BerkshireHathaway Letters 1971 to 1976
1972 年信件
To the Stockholders of Berkshire Hathaway Inc.:
致伯克希尔·哈撒韦公司全体股东：
It is a pleasure to report that operating earnings in 1971, excluding capital gains, amounted to more than 14% of beginning shareholders’ equity. This result—considerably above the average of American industry—was achieved in the face of inadequate earnings in our textile operation, making clear the benefits of redeployment of capital inaugurated five years ago. It will continue to be the objective of management to improve return on total capitalization (long term debt plus equity), as well as the return on equity capital. However, it should be realized that merely maintaining the present relatively high rate of return may well prove more difficult than was improvement from the very low levels of return which prevailed throughout most of the 1960’s.
今天很高兴报告我们 1971 年的经营收益，扣除资本利得，我们的股东权益比年初增加了 14%。这个结果大大高于美国工业平均值，而且是在我们纺织业务对利润贡献不大的情况下，这些都归功于我们五年前开始的业务重组。管理层的目标依然是提高总资本（长期债务加上净资产）的回报率和股本回报率。然而，应该认识到，仅仅维持目前相对较高的回报率，很可能比从 1960 年代大部分时间普遍存在的极低回报率中改善要困难得多。
Textile Operations
纺织业务
We, in common with most of the textile industry, continued to struggle throughout 1971 with inadequate gross margins. Strong efforts to hammer down costs and a continuous search for less price-sensitive fabrics produced only marginal profits. However, without these efforts we would have operated substantially in the red. Employment was more stable throughout the year as our program to improve control of inventories achieved reasonable success.
和大多数纺织企业一样，我们整个 1971 年一直在毛利率不足的状况中挣扎。管理层努力降低成本，生产一些价格不敏感产品，却只能产生微薄的利润。然而，如果没有这些努力我们可能会陷入亏损的状态。年内就业情况较为稳定，原因是我们改善存货控制的计划取得合理成效。
As mentioned last year, Ken Chace and his management group have been swimming against a strong industry tide. This negative environment has only caused them to intensify their efforts. Currently we are witnessing a mild industry pickup which we intend to maximize with our greatly strengthened sales force. With the improvement now seen in volume and mix of business, we would expect better profitability—although not of a dramatic nature—from our textile operation in 1972.
正如去年说的，肯·蔡斯 (Ken Chace) 和他的管理层在这样一个不景气的行业中苦苦抗争。大环境不好他们付出了更多的努力。最近行业温和回暖，我们努力加强的销售力量产生了一些正面作用。随着我们纺织业务的改善，我们期望在明年纺织业务会有更好的利润率(尽管不会太高)。
Insurance Operations
保险业务
An unusual combination of factors—reduced auto accident frequency, sharply higher effective rates in large volume lines, and the absence of major catastrophes—produced an extraordinarily good year for the property and casualty insurance industry. We shared in these benefits, although they are not without their negative connotations.
交通事故的降低，大额保单实际费率的大幅上升以及今年没有发生特大灾难，这些因素加在一起使我们的财产和意外险业务今年表现异常的好。虽然还存在一些不足，我们还是因此受惠。
Our traditional business—and still our largest segment—is in the specialized policy or non-standard insured. When standard markets become tight because of unprofitable industry underwriting, we experience substantial volume increases as producers look to us. This was the condition several years ago, and largely accounts for the surge of direct volume experienced in 1970 and 1971. Now that underwriting has turned very profitable on an industry-wide basis, more companies are seeking the insureds they were rejecting a short while back and rates are being cut in some areas. We continue to have underwriting profitability as our primary goal and this may well mean a substantial decrease in National Indemnity’s direct volume during 1972. Jack Ringwalt and Phil Liesche continue to guide this operation in a manner matched by very few in the business.
我们的传统业务(仍然是最大的业务)是专业保单和非标准保险业务，当标准保险市场由于无利可图的承保竞争而变得供应趋紧时，生产商主动找我们投保，因此我们的业务增长了很多，最近几年的行业情况都是如此。现在保险业在整个行业里已经变得非常有利可图，更多的公司在这一领域寻找曾被拒绝的投保人，一些地区投保费用也正在下降。但是我们继续保持承保盈利为我们的主要目标，这意味着在 1972 年国民保险公司的业务量将发生重大下降。杰克·林沃尔特和菲尔·列谢继续以业内无与匹敌的方式推进这些业务。
Our reinsurance business, which has been developed to a substantial operation in just two years by the outstanding efforts of George Young, faces much the same situation. We entered the reinsurance business late in 1969 at a time when rates had risen substantially and capacity was tight. The reinsurance industry was exceptionally profitable in 1971, and we are now seeing rate-cutting as well as the formation of well-capitalized aggressive new competitors. These lower rates are frequently accompanied by greater exposure. Against this background we expect to see our business curtailed somewhat in 1972. We set no volume goals in our insurance business generally—and certainly not in reinsurance—as virtually any volume can be achieved if profitability standards are ignored. When catastrophes occur and underwriting experience sours, we plan to have the resources available to handle the increasing volume which we will then expect to be available at proper prices.
再保险业务也是相同的状况，在两年中实现了很快的发展，这都要归功于 George Young 的杰出努力。我们在 1969 年末进入再保险领域，那时保费费率上升很快，承保能力紧张。再保险业务 1971 年利润非常可观。如今保费费率下降，又出现了很多资本充足的强大竞争对手。较低的保费费率往往伴随着较大的风险敞口。在这种背景下，我们预计 1972 年我们的业务会有所缩减。我们不会为我们的保险业务设置目标(再保险业务也是如此)，因为如果忽略盈利，任何虚幻的目标都可以实现。当大灾难出现和承保业务恶化索赔上升时，我们希望我们有能力调集足够的资金来处理这些问题。
We inaugurated our “home-state” insurance operation in 1970 by the formation of Cornhusker Casualty Company. To date, this has worked well from both a marketing and an underwriting standpoint. We have therefore further developed this approach by the formation of Lakeland Fire & Casualty Company in Minnesota during 1971, and Texas United Insurance in 1972. Each of these companies will devote its entire efforts to a single state seeking to bring the agents and insureds of its area a combination of large company capability and small company accessibility and sensitivity. John Ringwalt has been in overall charge of this operation since inception. Combining hard work with imagination and intelligence, he has transformed an idea into a well organized business. The “home-state” companies are still very small, accounting for a little over $1.5 million in premium volume during 1971. It looks as though this volume will more than double in 1972 and we will develop a more creditable base upon which to evaluate underwriting performance.
我们的住宅保险业务 (Home-State) 开始于 1970 年成立的内布拉斯加州居民意外险公司 (Cornhusker Casualty)。迄今为止，公司在市场销售或是保费水平上都发展的很好。因此我们 1971 年在明尼苏达州成立莱克兰火灾事故保险公司 (Lakeland Fire&Casualty)，1972 年在德克萨斯州成立得州联合保险公司 (Texas United Insurance)。每一家公司都将把全部精力投入到各自单独的州，为本地区的代理商和投保人提供大公司的水准，和小公司一样的方便、灵活的服务。John Ringwalt 一直全面负责这项业务，他工作勤奋又很有天分，把自己的想法付诸实践。这些”本土化”业务现在仍然比较小，1971 年只有 150 万的保费收入。我们估计 1972 年保费收入会翻倍。我们将建立更好的考核标准，对绩效进行评估。
A highlight of 1971 was the acquisition of Home & Automobile Insurance Company, located in Chicago. This company was built by Victor Raab from a small initial investment into a major auto insurer in Cook County, writing about $7.5 million in premium volume during 1971. Vic is cut from the same cloth as Jack Ringwalt and Gene Abegg, with a talent for operating profitably accompanied by enthusiasm for his business. These three men have built their companies from scratch and, after selling their ownership position for cash, retain every bit of the proprietary interest and pride that they have always had.
1971 年的亮点是收购了位于芝加哥的家庭和汽车保险公司 (Home & Automobile Insurance)。这家公司是由维克多·拉布 (Victor Raab) 通过对库克县一家大型汽车保险公司的少量初始投资起家的，1971 年保费收入为 750 万。 Victor Raab 和 Jack Ringwalt，Gene Abegg 一样很有商业天赋，而且对工作充满激情。这三个人白手起家把公司不断发展壮大，在把公司卖给了伯克希尔得到了现金之后，现在仍然痴迷于自己的工作，并因此感到自豪。
While Vic has multiplied the original equity of Home & Auto many times since its founding, his ideas and talents have always been circumscribed by his capital base. We have added capital funds to the company, which will enable it to establish branch operations extending its highly-concentrated and on-the-spot marketing and claims approach to other densely populated areas.
Vic 创立公司后公司实现了快速发展，但是他的才能受制于缺乏资本。我们为公司注入了大量的资本金，这将使公司能够建立分支机构拓展业务，并将高度集中的现场营销和理赔方法拓展到其他人口稠密地区。
All in all, it is questionable whether volume added by Home & Auto, plus the “home-state” business in 1972, will offset possible declines in direct and reinsurance business of National Indemnity Company. However, our large volume gains in 1970 and 1971 brought in additional funds for investment at a time of high interest rates, which will be of continuing benefit in future years. Thus, despite the unimpressive prospects regarding premium volume, the outlook for investment income and overall earnings from insurance in 1972 is reasonably good.
总之，增加的 Home & Auto 汽车保险业务，加上 Home-State 住宅保险业务，能否抵消国民保险公司再保险业务的下降，是值得商榷的。然而，我们在 1970 年和 1971 年获得的大量保费收入，在高利率时期将为投资业务带来了额外的资金，这将在未来几年持续受益。因此，尽管保费收入的前景不尽人意，我们保险业务的投资收益和整体前景还是相当好的。
Banking Operations
银行业务
Our banking subsidiary, The Illinois National Bank & Trust Company, continued to lead its industry as measured by earnings as a percentage of deposits. In 1971, Illinois National earned well over 2% after tax on average deposits while (1) not using borrowed funds except for very occasional reserve balancing transactions; (2) maintaining a liquidity position far above average; (3) recording loan losses far below average; and (4) utilizing a mix of over 50% time deposits with all consumer savings accounts receiving maximum permitted interest rates throughout the year. This reflects a superb management job by Gene Abegg and Bob Kline.
我们的银行子公司伊利诺伊国民银行和信托公司，以收益占存款的百分比衡量，继续引领行业，1971 年我们的平均存款的税后利润超过了 2%，这些都是在我们 (1) 没有借款(除了偶然性的准备金平衡交易外)，(2) 保持远高于平均水平的流动性头寸，(3) 贷款损失率远低于平均水平，(4) 超过 50% 的定期存款，所有消费者储蓄账户支付了法定允许的最高利率。这些成就都要归功于吉恩·阿贝格 (Gene Abegg) 和鲍勃·克莱恩 (Bob Kline) 卓越的管理。
Interest rates received on loans and investments were down substantially throughout the banking industry during 1971. In the last few years, Illinois National’s mix of deposits has moved considerably more than the industry average away from demand money to much more expensive time money. For example, interest paid on deposits has gone from under $1.7 million in 1969 to over $2.7 million in 1971. Nevertheless, the unusual profitability of the Bank has been maintained. Marketing efforts were intensified during the year, with excellent results.
在 1971 年，整个银行业的贷款和投资利率大幅下降。最近几年，伊利诺斯国民银行从活期资金转向更昂贵的定期资金，存款结构已经大大高于行业平均水平。例如，存款所付利息已经从 1969 年的 170 万增加到了 1971 年的 270 万。尽管如此，银行仍然保持着不同寻常的盈利能力。年内市场推广力度加大，成效显著。
With interest rates even lower now than in 1971, the banking industry is going to have trouble achieving gains in earnings during 1972. Our deposit gains at Illinois National continue to come in the time money area, which produces only very marginal incremental income at present. It will take very close cost control to enable Illinois National to maintain its 1971 level of earnings during 1972.
现在的利率比 1971 年还低，银行业将难以在 1972 年实现收益增长。伊利诺斯国民银行的存款收入主要来自于定期存款，但现在仅产生非常微不足道的增量收入。要想使我们 1972 年的利润达到 1971 年的水平，需要非常严格的成本控制。
Financial
Because of the volume gains being experienced by our insurance subsidiaries early in 1971, we re-cast Berkshire Hathaway’s bank loan so as to provide those companies with additional capital funds. This financing turned out to be particularly propitious when the opportunity to purchase Home & Auto occurred later in the year.
因为 1971 年我们保险附属子公司的增长，我们重新申请了伯克希尔的银行贷款，来为这些子公司提供额外的资本金。这项融资效果显得特别正确，尤其是当我们今年有机会收购家庭和汽车保险公司时。
Our insurance and banking subsidiaries possess a fiduciary relationship with the public. We retain a fundamental belief in operating from a very strongly financed position so as to be in a position to unquestionably fulfill our responsibilities. Thus, we will continue to map our financial future for maximum financial strength in our subsidiaries as well as at the parent company level.
我们的保险和银行子公司受托于公众，我们的基本理念是，要以雄厚的资本金为基础来运营，以便能够不折不扣地履行我们的责任。因此，我们将会继续规划好我们的融资计划，以在我们的子公司和母公司层面实现最强大的财务实力。
Warren E. Buffett
沃伦·巴菲特
Chairman of the Board
董事长
March 13, 1972
1972 年 3 月 13 日
1973 年信件
To the Stockholders of Berkshire Hathaway Inc.:
致伯克希尔·哈撒韦公司全体股东：
Operating earnings of Berkshire Hathaway during 1972 amounted to a highly satisfactory 19.8% of beginning shareholders’ equity. Significant improvement was record in all of our major lines of business, but the most dramatic gains were in insurance underwriting profit. Due to an unusual convergence of favorable factors—diminishing auto accident frequency, moderating accident severity, and an absence of major catastrophes—underwriting profit margins achieved a level far above averages of the past or expectations of the future.
1972 年伯克希尔的经营收益令人兴奋的达到了年初股东权益的 19.8%。我们所有的主要业务都取得了显著改善。但最大的利润贡献是我们的保险承保业务。由于有利因素的异常趋同——汽车事故频率降低、事故严重程度缓和以及没有重大灾难——承保利润率远高于过去对未来预期的平均水平。
While we anticipate a modest decrease in operating earnings during 1973, it seems clear that our diversification moves of recent years have established a significantly higher base of normal earning power. Your present management assumed policy control of the company in May, 1965. Eight years later, our 1972 operating earnings of $11,116,256 represent a return many-fold higher than would have been produced had we continued to devote our resources entirely to the textile business. At the end of the 1964 fiscal year, shareholders’ equity totaled $22,138,753. Since that time, no additional equity capital has been introduced into the business, either through cash sale of through merger. On the contrary, some stock has been reacquired, reducing outstanding shares by 14%. The increase in book value per share from $19.46 at fiscal year-end 1964 to $69.72 at 1972 year-end amounts to about 16.5% compounded annually.
