BERKSHIRE HATHAWAY INC.
波克夏海瑟崴股份有限公司
To the Shareholders of Berkshire Hathaway Inc.:
致所有股東:
Our gain in net worth during 1998 was $25.9 billion, whic
increased the
per-share book value of both our Class A and Class B
stock by 48.3%. Over
the last 34 years (that is, since present
management took over)
per-share book value has grown from $19 to
$37,801, a rate of
24.7% compounded annually.*
1998年本公司的淨值增加了259億美元，每股帳面淨值不管是A級股或B級
股皆成長了48.3%，總計過去34年以來，也就是自從現有經營階層接手之後，
每股淨值由當初的19元成長到現在的37,801美元，年複合成長率約為
24.7%*。
* All figures used in this report
apply to Berkshire's A shares, the successor to the only
stock that the
company had outstanding before 1996. The B shares have an economic
interest equal to 1/30th that of the A.
*1在年報中所謂的每股數字係以A級普通股約當數為基礎，這是本公司在1996年以前流通在
外唯一的一種股份，B級普通股則擁有A級普通股三十分之一的權利。
Normally, a gain of 48.3% would call for handsprings -- but no
this year.
Remember Wagner, whose music has been described as better
than it sounds? Well,
Berkshire's progress in 1998 -- though more than
satisfactory -- was
not as good as it looks. That's because most of that
48.3% gain came from
our issuing shares in acquisitions.
通常當公司的淨值一年能夠成長48.3%時，大家應該要高興的手舞足蹈，不過
今年卻不行，還記得德國音樂天才華格納嗎? 他的音樂曾被形容為沒有想像中好
聽，嗯! 我想Berkshire在1998年的進展，雖然已經相當令人滿意了，但還是
沒有表面上看起來那麼好，主要的原因在於在增加的48.3%淨值當中，有絕大
部份係來自於因購併交易所發行的新股。
To explain: Our stock sells at a large premium over book value
which means
that any issuing of shares we do -- whether for cash or as
consideration in a
merger -- instantly increases our per-share book-
value figure, even
though we've earned not a dime. What happens is that
we get more per-share
book value in such transactions than we give up.
These transactions,
however, do not deliver us any immediate gain in
per-share
intrinsic value, because in this respect what we give and what
we get are roughly equal. And, as Charlie Munger,
Berkshire's Vice
Chairman and my partner, and I can't tell you too
often (though you may
feel that we try), it's the per-share gain in
intrinsic value that counts
rather than the per-share gain in book value. Though
Berkshire's
intrinsic value grew very substantially in 1998, the
gain fell well short of
the 48.3% recorded for book value. Nevertheless,
intrinsic value still far
exceeds book value.
(For a more extensive discussion of these terms,
and other investment
and accounting concepts, please refer to our
Owner's Manual, on
pages 56-64, in which we set forth our owner-
related business
principles. Intrinsic value is discussed on pages 61 and
62.)
再進一步說明，由於我們公司目前的股價遠高於帳面價值，這意思代表每當我們
發行新股，不管是現金增資或者是合併發行新股，都會立即大幅拉高我們每股的
帳面淨值，但實際上我們沒有因此多賺進半毛錢，而真實的情況是，這類交易對
我們每股實質價值並不會產生立即的效果，主要是由於我們所得到的跟我們所付
出的只能算是相當，而就像我與合夥人查理孟格不厭其煩，但卻一再強調的真正
重要的是實質的價值的增加而非帳面淨值的增加，雖然Berkshire 1998年的實
質價值大幅成長，但絕不到帳面淨值增加48.3%的那種幅度，不過儘管如此，
我還是必須強調，目前的實質價值仍遠高於帳面淨值，(有關這些名詞的說明，
請大家參閱股東手冊，在裡頭我們揭示了與股東相關的經營原則)。
We entered 1999 with the best collection of businesses an
managers in our
history. The two companies we acquired in 1998,
General Re and
Executive Jet, are first-class in every way -- more about
both later -- and the
performance of our operating businesses last year
exceeded my hopes.
GEICO, once again, simply shot the lights out. On
the minus side,
several of the public companies in which we have major
investments
experienced significant operating shortfalls that neither
they nor I anticipated
early in the year. Consequently, our equity
portfolio did not
perform nearly as well as did the S&P 500. The
problems of these
companies are almost certainly temporary, and
Charlie and I believe
that their long-term prospects are excellent.
展望1999年，我們擁有有史以來最佳企業與經理人的黃金組合，我們在1998
年買下的兩家公司，分別是通用再保與Executive Jet在各方面的條件皆是一時
之選(後面還會詳加說明)，而原有擁有的企業表現更是超乎我個人的預期，
GEICO保險再一次令人瞠目結舌，當然也有不好的消息，幾家我們擁有大筆投
資的大型上市公司經營紛傳缺失，這也是當初我們沒有預期到的，也因此使得我
們股票投資組合的績效表現低於同期S&P 500指數，還好這些公司所發生的問
題都只是暫時的，查理跟我都相信他們長期發展的遠景還是相當的樂觀。
In our last three annual reports, we furnished you a tablehat we
regard as
central to estimating Berkshire's intrinsic value. In the
updated version of
that table, which follows, we trace our two key
components of value,
including General Re on a pro-forma basis as if
we had owned it
throughout the year. The first column lists our per-
share ownership of
investments (including cash and equivalents but
excluding securities
held in our financial products operation) and the
second column shows
our per-share earnings from Berkshire's
operating businesses
before taxes and purchase-accounting
adjustments (discussed
on pages 62 and 63), but after all interest and
corporate expenses.
The second column excludes all dividends, interest
and capital
gains that we realized from the investments presented in the
first column.
In effect, the columns show how Berkshire would look if it
were split into two
parts, with one entity holding our investments and
the other operating
all of our businesses and bearing all corporate
costs.
在最近三年的年報中，我們提供了我們認為可以最能夠估計Berkshire實質價值
的一張表，在今年剛剛更新資料的表中，我們以擬制的方式將通用再保的數字加
入其中，也就是假設該公司自年度一開始就為我們所擁有，第一欄的數字代表我
們擁有每股的投資金額(包括現金與約當現金，但扣除財務金融單位持有的證
券)，第二欄則是每股在扣除利息與營業費用之後，Berkshire來自本業的營業利
益(但未扣除所得稅與購買法會計調整數)，當然後者已經扣除了所有來自第一欄
投資所貢獻的股利收入、利息收入與資本利得，事實上，從這張表可以看出若是
把Berkshire分拆成兩部份的話會變成怎樣，其結果就等於是一家持有我們投資
部位的控股公司，以及另一家經營旗下所有事業負擔全部成本盈虧的營利事業。
|
|
Investments |
Pre-tax Earnings Per Share | |
|
Year | |||
|
1968 |
.................. |
$ 53 |
$ 2.87 |
|
1978 |
...... |
465 |
12.85 |
|
1988 |
..... |
4,876 |
145.77 |
|
1998 |
. |
47,647 |
474.45 |
Here are the growth rates of the two segments by decade:
|
|
Investments Per Share |
Pre-tax Earnings Per Share With All Income from Investments Excluded | |
|
Decade Ending | |||
|
1978 |
...... |
24.2% |
16.2% |
|
1988 |
...... |
26.5% |
27.5% |
|
1998 |
...... |
25.6% |
12.5% |
|
|
|
|
|
|
Annual Growth Rate, 1968-1998 ................... |
25.4% |
18.6% | |
During 1998, our investments increased by $9,604 per share, o
25.2%, but
per-share operating earnings fell by 33.9%. General Re
(included, as noted,
on a pro-forma basis) explains both facts. This
company has very large
investments, and these greatly increased our
per-share investment
figure. But General Re also had an underwriting
loss in 1998, and that
hurt operating earnings. Had we not acquired
General Re, per-share
operating earnings would have shown a modest
gain.
回顧1998年，我們每股的投資金額增加了9,604美元，約25.2%，不過每股
營業盈餘卻減少33.9%，主要的原因緣自於通用再保(如先前所說，在今年以擬
制的方式併入Berkshire)，這家公司擁有相當大的投資部位，這使得我們每股的
投資金額大幅增加，不過另一方面，該公司在1998年也產生承保損失，這又拖
累了我們的每股營業盈餘表現，事實上，要是我們沒有買下通用再保，我們當年
的每股營業盈餘可能還能維持小幅增加。
Though certain of our acquisitionand operating strategies may
from time to
time affect one column more than the other, we continually
work to increase the
figures in both. But one thing is certain: Our future
rates of gain will
fall far short of those achieved in the past. Berkshire's
capital base is now
simply too large to allow us to earn truly outsized
returns. If you
believe otherwise, you should consider a career in sales
but avoid one in
mathematics (bearing in mind that there are really only
three kinds of people
in the world: those who can count and those who
can't).
雖然某些特定的購併案與經營策略會影響到其中某一欄數字，但我們還是盡量讓
兩欄數字能夠均衡發展，不過有一點可以確定的是，我們未來的成長率將遠不及
過去所創造的水準，Berkshire現在的規模實在是大到我們很難再做出任何重大
的突破，若是你不這樣認為，你應該去從事業務員的工作，而不是去教數學(請
永遠記住，世界上只有三種人，一種會算術，另一種不會算術)。
Currently we are woing to compound a net worth of $57.4
billion, the largest
of any American corporation (though our figure will
be eclipsed if the
merger of Exxon and Mobil takes place). Of course,
our lead in net worth
does not mean that Berkshire outranks all other
businesses in value:
Market value is what counts for owners and General
Electric and
Microsoft, for example, have valuations more than three
times Berkshire's. Net
worth, though, measures the capital that
managers must deploy,
and at Berkshire that figure has indeed become
huge.
淨值代表著一家公司經理人可以運用的資金，就這方面而言，Berkshire的規模
無疑是相當可觀的，現在我們可以掌控的淨值高達574億美元，這數字居所有
美國公司之冠，(雖然如果艾克森和Mobil石油合併案成功的話，我們必須讓出
寶座)，當然這並不代表Berkshire實際的價值，對於股東來說，公司總市值才
是最重要的，就這點而言，通用電氣與微軟的市值就是Berkshire的三倍以上。
Nonetheless, Charlie a I will do our best to increase intrinsic
value in the
future at an average rate of 15%, a result we consider to be
at the very
peak of possible outcomes. We may have years when we
exceed 15%, but we
will most certainly have other years when we fall far
short of that --
including years showing negative returns -- and those
will bring our average
down. In the meantime, you should understand
just what an average
gain of 15% over the next five years implies: It
means we will need to
increase net worth by $58 billion. Earning this
daunting 15% will
require us to come up with big ideas: Popcorn stands
just won't do. Today's
markets are not friendly to our search for
"elephants," but you
can be sure that we will stay focused on the hunt.
不過說歸說，查理跟我還是希望能夠盡力讓公司的價值在未來以每年15%的平
均速度成長，這是我們認為可能達到的極限，在往後的日子，有時我們可能可以
超過15%，但也很有可能遠不如這個標準，甚至可能會變成負的，而使得我們
平均成長率往下拉，另外大家要知道，所謂每年平均15%的成長率代表在往後
的五年之內，我們的淨值必須要成長580億美元，如果沒有幾個轟轟烈烈的大
案子的話，是絕對不可能辦的到的，像爆米花攤這種小玩意可不行，而現在的市
場環境也不利於我們尋找合適的大象獵物，不過我們可以向大家保證一定會全神
貫注。
Whever the future holds, I make you one promise: I'll keep at
least 99% of
my net worth in Berkshire for as long as I am around. How
long will that be? My
model is the loyal Democrat in Fort Wayne who
asked to be buried in
Chicago so that he could stay active in the party.
To that end, I've
already selected a "power spot" at the office for my urn.
不管未來會如何，有一點我可以向各位保證的是，只要我還在，我都會將我個人
99%以上的身家擺在Berkshire，至於能夠維持多久? 我則是希望能夠效法Fort
Wayne忠誠的民主黨員，臨終時還表示希望死後能夠葬在芝加哥，好就近參加
黨的活動，所以我也在辦公室事先選好的一個好位置，以後可以用來擺我的骨灰
罈。
* * * * * * * * * * * *
Our financial growth has been matched by employment growth
We now have 47,566 on
our payroll, with the acquisitions of 1998
bringing 7,074
employees to us and internal growth adding another
2,500. To balance this
gain of 9,500 in hands-on employees, we have
enlarged the staff at
world headquarters from 12 to 12.8. (The .8
doesn't refer to me or
Charlie: We have a new person in accounting,
working four days a
week.) Despite this alarming trend toward
corporate bloat, our
after-tax overhead last year was about $3.5
million, or well under
one basis point (.01 of 1%) of the value of the
assets we manage.
隨著經濟實力的增長，我們雇用員工的人數也同步增加，我們現在擁有47,566
位員工，其中包含1998年購併通用再保後併進來的7,074人，以及內部增聘
的2,500人，而未了服務新增加的9,500個人手，我們的總部人員也從原來的
12人擴編為12.8人(0.8指的不是查理或是我本人，而是我們新請的一位會計
人員，一個禮拜工作四天)，儘管這是組織浮濫的警訊，但是我們去年稅後總部
開支卻只有區區350萬美元，大概佔我們管理總資產的一個基本點(萬分之一)
還不到。
Taxes
租稅
One beneficiary of our increased size has been the U.S. Treasury
The federal
income taxes that Berkshire and General Re have paid, or
will soon pay, in
respect to 1998 earnings total $2.7 billion. That means
we shouldered all of
the U.S. Government's expenses for more than a
half-day.
我們規模擴大最直接的受惠者之一就是美國國庫，今年光是Berkshire與通用再
保已經支付或即將支付的聯邦所得稅就有27億美元之譜，這筆錢足夠供美國政
府支應半天以上的開銷。
Follow that thought a little further: If only 625 other U.S
taxpayers had
paid the Treasury as much as we and General Re did last
year, no one else --
neither corporations nor 270 million citizens --
would have had to pay
federal income taxes or any other kind of federal
tax (for example,
social security or estate taxes). Our shareholders can
truly say that they
"gave at the office."
也就是說，全美國只要有625個像Berkshire及通用再保這樣的納稅人的話，
其他所有的美國公司或二億七千萬的美國公民都可以不必再支付任何的聯邦所
得稅或其他任何形式的聯邦稅(包含社會福利或房地產稅)，所以Berkshire的股
東可以說是"功在國家"。
Writing checks to the IRS that include strings of zeros does no
bother
Charlie or me. Berkshire as a corporation, and we as individuals,
have
prospered in America as we would have in no other country.
Indeed, if we lived in
some other part of the world and completely
escaped taxes, I'm
sure we would be worse off financially (and in many
other ways as well).
