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Berkshire Reports $29 Bln Gain From Tax Cuts; Profit Jumps

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In his annual letter to Berkshire Hathaway Inc.'s (BRKa) shareholders on Saturday, the company's chief executive officer and billionaire investor, Warren Buffett, announced that the company's profit for the year 2017 surged, boosted by $29.1 billion gain related to tax cuts. For 2017, net earnings attributable to Berkshire shareholders surged to $44.94 billion from $24.07 billion in the previous year.

Net earnings attributable to shareholders for the fourth quarter surged to $32.55 billion from $6.29 billion in the last year period, while earnings per Class A equivalent share attributable to shareholders jumped to $19,790 from $3,823 in the year-ago quarter.

But, operating earnings for the quarter declined to $3.338 billion from $4.382 billion in the previous year period. Operating earnings for 2017 declined to $14.46 billion from $17.58 billion in 2016. Operating earnings for 2017 are net of pre-tax underwriting losses of approximately $3.0 billion attributable to three major hurricanes in the U.S. and Puerto Rico and wildfires in California.

Berkshire's gain in net worth during 2017 was $65.3 billion, of which $36 billion came from Berkshire's operations with remaining $29 billion coming from the tax overhaul.

Buffett said, "The $65 billion gain is nonetheless real - rest assured of that. But only $36 billion came from Berkshire's operations. The remaining $29 billion was delivered to us in December when Congress rewrote the U.S. Tax Code."

At year-end 2017, Berkshire held $116.0 billion in cash and U.S. Treasury Bills, up from $86.4 billion at year-end 2016.

In his widely read shareholders' letter, Buffett said, "Berkshire will have
opportunities to make very large purchases. In the meantime, we will stick with our simple guideline: The less the prudence with which others conduct their affairs, the greater the prudence with which we must conduct our own,"

The company's Annual Meeting will be held on May 5th, 2018.

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