fade: At the Harvard Business School last year, a student asked
me when I planned to retire and I replied, "About five to ten
years after I die."
以我们现有的梦幻明星级的经营团队阵容来说，Berkshire的表现绝不会因为查
理或是我偶尔跷班而有所影响，大家必须知道，我在所罗门的名衔只是暂时的，
Berkshire才是我的最爱，而且是至死不渝的爱，去年在哈佛商学院，有学生问
我何时会退休，我的回答是：「大概要等到我死后五到十年吧！」。
Sources of Reported Earnings
帐列盈余的来源
The table below shows the major sources of Berkshire's
reported earnings. In this presentation, amortization of Goodwill
and other major purchase-price accounting adjustments are not
charged against 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. I've explained in past
reports why 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 purchaseprice
adjustments to be made on a business-by-business basis. The
total net 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。
A large amount of additional information about these
businesses is given on pages 33-47, where you also will find
our segment earnings reported on a GAAP basis. However, we will
not in this letter discuss each of our non-insurance operations,
as we have in the past. Our businesses have grown in number - and
will continue to grow - so it now makes sense to rotate coverage,
discussing one or two in detail each year.
年报中还有企业个别部门的信息，依照一般公认会计原则所编写的格式，另外从
今年开始我们将不再像过去那样详细叙述非保险业的营运，因为我们旗下事业组
织日益庞大，且以后还会继续成长，所以实在是没有必要每年都重复讨论相同的
事情。
(000s omitted)
-----------------------------------------
Berkshire's Share
of Net Earnings
(after taxes and
Pre-Tax Earnings minority interests)
---------------------- ----------------------
1991 1990 1991 1990
---------- ---------- ---------- ----------
Operating Earnings:
Insurance Group:
Underwriting ............ $(119,593) $ (26,647) $ (77,229) $ (14,936)
Net Investment Income ... 331,846 327,047 285,173 282,613
H. H. Brown (acquired 7/1/91) 13,616 --- 8,611 ---
Buffalo News .............. 37,113 43,954 21,841 25,981
Fechheimer ................ 12,947 12,450 6,843 6,605
Kirby ..................... 35,726 27,445 22,555 17,613
Nebraska Furniture Mart ... 14,384 17,248 6,993 8,485
Scott Fetzer
Manufacturing Group .... 26,123 30,378 15,901 18,458
See's Candies ............. 42,390 39,580 25,575 23,892
Wesco - other than Insurance 12,230 12,441 8,777 9,676
World Book ................ 22,483 31,896 15,487 20,420
Amortization of Goodwill .. (4,113) (3,476) (4,098) (3,461)
Other Purchase-Price
Accounting Charges ..... (6,021) (5,951) (7,019) (6,856)
Interest Expense* ......... (89,250) (76,374) (57,165) (49,726)
Shareholder-Designated
Contributions .......... (6,772) (5,824) (4,388) (3,801)
Other ..................... 77,399 58,310 47,896 35,782
---------- ---------- ---------- ----------
Operating Earnings 400,508 482,477 315,753 370,745
Sales of Securities 192,478 33,989 124,155 23,348
Total Earnings - All Entities $ 592,986 $ 516,466 $ 439,908 $ 394,093
*Excludes interest expense of Scott Fetzer Financial Group and
Mutual Savings & Loan.
*不包含史考特飞兹与联合储贷的利息费用
"Look-Through" Earnings
透视盈余
We've previously discussed look-through earnings, which
consist of: (1) the operating earnings reported in the previous
section, plus; (2) the retained operating earnings of major
investees that, under GAAP accounting, are not reflected in our
profits, less; (3) an allowance for the tax that would be paid by
Berkshire if these retained earnings of investees had instead been
distributed to us.
之前我们曾经讨论过透视盈余，其主要的组成份子有(1)前段所提到的帐列盈
余，加上(2)主要被投资公司的保留盈余，按一般公认会计原则未反应在我们公
司帐上的盈余，扣除(3)若这些未反应的盈余分配给我们时，估计可能要缴的所
得税。
I've told you that over time look-through earnings must
increase at about 15% annually if our intrinsic business value is
to grow at that rate. Indeed, since present management took over in
1965, our look-through earnings have grown at almost the identical
23% rate of gain recorded for book value.
我曾经告诉各位，长期而言，如果我们的实质价值也期望以这个幅度来成长的
话，透视盈余每年也必须增加15%，而的确过自从现有经营阶层于1965年接
手后，公司的透视盈余几乎与帐面价值一样，以23%的年复合成长率增加。
Last year, however, our look-through earnings did not grow at
all but rather declined by 14%. To an extent, the decline was
precipitated by two forces that I discussed in last year's report
and that I warned you would have a negative effect on look-through
earnings.
