UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2008

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

BERKSHIRE HATHAWAY INC.

(Exact name of registrant as specified in its charter)

Delaware		47-0813844
(State or other jurisdiction of		(I.R.S. Employer Identification Number)
incorporation or organization)

1440 Kiewit Plaza, Omaha, Nebraska 68131
(Address of principal executive office)
(Zip Code)

(402) 346-1400

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. YES þ NO o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No þ

Number of shares of common stock outstanding as of April 25, 2008:

Class A — 1,080,213
Class B — 14,059,262

 

 

		FORM 10-Q		Q/E 3/31/08

		Page No.
Part I — Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets — March 31, 2008 and December 31, 2007			2
Consolidated Statements of Earnings — First Quarter 2008 and 2007			3
Condensed Consolidated Statements of Cash Flows — First Quarter 2008 and 2007			4
Notes to Interim Consolidated Financial Statements			5-14
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			15-26
Item 3. Quantitative and Qualitative Disclosures About Market Risk			26
Item 4. Controls and Procedures			26
Part II – Other Information
Item 1. Legal Proceedings			27
Item 1A. Risk Factors			27
Item 6. Exhibits			27
Signature			27
Exhibit 31 Rule 13a-14(a)/15d-14(a) Certifications			28-29
Exhibit 32 Section 1350 Certifications			30-31

		FORM 10-Q		Q/E 3/31/08

		March 31,				December 31,
		2008				2007
		(Unaudited)
ASSETS
Insurance and Other:
Cash and cash equivalents		$	31,102			$	37,703
Investments:
Fixed maturity securities			31,775				28,515
Equity securities			72,554				74,999
Loans and receivables			15,505				13,157
Inventories			6,715				5,793
Property, plant and equipment and leased assets			16,221				9,969
Goodwill			26,941				26,306
Deferred charges reinsurance assumed			3,864				3,987
Other			9,470				7,797
			214,147				208,226
Utilities and Energy:
Cash and cash equivalents			2,187				1,178
Property, plant and equipment			26,555				26,221
Goodwill			5,588				5,543
Other			6,117				6,246
			40,447				39,188
Finance and Financial Products:
Cash and cash equivalents			2,277				5,448
Investments in fixed maturity securities			6,864				3,056
Loans and finance receivables			12,956				12,359
Goodwill			1,015				1,013
Other			3,341				3,870
			26,453				25,746
		$	281,047			$	273,160
LIABILITIES AND SHAREHOLDERS’ EQUITY
Insurance and Other:
Losses and loss adjustment expenses		$	56,442			$	56,002
Unearned premiums			8,004				6,680
Life and health insurance benefits			3,933				3,804
Other policyholder liabilities			4,204				4,089
Accounts payable, accruals and other liabilities			10,985				10,672
Notes payable and other borrowings			3,730				2,680
			87,298				83,927
Utilities and Energy:
Accounts payable, accruals and other liabilities			6,122				6,043
Notes payable and other borrowings			19,640				19,002
			25,762				25,045
Finance and Financial Products:
Accounts payable, accruals and other liabilities			2,693				2,931
Derivative contract liabilities			9,471				6,887
Notes payable and other borrowings			12,807				12,144
			24,971				21,962
Income taxes, principally deferred			19,370				18,825
Total liabilities			157,401				149,759
Minority shareholders’ interests			4,274				2,668
Shareholders’ equity:
Common stock:
Class A, $5 par value; Class B, $0.1667 par value			8				8
Capital in excess of par value			27,100				26,952
Accumulated other comprehensive income			19,171				21,620
Retained earnings			73,093				72,153
Total shareholders’ equity			119,372				120,733
		$	281,047			$	273,160

See accompanying Notes to Interim Consolidated Financial Statements

		FORM 10-Q		Q/E 3/31/08

		First Quarter
		2008				2007
		(Unaudited)
Revenues:
Insurance and Other:
Insurance premiums earned		$	6,209			$	13,514
Sales and service revenues			14,760				13,223
Interest, dividend and other investment income			1,184				1,120
Investment gains/losses			115				442
			22,268				28,299
Utilities and Energy:
Operating revenues			3,356				3,224
Other			38				49
			3,394				3,273
Finance and Financial Products:
Interest income			438				421
Investment gains/losses			—				1
Derivative gains/losses			(1,641	)			143
Other			716				781
			(487	)			1,346
			25,175				32,918
Costs and expenses:
Insurance and Other:
Insurance losses and loss adjustment expenses			4,040				10,859
Life and health insurance benefits			490				435
Insurance underwriting expenses			1,397				1,293
Cost of sales and services			12,108				10,865
Selling, general and administrative expenses			1,860				1,641
Interest expense			33				43
			19,928				25,136
Utilities and Energy:
Cost of sales and operating expenses			2,584				2,488
Interest expense			294				272
			2,878				2,760
Finance and Financial Products:
Interest expense			149				148
Other			767				802
			916				950
			23,722				28,846
Earnings before income taxes and minority interests			1,453				4,072
Income taxes			408				1,388
Minority shareholders’ interests			105				89
Net earnings		$	940			$	2,595
Average common shares outstanding *			1,548,395				1,542,809
Net earnings per common share *		$	607			$	1,682

See accompanying Notes to Interim Consolidated Financial Statements

		FORM 10-Q		Q/E 3/31/08

		First Quarter
		2008				2007
		(Unaudited)
Net cash flows from operating activities		$	3,353			$	4,625
Cash flows from investing activities:
Purchases of fixed maturity securities			(10,511	)			(1,476	)
Purchases of equity securities			(1,537	)			(5,310	)
Sales of securities with fixed maturities			1,566				891
Redemptions and maturities of securities with fixed maturities			2,548				4,713
Sales of equity securities			104				401
Purchases of loans and finance receivables			(653	)			(157	)
Principal collections on loans and finance receivables			174				190
Acquisitions of businesses, net of cash acquired			(4,873	)			(870	)
Purchases of property, plant and equipment			(1,041	)			(1,228	)
Other			881				98
Net cash flows from investing activities			(13,342	)			(2,748	)
Cash flows from financing activities:
Proceeds from borrowings of finance businesses			2,068				400
Proceeds from borrowings of utilities and energy businesses			1,046				751
Proceeds from other borrowings			58				29
Repayments of borrowings of finance businesses			(1,357	)			(66	)
Repayments of borrowings of utilities and energy businesses			(399	)			(38	)
Repayments of other borrowings			(88	)			(512	)
Change in short term borrowings			(155	)			(178	)
Other			32				26
Net cash flows from financing activities			1,205				412
Effect of foreign currency exchange rate changes			21				(5	)
Increase (decrease) in cash and cash equivalents			(8,763	)			2,284
Cash and cash equivalents at beginning of year *			44,329				43,743
Cash and cash equivalents at end of first quarter *		$	35,566			$	46,027
Supplemental cash flow information:
Cash paid during the period for:
Income taxes		$	201			$	258
Interest of finance and financial products businesses			145				147
Interest of utilities and energy businesses			295				243
Interest of insurance and other businesses			37				52
Non-cash investing activity:
Liabilities assumed in connection with acquisitions of businesses			3,848				56

