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1、BERKSHIREHATHAWAYINC.2022ANNUAL REPORTBERKSHIRE HATHAWAY INC.2022 ANNUAL REPORTTABLE OF CONTENTSBerkshires Performance vs.the S&P 500.2Chairmans Letter*.3-11Form 10-K Business Description.K-1Risk Factors.K-25Description of Properties.K-28Managements Discussion.K-33Managements Report on Internal Cont

2、rols.K-66Independent Auditors Report.K-67Consolidated Financial Statements.K-70Notes to Consolidated Financial Statements.K-75Appendices Shareholder Event and Meeting Information.A-1Property/Casualty Insurance.A-2Operating Companies.A-3Stock Transfer Agent.A-4Directors and Officers of the Company.In

3、side Back Cover*Copyright2023 By Warren E.BuffettAll Rights Reserved1Berkshires Performance vs.the S&P 500Annual Percentage ChangeYearin Per-ShareMarket Value ofBerkshirein S&P 500with DividendsIncluded1965.49.510.01966.(3.4)(11.7)1967.13.330.91968.77.811.01969.19.4(8.4)1970.(4.6)3.91971.80.514.6197

4、2.8.118.91973.(2.5)(14.8)1974.(48.7)(26.4)1975.2.537.21976.129.323.61977.46.8(7.4)1978.14.56.41979.102.518.21980.32.832.31981.31.8(5.0)1982.38.421.41983.69.022.41984.(2.7)6.11985.93.731.61986.14.218.61987.4.65.11988.59.316.61989.84.631.71990.(23.1)(3.1)1991.35.630.51992.29.87.61993.38.910.11994.25.0

5、1.31995.57.437.61996.6.223.01997.34.933.41998.52.228.61999.(19.9)21.02000.26.6(9.1)2001.6.5(11.9)2002.(3.8)(22.1)2003.15.828.72004.4.310.92005.0.84.92006.24.115.82007.28.75.52008.(31.8)(37.0)2009.2.726.52010.21.415.12011.(4.7)2.12012.16.816.02013.32.732.42014.27.013.72015.(12.5)1.42016.23.412.02017.

6、21.921.82018.2.8(4.4)2019.11.031.52020.2.418.42021.29.628.72022.4.0(18.1)Compounded Annual Gain 1965-2022.19.8%9.9%Overall Gain 1964-2022.3,787,464%24,708%Note:Data are for calendar years with these exceptions:1965 and 1966,year ended 9/30;1967,15 months ended 12/31.2BERKSHIRE HATHAWAY INC.To the Sh

7、areholders of Berkshire Hathaway Inc.:Charlie Munger,my long-time partner,and I have the job of managing the savings of agreat number of individuals.We are grateful for their enduring trust,a relationship that often spansmuch of their adult lifetime.It is those dedicated savers that are forefront in

8、 my mind as I writethis letter.A common belief is that people choose to save when young,expecting thereby to maintaintheir living standards after retirement.Any assets that remain at death,this theory says,will usuallybe left to their families or,possibly,to friends and philanthropy.Our experience h

9、as differed.We believe Berkshires individual holders largely to be of theonce-a-saver,always-a-saver variety.Though these people live well,they eventually dispensemost of their funds to philanthropic organizations.These,in turn,redistribute the funds byexpenditures intended to improve the lives of a

10、 great many people who are unrelated to the originalbenefactor.Sometimes,the results have been spectacular.The disposition of money unmasks humans.Charlie and I watch with pleasure the vast flowof Berkshire-generated funds to public needs and,alongside,the infrequency with which ourshareholders opt

11、for look-at-me assets and dynasty-building.Who wouldnt enjoy working for shareholders like ours?What We DoCharlie and I allocate your savings at Berkshire between two related forms of ownership.First,we invest in businesses that we control,usually buying 100%of each.Berkshire directscapital allocati

12、on at these subsidiaries and selects the CEOs who make day-by-day operatingdecisions.When large enterprises are being managed,both trust and rules are essential.Berkshireemphasizes the former to an unusual some would say extreme degree.Disappointments areinevitable.We are understanding about busines

13、s mistakes;our tolerance for personal misconductis zero.In our second category of ownership,we buy publicly-traded stocks through which wepassively own pieces of businesses.Holding these investments,we have no say in management.3Our goal in both forms of ownership is to make meaningful investments i

14、n businesses withboth long-lasting favorable economic characteristics and trustworthy managers.Please noteparticularly that we own publicly-traded stocks based on our expectations about their long-termbusiness performance,not because we view them as vehicles for adroit purchases and sales.Thatpoint

15、is crucial:Charlie and I are not stock-pickers;we are business-pickers.Over the years,I have made many mistakes.Consequently,our extensive collection ofbusinesses currently consists of a few enterprises that have truly extraordinary economics,manythat enjoy very good economic characteristics,and a l

16、arge group that are marginal.Along the way,other businesses in which I have invested have died,their products unwanted by the public.Capitalism has two sides:The system creates an ever-growing pile of losers while concurrentlydelivering a gusher of improved goods and services.Schumpeter called this

17、phenomenon“creativedestruction.”One advantage of our publicly-traded segment is that episodically it becomes easy tobuy pieces of wonderful businesses at wonderful prices.Its crucial to understand that stocks oftentrade at truly foolish prices,both high and low.“Efficient”markets exist only in textb

18、ooks.Intruth,marketable stocks and bonds are baffling,their behavior usually understandable only inretrospect.Controlled businesses are a different breed.They sometimes command ridiculously higherprices than justified but are almost never available at bargain valuations.Unless under duress,theowner

19、of a controlled business gives no thought to selling at a panic-type valuation.*At this point,a report card from me is appropriate:In 58 years of Berkshire management,most of my capital-allocation decisions have been no better than so-so.In some cases,also,badmoves by me have been rescued by very la

20、rge doses of luck.(Remember our escapes fromnear-disasters at USAir and Salomon?I certainly do.)Our satisfactory results have been the product of about a dozen truly good decisions thatwould be about one every five years and a sometimes-forgotten advantage that favors long-terminvestors such as Berk

21、shire.Lets take a peek behind the curtain.The Secret SauceIn August 1994 yes,1994 Berkshire completed its seven-year purchase of the 400million shares of Coca-Cola we now own.The total cost was$1.3 billion then a very meaningfulsum at Berkshire.The cash dividend we received from Coke in 1994 was$75

22、million.By 2022,the dividendhad increased to$704 million.Growth occurred every year,just as certain as birthdays.All Charlieand I were required to do was cash Cokes quarterly dividend checks.We expect that those checksare highly likely to grow.4American Express is much the same story.Berkshires purc

23、hases of Amex were essentiallycompleted in 1995 and,coincidentally,also cost$1.3 billion.Annual dividends received from thisinvestment have grown from$41 million to$302 million.Those checks,too,seem highly likelyto increase.These dividend gains,though pleasing,are far from spectacular.But they bring

24、 with themimportant gains in stock prices.At yearend,our Coke investment was valued at$25 billion whileAmex was recorded at$22 billion.Each holding now accounts for roughly 5%of Berkshires networth,akin to its weighting long ago.Assume,for a moment,I had made a similarly-sized investment mistake in

25、the 1990s,onethat flat-lined and simply retained its$1.3 billion value in 2022.(An example would be ahigh-grade 30-year bond.)That disappointing investment would now represent an insignificant0.3%of Berkshires net worth and would be delivering to us an unchanged$80 million or so ofannual income.The

26、lesson for investors:The weeds wither away in significance as the flowers bloom.Over time,it takes just a few winners to work wonders.And,yes,it helps to start early and liveinto your 90s as well.The Past Year in BriefBerkshire had a good year in 2022.The companys operating earnings our term forinco

27、me calculated using Generally Accepted Accounting Principles(“GAAP”),exclusive ofcapital gains or losses from equity holdings set a record at$30.8 billion.Charlie and I focus onthis operational figure and urge you to do so as well.The GAAP figure,absent our adjustment,fluctuates wildly and capriciou

28、sly at every reporting date.Note its acrobatic behavior in 2022,which is in no way unusual:Earnings in$billions2022 Quarter“Operating Earnings”GAAP Earnings Weare Required to Report17.05.529.3(43.8)37.8(2.7)46.718.2The GAAP earnings are 100%misleading when viewed quarterly or even annually.Capitalga

29、ins,to be sure,have been hugely important to Berkshire over past decades,and we expect themto be meaningfully positive in future decades.But their quarter-by-quarter gyrations,regularly andmindlessly headlined by media,totally misinform investors.5A second positive development for Berkshire last yea

30、r was our purchase of AlleghanyCorporation,a property-casualty insurer captained by Joe Brandon.Ive worked with Joe in thepast,and he understands both Berkshire and insurance.Alleghany delivers special value tous because Berkshires unmatched financial strength allows its insurance subsidiaries to fo

31、llowvaluable and enduring investment strategies unavailable to virtually all competitors.Aided by Alleghany,our insurance float increased during 2022 from$147 billion to$164billion.With disciplined underwriting,these funds have a decent chance of being cost-free overtime.Since purchasing our first p

32、roperty-casualty insurer in 1967,Berkshires float has increased8,000-fold through acquisitions,operations and innovations.Though not recognized in ourfinancial statements,this float has been an extraordinary asset for Berkshire.New shareholderscan get an understanding of its value by reading our ann

33、ually updated explanation of float onpage A-2.*A very minor gain in per-share intrinsic value took place in 2022 through Berkshire sharerepurchases as well as similar moves at Apple and American Express,both significant investeesof ours.At Berkshire,we directly increased your interest in our unique

34、collection of businesses byrepurchasing 1.2%of the companys outstanding shares.At Apple and Amex,repurchasesincreased Berkshires ownership a bit without any cost to us.The math isnt complicated:When the share count goes down,your interest in our manybusinesses goes up.Every small bit helps if repurc

35、hases are made at value-accretive prices.Justas surely,when a company overpays for repurchases,the continuing shareholders lose.At suchtimes,gains flow only to the selling shareholders and to the friendly,but expensive,investmentbanker who recommended the foolish purchases.Gains from value-accretive

36、 repurchases,it should be emphasized,benefit all owners inevery respect.Imagine,if you will,three fully-informed shareholders of a local auto dealership,one of whom manages the business.Imagine,further,that one of the passive owners wishes to sellhis interest back to the company at a price attractiv

37、e to the two continuing shareholders.Whencompleted,has this transaction harmed anyone?Is the manager somehow favored over thecontinuing passive owners?Has the public been hurt?When you are told that all repurchases are harmful to shareholders or to the country,orparticularly beneficial to CEOs,you a

38、re listening to either an economic illiterate or asilver-tongued demagogue(characters that are not mutually exclusive).6Almost endless details of Berkshires 2022 operations are laid out on pages K-33 K-66.Charlie and I,along with many Berkshire shareholders,enjoy poring over the many facts andfigure

