Earnings of Berkshire Hathaway Inc. and its consolidated subsidiaries for the third quarter and nine months ended September 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 third quarter and first nine months of 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 nine months earnings from operations, before purchase-accounting adjustments of $396 million, were $362 million in 1999 as compared to $755 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 nine months was $490 million, or about 13.0% of earned premiums and in its life/health business the pre-tax underwriting loss was $113 million, or about 8.7% of earned premiums. While the poor underwriting results were slightly related to certain catastrophes occurring during the third quarter, the primary cause for the underwriting loss is that premium rates for both the reinsurance industry and General Re are currently inadequate.

Second, GEICO generated a pre-tax underwriting profit of $52 million during the first nine months of 1999 as compared to $256 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 strong in all categories of auto insurance--preferred, standard and nonstandard. Over the past twelve months, voluntary auto policies in force increased 22.8%.

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 third 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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