BRK-B 10-K & 10-Q changes, risk factors and insider trading

We rely on technology in virtually all aspects of our business. Like those of many large businesses, certain of our information systems have been subject to cyber threats, including computer viruses, malicious codes, unauthorized access, phishing efforts, denial-of-service attacks and other cyber-attacks. We expect tocontinued be subjectexposure to similarsuch attacks in the future as suchand attacks have become more sophisticated and frequent. A significant disruption or failure of our technology systems could result in service interruptions, safety failures, security events, regulatory compliance failures, an inability to protect information and assets against unauthorized users and other operational difficulties. AttacksCyber-attacks perpetrated against our systems could result in loss of assets and critical information and expose us to remediation costs and reputationalreputation damage.

Cyber-attacks could further adversely affect our ability to operate our facilities, information technology and business systems or could compromise confidential company, customer and employee information. Political, economic, social or financial market instability or damage to or interference with our operating assets, customers or suppliers from cyber-attacks may result in business interruptions, lost revenues, higher commodity prices, disruption in fuel supplies, lower energy consumption, unstable markets, increased security, repairrepairs orand other costs, including penalties and legal proceedings, or may materially adversely affect us in ways that cannot be predicted at this time. Any of these risks could materially affect our consolidated financial results. Furthermore, instability in the financial markets resulting from terrorism, sustained or significant cyber-attacks or war could also have a material adverse effect on our ability to raise capital. We share these risks with all businesses.

We believe risks of adverse effects from geopolitical events are rising, through armed and diplomatic conflicts involving governments in various parts of the world. Government policies and actions taken in the U.S. and elsewhere, including responses of other governments to such actions may adversely affect our operating businesses through reduced sales, increased costs,operating costs or sanctions, restricted supply chains, physical damage to our properties and loss of life of our employees and losses in the values of the securities we own. In addition, international trade policies in the U.S. and elsewhere, including tariffs and other barriers, could negatively impact our operating results. We share these risks with all businesses.

If for any reason the services of our key personnel, particularly Mr. Buffett,personnel were to become unavailable, there could be a material adverse effect on our operations. Should a replacement for Mr. Buffett be needed currently, Berkshire’s Board of Directors has agreed that Mr. Abel should replace Mr. Buffett. The Board continually monitors this risk and could alter its current view regarding a replacement for Mr. Buffett in the future.risk. We believe that the Board’s succession plan,plans, together with the outstanding managers running our numerous and highly diversified operating units, helps to mitigate this risk.

We concentrate a high percentage of the equity security investments of our insurance subsidiaries in a relatively small number of issuers. A significant decline in the fair values of our larger investments in equity securities may produce a material decline in our consolidated shareholders’ equity and our consolidated earnings.

Each of our operating businesses facefaces intense competition within markets in which they operate. While we manage our businesses with the objective of achieving long-term sustainable growth by developing and strengthening competitive advantages, many factors, including technological changes, disruptive innovations and difficulties in enforcing, protecting and defending our intellectual properties, may erode or prevent the strengthening of competitive advantages. Accordingly, our future operating results will depend to some degree on our operating units successfully protecting and enhancing their competitive advantages. If our operating businesses are unsuccessful in these efforts, our periodic operating results in the future may decline.

Our operating businesses are subject to normal economic cycles affecting the general economy or the specific industries in which they operate. Significant deteriorations of economic conditions, including significant inflation over a prolonged periodtime periods could produce a material adverse effect on one or more of our significant operations. In addition, our utilities and energy businesses and our railroad business regularly utilize debt as a component of their capital structures and depend on having access to borrowed funds through the capital markets at reasonable rates. To the extent that access to the capital markets is restricted or the cost of funding increases, these operations could be adversely affected.

Over time, regulatory initiatives have been adopted in the United States and elsewhere for a variety of reasons, including as responses to financial markets crises, global economic recessions, and social and environmental issues. Such initiatives address, for example, the regulation of banks and other major financial institutions, the regulation of products and services and environmental and climate change matters and income tax policy. These initiatives impact alleach of our businesses, albeit in varying ways. Increased regulatory compliance costs could have a significant negative impact on our operating businesses, as well as on the businesses in which we have significant, but not controlling, economic interests. We cannot predict whether such initiatives will have a material adverse impact on our consolidated financial position, results of operations and/or cash flows.

Data privacy and artificial intelligence laws and regulations have recently been enacted or are under development in various jurisdictions in the U.S. and throughout the world. These regulations address numerous aspects related to the security of personal information that is stored in our information systems, networks and facilities.facilities and the use of artificial intelligence tools. Failure to comply with these increased laws and regulations could result in reputationalreputation damage and significant economic penalties.

