Greg, first of all, thank you for having us here at what is the first meeting of the new Berkshire. First time in 60 years that they have a new CEO who's heading up this meeting. What is this like for you? You've been doing this for so long, but what is this like for you this first time out?
Well, thank you for being here and we're so excited to be here in Omaha. So, it is a great tradition and yes, first time in 60 years. Fortunately, Warren will be a part of it and we're excited by that. And what I really want to communicate to our owners here, and these couple days are, and especially on Saturday, it's owner's day. It's their day. So, I just want them to really know that Warren brought this amazing commitment to Berkshire and deep understanding, and I want them to know that remains. That there's a team, myself included, that are absolutely committed and have a deep understanding of Berkshire and we bring that same passion every day.
What's going to be different at the meeting this year? Anything or is it the same?
There's some just evolution as I think hopefully our owner shareholders enjoy. So one of the things we'll be doing is introducing some other managers.
And that was very purposeful because we have, when you walk around here and all these businesses, we have exceptional leadership in the businesses and we very much operate it where this ownership mentality, it's their businesses. But what we want is to on stage let all the owners, all the shareholders, those watching CNBC, start to see the depth of management in Berkshire.
How did you pick the managers? And I understand Adam because he's obviously in this new management role. Katie Farmer is going to be on stage too. What made you get to those people that you'd be bringing up?
So it started with the thought that on the insurance side we have a... but even someday we'll add an insurance manager and things like that because the idea was if you think of start with insurance, there's no one better and the world needs to hear him and see him. But equally we have a deep team there and that's something I've been so excited by. When Warren made the announcement last May, as we all know, the first thing he did was pull together the senior team from the senior leaders on the insurance side. And it was a small meeting in Omaha, Warren, Ajit, and say five other of the senior leaders in insurance. But Warren was very open about, okay, this is our new team. I was the first, I've got a lot to understand and learn. I had some knowledge from spending a lot of time with Ajit and being on certain boards, but that was really exciting and to see the depth of that team was just, it felt really good to know who was behind it. And then so I had that opportunity and then when it came time on the non-insurance, really focused on one, Adam, and as much in that he brings a wealth of experience from NetJets and he's remaining our CEO there because we still want him to have his fingerprints on it. But he's got an exceptional team. But as he took on the BNSF team, as you've already highlighted, that was a logical outcome. Katie is our largest non-insurance business. So, it was logical to introduce her. She runs an amazing business. 175 trains moving a day across 32,000 miles, 32,500 operationally and serving many different types of customers from agriculture to moving the intermodal traffic we do. So, she's got a breadth of responsibilities and I just wanted our shareholders to meet them and hear what they do every day.
I know it's right ahead of earnings, so you're in a quiet period. There's some things you can't say. But how has the war in the Middle East, higher energy prices impacted the company? How do you deal with it?
Yeah, I mean, fortunately, we do have a team and teams. It can be a variety of things that surface daily, quarterly, in an annual basis. Always very proud of them. I mean, it's heads down and we're going to work our way through this. So, you're right with energy costs going up. For example, if you think of our chemical businesses, we have Lubrizol, we just completed the Ozarks transaction on January 2nd. We closed that. And then we have a third one called LSPI and I like to think of them as our chemical group. Their inputs went up immediately. Now, that takes time for us to catch up on pricing because we have customer contracts and they do reset and it's a bounce and on the back end they'll be a little slower to correct. So, it's a, there's a way to adjust for price appropriately and fairly for both the customer and us, but that takes time. So, I would say the biggest thing is we see some immediate increase in the input costs across certain businesses.
Okay. Back to Adam, you know, people wonder who your sounding board is. Warren had Charlie, Warren had you. Who do you get to talk to to kind of bounce ideas off of or be a studying force when you got questions yourself?
Yeah. So, number one, very fortunate that Warren still comes into the office every day and he's a great sounding board. I mean that's really, there's a lot of collaboration now and there's always been. But I'm going to call him or I'm in Omaha a few days a week and then I'm on the road like I've always been meeting with our other businesses or looking at certain opportunities. But when I'm here it's a discussion around what we're seeing, him and I, how do things feel, what do I see as opportunities, what's he seeing as an opportunity. And so one, exceptional sounding board. There's no question I talk to Adam not just about his businesses but what are we seeing again, where are potential opportunities. And I've really tried to have that type of engagement for a number of years with our non-insurance operations. But if you go to our top businesses, they're very senior business leaders in themselves and I greatly value hearing what they're seeing, what are they hearing from their suppliers, what are they hearing from their customers. Because it has a, so it's just gaining, gathering that knowledge is sort of on a continual basis from a broader breadth than say just a Charlie. But that would be, I'm fortunate to have that broader group.
You wrote in the annual letter, which by the way was really comprehensive, had a ton of information I think updating people about where things stand as the company, what you would want to know if you're an owner in the company. But you wrote in it that your job is primarily one of risk management to kind of see around corners. How do you do that? Because when I think risk management, I always think Jamie Dimon or somebody who's really involved with financials, but you know, you're right. There's a lot of things you have to know in every one of these businesses. How do you stay on top of that?
Yeah. So one, fortunately having run the non-insurance operations for eight years and know those leaders well, we always start discussing what the challenges are, what's the risk today, but more importantly what's the risk 5 years, 10 years from now, what's worrying them, how is their customer changing. And that's a constant dialogue. But there's broader risks that you start to see surface. And then when I was with the insurance team, that first meeting was all a discussion around risk. Yes, we have to get pricing right to the risk, but what are the risks and not the risk that year, what are we seeing the risk five and 10 years from now? And if you go to insurance, for example, and it's a risk in a lot of our businesses, for example, inflation. So, we're very aware of that. We're watching it across our businesses. We want to understand what it does to our businesses, but business as a whole in Berkshire. And then it goes from there.
