1962 年伯克希尔完整年报

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CLEVELAND PUBLIC LIBRARS CORPORATION FILE BUSINESS INF. BUR. Bff BERKSHIRE HATHAWAY INC. Annual Report TO THE STOCKHOLDERS 1962

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BERKSHIRE HATHAWAY INC. The Company had 8,075 stockholders on September 29, 1962 DIRECTORS MALCOLM G. CHACE, Jr., Chairman ABRAM BERKOWITZ EDMUND RIGBY JONATHAN CHACE LYmAN H. SMITH LINSLEY V. DODGE OTIS C. STANTON BRADFORD R. FROST SEABURY STANTON ARTHUR INGRAHAM, JR. A. N. WINSLOW, JR. EXECUTIVE COMMITTEE SEABURY STANTON, Chairman MALCOLM G. CHACE, JR. EDMUND RIGBY BRADFORD R. FROST A. N. WINSLOW, JR. OFFICERS SEABURY STANTON, President EDMUND RIGBY, Executive Vice President and Clerk LYMAN H. SmItH, 1st Vice President and Treasurer Administrative Sales J. CRANSTON GRAY, Vice President LINSLEY V. DoDGE, Vice President WILLIAM H. POTTER, Vice President JoHN E. HARTLEY, Vice President JOHN K. STANTON, Vice President STANLEY RUBIN, Vice President

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BERKSHIRE HATHAWAY INC. FINANCIAL HIGHLIGHTS For Fiscal Years 1962 and 1961 September 29, 1962 September 30, 1961 Sales . $53,259,302 $47,722,281 Net loss (2,151,256) (393,054) Loss per share (1.34) (.24) Depreciation 1,905,368 2,128,699 Additions to properties and equipment 3,454,069 4,020,542 Cash $ 1,444,590 $ 939,471 Notes payable - banks 6,900,000 4,150,000 Accounts receivable (net) 7,052,387 6,852,447 Inventories 19,281,265 20,880,052 Working capital 16,473,783 19,844,122 Working capital per share 10.25 12.35 Stockholders' equity 32,463,701 36,175,695 Stockholders' equity per share 20.20 22.51 Payroll $19,410,069 $20,324,190 2

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BERKSHIRE HATHAWAY INC. ANNUALREPORT For the Year Ended September 29, 1962 November 21, 1962 TO THE STOCKHOLDERS OF BERKSHIRE HATHAWAY INC.: Berkshire Hathaway was for many years the largest producer in the United States, suffered from During the twelve months ending September 29, 1962, fine combed cotton staple fabrics, of which substantial overproduction and prices dropped to the lowest point reached in many years. taken to return the Company to profitable operations: As a result of this drastic disruption in the market for our products, the following steps have been develop, a semi-proprietary interest, and on which we will encounter less difficult competition. 2. We have substantially increased production on the types of fabrics in which we have, or can of our new Home Fabrics Division, which will sell finished fabrics for home use throughout the United 3. We have been working on certain market development programs, such as the establishment States and Canada, and which is already beginning to show a substantial volume. 4. The number of looms on synthetic blend fabrics is constantly increasing and we have established a strong position in this new and growing market. 5. All of our inventories are being substantially reduced, and we have taken the necessary steps facilities. to reduce corporate and manufacturing overhead to reflect the reduction in our manufacturing 6. The advisability of expanding our operations through mergers or acquisitions in other textile fields is being carefully considered. 1963, the Company should be in a position to return to profitable operations. Our remaining plants will be modern and competitive, and we anticipate that by the end of March will have current assets in excess of its requirements during the coming year because of the decrease in Berkshire Hathaway continues to be in a strong financial position, and it is expected that the Company the number of plants operated and the anticipated reduction in our inventories. It would seem prudent, under the circumstances, to use the excess assets to reduce the number of shares of stock outstanding. judgment, are not required in the Company's operation, to purchase outstanding stock, either in the open Accordingly, the stockholders are requested to authorize the use of funds by the directors which, in their market or by tender, for ultimate retirement. year of adjusting to new market conditions, and anticipate that their confidence and patience will be We very much appreciate the cooperation we have received from our stockholders during this difficult rewarded as a result of the changes in our products which have already been accomplished and are now in process. MALCOLM G. CHACE, JR. SEABURY STANTON Chairman of the Board President 3

