Berkshire Hathaway Inc (BRK-B) May 2026 Annual General Meeting Transcript

Good morning, everybody, and welcome to CNBC's special coverage of the 2026 Berkshire Hathaway shareholder meeting. I'm Becky Quick, joined along with Mike Santoli, and we are here live in Omaha, Nebraska, on the floor of the CHI Center Exhibit Hall. It is a new day here in Omaha. After 60 years, Warren Buffett will not be answering questions from shareholders. Instead, Greg Abel will be taking center stage in his first meeting as the Berkshire CEO.

He'll start this meeting with a one-hour business update, then move on to that first Q&A session, which also will include Vice Chair of Insurance Operations Ajit Jain. It starts in about 15 minutes. Let's give you a look at the rest of the day's schedule. The first Q&A session will be a little more than an hour. After that, you can catch our halftime show with big names, including Occidental's Vicky Holub and Brooks running CEO Dan Sheridan.

The second session starts at 1245 with the BNSF CEO Katie farmer and the new president of berkshire's consumer products service and retailing and netjet ceo adam johnson joining abel on stage after another hour-long break the official shareholder meeting will start at 3 p.m eastern time in fact just a few yards from here inside the arena shareholders are starting to take their seats this has a little bit of a different feel this morning it's quieter yes it is there are still a lot of people here in fact when i was walking in the lines were kind of out around the corner to both ends of this uh arena right now you see tim cook is uh on this on the floor kind of getting ready to take his seat he's sitting with some of the directors but um the shopping here on the floor has been a little muted there yeah there are a lot of people here but uh not as many as we've been used to seeing the last couple of years when you got 40 000 people who are crammed into this place at once definitely a lot of curiosity about how this is going to go yeah and how greg's going to handle it but it does feel a bit lighter not much of a press. This is an evolution in Berkshire Hathaway. I do have some news this morning.

No doubt about it. Berkshire Hathaway also just released first quarter results. Operating earnings total $11.35 billion. That's up 18% over last year. The big headline from the results is that Berkshire's cash pile jumped to a record of nearly $400 billion, about $397 billion. That's in new CEO Greg Abel's first quarter as a chief executive, of course. Berkshire, according to the filing, sold a big chunk of stock in the three months, just over $24 billion. The company also bought $16 billion worth. That gives you a net sale number for the quarter of $8.1 billion out of the equity portfolio, which is over $300 billion in size. Berkshire's five main stock holdings remain the same in Q1, American Express, Apple, Bank of America, Coca-Cola, and Chevron. The company also bought back a total of $235 million in its own stock, the first buyback since the second quarter of 2024. Now, Greg Gable had told you that they were restarting stock buybacks.

Yeah, he said that about a month ago when he was on Squatbox with us.

And they had bought $220 or something. So there was a little bit of suspense among the investors I've spoken to about whether, in fact, they were more aggressive in buying more over the balance of the quarter. Who knows what they've done in April as well?

Right. These are only numbers through March 31st. So this was the beginning of things. But people are wondering what they're going to do with all that cash growing up to 400 billion dollars almost i remember when it crossed 100 billion dollars and people thought oh my gosh what are you going to do with this 100 billion dollar cash hoard that was only 2017 what they're going to do is quadruple it that was the answer yeah and continue to grow it although we have talked to some of the directors here and the things that they'll point out is that that cash hoard along with the 300 billion dollar stock portfolio makes up a much smaller portion of the business than it used to because the operating earnings are just so strong coming from these companies.

I mean, the market cap is over a trillion. The book value rose to like $725 billion. So the operating business accounts for a lot more than it used to, although it still remains a question because if they're not buying back their own stock when they say it's below their estimate of intrinsic value, are they waiting for something in particular? By the way, it occurred to me that Greg Gable himself said he bought $15 million worth of Berkshire. So that rounds it to a nice quarter billion between the company and him that they picked up in the three months.

Right. He's taking his salary, as you told us about a month ago, and he's going to be plowing it back in, buying shares on the open market and basically on the after tax basis, putting it all back into future shares so that he's aligned with shareholders as he sees this, too. Now, there are some highlights about who's out in the audience. You just saw Tim Cook. He's here along with the new CEO of Apple, who John Ternis saw him last night out and about. I know that Bryson DeChambeau is here. He's a friend of Greg Abel's, and he's in the audience as well. But we've got a long-term Berkshire shareholder with us that you'll probably recognize as well. Bill Murray is here on set with us today, and obviously you know him from Caddyshack, Groundhog Day, Lost in Translation, a million other films. You probably know that he's a Berkshire shareholder just from our coverage here in past years. But, Bill, I didn't even realize you bought in in the 1970s. That's way back.

Well, I didn't do it. I was led to a man named Sandy Gottesman in New York, who I much later found out was a close friend of Warren's and did a lot of work with Warren. And he had an account for me. And many years later, I met Warren. I thought, he's such a nice fellow. I'd like to help him out. Maybe I'll buy some of his stock. And then I found out that I'd owned his stock for a couple of decades already. Wow. But since then, I've just emptied all the mattresses, and I'm all in on this thing here.

You've been coming for about four or five years, maybe, to the Berkshire Annual Meeting here. What brings you here? Why do you keep coming back?

Well, the first time I came was after I met Warren, and I got a kick out of it, a real kick out of it. He really makes me laugh, like big body laughs. So I get a kick out of them, and I thought, well, I'll go out there and see what the Warren and Charlie show was like. And it lived up to everything. It was really good. And I enjoyed sitting there in the dark with all the people who were so excited to sort of be in the club. I didn't even know I was in the club. And so I was like, God, I could have been here in the club all this time, walking around buying marshmallows and things.

Kind of a little pressure on the new guy. Greg Abel's going to have to make you laugh now.

Well, you know, I think he's much friendlier. You know, I saw him yesterday, and he was really friendly. Certainly friendly, yeah. So he's very friendly, and I think he's probably done a little research on it. Like, I know there's a challenge to be as funny as those two characters were. You know, that was big-time humor. That was very funny stuff.

Phil, I don't mean to put you on the spot, but as a shareholder, you probably look at this and think, okay, this is a changing of the guard. What do you want to hear? What makes you feel comfortable with still being a Berkshire shareholder?

Well, you had Sue Decker on your show the other day, and she spoke of what was going to happen to the company, that it was no longer going to be the way that Warren had it, where you just sort of let your companies go, let them do their own thing. You don't bother. You don't interfere. But actually Berkshire was going to provide some guidance and suggestions and set goals for them and sort of streamline operations and just sort of tighten things up. And when she said that, I thought, oh, you mean like everybody else, you know, maybe that should work. That should work. So it was told to me by, I mean, my head is still ringing from the pinballs of numbers that you guys were talking about there a second ago. So it'll take me a second to get my thought. How many billion was that again? Yeah, almost a good cushion to operate with. So I feel comfortable knowing that, you know, it's sort of like sitting next to a guy at a poker table. that happens to have $400 billion, you figure, like, well, when he's broke, I'm going to be broke.

The feel is a little different, and it's an evolution. And as somebody who is a careful observer of cultural phenomenons, what would you have to say? Because I've talked to you in the past when you've sat and listened to Warren and Charlie. And by the way, folks, if you take a look at the stage, there's Warren Buffett walking in to the floor of the Berkshire Hathaway meeting. That's his daughter, Susie Buffett, another director of the company sitting next to him. But the first time in 60 years that he's going to be sitting on the floor listening to this Q&A instead of actually taking questions from the shareholders.

Well, that'll be a great experience. I was in a show once, and for some reason I came late. And my understudy went on in the show, and I got to sit and watch our show. I was the only one of us that ever got to see our show. And it was fantastic. I thought, God dang, this is really good. I was really happy to see that. So I think he's going to have that same experience of what it's like to be there as a shareholder and to see how the story goes down, how Greg tells the story.

And you know he's going to have his own kind of wisdom reflected back onto himself. Because, I mean, the one thing Abel's going to do is talk a lot of continuity of the culture and the discipline and everything else.

Yeah. Yeah. That's a great analogy to this. What was the show?

It was the National Lampoon show off-Broadway, and I was in it with my brother Brian and Joe Flaherty, Harold Ramis, Gilda Radner, John Belushi, and Paul Jacobs on the piano. And it was an outrageous show at the time. It was a great, great show.

It was worth being late for.

I only did it once, but I'm so glad I did it. I was lucky. And I didn't get in trouble because it was just those guys.

Well, Bill, I know you've got to make your way out to the floor. I get lost going through the curtains. I do, too. Nice to see you. So we are going to head out to the meeting, which is taking place in just a moment. We've got to get ready to start taking these questions from the shareholders. Again, we are just minutes away. You can see that room starting to fill up. We've been watching all of this, a lot of news that's happening today.

Berkshire shares are down nearly 6% since the start of the year. So the big question now is, could Abel's comments today be enough to spark some enthusiasm for the stock? We're going to talk about that in just a moment with John Rogers of Aerial Investments. I would point out a couple of things about the stock investment over the last year, which is it was at a historic peak one year ago on this very day and also a historic premium to its valuation. Since then, actually, other insurance stocks have actually been somewhat weak along the way. That's dragged down the perception of Geico's value. And obviously, the valuation is moderated now. So it's about 1.4 times book value. It had been up around 1.8 times. The other thing I guess I'd say is defensive and quality stocks have not necessarily been in favor. The S&P 500 has been very difficult to keep up with. And by the way, also, I was going to mention on a five-year basis, the S&P 500 has just caught up to Berkshire Hathaway's performance. It's basically been outperforming for that entire period in almost every rolling five-year period you can go back to Berkshire has outperformed John Rogers of Ariel is right here in the house he's a longtime shareholder and of course friend of Berkshire John good to see you great to be here just talk about your general thoughts as you observe this transition from from Warren as CEO to Greg Abel and I guess what you might want articulated or clarified today well you know I think that sometimes in basketball people think about whether Michael Jordan's the greatest of all time or LeBron James, there's no doubt that Warren Buffett's the greatest investor of all time and the greatest communicator of his investment ideas of all time.

So it's huge shoes for Greg to fill. What I'd like to find out today is whether he's optimistic about the markets or not. It's been a difficult market. It's been really complicated by the war and everything else. And I'm wondering if his confidence is still there.

Do you think his approach to the job, Well, it's interesting to me that that Warren Buffett, of course, created all of this value, at least initially, principally as a stock picker. He was a market junkie from a young age, and that was sort of his window on this. And he bought whole businesses and he's become a massive insurance operator and all the rest of it. Whereas Greg has come from industry. He's owned whole businesses, been a CEO, made acquisitions in that way. So I wonder if he's still going to think about the sort of public equity portfolio as a principal driver of value going ahead, or if he's going to look for ways to maybe do things with the operating side.

I would think he will continue Warren's playbook and Charlie's playbook. It's worked so extraordinarily well. It's created so much wealth. And the board really believes in Warren's beliefs. And, of course, Warren is still there. So I think Greg will follow the pattern that has built all this opportunity to create real massive generational wealth.

There's a line of thinking that Berkshire Hathaway at a time when everybody is focusing on the types of businesses or even just, you know, financial balance sheets that can't be dislocated by AI or anything else, that Berkshire Hathaway should come to toward the top of the list, just given its asset mix and all the rest. I mean, is that something that you think about in terms of, you know, the enduring value of the company?

Well, I do. I think there's a huge moat around Berkshire. When you walk around the center today, you see all these marvelous businesses invested in that you think they're so unique and so special, they really can't be replicated. So I think there's so much value here in the portfolio, and I think it's going to perform very, very well coming out of this sort of downturn over the last year.

Does it, you know, there's one line of thought that almost $400 billion in cash now on the balance sheet that perhaps investors more broadly may not have as much confidence in allowing Greg to sit on that much cash because who knows how he's going to allocate it, whereas people had some comfort level with Warren.

But I think, again, Warren's still there. The board's still there. Warren's such a presence. Greg has learned so much from Warren. So I know he'll be very careful with making those investment choices and how he uses the cash.

And in general, I mean, know your thoughts on the market we have this other sort of tech concentrated uh s p 500 run to new records but the rest of the market i guess has also found some pockets of strength there are and i've been looking at of course the leisure oriented stocks that i think are really cheap companies like norwegian cruise lines and of course my favorite madison square garden entertainment that owns the garden yeah it's going to benefit from the knicks run to the world championship no doubt about it uh so a chicago guy you're okay betting on the knicks that way i really am it's a remarkable how um sports team values are now getting reflected there's a couple of public market plays and you know the atlanta braves and all the rest of it all of a sudden and the group

that comes to this meeting seems interested in those types of idiosyncratic type companies they really do you know melody hopson my co-ceo has started project level to invest in women's sports related franchises and teams it's a wonderful thing and i look at the nba you know So it's going to be a worldwide phenomenon. You're going to have NBA League Sunday in Africa. You're going to have them in Europe. You're going to have them in Asia. All those eyeballs will be watching NBA talent. And you can see world championships. It'll be truly world championships.

So still a lot of value in professional sports. John Rogers, thanks so much for getting us kicked off today. Really appreciate it. Enjoy the meeting. Right now, we take you to this year's annual Berkshire Hathaway shareholder meeting right now.

And welcome to Omaha. owners are our long-term owners those that have recently become a shareholder again thank you for joining us in Omaha for this for the for the meeting obviously very excited by this and I want to also touch on with 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 know that we've traditionally had was we've often had a movie which included the credits that came with it and the movie video and we'll have a few other videos I'll touch on later but we did have a an exceptional producer 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 uh brad underwood thank you brad now we have a great day planned and it's really all around our owners it's our culture but most importantly this is our owners day our owners weekend 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, again, 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 Jain 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 BNSFR 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. it. 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 of Geico long-term veteran and wealth of experience with Geico she's over in the manager section she'll she'll narrate a video on Geico and then we'll also have a video on NetJets narrated by Adam and a video narrated by Katie on BNSF the railway so that'll that'll be incremental now 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 through the videos so let's move to the formalities now i'm going to introduce our our directors i'm going to do it alphabetically so if they could just acknowledge with a wave or however they would like to acknowledge our our shareholders our owners start with howard buffett susie buffett our chairman warren buffett warren we have a little surprise there for you if you look up to the right you'll see a jersey and a number we are we're retiring wearing number 60 for 60 years as our CEO of Berkshire. Equally, it's being, 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 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 Chennault, 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 in all you do. Sue Decker. Charlotte Guymon, Ajit Jain. I would just add for relative to Ajit, obviously been our vice chairman for of insurance for nine years. I had many years to be his co-chairman, but one thing I just want to touch on. Ajit joined Berkshire in 1986, so not only is he a director, just been really the architect of our insurance business. So again, thank you Ajit. Tom Murphy Jr., Wally Weitz, Merrill Whitmer 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 when Warren announced the transition last year and I was sitting here and couldn't been more proud but I don't mind sharing the first thing that flashed through my mind was geez we've already booked this arena 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.