Beginning of year —
Insurance and Other		$	37,703			$	37,977
Utilities and Energy			1,178				343
Finance and Financial Products			5,448				5,423
		$	44,329			$	43,743
End of first quarter —
Insurance and Other		$	31,102			$	39,580
Utilities and Energy			2,187				950
Finance and Financial Products			2,277				5,497
		$	35,566			$	46,027

See accompanying Notes to Interim Consolidated Financial Statements

		FORM 10-Q		Q/E 3/31/08

BERKSHIRE HATHAWAY INC.
and Subsidiaries

Note 1. General

     The accompanying unaudited Consolidated Financial Statements include the accounts of Berkshire Hathaway Inc. (“Berkshire” or “Company”) consolidated with the accounts of all its subsidiaries and affiliates in which Berkshire holds a controlling financial interest as of the financial statement date. Reference is made to Berkshire’s most recently issued Annual Report on Form 10-K (“Annual Report”) that included information necessary or useful to understanding Berkshire’s businesses and financial statement presentations. In particular, Berkshire’s significant accounting policies and practices were presented as Note 1 to the Consolidated Financial Statements included in the Annual Report. Certain amounts in 2007 have been reclassified to conform with the current year presentation. Financial information in this Report reflects any adjustments (consisting only of normal recurring adjustments) that are, in the opinion of management, necessary to a fair statement of results for the interim periods in accordance with accounting principles generally accepted in the United States (“GAAP”).

     For a number of reasons, Berkshire’s results for interim periods are not normally indicative of results to be expected for the year. The timing and magnitude of catastrophe losses incurred by insurance subsidiaries and the estimation error inherent to the process of determining liabilities for unpaid losses of insurance subsidiaries can be relatively more significant to results of interim periods than to results for a full year. Investment gains/losses are recorded when investments are sold, other-than-temporarily impaired or in instances as required under GAAP, when investments are marked-to-market. Variations in the amounts and timing of investment gains/losses can cause significant variations in periodic net earnings. In addition, changes in the fair value of derivative assets/liabilities associated with derivative contracts that do not qualify for hedge accounting treatment can cause significant variations in periodic net earnings.

Note 2. Business acquisitions

     Berkshire’s long-held acquisition strategy is to purchase businesses with consistent earnings, good returns on equity, able and honest management and at sensible prices. On March 30, 2007, Berkshire acquired TTI, Inc., a privately held electronic components distributor headquartered in Fort Worth, Texas. TTI, Inc. is a leading distributor of passive, interconnect and electromechanical components. Effective April 1, 2007, Berkshire acquired the intimate apparel business of VF Corporation. During 2007, Berkshire also acquired other relatively smaller businesses. Consideration paid for all businesses acquired in 2007 was approximately $1.6 billion.

     On March 18, 2008, Berkshire acquired 60% of Marmon Holdings, Inc. (“Marmon”), a private company owned by trusts for the benefit of members of the Pritzker Family of Chicago for $4.5 billion. In April 2008, Berkshire acquired an additional 4.4% interest in Marmon for $329 million. In addition, under the terms of the purchase agreement, Berkshire will acquire the remaining 35.6% through staged acquisitions over a five to six year period for consideration to be based on the future earnings of Marmon.

     Marmon consists of 125 manufacturing and service businesses that operate independently within diverse business sectors. These sectors are Wire & Cable, serving energy related markets, residential and non-residential construction and other industries; Transportation Services & Engineered Products, including railroad tank cars and intermodal tank containers; Highway Technologies, primarily serving the heavy-duty highway transportation industry; Distribution Services for specialty pipe and steel tubing; Flow Products, producing a variety of metal products and materials for the plumbing, HVAC/R, construction and industrial markets; Industrial Products, including metal fasteners, safety products and metal fabrication; Construction Services, providing the leasing and operation of mobile cranes primarily to the energy, mining and petrochemical markets; Water Treatment equipment for residential, commercial and industrial applications; and Retail Services, providing store fixtures, food preparation equipment and related services. Marmon has approximately 20,000 employees and operates more than 250 manufacturing, distribution and service facilities, primarily in North America, Europe and China. Consolidated revenues in 2007 were approximately $7 billion.

     A preliminary purchase price allocation related to the Marmon acquisition is summarized below (in millions).

Assets:
Cash and cash equivalents		$	217
Accounts receivable			970
Inventories			841
Property, plant and equipment and leased assets			6,195
Other, primarily goodwill and intangible assets			1,822
		$	10,045
Liabilities and net assets:
Accounts payable, accruals and other liabilities		$	1,025
Notes payable and other borrowings			1,071
Income taxes, principally deferred			1,737
Minority shareholders’ interest			1,712
Net assets acquired			4,500
		$	10,045

		FORM 10-Q		Q/E 3/31/08

Notes To Interim Consolidated Financial Statements (Continued)

Note 2. Business acquisitions (Continued)

     The results of operations for each of the businesses acquired are included in Berkshire’s consolidated results from the effective date of each acquisition. The following table sets forth certain unaudited pro forma consolidated earnings data for the first three months of 2008 and 2007, as if each acquisition was consummated on the same terms at the beginning of each year. Amounts are in millions, except earnings per share.

		2008				2007
Total revenues		$	26,587			$	35,259
Net earnings			930				2,596
Earnings per equivalent Class A common share			601				1,683

Note 3. Investments in fixed maturity securities

     Data with respect to investments in fixed maturity securities follows (in millions).

		Insurance and other								Finance and financial products
		Mar. 31, 2008				Dec. 31, 2007				Mar. 31, 2008				Dec. 31, 2007
Amortized cost		$	30,302			$	27,133			$	5,136			$	1,358
Gross unrealized gains			1,594				1,491				120				115
Gross unrealized losses			(121	)			(109	)			—				—
Fair value		$	31,775	*		$	28,515			$	5,256	**		$	1,473

     Certain other fixed maturity investments of finance businesses are classified as held-to-maturity, which are carried at amortized cost. The carrying value and fair value of these investments totaled $1,608 million and $1,791 million at March 31, 2008, respectively. At December 31, 2007, the carrying value and fair value of held-to-maturity securities totaled $1,583 million and $1,758 million, respectively. Unrealized losses at March 31, 2008 and December 31, 2007 included $34 million and $60 million, respectively, related to securities that have been in an unrealized loss position for 12 months or more. Berkshire has the ability and intent to hold these securities until fair value recovers.

Note 4. Investments in equity securities

     Data with respect to investments in equity securities are shown in the tabulation below (in millions).

		March 31,				December 31,
		2008				2007
Total cost		$	46,329			$	44,695
Gross unrealized gains			28,101				31,289
Gross unrealized losses *			(1,876	)			(985	)
Total fair value		$	72,554			$	74,999

Note 5. Derivative contracts of finance and financial products businesses

     Berkshire utilizes derivatives in order to manage certain economic business risks as well as to assume specified amounts of market risk from others. The contracts summarized in the following table, with limited exceptions, are not designated as hedges for financial reporting purposes. Changes in the fair values of derivative assets and derivative liabilities that do not qualify as hedges are reported in the Consolidated Statements of Earnings as derivative gains/losses. Master netting agreements are utilized to manage counterparty credit risk, where gains and losses are netted across other contracts with that counterparty.