Overall, we feel extraordinarily lucky to have been
dealt a hand in life
that enables us to write large checks to the
government rather than
one requiring the government to regularly write
checks to us -- say,
because we are disabled or unemployed.
對於查理跟我來說，簽發後面有一長串"零"的大額支票一點都不會感到困擾，
Berkshire身為一家美國企業，以及我們身為美國公民，得以在美國這個偉大的
國家繁榮發展，這是在其他國家所不可能達到的，我想要是我們生在世界上的別
的角落，那麼就算是我們再怎麼努力的逃避稅負，我們也不可能像現在這麼富有
(也包含生活上其他層面)，從另一個角度來說，我們感到很幸運能夠支付一大筆
錢給政府，而非因為我們殘障或失業，要靠政府三不五時來救濟我們。
Berkshire's tax situation isometimes misunderstood. First,
capital gains
have no special attraction for us: A corporation pays a 35%
rate on
taxable income, whether it comes from capital gains or from
ordinary
operations. This means that Berkshire's tax on a long-term
capital gain is fully
75% higher than what an individual would pay on an
identical gain.
Berkshire的租稅負擔常常引起外界的誤解，首先資本利得對我們並不太有利，
企業不論是資本利得或是其他正常的營利都必須支付35%的所得稅，這也就是
說面對相同的長期資本利得，Berkshire的租稅負擔要比一般個人要高出75%
以上。
Some people harbor another misconception, believing that w
can exclude 70% of all
dividends we receive from our taxable income.
Indeed, the 70% rate
applies to most corporations and also applies to
Berkshire in cases
where we hold stocks in non-insurance subsidiaries.
However, almost all of
our equity investments are owned by our
insurance companies,
and in that case the exclusion is 59.5%. That still
means a dollar of
dividends is considerably more valuable to us than a
dollar of ordinary
income, but not to the degree often assumed.
另外有些人還抱有一個不正確的觀念，以為我們可以將70%以上的股利收入列
為免稅收入，事實上這種適用於大部分美國企業的優惠，僅適用於Berkshire旗
下非保險事業所持有的股票，可惜我們大部分的股份都是由保險事業所持有，這
部份的免稅比例就只有59.5%，當然這仍然代表每一塊錢的股利收入比起其他
一般的應稅收入來得有價值。
* * * * * * * * * * * *
Berkshire truly went all out for the Treasury last year.
connection with the
General Re merger, we wrote a $30 million check to
the government to pay
an SEC fee tied to the new shares created by the
deal. We understand
that this payment set an SEC record. Charlie and I
are enormous admirers
of what the Commission has accomplished for
American investors. We
would rather, however, have found another way
to show our
admiration.
Berkshire去年真的是卯起來貢獻國庫，像是去年的通用再保合併案，我們就付
了3,000萬美元給美國證管會作為發行新股的手續費，這金額創下了證管會有
史以來的新紀錄，查理跟我對於證管會為所有投資人所做的努力感到崇敬，只是
如果能用其他方法來表示敬意就更好了。
GEICO (1-800-847-7536)
GEICO保險
Combine a great idea with a great manager and you're certain t
obtain a
great result. That mix is alive and well at GEICO. The idea is
low-cost auto
insurance, made possible by direct-to-customer
marketing, and the
manager is Tony Nicely. Quite simply, there is no
one in the business
world who could run GEICO better than Tony does.
His instincts are
unerring, his energy is boundless, and his execution is
flawless. While
maintaining underwriting discipline, Tony is building an
organization that is
gaining market share at an accelerating rate.
好的理念加上好的經理人，最後一定可以獲得好的成果，這樣的完美組合在
GEICO身上獲得最佳的印證，透過直效行銷大幅降低成本的汽車保險搭配像
Tony Nicely這樣優秀的經理人，很顯然的全世界再沒有其他人可以像Tony可
以把GEICO經營的這樣好，他的直覺毫無偏差、他的能量沒有上限，而他的行
動完美無暇，在嚴守承保紀律的同時，Tony所帶領的團隊正以超高的速度攻佔
市場佔有率。
This pace has been encouraged by our compensation picies.
The direct writing of
insurance -- that is, without there being an agent
or broker between the
insurer and its policyholder -- involves a
substantial front-end
investment. First-year business is therefore
unprofitable in a
major way. At GEICO, we do not wish this cost to deter
our associates from
the aggressive pursuit of new business -- which, as
it renews, will
deliver significant profits -- so we leave it out of our
compensation formulas.
What's included then? We base 50% of our
associates' bonuses
and profit sharing on the earnings of our
"seasoned" book,
meaning policies that have been with us for more than
a year. The other 50%
is tied to growth in policyholders -- and here we
have stepped on the
gas.
這樣的速度更因為受到我們特殊的獎勵計畫激勵而加快，通常保單直接銷售-也
就是不透過代理或仲介，直接由保險公司與客戶接洽的業務，需要一筆相當大的
前置投資，也因此第一年剛接到的保單通常都沒有什麼利潤，不過要是客戶在接
下來年度能夠繼續續約的話，公司將享有極高的獲利，在GEICO我們為了不希
望公司的同仁因而降低爭取新業務的企圖心，所以我們特別將第一年的數字排除
在關乎員工獎金與分紅的獎金計算公式之外，其中有50%是基於每季的帳上獲
利-代表投保期間超過一年以上的保單，另外的50%則是視公司保單數量的成長
情況，這也是我們正加緊油門全力衝刺的。
I1995, the year prior to its acquisition by Berkshire, GEICO
spent $33
million on marketing and had 652 telephone counselors. Last
year the
company spent $143 million, and the counselor count grew to
2,162. The
effects that these efforts had at the company are shown by
the new business and
in-force figures below:
1995年當Berkshire還沒有完全買下GEICO時，該公司每年的行銷預算是
3,300萬美元，並有652位電話諮詢員，到了去年，公司的行銷預算增加為1.43
億美元，電話諮詢員的人數也增加至2,162位，這些努力所得到的成果可以從
下表該公司新接保單與有效保單數字中看出端倪。
|
|
New Auto |
Auto Policies | |
|
Years |
|
Policies* |
In-Force* |
|
1993 |
354,882 |
2,011,055 | |
|
1994 |
396,217 |
2,147,549 | |
|
1995 |
461,608 |
2,310,037 | |
|
1996 |
617,669 |
2,543,699 | |
|
1997 |
913,176 |
2,949,439 | |
|
1998 |
1,317,761 |
3,562,644 | |
* "Voluntary" only; excludes assigned risks and the like.
In 1999, we will again increase our marketing budget, spendin
at least $190
million. In fact, there is no limit to what Berkshire is willing
to invest in
GEICO's new-business activity, as long as we can
concurrently build the
infrastructure the company needs to properly
serve its
policyholders.
展望1999年我們將繼續增加行銷預算到至少1.9億美元，事實上Berkshire
對於GEICO在新業務取得上的投資是沒有上限的，只要我們可以幫公司建立起
能夠客戶更好服務的各種措施。
Because of the first-year costs, companies that are concerne
about
quarterly or annual earnings would shy from similar investments,
no matter how
intelligent these might be in terms of building long-term
value. Our calculus is
different: We simply measure whether we are
creating more than a
dollar of value per dollar spent -- and if that
calculation is
favorable, the more dollars we spend the happier I am.
而也由於第一年的成本負擔，許多關心短期利益的公司都吝嗇於從事相同的投
資，不管這些動作對公司長期的利益而言，是如何的有助益，但是我們的盤算就
不一樣了，我們只是很簡單的去評量現在所投入的每一塊錢在未來是否能產生高
於一塊錢的效益，如果估算出來確實有利，那麼就算是花再多的錢我也開心。
There is far more to GEICO's success, of course, than low price
and a torrent
of advertising. The handling of claims must also be fair,
fast and friendly --
and ours is. Here's an impartial scorecard on how we
shape up: In New York,
our largest-volume state, the Insurance
Department recently
reported that GEICO's complaint ratio in 1997 was
not only the lowest of
the five largest auto insurers but was also less
than half the average
of the other four.
當然GEICO成功的原因決不僅於低價與強勢的行銷，申訴的處理也要合理、快
速、親切，這裡有一個客觀的數據可說明這點，在業務量居我們首位的紐約地區，
保險主管機關最近公佈GEICO在1997年前五大汽車保險公司當中，其申訴比
率是最低的，其比例甚至遠低於其他四家同業平均數的一半。
GEICO's 1998 profit margin of 6.7% was better than we ha
anticipated -- and,
indeed, better than we wished. Our results reflect an
industry-wide
phenomenon: In recent years, both the frequency of auto
accidents and their
severity have unexpectedly declined. We responded
by reducing rates 3.3%
in 1998, and we will reduce them still more in
1999. These moves will
soon bring profit margins down -- at the least
to 4%, which is our
target, and perhaps considerably lower. Whatever
the case, we believe
that our margins will continue to be much better
than those of the
industry.
GEICO 1998年的獲利率達到6.7%，超過我們當初的預期，事實上是遠高於我
們所能想像的程度，我們的成績反映出產業間普遍存在的一種現象，近幾年來，
汽車意外發生的頻率與程度都比以往減輕許多，也因此我們立刻反應調降3.3%
的費率，預計在1999年還會降得更多，雖然這個舉動馬上使得我們的獲利率下
降，但我們的目標至少是4%或甚至更低，不過不論如何，我們相信GEICO的獲
利率還是遠比同業的數字來得好的許多。
With GEICO's growth and profitability both outanding in 1998,
so also were
its profit-sharing and bonus payments. Indeed, the
profit-sharing payment
of $103 million or 32.3% of salary -- which
went to all 9,313
associates who had been with us for more than a year
-- may well have been
the highest percentage payment at any large
company in the
country. (In addition, associates benefit from a
company-funded pension
plan.)
由於GEICO 1998年優異的績效與獲利能力，該公司的分紅數字亦跟著水漲船
高，總計1.03億美元，約佔薪資的32.3%，由公司全體年資超過一年以上的
9,313位同仁共同來分享，這個數字在全美所有公司當中比例可以說是最高的，
(此外同仁還可經由公司提撥的退休金持股計畫間接受惠)。
The 32.3% may turn out to be a high-water mark, given that th
profitability
component in our profit-sharing calculation is almost
certain to come down
in the future. The growth component, though,
may well increase.
Overall, we expect the two benchmarks together to
dictate very
significant profit-sharing payments for decades to come.
For our associates,
growth pays off in other ways as well: Last year we
promoted 4,612 people.
雖然公司分紅計畫中的成長因子應該還會繼續維持，但考量到獲利因子在未來幾
乎可以肯定會逐漸下降，所以32.3%的比例可以說是破天荒的新高，當然我們
預期這兩項因子在未來的十年內仍然會是分紅計畫中扮演極為重要的角色，不過
對於我們的同仁來說，成長還代表著另一個意義，去年總計有4,612位同仁獲
得升遷。
Impressive as the GEICO figures are, we have far more to do. Ou
market share
improved significantly in 1998 -- but only from 3% to 3?
%. For every policyholder we now have, there are
another ten who should
be giving us their business.
雖然GEICO的績效數字是如此的令人印象深刻，但是我們仍然還有相當大的成
長空間，沒錯! GEICO1998年的市場佔有率確實大幅提升，但也只不過從3%
增加為3.5%而已，換句話說相較於我們現在服務的每一個保單客戶，等於還有
十個在外面等待我們去給他們提供服務。
Some of you who are reading this may be in that category. Abou
40% of those
who check our rates find that they can save money by
doing business with
us. The proportion is not 100% because insurers
differ in their
underwriting judgements, with some giving more credit
than we do to drivers
who live in certain geographical areas or work at
certain occupations.
We believe, however, that we more frequently offer
the low price than
does any other national carrier selling insurance to all
comers. Furthermore,
in 40 states we can offer a special discount --
usually 8% -- to our
shareholders. So give us a call and check us out.
有些正在讀我們年報的人很可能就屬於這類的人，在每個來徵詢GEICO保單費
率的人當中，平均有40%的人會發現向我們投保能為他們省下一筆錢，而之所
以不是百分之百的原因在於每家保險業者對於風險的判斷估計都有所不同，有些
保險公司對於居住於某些特定地區的居民或從事某些特定職業的客戶有偏好，不
過我仍然堅信我們提供給一般民眾的費率通常都低於其他全國性的業者，在隨年
報附贈的GEICO資料中，大家將可以看到我們提供給來自全美40州股東最高
8%的折扣費率，所以記得打電話給我們試一試。
* * * * * * * * * * * *
You may think that one commercial in this section is enough. Bu
I have
another to present, this one directed at managers of publicly-
owned
companies.
在這段我還有一個廣告要打，這廣告主要是要寫給上市公司的經理人看的。
At Berkshire we feel that telling outanding CEOs, such as Tony,
how to run
their companies would be the height of foolishness. Most of
our managers
wouldn't work for us if they got a lot of backseat driving.
(Generally,
they don't have to work for anyone, since 75% or so are
independently
wealthy.) Besides, they are the Mark McGwires of the
business world and
need no advice from us as to how to hold the bat or
when to
swing.
在Berkshire我們一直認為要教像Tony這樣傑出的經理人如何經營公司是一件
相當愚蠢的事，事實上要是我們一直在背後指指點點的話，大部份的經理人可能
早就幹不下去了，(坦白說他們大多根本就可以不必要再靠工作過活，75%以上
的人都已經相當有錢)，他們可以說是商場上的強打麥奎爾，根本就不需要我們
去指導他如何拿棒子或何時揮棒。
Nevertheless, Berkshire's ownership may make even the best o
managers more
effective. First, we eliminate all of the ritualistic and
nonproductive
activities that normally go with the job of CEO. Our
managers are totally
in charge of their personal schedules. Second, we
give each a simple
mission: Just run your business as if: 1) you own
100% of it; 2) it is
the only asset in the world that you and your family
have or will ever
have; and 3) you can't sell or merge it for at least a
century. As a
corollary, we tell them they should not let any of their
decisions be affected
even slightly by accounting considerations. We
want our managers to
think about what counts, not how it will be
counted.
但是由Berkshire掌控企業所有權，卻能夠讓這些經理人有更好的發揮，首先我
們去除掉所有一般總裁必須面對所有的繁文縟節與沒有生產力的活動，我們的經
理人可以全心全意的安排自己個人的行程，第二，我們給予相當明確簡單的任務
指示，那就是一、像自己擁有公司一樣的心態來經營，二、把它當作是你跟你家
人在全世界僅有的資產來看待，第三、在有生之年內，你沒辦法將它賣掉或是讓
別人給併走，我們告訴他們完全不要被會計帳面方面的考量來影響到其實際經營
上的決策，我們希望經理人了解什麼才是最關鍵緊要的事。
Very few CEOs of public companies operate under a simila
mandate, mainly
because they have owners who focus on short-term
prospects and reported
earnings. Berkshire, however, has a shareholder
base -- which it will
have for decades to come -- that has the longest
investment horizon to
be found in the public-company universe.
