BERKSHIRE HATHAWAY INC. and Subsidiaries CONSOLIDATED BALANCE SHEETS (dollars in millions except per share amounts)
December 31, ---------------------- 1997 1996 ASSETS ----------- ----------- Cash and cash equivalents ........................... $ 1,002.4 $ 1,339.8 Investments: Securities with fixed maturities .................. 10,297.8 6,446.9 Equity securities ................................. 36,247.7 27,750.6 Receivables ......................................... 1,711.5 1,523.2 Inventories ......................................... 639.0 619.6 Assets of finance businesses ........................ 1,248.8 968.8 Property, plant and equipment ....................... 1,056.5 1,034.2 Goodwill of acquired businesses ..................... 3,066.5 3,110.3 Other assets ........................................ 840.7 616.0 ---------- ---------- $ 56,110.9 $ 43,409.4 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Losses and loss adjustment expenses ................. $ 6,850.5 $ 6,274.4 Unearned premiums ................................... 1,273.7 1,183.5 Accounts payable, accruals and other liabilities .... 2,202.3 2,556.8 Income taxes, principally deferred .................. 10,538.8 6,837.6 Borrowings under investment agreements and other debt 2,266.7 1,944.4 Liabilities of finance businesses ................... 1,067.2 851.3 ---------- ---------- 24,199.2 19,648.0 ---------- ---------- Minority shareholders' interests .................... 456.5 335.1 ---------- ---------- Shareholders' equity: Common Stock: * Class A Common Stock, $5 par value, 1,366,090 and 1,376,188 shares issued; 1,197,888 and 1,206,120 shares outstanding .............. 6.8 6.9 Class B Common Stock, $0.1667 par value, 1,087,156 and 783,755 shares issued and outstanding ............................... 0.2 0.1 Capital in excess of par value .................... 2,347.1 2,274.1 Unrealized appreciation of investments ............ 18,197.9 12,143.9 Retained earnings ................................. 10,934.3 9,032.7 ---------- ---------- 31,486.3 23,457.7 Less: Cost of 168,202 and 170,068 Class A common shares in treasury ....................... 31.1 31.4 ---------- ---------- Total shareholders' equity .................... 31,455.2 23,426.3 ---------- ---------- $ 56,110.9 $ 43,409.4 ========== ========== * Class B Common Stock has economic rights equal to one-thirtieth (1/30) of the economic rights of Class A Common Stock. Accordingly, on an equivalent Class A Common Stock basis, there are 1,234,127 shares outstanding at December 31, 1997 versus 1,232,245 outstanding at December 31, 1996.
See accompanying Notes to Consolidated Financial Statements

BERKSHIRE HATHAWAY INC. and Subsidiaries CONSOLIDATED STATEMENTS OF EARNINGS (dollars in millions except per share amounts)
Year Ended December 31, ------------------------------- 1997 1996 1995 --------- --------- --------- Revenues: Insurance premiums earned ..................... $ 4,761.1 $ 4,117.8 $ 957.5 Sales and service revenues .................... 3,577.5 3,061.2 2,755.9 Interest, dividend and other investment income 953.3 811.9 629.2 Income from finance businesses ................ 31.8 25.3 26.6 Realized investment gain ...................... 1,106.3 2,484.1 194.1 --------- --------- --------- 10,430.0 10,500.3 4,563.3 --------- --------- --------- Cost and expenses: Insurance losses and loss adjustment expenses 3,420.1 3,089.5 612.0 Insurance underwriting expenses ............... 879.6 797.6 325.0 Cost of products and services sold ............ 2,186.9 1,884.0 1,706.7 Selling, general and administrative expenses .. 920.8 861.9 759.6 Goodwill amortization ......................... 83.1 61.7 16.3 Interest expense .............................. 111.9 99.7 59.3 --------- --------- --------- 7,602.4 6,794.4 3,478.9 --------- --------- --------- Earnings before income taxes and minority interest....................... 2,827.6 3,705.9 1,084.4 Income taxes .................................. 897.7 1,196.8 276.2 Minority interest ............................. 28.3 20.5 13.3 --------- --------- --------- Net earnings .................................... $ 1,901.6 $ 2,488.6 $ 794.9 ========= ========= ========= Average common shares outstanding * ........... 1,233,192 1,205,257 1,187,102 Net earnings per common share * ................. $ 1,542 $ 2,065 $ 670 ========= ========= ========= * Average shares outstanding for 1997 and 1996 include average Class A Common shares and average Class B Common shares determined on an equivalent Class A Common Stock basis. Net earnings per common share shown above represents net earnings per equivalent Class A Common share. Net earnings per Class B Common share is equal to one-thirtieth (1/30) of such amount or $51 per share for 1997 and $69 per share for 1996.
See accompanying Notes to Consolidated Financial Statements

BERKSHIRE HATHAWAY INC. and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in millions)
Year Ended December 31, ------------------------------- 1997 1996 1995 --------- --------- --------- Cash flows from operating activities: Net earnings .......................................... $ 1,901.6 $ 2,488.6 $ 794.9 Adjustments to reconcile net earnings to cash flows from operating activities: Realized investment gain ............................ (1,106.3) (2,484.1) (194.1) Depreciation and amortization ....................... 227.3 151.6 75.7 Changes in assets and liabilities before effects from business acquisitions: Losses and loss adjustment expenses ............... 576.1 352.1 268.6 Deferred charges re reinsurance assumed ........... (142.3) 51.8 51.0 Unearned premiums ................................. 90.2 (8.8) 66.9 Receivables ....................................... (120.2) (127.1) (35.4) Accounts payable, accruals and other liabilities .. 547.4 558.3 228.2 Income taxes ...................................... 382.8 221.9 (29.9) Other ............................................... (21.0) 55.7 (98.0) --------- --------- --------- Net cash flows from operating activities .......... 2,335.6 1,260.0 1,127.9 --------- --------- --------- Cash flows from investing activities: Purchases of securities with fixed maturities ......... (6,837.3) (2,464.7) (273.9) Purchases of equity securities ........................ (714.3) (1,423.4) (1,459.9) Proceeds from sales of securities with fixed maturities 3,397.5 277.5 669.7 Proceeds from redemptions and maturities of securities with fixed maturities ................. 779.6 791.9 954.6 Proceeds from sales of equity securities .............. 2,015.6 1,531.0 1,352.7 Loans and investments originated in finance businesses (491.1) (577.1) (381.2) Principal collection on loans and investments originated in finance businesses .................... 276.0 351.5 363.0 Acquisitions of businesses, net of cash acquired ...... (774.9) (1,975.3) -- Other ................................................. (182.3) (19.2) (11.4) --------- --------- --------- Net cash flows from investing activities .......... (2,531.2) (3,507.8) 1,213.6 --------- --------- --------- Cash flows from financing activities: Proceeds from borrowings of finance businesses ........ 157.5 285.1 265.7 Proceeds from other borrowings ........................ 1,073.6 1,604.3 1,232.7 Repayments of borrowings of finance businesses ........ (214.1) (427.3) (232.1) Repayments of other borrowings ........................ (1,111.8) (1,170.0) (1,151.7) Net proceeds from issuance of Class B Common Stock .... -- 565.0 -- Other ................................................. (1.4) (3.5) (1.5) --------- --------- --------- Net cash flows from financing activities .......... (96.2) 853.6 113.1 --------- --------- --------- Increase (decrease) in cash and cash equivalents .. (291.8) (1,394.2) 2,454.6 Cash and cash equivalents at beginning of year .......... 1,350.3 2,744.5 289.9 --------- --------- --------- Cash and cash equivalents at end of year * .............. $ 1,058.5 $ 1,350.3 $ 2,744.5 ========= ========= ========= * Cash and cash equivalents at end of year are comprised of the following: Finance businesses .................................. $ 56.1 $ 10.5 $ 40.7 Other ............................................... 1,002.4 1,339.8 2,703.8 --------- --------- --------- $ 1,058.5 $ 1,350.3 $ 2,744.5 ========= ========= =========
See accompanying Notes to Consolidated Financial Statements

