2012 Berkshire Hathaway Annual Meeting (Full Version)

[Applause]

Good morning! I'm More and then this hyperkinetic fellow is Charlie. We're going to, uh, conduct this pretty much as we have in the past. We'll take your questions, alternating among the media and analysts in the audience until 3:30, with a break around noon for an hour. Then, we'll have the regular meeting of the shareholders beginning at that time.

Feel free to drift away and shop in the other room; we have a lot of things for you there. We only have one scripted part of this meeting. See's Candy has placed on all of the seats a little packet, and what we'd like you to do, we're going to, like, we'd like to videotape everyone eating their pop at the same time for posting on Facebook and for use by the media in today's meeting.

So if each of you will open up the lollipop now. Now first of all, if you've got them open, we'd like you to hold them up above your head. We're gonna get a shot of eighteen thousand—Guinness, here we come! And we'll get a few shots of that. We got it all melee, okay? Now you can take off the cover and the good part comes.

Charlie and I have fudge up here and we have peanut brittle. I said the meeting would run till 3:30. If we've consumed 10,000 calories each, we sometimes have to stop a little early at that point. The only slide we have at this point is we did put out our earnings—first quarter earnings yesterday.

In general, all of our companies, with the exception of the ones in the residential construction business, which was the case last year, and it’s the case this year, that all of the companies except those in that area pretty much have shown good earnings. In the case of the bigger ones, the five largest non-reinsurance companies earned, uh, all had record earnings last year, aggregating of those five companies something over nine billion pre-tax.

In the annual report, I said I thought they would, uh, if business didn't take a nosedive this year, that they would earn over 10 billion pre-tax this year, and certainly nothing we've seen so far would cause me to backtrack on that prediction. If you read our 10-Q and turn to the insurance section, you will see that there was an accounting change mandated for all property casualty insurance companies, which is rather technical. I won't get into the details.

It changed something that's called the deferred policy acquisition cost, called D-PAC. It has no effect on the operations at all on the cash, but it did change the earnings downward by about 250 million pre-tax for Geico in the first quarter. It's based on whether you defer some advertising. Geico had a terrific first quarter, had a real profit margin of almost nine percentage points, and the float grew. Everything good happened at Geico in the first quarter.

We had good growth, but we did make that accounting change. That accounting change also affects, to a lesser degree, the second quarter, and it may even trail just a bit into the third. But the underlying figures are somewhat better than the figures that we've presented there. So overall, I feel good about the year.

Maybe we should, even though we'll do it again at the meeting, we should probably introduce the directors. I don't know whether the audience can see the people here; if you can turn up the lights or something so they can. We'll start off, of course, with Charlie Munger.

Then alphabetically, if the directors are just... I was going to suggest that you withhold your applause until the end, but I know he's sort of irresistible, so we'll make an excuse for him. For the remainder of the directors, if they stand and remain standing, then you can applaud them at the end, if you will.

We've got Howard Buffett, Stephen Burke, Susan Decker, Bill Gates, David Gottisman, Charlotte Geyman, Don Keogh, Tom Murphy, Ron Olson, and Walter Scott Jr.

Now you can go wild! [Applause]