1964 年伯克希尔完整年报

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CLEVELAND PUBLIC LIBRARY CORPORATION FILE BUSINESS INF. BUR, Bif BERKSHIRE HATHAWAY INC. Annual Report TO THE STOCK HOLDERS 1964

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BERKSHIRE HATHAWAY INC. The Company had 3,823 Stockholders on October 3, 1964 DIRECTORS MALCOLM G. CHACE, JR., Chairman ABRAM BERKOWITZ ARTHUR INGRAHAM, JR. JONATHAN CHACE JOHN K. STANTON DANIEL COWIN OTIS C. STANTON LINSLEY V. DODGE SEABURY STANTON BRADFORD R. FROST A. N. WINSLOW, JR. EXECUTIVE COMMITTEE SEABURY STANTON, Chairman ABRAM BERKOWITZ BRADFORD R. FROST MALCOLM G. CHACE, JR. OTIS C. STANTON DANIEL COWIN A. N. WINSLOW, JR. OFFICERS SEABURY STANTON, President JOHN K. STANTON, Vice President, Treasurer and Clerk LINSLEY V. DODGE, Vice President WILLIAM H. POTTER, Vice President JOHN E. HARTLEY, Vice President STANLEY RUBIN, Vice President 1

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BERKSHIRE HATHAWAY INc. FINANCIAL HIGHLIGHTS For Fiscal Years 1964 and 1963 October 3, 1964 September 28, 1963 Sales $49,982,830 $50,590,679 Net Earnings (Loss) 175,586 (684,811) Earnings (Loss) per share .15 (.43) Depreciation 1,101,147 1,716,613 Additions to properties and equipment . $ 288,608 $ 665,813 Cash $ 920,089 $ 660,264 Notes payable - banks 2,500,000 5,400,000 Accounts receivable (net) 7,450,564 7,670,236 Inventories 11,689,145 18,011,345 Working capital 14,502,068 17,410,503 Working capital per share 12.75 10.83 Stockholders' equity . . 22,138,753 30,278,890 Stockholders' equity per share 19.46 18.84 Payroll . $13,135,731 $16,093,207 2

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BERKSHIRE HATHAWAY INc. ANNUALREPORT For the Year Ended October 3, 1964 November 20, 1964 TO THE STOCKHOLDERS OF BERKSHIRE HATHAWAY INC.: and all Divisions of the Company were operating on a profitable basis at the end of the final quarter. The fiscal year ended October 3, 1964 resulted in a profit of $175,586 after depreciation of $1,101,147, the Berkshire King Philip Plants A and E in Fall River, Mass, were permanently closed during the year. Our policy of closing plants which could not be operated profitably was continued, and, as a result, The land and buildings of Plant A have been sold and those of Plant E offered for sale. A considerable amount of the machinery has also been sold, and that part of the remainder which has not been transferred to other plants has been offered for sale. The Company now operates Berkshire King Philip Plant D in Warren, Rhode Island, and the Hathaway Synthetic, Box Loom and Home Fabrics Divisions in New Bedford, Mass. We are continuing our program of reducing overhead and other non-operating costs in our existing facilities. Raw material, stock in process and cloth inventories were decreased by $6,322,200 during the year, and bank loans were brought down from $5,400,000 to $2,500,000, notwithstanding the expenditure of $5,315,723 during the year for the purchase of capital stock of the Company. Since the end of the fiscal year additional payments have been made to the banks, and our outstanding loans at present amount to $1,600,000. At the beginning of the fiscal year, there were 1,607,380 shares of stock outstanding and, in keeping with the vote of the stockholders at the 1962 Annual Meeting, 469,602 shares were purchased in the open market or through tenders, leaving a total of 1,137,778 shares outstanding at the end of the fiscal year. authorize the Directors, at their discretion, to purchase additional shares for retirement. Berkshire Hathaway has maintained its strong financial position and it would seem constructive to During the year the Congress passed a law permitting United States mills to purchase cotton at the table burden under which United States mills have been obliged to operate since this subsidy was first same price as that paid by foreign mills under the Government subsidy, and this has corrected the inequi- put into effect in 1956. The number of looms operating on highly competitive staple grey fabrics has been reduced, and all Divisions have a substantial backlog of unfilled orders. We anticipate that, under existing conditions, the coming year will be profitable. We very much appreciate the cooperation of our stockholders during the difficult years of reorgani- zation and adjustment which we believe have now been completed. It is with deep sorrow that we record the death on June 20, 1964 of Mr. Edmund Rigby, our Executive Vice President, Treasurer and Director. Mr. Rigby had been with this corporation for forty-eight years, and is greatly missed by his colleagues and his many friends throughout the industry. MALCOLM G. CHACE, JR. SEABURY STANTON Chairman of the Board President 3