BERKSHIRE HATHAWAY INC. and Subsidiaries CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (dollars in millions)
Unrealized Par Value Capital in Appreciation Class A Common Stock Excess of of Retained Treasury Class A Class B Par Value Investments Earnings Stock ------- ------- ---------- ------------ ---------- -------- Balance December 31, 1994 ........ $ 6.9 $ -- $ 656.1 $ 5,276.9 $ 5,749.2 $ 37.6 Net earnings ..................... -- -- -- -- 794.9 -- Increase in unrealized appreciation included in carrying value of investments .................... -- -- -- 6,177.1 -- -- Increase in deemed applicable deferred income taxes .......... -- -- -- (2,176.2) -- -- Increase in minority interest in unrealized appreciation ........ -- -- -- (57.1) -- -- Common stock issued in connection with acquisitions of businesses -- -- 345.6 -- -- (2.9) ------- ------- ---------- ------------ ---------- -------- Balance December 31, 1995 ........ 6.9 -- 1,001.7 9,220.7 6,544.1 34.7 Net earnings ..................... -- -- -- -- 2,488.6 -- Increase in unrealized appreciation included in carrying value of investments .................... -- -- -- 4,604.0 -- -- Increase in deemed applicable deferred income taxes .......... -- -- -- (1,629.1) -- -- Increase in minority interest in unrealized appreciation ........ -- -- -- (51.7) -- -- Common stock issued in connection with acquisition of business ... -- -- 707.5 -- -- (3.3) Issuance of Class B Common stock -- 0.1 564.9 -- -- -- ------- ------- ---------- ------------ ---------- -------- Balance December 31, 1996 ........ 6.9 0.1 2,274.1 12,143.9 9,032.7 31.4 Net earnings ..................... -- -- -- -- 1,901.6 -- Increase in unrealized appreciation included in carrying value of investments .................... -- -- -- 9,468.2 -- -- Increase in deemed applicable deferred income taxes .......... -- -- -- (3,318.9) -- -- Increase in minority interest in unrealized appreciation ....... -- -- -- (95.3) -- -- Common stock issued in connection with acquisition of business ... -- -- 72.7 -- -- (0.3) Other ............................ (0.1) 0.1 0.3 -- -- -- ------- ------- ---------- ------------ ---------- -------- Balance December 31, 1997 ........ $ 6.8 $ 0.2 $2,347.1 $ 18,197.9 $ 10,934.3 $ 31.1 ======= ======= ========== ============ ========== ========
See accompanying Notes to Consolidated Financial Statements

BERKSHIRE HATHAWAY INC.
and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997

 

(1)   Significant accounting policies and practices
     (a)  Nature of operations and basis of consolidation
          Berkshire  Hathaway Inc. ("Berkshire" or "Company") is a holding company owning 
              subsidiaries engaged in a number of diverse business activities. 
              The most important of these is the property and casualty insurance business
              conducted on both a direct and reinsurance basis. Further information 
              regarding this business and Berkshire's other reportable business segments 
              is contained in Note 15. The accompanying consolidated financial statements 
              include the accounts of Berkshire consolidated with accounts of all its 
              subsidiaries.  Intercompany accounts and transactions have been eliminated. 

     (b)  Use of estimates in preparation of financial statements
          The preparation of the consolidated financial  statements in conformity with 
              generally  accepted  accounting principles ("GAAP") requires management 
              to make estimates and assumptions that affect the reported amount of assets 
              and liabilities at the date of the financial statements and the reported 
              amount of revenues and expenses during the period. Actual results may differ 
              from the estimates and assumptions used in preparing the consolidated 
              financial statements.

     (c)  Accounting pronouncements to be adopted in 1998
          During 1997, the Financial Accounting Standards Board issued the following 
              Statements of Financial Accounting Standards ("SFAS") that are effective 
              for periods beginning after December 15, 1997 and will be adopted by the
              Company during 1998. The Company does not expect that adoption of these 
              Standards will have a material effect on its financial position, results 
              of operations or on disclosures within the financial statements.

          (1) SFAS No. 130 -- "Reporting Comprehensive Income", which establishes 
              standards for the reporting and display of comprehensive income and its 
              components.

          (2) SFAS No. 131 -- "Disclosures about Segments of an Enterprise and Related 
              Information", which establishes new standards for reporting information 
              about operating segments in interim and annual financial statements. 

     (d)  Cash equivalents
          Cash equivalents consist of funds invested in money market accounts and in 
              investments with a maturity of three months or less when purchased.

     (e)  Investments
          Management determines the appropriate classifications of investments in 
              securities with fixed maturities and equity securities at the time of 
              purchase and reevaluates such designations as of each balance sheet date. 
              Investments in equity securities are classified as available-for-sale. 
              Investments in securities with fixed maturities, except for such securities
              held by finance businesses, are classified as available-for-sale. 
              Securities with fixed maturities held by finance businesses are classified 
              as held-to-maturity. Securities with fixed maturities are deemed to be 
              held-to-maturity securities when the Company has the ability and positive 
              intent to hold them to maturity.

          Available-for-sale securities are stated at fair value with unrealized gains 
              and losses, net of tax, reported in a separate component of shareholders' 
              equity. Held-to-maturity securities are carried at amortized cost. Realized
              gains and losses, which arise when investments are sold (as determined on 
              a specific identification basis), other-than-temporarily impaired or in 
              certain situations when investments are marked-to-market, are included in 
              the Consolidated Statements of Earnings.

     (f)  Goodwill of acquired businesses
          Goodwill of acquired businesses represents the difference between purchase 
              cost and the fair value of the net assets of acquired businesses and is 
              being amortized on a straight line basis over forty years. The Company 
              periodically reviews the recoverability of the carrying value of goodwill 
              of acquired businesses using the methodology prescribed by SFAS No. 121 
              "Accounting for the Impairment of Long-Lived Assets and for Long-Lived 
              Assets to be Disposed Of."

     (g)  Insurance premium acquisition costs
          Certain costs of acquiring insurance premiums are deferred, subject to ultimate
              recoverability, and charged to income as the premiums are earned. The 
              ultimate recoverability of premium acquisition costs is determined without
              regard to investment income. The unamortized balance of deferred premium 
              acquisition costs is included in other assets.

     (h)  Deferred charges re reinsurance assumed
          The excess of estimated liabilities for claims and claim costs ultimately 
              payable  by the Insurance Group over consideration received with respect 
              to  retroactive  property/casualty  reinsurance  contracts  that  provide 
              for indemnification of insurance risk, other than structured settlements, 
              is established as a deferred charge at inception of such contracts. The 
              deferred charges are subsequently amortized using the interest method over 
              the expected settlement periods of the claim liabilities. The unamortized 
              balance is included in other assets and was $480.2 million at December 31,
              1997 and $337.9 million at December 31, 1996.

     (j)  Losses and loss adjustment expenses
          Liability for unpaid losses and loss adjustment expenses represents the aggregate 
              of such obligations of members of the Insurance Group with respect to: (i) 
              prospective property/casualty insurance and reinsurance contracts, (ii) 
              retroactive property/casualty reinsurance contracts that provide for 
              indemnification of insurance risk, other than structured settlements, and 
              (iii) reinsurance contracts providing for periodic payments with respect to 
              settled claims ("structured settlements"). Except for structured settlement 
              liabilities which are stated at discounted present values, the liability for 
              unpaid losses and loss adjustment expenses is at the aggregate of estimated 
              ultimate payment amounts.

          Ultimate payment amounts with respect to prospective contracts are determined 
              from: (i) individual case estimates, (ii) estimates of incurred but not 
              reported losses, based on past experience, and (iii) reports of losses from
              ceding insurers.