39、s laid out in that section.These pages are not,however,required reading.There are manyBerkshire centimillionaires and,yes,billionaires who have never studied our financial figures.They simply know that Charlie and I along with our families and close friends continue to havevery significant investmen

40、ts in Berkshire,and they trust us to treat their money as we do our own.And that is a promise we can make.*Finally,an important warning:Even the operating earnings figure that we favor can easilybe manipulated by managers who wish to do so.Such tampering is often thought of as sophisticatedby CEOs,d

41、irectors and their advisors.Reporters and analysts embrace its existence as well.Beating“expectations”is heralded as a managerial triumph.That activity is disgusting.It requires no talent to manipulate numbers:Only a deep desireto deceive is required.“Bold imaginative accounting,”as a CEO once descr

42、ibed his deception tome,has become one of the shames of capitalism.58 Years and a Few FiguresIn 1965,Berkshire was a one-trick pony,the owner of a venerable but doomed NewEngland textile operation.With that business on a death march,Berkshire needed an immediatefresh start.Looking back,I was slow to

43、 recognize the severity of its problems.And then came a stroke of good luck:National Indemnity became available in 1967,andwe shifted our resources toward insurance and other non-textile operations.Thus began our journey to 2023,a bumpy road involving a combination of continuoussavings by our owners

44、(that is,by their retaining earnings),the power of compounding,ouravoidance of major mistakes and most important of all the American Tailwind.America wouldhave done fine without Berkshire.The reverse is not true.Berkshire now enjoys major ownership in an unmatched collection of huge and diversifiedb

45、usinesses.Lets first look at the 5,000 or so publicly-held companies that trade daily onNASDAQ,the NYSE and related venues.Within this group is housed the members of the S&P500 Index,an elite collection of large and well-known American companies.In aggregate,the 500 earned$1.8 trillion in 2021.I don

46、t yet have the final results for 2022.Using,therefore,the 2021 figures,only 128 of the 500(including Berkshire itself)earned$3 billionor more.Indeed,23 lost money.7At yearend 2022,Berkshire was the largest owner of eight of these giants:AmericanExpress,Bank of America,Chevron,Coca-Cola,HP Inc.,Moody

47、s,Occidental Petroleum andParamount Global.In addition to those eight investees,Berkshire owns 100%of BNSF and 92%of BHEnergy,each with earnings that exceed the$3 billion mark noted above($5.9 billion at BNSF and$4.3 billion at BHE).Were these companies publicly-owned,they would replace two presentm

48、embers of the 500.All told,our ten controlled and non-controlled behemoths leave Berkshiremore broadly aligned with the countrys economic future than is the case at any other U.S.company.(This calculation leaves aside“fiduciary”operations such as pension funds andinvestment companies.)In addition,Be

49、rkshires insurance operation,though conducted throughmany individually-managed subsidiaries,has a value comparable to BNSF or BHE.As for the future,Berkshire will always hold a boatload of cash and U.S.Treasury billsalong with a wide array of businesses.We will also avoid behavior that could result

50、in anyuncomfortable cash needs at inconvenient times,including financial panics and unprecedentedinsurance losses.Our CEO will always be the Chief Risk Officer a task it is irresponsible todelegate.Additionally,our future CEOs will have a significant part of their net worth in Berkshireshares,bought

51、 with their own money.And yes,our shareholders will continue to save and prosperby retaining earnings.At Berkshire,there will be no finish line.Some Surprising Facts About Federal TaxesDuring the decade ending in 2021,the United States Treasury received about$32.3 trillionin taxes while it spent$43.

52、9 trillion.Though economists,politicians and many of the public have opinions about theconsequences of that huge imbalance,Charlie and I plead ignorance and firmly believe thatnear-term economic and market forecasts are worse than useless.Our job is to manage Berkshiresoperations and finances in a m

53、anner that will achieve an acceptable result over time and that willpreserve the companys unmatched staying power when financial panics or severe worldwiderecessions occur.Berkshire also offers some modest protection from runaway inflation,but thisattribute is far from perfect.Huge and entrenched fi

54、scal deficits have consequences.The$32 trillion of revenue was garnered by the Treasury through individual income taxes(48%),social security and related receipts(3412%),corporate income tax payments(812%)and awide variety of lesser levies.Berkshires contribution via the corporate income tax was$32 b

55、illionduring the decade,almost exactly a tenth of 1%of all money that the Treasury collected.8And that means brace yourself had there been roughly 1,000 taxpayers in the U.S.matching Berkshires payments,no other businesses nor any of the countrys 131 millionhouseholds would have needed to pay any ta

56、xes to the federal government.Not a dime.*Millions,billions,trillions we all know the words,but the sums involved are almostimpossible to comprehend.Lets put physical dimensions to the numbers:If you convert$1 million into newly-printed$100 bills,you will have a stack that reachesyour chest.Perform

57、the same exercise with$1 billion this is getting exciting!and the stack reachesabout34of a mile into the sky.Finally,imagine piling up$32 billion,the total of Berkshires 2012-21 federal income taxpayments.Now the stack grows to more than 21 miles in height,about three times the levelat which commerc

58、ial airplanes usually cruise.When it comes to federal taxes,individuals who own Berkshire can unequivocally state“Igave at the office.”*At Berkshire we hope and expect to pay much more in taxes during the next decade.Weowe the country no less:Americas dynamism has made a huge contribution to whateve

59、r successBerkshire has achieved a contribution Berkshire will always need.We count on the AmericanTailwind and,though it has been becalmed from time to time,its propelling force has alwaysreturned.I have been investing for 80 years more than one-third of our countrys lifetime.Despiteour citizens pen

60、chant almost enthusiasm for self-criticism and self-doubt,I have yet to see atime when it made sense to make a long-term bet against America.And I doubt very much thatany reader of this letter will have a different experience in the future.Nothing Beats Having a Great PartnerCharlie and I think pret

61、ty much alike.But what it takes me a page to explain,he sums upin a sentence.His version,moreover,is always more clearly reasoned and also moreartfully some might add bluntly stated.Here are a few of his thoughts,many lifted from a very recent podcast:The world is full of foolish gamblers,and they w

62、ill not do as well as the patient investor.If you dont see the world the way it is,its like judging something through a distorted lens.All I want to know is where Im going to die,so Ill never go there.And a related thought:Early on,write your desired obituary and then behave accordingly.If you dont

63、care whether you are rational or not,you wont work on it.Then you will stayirrational and get lousy results.9 Patience can be learned.Having a long attention span and the ability to concentrate on onething for a long time is a huge advantage.You can learn a lot from dead people.Read of the deceased

64、you admire and detest.Dont bail away in a sinking boat if you can swim to one that is seaworthy.A great company keeps working after you are not;a mediocre company wont do that.Warren and I dont focus on the froth of the market.We seek out good long-terminvestments and stubbornly hold them for a long

65、 time.Ben Graham said,“Day to day,the stock market is a voting machine;in the long term itsa weighing machine.”If you keep making something more valuable,then some wise personis going to notice it and start buying.There is no such thing as a 100%sure thing when investing.Thus,the use of leverage isd

66、angerous.A string of wonderful numbers times zero will always equal zero.Dont counton getting rich twice.You dont,however,need to own a lot of things in order to get rich.You have to keep learning if you want to become a great investor.When the world changes,you must change.Warren and I hated railro

67、ad stocks for decades,but the world changed and finally thecountry had four huge railroads of vital importance to the American economy.We wereslow to recognize the change,but better late than never.Finally,I will add two short sentences by Charlie that have been his decision-clinchers fordecades:“Wa

68、rren,think more about it.Youre smart and Im right.”And so it goes.I never have a phone call with Charlie without learning something.And,while he makes me think,he also makes me laugh.*I will add to Charlies list a rule of my own:Find a very smart high-gradepartner preferably slightly older than you

69、and then listen very carefully to what he says.A Family Gathering in OmahaCharlie and I are shameless.Last year,at our first shareholder get-together in three years,we greeted you with our usual commercial hustle.From the opening bell,we went straight for your wallet.In short order,our Sees kiosksol

70、d you eleven tons of nourishing peanut brittle and chocolates.In our P.T.Barnum pitch,wepromised you longevity.After all,what else but candy from Sees could account for Charlie andme making it to 99 and 92?I know you cant wait to hear the specifics of last years hustle.On Friday,the doors were open

71、from noon until 5 p.m.,and our candy counters rang up2,690 individual sales.On Saturday,Sees registered an additional 3,931 transactions between7 a.m.and 4:30 p.m.,despite the fact that 612of the 912operating hours occurred while our movieand the question-and-answer session were limiting commercial

72、traffic.10Do the math:Sees rang up about 10 sales per minute during its prime operating time(racking up$400,309 of volume during the two days),with all the goods purchased at a singlelocation selling products that havent been materially altered in 101 years.What worked for Seesin the days of Henry F

73、ords model T works now.*Charlie,I,and the entire Berkshire bunch look forward to seeing you in Omaha onMay 5-6.We will have a good time and so will you.February 25,2023Warren E.BuffettChairman of the Board11UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 10-K ANNUAL REPORT PU

74、RSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31,2022ORTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF1934For the transition period fromtoCommission file number 001-14905BERKSHIRE HATHAWAY INC.(Exact name of R

75、egistrant as specified in its charter)Delaware47-0813844State or other jurisdiction ofincorporation or organization(I.R.S.EmployerIdentification No.)3555 Farnam Street,Omaha,Nebraska68131(Address of principal executive office)(Zip Code)Registrants telephone number,including area code(402)346-1400Sec

76、urities registered pursuant to Section 12(b)of the Act:Title of each classTrading SymbolsName of each exchange on which registeredClass A Common StockClass B Common Stock0.750%Senior Notes due 20231.300%Senior Notes due 20240.000%Senior Notes due 20251.125%Senior Notes due 20272.150%Senior Notes due

77、 20281.500%Senior Notes due 20302.000%Senior Notes due 20341.625%Senior Notes due 20352.375%Senior Notes due 20390.500%Senior Notes due 20412.625%Senior Notes due 2059BRK.ABRK.BBRK23BRK24BRK25BRK27BRK28BRK30BRK34BRK35BRK39BRK41BRK59New York Stock ExchangeNew York Stock ExchangeNew York Stock Exchang

78、eNew York Stock ExchangeNew York Stock ExchangeNew York Stock ExchangeNew York Stock ExchangeNew York Stock ExchangeNew York Stock ExchangeNew York Stock ExchangeNew York Stock ExchangeNew York Stock ExchangeNew York Stock ExchangeSecurities registered pursuant to Section 12(g)of the Act:NONEIndicat

79、e by check mark if the Registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d)of the Act.Yes No Indicate by check mark whether the Registrant(1)has