Thank you. This is not my show today, but there are two, well, 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 was to surprise all the board when I announced it last year. except for Susie and Awe. 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. Anyway, 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're going to have that uh under the management we're we're turning that money over to the management essentially of apple to make berkshire look good and 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 uh pre-tax and uh and i didn't have to do a damn thing i mean so it it's you know we're very big around here on having other people do the work and collect them like but that that has been a success and we we do look at marketable securities as being businesses that doesn't mean we hold all of them forever but we still our largest holding is Apple. And Apple has a very interesting history that some of you may be familiar with. But one item is they're observing an anniversary themselves, I think just within the last week or so. They celebrated their 50th anniversary. And, you know, 50 years is seems like a long time but apple seemed like a very new company and when tim cook went into uh the top position at apple he's he succeeded a legend uh you know that uh steve jobs was everybody in America knew his name and not many people knew Tim's name and Apple had had this roller coaster experience where where two Steve's had started in a garage or something 50 years earlier and 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 But he 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. He, 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 comparative our record with and but Tim has announced that he's retiring as well that's that's an announcement that's just been made in the last couple of years. And so I think it's appropriate if Tim would take a bow and our shareholders would say thanks to him. 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 uh to greg and we'll thank you warren tim on behalf of our shareholders and owners here we echo everything warren said and and i would add one thing you've truly been a global ambassador around the world for american business thank you 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 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 I as we transitioned I wrote a letter to our 400,000 employees touching on culture and values. And the purpose of that letter was to highlight that was not going to change. It had never changed in Berkshire under Warren's 60 years. Aspects have evolved, but they don't, 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 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, the 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, it's a great reminder to our CEOs and employees, our 400,000 employees, and we do remind them of that, including, I ask our CEOs each year, I just sent 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, 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's sales were very consistent with 24. We're basically at one and a half million sales. But the point is, we'd always love to get to two million, and we're not there yet. So we've got something to work on. but but importantly what the what the exhibit hall represents is our businesses showing their products and services and you get to see this great commitment of our of our leadership team and their passion for Berkshire and their passion for the owners I was fortunate to spend some time going through the exhibit hall yesterday and that's a wonderful experience because I get to we're 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 four o'clock today and feel free to spend a little money. Now, truly moving to the more formal aspects of the business update. we issued our 10Q this morning and had the related press release you can see the results and I'll touch on those I'll start with Berkshire just as a whole obviously we have our insurance as as I've referenced as our heart of 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 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 And the letter that I sent out just in February highlighted the fact that we're 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 to 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 the insurance, 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? 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 ultimately first year olds. But truly underwrite at a combined ratio, and 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 seven percent i.e seven dollars on a hundred dollars is our pre is our profit our operating profit on that premium and then if i go back to the 93 just roughly 23 of that would be the expenses the administration of of running the business and that's that's just an average it varies across our businesses that across it varies across the uh the the industry the other 70 and this is very important that's actually what goes down into float so when i you see our float growing we take that 70 it goes into our float and we'll incur premiums against it over the years to come and when the premium shows up we pay out against that 70 but if you take a simple small commercial business or personal insurance that that 70 effectively gets paid out likely over a three to four year period That premium sits there as float. We earn on it. In Warren's reference of 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, going back to 2015, it's effectively doubled through 2025. there's a small increase in the current quarter but I wouldn't 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 as our owners now 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 8 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 U.S. 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 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 better we have worked hard the geico team worked hard to get the proper balance across that that meant our premiums went up for our customers across certain classes of of of drivers we they worked hard to segment that customer and by the way that happened across the the auto industry generally speaking you saw saw an increase in in the overall premium as they 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 met we've seen unprecedented shopping activity across the auto space and you see the advertising that's out there they're pursuing customers and they're pursuing the Geico customers so yes we there's a an important balance I want to highlight to to all of you is that and this is what our Geico team's working on yes we have to get the price to risk right but there's two other important things we really need to balance the second piece is we really do want to 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 the number one competitor in our industry progressive they just announced their first quarter results they grew by 11 percent and our team at geico fully acknowledge as i said that balance that they have to find across those uh the the three metrics including including growth it's not going to be easy to just restart the growth engine we acknowledge that but they understand the objective And as we go through 26 and into 2027, two important objectives, as I said, they have is, 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 quarter of i mean in the fourth week of march a great transaction by ajit and his team and and it's a strategic transaction in that and i'm highlighting that because yes there's a financial aspect of it and we're thrilled with that but it is a long-term strategic partnership and when ajit's on stage I'll have them I'll have them expand on that so well done as you can thank you to you and your team a great great transaction for Berkshire now I'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 U.S. 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 um we we have a lot 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 our and work on how we can move our our cars quicker and and meet our our customers 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 very 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 just not as one you're not as efficient but the congestion and everything comes with so our team's been very focused on that and then how do we best use our employees Well, that's something our team's working hard on, 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 U.S., and we're one of them. And you can see that last year we were fifth out of sixth, 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 with our 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 percent you see for Berkshire that's the operating profit that came back to BNSF associated with its underlying operations. That operating margin improved by two and a half percent, 250 basis points. That's a very positive outcome, obviously. And by the way, in fairness to our team, that's the work they've been putting in. That was that on a nominal basis, that was the largest improvement across 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 over 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 right or or something we've identified we like to identify the gaps and where we can get better is technology and we're doing a lot at bnsf and i'll touch on our other businesses uh here when i uh go through technology but that's where we see a step change or or potentially where our a few of our peers have gapped out versus where how we're using technology. 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 in 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 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 for globally and for the uh and for our country but there's also risk within our businesses and as they just start heading down this path i said well okay how should we think about this how are we 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 uh with these engineers we have and and these highly skilled individuals we've brought in, but how are we going to manage it? Well, the first thing was that we still have our employees, our senior management team involved in implementing the recommendations that we then receive associated with the 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 or within that, 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 and I like to call it the constraint we know we're constraining our data we know what data we're using and we know what data is coming in now when you talk about all the operations that we're focused on yes the next day of operations come in and it updates that that that data set and we may get a different if we ask the question the day later we'll get a marginally different answer it's got new information but if we ask it well if you ignore today's information and just focused on yesterday do we get the same answer yes so we we call that our safeguard and then the third thing on technology and associated with this narrow ai is it has to be 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 that, but I want to let you know it's 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 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 a artificial intelligence everybody talks about the large language models and okay they're learning models and there's a lot more to it than i just highlighted but i summarize it as one thing and this is why there's an opportunity across all our businesses those large language models i really communicate them and i communicate them to our teams or at least it helps me understand it they're large logic models we're at this point in time we're using it to solve logical challenges in our business and what we're trying to do it is in a more efficient fashion I 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 is the right approach for both our states and our customers. But I would highlight it's not new to us. If you just go across the river a little bit east to 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 eight percent of their peak load and the only reason i highlight that eight percent 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 geez hopefully in the next five years they'll be from a relatively starting point they want to get to the five to ten percent and we're already at eight and we see opportunities to grow that by 50 percent over the next five years or potentially more but we'll do it in a way and you're starting here more and more of this across the U.S. 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 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 can go back to mid-american if you look at their with all the data centers and hyperscalers and then and the infrastructure they put in place their rates are still 45 percent 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 U.S., 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 natural 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 and it's a fair it's it's over the long run it's been a very bounced and fair return but but how do you measure that it's versus the risks we take on in that business and that's the compact okay you're going to pay us x percent 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 bounce we don't deploy our capital back into those businesses we're into those utilities said and we work hard to maintain it but there's been a very important challenge we've had within that we've touched on the past too and that's wildfires wildfires in the west very prevalent the last 50 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 we there was causation and where we were responsible for it but there was also associated with some of the fires and specifically one fire a class action lawsuit that was had very large claims against our utility there pacific corp and and we had to approach it such that we'd resolve of 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 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 reversed and remanded that liability verdict and said, back to ground zero, start over again. And what they're 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. is some positive things associated with it we we recover a billion dollars of security we've already posted the people the the the law firms that pursued it are responsible for our costs associated that period of time not not our litigation costs but the the costs we incurred in posting the bonds or posting that security that's 10 million dollars or approaching likely 10 million dollars 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 balance and getting the right outcome and we do want to see these utilities move forward and we want to be a very good operator and steward of those assets for our our customers so the last thing i'll just touch on wildfires so when you think of pacific corp yes we've addressed that challenge but to get the right compact. We've worked with Wyoming, Idaho, I've touched on Utah on this stage to say it requires a judicial system that supports the legislature, the laws in place, but more importantly we all or as importantly we need good legislation that then sets that that balance. We've had it across those states and will continue to work hardly work hard across our other states. So 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 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 Donegan 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 mark in that in that position he understands precision cast parts inside and out he understands the industry and very much works towards delivering solutions for our our customers the second important part of metals group is a business called imc and there are international if you can hear the management team over there international metal working uh company and it's really interesting to see that company when they make the tools that removes uh that remove steel so they'll take a cylinder steel they create the tools and then that gets utilized in a variety of other industries it can be the aerospace 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 or i'm highlighting a backlog if we look at what boeing just announced last quarter or this quarter but just recently their number of planes that they delivered went up by 11 percent 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 the backlog in this space it's 10 years and i i did ask our team this 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 was sort of obviously knew part of the answer but it's really remarkable why there that is that demand and and a lot of us know this but the reality is to see what's driving it is the efficiency of those planes and engines is so great now that it's better to buy the new plane and retire the own the old plane and what you have is this 10-year backlog that we're seeing a very similar backlog across our metal businesses when you touch on a 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 percent of it and again we're very fortunate to have the senior leader there jacob harpaz who was at the business the senior leader running it back then and still runs it today if i look at what how precision cast parts and in imc works together precision cast parts is now if not but very likely imc's number one customer we have them working on joint solutions now move to that third group in 2022 we acquired allegati and we're fortunate to have that in the family now in a in a very good addition but along came also with it came three non-insurance businesses or a variety of other ones they're tucked into the appropriate place in other businesses but one of them that is standing that stood alone was ww steel and it's a it was a family founded company it had transitioned to rick cooper he's he's here over in the manager section he's the ceo and it's a remarkable business they create basically they contribute uh steel into a variety of core infrastructures It can be bridges, it can be stadiums, it can be arenas. Their most famous one is the 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, it's 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 OxyChem last year. Associated with OxyChem, we announced the acquisition. We closed it on January 2nd. Very nice addition. I would say 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 it 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 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 it's really amazing because it's the catch-all 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 on all the core industries in the U.S. and again a remarkable asset that we have and and will continue to create strong value for our owners and shareholders. Now the second piece of the manufacturing group is our building products group. I'm not going to go through all the businesses in there because we have one that is the bellwether and it tells you how the rest of them are doing. That's Clayton Homes. The other businesses will their results follow very much very closely that because with clayton homes we're building manufactured homes or site built homes and there's a lot that goes into it and our other companies provide both products to them and across that that space so it could be the insulation paint carpet a variety of other things you look at clayton's results if you go to the manufactured side of the business. Our results are down on 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 build, i.e. home builder, they're down around 5%. And the numbers I've been seeing for last quarter are probably more like seven percent across the industry uh and that and that's obviously driven by where interest rates are in certain other challenges for the uh for the consumer but where's the opportunity and and and i'll touch on the challenge where's the opportunity in these businesses and and how is clayton tackling it um it's very much around pursuing the american dream and can we help deliver that and what i what i have is a going to have our team bring up a video a slide that highlights this is actually a 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 if you're comparing it to this but the reality is um this is where the opportunity is is within Clayton. We want to deliver on an affordable home to the American consumer. This home you're looking at, 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 on-site built two-bedroom family home living space very very beautiful living space for $249,000 delivered including the lot that's that's absolutely incredible that's delivering affordability to the consumer now the cross mod how can we get it to that price 70% of that home is built in our manufacturing side of our facilities so those manufacturing homes we produce we now use it the last 30 percent is built by our site builders they bring the street appeal and all the features that as a homeowner they may want so it's a exceptional product now we don't stop there we still have a very strong culture around the manufactured homes and and how how can we 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 the box square box but it 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 thirty five thousand dollars we can deliver it they still have to get their lot or rent one but the reality is we're creating homes that people can afford and that's really where the opportunity is is within Clayton so very proud of what our team's doing there. Now lastly, I'm going to move to the service and 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 And like myself and how we've always done it, we'll 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 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 and activity associated with that in our first quarter of the of 2026 we purchased uh 235 million dollars of of berkshire stock um you can see that reflected on the 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 shares and we do that literally Warren and I will be discussing this on a daily basis and and how do we feel around the the overall value it's not daily but if we think about it daily and 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 that a BNSF is recorded on the books at the original price we bought it at versus what's it valued at today. You can go through that exercise. or if I think of it more as how we would think of businesses when we buy a stock or a full company we think of it as we have our balance sheet we know what our cash is we know what our U.S. treasuries are we know what our equity investments are they're mark 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 five years ten years from now and then the other important part of that equation is how do we redeploy that capital that comes off of it and that's really the the approach we take to the intrinsic uh value now let's move to our balance sheet uh the the very specific numbers um there's a lot of numbers here again i'll touch on a few captions. If you look at our cash and U.S. Treasury bills, there's a risk that people use the 397.4 billion as the headline number, because that is our cash and U.S. 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 seventeen point two 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. We've got the treasuries up in the 397 and we're still holding the cash. Accordingly, our cash in U.S. 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 $3 billion. Now, what drives that or what's the underlying numbers behind that? We produced a little more than close to $10.5 billion 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 five 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. Oxychem, we announced it and closed on it in this year. Last year we announced Bell Labs, a smaller transaction. We're fortunate to have it join. our company Steve Levy and his team great group there so 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 rally is that's not in that number we had the oxy transaction resulted in a little more than a three billion dollar decrease in our our results. So with that a very fulsome 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 as we transition to that session we'll have the geico video narrated by nancy thank you geico started out 90 years ago by trying to make things simple and giving a great price and service to customers and when you think about it today is exactly the same thing we're just continuing to try and perfect that and make it a little better

every day a little faster a little easier i'm nancy pierce and i became ceo of geico in december of 2025. Prior to that, I was the chief operating officer, but I just had my 40th anniversary with GEICO. I started as a claims associate in 1986, right at a college, and I've just had the pleasure over many, many years of working in, I think, just about every department or every sector that GEICO has. So, while I started in claims, I've been in pricing, I've been in product management, I've been in underwriting, I've had an opportunity to run operations in different parts of the country, But what really has kept me all these years and what has inspired me and I think inspires all 30,000 people at Geico is every day we're delivering for customers and we're doing something for them. We're saving them money on a product that, you know, everybody has to have, but maybe you don't necessarily want to use it. But when you do need to use it, that's really the moment of truth. And for us to be able to do that and to do it in a way that saves people money and gives that outstanding customer service, that's what excites me every day. And the reason that we have customers and will continue to grow is just keeping that as our North Star. And if we do that, I think Geico will be very successful over the next 20 years. Geico was founded in 1936 by Leo and Lillian Goodwin. And their idea was to come direct to consumers and to cut out the middleman and to have much better cost and much better service for those customers. So in 1951, Benjamin Graham took an investment in GEICO. And of course, one of his students was Warren Buffett. And that's when Warren really started to think about GEICO and to deeply try and figure out what we were doing and met with the leadership of GEICO. And that was one of his first very big investments, his personal investments. And then later, he started investing Berkshire Hathaway shares. And by 1996, he owned all of GEICO. From that beginning, we now insure millions of cars, trucks, RVs, campers, etc. We're in all 50 states, and we try and be there wherever the customer needs us. That's always been sort of number one. I think from the first time I met Warren or Greg or Ajit, they always start by talking about integrity and reputation. and making sure that you're doing the right thing for customers so it's something we live and breathe every day at geico and it's just it's absolutely a big big part of our culture obviously berkshire hathaway was founded in in some ways on insurance and being wholly owned has just been terrific for geico and terrific for our our customers over the years because it really allows us to invest in our business and to make long-term decisions not quarterly or annual decisions on what's best for growing our business. And, you know, obviously Berkshire has many other insurance companies besides GEICO, and we do work together with them. GEICO sells many of their products, you know, today, and we continue to look and bring more of them onto the GEICO platform. There are always cycles in insurance. Sometimes there's bad weather. It's just making sure that the company's prepared for all those things and to deliver on that promise that we make to customers when they buy that policy to be there in their hour of need. So we take that very, very seriously. If you're involved in an auto accident, the last thing you want is to go weeks and weeks and weeks before you get paid and before the whole thing is resolved. So we really strive to do that now in minutes where possible, as opposed to in days or hours. Nobody really wants to spend a lot of time with their insurance company but when they do we want to make sure that they're getting the very best service as fast as they possibly can so when i think about innovation it's really about things that are going to allow us to handle claims faster than anybody else in the industry what i'm really focused on is our customer loyalty and retention so we want to improve those um it's a very competitive market right now um you know everybody has come out of um sort of a an unusual period out of COVID in regards to frequency and severity. So I think everybody now, all of our competitors are in the mode to try and grow. And the best way for us to grow is to retain, you know, every one of our customers. I think that what I'd like to communicate is just that every day, 30,000 people at GEICO go to work in support of millions and millions of customers.

And I want you to know that that's what the GEICO team is delivering for Berkshire day in and day out. is a reputation of doing the right thing saving customers money and just giving outstanding service thank you nancy and to the geico team thank you we've got uh an exceptional leader in nancy and again appreciated taking on that that senior role welcome ajid uh yes it's great to be up great to be up here together as you if you don't mind i'll start with i touched on tokyo marine an exceptional transaction exceptional relationship i know you've built over many years with the tokyo marine management team but if you could just expand on that strategic transaction and relationship we'll love to start with that sure thank you uh tokyo marine and fire is the largest non-life insurance 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 Tokyo Marine and FIRE. It has not been easy because one of the things we bring to the business is a capital partner. And Tokyo Marine were 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 eight, ten 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 will 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 U.S. dollars, and we got two and a half percent of the stock of Tokyo Marine and Fire. That was one part of the transaction. Secondly, they have a good and profitable book of business in terms of what they write in Japan and elsewhere. We took a piece of the business, just that property casualty business that they write, and, you know, we compensated them for their efforts in getting the business, originating the business, and running the business. But we get a slice of their business 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 Tokyo Marine, they are a quality company. In fact, they remind me of the phrase that J.P. Morgan used, I don't know how many years ago, doing first-class business in a first-class way. And that is Tokyo Marine in the insurance industry. We have a general statement that we'll work with each other, we'll coordinate when it comes to finding opportunities elsewhere, running businesses operationally, and that is something that will evolve over time in terms of who's going to bring what to the party, and I certainly hope this serves as a springboard for both of us to move on to the next plateau.

Thank you, Ajit. 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 supported and excited by everything you just described, Ajit. 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 uh Warren Warren from Omaha I've recently undergone a let's call it a significant change in gold.

Well, let's just say a not insignificant portion of my net worth tied up in Berkshire stock. Watching this company for a while, a long time, a very long time, I've been telling people that I have no intention of selling a single share, not one. So my question is a simple one. I'm 95 years old. I've got nothing but time and cherry coke.

Just so I have something to tell my fellow shareholders why should they hold their berkshire shares for the long term anyway greg take it from here well uh well warn from omaha very astute question um if if i think of what we've already discussed this morning which is our culture and values and highlighted that's the bedrock of berkshire then what did it create it created the foundation that we have today and that sees this incredible set of assets that exists within within berkshire we have uh our insurance business uh led by jeet and his team and we've talked about the it being the heart with talent and opportunities because we have capital available and it'll be available at different times so 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 there'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 u.s treasuries and it it serves a couple purposes one uh and you've heard warren charlie say this before i've said it we do not intend to be beholden to anyone we start with that position thank you and it's how we manage 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 and it will be dependent upon the opportunity ie that is there is it a strong value proposition but if it presents itself we'll be prepared to act decisively and with and with significant capital that's what that's what it's there for um and we have well we will hand and and do have opportunities on the within the equity investments that we uh we currently have and and beyond that we have our operating businesses as I said, and 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's a conglomerate, and we recognize that but we are unique conglomerate in that we can move our capital very efficiently and that's the value of the the conglomerates 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 um uh how are we unique as a conglomerate we live by the fact that we hate bureaucracy we do not embrace in in in our thank you yes she's the biggest fan he reminds me constantly 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? What will define success is, can we ensure that Berkshire endures in its current form? That means we do business as we do today, consistent with the cultures, values, business principles we have, with 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, you know, 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 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 or a lot of us have heard about mythos and what's going on there um we're we're very focused on those risks but as you before we move truly to our first question um and you've touched on this many times when you when we think of cyber risk and we insure it what's what's our current approach across our insurance businesses and your Your thoughts, sir?

