1965 年伯克希尔完整年报

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CLEVELAND PUBLIC LIBRAR CORPORATION FILE BUSINESS INF. BUR. BH BERKSHIRE HATHAWAY ING. Annual Report TO THE STOCKHOLDERS 1965

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BERKSHIRE HATHAWAY INC. The Company had 3,141 Stockholders on October 2, 1965 DIRECTORS MALcOLM G. CHACE, JR., Chairman WARREN E. BUFFETT BRADFORD R. FROST JONATHAN CHACE ARTHUR INGRAHAM, JR. KENNETH V. CHACE STANLEY RUBIN DANIEL CoWIN OTIS C. STANTON LINSLEY V. DODGE A. N. WINSLOW, JR. OFFICERS KENNETH V. CHAcE, President HAROLD V. Banks, Treasurer and Clerk STANLEY RUBIN, Vice President RICHARD BOWEN, Vice President JoHN E. HARTLEY, Vice President

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BERKSHIRE HATHAWAY INC. FINANCIAL HIGHLIGHTS For Fiscal Years 1965 and 1964 October 2, 1965 October 3, 1964 Sales $49,300,685 $49,982,830 Net earnings before charge equivalent to Federal income taxes 4,319,206 175,586 Charge equivalent to Federal income taxes (see Note C to Financial Statements) 2,040,000 50,000 Net earnings 2,279,206 125,586 Net earnings per share 2.24 .11 Depreciation 862,424 1,101,147 Additions to properties, plants and equipment $ 811,812 $ 288,608 Cash $ 775,504 $ 920,089 Marketable securities and certificates of deposit 2,900,000 -0- Notes payable - banks 2,500,000 Accounts receivable (net) 7,422,726 7,450,565 Inventories 10,277,178 11,689,145 Working capital 17,869,526 14,502,068 Working capital per share 17.56 12.75 Stockholders' equity 24,520,114 22,138,753 Stockholders' equity per share 24.10 19.46 Payroll $11,618,517 $13,135, 731 Shares outstanding at end of year 1,017,547 1,137,778 2

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BERKSHIRE HATHAWAY INC. ANNUAL REPORT For the Year Ended October 2, 1965 November 9, 1965 BERKSHIRE HATHAWAY INC.: TO THE STOCKHOLDERS OF The fiscal year ended October 2, 1965 resulted in net earnings of $2,279,206 as compared to net earnings of $125,586 for the prior year. These net earnings do not reflect any nonrecurring losses incurred on the disposal of assets due to the permanent closing of the King Philip Plants A and E in Fall River, Massachusetts, as such losses have been charged to a reserve previously established for such purpose. to either of these years; however, to prevent any misleading interpretation of future earnings when loss Because of loss carryovers, no federal income taxes were payable by the Corporation with respect carryovers shall not be available, the Corporation has included in computing net earnings for 1965 and 1964 a charge substantially equal to the federal income taxes that would have been payable with respect to results of operations during each of these years. Hathaway Synthetic, Box Loom and Home Fabrics Divisions in New Bedford, Massachusetts. The Corporation is continuing to operate King Philip Plant D in Warren, Rhode Island, and the During 1965 raw material, stock in process and cloth inventories were decreased by $1,411,967 and bank loans of $2,500,000 were paid off. Also, during the year the Corporation purchased 120,231 of its own shares, leaving a total of 1,017,547 shares outstanding at the end of the fiscal year. Approximately $811,812 was invested by the Corporation during the year in the purchase of new ma- The Corporation made a substantial reduction in its overhead costs during the fiscal year just ended. the current fiscal year. chinery in a continuing effort to reduce costs and to improve quality. This program will continue during A major portion of the machinery at King Philip Plant E Division has been sold. We expect to dation of our unprofitable plants. The proposed sale of the King Philip E Division will make it necessary dispose of the remaining portion of this plant during the current fiscal year. This will complete the liqui- to provide storage for raw cotton and grey cloth for the King Philip D Division at the Hathaway Di- vision Plant C (former Langshaw Mill). Plans are under way to accomplish this within the current fiscal year. After more than fifty years of service, Mr. Seabury Stanton resigned as a director and as President, and Mr. Kenneth V. Chace was elected to succeed him. At the same time, Mr. John K. Stanton resigned as a director and as Treasurer and Clerk. Mr. Harold V. Banks was elected to succeed him as Treasurer and Clerk. anticipate that operations for the coming year will continue to be profitable. All divisions of the Corporation currently have substantial backlogs of unfilled orders and we presently efforts have helped to make this year successful. We wish to express our thanks to all the employees of the Corporation whose loyal cooperation and MALCOLM G. CHACE, JR. Chairman of the Board KENNETH V. CHACE President 3

