Berkshire’s 2026 annual shareholder meeting: Watch the full morning session

Good morning and welcome to Omaha.

I want to welcome all our owners, our our long-term owners, those that have recently become a shareholder. Again,

thank you for joining us in Omaha for this for for the uh for the meeting.

Obviously, very excited by this. And I

want to also touch on we have many people here just experiencing it. So,

uh, just great to be together. The first

thing I just want to touch on, we had the video, incredible 60 years. The one

thing I did note that we've traditionally had was we've often had a movie which included the credits that came with it. and the mo the video and

the we'll have a few other videos that I'll touch on later, but we did have a uh an exceptional producer and executive producer and I want to thank her because

she it wasn't acknowledged, Susie Buffett. Thank you.

Buffett. Thank you.

And then the director who's always done the movies again did this video and we'll do our company videos. that I'll

touch on shortly. Uh Brad Underwood.

Thank you, Brad.

Now, we have a great day planned and it's really all around our owners. It's

our culture, but most importantly, this is our owners day, our owners weekend.

Uh we have an exceptional group of owners, and we're just passionate to be here. will communicate a variety of

here. will communicate a variety of things around Berkshire and and our and our insurance, our operating subsidiaries and and the in Bergkshire as a whole, but what we really treasure

is the engagement with our again our owners, our shareholders and the and the questions that come. So, thank you.

Really appreciate it.

Now to touch on this morning, we have three sessions that we'll we'll we'll cover over the morning early afternoon.

The first session, there'll be some pleasantries here and then we'll move into a business update. Uh that'll be the first session. As we move into the

second session, I'll have a Jane join us here on stage. We'll obviously take any questions. So, it'll be a question and

questions. So, it'll be a question and answer period. We'll do the traditional

answer period. We'll do the traditional uh rotating between our shareholders and Becky. Becky, thank you for being here.

Becky. Becky, thank you for being here.

Um and we'll do the traditional Q&A and then that session will wrap and then we'll move to a third session that will

have Katie Farmer. Katie is a been the uh CEO of BNSFR railway for for the past

five years. And then we'll also be

five years. And then we'll also be joined by Adam Johnson who is a uh 10ear CEO 10year CEO of uh NetJets but also

took on an incremental role recently and uh we announced that in December. Adam

took on the consumer products group, services and retailing group. So we'll

have them join us for the third session.

Again, the traditional question and answer period.

The only thing that I would I would say this is also a little bit incremental or uh different from past uh meetings.

Throughout this morning, we'll have three different videos uh associated with operating companies.

The first one will be from Geico, Nancy Pierce, who's the CEO of of GEICO, long-term

uh veteran and wealth of experience with Geico. She's over in the manager

Geico. She's over in the manager section. She'll she'll narrate a video

section. She'll she'll narrate a video on Geico. And then we'll also have a

on Geico. And then we'll also have a video on netjets narrated by Adam and a video narrated

by Katie on BNSF the railway. So that'll

that'll be incremental. Now the

fundamental purpose of both having the ma some incremental managers join us on the stage and the videos. We have an exceptional team at Bergkshire. The

depth of management is very deep.

Obviously, we have a number of subsidiaries, but the depth of our team is great. And this is an opportunity

is great. And this is an opportunity through the videos or having incremental leaders on stage. It's an incre it's an opportunity for you as our owners to

both learn more about those businesses, but also about the leaders that lead them. And that will be a format that as

them. And that will be a format that as we go forward, we'll build on. I.e. we

can introduce you to other leaders either on stage or through the through the videos.

So let's move to the formalities. Now

I'm going to introduce our our directors. I'm going to do it

directors. I'm going to do it alphabetically. So if they could just uh

alphabetically. So if they could just uh acknowledge with a wave or however they would like to acknowledge our our shareholders, our owners.

Start with Howard Buffett.

Susie Buffett, our chairman Warren Buffett.

Warren, we have a little surprise there for you.

If you look up to the right, you'll see a jersey and a number. We are we're retiring.

[applause] worn appropriately. It's number 60 for

worn appropriately. It's number 60 for 60 years as our CEO of Bergkshire.

Equally, it's being uh it's it's placed beside Charlie's jersey, number 45.

Charlie was with Bergkshire for 45 years, obviously our vice chairman and a treasured partner of Warren, and it's just reflective of a great partnership.

Thank you, Warren.

I'm happy to report both those jerseys will remain in the rafters uh for the years to come. So,

Great.

Now we'll continue with our directors.

Steve Burke, Ken Chanel, Chris Davis, our lead director and I'll just add a point here because uh this it's Sue's

20th year as a director of Berkshire.

Thank you for being our lead director and all you do. Sue Decker,

Charlotte Gim, Ajit Jane, I would just add for relative to Ajit obviously been our vice chairman for of insurance for nine years. I had many

years to be his his co-chairman. But one

thing I just want to touch on, Ajit joined Bergkshire in 1986. So not only is he a director, just been really the architect of our insurance business. So

again, thank you. Ajit

Tom Murphy Jr. Wally Whites, Mel Whitmer.

Now, I I can start to I think my eyes have adjusted a bit to the lights and everyone out there. And I I have to tell a little bit of a story here because when when Warren announced the

transition last year and I was sitting here and couldn't been more proud, but I don't mind sharing the first thing that

flashed through my mind was, geez, we've already booked this arena and I I I know the directors would be here

and I knew I would have some family here, but it's wonderful to all have you here. So, thank you.

here. So, thank you.

Thank you.

Now, back to a great tradition.

I'm going to throw the mic over to Warren. Warren,

Warren. Warren, [applause] thank you.

Yeah.

Yeah. It's this is not my show today, but there are two uh well there there there are two

anniversaries uh that uh we're kind of celebrating today. One is the fact that

celebrating today. One is the fact that the uh the uh board has had what I will

uh generously call a refreshment uh which they voted and uh uh you couldn't have made a better decision. Uh

they did it unanimously. was surprised

all the board when I announced them last year kept uh for Susie and uh and uh uh

that's been 100% successful.

Greg is doing uh everything I did and then some and he's doing it better in all cases and he's got he's he's the right person. So

that decision we score 100% on.

Thank you, Warren.

Thank you.

But there's another anniversary today that uh uh I'd like to spend just a minute telling you about because uh about 10

years ago, we made a commitment uh to essentially move 10% of the resources

of Berkshire Hathaway.

uh we turned it over to another uh person who was not that well known at the time.

And we did that uh by spending uh roughly $35 billion

uh buying uh stock in Apple Corp.

And uh and we were going to have that

uh under the management.

We're we're turning that money over to the management essentially of Apple to make Berkshire look good and uh without

any work by us, which is our preferred way of operating. And

I would like to report that 10 years later several things are happening.

One is the 35 billion uh counting dividends realized

appreciation unrealized appreciation.

But that has turned into 185 billion uh tax and uh and I didn't have to do a damn

thing. I mean, [laughter]

thing. I mean, [laughter] so it it it uh it's, you know, we're very big around here on having other people do the work and [laughter]

uh collecting the money, but that that has been uh a success and we we do look at marketable securities

as being businesses. That doesn't mean we hold all of them forever, but we still our largest holding is Apple.

And Apple has a very interesting history that some of you may be familiar with. But one one item is they're they're observing an

anniversary themselves. I think just

anniversary themselves. I think just within the last week or so.

uh they they celebrated their 50th anniversary and uh uh you know 50 years is

seems like a long time but Apple seems like a very new company and when Tim Cook went into

uh the top position at Apple

uh he's he succeeded allegedly And uh you know that that uh

uh Steve Jobs was everybody in America knew his name and not many people knew Tim's name.

and Apple had had this roller coaster experience where where uh

the two Steves had started in a garage or something 50 years earlier and and then I'm not sure how many of you know but

but Steve was thrown out for a while. He

came back in.

He did these marvelous things in terms of developing products.

Uh and then he had an untimely uh death and uh

everybody said who's going to manage Apple when Steve Jobs isn't around and uh

probably just a very few percentage points of American investors had even heard of

Tim Cook and we in effect Tim took over about 14 years ago when

when when uh Steve died but when we made our investment uh and turned over 10% of the resources

of Berkshire uh we were turning it over to Tim and

as As I say, he has turned that into 185 billion or something pre-tax, which we won't bother to compare to

our record with. Uh, and but Tim has announced that he's uh retiring as well. That's that's an

announcement that's just been made in the last couple of years. And so I think it's appropriate if if Tim would take a bow and our

shareholders would say thanks to him.

That's Tim is right by me.

How would you like to step into the shoes of Steve and and come through with his record? I mean, it it's one of the

his record? I mean, it it's one of the miracles of of American business management. And so anyway, thank you,

management. And so anyway, thank you, Tim. And I'm going to turn things back

Tim. And I'm going to turn things back to uh to Greg and we'll go meeting Tim, on behalf of our shareholders and

owners here, we echo everything Warren said and and I would add one thing.

You've truly been a global ambassador around the world for American business.

Thank you.

And Warren, thank you for taking the mic there. I am reminded I have a cherry

there. I am reminded I have a cherry coke here in your honor, peanut brittle in Charlie's honor, and that seat

remains open.

Thank you, Warren.

Now, we'll move to a little more a few more a few more formalities and get into the uh business update.

really started with the letter to our owners and and shareholders at the end of February.

And I touched on it in the letter. I

highlighted that the first thing as I as we transitioned, I wrote a letter to our 400,000 employees touching on culture and values.

And the purpose of that letter was to highlight that was not going to change. It had

never changed in Berkshire under Warren's 60 years aspects of evolved but they don't our our our culture and values did not change and that as we did the transition

that was not going to change either.

It's the bedrock of Berkshire that culture and values. Now um one of the values we've often touched on here is

integrity.

There's no better example of Warren's remarkable demonstration of that when he testified before Congress in 1991

as the chairman and CEO of Solomon Brothers. I like to call it Bergkshire's

Brothers. I like to call it Bergkshire's Anthem, but I wanted to uh make sure we we we had that opportunity to um see the

video today. Bergkshire's Bergkshire's

video today. Bergkshire's Bergkshire's Anthem.

I thank you for the opportunity to appear before this subcommittee.

I would like to start by apologizing for the acts that have brought us here. The

nation has a right to expect its rules and laws to be obeyed. And at Solomon, certain of these were broken.

[clears throat] Almost all of Solomon's 8,000 employees regret this as deeply as I do. And I

apologize on their behalf as well as mine.

My job is to deal with both the past and the future. The past actions of Solomon

the future. The past actions of Solomon are presently causing our 8,000 employees and their families to bear a stain.

Virtually all of these employees are hardworking, able, and honest.

I want to find out exactly what happened in the past so that this stain is borne by the guilty few and removed from the innocent.

To help do this, I promise to you, Mr. chairman and to the American people Solomon's wholehearted cooperation with all authorities.

These authorities have the power of subpoena, the ability to immunize witnesses, and the power to prosecute for perjury.

Our internal investigation has not had these tools. We welcome their use.

these tools. We welcome their use.

As to the future, the submission to this subcommittee details actions that I believe will make Solomon the leader within the financial services industry in controls and compliance procedures.

But in the end, a spirit about compliance is as important or more so than words about compliance. I want the right words and I want the full range of

internal controls. But I also have asked

internal controls. But I also have asked every Solomon employee to be his or her own compliance officer.

After they first obey all rules, I then want employees to ask themselves whether they are willing to have any contemplated act appear the next day on

the front page of their local paper to be read by their spouses, children, and friends with the reporting done by an informed and critical reporter.

If they follow this test, they need not fear my other message to them. Lose

money for the firm and I will be understanding. lose a shred of

understanding. lose a shred of reputation for the firm and I will be ruthless. I welcome your questions.

ruthless. I welcome your questions.