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. it. 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. We, I think, are as good as anyone else. Now, cyber insurance is very highly regulated by the regulators and we've been consistently above what the regulations call for. So I think we're doing the best we can, but I cannot be categorical about it.

Thank you, Ajit. Let's go to the now truly the Q&A session. Becky, we'll start with you, and thank you for being so patient.

Thanks, Greg. This first question, Ajit, let's follow up with the AI. This is slightly different, though. This comes from Billy DeRoss in Ardsley, New York, who writes, in an era of increasingly complex risk models and AI tools, where does human judgment still provide Berkshire a competitive advantage?

Okay. Becky, just repeat the last part of the question.

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

So AI also is very fashionable right now. 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 costs and doing routine, repetitive things. I do not think AI will reach a point where you can make a trade-off on things like pricing, settling a claim. That is still years away, and 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 Ajit, your team immediately went to, yes, the cyber risk, which we've already touched they then went quickly to the fact that really across the insurance businesses and it's that building concept that we're very focused on how do we become more efficient in in creating code and managing it they they immediately went to that aspect of it and then as you touched on becoming more productive more efficient and and they went as far to say i thought the example is really good i mean if if we were looking at a risk and we had our traditionally traditional underwriters doing it we might have looked at the five largest risks and your team highlighted that now we can pretty much in a fairly quick way yes we focus on those but we'll get a very quick view on another using technology we'll probably look at those other 15 risks and have a strong view on it is that fair yeah that's exactly so using it within the businesses but well aware it's evolving i think is a fair way yeah so thank you thanks sujit thank you now formally station one unless warren you're up there again hi everyone my name is lavia and i'm from irvine california born in quenming china and i really

want to say it's my honor to see both Mr. Buffett and Mr. Elbow today. I really want to say, Mr. Buffett, your speech has helped me get through many, many dark moments in my life and stand back up, not only in investment. I really appreciate you. Okay, my question is, as a young investor navigating both uncertainty and rapid technology change. I often struggle to balance patience with action. How would you personally distinguish between the two, please?

Sure. 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 U.S. Treasury is using it as 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 um 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 uh understandable view of what the economic prospects look like for the next five ten years not not yes the next year matters but we're not in that investment for a year it has to be a long-term view of where that uh where that opportunity will go we take it one piece one step further we're going to be in these investments forever so we think that way and we need to uh we we like to have a strong view on the management team that they're they're capable and operate with with high integrity and if if we can get to that position but the most important 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 earlier we'll act decisively both quickly and with significant capital. Rajit, anything you'd like to? Thank you. Becky?

Oh, this question is for Greg, and it comes from Mark Lunder in Miami, who says he's been a Berkshire shareholder for 30 years. He said, Greg, given your background as a business operator, which differs from Warren's roots as a public market investor, could you share how you balance your time between overseeing the wholly owned subsidiaries and the $288 billion now equity portfolio? Also, does your operator lens change how you evaluate new investment opportunities compared to Warren's historical approach?

Thank you, Becky. So obviously, yes. uh the the many years of uh operating a variety berkshire after energy and then in the role of the vice chairman of non-insurance operations fortunately that was um jean and i were in those co-rolls for 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 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 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 U.S. 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 very, we have a concentrated portfolio. And we highlighted that by calling it across the core. But the best name is really a concentrated portfolio of investments. And we had our core four 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. And closer to $185 billion right now. You then add in associated with, be it the other investments, you have a B of A, 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. The act of 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 our capital and 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 in our businesses so we're fortunate to have that but it's a it's a portfolio that's very manageable when you think of the the management around it and the and what's required of it the the as as we've touched already is the opportunity to deploy that cash in u.s treasuries at the right time is a very significant opportunity including equities including what we may see on our our on our within the operating businesses and including the the insurance side but um um so when it comes to allocating the time yes there's a certain amount of time spent on operations and and we'll prioritize that because we see a huge opportunity to continue to uh uh improve and close those gaps and operational excellence we see opportunities within our existing portfolio but that's that is either adding to them or right-sizing it, and then constantly evaluating what other opportunities are out there, either in whole, totality, acquiring a company that's private or public, equally looking at what are the incremental opportunities if we're going to own a piece of a company.

And those are evaluated in the same fashion, i.e. we look at, as I said, economics and and really tied to the the the last answer any thoughts sir 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 say it.

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 have still have opportunities to get better yeah it's continuous improvement and we'll close those gaps but we have exceptional teams there and be it myself adam we spend our time making sure we're comfortable how the capital is allocated we understand the risks and then are we aware of those gaps so thank you becky let's move to station two good morning mr evil and mr jen my name is jackie han from china

currently working toronto canada this is my ninth book share meetings so i guess i'm officially a repeat customer and like the most shareholders i plan to stick around for the long term over the years mr buffett has often said that capital allocation is berkshire's most important responsibility. Today, we are in a very different environment. Interests are higher, cash actually earns something again. And competition for quality assets has increased globally. The station lady actually read my mind a little bit. Actually, my question is, how should long-term investors think about their capital allocation approach today when patients have a real opportunity cost? And also for Mr. Abel, as you step further into this How do you personally balance patients' V.S. action, especially when standards are shaped by decades of Mr. Buffett's track record? Thank you.

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 three years from now, two years from now? But there will be dislocations in markets that, again, will allow us to act. And that's where the both disciplined approach, knowing how we're going to 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 a i'll be careful because i i wouldn't want to say we we long term we'd be happy on those companies because there's excellent companies that have excellent management teams that 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, i.e. 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 patients for over maybe, quote, action. Again, it aligns to I took this role and I'm so fortunate to be in it and work with and others but we do it because we we love and believe in Berkshire. Warren brought this great commitment to Berkshire a great understanding of Berkshire and passion and and with that he wanted to create something that was very long term including the opportunities that would it would create personally and i know all of us we bring that that same passion and we fully intend to do it consistent with how we've uh how we've done it in the past so thank you yeah yeah please i should have thank you uh you know insurance much like investing is a game that requires patience

and it is very difficult to get people to sit back and do nothing when i recruit people my modus operandi i tell them right up front i said i tell them your job is to say no you will get bombarded with deals day in and day out but your base case is just say no I said, every now and then, you will come across a deal that will hit you with a two by four, and it will be screaming money. That's when you come to me and we'll make a decision whether to do it or not. You know, all kidding aside, it is very difficult to sit there and do nothing while everyone else is being vined and dined by brokers and taken to London. and I think the real test of being successful, certainly in insurance, and therefore investing as well, is the ability to say no. Yes, well said Ajit.

I think it applies to insurance, and I think your earlier comment, I mean, it's so applicable across all our businesses. That's what it did remind me of one story, and I'll just share it quickly. We'd 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, 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 Ajit, you described it incredibly well. Thank you. Let's go back to Becky.

Thanks, Greg. This question is for Ajit, and the writer is Mindy Wasserman. The question is, how and when can you offer insurance to ships crossing the Strait of Hormuz?

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's a lot of chatter, there's a lot of need, fortunately there's enough capacity in the insurance world today that would like to right 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 small participation in a program that's been put in place so as to right 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 U.S. 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 3.

Good morning, Mr. Abel. my name is Josh and I'm from China so my question is about the key investing principle staying within your circle of competence I imagine you and Mr. Buffett each have a somewhat different circle of competence so how do you plan to manage the portfolio established by Warren Buffett. Thank you.

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 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 and yes it's a concentrated portfolio but you know their businesses will evolve and there's there's risks that may surface so we'll constantly evaluate it but it's it's it's a portfolio very very comfortable with And Warren touched on Tim Cook's amazing success with Apple, but 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. 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, in our team, when we talk about it on a more broad basis, listen, we're looking and saying, do we do we understand the value and what why that product has value and it's really that value to the to the consumer i think the the unique opportunity we have and so fortunate is that warren comes into the office each day it's fortunate that we get to discuss potential other opportunities that may be out there bringing a different set of skill sets but in the end we're going to narrow pretty quickly down to what's what's the opportunity why why is it valued why does the consumer whoever is using it the whatever industry is it it is what's where why will that company in that product endure and then associate with that where the risks associate with that and that and that 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 have a strong view in that and we're comfortable where we're at. Thank you. Ajit, Ajit, anything there? Becky?

This question is for Greg, but I think it's important that you take it while Ajit's on stage with you so he can answer some of it, too. It comes from Zachary Phelps from Medfield, Massachusetts, who writes, Ajit Jain has been described by Warren as irreplaceable. He's helped build one of the greatest insurance operations in history and has been the backbone of Berkshire's underwriting discipline. How were you thinking about succession planning for Ajit and the insurance business, and how do you ensure that the underwriting culture, the insurance moat, is preserved in the next generation of leaders? And Greg, I'll just add for compression's sake, I did get questions about your succession planning too, so maybe you can add that in there.

I don't know how I'm supposed to take that. 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 warning input from Charlie but But 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, you know, when Warren announced the transition last year, and as you don't recall this, the very first thing that happened was we left that meeting, there's a lot going on, And Warren said, 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 have been working with Ajit for a number of years and had other board opportunities where I had a wide understanding of it. 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, inaction and telling people, you know, take a few months off when they're used to being active is not easy if they're if they're that type of uh underwriter or or or selling products so that's the delicate balance but when it when it comes to jeet we're fortunate he's got an exceptional group that works with him and and then also operates a number of our critical subsidiaries they're they're deep in both knowledge and talent i would then also highlight our board takes the succession issues very sincere uh seriously both with ajit and myself we have a we have a plan they have a plan in place and they discuss it so uh if ajit were unable to perform uh in his role today or i was unable to perform our board knows what action uh they would take um ajit yeah uh so in terms of the culture and the underwriting orientation, which is so critical, there are a few simple rules that I've followed over the years.

And it's come at a cost, but I think net-net is still a positive. Let me just lay it out in terms of how I think about this issue. Firstly, we have a very small number of people who actually get involved in the decision-making. My top three leftenants in my reinsurance operation, forgetting about companies that we acquired, we have been together for 35-plus years now. And we've become friends. And the 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 individual, 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, but it's 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 right and just do stuff for the sake of doing your compensation question such a critical point yeah yeah the compensation thing having seen all these programs over the years, I remember having mentioned to Warren at some point in time, I said, Warren, you give me a compensation plan, I'll game it, you'll not be able to figure it out for years down the road. 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.

Hello, Mr. Abel. My name is Kansas, and I attend Elkhorn South High School in West Omaha. Mr. Abel, you may remember me from last year, and I'm here to question your company's business model again. It is compromising my future and the planet's future. Mr. Abel, in your first letter to shareholders, you wrote, Berkshire Hathaway avoids businesses that undermine the fabric of society, but Berkshire's electric utilities continue to invest in fossil fuels that are driving the climate crisis.

Can you tell me and my graduating class when Berkshire Hathaway's utilities will retire their fossil fuels, transition to renewable alternatives, and stop causing irreparable damage to the environment and my generation's future thank you thank you i i had a very uh long and extensive answer last year to the to the um question um and it is an important one but i think it's one we have to recognize uh when we and we we have I'll touch on rail or rail to we have we have certain companies where we very much operate now and this would be our utilities it would be our our including our our pipelines we we operate as a steward of those assets we we operate as a steward of those assets effectively for our states and for our 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 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 uh reduce the impact on the environment we're very sensitive to that and our our teams are absolutely committed to both complying and and absolutely doing it right um i would then add that if we're discussing our facilities for example across the River in 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. 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 that those customers that both bear the bear the cost and bear the risk and very much we're we are very respectful of that and as i said we're stewards of that do we provide input into that process absolutely so for example i i know i touched on this last year but if i look at our iowa utility uh this is this changes every year because of the load growth we've discussed, but if we look at on a 12-month, 365-day period, 93, it'll be very close on this, 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 we want to do it in a, call it a frugal way. We're not building for just the 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, it's putting a lot of pressure on the system, 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. It's going to put a lot of pressure on the systems and on the type of assets we use and the industry uses. Ajit, anything on the insurance side? Because I know you've gone on the insurance side as far as 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.

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 I 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 a an obligation that came with with that railroad just like our utilities there are certain things we do that are absolutely required and the key is that we do it consistent with uh what's required both federally and at the state level and that we're exceptional stewards of the underlying assets so with that uh i just we're going to move as you thank you we're going to move to uh our next session but let me explain how it's going to play out a little bit so we're approaching 11 o'clock as we transition we'll we'll we'll move to a net jets video again just give you some uh more knowledge on net jets 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 1145, 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 them. As we take the break, there'll be a couple other activities. One, you'll get a three-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'll 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.

Back to CNBC's special coverage of the Berkshire Hathaway Annual Shareholder Meeting. I'm Mike Santoli, live in Omaha, Nebraska. CEO Greg Abel and Vice Chairman of Insurance Operations Ajit Jain taking questions for a little over an hour after Abel presented a state of the business update. Abel has just called a break, and he also told shareholders that Becky Quick will interview Chairman Warren Buffett. That will kick off in less than an hour right here on CNBC.com. We have a big halftime show for you. Becky Quick is heading back over here to join us, and we'll speak with Occidental Petroleum CEO Vicki Holub, Berkshire's Brooks running CEO Dan Sheridan, and former Activision Blizzard CEO and longtime Berkshire shareholder Bobby Kotick. While this morning was the start of a new era with Greg Abel running things, Warren Buffett stole the show to start off. He began with it began with Greg Abel thanking Warren for his 60 years running Berkshire and raising a Buffett banner to the rafters of the arena, symbolically retiring his number 60 jersey. The crowd wildly cheering this moment. After that, Abel turned over the mic to Warren Buffett himself, who was seated on the floor. Buffett started out by saying how happy he is with his decision to turn Berkshire over to Greg Abel, saying we couldn't have made a better decision, adding that Greg is the right person. Buffett then trumpeted Berkshire's biggest holding, of course, that is Apple.

Ten years ago, we made a commitment to essentially move 10 percent of the resources of Berkshire Hathaway. We turned it over to another person who was not that well known at the time. time, and we did that by spending roughly $35 billion buying stock in Apple Corp, and we're 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.

Buffett also took a moment to recognize CEO Tim Cook as he gets ready to step down this fall.

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. Tim is right by me.

Warren did not make mention of the fact that Tim Cook is retiring at an age 30 years younger than Warren himself did. He's at 65 right now. Now, following all that, Greg Abel then went into the business update. One of the things that struck out was AI and the need for Berkshire to build out its own tech infrastructure to work across all of its businesses.

First and foremost, we recognized we were going to become a builder of technology rather than just a buyer of technology and that meant that instead of we had a number of systems and we often bought the related applications or software that came with it and yes it's it's a valued 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 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 so that was greg talking about the need for uh you know cross investment across ai ai a little bit of a sub theme of course in the morning in various ways yeah i mean i think what's so different

about this meeting i know what you said before i got back here is just the amount of information that Greg and then Ajit kind of unloaded on the investors about the businesses that they own, on the shareholders about these businesses that they own. The only thing I'll say is somebody who sat here for a long time and had a lot of questions from shareholders, I was checking off questions left and right that he was answering before we even got to on some of these things. So he went pretty deep into this.

And I think if you're a shareholder, you probably feel a lot more comfortable kind of understanding, A, not only a lot about these businesses, but also realizing b greg knows an awful lot and very deep on all of these businesses too definitely conveyed sort of the breadth of his grasp without a doubt there was a density of the information also i think warren and charlie while he was here they sort of assumed a level of familiarity with the broad outlines of the business not having to explain necessarily the insurance float and how much flows through but i do think there's value in bringing people up to that point also i i detected even though he's never going to have any kind of corny corporate speak about synergy yeah he was drawing connections he was talking about there's a metals business within the industrial businesses that all sort of have a connection to each other yeah and they whether they were customer of the other um and so it's not to say that the conglomerate magic works because everything fits together right but it's not random right and and and again on the ai on touching on the idea that you have these centralized office office operations i've still got to go back and look through some of these questions to see which ones still apply on all of those levels.

Is this still a decentralized kind of minimally oversight? He said, we're not going to have bureaucracy, but it sounds like it's a lot more centralized, at least in notion, than it has been to this point. And there's certainly a lot more attention coming on operations.

He refers to operational excellence. It seems like it's a kind of an internal catchphrase. And that means something.

It means, you know, attention to margins or maybe some compensation uh things maybe just you know a closer eye on the other thing i'll say from this when ajit sat down with him the two of them kind of going back and forth that was a more comfortable conversation and a more um philosophical philosophical philosophical conversation i should say than i've heard in the past with those two and it was a little more reminiscent of charlie and warren sitting on stage together where they kind of ripped off each other a little bit Not on the same level, but there was a new level of comfort and a new level of kind of stepping into their roles and not worrying about looking over their shoulders about what anybody else was paying attention to with it. What Ajit was just saying where he was speaking about how they get down to the idea that you don't want to do like the key to doing something great in insurance is to not do anything. saying no just about everything. And then to tell all of the people that you have underneath you to make sure that their compensation is not based on them writing insurance for them to get paid. It's on making sure you're making the right choices and you're going to have a flat compensation structure no matter what. So you're not incentivized to go out and do the very thing that's going to wind up leaving Berkshire on the hook.

Yeah, the investment discipline was certainly a key kind of theme that came through as well. And that was one of those ways.

