1977 : However, insurance operations, led again by the truly outstanding results of Phil Liesches managerial group at National Indemnity Company, were even better than our optimistic expectations. After all, even a totally dormant savings account will produce steadily rising interest earnings each year because of compounding. In a sense, this is the opposite case from our textile business where even very good management probably can average only modest results. Just as it would be foolish to focus unduly on short-term prospects when acquiring an entire company, we think it equally unsound to become mesmerized by prospective near term earnings or recent trends in earnings when purchasing small pieces of a company; i.e., marketable common stocks. When prices are appropriate, we are willing to take very large positions in selected companies, not with any intention of taking control and not foreseeing sell-out or merger, but with the expectation that excellent business results by corporations will translate over the long term into correspondingly excellent market value and dividend results for owners, minority as well as majority.

1978 : Because of such gains, Berkshires long-term growth in equity per share has been greater than would be indicated by compounding the returns from operating earnings that we have reported annually. The insurance cycle has turned downward in 1979, and it is almost certain that operating earnings measured by return on equity will fall this year. But despite this bargain cost of fixed assets, capital turnover is relatively low reflecting required high investment levels in receivables and inventory compared to sales. Its results are combined in this report with those of Phil Liesches operation under the insurance category entitled Specialized Auto and General Liability. And there is no way to start a new operation - with necessarily uncertain prospects - at less than 100 cents on the dollar.

1979 : Our forecast for 1980 is similar in one respect; again we feel that the industrys performance will worsen by at least another few points. Our reinsurance division, led by George Young, continues to give us reasonably satisfactory overall results after allowing for investment income, but underwriting performance remains unsatisfactory. How, say many of the insurance managers, can we be expected to look forward twelve months and estimate such imponderables as hospital costs, auto parts prices, etc.? For the last few years our insurance companies have not been a net purchaser of any straight long-term bonds (those without conversion rights or other attributes offering profit possibilities). (Naturally, those views are much clearer and definite in retrospect; it would be fair for you to ask why we werent writing about this subject last year.)

1980 : In the sixteen years since present management assumed responsibility for Berkshire, book value per share with insurance-held equities valued at market has increased from $19.46 to $400.80, or 20.5% compounded annually. From this table, you can see that our sources of underlying earning power are distributed far differently among industries than would superficially seem the case. GEICO was designed to be the low-cost operation in an enormous marketplace (auto insurance) populated largely by companies whose marketing structures restricted adaptation. Some of the largest and best known propertycasualty companies currently find themselves with nominal, or even negative, net worth when bond holdings are valued at market. At New Bedford we have reduced the number of looms operated by about one-third, abandoning some high-volume lines in which product differentiation was insignificant.

1981 : Currently, we find values most easily obtained through the open-market purchase of fractional positions in companies with excellent business franchises and competent, honest managements. We expect that undistributed earnings from such companies will produce full value (subject to tax when realized) for Berkshire and its shareholders. Conversely, low returns on corporate equity would suggest a very high dividend payout so that owners could direct capital toward more attractive areas. (Most underwriters expect incurred losses in aggregate to rise at least 10% annually; each, of course, counts on getting less than his share.) Our managers, particularly Phil Liesche, Bill Lyons, Roland Miller, Floyd Taylor and Milt Thornton, have done a magnificent job of swimming against the tide.

1982 : Industry statistics indicate some deterioration in loss reserving practices during 1982 and the true combined ratio is likely to be modestly worse than indicated by our table. We disagree because of a pronounced change in the competitive environment, hard to see for many years but now quite visible. These may be escaped, true, if prices or costs are administered in some manner and thereby insulated at least partially from normal market forces. The five people who work here with me - Joan Atherton, Mike Goldberg, Gladys Kaiser, Verne McKenzie and Bill Scott - outproduce corporate groups many times their number. If we can continue to attract managers with the qualities of Ben and Phil, you need not worry about Berkshires future.

1983 : o Our preference would be to reach this goal by directly owning a diversified group of businesses that generate cash and consistently earn above-average returns on capital. Thus it is perfectly appropriate, from both an accounting and economic standpoint, to include the redemption proceeds in our reported earnings. (But note rationally related, not identical: if well-regarded companies are generally selling in the market at large discounts from value, Berkshire might well be priced similarly.) Under our assumption investors, in aggregate, every year forfeit all earnings from this staggering sum of capital merely to satisfy their penchant for financial flip-flopping. When these create Goodwill, it must be amortized over not more than 40 years through charges of equal amount in every year to the earnings account.

