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🎵Wisdom Density:
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🚂 BNSF (Burlington Northern Santa Fe)
📝 Description
BNSF Railway is one of the largest freight railroad networks in North America. Acquired by Berkshire Hathaway in a historic $44 billion transaction (the largest in Berkshire history to that point), BNSF represents Warren Buffett’s "all-in wager on the economic future of the United States." The company operates 32,500 route miles in 28 states and three Canadian provinces.
🔗 Connection to Berkshire
- The "All-In" Wager: Acquired in late 2009 / early 2010 during the recovery from the Great Recession. Buffett viewed it as a century-long bet on American infrastructure.
- The Social Compact: Along with MidAmerican Energy, BNSF is a central pillar of Berkshire’s Social Compact—a promise to reinvest massive capital into essential infrastructure in exchange for a fair regulatory return. In 2010, Berkshire committed $6 billion to capital expenditures for the railroad, demonstrating this commitment to long-term reinvestment.
- Strategic Shift: The acquisition marked a definitive shift in Berkshire's strategy from "capital-light" businesses (like See’s) to "massive, capital-intensive" essential services.
📅 Evolutionary History
- 2009 Letter: Acquisition announced. Buffett calls it a "bet on the American economy."
- 2010 Letter: Acquisition finalized. Buffett describes it as the "highlight" of the year, increasing Berkshire's "normal" pre-tax earning power by 40% (approx. $1B per month in pre-tax earnings in regular times).
- 2010 Meeting: Buffett defends the capital intensity of the business, explaining that while it can't yield "brilliant" returns, it is a stable home for tens of billions of dollars. He explicitly links it to the Social Compact.
- 2012 Letter: Identified as the premiere member of the "Powerhouse Five." Recorded pre-tax earnings of $5.2 billion (approx. $100 million per week).
- 2012 Meeting: Buffett highlights BNSF's strategic role in hauling Bakken oil—a temporary but highly profitable shift that emphasizes the railroad's flexibility. He also notes the environmental moat: BNSF moves a ton of freight 500 miles on a single gallon of gas.
- 2013 Letter: Record Investments. Carried about 15% (ton-miles) of all inter-city freight in the US. Invested a record $4 billion in capital improvements.
- 2014 Letter & 2014 Meeting: BNSF faced severe weather issues during the "winter from hell," which heavily disrupted agricultural shipping. Berkshire responded by authorizing a massive, historic $6 billion capital expenditure program to resolve the backlog and fortify the network. At the meeting, Buffett dismissed the need for a pooled insurance consortium for rail disasters (like the nuclear industry's), stating that the four major railroads have the balance sheets to handle a disaster independently.
- 2015 Letter: Record performance — pre-tax earnings of $6.8B (+$606M over 2014), and $5.8B in capital expenditures, "far and away the record for any American railroad, nearly three times our annual depreciation charge." Matthew Rose and Carl Ice credited with a major operational turnaround after 2014's service collapse. BNSF moves approximately 17% of U.S. intercity freight by revenue ton-miles — 45% more than its closest competitor. "The most important development at Berkshire during 2015 was not financial, though it led to better earnings." (referring to the operational turnaround)
- 2015 Meeting: Crude-by-rail safety regulations (300 pages of new rules) discussed at length. Bakken crude described as significantly more volatile than conventional crude — "it's condensate, almost misnamed as crude." BNSF will NOT pursue ownership of 5,000 tank cars (historically railroads don't own them). Marmon's Union Tank Car will work triple shifts retrofitting existing tank cars. Berkshire Hathaway Reinsurance offered $5-6B catastrophic accident coverage to the four major railroads; railroads declined on pricing. Burlington Northern confirmed as safety leader among major U.S. railroads.
- 2018 Letter: Rebounded strongly with increased volume and operational improvements, continuing to serve as one of the largest and most critical "groves" in Berkshire's non-insurance operations.
