Berkshire Hathaway Capital Expenditures By Segment

Capital allocation. Pexels Image.

This article covers Berkshire Hathaway Inc’s capital spending by segment.

Berkshire Hathaway’s segments consist of insurance, railroads, energy, travel centers, manufacturing, service, and retailing.

For a complete definition of Berkshire’s business categories, you may visit this section: Berkshire Hathaway business segments.

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For other key statistics of Berkshire Hathaway, you may find more information on this page: Berkshire key statistics.

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Definitions

To help readers understand the content better, the following terms and glossaries have been provided.

Insurance: Berkshire Hathaway’s insurance business is a major component of its diversified portfolio and includes several key divisions:

1. GEICO: A well-known auto insurance company that provides coverage for millions of drivers.
2. Reinsurance: This division takes on large, complex risks that other companies may be unwilling or unable to write. Berkshire Hathaway has a strong reputation for handling long-tail reinsurance agreements, which involve taking on significant liabilities over an extended period.
3. General Insurance: This segment covers a wide range of insurance products, including property and casualty insurance.

The success of Berkshire Hathaway’s insurance business lies in its ability to accurately price policies and manage risks effectively. The company’s substantial capital reserves and conservative approach to underwriting allow it to take on risks that others avoid, contributing significantly to its overall profitability.

Railroad (“BNSF”): Berkshire Hathaway’s railroad business is primarily represented by Burlington Northern Santa Fe, LLC or BNSF Railway Company (BNSF), one of the largest freight railroad networks in North America.

BNSF provides a vital link for the transportation of goods and commodities across the United States, covering approximately 32,500 miles of track in 28 states and three Canadian provinces. Here are some key aspects of BNSF:

• Services: BNSF transports a wide variety of goods, including agricultural products, consumer goods, coal, industrial products, and petroleum.
• Network: The extensive network connects major markets and ports, facilitating the efficient movement of goods across long distances.
• Efficiency: Known for its operational efficiency and reliability, BNSF plays a crucial role in the supply chain for many industries.
• Ownership: Berkshire Hathaway acquired full ownership of BNSF in 2010, making it a wholly-owned subsidiary.

BNSF’s operations are a significant component of Berkshire Hathaway’s overall revenue and profitability, contributing to the conglomerate’s diversified business portfolio.

Berkshire Hathaway Energy (“BHE”): Berkshire Hathaway Energy (BHE) is a diversified energy company and wholly-owned subsidiary of Berkshire Hathaway Inc. BHE generates, transmits, stores, distributes, and supplies energy across the United States, Great Britain, and Alberta, Canada. Here are some key aspects of BHE:

• Business Portfolio: BHE owns and operates several utilities, including MidAmerican Energy Company, PacifiCorp, NV Energy, and Northern Powergrid.
• Renewable Energy: BHE has made significant investments in renewable energy projects, including wind, solar, and geothermal power.
• Natural Gas: The company owns several interstate natural gas pipeline companies and has a substantial natural gas transportation capacity.
• Sustainability: BHE is committed to environmental stewardship and aims to achieve net-zero greenhouse gas emissions.
• Customer Base: BHE serves over 13 million customers and end-users, providing reliable and low-cost energy solutions.

BHE’s vision is to be the best energy company in serving its customers while delivering sustainable energy solutions.

Pilot Travel Centers (“PTC”): Pilot Travel Centers, now fully owned by Berkshire Hathaway, is the largest operator of travel centers in North America. Founded in 1958 by James A. Haslam II as a single gas station, it has grown into a major network with over 750 locations across the U.S. and Canada.

Under the Pilot Flying J and Mr. Fuel brands, it provides services such as gas pumps, fast-food restaurants, parking, laundry, and showers to truck drivers and other motorists. Pilot Travel Centers sells about 14 billion gallons of fuel and $3 billion worth of food and merchandise annually.