1984 : Charlie Munger, my partner in general management, and I do not have any such ideas at present, but our experience has been that they pop up occasionally. Companies that would be out of business if they realistically appraised their loss costs have, in some cases, simply preferred to take an extraordinarily optimistic view about these yet-to-be-paid sums. In addition, there have been a multitude of problems related directly to Projects 1, 2, and 3 that could weaken or destroy an otherwise strong credit position arising from guarantees by Bonneville Power Administration. Their capital positions are not strong enough to withstand a big error, no matter how attractive an investment opportunity might appear when analyzed on the basis of probabilities. An analysis similar to that made by our hypothetical bondholder is appropriate for owners in thinking about whether a companys unrestricted earnings should be retained or paid out.

1985 : Ben Graham told a story 40 years ago that illustrates why investment professionals behave as they do: An oil prospector, moving to his heavenly reward, was met by St. Peter with bad news. When managers are faced with offers for their companies, they unfailingly point out how unrealistic market prices can be as an index of real value. Insurance managers can write whatever amount of business they feel comfortable writing, subject only to pressures applied by regulators and Bests, the industrys authoritative rating service. (This result was not necessarily by intent: issuing companies generally knew no more than reinsurers did about the ultimate costs that would be experienced at higher layers of risk.) (No matter how great the talent or effort, some things just take time: you cant produce a baby in one month by getting nine women pregnant.)

1986 : On the other hand, working with people who cause your stomach to churn seems much like marrying for money - probably a bad idea under any circumstances, but absolute madness if you are already rich. In any event, you should know that our expectations for both the stocks and bonds we now hold are exceptionally modest, given current market levels. I say this knowing that over the years there has been a lot of fuzzy and often partisan commentary about who really pays corporate taxes - businesses or their customers. My best guess is that these changes alone will eventually reduce the earning power of our insurance operation by at least 10% from what we could previously have expected. Finishing up the questions may take quite a while - we had about 65 last year so you should feel free to leave once your own have been answered.

1987 : To understand why, first take a look at page 7, where we show the earnings (on an historical-cost accounting basis) of our seven largest nonfinancial units: Buffalo News, Fechheimer, Kirby, Nebraska Furniture Mart, Scott Fetzer Manufacturing Group, See's Candies, and World Book. (If, to become a shareholder and part owner of Commerce Clearing House, you pay, say, six times book value, that does not change CCH's return on equity.) Second, because so little capital is required to run these businesses, they can grow while concurrently making almost all of their earnings available for deployment in new opportunities. o Chuck Huggins continues to set new records at See's, just as he has ever since we put him in charge on the day of our purchase some 16 years ago. But it should be emphasized that a really bad experience or two - such as many arbitrage operations suffered in late 1987 - could change the figures dramatically.

1988 : After all, any manager of a subsidiary company would find himself in hot water if he reported barebones GAAP numbers that omitted key information needed by his boss, the parent corporations CEO. Other fundamentals at both businesses are: (1) single store operations featuring huge inventories that provide customers with an enormous selection across all price ranges, (2) daily attention to detail by top management, (3) rapid turnover, (4) shrewd buying, and (5) incredibly low expenses. If premium growth meanwhile materially lags that 10% rate, underwriting losses will mount, though the industrys tendency to underreserve when business turns bad may obscure their size for a time. Our insurance volume over the next few years is likely to run very low, since business with a reasonable potential for profit will almost certainly be scarce. At such times, arbitrage sometimes promises much greater returns than Treasury Bills and, equally important, cools any temptation we may have to relax our standards for longterm investments.

1989 : This divine assemblage - Borsheim's, The Buffalo News, Fechheimer Bros., Kirby, Nebraska Furniture Mart, Scott Fetzer Manufacturing Group, See's Candies, World Book - is a collection of businesses with economic characteristics that range from good to superb. If premium growth meanwhile materially lags that 10% rate, underwriting losses will mount, though the industry's tendency to underreserve when business turns bad may obscure their size for a time. During this period, however, I carefully avoided buying even a single share, instead allocating major portions of my net worth to street railway companies, windmill manufacturers, anthracite producers, textile businesses, trading-stamp issuers, and the like. Such high-rate reborrowing schemes, which a few years ago were appropriately confined to the waterfront, soon became models of modern finance at virtually all major investment banking houses. As I noted before, this policy of itself will not ensure success: A secondclass textile or department-store company won't prosper simply because its managers are men that you would be pleased to see your daughter marry.