Climate and weather-related events and the regulation of GHG emissions could impact our businesses to varying degrees. Climate-related events, including hurricanes, floods, wildfires, and other extreme weather events may increase the physical risks and impacts to our operations. An increase in the frequency or intensity of extreme weather events and storms could negatively impact the physical assets of our non-insurance operations and could produce losses affecting our businesses. Similarly, extreme weather events may produce losses affecting our insurance operationsoperations, as their primary business is to monitor, assess and price risk, including climate-related risk, at an expected economic profit to address the risk-transfer needs of their insurance customers.

Additional GHG and climate-related policies, including legislation, may emerge that influence the transition to a lower GHG-emitting economy and could, in turn, influence costs for our businesses to comply with those policies, including BNSF and BHE, which combined represent morethe thanvast 90%majority of Berkshire’s direct emissions. The failure to comply with new or existing regulations or reinterpretation of existing regulations relating to climate change could have a significant adverse effect on our financial results.

When properly paid for the risk assumed, we have been and will continue to be willing to assume more risk from a single event than any other insurer has knowingly assumed. Accordingly, we could incur a significant loss from a single catastrophe event resulting from a natural disaster or man-made catastrophes such as terrorism or cyber-attacks. We employ various disciplined underwriting practices intended to mitigate potential losses, attempt to take into accountconsider all possible correlations and avoid writing groups of policies from which pre-tax losses from a single catastrophe event might aggregate in excess of $15 billion. However, despite our efforts, it is possible that losses could manifest in ways that we do not anticipate and that our risk mitigation strategies are not designed to address. Various provisions of our policies, negotiated to limit our risk, such as limitations or exclusions from coverage, may not be enforceable in the manner we intend, as it is possible that a court or regulatory authority could nullify or void an exclusion or limitation, or legislation could be enacted modifying or barring the use of these exclusions and limitations. Our tolerance for significant insurance losses may result in lower reported earnings in a future period.

As industry practices and legal, social and environmental conditions evolve, unexpected and unintended issues related to claims and coverage may emerge, including new or expanded theories of liability andliability, increased frequency of litigation.litigation driven, in part, by the increasing trend of third-party litigation funding, and other social inflation trends such as juries awarding increasingly larger verdicts. These or other changes could impose new financial obligations on us by extending coverage beyond our underwriting intent and result in increased litigation costs and adverse judicial awards. In some instances, these changes may not become apparent until sometime after we have issued insurance or reinsurance contracts that are affected by the changes. As a result, the full extent of liability under our insurance or reinsurance contracts may not be known for many years after a contract is issued. Our estimated unpaid losses arising under contracts covering property and casualty insurance risks are large ($147.6$151.8 billion at December 31, 20242025), and a small percentage increase to those liabilities can result in a material reduction in reported earnings.

BNSF derives significant amounts of revenuerevenues from the transportation of energy-related commodities, particularlyincluding coal. To the extent that changesChanges in government policies limitthat limit, restrict or restrict the usage ofdisplace coal as a fuel source in generating electricityelectricity, or alternate fuels, such as natural gas,limit or otherwiserestrict displaceother coalcommodities asthat anBNSF energytransports, source,could adversely affect revenues and earnings could be adversely affected.earnings. As a common carrier, BNSF is also required to transport toxic inhalation hazard chemicals and other hazardous materials. AThe release of hazardous materials could expose BNSF to significant claims, losses, penalties and environmental remediation obligations. Changes in the regulation of the rail industry could negatively impact BNSF’s ability to determine prices for rail services and to make capital improvements to its rail network, resulting in an adverse effect on our results of operations, financial condition and/or liquidity.

Our railroad businessBNSF requires significant ongoing capital investment to improve and maintain its railroad network so that transportation services can be safely and reliably provided to customers on a timely basis. Our utilities and energy businessesBHE also requirerequires significant amounts of capital to construct, operate and maintain generation, transmission and distribution systems to meet their customers’ needs and reliability criteria. System assets may need to be operational for long periods of time to justify the financial investment. The operational or financial failure of capital projects may not be recoverable through rates that are charged to customers. Further, a significant portion of costs of capital improvements may be funded through debtdebt. issuedRestricted byaccess BNSF and BHE and their subsidiaries. Disruptions into debt capital markets thatby restrictBNSF accessor to funding when neededBHE could adversely affect the results of operations, liquidity and/or capital resources of these businesses.

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).

