Q4 2025 Annual Shareholder Meeting Transcript

BERKSHIRE HATHAWAY 2026 ANNUAL SHAREHOLDERS MEETING

May 3, 2026 — Omaha, Nebraska

CNBC Television (YouTube)

Greg Abel (Chairman & CEO), Ajit Jain (Vice Chairman, Insurance), Warren Buffett (Chairman Emeritus)

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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. 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 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 answer period. We'll do the traditional uh rotating between our shareholders and 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 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 section. She'll she'll narrate a video 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 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 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 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. 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. Thank you. Now, back to a great tradition. I'm going to throw the mic over to Warren.

Warren, thank you. Yeah. Yeah. it. 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 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. It was surprised all the board when I announced them last year ex 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, so it it it uh it's, you know, we're very big around here on having other people do the work and 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 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 eve

n 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 miracles of of American business management. And so anyway, thank you, 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 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 Anthem, but I wanted to uh make sure we we we had that opportunity to um see the 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. 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 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. 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 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 reputation for the firm and I will be 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 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 always start with our exist 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 1 and a.5 million sales, but the the point is we'd always love to get to 2 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 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 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 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 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 reflect any catastro catastrophic 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 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 products and forms but it's really they're bringing capital into the 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 ha

ve 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%. I'll give you a little bit of color 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 $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 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 fouryear 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 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 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 objective is that we grow it over the 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 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 driving that? A very benign environment when you think of the catastrophic environment we 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 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 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 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 saw saw an increase in in the overall premium as they they manage that underlying risk. Again, what's that mean to the industry? What's that mean to 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 risk right, but there's two other important things we really need to 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 shareholders and owners of Berkshire are Geico customers.

We want to retain all of you. We want to retain every Geico 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 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 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 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 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. 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 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 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 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 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 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 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 for Bergkshire that's the operating profit uh that came back to to BNSF associated with its underlying operations that operating margin improved b

y 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 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 yo

u 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 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 an

d 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 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 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 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 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 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 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 intell

igence 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 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 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 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 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 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 leaving from a variety of points every day. I've touched on it can be the inte

rotal 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 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 uh 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 get better at at rail, but we're going to use that framework across all of our 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 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 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 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 in energy on

e 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 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 come 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 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 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 Bergkshire Hathway Energy Group, what's the challenge? It's what I call the regulatory compact. We leave your capital, our owner's capital, Bergker'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 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 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 important challenge we've had within that we've touched on in 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 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 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 fully acknowledged where we there was causation and where we were responsible 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. 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 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 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 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 Corp, yes, we've addressed that challenge, but to get the right compact, we've worked with Wyo

ming, 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 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 group, we have our our building products group, and we have our consumer 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 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 i

s 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 uh 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 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 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. So 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 variety of other ones that are tucked into the appropriate place in other 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 Cooper. He's he's here over in the 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 Berkshire 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 those. We have Lubberol going back to 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 2nd. Very nice addition. Uh I would say they they provide they produce two core 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 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 creates a drag reduction agent that allows oil to move through the through a 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 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 industry. It touches the chemical 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 site 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 insulation, paint, carpet, a variety of 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 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 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 highlights this is actually a what we call a crossmod home.

We have it in the 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 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 our manufacturing side of our 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 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 this is a th00and 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 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 building it to. And we can now do a single manufactured home uh for just 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 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 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 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 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, 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 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 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 part of that equation is how do we redeploy that capital that comes off of 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 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, 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 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 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 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. >> 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 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, 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 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 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 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 customers. So in 1951 um Benjamin Graham um took an investment in GEICO and of course one of his students was Warren B

uffett 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 ensure millions of cars, trucks, RVs, um, campers, etc. Um, we're in all 50 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 cycles in insurance. Sometimes there's bad weather. is 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 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 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, 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 competitive market right now. um you know everybody 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. 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 that's what the Geico team is delivering for Berkshire day in and day out. Uh is a reputation of doing the right thing. Um saving customers money and just giving outstanding service. Thank you, Nancy. And to the GEICO team, thank you. We've got uh uh an exceptional leader in Nancy. And again, appreciate taking on that that senior 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 Marin

e an exceptional transaction exceptional 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 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 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 stock in the company just a simple transaction we wrote a check for 1.8 8 billion US and we got 2.5% of the stock of Tokyo Marine and Fire. 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 detail uh and normally I would be very very concerned about having open-ended strategic uh transacti

ons 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 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 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 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 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 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 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, 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 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 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 ca

pital 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 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 um uh how are we unique as a conglomerate? We live by the fact that we hate bureaucracy. We do not embrace in in in our Thank you. Yes. Ajit's the biggest fan. He reminds me 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 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 plate. Actually, excuse me. I need to take this. Someone may want to sell me 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 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 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 mo

dels 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 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 of business where prices are coming 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 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 Beck cany 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 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. 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, >> 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 AI, your team immediately went to yes, the cyber risk, which we've already 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 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 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 get a very quick view on another using technology. We'll probably look at those other 15 risks and have a strong view on 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 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. 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 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 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 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 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 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 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 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 Ry Bergkshire Hathway Energy and then in the role of the um vice chairman of of non- insurance 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 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 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 becau

se 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 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 co

mes 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 bes

t 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 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 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 constantly aware of them and evaluating 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 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 our existing portfolio, but that's that is either adding to them or or rightsizing 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 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 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 industry, their customers. Yes. Do we have still have opportunities to get 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 the risk and then are we aware of those 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 Burkshar's most 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. >> Thank you and thank you for attending your ninth shareholder meeting. Um 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 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.