I totally agree with that i mean they were you know kind of peers within the company for a pretty long period of time running separate parts of it yeah it's just it's it's nice to kind of hear more from them not that this like a semi-evolution that took place over the last five months this is obviously something that was always there but they're able to speak a little more plainly and openly probably than they did before um so in the room were did people think that the the warren asking the question was for real or what was i don't think so you'd already seen him on the floor right well right or that it was a straight video as opposed to an ai it was a deep fake yeah and i and i'm glad greg acknowledged that at the end because i was thinking nobody thinks this is real right although there's probably a few people who might have right gotten fooled otherwise but i mean that's an interesting question by itself how good uh deep fakes are at this point i have to not you know it's no longer believe half of what you read and and or not half of what you see and nothing of what you read. It's now believe nothing of what you hear, read, or see. Yeah. Trust but verify, I guess, on every day.

Verify first, maybe trust later. Yeah.

All right. Berkshire is Occidental Petroleum's largest shareholder. And earlier this year, it acquired OxyChem. That's a deal worth almost $10 billion. That is thanks in part to the relationship that was forged by CEO Vicki Holub of Occidental. She now joins us live in Omaha. And Vicki, First of all, welcome. It's great to see you. Thank you. It's great to be here. The big news yesterday is that you announced that after 10 years as the CEO and 40 years with Occidental, that you're going to be stepping down next month. That's some big news. What brought you to that decision?

Well, the reality is that with an incredible leadership team and amazing employees and a strong board, we have over the past 10 years accomplished everything that we set out to do in 2016 when I took the role. What we've done is transformed our portfolio. We've taken it from a company that was 50% production in the Middle East with a lot of risk to now geopolitically much better where 83% of our production is in the United States. We've taken it from production of 650,000 barrels a day to 1.4 million barrels a day. We've doubled our resource, more than doubled. We've gone from 8 billion BOE of resource of oil and gas to 16.5 billion. And we've also been able to ensure that we had sustainability along runway. The portfolio is not just double, more than double, it's higher quality assets, so higher margin assets. And so now we've got 30 years of runway in our portfolio, assuming activity at the current level. But now we're not going to keep the current level. We will take advantage of accelerating this runway, this 16.5 billion. We can accelerate that when the macro allows. And what that's going to do, it's going to be a massive value creator for Oxy. And now that we've done all that we needed to do to get the portfolio straightened out, to get to where we are with the assets and the sustainability, now it's just a matter of developing it. So now we control our own destiny from that standpoint. We don't have to depend on M&A or any future contracts from anybody in the Middle East or anywhere internationally. We can decide when we want to develop it and at what pace. And so when we can, we're going to develop it. And we're going to develop it as quickly as we can, as long as, and it won't happen until we get that last debt payment down so that we're down to $10 billion in debt, principal debt. After that, we're free to take what the macro will give us while also spending some of our capital, returning it back to the shareholders through share repurchases and dividend growth. So we have the ability to grow organically, to then grow the dividend, and to provide shares repurchases. I'm so excited about it, too. And the reason I'm stepping down is we have for a long time had a great succession planning process in place. And I've had the support of it, as I said, an amazing leadership team. And so we were able to accomplish all of this while building the culture and increasing our technical capabilities. So we did all that. So we've checked all those boxes. But now we looked at our top successor and what we need to do now in the next 10 years. And we felt like he was better to do that. He's better. He's going to be better at doing that than I would have done. What's the goal for the next 10 years? Next 10 years is this organic growth. And so that's going to drive our stock price up, I think, tremendously over the next three to five years.

You said when the macro allows and take what the macro will give us, that's kind of a significant when and if, I suppose. What does that look like when things clear up?

Yeah. And I'll point out one other thing. While we're going to take what the macro gives us with the growth, what we're doing now is creating incremental free cash flow by just reducing our cost and increasing our efficiencies. I think that we have the lowest capital intensity of anybody in our industry, and part of that's what Richard Jackson has been driving to get us to that level. So now, with respect to what the macro is going to give us, I think that this disruption in the world with respect to oil, I think that's going to have a hangover effect. That's going to carry on. That's going to, I think, cause shortages. And probably starting by mid-next year, we're going to be in a scenario where there's going to be a lot of places that need to start developing oil faster. And because of our lower break-even costs than anybody else, we shouldn't be one of the ones that are first to the gate to start that process because we have a break-even of lower than $40.

If you think that there's going to be the shortage come in the middle of next year, where do you think oil prices are going to be as a result?

I think oil prices are a bit suppressed now because of what's coming out of all the strategic petroleum reserves around the world. So I believe that by mid-summer this year, We're going to start seeing that prices without some growth starting to happen will start to go up. And so I think that by the time that we're ready to start our growth, and again, that would be when we get to the $10 billion, that would be later this year, first of next year. So we'll be a part of that process to help build back the supply of oil for the world.

You're undergoing a CEO transition, same time Berkshire Hathaway is. What's your, I guess, the relationship with Greg, and has he bought into the plant from here on out? Obviously, they're very large shareholders still.

Yes, and we do with Greg what we do with our other large shareholders, and our team does with any shareholders. We want our shareholders to understand what we're doing, how we're doing it. So Greg has been involved in a part of the process of understanding what the business is going to look like. And I think Greg is amazing. The OxyChem deal now, he's a tough negotiator, but he's honest and he's fair. And so we've built a great relationship.

Explain that. Tough negotiator as in what? The OxyChem deal or other stuff that was going on?

Only OxyChem deal. Let me clarify. So on the OxyChem deal, he is into the details. And he doesn't forget. That's why he could sit there and talk about all those businesses. He knows those businesses like the back of his hand, and now he knows oxygen in the same way. And we had great discussions around it. That turned out to be an incredibly good win-win for us and for them because that debt reduction we were able to accomplish with that frees us up. So that just right now we're at $13.8 billion in debt principal. I believe that by the end of this year, first of next year, we'll be down to the 10. and then that resets everything that we can do that finalizes the transformation for us and then we're off and running.

Vicki, thank you very much for being with us today. Vicki Halep, it's a pleasure seeing you. And thanks for talking to us about the succession planning and congratulations. Thank you. Appreciate it.

All right. Well, Berkshire Hathaway's almost 70 holding companies give it a unique view onto the economy and the consumer. We caught up with some of the company's CEOs here on the floor to talk about just how the consumer is faring right now.

I certainly have to acknowledge that the consumer attitude is a little bit different. I watch the University of Michigan numbers very closely. I know exactly where it is. And what I know is our numbers are up for the year. And I'm very thankful for that because I also know the confection industry fairly well. And I don't know that others can say quite that.

It's definitely a headwind for Benjamin Moore. Number one driver's housing churn at Benjamin Moore. And with affordability issues, mortgage rate issues, and confidence, it's been a strain. There's no doubt about it.

Yeah, we've probably seen a little bit of a change in our trends over the last month or so. But there's a lot of factors influencing the consumer, so sometimes it's a little bit hard to tell what factors those are.

When we think about the consumer, you end up in two tiers right now. If you are affluent and you are looking at your retirement accounts, the market's doing really well. And those consumers are looking for new experiences. However, if you're in a lower income demographic right now, when you think about persistent inflation, interest rates that are still relatively high, not by historical averages, but for recent years, these consumers are pressed. They're trying to manage strained family budgets.

I think that what we're trying to do at the end of the day is just be mindful of that we do have a consumer base that is ultimately forced to spend more money on certain other things that they may have been had more money in their wallet before gas prices are obviously rising.

Let's hear from one more Berkshire CEO on the consumer. Dan Sheridan, CEO of Brooks Running, is right here with us. Good to see you, Dan. Thanks for having me.

So in general, been a pretty competitive environment for a while for running shoes and things like that. you did report your results a pretty decent growth what are you seeing broadly speaking yeah customers we q1 was fantastic for us grew 23% globally a very broad growth story for us all regions growing double-digit our core markets really really strong and we're seeing the consumer be very very durable and strong right now so we're excited about the future for for our growth and obviously for the category we're competing in what do you attribute that strength?

I mean, I guess you say the category. It strikes me that while we talk about a lot of the relatively newer entrants into running shoes in particular, there's also such a focus on the technology and on like the new thing and how it can help performance.

Yeah. Well, the first thing we always track is participation and participation in health and wellness, specifically in run and walk is at an all time high. We think there's 52 million runners in the U.S. that run twice a week globally we think that's up to 600 million so that's the the foundation of our business on top of that is performance matters in people's lives the last couple weeks in the marathon we've seen epic athletic achievement and for under two hours so what a great spotlight for our sport and that's driving interest as well the general theme of health and wellness around the world though is is a one-way street we think and more people than ever, running, walking, and staying healthy.

There was a big deal about the under two hours, though. That under two-hour marathon was wearing, what was it, Adidas shoes? And that was a big deal because Nike had been talking about that for so long. Obviously, you guys are shooting towards that, and I know you're hitting records in other places, but how important is that specific mile marker, and how do you compete for that? How do you go after that?

Well, first off, epic athletic achievement. So good for our sport. running is at the center of everybody talking about it so we sit right in the middle of that with innovation becky and we were talking off air about this the shoe matters for the athletes and so we have always been a company on innovation and r&d for our athletes and everybody that moves and and that's why we have the number one market share here in the u.s in run we just became the number one brand in germany to highly technical markets and our products and brand is right in the center of that so we love it when there's epic athletic achievement like that you have kind of a new sub ceo running your group the consumer products and services area of berkshire hathaway adam johnson what does that mean for you at this point yeah well new obviously for us and and what i've been talking about this week is just the consistency of leadership at berkshire we've seen it with greg over the years but now we're seeing it with adam and i couldn't be more excited to have more interaction with Adam and start to learn from him. But consistency, this deserved trust, empowerment that has the bedrock of Berkshire culture is still the same things that I'm feeling from Adam and from Greg.

You know, Dan, we were just talking about whether there are kind of ways to cooperate with other Berkshire businesses. And I don't know. Brooks is such a unique company. I don't know if that's the case, but you tell me. You're here with the managers. I think everybody had lunch yesterday, I'm sure you're talking to all of your colleagues all the time on this. What do you learn from each other, and are there ways that you can work together?

Yeah, I think this weekend is a moment for us to network as peers. The lunch is one way, but what I try and do is spend time one-on-one with some of my peers to suck all the information I can and experience from them. And so this is a moment where we get to network and those networks, you know, last throughout the year. And so it's more one-on-one networking than in groups, and we've been fortunate to do that this weekend.

Is it about requesting further resources or requesting the freedom to do more of your own thing or any of those things?

Yeah, there's not one way. This is the best part about Berkshire's empowerment and decentralization. I think all of us independently operate, but there's access to be able to share ideas and solve different problems. We are solving very different businesses here, but there's some common themes in the macroeconomic environment, in geopolitical ways. And so we do find times to connect and share what we're all dealing with.

That's great.

I was going to say, what's the kind of frontier in terms of your technology, innovation? like what's next and how tightly are you trying to squeeze out little bits of performance yeah it sounds like you're on it mike i mean this is this is the game innovation in our space is just ramping both in terms of how fast innovation is coming for runners midsole compounds and weight in running right now is really the the arms race and so we've got uh great midsole compounds that are reducing weight, still giving the runner cushioning and resiliency and rebound. And so all of us in this category are in this arms race to create performance products that improve people's lives, which Brooks has done for 25 years. 25 years now, we're on a 14% compounded annual growth rate. So consistent growth over that time based in product. So an arms race for the foot race.

That's right. Dan, good to talk to you. Thank you very much. Thanks for having me. And Sheridan, CEO of Brooks Running. Let's get down to the floor here in Omaha. CBC producer Katie Kramer is at the Oriental Trading Company's booth. So, Katie, what are this year's hot items?

I get the best assignment every year, Mike. I get to check out what shareholders are shopping for on the exhibit hall floor. And this year, Greg Abel is a new character in so many different branded items. We've got squishmallows. We have got candy. We've got spatulas from Pampered Chef and collectible ducks. From Oriental Trading, this year, Warren Buffett, Charlie Munger, and Greg Abel, available as rubber ducks, and Oriental Trading CEO Steve Mendelik is here. How fast are these selling?

Yeah, they're selling like hotcakes. Warren obviously is still a feature for us, but Greg has reached icon status this year. He's on the Mount Rushmore with Charlie and Warren here, and we're selling a lot of them. They're hot.

How many? Like 1,000, I heard.

Yeah, we're over 1,000 ducks sold so far. So they're rolling, our top seller.

This is the liveliest that the floor has been, I think, through the shareholders meeting. We've got crowds of people here around. We've got Flo, the Oriental Trading Flamingo. We've got tons of materials that people are taking home to share, to enjoy their experience here in Omaha. Are you going to sell out of the ducks, do you think?

You better hurry.

If you're in the building, you better hurry. supplies are limited very much you've also got squish mellows that have got greg able's face on them this year you've got some collaborative items with bnsf with net jets uh with seize candies these candies has got 11 tons of chocolate over there so this is the moment when shareholders really uh empty their wallets and fill their luggage for all the great stuff they're taking home with them excellent katie thank you very much looks like there's a lot of activity back there, too.

Right now, we're joined by a longtime shareholder of Berkshire, former Activision Blizzard CEO Bobby Kotick, who has been coming to this meeting for how many years? I ask you this every year. It's more than 30, right?

More than 30 years.

More than 30 years you've been here. Bobby, I just want to ask you, as a long-term shareholder, as a long-term Berkshire follower, what did you think of the meeting so far?

What was it like sitting out there it was fantastic i have to say i greg handled himself fantastically well i think ajit adds a great dimension to the stage warren's presence especially his ai presence i think added special value and i think the business is in terrific shape if you were to think about this company and its current market value, if you were to revalue the equity portfolio to let's say the historic mean of the S&P, say 17 times, that's maybe about 70 or 80 billion dollars of risk. The operating businesses trade way below 17 times, probably closer to 10 times. So there's a lot of upside in Berkshire.

Well, you know, that's been a question that has come up. we haven't gotten a chance to ask if they've been on stage yet, but Berkshire has underperformed the S&P 500 pretty significantly over the last year. S&P's been up by about 29%. I think Berkshire's down maybe 12% over that same period. Maybe a little less, maybe it's 9% down over that period of time. But when you look at that, what does that tell you as a shareholder yourself? What do you want to see? What do you think of it all?

Well, I think it was one of the first slides. They're buying stock. and maybe not as much as people anticipated but I think we saw today you know there was a substantial amount of stock purchased and we're sitting on 400 billion dollars of cash so I see nothing but opportunity I you know I like to buy when they like to buy are you buying back shares are you buying more shares of Berkshire rather not say but I think you know I like to buy when they're buying. And I think that was a vote of confidence.

Okay. I did find it interesting. First of all, Greg was at pains to say that it wasn't quite as much cash as is portrayed in the 10Q file, like $397 million.

The $17 billion they still have.

Of a T-bill purchase that hadn't settled yet. So there's some double counting. So fine, $380 billion. But it seems as if some of the things that Greg said were meant to kind of put the investment portfolio a bit off to the side, He emphasizes the four very large core holdings, which are kind of there forever, as well as the Japanese businesses. And the rest of it, he sort of says, well, it's not really that big and it's not all that actively managed. Does that say to you that he's mostly focusing his energies and attention on just the operating businesses and what else in terms of bolt-on acquisitions he can do as opposed to the portfolio?

No, I don't think so. I think he's very engaged with Warren on those discussions. I think he's thinking a lot about the investment portfolio. I think if you look at Apple and Coke in particular, they're both going through CEO transitions and they are being managed with excellence. And I think inspired a lot by the Berkshire transition. In fact, I talked to Tim Cook last night and that's the first thing he said is he wants to be recognized as the person who's managed succession better than anyone. I said, well, you've got a tough, tough comparison on both ends.

When he took over for jobs and now he's handing it off again. I was joking that, you know, Warren was polite enough not to say why are you retiring at 65? You've got 30 more years left.

Bobby, I want to talk to you about that. As a former CEO yourself and somebody who knows the stresses that come with that and the huge responsibilities with that, we've seen a lot of executive turnover of some very long-term, well-known names, big companies. You mentioned Coca-Cola, where you were a board member before, too. Tim Cook with Apple. You've also got Bob Iger turning you over. Vicki Hollib was just sitting here. Doug McMillan stepped down. There's just this long, this big number of relatively young people in a lot of cases. Doug McMillan was, what, 60? James Quincy is 60 years old, too. So you're talking about people who are young. And some of them, when they sat down with me, have said, look, it's really tough to think of what AI is going to do. and that's going to be a five year transition. How do you think that through? Is that what's happening here? Is there something else? Is it just a good time to step down? What's your take on all of this as somebody who's been in that role?

You know, I think in every one of these cases, it's something different. I think in Apple's case, Tim's done this for a long time. I think he has realized that there's an opportunity for product innovation. And somebody like John, you know, is head of hardware engineering. You probably couldn't pick a better person for the next decade of Apple and the need for innovation. I think at Coke, Enrique is a fabulous successor. I would have loved to have seen James stay longer, but I think that the demands of these jobs are great, especially companies like Coca-Cola, where you're operating in 204 countries around the world and you're traveling to those countries. But I think Enrique will be an excellent successor. I think in Doug's case, he acknowledged that the AI transition is going to be one that probably needs different leadership. And I think in a lot of these cases that you're citing, you have CEOs who realize their limitations and the opportunities for somebody new that's going to continue to create shareholder value for the businesses that they've run. And they're so convicted to the future success of the company, like you see at Berkshire, that they're making the right choices.

As you look at Berkshire, I mean, And it's understandable that we've been portrayed, AI could be much more of an enhancement to a lot of what's done there as opposed to them being disrupted by it in various businesses. But I was fascinated by what Ajit said about cyber risk related to AI and how he just has a hard time figuring out how to model it. Like, is one incursion going to proliferate? How are you going to aggregate that risk?