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BERKSHIRE REVIEW OF EARNINGS AND SALES Earnings for the fiscal year ended October 2, 1965 were $2,279,206 after depreciation of $862,424. This compares with earnings of $125,586 for the year ended October 3, 1964, after depreciation of $1,101,147. Sales volume for the year ended October 2, 1965 was $49,300,685, compared with $49,982,830 for the year ended October 3, 1964. FINANCIAL DEVELOPMENTS The financial position of the Company continues strong. Networking capital on October 2, 1965 was $17,869,526, or $17.56 per share, compared with $14,502,068, or $12.75 per share on October 3, 1964 on the shares then outstanding. During the year, the Corporation purchased 120,231 of its shares, leaving a total of 1,017,547 shares outstanding. Bank loans of $2,500,000 were paid off during the fiscal year. INVENTORIES Inventories on October 2, 1965 amounted to $10,277,178 compared to $11,689,145 on October 3, 1964, or a decrease of $1,411,967. EMPLOYEE RELATIONS As a result of contract negotiations, we, along with the rest of the New England cotton textile industry, granted a general wage increase in April 1965. Our present contract with the Union expires April 15, 1966.

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HATHAWAY INC. OPERATIONS MERCHANDISING TRENDS During the fiscal year, Congress passed legislation which provides for the extension of one-price cotton through July 31, 1970, which will enable American textile mills to continue to purchase American cotton at the same Government established price at which it is sold to foreign countries. We have had a substantial increase in sales in our Home Fabrics Division and look forward to continued growth in this area of our business. PLANTS AND EQUIPMENT A large part of the machinery at King Philip E Division has been sold. It is expected that the remaining portion of this plant will be disposed of during the current fiscal year. This will complete the program of liquidating unprofitable plants. The Hathaway Division Plant C (former Langshaw Mill) is being prepared to provide storage for raw cotton and grey cloth for the King Philip D Division. This material is presently being stored at the King Philip E Division. Because of a reappraisal of machinery listed for sale, we have increased the reserve for losses on sale of plant assets by $300,000. OPERATIONS The Company maintains four operating divisions - 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 OCTOBER with comparative

• ASSETS -

1965 1964 CURRENT ASSETS: Cash $ 775,504 $ 920,089 Marketable securities (including $2,600,000 of short term certifi- cates of deposit), at cost, approximate market. 2,900,000 Accounts receivable (less allowance for doubtful accounts — 1965 - $280,302) 7,422,726 7,450,564 Inventories (Note A) . . 10,277,178 11,689,145 Prepaid insurance, taxes and other expense 196,391 190,563 TOTAL CURRENT ASSETS 21,571,799 20,250,361 PROPERTIES, PLANTS AND EQUIPMENT (Note B): Properties comprising land, buildings, machinery and equipment. 28,019,742 33,635,553 Less accumulated depreciation and amortization 19,593,163 21,853,689 8,426,579 11,781,864 Less estimated loss on properties to be sold 1,809,132 4,210,621 6,617,447 7,571,243 MORTGAGE NOTES RECEIVABLE AND OTHER ASSETS 33,141 65,442 TOTAL ASSETS $28,222,387 $27,887,046 See accompanying notes 6

