1963 年伯克希尔完整年报

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CLEVELAND PUBLIC LIBRART CORPORATION FILE BUSINESS INF. BUR, BERKSHIRE HATHAWAY INC. Annual Report TO THE STOCKHOLDERS 1963

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BERKSHIRE HATHAWAY INC. The Company had 6,875 stockholders on September 28, 1963 DIRECTORS MALCOLM G. CHACE, Jr., Chairman ABRAM BERKOWITZ ARTHUR INGRAHAM, JR. JONATHAN CHACE EDMUND RIGBY DANIEL COWIN OTIS C. STANTON LINSLEY V. DODGE SEABURY STANTON BRADFORD R. FROST 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 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 1

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BERKSHIRE HATHAWAY INc. FINANCIAL HIGHLIGHTS For Fiscal Years 1963 and 1962 September 28, 1963 September 29, 1962 Sales $50,590,679 $53,259,302 Net loss and Special item (684,811) (2,151,256) Loss per share (.43) (1.34) Depreciation 1,716,613 1,905,368 Additions to properties and equipment $ 665,813 $ 3,454,069 Cash $ 660,264 $ 1,444,590 Notes payable - banks. 5,400,000 6,900,000 Accounts receivable (net) 7,670,236 7,052,387 Inventories 18,011,345 19,281,265 Working capital 17,410,503 16,473,783 Working capital per share . 10.83 10.25 Stockholders' equity . 30,278,890 32,463, 701 Stockholders' equity per share 18.84 20.20 Payroll $16,093,207 $19,410,069 2

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BERKSHIRE HATHAWAY INC. ANNUAL REPORT For the Year Ended September 28, 1963 November 21, 1963 TO THE STOCKHOLDERS OF BERKSHIRE HATHAWAY INC.: a very important trend toward profitable operations. The year ended September 28, 1963 was one of significant progress for this Company and showed Losses were progressively smaller during each quarter of the year and finally culminated in a small profit of $27,406 after depreciation of $429,669 for the quarter ended September 28, 1963. were decreased from $6,900,000 to $5,400,000, a total reduction of $1,500,000. As stated elsewhere in this report, working capital increased by $936,720, and notes payable to banks we have continued to reduce the number of looms running on cotton staple grey goods on which competi- In keeping with the program outlined in our Annual Report to Stockholders on November 21, 1962, tion from abroad and from low-cost mills in other areas of the United States has seriously affected prices. ning to show a satisfactory profit on its distribution of finished fabrics for home use throughout the Our new Home Fabrics Division has operated during the year at a substantial volume, and is begin- United States and Canada. closed. The land and buildings were sold and the machinery either consolidated in our other mills or During the year the Valley Falls Division which had not been operating profitably was permanently disposed of in the open market. Directors voted at their meeting of November 6th to discontinue production at our Berkshire King In a continuation of our policy to shut down mills which do not operate profitably, the Board of Philip A Division in Fall River and dispose of the physical assets not needed in our other plants. Although some non-recurring losses will be sustained in this closing and the disposal of these assets, the over-all operating position of the Company will be improved by the elimination of this plant. during the year, and we will continue to explore such possibilities as appear to have merit. The advisability of expanding our operations through mergers or acquisitions was carefully considered Although the stockholders authorized the Directors to purchase outstanding stock for ultimate retirement, either in the open market or by tender, no stock has been purchased by the Company during hoped, however, that it will be possible to take action leading to the reduction in the number of shares the year just ended as it seemed more prudent to reduce the Company's outstanding bank loans. It is of stock outstanding during the coming year. provement in our operations will continue. Berkshire Hathaway continues to be in a strong financial position, and we anticipate that the im- MALCOLM G. CHACE, JR. Chairman of the Board SEABURY STANTON President 3

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BERKSHIRE REVIEW OF EARNINGS AND SALES Sales volume for the fiscal year ended September 28, 1963 was $50,590,679 and our loss was $684,811, after depreciation of $1,716,613. This compares with a sales volume of $53,259,302 for the year ended September 29, 1962, and a loss of $2,151,256, after depreciation of $1,905,368. FINANCIAL DEVELOPMENTS The financial position of the Company continues strong. During the year net working capital increased $936,720 and on September 28, 1963 was $17,410,503 or $10.83 per share, compared with $16,473,783 or $10.25 per share on September 29, 1962. During the fiscal year just ended, expenditures capitalized in connection with machinery and plant facilities amounted to $665,813. Unexpended commitments for plant and equipment at the end of the year were $75,000. Bank loans were reduced from $6,900,000 on September 29, 1962, to $5,400,000 on Sep- tember 28, 1963, a reduction of $1,500,000. INVENTORIES Inventories at September 28, 1963 amounted to $18,011,345, compared to $19,281,265 on September 29, 1962, a decrease of $1,269,920. EMPLOYEE RELATIONS We have continued to receive the cooperation of our employees during the year and look forward to the same mutually satisfactory relationship in the future.

