Berkshire Hathaway 1999 Annual Report Download - page 55

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Management's Discussion (Continued)
Year 2000 Issue
Prior to January 1, 2000, there was widespread concern that many computer systems in use would be unable
to correctly process data or may not operate at all after December 31, 1999. It was feared that some computer programs
may interpret the year “2000" incorrectly, causing errors in calculations or causing the system to fail. Year 2000 issues
affect: (1) Information Technology (IT) utilized in Berkshire’s widely diversified business information systems, (2) non-
IT systems, such as communications, facilities management, and manufacturing and service equipment containing
embedded computer chips, and (3) IT and non-IT systems of significant customers, suppliers, business partners and
equity investees.
To date, Berkshire has not experienced any significant Year 2000 related failures or disruptions with respect
to its IT and non-IT systems. In addition, Berkshire has not experienced any significant adverse consequences due to
Year 2000 related problems suffered by its significant business partners, including equity investees.
Berkshire and its subsidiaries could still be adversely affected if Year 2000 issues are not resolved by Berkshire
or its significant customers, suppliers, business partners or equity investees. However, the most likely adverse
consequence at this date could ultimately relate to losses incurred under property and casualty insurance and reinsurance
contracts issued by subsidiaries. Otherwise, Berkshire management believes that the potential for adverse consequences
arising out of the ordinary day-to-day operations of its businesses has diminished greatly since December 31, 1999. The
financial impact of any adverse consequences cannot currently be estimated.
Berkshire and its subsidiaries have incurred about $60 million in identification, remediation and testing of Year
2000 issues. Year 2000 related costs are expensed as incurred. Berkshire management does not believe that any
significant IT projects were delayed due to Year 2000 efforts.
Forward-Looking Statements
Investors are cautioned that certain statements contained in this document, as well as some statements by the
Company in periodic press releases and some oral statements of Company officials during presentations about the
Company, are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995
(the "Act"). Forward-looking statements include statements which are predictive in nature, which depend upon or refer
to future events or conditions, which include words such as "expects", "anticipates", "intends", "plans", "believes",
"estimates", or similar expressions. In addition, any statements concerning future financial performance (including
future revenues, earnings or growth rates), ongoing business strategies or prospects, and possible future Company
actions, which may be provided by management are also forward-looking statements as defined by the Act. Forward-
looking statements are based on current expectations and projections about future events and are subject to risks,
uncertainties, and assumptions about the Company, economic and market factors and the industries in which the
Company does business, among other things. These statements are not guaranties of future performance and the
Company has no specific intention to update these statements.
Actual events and results may differ materially from those expressed or forecasted in forward-looking
statements due to a number of factors. The principal important risk factors that could cause the Company's actual
performance and future events and actions to differ materially from such forward-looking statements, include, but are
not limited to, changes in market prices of Berkshire's significant equity investees, the occurrence of one or more
catastrophic events, such as an earthquake or hurricane that causes losses insured by Berkshire's insurance subsidiaries,
changes in insurance laws or regulations, changes in Federal income tax laws, and changes in general economic and
market factors that affect the prices of securities or the industries in which Berkshire and its affiliates do business,
especially those affecting the property and casualty insurance industry.