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BERKSHIRE REVIEW OF EARNINGS AND SALES Earnings for the fiscal year ended October 3, 1964 were $175,586, after depreciation of $1,101,147. This compares with a loss of $684,811 after depreciation of $1,716,613 for the year ended September 28, 1963. Sales volume for the year ended October 3, 1964 was $49,982,830, compared with $50,590,679 for the year ended September 28, 1963. Although operations at King Philip A and King Philip E Divisions were discontinued, the volume of sales remained substantially the same as last year resulting in a reduction of inventories. FINANCIAL DEVELOPMENTS The financial position of the Company continues strong. Net working capital on October 3, 1964 was $14,502,068, or $12.75 per share, compared with $17,410,503, or $10.83 per share on September 28, 1963 on a greater number of shares then outstanding. The greater part of the reduction in working capital was the result of the purchase of 469,602 shares of the Company's capital stock during the fiscal year at a total cost of $5,315,723. The outstanding shares as of October 3, 1964 were 1,137,778, which compares with a total of 1,607,380 shares outstanding on September 28, 1963. Bank loans were reduced from $5,400,000 on September 28, 1963 to $2,500,000 on October 3, 1964. During the fiscal year just ended, expenditures capitalized in connection with machinery and plant facilities amounted to $288,608. Unexpended commitments for plant and equipment at the end of the fiscal year were $287,853. INVENTORIES Inventories on October 3, 1964 amounted to $11,689,145, compared with $18,011,345 on September 28, 1963, or a decrease of $6,322,200 the greater part of which was due to the reduction in the number of our operating units. EMPLOYEE RELATIONS Wage increases were granted throughout the textile industry in the latter part of 1963 and went into effect in our plants on April 15, 1964. Under the terms of our contracts with the

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HATHAWAY INC. OPERATIONS unions representing our employees, these contracts may be reopened for wage negotiations upon request of either party sixty days prior to April 15, 1965. MERCHANDISING TRENDS During the fiscal year, Congress passed legislation enabling American textile mills to purchase American cotton at the same Government established price at which it is sold to foreign countries. The market for cotton fabrics was substantially strengthened after passage of this cotton bill. PLANTS AND EQUIPMENT King Philip A and King Philip E Divisions continued to operate at a loss after the end of fiscal year ended September 28, 1963 and, as a result, the directors voted to discontinue these operations. The buildings and most of the machinery in King Philip A Division have been sold and we are in the process of liquidating the physical assets at King Philip E Division. The King Philip B warehouse was sold after the close of the 1964 fiscal year. On October 3, 1964 approximately $753,000 remained in the reserve established last year to cover possible losses in the disposal of the remaining physical assets of King Philip A Division. During the fiscal year an additional $3,000,000 was charged against surplus and added to this reserve to cover possible losses in the liquidation of King Philip E Division. The remainder of the reserve represents the amounts previously established to cover possible losses in the liquidation of other divisions shut down in prior years. OPERATIONS The Company maintains four operating divisions — the King Philip D Division in Warren, Rhode Island, and the Hathaway Synthetic, Box Loom, and Home Fabrics Divisions in New Bedford, Massachusetts. 5

