At MidAr ate in a similar" compact.”W Midamerican 8o g owned by berkshire s stomers in the with electricity ine and as an im dant orovider in six other states a well.Our pipelines transport 8%of the country's natural gas.Obviously,many millions of Americans depend on us every day.They haven't been disappointed. When MidAmerican purchased Northem Natural Gas pipeline in 2002,that company's performance as most recent report. MidAmerica has a comparable ecord.In the most recent red the6 utility groups surveyed. story was Ia MidAmerican will have 3 316 ration in on nd of 2012 far than any other regulated ele ommitted to wind is a staggering $6 billion.We can make this sort of investment because MidAmerican retains all of its earnings,unlike other utilities that generally pay out most of what they earn.In addition,late las y more BNSF and by for Berkshire shareholders.Below are the relevant figures: MidAmerican Earnings (in millions 2011 2010 333 )70 70 Western utilities 783 Pipelines 38 37 36 Operating earnings be 13 20 Income tax 315 271 1.331 $1.238 Earnings applicable to Berkshire* s1.204 $1.131 *Includes interest eamed by Berkshire (net of related income taxes)of $8 in 2011 and $19in2010. (in millions 2011 2010 s16 ings s07 Pre-Tax earnings 4,741 Net earnings . 2.97 In the book value recorded on our balance sheet.BNSF and MidAmerican carry substantial goodwill components totaling $20 billion.In each instance.however.Charlie and I believe current intrinsic value is far greater than book valueAt MidAmerican, we participate in a similar “social compact.” We are expected to put up ever-increasing sums to satisfy the future needs of our customers. If we meanwhile operate reliably and efficiently, we know that we will obtain a fair return on these investments. MidAmerican, 89.8% owned by Berkshire, supplies 2.5 million customers in the U.S. with electricity, operating as the largest supplier in Iowa, Utah and Wyoming and as an important provider in six other states as well. Our pipelines transport 8% of the country’s natural gas. Obviously, many millions of Americans depend on us every day. They haven’t been disappointed. When MidAmerican purchased Northern Natural Gas pipeline in 2002, that company’s performance as a pipeline was rated dead last, 43 out of 43, by the leading authority in the field. In the most recent report, Northern Natural was ranked second. The top spot was held by our other pipeline, Kern River. In its electric business, MidAmerican has a comparable record. In the most recent survey of customer satisfaction, MidAmerican’s U.S. utilities ranked second among 60 utility groups surveyed. The story was far different not many years back when MidAmerican acquired these properties. MidAmerican will have 3,316 megawatts of wind generation in operation by the end of 2012, far more than any other regulated electric utility in the country. The total amount that we have invested or committed to wind is a staggering $6 billion. We can make this sort of investment because MidAmerican retains all of its earnings, unlike other utilities that generally pay out most of what they earn. In addition, late last year we took on two solar projects – one 100%-owned in California and the other 49%-owned in Arizona – that will cost about $3 billion to construct. Many more wind and solar projects will almost certainly follow. As you can tell by now, I am proud of what has been accomplished for our society by Matt Rose at BNSF and by Greg Abel at MidAmerican. I am also both proud and grateful for what they have accomplished for Berkshire shareholders. Below are the relevant figures: MidAmerican Earnings (in millions) 2011 2010 U.K. utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 469 $ 333 Iowa utility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 279 279 Western utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 771 783 Pipelines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 388 378 HomeServices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 42 Other (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 47 Operating earnings before corporate interest and taxes ............................ 1,982 1,862 Interest, other than to Berkshire .............................................. (323) (323) Interest on Berkshire junior debt .............................................. (13) (30) Income tax ............................................................... (315) (271) Net earnings ............................................................. $1,331 $1,238 Earnings applicable to Berkshire* ............................................ $1,204 $1,131 *Includes interest earned by Berkshire (net of related income taxes) of $8 in 2011 and $19 in 2010. BNSF (Historical accounting through 2/12/10; purchase accounting subsequently) (in millions) 2011 2010 Revenues ................................................................ $19,548 $16,850 Operating earnings ........................................................ 5,310 4,495 Interest (Net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 560 507 Pre-Tax earnings .......................................................... 4,741 3,988 Net earnings .............................................................. 2,972 2,459 In the book value recorded on our balance sheet, BNSF and MidAmerican carry substantial goodwill components totaling $20 billion. In each instance, however, Charlie and I believe current intrinsic value is far greater than book value. 11