80、filed all reports required to be filed by Section 13 or 15(d)of the Securities ExchangeAct of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has beensubject to such filing requirements for the past 90 days.Yes No Indicate b

81、y check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant toRule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant wasrequired to submit such files).Yes No I

82、ndicate by check mark whether the Registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reportingcompany,or an emerging growth company.See the definitions of“large accelerated filer,”“accelerated filer,”“smaller reporting company,”and“emerging growth company”

83、in Rule 12b-2 of the Exchange Act.Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company If an emerging growth company,indicate by check mark if the Registrant has elected not to use the extended transition period for complyingwith any new o

84、r revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness of itsinternal control over financial reporting under Section 404(b)of

85、 the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered publicaccounting firm that prepared or issued its audit report.If securities are registered pursuant to Section 12(b)of the Act,indicate by check mark whether the financial statements of the registrantincluded in the filing reflect the correc

86、tion of an error to previously issued financial statements.Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-basedcompensation received by any of the registrants executive officers during the relevant recovery period pursuan

87、t to 240.10D-1(b).Indicate by check mark whether the Registrant is a shell company(as defined in Rule 12b-2 of the Act).Yes No State the aggregate market value of the voting stock held by non-affiliates of the Registrant as of June 30,2022:$500,000,000,000Indicate the number of shares outstanding of

88、 each of the Registrants classes of common stock:February 13,2023Class A common stock,$5 par value590,835 sharesFebruary 13,2023Class B common stock,$0.0033 par value1,301,100,243 sharesDOCUMENTS INCORPORATED BY REFERENCEPortions of the Proxy Statement for the Registrants Annual Meeting to be held M

89、ay 6,2023 are incorporated in Part III.Table of ContentsPage No.Part IItem 1.Business DescriptionItem 1A.Risk FactorsK-25Item 1B.Unresolved Staff CommentsK-28Item 2.Description of PropertiesK-28Item 3.Legal ProceedingsK-30Item 4.Mine Safety DisclosuresK-30Part IIItem 5.Market for Registrants Common

90、Equity,Related Security Holder Matters and IssuerPurchases of Equity SecuritiesK-31Item 6.ReservedK-32Item 7.Managements Discussion and Analysis of Financial Condition and Results of OperationsK-33Item 7A.Quantitative and Qualitative Disclosures About Market RiskK-66Item 8.Financial Statements and S

91、upplementary DataK-67K-70K-72K-73K-73K-74K-75Item 9.Changes in and Disagreements with Accountants on Accounting and Financial DisclosureK-114K-114K-114Part IIIItem 10.K-114Item 11.Executive Compe siK-114Item 12.Security Ownership of Certain Beneficial Owners and Management and RelatedStockholder Mat

92、tersK-114Item 13.CK-114Item 14.K-114Part IVItem 15.K-114K-118K-120.K-1.Consolidated Balance Sheets December 31,2022 and December 31,2021Consolidated Statements of EarningsYears Ended December 31,2022,December 31,2021,and December 31,2020Consolidated Statements of Comprehensive IncomeYears Ended Dece

93、mber 31,2022,December 31,2021,and December 31,2020Consolidated Statements of Changes in Shareholders EquityYears Ended December 31,2022,December 31,2021,and December 31,2020Consolidated Statements of Cash FlowsYears Ended December 31,2022,December 31,2021,and December 31,2020Notes to Consolidated Fi

94、nancial StatementsDirectors,Executive Officers and Corporate Governancen at onertain Relationships and Related Transactions and Director Independence.Item 9A.Controls and ProceduresItem 9B.Other Information.Principal Accountant Fees and ServicesExhibits and Financial Statement SchedulesExhibit Index

95、SignaturesK-1Part IItem 1.Business DescriptionBerkshire Hathaway Inc.(“Berkshire,”“Company”or“Registrant”)is a holding company owning subsidiaries engagedin numerous diverse business activities.The most important of these are insurance businesses conducted on both a primarybasis and a reinsurance ba

96、sis,a freight rail transportation business and a group of utility and energy generation and distributionbusinesses.Berkshire also owns and operates numerous other businesses engaged in a variety of manufacturing,services,retailing and other activities.Berkshire is domiciled in the state of Delaware,

97、and its corporate headquarters is in Omaha,Nebraska.Berkshires operating businesses are managed on an unusually decentralized basis.There are few centralized orintegrated business functions.Berkshires corporate senior management team participates in and is ultimately responsible forsignificant capit

98、al allocation decisions,investment activities and the selection of the Chief Executive to head each of theoperating businesses.Berkshires senior management is also responsible for establishing and monitoring Berkshires corporate governancepractices,including monitoring governance efforts,including t

99、hose at the operating businesses,and participating in theresolution of governance-related issues as needed.Berkshires Board of Directors is responsible for assuring an appropriatesuccessor to the Chief Executive Officer.The Berkshire Code of Business Conduct and Ethics emphasizes,among other things,

100、the commitment to ethics and compliance with government laws and regulations and provides basic standards for ethical andlegal behavior of its employees.Human capital and resources are an integral and essential component of Berkshires businesses.Berkshire and itsconsolidated subsidiaries employed ap

101、proximately 383,000 people worldwide at the end of 2022,of which approximately 78%were in the United States(“U.S.”)and 20%were represented by unions.Employees engage in a wide variety of occupations.Consistent with Berkshires decentralized management philosophy,Berkshires operating businesses indivi

102、dually establishspecific policies and practices concerning the attraction and retention of personnel within their organizations.Given the widevariations in the nature and size of business activities,specific policies and practices may vary widely among Berkshiresoperating subsidiaries.Policies and p

103、ractices commonly address,among other things:maintaining a safe work environmentand minimizing or eliminating workplace injuries;offering competitive compensation,which includes various health insuranceand retirement benefits,as well as incentives to recognize and reward performance;wellness program

104、s;training,learning andcareer advancement opportunities;and hiring practices intended to identify qualified candidates and promote diversity andinclusion in the workforce.Berkshires consolidated U.S.workforce demographics,based on U.S.Equal EmploymentOpportunity Commission guidelines,are available o

105、n its website(https:/),under sustainability.Insurance and Reinsurance BusinessesBerkshires insurance and reinsurance business activities are conducted through numerous domestic and foreign-basedinsurance subsidiaries.Berkshires insurance subsidiaries provide insurance and reinsurance of property and

106、 casualty risks andreinsurance of life and health risks worldwide.Berkshires insurance subsidiaries employed approximately 50,000 people atthe end of 2022.For purposes of this discussion,entities that provide insurance or reinsurance are referred to as insurers.Indirectorprimaryinsuranceactivities,t

107、heinsurerassumestheriskoflossfrompersonsororganizationsthataredirectlysubject to the risks.Such risks may relate to property,casualty(or liability),life,accident,health,financial or other perils thatmay arise from an insurable event.In reinsurance activities,the insurer assumes defined portions of r

108、isks that other directinsurers or reinsurers assumed in their own insuring activities.Reinsurance contracts are normally classified as treaty or facultative contracts.Treaty reinsurance refers to reinsurancecoverage for all or a portion of a specified group or class of risks ceded by a direct insure

109、r or reinsurer,while facultativereinsurance involves coverage of specific individual underlying risks.Reinsurance contracts are further classified as quota-share or excess.Under quota-share(proportional or pro-rata)reinsurance,the reinsurer shares proportionally in the originalpremiums and losses of

110、 the direct insurer or reinsurer.Excess(or non-proportional)reinsurance provides for theindemnification of the direct insurer or reinsurer for all or a portion of the loss in excess of an agreed upon amount or“retention.”Both quota-share and excess reinsurance contracts may provide for aggregate lim

111、its of indemnification.Insurance and reinsurance are generally subject to regulatory oversight throughout the world.Except for regulatoryconsiderations,there are virtually no barriers to entry into the insurance and reinsurance industry.Competitors may be domesticor foreign,as well as licensed or un

112、licensed.The number of competitors within the industry is not known.Insurers compete onthe basis of reliability,financial strength and stability,financial ratings,underwriting consistency,service,business ethics,price,performance,capacity,policy terms and coverage conditions.K-2Insurers based in the

113、 U.S.are subject to regulation by their states of domicile and by those states in which they arelicensed to write policies on an admitted basis.The primary focus of regulation is to assure that insurers are financially solventand that policyholder interests are otherwise protected.States establish m

114、inimum capital levels for insurance companies andestablish guidelines for permissible business and investment activities.States have the authority to suspend or revoke acompanys authority to do business as conditions warrant.States regulate the payment of dividends by insurance companies totheir sha

115、reholders and other transactions with affiliates.Dividends,capital distributions and other transactions of extraordinaryamounts are subject to prior regulatory approval.Insurers may market,sell and service insurance policies in the states where they are licensed.These insurers are referredto as admi

116、tted insurers.Admitted insurers are generally required to obtain regulatory approval of their policy forms andpremium rates.Non-admitted insurance markets have developed to provide insurance that is otherwise unavailable throughadmitted insurers.Non-admitted insurance,often referred to as“excess and

117、 surplus”lines,is procured by either state-licensedsurplus lines brokers who place risks with insurers not licensed in that state or by the insured partys direct procurement fromnon-admitted insurers.Non-admitted insurance is subject to considerably less regulation with respect to policy rates and f

118、orms.Reinsurers are normally not required to obtain regulatory approval of premium rates or reinsurance contracts.The insurance regulators of every state participate in the National Association of Insurance Commissioners(“NAIC”).TheNAICadoptsforms,instructionsandaccountingproceduresforusebyU.S.insur

119、ersinpreparingandfilingannualstatutoryfinancial statements.However,an insurers state of domicile has ultimate authority over these matters.In addition to itsactivities relating to the annual statement,the NAIC develops or adopts statutory accounting principles,model laws,regulationsand programs for

120、use by its members.Such matters deal with regulatory oversight of solvency,risk management,compliancewith financial regulation standards and risk-based capital reporting requirements.U.S.states,through the NAIC,and international insurance regulators through the International Association of Insurance

121、Supervisors(“IAIS”)have been developing standards and best practices focused on establishing a common set of principles(“Insurance Core Principles”)and framework(“ComFrame”)for the regulation of large multi-national insurance groups.TheIAIS is developing capital standards for internationally active

122、insurance groups(the“Insurance Capital Standard”)based on aconsolidated group approach and is also evaluating a potentially comparable group capital standard based on the aggregationof regulated entities and their underlying local capital requirements(the“Aggregation Method”).The IAIS standards addr

123、essa variety of topics regarding supervision,coordination of regulators,insurance capital standards,risk management andgovernance.While the IAIS standards do not have legal effect,U.S.state insurance departments and the NAIC areimplementing various group supervision regulatory tools and mandates tha