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

After-tax earnings of BNSF increased 8.8% in 2025 and declined 1.1% in 20242024, compared to 2023the 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 14.4%a inlower 2023effective comparedincome totax 2022.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 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.accruals.

After-tax earnings of ourBHE utilitiesincreased $249 million (6.7%) in 2025 compared to 2024 and energy business increased $1.4 billion in 2024 compared to 2023 and declined $1.6 billion in 2023 compared to 2022.2023. The earnings increase in 20242025 reflected lower estimated wildfire loss accruals at PacifiCorpPacifiCorp, reduced earnings attributable to noncontrolling interests and higherthe impact of real estate brokerage business litigation accruals in 2024, partially offset by lower earnings from the natural gas pipelines,pipelines and other energy businesses. The increase in 2024 was primarily due to reductionslower inwildfire loss accruals and lower earnings attributable to noncontrolling interests, andpartially otheroffset energy businesses. The earnings decline in 2023 reflected increased estimated wildfire loss accruals, as well as lower earnings from other energy andby real estate brokerage businessesbusiness comparedlitigation to 2022.accruals.

Investment gains (losses) predominantly derive from our investments in equity securities andcan 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,prices and exchange rates, are generally meaningless in understanding our reported periodic results or evaluating theour periodic economic performance of our operating businesses.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.

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. SignificantWe eventsincurred significant losses from the Southern California wildfires in 2025, Hurricanes Helene and Milton in 2024 includedand Hurricanes Miltonstorms and Helene, while significant events in 2023 included a cyclone and/or floods in New Zealand and a hailstormItaly 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.2023. Changes in estimates for unpaid losses and loss adjustment expenses,expenses (“LAE”), including amounts established for occurrences in prior years, and foreign currency transaction gains and losses arising from the changes in the valuationremeasurement of non-U.S.non-functional Dollarcurrency 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 isconcepts anare important considerationconsiderations in establishing premiums for these policies, which we normally receivereceived at the contract inception date.of Claimthese andpolicies. benefitWhile paymentsno cannew extendretroactive forreinsurance decadesor andperiodic arepayment expectedannuity contracts have been written in recent years, we will continue to exceedrecord premiums,charges producingto underwritingearnings lossesrelated to the run-off of pre-existing contracts over the remaining 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.periods.

Premiums written increased $730$2.3 millionbillion (1.9%5.3%) in 20232025 compared to 2022,2024, reflectingprimarily higher average premiums per auto policy (16.8%) dueattributable to ratean increases, partially offset by a 9.8% decreaseincrease in policies-in-force.policies-in-force over the past year. Premiums earned in 2025 increased $280$2.2 millionbillion (0.7%5.3%) in 2023 compared to 2022. Reductions in advertising expenditures in 2022 and 2023 contributed to reductions of policies-in-force.2024.

Underwriting expenses decreasedincreased $752 million (16.5%)34.2% in 20232025 compared to 2022.2024. TheGEICO’s expense ratio in(underwriting 2023expense to premiums earned) was 9.7%,12.4% ain decrease2025, an increase of 2.02.7 percentage points compared to 2022,2024. attributableThe toincreases reducedwere driven by higher advertising expenses and improvedother policy acquisition expenses. The earnings from GEICO’s insurance agency (third-party commissions, net of operating leverage.expenses) are included as a reduction of underwriting expenses.

BH Primary consists of severalnumerous independentlyseparately 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 for small, medium and large clients.coverages. BH Primary’s insurers include Berkshire Hathaway Specialty Insurance Group (“BHSI”), RSUI Group Inc. andRSUI, CapSpecialty, Inc. (“RSUI and CapSpecialty,” acquired in October 2022), Berkshire Hathaway Homestate companiesGroup (“BHHC”), MedPro Group,MedPro, GUARD Insurance group of companiesCompanies (“GUARD”), NationalNICO IndemnityPrimary CompanyGroup (“NICO Primary”), Berkshire Hathaway Direct (“BH Direct”) and U.S. Liability Insurance companies (“USLI”).

Underwriting expenses increased $681$197 million (15.0%3.8%) andin the2025 compared to 2024. The expense ratio increased 1.31.1 percentage points to 27.8% in 20242025 compared to 2023. The increase in the expense ratio was2024, primarily attributabledue to BH Specialty from changes in business mix and GUARD due to increased expenses and lower premiums earned.changes.

Underwriting expenses increased $1.1$681 billionmillion (30.8%15.0%) and the expense ratio increased 1.3 percentage points to 27.8% in 20232024 compared to 2022.2023. The increase in the expense ratio was primarily attributable to theBHSI increases in premiums earned andfrom changes in business mix,mix includingand GUARD due to increased expenses and the full year effects in 2023impact of thelower acquisitionpremium of RSUI and CapSpecialty.volumes.

