BERKSHIRE HATHAWAY INC

Previous wording

Net earnings (loss) 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).

Current wording

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).

Previous wording

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

Current wording

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.

Previous wording

Our periodic operating results may be affected in future periods due to impacts of ongoing macroeconomic and geopolitical events, as well as changes in industry or company-specific factors or events. We cannot reliably predict the future economic effects of these factors or events on our businesses.

Current wording

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.

Previous wording

After-tax earnings of BNSF declined 1.1% in 2024 compared to 2023 and 14.4% in 2023 compared to 2022. Earnings in 2024 benefited from higher unit volume, improvements in employee productivity and lower other operating costs, and were negatively impacted by charges related to a labor agreement in the fourth quarter of 2024 and litigation charges related to an ongoing legal case. The decrease in 2023 was primarily attributable to lower overall freight volumes and higher non-fuel operating costs, partially offset by lower fuel costs.

Current wording

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.

Previous wording

Earnings from our manufacturing, service and retailing businesses decreased 2.2% in 2024 compared to 2023 and increased 6.8% in 2023 compared to 2022. The earnings decline in 2024 reflected lower earnings from our service and retailing businesses, partially offset by earnings increases at several of our manufacturing businesses. The earnings increase in 2023 reflected increases at certain industrial products manufacturers and service businesses, the full year impact of Alleghany’s non-insurance businesses acquired in 2022 and earnings from Pilot Travel Centers for the eleven months ending December 31, 2023, partially offset by lower earnings at several of our other manufacturing businesses and at certain of our service and retailing businesses.

Current wording

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.

Previous wording

Investment gains (losses) predominantly derive from our investments in equity securities and include significant unrealized gains and losses from changes in market prices and 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, are generally meaningless in understanding our reported periodic results or evaluating the economic performance of our operating businesses. 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.

Current wording

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.

Previous wording

Our periodic underwriting earnings may be subject to considerable volatility from the timing and magnitude of significant property catastrophe loss events. Further, we generally do not retrocede the risks we assume. We currently consider consolidated pre-tax losses exceeding $150 million from an event occurring in the current year to be significant. Significant events in 2024 included Hurricanes Milton and Helene, while significant events in 2023 included a cyclone and floods in New Zealand and a hailstorm in Italy. In 2022, significant events were Hurricane Ian and floods in Australia. In January 2025, several wildfires broke out in Southern California resulting in thousands of destroyed or damaged structures. We preliminarily estimate our insurance group could incur pre-tax losses of approximately $1.3 billion from these wildfires. Changes in estimates for unpaid losses and loss adjustment expenses, including amounts established for occurrences in prior years, and foreign currency transaction gains and losses arising from the changes in the valuation of non-U.S. Dollar denominated assets and liabilities can also significantly affect our periodic underwriting results.

Current wording

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.

Previous wording

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 is an important consideration in establishing premiums for these policies, which we normally receive at the contract inception date. Claim and benefit payments can extend for decades and are expected to exceed premiums, producing underwriting losses over the claim settlement periods through changes in deferred charge assets established on retroactive reinsurance contracts and accretion of discounted annuity liabilities, as well as changes in the estimated ultimate liabilities.

Current wording

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.

Previous wording

GEICO writes property and casualty policies, primarily private passenger automobile insurance, in all 50 states and the District of Columbia. GEICO markets its policies mainly by direct response methods where most customers apply for coverage directly to the company via the Internet or over the telephone. GEICO also operates an insurance agency that offers primarily homeowners and renters insurance to its auto policyholders. A summary of GEICO’s underwriting results follows (dollars in millions).

Current wording

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).

Previous wording

Losses and loss adjustment expenses decreased $4.5 billion (12.4%) in 2023. GEICO’s loss ratio declined 12.1 percentage points compared to 2022, reflecting the impact of higher average premiums per auto policy, lower property damage and collision claims frequencies and increased favorable development of prior accident years’ claims estimates, partially offset by increases in average claims severities across all significant coverages. Average claim severities increased for property damage (fourteen to sixteen percent range), collision (four to six percent range) and bodily injury (five to seven percent range). Losses and loss adjustment expenses included reductions in the ultimate loss estimates for prior accident years’ claims of $1.5 billion in 2023 and $653 million in 2022.

Current wording

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.

Previous wording

Underwriting expenses increased 7.7% in 2024 compared to 2023. GEICO’s expense ratio (underwriting expense to premiums earned) was 9.7% in 2024, unchanged from 2023, as improved operating efficiencies and increased operating leverage were offset by increased advertising expenses. The earnings from GEICO’s insurance agency (third-party commissions, net of operating expenses) are included as a reduction of underwriting expenses.

Current wording

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.

Previous wording

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 over the past year. 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.

Current wording

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.