124、t are responsive to certain IAIS standards.U.S.stateregulators have formed supervisory colleges intended to promote communication and cooperation amongst the variousdomestic and international insurance regulators.The Nebraska Department of Insurance acts as the lead supervisor for ourgroup of insura

125、nce companies and chairs the Berkshire supervisory college.U.S.state regulators require insurance groups tofile an annual report and an Own Risk Solvency Assessment or ORSA,with the groups lead supervisor.The NAIC recentlyadopted a group capital calculation based on methodology similar to the Aggreg

126、ation Method,which leverages the NAICsexisting Risk Based Capital standards.The NAICs group capital calculation is a tool designed to help the lead supervisorunderstand the capital adequacy across an insurance group.The NAIC is also developing further tools,including variousliquidity assessments,tha

127、t will likely be imposed on insurance groups in the future.Berkshires insurance companies maintain capital strength at exceptionally high levels,which differentiates them fromtheir competitors.The combined statutory surplus of Berkshires U.S.-based insurers was approximately$272 billion atDecember 3

128、1,2022.Berkshires major insurance subsidiaries are rated AA+by Standard&Poors and A+(superior)by A.M.Best with respect to their financial condition and claims paying ability.The Terrorism Risk Insurance Act of 2002 established within the Department of the Treasury a Terrorism InsuranceProgram(“Progr

129、am”)for commercial property and casualty insurers by providing federal reinsurance of insured terrorismlosses.The Program currently extends to December 31,2027 through other Acts,most recently the Terrorism Risk InsuranceProgramReauthorizationActof2019.HereinaftertheseActsarecollectivelyreferredtoas

130、TRIA.UnderTRIA,theDepartmentof the Treasury is charged with certifying“acts of terrorism.”Coverage under TRIA occurs if the industry insured loss forcertified events occurring during the calendar year exceeds$200 million in any calendar year.Tobeeligibleforfederalreinsurance,insurersmustmakeavailabl

131、einsurancecoverageforactsofterrorism,byprovidingpolicyholders with clear and conspicuous notice of the amount of premium that will be charged for this coverage and of thefederalshare of any insured losses resulting from any act of terrorism.Assumed reinsurance is specifically excluded from TRIAparti

132、cipation.TRIA currently also excludes certain forms of direct insurance(such as personal and commercial auto,burglary,theft,surety and certain professional liability lines).Reinsurers are not required to offer terrorism coverage and are not eligiblefor federal reinsurance of terrorism losses.K-3In t

133、he event of a certified act of terrorism,the federal government will reimburse insurers(conditioned on theirsatisfaction of policyholder notification requirements)for 80%of their insured losses in excess of an insurance groupsdeductible.Under the Program,the deductible is 20%of the aggregate direct

134、subject earned premium for relevant commerciallines of business in the immediately preceding calendar year.The aggregate deductible in 2023 for Berkshires insurance groupis expected to approximate$2.25 billion.There is also an aggregate program limit of$100 billion on the amount of the federalgovern

135、ment coverage for each TRIA year.The extent of insurance regulation varies significantly among the countries in which our non-U.S.operations conductbusiness.While each country imposes licensing,solvency,auditing and financial reporting requirements,the type and extentof the requirements differ subst

136、antially.For example:in some countries,insurers are required to prepare and file monthly and/or quarterly financial reports,andin others,only annual reports;some regulators require intermediaries to be involved in the sale of insurance products,whereas otherregulators permit direct sales contact bet

137、ween the insurer and the customer;the extent of restrictions imposed upon an insurers use of local and offshore reinsurance vary;policy form filing and rate regulation vary by country;the frequency of contact and periodic on-site examinations by insurance authorities differ by country;the scope and

138、prescriptive requirements of an insurers risk management and governance framework varysignificantly by country;andregulatory requirements relating to insurer dividend policies vary by country.Significant variations can also be found in the size,structure and resources of the local regulatory departm

139、ents thatoversee insurance activities.Certain regulators prefer close relationships with all subject insurers and others operate a risk-based approach.Berkshires insurance group operates in some countries through subsidiaries and in some countries through branches ofsubsidiaries.Berkshire insurance

140、subsidiaries are located in several countries,including Germany,the United Kingdom(“U.K.”),Ireland,Australia and South Africa,and also maintain branches in several other countries.Most of these foreignjurisdictions impose local capital requirements.Other legal requirements include discretionary lice

141、nsing procedures,localretention of funds and records,and data privacy and protection program requirements.Berkshires international insurancecompanies are also subject to multinational application of certain U.S.laws.There are various regulatory bodies and initiatives that impact Berkshire in multipl

142、e international jurisdictions and thepotential for significant effect on the Berkshire insurance group could be heightened as a result of recent industry and economicdevelopments.In 2016,the U.K.voted in a national referendum to withdraw from the European Union(“EU”)(“Brexit”),which resulted in the

143、U.K.s withdrawal from the EU on January 31,2020.In anticipation of the U.K.leaving the EU,BerkshireHathaway European Insurance DAC in Ireland was established to permit property and casualty insurance and reinsurancebusinesses to continue to operate in the EU.Berkshire also continues to maintain a su

144、bstantial presence in London followingBrexit.Alleghany Corporation(“Alleghany”),based in New York,New York,was acquired by Berkshire on October 19,2022.Alleghanys operating subsidiaries include property and casualty reinsurance and insurance,as well as a portfolio of non-financial businesses.Informa

145、tion regarding Alleghanys primary insurance and reinsurance activities is provided in theBerkshire Hathaway Primary Group and Berkshire Hathaway Reinsurance Group sections and its non-insurance businesses areincluded in the manufacturing and services sections.Berkshires insurance underwriting operat

146、ions include the following groups:(1)GEICO,(2)Berkshire HathawayPrimary Group and(3)Berkshire Hathaway Reinsurance Group.Except for retroactive reinsurance and periodic paymentannuity products,which generate significant amounts of up-front premiums along with estimated claims expected to be paidover

147、 long time periods(creating“float,”see Investments section),Berkshire expects to achieve an underwriting profit overtime and that its managers will reject inadequately priced risks.Underwriting profit is defined as earned premiums lessassociated incurred losses,loss adjustment expenses and underwrit

148、ing and policy acquisition expenses.Underwriting profitdoes not include income earned from investments.Additional information related to each of Berkshires underwriting groupsfollows.K-4GEICOGEICO is headquartered in Chevy Chase,Maryland.GEICOs insurance subsidiaries consist of GovernmentEmployees I

149、nsurance Company,GEICO General Insurance Company,GEICO Indemnity Company,GEICO CasualtyCompany,GEICO Advantage Insurance Company,GEICO Choice Insurance Company,GEICO Secure Insurance Company,GEICO County Mutual Insurance Company,GEICO Texas County Mutual Insurance Company and GEICO Marine InsuranceC

150、ompany.The GEICO companies primarily offer private passenger automobile insurance to individuals in all 50 states and theDistrict of Columbia.GEICO also provides insurance for motorcycles,all-terrain vehicles,recreational vehicles,boats andsmall commercial fleets and acts as an agent for other insur

151、ers who offer homeowners,renters,life and identity managementinsurance to individuals desiring insurance coverages other than those offered by GEICO.GEICOs marketing is primarily through direct response methods in which applications for insurance are submitteddirectly to the companies via the Intern

152、et or by telephone,and to a lesser extent,through captive agents.GEICO conductsbusiness through regional service centers and claims adjustment and other facilities in 39 states.The automobile insurance business is highly competitive in the areas of price and service.GEICO competes for privatepasseng

153、er automobile insurance customers in the preferred,standard and non-standard risk markets with other companies thatsell directly to the customer and with companies that use agency sales forces,including State Farm,Allstate,Progressive andUSAA.GEICOs advertising campaigns and competitive rates contri

154、buted to a cumulative increase in voluntary policies-in-force of approximately 4.0%over the past five years.During 2022,GEICO experienced a reduction of 1.7 million voluntarypolicies-in-force after flat year-over-year growth from 2020 to 2021.According to the most recently published A.M.Best datafor

155、 2021,the five largest automobile insurers had a combined market share in 2021 of approximately 60.5%based on writtenpremiums,with GEICOs market share being the second largest at approximately 14.4%.GEICOs management estimates itscurrent market share is approximately 13.9%.The COVID-19 pandemic and

156、subsequent supply chain disruptions affectingautomobile manufacturers have impacted GEICOs business and underwriting results in 2020 and thereafter.Seasonalvariations in GEICOs insurance business are not significant.However,extraordinary weather conditions or other factors mayhave a significant effe

157、ct upon the frequency or severity of automobile claims.State insurance departments stringently regulate private passenger auto insurance.As a result,it is difficult for insurancecompanies to differentiate their products.Competition for private passenger automobile insurance tends to focus on price a

158、ndlevel of customer service provided.GEICOs cost-efficient direct response marketing methods and emphasis on customersatisfaction enable it to offer competitive rates and value to its customers.GEICO primarily uses its own claims staff to manageand settle claims.The name and reputation of GEICO are

159、material assets and management protects those and other servicemarks through appropriate registrations.Berkshire Hathaway Primary GroupThe Berkshire Hathaway Primary Group(“BH Primary”)is a collection ofindependently managed insurers that provide a wide variety of insurance coverages to policyholder

160、s located principally in theU.S.These various operations are discussed below.National Indemnity Company(“NICO”),domiciled in Nebraska,and certain affiliates(“NICO Primary”)underwritecommercial motor vehicle and general liability insurance on an admitted basis and on an excess and surplus basis.Insur

161、ancecoverages are offered nationwide primarily through insurance agents and brokers.The Berkshire Hathaway Homestate Companies(“BHHC”)is a group of insurers offering workers compensation,commercialautomobileandcommercialpropertycoveragestoadiverseclientbase.BHHChasanationalreach,withtheabilityto pro

162、vide first-dollar and small to large deductible workers compensation coverage to employers in all states,except thosewhere coverage is available only through state-operated workers compensation funds.NICO Primary and BHHC are eachbased in Omaha,Nebraska.Berkshire Hathaway Specialty Insurance(“BH Spe

163、cialty”)offers commercial property,casualty,healthcare professionalliability,executive and professional,surety,travel,medical stop loss and homeowners insurance through Berkshire HathawaySpecialty Insurance Company and other Berkshire insurance affiliates.BH Specialty writes primary and excess and s

164、urpluspolicies on an admitted and non-admitted basis in the U.S.,and on a local or foreign non-admitted basis outside the U.S.BHSpecialty is based in Boston,Massachusetts,with regional offices in several U.S.cities.BH Specialty also maintainsinternational offices and branches located in Australia,Ne

165、w Zealand,Canada and several countries in Asia,Europe and theMiddle East.BH Specialty writes business through wholesale and retail insurance brokers,as well as managing general agents.Alleghanys property and casualty insurance business is conducted in the U.S.on both an admitted and non-admittedbasi

