2012-05-03 09:53阅读:
翻译:刘丽媛 校对:Catherine
To the Stockholders of Berkshire Hathaway Inc.:
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.
Textile Operations
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.
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.
我去年也提到过,KenChace 和他率领的管理层一直在和不利的市场大环境做抗争,当前的形势只会让他们更加努力。目前已经有了一些起色,我们打算扩大通我们强大的销售队伍,推动这一势头的发展。鉴于现在业务组合和规模方面的改善,我们可以预期1972年纺织业会带来更好的收益(虽然不会是大幅的上升)。
Insurance Operations
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.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.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.
既然承保现在在整个行业范围内都变得有利可图,越来越多的公司开始寻找他们不久之前还拒之门外的投保人,某些领域的保费率已被调低。我们将继续把获利当做首要目标,这可能会导致国家保险业今年直接业务量的大幅下跌。Jack Ringwalt和Phil Liesche将继续负责这一领域的工作,他们的工作方式行业内很少有人能比得上。
至于再保险业务,虽然在George Young杰出的才能带领下在短短两年里已经发展到了一定的规模,但是也面临着同样的境况。我们是在1969年末进入再保险行业的,那时保费率刚经历了大幅的上升。去年再保险业获得了丰厚的利润,现在却面临着利率下降以及强大的竞争对手的出现的威胁。
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.
在1970年我们成立了内布拉斯加州意外伤害保险公司,开始开展“本土”保险业务。目前为止,无论是从市场还是承保情况来看,它都发展的不错。因此我们分别又在去年和今年成立了明尼苏达州的Lakeland火险和意外伤害保险公司和联合甲板保险. 每个公司都会致力于某个特定州内的工作,让代理商和被保人同时享受到大企业的能力和小公司可接近性、敏感性的好处。
John Ringwalt从一开始就全权负责这项工作,凭着努力、创新和智慧,他把一个设想很好的转变成了一项业务。“本土”保险公司的规模仍比较小,去年总的保费额才刚过150万美元。预计今年业绩可以翻番。我们也会开发一个更为可靠的基准来评估保险业的业绩。
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.
去年的成就之一是收购了位于芝加哥的家庭及汽车保险公司。该公司由Victor Raab创立,从小量的初始投资发展到库克郡主要的汽车保险公司,去年的保费总额高达750万美元。Victor跟Jack Ringwalt 和Gene Abegg一样,都具有对事业的热情,以及盈利的天分。这三位都是白手起家,即使是在卖掉对公司的所有权之后,仍然享有身为业主的利益和骄傲。
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.
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.
Banking Operations
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�ter 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.
我们的子公司伊利诺斯国家银行,不管在存款额还是在盈利方面都处于行业领先地位。去年,该公司在存款业务上税后平均盈利超过2%,并且还同时做到了以下几点:除了个别情况利用准备金平衡交易外没有利用借入资金;流动资金头寸远远高于市场平均水平;不良贷款远低于市场水平;利用一半以上的定期存款账户和所有的消费者储蓄账户,全年利率达到所允许的最高值。这反映出了Gene Abegg and Bob Kline杰出的管理才能。
Interest rates received on loans and investments were down substantiallythroughout 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.
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.
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.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.
Warren E.Buffett
Chairman of the Board
March 13,1972