This is part two of the transcript and video of Warren Buffett's 'Ask Warren' appearance on CNBC's Squawk Box on Monday, March 1, 2010.

CLICK HERE FOR PART ONE

ANNOUNCER: This is a special presentation of SQUAWK BOX. The world's most famous investor live from Omaha, Nebraska. You ask Warren Buffett, we'll answer. A unique, interactive three-hour-long conversation not to be missed, as SQUAWK BOX begins right now.

KERNEN: Yeah, there's orange on top of our SQUAWK BOX logo. It used to be blue--it used to be blue. There's orange there. And good morning, and welcome back to SQUAWK BOX here on CNBC. I'm Joe Kernen, along with Carl Quintanilla. Becky Quick reporting life from Omaha today. More from Becky and Warren Buffett in just a minute. First, though, a check of the SQUAWK Newswire, as only Carl, I think, can do.

(News headlines followed by discussion about new Squawk Box set elements)

QUICK: No, I haven't seen that one.

QUINTANILLA: This one right here.

QUICK: No, oh, OK, you're right, that's spooky.

QUINTANILLA: Yeah, that's all new.

KERNEN: That is new. That's cool.

QUICK: That is new.

KERNEN: But the...

BUFFETT: Joe, if you're unhappy you can get--if you're unhappy, get some Benjamin Moore paint. We'll have it fixed for you today.

KERNEN: You are--you are...

QUICK: Ever the salesman.

KERNEN: ...you are unbelievable. It's a good idea, though. Let's get some Benjamin--all right.

QUICK: Well, we do want to ask you about another one of your companies, Warren. Coca-Cola came out and surprised a lot of people with this news that it's going to be buying the North American bottling operations. This is different than what they'd been talking about in the past.

BUFFETT: Right.

QUICK: And it follows what Pepsi did about a year ago; in fact, follows very closely what they'd been doing. What do you think about this deal?

BUFFETT: Well, I think on balance I like it. I mean, (Chairman & CEO) Muhtar Kent has done a fabulous job with Coke, and there's a lot of execution problems in doing anything like that. Pepsi will have them and we'll have them at Coke. But with Muhtar, I feel confident in the fact that it will get carried off right now. The bottling business is very different than what they call the concentrate business, which is making the Cola-Cola concentrate, gets turned into syrup, gets turned into Cola-Cola. The bottling business is very capital intensive and has low margins. The concentrate business is not capital intensive and has very wide margins. Literally, Coca-Cola with 5 billion of capital could make 8 or 9 billion pre-tax just from the concentrate business. But the bottling business is an entirely different business. So long-term, I like being in the concentrate business much more than the bottling business. But the bottling business, Coca-Cola has what they call a fountain division that sells direct. They have the bottlers. Any time they get a new product there's a question of how it comes under this contract that originally goes back to 1899. It needed rationalization and this move is a big, big step toward rationalizing it, make it so it's more--it's more friendly to the big box retailers of Walmart or some--Costco or somebody like that. And it--but it will--there will be some real execution time involved in it and over time, you would hope that Coca-Cola would have less money involved in the bottling business, because it's a less attractive business.

QUICK: Obviously, you're a long-term shareholder, but when you say that there are very likely to be come execution steps, some difficulties along the way, maybe some stumbles, how much patience do you have as an investor? You talking about year or two?

BUFFETT: I--well, no, I just say that--whenever you're doing anything this big you better--you have to have a lot of confidence in the management and I have confidence in Muhtar to carry this off.

QUICK: You know, that brings us to one of the shareholder questions that came in. This is from Carlos Alvarez in Houston, Texas. He says, "Can Berkshire really be another Coca-Cola in the sense that even a ham sandwich can run it after you're gone? What kind of checks and balances will you leave in place to prevent major mistakes by the next CEO?"

BUFFETT: Yeah. Well, the culture's all important and the culture of Berkshire, I think, is more embedded than you could find in any--in any company virtually in the world. You've got managers by the dozens that have bought into it when they sold us the business. You have directors who have bought into it who've come on board because they believe in that culture, not--they get directors fees of $900 a year. So they are not there to collect directors fees or for importance. They're there because they think of Berkshire as something special and they'll keep it special. On top of that, at least for a while after I die, my A shares will represent a huge voting piece of the company, and I hope that a member of the Buffett family is involved. Not in management, but just as a--as a custodian of the--of the culture, as a non-executive chairman. There's all kinds of things in place that will--that will keep it running the way it's run. It would--the organization would thrust out anybody that tried to go in a different direction, just like they would have thrust out anybody that tried to take Walmart in a different direction after Sam Walton died.

QUICK: Speaking of who would be running the place after you, The Wall Street Journal had an article over the weekend that focused on Dave Sokol, and says many people are betting that he is the lead candidate to be running the place after you're gone.

BUFFETT: Well, there are three candidates that the--we spend over half our time at every board meeting talking about who runs it after I'm gone. It's a little morbid. I mean, it's like they look at me and they think "who's going to run this place tomorrow?" But the--and we discuss the strengths and weaknesses of those three. If something happened to me tonight, tomorrow morning the board knows exactly who they would put in charge and they feel very comfortable with it, I feel comfortable with it. I just don't feel comfortable with it happening tomorrow morning. But--and actually as we acquire companies, that pool of outstanding managers even grows. So we have--there is no problem finding somebody who not only has got all the abilities to run this place after I'm not around, but basically he has the culture embedded as strongly in themselves as I do in myself.

QUICK: As you acquire companies. Are you talking about Matt Rose from Burlington?

BUFFETT: Well, certainly you're getting an out--a fabulous manager in Matt Rose from--and, you know, and he's young. I mean, we will--the pool grows basically over time.

QUICK: But you say there's three people that you've had that you've been watching for some time.

BUFFETT: Right.

QUICK: Does that change, the three people who are on that list?