BERKSHIRE HATHAWAY INC (BRK-B)

CIK: 0001067983. SIC: 6331 Fire, Marine & Casualty Insurance. Latest 10-K as of: 2026-03-02.

SIC breadcrumb: Finance, Insurance, And Real Estate > Insurance Carriers > SIC 6331 Fire, Marine & Casualty Insurance

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1067983. Latest filing source: 0001193125-26-083899.

Selected Fundamentals

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance

Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2026-03-02. Report date: 2025-12-31.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

Net earnings attributable to Berkshire shareholders for each of the past three years are disaggregated in the table that follows. Amounts are after deducting income taxes and exclude earnings attributable to noncontrolling interests (in millions).

2025

2024

2023

Insurance – underwriting

$

7,258

$

9,020

$

5,428

Insurance – investment income

12,513

13,670

9,567

BNSF

5,476

5,031

5,087

Berkshire Hathaway Energy (“BHE”)

3,979

3,730

2,331

Manufacturing, service and retailing

13,647

13,072

13,362

Investment gains (losses)

30,737

41,558

58,873

Other-than-temporary impairment of investments in Kraft Heinz and Occidental

(8,255

)

—

—

Other

1,613

2,914

1,575

Net earnings attributable to Berkshire shareholders

$

66,968

$

88,995

$

96,223

Through our subsidiaries, we engage in numerous diverse business activities. The business segment data (Note 26 to the accompanying Consolidated Financial Statements) should be read in conjunction with this discussion.

Our periodic operating results may be affected in future periods by the impacts of ongoing macroeconomic and geopolitical conflicts and events, including tensions from developing international trade policies and tariffs, as well as changes in industry or company-specific factors or events. Considerable uncertainty remains as to the ultimate outcome of these events. We are currently unable to reliably predict the ultimate impact on our businesses, whether through changes in the availability of products, supply chain costs and efficiency, and customer demand for our products and services. It is reasonably possible there could be adverse consequences on our operating businesses, as well as on our investments in equity securities, which could significantly affect our future results.

Insurance underwriting generated after-tax earnings of $7.3 billion in 2025, $9.0 billion in 2024 and $5.4 billion in 2023. The comparative earnings decline in 2025 reflected lower earnings from each of our underwriting groups. Overall underwriting results over the past three years were exceptional compared to results over longer periods. However, earnings may decline in the future from the ongoing impacts of competition within the industry and rising claim cost trends. After-tax losses from significant catastrophe events were approximately $850 million in 2025, $1.2 billion in 2024 and $725 million in 2023.

After-tax earnings from insurance investment income declined $1.2 billion (8.5%) in 2025 versus 2024, reflecting lower interest income, attributable to lower interest rates, and dividend income. Insurance investment income increased $4.1 billion in 2024 compared to 2023, driven by higher interest income from short-term investments. Insurance investment income in 2025 was impacted by the effects of large capital distributions to Berkshire at the end of 2024. The income earned on investments (primarily U.S. Treasury Bills) held by Berkshire is included in “other” earnings in the preceding table.

After-tax earnings of BNSF increased 8.8% in 2025 and declined 1.1% in 2024, compared to the corresponding prior year. The increase in 2025 was primarily attributable to lower operating expenses, attributable to improved operating efficiencies, lower litigation accruals, the effect of a charge in 2024 from a labor agreement and a lower effective income tax rate. Earnings in 2024 benefited from higher unit volume, improvements in employee productivity and lower other operating costs, and were negatively impacted by charges in 2024 related to a labor agreement in the fourth quarter and litigation accruals.

After-tax earnings of BHE increased $249 million (6.7%) in 2025 compared to 2024 and $1.4 billion in 2024 compared to 2023. The earnings increase in 2025 reflected lower wildfire loss accruals at PacifiCorp, reduced earnings attributable to noncontrolling interests and the impact of real estate brokerage business litigation accruals in 2024, partially offset by lower earnings from the natural gas pipelines and other energy businesses. The increase in 2024 was primarily due to lower wildfire loss accruals and lower earnings attributable to noncontrolling interests, partially offset by real estate brokerage business litigation accruals.

Earnings from our manufacturing, service and retailing businesses increased 4.4% in 2025 compared to 2024 and decreased 2.2% in 2024 compared to 2023. Results among our numerous operations in 2025 were mixed, with overall earnings increases in our manufacturing and services businesses and lower earnings from the retailing businesses. The earnings decline in 2024 reflected lower earnings from our service and retailing businesses, partially offset by an overall increase from our manufacturing businesses.

K-34

Management’s Discussion and Analysis

Results of Operations

Investment gains (losses) can include significant unrealized gains and losses from changes in market prices of our investments in equity securities and in foreign currency exchange rates applicable to certain of our investments. We believe that investment gains and losses, whether realized from dispositions or unrealized from changes in market prices and exchange rates, are generally meaningless in understanding our reported periodic results or evaluating our periodic economic performance. These gains and losses have caused and will continue to cause significant volatility in our periodic earnings. Investment gains in 2023 also included an after-tax non-cash remeasurement gain of approximately $2.4 billion related to our previously held 38.6% interest in Pilot through the application of the acquisition accounting method.

We recorded other-than-temporary impairment losses in 2025 on our investments in The Kraft Heinz Company (“Kraft Heinz”) and Occidental Petroleum Corporation (“Occidental”) common stock, which are accounted for under the equity method. See Note 5 to the accompanying Consolidated Financial Statements.

After-tax other earnings include investment income not allocated to operating businesses, earnings from equity method investments (excluding the previously mentioned other-than-temporary impairment losses recognized on equity method investments), foreign currency exchange rate gains and losses related to Berkshire and BHFC non-U.S. Dollar denominated debt and goodwill impairment losses. After-tax other earnings in 2025 declined $1.3 billion compared to 2024, reflecting after-tax foreign currency exchange rate losses in 2025 of $642 million compared to after-tax gains in 2024 of $1.15 billion, reduced earnings from equity method investments and increased goodwill impairment losses, partially offset by increased investment income.

Insurance—Underwriting

Our periodic underwriting earnings may be subject to considerable volatility from the timing and magnitude of significant property catastrophe loss events. We currently consider consolidated pre-tax losses exceeding $150 million from an event occurring in the current year to be significant. We incurred significant losses from the Southern California wildfires in 2025, Hurricanes Helene and Milton in 2024 and storms and/or floods in New Zealand and Italy in 2023. Changes in estimates for unpaid losses and loss adjustment expenses (“LAE”), including amounts established for occurrences in prior years, and foreign currency transaction gains and losses arising from the remeasurement of non-functional currency denominated assets and liabilities can also significantly affect our periodic underwriting results.

We write primary insurance and reinsurance policies covering property and casualty risks, as well as life and health risks. Our insurance and reinsurance businesses are GEICO, Berkshire Hathaway Primary Group (“BH Primary”) and Berkshire Hathaway Reinsurance Group (“BHRG”). We strive to generate pre-tax underwriting earnings (defined as premiums earned less insurance losses/benefits incurred and underwriting expenses) over the long term in all business categories, except in our retroactive reinsurance and periodic payment annuity businesses. Time-value-of-money concepts are important considerations in establishing premiums received at the inception of these policies. While no new retroactive reinsurance or periodic payment annuity contracts have been written in recent years, we will continue to record charges to earnings related to the run-off of pre-existing contracts over the remaining claim settlement periods.

Underwriting results of our insurance businesses are summarized below (dollars in millions).

2025

2024

2023

Pre-tax underwriting earnings:

GEICO

$

6,824

$

7,813

$

3,635

BH Primary

785

855

1,374

BHRG

1,851

2,737

1,904

Pre-tax underwriting earnings

9,460

11,405

6,913

Income taxes

2,202

2,385

1,485

Net underwriting earnings

$

7,258

$

9,020

$

5,428

Effective income tax rate

23.3

%

20.9

%

21.5

%

K-35

Management’s Discussion and Analysis

Insurance—Underwriting

GEICO

GEICO writes property and casualty insurance policies, primarily private passenger automobile insurance, in all 50 states and the District of Columbia. GEICO offers its policies mainly by direct response methods where most customers apply for insurance coverage directly to the company. GEICO also operates an insurance agency that offers insurance policies written by third parties for individuals desiring coverages that are generally not offered by GEICO. A summary of GEICO’s underwriting results follows (dollars in millions).

2025

2024

2023

Amount

%

Amount

%

Amount

%

Premiums written

$

45,193

$

42,916

$

39,837

Premiums earned

$

44,481

100.0

$

42,252

100.0

$

39,264

100.0

Losses and LAE

32,144

72.3

30,331

71.8

31,814

81.0

Underwriting expenses

5,513

12.4

4,108

9.7

3,815

9.7

Total losses and expenses

37,657

84.7

34,439

81.5

35,629

90.7

Pre-tax underwriting earnings

$

6,824

$

7,813

$

3,635

2025 versus 2024

Premiums written increased $2.3 billion (5.3%) in 2025 compared to 2024, primarily attributable to an increase in policies-in-force over the past year. Premiums earned in 2025 increased $2.2 billion (5.3%) compared to 2024.

Losses and LAE increased $1.8 billion (6.0%) in 2025 compared to 2024. GEICO’s loss ratio (losses and LAE to premiums earned) was 72.3% in 2025 and 71.8% in 2024. The loss ratio increase in 2025 reflected the impact of higher average claims severities, partially offset by an increase in average earned premiums per policy, lower catastrophe losses and a comparative increase in favorable development of prior accident years’ claims estimates. Losses and LAE incurred in 2024 from Hurricanes Helene and Milton were approximately $360 million.

Private passenger auto claims frequencies declined in 2025 versus 2024 for property damage and collision coverages (one to three percent range), while bodily injury coverage frequency increased (four to six percent range). Average claims severities increased in 2025 for property damage and collision coverages (two to four percent range) and increased for bodily injury coverages (twelve to fourteen percent range) compared to 2024. Losses and loss adjustment expenses included reductions in the ultimate loss estimates for prior accident years’ claims of $957 million in 2025 compared to $550 million in 2024.

Underwriting expenses increased 34.2% in 2025 compared to 2024. GEICO’s expense ratio (underwriting expense to premiums earned) was 12.4% in 2025, an increase of 2.7 percentage points compared to 2024. The increases were driven by higher advertising and other policy acquisition expenses. The earnings from GEICO’s insurance agency (third-party commissions, net of operating expenses) are included as a reduction of underwriting expenses.

2024 versus 2023

Premiums written increased $3.1 billion (7.7%) in 2024 compared to 2023, reflecting an increase in average written premiums per auto policy of 7.8%, primarily attributable to rate increases, partially offset by a 0.5% decrease in policies-in-force. The rate of decline in policies-in-force slowed in the first half of 2024, with growth experienced in the second half of the year. Premiums earned in 2024 increased $3.0 billion (7.6%) compared to 2023.

Losses and LAE decreased $1.5 billion (4.7%) in 2024 compared to 2023. GEICO’s loss ratio was 71.8% in 2024 and 81.0% in 2023. The loss ratio decline reflected the impact of higher average earned premiums per auto policy and lower claims frequencies, partially offset by increases in average claims severities, lower favorable development of prior accident years’ claims estimates and losses from Hurricanes Helene and Milton in 2024.

K-36

Management’s Discussion and Analysis

Insurance—Underwriting

GEICO

Claims frequencies declined in 2024 versus 2023 for property damage (two to three percent range) and collision (eight to nine percent range) coverages, with bodily injury coverage down slightly. Average claims severities increased in 2024 for property damage and collision (two to five percent range) and bodily injury (eight to ten percent range) coverages compared to 2023. Reductions in the ultimate loss estimates for prior accident years’ claims were $550 million in 2024 compared to $1.5 billion in 2023.

Underwriting expenses increased 7.7% in 2024 compared to 2023. GEICO’s expense ratio was 9.7% in 2024, unchanged from 2023, as improved operating efficiencies and increased operating leverage were offset by increased advertising expenses.

BH Primary

BH Primary consists of numerous separately managed businesses that provide a wide variety of primarily commercial insurance solutions, including healthcare professional liability, workers’ compensation, automobile, general liability, property and specialty coverages. BH Primary’s insurers include Berkshire Hathaway Specialty Insurance Group (“BHSI”), RSUI, CapSpecialty, Berkshire Hathaway Homestate Group (“BHHC”), MedPro, GUARD Insurance Companies (“GUARD”), NICO Primary Group (“NICO Primary”), Berkshire Hathaway Direct (“BH Direct”) and U.S. Liability Insurance companies (“USLI”).

A summary of BH Primary’s underwriting results follows (dollars in millions).