1990 : Alas, excesses similar to those he then lampooned have many times since found their way into the financial statements of major American corporations and been duly certified by big-name auditors. If premium growth meanwhile materially lags that 10% rate, underwriting losses will mount, though the industry's tendency to under-reserve when business turns bad may obscure their size for a time. Results will improve only when most insurance managements become so fearful that they run from business, even though it can be done at much higher prices than now exist. This loss/float ratio, like any statistic used in evaluating insurance results, is meaningless over short time periods: Quarterly underwriting figures and even annual ones are too heavily based on estimates to be much good. (Woody Allen, in another context, pointed out the advantage of open-mindedness: "I can't understand why more people aren't bi-sexual because it doubles your chances for a date on Saturday night.")

1991 : If our growth in book value is to keep up with a 15% pace, we must earn $22 billion during the next decade. Indeed, since present management took over in 1965, our look-through earnings have grown at almost the identical 23% rate of gain recorded for book value. The wide range of styles and sizes that producers offer causes inventories to be heavy; substantial capital is also tied up in receivables. Guinness, however, earns its money in much the same fashion as Coca-Cola and Gillette, U.S based companies that garner most of their profits from international operations. In this mea culpa, I am not talking about missing out on some company that depends upon an esoteric invention (such as Xerox), high-technology (Apple), or even brilliant merchandising (Wal-Mart).

1992 : The purchase was 82% of Central States Indemnity, an insurer that makes monthly payments for credit-card holders who are unable themselves to pay because they have become disabled or unemployed. Beyond purchases made by the parent company, however, our subsidiaries sometimes make small "add-on" acquisitions that extend their product lines or distribution capabilities. And who could have imagined that our country's most serious quake would occur at New Madrid, Missouri, which suffered an estimated 8.7 shocker in 1812. Though the mathematical calculations required to evaluate equities are not difficult, an analyst - even one who is experienced and intelligent - can easily go wrong in estimating future "coupons." Over the years, we've done well with fixed-income investments, having realized from them both large capital gains (including $80 million in 1992) and exceptional current income.

1993 : Should members of their families desire to, they can pursue varying financial paths without running into the complications that often arise when assets are concentrated in a private business. These factors will probably strike many analysts as unbearably fuzzy, since they cannot be extracted from a data base of any kind. Is it really so difficult to conclude that Coca-Cola and Gillette possess far less business risk over the long term than, say, any computer company or retailer? Should we conclude from this similarity that the competitive strength of Coke and Gillette gains them nothing when business risk is being measured? But it's quite possible for ordinary investors to make such distinctions if they have a reasonable understanding of consumer behavior and the factors that create long-term competitive strength or weakness.

1994 : First, however, the promised accounting lesson: When we paid a $142.6 million premium over book value for Scott Fetzer, that figure had to be recorded on Berkshire's balance sheet. These charges have no effect on cash or the taxes we pay, and are not, in our view, an economic cost (though many accountants would disagree with us). The acquisition problem is often compounded by a biological bias: Many CEO's attain their positions in part because they possess an abundance of animal spirits and ego. Conversely, why should option profits or bonuses be heaped upon Ralph if good things are occurring in other parts of Berkshire but Scott Fetzer is lagging? If Ralph can employ incremental funds at good returns, it pays him to do so: His bonus increases when earnings on additional capital exceed a meaningful hurdle charge.

1995 : Woody Allen once explained why eclecticism works: "The real advantage of being bisexual is that it doubles your chances for a date on Saturday night." When people say that, it usually turns out they have a lemonade stand - with potential, of course, to quickly grow into the next Microsoft. Though my only credentials were that I was a student of Graham's, "Davy" graciously spent four hours or so showering me with both kindness and instruction. Indeed, our worst case from a "once-in-a-century" super-cat is far less severe - relative to net worth - than that faced by many well-known primary companies writing great numbers of property policies. Berkshire's California workers' compensation business, run by Brad Kinstler, faced fierce price-cutting in 1995 and lost a great many renewals when we refused to accept inadequate rates.