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BERKSHIRE REVIEW OF EARNINGS AND SALES Loss for the fiscal year ended September 29, 1962 was $2,151,256, after depreciation of $1,905,368. This compares with a loss of $393,054, after depreciation of $2,128,699 for the year ended September 30, 1961. Sales volume for the year ended September 29, 1962 was $53,259,302, compared with $47,722,281 for the year ended September 30, 1961. DIVIDENDS A total of $160,738 was paid in dividends during fiscal year just ended with a payment of 10¢ per share on December 1, 1961. FINANCIAL DEVELOPMENTS The financial position of the Company continues strong. Net working capital on Sep- tember 29, 1962 was $16,473,783, or $10.25 per share, compared with $19,844,122, or $12.35 per share on September 30, 1961. During the fiscal year just ended, expenditures capitalized in connection with machinery and plant facilities amounted to $3,454,069. Unexpended commitments for plant and equip- ment at the end of the year were $231,000. INVENTORIES Inventories at September 29, 1962 amounted to $19,281,265, compared to $20,880,052 on September 30, 1961, or a decrease of $1,598,787. 4

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HATHAWAY INC. P ERATIONS EMPLOYEE RELATIONS An increase in wages occurred throughout the textile industry in the spring of 1962, and in April a new two-year agreement was signed which reflected the general increase. MERCHANDISING TRENDS During the past year we have continued to expand our sales of blended yarn fabrics made with synthetic fibers such as Dacron and cotton, and fabrics of this type are becoming increas- ingly important in all apparel trades. At the present time a large percentage of our looms are operating on fabrics made with synthetic filament yarns and synthetic blend yarns, and we expect to continue to increase our operation on this type of fabric during the coming year. OPERATIONS During the year, our Bourne Mills Division and Coventry Division were closed down and plans have been made to close our Valley Falls Division in December of 1962. A substantial part of the modern machinery in these plants has been moved to our remaining plants and the balance of the machinery not needed will be sold. It has been estimated that there will be a book loss of $1,400,000 on the properties to be sold. This amount has been set up as a reserve and charged against earned surplus. When our consolidation program has been completed, the company will have approximately 4,000 workers and an operation consisting of four plants— one of which is located in Rhode Island, and three in Massachusetts. 5

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BERKSHIRE CONSOLIDATED

• ASSETS-

September September 29, 1962 30, 1961 CURRENT ASSETS: Cash $ 1,444,590 $ 939,471 Accounts receivable (less allowance for doubtful accounts — 1962 - $306,247) 7,052,387 6,852,447 Inventories (Note A) . 19,281,265 20,880,052 Prepaid insurance, taxes and other expense 320,926 275,423 TOTAL CURRENT ASSETS 28,099,168 28,947,393 PROPERTIES, PLANTS AND EQUIPMENT (Note B): Properties comprising land, buildings, machinery and equipment 41,135,214 40,429,269 Less accumulated depreciation and amortization 23,821,922 24,197,474 17,313,292 16,231,795 Less estimated loss on properties to be sold 1,400,000 15,913,292 16,231,795 MORTGAGE NOTES RECEIVABLE AND OTHER ASSETS 76,626 99,778 TOTAL ASSETS $44,089,086 $45,278,966 See accompanying notes 6

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HATHAWAY INC. BALANCE SHEET -LIABILITIES AND STOCKHOLDERS' EQUITY- September 29, 1962 September 30, 1961 CURRENT LIABILITIES: Notes payable - banks $ 6,900,000 $ 4,150,000 Accounts payable. 3,315,956 3,371,352 Accrued wages and salaries 454,970 528,629 Accrued state and local taxes 317,108 488,415 Social security and withholding taxes payable 637,351 564,875 TOTAL CURRENT LIABILITIES • 11,625,385 9,103,271 STOCKHOLDERS' EQUITY: Common stock ($5 par value) authorized 3,000,000 shares — issued 2,294,564 shares 11,472,820 11,472,820 Excess of net assets received over common stock issued or cost of subsidiary acquisition (capital surplus) 2,738,106 2,738,106 Earnings retained in the business (earned surplus) 26,018,710 29,730,704 40,229,636 43,941,630 Less common stock in treasury at cost — 687,184 shares 7,765,935 7,765,935 32,463,701 36,175,695 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $44,089,086 $45,278,966 to financial statements. 7

