Watch the 2026 Berkshire Hathaway annual shareholders meeting — 5/2/2026

Good morning and welcome to Omaha. I want to welcome all our owners, our long-term owners, those that have recently become a shareholder. Again, thank you for joining us in Omaha for the meeting. Obviously, very excited by this. And I want to also touch on we have many people here just experiencing it. So, 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 video. And we'll have a few other videos that I'll touch on later but we did have an exceptional producer and executive producer and I want to thank her because she 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. 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 owner's day, our owners weekend. We have an exceptional group of owners and we're just passionate to be here. We'll communicate a variety of things around Berkshire and our insurance, our operating subsidiaries and Berkshire as a whole. But what we really treasure is the engagement with our owners, our shareholders and the questions that come. So thank you. Really appreciate it.

Now to touch on this morning, we have three sessions that 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. That'll be the first session. As we move into the second session, I'll have Ajit 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 rotating between our shareholders and Becky. Becky, thank you for being here. 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 has been the CEO of BNSF Railway for the past five years. And then we'll also be joined by Adam Johnson who is a 10-year CEO of NetJets but also took on an incremental role recently and 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 say this is also a little bit incremental or different from past meetings. Throughout this morning, we'll have three different videos associated with operating companies. The first one will be from GEICO. Nancy Pierce, who's the CEO of GEICO, long-term veteran and wealth of experience with GEICO. She's over in the manager section. 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 be incremental. Now the fundamental purpose of both having some incremental managers join us on the stage and the videos, we have an exceptional team at Berkshire. 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 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 videos.

So let's move to the formalities. Now I'm going to introduce our directors. I'm going to do it alphabetically. So, if they could just acknowledge with a wave or however they would like to acknowledge 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 retiring... worn appropriately. It's number 60 for 60 years as our CEO of Berkshire. Equally, it's placed beside Charlie's jersey, number 45. Charlie was with Berkshire 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 for the years to come. So great.

Now we'll continue with our directors. Steve Burke, Ken Chenault, Chris Davis, our lead director, and I'll just add a point here because 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 Diamond, Ajit Jain. I would just add for relative to Ajit, obviously been our vice chairman of insurance for nine years. I had many years to be his co-chairman. But one thing I just want to touch on, Ajit joined Berkshire in 1986. So not only is he a director, he's just been really the architect of our insurance business. So again, thank you Ajit. Tom Murphy Jr., Wally Weitz, Ron Olson. Now I can start to... I think my eyes have adjusted a bit to the lights and everyone out there. And I have to tell a little bit of a story here because when Warren announced the transition last year and I was sitting here and couldn't have 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 know the directors would be here and I knew I would have some family here, but it's wonderful that I'll 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. This is not my show today, but there are two anniversaries that we're kind of celebrating today. One is the fact that the board has had what I will generously call a refreshment which they voted and you couldn't have made a better decision. They did it unanimously. It surprised all the board when I announced it last year except for Susie and that's been 100% successful. Greg is doing everything I did and then some and he's doing it better in all cases and he's the right person. So that decision we score 100% on.

Thank you, Warren. Thank you.

But there's another anniversary today that I'd like to spend just a minute telling you about because about 10 years ago, we made a commitment to essentially move 10% of the resources of Berkshire Hathaway. We turned it over to another person who was not that well known at the time. And we did that by spending roughly $35 billion buying stock in Apple Corp. And we were going to have that under the management. We're turning that money over to the management essentially of Apple to make Berkshire look good and 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, counting dividends, realized appreciation, unrealized appreciation, but that has turned into $185 billion pre-tax. And I didn't have to do a damn thing. I mean, so it's, you know, we're very big around here on having other people do the work and collect the money, but that has been a success and 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 item is they're observing an anniversary themselves. I think just within the last week or so. They celebrated their 50th anniversary and 50 years seems like a long time but Apple seems like a very new company and when Tim Cook went into the top position at Apple, he succeeded, allegedly, Steve Jobs. Everybody in America knew his name and not many people knew Tim's name. And Apple had had this roller coaster experience where the two Steves had started in the garage or something 50 years earlier. And then I'm not sure how many of you know, but Steve was thrown out for a while. He came back in. He did these marvelous things in terms of developing products. And then he had an untimely death and everybody said who's going to manage Apple when Steve Jobs isn't around. And probably just a very few percentage points of American investors had even heard of Tim Cook. And we in effect, Tim took over about 14 years ago when Steve died. But when we made our investment and turned over 10% of the resources of Berkshire, we were turning it over to Tim. And 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. And but Tim has announced that he's retiring as well. That's an announcement that's just been made in the last couple of years. And so I think it's appropriate if Tim would take a bow and our shareholders would say thanks to him. And Tim is right by me. How would you like to step into the shoes of Steve and come through with his record? I mean, it's one of the miracles of American business management. And so anyway, thank you, Tim. And I'm going to turn things back to Greg and we'll go meeting.

