Berkshire Hathaway's operational performance in 2025 resulted in a profit of $44.5 billion. This figure is lower than the $47.4 billion achieved in 2024 but exceeds the five-year average of $37.5 billion. This outcome underscores the resilience of our core businesses while also indicating potential for further enhancement.
Before delving into specifics, it is important to reiterate a core principle at Berkshire: our GAAP net income—which often experiences significant annual fluctuations due to realized and unrealized investment gains and losses—must be interpreted with caution. While these gains and losses are important over the long term, we believe operating profit remains the superior metric for evaluating Berkshire's annual operational performance.
Equally important is the cash generated by our various businesses. In 2025, Berkshire's net cash flow from operating activities was $46 billion, compared to a five-year average exceeding $40 billion. This highlights our capacity to invest in opportunities across our operations.
**Insurance Business** In 2025, Berkshire's insurance operations achieved their core objective: generating underwriting profit and growing float in a prudent and disciplined manner.
We own a collection of exceptional insurance companies, each managed with a long-term perspective. Their performance reflects both their inherent strengths and industry conditions. After several years of necessary adjustments to pricing and policy terms, these trends began to slow or even reverse in 2025, particularly in the second half. This may signal a reduction in the scale of our property and casualty underwriting in the near future.
Despite significant wildfire-related losses in Los Angeles early in the year, the Atlantic hurricane season was unusually quiet. For the first time in a decade, no hurricanes made landfall in the United States—our largest exposure region for direct insurance and reinsurance. This serves as a reminder that nature, not Warren, and certainly not I, controls the weather.
Our property and casualty business recorded a combined ratio of 87.1% in 2025, significantly better than our five-year (90.7%), ten-year (93.0%), and twenty-year (92.2%) averages. For an insurer of our size, this represents an outstanding underwriting result. (Our retroactive reinsurance business, which does not charge conventional premiums, is excluded from these figures.)
Discussing our insurance business necessitates acknowledging and expressing gratitude to Ajit. For nearly four decades, his judgment and discipline have shaped our ability to underwrite large and complex risks carefully and precisely. The organization and team he built understand both the inherent limits and opportunities of massive risks, and his principles continue to guide our team today. Their steady performance benefits us all.
**GEICO** GEICO was a significant contributor to the improvement in the group's combined ratio. In recent years, GEICO has optimized its cost structure, strengthened underwriting discipline, and enhanced its customer segmentation and risk-pricing capabilities. Industry-wide rate increases from late 2022 through 2024 continued to positively impact performance in 2025. While the magnitude of increases varied by product and region, the overall pricing environment remained firm, from which GEICO benefited.
The extensive rate hikes in recent years repaired GEICO's margins but came at the cost of lower customer retention. Competitors' rate reductions may prolong this pressure into 2026. The GEICO team remains focused on accurate risk pricing for new and existing customers. Restoring retention rates while maintaining underwriting discipline is a process that requires time.
Beyond refining pricing strategies to retain customers, GEICO is investing in technology to improve efficiency and service levels while maintaining its position as a low-cost operator in the industry.
**Direct Insurance Segment** Across our other direct property and casualty operations, demand was robust at the start of 2025, with pricing levels reasonable or continuing to improve in most commercial lines. As the year progressed, an influx of capital into the market led to declining rates or slower increases in several key business lines. We consistently prioritize underwriting discipline over business volume. As pricing attractiveness waned, our premium growth stabilized. We anticipate these direct insurance operations may face continued pressure in 2026 and beyond.
**Reinsurance Segment** Our reinsurance operations faced similar industry dynamics. The reinsurance sector attracted substantial new capital from both traditional and alternative markets. Coupled with relatively moderate global catastrophic underwriting losses in most major regions during 2025, this led to a significant decline in property reinsurance prices. In most casualty reinsurance lines, claims cost inflation continued to outpace price increases. As long as this phase of the cycle persists, we expect to reduce our reinsurance premium volume.
