早期伯克希尔股东信合集（1965-1968）

Berkshire Hathaway Letter to Stockholders, 1965 Annual Report

November 9, 1965

To the Stockholders of Berkshire Hathaway Inc.:

The fiscal year ended October 2, 1965 resulted in net earnings of $2,279,206 as compared to net earnings of $125,586 for the prior year. These net earnings do not reflect any nonrecurring losses incurred on the disposal of assets due to the permanent closing of the King Philip Plants A and E in Fall River, Massachusetts, as such losses have been charged to a reserve previously established for such purpose.

Because of loss carryovers, no federal income taxes were payable by the Corporation with respect to either of these years; however, to prevent any misleading interpretation of future earnings when loss carryovers shall not be available, the Corporation has included in computing net earnings for 1965 and 1964 a charge substantially equal to the federal income taxes that would have been payable with respect to results of operations during each of these years.

The Corporation is continuing to operate King Philip Plant D in Warren, Rhode Island, and the Hathaway Synthetic, Box Loom and Home Fabrics Divisions in New Bedford, Massachusetts.

During 1965 raw material, stock in process and cloth inventories were decreased by $1,411,967 and bank loans of $2,500,000 were paid off. Also, during the year the Corporation purchased 120,231 of its own shares, leaving a total of 1,017,547 shares outstanding at the end of the fiscal year.

The Corporation made a substantial reduction in its overhead costs during the fiscal year just ended. Approximately $811,812 was invested by the Corporation during the year in the purchase of new machinery in a continuing effort to reduce costs and to improve quality. This program will continue during the current fiscal year.

A major portion of the machinery at King Philip Plant E Division has been sold. We expect to dispose of the remaining portion of this plant during the current fiscal year. This will complete the liquidation of our unprofitable plants. The proposed sale of the King Philip E Division will make it necessary to provide storage for raw cotton and grey cloth for the King Philip D Division at the Hathaway Division Plant C (former Langshaw Mill). Plans are under way to accomplish this within the current fiscal year.

After more than fifty years of service, Mr. Seabury Stanton resigned as a director and as President, and Mr. Kenneth V. Chace was elected to succeed him. At the same time, Mr. John K. Stanton resigned as a director and as Treasurer and Clerk. Mr. Harold V. Banks was elected to succeed him as Treasurer and Clerk.

All divisions of the Corporation currently have substantial backlogs of unfilled orders and we presently anticipate that operations for the coming year will continue to be profitable.

We wish to express our thanks to all the employees of the Corporation whose loyal cooperation and efforts have helped to make this year successful.

Malcolm G. Chace, Jr.

Chairman of the Board

Kenneth V. Chace

President

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Berkshire Hathaway Letter to Stockholders, 1966 Annual Report

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

Although total sales of $49.4 million were very close to last year's, there were significant changes in the product mix. 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.

The sales picture for the last half of 1966 was one of generally depressed markets. Heavy imports of yarn dyed goods plus a change in styling trends caused loss of sales and depressed prices in our Box 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 production depressed prices of plain polyester/cotton blends. We estimate that this development will cause looms to swing back on to cotton goods and thereby adversely affect our sales position on lawns 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 Bedford for the week of October 9, 1966. Inasmuch as the textile market has not, at this writing, shifted to a more active level, further cutbacks in production may be necessary to avoid inventory buildup.

New Products

The growth of our Home Fabrics Division over the past few years is, in large part, due to our development 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

In early 1966, we signed a contract with the Textile Workers Union of America AFL-CIO for three years ending April 15, 1969. This contract covers wages and benefits with no reopening clause.

Plant and Equipment

We have spent approximately $970,000 for purchase and installation of new equipment in order to lower costs, improve quality, and increase our manufacturing flexibility.

During fiscal 1966, we disposed of the remainder of our unused property.

Income Tax Payments

All but a small portion of our tax carryforward has been used as of the end of fiscal 1966. We therefore will incur income tax liability with respect to future earnings.

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, Inc. during the past six years:

Items|Amount ---:|---: 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.

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 successfully concluded, we continue to have an active interest in such acquisitions. The present state of the money market, in which funds are virtually unobtainable for acquisition purposes, makes it imperative 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.

Finally, the threat of technological change is ever present in the textile field. We have an investment of $24.4 million ($6.3 million after accrued depreciation) in plant and equipment. This is 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 replacement 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 expenditures, we must be in a financial position to do so. Sufficient working capital would be particularly necessary if the advent of important cost-cutting equipment coincided with a period of depressed textile 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 time, your directors have felt that we should be as zealous to achieve a realistic return on this portion of our capital as we are on the other funds that are at the time invested in plant, inventories, receivables, 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

This restoration of the Company's financial position now permits a dividend policy reflecting the distribution to our stockholders of a reasonable proportion of current after-tax earnings. Such a policy, however, must be consistent with the need for preserving the strength of our present financial position.

To implement this policy, a dividend of 10 cents per share was declared on November 14, 1966, payable January 3, 1967 to stockholders of record on December 2, 1966.

Malcolm G. Chace, Jr.

Chairman of the Board

Kenneth V. Chace

President

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Berkshire Hathaway Letter to Stockholders, 1967 Annual Report

March 8, 1968

To the Stockholders of Berkshire Hathaway Inc.:

The Company has adopted a calendar year for accounting purposes. This new calendar year end substitutes for the previous September 30 year end. The change was effective December 30, 1967. This report covers the fifteen months ended December 30, 1967.