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HATHAWAY INC. OPERATIONS MERCHANDISING TRENDS In spite of repeated assurances on the part of the Administration, Congress has not as yet passed legislation to enable American textile mills to purchase American cotton at the same Government established prices at which it is sold to foreign countries. As a result of this delay the cotton fabric market has suffered from uncertainty with regard to the future cost of this fiber. This has caused many mills to change looms from cotton to synthetic yarns and synthetic blends, and some overproduction in these fields has resulted. Recently, however, there has been some improvement in the demand for all types of fabrics, and it is anticipated that the market for our products will improve during the next few months. OPERATIONS During the fiscal year just ended our Berkshire Valley Falls Division in Albion, Rhode Island was permanently closed, and the land, buildings and a substantial part of the machinery were sold. Approximately $500,000 remains of the reserve established last year to cover possible losses in the disposal of the physical assets of Coventry and Valley Falls Divisions, of which a certain amount of machinery still remains to be sold. An additional $1,500,000 has been charged against surplus and added to this reserve to cover possible losses in the liquidation of the King Philip A Division. After the closing of this Division, we will have approximately 3,500 employees in three plants, one of which is in Rhode Island and two in Massachusetts. 5

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BERKSHIRE O N S LIDATED

• ASSETS-

September September 28, 1963 29, 1962 CURRENT ASSETS: Cash $ 660,264 $ 1,444,590 Accounts receivable (less allowance for doubtful accounts — 1963— $266,010) 7,670,236 7,052,387 Inventories (Note A) . 18,011,345 19,281,265 Prepaid insurance, taxes and other expense 237,374 320,926 TOTAL CURRENT ASSETS 26,579,219 28,099,168 PROPERTIES, PLANTS AND EQUIPMENT (Note B): Properties comprising land, buildings, machinery and equipment. 37,865,723 41,135,214 Less accumulated depreciation and amortization 23,035,741 23,821,922 14,829,982 17,313,292 Less estimated loss on properties to be sold 2,005,029 1,400,000 12,824,953 15,913,292 MORTGAGE NOTES RECEIVABLE AND OTHER ASSETS 43,434 76,626 TOTAL ASSETS $39,447,606 $44,089,086 See accompanying notes

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HATHAWAY INC. BALANCE SHEET

• LIABILITIES AND STOCKHOLDERS' EQUITY

September September 28, 1963 29, 1962 CURRENT LIABILITIES: Notes payable - banks • $5,400,000 $6,900,000 Accounts payable. 2,415,395 3,315,956 Accrued wages and salaries 398,660 454,970 Accrued state and local taxes 407,106 317,108 Social security and withholding taxes payable 547,555 637,351 TOTAL CURRENT LIABILITIES 9,168,716 11,625,385 STOCKHOLDERS' EQUITY (Note F): Common stock ($5 par value) 1963 — authorized 2,312,816 shares — issued 1,607,380 shares 8,036,900 11,472,820 Excess of net assets received over common stock issued or cost of subsidiary acquisition (capital surplus) • 2,738,106 Earnings retained in the business (earned surplus) 22,241,990 26,018,710 30,278,890 40,229,636 Less common stock in treasury at cost. 7,765,935 30,278,890 32,463,701 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $39,447,606 $44,089,086 to financial statements. 7

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BERKSHIRE HATHAWAY INC. CONSOLIDATED STATEMENT OF INCOME Years Ended September 28, 1963 September 29, 1962 SALES $50,590,679 $53,259,302 Cost of goods sold, administrative and selling expenses 49,418,947 53,308,154 Depreciation 1,716,613 1,905,368 51,135,560 55,213,522 OPERATING LOSS (544,881) (1,954,220) Other income 307,140 221,903 (237,741) (1,732,317) Other charges 309,733 354,028 NET LOSS BEFORE THE FOLLOWING (547,474) (2,086,345) Special Item Idle plant expense . 137,337 64,911 NET LOSS AND SPECIAL ITEM • $ (684,811) $ (2,151,256) CONSOLIDATED STATEMENT OF EARNINGS RETAINED IN THE BUSINESS EARNINGS RETAINED IN THE BUSINESS AT BEGINNING OF YEAR $26,018,710 $29,730,704 Net loss and special item for the year (684,811) (2,151,256) Retirement of treasury stock (Note F) . (1,591,909) _0- Estimated loss on properties to be sold (1,500,000) (1,400,000) Dividends paid (160,738) EARNINGS RETAINED IN THE BUSINESS AT END OF YEAR $22,241,990 $26,018,710 See accompanying notes to financial statements. 8

