By Andy Serwer

Warren Buffett appears to be only too certain of his own mortality -- and/or of his tenure as CEO of Berkshire Hathaway.

"At 94, it won't be long before Greg Abel replaces me as CEO and will be writing the annual letters," the Berkshire Hathaway CEO wrote in his 2024 annual letter to shareholders, released Saturday morning.

Buffett's succession plans have long been the subject of speculation. By making this point, Buffett both confirms unequivocally that Abel, currently CEO of Berkshire Hathaway Energy and vice-chairman of non-insurance operations of Berkshire Hathaway, will be his successor -- and that a handoff isn't so far off.

Buffett's letter to shareholders is widely read by investors around the world, for both his company's sometimes-groundbreaking market moves and his witty eruditions on investing and economics -- and sometimes even society, politics, and marriage. This year's 15-page letter continues a trend of being shorter than the prior year's, and doesn't contain much of either group of topics.

Then again, Buffett is 94 years old, and as he told Fortune in a recent profile of Abel, "I'm still having a lot of fun and am able to do a few things reasonably well. But other activities have been eliminated or greatly minimized."

As for financial highlights, cash appears to be king for Buffett, but only grudgingly so. Though Berkshire Hathaway on Saturday reported a record cash holdings of some $334 billion when it released fourth-quarter earnings results, that didn't seem to thrill Buffett.

"Berkshire will never prefer ownership of cash-equivalent assets over the ownership of good businesses, whether controlled or only partially owned," Buffett wrote in his annual letter.

Buffett noted in the letter that annual operating earnings, his preferred measure of performance, jumped from $37.4 billion to $47.4 billion, a 26.7% increase. That was powered, Buffett seemed pleased to point out, in part by amped-up performance at Berkshire's GEICO insurance business, which has been in turnaround mode as of late. Buffett attributed that surge to GEICO CEO and Berkshire investment manager Todd Combs.

"GEICO was a long-held gem that needed major repolishing, and Todd has worked tirelessly in getting the job done," Buffett wrote. "Though not yet complete, the 2024 improvement was spectacular."

With regard to property and casualty insurance, a business that Buffett calls "central" to Berkshire, pricing improved, "reflecting a major increase in damage from convective storms." After losses, insurance companies tend to increase prices.

"Climate change may have been announcing its arrival," Buffett writes. "Someday, any day, a truly staggering insurance loss will occur -- and there is no guarantee that there will be only one per annum."

Buffett noted that Berkshire paid more in taxes to the U.S. Treasury than any other company. "Surprise, Surprise! An Important American Record is Smashed," Buffett wrote. Last year, Berkshire paid $26.8 billion in taxes, Buffett said, "far more in corporate income tax than the U.S. government had ever received from any company...about 5% of what all of corporate America paid." And over the past 60 years of its history Berkshire has paid $101 billion in taxes and and counting, he wrote.

Buffet went on to extoll America and capitalism, closing the section by saying: "Thank you, Uncle Sam. Someday your nieces and nephews at Berkshire hope to send you even larger payments than we did in 2024. Spend it wisely. Take care of the many who, for no fault of their own, get the short straws in life."

Berkshire may have posted strong numbers last year, but in a sense the company was stymied from doing what it does best: making savvy investments. The problem is that given high equity prices, Buffett and his lieutenants at Berkshire don't see any companies priced appealingly enough to buy. Unsurprisingly, Berkshire sold some $134 billion of stocks, mostly Apple.

Because Buffett eschews paying a dividend, Berkshire's cash on hand ballooned to $334 billion, up from $168 billion at the end of 2023. That cash trove is bigger than the market capitalization of Coca-Cola, a company in which Berkshire has maintained a longstanding, significant investment.

In the letter, Buffett also discussed Berkshire's increased investment in five Japanese holding companies -- ITOCHU, Marubeni, Mitsubishi, Mitsui and Sumitomo -- which he said are similar to Berkshire in that each "owns interests in a vast array of businesses."

Buffett said the aggregate cost of the Japanese investment is $13.8 billion, which Berkshire started buying in 2019, is now worth $23.5 billion. "Over time, you will likely see Berkshire's ownership of all five increase somewhat," Buffett wrote.

The letter ended on a somewhat somber note, with Buffett saying that Berkshire's annual meeting -- oft-described as Woodstock for capitalists -- will be a "re-engineered gathering" this year. There will be no amusing movie per usual to start the meeting, and it will conclude at 1 p.m., whereby it has previously run into the late afternoon.

Berkshire Hathaway's 2025 annual shareholders' meeting will be on Saturday, May 3 at the CHI Health Center in Omaha, Neb., the same city as Berkshire's headquarters.

Write to Andy Serwer at andy.serwer@barrons.com

Write to Andy Serwer at andy.serwer@barrons.com

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February 22, 2025 10:54 ET (15:54 GMT)

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