- 2021 Letter: Designated as "Giant 3" in the new "Four Giants" framework. Earned a record $6 billion. Described as the "number one artery of American commerce" and a cornerstone of Berkshire's massive $158 billion U.S. infrastructure ownership.
- 2025 Letter: Under Greg Abel's operational leadership, BNSF generated $8.1 billion in net operating cash flows, returned $4.4 billion in dividends to the parent company, and improved its operating margin to 34.5% (from 32.0% in 2024). Abel highlights BNSF's focus on maintaining competitive access to Eastern rail markets amidst the proposed Union Pacific-Norfolk Southern Class I railroad merger, reiterating that Berkshire is not interested in acquiring another Class I railroad.
📈 Key Insights
- Energy Efficiency: BNSF can move one ton of freight 500 miles on a single gallon of diesel (updated from 470 in 2010), a 3x efficiency advantage over trucking. This creates a sustainable competitive advantage in a carbon-conscious economy.
- The "Social Compact" in Action: In 2010, Berkshire committed $6 billion to capital expenditures for the railroad, demonstrating the commitment to long-term reinvestment in exchange for fair regulatory returns. Buffett noted: "We will always provide top-tier service and safety, and in return, we expect a fair shake from the regulators."
- Asset Density: BNSF owns the "right-of-way"—a moat that cannot be replicated at any cost today.
💡 Key Mentions
- 2009 Letter: Detailed as Berkshire’s boldest acquisition, a 100-year commitment to American prosperity.
- 2010 Letter: Acquisition finalized; detailed the "Social Compact" and operational capacity.
- 2010 Meeting: Discussion of capital intensity vs. return quality.
🔗 Connections
- Parent: Berkshire Hathaway Inc.
- Concept: Social Compact
- Concept: Capital Allocation
- Context: 2009 Letter, 2010 Letter, 2025 Letter, 2025 Portfolio Analysis
📚 Historical Mentions & Citations (27)
Click a reference document below to expand and read the exact paragraph(s) containing this concept in the archive.
📜2009 LetterExcerpt Available▼
2009 LetterExcerpt Available
Berkshire’s recent acquisition of Burlington Northern Santa Fe (BNSF) has added at least 65,000 shareholders to the 500,000 or so already on our books. It’s important to Charlie Munger, my long-time partner, and me that all of our owners understand Berkshire’s operations, goals, limitations and culture. In each annual report, consequently, we restate the economic principles that guide us. This year these principles appear on pages 89-94 and I urge all of you — but particularly our new shareholders — to read them. Berkshire has adhered to these principles for decades and will continue to do so long after I’m gone.
In this letter we will also review some of the basics of our business, hoping to provide both a freshman orientation session for our BNSF newcomers and a refresher course for Berkshire veterans.
🎙️2009 MeetingReference Only▼
2009 MeetingReference Only
Mentioned in this document.
📜2010 LetterExcerpt Available▼
2010 LetterExcerpt Available
Both of us are enthusiastic about BNSF’s future because railroads have major cost and environmental advantages over trucking, their main competitor. Last year BNSF moved each ton of freight it carried a record 500 miles on a single gallon of diesel fuel. That’s three times more fuel-efficient than trucking is, which means our railroad owns an important advantage in operating costs. Concurrently, our country gains because of reduced greenhouse emissions and a much smaller need for imported oil. When traffic travels by rail, society benefits.
Over time, the movement of goods in the United States will increase, and BNSF should get its full share of the gain. The railroad will need to invest massively to bring about this growth, but no one is better situated than Berkshire to supply the funds required. However slow the economy, or chaotic the markets, our checks will clear.
