1997 年致股东信

BERKSHIRE HATHAWAY INC.
1997 Chairman's Letter

伯克希尔·哈撒韦公司
1997 年董事长致股东信

To the Shareholders of Berkshire Hathaway Inc.:
Our gain in net worth during 1997 was $8.0 billion, which increased the per-share book value of both our Class A and Class B stock by 34.1%. Over the last 33 years (that is, since present management took over) per-share book value has grown from $19 to $25,488, a rate of 24.1% compounded annually.(1)

致伯克希尔·哈撒韦公司股东：
1997 年我们的净资产增加了 80 亿美元，这使得我们的 A 股和 B 股的每股账面价值增长了 34.1%。在过去 33 年里（即自现任管理层接管以来），每股账面价值从 19 美元增长到 25,488 美元，年复合增长率为 24.1%。(1)

(1) All figures used in this report apply to Berkshire's A shares, the successor to the only stock that the company had outstanding before 1996. The B shares have an economic interest equal to 1/30th that of the A.

(1) 本报告使用的所有数据均适用于伯克希尔的 A 股，它是公司 1996 年之前唯一流通股的继承者。B 股的经济权益相当于 A 股的 1/30。

Given our gain of 34.1%, it is tempting to declare victory and move on. But last year's performance was no great triumph: Any investor can chalk up large returns when stocks soar, as they did in 1997. In a bull market, one must avoid the error of the preening duck that quacks boastfully after a torrential rainstorm, thinking that its paddling skills have caused it to rise in the world. A right-thinking duck would instead compare its position after the downpour to that of the other ducks on the pond.

考虑到我们 34.1% 的涨幅，很容易宣告胜利并继续前进。但去年的业绩并非什么伟大的胜利：任何投资者都能在股票飙升时（正如 1997 年的情况）获得巨额回报。在牛市中，必须避免像一只自满的鸭子那样的错误：在暴雨过后自夸地嘎嘎叫，以为自己的划水技能让自己在世界上浮了起来。一只理智的鸭子反而会把自己在暴雨后的位置与池塘里其他鸭子进行比较。

So what's our duck rating for 1997? The table on the facing page shows that though we paddled furiously last year, passive ducks that simply invested in the S&P Index rose almost as fast as we did. Our appraisal of 1997's performance, then: Quack.

那么，我们 1997 年的鸭子评级是什么？对面页的表格显示，尽管我们去年猛烈划水，但仅仅是投资于标准普尔指数的被动鸭子几乎和我们一样快地上涨。因此，我们对 1997 年业绩的评估是：嘎嘎。

When the market booms, we tend to suffer in comparison with the S&P Index. The Index bears no tax costs, nor do mutual funds, since they pass through all tax liabilities to their owners. Last year, on the other hand, Berkshire paid or accrued $4.2 billion for federal income tax, or about 18% of our beginning net worth.

当市场繁荣时，与标准普尔指数相比，我们往往会吃亏。该指数不承担税收成本，共同基金也不承担，因为它们将所有税务责任转嫁给所有者。另一方面，伯克希尔去年支付或应计的联邦所得税为 42 亿美元，约占我们年初净资产的 18%。

Berkshire will always have corporate taxes to pay, which means it needs to overcome their drag in order to justify its existence. Obviously, Charlie Munger, Berkshire's Vice Chairman and my partner, and I won't be able to lick that handicap every year. But we expect over time to maintain a modest advantage over the Index, and that is the yardstick against which you should measure us. We will not ask you to adopt the philosophy of the Chicago Cubs fan who reacted to a string of lackluster seasons by saying, "Why get upset? Everyone has a bad century now and then."

伯克希尔总是要缴纳公司税，这意味着它需要克服税收的拖累来证明自己存在的合理性。显然，查理·芒格（伯克希尔副董事长兼我的合伙人）和我无法每年都战胜这一 handicap。但我们预计随着时间的推移，能够保持对指数的小幅优势，这就是你应当衡量我们的标尺。我们不会要求你采纳芝加哥小熊队球迷的哲学，他在一系列平淡无奇的赛季后说：“为什么要 upset？每个人都会时不时地有一个糟糕的世纪。”

Gains in book value are, of course, not the bottom line at Berkshire. What truly counts are gains in per-share intrinsic business value. Ordinarily, though, the two measures tend to move roughly in tandem, and in 1997 that was the case: Led by a blow-out performance at GEICO, Berkshire's intrinsic value (which far exceeds book value) grew at nearly the same pace as book value.