     Under certain circumstances, including a downgrade of its credit rating below specified levels, Berkshire may be required to post collateral against derivative contract liabilities. However, Berkshire is not required to post collateral with respect to most of its long-dated credit default and equity index put option contracts. At March 31, 2008 and December 31, 2007, Berkshire had posted no collateral with counterparties as security on derivative contract liabilities.

		FORM 10-Q		Q/E 3/31/08

Notes To Interim Consolidated Financial Statements (Continued)

Note 5. Derivative contracts of finance and financial products businesses (Continued)

     A summary of the fair value and gross notional value of open derivative contracts of finance and financial products businesses follows. Amounts are in millions.

		March 31, 2008												December 31, 2007
										Notional												Notional
		Assets *				Liabilities				Value				Assets *				Liabilities				Value
Credit default obligations		$	7			$	2,505			$	8,487			$	—			$	1,838			$	4,660
Equity index put options			—				6,171				40,088				—				4,610				35,043
Other			629				795								749				489
Adjustment for counterparty netting			(304	)			—								(50	)			(50	)
Derivative contract assets and liabilities		$	332			$	9,471							$	699			$	6,887

Note 6. Fair value measurements

     Effective January 1, 2008, Berkshire adopted the provisions of SFAS No. 157, “Fair Value Measurements” (“SFAS 157”) with respect to fair value measurements of financial assets and liabilities. Under SFAS 157, fair value is the price to sell an asset or transfer a liability between market participants as of the measurement date. Fair value measurements assume the asset or liability is exchanged in an orderly manner; the exchange is in the principal market for that asset or liability (or in the most advantageous market when no principal market exists); and the market participants are independent, knowledgeable, able and willing to transact an exchange. SFAS 157 also clarifies that the reporting entity’s nonperformance risk (credit risk) should be considered in valuing liabilities.

     SFAS 157 establishes a framework for measuring fair value by creating a hierarchy for observable independent market inputs and unobservable market assumptions and expands disclosures about fair value measurements. Considerable judgment is 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 that could be realized 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.

     Financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2008 are summarized in the following table by the type of inputs applicable to the fair value measurements (in millions).

						Quoted				Significant Other				Significant
		Total				Prices				Observable Inputs				Unobservable Inputs
		Fair Value				(Level 1)				(Level 2)				(Level 3)
Assets
Insurance and other:
Investments in fixed maturity securities		$	31,775			$	6,092			$	25,448			$	235
Investments in equity securities			72,554				72,129				110				315
Finance and financial products:
Investments in fixed maturity securities		$	7,047			$	36			$	6,862			$	149
Other			332				—				298				34
Liabilities
Finance and financial products:
Derivative contract liabilities		$	9,471			$	—			$	461			$	9,010

     A description of the inputs used in the valuation of assets and liabilities reflected in the preceding table follows:

Level 1 – Inputs represent unadjusted quoted prices for identical assets or liabilities exchanged in active markets.

Level 2 – Inputs include directly or indirectly observable inputs other than Level 1 inputs such as quoted prices for similar assets or liabilities exchanged in active or inactive markets; quoted prices for identical assets or liabilities exchanged in inactive markets; other inputs that are considered in fair value determinations of the assets or liabilities, such as interest rates and yield curves that are observable at commonly quoted intervals, volatilities, prepayment speeds, loss severities, credit risks and default rates; and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

		FORM 10-Q		Q/E 3/31/08

Notes To Interim Consolidated Financial Statements (Continued)

Note 6. Fair value measurements (Continued)

Level 3 – Inputs are unobservable inputs that are used in the measurement of assets and liabilities. Management is required to use its own assumptions regarding unobservable inputs because there is little, if any, market activity in the asset or liability or related observable inputs that can be corroborated at the measurement date. Measurements of non-exchange traded derivative contract assets and liabilities are primarily based on valuation models, discounted cash flow models or other valuation techniques that are believed to be used by market participants. Unobservable inputs require management to make certain projections and assumptions about the information that would be used by market participants in pricing an asset or liability.

     A reconciliation of assets and liabilities measured at fair value on a recurring basis with the use of significant unobservable inputs (Level 3) from January 1, 2008 to March 31, 2008 follows (in millions).

		Insurance and other								Finance and financial products
		Investments								Investments
		in fixed				Investments				in fixed								Derivative
		maturity				in equity				maturity				Other				contract
		securities				securities				securities				assets				liabilities
Balance at January 1, 2008		$	239			$	356			$	154			$	39			$	(6,487	)
Gains (losses) included in:
Earnings *			10				—				—				(5	)			(1,662	)
Other comprehensive income			(5	)			(41	)			(5	)			—				—
Purchases, issuances and settlements			(13	)			—				—				—				(861	)
Transfers into (out of) Level 3			4				—				—				—				—
Balance at March 31, 2008		$	235			$	315			$	149			$	34			$	(9,010	)

     Effective January 1, 2008, Berkshire adopted SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities — Including an amendment of FASB Statement No. 115,” which permits entities to elect to measure eligible items at fair value at specified dates. Berkshire did not elect the fair value option for any eligible items.

Note 7. Loans and receivables

     Receivables of insurance and other businesses are comprised of the following (in millions).

		March 31,				December 31,
		2008				2007
Insurance premiums receivable		$	5,162			$	4,215
Reinsurance recoverables			3,269				3,171
Trade and other receivables			7,466				6,127
Allowances for uncollectible accounts			(392	)			(356	)
		$	15,505			$	13,157

     Loans and finance receivables of finance and financial products businesses are comprised of the following (in millions).

		March 31,				December 31,
		2008				2007
Consumer installment loans and finance receivables		$	12,103			$	11,506
Commercial loans and finance receivables			1,009				1,003
Allowances for uncollectible loans			(156	)			(150	)
		$	12,956			$	12,359

		FORM 10-Q		Q/E 3/31/08

Notes To Interim Consolidated Financial Statements (Continued)

Note 8. Property, plant and equipment of utilities and energy businesses

     Property, plant and equipment of the utilities and energy businesses are summarized as follows (in millions).

		Ranges of		March 31,				December 31,
		estimated useful life		2008				2007
Utility generation, distribution and transmission system		5-85 years		$	30,872			$	30,369
Interstate pipeline assets		3-67 years			5,462				5,484
Independent power plants and other assets		3-30 years			1,339				1,330
Construction in progress		—			1,756				1,745
					39,429				38,928
Accumulated depreciation and amortization					(12,874	)			(12,707	)
				$	26,555			$	26,221

     The utility generation, distribution and transmission system and interstate pipeline assets are the regulated assets of public utility and natural gas pipeline subsidiaries. At March 31, 2008 and December 31, 2007, accumulated depreciation and amortization related to regulated assets totaled $12.4 billion and $12.3 billion, respectively. Substantially all of the construction in progress at March 31, 2008 and December 31, 2007 relate to the construction of regulated assets.

Note 9. Inventories

     Inventories are comprised of the following (in millions).