Bergkshire's anthem that's embedded in Bergkshire.

We send a a reminder to our It's a great reminder to our CEOs and employees, our 400,000 employees. and and we do uh

400,000 employees. and and we do uh [clears throat] remind them of that including I ask our CEOs each year I just sent out a letter in again in in in

the first quarter asking them as they run their business as they make those daily decisions they make apply that simple test that Warren highlighted the

news newspaper test.

Now moving to the more formal update on our numbers. We in fine tradition we

our numbers. We in fine tradition we always start with our exhibit hall sales from the uh exhibit hall yesterday and

uh the the interesting thing is uh last year was a record as you may guess but fortunately this year sales um were very

consistent with 24. We're basically at one and a half million sales, but the the point is we'd always love to get to two million and we're not there yet. So,

we've got something to work on. Um, but

but importantly, what the what the exhibit hall represents is our businesses showing their products and services, and you get to see this great

commitment of our of our leadership team and their passion for Berkshire and their passion for the owners.

I was fortunate to spend some time going through the exhibit hall yesterday and that's a wonderful experience because I get to we're we're we're getting the

opportunity to engage with all of you as owners. So, um love we we we treasure

owners. So, um love we we we treasure the exhibit hall and what a what a great experience and I'll just add it's open till 4:00 today and feel free to spend a

little money.

Now truly moving to the more formal aspects of the business update. We

issued our 10Q this morning and had the related press release. You can see the results and I'll I'll touch on those. Uh

I'll start with Bergkshire just as a whole. Obviously we have our insurance

whole. Obviously we have our insurance as as I've referenced as our heart of uh heart of Bergkshire was our foundation.

But as we move to the non-insurance businesses, we're really fortunate to have a number of businesses in there, but in their aggregate, they're fundamental

and and really central to American businesses and American industry and to the American uh consumer.

And when I combine those, it's really the unique opportunity we have to excel across those businesses. And and that will continue. It's been our focus and

will continue. It's been our focus and it'll very much continue to be our focus.

If I start by looking at these results, I'll start with the insurance, total insurance.

And I'm starting there because there's a couple really important points to make.

You can see in 2026, the first quarter, we're actually up quarter on quarter.

And yet in the letter that I sent out just in February highlighted the fact that we unlikely to see stronger results

in 2026. But there are some important

in 2026. But there are some important points here. In 2025,

points here. In 2025, we have an $860 million after tax uh charge associated with California

wildfires that we insured.

The adjustment's not so important. It's

just to highlight that the 2026 results and what we're feeling in the insurance uh industry right now, there's two

things. One, our 2026 results do not

things. One, our 2026 results do not reflect any catastro catastrophic events. It was a pretty benign period.

events. It was a pretty benign period.

There were some storms in the northeast part of the United States, but relative to 2025 and past years, very benign.

And and that highlights again that the insurance, our insurance businesses, but the the industry as a whole, the pricing, we've talked about that

hardening, i.e., can you get the proper

hardening, i.e., can you get the proper premium for risk, it's it's becoming a more challenging market. What's driving

that over when you see a benign environment and I'll touch on further results another layer but you start to see competition coming into the

industry. They bring a v a variety of

industry. They bring a v a variety of products and forms but it's really they're bringing capital into the industry. So just wanted to really

industry. So just wanted to really highlight we still see that as a softing market and I'll expand on that. Now when

we discuss insurance we all we have two core objectives at Bergkshire we want to underwrite at a profit so create a

profit for our ultimately for our shareholders but truly underwrite at a combined ration I'll come back to it because there's a lot of insurance jargon here and there's a lot of numbers so I'll come back to it and then the

second core objective is to increase our float now the insurance jargon and and the numbers on here. Go to the combined ratio on the left and go way over to the

right. The 10-year average 93%.

right. The 10-year average 93%.

I'll give you a little bit of color here. If we have a $100 premium that

here. If we have a $100 premium that comes in associated with a policy, the 93%

represents the costs incurred associated with that premium. It can be the cost of writing the premium, the commissions, or

the loss reserve we set up.

The 7% i.e. $7 on $100 is our pre is our profit, our operating profit on that premium. And then if I go back to the

premium. And then if I go back to the $93, just roughly $23 of that would be the expenses, the administration of of

running the business. And that's that's just an average. It varies across our businesses. it across it varies across

businesses. it across it varies across the uh the the industry. The other $70 and this is very important. That's

actually what goes down into float.

So when I you see our float growing, we take that $70, it goes into our float and we'll incur premiums against it over the years to come. And when the premium

shows up, we pay out against that 70.

But if you take a simple small commercial business or personal insurance that that $70 effectively gets paid out

likely over a 3 to four year period that premium sits there as float. We earn on it and Warren's referenced it many times many times. It's a valued part of of

many times. It's a valued part of of Berkshire and and and it's really the opportunity to continue to create value for for you as our owners and and

shareholders. You can see on the float

shareholders. You can see on the float we've going back to 2015. It's

effectively doubled through 2025.

There's a small increase in the current quarter but I wouldn't I I wanted you to all see it, but I it's not uh the fact it increased,

it could have decreased because it's just subject to the payment cycle we're in. The really core and important

in. The really core and important objective is that we grow it over the long run. And we'll continue to provide

long run. And we'll continue to provide those type of updates to you as our as our owners. Now, if I go back up to the

our owners. Now, if I go back up to the underwriting results and you see the combined ratio again, but we'll we'll focus on 2026.

Um, primary and reinsurance, they're both 87% 89.6%.

The amazing thing there is that there's an eight in that number. You can, again, our 10-year average is in the 93%. So

we're actually realizing more operating insurance income profit there. Again,

what's [clears throat] driving that? A

very benign environment when you think of the catastrophic environment we insure into. The last time there was a

insure into. The last time there was a hurricane that hit landfall in the US was 19 months ago. So our our quarterly

results, our results last year do not reflect those type of outcomes. Again,

that means we have more capital coming into that industry.

Yes, we like those results. But the

reality is as that business as our insurance business softens and we cannot realize the value we should for the

related risk Azit and our insurance team across the businesses, we start writing less premium. We still want to write it

less premium. We still want to write it at an underwriting profit because we'll there's still opportunities there and there's there's a number of risks we'll ensure, but we'll be much more cautious

and specifically across the the primary and reinsurance uh businesses. Now,

let's move to GEICO.

As I highlighted, we have a new CEO.

We're fortunate to have uh Nancy leading that team. Um they even have a better

that team. Um they even have a better combined ratio 87.3%.

That means associated with that business 12% plus operating income coming off of each dollar of premium we write there um

exceptional result. What's driven that

exceptional result. What's driven that is that four or five years ago we the GEICO team stepped back and said that they felt they weren't

um relative to the risk getting the proper premium the proper price for risk and over the last four years we've seen a bet we have worked hard the GEICO team

worked hard to get the proper balance across that that meant our premiums went up for our customers across certain classes of of of drivers. We they worked

hard to segment that customer. And by

the way, that happened across the the auto industry. Generally speaking, you

auto industry. Generally speaking, you saw saw an increase in in the overall premium as they they manage that underlying risk. Again, what's that mean

underlying risk. Again, what's that mean to the industry? What's that mean to GEICO? Well, one, there's a lot of folks

GEICO? Well, one, there's a lot of folks out there pursuing those customers.

Anytime you increase a customer's insurance premium and and especially over a period of time and this is I'm talking about both GEICO and our competitors. Listen, people

start evaluating and shopping and we've we've seen unprecedented shopping activity across the auto space and you see the

advertising that's out there. They're

pursuing customers and they're pursuing the Geico customers. So yes, we there there's a an important balance I want to highlight to to all of you is that and

this is what our GEICO team's working on. Yes, we have to get the price to

on. Yes, we have to get the price to risk right, but there's two other important things we really need to balance. The second piece is we really

balance. The second piece is we really do want to uh retain our customers.

There's no more valued customer than our Geico customers. Many of you as

Geico customers. Many of you as shareholders and owners of Berkshire are Geico customers. We want to retain all

Geico customers. We want to retain all of you. We want to retain every Geico

of you. We want to retain every Geico customer. So, as we found that right

customer. So, as we found that right price to risk, the next challenge is making sure we retain our customers. And

Nancy and her team have that as a clear objective and they're working hard on that. And then the third piece of that

that. And then the third piece of that balance is to grow GEICO. How do we measure growth growth in that industry?

It's policies enforced.

And if I touch on uh what we've experienced as growth in GEICO, if we go back to last quarter

2025 versus this quarter uh ending March of uh this year, our policies in force grew by 2%.

Um, now compare that to a com uh the number one competitor in our industry, Progressive. They just announced their

Progressive. They just announced their first quarter results. They grew by 11%.

And our team at Geico fully acknowledge, as I said, that balance that they have to find across those uh the the three metrics, including including growth.

It's not going to be easy to just restart the growth engine. We

acknowledge that. But they understand the objective and as we go through 26 and into 2027, two important um objectives as I said

they have they have is that okay, let's retain our customers and let's um start growing Geico. Uh again

growing Geico. Uh again the last thing I'll just touch on the insurance business and it's uh um Tokyo Marine.

I'm not going to expand a lot but other than we announced the transaction in the fourth quarter of I mean in the fourth week of March a great transaction by Ajit and his team and and it's a

strategic transaction in that and I'm highlighting that because yes there's a financial aspect of it and we're thrilled with that but it is a long-term strategic partnership and when Ajit's on

stage I'll have him I'll have him expand on that. So well done Aene. Thank you to

on that. So well done Aene. Thank you to you and your team. a great great transaction for Berkshire.

Now we'll move to our our non insurance businesses. I'll start with BNSF.

businesses. I'll start with BNSF.

As I've highlighted, a number of our non-insurance businesses provide critical product services. BNSF is a great example of that. 32,500

miles of track in the west moving core products for a number of customers that touch every industry uh in the in the

US. Um you'll see the results some some

US. Um you'll see the results some some improvement there. But what we really

improvement there. But what we really want to highlight today and and Katie will be joining me on stage and and she'll touch on this is that um we we

have a lot lot of work we know to do at BNSF. We have a great group of employees

BNSF. We have a great group of employees have been working very hard, I would say, on the ground, boots on the ground.

So, you've heard me talk in the past that we have to work hard in our yards and our and work on how we can move our

our cars quicker and and meet our our customers expectations. And we're doing

customers expectations. And we're doing a a very good job on the customer service side, but we've recognized we've got to get better operationally. Our

team's also very been very focused on uh what resources do we have? Do we have uh too many locomotives because actually too many locomotives it sounds counterintuitive but can be a problem.

You're just not as one you're not as efficient but the congestion and everything comes with. So our team's been very focused on that and then how do we best use our employees? Well,

that's something our team's working hard on, but uh and we're working hard to become more efficient and more effective. But we also have to very much

effective. But we also have to very much recognize where we are versus our industry peers.

This is the six class one railroads that operate in the US. And we're one of them. And you can see that last year we

them. And you can see that last year we were fifth out of six. And that's a reality of where we are. But we're also getting better and we are going to get

better. We recognize that this

better. We recognize that this performance is we've our our as I've said our our teams have worked hard but there's a lot of room for improvement.

Now the good news is if I look at it in 2025 and what we have here is our operating margin. So the 34 a.5% you see

operating margin. So the 34 a.5% you see for Bergkshire that's the operating profit uh that came back to to BNSF associated with its underlying

operations that operating margin improved by 2 and a.5% 250 basis points that's a very positive outcome obviously and by the way in fairness to our team

that's how the work they've been putting in that was that on a nominal basis that was the largest improvement across the uh our five peers. So, we're pleased

with that, but we know there's a lot of work to be done. If you look at our first quarter results, happy to report that, okay, we went from fifth to

fourth, but our team would be the first to say there's a lot more to be done.