Tim, on behalf of our shareholders and owners here, we echo everything Warren said 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 formalities and get into the business update. Really started with the letter to our owners and shareholders at the end of February. And I touched on it in the letter. I highlighted that the first thing 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 60 years. Aspects have evolved but 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, 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 Berkshire's Anthem, but I wanted to make sure we had that opportunity to see the video today. Berkshire'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.

Berkshire's Anthem that's embedded in Berkshire. We send a reminder to our CEOs and employees, our 400,000 employees and we do remind them of that including I ask our CEOs each year, just sent out a letter again 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 newspaper test. Now moving to the more formal update on our numbers. We in fine tradition we always start with our exhibit hall sales from the exhibit hall yesterday. And the interesting thing is last year was a record as you may guess but fortunately this year sales were very consistent with '24. We're basically at $1.5 million in sales. But 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. But importantly what the exhibit hall represents is our businesses showing their products and services and you get to see this great commitment 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 we're getting the opportunity to engage with all of you as owners. So, we treasure the exhibit hall and 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 10-Q this morning and had the related press release. You can see the results and I'll touch on those. I'll start with Berkshire just as a whole. Obviously we have our insurance as I've referenced as our heart of Berkshire, 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 really central to American businesses and American industry and to the American consumer. And when I combine those, it's really the unique opportunity we have to excel across those businesses. 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 charge associated with California wildfires that we insured. The adjustment's not so important. It's just a highlight that the 2026 results and what we're feeling in the insurance industry right now, there's two things. One, our 2026 results do not reflect any 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 that highlights again that our insurance businesses, but 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 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 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 softening market and I'll expand on that.

Now when we discuss insurance we have two core objectives at Berkshire. We want to underwrite at a profit so create a profit for our shareholders, we'll just put truly underwrite at a combined ratio, 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 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 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 running the business. And that's just an average. It varies across our businesses and across the industry. The other $70 and this is very important. That's actually what goes down into float. So when 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 $70 effectively gets paid out likely over a 3 to 4 year period that premium sits there as float. We earn on it and Warren's referenced it many times. It's a valued part of Berkshire and it's really the opportunity to continue to create value for you as our owners 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 wanted you to all see it, but it's not 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 owners.

Now, if I go back up to the underwriting results and you see the combined ratio again, but we'll focus on 2026. 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 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, Ajit and our insurance team across the businesses, we start writing less premium. We still want to write it at an underwriting profit because there's still opportunities there and there's a number of risks we'll insure, but we'll be much more cautious and specifically across the primary and reinsurance businesses.

Now, let's move to GEICO. As I highlighted, we have a new CEO. We're fortunate to have Nancy leading that team. 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. Exceptional result. What's driven that is that four or five years ago the GEICO team stepped back and said that they felt they weren't 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 drivers. They worked hard to segment that customer. And by the way, that happened across the auto industry. Generally speaking, you saw an increase in the overall premium as 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 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 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, there's an important balance I want to highlight 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 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 in that industry? It's policies in force. And if I touch on what we've experienced as growth in GEICO, if we go back to last quarter 2025 versus this quarter ending March of this year, our policies in force grew by 2%. Now compare that to a comp, 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 the three metrics, 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 objectives as I said they have is that okay let's retain our customers and let's start growing GEICO. Again, the last thing I'll just touch on the insurance business and it's Tokyo Marine. I'm not going to expand a lot but other than we announced the transaction in the fourth week of March, a great transaction by Ajit and his team 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 expand on that. So well done Ajit. Thank you to you and your team. A great, great transaction for Berkshire.

Now we'll move to 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 in the US. You'll see the results, some improvement there. But what we really want to highlight today and Katie will be joining me on stage and she'll touch on this is that we have a 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 work on how we can move our cars quicker and meet our customers' needs.

Expectations. And we're doing a very good job on the customer service side, but we've recognized we've got to get better operationally. Our team's also been very focused on what resources do we have? Do we have too many locomotives? Because actually too many locomotives, it sounds counterintuitive, but can be a problem. You're not as efficient, but the congestion and everything comes with it. 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 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, as I've said, 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 34.5% you see for Berkshire, that's the operating profit that came back to BNSF associated with its underlying operations. That operating margin improved by 2.5%, 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, on a nominal basis, that was the largest improvement across our five peers. So we're pleased with that but we know there's a lot of work to be done. If you look at our first quarter results, happy to report that, okay, we went from fifth to fourth, but our team would be the first to say there's a lot more to be done. And if you look at our overall operating margin there, very consistent with the result last year and the efficiency we've delivered is being maintained and improved versus the quarter of 2025.