		March 31,				December 31,
		2008				2007
Raw materials		$	1,143			$	897
Work in process and other			691				479
Finished manufactured goods			2,422				1,781
Purchased goods			2,459				2,636
		$	6,715			$	5,793

Note 10. Income taxes, principally deferred

     The liability for income taxes as of March 31, 2008 and December 31, 2007 as reflected in the accompanying Consolidated Balance Sheets is as follows (in millions).

		March 31,				December 31,
		2008				2007
Payable currently		$	670			$	(182	)
Deferred			17,986				18,156
Other			714				851
		$	19,370			$	18,825

Note 11. Notes payable and other borrowings

     Notes payable and other borrowings of Berkshire and its subsidiaries are summarized below (in millions).

		March 31,				December 31,
		2008				2007
Insurance and other:
Issued or guaranteed by Berkshire		$	1,691			$	1,682
Issued by subsidiaries and not guaranteed by Berkshire			2,039				998
		$	3,730			$	2,680

     As of March 31, 2008, notes payable and other borrowings issued by subsidiaries included $1.1 billion of Marmon borrowings (See Note 2).

		March 31,				December 31,
		2008				2007
Utilities and energy:
Issued by MidAmerican and its subsidiaries and not guaranteed by Berkshire:
MidAmerican senior unsecured debt		$	6,120			$	5,471
Subsidiary and project debt			13,215				13,227
Other			305				304
		$	19,640			$	19,002

		FORM 10-Q		Q/E 3/31/08

Notes To Interim Consolidated Financial Statements (Continued)

Note 11. Notes payable and other borrowings (Continued)

     Subsidiary and project debt of utilities and energy businesses represents amounts issued by subsidiaries of MidAmerican pursuant to separate project financing agreements. All or substantially all of the assets of certain utility subsidiaries are or may be pledged or encumbered to support or otherwise secure the debt. These borrowing arrangements generally contain various covenants including, but not limited to, leverage ratios, interest coverage ratios and debt service coverage ratios. As of March 31, 2008, MidAmerican and its subsidiaries were in compliance with all applicable covenants. During the first quarter of 2008, MidAmerican and its subsidiaries issued $1.0 billion of notes maturing in 2018 and repaid debt of $399 million. An additional $1.57 billion of debt is scheduled to mature over the remainder of 2008.

		March 31,				December 31,
		2008				2007
Finance and financial products:
Issued by Berkshire Hathaway Finance Corporation (“BHFC”) and guaranteed by Berkshire		$	9,635			$	8,886
Issued by other subsidiaries and guaranteed by Berkshire			779				804
Issued by other subsidiaries and not guaranteed by Berkshire			2,393				2,454
		$	12,807			$	12,144

     In January 2008, BHFC issued $2 billion of senior notes including $1.5 billion of notes due in 2011 and $500 million of notes due in 2013 and repaid $1.25 billion of maturing notes. An additional $1.85 billion of BHFC notes are scheduled to mature over the remainder of 2008. Borrowings by BHFC are used to provide financing for consumer installment loans.

Note 12. Common stock

     The following table summarizes Berkshire’s common stock activity during the first quarter of 2008.

		Class A common stock				Class B common stock
		(1,650,000 shares authorized)				(55,000,000 shares authorized)
		Issued and Outstanding				Issued and Outstanding
Balance at December 31, 2007			1,081,024				14,000,080
Common stock issued			955				5,520
Conversions of Class A common stock to Class B common stock			(1,222	)			36,660
Balance at March 31, 2008			1,080,757				14,042,260

     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. 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 1,548,832 shares outstanding at March 31, 2008 and 1,547,693 shares outstanding at December 31, 2007. Each Class A common share is entitled to one vote per share. Each Class B common share possesses the voting rights of one-two-hundredth (1/200) of the voting rights of a Class A share. Class A and Class B common shares vote together as a single class. In January 2008, Berkshire issued 955 shares of Class A common stock to acquire certain minority shareholder interests in MidAmerican.

Note 13. Comprehensive income

     Berkshire’s comprehensive income for the first quarter of 2008 and 2007 is shown in the table below (in millions).

		First Quarter
		2008				2007
Net earnings		$	940			$	2,595
Other comprehensive income:
Net decrease in unrealized appreciation of investments			(3,998	)			(1,866	)
Applicable income taxes and minority interests			1,420				659
Other			103				47
Applicable income taxes and minority interests			26				(18	)
			(2,449	)			(1,178	)
Comprehensive income (loss)		$	(1,509	)		$	1,417

		FORM 10-Q		Q/E 3/31/08

Notes To Interim Consolidated Financial Statements (Continued)

Note 14. Equitas reinsurance agreement

     In November 2006, the Berkshire Hathaway Reinsurance Group’s lead insurance entity, National Indemnity Company (“NICO”) and Equitas, a London based entity established to reinsure and manage the 1992 and prior years’ non-life insurance and reinsurance liabilities of the Names or Underwriters at Lloyd’s of London, entered into an agreement for NICO to initially provide up to $5.7 billion and potentially provide up to an additional $1.3 billion of reinsurance to Equitas in excess of its undiscounted loss and allocated loss adjustment expense reserves as of March 31, 2006. The transaction became effective on March 30, 2007.

     NICO received substantially all of Equitas’ assets as consideration under the arrangement. The fair value of such consideration was $7.1 billion which included cash, miscellaneous receivables and a combination of fixed maturity and equity securities which were delivered in April 2007. The Consolidated Statement of Earnings in the first quarter of 2007 included premiums earned of $7.1 billion and losses incurred of $7.1 billion from this transaction.

Note 15. Pension plans

     The components of net periodic pension expense for the first quarter of 2008 and 2007 are as follows (in millions).

		First Quarter
		2008				2007
Service cost		$	47			$	50
Interest cost			112				111
Expected return on plan assets			(115	)			(109	)
Amortization of prior service costs and gains/losses			9				16
		$	53			$	68

Note 16. Accounting pronouncements to be adopted in the future

     In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations” (“SFAS 141R”). SFAS 141R changes the accounting model for business combinations from a cost allocation standard to a standard that provides, with limited exceptions, for the recognition of all identifiable assets and liabilities of the business acquired at fair value, regardless of whether the acquirer acquires 100% or a lesser controlling interest of the business. SFAS 141R defines the acquisition date of a business acquisition as the date on which control is achieved (generally the closing date of the acquisition). SFAS 141R requires the recognition of assets and liabilities arising from contractual contingencies and non-contractual contingencies meeting a “more-likely-than-not” threshold at fair value at the acquisition date. SFAS 141R also provides for the recognition of acquisition costs as expenses when incurred and for certain expanded disclosures. SFAS 141R is effective for business acquisitions with acquisition dates on or after January 1, 2009.

