2014 Berkshire Hathaway Annual Meeting (Full Version)

Thank you. Good morning. Uh, before we start, there are two very special guests that I'd like to introduce. Have stand up. Uh, the first, uh, even though he was on tour, he, uh, took a quick, uh, detour to Omaha to be here today, and will my friend Paul Anka please stand up? Paul. [Applause]

With all the talk that had been around about my succession, I thought it was probably a good idea to try and hook up with someone famous that might give me a shot at a second career here at the, uh, so we were available for weddings and funerals and bar mitzvahs. And we actually had one offer the other day. I thought it was kind of insulting, and they got offered a thousand dollars. And I mean, for me and Paul, that really seemed a little ridiculous. I told the people that, and they said, "Okay, we'll make it ten thousand if just Paul comes."

Now, we have one other very special guest. This affair does not just happen by itself. And there's a young woman who had a baby, a young boy named Brady in September. And she has marshaled together 400 plus of the people from our various companies and put on the show you're witnessing today. And I just want to say a special thanks to the woman we all love, and especially me, Carrie Silva. Kerry, there she is. [Applause]

Okay, now we get down to the minor players, and we'll introduce the board of directors. The, uh, we're going to have the well, we'll have the board meeting, uh, or the shareholders meeting, I should say, after the, uh, Q&A, which will end at 3:30, and then we'll recess for 15 minutes. At 3:45, reinstitute the, uh, or begin the shareholders meeting.

But for those of you who won't be around at 3:45, I'd like to have a chance to meet the directors now. So I will introduce them one at a time and ask them to stand. Uh, hard as it may be, withhold your applause until they're all finished standing, and then you can go crazy.

Uh, so doing it alphabetically, and if you'll stand as I give your name: Howard Buffett, Steve Burke, Sue Decker, Bill Gates, Sandy Goddessman, Charlotte Guyman, Don Keil, my partner Charlie Munger, Tom Murphy, Ron Olson, Walter Scott, and Merrill Whitmer. And that is the board of directors of Berkshire. [Applause]

We have just a couple of slides, and then we'll move right into the questioning, which will go on until roughly noon. Take a break at noon and come back about one o'clock, and then we'll continue until 3:30, at which point we'll adjourn, then have the annual meeting at 3:45.

But there are just a couple slides. The, we released our earnings yesterday, and I've always emphasized we try to release our earnings always after the markets closed, and preferably after the markets closed on a Friday. So that people will have a full weekend to digest the information.

Because there's a lot of information about Berkshire every quarter, and it's contained primarily in a 10-Q that we make available for you to read over the full weekend. So we always urge you not to just look at the summary figures, but take a look at the 10-Q. It's great reading, and absorb all that by Monday morning.

But here we have the summary for the first quarter, and as you can see, our operating earnings were down a bit. Um, and in that was more than accounted for in insurance underwriting. You should understand that insurance underwriting from quarter to quarter really doesn't mean that much for one thing. It can be quite affected by changes in foreign exchange, which really don't have anything to do with our insurance business, but, or at least in the reality of interim results.

Our insurance business now has a float of 77 billion dollars, and that 77 billion dollars is ours to invest. And whether it costs us anything or not is determined by whether we have an underwriting profit. So even though our underwriting profit in the first quarter was quite satisfactory, but nevertheless down from the first quarter of last year, the insurance business is marvelous for us.

And, uh, if we even break even, that's 77 billion dollars, which is subtracted from net worth. I mean, it's a liability on the balance sheet, but if it's cost free, it really does this about as much good as...