这场经典的赛事，甚至还用慢动作播放精彩的第四节，我们以今年封面的颜色表 .33
Fields once said, "It was a woman who drove me to drink, but
unfortunately I never had the chance to thank her." I don't want to make
that mistake. My thanks go to Louie, Ron and Irv Blumkin for getting me
started in the furniture business and for unerringly guiding me as we
have assembled the group we now have.
世上没有一家家具业的经营能够像Berkshire一样，这是我个人的乐趣，也是各
位获利的关键所在，W.C. Fields曾经说过：「是女人让我沈于酒国，可惜我从
来没有机会得以好好地谢谢她」，我不想犯下相同的错误，在此我要感谢Louie、
Ron、Irv等人，是他们让我得以与家具业结缘，而且毫无犹疑地引导我组成现
今的梦幻组合。
* * * * * * * * * * * *
Now, for our second acquisition deal: It came to us through my good
friend, Walter Scott, Jr., chairman of Level 3 Communications and a
director of Berkshire. Walter has many other business connections as
well, and one of them is with MidAmerican Energy, a utility company in
which he has substantial holdings and on whose board he sits. At a
conference in California that we both attended last September, Walter
casually asked me whether Berkshire might be interested in making a
large investment in MidAmerican, and from the start the idea of being in
partnership with Walter struck me as a good one. Upon returning to
Omaha, I read some of MidAmerican's public reports and had two short
meetings with Walter and David Sokol, MidAmerican's talented and
entrepreneurial CEO. I then said that, at an appropriate price, we would
indeed like to make a deal.
接下去要报告的是第二个购并案，这件案子系透过我多年的好朋友，Level 3 通
讯公司董事长，同时也是Berkshire董事-Walter Scott牵线而成，Walter个人
也拥有相当多的人脉，其中他在一家能源事业-中美能源公司拥有相当多的股
份，同时也担任该公司的董事，去年九月我们共同出席一场在加州举行的研讨
会，Walter不经意地问我是否有兴趣投资中美能源公司，在当时我就直觉地认
为这应该是一个很好的主意，回到奥玛哈之后，我看了一下中美能源的相关资
料，并与Walter及中美能源才能兼具的总裁David Sokol短暂地见了两次面，
当场我就表示，只要价位合适，我想成交的可能性很高。
Acquisitions in the electric utility industry are complicated by a variety
of regulations including the Public Utility Holding Company Act of 1935.
Therefore, we had to structure a transaction that would avoid Berkshire
gaining voting control. Instead we are purchasing an 11% fixed-income
security, along with a combination of common stock and exchangeable
preferred that will give Berkshire just under 10% of the voting power of
MidAmerican but about 76% of the equity interest. All told, our
investment will be about $2 billion.
购并电力能源事业由于牵涉到包含1935年订定的公用事业控股公司法在内的
各种行政法规而显得有些复杂，因此我们必须设计一个交易，以避免Berkshire
取得多数的控制权，最后决定由我们出资购买11%固定收益的证券，加上部份
普通股与可转换特别股的特殊组合，把Berkshire对中美能源的表决权压在10%
以下，同时又能持有该公司76%的权益，总计全部加起来的投资金额超过20亿
美元。
Walter characteristically backed up his convictions with real money: He
and his family will buy more MidAmerican stock for cash when the
transaction closes, bringing their total investment to about $280
million. Walter will also be the controlling shareholder of the company,
and I can't think of a better person to hold that post.
而Walter也以具体的行动来支持这项合并案，他与他的家人同样投入了大笔的
资金买进更多的中美能源股份，累计投资的金额超过2.8亿美元，这使得他成为
拥有该公司控制权的大股东，我想再也找不到比他更适合这个职位的人了。
Though there are many regulatory constraints in the utility industry, it's
possible that we will make additional commitments in the field. If we do,
the amounts involved could be large.
