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Greg Abel

309 tagged segments · 1997–2026

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19972026

Most-recent segments300 of 309

Greg AbelInterview2026-03-05conf:medium

Squawk Pod: Berkshire's New CEO Greg Abel — 03/05/26

“Yes. So, we've had a long-standing policy that uh when the intrinsic value as we see it and computed on a conservative conservative basis when it exceeds our market price, Berkshire has always acquired shares. That's been our LA long-standing policy. We highlighted that in the 10K and in my letter that that remained in place and we've just recommenced yesterday. So the the point being we see value the intrinsic value exceeds the current market value and we started uh recommence purchasing and we felt it was important to communicate to our shareholders, our partners, our owners that with the transition”

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Greg AbelInterview2026-03-05

Squawk Pod: Berkshire's New CEO Greg Abel — 03/05/26

“Exactly. We always look at effectively three buckets when we're allocating our capital. We have our existing businesses uh deploying capital back into those both uh for their current operations and incremental opportunities that really exists every day and we're constantly challenging ourselves are we thinking about that properly as you highlighted Becky there's also do we acquire stock uh and and when we're looking at companies do we acquire whole companies also”

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Greg AbelInterview2026-03-05

Squawk Pod: Berkshire's New CEO Greg Abel — 03/05/26

“um and then there's the do we acquire equities other equities and we as we've highlighted we always look at That is very similarly to buying 100% or 2%. And then the third bucket where we deploy our capital is share repurchases. Each of those with the amount of capital we have are uh can be done independently. So when we're purchasing our shares, it's not taking away from any the other”

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Greg AbelInterview2026-03-05

Squawk Pod: Berkshire's New CEO Greg Abel — 03/05/26

“>> Yes. Um>> Yes. Um>> Yes. Um and and the significance is if you lookand and the significance is if you lookand and the significance is if you look at my 2026 compensation that I'llat my 2026 compensation that I'llat my 2026 compensation that I'll receive this year. What what we've donereceive this year. What what we've donereceive this year. What what we've done is and what I've done is taken the afteris and what I've done is taken the afteris and what I've done is taken the after tax dollars of approximately $15.3tax dollars of approximately $15.3tax dollars of approximately $15.3 million and reinvested it or purchasedmillion and reinvested it or purchasedmillion and reinvested it or purchased Berkshire shares with the after taxBerkshire shares with the after taxBerkshire shares with the after tax dollars.dollars.dollars.”

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Greg AbelInterview2026-03-05

Squawk Pod: Berkshire's New CEO Greg Abel — 03/05/26

“>> Correct. So, so Andrew, uh, back in the summer of 2022, uh, there was the decision to sell, uh, B, my Berkshire Hathaway Energy stock that had really accumulated going back to 1992, I think, is is the duration of uh, those holdings and and obviously we had built the energy company. were acquired by Berkshire in 2000 and then in 2022 monetized it and again with a very”

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Greg AbelInterview2026-03-05conf:medium

Squawk Pod: Berkshire's New CEO Greg Abel — 03/05/26

“different investment options that exist out there and there really are options. We're looking at these different buckets and looking for the right opportunity. But there is no need to um obviously we want to deploy the capital into areas that we see long-term value creation for our shareholders. But the goal isn't to just take down the”

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Greg AbelInterview2026-03-05conf:medium

Squawk Pod: Berkshire's New CEO Greg Abel — 03/05/26

“we see opportunity, you'll see the capital deployed and we're deploying it in certain areas across our businesses, across certain repurchases of our shares, across other equity opportunities, but the re the repurchase of our own shares is a great example is that uh Warren and I were just talking about discussing this yesterday. Uh you we wish we could purchase more shares of”

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Greg AbelInterview2026-03-05conf:medium

Squawk Pod: Berkshire's New CEO Greg Abel — 03/05/26

“>> Yeah, Warren and I pretty much he's in>> Yeah, Warren and I pretty much he's in>> Yeah, Warren and I pretty much he's in the office every day. Uh so we'rethe office every day. Uh so we'rethe office every day. Uh so we're talking every if I'm in Omaha, uh we'retalking every if I'm in Omaha, uh we'retalking every if I'm in Omaha, uh we're always connecting. If I'm traveling likealways connecting. If I'm traveling likealways connecting. If I'm traveling like I was yesterday, uh I often check in uhI was yesterday, uh I often check in uhI was yesterday, uh I often check in uh just to just to catch up on what he'sjust to just to catch up on what he'sjust to just to catch up on what he's seeing, what he's hearing, what am Iseeing, what he's hearing, what am Iseeing, what he's hearing, what am I feeling. Uh so if it's not every day,”

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Greg AbelInterview2026-03-05conf:medium

Squawk Pod: Berkshire's New CEO Greg Abel — 03/05/26

“Yeah. And that's really, as you know, we we have our dividend policy in place and the and the thought and it's reviewed and approved by our board again on an on an annual basis and one that Warren has put forward every year. And we've we've maintained that that we will retain a dollar if we see the opportunity to create more than a dollar for our shareholders. And that's been the test. And we uh and as long as we meet that test, we would continue to hold the dollar because we believe we can create value for our shareholders long term. Now, incremental to that, we do see the repurchases as an opportunity”

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Greg AbelInterview2026-03-05

Squawk Pod: Berkshire's New CEO Greg Abel — 03/05/26

“some challenges in Texas and the Midwest that, you know, it's not a an issue just to the west, but you can see it it creeping. What we see is a bigger issue in the regula in the uh utility industry and that is does the regulatory compacts continue to exist and by the regulatory compact I mean we deploy capital into these businesses we we receive a return that's reflective of us taking a certain amount of risk”

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Greg AbelInterview2026-03-05conf:medium

Squawk Pod: Berkshire's New CEO Greg Abel — 03/05/26

“Absolutely. So, those are there's those the shoes to fill are tough on all fronts, but Warren's an exceptional communicator and how he does it. So, to take the letter and really want to make sure we're communicating to our again to our owners and shareholders that's something that they would value it. It it was not easy. Yeah,”

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Greg AbelInterview2026-03-05

Squawk Pod: Berkshire's New CEO Greg Abel — 03/05/26

“then translated for the 12-month results is that yeah our insurance results were down. You can see a lot of capital coming into the industry. we're going to we or our team uh Jetton and his team will continue to apply the discipline that um the price and the risk have to be right for us to write a policy. So as we back out of that with capital coming in, you'll see those results uh be what they are relative to uh how much capital we deploy into it. Um so that had a significant impact. And then the other piece of that is we did across our non-insurance businesses take a $ 1.555 billion um impairment”

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Greg AbelInterview2026-03-05

Squawk Pod: Berkshire's New CEO Greg Abel — 03/05/26

“All of them.All of them.All of them. All of them. We've we've got, you know,All of them. We've we've got, you know,All of them. We've we've got, you know, my wife's from Iowa State. I I havemy wife's from Iowa State. I I havemy wife's from Iowa State. I I have allegiances with Nebraska because my Iallegiances with Nebraska because my Iallegiances with Nebraska because my I mentioned earlier my one grandgmentioned earlier my one grandgmentioned earlier my one grandg grandfather was born in Unadilla,grandfather was born in Unadilla,grandfather was born in Unadilla, Nebraska. I've always followed the cornNebraska. I've always followed the cornNebraska. I've always followed the corn Oscar. You name it. I've got a spectrumOscar. You name it. I've got a spectrumOscar. You name it. I've got a spectrum of teams and and my family reminds me ofof teams and and my family reminds me of”

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Greg AbelMeeting2025-05-05

Afternoon Session - 2025 Meeting

“Well, Ward is obviously a remarkable teacher, and I benefit from that every day. And as I've already touched on for many years, I'm fortunate that if I had to be remembered as something right now, obviously, I want to be remembered as a great father, but equally a coach. And that goes to family, friends, and just being involved with the kids I coach in hockey or baseball or whatever it may be. I think we've got a great opportunity to get back to them at a very young age. So obviously those would be. how I'd want to be remembered, and hopefully that'll be many, many years from now. But I love thinking of Warren truly as a teacher and he's in every day get the opportunity to continue to learn.”

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Greg AbelMeeting2025-05-05

Afternoon Session - 2025 Meeting

“Warren and I, his dialogue is strong every week, and we're always talking around opportunities in Berkshire or things that are going on globally or in the U.S. and each one's a truly a learning moment. I'll maybe go back to the very first meeting with Warren, and because it still stands out in my mind, obviously, it was an incredible opportunity. Warren was buying or acquiring Min American Energy Holdings Company at that time or thinking about it, and I had the opportunity with my partners to go over there. They're on a Saturday morning and we're discussing the business, and Warren had the financial statements in front of them. And like I came by, I was sort of expecting a few questions on how the business was performing or a variety of things, but Warren locked in immediately to what was on the balance sheet, and that fact, we had some derivative contracts, the weapons of master's. construction. And associated with the utility business, we do have them because they use them to match certain positions and they're never matched perfectly, but you do have them and were required in the regulated business. But I just remember Warren going to it immediately and asking the composition of it and what was the underlying risk in it and wanting to thoroughly understand it. It wasn't that big of a position, but it was absolutely one of the risks he was concerned about as he was acquiring Min American and obviously in light of Enron and everything that had gone on it was a very pertinent question and then the follow-up to that was then there's an energy crisis in the U.S. around electricity and natural gas and a variety of folks who were making significant sums of money. This is a year, 18 months later. And Warren's follow-up question, a couple years later to me, was, and I knew it was more just checking or testing, so how much money are we making during this energy crisis? Are we making a lot? Do, you know, do we, are the speculative positions in place, and are we making it? The answer was, we're really not making any more today than we would have been six months ago, because all those derivatives were truly to support our budget. business and weren't speculative. So just that focus on understanding the business of what he was acquiring, understanding the risks around it still stand out in my mind. Warren?”

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Greg AbelMeeting2025-05-05conf:medium

2025 Annual Meeting Highlight Reel

“I would say that I'll speak for Greg beyond me that I'll in the next 50 years and I'll be running things and we won't give a thought to the selling those. And I think the thing we're building with the five, five companies is one, it's been a very good investment, but we are really, as Warren touched on, we envision holding the investment for 50 years or forever, but I think we also are building relationships to do things with each of those companies. And we really do hope to do big things with them globally.”

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Greg AbelMeeting2025-05-05

Afternoon Session - 2025 Meeting

“Um, this bar is not too high. No, it's, uh, but very fortunate when you think of Berkshire, again, and we've, we've talked about this, where we start from, and I'll clearly touch on the, uh, investment, the related investment allocation, but we start from a great place where we've got a, a great culture within the business. We have values that we, as a management team and, and, and really, as defined by Warren and those, Charlie and everybody associated with the business, we've got great values that really set Berkshire up well for the future. And obviously, as we deploy capital and allocate capital, it's critical to Berkshire as we go forward, and equally it's around managing risk. But when I think of our, our values, there are a couple that are absolutely critical. One, we'll maintain the reputation of Berkshire and that of our company. And I view that in investing or how we operate things across each of our businesses. That will always be a priority in something that will ensure is in the forefront of our minds. I think equally as we then look at our various, our back to Warren's bound sheet comment, we will have a fortress of a bound sheet. And we want to, I thought Sue Decker, our lead director said it well yesterday, we've got a, we've got a significant set of cash right now, but it's an enormous asset to have that. And that will come. And that will continue to be a philosophy. Yes, when we can deploy it, we'll deploy it well, and I'll come to that. But equally, we do recognize it as a strategic asset. And it allows us to weather the difficult times and not be dependent on anybody. So again, that will be an investment philosophy. We will remain Berkshire and we will never be dependent on a bank or some other party for Berkshire to be successful. I would thank you I would then move to to to touch on allocation of capital be absolutely critical but with that comes management of risk and understanding risk and that falls upon all our managers insurance, not insurance, but we'll bring that across Berkshire. And then the other value I would touch on, but that really relates to where I'm going, is ultimately we have a great set of operating companies that do produce significant cash flows, be it in the insurance companies creating float or various non-insurance companies producing significant cash flows on an annual basis. We intend to continue to ensure that's”

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Greg AbelMeeting2025-05-05

Afternoon Session - 2025 Meeting

“strength of Berkshire as we go forward. It's absolutely critical to our to our long-term success. Now, with those cash flows and with the float, and then equally as touched on, we have significant resources already on our balance sheet. We'll really continue to move forward with a very similar philosophy. It's an identical philosophy to what we've had currently and for the past 60 years. We'll start by looking at those opportunities within our business and by that I mean within our insurance non-insurance businesses are they are they properly capitalized and have the opportunity to manage their business and that that will continue to exist they'll operate in an autonomous way but in the end Berkshire still manages the capital that will go into that those businesses or what potentially will come out of those businesses Equally, the next opportunity is to acquire businesses in their totality, or 100%. And there are great times when we can do that. Warren touched on. We had one that was interesting in the last quarter, the $10 billion acquisition. But again, the value relative to the risk have to be right. And if it's right, we want to own it. If it's not the time, there'll be another time to own assets like that. And then there's the opportunity to own pieces of companies through the equity. But as Warren's always highlighted, and again, this will be our approach to how we think around those companies. We own a piece of a company. We own a piece of that cash flow. We own a piece of their balance sheet. It's not just a share certificate. And as we approach that, we approach that and really we'll approach it with the thought that we're going to own this company for the long term. It's, again, understanding what, be it the 100% company or the 1% company, do we thoroughly understand, and thoroughly, do we have a strong view of what those economic prospects of those companies will look like? And Warren said it earlier, five years from now, 10 years from now, 20 years from now. If we don't have a view of a view of of that, we won't be investing, be it 100% or 2% of a company through equities. We have to thoroughly understand what those prospects look like. And associated with understanding those prospects, we need to understand the underlying risk of the businesses. And it's really the investment philosophy and how Warren and the team of allocated capital, for the past 60 years, you know, really, it will not change, and it's the approach we'll take as we go forward.”

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Greg AbelMeeting2025-05-05

2025 Annual Meeting Highlight Reel

“Well, we've got our managers over there, and I would say going back to 2018, it's been a, it's been very fortunate being this role because, one, I had to learn a lot of the businesses. And there's no question. And as Warren bought the businesses had that general knowledge, I absolutely had to engage with each of them and they've been great in sharing their business models, their approach, their thoughts around where the risks and opportunities are. And I think as we went through that, there's no question. I had questions and wanted to engage with them. I would say more active. But hopefully in a very positive way, and we've got an exceptional group. So it's worked out exceptionally well as I've gone through that period of time.”

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Greg AbelMeeting2025-05-05

Afternoon Session - 2025 Meeting

“Yeah. And I think these are very unique in that, not unique in that it's sort of reflective over where we're at. There will be very significant investment opportunities across a variety of industries. As Warren touched on in the electric, in the electric industry or the energy space,”

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Greg AbelMeeting2025-05-05

Afternoon Session - 2025 Meeting

“obviously know that well with our existing business. And the capital required to meet the long-term needs of what's currently projected as demand is enormous. And we, as Berkshire, will be in a good position to help address those needs. But the model around it and the risks that need to be addressed to deploy that type of capital will be, we'll be be different than they are today, Warren's point. Yeah, the muscle of the federal government will be needed, but the test of whether you can have 48 or 50, depending on the nature of things, jurisdictions that are cooperating to do something that has opposition, we'll have opposition in every single state. If they'd taken a voter during World War II, or they'd taken a vote on the, you know, the, you know, the, you know, the interstate highway system, it had, it would have been slowed down to an incredible degree. So the question is how to use these strengths that this country has to actually turn it in to what it should be capable of while self-preserving, you know, a republic with 48 and connected in a couple unconnected states. And it is, it'll be interesting to see what happens. But we do have capital and we actually have some knowledge that very few places have. I mean, we know what the game's about. But putting together that energy with knowledge and with capital and everything is just not easy. And it should be something that we're capable of in the country. But the country was not designed for having in a certain way it was not designed for having 48 different jurisdictions that could mess up anything that you were attempting to do. And during wartime, it's one thing to get agreement. But during peace time, it's something, it's a different problem. That's going to be one for the next generation. But I'm just, it's important.”

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Greg AbelMeeting2025-05-05conf:medium

Morning Session - 2025 Meeting

“Yeah, when you think of the five, there's definitely a couple meetings a year, Warren. And I think the thing we're building with the five, five companies is, one, it's been a very good investment. We are really, as Warren touched on, we envision holding the investment for 50 years or forever, but I think we also are building relationships to do incremental things with each of those companies. And we really do hope to do big things with them globally. They bring different perspectives and different opportunities, and we see, and that's the, that's why we're building that long-term relationship with them. It's super long-term, and they have a much, they have a, They have different customs. They have different approaches to business. That's true around the world. And we don't have any intention in any way of trying to change what they've done because they do because they do it very successfully. And our main activity is just to cheer and clap. And that, I can still do it 94. So we will own those, you know, we will not be selling any stock. I mean, that is just, it's, that will not happen in decades if then. And my guess is that they will find things, because they cover the world pretty much, the five trading companies.”

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Greg AbelMeeting2025-05-05

Afternoon Session - 2025 Meeting

“Yes, well, I think your dad said it best. He highlighted that to become part of Berkshire, to own, to own some Berkshire, to own some Berkshire. your shares, you're going to have to work hard. And I think hard work takes all of us a long ways in life. And I would never diminish that, you know, there's a lot of things that matter in life, but if you start with a great work ethic and have that attitude that you want to contribute, you're going to go a long ways in life. And that'll, and you'll find great enjoyment because, as Warren said, you'll then, if you work hard, you're going to find the things you'll in life and it'll lead to that. And we truly look forward to the day you're part of Berkshire. Thank you.”

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Greg AbelMeeting2025-05-05conf:medium

Afternoon Session - 2025 Meeting

“Well, that's a very good question. And we've made some mistakes in the past. When we bought Pacific Corp in 2000, what, five? Yes. Warren, Scott and David Salko and myself, three guys who, capitalists at heart, we're dealing with our own money, but we made a mistake by not carving. bringing up into the seven states that we were buying. And it came with an aggregation where it wasn't state by state. And we kept the same structure. And that was a big mistake. A part of the country is going to need electricity. And there are going to be places where public electric or privately held electric utilities would be very fully fully to operate and how it gets resolved in a democracy, we will find out. But those are the facts as they stand now, I would say, Greg.”

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Greg AbelMeeting2025-05-05

Afternoon Session - 2025 Meeting

“goes up each year. So, but what we can do to reduce the risk of it impacting our system and our underlying assets and the, unfortunately, the liabilities that come with such events, we can change that and manage that. We can't eliminate the risk, but we can reduce it. And that's where we've got our teams in the, in the West, but we really are approaching it across all our energy infrastructure because the railways, the wildfires have now occurred in Texas. They've had a variety of variety of them throughout the U.S. and we're all very focused on how we manage that risk. How we manage it is we start by addressing the actual assets, how we're maintaining them, and where we invest them, invest into them. So we try to make sure that they're either not causing the fire or potentially even hardening the system as to what can they withstand. So it's very much, we start with the operational focus. We then take it even further, and this is something Warren and I've discussed many times, is that the utilities started to recognize when we have these unusual weather events and Warren touched on what's been happening in Nebraska with storms, but they're equally occurring or significant events occurring out west. But when we have those, we've gotten very, very good at saying, okay, we have to manage the system different will potentially de-energize because there's likely to be an event. But the one thing we hadn't tackled, and this is very relevant to the one significant event we had back in 2020 in Pacific Corp, is we didn't de-energize the system as the fire was approaching. Because our employees and the whole management team have been all their lives trained to keep the lights on. And the last thing they want to do is turn those lights off and have a system de-energized. And after those events and as we really looked at how we're going to move forward in managing the assets and reducing that risk, we have clearly recognized as a team that we have to de-energize those assets. So now as we get fires encroaching at a certain number of miles, we de-energize because we do not want to contribute to the fire, or obviously harm any of our consumers or contribute, unfortunately, if there's a death. And that's really where we had to take our team, that we're managing a different risk now. It's not around keeping the lights on, it's around protecting the general public and ensuring”

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Greg AbelMeeting2025-05-05

Afternoon Session - 2025 Meeting

“We've, you know, fortunately that's something that we do deal with a lot because we have power outages that occur by accident. So when we look at critical infrastructure, because it's an excellent point, and we're constantly reevaluating it, and we do receive a lot of feedback from our customer groups as to how do we manage that? But that is something we deal with on a more routine basis than we'd ever like. The lights go out. We have to make sure the hospitals stay on. Emergency units can respond and all that. But there is risks there. So then we spend a lot more time educating the consumers in our consumer groups, our customers, okay, this is what will happen. We need to understand your unusual situations. And how can we best tackle that again, so we just don't take on another liability. another liability. So there's a lot around de-energization. And then just to take it to the last step, and Warren's touched on that, just in general, on energy policy, we have to work with our states and our regulators to ensure this was never a risk we took on or envisioned when we were investing in utilities, nor would any of the investors who've invested in other energy companies. You were, you earn a very set return for taking on a very set defined risks associated with that asset. And this has gone well beyond that. We don't earn the type of returns, nor can you earn a large enough return to take on these risks. So it's not just solving the return side. We really have to solve the risk side, which means we work with our regulators. We're working with our state legislators to get to the right answer. And that's really just really just, that'll be an ongoing process. There are not silver bullets out there, but every day our teams across utilities are working hard to reduce that risk, recognizing the fundamental risk of the wildfires is not going away. But there's some problems, yeah. There's some problems that can't be solved. And we shouldn't be in the business of taking your money, investors' money, and tackling things that we don't”

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Greg AbelMeeting2025-05-05

Afternoon Session - 2025 Meeting

“But it's getting, again, if you look at the risks, it's there, we have to manage through things like that. We'll get through that litigation. We're happy to report, for example, on that one. After five years, the Oregon Forestry Department has come out and said the fires, the other fires we did have that we were able to manage and extinguish, did not contribute to that fire. And that fourth fire is the largest fire of the fort. It's 60% of the claims. We're five years into effectively getting that information into the courts. Now, that will outline our legal strategy, obviously, going forward, but it's things we're dealing with. But we continue to learn from this as a utility industry. So we're in very much each of the legislatures, as I said, making sure we get clear definition where liability falls, what can the economic damages be, but most importantly, what can the non-economic damages be? And again, with the thought, we can't be the insurer of last resort. We just can't be responsible for everything that happens in a state. Yeah. If we want to do it with our own money, we can do it, but we're not going to do things with your money that we think are stupid. You ought to get rid of us if we do it. And it's easier to do stupid things with other people's money than it is with your own money. That's one of the problems government has, just generally. We don't want to bring it to private enterprise. It is important that the United States have an intelligent energy policy, just as it was important during World War II that we learned how to make ships. instead of cars, extremely fast. And we figured out the answer. We combined private enterprise with the power of the power of government. And how feasible that is in a democracy. And, you know, it was clearly obvious during World War what needed to be done. And we did it. But it's not so clear clear when. When you get 330 million people all arguing their own self-interest and, of course, deciding what will happen. And having the people often who are making the decisions reacting as they did 20 years earlier, you know, when they don't really bear the responsibility for the decision. Anyway, that's management. And we'll do our best.”

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Greg AbelMeeting2025-05-05

Morning Session - 2025 Meeting

“Greg, you. Well, Warren, I was going to add, as you're being patient, I happen to know, and I think that goes for our Ajit also and all our managers. Very patient when we're looking at opportunities. And as you touched on, we want to. act quickly. But while we're being patient, never underestimate the amount of reading and work that's being done to be prepared to act quickly. Because we do know, be it”

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Greg AbelMeeting2025-05-05

Morning Session - 2025 Meeting

“Nothing to subtract, but, uh, I would always just say it couldn't be more, as I've said in the past, more humbled than honored, obviously to be in this role. But to, uh, to, to, to, to, to, to, have actually been part of Berkshire for Warren. It's now 25 plus years had the opportunity to be part of Berkshire and to work with you and Ajit and our board, but many other people in our company. And as you touched on, um, when you find something like that and you find something like that, like Berkshire that's so special, it's, it's, you fall in love with it and it's, it becomes just what you want to do every day and it's just an incredible opportunity. So thank you.”

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Greg AbelMeeting2025-05-05

Afternoon Session - 2025 Meeting

“and it i i would say going back to 2018 it's been a it's been very fortunate being this role because one i had to learn a lot of the businesses and there's no question as uh warren bought the businesses had that general knowledge general knowledge I absolutely had to engage with each of them and they've been great in sharing their their business models or approach their thoughts around where the risk and opportunities are and I think as we went through that there's no question I had questions”

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Greg AbelMeeting2025-05-05

Afternoon Session - 2025 Meeting

“and wanted to engage with them and Warren talks about the curiosity being important as you go through things that would be my style to have questions and comments around their business their frameworks at the same time they have great businesses and they run them very autonomously and that that remains in place but if there's opportunities to see where maybe you've seen something in another business or an opportunity i may see in their industry we're going to discuss it and see if that's something we should pursue or are we properly addressing the risk and i found all our managers to be absolutely engaging on that and want to have those dialogues and i'd say that's a reflection of of my approach i'd also say that um when you think of our managers again very autonomous they they run their businesses they know it better than i ever will but if i see an opportunity that it's well worth their time to talk to another one of our managers if it's geico and they've gone through a technology transformation they're not by themselves that need to be thinking that way we want to make sure the right folks are talking and figuring out how we can benefit from the prior experiences so it's i would say more active uh but it hopefully in a very positive way and we got an exceptional group so it's worked out exceptionally well as uh as i've gone through that period of time”

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Greg AbelMeeting2025-05-05

Morning Session - 2025 Meeting

“I was just going to say that, relative to the question, that there's no question we were fundamentally very comfortable with investing in the five Japanese companies and recognizing we're investing in yen. The fact we could then borrow in yen, was a almost just like a nice incremental opportunity. But we are very comfortable both with the Japanese companies and with the currency we would ultimately realize, i.e. in the yen.”