Previous wording

Losses and loss adjustment expenses decreased $1.5 billion (4.7%) in 2024 compared to 2023. GEICO’s loss ratio (losses and loss adjustment expenses to premiums earned) 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 and less favorable development of prior accident years’ claims estimates.

Current wording

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.

Previous wording

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 down slightly. Average claims severities increased in 2024 for property damage and collision (two to five percent range) and bodily injury coverages (eight to ten percent range) compared to 2023. Losses and loss adjustment expenses incurred in 2024 from Hurricanes Helene and Milton were approximately $360 million. Reductions in the ultimate loss estimates for prior accident years’ claims were $550 million in 2024 compared to $1.5 billion in 2023.

Current wording

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.

Previous wording

BH Primary consists of several independently managed businesses that provide a variety of primarily commercial insurance solutions, including healthcare professional liability, workers’ compensation, automobile, general liability, property and specialty coverages for small, medium and large clients. BH Primary’s insurers include Berkshire Hathaway Specialty Insurance (“BHSI”), RSUI Group Inc. and CapSpecialty, Inc. (“RSUI and CapSpecialty,” acquired in October 2022), Berkshire Hathaway Homestate companies (“BHHC”), MedPro Group, GUARD Insurance group of companies (“GUARD”), National Indemnity Company (“NICO Primary”), Berkshire Hathaway Direct (“BH Direct”) and U.S. Liability Insurance companies (“USLI”).

Current wording

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”).

Previous wording

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, while the increase at BH Direct reflected growth across several product lines. The decline at GUARD resulted from management’s decision to exit admitted homeowners’ insurance and to tighten underwriting guidelines in other lines of business.

Current wording

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.

Previous wording

Losses and loss adjustment expenses 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 estimated ultimate losses for prior accident years’ claims of $52 million in 2024 and $537 million in 2023. The comparative decline reflected a significant increase in loss estimates at GUARD and lower reductions in estimated losses across several of our other businesses that write medical professional liability and commercial liability coverages, partially offset by increased reductions of property loss estimates. During 2024, due to deteriorating loss experience, management at GUARD performed a comprehensive review of claims and significantly increased estimated ultimate claim liabilities. The reduction of favorable development of prior years’ liability claims estimates across our other businesses was attributable to unfavorable social inflation trends, including the impacts of jury awards and litigation costs. Losses incurred from significant catastrophe events were approximately $350 million in 2024 and were minimal in 2023.

Current wording

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.

Previous wording

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 BH Specialty from changes in business mix and GUARD due to increased expenses and lower premiums earned.

Current wording

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.

Previous wording

The Berkshire Hathaway Reinsurance Group offers excess-of-loss and quota-share reinsurance coverages on property and casualty risks to insurers and reinsurers worldwide through several subsidiaries, led by National Indemnity Company (“NICO”), General Reinsurance Corporation, General Reinsurance AG and Transatlantic Reinsurance Company (“TransRe Group,” acquired in October 2022). We also write life and health reinsurance coverages through General Re Life Corporation, General Reinsurance AG and Berkshire Hathaway Life Insurance Company of Nebraska (“BHLN”). A summary of BHRG’s pre-tax underwriting results follows (in millions).

Current wording

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).

Previous wording

Underwriting expenses increased $429 million (7.4%) and the expense ratio increased 1.5 percentage points in 2024 compared to 2023. In 2024, NICO recorded a pre-tax charge in underwriting expenses of $490 million 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. 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.

Current wording

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.

Previous wording

Premiums written in 2024 declined $461 million (2.1%) versus 2023, attributable to lower overall 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.

Current wording

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.

Previous wording

Losses and loss adjustment expenses decreased $420 million (3.3%) and the loss ratio decreased 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 liabilities for losses occurring in prior accident years were reduced $1.7 billion in 2024 and $1.4 billion in 2023, mostly attributable to lower-than-expected property losses.

Current wording

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.

Previous wording

Underwriting expenses increased $2.5 billion in 2023 versus 2022, reflecting the impact of the TransRe Group acquisition. The expense ratio increased 6.0 percentage points compared to 2022. Underwriting expenses also included pre-tax foreign currency exchange losses of $189 million in 2023 compared to gains of $371 million in 2022.

Current wording

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.

Previous wording

Pre-tax underwriting earnings decreased $131 million in 2024 compared to 2023, which increased $245 million over 2022. Earnings included gains from life contract commutations of $53 million in 2024 and $134 million in 2023. Otherwise, underwriting earnings in 2024 decreased $50 million compared to 2023, reflecting 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.

Current wording

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.