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BERKSHIRE HATHAWAY INC. Notes to Consolidated Financial Statements For the Year Ended September 28, 1963 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 cotton content of stock in process of Berkshire Divisions which is priced at a standard established in 1933, which is less than the 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 The properties, plants and equipment at September 28, 1963 and September 29, 1962 are stated at net book values of $12,824,953 and $15,913,292, respectively. The net values used for federal income tax purposes were $15,918,135 and $18,473,485, respectively. Consistent with the practice of prior years, depreciation has been charged to operations on the book basis. The estimated loss on properties to be sold reduces the net book value of these assets to estimated realizable amount. Note C - Taxes on Income 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 and 1959. Including the current year's loss, the Company has unused federal income tax carryovers of approximately $4,300,000. To the extent not utilized $400,000 will expire at September 30, 1966 and $3,900,000 in the succeeding 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. employees who have reached the retirement age specified and with a minimum service of fifteen years The Company is contingently liable for approximately $379,000 under the union contract of certain who retire voluntarily, and under certain consultation and retirement contracts. Note E - Purchase Commitments At the close of the fiscal year the Company had outstanding raw material commitments at prices not in excess of market. Plant improvement commitments were of a nominal amount. Note F - Corporate Changes At the annual meeting of stockholders held December 4, 1962 it was voted that the authorized capital stock of this Corporation be reduced to 2,312,816 shares of $5 par value common stock. It was voted also that the 687,184 shares of common stock held in the treasury be canceled and retired and that the excess of cost over par value of the retired shares be charged to Capital Surplus to the extent of such Capital Surplus — $2,738,106, and the balance thereof amounting to $1,591,909 be charged to Retained Earnings.

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BERKSHIRE HATHAWAY INC. A UNTANTS' REPORT COMERY, DAVISON & COMPANY Certified Public Accountants PROVIDENCE 3, RHODE ISLAND 10 DORRANCE STREET 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 related consolidated statements of income and earnings retained in Hathaway Inc. and its subsidiary as of September 28, 1963 and the the business for the year then ended. accordance with generally accepted auditing standards, and accordingly Our examination was made in included procedures as we considered necessary such tests of the accounting records and such other auditing • in the circumstances. In our opinion, the accompanying consolidated balance sheet and consolidated statements of income and earnings retained in the business September 28, 1963, and the results of its operations for the year then present fairly the financial position of Berkshire Hathaway Inc. at ended, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. Comery. Darion Company October 30, 1963 10

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BERKSHIRE HATHAWAY INC. COMPARATIVE FINANCIAL DATA FISCAL YEARS - 1963 1962 1961 1960 1959 Sales $50,590,679 $53,259,302 847,722,281 $62,608,679 $69,511,792 Net earnings (loss) (684,811) (2,151,256) (393,054) 4,623,980 1,322,099 Earnings (loss) per share of common stock (.43) (1.34) (.24) 2.84 .68 Cash dividends paid -0 160,738 1,205,535 1,715,323 464,287 Cash dividends paid per share -0 .10 .75 .95 .22½ Additions equipment to properties, plant and 665,813 3,454,069 4,020,542 3,818,632 1,125,253 Working capital 17,410,503 16,473,783 19,844,122 23,430,319 25,858,987 Working capital per share 10.83 10.25 12.35 14.41 13.35 Stockholders' equity . 30,278,890 32,463,701 36,175,695 37,981,820 38,911,549 Stockholders' equity per share 18.84 20.20 22.51 23.37 20.10 Common shares outstanding .. 1,607,380 1,607,380 1,607,380 1,625,519 1,936,321 NOTE: "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 STAPLE & Box Loom GREY GooDs HATHAWAY MENSWEAR LININGS 111 West 40th Street, New York, N. Y. 1290 Avenue of the Americas, New York, N. Y. HOME FABRICS 261 Fifth Avenue, New York, N. Y. 3028 East IIth Street, Los Angeles, Calif 100 Wellington Street, West, Toronto, Canada PLANT LOCATIONS Hathaway Box Loom Div., New Bedford, Mass. King Philip A Div., Fall River, Mass. Hathaway Synthetic Div., New Bedford, Mass. King Philip D Div., Warren, R. I. Warehouse, Fall River, Mass. King Philip E Div., Fall River, Mass. LABORATORY New Bedford, Mass. TRANSFER AGENT GISTRA 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. PRINTER u.s.A.