虽然在能源事业有许多法规的限制，但我们极有可能在这个产业投入更多的资
金，如果真的实行，这个数字铁定十分可观。
Acquisition Accounting
购并案的会计处理
Once again, I would like to make some comments about accounting, in
this case about its application to acquisitions. This is currently a very
contentious topic and, before the dust settles, Congress may even
intervene (a truly terrible idea).
再一次，我要对会计原则发表一些看法，这次是有关购并案的会计应用，到目前
为止，这也是一项争议性相当高的议题，在所有事件尘埃落定以前，甚至连国会
议员都有可能会介入干涉(这听起来令人感到不寒而栗)。
When a company is acquired, generally accepted accounting principles
("GAAP") currently condone two very different ways of recording the
transaction: "purchase" and "pooling." In a pooling, stock must be the
currency; in a purchase, payment can be made in either cash or stock.
Whatever the currency, managements usually detest purchase
accounting because it almost always requires that a "goodwill" account
be established and subsequently written off -- a process that saddles
earnings with a large annual charge that normally persists for decades.
In contrast, pooling avoids a goodwill account, which is why
managements love it.
当一家公司被购并，通常一般公认会计原则(GAAP)容许两种截然不同的会计处
理方法：一种是购买法；另一种是权益合并法，要运用权益合并法，交易的标的
必须是股票，至于购买法则使用现金或股票皆可，但不论如何，管理阶层通常很
排斥使用购买法，因为在大多数的情况下，公司的会计帐上会因此多出一项叫做
"商誉"的会计科目，而此商誉日后还要分年摊销，意思是说在合并完成后，公司
每年都要提列一笔为数庞大的商誉摊销费用列为损益数字的减项，而且时间可能
长达数十年，相对地，权益合并法就没有这样的麻烦，可想而知这种方法广受一
般高阶经理人的欢迎。
Now, the Financial Accounting Standards Board ("FASB") has proposed
an end to pooling, and many CEOs are girding for battle. It will be an
important fight, so we'll venture some opinions. To begin with, we agree
with the many managers who argue that goodwill amortization charges
are usually spurious. You'll find my thinking about this in the appendix
to our 1983 annual report, which is available on our website, and in the
Owner's Manual on pages 55 - 62.
如今财务会计准则委员会(FASB)有意取消权益合并法之运用，此举让许多高阶经
理人为之跳脚而群起反对，可以预见双方将会有一场激烈的纷争，为此我们必须
站出来发表个人的意见，首先我们同意许多经理人认为商誉摊销根本就不切实际
的说法，大家可以在1983年年报的附录(已公布于本公司网站)以及股东手册
55-62页，找到我个人对这件事的看法。
For accounting rules to mandate amortization that will, in the usual
case, conflict with reality is deeply troublesome: Most accounting
charges relate to what's going on, even if they don't precisely measure
it. As an example, depreciation charges can't with precision calibrate the
decline in value that physical assets suffer, but these charges do at least
describe something that is truly occurring: Physical assets invariably
deteriorate. Correspondingly, obsolescence charges for inventories,
bad debt charges for receivables and accruals for warranties are among
the charges that reflect true costs. The annual charges for these
expenses can't be exactly measured, but the necessity for estimating
them is obvious.
对于强制规定摊销的会计原则，通常导致与现实严重不符，从而引发相当麻烦的
问题，因为大部分的会计原则虽然无法准确地反应出实际状况，但最起码差异不
大，举个例子来说，折旧费用的提列虽然无法完全地反映出实体资产价值减损的
真实情况，但这种做法至少与现实发展的方向相一致，实体资产本来就必然会逐
渐减损，同样的存货提列跌价损失、应收帐款提列呆帐费用以及保固责任提列准
备都是反映潜在成本的合理做法，虽然这些费用成本难以准确的计算出来，但确
实也有加以估计的必要。
In contrast, economic goodwill does not, in many cases, diminish.
Indeed, in a great many instances -- perhaps most -- it actually grows
in value over time. In character, economic goodwill is much like land:
The value of both assets is sure to fluctuate, but the direction in which
value is going to go is in no way ordained. At See's, for example,
economic goodwill has grown, in an irregular but very substantial
manner, for 78 years. And, if we run the business right, growth of that
kind will probably continue for at least another 78 years.