Indeed, a majority of
our shares are held by investors who expect to die
still holding them. We
can therefore ask our CEOs to manage for
maximum long-term
value, rather than for next quarter's earnings. We
certainly don't ignore
the current results of our businesses -- in most
cases, they are of
great importance -- but we never want them to be
achieved at the
expense of our building ever-greater competitive
strengths.
很少有上市公司的經理人可以如此自在的經營公司，這是因為大部分公司背後的
股東往往只著重短期的利益，相較之下，Berkshire背後有幾十年來一直相當穩
定的股東群，擁有其他上市公司少見的長期投資眼光，事實上，這些股東打算一
直持有Berkshire至死方休，也因此旗下的經理人可以用一輩子的時間來經營公
司，而不用為了下一季的獲利情況來煩惱，當然這絕不代表我們就不關心公司經
營的現況，事實上，這點也相當的重要，只是我們不希望只因為一昧追求短期的
獲利而被迫犧牲掉公司長遠發展的競爭優勢。
I believe the GEICO story demonstrates the benefits of Berkshire'
approach.
Charlie and I haven't taught Tony a thing -- and never will -
- but we
have created an environment that allows him to apply all of his
talents to what's important. He does not have to
devote his time or
energy to board meetings, press interviews,
presentations by
investment bankers or talks with financial analysts.
Furthermore, he
need never spend a moment thinking about financing,
credit ratings or
"Street" expectations for earnings per share. Because
of our ownership
structure, he also knows that this operational
framework will endure for
decades to come. In this environment of freedom, both
Tony and his
company can convert their almost limitless potential
into matching
achievements.
我想GEICO成功的經驗再再顯示出Berkshire經營模式的優越性，查理跟我從
來就沒有指示Tony該怎麼做事，我想以後也不會，我們的工作就是提供他一個
絕佳的環境，讓他能夠徹底發揮才能去做該做的事，他不需要把時間耗費在無意
義的董事會、記者會或分析師與投資銀行業者的簡報上，此外他也不必擔心公司
的資金問題、信用評等或坊間對於公司獲利的預期，而更因為我們特殊的股權結
構，他更了解這樣的營運模式至少可以繼續維持長達數十年以上，在這樣自由的
環境之下，Tony跟他所帶領的團隊就可以將百分百的心思花在應付外在多變的
環境。
If you are running a large, profitable business that will thrive in
GEICO-like environment, check our acquisition
criteria on page 21 and
give me a call. I promise a fast answer and will
mention your inquiry to
no one except Charlie.
所以如果你同樣也在管理一家獲利穩定的大型企業，並且嚮往在像GEICO一樣
的經營環境下大展鴻圖的話，建議你先看看我們報告後段的購併標準，然後打個
電話給我，我保證一定會很快可以回覆，而且除了查理之外，我不會把這件事告
訴其他任何人。
Executive Jet Aviation (1-800-848-6436)
企業主管飛行計畫
To understand the huge potential at Executive Jet Aviation (EJA)
you need some
understanding of its business, which is selling fractional
shares of jets and
operating the fleet for its many owners. Rich Santulli,
CEO of EJA, created
the fractional ownership industry in 1986, by
visualizing an
important new way of using planes. Then he combined
guts and talent to
turn his idea into a major business.
想要了解企業主管飛行計畫(EJA)的無限潛力，你必須要先了解這個產業的特
性，它專門出售專機部份所有權給客戶並且幫所有權人維護保養機隊，EJA的總
裁-Rich
Stantulli預視到飛機使用的革命新方法，於是在1986年發揮其個人
絕佳的膽識與才能讓其創意成真，開創了專機部份所有權這個新興行業。
In a fractional ownership plan, you purchase a portion -- sa
1/8th
-- of any of a wide variety of jets that EEJA offers. That purchase
entitles you
to 100 hours of flying time annually. ("Dead-head" hours
don't count against
your allotment, and you are also allowed to average
your hours over five
years.) In addition, you pay both a monthly
management fee and a
fee for hours actually flown.
按照部份所有權計畫，你可以買下，由EJA提供各種系列的飛機，比如說八分之
一的部份所有權，如此你便可獲得該架飛機每年100個小時的飛行時數，(不包
含飛機停機的時間，而且你還有權利將這些時數自由分配到五年內)，不過每個
月你還必須支付一些管理費以及真正搭乘時的鐘點費。
Then, on a few hours notice, EJA makes your plane, or another a
least as
good, available to you at your choice of the 5500 airports in the
U.S. In
effect, calling up your plane is like phoning for a taxi.
然後，你只要在幾個小時前通知我們，EJA就可以在全美指定的5,500座機場
安排好飛機，換言之，這種便利性跟你打電話叫計程車一樣的方便。
I
first heard about the NetJetsR program, as it is called, about
four years
ago from Frank Rooney, our manager at H.H. Brown. Frank
had used and been
delighted with the service and suggested that I meet
Rich to investigate
signing up for my family's use. It took Rich about 15
minutes to sell me a
quarter (200 hours annually) of a Hawker 1000.
Since then, my family
has learned firsthand -- through flying 900 hours
on 300 trips -- what a
friendly, efficient, and safe operation EJA runs.
Quite simply, they
love this service. In fact, they quickly grew so
enthusiastic that I
did a testimonial ad for EJA long before I knew there
was any possibility of
our purchasing the business. I did, however, ask
Rich to give me a call
if he ever got interested in selling. Luckily, he
phoned me last May,
and we quickly made a $725 million deal, paying
equal amounts of cash
and stock.
我是在四年前頭一次知道它的存在，當時它叫做Netjets計畫，經由我們旗下
H.H. Brown鞋業的經理人Frank Roony的介紹，Frank本身就常利用該公司
所提供的服務，而且覺得相當滿意，於是他建議我可以和Rich碰個面研究看看
是否可以讓我的家族加入，結果Rich前後只花了15分鐘的時間就說服我買下
四分之一的(也就是每年200小時)的霍克1000型飛機的所有權，從此之後，我
的家族在經過900個飛行小時，300次旅程的親身體驗之後，漸漸了解這種服
務為客人所帶來的親切、方便與安全性，毫無疑問地就愛上它，而我本人也在家
族成員熱心的督促下，為該公司的服務在廣告中做了見證，而事實上，在當時我
還沒有想到有可能能夠買下這家公司，不過我還是跟Rich提到，如果他有意願
記得隨時打電話給我，而幸運的是，Rich真的在去年五月份打電話給我，我們
很快就達成這筆7.25億美元的交易，其中現金與股票各半。
EJA, which is by far the largest operator in its industry, has mor
than 1,000
customers and 163 aircraft (including 23 "core" aircraft that
are owned or
leased by EJA itself, so that it can make sure that service is
first-class
even during the times when demand is heaviest). Safety, of
course, is the
paramount issue in any flight operation, and Rich's pilots
-- now numbering about
650 -- receive extensive training at least twice
a year from
FlightSafety International, another Berkshire subsidiary and
the world
leader in pilot training. The bottom line on our pilots: I've sold
the Berkshire
plane and will now do all of my business flying, as well as
my personal
flying, with NetJets' crews.
EJA目前已是這個產業規模最大的業者，擁有超過1,000位的客戶以及163架
的飛機，(其中包含23架由EJA本身擁有或出租的核心飛機，用來確保在訂位
需求最強勁時還能保持最高品質的服務)，安全性當然是任何飛行單位最重要的
考量，而Rich旗下650位的飛行駕駛每年都要到國際飛安公司(另一家由我們
轉投資全世界最大的飛行員訓練公司)接受至少兩次廣泛的訓練課程，對我來說
我能做的都做了，我已經把Berkshire原來的專機給賣掉，並把我的事業與家庭
連同Netjets的同僚一起飛上天際。
Being the leader in this industry is a major advantage for al
concerned.
Our customers gain because we have an armada of planes
positioned throughout
the country at all times, a blanketing that allows
us to provide
unmatched service. Meanwhile, we gain from the
blanketing because it
reduces dead-head costs. Another compelling
attraction for our
clients is that we offer products from Boeing,
Gulfstream, Falcon,
Cessna, and Raytheon, whereas our two
competitors are owned
by manufacturers that offer only their own
planes. In effect,
NetJets is like a physician who can recommend
whatever medicine best
fits the needs of each patient; our competitors,
in contrast, are
producers of a "house" brand that they must prescribe
for one and all.
在這個產業成為領導品牌是最重要的一件事，我們的客戶因為我們遍佈全美各地
的機隊而受惠，因為我們可以提供別家公司比不上的服務，所以我們也可大幅降
低飛機停在地面的時間，另一個令客戶無法抵擋的致命吸引力是我們提供了各式
各樣的飛機，從波音、灣流、Falcon、Cessna到雷神，相較之下我們其他兩個
由飛機製造商經營的競爭對手就只能提供自家生產的飛機，事實上，Netjets就
好像是一位醫生一樣，可以為個別的病人量身訂做，依其所需提供不同的配方，
不像另外兩家業者，都是千篇一律的開出家傳的狗皮膏藥。
In many cases our clients, both corporate and individual, ow
fractions of
several different planes and can therefore match specific
planes to specific
missions. For example, a client might own 1/16th of
three
different jets (each giving it 50 hours of flying time), which in total
give it a virtual fleet, obtained for a small
fraction of the cost of a single
plane.
實際上我們有許多客戶，包含企業與一般個人，同時擁有不同種類的飛機部份所
有權，以應付不同場合所需不同的機型，舉列來說，一個客戶可以擁有三種飛機
各16分之一的所有權(也就是每年各50小時的飛行時數)，這等於只要花一筆
為數不多的錢，就擁有一群機隊一般。
Significantly, it is not only small businesses that can benefit fro
fractional
ownership. Already, some of America's largest companies use
NetJets as a
supplement to their own fleet. This saves them big money in
both meeting
peak requirements and in flying missions that would
require their
wholly-owned planes to log a disproportionate amount of
dead-head hours.
更重要的是，並不是中小企業才可以利用到這種服務，目前已經有一些大企業利
用Netjets來補充本身機隊調度的不足，這讓他們可以不必因為應付尖峰時間與
避免必須長期間停留地面的任務而省下一大筆開支。
When a plane is slated for personal use, the clinching argumen
is that
either the client signs up now or his children likely will later.
That's an
equation I explained to my wonderful Aunt Alice 40 years ago
when she
asked me whether she could afford a fur coat. My reply settled
the issue:
"Alice, you aren't buying it; your heirs are."
當一架飛機被用來當作私人使用，有一個很大的爭議那就是不是由現在的客戶買
單，就是由後輩的子孫來買單，這也是我最敬愛的阿姨Alice在40年前，問我
是否應該買一件貂皮大衣時，我回答她的話:"阿姨，你花的不是自己的錢，而是
你的繼承人的"。
EJA's growth has been explosive: In 1997, it accounted for 31% o
all corporate
jets ordered in the world. Nonetheless, Rich and I believe
that the potential of
fractional ownership has barely been scratched. If
many thousands of
owners find it sensible to own 100% of a plane --
which must be used
350-400 hours annually if it's to make economic
sense -- there must be
a large multiple of that number for whom
fractional ownership
works.
EJA正以爆炸性的速度成長，1997年31%以上的企業專機訂單是由它所下，不
過Rice與我都認為飛機部份所有權的潛力根本還未充分的被挖掘，如果目前有
成千上萬的人認為值得花一整架飛機的錢(也就是每年花350-400個小時飛
行)，那麼我們認為就應該有更多人需要擁有部份飛機的所有權。
In addition to being a terrific executive, Rich is fun. Like most o
our managers,
he has no economic need whatsoever to work. Rich
spends his time at EJA
because it's his baby -- and he wants to see how
far he can take it. We
both already know the answer, both literally and
figuratively: to the
ends of the earth.
Rich除了身為一位傑出的經理人之外，本人也非常風趣幽默，就像是我們旗下
大多數的經理人一樣，Rich根本就不需要靠工作來過活，Rich之所以願意全心
全力地投入在EJA，完全因為這是他一手催生帶大的孩子，他只想要看自己能夠
做到怎樣的地步，當然我們都已經知道最後的答案，不論是從文字上或是從數字
上皆是如此。
* * * * * * * * * * * *
And now a small hint to Berkshire directors: Last year I spen
more than
nine times my salary at Borsheim's and EJA. Just think how
Berkshire's business
would boom if you'd only spring for a raise.
另外給Berkshire董事會們一個小暗示，去年我光是在波仙珠寶與EJA的花費就
是我個人薪水收入的九倍以上，所以大家可以想像到只有給我一點小小的加薪，
保證會對Berkshire集團企業的生意有大大的提昇。
General Re
通用再保
On December 21, we completed our $22 billion acquisition o
General Re Corp. In
addition to owning 100% of General Reinsurance
Corporation, the
largest U.S. property-casualty reinsurer, the company
also owns (including
stock it has an arrangement to buy) 82% of the
oldest reinsurance
company in the world, Cologne Re. The two
companies together
reinsure all lines of insurance and operate in 124
countries.
12月21號我們完成對通用再保公司220億美金的購併案，除了擁有這家全美
國最大的產物險再保險公司之外，這家公司亦擁有世界上歷史最悠久的再保公司
-科隆再保82%的股權(包含預計準備要買進的股份)，兩家公司合起來將可接受
所有保險險種的再保險，並在全世界124個國家設有營業據點。
For many decades, General Re's name has stood for quality
integrity and
professionalism in reinsurance -- and under Ron
Ferguson's leadership,
this reputation has been burnished still more.
Berkshire can add
absolutely nothing to the skills of General Re's and
Cologne Re's managers.
On the contrary, there is a lot that they can
teach us.
幾十年來，通用再保代表的是再保業界品質、正直與專業的保證，而在Ron
Ferguson的領導之下，這個招牌更加獲得肯定，關於通用再保的專業，
Berkshire實在沒有太多的東西可以給他們，反倒是他們應該有很多的東西可以
教我們。
Nevertheless, we believe that Berkshire's ownership will benefi
General Re in
important ways and that its earnings a decade from now
will materially exceed
those that would have been attainable absent the
merger. We base this
optimism on the fact that we can offer General Re's
management a freedom
to operate in whatever manner will best allow
the company to exploit
its strengths.
不過我們仍然相信Berkshire的所有權可以讓通用再保在許多方面受益，而在往
後的十年內，通用再保的獲利情況應該可以比合併之前要好的許多，而我們的自
信心完全建立在我們能夠提供通用再保一個可以完全自由發揮的經營環境。
Let's look for a moment at the reinsurance business t
understand why General
Re could not on its own do what it can under
Berkshire. Most of the
demand for reinsurance comes from primary
insurers who want to
escape the wide swings in earnings that result
from large and unusual
losses. In effect, a reinsurer gets paid for
absorbing the
volatility that the client insurer wants to shed.