So again, we see a lot of opportunity here to continue to get better, but to achieve where say Union Pacific is as a leader with an operating margin of 39.5%. We know that's going to require a step change both as how we're operating, but even how we approach our operations. An important step that we've, 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 here when I go through technology but that's where we see a step change or potentially where a few of our peers have gapped out versus how we're using technology.

I'm going to back up to GEICO and then I'll come back to 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 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 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 their certain challenges. And as that meeting wrapped up, I very much wanted to spend more time with the technology team to understand what was driving this and they were calling it a technology transformation because I could see that it was so applicable to what we needed to do and what we would pursue across our non-insurance businesses. So what is this technology transformation that they described at GEICO?

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 a valued 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 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 then came from GEICO, joined our non-insurance operations, took on a senior leadership role, the leadership role helping us with the technology transformation at 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 it's going beyond GEICO now. And we still have our valued employees there and they may be retraining or transitioning to other roles. But the reality is we need less people managing the applications and the software and more people building outcomes that our businesses need.

Now, when I asked our team, well, how does AI fit into this, 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 there's the broader risk globally 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 should we all be comfortable we're approaching this correctly and they said well we don't really like to call it artificial intelligence they call it narrow artificial intelligence and they have three really important principles associated with it. And the first one was that yes we're using it and we'll use it with these engineers we have and these highly skilled individuals we brought in but how are you 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 architecture or the framework they put in place. There may be things that still occur and should occur just like they did within our systems. But 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 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 same outcome? If we can receive that same outcome, 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 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 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 call that our safeguard.

And then the third thing on technology and associated with this narrow AI is it has to be 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 for the businesses. So that's what we call narrow AI. And if you see how it's starting to be applied at BNSF, it's incredible. So, if I think of BNSF, we have 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 intermodal 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, they have a system that's been running for 177 years, but we were not there in how we could use technology to operate that better. And that's what we're using or we've just started down the path of, that's how we know we'll see that step change in our operating performance.

Now to summarize it all, but I want to let you know it's all around operational excellence. We are going to get better 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 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. When you think of 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 is in a more 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 Berkshire.

If I move to energy now and provide an update there, 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. One of the core inputs to all those data centers, hyperscalers associated with artificial intelligence is energy. Our businesses have that opportunity in front of them at Berkshire Hathaway Energy. And yes, we're pursuing them and we'll do it, I'll touch on it, in a way we view as 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 that state. If you look at the number of data centers and hyperscalers in that state, it's very significant. We have four very large hyperscalers, data centers there or builders of them and ultimately 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 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 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, they have to bear their full cost. We can't transfer that burden across all our other customers. 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 I again go back to Mid-America, if you look at their with all the data centers and hyperscalers and the infrastructure they put in place, their rates are still 45% below the national average. That's just unheard of. It's an exceptional outcome and it just highlights they're doing the right things when they build this infrastructure or it's a part of it and we would highlight we have similar positive outcomes across the rest of our utilities now. And 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 gas and we'll meet that challenge. But here's an interesting point. 15% of the gas consumed in the United States is touched by our pipeline network or one of our core assets there. So again, that's the opportunity on the energy side.

But it's not without its challenges and we've talked about this the past few years. And when I think of the Berkshire Hathaway Energy Group, what's the challenge? It's what I call the regulatory compact. We leave your capital, our owner's capital, Berkshire'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 it's a fair, it's over the long run it's been a very balanced and fair return but how do you measure that 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 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 we don't see that balance, we don't deploy our capital back into those businesses or into those utilities 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, very prevalent the last 15 plus years 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 high winds, we had certain failures with our equipment that contributed to those fires. And associated with that, we fully acknowledged where 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 had very large claims against our utility there, Pacific Corp. 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 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 past quarter or occurred in April. We're very fortunate that it was up to the appellate court. They reduced, 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 where was the causation, that will be revisited and then the related damages.

Some positive things associated with it. We recover a billion dollars of security we've already posted. The law firms that pursued it are responsible for our costs associated that period of time. Not our litigation costs, but the costs we incurred in posting the bonds 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 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 Wyoming, Idaho, I've touched on Utah on this stage to say it requires a judicial system that supports the legislature, the laws in place, but more importantly, we all or as importantly, we need good legislation that then sets that balance. We've had it across those states and we'll continue to work hard across our other states. So, an exceptional outcome and wanted to make sure you know there's still a lot to be done there because we're back to the very first, back to first base on the legal proceedings.

Now, moving to our manufacturing and servicing businesses. This highlights our blues, the manufacturing group that represents approximately 70% of that group and the service and retailing groups in the gray or beige. I like to think of when you think of our manufacturing group, we've got three groups there. We have our industrial group, we have 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 a couple other groups, but 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 position. He understands Precision Cast Parts inside and out. He understands the industry and very much works towards delivering solutions for our customers.