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Greg AbelMeeting2025-05-05

Afternoon Session - 2025 Meeting

“Thank you for your, both your question and your comments, because it is, it is a important to understand, say, Berkshire Athaway Energy, but also how they operate. And maybe using Iowa, at least as a starting example, because I think that was one of the states”

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Greg AbelMeeting2025-05-05

Afternoon Session - 2025 Meeting

“cited in the report. One of the important things that I'd say early in us acquiring our energy companies, and I go back to when we acquired Mid-American, we acquired, we acquired We hired it in 1999, purchased Mid-American in 2000. Well, one thing that became very clear to myself and our teams was that what we do within our utilities is really driven in two fronts. One, we absolutely have to meet the requirements and the law that's laid out federally. But most importantly, we had to recognize we implement public policy across these states. these states. And that was an interesting conversation when I go back to Iowa. And again, the report cited that as a significant problem. It was early in the 2000s when, for the first time in Iowa, we were going to, as a utility, be short power. So we didn't have the energy. And we entered into a significant discussion with our governor at the time. And And really sat down and said, where do you want us to go as mid-American? And what resources do you want as a state? And at that time, we were predominantly a coal-based state. And we recognize that, obviously, and fundamentally, personally, viewed it as a risk. But we needed to have that conversation with our state. And as to how we would manage that going forward, the interesting thing was that as we had that conversation in the early 2000s, again, with the leadership of our state, it was clearly decided we wanted to continue to be long power, so i.e. not be short for our customers. We discussed the type of resource, and I remember a very clear conversation around we wanted to stay bound. across a variety of energy sources. And at that time, it was really coal and natural gas. And at that time, we made the decision to build the largest wind project in the U.S., in Iowa. So we undertook an effort to build three resources, a coal plant, a gas plant, and a what was the first wind project we owned in minimum American. And again, it was very consistent with what the state wanted, but we also laid some important groundwork there because we started to define the importance of renewable energy, non-carbon resources, but it has to be consistent with what the state wanted. And we've gone on over the, since that period of time, to deploy $16 billion into Iowa, associated with renewable energy. Again, very consistent with what our state wanted us to do, i.e. the underlying policy, we don't get to make that decision and just spend $16 billion.”

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Greg AbelMeeting2025-05-05

Afternoon Session - 2025 Meeting

“It's done in conjunction with our governors, our legislatures, our regulators, and at the same time, we've had the opportunity to retire five of the 10 coal units. Now, as the report highlighted, I, I, I understand people would like those other five coal units retired at this time. But to think we deployed 16 billion to retire five, and it's a very good outcome for our customers. We've been able to maintain our rates, they're the, some of the lowest in the country. So it's been done very efficiently, but the reality is we still need those five coal units to keep the system stable. We cannot have a Spain-Portugal situation. So we absolutely respect the input. We absolutely respect the process, and we'll continue to work with each of our states to identify the path they would like to chart, and we work hard to ensure there's good, balanced outcomes because we recognize the challenges they're associated with other folks' desires. So I think you'll continue to see our utilities implement policy consistent with the needs of their stakeholders or customers, and at the same time always respecting what's required by any of the federal standards. So thank you for your comments. Okay, 31. Let's see. Becky.”

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Greg AbelMeeting2025-01-08conf:medium

RARE Charlie Munger 2017 Daily Journal AFTER Interview

“And just sitting on our ass, all these little mirrors sit out there in the field. You have to polish them once in a while. And they'll get better, but they won't get 50%. They'll get, there's a limit to how much better they can get. And the first one we had, they track. had, they track, not at all, they just lay there. The second one, they track east to west, but not from the celestial stuff that goes on, changing the seasons. The next ones will be pointed right of the sun through every kind of that. And they, oh, it makes, but there's a limit to how efficient that stuff can get. On the other hand, since it's free and coming in from the sun and doesn't pollute, and there's a lot of worthless desert in the United States, it's a pretty sensible. it's a pretty sensible way to get power eventually. So, of course, there's going to be more and more of it.”

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Greg AbelMeeting2025-01-08conf:medium

RARE Charlie Munger 2017 Daily Journal AFTER Interview

“Well, people try and make money out of that crap. I am very skeptical about all this home stuff. That works if the utility will pay twice what the power is worth. Then you can reduce your electricity bill. Well, why should the utility pay for twice what the power is worth? twice what the power is worth, you know. And so we think it's more efficient to have some big place like us create the solar and just out of the utility.”

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Greg AbelMeeting2024-05-06conf:medium

2024 Annual Meeting Highlight Reel

“I mean, if we do something really big, it's extremely likely to be in the United States. Will Berkshire, through BHE, continue to invest resources and jurisdictions where corporate assets may be subject to confiscatory state policies and actions?”

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Greg AbelMeeting2024-05-06

Afternoon Session - 2024 Meeting

“Without directly answering the question, I think there's one important thing is I think as we go through any transition, it's important to know that the capital allocation principles that Berkshire lives by today will continue to survive one. And I think that's what the thing I'd want to communicate that we have our operating businesses, insurance, not insurance. We're going to cap that we'll provide them the capital necessary to be successful and grow if it's appropriate. At the same time, we're expecting a return of capital from them when they have excess cash. And then as we've discussed, or you've touched on always looking at potentially new businesses as a whole or in a piece. And as you've always highlighted, and I fully agree, we'll always look at equities as we're investing in a business, either 1% or 100%, but we're looking at the business. We're looking at the economic prospects of that business and how sustainable it is and what it will look like 10 years from now is the capital we originally put in at exponential risk or where is that risk set, that profile? And then of course, and then we'll obviously have our continue to always put excess cash in the safest investment there is in U.S. Treasuries knowing we want to maintain that fortress of a balance sheet for two reasons. One to act, but also to always protect our shareholders. If we have a, we want to maintain that. the position Berkshire is in now, realistically for the, to insure it, to insured in jurors.”

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Greg AbelMeeting2024-05-06

Afternoon Session - 2024 Meeting

“Yeah. So absolutely, in 2019, we saw TechData as a unique opportunity when we saw the other bid and the underlying value of that distribution business. We did, Warren and I were talking, others made the conclusion. We should talk to management. We talked to the team. They were very interested in Berkshire being their long-term owner. And we still saw a good value in the opportunity. And we had a good understanding of distribution. businesses. We have TTI. It's not exactly identical to tech data in that they're very specific to the who their customers are and who they serve and supply and who they purchase from. Because on the distribution side, it's important to have that input coming in from folks you want their product and you know it's needed on the other side that there's demand for it. And they had an excellent model. If you think of TTI, for example, that warns talked about Paul many times and the person who founded this business.”

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Greg AbelMeeting2024-05-06conf:medium

Afternoon Session - 2024 Meeting

“But it's a unique business in that our revenues on that business is approximately $10 billion. The average part they sell is a little over $9.9.5 billion parts go through their warehouse every year. But it's a model that if you have the right people on both sides of the equation and you understand that well, there's a unique opportunity there. And that is something we saw in tech data. And as Warren highlighted, we made our bid. Unfortunately, it was then taught by the original bidder and we moved on. But we thought very highly of it. Yeah, we've probably seen at least five of them in aggregate. over the last three or four or five years. It's not a business that you can dream about because it's a decent business. But, for example, in many of the items, the manufacturer just, they don't want to tie up their capital. You tie up, if you have, you know, a million plus SKU, this is the whole stockkeeping is. It's like selling jelly beans or something like that. And you do, you're serving a purpose to a degree, but you don't, you don't really, it isn't your product in effect of it. I mean, you're just a good system for the producer of the equipment to get it to the end user without tying up a lot of capital. Right. Being in a business, they don't want to be in. And so we understand it. We, we, we, we, we, but there's no magic to it. There was a, with TTI, you had a marvelous man running things. And he, you know, and he's, and he, he, he, he, he, he, he, he, he, he, he, he, he, he, he, he, he, he, he, he.”

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Greg AbelMeeting2024-05-06

Morning Session - 2024 Meeting

“It's a sensible rate of return, but we won't do it if we think we're not going to get any return. It'd be kind of crazy. And we've seen actions in a few states where some of the costs associated with climate change. You're not being regarded as cost of the utility shouldn't incur. Well, believe me, if it was publicly owned, they would have incur it too. But we will do what society tells us, and we have got the money, and we've got the knowledge to participate big in something that is enormously important for the country. But we're not going to do. do it. We're not going to throw good money after after bad and the field. I don't worry about, my understanding is, and Briggs can elaborate on this now immediately, but I don't regard Utah as being unfriendly to the idea of utilities being treated fairly.”

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Greg AbelMeeting2024-05-06

Morning Session - 2024 Meeting

“Yeah, when we, well, Warren, you touched on it initially in your letter, relative to the challenges in the industry, and then you've just alluded to the significant investment that has to go into the energy industry, the utility sector, for many years to come. And I think if we start there, if I think of our different utilities, it will definitely come to Utah and Pacific Corp. But if you look at the underlying demand that is building in each of those utilities and the amount of dollars that are going to have to go in to meet that demand, it's absolutely incredible. So when you raised it in your letter, it's a really important issue. We have to have a regulatory compact that works between if it's a public utility, it has to work in concert with the state, Utah being an example, or it ultimately becomes potentially a public power entity. So just to set the frame a little bit, if I think of Iowa, which you mentioned, and the underlying, we've made substantial investments there, it's been very consistent with both the public policy that the state and legislator wanted, and they enacted very specific laws to encourage that. But that utility is more than 100 years old right now. And if we look at the demand that's in place for mid-American Iowa utility over the next, say, into the mid-2030s, associated with AI and the data centers, that demand doubles in that short period. a time. And that happened, and it took 100 years plus to get where we are today,”

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Greg AbelMeeting2024-05-06

Morning Session - 2024 Meeting

“and now it's going to double. And for, and that will require substantial amounts of capital from the, from mid-American and its shareholders. And how that will function is if we have a proper regulatory compact in place, which, which you've highlighted. If we then go to, say, Nevada, where we We own two utilities there and cover the lines here in Nevada. If you go over a similar time frame and you look at the underlying demand in that utility and, say, go into the later 2030s, it triples the underlying demand. And billions and billions of dollars have to be put in. Our rate base will literally go from, it's not a model. level now, but you're talking probably an incremental $6 to $10 billion, at least of rate base, going into that type of entity, which requires, again, alignment with the state and their policies and a proper recovery of our underlying both capital and a return on capital. So when we come to the wildfires, that's been a substantial challenge because it's the first time there's been a lot of discussion around one of our utilities, one, experienced significant losses associated with the wildfires. What portion of those costs will be recovered? And that's really the dialogue we're in, and does that properly, properly work. When I think of the wildfires, there's been many claims in a recent additional claim last week for... $30 billion, and it's, we don't take that lightly, but it is an incremental claim to an already existing lawsuit that's in place. And when I think of Pacific Corp, we're in a place where, first and foremost, all the litigation will be challenged because the basis for it, at least we believe there's places where it's unfounded and will continue to challenge it. And it will take. many years to be resolved as Warren highlighted in the letter. But if you think of Pacific Corp and the litigation there, number one, how we think can operate those assets have to change. Because we've had a regular, we have worked with the states across all our states for many years with the fundamental goal to be to keep the power on. And our teams and our employees worked incredibly hard to keep the power on. on day in, day out, through storms, unfortunately, through the 20-20 fires. The instincts were not to turn off the power. The instinct was to keep the power on to keep hospitals, fire stations responding. It's not in their mind, or at least culturally, it wasn't in our minds”

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Greg AbelMeeting2024-05-06

Morning Session - 2024 Meeting

“to de-energize. So the first thing we had to do was step back and say, we've got to fundamentally change the culture, not just at Pacific Corp, but across all our utilities. The first thing we have to recognize is that there's now going to be situations where we prioritize de-energizing the assets. And that's completely different than how we've operated those assets, as I've highlighted for 100-plus years. So we start with the culture. We had to change that. The second thing is we've now changed our operating systems so that we can turn off the power very quickly if there's a fire that's encroaching. We will turn off our systems now and we'll go the minute the conditions are safe again, we'll re-energize it, but we've had to do that. And then the third thing is continuing to invest in a way that allows us to try to minimize the risk of the fire. But when you get back to Utah and Pacific Corp, the chance The challenge we do have is within Pacific Corp, as we go through both litigation and through continuing to operate that entity, it generates a certain amount of capital and profits that will remain in that entity and be reinvested back into that business. But fundamentally, as we go forward, we need both legislative and regulatory reform across the Civic Corp states if we're going to deploy incremental capital, make incremental contributions into that business. As Warren said, we don't want to throw good capital after bad capital. So we'll be very disciplined there. But the reality is there are opportunities to both solve the legislative and regulatory solutions. And the best example we actually have, and I think it's the gold standard. across the country is Utah. So as Warren touched on, it's a state we're happy we're investing in. It is part of Pacific Corp, so there's a certain amount of balance there as to how we do it. But in the last legislative session that existed, Utah actually passed a bill that does a couple very important things. One, it caps non-economic damages on wilds. fire claims. So if you go back to the wildfires we have in Oregon and the claims you're hearing filed for, there's economic damages associated with them and those harms should receive the economic damages associated with that. But unfortunately, and even though there's legislature and case law in Oregon that says wildfire, non-economic damages should not be awarded, there's very substantial non-economic damages being awarded there.”

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Greg AbelMeeting2024-05-06

Morning Session - 2024 Meeting

“Utah took a very proactive position to say, we will cap those non-economic damages. And it creates an environment, again, it's back to that, is there an environment where you want to invest in? Yes. And then incrementally, they've created a very substantial fund. It's literally called the wildfire fund for fires in Utah that will help facilitate. facilitate both liquidity and the ability to resolve the situation. So Utah, we believe, including the legislation, that a lot of other things came out of it, is the actual gold standard as we go forward. So very important issue for Berkshire Hathaway Energy, but at the same time, it is a Pacific Corp issue. The risk of regulatory compacts not being respected as much more. it's a much broader one that will always evaluate and be careful how we deploy our capital. But both Pacific Corp will manage through it, and I see other very good and significant opportunities in Pacific Corp. I mean, in Berkshire Hathaway Energy. The return on the, return on equity investment, it's been promulgated and been achieved over the years, has been, particularly in recent years, well below the return on equity that has been achieved by American industry generally. And so whether you earn X or X plus a half a percent or X minus a half a percent, that differs by state and some states are more attractive than other. But whether you earn X or go broke is not an equation that works. And, you know, we won't put our shareholders. Money, they didn't give it to us to lose it all. And we might like it if it's better when it's X plus a half a percent, the next minus a half a percent. But the electric utility industry will never be as good as, I mean, just remotely as good as, you know, the kind of businesses we own in other arenas. I mean, you look at the return on tangible equity. at Coca-Cola or American Express or and to really top it off, Apple. It's just, you know, it's just a whole different game. But in utilities, the trade has been, the compact has been that you get a modest has been that you get a modest return. And climate change comes along and it causes away more fires. That's just a cost of doing business. And it doesn't mean that we can't do things to mitigate fires in the future. And you can make different policies on when you turn off the lights. But somebody's going to do, somebody's going to put up many, many hundreds of billions, maybe in the trillions.”

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Greg AbelMeeting2024-05-06

Afternoon Session - 2024 Meeting

“Sure. Yeah, the, the, the, uh, Warren touched on it and the comments from the, um, the, the comments from the, as reflected there are very accurate. If you look at this quarter's results or our last year's results, they were both, they're disappointing as shareholders and disappointing in the relative to the other class one railroads. And it's highlighted in the question, there's five other class one railroads. So it's pretty easy to understand how you're performing versus the others. And there's a lot of other variables, but there's some very simple things to look at. When we look at where we've been on with associated with Burlington, I would just back up a little bit because if you go back to 2021, the Burlington team and manager team and the group, we're making excellent progress on a lot of fronts when it comes to our operating and both being efficient and effective. and how we're operating the railroad. And I remember very specific comments from myself in 2022, where I commented that that was a year there was all the supply chain issues, a lot going on in the West Coast ports. Our trains were backed up in a variety of places, and we called that a reset year. And I think we did need a reset year on the operational side. But as we moved into 23, the the business cost level, cost structure, we didn't reset it to the underlying demand we are seeing. We anticipated more demand and we did not reset our cost structure. And the team's working very hard as we speak to to both reset the cost structure and allocate the cost resources where they need to be. And when you go through something like that, what we've recognized as an organization, yes, the demand of the rail will drive a certain amount of the cost, but the reality is that the rail industry, if you go back many, many years, it's flat. There's not a lot of growth in the industry. There's opportunities become”

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Greg AbelMeeting2024-05-06

Afternoon Session - 2024 Meeting

“more efficient, effective, and our margins can go up. But the reality is the demand's going to be flat, but it does move within different sectors of the rail. It can be in the consumer products, it can be an industrial, it can be an egg. But overall, it's generally going to be relatively flat. So we need to get our cost structure right, and we need to get it right both for the coming year, but for the long term. And that means it's going to be a continuous exercise. We can't stop. We can't say we've gotten far enough because our competitors and we compete with the other rails, but we also do compete with the truck industry. We have to have a cost structure that allows us to compete both. both within our rail industry and within the transportation sector as a whole. So the team at Burlington is working very hard to address the cost structure, just like we have in the past. I think one thing we do recognize when the other railroads have implemented precision scheduled railroading, there's other metrics that we have to continue to pay attention to and challenge ourselves. If we're not at their level, what are the things that are driving it? So we're going to, when they ask for specifics, I'll give you a few. We have to look at our rail yards and understand how we're managing that. We have to look at our locomotive fleet, both the size and how we're utilizing that and challenge ourselves. And we have to then go back to how we're using our employee resources and allocating them across the business. So there's a lot to be done there. Our team's 100% committed to driving to the right cost structure. that's consistent with the underlying demand in the business. And then we can't stop there is the answer. So a lot to be done, but we have a team that's absolutely engaged and committed to it. And we're going to make good progress in this current year.”

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Greg AbelMeeting2024-05-06

Morning Session - 2024 Meeting

“Yeah, well, we are fortunate to have a number of operations up in Canada. It goes across many of our operating entities, and then as Warren touched on, all the businesses that we have a piece of that we're invested in are up in Canada. So the presence is significant. We're always looking at making incremental investments there because it's an environment. We're very comfortable with Warren touched on understanding the U.S. environment, business, environment and I would put Canada equally in that bucket that we understand it and would be comfortable. And I would say the economy moves very closely to the U.S., so the results we're seeing out of our various businesses that report both the U.S. and Canadian operations aren't”

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Greg AbelMeeting2024-05-06

Morning Session - 2024 Meeting

“drastically different. And there's a few that we're on the energy side, for example, we make very substantial investments up there in Alberta. But again, it's very consistent with how that economy is growing, and I would see it being very consistent with what we see here.”

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Greg AbelMeeting2024-05-06

Morning Session - 2024 Meeting

“has set an example for a lot of people who follow. That's a great observation. Now, having said that, I will also add that our board is conscious of the succession issue not only at Warren's level, but also at my level. And every year, they have me sitting in front of them answering questions and having me share my ideas with them in terms of what would happen to the operations if I get hit by a truck. We go through the various operations we have. I review with them a short list of people I think ought to be candidates for replacing me. And in addition to that, I go a step further and identify a particular individual as the person I would hand over the keys to, if something would have happened to me. Obviously, that could subject to change, but we take this issue fairly seriously. And I think at the end of the day, as Tim Cook has proved to us, it'll be the biggest non-issue of the day. The earth will still keep revolving around the axis.”

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Greg AbelMeeting2024-05-06conf:medium

Afternoon Session - 2024 Meeting

“All we got to do is read that podcast. So we, but we do have a great set of assets there. Oh, yeah. You know, if you look at Pilot, we have 800, more than 800 stations, travel centers, and just everybody knows, I mean, the beauty of that, and there is a question regarding this morning around fuel choices at Pilot. And the exciting thing is, in the end, pilot's going to serve whatever fuel our customers need. It can be electric. It can be renewable diesel or any of the various sustainable fuels. But the point is it has exceptional locations that are on the interstate highways. Hundreds of them. Hundreds of them. And we bought an incredible franchise. And now we have a great leadership team in both Adam and his team that's around them. So we're pleased where that opportunity will go. Yeah, we've got probably the average one might be. 10 or 12 acres or something like that, zone commercial on interstates throughout the whole United States. I mean, it, who knows, but, but what was created there is amazing, too. He had a fellow that played at University of Pennsylvania, I mean, University of Tennessee, and undefeated, and came away from this football team, and you'd think, well, another football player. You know, maybe. He goes out and there may be some intermediate parts in the story a little bit, but he buys a gas station, and he turns it into something that is huge. So it's, we're really delighted with, with it, and, you know, it's, it's another kind of only in America story. And how many of us can become an all-American, number one right team, let alone start a business that goes on these sort of heights. So we feel very good about it.”

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Greg AbelMeeting2024-05-06

Morning Session - 2024 Meeting

“Greg, you want to? Sure. Thank you. So as we touched on with NV Energy even earlier, there's a lot going on there. And when I think of, there's no question, solar is a great opportunity for NV energy and we'll continue to utilize that as a resource and continue to invest in it in that utility and the other utility we have in Nevada. We're also in a point where when you think of a transition that's going on within the energy sector,”

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Greg AbelMeeting2024-05-06

Morning Session - 2024 Meeting

“we are transitioning from carbon resources to renewable resources, as was noted. But it will not occur overnight. That transition will take many years. And as we use, be it, it renewable resources such as solar or wind, they are intermittent, and we do try to combine it with batteries. But at this point in time, we cannot transition completely away from the carbon resources. So if I think of Nevada, in the next two years, our last two coal units are, well, actually in the next year, our last two coal units will retire. but we are replacing them with a new gas unit, which is truly needed to make sure that system remains reliable and available to our customers. And that's done in conjunction with the state representatives and our regulatory agencies to make sure we can serve those customers every day and every minute. We have great examples in Iowa where at times 100% of our energy comes from, wind and we're thrilled with that. And I believe we hit that, for example, on Earth Day. Every, we had enough wind that we could meet the demand of that state. But the next day, if the wind's not blowing, we need our gas resources, our gas plants to fill that gap. And really, that's the situation we still have in Nevada. So we'll continue the transition to renewable resources, be it solar in Nevada. in Nevada and wind in other areas combined with batteries. But for the foreseeable future, we do see gas being a very important resource to help maintain reliability and meet our customer needs and to meet it in an affordable way is also an important piece of that. So thank you for your comments.”

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Greg AbelMeeting2024-05-06

Morning Session - 2024 Meeting

“generally a battery right now to do it in an economical way is a four battery. And when you think of the time without the sun being available, that's a that's a challenge. Now, there's a lot of technology advancements and that's stretching out. And you throw dollars at a lot of things you can accomplish things. But the reality is that's, there's a careful balance of the reliability and also bouncing. As it was noted, the rates do matter and how much customers are paying. So delicate balance. delicate balance of both delivering reliability but doing it in an affordable way.”

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Greg AbelMeeting2024-05-06conf:medium

Afternoon Session - 2024 Meeting

“Yeah, I think when we think of AI at a lot of the business units, I mean, we're truly trying to think, how does it make us more efficient, more effective? I mean, it results in more idle time. And we're probably not thinking of the iterative AI where we're looking at very specific processes where our people can implement it and either at times it displaces the labor, but then hopefully there's other opportunities for them within the business. But I think, you know, when you think of all our businesses, I mean, we do have a heavy labor workforce in a lot of them, but I think we, at the stage we're at, as a company. company and maybe where it's at right now. It's really around how do we do things more effective, more efficiently, more safely if it involves dangerous processes. So it's, we're early innings. John, John Maynard Keynes, it was just wonderful to read and incredible mind. But in around the time I was born, he wrote a book about what could happen.”

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Greg AbelMeeting2024-05-06

Morning Session - 2024 Meeting

“As you, I'd probably add, yeah, the only thing I would add is we do have an exceptional set of managers across both the non-insurance and insurance. Yes, Warren made it incredibly easy, but so did they. It was a very easy transition because they cared deeply about Berkshire. They cared deeply about the culture, and they very much wanted it to be a success, and we're fortunate to have those managers in insurance and non-insurance. So, thank you.”

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Greg AbelMeeting2024-05-06

Morning Session - 2024 Meeting

“Well, the only thing I would add, Warren, is, and it's really how the comment started was around culture. The culture we have at Berkshire and that being our shareholders, being our partners and our managers of our business having that ownership mentality, that's never going to change. and that will attract the right managers at every level. So I think, as Warren said, we have a very special company in Berkshire, but it's that culture that makes it special, and that's not going to change.”

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Greg AbelMeeting2024-05-06conf:medium

Morning Session - 2024 Meeting

“That'll impact things, but I think the realtors will continue to be a very important part of that. And I think home services and industry will remain very relevant and then the only thing I would share with our shareholders on a broader basis is that obligation resides with home services and can be met by home services and that was an important condition because they were also pursuing Berkshire and Berkshire Hathaway Energy and we said you can pursue us separately but that settlement will reside with home services and be an obligation of that and they decided the the ultimate settlement and and we'll go forward from there. So weren't any other comments?”

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Greg AbelMeeting2024-05-06

Morning Session - 2024 Meeting

“Yeah. No, I think the only thing I would add back maybe to how the model has changed, and he asked, one, yes, we'll always, I can't speak for Jeep, but we'll always use home services agents, but it's interesting. I have bought a home abroad. abroad because I lived over in the United Kingdom in Newcastle running our utility over there. And it is a completely different experience to buy a home outside of the U.S. Our agents take great responsibility for the whole transaction in the U.S. They put, as Warren said, time and capital at risk to ensure the transaction closes. And when you do close it, they make sure what you bought, you actually, what you thought you were purchasing, you end up with. And that's not the way it is always around the world. And there are more affordable models, but it's the old saying, you get what you pay for. So I think our real estate agents still provide incredible value within our business. And as Warren touched on it, it'll survive. The form may be a little bit different, but there's no question. It'll continue to thrive.”

