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 .19
Berkshire's Approximate Operating Earnings
Berkshire's Major Investees Ownership at Yearend(1) (in millions)(2)
American Express Compa 10.7% $161
The Coca-Cola Company8.1% 216
The Walt Disney Company 3.2% 65
Freddie Mac 8.6% 86
The Gillette Company 8.6% 82
The Washington Post Company16.5% 30
Wells Fargo & Company 7.8% 103
------
Berkshire's share of undistributed earnings of major investees 743
Hypothetical tax on these undistributed investee earnings(3) (105)
Reported operating earnings of Berkshire 1,292
------
Total look-through earnings of Berkshire $1,930
======
(1) Does not include shares allocable to minority interests
(2) Calculated on average ownership for the year
(3) The tax rate used is 14%, which is the rate Berkshire
pays on the dividends it receives
Acquisitions of 1997
1997年的购并活动
In 1997, we agreed to acquire Star Furniture and International Dairy
Queen (a deal that closed early in 1998). Both businesses fully meet our
criteria: They are understandable; possess excellent economics; and are
run by outstanding people.
1997年我们同意买下星辰家具与国际乳品皇后(后者在1998年初正式敲定)，
两家公司都完全符合我们的标准，产业性质单纯、拥有绝佳的竞争优势且由杰出
的人才所经营。
The Star transaction has an interesting history. Whenever we buy
into an industry whose leading participants aren't known to me, I always
ask our new partners, "Are there any more at home like you?" Upon our
purchase of Nebraska Furniture Mart in 1983, therefore, the Blumkin
family told me about three outstanding furniture retailers in other parts
of the country. At the time, however, none was for sale.
星辰家具的交易有个相当有趣的故事，每当我们跨足一个原本我们不熟悉的产
业，我都会习惯性地问一问新加入的合作伙伴，"除了你们以外，还有没有像你
们一样的企业?"，早在1983年我们买下内布拉斯加家具店时，我就问过B太太
家族这个问题，当时她告诉我全美其它地方还有三家不错的家具零售商可以考
虑，不过很可惜在当时没有任何一家有出售的意愿。
Many years later, Irv Blumkin learned that Bill Child, CEO of R.C.
Willey -- one of the recommended three -- might be interested in
merging, and we promptly made the deal described in the 1995 report.
We have been delighted with that association -- Bill is the perfect
partner. Furthermore, when we asked Bill about industry standouts, he
came up with the remaining two names given me by the Blumkins, one
of these being Star Furniture of Houston. But time went by without there
being any indication that either of the two was available.
多年后，B太太家族的Irv得知当初获得推荐的三家公司之一-R.C. Willey家具
总裁Bill Child有意与人合并，我们立刻把握良机促成交易，这项交易也在1995
年的年报向各位报告过，事后我们也很满意这次的结合，Bill是再理想不过的合
作伙伴，当然我也不忘问问Bill相同的问题，请他推荐其它杰出的同业，结果得
到的答案与B太太所说的一致，其中一家就是位于修士顿的星辰家具，只是随着
时光的流逝没有一家有意愿出售。
On the Thursday before last year's annual meeting, however, Bob
Denham of Salomon told me that Melvyn Wolff, the long-time
controlling shareholder and CEO of Star, wanted to talk. At our
invitation, Melvyn came to the meeting and spent his time in Omaha
confirming his positive feelings about Berkshire. I, meanwhile, looked at
Star's financials, and liked what I saw.
而就在去年年度股东会的前一个星期四，所罗门公司的董事长丹汉告诉我星辰家
具的大股东兼总裁-Melvyn Wolff，有意愿跟我谈谈，于是在我们的邀约下，
Melvyn光临奥玛哈与我们会谈，进一步确认对于Berkshire的正面观感，而在
此同时我也看了星辰家具的财务报表，一切正如我所预期。
A few days later, Melvyn and I met in New York and made a deal in
a single, two-hour session. As was the case with the Blumkins and Bill
Child, I had no need to check leases, work out employment contracts,
etc. I knew I was dealing with a man of integrity and that's what counted.
