In 2017, Warren Buffett warned that changes to accounting rules would make Berkshire Hathaway's (NYSE:BRK-A) (NYSE:BRK-B) earnings reports messier from quarter to quarter. Its fourth-quarter results showed just what he meant.

In the fourth quarter, Berkshire Hathaway reported a net loss of $25.4 billion, primarily due to mark-to-market changes in the value of its investment portfolio as stocks dropped to end the year. But looking at Berkshire's results through Buffett's preferred metric -- operating earnings -- its fortunes improved in the fourth quarter of the year, as the company reported operating earnings of $5.72 billion, a 71% increase over the prior-year period.

Here's a breakdown of Berkshire's earnings report, unit by unit.

Insurance hauled in $936 million

Berkshire's insurance companies had a so-so fourth quarter. Combined, the insurers generated a modest underwriting loss of $225 million, which was papered over by $1.16 billion in investment income earned on their portfolios.

Warren Buffett at Berkshire's AGM.

Warren Buffett at Berkshire's AGM. Image source: The Motley Fool.

Perhaps the most noteworthy item was that its insurers escaped 2018 with an underwriting profit for the full year, recovering from an underwriting loss the year before. Operating earnings from underwriting were $1.57 billion in 2018, up from a $2.22 billion loss in 2017, when three major hurricanes alone cost the company approximately $3 billion before taxes.

GEICO continues to grow at a breakneck pace, with premiums earned growing 13.3% in 2018 compared to 2017. As premiums grow in excess of its operating expenses, GEICO is becoming even more efficient. In 2018, it spent 13.9% of premiums on operating expenses, down from 14.5% in 2017 and 15.6% in 2016.

Together, its insurance companies generated about $122.7 billion of float -- money that Berkshire can invest for its own benefit.

Railroad, utilities, and energy earned $1.74 billion

Berkshire's most capital-intensive companies saw operating earnings increase 43% in the fourth quarter, driven primarily by a lower tax rate on corporate profits. For the full year, BNSF Railway reported an 8.5% increase in pre-tax profit, with after-tax profits increasing 31.8%. The energy unit reported a 1.1% decline in pre-tax profit, though net income increased 24.4% in 2018 compared to 2017.

These two businesses will continue to soak up excess cash at Berkshire. The holding company anticipates that it will invest $10.5 billion in capital projects in the two businesses in 2019, an increase from the $9.4 billion it spent in 2018.

Berkshire's other operating businesses earned $2.34 billion

A hodgepodge of businesses ranging from high-quality manufacturers to Dairy Queen round out the list of Berkshire's portfolio of wholly owned businesses. In all, these businesses were stars in the fourth quarter, with operating earnings growing 28% year over year in the fourth quarter.

The conglomerate's industrial products companies, which include the likes of Precision Castparts, Lubrizol, Marmon Group, and IMC, together had a fantastic 2018, with revenue increasing 7.4% for the full year and pre-tax profit growing 14.9% to $5.8 billion. In its annual report, Berkshire noted that Precision Castparts' revenue increased 7.2% year over year thanks to increased demand for its aerospace products.

Berkshire is still flush with cash

Berkshire ended 2018 with approximately $112 billion in cash and cash equivalents, down slightly from $116 billion at the end of 2017. The company put money to work buying publicly traded securities, investing in its operating companies, and making small acquisitions.

In the fourth quarter, Berkshire also repurchased a small amount of stock, buying back about $418 million of stock at a price of roughly $200.95 per class B share. It paid as much as $207.18 per Class B share in October and as little as $197.30 per class B share in December.

With shares trading at $201.51 at market open on Monday, Berkshire shares are trading in a range at which Buffett may view repurchases as an attractive use of his company's cash.

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