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 .18
margins very significantly. But this is a development we welcome: Long
term, a tough market helps the low-cost operator, which is what we are
and intend to remain.
盖可并不是近年来唯一取得好成绩汽车保险业者，去年整个产业获得高于原先预
期的获利成果，但这种好光景很难维持下去，因为来自同业激烈的竞争很快地就
会压缩获利的空间，然而面对可能的发展，我们胸有成竹，就长期而言，艰困的
市场环境有利于低成本营运的业者生存，这也是一直以来我们努力维持的竞争优
势。
Last year I told you about the record 16.9% profit-sharing
contribution that GEICO's associates had earned and explained that two
simple variables set the amount: policy growth and profitability of
seasoned business. I further explained that 1996's performance was so
extraordinary that we had to enlarge the chart delineating the possible
payouts. The new configuration didn't make it through 1997: We
enlarged the chart's boundaries again and awarded our 10,500
associates a profit-sharing contribution amounting to 26.9% of their
base compensation, or $71 million. In addition, the same two variables
-- policy growth and profitability of seasoned business -- determined
the cash bonuses that we paid to dozens of top executives, starting with
Tony.
去年我也曾跟各位报告过盖可员工为自己挣得高达16.9%的盈余分红比例，同
时也解释只有两项简单的参数计算出这个比例，那就是保单的成长率与长期业务
的获利状况，我还说由于1996年的表现实在是超乎预期以致于原先预估支付奖
金的图表，因不敷使用而必须加大，不过到了今年新的图表竟然又不够用，为此
我们再度提高上限，总计全公司上上下下的10,500名员工，一共可以领到相当
于底薪的26.9%，总金额高达7,100万美元，当然这两项参数，同时也适用于
包含Tony在内，数十位高阶经理人的奖金红利。
At GEICO, we are paying in a way that makes sense for both our
owners and our managers. We distribute merit badges, not lottery
tickets: In none of Berkshire's subsidiaries do we relate compensation to
our stock price, which our associates cannot affect in any meaningful
way. Instead, we tie bonuses to each unit's business performance, which
is the direct product of the unit's people. When that performance is
terrific -- as it has been at GEICO -- there is nothing Charlie and I enjoy
more than writing a big check.
在盖可，我们支付薪资红利的方式很能够获得劳资双方的认同，我们颁发的是红
利奖章而不是乐透彩券，Berkshire旗下的子公司员工的薪资报酬与母公司的股
价一点关系都没有，因为前者并没有能力直接影响后者，相反地，我们将子公司
的薪资与各单位的各自表现完全绑在一起，因为后者的成败必须由前者负全部的
责任，当某事业单位的表现杰出时，就像盖可去年的情况一样，查理跟我乐于签
发大笔大笔的支票。
GEICO's underwriting profitability will probably fall in 1998, but the
company's growth could accelerate. We're planning to step on the gas:
GEICO's marketing expenditures this year will top $100 million, up 50%
from 1997. Our market share today is only 3%, a level of penetration
that should increase dramatically in the next decade. The auto
insurance industry is huge -- it does about $115 billion of volume
annually -- and there are tens of millions of drivers who would save
substantial money by switching to us.
不过盖可1998年的承保获利很可能会下滑，但是保单数量应该还会继续成长，
我们已准备好加紧油门，盖可保险今年预计的行销费用将突破一亿美元的大关，
这数字比起1997年要增加50%以上，截至目前为止，我们的市场占有率约为
3%，预计在未来的十年内还会大幅增加，整个汽车保险市场的大饼相当可观，
每年约有1,150亿美元的市场胃纳量，预估将有上千万的驾驶人因为将保单转
移到我们这边而节省相当可观的保费。
* * * * * * * * * * * *
In the 1995 report, I described the enormous debt that you and I
owe to Lorimer Davidson. On a Saturday early in 1951, he patiently
explained the ins and outs of both GEICO and its industry to me -- a
20-year-old stranger who'd arrived at GEICO's headquarters uninvited
and unannounced. Davy later became the company's CEO and has
remained my friend and teacher for 47 years. The huge rewards that
GEICO has heaped on Berkshire would not have materialized had it not
been for his generosity and wisdom. Indeed, had I not met Davy, I might
never have grown to understand the whole field of insurance, which
over the years has played such a key part in Berkshire's success.
在1995年的年报中，我曾经提到我们欠Lorimer Davidson一个大人情，因为
要不是当年他很有耐心地跟一个素未谋面却冒冒失失闯入GEICO公司总部的二
十岁小毛头深入浅出地介绍GEICO以及其所属产业种种的话，也不会有今天的
Berkshire跟我本人，Davy后来也成为该公司的总裁，并与我维持长达47年
亦师亦友的情谊，没有他的宽容与智能，Berkshire也没有办法靠着GEICO的
成功而发扬光大。
Davy turned 95 last year, and it's difficult for him to travel.
Nevertheless, Tony and I hope that we can persuade him to attend our
annual meeting, so that our shareholders can properly thank him for his
important contributions to Berkshire. Wish us luck.