几天后，Melvyn与我再度在纽约碰面，前后只花了两个钟头的会谈就把整个交
易敲定，而如同先前与B太太家族及Bill Child的经验一样，我不需要再去查核
租约、员工雇用合约等，我知道我正在和一位具有正直人格的人打交道，这样就
足够了。
Though the Wolff family's association with Star dates back to 1924,
the business struggled until Melvyn and his sister Shirley Toomin took
over in 1962. Today Star operates 12 stores -- ten in Houston and one
each in Austin and Bryan -- and will soon move into San Antonio as well.
We won't be surprised if Star is many times its present size a decade
from now.
虽然Wolff家族与星辰家具的关系可以追溯到1924年以前，但是该公司直到
Melvyn跟他姐姐Shirly在1962年接手经营后才有起色，时至今日，星辰总共
有12家分店，其中十家在修士顿、另外两家在奥斯丁与拜伦，还有一家新店即
将在圣安东尼奥开张，我想星辰要是在未来十年内以倍数的方式扩张，我一点都
不会感到意外。
Here's a story illustrating what Melvyn and Shirley are like: When
they told their associates of the sale, they also announced that Star
would make large, special payments to those who had helped them
succeed -- and then defined that group as everyone in the business.
Under the terms of our deal, it was Melvyn and Shirley's money, not
ours, that funded this distribution. Charlie and I love it when we become
partners with people who behave like that.
下面的一则故事充分说明Melvyn与Shirley是怎么样的人︰当星辰家具正式宣
布出售公司时，他们同时也公布将支付一笔大额的红利给所有帮助公司成功的人
士，范围包含公司上上下下所有的员工，而根据交易的合约内容，这笔钱将由
Melvyn与Shirley自掏腰包，查理跟我相当赞赏即将与我们共事的合伙人能有
这样的举动。
The Star transaction closed on July 1. In the months since, we've
watched Star's already-excellent sales and earnings growth accelerate
further. Melvyn and Shirley will be at the annual meeting, and I hope you
get a chance to meet them.
星辰家具的交易案在七月一日正式定案，而在之后的几个月，星辰家具本来已经
表现相当不错的营收又继续大幅成长，Melvyn与Shirley将会出席今年的股东
年会，届时希望大家能够前来与他们见见面。
Next acquisition: International Dairy Queen. There are 5,792 Dairy
Queen stores operating in 23 countries -- all but a handful run by
franchisees -- and in addition IDQ franchises 409 Orange Julius
operations and 43 Karmelkorn operations. In 190 locations, "treat
centers" provide some combination of the three products.
另一个购并案：国际乳品皇后，简称乳品皇后IDQ，总共有5,792个营业据点，
分布在全球的23个国家，除了少数系加盟店外，其余皆为自营，此外还有409
家Orange Julius加盟店与43家Karmelkorn，其中有190个据点同时提供三
种选择。
For many years IDQ had a bumpy history. Then, in 1970, a
Minneapolis group led by John Mooty and Rudy Luther took control. The
new managers inherited a jumble of different franchising agreements,
along with some unwise financing arrangements that had left the
company in a precarious condition. In the years that followed,
management rationalized the operation, extended food service to many
more locations, and, in general, built a strong organization.
早期乳品皇后的命运多舛，在1970年代当时，由来自明尼拿波里斯的John
Mooty与Rudy Luther接手经营，新的经营阶层面对的是由前手遗留下来混乱
的加盟合约以及不合理的融资计画所造成岌岌可危的窘况，所幸在接下来的几年
内，新经营阶层导正这种乱象，并且对外扩张新增了许多营业据点，让公司经营
逐渐步入坦途。
Last summer Mr. Luther died, which meant his estate needed to sell
stock. A year earlier, Dick Kiphart of William Blair & Co., had introduced
me to John Mooty and Mike Sullivan, IDQ's CEO, and I had been
impressed with both men. So, when we got the chance to merge with
IDQ, we offered a proposition patterned on our FlightSafety acquisition,
extending selling shareholders the option of choosing either cash or
Berkshire shares having a slightly lower immediate value. By tilting the
consideration as we did, we encouraged holders to opt for cash, the
type of payment we by far prefer. Even then, only 45% of IDQ shares
elected cash.