Previous wording

Estimated ultimate claim liabilities for prior years’ contracts increased $196 million in 2024, $1.1 billion in 2023 and $86 million in 2022. The increase in 2023 was derived from higher estimates for asbestos, environmental and other casualty claims, which net of changes in deferred charges, produced a pre-tax loss of $650 million in 2023. The net effects of the increases in ultimate claim liabilities in 2024 and 2022 were relatively insignificant.

Current wording

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.

Previous wording

Pre-tax underwriting losses from periodic payment annuity contracts in each period included the accretion of discounted liabilities, including liabilities for contracts without life contingencies, and foreign currency exchange gains and losses on non-U.S. Dollar denominated contracts. Changes in foreign currency exchange rates were insignificant in 2024 and produced pre-tax losses of $60 million in 2023 and pre-tax gains of $71 million in 2022. Pre-tax underwriting losses before foreign currency effects were $596 million in 2024, $590 million in 2023 and $694 million in 2022. Pre-tax losses included a loss of approximately $130 million in 2022 from the settlement of a terminated reinsurance contract. Periodic payment annuity liabilities were $14.3 billion at December 31, 2024, including liabilities of $4.0 billion for contracts without life contingencies, and excluding the effects of discount rate changes recorded in accumulated other comprehensive income.

Current wording

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.

Previous wording

Our variable annuity guarantee reinsurance contracts produced pre-tax earnings of $157 million in 2024, $233 million in 2023 and $467 million in 2022. 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.

Current wording

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.

Previous wording

Interest and other investment income increased $5.5 billion in 2024 compared to 2023, which increased $4.4 billion compared to 2022. The increase in 2024 was primarily attributable to increases in U.S. Treasury Bill and short-term investment balances. The increase in 2023 over 2022 was due to increased short-term investment balances and higher interest rates, as well as the impact of income earned from Alleghany’s insurance subsidiary assets acquired in October 2022. We continue to believe that maintaining ample liquidity is paramount and we insist on safety over yield with respect to short-term investments.

Current wording

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.

Previous wording

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, recorded in accumulated other comprehensive income, are excluded from float, as such amounts are not included in earnings in the Consolidated Statements of Earnings.

Current wording

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.

Previous wording

Float was approximately $171 billion at December 31, 2024, $169 billion at December 31, 2023 and $164 billion at December 31, 2022. 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 2024 and 2023, and the average cost of float was negative in each year. The cost of float in 2022 was nominal.

Current wording

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.

Previous wording

A summary of cash and investments held in our insurance businesses as of December 31, 2024 and 2023 follows (in millions).

Current wording

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

Previous wording

U.S. government obligations are rated AA+ or Aaa by the major rating agencies. Approximately 94% 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.

Current wording

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.

Previous wording

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 products and coal. A summary of BNSF’s earnings follows (dollars in millions).

Current wording

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).

Previous wording

Operating revenues from consumer products declined 14.7% in 2023 to $7.9 billion compared to 2022, reflecting a volume decrease of 8.4% and lower average revenue per car/unit. The volume decrease was primarily due to lower intermodal shipments resulting from reduced West Coast imports, the loss of an intermodal customer and competition from lower spot rates in the domestic trucking market, which negatively impacted demand. These declines were partially offset by an increase in automotive volume.

Current wording

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.

Previous wording

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%. Pre-tax earnings were $6.6 billion in 2024, a slight increase from 2023. Railroad operating earnings in 2024 increased due to volume growth and lower operating costs from improved productivity, partially offset by a $290 million charge related to a labor agreement that was finalized in the fourth quarter of 2024 and by increased litigation accruals.

Current wording

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.

Previous wording

Operating revenues from industrial products declined 1.2% in 2024 to $5.6 billion from 2023, reflecting slight declines in volume and 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.

Current wording

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.

Previous wording

Operating revenues from agricultural products increased 4.5% to $5.8 billion in 2024 compared to 2023, attributable to a volume increase of 7.4%, partially offset by lower average revenue per car/unit. The volume increase was primarily due to higher grain, renewable fuels and fertilizer shipments.

Current wording

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.

Previous wording

Railroad operating expenses were $15.9 billion in 2024, a decrease of $173 million (1.1%) compared to 2023. The ratio of railroad operating expenses to railroad operating revenues 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 a $290 million charge related to a one-time payment included in the agreement with the SMART-TD labor union that was finalized in December 2024. This agreement allows BNSF the ability to redeploy brakepersons to conductors and engineers, which will allow 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 a judgment in an ongoing legal case with the Swinomish Tribe, which BNSF has appealed.

Current wording

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.

Previous wording

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 (“Cove Point”). 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 independent power projects and investments. Another BHE subsidiary, HomeServices of America, Inc. (“HomeServices”), operates a residential real estate brokerage business and a large network of real estate brokerage franchises in the United States.

Current wording

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.

Previous wording

The rates BHE’s regulated 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).

Current wording

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).