🎙️2010 MeetingExcerpt Available▼
2010 MeetingExcerpt Available
If we can translate it into a little something more than a dollar of present value, we’ll keep looking for ways to do that. In our judgment, we did that with BNSF, but the scorecard will be written on that in 10 or 20 years. We did it with MidAmerican Energy. We went into a business, very capital intensive, and so far, we’ve done very well, in terms of compounding equity. But it can’t be a Coca-Cola, in terms of a basic business where you really don’t need very much capital, if any, hardly. And you can keep growing the business if you’re lucky, if you’ve got a growing business. See’s is not a growing business. It’s a wonderful business, but it doesn’t translate itself around the world like something like Coca-Cola would. So I would say you’ve got your finger right on the right point. I think you understand it as well as we do. I hope we don’t disappoint you, in terms of putting money out to work at decent returns, good returns.
WARREN BUFFETT: Yeah, well, the first thing we do is we never engage a compensation consultant. (Applause) And we have, whatever it may be, 70-plus or whatever number businesses we have. They have very different economic characteristics. To try to set some Berkshire standard to apply to businesses such as insurance, which has capital as a bulwark but which we get to invest in other things we’d invest in anyway, so there’s minus capital involved, to a BNSF or our utility business where there’s tons of capital involved, or in between See’s where there is very little capital involved. We have other businesses that are basically just so damn good that a, you know, a chimpanzee could run them, and we have other business that are so tough at times that, you know, if we had Alfred P. Sloan back, you know, we wouldn’t be able to do very well with them. So there’s enormous differences in the economic characteristics of our business. I try to figure out what — if I owned the whole business — what is a sensible way to employ somebody and compensate them, considering the economic characteristics of the business.
📜2011 LetterExcerpt Available▼
2011 LetterExcerpt Available
Our major businesses did well last year. In fact, each of our five largest non-insurance companies — BNSF, Iscar, Lubrizol, Marmon Group and MidAmerican Energy — delivered record operating earnings. In aggregate these businesses earned more than $9 billion pre-tax in 2011. Contrast that to seven years ago, when we owned only one of the five, MidAmerican, whose pre-tax earnings were $393 million. Unless the economy weakens in 2012, each of our fabulous five should again set a record, with aggregate earnings comfortably topping $10 billion. * In total, our entire string of operating companies spent $8.2 billion for property, plant and equipment in 2011, smashing our previous record by more than $2 billion. About 95% of these outlays were made in the U.S., a fact that may surprise those who believe our country lacks investment opportunities. We welcome projects abroad, but expect the overwhelming majority of Berkshire’s future capital commitments to be in America. In 2012, these expenditures will again set a record.
We have two very large businesses, BNSF and MidAmerican Energy, that have important common characteristics distinguishing them from our many other businesses. Consequently, we assign them their own sector in this letter and also split out their combined financial statistics in our GAAP balance sheet and income statement.
📜2012 LetterExcerpt Available▼
2012 LetterExcerpt Available
Last year I told you that BNSF, Iscar, Lubrizol, Marmon Group and MidAmerican Energy — our five most profitable non-insurance companies — were likely to earn more than $10 billion pre-tax in 2012. They delivered. Despite tepid U.S. growth and weakening economies throughout much of the world, our “powerhouse five” had aggregate earnings of $10.1 billion, about $600 million more than in 2011.
Of this group, only MidAmerican, then earning $393 million pre-tax, was owned by Berkshire eight years ago. Subsequently, we purchased another three of the five on an all-cash basis. In acquiring the fifth, BNSF, we paid about 70% of the cost in cash, and for the remainder, issued shares that increased the amount outstanding by 6.1%. Consequently, the $9.7 billion gain in annual earnings delivered Berkshire by the five companies has been accompanied by only minor dilution. That satisfies our goal of not simply growing, but rather increasing per-share results.
🎙️2012 MeetingExcerpt Available▼
2012 MeetingExcerpt Available
So, if you give up a little on negotiated financial deals, you may gain a great deal, just in terms of somebody that’s more energetic about going out and making transactions. And those deals have not been key to Berkshire. If you look at what we did with General Electric and Goldman Sachs, for example in those two deals in 2008, I mean, they were OK, but they are not remotely as important as, you know, maybe buying Coca-Cola stock, which was done in the market over a period of six or eight months. We bought IBM over a period of six or eight months last year in the market. We bought all these businesses on a negotiated basis. So the values in Berkshire that have been accumulated by some special security transaction are really just peanuts compared to the values that have been created by buying businesses like GEICO or ISCAR or BNSF, and the sort. It’s not a key to Berkshire’s future, but the ingredients that allowed us to do that will still be available and, to some extent, peculiar to Berkshire, in terms of sizable deals.