     In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements an amendment of ARB No. 51” (“SFAS 160”). SFAS 160 establishes accounting and reporting standards for non-controlling interests in subsidiaries and for the deconsolidation of a subsidiary and also amends certain consolidation procedures for consistency with SFAS 141R. Under SFAS 160, non-controlling interests in consolidated subsidiaries (formerly known as “minority interests”) are reported in the consolidated statement of financial position as a separate component within shareholders’ equity. Net earnings and comprehensive income attributable to the controlling and non-controlling interests are to be shown separately in the consolidated statements of earnings and comprehensive income. Any changes in ownership interests of a non-controlling interest where the parent retains a controlling interest in the subsidiary are to be reported as equity transactions. SFAS 160 is effective for fiscal years beginning on or after December 15, 2008. When adopted, SFAS 160 is to be applied prospectively at the beginning of the year, except that the presentation and disclosure requirements are to be applied retrospectively for all periods presented.

     In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities – an amendment of FASB Statement No. 133” (“SFAS 161”). SFAS 161 requires enhanced disclosures about (a) how and why derivative instruments are used, (b) how derivative instruments and related hedged items are accounted for and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows. SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008.

     Berkshire is evaluating the impact that these pronouncements will have on its consolidated financial statements but currently does not anticipate that the adoption of these pronouncements will have a material effect on its consolidated financial position.

		FORM 10-Q		Q/E 3/31/08

Notes To Interim Consolidated Financial Statements (Continued)

Note 17. Business segment data

     Berkshire’s consolidated segment data for the first quarter of 2008 and 2007 is as follows (in millions).

		Revenues
		First Quarter
		2008				2007
Operating Businesses:
Insurance group:
Premiums earned:
GEICO		$	3,032			$	2,858
General Re			1,704				1,602
Berkshire Hathaway Reinsurance Group			984				8,580
Berkshire Hathaway Primary Group			489				474
Investment income			1,099				1,087
Total insurance group			7,308				14,601
Finance and financial products			1,158				1,203
McLane Company			6,989				6,623
MidAmerican			3,394				3,273
Shaw Industries			1,224				1,285
Other businesses			6,656				5,519
			26,729				32,504
Reconciliation of segments to consolidated amount:
Investment and derivative gains/losses			(1,526	)			588
Eliminations and other			(28	)			(174	)
		$	25,175			$	32,918

		Earnings (loss) before taxes
		and minority interests
		First Quarter
		2008				2007
Operating Businesses:
Insurance group:
Underwriting:
GEICO		$	186			$	295
General Re			42				30
Berkshire Hathaway Reinsurance Group			29				553
Berkshire Hathaway Primary Group			25				49
Net investment income			1,089				1,078
Total insurance group			1,371				2,005
Finance and financial products			241				242
McLane Company			73				58
MidAmerican			516				513
Shaw Industries			51				91
Other businesses			721				632
			2,973				3,541
Reconciliation of segments to consolidated amount:
Investment and derivative gains/losses			(1,526	)			588
Interest expense, excluding interest allocated to operating businesses			(8	)			(15	)
Eliminations and other			14				(42	)
		$	1,453			$	4,072

		FORM 10-Q		Q/E 3/31/08

Notes To Interim Consolidated Financial Statements (Continued)

Note 18. Contingencies

     Berkshire and its subsidiaries are parties in a variety of legal actions arising out of the normal course of business. In particular, such legal actions affect Berkshire’s insurance and reinsurance businesses. Such litigation generally seeks to establish liability directly through insurance contracts or indirectly through reinsurance contracts issued by Berkshire subsidiaries. Plaintiffs occasionally seek punitive or exemplary damages. Berkshire does not believe that such normal and routine litigation will have a material effect on its financial condition or results of operations. Berkshire and certain of its subsidiaries are also involved in other kinds of legal actions, some of which assert or may assert claims or seek to impose fines and penalties in substantial amounts.

     a) Governmental Investigations

     Berkshire, General Re Corporation (“General Re”) and certain of Berkshire’s insurance subsidiaries, including General Reinsurance Corporation (“General Reinsurance”) and National Indemnity Company (“NICO”) have been continuing to cooperate fully with the U.S. Securities and Exchange Commission (“SEC”), the U.S. Department of Justice, the U.S. Attorney for the Eastern District of Virginia and the New York State Attorney General (“NYAG”) in their ongoing investigations of non-traditional products. General Re originally received subpoenas from the SEC and NYAG in January 2005. Berkshire, General Re, General Reinsurance and NICO have been providing information to the government relating to transactions between General Reinsurance or NICO (or their respective subsidiaries or affiliates) and other insurers in response to the January 2005 subpoenas and related requests and, in the case of General Reinsurance (or its subsidiaries or affiliates), in response to subpoenas from other U.S. Attorneys conducting investigations relating to certain of these transactions. In particular, Berkshire and General Re have been responding to requests from the government for information relating to certain transactions that may have been accounted for incorrectly by counterparties of General Reinsurance (or its subsidiaries or affiliates). The government has interviewed a number of current and former officers and employees of General Re and General Reinsurance as well as Berkshire’s Chairman and CEO, Warren E. Buffett, in connection with these investigations.

     In one case, a transaction initially effected with American International Group (“AIG”) in late 2000 (the “AIG Transaction”), AIG has corrected its prior accounting for the transaction on the grounds, as stated in AIG’s 2004 10-K, that the transaction was done to accomplish a desired accounting result and did not entail sufficient qualifying risk transfer to support reinsurance accounting. General Reinsurance has been named in related civil actions brought against AIG. As part of their ongoing investigations, governmental authorities have also inquired about the accounting by certain of Berkshire’s insurance subsidiaries for certain assumed and ceded finite reinsurance transactions.

     In June 2005, John Houldsworth, the former Chief Executive Officer of Cologne Reinsurance Company (Dublin) Limited (“CRD”), a subsidiary of General Re, and Richard Napier, a former Senior Vice President of General Re who had served as an account representative for the AIG account, each pleaded guilty to a federal criminal charge of conspiring with others to misstate certain AIG financial statements in connection with the AIG Transaction and entered into a partial settlement agreement with the SEC with respect to such matters.

     On February 25, 2008, Ronald Ferguson, General Re’s former Chief Executive Officer, Elizabeth Monrad, General Re’s former Chief Financial Officer, Christopher Garand, a former General Reinsurance Senior Vice President and Robert Graham, a former General Reinsurance Senior Vice President and Assistant General Counsel, were each convicted in a trial in the U.S. District Court for the District of Connecticut on charges of conspiracy, mail fraud, securities fraud and making false statements to the SEC in connection with the AIG Transaction. These individuals have the right to appeal their convictions. Following their convictions, each of these individuals agreed to a judgment on a forfeiture allegation which required them to be jointly and severally liable for a payment of $5 million to the U.S. government. This $5 million amount, which represented the fee received by General Reinsurance in connection with the AIG Transaction, was paid by General Reinsurance in April 2008. Each of these individuals, who had previously received a “Wells” notice in 2005 from the SEC, is also the subject of an SEC enforcement action for allegedly aiding and abetting AIG’s violations of the antifraud provisions and other provisions of the federal securities laws in connection with the AIG Transaction. The SEC case is presently stayed. Joseph Brandon, who resigned as the Chief Executive Officer of General Re effective on April 14, 2008, also received a “Wells” notice from the SEC in 2005.