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BERKSHIRE HATHAWAY INC. CONSOLIDATED STATEMENT OF INCOME Years Ended September September 29, 1962 30, 1961 SALES $53,259,302 $47,722,281 Cost of goods sold, administrative and selling expenses 53,373,065 46,144,614 Depreciation 1,905,368 2,128,699 55,278,433 48,273,313 OPERATING LOSS (2,019,131) (551,032) Other income . 221,903 254,642 (1,797,228) (296,390) Other charges 354,028 96,664 NET LOSS $(2,151,256) $ (393,054) CONSOLIDATED STATEMENT OF EARNINGS RETAINED IN THE BUSINESS EARNINGS RETAINED IN THE BUSINESS AT BEGINNING OF YEAR • $29,730,704 $31,329,293 Net loss for the year.. (2,151,256) (393,054) Estimated loss on properties to be sold (1,400,000) -0- Dividends paid (160,738) (1,205,535) EARNINGS RETAINED IN THE BUSINESS AT END OF YEAR $26,018,710 $29,730,704 See accompanying notes to financial statements. 8

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BERKSHIRE HATHAWAY INC. Notes to Consolidated Financial Statements For the Year Ended September 29, 1962 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 1933, which is less than the current market. Current standard costs are used in valuing labor and manu- cotton content of stock in process of Berkshire Divisions which is priced at a standard established in facturing burden in stock in process. Cloth is priced at the lower of cost or market. All costs were deter- mined 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 September 29, 1962 and September 30, 1961 are stated at net book values of $15,913,292 and $16,231,795, respectively. The net values used for federal income tax purposes were $18,473,485 and $17,857,905, respectively. Consistent with the practice of prior years, depreciation has been charged to operations on the book basis. For the fiscal year ended September 30, 1961 depreciation on eligible machinery and equipment was computed by using the double declining balance method. As of October 1, 1961 depreciation has been computed on the straight line method rather than double declining balance method for both book and tax purposes. The effect of this change was to reduce depreciation in fiscal year ended September 29, 1962 by approximately $425,000. Note C - Taxes on Income Federal income tax returns of the Company have been examined through the fiscal year ended Sep- tember 30, 1957. Including the current year's loss, the Company has unused federal income tax carry-overs of approximately $4,500,000. To the extent not utilized $1,600,000 will expire at September 30, 1963 and $2,900,000 in the succeeding four years. Note D - Pension Plans and Retirement Separation Benefits The Company made contributions to the trustees for the pension plans based upon payment of normal costs plus amortizing the deficiency for past services. The Company is contingently liable for approximately $575,000 under the union contract of certain employees who have reached the retirement age specified and with a minimum service of fifteen years and employees. who retire voluntarily, and under certain consultation and retirement contracts with former executives Note E - Purchase Commitments excess of market. Plant improvement commitments were approximately $231,000. At the close of the fiscal year the Company had outstanding raw material commitments at prices not in

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BERKSHIRE HATHAWAY INC. ACC UNTANTS' REPORT COMERY, DAVISON & COMPANY Certified Public Accountants 10 DORRANCE STREET PROVIDENCE 3, RHODE ISLAND American Institute of Members Certified Public Accountants To the Stockholders and Board of Directors Berkshire Hathaway Inc. New Bedford, Massachusetts We have examined the consolidated balance sheet of Berkshire Hathaway Inc. and its subsidiary as of September 29, 1962 and the related consolidated statements of income and earnings retained in the business for the year then ended. Our examination was made ingly included such tests of the accounting records and such other in accordance with generally accepted auditing standards, and accord- auditing procedures as we considered necessary in the circumstances. In our opinion, the accompanying consolidated balance sheet and consolidated statements of income and earnings retained in the business present fairly the financial position of Berkshire Hathaway Inc. at September 29, 1962, and the results of its operations for the year then applied on a basis consistent with that of the preceding year except ended, in conformity with generally accepted accounting principles ciation referred to in Note B to for the change, which we approve, in the method of computing depre- the financial statements. Comery, Darions many October 29, 1962 10

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BERKSHIRE HATHAWAY INC. EXECUTIVE OFFICES 97 Cove Street, New Bedford, Mass. SALES OFFICES 1430 Broadway, New York, N. Y. 3028 East 11th Street, Los Angeles, Calif 100 Wellington Street, West, Toronto, Canada PLANT LOCATIONS Hathaway Div., New Bedford, Mass. King Philip Div. D, Warren, R. I. King Philip Div. A, Fall River, Mass. Valley Falls Div., Albion, R. I. King Philip Div. E, Fall River, Mass. Warehouse, Fall River, Mass. 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 COMERY, DAVISON & COMPANY RoPES & GRAY Providence, R. I. Boston, Mass. 12

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BERKSHIRE HATHAWAY INC. PRINTED