The second important part of that metals group is a business called IMC, International Metalworking Company. And it's really interesting to see that company. What they make are the tools that remove steel. So they'll take a cylinder of steel, they create the tools and then that gets utilized in a variety of other industries. It can be the aerospace 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 a significant 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 11% quarter on 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 often IMC serves that industry. And that's remarkable. But if you hear of the backlog in this space, it's 10 years. And I did ask our team the simple question. I go, well, is that many more people really flying? Like, I get it. We're post-COVID and it's building up. And I sort of obviously knew part of the answer, but it's really remarkable why there is that demand. 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 old plane. And what you have is this 10-year backlog that we're seeing a very similar backlog across our metal businesses when you touch on Precision Cast Parts or IMC.

Now the third piece of the metal groups and by the way I should just touch on this. We acquired IMC basically 10 years before Precision Cast Parts. So you go back to a 2006 timeline. We acquired 80% of it. 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 how Precision Cast Parts 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 Alleghany and we're fortunate to have that in the family now and a very good addition. But along came also with it came three non-insurance businesses. There were a variety of other ones. They're tucked into the appropriate place and other businesses, but one of them that stood alone was WW Steel. And it was a family-founded company. It had transitioned to Rick Cooper. He's here over in the manager section. He's the CEO. And it's a remarkable business. They create basically they contribute 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 Las Vegas Sphere. And here we bought an insurance company 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 that really comprises 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 Lubrizol going back to 2011. We've touched on that business many times. We then acquired Oxycam last year. Associated with Oxycam, we announced the acquisition. We closed it on January 2nd. Very nice addition. I would say 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 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 real gem for our owner shareholders. But what that does is it creates a drag reduction agent that allows oil to move through a pipeline. And you can imagine in the environment we're in right now with the fundamental supply and 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 very high demand.

Now, the last thing I'll just touch on with the industrial group is we have Marmon. Excellent business. And the reason I'm touching on it at the end, 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 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 bellwether and it tells you how the rest of them are doing. That's Clayton Homes. The other businesses will their results follow very closely that because with Clayton Homes we're building manufactured homes or site-built homes and there's a lot that goes into it and our other companies provide both products to them and across that space. So it could be the insulation, paint, carpet, a variety of other things. If you look at Clayton's results, if you go to the manufactured side of the business, our results are down on true homes manufactured 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-built, 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. And that's obviously driven by where interest rates are and certain other challenges for the consumer.

But where's the opportunity and I'll touch on the challenge. Where's the opportunity in these businesses and how is Clayton tackling it? It's very much around pursuing the American dream and can we help deliver that. And what I have is going to have our team bring up a slide that highlights this is actually what we call a cross-mod 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 comparing it to this. But the reality is this is where the opportunity is within Clayton. We want to deliver an affordable home to the American consumer. This home you're looking at, we thank you 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 places in America where it's well below that. We recognize some others it may be greater, but we can deliver this home onsite built, two-bedroom, family home, living space, very beautiful living space for $249,000 delivered, including the lot. 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 an exceptional product. Now we don't stop there. We still have a very strong culture around the manufactured homes and how can we get, you know what's the extreme on that? Well, if we deliver a single, and this is a thousand square feet. If we take it to the manufacturing home and think of a traditional manufactured home, and our team probably won't like it, but it's more the box, square box, but what it does create is a home. It can be a two-bedroom with a, again, very nice living space, very well done. Now has a 30-year plus life on these assets just like this one. 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 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 within Clayton. So very proud of what our team's doing there.

Now lastly, I'm going to move to the service 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 Adam's been in that role as I said since December very much learning the businesses getting to know the management team. Like myself and how we've always done it, very will be very focused on capital allocation and the risk but also very focused on helping the team achieve operational excellence across those businesses. 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 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 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 activity associated with that. In our first quarter of 2026, we purchased $235 million of Berkshire stock. You can see that reflected on the slide. 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. Warren and I will be discussing this on a daily basis and how do we feel around the overall value. It's not daily, but we think about it daily. And the reality is there's a lot of different ways 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. 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 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 economic 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 approach we take to the intrinsic values.

Now let's move to our balance sheet. The very specific numbers. 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 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 fact we use our cash to purchase those treasuries, 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 and US Treasury bills net is 380 billion. And yes, 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 708.7 billion at the end of the year. So we're down just under three billion. Now what drives that or what's the underlying numbers behind that? We produced a little more than, well close to 10.5 billion dollars of income and related cash flows in the first quarter. We also would have incurred certain capital expenditures against our businesses. We incur those to either reduce risk in the businesses to manage those businesses on a sustainable basis or to pursue growth. That was like I said just under 5 billion. Again 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 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 Bellerive, a smaller transaction. We're fortunate to have it join our company, Steve Levy, and his team. Great group there. It's our, Warren likes to say we finally delivered on Charlie's objective around we have a rat poison company that we value highly, but 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 results.