     Berkshire understands that the government is evaluating the actions of General Re and its subsidiaries, as well as those of their counterparties, to determine whether General Re or its subsidiaries conspired with others to misstate counterparty financial statements or aided and abetted such misstatements by the counterparties. Berkshire believes that government authorities are continuing to evaluate possible legal actions against General Re and its subsidiaries.

		FORM 10-Q		Q/E 3/31/08

Notes To Interim Consolidated Financial Statements (Continued)

Note 18. Contingencies (Continued)

     Various state insurance departments have issued subpoenas or otherwise requested that General Reinsurance, NICO and their affiliates provide documents and information relating to non-traditional products. The Office of the Connecticut Attorney General has also issued a subpoena to General Reinsurance for information relating to non-traditional products. General Reinsurance, NICO and their affiliates have been cooperating fully with these subpoenas and requests.

     CRD is also providing information to and cooperating fully with the Irish Financial Services Regulatory Authority in its inquiries regarding the activities of CRD. The Office of the Director of Corporate Enforcement in Ireland is conducting a preliminary evaluation in relation to CRD concerning, in particular, transactions between CRD and AIG. CRD is cooperating fully with this preliminary evaluation.

     Berkshire cannot at this time predict the outcome of these matters and is unable to estimate a range of possible loss and cannot predict whether or not the outcomes will have a material adverse effect on Berkshire’s business or results of operations for at least the quarterly period when these matters are completed or otherwise resolved.

     b) Civil Litigation

     Reference is made to Note 19 to the Annual Report on Form 10-K for the year ended December 31, 2007 for detailed discussion of such actions. There have been no material developments related to such actions since December 31, 2007.

		FORM 10-Q		Q/E 3/31/08

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

     Net earnings for the first quarter of 2008 and 2007 are disaggregated in the table that follows. Amounts are after deducting income taxes and minority interests. Amounts are in millions.

		First Quarter
		2008				2007
Insurance — underwriting		$	181			$	601
Insurance — investment income			802				748
Utilities and energy			316				293
Manufacturing, service and retailing			487				446
Finance and financial products			147				155
Other			(2	)			(30	)
Investment and derivative gains/losses			(991	)			382
Net earnings		$	940			$	2,595

     Berkshire’s operating businesses are managed on an unusually decentralized basis. There are essentially no centralized or integrated business functions (such as sales, marketing, purchasing, legal or human resources) and there is minimal involvement by Berkshire’s corporate headquarters in the day-to-day business activities of the operating businesses. Berkshire’s corporate office management participates in and is ultimately responsible for significant capital allocation decisions, investment activities and the selection of the Chief Executive to head each of the operating businesses. The business segment data (Note 17 to the Interim Consolidated Financial Statements) should be read in conjunction with this discussion.

     Insurance — Underwriting

     A summary follows of underwriting results from Berkshire’s insurance businesses for the first quarter of 2008 and 2007. Amounts are in millions.

		First Quarter
		2008				2007
Underwriting gain attributable to:
GEICO		$	186			$	295
General Re			42				30
Berkshire Hathaway Reinsurance Group			29				553
Berkshire Hathaway Primary Group			25				49
Pre-tax underwriting gain			282				927
Income taxes and minority interests			101				326
Net underwriting gain		$	181			$	601

     Berkshire engages in both primary insurance and reinsurance of property and casualty risks. Through General Re, Berkshire also reinsures life and health risks. In primary insurance activities, Berkshire subsidiaries assume defined portions of the risks of loss from persons or organizations that are directly subject to the risks. In reinsurance activities, Berkshire subsidiaries assume defined portions of similar or dissimilar risks that other insurers or reinsurers have subjected themselves to in their own insuring activities. Berkshire’s principal insurance and reinsurance businesses are: (1) GEICO, (2) General Re, (3) Berkshire Hathaway Reinsurance Group and (4) Berkshire Hathaway Primary Group.

     Berkshire’s management views insurance businesses as possessing two distinct operations — underwriting and investing. Underwriting decisions are the responsibility of the unit managers; investing decisions are the responsibility of Berkshire’s Chairman and CEO, Warren E. Buffett, except for selected portfolios which are the responsibility of investment managers at GEICO and General Re. Accordingly, Berkshire evaluates performance of underwriting operations without any allocation of investment income.

     A significant marketing strategy followed by all these businesses is the maintenance of extraordinary capital strength. Combined statutory surplus of Berkshire’s insurance businesses totaled approximately $62 billion at December 31, 2007. This superior capital strength creates opportunities, especially with respect to reinsurance activities, to negotiate and enter into insurance and reinsurance contracts specially designed to meet the unique needs of insurance and reinsurance buyers.

     Periodic underwriting results are affected significantly by changes in estimates for unpaid losses and loss adjustment expenses, including amounts established for occurrences in prior years. In addition, the timing and amount of catastrophe losses produce significant volatility in periodic underwriting results. Hurricanes and tropical storms affecting the United States and Caribbean tend to occur between June and December. Except for retroactive reinsurance business, underwriting operations are managed with the objective of earning net underwriting gains over the long term.

		FORM 10-Q		Q/E 3/31/08

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

     Insurance — Underwriting (Continued)

     Berkshire believes that underwriting gains in 2008 will be lower and perhaps significantly lower than in 2007. Price competition has steadily increased over the past two years in most property and casualty markets, which management believes will lead to lower underwriting margins. In addition, Berkshire’s property and casualty reinsurance operations have benefited during the past two years from relatively low levels of catastrophe losses, which investors should not assume will recur in 2008. Additional information regarding Berkshire’s insurance and reinsurance operations follows.

     GEICO

     GEICO primarily provides private passenger automobile coverages to insureds in 49 states and the District of Columbia. GEICO policies are marketed mainly by direct response methods in which customers apply for coverage directly to the company via the Internet, over the telephone or through the mail. This is a significant element in GEICO’s strategy to be a low cost insurer. In addition, GEICO strives to provide excellent service to customers, with the goal of establishing long-term customer relationships.

     GEICO’s underwriting results for the first quarter of 2008 and 2007 are summarized in the table below. Dollar amounts are in millions.

		First Quarter
		2008								2007
		Amount				%				Amount				%
Premiums earned		$	3,032				100.0			$	2,858				100.0
Losses and loss adjustment expenses			2,285				75.4				2,043				71.5
Underwriting expenses			561				18.5				520				18.2
Total losses and expenses			2,846				93.9				2,563				89.7
Pre-tax underwriting gain		$	186							$	295

     Premiums earned in the first quarter of 2008 were $3,032 million, an increase of $174 million (6.1%) over the first quarter of 2007. The growth in premiums earned for voluntary auto was 5.9%, reflecting an 8.2% increase in policies-in-force, partially offset by a decline in average premiums per policy over the past year. Average premiums per policy have stabilized somewhat during the first quarter of 2008. Policies-in-force over the last twelve months increased 7.3% in the preferred risk auto markets and 10.9% in the standard and nonstandard auto markets. Voluntary auto new business sales in the first quarter of 2008 were relatively unchanged compared to 2007. Voluntary auto policies-in-force at March 31, 2008 were 235,000 greater than at December 31, 2007.