          Ultimate payment amounts with respect to retroactive reinsurance contracts that 
              provide for indemnification of insurance risk, other than structured 
              settlements, are established for financial reporting purposes at maximum 
              limits of indemnification under the contracts. (See also 1(h) 
              above related to deferred charges re reinsurance assumed.)

          Liabilities under structured settlement contracts are established when the 
              contracts are entered into, at the then present value of the actuarially 
              determined ultimate payment amount discounted at the prevailing market 
              interest rate.  Annual accretions to the liabilities are charged to losses 
              incurred. This accounting policy also applies to annuity reserves and 
              policyholder liabilities which are included in liabilities of finance 
              businesses.

     (k)  Insurance premiums
          Insurance premiums for prospective insurance and reinsurance policies are earned 
              in proportion to the level of insurance protection provided.  In most cases, 
              premiums are recognized as revenues ratably over their terms with unearned 
              premiums computed on a monthly or daily pro rata basis. Consideration 
              received for retroactive reinsurance policies is accounted for as premiums 
              earned at the inception of the contracts. Premiums earned are stated net of 
              amounts ceded to reinsurers.

     (m)  Reinsurance
          Provisions for losses and loss adjustment expenses are reported in the 
              accompanying Consolidated Statements of Earnings after deducting amounts 
              recovered and estimates of amounts that will be ultimately recoverable under 
              reinsurance contracts. Reinsurance contracts do not relieve the Insurance 
              Group members of their obligations to indemnify policyholders with respect 
              to the underlying insurance and reinsurance contracts. Estimated losses and 
              loss adjustment expenses recoverable under reinsurance contracts are included 
              in receivables.

(2)   Business acquisitions
      During 1996, Berkshire consummated mergers with GEICO Corporation ("GEICO") and
FlightSafety International, Inc. ("FlightSafety"). Each of these mergers was accounted for 
by the purchase method. The excess of the purchase cost of each business over the fair 
value of net assets acquired as of each merger date was recorded as goodwill of acquired 
businesses and is being amortized over forty years. The aggregate amount of goodwill 
applicable to these acquisitions was approximately $2.5 billion.  Additional information 
concerning each merger is provided below.

     (a)  GEICO
         On January 2, 1996, GEICO became a wholly-owned subsidiary as a result of the 
          merger of an indirect wholly-owned subsidiary of Berkshire with and into GEICO. 
          GEICO, through its subsidiaries, is a multiple line property and casualty 
          insurer, the  principal business of which is underwriting private passenger 
          automobile insurance.

         The merger was consummated pursuant to an Agreement and  Plan of Merger dated 
          August 25, 1995 (the "GEICO Agreement"). Pursuant  to the  GEICO  Agreement, 
          each  issued and outstanding common  share of GEICO, except shares held by 
          Berkshire subsidiaries and GEICO, was converted into the right to receive 
          $70 per share, or an aggregate amount of $2.3 billion. 

         As of the merger date, subsidiaries of Berkshire owned 34,250,000 common shares 
          of GEICO, which were acquired prior to 1981 at an aggregate cost of $45.7 
          million. Up to the merger date, neither  Berkshire nor its subsidiaries had 
          acquired any shares of GEICO common stock since 1980. However, Berkshire's 
          ownership percentage,due to intervening stock repurchases by GEICO, gradually 
          increased from about 33% in 1980 to almost 51% immediately prior to the merger 
          date.

     (b)  FlightSafety
         On December 23, 1996, FlightSafety became a wholly-owned subsidiary as a result 
          of the merger of FlightSafety with and into a subsidiary of Berkshire. 
          FlightSafety provides high technology training to operators of aircraft and 
          ships throughout the world.

         The merger was consummated pursuant to an Agreement and Plan of Merger dated 
          October 14, 1996 (the "FlightSafety Agreement"). Pursuant to the FlightSafety 
          Agreement, aggregate consideration of approximately $1.5 billion was paid to 
          FlightSafety shareholders consisting of $769.0 million in cash, 17,728 shares 
          of Berkshire's Class A common stock and 112,655 shares of Berkshire's Class B 
          common stock.

      The results of operations for each of these entities are fully included in 
Berkshire's Consolidated Statements of Earnings beginning on the effective dates of 
each of the mergers (GEICO -- January 2, 1996 and FlightSafety -- December 23, 1996). 
In the accompanying Consolidated Statement of Earnings for 1995, Berkshire's previous 
investment in GEICO was accounted for under the equity method.  Berkshire's 
proportionate share of GEICO's net earnings, reduced by amortization of goodwill, 
is included as a component of interest, dividends, and other investment income. 

      The following table sets forth certain unaudited condensed consolidated earnings 
data for the years ended December 31, 1996 and 1995, as if the GEICO and FlightSafety 
mergers had been consummated on the same terms at the beginning of 1995. Dollar amounts
are in millions, except per share amounts.



                                                         1996        1995 
     Insurance premiums earned . . . . . . . . . . . .$ 4,117.8   $3,744.5
     Sales and service revenues. . . . . . . . . . . .  3,416.5    3,081.6
     Total revenues. . . . . . . . . . . . . . . . . . 10,823.5    7,640.9
     Net earnings. . . . . . . . . . . . . . . . . . .  2,515.0      833.8
     Earnings per equivalent Class A common share. . .    2,051        690



      During 1995, the Company consummated mergers with Helzberg's Diamond Shops, Inc. 
("Helzberg's") and R.C. Willey Home Furnishings ("R.C. Willey") by reissuing 15,762 
shares of its common stock (subsequently  redesignated Class A Common Stock) held
in treasury in exchange for 100% of the common stock of each of these companies. 
Helzberg's consists of a chain of over 180 jewelry stores operating in 28 states and 
R.C. Willey, through its several locations, is the dominant retailer of home furnishings 
in Utah. Each of these  mergers  was  accounted for by the purchase method and, 
accordingly, the operating results of these businesses are included in the Company's 
Consolidated Statements of Earnings from the effective dates of the mergers 
(Helzberg's  -- April 30, 1995; R.C. Willey -- June 29, 1995). 

      On October 21, 1997, Berkshire and International Dairy Queen, Inc. ("Dairy Queen") 
executed a definitive Merger Agreement pursuant to which Berkshire would acquire Dairy 
Queen through the merger of Dairy Queen with and into a wholly-owned subsidiary of 
Berkshire. The Merger Agreement provided that, subject to certain limitations and 
conditions, the holders of Dairy Queen Class A and Class B common stock could receive 
either $27.00 cash or $26.00 of Berkshire Class A or Class B common stock for each Dairy
Queen share. The total merger consideration was approximately $587.8 million consisting 
of $264.5 million in cash and the remainder in Class A and Class B common stock. The
merger was completed on January 7, 1998.

      Dairy Queen develops, licenses and services a system of approximately 5,800 Dairy 
Queen stores located throughout the United States, Canada and other foreign countries, 
which feature hamburgers, hot dogs, various dairy desserts and beverages.  Dairy Queen
also develops, licenses and services other stores and shops operating under the names 
of Orange Julius and Karmelkorn, which feature blended fruit drinks, popcorn and other 
snacks.