讓我們花一點時間來了解為何通用再保自己在再保險業沒有辦法像在
Berkshire之下那樣的發揮，再保險的需求大部分來自於第一線保險公司想要規
避大型的意外損失所造成獲利狀況大幅波動的風險，事實上，再保險業者就是因
為吸收保險業客戶想要規避的變動性而存在。
Ironically, though, a publicly-held reinsurer gets graded by bot
its owners
and those who evaluate its credit on the smoothness of its
own results. Wide
swings in earnings hurt both credit ratings and p/e
ratios, even when the
business that produces such swings has an
expectancy of
satisfactory profits over time. This market reality
sometimes causes a
reinsurer to make costly moves, among them laying
off a significant
portion of the business it writes (in transactions that are
called
"retrocessions") or rejecting good business simply because it
threatens to
bring on too much volatility.
諷刺的是一家上市的再保險公司必須要同時接受股東以及外界評估其獲利穩定
的檢驗，因此盈餘變動過大將會影響其債信評等與本益比，就算就長期而言，這
家公司或許可以獲得更有利的平均報酬，市場的現實有時卻可能導致再保公司因
此犯下重大的錯誤，包含被迫放棄原先接下的一大部分業務(業界一般稱之為倒
退)或放棄上門的好生意，只因為要避免帶來獲利的不穩定性。
Berkshire, in contrast, happily accepts volatility, just as long as
i
carries with it the expectation of increased profits
over time.
Furthermore, we are a Fort Knox of capital, and that
means volatile
earnings can't impair our premier credit ratings.
Thus we have the
perfect structure for writing -- and
retaining -- reinsurance in virtually
any amount. In fact,
we've used this strength over the past decade to
build a powerful
super-cat business.
不過Berkshire卻很能夠接受這樣的不確定性，只要就長期而言，它的預期報酬
能夠有好的表現，更重要的是，Berkshire可以說是資金的諾克斯金庫，也就是
說任何盈餘的劇烈變動一點也不會影響到我們的債信評等，也因此我們有能力也
有意願簽下並自留沒有任何上限的再保金額，事實上，過去十年來，我們早已運
用這個優勢建立起強大的巨災保險業務。
What General Re gives us, however, is the distribution force
technical
facilities and management that will allow us to employ our
structural strength in
every facet of the industry. In particular, General
Re and Cologne Re can
now accelerate their push into international
markets, where the
preponderance of industry growth will almost
certainly occur. As
the merger proxy statement spelled out, Berkshire
also brings tax and
investment benefits to General Re. But the most
compelling reason for
the merger is simply that General Re's
outstanding management
can now do what it does best, unfettered by
the constraints that
have limited its growth.
而通用再保可以給我們的是行銷通路、技術背景與管理技能，讓我們得以將原本
擁有的財務優勢更充分運用到保險業的每一個層面，尤其是通用再保與科隆再保
現在可以加速投入國際市場，這塊大家看好將呈現高成長的處女地，而就像合併
案的公開說明書中所強調的，Berkshire將為通用再保帶來租稅與投資上的優
勢，但是更重要的原因還在於通用再保的優秀經營階層將可以在既有的基礎上，
擺脫原有的種種束縛，盡情地發揮其潛能。
Berkshire is assuming responsibility for General Re's investmen
portfolio,
though not for Cologne Re's. We will not, however, be involved
in General
Re's underwriting. We will simply ask the company to
exercise the
discipline of the past while increasing the proportion of its
business that
is retained, expanding its product line, and widening its
geographical coverage
-- making these moves in recognition of
Berkshire's financial
strength and tolerance for wide swings in earnings.
As we've long said, we
prefer a lumpy 15% return to a smooth 12%.
Berkshire將會承擔管理通用再保投資組合的工作(但科隆再保部份不包含在
內)，除此之外我們並不會干涉通用再保的承保業務，我們只算很簡單地要求他
們繼續維持原有的原則，同時利用Berkshire強大的財務實力以及盈餘變動的超
強忍受力，增加自留業務的比例、擴大現有產品線、增加業務區域，就像是我們
一再強調的，我們寧可接受變動劇烈的15%，也不要穩健平順的12%。
Over time, Ron and his team will maximize General Re's ne
potential. He and I
have known each other for many years, and each of
our companies has
initiated significant business that it has reinsured
with the other.
Indeed, General Re played a key role in the resuscitation
of GEICO from its
near-death status in 1976.
相信只要給他們一點時間，Ron跟他的團隊一定能夠將通用再保的潛力發揮到
極致，我跟他已經結識好幾年了，彼此之間也一直維持有再保業務上的往來，事
實上，通用再保在1976年GEICO當初東山再起的過程中，扮演極為重要的角
色。
Both Ron and Rich Santulli plan to be at the annual meeting, an
I hope you
get a chance to say hello to them.
Ron跟Rich兩人都將出席今年的股東會，希望屆時大家可以過來跟他們兩位打
聲招呼。
The Economics of Property-Casualty Insurance
產物意外險的經營
With the acquisition of General Re -- and with GEICO's busines
mushrooming
-- it becomes more important than ever thaat you
understand how to
evaluate an insurance company. The key
determinants are: (1)
the amount of float that the business generates;
(2) its cost; and (3)
most important of all, the long-term outlook for
both of these factors.
隨著通用再保的加入以及GEICO業務的突飛猛進，大家越來越有必要對如何評
估保險業有更多的了解，其中主要的關鍵因素有(1)這個行業所能產生的浮存金
數量(2)以及它的成本(3)最重要的是這些因素長期的展望。
To begin with, float is money we hold but don't own. In a
insurance operation,
float arises because premiums are received before
losses are paid, an
interval that sometimes extends over many years.
During that time, the
insurer invests the money. Typically, this pleasant
activity carries with
it a downside: The premiums that an insurer takes in
usually do not cover
the losses and expenses it eventually must pay.
That leaves it running
an "underwriting loss," which is the cost of float.
An insurance business
has value if its cost of float over time is less than
the cost the company
would otherwise incur to obtain funds. But the
business is a lemon if
its cost of float is higher than market rates for
money.
首先浮存金是一項我們持有但卻不屬於我們的資金，在保險公司的營運中，浮存
金產生的原因在於保險公司在真正支付損失理賠之前，一般會先向保戶收取保
費，在這期間保險公司會將資金運用在其他投資之上，當然這樣的好處也必須要
付出代價，通常保險業者收取的保費並不足以因應最後支付出去的相關損失與費
用，於是保險公司便會發生承保損失，這就是浮存金的成本，而當一家公司取得
浮存金成本，就長期而言低於從其它管道取得資金的成本時，它就有存在的價
值，否則一旦保險事業取得浮存金的成本若遠高於貨幣市場利率時，它就像是一
顆極酸的檸檬。
A cautions appropriate here: Because loss costs must be
estimated, insurers
have enormous latitude in figuring their
underwriting results,
and that makes it very difficult for investors to
calculate a company's
true cost of float. Errors of estimation, usually
innocent but sometimes
not, can be huge. The consequences of these
miscalculations flow
directly into earnings. An experienced observer
can usually detect
large-scale errors in reserving, but the general public
can typically do no
more than accept what's presented, and at times I
have been amazed by
the numbers that big-name auditors have
implicitly blessed. As
for Berkshire, Charlie and I attempt to be
conservative in
presenting its underwriting results to you, because we
have found that
virtually all surprises in insurance are unpleasant ones.
有一點必須特別注意的是，因為損失成本必須仰賴估算，所以保險業者對於承保
結算的成績有相當大伸縮的空間，連帶使得投資人很難正確地衡量一家保險公司
真正的浮存金成本，估計錯誤，通常是無心，但有時卻是故意，與真實的結果往
往會有很大的差距，而這種結果直接反映在公司的損益表上，有經驗的行家通常
可以經由公司的準備提列情形發現重大的錯誤，但對於一般投資大眾來說，除了
被迫接受財務報表的數字之外，別無他法，而我個人常常被這些經過各大會計師
事務所背書的財務報告所嚇到，至於就Berkshire本身而言，查理跟我在編列財
務報表時，都盡量採取最保守的做法，因為就我們個人的經驗而言，保險業所發
生的意外，通常都不會是什麼好消息。
The table that follows shows the float generated by Berkshire'
insurance
operations since we entered the business 32 years ago. The
data are for every
fifth year and also the last, which includes General
Re's huge float. For
the table we have calculated our float -- which we
generate in large
amounts relative to our premium volume -- by adding
net loss reserves,
loss adjustment reserves, funds held under
reinsurance assumed
and unearned premium reserves, and then
subtracting agents
balances, prepaid acquisition costs, prepaid taxes
and deferred charges
applicable to assumed reinsurance. (Got that?)
下表中所顯示的數字是，Berkshire進入保險事業32年以來所貢獻的浮存金，
資料以每五年計，而最近的五年還包含通用再保大量的浮存金在內，可說是大獲
全勝，在這張計算浮存金的表中，我們將所有的損失準備、損失費用調整準備、
再保預先收取的資金與未賺取保費加總後，再扣除應付佣金、預付購併成本、預
付稅負以及取得再保業務的相關遞延費用，得出浮存金的數額，弄清楚了嗎?? 相
對於我們的保費收入總額，我們的浮存金部位算是相當大的。
|
Year |
Average Float |
|
|
(in $ millions) |
|
1967 |
17 |
|
1972 |
70 |
|
1977 |
139 |
|
1982 |
221 |
|
1987 |
1,267 |
|
1992 |
2,290 |
|
1997 |
7,093 |
|
|
|
|
1998 |
22,762 (yearend) |
Impressive as the growth in our float has been -- 25.4
compounded annually --
what really counts is the cost of this item. If
that becomes too high,
growth in float becomes a curse rather than a
blessing.
每年25.4%的成長確實令人印象深刻，不過真正重要的是取得浮存金的成本，
如果成本過高，那麼浮存金的成長就可能變成一項詛咒而非幸福。
At Berkshire, the news is all good: Our average cost over the 3
years has
been well under zero. In aggregate, we have posted a
substantial
underwriting profit, which means that we have been paid for
holding a
large and growing amount of money. This is the best of all
worlds. Indeed, though
our net float is recorded on our balance sheet as
a liability, it has
had more economic value to us than an equal amount of
net worth would have
had. As long as we can continue to achieve an
underwriting profit,
float will continue to outrank net worth in value.
在Berkshire 我們的記錄算是不錯的了，32年來我們的平均成本遠低於零，總
的來說，我們享有相當多的承保利益，也就是說我們在持有一筆大額且不斷成長
的資金的同時，還能獲得額外的利益，這是全世界之最，雖然就會計原則而言，
浮存金在會計報表係屬於負債，但實際上，這些負債對於Berkshire而言，其價
值遠甚至高於列在帳上的其他股東權益，而只要我們在承保上能夠持續維持利益
的話，這些浮存金的價值就遠勝於帳上的淨值。
During the next few years, Berkshe's growth in float may well be
modest. The
reinsurance market is soft, and in this business,
relationships change
slowly. Therefore, General Re's float -- 2/3rds of
our total --
is unlikely to increase significantly in the near term. We do
expect,
however, that our cost of float will remain very attractive
compared to
that of other insurers.
在往後的幾年內，Berkshire浮存金的成長速度可能會略微減緩，再保險的市場
相當低迷，在這行商業關係的變動相當緩慢，也因此佔我們總浮存金將近三分之
二的通用再保浮存金在可見的未來很難有重大的進展，不過我們仍然預期
Berkshire浮存金的成本相較於其他同業能夠維持相當低的水準。
Sources of Reported Earnings
帳列盈餘的來源
The table that follows shows the main sources of Berkshire'
reported
earnings. In this presentation, purchase-accounting
adjustments are not
assigned to the specific businesses to which they
apply, but are instead
aggregated and shown separately. This procedure
lets you view the
earnings of our businesses as they would have been
reported had we not
purchased them. For the reasons discussed on
pages 62 and 63, this
form of presentation seems to us to be more
useful to investors
and managers than one utilizing generally-accepted
accounting principles
(GAAP), which require purchase-premiums to be
charged off
business-by-business. The total earnings we show in the
table are, of course,
identical to the GAAP total in our audited financial
statements.
下表顯示Berkshire帳列盈餘的主要來源，在這張表中商譽的攤銷數與購買法會
計調整數會從個別被投資公司分離出來，單獨加總列示，之所以這樣做是為了讓
旗下各事業的盈餘狀況，不因我們的投資而有所影響，過去我一再地強調我們認
為這樣的表達方式，較之一般公認會計原則要求以個別企業基礎做調整，不管是
對投資者或是管理者來說，更有幫助，當然最後損益加總的數字仍然會與經會計
師查核的數字一致。
|
(in millions) |
| ||||||||||||
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|
Berkshire's Share |
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|
|
of Net Earnings |
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|
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|
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|
(after taxes and |
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|
|
Pre-Tax Earnings |
|
minority interests) |
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|
1998 |
|
1997 |
|
1998 |
|
1997 |
| |||||
|
Operating Earnings: |
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|
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|
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|
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|
Insurance Group: |
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|
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|
|
|
| |||||
|
Underwriting -- Super-Cat . . . . . . . . . . . . . . . . |
$154 |
|
$283 |
|
$100 |
|
$183 |
| |||||
|
Underwriting -- Other Reinsurance . . . . . . . . . . |
(175) |
|
(155) |
|
(114) |
|
(100) |
| |||||
|
Underwriting -- GEICO . . . . . . . . . . . . . . . . . . |
269 |
|
281 |
|
175 |
|
181 |
| |||||
|
Underwriting -- Other Primary . . . . . . . . . . . . . |
17 |
|
53 |
|
10 |
|
34 |
| |||||
|
Net Investment Income . . . . . . . . . . . . . . . . . . . |
974 |
|
882 |
|
731 |
|
704 |
| |||||
|
Buffalo News . . . . . . . . . . . . . . . . . . . . . . . . . . |
53 |
|
56 |
|
32 |
|
33 |
| |||||
|
Finance and Financial Products Businesses . . . . |
205 |
|
28 |
|
133 |
|
18 |
| |||||
|
Flight Services . . . . . . . . . . . . . . . . . . . . . . . . . . |
181 |
(1) |
140 |
|
110 |
(1) |
84 |
| |||||
|
Home Furnishings . . . . . . . . . . . . . . . . . . . . . . . |
72 |
|
57 |
(2) |
41 |
|
32 |
(2) | |||||
|
International Dairy Queen . . . . . . . . . . . . . . . . . |
58 |
|
-- |
|
35 |
|
-- |
| |||||
|
Jewelry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
39 |
|
32 |
|
23 |
|
18 |
| |||||
|
Scott Fetzer (excluding finance operation) . . . . . |
137 |
|
119 |
|
85 |
|
77 |
| |||||
|
See's Candies . . . . . . . . . . . . . . . . . . . . . . . . . . |
62 |
|
59 |
|
40 |
|
35 |
| |||||
|
Shoe Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
33 |
|
49 |
|
23 |
|
32 |
| |||||
|
General Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
26 |
(3) |
-- |
|
16 |
(3) |
-- |
| |||||
|
Purchase-Accounting Adjustments . . . . . . . . . . . |
(123) |
|
(101) |
|
(118) |
|
(94) |
| |||||
|
Interest Expense (4) . . . . . . . . . . . . . . . . . . . . . . |
(100) |
|
(107) |
|
(63) |
|
(67) |
| |||||
|
Shareholder-Designated Contributions . . . . . . . . |
(17) |
|
(15) |
|
(11) |
|
(10) |
| |||||
|
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
34 |
|
60 |
|
29 |
|
37 |
| |||||
|
Operating Earnings . . . . . . . . . . . . . . . . . . . . . . |
1,899 |
|
1,721 |
|
1,277 |
|
1,197 |
| |||||
|
Capital Gains from Investments . . . . . . . . . . . . . |
2,415 |
|
1,106 |
|
1,553 |
|
704 |
| |||||
|
Total Earnings - All Entities . . . . . . . . . . . . . . . . |
$4,314 |
|
$2,827 |
|
$ 2,830 |
|
$1,901 |
| |||||
|
===== |
===== |
===== |
===== |
||||||||||
|
(1) Includes Executive Jet from August 7, 1998. |
(3) From date of acquisition, December 21,
1998. |
Yocan be proud of our operating managers. They almost
invariably deliver
earnings that are at the very top of what conditions in
their industries
allow, meanwhile fortifying their businesses' long-term
competitive strengths.