And if you look at our overall operating margin there, very consistent with the result last year and the efficiency we've delivered is being maintained and

improved versus the quarter vers uh over the quarter of 2025.

So again, um we we see a lot of opportunity here to continue to get better, but

to achieve where say Union Pacific is as a leader at with an operating margin of 39.5%.

We know that's going to require a step change both as as how we're operating, but even how we approach our operations.

An important step that we've or or something we've identified. we like to identify the gaps and where we can get better is technology

and we're doing a lot at BNSF and I'll touch on our other businesses uh here when I uh go through technology but that's where we see a step change or or

potentially where our a few of our peers have gapped out versus where how we're using technology.

Uh I'm going to back up to Geico and then I'll come back to uh BNSF because it was approximately four years ago. I was in a Geico meeting with our

ago. I was in a Geico meeting with our management team there and they were discussing this price to to risk and segmenting customers and we had our

operational team from Geico. They had

the commercial team but they had the tech team there and they're often there and and you're looking for some help.

But what I heard in that discussion was a clear technology transformation that was happening at GEICO. It was obvious that the technology was going to be a

big part of the solution as Geico tackled uh their certain challenges.

And as that meeting wrapped up, I very much wanted to spend more time with the technology team uh to understand what was what was driving this and and they were calling it a technology

transformation because I could see that it was so applicable to what we were going to do, what we needed to do and what we would pursue across our non-

insurance businesses. So So what is this

insurance businesses. So So what is this technology transformation that they described at GEICO?

Uh I'll I'll I'll summarize it in a few different ways, but first and foremost, we recognized we were going to become a builder of technology

rather than just a buyer of technology.

And that meant that instead of we had a number of systems and we often bought the related applications or software that came with it. And yes, it's it's a

valued uh application, but it was disconnected from all our systems. Obviously, we didn't have that ability to then use the information, get to the data. And what they started to talk

data. And what they started to talk about is simplifying the infrastructure, making sure we would build what we needed ourselves and deliver solutions

back to our customers, and we would have clear access to the data. all things

that make a lot of sense, but a massive challenge and it doesn't happen overnight. And we're still on that

overnight. And we're still on that journey at at GEICO in year five.

There's no question, but quickly recognized that this could be used across our other businesses. Very

fortunate that at GEICO they had put their leadership team in place to drive forward this transformation. and the

most senior leader uh then uh came from GEICO joined our non-insurance operations took on a senior leadership role the leadership role helping us with

the technology transformation at uh BA Berkshire Hathaway Energy and then also as a senior technology officer at BNSF.

So we started down that journey and one of the first things you have to do is say okay we need a different resource base. So now we're hiring

resource base. So now we're hiring engineers we hire developers in our technology group that help us start to build the solutions we need for these

businesses and and it's going beyond GEICO now. Um, and we still have our our

GEICO now. Um, and we still have our our valued employees there and and and they may be retraining or transitioning to other roles, but the reality is we need less people managing

uh the applications and the software and more people building outcomes that our our businesses need. Now, when I asked

our team, well, how does AI fig fit fit into this art artificial intelligence?

what's actually a big piece of this because it's effectively what goes on top of a lot of our systems and that's what they're building. They're using AI to build applications and that's all

great but we also know there's certain risks around humanity. There's risks and and there's the broader risk for globally and for the uh and for our

country but there's also risk within our businesses. And as I just start heading

businesses. And as I just start heading down this path I said well okay how should we think about this? how how are we how should we all be comfortable we're approaching this uh correctly and

they said well we don't really like to call it artificial intelligence they call it narrow artificial intelligence and they have three really important

principles associated with it and the first one was that yes we're using it and we'll use it uh with these engineers

we have and and and these highly skilled individuals we brought in but but how How are we going to manage it? Well, the

first thing was that we still have our employees, our senior management team involved in implementing the recommendations

that we then receive associated with the uh the architecture or the framework they put in place. There may be and there may be things that still occur and and should occur just like they did

within our systems or within that. But

as it as it moves up and the important decisions are being made, there's human involvement. Our managers, our employees

involvement. Our managers, our employees are involved and that's part of the governance that's effectively in place.

The second piece is what they call the safeguard. And the safeguard is very

safeguard. And the safeguard is very intriguing because right away, of course, we all want good governance. We

want that in place. But what's that mean? And our team said, "Okay, here's

mean? And our team said, "Okay, here's how I would describe it. If if we ask for an outcome, we want a recommendation

or an action and we ask it now and then half hour later we ask do we get the

exact do we get the exact same outcome?

If we can receive that same outcome, we're we're it's effectively the safeguard. We know we're utilizing that

safeguard. We know we're utilizing that application properly. And importantly,

application properly. And importantly, it means we've got a defined data set that we're comfortable with. And and I like to call it the constraint. We know

we're constraining our data. We know

what data we're using and we know what data is coming in. Now when you talk about all the operations that we're focused on, yes, the next day of

operations come in and it updates that that that data set and we may get a different if we ask the question the day later, we'll get a marginally different

answer. It's got new information. But if

answer. It's got new information. But if

we ask it well, if you ignore today's information and just focused on yesterday, do we get the same answer?

Yes. So we we call that our safeguard.

And then the third thing on technology and associated with this narrow AI is it has to be um additive to our businesses. We're not

going to do AI for the sake of AI. You

can spend a lot of money in this area and we need to know what we're trying to achieve and do we see a valued proposition

uh for the businesses. So that's what we call narrow AI. Um, and if you see how it's starting to be applied at BNSF, it's incredible.

So, if I think of BNSF, um, uh, we have, uh, uh, uh, the expansive network I

touched on. We have a variety of trains

touched on. We have a variety of trains leaving from a variety of points every day. I've touched on it can be the

day. I've touched on it can be the interotal trains of 150 to 200 on our tracks a day which are moving very

quickly and often leaving LA to deliver product in Chicago 48 hours later or it can be in the last quarter we had more than 750 trains a day moving across that

system there's weather or there's equipment failures we share our tracks we allow Amtrak to use them they can be running on time or they can be running

behind schedule. We have to adjust all

behind schedule. We have to adjust all to that. And the reality is Katie and

to that. And the reality is Katie and her team been they have a a system that's been running for 177 years, but

we were not there in how we could use technology to operate that better. And

that's what we're using or we've just started down the path of that's how we know we'll see that step change in in our operating performance. Now to

summarize it all that but I I want to let you know it's it's all around operational excellence. We are going to

operational excellence. We are going to get better at at rail but we're going to use that framework across all of our businesses. They very much will create

businesses. They very much will create the framework and then our teams can embrace it if they so so choose and we'll help them see the value of it. But

there is an opportunity there and I'll break it down with one last comment around technology. Um when you think of

around technology. Um when you think of a artificial intelligence, everybody talks about the large language models and okay they're learning models and

there's a lot more to it than I just highlighted. But I summarize it as one

highlighted. But I summarize it as one thing and this is why there's an opportunity across all our businesses.

Those large language models, I really communicate them and I communicate them to our teams or at least it helps me understand it. They're large logic

understand it. They're large logic models. We're at this point in time

models. We're at this point in time we're using it to solve logical challenges in our business and what we're trying to do it is in a more uh

efficient fashion i.e. do it more quickly and get to a better answer. So

that was a lot in technology but it touches the whole franchise of of Berkshire.

If I move to energy now um and provide an update there uh I'm just going to touch on the opportunity first then come to the challenges because as I've just

discussed technology that's the opportunity and energy one of the core inputs to all those data centers hyperscalers associated with artificial

intelligence is energy our businesses have that opportunity in front of them at at Berkshire Hathaway energy uh And yes, we're pursuing them and and we'll

do it I'll touch on it in in in a way we view is the right approach for both our states and our customers. But I would highlight it's not new to us. If you

just go across the river a little bit east Iowa, we serve just under 50% of of that state. If you look at the number of

that state. If you look at the number of data centers and hyperscalers in that state, it's it's very significant. And

we have four very large hyperscalers, data centers there or or builders of them and and ultimately the their customers using it. But if I look at our

peak load, i.e. the amount of energy being used from those data centers, it's at 8% of their peak load. And the only reason I highlight that 8% is when I

hear people in the industry and all the utilities around us, a lot of states, they're talking about this great opportunity and gez hopefully in the next 5 years they'll be from a

relatively starting point. They want to get to the 5 to 10%.

And we're already at eight and we see opportunities to grow that by 50% over the next 5 years or or potentially more.

But we'll do it in a way and you're starting to hear more and more of this across the US. We'll do it in a way where we're not going to impact the

costs of our other customers. These

users of the i.e. those the

hyperscalers, the data centers and the users of the energy uh they have to bear their full cost. We can't transfer that burden across all our other customers.

and and that's a principle we've applied across all our utilities and from the very early goings when we're building these data centers and I would highlight

I think our team's doing an exceptional job of that if again go back to Mid-Americ if you look at their with all the data centers and hyperscalers and then and the infrastructure they put in

place their rates are still 45% below the national average that's just unheard of it's an exceptional outcome and it just highlights they're doing the right things when they build this

infrastructure or it's a part of it and we would highlight we have similar positive outcomes across uh the rest of our utilities now and I I would note one

other thing our gas network or our infrastructure there our large pipeline company we have there as they build out all this infrastructure not just in our utilities but across the US our pipeline

footprint will grow a lot of it's being built by natural natural gas and and we'll meet that challenge. But here's an interesting point. 15% of the gas

interesting point. 15% of the gas consumed in thei natural gas consumed in the United States is touched by our pipeline network or one of our our core

assets there. So again, that's the

assets there. So again, that's the opportunity on the energy side. Um but

it's not without its challenges and we've talked about this the past few years. Um, and when I think of en the

years. Um, and when I think of en the Bergkshire Hathway Energy Group, what's the challenge? It's what I call the

the challenge? It's what I call the regulatory compact.

We leave your capital, our owner's capital, Bergkshire's capital in these businesses and often a portion of the earnings that they generate, we may

reinvest back into those businesses. And

for that, we get a very specific set of return. and and it's a fair it's it's

return. and and it's a fair it's it's over the long run it's been a very balanced and fair return but but how do you measure that it's versus the risks

we take on in that business and that's the compact okay you're going to pay us x% return and what risks are you asking us to take and that model has worked

very good for a number of years and and for centuries but the problem is it's becoming more stressed if you think of inflation

If you think of the data center challenges, but I strongly believe we're managing that separately and then you move to assets that are 60 to 100 years

old that are starting to retire and we bring those into the network. The

challenge is every day to get more efficient, more effective from the operational side, but as a regulator, as a governor, you're very focused on I don't want my rates to go up. I don't

want to take on more risk. They want to transfer that back to us and that's the regulatory compact. And unless that

regulatory compact. And unless that exists, we do not if if we don't see that bounce, we don't deploy our capital back into those businesses or into those

utilities and and we work hard to maintain it. But there's been a very

maintain it. But there's been a very important challenge we've had within that we've touched on the past two and that's wildfires.

wildfires in the west uh very prevalent the last 15 15 plus years in in California. We experienced a very

California. We experienced a very significant wildfire in Oregon in 2020 or a number of wildfires across Oregon but we being the state but also the

company. So there were a number of

company. So there were a number of wildfires across the state. We had

certain equipment, certain uh high winds, we had certain failures with our equipment that contributed to to those fires. And associated with that, we

fires. And associated with that, we fully acknowledged where we there was causation and where we were responsible for it. But there was also associated

for it. But there was also associated with some of the fires and specifically one fire, a class action lawsuit that

was um had very large um claims against uh our utility there, Pacific Corp. Um

and and we had to approach it such that we'd resolve all the other matters, but that was a class action. And there was specifically one fire that we strongly felt we weren't responsible for. There

was zero causation. There was an Oregon Forestry Department report that said though that Pacific Corp did not contribute nor cause the fire. We took a

very strong position there that one, we were not going to put more capital in to fund the entity and these type of uh risks and these type of obligations and secondly, we would challenge that

liability verdict. And we challenged it.

liability verdict. And we challenged it.

