Note 5. Equity method investments

Berkshire and its subsidiaries hold investments that are accounted for pursuant to the equity method. The most significant of these are our investments in the common stock of Kraft Heinz and Occidental. As of June 30, 2026, we owned 27.5% of the outstanding Kraft Heinz common stock and 26.7% of the outstanding Occidental common stock, which excludes the potential effect of the exercise of Occidental’s outstanding common stock warrants. Kraft Heinz manufactures and markets food and beverage products, including condiments and sauces, dairy, meals, meats, beverages and other grocery products. Occidental is an energy company, whose activities include oil and natural gas exploration, development and production.

We also own a 50% interest in Berkadia Commercial Mortgage LLC (“Berkadia”). Jefferies Financial Group Inc. (“Jefferies”) owns the other 50% interest. Berkadia engages in mortgage banking, investment sales and servicing commercial/multi-family real estate loans. Berkadia’s commercial paper borrowing capacity (limited to $1.5 billion) is supported by a surety policy issued by a Berkshire insurance subsidiary. Jefferies is obligated to indemnify us for one-half of any losses incurred under the policy.

Notes to Consolidated Financial Statements

Note 5. Equity method investments

As of June 30, 2026, the carrying value of our investment in Kraft Heinz common stock exceeded fair value by $1.1 billion (or 12.2% of our carrying value). In evaluating the investment in Kraft Heinz for other-than-temporary impairment as of June 30, 2026, we considered our ability and intent to hold the investment until recovery, the magnitude and duration of the decline in fair value, and the operating results and financial condition of the company, as well as prevailing economic risks and uncertainties and other factors. Based on our assessment, we concluded that the recognition of an impairment charge in earnings for Kraft Heinz was not required as of June 30, 2026. However, our current expectations and intentions concerning this investment may change in the future, which may result in the recognition of an impairment loss at that time.

In the second quarter of 2025, we recorded a pre-tax impairment loss of approximately $5.0 billion on our Kraft Heinz investment as a component of our equity in the earnings of Kraft Heinz, which reduced the carrying value of our investment to fair value based on the quoted market price at June 30, 2025. In evaluating our investment in Kraft Heinz for impairment in the second quarter of 2025, we considered the facts and circumstances previously stated. At that time, we concluded that, in our judgment, the unrealized loss was other than temporary.

As a result of the impairment loss recorded in the second quarter of 2025, Berkshire’s share of Kraft Heinz shareholders’ equity exceeded Berkshire’s equity method carrying value by approximately $5.0 billion. This basis difference was attributed to Kraft Heinz’s indefinite-lived intangible assets and goodwill. The basis difference has declined to approximately $2.8 billion, attributable to the impact of goodwill and other intangible asset impairment losses recorded by Kraft Heinz since March of 2025 and through March of 2026.

On May 19, 2025, Berkshire’s representatives on the Kraft Heinz Board of Directors resigned. Since the timing and extent of financial information we receive from Kraft Heinz became limited to the information Kraft Heinz makes publicly available, we concluded our receipt of such information was no longer sufficiently timely for concurrent inclusion in our Consolidated Financial Statements. Thus, we began recognizing the equity method effects attributable to this investment on a one-quarter lag beginning with our second quarter of 2025.

Summarized financial information of Kraft Heinz follows (in millions).

Summarized financial information of Occidental follows (in millions).