Davy去年已高龄95岁，旅途奔波对他来说是一件很辛苦的事，不过Tony跟
我还是会尽量说服他参与今年的股东会，好让大家能够藉这个机会好好地感谢他
对Berkshire所做的贡献，希望我们能够如愿。
* * * * * * * * * * * *
Though they are, of course, far smaller than GEICO, our other
primary insurance operations turned in results last year that, in
aggregate, were fully as stunning. National Indemnity's traditional
business had an underwriting profit of 32.9% and, as usual, developed a
large amount of float compared to premium volume. Over the last three
years, this segment of our business, run by Don Wurster, has had a
profit of 24.3%. Our homestate operation, managed by Rod Eldred,
recorded an underwriting profit of 14.1% even though it continued to
absorb the expenses of geographical expansion. Rod's three-year
record is an amazing 15.1%. Berkshire's workers' compensation
business, run out of California by Brad Kinstler, had a modest
underwriting loss in a difficult environment; its three-year underwriting
record is a positive 1.5%. John Kizer, at Central States Indemnity, set a
new volume record while generating good underwriting earnings. At
Kansas Bankers Surety, Don Towle more than lived up to the high
expectations we had when we purchased the company in 1996.
当然除了GEICO保险以外，我们其它主要的保险事业，虽然规模较小，但所缴
出来的成绩单总的来说，同样令人激赏，国家产险传统业务的承保获利率高达
32.9%，同时也贡献出相较于保费收入高比例的浮存金，累计过去三年，这个由
Don Wurster领导的部门平均获利率为24.3%，另外在由Rod Eldred 领导的
Homestate业务部份，在必须吸收地区业务扩展的费用下，仍然缴出14.1%的
承保获利，累计最近三年的获利率为15.1%，此外Berkshire的劳工退休金业
务部份，在加州的Brad Kinstler主持下，虽然面临困难的环境，但产生承保损
失的程度相对轻微，平均三年的承保成绩是正的1.5%，还有由John Kizer领导
的Central States保险在保费收入缔造新高的同时，也贡献相当不错的承保获
利，最后是我们在1996年买进的Kansas银行家保险，Don Towle的表现甚
至超过我们当初设立的高标准。
In aggregate, these five operations recorded an underwriting profit
of 15.0%. The two Dons, along with Rod, Brad and John, have created
significant value for Berkshire, and we believe there is more to come.
总计下来，这五家保险子公司平均的承保获利率是15.0%，两位Dons加上
Rod、Brad及John，为Berkshire创造了可观的利益，而且我们也相信后势可
期。
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
pages 69 and 70, 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)
1997 19961997 1996
Operating Earnings:
Insurance Group:
Underwriting -- Super-Cat. . . . . . . .$ 283.0 $ 167.0 $ 182.7 $ 107.4
Underwriting -- Other Reinsurance. . . . (155.2) (174.8) (100.1) (112.4)
Underwriting -- GEICO. . . . . . . . . . 280.7 171.4 181.1 110.2
Underwriting -- Other Primary. . . . . . 52.9 58.534.1 37.6
Net Investment Income. . . . . . . . . . 882.3 726.2 703.6 593.1
Buffalo News . . . . . . . . . . . . . . . 55.9 50.432.7 29.5
Finance Businesses . . . . . . . . . . . . 28.1 23.118.0 14.9
FlightSafety . . . . . . . . . . . . . . . 139.53.1(1) 84.41.9(1)
Home Furnishings . . . . . . . . . . . . . 56.8(2) 43.832.2(2) 24.8
Jewelry. . . . . . . . . . . . . . . . . . 31.6 27.818.3 16.1
Scott Fetzer(excluding finance operation). 118.9 121.777.3 81.6
See's Candies. . . . . . . . . . . . . . . 58.6 51.935.0 30.8
Shoe Group . . . . . . . . . . . . . . . . 48.8 61.632.2 41.0
Purchase-Accounting Adjustments. . . . . . (104.9) (75.7) (97.0) (70.5)
Interest Expense(3). . . . . . . . . . . . (106.6) (94.3) (67.1) (56.6)
Shareholder-Designated Contributions . . . (15.4) (13.3) (9.9) (8.5)
Other. . . . . . . . . . . . . . . . . . . 60.7 73.037.0 42.2
------- ------- ------- --------
Operating Earnings . . . . . . . . . . . . . 1,715.7 1,221.4 1,194.5 883.1
Capital Gains from Investments . . . . . . . 1,111.9 2,484.5 707.1 1,605.5
------ ------- ------- -------
Total Earnings - All Entities. . . . . . . .$2,827.6 $3,705.9 $1,901.6 $2,488.6
====== ====== ===== =====
(1) From date of acquisition, December 23, 1996.
From date of acquisition, December 23, 1996.
(2) Includes Star Furniture from July 1, 1997.
y 1, 1997.
(3) Excludes interest expense of Finance Businesses.