(3)   Investments in securities with fixed maturities
      The amortized cost and estimated fair values of investments in securities with 
fixed maturities as of December 31, 1997 and 1996 are as follows (in millions):

          December 31, 1997                                    Gross       Gross     Estimated 
                                                  Amortized  Unrealized  Unrealized    Fair    
                                                    Cost       Gains       Losses      Value   
                                                  ---------  ----------  ----------  --------- 
Bonds:
  U.S. Treasury securities and obligations of
    U.S. government corporations and agencies. . .$ 5,890.4   $   600.8   $  (0.6)   $ 6,490.6 
  Obligations of states, municipalities
    and political subdivisions . . . . . . . . . .  2,151.0        58.3      (0.2)     2,209.1 
  Corporate bonds. . . . . . . . . . . . . . . . .     34.7        --        --           34.7 
Redeemable preferred stocks. . . . . . . . . . . .    764.3       515.4      --        1,279.7 
Mortgage-backed securities . . . . . . . . . . . .    272.8        10.9      --          283.7
                                                  ---------  ----------  ----------  --------- 
                                                  $ 9,113.2   $ 1,185.4   $  (0.8)   $10,297.8 
                                                  =========  ==========  ==========  =========

          December 31, 1996                                    Gross       Gross     Estimated 
                                                  Amortized  Unrealized  Unrealized    Fair    
                                                    Cost       Gains       Losses      Value   
                                                  ---------  ----------  ----------  --------- 
Bonds:
  U.S. Treasury securities and obligations of
    U.S. government corporations and agencies. . .$ 2,618.8   $    4.0    $  (5.7)   $ 2,617.1 
  Obligations of states, municipalities
    and political subdivisions . . . . . . . . . .  2,502.0        32.4      (1.8)     2,532.6 
  Corporate bonds. . . . . . . . . . . . . . . . .     22.0        --        --           22.0 
Redeemable preferred stocks. . . . . . . . . . . .    584.3       275.9      (4.3)       855.9 
Mortgage-backed securities . . . . . . . . . . . .    415.2         6.1      (2.0)       419.3  
                                                  ---------  ----------  ----------  --------- 
                                                  $ 6,142.3   $   318.4   $ (13.8)   $ 6,446.9 
                                                  =========  ==========  ==========  =========

     Amounts above exclude securities with fixed maturities held by finance businesses. 
     See Note 7.

      Shown below are the amortized cost and estimated fair values of the above 
securities at December 31, 1997, by contractual maturity dates. Actual maturities will 
differ from contractual maturities because issuers of certain of the securities retain 
early call or prepayment rights. Amounts are in millions.


                                                                    Estimated 
                                                       Amortized      Fair    
                                                         Cost         Value   
                                                       ---------    ---------
     Due in one year or less . . . . . . . . . . . . . $ 1,278.7    $ 1,785.0 
     Due after one year through five years . . . . . .   2,151.6      2,183.1 
     Due after five years through ten years. . . . . .     781.4        818.4 
     Due after ten years . . . . . . . . . . . . . . .   4,628.7      5,227.6
                                                       ---------    ---------
                                                         8,840.4     10,014.1 
                                                       ---------    ---------
     Mortgage-backed securities. . . . . . . . . . . .     272.8        283.7
                                                       ---------    ---------
                                                       $ 9,113.2    $10,297.8 
                                                       =========    =========

(4)  Investments in equity securities
      Data with respect to the consolidated investment in equity securities 
are shown below.  Individual investments whose fair values exceed ten percent 
of consolidated shareholders' equity at December 31, 1997 and 1996 are listed 
separately.  Amounts are in millions.


          December 31, 1997                                               
                                                     Unrealized     Fair  
                                            Cost        Gains       Value 
                                         ----------  ----------  ----------
        Common stock of:
          American Express Company . . . $ 1,392.7   $ 3,021.3   $ 4,414.0 
          The Coca-Cola Company. . . . .   1,298.9    12,038.6    13,337.5 
          The Gillette Company . . . . .     600.0     4,221.0     4,821.0 
        All other equity securities. . .   5,725.1     7,950.1*   13,675.2 
                                         ----------  ----------  ----------
                                         $ 9,016.7   $27,231.0   $36,247.7 
                                         ==========  ==========  ==========

          December 31, 1996                                               
                                                     Unrealized     Fair  
                                            Cost        Gains       Value 
                                         ----------  ----------  ----------
        Common stock of:
          American Express Company . . . $ 1,392.7   $ 1,401.6   $ 2,794.3 
          The Coca-Cola Company. . . . .   1,298.9     9,226.1    10,525.0 
          The Gillette Company . . . . .     600.0     3,132.0     3,732.0 
        All other equity securities. . .   5,860.4     4,838.9**  10,699.3
                                         ----------  ----------  ----------
                                         $ 9,152.0   $18,598.6   $27,750.6 
                                         ==========  ==========  ==========

   * Represents gross unrealized gains $7,995.9 less gross unrealized 
     losses $45.8.
  ** Represents gross unrealized gains $4,861.3 less gross unrealized 
     losses $22.4.

      Common  shares  of American Express Company ("AXP") owned by Berkshire and its 
subsidiaries possessed approximately 10.5% of the voting rights of all AXP shares 
outstanding at December 31, 1997. The shares are held subject to various agreements 
with certain insurance and banking regulators which, among other things, prohibit 
Berkshire from (i) seeking representation on the Board of Directors of AXP 
(Berkshire may agree, if it so desires, at the request of management or the Board 
of Directors of AXP to have no more than one representative stand for election to 
the Board of Directors of AXP) and (ii) acquiring or retaining shares that would 
cause its ownership of AXP voting securities to equal or exceed 17% of the amount 
outstanding (should Berkshire have a representative on the Board of Directors, such 
amount is limited to 15%). In connection therewith, Berkshire has entered into an 
agreement with AXP which became effective when Berkshire's ownership interest in AXP 
voting securities reached 10% and will remain effective so long as Berkshire owns 5% 
or more of AXP's voting securities. The agreement obligates Berkshire, so long as 
Harvey Golub is chief executive officer of AXP, to vote its shares in accordance 
with the recommendations of AXP's Board of Directors. Additionally, subject to 
certain exceptions, Berkshire has agreed not to sell AXP common shares to any person 
who owns 5% or more of AXP voting securities or seeks to control AXP, without the 
consent of AXP.

(5)  Realized investment gains (losses)
      Realized gains (losses) from sales and redemptions of investments are summarized 
below (in millions):


                                                               1997      1996      1995
                                                             --------  --------  -------
Equity securities --
 Gross realized gains . . . . . . . . . . . . . . . . . . . .$  739.2  $2,379.1  $ 109.9
 Gross realized losses. . . . . . . . . . . . . . . . . . . .   (23.3)    (36.4)   (14.2) 
Securities with fixed maturities and other investments --
 Gross realized gains . . . . . . . . . . . . . . . . . . . .   395.9     144.6    100.8  
 Gross realized losses. . . . . . . . . . . . . . . . . . . .    (5.5)     (3.2)    (2.4) 
                                                             --------  --------  -------
                                                             $1,106.3  $2,484.1  $ 194.1  
                                                             ========  ========  =======

      In November 1997, the merger of Salomon Inc ("Salomon") with and into a subsidiary 
of Travelers Group Inc. ("Travelers") was completed. Berkshire subsidiaries received 
common and preferred stock of Travelers in exchange for common and preferred shares of 
Salomon then owned. The value of the Travelers shares received was approximately $1.8 
billion. Realized investment gains for 1997 include $677.9 million with respect to the 
transaction. The gain is net of a charge of $298.4 million for the contingent value 
associated with Berkshire's Exchange Notes. See Note 9 for additional information 
regarding the Exchange Notes.

      In March 1996, The Walt Disney Company ("Disney") completed its acquisition of 
Capital Cities/ABC, Inc. ("Capital Cities").  Subsidiaries of Berkshire received aggregate 
consideration of $2.5 billion, which included cash of $1.2 billion and common shares of 
Disney with a value of $1.3 billion. Gross realized gains from sales of equity securities 
include a gain of $2.2 billion relating to Disney's acquisition of Capital Cities.

(6) Commitment to purchase silver
      During 1997, the Company entered into several forward contracts to purchase silver 
during the first quarter of 1998. As of December 31, 1997, the Company had committed to 
purchase 111.2 million ounces of silver which had an estimated fair value of about 
$665 million. Subsequent to year end, the Company committed to purchase an additional 
18.5 million ounces of silver. The Consolidated Statement of Earnings for 1997 includes 
a pre-tax gain of $97.4 million representing the excess of fair value over net cost of 
the commitments. 