Well, the beauty of the AI is it will model the risks for you. Or show them to you. It will give you an opportunity to then assess how right or wrong has the AI actually given you the ability to assess it. But those AI tools are going to be incredibly useful. Then you look at these operating businesses. They're run incredibly efficiently from an SG&A perspective. But there's no question that there's optimization opportunities. Just think about risk calculation in the insurance business. AI will be an enormous contributor to reassessment of risk, reassessment of pricing. I just think all these operating businesses over time are going to have a great benefit in efficiencies and opportunities from AI.

What do you want to hear more? What have you not heard so far that maybe you'd like to hear in the second Q&A session? Asking for a friend.

Well, you know, I think they're not going to talk a lot about the macro environment, but I would like to hear their perspectives about the macro environment. I just don't think that that's something that historically they've spent a lot of time talking. I think when you look at where the S&P is trading, and you think about 26 times multiple, and a 100-year mean at 17 times, we will regress to the mean. And so, but I almost think it's implicit in the cash balances what they think about the opportunities going forward.

You would think, I mean, because Persia was so somewhat early in identifying Japan as an opportunity for kind of rejuvenization, whether he might have a view on that, if he gets a question on that. Because I know that Greg was kind of close to that transaction.

Right.

I think they answered that with Tokyo Marine.

True enough. Yeah. Through your actions. Yeah.

I keep going back to just the structure and how it's changed. And I will tell you, I've been hearing from a lot of people who have been kind of texting me and telling me what they're thinking from the arena while they're sitting in there. The general impression is people were pleasantly surprised by how much they learned in this meeting. Structures change, but I think they're looking at it as an evolution that, hey, may not be in what they wanted, but they're enjoying it to this point.

I have to say, I love the fact that they're actually doing more of a deep dive into the businesses. And I think that that's a great pivot. You know, you're never going to replace the Warren-Charlie dynamic. That can never be replaced. But for a company that's so big and so complex, has so many operating subsidiaries, going and actually doing a deep dive and showing the depth of the management teams across all of these businesses. I think that's a great pivot and not what I expected, but something that I'm actually really enjoying.

That's great. Bobby, I want to thank you very much for sitting here with us and talking this through. It's been a pleasure.

Thank you for having me.

And by the way, I'm going to head out at the same time. We've got Warren Buffett coming up in just a little bit. We might get the chance to ask him about some of those macro issues that you were just referencing about what he sees happening with the economy and stocks right now, too.

That'd be great. Thank you. All right. Well, get on back in there. I'll see you in a little bit. One other newsy nugget from this morning was a question about insurance and the current risk around shipping in the Strait of Hormuz. Here's what Vice Chairman of Insurance Operations, Ajit Jain, had to say about that.

The question is, how and when can you offer insurance to ships crossing the Strait of Hormuz? i mean the short answer is depends on the price as you know i uh i like your charlie answer um obviously some thought has gone into that because there's a lot of dynamics there yeah there is a lot of chatter there's a lot of need

And fortunately, there's enough capacity in the insurance world today that would like to right 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 small participation in a program that's been put in place so to write insurance for the ships in the 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 U.S. 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.

Greg Abel also highlighted of what makes Berkshire's business special and spelled out his ethos for running the company going forward.

How are we unique as a conglomerate? We live by the fact that we hate bureaucracy. We do not embrace in our... Thank you. Rajit's the biggest fan. He reminds me constantly. 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 let's get a deeper dive into this morning's q a session with our yun lee so uh yun you looked at the numbers this morning, of course, you were in on the session from Greg Abel this morning.

So what are your headline thoughts?

Yeah, he really spent a good chunk of time talking about the equity portfolio, which I think a lot of shareholders really appreciated because there were some doubts about how he was able to be this hands-on operator at the same time running this massive portfolio, right? So he talked about how he's thinking about it, the core four, that's Apple, American Express, Coca-Cola and Moody's and then the Japanese holdings and then some other significant stake like Bank of America and Google. So I think it's really interesting and I think a lot of people appreciate it. And also, like you said, last quarter, Berkshire Hathaway was actually a net seller of stocks once again, selling about, you know, a net $8 billion of stocks. And that's just not slight tweaking, right? There's a lot of repositioning going on.

Right, because it was $24 billion in growth sales and then $16 billion in purchases netting out to minus $8 billion. So yeah, that's not trivial. It's interesting. He definitely spent a lot of time on the portfolio characterizing how he views, I guess, different pieces of it. But those things that were not mentioned, like all the rest, I think it still leaves open the question of whether he considers them either too small to matter or maybe not worth spending a lot of time on?

That's a good question. What happens to the rest of the stock he didn't mention? And also the selling we talked about, a part of it I think is likely tied to the departure of Todd Combs, the unwinding of the positions he used to run, right? And because he left for JP Morgan at the end of last year. And we don't know exactly which stocks they were, but I know he said in the passed that Visa and MasterCard were the two first stocks he bought for Berkshire 15, 16 years ago. So we'll see if those ones are still there.

If they survive. Yeah, exactly. I think there was a lot, a little bit of suspense about how much share repurchase activity there was in the quarter. Obviously, Greg Abel had said they had restarted the buyback program over 200 million. And then it turns out it was 235 million total in the quarter. Obviously, a pretty small amount relative to a trillion dollar market cap.

Right. That's very small. And he he still sounded very, you know, conservative. And he signaled this, you know, disciplined approach to buyback. You know, they're evaluating the intrinsic value with Warren Buffett. And yeah, I think people want to hear more, more aggressive buyback approach.

Yeah, especially when you consider, you know, all the cash that they have. And now, you know, that's obviously a cushion and it's obviously ammunition to go and do something down the road if they want to do it. But a lot of folks feel as if, well, if you feel as if there's a positive expected return to buying your shares at these levels, maybe do more of that. Or they want to just wait for a bigger discount to their estimate of intrinsic value.

Right, totally. But he did sound like he's ready to buy new either companies or stocks when the price is right. And just judging by how comfortable he was talking about AI and tech and, you know, LLMs and the defake video we saw, I wonder if there's a sign that maybe Berkshire will be more open to technology investments going forward, because as we know, Buffett was a little bit hesitant because it was outside of his circle of competence before.

Sure. Yeah, it is interesting, especially when you consider, you know, some of these big formerly blue chip software companies that have actually come down so much in valuation because of AI disruption fear.

If Berkshire would see that as a dislocated deal that they could they could get in there yeah totally and to that point they added that alphabet stake it was pretty significant more than four billion dollars uh last year uh and then he did mention it uh in his you know session so there i think there are signs that they're getting more into technology you know i think we uh with tech being a big topic of discussion this morning abel uh did take a moment to speak about the role data centers will play in berkshire's energy investments listen up if i look at our peak load i.e the amount of energy being used from those data centers it's at eight percent of their peak load and the only reason i highlight

that eight percent 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 geez hopefully in the next five years they'll be from a relatively starting point they want to get to the five to ten percent and we're already at eight and we see opportunities to grow that by 50 percent over the next five years or potentially more but we'll do it in a way and you're starting here more and more of this across the U.S. 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.

Interesting. He's able to portray the utility business as essentially, you know, kind of newly a growth business, pretty ahead of the industry in terms of data center exposure, but able to do it in a way that's not going to harm local customers.

I think it's definitely welcome news that, you know, he's trying to expand into data center infrastructure build out. It's such a growth area.

Yeah, yeah, for sure. I mean, And I guess the other pieces of it at this point, they highlighted some of the connections among some of the industrial businesses. They talk about the building products area, even though they don't want to say that this is all meant to, you know, fit together like some kind of a top-down machine. There are linkages between these companies.

And he's talking about, he also talked about AI in a broader sense, and he's evaluating ways that can be additive to Berkshire's array of different businesses, right, and how they can be more productive and efficient.

Yeah, for sure. You know, that's a big part of the priorities here, as well as in the insurance business with G.G. Lee. Thank you so much. Enjoy the second part of this session. Now, we're now awaiting what was just announced a little while ago as an interview between our Becky Quick and Warren Buffett, who, of course, remains chairman of the company. And thereafter, there will be another Q&A session that's going to include some of the folks from the operating businesses as well. So that interview between Becky and Warren will happen back in the arena for all to see.

Mike, thank you very much. And I want to welcome everybody back in the arena and make sure you're getting time to get back to your seats. I know we didn't give you a lot of time for a break, so I hope you made it to the bathroom and you're back and getting ready to sit down. We are sitting down right now with Warren Buffett, the chairman of Berkshire Hathaway, who, for the first time in 60 years, has been watching all of this from the audience instead of being on stage. And, you know, last year at this time, Warren, you surprised everyone with the announcement that you were stepping down as CEO. Fast forward a year and here we are. What do you think?

Well, I think it's all working. It's all working. It isn't our ideal surrounding area or environment, I should say, in terms of deploying cash for Berkshire. But in terms of how we got the right management, we got the right arrangement, and we can pick our spots and and and nobody can tell us what to do exactly and and so sometimes we're doing nothing but other other times we get quite active I mean you know Ajit spent some time on the stage today talking about how one of his keys is to do nothing when it comes to insurance when it comes to writing insurance which is the same thing that you have always talked about with whether to invest or not yeah the world is full of people that are offering you things to do and then the question this is the fun find one that you know makes

sense and there may be 20 out there that makes sense that you don't understand it you just leave them alone you you said that the world or the surrounding environment is not ideal and I guess that points to the idea that there's almost 400 billion dollars in cash on hand although Greg took some pains to show it's really more like 380 billion dollars in cash on hand but that there's lot of cash on hand and you're still active in managing the portfolio too and looking at stocks you're looking around and you don't see a lot that you want to invest in well then we don't do anything I mean we better than up to 60 years I've been in the business you know there's probably five of them

and really juicy and I think it was Tom Watson Sr. of IBM that said they asked him the reason why IBM had been so successful or something like that and he said I'm smart at spots and I stay around those spots and that's that's the whole thing and IBM was in three different businesses including time clocks and a couple and two of the three turned out to be no good but so they just focused on the one what what is it when you look around that it's just prices are too high at this point i would imagine there are greg said this from the stage too there are businesses that you like just not these prices i would say i understand fewer of the businesses as a percentage of the whole than I did 10 years ago. I have not learned new industries for some years, you know, and so I don't kid myself on that. I'm not going to learn them. I'm not going to have an edge on, you know, a whole bunch of younger people that have actually grown up with them, used the product, seen things. But, well, as I mentioned, you know, you don't have to understand too many if they're like Apple.

But looking around, let's just get some macro thoughts on this, because I don't know that this is something that Greg is going to comment on, per se. Just looking at the macro stock market environment, what does this feel like to you? Does it feel expensive? Does it feel like there are opportunities in some places?

Well, it feels like, you know, I've compared the markets to a church with a casino attached. And people can move between the church and casino. And I would say there are more people in the church and more people in the casino. But the casino's gotten very attractive to people. You know, if you're buying one-day options or selling them, I mean, that is, that's not investing, it's not speculating, it's gambling, you know, just totally. there's nobody that can explain why they're buying an option for one day unless they may have maybe maybe the fellow that that uh you know made the four hundred and some thousand dollars from knowing when we were going into Venezuela but I mean that's pretty and the quantity of those things is just incredible so we've never had people in a more gambling mood than now but that doesn't mean that investing is terrible. It does mean that prices for an awful lot of things will look very silly. I mean, they had a squeeze in Avis of all things. Well, Avis has been around for 50 years, but just this past week. And we have lots more regulation and everything now, but people spend their time figuring out how to get around the rules rather than follow the rules. That's just a challenge.

The type of investor you are, though, is you lay it out yourself. In the 60 years you've been doing this in the business, you've had maybe five juicy years. I guess that means you're always looking for the next juicy year. What do you think it would take to make a juicy year or a juicy opportunity for you?

It's a phone call in some cases. You know, we bought a business last year that wasn't big enough to be meaningful, but we got a letter. Bell Labs? Yeah, Bell Labs, and sometimes there's more zeros attached to them than others, and we're big enough to handle anything, and we can make decisions faster than anybody, and our is good. There's an awful lot of people that, when they, they're in the business of reselling something or, you know, it's a lot better. If you're a good salesperson, there's no reason to be selling vacuum cleaners or, you know, as we'll sell stock, you'll make way more money yeah it's where the money is and there's and there's more money around than ever but the best opportunities have probably come when the macro environment that's the most likely well the most likely is time to buy things is when nobody else will answer their phones you know everybody else talks about their wonderful trading departments everything just try them out sometimes when markets are collapsing they don't answer the phones and if they do that the bids are subject and the offers are subject and the spread is wide and then and they'll use the information they get from you about what you want to do to go out and kill you some other way I mean it it's it's it's really like going to a slaughterhouse I mean you know you don't feel like eating hot dogs for a while i guess what i'm trying to get at is do you see the circumstances building up anywhere that could lead to a time like that again is any any sort of panic in the market where do you see them well if you saw them and they wouldn't happen okay i mean you've got all kind of you don't worry about what what people are talking about can happen it's it's something comes out of the blue. But something will come out of the blue. I mean, a nuclear bomb could come out of the blue. You know.

Well, let's knock on wood on that.

Well, it doesn't do any good to knock on wood. That's the point. You know, it was the Archduke getting shot But, you know, in 1914 or something like that for World War I, it just takes everything in life. And if it's something people are talking about and thinking about, it's not going to happen. But there are things that can happen out of the blue. And actually that's particularly true, to use that phraseology now, because the things that can come out of the sky, you know, you don't know what can happen tomorrow. I don't like to talk that way to people, whether it's you or anybody else. I mean, because whether it does you a lot of good to worry about that, I don't think it does do any good to worry about it. I think it's good to be cognizant of it, but worrying about it is terrible. I don't like to even cause that belief with people. I don't like to go around and tell them the end is coming, the end is coming, or something like that.

A friend told me yesterday, he's recently started using the phrase, I don't fret, I don't worry. And that's probably a good way to go about life. But let's talk about some of the issues that are out there right now. Inflation is up. That's an issue. So how does Berkshire handle that with its businesses?

Well, we can't handle runaway inflation except not to be there in the way of it. And if you look at the number of countries that have had runaway inflation since World War II, you know, in my lifetime, it's very large. And once you create that, it becomes a different world. that uh you know germany obviously experienced it after world war one and but but there are dozens and dozens of countries that have experienced it and of course you have you have countries that gone bankrupt like six or seven times i mean it's just amazing what people do in financial markets what about the inflation that we're dealing with right now which is you know, not excessive.

It's north of 3% at this point, but we're not even back at the levels we were during COVID. We're looking at 8 to 9%. So what about just higher energy prices, how that works through the line, and how you handle it?

Well, it came close before Volcker. I mean, it was just, it was cash is trash. And people were losing faith in the currency, and they felt they could borrow and 12% earn 6% on farming or something like that, and they had huge farmers in this state, Nebraska, collapse because they bought beyond the earning power, their paid interest rates beyond the earning power, just because they felt that the dollar was going to disappear and the land wouldn't disappear. It's tragic for many people and if you're the best doctor in town or the best lawyer in town you'll always make money under any the best TV personality but what not having faith in the money does to a country it turns it into something else and I always hope that the US never does it but we are not immune from it happening we have a lot of control over whether rates may go up a half a point or down a half a point, but we may have less control over whether they go up 50 points.

You've long been a supporter of Jay Powell's.

Exactly.

He had his last FOMC meeting as chairman just this last week. He did say that he's going to be sticking around, staying on the Fed, staying in that position for the foreseeable future, in part because of the threats that he's faced.

I'll feel better when he's there than when he's not. I mean, I just felt better when Volcker was there. But you, economists aren't the best at this sort of thing either. read any old economics book from 1950 or 1970. Paul Samuelson was a terrific guy and smart as hell. He had the standard textbook for 25 years and if you looked up, you know, zero interest rates year after year after year, it was a 900 page book and there wasn't an for it you know i mean it was the most important economic development i mean in terms of the impact it would have and everything during the lifetime of the students reading it but uh uh it's what you don't think of that does all the damage let's talk a little bit about ceos um in some of the berkshire holdings you mentioned apple's uh tim cook and just the phenomenal job you think he's

done. Incredible. He's not the only one of your major holding CEOs who stepped down. James Quincy recently stepped down from Coca-Cola, too. And we just spoke with Vicki Holub, who announced that she is retiring and stepping down from that position at Occidental. Part of what Greg's talked about is how stable that portfolio is. And these holdings are companies that he knows and managers that he knows.

There's going to be some new managers in some of those major holdings coming in is that a problem well it was certainly a problem with coca-cola there for a good many years around the company i mean sure it's it's uh and you have the most problems with with with a really good company because it'll it'll it'll it'll continue i mean if you're selling some product that people are buying every day you can make the wrong decision for a long time. But that's one of the problems of investing. Tim Cook I felt was very, very good from the start. And most of our managers are very good at the smaller problems. They can't anticipate I mean, the overwhelming problems, that's my job, or now Greg's job.

Do you feel good about those holdings still? Have you met any of the new managers of those businesses?

I haven't met the old managers.

Of the new CEOs that are coming in, Tim Klaus replacement, Enrique at Coca-Cola.

I certainly met the people at Bell Labs that we did. You know, and obviously I met Vicki, we made the deal, and so I enjoy meeting people, but you can make mistakes with people. I mean, look at the divorce rate, you know, that's more important than whether you've got the right CEO or anything else. And now you've got years of trial. I mean, back when I was young, you had to make the decision, you know, you didn't have to make a decision. A good many people made the decision when they were 20 or 21. To get married. Yeah, they got married. Now they spend five years and they still make the same mistakes.

So you think we're getting worse at our judgment?

Well, I don't know. Maybe the people behave differently before the marriage and after. Exactly. I would say that almost everybody feels either their marriage is better or worse than they anticipated a month after they were married. But I don't know which.