According to the 2023 annual report, Berkshire acquired control of PTC on January 31, 2023 and PTC is considered a reportable segment beginning February 1, 2023. As a result, the revenue data of the PTC segment for fiscal year 2023 are for the eleven months ending December 31, 2023. Previously, the earnings from PTC were determined under the equity method and included in earnings from non-controlled businesses.

Manufacturing: Berkshire Hathaway’s manufacturing business encompasses a diverse range of industries and products, making it a significant part of the company’s overall operations. Here are some key components of this segment:

Precision Castparts Corp. (PCC)

• Products: Manufactures complex metal components and products primarily for aerospace, power, and industrial markets.
• Specialization: Known for its precision manufacturing capabilities and high-quality standards.

Marmon Holdings, Inc.

• Products: Operates a group of diverse businesses including engineered products, transportation equipment, and construction products.
• Specialization: Focuses on providing solutions across various industries through its wide range of subsidiary companies.

IMC International Metalworking Companies

• Products: Produces metal cutting tools and tooling systems for a variety of industrial applications.
• Specialization: Renowned for innovation and advanced manufacturing technologies.

Forest River, Inc.

• Products: Manufactures recreational vehicles (RVs), cargo trailers, buses, and commercial vehicles.
• Specialization: Offers a broad range of products designed for leisure, commercial, and personal use.

Johns Manville

• Products: Produces insulation, roofing materials, and engineered products for commercial and residential buildings.
• Specialization: Committed to sustainability and energy efficiency in its product offerings.

The Lubrizol Corporation

• Products: Provides specialty chemicals, including additives for transportation and industrial lubricants.
• Specialization: Focuses on enhancing the performance and efficiency of various fluids and materials.

These businesses contribute to Berkshire Hathaway’s robust manufacturing segment by delivering a wide array of products and solutions across multiple industries.

McLane Company (“McLane”): McLane Company is a wholly-owned subsidiary of Berkshire Hathaway Inc. Founded in 1894, McLane is one of the largest supply chain services leaders in the United States.

The company provides grocery and foodservice supply chain solutions to convenience stores, mass merchants, drug stores, and chain restaurants. McLane operates over 80 distribution centers across the U.S. and one in Brazil, delivering more than 50,000 different consumer products to nearly 90,000 locations.

Service And Retailing: Berkshire Hathaway’s service and retailing businesses encompass a wide array of companies, each catering to different markets and consumer needs. Here’s a snapshot of some of the key players in this segment:

Service Businesses

1. NetJets: A leader in fractional jet ownership, providing private aviation services for individuals and businesses.
2. Berkshire Hathaway Automotive: One of the largest dealership groups in the United States, offering a broad range of new and used vehicles along with related services.
3. FlightSafety International: Provides professional aviation training for pilots, maintenance technicians, and other aviation professionals.

Retailing Businesses

1. Borsheims Fine Jewelry: A high-end jewelry store known for its extensive selection of fine jewelry, watches, and gift items.
2. Nebraska Furniture Mart: One of the largest home furnishing stores in North America, offering furniture, appliances, electronics, and flooring.
3. See’s Candies: A manufacturer and retailer of premium chocolates and other confectionery products.
4. Brooks Sports: Specializes in high-performance running shoes, apparel, and accessories.
5. Dairy Queen: Operates and franchises a chain of quick-service restaurants known for their ice cream and fast food.

These businesses contribute significantly to Berkshire Hathaway’s diverse portfolio, providing a steady stream of revenue across various industries. Each company within this segment operates independently but benefits from the overall stability and resources of Berkshire Hathaway.

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Insight & Summary of Berkshire Hathaway’s Capital Expenditures By Segment

The following analysis consolidates the trends observed across Berkshire Hathaway’s capital expenditures by segments for the 2016–2025 period.

• BHE: The Dominant and Expanding CapEx Engine Berkshire Hathaway Energy is — by a substantial margin — the largest capital expenditure centre in the portfolio. BHE CapEx grew from $5,090M (FY2016) to $10,589M (FY2025), a FY2025 all-time high, with a FY2023–FY2025 average of $9,583M at 48.4% of total portfolio mix. BHE’s share of total CapEx has expanded throughout the period — from 39.3% (FY2016) to 50.6% (FY2025) — reflecting the ongoing transition of its regulated utility portfolio toward renewable energy generation (wind, solar, transmission infrastructure).