166、s through RSUI Group,Inc.and its subsidiaries(“RSUI”)and CapSpecialty,Inc.and its subsidiaries(“CapSpecialty”).RSUI and CapSpecialty primarily write specialty insurance in the property,umbrella/excess liability,professional liability,directors and officers liability,and general liability lines of bu

167、siness.Insurance is written through independent wholesaleinsurance brokers,retail agents and managing general agents.K-5MedPro Group(“MedPro”)is a leading provider of healthcare liability(“HCL”)insurance based on premiums written.MedPro provides customized HCL insurance,claims,patient safety and ris

168、k solutions to physicians,surgeons,dentists andother healthcare professionals,as well as hospitals,senior care and other healthcare facilities.Additionally,MedPro providesHCL insurance solutions to international markets through other Berkshire insurance affiliates,delivers liability insurance toothe

169、r professionals,and offers specialized accident and health insurance solutions to colleges and other customers through itssubsidiaries and other Berkshire insurance affiliates.MedPro is based in Fort Wayne,Indiana.U.S.Liability Insurance Company(“USLI”)includes a group of five specialty insurers tha

170、t underwrite commercial,professional and personal lines of insurance on an admitted basis,as well as on an excess and surplus basis.USLI marketspolicies in all 50 states,the District of Columbia and Canada through wholesale and retail insurance agents.USLI companiesalso underwrite and market a wide

171、variety of specialty insurance products.USLI is based in Wayne,Pennsylvania.BerkshireHathaway GUARD Insurance Companies(“GUARD”)is a group of five insurance companies that provide a full suite ofcommercial insurance products,as well as homeowners policies to over 350,000 small to mid-sized businesse

172、s andhomeowners.These offerings are made through independent agents and retail and wholesale brokers.GUARD is based inWilkes-Barre,Pennsylvania.Berkshire Hathaway Direct Insurance Company and its affiliates(“BH Direct”)offer commercial insurance products(including workers compensation,property,auto,

173、general and professional liability)to small business customers.BH Directsproducts are primarily sold through two internet-based distribution platforms,biBERK.com and T.BHDirect writes policies on an admitted basis and is based in Stamford,Connecticut.MLMIC Insurance Company(“MLMIC”)is a leading writ

174、er of medical professional liability insurance in New York State.MLMIC distributes the majority of its policieson a direct basis to medical and dental professionals,health care providers and hospitals.Berkshire Hathaway Reinsurance GroupBerkshires combined global reinsurance business,referred to as

175、theBerkshire Hathaway Reinsurance Group(“BHRG”),offers a wide range of coverages on property,casualty,life and healthrisks to insurers and reinsurers worldwide.BHRG conducts business activities in 27 countries.Reinsurance business is writtenthrough NICO and several other Berkshire insurance subsidia

176、ries(“NICO Group”),General Re Corporation,and itssubsidiaries(“General Re Group”)and Alleghanys Transatlantic Reinsurance Company and affiliates(“TransRe Group”).TheNICO Group and Gen Re Group underwriting operations in the U.S.are based in Stamford,Connecticut and the TransRe Groupis based in New Y

177、ork,New York.The type and volume of business written is dependent on market conditions,including prevailing premium rates andcoverage terms.The level of underwriting activities often fluctuates significantly from year to year depending on the perceivedlevelofpriceadequacyinspecificinsuranceandreinsu

178、rancemarketsaswellasfromthetimingofparticularlylargereinsurancetransactions.Property/casualtyThe NICO Group offers traditional property/casualty reinsurance on both an excess-of-loss and a quota-share basis,catastrophe excess-of-loss treaty and facultative reinsurance,and primary insurance on an exc

179、ess-of-loss basis for large orunusual risks.The type and volume of business written by the NICO Group may vary significantly from period to periodresulting from changes in perceived premium rate adequacy and from unique or large transactions.A significant portion ofNICO Groups annual reinsurance pre

180、mium volume currently derives from a 20%quota-share agreement with InsuranceAustralia Group Limited(“IAG”)that incepted in 2015.The agreement was renewed,and extended,effective January 1,2023,with an expiration of December 31,2029.IAG is a multi-line insurer in Australia,New Zealand and other Asia-P

181、acificcountries.The General Re Group conducts a global property and casualty reinsurance business.Reinsurance contracts are writtenon both a quota-share and excess basis for multiple lines of business.Contracts are primarily in the form of treaties,and to alesser degree,on a facultative basis.Genera

182、l Re Group conducts business in North America,primarily marketed on a directbasis through General Reinsurance Corporation(“GRC”),which is licensed in the District of Columbia and all states,exceptHawaii,where it is an accredited reinsurer.GRC also conducts operations in North America through 11 bran

183、ch offices in theU.S.and Canada.In North America,the General Re Group includes General Star National Insurance Company,General Star IndemnityCompany and Genesis Insurance Company,which offer a broad array of specialty and surplus lines and property,casualty andprofessional liability coverages.Such b

184、usiness is marketed through a select group of wholesale brokers,managing generalunderwriters and program administrators,and offers solutions for the unique needs of public entity,commercial and captivecustomers.General Re Groups international reinsurance business is conducted on a direct basis throu

185、gh General Reinsurance AG,based in Cologne,Germany,and through subsidiaries and branches in numerous other countries.International business is alsowritten through brokers,including Faraday Underwriting Limited(“Faraday”),a subsidiary.Faraday owns the managing agentof Syndicate 435 at Lloyds of Londo

186、n and provides capacity and participates in 100%of the results of Syndicate 435.K-6The TransRe Group provides pro-rata and excess-of-loss reinsurance across various property and casualty lines ofbusiness.Contracts are written on both a treaty and facultative basis to insurance and other reinsurance

187、companies in the U.S.and in foreign markets through subsidiaries and branches in numerous countries.Business is written primarily through brokers,and to a lesser extent on a direct basis.Life/healthThe General Re Group conducts a global life and health reinsurance business.In the U.S.and internation

188、ally,the GeneralRe Group writes life,disability,supplemental health,critical illness and long-term care coverages.The life/health business ismarketed on a direct basis.Life/health net premiums written by the General Re Group in 2022 were primarily in the AsiaPacific,U.S.and Western Europe.Berkshire

189、Hathaway Life Insurance Company of Nebraska(“BHLN”)and its affiliates write reinsurance coveringvarious forms of traditional life insurance exposures.BHLN and affiliates are parties to contracts that reinsure certainguaranteed minimum death,income and similar benefit risks on closed-blocks of variab

190、le annuity risks under reinsurancecontracts,with the most recent contract incepting in 2014.Retroactive reinsuranceNICO also occasionally writes retroactive reinsurance contracts.Retroactive reinsurance contracts indemnify cedingcompanies against the adverse development of claims arising from loss e

191、vents that have already occurred under property andcasualty policies issued in prior years.Premiums from such contracts may be exceptionally large in amount.Coverages undersuch contracts are provided on an excess basis(above a stated retention)or for losses payable after the inception of the contrac

192、twith no additional ceding company retention.Contracts are normally subject to aggregate limits of indemnification,which canbe exceptionally large in amount.Significant amounts of asbestos,environmental and latent injury claims may arise under thesecontracts.The concept of time-value-of-money is an

193、important element in establishing retroactive reinsurance contract prices andterms since loss payments may occur over decades.Normally,expected ultimate losses payable under these policies areexpected to exceed premiums,thus producing underwriting losses.Nevertheless,this business is written,in part

194、,because ofthe large amounts of policyholder funds generated for investment,the economic benefit of which will be reflected throughinvestment results in future periods.Periodic payment annuityBHLN writes periodic payment annuity insurance policies and reinsures annuity-like obligations.Under these p

195、olicies,BHLN receives upfront consideration and agrees in the future to make periodic payments that often extend for decades.Thesepolicies generally relate to the settlement of underlying personal injury or workers compensation claims of other insurers,known as structured settlements.Consistent with

196、 retroactive reinsurance contracts,time-value-of-money is an important factorin establishing annuity premiums,and underwriting losses are expected from the periodic accretion of time-value discountedliabilities.Investments of insurance businessesBerkshires insurance subsidiaries hold significant lev

197、els of invested assets.Investment portfolios are managed by Berkshires Chief Executive Officer and Berkshires other investment managers.Investments include a very large portfolio of publicly traded equity securities,which is unusually concentrated in relativelyfewissuers,aswellasfixedmaturitysecurit

198、iesandcashandshort-terminvestments.Generally,therearenotargetedallocationsby investment type or attempts to match investment asset and insurance liability durations.However,investment portfolioshave historically included a much greater proportion of equity securities than is customary in the insuran

199、ce industry.Invested assets derive from shareholder capital as well as funds provided from policyholders through insurance andreinsurancebusiness(“float”).Floatisanapproximationofthenetpolicyholderfundsgeneratedthroughunderwritingactivitiesthat is held for investment.The major components of float ar

200、e unpaid losses and loss adjustment expenses,life,annuity andhealth benefit liabilities,unearned premiums and other policyholder liabilities less premium and reinsurance receivables,deferred policy acquisition costs and deferred charges on assumed retroactive reinsurance contracts.On a consolidated

201、basis,float has grown from approximately$114 billion at the end of 2017 to approximately$164 billion at the end of 2022.The costof float can be measured as the net pre-tax underwriting loss as a percentage of average float.The cost of float was nominal in2022,reflecting a small underwriting loss.In

202、2021 and 2020,the cost of float was negative,reflecting underwriting earningsin each of those years.Railroad BusinessBurlington Northern Santa FeBurlington Northern Santa Fe,LLC(“BNSF”)is based in Fort Worth,Texas,and through BNSF Railway Company(“BNSF Railway”)operates one of the largest railroad s

203、ystems in North America.BNSF Railway had approximately 36,000employees at the end of 2022,of whom approximately 31,000 were members of a labor union.BNSF also operates a relativelysmaller third-party logistics services business.K-7In serving the Midwest,Pacific Northwest,Western,Southwestern and Sou

204、theastern regions and ports of the U.S.,BNSFtransports a range of products and commodities derived from manufacturing,agricultural and natural resource industries.Freight revenues are covered by contractual agreements of varying durations or common carrier published prices or companyquotations.BNSFs

205、 financial performance is influenced by,among other things,general and industry economic conditions atthe international,national and regional levels.BNSFs primary routes,including trackage rights,allow it to access major cities and ports in the western and southernU.S.as well as parts of Canada and

206、Mexico.In addition to major cities and ports,BNSF Railway efficiently serves manysmaller markets by working closely with approximately 200 shortline railroads.BNSF Railway has also entered into marketingagreements with other rail carriers,expanding the marketing reach for each railroad and their cus

