1956 年伯克希尔完整年报

[PAGE 1]

CLEVELAND PUBLIC LIBRARY CORPORATION FILE BUSINESS INF. BUR. ANNUAL REPORT to the Stockholders • 1956 • BERKSHIRE H HATHAWAY INC. Comery, Davison facobs

[PAGE 2]

BERKSHIRE BH HATHAWAY INC. Annual Report For the Year Ended September 30, 1956 To THE STOCKHOLDERS OF BERKSHIRE HATHAWAY INC. There is presented herewith the consolidated annual report for the year ended September 30, 1956, of Berkshire Hathaway Inc. and its subsidiaries. The operating results for the fiscal year shown in this report include the operations of Bourne Mills, acquired in May, 1956, for the last three months of the fiscal year. FINANCIAL The net income for the year was $922,548 on sales of $68,042,770 com- pared with $300,722 on sales of $65,498,284 in 1955. The income in 1956 is after depreciation of $1,895,806 and Federal and State income taxes of $867,000. Working capital at the end of the year was $31,426,569 and stockholders' equity was $50,369,720. DIVIDENDS The company paid a dividend of 25c per share each quarter, making a total distribution for the year of $1.00 per share, aggregating $2,275,639. PLANTS AND We continued our policy of making improvements and additions to EQUIPMENT existing plant facilities where the return on the investment seemed adequate. During the fiscal year just ended, a net amount of $1,334,158 was spent on such improvements. A program for diversification of products has become increasingly important, and in May, 1956, we purchased the stock of Bourne Mills of Tiverton, Rhode Island, with the exception of a very small minority interest, for $3,356,955. This mill manufactures carded sateens and has 89,800 spindles, 2,420 looms, and a finishing plant. It has a wide distribu-

[PAGE 3]

tion of finished sateens throughout the United States and in Canada through its subsidiary, Bourne Mills of Canada Limited. Due to a shortage of employees in North Adams and Adams, Massachusetts, it became increasingly difficult to operate both our Greylock and Berkshire plants in that area on a full three-shift basis. It was decided, therefore, to consolidate these two plants, which are located only a few miles apart. In keeping with this decision, Greylock has been closed down completely and is now in the process of liquidation. A large number of the Greylock employees have been moved to the Berkshire plant, with a substantial increase in produc- tion from this plant, which has resulted in decreasing our over-all operating expenses in this area. EMPLOYEE Our previous labor contract terminated on April 15, 1956, and a new RELATIONS two-year contract was negotiated, providing for a 6½% increase and a wage and fringe reopening on April 15, 1957, on sixty days' notice by either party. GENERAL During the past year the cotton textile industry has suffered very seriously from increasing importations of low-cost Japanese cotton fabrics and apparel. The Government has recognized the seriousness of this situation and has announced that negotiations now proceeding with the Japanese will result in a satisfactory solution to this problem by January 1, 1957. Immediately after this announcement, the Southern section of the industry announced a wage increase averaging 10c an hour, effective early in October. All of the company's plants are now in operation, and our unfilled order position is constantly improving. As a result of the recent increase in wages in the textile industry located in the South, our competitive position has been substantially improved, and we look to the future with confidence. JOHN H. McMAHON Chairman of the Board November 27, 1956 SEABURY STANTON Vice Chairman of the Board M. G. CHACE, JR. President

[PAGE 4]

BERKSHIRE Bff HATHAWAY INC. FISCAL YEARS — 1956 1955 1954 1953 Net Sales . . $68,042,770 $65,498,284 $66,929,036 $86,414,388 Total Taxes, including Social Security, Property and Income. 2,724,294 1,881,452 2,364,338 5,176,906 Taxes per Share of Common Stock • 1.21 .84 1.05 2.30 Net Earnings Available for Dividends 922,548 300,722 660,335 2,921,084 Earnings per Share of Common Stock .41 13 .29 1.30 Cash Dividends Paid per Share of Common Stock 1.00 1.00 1.00 1.13 Net Expenditures for Plant Assets • 1,334,158 1,201,470 1,161,742 3,694,344 Working Capital. 31,426,569 33,022,161 34,326,925 35,445,474 Total Stockholders' Equity . 50,369,720 51,399,756 53,354,318 55,153,170 NOTE: All per share calculations are based upon Common Stock outstanding (2,246,114 shares) at September 30, 1956

[PAGE 5]

[PAGE 6]

