Berkshire Hathaway Inc. (BRK-B) Cash Flow Statement

The gap between premiums collected and claims paid has remained stable, with claims payments ranging from $68.5B to $78.0B over the last ten quarters, while operating cash flow has hovered between $1.8B and $13.8B. This suggests that the insurance operations are generating a reliable source of investable float, which is a core driver of the company's investment strategy. The consistency of this spread, despite quarterly volatility in net income, underscores the underlying stability of the underwriting cash engine.

The quarterly data shows significant gross activity in the investment portfolio, with purchases ranging from $95.0B to $205.6B and sales from $107.5B to $220.0B. This churn suggests that management is actively reallocating capital within the equity and fixed-income portfolios, likely in response to market conditions and valuation opportunities. The net selling in several quarters, particularly 2026Q1 and 2025Q2, may indicate a cautious stance or a shift toward cash accumulation, which aligns with the reported cash balance of $51.8B, though this figure is notably lower than recent 10-Q levels, warranting further reconciliation.

Despite concerns about prolonged inflation and its potential impact on loss costs, the actual cash paid for claims has not shown a significant upward trend, with quarterly figures ranging from $68.5B to $78.0B. This stability may indicate that reserve releases are offsetting current-year loss development, or that the company's underwriting discipline is containing loss ratios. However, investors should monitor whether this stability persists if inflation persists, as long-tail liabilities could emerge with a lag, potentially pressuring future cash flows.

The company has not paid dividends, consistent with its historical policy, but has engaged in sporadic buybacks, with notable activity in 2026Q2 ($4.2B) and 2024Q1 ($2.6B), while other quarters saw no repurchases. This pattern suggests that management is deploying capital only when it perceives the stock as undervalued, rather than committing to a regular return program. The buybacks are well-covered by operating cash flow, which averaged $10.1B per quarter, indicating that capital return is not straining liquidity.

Net income is heavily influenced by unrealized gains and losses on equity investments, causing significant quarterly swings, while operating cash flow remains relatively stable. For instance, in 2025Q3, net income was $30.8B but OCF was only $13.8B, reflecting non-cash gains, whereas in 2025Q1, net income was $4.6B but OCF was $10.9B, indicating strong cash generation despite weak reported earnings. This divergence underscores the importance of focusing on operating earnings and cash flow rather than GAAP net income when assessing the company's fundamental performance.