2025

2024

2023

Amount

%

Amount

%

Amount

%

Premiums written

$

18,713

$

18,836

$

18,142

Premiums earned

$

18,713

100.0

$

18,733

100.0

$

17,129

100.0

Losses and LAE

12,519

66.9

12,666

67.6

11,224

65.5

Underwriting expenses

5,409

28.9

5,212

27.8

4,531

26.5

Total losses and expenses

17,928

95.8

17,878

95.4

15,755

92.0

Pre-tax underwriting earnings

$

785

$

855

$

1,374

2025 versus 2024

Premiums written were slightly lower in 2025 compared to 2024. Premiums written increased in 2025 at MedPro (9.0%) (primarily from student health business), BHHC (7.4%) and NICO Primary (13.0%) (primarily commercial automobile business), BH Direct (15.8%) and USLI (4.9%). These increases were substantially offset by declines in written premiums at GUARD (32.6%) and RSUI (8.7%). GUARD’s decline was due to significant volume reductions across numerous product categories, including personal lines, business owners’ and workers’ compensation business, from initiatives to exit unprofitable lines and tightened underwriting standards. The decline at RSUI was primarily due to reduced property volumes.

Losses and LAE declined $147 million (1.2%) in 2025 compared to 2024, and the loss ratio declined 0.7 percentage points compared to 2024. Prior accident years’ ultimate loss estimates increased by approximately $190 million in 2025 compared to reductions of $52 million in 2024. Claim costs for liability coverages continue to be negatively impacted by unfavorable social inflation trends, including the impacts of jury awards and litigation costs. Losses incurred from significant catastrophe events were approximately $305 million in 2025 and $350 million in 2024.

Underwriting expenses increased $197 million (3.8%) in 2025 compared to 2024. The expense ratio increased 1.1 percentage points in 2025 compared to 2024, primarily due to business mix changes.

K-37

Management’s Discussion and Analysis

Insurance—Underwriting

2024 versus 2023

Premiums written increased $694 million (3.8%) in 2024 compared to 2023, primarily due to increases at NICO Primary, BH Direct and BHHC, partially offset by a 16.3% reduction at GUARD. The increases at NICO Primary and BHHC were primarily attributable to commercial auto coverage and the increase at BH Direct reflected growth across several product lines. The decline at GUARD was due to decisions to exit unprofitable lines of business and to tighten underwriting guidelines, which began in 2023.

Losses and LAE increased $1.4 billion (12.8%) and the loss ratio increased 2.1 percentage points in 2024 compared to 2023. Losses incurred included reductions of prior accident years’ claims estimates of $52 million in 2024 and $537 million in 2023. The decline in favorable development was attributable to increases in estimates for casualty coverages. Losses incurred from significant catastrophe events were approximately $350 million in 2024 and were minimal in 2023.

Underwriting expenses increased $681 million (15.0%) and the expense ratio increased 1.3 percentage points to 27.8% in 2024 compared to 2023. The increase in the expense ratio was primarily attributable to BHSI from changes in business mix and GUARD due to increased expenses and the impact of lower premium volumes.

BHRG

BHRG offers excess-of-loss and quota-share reinsurance coverages on property and casualty risks to insurers and reinsurers worldwide through the NICO, General Re and TransRe Groups. We also write life and health reinsurance coverages through the General Re Group and Berkshire Hathaway Life Insurance Company of Nebraska. A summary of BHRG’s pre-tax underwriting results follows (in millions).

Pre-tax underwriting earnings (loss)

2025

2024

2023

Property/casualty

$

3,170

$

3,800

$

3,508

Life/health

374

223

354

Retroactive reinsurance

(1,070

)

(846

)

(1,541

)

Periodic payment annuity

(711

)

(597

)

(650

)

Variable annuity

88

157

233

Pre-tax underwriting earnings

$

1,851

$

2,737

$

1,904

Property/casualty

A summary of property/casualty reinsurance underwriting results follows (dollars in millions).

2025

2024

2023

Amount

%

Amount

%

Amount

%

Premiums written

$

20,168

$

21,899

$

22,360

Premiums earned

$

20,439

100.0

$

22,239

100.0

$

21,938

100.0

Losses and LAE

11,689

57.2

12,244

55.1

12,664

57.7

Underwriting expenses

5,580

27.3

6,195

27.8

5,766

26.3

Total losses and expenses

17,269

84.5

18,439

82.9

18,430

84.0

Pre-tax underwriting earnings

$

3,170

$

3,800

$

3,508

2025 versus 2024

Premiums written in 2025 declined $1.7 billion and premiums earned declined $1.8 billion compared to 2024, primarily attributable to volume reductions in property business. The volume decline was attributable to increased competition and lower rates.

K-38

Management’s Discussion and Analysis

Insurance—Underwriting

Losses and LAE declined $555 million (4.5%) in 2025 compared to 2024. The loss ratio increased 2.1 percentage points in 2025 compared to 2024. Losses incurred from significant catastrophe events were approximately $765 million in 2025 and $800 million in 2024. Additionally, losses and LAE in 2025 were reduced $1.1 billion compared to $1.7 billion in 2024 from reductions of estimated ultimate claim liabilities for prior accident years’ claims. The reductions were mostly attributable to lower-than-expected property losses.

Underwriting expenses decreased $615 million (9.9%) in 2025 compared to 2024, primarily due to the impact of lower premiums earned. Underwriting expenses also included foreign currency exchange losses from the remeasurement of certain non-functional currency denominated liabilities of $217 million in 2025 and gains of $121 million in 2024. Additionally, underwriting expenses included a $490 million charge in 2024 in connection with a settlement agreement reached concerning certain non-insurance affiliates that filed voluntary petitions under Chapter 11 of the bankruptcy code in the United States Bankruptcy Court for the District of New Jersey in 2023. See Note 27 to the accompanying Consolidated Financial Statements.

2024 versus 2023

Premiums written in 2024 declined $461 million (2.1%) versus 2023, attributable to lower property volumes, partly offset by generally higher rates, new business and increased participations in certain casualty lines. Premiums earned in 2024 increased 1.4% compared to 2023.

Losses and LAE declined $420 million (3.3%) and the loss ratio declined 2.6 percentage points in 2024 compared to 2023. Losses incurred from significant catastrophe events were approximately $800 million in 2024 and $900 million in 2023. Estimated ultimate claim liabilities for prior accident years were reduced $1.7 billion in 2024 and $1.4 billion in 2023, mostly attributable to lower-than-expected property losses.

Underwriting expenses increased $429 million (7.4%) and the expense ratio increased 1.5 percentage points in 2024 compared to 2023. Underwriting expenses in 2024 included the $490 million charge in connection with the previously discussed settlement agreement. Underwriting expenses also included pre-tax foreign currency exchange gains from the remeasurement of certain non-U.S. Dollar denominated liabilities of $121 million in 2024 and losses of $189 million in 2023. Before these items, underwriting expenses increased $249 million (4.5%) in 2024 compared to 2023.

Life/health

A summary of our life/health reinsurance underwriting results follows (dollars in millions).

2025

2024

2023

Amount

%

Amount

%

Amount

%

Premiums written

$

5,302

$

5,007

$

5,093

Premiums earned

$

5,269

100.0

$

4,998

100.0

$

5,072

100.0

Life and health benefits

3,927

74.5

3,415

68.3

3,593

70.8

Underwriting expenses

968

18.4

1,360

27.2

1,125

22.2

Total benefits and expenses

4,895

92.9

4,775

95.5

4,718

93.0

Pre-tax underwriting earnings

$

374

$

223

$

354

Premiums earned increased $271 million (5.4%) in 2025 compared to 2024, primarily due to increases in non-U.S. markets. Pre-tax underwriting earnings in 2025 increased $151 million compared to 2024, primarily due to increased earnings from international and U.S. life and health business, reduced losses in U.S. long-term care business and increased foreign currency exchange gains.

Premiums earned declined $74 million in 2024 compared to 2023, which included premium reductions of $161 million attributable to the commutations of several U.S. life contracts in 2023. Otherwise, premiums earned declined $235 million (4.5%) in 2024 compared to 2023, primarily attributable to reductions in non-U.S. life business. Pre-tax underwriting earnings declined $131 million in 2024 compared to 2023. Earnings included gains from life contract commutations of $53 million in 2024 and $134 million in 2023. Otherwise, underwriting earnings in 2024 reflected decreased earnings from non-U.S. life business and increased losses from the U.S. long-term care business in run-off, partly offset by increased earnings from U.S. life business.

K-39

Management’s Discussion and Analysis

Insurance—Underwriting

Retroactive reinsurance

Pre-tax underwriting losses from the run-off of retroactive reinsurance, before foreign currency exchange gains and losses, were $950 million in 2025, $898 million in 2024 and $1.5 billion in 2023, which reflected changes in estimated ultimate liabilities and related deferred charges during each period. Foreign currency exchange gains and losses largely derive from the remeasurement of liabilities of non-functional currency denominated contracts of U.S. subsidiaries. Pre-tax foreign currency exchange losses were $120 million in 2025 compared to gains of $52 million in 2024 and losses of $57 million in 2023.

Estimated ultimate retroactive reinsurance claim liabilities for prior years’ contracts increased $261 million in 2025, $196 million in 2024 and $1.1 billion in 2023. The net effects on underwriting earnings in 2025 and 2024 from the increases in ultimate claim liabilities, including the impact of related changes in deferred charges, were relatively insignificant. The increase in liabilities in 2023 primarily derived from higher estimates for asbestos, environmental and other casualty claims, which including the impact of changes in deferred charges, produced an incremental pre-tax loss of approximately $650 million. Unpaid losses and LAE for retroactive reinsurance contracts were $31.0 billion and deferred charge assets on retroactive reinsurance were $8.1 billion at December 31, 2025. Deferred charge balances will be charged to earnings over the expected remaining claims settlement periods.

Periodic payment annuity

Before foreign currency effects, pre-tax losses from periodic payment annuity contracts were $603 million in 2025, $596 million in 2024 and $590 million in 2023, arising primarily from the accretion of discounted annuity liabilities. Periodic payment annuity liabilities were $14.4 billion at December 31, 2025, including liabilities of $4.0 billion for contracts without life contingencies, as well as the effects of discount rate changes recorded in accumulated other comprehensive income. Pre-tax foreign currency exchange rate losses on non-functional currency denominated contracts of U.S. subsidiaries were $108 million in 2025, $1 million in 2024 and $60 million in 2023.

Variable annuity

Our variable annuity guarantee reinsurance contracts produced pre-tax earnings of $88 million in 2025, $157 million in 2024 and $233 million in 2023. Earnings are affected by changes in securities markets, interest rates and foreign currency exchange rates. These contracts have been in run-off for many years.

Insurance—Investment Income

A summary of net investment income attributable to our insurance operations follows (dollars in millions).

Percentage change

2025

2024

2023

2025 vs 2024

2024 vs 2023

Interest and other investment income

$

10,175

$

11,550

$

6,081

(11.9

)%

89.9

%

Dividend income

5,086

5,198

5,500

(2.2

)

(5.5

)

Pre-tax net investment income

15,261

16,748

11,581

(8.9

)

44.6

Income taxes

2,748

3,078

2,014

Net investment income

$

12,513

$

13,670

$

9,567

Effective income tax rate

18.0

%

18.4

%

17.4

%

Pre-tax investment income declined 8.9% in 2025 compared to 2024, which increased 44.6% compared to 2023. The decline in 2025 reflected lower interest and other investment income, primarily attributable to lower short-term interest rates, and reduced dividend income. The comparative increase in pre-tax investment income in 2024 reflected increased interest income from higher U.S. Treasury Bill and short-term investment balances, partly offset by lower dividend income. Dividend income varies from period to period due to changes in the investment portfolio and the amount, frequency and timing of dividends from investees. Additionally, interest income earned in the insurance group was affected by large capital distributions to Berkshire at the end of 2024.

The income earned on the cash and investments from capital distributed to Berkshire is included in other earnings shown on pages K-34 and K-54. We continue to believe that maintaining ample liquidity is paramount and insist on safety over yield with respect to short-term investments.

K-40

Management’s Discussion and Analysis

Insurance—Investment Income

Invested assets of our insurance businesses derive from shareholder capital and net liabilities assumed under insurance contracts or “float.” The major components of float are unpaid losses and loss adjustment expenses, including liabilities under retroactive reinsurance contracts, life, annuity and health benefit liabilities, unearned premiums and certain other liabilities, which are reduced by insurance premiums receivable, reinsurance receivables, deferred charges assumed under retroactive reinsurance contracts and deferred policy acquisition costs. The effect of discount rate changes on long-duration insurance contracts, which are recorded in accumulated other comprehensive income, are excluded from float, as such amounts are not included in earnings in the Consolidated Statements of Earnings.

Float was approximately $176 billion at December 31, 2025, $171 billion at December 31, 2024 and $169 billion at December 31, 2023. The cost of float is measured as the ratio of pre-tax underwriting earnings to float balances. Our combined insurance operations generated pre-tax underwriting gains in each of the three years ending December 31, 2025 and the average cost of float was negative in each year.

A summary of cash and investments held in our insurance businesses follows (in millions).