虽然我们预测 1973 年经营收益会略有降低，但是近年来我们的多元化的举措已经建立了一个明显更高的盈利基础。我们在 1965 年接管伯克希尔，假定我们继续将资金投入到纺织业务中，我们的利润将是非常低的。八年后 1972 年的经营收益为 11,116,256 美元，这比我们继续将资本完全投入纺织业务所产生的回报高出许多倍。 1964 年底，伯克希尔的股东权益总额为 22,138,753 美元。从那时起，我们没有把额外的资本投入纺织业务，无论是现金购买或者通过合并。相反，我们对股票进行了回购，减少了 14% 流通股。每股账面价值从 1964 年的 19.46 美元增加到 1972 年底的 69.72 美元，年复合增长率为 16.5%。
Our three major acquisitions of recent years have all worked out exceptionally well—from both the financial and human standpoints. In all three cases, the founders were major sellers and received significant proceeds in cash—and, in all three cases, the same individuals, Jack Ringwalt, Gene Abegg and Vic Raab, have continued to run the businesses with undiminished energy and imagination which have resulted in further improvement of the fine records previously established.
近年来，不论从财务方面还是人力方面，我们的三项主要收购表现的都非常的好。在这三个收购中，创始人是主要卖方，在将公司卖给我们时收到了现金，同时 Jack Ringwalt，Gene Abegg 和 Vic Raab 三个人继续不遗余力地经营着企业，热情和想象力丝毫没有减少，使公司的业务继续保持好的发展势头。
We will continue to search for logical extensions of our present operations, and also for new operations which will allow us to continue to employ our capital effectively.
我们将继续稳健拓展现有的主要业务，同时也开拓新业务，使我们的资本更有效率的运用。
Textile Operations
纺织业务
As predicted in last year’s annual report, the textile industry experienced a pickup in 1972. In recent years, Ken Chace and Ralph Rigby have developed an outstanding sales organization enjoying a growing reputation for service and reliability. Manufacturing capabilities have been restructed to complement our sales strengths.
正如去年年报所说的，我们的纺织业务 1972 年有了些起色。这几年，Ken Chace 和 Ralph Rigby 建立了一支出色的销售队伍，在服务和信任度上享有越来越高的声誉。我们对产品线进行了调整，使其可以与我们的销售相适应。
Helped by the industry recovery, we experienced some payoff from these efforts in 1972. Inventories were controlled, minimizing close-out losses in addition to minimizing capital requirements; product mix was greatly improved. While the general level of profitability of the industry will always be the primary factor in determining the level of our textile earnings, we believe that our relative position within the industry has noticeably improved. The outlook for 1973 is good.
受惠于行业复苏，我们的努力在 1972 年获得了一些成绩。除了最大限度的减少资本需求，库存也得到了控制，还最大限度地减少了生产线的关停损失，产品结构也大大提高了。虽然行业的总体盈利水平将始终是决定我们纺织业务收入水平的主要因素，但是我们相信，我们在行业的相对竞争力亦得到了很大的提升。 1973 年的前景应该会比较好。
Insurance Underwriting
保险承保业务
Our exceptional underwriting profits during 1972 in the large traditional area of our insurance business at National Indemnity present a paradox. They served to swell substantially total corporate profits for 1972, but the factors which produced such profits induced exceptional amounts of new competition at what be believe to be a non-compensatory level of rates. Over-all, we probably would have retained better prospects for the next five years if profits had not risen so dramatically this year.
1972 年，国民保险公司在传统保险领域获得卓越的承保利润，这与现实经营环境貌似相冲突。 1972 年公司利润大增，但这样的利润导致产生大量的新竞争对手，我们认为这是一种非补偿性的利润水平。总之，如果今年利润没有这样大幅的增加，我们反而会预测未来 5 年发展前景良好。
Substantial new competition was forecast in our annual report for last year and we experienced in 1972 the decline in premium volume that we stated such competition implied. Our belief is that industry underwriting profit margins will narrow substantially in 1973 or 1974 and, in time, this may produce an environment in which our historical growth can be resumed. Unfortunately, there is a lag between deterioration of underwriting results and tempering of competition. During this period we expect to continue to have negative volume comparisons in our traditional operation. Our seasoned management, headed by Jack Ringwalt and Phil Liesche, will continue to underwrite to produce a profit, although not at the level of 1972, and base our rates on long-term expectations rather than short-term hopes. Although this approach has meant dips in volume from time to time in the past, it has produced excellent long-term results.
我们在去年年度报告里已经预测了将会有大量新的竞争对手出现，依据是去年的保费量的下降。我们认为行业承保利润率在 1973-1974 年将会大幅收窄，但这反而可能迟早会产生新的竞争格局，使我们历史上的那种增长得以继续。不幸的是，承保业绩的恶化与竞争的缓和之间存在滞后，在这段时间，我们希望继续减少我们的传统业务保单数量。我们经验丰富的管理层(由 Jack Ringwalt 和 Phil Liesche 领导)将继续坚持承保盈利，虽然利润水平不会像 1972 年那样高，但我们的费率水平是基于长期而非短期的。虽然现在情况可能意味着保单量继续下滑，但长期来看我们的业绩会很好。
Also as predicted in last year’s report, our reinsurance division experienced many of the same competitive factors in 1972. A multitude of new organizations entered what has historically been a rather small field, and rates were often cut substantially, and we believe unsoundly, particularly in the catastrophe area. The past year turned out to be unusually free of catastrophes and our underwriting experience was good.
正如去年报告预测的那样，我们的再保险部门也同样在 1972 年经历了许多相似的竞争。大量新公司进入到这个原本就不大的市场，而且费率水平也出现了大幅下降，尤其是在可能发生巨大灾难的区域。由于 1972 年没有出现重大灾难，我们承保业务运转良好。
George Young has built a substantial and profitable reinsurance operation in just a few years. In the longer term we plan to be a very major factor in the reinsurance field, but an immediate expansion of volume is not sensible against a background of deteriorating rates. In our view, underwriting exposures are greater than ever. When the loss potential inherent in such exposures becomes an actuality, repricing will take place which should give us a chance to expand significantly.
George Young 在几年时间里就已经建立起一个规模可观且有利可图的的再保险业务。从长远来看，我们计划成为该领域的领头羊。但是在价格战费率不断恶化的背景下，冒然增加规模不是一个明智的做法。在我们看来，承保的风险比以往任何时候都大。如果潜在的损失变为现实，市场将进行重新定价，这将给我们一个大幅扩张的机会。
In the “home state” operation, our oldest and largest such company, Cornhusker Casualty Company, operating in Nebraska only, achieved good underwriting results. In the second full year, the home state marketing appeal has been proven with the attainment of volume on the order of one-third of that achieved by “old line” giants who have operated in the state for many decades.
在住宅保险业务 (Home-State) 上，我们历史最悠久、规模最大的内布拉斯加州居民意外险公司 (Cornhusker Casualty) 取得了非常理想的业绩，该公司只在内布拉斯加州有业务。在第二年，该业务的市场竞争力就得到证明，承保量达到了在该州经营数十年的”老牌”巨头的三分之一左右。
Out two smaller companies, in Minnesota and Texas, had unsatisfactory loss ratios on very small volume. The home state managements understand that underwriting profitably is the yardstick of success and that operations can only be expanded significantly when it is clear that we are doing the right job in the underwriting area. Expense ratios at the new companies are also high, but that is to be expected when they are in the development stage.
我们在明尼苏达州和得克萨斯州的两家较小的公司发生了少量的承保亏损。该业务的管理层明白对我们业绩衡量的唯一标尺为承保的盈利能力，我们只有在我们的业务被证明是明智的情况下，才开始拓展我们的业务。新公司的营运费用较高，这符合发展初期的预期。
John Ringwalt has done an excellent job of launching this operation, and plans to expand into at least one additional state during 1973. While there is much work yet to be done, the home state operation appears to have major long-range potential.
John Ringwalt 在新业务启动运营方面做的非常出色，并计划在 1973 年将业务至少扩展到另外一个州。现在还有很多的工作需要做。本土化保险业务的前景会相当的好。
Last year it was reported than we had acquired Home and Automobile Insurance Company of Chicago. We felt good about the acquisition at the time, and we feel even better now. Led by Vic Raab, this company continued its excellent record in 1972. During 1973 we expect to enter the Florida (Dade County) and California (Los Angeles) markets with the same sort of specialized urban auto coverage which Home and Auto has practiced so successfully in Cook County. Vic has the managerial capacity to run a much larger operation. Our expectation is that Home and Auto will expand significantly within a few years.
去年我们说了我们收购了位于芝加哥的家庭和汽车保险公司 (Home & Auto)。那时我们感觉良好，现在感觉更好。公司由 Vic Raab 领导， 1972 年业务仍然相当不错。我们计划明年进入佛罗里达州的戴德县 (Dade County) 和加州的洛杉矶 (Los Angeles) 市场，提供在库克县 (Cook County) 已经成功实践的相同类型的专业城市汽车保险。 Vic Raab 拥有管理大公司的才能。我们预期该业务将在未来几年大幅度扩张。
Insurance Investment Results
保险投资业务
We were most fortunate to experience dramatic gains in premium volume from 1969 to 1971 coincidental with virtually record-high interest rates. Large amounts of investable funds were thus received at a time when they could be put to highly advantageous use. Most of these funds were placed in tax-exempt bonds and our investment income, which has increased from $2,025,201 in 1969 to $6,755,242 in 1972, is subject to a low effective tax rate.
我们非常幸运的经历了 1969 年到 1971 年保费收入的大幅增长，费率几乎创历史新高，我们因此而受惠。在投资市场非常有利的时候，收到大量可投资资金。大部分资金投资在了免税债券。我们的投资收益从 1969 年的 2,025,201 美元增加到 1972 年的 6,755,242 美元，但实际税率很低。
Our bond portfolio possess unusually good call protection, and we will benefit for many years to come from the high average yield of the present portfolio. The lack of current premium growth, however, will moderate substantially the growth in investment income during the next several years.
我们的债券投资组合具有非常好的看涨期权保护，我们将从当前投资组合的高平均收益率中受益多年。然而，当前保费增长的乏力，将在未来几年内大幅减缓投资收益的增长。
Banking Operations
Our banking subsidiary, The Illinois Bank and Trust Co. of Rockford, maintained its position of industry leadership in profitability. After-tax earnings of 2.2% on average deposits in 1972 are the more remarkable when evaluated against such moderating factors as: (1) a mix of 50% time deposits heavily weighted toward consumer savings instruments, all paying the maximum rates permitted by law; (2) an unvaryingly strong liquid position and avoidance of money-market borrowings; (3) a loan policy which has produced a net charge-off ratio in the last two years of about 5% of that of the average commerical bank. This record is a direct tribute to the leadership of Gene Abegg and Bob Kline who run a bank where the owners and the depositors can both eat well and sleep well.
我们的银行子公司(伊利诺斯州银行及信托公司)，继续在盈利水平上保持行业领先地位，1972 年平均存款的税后收益为 2.2%，这在对比以下不利因素时更为显著： (1) 定期存款组合占消费者储蓄工具的比重 50%，并按法律允许的最高利率支付利息，(2) 保持了强劲的流动性头寸并避免了从货币市场借款，(3) 这两年贷款产生的坏账率水平只有一般商业银行平均值的 5%。这些好成绩都归功于 Gene Abegg 和 Bob Kline 的领导。在他们的领导下，股东和储户都可以吃的好睡的好。
During 1972, interest paid to depositors was double the amount paid in 1969. We have aggressively sought consumer time deposits, but have not pushed for large “money market” certificates of deposit although, during the past several years, they have generally been a less costly source of time funds.
1972 年我们向储户支付的利息是 1969 年的两倍。我们积极寻求客户定期存款，却没有追求大型货币市场存单，尽管过去几年这是一种成本较低的定期资金来源。
During the past year, loans to our customers expanded approximately 38%. This is considerably more than indicated by the enclosed balance sheet which includes $10.9 million in short-term commercial paper in the 1971 loan total, but which has no such paper included at the end of 1972.
1972 年客户贷款增加了大约 38%，实际比资产负债表里所示的要多得多，因为该表在 1971 年的贷款总额中包括 1090 万美元的短期商业票据，但去年没有此类票据。
Our position as “Rockford’s Leading Bank” was enhanced during 1972. Present rate structures, a decrease in investable funds due to new Federal Reserve collection procedures, and a probable increase in already substantial non-federal taxes make it unlikely that Illinois National will be able to increase its earnings during 1973.
1972 年，我们作为”罗克福德领先银行”的地位得到了加强。目前的利率结构、由于新的美联储税收程序而导致的可投资基金的减少，以及相当可观的非联邦税的可能增加，使得伊利诺伊州国民银行在 1973 年利润增长变得困难。
Financial
融资
On March 15, 1973, Berkshire Hathaway borrowed $20 million at 8% from twenty institutional lenders. This loan is due March 1, 1993, with principal repayments beginning March 1, 1979. From the proceeds, $9 million was used to repay our bank loan and the balance is being invested in insurance subsidiaries. Periodically, we expect that there will be opportunities to achieve significant expansion in our insurance business and we intend to have the financial resources available to maximize such opportunities.
1973 年 3 月 15 日，伯克希尔从 20 家机构借款 2000 万美元，利率为 8%。这批借款在 1993 年 3 月 1 日到期，本金从 1979 年 3 月 1 日开始偿还。其中 900 万被用来偿还我们的银行贷款，其余的将投资于我们的保险子公司。周期性地，我们预计将有机会实现我们的保险业务的重大扩张，我们加强公司资本金，最大限度的为这些机会的到来准备。
Our subsidiaries in banking and insurance have major fiduciary responsibilities to their customers. In these operations we maintain capital strength far above industry norms, but still achieve a good level of profitability on such capital. We will continue to adhere to the former objective and make every effort to continue to maintain the latter.
我们的银行和保险子公司对其客户负有重要的信托责任。 在这些业务中，我们保持了远高于行业标准的资本实力，而且保持了良好的盈利水平。 我们将继续坚持前者的目标，并尽一切努力继续保持后者。
Warren E. Buffett
沃伦·巴菲特
Chairman of the Board
董事长
March 16, 1973
1973 年 3 月 16 日
1974 年信件
To the Stockholders of Berkshire Hathaway Inc.:
致伯克希尔·哈撒韦公司全体股东：
Our financial results for 1973 were satisfactory, with operating earnings of $11,930,592, producing a return of 17.4% on beginning stockholders’ equity. Although operating earnings improved from $11.43 to $12.18 per share, earnings on equity decreased from the 19.8% of 1972. This decline occurred because the gain in earnings was not commensurate with the increase in shareholders’ investment. We had forecast in last year’s report that such a decline was likely. Unfortunately, our forecast proved to be correct.