去年夏天Luther先生过世，他的股份因而必须对外出售，而在这之前经由
William Blair公司的总裁Dick Kiphart的介绍，使我得以结识John Mooty与
乳品皇后的总裁Mike Sullivan，且这两人让我印象相当深刻，也因此Berkshire
可以趁此机会与乳品皇后合并，而我们也提出与之前购并国际飞安公司时相同的
条件，提供乳品皇后股东换成现金或股票两种不同的选择，其中换成Berkshire
股份的条件略低于现金，主要是因为大家尽量选择换成现金，不过即便如此，总
共也只有45%的股东决定领取现金。
Charlie and I bring a modicum of product expertise to this
transaction: He has been patronizing the Dairy Queens in Cass Lake and
Bemidji, Minnesota, for decades, and I have been a regular in Omaha.
We have put our money where our mouth is.
在这次的交易中，查理跟我稍微发挥了一下对于产品的知识，查理他几十年来固
定光顾位于明尼苏达州凯斯湖与Bemidji的乳品皇后，而我则是奥玛哈地区乳品
皇后的常客，我们等于是"把钱花在嘴巴上"。
A Confession
自我检讨
I've mentioned that we strongly prefer to use cash rather than
Berkshire stock in acquisitions. A study of the record will tell you why: If
you aggregate all of our stock-only mergers (excluding those we did
with two affiliated companies, Diversified Retailing and Blue Chip
Stamps), you will find that our shareholders are slightly worse off than
they would have been had I not done the transactions. Though it hurts
me to say it, when I've issued stock, I've cost you money.
我之所以会一再强调倾向利用现金而非Berkshire股票进行购并的原因在于，记
录显示我们所有利用股票并购的合并案(扣除早期的多元零售与蓝筹邮票两个案
子不算)，大家会发现所得的结果可能比不购并还差，虽然这样子讲对我很伤，
不过我还是必须承认，每当我发行股票，就等于是让股东们亏钱。
Be clear about one thing: This cost has not occurred because we
were misled in any way by sellers or because they thereafter failed to
manage with diligence and skill. On the contrary, the sellers were
completely candid when we were negotiating our deals and have been
energetic and effective ever since.
不过有一点要澄清的是，之所以会如此绝对不是因为我们遭到卖方的误导或是在
被买下后不用心经营，相反的，这些卖方在交易谈判当时皆坦诚布公，同时也很
努力经营事业。
Instead, our problem has been that we own a truly marvelous
collection of businesses, which means that trading away a portion of
them for something new almost never makes sense. When we issue
shares in a merger, we reduce your ownership in all of our businesses
-- partly-owned companies such as Coca-Cola, Gillette and American
Express, and all of our terrific operating companies as well. An example
from sports will illustrate the difficulty we face: For a baseball team,
acquiring a player who can be expected to bat .350 is almost always a
wonderful event -- except when the team must trade a .380 hitter to
make the deal.
主要的问题在于，我们原本就已经拥有的绝佳企业组合，因此不论拿什么新的东
西来换都不划算，也就是说每当我们发行新股用来购并新的企业时，就等于是间
接减少我们原本拥有的绝佳企业的股权比例，不论是只有部份股权的可口可乐、
吉列刮胡刀及美国运通，或者是旗下所有营利事业皆是如此，在运动场上有一个
例子可以充分说明我们所面临的难题，对一只棒球队来说，挖到一位打击率高达
三成五的选手肯定是件令人欣喜的事，除非是你必须被迫用一个打击率高达三成
八的球员去交换。
Because our roster is filled with .380 hitters, we have tried to pay
cash for acquisitions, and here our record has been far better. Starting
with National Indemnity in 1967, and continuing with, among others,
See's, Buffalo News, Scott Fetzer and GEICO, we have acquired -- for
cash -- a number of large businesses that have performed incredibly
well since we bought them. These acquisitions have delivered Berkshire
tremendous value -- indeed, far more than I anticipated when we made
our purchases.
正因为目前我们的球员名单已布满了打击率三成八的高手，所以我们总是希望尽
量用现金来进行购并，而事实证明我们的成绩远高于预期，从1967年的国家产
险开始，接着是喜斯糖果、水牛城新闻报、史考特飞兹以及盖可保险等等，这些
企业在我们用现金买下之后的表现再再令人激赏，它们也为Berkshire增添了无
数的价值，这实在是远高于我们当初的预期。
We believe that it is almost impossible for us to "trade up" from our
present businesses and managements. Our situation is the opposite of
Camelot's Mordred, of whom Guenevere commented, "The one thing I
can say for him is that he is bound to marry well. Everybody is above
him." Marrying well is extremely difficult for Berkshire.