Warren, let's talk a little bit about deepfakes, because the deepfake Warren that popped up early in this session was pretty good. They had somebody standing up. You know, Greg was joking about it, but, you know, the first question went to a guy from Warren up in the rafters who lives in Omaha. You've been concerned about some of these AI deepfakes and what that means for the world.

Yeah, I would be concerned if everybody was, well, actually the worst thing would be to have a really good imitator of any president that came along. I mean, just imagine, well, we had that famous thing before, way back in New Jersey where the Martians coming and everything like that. Oh, War of the Worlds with Orson Welles. What you can do. Well, if you're convinced what people lend you money for, you shouldn't be borrowing it. I mean, it's scary. It's particularly scary when you have nine countries or so with nuclear weapons and people working on something even more. earlier. We haven't dealt with us. We don't know what's going to happen.

Let's circle back to Berkshire and the Berkshire of today. I think I was speaking with you yesterday or the day before, and we were talking a little bit about Greg Abel and what a nice guy he is.

He's a terrific guy.

You said something interesting to me, though, about how you picked him and it wasn't because he was a nice guy. Why did you pick him?

Well, he's very, very, very smart about businesses. Incidentally, he's getting his American citizenship here very soon and he was going over with me all the things he had to learn about. I've actually spent a little time in the past with groups of individuals. Of course, my wife still became an American citizen. And the things they have to learn about the Constitution and all of And they're usually so proud when they become American citizens. And I think I detected in Greg even, I mean, you know, as successful he's been and everything else. I mean, he is, it means something to him to become an American citizen. And, you know, he sits there with his young son, you know, and the son knows more about some of the answers to the questions you know that he may get asked or something about becoming a citizen it's it's really interesting and where else does that happen in the world i mean what people you know that as america's special and and uh it's a miracle what America's accomplished. I mean, it's just an absolute miracle. And yet the miracle, the division of the output and everything is about as inequitable as you can come up with, while at the same time it's got these great attractions. There is some secret sauce. I've never been able to define it precisely, but that when you run a country for 200 and some years and people want to come here every year I mean there's there's something about it and what Greg Abel was very you know is looking forward to becoming an American citizen that means something to him and you can't buy that any place they were packaging or you know It won't work for a Madison Avenue approach, you know, be an American or something like that. But that feeling just goes. In my 95 years, I've seen it, you know, time after time. So I felt good when I, Greg just volunteered that in the last day or two to me, that he was up there for his final exams here for becoming a citizen.

I didn't realize he wasn't a dual citizen already. I knew he was Canadian, but I thought he had dual citizenship.

He doesn't have a full, whatever the complete citizenship requirement is. And you can say, why does he care? I mean, he's gotten along fine without it here and everything. He still wants to be a citizen.

250 years, we're celebrating our 250th anniversary. You pointed out that you've been around for 95 of them. Do you think we have the special sauce that that will continue in this country? Or what do we need to do to preserve that and make sure that it does continue?

We've got a special sauce, a secret sauce, it's such a good secret that I don't know what exactly it is, but I do know this, that anybody that has a choice would choose to be born in America, I mean, you know, you can pick some very small little country, they're very happy that they're, but is there any other country that everybody's, for a couple hundred years wanted to emigrate, too. I mean, it attracted some terrible people, you know, too, but it worked. And they had the mafias from the different groups, not just the Italian mafia, but, I mean, it wasn't that they were all, we had some system for picking out the wonderful people from some other countries. But it has worked, but it's worked. The extremes to which it works don't seem to belong to that kind of a society. I mean, if you were drawing up dreams for the ideal society and you would have this kind of GDP per cap and everything you wouldn't design it wouldn't design the you wouldn't decide the inheritance of laws you wouldn't I mean you just do all kinds of things differently but somehow it's worked but that doesn't mean that we can't do better I mean at all you know Warren there are thousands of people shareholders and partners of yours for decades in some cases who are sitting out in this arena right now and I just wonder if there's a message you'd like to give to them this has been following you for years and we've been partners of yours for years the number one rule I give them is just not give them the golden rule I'm not a religious guy but I mean nobody said it any better and then in a couple thousand years than that which may be why it's lasted that a certain degree too. I mean that, you know, more people are reading a 2,000 year old book about how to behave than anything that anybody's coming up with lately. Now it's got a lot of, particularly the Old Testament, it's got different kinds of stories to some extent, but if the whole world lived by the golden rule it would be such a more wonderful society do unto others as you'd have them do unto you yeah and that's true for everything from parenthood to being a boss to being all i mean just everything in life and it doesn't cost you anything in fact it it's reflected in better behavior toward you so it means the very selfish sort of thing in one sense but i've never seen

anybody that's unhappy that behaves that way they uh uh and i've seen a lot of people in a lot of different kinds of situations warren i want to thank you for taking this time to sit down with us today warren buffett the chairman of berkshire hathaway uh greg abel is going to be taking the stage in just a moment and you will see more from him in just a moment we're a 177

year old company and if we didn't have in our dna the ability to adapt and to evolve we wouldn't be here today we wouldn't be relevant still in our customer supply chains and so that adaptability and innovation and really putting the customer first is what we focus on that that's core to who we are my name is katie farmer and i'm president and ceo of bnsf railway i have had the pleasure of working alongside the 35 000 men and women of bnsf for going on 34 years now And I've worked in almost every area of our company, which is how I came to lead BNSF as our CEO for the last five years. We have a long, rich history. We got our start as a six-mile railroad in the state of Illinois, a little railroad called the Aurora Branch. And over time, that railroad grew into the Chicago, Burlington, and Quincy Railroad. And then we continued to stitch smaller railroads together to have a route from the Midwest all the way to the Pacific Northwest. We are made up of 390 predecessor railroads, and some of those railroads actually connected with the Pony Express. And our trains were used to sort mail as the train moved across the tracks. That then grew into the present-day BNSF Railway. We operate in 28 states and three Canadian provinces. Every year we move somewhere between 9 and 10 million loads. And we move everything from coal to agricultural commodities to building products, construction products, chemicals. And our largest business segment is our intermodal business. And our intermodal business is the movement of trucks from the highway lifted on a container or trailer onto our railroad. Then we haul it the long portion of the route and then lift it off again from the train to over the road. And to give you some perspective of the scope of what we move, of those 9 to 10 million units, over 5 million are intermodal. So we're the industry leader in intermodal. And we lift a container on or off our trains every 4 seconds, 24 by 7, 365 days a year. So that just tells you a little bit about the scope of what we do and how we touch literally every part of the economy. Everything's foundational around safety for us. We're going to lead the industry in service. We're going to continue to be productive and efficient. But one of the things I'm excited about is the next 177 years. And so we're at a point now where we're looking at how do we build that spirit of building and innovation to our technology and our innovation efforts. And so we created BNSF Tech, which is a new division of BNSF, and it's really focused on taking that, moving from looking for commercial solutions and buying technology and speeding that process up and building internally. And so we hired a gentleman by the name of Harry Govind, who many of you know, came from GEICO and has a long track record of going in and transforming and innovating. And it's not about technology for technology's sake. It's about outcomes. And so how do we use technology to best position us for the future, to make us a safer railroad, to give the customers a better service product, to drive productivity and efficiency? And so I'm excited about the opportunities that we're going to have going forward to really bring that spirit of building to our technology efforts. So I go back to one of Warren's annual letters to the shareholders. And I remember he said that he believed that BNSF would not only be an asset for Berkshire, but an asset for our country 100 years from now. And we take that responsibility very seriously. But we also really appreciate that that aligns well with the way that we have to think about our business. We make investments that are very long-term investments. And so thinking about that in that longer timeframe is really important. Warren always challenges us to think about the businesses that we lead as if it were our own family's company. And I've worked for BNSF since I was 20 years old. So thinking about BNSF as if it's my family's company is not a big stretch for me. And I love that perspective of thinking about how do I make sure that I'm passing this company on so as if it were a family company for the next hundred years to those who will come after us. And with Greg, Greg, it's great to help focus on execution and making sure that every day you're making that business, your family's business, you're making it better. So we are very honored to be a part of the Berkshire Hathaway family. We understand the responsibility that we have, which is to operate every single day with the highest ethical standards and deliver value for the shareholder.

And I want the shareholders to know that we have 35,000 proud railroaders who come to work every single day and focus on those two things welcome back i hope you enjoyed the break becky warren thank you for that exceptional interview appreciate that katie and adam great to have you on stage i would note both the videos were extremely well done in that it gives us a great understanding of your businesses but also you as leaders and i'm just going to start with a question for each of you and then we'll go to the back to the question and answer. I think, Katie, you, well, I know you did. You heard me speaking earlier. I talked to our owners and shareholders around our operating performance and where we are. Highlighted we were in fifth of sixth last year. We've now moved to fourth, and we need to see, and we also talked about needing significant improvement, a step change.

But the one thing I didn't really touch on is i started talking about the the getting to that next level but as you touched on you have 35 000 employees and to move the organization to look externally and recognize where do we go how do you take on that challenge yeah thank you greg and first of all thank you for the opportunity to speak today and talk about our great company it's a pleasure to do that greg so thank you you know we absolutely recognize that it's important for us to run an efficient operation to have a competitive cost structure and to continue to further close the gap between us and our competitors you know we have an exceptional leadership team in place that understands the importance of aligning the entire organization as you said greg the 35 000 and men and women of bnsf aligning them around that operational excellence you saw that we made progress as greg said in 2025 we continued to make progress in the first quarter of 2026 but we know that we have more work to be done to drive that operational excellence across all areas of our company.

Thank you, Katie. And then, Adam, when I was discussing your new role, and thank you for taking on that role, and also retaining your role at NetJets as the CEO there. So a lot on your plate, and all of us here appreciate that. But it's early going. you've been in the role since december as the president of consumer uh products and then service and retailing what what are your observations as your your early observations across the 32 companies and how are you approaching that yeah and talking to the different ceos i um if you give me just one second before the answer i just want to make just one brief comment uh Really, to both Warren and Greg, I have been CEO of NetJets for the last 10 years, but I've been with NetJets.

This is my 30th year there, so only at Berkshire could you feel like the new kid on the block after being here for 30 years. But, you know, Warren has taught us a lot. Charlie's taught us a lot. Greg's taught me a lot. One of the things that they've said over and over is that, hey, bad news takes the elevator and good news takes the stairs. and I really understood that many many years ago and until I became CEO I found myself on the elevator a few times and what they never told me was what happens after you get on that elevator and I just want to point out as the CEO for the last 10 years there's been many times I've had to make calls on things that we run a big business and I simply want to say that what happens after that as you have the most unconditional support and i echo uh all the ceos that that are in this portfolio so i just want to say thank you for that because it's not easy delivering sometimes good or bad news but uh it's been phenomenal support um as it relates to the actual the other 31 ceos in our bucket um i have to sort of start with conversation with netjets because people have been asking me a lot in the last five months so you're still ceo of netjets but how are you going to take on this other role. And I think the journey starts with the team at NetJets. Many of them are here, and they're incredible. I spend a lot, a lot of time over the last 10 plus years with them. I was set up in that stage in the arena in May of 2010, and it was a hard thing to hear, but it was the truth. And Warren talked about NetJets and stated that it was his toughest mistake that year, but for the backing of Berkshire, that we would have been bankrupt. And I don't like repeating those words and probably shouldn't do it in front of an entire room. But it's an important pause because then you have two choices. What are you going to go do? And so the team that's sitting with me today and many people back home, I do think we have a wonderful company, as Warren talked about with Charlie in 2023. And I just want to say to them, thank you, because it's been a rough road to do that. And we've accomplished a lot, which gets me in to answer your question. And I, you know, I'll be honest with you. So thank God I have NetJets because I was able to fly around and see a lot of these companies. Unfortunately, all 31 companies are not based out of Columbus, Ohio. So I've been on our airplanes a lot. And if I'm honest, I was a little concerned about it. Many of the CEOs have reported directly to Warren. All of them reported to Berkshire. and then here comes this guy that they're now going to be working with. And I will tell you, one of the things that struck me is how wise the CEOs are. They have the energy, intelligence, integrity that Warren always talks about. But I say wise because my concerns were quickly allayed when I started talking to them in the sense that they've been listening. I know many in this room don't know the names of those 31 other CEOs, but they know you and they've been listening they absolutely understand the playbook that is the the ownership manual by the way this is the almost today the 30th anniversary Warren wrote the owner's manual and in that was sort of our business bible on what we needed to do and I was really pleased every one of our CEOs understands that they've been living that and that's going to make the interaction much easier for me. So I feel really good. I feel really good about the form of the CEOs that we have, and I know that they have ingrained in them the culture. Part of the culture certainly is the ownership thinking, but the stewardship that is talked about, we feel a massive and deep responsibility to carry on the stewardship and the legacy of Charlie and Warren and work really hard for Greg and his team. So I feel good about it.

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

Okay, thanks, Greg. This question comes from Chris Freed in Philadelphia, Pennsylvania, who wants to know, how has the current geopolitical situation in the Middle East impacted Berkshire's subsidiaries?

Sure. I'll touch on it, and then I'll make sure, because it impacts really, in a variety of ways, all our businesses. but what I'm most proud of are our businesses. We operate these businesses for the long run just like we do for obviously for our shareholders. We take a long-term approach. There's not many days and I used to joke when I more had Adam's role there wasn't a day I woke up where the phone wasn't ringing with good news. That phone rang. You knew you're going to have a bit of a challenge and we have that portfolio but that's okay. We'd be talking and we always worked our way through it and we have a team that would lean in and we'd come through and it could be anything and we never tried to use that as a reason we couldn't do something or get to the to the right place and what I've seen associated with the obviously the the war in Iran and and in the various conflicts in the Middle East is again a team that is very much taking the approach that that's the situation we're in we can manage our business and we we very much quickly move to what's the best solution for our customers how can we deliver and continue to deliver what we've done to them and what's their expectations around that and and our teams will work incredibly hard to come up with with solutions um i i touched on lsbi the drag reduction agent on the pipeline company, they don't usually sell a lot of product into the Middle East as far as moving. It's more a domestic-based product for Canada and the U.S. when you think of a drag reduction agent on pipelines, literally being cargo planes of that chemical being moved in the Middle East to help free up supply and i.e. remove some of that constraint. So there's so So many things that go on when they start trying to figure out how to solve the challenge. Now what I would say is it doesn't mean there's not immediate impacts to our businesses. If you think of companies in America, around the globe, petroleum and natural gas matter is such a fundamental input to so many products. and the reality is if you think I touched on our chemical group their their input is generally a petroleum product and the output is the the various products they produce obviously that that are byproducts of that but their input costs have effectively doubled in a very short period of time but again we'll manage to do that and that's the the beauty of being part of Berkshire They know, first, we'll take care of our customer, we'll find the right answer, we'll manage the challenges, and the value creation will be there in the end. So there's some short-term pressure on our chemical businesses. If you looked at their first quarter profits individually, they would be down or flat to down because they've got some challenges, for example, on the input side. But they're delivering what the customer needs, And that rebalances over a period of time where our prices will move up pursuant to our contracts. We'll be treated fairly in the end in that they'll reset and then may unwind a little bit slower. But the point is, unfortunate situation, and we've got men of service and women of service over there and putting themselves at risk, and that in itself is scary because a lot of our employees have family involved. But, you know, as far as running our businesses, it's really heads down, we'll get through this, and we'll keep operating everything for the long run. And again, it includes how we'll operate our assets. We're not going to put the asset at risk to try to get to a short-term outcome because petroleum prices are higher, or petroleum prices are higher. It's very much continuing to take that long-term perspective. Katie, obviously it can impact demand and what's being brought in on the coast. Are you seeing that, or what else are your observations?

Yeah, it's interesting, and Warren has said this in the past before. You know, the railroad is a really good reflection of what's happening in the industrial and the consumer economies because our loadings really cut across all the various commodities. You know, we touch agricultural products, we touch coal, the industrial commodities like cement and steel and aggregates. You know, certainly our intermodal business, which is such a big part of our business, reflects what's going on with the consumer. And so we're seeing the impact from the conflict in the Middle East in a couple of different ways. First of all, I would say that if you look across our various commodities, It's created an opportunity for some of those commodities just because of the disruption in the supply chain. In addition to that, you know, we see commodities like aggregates and steel, things like that, that are favorable, and we're seeing an increase in those. But then some of the commodity areas that use energy in the manufacturing of those commodities are certainly being impacted by the increasing fuel prices. The largest segment of our business, as I mentioned, is intermodal. And so as fuel prices increase, our intermodal business becomes more competitive. And so we're seeing an increase there relative to what's happening in the Middle East. I would say in general, though, as we think about it, if fuel prices stay too high for too long, it has an impact on consumer demand. And when that happens, that cuts across all of our businesses.

And have you started to see that yet? That obviously when you think of, I touched on it being an input to many of our companies, but really globally it's an input to so many things. And as that price pressure moves up, obviously the demand side is challenged. Are you seeing that yet?

Yeah, we're seeing some, we are starting to see that impact some of the businesses. I would also say, Greg, as we talk to some of our large intermodal customers, what they are telling us some of the big retailers are the customers are having to make choices now so as fuel prices go up they make choices about what they're buying and so that's where i get back to if if it is a prolonged higher fuel price environment i do do believe that we will see that customer impact across our businesses thank you adam across your businesses um what are you seeing What are you feeling?