And and I would add it's not that we don't see exceptional companies out there today that we'd love to own a and 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 opportunity won't be there in the future. It's what we spend our time 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 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 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 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 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 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? >> I mean the short answer is depends on the price. Azene, I uh I like your Charlie answer. 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 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 be

ing 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. Ael. 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 the portfolio by established by Warren Buffett? Thank you. >> Thank you. Mhm. >> 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 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 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 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. >> 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 the greatest insurance operations in history and has been the backbone of Berkshire's underwriting discipline. How are you thinking about succession plan

ning for Ajet and the insurance 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 compression's sake, I I did get questions about your succession planning, too. So maybe you can add that in there. >> I don't know how I'm supposed to take that. 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 to

uched 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 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 ha

ppened 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 the culture and it was a remarkable opportunity for me to one expand my knowledge base on the insurance side and I um obviously 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 to culture Ajit 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 or selling product. So, that's the delicate 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 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. 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 to minimize any kind of competition among these people and stepping on each 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 all the compensation plans I've seen. 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, Warren, you give me a compensation plan, I'll game 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 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 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 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 we have certain companies where we very much operate now and this would be our utilities.

it would be our our including our our pipelines. Um we we operate as a steward of those 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? 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 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. >> 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 have to that's a an obligation that came with with that railroad just like our 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 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 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 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 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 reel of our various commercials from our different companies.

Be a three 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. Welcome back. I hope you enjoyed the break. Uh Becky Warren, thank you for that exceptional interview. Appreciate that. Katie and Adam, great to have you on stage.

I would note both the videos were um extremely well done in that it gives us a great understanding of your businesses but also you as leaders and I'm just going to start with a question for each of you. Um and then we'll go to the uh back to the question and answer. I think Katie you well I know you did you heard me speaking earlier. Um, I talked to our owners and and shareholders around our operating performance and where we are. Highlighted we were in fifth of sixth last year. We've now moved to fourth and and we need to see we and we also talked about needing significant improvement, a step change.

But the one thing I didn't really touch on is I started talking about the the the getting to that next level. But as you touched on, you have 35,000 employees and to move the organization to look externally and recognize where do we go? How do you take on that challenge? >> Yeah, thank you, Greg. And first of all, thank you for the opportunity to speak today and talk about our great company. It's a pleasure to do that, Greg. So, thank you. You know, we absolutely recognize that it's important for us to run an efficient operation, to have a competitive cost structure, and to continue to further close the gap between us and our competitors.

You know, we have an exceptional leadership team in place that understands the importance of aligning the entire organization, as you said, Greg, the 35,000 men and women of BNSF, aligning them around that operational excellence. You saw that we made progress, as Greg said, in 2025. We continued to make progress in the first quarter of 2026, but we know that we have more work to be done to drive that operational excellence across all areas of our company. Thank you, Kitty. And then Adam, when I was uh discussing your new role and thank you for taking on that role and and as you and and also retaining your role at NetJets as the CEO there.

So, uh, a lot on your plate and and all of us here appreciate that. Um, but it's early going. You've been in the role since December as the president of consumer uh products and then uh service and retailing. What what are your observations as your your early observations uh across the 32 companies and how are you approaching that? >> Yeah. and talking to the different CEOs. I um if you give me just one second before I answer, I just want to make just one brief comment. Uh really to both Warren and and Greg, um I have been CEO of MedJets for the last 10 years, but I I've been with NedJets.

This is my 30th year there. So only at Berkshire could you feel like the new kid on the block after being here for 30 years. But um you know, Warren has taught us a lot. Charlie's taught us a lot. Greg's taught me a lot. Um, one of the things they that they've said over and over is is that hey, bad news takes the elevator and good news takes the stairs. And I really understood that many many years ago and until I became CEO, I found myself uh on the elevator a few times. And what they never told me was what happens after you get on that elevator.

And I just want to point out as the CEO for the last 10 years, there's been many times I've had to make calls on things. We run a big business and I simply want to say that what happens after that is you have the most unconditional support and I echo uh all the CEOs that that are in this portfolio. So I just want to say thank you for that because it's not easy delivering sometimes good or bad news but uh it's been phenomenal support. Um, as it relates to the actual the other 31 CEOs in our bucket, um, I have to sort of start with conversation with NetJets because people have been asking me a lot in the last 5 months.

So, you're still CEO of NetJets, but how are you going to take on this other role and I I think the journey starts with with the team at NetJet? So, many of them are here and they're they're incredible. I spent a lot a lot of time over the last 10 plus years with them. I sat up in that stage in the arena in May of 2010 and it was a hard thing to hear but it was the truth and Warren talked about netjets and stated that it was his toughest mistake that year and but for the backing of Berkshire tha

t we would have been bankrupt and I don't like repeating those words and probably shouldn't do it in front of an entire room but it's an important pause because then you have two choices what are you going to go go do and so the team that's sitting with me today and many people back home. Um, I do think we have a wonderful company as Warren talked about with Charlie in 2023 and I just want to say to them, uh, thank you because it's been a rough road to do that and we've accomplished a lot which gets me in to answer your question and and I, you know, I be honest with you.

So, thank God I have NetJets because I was able to fly around and see a lot of these companies. Unfortunately, all 31 companies are not based out of Columbus, Ohio. So, I've been on our airplanes a lot. Um, and if I'm honest, I was a little concerned about it. Uh, many of the CEOs had reported directly to Warren. Um, all of them reported to Bergkshire and then here comes this guy, you know, that they're now going to be uh, working with. And I will tell you, one of the things that that struck me is how um, wise the CEOs are.

They have the energy, intelligence, integrity that Warren always talks about. But I say wise because of my concerns were quickly allayed when I started talking to them in the sense that they they've been listening. I know many in this room don't know the names of those 31 other CEOs, but they know you and they've been listening. Um they absolutely understand uh the playbook that is the uh the ownership manual. By the way, this is the almost today the 30th anniversary. Warren wrote the owner's manual and in that was sort of our business bible on what we needed to do and I was really pleased.

Every one of our CEOs understands that they've been living that um and that's going to make the interaction uh much easier for me. So uh I feel really good. I feel really good about the form of the CEOs that we have and I know that they have ingrained in them the culture part of the culture certainly is the ownership thinking but the stewardship that that is talked about we feel a massive and deep responsibility to carry on the stewardship and the legacy of Charlie and and Warren and and work really hard uh for Greg and his team.