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

Losses and lossLAE adjustmentdeclined expenses decreased $420$555 million (3.3%4.5%) andin the2025 compared to 2024. The loss ratio decreasedincreased 2.62.1 percentage points in 20242025 compared to 2023.2024. Losses incurred from significant catastrophe events were approximately $765 million in 2025 and $800 million in 20242024. Additionally, losses and $900 millionLAE in 2023. Estimated ultimate liabilities for losses occurring in prior accident years2025 were reduced $1.1 billion compared to $1.7 billion in 2024 andfrom $1.4reductions billionof inestimated 2023,ultimate claim liabilities for prior accident years’ claims. The reductions were 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. InUnderwriting 2024, NICO recorded a pre-tax chargeexpenses in underwriting2024 expensesincluded ofthe $490 million charge in connection with athe previously discussed 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.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.

Our periodic operating results may be affected in future periods by the impacts of ongoing macroeconomic and geopolitical conflicts and events, including wars, 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 results.earnings.

InsuranceAfter-tax earnings from insurance underwriting generateddeclined after-tax13.1% earningsin the second quarter and increased 3.6% in the first quartersix months of $1.7 billion in 2026 andcompared $1.3 billion into 2025. We experienced no significant catastrophe events in the first quartersix months of 2026, while after-tax losses from significant events were $860$850 million in the first quartersix months of 2025. BeforeOtherwise, theGEICO impact of significant catastrophe losses,produced lower underwriting earnings were generated by GEICO andin the reinsurancefirst business,six months of 2026 compared to 2025, which were partially offset by increased earnings from reinsurance and other primary insurance business. After-tax earnings from insurance investment income declined $308 million (9.1%) in the second quarter and $522 million (8.3%) in the first quartersix declinedmonths $214 million (7.4%) inof 2026 versus the same periods in 2025, primarily attributable to lower interest income, reflecting lower interest rates.

After-tax earnings of BNSF increased 13.4%6.3% in the second quarter and 9.5% in the first quartersix months of 2026 compared to 2025,2025. Earnings in 2026 benefited from higher shipping volumes and improved operating efficiencies, partly offset by increases in fuel costs and the impact of higher effective income tax rates, primarily attributable to higherthe revenuesimpacts andof improvedreductions operatingin efficiencies.enacted rates in certain states in the second quarter of 2025. After-tax earnings of BHE increased 26.9% in the second quarter and 11.5% in the first quartersix months of 2026 increased 1.5% compared to 2025, which reflected higher earnings from the U.S. utilities and natural gas pipelines businessesbusinesses, andpartially federaloffset income tax credits recognized on a consolidated basis andby lower earnings from the U.S. utilities and other energy businesses.

EarningsAfter-tax earnings from our manufacturing, service and retailing businesses increased 4.5%24.1% in the second quarter and 15.1% in the first quartersix months of 2026 compared to 2025. ResultsThe among our numerous operations in 2026increases were mixed,driven with overallby earnings increases in our industrial products manufacturing and serviceour businesses and lower earnings from the retailingservices businesses.

Investment gains (losses) canregularly 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 causedcaused, and will continue to causecause, significant volatility in our periodic earnings.

After-tax other earnings increased $1.2 billion in the second quarter and $2.5 billion in the first quartersix includemonths investmentof income2026 not allocatedcompared to operating2025. businesses,The earningsincreases fromwere equityprimarily methodattributable investmentsto andthe impact of foreign currency exchange rate gains and losses related toon Berkshire and BHFC non-U.S. Dollar denominated debt.borrowings. After-tax other earnings in the first quarter of 2026 increased $1.2 billion compared to 2025, reflectingThe after-tax foreign currency exchange rate gains ofwere $249$326 million in the second quarter and $575 million in the first six months of 2026 compared to losses of $713$877 million in 2025the second quarter and increased$1.6 investmentbillion income.in the first six months of 2025.

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. We continue to instruct our underwriting managers to decline writing insurance business when the premiums are deemed inadequate to the risks underwritten, without regard to the impact on premium volume. Time-value-of-money concepts are important considerations in establishing premiums received at the inception of our retroactive reinsurance and periodic payment annuity contracts. 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.

