1966 年伯克希尔完整年报

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CLEVELAND PUBLIC LIBRARS CORPORATION FILE BÜSINCS: INF. BUR. Bff BERKSHIRE HATHAWAY INC. Annual Report TO THE STOCKHOLDERS 1966

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BERKSHIRE HATHAWAY INC. COMPARATIVE HIGHLIGHTS Fiscal Year Ended October 1, 1966 and Five Preceding Fiscal Years (000 Omitted) Fiscal Years 1966 1965 1964 1963 1962 1961 Net Sales $ 49,372 $ 49,301 49,983 $ 50,591 $ 53,259 $ 47,722 Net earnings (loss)* 2,763 2,279 176 (685) (2,151) (393) Dollars per share** 2.71 2.24 .15 (43) (1.34) (.24) Depreciation and Amortization 963 862 1,101 1,717 1,905 2,129 Additions to properties, plants, and equipment. 970 812 289 666 3,454 4,021 Working capital at year end 23,158 17,870 14,502 17,411 16,474 19,844 Stockholders' equity at year end. 29,495 24,520 22,139 30,279 32,464 36,176 Dollars per share** 28.99 24.10 19.46 18.84 20.20 22.51 Shares outstanding at year end 1,017,547 1,017,547 1,137,778 1,607,380 1,607,380 1,607,380 *As reported in annual reports for the applicable years. **Based on number of shares outstanding at year end.

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BERKSHIRE HATHAWAY INC. December 2, 1966 TO THE STOCKHOLDERS OF BERKSHIRE HATHAWAY INC.: For your information, we have highlighted the financial information for fiscal 1966 in comparison with the five preceding years on the facing page. In this letter we will discuss in some detail the following areas:

1. Operating Conditions - 1966
2. Survey of Operations 1961-1966
3. Maintenance of Financial Condition
4. Dividends

OPERATING CONDITIONS - 1966 Sales in the product mix. Although total sales of $49.4 million were very close to last year's, there were significant changes The Synthetic Division sales dropped in dollar volume, but this was offset by a corresponding increase in Home Fabrics sales. The Box Loom Division sales showed some gain, but this was offset by a drop in sales of our King Philip D Division. of yarn dyed goods plus a change in styling trends caused loss of sales and depressed prices in our Box The sales picture for the last half of 1966 was one of generally depressed markets. Heavy imports Loom Division. Overproduction of acetate fabrics plus importation of nylon fabrics brought more looms into competition with us in our Synthetic Division. The combination of imports and increased domestic cause looms to swing back on to cotton goods and thereby adversely affect our sales position on lawns production depressed prices of plain polyester/cotton blends. We estimate that this development will woven at King Philip D Division. The negative factors, which prevailed in the last quarter of our 1966 fiscal year, contributed to our decision to avoid inventory buildup by shutting down the Box Loom and Synthetic Divisions in New to a more active level, further cutbacks in production may be necessary to avoid inventory buildup. Bedford for the week of October 9, 1966. Inasmuch as the textile market has not, at this writing, shifted New Products The growth of our Home Fabrics Division over the past few years is, in large part, due to our develop- ment of both new products and new application of old products. In the past year, we have increased our expenditures for development so as to provide fabrics that will yield more stable prices and volumes. Labor years ending April 15, 1969. This contract covers wages and benefits with no reopening clause. In early 1966, we signed a contract with the Textile Workers Union of America AFL-CIO for three Plant and Equipment to lower costs, improve quality, and increase our manufacturing flexibility. We have spent approximately $970,000 for purchase and installation of new equipment in order During fiscal 1966, we disposed of the remainder of our unused property.

