1968 年伯克希尔完整年报

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BUR. CLEVELAND PUBLIC LIBRART BUSINESS INF CORPORATION FILE BERKSHIRE HATHAWAY INC. REPORT TO THE STOCKHOLDERS FOR THE YEAR ENDED DECEMBER 28, 1968

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BERKSHIRE HATHAWAY INc. March 12, 1969 TO THE STOCKHOLDERS OF BERKSHIRE HATHAWAY INC.: Earnings in both textile and insurance operations improved somewhat during 1968. Total operating earnings in relation to stockholders' investment still are not satisfactory, but we are expending every effort to bring them to the proper level. Textile Operations Sales volume increased about 14% with good gains in both Home Fabrics and Menswear Linings. Over the years, these have been our most consistently profitable areas and their improvement in 1968 reflects strong efforts by Richard Bowen in Home Fabrics and Ralph Rigby in Menswear Linings. The Home Fabrics Division in 1969 will utilize new 150 inch Saurer looms, offering opportunities for expanding our style line. We hold options on addi- tional looms, enabling expansion if profitable projections materialize. Our Box Loom Division continued to present severe operating problems, as it has over many years. Our history in this area shows occasional periods of strong prices, regularly followed by heavy imports of goods, severe price cutting and curtailed operations. As a result of a careful survey of the future market for Box Loom greige goods and the investment required to service this market, it was decided to phase out our operation of such greige goods during 1969. After the transitional operating period has been completed and some loss has been sus- tained on the sale of fixed assets, we expect an improved over-all textile operating situation. Insurance Subsidiaries National Indemnity Company and National Fire & Marine Insurance Company con- tinue their splendid operating performance under Jack Ringwalt. Premium volume increased 1

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only slightly in 1968, but more importantly, a good underwriting profit was again produced during a period when the property insurance industry operated at an underwriting loss. Invest- ment income increased substantially in 1968, reflecting both a greater base of assets and higher yields on fixed income securities. Some capital gains again developed from our invest- ments in common stocks. The insurance companies continue to seek new areas for expansion, both at the direct level and possibly in the reinsurance field. The emphasis continues, however, to be on under- writing at a profit rather than volume simply for the sake of size. Due to our policy of retaining all earnings in the insurance subsidiaries, we have substantially augmented their capital funds, increasing our ability to retain greater segments of our originated premium volume. Marketable Securities and Acquisitions During 1968, we sold a portion of our marketable securities portfolio at a profit of approxi- mately $1.5 million after tax. At the end of 1968, we had unrealized market appreciation of $6,400,000 in the balance of the portfolio. Such securities were held in marketable common stocks as a temporary investment, pending the utilization of the funds in acquisition or ex- pansion of operating businesses consistent with our program for the development of greater and more diversified earning power. Immediately after year end, we purchased all of the stock of Sun Newspapers, Inc. and Blacker Printing Company, Inc., which represents an initial entry into the publishing business. This purchase involved only a small portion of our funds available for acquisition. Sun News- papers, Inc. publishes five weekly newspapers in the Omaha, Nebraska area, with paid circula- tion of about 50,000. A related printing business is conducted by Blacker Printing Company, Inc. This purchase, while small, has potential for future expansion. The operations will con- tinue under the able management of Stanford Lipsey. Kenneth V. Chace President 2

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CONSOLIDATED STATEMENT OF EARNINGS Year ended December 28, 1968 with comparative figures for the three months ended December 30, 1967 and the year ended September 30, 1967 ended Year months Three Dec. 28, 1968 Dec. 30, 1967 ended ended Year Sep. 30, 1967 OPERATING INCOME: Net sales of textile products Equity in earnings of unconsolidated subsidiary insurance companies $46,002,417 $11,599,890 $39,055,671 Interest and dividends (notes 5 and 6) 1,789,402 478, 761. 791,938 389,038 46,284 295,687 $48,180,857 $12,124,935 $40,143,296 OPERATING COSTS: Cost of sales, administrative and selling expenses Interest expense $44,435,569 $11,034,748 $38,976,007 Federal income taxes (note 6) . 728,000 362,889 66,238 156,777 199,127 3,200 $45,526,458 $11,300,113 $39,135,984 EARNINGS FROM OPERATIONS. $ 2,654,399 $ 824,822 $ 1,007,312 INVESTMENT GaINs, net of taxes on gains (note 6): Gains realized by unconsolidated insurance subsidiaries (notes 5 and 6) Gains realized by Parent company $ 1,467,752 $ 46,959 706,504 311,453 100,147 Total investment gains 2,174,256 358,412 100,147 Earnings before extraordinary items . . $ 4,828,655 $ 1,183,234 $ 1,107,459 EXTRAORDINARY ITEMS: Loss on liquidation of mill properties, net of $372,000 income tax Reduction in Federal income taxes (note 8) benefit (332,319) 166,000 210,150 (166,319) 210,150 NET EARNINGS 4,662,336 1,393,384 $ 1,107,459 DEPRECIATION AND AMORTIZATION DEDUCTED ABOVE $ 662,061 223,186 979,016 PER SHARE OF OUTSTANDING COMMON STOCK: Earnings from operations $2.69 Investment gains 2.21 $ .84 .36 $1.02 Extraordinary items (.17) .21 .10 NET EARNINGS $4.73 $1.41 $1.12 CONSOLIDATED STATEMENT OF RETAINED EARNINGS Net earnings Retained earnings, beginning . $27,032,370 $25,638,986 $24,633,282 4,662,336 1,393,384 1,107,459 $31,694,706 Less dividends paid $27,032,370 $25,740,741 $ 101,755 Retained earnings, ending . $31,694,706 $27,032,370 $25,638,986 See accompanying notes to financial statements. 3

