We show below summary financial data for the fourth quarter and full year. However, we urge investors and reporters to carefully read our Annual Report, which has been posted on the Internet at www.berkshirehathaway.com.
The limited information that follows in this press release is totally inadequate for making an informed investment judgment or for an evaluation of 2017 business performance. Earnings are stated on an after-tax basis. (Dollar amounts are in millions, except for per share amounts).
Operating earnings for 2017 are net of pre-tax underwriting losses of approximately $3.0 billion ($1.95 billion after-tax) attributable to three major hurricanes in the U.S. and Puerto Rico and wildfires in California.
In the table on the prior page (which, as noted, reports after-tax results), we give investment and derivative gains/losses a line of their own because the amounts of these in any given quarter or year are often meaningless.
Berkshire’s gain in net worth during 2017 was $65.3 billion which increased per-share book value by 23% since yearend 2016 to $211,750 per Class A equivalent share ($141.17 per Class B equivalent share). Insurance float (the net liabilities we assume under insurance contracts) at December 31, 2017 was approximately $114 billion.
Use of Non-GAAP Financial Measures
This press release includes certain non-GAAP financial measures. The reconciliations of such measures to the most comparable GAAP figures in accordance with Regulation G are included herein.
Berkshire presents its results in the way it believes will be most meaningful and useful, as well as most transparent, to the investing public and others who use Berkshire’s financial information.
That presentation includes the use of certain non-GAAP financial measures. In addition to the GAAP presentations of net earnings, Berkshire shows operating earnings defined as net earnings exclusive of investment and derivative gains/losses and the earnings impact from the enactment of the Tax Cuts and Jobs Act of 2017.
Although the investment of insurance and reinsurance premiums to generate investment income and investment gains or losses is an integral part of Berkshire’s operations, the generation of investment income and investment gains or losses is independent of the insurance underwriting process.
Moreover, under applicable GAAP accounting requirements, gains or losses can be created when certain types of investments are marked-to-market through earnings. In sum, investment and derivative gains/losses for any particular period are not indicative of quarterly business performance.