但相对的，经济商誉在许多情况下，并不会减损或消失，事实上在大部分的案例
中，商誉不但不减反而会随着时间的累积而增加，在某些特质上，经济商誉反而
类似土地，两者的价值都会上下波动，但何时会增加，何时又会减少却不一定，
以喜斯糖果的例子来说，在过去的78年来，其品牌价值以不规则但快速的速度
成长，而只要我们经营得当，其品牌价值增长的态势很有可能再继续维持78年。
To escape from the fiction of goodwill charges, managers embrace the
fiction of pooling. This accounting convention is grounded in the poetic
notion that when two rivers merge their streams become
indistinguishable. Under this concept, a company that has been merged
into a larger enterprise has not been "purchased" (even though it will
often have received a large "sell-out" premium). Consequently, no
goodwill is created, and those pesky subsequent charges to earnings
are eliminated. Instead, the accounting for the ongoing entity is handled
as if the businesses had forever been one unit.
为了避免商誉不当的摊销，伟大的经理人们宁愿选择拥抱不当的权益合并法，这
项会计创意源自于两条河川在汇流后就不必分彼此的概念，在这种观念下，一家
被另一家更大公司购并的公司并不算是被"买下"的(虽然他们通常会得到相当的
合并溢价)，从而推论合并的过程并没有商誉会产生，自然而然也就没有随后令
人感到麻烦的商誉摊销发生，反而应该要把这两家公司当作一开始就是一体的来
看待。
So much for poetry. The reality of merging is usually far different: There
is indisputably an acquirer and an acquiree, and the latter has been
"purchased," no matter how the deal has been structured. If you think
otherwise, just ask employees severed from their jobs which company
was the conqueror and which was the conquered. You will find no
confusion. So on this point the FASB is correct: In most mergers, a
purchase has been made. Yes, there are some true "mergers of equals,"
but they are few and far between.
有点咬文嚼字，事实上这与合并背后所代表的事实真相却大不相同，毫无疑问
的，既然有交易，就一定有购并方与被购并方，不管你如何修饰交易的条件细节，
一定有一方是被另一方买下，其实很简单，只要你问问交易双方的员工，谁是征
服者，而谁又是被征服者，就知道是怎么一回事了，绝对不会搞混，所以从这个
角度来看，FASB的坚持绝对是正确的，在大部分的购并案中，绝对有买卖的性
质存在，当然确实也有对等的合并个案发生，但出现的机率实在是少之又少。
Charlie and I believe there's a reality-based approach that should both
satisfy the FASB, which correctly wishes to record a purchase, and meet
the objections of managements to nonsensical charges for diminution
of goodwill. We would first have the acquiring company record its
purchase price -- whether paid in stock or cash -- at fair value. In most
cases, this procedure would create a large asset representing economic
goodwill. We would then leave this asset on the books, not requiring its
amortization. Later, if the economic goodwill became impaired, as it
sometimes would, it would be written down just as would any other
asset judged to be impaired.
查理跟我始终相信应该有一个与现实相接轨的方法可以同时满足FASB想要正确
的反应买卖交易实质的看法，以及经理人反对商誉不当摊销的呼声，我认为首先
购并公司应该要以公平市价认列其投资成本，不管是支付现金或是股票，当然在
大多数的情况下，公司帐上会出现大笔的经济商誉，但我们应该让这项资产继续
保留在会计帐上，而不是分年摊销，嗣后若公司的经济商誉真得有减损的情况，
这不是没有可能，那么就按一般判断资产价值是否减损的方式去评估。
If our proposed rule were to be adopted, it should be applied
retroactively so that acquisition accounting would be consistent
throughout America -- a far cry from what exists today. One prediction:
If this plan were to take effect, managements would structure
acquisitions more sensibly, deciding whether to use cash or stock based
on the real consequences for their shareholders rather than on the
unreal consequences for their reported earnings.