So uh I feel good about it. >> Great. Well, we're very fortunate to have Katie and Adam in these leadership roles. Again, it was a uh very purposeful to have them on stage. We want them to have the opportunity to engage with our owners, our shareholders, and we really do look forward to the uh the question. So, thank you for joining us on stage again. Yeah, thank you Becky again. Great to have you back. Thank you for that interview. And uh if you'd like to start, thank you. >> Okay. Thanks, Greg.

Uh, this question comes from Chris Frerieded in Philadelphia, Pennsylvania, who wants to know, "How has the current geopolitical situation in the Middle East impacted Berkshire's subsidiaries?" >> Sure. Um, I'll touch on it and then I'll I'll make sure because it it impacts really in a variety of ways all our businesses, but um, what I'm most proud of are our businesses. uh we operate these businesses for the long run just like we do for obviously for our shareholders. could take a long-term approach.

There there's not many days and I used to joke when I more had Adam's role. There wasn't a day I woke up where there the phone the phone wasn't ringing with good news. You know that phone rang. You knew you're going to have a bit of a challenge and we have that portfolio but but that's okay. We'd be talking and we always worked our way through it and we have a team that would lean in and we'd come through and it could be anything. And we never tried to use that as a reason we couldn't do something or get to the to the right place.

And what I've seen associated with the uh obviously the the war in Iran and and the and the various conflicts in the Middle East is again a team that is very much taking the approach that that's the situation we're in. We can manage our business and we we very much quickly move to what's the best solution for our customers. how can we deliver and continue to deliver what we've done to them and what's their expectations around that and and our teams will work incredibly hard to come up with with solutions.

Um I I touched on LSBI, the drag reduction agent on the pipeline company. Um they don't usually sell a lot of product into the Middle East as far as moving. It's more a domestic based product for Canada and the US. When you think of a drag reduction agent on pipelines, literally being uh cargo planes of that that uh chemical being moved in the Middle East to help free up supply and and i.e. remove that uh some of that constraint. So there there's so many things that go on when they start trying to figure out how to solve uh the challenge.

Now what I would say is it doesn't mean there's not immediate impacts to our businesses. If you think of companies in America around the globe, petroleum is and ga natural gas matter is such a fundamental in input to so many products. And the reality is if you think I touched on our chemical group their their input is uh generally a petroleum product and the output is the the various products they produce. obviously that that are byproducts of that, but their input costs have effectively doubled in a very short period of time.

>> But again, we'll manage through that and that's the the beauty of being part of Bergkshire. They know first we'll take care of our customer. We'll find the right answer. We'll manage the challenges and the value creation will be there in the end. So there's some short-term pressure on our chemical businesses. If you looked at their first quarter profits individually, they would be down because or flat to down because they've got some challenges. For example, on the on the input side, but they're delivering what the customer needs and that rebalances over a period of time where our prices will move up pursuant to our contracts.

We'll be treated fairly in the end in that they'll reset and then may unwind a little bit slower. But the point is um unfortunate situation and and we've got you know men of service and women of service over there and and putting themselves at risk and and and and and that in itself is uh scary because a lot of our employees are are have family involved. But you know as far as running our businesses, it's really heads down. We'll get through this and we'll keep operating everything for the long run.

And and again, it includes how we'll operate our assets. We're not going to put the asset at risk to try to get to a short-term outcome because a petroleum prices higher or petrol petroleum prices are higher. It's very much continuing to take that that long-term perspective. Katie, um obviously it it can impact demand and what's being brought in on the on the coast. Are you seeing that or what else are your observations? Yeah, it's interesting and and Warren has said this in the past before. You know, the railroad is a really good reflection of what's happening in the industrial and the consumer economies because our loadings really cut across all the various commodities.

You know, we touch agricultural products, we touch coal, the industrial commodities like cement and steel and aggregates. You know, certainly our interotal business, which is such a big part of our business, reflects what's going on with the consumer. And so we're seeing the impact from the conflict in the Middle East in a couple of different ways. First of all, I would say that if you look across our various commodities, it's created an opportunity for some of those commodities just because of the disruption in the supply chain.

In addition to that, you know, we see commodities like aggregates and steel, things like that that that are that are favorable and we're seeing an increase in those. But then some of the commodity areas that use energy in the manufacturing of those commodities are certainly being impacted by the increasing fuel prices. The largest segment of our business, as I mentioned, is interotal. And so as fuel prices increase, our interotal business becomes more competitive. And so we're seeing an increase there relative to what's happening in the Middle East.

I would say in general though as we think about it if fuel prices stay too high for too long it has an impact on consumer demand and when that happens that cuts across all of our businesses >> and have you started to see that yet that obviously when you think of I touched on it being an input to many of our companies but really globally it's an input to so many things and as that price pressure pressure pressure moves up obviously the the demand side is challenged are Are you seeing that yet? >> Yeah, we're seeing some uh we are starting to see that impact some of the businesses.

I would also say, Greg, as we talked to some of our our large interotal customers, what they are telling us, some of the big retailers are the customers are having to make choices now. So, as fuel prices go up, they make choices about what they're buying. And so that's where I get back to if if it is a prolonged higher fuel price environment, I do do believe that we will see that customer impact across our businesses. >> Thank you, Adam. Uh across your businesses, um what are what are you seeing

? What are you what are you feeling? Yeah, I mean certainly, you know, when you see um when you when you see the increases that have occurred in the in the instant spikes in some cases that occurred certainly on the consumer product side, on the real uh retail side, um it it has affected some of the demand on that side. I would um I would also tell you that we have also faced multiple times at NetJets with a hundred you know dollars a gallon or $100 a barrel pricing. We see those spikes. We see the demand.

haven't seen it on the net side. We went from uh really the last two years from about five to 540 a gallon. We're seeing spikes up to seven a gallon. I would tell you if I see that kind of sitting at 7 and a quart 750 a gallon, then you'll see it start impacting even on the higher end side on the net side. So, we're feeling it. Um it's, you know, it's not the first time we've had to deal with this. you know, we're prepared to deal with those things and make adjustments where we need to, but it certainly is affecting, I would say, some of the retail businesses and some of the consumer product businesses.