当然，账面价值的增长不是伯克希尔的底线。真正重要的是每股内在商业价值的增长。不过，通常情况下，这两个指标大致同步变动，1997 年就是如此：在 GEICO 出色业绩的带领下，伯克希尔的内在价值（远高于账面价值）以与账面价值几乎相同的速度增长。

For more explanation of the term, intrinsic value, you may wish to refer to our Owner's Manual, reprinted on pages 62 to 71. This manual sets forth our owner-related business principles, information that is important to all of Berkshire's shareholders.

关于“内在价值”这一术语的更多解释，你可以参阅我们的《所有者手册》， reprinted 在第 62 至 71 页。这本手册阐述了我们与所有者相关的经营原则，这些信息对伯克希尔的所有股东都很重要。

In our last two annual reports, we furnished you a table that Charlie and I believe is central to estimating Berkshire's intrinsic value. In the updated version of that table, which follows, we trace our two key components of value. The first column lists our per-share ownership of investments (including cash and equivalents) and the second column shows our per-share earnings from Berkshire's operating businesses before taxes and purchase-accounting adjustments (discussed on pages 69 and 70), but after all interest and corporate expenses. The second column excludes all dividends, interest and capital gains that we realized from the investments presented in the first column. In effect, the columns show what Berkshire would look like were it split into two parts, with one entity holding our investments and the other operating all of our businesses and bearing all corporate costs.

在过去的两年年报中，我们提供了一张表格，查理和我认为这对估算伯克希尔的内在价值至关重要。在下面更新的表格中，我们追溯了价值的两个关键组成部分。第一列列出了我们每股持有的投资（包括现金及等价物），第二列显示了伯克希尔运营业务在扣除所有利息和公司费用后、但在税和购买会计调整（第 69-70 页讨论）之前的每股收益。第二列排除了我们从第一列所示投资中实现的所有股息、利息和资本收益。实际上，这些列展示了如果伯克希尔被拆分为两部分——一个实体持有我们的投资，另一个实体运营我们所有的业务并承担所有公司成本——会是什么样子。

Pundits who ignore what our 38,000 employees contribute to the company, and instead simply view Berkshire as a de facto investment company, should study the figures in the second column. We made our first business acquisition in 1967, and since then our pre-tax operating earnings have grown from $1 million to $888 million. Furthermore, as noted, in this exercise we have assigned all of Berkshire's corporate expenses -- overhead of $6.6 million, interest of $66.9 million and shareholder contributions of $15.4 million -- to our business operations, even though a portion of these could just as well have been assigned to the investment side.

那些忽略我们 38,000 名员工对公司的贡献，而仅仅将伯克希尔视为事实上的投资公司的权威人士，应该研究第二列的数字。我们在 1967 年进行了第一次企业收购，从那时起，我们的税前营业收益从 100 万美元增长到 8.88 亿美元。此外，如前所述，在这个练习中，我们将伯克希尔的所有公司费用——660 万美元的管理费用、6,690 万美元的利息和 1,540 万美元的股东捐款——都分配给了我们的业务运营，尽管其中一部分本可以分配给投资方面。

Here are the growth rates of the two segments by decade:

以下是两个部分按十年的增长率：

During 1997, both parts of our business grew at a satisfactory rate, with investments increasing by $9,543 per share, or 33.5%, and operating earnings growing by $296.43 per share, or 70.3%. One important caveat: Because we were lucky in our super-cat insurance business (to be discussed later) and because GEICO's underwriting gain was well above what we can expect in most years, our 1997 operating earnings were much better than we anticipated and also more than we expect for 1998.