如果我们提出的方案获得采用，预计将会追溯适用，以使得全美的购并会计处理
原则都一致，而不是像现在一样乱象纷呈，可以预见的是，一旦这项方案开始施
行，经理人一定会更审慎地处理购并案，小心评估到底应该使用现金或是攸关股
东长远利益的股票，而不光只是看合并后的会计帐面损益而已。
* * * * * * * * * * * *
In our purchase of Jordan's, we followed a procedure that will maximize
the cash produced for our shareholders but minimize the earnings we
report to you. Berkshire purchased assets for cash, an approach that on
our tax returns permits us to amortize the resulting goodwill over a
15-year period. Obviously, this tax deduction materially increases the
amount of cash delivered by the business. In contrast, when stock,
rather than assets, is purchased for cash, the resulting writeoffs of
goodwill are not tax-deductible. The economic difference between
these two approaches is substantial.
在买下乔登家具的过程中，我们采用能够让Berkshire股东未来的现金流量极
大，而帐列盈余最小的方式，为此Berkshire决定使用现金买下资产，此举让我
们可以在分十五年摊提商誉费用时得到租税的抵减，而减税的效益，等于是让公
司未来几年的现金流量明显的增加，相较之下，使用股票进行购并就没有这项好
处，一次打销的商誉损失是无法用来抵税的，两者之间的经济实质差异再明显也
不过了。
From the economic standpoint of the acquiring company, the worst deal
of all is a stock-for-stock acquisition. Here, a huge price is often paid
without there being any step-up in the tax basis of either the stock of
the acquiree or its assets. If the acquired entity is subsequently sold, its
owner may owe a large capital gains tax (at a 35% or greater rate), even
though the sale may truly be producing a major economic loss.
从购并者的经济角度来看，最不划算的交易方式就是以股换股的做法，不但租税
上没有任何好处，买方还要付出高额的购并溢价，而若买方之后再把这家公司卖
掉，即使实际上公司承担庞大的经济损失，卖主还是要负担高额的资本利得税(税
率往往高达35%以上)。
We have made some deals at Berkshire that used far-from-optimal tax
structures. These deals occurred because the sellers insisted on a given
structure and because, overall, we still felt the acquisition made sense.
We have never done an inefficiently-structured deal, however, in order
to make our figures look better.
不过在Berkshire我们也曾用过非租税最佳化的方式，主要的原因在于卖方基于
某种原因的坚持，当然基本上我们也认为这样的规划还算合理，但是我们绝对不
会因为要让帐面数字好看而牺牲任何的租税利益。
Sources of Reported Earnings
帐列盈余的来源
The table that follows shows the main sources of Berkshire's 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 page 61, 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.
下表显示Berkshire帐列盈余的主要来源，在这张表中商誉的摊销数与购买法会
计调整数会从个别被投资公司分离出来，单独加总列示，之所以这样做是为了让
旗下各事业的盈余状况，不因我们的投资而有所影响，过去我一再地强调我们认
为这样的表达方式，较之一般公认会计原则要求以个别企业基础做调整，不管是
对投资者或是管理者来说，更有帮助，当然最后损益加总的数字仍然会与经会计
师查核的数字一致。
(in millions)
Berkshire's Share
of Net Earnings
(after taxes and
Pre-Tax Earnings
minority interests)
1999 1998 1999 1998
Operating Earnings:
Insurance Group:
Underwriting -- Reinsurance ....................$(1,440) $(21)$(927)$(14)
Underwriting -- GEICO ..........................24 269 16 175
Underwriting -- Other Primary .................22 17 14 10
Net Investment Income ............................2,482 974 1,764 731
Buffalo News ...........................................55 53 34 32
Finance and Financial Products Businesses125 205 86 133
Flight Services .........................................225 181 (1)132 110 (1)
Home Furnishings ....................................79 (2)72 46 (2)41
International Dairy Queen ........................56 58 35 35
Jewelry ...................................................51 39 31 23
Scott Fetzer (excluding finance operation)147 137 92 85
See's Candies .........................................74 62 46 40