In aggregate, they have created many billions of
dollars of value for
you.
大家絕對可以我們旗下優秀的經理人為榮，他們幾乎都能夠在各自產業所能允許
的情況下創造出最好的獲利，同時還能繼續強化企業長期的競爭優勢，總的來
說，他們已為所有的股東創造出數十億美元的價值。
An example: In my 1994 letter, I reported on Ralph Schey'
extraordinary
performance at Scott Fetzer. Little did I realize that he was
just warming
up. Last year Scott Fetzer, operating with no leverage
(except for a
conservative level of debt in its finance subsidiary), earned
a record
$96.5 million after-tax on its $112 million net worth.
舉例來說，在1994年的年報中，我曾經向各位提到Ralph在史考特飛茲的傑
出表現，只是我萬萬沒想到的是那時還只能算是他的熱身階段，去年在沒有任何
借款的情況下(除了其財務子公司的一點借款之外)，靠著1.12億美元的淨值，
竟締造出9,650萬美元的驚人稅後淨利。
Today, Berkshire has an unusually large number of individuals
such as
Ralph, who are truly legends in their industries. Many of these
joined us
when we purchased their companies, but in recent years we
have also identified a
number of strong managers internally. We further
expanded our corps of
all-stars in an important way when we acquired
General Re and EJA.
時至今日，Berkshire 有一大群傑出的明星份子，就像Ralph等在各自的產業
都是一方之霸，其中很多人是在我們買下公司時，就已經加入了我們的行列，不
過近來年我們也從內部發掘了不少的人才，而最近在購併通用再保與EJA之後，
更讓我們的夢幻隊伍聲勢大振。
Charlie and I have the easy jobs at Berkshire: We do very littl
except
allocate capital. And, even then, we are not all that energetic. We
have one
excuse, though: In allocating capital, activity does not
correlate with
achievement. Indeed, in the fields of investments and
acquisitions, frenetic
behavior is often counterproductive. Therefore,
Charlie and I mainly
just wait for the phone to ring.
查理跟我在Berkshire的工作其實很簡單，主要的任務就是資金分配，即便是如
此我們的態度也不是那麼的積極，其中有一個原因在於做的多，不代表就拿得
多，事實上，在投資與購併的世界中，瘋狂的行為往往會造成反效果，也因此查
理跟我通常都只是靜靜地等待電話鈴響。
Our managers, however, work very hard -- and it shows
Naturally, they want
to be paid fairly for their efforts, but pay alone can't
explain their
extraordinary accomplishments. Instead, each is primarily
motivated by a vision
of just how far his or her business can go -- and
by a desire to be the
one who gets it there. Charlie and I thank them on
your behalf and ours.
當然我們的經理人也非常的努力，且成效顯著，而很自然的，他們也希望自己的
努力可以得到公平的對待，只是金錢的報酬並不足以解釋他們為何能有這樣傑出
的成就，主要的動力還在於每個經理人都想要了解自己所帶領的企業到底能夠發
揮到怎樣的境界，為此，查理跟我謹代表大家向他們致上十二萬分的謝意。
* * * * * * * * * * * *
Additional information about our various businesses is given o
pages 39-53,
where you will also find our segment earnings reported
on a GAAP basis. In
addition, on pages 65-71, we have rearranged
Berkshire's financial
data into four segments on a non-GAAP basis, a
presentation that
corresponds to the way Charlie and I think about the
company.
在年報中你可以找到依照一般公認會計原則編製，詳細的部門別資訊，另外你還
可以找到經過重編，依照Berkshire四大部門編排的資訊，這是查理跟我認為最
能夠完整呈現Berkshire現況的模式。
Normally, we follow this section with one on "Look-Through
Earnings. Because the
General Re acquisition occurred near yearend,
though, neither a
historical nor a pro-forma calculation of a 1998
number seems relevant.
We will resume the look-through calculation in
next year's report.
通常接下來這一段應該是報告完整透視盈餘，但是由於通用再保的購併案發生的
時點接近年底，所以不管是歷史性或擬制性的1998年的獲利數字都已無關緊
要，在明年的報告中，我們會再恢復完整透視盈餘的計算式。
Investments
投資
Below we present our common stock investments. Those with
market value of more
than $750 million are itemized.
下表是Berkshire市價超過七億五千萬美元以上的股票投資。
|
|
12/31/98 | |||
|
Shares |
Company |
Cost* |
Market | |
|
|
|
(dollars in millions) | ||
|
50,536,900 |
American Express Company .. . . . . |
$1,470 |
$ 5,180 | |
|
200,000,000 |
The Coca-Cola Company . . . . . . .. . |
1,299 |
13,400 | |
|
51,202,242 |
The Walt Disney Company . . . . . . |
281 |
1,536 | |
|
60,298,000 |
Freddie Mac .. |
308 |
3,885 | |
|
96,000,000 |
The Gillette Company . . . . . . . . |
600 |
4,590 | |
|
1,727,765 |
The Washington Post Company . . . . . . |
11 |
999 | |
|
63,595,180 |
Wells Fargo & Company . . . .. . . . |
392 |
2,540 | |
|
|
Others . . . . . . .. . . . |
2,683 |
5,135 | |
|
|
Total Common Stocks . . . . . . . . |
$ 7,044 |
$ 37,265 | |
|
===== |
===== | |||
Represents tax-basis cost which, in aggregate, is $1.5 billion less than GAAP cost.
*係以稅務為基礎的成本，比一般公認會計原則的帳面成本少15億美元。
During the year, we slightly increased our holdings in America
Express, one
of our three largest commitments, and left the other two
unchanged. However, we
trimmed or substantially cut many of our
smaller positions.
Here, I need to make a confession (ugh): The portfolio
actions I took in 1998
actually decreased our gain for the year. In
particular, my
decision to sell McDonald's was a very big mistake.
Overall, you would
have been better off last year if I had regularly snuck
off to the movies
during market hours.
今年我們稍微提高了在美國運通的持股，至於其餘另外兩項重大的股票投資則維
持不變，不過在此同時我們也大幅出脫其餘一些較小的投資部位，在這裡我也必
須承認，嗯! 我在1998年做的一些舉動事實上導致我們的利得不增反減，尤其
是決定賣出麥當勞使得我們損失慘重，也就是說如果去年我在股票交易時間一動
也不動的話，大家可能會更好過一點。
At yearend, we held more than $15 billion in cash equivalent
(including
high-grade securities due in less than one year). Cash never
makes us
happy. But it's better to have the money burning a hole in
Berkshire's pocket
than resting comfortably in someone else's. Charlie
and I will continue
our search for large equity investments or, better yet,
a really major
business acquisition that would absorb our liquid assets.
Currently, however, we
see nothing on the horizon.
到年底，我們手上持有超過150億美元的約當現金(包含一年內到期的優質債
券)，抱著這麼多現金讓我們感到相當不自在，但是我們寧願讓這150億美元放
在我們的手裡發癢，也不要讓他們輕輕鬆鬆落入他人的口袋裡，當然查理跟我還
是會繼續去尋找合適的大型股票投資，當然要是能來一個真正的企業購併案會更
好，以消化我們手上過剩的流動資金，不過到目前為止，我們還沒有發現任何潛
在的目標。
Once we knew that the General Re merger would definitely ke
place, we
asked the company to dispose of the equities that it held. (As
mentioned
earlier, we do not manage the Cologne Re portfolio, which
includes many
equities.) General Re subsequently eliminated its
positions in about 250
common stocks, incurring $935 million of taxes
in the process. This
"clean sweep" approach reflects a basic principle
that Charlie and I
employ in business and investing: We don't back into
decisions.
當整個合併案正式敲定之後，我們立刻要求公司處分掉手頭上所有的股票投資
(就像之前提到過的，這不包含科隆再保手上持有的各類有價證券)，而通用再保
也立刻將手上超過250種以上的股票出脫，為此還繳了9.35億美元的稅，這個
清倉的動作充分反應查理跟我在經營與投資上的基本原則，我們不替過去決策背
書。
Last year I deviated from my standard practice of not disclosin
our
investments (other than those we are legally required to report) and
told you about three unconventional investments we
had made. There
were several reasons behind that disclosure. First,
questions about our
silver position that we had received from regulatory
authorities led us to
believe that they wished us to publicly acknowledge
this investment.
Second, our holdings of zero-coupon bonds were so
large that we
wanted our owners to know of this investment's
potential impact on
Berkshire's net worth. Third, we simply wanted to
alert you to the fact
that we sometimes do make
unconventional commitments.
去年我打破從來不主動公開投資組合的慣例(除非法令有特別要求)，告訴大家我
們最近參與的三項不同於以往的投資，之所以會這樣做主要有幾個原因，第一關
於投資銀幣，主管機關提出的一些問題，讓我們感覺他們希望我們能夠公開承認
這項投資的存在，第二由於零息債券的投資部位大到讓我們覺得還是讓我們的股
東知道這項投資對公司淨值的影響性會比較好，第三我們只是要讓大家知道，三
不五時我們還是會做出一些與以往大不相同的投資動作。
Normally, however, as discussed in the Owner's Manual on pag
61, we see no
advantage in talking about specific investment actions.
Therefore -- unless we
again take a position that is particularly large -
- we will not post you
as to what we are doing in respect to any specific
holding of an
unconventional sort. We can report, however, that we have
eliminated certain of
the positions discussed last year and added certain
others.
不過就像是我們在股東手冊一再提到的，我們不認為主動揭露特定的投資動作會
給公司帶來任何的好處，也因此除非我們再度在某些特別的項目有非常大筆投
資，我們將不會再向各位報告我們在某些非傳統投資的有關事項，當然我們還是
會定期向大家報告去年我們出脫的某些部位或是新增了某些投資部位。
Our never-comment-even-if-untrue policy in regard t
investments may
disappoint "piggybackers" but will benefit owners:
Your Berkshire shares
would be worth less if we discussed what we are
doing. Incidentally,
we should warn you that media speculation about
our investment moves
continues in most cases to be incorrect. People
who rely on such
commentary do so at their own peril.
我們這種對投資"就算不對也不評論"的做法，雖然讓一些有意搭順風車的人無法
得逞，但卻也能達到保護股東權益的目的，因為如果我們不斷地公開討論所有的
投資細節，將會嚴重損及各位所持有的Berkshire股份的價值，同時我也要提醒
大家通常媒體報導有關我們的投資動向往往都是錯誤的，相信他們話的人可能會
自食惡果。
Accounting -- Part 1
會計問題-第一部份
Our General Re acquisition put a spotlight on an egregious fw
in accounting
procedure. Sharp-eyed shareholders reading our proxy
statement probably
noticed an unusual item on page 60. In the pro-
forma statement of
income -- which detailed how the combined 1997
earnings of the two
entities would have been affected by the merger --
there was an item
stating that compensation expense would have been
increased by $63
million.
我們與通用再保之間的購併案反映出會計原則一直以來存在的一個重大瑕疵，眼
尖的股東在閱讀合併相關的股東會文件時，應該都會發現其中有一項不尋常的項
目，在擬制性的損益表中，清楚模擬出如果兩者1997年的盈餘如果在合併後會
是怎麼的結果，其中有一項薪資酬勞費用因為合併而增加了6,300萬美元。
This item, we hasten to add, does not signal that either Charlie o
I have
experienced a major personality change. (He still travels coach
and quotes
Ben Franklin.) Nor does it indicate any shortcoming in
General Re's
accounting practices, which have followed GAAP to the
letter. Instead, the
pro-forma adjustment came about because we are
replacing General Re's
longstanding stock option plan with a cash plan
that ties the
incentive compensation of General Re managers to their
operating
achievements. Formerly what counted for these managers
was General Re's stock
price; now their payoff will come from the
business performance
they deliver.
這個項目我必須特別強調的是並不代表查理跟我的個性有任何重大的改變(他還
是一樣搭乘長途巴士出差，並以富蘭克林的名字訂位)，同時也不表示通用再保
本身的會計政策有何疏失之處，該公司業已完全依照一般公認會計原則運作，實
際的情形是我們特別要求通用再保將原先發給員工的認股權全部以等值的現金
獎勵取代，在此之前與這些經理人本身權益息息相關的是公司的股價，在此之
後，他們可以領到的報酬完全要看他們各自負責單位的績效表現。
The new plan and the terminated option arrangement hav
matching economics,
which means that the rewards they deliver to
employees should, for
a given level of performance, be the same. But
what these people
could have formerly anticipated earning from new
option grants will now
be paid in cash. (Options granted in past years
remain outstanding.)