>> Great. Thank you, Adam, and thank you, Becky, for the question. We'll now move to station five. >> Good afternoon, Mjab Singh from MountainHouse, California. Warren has spoken very highly of of both you, Greg and Katie. So, I'm grateful to have you both leading our company. And I'd like to ask each of you a question. Greg, as you know, the Berkshire system relies on decentralization. Each manager runs their own subsidiary. As CEO, which operating units do you think need more oversight and how will you handle a manager who underperforms? And Katie, as Greg highlighted, BNSF's profitability lags its competitors.

With eventual technology advancements and autonomous driving, trucking costs will continue to drop. How will B and NSF maintain its competitive advantage from competitors and new new technology? >> Great. Thank you. So associated with the letter I wrote to all of you as owners, I highlighted some important um as I've touched on values. One of them was our decentralized model. I also touched on risk discipline, capital allocation and when we think of our businesses, we have an exceptional group of leaders and businesses and yes, they do own their businesses as Katie touched on it in her video as Adam's alluded to it and talked about it.

Um there is a great deal of ownership in each of our across each of our subsidiaries and that's absolutely how we'll continue to operate and see it as a as an extremely effective model that they're closest to their customers. They understand what needs to be done and if they think like an owner we get very good outcomes across the group of companies. I I would highlight though that with a decentralized model we we do not um uh take responsibility and I was one of those I ran BHE it's it's a grea

t set of responsibilities where Bergkshire Hathway Energy shouldn't be abbreviating sorry but when I ran it that that autonomy meant you meant you embraced it and there was a great amount of uh uh accountability that came with it and sheer pride that you wanted to do things right. We've got a clear set of uh when we talk about integrity and how I started it, we have a lot of expectations and that's where both on the uh on the integrity how they approach managing their business and and servicing

their customers and I've said there's a lot of external factors we we we can we can observe but our primary engagement is with their are they managing the risk and risk and foremost do they do they see themselves as that chief risk officer you've heard us discuss many times are they good allocators of capital with the capital they have there because even capital you have to manage your operating expense as well I view everything you know that that when we're spending money on a uh it may be a ca

pital expenditure it can be an operating expenditure you're deploying our our our shareholders capital are are we doing that well and we focus on that so that's part of that equation of allocation Apple. And the reality is if if we're seeing um a situation where we're underperforming or we're or we're seeing some potentially poor decisions, that's where we engage and have a discussion. And usually it's relative, and I touched a bit on this with Katie, it's relative to what we see externally and just really trying to understand um where our performance gaps are and and then it quickly moves to how and and we have we don't have the people at corporate to go in and quote help.

So, it's not like we send in an army, but there's generally some people within our subsidiaries or maybe someone we know that could help them with that with that performance gap because we do treasure um continuous improvement and strongly, as you've heard, believe in operational excellence and there's, as I've said, there's room for us to to get better and that's how we would approach the situations where we see the gap and need to close it. Katie, maybe you can probably touch on both. Um, absolutely.

So, thank you for the question and as I said, we absolutely know that it's critically important that we continue to drive an efficient operation, that we continue to have a competitive cost structure, and that we continue to close the gap with our competitor relative to our profitability. There's a couple of specific things that we're working on and it's really about operationalizing the improvement that we saw in two two in 2025 into the first quarter of 2026 and making sure that we're really institutionalizing that.

So the first thing that we really focused on in 2025 was we knew that we needed to improve our single car operational efficiency. And when I say single car unit operational efficiency, we run a couple of different networks. We run our intermoal network. We run our agricultural and our coal network, our bulk networks. And then the balance of it is what we call our carload network or our single car network. And that's where we we have non-unit train. It takes a a lot of operational focus. It takes a a lot of work effort and it consumes a lot of resources.

And so anything you do to improve that single car network is good for all of your customers. It frees up resources. It creates capacity. It allows you to handle the same amount of volume if not more with fewer assets. And that translates through then to the improvement that you're seeing in the profitability. An example of that is in in the first quarter of this year, we handled more volume than we did in the first quarter of last year, but we did it with 260 fewer locomotives. That translates into a more consistent service product for our customers and it also translates into better financial results, which is what you saw in the first quarter of 2026.

So we we're spending a lot of time ensuring that we have operational excellence not in all not in just all those other networks but in the network that frees up resources and drives improvement and operational excellence for all of our customers. The second area and you heard Greg talk about this earlier was around our technological transformation. We really believe that in addition to driving that operational discipline that you saw in 2025 and into 2026 that working with the the new BNSF tech organization to drive that next step level of improvement.

And so you you saw units dwell in our terminals less time that translated through to the financial results that I talked about. You saw velocity improve as well. And so how do we leverage technology then to take the next step level improvement? So I'm excited about what we're doing there. We're literally attracting data scientists, operations research folks, and we're putting them alongside of our operators in our network operations center. We're looking at things like uh digital twins, which gives us the opportunity to model how we run the railroad before we actually run the railroad.

We're looking at opportunities to do predictive ETAs for our customers, which allows our customers to have a better product. It allows us to turn the assets faster. And then last, what I would say is that we're just it's good oldfashioned going to work on on attacking the largest structural cost buckets. We had a record for the first quarter in our fuel efficiency. That's the kind of thing we want to do because it makes us competitive with trucks. It is good for the environment and it's good for our financials.

So those are the things we're doing to close the gap relative to profitability. Now your question about competing with trucks. I would say a couple of things with that. First of all, we have the largest interotal franchise of all of the railroads. We have a unique relationship with JB Hunt and we have been extremely successful in converting over the road freight. We've done more of that than anybody. So, we know how to compete with trucks. But your question about technology is a good one. And I would say that we in the past have invested in in a system called positive train control, which is a safety overlay that allows us to operate the railroad efficiently.