Leveraging Berkshire's structural advantages, our insurance teams will continue to exercise patience: 1. We possess substantial capital, enabling us to underwrite large and unconventional risks. 2. We grant our insurance managers significant operational autonomy, without imposing quarterly profit targets or growth mandates that could distort their underwriting judgment. 3. We uphold underwriting discipline as a core element of insurance success. 4. We maintain a long-term perspective, avoiding blind pursuit of industry fads and浮躁.
Future market conditions will only reward insurers that focus on sustainable growth in underwriting profit, not merely business scale; on customer trust and loyalty, not short-term market share gains; and on long-term resilience, not short-term opportunism.
At year-end, our insurance float—funds we hold for future claims and invest for Berkshire in the interim—reached $176 billion. This represents an increase from $171 billion at the end of 2024 and a substantial rise from $88 billion at the end of 2015.
Subject to insurance regulations, the amount of regular dividends our insurance subsidiaries can pay to Berkshire is capped. In 2025, the maximum dividend payable without prior regulatory approval was $31 billion. Ultimately, the insurance operations returned $29 billion to Berkshire during the year, demonstrating their continued robust capital strength.
**Non-Insurance Business Segment** Our non-insurance segment comprises high-quality businesses in railroads, utilities and energy, manufacturing, services, and retail, including Pilot and McLane.
Berkshire's management approach for our 51 non-insurance operating subsidiaries differs significantly from that of most diversified conglomerates. We have no multi-layered management structure, and the corporate headquarters does not assign quotas or set targets. Each company reports directly to its Chief Executive Officer, and we expect CEOs to continually pursue operational excellence and address performance shortcomings. Capital allocation decisions for these businesses are ultimately made by me, Berkshire's CEO, based on each operation's growth opportunities and associated risks. Most of these businesses operate with zero debt and will continue to do so.
Within these operations, we have made progress on core fundamentals that drive long-term value, while also recognizing room for improvement. Regardless of industry, our requirement remains consistent: managers must think like owners and execute with rigorous efficiency—we value results, not intentions.
We are pleased to welcome Adam Johnson as President of the Consumer Products, Services, and Retail segment. Deeply versed in Berkshire's culture for nearly 30 years (including a decade as CEO of NetJets), Adam now oversees a segment comprising 32 companies. Over the past ten years, Adam and his NetJets team operated with an owner's mindset, earning a reputation for excellent execution and transforming NetJets from a challenging business model into a successful enterprise creating value for Berkshire shareholders. He will collaborate with the CEOs in his segment under the same philosophy—emphasizing accountability and rejecting complacency.
**BNSF Railway Company** As one of North America's six major freight railroads, BNSF is a critical component of the U.S. economic transportation infrastructure. Berkshire acquired this iconic company in 2010 for an equity value of $34.5 billion. In 2025, BNSF generated $8.1 billion in net operating cash flow and returned $4.4 billion to Berkshire via dividends. For context, its average annual dividend over the past five years was $4.1 billion.
Safety, reliable service, and a competitive cost structure ultimately determine a railroad's success—these are also the primary criteria for evaluating our management's performance. BNSF remains committed to continuous improvement in all three areas. Safety is the top priority, and BNSF has maintained an industry-leading safety record over the past decade. In 2025, terminal dwell times decreased, and overall train velocity reached the highest levels in the company's history.
While these advancements are important, there is still room for improvement: operational optimization needs to be more effectively translated into enhanced financial results. We view the operating margin (the inverse of the industry's operating ratio) as the best performance metric. In 2025, BNSF's operating margin improved to 34.5% from 32.0% in 2024, though it remains slightly above its five-year average.
The gap to industry-leading performance is still significant. Closing it requires continuous improvements in efficiency and service. Each percentage point increase in the operating margin would generate approximately $230 million in additional operating cash flow for our shareholders. The management team understands the importance of this opportunity, and we would be deeply disappointed if significant progress is not made in the coming years.