  As a regulated utility, BHE’s CapEx is largely mandated and recoverable through rate base, making it simultaneously capital-intensive and commercially predictable. The sustained investment cycle has been an important positive for long-term intrinsic value creation, though the wildfire litigation overhang (discussed in the PAT analysis) represents a contingent liability that investors must track alongside the CapEx commitment. The FY2023–FY2025 average growth of 12.6% per year is the strongest sustained infrastructure CapEx growth rate in the portfolio, confirming that BHE’s energy transition investment programme is accelerating rather than moderating.

• BNSF: Maintenance Capital in a Mature Railroad BNSF’s CapEx profile is fundamentally different from BHE’s: it is a largely maintenance-oriented capital programme for a mature, geographically fixed asset base. Spend ranged between $2,910M (FY2021 trough) and $3,920M (FY2023 peak), with a FY2023–FY2025 average of $3,802M at 19.2% mix — a structurally declining share as BHE and Pilot grow. BNSF CapEx declined from 29.5% of total (FY2016) to 18.1% (FY2025) entirely as a mix effect, not an absolute decline. The FY2023–FY2025 average growth of 2.7% is broadly maintenance-level investment in a $100B+ asset network. BNSF’s capital intensity (CapEx as approximately 70–75% of BNSF’s annual EBIT) is characteristic of Class I railroads, and the spend pattern is consistent with Berkshire’s approach to maintaining assets in good condition without aggressive capacity expansion given flat-to-declining freight volume trends.

• Pilot: The Newest Capital Commitment Pilot — the truck stop and travel centre chain in which Berkshire completed full consolidation — entered the CapEx dataset in FY2023 at $705M, grew to $799M (FY2024), and reached $941M (FY2025) at 4.5% of portfolio mix. The FY2024–FY2025 average growth of 15.6% (the only two periods with data) indicates a network investment cycle as Berkshire integrates Pilot’s operations and pursues expansion and upgrading of its ~800+ location footprint. At $815M average CapEx, Pilot is now the fourth-largest CapEx contributor in the portfolio — ahead of McLane and approaching the Service and Retailing segment. Whether Pilot’s investment cycle sustains at current rates or moderates post-integration will be the key CapEx-side question for this segment over the next two to three years.

• Service and Retailing: Accelerating CapEx Signals Expansion Service and Retailing CapEx grew from $932M (FY2017 trough) to $2,604M (FY2025), with the FY2023–FY2025 average of $2,518M at 12.7% mix and 15.8% average growth — the second-fastest growth rate among the established segments (after BHE). The jump from $1,775M (FY2022) to $2,590M (FY2023, +45.9%) represents the sharpest single-year absolute increase for this segment and likely reflects a combination of capacity expansion across the diverse retailing operations (Berkshire’s portfolio spans auto dealers, furniture retailers, food services, and other retail formats) and the post-COVID normalisation of investment that was deferred during FY2020–FY2021.

• Manufacturing: Stable Maintenance, Modest Growth Manufacturing CapEx has been broadly stable at $2,100M–$3,116M throughout the period, with a FY2023–FY2025 average of $2,725M at 13.8% mix and 2.8% average growth. The moderate and stable investment pattern reflects the nature of Berkshire’s manufacturing portfolio — Precision Castparts (aerospace components), Marmon (industrial), Lubrizol (specialty chemicals), IMC (cutting tools) — which requires ongoing equipment maintenance and selective capacity additions but is not undergoing structural transformation. Manufacturing’s declining mix share (from 19.9% in FY2016 to 12.8% in FY2025) reflects the proportional expansion of BHE and Pilot rather than any retrenchment in absolute terms.