As you know, we operate in a closed circuit. And so we have the ability to your point ultimately to run the train with fewer people than we operate with today. And in fact if you go way back in time we used to operate the trains with five people on the train. Now we're down to two people on most of our trains. So the technology will continue just like most industries will continue to evolve and we're continuing to look at that as well. The last point I would say with that though is that we also have to be allowed to innovate and so we need regulation that supports the ability for railroads to be able to compete with trucks.

As you said, we know that there are trucks out there running today in our state in Texas along I45. We just there was just a pilot with autonomous trucks. what we have to be able to do is to be able to con compete with that and to be able to innovate. And so we're going to need regulations that allow the railroads to be able to do that. So that's how I think about competing, ensuring that we're closing the gap as well as maintaining our competitive advantage with trucks. >> Thank you, Katie. Ada

m on that on that point in Katie's point um you know you came literally Adam had left for a very brief stint 10 10 years ago uh and and and had a very senior role in in NetJets and had been effectively been recruited to be a CEO of another business that was going public and we were fortunate enough to uh convince Adam to come back but he came back to a challenging situation the asset was underperforming we had billions of dollars of debt I back to ourselves to the parent company but it was debt

that had been incurred and some real challenges um when when you think about how we address underperformance and how do we get a business back on track um may maybe you just want to touch on that period of time and and and that bringing the business back and and and how how you achieved that. Uh yeah. Well, I one I will tell you um you know the one of the I came back on June 1st of 2015 and that Monday Monday afternoon and and many of the team that's up here today we got in a room and I asked a question about how many people really understand sort of the bookends of our business.

Uh NetJets is complicated. We're ad hoc. We're unscheduled. We fly to thousands of airports. Commercial airlines will fly to 50 to 100 airports. uh we fly to 150 countries around so it's a very complicated business and I asked a question to the team um how many people do you think really understand the book ends of our business and I didn't like the answer I won't tell you what the answer was but it was too few and it sort of started there and what we did was we we really said you know to build

this culture the way we want it if I understand what you're doing you understand what I'm doing at at deeper and wider levels we're going to do good things together so it sort of started on that Monday afternoon and when we we started building that back Um, I will tell you it was also a reinforcement from probably from Greg. I remember my first board meeting prep and I was excited and we were starting to kind of move and and I was talking about uh growth and we're going to get this right. We're going to grow and Greg pulled me aside in a very kind way and he said, "Why don't you pay $1 back to Warren and work on getting your debt down?" That was a teaching lesson.

Uh, I took that to heart. I heard it clearly and I actually already knew that. And so we just started really putting our blinders on and we said safety and service, safety and service. Warren bought NetJets after becoming customer in 1995. Bought NetAhats uh in 1998 and he did a video for us that we still use and he said I want safety and I want service and we've been really focused on making sure everybody stays in that alleyway. That in large part plus a lot of hard work um is why we we're able to pay our debt back.

um we're able to pay uh cash back to Bergkshire Hathaway and move our way, as I said in the video, out of the other comm and be first in the service business and I'm proud of that. So, >> great. >> Y >> thank you, Adam. Thank you, Katie. >> Becky. >> Okay, this kind this comes from Brian Simpkins in San Diego, California. The question is, has Berkshire Hathaway considered seeking any tariff relief or reimbursement programs for its whollyowned operating businesses exposed to import costs? And how

significant is that impact across the portfolio? Uh let me let me start with the impact across our portfolio because it's it it's very close to uh discussing the the situation in the Middle East in that yes there were there was the the tariffs and each business may have fallen under a different uh tariff or what they were importing and and we'd gone through it once already in the in the first term of the administ administration and there there were lessons lesons learned there. So we were both better better prepared in how to manage through it and had realigned a certain amount of our our input.

So it you know that was valuable. The second thing was it's as I described with the with the conflict. It was heads down and we'll just manage ourselves through it. You know listen there there's some cost pressures here. We'll figure out how we're going to continue to serve the customer. we'll work through on on delivering what they need. And there has to be some reasonable expectations on the other side that we'd recover those tears from our from through through the uh either through a direct contract with them or through the product we're creating and and and that was a good approach in that we just um held our course and wanted to continue to service them.

So they yes there is financial impacts but our team did a a really remarkable job of addressing it and and really minimizing the impact any of our businesses um as far as recovering it. Um that would definitely be at our operating level they would be making such a decision. But but overall right now our perspective has been there's a there's a lot to sort out when it comes to refunds. uh what we're eligible for and and so at this point in time, we're very much taking an approach that um uh if it's appropriate, our teams will evaluate it and and and again, it'll be a discussion with our customers and in with a number of them.

So, it it's it's an operating subsidiary decision, but we're not naive to it and that we're encouraging them. It's there's a lot to be sorted out at this moment in time and and and we're not pursuing them. that doesn't mean we may not have a a subsidiary and I'll I'll look to our our team on stage here that may be uh pursuing one or seeking one. Uh Katie, anything on >> uh not as far as the the reimbursement, but I would say just as far as the impact of the tariffs and what we're seeing with our customers, um you know, I I would say that in early 2025, we saw several of our our customers pulling forward shipments in advance in advance of the tariffs.