1973 年我们的财务状况是比较令人满意的。经营收益 11,930,592 美元，初始股东权益的回报率达 17.4%。虽然每股收益从 11.43 美元上升至 12.18 美元，但和 1972 年的 19.8% 的利润率相比，回报率有所下跌。出现这种下降是因为增加的利润与增加的股东投资不相称。在去年的年度报告中我们预料到了出现这种情况的可能性。很不幸，我们的预测成为了现实。
Our textile, banking, and most insurance operations had good years, but certain segments of the insurance business turned in poor results. Overall, our insurance business continues to be a most attractive area in which to employ capital.
我们的纺织、银行，和大部分的保险业务表现都不错，但保险业某些特定的部门却有些不尽如人意。总体上来说，保险仍将继续是投入资金的最理想的行业之一。
Management’s objective is to achieve a return on capital over the long term which averages somewhat higher than that of American industry generally—while utilizing sound accounting and debt policies. We have achieved this goal in the last few years, and are trying to take those steps which will enable us to maintain this performance in the future. Prospects for 1974 indicate some further decline in rate of return on our enlarged capital base.
管理层的目标是，在运用合理的会计和债务策略的同时，长期的资本回报率平均水平略高于美国行业整体水平。过去的几年我们一直保持了这样的成绩，也正在努力采取各种措施帮助我们继续维持这一成绩。预计 1974 年在我们扩大资本的基础上仍将面临回报率的进一步下降。
Textile Operations
纺织业务
Textile demand remained unusually strong throughout 1973. Our main problems revolved around shortages of fiber, which complicated operations and resulted in something less than full utilization of loom capacity. Prices of some fibers skyrocketed during the year.
1973 年对纺织品的需求异常强劲。问题是需要复杂操作流程的纤维发生短缺，导致织机产能利用率不足。某些纤维的价格在这一年飙升。
Cost of Living Council regulations prevented the pricing of many finished products at levels of some of our competitors. However, profits were reasonably commensurate with our capital investment, although below those that apparently might have been achieved had we been able to price at market levels. The textile business has been highly cyclical and price controls may have served to cut down some of the hills while still leaving us with the inevitable valleys.
价格管制委员会的规定使很多制成品的价格没有提高到某些竞争对手的价位。但是利润回报跟我们的资金投入相比还是合理的，虽然如果我们按照市场水平定价的话回报可能会更高一些。纺织业有很强的周期性，价格管制可能会削峰，但不会填谷(上涨有限，下跌无限)。
Because of the extraordinary price rises in raw materials during 1973, which show signs of continuing in 1974, we have elected to adopt the “lifo” method of inventory pricing. This method more nearly matches current costs against current revenues, and minimizes inventory “profits” included in reported earnings. Further information on this change is included in the footnotes to our financial statements.
由于 1973 年原材料的价格飞涨，这一趋势在 1974 年有望继续，我们决定采用’后进先出法’的存货估价方法。这种方法能够更好的反映当前的成本，并使得报告利润中的存货’利润’最小化。关于这一改变更多的信息，可以查看我们财务报表的附注部分。
Insurance Operations
保险业务
During 1973, Jack Ringwalt retired as President of National Indemnity Company after an absolutely brilliant record since founding the business in 1940. He was succeeded by Phil Liesche who, fortunately for us, possesses the same underwriting and managerial philosophy that worked so well for Jack.
1973 年，杰克·林沃尔特 (Jack Ringwalt) 从国民保险总裁的职务上退休。自 1940 年创立这家公司以来，Jack 引领它取得了绝佳的经营记录。接替他的是菲尔·列舍 (Phil Liesche)，杰克有一套行之有效的承保和管理哲学，幸运的是，Phil 坚持同样的行事方式。
Our traditional business, specialized auto and general liability lines conducted through National Indemnity Company and National Fire and Marine Insurance Company, had an exceptionally fine underwriting year during 1973. We again experienced a decline in volume. Competition was intense, and we passed up the chance to match rate-cutting by more optimistic underwriters. There currently are faint indications that some of these competitors are learning of the inadequacy of their rates (and also of their loss reserves) which may result in easing of market pressures as the year develops. If so, we may again experience volume increases.
我们主要的保险业务是国民保险经营的专业汽车和一般责任险。 1973 年的承保状况都非常好，但业务量再一次下降了。竞争很激烈，我们拒绝像其他更为乐观的承保者一样调低保险费率1。目前隐约的迹象表明，竞争对手中的一些已经意识到了他们利润率(以及损失储备金)的不足。或许这可以缓解市场上的压力。如果真是这样的话，那我们就可以再次期望承保量上升了。
Our reinsurance operation had a somewhat similar year—good underwriting experience, but difficulty in maintaining previous volume levels. This operation, guided by the tireless and well-directed efforts of George Young, has been a major profit producer since its inception in 1969.
再保险业务也差不多面临了同样的局面——整体表现不错，但很难达到之前的交易额水平。这一部门由兢兢业业的 George Young 领导，自其 1969 年成立以来就一直是主要的盈利部门。
Our “home state” insurance companies made excellent progress in Nebraska and Minnesota, with both good growth in volume and acceptable loss ratios. We began operations late in the year in Iowa. To date, our big problem has been Texas. In that state we virtually had to start over during 1973 as the initial management we selected proved incapable of underwriting successfully. The Texas experience has been expensive, and we still have our work cut out for us. Overall, however, the home state operation appears to have a promising potential.
我们的住宅保险业务 (Home-State) 在内布拉斯加州和明尼苏达州的发展很好，业务量有了显著增长，亏损率也在可接受范围内。年底爱荷华州的业务也已开始运营。目前最大的问题在德克萨斯州，由于原来的管理层无法成功地经营承保业务，我们实际上不得不在 1973 年另起炉灶。得克萨斯州的经历代价高昂，我们的工作会十分艰巨。但是，从总体来看，Home-State 业务有着巨大的潜力。
Our specialized urban auto operation, Home and Automobile Insurance Company, experienced very poor underwriting in Chicago during 1973. It would appear that rates are inadequate in our primary Cook County marketing area, although the current energy situation confuses the picture. The question is whether possible lowered accident frequency because of reduced driving will more than offset continuing inflation in medical and repair costs, as well as jury awards. We believe that inflation will hurt us more than reduced driving will help us, but some of our competitors appear to believe otherwise.
1973 年，我们的专业城市汽车保险运营商 Home & Auto 在芝加哥的承保情况非常糟糕。看起来在库克县这一主要运营地区的费率是不够充分的，尽管当前的能源局势让事情更加复杂。问题在于，人们驾车出行次数相对减少而可能降低了的事故发生频率，是否会抵消医疗和修理赔付以及诉讼费用的上升。我们认为，相对于事故低发对我们的帮助，通货膨胀导致的价格上升对我们的冲击更大，但貌似一些竞争对手不这么认为。
Home and Auto expanded into Florida and California during the year, but it is too early to know how these moves will prove out financially.
Home & Auto 保险公司在这一年将业务拓展到了佛罗里达和加利福尼亚两州，但目前还不能确定这样做会不会带来收益。
A contributing factor in our unsatisfactory earnings at Home and Auto during 1973 was an accounting system which was not bringing information to management on a sufficiently timely basis.
1973 年公司业绩较差，其中一个影响因素是会计系统，它没有及时有效的把信息反馈到管理层。这个问题现在正在得到纠正。
On the investment side of our insurance operation, we made substantial additional commitments in common stocks during 1973. We had significant unrealized depreciation—over $12 million—in our common stock holdings at year-end, as indicated in our financial statements. Nevertheless, we believe that our common stock portfolio at cost represents good value in terms of intrinsic business worth. In spite of the large unrealized loss at year-end, we would expect satisfactory results from the portfolio over the longer term.
1973 年在保险部门的投资方面，我们过多地集中于普通股。如我们的财务报表所示，我们在年底持有的普通股投资中，出现超过1200万美元的浮亏。尽管如此，我们相信我们的普通股投资组合就企业内在价值而言是物有所值的。 尽管年底有大量未实现亏损，但从长期来看，这一投资组合会给我们带来满意的收益。
Banking Operations
银行业务
The Illinois National Bank & Trust Co. of Rockford again had a record year in 1973. Average deposits were approximately $130 million, of which approximately 60% were time deposits. Interest rates were increased substantially in the important consumer savings area when regulatory maximums were raised at mid-year.
位于罗克福德的伊利诺伊国民银行和信托公司又取得了创纪录的一年。平均存款接近 1.3 亿美元，其中 60% 为定期存款。自年中起政策允许的上限提升了之后，消费者储蓄利率有了大幅上升。
Despite this mix heavily weighted toward interest bearing deposits, our operating earnings after taxes (including a new Illinois state income tax) were again over 2.1% of average deposits.
尽管这一政策对计息存款影响很大，但我们的税后利润(包括一项新的伊利诺伊州的收益所得税)还是高出了平均存款的 2.1%。
We continue to be the largest bank in Rockford. We continue to maintain unusual liquidity. We continue to meet the increasing loan demands of our customers. And we continue to maintain our unusual profitability. This is a direct tribute to the abilities of Gene Abegg, Chairman, who has been running the Bank since it opened its doors in 1931, and Bob Kline, our President.
我们现在仍然是罗克福德最大的银行，仍旧保持了超常的流动性，仍然能够满足客户不断增长的贷款需求，并且仍旧维持了非比寻常的盈利能力。这要直接归功于董事会主席吉恩·阿贝格 Gene Abegg 和总裁鲍勃·克莱恩 Bob Kline 的领导才干，前者从 1931 年银行成立起就一直管理着它的业务。
Merger With Diversified Retailing Company, Inc.
收购多元零售公司(DRC)
Your Directors have approved the merger of Diversified Retailing Company, Inc. into Berkshire Hathaway Inc. on terms involving issuance of 195,000 shares of Berkshire stock for the 1,000,000 shares of Diversified stock outstanding. Because Diversified and its subsidiaries own 109,551 shares of Berkshire, the net increase in the number of shares of Berkshire outstanding after giving effect to this transaction will not exceed 85,449. Various regulatory approvals must be obtained before this merger can be completed, and proxy material will be submitted to you later this year so that you may vote upon it.
董事们已经同意了将多元化零售公司并入伯克希尔公司，条款涉及发行 195,000 股伯克希尔哈撒韦股票，以换取 100 万股已发行的多元化零售公司股票。鉴于多元化零售公司及其子公司持有 109,551 股伯克希尔的股份，因此在本次交易生效后，这笔交易带来的伯克希尔流通股份净增长不会超过 85,449 股。要完成这笔交易，还必须要获得各种监管部门的批准，委托资料将在今年晚些时候提交给您，以便您对其进行表决。
Diversified Retailing Company, Inc., though subsidiaries, operates a chain of popular-priced women’s apparel stores and also conducts a reinsurance business. In the opinion of management, its most important asset is 16% of the stock of Blue Chip Stamps.
多元零售公司经营着一系列价格受欢迎的女装连锁店，同时还经营着再保险业务(哥伦比亚保险公司，承接旗下保险子公司的再保险业务)。但在管理层看来，这家公司最重要的资产是持有蓝筹印花公司 16% 股份。
Blue Chip Stamps
蓝筹印花公司
Our holdings of stock in Blue Chip Stamps at year-end amounted to approximately 19% of that company’s outstanding shares. Since year-end, we have increased our holdings so that they now represent approximately 22.5%: implementation of the proposed merger with Diversified Retailing Company, Inc. would increase this figure to about 38.5%.
去年年底我们所持有的蓝筹印花的股份约占其总发行股份的 19%。自年底以来，我们增加了持股比例，现在约占 22.5%，而合并多元零售公司将使这一比例增加到 38.5%。
Our equity in earnings of Blue Chip Stamps became significant for the first time in 1973, and posed an accounting question as to just what period’s earnings should be recognized by Berkshire Hathaway Inc. as applicable to the financial statements covered by this annual report.
我们对蓝筹印花权益在 1973 年第一次显得如此重要，也就带来了一个会计上的问题：那就是哪一段时期的利润收入才应被记录到我们今年的财务报告中去呢。
Blue Chip’s fiscal year ends on the Saturday closest to February 28, or two months after the fiscal year-end of Berkshire Hathaway Inc. Or, viewed alternatively, their year ends ten months prior to Berkshire Hathaway’s. An acceptable accounting choice for us, and one which, if made, would not have required an auditor’s disclaimer as to scope, was to recognize in our 1973 income an equity of $632,000 in Blue Chip’s earnings for their year ended March 3, 1973 with regard to the fewer shares of Blue Chip we owned during this earlier period. But such an approach seemed at odds with reality, and would have meant a ten month lag each year in the future. Therefore, we chose to reflect as 1973 income our equity of $1,008,000 in Blue Chip’s earnings based upon unaudited interim earnings through November as publicly reported by Blue Chip Stamps and with regard to our shareholdings during 1973. Because we made this choice of unaudited but current figures, as opposed to the alternative of audited but far from current figures, Peat, Marwick, Mitchell & Co. were unable to express an opinion on our 1973 earnings attributable to Blue Chip Stamps.
蓝筹印花的会计年度截止于 2 月 28 号的周六，是伯克希尔会计年度结束之后两个月。或者说，他们的会计年度比我们的提早十个月结束。对于我们来说，一个可以接受的办法就是(如果做出的话，就不需要审计师对范围的免责声明)，鉴于我们之前拥有的蓝筹印花较少的股份，在我们 1973 年的收入中囊括进蓝筹印花 632,000 美元的权益收入(他们 1973 年的会计年截止于 3 月 3 号)。但是这种做法似乎与现实情况不符，并且意味着未来每年都要滞后 10 个月。因此，我们的选择是在蓝筹印花公布的截止到 11 月份的未经审计的中期收入的基础上，将 1,008,000 美元的蓝筹印花权益包括在我们 1973 年的收入中。由于我们采用了未经审计但却是当期的数据，而不是那种审计过却早已过时的数据， Peat,Marwick,Mitchell&Co. 会计公司(毕马威前身)无法对我们 1973 年盈利中来自蓝筹印花的部分发表意见。
The annual report of Blue Chip Stamps, which will contain financial statements for the year ending March 2, 1974 audited by Price, Waterhouse and Company, will be available in early May. Any shareholder of Berkshire Hathaway Inc. who desires an annual report of Blue Chip Stamps may obtain it at that time by writing Mr. Robert H. Bird, Secretary, Blue Chip Stamps, 5801 South Eastern Avenue, Los Angeles, California 90040.
蓝筹印花的年度报告，包括由 Price, Waterhouse & Co. 普华永道审计的截止于 1974 年 3 月 2 日的财务报表，在五月初就会公布。伯克希尔任何有兴趣获得报告的股东，都可以到时写信给加利福尼亚州洛杉矶东南大街 5801 号蓝筹印花公司秘书 Mr.RobertH.Bird,邮编 90040。
Blue Chip’s trading stamp business has declined drastically over the past year or so, but it has important sources of earning power in its See’s Candy Shops subsidiary as well as Wesco Financial Corporation, a 54% owned subsidiary engaged in the savings and loan business. We expect Blue Chip Stamps to achieve satisfactory earnings in future years related to capital employed, although certainly at a much lower level than would have been achieved if the trading stamp business had been maintained at anything close to former levels.