GARY RANSOM: When Berkshire bought BNSF, it raised the surplus of the property-casualty industry by about 4 percent. It’s unusual to have a property-casualty company own such a large non-operating company. I’d also characterize your whole organization chart as challenging, a lot of different pieces to it, which gives rise to the issue of capital efficiency. And I’m just wondering, are there any parts of your organization structure that have any hindrance, whether it’s regulatory or otherwise, to making use of the capital in the best way, generally, and in particular for BNSF?
📜2013 LetterExcerpt Available▼
2013 LetterExcerpt Available
MidAmerican is one of our “Powerhouse Five” — a collection of large non-insurance businesses that, in aggregate, had a record $10.8 billion of pre-tax earnings in 2013, up $758 million from 2012. The other companies in this sainted group are BNSF, Iscar, Lubrizol and Marmon.
Of the five, only MidAmerican, then earning $393 million pre-tax, was owned by Berkshire nine years ago. Subsequently, we purchased another three of the five on an all-cash basis. In acquiring the fifth, BNSF, we paid about 70% of the cost in cash, and, for the remainder, issued shares that increased the number outstanding by 6.1%. In other words, the $10.4 billion gain in annual earnings delivered Berkshire by the five companies over the nine-year span has been accompanied by only minor dilution. That satisfies our goal of not simply growing, but rather increasing per-share results.
🎙️2013 MeetingExcerpt Available▼
2013 MeetingExcerpt Available
WARREN BUFFETT: Yeah. I would say that we will get a decent rate of return. Whether it’s — most of them, incidentally, have been bought, and they were either S corporations or partnerships of some sort. So they — compared to buying a Heinz, for example, or a BNSF or something of the sort — they actually have a certain structural advantage in terms of the eventual return after tax, because we get to write off the intangibles we’re purchasing. That affects the after-tax return, compared to the pretax return that would come from this. But I would say that our after-tax return, with declining earnings, which I expect, would be at least 10 percent after tax, but I think — and it could well be somewhat higher. I think it’s very unlikely that it would be significantly lower. And everything we have seen to date, and it hasn’t been that long, but we have a number of papers now, would indicate that we will meet or beat the 10 percent. It doesn’t have — it’s not going to move the needle at Berkshire.
I have a general feeling that America will continue to work well. And I don’t — you know — there’s — throughout my adult lifetime, and before that, there’s always been all kinds of opinions that, you know, about what’s going to happen this year or the next year or anything like that. And nobody knows. What you do know, with a very high degree of certainty, in my view, is that BNSF will be carrying more carloads 10 years from now, 20 years from now; that there will be no substitute for the service that they provide; that there will be two important railroads in the west and two important railroads in the east; and that they will have an asset that has incredible replacement value, nobody could turn out something like it, and that they’ll get paid fairly for what they do. It’s not very complicated. And to ignore what you know because of predictions about what you don’t know, or what nobody else knows, in our view, it’s just plain silly.
📜2014 LetterExcerpt Available▼
2014 LetterExcerpt Available
Our “Powerhouse Five” — a collection of Berkshire’s largest non-insurance businesses — had a record $12.4 billion of pre-tax earnings in 2014, up $1.6 billion from 2013.* The companies in this sainted group are Berkshire Hathaway Energy (formerly MidAmerican Energy), BNSF, IMC (I’ve called it Iscar in the past), Lubrizol and Marmon.