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Income Tax Payments therefore will incur income tax liability with respect to future earnings. All but a small portion of our tax carryforward has been used as of the end of fiscal 1966. We SURVEY OF OPERATIONS OCTOBER 1, 1960 - OCTOBER 1, 1966 As one might expect, in a business as highly cyclical as the textile business, the past decade for Berkshire Hathaway has been a recurring story of a period of earnings followed by a period of relatively heavy losses. The past year has been a significant one in this history because, not only was 1966 a year of profitable operations, but, also, it witnessed the restoration of our financial strength to the level that existed at the end of 1960. You will recall that the heavy losses of the years 1957 and 1958 had not yet been fully recouped by the profitable operations of the years 1959 and 1960, when our business was again hit with a three-year period of loss operations. Not only did our financial condition in these years suffer from the inroads created by these losses, but it also had to absorb the impact of our heavy capital expenditure program of the early 1960s. The following table summarizes the change in the net worth position of Berkshire Hathaway, Ine. during the past six years: Net Worth October 1, 1960 $37,981,820 Net Earnings 1961-1966 (after reflecting $6,200,000 losses on disposal of fixed assets) $ 40,476 Less Dividends Paid 1961-1966 1,366,273 Excess of Dividends over Net Earnings 1961-1966 1,325,797 36.656,023 Repurchases of a total of 607,972 shares of Capital Stock 1961-1966 7,161,103 Net Worth October 1, 1966 $29,494,920 You will note that while dividends exceeded net earnings during this six-year period, the major reason for the 22% decrease in net worth has been the repurchase by the Company of its own stock, pursuant to a program whereby the Company's outstanding shares have been reduced to 1,017,547 shares — a 37% reduction compared with the shares outstanding on October 1, 1960. This decrease in outstanding shares has been appropriate, considering the reduction in scale of the Company's operations due to closing of unprofitable mills. The benefit to the present stockholders of this program of share repurchases is indicated, in part, by the fact that net worth per share of the Company's outstanding common stock on October 1, 1966 was $28.99, compared with $23.37 six years previously. In the year ended October 1, 1960, our sales totaled $62.6 million, whereas in 1966, they totaled $49.4 million, a decrease of approximately 21%. This corresponds to the 22% decrease in total net worth. The fact that the Company is now achieving approximately the same net worth turnover as existed at the beginning of this six-year period is again some indication of the restoration of its strength. MAINTENANCE OF FINANCIAL CONDITION It has always been among the goals of Berkshire Hathaway to maintain a strong financial condition. Indeed, it has been this practice that has enabled the Company to survive in the light of the highly cyclical nature of its business. The present strength of the Company's financial condition is demonstrated by its $23,158,187 of working capital at October 1, 1966. This figure is about equal to the Company's working capital on October 1, 1960 although on a per share basis, because of the reduction in the number of shares through repurchasing, our working capital is now $22.76 compared with $14.41 six years ago. 2