December 31,

2025

2024

Cash, cash equivalents and U.S. Treasury Bills

$

212,651

$

212,591

Equity securities

294,144

263,366

Fixed maturity securities

17,466

15,137

Other, includes loans to affiliates

4,702

5,980

$

528,963

$

497,074

Fixed maturity investments as of December 31, 2025 were as follows (in millions).

Amortized

Cost

Unrealized

Gains

Carrying

Value

U.S. Treasury, U.S. government corporations and agencies

$

3,533

$

14

$

3,547

Foreign governments

12,487

49

12,536

Corporate and other

1,157

226

1,383

$

17,177

$

289

$

17,466

U.S. government obligations are rated AA+ or Aa1 by the major rating agencies. Approximately 95% of our foreign government obligations were rated AA or higher by at least one of the major rating agencies. Foreign government securities include obligations issued or unconditionally guaranteed by national or provincial government entities.

BNSF

Burlington Northern Santa Fe, LLC (“BNSF”) operates one of the largest railroad systems in North America, with over 32,500 route miles of track in 28 states. BNSF also operates in three Canadian provinces. BNSF classifies its major business groups by type of product shipped, including consumer products, industrial products, agricultural and energy products, and coal. A summary of BNSF’s earnings follows (dollars in millions).

Percentage Change

2025

2024

2023

2025 vs 2024

2024 vs 2023

Railroad operating revenues

$

23,350

$

23,355

$

23,474

(—

%)

(0.5

)%

Railroad operating expenses

15,295

15,886

16,059

(3.7

)

(1.1

)

Railroad operating earnings

8,055

7,469

7,415

7.8

0.7

Other revenues (expenses), net

218

257

247

(15.2

)

4.0

Interest expense

(1,098

)

(1,078

)

(1,048

)

1.9

2.9

Pre-tax earnings

7,175

6,648

6,614

7.9

0.5

Income taxes

1,699

1,617

1,527

5.1

5.9

Net earnings

$

5,476

$

5,031

$

5,087

8.8

(1.1

)

Effective income tax rate

23.7

%

24.3

%

23.1

%

K-41

Management’s Discussion and Analysis

BNSF

A summary of BNSF’s railroad freight volumes by business group follows (cars/units in thousands).

Cars/Units

Percentage Change

2025

2024

2023

2025 vs 2024

2024 vs 2023

Consumer products

5,601

5,537

4,765

1.2

%

16.2

%

Industrial products

1,382

1,448

1,471

(4.6

)

(1.6

)

Agricultural and energy products

1,421

1,399

1,299

1.6

7.7

Coal

1,218

1,205

1,468

1.1

(17.9

)

9,622

9,589

9,003

0.3

6.5

2025 versus 2024

Railroad operating revenues declined slightly in 2025 compared to 2024. Average revenue per car/unit declined 0.5%, primarily attributable to lower fuel surcharge revenue and unfavorable business mix, partially offset by higher yield. Pre-tax earnings were $7.2 billion in 2025, an increase of 7.9% compared to 2024. Railroad operating earnings increased in 2025 as a result of lower operating expenses from improved productivity, lower litigation accruals, and the impact of a charge in December 2024 of $290 million related to the SMART-TD labor union agreement.

Operating revenues from consumer products declined 2.8% in 2025 to $8.2 billion compared to 2024. Revenues in 2025 reflected lower average revenue per car/unit, partially offset by an increase in volumes of 1.2%. The volumes increase was primarily due to higher intermodal shipments resulting from higher West Coast imports and a new intermodal customer, and an increase in automotive vehicle volumes.

Operating revenues from industrial products declined 1.5% in 2025 to $5.0 billion compared to 2024. Revenues in 2025 reflected lower volumes of 4.6%, partially offset by higher average revenue per car/unit. The decline in volumes was primarily due to lower shipments of construction products, plastics and petroleum products.

Operating revenues from agricultural and energy products increased 3.2% to $6.6 billion in 2025 compared to 2024. The revenue increase was attributable to higher average revenue per car/unit and higher volumes of 1.6%. The increase in volumes was primarily due to higher grain exports and petroleum fuel shipments, partially offset by lower domestic grain and feed shipments.

Operating revenues from coal increased 2.5% to $3.0 billion in 2025 compared to 2024. The revenue increase was attributable to higher average revenue per car/unit and a volume increase of 1.1%. The volume increase was primarily due to the competitive effects of higher natural gas prices.

Railroad operating expenses were $15.3 billion in 2025, a decline of $591 million (3.7%) compared to 2024, and the ratio of railroad operating expenses to railroad operating revenues (“operating ratio”) in 2025 declined 2.5 percentage points to 65.5% from 2024. Compensation and benefits expense in 2025 decreased $338 million (5.8%) compared to 2024, primarily due to a charge of $290 million in December 2024 related to a one-time payment included in the SMART-TD labor union agreement, as well as increased employee productivity, partially offset by wage inflation. Fuel expense declined $256 million (7.8%) compared to 2024, primarily due to lower average fuel prices and improved fuel efficiency. Railroad purchased services, equipment rents, materials and other expenses decreased $99 million (2.4%), primarily due to ongoing cost management efforts and lower litigation accruals. Depreciation and amortization expense in 2025 increased $102 million (3.9%) compared to 2024 due to a larger fixed asset base.

Income tax expense increased $82 million (5.1%) in 2025 compared to 2024. The effective income tax rate in 2025 declined versus 2024, primarily due to lower state income tax expenses arising from the impact of reductions in enacted rates during the second quarter of 2025.

K-42

Management’s Discussion and Analysis

BNSF

2024 versus 2023

Railroad operating revenues declined 0.5% in 2024 compared to 2023, reflecting lower average revenue per car/unit of 6.6%, primarily attributable to lower fuel surcharge revenue and business mix changes, partially offset by a net volume increase of 6.5%. Railroad operating earnings in 2024 increased due to volume growth and lower operating expenses from improved productivity, partially offset by the $290 million charge related to the SMART-TD labor union agreement that was finalized in the fourth quarter of 2024 and by increased litigation accruals.

Operating revenues from consumer products increased 7.1% in 2024 to $8.4 billion compared to 2023, reflecting a volume increase of 16.2% and lower average revenue per car/unit. The volume increase was primarily due to higher intermodal shipments from West Coast imports and volumes from a new intermodal customer.

Operating revenues from industrial products declined 1.2% in 2024 to $5.1 billion from 2023, reflecting a decline of 1.6% in volume, partially offset by higher average revenue per car/unit. The volume decline was primarily due to lower aggregates, taconite, minerals and waste shipments, substantially offset by higher plastics and petroleum products volumes.

Operating revenues from agricultural and energy products increased 4.0% to $6.4 billion in 2024 compared to 2023, attributable to a volume increase of 7.7%, partially offset by lower average revenue per car/unit. The volume increase was primarily due to higher grain, renewable fuels and fertilizer shipments.

Operating revenues from coal decreased 22.5% to $2.9 billion in 2024 compared to 2023. The decrease was attributable to a volume decrease of 17.9% and lower average revenue per car/unit. The volume decline was primarily due to lower natural gas prices.

Railroad operating expenses were $15.9 billion in 2024, a decrease of $173 million (1.1%) compared to 2023. The operating ratio declined 0.4 percentage points to 68.0% in 2024 versus 2023. Railroad compensation and benefits expenses increased $356 million (6.5%) in 2024 compared to 2023, primarily due to the $290 million charge related to the SMART-TD labor union agreement that was finalized in December 2024. The agreement allows BNSF the ability to redeploy brakepersons to conductors and engineers, which will permit BNSF to meet short-term hiring demands. Fuel expenses declined $417 million (11.3%) compared to 2023, primarily due to lower average fuel prices, partially offset by higher volumes. Railroad purchased services, equipment rents, materials and other expenses declined $126 million (3.0%), primarily due to cost reductions across numerous spend categories and lower property taxes, partially offset by a litigation charge in 2024 related to an ongoing legal case with the Swinomish Tribe.

BHE

Berkshire Hathaway Energy Company (“BHE”) is a holding company with subsidiaries that primarily operate within the energy industry. BHE’s domestic regulated utility interests include PacifiCorp, MidAmerican Energy Company (“MEC”) and NV Energy. BHE’s natural gas pipelines consist of five domestic regulated interstate natural gas pipeline systems and a 75% interest in a liquefied natural gas export, import and storage facility. Other energy subsidiaries operate two regulated electricity distribution businesses in Great Britain (“Northern Powergrid”), a regulated electricity transmission-only business in Alberta, Canada, and a diversified portfolio of mostly renewable power projects and investments. Another BHE subsidiary, HomeServices of America, Inc. (“HomeServices”), operates a residential real estate brokerage business and a residential real estate brokerage franchise business in the United States.

K-43

Management’s Discussion and Analysis

BHE

The rates BHE’s regulated utility and energy businesses charge customers for energy and services are largely based on the costs of business operations, including income taxes and a return on capital, and are subject to regulatory approval. To the extent such costs are not allowed in the approved rates, operating results will be adversely affected. A summary of BHE’s net earnings follows (dollars in millions).

2025

2024

2023

Revenues:

Energy operating revenues

$

21,871

$

21,566

$

21,280

Real estate operating revenues

4,327

4,354

4,322

Other income

99

428

406

Total revenues

26,297

26,348

26,008

Costs and expenses:

Energy cost of sales

6,346

6,616

7,057

Energy operating expenses

10,665

10,403

11,412

Real estate operating costs and expenses

4,302

4,509

4,316

Interest expense

2,642

2,528

2,283

Total costs and expenses

23,955

24,056

25,068

Pre-tax earnings

2,342

2,292

940

Income tax benefit

(1,785

)

(1,871

)

(2,022

)

Net earnings after income taxes

4,127

4,163

2,962

Noncontrolling interests of BHE subsidiaries

145

137

352

Net earnings attributable to BHE

3,982

4,026

2,610

Noncontrolling interests and preferred stock dividends

3

296

279

Net earnings attributable to Berkshire shareholders

$

3,979

$

3,730

$

2,331

Effective income tax rate

(76.2

)%

(81.6

)%

(215.1

)%

BHE’s income tax benefit includes significant production tax credits primarily from wind-powered electricity generation. On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted, introducing substantial revisions to energy-related U.S. federal tax policy. Among its provisions, the OBBBA accelerates the phase-out of clean electricity production and investment tax credits and establishes new sourcing requirements applicable to facilities commencing construction after December 31, 2025.

Although the OBBBA did not have a material impact on BHE’s 2025 financial results, BHE’s future financial results and capital expenditures related to renewable energy, storage and technology neutral projects, including the potential impact on the economics and viability of such projects, may be affected by the combined effects of the OBBBA and broader macroeconomic and geopolitical conditions, including changes in international trade policies and tariff regimes. However, BHE currently does not believe these items will significantly impact its business in the near term.

Net earnings attributable to noncontrolling interests and preferred stock dividends include earnings attributable to non-Berkshire owners of BHE common stock and dividends on preferred stock held by other Berkshire subsidiaries. All remaining noncontrolling interests in BHE common stock were acquired in 2024 and the preferred stock was redeemed in 2025.

The discussion of BHE’s operating results that follows is based on after-tax earnings, reflecting how the energy businesses are managed and evaluated. A summary of net earnings attributable to BHE follows (dollars in millions).

Percentage Change

2025

2024

2023

2025 vs 2024

2024 vs 2023

U.S. utilities

$

2,097

$

1,961

$

906

6.9

%

116.4

%

Natural gas pipelines

1,151

1,232

1,079

(6.6

)

14.2

Other energy businesses

1,175

1,334

1,024

(11.9

)

30.3

Real estate brokerage

24

(107

)

13

*

*

Corporate interest and other

(465

)

(394

)

(412

)

18.0

(4.4

)

$

3,982

$

4,026

$

2,610

(1.1

)

54.3

——————

* Not meaningful.

K-44

Management’s Discussion and Analysis

BHE

2025 versus 2024

The U.S. utilities operate independently in several states, including Utah, Oregon, Wyoming and other Western states (PacifiCorp), Iowa and Illinois (MEC) and Nevada (NV Energy). Net earnings increased $136 million (6.9%) in 2025 compared to 2024. Pre-tax Wildfire loss accruals at PacifiCorp were $100 million in 2025 and $346 million in 2024. See Note 27 to the accompanying Consolidated Financial Statements for additional information on the Wildfires. Otherwise, net earnings of the U.S. utilities in 2025 reflected comparative increases in electric utility margin, partially offset by increases in energy operating expenses and interest expense and lower other income and income tax benefits.