GEICO writes property and casualty insurance policies, primarily private passenger auto insurance, in all 50 states and the District of Columbia. Additionally, GEICO writes insurance policies for certain commercial auto risks, which currently represents less than 5% of premiums written. GEICO offers its policies mainly by direct response methods where most customers apply for insurance coverage directly to the company, and, to a lesser extent, through insurance agencies. GEICO also operates an insurance agency that offers insurance policies written by third parties,parties for individuals desiring coverages that are generally not offered by GEICO, such as homeowners, renters, condominium, life and identity protection insurance. A summary of GEICO’s underwriting results follows (dollars in millions).

Premiums written increased $168$121 million (1.5%1.1%) in the second quarter and $289 million (1.3%) in the first quartersix months of 2026 compared to $11.7 billion,2025, reflecting an increase in commercial auto business, partially offset by lower average premiums per policy for private passenger auto insurance. Premiums earned increased $434$227 million (4.0%2.1%) in the second quarter and $661 million (3.0%) in the first quartersix months of 2026 compared to 2025.

Losses and loss adjustment expensesLAE increased $853$699 million (11.5%8.8%) in the second quarter and $1.6 billion (10.1%) in the first quartersix months of 2026 compared to 2025. GEICO’s loss ratio (losses and loss adjustment expensesLAE to premiums earned) was 73.9%76.6% in the second quarter and 75.3% in the first quartersix months of 2026, an increaseincreases of 4.8 percentage points and 4.9 percentage pointspoints, respectively, compared to 2025. The loss ratio increaseincreases reflected the impact of higher claims frequencies and average severities.

Private passenger auto claims frequencies increased in the first quartersix months of 2026 for bodily injury coverage (five to seven percent range) and property damage and collision coverages (twothree to fourfive percent range) compared to 2025. Private passenger auto average claims severities in the first quartersix months of 2026 increased for bodily injury coverages (12ten to 14twelve percent range) and for property damage and collision coverages (twozero to fourthree percent range) compared to 2025. ChangesThe change in reductions in ultimate loss estimates for prior accident years’ claims in the first quartersix months of 2026 andcompared to 2025 werewas relatively insignificant.

Underwriting expenses increased $338$355 million (29.3%27.3%) in the second quarter and $693 million (28.3%) in the first quartersix months of 2026 compared to 2025. The expense ratio (underwriting expense to premiums earned) was 13.4%14.0% in the first quartersix months of 2026, an increase of 2.62.7 percentage points compared to 2025. These increases were primarily driven by increasedincreases policyin acquisition-relatedcommissions and advertising expenses. The earnings from GEICO’s insurance agency (third-party commissions, net of operating expenses) are included as a reduction of underwriting expenses.

Losses and LAE declined $660$182 million (19.1%5.7%) in the second quarter and $842 million (12.7%) in the first quartersix months of 2026 comparedrelative to the2025. same period in 2025, and theThe loss ratio declined 14.63.9 percentage points in the second quarter and 9.2 percentage points in the first six months compared to 2025. There were no lossesLosses incurred from significant catastrophe event occurrences in the first quartersix months of 20262025 compared towere approximately $300 million versus none in 2025.2026. ChangesThe losses in 2025 were from wildfires in Southern California, which occurred in the first quarter. We reduced ultimate loss estimates for prior accident years’ ultimate loss estimates reduced incurred lossesclaims by $176$268 million in the second quarter and $444 million in the first quartersix months of 20262026. We increased ultimate loss estimates for prior accident years’ claims by $189 million in the second quarter and increased incurred losses by $212$401 million in the first quartersix months of 2025. UnderwritingThe expenses increased $54 million (4.3%)reductions in the first quarter of 2026 comparedwere primarily attributable to 2025.lower-than-expected Underwritingproperty expenseslosses and, to a lesser extent, casualty losses. The increases in the2025 firstwere quarterprimarily ofdue 2026to increasedincreases atin nearlyestimated alllosses offor thecasualty businessexposures, unitspartially versusoffset 2025.by reductions in property loss estimates.

Losses and LAE declineddecreased $715$312 million (19.9%11.3%) in the second quarter and $1.0 billion (16.2%) in the first quartersix months of 2026 compared to 2025,2025. and theThe loss ratio in 2026 declined 10.05.3 percentage points in the second quarter and 7.8 percentage points in the first six months compared to 2025. There were no losses incurred from significant catastrophe event occurrences in the first quartersix months of 2026 compared to $770$760 million in 2025.2025 from estimated wildfire losses, which occurred in the first quarter. Additionally, changes in prior accident years’ ultimate loss estimates reduced losses and LAE by $609 million in the second quarter and $869 million in the first quartersix reducedmonths incurredof losses2026 bycompared $260to $176 million in 2026 and $330$506 millionmillion, respectively, in 2025.the corresponding 2025 periods. The reductions in each period were mostly attributable to lower-than-expected property losses.