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BERKSHIRE CONSOLIDATED DECEM with comparative fig — ASSETS - Dee. 28, 1968 Dec. 30, 1967 CURRENT ASSETS: Cash $ 1,605,600 $ 835,301 Marketable securities, at cost (note 2) 5,421,384 3,825,077 Accounts receivable (less allowance for doubtful accounts — 1968 - $281,418; 1967 — $220,966) 7,563,123 7,571,694 Inventories, at the lower of cost (first-in, first-out) or market (note 3) 12,332,943 11,585,598 Prepaid and deferred charges . . 199,501 223,554 TOTAL CURRENT ASSETS • 27,122,551 24,041,224 PROPERTIES, PLANTS AND EQUIPMENT (note 4): Properties comprising land, buildings, machinery and equipment 19,998,693 24,878,601 Less accumulated depreciation and amortization 16,136,069 19,238,314 NET PROPERTIES, PLANTS AND EQUIPMENT 3,862,624 5,640,287 INVESTMENT IN UNCONSOLIDATED SUBSIDIARIES (note 5) 12,754,985 10,259,079 $43,740,160 $39,940,590 See accompanying n 4

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HATHAWAY INC. BALANCE SHEET BER 28, 1968 ures at December 30, 1967

• LIABILITIES AND STOCKHOLDERS' EQUITY -

Dec. 28, 1968 Dec. 30, 1967 CURRENT LIABILITIES: Note payable — bank, unsecured . . 2,000,000 $ 2,000,000 Accounts payable and accrued expenses 4,256,530 5,433,556 Accrued Federal, State, and local taxes (note 6) 637,059 322,799 TOTAL CURRENT LIABILITIES 6,893,589 7,756,355 LONG-TERM DEBT: 72% subordinated debentures (note 7) 641,300 641,300 STOCKHOLDERS' EQUITY: Common stock, $5 par value. Authorized 1,722,983 shares; issued 1,017,547 shares 5,087,735 5,087,735 Retained earnings 31,694,706 27,032,370 36,782,441 32,120,105 Less 32,065 shares of common stock in treasury, at cost 577,170 577,170 TOTAL STOCKHOLDERS' EQUITY : 36,205,271 31,542,935 $43,740,160 $39,940,590 ›tes to financial statements. 5