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Greg AbelMeeting2023-05-08

Morning Session - 2023 Meeting

“Moving to BNSF, I'll start again by expressing great pride in the BNSF team. We have an exceptional group of led by Katie and her managers that show up. every day to do great work on the railroad. At the same time, they would be the first to acknowledge there's more to be done there. The specific reference to precision scheduled railroading, the other large railroad class A other railroads in the U.S. follow that, and including the two in Canada. We're well aware of what they're doing and obviously pay close attention to their operating matrix. And our team strives every day to be. be more efficient, obviously. I would say we balance it with the needs of our customers. If I look back to pre-2020, so we look at the three-year period of 2019, 2020, 2021, the BNSF team made significant progress on their efficiencies and delivering overall value back to the shareholders and to their customers and at the same time maintaining a very safe railroad for our employees. We were making excellent progress. That didn't stop last year. They made great progress. Again, the reality in 2022 is we did go through a period of time where we had to call it reset the railroad. We came out of the pandemic. There were the supply challenges. We had certain other labor issues and other things going on at the port. And the reality is our team prioritized getting the railroad back in place for the long term. not a short-term focus on hitting certain operating metrics in in 2020. We're well aware of where we were relative to those metrics, but the real focus was to get the railroad reset in a safe manner such that we could deliver long-term value and long-term service to our customers. And that's really what we'll continue to see with that team. There'll be continual”

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Greg AbelMeeting2023-05-08

Morning Session - 2023 Meeting

“Sure. So the it is a valid issue that our team obviously has been dealing with at BNSF. We did move crude across that tribal land. We had an agreement that allowed us to move X number of units per day. And we did breach it. We went over it. There was some fundamental breakdowns there in that our team didn't understand the number of trains that they could move. We have had significant discussions with the tribe looking to resolve the issue recognizing. We obviously been have benefited from moving those trains and those type of discussions will continue. I would say there's lessons learned there that we have to, when we make a commitment, understand what that commitment is and live by it, or don't assume we can just move our trains as we wish, or the cargo as we wish, we have to respect those agreements. So there's a, there's been a moment learned there, but at the same time, we've taken it very seriously and attempted”

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Greg AbelMeeting2023-05-08

Afternoon Session - 2023 Meeting

“Yeah, it's very interesting. We, we, in Iowa, we have actually produced more. uh wind energy that is used, uh, the amount of energy used by our, our customers, but it's not, it's not producible 24 hours a day necessarily. So the, there's problems. And incidentally, in Iowa, a significant majority of counties welcome us when we come around and want to put in wind and some don't want it. I mean, it, you know, it is, you know, it is, it is a significant majority of counties welcome us when we come around and want to put in wind and It is a, there's a not in my backyard someplace. There's other places where they love the money they get from a small plot of grounds and people in the, like, the taxes are paid. But I would say that if there's one state in the union that stands out in the development, it's Iowa, but what's also interesting in Iowa is that we have one other major company. There's always loads of little co-ops. all kinds of things that sell electricity. But we have one major competitor, and our prices are significantly lower. And as a matter of fact, we are now in the Omaha Public Power District, and three miles or four miles away, we're selling electricity in Iowa. And we are selling it cheaper, even though public power was invented in Nebraska. has been a, uh, I think it's, you know, George Norris did it back in the 1930s. And, you know, it's, it's, it's, Nebraska's resisted, to some extent, wind power, more than Iowa, but like I say, our competitor, or alderent source hasn't really pursued it the way we have. But I would, I would say that our record in wind and solar, uh, I would say that our record in wind and solar, has not been topped by any utility in the United States. And, of course, it's been aided by the fact that most utilities pay out 70 or 80% of earnings and dividends.”

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Greg AbelMeeting2023-05-08

Morning Session - 2023 Meeting

“to reach a resolution. there. And at some point, I hope we do come to a true resolution that's fair both to the tribe and to BNSF. On the derailment side, we did have an issue around the track derailed. We worked very closely with the tribe to mitigate that issue instantly, or at least over a very reasonable period of time. They were very responsive. Our team was very responsive. And they were very responsive. And they really no long-term environmental impacts to that spill. And as our team's highlighted in other comments, obviously derailments do occur in the industry. We take them incredibly serious. They're not all hazardous, but irrespective of that. We're constantly looking at how do we prevent them? How do we detect them when we potentially have one that's going to occur and what do we do do we do with our trades? And then ultimately it comes down to responding properly. Because they will occur. And I think we have an incredibly dedicated team that's always ready to respond to the communities they're impacting.”

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Greg AbelMeeting2023-05-08

Morning Session - 2023 Meeting

“It's, you start hauling freight. And we're a common carrier. And we take heavy, very heavy freight. And we take them at 100 degrees when it's the weather. And we take it zero and we go around curves and we have grades and even a 1% grade if you're going down down the hill with I don't know how much weight behind you. I mean, there's a lot of railroading is not an easy business. And of course, the systems were designed, you know, in the, in the late 1800s, the mid to the late 1800s, and we have 22,000. And we have 22,000 I think it is miles of track and that doesn't count sightings and some other things it is not an easy business. We'll make mistakes. Our job, we're not making a mistake because we have a derailment. You're going to, we will have the derailments 10 and 20 years or 30 years from now. I mean, but we and we have to carry certain products we wish we didn't have to carry. We're a common carrier. Do we like carrying chlorine and ammonia and all of them? No, but they're going to moved from one place to another in this society and we are a common carrier and we load them and if they select our railroad. But we are better than we used to be, but we've got a long way to go, I think.”

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Greg AbelMeeting2023-05-08

Afternoon Session - 2023 Meeting

“we do, and that's the way the industry is developed. And that's not bad unless you get into things that in effect, you know, extend. And they're part of a countrywide system rather than a statewide system. I think also that even if we weren't worried about global warming, it would make sense to shift to renewables to conserve our hydrocarbons. There are certain things hydrocarbons can do that nothing else can do. And there are only so much of them there. Why not be cautious in conserving them? And the cost, they've gotten so much more efficient, too. I mean, the winds down. I mean, if you look at what we're doing now, those towers are way more efficient. And, but there's a lot of, a lot of people that are talking, that, they're talking about things that can't be done. And then there's, there's a. There's a lot of nonsense in this field.”

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Greg AbelMeeting2023-05-08

Morning Session - 2023 Meeting

“Sure. Thanks, Warren. So there's no question. There's an energy transformation going on around the globe. And as Warren touched on in the U.S., And in some ways, I would hope here in the U.S. it would be, we'd at least have a clear plan across the nation as to how to approach that. But the reality is it is it is state by state, with some exceptions. But so as a result, when you think of Berkshire-Hathaway Energy, we own three U.S. utilities there, and they'll participate in multiple states. But they're developing plan state by state and then trying to integrate them across the various states. The opportunities are significant because there is a transformation going on. We've outlined our goal on where we're going relative to carbon at BHE, where they'll by 2030 reduce their carbon footprint by 50% relative to 2005. So that's the Paris Accord and the standard they want to hold the utility industry. or the utility companies do. And we're well on that path. But to achieve it as a true journey, I've often talked to Warren, when we bought Pacific Corp back in the mid-2000s, we immediately recognized to build a lot of renewable energy like we'd been doing in the Midwest in Iowa, but that was basically in a single state. Now Pacific Corp were in six states. We started that back in the mid-2000s. Here we are, and we laid out a great transmission”

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Greg AbelMeeting2023-05-08

Morning Session - 2023 Meeting

“plan. Here's how we're going to build it. Here's how we're going to effectuate it. And all the benefits for our customers over that period of time. Here we are in 2023, and we have a little more than a third of that at the time it was a $6 billion transmission project. Today, we have a little more than a third of it built and we've spent probably closer to $7 billion. And it's the right outcome. It's still a great outcome for our customers. But that transmission, as part of the transformation, you absolutely have to build it to remove all that renewable energy. And that's sort of the complexity Warren was highlighting. It is a, you can't just wake up one day and solve this problem. You start with transmission and then you build the resources. But at that same same company, and if we look at what we're doing across BHE energy and that energy transformation, we have $70 billion of known projects. that are really required to properly serve our customers and achieve that type of energy transformation across those utilities. And that's in the coming next, in the coming 10 years. So we have a team that's absolutely up to the challenge. They're delivering on their commitments. And it's a very, very good business opportunity for each of our companies and for our shareholders. Because as we deploy that capital, we obviously earn a return on equity of it. So, but it will be a long journey. It will happen over an extended period of time. And the further you get out there, the more dependent upon the evolution of a variety of technologies that are progressing, but not there yet. You've raised a question. I want to just take an extra minute on it because it's so important. And I don't really know whether our form of government is ideal. at all in terms of solving the problem you describe. We have solved at one time. In World War II, we took a country that was semi-limping along, and we found ourselves in a world war. And what we did in a world war is we brought a bunch of people to Washington at a dollar a year. You know, whether it was Sidney Weinberg or Goldman Sachs, you just name them. And we gave them enormous power to reorient the resources of the United States to face the problem that they faced, which was to create a war machine. And what they did was they found Henry Kaiser, you know, and told them to build ships. And they went to the Ford Motor Company and said, you build tanks and some airplanes.”

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Greg AbelMeeting2023-05-08

Morning Session - 2023 Meeting

“And they reordered the industrial enterprise. of the United States in a way that was unbelievable because they had the power of the federal government and they had the ingenuity of American business. And they had the facilities of American business. And it led to a very successful outcome. But can we do that in a peace time where you've got 50 states and you have to get them to cooperate and you don't have anyone that you can issue orders, but you can't you can't designate where the capital goes at the other end and you know we try and do it with tax incentives and all that sort of thing but we haven't we haven't created the unity of purpose and the machinery that worked in world war two where essentially everybody felt their one job was to win the war and we figured out how to use our industrial capacity to in effect And how do you recreate that with the present democratic system? I'm not sure I know the answer, but I sure know the problem. But I think that if you can think of a, if you've got an emergency on your hand, I mean, you really need to re-engineer the energy system in the United States. I don't think you can do it. do it without something resembling the machinery, the urgency, whatever. The capital is there. The people are there. The objective is obvious. And we just don't seem to be able to do it in a peace time where we're used to follow a given set of procedure. And And you know, China, you've got one country and we've got 50 states and we've got a whole different system of government. We should be up to the test, but so far it hasn't worked. So thank you for the question.”

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Greg AbelMeeting2023-05-08conf:medium

Morning Session - 2023 Meeting

“the only thing i would add is that um one is that um one is warn you went over there it was to um build the build the build the trust with these japanese companies because we do hope there's long-term opportunities but fundamentally as you highlighted uh they're an incredible uh they've been a very good investment i'd also highlight the five meetings we had we're really quite remarkable i mean these companies the culture and the history around it and how proud they are you know there's just moments of learning from them so it was it was just a great experience to to spend really two days with the five companies and an issue that we intended to be 56 billion of the end that we were issuing and selling turned out to be 164.4 or something like that everything everything works so well and as charlie says it you know it doesn't move 500 billion of net worth that much but this one is you know it will keep adding over the years to the berkshire's value with this very widespread probably four or five hundred million dollars a year and uh you know we'll just keep looking for more opportunities and and japan we have berkshire is the largest borrower is the largest borrowererererer out outside of corporate borough our side of japan that that exists and we didn't set out to be that but it's it's turned out that way and and we're not done i mean it uh you know in terms of what may come along there and uh and we have some direct operations there as i mentioned that uh and we've got some really wonderful partners working for us and i don't have to do anything okay”

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Greg AbelMeeting2023-05-08

Morning Session - 2023 Meeting

“Right. Yeah, well, I think Warren, you said it really well. I mean, the framework's been laid out. We know how you approach it and how you and Charlie have approached it and really don't see that framework changing. When the opportunity presents itself, we'll want to be an active repurchaseer of Berkshire shares. We think it's a great outcome for Berkshire shareholders to own a larger piece of each of our operating businesses and the portfolio, the equity companies, when the opportunity presents itself. It can be the dumbest thing you can do it or it can be the dumbest thing you can do it, or it can be smartest thing you can do. And to make it more complicated than that and start getting into all these, but you obviously do what the business needs to do first. The opportunities are there, grow your present business, buy additional business, whatever it may be, and then you make a decision on dividends, but that decision becomes pretty irrevocable because you don't cut dividends without having major effects in your shareholder”

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Greg AbelInterview2023-04-17

Buffett: More banks may fail but U.S. depositors will be OK | April 12, 2023

“What did you learn since you've been here? I think the thing that stands out very quickly to us is they came to the meetings wanting to build a relationship and strengthen it. So they understand we've invested in their companies, but from the very get-go when we start the conversations with them, they come each with their own story and it's around building trust in that relationship. with them.”

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Greg AbelInterview2023-04-17conf:medium

Buffett: More banks may fail but U.S. depositors will be OK | April 12, 2023

“We've clearly made it each time we've met with them. We said we very much like the core investment, but to the extent they can identify an incremental opportunity that we could do with any of the five companies. We would very much evaluate it quickly and more than highlighted, the bigger, the better. And that he'll answer the phone on the first ring. And we'll never run out of money. I mean, they can call us any time. And maybe what they have interests, it may not, but they'll have an answer, you know, bingo. And if we make a deal, the money will be on the way and we look forward to it. And I'm just astounded at how they really, they're all different and they're all the same at the same time. I mean, we learned about five different individual companies. but it was not exactly what we expected was better than we expected in every respect.”

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Greg AbelInterview2023-04-17

Buffett: More banks may fail but U.S. depositors will be OK | April 12, 2023

“Yeah, I would say it hasn't changed in a lot of ways because it goes back to what I know. what I enjoy and making sure that those priorities stay in place. The responsibilities around the work, again, the relationships I have with a Jacob or the other managers really hasn't changed. There's some external forces or interest and that's naturally going to come.”

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Greg AbelInterview2023-04-17

Buffett: More banks may fail but U.S. depositors will be OK | April 12, 2023

“But I would say, you know, the beauty of it and it's being part of Berkshire allows me to just continue to do what I really enjoy. So I get the opportunity to work with Warren and Charlie and others, but at the same time work with all our great managers every day. And that hasn't changed. The external interest that comes with that. What does that mean? A lot more people call you. A lot more people want to get on your call sheet. They want to be able to spend some time with you? Yeah, that naturally comes. There's a lot of those calls. There's the people in the community who maybe didn't even know, that I work for Berkshire. So you get some interesting comments. I'll get questions from my 11-year-old's best friends as to what that means, just like the question you asked. And I remind them we're still doing all the same things we did five years ago together. And that will be the approach to the way forward.”

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Greg AbelInterview2023-04-17conf:medium

Buffett: More banks may fail but U.S. depositors will be OK | April 12, 2023

“Yeah, I think there's a few things. So first, this has helped a lot when you have this type of transition and I've had the opportunity to work with them. So I think we do have very good relationships, but there's no question. It's not the same as working for Warren. I've understood that and I've effectively apologized to them many times for that outcome. But they also realize that they still have an opportunity to go run their businesses, what they love and what they wake up to do every day. And that's what we're still providing both today, under the current situation and we'll provide the same opportunity long term. So even though it was kind of an accident that the world found out that Greg's... More than it actually, you got it out of them, I think, actually.”

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Greg AbelInterview2023-04-17

Buffett: More banks may fail but U.S. depositors will be OK | April 12, 2023

“No, I felt jail pressure. I mean, I very much believe in what Warren said, that our culture is, our culture is. one that's very aligned with our shareholders. And I've observed both Warren and Charlie and our other board members, but specifically those two, that they've had their capital deployed there. But it's the belief that they're going to align with the shareholders and that's who are their partners and that's who they're going to take care of forever. And so it was a pretty simple decision to when the capital freed up to acquire Berkshire shares. So you've had the relationship for for years now. With the non-insurance operation of overseeing all of that, Ajit Jane is responsible for overseeing the insurance operations. How do you and Ajit work together?”

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Greg AbelInterview2023-04-17conf:medium

Buffett: More banks may fail but U.S. depositors will be OK | April 12, 2023

“Yeah, it's been a great relationship. And that's been a big benefit of, again, once we became vice chairs. Yes, we would talk and we'd see each other, but it's created that opportunity to have an active dialogue. So we regularly check in with each other. If there's ever an issue that'll cross the boundaries of let's say either it's a broader berkshire matter we'll both pick up the phone whoever it's it initiates with and checking with the other to see as we move down this path are we each comfortable with it and seek input so it's been a it's been a great relationship and a true pleasure and honor to have the opportunity to work that much with the jean energy never wanted to run berkshire uh great didn't want to but he's probably willing to know but he's but it wasn't what a jeep loves running you know a one-of-a-kind insurance company in the world”

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Greg AbelInterview2023-04-17

Buffett: More banks may fail but U.S. depositors will be OK | April 12, 2023

“Sure. So really pleased with the acquisition or taking our interest up to 80% of pilot flying J. They have a great set of assets and a great management team in place. One area we did want to make a change was with the CEO. And really the focus was to bring in someone who's been tenured with Berkshire and would have a long-term focus. Some who's going to be there for 10 to 20 years or however long. Long longer. Yeah. And that was really the focus. So we were able to, Adam Wright, who is a 20-year energy veteran with Berkshire Hathaway Energy. and really started his career with us back in 1996. And has gone through many different roles in our organization in the energy side, including being CEO of Mid-American Energy, one of our largest utility subsidiary. So when this opportunity presented itself, we approached Adam to move to Knoxville and take on the role. And we're just thrilled to have him back at it. He had moved on to a company for the past”

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Greg AbelInterview2023-04-17

Buffett: More banks may fail but U.S. depositors will be OK | April 12, 2023

“Yeah, I would say it's a railroad problem now, specifically now. I mean, we have to take on the challenges that we've had some significant. events and our team at BNSF is they take I know within the moments of knowing of that accident they were one they're trying to understand it but also lessons learned and we recognize there'll be certain actions that come from the federal government out of different agencies and we'll be very respectful of that in sharing our experiences and figuring”

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Greg AbelInterview2023-04-17

Buffett: More banks may fail but U.S. depositors will be OK | April 12, 2023

“out you know the goal is to have a safe railway both for the consumers and the communities we operate in and and ultimately also so also for our employees. So there's no question. There's lessons to be learned for the industry as a whole and there's room for improvement. Just a business basis, we would rather not handle hazardous materials. We are a common carrier. We're required to carry, you know, whether it's chlorine or you name it. And we've got to do our damages to do that as safely as possible. But they're literally with something like close to a thousand. There are a thousand. I mean, you are running huge trains, 120 cars or maybe and and it's big, and it's big, heavy and it's big, heavy stuff. And they go around curves and they go in 100 degree weather and they go in zero degree weather. And the record of the industry as getting, becoming more safe, as brumatic. over time, but every day you have to think about making it safer. I mean, Katie would tell you that it's unacceptable to have anybody die in, for example. But people walk along railroad tracks, some people commit suicide on railroad tracks. And just imagine how traumatic that would be for an engineer, he can't stop the train. And he's blowing his whistle like crazy, right? Somebody decides that that's the way they want to go. Railroading is a tough business, and it's a lot better than it used to be. It'll be better 10 years from now and 20 years from now. And they'll never let up at BNSF, I can promise you that. Some of the blame, though, has been put on precision railroading. And on the idea that Norfolk Southern, in particular, if you listen to some of the railmen there who have issued complaints about it saying that I was reading one guy's testimony who said that in the 20 years he's been there, this is Norfolk Southern, not Burlington, Northern, but precision railroading is something almost all the railroads have taken a look at, saying that in the 20 years he'd been there, the safety times had gotten shorter and shorter in terms of allowing inspection for every car that went through, going from two and a half minutes to two minutes to a minute and a half and even less. Is that a concern? Is that something that happens at BNSF as well? I would say that, listen, everybody's trying to become more efficient and all the time. as we operate the railroads. But what, if you look at the safety records, for example, equipment failures, definitely be an SF.”

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Greg AbelInterview2023-04-17

Buffett: More banks may fail but U.S. depositors will be OK | April 12, 2023

“We see improvement year after year in that area. And there may be blips due to a very specific event. But the team as a whole, they start with prevention. How do we avoid the problem right at the front end? And then you move to detection and you're saying, okay, if we do have a problem, how do we, you know, identified early in address it? And then you hope you're not responding. but you create a culture that you're going to constantly focus on the three of those. And that will create a safer work environment, both for our employees and for the equipment they're moving, and for the communities we operate in. But it is rotating equipment. You know, things do go wrong. And that's why that prevention and detection becomes so important. And I think we have a very strong culture around that in BNSF. The quarterly report I get every, ever since we bought it, but continuing under, It begins with safety. Right. And it gets around to the operating ratio, net income, all that. But it starts with safety. And, you know, it is, it's an outdoor exercise. I mean, we've had all, you know, you deal with hundreds and hundreds of millions of 10 miles moving. I mean, it's, you have problems if you have trucks, you have problems if you have airplanes, you have problems if you have barges, you have problems if you have you have problems if you have railroad. It's gotten safer dramatically over the years. Right. Yeah. And all those risks covered. Yeah. And it's amazing. We are carrying, now, there was much more passenger traffic in the past, but we are carrying war tonloads of freight in the railroad industry than right after World War two, and we've got one-tenth of many one-tenth of many people that are needed to do it, and they're doing it more safely by dramatic measures than existed at that time. But, you know, every day, they're worried about it. And to say that there will never be any more derailments is just plain crazy. And I would rather not be caring with the call hazmatism hazardous materials but we they are going to be transported in this country and and the shippers decide what is the best method of getting their product to market and it's they're on BNSF or for a handoff from southern or the railroad I mean we we carry them and I can tell you that Katie Farmer and her predecessor CEOs they care about safety But will we be perfect? The answer is no. It just isn't going to happen.”

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Greg AbelInterview2023-04-17

Buffett: More banks may fail but U.S. depositors will be OK | April 12, 2023

“Yeah, it would be similar to what I spend with BNSF, except I still know, have a lot of strong relationships in that industry. So a few years ago, we acquired some assets from Dominion Energy, a great set of gas transmission assets in the Northeast part of the United States. That's a strong relationship I had with the prior CEO, Tom Farrell. And so I've maintained those relationships. So inevitably, I'll spend more time on energy, say, than a BNSF. On the general matters, it's equal. But there are other opportunities that I'm just know within the energy space, and that's where I came from. So I, inevitably, I spend more time there. But, and then I try to cross our businesses. I mean, our top 12 businesses account for 85, 86% of our underlying cash flows.”

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Greg AbelInterview2023-04-17conf:medium

Buffett: More banks may fail but U.S. depositors will be OK | April 12, 2023

“I mean, you sort of, in the end, I go where. someone's either requesting some input or a discussion. And of course, I know, like I said, the large ones. But if someone else calls and says, hey, we need to discuss something, I'm going to talk to them that day or very, very quickly. A big part of Warren's job is also capital allocation. Right. And right now, Warren and Charlie and Todd Combs and Ted Westler are all responsible for allocating capital. Obviously, you've done a lot of deals in your day too. Right. What kind of relationship? do you have with Todd and Ted? Do you talk to them about capital allocation at all? Is there any back or forth?”

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Greg AbelInterview2023-04-17

Buffett: More banks may fail but U.S. depositors will be OK | April 12, 2023

“Well, I pay attention to what they're doing. But in the end, I think it's much like Warren does. They run their own portfolio. So I watch it with interest. And I don't really know who's doing what amongst it, but we all have a pretty good idea of what Warren is doing versus the two of them. So I'll do it to mainly observe and pay attention to learn from what they're doing. And I may ask them, that was really interesting, what triggered your interest. But that's the extent of it. And outside of having relationships with both of them, which are important, that's their portfolio and that's the way it'll always be and they'll manage it accordingly. Do you like capital allocation? He's terrific out of it. But my job, the job of any CEO in Berkshire is the job of capital allocation is their job and the chief risk officer is their job. And the chief risk officer is their job.”

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Greg AbelInterview2023-04-17

Buffett: More banks may fail but U.S. depositors will be OK | April 12, 2023

“the railroad or what we, they don't want to, I don't want to give economic forecast to our managers to how they run their business. I just wanted to make sure that they have happy customers and that they have their cost effective and they behave good citizens, but that they, you know, they ask me before they spend a lot of money in terms of capital allocation.”

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Greg AbelMeeting2022-05-02

Afternoon Session - 2022 Meeting

“But the Berkshire Hathaway Energy actually is required with its regulated utilities. And it basically started pretty much with regulated utilities. And still is dominated by that. And we're interested in buying more regulated utilities. It's required in different ways by different states and by different regulatory authorities. to have a large amount of debt because the regulatory authorities will say in Iowa or to pick any state uh the regulatory authorities are going to say you can get debt money cheaper than you can get equity money which historically has largely been almost always been true and they say that since we're going to allow you a return on equity will say just pick a figure But let's say they allow us to return on equity of 9% and we can borrow a lot of capital at 3% they say it'll result in higher rates to customers if you use it, putting in all equity. We would love to have all equity in our utilities, but we wouldn't, the regulator wouldn't stand for it because it would result in under the traditional system, it would result in higher prices to consumers. So that's built into the system. And we would, well, our regulator wouldn't allow us essentially to get the same return on equity and have an all equity structure. And the answer is, you know, we put, well, you actually saw in the film earlier, which the people that are listening, hearing the webcast, this is, you know, we put, well, you actually saw in the film earlier in the film earlier, in the film earlier, I didn't see, but, but just in Iowa, you know, we recently got approval to spend three in a fraction billion dollars, but they want us, Iowa has a history in, like every other state in the union, except Nebraska, which is all public power, but every private powers, you know, they have a history of wanting X percent to be in debt. I want you to raise a lot of money in debt because it's cheaper, means cheaper power for the consumer. So the answer is if we owned 100% of Berkshire energy, we would be, we would absolutely be following the same.”

