Subject: Re: 2nd Quarter result
10Q Random data & thoughts:
I thought things were ok but there seem to be some clear signs of US economy slowing in our businesses. WEB warned us of this developing trend in 2H.
Vert pleasing inflation is continuing to fall.
Cons. Shareholders equity $539.9B
Net earnings $71.4B (including after tax gains of $53.3B on our investments)
$376B of Investments + fixed maturity securities
Debt $125B
(Yen Debt-added $1.2B in 4/23)
Net op cash flows of $21.1B 1H
Cap ex $8.4B 1H
Goodwill of acquired businesses $86B
Intang. $20.5B

Biggest surprises/disappointments were degree of 17% decline in BNSF net earnings YOY in 1H (2.5B)& BHE earnings down 23% 1H YOY (1.2B). MSR earnings 6.37B (+1.5%) 1H
+4.4B Net interest income.
Pleased sogo shosha +Alleghany(11.6B purchase)+Pilot(8.2B for add'l 41.4%)+ 75% Cove Point LNG (3.3B for our add'l 50%)are all now contributing to EPS.
Bit disappointed in Pilot pre-tax earnings YTD ($411M on 24B revenue 1H), down 24% but it is so fuel price & volume dependent.
Only $1.4B in buybacks (40% of buybacks were A shares (1024) & 60% were B shares (2,354,444) (fyi- $5.8B buybacks in 1H 2023)yet it appears they may have bought back around another 2175 'A share equivalents'(between 6-30 and 7-26 filing of 10-Q) if I interpreted & did my math correctly, as share count on page 1 is less than page 4.
Equity portfolio appreciation in line with what we had thought ($68B investment gains 1H). Thank you Apple!
WEB continues to sell>buy equities for several quarters now (Net selling of 18.4B 1H, net selling of 8B in Q2).
Huge $147.4B cash position, making ~5% as we whistle & wait.
Steady $166B float, yet slower growth. Avg. cost of float is Negative in 2023.
1.04T in total Assets!
Increase $6B net cash flows from ops YoY
We now own 20.6% AXP!
Capital gains 'only' $4.6B 1H 2023
Reassuring-97% of our home loans are current.
Long term Loans are at pretty favorable rates (except Pilot @7%)
Preferred stock fair value ~$9B, Warrants ~$1.8B, 6 year duration.
No expected known legal liabilities of any consequence that seem to be looming.
Potential outcomes of PacifiCorp lawsuits are still unclear & process is ongoing- will take several years to sort out, defend and get a final answer from the courts.
Typical Mr. Market- Investment gains up $68B half of 2023, versus down $69B half of 2022!!!
GEICO loss ratio better-83.7%. Policies in force down 14%, advertising down.
TransRe added $2.6B in premiums
Claims inflation is really growing & significant
Amazing BHE eff. tax rate is -87.6% with our clean energy tax credits.
BH RE brokerage volumes are really down 26% YTD with higher mortgage rates and less volume
Within MSR, Industrial earnings are up & building & consumer products down.
PCC earnings up 27% 1H YoY
New home sales off 20% 1H
Pre-tax earnings Clayton off 13.5% or $150M 1H
Forest River down 39% 1H
BH Auto earnings up 21% 1H
$448M FX gains 1H

Good luck to all and hope we are pleasantly surprised in the 2nd Half!