To the Shareholders of Berkshire Hathaway Inc.,

Our company performed well in 2025, a year that presented both challenges and opportunities across our diverse operations. We ended the year with a record $95.6 billion in operating earnings, a testament to the enduring strength and resilience of our businesses and the outstanding management teams running them. This result demonstrates the power of compounding we have discussed for decades, even in an environment of shifting economic winds.

Our investment portfolio also contributed positively, though with the usual volatility. We continue to hold substantial positions in a select group of American businesses, chosen for their competitive advantages and the integrity of their leadership. Our largest holdings, Apple (AAPL) and Bank of America (BAC), continue to deliver significant value, reflecting their strong market positions and consistent earnings power. We made minor adjustments to our equity portfolio throughout the year, primarily trimming positions where valuations appeared stretched or where our long-term conviction waned slightly.

Our Core Businesses: The Unseen Foundation

Berkshire's true strength lies not just in our marketable securities, but in our constellation of wholly-owned businesses. These range from railroads to utilities to manufacturing and retail. BNSF Railway had a solid year, navigating fluctuating freight volumes with impressive efficiency gains through its Precision Scheduled Railroading (PSR) 2.0 initiative. The team continues to invest in infrastructure improvements, ensuring its long-term capacity and safety.

At Berkshire Hathaway Energy (BHE), we continued our massive capital investments in grid modernization and renewable energy. Our Gateway West Transmission Project is progressing ahead of schedule, a critical step in bringing clean energy to millions. We see these investments as both an economic imperative and an environmental responsibility. The regulatory landscape for utilities remains complex, but we believe BHE's commitment to reliability and sustainability positions it well for the future.

Our insurance businesses, led by Ajit Jain and the excellent team at GEICO, delivered strong underwriting profits despite some challenging weather events. The fundamental discipline of pricing risk accurately remains paramount. We grew our float to an all-time high of $170 billion, a significant source of capital that we deploy thoughtfully.

Capital Allocation: Our Forever Task

We remain steadfast in our four avenues for deploying capital: First, reinvesting in our many businesses to expand their reach and efficiency. Second, making bolt-on acquisitions that fit our criteria of good businesses at fair prices, managed by honest and able people. Third, purchasing entire businesses that meet our stringent standards. Fourth, repurchasing Berkshire shares when they trade below our conservative estimate of intrinsic value. In 2025, we deployed $15 billion for capital expenditures across our subsidiaries, a strong commitment to organic growth. We also executed $10 billion in share repurchases, reflecting our confidence in Berkshire's underlying value and our desire to enhance per-share intrinsic value for continuing shareholders. We continue to believe that intelligent share repurchases are one of the most shareholder-friendly actions a company can take, far superior to paying ordinary dividends which we view as suboptimal for our particular structure and shareholder base.

The Road Ahead

While economic forecasting is a fool's errand, we remain optimistic about the long-term prospects of the United States and, by extension, Berkshire Hathaway. Our diverse collection of businesses provides an unparalleled hedge against the unpredictable. We will continue to seek out opportunities to acquire wonderful businesses at sensible prices, leveraging our strong financial position. We anticipate continued challenges in the global supply chain, but our operating managers are exceptionally skilled at navigating these complexities. We also expect to continue our disciplined investment in renewable energy and infrastructure, targeting another $18 billion in capital expenditures in 2026, primarily within BNSF and BHE.

Our management philosophy remains unchanged: decentralization, trust, and a long-term perspective. We are fortunate to have managers who treat their businesses as if they were their own, a rarity in today's corporate world. They are the true architects of Berkshire's success.

Thank you for your continued trust and partnership.

Warren E. Buffett
Chairman and Chief Executive Officer