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BERKSHIRE HATHAWAY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 28, 1968 (1) Basis of Consolidation counts of Berkshire Hathaway The accompanying financial statements consolidate the ac- Year ended Three months non-insurance Canadian subsidiary. Inc. with its wholly-owned Dec. 28, 1968 Dec. 30, 1967 ended Sept. 30, 1967 Year ended National Indemnity Company, over 99% owned by Berk- The accounts of Taxes on income, than investment gains, other shire Hathaway Inc., and National Fire & Marine Insurance of unconsolidated sub- ment of earnings reflects equity of Berkshire Hathaway Inc. Company, 100% owned, are not consolidated. The state- sidiary panies insurance com- Taxes on investment gains $384,248 (29,000) 345,000 functionally independent operations, and the balance sheet in earnings, excluding unrealized investment gains, of these chase in March 1967. valuation is at cost plus equity in such earnings since pur- Taxes on investment gains (parent company) . 575,000 16,000 sidiary insurance com- of unconsolidated sub- (2) Marketable Securities marketable common The market value of the securities portfolio, stocks, was $11,824,000 at December primarily panies 267,984 103,800 33,400 28, 1968 and $7,422,000 at December 30, 1967. (7) 72% Subordinated Debentures February 1 and August 1, and will be due on August Payable Debentures bear interest at the rate of 7½%. (3) Inventories A comparative summary follows: convertible; The debentures are not secured by any lien and are not which includes indebtedness of the Company for money they are subordinated to senior indebtedness Dec. 28, 1968 Dec. 30, 1967 borrowed. be redeemed at 105% through July 31, 1973 and thereafter The debentures may, at the Company's option, Stock in process Raw materials and supplies $ 2,025,230 2,709,075 $ 2,053,503 7,598,638 3,074,160 at 100%. issued requires the Company to provide for the retirement The indenture under which the debentures are $12,332,943 $11,585,598 each of the years 1973 to and including 1986, of one-fifteenth by redemption, through a sinking fund, on August 1, in through the sinking fund shall be at principal amount plus of the total amount of debentures issued. Redemption (4) Properties, Plants and Equipment accrued interest. over the estimated useful lives as allowed by taxing authori- The Company's general policy is to provide for depreciation (8) Reduction in Federal Income Taxes ties. Except for new additions subsequent to 1965 which are ciation is provided on the straight-line basis. depreciated on the double-declining balance method, depre- carryover of investment tax credits from prior periods. For 1968, the reduction in Federal income taxes represents tion of property, plants and equipment is shown below: reduction in Federal income taxes for ended December 30, 1967 was the ellect of net operatin, the three months Dec. 28, 1968 Dec. 30, 1967 loss carryovers to that period. ing loss carryover at December 30, 1967. There was no unused operat Buildings. 106,555 Machinery and equipment Furniture and fixtures and 15,653,974 20,404,047 3,849,278 (9) Pension Plan The Company has a noncontributory pension plan for salaried leasehold improvements 522,326 508,291 independently trusteed fund, the assets of which exceed the Benefits are funded through the medium of an $19,998,693 $24,878,601 current year's pension expense was $47,900 and represents actuarially computed vested and nonvested benefits. Lose a animarated deprecia- $ 3.862.624 16.136.069 19,238,314 normal costs less amortization of the overfunded position $ 5,640,287 (10) Comparative Statements of Earnings (5) Unconsolidated Subsidiaries The Company adopted the single-step method of presenting The combined adjusted equity of unconsolidated insurance figures have been classified accordingly. In addition, realized the statement of earnings in 1968 and the comparative ubsidiaries at December 31, 1968 was $14,677,00 ments, net of applicable income taxes. gure includes $1,523,000 of unrealized appreciation of invest gains of insurance company subsidiaries in the prior periods management's opinion that they are a part of the determi- have been reclassified from extraordinary items to reflect (6) Taxes on Income nation of earnings before extraordinary items. The Company and its subsidiaries file separate income tax insurance companies, and investment gains of the parent Equity in earnings of unconsolidated subsidiary (11) Commitments purpose of acquiring certain printing and publishing opera- subsidiaries were formed in December for the following amounts: and subsidiaries are reflected net of income taxes of the in amount at December 28, 1968. tions. Commitments for such acquisition were not material 6

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BERKSHIRE HATHAWAY INC. ACCOUNTANTS REPORT PEAT, MARWICK, MITCHELL. & Co. 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 December 28, 1968 and the re- lated statements of earnings and retained earnings for the year then auditing standards, ended. Our examination was made in accordance with generally accepted and accordingly included such tests of the account- ing records and such other auditing procedures as we considered neces- sary in the circumstances. In our opinion, such financial statements present fairly the December 28, 1968 and the results of their operations for the year then financial position of Berkshire Hathaway Inc. and its subsidiary at ended, in conformity with generally accepted accounting principles ap- as explained in Note 10 of Notes to Consolidated Financial Statements. plied on a basis consistent with that of the preceding year, restated Peat, Mauick, Mithell To. February 28, 1969 7

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ANNUAL MEETING The next annual meeting of the shareholders of Berkshire Hathaway Inc. will be held at the principal office of the Company at 97 Cove 10:00 a.m. on Tuesday, April 22, 1969. Street, New Bedford, Massachusetts, at

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DIRECTORS *MALcoLM G. CHACE, Jr., Chairman** RICHARD BOWEN *WARREN E. BUFFETT *KENNETH V. CHACE DANIEL COWIN BRADFORD R. FROST ARTHUR INGRAHAM, JR. STANLEY RUBIN WILLIAM SCOTT *Member of Finance Committee **Retired as Chairman of the Board of Directors on February 1, 1969. Continues as a member of the Board. OFFICERS KENNETH V. CHACE, President RICHARD BOWEN, Vice President JOHN E. HARTLEY, Vice President J. VERNE McKENZIE, Vice President and Treasurer RALPH RIGBY, Vice President GENERAL COUNSEL RoPEs & GrAY, Boston, Massachusetts AUDITORS PEAT, MARWICK, MITCHELL & Co. TRANSFER AGENT OLD COLONY TRUST COMPANY, Boston, Massachusetts REGISTRAR THE FIRST NATIONAL BANK oF Boston, Boston, Massachusetts

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BERKSHIRE HATHAWAY INC. Executive Offices- 97 Cove Street, New Bedford, Massachusetts 02744 Sales Offices- 261 Fifth Avenue, New York, New York 10016 1040 Avenue of the Americas, New York, New York 10019