1996 : Last year, for the first time, we supplied you with a table that Charlie and I believe will help anyone trying to estimate Berkshire's intrinsic value. In the face of these factors, earnings would have evaporated had World Book not revamped distribution methods and cut overhead at headquarters, thereby dramatically reducing its fixed costs. Candler went on to say, just as Roberto could now, "No article of like character has ever so firmly entrenched itself in public favor." Accordingly, we are going to put future quarterly and annual reports of Berkshire on the Internet, where they can be accessed via http://www.berkshirehathaway.com. Last year on "Shareholder Sunday" we broke every Borsheim's record in terms of tickets, dollar volume and, no doubt, attendees per square inch.

1997 : But last year's performance was no great triumph: Any investor can chalk up large returns when stocks soar, as they did in 1997. In our last two annual reports, we furnished you a table that Charlie and I believe is central to estimating Berkshire's intrinsic value. In its role as a corporate "saver," Berkshire continually looks for ways to sensibly deploy capital, but it may be some time before we find opportunities that get us truly excited. In those years when we have had an underwriting profit, such as the last five, our cost of float has been negative. Our super-cat business was developed from scratch by Ajit Jain, who has contributed to Berkshire's success in a variety of other ways as well.

1998 : Todays markets are not friendly to our search for elephants, but you can be sure that we will stay focused on the hunt. Very few CEOs of public companies operate under a similar mandate, mainly because they have owners who focus on short-term prospects and reported earnings. Our customers gain because we have an armada of planes positioned throughout the country at all times, a blanketing that allows us to provide unmatched service. Lets look for a moment at the reinsurance business to understand why General Re could not on its own do what it can under Berkshire. This business was developed by Ajit Jain, who over the last decade has personally accounted for a significant portion of Berkshires operating earnings.

1999 : Bill thereupon turned the property over to us including some extra land that had appreciated significantly and we wrote him a check for his cost. Still, most of the planes we fly are owned by customers, which means that modest pre-tax margins in this business can produce good returns on equity. Not only did Berkshire acquire three outstanding retailers; these deals also allowed me to become friends with some of the finest people you will ever meet. If profits do indeed grow along with GDP, at about a 5% rate, the valuation placed on American business is unlikely to climb by much more than that. Our proxy statement contains instructions about obtaining tickets to the game and also a large quantity of other information that should help you enjoy your visit in Omaha.

2000 : This brand recognition is not only due to Acmes product quality, but also reflects many decades of extraordinary community service by both the company and John Justin. This companys incredible odyssey over the last few decades too multifaceted to be chronicled here was shaped by its long history as a manufacturer of asbestos products. A notable exception to this never-look-back approach is that of The Washington Post Company, which unfailingly and objectively reviews its acquisitions three years after they are made. Obviously, it would be embarrassing for Charlie make that humiliating if slow sales forced us to slash the rugs price, so step up and do your part. Our proxy statement contains instructions about obtaining tickets to the game and also a large quantity of other information that should help you enjoy your visit in Omaha.

2001 : Its earnings increased 2.5%, though return on invested capital fell slightly because of the $258 million investment we made last year in simulators and other fixed assets. When losses occur in this field, furthermore, they are often disastrous: Many issues end up at a small fraction of their original offering price and some become entirely worthless. Finally, Bill Robertie, one of only two players who have twice won the backgammon world championship, will be on hand to test your skill at that game. Those people ordering tickets to the annual meeting will receive a booklet containing all manner of information that should help you enjoy your visit in Omaha. Finally, I would like to thank the wonderful and incredibly productive crew at World Headquarters (all 5,246.5 square feet of it) who make my job so easy.

2002 : Im delighted to report that under Joe Brandons leadership, and with yeoman assistance by Tad Montross, enormous progress has been made on each of the fronts described. And it gained another highly significant advantage last year when each of its three largest worldwide competitors, previously rated AAA, was demoted by at least one rating agency. Recently, in contrast, one of the worlds largest reinsurers a company regularly recommended to primary insurers by leading brokers has all but ceased paying claims, including those both valid and due. Twenty, or even fewer, of the largest institutions, acting together, could effectively reform corporate governance at a given company, simply by withholding their votes for directors who were tolerating odious behavior. In recent years compensation committees too often have been tail-wagging puppy dogs meekly following recommendations by consultants, a breed not known for allegiance to the faceless shareholders who pay their fees.