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Greg AbelMeeting2022-05-02

Morning Session - 2022 Meeting

“Let me just start by saying when we think of BNSF, we have an exceptional franchise there and a great business. And we do compete with other railways, and we're very well aware of how they operate, including their operating ratios and the metrics they operate to and precision railroading. And it's all part of it. But what I would share with is when I think of BNSF, we start with focusing on our customer. understanding how we can best service them. And yes, we want to do it in an efficient and effective way that delivers great results back to our shareholders. And that will continue to be our focus. So, yes, we learn from all the metrics they report and how they operate their rail and we observe it. But I would put our team up right beside them on any operating day, and we're going to move our rail cars as well as any other rail company in America, and we're going to do it on behalf of our customers. So we're very proud, but we're not ignoring the fact that there's more to be done, both operationally and for our customers. So we'll continue to see improvement there. We've got a great leadership team there. We've got a great employee group within BNSF.”

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Greg AbelMeeting2022-05-02

Morning Session - 2022 Meeting

“And what I like is we're just going to see long-term improvement there. We have an exceptional intermodal franchise out of the West. It's incredibly valuable to our shareholders long-term, our partners. And that's what our team is focused on building that franchise out. So couldn't be more proud of where we're at, but we also know we have a journey ahead of us, and we're going to continue to get better and better.”

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Greg AbelMeeting2022-05-02

Morning Session - 2022 Meeting

“for Berkshire shareholders and it will redundant to the, down to the benefit of the country. And if we do it, well, it will, no matter who ran it would be important, obviously, enormously, the country. And the UP will be here and at that time, too, and it will be a better railroad 100 years from now than this now. But I can't promise you what will happen if we get flooding in something in the next few months, you know, it can wipe out a lot of the plans you have and disrupt lots of lives and disrupt lots of shipments. And there's no magic wand in railroading to make great changes. On the other hand, you ought to be working at it every day to make it better done. I forget how many bridges we have, but some years ago, we were spending three or four billion dollars a year on capital expenditures and one, I said, Matt Rose, you know, I said, this is a lot of money to spend, you know, keeping up a railroad. And then he said, well, we're going to have to do that more and so on. And I said, well, I said, I can handle this, but I'm not sure Charlie can't. I have to explain these numbers to him. So the next bridge they built, they called the Charles Teammonger Bridge. So you can actually go see our railroad has the Charles Teamonger Bridge because Charlie, Charlie kind of was asking similar questions 10 years ago.”

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Greg AbelMeeting2022-05-02

Morning Session - 2022 Meeting

“You want me to touch on the cyber? Oh, yeah, sure. I'll just touch on the cyber because it was raised. And when you do think of Berkshire and they use Berkshire Hathaway Energy as a reference, but cyber risk and managing that risk, both at Berkshire really falls across all of our subsidiaries. And it's a constant risk that's there. It's one of our greatest risks we're always evaluating and trying to live. trying to literally defend against. And if we use Berkshire Hathaway Energy as an example, we would receive billions of attacks every day against our various operating systems. So that's basically what our team is in place for, both they harden the assets to deflect it, and then evaluating the underlying attacks we have, you know, every second of the, every second of the day. And by the way, that would, we'd have a number of number of operating subsidiaries that experience that, but obviously it's the rail and the energy and a few others that we spend a lot of time on, a lot effort, a lot of resources. And the good news is that today that through to today our teams have done an exceptional job. We really haven't had a significant event. We've had some minor events at small businesses, but across our major businesses, across our major operating systems, we've had the proper security protocol in place to avoid events.”

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Greg AbelMeeting2022-05-02

Morning Session - 2022 Meeting

“When it comes to cyber, the collaboration between a variety of U.S. agencies and our individual businesses, it's incredibly strong, including down to the certain agencies, we'll submit basically a lot of our operating data on a daily basis where they're helping us go through it to identify if we have a bad character, a bad individual who's maybe penetrated into our system. So it's a strong collaboration. and more, and you're absolutely right. It's very unique to see how both the industry and the government's working so closely, but I think we both recognize it as such a, such a significant risk, we have to stay strongly aligned on the approach. It's a real partnership.”

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Greg AbelMeeting2022-05-02

Afternoon Session - 2022 Meeting

“I mean, it's fascinating to me that, and, you know, it's, I would be willing to wager somebody if we could find an impartial judge. And if you go to any group you want to pick, take the same. The CEOs of the five leading utility companies in the United States, the CEOs of the 10 league, and ask them, you know, whether Berkshire Hathaway Energy has been a leader in the field of renewables and so on. And they'd all say yes, but essentially, you've got a group of people that write us letters and say, we want to be, we want you to do things our way. And we've got three million other shareholders, but forget about them and spend some money on this and have a meeting with us. And here's our way of measuring it. And admittedly, we've got all kinds of information up about what we've done, and they can come out to Iowa and look around, and it is the, it is the renewables capital of the world, practically, and we're the ones that have done it. And that isn't what they want. I like, you know, I'm for a shareholder democracy and all that sort of thing, but the answer is that the resolution, you know, they pay lots of money to somebody that probably works in these groups and they've got groups of the, you know, they've got their way of doing. I get letters from institutions in Europe and they say, well, you know, you've got, you may have 40 pages or a history of going back to 2006 of explaining what you're doing, but here's what we the way we want you to do it and you know and you know how much energy is your animals which we own is it's just it you have to think you know as a person sitting here and you know it's it's it's it's it's it's not a but it's these are the rules you get on the proxy statement under certain circumstances most companies they don't want a lot of resolutions so it's just easier for them to you know set up a department and you know pay a bunch of people to pay attention to them just like Warren did when he flew across the whole country because he had it wasn't money I just I was worried about a company surviving that the people in Washington the supervisor were worried about it surviving and and and if I came if I flew across country and and paid them sufficient respect I mean it was kind of like the godfather or something, you know, I just bowed out and then flew back. So I have a certain reservation about, about, uh, uh, shareholder proposals should have some meaning.”

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Greg AbelMeeting2022-05-02conf:medium

Afternoon Session - 2022 Meeting

“And we have plenty of cash, and we'll put in more cash, and we're willing to build, you know, whatever amount of transmission lines and all kinds of things that would be helpful to the country. And we're doing a fair amount of them that we could do. a whole lot more and we're better positioned to do it really than any utility company in the country. And I think if you talk to the utility executives, I don't advise you to go and put them on spot or anything, but they would agree. But they also know that their life is easier if they just have somebody to take care of people that want to be catered to, basically. And I catered to them at the time of Sullivan in 1991 because 8,000 people were working there. And John McFarland was trying to raise a billion dollars a day and the Treasury and the Fed and SEC wanted us to stay alive. And in effect, that caused me to go and pay my respects to the Godfather and I came back. But I do think a little background is kind of interesting on this. And with that, we'll ask Ms. Amick, can you give you a report?”

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Greg AbelMeeting2021-05-03

Part 2 - 2021 Meeting

“Sure. So it's obviously a transaction. We followed very closely with both Canadian National and Canadian Pacific bidding to purchase Kansas City Southern. either of those companies acquiring Kansas City Southern will have an impact on BNSF. We, what they're basically proposing is to create a north-south railway that goes from Canada into Mexico. We do have a strong presence in Mexico, not as strong as some of our competition, but we would feel competition there. So we'll find follow that transaction very closely. As it goes before the Surface Transportation Board, the standard that will be applied is that competition has to be protected or enhanced. So that's our opportunity to protect our franchise on behalf of our customers. So we move intermodal business both in and out of there on behalf of certain customers. We'll want to protect the rights of our customers there. So we'll be active in the approval process. But there's no question in the end, it impacts our franchise.”

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Greg AbelMeeting2021-05-03

Part 2 - 2021 Meeting

“and there's, there's five in the United States, and, and, uh, this will result, you know, and, essentially three of the units, uh, being Canadian, poor being U.S., which is not the way you normally think of the way the development of the railroad system would work in the United States. But it's, you know, we've talked about it plenty, and, and, uh, uh, CP or either Canadian Pacific or Canadian National is very likely to get, I think the Surface Transportation Board both voted for a one, didn't they, the other day, didn't get, didn't get in my car come? They voted on an initial trust structure that they had. had to approve for uh canadian pacific and that was a four to one vote as you noted warren so they're they're moving forward with the evaluation of it”

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Greg AbelMeeting2021-05-03

Part 2 - 2021 Meeting

“Sure. So the, obviously, there is a very unfortunate event in Texas in February, and it basically lasted four days. Many lives were lost. The economic damage was significant. Texas has highlighted that anywhere from 80 to $80 to $130 billion and incurred losses over that period of time. And I think when you look at the power sector, it fundamentally let the citizens down. it didn't perform as they expected. And then when it did perform, it was extremely expensive.”

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Greg AbelMeeting2021-05-03

Part 2 - 2021 Meeting

“They incurred billions and billions of dollars of energy costs versus a multiple of basically ten times what they paid. They paid ten times in energy costs over those four days what they paid in the past year. So a very substantial. substantial event for Texas. We've gone to Texas with what we believe is a good solution. We spent a lot of time pulling it together, understanding the fundamental issues around it. And our proposal is really based upon the fact that the health and welfare of Texans were at risk. And we needed to have effectively an insurance policy in place for them, that if they needed the power on very short notice, notice, it would be able to be dispatched and it would be there for the four days. We're actually proposing it could be there for seven days. And the fundamental concept of our proposal has always been, if there's a better proposal that's brought forward, we've accomplished our mission. We've just been really there to, it's the best proposal or option we could come up with, and obviously if Texas or Elon or someone else comes up. or someone else comes up with a better proposition, we've always said, Texas, you should pursue it. We strongly believe right now we have a, what remains is a very good proposal for Texas, and it'll continue to be discussed and evaluated. The big difference between a battery proposal and our proposal is that we will have power that can be generated continuously for seven consistent days. Or if you went to a battery solution, you may release that power that's been stored for four hours, but we're talking four days of a problem, not four hours. And it's just a completely different cost equation and solutions. So very proud that our teams brought forward what I thought was a very unique solution. We've worked hard with our suppliers and Peter Kewen's sons to put together what we believe is a firm cost. A firm cost that can also be delivered by November of 23. So again, we put a firm date on. It won't be ready next winter, unfortunately. It won't be ready this summer, but it's a valuable solution. And one that we hope at least leads to the right discussion and the right long-term solution for the state. Yeah, and we're also willing to put up $4 billion that if we don't deliver when we say we're going to deliver, we'll pay it as a penalty basically. And, you know, we went to Kiewit. We went to General Electric and say, you know, how long can we get turbines and, you know, for that?”

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Greg AbelMeeting2021-05-03

Part 2 - 2021 Meeting

“You know, if you're going to be prepared for 2023, you have to start at a point fairly soon, and you have inflation going on, and Keywood's not going to change things on us in a month. We don't try to get the contracts all written out. but they had 100 people working on it. Yeah, they had hundreds working on it. Yeah, and gee, he's cooperative and everything. But it doesn't mean we have the best solution. We just know what we can do. And if anybody can do it faster, they can do it cheaper, whatever, that's terrific. But they should have something to lose, though, if they don't do it. I mean, and we will back our problems up by $4 billion, which, you know, and we won't have any rinketing clauses in there that if the same happens or that happens, we don't pay. Well, so, but we won't be able to do that a year from now. I mean, we can do it a year from now with the cost then, from what they are then, and then it'll be a year further out. We want Texas, Texas is a terrific place to do business. We do a lot of business there, and where BNS has a headquartered. And it's a great place. And this was out of the blue, but one way or another, the nature of of utility business is that you have to be prepared for something that probably isn't going to happen. And you know, you don't want to say it's a well, it's a one-and-thirty-year event, you know, and people die. I mean, so you'll want a margin of safety in it, and we've got one solution and other people may have other solutions, and we will cheer when a solution is reached of any kind, and we will cheer a little louder if it's ours.”

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Greg AbelMeeting2021-05-03conf:medium

Part 2 - 2021 Meeting

“put out tons and tons of capital utility business that way it's not a it's not a super high return business you just have to put out a lot of capital you get a return on that capital but but you don't get you don't get fabulous return you don't get google like returns you know or anything remotely close to it. You know, we're proposing a return in the in the transaction with the proposition with Texas. I think it's 9.3 percent.”

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Greg AbelMeeting2021-05-03

Part 1 - 2021 Meeting

“Sure, Warren. Thank you. And really, as Warren touched on, BHE and BNSF 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”

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Greg AbelMeeting2021-05-03

Part 1 - 2021 Meeting

“2021. So if we could pull up BHE1 on the, as a slide, I think it would just highlight going all the way back to 2007. We've been doing investor presentations for our, 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's Energy's plans to decarbonize. Now, it's interesting, if you go back to the 2007 fixed income conference, and we're 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 customers. So we have investors. We present to them as we're highlighting on an annual basis. And if you go back to that 2007 investor conversation. conference. It's interesting. In that presentation, we're highlighting climate change, that it's a fundamental risk. And we talked and we discussed what good policy would be. We discussed innovation. We discussed market transformation and the importance of setting targets at that point in time. And we had recommendations for our industry. And then since then, each year we've presented really a plan and a strategy around how each of our businesses and BHE, but each of our regulated entities, how they're going to transform. And the whole transformation has been around decarbonization, managing that risk on behalf of our stakeholders in our many states, our customers that we serve, and ultimately managing that risk for Berkshire Hathaway's shareholders. Now, as you go through those presentations, there's a common theme and more touched on it already. You have to build the foundation first. And that foundation is around building the high voltage, the transmission system. Warren touched on it in his annual report this year and letter he highlighted that at Berkshire-Hathaway Energy will be spending just in the West $18 billion on transmission. Five billion of that's already been spent as we sit here today. And that 13 billion will be spent over the next 10 billion. 10 years. That's the foundation that then allows us to build incremental renewable resources and move it to our many states that we serve at Berkshire Hathaway Energy and well beyond that. I would highlight, while we've been building the transmission infrastructure in place,”

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Greg AbelMeeting2021-05-03

Part 1 - 2021 Meeting

“we have been building renewables. If you look at our investment through the end of 2020, we've invested 30 billion. or in excess of $30 billion into renewables and have really completely changed the way our businesses do business, i.e. our utility businesses. They've been decarbonizing and delivering a valued product to our stakeholders, to our customers. And I think the results are really amazing when you look at them and I'll give you a couple of reference points. If you go back to 2015, when was discussing, excuse me, joining the Paris Agreement. Very specific targets were set. Prior to those targets being set, Berkshire Hathaway Energy and 12 other companies, including the apples of the world, Google, Walmart, committed to Paris, and that targets needed to be set, Berkshire Hathaway Energy was one of those companies in 2015. Yeah, how many other utilities were there? Warren, there were no other energy companies that made any type of commitment at that point in time. I'm happy to report we made a variety of pledges. Well, one of them was at that point we'd invested $15 billion in renewables and that we would commit $30 billion in total. Well, we far exceeded that total now. So there's been a clear commitment to reduce decarbonizing our businesses. We have focused on very identifiable, quantifiable outcomes, and I think that's very important. If you look at the standards that were set with the or the original U.S. government's commitments associated with the Paris Agreement, the target was 26 to 28 percent reductions in carbon footprints going back to 2005, so that's the reduction period, through 2025. and they wanted the 26 to 28% reduction level. We committed to that at BHE, and I'm happy to report, warn, and to, we've briefed our board. We achieved that in 2020. So we met our pledge, and we met the commitment under the Paris Agreement. And then if you fast forward to the discussions that are occurring right now or have occurred around rejoining the Paris Agreement, The current administration has proposed that, again, using 2005 as a starting point, that the emission goals or reduction should be 50 to 52% by 2030. Again, I'm happy to brief to our shareholders and briefings we've provided to our board, but Berkshire-Hathaway Energy will achieve that by 2030. Our reductions will hit the Paris Agreement target. Again, the reason we can do it is, we've built the foundation through transmission, the substantial investment that Warren's highlighted,”

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Greg AbelMeeting2021-05-03

Part 1 - 2021 Meeting

“and then followed that up with very specific investments on the renewable side. I've one incremental slide that I hope sort of pulls it all together, and that's BHE2, because as people discuss carbon, they often go to coal units, how many you own, how many of you close, And there's no important that, there's no question that can be an important metric, but it is a transition. And we have very much focused across the three utilities we own and the ones we've highlighted on the slide is to transition from our existing fleet to renewables using transmission. We have not become overly dependent on transitioning to gas. That's been a clear strategy. So over a period of time, our coal units will retire. I'm happy to report. or pleased to report to our shareholders that through 2020, we've closed 16 units to date. If you look at from 2021 through 2030, there'll be an incremental 16 units closed. And then if you go through to the end of 2049, our remaining 14 units will be closed. And at that point in time, all our coal units are closed. That slide is just an aggregate. of all the activities each of our business units have been taking to help facilitate that transition and really transitioning to a decarbonizing those units and I said decarbonizing our businesses on behalf of first and foremost our customers, the the many stakeholders they represent in the various states. And then equally important, decarbonizing those businesses on behalf of our Berkshire Hathaway shareholders. The only other thing I would add, because it is the entity that has the second largest carbon footprint in Berkshire, and when you combine BNSF and BHE, you're talking the material set of emissions within Berkshire, BNSF has also been very active in managing their carbon profile. They've committed to have science-based targets established for 2030. So again, those targets will again be consistent with the Paris Agreement. We've seen what the other participants or some of them in the class in our, in the industry that have committed to. And our commitment will be very similar. It'll be consistent with the Paris Agreement, but it'll be a 30% reduction in BNSF's footprint by 2030. So again, if you look at our, and that's been publicly disclosed, that's on the BNSF website. Everything I've discussed regarding BHE is on their website, filed in 8Ks, completely accessible by our many shareholders. So when I look at it on, from the perspective”

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Greg AbelMeeting2021-05-03

Part 1 - 2021 Meeting

“of our Berkshire shareholders, I really believe this risk is being well managed and, and and we are positioning ourselves for the long term. Thanks, Warren. Yeah, incidentally, I mean, the president the other night talked about $100 billion for infrastructure. We'd love to spend $100 billion. But he was talking about, you know, transmission is really the problem. I mean, a big problem because you got to get from where the sun is shining and where the wind is blowing, essentially to concentrations of population and it'll be whether the you know you cross state lines and you and you go through people's backyards it's it's whether the federal government has a better luck in just saying this is the way it's going to be done and ramming it down the throats of where they go and getting it done I mean they may have that power and they'll be able to do it faster than we are on the other hand we'd love to do it we'll we'll spend the hundred billion but the speed at which we can do it is we bought Pacific Corp in 2006 and we had a bunch of customers out in the far west and and they had coal plants serving them and to change that you've got to be able to go to where wind blows and and and deliver it so it's it's it's but it it it is interesting that we have published this information we spent far more than any utility than that in terms of renewables and transmission in the high United States and we started with a nothing you know little operation but are the people who bought the stock with their own money the individuals they seem to understand it and they read the reports and we get calls and they say well we want to come out and talk to you about it well we're not talking to them and ignoring the million people that have been with us over time and bought it with their own money they we will not give special treatment to either to analyst or to the to the institutions over the individuals that basically trust us with their savings for their lifetime”

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Greg AbelMeeting2021-05-03

Part 1 - 2021 Meeting

“Yes. Well, as he well said, and as he touched on, Warren and Charlie have an exceptional relationship, but I'm very proud of the relationship, Ajit and I've had. And as Ajit touched on, it's developed over many years. We've had the opportunity, or I've seen the, had the opportunity to see how Ajit's run the insurance business. And as Warren highlight and Charlie highlights, there's no one better at it. So I've had the opportunity to observe that.”

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Greg AbelMeeting2021-05-03

Part 1 - 2021 Meeting

“And then equally over the years, that relationship has just built and become greater and greater. And as Ajit touched on, couldn't have more personal respect for Ajit, both personally and and professionally. And even though the interaction may be different than, say, how Warren and Charlie do it, as Ajit touched on, there is a regular dialogue, both around opportunities within our two businesses and units, both if we see something unusual that the other individual should hear, we make sure we're always following up with each other. But it goes beyond that. Ajit has a great understanding of the Berkshire culture. I strongly believe I do, too. And anytime we see anything unusual in one of our businesses, it's Ajit, who I'm going to call and say, are you comfortable that we're taking this approach? Is it going to be consistent with how you think about it, how you think about it in insurance? So it goes beyond just discussing the businesses, but that maintaining the exceptional culture we have at Berkshire and building upon that. So very fortunate to have Ajit as a colleague and in a colleague and in a business. immensely enjoy working with them every day. Thank you.”

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Greg AbelMeeting2021-05-03

Part 2 - 2021 Meeting

“Yeah. So generally today, what I'm going to focus on what I'm reading is really around our businesses, what industries are in. I'm trying to understand what our competitors are doing, what's the fundamental risks around those businesses, how they're going to get disrupted. And then it always comes back to, are we allocating how? our capital properly in those businesses relative to the risks we're seeing both in our business and in the industry. So a lot of time spent on that and as that knowledge is built at sharing it back and forth with our management teams of those relevant subsidiaries and sort of fine-tuning it is really the approach.”

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Greg AbelMeeting2021-05-03conf:medium

Part 2 - 2021 Meeting

“degree, particularly be rich and old and retired, and you can actually take away an asset from that kind of an environment and give it to another state that doesn't really need it as much. So you'll get adverse selection over time, but if you're a company and you put a plant there, you can't move the plant in five or 10 or 20 years. So as the taxable base of individuals falls down simply because people select out of being a part of the population, you can't select out very well as a corporation. So you have to be very careful and think a long time before you go into some state with a huge pension deficit and a declining population because you're going to be the last man left and the pensions won't go away. And I don't think, well, anybody with a short-term outlook doesn't worry about that. You know, I mean, you know, it's just got me to pass the next election and I'm all right on that one, you know. But the, you know, we don't want to be, we're not going to stay a plant is going to be around for 50 years in some place where the population gets halved and the richer part gets cut dramatically, even more dramatically, and we still got a valuable plant there and we've got to keep operating. And we're going to, one way or another, it's not going to be a good place to be.”

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Greg AbelMeeting2020-05-04conf:medium

2020 Berkshire Hathaway Annual Meeting - Part 2 - Q&A

“Yeah. Yeah, well, I think your comment on the Fed, Warren, because as you know, interestingly, when it was first occurring, there were calls coming in, not the size of transactions were interested in, nor companies we were inclined to act upon. But there were, there was that general interest out there, as people were, in a difficult point in time, i.e., looking at their balance sheet and deciding what they were going to do. But the reality is those companies were not of interest in. Post, basically, effectively, March 23rd, the companies have been able to act. And Warren touched on it. At Berkshire Hathaway Energy, post the Fed action, we actually issued $4 billion of securities. That was associated with debts or obligations we had maturing, some short-term obligations we wanted to clearly lengthen out. And we pre-funded one of our capital programs at Pacific Corp with the thought this was the time to get the funds in place such that we were. we could proceed with what is really an excellent opportunity both for Pacific Corp or customers and ultimately for the Berkshire shareholders so we've taken action within Berkshire as Warren noted this is a very good time to borrow money which means it may not be such a great time to lend money but the it's good for the country that it's a good it's a good time to borrow money not good for Berkshire particularly although we borrowed some money so we we we we've we put our money where our mouth is that gets kind of to another question that came in from Mark McNicholas in Chicago Illinois he says Berkshire itself has a Fort Knox like balance sheet but some of its operating companies may be tight on cash during the pandemic would Berkshire consider sending cash to its operating companies to one ensure that they can get through the pandemic and to allow them to increase market share while their competitors struggle well we've sent money to a few and And we're in a position to do that. We're not going to send money indefinitely to anything where it looks like.”

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Greg AbelMeeting2020-05-04conf:medium

2020 Berkshire Hathaway Annual Meeting - Part 2 - Q&A

“Yeah. Well, yeah, it's interesting when we look at our different companies as we went into the pandemic or we're addressing the COVID-19 crisis, obviously the first focus by our management team and appropriately was our employees. employees and effectively making sure they're safe and that the business environment were in that they could continue to operate. Then we quickly moved to looking at where our customers were in this cycle, i.e., what was the underlying demand within the business? And to great credit to our managers, they very much have adjusted their businesses consistent with the underlying needs and demands of our of our customers. So effectively, they're moving with the customer, meaning very few of our businesses have actually required funds. Some have, and as Warren said, we've advanced the funds to them, but the businesses have really reacted in a way where they're managing consistent with where the market's at, i.e., the demand for their products. Berkshire is almost certain to generate cash. I mean, at nothing's 100% certain. But, and we're, as Greg mentioned, at Berkshire Athaway Energy, we had some short-term financing. We don't have short-term financing at any degree. We'll never get ourselves in a position where we have a lot of money that can come do tomorrow. And people that were financing heavily with commercial paper and then found their business stop. Well, you've seen what's happened to the airlines.”

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Greg AbelMeeting2020-05-04

2020 Berkshire Hathaway Annual Meeting - Part 2 - Q&A

“What I would add, Warren, is that as we are in the the, you know, sort of crux of the pandemic, we're still dealing with it, so our businesses have adjusted. Some have had to adjust more. We have, if you look at Berkshire Hathaway Energy, for example, you can see U.S. electricity consumption's down 4%. That realistically doesn't impact that business in a significant way, and longer term, we'll continue to grow that business. So even during the crisis, a relatively small impact of the business. But as Warren knows, we do have retailers that their doors are shut right now, be it our C's candy, some of our jewelers, and at that that point in time, we do adjust and adapt to the environment, i.e., we adjust our workforce, but equally we do see, for example, C's, at a point our stores will reopen. And at that point, we reemploy the folks. And overall, for Berkshire as a whole, as Warren said, five years from now, we see our employment numbers being far greater than they are today, and that we see great prospects within the operating businesses as a whole.”

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Greg AbelMeeting2020-05-04conf:medium

2020 Berkshire Hathaway Annual Meeting - Part 2 - Q&A

“Yeah. Well, I was just going to add on the Marman example, our 97 companies there. For example, we have a food service group which sells equipment to a variety of the restaurants. We have a few businesses that realistically were challenged when the industry was performing really well. And as we come out of the crisis, their economic prospects aren't going to be better. And in fairness to the teams and the employees in there, they understand that and they're working through it. And there'll be other opportunities potentially within the company. within Marmon and things like that. But, you know, there's a very specific answer or example relative to the question.”