Premiums earned increased $136 million (10.1%) in the second quarter and $212 million (8.2%) in the first quartersix increasedmonths $76 million (6.1%) inof 2026 compared to 2025, primarily due to favorable foreign currency translation effects and increased premiums in France,the Asia,U.S., primarily from U.S. life and theMedicare U.K,supplement partially offset by lower premiums in Australia.business. Pre-tax underwriting earnings were substantially unchanged in the second quarter and increased $55 million in the first quartersix months of 2026 increased $56 million compared to the2025. sameThe periodyear-to-date increase in 2025, reflecting higher earnings inwas bothprimarily theattributable U.S.to andlower internationally,mortality, partly offset by increased foreign currency exchange losses.

Pre-tax underwriting losses, before foreign currency exchange gains and losses, were $251$427 million in the first quartersix months of 2026 versus $169$349 million in 2025. Losses reflected changes in estimated ultimate liabilities and related deferred charges during each period. There were no significant changes in the estimated ultimate liabilities during the first six months of 2026 and 2025. Foreign currency exchange gains and losses derive from the remeasurement of liabilities of non-functional currency denominated contracts of U.S. subsidiaries. Pre-tax foreign currency exchange gains and losses were $5insignificant in 2026, while in 2025, foreign currency exchange losses were $88 million in the second quarter and $128 million in the first quartersix of 2026 compared to losses of $40 million in 2025.months.

Unpaid losses and LAE for retroactive reinsurance contracts were $30.4$30.0 billion at MarchJune 31,30, 2026, a decline of $680$1.1 millionbillion from December 31, 2025, primarily due primarily to loss payments. Deferred charge assets on retroactive reinsurance were $7.9$7.7 billion and $8.1 billion at MarchJune 31,30, 2026 and December 31, 2025, respectively. Deferred charge balances will be charged to earnings over the expected remaining claims settlement periods.

Pre-tax underwriting losses, before foreign currency exchange gains and losses,impacts, were $152 million in the second quarter and $304 million in the first quartersix months of 2026 versus $150$126 million in 2025the second quarter and $276 million in the first six months of 2025. These losses derived primarily from the accretion of discounted annuity liabilities. Pre-tax foreign currency exchange rate gains on non-functional currency denominated contracts of U.S. subsidiaries were $16$4 million in the second quarter and $20 million in the first quartersix months of 2026 compared to losses of $49$87 million in the second quarter and $136 million in the first six months of 2025. Annuity liabilities were $14.1$14.3 billion at MarchJune 31,30, 2026, includingwhich includes the effects of discount rate changes recorded in accumulated other comprehensive income, as well as liabilities of $4.0 billion on contracts without life contingencies.

Pre-tax investment income in the firstsecond quarter and first six months of 2026 declined 7.2%7.9% inand 20267.6%, respectively, compared to 2025, primarily attributable to lower interest income, reflecting lower short-term interest rates. Dividend income varies from period to period due to changes in the investment portfolio and the amount, frequency and timing of dividends from investees. We continue to believe that maintaining ample liquidity is paramount and insist on safety over yield with respect to short-term investments.

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,LAE, 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 underon 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 $176.9$177.5 billion at MarchJune 31,30, 2026, an increase of approximately $500$1.1 millionbillion from December 31, 2025. 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 earnings in the first quartersix months of 2026 and 2025, and the average cost of float was negative in each period.

* Includes unsettled purchases of U.S. Treasury Bills of $11.3$771 billionmillion at MarchJune 30, 2026 and $167 million at December 31, 2026.2025. Such amounts were also included in liabilities,liabilities whichand were paid shortly after Marchthe 31.respective balance sheet date.

Fixed maturity investments as of MarchJune 31,30, 2026 follows (in millions).

Railroad operating revenues increased 5.0%in the second quarter and the first six months of 2026 by 14.6% and 9.8%, respectively, compared to 2025. Car/unit volume increased 6.5% and 4.3%, respectively, in the second quarter and the first quartersix months of 2026 comparedrelative to 2025,the reflectingsame increasesperiods in car/unit2025. volume of 2.2% and averageAverage revenue per car/unit increased 7.6% in the second quarter and 5.3% in the first six months of 2.8%2026, resultingprimarily from business mix, core pricing gains and higher fuel surcharge revenue fromand higher fuel prices.yield. Pre-tax earnings increased 13.5%13.9% in the second quarter and 13.7% in the first quartersix months of 2026 compared toversus 2025.