2003 : Today, many large corporations run by CEOs whose fiddle-playing talents make your Chairman look like he is all thumbs pay nothing close to the stated federal tax rate of 35%. Responding to those who have weighed in about our perceived failings, he mused, It makes me wonder what life would be like if wed actually done something wrong. (This structure does not guarantee perfect behavior, however: Ive sat on boards of companies in which Berkshire had huge stakes and remained silent as questionable proposals were rubber-stamped.) On the following pages, therefore, we will present some balance sheet and earnings figures from our four major categories of businesses along with commentary about each. On the floor, for example, will be a 1,600 square foot Clayton home (featuring Acme brick, Shaw carpet, Johns-Manville insulation, MiTek fasteners, Carefree awnings, and outfitted with NFM furniture).

2004 : On the following pages, therefore, we will present some balance sheet and earnings figures from our four major categories of businesses along with commentary about each. Most of our float arises because (1) premiums are paid upfront though the service we provide insurance protection is delivered over a period that usually covers a year and; (2) loss events that occur today do not always result in our immediately paying claims, because it sometimes takes many years for losses to be reported (asbestos losses would be an example), negotiated and settled. Our U.S. owners already want a quality service wherever they travel and their wish for flight hours abroad is certain to grow dramatically in the decades ahead. We will do either, however, only when purchases can be made at prices that offer us the prospect of a reasonable return on our investment. Additionally, we will have Bob Hamman and Sharon Osberg, two of the worlds top bridge experts, available to play with our shareholders on Sunday afternoon.

2005 : Most of our float arises because (1) premiums are paid upfront though the service we provide insurance protection is delivered over a period that usually covers a year and; (2) loss events that occur today do not always result in our immediately paying claims, because it sometimes takes many years for losses to be reported (asbestos losses would be an example), negotiated and settled. When our PacifiCorp acquisition closes, we will add 1.6 million electric customers in six Western states, with Oregon and Utah providing us the most business. The hard fact is that I have cost you a lot of money by not moving immediately to close down Gen Res trading operation. And thats my point: These costs are now being incurred in amounts that will cause shareholders to earn far less than they historically have. Additionally, we will have Bob Hamman and Sharon Osberg, two of the worlds top bridge experts, available to play with our shareholders on Sunday afternoon.

2006 : In fact, many intelligent newspaper executives who regularly chronicled and analyzed important worldwide events were either blind or indifferent to what was going on under their noses. These payments, which come in many forms, often range between $150,000 and $250,000 annually, compensation that may approach or even exceed all other income of the independent director. Over the years Ive been queried many times about potential directors and have yet to hear anyone ask, Does he think like an intelligent owner? Even if the people above ground make their decisions imperfectly, they should be able to allocate funds more rationally than a decedent six feet under will have ordained decades earlier. He will receive this bonanza even though an index fund might have returned 15% to investors in the same period and charged them only a token fee.

2007 : You only learn who has been swimming naked when the tide goes out and what we are witnessing at some of our largest financial institutions is an ugly sight. Around then, the Pritzker family decided to gradually sell or reorganize certain of its holdings, including Marmon, a company operating 125 businesses, managed through nine sectors. Im willing to bet, however, that Dennis with the help of his partner, Dave Meleski will build a large operation, earning good returns on capital employed. Fanciful Figures How Public Companies Juice Earnings Former Senator Alan Simpson famously said: Those who travel the high road in Washington need not fear heavy traffic. Decades of option-accounting nonsense have now been put to rest, but other accounting choices remain important among these the investment-return assumption a company uses in calculating pension expense.

2008 : MidAmerican has maintained this extraordinary price stability while making Iowa number one among all states in the percentage of its generation capacity that comes from wind. This unprecedented spread in the cost of money makes it unprofitable for any lender who doesnt enjoy government-guaranteed funds to go up against those with a favored status. Tax-Exempt Bond Insurance Early in 2008, we activated Berkshire Hathaway Assurance Company (BHAC) as an insurer of the tax-exempt bonds issued by states, cities and other local entities. The reason is simple, though I have never seen even a passing reference to it by any financial analyst, rating agency or monoline CEO. This is not desirable from a safety standpoint, nor do we believe that sprinting ability should be the determinant of who gets to pose questions.