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BERKSHIRE CONSOLIDATED — ASSETS- October September 3, 1964 28, 1963 CURRENT ASSETS: Cash $ 920,089 $ 660,264 Accounts receivable (less allowance for doubtful accounts — 1964 — $245,354) 7,450,564 7,670,236 Inventories (Note A) . 11,689,145 18,011,345 Prepaid insurance, taxes and other expense 190,563 237,374 TOTAL CURRENT ASSETS 20,250,361 26,579,219 PROPERTIES, PLANTS AND EQUIPMENT (Note B): Properties comprising land, buildings, machinery and equipment. 33,635,553 37,865,723 Less accumulated depreciation and amortization 21,853,689 23,035,741 11,781,864 14,829,982 Less estimated loss on properties to be sold 4,210,621 2,005,029 7,571,243 12,824,953 MORTGAGE NOTES RECEIVABLE AND OTHER ASSETS 65,442 43,434 TOTAL ASSETS $27,887,046 $39,447,606 See accompanying notes 6

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HATHAWAY INC. BALANCE SHEET -LIABILITIES AND STOCKHOLDERS' EQUITY. October 3, 1964 September 28, 1963 CURRENT LIABILITIES: Notes payable - banks $ 2,500,000 $ 5,400,000 Accounts payable. 2,096,726 2,415,395 Accrued wages and salaries 294,764 398,660 Accrued state and local taxes 365,112 407,106 Social security and withholding taxes payable 491,691 547,555 TOTAL CURRENT LIABILITIES 5,748,293 9,168,716 STOCKHOLDERS' EQUITY: Common stock ($5 par value) authorized 2,312,816 shares — issued 1,607,380 shares 8,036,900 8,036,900 Retained earnings. 19,417,576 22,241,990 27,454,476 30,278,890 Less common stock in treasury at cost —

• 469,602 shares

5,315,723 -0- 22,138,753 30,278,890 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $27,887,046 $39,447,606 to financial statements. 7

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BERKSHIRE HATHAWAY INC. CONSOLIDATED STATEMENT OF EARNINGS Years Ended October September 3, 1964 28, 1963 SALES $49,982,830 $50,590,679 Cost of sales, administrative and selling expenses 48,354,012 49,418,947 Depreciation 1,101,147 1,716,613 49,455,159 51,135,560 OPERATING PROFIT (LOSS) 527,671 (544,881) Other income 111,849 307,140 639,520 (237,741) Other deductions . 237,909 309,733 NET EARNINGS (LOSS) BEFORE IDLE PLANT EXPENSE 401,611 (547,474) Idle plant expense. 226,025 137,337 NET EARNINGS (LOSS) . $ 175,586 $ (684,811) CONSOLIDATED STATEMENT OF RETAINED EARNINGS BALANCE AT BEGINNING OF YEAR. $22,241,990 $26,018,710 Net earnings (loss) for the year. 175,586 (684,811) Retirement of treasury stock 0- (1,591,909) Estimated loss on properties to be sold (3,000,000) (1,500,000) BALANCE AT END OF YEAR $19,417,576 $22,241,990 See accompanying notes to financial statements. 8

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BERKSHIRE HATHAWAY INC. Notes to Consolidated Financial Statements October 3, 1964 Basis of Consolidation The consolidated financial statements include the accounts of the Canadian subsidiary. Note A - Inventories Raw materials, including materials in process, are priced at the lower of cost or market, except for the cotton content of stock in process of Berkshire King Philip D Division which is priced at a standard established in 1933, which is less than the current market. Current standard costs are used in valuing labor and manufacturing burden in stock in process. Cloth is priced at the lower of cost or market. All costs were determined generally on an average basis. The inventory of the subsidiary is priced at the lower of cost or market on a first-in, first-out basis. Note B - Properties, Plants and Equipment The properties, plants and equipment at October 3, 1964 and September 28, 1963 are stated at net book values of $7,571,243 and $12,824,953, respectively. The net values used for federal income tax purposes were $12,700,092 and $15,918,135, respectively. Consistent with the practice of prior years, depreciation has been charged to operations on the book basis. The estimated loss on properties to be sold reduces the net book value of these assets to estimated realizable amount. Note C - Taxes on Income Federal income tax returns of the Company have been examined through the fiscal year ended September 30, 1957. The statute of limitations has expired on fiscal years ended in 1958, 1959, and 1960. The Company has unused federal income tax loss carry-overs of approximately $5,000,000. To the extent not utilized $400,000 will expire at September 30, 1966 and $4,600,000 in the succeeding years. Note D - Contingent Liabilities and Commitments The Company made contributions to the trustees for the pension plans based upon payment of normal costs. The Company is contingently liable for approximately $111,000 under the union contract of certain employees who have reached the retirement age specified with a minimum service of fifteen years and who retire voluntarily. At the close of the fiscal year the Company had outstanding raw material commitments at prices not in excess of market. Plant improvement commitments were $287,853.