新的計畫與先前的認股權計畫對公司員工來說具有相同的效益，也就是說在相同
的表現之下，公司給予員工同樣的報酬獎勵，只不過原先大家預期可以獲得的股
票將會改以現金取代，(至於先前已經發放的選擇權則繼續保持流通在外)。
Though the two plans are an economic wash, the cash plan w
are putting in will
produce a vastly different accounting result. This
Alice-in-Wonderland
outcome occurs because existing accounting
principles ignore the
cost of stock options when earnings are being
calculated, even
though options are a huge and increasing expense at a
great many
corporations. In effect, accounting principles offer
management a choice:
Pay employees in one form and count the cost, or
pay them in another
form and ignore the cost. Small wonder then that
the use of options has
mushroomed. This lop-sided choice has a big
downside for owners,
however: Though options, if properly structured,
can be an appropriate,
and even ideal, way to compensate and motivate
top managers, they are
more often wildly capricious in their distribution
of rewards,
inefficient as motivators, and inordinately expensive for
shareholders.
雖然兩項計畫在經濟實質上相當，但我們改採的現金獎勵計畫在會計帳面上卻相
當不利，這種愛莉絲夢遊仙境的結果主要起源於會計原則在計算公司獲利時，根
本上忽略認股權的成本，雖然在許多大企業員工認股權早已成為公司龐大的成本
負擔，事實上，會計原則給予公司經理人一個相當彈性的空間，若你以這種形式
給予員工報酬，就必須計入成本，但若你以另一種形式給予員工報酬，就不必計
入成本，也難怪員工認股權已經到了過度氾濫的地步，一面倒地採用這種方式使
得公司的股東權益大大受損，雖然我承認選擇權若能夠好好的規劃，有時候是可
以成為一種補償同時激勵高階經理人的好方法，只是大部分的時候，他們通常過
於慷慨，嚴重損及原有股東的利益，並不適合作為一項好的激勵工具。
Whatever the merits of options may be, their accountin
treatment is
outrageous. Think for a moment of that $190 million we
are going to spend for
advertising at GEICO this year. Suppose that
instead of paying cash
for our ads, we paid the media in ten-year, at-
the-market Berkshire
options. Would anyone then care to argue that
Berkshire had not
borne a cost for advertising, or should not be charged
this cost on its
books?
不過不管選擇權到底有怎樣的優點，有關它們的會計處理原則實在是太離譜，試
想今年我們預計投入1.9億美元在GEICO汽車保險的廣告之上，假若我們不支
付現金而改以同等價值的Berkshire股票選擇權作為給予廠商的對價，那麼有沒
有人會跳出來說Berkshire的廣告怎麼就可以不花一毛錢，難道它不應該反應在
公司的會計帳簿之上嗎?
Perhaps Bishop Berkeley -- you may remember him as th
philosopher who mused
about trees falling in a forest when no one was
around -- would
believe that an expense unseen by an accountant does
not exist. Charlie and
I, however, have trouble being philosophical
about unrecorded
costs. When we consider investing in an option-
issuing company, we
make an appropriate downward adjustment to
reported earnings,
simply subtracting an amount equal to what the
company could have
realized by publicly selling options of like quantity
and structure.
Similarly, if we contemplate an acquisition, we include in
our evaluation the
cost of replacing any option plan. Then, if we make a
deal, we promptly take
that cost out of hiding.
或許Berkeley主教，(大家或許還記得他曾經提到一棵倒在無人跡深山中的大樹
的笑話)，會真的相信會計師沒有發現的成本就代表它不存在，不過要查理跟我
接受這樣的概念實在是有點困難，當我們考慮要投資一家有發行選擇權的公司，
我們會先將這家公司的獲利能力向下修正，直接扣除若對外公開發行這些選擇權
所能得到的對價，同樣的，要是我們準備要購併一家公司時，我們也會將更換原
有選擇權的成本列入考量，然後等到合併案正式通過後，我們會立即將相關成本
反應在會計帳上。
Readers who disagree with me about options will by this time b
mentally
quarreling with my equating the cost of options issued to
employees with those
that might theoretically be sold and traded
publicly. It is true,
to state one of these arguments, that employee
options are sometimes
forfeited -- that lessens the damage done to
shareholders --
whereas publicly-offered options would not be. It is
true, also, that
companies receive a tax deduction when employee
options are exercised;
publicly-traded options deliver no such benefit.
But there's an offset
to these points: Options issued to employees are
often repriced, a
transformation that makes them much more costly
than the public
variety.
不同意我對選擇權看法的讀者這時可能會抗議我將發給員工認股權的成本跟對
外公開發行的股票選擇權劃上等號，沒有錯，在這些爭辯中，員工的認股權有時
會被沒收，使得股東權益受損的程度有可能會減小，公開發行的選擇權就沒有這
項優點，而員工在行使認股權時，公司也可因而獲得抵稅權，公開發行的選擇權
也沒有這項好處，但是在另外一方面，員工選擇權的轉換價格常常會做修正，比
起公開發行的選擇權來說，所付出的代價更為高昂。
It's sometimes argued that a non-transferable option given to a
employee is
less valuable to him than would be a publicly-traded option
that he could
freely sell. That fact, however, does not reduce the cost of
the non-transferable option Giving an employee a
company car that can
only be used for certain purposes diminishes its
value to the employee,
but does not in the least diminish its cost to the
employer.
也有人認為限制移轉的員工認股權其價值對於員工來說，比沒有可以公開交易的
選擇權來得低，但這種講法並沒有辦法淡化公司發行認股權給員工所需付出的代
價，就像是公司配給員工的配車，雖然限制員工只能作為公務使用，但是這並不
代表公司就可以不必花錢買車。
The earning revisions that Charlie and I have made for options i
recent years
have frequently cut the reported per-share figures by 5%,
with 10% not all that
uncommon. On occasion, the downward
adjustment has been so
great that it has affected our portfolio
decisions, causing us
either to make a sale or to pass on a stock
purchase we might
otherwise have made.
而查理跟我在對這類選擇權所作的盈餘修正通常會在5%以上，而就算是10%以
上的幅度也不會令人感到意外，有時調整的幅度甚至大到影響我們的投資決策，
有時更因此被迫要將持股賣出或是放棄買進原先看上的投資標的。
A few years ago we asked three questions in these pages t
which we have not yet
received an answer: "If options aren't a form of
compensation, what are
they? If compensation isn't an expense, what is
it? And, if expenses
shouldn't go into the calculation of earnings, where
in the world should
they go?"
幾年前，我們就曾提出至今還沒有得到解答的三個問題，"如果選擇權不算是一
種報酬的話，那它又算是什麼? 而如果給予員工的報酬不算是一種費用的話? 那
它又算是什麼? 而如果費用不必列入損益表計算盈餘的話，那麼又應該把它們擺
到哪裡去呢??"
Accounting -- Part 2
會計問題-第二部份
The role that managements have played in stock-option
accounting has hardly
been benign: A distressing number of both CEOs
and auditors have in
recent years bitterly fought FASB's attempts to
replace option fiction
with truth and virtually none have spoken out in
support of FASB. Its
opponents even enlisted Congress in the fight,
pushing the case that
inflated figures were in the national interest.
管理階層在員工認股選擇權會計問題上所扮演的角色絕對不能馬虎，最近有一群
公司主管與會計師極力反對美國財務會計準則委員會打算將原先不實的選擇權
予以更正，但結果卻沒有人公開表示支持，反對者甚至動員國會議員參與遊說，
將這種虛增盈餘的議題提升到國家利益的層次。
Still, I believe that the behavior of managements has been eve
worse when it
comes to restructurings and merger accounting. Here,
many managements
purposefully work at manipulating numbers and
deceiving investors.
And, as Michael Kinsley has said about Washington:
"The scandal isn't in
what's done that's illegal but rather in what's legal."
此外，我認為有些管理當局在公司再造與合併的會計處理上的心態更為可議，很
多管理當局刻意操縱損益，欺騙投資人，而就像Michael Kinsley曾經批評華府
的"真正的醜聞不是那些違反法律的，而是那些完全合法的行為"。
It was once relatively easy to tell the good guys in accountin
from the bad:
The late 1960's, for example, brought on an orgy of what
one charlatan dubbed
"bold, imaginative accounting" (the practice of
which, incidentally,
made him loved for a time by Wall Street because he
never missed
expectations). But most investors of that period knew who
was playing games.
And, to their credit, virtually all of America's most-
admired companies then
shunned deception.
在以前透過財務報表，很容易可以分辨一家公司的好壞，但時至1960年代後
期，卻掀起一波騙徒稱之為"大膽且富想像力的會計"的熱潮，(這種做法在當時受
到華爾街人士的熱烈歡迎，因為他們從來都不會讓人失望)，不過在當時大家都
知道誰是老千，至於一般受到崇敬的美國大公司基本上都潔身自好，相當愛惜自
己的羽毛。
In recent years, probity has eroded. Many major corporations stil
play things
straight, but a significant and growing number of otherwise
high-grade
managers -- CEOs you would be happy to have as spouses
for your children or
as trustees under your will -- have come to the view
that it's okay to
manipulate earnings to satisfy what they believe are Wall
Street's desires.
Indeed, many CEOs think this kind of manipulation is
not only okay, but
actually their duty.
只是近年來，道德逐漸淪喪，雖然許多大企業還是開大門走大路，不過卻有越來
越多所謂高格調的經理人，(就是那種你想要把女兒許配給他或請他擔任遺囑執
行人的人)，漸漸認為玩弄數字以符合華爾街預期的做法沒有什麼大不了的，沒
錯，有許多經理人不但覺得這類操縱數字的行為很正常，甚至是他們的工作責任
之一。
These managers start with the assumption, all too common, tha
their job at
all times is to encourage the highest stock price possible (a
premise with
which we adamantly disagree). To pump the price, they
strive, admirably, for
operational excellence. But when operations don't
produce the result
hoped for, these CEOs resort to unadmirable
accounting stratagems.
These either manufacture the desired
"earnings" or set the
stage for them in the future.
這些經理人一開始往往就認定他們的主要工作之一是讓公司的股價越高越好，
(關於這點我們實在不敢苟同)，而為了撐高股價，他們可以說是無所不用其極地
在公司營運上衝刺，只是當公司營運結果不若預期時，他們自然而然地會想到運
用不當的會計手法，不是"製造"出想要的盈餘數字，就是預埋伏筆，在未來的盈
餘做手腳。
Rationalizing this behavior, these managers often say that thei
shareholders
will be hurt if their currency for doing deals -- that is, their
stock -- is
not fully-priced, and they also argue that in using accounting
shenanigans
to get the figures they want, they are only doing what
everybody else does.
Once such an everybody's-doing-it attitude takes
hold, ethical
misgivings vanish. Call this behavior Son of Gresham: Bad
accounting drives out
good.
而為了讓這樣的行為合理化，這些經理人常常表示如果公司股票的價格不能合理
反應其價值，則公司股東的權益將會受損，同時他們也聲稱運用會計騙術以得到
想要的數字的做法很普遍，而一旦這種"別人都這樣，為何我不行"的想法生根
後，道德方面的顧慮早已消失殆盡，Gresham之子稱這樣的行為叫做:邪惡的會
計創造出偽裝的善良。
The distortiodu jour is the "restructuring charge," an
accounting
entry that can, of course, be legitimate but that too often is a
device for
manipulating earnings. In this bit of legerdemain, a large
chunk of costs that
should properly be attributed to a number of years
is dumped into a
single quarter, typically one already fated to
disappoint investors.
In some cases, the purpose of the charge is to
clean up earnings
misrepresentations of the past, and in others it is to
prepare the ground for
future misrepresentations. In either case, the
size and timing of
these charges is dictated by the cynical proposition
that Wall Street will
not mind if earnings fall short by $5 per share in a
given quarter, just as
long as this deficiency ensures that quarterly
earnings in the future
will consistently exceed expectations by five
cents per share.
有一種會計科目叫做"重整損失"，在法理上雖然屬於合法但卻通常被當作操縱損
益的工具，通常公司會將多年來累積的開支在單一個季節一次提列損失，這是一
種典型讓投資人大失所望的騙術，有時候，公司則是為了將過去塑造不實在的盈
餘所累積的垃圾一次出清或是為虛增未來年度的盈餘預先做鋪路，不管怎樣，這
些做法的主要前提都是抓住華爾街只關心未來年度的盈餘高於預期五分錢，卻一
點也不在乎公司當季的盈餘少了五塊錢的心理。
This dump-everything-into-one-quarter behior suggests a
corresponding "bold,
imaginative" approach to -- golf scores. In his
first round of the
season, a golfer should ignore his actual performance
and simply fill his
card with atrocious numbers -- double, triple,
quadruple bogeys --
and then turn in a score of, say, 140. Having
established this
"reserve," he should go to the golf shop and tell his pro
that he wishes to
"restructure" his imperfect swing. Next, as he takes his
new swing onto the
course, he should count his good holes, but not the
bad ones. These
remnants from his old swing should be charged
instead to the reserve
established earlier. At the end of five rounds,
then, his record will
be 140, 80, 80, 80, 80 rather than 91, 94, 89, 94,
92. On Wall Street,
they will ignore the 140 -- which, after all, came
from a "discontinued"
swing -- and will classify our hero as an 80
shooter (and one who
never disappoints).
這種將所有的垃圾在當季一次出清的做法跟高爾夫球場上一種大膽偷機的方法
類似，在球季一開始，取巧的高爾夫球員不管本身實際的實力，先在計分卡上填
上最離譜的成績-柏忌、雙柏忌、三柏忌，結果一算下來可能有140桿之多，接
著他再跑到高爾夫球店給教練表示他想要調整一下不理想的揮桿，然後等到他再
度回到球場上時，他就專挑好的洞的成績，而不好的部份則全部歸到先前所預留
的準備，結果五回合下來，他的成績就變成140桿、80桿、80桿、80桿、80
桿，而不是本來的91桿、94桿、89桿、94桿、92桿，不過對華爾街的哪些
人來說，他們根本就不管最前面的140桿，因為那不是正常情況下的表現，然
後直接把這位選手歸類為平均80桿的高手(而且成績還相當穩定)。
For those who prefer to cheat up front, there would be a varian
of this
strategy. The golfer, playing alone with a cooperative caddy-
auditor,
should defer the recording of bad holes, take four 80s, accept
the plaudits
he gets for such athleticism and consistency, and then turn
in a fifth
card carrying a 140 score. After rectifying his earlier
scorekeeping sins with
this "big bath," he may mumble a few apologies
but will refrain from
returning the sums he has previously collected
from comparing
scorecards in the clubhouse. (The caddy, need we add,
will have acquired a
loyal patron.)
而對於這種喜歡偷雞摸狗的球員來說，有幾個變數是他們要注意的，首先球員要
找到能夠配合的桿弟-也就是會計師，好讓他可以將不好的洞數往後遞延，順利
地先拿下四局80桿，使得這位球員可以得到表現傑出且穩定的運動家稱號後，
然後再偷偷地把第五局的140桿球卡交出，結果只見到他隨便應付幾句抱歉的
話語便間接承認先前計算成績時候的罪行，而且他還會不斷地拿著自己的成績跟
其他好手相比，(而這位桿弟，不用我們說，當然是深得其老闆的心，不怕下次
得不到主人的惠顧)。
Unfortunately, CE who use variations of these scoring schemes
in real life
tend to become addicted to the games they're playing -- after
all, it's
easier to fiddle with the scorecard than to spend hours on the
practice tee
-- and never muster the will to give them up. Their behavior
brings to
mind Voltaire's comment on sexual experimentation: "Once a
philosopher, twice a
pervert."
