PetroChina

We made one large sale last year. In 2002 and 2003 Berkshire bought 1.3% of PetroChina for $488 million, a price that valued the entire business at about $37 billion. Charlie and I then felt that the company was worth about $100 billion. By 2007, two factors had materially increased its value: the price of oil had climbed significantly, and PetroChina’s management had done a great job in building oil and gas reserves. In the second half of last year, the market value of the company rose to $275 billion, about what we thought it was worth compared to other giant oil companies. So we sold our holdings for $4 billion. A footnote: We paid the IRS tax of $1.2 billion on our PetroChina gain. This sum paid all costs of the U.S. government – defense, social security, you name it – for about four hours. * * * * * * * * * * * * Last year I told you that Berkshire had 62 derivative contracts that I manage. (We also have a few left in the General Re runoff book.) Today, we have 94 of these, and they fall into two categories. First, we have written 54 contracts that require us to make payments if certain bonds that are included in various high-yield indices default. These contracts expire at various times from 2009 to 2013. At yearend we had received $3.2 billion in premiums on these contracts; had paid $472 million in losses; and in the worst case (though it is extremely unlikely to occur) could be required to pay an additional $4.7 billion. We are certain to make many more payments.

Investments We show below our common stock investments. Those that had a market value of more than $700 million at the end of 2005 are itemized. 12/31/05 Percentage of Shares Company Company Owned Cost* Market (in $ millions) 151,610,700 American Express Company ................... 12.2 $1,287 $ 7,802 30,322,137 Ameriprise Financial, Inc..................... 12.1 183 1,243 43,854,200 Anheuser-Busch Cos., Inc. ................... 5.6 2,133 1,884 200,000,000 The Coca-Cola Company ........................ 8.4 1,299 8,062 6,708,760 M&T Bank Corporation .......................... 6.0 103 732 48,000,000 Moody’s Corporation .............................. 16.2 499 2,948 2,338,961,000 PetroChina “H” shares (or equivalents)... 1.3 488 1,915 100,000,000 The Procter & Gamble Company .......... 3.0 940 5,788 19,944,300 Wal-Mart Stores, Inc. ......................... 0.5 944 933 1,727,765 The Washington Post Company .............. 18.0 11 1,322 95,092,200 Wells Fargo & Company......................... 5.7 2,754 5,975 1,724,200 White Mountains Insurance..................... 16.0 369 963 Others ...................................................... 4,937 7,154 Total Common Stocks ............................. $15,947 $46,721 *This is our actual purchase price and also our tax basis; GAAP “cost” differs in a few cases because of write-ups or write-downs that have been required.

Investments We show below our common stock investments. Those that had a market value of more than $600 million at the end of 2004 are itemized. 12/31/04 Percentage of Shares Company Company Owned Cost* Market (in $ millions) 151,610,700 American Express Company ................... 12.1 $1,470 $ 8,546 200,000,000 The Coca-Cola Company ........................ 8.3 1,299 8,328 96,000,000 The Gillette Company ............................. 9.7 600 4,299 14,350,600 H&R Block, Inc....................................... 8.7 223 703 6,708,760 M&T Bank Corporation .......................... 5.8 103 723 24,000,000 Moody’s Corporation .............................. 16.2 499 2,084 2,338,961,000 PetroChina “H” shares (or equivalents)... 1.3 488 1,249 1,727,765 The Washington Post Company .............. 18.1 11 1,698 56,448,380 Wells Fargo & Company......................... 3.3 463 3,508 1,724,200 White Mountains Insurance..................... 16.0 369 1,114 Others ...................................................... 3,531 5,465 Total Common Stocks ............................. $9,056 $37,717 *This is our actual purchase price and also our tax basis; GAAP “cost” differs in a few cases because of write-ups or write-downs that have been required. Some people may look at this table and view it as a list of stocks to be bought and sold based upon chart patterns, brokers’ opinions, or estimates of near-term earnings.