207、tomers.For the year endingDecember 31,2022,38%of freight revenues were derived from consumer products,23%from industrial products,23%fromagricultural products and 16%from coal.Regulatory MattersBNSF is subject to federal,state and local laws and regulations generally applicable to its businesses.Rai

208、l operations aresubject to the regulatory jurisdiction of the Surface Transportation Board(“STB”),the Federal Railroad Administration of theUnited States Department of Transportation(“DOT”),the Occupational Safety and Health Administration(“OSHA”),theEnvironmental Protection Agency(“EPA”),as well as

209、 other federal and state regulatory agencies and Canadian regulatoryagencies for operations in Canada.The STB has jurisdiction over disputes and complaints involving certain rates,routes andservices,the sale or abandonment of rail lines,applications for line extensions and construction,and the merge

210、r with oracquisition of control of rail common carriers.The outcome of STB proceedings can affect the profitability of BNSF Railwaysbusiness.The DOT,OSHA,and EPA have jurisdiction under several federal statutes over a number of safety,health,andenvironmental aspects of rail operations,including the

211、transportation of hazardous materials.BNSF Railway is required totransport these materials to the extent of its common carrier obligation.State agencies regulate some health,safety,andenvironmental aspects of rail operations in areas not otherwise preempted by federal law.Environmental MattersBNSFs

212、rail operations,as well as those of its competitors,are also subject to extensive federal,state and localenvironmental regulations covering discharges to the ground or waters,air emissions,toxic substances and the generation,handling,storage,transportation and disposal of waste and hazardous materia

213、ls.Such regulations effectively increase the costsand liabilities associated with rail operations.Environmental risks are also inherent in rail operations,which frequently involvetransporting chemicals and other hazardous materials.Many of BNSFs land holdings are or have been used for industrial or

214、transportation-related purposes or leased tocommercial or industrial companies whose activities may have resulted in discharges onto the property.Under federal(inparticular,the Comprehensive Environmental Response,Compensation and Liability Act)and state statutes,BNSF may beheld jointly and severall

215、y liable for cleanup and enforcement costs associated with a particular site without regard to fault orthe legality of the original conduct.BNSF may also be subject to claims by third parties for investigation,cleanup,restorationor other environmental costs under environmental statutes or common law

216、 with respect to properties they own that have beenimpacted by BNSF operations.Consumption of diesel fuel by locomotives accounted for approximately 80%of BNSFs greenhouse gas(“GHG”)emissions in its baseline year of 2018.BNSF management has committed to a broad sustainability model,applying scienceb

217、ased approaches,that will provide a 30%reduction in BNSFs GHG-emissions by 2030 from its baseline year of 2018.BNSFintends to continue improvements in fuel efficiency and increased utilization of renewable diesel fuel.Long-term solutions,such as battery-electric and hydrogen locomotives,are also bei

218、ng evaluated and field-tested.CompetitionThe business environment in which BNSF operates is highly competitive.Depending on the specific market,deregulatedmotor carriers and other railroads,as well as river barges,ships and pipelines,may exert pressure on price and service levels.The presence of adv

219、anced,high service truck lines with expedited delivery,subsidized infrastructure and minimal emptymileage continues to affect the market for non-bulk,time-sensitive freight.The potential expansion of longer combinationvehicles could further encroach upon markets traditionally served by railroads.In

220、order to remain competitive,BNSF Railwayand other railroads seek to develop and implement operating efficiencies to improve productivity.As railroads streamline,rationalize and otherwise enhance their franchises,competition among rail carriers intensifies.BNSF Railways primary rail competitor in the

221、 Western region of the U.S.is the Union Pacific Railroad Company.Other ClassI railroads and numerous regional railroads and motor carriers also operate in parts of the same territories served by BNSFRailway.K-8Utilities and Energy BusinessesBerkshire Hathaway EnergyBerkshire currently holds a 92%own

222、ership interest in Berkshire Hathaway Energy Company(“BHE”),based in DesMoines,Iowa.BHE is a global energy company with subsidiaries and affiliates that generate,transmit,store,distribute andsupply energy.BHEs domestic regulated energy interests are comprised of four regulated U.S.utility companies(

223、collectively,“U.S.utilities”)serving approximately 5.2 million retail customers and five U.S.interstate natural gas pipeline companies withapproximately 21,200 miles of operated pipeline having a design capacity of approximately 21 billion cubic feet of natural gasper day.Other energy businesses inc

224、lude electric transmission and distribution operations in Great Britain and Canada,adiversified portfolio of mostly renewable independent power projects and investments,and a liquefied natural gas export,import and storage facility.BHE also owns a residential real estate brokerage firm in the U.S.an

225、d a large network of residentialreal estate brokerage franchises in the U.S.BHE employs approximately 24,000 people in connection with its variousoperations.General MattersBHEs U.S.utilities include PacifiCorp,MidAmerican Energy Company(“MEC”)and NV Energy,Inc.s(“NVEnergy”)two regulated utility subs

226、idiaries,Nevada Power Company(“Nevada Power”)and Sierra Pacific Power Company(“Sierra Pacific”).PacifiCorp is a regulated electric utility company headquartered in Oregon,serving electric customers inportions of Utah,Oregon,Wyoming,Washington,Idaho and California.The combined service territorys dive

227、rse regionaleconomy ranges from rural,agricultural and mining areas to urban,manufacturing and government service centers.No singlesegment of the economy dominates the combined service territory,which helps mitigate PacifiCorps exposure to economicfluctuations.In addition to retail sales,PacifiCorp

228、sells electricity on a wholesale basis.MEC is a regulated electric and natural gas utility company headquartered in Iowa,serving electric and natural gascustomers primarily in Iowa and also in portions of Illinois,South Dakota and Nebraska.MEC has a diverse retail customerbase consisting of urban an

229、d rural residential customers and a variety of commercial and industrial customers.In addition toretail sales and natural gas transportation,MEC sells electricity and natural gas on a wholesale basis.Nevada Power serves retail electric customers in southern Nevada and Sierra Pacific serves retail el

230、ectric and natural gascustomers in northern Nevada.The combined Nevada Power/Sierra Pacific service territory economy includes gaming,mining,recreation,warehousing,manufacturing and governmental services.In addition to retail sales and natural gas transportation,these utilities sell electricity and

231、natural gas on a wholesale basis.Asverticallyintegratedutilities,BHEsU.S.utilitiescollectivelyownapproximately29,500netmegawattsofgenerationcapacity in operation and under construction.The U.S.utilities business is subject to seasonal variations principally related tothe use of electricity for air c

232、onditioning and natural gas for heating.Typically,regulated electric revenues are higher in thesummer months,while regulated natural gas revenues are higher in the winter months.The natural gas pipelines consist of BHE GT&S,LLC(“BHE GT&S”),Northern Natural Gas Company(“NorthernNatural”)and Kern Rive

233、r Gas Transmission Company(“Kern River”).BHE GT&S was acquired on November 1,2020.BHE GT&S,based in Virginia,operates three interstate natural gas pipeline systems that consist of approximately 5,400miles of natural gas transmission,gathering and storage pipelines and operates seventeen underground

234、natural gas storage fieldsin the eastern region of the U.S.BHE GT&Ss large underground natural gas storage assets and pipeline systems are part of aninterconnected gas transmission network that provides transportation services to utilities and numerous other customers.BHEGT&S is also an industry lea

235、der in liquefied natural gas solutions through its investments in and ownership of several liquefiednatural gas facilities located throughout the eastern region of the U.S.Northern Natural,based in Nebraska,operates the largest interstate natural gas pipeline system in the U.S.,as measuredby pipelin

236、e miles,reaching from west Texas to Michigans Upper Peninsula.Northern Naturals pipeline system consists ofapproximately 14,400 miles of natural gas pipelines.Northern Naturals extensive pipeline system,which is interconnectedwith many interstate and intrastate pipelines in the national grid system,

237、has access to supplies from multiple major supplybasins and provides transportation services to utilities and numerous other customers.Northern Natural also operates threeunderground natural gas storage facilities and two liquefied natural gas storage peaking units.Northern Naturals pipelinesystem e

238、xperiences significant seasonal swings in demand and revenue,with the highest demand typically occurring during themonths of November through March.Kern River,based in Utah,operates an interstate natural gas pipeline system that consists of approximately 1,400 milesand extends from supply areas in t

239、he Rocky Mountains to consuming markets in Utah,Nevada and California.Kern Rivertransports natural gas for electric and natural gas distribution utilities,major oil and natural gas companies or affiliates of suchcompanies,electric generating companies,energy marketing and trading companies,and finan

240、cial institutions.K-9Other energy businesses include Northern Powergrid(Northeast)plc and Northern Powergrid(Yorkshire)plc,whichown a substantial electricity distribution network that delivers electricity to end-users in northeast England in an area coveringapproximately 10,000 square miles.These di

241、stribution companies primarily charge supply companies regulated tariffs for theuse of their distribution systems and serve about 4.0 million electricity end-users.AltaLink L.P.(“AltaLink”)is a regulatedelectric transmission-only utility company headquartered in Calgary,Alberta.AltaLinks high voltag

242、e transmission lines andrelated facilities transmit electricity from generating facilities to major load centers,cities and large industrial plants throughoutits 87,000 square mile service territory.AltaLink serves approximately 85%of Albertas population.BHE and its subsidiaries,also own interests i

243、n independent power projects having approximately 6,000 net megawatts of generation capacity that are inservice in California,Texas,Illinois,Nebraska,Montana,Australia,New York,Arizona,Canada,Minnesota,Kansas,Iowaand Hawaii.These independent power projects sell power generated primarily from wind,so

244、lar,geothermal and hydro sourcesunder long-term contracts.Additionally,$7.3 billion has been invested in wind projects sponsored by third parties,commonlyreferred to as tax equity investments.Regulatory MattersTheU.S.utilitiesaresubjecttocomprehensiveregulationbyvariousfederal,stateandlocalagencies.