Operating revenues from agriculturalAgricultural and energy products operating revenues were $1.8$1.9 billion in the second quarter and $3.7 billion in the first quartersix months of 2026, an increaseincreases of 14.8%17.9% comparedand to16.4%, 2025,respectively, from 2025. The revenue increases in 2026 were attributable to increased volume of 11.6% andhigher average revenue per car/unit.unit, arising from higher fuel surcharge revenue, higher yield and volume increases of 11.5% in both the second quarter and first six months relative to 2025. The volume increaseincreases waswere primarily due to higher demandgrain for grains,exports, petroleum fuels and oilseeds and meals.

OperatingCoal operating revenues from industrial products were $1.2$722 million in the second quarter and $1.5 billion in the first quartersix months of 2026, anslight increase of 2.3%increases from 2025.the Revenuessame periods in the2025. firstThe quarterrevenue ofincreases 2026were reflectedattributable to higher average revenue per car/unit,unit from higher fuel surcharge revenue and higher yield, partially offset by lower volume (0.6%).volumes. The volume declinedeclines waswere primarily due to lowerplant shipments of plasticsretirements and buildinglower products,demand, dueattributable to continuedlower softnessnatural ingas the housing market.prices.

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 decreasedincreased $69$163 million (37.6%) in the second quarter and $94 million (10.9%) in the first quartersix months of 2026 compared to 2025, reflecting comparative increases in energyelectric operatingutility expensesmargin and interestother expenseincome andcombined lowerwith higher income tax benefits from recognized production tax credits, partially offset by increases in electricinterest utility marginexpense and otherenergy income.operating expenses.

The U.S. utilities’ electric utility margin was $2.0$2.3 billion in the second quarter and $4.3 billion in the first quartersix months of 2026, an increaseincreases of $47$171 million (2.4%8.1%) and $218 million (5.4%), respectively, compared to 2025. The second quarter increase reflected higher retail customer volumes and lower thermal generation and purchased electricity cost of sales. The first six months increase reflected higher retail customer rates in certain territories, lower thermal generation cost of salessales, higher retail customer volumes and higher wholesale volumes and prices, partially offset by higher purchased electricity cost of sales. Retail customer volumes increased 1.7%3.1% overall (up 4.4%6.0% at MEC andMEC, 4.3% at NV Energy and down 1.2%0.8% at PacifiCorp) in the first quartersix months of 2026 compared to 2025, primarily due to higher customer usage and an increase in the average number of customers and higher customer usage,customers, partially offset by an overall unfavorable impact of weather. The increase in energy operating expenses was primarily due to vegetation management and other wildfire prevention costs, as well as general and plant maintenance costs, insurance expenses and technology costs.

Net earnings of natural gas pipelines increased $118$59 million in the second quarter and $177 million in the first quartersix months of 2026 compared to 2025. The increaseincreases reflected higher transportation and storage revenues from a general rate case and higher variable liquefied natural gas revenues from coldcolder weatherweather, mainly in the first quarter of 2026.

Net earnings of other energy businesses decreased $92$12 million in the second quarter and $104 million in the first quartersix months of 2026 compared to 2025. The decreasedecreases waswere primarily due to lower earnings at Northern Powergrid from lower distribution revenues due to lower tariffs from inflation adjustments beginning in the second quarter of 2025 and higher interest expense.

Net lossesearnings of real estate brokerage businesses decreased by$25 $3million in the second quarter and $22 million in the first quartersix months of 2026 compared to 2025.2025, primarily due to charges in the second quarter of 2026 associated with a settlement reached in the ongoing real estate industry litigation matters. 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, including tax credits recognized on a consolidated basis.

* Excludes certain acquisition accounting expenses, which primarily relaterelated to the amortization of intangible assets recorded in connection with certain of our business acquisitions. The after-tax acquisition accounting expenses excluded from earnings were $114$113 million in the second quarter and $227 million in the first quartersix months of 2026 and $124 million in the second quarter and $248 million in the first quartersix months of 2025. These expenses are included in “Other” in the summary of earnings on page 2933 and in the “Other” earnings table on page 43.47.

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, currentlybusinesses aggregated ininto twelve 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 produces basic chemicals and its results are included in Berkshire’s consolidated results beginning as of the acquisition date.