蓝筹印花公司的印花销售业务自去年来有了大幅下滑，但是其子公司喜诗糖果公司以及 Wesco 金融公司还有相当强大的盈利能力，后者是一家拥有 54% 股权的从事储蓄和贷款业务的子公司。预计蓝筹印花公司未来几年会有不错的盈利收入，当然如果印花业务不下滑的话，利润收入肯定会更高。
Your Chairman is on the Board of Directors of Blue Chip Stamps, as well as Wesco Financial Corporation, and is Chairman of the Board of See’s Candy Shops Incorporated. Operating management of all three entities is in the hands of first-class, able, experienced executives.
您的董事长是蓝筹印花，Wesco 金融公司的董事会成员，以及喜诗糖果公司的董事会主席，三家企业的管理人员也都是一流的、能干且经验丰富的。
Sun Newspapers, Inc.
太阳报业
In the 1969 annual report we commented on the purchase of Sun Newspapers Inc., a group of weekly papers published in the metropolitan Omaha area. Since that time we have not commented on their operations in the text of our annual reports, nor have we consolidated their financial results since the operation, because of the small investment involved, has been “financially insignificant.”
在 1969 年的年度报告中，我们提到了对太阳报业的收购，这是一家在奥马哈大都会地区发行的周报企业。自那时以来，我们一直没有在年度报告中提到它的运营情况，也没有对他们的财务业绩进行合并，因为由于涉及的投资很小，”财务合并意义不大”。
During 1973 it was made quite apparent that such insignificance did not extend to publishing quality. On May 7th Sun Newspapers was awarded a Pulitzer Prize for local investigative reporting (the first time in history that a weekly had won in this category) for its special section of March 30,1972 relating to Boys Town. We reported the extraordinary contrast between decreasing services and mounting wealth that had taken place since Father Flanagan’s death in 1948.
1973 年期间，很明显这种微不足道的状态并没有影响到出版物的质量。5 月 7 日，太阳报业因其 1972 年 3 月 30 日关于儿童城的特别报道获得了普利策本地调查报道奖(这是历史上第一次周刊在这一领域获此荣誉)。这篇文章报道了自从 1948 年 Flanagan 神父去世后，不断积累的财富和不断恶化的服务质量之间的巨大反差。(注：巴菲特通过费城国税局纳税申报单发现蛛丝马迹，儿童城资产 2 亿，资产每年以 1800 万速度增长，是支出的 4 倍，这个赚钱机器每年收入 2500 万，投资收益完全可以囊括所有支出，根本无需募捐。但每年筹款金额是圣母大学的 3 倍，每个儿童甚至可以分到 20 万。)
In addition to the Pulitzer Prize, the reporting job also won the Public Service Award of Sigma Delta Chi, the national society of professional journalists, as well as seven other national awards.
除了普利策奖之外，该报纸还赢得了国家职业记者协会 Sigma Delta Chi 的公共服务奖以及其他七项国家奖项。
Our congratulations go to Paul Williams, Editor, and Stan Lipsey, Publisher, as well as the entire editorial staff of Sun Newspapers for their achievement, which vividly illustrated that size need not be equated with significance in publishing.
我们要祝贺编辑 Paul Williams，出版商 Stan Lipsey，还有太阳报业的全体工作人员，他们的成就让我们明白，出版的水平并不一定和报纸的规模划等号。
Warren E. Buffett
沃伦·巴菲特
Chairman of the Board
董事长
March 29, 1974
1974 年 3 月 29 日
1975 年信件
To the Stockholders of Berkshire Hathaway Inc.:
致伯克希尔·哈撒韦公司全体股东：
Operating results for 1974 overall were unsatisfactory due to the poor performance of our insurance business. In last year’s annual report some decline in profitability was predicted but the extent of this decline, which accelerated during the year, was a surprise. Operating earnings for 1974 were $8,383,576, or $8.56 per share, for a return on beginning shareholders’ equity of 10.3%. This is the lowest return on equity realized since 1970. Our textile division and our bank both performed very well, turning in improved results against the already good figures of 1973. However, insurance underwriting, which has been mentioned in the last several annual reports as running at levels of unsustainable profitability, turned dramatically worse as the year progressed.
由于我们的保险业务表现不佳，1974 年公司整体经营业绩并不令人满意。在去年年报中已预测盈利会有所下降，但是下降的程度却是意料之外的。 1974 年的经营收益为 8,383,576 美元，即每股 8.56 美元，初始股本回报率为 10.3%。这是自 1970 年以来实现的最差股本收益率。我们的纺织业务和银行业务都表现的非常好，与 1973 年早前良好的数字相比，业绩有所改善。然而，在过去几年的年报中提到的，以不可持续的利润率运营的保险承保业务，随着时间的推移，行业状况急剧恶化。
The outlook for 1975 is not encouraging. We undoubtedly will have sharply negative comparisons in our textile operation and probably a moderate decline in banking earnings. Insurance underwriting is a large question mark at this time—it certainly won’t be a satisfactory year in this area, and could be an extremely poor one. Prospects are reasonably good for an improvement in both insurance investment income and our equity in earnings of Blue Chip Stamps. During this period we plan to continue to build financial strength and liquidity, preparing for the time when insurance rates become adequate and we can once again aggressively pursue opportunities for growth in this area.
1975 年的前景也并不乐观。毫无疑问，我们纺织业务将出现严重的下滑，银行业务的收入也可能会温和的下降。保险承保业务在这时是一个很大的问题，在这个领域今年显然不是令人满意的年份，还可能是十分糟糕的一年。对于保险的投资收入以及我们在蓝筹印花公司股权收益增长的前景是十分看好的。在此期间，我们计划继续增强财务实力和流动性，为保险费率变得合适的时机做好准备，并再次积极寻求这一领域的扩张机会。
Textile Operations
纺织业务
During the first nine months of 1974 textile demand was exceptionally strong, resulting in very firm prices. However, in the fourth quarter significant weaknesses began to appear, which have continued into 1975.
在 1974 年前的九个月，纺织业务的需求猛增，导致价格非常坚挺。然而，第四季度纺织业务的疲软开始出现了，这会持续到 1975 年。
We currently are operating at about one‐third of capacity. Obviously, at such levels operating losses must result. As shipments have fallen, we continuously have adjusted our level of operations downward so as to avoid building inventory.
我们目前在这项业务里的产能只运行约三分之一。显然闲置三分之二必然会带来经营损失。随着出货量的下降，我们继续向下调整我们运营水平，以避免增加存货。
Our products are largely in the curtain goods area. During a period of consumer uncertainty, curtains may well be high on the list of deferrable purchases. Very low levels of housing starts also serve to dampen demand. In addition, retailers have been pressing to cut inventories generally, and we probably are feeling some effect from these efforts. These negative trends should reverse in due course, and we are attempting to minimize losses until that time comes.
我们的产品大多集中在窗帘领域。在经济不稳定的时期里，非必需品窗帘可能会是可延迟购买商品列表的前几名。极低的房屋开工水平也会抑制需求。同时，零售商大都开始敦促消减库存，我们可能从这些努力中受到一些影响。这些负面的趋势将在适当的时候扭转，我们试图在这个时期到来之前最小化我们的损失。
Insurance Underwriting
保险业务
In the last few years we consistently have commented on the unusual profitability in insurance underwriting. This seemed certain eventually to attract unintelligent competition with consequent inadequate rates. It also has been apparent that many insurance organizations, major as well as minor, have been guilty of significant underreserving of losses, which inevitably produces faulty information as to the true cost of the product being sold. In 1974, these factors, along with a high rate of inflation, combined to produce a rapid erosion in underwriting results.
在过去的几年里，我们一直在评论保险承保中的异常盈利能力。这可能最终会引起愚蠢的行业竞争，使得费率不足。很显然，很多保险机构，不论大小，都存在严重的损失准备金计提不足的问题，这不可避免地会导致关于销售产品真实成本的错误信息。在 1974 年，这些因素及高通货膨胀率，使得保险承保的业绩大幅下降。
The costs of the product we deliver (auto repair, medical payments, compensation benefits, etc.) are increasing at a rate we estimate to be in the area of 1% per month. Of course, this increase doesn’t proceed in an even flow but, inexorably, inflation grinds very heavily at the repair services – to humans and to property – that we provide. However, rates virtually have been unchanged in the property and casualty field for the last few years. With costs moving forward rapidly and prices remaining unchanged, it was not hard to predict what would happen to profit margins.
我们经营的产品的成本(汽车修理，医疗赔付，补偿金等)我们估计每月以1%的增速增长。当然，这种增长并不是平稳的进行，但是通货膨胀无情地使我们提供的人身和财产保险的维修服务损失很大。然而，财险和意外伤害险费率事实上在最近几年几乎没有变化。由于成本快速上升，而价格保持不变，不难预测会有怎样的边际利润。
Best’s, the authoritative voice of the insurance industry, estimates that in 1974 all auto insurance premiums in the United States increased only about 2%. Such a growth in the pool of dollars available to pay insured losses and expenses was woefully inadequate. Obviously, medical costs applicable to people injured during the year, jury awards for pain and suffering, and body shop charges for repairing damaged cars increased at a dramatically greater rate during the year. Since premiums represent the sales dollar and the latter items represent the cost of goods sold, profit margins turned sharply negative.
保险行业最权威的机构 Best’s 估计，1974 年美国全部汽车保险的保费只增加了 2%。这些可获得的资金的增长不足以支付保险损失和其他费用。很显然，今年用于人身伤害的医疗费用、陪审团对肉体和精神上的创伤的裁决费用以及对于汽车维修的费用在今年都大幅上涨。由于保费代表了销售收入，而后者代表了销售商品的成本，边际利润迅速变为亏损的了。
As this report is being written, such deterioration continues. Loss reserves for many giant companies still appear to be understated by significant amounts, which means that these competitors continue to underestimate their true costs. Not only must rates be increased sufficiently to match the month‐by‐month increase in cost levels, but the existed expense‐ revenue gap must be overcome. At this time it appears that insurers must experience even more devastating underwriting results before they take appropriate pricing action.
在我写这封报告时，这样的恶化仍在继续。很多大公司提取的损失准备金仍在很大程度上低估，这意味着这些公司仍然低估了他们的真实损失。保险费率不仅应该大幅提高，以匹配每月增加的成本水平，还应该弥补目前出现的费用同收入的缺口。就目前来看，保险公司在采取合适的定价行动之前，他们会遭受更为严重的承保业绩损失。
All major areas of insurance operations, except for the “home state” companies, experienced significantly poorer results for the year.
除了 Home-State 保险业务以外，所有保险业务中主要领域的业绩在今年都很糟糕。
The direct business of National Indemnity Company, our largest area of insurance activity, produced an underwriting loss of approximately 4% after several years of high profitability. Volume increased somewhat, but we are not encouraging such increases until rates are more adequate. At some point in the cycle, after major insurance companies have had their fill of red ink, history indicates that we will experience an inflow of business at compensatory rates. This operation, headed by Phil Liesche, a most able underwriter, is staffed by highly profit‐oriented people and we believe it will provide excellent earnings in most future years, as it has in the past.
国民保险的传统业务是我们最大的保险业务板块，在经历了连续几年的高盈利之后，今年产生了近 4% 的承保损失。保单量一定程度上增加了，但是在费率更加合适之前，我们并不期待这样的业务增加。历史表明，在这一周期的一些时间点上，也就是主要的保险公司发生亏损之后，我们会在补偿性的费率提高下获得业绩的回暖。这项业务是由最能干的承保人菲尔·列舍 (Phil Liesche) 主导的，由高度以盈利为导向的员工组成，我们相信在未来的几年内它会带来极好地收入，正如它过去一样。
Intense competition in the reinsurance business has produced major losses for practically every company operating in the area. We have been no exception. Our underwriting loss was something over 12% – a horrendous figure, but probably little different from the average of the industry. What is even more frightening is that, while about the usual number of insurance catastrophes occurred during 1974, there really was no “super disaster” which might have accounted for the poor figures of the industry. Rather, a condition of inadequate rates prevails, particularly in the casualty area where we have significant exposure. Our reinsurance department is run by George Young, an exceptionally competent and hardworking manager. He has cancelled a great many contracts where prices are totally inadequate, and is making no attempt to increase volume except in areas where premiums are commensurate with risk. Based upon present rate levels, it seems highly unlikely that the reinsurance industry generally, or we, specifically, will have a profitable year in 1975.
再保险业务激烈的竞争中，行业里几乎每一家公司都造成了很大的损失。我们也不例外。我们承保业务的损失大约超过了12%，这是一个可怕的数字，但可能与行业平均水平相差不大。更令人担忧的是，1974 年发生的保险业务重大事故的数量同往常差不多，实际上并没有发生可能导致现在这么可怜的盈利数据的超级灾难。相反，较普遍的情况是保险费率严重不足，尤其是在我们有重大风险敞口的意外伤害领域。我们的再保险业务是由 George Young 管理的，他是一个非常有能力而且很勤奋的管理人。他取消了很多价格明显不合理的合同，除了在那些保费收入与风险相当的领域，并没有采取措施来增加销售额。依照目前的费率水平，整个再保险行业很难在 1975 年获得盈利，特别是我们。
Our “home state” companies, under the leadership of John Ringwalt, made good progress in 1974. We appear to be developing a sound agency group, capable of producing business with acceptable loss ratios. Our expense ratios still are much too high, but will come down as the operation develops into units of economic size. The Texas problem which was commented upon in last year’s report seems to be improving. We consider the “home state” operation one of our most promising areas for the future.
在 John Ringwalt 的领导下，我们的住宅保险业务 (Home-State) 在 1974 年业绩不错。看来我们正在发展一个健全的代理机构，有能力在可接受的赔付率下开展业务。我们的费用率仍然很高，但随着业务发展到适度的经济规模下，费用率就会降低。去年的报告中提到的德克萨斯州的问题正在改善。我们认为 Home-State 保险业务是我们未来最有前景的领域之一。
Our efforts to expand Home and Automobile Insurance Company into Florida proved disastrous. The underwriting loss from operations in that market will come to over $2 million, a very large portion of which was realized in 1974. We made the decision to drop out of the Florida market in the middle of 1974, but losses in substantial amounts have continued since that time because of the term nature of insurance contracts, as well as adverse development of outstanding claims. We can’t blame external insurance industry conditions for this mistake. In retrospect, it is apparent that our management simply did not have the underwriting information and the pricing knowledge necessary to be operating in the area. In Cook County, where Home and Auto’s volume traditionally has been concentrated, evidence also became quite clear during 1974 that rates were inadequate. Therefore, rates were increased during the middle of the year but competition did not follow; consequently, our volume has dropped significantly in this area as competitors take business from us at prices that we regard as totally unrealistic.