So, with that, a very wholesome business update. So, I appreciate 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 and we'll move to the Q&A. But as we transition to that session, we'll have the GEICO video narrated by Nancy. Thank you.

Thank you, Nancy. And to the GEICO team, thank you. We've got an exceptional leader in Nancy. And again, appreciate taking on that senior role. Welcome, Ajit. Yes, great to be up here together.

As you, if you don't mind I'll start with, I touched on Tokio Marine, an exceptional transaction, exceptional relationship I know you've built over many years with the Tokio Marine management team. But if you could just expand on that strategic transaction and relationship, we'd love to start with that.

Sure, thank you. Tokio 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 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 god knows how many years, we've tried year after year to try and get a relationship going with Tokio Marine and Fire. It has not been easy because one of the things we bring to the business is a capital partner and Tokio Marine were cash rich and they really never needed capital in a big way. 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 low-hanging 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, things moved fairly quickly. So to sort of get to the bottom line, in March we finally announced a transaction with them. That transaction has three legs to it. I'll describe to you each one of them and that'll give you an idea of what the relationship is right now and we've got a long way to go of course. Firstly we bought some stock in the company, just a simple transaction, we wrote a check for $1.8 billion US and we got 2.5% of the stock of Tokio 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 knows for several years down the road. And the third piece was a sort of strategic agreement between the two of us. It is not spelt out in a lot of detail. And normally I would be very, very concerned about having open-ended strategic transactions but Tokio Marine, they are a quality company. In fact they remind me of a phrase that JP Morgan used I don't know how many years ago, doing first class business in a first class way and that is Tokio 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 you, Ajit. It's 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 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 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 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 not insignificant portion of my net worth tied up in Berkshire stock. Now Greg, I've been watching this company for a while, long time, a very long time and I've been telling people that I have no intentions 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, Warren from Omaha, very astute question. If I think of what we've already discussed this morning, which is our culture and values, and highlighted that's the bedrock of Berkshire, then what did it create? It created the foundation that we have today and that's this incredible set of assets that exists within Berkshire. We have our insurance business led by Ajit and his team and we've talked about it being the heart with talent and opportunities because we have capital available and it'll be available at different times but we've got significant opportunities there. If I think of our non-insurance businesses, I spent a lot of time on

Those, but we've got unique opportunities on the operational excellence side and we'll pursue them and they'll be incremental investment opportunities in there. 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 serves a couple purposes. One, and you've heard Warren and Charlie say this before, I've said it. We do not intend to be beholden to anyone. We start with that position.

And it's how we manage Berkshire and we'll continue to manage Berkshire. Now that asset, the cash and treasuries, also creates a unique opportunity. It creates the opportunity to deploy it across these different groups. It can be and it will be dependent upon the opportunity, i.e., is there a strong value proposition, but if it presents itself, we'll be prepared to act decisively and with significant capital. That's what it's there for. And we have, we will, and do have opportunities within the equity investments that we currently have and beyond that we have our operating businesses as I said and there it can be deploying capital back into those businesses as I touched on the capital expenditure side or it can be the incremental opportunity to acquire 100% of a business. And then there's the opportunities that Ajit's already alluded to on the insurance side. But what's the other unique thing is, yes, Berkshire is a conglomerate and we recognize that. But we are a unique conglomerate in that we can move our capital very efficiently and that's the value of 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 tax-efficient way. I would also add to the fact that how are we unique as a conglomerate? We live by the fact that we hate bureaucracy. We do not embrace it.

Ajit's the biggest fan. He reminds me constantly and I love it. I treasure it. But no, 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 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 as 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 both the long-term objective 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. 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. I hope it's an elephant.

Now, as you've all picked up, that was a deep fake. But here's the interesting thing. That was done with zero input from Warren, voice, photo. We were able to obtain that with 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 Berkshire and how we have to protect it every day. It can go to deep fakes and they're using a way to try to penetrate our business. It can be the cyber attacks, but 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 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 Midjourney and what's going on there. We're very focused on those risks. But Ajit, before we move truly to our first question, and you've touched on this many times, when we think of cyber risk and we insure it, what's our current approach across our insurance businesses and your thoughts there?