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HATHAWAY INC. BALANCE SHEET 2, 1965 figures for 1964 -LIABILITIES AND STOCKHOLDERS' EQUITY- 1965 1964 CURRENT LIABILITIES: Notes payable - banks $ 2,500,000 Accounts payable 2,581,585 2,096,726 Accrued wages and salaries 296,256 294,764 Accrued state and local taxes 441,951 365,112 Social security and withholding taxes payable 382,481 491,691 TOTAL CURRENT LIABILITIES 3,702,273 5,748,293 STOCKHOLDERS' EQUITY: Common stock ($5 par value) authorized 1,843,214 shares — issued 1,137,778 shares (Note E) 5,688,890 8,036,900 Retained earnings. 20,469,068 19,417,576 26,157,958 27,454,476 Less common stock in treasury at cost - 120,231 shares (Note E) 1,637,844 5,315,723 24,520,114 22,138,753 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $28,222,387 $27,887,046 to financial statements. 7

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BERKSHIRE HATHAWAY INC. CONSOLIDATED STATEMENT OF EARNINGS YEAR ENDED OCTOBER 2, 1965 with comparative figures for 1964 1965 1964 NET SALES $49,300,685 $49,982,830 Cost of sales. 42,478,984 47,382,337 Gross profit 6,821,701 2,600,493 Selling, general and administrative expenses 2,135,038 2,072,822 OPERATING INCOME • • 4,686,663 527,671 Other deductions, net . 127,348 126,060 Idle plant expense . 240,109 226,025 367,457 352,085 EARNINGS BEFORE CHARGE EQUIVALENT TO FEDERAL INCOME TAXES. 4,319,206 175,586 Charge equivalent to Federal income taxes (Note C) 2,040,000 50,000 NET EARNINGS $ 2,279,206 S 125,586 Depreciation and amortization 862,424 $ 1,101,147 CONSOLIDATED STATEMENT OF RETAINED EARNINGS BALANCE AT BEGINNING OF YEAR . . . $19,417,576 $22,241,990 Net earnings for the year. 2,279,206 125,586 Credit resulting from charge equivalent to Federal income taxes (Note C) 2,040,000 50,000 Retirement of treasury stock (Note E) • (2,967,714) -0 Estimated loss on properties to be sold . (300,000) (3,000,000) BALANCE AT END OF YEAR. • $20,469,068 $19,417,576 See accompanying notes to financial statements. 8

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BERKSHIRE HATHAWAY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS October 2, 1965 Basis of Consolidation The consolidated financial statements include the accounts of the Canadian subsidiary. Note A - Inventories of stock in process of King Philip D Division which is priced at a standard established in 1933, which is less than the Raw materials, including materials in process, are priced at the lower of cost or market, except for the cotton content 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 and $7,571,243, respectively. The net values used for Federal income tax purposes were $9,185,584 and $12,700,092, The properties, plants and equipment at October 2, 1965 and October 3, 1964 are stated at net book values of $6,617,447 The estimated loss on properties to be sold reduces the net book value of these assets to estimated realizable amount. respectively. Consistent with the practice of prior years, depreciation has been charged to operations on the book basis. Note C - Taxes on Income because of operating loss carryovers and losses on plant assets. These latter losses were charged against a reserve No Federal tax is payable with respect to the net earnings for the years ended October 2, 1965 and October 3, 1964 set up by charges against retained earnings. However, to prevent a misleading interpretation of future earnings after in these years had these losses not been available, has been reflected in the consolidated statement of earnings, and these losses have been fully utilized, a charge equivalent to the Federal income tax which would have been payable earnings in both years. The 1964 figures have been revised to reflect the tax savings from these losses on a comparable the amount of tax savings due to these losses has been reflected as a credit in the consolidated statement of retained amounted to $3,450,000. basis with the current year. The unused carryover losses available to be offset against future earnings at October 2, 1965 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 through 1961. Note D - Contingent Liabilities and Commitments normal costs plus amortizing the deficiency for past services. The Company has made or provided for contributions to the trustees for the pension plans based upon payment of have reached the retirement age specified, with a minimum service of fifteen years and who retire voluntarily. The Company is contingently liable for approximately $147,000 under the union contract of certain employees who market. Plant improvement commitments were $280,000. At the close of the fiscal year the Company had outstanding raw material commitments at prices not in excess of Note E - Corporate Changes At the annual meeting of stockholders held December 1, 1964, it was voted that the authorized capital stock of this held in the treasury at October 3, 1964 and that the excess of cost over par value of retired shares be charged to Corporation be reduced to 1,843,214 shares of $5 par value common stock by cancelling and retiring the 469,602 shares retained earnings.