It's been a long process, but as owners and shareholders, and this was a very significant event that occurred in this in this past quarter or or occurred in

in April. We're very fortunate that it

in April. We're very fortunate that it was up to the appellet court. They red

they reversed and remanded that liability verdict and said back to ground zero. Start over again. And what

ground zero. Start over again. And what

they were really saying was that that class of customers and who did we actually affect and and and where was the causation that's been that will be

revisited and then the related damages.

Um some positive things associated with it.

We we recover a billion dollars of security we've already posted.

the people the the the the law firms that pursued it are responsible for our costs associated that period of time.

Not not our litigation costs, but the the costs we incurred in posting the bonds uh or posting that security that's $10 million or approaching likely $10

million. So, but the most important

million. So, but the most important thing is we've reset the stage there and that's very important because we're working hard to get that regulatory compact balanced and getting the right

outcome and we do want to see these utilities move forward and we want to be a very good operator and steward of those assets for our our customers. So,

the last thing I'll just touch on wildfires. So when you think of Pacific

wildfires. So when you think of Pacific Corp, yes, we've addressed that challenge, but to get the right compact, we've worked with Wyoming, Idaho, I've

touched on Utah on this stage to say it requires a judicial system that supports the legislature, the laws in place, but more importantly, we all or as

importantly, we need good legislation that then sets that that balance. we've

had it across those states and we'll continue to work hardly work hard across our our other states. So, an exceptional outcome and and wanted to make sure uh

uh you know there's still a lot to be done there because the we're back to the uh very first uh back to first base on the uh on the uh legal proceedings. Now,

moving to our manufacturing and servicing businesses. Uh there's a the

servicing businesses. Uh there's a the this highlights our blues the manufacturing group that represent represents approximately 70% of that

group and the service and retailing groups in the uh in the gray or beige.

Uh I like to think of when you think of our manufacturing group, we've got three groups there. Uh we have our industrial

groups there. Uh we have our industrial group, we have our our building products group, and we have our consumer products. The consumer products

products. The consumer products servicing and retailing as I've touched on is now under Adam Johnson. We're

fortunate to have Adam as our leader there. He's managing 32 of those

there. He's managing 32 of those companies and we'll have him on stage and we'll expand on that more. If I go back to those a few of those core manufacturing groups, I'll start with

the industrial group. And even when I think of the industrial group, I like to break it down into uh a couple other groups, but it's it's a good way to think of our businesses. And that's why

I want to share it. Within the

industrial group, we have a metals group that is very strong. There's three

businesses.

We have precision cast parts. It's a

business we acquired 10 years ago in 2016.

It's run by Mark Donigan who was the CEO when we acquired the business and he continues to run it today. And as owners and shareholders, we're very fortunate

to have Mark in that in that position.

He understands precision cast parts inside and out. He understands the industry and very much works towards delivering solutions for our our

customers.

The second important part of a metals group is a business called IMC and there are international you can hear

the management team over there little uh international metalworking uh company and it's really interesting to see that company what one they make the tools

that removes that remove steel. So they'll take a cylinder steel, they create the tools and then that gets utilized in a variety of other industries. It can be the

aerospace uh like a precision cast parts and I'll touch on that or it can be another industry like the auto. If you

think of what's happening in the aerospace industry and this is why precision cast parts and IMC has such um a significant backlog or I'm

highlighting a backlog. If we look at what Boeing just announced last quarter or this quarter, but just recently, their number of planes that they

delivered went up by uh 11% quarteron quarter. That's

phenomenal. And they're talking about even doing more. Very similar results at Airbus and that's who precision cast parts serves and also uh often IMC

serves that industry. Um and that's remarkable. But if you hear of the

remarkable. But if you hear of the backlog in this space, it's 10 years.

And I I did ask our team the simple question. I go, well, is that many more

question. I go, well, is that many more people really flying? Like I get it.

We're postco and it's building up. And I

sort of obviously knew part of the answer, but it's really remarkable why there that is that demand and and a lot of us know this, but the reality is to

see what's driving it is the efficiency of those planes and engines is so great now that it's better to buy the new plane and retire the own the old plane.

And what you have is this 10-year backlog that we're seeing a very similar backlog across our our metal businesses when you touch on a precision cast parts

or or IMC. Now, the third piece of the metal groups and and by the way, I should just touch on this. Uh we

acquired um IMC 10 basic basically 10 years before uh precision cast parts.

you go back to a a 2006 timeline, we acquired 80% of it. And again, we're very fortunate to have the senior leader there, Jacob Harpaz, who was at the

business, the senior leader running it back then and still runs it today.

If I look at what how precision cast parts and and IMC works together, precision cast parts is now if not but

very likely IMC's number one customer.

We have them working on joint solutions.

Now move to that third group. In 2022,

we acquired Allegati and we're fortunate to have that in the family now and a been a a very good addition. But along

came also with it came three non-insurance businesses. There were a

non-insurance businesses. There were a variety of other ones that are tucked into the appropriate place in other businesses. But one of them that is

businesses. But one of them that is standing that stood alone was WW Steel.

And it's a it was a familyfounded company. It had transitioned to Rick

company. It had transitioned to Rick Cooper. He's he's here over in the

Cooper. He's he's here over in the manager section. He's the CEO. And it's

manager section. He's the CEO. And it's

a remarkable business. They create

basically they contribute uh steel into a variety of core infrastructures. It

can be bridges, it can be stadiums, it can be arenas. Their most famous one is the uh Las Vegas sphere. And here we

bought an insurance company and and Warren has touched on this. we sort of had these nice add-ons that I'm not sure we spent a lot of time valuing that side of it, but incredible additions to the

Bergkshire family and and that really comprises the the metals group. Now, if

we move to the second group is the chemical group we have within the industrial sector. We have three of

industrial sector. We have three of those. We have Lubberol going back to

those. We have Lubberol going back to 2011. We've touched on that business

2011. We've touched on that business many times.

We then acquired Oxycam last year. Uh

associated with Oxycam, we announced the acquisition. We closed it on January

acquisition. We closed it on January 2nd.

Very nice addition. Uh I would say they they provide they produce two core commodities. So it's more a commodity

commodities. So it's more a commodity chemical business and they're valued commodities in the again industrial sector. but their plants can't be

sector. but their plants can't be replicated. That would not be easy. So,

replicated. That would not be easy. So,

we've we've got valuable assets. And

then the third piece of the chemical group is a company called LSPI. And I'm

just highlighting because it's a it's a it's a real gem for for our owner shareholders. What that does is it it

shareholders. What that does is it it creates a drag reduction agent that allows oil to move through the through a pipeline. And you can imagine in the

pipeline. And you can imagine in the environment we're in right now with the with the the fundamental supply and demi demand imbalance on oil, the more oil that can be moved through those

pipelines and you can't quite double it, but you can get darn close. They have an amazing product and obviously in in very high demand. Now, the last thing I'll

high demand. Now, the last thing I'll just touch on with the industrial group is we have Marman. Excellent business.

And the reason I'm touching on it at the end, it's it's really amazing because it's the catchall. It touches our rail industry or the industry. It touches the

energy industry. It touches the metal

energy industry. It touches the metal industry. It touches the chemical

industry. It touches the chemical industry. It touches in all the core

industry. It touches in all the core industries in the US. And again, a remarkable asset that we have and and will continue to create strong value for

our owners and shareholders. Now, the

second piece of the manufacturing group is our building products group. I'm not

going to go through all the businesses in there because we have one that is the bell weather and it tells you how the rest of them are doing. That's Clayton

Homes. the other businesses will their results follow very much very closely that because with Clayton Homes we're building manufactured homes or sight

build homes and there's a lot that goes into it and our other companies provide both products to them and across that that space. So it could be the

that space. So it could be the insulation, paint, carpet, a variety of other things. You look at Clayton's

other things. You look at Clayton's results, if you go to the manufactured side of the business, our results are down

on on true homes manufactured and and sold down approximately 10%. A little

better than the industry average, but that gives you a feel for it. And if you go to the site build, i.e. homes we were home builder, they're down around 5%.

And the numbers I've been seeing for the last quarter are probably more like 7% across the industry. Uh and

[clears throat] that and that's obviously driven by where interest rates are and certain other challenges for the uh for the consumer. But where's the opportunity

and and and I'll touch on the challenge.

Where's the opportunity in these businesses and and how is Clayton tackling it? Um, it's very much around

tackling it? Um, it's very much around pursuing the American dream and can we help deliver that? And what I what I have is a going to have our team bring

up a video uh a slide that [snorts] highlights this is actually a what we call a crossmod home. We have it in the exhibit hall. It got moved in. Had to

exhibit hall. It got moved in. Had to

cut the back off a little bit. So, it's

not quite the full size if you're if you're comparing it to this. But the

reality is um this is where the opportunity is is within Clayton. We

want to deliver on uh an affordable home to the American consumer. This home

you're looking at, we thank you and and thank you to our Clayton team.

Including the lot price, assuming it's in the 40,000 range, and there's a lot of place in America where it's well below that. We recognize some others. Uh

below that. We recognize some others. Uh

it may be greater, but we can deliver this home on-site built two-bedroom, uh family home, living space, very very

beautiful living space for $249,000 delivered, including the lot. That's

that's absolutely incredible. That's

delivering affordability to the consumer.

Now, the cross mod, how can we get it to that price? 70% of that home is built in

that price? 70% of that home is built in our manufacturing side of our facilities. So those manufacturing homes

facilities. So those manufacturing homes we produce, we now use it. The last 30% is built by our site builders. They

bring the street appeal and all the features that as a homeowner they may want. So it's a exceptional product. Now

want. So it's a exceptional product. Now

we don't stop there. We still have a very strong culture around the manufactured homes and and how how can we go, you know, what's the extreme on

that? Well, if we deliver a single and

that? Well, if we deliver a single and this is a thousand square feet. If we

take it to the manufacturing home and think of a traditional manufactured home, and our team probably won't like it, but it's more the the box square

box, but it it but what it does create is a home. It can be a two-bedroom with a um again, very nice living space, very

well done. Uh now has a 30 year plus

well done. Uh now has a 30 year plus life on these assets just like this one.

and they can get a 30-year mortgage on the cross mod or on a manufactured home now. So, that's the quality we're

now. So, that's the quality we're building it to. And we can now do a single manufactured home uh for just [clears throat] under $35,000. We can

deliver it. They still have to get their lot or rent one, but the reality is we're creating homes that people can afford, and that's really where the

opportunity is is within Clayton. So

very proud of what our team's doing there. Now lastly, I'm going to move to

there. Now lastly, I'm going to move to the service and and retailing business.

I'm not going to dive into it in our consumer products business. Again, we'll

have Adam here, but when I think of those businesses and and Adam's been in that role, as I said, so in since December, very much um learning the

businesses, getting to know the management team like myself and and how we've always done it very will be very focused on

capital allocation and the risk and but but also very focused on helping the team achieve operational excellence across those businesses. business. Now,

if you think of those businesses across those 32 businesses, we have a wide spectrum of where they are in their life cycle. We have some that are still

cycle. We have some that are still growing and growing very quickly. We

have some that are growing at a much smaller pace but still growing. And then

we have some that I would call in the more mature cycle, but still creating a valued product to the consumer customer and deploying and and creating capital,

producing cash flows that often within those businesses will redeploy across our other businesses and we'll have that chance to discuss that with with Adam.