1997 年，我们业务的两个部分都以令人满意的速度增长，每股投资增加了 9,543 美元，增幅 33.5%，营业收益增长了 296.43 美元，增幅 70.3%。一个重要的 caveat：由于我们在超级巨灾保险业务中运气很好（稍后讨论），并且由于 GEICO 的承保收益远高于我们在大多数年份的预期，因此我们 1997 年的营业收益比我们预期的要好得多，也高于我们对 1998 年的预期。

Our rate of progress in both investments and operations is certain to fall in the future. For anyone deploying capital, nothing recedes like success. My own history makes the point: Back in 1951, when I was attending Ben Graham's class at Columbia, an idea giving me a $10,000 gain improved my investment performance for the year by a full 100 percentage points. Today, an idea producing a $500 million pre-tax profit for Berkshire adds one percentage point to our performance. It's no wonder that my annual results in the 1950s were better by nearly thirty percentage points than my annual gains in any subsequent decade. Charlie's experience was similar. We weren't smarter then, just smaller. At our present size, any performance superiority we achieve will be minor.

我们在投资和运营两方面的进展速度未来肯定会下降。对于任何配置资本的人来说，没有什么比成功更能退却的了。我自己的历史说明了这一点：早在 1951 年，当我在哥伦比亚大学参加本·格雷厄姆的课程时，一个为我带来 10,000 美元收益的想法使我的年度投资业绩整整提高了 100 个百分点。今天，一个为伯克希尔带来 5 亿美元税前利润的想法只能为我们的业绩增加一个百分点。难怪我 1950 年代的年度业绩比我此后任何一个十年的年度收益高出近三十个百分点。查理的经历也类似。那时我们并不更聪明，只是更小。以我们目前的规模，我们取得的任何业绩优势都将是微小的。

We will be helped, however, by the fact that the businesses to which we have already allocated capital -- both operating subsidiaries and companies in which we are passive investors -- have splendid long-term prospects. We are also blessed with a managerial corps that is unsurpassed in ability and focus. Most of these executives are wealthy and do not need the pay they receive from Berkshire to maintain their way of life. They are motivated by the joy of accomplishment, not by fame or fortune.

然而，我们将得到以下事实的帮助：我们已经配置资本的业务——无论是运营子公司还是我们作为被动投资者的公司——都有 splendid 的长期前景。我们还 blessed 拥有能力和专注力无与伦比的管理团队。这些高管中的大多数都很富有，不需要从伯克希尔获得的报酬来维持他们的生活方式。他们的动力来自成就的喜悦，而不是 fame 或 fortune。

Though we are delighted with what we own, we are not pleased with our prospects for committing incoming funds. Prices are high for both businesses and stocks. That does not mean that the prices of either will fall -- we have absolutely no view on that matter -- but it does mean that we get relatively little in prospective earnings when we commit fresh money.

尽管我们对所拥有的东西感到高兴，但对投入新资金的前景并不满意。企业和股票的价格都很高。这并不意味着两者的价格会下跌——我们对此 absolutely 没有看法——但这确实意味着，当我们投入新资金时，我们获得的预期收益相对较少。

Under these circumstances, we try to exert a Ted Williams kind of discipline. In his book The Science of Hitting, Ted explains that he carved the strike zone into 77 cells, each the size of a baseball. Swinging only at balls in his "best" cell, he knew, would allow him to bat .400; reaching for balls in his "worst" spot, the low outside corner of the strike zone, would reduce him to .230. In other words, waiting for the fat pitch would mean a trip to the Hall of Fame; swinging indiscriminately would mean a ticket to the minors.

在这种情况下，我们试图 exert 一种泰德·威廉姆斯式的纪律。在他的《击球的科学》一书中，泰德解释说，他把好球区划分为 77 个格子，每个格子像一个棒球大小。他知道，只挥击他“最佳”格子里的球，能让他击出 0.400 的安打率；伸手去打他最差位置（好球区外角低处）的球，会让他的安打率降到 0.230。换句话说，等待 fat pitch 意味着进入名人堂；不加选择地挥棒意味着拿到去小联盟的 ticket。

If they are in the strike zone at all, the business "pitches" we now see are just catching the lower outside corner. If we swing, we will be locked into low returns. But if we let all of today's balls go by, there can be no assurance that the next ones we see will be more to our liking. Perhaps the attractive prices of the past were the aberrations, not the full prices of today. Unlike Ted, we can't be called out if we resist three pitches that are barely in the strike zone; nevertheless, just standing there, day after day, with my bat on my shoulder is not my idea of fun.