(7)  Finance businesses
      Berkshire's finance businesses are comprised of commercial and consumer finance 
companies and an annuity business. Assets and liabilities of Berkshire's finance 
businesses are summarized below (in millions):

                                                          Dec. 31,  Dec. 31,
                                                            1997      1996  
       Assets                                            ---------  --------
       Cash and cash equivalents. . . . . . . . . . . . .$    56.1  $   10.5   
       Installment loans and other receivables. . . . . .    221.8     215.9   
       Fixed maturity investments(a). . . . . . . . . . .    970.9     742.4  
                                                         ---------  --------
                                                         $ 1,248.8  $  968.8   
                                                         =========  ========
       Liabilities
       Borrowings under investment agreements and 
          other debt(b) . . . . . . . . . . . . . . . . .$  225.9   $  281.8   
       6.75% Notes, due 2001. . . . . . . . . . . . . . .    99.6       99.5   
       Annuity reserves and policyholder liabilities. . .   697.4      434.8   
       Other. . . . . . . . . . . . . . . . . . . . . . .    44.3       35.2   
                                                         ---------  --------
                                                         $ 1,067.2  $  851.3   
                                                         =========  ========

     (a)  At December 31, 1997 and 1996, mortgage-backed securities of $857.3 and 
          $601.6 respectively were included in this caption.  Estimated fair values 
          and gross unrealized gains and losses as of December 31, 1997 and 1996, 
          are as follows (in millions):

                                          Gross        Gross    Estimated
                                       Unrealized   Unrealized     Fair
                       Amortized Cost     Gains       Losses      Value
                       --------------  ----------   ----------  ---------
              1997. . .    $970.9        $111.7       $ (0.2)   $ 1,082.4
              1996. . .     742.4          25.2         (4.8)       762.8  

     (b)  Borrowings under investment agreements and other debt are made pursuant 
          to contracts with terms generally ranging from six months to thirty years 
          and at fixed interest rates ranging from 5.0% to 7.2%. Payments of 
          principal amounts expected during the next five years are as follows 
          (in millions):

                     1998    1999    2000    2001    2002
                    ------  ------  ------  ------  ------
                    $ 76.9  $  3.3    --      --      --

          Income from finance businesses for each of the past three years is 
          summarized below (in millions):

                                                         1997    1996    1995
                                                        ------  ------  ------
                Revenues
                Interest on loans. . . . . . . . . . . .$ 36.9  $ 38.8  $ 38.4  
                Interest income. . . . . . . . . . . . .  74.4    54.4    39.2  
                Annuity premiums earned. . . . . . . . . 248.0   259.5    75.2
                                                        ------  ------  ------
                                                         359.3   352.7   152.8
                                                        ------  ------  ------
                Cost and expenses
                Interest expense . . . . . . . . . . . .  19.9    30.3    28.9  
                Annuity benefits and expenses. . . . . . 286.6   276.7    80.8  
                General and administrative expenses. . .  21.0    20.4    16.5
                                                        ------  ------  ------
                                                         327.5   327.4   126.2
                                                        ------  ------  ------
                                                        $ 31.8  $ 25.3  $ 26.6  
                                                        ======  ======  ======

(8)  Unpaid losses and loss adjustment expenses
     Supplemental data with respect to unpaid losses and loss adjustment expenses of 
property/casualty insurance subsidiaries (in millions):
        
                                                           1997       1996       1995
                                                         --------   --------   --------
        Unpaid losses and loss adjustment expenses:
         Balance at beginning of year . . . . . . . . . .$6,274.4   $5,923.9*  $3,430.0 
         Less ceded liabilities and deferred charges. . .   585.8      645.0*     573.9
                                                         --------   --------   --------
        Net balance . . . . . . . . . . . . . . . . . . . 5,688.6    5,278.9*   2,856.1
                                                         --------   --------   --------
        Incurred losses recorded:
         Current accident year. . . . . . . . . . . . . . 3,551.4    3,179.7      556.5 
         All prior accident years . . . . . . . . . . . .  (131.3)     (90.2)      55.5
                                                         --------   --------   --------
         Total incurred losses. . . . . . . . . . . . . . 3,420.1    3,089.5      612.0
                                                         --------   --------   --------
        Payments with respect to:
         Current accident year. . . . . . . . . . . . . . 1,602.1    1,484.9       43.6 
         All prior accident years . . . . . . . . . . . . 1,410.3    1,194.9      246.2
                                                         --------   --------   --------
         Total payments . . . . . . . . . . . . . . . . . 3,012.4    2,679.8      289.8
                                                         --------   --------   --------
        Unpaid losses and loss adjustment expenses:
         Net balance at end of year . . . . . . . . . . . 6,096.3    5,688.6    3,178.3
         Plus ceded liabilities and deferred charges. . .   754.2      585.8      520.3
                                                         --------   --------   --------
        Balance at end of year ** . . . . . . . . . . . .$6,850.5   $6,274.4   $3,698.6 
                                                         ========   ========   ========

     * Includes GEICO balances as of the acquisition date.

    ** Unpaid losses and loss adjustment expenses include liabilities established 
       with respect to retroactive reinsurance contracts that provide for indemnification 
       of insurance risk. These liabilities aggregated $1,398.1, $1,263.6, and $1,283.5 
       at December 31, 1997, 1996 and 1995 respectively. Related deferred charges were 
       established with respect to these contracts and are reported as other assets. Also 
       included in unpaid losses and loss adjustment expenses are discounted structured 
       settlement reinsurance liabilities, which totalled $212.3, $217.2, and $221.7 at 
       December 31, 1997, 1996 and 1995 respectively.

      Incurred losses "all prior accident years" reflects the amount of estimation error
charged or credited to earnings in each year. In addition, this amount includes 
amortization of deferred charges re reinsurance assumed and accretion of discounted 
structured settlement liabilities. The use of estimates is inherent in the process of 
establishing unpaid losses and loss expenses. Additional information will be revealed 
over time and those estimates and assumptions will be revised resulting in gains or 
losses in the period made. 

(9)  Borrowings under investment agreements and other debt
      Liabilities reflected for this balance sheet caption are as follows (in millions):

                                                 Dec. 31,   Dec. 31, 
                                                   1997       1996   
                                                 --------   --------
      Borrowings under investment agreements. . .$  816.2   $  865.3 
      1% Senior Exchangeable Notes Due 2001 . . .   805.9      454.6 
      Other debt. . . . . . . . . . . . . . . . .   644.6      624.5
                                                 --------   --------
                                                 $2,266.7   $1,944.4 
                                                 ========   ========

      Borrowings under investment agreements are made pursuant to contracts with terms 
generally ranging from three months to forty years and calling for interest payable, 
normally semiannually, at fixed rates ranging from 3% to 9% per annum. The borrowings 
are senior unsecured debt obligations of the Company.  

      On December 2, 1996,  Berkshire  received  net proceeds of $447.1 million from 
the issuance of $500 million principal amount of 1% Senior Exchangeable Notes, due 
December 2, 2001 (the "Exchange Notes"). Under certain conditions, on the last trading 
day of January, April, July and October from January 1997 through July 2001, each 
$1,000 principal amount Exchange Note is exchangeable at the option of the holder into 
29.92 shares of Travelers Group Inc. common stock ("Travelers Stock").  (Prior to
November 28, 1997, each Exchange Note was exchangeable into 17.65 shares of Salomon 
Inc common stock.) Beginning on December 2, 1999, under certain conditions, the 
Exchange Notes are exchangeable into 29.92 shares of Travelers Stock at the option of
the Company. Upon such exchange, Berkshire may elect to redeem the Exchange Notes 
for the equivalent cash value of the underlying Travelers Stock. In all other 
circumstances, Berkshire will pay the principal amount at maturity. 