The U.S. utilities’ electric utility margin was $8.4 billion in 2025, an increase of $651 million (8.4%) compared to 2024. The increase reflected higher retail customer rates in certain territories, higher retail customer volumes and higher wholesale prices and volumes, partially offset by higher purchased electricity and thermal generation cost of sales. Retail customer volumes increased 2.2% overall (up 9.6% at MEC and 1.3% at PacifiCorp and down 2.2% at NV Energy) in 2025 compared to 2024, primarily due to higher customer usage and an increase in the average number of customers, partially offset by an overall unfavorable impact of weather. The increase in energy operating expenses was primarily due to higher depreciation and amortization expense, insurance expenses and general and plant maintenance costs.

Net earnings of natural gas pipelines declined $81 million in 2025 compared to 2024. The decrease reflected higher interest expense, an increase in operating expenses, decreased margin on gas sales and lower other income, partially offset by higher transportation and storage revenues.

Net earnings of other energy businesses decreased $159 million in 2025 compared to 2024. The decrease was primarily due to lower earnings at Northern Powergrid, partially offset by higher earnings from the renewable energy business. The decrease at Northern Powergrid was from lower distribution revenues due to lower tariffs from inflation adjustments beginning in the second quarter of 2025 and higher interest expense. Earnings from the renewable energy business increased mainly due to higher pricing and generation at certain projects, partially offset by a lower income tax benefit from owned wind projects mainly due to a decline in production tax credits.

Net earnings of real estate brokerage businesses increased by $131 million in 2025 compared to 2024, primarily attributable to charges in 2024 with respect to the real estate brokerage industry litigation matters. In April 2024, HomeServices agreed to terms with the plaintiffs to settle all claims asserted against HomeServices and certain of its subsidiaries and effectuated a nationwide class settlement. See Note 27 to the accompanying Consolidated Financial Statements. The real estate brokerage business continues to be negatively impacted by the limited availability of homes for sale and high home prices.

Corporate interest and other net earnings include BHE corporate interest expense and unallocated general and administrative expenses and income taxes.

2024 versus 2023

Net earnings of the U.S. utilities increased $1.1 billion (116.4%) in 2024 compared to 2023. Pre-tax loss accruals, net of expected insurance recoveries, for the Wildfires were $346 million in 2024 and $1.7 billion in 2023. Otherwise, net earnings in 2024 reflected comparative increases in electric utility margin, income tax benefits from wind production tax credits ($157 million) and other income, partially offset by increases in other energy operating expenses and interest expense.

The U.S. utilities’ electric utility margin was $7.8 billion in 2024, an increase of $274 million (3.6%) compared to 2023. The increase reflected higher retail customer rates in certain territories and higher retail customer volumes, partially offset by higher purchased electricity cost of sales and lower wholesale volumes and prices. Retail customer volumes increased 3.6% overall (up 6.5% at NV Energy, 3.1% at PacifiCorp and 1.2% at MEC) in 2024 compared to 2023, primarily due to increases in customer usage and the average number of customers, partially offset by an overall unfavorable impact of weather. The increase in other energy operating expenses was primarily due to higher vegetation management and other wildfire mitigation costs, insurance expenses and general and plant maintenance costs. Interest expense increased $314 million in 2024 over 2023, largely due to increased borrowings, including $4.4 billion of subsidiary debt issued in January 2024.

K-45

Management’s Discussion and Analysis

BHE

Net earnings of natural gas pipelines increased $153 million in 2024 compared to 2023. The increase in earnings reflected reductions in earnings attributable to noncontrolling interests, partially offset by the impact of a higher effective income tax rate, due to the acquisition of an additional 50% limited partner interest in Cove Point on September 1, 2023.

Net earnings of other energy businesses increased $310 million in 2024 compared to 2023. The increase was primarily due to higher earnings at Northern Powergrid, partially offset by lower earnings from the renewable energy business. The increase at Northern Powergrid was attributable to higher distribution revenue due to higher tariffs from inflation adjustments and lower income tax expense attributable to charges recognized in 2023 for the U.K. Energy Profits Levy and a group relief tax benefit recognized in 2024, partially offset by unfavorable results from the upstream gas exploration and production business and higher operating expenses. Earnings from the renewable energy business decreased mainly due to lower earnings from wind tax equity investments in 2024 and debt extinguishment gains recognized in 2023.

Net earnings of real estate brokerage businesses decreased $120 million in 2024 compared to 2023, primarily attributable to charges in connection with the real estate brokerage industry litigation matters. The real estate brokerage business was negatively impacted in 2024 by the limited availability of homes for sale and high home prices.

Manufacturing, Service and Retailing

A summary of revenues and earnings of our manufacturing, service and retailing businesses follows (dollars in millions).

Percentage change

2025

2024

2023

2025 vs 2024

2024 vs 2023

Revenues:

Manufacturing

$

78,487

$

77,231

$

75,405

1.6

%

2.4

%

Service and retailing

135,843

138,672

144,342

(2.0

)

(3.9

)

$

214,330

$

215,903

$

219,747

(0.7

)

(1.7

)

Pre-tax earnings:

Manufacturing

$

12,571

$

11,895

$

11,445

5.7

%

3.9

%

Service and retailing

4,905

4,948

6,144

(0.9

)

(19.5

)

17,476

16,843

17,589

3.8

(4.2

)

Income taxes and noncontrolling interests

3,829

3,771

4,227

Net earnings*

$

13,647

$

13,072

$

13,362

Effective income tax rate

21.2

%

21.7

%

22.2

%

Pre-tax earnings as a percentage of revenues

8.2

%

7.8

%

8.0

%

——————

* Excludes certain acquisition accounting expenses, which primarily relate to intangible asset amortization in connection with certain of our business acquisitions. The after-tax acquisition accounting expenses excluded from earnings were $528 million in 2025, $531 million in 2024 and $693 million in 2023. These expenses are included in “Other” in the summary of earnings on page K-34 and in the “Other” earnings table on page K-54.

K-46

Management’s Discussion and Analysis

Manufacturing, Service and Retailing

Manufacturing

Our manufacturing group includes a variety of industrial, building and consumer products businesses. A summary of revenues and pre-tax earnings of our manufacturing operations follows (dollars in millions).

Percentage change

2025

2024

2023

2025 vs 2024

2024 vs 2023

Revenues:

Industrial products

$

37,301

$

35,833

$

34,884

4.1

%

2.7

%

Building products

26,764

26,525

25,965

0.9

2.2

Consumer products

14,422

14,873

14,556

(3.0

)

2.2

$

78,487

$

77,231

$

75,405

Pre-tax earnings:

Industrial products

$

6,808

$

6,017

$

5,686

13.1

%

5.8

%

Building products

3,971

4,134

4,187

(3.9

)

(1.3

)

Consumer products

1,792

1,744

1,572

2.8

10.9

$

12,571

$

11,895

$

11,445

Pre-tax earnings as a percentage of revenues:

Industrial products

18.3

%

16.8

%

16.3

%

Building products

14.8

15.6

16.1

Consumer products

12.4

11.7

10.8

Industrial products

The industrial products group includes complex metal components and products for aerospace, power and general industrial markets (Precision Castparts Corp. (“PCC”)), specialty chemicals (The Lubrizol Corporation (“Lubrizol”)), metal cutting tools/systems (IMC International Metalworking Companies (“IMC”)), and Marmon Holdings, Inc. (“Marmon”) which consists of numerous autonomous manufacturing, service and leasing businesses, currently aggregated into eleven groups. Other industrial products members also produce equipment and systems for the livestock and agricultural industries (CTB International), drag reducing agents for pipelines (LiquidPower Specialty Products), structural steel fabrication products (W&W|AFCO) and beginning in August 2025, rodent control products (Bell Laboratories). On January 2, 2026, Berkshire acquired a chemicals business (“OxyChem”) from Occidental Petroleum Corporation. OxyChem results will be included in Berkshire’s consolidated results beginning as of that date.

2025 versus 2024

Revenues of the industrial products group in 2025 increased $1.5 billion (4.1%) and pre-tax earnings increased $791 million (13.1%) compared to 2024. Pre-tax earnings as a percentage of revenues in 2025 were 18.3%, an increase of 1.5 percentage points compared to 2024. Operating results of the group in 2025 generally improved compared to 2024. However, we are experiencing increased costs and reduced availability of certain raw materials, which could negatively impact our earnings in 2026.

PCC’s revenues were $10.8 billion in 2025, an increase of 4.6% compared to 2024. Revenues from aerospace products increased 7.5% in 2025 compared to 2024, primarily attributable to growing demand. Revenues from power products in oil and gas markets and general industrial products declined, while revenues increased from industrial gas turbine and certain non-aerospace products. PCC’s pre-tax earnings increased 34.2% in 2025 compared to 2024, reflecting the aerospace sales increases, improved manufacturing and operating efficiencies and favorable changes in business mix. Earnings in 2025 also included insurance recoveries associated with a fire at a fasteners facility that occurred in the first quarter of 2025, which mitigated the negative earnings impact from the fire. Future sales and earnings growth will depend on successfully increasing production and expanding capacity, as necessary, to meet customer demand and managing through ongoing macroeconomic risks.

Lubrizol’s revenues were $6.2 billion in 2025, a decline of 3.0%, compared to 2024. The decline was attributable to lower selling prices and volumes and unfavorable product mix. Lubrizol’s pre-tax earnings declined 20.6% in 2025 compared to 2024, reflecting the effects of lower selling prices and volumes, higher manufacturing costs, increased restructuring costs related to exiting certain businesses and litigation expenses, partially offset by lower raw materials costs and selling, general and administrative expenses and favorable product mix.

K-47

Management’s Discussion and Analysis

Manufacturing, Service and Retailing

Marmon’s revenues were $12.8 billion in 2025, an increase of 4.7% compared to 2024. Comparative revenue increases in 2025 were generated by the Plumbing & Refrigeration group (11.7%), attributable to copper prices and spreads, and the Water Technologies group (9.9%), primarily from increased refrigerator filter and water softeners volumes. Additionally, revenues increased in the Rail & Leasing group (7.8%), due to increases in tank car rental rates, railcar repair volumes, tank car sales as well as a business acquisition, the Electrical group (7.0%), due to higher copper prices and spreads, and the Transportation Products group (5.8%), driven by increased brake drum, commercial trailer and automotive aftermarket demand. These increases were partially offset by revenue declines in the Crane Services group (12.6%), driven by the loss of business due to increased price competition, as well as reduced wind project business, and in the Metal Services group (7.5%), attributable to lower demand in the construction and agricultural equipment markets.

Marmon’s pre-tax earnings increased 8.5% in 2025 compared to 2024, driven by higher earnings in the Plumbing & Refrigeration, Water Technologies, Rail & Leasing and Transportation Products groups reflecting the impact of higher revenues. These increases were partially offset by lower earnings in the Metal Services group, due to lower revenues, an impairment loss on the Electrical group’s joint venture in India, restructuring charges in the Foodservice Technologies group and higher medical costs across Marmon.

IMC’s revenues were approximately $4.1 billion in 2025, an increase of 3.9% compared to 2024. The increase was primarily attributable to sales price increases, driven by higher raw materials costs, the impact of business acquisitions and changes in sales mix. IMC’s pre-tax earnings were essentially unchanged in 2025 compared to 2024. Earnings in 2025 were negatively impacted by rising raw materials costs and changes in product mix and increased selling, general and administrative expenses. IMC operates globally, and a large portion of its products are manufactured in Israel. IMC’s operations in Israel have not been significantly impacted by the conflicts in the region.

2024 versus 2023

Revenues of the industrial products group increased $949 million (2.7%) and pre-tax earnings increased $331 million (5.8%) in 2024 compared to 2023. Pre-tax earnings as a percentage of revenues were 16.8% in 2024, an increase of 0.5 percentage points compared to 2023.

PCC’s revenues were $10.4 billion in 2024, an increase of 12.0% compared to 2023. The revenue increase was primarily attributable to higher demand for aerospace products, and to a lesser degree, power generation products. PCC’s pre-tax earnings increased 24.4% in 2024 compared to 2023, primarily attributable to sales increases and improved manufacturing and operating efficiencies.

Lubrizol’s revenues were $6.4 billion in 2024, relatively unchanged compared to 2023, as higher volumes were essentially offset by lower selling prices and unfavorable product mix. Sales volumes increased 4% in 2024 compared to 2023, reflecting higher volumes in both the additives and advanced materials businesses. Lubrizol’s pre-tax earnings increased 30.7% in 2024, primarily attributable to lower raw materials costs, higher sales volumes and lower manufacturing costs, partially offset by the impact of lower selling prices and higher selling, general and administrative expenses.

Marmon’s revenues were $12.2 billion in 2024, a decline of 1.7% compared to 2023. The largest revenue declines were experienced by the Transportation Products group (18.2%), as well as the Metal Services group (13.9%) and Retail Solutions group (9.4%), primarily due to reduced volume and changes in sales mix. Conversely, Electrical group revenues increased 6.0% due to higher copper prices and increased volumes. The Rail & Leasing group revenues increased 10.5% due to higher average lease renewal rates and increased railcar repair prices and volumes.