Revenues of the industrial products group were $11.2$12.2 billion in the second quarter and $23.3 billion in the first quartersix months of 2026, an increaseincreases of $2.1$2.6 billion (23.6%27.3%) overand $4.7 billion (25.5%), respectively, compared to the same periods in 2025, primarily attributable to business acquisitions,acquisitions as well asand increases at several of our pre-existing businesses.business units. Pre-tax earnings increased $749 million (41.0%) in the second quarter and $1.1 billion (32.2%) in the first quartersix months of 2026 increased $350 million (22.1%) compared to 2025. Pre-tax earnings as a percentage of revenues for the group were 17.2%19.3% for the first quartersix months of 2026, aan decreaseincrease of 0.31.0 percentage points compared to 2025.

PCC’s revenues were $2.9$3.1 billion in the second quarter and $6.0 billion in the first quartersix months of 2026, an increaseincreases of 8.2%14.4% in the second quarter and 11.4% in the first six months compared to 2025. RevenuesThe fromincreases were driven by increased sales of aerospace and industrial gas turbine power products in the first quarter of 2026 increased 9.4% and 18.9%, respectively, over 2025,products, primarily attributable to strong customer demand and higher prices, due in part to rising costs of certain raw materials. Revenues from other products in the first quarter of 2026 declined 7.5% compared to 2025. PCC’s pre-tax earnings increased 32.9%34.2% in the second quarter and 33.6% in the first quartersix months of 2026 comparedrelative to 2025, which included costs and expenses associated with a fire at a fasteners facility in the first quarter of 2025. Additionally, theThe earnings increaseincreases in 2026 reflected aerospace and industrial gas turbine sales growth, improved manufacturing and operating efficiencies and favorable changes in business mix. Earnings in 2025 and 2026 were impacted by a fire at a fasteners facility that occurred in the first quarter of 2025. Future sales and earnings growth will depend on successfully increasing production and expanding capacity, as necessary, to meet customer demand.

Lubrizol’s revenues were $1.6$1.8 billion in the second quarter and $3.4 billion in the first quartersix months of 2026, an increaseincreases of 2.7%11.1% and 7.0%, respectively, compared to 2025. The increaseincreases waswere primarily attributable to higher volumes and selling prices and favorable foreign currency translation effects, partially offset by lower selling prices and unfavorable product mix. Lubrizol’s pre-tax earnings increased 8.1% in the first quarter of 2026 compared to 2025. The increase reflected the effects of increased sales volumes in 2026 and the non-recurrence of restructuring charges incurred in 2025, partially offset by lower selling prices, higher manufacturing costs and unfavorable product mix. The increases in selling prices were necessitated by significant increases in raw material,materials, energy and supply chain costs duringthat began in the latter part of the first quarter and continued through the second quarter of 20262026, areresulting expectedin to increaseincreased production costscosts. Lubrizol’s pre-tax earnings increased 23.4% in the second quarter and will16.5% necessitatein the first six months of 2026 compared to 2025. The increases were primarily attributable to the impacts of higher sales volumes and selling priceprices, increases.partially offset by higher raw materials and manufacturing costs and unfavorable product mix.

Marmon’s revenues were $3.3$3.5 billion in the second quarter and $6.9 billion in the first quartersix months of 2026, an increaseincreases of 6.0%4.9% and 5.4%, respectively, compared to the firstsame quarterperiods ofin 2025,2025. whichThe wasincreases were primarily attributable to the transition of Acme Brick from our building products group to Marmon beginning January 1, 2026. Otherwise, revenues were up marginally in each period. In the first six months of 2026, revenue increases in 2026 were generatedproduced by the Plumbing & Refrigeration (18.3%19.2%) and Electrical (10.4%11.9%) groups, primarily attributable to higher metals prices,prices and fromincreased volumes in the TransportationPlumbing Products& groupRefrigeration (4.4%).group. These increases were partiallysubstantially offset by lower revenues from the Retail Solutions (9.8%18.3%), Rail & Leasing (8.9%7.9%), Foodservice Technologies (4.7%) and Industrial Products (2.5%4.6%) groupsand Water Technologies (3.3%) groups, primarily due to a combinationcombinations of lower sales volumes and the impacts of sales mix changes and business divestitures, partially offset by favorable foreign currency translation effects.divestitures.

OxyChem’s revenues were $1.2$1.4 billion in the second quarter and $2.6 billion in the first quartersix months of 2026. OxyChem generated a small pre-tax lossearnings of $149 million in the second quarter and $121 million in the first quartersix months of 2026, reflectingwhich included the impacts of incremental acquisition accounting depreciation and amortization, as well as increasedother planttransition maintenance,costs utilitiesassociated andwith propertythe taxacquisition. expensesIn andaddition, materials costs. Revenuesrevenues and earnings increases were also generated in the first quartersix months of 2026 by each of the other smaller businesses within the industrial products group.businesses.