And um you know we we certainly saw our volumes ramp up at the beginning of 2025 because people were were trying to get ahead of the implementation of the tariffs. So we did see uh you know an increase in volumes through early 2025. That really stabilized then in the back part of 2025 and then into 2026. I would say that our customers have have really adapted to the tariffs and adjusted to the tariffs. With that said, it it does cause some uncertainty and I think where we see that really showing

up is, you know, it's very difficult for our customers from a planning perspective and I I think it's keeping some capital on the sidelines as far as investment in manufacturing facilities and it's just really the uncertainty of the tariffs that that really is what we're seeing reflected with our customers. >> Thank you, Adam. >> Yeah, I mean I would echo both those points. one um I would probably use uh you know Berkshire Hathaway Auto Automotive Jeff Rocker who is an excellent you know CEO of

that division um you know his the new and used sales are you know slightly down in in Q1 of this year compared to last year and part of that is this is sort of that same effect from uh the tariff buying that occurred a year ago to to to today. Um, I had to smile because we were collecting. Okay, it's just it's changed every day as we know and you manage through that and just understanding the tariff bouncing ball was, you know, a job in itself. But I I had to smile because I was actually calling our our CEOs just to get their take on it.

And the 32 companies in the portfolio, consumer product services and retail, it's a stat that I love. They've been actually been around on average 88 years and only 0.5% of American businesses have been around more than 80 years. Our average in that sector from a founding standpoint is 88 years. And several of the uh five of the companies specifically companies that were founded in the 1800s. And when I called those CEOs, they said we've been dealing with tariffs for a hundred years, you know, kind of thing.

And so not being dismissive at all of tariffs. The point is I look at the whole tariff conversation as you're always going to have a curveball. If I think of the CEOs in the last, you know, seven, eight years, we've had to deal with a global pandemic, the highest inflation 40 years, and now this thing, uh, you know, the bouncing ball of tariffs. So, the businesses have done an excellent job of managing through that. Um, I wouldn't put it in the fun department of the things we have to deal with, but we're learning it and, um, I think we're in a pretty decent spot.

um moving forward. So, >> thank you, Adam. We'll move to station six. >> Good afternoon. My name is Amir Rahani from Vancouver, Canada. Uh thank you for hosting us and thanks to everyone at headquarters that makes this weekend possible. Um Bergkshire's investments in the five Japanese trading houses was passive. good businesses at good prices financed by cheap yen. Uh your Tokyo Marine deal is fundamentally different. A 10-year joint M&A and reinsurance partnership. That's a level of operational integration Bergkshire has never done internationally.

What does that look like in practice? And does it signal a broader shift toward active international partnerships under your leadership? And to put you on the spot, Greg, Canada versus USA and hockey. Who are you cheering for? Sorry. Sorry. >> Now I'm in trouble. Um, yeah. AI did an exceptional job of of discussing Tokyo Marine and and I'll I'll touch on it, but um what and I and I teed it up a bit in saying it is a strategic relationship less than a uh financial transaction. Yes, we like the 2 and a half% investment into Tokyo Marine and and that will be a long-term uh um investment.

It's the type of investment we put with our other five investments in in Japan. We really think of those as forever because it goes beyond the investment and it's very much around the relationships we want to build there and you'll continue to see that. Um Azid expanded on the underwriting opportunity that we do jointly participate in their their their risk and rewards associated with effectively also 2 and a half% of their book there. now and and that's again part of the uh financial transaction but there's also great deal of faith there.

We we as Ajit said and really Ajit says and I take his word for that but it's you know it's an exceptional company and and and their performance has been remarkable. So we're we're thrilled to have them. And then the third thing that was touched on was the the partnership highlighted a variety of things we how we would like the relationship to develop and that's not defined yet. So we'll continue to let that take its proper form. They're the type of partner that has the same culture, same values as us.

So there's little question it's going to be exceptional for many years to come. Uh but as far as pursuing an absolute acquisition in in in insurance or something like that, that'll evolve with time and that would be obviously the discussions Ajit and the senior team at Tokyo Marine would be having and and if such an opportunity materializes we'd be thrilled with it. Now to the really tough question, Canada versus US in hockey. Um hm I I did find a way and it's it can cause a lot of angst in my own family.

So, um, I remember waking up that morning and Canada was playing the the men, but I'd already decided a little bit earlier that, uh, when it came to the Canadian men versus the US men, Conor McDavid plays for Edmonton. And, uh, therefore, I was going to cheer because being from Edmonton, I would I would cheer for the Canadian men's team. And I've always followed the US women and I love what a program the US hockey and I I love USA hockey and how they approach the coaching and the and the development of the youth and I think they've done a great job there.

So I chose to cheer for the US women and it was the the perfect outcome for me and so little selfish in finding that type of outcome. >> I I will say Greg Greg and I had an Oilers stars bet last year and >> Yes. True. And we the losing person had to wear the jersey of the other and I now own Oilers gear. >> Yeah, Katie owns some Oilers jersey and and unfortunately this year neither of us get to have that bet. >> They're both on the sidelines very quickly, but um uh thank you for that question. Uh Becky, >> this question comes from a shareholder who didn't want to be identified, but it's a variation of a question that I got from several shareholders.

Is there any future circumstance that you could inver envision Berkshire divesting businesses or being broken up? If so, what are those circumstances? The shareholder also writes, note, I don't want this to happen, but it's a commonly discussed. It's commonly discussed among followers of the company. >> Yes. So the so um when we think of the question and I think it's a good one because uh we've always highlighted there's certain circumstances that we may not be the best owner of a business. We've touched on if there's labor issues that we cannot resolve.

I would uh take it to the point then further in my letter I touched on if there's reputational risks that we're not willing to to ever have our owners or shareholders or Berkshire experience and that we have to maybe the business has evolved the customers have evolved but if we're if there's that type of situation um then then it that company does not belong in the in the Birkshire family and and it may be it may be a fine business that can be owned by someone else, but it may mean we don't own it.

Um, I would then take it a little bit further. I touched on um a couple things or or one other thing before I jump to that would be we've often talked that if we have a business that is unsustainable it and and and no longer generating uh operating cash for our shareholders, we have to make some serious decisions around that. If there's someone else who could operate it and make it be more successful both for the customer and for uh our employees then we have to consider that otherwise that business is unfortunately in a place where uh we can't just fund it and experience losses.