Okay. 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. We have been slow in terms of, consciously we have been slow in terms of entering that class of business as an underwriter. The reason for that is firstly on cyber I find it very difficult to have some meaningful method to assess and model the aggregation. People will tell you we've got it under control and they'll show you all kinds of models but nothing that I can really hang my hat on in terms of we really have a good feeling for what the aggregate exposure is because any risk we take on the first question we ask ourselves how bad can bad be and I'm not sure we can answer that question as well as we should. So the second reason is cyber has been a very popular, fashionable 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're 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. Secondly, you know, we being a large company are exposed to cyber perils ourselves. We try and do the best we can. I think we 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 you, Ajit. Let's go to now truly the Q&A session. Becky, we'll start with you and thank you for being so patient.

Okay, help you just repeat the last part of the question.

Yeah, so AI also is very fashionable right now. People are jumping into it 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 game changer. Right now what we are seeing is AI being used as a productivity tool, as a mechanism for reducing labor cost and doing 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. 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. 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.

Ajit, I found it interesting. Ajit and I were together a few weeks ago and Ajit got his team on the phone because we were discussing this exact question, Becky. And your team immediately went to yes, the cyber risk, which we've already touched on. They then went quickly to 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 creating code and managing it. They immediately went to that aspect of it and then as you touched on becoming more productive, more efficient and they went as far to say, I thought the example was really good. I mean, if we were looking at a risk and we had our 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 it. Exactly.

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

Yeah. So thank you. Thanks, Ajit.

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

Sure. I think one of our greatest strengths at Berkshire is patience and being disciplined when it comes to allocating our capital. There will be opportunities that come over time and for yourself, and it doesn't mean there's not opportunities now, but it doesn't mean you need to deploy all your capital or spend all your money right now. And that's really our approach. We take every day and we recognize we've got a significant asset in our cash and US Treasuries. Using ourselves as an example, and I would think of the cash you're holding as that, and that's an asset. It's a great opportunity. You'll feel the moment or feel there's a strong value proposition with an opportunity. When do we see those? 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. I always start with and I know we always have at Berkshire, 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 understandable view of what the economic prospects look like for the next 5, 10 years. 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 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, we like to have a strong view on the management team that they're capable and operate with high integrity and 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 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, we'll act decisively both quickly and with significant capital.

Anything you'd like to add?

No.

Thank you.

Thank you, Becky. So, obviously, yes, the many years of operating a variety of Berkshire Hathaway Energy and then in the role of the vice chairman of non-insurance operations. Fortunately, that was Ajit and I were in those co-roles for the past eight years, nine years now. But that created a very significant opportunity for myself personally to understand those businesses and as I've already touched on, we have exceptional businesses, exceptional leadership there, but there's still opportunities there. But it does, I'll spend a certain amount of time associated with those businesses and make sure we're allocating our capital properly and we're still thinking about risk across those businesses and encouraging operational excellence because listen, having been inside a business, 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 Adam on or him taking on the incremental role across 32 businesses, he'll bring that great operating knowledge and we have Ajit on the insurance side. Now when it comes to the equity portfolio and again allocating time, still we have significant opportunities there. As we look at deploying our capital that's on the balance sheet and I shared where our cash and US treasuries were. I would highlight if you think of our equity portfolio as it exists today, I articulated this in the letter. It's in a, we have a concentrated portfolio and we highlighted that by calling it across the core but it's what the best name is really a concentrated portfolio of investments and we had our core four and you concentrated investments I highlighted 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. And I would add that associated with those we may still be acquiring shares or rationalizing what's the right position across that portfolio. So the first group when I highlighted it was just under 200 billion 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 BNSF, a Chevron, a Google, companies like that, there's another $70 billion of investments and what that highlights is a very significant portion of our total investments are highly concentrated and sit across a limited portfolio that the active management of that is really limited is really 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. And maybe it's where they're going or what we've learned. The Japanese companies just announced their results in the last 48 hours and that was an active conversation that Warren and I had just around their results and the businesses and what we're seeing there yesterday morning. So 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. Ted manages another 20 billion or just under 20 billion of our capital and his responsibilities go far beyond that. He obviously helps us across a variety of our other opportunities or helping us assess risk or capital deployment in our businesses. So we're fortunate to have that. But it's a portfolio that's very manageable when you think of the management around it and what's required of it. 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 within the operating businesses and including the insurance side. So when it comes to allocating the time, yes there's a certain amount of time spent on operations and we'll prioritize that because we see a huge opportunity to continue to improve and close those gaps in operational excellence. We see opportunities within our existing portfolio, but that is either adding to them 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 those are evaluated in the same fashion. We look at as I said economics and really tied to the last answer. Ajit, any thoughts there?

Yeah. 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 see it anymore. Well said, Warren. No, but obviously we recognize it and 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 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 risks and then are we aware of those gaps? So, thank you Becky.

Let's move to station two.