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In addition to the cyclical nature of our business, there are other reasons why a strong financial condition is advisable. As you have been advised previously, the Company has been searching for suitable acquisitions within, and conceivably without, the textile field. Although to date none has been success- money market, in which funds are virtually unobtainable for acquisition purposes, makes it imperative fully concluded, we continue to have an active interest in such acquisitions. The present state of the that we have available the liquid assets with which to consummate such acquisitions, should the hoped-for opportunities present themselves. Present uncertainties such as war, tax rates and decreased level of business activity also all combine to emphasize the continuing need for a strong financial condition. A second area in which substantial investment may be necessary is our fast-growing Home Fabrics Division. Home Fabrics' sales have nearly doubled in the past three years. Should a corresponding increase be attained in the coming years, we may be called upon to invest up to $7 million in additional inventory and receivables. of $24.4 million ($6.3 million after accrued depreciation) in plant and equipment. This is an investment Finally, the threat of technological change is ever present in the textile field. We have an investment which the textile machinery industry is constantly striving to render obsolete. An important change at any level of our manufacturing process could require major capital expenditures at tomorrow's replace- ment prices. We shall continue to weigh most carefully the possible rewards and risks of any capital expenditure program. However, should we decide that it is in our best interests to make capital expendi- necessary if the advent of important cost-cutting equipment coincided with a period of depressed textile tures, we must be in a financial position to do so. Sufficient working capital would be particularly earnings, making outside capital difficult or impossible to obtain. It is these considerations which caused the Company at year end to include in its working capital $5.4 million of marketable securities, composed of short-term municipal bonds, commercial paper and common stock. Because of the uncertainties in knowing when the Company may be called upon to produce substantial sums of cash, and the possibility that this might not occur for a considerable period of our capital as we are on the other funds that are at the time invested in plant, inventories, receivables, of time, your directors have felt that we should be as zealous to achieve a realistic return on this portion etc. Accordingly, it is the present intention of the directors to proceed toward the interim investment of a major portion of these funds in marketable common stocks. This should hold promise not only of greater income than can be achieved through alternative investment possibilities in the field of non- equity marketable securities, but also provides us with the opportunity to participate in earnings derived outside of our textile business, even if only temporarily and indirectly. DIVIDENDS distribution to our stockholders of a reasonable proportion of current after-tax earnings. Such a policy, This restoration of the Company's financial position now permits a dividend policy reflecting the however, must be consistent with the need for preserving the strength of our present financial position. To implement this policy, a dividend of 10¢ per share was declared on November 14, 1966, payable January 3, 1967 to stockholders of record on December 2, 1966. MALCOLM G. CHACE, JR. KENNETH V. CHACE Chairman of the Board President 3

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BERKSHIRE CONSOLIDATED OCTOBE with comparativ

• ASSETS—

1966 1965 CURRENT ASSETS: Cash $ 628,721 775,504 Marketable securities, at cost, which approximates market 5,445,795 2,900,000 Accounts receivable (less allowance for doubtful accounts — 1966 — $299,433; 1965 — $280,302) 8,114,240 7,422,726 Inventories (Note A) 12,239,261 10,277,178 Prepaid expenses 131,428 196,391 TOTAL CURRENT ASSETS 26,559,445 21,571,799 PROPERTIES, PLANTS AND EQUIPMENT: Properties comprising land, buildings, machinery and equipment. 24,426,192 28,019,742 Less accumulated depreciation and amortization 18,119,666 19,593,163 6,306,526 8,426,579 Less estimated loss on properties to be sold (Note B) -0- 1,809,132 NET PROPERTIES, PLANTS AND EQUIPMENT 6,306,526 6,617,447 OTHER ASSETS. 30,207 33,141 $32,896,178 28,222,387 4 See accompanying note.

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HATHAWAY INC. BALANCE SHEET 1, 1966 e figures for 1965 -LIABILITIES AND STOCKHOLDERS' EQUITY 1966 1965 CURRENT LIABILITIES: Accounts payable $ 2,700,113 2,581,585 Accrued wages and salaries. 278,599 296,256 Accrued state and local taxes 165,094 441,951 Social security and withholding taxes payable 257,452 382,481 TOTAL CURRENT LIABILITIES 3,401,258 3,702,273 STOCKHOLDERS' EQUITY: Common stock, $5 par value, Authorized 1,722,983 shares; issued 1,017,547 shares (Note F) 5,087,735 5,688,890 Retained earnings 24,407,185 20,469,068 29,494,920 26,157,958 Less common stock in treasury (Nole F) 1,637,844 TOTAL STOCKHOLDERS' EQUITY 29,494,920 24,520,114 $32,896,178 28,222,387 to financial statements. 5