Now, the last thing I just want to touch on before we move to the second session and I wrap up here, I'm going to move to our balance sheet and and activity

associated with that. In our first quarter of the of 2026, we purchased uh $235 million of of

Birkshire stock. Um you can see that

Birkshire stock. Um you can see that reflected on the on the slide. Um, and

we've talked about this often, but when do we purchase stock? It's when our intrinsic value, again, conservatively determined, exceeds the current price of

our share. And we do that literally. Um,

our share. And we do that literally. Um,

Warren and I will be discussing this on a daily basis and and how do we feel around the the overall value. It's not

daily, but it we think about it daily.

And the reality is there's a lot of different ways to to calculate intrinsic value. It can be a simple premium over

value. It can be a simple premium over book value. You can take book value

book value. You can take book value because we have everything at a historical cost basis and try to adjust our various companies at a BNSF is

recorded on the books at the original price we bought it at versus what's it valued at today. You can go through that exercise. Or if I think of it more as

exercise. Or if I think of it more as how we would think of businesses when we buy a stock or a full company, we think of it as we have our balance sheet, we

know what our cash is, we know what our US treasuries are, we know what our inve equity investments are, they're marked to market, and then we have our operating companies in place. And that's

where we have to think about what are the long-term econ economic uh prospects of those businesses 5 years 10 years from now. And then the other important

from now. And then the other important part of that equation is how do we redeploy that capital that comes off of it. And that's really the the approach

it. And that's really the the approach we take to the intrinsic uh value. Now

let's move to our balance sheet.

Uh the the the very specific numbers.

Um, there's a lot of numbers here.

Again, I'll touch on a few captions.

If you look at our cash and US Treasury bills, there's a risk that people use the 397.4

billion as the headline number because that is our cash and US Treasury sitting there at the end of March. However, and

we don't like these type of adjustments, but it is important to communicate it.

There is 17.2 2 billion of payables associated with the treasuries that are in that total. How does that happen? We

bought the treasuries right before the end of March and the payable i.e. the

the the the fact we use our cash to purchase those treasuries that that occurred right after the end of March.

So we've got the treasuries up in the 397 and we're still holding the cash.

Accordingly, our cash in U US Treasury bills net is 380 billion.

Um, and yes, it it grew by that 7 billion you can see on the slide.

The other important thing to focus on is our cash and investments at the bottom, the 705.8 billion versus the 708

uh7 billion at the end of the year. So

we're down just uh under three billion.

Now what what drives that or what what's the underlying numbers behind that? We

produced uh a little more than u well close to 10 half billion dollars of income and related cash flows in in the first quarter.

We also uh would have incurred certain capital expenditures against our businesses. We

incur those to either ma reduce risk in the businesses to manage those businesses on a sustainable basis or to pu pursue growth. That was like I said

just under five billion. Again we we are involved in our management teams as they decide to deploy that capital and very comfortable with that. And then the other piece of the equation in the first

quarter was we closed on the oxy transaction. $9.5 billion dollars flowed

transaction. $9.5 billion dollars flowed out associated with that. Very pleased

with that.

Now, we did have two transactions last year that we announced. Oxycam, we

announced it and closed on it in this year. Last year, we announced Bell Labs,

year. Last year, we announced Bell Labs, a smaller transaction. We're fortunate

to have it join our company, Steve Levy, and uh uh his team. Um a great group there. It's our uh Warren likes to say

there. It's our uh Warren likes to say we finally delivered uh on on Charlie's objective around uh we have a rat poison

company that uh we we we value highly, but it's it's an exceptional business.

But the reality is that's not in that number. We had the oxy transaction

number. We had the oxy transaction resulted in a little more than a $3 billion decrease in our our results. So

with that, a very wholesome business update. So, I appreciate uh the

update. So, I appreciate uh the opportunity to share where our businesses are and where they're going.

So, thank you.

Now, I'm very excited to I'm going very shortly have Ajit join us on stage uh and we'll we'll move to the Q&A. But as

we as we transition to that session, we'll have the Geico video narrated by Nancy. Thank you.

Nancy. Thank you.

[music] Geico started out um 90 years ago by trying to make things simple and giving a great price and service to customers.

And when you think about it, today is um exactly the same thing. We're just

continuing to try and perfect that and make it a little better every day, a little faster, a little easier. I'm

Nancy Pierce and I became CEO of Geico in December of 2025. Um, prior to that, I was the chief operating officer, but I've just had my 40th anniversary with

GEICO. I started as a claims associate

GEICO. I started as a claims associate in 1986 right out of college and I've just had the pleasure over many, many years of working in I think just about every department or every sector um that

Geico has. So while I started in claims,

Geico has. So while I started in claims, uh I've been in pricing, I've been in product management, I've been in underwriting, I've had an opportunity to run operations in different parts of the

country. Um but what really has kept me

country. Um but what really has kept me all these years and what has inspired me and I think inspires all 30,000 people at GEICO is every day um we're

delivering for customers and um we're doing something for them. We're saving

them money on a product that um you know everybody has to have but maybe you don't. um necessarily want to use it. Um

don't. um necessarily want to use it. Um

but when you do need to use it, that's really the moment of truth. And for us to be able to do that um and to do it in a way that saves people money and gives

that outstanding um customer service, that's what excites me every day. Um and

the reason that uh we have customers and will continue to grow is just keeping that as our northstar. And if we do that, I think Geico will be very successful over the next 20 years. Geico

[music] was founded in 1936 by Leo and Lillian Goodwin and their idea was to come direct to consumers and to cut out the middleman and to have much better

cost and much better service for those [music] customers. So in 1951 um

[music] customers. So in 1951 um Benjamin Graham um took an investment in GEICO and of course one of his students was Warren Buffett and that's when Warren really started to think about

GEICO and to um deeply try and figure out what we were doing and met with the leadership of GEICO and that was one of his first very big investments um his personal investments and then later um

he started investing Berkshire Hathaway shares um and by 1996 he owned all of Geico. From that beginning, we now

Geico. From that beginning, we now ensure millions of cars, trucks, RVs, um, campers, etc. Um, we're in all 50 states. Um, and we try and be there

states. Um, and we try and be there wherever the customer needs us. Um,

that's always been sort of number one. I

I think from the first time I met um, Warren or Greg or they always start by talking about integrity and reputation and making sure that you're doing the right thing for customers. So, it's

something we live and breathe every day at GEICO and u it's just it's absolutely a big big part of our culture.

Obviously, Berkshire Hathaway was founded in in some ways on insurance and um being wholly owned has just been um terrific for Geico and terrific for our

our customers um over the years because it really allows us to invest in our business and to make long-term decisions, not quarterly or annual decisions on um what's best um for

growing our business. And you know, obviously Bergkshire has many other uh insurance companies besides GEICO and we do work together with them. Um, Geico

sells many of their products, uh, you know, today and we continue to look and bring more of them onto the Geico, um, platform.

There always [music] cycles in insurance, sometimes there's bad weather. It's just making sure that the

weather. It's just making sure that the company's prepared for all of those things and to deliver on that promise um, that we make to customers when they buy that policy um, to be there in their hour of need. So, we take that very,

very seriously. if you're involved in a

very seriously. if you're involved in a in an auto accident, um the last thing you want is to go weeks and weeks and weeks um before you get paid and before the whole thing is resolved. So, we

really strive to do that now in minutes um where possible as opposed to in days or hours. Um nobody really wants to

or hours. Um nobody really wants to spend a lot of time with their insurance company, but when they do, we want to make sure that they're getting the very best service as fast as they possibly can. So, when I think about innovation,

can. So, when I think about innovation, it's really about things that are going to allow us to handle claims faster um than anybody else in the industry. What

I'm really focused on is our customer loyalty and retention. So, we want to improve those. Um it's a very

improve those. Um it's a very competitive market right now. Um you

know, everybody [music] has come out of um sort of a an unusual period uh out of CO in regards to frequency and severity.

Um, so I think everybody now, all of our competitors are in the mode to try and grow and the best way for us to grow is to retain, you know, every one of our customers. [music]

customers. [music] I think that what I'd like to communicate is just that every day um 30,000 people at Geico go to work uh in support of millions and millions of

customers. And I want you to know that

customers. And I want you to know that that's what the Geico team is delivering for Bergkshire day in and day out uh is a reputation of doing the right thing.

Um, saving customers money and just giving outstanding service.

[music] Thank you, Nancy. And to the GEICO team, thank you. We've got uh uh an

thank you. We've got uh uh an exceptional leader in Nancy. And again,

appreciate taking on that that senior role. Welcome, Ajit. Uh

role. Welcome, Ajit. Uh

yes, great to be up great to be up here together.

As you if you don't mind, I'll start with I touched on Tokyo Marine, an exceptional transaction, exceptional relationship. I know you've built over

relationship. I know you've built over many years with with the Tokyo Marine management team, but if you could just expand on that strategic transaction and relationship, we'll love to start with

that.

Sure. Thank you. Uh,

Tokyo Marine and Fire is the largest non-life insurance, excuse me, insurance company in Japan. They've been doing

business for more than 100 odd years and are clearly regarded as a blue chip company in the international arena

altogether. They're clearly number one

altogether. They're clearly number one in Japan. every every insurance company

in Japan. every every insurance company would like to be associated with them.

They have a very very high reputation in Japan and globally as well. We being in the insurance business for the last uh god knows how many years we've tried

year after year to try and get a relationship going with Tokyo Marine and Fire. It has not been easy because one

Fire. It has not been easy because one of the things we bring to the business

is a capital partner and Tokyo Marine were cashri and they really never needed

capital in a big way. uh they have been expanding in Japan. Now given the limited growth in Japan, they've looked

overseas and over these last 8 10 years, they've really got most of the lowhanging fruit overseas that they would like to get. Nevertheless, they

are keen and they are hungry for business elsewhere outside Japan. And

last year we got a chance to spend some time with them and talk to them in very general terms about what the two of us could be doing and should be doing with each other.

After that initial conversation which probably took place nearly a year ago, uh things moved fairly quickly.

So to to sort of get get to the bottom line um in March we finally announced a transaction with them. That transaction

has three legs to it. Uh I'll describe to you each one of them and that'll give you an idea of uh what the relationship is right now and we've got a long way to

go. Of course uh firstly we bought some

go. Of course uh firstly we bought some stock in the company just a simple transaction we wrote a check for 1.8 8

billion US and we got 2 and a half% of the stock of Tokyo Marine and Fire.

[clears throat] That was one part of the transaction.

Secondly, they have a good and profitable book of business in terms of what they write in Japan and elsewhere.

We took a piece of the business just that property casualty business that they write and you know we compensated them for their efforts in getting the

business originating the business and running the business but we get a slice of their business god know for several years down the road

and the third piece was a sort of strategic agreement between the two of us. uh it is not spelt out in a lot of

us. uh it is not spelt out in a lot of detail uh and normally I would be very very concerned about having open-ended

strategic uh transactions but Tokyo Marine they are a quality company in fact they remind me of the the a phrase

that JP Morgan used I don't know how many years ago doing business in doing first class business in a first class way and that is Tokyo Marine in the

insurance industry.

We have a general statement that we'll work with each other. We'll coordinate

when it comes to finding opportunities elsewhere, running businesses operationally. And that is something

operationally. And that is something that will evolve over time in terms of who's going to bring what to the party.

And I certainly hope this serves as a springboard for both of us to move on to the next plateau.

Thank thank you Ajit.

It's a an exceptional transaction and a real long-term relationship. Thank you so

long-term relationship. Thank you so much. And you know it's one thing when I

much. And you know it's one thing when I think of our also it reminds me of our five other Japanese companies that we've made investments in. Yes, we like the

financial investment, but we also see long-term strategic relationships that can develop across one or all five of them. So fully uh support and excited by

them. So fully uh support and excited by everything you just described. Thank

you. Now we'll move to the more formal or not the formal but our traditional Q&A question and answer uh and we'll go

again to the stations and to Becky. But

today we'll start with station one.