Marmon’s pre-tax earnings declined 8.7% in 2024 compared to 2023, reflecting lower earnings from the Transportation Products, Metals Services and Retail Solutions groups due to the revenue declines, the Crane Services group, attributable to lower revenues and higher costs, and the Electrical group, reflecting higher materials costs and unfavorable business mix changes. These declines were partially offset by higher earnings in the Rail & Leasing, Medical, Water Technologies and Foodservice Technologies groups.

IMC’s revenues were approximately $3.9 billion in 2024, a decrease of 2.2% compared to 2023, attributable to lower organic sales across all major regions and unfavorable foreign currency translation from a stronger U.S. Dollar, partially offset by the impact of business acquisitions and higher investment income. IMC’s pre-tax earnings declined 7.8% in 2024 compared to 2023, primarily attributable to lower sales and gross margin rates and increased selling, general and administrative expenses, partially offset by higher investment and other income.

K-48

Management’s Discussion and Analysis

Manufacturing, Service and Retailing

Building products

The building products group includes manufactured and site-built home construction and related lending and financial services (Clayton Homes). Other building products businesses include flooring (Shaw), insulation, roofing and engineered products (Johns Manville), bricks and masonry products (Acme Brick), paint and coatings (Benjamin Moore) and residential and commercial construction and engineering products and systems (MiTek).

2025 versus 2024

Revenues of the building products group increased $239 million (0.9%) in 2025 compared to 2024. Pre-tax earnings declined $163 million (3.9%) in 2025 compared to 2024. Certain of our building products businesses experienced slowing customer demand in 2025, as well as pricing pressures, attributable to prevailing general economic conditions.

Clayton Homes’ revenues increased 4.3% to $12.9 billion in 2025 compared to 2024. Revenues from home sales increased $152 million (1.6%) in 2025 versus 2024. New home unit sales for the year declined slightly in 2025 from 2024, although unit sales in the fourth quarter of 2025 declined 5.9% versus the same period in 2024. Financial services revenues increased 12.5% in 2025 compared to 2024, primarily due to increased interest income from higher average loan balances and average interest rates. Loan balances, net of allowances for credit losses, were approximately $29.5 billion as of December 31, 2025, an increase of 8.6% since December 31, 2024. Loan portfolios are largely funded by borrowings from Berkshire finance affiliates.

Clayton Homes’ pre-tax earnings were approximately $1.9 billion in 2025, unchanged from 2024, reflecting increased earnings from financial services, offset by lower earnings from home building activities. The increase in financial services earnings was primarily due to lower insurance claims and higher interest income, partially offset by an increase in interest expense of $291 million on increased borrowings from affiliates. The corresponding interest income on such borrowings is included in the “Other” earnings section on page K-54.

Our other building products businesses generated revenues of approximately $13.8 billion in 2025, a decline of $292 million (2.1%) versus 2024. Sales volumes of these businesses in 2025 were generally lower reflecting slowing housing markets in the U.S., partly offset by higher average selling prices. Pre-tax earnings declined $178 million (8.1%) and, as a percentage of revenues, declined 1.0 percentage point in 2025 versus 2024. The earnings decline was primarily attributable to lower sales volumes and average gross margin rates and negative impacts of international trade tensions, partially offset by lower restructuring and legal expenses compared to 2024.

2024 versus 2023

Revenues of the building products group increased $560 million (2.2%) in 2024 compared to 2023. Pre-tax earnings decreased $53 million (1.3%) in 2024 compared to 2023.

Clayton Homes’ revenues increased 8.5% to $12.4 billion in 2024 compared to 2023. Revenues from home sales increased $565 million (6.4%) in 2024, reflecting higher new home unit sales of 11.5%, partially offset by changes in sales mix and lower average selling prices. Also, financial services revenues increased 15.5% in 2024 compared to 2023, primarily due to increased interest income from higher average loan balances. Loan balances, net of allowances for credit losses, were approximately $27.2 billion as of December 31, 2024, an increase of 14.0% since December 31, 2023.

Clayton Homes’ pre-tax earnings declined $115 million (5.6%) in 2024 compared to 2023, attributable to lower earnings from financial services (4.4%) and manufacturing activities (9.4%). The financial services earnings decline reflected increased losses from homeowner property insurance claims, increased expected loan loss provisions due to higher loan originations and an increase in interest expense of $203 million due to an increase in borrowings from Berkshire finance affiliates. Borrowings from affiliates were $24.3 billion at December 31, 2024, an increase of $6.6 billion from December 31, 2023. The decline in manufacturing earnings was largely attributable to lower gross margin rates due to the increased cost of building homes to the Zero Energy Ready Home Program requirements, which was partially offset by income tax credits.

K-49

Management’s Discussion and Analysis

Manufacturing, Service and Retailing

Our other building products businesses generated revenues of approximately $14.1 billion in 2024, a decline of $413 million (2.8%) versus 2023. Sales volumes in 2024 increased at Johns Manville and declined at the other businesses in the group, while average selling prices were lower at Johns Manville and MiTek and slightly higher at the other businesses.

Pre-tax earnings of our other building products businesses increased $61 million (2.9%) in 2024 compared to 2023 and, as a percentage of revenues, increased 0.9 percentage points in 2024 to 15.6%. Earnings increased in 2024 from higher average gross margin rates arising from lower raw materials costs and improved manufacturing efficiencies at certain of the businesses, partially offset by higher selling, general and administrative expenses. Selling, general and administrative expenses in each year included charges from business restructuring activities and divestitures, as well as legal settlements and accruals.

Consumer products

The consumer products group includes leisure vehicles (Forest River), several apparel and footwear operations (including Fruit of the Loom, Garan, H.H. Brown Shoe Group and Brooks Sports) and a manufacturer of high-performance alkaline batteries (Duracell). This group also includes a global toy company (Jazwares), jewelry products (Richline) and custom picture framing products (Larson-Juhl).

2025 versus 2024

Consumer products group revenues were $14.4 billion in 2025, a decrease of 3.0% compared to 2024. The revenue decline was primarily due to Fruit of the Loom, Jazwares and Duracell, largely attributable to lower sales volumes. These declines were partially offset by increases at Brooks Sports, Forest River and Richline, attributable to combinations of higher volumes, changes in sales mix and/or higher prices driven by higher materials and input costs.

Pre-tax earnings of our consumer products group increased 2.8% in 2025 compared to 2024. In the third quarter of 2025, Duracell determined certain of its U.S.-manufactured battery product components were eligible for refundable advanced manufacturing production income tax credits beginning in the 2023 tax year. Duracell recorded the eligible credits for the 2023, 2024 and 2025 periods in 2025. Under U.S. GAAP, these credits are reflected in pre-tax earnings, not as income tax expense. Before the impact of the production credits, pre-tax earnings of the consumer products group declined significantly in 2025 compared to 2024. The decline reflected lower earnings from Jazwares, due to a variety of factors, including lower sales volumes and increased costs from supply chain disruptions; Forest River, primarily attributable to lower gross margins from sales mix changes; and Duracell and Garan, which experienced lower gross margins and higher selling, general and administrative expenses as a percentage of revenues. These declines were partially offset by higher earnings from Brooks Sports attributable to increased sales and gross margins, partially offset by higher selling, general and administrative expenses.

2024 versus 2023

Consumer products group revenues were $14.9 billion in 2024, an increase of 2.2% compared to 2023. The increase was primarily attributable to higher revenues from Forest River, Brooks Sports and Duracell, partially offset by lower revenues from Fruit of the Loom, Garan and Richline. Forest River revenues increased 6.4% in 2024, reflecting increased unit sales, including the impact of business acquisitions. Brooks Sports and Duracell revenues increased 9.1% and 2.5%, respectively, in 2024 versus 2023. The revenue reductions at Fruit of the Loom and Richline were attributable to lower sales volumes, whereas the decline at Garan was attributable to lower average selling prices.

Consumer products group pre-tax earnings increased $172 million (10.9%) in 2024 versus 2023. The increase was primarily attributable to higher earnings from our apparel and footwear businesses and Duracell, partially offset by lower earnings from Jazwares. Apparel and footwear earnings increased 37.0% in 2024 from 2023, primarily due to gross margin rate increases and increased gains on asset sales, as well as from the favorable effects of past restructuring and cost management efforts. The earnings increase at Duracell was attributable to increased gross margins and lower selling, general and administrative expenses. The decline in earnings in 2024 from Jazwares was primarily due to increased amortization expense, as well as the impact of reduced sales orders during the fourth quarter.

K-50

Management’s Discussion and Analysis

Manufacturing, Service and Retailing

Service and retailing

A summary of revenues and pre-tax earnings of our service and retailing businesses follows (dollars in millions).

Percentage change

2025

2024

2023

2025 vs 2024

2024 vs 2023

Revenues:

Service

$

22,982

$

20,697

$

20,588

11.0

%

0.5

%

McLane

50,998

51,907

52,607

(1.8

)

(1.3

)

Retailing

19,665

19,177

19,408

2.5

(1.2

)

Pilot*

42,198

46,891

51,739

(10.0

)

(9.4

)

$

135,843

$

138,672

$

144,342

Pre-tax earnings:

Service

$

2,702

$

2,305

$

2,995

17.2

%

(23.0

)%

McLane

676

634

455

6.6

39.3

Retailing

1,337

1,395

1,726

(4.2

)

(19.2

)

Pilot*

190

614

968

(69.1

)

(36.6

)

$

4,905

$

4,948

$

6,144

Pre-tax earnings as a percentage of revenues:

Service

11.8

%

11.1

%

14.5

%

McLane

1.3

1.2

0.9

Retailing

6.8

7.3

8.9

Pilot*

0.5

1.3

1.9

——————

* Information for Pilot in 2023 is for the eleven months ended December 31. Pilot’s net earnings for the month ending January 31, 2023, were included in equity method earnings in other earnings on page K-54.

Service

Our service group includes NetJets and FlightSafety (aviation services), which offer shared ownership programs for general aviation aircraft and high technology training products and services to operators of aircraft, and TTI, a distributor of electronics components.

Our other service businesses franchise and service a network of quick service restaurants (Dairy Queen), lease transportation equipment (XTRA) and furniture (CORT), provide third party logistics services that primarily serve the petroleum and chemical industries (Charter Brokerage), distribute electronic news, multimedia and regulatory filings (Business Wire), provide various facilities engineering and construction management services (IPS-Integrated Project Services, LLC (IPS)) and operate a television station in Miami, Florida (WPLG). McLane, which we view as a service business, is addressed separately since it is deemed a separate segment for financial reporting purposes.

2025 versus 2024

Service group revenues were $23.0 billion in 2025, an increase of 11.0% compared to 2024, primarily attributable to higher revenues from aviation services (9.9%), IPS (24.2%) and TTI (12.3%). The revenue increase from aviation services reflected increases in the number of aircraft in shared aircraft ownership programs (6.9%) and in-flight hours across NetJets’ various programs (11.3%) and higher average rates. The increase at TTI reflected increasing customer demand in most geographic regions and cost-based price increases. The increase at IPS was attributable to growth in life sciences and data center design, construction management and other construction consulting services.

Service group pre-tax earnings increased 17.2% in 2025 compared to 2024, primarily attributable to aviation services and TTI. Pre-tax earnings as a percentage of revenues rose 0.7 percentage points in 2025 to 11.8% compared to 2024. The earnings increase from aviation services was primarily attributable to increased revenues, partially offset by higher flight crew and instructor costs and higher maintenance, fuel and depreciation expenses, as well as increased government contract losses. The TTI earnings increase reflected higher revenues and improved operating expense leverage, partially offset by increased cost of sales.

K-51

Management’s Discussion and Analysis

Manufacturing, Service and Retailing

2024 versus 2023

Service group revenues were $20.7 billion in 2024, a slight increase compared to 2023, reflecting revenue increases from aviation services and IPS, partially offset by lower revenues from TTI and XTRA. Aviation services revenues increased 9.1% in 2024, while IPS revenues increased 14.4%. The aviation services increase was primarily due to an increase in the number of aircraft in shared aircraft ownership programs and increases in flight hours across NetJets’ various programs. The increase at IPS was primarily due to increased project volume.

TTI revenues declined 10.0% in 2024 compared to 2023. Sales in 2024 declined across most regions, markets and product lines, attributable to excess inventory levels within supply chains, which contributed to lower sales volumes and pricing pressures. The decline at XTRA was due to fewer units on lease.

Service group pre-tax earnings declined 23.0% in 2024 compared to 2023, primarily attributable to TTI, aviation services and XTRA. Pre-tax earnings as a percentage of revenues fell 3.4 percentage points in 2024 to 11.1% compared to 2023. Earnings from TTI declined 51.0% in 2024 compared to 2023, reflecting the impact of lower sales and price competition, which contributed to reduced gross sales margin rates, and higher selling, general and administrative expenses. Earnings from aviation services declined 10.9% in 2024 versus 2023, primarily attributable to increased cost of services and leasing, driven by higher flight crew, maintenance, fuel and depreciation expense, as well as increased impairment charges. The decline at XTRA was primarily due to lower revenues and increased costs.