不幸的是，這些慣用作弊技倆的總裁在回到現實世界後，還是習慣玩這種把戲，
畢竟與其花費時間在辛苦練習上，還不如輕輕鬆鬆在計分卡上動手腳，要說服他
們放棄不玩可能比登天還難，他們這種行為不禁讓我想到法國文豪伏爾泰
Voltaire對於性實驗的評論：「一回生，二回熟。」(編按伏爾泰頭一次到妓院
去體驗那裡的情境，事後有人問他感覺如何，他回答說，第一次去還算是哲學家，
但要是再去的話，可能便會成為墮落者)。
In the acquisition arena, restructuring habeen raised to an art
form:
Managements now frequently use mergers to dishonestly
rearrange the value of
assets and liabilities in ways that will allow them
to both smooth and
swell future earnings. Indeed, at deal time, major
auditing firms
sometimes point out the possibilities for a little
accounting magic (or
for a lot). Getting this push from the pulpit, first-
class people will
frequently stoop to third-class tactics. CEOs
understandably do not
find it easy to reject auditor-blessed strategies
that lead to increased
future "earnings."
在購併的世界裡，組織重整早已被提升至藝術的層次，經理人現在越來越習慣透
過合併來操控公司資產與負債的價值，以使得公司未來的盈餘能夠平穩地虛增，
事實上，在交易的時候，大型的會計師事務所偶爾也會建議公司來點小小會計戲
法(當然有時也可能會搞的很大)，而在得到領路者的引誘，一流的人格往往會屈
服於三流的伎倆，CEO實在是很難拒絕會計師所提出讓公司未來盈餘好看一點
的美意。
An example from e property-casualty insurance industry will
illuminate
the possibilities. When a p-c company is acquired, the buyer
sometimes
simultaneously increases its loss reserves, often
substantially. This
boost may merely reflect the previous inadequacy of
reserves -- though it
is uncanny how often an actuarial "revelation" of
this kind coincides
with the inking of a deal. In any case, the move sets
up the possibility of
'earnings" flowing into income at some later date,
as reserves are
released.
產物意外險業有一個很好的例子可以作為說明，當一家公司取得另一家產險公司
時，買方通常會順勢大幅補提撥大量的損失準備，這項舉動只會凸顯以前損失準
備提撥不足的問題，雖然你會發現這種精算調整的時機與整個交易簽字的時點是
如此令人驚異的吻合，更重要的是，這樣的舉動等於是為以後損失準備回沖，以
增加公司未來獲利數字所預埋的伏筆。
Berkshire has kept entirely clear of these practices: If we are t
disappoint
you, we would rather it be with our earnings than with our
accounting. In all of
our acquisitions, we have left the loss reserve
figures exactly as we
found them. After all, we have consistently joined
with insurance
managers knowledgeable about their business and
honest in their
financial reporting. When deals occur in which liabilities
are increased
immediately and substantially, simple logic says that at
least one of those
virtues must have been lacking -- or, alternatively,
that the acquirer is
laying the groundwork for future infusions of
"earnings."
不過Berkshire從來都不會幹這類的勾當，如果我們真要讓你們失望，那麼決定
會是真實的獲利情況而不是會計手法，在我們所有的購併案當中，我們皆讓損失
準備的數字保持在當初我們發覺時的水準，因為一直以來與我們共事的保險事業
經理人都很了解自己本業的狀況，同時在財務報表的編製上也都坦誠佈公，所以
要是在這些購併案進行的同時，還發生負債大幅增加的狀況的話，那麼就代表這
些美德其中之一出現了問題，或者說購併者為虛增未來盈餘預留的後路。
Here's a true story that illustrates an all-too-common view i
corporate
America. The CEOs of two large banks, one of them a man
who'd made many
acquisitions, were involved not long ago in a friendly
merger discussion
(which in the end didn't produce a deal). The veteran
acquirer was
expounding on the merits of the possible combination,
only to be skeptically
interrupted by the other CEO: "But won't that mean
a huge charge," he
asked, "perhaps as much as $1 billion?" The
"sophisticate" wasted
no words: "We'll make it bigger than that -- that's
why we're doing the
deal."
這裏有一件真實的故事充分說明美國企業普遍存在的一種觀點，有兩家大型銀行
的CEO，其中有一位主導了很多購併案，在不久前參與了一項友善購併的討論(雖
然後來並沒有成功)，正當這位經驗豐富的購併老手侃侃而談合併後可能的種種
好處時，突然被另一位CEO的問題給打斷：「那不是要耗費相當高的成本嗎? 我
想可能不下十億美元吧!」這位老練的銀行家毫不遲疑的回答到：「這正是我們
要搞這個案子的原因，而且我們可以把它搞的更大。」
A preliminary tally by R. G. Associes, of Baltimore, of special
charges taken
or announced during 1998 -- that is, charges for
restructuring,
in-process R&D, merger-related items, and write-downs
-- identified no less
than 1,369 of these, totaling $72.1 billion. That is a
staggering amount as
evidenced by this bit of perspective: The 1997
earnings of the 500
companies in Fortune's famous list totaled $324
billion.
根據巴爾的摩R.G.協會初步的統計，光是1998年宣佈或認列的特別開支，也
就是包含組織重整開支、R&D、購併費用以及相關科目打銷等1,369種各項名
義，加總的金額就超過721億美元，相較之下1997年財星500大企業的總獲
利也不過是3,240億美元而已。
Clearly the attitude of disrespect that many executives hav
today for
accurate reporting is a business disgrace. And auditors, as we
have already
suggested, have done little on the positive side. Though
auditors
should regard the investing public as their client, they tend to
kowtow instead to the managers who choose them and
dole out their
pay. ("Whose bread I eat, his song I sing.")
很顯然的，現今許多經理人對於編製正確報表的藐視態度可說是商業界的一大恥
辱，而另一方面如我們先前所提到的，會計師卻未能夠導正這樣的偏差，儘管理
論上會計師應該要把投資大眾當作是他們的老闆，但他們卻寧可向那些有權決定
會計師人選的經理人彎腰磕頭以求分一杯羹，(唉!
正所謂拿人手短)。
A big piece of news, however, is that the SEC, led by its chairman
Arthur
Levitt, seems determined to get corporate America to clean up its
act. In a
landmark speech last September, Levitt called for an end to
"earnings
management." He correctly observed, "Too many corporate
managers, auditors and
analysts are participants in a game of nods and
winks." And then he
laid on a real indictment: "Managing may be giving
way to manipulating;
integrity may be losing out to illusion."
不過告訴各位一個大消息，在現任主席Arthur Levitt的帶領下，主管機關證管
會似乎有意要好好地整頓美國企業的種種不當行為，在去年九月的一次歷史性演
說中，Levitt呼籲大家停止"盈餘管理"，他一針見血地指出太多的企業經理人、
會計師與分析師參與這種大家心知肚明的戲局，接著他又開門見山地提出一項指
控，當經理人得到太多的機會來操縱盈餘的同時，其人格也隨著消失殆盡化成幻
影。
I urge you to read the Chairman's speech (you can fd it on the
Internet at
www.sec.gov) and to support him in his efforts to get
corporate America to
deliver a straight story to its owners. Levitt's job
will be Herculean, but
it is hard to think of another more important for
him to take on.
我強烈建議大家讀一讀Levitt主席的演說內容(你可以在證管會的官方網站
www.sec.gov上找到)，同時共同聲援他致力於導正美國企業向股東們提供真實
財務報告所作的努力，Levitt這項工作或許相當艱鉅，但也很難再找到其他任何
比這個更重要的任務了。
Reports to Shareholders
給股東的報告
Berkshire's Internet site, www.berkshirehathaway.com, ha
become a prime source
for information about the company. While we
continue to send an
annual report to all shareholders, we now send
quarterlies only to
those who request them, letting others read these at
our site. In this
report, we again enclose a card that can be returned by
those wanting to get
printed quarterlies in 1999.
Berkshire的官方網站www.berkshirehathaway.com成為取得本公司資訊的
最重要來源，除非事先要求，否則我們每季的季報都只透過網站對外公佈，當然
我們還是一如往來將每年的年報郵寄給股東們，裡頭也包含了申請寄發1999年
季報的申請表格。
Charlie and I have two simple goals in reporting: 1) We want t
give you the
information that we would wish you to give us if our
positions were
reversed; and 2) We want to make Berkshire's
information accessible
to all of you simultaneously. Our ability to reach
that second goal is
greatly helped by the Internet.
在編寫報告時，查理跟我稟持兩個簡單的原則：1)我們希望能夠提供各位所有換
個立場我們希望各位能夠提供給我們的所有資訊；2)我們希望這些資訊能夠在同
一個時間到達所有人的手上，而透過網路使得我們第二個目標得以更容易地達
成。
In another portion of his September speech, Arthur Levit
deplored what he
called "selective disclosure." His remarks were timely:
Today, many companies
matter-of-factly favor Wall Street analysts and
institutional
investors in a variety of ways that often skirt or cross the
line of
unfairness. These practices leave the great bulk of shareholders
at a distinct
disadvantage to a favored class.
在演說的另一段內容中，Levitt主席對於他稱之為"選擇性揭露"的行為感到遺
憾，他的這項評論正中時弊，如今許多公司明顯偏袒華爾街的分析師與機構投資
人，其種種行徑早已踰越公平合理的界限，這種行為讓其他廣大的股東與投資大
眾處於不利前者的劣勢地位。
At Berkshire, we regard the holder of one share of B stock as th
equal of our
large institutional investors. We, of course, warmly
welcome institutions
as owners and have gained a number of them
through the General Re
merger. We hope also that these new holders
find that our owner's
manual and annual reports offer them more
insights and
information about Berkshire than they garner about other
companies from the
investor relations departments that these
corporations typically
maintain. But if it is "earnings guidance" or the
like that shareholders
or analysts seek, we will simply guide them to our
public documents.
在Berkshire即使是持有一股B股的小股東其所得到的待遇，也與其他大型投資
機構投資人並無二致，當然我們也很歡迎大型的投資機構法人成為我們的股東，
事實上經由通用再保的購併，確實也帶進許多投資機構法人，同時我們也希望這
些新加入的股東能夠發現由我們所提供的股東手冊與公司年報，較之其他公司一
般公關部門所提供的訊息更為有用，給他們更多的啟發，不過要是股東或分析師
想要的是公司的盈餘預估，那麼我們就只能請他們直接參考我們已對外公佈的公
開文件。
This year we plan tpost our quarterly reports on the Internet
after the
close of the market on May 14, August 13, and November 12.
We also expect to put
the 1999 annual report on our website on
Saturday, March 11,
2000, and to mail the print version at roughly the
same time.
今年我們預計分別在5/14、8/13及11/12將季報公佈在公司的網站上，另外
也預計在2000年3月11日星期六將年報公佈在網站上，並在同一時間將年報
郵寄出去給所有的股東。
We promptly post press releases on our website. This means tha
you do not
need to rely on the versions of these reported by the media
but can
instead read the full text on your computer.
同時我們也會立即將相關的新聞公佈在我們的網站上，也就是說你不需要依賴經
過報章媒體消化過的二手消息，而可以輕輕鬆鬆在家透過電腦直接讀到最原始的
內容。
Despite the pathetic technical skills of your Chairman, I'
delighted to report
that GEICO, Borsheim's, See's, and The Buffalo News
are now doing
substantial business via the Internet. We've also recently
begun to offer annuity
products on our website. This business was
developed by Ajit
Jain, who over the last decade has personally
accounted for a
significant portion of Berkshire's operating earnings.
While Charlie and I
sleep, Ajit keeps thinking of new ways to add value to
Berkshire.
雖然本人的電腦技能相當的低落，但是我還是很高興地向各位報告，我們旗下的
事業，包含GEICO、波仙珠寶、喜斯糖果以及水牛城新聞在內現在皆已透過網
路從事大量的商務活動，同時我們也開始在網站上販賣相關的年金產品，這項業
務主要是由Ajit Jain所負責開發，他個人在過去十年來為Berkshire貢獻了大
量的盈餘，每當查理跟我休息時，Ajit還是無時無刻不在為Berkshire想出增進
價值的方法。
Shareholder-Designated Contributions
股東指定捐贈計劃
About 97.5% of all eligible shares participated in Berkshire'
1998
shareholder-designated contributions program, with
contributions totaling
$16.9 million. A full description of the program
appears on pages
54-55.
大約有97.5%的有效股權參與1998年的股東指定捐贈計劃，捐出的款項總計
約1,690萬美元，詳細的名單參閱附錄。
Cumulatively, over the 18 years of the program, Berkshire ha
made
contributions of $130 million pursuant to the instructions of our
shareholders.
The rest of Berkshire's giving is done by our subsidiaries,
which stick
to the philanthropic patterns that prevailed before they were
acquired
(except that their former owners themselves take on the
responsibility for
their personal charities). In aggregate, our
subsidiaries made
contributions of $12.5 million in 1998, including
in-kind donations of
$2.0 million.
累計過去18年以來，Berkshire總計已依照股東意願捐贈出高達1.3億美元的
款項，除了之外，Berkshire還透過旗下的子公司進行捐贈，而這些慈善活動都
是早在他們被我們購併以前就行之有年的(先前的老闆自行本身負責的個人捐贈
計畫之外除外)，總的來說，我們旗下的關係企業在1998年總計捐出1,250萬
美元，其中包含200萬美元等值的物品。
To participate in future programs, you must own Class A share
that are
registered in the name of the actual owner, not the nominee
name of a
broker, bank or depository. Shares not so registered on
August 31, 1999, will
be ineligible for the 1999 program. When you get
the contributions form
from us, return it promptly so that it does not
get put aside or
forgotten. Designations received after the due date will
not be honored.
想要參加這項計畫者，必須擁有A級普通股，同時確定您的股份是登記在自己
而非股票經紀人或保管銀行的名下，同時必須在1999年8月31日之前完成登
記，才有權利參與1999年的捐贈計畫，當你收到表格後，請立即填寫後寄回，
以免被丟在一旁給忘記了，逾期恕不受理。
The Annual Meeting
年度股東大會
This year's Woodstock for Capitalists will be held May 1-3, an
we may face a
problem. Last year more than 10,000 people attended
our annual meeting,
and our shareholders list has since doubled. So we
don't quite know what
attendance to expect this year. To be safe, we
have booked both
Aksarben Coliseum, which holds about 14,000 and
the Holiday Convention
Centre, which can seat an additional 5,000.