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BERKSHIRE HATHAWAY INC. ACCOUNTANTS' REPORT PEAT, MARWICK, MITCHELL & Co. COMBINING COMERY, DAVISON & CoMpaNy) CERTIFIED PUBLIC ACCOUNTANTS 10 DORRANCE STREET PROVIDENCE, RHODE ISLAND 02903 The Board of Directors and Stockholders Berkshire Hathaway Inc.: We have examined the consolidated balance sheet of Berkshire Hathaway Inc. and its subsidiary as of October 2, 1965 and the related 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 2, 1965, 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, restated as explained in Note C of notes to consolidated financial statements. October 28, 1965 Da, Marmicke mitchello. 10

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BERKSHIRE HATHAWAY INC. COMPARATIVE FINANCIAL DATA FISCAL YEARS - 1965 1964 1963 1962 1961 Sales $49,300,685 849,982,830 $50,590,679 $53,259,302 $47,722,281 Net earnings (loss) before charge (credit) equivalent to Federal in- come taxes 4,319,206 175,586 (684,811) (2,151,256) (393,054) Charge (credit) equivalent to Federal income taxes 2,040,000 50,000 (280,000)(1,140,000) (240,000) Net earnings (loss) 2,279,206 125,586 (404,811) (1,011,256) (153,054) Net earnings (loss) per share of com- mon stock outstanding 2.24 (.25) (.63) (.09) Cash dividends paid -0- -0- -0- 160,738 1,205,535 Cash dividends paid per share -0- -0- -0- .10 .75 Additions to properties, plants, and equipment 811,812 288,608 665,813 3,454,069 4,020,542 Working capital 17,869,526 14,502,068 17,410,503 16,473,783 19,844,122 Working capital per share 17.56 12.75 10.83 10.25 12.35 Stockholders' equity 24,520,114 22,138,753 30,278,890 32,463,701 36,175,695 Stockholders' equity per share 24.10 19.46 18.84 20.20 22.51 Common shares outstanding. 1,017,547 1,137,778 1,607,380 1,607,380 1,607,380 NOTES: Net earnings (loss) and earnings (loss) per share of common stock for fiscal years ended in 1961 through 1964 have been restated to give effect to charge (credit) equivalent to Federal income taxes. See Note C to Financial Statements. "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 I1l West 40th Street, New York, N. Y. 10018 1290 Avenue of the Americas, New York, N. Y. 10019 HOME FABRICS 261 Fifth Avenue, New York, N. Y. 10016 1311 Merchandise Mart Plaza, Chicago, III. 60654 3028 East 11th Street, Los Angeles, Calif. 90023 100 Wellington Street West, Toronto 1, Ontario, 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. 02106 Boston, Mass. 02106 AUDITORS COUNSEL PEAT, MARWICK, MITCHELL. & Co. ROPES & GRAY Providence, R. I. 02903 Boston, Mass. 02110 12

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BERKSHIRE HATHAWAY INC.