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BERKSHIRE HATHAWAY INC. CONSOLIDATED STATEMENT OF EARNINGS AND RETAINED EARNINGS with comparative figures for 1965 YEAR ENDED OCTOBER 1, 1966 1966 1965 NET SALES $49,372,328 49,300,685 Cost of sales 42,195,572 42,478,981 Gross profit 7,176,756 6,821,701 Selling, general and administrative expenses 2,328,142 2,425,038 OPERATING INCOME 4,848,614 4,396,663 Other income, net . . 253,589 162,652 Idle plant expense . . . (97,689) (240,109) EARNINGS BEFORE PROVISION FOR FEDERAL AND FOREIGN INCOME TAXES 5,004,514 4,319,206 Provision for Federal and foreign income taxes (Note C) 2,242,000 2,040,000 NET EARNINGS 2,762,514 2,279,206 Retained earnings at beginning of year. . 20,469,068 19,417,576 Reduction in Federal and foreign income taxes (Note D) 2,212,292 2,040,000 Retirement of treasury stock (Note F) . . (1,036,689) (2,967,714) Estimated loss on properties to be sold . . (300,000) RETAINED EARNINGS AT END OF YEAR. . $24,407,185 20,469,068 See accompanying notes to financial statements. 6

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BERKSHIRE HATHAWAY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS October 1, 1966 General The consolidated financial statements include the accounts of the Canadian subsidiary. restated to conform to the account classifications in the current year's statements. The comparative figures for 1965 included in the consolidated statement of earnings and retained earnings have been Note A - Inventories synthetic fiber and yarns on a first-in first-out basis; for goods in process and finished goods on a current standard basis, Inventories are priced at the lower of cost or market. Cost for raw cotton is determined on an average basis; for raw with the minor exception of cotton content of in-process materials at King Philip D Division, for which cost represents a standard established in 1933. Note B - Estimated Loss on Properties to be Sold $1,866,037. Of this amount, $56,905 was charged to current operations. $1,809,132 was charged to the estimated Losses on disposal of idle plant and equipment were sustained in the year ended October 1, 1966, amounting to loss provision which existed for this purpose at October 2, 1965. Note C - Income Taxes sustained on disposal of plant assets. The current year net earnings have been reduced for Federal and foreign income No Federal income tax is payable for the year ended October 1, 1966 because of operating loss carryovers and losses taxes computed without regard to losses on disposal of plant assets, and without regard to availability of operating loss carryovers. Note D - Reduction in Federal and Foreign Income Taxes The reduction of Federal and foreign income taxes results from deductions, in computing current taxable income, of prior years' operating loss carryovers, and losses on disposal of plant assets. Note E - Pension Plans No contributions were made during 1966 to the Company's principal pension plan, which is a trusteed, non-contributing ments determined on an actuarial basis. plan. The balance in this fund, accumulated from prior years' contributions, is in excess of minimum funding require- Note F - Corporate Changes At the annual meeting of stockholders held December 7, 1965, it was voted that the authorized capital stock of this held in the treasury at October 2, 1965, and that the excess of cost over par value of retired shares be charged to Corporation be reduced to 1,722,983 shares of $5 par value common stock by canceling and retiring the 120,231 shares retained earnings. 7

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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 1, 1966 and the related statement 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 statement of earnings and retained earnings present fairly the financial position of Berkshire Hathaway Inc. at October 1, 1966 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. October 26, 1966 On Marack mitchello. 8

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BERKSHIRE HATHAWAY INC. EXECUTIVE OFFICES 97 COVE STREET, NEW BEDFORD, MASS. 02741 The Company had 2,666 Stockholders on October 1, 1966 DIRECTORS MALCOLM G. CHACE, JB., Chairman RICHARD BOWEN BRADFORD R. FROST WARREN E. BUFFETT ARTHUR INGRAHAM, JR. KENNETH V. CHACE STANLEY RUBIN DANIEL COWIN WILLIAM SCOTT* LINSLEY V. DODGE A. N. WINSLOW, JR. OFFICERS KENNETH V. CHACE, President J. VERNE McKENZIe*, Treasurer STANLEY RUBIN, Vice President RICHARD BOWEN, Vice President JOHN E. HARTLEY, Vice President *Elected November 14, 1966. The Company had 2,425 Employees on October 1, 1966

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BERKSHIRE HATHAWAY INC. PRINTRO U.S.A