      The Exchange Notes are carried at accreted value plus an additional amount 
(the "contingent value") representing the excess, if any, of the value of the 
underlying Travelers Stock over the accreted value of the Notes. The contingent 
value of the Exchange Notes is initially charged to unrealized appreciation of 
investments. The contingent value amount is subsequently recognized in the 
Consolidated Statements of Earnings as a charge against realized investment gains 
on the earliest of the (i) dates that the Exchange Notes mature or are exchanged 
or otherwise redeemed or (ii) the date the related underlying stock is otherwise 
no longer owned by the Company. As of December 31, 1997, the contingent value 
component of the aggregate carrying value of the Exchange Notes was $342.6 
million. There was no contingent value associated with the Exchange Notes at 
year end 1996.

      No materially restrictive covenants are included in any of the various 
debt agreements. Payments of principal amounts expected during the next five 
years are as follows (in millions):

             1998    1999    2000    2001    2002
            ------  ------  ------  ------  ------
            $200.4  $ 61.7  $ 13.4  $829.6  $ 24.6 

(10)  Income taxes
      The liability for income taxes as reflected in the accompanying Consolidated 
Balance Sheets is as follows (in millions):


                                        Dec. 31,    Dec. 31, 
                                          1997        1996   
                                       ---------   ---------
               Payable currently. . . .$   138.5   $   (41.1)
               Deferred . . . . . . . . 10,400.3     6,878.7 
                                       ---------   ---------
                                       $10,538.8   $ 6,837.6 
                                       =========   =========

      The Consolidated Statements of Earnings reflect charges for income taxes as 
shown below (in millions):

                              1997       1996       1995  
                            --------   --------   --------
          Federal. . . . . .$  864.8   $1,169.9   $  252.3  
          State. . . . . . .    32.1       26.1       22.6  
          Foreign. . . . . .     0.8        0.8        1.3
                            --------   --------   --------
                            $  897.7   $1,196.8   $  276.2  
                            ========   ========   ========
          Current. . . . . .$  691.4   $  818.9   $  331.0  
          Deferred . . . . .   206.3      377.9      (54.8
                            --------   --------   --------
                            $  897.7   $1,196.8   $  276.2  
                            ========   ========   ========

      The tax effects of temporary differences that give rise to significant portions 
of deferred tax assets and deferred tax liabilities at December 31, 1997 and 1996, 
are shown below (in millions):

                                                                     1997       1996  
                                                                   ---------  --------
          Deferred tax liabilities:
            Relating to unrealized appreciation of investments. . .$ 9,940.5  $6,620.6
            Other . . . . . . . . . . . . . . . . . . . . . . . . .  1,168.1     860.9
                                                                   ---------  --------
                                                                    11,108.6   7,481.5 
          Deferred tax assets . . . . . . . . . . . . . . . . . . .   (708.3)   (602.8)
                                                                   ---------  --------
          Net deferred tax liability. . . . . . . . . . . . . . . .$10,400.3  $6,878.7 
                                                                   =========  ========

      Charges for income taxes are reconciled to hypothetical amounts computed at the 
federal statutory rate in the table shown below (in millions):

                                                               1997       1996       1995  
                                                             --------   --------   --------
     Earnings before income taxes . . . . . . . . . . . . . .$2,827.6   $3,705.9   $1,084.4 
                                                             ========   ========   ========
     Hypothetical amounts applicable to above
       computed at the federal statutory rate . . . . . . . .$  989.7   $1,297.1   $  379.5 

     Decreases, resulting from:
       Tax-exempt interest income . . . . . . . . . . . . . .   (35.8)     (41.7)     (10.6)
       Dividends received deduction . . . . . . . . . . . . .  (104.4)     (90.3)     (86.3)
     Goodwill amortization. . . . . . . . . . . . . . . . . .    29.1       21.6        5.7 
     State income taxes, less federal income tax benefit. . .    20.8       17.0       14.7 
     Other differences, net . . . . . . . . . . . . . . . . .    (1.7)      (6.9)     (26.8)
                                                             --------   --------   --------
     Total income taxes . . . . . . . . . . . . . . . . . . .$  897.7   $1,196.8   $  276.2 
                                                             ========   ========   ========


(11) Common stock
      Changes in issued and outstanding common stock of the Company during the three 
years ended December 31, 1997, are shown in the table below. 


                                          Class A Common, $5 Par Value      Class B Common 
                                        ---------------------------------  $0.1667 Par Value
                                         Shares    Treasury     Shares     Shares Issued and 
                                         Issued     Shares    Outstanding     Outstanding 
                                        ---------  --------   -----------  -----------------
Balance December 31, 1994 . . . . . . . 1,381,308   203,558    1,177,750          --        
Common stock issued in connection
   with acquisitions of businesses. . .     --      (15,762)      15,762          --
                                        ---------  --------   -----------  -----------------
Balance December 31, 1995 . . . . . . . 1,381,308   187,796    1,193,512          --        
Issuance of Class B common stock. . . .     --         --          --           517,500   
Common stock issued in connection
   with acquisition of business . . . .     --      (17,728)      17,728        112,655   
Conversions of Class A common stock
   to Class B common stock. . . . . . .    (5,120)     --         (5,120)       153,600
                                        ---------  --------   -----------  -----------------
Balance December 31, 1996 . . . . . . . 1,376,188   170,068    1,206,120        783,755   
Common stock issued in connection
   with acquisition of business . . . .     --       (1,866)       1,866            165   
Conversions of Class A common stock
   to Class B common stock and other. .   (10,098)     --        (10,098)       303,236
                                        ---------  --------   -----------  -----------------
Balance December 31, 1997 . . . . . . . 1,366,090   168,202    1,197,888      1,087,156   
                                        =========  ========   ===========  =================

      On May 6, 1996, Berkshire shareholders approved a recapitalization plan which 
created a new class of common stock, designated as Class B Common Stock. In connection 
therewith, Berkshire's then existing common stock was redesignated as Class A Common
Stock. Each share of Class A Common Stock is convertible, at the option of the holder, 
into thirty shares of Class B Common Stock.  Class B Common Stock is not convertible 
into Class A Common Stock. Each share of Class B Common Stock possesses voting rights
equivalent to one-two-hundredth (1/200) of the voting rights of a share of Class A 
Common Stock.

      On May 8, 1996, Berkshire completed an initial public offering of 517,500 shares 
of Class B Common Stock. Berkshire received net proceeds from the offering of $565.0 
million. Since the Class B Common shares are equivalent to one-thirtieth (1/30) of the
economic rights of Class A Common shares, the issuance of the Class B Common Stock was 
equivalent to the issuance of 17,250 Class A Common shares or approximately 1.4% of 
Class A Common shares outstanding at the time of the issuance of Class B Common
shares.

(12) Dividend restrictions - Insurance subsidiaries
      Payments of dividends by Insurance Group members are restricted by insurance 
statutes and regulations. Without prior regulatory approval in 1998, Berkshire can 
receive up to approximately $3.5 billion as dividends from insurance subsidiaries.

      Combined shareholders' equity of insurance subsidiaries determined pursuant 
to statutory accounting rules (Statutory Surplus as Regards Policyholders) was 
approximately $37.2 billion at December 31, 1997. This amount exceeded by approximately 
$7.8 billion the corresponding amount determined on the basis of GAAP. The major 
differences between statutory basis accounting and GAAP are that deferred income tax 
assets and liabilities, deferred charges re reinsurance assumed, and unrealized gains 
and losses on investments in securities with fixed maturities are recognized under 
GAAP but not for statutory reporting purposes. In addition, goodwill of acquired 
businesses is subject to a shorter amortization period under statutory accounting rules 
than is permitted under GAAP.

(13)  Fair values of financial instruments
      SFAS No. 107, "Disclosures about Fair Value of Financial Instruments" requires 
certain fair value disclosures. Fair value disclosures are required for most 
investment securities as well as other contractual assets and liabilities. Certain 
financial instruments, including insurance contracts, are excluded from SFAS 107 
disclosure requirements due to perceived difficulties in measuring fair value. 
Accordingly, an estimation of fair value was not made with respect to unpaid losses 
and loss adjustment expenses.