McLane

McLane Company, Inc. (“McLane”) operates a wholesale distribution business that provides grocery and non-food consumer products to retailers and convenience stores (“retail”) and to restaurants (“restaurant”). McLane also operates businesses that are wholesale distributors of distilled spirits, wine and beer (“beverage”). McLane’s retail and restaurant businesses generate very high sales volumes and low profit margins.

2025 versus 2024

McLane’s revenues declined $909 million (1.8%) in 2025 compared to 2024, reflecting one less week in its fiscal year, lower volumes and higher prices attributable to inventory cost inflation. McLane’s pre-tax earnings increased $42 million (6.6%) in 2025 compared to 2024, with earnings increasing in the retail business and declining in the restaurant and beverage businesses.

2024 versus 2023

McLane’s revenues declined 1.3% in 2024 compared to 2023, reflecting lower restaurant business sales (5.7%) and increased retail business sales (1.0%). The decline in restaurant sales was partially attributable to changing consumer preferences for dining at restaurants and quick-service restaurants, partially offset by impacts of price inflation. McLane’s pre-tax earnings increased $179 million (39.3%) in 2024 compared to 2023 reflecting an increase in gross margin rates, which more than offset the impacts of lower sales and higher selling, general and administrative expenses.

Retailing

Our retailing businesses include Berkshire Hathaway Automotive, Inc. (“BHA”), which consists of over 80 auto dealerships that sell new and pre-owned automobiles and offer repair services and related products. BHA also offers and insures vehicle service contracts and related insurance products. Our retailing businesses also include four home furnishings businesses (NFM, R.C. Willey, Star Furniture and Jordan’s), which sell furniture, appliances, flooring and electronics.

Other retailing businesses include three jewelry businesses (Borsheims, Helzberg and Ben Bridge), See’s Candies (confectionery products), Pampered Chef (high quality kitchen tools), Oriental Trading Company (party supplies, school supplies and toys and novelties) and Detlev Louis Motorrad (“Louis”), a retailer of motorcycle accessories based in Germany. Pilot, which we view as primarily a retailing business, is addressed separately since it is deemed a segment for financial reporting purposes.

2025 versus 2024

Retailing group revenues increased 2.5% to $19.7 billion, while pre-tax earnings declined $58 million (4.2%) in 2025 compared to 2024. With the exception of NFM, our retailing businesses generated flat or lower earnings in 2025 compared to the prior year.

K-52

Management’s Discussion and Analysis

Manufacturing, Service and Retailing

BHA’s revenues increased 4.2% in 2025 compared to 2024, due to a 4.5% increase in new and pre-owned vehicle sales revenues, primarily due to increased new units sold, higher average prices and changes in sales mix. BHA’s finance/service contract revenues also increased 5.8%, while parts/service/repair operations revenues increased 2.2% in 2025 compared to 2024. BHA’s pre-tax earnings decreased 0.6% in 2025 compared to 2024, attributable to lower gross profit margins and higher selling, general and administrative expenses, partly offset by earnings increases from parts/service/repair and finance/service contract operations.

Aggregate revenues of our other retailing businesses declined 1.1% in 2025 compared to 2024. Several of these businesses experienced sluggish customer demand in 2025, attributable to a combination of increased competition and the impacts of higher economic uncertainty and changes in consumer confidence. Aggregate pre-tax earnings for the remainder of our retailing group declined $53 million in 2025 compared to 2024, generally reflecting lower gross margins and higher restructuring costs, partially offset by lower selling, general and administrative expenses.

2024 versus 2023

Retailing group revenues declined 1.2% to $19.2 billion in 2024 compared to 2023. Except for BHA and Louis, each of our retailing businesses experienced revenue declines in 2024 compared to 2023. BHA vehicle sales revenues increased 0.5% in 2024 versus 2023, reflecting an increase in new vehicle unit sales of 7.9% and a decline in pre-owned unit sales of 2.0%. Further, average vehicle selling prices were lower in 2024 versus 2023, attributable to increased inventory availability and product mix changes. Revenues of the home furnishings businesses declined 6.4% in 2024 versus 2023, primarily attributable to lower sales volumes and increased price competition. Also, combined revenues of our other retail businesses declined 5.8% in 2024 compared to 2023, attributable to increased competition and sluggish consumer demand.

Retailing group pre-tax earnings declined $331 million (19.2%) in 2024 compared to 2023. BHA’s pre-tax earnings declined 7.9% in 2024 compared to 2023, primarily due to lower vehicle gross profit margins, partially offset by higher earnings from finance/service contract and parts/service/repair operations, as well as lower selling, general and administrative expenses. Aggregate pre-tax earnings for the remainder of our retailing group declined $242 million (40.2%) in 2024 compared to 2023. Most of these other retailers generated significantly lower earnings in 2024 compared to 2023, reflecting lower sales and gross sales margin rates and higher selling, general and administrative expenses as percentages of sales.

Pilot

Pilot Travel Centers (“Pilot”) operates travel centers, primarily under the names Pilot or Flying J, and fuel-only retail locations. Pilot also operates large wholesale fuel and fuel marketing platforms in the U.S.

2025 versus 2024

Pilot’s revenues declined $4.7 billion (10.0%) in 2025 from 2024, primarily attributable to significant volume reductions from bulk fuel sales and fuel trading activities, as well as lower average fuel prices and wholesale fuel volumes. These declines were partially offset by increased retail fuel volumes.

Pilot’s pre-tax earnings declined $424 million (69.1%) in 2025 compared to 2024. Earnings in 2025 were negatively impacted by lower wholesale fuel and in-store gross margins and higher selling, general and administrative expenses, primarily due to higher employee compensation and benefits, insurance and maintenance costs, as well as by charges from adjustments to certain fuel-related balance sheet accounts. These effects were partially offset by lower interest expense, primarily attributable to reduced borrowing levels, and gains from asset dispositions. Pilot’s borrowings, which are from certain Berkshire insurance subsidiaries, were $3.7 billion at December 31, 2025.

2024 versus 2023

Pilot’s revenues declined $9.9 billion (17.4%) in 2024 compared to the full year 2023. The decline was primarily attributable to lower average fuel prices and a decline in volumes from non-core fuel activities.

Pilot’s pre-tax earnings declined $442 million (41.9%) in 2024 compared to the full year 2023. Gross sales margins declined 4.3% in 2024 compared to the full year 2023, attributable to lower diesel margins from lower price volatility. Selling, general and administrative expenses increased 10.3% in 2024 compared to the full year 2023, reflecting increased depreciation and amortization expenses, as well as labor, marketing and maintenance costs. Interest expense declined 30.9% in 2024 compared to the full year 2023, attributable to reduced borrowings and lower rates. In March 2024, Pilot borrowed $5.7 billion from certain Berkshire insurance subsidiaries and repaid its then outstanding third-party borrowings.

K-53

Management’s Discussion and Analysis

Investment Gains (Losses)

A summary of investment gains (losses) follows (dollars in millions).

2025

2024

2023

Investment gains (losses)

$

39,078

$

52,799

$

74,855

Income taxes and noncontrolling interests

8,341

11,241

15,982

Net earnings (loss)

$

30,737

$

41,558

$

58,873

Effective income tax rate

21.3

%

21.2

%

21.3

%

Unrealized gains and losses arising from changes in market prices of our investments in equity securities are included in our reported earnings, which significantly increases the volatility of our periodic net earnings due to the size of our equity securities portfolio and the inherent volatility of equity securities prices. Unrealized gains and losses on our investments in equity securities also include the effects of changes in foreign currency exchange rates on investments in non-U.S. issuers that are held by our U.S.-based subsidiaries.

Pre-tax investment gains and losses included net unrealized gains of $40.0 billion in 2025, $49.3 billion in 2024 and $69.1 billion in 2023, attributable to changes in market prices during each year on equity securities we held at the end of each year. We also recorded pre-tax gains and losses from market value changes during each year on equity securities sold during the year, including net losses of $18 million in 2025 and net gains of $3.5 billion in 2024 and $2.7 billion in 2023. Taxable investment gains on equity securities sold, which are generally the difference between sales proceeds and the original cost basis of the securities sold, were $23.7 billion in 2025, $101.1 billion in 2024 and $5.0 billion in 2023. Investment gains in 2023 included a non-cash pre-tax gain of approximately $3.0 billion related to the remeasurement of our pre-existing interest in Pilot to fair value through the application of acquisition accounting upon attaining control of Pilot for financial reporting purposes.

We believe that investment gains and losses, whether realized from sales or unrealized from changes in market prices, are often meaningless in terms of understanding our reported consolidated earnings or evaluating our periodic economic performance. We continue to believe the investment gains and losses recorded in earnings in any given period has little analytical or predictive value.

Other

A summary of after-tax other earnings (losses) follows (in millions).

2025

2024

2023

Investment income

$

3,566

$

1,445

$

959

Foreign currency exchange rate gains (losses) on Berkshire

   and BHFC non-U.S. Dollar senior notes

(642

)

1,151

211

Goodwill impairment losses

(1,555

)

(399

)

—

Equity method earnings

900

*

1,519

1,750

Acquisition accounting expenses

(528

)

(531

)

(693

)

Other earnings (losses)

(128

)

(271

)

(652

)

$

1,613

$

2,914

$

1,575

——————

* Excludes other-than-temporary impairment losses on investments in Kraft Heinz of $3.76 billion and Occidental of $4.50 billion. See Note 5 to the Consolidated Financial Statements.

Investment income includes corporate interest income and dividend income not allocated to operating businesses. After-tax corporate investment income increased $2.1 billion in 2025 compared to 2024 and $486 million in 2024 compared to 2023, primarily due to increased investments in U.S. Treasury Bills, which derived largely from capital distributions from Berkshire subsidiaries.

Foreign currency exchange rate gains and losses on Berkshire’s and BHFC’s senior notes represent the effects of changes in foreign currency exchange rates recognized in earnings from the periodic revaluation of non-U.S. Dollar denominated senior note liabilities into U.S. Dollars. The gains and losses recorded in any given period can be significant due to the size of the borrowings and the inherent volatility in foreign currency exchange rates.

K-54

Management’s Discussion and Analysis

Other

The goodwill impairment losses recorded in 2025 and 2024 derived from Berkshire’s past business acquisitions. The impairment losses in 2025 related to certain building products, consumer products and retailing businesses, whereas the losses in 2024 related to certain services and consumer products businesses. After-tax equity method investment earnings shown in the preceding table declined $619 million in 2025 compared to 2024, primarily due to lower earnings from Occidental and, to a lesser extent, Kraft Heinz. After tax equity method investment earnings declined $231 million in 2024 compared to 2023, primarily due to lower earnings from Kraft Heinz and the inclusion of Pilot for the month of January 2023.

Acquisition accounting expenses include charges arising from the application of the acquisition method of accounting in connection with certain of Berkshire’s past business acquisitions. These charges are primarily from the amortization of intangible assets recorded in connection with those acquisitions. Other earnings and losses primarily include unallocated corporate general and administrative expenses, interest expense, income tax expense and interest income on certain intercompany loans.

Financial Condition

Our Consolidated Balance Sheet continues to reflect significant liquidity and a very strong capital base. Berkshire’s shareholders’ equity at December 31, 2025 was $717.4 billion, an increase of $68.1 billion since December 31, 2024. Net earnings attributable to Berkshire shareholders were $67.0 billion for 2025 and included after-tax investment gains of approximately $30.7 billion and after-tax impairment losses of $8.3 billion on our equity method investments. Investment gains and losses from changes in the market prices of our investments in equity securities usually produce significant volatility in our earnings.

Berkshire’s common stock repurchase program permits Berkshire to repurchase its Class A and Class B shares at prices below Berkshire’s intrinsic value, as conservatively determined by Berkshire’s Chief Executive Officer after consultation with the Chairman of the Board. We are not committed to a minimum or subject to a maximum repurchase amount. We will not repurchase our stock if it reduces our consolidated cash, cash equivalents and U.S. Treasury Bills holdings to below $30 billion. Financial strength and redundant liquidity will always be of paramount importance at Berkshire. There were no share repurchases in 2025.

At December 31, 2025, our insurance and other businesses held cash, cash equivalents and U.S. Treasury Bills (net of payables for unsettled purchases) of $369.0 billion. Investments in equity and fixed maturity securities, excluding our equity method investments, were $315.6 billion. During 2025, we paid $16.9 billion to acquire equity securities and we received $30.7 billion from sales of equity securities.