We would wind it down over a period of time but we'd look for a better solution for our customers employees. So that's always been the ca well that that at least from my perspective has always been the case and how we'll continue to do it. I would say we're taking it uh we take the the obligation and in making sure capital's properly deployed obviously very seriously. I touched on the regulatoratory compacted energy and that that has to exist and we have to be if we have capital deployed there we have to get a fair return.

we have a a situation where we've actually announced we're selling a portion of Pacific Corp, our our Washington state utility. Um, and and that's really a function of the fact that we have a multi-state process in Pacific Corp. There's six different states and each each customer is impacted in different ways. And I've already said there's we we very much focus on what's the needs of our each state and how can we best service them. And unfortunately we were in a situation in Washington where they clearly had policy that they wanted from Pacific Corp.

And it was having a significant impact on the costs of our other states. And as much as we would have liked to seen what we call a multi-state compact, i.e. how do they balance all that? it wasn't occurring and our other states were bearing costs that they felt were not theirs that were being imposed by another state. So we consciously said this isn't working for the six states and the one state who had very specific policies and wanted them implemented uh we chose to exit. We found a very good purchaser uh who very much supported and and could implement what was required at that state.

So there we there we have evolved and it's a situation where it just didn't make make sense for Bergkshire to be an owner of that asset or our owners to be an owner of that asset and it'll be I believe a better outcome for the state and for their customers. So there are those situations where we would uh we would divest and we we we will always approach things that when we buy something it's forever. When we acquire a a utility we tell the regulators it's forever. But it has to be a relationship that works and if it's broken we'll find a better path both for the company, the employees, customers and and obviously for for Birkshire.

Yeah, Kate. Yeah, >> Greg, there's a second part of that question though that gets at is there is there a point where some of the parts or something is there a point where it doesn't make sense for Berkshire to be a conglomerate where you would break up the company? >> Yeah. So, to the second part of the question, um, absolutely not. We we I touched on it early. We we we are a conglomerate. Um, but we are an efficient conglomerate. We we don't have layers of management. We don't have a bunch of committees telling our businesses how to run, how they're going to um you know manage their customer relationships.

We try to at the odd time create frameworks so there's value shared across the businesses so they're aware of what our other businesses are doing and and technologies. That's one of them. We like our framework now. We think it's it it it's become it's very effective across three of our businesses. So of course we want them to understand it but we don't create layers. Uh I remember when Adam took on the role I nicely said you know there there there'll be no corporate group supporting you either in Omaha or amongst your own team.

We we he's got folks in NetJets and they always step up and take more responsibility including when I was uh in that role or in the the the vice chairman role. So we but the one thing we don't do is create layers of bureaucracy or uh other decision trees around it and I think so many conglomerates end up with with layers and layers of costs that don't add value in in in to the to the overall corporation. I'm I'm even careful when I talk about our metals group and our chemicals group because because they're a group in in call it maybe uh in my vision i.e.

they I I see similar opportunities. I want them to work together but they don't have a corporate group on top of them or anybody directing them on what to do. They find ways to work together because they have a lot of the can have the same challenges can have the same customers. So we see our conglomerate structure working without the bureaucracy and and and and bloated costs. We see a great opportunity to continue to move capital across those different groups in a very taxefficient way. Other people can't say I want to move capital um BNSF's a great example.

Um yes they they have a strong operating uh results and they they generate they're in a a cycle in their their uh uh business cycle right now where there's certain amount of capital we have to deploy into it but we also receive substantial dividends from BNSF on an annual basis. we can take that capital and decide is it needed in a different operating business or do we see opportunities in equities and if we don't see those opportunities we're happy to not happy but we understand the logical hom

e right now is US treasuries we we think that's a good asset we prefer to see that deployed in a different fashion yes when the opportunity presents itself but it allows us to really move that capital across the group So I actually uh the answer to the conglomerate is uh yes, we understand we're one. We see it operates very effectively and we do not see ourselves uh divesting of subsidiaries for that reason or ever breaking off a group. Thank you. >> Okay. Uh, station station 7. >> Hi, Greg. >> Hi.

>> Hi, Greg. Katie and Adam. >> My name is Lori Wong. I'm here from Chundu, China. On behalf of myself and my investment partner, Shui. Thank you very much for this opportunity and congratulations, Greg, on surviving your first year as CEO. >> Thank you. >> I'm sure the sea feels a bit warmer than it used to be. As you lead Berkshire into this new chapter, what would you say is the most significant evolution in your personal framework for assessing cash flow certainty and margin of safety compared to warrants? And specifically, are you more inclined towards technology companies that exhibits the same robust cash flows? Thank you for continuing the legacy of Mr.

Warren Buffett and Mr. Charlie Mer. >> Thank you. So, uh I I think I'll start with the important part of that question. I mean, as far as how Burk how Warren thought about it, how Bergkshire thought around approaching investments, quote, our margin of safety around investments and how we how we approach it. Um we're we're absolutely aligned there and I and and that starts with our culture and values and how we've approached everything over the years. Um so if I go back to looking at opportunities and energy and it may have been an acquisition or we're deploying significant capital, it quickly went to yes, we understood the opportunity but Warren and and I'd want to have this conversation.

um where's the risk and do we really understand the risk associated with this and uh I have a I have a really great example is that we were acquiring NV Energy in the um uh had the opportunity to acquire it and Warren was actually coming back from China and and had been over there and I was waiting for him to arrive and land in Seattle and give him an update that we had this potential opportunity And I very much knew the occ the uh the opportunity and what the uh the value proposition was. I'd clearly had three significant risks in my mind that um was anxious to discuss with Warren and in in Warren landed and I had a a short presentation said I'm asking him to just give me a call.

It was literally one page but just to really trigger it. can we have this conversation? And the immediate conversation we had was, yeah, the economics, you'll you couldn't agree more, understood them, went right to the biggest risk. And I was just getting ready to walk him through the two or three risks I'd seen and and wanted to make sure we understood it and were comfortable and wanted his input. And the risk was fundamentally rooftop solar and how would it disrupt that business and disrupt our customer.