Of the five, only Berkshire Hathaway Energy, then earning $393 million, was owned by us a decade ago. Subsequently we purchased another three of the five on an all-cash basis. In acquiring the fifth, BNSF, we paid about 70% of the cost in cash and, for the remainder, issued Berkshire shares that increased the number outstanding by 6.1%. In other words, the $12 billion gain in annual earnings delivered Berkshire by the five companies over the ten-year span has been accompanied by only minor dilution. That satisfies our goal of not simply increasing earnings, but making sure we also increase per-share results.
🎙️2014 MeetingExcerpt Available▼
2014 MeetingExcerpt Available
JONATHAN BRANDT: The BNSF has done very well since Berkshire acquired it in 2010. But its western competition of Union Pacific has actually grown its earnings more. And at the moment, the UP seems to be operating more smoothly for its customers. Could you shed some light on the service challenges Burlington has experienced recently and perhaps discuss any differences between the two railroads in end markets, geography, and strategy that may have led to the divergent result? Would it be fair to say that, in trying to aggressively sign up new business volume last year, that the railroad did not allow for a sufficient margin of safety in terms of what its capacity could handle, should there be a harsher than normal winter or other adverse circumstances?
MATT ROSE: Warren. So last year, the industry grew at about 820,000 units. BNSF handled 53 percent of all those units. And it’s not what we wanted to take or what we didn’t want to take. Quite frankly, it’s the geographic nature of our franchise. And the oil came a lot faster than we were expecting and we’ve been spending money at a rapid clip to try and build into it. The second issue was, you know, I had previously, prior to this past year, been in the CEO role for 13 years, and I have never seen a weather — a winter weather — like that. We had 83 inches of snow in Chicago. We had multiple days, over 30 days, where it didn’t get to zero in the Minnesota area. So, you know, we know this is an outdoor sport. We get it, on the weather. But quite frankly, when we get to about 0 to 10 degrees below, things just don’t work. The weather’s getting better. Last week, we handled 206,000 units. No other railroad has ever handled 205,000 units. So the railroad’s coming back.
📜2015 LetterExcerpt Available▼
2015 LetterExcerpt Available
The most important development at Berkshire during 2015 was not financial, though it led to better earnings. After a poor performance in 2014, our BNSF railroad dramatically improved its service to customers last year. To attain that result, we invested about $5.8 billion during the year in capital expenditures, a sum far and away the record for any American railroad and nearly three times our annual depreciation charge. It was money well spent.
BNSF moves about 17% of America’s intercity freight (measured by revenue ton-miles), whether transported by rail, truck, air, water or pipeline. In that respect, we are a strong number one among the seven large American railroads (two of which are Canadian-based), carrying 45% more ton-miles of freight than our closest competitor. Consequently, our maintaining first-class service is not only vital to our shippers’ welfare but also important to the smooth functioning of the U.S. economy.
🎙️2015 MeetingExcerpt Available▼
2015 MeetingExcerpt Available
WARREN BUFFETT: OK. We have just — we have one slide that relates to our quarterly earnings that — if we could put up. We released these yesterday afternoon, and nothing particularly remarkable. The railroad, BNSF, did dramatically better last year, not only in earnings, but in all kinds of performance measures, in terms of train velocity, and on time, and you name it, so that the — You know, we got behind last year, early in the year, and there’s been lots of money, and more important, lots of effort, spent to get the railroad operating like it should be. And in the first quarter those efforts paid off. We gained share. Our earnings, relative to other railroads, improved dramatically, so, you know, we got the trains running. We’re going to spend a lot of money making sure we get even better. But the improvement has been huge, and I want to thank Matt Rose and Carl Ice for a really extraordinary performance and having our railroad running the way it should be running. So thanks, Matt and Carl. (Applause)
CAROIL LOOMIS: So, my first question is from a man in Timpson, Texas, who happens to have a familiar name, Frank Gifford, but wants to make it clear that he isn’t the football Frank Gifford, but rather a travel photographer. And his question is a hard one. He says, “I’ve been a shareholder for 15 years, but I’m now suffering heartburn. Until recently I considered Berkshire an ethical company, benefiting society through” — and here he mentions two Berkshire companies headquartered in his home state — he says, ”— through BNSF and ACME Brick. “Two points call that opinion into question now: One is the Seattle Times story on predatory practices at our Clayton Homes subsidiary. “Clayton mainly responded with platitudes to this article and would not answer questions, so I have to assume the facts in the story are correct. “The other point that I want to mention is our growing partnership with 3G Capital. I sold my Tim Horton stock in disgust before 3G gutted 20 percent of the corporate staff and plunged this well-run company deep into junk territory.