Excluding borrowings of BHE and BNSF, our borrowings at December 31, 2025 were $45.8 billion, predominantly issued by Berkshire and BHFC. Berkshire’s outstanding debt at December 31, 2025 was $22.7 billion, an increase of $1.6 billion from December 31, 2024. At various dates in 2025, Berkshire issued approximately ¥451.6 billion (approximately $3.0 billion) of senior notes. The borrowings have interest rates ranging from 1.35% to 3.12% and maturity dates ranging from 2028 to 2055. In 2025, Berkshire repaid approximately $1.9 billion of maturing debt. Additionally, the carrying value of Berkshire’s non-U.S. Dollar denominated debt increased approximately $500 million in 2025 due to changes in foreign currency exchange rates.

Senior note borrowings of BHFC, a wholly-owned financing subsidiary, were approximately $18.3 billion at December 31, 2025, an increase of $347 million from December 31, 2024, primarily due to the impact of changes in foreign currency exchange rates. BHFC’s borrowings are used to fund a portion of loans originated and acquired by Clayton Homes and equipment held for lease by Marmon’s railcar leasing business. Berkshire guarantees BHFC’s senior notes for the full and timely payment of principal and interest.

BNSF’s outstanding debt was $24.1 billion as of December 31, 2025, an increase of $565 million from December 31, 2024. In 2025, BNSF issued $1.85 billion of debentures due in 2056 with a weighted average interest rate of 5.65% and repaid $1.3 billion of term debt.

BHE’s aggregate borrowings were approximately $59.3 billion at December 31, 2025, an increase of $2.9 billion from December 31, 2024. In 2025, BHE subsidiaries issued $4.3 billion of term debt with a weighted average interest rate of 6.2% and maturity dates ranging from 2035 to 2056. In 2025, BHE and its subsidiaries repaid term debt of $2.7 billion and increased short-term borrowings by approximately $875 million. In 2026, BHE subsidiaries issued $1.5 billion of term debt with a weighted average interest rate of 6.4% and maturity dates ranging from 2029 to 2056. Berkshire does not guarantee the repayment of any borrowings of BNSF, BHE or their subsidiaries.

K-55

Management’s Discussion and Analysis

Financial Condition

In 2025, our diverse group of businesses generated net operating cash flows of $46.0 billion. Our consolidated capital expenditures for property, plant and equipment and equipment held for lease were $20.9 billion in 2025, which included capital expenditures of $14.4 billion by BNSF and BHE. BNSF and BHE maintain very large investments in capital assets (property, plant and equipment) and regularly make significant capital expenditures in the normal course of business. BHE and BNSF forecast capital expenditures in 2026 of approximately $15 billion. On January 2, 2026, Berkshire acquired Occidental’s chemicals business (“OxyChem”) for approximately $9.5 billion.

Contractual Obligations

We are party to contracts associated with ongoing business activities, which will result in cash payments to counterparties in future periods. Our annual debt maturities for the next five years are summarized in Note 19 to the Consolidated Financial Statements. We also currently expect to pay interest on our debt ranging from $4.9 billion in 2026 to $4.3 billion in 2030 based on borrowings outstanding at December 31, 2025. Certain other obligations are included in our Consolidated Balance Sheets, such as operating lease liabilities and shared aircraft repurchase liabilities of NetJets. Estimated payments of these liabilities in each of the next five years are as follows: $2.0 billion in 2026; $2.1 billion in 2027; $2.4 billion in 2028; $2.1 billion in 2029; and $2.3 billion in 2030.

We are also obligated to pay claims arising from our property and casualty insurance companies. Such liabilities, including amounts from retroactive reinsurance, were approximately $152 billion at December 31, 2025. In 2025, our loss and LAE payments for occurrences prior to 2025 were approximately $30 billion. Our forecasted claim payments in 2026 are currently expected to exceed $30 billion with respect to claims occurring prior to 2026. However, the timing and amount of the payments under insurance and reinsurance contracts are contingent upon the outcome of future events and can be highly uncertain. Actual payments will likely vary, perhaps materially, from forecasted payments. We anticipate that claims payments will be funded by operating cash flows.

Other obligations pertaining to the acquisition of goods or services in the future, such as certain purchase obligations, are not currently reflected in the Consolidated Financial Statements and will be recognized in future periods as the goods are delivered or services are provided. As of December 31, 2025, the largest categories of our long-term contractual obligations primarily related to fuel, capacity, transmission and maintenance contracts and capital expenditure commitments of BHE and BNSF, aircraft purchase commitments of NetJets and commitments to purchase certain materials. We currently estimate future payments associated with these contracts over the next five years will approximate $25 billion, including $10 billion in 2026.

Critical Accounting Estimates

Certain accounting policies require us to make estimates and judgments in determining the amounts reflected in our Consolidated Financial Statements. Such estimates and judgments necessarily involve varying and significant degrees of uncertainty. Accordingly, certain amounts currently recorded in our Consolidated Financial Statements will likely be adjusted in the future based on new available information and changes in other facts and circumstances. A discussion of our principal accounting policies that required the application of significant judgments as of December 31, 2025 follows.

Property and casualty insurance unpaid losses

We record liabilities for unpaid losses and LAE (also referred to as “gross unpaid losses” or “claim liabilities”) based upon estimates of the ultimate amounts payable for loss events occurring on or before the balance sheet date. The timing and amount of ultimate loss payments are contingent upon, among other things, the timing of claim reporting from insureds and ceding companies and the final determination of the loss amount through the loss adjustment and settlement process.

As of the balance sheet date, recorded claim liabilities include estimates for reported claims and for incurred-but-not-reported (“IBNR”) claims. In this discussion, the period between the loss occurrence date and loss settlement date is referred to as the “resolution period.” Property claims typically have relatively short resolution periods, while casualty claims usually have longer resolution periods, occasionally extending for decades. Casualty claims are more susceptible to litigation and the potential adverse impacts of the judicial processes and extraordinary jury awards.

Our consolidated claim liabilities, including liabilities from retroactive reinsurance contracts, as of December 31, 2025 were approximately $152 billion, of which approximately 75% related to GEICO and the Berkshire Hathaway Reinsurance Group. Additional information regarding significant uncertainties inherent in the processes and techniques for estimating unpaid losses of these businesses follows.

K-56

Management’s Discussion and Analysis

Critical Accounting Estimates

Property and casualty insurance unpaid losses

GEICO

GEICO predominantly writes private passenger automobile insurance. As of December 31, 2025, GEICO’s gross claim liabilities were $27.5 billion, and $26.6 billion, net of reinsurance. GEICO’s claim reserving methodologies produce liability estimates based upon the individual claims. The key assumptions affecting our liability estimates include projections of ultimate claim counts (“frequency”) and average loss per claim (“severity”). A combination of several actuarial estimation methods, including Bornhuetter-Ferguson, chain-ladder methodologies and claim closure models are utilized.

The aggregate claim liability estimates recorded at the end of 2024 were reduced by $957 million during 2025, which produced a corresponding increase to pre-tax earnings. The assumptions used to estimate liabilities at December 31, 2025 reflect the most recent frequency and severity estimates. Future development of recorded liabilities will depend on whether actual frequency and severity of claims are more or less than anticipated.

With respect to liabilities for bodily injury (“BI”) claims, we believe it is reasonably possible that average claims severities will change by at least one percentage point from the projected severities used in establishing the recorded liabilities at December 31, 2025. A one percentage point increase or decrease in BI severities could produce a $290 million increase or decrease in recorded liabilities, with a corresponding decrease or increase in pre-tax earnings. Many of the economic forces that would likely cause BI severity to differ from expectations would likely also cause severities for other injury coverages to differ in the same direction.

Berkshire Hathaway Reinsurance Group

BHRG’s property and casualty claims arise from a diverse portfolio of reinsurance contracts underwritten across multiple entities through the NICO, General Re and TransRe Groups. A summary of BHRG’s property and casualty unpaid losses and LAE, other than retroactive reinsurance unpaid losses and LAE, as of December 31, 2025 follows (in millions).

Property

Casualty

Total

Case liabilities

$

6,990

$

11,374

$

18,364

IBNR liabilities

8,740

24,823

33,563

Gross unpaid losses and LAE

15,730

36,197

51,927

Reinsurance recoverable

688

1,323

2,011

Net unpaid losses and LAE

$

15,042

$

34,874

$

49,916

Gross unpaid losses and LAE consist primarily of traditional property and casualty coverages written under excess-of-loss and quota-share treaties. Under certain contracts, coverage can apply to multiple lines of business written and the ceding company may not report loss data by such lines consistently, if at all. In those instances, we judgmentally allocate losses to property and casualty coverages based on internal estimates.

The nature, extent, timing and perceived reliability of loss information received from ceding companies varies widely depending on the type of coverage and the contractual reporting terms. Reinsurance contract (or policy) terms, conditions and coverages also tend to lack standardization and may change relatively quickly compared to primary insurance policies.

K-57

Management’s Discussion and Analysis

Critical Accounting Estimates

Property and casualty insurance unpaid losses

The loss information provided under many facultative (individual risk) or per occurrence excess-of-loss contracts may be comparable to the information received under a primary insurance contract. However, loss information with respect to aggregate excess-of-loss and quota-share contracts is often in a summary form rather than on an individual claim basis. Loss data includes currently recoverable paid losses, as well as case loss estimates. Ceding companies infrequently provide reliable IBNR loss estimates.

Loss reporting to reinsurers is typically slower than primary insurers. Client reporting of claims information is required based on the terms of the contract at intervals ranging from 30 to 180 days after the end of the quarterly or annual period, reporting practices can vary by jurisdiction. To the extent that reinsurers assume and cede underlying risks from other reinsurers, further delays in claims reporting may occur. The relative impact of reporting delays depends on the type of coverage, contractual reporting terms, or the magnitude of the claim relative to the attachment point of the reinsurance coverage.

The premium and loss data BHRG receives is at least one level removed from the underlying claimant, so there is a risk that the loss data reported is incomplete, inaccurate or the claim is outside the coverage terms. We maintain internal procedures to determine that the information is complete and in compliance with the contract terms. Generally, our reinsurance contracts permit us to audit the ceding company’s records with respect to the subject business for compliance with the terms of the policy. Disputes occasionally arise concerning whether claims are covered by our reinsurance policies, which are normally resolved through negotiation. If disputes cannot be resolved, our contracts generally provide arbitration or alternative dispute resolution processes. We believe there are no coverage disputes at this time for which an adverse resolution would likely have a material impact on our consolidated results of operations or financial condition.

Establishing claim liability estimates for reinsurance requires evaluation of loss information received from our clients. While we generally rely on the ceding companies’ reported case loss estimates, we sometimes use our own case liability estimate, if deemed appropriate. As of December 31, 2025, our case loss estimates exceeded ceding company estimates by approximately $1.1 billion. We also periodically conduct detailed reviews of individual client claims, which may cause us to adjust our case estimates.

Although liabilities for losses are initially determined based on pricing and underwriting analysis, we use a variety of actuarial methodologies that place reliance on the extrapolation of historical data, loss development patterns, industry data and other benchmarks. The estimate of the IBNR liabilities also requires judgment by actuaries and management to reflect the impact of additional factors like change in business mix, volume, claim reporting and handling practices, inflation, social and legal environment and the terms and conditions of the contracts. The methodologies generally fall into or are hybrids of one or more of the following categories:

Paid and incurred loss development methods consider the expected case loss emergence and development patterns, together with expected loss ratios by year. Factors affecting loss development analysis include, but are not limited to, changes in the following: client claims reporting and settlement practices, the frequency of client company claim reviews, policy terms and coverage (such as loss retention levels and occurrence and aggregate policy limits), loss trends and legal trends that result in unanticipated losses. Collectively, these factors influence our selections of expected case loss emergence patterns.

Incurred and paid loss Bornhuetter-Ferguson methods consider actual paid and incurred losses and expected reporting patterns of paid and incurred losses, taking the initial expected ultimate losses into account to determine an estimate of the expected unpaid or unreported losses.

K-58

Management’s Discussion and Analysis

Critical Accounting Estimates

Property and casualty insurance unpaid losses

Frequency and severity methods commonly focus on a review of the number of anticipated claims and the anticipated claims severity and may also rely on development patterns to derive such estimates. However, our processes and techniques for estimating liabilities in such analyses generally rely more on a per-policy assessment of the ultimate cost associated with the individual loss rather than with an analysis of historical development patterns of past losses.

Additional analysis – In some cases we have established reinsurance claim liabilities on a contract-by-contract basis, determined from case loss estimates reported by the ceding company and IBNR liabilities that are primarily a function of an anticipated loss ratio for the contract and the reported case loss estimate. Liabilities are adjusted upward or downward over time to reflect case losses reported versus expected case losses, which we use to form revised judgment on the adequacy of the expected loss ratio and the level of IBNR liabilities required for unreported claims. Anticipated loss ratios are also revised to include estimates of known major catastrophe events.

Our claim liability estimation process for lines with shorter resolution periods, primarily property exposures, utilizes a combination of the paid and incurred loss development methods and the incurred and paid loss Bornhuetter-Ferguson methods. Certain property, individual risk and aviation excess-of-loss contracts tend to generate low frequency/high severity losses. Our processes and techniques for estimating liabilities under such contracts generally rely more on a per contract assessment of the ultimate cost associated with the individual loss event rather than with an analysis of the historical development patterns of past losses.