然而去年我们的透视盈余不但没有增加，反而减少了14%，这样的下滑主要导
源于去年年报就曾经向各位提过的两项因素，那时我就曾经警告各位那对我们的
透视盈余将会有负面的影响。
First, I told you that our media earnings - both direct and
look-through - were "sure to decline" and they in fact did. The
second force came into play on April 1, when the call of our
Gillette preferred stock required us to convert it into common. The
after-tax earnings in 1990 from our preferred had been about $45
million, an amount somewhat higher than the combination in 1991 of
three months of dividends on our preferred plus nine months of
look-through earnings on the common.
首先我告诉各位旗下媒体事业的盈余，不管是帐面直接或是间接透视一定会减
少，而事实证明确是如此，第二个因素发生在4月1号我们吉列特别股被要求
转为普通股，1990年来自特别股的税后盈余是4,500万美元，大概比1991
年一季的股利总和加上三季的普通股透视盈余还多一点。
Two other outcomes that I did not foresee also hurt lookthrough
earnings in 1991. First, we had a break-even result from
our interest in Wells Fargo (dividends we received from the company
were offset by negative retained earnings). Last year I said that
such a result at Wells was "a low-level possibility - not a
likelihood." Second, we recorded significantly lower - though still
excellent - insurance profits.
另外有二项我没有意料到的结果，也影响到我们1991年的透视盈余，首先我们
在Well-Fargo的利益大概仅维持损益两平(所收到的股利收入被其累积亏损所
抵消)，去年我说这样的可能性很低的说法，其可信度存疑，第二我们的保险业
盈余虽然算是不错，但还是比往年低。
The following table shows you how we calculate look-through
earnings, although I warn you that the figures are necessarily very
rough. (The dividends paid to us by these investees have been
included in the operating earnings itemized on page 6, mostly
under "Insurance Group: Net Investment Income.")
各位可以从下表看出我们是如何计算透视盈余的，不过我还是要提醒各位这些数
字有点粗糙，(被投资公司所分配的股利收入已经包含在保险事业的净投资收益
项下)
Berkshire's Share
of Undistributed
Berkshire's Approximate Operating Earnings
Berkshire's Major Investees Ownership at Yearend (in millions)
----------------------- --------------------- ------------------
1991 1990 1991 1990
------ ------ -------- --------
Capital Cities/ABC Inc. ........ 18.1% 17.9% $ 61 $ 85
The Coca-Cola Company .......... 7.0% 7.0% 69 58
Federal Home Loan Mortgage Corp. 3.4%(1) 3.2%(1) 15 10
The Gillette Company ........... 11.0% --- 23(2) ---
GEICO Corp. .................... 48.2% 46.1% 69 76
The Washington Post Company .... 14.6% 14.6% 10 18
Wells Fargo & Company .......... 9.6% 9.7% (17) 19(3)
-------- --------
Berkshire's share of
undistributed earnings of major investees $230 $266
Hypothetical tax on these undistributed investee earnings (30) (35)
Reported operating earnings of Berkshire 316 371
-------- --------
Total look-through earnings of Berkshire $516 $602
====== ======
1. Net of minority interest at Wesco
已扣除Wesco的少数股权
(2) For the nine months after Berkshire converted its
preferred on April 1
仅含Berkshire于4月1日申请转换为普通股后的九个月
(3) Calculated on average ownership for the year
以年平均持有股权比例计算
* * * * * * * * * * * *
We also believe that investors can benefit by focusing on
their own look-through earnings. To calculate these, they should
determine the underlying earnings attributable to the shares they
hold in their portfolio and total these. The goal of each investor
should be to create a portfolio (in effect, a "company") that will
deliver him or her the highest possible look-through earnings a
decade or so from now.
我们也相信投资人可以透过研究自己的透视盈余而受益，在算这个东西时，他们
就会了解到其个别投资组合所应分配到的真正盈余的合计数，所有投资人的目
标，应该是要建立一项投资组合可以让其透视盈余在从现在开始的十年内极大
化。
An approach of this kind will force the investor to think
about long-term business prospects rather than short-term stock
market prospects, a perspective likely to improve results. It's
true, of course, that, in the long run, the scoreboard for
investment decisions is market price. But prices will be determined
by future earnings. In investing, just as in baseball, to put runs
on the scoreboard one must watch the playing field, not the
scoreboard.
这样的方式将会迫使投资人思考企业真正的长期远景而不是短期的股价表现，从
而藉此改善其投资绩效，当然无可否认就长期而言，投资决策的绩效还是要建立
在股价表现之上，但价格将取决于未来的获利能力，投资就像是打棒球一样，想
要得分大家必须将注意力集中到场上，而不是紧盯着计分板。
A Change in Media Economics and Some Valuation Math
媒体产业的变化与其评价的算式
In last year's report, I stated my opinion that the decline in
the profitability of media companies reflected secular as well as
cyclical factors. The events of 1991 have fortified that case: The
economic strength of once-mighty media enterprises continues to
erode as retailing patterns change and advertising and
entertainment choices proliferate. In the business world,
unfortunately, the rear-view mirror is always clearer than the
windshield: A few years back no one linked to the media business -
neither lenders, owners nor financial analysts - saw the economic
deterioration that was in store for the industry. (But give me a
few years and I'll probably convince myself that I did.)