     Losses and loss adjustment expenses incurred in the first quarter of 2008 were $2,285 million, an increase of $242 million (11.8%) over the first quarter of 2007. The loss ratio was 75.4% in the first quarter of 2008 compared to 71.5% in 2007. The higher loss ratio in 2008 reflected an overall increase in average claim severities and the effect of lower average premiums per policy, partially offset by overall declines in claim frequencies. Average injury severities in 2008 increased in the five to eight percent range while average physical damage severities increased in the three to five percent range over 2007. Claims frequencies in 2008 for physical damage coverages decreased in the four to eight percent range from 2007 while frequencies for injury coverages decreased in the four to seven percent range. Incurred losses from catastrophe events for the first quarter of 2008 and 2007 were not significant. Management anticipates that loss ratios over the remainder of 2008 will be generally higher than in 2007, resulting in comparatively lower underwriting gains. Underwriting expenses in the first quarter of 2008 increased 7.9% over 2007 to $561 million due primarily to higher advertising costs.

     General Re

     General Re conducts a reinsurance business offering property and casualty and life and health coverages to clients worldwide. Property and casualty reinsurance is written in North America on a direct basis through General Reinsurance Corporation and internationally through 95% owned Cologne Re (based in Germany) and other wholly-owned affiliates. Property and casualty reinsurance is also written through brokers by Faraday in London. Life and health reinsurance is written worldwide through Cologne Re. General Re strives to generate underwriting gains in essentially all of its product lines. Underwriting performance is not evaluated based upon market share and underwriters are instructed to reject inadequately priced risks. General Re’s underwriting results for the first quarter of 2008 and 2007 are summarized in the table below. Amounts are in millions.

		First Quarter
		Premiums earned								Pre-tax underwriting gain (loss)
		2008				2007				2008				2007
Property/casualty		$	1,038			$	994			$	15			$	(5	)
Life/health			666				608				27				35
		$	1,704			$	1,602			$	42			$	30

		FORM 10-Q		Q/E 3/31/08

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

     General Re (Continued)

Property/casualty

     Property/casualty premiums earned in the first quarter 2008 were $1,038 million, an increase of $44 million (4.4%) over the first quarter of 2007. Premiums earned in the first quarter of 2008 included $205 million with respect to a reinsurance to close transaction which increased General Re’s economic interest in the runoff of Lloyd’s Syndicate 435’s 2000 year of account from 39% to 100%. A similar reinsurance to close transaction in the first quarter of 2007 generated earned premiums of $114 million and increased General Re’s economic interest in the runoff of Lloyd’s Syndicate 435’s 2001 year of account from 60% to 100%. In each transaction, General Re assumed a corresponding amount of net loss reserves and as a result the transactions essentially had no impact on underwriting gains or losses. General Re now possesses 100% of the economic interest in the years of account 2000 through 2008 of Lloyd’s Syndicate 435.

     Excluding the increase in premiums earned from the reinsurance to close transactions and the effects of foreign currency exchange rate changes, premiums earned in 2008 decreased by $91 million (10.3%). The decline in premium volume reflects continued underwriting discipline by rejecting transactions where pricing is deemed inadequate with respect to risk. Price competition continues to put downward pressure on rates in most reinsurance markets. Absent any major new business or significant transactions, General Re’s premium volume will likely decline further over the remainder of 2008 when compared with 2007, as non-renewals and policy cancellations are expected to exceed new business.

     The property/casualty business produced an underwriting gain of $15 million in the first quarter of 2008 compared with an underwriting loss of $5 million in the first quarter of 2007. The results for 2008 were comprised of $46 million in property gains and $31 million in casualty and workers’ compensation losses. Property results for the first quarter of 2008 included a $32 million loss from winter storm Emma in Germany. The casualty losses included $30 million in workers’ compensation reserve discount accretion and deferred charge amortization. The results for 2007 were comprised of $29 million in property gains and $34 million in casualty and workers’ compensation losses. Property results for the first quarter of 2007 included a loss of $110 million from windstorm Kyrill. Casualty losses in 2007 included $31 million in workers’ compensation reserve discount accretion and deferred charge amortization.

Life/health

     Premiums earned in the first quarter of 2008 were $666 million, an increase of $58 million (9.5%) over 2007. After adjusting for changes in foreign currency exchange rates, premiums earned in 2008 increased by $10 million (1.7%) over 2007 which was primarily due to an increase in life and health medical supplement business in North America. Life/health operations produced underwriting gains of $27 million and $35 million in the first quarter of 2008 and 2007, respectively. In 2008, underwriting results included gains of $50 million from international business (primarily life) and losses of $23 million from U.S. business (primarily health). In 2008 and 2007, the underwriting gains were generally the result of favorable mortality in the life business, partially offset by losses in the U.S. long-term-care business that is in run-off.

     Berkshire Hathaway Reinsurance Group

     The Berkshire Hathaway Reinsurance Group (“BHRG”) underwrites excess-of-loss reinsurance and quota-share coverages for insurers and reinsurers worldwide. BHRG’s business includes catastrophe excess-of-loss reinsurance and excess direct and facultative reinsurance for large or otherwise unusual discrete property risks referred to as individual risk. Retroactive reinsurance policies provide indemnification of losses and loss adjustment expenses with respect to past loss events. Other multi-line refers to other business written on both a quota-share and excess basis, participations in and contracts with Lloyd’s syndicates, as well as property, aviation and workers’ compensation programs. BHRG’s underwriting results for the first quarter of 2008 and 2007 are summarized in the table below. Amounts are in millions.

		First Quarter
		Premiums earned								Pre-tax underwriting gain (loss)
		2008				2007				2008				2007
Catastrophe and individual risk		$	217			$	474			$	174			$	474
Retroactive reinsurance			—				7,389				(121	)			(78	)
Other multi-line			767				717				(24	)			157
		$	984			$	8,580			$	29			$	553

     In December 2007, BHRG established a mono-line financial insurance company, Berkshire Hathaway Assurance Corporation (“BHAC”). BHAC commenced operations during the first quarter of 2008 and is now licensed in 49 states. As of March 31, 2008, BHAC had approximately $1 billion in capital and it has now received the highest rating available from two rating agencies. During the first quarter of 2008, BHRG began pursuing opportunities to write financial guaranty insurance on municipal bonds and entered into agreements that generated approximately $400 million in consideration. In its first quarter of operations, BHAC had approximately $100 million of written premium of which a minimal amount was earned. The impact of this new business on underwriting results was nominal. In addition, BHRG received approximately $300 million for transactions which were structured as credit default derivative contracts and which provide the

		FORM 10-Q		Q/E 3/31/08

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

     Berkshire Hathaway Reinsurance Group (Continued)

counterparties with credit protection on municipal bond debt. This new business was written entirely on municipal bonds trading in the secondary market. Berkshire believes that the consideration it received for transactions incepting in the first quarter was greater than any of its competitors in this line of business. BHAC is currently in negotiations to issue financial guaranty insurance policies for primary municipal bond issues.