      In determining fair value, the Company used quoted market prices when available. 
For instruments where quoted market prices were not available, the Company used 
independent pricing services or appraisals by the Company's management. Those services 
and appraisals reflected the estimated present values utilizing current risk adjusted 
market rates of similar instruments.

      Considerable judgement is necessarily required in interpreting market data 
used to develop the estimates of fair value. Accordingly, the estimates presented 
herein are not necessarily indicative of the amounts the Company could realize in 
a current market exchange.  The use of different market assumptions and/or estimation 
methodologies may have a material effect on the estimated fair value.

      The carrying values of cash and cash equivalents, receivables and accounts 
payable, accruals and other liabilities are deemed to be reasonable estimates of 
their fair values. The estimated fair values of the Company's other financial 
instruments as of December 31, 1997 and 1996, are as follows (in millions):


                                              Carrying Value      Estimated Fair Value
                                           --------------------   --------------------
                                              1997       1996        1997       1996 
                                           ---------  ---------   ---------  ---------
Investments in securities with fixed
   maturities . . . . . . . . . . . . . . .$10,297.8  $ 6,446.9   $10,297.8  $ 6,446.9 
Investments in equity securities. . . . . . 36,247.7   27,750.6    36,247.7   27,750.6 
Assets of finance businesses. . . . . . . .  1,248.8      968.8     1,367.3      997.7 
Borrowings under investment agreements 
  and other debt. . . . . . . . . . . . . .  2,266.7    1,944.4     2,262.0    1,937.9 
Liabilities of finance businesses . . . . .  1,067.2      851.3     1,149.4      851.9 

(14) Quarterly data
      A summary of revenues and earnings by quarter for each of the last two years 
is presented in the following table. This information is unaudited. Dollars are in 
millions, except per share amounts.

                                                     1st       2nd       3rd       4th       
         1997                                      Quarter   Quarter   Quarter   Quarter
                                                  --------  --------  --------  --------
Revenues . . . . . . . . . . . . . . . . . . . . .$2,074.8  $2,338.2  $2,372.7  $3,644.3 
                                                  --------  --------  --------  --------
Earnings:
   Excluding realized investment gain. . . . . . .$  263.1  $  254.9  $  248.1  $  432.0 
   Realized investment gain. . . . . . . . . . . .    21.3      22.9     118.5     540.8*
                                                  --------  --------  --------  --------
   Net earnings. . . . . . . . . . . . . . . . . .$  284.4  $  277.8  $  366.6  $  972.8 
                                                  ========  ========  ========  ========
Earnings per equivalent Class A common share:
   Excluding realized investment gain. . . . . . .$ 213.51  $ 206.86  $ 201.03  $ 350.05 
   Realized investment gain. . . . . . . . . . . .   17.29     18.58     96.02    438.20*
                                                  --------  --------  --------  --------
   Net earnings. . . . . . . . . . . . . . . . . .$ 230.80  $ 225.44  $ 297.05  $ 788.25 
                                                  ========  ========  ========  ========

*  Includes $427.3 million ($346.47/share), net of taxes, related to gain arising 
   from Travelers Group Inc.'s acquisition of Salomon Inc. See Note 5.

                                                     1st        2nd       3rd       4th       
         1996                                      Quarter    Quarter   Quarter   Quarter
                                                  ---------  --------  --------  --------
Revenues . . . . . . . . . . . . . . . . . . . . .$ 4,139.7  $1,914.8  $2,015.3  $2,430.5
                                                  ---------  --------  --------  --------
Earnings:
   Excluding realized investment gain. . . . . . .$   160.2  $  193.7  $  201.4  $  328.1 
   Realized investment gain (loss) . . . . . . . .  1,508.5*     (2.5)     62.6      36.6
                                                  ---------  --------  --------  --------
   Net earnings. . . . . . . . . . . . . . . . . .$ 1,668.7  $  191.2  $  264.0  $  364.7 
                                                  =========  ========  ========  ========
Earnings per equivalent Class A common share:
   Excluding realized investment gain. . . . . . .$  134.23  $ 160.91  $ 166.34  $ 270.52 
   Realized investment gain (loss) . . . . . . . . 1,263.92*    (2.08)    51.70     30.17
                                                  ---------  --------  --------  --------
   Net earnings. . . . . . . . . . . . . . . . . .$1,398.15  $ 158.83  $ 218.04  $ 300.69 
                                                  =========  ========  ========  ========

*  Includes $1.4 billion ($1,143.68/share), net of taxes, related to gain arising
   from The Walt Disney Company's acquisition of Capital Cities/ABC, Inc. See Note 5.


(15) Business Segment Data
      Berkshire identified seven business segments for purposes of 1997 reporting 
pursuant to SFAS No. 14. These include the property and casualty insurance business 
(The Insurance Segment) conducted on both a direct and reinsurance basis through a 
number of subsidiaries. Included in this segment is GEICO Corporation, the seventh 
largest auto insurer in the United States and National Indemnity Company, one of the 
world's leading providers of catastrophe excess of loss reinsurance. Berkshire's six 
separately conducted non-insurance business segments are as follows:

  Business identity 
  and headquarters             Segment                    Activity                                          

FlightSafety International     Aviation training          High technology training to operators of 
  Flushing, NY                                              aircraft and ships
  
See's Candies                  Candy                       Manufacture and distribution at retail  
 South San Francisco, CA                                    and by catalog solicitation  
  
Kirby, Douglas and  
 Cleveland Wood Divisions  
 of The Scott Fetzer Company   Home cleaning systems       Manufacture and sale principally to distributors  
 Cleveland, OH  
  
Nebraska Furniture Mart and    Home furnishings            Retailing  
 R.C. Willey Home Furnishings  
 and Star Furniture Company
 Omaha, NE, Salt Lake  
 City, UT and Houston, TX  
  
Buffalo News                   Newspaper                   Publication of a daily and Sunday newspaper  
 Buffalo, NY  
  
H. H. Brown Shoe Co.,  
 Lowell Shoe, Inc. and  
 Dexter Shoe Companies         Shoes                       Manufacture, importing and distribution at wholesale  
 Greenwich, CT, Hudson,                                     and retail  
 NH and Dexter, ME  

      The business segments identified above were responsible in 1997 for 86% of 
Berkshire's consolidated revenues. Other businesses activities that contributed 
for 1997, in the aggregate, 13% of Berkshire's consolidated revenues, were as follows:
  
Business identity              Product/Service/Activity                                                                
  
Adalet - PLM                   Explosion proof electrical enclosures, cable couplers and terminations  
BHR                            Real estate management  
Berkshire Hathaway  
 Credit Corporation            Commercial financing  
Berkshire Hathaway Life  
 Insurance Co.                 Annuities and other financial products  
Blue Chip Stamps               Marketing motivational services  
Borsheim's                     Retailing fine jewelry  
Campbell Hausfeld              Air compressors, air tools, painting systems, pressure washers, welders and generators  
Carefree                       Comfort and convenience products for the recreational vehicle industry  
Fechheimer Bros. Co.           Uniforms and accessories  
France                         Appliance controls; ignition and sign transformers  
Halex                          Zinc die cast conduit fittings and other electrical construction materials  
Helzberg's Diamond Shops       Retailing fine jewelry  
Kingston                       Appliance controls
Meriam                         Pressure and flow measurement devices  
Northland                      Fractional horsepower electric motors  
Powerwinch                     Marine and general purpose winches, windlasses, and hoists  
Precision Steel Products       Steel service center  
Quikut                         Cutlery for home and sporting goods markets  
ScottCare                      Cardiopulmonary rehabilitation and monitoring equipment  
Scott Fetzer Financial Group   Commercial and consumer finance companies  
Scot Labs                      Cleaning and maintenance chemicals  
Stahl                          Custom service bodies, flatbed bodies, cranes and tool boxes for trucks  
Wayne Combustion Systems       Oil and gas burners for residential and commercial furnaces and water heaters  
Wayne Pumps                    Sump, utility and sewage pumps 
Wesco Financial                Real estate management  
Western Enterprises            Medical and industrial compressed gas fittings and regulators  
Western Plastics               Molded plastic components  
World Book                     Printed and multimedia encyclopedias and other reference materials

      A disaggregation of Berkshire's consolidated data for each of the three most 
recent years is presented in the tables which follow on this and the following page. 
Amounts are in millions.