Textile Operations

Fiscal Year Ended September 30, 1967

Sales

Total sales showed a decline from $49.4 million in fiscal 1966 to $39 million in fiscal 1967. The cause of the drop in dollar volume was a combination of a decrease in yardage demand in all divisions and a sharp drop in prices in all areas except the Home Fabrics Division. Although sales and profits of our Home Fabrics Division were down substantially, this area demonstrated the greatest resistance to the depressed conditions of the textile markets in which we operate. Berkshire Hathaway does not produce coarse goods such as heavy ducks, which is the segment of the textile business that was the strongest in 1967.

During the year, we curtailed our production about 15 per cent in an attempt to avoid building inventories. We maintained satisfactory inventory levels but our curtailment resulted in the loss of certain categories of skilled help which will be required if we are to fully utilize our plant capacity. Therefore, abnormally high training costs will be incurred before we again run full.

By the end of the fiscal year, there was some indication that the general textile market was improving with the exception of that for our fine combed lawns, which we manufacture at our King Philip D Division in Warren, Rhode Island. This fabric remained in poor demand, with depressed prices throughout the year. A market survey indicated that the demand for cotton lawn fabrics was gradually being displaced by a demand for polyester blend fabrics.

On the positive side, we expanded our Home Fabrics products line into a wider variety of fabrics and also expanded our sales force in this area. In addition to this, we started an Apparel Fabrics Division, selling finished yarn-dyed box loom goods into the women's apparel market. Both of these moves were part of our general policy of attempting to establish product lines away from areas of direct competition with staple fabric producers. We intend to further implement this policy.

Manufacturing Operation

Because of reduced levels of production, smaller individual orders, and more frequent loom shifts, manufacturing costs were materially higher than in the last several years. A return to full operation should correct this situation to a great extent. Although product development and diversification of fabrics will result in higher manufacturing costs, these higher costs should be more than offset by higher prices for the fabrics and result in greater profits.

Labor Relations

Labor relations remain satisfactory. Our labor contract will carry us through until April of 1969. A general wage rate increase is called for by this contract in April of 1968. The current labor market is a difficult one, as for most industries, with relatively fewer job applications being received from persons possessing the requisite training and skills.

Three Months Ended December 30, 1967

This quarter showed a very definite increase in demand in all divisions except King Philip D. We operated at close to normal levels, with some equipment idle only because of our inability to quickly obtain and train sufficient people. Our new Apparel Fabrics Division was off to a good start and our Home Fabrics Division renewed its historical strong growth pattern. Based on current market conditions, we expect a significant improvement in textile operating profits during 1968. Our operating loss carryforward has been fully utilized and any future net profit we realize will be subject to normal federal income taxes.

The portion of our business which proved unsatisfactory was the cotton lawn business. As a result of a second market survey, it was decided to close the King Philip D Division in Warren, Rhode Island where these goods were manufactured. The plant was an efficient one for the manufacture of fine combed lawns, which, unfortunately, are no longer in any sort of demand. The equipment at this plant had little adaptability to other end products, thereby making a conversion attempt uneconomical. The decision to terminate operations was hastened by the very large increase in the cost of new crop cotton, which could not be reflected in increased finished product prices. Any loss from termination of operations at King Philip D will be reflected as incurred in 1968. At this point in time, we can only speculate as to the amount of this loss but we do not envision that it will exceed $1 million pre-tax.

Insurance Subsidiaries

We are highly pleased with the results of our insurance subsidiaries since their acquisition in March 1967. These two companies, National Indemnity Company and National Fire and Marine Insurance Company, continue under the very able management of Mr. Jack Ringwalt who has guided them since inception.

Gross premium volume increased only slightly during 1967, but termination of certain re-insurance arrangements resulted in a substantial gain in net premium volume. Underwriting was conducted at a good profit margin and investment income increased substantially, reflecting both a greater base of assets and the higher yields that prevailed throughout the year in the fixed income sector. All earnings of the insurance subsidiaries are being retained to build additional capital strength.

Our investment in the insurance companies reflects a first major step in our efforts to achieve a more diversified base of earning power. The success of this effort is indicated by the attainment of earnings in the subsidiaries during 1967 which substantially exceeded the earnings attributable to a larger capital investment in the textile business. We expect that there will be years in the future when the order of relative profitability is reversed, reflecting different stages in both the insurance and textile cycles. However, we believe it is an added factor of strength to have these two unrelated sources of earnings rather than to be solely exposed to the conditions of one industry, as heretofore.

Future Objectives

Management continues to be alert to opportunities to expand our operations in either the textile business, the insurance business or unrelated areas. We feel it is essential that we not repeat the history of the 1956-1966 period, when over-all earnings on average invested capital of over $30 million were something less than zero. Our present liquid resources held in readily marketable common stocks are available for either acquisition of new businesses or for application toward greater profit opportunities in our present operations. In addition, we will not hesitate to borrow money to take advantage of attractive opportunities. Our goal is to obtain a reasonably stable and substantial level of earning power commensurate with the capital employed in the business.

Malcolm G. Chace, Jr.

Chairman of the Board

Kenneth V. Chace

President

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Berkshire Hathaway Letter to Stockholders, 1968 Annual Report

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 additional 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 sustained on the sale of fixed assets, we expect an improved over-all textile operating situation.

Insurance Subsidiaries

National Indemnity Company and National Fire and Marine Insurance Company continue their splendid operating performance under Jack Ringwalt. Premium volume increased 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. Investment 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 investments 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 underwriting 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 approximately $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 expansion 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 Newspapers, Inc. publishes five weekly newspapers in the Omaha, Nebraska area, with paid circulation 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 continue under the able management of Stanford Lipsey.

Kenneth V. Chace

President