While BNSF focuses on its own improvements, the proposed merger of Union Pacific and Norfolk Southern suggests potential consolidation in the rail industry. Berkshire has clearly stated it has no intention of acquiring another Class I railroad, as the current economics do not align with shareholder interests. Regarding this proposed merger, BNSF's focus is on ensuring it can continue to offer customers a competitive value proposition, including comprehensive and fair access to eastern rail markets.
**Berkshire Hathaway Energy (BHE)** Berkshire Hathaway Energy's goal is clear: to provide customers with affordable, stable, and reliable energy services. The energy sector is entering a significant investment cycle driven by growing electricity demand from AI computing and increasing wildfire risks in the Western U.S., which amplifies BHE's responsibilities. We welcome growth, but it must not come at the expense of affordability and reliability for households, small businesses, and industrial users.
BHE remains committed to delivering tangible value for customers in its service markets— its average electricity rates are 24% lower than the national average retail rate, with rates in all its service markets at least double digits below that benchmark. Infrastructure built for hyperscale cloud providers and data centers must be costed to the relevant customers and reflect risks associated with sudden, long-term demand shifts. BHE will only pursue such incremental growth and commit shareholder capital when risk and reward are reasonably balanced.
In wildfire risk mitigation, BHE has taken a leadership role, collaborating with regulators, government officials, and the communities it serves. Its mitigation plans are among the most comprehensive in the industry. When BHE's utility companies are responsible for wildfires, they acknowledge it, including PacifiCorp's primary settlement concerning the 2020 Labor Day fires. At the same time, PacifiCorp is not the insurer of last resort and should not be viewed as a party of "limitless financial capacity." In instances where no liability exists, the company will continue to seek judicial recourse. Taking responsibility while reasonably contesting inappropriate liability claims is crucial to upholding the regulatory compact governing utility operations.
BHE is restructuring to position itself for future development. In 2025, despite numerous challenges, BHE generated $8.4 billion in net cash from operating activities, consistent with its five-year average. Our willingness to commit capital depends on the continued effectiveness of the regulatory compact—the framework allowing utilities to earn a fair return on investment. Short-term opportunities are substantial, and BHE will prudently select the best options.
**Manufacturing – Industrial Products Segment** In 2025, our industrial products businesses operated in a challenging macroeconomic environment, yet their earnings demonstrated inherent resilience. Operational execution across the group was strong, particularly at Precision Castparts, Marmon, IMC, and Lubrizol, laying a solid foundation for capturing incremental opportunities.
The Lubrizol team, led by Rebecca Liebert, played a key role in the acquisition of OxyChem and its planned integration as an independent operating business under Berkshire. While serving as Lubrizol's CEO, Rebecca has also assumed management responsibilities for OxyChem, working closely with OxyChem CEO Wade Alleman and his management team.
Our largest industrial manufacturer, Precision Castparts, has navigated a difficult cycle in the aerospace industry for much of the past decade. Significant aircraft production slowdowns, declining output, and a series of shocks—most severely the near-halt in air travel during the pandemic—consistently pressured profitability.
**Pilot Company** Pilot's operations continue to strengthen. As North America's largest travel center operator, it competes based on location, service, and reliability. Management is focused on execution at the store level—enhancing the customer experience for professional drivers and general travelers, investing in store upgrades, food offerings, and customer loyalty programs. Since 2023, Pilot has increased capital expenditures for facility modernization and expansion of its electric vehicle charging network.
These efforts are reflected in Pilot's Pro Preference score—a third-party metric measuring how often professional drivers choose its travel centers over competitors'. The score rose from 27% in 2022 to 35% in 2025, ranking second in the industry. Our goal is to become the industry leader, and we will not be satisfied until that objective is achieved.
We initially invested in Pilot in 2017, but contractual restrictions prevented us from assuming full management control until 2023. Such a misstep will not be repeated.
The core value of this business is reflected in its cash-generating ability. In 2025, Pilot generated $1.7 billion in net cash from operating activities, an improvement over 2024. As operations continue to strengthen and capital requirements normalize, we expect Pilot to return more cash to Berkshire.