Because we know that
our Omaha shareholders will want to be good
hosts to the
out-of-towners (many of them come from outside the U.S),
we plan to give those
visitors first crack at the Aksarben tickets and to
subsequently allocate
these to greater Omaha residents on a first-
come, first-served
basis. If we exhaust the Aksarben tickets, we will
begin distributing
Holiday tickets to Omaha shareholders.
今年Berkshire的伍斯達克將在五月1號到3號舉行，只是我們面臨到一個問
題，去年總計有超過一萬名的股東來參加我們的年度股東會，而如今我們股東的
人數又增加了一倍，這使得我們很難預估今年到底會有多少股東與會，為了安全
起見，我們特別訂下可容納14,000名觀眾的阿肯薩本體育館，另外外加5,000
個座位的Holiday會議中心，而奧瑪哈地區的股東們為了盡地主之誼，也特地
將場地的前排座位讓給外城市來的股東(很多都來自海外)，至於大奧瑪哈地區的
股東則採取先到先選的方式入座，如果阿肯薩本體育館的門票發光了，就會開始
發放Holiday會議中心的門票給奧瑪哈地區的股東。
If we end up using both locations, Charlie and I will split ou
pre-meeting
time between the two. Additionally, we will have exhibits
and also the Berkshire
movie, large television screens and microphones
at both sites. When we
break for lunch, many attendees will leave
Aksarben, which means
that those at Holiday can, if they wish, make the
five-minute trip to
Aksarben and finish out the day there. Buses will be
available to transport
people who don't have cars.
而萬一要是兩個場地還不夠，查理跟我就會將正式會議前的時間分成兩部份，此
外，在兩個會場我們都準備了展示品、Berkshire特別製作的影片、大型的電視
螢幕以及麥克風，等到中午休息時間，許多與會者陸續離開阿肯薩本體育館後，
此時坐在Holiday會議中心的股東就可以利用簡短的五分鐘時間參觀一下會
場，然後一直待到會議結束，會後我們也備有巴士接送沒有開車的股東。
The doors will open at both locations at 7 a.m. on Monday, andt
8:30 we will
premier the 1999 Berkshire movie epic, produced by Marc
Hamburg, our CFO. The
meeting will last from 9:30 until 3:30,
interrupted only by
the short lunch break.
大門會在星期一早上七點開放，同時照例在八點半會播放由我們財務長Marc
Hamburg精心製作具頂級水準的Berkshire 1999年電影短片供大家欣賞，扣
除中午短暫的休息時間，整個會議將一直進行到下午三點半。
An attachment to the proxy material that is enclosed with thi
report
explains how you can obtain the badge you will need for
admission to the
meeting and other events. As for plane, hotel and car
reservations, we have
again signed up American Express (800-799-
6634) to give you
special help. In our normal fashion, we will run buses
from the larger hotels
to the meeting. After the meeting, these will make
trips back to the
hotels and to Nebraska Furniture Mart, Borsheim's and
the airport. Even so,
you are likely to find a car useful.
後面附有股東會開會投票的相關資料，跟各位解釋如何拿到入場所許的識別證，
由於預期會有相當多的人與會，我們建議大家最好先預訂機位與住宿，美國運通
(電話800-799-6634)將會很高興為您提供相關安排服務，如同以往，我們會
安排巴士接送大家往返各大旅館與會場之間，並在會後接送大家到內布拉斯加傢
具店與波仙珠寶店或是到飯店與機場，當然你可能會覺得如何有一輛車就更方便
了。
The full line of Berkshire products will be available atksarben,
and the more
popular items will also be at Holiday. Last year we set
sales records
across-the-board, moving 3,700 pounds of See's candy,
1,635 pairs of Dexter
shoes, 1,150 sets of Quikut knives and 3,104
Berkshire shirts and
hats. Additionally, $26,944 of World Book products
were purchased as well
as more than 2,000 golf balls with the Berkshire
Hathaway logo. Charlie
and I are pleased but not satisfied with these
numbers and
confidently predict new records in all categories this year.
Our 1999
apparel line will be unveiled at the meeting, so please defer
your designer
purchases until you view our collection.
在阿肯薩本體育館的會場我們也將備有Berkshire全系列的產品供大家選購，另
外我們也會把其中最熱門的商品陳列在Holiday會議中心，去年我們再度打破
記錄，大家總共搬走了3,700磅的糖果、1,635雙的鞋子、1,150組Quikut
小刀以及3,140件Berkshire的衣服與帽子，另外也賣出26,944美元的世界
百科全書與相關出版品以及2,000顆上面印有Berkshire Logo的高爾夫球，老
實說，查理跟我對於這樣的成績並不太滿意，不過我們相當有信心今年一定能夠
再度刷新所有品項的記錄，而我們1999年全新的服裝也將在會議期間公佈，所
以請大家在看過我們的樣式之前，暫且將今年的治裝費保留住。
Dairy Queen will also be on hand and will again donate al
proceeds to the
Children's Miracle Network. Last year we sold about
4,000
Dilly® bars, fudge bars and vanilla/orange bars. Additionally,
GEICO will have a booth that will be manned by a
number of our top
counselors from around the country, all of them ready
to supply you
with auto insurance quotes. In almost all cases,
GEICO will be able to
offer you a special shareholder's discount. Check out
whether we can
save you some money.
乳品皇后也將再度在現場擺設攤位，同時將所得全數捐給兒童希望聯盟，去年我
們總共賣出4,000根Dilly、雪花棒以及香草/橘子口味的巧克力棒，此外GEICO
公司會再度派出各地區最優秀的業務員，在會場設立攤位，隨時提供股東們汽車
保單的報價，在大多數的情況下，GEICO都可以提供給你一個相當優惠的股東
折扣，各位記得問看看是否能幫自己省下一筆錢。
Thpiece de resistance of our one-company trade show will be a
79-foot-long, nearly 12-foot-wide, fully-outfitted
cabin of a 737
Boeing Business Jet ("BBJ"), which is NetJets' newest
product. This plane
has a 14-hour range; is designed to carry 19
passengers; and offers a
bedroom, an office, and two showers. Deliveries to
fractional owners
will begin in the first quarter of 2000.
這次的會議還有另一位主秀，那就是79英尺長、12英尺寬、全配備的波音737
商務機展示座艙(簡稱BBJ)，這是Netjet最新推出的產品，這架飛機飛行時數長
達14個小時，可搭載19位乘客，並附有一個臥室、一間辦公室以及兩套淋浴
設備，預計在2000年春季加入服務客戶的行列。
The BBJ will be available for your inspection on May 1-3 near th
entrance to
the Aksarben hall. You should be able to minimize your wait
by making
your visit on Saturday or Sunday. Bring along your checkbook
in case you
decide to make an impulse purchase.
BBJ在五月1日到3日期間，將會陳列在阿肯薩本體育館的大廳入口處，不想排
隊的人最好提早在星期六或星期日去參觀，記得隨身攜帶你的支票本，以備一時
心動的不時之需。
NFM's mti-stored complex, located on a 75-acre site about a
mile from
Aksarben, is open from 10 a.m. to 9 p.m. on weekdays, and
10 a.m. to 6 p.m. on
Saturdays and Sundays. This operation did $300
million in business
during 1998 and offers an unrivaled breadth of
merchandise --
furniture, electronics, appliances, carpets and
computers -- all at
can't-be-beat prices. During the April 30th to May
4th period,
shareholders presenting their meeting badge will receive a
discount that is
customarily given only to its employees.
佔地75英畝的NFM多層複合式建築距離阿肯薩本體育館約1英哩遠，營業時
間平日從早上10點到下午9點，星期六及星期日則從早上10點到下午6點，
NFM 1998年單店的營業額高達三億美元，提供各式各樣的產品，舉凡傢具、
電子產品、小家電、地毯以及電腦，全部都以超低的價格供大家選購，在四月
30日到五月4日期間，股東只要持隨股東開會通知單附贈的優惠券到NFM購
買各類商品，都可獲得員工價的優惠。
Borsheim's normally is closedn Sunday but will be open for
shareholders
from 10 a.m. to 6 p.m. on May 2nd. On annual meeting
weekend last year, the
store did an incredible amount of business. Sales
were double those of
the previous year, and the store's volume on
Sunday greatly
exceeded volume for any day in Borsheim's history.
Charlie attributes
this record to the fact that he autographed sales
tickets that day and,
while I have my doubts about this proposition, we
are not about to mess
with a winning formula. Please give him writer's
cramp. On last year's
Sunday, Borsheim's wrote 2,501 tickets during the
eight hours it was
open. For those of you who are mathematically
challenged, that is
one ticket every 11 seconds.
平時禮拜天不營業的波仙珠寶，特地在五月二日股東會當天會為股東與來賓開
放，從中午開到下午6點，去年在股東會的那一個週末，我們締造了歷史最佳
的記錄，業績比前一個年度成長一倍，星期天的單日銷售額打破歷史記錄，查理
臭屁的認為這完全要歸功於當天他在現場接受大家用發票索取簽名的緣故，當然
我對於這樣的推論持保留態度，我不認為這是成功方程式中的重要因子，在去年
星期天短短8個小時的營業時間內，波仙總共開出了2,501張的發票，數學好
的人可以掐指一算，這約等於每11秒鐘開出一張發票，不過請大家千萬不要對
查理客氣，務必讓他簽名簽到手抽筋。
Shareholders who wish to avoid Sday's crowd can visit
Borsheim's on Saturday
(10 a.m.-5:30 p.m.) or on Monday (10 a.m.-8
p.m.). Be sure to
identify yourself as a Berkshire owner so that Susan
Jacques, Borsheim's
CEO, can quote you a "shareholder-weekend" price.
Susan joined us in
1983 as a $4-per-hour salesperson and was made
CEO in 1994. This move
ranks as one of my best managerial decisions.
怕擠的股東可以選擇在星期六(早上10點到下午5點半)或星期一(早上10點到
下午8點)光臨波仙珠寶，記得向波仙的總裁-Susan Jacques 表明你Berkshire
股東的身分，如此她才能夠給各位股東週末的優惠價，Susan在1983年從每
小時時薪4美元的業務員做起，並在1994年成為公司的總裁，這項人事調整
事後證明是我一生中最佳的管理決策之一。
Bridge players can look forward to a thrill on Sunday, when Bo
Hamman -- the
best the game has ever seen -- will turn up to play with
our shareholders in
the mall outside of Borsheim's. Bob plays without
sorting his cards --
hey, maybe that's what's wrong with my game. We
will also have a
couple of other tables at which another expert or two
will be playing.
橋牌愛好者請屏息以待，橋牌界的傳奇性人物Bob Hamman將會在星期天下午
出席在波仙珠寶店外面大廳舉辦的一場橋牌大賽，Bob打牌從來不用整理排堆，
嘿嘿!或許這就是我為什麼一直打不好的原因，當然現場還會有其他高手出現與
大家一起打牌。
Gorat's -- my favorite steakhouse -- will again be ope
especially for
Berkshire shareholders on the Sunday night before the
meeting. Though
Gorat's served from 4 p.m. until about 1 a.m. last year,
its crew was swamped,
and some of our shareholders had an
uncomfortable wait.
This year fewer reservations will be accepted, and
we ask that you don't
come on Sunday without a reservation. In other
years, many of our
shareholders have chosen to visit Gorat's on Friday,
Saturday or Monday.
You can make reservations beginning on April 1
(but not
before) by calling 402-551-3733. The cognoscenti will
continue to
order rare T-bones with double orders of hash browns.
我個人最愛的牛排館-Gorat's為了Berkshire股東年會破例在星期天開門營
業，雖然去年Gorat's牛排館從下午四點開始營業，一直到半夜一點半，但是餐
廳還是被擁擠的人群給擠爆了，以致於讓許多股東等候多時，今年我們將減少訂
位人數，事先沒有訂位的人請勿前往以免向隅，當然股東也可選擇在星期五、星
期六或星期一前往，該餐廳從四月一號後才開始接受預訂(電話402-551-
3733)，識途的老馬都知道要點丁骨\牛排加上雙份的牛肉丸。
The Omaha Golden Spikes (nee the Omaha Royals) will meet the
Iowa Cubs on
Saturday evening, May 1st, at Rosenblatt Stadium. Your
Chairman, whose
breaking ball had the crowd buzzing last year, will
again take the mound.
This year I plan to introduce my "flutterball." It's a
real source of
irritation to me that many view our annual meeting as a
financial event rather
than the sports classic I consider it to be. Once the
world sees my
flutterball, that misperception will be erased.
奧瑪哈金釘鞋隊(原奧瑪哈皇家隊)將於五月一日星期六晚上在Rosenblatt體育
館對上愛荷華州的小熊隊，去年本人技驚四座的變化球，將會再度出現在投手丘
上，不過今年我還預計祭出新練的上飄球，對於許多人將Berkshire股東會視為
投資金融界而非體育界的盛事，我感到相當的氣憤，相信等到世人看過我的上飄
球後，應該就能導正大家這種錯誤的觀念。
Our proxy statement includes instructions about obtainin
tickets to the game
and also a large quantity of other information that
should help you to
enjoy your visit. I particularly urge the 60,000
shareholders that we
gained through the Gen Re merger to join us.
Come and meet your
fellow capitalists.
股東會資料將告訴大家如何取得球賽入場的門票，以及有關本次會議期間大量的
旅遊資訊，在此我也特別呼籲經由購併通用再保而新加入的60,000名股東，一
定要來見見其他資本主義的夥伴。
* * * * * * * * * * * *
It wouldn't be right to close without a word about the 11.8 peopl
who work with
me in Berkshire's corporate office. In addition to
handling the myriad of
tax, regulatory and administrative matters that
come with owning
dozens of businesses, this group efficiently and
cheerfully manages
various special projects, some of which generate
hundreds of inquiries.
Here's a sample of what went on in 1998:
在年報結束前，我一定要再感謝一下在Berkshire企業總部與我一起共事的11.8
位工作夥伴，除了平時要處理因為擁有數十家營利事業所衍生複雜難解的租稅、
法令與行政事務之外，這個團隊同時還非常有效率且熱心地管理許多特別的專
案，包含了上千次的不厭其煩的回答，以下就是他們在1998年所做的一些工
作。
You and I are paying for only 11.8 people, but we are gettin
what would at
most places be the output of 100. To all of the 11.8, my
thanks.
雖然我們只支付11.8人份的薪水，但我們所得到的成果卻相當於100位人力的
付出，對於這支11.8個人的團隊，我衷心地致上個人的感謝之意。
|
March 1, 1999 |
Warren E. Buffett |
華倫．巴菲特
董事會主席
1999年3月1日