For claims with longer resolution periods, primarily casualty exposures, we may rely on different methods depending on the maturity of the business, with estimates for the most recent years being based on pricing loss expectations and more mature years reflecting the paid or incurred development pattern indications.

In 2025, we reduced estimated ultimate pre-2025 accident years’ claim liabilities by $1.1 billion. This net reduction includes $1.5 billion attributable to lower-than-expected reported property losses, partially offset by increased estimates for casualty claim liabilities. The net reduction produced a corresponding increase in pre-tax earnings.

The portfolios of contracts within the three BHRG Groups vary considerably, covering multiple lines of business within diverse geographic areas and legal environments, which requires us to vary the application of actuarial methods and weighting of assumptions to determine the appropriate ultimate claims estimates. Given the heterogeneity of the groups of contracts and actuarial methods and assumptions applied, we believe it is not possible to reasonably quantify the impact of changes in any single or limited group of assumptions to the entire portfolio. Moreover, changes in certain assumptions often create iterative impacts on other actuarial assumptions. Accordingly, we believe it is impracticable to provide meaningful quantification of the impact of changes to any limited number of chosen assumptions.

BHRG’s property and casualty unpaid loss and loss adjustment expenses could be materially higher or lower than the liabilities as of December 31, 2025 due to the inherent uncertainty of determining ultimate claims costs for claims that have occurred or will be deemed to have occurred as of the balance sheet date. We currently believe, however, that significant upward revisions of claim estimates are more likely for casualty claims, given longer resolution periods and evolving inflation, legal, judicial and mass tort risks, including the manifestation of new forms of claims that were not contemplated when the policies were written. We believe a five percent increase in BHRG’s casualty claim liabilities over time is reasonably possible, although this should not be viewed as a worst-case scenario given the risks identified. An increase of this magnitude to our gross liabilities for casualty claims at December 31, 2025 could produce an increase in casualty liabilities of about $1.8 billion, with a corresponding decrease to pre-tax earnings.

Retroactive reinsurance

Our retroactive reinsurance contracts indemnify insurance losses from events occurring before the contract inception dates. Claim liabilities associated with these contracts predominately pertain to casualty or liability exposures and we expect the resolution periods will be very long. At December 31, 2025, gross unpaid losses were $31.0 billion.

Our contracts are generally subject to maximum limits of indemnification and, as such, we currently expect that the aggregate remaining losses payable under our policies will not exceed $46 billion. While ultimate claims will be affected by judicial and legislative changes affecting asbestos, environmental or mass tort exposures, we currently believe it unlikely that losses will increase to the maximum or decline by more than 15% of our estimated gross claims liability as of December 31, 2025.

K-59

Management’s Discussion and Analysis

Critical Accounting Estimates

Property and casualty insurance unpaid losses

We establish liability estimates by individual contract, considering exposure and development trends, historical aggregate loss payment patterns and project expected ultimate losses under various scenarios. We apply judgmental probability factors to these scenarios to determine an expected outcome. We also monitor subsequent loss payment activity and ceding company reports and other available information. We re-estimate ultimate losses when significant events or significant deviations from expectations are revealed.

Certain of our contracts include asbestos and environmental, as well as other mass tort exposures. Our estimated liabilities for asbestos and environmental exposures were approximately $11.1 billion at December 31, 2025. Ceding companies do not consistently provide reliable and detailed underlying claims data, particularly with respect to multi-line or aggregate excess-of-loss policies. When possible, we conduct detailed analyses of the underlying loss data in making an estimate of ultimate remaining claims liabilities. When detailed loss information is unavailable, we may apply recent industry trends and projections to aggregate client data. Judgments in these areas necessarily consider the stability of the legal and regulatory environment under which we expect claims will be adjudicated. Legal reform and legislation and judicial rulings could also have a significant impact on our ultimate liabilities.

Overall, we increased estimated ultimate liabilities for prior year retroactive reinsurance contracts by $261 million in 2025, primarily for asbestos, environmental and other casualty exposures. This increase, including the changes in deferred charge assets, had an insignificant impact on underwriting earnings.

Deferred charges for retroactive reinsurance contracts, which at the inception dates of the contracts, represent the excess of the estimated ultimate liability for unpaid losses over premiums received. Deferred charges are subsequently adjusted based on the changes to expected ultimate liabilities and the timing of actual and expected future loss payments. Deferred charge assets were $8.1 billion at December 31, 2025. We estimate that deferred charge assets will decline approximately $800 million in 2026, producing a corresponding charge to pre-tax earnings.

Other Critical Accounting Estimates

Our Consolidated Balance Sheet at December 31, 2025 includes goodwill of acquired businesses of $83.1 billion and indefinite-lived other intangible assets of $18.9 billion. We evaluate these assets for impairment annually in the fourth quarter and on an interim basis if the facts and circumstances lead us to believe that more likely than not there has been an impairment.

Goodwill and indefinite-lived intangible asset impairment reviews include estimating the fair values of our reporting units and of indefinite-lived intangible assets. Several methods may be used to estimate fair values, including market quotations, multiples of earnings and other valuation techniques, such as discounted projected future earnings or cash flow methods. The key assumptions and inputs used in fair value determinations may include forecasting revenues and expenses, cash flows and capital expenditures, as well as an appropriate discount rate and other inputs.

Significant judgment by management is required in estimating the fair value of a reporting unit and in performing impairment reviews. Due to the inherent subjectivity and uncertainty in forecasting future cash flows and earnings over long periods of time, actual results may differ materially from the forecasts. Reasonable estimates of the fair value of a business enterprise may range widely.

If the carrying value of a reporting unit exceeds the estimated fair value of the reporting unit, then the excess, limited to the carrying amount of goodwill, is charged to earnings as an impairment loss. If the carrying value of the indefinite-lived intangible asset exceeds fair value, the excess is charged to earnings as an impairment loss.

As of December 31, 2025, we concluded that more-likely-than not, the goodwill recorded in our Consolidated Balance Sheet was not impaired. However, the fair value estimates of the reporting units and assets are subject to change based on market and economic conditions, as well as events affecting our businesses or the industries in which they operate, which we cannot reliably predict. It is reasonably possible that adverse changes in such conditions or events could result in the recognition of impairment losses in our Consolidated Financial Statements.

K-60

Management’s Discussion and Analysis

Critical Accounting Estimates

Other Critical Accounting Estimates

In connection with the annual goodwill impairment review conducted in the fourth quarter of 2025, our estimated fair values of four reporting units did not exceed our carrying values by at least 20%. The largest unit was Pilot, which had an estimated fair value of approximately $20.2 billion and a carrying value of $18.7 billion, including goodwill of $6.5 billion. The remaining three other reporting units had an aggregate estimated fair value of approximately $7.5 billion, which approximated our carrying values, including goodwill of $2.7 billion at December 31, 2025.

Market Risk Disclosures

Our Consolidated Balance Sheets include substantial amounts of assets and liabilities whose fair values are subject to market risks. Our significant market risks are primarily associated with equity prices, interest rates, foreign currency exchange rates and commodity prices. The fair values of our investment portfolios remain subject to considerable volatility. The following sections address the significant market risks associated with our business activities.

Equity Price Risk

Investments in equity securities represent the most significant portion of our consolidated investment portfolio. Strategically, we strive to invest in businesses that possess excellent economics and management, and we prefer to invest a meaningful amount in each company. Historically, our investments have been concentrated in relatively few issuers. At December 31, 2025, approximately 65% of the aggregate fair value of our investments in equity securities was concentrated in five companies.

We often hold our investments for long periods and short-term price volatility has occurred in the past and will occur in the future. We also maintain significant levels of shareholder capital and ample liquidity to provide a margin of safety against short-term price volatility.

The following table summarizes our investments in equity securities, excluding our investments in Kraft Heinz and Occidental common stocks that are accounted for under the equity method, and the estimated effects of a hypothetical 30% increase and a 30% decrease in market prices as of December 31, 2025 and 2024. The selected 30% hypothetical increase and decrease does not represent the best- or worst-case scenario. Indeed, results from declines could be far worse due both to the nature of equity markets and the concentrations existing in our investment portfolio. Dollar amounts are in millions.

Fair Value

Hypothetical

Price Change

Estimated

Fair Value After

Hypothetical

Change in Prices

Estimated

Increase

(Decrease)

in Net Earnings (1)

December 31, 2025

Investments in equity securities

$

297,778

30% increase

$

384,849

$

68,687

30% decrease

210,866

(68,562

)

December 31, 2024

Investments in equity securities

$

271,588

30% increase

$

351,020

$

62,615

30% decrease

192,323

(62,483

)

——————

(1)
The estimated increase (decrease) is after income taxes.

K-61

Management’s Discussion and Analysis

Market Risk Disclosures

Interest Rate Risk

We also invest in bonds, loans or other interest rate sensitive instruments. Our strategy is to acquire or originate such instruments at prices or with interest rates considered appropriate relative to the perceived credit risk. We also issue debt in the ordinary course of business to fund business operations and for general purposes. We attempt to maintain high credit ratings to minimize the cost of our debt. We generally do not utilize derivative products, such as interest rate swaps, to manage interest rate risks and we do not attempt to match maturities of assets and liabilities.

The fair values of our fixed maturity investments, loans and finance receivables and notes payable and other borrowings will fluctuate in response to changes in market interest rates. Increases and decreases in interest rates generally translate into decreases and increases in fair values of these instruments. Additionally, fair values of interest rate sensitive instruments may be affected by the perceived credit risk, prepayment options, liquidity and other factors, as well as general market conditions.

The following table summarizes the estimated effects of hypothetical changes in interest rates on our significant assets and liabilities that are subject to significant interest rate risk. We assumed that the interest rate changes occur immediately and uniformly to each category of instrument and that there were no significant changes to other factors used to determine the value of the instrument. The hypothetical changes in interest rates do not reflect the best- or worst-case scenarios. Actual results may differ from those reflected in the table. Dollars are in millions.

Estimated Fair Value After Hypothetical Change in

Interest Rates (bp=basis points)

Fair

Value

100 bp

decrease

100 bp

increase

200 bp

increase

300 bp

increase

December 31, 2025

Assets:

Investments in fixed maturity securities

$

17,816

$

17,953

$

17,684

$

17,559

$

17,439

Investments in equity securities*

8,805

9,095

8,536

8,277

8,030

Loans and finance receivables

30,532

31,815

29,324

28,215

27,186

Liabilities:

Notes payable and other borrowings:

Insurance and other

40,924

43,981

38,285

35,994

33,991

Railroad, utilities and energy

76,803

84,025

68,744

62,816

57,751

December 31, 2024

Assets:

Investments in fixed maturity securities

$

15,364

$

15,503

$

15,220

$

15,086

$

14,958

Investments in equity securities*

8,429

8,743

8,142

7,864

7,597

Loans and finance receivables

27,579

28,774

26,476

25,455

24,508

Liabilities:

Notes payable and other borrowings:

Insurance and other

40,181

43,345

37,467

35,122

33,082

Railroad, utilities and energy

72,506

80,339

65,916

60,332

55,565

——————

* Includes Cumulative Perpetual Preferred Stocks

Foreign Currency Risk

Certain of our subsidiaries operate in foreign jurisdictions and we transact business in foreign currencies. In addition, we hold investments in common stocks of major multinational companies, who have significant foreign business and foreign currency risk of their own. In most instances, we do not attempt to match assets and liabilities by currency or use derivative contracts to manage foreign currency risks in a meaningful way.

K-62

Management’s Discussion and Analysis

Market Risk Disclosures

Foreign Currency Risk

Our net assets subject to financial statement translation into U.S. Dollars are primarily in our insurance, utilities and energy and certain manufacturing subsidiaries. A portion of our financial statement translation-related impact from changes in foreign currency exchange rates is recorded in other comprehensive income. In addition, we include gains or losses from changes in foreign currency exchange rates in net earnings related to non-U.S. Dollar denominated assets and liabilities of Berkshire and its U.S.-based subsidiaries. A summary of these gains (losses), after-tax, for each of the years ending December 31, 2025 and 2024 follows (in millions).

2025

2024

Non-U.S. Dollar denominated debt included in net earnings

$

(642

)

$

1,151

Net liabilities under certain reinsurance contracts included in net earnings

(351

)

136

Foreign currency translation included in other comprehensive income

1,502

(1,646

)

Commodity Price Risk

Our subsidiaries use commodities in various ways in manufacturing and providing services. As such, we are subject to price risks related to various commodities. In most instances, we attempt to manage these risks through the pricing of our products and services to customers. To the extent that we are unable to sustain price increases in response to commodity price increases, our operating results will likely be adversely affected. We generally do not utilize derivative contracts to manage commodity price risks to any significant degree.