📜2016 LetterExcerpt Available▼
2016 LetterExcerpt Available
Here’s our financial record since 1999, when the redirection of our business began in earnest. During the 18-year period covered, Berkshire’s outstanding shares grew by only 8.3%, with most of the increase occurring when we purchased BNSF. That, I’m happy to say, was one issuance of stock that made good sense.
Our BNSF railroad and Berkshire Hathaway Energy (“BHE”), our 90%-owned utility business, share important characteristics that distinguish them from Berkshire’s other activities. Consequently, we assign them their own section in this letter and split out their combined financial statistics in our GAAP balance sheet and income statement. These two very major companies accounted for 33% of Berkshire’s after-tax operating earnings last year.
🎙️2016 MeetingExcerpt Available▼
2016 MeetingExcerpt Available
The Buffalo newspaper was making, at one time, $40 million a year and had no capital requirement, so we could take that whole $40 million and go and do — go buy something else with it. But capital — increasing capital — acts as an anchor on returns in many ways. And one of the ways is that it drives us into — just in terms of availability — it drives us into businesses that are much more capital intensive. You just saw a slide, for example, on Berkshire Hathaway Energy, where we just announced, just in the last couple of weeks, we announced a $3.6 billion investment coming up in wind generation. And we pledged overall to have $30 billion in renewables. Anything that Berkshire Hathaway Energy does, anything that BNSF does, takes lots of money. We get decent returns on capital, but we don’t get the extraordinary returns on capital that we’ve been able to get in some of the businesses we acquire that are not capital intensive. As I mentioned in the annual report, we have a few businesses that actually earn 100 percent a year on true invested capital.
JONATHAN BRANDT: Testing. The railroad industry seems, right now, to be suffering from exposure to some of the weakest parts of the economy, with volume declines of varying magnitudes in coal, oil, sand, and metals. Even intermodal, usually a steady source of growth, has been relatively weak of late. How much of the weakness is cyclical, how much is secular? In the last 15 months, the other western railroad’s market capitalization is down by 30 — 35 percent — as projections of future growth have come down. Is your estimate of BNSF’s intrinsic value down by a material amount during the same period, or is your view of the value of BNSF’s irreplaceable network unaffected by these short-term wiggles?
📜2018 LetterExcerpt Available▼
2018 LetterExcerpt Available
Which suggests that we return to the performance of our non-insurance businesses. Our two towering redwoods in this grove are BNSF and Berkshire Hathaway Energy (90.9% owned). Combined, they earned $9.3 billion before tax last year, up 6% from 2017. You can read more about these businesses on pages K-5 — K-10 and pages K-40 — K-45.
🎙️2019 MeetingExcerpt Available▼
2019 MeetingExcerpt Available
WARREN BUFFETT: OK, Jon Brandt. JONATHAN BRANDT (RESEARCH ANALYST, RUANE, CUNNIFF & GOLDFARB): Hi, Warren and Charlie. Thanks for having me, as always. Every major North American railroad other than Burlington Northern has adopted at least some aspects of precision-scheduled railroading, generally to good effect to their bottom line. Some believe that point-to-point schedule service and minimal in-transit switching is good for both returns on capital and customer service. Others believe precision railroading has done little for on-time performance, and its rigidity has jeopardized the compact that railroads have had with both regulators and customers. Do you and current BNSF management believe that it’s now a good idea for BNSF to adopt precision railroading playbook? Or do you agree with its critics?