Overall, our operating businesses continue to perform
exceptionally well, far outdoing their industry norms. We are
particularly pleased that profits improved at Helzberg's after a
disappointing 1996. Jeff Comment, Helzberg's CEO, took decisive steps
early in 1997 that enabled the company to gain real momentum by the
crucial Christmas season. In the early part of this year, as well, sales
remained strong.
总的来说，我们旗下的营利事业的表现远优于一般的同业，尤其是Helzberg钻
石在渡过令人失望的1996年之后，获利状况大幅提升，Helzberg公司的总裁
Jeff Comment在1997年初断然地采取各项措施，带领整个公司在重要的圣诞
旺季大有斩获，而截至今年上半年为止，销售状况依旧强劲。
Casual observers may not appreciate just how extraordinary the
performance of many of our businesses has been: If the earnings history
of, say, Buffalo News or Scott Fetzer is compared to the records of their
publicly-owned peers, their performance might seem to have been
unexceptional. But most public companies retain two-thirds or more of
their earnings to fund their corporate growth. In contrast, those
Berkshire subsidiaries have paid 100% of their earnings to us, their
parent company, to fund our growth.
一般的人可能无法体会，我们众多旗下事业的表现到底有多杰出，虽然相较于其
他已上市的同业，水牛城新闻报或是史考特飞兹的获利表现看起来并不突出，不
过大家要了解，大部分的上市公司通常会将三分之二以上的盈余保留不分配以支
应内部的成长，但是Berkshire大部分的子公司却将所赚取的盈余分毫不差的缴
回母公司，是他们贡献的资金促成母公司Berkshire进一步的成长。
In effect, the records of the public companies reflect the cumulative
benefits of the earnings they have retained, while the records of our
operating subsidiaries get no such boost. Over time, however, the
earnings these subsidiaries have distributed have created truly huge
amounts of earning power elsewhere in Berkshire. The News, See's and
Scott Fetzer have alone paid us $1.8 billion, which we have gainfully
employed elsewhere. We owe their managements our gratitude for
much more than the earnings that are detailed in the table.
事实上这些上市公司的盈余对于其获利表现有累积效果，相较之下，我们的子公
司却没有这方面的支助，然而就长期而言，这些子公司上缴的资金对于
Berkshire在其它地方的获利能力却有极大的贡献，总计水牛城新闻、喜斯糖果
与史考特飞兹，这三家公司这几年来贡献的盈余就高达18亿美元，而我们也得
以好好地运用这些资金，所以我们对于这些经理人的感谢绝不仅止于帐面上所看
到的那些盈余数字而已。
Additional information about our various businesses is given on
pages 36 - 50, where you will also find our segment earnings reported
on a GAAP basis. In addition, on pages 55 - 61, 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. Our intent is to supply you with the financial information that
we would wish you to give us if our positions were reversed.
在年报中你可以找到依照一般公认会计原则编制，详细的部门别信息，另外你还
可以找到经过重编，依照Berkshire四大部门的信息，这是查理跟我能够完整呈
现Berkshire现况的模式，我们的目的是希望能够换个角度设想，提供大家所有
必要的信息。
Look-Through Earnings
完整透视盈余
Reported earnings are a poor measure of economic progress at
Berkshire, in part because the numbers shown in the table presented
earlier include only the dividends we receive from investees -- though
these dividends typically represent only a small fraction of the earnings
attributable to our ownership. Not that we mind this division of money,
since on balance we regard the undistributed earnings of investees as
more valuable to us than the portion paid out. The reason is simple: Our
investees often have the opportunity to reinvest earnings at high rates
of return. So why should we want them paid out?
我们认为帐列盈余很难表现Berkshire实际的营运状况，部份原因在于列示在本
公司帐上的股利收入，事实上仅占被投资公司收益的一小部份，其实我们并不要
求盈余一定要分配，事实上对我们而言，我们更重视未分配的那一部份，因为他
们极可能为我们创造出更高的价值，原因很简单，因为我们的被投资公司往往比
母公司更有机会把资金投入到高投资报酬的用途之上，既然如此又何必一定要强
迫他们把盈余分配回来呢?
To depict something closer to economic reality at Berkshire than
reported earnings, though, we employ the concept of "look-through"
earnings. As we calculate these, they consist of: (1) the operating
earnings reported in the previous section, plus; (2) our share of 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. When tabulating
"operating earnings" here, we exclude purchase-accounting
adjustments as well as capital gains and other major non-recurring
items.
为了要更真实的反应Berkshire实际的经营状况，于是乎我们运用了完整透视盈
余的观念，这个数字总共包含(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。在这里我们所谓的营
业盈余系已扣除资本利得、特别会计调整与企业其它非常态的项目。
The following table sets forth our 1997 look-through earnings,
though I warn you that the figures can be no more than approximate,
since they are based on a number of judgment calls. (The dividends paid
to us by these investees have been included in the operating earnings
itemized on page 11, mostly under "Insurance Group: Net Investment
Income.")
各位可以从下表看出我们是如何计算出1997年透视盈余的，不过我还是要提醒
各位这些数字只不过是估计数，很多都是基于简单的判断，(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