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Greg AbelMeeting2020-05-04conf:medium

2020 Berkshire Hathaway Annual Meeting - Part 2 - Q&A

“literally as we speak, continuing to adjust their business relative to the demand that would come out of Boeing. They would be having weekly calls with Boeing, recognizing what are the production orders there and adjusting the business accordingly. Boeing raised $25 billion just a day or two ago. And they raised $14 billion before that. And a year ago, they felt they were in a fine cash position. And I understand how all that happened. Air buses had the same situation. They've made some comments recently within the last week, you know, the fact that, you know, they really don't know what their future is. And I don't know what their future is. We're going to have aircraft in this country. We're going to be flying. But the real question is whether you need a lot of new planes or not. And when you're likely to need them and it affects a lot of people. It certainly affects precision cash parts. It affects general electric. It obviously affects Boeing. And it's it is a blow to essentially have a blow to essentially have your demand dry up. And it goes up in the chain. And, you know, the aircraft manufacturers didn't, they didn't bring it on themselves. The airlines didn't bring it on themselves. precision cash parts didn't bring it on itself. General Electric didn't. It's basically that we shut off air travel in this country. And what that does to people's habits and how they behave in the future, it's just hard to evaluate it. I don't know the answer. But we do know that we'll have an effect on precision cash parts. And how severe it will be, it depends on the same sort of variables that are hitting Boeing and... And you name the company in aircrafts. And aircraft's a big business. And this country's good at it, incidentally, too. I mean, if you think about Boeing, you know, it is what hell of a company. And it's important. It's a huge exporter and it affects a lot of jobs. And some of them are with us. And we hope for the best and we wish everybody the best, obviously. and we wish ourselves the best in it. But part of it is out of our, certainly out of our control. Right.”

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Greg AbelMeeting2020-05-04

2020 Berkshire Hathaway Annual Meeting - Part 2 - Q&A

“I fundamentally, without Warren and Charlie at the helm, I don't see the culture of Berkshire changing. I don't see our billet, which a large part of that is having the business acumen to understand the transaction, the economic prospects, and then the the ability to act quickly. I really don't see that changing as we evolve. Listen, you know, there's no one better than Warren and Charlie, but equally, we've got a talented team in Berkshire, both at the Berkshire level and within our managers that can obviously look at opportunities too very quickly. But, you know, the reality is it's a huge advantage we have right now when we would clearly want to be in a position to maintain that position of strength, Warren?”

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Greg AbelMeeting2020-05-04

2020 Berkshire Hathaway Annual Meeting - Part 2 - Q&A

“Greg? Well, I would just add and echo again that when it comes to the PPP loans, we're not aware of any of our businesses taking them. And, you know, as I said, we encouraged them if they were ever thinking that there was going to be a dialogue and we're not aware of any businesses pursuing them. I would also just add that when you look at our businesses as we went into the crisis, they responded very well. responded very well. So as we look at our businesses, and Warren touched on this, our large businesses, our mid-sized businesses, and even as you go down from there,”

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Greg AbelMeeting2020-05-04conf:medium

2020 Berkshire Hathaway Annual Meeting - Part 2 - Q&A

“they're in very sound shape as we go through the pandemic and are really preparing to emerge now. So they're evaluating, listen, they're going to have a different customer, there's going to be different consumer behaviors, how our employees work, a lot of work at home now, does that make sense? And the communities we're operating in have all changed. have all changed, but we're literally moving from the point of, okay, we're, we're making it through the crisis and really planning to reemerge now. And I would say our businesses aren't an extremely sound place. We don't know when the, what?”

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Greg AbelMeeting2020-05-04

2020 Berkshire Hathaway Annual Meeting - Part 2 - Q&A

“Well, I would agree one. There's never guarantees, but when I look at the assets we have in place, and the teams that are in place, i.e., you're committed to Berkshire, but we have dedicated teams that equally are dedicated to Berkshire, and they're sure going to give it their best effort every day. And I, when I look at the assets and the people, I think we have, as you said, And you can't guarantee it, but we have a great chance of sure giving a good effort to help perform it. It's hard to imagine getting a terrible result of Berger, but, you know, anything can happen. And what I do know is it would be easier to be running $5 million than our book net worth at Berkshire at the quarter end, I think, was $370 some billion, which is down.”

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Greg AbelMeeting2020-05-04conf:medium

2020 Berkshire Hathaway Annual Meeting - Part 2 - Q&A

“But it's still greater than the book net worth of any corporation in this. the United States. That's probably, I mean, maybe there's some federal corporation that has more, but in terms of, it may be the greatest in the world, I'm not sure. And that makes life difficult in some ways too. Right. And the potential of our operating businesses are substantial. When you think we've talked about energy, you touched on it, that that infrastructure is continuing to change. There's, you know, we're ready for $100 billion of investment opportunities there. If we just look at the business over the next 10, years and the infrastructure that's required and how it's changing substantial, substantial investments there. Just tell me we have very good prospects. It's, and we're well positioned to pursue them. Which again, to me, when you look at our core businesses, you touched on them, Burlington, the insurance and energy, our downside is very nicely protected. We have three really core great businesses. Yeah. And we're better positioned than anybody in the energy business. Just because we don't have dividend requirements, we retain 28 billion of earnings over 20 years, that you can't do it if you run a normal public company. And we've got a huge appetite, and the country needs it, the world needs it. And we are a very, very logical, well-structured, well-managed, I would say, because it doesn't involve me. doesn't involve me, a company, to participate in just huge requirements around the world. Now, you know, they're slow, and they involve governments, and they, I mean, state governments, and there's a lot of, it's not anything that happens dramatically. It will happen, and Berkshire should participate in a huge way. We can do things in insurance, nobody else can do. That doesn't mean much. many times, but occasionally it may be important. So there are some advantages to size and strength, but there are disadvantages to size, too. But there are disadvantages to size, too. If we find some great opportunity that for a billion dollars to double our money, that's a billion pre-tax, and that's $790 million aftertax, and on a market value of $450 billion or whatever it may be, it's a market value. it doesn't amount too much unfortunately we'll still try and do it if we can yeah”

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Greg AbelMeeting2020-05-04

2020 Berkshire Hathaway Annual Meeting - Part 2 - Q&A

“And I'm happy to say with the assets we have in place and how we've maintained the energy assets, we generally look at our depreciation as being more than adequate if we deploy it back into capital to maintain the asset. Now, the unique thing in the lion share of our energy businesses that are regulated, and that exceeds 85% of them, 83% of them, we still earn on that capital we deploy back into that business. So it's not a traditional model where you're putting it in, but you're effectively putting it in to maintain your existing earnings. So it's not drastically different, but we do earn on that capital. But what we do spend a lot of time in that. And that's what, when Warren and I think about the substantial amounts of opportunities, that's incremental capital that is truly needed within new opportunities. So it's to build incremental wind, incremental transmission that services the wind or other types of renewable solar. That's all incremental to the business and drives incremental both growth in the business. It does require capital, but it does drive growth growth within the energy. business. So there's really the two buckets. I think we would use a number a little bit lower than the depreciation. We're comfortable. The business can be maintained at that level. And as we deploy amounts above that, we really do view that as, quote, incremental or growth cap-ex.”

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Greg AbelMeeting2020-05-04

2020 Berkshire Hathaway Annual Meeting - Part 2 - Q&A

“Oh, yeah. So we have basically, as Warren's highlighting, $40 billion. in the works of capital. That's over the next, effectively, nine years, 10-year period. A little, approximately half of that we would view as maintaining our assets, a little more than half of it's truly incremental. And those are known projects we're going to move forward with. And I would be happy to report we probably have another 30 million, 30 billion that aren't far off of becoming real opportunities in that business. Now, as Warren said, that takes a lot of time. It's a lot of work. The transmission projects, for example, we're finishing in 2020.”

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Greg AbelMeeting2020-05-04

2020 Berkshire Hathaway Annual Meeting - Part 2 - Q&A

“We're initiated in 2008 when we bought Pacific Corp. I remember working on that transmission plan, putting it together, thinking six to eight years from now, we'll have them in operation 12 years later. And over that period of time, we earn on that capital. We have invested. And then when it comes in the service, we earn on the whole amount. So we're very pleased with the opportunity. But we plant a lot. of seeds, put it that way. Yeah, and these are not, it's not like they're super high return thing, but they're decent returns and over time. And we're almost uniquely situated to deploy the capital, as opposed, I mean, you could have government entities do it, too, but in terms of the private enterprise. And they take a long time, they earn decent returns. always said about the energy, but it's not a way to get real rich, but it's a way to stay real rich. And we will deploy a lot of money at decent returns, not super returns. You shouldn't earn super returns on that sort of thing. I mean, it does, you are getting rights to do certain things that governmental authorities are authorizing, and they should protect consumers, but they also should protect consumers. people to put up the capital. And, you know, it's worked now for 20 years, and it's got a long runway ahead.”

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Greg AbelMeeting2020-05-04

2020 Berkshire Hathaway Annual Meeting - Part 2 - Q&A

“I think the comment on the capital allocation is critical, that we have the ability to move the capital amongst the, be it the operating businesses, or up to the insurance or down. with really no consequences to our shareholders. That's the value driver, the unique structure of Berkshire, and it creates immense value. So that's all I would add, or second, I guess.”

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Greg AbelMeeting2020-05-04

2020 Berkshire Hathaway Annual Meeting - Part 2 - Q&A

“No, I think as you articulated, I think it was in the annual report too. I mean that we don't know the answer. But as you said, some of the fundamentals right now are very interesting relative to having a negative interest rate. But I know, I hate to say it, but I don't have anything to add. I'd love to be Secretary of the Treasury if I knew I could keep raising money in negative interest rates. That makes life pretty simple. And we're doing things that we really don't know the ultimate outcome. I think, and I think in general they're the right things, but I don't think they're without consequences. they could be kind of extreme consequences pushed far enough, but there would be kind of extreme consequences if we didn't do it as well. So if somebody asked us to balance those those questions.”

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Greg AbelMeeting2020-05-04

2020 Berkshire Hathaway Annual Meeting - Part 2 - Q&A

“Well, I think there's no question obviously we'd prefer to be in a less capital intensive business. But there are unique opportunities there. And the one I would touch on when I think of inflation or even potentially as we go through this crisis and maybe a prolonged one or depending on how long it takes to recover. I mean, we aren't any unique, when we're looking at energy or rail, we do have a certain amount of pricing power. And it's through our regular. regulatory formulas or how our arrangements are with our customers. So if we then were to move into an inflationary period, it's not perfect protection, but those businesses generally can recover a significant portion of their costs, even in an inflationary environment and still earn a reasonable return. They're not going to be great returns, as you highlighted weren't, but they're still going to earn a reasonable return on their capital, even in an inflationary period. There may be some lag and some things like that, but there's still going to be very sound investment.”

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Greg AbelMeeting2020-05-04

2020 Berkshire Hathaway Annual Meeting - Part 2 - Q&A

“We'd be happy we own the railroad, very happy. Well, we'd be investing a lot of capital in it, but that business, in my view, is a very, very solid business for many, many, many, many decades to come. I said originally we bought it with a hundred-year time horizon, and I've extended that. it will earn more dollars if there's a lot of inflation. In real terms, who knows, but it would earn a lot more dollars. And a lot of the energy projects would, but it's better if we don't have inflation, and it's better if we don't have capital, if we can find the same sort of businesses that aren't as capital-intensive. We've got capital. I mean, we're ideally positioned for capital-intensive. intensive businesses that other people have trouble raising capital for, but they've still got a promise decent returns.”

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Greg AbelMeeting2020-05-04

2020 Berkshire Hathaway Annual Meeting - Part 2 - Q&A

“No, the only thing I know you've commented on in the past Warren is that I think the one thing we are seeing, and obviously we're supportive of buybacks, but there are companies that used probably their financial engineering was just a little extreme and too cute that effectively you're using every ounce of your balance sheet to buy back stock at a time where you're really creating no cushion for your business for any type of event or bump in the road. And I, you know, we're going to see that, and I think that's a very unfortunate outcome of them, and hence you get some of the backlash. But there's still companies, as you highlighted many, that do it right. Yeah. If they're buying it back because it's fashionable, because they really do like the idea, There's nothing wrong with taking an action that increases the value of the remaining shares, but if they're doing it very...”

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Greg AbelMeeting2020-05-04

2020 Berkshire Hathaway Annual Meeting - Part 2 - Q&A

“No, I think our approach warns the right approach. I mean, you're always, I can't really add anything other than the approach is the right approach. We approach it when we see it's the right thing for our shareholders to be repurchasing, and that doesn't mean we're repurchasing all the time or the view doesn't change. There could be a price relative to the value at the time, not relative to what it was worth a year ago. I mean, the value of certain things have decreased. airline position was a mistake. Berkshire is worth less today because I took that position than if I hadn't. And there are other decisions like that. And they're not, you know, it is not more compelling to buy the shares now than it was when we were buying them. It's not, it's not less compelling. I mean, it's a wash, but we didn't do anything. We, it's not gotten, it's, the price has not gotten to a level. not been at a level where it really feels way better to us than other things, including the option value of money to step up in a big, big way.”

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Greg AbelMeeting2020-05-04

2020 Berkshire Hathaway Annual Meeting - Part 2 - Q&A

“Same advice, excellent advice. No, I have. three that carefully use their credit card more, I would say, for not the, obviously people use it a lot more as they'd go into the digital world and e-commerce world, but then the goal has to be to repay it. It doesn't mean you, because you have to use it for those type of transactions, you run up the balance. But there's an incremental risk there now. It's a matter of convenience for some people. I would have trouble if I were paying 12% for money or whatever it might be, it would not be a good thing. You won't see Berkshire paying that.”

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Greg AbelMeeting2020-05-04

2020 Berkshire Hathaway Annual Meeting - Part 2 - Q&A

“Greg? Yeah, I, yeah, the only other group that I would highlight, I think it'll be very interesting how it plays out is, with the number of homeschooling and the children that are home-schooling, and the children that are home, I think there's a, we've always had so much respect for our teachers, but we all talk about how we don't take care of them. And, you know, it is remarkable to hear how many people comment that clearly we don't recognize. recognize. You know, I have a little eight-year-old Beckett at home, and, you know, plenty of challenges for mom, but all of a sudden you respect the institution, the school, the teachers, and everything around it. And then when I think of our companies and the delivery employees we have, it's absolutely amazing what they're doing, and they're truly on the front line. You know, that's where we have our challenges around keeping them health and safety, and then you go all the way to the rail. The best videos you see out of our companies are when we're going to our companies are when we have our challenges”

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Greg AbelMeeting2020-05-04conf:medium

2020 Berkshire Hathaway Annual Meeting - Part 2 - Q&A

“And we have folks that are actively engaged in moving supplies, food, medical products, and they're so proud of it, and they recognize they're making a difference. So a lot of it is we just owe them a great thanks. And, you know, Warren, you touched on it, we can, some way, maybe hopefully longer term, compensate them. But there's a great deal of thanks, and I probably just think an immense amount, new appreciation for a variety of folks. We're going the right direction overall in the country, but it's been awfully slowly.”

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Greg AbelMeeting2020-05-04

2020 Berkshire Hathaway Annual Meeting - Part 2 - Q&A

“Yeah. No, I think it's always keeping the best parts of it. And I even think if we look at the current environment we're in, i.e. in the pandemic, and we have to do it only when we can do it properly and re-emortment. but in some ways the best opportunity for people is when we're back working clearly and that the systems function again but that that's that's the obvious and then there's as Warren you've highlighted there's you know there's a lot of imperfections but it's still it's definitely the best model out there that just needs some fine tuning and Becky at the end I would just yeah I would just say that no oh sure can I can I Can I just look at one more quick question I forgot this one.”

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Greg AbelMeeting2020-05-04

2020 Berkshire Hathaway Annual Meeting - Part 2 - Q&A

“I agree with the person you named. Yeah, yeah. And Becky, I would just, I would just say again that we may have, I hope we don't. But we may get some unpleasant surprises. We're dealing with a virus that that spreads. We're dealing with a virus that spreads its wings in a certain way, you know, in very unpredictable ways. And how the, how the, how Americans react to it, you know, there's all kinds of possibilities. But I definitely come to the conclusion after weighing all that sort of stuff, never been against America. So thanks.”

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Greg AbelInterview2020-02-25

Buffett: Coronavirus threat shouldn't change how you invest | February 24, 2020

“It's operating margins have improved. But they haven't improved as much as some other railroads. Do you believe in precision scheduling railroading? Well, we'll see. I mean, we've watched it plenty. And for those who don't know what that is, it's something that kind of irritates customers because it makes things a little more rigid, but it does improve. Yeah, it makes the customers adapt to the railroad more than the railroad adapting to the customers. And practically, everybody's done it. And a fellow named Hunter Harrison was enormously successful. Who worked with Bill Ackman at the Canadian Pacific. Yeah, he worked with the BNSFF. if you go back far enough, and there's a book about it. It's very interesting. But he did it at the Illinois Central, the Canadian National, the Canadian Pacific, and then he was going over to the CSX. He developed a method of railroading where the customer does adapt more to the railroad and improved margins dramatically. Our margins are close to what the better railroads. Well, there's only a few, they get from precision railroad. On the end, we've gained share. Because the customers don't like it. Because the railroads apparently, or the railroad customers like us better. And over the long term, we'll see. But it isn't like it's something we can't do.”

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Greg AbelInterview2019-07-01conf:medium

Buffett: Stocks are 'ridiculously cheap' if rates don't move | May 6, 2019

“I mean, so you'll have people fanning the flames for their own interests in politics or their own interests in business. And it's not easy to navigate. But leadership has... that's the job of leadership is to take on the tough problems. Having said that, the economy has held up very well in the face of any tensions that we've seen to this point. Jobs report incredibly strong on Friday. The last GDP report was very strong, too. So... You can't stop America. You can't stop China, though, either. But you can't stop America. I mean, we live as a country. You know, it's extraordinary what we have compared to 30 or 40 years. to 30 or 40 years ago. Even in agriculture, it makes it tough in agriculture because we get more productive all the time and that tends to depress prices. But this country is going to move forward. I mean, there isn't a question about that. But China's going to move forward. And the way to try to do it is to do it that maximizes what both countries can do well and more trade is better. But trade in specific, industries can hurt specific industries here. And that's a huge problem. The president, the heads of both countries have to be the educators in chief. And they have to explain why trade is good for the populace as a whole, and it can be terrible for people in certain industries. And then a rich country takes care of those people that become roadkill in the process of producing a better life for 330 million Americans.”

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Greg AbelInterview2019-07-01conf:medium

Buffett: Stocks are 'ridiculously cheap' if rates don't move | May 6, 2019

“It's the problem of escalation and anything. We have the problem of that with that. problem of that with nuclear weapons. I mean, the escalation and it gets more and more dangerous as people become feeling more and more threatened and their own local political situation demands more and more action. I mean, that's the dynamic that you're facing any time you get to these major problems between countries. And that requires the wisdom of the leaders, but to some extent it requires the wisdom of the people.”

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Greg AbelInterview2019-07-01conf:medium

Buffett: Stocks are 'ridiculously cheap' if rates don't move | May 6, 2019

“I mean, I would say it's not more difficult than I expected, but I expected to be ungodly difficult. And you have an industry which you have a industry which basically is about the same size as the U.S. government's receipts. And everybody always says every dollar in the budget, you know, has a constituency and every dollar in an industry expenditure has a constituency. And we've got the right person, we've got the right partners. Capital isn't a key part to it, but we've got people willing to spend the money. But we'll spend whatever money it takes if we're money. making progress. And it is going to be a long, tough pull to make major journey to make major changes. And it has no guarantee of success at all, but there's nobody, I think, that's in a better position in terms of the number of employees and the ability of the people that are partnering to get along and all kinds of things. To perhaps, perhaps, come up with something that makes the system more efficient and we'll try, but it's nothing will happen quicker. So there's no revolutionary move or anything of the sort. And there will be lots of opposition to any change. In interviewing people to run the place, we interview people in all aspects of the medical profession and activity. And they all agree 100 percent, you know, this system needs change, but of course, not my part. And that's very understandable. We expect that. And we'll find out what happens. But I know this. I would rather have the private sector come up with a solution than throw it all the government. And if the private sector doesn't come up with some solution to the increase and cost, quality is, you know, in many ways, it's unbelievable. You're just hearing Bill talk about. the advances that can be made. But it costs 5% of GDP in my lifetime or even in my adulthood, up to 18%. The federal budget has stayed kind of constant around 17%. Everybody thinks it's out of control and all these terrible things. And here are federal receipts, I should say. Now this has gone from 5 to 18 and nobody really thinks it's going to stop. Charlie, you've been, go ahead. You've been at Good Samaritan, the chairman there, for how many years?”

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Greg AbelMeeting2019-05-06conf:medium

Afternoon Session - 2019 Meeting

“But they've done a very good job of getting, well, they got a underpriced coal contracts worked out, as did we. They've also, they've done a very good job on expenses, and there's no fundamental reason why the BNSF franchise, I always like the Western Railroads better than the Eastern not by a dramatic margin, but I think the West will do better in terms of ton miles over time than the Eastern roads. And we've got some great routes. some of which were underwater in March for a while. And we pay a lot of attention to what's going on at the Union Pacific, as we should. And the future, it's not like we're losing business to anybody, but they have been operating at more efficiently, in effect, in effect, that's not like we're losing business to anybody, but we, they have been operating operating operating at more efficiently, in effect, than we have during the last few years. And like I say, we take notice of it. They've cut a lot of people, I mean, right here at Omaha, and we'll see what that does in terms of passenger satisfaction, but we are measuring ourselves very carefully against what they do. And if changes are needed. are needed. We'll do them. We've got a wonderful asset in that business. And when I bought it, I said it's for 100 years. It's for a lot more than 100 years. It is a very, very fundamental business. And we've got a wonderful franchise, and we should have margins comparable to other railroads.”

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Greg AbelMeeting2019-05-06

Morning Session - 2019 Meeting

“And I think that there's been a good deal that's been learned by watching these four railroads. And we will, if we think we can serve our customers well and get more efficient in the process, we will adopt whatever we observe. We don't have to do it today or tomorrow. But we do have to find something that gets at least equal and hopefully better customer satisfaction and that makes our railroad more efficient. And there's been growing evidence that from the actions of these other four railroads, there's been growing evidence that we can learn something from what they do. Charlie?”

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Greg AbelMeeting2019-05-06

Morning Session - 2019 Meeting

“No, we've examined a lot of things in terms of LNG. I mean, obviously, we want to become more energy efficient as well as just general. efficient. And I'm not sure about the value of freight. You mentioned three and a half percent. I believe, I mean, I'm not sure what figure you're using as the denominator there. Because if you look at if you look at the movement of traffic by ton miles, Rails are around 40 percent of the U.S. We're not talking local deliveries or all kinds of things like of that. But they're 40 percent, roughly by rail. And BNSF moves more ton miles than any other entity. We move 15 percent plus of all the 10 miles moved in the United States. But if you take trucking, for example, on intermodal freight, we're extremely competitive on the longer halls, but the shorter the hall, the more likely it is that the flexibility of freight”

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Greg AbelMeeting2019-05-06

Morning Session - 2019 Meeting

“where a truck can go anyplace, and we have rails. So the equation changes depending on distance haul and other factors, but distance halls is a huge factor. We can move a ton mile with 500, we can move 500 plus ton miles of freight for one gallon of diesel. And that is far more efficient than trucks. So the long haul traffic and the heavy track traffic is going to go to the rail, to the rails and we try to improve our part of the equation on that all the time. But if we're going to transport something 10 or 20 or 30 miles between a shipper and a receiver and there, you're not going to move that by rail. So we look at things all the time, I can assure you. Carl Ice is in, well, he's probably here now and it'll be in the other room. And he's running the railroad. You're free to talk to him. But I don't see any breakthrough like you're talking about. I do see us getting more efficient year by year by year. And obviously, if truck's, driverless trucks, that moves things toward trucking, that moves things toward trucking. But on long haul, heavy stuff. And there's a lot of it. You're looking at the railroad that carries more than any other mode of transportation. And BNS is the leader. Charlie?”

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Greg AbelMeeting2019-05-06conf:medium

Afternoon Session - 2019 Meeting

“I'd like to point out one thing on independent directors. I mean, I've been on 20 public company corporate boards not counting any virtue or its subsidiary. So I've seen a lot of corporate boards operate. And the independent directors, in many cases, are the least independent. I mean, if the income you receive as a corporate director, which typically may be around 250,000 a year now, if that's an important part of your income, and you hope that some of your income, you hope that some some other corporation calls the CEO and says, how's so-and-so is a director, and they, the current CEO, says, oh, he's fine, never raises any problems. And then you get on another board at 250,000, and that's an important part. How in the world is that independent?”

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Greg AbelMeeting2019-05-06

Afternoon Session - 2019 Meeting

“I'm going to throw that over to it, Gene, just a second, but I will tell you that we have three owners of Berkshire-Hadaway Energy. We are the 91% owner, and there are no three owners that are more interested in pouring money into sensible deals within the utility industry or are better situated in terms of the people we have to maximize any opportunities. We have never had a penny of dividends in, in whatever it is, close to 20 years of owning mid-American energy, and other utility companies pay high dividends. They just don't have the capital appetite, essentially, that we do. So it's just a question of finding sensible projects. And I would say that there's no group that is as smart about it, as motivated about it,”

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Greg AbelMeeting2019-05-06

Afternoon Session - 2019 Meeting

“Yeah, yeah, afternoon. Yeah, Greg, you touched on it. A couple critical areas we go forward is to look realistically in the 21, 20-22 time frame, because as you've touched on, we've got a great portfolio as we finish out 20-20-202 time frame, because as you've touched on, we've got a great portfolio as we finish out 2019, 2020, and it's really been focused on building the renewable energy projects in Iowa, expanding the grid. But equally, we do have those opportunities in our other utilities. The footprint in Iowa, realistically, is getting pretty full. As we had 100% renewables, Warren touched on it, every time we get a new data center, that means we can build another 300 megawatts of renewables. We'll continue to do that. But when you look at Pacific where we serve six states in the in the northwest. We've really just embarked on an expansion program there. The first part was to build significant transmission, so expand the grid, and then start to build renewables. But just to give you some perspective of the regulation that exists in place, we started that project in 2008, and we're realistically building the first third of it. But we do have the planning in place for the second phase and the third phase, and the third phase. phase, and that's what you'll see come into place in 2021 and 23. And the reality is we'll continue to do that in the energy with it really, again, the focus being on both grid expansion so we can move the resources and then supplementing it with renewables. So it's exactly what you've touched on. And we haven't identified the specific projects yet, so we never put them in our capital forecasts that we disclose to folks. But as they firm up, and we know they're... they will go forward. Clearly, you'll see some incremental, incremental capital, and that's capital we clearly earn on behalf of the Berkshire shareholders as we deploy it. Thank you. We will put a lot of money in the energy.”