我们将 Home & Auto 业务扩展到弗罗里达州的努力证明结果损失惨重。该州的承保损失达到 200 万美元，这是 1974 年实现的损失中的一大部分。我们在 1974 年中期决定退出弗罗里达州的市场，但是从那以后大量的损失仍然持续发生，这是因为保险合同的长期性以及未决赔款的不利发展。我们不能将这个错误归结为外部保险业的状况不佳。回顾过去，很明显我们的管理层没有掌握这个地区运作所需的承保信息以及定价知识。在 Home & Auto 运营的根据地库克县，也有很明确的证据指出在 1974 年保险费率是不足的。因此，保险费率在今年年中上涨，而竞争对手并没有跟进，因此竞争对手以我们认为不切实际的价格从我们手中抢走了业务，我们在这一领域的销售量大幅下滑。
While the tone of this section is pessimistic as to 1974 and 1975, we consider the insurance business to be inherently attractive. Our overall return on capital employed in this area – even including the poor results of 1974 – remains high. We have made every effort to be realistic in the calculation of loss and expense reserves. Many of our competitors are in a substantially weakened financial position, and our strong capital picture leaves us prepared to grow significantly when conditions become right.
尽管在 1974-1975 年保险业务的基调是悲观的，但我们认为保险业务本身还是很吸引人的。即使包括 1974 年的糟糕业绩，我们在这个领域的整体已投资资本回报率仍然很高。在计算损失和管理费用时，我们已尽一切努力做到实事求是。我们的许多竞争对手的财务状况都相当疲弱，而我们雄厚的资本状况使我们准备好在条件成熟时实现大幅增长。
Insurance Investment Results
保险投资业务
Investment funds generated from the operation of our insurance companies continued to grow during 1974. Investment income grew correspondingly, and produced overall profitability for the insurance group despite the poor underwriting results. As the insurance group balance sheet shows, we have increased liquidity substantially. This trend has continued since yearend. With poor underwriting and with generally weakened capital ratios throughout the insurance industry, such a higher level of liquidity is appropriate and comforting. It eliminates the possible temptation to write business at any price, simply to maintain cash flow, which is a major problem faced by many companies.
1974 年，我们的保险公司运营产生的投资资金继续增长。投资收入相应增长，尽管承保业绩不佳，但仍为保险集团带来了整体盈利能力。正如保险集团的资产负债表所显示的，我们的流动性大幅增加。这一趋势自去年底以来一直在持续。在整个保险业承保业绩不佳、资本比率普遍下降的情况下，这种更高水平的流动性是合适和令人放心的。它消除了为维持现金流而不惜以任何价格承保业务的可能诱惑，而这正是许多公司面临的主要问题。
Several comments regarding market value of securities may be appropriate. Between the insurance group and the bank, we have approximately $140 million invested in bonds. About $20 million of this investment is in very short-term Treasury securities or commercial paper, neither of which is subject to other than negligible market fluctuation. This leaves about $120 million in bonds of longer maturities, with a very large percentage of this sum in municipal bonds with an average maturity of perhaps twelve to fifteen years. Because of our large liquid position and inherent operating characteristics of our financial businesses, it is quite unlikely that we will be required to sell any quantity of such bonds under disadvantageous conditions. Rather, it is our expectation that these bonds either will be held to maturity or sold at times believed to be advantageous.
关于证券的市值需要作一些评述。在保险集团和银行之间，我们大约有 1.4 亿美元投资于债券。其中约 2,000 万美元投资于短期国库券或商业票据，这两种证券的市场波动都很小。剩下的约 1.2 亿美元是期限较长的债券，其中很大一部分是平均期限为 12 至 15 年的市政债券。由于我们有大量的流动资金和金融业务固有的经营特点，我们是不太可能被迫在不利条件下出售相关债券。相反，我们预计这些债券要么将持有至到期，要么在有利的时机出售。
However, on any given day the market value of our bond portfolio is determined by yields available on comparable securities. Such market values can swing dramatically. For example, during 1974 a leading index of high-grade municipals increased in yield from a level of 5.18% at the beginning of the year to 7.08% at the end of the year. In the bond market, each 1/100 of 1% change in yield is referred to as a “basis point” and thus, a change of 1% in interest levels is referred to as 100 basis points. As measured by the index, bond yields increased 190 basis points during 1974. On a fifteen-year bond, an increase of 10 basis points translates to about a 1% downward change in market value. On $120 million of such bonds, it is therefore clear that a change of 10 basis points in yields (which easily can happen in one day) changes the market value of our bond portfolio by something over $1 million. Thus, in 1974 our bond portfolio, which probably had a market value roughly approximating its carrying value at the start of the year, had a market value substantially below carrying value at the end of the year. The market value of our bond portfolio will continue to move in both directions in response to changes in the general level of yields but we do not consider such movements, and the unrealized gains and losses that they produce, to be of great importance as long as adequate liquidity is maintained.
然而，在任何一天，我们债券投资组合的市场价值是由可比证券的收益率决定的。这样的市场价值可能会大幅波动。例如，1974 年高等级市政债券的领先指数收益率从年初的 5.18% 上升到年底的 7.08%。在债券市场上，收益率每变化 1% 的百分之一被称为一个基点，因此，利率水平每变化 1% 被称为 100 个基点。以该指数衡量， 1974 年债券收益率上升了 190 个基点。对于 15 年期债券来说，10 个基点的上升意味着市场价值下降 1%。因此，对于 1.2 亿美元的此类债券，很明显，收益率变化 10 个基点（这很容易在一天内发生）显然会使我们债券组合的市值变化超过 100 万美元。因此，在 1974 年，我们的债券投资组合在年初的市场价值可能大致接近其账面价值，但在年底的市场价值却大大低于账面价值。我们债券组合的市场价值将继续随着收益率总体水平的变化而双向变动，但我们认为，只要保持足够的流动性，这种变动及其产生的未实现损益并不十分重要。
Our stock portfolio declined again in 1974 – along with most equity portfolios – to the point that at yearend it was worth approximately $17 million less than its carrying value. Again, we are under-no pressure to sell such securities except at times that we deem advantageous and it is our belief that, over a period of years, the overall portfolio will prove to be worth more than its cost. A net capital loss was realized in 1974, and very likely again will occur in 1975. However, we consider several of our major holdings to have great potential for significantly increased values in future years, and therefore feel quite comfortable with our stock portfolio. At this writing, market depreciation of the portfolio has been reduced by more than half from yearend figures, reflecting higher general stock market levels.
1974 年，我们的股票投资组合随同大多数股票投资组合一起再次下跌，到了年底，它的价值比账面价值少了大约 1700 万美元。同样，我们没有压力出售这些证券，除非在我们认为有利的时候，而且我们相信，经过几年的时间，整个投资组合将证明价值大于成本。 1974 年实现了资本净损失，1975 年很可能再次发生。然而，我们认为我们持有的几只主要股票在未来几年具有显著增值的巨大潜力，因此对我们的股票投资组合感到相当满意。在撰写本文时，该投资组合的市场贬值已较年底数减少了一半以上，反映出股市总体水平的上升。
Banking Operations
银行业务
There is little new to say about Illinois National Bank and Trust. With Eugene Abegg running the operation, the exceptional has become the commonplace. Year after year he continues to run one of the most profitable banks in the United States, while paying maximum interest rates to depositors, operating with unusual levels of liquidity, and maintaining a superior level of loan quality.
对于伊利诺伊国民银行和信托公司，已经没有太多新的话可说了。在尤金·阿贝格的领导下，非凡的业绩已经成为常态。年复一年，他继续经营着美国最赚钱的银行之一，同时向储户支付最高利率，以非同寻常的流动性水平开展业务，并保持着卓越的贷款质量。
Two factors specifically should be noted in looking at the separate income statement of the bank. The effect of filing a consolidated tax return is reflected in their figures, with the tax loss of the insurance operations used to offset the tax liability created by banking operations. Also, a property tax formerly paid by the bank now is assessed to the parent company and is reflected in corporate selling and administrative expense. Because of accruals, this had a double effect at both the bank and corporate level in 1974.
在查看银行的单独损益表时，应特别注意两个因素。提交综合纳税申报表的影响反映在他们的数字中，保险业务的税收损失被用来抵消银行业务产生的税负。另外，以前由银行缴纳的财产税现在由母公司承担，并反映在企业销售和管理费用中。由于权责发生制，这在 1974 年对银行和公司产生了双重影响。
Under present money market conditions, we expect bank earnings to be down somewhat in 1975 although we believe they still are likely to compare favorably with those of practically any banking institution in the country.
在目前货币市场条件下，我们预期 1975 年银行的盈利会下降，尽管我们相信它们同国内那些银行机构相比更有优势。
Blue Chip Stamps
蓝筹印花公司
During 1974 we increased our holdings of Blue Chip Stamps to approximately 25.5% of the outstanding shares of that company. Overall, we are quite happy about the results of Blue Chip and its prospects for the future. Stamp sales continue at a greatly reduced level, but the Blue Chip management has done an excellent job of adjusting operating costs. The See’s Candy Shops, Inc. subsidiary had an outstanding year, and has excellent prospects for the future.
在 1974 年，我们继续增加对蓝筹印花公司的持股，大约占流通股的 25.5%。整体来看，我们很看好蓝筹印花公司的业绩和它未来的前景。印花的销售持续大幅下跌，但是蓝筹印花公司的管理层在调整运营成本方面做得很好。子公司喜诗糖果公司 (See’s Candy Shops, Inc.) 今年的业绩很好，而未来也有极好的前景。
Your Chairman is on the Board of Directors of Blue Chip Stamps, as well as Wesco Financial Corporation, a 64% owned subsidiary, and is Chairman of the Board of See’s Candy Shops, Inc. We expect Blue Chip Stamps to be a source of continued substantial earning power for Berkshire Hathaway Inc.
你们的董事长是蓝筹印花公司的董事会成员，同时也是拥有 64% 控股子公司威斯科金融公司 (Wesco Financial) 的董事会成员，还是喜诗糖果公司的董事会主席。我们预计蓝筹印花会成为伯克希尔持续强劲盈利能力的来源。
The annual report of Blue Chip Stamps, which will contain financial statements for the year ended March 1, 1975 audited by Price, Waterhouse and Company, will be available in May. Any shareholder of Berkshire Hathaway Inc. who desires an annual report of Blue Chip Stamps may obtain it at any time by writing Mr. Robert H. Bird, Secretary, Blue Chip Stamps, 5801 South Eastern Avenue, Los Angeles, California 90040.
蓝筹印花公司的年报会在 5 月份发布，这里面包含截止到 1975 年 3 月 1 日年度财务状况，是由普华永道公司审计的。任何伯克希尔·哈撒韦公司的股东想要获得一份蓝筹印花公司的年报，可以随时写信给 Robert H. Bird 先生，地址为加利福尼亚州洛杉矶市东南大街 5801 号，蓝筹印花公司秘书 Robert H.Bird 先生收，邮编 90040。
Merger with Diversified Retailing Company, Inc.
合并DRC多元零售公司
As you previously have been informed, the proposed merger with Diversified Retailing Company, Inc. was terminated by the respective Boards of Directors on January 28, 1975. We continue to view such a merger as eventually desirable, and hope to reopen the subject at some future time.
如您之前所知，之前提议的对于多元零售公司的收购在 1975 年 1 月 28 日被各自的董事会终止。我们仍旧认为这项合并是值得的，并希望在未来的某个时间重新讨论这项收购。
Warren E. Buffett
沃伦·巴菲特
Chairman of the Board
董事长
March 31, 1975
1975 年 3 月 31 日
1976 年信件
To the Stockholders of Berkshire Hathaway Inc.:
致伯克希尔·哈撒韦公司全体股东：
Last year, when discussing the prospects for 1975, we stated “the outlook for 1975 is not encouraging.” This forecast proved to be distressingly accurate. Our operating earnings for 1975 were $6,713,592, or $6.85 per share, producing a return on beginning shareholders’ equity of 7.6%. This is the lowest return on equity experienced since 1967. Furthermore, as explained later in this letter, a large segment of these earnings resulted from Federal income tax refunds which will not be available to assist performance in 1976.
去年讨论公司 1975 年的前景时，我们预测今年的前景不是那么令人满意。不幸的是，这个预言成真了。1975 年我们的经营收益为 6,713,592 美元，也就是每股收益 6.85 美元，初始股本回报率为 7.6%。这是自1967 年以来最低的回报率。然而，正如这封信后面分析的那样，经营收益中相当大的一部分来自联邦所得税退税，1976 年将无助于改善业绩。
On balance, however, current trends indicate a somewhat brighter 1976. Operations and prospects will be discussed in greater detail below, under specific industry titles. Our expectation is that significantly better results in textiles, earnings added from recent acquisitions, an increase in equity in earnings of Blue Chip Stamps resulting from an enlarged ownership interest, and at least a moderate improvement in insurance underwriting results will more than offset other possible negatives to produce greater earnings in 1976. The major variable—and by far the most difficult to predict with any feeling of confidence—is the insurance underwriting result. Present very tentative indications are that underwriting improvement is in prospect. If such improvement is moderate, our overall gain in earnings in 1976 likewise will prove moderate. More significant underwriting improvement could give us a major gain in earnings.
但是，总的来说，目前的局势表明 1976 年状况会有所好转。下面几个具体分行业的章节中会有关于运营和前景更详细的分析讨论。我们的预计是：纺织业的业绩会有明显改善，近期的收购会增加收益，所有权权益的扩大会提高蓝筹印花的权益回报，以及保险承保利润至少有适度的改善足以抵消其他的不利影响，1976 年将会产生可观的利润。目前最不确定的，完全没有把握且难以预测的是保险承保业绩。初步迹象表明，承保的前景会有所改善。如果这方面的改善是缓慢的，那我们整体盈利的增加也会很缓慢。保险承保业务如果可以大幅改善，那么我们的经营收益也会大量增加。
Textile Operations
纺织业务
During the first half of 1975 sales of textile products were extremely depressed, resulting in major production curtailments. Operations ran at a significant loss, with employment down as much as 53% from a year earlier.
1975 年上半年纺织品的销售低迷，导致主要产品减产。经营亏损显著，开工率比去年同期下降了 53% 。
In contrast with previous cyclical slumps, however, most textile producers quickly reduced production to match incoming orders, thus preventing massive industry‐wide accumulation of inventories. Such cutbacks caused quite prompt reflection at the mill operating level when demand revived at retail. As a result, beginning about midyear business rebounded at a fairly rapid rate. This “V” shaped textile depression, while one of the sharpest on record, also became one of the shortest ones in our experience. The fourth quarter produced an excellent profit for our textile division, bringing results for the year into the black.