Thank you. And thank you for attending your ninth shareholder meeting. Yeah. So again, when it comes to our capital allocation approach and the long-term approach we've taken, it's very much aligned with our owners and our shareholders that are here. They've taken a very long-term approach around their investment. We're fortunate to have this unique ownership base within our shareholdings and again over the long term there will be significant opportunities for Berkshire and this is where it's back to the patience and the discipline around capital allocation. Do we have any idea what will occur tomorrow or will that event be 3 years from now, 2 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, our investment philosophy around those activities. And I would add it's not that we don't see exceptional companies out there today that we'd love to own and I'll be careful because I wouldn't want to say we long term we'd be happy to own those companies because there are excellent companies that have excellent management teams that 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. We're not interested in acquiring those companies at that price and that can be a piece of them or all of them. That doesn't mean that opportunity won't be there in the future. It's what we spend our time preparing for. One being disciplined, but two being aware of some core opportunities we would treasure or value at the right price. And that really ties back to the discipline. And you asked me personally my plan for patience over maybe quote action. Again, it aligns to I took this role and am so fortunate to be in it and work with Ajit and others, but we do it because we love and believe in Berkshire. Warren brought this great commitment to Berkshire, a great understanding of Berkshire and passion and with that he wanted to create something that was very long-term including the opportunities it would create. Personally and I know all of us we bring that same passion and we fully intend to do it consistent with how we've done it in the past. So thank you.

Yeah. Please, I should have... Thank you. 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 operandi, I tell them right up front, I said, '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, all kidding aside, it is very difficult to sit there and do nothing while everyone else is being wined and dined by brokers and taken to London. So I think the real test of being successful certainly in insurance and therefore in investing as well is the ability to say no.

Yes. Low strategy. I think it applies to insurance and I think your earlier comment, I mean it is so applicable across all our businesses. This did remind me of one story and I'll just share quickly. We had acquired a company and we were still having a challenging matter with how we were going to resolve some matters. And I remember 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 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 trust me, we understand that a lot of people have this urgency to act, but you described it incredibly well. Thank you.

Let's go back to Becky. Becky,

I mean the short answer is depends on the price.

Ajit, I like your Charlie answer. Obviously some thought has gone into that because there's a lot of dynamics there.

Yeah, there is a lot of chatter, there's a lot of need. 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. We ourselves have taken a small participation in a program that's being put in place so as to write insurance for the ships in the Strait of Hormuz. We haven't written any deals as yet. It's still being fine-tuned, but if we can get our terms in terms of the underwriting decisions and the fact that the US Navy will escort these ships, we have put a price on which we will be comfortable underwriting that risk. But nothing has happened as yet.

Thank you. Thanks, Becky. Station three.

Thank you. Yeah, as far as managing the existing portfolio and what's in that, that portfolio as you touched on was put together by Warren, but it is a group of companies that Warren understands 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 yes, it's a concentrated portfolio, but you know, their businesses will evolve and there's risks that may surface. So we'll constantly evaluate it, but it's a portfolio very, very comfortable with. And, you know, Warren touched on Tim Cook's amazing success with Apple, but you know, Warren and Tim were recently discussing this and they were talking about Warren didn't invest in it because he saw it as 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, 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'll be intrigued by where they make it and some of the risks and challenges around that. But I do fully and our team, you know, when we talk about it on a more broad basis. Listen, we're looking and saying, do we understand the value and why that product has value? And it's really that value to the consumer. I think 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 the opportunity? Why is it valued? Why does the consumer, whoever is using it, whatever industry, why will that company and that product endure and then associated with that where are the risks associated with that and that pretty much is how Warren approached it, how I approach it. So when it comes to our existing portfolio yes we'll always be well aware of what we've invested in. But as far as understanding those, the opportunities and risks within them, very comfortable that I have a strong view in that and we're comfortable where we're at. Thank you.

Anything there?

No.

Okay, Becky.

I don't know how I'm supposed to take that.

No. Both succession, obviously succession's an important topic and I'll come back to our board both relative to Ajit and I and I touched on this earlier. I mean Ajit joined Berkshire in 1986 and is the architect of our insurance business along with obviously Warren 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 as it was touched on the culture and the discipline within it is exceptional. Now I found it really interesting and I, you know, when Warren announced the transition last year and Ajit recall this, the very first thing that happened was we left that meeting, there's a lot going on and Warren said let's, to Ajit but then also myself, let's get the insurance managers together, our top five along with Ajit and with Mark Hamburg and let's sit down and talk about the business. Let's discuss the culture and it was a remarkable opportunity for me to one, expand my knowledge base on the insurance side and I obviously been working with Ajit for a number of years and had other board opportunities where I had a wide understanding of but then to spend time with Ajit and our team 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 of management experience, insurance experience and they absolutely had the same values and culture that Ajit 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. 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 that type of underwriter or selling product. So, that's the delicate balance. But when it comes to, we're fortunate he's got an exceptional group that works with him and then also operates a number of our critical subsidiaries. They're deep in both knowledge and talent. I would then also highlight our board takes the succession issues very seriously both with Ajit and myself. We have a plan, they have a plan in place and they discuss it. So if Ajit were unable to perform in his role today or I was unable to perform our board knows what action they would take. Ajit.