Station one.

Hi my name is uh Warren. Warren from

[laughter] Omaha. I've recently

undergone a let's call it a significant change in role and I have well let's just say a a not insignificant portion of my net worth tied up in Bergkshire

stock [laughter] now Greg I've been watching this company for a while long time a very long time and and uh I've been telling people that I have no intention of selling a single

share not one. So, my question is a simple

not one. So, my question is a simple one. I'm 95 years old. I've got nothing

one. I'm 95 years old. I've got nothing but time and cherry coke and I want to know just so I have something to tell my fellow shareholders, why should they

hold their Berkshire shares for the long term?

Anyway Greg take it from here.

Well, uh, well, [clears throat] Warren from Omaha, very astute question. Um,

uh, if if if I think of what we've already discussed this morning, which is our culture and values, and highlighted that's the bedrock of Bergkshire, then

what did it create? It created the foundation that we have today and that's these this incredible set of assets that exists within within Bergkshire. We have

uh our insurance business uh led by Jeet and and his team and we've talked about the the it being the heart with talent and opportunities because we have

capital uh available and it'll be available at different times. So we've

got significant opportunities there. If

I think of our uh our non-insurance businesses, I I spent a a lot of time on those, but we've got unique opportunities on the on the operational excellence side and we'll pursue them

and they'll be incremental investment opportunities in there. Uh we have our equity investments as we know and we also have a very

important asset. We have our cash in US

important asset. We have our cash in US treasuries and it it serves a couple purposes.

One, uh, and you've heard Warren Charlie say this before, I've said it. We do not

intend to be beholden to anyone. We

start with that position.

Thank you.

And it's how we manage Bergkshire and we'll continue to manage Bergkshire. Now

that asset the cash and treasuries also creates a unique opportunity. Um it

creates the opportunity to deploy it across these different groups. It can be uh and and and it will be dependent upon the opportunity i.e. Is there is it a

strong value proposition? But if it presents itself, we'll be prepared to act decisively and with and with significant capital. That's what that's

significant capital. That's what that's what it's there for. Um and we have will we will and and and do have opportunities on the within the equity

investments that we uh we currently have and and beyond that we have our operating businesses as I said and our and our and and there it can be deploying capital back into those

businesses as I touched on the capital expenditure side or it can be the incremental opportunity to acquire 100% of a of a business and Then there's the

opportunities that Ajit's already alluded to on the uh insurance side.

But what's the other unique thing is uh yes, Bergkshire is a conglomerate and we recognize that. But we are unique

recognize that. But we are unique conglomerate in that we can move our capital very efficiently and that's the value of the the conglomerate is we can

move our capital very efficiently across each of those groups. We can move it from insurance to non- insurance into equities or if we so choose to hold it

in cash or back across those in a very efficient way in a very taxefficient way. I would also add to the fact that

way. I would also add to the fact that um uh how are we unique as a conglomerate? We live by the fact that

conglomerate? We live by the fact that we hate bureaucracy.

We do not embrace in in in our Thank you. Yes.

you. Yes.

Ajit's the biggest fan. He reminds me constantly. I love it. I treasure it.

constantly. I love it. I treasure it.

But no, we we've heard many times the ABCs, the arrogance, bureaucracy, complacency that can creep into a company will kill a company. And we

intend to uh never allow that to happen.

So we have this unique opportunity to both take the businesses we have today, take that foundation and build upon it.

We also have that capital to be deployed back into them. How will personally myself and the team define success?

We'll define success is can we ensure that Berkshire endures in its current form. That means we do business as we do

form. That means we do business as we do today consistent with the cultures, values, business principles we have

with the both the long-term objective and and with great purpose and intent create long-term value for our shareholders.

That will define success.

Anyway, Greg, I'll let you take it from here. Uh, I've got a few things on my

here. Uh, I've got a few things on my plate. Actually, excuse me. I need to

plate. Actually, excuse me. I need to take this. Someone may want to sell me

take this. Someone may want to sell me their business. Uh, I hope it's an

their business. Uh, I hope it's an elephant.

What? Yeah.

Now, as you as you've all picked up, that was a that was a deep fake. Um,

but but here's the interesting thing.

that was that was done with zero input from Warren voice photo you know we we got we were able to obtain that with uh information that's out there and

replicate those actions and that voice and the reality is that's what we're dealing with when we think of Bergkshire and how we have to protect it every day can go to deep fakes and they're using a

way to try to penetrate our business can be the cyber attacks but it's a it's a great reminder for our team because that is a significant risk across Berkshire

that we're managing every day, cyber risk, and it's one that we take extremely serious. I touched on the

extremely serious. I touched on the technology side. We're constantly using

technology side. We're constantly using technology to uh protect our businesses.

And then we're also trying to use technology to identify it. We've all a lot of us have heard about methos and what's going on there. Um we're we're

we're very focused on those risks. But

Azie, before we move truly to our first question um and you've touched on this many times, when you when we think of cyber risk and

we ensure it, what's what's our current approach across our insurance businesses and your thoughts there?

Okay. Um so cyber is something we worry about in the insurance operation at two levels.

Firstly there is a huge demand by people in business all over the world who are interested in buying protection against

some kind of a cyber incident.

uh we have been slow in terms of consciously we have been slow in terms of entering that class of business as an underwriter. Uh the reason for that is

underwriter. Uh the reason for that is firstly on cyber I find it very difficult to have some meaningful method

to assess and model the aggregation.

uh people will tell you we've got it under control and they'll show you all kinds of models but nothing that I can really hang my hat on in terms of we really have a good feeling for what the

aggregate exposure is because any risk we take on the first question we ask ourselves how bad can bad be and I'm not

sure we can answer that question as well as we should so the second reason is cyber has been a very popular fashion able product in

these last several years. We have not played in it. Now, as it turns out, there haven't been very many cyber losses. So, people who've taken on cyber

losses. So, people who've taken on cyber risk have actually made profits and as a result of which the premiums that cyber

insurance commands has been coming down over time. So, we'd hate entering a line

over time. So, we'd hate entering a line of business where prices are coming down. So we sort of sitting on the

down. So we sort of sitting on the sidelines and I'm not sure when but I'm pretty certain that the day will come when we will have a fairly significant

role to play in cyber.

Uh secondly, you know, we being a large company are exposed to cyber perils ourselves.

We try and do the best we can. We I

think are as good as anyone else. Now,

cyber insurance is very highly regulated by the regulators and we've been consistently above what the regulations call for. So,

I think we're doing the best we can, but I cannot be categorical about it.

Thank Thank you, Jeep.

Let's go to the now truly the Q&A session. Uh

session. Uh Becky, we'll start with with you and thank you for being so patient. Thank

you.

Thanks, Greg. Uh this first question, Ajet, let's uh follow up with the AI.

This is slightly different though. This

comes from Billy D. Ross in Ardsley, New York, who writes, "In an era of increasingly complex risk models and AI tools, where does human judgment still

provide Berkshire a competitive advantage?

Uh okay, can you just repeat the last part of the question?

Yeah. Where is human judgment still a competitive advantage for Berkshire when you consider AI tools that are out there?

Yeah. So AI also is very fashionable right now. Uh people are jumping into it

right now. Uh people are jumping into it in the from the insurance space and from the non- insurance space. And clearly if

AI becomes reality as it's being projected then there's no question about it. It'll be a huge gamecher.

it. It'll be a huge gamecher.

Right now what we are seeing is AI being used as a productivity tool as a

mechanism for reducing uh labor cost and and doing re routine repetitive things.

I do not think AI will reach a point where you can make a tradeoff on things like pricing, settling a claim. Uh that

is still years away and you know I tend to be skeptical. I'll be surprised if AI can solve that problem for you.

Uh so if you're counting on AI telling you which stock to buy and which one to sell, I don't think that's going to happen. Yeah,

happen. Yeah, I I I found it interesting and I were together uh a few weeks ago and Ajit got his uh team on the phone because we're

discussing this exact question, Becky.

And your team immediately went to yes, the cyber risk, which we've already touched on. They then went quickly to

touched on. They then went quickly to the fact that really across the insurance businesses and it's that building concept that

we're very focused on how do we become more efficient in in creating code and managing it. They they immediately went

managing it. They they immediately went to that aspect of it and then as you touched on becoming more productive, more efficient and and they went as far

to say I thought the example was really good. I mean, if if we were looking at a

good. I mean, if if we were looking at a risk and we had our traditionally traditional underwriters doing it, we might have looked at the five largest risks and your team highlighted that now

we can pretty much in a fairly quick way. Yes, we focus on those, but we'll

way. Yes, we focus on those, but we'll get a very quick view on another using technology. We'll probably look at those

technology. We'll probably look at those other 15 risks and have a strong view on it. Is that fair?

it. Is that fair?

Yep. That's exactly. So using it within the businesses but well aware it's evolving I think is a fair way.

Yeah. So thank you. Thanks Sit.

Thank you.

Now formally station one unless Warren you're up there again.

Hi everyone. My name is Levia and I'm from Irvine California. Born in Quing China. And I really want to say it's my

China. And I really want to say it's my honor to see both Mr. Mr. Buffett and Mr. Elbow today. I really want to say

Mr. Buffett, your speech has helped me get through many many dark moments in my life and stand back up not only in

investment. I really appreciate you.

investment. I really appreciate you.

Okay. My question is, as a young investor navigating both uncertainty and rapid technology change, I often

struggle to balance patience with action. How would you personally

action. How would you personally distinguish between the two, please?

Sure. Um, I think I think our one of our greatest strengths at Berkshire is patience and being disciplined when it comes to allocating our capital.

There'll there will be opportunities that come over time and and for yourself. And it doesn't mean there's

yourself. And it doesn't mean there's not opportunities now, but it doesn't mean you need to uh deploy all your capital or or spend all your money right

now. And that's really our approach. We

now. And that's really our approach. We

take every day and we we recognize we've got a a significant asset in in our cash and US Treasury is using it as our ourselves as an example. And I would

think of uh the cash you're holding as that and and that's an asset. It's a

great opportunity. You'll you'll you'll feel the moment or or or feel there's a a strong value proposition with an opportunity. When do we see those? We

opportunity. When do we see those? We

we've outlined our investment philosophies which is one we very much have to understand what we're investing in. So we want to have a strong it can

in. So we want to have a strong it can be you touched on technology and the things you're seeing there and the evolution and how fast it's all changing. Um I always start with and I

changing. Um I always start with and I know we always have at Bergkshire. Do we

understand this business? Do we

understand the opportunity and more importantly do we understand the risks?

Then we want to have a very uh understandable view of what the economic prospects look like for the next five ten years. Not not yes the next year

ten years. Not not yes the next year matters but we're not in that investment for a year. It has to be a long-term view of where that uh where that

opportunity will go. We take it one piece one step further. We're going to be in these investments forever. So we

think that way and we need to uh we we like to have a strong view on the management team that they're they're capable and operate with with high

integrity and if if we can get to that position but the most important one being then at the end the value has to work for us to deploy our capital. We're

we're not anxious to just deploy capital into subpar opportunities. We want to know it meets our principles and then we'll as I said earlier earlier we'll

act decisively both quickly and with significant capital.

Anything you'd like to No.

Thank you Becky.

Oh. Uh,

this question is for Greg and it comes from Mark Lunder in Miami who says he's been a Berkshire shareholder for 30 years. He said,

"Greg, given your background as a business operator, which differs from Warren's roots as a public market investor, could you share how you balance your time between overseeing the

wholly owned subsidiaries and the $288 billion now equity portfolio? Also, does

your operator lens change how you evaluate new investment opportunities compared to Warren's historical approach?