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Greg AbelMeeting2019-05-06

Afternoon Session - 2019 Meeting

“Oh, Charlie, there's realistically no one ahead of us in the U.S., let alone in Iowa. When you look at our, the amount of energy we produce relative to what our customers consume, we really do lead the nation in Iowa. And our rates about half out of our main government in Iowa to boot?”

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Greg AbelMeeting2019-05-06

Afternoon Session - 2019 Meeting

“Yeah, Warren. Just want to kind of maybe follow up on those past two questions, because there is sort of a theme there. it seems to me that there's definitely more of a home country bias when we look at the acquisitions and investments that Berkshire has done historically.”

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Greg AbelMeeting2019-05-06

Afternoon Session - 2019 Meeting

“So just for everybody, I think they heard the question from Jonathan, but we've owned the utility there for approximately five years. When we inherited the utility there for approximately five years, when we inherited the utility. we knew it had some fundamental issues around its customers. The relationships were really strained from day one because they'd had a history of continuing to increase rates, and they really weren't delivering renewable energy or meeting the customer's needs or expectations. So we knew we had some challenges there. As we sit here today, we've had five customers leave our system. Those customers still use our distribution services. So the only thing. we do not provide them is the power. So we have lost an opportunity to sell them power, and we've lost the associated margin on that. And we're disappointed with that. We do recover, you know, substantial fees, as you noted. How the commission looked at it was, well, you'll lose this customer. We'll give you effectively six years of profit on that. And by then, you should have grown back into your normal load. actually it's a fair outcome. Our load is higher than it was relative to when those customers have left. So we've grown through that and it's consistent with their belief. The fundamental issue, and you've touched on it, why are they leaving? There are economic reasons for them leaving. And the fundamental reason is in year seven, they no longer bear sort of the societal costs that are being imposed by the state. They don't have to bear the cost of renewable energy. They don't bear the cost of energy efficiency. And they viewed it as sort of the time to exit out of that model. We do have a variety of legislation that's going to levelize the playing field. We've had a number of customers that announce they were leaving now have entered into long-term agreements with NV Energy. And I really do believe our team has the right model, which we're much more focused on delivering a great value proposition to our customers. So it has to include price. But equally, we're building substantial.”

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Greg AbelMeeting2019-05-06

Afternoon Session - 2019 Meeting

“financial renewable energy there now. And long term, our team will deliver a great proposition to them. And I think that cost, and NV energy will, it will prosper in the long term. We're going to be happy with it as a long-term investment. Thank you.”

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Greg AbelMeeting2019-05-06

Afternoon Session - 2019 Meeting

“Right. Yeah. Yeah, that's great. So it's, you know, Warren's really expanding on what we're, the focus we've brought to delivering something to the customer. So if you'd looked at the prior 10 years, they pretty much had a rate strategy that every second year, their rates would go up sort of by the cost of inflation. And that pretty much materialized. year after year. We came in immediately, just like we've done in Iowa. So we've built all that renewable in Iowa, and we've never increased rates since the date we acquired it, 1999. So rates have been stable, and we don't ever see raising rates in Iowa until probably 2030 or 2031. Our team took a very similar approach in Nevada, which was to, you know, stabilize it. So rates are down probably five to seven percent since we've owned. so we haven't had rate increases. We've announced substantial rate increases, again, that'll take effect every two years. So just like we used to be able to have rate increases, we have a view of when we'll decrease their rates. The rates will go down again in 2002. We've, I mean, in two years. And then on top of that, there's been an approach to to eliminate coal, as Warren touched on. So fundamentally, when we acquired it, all their coal fleet was operating. We've retired a substantial portion of the coal fleet already. And by, I believe it's within a year of this, 2023, we'll have eliminated 100% of their use of coal in that state. And it was a substantial portion of their portfolio in the past. So team's done a great job. Thank you.”

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Greg AbelMeeting2019-05-06

Afternoon Session - 2019 Meeting

“Warren, a lot of Berkshire's success over the years has come from the fact that you and Charlie have had the luxury of being patient, waiting for the right opportunities to come along to put excess capital work, even if it has led to a build-up of large amounts of cash on the balance sheet. This has historically worked out well for shareholders as you and Charlie have been able to take full advantage of the disruptions in equity and credit markets or special situations like we saw with the Oxy deal to negotiate deals on terms that ultimately benefit Berkshire shareholders. That said, there is an opportunity cost attached to your decision to hold on to so much cash, one that investors have been willing to bear, primarily by foregoing a return of excess capital's dividends and sherry purchases, as well as seeing lower returns on cash holdings. As we look forward, how certain can we be that this will still be the case once you're no longer running the show,”

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Greg AbelInterview2018-08-30

Buffett: We bought 'just a little' more Apple, and bought back 'a little' Berkshire | August 30, 2018

“Yeah, there are a few. Definitely. And we buy steel, you know, for example. I mean, at my tech, or we've buy a lot of places. And we are seeing some effects from that. And we're seeing some effects from inflation. I'm sorry, from inflation. We've seen more in the way of cost increases in the last year, if you go across all of our businesses. But particularly, But particularly building materials or we saw paint. I mean, the can it comes in. That is a lot more expensive than it was a year ago.”

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Greg AbelInterview2018-05-07

Criticizing the cryptocurrency craze | May 7, 2018

“Well, that's absolutely true. I mean, we have a lot of jobs. We have, if you would want to be a carpet installer, you can make very good money because there's a shortage of people who know how to sell carpet and we can teach you to do it. It takes a little while, but that's a very good job. And our home builders, and you've read about this elsewhere, but we have, in addition to having a manufactured housing operation, we have a site build operations, as they call them, and we're in Denver and Austin, Texas, various places. And we have a hard time getting people for certain of the construction trades. And again, we're actually funding a school in Denver. We probably have other participants doing it just to teach people jobs that are, can pay them $60,000 or $60,000 a year. And there's, employment is tight in some areas. areas. There's no question about it. What do you do? Do you end up having to pay more than $50,000 or $60,000 a year?”

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Greg AbelMeeting2018-05-05conf:medium

Afternoon Session - 2018 Meeting

“job doing it. So I give great credit to Paul. He increased his physical facility. Started on that a few years ago, and it's a godsend that he did it, because with the business going through there now, we wouldn't have been able to handle it. But it's a competitive business. I mean, if you look at Aero Electronics, you know, on the NERC Stock Exchange, we've got competitors. I think Paul was doing a better job by a considerable margin than they are. And I'm delighted as part of the Berkshire family. There will be times when that business slows down because their customers, you know, will have their own cycles. And when it does, we'll go down. But over time, that business is going to grow.”

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Greg AbelMeeting2018-05-05

Morning Session - 2018 Meeting

“I think there comes a point where the customer says, you know, I'll only pay X and you have to walk away and there's a great temptation when you're employing, particularly employing thousands of people and you build distribution facilities and all of that sort of thing, take care of them to meet what you'd like to term as irrational competition. But that is capitalism, and you're right. We took, the earnings went up quite a bit from the time we bought it, and we're still earning more than then, and we've earned a lot of money over time. But as they say, a fair amount of that is actually coming from liquor distribution and activities in about four states that we purchased, very well run, and we will do our best to get the margins up, but I would not, I could not tell you, give you a really, your guess is almost as good as mine or better than mine maybe as to what margins will be. be in that distribution business five years from now. It's a very essential service. We do 40-some billion dollars, and we move more of the product of all kinds of companies that names are known to you than anybody else. But when you get, when you get Kraft Hines, for that matter, or Philip Morris or whomever it may be on one side of the deal, and you'll get Walmart and some other 7-Eleven on the other side of the deal. Sometimes they don't leave you very much room in between.”

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Greg AbelMeeting2018-05-05

Afternoon Session - 2018 Meeting

“Thanks, Warren, and appreciate the comments there. What we've prepared here is in response. is in response to the proposal, it demonstrates the one future initiative goal as it was highlighted. They'd like to see our pipelines operating by 2025 at a 1% throughput, or loss of throughput at 1%. I'm happy to report as the slide shows that in 2017, our throughput loss was 0.046%, 20 times better than the request in 2025. Thank you. It's a great compliment to our operating team, obviously. They take the issue that it's been highlighted very seriously.”

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Greg AbelMeeting2018-05-05

Afternoon Session - 2018 Meeting

“I would also add, as it was noted, we're part of the EPA program where we report on a voluntary basis. Our practices are disclosed and reviewed by the EPA, and additionally added on our website. Accordingly, I strongly feel we're getting the results in disclosed. in disclosing the appropriate information. Thank you.”

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Greg AbelMeeting2018-05-05

Afternoon Session - 2018 Meeting

“Yeah, we do everything that was touched on. I'll just maybe add a few points for our shareholders. Obviously, sustainability. is a priority for Berkshire. And each of our operating subsidiaries, it was highlighted that a number of them have sustainability reports,”

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Greg AbelMeeting2018-05-05

Afternoon Session - 2018 Meeting

“but I would go beyond that. If you go to our various companies' websites, you'll see specific actions they're taking relative to sustainability. So it may not be summarized in a specific report, but that type of information is available. I can also add that when you think of the Berkshire Hathaway Energy, Corporation. We're trying to lead by example with support from Warren Charlie, Walter Scott. I'm happy to report if you look at where our energy production is right now at the end of 2017, 50% of our energy that is produced and consumed by our customers comes from renewable energy. That's something we're strongly communicating across the U.S. and globally as an example of what can be done in our industry. industry, and I'm happy to report by the end of 2021, 100% of the energy utilized by our customers can be met through renewable energy in Iowa. So I understand the concept of sustainability. We're working across our organizations to share best practices, but as Warren highlighted, it really resides in each of our companies, but it will be encouraged and you'll continue to see great results. to see great results. Thank you.”

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Greg AbelInterview2017-09-10conf:medium

Bill Gates + Warren Buffett + Charlie Rose @ Columbia University 2017 Video (Best Quality)

“brexit and britain again uh i i was surprised by the the brexit vote and the notion of the populist uprising that are taking place in a sense of of feeding off of that well there's no doubt that that younger people and urban people in terms of their social mores and you know being seen to benefit relatively more from the new technology and things that are out there there is somewhat of a divide there the fact that that that would lead to these political results is a bit of a wake-up call to say okay what is in terms economic and social issues are you know can we by improving medicine improving the education system can we take what the negative views are there and engage in a uplift their views of the future to me the greatest surprise of all isn't how people voted because i i didn't think of myself as having expertise on that but this general question when you say will your children be better off than you i believe their children will be better off but the fact they don't feel that way that the uh improvements in health and the uh you know the new products that will be available to them uh and what technology enables them to do and all right that is a a concern because if people don't see the arrow of time uh pointing towards greater things the idea of doubling down on more research and you know taking the best education and getting the best education and getting the that that spread around it it creates a sense of the lies where you don't have the guidance to hey some things are working let's do more of those things but the question i ask also is could america lose i mean if you look at today we have the best military we have the best economy we have the best universities we have the best talent uh and we have the best spirit of innovation and creativity could we lose that i don't think we will no i think the odds of that of losing that or very this is what you call the special sauce it we've got the special sauce and and we've still we've still got a special sauce if the rest of the world is learns from that special sauce and you know it's not a zero-sum game i go that's terrific that is terrific but it doesn't it won't deprive us so overall in aggregate our society will be far richer 10 20 30 years ago and if you just take an aggregate our children will live better the real question is is will it continue to leave lots of people behind and a specialized market”

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Greg AbelInterview2017-09-10conf:medium

Bill Gates + Warren Buffett + Charlie Rose @ Columbia University 2017 Video (Best Quality)

“To me, the greatest surprise of all, isn't how people voted, because I didn't think of myself as having expertise on that. But this general question when you say, will your children be better off than you? I believe their children will be better off, but the fact they don't feel that way that the improvements in health and the, you know, the new products that will be available to them. And what technology enables them to do and all of them? Right. That is a concern because if people don't see the arrow of time pointing towards greater things. The idea of doubling down on more research and, you know, taking the best education and getting that spread around, it creates a sense of the lies where you don't have the guidance to, hey, some things are working, let's do more of those things. But the question I ask also is, could America lose, I mean, if you look at today, we have the best military, we have the best economy, we have the best universities, we have the best talent, and we have the best spirit of innovation and creativity. Could we lose that? I don't think we would. No, I think the odds of that, of losing that are very. This is what you call the special sauce. We've got the special sauce, and we've still got a special sauce. If the rest of the world learns from that special sauce, and, you know, it's not a zero-sum game. That's terrific. That is terrific. But it won't deprive us. So overall, in aggregate, our society, our sustainability, society will be far richer 10, 20, 30 years ago. And if you just take an aggregate, our children will live better. The real question. I mean, in the world, they're serious about trade, they're serious about clean energy. They are super important. The most important relationship in the world is the U.S.-China relationship. Clearly, because of the two biggest economic powers in the world. Right, and they're rising. We're strong and we're going to stay very strong. What could make us not stay strong? There's a lot of strength that we've built up over decades. The way we do research, our universities, the way that people take risk, and that's why our technology companies are still so strong, our biotech companies are still so strong. So the education system is one that, you know, we need to go back and look at. You know, and that is one huge source of an end. equity. Because if you get a great education, actually, the outcomes are pretty good.”

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Greg AbelInterview2017-05-08

Buying Apple, selling IBM, missing Google | May 8, 2017

“They show them by railroad. They show the Canadian roads. So the short line roads. And basically, the economy is doing okay. And when I see, I say, okay, I mean sort of the same 2% rate. Now, it's not that precise for the rail figures, but one thing that's helped with rails is that natural gas has gone up in price. And there's a lot of coal that doesn't move at $2 natural gas that moves at $3 or $3. I mean, a lot. There's a whole lot of electric generation that they flip a switch, basically. And it's the input. And right now, natural gas is. I think it was $3.25 on Friday. And that dictates the use of coal a lot of places where if it was $2.25, they'd be running natural gas. So coal shipments are actually probably up the most percentage-wise of any of the 20 categories. They're certainly up the most up dollar-wise. On the other hand, petroleum products would be less. Grain is moving more this year. There's just a lot of crops still out there, and there's going to be more coming on. So at the NSF, we move 13,000 cars of grain and they move at $3,000, $3,500 or something like that. So to get an extra thousand cars of grain, you've got an extra $3 million of revenue. But that's a product of low prices for grains, so the farmers wanted to store more big crops, and we'll learn. in the fall this year, whether you have another big crop, and we'll carry a lot of grain if it happens, and if for some reason there's a low crop, it comes down. And they're just category crushed stone. I mean, you name them all. One of the things that surprised me that I hadn't realized until we spoke with Matt Rose of BNS this weekend, is that the truckers, who I always thought of as the railroad's biggest competitor, didn't realize they're also their largest customer, that they're shipping so much for them. That's true. That's true. of drugs, you know, they load those babies on there and double stack them. And the, they are five biggest customers. I mean, you've got, well, J.B. Hunt would be the biggest, but Schneider, which just went public here recently. Those are big customers. I mean, they have an advantage just to start with in loading in a huge percentage of cases. But if you really are going to move heavy traffic, hundreds and hundreds of miles, bulk traffic. They're better off sticking them on our railroad than picking them on the other end at Christmas time. You know, UPS or people like that, a lot of it will move by rail.”

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Greg AbelMeeting2017-05-06

Afternoon Session - 2017 Meeting

“or anything like it. It's really a question of what comes along. I mean, and these, the projects, they're internally generated, they're externally offered to us, and we've got a big for wind or solar, we have seen, you know, just based on those figures, we have seen more wind lately, but we have, we have no bias toward either one. I mean, if we saw five billion of attractive solar projects we could do and didn't happen to see any wind during that period, it wouldn't slow us down from doing the five billion or vice versa. So we are, we all, we have an appetite, a huge appetite for projects in either area. We're particularly well situated, as I think I've explained or talked about in the past, because we pay lots of taxes, and therefore solar and wind projects all involve a tax aspect to them, and we can handle those much better than many other, certainly electric utilities. Most electric utilities really a, don't have that much money left over after dividends, and these, frequently the taxes aren't that significant. At Berkshire, we pay lots of taxes and we've got lots of money. So it's really just a question of doing the math on the deals as they come along. We've been very fortunate in Iowa in finding lots of projects that made sense. And as a result, we've had a we've got a much lower price for electricity than our main competitor in the state. We've got a lower price than in any states that touch us. We've told the people of Iowa, they won't have a price increase for many, many, many years, guaranteed that. So it's worked out extremely well. But if somebody walks in with a solar project tomorrow and it takes a billion dollars or takes three billion dollars, we're ready to do it. There's no specific. And the more, the better, There's no specific preference between the two. Obviously, it depends where you are in the country. I mean, I was terrific for wind, and obviously, California is terrific for sun. And there are geographical advantages to one or the other. But from our standpoint, we can do them anyplace, and we will do them anyplace. And we will do them anyplace.”

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Greg AbelMeeting2017-05-06conf:medium

Morning Session - 2017 Meeting

“tax credits in this country, and we've had bonus depreciation. This is another form of it, and we do get extra first year depreciation. that does not enter into our calculation very much. In fact, certainly at the Berkshire level, I've never instructed anybody to do anything different because of investment tax credits are accelerated depreciation. There may be some calculations done down at the operating company level. It's certainly true in something like wind projects and solar projects, They are dependent on the tax law currently. There may come a time when they aren't, but they wouldn't have been done without some subsidization through the tax law. But I would say if you change the depreciation schedules and, you know, double depreciation, triple depreciation. That, we're going to do what we need to do at the railroad to make it safer, more efficient if we just had ordinary depreciation. And I doubt if there'd be any dramatic differences. Obviously, if you were going to say buy a bunch of planes and the law was going to change on December 31st and the map made it better to wait until January 1st or do it this December 31st. They didn't make that kind of calculation. But I can't recall in all the years that I've ever sent out anything to our managers. saying, let's do this because the tax law is being changed or might be changed or something of the sort. As I mentioned earlier, it changes just a little bit if you think there's going to be a change in capital gains rates. At a given time, obviously, if it's going to, the rate's going to be lowered, you would take losses ahead of time and defer gains maybe a little. And that's why it's useful. Actually, if the tax committees, the Senate and the House, are working on something, it might be useful if the chairmans would say that if we do make any changes, we're likely to use this effective date or something of the sort. And I think they've done that a few times in the past. We are not, the big tax-driven item is in wind and solar, and that is a specific policy because the government has decided they want to move people or society is that it's a specific is that they want to move people toward those forms of electric generation, and the market system wouldn't do it. And there may come a time when the market system will do it all by itself. We won't make big changes. And it's so speculative anyway in terms of even what the law”

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Greg AbelMeeting2017-05-06

Afternoon Session - 2017 Meeting

“Yeah. Well, generation assets, you can say have inherently more risk because that some of them are going to be stranded, stranded or, yeah, and obsolete. Now, the question is how they treat stranded and all that sort of that. We, on that hand, more of the capital investment is in the generating assets, so that tends to be where a good bit of the capital base is.”

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Greg AbelMeeting2017-05-06

Afternoon Session - 2017 Meeting

“Yeah, I mean, we have public power here in Nebraska. I mean, it's been sort of the pride of Nebraska for many decades. It's all, there are no privately held utility systems and totally public power. And, you know, those utilities have no requirements for earnings on equity. They have, they can borrow a tax exempt rates. We have to borrow a taxable rates. And Nebraska, you know, the wind, And not that much different than Iowa, and we're selling electricity across the river a few miles from here, you know, at lower prices than exist in Nebraska. So it's an extraordinary utility, and it was lucky when we got involved in, I think, Walter Scott, our director for, or introducing me to it almost 17 or 18 years, 18 years ago or so. But I don't think. utility business as such. I mean, if I were putting together portfolio stocks, I don't think there would be any utilities in that group now. But I love the fact we own Berkshire Hathaway Energy. But it's different, radically different, and better. A lot better, actually.”

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Greg AbelMeeting2017-05-06conf:medium

Morning Session - 2017 Meeting

“Warren, my question also relates to Burlington Northern. Despite the current administration's belief that they can bring the coal industry back, market forces continue to lead to the industry's demise. While 90% of U.S. coal consumption is driven by electricity generation, natural gas has been both cheaper and cleaner burning, and renewable electricity generation has remade parts of the market as wind and solar of gain scale and become cheaper alternatives. This has created problems for Burlington Northern, with coal shipments accounting for just 18% of volume and revenue for the railroad last year, down from an average of 24% for both measures the previous 10 years. While some of this was due to a large build-up of coal supplies the past couple of winters, which finally seem to be working their way out, what are your expectations for the contribution coal can make to BNSF longer term? And I know that the rail will currently handle some export shipments going through Canada's Pacific Coast ports, but will there be enough growth there to offset domestic demand, or will BNSF need to rely more heavily on segments like intermodal to offset lost coal volumes?”

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Greg AbelMeeting2017-05-06

Morning Session - 2017 Meeting

“And so it, you can't predict the rate. and if natural gas is cheap enough, it's going to be a, you'll see a big conversion back to a natural gas. So coal is a, coal is going to go down as a percentage of revenues significantly, you know, certainly over 10 years. It'll be quite significant, and who knows exactly here by year. We are, we are looking for other sources of growth than coal if you're tied to coal. you've got problems,”

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Greg AbelMeeting2017-05-06

Morning Session - 2017 Meeting

“We will produce within a few years as much electricity in Iowa or virtually as much electricity in Iowa from wind as our customers use, but the wind only blows about 35% of the time or something like that. And sometimes it blows too hard. But the storage, you know, having it 24 hours a day, seven days a week, is a real problem. even if we've got the capability of producing, like I say, a self-sufficient amount, essentially in Iowa before very long. Coal, our shipments of coal are up fairly substantially this year on the BNSF, but they were very low last year. And as you said, stockpiles grew and have come down somewhat. They're still on the high side. But in my mind, Charlie's got a long. longer term outlook on this. In my mind, we're going to be shipping a whole lot less coal 10 or 20 years from now than we are now. Other than I think there's some decent prospects in in other long halls. I mean, it's a pretty cheap way to move bulk commodities long distance rail is. And I think it's a good business, but the coal aspect of it's going to diminish. Okay. Station 6. Good morning.”

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Greg AbelMeeting2017-05-06

Afternoon Session - 2017 Meeting

“Yeah, there we might talk a little bit about the methane situation. Sure, Warren. So thank you for your comments. And when you think about methane emissions, it is a serious issue relative to carbon. It was highlighted 84 times worse than a carbon emission. But I'd be very pleased. report on our situation at Berkshire Hathaway. So three different issues were raised in the comments. One was overall emissions from oil and gas production. So the first thing I would just highlight is that we do not own any oil and gas producing assets. So we don't have any wells and effectively don't have that risk. The second thing that was highlighted was the significant loss of gas at Alyso Canyon. It was a injection well that failed. It took many months to fix a well. And if you fundamentally look at the problem there, and we do own other storage facilities, but we do not use their technology or that type of well. All of our wells are case to the top, which creates a very different risk, and literally can be mitigated within hours. And then the third issue which was raised was leakage rates.”

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Greg AbelMeeting2017-05-06

Afternoon Session - 2017 Meeting

“And it was highlighted, at least in a second response to the proposal, that the leading companies in the industry have a leakage rate of 1%. Or they've put together programs to achieve a leakage rate of 1%. And I'm happy to report when we look at our leakage rate from our pipelines, we're at 0.53 of 1%. So basically half of the leading companies in the industry. So that obviously support the rate. support the recommendation of the shareholders. Thank you.”

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Greg AbelMeeting2017-05-06

Morning Session - 2017 Meeting

“Well, yeah, Chicago has got lots of problems, and it's going to continue for a long—I mean, that requires a big solution. When you think of how the railroads develop, I mean, Chicago was the center, and, you know, he laid the rails, and there were a whole bunch of different railroads. you know, a hundred years ago, and city grows up around them and everything. So Chicago can be a huge problem, but getting to intermodal, I think intermodal will do very well. But you are correct that car-loadings actually hit a peak in 2006, so here we are 11 years later, and the investment of the five big-classes actually hit a peak in 2006.”

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Greg AbelMeeting2017-05-06

Morning Session - 2017 Meeting

“Class one railroad is four of the biggest. If you look at their investment, beyond depreciation, it's tens and tens of billions of dollars, and we're carrying less freight, the four in aggregate, than we were in 2006. And coal will continue to increase. It's a good business, and it has big advantages over truck in many respects. Truck gets much more of a free ride in terms of the fact that their right-away, which is the highway system, It's subsidized to a much greater degree beyond the gas tax, you know, than the railroad industry. But it has not been a growth business in physical volume to any great degree. I think it's unlikely to be. I think it's likely to be a good business. I think we've got a great territory. I like the West better than the East. As you mentioned, you know, there will be some inter-motive traffic that gets diverted to eastern ports, perhaps, or so on. Overall, we've got a terrific system in that respect, and we will do well. It would be more fun if we had something where you could expect aggregate car loatings to increase two or three or four percent a year. But I don't think that's going to happen. I do think our fundamental position is. terrific. However, I think we'll earn decent returns on capital, but that's, I think that's the limit of it. Charlie?”