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BERKSHIRE HATHAWAY INC. C UNTANTS' REPORT PEAT, MARWICK, MITCHELL & Co. (COMBINING COMERY, DAVISON & CoMpaNy) CERTIFIED PUBLIC ACCOUNTANTS PROVIDENCE, RHODE ISLAND 02903 10 DORRANCE STREET To the Stockholders and Board of Directors Berkshire Hathaway Inc. We have examined the consolidated balance sheet of Berkshire Hathaway Inc. and its subsidiary as of October 3, 1964 and the related consolidated statements of earnings and retained earnings for the year then ended. Our examination was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. In our opinion, the accompanying consolidated balance sheet and consolidated statements of earnings and retained earnings present fairly the financial position of Berkshire Hathaway Inc. at October 3, 1964, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. Providence, R. I. Peat, marwick, mitchen o November 3, 1964 10

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BERKSHIRE HATHAWAY INc. COMP R A TIVE FINANCIAL DATA FISCAL YEARS - 1964 1963 1962 1961 1960 Sales . $49,982,830 $50,590,679 $53,259,302 $47,722,281 $62,608,679 Net earnings (loss) 175,586 (684,811) (2,151,256) (393,054) 4,623,980 Earnings (loss) per share of common stock .15 (.43) (1.34) (.24) 2.84 Cash dividends paid -0- -0- 160,738 1,205,535 1,715,323 Cash dividends paid per share -0- -0- .10 .75 .95 Additions to properties, plants and equipment 288,608 665,813 3,454,069 4,020,542 3,818,632 Working capital 14,502,068 17,410,503 16,473,783 19,844,122 23,430,319 Working capital per share . 12.75 10.83 10.25 12.35 14.41 Stockholders' equity 22,138,753 30,278,890 32,463, 701 36,175,695 37,981,820 Stockholders' equity per share 19.46 18.84 20.20 22.51 23.37 Common shares outstanding 1,137,778 1,607,380 1,607,380 1,607,380 1,625,519 NOTE: "Common shares outstanding" represents the total shares outstanding at the close of each fiscal year. 11

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BERKSHIRE HATHAWAY INC. EXECUTIVE OFFICES 97 Cove Street, New Bedford, Mass. 02741 SALES OFFICES PLAIN & FANCY GREY GOODS HATHAWAY MENSWEAR LININGS 111 West 40th Street, New York, N. Y. 1290 Avenue of the Americas, New York, N. Y. HOME FABRICS 261 Fifth Avenue, New York, N. Y. 3028 East 11th Street, Los Angeles, Calif. 100 Wellington Street, West, Toronto, Canada PLANT LOCATIONS Hathaway Box Loom Div., New Bedford, Mass. Home Fabrics Div., New Bedford, Mass. Hathaway Synthetic Div., New Bedford, Mass. King Philip D Div., Warren, R. I. LABORATORY New Bedford, Mass. TRANSFER AGENT REGISTRAR OLD COLONY TRUST COMPANY THE FIRST NATIONAL BANK OF BOSTON 45 Milk Street 45 Milk Street Boston, Mass. Boston, Mass. AUDITORS COUNSEL PEAT, MARWICK, MITCHELL & Co. RoPES & GRAY Providence, R. I. Boston, Mass. 12

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BERKSHIRE HATHAWAY INC. PRINTED U.S.A