Earnings of Berkshire Hathaway Inc. and its consolidated subsidiaries for the second quarter and six months ended June 30, 1999 and 1998 are summarized below. Amounts are stated on an after-tax basis (dollar amounts are in millions, except per share amounts).

There are two primary factors that impacted second quarter and first half 1999 earnings from operations. First, the 1999 amounts include the results of General Re which was acquired by Berkshire on December 21, 1998. General Re's first half earnings from operations, before purchase-accounting adjustments of $276 million, were $293 million in 1999 as compared to $517 million in 1998. The decline in earnings from operations of General Re is primarily due to a significant underwriting loss this year compared to near breakeven underwriting results in the 1998 period. In the property/casualty business, General Re's pre-tax underwriting loss for the first half was $227 million, or about 9.5% of earned premiums and in its life/health business the pre-tax underwriting loss was $99 million, or about 12.6% of earned premiums.

Second, GEICO generated a pre-tax underwriting profit of $20 million during the first half of 1999 as compared to $154 million in 1998. This result was anticipated given the rate reductions taken during the past two years and the increased marketing expenditures incurred this year. GEICO's business continues to accelerate in all categories of auto insurance--preferred, standard and nonstandard. Over the past twelve months, voluntary policies in force increased 23.3%.

Realized investment gain has been a recurring element in Berkshire's net earnings for many years. The amount may fluctuate significantly from period to period, with a meaningful effect upon Berkshire's consolidated net earnings. However, the amount of realized investment gain or loss for any given period has no predictive value, and variations in amount from period to period have no practical analytical value, particularly in view of the net unrealized price appreciation now existing in Berkshire's consolidated investment portfolio.

Berkshire's second quarter interim report to shareholders report will be posted on the Internet later today at approximately 5:00 p.m. central time 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.

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