245、TheFederalEnergyRegulatory Commission(“FERC”)is an independent agency with broad authority to implement provisions of the FederalPowerAct,theEnergyPolicyActof2005andotherfederalstatutes.TheFERCregulatesratesforwholesalesalesofelectricity;transmission of electricity,including pricing and regional pla

246、nning for the expansion of transmission systems;electric systemreliability;utility holding companies;accounting and records retention;securities issuances;construction and operation ofhydroelectric facilities;and other matters.The FERC also has the enforcement authority to assess civil penalties of

247、up to$1.5million per day per violation of rules,regulations and orders issued under the Federal Power Act.MEC is also subject toregulation by the Nuclear Regulatory Commission pursuant to the Atomic Energy Act of 1954,as amended,with respect to its25%ownership of the Quad Cities Nuclear Station.With

248、 certain limited exceptions,the U.S.utilities have an exclusive right to serve retail customers within their serviceterritories and,in turn,have an obligation to provide service to those customers.In some jurisdictions,certain classes ofcustomers may choose to purchase all or a portion of their ener

249、gy from alternative energy suppliers,and in some jurisdictionsretail customers can generate all or a portion of their own energy.Historically,state regulatory commissions have establishedretail electric and natural gas rates on a cost-of-service basis,which are designed to allow a utility the opport

250、unity to recoverwhat each state regulatory commission deems to be the utilitys reasonable costs of providing services,including a fairopportunity to earn a reasonable return on its investments based on its cost of debt and equity.The retail electric rates of U.S.utilities are generally based on the

251、cost of providing traditional bundled services,including generation,transmission anddistribution services;however,rates are available for transmission-only and distribution-only services.Northern Powergrid(Northeast)plc and Northern Powergrid(Yorkshire)plc each charge fees for the use of theirdistri

252、butionsystemsthatarecontrolledbyaformulaprescribedbytheBritishelectricityregulatorybody,theGasandElectricityMarkets Authority.The current eight-year price control period runs from April 1,2015 through March 31,2023 and the nextprice control period is set for the five-year period ending March 31,2028

253、.AltaLink is regulated by the Alberta Utilities Commission(“AUC”),pursuant to the Electric Utilities Act(Alberta),thePublic Utilities Act(Alberta),the Alberta Utilities Commission Act(Alberta)and the Hydro and Electric Energy Act(Alberta).The AUC is an independent quasi-judicial agency,which regulat

254、es and oversees Albertas electricity transmission sector withbroad authority that may impact many of AltaLinks activities,including its tariffs,rates,construction,operations andfinancing.Under the Electric Utilities Act,AltaLink prepares and files applications with the AUC for approval of tariffs to

255、 bepaid by the Alberta Electric System Operator(“AESO”)for the use of its transmission facilities,and the terms and conditionsgoverning the use of those facilities.The AESO is an independent system operator in Alberta,Canada that oversees Albertasintegrated electrical system(“AIES”)and wholesale ele

256、ctricity market.The AESO is responsible for directing the safe,reliableand economic operation of the AIES,including long-term transmission system planning.The natural gas pipelines are subject to regulation by various federal and state agencies.The natural gas pipeline andstorage operations of BHE G

257、T&S,Northern Natural and Kern River are regulated by the FERC pursuant to the Natural GasAct and the Natural Gas Policy Act of 1978.Under this authority,the FERC regulates,among other items,(a)rates,charges,termsandconditionsofservice;(b)theconstructionandoperationofinterstatepipelines,storageandrel

258、atedfacilities,includingthe extension,expansion or abandonment of such facilities;and(c)the construction and operation of liquefied natural gasexport/import facilities.Interstate natural gas pipeline companies are also subject to regulations administered by the Office ofPipeline Safety within the Pi

259、peline and Hazardous Materials Safety Administration,an agency of the DOT.Federal pipelinesafety regulations are issued pursuant to the Natural Gas Pipeline Safety Act of 1968,as amended,which establishes safetyrequirements in the design,construction,operation and maintenance of interstate natural g

260、as pipeline facilities.K-10Environmental MattersBHE and its energy businesses are subject to federal,state,local and foreign laws and regulations regarding air quality,climate change,emissions performance standards,water quality,coal ash disposal and other environmental matters that havethe potentia

261、l to impact current and future operations.In addition to imposing continuing compliance obligations,these lawsand regulations,such as the Federal Clean Air Act,provide regulators with the authority to levy substantial penalties fornoncompliance,including fines,injunctive relief and other sanctions.T

262、he Federal Clean Air Act,as well as state laws and regulations impacting air emissions,provides a framework forprotecting and improving the nations air quality and controlling sources of air emissions.These laws and regulations continueto be promulgated and implemented and will impact the operation

263、of BHEs generating facilities and require them to reduceemissions at those facilities to comply with the requirements.In addition,the potential adoption of state or federal clean energystandards,which include low-carbon,non-carbon and renewable electricity generating resources,may also impact electr

264、icitygenerators and natural gas providers.In December 2015,an international agreement was negotiated by 195 nations to create a universal framework forcoordinated action on climate change in what is referred to as the Paris Agreement.The Paris Agreement reaffirms the goal oflimiting global temperatu

265、re increase well below 2 degrees Celsius,while urging efforts to limit the increase to 1.5 degreesCelsius and reaching a global peak of GHG emissions as soon as possible to achieve climate neutrality by mid-century;establishes commitments by all parties to make nationally determined contributions an

266、d pursue domestic measures aimed atachieving the commitments;commits all countries to submit emissions inventories and report regularly on their emissions andprogress made in implementing and achieving their nationally determined commitments;and commits all countries to submitnew commitments every f

267、ive years,with the expectation that the commitments will be more aggressive in reducing GHGemissions.In the context of the Paris Agreement,the U.S.agreed to reduce GHG emissions by 26%to 28%from 2005 levelsby 2025.The Paris Agreement formally became effective on November 4,2016;however,the U.S.compl

268、eted its withdrawalfrom the Paris Agreement on November 4,2020.President Biden accepted the terms of the climate agreement on January 20,2021,and the U.S.completed its reentry on February 19,2021.New commitments to the Paris Agreement were announced inApril 2021,with the U.S.pledging to cut its over

269、all GHG emissions by 50%to 52%from 2005 levels by 2030 and to reach100%carbon pollution-free electricity by 2035.Increasingly,states are adopting legislation and regulations to reduce GHGemissions,and local governments and consumers are seeking increasing amounts of clean and renewable energy.OnJune

270、19,2019,theEPArepealedtheCleanPowerPlanandissuedtheAffordableCleanEnergyrule.IntheAffordableClean Energy rule,the EPA determined that the best system of emissions reduction for existing coal fueled power plants is heatrate improvements and identified a set of candidate technologies and measures that

271、 could improve heat rates.Measures takento meet the standards of performance must be achieved at the source itself.On January 19,2021,the D.C.Circuit Court ofAppeals vacated the Affordable Clean Energy rule in its entirety.In October 2021,the U.S.Supreme Court agreed to hear anappeal of that decisio

272、n.Arguments in the case were held in February 2022 and on June 30,2022,the U.S.Supreme Courtissued its decision regarding the scope of the EPAs authority to regulate GHG emissions under the Clean Air Act.The U.S.Supreme Court held that the“generation shifting”approach in the Clean Power Plan exceede

273、d the powers granted to the EPAby Congress,although the court did not address whether the EPA may only adopt measures applied at the individual source asit did in the Affordable Clean Energy rule.The Biden administration plans to propose a replacement to the Clean Power Planand Affordable Clean Ener

274、gy rule by April 2023.In November 2021,the EPA proposed rules that would reduce methane emissions from both new and existing sourcesin the oil and natural gas industry.The proposals would expand and strengthen emission reduction requirements for new,modified and reconstructed oil and natural gas sou

275、rces and would require states to reduce methane emissions from existingsources nationwide.The EPA issued a supplemental proposal in November 2022 to further strengthen emission requirementsand intends to finalize the rules by fall 2023.BHE and its energy subsidiaries continue to focus on delivering

276、reliable,affordable,safe and clean energy to itscustomers and on actions to mitigate its GHG emissions.BHEs primary source of GHG emissions is the generation ofelectricity from its power plants that are fueled by coal or natural gas.In managing its electricity generation,BHE works withits regulators

277、 to protect the energy and economic needs of customers by considering costs,reliability and sources of electricgeneration.Over the years,BHE has invested heavily in owned wind,solar and geothermal generation,with cumulativeinvestments of$31.6 billion through 2022 and has retired 16 coal generation u

278、nits.As a result,as of December 31,2022,BHEreduced its annual GHG emissions by more than 27%as compared to 2005 levels.BHE plans to continue investing in wind,solar and other low-carbon generation in the future and to retire an additional 16 coal generation units between 2023 and 2030in a reliable a

279、nd cost-effective manner,thereby achieving a 50%reduction in GHG emissions from 2005 levels in 2030.K-11Non-Energy BusinessesHomeServices of America,Inc.(“HomeServices”)is a residential real estate brokerage firm in the U.S.In addition toproviding traditional residential real estate brokerage servic

280、es,HomeServices offers other integrated real estate services,including mortgage originations and mortgage banking,title and closing services,insurance,home warranties,relocationservices and other home-related services.It operates under 55 brand names with approximately 45,000 real estate agents inne

281、arly 930 brokerage offices in 33 states and the District of Columbia.HomeServices franchise network currently includes approximately 300 franchisees and over 1,500 brokerage officeswith nearly 51,000 real estate agents under two brand names,primarily in the U.S.In exchange for certain fees,HomeServi

282、cesprovides the right to use the Berkshire Hathaway HomeServices or Real Living brand names and other related service marks,as well as providing orientation programs,training and consultation services,advertising programs and other services.HomeServices principal sources of revenue are dependent on

283、residential real estate sales,which are generally higher inthe second and third quarters of each year.This business is highly competitive and subject to general real estate marketconditions.Manufacturing BusinessesBerkshires numerous and diverse manufacturing subsidiaries are grouped into three cate

284、gories:(1)industrial products,(2)building products and(3)consumer products.Berkshires industrial products businesses manufacture components foraerospace and power generation applications,specialty chemicals,metal cutting tools,and a variety of other products primarilyfor industrial use.The building

285、products group produces prefabricated and site-built residential homes,flooring products,insulation,roofing and engineered products,building and engineered components,paint and coatings and bricks and masonryproducts.The consumer products group manufactures and distributes recreational vehicles,batt

286、eries,and various apparel,footwear and other products.Information concerning the major activities of these three groups follows.Berkshiresmanufacturing businesses employed approximately 191,000 people at the end of 2022.Industrial productsPrecision CastpartsPrecision Castparts Corp.(“PCC”),based in

287、Lake Oswego,Oregon,manufactures complex metal components andproducts,provides high-quality investment castings,forgings,fasteners/fastener systems and aerostructures for criticalaerospace and power and energy applications.PCC also manufactures investment castings and forgings for general industrial,

288、armament,medical and other applications;nickel and titanium alloys in all standard mill forms from large ingots and billets toplate,foil,sheet,strip,tubing,bar,rod,extruded shapes,rod-in-coil,wire and welding consumables,as well as cobalt alloys,for the aerospace,chemical processing,oil and gas,poll

289、ution control and other industries;fasteners for automotive and generalindustrial markets;specialty alloys for the investment casting and forging industries;heat treating and destructive testingservices for the investment cast products and forging industries;grinder pumps and affiliated components f

290、or low-pressuresewer systems;critical auxiliary equipment and gas monitoring systems for the power generation industry;and metalworkingtools for the fastener market and other applications.Investment casting technology involves a multi-step process that uses ceramic molds in the manufacture of metalc