• McLane: Volatile but Small McLane’s FY2023 CapEx of $264M represented a +183.9% surge from $93M in FY2022, driven by distribution centre investments and fleet refreshment. The subsequent declines in FY2024 (-10.6%) and FY2025 (-12.3%) suggest the FY2023 spike was a concentrated investment event rather than a new sustained level. At a FY2023–FY2025 average of $236M and 1.2% mix, McLane is immaterial to total portfolio CapEx analysis but the three-year growth average of 53.7% is statistical artefact of a lumpy investment cycle.

• Total CapEx vs Operating Cash Flow: A Rising Capital Intensity Profile Total CapEx grew from $12,954M (FY2016) to $20,927M (FY2025) — a 61.6% increase over nine years — with a FY2023–FY2025 average of $19,771M. The CapEx-to-OCF ratio is the most strategically important metric for assessing Berkshire’s free cash flow generation capacity. Historically, this ratio has ranged between 25.6% (FY2017, when strong OCF and controlled CapEx coexisted) and 62.0% (FY2024, when OCF temporarily fell to $30,592M while CapEx held near $19B).

  The FY2023–FY2025 average ratio of 49.0% — meaningfully above the FY2016–FY2022 average of approximately 35% — reflects two structural developments: (1) BHE’s expanding renewable energy investment programme requiring sustained above-historical CapEx; and (2) the addition of Pilot to the portfolio. The FY2024 anomaly (62.0% CapEx/OCF) reflects an unusually low OCF year — likely from elevated insurance claim payments and tax activity — rather than a permanent deterioration in free cash flow generation. With OCF recovering to $45,969M in FY2025 and CapEx at $20,927M, the FY2025 ratio of 45.5% is more representative of the current steady-state relationship.

• Structural Takeaway: Berkshire’s CapEx profile is increasingly dominated by BHE’s energy transition investment cycle, which consumed 50.6% of total portfolio CapEx in FY2025 and is growing at 12.6% annually. This represents a strategic evolution in Berkshire’s capital allocation: historically, the conglomerate was known for generating free cash flow from capital-light businesses and deploying it into acquisitions and equity investments rather than infrastructure build-out.

  BHE’s regulated utility economics make this CapEx directly value-accretive (recoverable through rate base), but the sheer scale — nearly $10.6B in a single segment — means Berkshire’s aggregate free cash flow conversion has moderated. Together, BHE and BNSF account for approximately 67% of total CapEx, and their combined investment requirements define Berkshire’s capital intensity floor for any foreseeable planning horizon. The practical implication is that Berkshire’s “excess capital” available for share buybacks, acquisitions, and equity investments is somewhat lower than the headline OCF number implies — investors should adjust for approximately $19–21B in annual required CapEx when assessing Berkshire’s available capital deployment capacity.

The table below combines all key Berkshire’s capital spending by segment metrics into a single view for the latest three fiscal years.

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Capital Expenditures Numbers

You may find the definitions of Berkshire’s insurance, manufacturing, and McLane businesses here: insurance, manufacturing, and McLane.

The definitions of Berkshire’s BNSF, BHE, PTC, and service and retail businesses are available here: BNSF, BHE, PTC, and service and retail.

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Capital Expenditures Mix

You may find the definitions of Berkshire’s insurance, manufacturing, and McLane businesses here: insurance, manufacturing, and McLane.

The definitions of Berkshire’s BNSF, BHE, PTC, and service and retail businesses are available here: BNSF, BHE, PTC, and service and retail.

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Capital Expenditures Growth

You may find the definitions of Berkshire’s insurance, manufacturing, and McLane businesses here: insurance, manufacturing, and McLane.

The definitions of Berkshire’s BNSF, BHE, PTC, and service and retail businesses are available here: BNSF, BHE, PTC, and service and retail.

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Capital Expenditures vs Operating Cash Flow

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Credits And References

1. All financial data presented in this article was obtained and referenced from Berkshire Hathaway’s annual reports published in the company’s investor relation page: Berkshire’s Reports.

2. Pexels Images.

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Disclosure

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