BERKSHIRE Consolidated I -- ASSETS - September 30, 1956 September 30, 1955 CURRENT ASSETS Cash $ 2,554,457.15 $ 4,169,412.89 Accounts Receivable (Less Reserve $364,811.68-1956; $371,846.54-1955) 7,136,304.50 5,343,060.23 Marketable Securities (Estimated Market Value $480,740.00 at September 30, 1956) 482,288.37 4,332,595.44 Inventories (Note A) Raw Materials 3,337,399.61 5,388,665.11 Stock in Process 4,273,243.22 4,118,433.77 Cloth 23,049,230.38 13,211,943.82 Waste 182,357.16 258,374.48 Total Inventories 30,842,230.37 22,977,417.18 TOTAL CURRENT ASSETS 41,015,280.39 36,822,485.74 OTHER ASSETS AND DEFERRED CHARGES Other Investments 518,793.00 528,580.55 Notes and Other Amounts Receivable 158,369.24 143,498.99 Prepaid Insurance, Taxes and Other Assets 732,404.60 596,202.32 Supplies Inventory, Including Fuel and Returnable Containers 402,548.88 454,046.47 TOTAL OTHER ASSETS AND DEFERRED CHARGES • 1,812,115.72 1,722,328.33 PLANT ASSETs (Note B) Properties Comprising Land, Buildings, Machinery, Equipment and Developed Water Power. 38,955,952.87 35,057,964.10 Less: Depreciation Reserves • 21,824,917.19 18,402,697.07 NET PLANT ASSETS • 17,131,035.68 16,655,267.03 TOTAL ASSETS • $59,958,431.79 $55,200,081.10 See Accompanying Notes

[PAGE 7]

HATHAWAY INC. Balance Sheets

• LIABILITIES AND STOCKHOLDERS' EQUITY —

September 30, 1956 September 30, 1955 CURRENT LIABILITIES Notes Payable - Bank . . $ 4,300,000.00 $

• 0-

Accounts Payable.. 2,184,993.38 2,334,371.56 Accrued Wages and Salaries 786,925.23 638,079.95 Accrued State and Local Taxes . . 640,261.47 189,053.31 Social Security and Withholding Taxes Payable 631,942.41 638,820.07 Provision for Federal Taxes on Income (Note C) 1,044,589.18 247,780.66 Less: U. S. Government Securities ..

• 0-

247,780.66 Net Provision for Federal Taxes on Income 1,044,589.18

• 0-

TOTAL CURRENT LIABILITIES . . 9,588,711.67 3,800,324.89 STOCKHOLDERS' EQUITY Common Stock ($5.00 Par Value) Authorized 3,000,000 Shares-Issued 2,294,564 Shares 11,472,820.00 11,472,820.00 Excess of Net Assets Received over Common Stock Issued or Cost of Subsidiary Acquisition (Capital Surplus) 2,736,510.07 1,849,610.71 Earnings Retained in the Business (Earned Surplus) 36,739,562.28 38,077,325.50 Totals ... . 50,948,892.35 51,399,756.21 Less: Common Stock in Treasury - 48,450 Shares at Cost 579,172.23

• 0-

NET STOCKHOLDERS EQUITY ... 50,369,720.12 51,399,756.21 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY . $59,958,431.79 $55,200,081.10 to Financial Statements

[PAGE 8]

BERKSHIRE BH HATHAWAY INC. Notes to Financial Statements For the Year Ended September 30, 1956 Basis of Consolidation — The consolidated financial statements include the accounts of all subsidiary companies assets received from the Bourne Mills acquisition over the cost of the investment has been added to capital surplus. including a Canadian subsidiary whose net assets are not significant. In the consolidation of the accounts, the net This excess amounted to $886,899.36. The small minority interest has been included in the accounts payable. income statement. The operating results of Bourne Mills for the last quarter of the fiscal year are included in the consolidated Corporate Changes — During the current fiscal year the King Philip Finishing Co. was liquidated into the parent company and is now operating as a division. During the latter part of the year Berkshire Hathaway Inc. purchased the outstanding 59,000 shares of Bourne Mills capital stock with the exception of a small minority interest. Note (A) - Inventories BERKSHIRE HATHAWAY INC. — Raw materials are priced at the "lower of cost or market"; the cotton content of stock in process of Berkshire Divisions at a standard established in 1933, which is substantially less than used in valuing labor and manufacturing burden in stock in process, as well as cloth. Cloth is priced at the current market and at the "lower of cost or market" for the Hathaway Division. The standard cost basis is "lower of cost or market". Waste is valued at a conservative market. BOURNE MILLS — The cotton content of merchandise inventory at Bourne Mills is priced on the basis of "last- in-first-out" except for goods purchased from Berkshire Hathaway Inc. Which are stated at cost. This inventory is less than market. The inventories of its subsidiaries are priced at the "lower of cost or market". The verification of the raw materials, stock in process, and cloth included a review of the inventory records and process quantities, and confirmation by direct correspondence of merchandise quantities in the possession of procedures, physical examination at all plants during the fiscal year of raw materials and cloth, test of stock in outside finishers. Note (B) - Plant Assets Note (C) - Provision for Federal Taxes on Income The Federal income tax returns of the Company for the fiscal years 1954 and 1955 are presently in the process of outstanding reserve at September 30, 1956 amply provides for tax liabilities to that date. examination by the Internal Revenue Service, and on the basis of this examination it is our opinion that the Note (D) — Pension Plans and Retirement Separation Benefits $361,567.00. For the current fiscal year the Company made contributions to the trustees for the pension plans amounting to age of 65 years with a minimum service of 15 years and who retire voluntarily. Under the terms of the union The Company is contingently liable for retirement separation pay of certain employees who have reached the 30, 1956 the estimated liability under this contract was $200,000.00. contract such liability does not become fixed until the actual retirement of eligible employees. As of September Note (E) — Purchase Commitments materials are at prices approximating market. The Company has outstanding plant improvements and material commitments amounting to $4,450,000.00. The