然而，与以往的周期性衰退相比，多数纺织品生产商根据订单迅速减少了产量，因此防止了全行业大规模的存货积压。当零售恢复正常需求时，这种低库存在工厂运营层面快速反应，结果，年中业务就开始快速回升。这 “V” 形的纺织业的衰退，是记录中最明显的一次，同时也是持续时间最短的一次。第四季度我们的纺织部门获得了极好的利润，使全年业绩扭亏为盈。
On April 28, 1975 we acquired Waumbec Mills Incorporated and Waumbec Dyeing and Finishing Co., Inc. located in Manchester, New Hampshire. These companies have long sold woven goods into the drapery and apparel trade. Such drapery materials complement and extend the line already marketed through the Home Fabrics Division of Berkshire Hathaway. In the period prior to our acquisition, the company had run at a very substantial loss, with only about 55% of looms in operation and the finishing plant operating at about 50% of capacity. Losses continued on a reduced basis for a few months after acquisition. Outstanding efforts by our manufacturing, administrative and sales people now have produced major improvements, which, coupled with the general revival in textiles, have moved Waumbec into a significant profit position.
1975 年 4 月 28 日，我们收购了位于曼彻斯特新罕布什尔的 Waumbec Mills 公司和 Waumbec Dyeingand Finishing Co. 公司。这些公司长期以来一直在窗帘和服装行业销售梭织产品。这种窗帘材料补充和延伸了伯克希尔哈撒韦公司家用织物部门已经销售的产品线。在我们收购之前，该公司的亏损非常严重，只有约 55% 的织机在运行，染制厂只以 50% 的产能在运营。收购之后的几个月内亏损仍在继续，但是稍有减少。通过我们的制造商、管理人员和销售人员的杰出努力，情况已经有了很大的改进，同时也伴随着整个纺织业的复苏，Waumbec 公司现在已扭亏为盈了。
We expect a good level of profits from textiles in 1976. Continued progress is being made in the movement of Waumbec goods into areas of traditional marketing strength of Berkshire Hathaway, productivity should improve in both the weaving and finishing areas at Manchester, and textile demand continues to firm at decent prices.
我们预计 1976 年纺织部门会有不错的利润。持续性的项目已取得进展，曼彻斯特的 Waumbec 公司开始转产伯克希尔公司传统上营销具备优势领域的产品，并提升了织造和染整领域的生产效率，纺织品的持续需求态势，价格将稳定在合理的水平上。
We have great confidence in the ability of Ken Chace and his team to maximize our strengths in textiles. Therefore, we continue to look for ways to increase further our scale of operations while avoiding major capital investment in new fixed assets which we consider unwise, considering the relatively low returns historically earned on large scale investment in new textile equipment.
我们对 Ken Chace 及其团队在纺织品领域发挥其最大优势的能力充满信心。因此，我们将继续寻找方法以壮大经营规模，同时也避免对新的固定资产的资本投资，考虑到过去大规模投资新纺织设备所获得的资本回报相对较低，我们认为是不明智的。(收购代替建设)
Insurance Underwriting
保险承保业务
The property and casualty insurance industry had its worst year in history during 1975. We did our share – unfortunately, even somewhat more. Really disastrous results were concentrated in auto and long‐tail (contracts where settlement of loss usually occurs long after the loss event) lines.
1975 年是有史以来财产和意外险行业表现最差的一年。我们也不能例外，不幸的是，我们的表现甚至比整个行业还要糟。真正灾难性的承保亏损都集中在汽车保险和长尾保险方面(通常在损失事件发生后很久才进行损失结算的合同)。
Economic inflation, with the increase in cost of repairing humans and property far outstripping the general rate of inflation, produced ultimate loss costs which soared beyond premium levels established in a different cost environment. “Social” inflation caused the liability concept to be expanded continuously, far beyond limits contemplated when rates were established—in effect, adding coverage beyond what was paid for. Such social inflation increased significantly both the propensity to sue and the possibility of collecting mammoth jury awards for events not previously considered statistically significant in the establishment of rates. Furthermore, losses to policyholders which otherwise would result from mushrooming insolvencies of companies inadequately reacting to these problems are divided through Guaranty Funds among remaining solvent insurers. These trends will continue, and should moderate any optimism which otherwise might be justified by the sharply increased rates now taking effect.
由于人身和财产的赔付成本增长远远超过一般通货膨胀率，经济通货膨胀导致最终损失成本飙升，超过了在不同成本环境下确定的保费水平。”社会通货膨胀”导致责任概念不断扩大，远远超出了最初确定费率时预期的赔付上限，还增加了超过保险合同赔偿范围的项目。这种概念还大大增加了起诉的倾向，也增加了为以前在拟定费率时不在统计范围内的事件获得陪审团巨额裁决的可能性。此外，由于对这些问题反应迟钝的保险公司迅速出现破产，而其保单持有人的损失则通过担保基金，分配给其他剩余的有偿付能力的保险公司。这些趋势将继续下去，而且应该缓和目前生效的大幅提高的费率可能带来的任何乐观情绪。
Berkshire Hathaway’s insurance subsidiaries have a disproportionate concentration of business in precisely the lines which produced the worst underwriting results in 1975. Such lines produce unusually high investment income and, therefore, have been particularly attractive to us under previous underwriting conditions. However, our “mix” has been very disadvantageous during the past two years and it well may be that we will remain positioned in the more difficult part of the insurance spectrum during the inflationary years ahead.
伯克希尔的保险子公司的业务过于集中于 1975 年承保业绩最差的业务线上。这些业务线产生异常高的投资收入，因此，在以前的承保标准下，对我们特别有吸引力。然而，我们的这种保险结构在过去两年中处于非常不利的境地，在未来几年通胀高企的年代中，保险行业将进入更为困难的阶段，我们的这种不利地位很有可能会继续维持下去。
The only segment to show improved results for us during 1975 was the “home state” operation, which has made continuous progress under the leadership of John Ringwalt. Although still operating at a significant underwriting loss, the combined ratio improved from 1974. Adjusted for excess costs attributable to operations still in the start‐up phase, underwriting results are satisfactory. Texas United Insurance Company, a major problem a few years ago, has made outstanding progress since George Billing has assumed command. With an almost totally new agency force, Texas United was the winner of the “Chairman’s Cup” for achievement of the lowest loss ratio among the home state companies. Cornhusker Casualty Company, oldest and largest of the home state companies, continues its outstanding operation with major gains in premium volume and a combined ratio slightly under 100. Substantial premium growth is expected at the home state operation during 1976; the measurement of success, however, will continue to be the achievement of a low combined ratio.
1975 年保险业唯一值得一提的部门是住宅保险业务 (Home-State)，在 John Ringwalt 的领导下取得了持续的进展。尽管承保损失依然很大，但是综合比率还是比 1974 年有所改善。调整了仍处于启动阶段的运营所产生的超额成本，承保结果令人满意。德州联合保险公司 (Texas United Insurance) 是几年前的一个棘手的难题，自 George Billing 接手以来，取得了显著的进展。在凭借一支几乎全新的代理队伍，得克萨斯联合保险公司在 Home-State 保险公司中，以损失率最低的成绩赢得了 Chairman’s Cup 冠军。内布拉斯加意外险公司 (Cornhusker Casualty) 是 Home-State 业务中历史最久规模最大的，继续以它优良的运营能力获得了大量的承保收益，综合比率略低于 100。 1976 年该业务的保费收入预计还是可以大量增加的，然而，衡量成功的标准仍将是实现较低的综合比率。
Our traditional business at National Indemnity Company, representing well over half of our insurance volume, had an extraordinarily bad underwriting year in 1975. Although rates were increased frequently and significantly, they continually lagged loss experience throughout the year. Several special programs instituted in the early 1970s have caused significant losses, as well as a heavy drain on managerial time and energies. Present indications are that premium volume will show a major increase in 1976, and we hope that underwriting results will improve.
我们在国民保险公司的传统业务，占我们保险业务量的一半以上，但 1975 年承保结果却异常糟糕。尽管费率频繁地大额提升，但是他们全年仍在持续地亏损。 70 年代早期设立的几个特殊的项目造成了重大损失，同时也消耗了我们大量的管理时间和精力。目前迹象表明，1976 年保费会有所增加，我们希望承保业绩也能有所改善。
Reinsurance suffered the same problems as our direct business during 1975. The same remedial efforts were attempted. Because reinsurance contract settlements lag those of direct business, it well may be that any upturn in results from our direct insurance business will precede those of the reinsurance segment.
再保险业务在 1975 年遇到了和直接保险业务相同的问题，我们尝试了相同的补救措施。由于再保险合同的清算滞后于那些直接的业务合同，因此我们直接保险业务的业绩好转，很可能会先于再保险部门。
At our Home and Automobile Insurance Company subsidiary, now writing auto business only in the Cook County area of Illinois, experience continued very bad in 1975 resulting in a management change in October. John Seward was made President at that time, and has energetically and imaginatively implemented a completely revamped underwriting approach.
Home & Auto 家庭汽车保险公司现在只在伊利诺伊州的库克县地区经营汽车保险业务，1975 年的业绩持续恶化，导致了 10 月份管理层的变动。当时 John Seward 被任命为总裁，并积极而富有想象力地实施了一项彻底改革的承保方法。
Overall, our insurance operation will produce a substantial gain in premium volume during 1976. Much of this will reflect increased rates rather than more policies. Under normal circumstances such a gain in volume would be welcome, but our emotions are mixed at present. Underwriting experience should improve—and we expect it to—but our confidence level is not high. While our efforts will be devoted to obtaining a combined ratio below 100, it is unlikely to be attained during 1976.
总体来讲，1976 年我们保险业务的保费收入会增加很多。很大程度上是因为费率的提高而不是政策的改变。在正常的情况下，如此的增长很令人欣慰，但是我们现在的情绪却喜忧参半。保险承保的业绩仍需改善，我们希望是这样，但我们的信心不足。尽管我们会致力于使综合成本率达到 100 以下，但这在 1976 年几乎是不可能的。
Insurance Investments
保险投资业务
Gains in investment income were moderate during 1975 because premium volume remained flat and underwriting losses reduced funds available for investment. Invested assets, measured at cost at yearend, were close to identical with the level at the beginning of the year.
1975 年保险投资的收益不是很多，因为保费收入不多并且承保损失导致可投资资金不足。年底以成本计的投资资产，大概与年初的水平一致。
At the end of 1974 the net unrealized loss in the stock section of our portfolio amounted to about $17 million, but we expressed the opinion, nevertheless, that this portfolio overall represented good value at its carrying value of cost. During 1975 a net capital loss of $2,888,000 before tax credits was realized, but our present expectation is that 1976 will be a year of realized capital gain. On March 31, 1976 our net unrealized gains applicable to equities amounted to about $15 million. Our equity investments are heavily concentrated in a few companies which are selected based on favorable economic characteristics, competent and honest management, and a purchase price attractive when measured against the yardstick of value to a private owner.
1974 年底，我们投资组合中股票部分的未实现净损失约为 1700 万美元，但是我们坚信，不论如何，这个组合整体的账面价值相对于其投资成本而言，还是有着良好的投资价值的。 1975 年税收抵免前的投资净损失是 288.8 万美元，但是目前我们预计 1976 年会实现资本性盈利。 1976 年 3 月 31 日，我们普通股未变现的盈利总计约 1500 万美元。
When such criteria are maintained, our intention is to hold for a long time; indeed, our largest equity investment is 467,150 shares of Washington Post “B” stock with a cost of $10.6 million, which we expect to hold permanently.
我们股权投资主要集中于少数几家此种类型的公司：有着良好的经济护城河，称职且诚实的管理层，并且以私人所有者的价值尺度来衡量，购买价格很有吸引力。当这些要素都具备了，我们就打算长期持有；实际上，我们最大的股权投资是投资了 467,150 股 Washington Post 华盛顿邮报 B 股，成本约 1063 万美元，我们期望永久持有。
With this approach, stock market fluctuations are of little importance to us—except as they may provide buying opportunities—but business performance is of major importance. On this score we have been delighted with progress made by practically all of the companies in which we now have significant investments.
通过这种方法，股市的波动对我们的影响无关紧要，除非出现购买机会，但是公司的经营业绩仍旧是最重要的。在这方面，我们对几乎所有我们现在有重大投资的公司所取得的进展感到高兴。
We have continued to maintain a strong liquid position in our insurance companies. In last year’s annual report we explained how variations of 1/10 of 1% in interest rates result in million dollar swings in market value of our bonds. We consider such market fluctuation of minor importance as our liquidity and general financial strength make it highly improbable that bonds will have to be sold at times other than those of our choice.
我们将在保险公司里继续保持强大的流动性头寸。去年年报我们解释过利率仅仅变化 1‰ 如何导致我们债券的市值出现百万美元波动的。我们认为这样的市场波动并不重要，因为我们强大的资本流动性和健康的财务优势，使不得不卖出债券的可能性几乎为零。
Banking
银行业务
It is difficult to find adjectives to describe the performance of Eugene Abegg, Chief Executive of Illinois National Bank and Trust of Rockford, Illinois, our banking subsidiary.
任何言辞都难以赞扬我们的伊利诺伊国民银行首席执行官 Gene Abegg 的卓越表现。
In a year when many banking operations experienced major troubles, Illinois National continued its outstanding record. Against average loans of about $65 million, net loan losses were $24,000, or .04%. Unusually high liquidity is maintained with obligations of the U. S. Government and its agencies, all due within one year, at yearend amounting to about 75% of demand deposits. Maximum rates of interest are paid on all consumer savings instruments which make up more than half of the deposit base. Yet, despite the maintenance of premier liquidity and the avoidance of “stretching” for high yield loans, the Illinois National continues as about the most profitable bank of its size, or larger, in the country.
在许多银行经营出现重大困难的一年里，伊利诺伊国民银行继续保持着出色的业绩。相对于 6500 万美元的平均贷款，净贷款损失仅 2.4 万美元，或 0.04% 的损失。在美国政府和其机构的要求下，它保持着极高的资本流动性，年底时所有一年内到期的定期存款占了 75%。所有超过 200 万美元的消费者储蓄账户都支付最高法定利率，然而，尽管伊利诺伊国民银行保持了极高的流动性，并避免 “展期”高收益贷款，但它仍然是全国同规模或更大的银行中最赚钱的银行。
In 1975 the thirty largest banks in the United States earned an average of .5% on total assets. The Illinois National earned about four times that much. These same thirty largest banks carried down 7% of operating revenues to net income. Without counting any tax benefits from consolidation, Illinois National carried down 27%.
1975 年，美国最大的 30 家银行的平均总资产收益率为 0.5%。伊利诺伊国民银行的收益大约是这个数字的四倍。这三十家大型银行中，将 7% 的营业收入转化为净收入。而伊利诺伊国家银行在不考虑合并所带来的任何税收优惠的情况下，将 27% 的营业收入转化为净收入。
Gene Abegg opened the doors of the Illinois National Bank in 1931 with paid-in capital of $250,000. In 1932, its first full year of operation, it earned $8,782. No additional capital has been paid in, and we recommend reading its financial statements on pages 28-34 to see what a truly outstanding manager has built in 44 years at the helm.