                                                Revenues              Operating profit before taxes
                                       1997       1996       1995       1997       1996       1995 
                                    ---------  ---------  ---------  ---------  ---------  ---------
Identified Segments:
  Insurance. . . . . . . . . . . . .$ 6,695.4  $ 7,133.1  $ 1,715.7  $ 2,346.7  $ 3,189.6  $   776.5 
  Non-insurance businesses . . . . .  2,297.8    1,812.3    1,617.2      391.9      259.6      225.8
                                    ---------  ---------  ---------  ---------  ---------  ---------
                                      8,993.2    8,945.4    3,332.9    2,738.6    3,449.2    1,002.3 

Other than identified segments . . .  1,436.8    1,554.9    1,230.4      194.2      349.7      138.1 

Interest expense * . . . . . . . . .                                    (105.2)     (93.0)     (56.0)
                                    ---------  ---------  ---------  ---------  ---------  ---------
  Aggregate consolidated total      $10,430.0  $10,500.3  $ 4,563.3  $ 2,827.6  $ 3,705.9  $ 1,084.4 
                                    =========  =========  =========  =========  =========  =========

* Amounts of interest expense represent those for borrowings under investment 
  agreements and other debt exclusive of that of finance businesses and interest 
  allocated to certain identified segments.


Insurance Segment
                                        Revenues            Operating profit before taxes 
                               1997       1996      1995      1997      1996      1995 
                             --------   --------  --------  --------  --------  --------
Premiums earned: *
   Direct . . . . . . . . . .$3,878.5  $3,432.9   $  287.3 
   Reinsurance assumed. . . .   968.4     764.0      718.4 
   Reinsurance ceded. . . . .   (85.8)    (79.1)     (48.2)
                             --------   --------  --------  
                              4,761.1   4,117.8      957.5 

Underwriting. . . . . . . . .$  461.4  $  230.7  $   19.6
Goodwill amortization . . . .                                  (42.9)    (42.6) 
Investment income . . . . . .   879.0      725.9     577.1     872.9     712.1     575.8
Realized investment gain. . . 1,055.3    2,289.4     181.1   1,055.3   2,289.4     181.1
                             --------   --------  --------  --------  --------  --------
                             $6,695.4   $7,133.1  $1,715.7  $2,346.7  $3,189.6  $  776.5
                             ========   ========  ========  ========  ========  ========

*  Premiums written were as follows:

                               1997      1996      1995
                             --------  --------  --------
     Direct . . . . . . . . .$3,980.4  $3,465.4  $  294.8
     Reinsurance assumed. . .   956.5     722.7     777.9
     Reinsurance ceded. . . .   (84.6)    (82.9)    (48.5)
                             --------  --------  --------
                             $4,852.3  $4,105.2  $1,024.2
                             ========  ========  ======== 

Non-Insurance Business Segments
                                      Revenues              Operating profit before taxes 
                             1997       1996       1995       1997       1996       1995  
                          ---------  ---------  ---------  ---------  ---------  ---------
Aviation training. . . . .$   410.9  $     8.4  $    --    $   118.6  $     2.7	 $    --  
Candy. . . . . . . . . . .    269.2      248.9      233.6       57.6       50.9       49.3 
Home cleaning systems. . .    253.5      253.7      235.6       66.5       62.5       52.6 
Home furnishings . . . . .    667.1      586.6      428.1       53.7       41.0       28.1 
Newspaper. . . . . . . . .    155.5      154.2      154.8       55.4       49.8       46.3 
Shoes. . . . . . . . . . .    541.6      560.5      565.1       40.1       52.7       49.5
                          ---------  ---------  ---------  ---------  ---------  ---------
                          $ 2,297.8  $ 1,812.3  $ 1,617.2  $   391.9  $   259.6  $   225.8 
                          =========  =========  =========  =========  =========  =========

Other Than Identified Segments
                                                   Revenues            Operating profit before taxes 
                                           1997      1996      1995      1997      1996      1995
                                         --------  --------  --------  --------  --------  --------
Other businesses. . . . . . . . . . . . .$1,349.4  $1,306.2  $1,179.6  $  123.4  $  116.1  $  101.2  

Not identified with specific businesses:
   Interest and dividend income . . . . .    36.4      54.0      37.8      36.4      54.0      37.8  
   Realized investment gain . . . . . . .    51.0     194.7      13.0      51.0     194.7      13.0  
   All other except interest expense. . .                                 (16.6)    (15.1)    (13.9) 
                                         --------  --------  --------  --------  --------  --------
                                         $1,436.8  $1,554.9  $1,230.4  $  194.2  $  349.7  $  138.1  
                                         ========  ========  ========  ========  ========  ========


                                                          Deprec.& amort.   
                            Capital expenditures *       of tangible assets 
                            1997     1996     1995     1997     1996     1995 
                          -------  -------  -------  -------  -------   ------
Insurance. . . . . . . . .$  28.7  $  12.2  $   1.2  $  27.2  $  26.3	$  0.9
Aviation training. . . . .  118.9      --       --      54.9      --       --
Candy. . . . . . . . . . .   20.1      5.3      5.1      4.5      4.5      4.1
Home cleaning systems. . .    0.6      2.0      0.3      2.8      2.7      3.0
Home furnishings . . . . .   43.3     21.6      9.2     10.5     10.0      9.7
Newspaper. . . . . . . . .    2.9      1.0      1.8      2.4      2.8      4.9
Shoes. . . . . . . . . . .   10.8     12.8     13.7     13.2     13.4     12.0
Other. . . . . . . . . . .   16.9     26.9     22.9     28.6     28.0     25.7
                          -------  -------  -------  -------  -------   ------
                          $ 242.2  $  81.8  $  54.2  $ 144.1  $  87.7  $  60.3
                          =======  =======  =======  =======  =======  =======


* Excludes expenditures which were part of business acquisitions. 


                                Identifiable assets     
                                    at year-end         
                             1997       1996       1995 
                          ---------  ---------  ---------
Insurance. . . . . . . . .$49,962.5  $36,597.8  $25,280.0
Aviation training. . . . .  1,679.2    1,683.7        -- 
Candy. . . . . . . . . . .     88.1       74.1       74.5
Home cleaning systems. . .     43.2       44.3       42.9
Home furnishings . . . . .    593.9      445.8      427.7
Newspaper. . . . . . . . .     42.1       42.0       45.0
Shoes. . . . . . . . . . .    634.7      624.4      656.7
Other. . . . . . . . . . .  3,067.2    3,897.3    2,184.6
                          ---------  ---------  ---------
                          $56,110.9  $43,409.4  $28,711.4
                          =========  =========  =========

(16)  Supplemental cash flow information
      A summary of supplemental cash flow information is presented in the following 
table (in millions):

                                               1997      1996      1995 
                                             --------  --------  --------
Cash paid during the year for:
   Income taxes . . . . . . . . . . . . . . .$  498.5  $  965.9  $  294.6 
   Interest . . . . . . . . . . . . . . . . .   123.1     129.4      83.9 
Non-cash investing and financing activities:
   Liabilities assumed in connection 
     with acquisitions of businesses. . . . .    25.4   4,172.1     248.0 
   Common shares issued in connection 
     with acquisitions of businesses. . . . .    73.0     710.8     348.5 
   Fair value of investments acquired as
     part of exchanges and conversions. . . . 1,837.4   1,618.6      --
   Contingent value of Exchange Notes
     recognized in earnings . . . . . . . . .   298.4      --        --
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