AUDIENCE MEMBER: Good morning. My name is Bill Moyer and I’m from Vashon Island, Washington. And I’m part of a team called “The Solutionary Rail Project.” Interestingly, only 3.5 percent of the value of freight in the U.S. moves on trains. Berkshire Hathaway is incredibly well positioned with its investments in the northern and southern transcon through BNSF to grab far more of that freight traffic off of the roads and get diesel out of our communities, as well as harness transmission corridors for your Berkshire renewable energy assets, for which you’re obviously very proud. Would you consider meeting with us to look at a proposal for utilizing your assets and leveraging a public/private partnership to electrify your railroads and open those corridors for a renewable energy future?
📜2020 LetterExcerpt Available▼
2020 LetterExcerpt Available
Our second and third most valuable assets — it’s pretty much a toss-up at this point — are Berkshire’s 100% ownership of BNSF, America’s largest railroad measured by freight volume, and our 5.4% ownership of Apple. And in the fourth spot is our 91% ownership of Berkshire Hathaway Energy (“BHE”). What we have here is a very unusual utility business, whose annual earnings have grown from $122 million to $3.4 billion during our 21 years of ownership.
I’ll have more to say about BNSF and BHE later in this letter. For now, however, I would like to focus on a practice Berkshire will periodically use to enhance your interest in both its “Big Four” as well as the many other assets Berkshire owns.
🎙️2020 MeetingExcerpt Available▼
2020 MeetingExcerpt Available
Our three major businesses of insurance and the BNSF railroad — railroad and our energy business, those are our three largest by some margin — they’re in a reasonably decent position. They will — they’ll spend more than their depreciation.
📜2021 LetterExcerpt Available▼
2021 LetterExcerpt Available
BNSF, our third Giant, continues to be the number one artery of American commerce, which makes it an indispensable asset for America as well as for Berkshire. If the many essential products BNSF carries were instead hauled by truck, America’s carbon emissions would soar.
BNSF trains traveled 143 million miles last year and carried 535 million tons of cargo. Both accomplishments far exceed those of any other American carrier. You can be proud of your railroad.
🎙️2021 MeetingExcerpt Available▼
2021 MeetingExcerpt Available
And I don’t think they’ve read the reports of Berkshire Hathaway Energy. And I don’t think they know. You know, if I talk about what we’re doing in high voltage transmission, we’re doing more than any company in the country. The president talked about what the government’s going to do, and how important it is, and, you know. We have a record in that’s, overall, is incredibly good. But we have a group of organizations, just generally, and they’re nice people. But they want us to answer a bunch of questionnaires their way, so they want us to go to Dairy Queen and Borsheims, and all those people, and have them fill out reports that show a bunch of figures. But the reports that count are the reports that Greg gets on Berkshire Hathaway Energy and the railroad (BNSF). You talk about three of our companies, and you’ve covered 95% of it. And it’s asinine, frankly, in my view. Now, we do some other asinine things, because we’re required to do them.
GREG ABEL: Sure, Warren. Thank you. And, really, as Warren touched on, BHE and BNSF have our — have the significant carbon footprints when you think of Berkshire. And Warren, you touched on the disclosure that we’ve provided in the past going all the way back to 2007. I did pull those two investor presentations, one from 2007, and then our most recent one in 2021. So, if we could pull up BHE-1 as a slide, I think it would just highlight, going all the way back to 2007, we’ve been doing investor presentations for what we call our fixed-income investors, and we’ve done that through — every year through 2021. We’ve provided very similar disclosures to our board on an annual basis and had discussions around Berkshire Hathaway Energy’s plans to decarbonize. Now, it’s interesting. If you go back to the 2007 fixed-income conference — and we are having a conference at that point in time — we have third-party debt, capital debt, that our utilities raise. It’s a traditional capital structure used across our regulated entities to manage our total cost to the customer.