Yeah. So in terms of the culture and the underwriting orientation which is so critical, there are a few simple rules that I've followed over the years and it's come at a cost but I think net net is still a positive. But let me just lay it out in terms of how I think about this issue. Firstly, we have a very small number of people who actually get involved in the decision-making. My top three lieutenants in my reinsurance operation, forgetting about companies that we acquire, we have been together for 35 plus years now and we become friends. 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 Berkshire gets the downside. I try and stay away from that as much as possible. Really a problem with all the compensation plans I've seen. Then the other thing that is important is people need to have experienced 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 is such a critical point.

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.' 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. So that's the big challenge.

Thank you. Thank you, Ajit. Thank you, Becky. We'll go to station four.

Thank you. I had a very long and extensive answer last year to the question. And it is an important one, but I think it's one we have to recognize. When we, and we have, I'll touch on rail too. We have certain companies where we very much operate and this would be our utilities. It would be our, including our pipelines. We operate as a steward of those assets. We operate as a steward of those assets effectively for our states and for 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 current laws that are in place, including the federal laws. So we know what those parameters are and as we see federal law and state law across our many states, but the federal law there are things they do and there are things implemented to reduce the impact on the environment. We're very sensitive to that and our teams are absolutely committed to both complying and absolutely doing it right. I would then add that if we're discussing our facilities, for example, across the river in Iowa, we have plans on resources and when we'll retire our coal units potentially 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 regulatory processes how we'll operate, how long we operate these assets because in the end it's those customers that both bear the cost and bear the risk and very much 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 know I touched on this last year. But if I look at our Iowa utility, this changes every year because of the load growth we've discussed. But if we look at on a 12-month, 365-day period, approximately 93% of our energy came from renewable energy. That's remarkable. 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 coal plants. We need them to deliver as I would call protection to the system. 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 we've deployed the capital to ensure that could be delivered. But the reality is state by state they'll decide what resources we'll deploy to serve the customers and they'll also very much provide us input on when we'll retire our units. The real challenge going forward and it's well beyond Iowa because I think Iowa and our other utilities we approach it in a very prudent way and we've got one, i.e. prudently. We're doing it consistent with our state policy, but want to do it in a call it a frugal way. We're not building for just sake of building. We're trying to do things that we feel are best for our states. But the challenge is when you talk about the hyperscalers and the data centers, there's that's putting a lot of pressure on the system and there'll be, you know, if you look at the amount of gas units purchased, there'll be an incremental amount of carbon units used as we go forward if that's going to be a valued, if artificial intelligence and the consumers want that and that's a valued product. Going to put a lot of pressure on the systems and on the type of assets we use and the industry uses. Anything on the insurance side because I know you've gone on the insurance side as far as how what do we insure, 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. 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. 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. Very valid question, but again very, very 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 BNSF, 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 an obligation that came 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 what's required both federally and at the state level and that we're exceptional stewards of the underlying assets. So with that, I just, we're going to move, thank you and we're going to move to 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 move to a NetJets video. Again, just give you some more knowledge on NetJets and Adam Johnson. We'll then take a break, but this is 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 large screen. Becky will interview him. As we take the break, there'll be a couple other activities. One, you'll get a 3-minute 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 again an interview from Warren. And then, 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 15-minute mark. Basically, at 11:30, the commercials will play. That'll be a 12-minute 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 enjoy your break as we go to it. And Becky and Warren, we look forward to your interview. Thank you.

10 years ago, we made a commitment to essentially move 10% of the resources of Berkshire Hathaway. We turned it over to another person who was not that well known at the time. And we did that by spending roughly $35 billion buying stock in Apple Corp. And we were going to have that under the management. We're turning that money over to the management essentially of Apple to make Berkshire look good and 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, counting dividends, realized appreciation, unrealized appreciation. But that has turned into 185 billion. And I didn't have to do a damn thing.

Tim has announced that he's retiring as well. That's an announcement that's just been made in the last couple of years. And so I think it's appropriate if Tim would take a bow and our shareholders would say thanks to him that Tim is right by me.

First and foremost, we recognized we

We were going to become a builder of technology rather than just a buyer of technology. And that meant that instead of having a number of systems and often buying the related applications or software that came with it, and yes, it's a valued 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. So we've 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.