior year
results be restated to reflect Berkshire's prior investment in GEICO
under the equity method. Accordingly, the 1995 results have been
restated.
The net earnings figures for 1996 are meaningless in evaluating the
Company or charting its progress: 1996's earnings included $1.6 billion
of after-tax realized investment gains compared to after-tax realized
investment gains of $125.0 million in 1995. Most of 1996's realized gain
arose in connection with The Walt Disney Company's acquisition of
Capital Cities/ABC, Inc. While the realized gain had a material impact
on Berkshire's reported net earnings, it had a very minor impact on
Berkshire's shareholders' equity. Berkshire records its investments at
market value and the appreciation in the Capital Cities stock had been
previously reflected as a component of shareholders' equity in periods
prior to 1996.
Berkshire's 1996 Annual Report to the shareholders is scheduled to
be mailed later this month and will contain much additional information
about the Company's operations. Additionally, this year for the first
time Berkshire's Annual Report will be posted on the Internet where it
can be accessed via http://www.berkshirehathaway.com. Future interim
reports, press releases and annual reports will also be posted at this
address.
Berkshire Hathaway and its subsidiaries engage in a number of
diverse business activities among which the most important is the
property and casualty insurance business conducted on both a direct and
reinsurance basis. Common stock of the Company is listed on the New
York Stock Exchange, trading symbols BRK.A and BRK.B.
Contact: Marc D. Hamburg (402) 346-1400
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