Yeah, I mean, certainly, you know, when you see the increases that have occurred and the instant spikes in some cases that occurred, certainly on the consumer product side, on the real retail side, it has affected some of the demand on that side. I would also tell you that we have also faced multiple times at NetJets with $100 a barrel pricing. We see those spikes. We see the demand. I haven't seen it on the net jet side. We went from really the last two years from about five to 540 a gallon. We're seeing spikes up to seven a gallon. I would tell you if I see that kind of sitting at seven and a quarter, 750 a gallon, then you'll see it start impacting even on the higher end side on the net jet side. So we're feeling it. It's, you know, it's not the first time we've had to deal with this. You know, we're prepared to deal with those things and make adjustments where we need to, but this certainly is affecting, I would say, some of the retail businesses and some of the consumer product businesses.

Great. Thank you, Adam, and thank you, Becky, for the question. We'll now move to Station 5.

Good afternoon. Manjab Singh from Mountain House, California. Warren has spoken very highly of of both you, Greg, and Katie. So I'm grateful to have you both leading our company. And I'd like to ask each of you a question. Greg, as you know, the Berkshire system relies on decentralization. Each manager runs their own subsidiary. As CEO, which operating units do you think need more oversight and how will you handle a manager who underperforms and Katie as Greg highlighted BNSF profitability likes its competitors with eventual technology advancements in autonomous driving trucking costs will continue to drop. How will B and ASSA maintain its competitive advantage from competitors and new technology?

Great, thank you. So associated with the letter I wrote to all of you as owners, I highlighted some important, as I've touched on, values. One of them was our decentralized model. I also touched on risk discipline, capital allocation. And when we think of our businesses, we have an exceptional group of leaders and businesses. And, yes, they do own their businesses, as Katie touched on it in her video, as Adams alluded to it and talked about it. There is a great deal of ownership across each of our subsidiaries. And that's absolutely how we'll continue to operate and see it as an extremely effective model. They're closest to their customers. They understand what needs to be done. And if they think like an owner, we get very good outcomes across the group of companies. I would highlight, though, that with a decentralized model, we do not take responsibility. And I was one of those. I ran BHE. It's a great set of responsibilities. Berkshire Hathaway Energy shouldn't be abbreviating. But when I ran it, that autonomy meant you embraced it. And there was a great amount of accountability that came with it. sheer pride that you wanted to do things right we've got a clear set uh uh when we talk about integrity and how i started it we have a lot of expectations and that's where both on the uh on the integrity how they approach managing their business and servicing their customers and i've said there's a lot of external factors we we can we can observe but our primary engagement is with their are they managing the risk and risk and foremost do they do they see themselves as that chief risk officer you've heard us discuss many times are they good allocators of capital with the capital they have there because even capital you have to manage your operating expense as well i view everything you know that that when we're spending money on a uh it may be a capital expenditure it can be an operating expenditure you're deploying our our shareholders capital Are we doing that well? And we focus on that. So that's part of that equation of allocation capital. And the reality is if we're seeing a situation where we're underperforming or we're seeing some potentially poor decisions, that's where we engage and have a discussion. And usually it's relative, and I touched a bit on this with Katie, it's relative to what we see externally. And just really trying to understand where our performance gaps are. And then it quickly moves to, and we don't have the people at corporate to go in and, quote, help. So it's not like we send in an army. but there's generally some people within our subsidiaries or maybe someone we know that could help them with that with that performance gap because we do treasure continuous improvement and strongly as you've heard believe in operational excellence and there's as i've said there's room for us to to get better and that's how we would approach the situations where we see the gap and need to close it katie maybe you can probably touch on both absolutely so thank you for the question, and as I said, we absolutely know that it's critically important that we continue to drive an efficient operation, that we continue to have a competitive cost structure, and that we

continue to close the gap with our competitor relative to our profitability. There's a couple of specific things that we're working on, and it's really about operationalizing the improvement that we saw in 2025 into the first quarter of 2026 and making sure that we're really institutionalizing that so the first thing that we really focused on in 2025 was we knew that we needed to improve our single car operational efficiency and when i say single car unit operational efficiency we run a couple of different networks we run our intermodal network we run our agricultural and our coal network our bulk networks and then the balance of it is what we call our carload network our single car network and that's where we we have non-unit train it takes a lot of operational focus it takes a lot of work effort and it consumes a lot of resources and so anything you do to improve that single car network is good for all of your customers it frees up resources it creates capacity it allows you to handle the same amount of volume if not more with fewer assets and that translates through then to the improvement that you're seeing in the profitability an example of that is in the first quarter of this year we handled more volume than we did in the first quarter of last year but we did it with 260 fewer locomotives that translates into a more consistent service product for our customers and it also translates into to better financial results, which is what you saw in the first quarter of 2026. So we're spending a lot of time ensuring that we have operational excellence, not in just all those other networks, but in the network that frees up resources and drives improvement in operational excellence for all of our customers. The second area, and you heard Greg talk about this earlier, was around our technological transformation. We really believe that in addition to driving that operational discipline that you saw in 2025 and into 2026, that working with the new BNSF tech organization to drive that next step level of improvement. And so you saw units dwell in our terminals less time that translated through to the financial results that I talked about. You saw velocity improve as well. And so how do we leverage technology then to take the next step level improvement. So I'm excited about what we're doing there. We're literally attracting data scientists, operations research folks, and we're putting them alongside of our operators in our network operations center. We're looking at things like digital twins, which gives us the opportunity to model how we run the railroad before we actually run the railroad. We're looking at opportunities to do predictive ETAs for our customers which allows our customers to have a better product. It allows us to turn the assets faster. And then last what I would say is that we're just it's good old-fashioned going to work on it on attacking the largest structural cost buckets. We had a record for the first quarter in our fuel efficiency that's the kind of thing we want to do because it makes us competitive with trucks it is good for the environment and it's good for our financials so those are the things we're doing to close the gap relative to profitability now your question about competing with trucks i would say a couple of things with that first of all we have the largest intermodal franchise of all of the railroads. We have a unique relationship with J.B. Hunt and we have been extremely successful in converting over the road freight. We've done more of that than anybody, so we know how to compete with trucks. But your question about technology is a good one. And I would say that we in the past have invested in a system called positive train control, which is a safety overlay that allows us to operate the railroad efficiently as you know we operate in a closed circuit and so we have the ability to your point ultimately to run the train with fewer people than we operate with today and in fact if you go way back in time we used to operate the trains with five people on the train now we're down to two people on most of our trains so the technology will continue just like most industries will continue to evolve and we're continuing to look at that as well the last point I would say with that though is that we also have to be allowed to innovate and so we need regulation that supports the ability for railroads to be able to compete with trucks as you said we know that there are trucks out there running today in our state in texas along i-45 we just there was just a pilot with autonomous trucks what we have to be able to do is to be able to compete with that and to be able to innovate. And so we're going to need regulations that allow the railroads to be able to do that. So that's how I think about competing, ensuring that we're closing the gap, as well as maintaining our competitive advantage with trucks.

Thank you, Katie. Adam, on that point, and Katie's point, you came, literally, Adam had left for a very brief stint 10 years ago and had a very senior role in NetJets and had been effectively been recruited to be a CEO of another business that was going public. And we were fortunate enough to convince Adam to come back. But he came back to a challenging situation. The asset was underperforming. We had billions of dollars of debt. Back to ourselves to the parent company but it was debt that had been incurred and some real challenges when when you think about how we address under performance and how do we get a business back on track um maybe you just want to touch on that period of time and and and that bringing the business back and and and how how you achieve that uh yeah well i've one i will tell you um I came back on June 1st of 2015 and that Monday afternoon, and many of the team that's up here today, we got in a room and I asked a question about how many people really understand

sort of the bookends of our business. NetJets is complicated. We're ad hoc, we're unscheduled, we fly to thousands of airports, commercial airlines will fly to 50 to 100 airports, we fly to 150 countries around, so it's a very complicated business and i asked a question to the team um how many people do you think really understand the bookends of our business and i didn't like the answer i won't tell you what the answer was but it was too few and it sort of started there and what we did was we we really said you know to build this culture the way we want it if i understand what you're doing you understand what i'm doing at at deeper and wider levels we're going to do good things together so it sort of started on that monday afternoon and when we started building that back um i will tell you it was also a reinforcement from probably from greg i remember my first board meeting prep and i was excited and we were starting to kind of move and and i was talking about uh growth and we're going to get this right we're going to grow and greg pulled me aside in a very kind way and he said why don't you pay one dollar back to warren and work on getting your debt down that was a teaching lesson uh i took that to heart i heard it clearly and i actually already knew that And so we just started really putting our blinders on, and we said safety and service, safety and service. Warren bought NetJets after becoming a customer in 1995, bought NetJets in 1998, and he did a video for us that we still use. And he said, I want safety and I want service. And we've been really focused on making sure everybody stays in that alleyway. That in large part, plus a lot of hard work, is why we're able to pay our debt back.

We're able to pay cash back to Berkshire Hathaway And move our way, as I said in the video Out of the other column and be first in the service business And I'm proud of that Thank you, Adam, thank you, Katie Becky This comes from Brian Simpkins in San Diego, California The question is, has Berkshire Hathaway considered Seeking any tariff relief or reimbursement programs for its wholly owned operating businesses exposed to import costs, and how significant is that impact across the portfolio?

Let me start with the impact across our portfolio, because it's very close to discussing the situation in the Middle East in that, yes, there was the tariffs, and each business may have fallen under a different tariff a tariff or what they were importing and and we'd gone through it once already in the in the first term of the administer in administration and there there were lessons learned there so we were both better better prepared in how to manage through it and had realigned a certain amount of our our input so it you know that was valuable the second thing was it's as i described with the with the conflict. It was heads down and we'll just manage ourselves through it. Listen, there's some cost pressures here. We'll figure out how we're going to continue to serve the customer. We'll work through on delivering what they need. And there has to be some reasonable expectations on the other side that we'd recover those tariffs from either through a direct contract with them or through the product we're creating and and and that was a good approach in that we just held our course and wanted to continue to service them so they yes there is financial impacts but our team did a really remarkable job of addressing it and and really minimizing the impact any of our businesses as far as recovering it um that would definitely be at our operating level they would be making such a decision but but overall right now our perspective has been there's a there's a lot to sort out when it comes to refunds uh what we're eligible for and and so at this point in time we're very much taking an approach that um uh if it's appropriate our teams will evaluate it and and and again it'll be a discussion with our customers and and with a number of them so So it's an operating subsidiary decision, but we're not naive to it in that we're encouraging them. There's a lot to be sorted out at this moment in time, and we're not pursuing them. That doesn't mean we may not have a subsidiary. Now, I'll look to our team on stage here that may be pursuing one or seeking one. Katie, anything?

Not as far as the reimbursement, but I would say just as far as the impact of the tariffs and what we're seeing with our customers, I would say that in early 2025, we saw several of our customers pulling forward shipments in advance of the tariffs, and we certainly saw our volumes ramp up at the beginning of 2025 because people were trying to get ahead of the implementation of the tariffs, so we did see an increase in volumes through early 2025. That really stabilized then in the back part of 2025. And then into 2026, I would say that our customers have really adapted to the tariffs and adjusted to the tariffs. With that said, it does cause some uncertainty. And I think where we see that really showing up is, you know, it's very difficult for our customers from a planning perspective.

And I think it's keeping some capital on the sidelines as far as investment in manufacturing facilities and it's just really the uncertainty of the tariffs that that really is what we're seeing reflected with our customers thank you adam yeah i mean i would echo both those points one um i would probably use uh you know berkshire hathaway automotive jeff rocker who is an excellent you know ceo of that division um you You know, the new and used sales are, you know, slightly down in Q1 of this year compared to last year, and part of that is sort of that same effect from the tariff buying that occurred a year ago to today. I had to smile because we were collecting, okay, it's changed every day, as we know, and you manage through that, and just understanding the tariff bouncing ball was, you know, a job in itself. But I had to smile because I was actually calling our CEOs just to get their take on it, And the 32 companies in the portfolio, consumer product services and retail, it's a stat that I love. They've actually been around on average 88 years. And only 0.5% of American businesses have been around more than 80 years. Our average in that sector from a founding standpoint is 88 years. And several of the five of the companies specifically, companies that were founded in the 1800s. And when I called those CEOs, they said, we've been dealing with tariffs for 100 years. you know kind of thing and so not being dispensive at all of tariffs the point is i look at the whole tariff conversation as you're always going to have a curveball if i think of the ceos in the last you know seven eight years we've had to deal with a global pandemic the highest inflation four years and now this thing uh you know the bouncing ball of tariffs so the businesses have done an excellent job of managing through that um i wouldn't put it in the fund department of the things we have to deal with but we're learning it and I think we're in a pretty decent spot moving forward so thank you Adam we'll move to station six good afternoon my name is Amir

Rahani from Vancouver Canada thank you for hosting us and thanks to everyone at headquarters that makes this weekend possible. Berkshire's investments in the five Japanese trading houses was passive, good businesses at good prices financed by GPN. Your Tokyo marine deal is fundamentally different, a 10-year joint M&A and reinsurance partnership. That's a level of operational integration Berkshire has never done internationally. What does that look like in practice, and does it signal a broader shift toward active international partnerships under your leadership? And to put you on the spot, Greg, Canada versus USA in hockey, who are you cheering for? Sorry, sorry.

Now I'm in trouble. Yeah, Ajit did an exceptional job of discussing Tokyo Marine, and I'll touch on it, and I teed it up a bit in saying it is a strategic relationship less than a financial transaction. Yes, we like the 2.5% investment in the Tokyo Marine, and that will be a long-term investment. It's the type of investment we put with our other five investments in Japan. We really think of those as forever because it goes beyond the investment, and it's very much around the relationships we want to build there, and you'll continue to see that. Ajit expanded on the underwriting opportunity that we do jointly participate in their risk and rewards associated with effectively also 2.5% of their book there now. And that's, again, part of the financial transaction. But there's also a great deal of faith there. We, as Ajit said, and really Ajit says, and I take his word for that, but it's, you know, it's an exceptional company and their performance has been remarkable. So we're thrilled to have them. And then the third thing that was touched on was the partnership highlighted a variety of things, how we would like the relationship to develop. And that's not defined yet. So we'll continue to let that take its proper form. They're the type of partner that has the same culture, same values as us. So there's a little question it's going to be exceptional for many years to come. But as far as pursuing an absolute acquisition in insurance or something like that, that'll evolve with time and that would be obviously the discussions Ajit and the senior team at Tokyo Marine would be having. And if such an opportunity materializes, we'd be thrilled with it. Now to the really tough question. Canada versus U.S. in hockey. I did find a way. It can cause a lot of angst in my own family. So I remember waking up that morning and Canada was playing the men. but I'd already decided a little bit earlier that when it came to the Canadian men versus the U.S. men, Connor McDavid plays for Edmonton, and therefore I was going to cheer, because being from Edmonton, I would cheer for the Canadian men's team. And I've always followed the U.S. women, and I love what a program, the U.S. hockey, and I love U.S. hockey and how they approach the coaching and the development of the youth, And I think they've done a great job there. So I chose to cheer for the U.S. women, and it was the perfect outcome for me. So a little selfish in finding that type of outcome.

I will say, Greg and I had an Oilers stars bet last year. Yes, true. And the losing person had to wear the jersey of the other, and I now own Oilers gear.

Yeah, Katie owns some Oilers jersey.

And unfortunately, this year, neither of us get to have that bet. they're both on the sidelines very quickly but thank you for that question Becky this question comes from a shareholder who didn't want to be identified but it's a variation of a question that I got from several shareholders is there any future circumstance that you could invert envision Berkshire divesting businesses or being broken up if so what are those circumstances. The shareholder also writes, note, I don't want this to happen, but it's a commonly discussed, it's commonly discussed among followers of the company.