2009 : To be sure, Berkshire has many outstanding businesses and a cadre of truly great managers, operating within an unusual corporate culture that lets them maximize their talents. Three years ago, he took over huge liabilities from Lloyds, allowing it to clean up its relationship with 27,972 participants (names) who had written problem-ridden policies that at one point threatened the survival of this 322-year-old institution. If our expectations are met and we believe that they will be Berkshires ever-growing collection of good to great businesses should produce above-average, though certainly not spectacular, returns in the decades ahead. CEOs and, in many cases, directors have long benefitted from oversized financial carrots; some meaningful sticks now need to be part of their employment picture as well. With many more diners expected this year, Ive asked my friend, Donna Sheehan, at Piccolos another favorite restaurant of mine to serve shareholders on Sunday as well.

2010 : A lot has happened at GEICO during the last 60 years, but its core goal saving Americans substantial money on their purchase of auto insurance remains unchanged. In our earlier estimate of Berkshires normal earning power, we made three adjustments that relate to future investment income (but did not include anything for the undistributed earnings factor I have just described). Sometimes these same general partners thereafter quickly started another fund so that they could immediately participate in future profits without having to overcome their past losses. Charlie and I did, however, both work as young boys at my grandfathers grocery store, though our periods of employment were separated by about five years. Moreover, during the episodes of financial chaos that occasionally erupt in our economy, we will be equipped both financially and emotionally to play offense while others scramble for survival.

2011 : Though we have annually received interest payments of about $102 million since our purchase, the companys ability to pay will soon be exhausted unless gas prices rise substantially. As all business observers know, CEOs Lou Gerstner and Sam Palmisano did a superb job in moving IBM from near-bankruptcy twenty years ago to its prominence today. Then, in early 2011, pursuant to our original contract with the Pritzker family, we purchased an additional 16%, paying $1.5 billion as called for by a formula that reflected Marmons increased value. I have been reading the companys annual report for more than 50 years, but it wasnt until a Saturday in March last year that my thinking crystallized. Ideally, these assets should have the ability in inflationary times to deliver output that will retain its purchasing-power value while requiring a minimum of new capital investment.

2012 : One thing of which you can be certain: Whatever Berkshires results, my partner Charlie Munger, the companys Vice Chairman, and I will not change yardsticks. For example, if an insurance business sustains large and prolonged underwriting losses, any goodwill asset carried on the books should be deemed valueless, whatever its original cost. Underwriting Profit Yearend Float (in millions) Insurance Operations 2012 2011 2012 2011 BH Reinsurance $ 304 $(714) $34,821 $33,728 General Re 355 144 20,128 19,714 GEICO 680 576 11,578 11,169 Other Primary 286 242 6,598 5,960 $1,625 $ 248 $73,125 $70,571 After a $410 million charge against earnings arising from an industry-wide accounting change. In other words, I now have far more money working for me at Berkshire even though my ownership of the company has materially decreased. Its also true that my share of both Berkshires intrinsic business value and the companys normal earning power is far greater than it was in 2005.

2013 : Let me count the ways: We completed two large acquisitions, spending almost $18 billion to purchase all of NV Energy and a major interest in H. J. Heinz. For example, if an insurance business sustains large and prolonged underwriting losses, any goodwill asset carried on the books should be deemed valueless, whatever its original cost. Our credit is in fact not needed because each company has earning power that even under terrible economic conditions will far exceed its interest requirements. I believe the trusts long-term results from this policy will be superior to those attained by most investors whether pension funds, institutions or individuals who employ high-fee managers. If Ben had not recognized the special qualities of GEICO when it was still in its infancy, my future and Berkshires would have been far different.