在去年的报告中，我曾经表示媒体事业获利能力衰退主要是反应景气的循环因
素，但在1991年发生的情况则不是那么一回事，由于零售业形态的转变加上广
告与娱乐事业的多元化，以往曾经一度风光的媒体事业，其竞争力已受到严重的
侵蚀，然而不幸的是在商业世界中，从后照镜所看到的景象永远比挡风玻璃的还
清楚，几年前几乎没有人，包含银行、股东与证券分析师在内，会不看好媒体事
业的发展，(若是再多给我几年，我可能就能正确判断出这个产业正在走下坡)。
The fact is that newspaper, television, and magazine
properties have begun to resemble businesses more than franchises
in their economic behavior. Let's take a quick look at the
characteristics separating these two classes of enterprise, keeping
in mind, however, that many operations fall in some middle ground
and can best be described as weak franchises or strong businesses.
事实是报纸、电视与杂志等媒体的行为，越来越超越身为特许行业所应该做的
事，让我们很快地看一下特许事业与一般事业在特性上的不同，不过请记住，很
多公司事实上是介于这两者之间，所以也可以将之形容为弱势的特许事业或是强
势的一般企业。
An economic franchise arises from a product or service that:
(1) is needed or desired; (2) is thought by its customers to have
no close substitute and; (3) is not subject to price regulation.
The existence of all three conditions will be demonstrated by a
company's ability to regularly price its product or service
aggressively and thereby to earn high rates of return on capital.
Moreover, franchises can tolerate mis-management. Inept managers
may diminish a franchise's profitability, but they cannot inflict
mortal damage.
藉由特定的产品或服务，一家公司可以成为特许的行业(1)它确有需要或需求(2)
被顾客认定为找不到其它类似的替代品(3)不受价格上的管制，一家公司到底有
没有具有以上三个特点可能从他是否能积极地为本身所提供的产品与服务订定
价格的能力，从而赚取更高的资本报酬率，更重要的特许事业比较能够容忍不当
的管理，无能的经理人虽然会降低特许事业的获利能力，但是并不会造成致命
的伤害。
In contrast, "a business" earns exceptional profits only if it
is the low-cost operator or if supply of its product or service is
tight. Tightness in supply usually does not last long. With
superior management, a company may maintain its status as a lowcost
operator for a much longer time, but even then unceasingly
faces the possibility of competitive attack. And a business, unlike
a franchise, can be killed by poor management.
相对的，一般事业想要获致高报酬就只有靠着节省成本或是当其所提供的产品或
服务供需不均之时，但是这种供给不足的情况通常维持不了多久，倒是透过优良
的管理，一家公司却可以长期维持低成本的营运，但即使是如此，还是会面临竞
争对手持续不断的攻击，而不像特许事业，一般事业有可能因为管理不善而倒闭。
Until recently, media properties possessed the three
characteristics of a franchise and consequently could both price
aggressively and be managed loosely. Now, however, consumers
looking for information and entertainment (their primary interest
being the latter) enjoy greatly broadened choices as to where to
find them. Unfortunately, demand can't expand in response to this
new supply: 500 million American eyeballs and a 24-hour day are all
that's available. The result is that competition has intensified,
markets have fragmented, and the media industry has lost some -
though far from all - of its franchise strength.
直到最近，媒体产业还拥有特许事业这三项特质，因此还能够订定侵略性的价格
并容忍宽松的管理，不过现在的消费大众不断地寻找不同的信息与娱乐来源，也
越来越能够接受各种不同的选择，另一方面很不幸的是消费者的需求并不会随着
供给的增加而变大，五亿只美国眼睛，一天24小时，就这么多，不可能再增加
了。所以结果可想而知竞争会变得更激烈，市场被区隔开，媒体产业因而丧失了
部份原有的特许能力。
* * * * * * * * * * * *
The industry's weakened franchise has an impact on its value
that goes far beyond the immediate effect on earnings. For an
understanding of this phenomenon, let's look at some much oversimplified,
but relevant, math.
媒体产业转为弱势，除了让短期盈余获利受到冲击之外，对其本身的价值将有更
深远的影响，为了让大家了解这种现象，让我们来看看稍微简化但却颇为相关的
数学算式。
A few years ago the conventional wisdom held that a newspaper,
television or magazine property would forever increase its earnings
at 6% or so annually and would do so without the employment of
additional capital, for the reason that depreciation charges would
roughly match capital expenditures and working capital requirements
would be minor. Therefore, reported earnings (before amortization
of intangibles) were also freely-distributable earnings, which
meant that ownership of a media property could be construed as akin
to owning a perpetual annuity set to grow at 6% a year. Say, next,
that a discount rate of 10% was used to determine the present value
of that earnings stream. One could then calculate that it was
appropriate to pay a whopping $25 million for a property with