📜2022 LetterExcerpt Available▼
2022 LetterExcerpt Available
In addition to those eight investees, Berkshire owns 100% of BNSF and 92% of BH Energy, each with earnings that exceed the $3 billion mark noted above ($5.9 billion at BNSF and $4.3 billion at BHE). Were these companies publicly-owned, they would replace two present members of the 500. All told, our ten controlled and non-controlled behemoths leave Berkshire more broadly aligned with the country’s economic future than is the case at any other U.S. company. (This calculation leaves aside “fiduciary” operations such as pension funds and investment companies.) In addition, Berkshire’s insurance operation, though conducted through many individually-managed subsidiaries, has a value comparable to BNSF or BHE.
📜2023 LetterExcerpt Available▼
2023 LetterExcerpt Available
At Berkshire’s annual gathering on May 6, 2023, I presented the first quarter’s results which had been released early that morning. I followed with a short summary of the outlook for the full year: (1) most of our non-insurance businesses faced lower earnings in 2023; (2) that decline would be cushioned by decent results at our two largest non-insurance businesses, BNSF and Berkshire Hathaway Energy (“BHE”) which, combined, had accounted for more than 30% of operating earnings in 2022; (3) our investment income was certain to materially grow because the huge U.S. Treasury bill position held by Berkshire had finally begun to pay us far more than the pittance we had been receiving and (4) insurance would likely do well, both because its underwriting earnings are not correlated to earnings elsewhere in the economy and, beyond that, property-casualty insurance prices had strengthened.
Insurance came through as expected. I erred, however, in my expectations for both BNSF and BHE. Let’s take a look at each.
🎙️2023 MeetingExcerpt Available▼
2023 MeetingExcerpt Available
And this is addressed to Ajit and Greg. He says, “Last year I asked you about how GEICO and BNSF appeared to lose ground to their leading competitors, GEICO on telematics and BNSF on precision scheduled railroading.
“Ajit, you responded by saying how you expected GEICO to make progress in about a year or two. Greg, you spoke about your pride in BNSF, but you didn’t directly address the threat of precision scheduled railroading. Will each of you please provide perspective on these competitive challenges and our company’s strategies to address them?”
📜2024 LetterExcerpt Available▼
2024 LetterExcerpt Available
(in $ millions) 2024 2023 Insurance-underwriting $9,020 $5,428 Insurance-investment income 13,670 9,567 BNSF 5,031 5,087 Berkshire Hathaway Energy 3,730 2,331 Other controlled businesses 13,072 13,362 Non-controlled businesses* 1,519 1,750 Other** 1,395 (175) Operating earnings $47,437 $37,350
🎙️2024 MeetingExcerpt Available▼
2024 MeetingExcerpt Available
“In the chairmans letter, Warren points out that the profit margins for BNSF have slipped relative to all five other railroads.”
“However, Warren comments in the letter, BNSF carries more freight and spends more on capital expenditures than any of the other five major railroads and has a vast service territory second to none.′
📜2025 LetterExcerpt Available▼
2025 LetterExcerpt Available
We will encounter business successes and setbacks. When we fail, we will say so. Doing the right thing also means rectifying our errors. A great example of both is BNSF’s resolution in 2025 of a longstanding dispute with the Swinomish Indian Tribal Community over crude oil shipments across Tribal lands. The BNSF decisions that sparked the dispute were made long ago, but the current BNSF leadership built a partnership rooted in communication, understanding, and respect. BNSF acknowledged its past mistakes and apologized, paving the way for mutually beneficial agreements that allow it to meet customer needs while operating safely on Tribal lands.
As one of the six major freight railroads in North America, BNSF is a key part of the transportation backbone of the U.S. economy. Berkshire acquired this iconic business in 2010 with an equity value of $34.5 billion. In 2025, BNSF produced $8.1 billion in net operating cash flows and returned $4.4 billion of that cash to Berkshire through dividends. For context, its average annual dividend over the past five years was $4.1 billion.