Thank you, Becky.

So, obviously, yes, uh the the many years of uh operating of RDY Bergkshire Hathway Energy and then in the role of the um [clears throat]

vice chairman of of non- insurance operations. Fortunately, that was um

operations. Fortunately, that was um Aene and I were in those co- roles for for the past eight years, nine years now. But that created a a very

now. But that created a a very significant opportunity to for myself personally to understand those businesses and and as I've already touched on, we have exceptional

businesses, exceptional leadership there, but there's still opportunities there. But but it does rem does I'll

there. But but it does rem does I'll spend a certain amount of time associated with those businesses and and make sure we're allocating our capital

properly and we're still uh thinking about risk across those businesses and encouraging operational excellence because listen having been inside a

business uh it's easy to look at your internal metrics and convince yourself you're doing okay and you have to look outside and say well what is the customer seeing feeling how what are our

competitors doing and I think that's what we can bring on the operational side I've touched on bringing uh [clears throat] uh Adam on or or him taking on the

incremental role across 32 businesses he'll bring that great operating knowledge and we have Ajit on the uh insurance side now when it comes to the

equity portfolio and again allocating time um still we have significant opportunities there uh as we look at deploying our capital that that's on the

balance sheet and I I shared where our uh our cash and and and US treasuries were um I would highlight if you think of our

equity portfolio as it as it exists today I articulated this in the letter it's it's in a it's in a very uh we have a

concentrated portfolio And we highlighted that by calling it across the core but it's what the best name is really a concentrated portfolio of investments and we had our our core for

you and you concentrated investments I highlighted in um uh in the letter we have our Japanese investments and it's

interesting if you then go to the next number of companies where we have positions that are very significant

uh and I would add that um uh associated with those that we may still be acquiring shares or or rationalizing what's the right position

across that portfolio. So the first group when I highlighted it was just under 200 billion and and remains at

that we have and closer to say 85 billion right now. you then add in associated with be it the other

investments you have a a BFA a Chevron a Google companies like that um there's another $70 billion of investments

and and what that highlights is a very significant portion of our total investments are highly concentrated and sit across a limited portfolio that the

the active management of that is is really limited is really what I'm what I'm highlighting. We know those

I'm highlighting. We know those businesses well. We know the management

businesses well. We know the management teams. Those are the things that Warren and I would still be absolutely collaborating on and discussing. We

don't have to discuss them every day, but if there's something going on across those businesses, we'd be discussing it that week or that month. Um, and maybe it's where they're going or what we've

we've learned. the Japanese companies

we've learned. the Japanese companies just announced their results in the last 48 hours and that was a an active conversation and I that Warren and I had just around their results and the

businesses and what we're seeing there uh yesterday morning. So that that's those are core but it doesn't mean we just set them aside or they're concentrated investments. We're

concentrated investments. We're constantly aware of them and evaluating them. Uh Ted oper Ted manages another 20

them. Uh Ted oper Ted manages another 20 billion or just under 20 billion of our our capital and and his responsibilities go far beyond that. He obviously helps

us uh across a variety of our other opportunities or helping us assess risk or capital deployment in our in our businesses. So we're fortunate to have

businesses. So we're fortunate to have that.

But it's a it's a portfolio that's very manageable when you think of the the management around it and the and what's required of it. the the as as we've

touched already is the opportunity to deploy that cash in US treasuries at the right time is a very significant opportunity including equities including

what we may see on our our on our within the operating businesses and including the the insurance side but um um so when

it comes to allocating the time uh yes there's a certain amount of time spent on operations and and we'll prioritize that because we see a huge

opportunity to continue to uh uh improve and close those gaps and and operational excellence. We see opportunities within

excellence. We see opportunities within our existing portfolio, but that's that is either adding to them or or right-sizing it and then constantly

evaluating what other opportunities are out there either in whole totality acquiring a company that's private or public. Equally looking at what are the

public. Equally looking at what are the incremental opportunities if we're going to own a piece of a company and and those are evaluated in the same fashion

i.e. We we look at as I said the

i.e. We we look at as I said the economics and and really tied to the the the last answer.

Ajit any thoughts there?

Yeah. Uh I really think capital allocation and operating businesses are two sides of the same coin.

And a comment that Warren had made several years ago I think goes a long way when he made the comment saying that a good capital allocator will make a

good operating manager and vice versa.

Well said Ajit I didn't say it work well said Warren.

No, but uh obviously we recognize it and it the last thing I just say around that and I owe it. I mean when you think of our operating companies and I touched on this, we have a very deep bench. We have

exceptional operators that understand their business. They understand their

their business. They understand their industry, their customers. Yes. Do we

have still have opportunities to get better? Yeah, it's continuous

better? Yeah, it's continuous improvement and we'll close those gaps.

But we have exceptional teams there and be it myself, Adam, we spend our time making sure we're comfortable how the capital's allocated. Do we understand

capital's allocated. Do we understand the risk and then are we aware of those gaps? So thank you Becky.

gaps? So thank you Becky.

Let's move to station two.

My name is Jackie Han from China currently working in Toronto, Canada.

This is my ninth bookshare meetings. So

I guess I'm officially a repeat customer and like the most shareholders I plan to stick around for the long term. Over the

years, Mr. Buffets has often said that capsule allocation is Birkshar's most important responsibility. Today we are

important responsibility. Today we are in a very different environment.

Interest rates are higher. Cash actually

earns something again. And competition

for quality assets has increased globally.

Uh the station lady actually read my mind a little bit. Actually my question is how should long-term investor think about their capsule allocation approach today when patience has a real

opportunity cost and also for Mr. Ael as you step further into this role how do you personally balance patients vas action especially when standards are

shaped by decades of M buffet's track record. Thank you.

record. Thank you.

Thank you and thank you for attending your ninth shareholder meeting. Um

[clears throat] yeah, so again when it comes to our capital allocation approach and and the

in the long-term uh approach we've taken, it's very much aligned with our owners and our shareholders that are here. Uh they've

taken a very long-term approach around their their investment. they've that

we're fortunate to have this unique ownership base within our our shareholdings.

And again, over the long term, there will be significant opportunities for Berkshire and and this is where it's back to the patience and the discipline around

capital allocation.

Do we have any idea what uh will occur tomorrow or will that event be three years from now, two years from now? But there will be dislocations

from now? But there will be dislocations in markets that again will allow us to act and that's where the both disciplined approach knowing how we're

going to uh our investment philosophy around uh those activities.

A and I would add it's not that we don't see exceptional companies out there today that we'd love to own a I'll be careful because I I wouldn't want to say we we long term we'd be happy to own

those companies because there there's excellent companies that have excellent management teams that that uh we evaluate and I would say when you think

of the world it doesn't mean there's multiple handfuls of those type of companies but they're there but the price relative to the opportunity, the

economic prospects of that company and the related risks. Um, we're not interested in acquiring those those companies at that at that price. And

that can be a piece of them or all of them. That that doesn't mean that

them. That that doesn't mean that opportunity won't be there in the future. It's what we spend our time

future. It's what we spend our time preparing for. Uh, i.e. one being

preparing for. Uh, i.e. one being

disciplined, but two being aware of of some core opportunities we would treasure or value at the right price.

And and that really ties back to the to the to the discipline. And I you asked me personally uh my plan for for

patients for over maybe quote action.

Again, it aligns to uh I took this role and and am so fortunate to be in it and work with Vijet and others, but we do it because we we love and believe in

Bergkshire. Warren brought this great

Bergkshire. Warren brought this great commitment to to Bergkshire, a great understanding of Bergkshire and passion and and with that he wanted to create

something that was very long-term including the opportunities it would it would create. uh personally and I know

would create. uh personally and I know all of us we bring that that same passion and we fully intend to do it

consistent with how we've uh how we've done it in the past. So thank you.

Yeah. Yeah. A please I should have Thank you.

Uh you know insurance much like investing is a game that requires patience

and it is very difficult to get people to sit back and do nothing.

When I recruit people my modus operendi I tell them right up front I said I tell them your job is to say no. You will get

bombarded with deals day in and day out, but your base case is just say no. I said every now and then you will come across a deal that'll

hit you with a 2x4 and it'll be screaming money. That's when you come to

screaming money. That's when you come to me and we'll make a decision whether to do it or not.

Yeah, you know, all all kidding aside, it is very difficult to sit there and do nothing while everyone else is being

binded and dying by brokers and taken to London. Uh so I think the real test of

London. Uh so I think the real test of being successful certainly in insurance and therefore investing as well is the ability to say no.

Yes. Well said.

I think it applies to insurance and I think your earlier comment I mean it is it's so applicable across all our businesses.

Uh this it did remind me of one story and I'll just share it quickly. We uh we were uh we had acquired a company and we were still in um um having a challenging matter with how we were going to resolve

some matters. And I remember the the

some matters. And I remember the the deposition and I don't want to say it's one of my most proudest moments but it was close to it. They said, "Well, how would you describe Greg as a as a CEO

and a manager?" And they said, "Well, all he says is no."

And I think that's part of management.

You have to be ready and including investment, you have to be disciplined and ready to say no. And it and trust me, we understand that a lot of people

have this urgency to act, but you described it uh incredibly well.

Thank you.

Let's go back to Becky. Becky,

thanks Greg. This question is for and um the writer is Mindy Wasserman.

The question is how and when can you offer insurance to ships crossing the straight of Hormuz?

[laughter] I mean the short answer is depends on the price.

[laughter] Azene, I uh I like your Charlie answer.

[laughter] Um obviously some thought has gone into that because there's a lot of dynamics there.

Yeah, there's a lot of chatter, there's a lot of need. Uh fortunately there's enough capacity in the insurance world

today that would like to write that risk for no other reason but people are sitting on excess capital and they'd like to find a way to deploy that excess

capital. uh we ourselves have taken a

capital. uh we ourselves have taken a small participation in a program that's put in being put in place so as to write

insurance for the ships in the in the state of Homos. Uh we haven't written any deals as yet. It's still being fine-tuned, but if we can get our terms

in terms of the underwriting decisions and the fact that the US Navy will escort these ships, we have put a price on which we will be comfortable

underwriting that risk. But nothing's

happened as yet.

Thank you. Thanks. Thanks, Becky. Uh,

station three.

Good morning, Mr. able. My name is Josh and I'm from China. So my question is about the key investing principle staying within your circle of

competence.

I imagine you and Mr. Buffett each have a somewhat different circle of competence. So how do you plan to manage

competence. So how do you plan to manage the portfolio by established by Warren Buffett? Thank you.

Buffett? Thank you.

Thank you. Mhm. [clears throat]

Um yeah, as far as managing the existing portfolio and what's in that, um that

portfolio as you as you touched on was put together by put together by Warren, but it is a group of companies that uh

Warren understands uh thoroughly and I would be very comfortable that I understand

the businesses, the economic prospects of those businesses. So, and that's why when I outlined it in the letter, I was really trying to send the message that yes, we're very comfortable with those.

We understand it and and yes, it's a concentrated portfolio, but you know, their businesses will evolve and there's there's risks that may surface. So,

we're we'll constantly evaluate it, but it's it's it's a portfolio very very comfortable with. And, you

know, Warren Warren touched on Tim's Tim Cook's uh um amazing success with Apple, but it you know, Warren and and and Tim were recently discussing this and and

they were talking about Warren didn't invest in it because he saw it as a a technology stock. He saw what the

technology stock. He saw what the product was and how much the individual consumer valued it. And it's a remarkable perspective, but it would be

very much a similar perspective that I think many of us would apply. Would, you

know, uh maybe electricity I know a lot and I know how to make sure something gets generated and how we're going to transfer and all that, but am I really that interested in how they make the

Apple phone? I I'll be intrigued by

Apple phone? I I'll be intrigued by where they make it and some of the risks and challenges around that. But I I do fully and our team, you know, when we

talk about it uh on a more broad basis.