2014 : Im not embarrassed to admit that Heinz is run far better under Alex Behring, Chairman, and Bernardo Hees, CEO, than would be the case if I were in charge. For example, if an insurance company sustains large and prolonged underwriting losses, any goodwill asset carried on the books should be deemed valueless, whatever its original cost. In addition, though marginal businesses purchased at cheap prices may be attractive as short-term investments, they are the wrong foundation on which to build a large and enduring enterprise. Additionally, through watching Sees in action, I gained a business education about the value of powerful brands that opened my eyes to many other profitable investments. Those insurers as a group would be expected to produce, in due course, dependable underwriting gains while also producing substantial float (from unpaid insurance liabilities) for investment.

2015 : To achieve our goals, however, we follow an approach emphasizing avoidance of bloat, buying businesses such as PCC that have long been run by cost-conscious and efficient managers. His unparalleled fortune couldnt buy what we now take for granted, whether the field is to name just a few transportation, entertainment, communication or medical services. For example, if an insurance company sustains large and prolonged underwriting losses, any goodwill asset carried on the books should be deemed valueless, whatever its original cost. Though tank cars sound like vessels carrying crude oil, only about 7% of our fleet carries that product; chemicals and refined petroleum products are the lead items we transport. February 27, 2016 Warren E. Buffett Chairman of the Board Front Row Becki Amick, Sharon Heck, Melissa Hawk, Jalayna Busse, Warren Buffett, Angie Wells, Alisa Krueger, Deb Ray, Carrie Sova, Ellen Schmidt Back Row Tracy Britt Cool, Jennifer Tselentis, Ted Weschler, Joanne Manhart, Bob Reeson, Todd Combs, Dan Jaksich, Debbie Bosanek, Mark Sisley, Marc Hamburg, Kerby Ham, Mark Millard, Allyson Ballard, Stacy Gottschalk, Tiffany Vokt 31 '

2016 : Concurrently, Berkshires superb corps of operating CEOs will focus on increasing earnings at the individual businesses they manage, sometimes helping them to grow by making bolt-on acquisitions. For example, if an insurance company sustains large and prolonged underwriting losses, any goodwill asset carried on the books should be deemed valueless, whatever its original cost. Pay attention, too, as I explain that Berkshire has several hundred such executives at its subsidiaries and pays them similar amounts, but uses only cash to do so. We exclude our Kraft Heinz holding because Berkshire is part of a control group and therefore must account for this investment on the equity method. Though there are thousands of professional investment managers who have amassed staggering fortunes by touting their stock-selecting prowess, only one man Ted Seides stepped up to my challenge.

2017 : That last requirement proved a barrier to virtually all deals we reviewed in 2017, as prices for decent, but far from spectacular, businesses hit an all-time high. We exclude our Kraft Heinz holding 325,442,152 shares because Berkshire is part of a control group and therefore must account for this investment on the equity method. Over time, the S&P 500 which mirrors a huge cross-section of American business, appropriately weighted by market value has earned far more than 10% annually on shareholders equity (net worth). On Friday, May 4th, our Berkshire exhibitors at CenturyLink will be open from noon until 5 p.m. We added that extra shopping time in 2015, and serious shoppers love it. Berkshire shareholders are a booksellers dream: When Poor Charlies Almanack (yes, our Charlie) made its debut some years ago, we sold 3,500 copies at the meeting.

2018 : Rather, both of us have consistently thought that at Berkshire this mark-to-market change would produce what I described as wild and capricious swings in our bottom line. You may ask whether an allowance should not also be made for the major tax costs Berkshire would incur if we were to sell certain of our wholly-owned businesses. (This lower rate has long been logical because our investees have already paid tax on the earnings that they pay to us.) We exclude our Kraft Heinz holding 325,442,152 shares because Berkshire is part of a control group and therefore must account for this investment on the equity method. Leaving aside congenital pessimists, Americans believed that their children and generations beyond would live far better lives than they themselves had led.

2019 : Nevertheless, when business ownership was sliced into small pieces stocks buyers in the pre-Smith years usually thought of their shares as a short-term gamble on market movements. Sometimes this job has been easy at other times, more than difficult, particularly when we began working with huge and evergrowing sums of money. Today, we have most of your money deployed in controlled businesses that achieve good-to-excellent returns on the net tangible assets each requires for its operations. We exclude our Kraft Heinz holding 325,442,152 shares because Berkshire is part of a control group and therefore must account for this investment on the equity method. First, Berkshires assets are deployed in an extraordinary variety of wholly or partly-owned businesses that, averaged out, earn attractive returns on the capital they use.