We discussed it. We understood it was a a challenge. I remember saying to Warren, well, that's part of the reason I'm sure we're we have this opportunity to acquire this public company that there is certain amount of risk and the public and the board and the and the management team had decided uh uh that they they didn't see the same opportunity we did. But Warren went right to it. It was all around the risk and and that risk did surface 12 months later, 18 months. We managed our way through it. Um, our team did a great job.

But so I don't see there being incremental margins or we think of risk differently. We think of them as in the Bergkshire mindset that the the we're going to understand the economic prospects of of this opportunity. And as I said, we really go to that 10-year window potentially and say, what's the business look like 10 years from now? And that and is there enough safety margin 10 years from now? is is what we see it the outcome do do we see an outcome and if we don't understand what that looks l

ike 10 years from now I know Warren would would say this I would say it then we don't do it there's no safety margin or maybe we can um adjust some numbers or there'll be synergies or something of that like we have to have a vision of what that's going to feel like and look like and that and that really is the the how how we approach it now touching on techn technology companies. Um, we are not going to ever say, geez, this is a a specific sector for us or we need to be in it. If there's somethi

ng in the technology sector or in that group of companies and we understand one of those companies to understand again what their uh opportunities are and what we view as the economic prospects for it and we have an understanding of what those risks are. that doesn't preclude us just because it's in a technology sector or that but it would start with back to the fundamentals of do we understand it do we both the opportunities and the risks and and then is it and then is it uh fairly valued relative to that and that's all that's always going to be the approach.

So thank you for your excellent question. Now, uh, Becky, if this is okay, uh, we're going to and and so please pick, uh, your toughest question, but um, we're we're beyond 1:00 now. This will be our last question for today. So, we look forward to it and, uh, and then I'll I'll have some, uh, conclusionary thoughts and comments. But, uh, thank you, Becky. Uh this question comes from Joseph Matas and he said Warren had Charlie's partnership for most of his tenure as CEO which naturally reduce the risk of subpar investment decisions.

Who will serve as the Charlie for Greg and there and there they're a reason why they're in the rafters together. That was an incredible partnership and and one that uh you know you you can't replicate. But what what I would start with is that very fortunate to still have Warren as our our chairman and and that's very important and it's and it makes for an excellent transition. I have a an exceptional board of directors that I'm comfortable reaching out to any of them in individually depending on the circumstances and either the risk we're dealing with or an opportunity that may be present in uh any of our businesses or or one that may be coming our way.

So, we're fortunate to have that exceptional group in place. And and then it really comes back to our team that's in place. And I said this when I was answering to um Warren from Omaha um that we want Bergkshire to endure and that means yes I want to lead Bergkshire and I'll be a strong leader. I strongly believe that and and I'll I'll take Bergkshire for it. But it it will be um as a as you always need a single leader and I I think we strongly understand that. But you surround yourself with great people and they're already here.

I've been fortunate on the non- insurance operation to to operate with the with with Adam's 32 and the 18 that I still get to interact with a lot. those 50 uh including Adam and and Katie obviously have an exceptional working relationship with Ajit and fortunate with that and would seek counsel uh regularly even even as vice chairmans we would constantly have a conversation around he he may be making a an insurance decision or I was making a decision around one of our non-operating businesses and the first thing we'd cross check is how's it impact your group.

So have an amazing uh uh uh relationship and a val and someone I val im immensely value the input and then across our CEOs we're so fortunate to have a great group that I would reach out to any of them on a specific circumstance and ask them for their input and I generally know where they've dealt with a challenge or a significant opportunity and I'd be the first to seek it out and say let's talk about it and figure out our path forward. And it may be that it was someone on their team that really dealt with it and then I'd want to be talking to their team.

So, fortunately, because of Bergkshire and the way we're created, again, it is a a unique structure, but we have an immense amount of resources around us. And then we have our our team in Omaha who has supported Warren for all those years. They're remarkable folks. There's there's not a lot of them, but they are good and they're and they're exceptional and we're fortunate to have them as part of the team. So, I it will be such that uh Bergkshire endures and will endure u uh as a as a team but clearly with um leadership.

So, thank you Becky that last question. Thank you. So, as we as we wrap up today, obviously, I can't help but thank everyone for joining us this morning and early afternoon, both as our long-term shareholders are or uh those that are are our our newer shareholders and all again all of you that came for the experience. It's it's greatly appreciated. We enjoy this engagement. It all comes together because there's a an individual Warren has highlighted in the in the past pulls together the exhibit hall pulls together everything here.

I'd like to acknowledge her Melissa Shapiro. Thank you. And then uh the the light was over on that table. But we do have um and we made this announcement in December. Our longstanding CFO Mark Hamburg is retiring in June of this year. We're very fortunate that then he will stay on for an incremental year as an adviser to our incoming CFO as a a personal friend adviser to myself. We we'll have Mark's knowledge resource and and it's immense when it comes to Birkshire. I like to Mark has been our our CFO for 34 years.

It's this not this June, the following June when he when he truly retires, it'll be 40 years with Bergkshire. and it's been such an incredible career and and has worn so he wears so many hats in this organization. I mean, he's he he's helping Melissa uh Melissa's organizing and doing all but when she has a question, she went to Mark to look for the answer around be at the annual meeting. He's our corporate secretary. I I like to say and I uh to to replace Mark, we we hired a CFO, but we also hired a general counsel.

uh it took it took two to replace him and and and more than that. So Mark, thank you for your incredible contributions to Bergkshire. Warren has highlighted those and I can only echo all that. Thank you so much. Now, lastly, again, thank you for this remarkable uh experience for all of all of us at Bergkshire. We we treasure what we call owner's day. that opportunity to communicate around what's going on in Berkshire because we're so proud of it, absolutely committed to it and and passionately believe in Bergkshire, but equally the engagement of all you throughout the day yesterday into this afternoon just uh greatly appreciated.

Thank you and look forward to seeing you next May. Thank you.