Earnings of Berkshire Hathaway Inc. and its consolidated subsidiaries for the third quarter and first nine months ended September 30, 1998 and 1997 are summarized below. Amounts are stated on an after-tax basis (dollar amounts are in millions, except per share amounts):

The net earnings figures for 1998 are meaningless in evaluating the Company. 1998's first nine months earnings include $1,435 million of after-tax realized investment gains compared to $163 million in the comparable 1997 period. While the realized gains had a material impact on Berkshire's 1998 reported earnings, they had a very minor impact on Berkshire's shareholders' equity. Berkshire records its investments at market value and most of the appreciation in the investments sold during 1998 had been previously reflected as a component of shareholders' equity in periods prior to 1998.

GEICO, Berkshire's largest operation, was an important contributor to increased 1998 operating earnings with GAAP underwriting profit margin of 10% for the third quarter and 9% for the first nine months. These results are well above GEICO's target. Premium rate reductions were taken in certain states during 1998 and future margins should be more in line with expectations. GEICO's growth continued to accelerate in all categories of auto insurance - preferred, standard and nonstandard. Voluntary policies in force, which increased by 10% in 1996, 16% in 1997, and 19.1% for the first nine months of 1998, will likely grow by more than 20% for the full year. Year over year growth has increased every quarter since Berkshire completed its acquisition of GEICO at the beginning of 1996. A major expansion of GEICO's physical facilities is underway in order to support even more rapid rates of growth in the future.

On June 19, 1998, Berkshire announced an agreement to acquire General Re Corporation. In September, both companies shareholders approved the transaction. In addition, all regulatory approvals have been obtained. It is expected that the transaction will close in the fourth quarter after receiving certain rulings from the Internal Revenue Service.

General Re is a holding company for global reinsurance and related risk management operations. It owns General Reinsurance Corporation and National Reinsurance Corporation, the largest professional property/casualty reinsurance group domiciled in the United States, and also holds a controlling interest in Kölnische Rückversicherungs-Gesellschaft AG (Cologne Re), a major international reinsurer. Together, General Re and Cologne Re transact reinsurance business as "General & Cologne Re".

Berkshire's third quarter interim report to shareholders will be posted on the Internet on November 14, 1998 where it can be accessed via www.berkshirehathaway.com.

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.

Certain statements that appear in this press release that do not relate to historical financial information may constitute forward-looking statements. Statements containing words such as believes, anticipates, plans, expects, projects, forecasts, estimates, may, could or similar words, are forward-looking. Any forward-looking statement is subject to various risks and uncertainties that could cause actual results to differ materially from expectations.

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