吉恩-阿贝格于 1931 年开办了伊利诺伊国民银行，实收资本为 25 万美元。1932 年，即开业后的第一个完整年度，该银行赚取了 8782 美元。此后没有进行额外的资本注入，我们建议您阅读第 28-34 页的财务报表，看看这位真正杰出的管理者在 44 年的掌舵生涯中创造了怎样的业绩。
Under the present interest rate structure, it is expected that earnings of the Bank will be off somewhat during 1976 but still will remain at a highly satisfactory level.
在目前的利率结构下，预计 1976 年该银行的收益将略有下降，但仍将保持在非常令人满意的水平上。
Blue Chip Stamps
蓝筹印花公司
During 1975 our holdings of Blue Chip Stamps remained at 25.5 of that company’s outstanding shares. However, early in 1976 our holdings were increased to 31.5%. We expect some increase in our equity in Blue Chip’s earnings in 1976 because of this increased ownership.
1975 年，我们持有的蓝筹印花公司股票仍占该公司已发行股份的 25.5%。但在 1976 年初，我们的持股比例增加到 31.5%。由于持股比例的增加，我们预计 1976 年我们在蓝筹印花公司收益中的权益会有一定程度的增加。
The stamp business continues its precipitous decline with volume in the year ended February 28, 1976 amounting to only one-sixth that of the peak year ended February 28, 1970. Don Koeppel and Bill Ramsey have done an extraordinary job of cost-cutting, which has served to moderate operating problems resulting from this evaporation of business. In addition, the acquisition of See’s Candies in 1972 has proven a real winner. Chuck Huggins’s management has been outstanding, and profits have moved up dramatically during the past several years.
印花业务继续急剧下降，截至 1976 年 2 月 28 日的一年中，印花业务量仅为截至 1970 年 2 月 28 日的高峰年的六分之一。唐-科佩尔（Don Koeppel）和比尔-拉姆齐（Bill Ramsey）出色地完成了削减成本的工作，从而缓解了业务流失带来的经营问题。此外，1972 年对 See’s 糖果公司的收购也被证明是一个真正的赢家。查克-哈金斯（Chuck Huggins）的管理非常出色，在过去几年里，利润大幅增长。
Shareholders of Berkshire Hathaway Inc. desiring the current annual report of Blue Chip Stamps should write Mr. Robert H. Bird, Secretary, Blue Chip Stamps, 5801 South Eastern Avenue, Los Angeles, California 90040.
伯克希尔哈撒韦公司的股东如需蓝筹印花公司的最新年度报告，请致函蓝筹印花公司秘书 Robert H. Bird 先生，地址：5801 South Eastern Avenue, Los Angeles, California 90040。
Federal Income Tax Implications
联邦所得税的影响
In reading our earnings statement you will notice a significant amount of Federal income taxes paid in earlier years are now recoverable because of the net operating loss, as computed for tax purposes, sustained in 1975. Such loss results from the exclusion from income of 100% of interest from state and local issues, and 85% of dividends from domestic corporations. We have exhausted our reservoir of available tax recoveries and, therefore, a repeat of our overall operating performance in 1976 would produce much smaller net earnings. While we do not expect this result, it is important that you are aware of the absence of this cushion in the event that operating losses, as calculated for Federal tax purposes, should continue.
在阅读我们的损益表时，你会注意到，由于 1975 年持续的净营业亏损(按税收目的计算)，早期支付的大量联邦所得税现在可以收回。这种亏损是由于 100% 的州和地方债券利息以及 85% 的国内公司股息被排除在收入之外。我们已经耗尽了可用的税款回收储备，因此，如果我们 1976 年的总体经营业绩重蹈覆辙，净利润将大大减少。虽然我们并不期望出现这种结果，但重要的是，您要意识到，如果按照联邦税收目的计算的经营亏损继续存在，就不会有这种缓冲。
Acquisition of K & W Products
收购 K & W 产品公司
In addition to the 1975 Waumbec acquisition, we acquired for cash and notes on January 6, 1978, 100% of the assets of K & W Products, including its insurance subsidiaries. The insurance operations are minor in scope, representing business already associated with National Indemnity Company. K & W Products manufactures specialty automotive chemicals for use in automobile maintenance, such as radiator and block sealants, gasket compounds and fuel and oil additives. The company has extensive trademark or trade name protection for its products, which it manufactures at plants in California and Indiana. Although relatively small, with sales of a little over $2 million, it consistently has generated favorable earnings. Positioned as we now are with respect to income taxes, the addition of a solid source of taxable income is particularly welcome.
除了 1975 年对 Waumbec 公司的收购外，我们还于 1978 年 1 月 6 日以现金和票据收购了 K & W Products 公司 100% 的资产，包括其保险子公司。这些保险业务规模较小，是已经与国民保险公司相关联的业务。K & W 产品公司生产用于汽车维护的特种汽车化学品，如散热器和缸体密封剂、垫片粘合剂以及燃油和机油添加剂。该公司在加利福尼亚州和印第安纳州的工厂生产的产品拥有广泛的商标或商号保护。虽然公司规模相对较小，销售额略高于 200 万美元，但却一直保持着良好的收益。鉴于我们目前在所得税方面的处境，增加一个可靠的应税收入来源尤其值得欢迎。
General Review
十年回顾
Your present management assumed responsibility at Berkshire Hathaway in May, 1965. At the end of the prior fiscal year (September, 1964) the net worth of the Company was $22.1 million, and 1,137,778 common shares were outstanding, with a resulting book value of $19.46 per share. Ten years earlier, Berkshire Hathaway’s net worth had been $53.4 million. Dividends and stock repurchases accounted for over $21 million of the decline in company net worth, but aggregate net losses of $9.8 million had been incurred on sales of $595 million during the decade.
目前的管理层是于 1965 年 5 月接管伯克希尔·哈撒韦公司的。上一财年 (1964 年 9 月) 结束时，公司的净资产是 2210 万美元，流通在外的普通股有 1,137,778 股，每股账面价值是 19.46 美元。十年之前的 1955 年，伯克希尔·哈撒韦的净资产已是 5340 万美元。股息和股票回购占账面价值减少额的 2100 万美元以上，但是这十年期间，5.95 亿美元的销售却产生了 980 万美元的净损失。
In 1965, two New England textile mills were the company’s only sources of earning power and, before Ken Chace assumed responsibility for the operation, textile earnings had been erratic and, cumulatively, something less than zero subsequent to the merger of Berkshire Fine Spinning and Hathaway Manufacturing. Since 1964, net worth has been built to $92.9 million, or $94.92 per share. We have acquired total, or virtually total ownership of six businesses through negotiated purchases for cash (or cash and notes) from private owners, started four others, purchased a 31.5% interest in a large affiliate enterprise and reduced the number of outstanding shares of Berkshire Hathaway to 979,569. Overall, equity per share has compounded at an annual rate of slightly over 15%.
1965 年，新英格兰地区的两个纺织厂是公司的唯一盈利来源，在 Ken Chace 接管这项业务之前，纺织利润是不稳定的，在伯克希尔精纺公司和哈撒韦制造公司合并之后收入累计是亏损的。自 1964 年以来，公司净资产已累积到 9290 万美元，即每股 94.92 美元。我们通过谈判从私营业主那用现金(或者是现金和支票)收购六家公司的全部或几乎全部所有权(联合零售，国民保险，伊利诺伊银行，喜诗糖果，蓝筹印花，威斯科金融)，整合成四家(保险，银行，零售，蓝筹印花)，又购买一家关联公司约 31.5% 的股份 (GEICO)，并将伯克希尔·哈撒韦公司的在外流通股减少至 979,569 股。总体而言，每股权益的年复利率略高于 15%。
While 1975 was a major disappointment, efforts will continue to develop growing and diversified sources of earnings. Our objective is a conservatively financed and highly liquid business—possessing extra margins of balance sheet strength consistent with the fiduciary obligations inherent in the banking and insurance industries—which will produce a long term rate of return on equity capital exceeding that of American industry as a whole.
尽管 1975 年的业绩令人大失所望，但是我们会继续致力于壮大公司规模并使得盈利来源多元化。我们的目标是维持保守的融资和资本的高流动性，保持资产负债表的额外盈利优势，同时坚守银行及保险行业固有的信托责任，这样会使得我们长期的股权资本回报率高于美国整体行业的水平。
Warren E. Buffett, Chairman
沃伦·巴菲特 董事长
1977 年信件
To the Stockholders of Berkshire Hathaway Inc.:
致伯克希尔·哈撒韦公司全体股东：
After two dismal years, operating results in 1976 improved significantly. Last year we said the degree of progress in insurance underwriting would determine whether our gain in earnings would be “moderate” or “major.” As it turned out, earnings exceeded even the high end of our expectations. In large part, this was due to the outstanding efforts of Phil Liesche’s managerial group at National Indemnity Company.
经历了两年的惨淡业绩后，1976 年经营业绩明显改善。去年我们预计保险承保的进展程度将决定我们收益的大小。最终收益超过了我们的最高预期。这在很大程度上取决于国民保险菲尔·列舍 (Phil Liesche) 管理团队的杰出努力。
In dollar terms, operating earnings came to $16,073,000, or $16.47 per share. While this is a record figure, we consider return on shareholders’ equity to be a much more significant yardstick of economic performance. Here our result was 17.3%, moderately above our long‐ term average and even further above the average of American industry, but well below our record level of 19.8% achieved in 1972.
以美元计，我们的经营收益达到 1607.3 万美元，或每股盈利 16.47 美元。尽管这是个创记录的数字，我们仍然认为股本回报率是衡量财务业绩的更重要的指标。本年我们的股本回报率为 17.3%，略高于我们的长期平均水平，甚至远高于美国工业的平均股权回报率，但远低于我们在 1972 年 19.8% 的创纪录水平。
Our present estimate, subject to all the caveats implicit in forecasting, is that dollar operating earnings are likely to improve somewhat in 1977, but that return on equity may decline a bit from the 1976 figure.
考虑到所有可能的不利因素，目前我们预计 1977 年的经营利润可能会有所增加，但股权回报率可能会比 1976 年略有下降。
Textile Operations
纺织业务
Our textile division was a significant disappointment during 1976. Earnings, measured either by return on sales or by return on capital employed, were inadequate. In part, this was due to industry conditions which did not measure up to expectations of a year ago. But equally important were our own shortcomings. Marketing efforts and mill capabilities were not properly matched in our new Waumbec operation. Unfavorable manufacturing cost variances were produced by improper evaluation of machinery and personnel capabilities. Ken Chace, as always, has been candid in reporting problems and has worked diligently to correct them. He is a pleasure to work with – even under difficult operating conditions.
1976 年我们纺织部门经营非常令人失望。无论以销售利润率还是投入资本回报率来衡量，业绩都很差。部分原因是，行业状况没有达到一年前的预期，另外要归咎于我们自身的不足。我们新运营的 Waumbec 纺织工厂，营销和产能没能很好的匹配。对机器和员工能力判断错误导致了不利的生产成本偏差。Ken Chace 一如既往地坦诚汇报问题并努力的加以纠正。即使在运营艰难的情况下，与他一起工作也是一种乐趣。
While the first quarter outlook is for red ink, our quite tentative belief is that textile earnings in 1977 will equal, or exceed modestly, those of 1976. Despite disappointing current results, we continue to look for ways to build our textile operation and presently have one moderate‐size acquisition under consideration. It should be recognized that the textile business does not offer the expectation of high returns on investment. Nevertheless, we maintain a commitment to this division – a very important source of employment in New Bedford and Manchester – and believe reasonable returns on average are possible.
虽然一季度预期会亏损。我们初步预计 1977 年纺织业务的盈利将与 1976 年持平或略高。尽管目前的业绩不尽如人意，我们仍在寻找巩固纺织业务的方法，并正在考虑一个中等规模的收购。应当承认纺织业务无法提供一个高的投资回报预期。然而，我们恪守着社会责任，因为它是 New Bedford 和 Manchester 的重要就业来源，我们相信未来获得平均的合理回报是可能的。
Insurance Underwriting
保险承保业务
Casualty insurers enjoyed some rebound from the disaster levels of 1975 as rate increases finally outstripped relentless cost increases. Preliminary figures indicate that the stockholder owned portion of the property and casualty industry had a combined ratio of 103.0 in 1976, compared to 108.3 in 1975. (100 represents a break‐even position on underwriting—and higher figures represent underwriting losses.) We are unusually concentrated in auto lines where stock companies had an improvement from 113.5 to 107.4. Our own overall improvement was even more dramatic, from 115.4 to 98.7.
由于 1975 年的保险业的灾难，使得保险的费率上涨超过了残酷的成本上涨，财产意外险公司从 1975 年的困难运营中有所恢复。初步结果显示，我们所拥有的财产意外险公司 1976 年的综合成本率为 103%，1975 年为 108.3%。 100% 是承保的盈亏平衡点，综合成本率高于 100 代表承保亏损。我们非常关注车险业务，本年其他车险公司的综合成本率从 113.5% 下降到 107.4%，我们自身的整体改善则更为显著，综合成本率从 115.4% 下降到 98.7%。
Our major insurance sector in insurance, the traditional auto and general liability business of National Indemnity Company, had an outstanding year, achieving profit levels significantly better than the industry generally. Credit for this performance must be given to Phil Liesche, aided particularly by Roland Miller in Underwriting and Bill Lyons in Claims.
我们在保险业最主要的部分，国民保险公司的传统业务今年业绩非常好，实现利润显著高于行业平均水平。这要归功于菲尔·列舍 (Phil Liesche) 的领导及承保方面的 Roland Miller 和索赔方面的 Bill Lyons 的出色工作。
Volume at National Indemnity Company grew rapidly during 1976 as competitors finally reacted to the inadequacy of past rates. But, as mentioned in last year’s annual report, we are concentrated heavily in lines that are particularly susceptible to both economic and social inflation. Thus present rates, which are adequate for today, will not be adequate tomorrow. Our opinion is that before long, perhaps in 1978, the industry will fall behind on rates as temporary prosperity produces unwise competition. If this happens, we must be prepared to meet the next wave of inadequate pricing by a significant reduction in volume.
1976 年，竞争对手终于意识到以往费率过低而大幅提价，因此国民保险公司的承保保费大增。但正如去年年报中所提到的，我们直接保险主要集中在特别容易受到经济和社会通胀影响的领域。目前的费率充足，明天就不一定了。我们的看法是不久以后，可能在 1978 年，随着市场的短期繁荣造成的不明智的竞争可能使整个行业在费率上落后于通胀水平。那样的话，我们就要准备好迎接又一波定价不足的冲击，我们的承保保费会大幅下降。
Reinsurance underwriting has lagged the improvement in direct business. When mistakes are made in the pricing of reinsurance, the effects continue for even longer than when similar mistakes are made in direct underwriting. George Young, an outstanding manager, has worked tirelessly to achieve his goal of profitable underwriting, and has cancelled a great many contracts where appropriate rate adjustments were not obtainable. Here, as in the direct business, we have had a concentration in casualty lines which have been particularly hard hit by inflationary conditions. The near term outlook still is not good for our reinsurance business.