我们相信实在是很难将我们现在拥有的事业与其经营阶层交换出去，我们现在的
处境与Camelot Mordred刚好相反，Guenevere说他一定可以找到理想的伴
侣，因为世上所有人的条件都比他还要好，但是对Berkshire来说，要找到足以
匹配的伴侣实在是难上加难。
So you can be sure that Charlie and I will be very reluctant to issue
shares in the future. In those cases when we simply must do so -- when
certain shareholders of a desirable acquiree insist on getting stock --
we will include an attractive cash option in order to tempt as many of
the sellers to take cash as is possible.
所以大家可以预见的是在未来查理跟我将会越来越不愿意以发行新股的方式进
行购并，要是遇到非如此不可的情况时，也就是被购并者坚持要拿股票的时候，
我们也会附带提供一个比较优渥的现金价格，以促使更多的股东选择领取现金。
Merging with public companies presents a special problem for us.
If we are to offer any premium to the acquiree, one of two conditions
must be present: Either our own stock must be overvalued relative to the
acquiree's, or the two companies together must be expected to earn
more than they would if operated separately. Historically, Berkshire has
seldom been overvalued. In this market, moreover, undervalued
acquirees are almost impossible to find. That other possibility --
synergy gains -- is usually unrealistic, since we expect acquirees to
operate after we've bought them just as they did before. Joining with
Berkshire does not normally raise their revenues nor cut their costs.
此外当我们购并已公开发行的公司还会遇到另一项问题，那就是如果我们提供被
购并者任何溢价的话，必须要能够符合以下两项条件其中之一，要嘛就是相对于
对方，Berkshire的股价被高估；要嘛就是两家公司合并后所赚得的利益高于两
家独立营运时的利益。关于这个问题，就过去的经验，Berkshire的股价很少被
高估，相对地以目前的市场状况，实在很难再找到其它股价相对被低估的公司，
至于另外一个可能性，也就是所谓的合并综效，通常都很不切实际，我们顶多能
期望被购并的事业在被买下之后的表现跟之前一样好就不错了，因为加入
Berkshire不代表营收就能够自动增加或成本就能够自动地减少。
Indeed, their reported costs (but not their true ones) will rise after
they are bought by Berkshire if the acquiree has been granting options
as part of its compensation packages. In these cases, "earnings" of the
acquiree have been overstated because they have followed the standard
-- but, in our view, dead wrong -- accounting practice of ignoring the
cost to a business of issuing options. When Berkshire acquires an
option-issuing company, we promptly substitute a cash compensation
plan having an economic value equivalent to that of the previous option
plan. The acquiree's true compensation cost is thereby brought out of
the closet and charged, as it should be, against earnings.
而其中还有一些以选择权充当薪资酬劳配套措施的公司，在我们买下之后，其帐
列成本往往会暴增(但并不会影响实际真实的成本)，事实上应该说是这些公司过
去的获利状况被高估，因为他们所采取的是在我们看来典型的，完全忽略发行选
择权潜藏企业成本的不当会计手法，也因此当Berkshire买下一家有发行选择权
的公司时，我们会立刻将之更换成以现金报酬为主，但却与原来认股权同样优惠
的奖励计画，如此一来，被购并的这家公司其实际的薪资酬劳成本方能摊开在阳
光底下，具体反应公司的获利状况。
The reasoning that Berkshire applies to the merger of public
companies should be the calculus for all buyers. Paying a takeover
premium does not make sense for any acquirer unless a) its stock is
overvalued relative to the acquiree's or b) the two enterprises will earn
more combined than they would separately. Predictably, acquirers
normally hew to the second argument because very few are willing to
acknowledge that their stock is overvalued. However, voracious buyers
-- the ones that issue shares as fast as they can print them -- are tacitly
conceding that point. (Often, also, they are running Wall Street's version
of a chain-letter scheme.)
Berkshire在购并公开公司所采用的原则也是所有买家必修的学分，买方没有理
由以溢价进行购并，除非在以下特殊的情况下，a)相对于被购并者，其股价被高
估，或者是b)两家原本独立的企业在合并之后所赚取的利润高于原先的总和，
而显而易见的买方通常会采取第一个理由，因为很少有公司会公开承认自己的股
价被高估，然而贪得无厌的买家，以比印钞票还快的速度印股票的这群人，最后