     Premiums earned in the first quarter of 2008 from catastrophe and individual risk contracts declined $257 million (54%) versus the first quarter of 2007. The level of business written in a given period will vary significantly due to changes in market conditions and management’s assessment of the adequacy of premium rates. Throughout 2007 and the first quarter of 2008, catastrophe and individual risk business written declined relative to the prior year as increased price competition resulted in fewer opportunities to write business at prices acceptable to BHRG. As a result, premiums written in the first quarter of 2008 declined about 50% versus 2007. To further illustrate this trend, premiums written in 2008 were about 70% lower than in the first quarter of 2006. Premiums earned over the remainder of 2008 are expected to continue to be lower than in 2007. Pre-tax underwriting gains in the first quarter of 2008 and 2007 reflected no significant catastrophe losses. Underwriting gains over the remainder of 2008 will likely be significantly lower compared to 2007 as a result of the anticipated declines in premium volume in 2008 and the absence of major catastrophe losses in 2007.

     Premiums from retroactive reinsurance in the first quarter of 2007 include approximately $7.1 billion from the Equitas reinsurance agreement which became effective on March 30, 2007 (See Note 14 to the accompanying Interim Consolidated Financial Statements). Retroactive policies generally provide very large, but limited, indemnification of unpaid losses and loss adjustment expenses with respect to past loss events that are generally expected to be paid over long periods of time. The underwriting losses from retroactive policies primarily represent the periodic amortization of deferred charges established at the inception of the contracts. Most of the increase in underwriting losses in the first quarter of 2008 versus 2007 was due to deferred charge amortization related to the Equitas agreement. At March 31, 2008, unamortized deferred charges for all of BHRG’s retroactive contracts were approximately $3.6 billion and gross unpaid losses were approximately $17.0 billion.

     Premiums earned in the first quarter of 2008 from other multi-line business were $767 million, an increase of $50 million over the first quarter of 2007. Premiums earned in the first quarter of 2008 included $139 million from a new quota-share contract with Swiss Reinsurance Company and its property/casualty affiliates (“Swiss Re”), which became effective January 1, 2008. Under the agreement, BHRG assumes a 20% quota-share of the premiums and related losses and expenses on all property/casualty risks of Swiss Re incepting over the five year period ending December 31, 2012. Based on recent annual premium volume, BHRG’s annual written premium under this agreement would be in the $3 billion range; however, actual premiums assumed over the five year period could vary significantly depending on Swiss Re’s response to market conditions and opportunities that arise over the contract term. Otherwise, multi-line premiums earned in the first quarter of 2008 declined 12% versus 2007 primarily due to lower volume from workers’ compensation programs. Multi-line business produced a pre-tax underwriting loss of $24 million in the first quarter of 2008 compared to a gain of $157 million in 2007. Underwriting results in 2008 reflected a significant decline in underwriting gains from workers’ compensation business and increased casualty losses versus 2007.

     Berkshire Hathaway Primary Group

     Premiums earned in the first quarter by Berkshire’s various primary insurers totaled $489 million in 2008 and $474 million in 2007. For the first quarter, Berkshire’s primary insurers produced underwriting gains of $25 million in 2008 and $49 million in 2007. Excluding the impact of BoatU.S. (acquired in August 2007), premiums earned were relatively unchanged from 2007. Net underwriting gains in the first quarter of 2008 were lower for most of the significant primary insurance operations.

     Insurance — Investment Income

     A summary of net investment income of Berkshire’s insurance operations for the first quarter of 2008 and 2007 follows. Amounts are in millions.

		First Quarter
		2008				2007
Investment income before taxes and minority interests		$	1,089			$	1,078
Income taxes and minority interests			287				330
Investment income after taxes and minority interests		$	802			$	748

     Investment income consists of interest and dividends earned on cash equivalents and fixed maturity and equity investments of Berkshire’s insurance businesses. Pre-tax investment income earned in the first quarter of 2008 exceeded amounts earned in 2007 by $11 million. The increase in investment income in 2008 primarily reflected increased invested

		FORM 10-Q		Q/E 3/31/08

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

     Insurance — Investment Income (Continued)

balances and increased dividend income from equity investments offset by lower amounts of interest earned. Over the last half of 2007 and first quarter of 2008, short-term interest rates declined, which is expected to negatively impact the relative amounts of investment income earned over the remainder of 2008 versus 2007.

     A summary of cash and investments held in Berkshire’s insurance businesses follows. Amounts are in millions.

		March 31,				Dec. 31,				March 31,
		2008				2007				2007
Cash and cash equivalents		$	26,086			$	28,257			$	35,918
Equity securities			72,283				74,681				64,716
Fixed maturity securities			31,098				27,922				21,587
		$	129,467			$	130,860			$	122,221

     Fixed maturity securities as of March 31, 2008 were as follows. Amounts are in millions.

		Amortized				Unrealized
		Cost				Gains/Losses				Fair Value
U.S. Treasury, government corporations and agencies		$	5,932			$	101			$	6,033
States, municipalities and political subdivisions			2,073				80				2,153
Foreign governments			10,269				145				10,414
Corporate bonds and redeemable preferred stocks, investment grade			4,209				80				4,289
Corporate bonds and redeemable preferred stocks, non-investment grade			3,683				1,020				4,703
Mortgage-backed securities			3,459				47				3,506
		$	29,625			$	1,473			$	31,098

     All U.S. government obligations are rated AAA by the major rating agencies and approximately 95% of all state, municipal and political subdivisions, foreign government obligations and mortgage-backed securities were rated AA or higher. Non-investment grade securities represent securities that are rated below BBB- or Baa3. Fair value reflects quoted market prices where available or, if not available, prices obtained from independent pricing services.

     Invested assets derive from shareholder capital and reinvested earnings as well as net liabilities assumed under insurance contracts or “float.” The major components of float are unpaid losses, unearned premiums and other liabilities to policyholders less premiums and reinsurance receivables, deferred charges assumed under retroactive reinsurance contracts and deferred policy acquisition costs. Float of approximately $59 billion at March 31, 2008 was relatively unchanged from December 31, 2007. The cost of float, as represented by the ratio of pre-tax underwriting gain or loss to average float, was negative in 2008 and 2007, as Berkshire’s insurance businesses generated underwriting gains in each period.

     Utilities and Energy (“MidAmerican”)

     Revenues and earnings from MidAmerican for the first quarter of 2008 and 2007 are summarized below. Amounts are in millions.

		First Quarter
		Revenues								Earnings
		2008				2007				2008				2007
MidAmerican Energy Company		$	1,378			$	1,251			$	134			$	123
PacifiCorp.			1,107				1,038				168				163
Natural gas pipelines			344				323				192				182
U.K. utilities			289				256				120				80
Real estate brokerage			245				338				(19	)			(2	)
Other			31				67				4				38
		$	3,394			$	3,273
Earnings before corporate interest and income taxes											599				584
Interest, other than to Berkshire											(83	)			(71	)
Interest on Berkshire junior debt											(23	)			(29	)
Income taxes and minority interests											(151	)			(171	)
Net earnings										$	342			$	313
Earnings applicable to Berkshire *										$	316			$	293
Debt owed to others at March 31										$	19,640			$	17,581
Debt owed to Berkshire at March 31										$	821			$	1,055