[PAGE 9]

BERKSHIRE ( BH HATHAWAY INC. Condensed Consolidated Statement of Income September YEARS ENDED 30, 1956 September 30, 1955 SALES (NET) $68,042,769.73 $65,498,284.38 Cost of Goods Sold, Administrative and Selling Expenses (Depreciation - 1956 — $1,895,806.46) 66,413,220.92 65,169,317.88 OPERATING PROFIT . 1,629,548.81 328,966.50 Other Income 337,964.46 592,791.50 1,967,513.27 921,758.00 Other Charges 177,965.26 209,035.66 NET INCOME BEFORE PROVISION FOR TAXES ON INCOME 1,789,548.01 712,722.34 Provision for Taxes on Income 867,000.00 412,000.00 NET INCOME $ 922,548.01 $ 300,722.34 Statement of Earnings Retained in the Business EARNINGS RETAINED IN THE BUSINESS AT BEGINNING OF YEAR $38,077,325.50 $40,021,487.16 Net Income for the Year. 922,548.01 300,722.34 Revenue Agent's Net Asset Adjustments for Fiscal Years 1951, 1952 and 1953 15,327.77

• 0-

39,015,201.28 40,322,209.50 Dividends Paid . 2,275,639.00 2,244,884.00 EARNINGS RETAINED IN THE BUSINESS AT END OF YEAR . $36,739,562.28 $38,077,325.50 We have examined the consolidated balance sheet of Berkshire Hathaway Inc. and its subsidiaries as of September 30, CERTIFICATE OF AUDITORS made in accordance with generally accepted auditing standards and accordingly included such tests of the accounting records 1956 and the related statements of income and earnings retained in the business for the year then ended. Our examination was and such other auditing procedures as we considered necessary in the circumstances. in the business, In our opinion, the accompanying consolidated balance sheet and related statements of income and earnings retained and the consolidated results of its with the notations thereto, present fairly the Company's consolidated financial position at September 30, 1956 principles applied on a basis consistent with that of the preceding year. operations for the year then ended, in conformity with generally accepted accounting Providence, R. I., October 23, 1956 COMERY, DAVISON & JACOBSON Certified Public Accountants

[PAGE 10]

BERKSHIRE Bff HATHAWAY INC. DIRECTORS OWNERS JAMES C. BRADY The Company had 13,246 stockholders on JONATHAN CHACE September 30, 1956 MALCOLM G. CHACE, JR. LINSLEY V. DODGE BRADFORD R. FROST OFFICERS MANLIO FROVA Chairman of the Board. JOHN H. McMAHON Vice Chairman of the Board SEABURY STANTON ARTHUR INGRAHAM, JR. President and Treasurer. . MALCOLM G. CHACE, JR. THOMAS J. KENNEDY Vice President. LINSLEY V. DODGE W. R. L. McBEE Vice President. . . . MANLIO FROVA JOHN H. McMAHON Vice President. • THOMAS J. KENNEDY IRWIN L. MOORE Vice President. BERTRAND D. MANLEY HENRY S. NEWCOMBE Vice President. HENRY S. NEWCOMBE Vice President. EDMUND RIGBY WILLIAM A. O'HEARN Vice President and Clerk • GIBBS W. SHERRILL EDMUND RIGBY Vice President. • OTIS C. STANTON GIBBS W. SHERRILL Vice President. THOMAS F. TANSEY OTIS C. STANTON Assistant Treasurer . . EDWARD H. ARNOLD SEABURY STANTON Assistant to President and Assistant Secretary. JoHN J. McMAHON THOMAS F. TANSEY A. N. WINSLOW, JR. EXECUTIVE COMMITTEE SEABURY STANTON, Chairman JAMES C. BRADY JOHN H. McMAHON MALCOLM G. CHACE, JR. IRWIN L. MOORE W. R. L. McBEE GIBBS W. SHERRILL A. N. WINSLOW, JR.

[PAGE 11]

BERKSHIRE Bff HATHAWAY INC. EXECUTIVE OFFICES 704 HOSPITAL TRUST BUILDING, PROVIDENCE, R. I. SALES OFFICES 1430 BROADWAY, NEW YORK, N. Y. 261 FIFTH AVENUE, NEW YORK, N. Y. 746 SOUTH Los ANGELES STREET, Los ANGELES, CALIFORNIA 363 ADELAIDE STREET, WEST, TORONTO, CANADA PLANT LOCATIONS Massachusetts ADAMS • NORTH ADAMS • HOLYOKE • FALL RIVER NEW BEDFORD Rhode Island ALBION • ANTHONY • TIVERTON • WARREN Vermont BRATTLEBORO BLEACHERY & DYE WORKS LONSDALE, R. I. CURTAIN FACTORIES WARREN, R. I. FALL RIVER, MASS. MACHINE SHOP WARREN, R. I. LABORATORIES NEW BEDFORD, MASS. WARREN, R. I.

[PAGE 12]

BERKSHIRE BH HATHAWAY INC.