Listen, we're looking and saying, do we do we understand the value and what why that product has value? And it's really that value to the to the consumer. I

think the the unique opportunity we have and so fortunate is that Warren comes into the office each day. It's fortunate

that we get to discuss potential other opportunities that may be out there bringing a different set of skill sets.

But in the end, we're going to narrow pretty quickly down to what's what's the opportunity? Why why is it valued? Why

opportunity? Why why is it valued? Why

does the consumer whoever is using it the whatever industry is it it it is what's why will that company and that product

endure and then associated with that where are the risks associated with that and that and that pretty much is how

Warren approached it how how I approach it um so the uh when it comes to our existing portfolio yes we'll always be

well well aware of what we've invested in, but as far as understanding those the opportunities and risks within them, very comfortable that uh have a strong

view in that and we're comfortable where we're at. Thank you.

we're at. Thank you.

Anything there?

No. Okay,

Becky.

This question is for Greg, but I think it's important that you take it while Ajit's on stage with you so he can answer some of it, too. Uh, it comes from Zachary Phelps from Medfield, Massachusetts, who writes, "Ajet Jane

has been described by Warren as irreplaceable. He's helped build one of

irreplaceable. He's helped build one of the greatest insurance operations in history and has been the backbone of Berkshire's underwriting discipline. How

are you thinking about succession planning for Ajet and the insurance business? And how do you ensure that the

business? And how do you ensure that the underwriting culture, the insurance mode is preserved in the next generation of leaders? And Greg, I'll just add for

leaders? And Greg, I'll just add for compression's sake, I I did get questions about your succession planning, too. So maybe you can add that

planning, too. So maybe you can add that in there.

[laughter] I don't know how I'm supposed to take that. [laughter]

that. [laughter] Um, no. uh both succession obviously

Um, no. uh both succession obviously succession's an important um uh topic and I'll I'll come back to our board both relative to Ajit and I and I

touched on this earlier I mean Ajit joined Berkshire in 1986 and is the architect of our insurance business uh along with obviously war and input from

Charlie but it's a we've created a franchise that's second to none and we couldn't be more proud of it and and as it was touched on the culture and the discipline within within it is

exceptional. Now

exceptional. Now uh I found it really interesting and I I you know when Warren announced the transition last year and Ajit recalled

this uh the very first thing that happened was we left that meeting there's a lot going on and Warren said let's to to Jeep but then also myself

let's get the insurance managers together our top five along with the jeep and with Mark Hamburg and let's let's sit down and talk about the

business. Let's talk let's discuss the

business. Let's talk let's discuss the the culture and it was a remarkable opportunity for me to one expand my knowledge base on

the insurance side and I um obviously [clears throat] been working with the jeep for a number of years and had other board opportunities where I had a a a wide understanding of it but then to spend time with the sheet and our team

and and have Warren's perspectives it was great and that was literally the first action Warren took and what I could see within that group was a very

deep group that of of management experience, insurance experience and they absolutely had the same values and culture that uh that Ajit has has

highlighted. Now I think when it comes

highlighted. Now I think when it comes to culture as he as he touched on it already which is it is challenging to keep a culture where you maintain that discipline

uh because as he said in action and telling people you know take a few months off when they're used to being active is not easy if they're if they're

that type of uh underwriter or or or selling product. So that's the delicate

selling product. So that's the delicate balance. But when it when it comes to

balance. But when it when it comes to we're fortunate he's got an exceptional group that works with them and and then also operates a number of our critical

subsidiaries. They're they're deep in

subsidiaries. They're they're deep in both knowledge and talent. I would then also uh highlight our board takes the succession issues very sincere seriously

both with Ajit and myself. Uh we have a we have a plan they have a plan in place and they discuss it. So uh if Ajit were

unable to perform uh in his role today or I was unable to perform, our board knows what action uh they would take. Um

Ajit.

Yeah. Uh so in terms of the culture and the underwriting orientation which is so critical there are a few

simple rules that I've followed over the years and it's come at a cost but I think net net is still a positive but let me just lay it out in terms of how I think about

this issue.

Firstly, we have a very small number of people who actually get involved in the decision- making.

My top three leftn operation, forgetting about companies that we acquire, we have been together

for 35 plus years now and we've become friends. We and the and the other thing

friends. We and the and the other thing to minimize any kind of competition among these people and stepping on each other's toes. We have a compensation

other's toes. We have a compensation plan that gives fixed salaries, fixed compensation to the individuals as

opposed to having some complex formula that results in they get the upside and Burkshshire gets the downside. Uh I try and stay away from that as much as

possible. usually really a problem with

possible. usually really a problem with all the compensation plans I've seen.

[clears throat] Um then the other thing that is important is is people need to have experienced

uh going through a tough time and the fact that it doesn't penalize them. We

insulate them from the ups and downs of the marketplace so that they feel secure and they do the right thing and yeah so those are the elements that I

think allow us to have a long-term orientation and not get sucked into the latest fashion of the year day and just do stuff for the sake of doing

your compensation question such a a critical point.

Yeah.

Yeah. the compensation thing. Having

seen all these programs over the years, I remember having mentioned to Warren at some point in time. I said, "Win, you give me a compensation plan, I'll game it. You'll not be able to figure it out

it. You'll not be able to figure it out for years down the road." Uh, and that's the problem together with the fact that if the employees lose, they want to go

back and renegotiate the plan. And if

they win, they're happy to walk away with everything. Uh, so that's the big

with everything. Uh, so that's the big challenge.

Thank you. Thank you, Ajit. Thank you,

Becky.

We'll go to station 4.

Hello, Mr. Ael. My name is Kansas and I attend Elquin South High School in West Omaha. Mr. Abel, you may remember me

Omaha. Mr. Abel, you may remember me from last year and I'm here to question your company's business model again. It

is compromising my future and the planet's future. Mr. Ael, in your first

planet's future. Mr. Ael, in your first letter to shareholders, you wrote, "Birkshshire Hathaway avoids businesses that undermine the fabric of society,

but Birkshshire's electric utilities continue to invest in fossil fuels that are driving the climate crisis. Can you

tell me and my graduating class when Birkshshire Hathways Utilities will retire their fossil fuels, transition to renewable alternatives, and stop causing

irreparable damage to the environment and my generation's future? Thank you.

Thank you.

I I had a very uh long and extensive answer last year to the to the um question um and and it it is an

important one but I think it's one we have to recognize uh when we and we we have I'll touch on rail our rail too we

have certain companies where we very much operate now and this would be our utilities it would we are are including our our pipelines.

Um we we operate as a steward of those assets. We we operate as a steward of

assets. We we operate as a steward of those assets effectively for our states and for our our customers.

And whenever we approach resources, for example, that we may own or what we're going to build, it's very much first and foremost, we absolutely

need to comply with the con the uh current laws that are in place, including the federal laws. Um so we we know what those parameters are and as we

see federal law and state law across our many states but the federal law there there are things they do and there are things implemented to uh reduce the impact on the environment. We're very

sensitive to that and our our teams are absolutely committed to both complying and and absolutely doing it right. Um, I

would then add that if we're discussing our facilities, for example, across the river in in Iowa,

um, we we have plans on resources and when we'll um retire our our our coal units potentially and and our gas units.

That's very much driven by state policy.

It's the state will decide, i.e. through

their policy legislature and through our our regulatory processes uh how we'll operate what ass how long we operate these assets because in the

end it's that those customers that both uh bear the bear the cost and bear the risk and very much we're we are very respectful of that and as I said we're

stewards of that do we provide input into that process absolutely so for example I I know I touched on this last year. But if I look at our

Iowa utility, uh this is this changes every year because of the load growth we've discussed. But

if we look at on a on a on a 12 month 365 day period, uh 93, it'll be very close on this.

Approximately 93% of our energy came from renewable energy. That's

remarkable.

They they absolutely lead the nation and we've done that in a way where we could do it in an affordable way. But yes, we still have our carbon resources there.

We still operate our our coal plants. We

need them to deliver uh uh as I would call protection to the system. I it

stabilizes it and there's peak times we need it. But do we use them less?

need it. But do we use them less?

Absolutely. But that's a policy our state made many years ago and we provided a lot of input as I said and and we've deployed the capital to um

ensure that could be delivered. But the

reality is um state by state they'll decide what resources we'll deploy to serve the customers and they'll and

they'll also very much provide us input on when we'll retire our units. The real

challenge going forward and it's it's well beyond Iowa because I think Iowa we and and our other utilities we approach it in a very prudent way and we've got uh one i.e

prudently. We're doing it consistent with our our state policy, but want to do it in a call it a frugal way. We're

trying to we're not we're not building for just sake of building. We're trying

to do things that are are that we feel are best for our states. But but the challenge is when you talk about the hyperscalers and the data centers

uh there there's that's putting a lot of pressure on the system and there'll be a you know if you if you look at the amount of gas units purchased uh there'll be an incremental amount of

carbon units used as we go forward if that's going to be a valued if if artificial intelligence and the consumers want that uh that and that's a

valued product. It's going to put a lot

valued product. It's going to put a lot of pressure on the systems and on uh the type of assets we use and and the industry uses

anything on the insurance side because I know you've gone on the insurance side as far as uh how what do we ensure how do we approach it?

Yeah. So right now in the insurance sphere the supply is greater than the demand

and that makes it very difficult to be able to carve out a deal that rationally is good for the buyer and the seller. Uh

when supply is greater than demand then it's the seller that loses.

So because of that we haven't been active in getting involved in writing insurance for these new facilities, the data centers, the hyperscalers. Yeah.

the hyperscalers. Yeah.

Yeah.

Yeah.

But clearly there is a surge in demand and as long as supply doesn't go crazy, we will get a few days in the sun

sometime in the next few years.

Yeah. Thank you. Uh very valid question but again very very uh proud I would say literally proud because I think the one thing we've

always emphasized across our utilities across our regulated entities that would include BNSL they have to move certain product that has certain risks and dangers

around it. We are a carrier of that we

around it. We are a carrier of that we have to that's a an obligation that came with with that railroad just like our utilities. There are certain things we

utilities. There are certain things we do that are absolutely required and the key is that we do it consistent with uh what's required both federally and at

the state level and that were exceptional stewards of the underlying assets. So with that

assets. So with that uh I just we're going to move thank you and we're going to move to uh our next session but let me explain how it's

going to play out a little bit. So,

we're approaching 11:00. As we

transition, we'll we'll we'll move to a NetJets video. Again, just give you some

NetJets video. Again, just give you some uh more knowledge on netjets and Adam Johnson.

We'll then take a break, but this is the uh the the exciting part, and we're very fortunate Warren agreed to this. At

11:45, Becky and Warren will do an interview backstage.

So, basically in 45 minutes, if you take a break and then reconvene, we'll have Warren on the uh large screen. Uh Becky

is will interview him. As we take the break, there'll be a couple other activities. Um, one, you'll get a

activities. Um, one, you'll get a threeminute warning before the 11:45, so if you'd like to rejoin us, but you'll be able to see it throughout the arena,

but it'll be a again an interview from Warren. And then uh also during the

Warren. And then uh also during the break, we often did commercials during the movies and we could have incorporated into the video. We'll have

those at the 15minute mark. Basically at

11:30 the videos will the uh commercials will play. That'll be a 12minute se uh

will play. That'll be a 12minute se uh reel of our various commercials from our different companies. Be a threem minute

different companies. Be a threem minute warning and then we have the interview with Warren and then we'll recommence the third session. As we recommence that

session, we'll have a video from Katie on BNSF that allow our team to get settled in here. So, please uh enjoy your break as we go to it. And Becky and

Warren, we look forward to your interview. Thank you.

interview. Thank you.