再保险业务滞后于直接保险业务的改善。当再保险定价出现错误时，其影响持续的时间甚至比直接承保中出现类似错误的时间还要长。 George Young 是一个优秀的经理人，他为实现承保盈利的目标而不懈努力，他取消了许多费率不能进行合理调整的保单。像直接保险业务一样，我们过度集中于受通货膨胀影响特别严重的意外险领域。近期前景仍然不利于我们的再保险业务。
Our “home state” operation continues to make substantial progress under the management of John Ringwalt. The combined ratio improved from 108.4 in 1975 to 102.7 in 1976. There still are some excess costs reflected in the combined ratio which result from the small size of several operations. Cornhusker Casualty Company, oldest and largest of the home state companies, was the winner of the Chairman’s Cup in 1976 for achievement of the lowest loss ratio among the home state companies. Cornhusker also achieved the lowest combined ratio in its history at 94.4, marking the fifth time in its six full years of existence that a ratio below 100 has been recorded. Premium growth was 78% at the home state companies in 1976, as market position improved significantly. We presently plan a new home state operation later this year.
在 John Ringwalt 的管理下，我们的住宅保险业务 (Home-State) 继续取得了实质性进展。综合成本率从 1975 年的 108.4% 下降到 1976 年的 102.7%。由于一些公司规模太小，综合成本率里仍然存在超额成本。内布拉斯加意外险 (Cornhusker) 是该业务中历史最久、规模最大的公司，也是 1976 年业绩最好的一个，它在这些公司中赔付率最低。同时，综合比率 94.4% 也是史上最低的，这是它成立六年来第五次综合比率在 100% 以下了。 1976 年随着市场地位的显著提升，Home-State 业务保费收入增长率达到了 78%。目前我们计划在今年晚些时候成立一家新的 Home-State 保险公司。
Our Home and Automobile Insurance Company subsidiary, writing primarily automobile business in the Cook County area of Illinois, experienced a strong recovery in 1976. This is directly attributable to John Seward who, in his first full year, has revamped significantly both rating methods and marketing. The auto business has been shifted to a six month direct bill policy, which permits a faster reaction time to underwriting trends. Our general liability business at Home and Automobile has been expanded significantly with good results. While it remains to be proven that we can achieve sustained underwriting profitability at Home and Auto, we are delighted with the progress John Seward has achieved.
我们的附属公司家庭汽车保险 (Home & Auto)，主要在伊利诺伊州库克县地区经营汽车业务，在 1976 年经历了一个强劲复苏。这要直接归功于 John Seward，在他任职的第一年就对市场营销和承保评定方法进行改革，并取得了不错的效果。车险业务已经修改为 6 个月为期的直接险种，这样我们就能对承保趋势有更快的反应了。我们家庭和汽车保险公司的一般责任险业务也显著扩张并取得了很好的业绩。虽然家庭和汽车保险公司能否取得持续的承保盈利仍有待证明，但我们对 John Seward 所取得的进展感到高兴。
Overall, we expect a good year in insurance in 1977. Volume is high and present rate levels should allow profitable underwriting. Longer term, however, there are significant negatives in the insurance picture. Auto lines, in particular, seem highly vulnerable to pricing and regulatory problems produced by political and social factors beyond the control of individual companies.
总的来说，我们预计 1977 年将是保险业的好年景。目前承保量很高且费率应该可以获得承保盈利。然而长远来看，保险行业有很多不利因素。特别是车险业务，它看起来极易受个别公司无法控制的政策和社会因素所引发的定价和管理问题的影响。
Insurance Investments
保险投资业务
Pre‐tax investment income in 1976 improved to $10,820,000 from $8,918,000 as invested assets built up substantially, both from better levels of profitability and from gains in premium volume.
1976 年由于保费收入增加和承保盈利，可投资资产显著增长，保险投资的税前投资收入从 891.8 万美元上升到 1082 万美元。
In recent reports we have noted the unrealized depreciation in our bond account, but stated that we considered such market fluctuations of minor importance as our liquidity and general financial strength made it improbable that bonds would have to be sold at times other than those of our choice. The bond market rallied substantially in 1976, giving us moderate net unrealized gains at yearend in the bond portfolios of both our bank and insurance companies. This, too, is of minor importance since our intention is to hold a large portion of our bonds to maturity. The corollary to higher bond prices is that lower earnings are produced by the new funds generated for investment. On balance, we prefer a situation where our bond portfolio has a current market value less than carrying value, but more attractive rates are available on issues purchased with newly‐generated funds.
在最近的报告中，我们提到了债券账户上的未实现减值，但我们认为这些市场波动的影响是次要的，因为我们的流动性和财务实力使我们不太可能在不恰当的时机卖出这些债券。在 1976 年，债券市场大幅上扬，这使得我们的银行和保险公司拥有的债券组合的年末未实现收益有微幅上升。这也是次要的，因为我们的目的是将大部分债券持有到期。较高债券价格的必然结果是新投资的资金的收益会下降。总的来说，我们更喜欢我们的债券市值小于其账面价值。这样再投资时就能获得更有吸引力的回报率。
Last year we stated that we expected 1976 to be a year of realized capital gains and, indeed, gains of $9,962,000 before tax, primarily from stocks, were realized during the year. It presently appears that 1977 also will be a year of net realized capital gains. We now have a substantial unrealized gain in our stock portfolio as compared to a substantial unrealized loss several years ago. Here again we consider such market fluctuations from year to year relatively unimportant; unrealized appreciation in our equity holdings, which amounted to $45.7 million at yearend, has declined by about $5 million as this is written on March 21st.
去年我们提到，预计 1976 年将会实现资本收益。事实上，我们在 1976 年获得了的 996.2 万美元的税前资本收益，主要来自股票投资。现在看来，1977 年同样是实现净资本收益的一年。与前几年大量未实现亏损相比，我们的股票投资组合现在有大量未实现收益，我们依然认为年复一年的市场波动相对而言并不重要。我们股票组合中的未实现资本收益，年终高达 4570 万美元，在我们 3 月 21 日写这封信时已经下降了 500 万美元。
However, we consider the yearly business progress of the companies in which we own stocks to be very important. And here, we have been delighted by the 1976 business performance achieved by most of our portfolio companies. If the business results continue excellent over a period of years, we are certain eventually to achieve good financial results from our stock holdings, regardless of wide year‐to‐year fluctuations in market values.
然而，我们认为所投资公司业务的进展是非常重要的。1976 年，我们对大多数投资组合公司的优秀业绩表示满意。如果公司未来几年业绩继续如此出色的话，我们肯定能从股票投资中取得丰厚的回报，而每年的股市波动是无关紧要的。
Our equity holdings with a market value of over $3 million on December 31, 1976 were as follows:
我们在 1976 年 12 月 31 日持有的超过 300 万美元的投资如下：
| No. of Shares</br>股份数量 | Company</br>公司名称 | Cost</br>成本 | |
|---|---|---|---|
| 141,987 | California Water Service Company | $3,608,711 | |
| 1,986,953 | Government Employees Insurance Company Covertible Preferred | 19,416,635 | |
| 1,294,308 | Government Employees Insurance Company Common Stock | 4,115,670 | |
| 395,100 | Interpublic Group of Companies | 4,530,615 | |
| 562,900 | Kaiser Industries, Inc. | 8,270,871 | |
| 188,900 | Munsingwear, Inc. | 3,398,404 | |
| 83,400 | National Presto Industries, Inc. | 1,689,896 | |
| 170,800 | Ogilvy & Mather International | 2,762,433 | |
| 934,300 | The Washington Post Company Class B | 10,627,604 | |
| Total | $58,420,839 | ||
| All other Holdings | 16,974,375 | ||
| Total Equities | $75,395,214 |
You will notice that our major equity holdings are relatively few. We select such investments on a long-term basis, weighing the same factors as would be involved in the purchase of 100% of an operating business: (1) favorable long-term economic characteristics; (2) competent and honest management; (3) purchase price attractive when measured against the yardstick of value to a private owner; and (4) an industry with which we are familiar and whose long-term business characteristics we feel competent to judge. It is difficult to find investments meeting such a test, and that is one reason for our concentration of holdings. We simply can’t find one hundred different securities that conform to our investment requirements. However, we feel quite comfortable concentrating our holdings in the much smaller number that we do identify as attractive.
你会发现，我们的主要持股相对较少。我们基于公司的长期表现进行投资，并会仔细考虑如果 100% 收购整个公司所要考虑的因素： (1) 良好的长期经济护城河； (2) 称职且诚实的管理层； (3) 以私有化的标准来衡量，价格具有吸引力； (4) 我们所熟悉的行业，我们能判断其长期的经济特征。寻找到符合我们标准的公司很困难，这也是我们喜欢集中持股的原因之一。我们无法找到一百只满足我们投资标准的股票。然而，我们觉得集中持有少量我们已确认有吸引力的股票是非常舒适的。
Our intention usually is to maintain equity positions for a long time, but sometimes we will make a purchase with a shorter expected time horizon such as Kaiser Industries. Here a distribu- tion of securities and cash from the parent company is expected to be initiated in 1977. Purchases were made in 1976 after the announcement of the distribution plan by Kaiser management.
我们通常是打算长期持股，但有时我们也做短线投资，如对凯撒工业的投资。该公司预计 1977 年母公司将进行现金红利和股票红利的分配。在该公司管理层宣布了红利分配方案后，我们在 1976 年买入了这家公司的股票。
Banking
银行业务
Eugene Abegg, Chief Executive of Illinois National Bank and Trust Company of Rockford, Illinois, our banking subsidiary, continues to lead the parade among bankers - just as he has ever since he opened the bank in 1931.
我们附属银行伊利诺伊国民银行和伊利诺伊州的罗克福德信托投资公司的 CEO，Eugene Abegg 继续引领银行界，正如他在 1931 年银行刚成立时所做的一样。
Recentlv. National City Corp. of Cleveland, truly an outstandingly well-managed bank, ran an ad stating “the ratio of earnings to average assets was 1.34% in 1976 which we believe to be the best percentage for any major banking company.” Among the really large banks this was the best earnings achievement but, at the Illinois National Bank, earnings were close to 50% better than those of National City, or approximately 2% of average assets.
最近，National City Corp.of Cleveland 克利夫兰国民城市公司，一家拥有真正出色管理的银行在一则广告中写道：” 1976 年我们平均资产收益率 ROA 为 1.34%，我们相信这是在所有主要银行公司中的最好水平。”在真正的大银行中这是最好的盈利业绩，但伊利诺伊国民银行的盈利比国民城市公司的盈利水平要高出接近 50%，平均资产收益率 ROA 大约为 2%。
This outstanding earnings record again was achieved while:
这一优秀的盈利记录是在以下措施的作用下再次实现的：
(1) paying maximum rates of interest on all consumer savings instruments (timedeposits now make up well over two-thirds of the deposit base at the Illinois National Bank),
(1) 所有客户储蓄工具支付了最高的利率(定期存款超过了总存款的三分之二)；
(2) maintaining an outstanding liquidity position (Federal funds sold plus U. S. Government and Agency issues of under six months’ duration presently are approximately equal to demand deposits), and
(2) 保持了良好的流动性(出售的联邦基金加上目前买入的六个月以下美国政府债券规模大约等于活期存款总额)；
(3) avoiding high-yield but second-class loans (net loan losses in 1976 came to about $12,000, or 02% of outstanding loans, avery tiny fraction ofthe ratio prevailing in 1976in the banking industry).
(3) 避免高利率的二级贷款 (second-class loans 劣级贷款，1976 年贷款坏账约为 1.2 万美元，或着说 0.02% 的坏账率。这与 1976 年的银行界的现行坏账率相比非常小)。
Cost control is an importantfactor in the bank’s success. Employment is still at about the level existing at the time of purchase in 1969 despite growth in consumer time deposits from $30 million to $90 million and considerable expansion in other activities such as trust, travel and data processing.
成本控制是银行成功的一个重要因素。尽管消费者定期存款从 3000 万上升到 9000 万，并在信托、旅行支票和数据处理等其他业务上有显著的扩张。该银行的雇员数量仍然保持在 1969 年购买它时的水平，
Blue Chip Stamps
蓝筹印花公司
During 1976 we increased ourinterest in Blue Chip Stamps, and by yearend we held about 33% uf that company’s outstanding shares. Our interest in Blue Chip Stampsis of growing importance to us. Summary financial reports of Blue Chip Stampsare contained in the footnotes to our attached financial statements. Moreover, shareholders of Berkshire Hathaway Inc. are urged to obtainthe current and subsequent annual reports of Blue Chip Stamps by requesting them from Mr. Robert H. Bird, Secretary, Blue Chip Stamps, 5801 South Eastern Avenue, Los Angeles, California 90040.
1976 年我们增加了在蓝筹印花公司的权益，年底前我们已持有该公司 33% 的流通股。蓝筹印花的股权对我们日益重要。蓝筹印花的简要财务报告在我们所附的财务报表的脚注里。另外，伯克希尔公司的股东可以从蓝筹印花公司的秘书 Robert H. Bird 那里得到现在和后续的年报。他的地址是加利福尼亚州洛杉矶东南大道 5801 号蓝筹印花公司，邮编 90040。
Miscellaneous
其他杂项
K & W Products has performed well inits first year as asubsidiary of Berkshire Hathaway Inc.. Both sales and earnings were up moderately over 1975.
伯克希尔的子公司 K & W 第一年已表现出不错的业绩，销售额和利润较之 1975 年均有适度增长。
We have less than four years remaining to comply with the requirement that our bank be divested by December 31, 1980. We intend to accomplish such a divestiture in a manner that minimizes disruption to the bank and produces good results for our shareholders. Most probably this will involve a spin-off of bank shares in 1980.
按规定在 1980 年 12 月 31 日之前把我们的银行部门剥离出去，我们只有不到四年的时间。我们打算以一种对我们银行部门损害最小的方式完成这种剥离，并为股东赢得最大利益。最大的可能是我们以分拆上市的办法在 1980 年把我们的银行部门剥离出去。
We also hope at somepoint to merge with Diversified Retailing Company, Inc.. Both corporate simplification and enhanced ownership position in Blue Chip Stamps would bebenefits of such a merger. However, it is unlikely that anything will be proposed in this regard during 1977.
我们也希望在合适的时候对多元零售公司进行合并。这样的合并既有利于公司的简化，也有利于增强蓝筹印花的所有权地位。然而，与合并相关的各项任务都在 1977 年推行暂时是不可能的。
Warren E. Buffett, Chairman
沃伦·巴菲特 董事长
March 21, 1977
1977 年 3 月 21 日