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Greg AbelMeeting2016-04-30

Morning Session - 2016 Meeting

“the one that we just showed during the movie to on any decision about new generation, changes in generation has to go through a what's usually called the Public Utility Commission. They may have different names in a few states. But the utility industry is overwhelmingly regulated at the state level, and we cannot make changes that are not approved by the Public Utility Commission. We've had more problems, for example, in bringing in renewables in our Western Utility Pacific Corp, because it's, in effect, regulated by six states, believe in six states, and they don't necessarily agree on how the costs and benefits should be divided if we put in a bunch of renewables and we have to follow their their instructions. Iowa has just been marvelous about encouraging, I mean, at every level. I mean, the consumer groups, the governor, you name it, they have seen the benefits. And in Iowa, it's literally true that we have one major competitor, we have one major competitor, called the Alliant, and they have not either been able to, I don't know the reasons, but they have not pursued renewables the way we have. So our rates are considerably lower than theirs, and if you look at their budget projections, although they're substantially higher rates than we have now, they may well need a rate increase within a year or so. And with our latest expansion, we have said that we will not need a rate increase till 2009 at the earliest, that's 13 years off. So there have been great benefits if you have a regulation that works with you on that. But it is a determination that is made at the state level. Now, the federal government has encouraged in a major way that a development, the development, development of renewables by this production tax credit, which currently amounts about 2.3 cents per kilowatt hour, we would not have the renewable generation that we have if it hadn't been for the fact that the building of those projects is subsidized by the federal government. Because the benefits of reducing solar emissions are, or carbon emissions, are, or carbon emissions, are are worldwide and therefore it's deemed proper that the citizenry as a whole should participate in subsidizing the cost of reducing those emissions. And that is encouraged. In fact, it's allowed things like have happened in Iowa as well. But the degree to which the degree to which the renewables replace primarily coal, although there's plenty of emissions connected”

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Greg AbelMeeting2016-04-30

Morning Session - 2016 Meeting

“with natural gas, they trace it all the way through, will depend on governmental policy. And I think so far, I think it's been quite sensible in encouraging having the cost borne by society as a whole in terms of reduced. revenues and having the benefits, which is less CO2 into the atmosphere, be also broadly, you know, they're not just limited to the people of Iowa when we go about that. That's a benefit that accrues to the world. So I think you'll, I think you'll see continued change and will vary by jurisdiction. And we would hope we've got the capital. We've got loss of taxes, federal taxes paid in our consolidated return, so we're in a particularly advantageous position to take advantage of massive investments that companies with limited tax appetites couldn't handle. So I think you'll see us be a very big player, but governmental policy is going to be, you know, the major driver. Charlie?”

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Greg AbelMeeting2016-04-30

Morning Session - 2016 Meeting

“I mean, it's become a tech haven for these operations that just gobble up electricity. And Iowa has gotten plant after plant after plant after plant and job after job after job. And increased property tax, I mean, gotten more property tax revenues. And that's being done the Google's server is probably seven or eight miles from here. And it's located in Iowa because that we have cheap. wind-generated electricity, and it's creating jobs. It's fascinating, but, but Nebraska has prided itself on public power. It was originated back, I believe, in the 30s, when George Norris was a very powerful senator here, and it's been a source of pride, but lately it's been a source of cost, too.”

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Greg AbelMeeting2016-04-30

Morning Session - 2016 Meeting

“autonomously, but should Berkshire's board influence better environmental protection policies going forward? Well, the public utility and the and the pricing policy is everything in Nevada as well as other places, but they're determined by a public utility commission. So there are, I believe, three commissioners that decide what's proper. The situation in Nevada is that in terms of rooftop power was that, for the last few years, if you had a solar project on your roof top power, on your roof, you could sell back excess power you generated to the grid and a price that was far, far, far above what we as a utility could buy it for elsewhere. So you could sell it back, we'll say, at roughly 10 cents, a kilowatt hour. And about 17,000, maybe a few more now, about 17,000 people had rooftop installations. Now, they got that there were federal credits involved, but those usually got sold to other people in terms of tax credits. So they were being subsidized by the federal government, and that encouraged solar generation as it's encouraged us to do solar generation and wind generation as well. But the people who had these 17,000 rooftop installations were selling back to the grid at 10 cents roughly a kilowatt hour energy we could purchase or produce either, but purchase elsewhere too, for three and a half cents or thereabouts. So 99% of our consumers were being asked to subsidize the 1% that had solar units by paying them a significantly, a triple the market price, basically, of what we could otherwise buy by electricity to sell to the 99%. So then it's just a question of whether you wish to have the 99% subsidize the 1%. And the public utility commission in Nevada, they had originally let this small amount of rooftop solar generation be allowed as an experiment with this 10% roughly 10 cent rebate. And they decided that they did not believe that the 99% should be subsidizing the 1%. There may, there's no question that for solar to be competitive, just like wind, it needs subsidization. The costs are not yet at a level where it becomes competitive with natural gas, for example. And who pays the subsidy gets to be, a real question if you want to encourage people to use renewables. And in general, the federal government has done it through tax subsidies, which mean taxpayers generally throughout the country subsidize it. And the public utility commission in Nevada decided that after seeing”

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Greg AbelMeeting2016-04-30

Morning Session - 2016 Meeting

“So as usual, Warren, you saw summarized it extremely well. When we think in Nevada, it's exactly as you described, I would just have a few things. One, as you've touched on earlier, we absolutely support renewables. So we start with the fundamental concept that we are for solar, but as you highlighted, we want to purchase renewable energy at the market rate, not at a heavily subsidized rate, that one percent of the customers will benefit from and harm the other 99 percent. And it goes back to to being as fundamental as this, if you take as you touched on a working family in Nevada who can't afford the rooftop unit and you ask them, do you want to subsidize your neighbor, that 1 percent, the answer is clearly no. At the same time, we're absolutely committed to Nevada, utilizing renewable resources, and absolutely proud of what our team's doing. By 2019, we'll have eliminated a retired 76 percent of of our coal units and be replacing it with solar energy. So we're on a great path there. Thank you. And we're just to encourage our team and with the work of the commission and obviously led by the state, we'll head down a great path. Thank you.”

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Greg AbelMeeting2016-04-30

Morning Session - 2016 Meeting

“Believe me, the lights would be off all over the country. But it's moving at a fast pace. But you do, you want to be sure that you treat fairly the people involved in this because somebody pays the cost of electric generation. And I do think that if you're doing something that's to benefit the planet, and it's important that it be done, but that you have the cost be assessed for that, not on a specific person who's having trouble, perhaps meeting ends meet, in their job. And obviously, if you got over a million customers in Nevada, a lot of them are struggling, a lot of them are doing things. fine too. But they are not the ones, in my view, to subsidize the person who could afford to put the solar unit in. Okay.”

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Greg AbelMeeting2016-04-30conf:medium

Morning Session - 2016 Meeting

“in which we serve, and shareholders, which our shareholder, of course, is BRK, we didn't see any interest in the final round of these mergers occurring outside of the shareholder community. And so our position was simply to say, if the rest of the shipping community believes that we ought to see this final round, that's fine. We'll participate, but we don't see it occurring right now. We do believe that when that final round occurs, there will be great efficiencies made for shippers and communities, but right now we don't see the dynamics in place. So what are those dynamics? It'll be as the country continues to grow in population from where we are today, 315 million people to say 320, 330, 350, 350. Transportation becomes more scarce, and the railroads will need to do more. And that's really when we think the next round will occur.”

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Greg AbelMeeting2016-04-30

Afternoon Session - 2016 Meeting

“So depreciation is an inadequate measure of the actual steady state capital expenditure needs of a railroad, even in these fairly non-inflationary ways. And that's an important. consideration in in buying the business. We knew that going in and and it's been reinforced since. We spent a lot of money in 2015 because he had a lot of problems to correct. And that was when we spent the $5.7 billion. I would say that the true maintenance cap-ex, if you're looking at $4.3 billion, is higher than 60% of that number when you really evaluate. keeping the railroad in competitive shape to do just the same volume as it would be doing the year before. So there is an additional expense at the NSF that is not reflected in the figures. There we also have a lot of intangible expenses at some other businesses that aren't real expenses. I mean, overall, I think that Berkshire's fees. figures actually are on the conservative side in relation to real economic earnings. But that's not true at any railroad. They've also had something called positive train control, which amounts to a lot of money for the industry. I think we may be a little further along than most of them in paying for that, but that's $200 or $300 million a year and maybe, I don't know whether it be close to $2 billion or something like that in aggregate. So it is a very capital-intensity. of business. We run at the BNSF, we run far more gross and revenue ton miles than any other railroad in North America. And that has obviously some is a factor on capital expenditures. But I would say that it's very likely that we will spend more than depreciation, unfortunately, quite a bit more than depreciation, stay in the same place for a long, long time, as will other railroads. And that is a, that's a negative in the picture. We will always be looking for ways to use capital expenditure money to develop additional business. And we get that opportunity regularly. It's just a question of the size of it. And we did a lot of that in the Bakken, and we recognized. We reckon we got benefits from it. We're not getting benefits as much as we thought we would at this point when the price of oil has fallen off. But that was a very sensible, very sensible capital expenditure, and I hope we get the opportunity to do more. What's happening in coal with the decline? I mean, that doesn't really have anything to do with our overall capital expenditure budget, except we won't be spending a whole lot of money to expand in that arena.”

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Greg AbelMeeting2016-04-30

Afternoon Session - 2016 Meeting

“Is that answer your question? Okay. I was just thinking maybe with intermodal as well, if that's, you know, a longer-term opportunity to invest more heavily there. Well, we're always open to it, but we would want, you know, you have to see a fair amount of revenue coming from, we had a proposition very recently, which we worked on for many, many years in terms of making the port at Long Beach considerably more efficient. And we spent a lot of money on that and spent a lot of time. And we would have spent a lot more money, a whole lot more money, if it had been approved. And recently, a court came out with a decision that was negative on it. And whether that kills the chance to do that or we look someplace else, you know, we'll have to look at the situation. Our competitors there pretend to be environmentalists. It's a common practice now. Yeah, in any event, we would, we thought we had something that made a lot of sense for both the area and for the transportation system of the country. But there are a lot of... We're trying to do the right thing, and so far we've lost. But we're still willing to spend a lot of money. Yeah. If we can find things that make the railroad more efficient or make it larger. I mean, either way.”

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Greg AbelMeeting2016-04-30conf:medium

Afternoon Session - 2016 Meeting

“But allowing for the preferred that's going to, of Kraft Heinz, will be, again, over $60 billion of consolidated cash. We don't really worry much about what pocket it's in. It's not making anything anyway at these levels. If rates move higher, we've actually got the mechanics in process to do sweep accounts and that sort of thing. So I would pay no attention to the particular cash that's being held in that category there. The cash in Berkshire Hathaway Energy, the cash in the railroad, we have independent levels that we don't guarantee their that and they run with ample cash and we would not look at sweeping that down to a minimum. But if you talk about 40 or 50 of our miscellaneous subsidiaries, we will go to a sweep account when rates get where it really makes any difference to do it. But right now, when you're getting zero, it makes much difference where you get zero. So I think the fellows over analyze it a little bit, but I understand why he did it.”

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Greg AbelInterview2016-02-29

"America's never been greater" | February 29, 2016

“And last year was a little disappointing for most of them. But again, that's just this industrial recession that we've seen? It's just not as many, not as many car loads are moving. I mean, every week on Wednesday, American Association Railroad, you can look up. the figures and it'll tell you crush stone and autos and grain and all kinds of different commodities how many cars moved the previous week and you can tell exactly what's going on on the artery you can call it the arteries of the economy is that because of the China slowdown it's hard to imagine that a slowdown in China would hurt grain movement here well grain actually hasn't been so bad the big the big culprit's been coal and and that's going to continue it's a exacerbated by the fact that coal stocks at electric utilities are at a very high level. They measure them in terms of days of usage and they were low a couple of years ago. And so there was a somewhat of a catch up. Now there's a somewhat of an undershipment to work off excess stocks at the utilities. What partly happened was that our service got bad a couple years ago, a year and a half or whatever it was ago. And the utilities got very worried about their stockpiles coming down. So they've perhaps overcompensated a little bit and want to make sure it didn't happen again. So coal piles are high at utilities. But even leaving out that factor, coal usage is going down with utilities. And many utilities can shift between natural gas and coal with a lot of their generation. And natural gas prices being where they are just hurts coal a lot.”

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Greg AbelInterview2016-02-29

"America's never been greater" | February 29, 2016

“Oh, well, we don't have a problem in net meters. And we're the leading in renewables in the country among regulated utilities. The only way is we do not want our million plus customers that do not have solar, to be buying solar at 10.5 cents when we can turn it out for them at 4.5 cents or buy it at 4.5 cents. So we do not want the non-solar customers, of whom they're over a million to be subsidizing the 17,000 solar customers. Now, solar customers are subsidized through the federal government as we are with our wind and solar operations ourselves. The reason the society believes in subsidizing solar and wind is because of damages to solar operations ourselves. The reason the society believes in subsidizing solar and wind is because of damages to society that may resolve over decades from carbon emissions and and society has an interest in it and subsidized by the federal government society is in effect paying for it. I mean, the people who benefit the whole country. In Nevada, they had an arrangement for a very limited number of people and the Public Utility Commission decides this. They had an arrangement where the utility had to pay way above market for solar produced by these 17,000 homes. For instance, if I have solar electricity that I'm producing, it's more than I need, I can sell it back to you. At 10.5.5. When we could buy someplace else for 4.5 cents or make it ourselves for 4.5 cents. And that costs the million plus customers a price. And the Public Utility Commission, there's three utility commissioners. The Public Utility Commission decided that was unfair to the million plus people who didn't have solar. And they said, it's fine to sell it back, but sell it back at what it can be bought. Sell it back at market price.”

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Greg AbelInterview2016-02-29

"America's never been greater" | February 29, 2016

“Elon called me, yeah. He was unhappy. He, I mean, he's being subsidized with his battery plant big time. Our other customers are actually paying a little more for electricity to subsidize his battery plant. And they were being, charged this higher price for electricity. And now we can lower prices a little bit for the”

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Greg AbelInterview2015-05-04conf:medium

Defending Clayton Homes and Berkshire's IBM stake | May 4, 2015

“Well, I'm not an expert on that challenge. It's the environment with low interest rates globally is so unusual. And it really shouldn't persist. It creates problems in terms of leverage and bubbles. But how we get out of it without creating some economic setback, it's very, very, very, very difficult. She faces the fact that most of the other central bankers are still lowering interest rates. So people do expect the U.S. to sort of take the lead in pushing our way out of this situation. But it's not a set of easy choices she has.”

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Greg AbelMeeting2015-05-02

Morning Session - 2015 Meeting

“some other people will be building new cars. The industry has been waiting to see what the requirements would be before moving ahead. The first quarter of 2015, there were practically no tank cars ordered. There's a backlog, but there's no tank cars were ordered because we need to see what the regulations are. But we'll be very active in retrofitting and in manufacturing cars. But I don't think we'll be, historically, the railroads have never really owned tank cars. That goes back to the Rockefeller days. And I think the present method of having car less sores, such as the one we own, I think we'll continue in the future rather than having the railroads own them.”

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Greg AbelMeeting2015-05-02conf:medium

Afternoon Session - 2015 Meeting

“Greg. Warren. American Express, which is Berksh's third largest stockholding, has relied on powerful network effects and its valuable brand to generate economic profits over the years. It is created. created a virtual cycle, with its collection of cardholders being desirable to merchants”

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Greg AbelMeeting2015-05-02

Morning Session - 2015 Meeting

“So love to provide an update. Actually, as it's been touched on, we announced our 10th project in Iowa. That brings us to more than 4,000 megawatts built over the last 10 years in that state. And at the end of 2016, we will now have 58% of our energy, approximately 58% of our energy that we provide to our customers coming from wind. And then if you continue to, thank you. And then if you continue to look at our other utilities and our unregulated businesses, Warren, you've touched on this in the past, we now have more than $18 billion committed to renewable assets across our different utilities. And if you look at NB Energy, our Nevada utility, for example, we've committed to retire 76% of their coal by 2019. and a large portion of that will be replaced with renewable energy. So clearly a continued commitment to that.”

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Greg AbelMeeting2015-05-02

Morning Session - 2015 Meeting

“It has been able to invest far more money than it would make sense to invest on a stand-alone basis. Among electric utilities in the United States, there's really no one situated as well as mid-American energy is because it's part of this consolidated tax return to really put its foot to the floor in terms of developing wind and solar. So it's become the biggest developer by far among the utility industry. And I think it's very likely to continue to be simply because most utilities really don't pay not much income tax and therefore they're sort of limited in how far they can push development of wind and solar.”

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Greg AbelInterview2015-03-02

Fifty years of Buffett's Berkshire | March 2, 2015

“bad news in every report. This year you point out that Burlington, Northern, Santa Fay, disappointed many of its customers. What happened? Well, what happened was that in terms of on-time performance, you know, our coal customers, they never ran out of coal, but they got lower in terms of what they had than they would have liked. Do they, you know, if you're running a utility and your coal bin gets down to 10 or 12 days of supply, you get very worried if there's a blackout you're going to get blamed now not the not the not the railroad so we didn't know why we made sure they got their call but but but we worried those customers in terms of in terms of fertilizer we you know you need to get that in time and and there were enormous demands and and we got it there but but there again it was a last-minute situation with many and and then in terms of the we had this huge grain harvest and and in terms of getting cars in that case there was a big shortage of of grain cars you know the farmers worried if he can't get his crop to market so so we had much more congestion more we had a slowdown of the trains other people experienced this too but but but ours was ours was particularly severe all the Canadian Pacific had plenty of problems too and we a fortune we spent more money in 2014 than any railroad is spent to my knowledge trying to solve problems and we're spending even a lot more money this year and that means double tracking and doing various things but you can't double track 60 miles you know overnight and the very act of improving service sometimes slows it down because you're working on the track but it's our job to foresee that sort of thing we've got the money to do things and it's it's our job to have satisfied customers and the metrics of the last three months have been significantly better in in terms of on-time performance and and reduction of backlogs and all of that sort of thing”

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Greg AbelInterview2015-03-02

Fifty years of Buffett's Berkshire | March 2, 2015

“improved dramatically since the Stagger's Act 30 years ago, by every measurement. And it's a very decent business. It's very capital intensive. But, you know, obviously, if you had your entire system double-tracked, you'd have a whole lot fewer problems that were single-tracked. And there are all kinds of other variables. So the big thing, I think, over the next 10 years, that's going to be a real problem for the whole industry is Chicago, because the rail system, you know, was designed 100 or 150 years ago. It gets modified all the time. But Chicago was where everything went. And things got switched there. I think 40% or so of the interchange takes place in Chicago between the east and the west. So as the city grows, I mean, you just run into real problems and they're expensive to fix. And in the case of something like that, it takes a lot of coordination among all the railroads that go in there and city and county and you name it. But to have the kind of railroad system we want to have 20, 30, 40 years from now, we will have to do some big expensive things. Chicago.”

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Greg AbelMeeting2014-05-03

Afternoon Session - 2014 Meeting

“Yeah. The Union Pacific has a big edge in terms of Mexico. I mean, their route structure as such. I think they crossed the border at six different places. Their route structure is far better than ours in relation to Mexico. And Kansas, it's true, as you say, that Kansas City Southern has a very significant presence in Mexico.”

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Greg AbelMeeting2014-05-03

Afternoon Session - 2014 Meeting

“But in terms of what we can do with our money and what we see as the prospects, there are good prospects there, but there are good prospects elsewhere for traffic, too. So it doesn't make sense for us. But, you know, maybe someday something will, but the math does not work for Mexico. But we'll continue, we're continuously thinking about Mexico, but we're thinking about lots of other markets too. There are lots of possibilities for moving more freight on the BNSF over the years. We won't forget about Mexico, but we won't do anything silly either. Charlie?”

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Greg AbelMeeting2014-05-03

Morning Session - 2014 Meeting

“Yeah. We've handled more volume actually than in the past. I mean, in 2006, we had a peak of 219,000 carloads. That was in the late fall. But there's no question that we've had a lot of service problems, particularly on our northern route. We have been spending more money than the Union Pacific, and they spend a lot, in terms of attempting to anticipate the kind of problems that can occur when you get a big increase in volume on that one route, particularly, from the boom in the, particularly the Bakken shale. We've got a lot of unit trains that are running over those lines that weren't running five years ago. I think I've got Matt Rose here, I think somewhere in the front, and he might address some of the problems of cold weather. I mean, when again, there were a lot of days where it was 15 below or worse, and in terms of sending people out to work on problems under those circumstances, it can be”

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Greg AbelMeeting2014-05-03

Morning Session - 2014 Meeting

“I think it's, okay, there it is. There we go. Sorry. So like Matt touched on, obviously we had a very cold winter. in the Midwest. So our systems for the first time were challenged in a significant way, but very proud of how the resources were managed. So if you look at the question around natural gas and specifically the gas availability, there was substantial gas available to be utilized both to heat homes and produce the energy, because ultimately we're worried about both keeping the furnaces on and equally keeping the lights on. So when you looked at the balance of supply, there was a gas. there. But clearly we have to continue to look at the unique situation as we continue to move towards using more gas in the United States. Warren touched on an important point. This past year, as he highlighted, he highlighted 2015, but if you look at just what we produced on the renewable side in Iowa, that was 39% renewable, i.e. wind. And that will only get larger. So as we continue to manage these multiple resources, there's clearly a way to meet the needs of our customers, and we're meeting it in an extremely”

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Greg AbelMeeting2014-05-03

Morning Session - 2014 Meeting

“cost-effective fashion. I'd also highlight that when you think through the cost recovery side of it, we've got very unique mechanisms within our utilities when the underlying cost of gas goes up, where we have to purchase more than we had anticipated, we've got clear passers back to our customers. And we've negotiated those across each of our states. So we're well positioned to service our customers long-term and equally protect the fundamental financials of the underlying businesses. Thank you.”

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Greg AbelMeeting2014-05-03conf:medium

Morning Session - 2014 Meeting

“all while it takes on additional debt to help fund capital spending. Yeah, Mid-American now renamed Berkshire Hathaway Energy, we'll call it B.H. Energy, we'll have multiple opportunities, I hope, and we've seen two of them in the last 12 months, to buy other businesses. As you noted, we spent a substantial amount of money on NB Energy, and then two days ago, we agreed to buy transmission lines in Alberta. So we will, we hope we will, and so far we've been able to, come up with really large businesses to buy at BH Energy. That will not, at BNSF, we will spend a lot of money to have the best railroad possible, but we're not going to be buying other businesses. So we distribute substantial money out of the NSF, and we will continue to do so because it'll earn substantial money, and it can easily handle the debt that it has and will incur. Whereas at Berkshire Hathaway Energy, we have pretty much the appropriate level of debt at both the subsidiary and the parent company level. So as we buy things, we need not only... only the retained earnings that we have, but occasionally we need some money from the shareholders. And there are three shareholders of B.H. Energy. Berkshire owns 90%, and then Greg and Walter Scott have the balance. And so if we make a large acquisition and we need a little more equity, we will have a pro rata subscription, which the other two shareholders are welcome to participate in, but if they don't, if they decided not to it, it wouldn't hurt then. They'd still have an improvement in the value of their shares. So those two companies are quite different that way. I hope that more possible deals for Berkshire-Hathaway Energy come along. I think they will. So we may invest many, many, many billions there. We will invest billions at the railroad, but it'll all be to improve the railroad. It won't be to buy additional businesses. So far this year, if you think about it, counting yesterday, now, two of these deals started last year, but we've spent $5 billion on acquisitions, roughly, and of course, in the first quarter we spent another $2.8 billion on property, plant, and equipment. But we are finding, we are finding things to do that tend to sop up the cash. We always will have $20 billion. around Berkshire. We will never be dependent on the kindness of strangers. It didn't work that well for Blanche Dubois either. But in any event, we don't count on bank lines. You know, we don't”

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Greg AbelMeeting2014-05-03

Afternoon Session - 2014 Meeting

“So if you put those elements together and you throw in Ajit Jane overseeing the operation, I think it's a terrific opportunity. And I think you will, and it wouldn't make any difference when we entered it. I mean, we entered it because we had the availability of some terrific people. That was the reason for the timing of it. And we'll have, we've added to that group significantly, Peter Eastwood runs it, and I think we will build a very, very significant commercial insurance operation over the time, and I believe that that operation will operate with better underwriting results than the great majority of our competitors. Charlie?”

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Greg AbelMeeting2014-05-03

Afternoon Session - 2014 Meeting

“You were doing great until you got to return on tangible assets. We love the math that you just described as long as we are going to get returns on the added capital investment. And we are in businesses, whether it's wind energy in Iowa, whether with Pacific Corp after we bought it, there were lots of opportunities for capital investment and the energy which we bought. We're looking forward to putting more capital in because as long as we get treated fairly by the regulators in the states that we operate, we will get appropriate returns on that. And the return is not measured by the cash minus the increased capital investment we're making. It's measured by the operating earnings after depreciation. And there will be times in our businesses that where no net investment may be required, but we actually prefer the ones where net in the utility business, where net investment is required because we like the idea of getting more capital out at research. reasonable returns. Now, the bet we are making is that regulatory authorities will”

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Greg AbelMeeting2014-05-03

Afternoon Session - 2014 Meeting

“treat us fairly in the future. And we've got every reason to believe that's true in the jurisdictions in which we operate. And one of the reasons we believe it's true is because we've done so much better than really the great majority of utilities in delivering electricity at at lower rates than they're charged by most utilities. We have a situation in Iowa, for example, where there is one stockholder owned competitive utility and some other municipal owned ones. And if you look at our rates, they are significantly below those of our competitors. In fact, one of our directors has a farm where he buys from two different sources, one being us and his rate from us is dramatically lower than the one from the cooperative arrangement that exists. So we have a deserved good reputation with the regulators that we're dealing with. We've improved the operations, including safety, incidentally, dramatically from the conditions the conditions that existed before we purchased the utilities. That's why they welcome us when we come to new states. And so if we can put more money into useful projects in those states, we've got every reason to believe we will get returns that are appropriate. But if you compute net cash generated from those, you will see, you will see nominal or negative figures for a considerable period as we, as we add to our investment and we make those utilities even more useful to the people in those jurisdictions. I think we'll get a fair return. We have somewhat similar situation at the railroad, too. But we're very happy about both of those businesses. Charlie?”