Yes, so the, so when we think of the question, and I think it's a good one, because we've always highlighted there's certain circumstances that we may not be the best owner of a business. We've touched on if there's labor issues that we cannot resolve, I would take it to the point then further in my letter I touched on if there's reputational risk that we're not willing to ever have our owners or shareholders or Berkshire experience and that we have to, maybe the business has evolved, The customers have evolved, but if there's that type of situation, then that company does not belong in the Berkshire family. And it may be a fine business that can be owned by someone else, but it may mean we don't own it. I would then take it a little bit further. I touched on a couple things, or one other thing before I jump to that. That would be, we've often talked that if we have a business that is unsustainable and no longer generating operating cash for our shareholders, we have to make some serious decisions around that. If there's someone else who could operate it and make it be more successful, both for the customer and for our employees, then we have to consider that. Otherwise that business is unfortunately in a place where we can't just fund it and experience losses. We would wind it down over a period of time, but we'd look for a better solution for our customers and employees. So that's always been the case. Well, that, at least from my perspective, has always been the case in how we'll continue to do it. I would say we're taking it, we take the obligation in making sure capital is properly deployed, obviously, very seriously. I touched on the regulatory compacted energy and that that has to exist. And we have to be, if we have capital deployed there, we have to get a fair return. We have a situation where we've actually announced we're selling a portion of Pacific Corp, our Washington state utility. And that's really a function of the fact that we have a multi-state process in Pacific Corp. There's six different states, and each customer is impacted in different ways. And I've already said we very much focus on what's the needs of each state and how can we best service them. And unfortunately, we're in a situation in Washington where they clearly had policy that they wanted from Pacific Corp, and it was having a significant impact on the cost of our other states. And as much as we would have liked to see what we call a multi-state compact, i.e., how do they balance all that, it wasn't occurring. And our other states were bearing costs that they felt were not theirs that were being imposed by another state. So we consciously said this isn't working for the six states. And the one state who had very specific policies and wanted them implemented, we chose to exit. we found a very good purchaser who very much supported and could implement what was required at that state. So there we have evolved, and it's a situation where it just didn't make sense for Berkshire to be an owner of that asset or our owners to be an owner of that asset, and it'll be, I believe, a better outcome for the state and for their customers. So there are those situations where we would divest and we will always approach things that when we buy something it's forever. When we acquire a utility we tell the regulators it's forever, but it has to be a relationship that works and if it's broken we'll find a better path both for the company, the employees, customers and and obviously for for Berkshire yeah yeah Greg there's a second part of that question though that gets at least is there is there a point where some of the parts or something is there a point where it doesn't make sense for Berkshire to be a conglomerate where you would break up the company yeah so to the second part of the question um absolutely not we we I touched done in early. We are a conglomerate, but we are an efficient conglomerate. We don't have layers of management. We don't have a bunch of committees telling our businesses how to run, how they're going to manage their customer relationships. We try to, at the odd time, create frameworks so there's value shared across the businesses, so they're aware of what our other businesses are doing and and technologies that's one of them where we like our framework now we think it's it's become it's very effective across three of our businesses so of course we want them to understand it but we don't create layers I remember when Adam took on the role I nicely said you know there there'll be no corporate group supporting you either in Omaha or amongst your own team we he's got folks in net jets and they're always step up and take more responsibility including when I was uh in that role or in the the vice chairman role so we but the one thing we don't do is create layers of bureaucracy or uh other decision trees around it and I think so many conglomerates end up with with layers and layers of costs that don't add value in in in to the to to the overall corporation. I'm even careful when I talk about our metals group and our chemicals group, because they're a group in, call it maybe, in my vision, I see similar opportunities, I want them to work together, but they don't have a corporate group on top of them or anybody directing them on what to do. They find ways to work together, because they have a lot of the, can have the same challenges, can have the same customers. So we see our conglomerate structure working without the bureaucracy and bloated costs. We see a great opportunity to continue to move capital across those different groups in a very tax-efficient way. Other people can't say, I want to move capital. BNSF is a great example. Yes, they have strong operating results, and they're in a cycle in their business cycle right now where there's a certain amount of capital we have to deploy into it, but we also receive substantial dividends from BNSF on an annual basis. We can take that capital and decide, is it needed in a different operating business, or do we see opportunities in equities? and if we don't see those opportunities we're happy to not happy but we understand the logical home right now is U.S. Treasuries we we think that's a good asset we would prefer to see that deployed in a different fashion yes when the opportunity presents itself but it allows us to really move that capital across the group so I actually the answer to the conglomerate is Yes, we understand we're one. We see it operates very effectively, and we do not see ourselves divesting of subsidiaries for that reason or ever breaking off a group. Thank you. Okay. Station 7.

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

Thank you. So I think I'll start with the important part of that question. I mean, as far as how Berkshire, how Warren thought about it, how Berkshire thought around approaching investments, quote, our margin of safety around investments and how we approach it, But we're absolutely aligned there, and that starts with our culture and values and how we've approached everything over the years. So if I go back to looking at opportunities and energy, and it may have been an acquisition or we're deploying significant capital, it quickly went to, yes, we understood the opportunity, But Warren, and I'd want to have this conversation, where's the risk? And do we really understand the risk associated with this? And I have a really great example, is that we were acquiring Envy Energy in the, had the opportunity to acquire it, and Warren was actually coming back from China and had been over there, and I was waiting for him to arrive and land in Seattle and give him an update that we had this potential opportunity. And I very much knew the opportunity and what the value proposition was. I clearly had three significant risks in my mind that I was anxious to discuss with Warren. and Warren landed and I had a short presentation so I'm asking him to just give me a call it was literally one page but just to really trigger it could we have this conversation and the immediate conversation we had was yeah the economics you couldn't agree more understood them went right to the biggest risk and I was just getting ready to walk him through the two or three risks I'd seen and want to make sure we understood it and we're comfortable and wanted his input And the risk was fundamentally rooftop solar, and how would it disrupt that business and disrupt our customer? We discussed it. We understood it was a challenge. I remember saying to Warren, well, that's part of the reason I'm sure we have this opportunity to acquire this public company, that there is a certain amount of risk, and the board and the manager team had decided that they didn't see the same opportunity we did. But Warren went right to it and was all around the risk. And that risk did surface 12 months later, 18 months. We managed our way through it. Our team did a great job. So I don't see there being incremental margins or we think of risk differently. We think of them in the Berkshire mindset that we're going to understand the economic prospects of this opportunity. And as I said, we really go to that 10-year window potentially and say, what's the business look like 10 years from now? And is there enough safety margin 10 years from now? Is what we see at the outcome? Do we see an outcome? And if we don't understand what that looks like 10 years from now, I know Warren would say this, I would say it, then we don't do it. There's no safety margin or maybe we can adjust some numbers or there'll be synergies or something of that, like we have to have a vision of what that's going to feel like and look like, and that really is how we approach it. Now, touching on technology companies, we're not going to ever say, geez, this is a specific sector for us or we need to be in it. If there's something in the technology sector or in that group of companies, And we understand one of those companies to understand, again, what their opportunities are and what we view as the economic prospects for it. And we have an understanding of what those risks are. That doesn't preclude us just because it's in a technology sector or that. But it would start with back to the fundamentals of do we understand it, both the opportunities and the risks, and then is it fairly valued relative to that? And that's always going to be the approach. So thank you for your excellent question. Becky, if this is okay, we're going to, and so please pick your toughest question, but we're beyond one o'clock now. This will be our last question for today. So we look forward to it, And then I'll have some conclusionary thoughts and comments. But thank you, Becky.

This question comes from Joseph Matias. And he said, Warren had Charlie's partnership for most of his tenure as CEO, which naturally reduced the risk of subpar investment decisions.

Who will serve as the Charlie for Greg? and they're they're a reason why they're in the rafters together that was an incredible partnership and and one that uh you know you you can't replicate but what what i would start with is that very fortunate to still have warren as our our chairman and and that's very important and it makes for an excellent transition. I have an exceptional board of directors that I'm comfortable reaching out to any of them individually, depending on the circumstances and either the risk we're dealing with or an opportunity that may be present in any of our businesses or one that may be coming our way. So we're fortunate to have that exceptional group in place. and and then it really comes back to our team that's in place and i said this when i was answering to um warn from omaha um that we want berkshire to endure and that means yes i want to lead berkshire and i'll be a strong leader i strongly believe that and and i'll i'll take Berkshire Ford, but it will be as you always need a single leader, and I think we strongly understand that, but you surround yourself with great people, and they're already here. I've been fortunate on the non-insurance operation to operate with Adams, 32 in the 18 that I still get to interact with a lot. Those 50, including Adam and Katie, obviously have an exceptional working relationship with Ajit and fortunate with that and would seek counsel regularly even even as vice chairmen's we would constantly have a conversation around he may be making an insurance decision or I was making a decision around one of our non-operating businesses and the first thing we'd cross-check is, how does it impact your group? So have an amazing relationship and someone I immensely value the input. And then across our CEOs, we're so fortunate to have a great group that I would reach out to any of them on a specific circumstance and ask them for their input. And I generally know where they've dealt with a challenge or a significant opportunity. and I'd be the first to seek it out and say let's talk about it and figure out our path forward and it may be that it was someone on their team that really dealt with it and then I'd want to be talking to their team so fortunately because of Berkshire and the way we're created again it is a unique structure but we have an immense amount of resources around us and then we have our team in Omaha who has supported Warren for all those years they're remarkable folks there's there's not a lot of them but they are good and they're and they're exceptional and we're fortunate to have them as part of the team so it will be such that Berkshire endures and will endure as a team but clearly with leadership so thank you Becky that last question thank you So as we wrap up today, obviously I can't help but thank everyone for joining us this morning and early afternoon, both as our long-term shareholders, those that are newer shareholders, and again, all of you that came for the experience. It's greatly appreciated. We enjoy this engagement. It all comes together because there's an individual awareness highlighted in the past. Pulls together the exhibit hall, pulls together everything here. I'd like to acknowledge Melissa Shapiro. Thank you. And then the light was over on that table, but we do have, and we made this announcement in December, our long-standing CFO Mark Hamburg is retiring in June of this year we're very fortunate that then he will stay on for an incremental year as an advisor to our incoming CFO as a personal friend advisor to myself we will have Mark's knowledge resource and it's immense when it comes to Berkshire. I like to. Mark has been our CFO for 34 years. Not this June, the following June when he truly retires. It'll be 40 years with Berkshire, and it's been such an incredible career. And as Warren, he wears so many hats in this organization. I mean, he's helping Melissa. Melissa's organizing and doing it all, but when she has a question, she went to Mark to look for the answer around be at the annual meeting he's our corporate secretary i i like to say and i uh to replace mark we we hired a cfo but we also hired a general counsel uh it took it took two to replace him and and and more than that so mark thank you for your incredible contributions to berkshire warren has highlighted those and i can only echo all that thank you so much Now lastly, again, thank you for this remarkable experience for all of us at Berkshire. We treasure what we call Owner's Day, that opportunity to communicate around what's going on in Berkshire because we're so proud of it, absolutely committed to it, and passionately believe in Berkshire. But equally, the engagement of all you throughout the day yesterday into this afternoon, just greatly appreciated. Thank you and look forward to seeing you next May. Thank you.

There you have it. The 61st Berkshire Hathaway annual meeting is in the books. That was Greg Abel's first time running the show, but he did get a little help from the chairman, Warren Buffett. Buffett sat down with Becky ahead of the afternoon session and delivered a number of newsy comments. We'll kick things off. He kicked things off by saying that he's staying cautious with his own investments.

I think it's all working. It's all working. It isn't our ideal surrounding area or environment, I should say, in terms of deploying cash for Berkshire. but in terms of how we got the right management we got the right arrangement and you know we can pick our spots and and and nobody can tell us what to do exactly and and so sometimes we're doing nothing but other times we get quite active but with stocks sitting at record highs and at

elevated valuations. Becky pressed him on the overall valuation picture and whether he sees opportunities anywhere. Here's what he said.

I've compared the markets to a church with a casino attached and people can move between the church and casino. And I would say there are more people in the church and more people in the casino. But the casino has gotten very attractive to people. If you're buying one-day options or selling them, I mean, that's not investing, it's not speculating, it's gambling, just totally. There's nobody that can explain why they're buying an option for one day, Unless I may have maybe the fellow that, you know, made the 400 and some thousand dollars from knowing when we were going into that's the way I could do it. But I mean, and the quantity of those things is just incredible. So we've never had people in a more gambling mood than now. But that doesn't mean that investing is terrible.

That's, of course, been a persistent theme of Warren Buffett's for a very long period of time. He's always been skeptical of short term traders ability to outperform the market or certainly outperform a longer term shareholder. The church attached to the casino and the attendance varies between those. So when asked about the impacts, just to get to Greg Abel's Q&A of the Iran war on Berkshire, Abel said while it impacts businesses in a variety of ways, he echoed Buffett's emphasis on long term thinking.

It impacts really in a variety of ways all our businesses. but what I'm most proud of are our businesses. We operate these businesses for the long run just like we do for obviously for our shareholders. We take a long-term approach. There's not many days and I used to joke when I more had Adam's role. There wasn't a day I woke up where the phone wasn't ringing with good news. Yeah that phone rang. You knew you're going to have a bit of a challenge and we have that portfolio but that's okay. We'd be talking and we always worked our way through it and we have a team that would lean in and we'd come through and it could be anything and we never tried to use that as a reason we couldn't do something or get to the to the right place and what I've seen associated with the obviously the the war in Iran and and in the various conflicts in the Middle East is again a team that is very much taking the approach that that's the situation we're in we can manage our business and we we very much quickly move to what's the best solution for our customers how can we deliver and continue to deliver what we've done to them and what's their expectations around that and and our teams will

work incredibly hard to come up with with solutions abel was also asked about his willingness to divest holding companies, divest subsidiary companies, and whether Berkshire will remain a conglomerate under his leadership.

We are a conglomerate, but we are an efficient conglomerate. We don't have layers of management. We don't have a bunch of committees telling our businesses how to run, how they're going to manage their customer relationships. We try to, at the odd time, create frameworks so there's value shared across the businesses, so they're aware of what our other businesses are doing. And technologies, that's one of them. We like our framework now. We think it's very effective across three of our businesses. But the one thing we don't do is create layers of bureaucracy or other decision trees around it. And I think so many conglomerates end up with layers and layers of costs that don't add value to the overall corporation. So I actually, the answer to the conglomerate is, yes, we understand we're one. We see it operates very effectively. And we do not see ourselves divesting of subsidiaries for that reason or ever breaking off a group. Thank you.

As you can see, our Becky Quick is back with us. You know, I thought that was an interesting answer. And you pressed him on this idea. Do you envision down the road there'd be any kind of a breakup, some kind of a big spinoff or something like that? Pretty much swatted that away. However, before that, he did express a willingness under some circumstances to sell some businesses. It seemed pretty narrow in terms of what it would take. But I did think that was relevant. He seemed to want to get on the record with that.

Yeah, because I think in some ways he said, look, this is the same way I've been looking at things for a while. That's not necessarily the way it was seen, I think, under Warren and Charlie originally. The deal was, if we buy you, we buy you, you're forever. And that was something that brought you in. Back again to the idea of Greg's roots as an operator. If a business is losing money, we're not going to continue to sustain that. If we can find somebody else who can run that business better, we'll sell it off. We're going to do what's best for our shareholders, also for the employees of that company, as he said, to not want to wind something down. But he said, if we have to, we'll wind something down.

Yeah. I mean, as the questioner said, I get this from a lot of investors in Berkshire, the curiosity around that. Now, on one level, it's like, what are you going to do? Sell a business for cash and just add to the cash you're not doing anything with? But I guess in just a general capital allocation, you don't want capital to be eroded on one end of the business, even if it's relatively small.

It's the definition of capitalism, right? The idea of a profit motive, that is what drives things to be more efficient. And he's basically saying we're capitalists. We believe in that idea when it comes to it. I think the question of the conglomerate was an important one, though, because it's a question that I got several times in the shareholder questions that were sent in. And you probably get this all the time, too, just in talking to people who follow the company. That's the question. Will the conglomerate make sense? Because conglomerates over time don't tend to make sense. Berkshire has been the standout that says we're going to stand alone on this. There's always been the question is, will there be some sort of activist who tries to come in and break things up and tries to say, is it more valuable? if you break these things apart than the sum of the parts by putting them together. And that's part of the reason I wanted that answer on the record.

Yeah, exactly. And, you know, his characterization of it's an efficient conglomerate or an effective conglomerate. And what Warren and Charlie always said was, well, we let the businesses run. They have to be profitable. They give us the cash because we have a great track record of actually getting returns on newly invested cash. That works really well, even if there's no supposed coherent strategy as to why these businesses should be under one roof.

Right. And Greg laid that out again, the idea that this is a really tax efficient way of taking capital from one business and putting it in other businesses. Now, in the past, under Warren Buffett, that's always meant that you can take that money and invest it in stocks because he was such a great stock picker. I think the evolving idea of this company is you can take that money and use it to do huge capex in, you know, maybe Berkshire Hathaway Energy, maybe if you're looking to do something, maybe it's with the railroad, maybe it's one of the other businesses. You can buy and acquire other bolt-on businesses for some of those and let them expand, increase your operations. So I think we have to look at that idea of capital allocation more broadly and differently than we have under Warren Buffett as the CEO.

And there was that other question from the room that gave Greg the opportunity to create any differentiation between his approach to capital allocation and what kind of a margin and safety you look for in the cash flow metrics. And would you look at technology more closely? Right. He declined the opportunity to point to any daylight between him and Warren on that. He said there's a Berkshire Hathaway way.

Right.

And that's where we're going to keep going.

Very thin layers kept coming back to the idea of we're not building a bureaucracy with a lot of layers. We want to make sure that we operate efficiently. That's why this conglomerate works versus others.

Yeah. And then the question of who is your Charlie was kind of fun at the end. No individual yet appointed to that role.

A lot of people. Yeah. But I will say, again, back to that idea of when he and Ajit were on stage together, It was a very natural flow to watch some of those things happening, too. But the reason that you're seeing people like Katie Farmer and Adam Johnson, who's now running 32 companies, is because he's relying more heavily on someone like Adam to do a lot of that lifting.

Fascinating nugget Adam highlighted, which is that the average age of the company is now under his purview is 88 years. And that's 30-some consumer companies. Quite remarkable. And they use that as a way of downplaying these kind of near-term challenges like tariffs and like the Iran war.

We've seen this before, the idea that comes through it.

Somewhere in the culture we've seen this before, even if we personally haven't seen it before. What about Warren's comments? What most struck you about those?

You know, the idea, I think you guys played some. I didn't hear the sound because I was walking back from the stage, but I think you played some of the ideas of he's still looking around and things don't look all that cheap in the market, not huge opportunities. And by the way, he's looking. He comes to the office five days a week. He's still pretty involved in that. He told us when we last sat down with him last month that, yeah, he had made a small purchase at that point. So he's still playing every day, looking for these things, and they're active. But I think he and Greg both would love to get a phone call at any point if there's a seller of a business they might be interested in.

Even a year ago when he first announced that he was going to be stepping down as CEO at the end of that, you could actually perceive his eagerness to get that call over the course of the next year or so while he was still going to be day-to-day involved, as he still is.

Right. Anyway, that concludes things for CNBC's coverage of Berkshire's 61st annual shareholder meeting. Mike, it's been a pleasure. Yeah, it's been great hanging out here with you. Got lots more to come. Mike and I are going to be reunited on Monday morning, in fact, on Squawk Box. I'll still be on the ground here in Omaha. We'll be bringing you more information from what we've been learning all weekend. Mike and Melissa Lee are going to be holding down the fort back at the NASDAQ. That program starts, of course, at 6 a.m. Eastern time. Don't miss it. Bye, everybody. That does it for us. Thanks for watching again. We'll see you soon.