291、omponents with more complex shapes,closer tolerances and finer surface finishes than parts manufactured using othermethods.PCC uses this process to manufacture products for aircraft engines,industrial gas turbine and other aeroderivativeengines,airframes,medical implants,armament,unmanned aerial veh

292、icles and other industrial applications.PCC alsomanufactures high temperature carbon and ceramic composite components,including ceramic matrix composites,for use innext-generation aerospace engines.PCC uses forging processes to manufacture components for the aerospace and power generation markets.PC

293、Cmanufactures high-performance,nickel-based alloys,as well as titanium alloys and products.PCCs nickel-based alloys areused to produce forged components and investment castings for aerospace and non-aerospace applications in such markets asoil and gas,chemical processing and pollution control.PCCs t

294、itanium products are used to manufacture components for thecommercial and military aerospace,power generation,energy,medical,and industrial end markets.PCC is also a leading developer and manufacturer of highly engineered fasteners,fastener systems,aerostructures andprecision components,primarily fo

295、r critical aerospace applications.These products are produced for the aerospace and powerand energy markets,as well as for construction,automotive,heavy truck,farm machinery,mining and construction equipment,shipbuilding,machine tools,medical equipment,appliances and recreation markets.K-12PCC has s

296、everal significant customers,including aerospace original equipment manufacturers(“OEMs”)(Boeing andAirbus)and aircraft engine manufacturer suppliers(General Electric,Rolls Royce and Pratt&Whitney).The majority of PCCssales are from customer orders or demand schedules pursuant to long-term agreement

297、s.Contractual terms may provide fortermination by the customer,subject to payment for work performed.PCC typically does not experience significant ordercancellations,although periodically it receives requests for delays in delivery schedules.The effects of the COVID-19 pandemic produced significant

298、adverse effects on the PCC aerospace business in 2020 and2021.The sudden and material reductions in air travel led to aircraft build rate reductions and customer destocking atextraordinary rates.Further,production delays in Boeings 737 MAX and 787 programs during this time also adverselyimpacted PCC

299、 over the past three years.While commercial air travel increased in both the U.S.and international markets during 2022,traffic remains below pre-COVID-19 pandemic levels,especially for international routes.Further recovery could be uneven,in the event of new COVID-19 variant developments and related

300、 travel restrictions,as well as from the changes in supply chain conditions,including theavailability of workers.Commercial aircraft delivery rates by OEMs of narrow-body aircraft have rebounded since the onsetof the pandemic.However,deliveries of wide-body aircraft remain relatively low,in part att

301、ributable to the pause in the Boeing787 program,which resumed deliveries in the third quarter of 2022.Long-term industry forecasts continue to show growth andstrong demand for air travel and aerospace products.PCC is subject to substantial competition in all of its markets.Components and similar pro

302、ducts may be produced bycompetitors,who use either the same types of manufacturing processes as PCC or other processes.Although PCC believes itsmanufacturing processes,technology and experience provide its customers advantages,such as high quality,competitive pricesand physical properties that often

303、 meet more stringent demands,alternative forms of manufacturing can be used to producemany of the same components and products.Nevertheless,PCC is a leading supplier in most of its principal markets.Severalfactors,including long-standing customer relationships,technical expertise,state-of-the-art fa

304、cilities and dedicated employees,aid PCC in maintaining competitive advantages.Several raw materials used in PCC products,including certain metals such as nickel,titanium,cobalt,tantalum andmolybdenum,arefoundinonlyafewpartsoftheworld.Thesemetalsarerequiredforthealloysusedinmanufacturedproducts.The

305、availability and costs of these metals may be influenced by private or governmental cartels,changes in world politics,laborrelations between the metal producers and their workforces and inflation.PCC is currently subject to various federal,state and foreign environmental laws concerning,among other

306、things,waterdischarges,air emissions,waste management,toxic materials use reduction and environmental cleanup.Laws and regulationscontinue to evolve,and it is reasonably possible that environmental standards will become more stringent in the future,particularly under air quality and water quality la

307、ws and standards related to climate change,including reporting of GHGemissions.As a result,it is also reasonably likely that PCC will be regularly required to make additional expenditures,includingcapital expenditures,which could be significant,relating to environmental matters.LubrizolThe Lubrizol

308、Corporation(“Lubrizol”),headquartered in Wickliffe,Ohio,is a specialty chemical and performancematerials company that manufactures products and supplies technologies for the global transportation,industrial and consumermarkets.Lubrizol currently operates two business segments:Lubrizol Additives,whic

309、h produces engine lubricant additives,driveline lubricant additives and industrial specialties products;and Lubrizol Advanced Materials,which includes engineeredmaterials(engineered polymers and performance coatings)and life sciences(beauty and personal care,and health and homecare solutions).Lubriz

310、ol Additives products are used in a broad range of applications including engine oils,transmission fluids,gearoils,specialty driveline lubricants,fuels,metalworking fluids and compressor lubricants for transportation and industrialapplications.LubrizolAdvancedMaterialsproductsareusedinmanydifferentt

311、ypesofapplicationsincludingbeauty,personalcare,home care,over-the-counter pharmaceuticals,medical devices,performance coatings,sporting goods,plumbing and firesprinkler systems.Lubrizol is an industry leader in many of the markets in which it competes,and its principal lubricantadditives competitors

312、 are Infineum International Ltd.,Chevron Oronite Company and Afton Chemical Corporation.LubrizolAdvanced Materials businesses compete in many markets with a variety of competitors in each product line.With its considerable patent portfolio,Lubrizol uses its technological leadership position and appl

313、ies its sciencecapabilities,formulation know-how and market expertise in product development to improve the demand,quality and value ofits solutions.Lubrizol also leverages its scientific and applications knowledge to meet and exceed customer performance andsustainability requirements.While Lubrizol

314、 typically has patents that expire each year,it invests resources to protect itsintellectual property and to develop or acquire innovative products for the markets it serves.Lubrizol uses many specialty andcommodity chemical raw materials in its manufacturing processes.Raw materials are primarily fe

315、edstocks derived frompetroleum and petrochemicals and,generally,are obtainable from several sources.The materials that Lubrizol chooses topurchase from a single source typically are subject to long-term supply contracts to ensure supply reliability.K-13Lubrizol operates its business on a global basi

316、s through more than 100 offices,laboratories,production facilities andwarehouses on six continents,the most significant of which are North America,Europe,Asia and South America.Lubrizolmarkets its products worldwide through direct sales,sales agents and distributors.Lubrizols customers principally c

317、onsist ofmajor global and regional oil companies and industrial and consumer products companies.Some of Lubrizols largestcustomers also may be suppliers.During 2022,no single customer accounted for more than 10%of Lubrizols consolidatedrevenues.In recent years,the COVID-19 pandemic,supply chain disr

318、uptions,severe weather and fires at certain Lubrizolfacilities affected the availability of raw materials and fulfillment of customer orders and otherwise disrupted Lubrizolsoperations.Lubrizol expends significant capital to ensure the safety of its employees and the communities where it operates,as

319、 wellas delivering on its commitments to operational excellence and cybersecurity.Lubrizol also makes significant capitalinvestments to ensure reliable supply and compliance with regulations governing its operations,while reducing theirenvironmental footprint.Lubrizol is subject to foreign,federal,s

320、tate and local laws to protect the environment,limit manufacturing waste andemissions,ensure product and employee safety and regulate trade.While the company believes that its policies,practices andprocedures are designed to limit the associated risks and consequent financial liability,the operation

321、 of chemical manufacturingplants entails inherent environmental,safety and other risks,and significant capital expenditures,costs or liabilities could beincurred in the future.IMC International Metalworking CompaniesIMC International Metalworking Companies(“IMC”)is one of the three largest multinati

322、onal manufacturers ofconsumable precision carbide metal cutting tools for applications in a broad range of industrial end markets.IMCs principalbrand names include ISCAR,TaeguTec,Ingersoll,Tungaloy,Unitac,UOP,It.te.di,Qutiltec,ToolFlo,PCT,IMCO and BSW.IMCs primary manufacturing facilities are locate

323、d in Israel,the U.S.,South Korea,Japan,Germany,Italy,Switzerland,India and China.IMC has five primary product lines:milling tools,gripping tools,turning/thread tools,drilling tools and tooling.Themain products are split within each product line between consumable cemented tungsten carbide inserts an

324、d steel tool holders.Inserts comprise a major portion of IMCs sales and earnings.Metal cutting inserts are used by industrial manufacturers to cutmetals and are consumed during their use in cutting applications.IMC manufactures hundreds of types of highly engineeredinserts within each product line t

325、hat are tailored to maximize productivity and meet the technical requirements of customers.IMCs staff of scientists and engineers continuously develop and innovate products that address end user needs andrequirements.IMCs global sales and marketing network operates in nearly every major manufacturin

326、g center around the world,staffedwith highly skilled engineers and technical personnel.IMCs customer base is very diverse,with its primary customers beinglarge,multinational businesses in the automotive,aerospace,engineering and machinery industries.IMC operates a regionalcentral warehouse system wi

327、th locations in Israel,the U.S.,Belgium,Korea,Japan and China.Additional small quantities ofproducts are maintained at local IMC sales offices to provide on-time customer support and inventory management.IMC competes in the metal cutting tools segment of the global metalworking tools market.The segm

328、ent includeshundreds of participants who range from small,private manufacturers of specialized products for niche applications andmarkets to larger,global multinational businesses(such as Sandvik and Kennametal,Inc.)with a wide assortment of productsand extensive distribution networks.Other manufact

329、uring companies such as Kyocera,Mitsubishi,Sumitomo,Ceratizit andKorloy also play a significant role in the cutting tool market.Cemented tungsten carbide powder is the main raw material used in manufacturing cutting tools.Most of IMCs insertproducts are made from tungsten.While supplies are currentl

330、y adequate,a significant disruption or constraints in productionprocessing facilities could cause reduced availability and increased prices.IMC is committed to following and complying with all government and environmental rules,regulations andrequirements and applicable laws.IMC considers environmen

331、tal preservation and pollution prevention as important factors inall operations and activities.IMC production facilities are built with the highest standards and follow all applicable regulations.K-14MarmonMarmon Holdings,Inc.(“Marmon”),headquartered in Chicago,Illinois,is a global industrial organi

332、zation comprisingeleven diverse business groups and more than 100 autonomous manufacturing and service businesses.Marmonsmanufacturing and service operations are conducted at approximately 400 manufacturing,distribution and service facilitieslocated primarily in the U.S.,as well as 18 other countrie

333、s worldwide.Marmons business groups are as follows.Foodservice Technologies manufactures beverage dispensing and cooling equipment,hot and cold food preparation andholding equipment and related products for restaurants,global brand owners and other foodservice providers.Operations arebasedintheU.S.withmanufacturingfacilitiesintheU.S.,Mexico,China,CzechRepublicandItaly.Productsaresoldprimarilythrou