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Greg AbelMeeting2014-05-03

Afternoon Session - 2014 Meeting

“We've just currently had one this past year, so it's the first one in the past 16 years, and we don't see another one in the foreseeable future. And when you create that type of model, with our regulators. Obviously, they're very supportive of the various projects we've introduced. So this past year, we introduced a project in Iowa. It's a 1,000 megawatt project, $1.9 billion being incurred. And if you go to the gentleman's comment, yes, we're going to put that, we'll deploy that $1.9 billion over the coming two years, but we'll earn an 11.5, 11.6% return on it. Generally, when we look at our utilities, we do, we do. pay attention to our capital. We try to keep it very close to our depreciation. That's what we put back into the business. We'll even earn on that capital. But the reality is the lion's share of our capital right now is growth capital. And we earn a very nice return on that. Greg, you might comment just a minute. I think they'd find it interesting on what's happening in Iowa with the tech companies simply because of what we're doing in the electric field, or not simply, but in part because of what we're doing in the field of electricity. Right. So when you look at the tech companies and the data centers that exist, if you just go across the river, we serve as Google in Council Bluffs. They've got a site that was initially a relatively small data center. They're looking at taking it to 40 to 50 megawatts, which is a small size of a power plant. But the reality is they're talking about ultimately building that to 1,000 megawatts. And we're seeing that replicated time after time in the state. And it's really due to two things. One, we've got these exceptionally low rates. And then the fact that a significant portion of our energy, as Warren highlighted earlier, and I touched on, comes from renewable energy. They want those credits. They want to be associated with the utility that's producing green power.”

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Greg AbelMeeting2014-05-03

Morning Session - 2014 Meeting

“We have no choice about them. we're happy to carry the coal, but beyond that, we are a common carrier. I mean, we might love to turn away chlorine or ammonia or something like that because of the dangers in carrying it, and we can't get compensated adequately for that. But we are a common carrier, so we, by law, we're required to carry the freight that is offered to us.”

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Greg AbelInterview2014-03-03

"People react too much to short-term things" | March 3, 2014

“So it takes time. We're with a different company, Marman, we're in the tank car manufacturing business. And there will be changes made, and there should be changes made. And it's fair to say that we have found in the last. last year or so that it's more dangerous to move certain types of crude, certainly, than was thought previously. And, you know, there's no question about it. You know, a lot of the rail tank car companies rose on the announcement that Burlington Northern was going to be in the market for buying more of these things.”

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Greg AbelInterview2014-03-03

"People react too much to short-term things" | March 3, 2014

“The problem in buying them is that there's a big backlog at not only Barman's tank car subsidiary, but Trinity and others that make cars. So our backlog runs into the middle of 2015. Those aren't all for crude oil tank cars. Most tank cars don't carry crude oil. When you see a train with a lot of tank cars on it, most of that is not crude oil. But some of it is and more of it has been in recent years. So you can't just flip a switch and get 5,000 cars. There will be retrofitting that takes place, I'm sure. And that's, my guess is some of that will get moved to the front of the line because it's more important to get it done immediately. But the tank car problem is a problem. And it should be addressed. It's being addressed. But you can't change the whole tank car fleet overnight.”

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Greg AbelInterview2014-03-03

"People react too much to short-term things" | March 3, 2014

“interest rates. I want to get it out. And I'm looking for projects all the time. And we, just in planting equipment, we invested over $11 billion last year. That was a record for us. But I, any project that comes to me that has a reasonable payout, whether it's wind farms and Iowa or whatever it may be, you know, I love building more freight cars, whatever it may be. And zero interest rates really pushes me. I mean, if interest rates for 15%, you know, I would be sitting there with a 15% alternative. there's an alternative and it would be much tougher for capital projects to catch my eye. So I would argue just the reverse.”

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Greg AbelInterview2013-05-06

Buffett sees "gradual improvement" in economy | May 6, 2013

“Oil is up quite a bit a lot. So it's a mixture of things. But, and you can look at the other rails as well. And business has come back. It's come back year by year. It's not where it was in, in 2000, actually 2006. The oil situation, that's because Burlington is the largest player in the Bakken Shale formation area. Yeah. Luckily, they found oil where our railroad tracks happened to be. How big of a game changer? Is that? Well, it. Oil is now, petroleum products throughout the country, will be about 5% of our car loadings, and that was about 2.5%. And that's a lot. I mean, it's nothing like coal or anything, but we are now carrying about 650,000 barrels a day of oil. And the country not too long ago was producing about 5 million. So it's a very significant part of the oil production. of the country. And I've talked a number of producers and they're very happy with it. We spent a lot of money to have the facilities to carry this quantity and we expect the quantity to grow quite a bit. There are people who have suggested that pipelines will eventually siphon away some of that. How long a way of a change is that from happening? Well, pipelines are carrying a lot of oil now and there'll be more pipelines created. But surprisingly, oil moves through pipelines a lot slower than it does by rail. So if you want to get oil to a given refinery, and that happens to be the best, where the best prices, A, the pipeline may not fit that perfectly. But even if it does, you can get it there considerably faster with rail. On the other hand, it costs more per barrel to get it. So it's a tradeoff. But it gives the producer a lot more flexibility in terms of refineries than a pipeline system. There was a suggestion over the weekend from President Obama that he'd be in favor of exporting liquefied natural gas. I think he said something by 2020. He does expect that the United States will be an exporter, a significant player in that. Are you in favor of exporting liquidate natural gas?”

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Greg AbelMeeting2013-05-04conf:medium

Morning Session - 2013 Meeting

“So I'm hoping you will check that out and that we will set a record for policy sold. And finally, our railroad this year is doing very well. You saw the earnings in the first quarter report, if we've had a chance to look at that. And we've got some figures up that show our gain in car loadings in the first 17 weeks has been 3.8 percent, whereas the other four major Class 1 railroads in the United States have had a gain of 4 tenths of a percent. That's significant money. And we don't have the Canadian railroads here that operate in the United States. They both come down in Canadian National, Canadian Pacific. But this is representative of what's been happening. We've been helped by the fact that fortunately a lot of oil has been found very, very close to our railroad tracks. And what better place to find oil. And so we've been moving a lot of that. And it's worked, and we'll be moving a lot more the way things are going. And as a result of all this, We now, we'll put up the next slide, we're now the fifth most valuable company in the world. And that will change over time, but I hope it changes for the better.”

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Greg AbelMeeting2013-05-04

Morning Session - 2013 Meeting

“Yes. If there was no coal moving, we would not find a lot of use for some of the tracks we have. There's no question about that. So the, I think what you're talking about would be very gradual over time. But I mean, the outlook for coal is not the same as the outlook for oil. A lot of the coal, in terms of the year-by-year fluctuations, may depend on the price of natural gas because some, um, some. of the generating capacity can go in either direction. In terms of oil, I think the view a few years ago was that there might just be a little blip in terms of rail transportation, but I've talked to some oil producers, one of the largest up there”

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Greg AbelMeeting2013-05-04

Morning Session - 2013 Meeting

“Sure, happy to touch on it. Jonathan, I would touch on the fact you're absolutely right. We're seeing when it comes to rooftop solar a decline in the total cost of installing them. At the same time, when you compare it to a regional tariff or a specific tariff in most of those states, the utility is extremely still competitive. And I would highlight that as you see more roofing, coming on, you'll see a restructuring of the tariffs. But at the same time, there's a lot of protection for the utility. So in the regions we're supplying power, we will see some introduction of solar, but we're absolutely comfortable. Our systems for the long term are valuable, both to our customers and to our shareholders Berkshire shareholders for the long term. Thanks.”

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Greg AbelInterview2013-03-04conf:medium

Buffett on Heinz deal: "We've got a great business" | March 4, 2013

“That's the biggest, by far. And the car loan We're up in January, carloadings are up in February, but our car loadings have been behaving somewhat better than the other three big railroads. So carloadings for the four largest railroads have been fairly flat. They've been up in the intermodal, they've been down in the traditional. Coal continues to be down. In our case, coal is pretty flat. flat. But I think you'll see a small increase in car loatings this year. And I think Burlington is going to do quite well on it because we're well situated in respect to where oil has been found. So we are carrying more and more oil. We're carrying about 10% of all the oil that's moving in the lower 48 continental United States. That's kind of unbelievable. Ten percent of everything produced in the lower 48?”

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Greg AbelInterview2013-03-04conf:medium

Buffett on Heinz deal: "We've got a great business" | March 4, 2013

“No, with the Keystone Pipeliner, yeah, it's coming, that'll be bringing heavy oil down from Canada. And there's plenty of places for pipelines and we're not anti-pipeline at all. But the oil producers are going to figure out what is in their best interest. There's these huge differences in what crude is worth in different places. And with rail, you're more flexible in that rate. Incidentally, oil moves faster on trains. than it does in pipelines. That may be a little counterintuitive. And it certainly moves in a more flexible manner. So I think if you talk to the oil producers that they're quite happy with the rail service they're getting. And we've spent a lot of money on infrastructure to make sure”

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Greg AbelInterview2012-10-24conf:medium

"No question" the global economy is slowing | October 24, 2012

“Yeah. Well, you know, kilowatt hours were down this year. But we, well, look at it this way. Berkshire Hathaway in 2010 spent six billion on plant equipment. That was a record. We spent last year 8 billion on plant and equipment, another record. This year we'll spend 9 billion on plant and equipment, another record. And practically all of that's in the United States. I mean, we see lots of things to do. Now, a good bit of that is in the rail business and the energy business. But there's a lot to do. And incidentally, you hear a lot about infrastructure and, you know, terrible shape it's in. The rail industry's infrastructure is in the best shape as ever been in.”

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Greg AbelInterview2012-10-24

"No question" the global economy is slowing | October 24, 2012

“You know, in other words, it's going to be tough. There's still pockets, but Europe's tough. China is, there's not one China. There's multiple economies in China. Construction, I think, is slow, but if you're in the healthcare or aviation business in China, it's still very robust. And I just got back from a trip to Saudi Arabia, Abu Dhabi, Algeria, Bangladesh. There's business in all those places, right? So I think if you're out hustling, you can find business. So I think the general trend is positive, but there is volatility in the world. So from that perspective, I mean, from both of you, you seem to have a more positive outlook than maybe what the market is reacting to over the last several days. Look, I think you can't blame investors for what they read and what they see, and you're going to have a couple days like what we've had. But if you step back, you know, I think for a company like ours, our organic growth was up 8% of the quarter. That is high, you know, and 10% year-to-date on a company our size, that is pretty good. A backlog of more than $200 billion, that's pretty good. So I just, and, you know, we had dinner last night with 20 mid-market companies. Some are doing poorly, but a lot are doing well. But, you know, I just think it's volatile, right? And so you're going to have a day like we had yesterday or a day like we had Friday, and people are going to have concerns. Who can blame investors for seeing it that way. But the general trend that I see, and we see. 140 countries is still generally positive with volatility. With volatility. And he's getting good prices for locomotives and turbines and all these things he's selling me. Would you like to like a few more, Warren? I could say this morning. He's never going to be a cents off sale.”

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Greg AbelInterview2012-10-24conf:medium

"No question" the global economy is slowing | October 24, 2012

“made the choice to be a broad-based energy supplier. Wind is going to have its fit. Nuclear is going to have its fit. Coal is going to have its fit. You know, we paid $200 million for Enron's wind business 10 years ago. Let me tell you, we've generated billions of cash. The cost of electricity of wind is down to 7 to 8 cents a kilowatt hour. So it's going to have a fit, whether it's in the U.S. or not, it remains to be seen. But I'm glad we've got the breadth. But you know, Joe, the big story's gas. Let's be clear. The big story's gas. And we are super long gas.”

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Greg AbelMeeting2012-05-05

Afternoon Session - 2012 Meeting

“And I probably talked to Matt on the phone, I don't know, once every three months or something of the sort. But there's no question that railroads, utility, these insurance companies are all very much affected by the political process. Fortunately, I think, in the railroad industry, you know, we've got economics on our side. And economics usually went out. I mean, we can move a ton of product 500 miles on one gallon of diesel. And that may be three times or so as efficient. as trucking, and that may be why the railroads currently move, say, 42% of all inner city traffic. I don't think our percentage is going to go down. The railroad industry as a whole, no matter what the politics may be. It's just too compelling to move heavy traffic long distances over steel rail. And in terms of congestion, in terms of emissions, all kinds of reasons. So we've got a wonderful product. product and there will always be struggles in the political arena between competitors and railroads and customers in railroads. It's just, it's the nature of the game, and there'll be some of that in utilities too. But overall, I like our position in that. They do have to be involved in politics. I mean, the railroads, all four of the big railroads are going to be involved in the political process because people who have got, who would like to change some of the rules, either as customers or competitors, are going to be in politics, too. And things will get decided in state capitals and more important in Washington of importance. So they will, they'll have lobbyists and they'll play a political game and their opponents will. I like our position. It would be very dumb for the country to do anything that discourage the railroad industry, from spending the kind of capital that will need to be spent to take care of the transportation needs of this country in the future. If you think about the money that will have to be spent on highways and the costs involved in there and the congestion problems, the emissions problems and everything, the country has a strong interest in the railroad industry, having every incentive to invest, and the railroad industry pays its own way. You know, we'll spend $3.9 billion this year, and a lot of it will go to improve our presence system an awful lot, and some will go toward expansion of a type, and the country will be better off on that, and the federal government will not write a check for it.”

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Greg AbelMeeting2012-05-05conf:medium

Morning Session - 2012 Meeting

“that we just talked about because they don't pay any federal income taxes. They've used bonus depreciation, which was enacted last year. where you get 100% right off in the first year, they wipe out their taxable income. And if they've wiped out their taxable income through such things as bonus depreciation, they do not, they cannot have any appetite for wind projects where they get a tax credit or in the solar arrangement. So by being part of, by being part of Berkshire Hathaway, which is a huge taxpayer, here. Mid-American has extra abilities to go out and do a lot of projects without worrying about whether they've sort of exhausted their tax capacity. It's an advantage we have.”

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Greg AbelMeeting2011-04-30

Afternoon Session - 2011 Meeting

“If we were to unilaterally, for example, decide to close down and significant coal generation, we would be told to depreciate those plants over a shorter period, and that would translate not into cost of Berkshire, it would translate into higher rates for electricity. We are entitled to a return on our investment, and the faster the depreciation, the higher the rates have to be in order to achieve allowed returns. So there was a woman from Oregon speaking, for example, and the burden of any unilateral attempt by us, and we couldn't do it without the approval of the utility commissions, but the burden would fall on customers. And it is true, actually, that we would recoup accelerated appreciation, and we would probably have a much larger investment on which we would be allowed to return. in other generating facilities. But this is a question, this is not something that the stockholders of Berkshire end up incurring the cost of. It's something that the rate or the users of electricity in these various states will pay for. And that judgment quite properly should be made by the public utility commissions of those various states. And whatever they decide, you know, we, uh, we will follow. And over time, there's no question, just like we've talked about our wind generation in Iowa, this country will move toward a different composition of electricity generation. And as I stated earlier, I personally favor more nuclear over time. But that will be determined by, at the both at the state level and then some extent in some ways at the national level. So it's our recommendation that the motion be voted down and I think the motion is now ready to be acted upon. If there are any others, if there are any shareholders voting in person, they should now mark their ballots on the motion and allow the ballot to be delivered to the inspector of elections.”

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Greg AbelMeeting2010-05-01conf:medium

Morning Session - 2010 Meeting

“And 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 Mid-American Energy. We went into a business of 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. C's not a growing business. It's a wonderful business. But it doesn't translate itself around the world like something like a Coca-Cola would. So I would say you've got your finger right on the right point. I think you will, 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. But if anybody expects billion returns from this base in Berkshire, you know, we don't know how to do it. Charlie?”

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Greg AbelMeeting2010-05-01conf:medium

Morning Session - 2010 Meeting

“be some adjustment perhaps in one direction or another. Usually in the case of regulated utilities, they talk about return on equity, and you have different amounts in different states, but some states it may be 11 percent, and some states it may be 12 or something like that. It's usually in that range. With the railroads, they've gone toward this return on invested capital, which includes debt and is an adjusted figure. And I don't think that's a crazy, crazy standard. I mean, the railroad, unlike the electric utility, when you get an allowed return in the electric utility, you're almost certain of earning it. I mean, if you behave yourself. And your demand is never going to fall off that much, probably, that you'll go way below your return. The railroad's got more downside in it if you run into a terrific industrial recession. So you're not as protected on the downside. But there should be some figure, and I would argue that the 10 and a half percent or whatever, maybe on invested capital, So that's been achieved by the four big railroads in recent years. There's something close to that or right around that figure. And you want the railroads investing a whole lot more than depreciation. And I would think that would be certainly an inducement to me to invest money in improving the transportation system. And on the other hand, if that return were far lower than that, it would be crazy to put money in, because you can't change that railroad system and do something else with it. So I think the country and and the railroad systems have a very common interest in not earning exorbitant profits or anything like that, but getting a decent return on what is sure to be much needed investment over the next 10, 20, 30 years. And I'd go along with, if the Surface Transportation Board says 10.5% or something number like that, I think that's not a crazy number. Charlie?”

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Greg AbelMeeting2009-05-02conf:medium

Afternoon Session - 2009 Meeting

“We always keep a significant amount of cash at the parent company, not in the regulated subsidiary, so that whatever comes along, we're prepared for. And that's pretty much the story of the first quarter, and I wouldn't be surprised. I mean, I guess I would almost be surprised if the opposite happened if the world changed much over the remainder of the year. I think that we will continue. barring some huge natural catastrophe. We will do quite well on insurance, and we will do well in the utility operation, and we won't do well in most of the other operations, but we will have a significant operating earnings, as I mentioned, about a billion seven in the first quarter. If you look at our operating earnings, a billion or a little more that comes from mid-American, from our energy business, basically we're going to leave in that business. I mean, there's all kinds of opportunities to do things, even within our present subsidiaries, there's lots of projects that promised decent returns. So you should not think of that billion or so as being available to us at the parent. It would be if we wanted it to be. But it's a practical matter, we're going to leave it all in. The rest of the earnings are available to us in cash, plus or minus any change in the float to do anything that's interesting that comes along. So that's an abbreviated summation of the first quarter, we will put out the 10Q next Friday after the close, and we'll continue to follow that policy. With that, we'll go to Andrew.”

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Greg AbelMeeting2009-05-02

Afternoon Session - 2009 Meeting

“Yeah, we're the largest in terms of owned capacity and wind in the country, I believe, of any utility. And Iowa has the greatest percentage of its electricity generated by wind. But of course, the wind only blows about 35 percent of the time in Iowa, something like that. And We've got people here who can be more accurate than that. So you can't count on it for your base load or anything of the sort. But Iowa has been very, very receptive, and I would argue,”

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Greg AbelMeeting2009-05-02

Afternoon Session - 2009 Meeting

“progressive in encouraging us, and we've encouraged them in return, to bring in a lot of wind capacity. We are a net exporter of electricity in Iowa. I was far more than self-sufficient in our service area in terms of electric generation. And I think that works to the benefit of the people of Iowa. And we have an arrangement with Iowa. As you may know, we have not increased our rates at all, but for more than a decade now. And that's been achieved by efficiencies. It's been achieved with wind generation. We have a return that's built in on that that's fair to us, fair to the people of Iowa. And part of that return comes in the form of a tax credit, I think it's 1.8 cents per kilowatt hour that is given to anybody in the United States that develops wind power generation. We love the idea of putting in more wind, and we're doing it. We're doing it out at Pacific Corp. And I think we'll continue to be a leader. And one advantage we have over perhaps some people is that we are a big taxpayer, so that we don't have to worry about whether the tax credits are useful. I guess the tax credit could be sold also, but we don't need to do that in our particular situation. So you'll see you'll see more and more wind generation by the mid-American companies. When we went into Pacific Corp out on the west coast, the six states out there, They had virtually nothing, maybe nothing at all, in wind generation, and we've developed a lot, and we've got more coming on.”

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Greg AbelMeeting2009-05-02conf:medium

Afternoon Session - 2009 Meeting

“them a firm bid that evening in Baltimore. And that's one of the advantages of Berkshire. That is a – I think that's a durable competitive advantage. I think there are very few organizations that will act in that manner, and that where you have the talent there that you feel as a CEO, you can back them up with that kind of money without worrying about it. So that is a plus for a Berkshire, even though it didn't work out of that case. We will do more in the utility business. Well, you bought a pipeline, didn't you, in about two hours? Yeah, we did buy a pipeline, and it turned out very well. And in that particular case, the company DinaG, this was back in 2002 or so, the company needed the money enormously. They'd gotten the pipeline from Enron as a very complicated transaction, but they needed the money, and we needed the Federal Trade Commission approval, the FTC approval on the deal, as would of anybody that was buying it. And we literally wrote a letter, I wrote a letter to the commission, and I said, you know, these guys need the money. They need it before the 30-day period is up, and let us go through with us early, and we'll do any damn thing you tell us subsequently. And Berkshire can make that kind of a transaction. We don't ask the lawyers before we do it or anything, we just do it. And that is an advantage, and it was an advantage to Dinagogy. It got them through a period that they would have, I'm not sure they would have gotten through otherwise. So we can move fast when the time comes. But one of the reasons we can move, there's a couple of reasons we can move fast. A, we've always got the money, you know, and we've got a mental attitude toward that. But we also know we've got the managers that can deliver on the properties once we own them, and that's a huge, huge advantage. China, we would be restricted by that ownership limitation. But it's very hard to imagine that we won't find more things to do in China over time. I mean, it's a huge market. We do a lot of things, and some of those are exportable. And there will also perhaps be opportunities to buy more businesses there. We would have bought more than 10% of BYD if we could have, but that's all that they wish to sell us. So we hope that comes about. In terms of the Chinese dollar holdings, you know, in a way they can't get rid of owning more dollar assets. I mean, the nature of it is, if. If we're going to run a, as we did a few years ago, or a year or two ago, if we're going”

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Greg AbelMeeting2008-05-03

Morning Session - 2008 Meeting

“process as to what should occur. These decisions through that regulatory process have been ongoing for eight years, and they won't culminate for probably another six. Having said that, there are 28 various parties from federal, state, and local agencies, Native Americans, fishery folks, local landowners that are party to a discussion as to what should or should not happen with these assets. And I left out the irrigators. Of those 28 parties, other than Pacific Corp, there are, at least four different directions in which people think this process should go. From our perspective, we will be pleased to find a resolution when the 28 parties agree as to how that resolution should go forward, how it would be funded, et cetera. Fundamentally, it's up to the Federal Energy Regulatory Commission, State and Federal Regulators, in addition to them. and then our specific regulators in each of the six states that Pacific Corp operates in. So if public policy moves in the direction of dam removal, fish ladders, or maintaining the existing status quo, that would be the process in which we would go forward. We are working constructively with each of the various parties. We've met numerous times with each of the four tribes, and it's a complicated situation. and one that hopefully over time a cooperative resolution can be met.”

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Greg AbelMeeting2008-05-03

Morning Session - 2008 Meeting

“And those commissions are appointed state by state to make those decisions. Now, in addition, in this case, we have the FERC, as it's called, the Federal Energy Regulation Commission, that will also have to rule on it. They will listen to everybody. They'll listen to you. They'll listen to the 28 others that Dave mentioned. In the end, we will do exactly what they say. I mean, as a public utility, if they tell us to put up our – Not put up coal, we will not put up coal. If they tell us to put up wind, assuming that there's a place where there is wind, we will put up wind. We follow the dictates of the regulatory bodies that tell us what to do. And in the end, they give us a fair return on the assets employed, and we will get that return, whatever the assets may be. If they tell us to put in coal assets, we'll get a return on that. So from our standpoint, on the standpoint of profitability, it's neutral. From the standpoint of society, weighing all these different things, that's a decision society will make. But Dave, let's want to talk to the algae question. Sure. First, it's important. The Carrick tribe did do a study and found bioaccumulation of microcystin or blue-green algae in the perch and the freshwater mussels in the Kalameth River. What's important to understand about that, and by the way, we disseminated that report immediately to state and federal health agencies because they should know about it. Microcystin is not unique to the Kalameth River. There are 27 other lakes in the state of Oregon that have blue-green algae. 70 different countries, every province in Canada, and 27 of the U.S. states have lakes that have blue-green algae. It is created from lakes that have a high abundance of nutrients and naturally forming algae. And at the head of the Kalameth River is a lake known as Upper Kalameth Lake, which is actually a Bureau of Reclamation reservoir. It's a shallow, large reservoir that is known as being hyperutrophic, which means a great abundance of algae and various nutrients. Those nutrients then flow down the river and do pass through or in cases get backed up by the four reservoirs down below the Bureau of Reclamation. of reclamation linked dam. The important issue is those things are in fact taken into account by the Federal Energy Regulatory Commission. They issued their environmental impact statement last November, which endorsed various”

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Greg AbelMeeting2008-05-03

Morning Session - 2008 Meeting

“Warren, just one comment, and not in any way to be disrespectful of the fishermen, but we are not polluting the river. We're not doing, adding any, adding anything to the water that isn't coming out of Upper Calameth River. And we do recognize the different views as to whether the irrigation is a good thing or a bad thing, whether renewable power such as hydro is better than returning the river to its prior 1907 date. But the one thing that, just to be clear, is that Pacificorp is not adding anything, the water is flowing through Pennstocks, creating electricity. and coming out the rear end, and it did so under a 50-year FERC license.”

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