如果它们根本就在好球区，我们现在看到的商业“投球”只是 catch 外角低处。如果我们挥棒，我们就会被锁定在低回报中。但如果我们让今天所有的球都过去，无法保证我们看到的下一个球会更合我们的口味。也许过去有吸引力的价格是反常现象，而不是今天的全价。与泰德不同，如果我们 resist 三颗勉强在好球区的球，我们不会被叫 out；然而，日复一日地站在那里，把球棒扛在肩上，不是我的 fun 理念。

When we can't find our favorite commitment -- a well-run and sensibly-priced business with fine economics -- we usually opt to put new money into very short-term instruments of the highest quality. Sometimes, however, we venture elsewhere. Obviously we believe that the alternative commitments we make are more likely to result in profit than loss. But we also realize that they do not offer the certainty of profit that exists in a wonderful business secured at an attractive price. Finding that kind of opportunity, we know that we are going to make money -- the only question being when. With alternative investments, we think that we are going to make money. But we also recognize that we will sometimes realize losses, occasionally of substantial size.

当我们找不到最喜欢的 commitment——一家经营良好、定价合理、经济特性优良的企业——我们通常会选择将新资金投入最高质量的短期工具。然而，有时我们也会 venture 到别处。显然，我们相信我们做出的替代性承诺更可能带来利润而非损失。但我们也意识到，它们不具备以有吸引力价格 secured 的优秀企业那种利润的确定性。找到那种机会，我们知道我们会赚钱——唯一的问题是何时。对于替代性投资，我们认为我们会赚钱。但我们也认识到，有时我们会 realize 损失，偶尔规模可观。

We had three non-traditional positions at yearend. The first was derivative contracts for 14.0 million barrels of oil, that being what was then left of a 45.7 million barrel position we established in 1994-95. Contracts for 31.7 million barrels were settled in 1995-97, and these supplied us with a pre-tax gain of about $61.9 million. Our remaining contracts expire during 1998 and 1999. In these, we had an unrealized gain of $11.6 million at yearend. Accounting rules require that commodity positions be carried at market value. Therefore, both our annual and quarterly financial statements reflect any unrealized gain or loss in these contracts. When we established our contracts, oil for future delivery seemed modestly underpriced. Today, though, we have no opinion as to its attractiveness.

我们在年底有三个非传统头寸。第一个是 1,400 万桶石油的衍生品合约，这是我们在 1994-95 年建立的 4,570 万桶头寸中剩下的部分。3,170 万桶的合约在 1995-97 年间结算，为我们带来了约 6,190 万美元的税前收益。我们剩余的合约在 1998 年和 1999 年到期。在这些合约中，我们在年底有 1,160 万美元的未实现收益。会计准则要求商品头寸按市值计价。因此，我们年报和季报都反映了这些合约的任何未实现损益。当我们建立合约时，未来交割的石油似乎 modestly 低估。不过，今天我们对它的吸引力没有看法。

Our second non-traditional commitment is in silver. Last year, we purchased 111.2 million ounces. Marked to market, that position produced a pre-tax gain of $97.4 million for us in 1997. In a way, this is a return to the past for me: Thirty years ago, I bought silver because I anticipated its demonetization by the U.S. Government. Ever since, I have followed the metal's fundamentals but not owned it. In recent years, bullion inventories have fallen materially, and last summer Charlie and I concluded that a higher price would be needed to establish equilibrium between supply and demand. Inflation expectations, it should be noted, play no part in our calculation of silver's value.

我们的第二个非传统 commitment 是白银。去年，我们购买了 1.112 亿盎司。按市值计算，该头寸在 1997 年为我们带来了 9,740 万美元的税前收益。在某种程度上，这对我来说是回到过去：三十年前，我购买白银是因为我预期美国政府会对其进行 demonetization。从那以后，我一直关注这种金属的基本面，但没有拥有它。近年来，金银库存大幅下降，去年夏天查理和我得出结论，需要更高的价格才能在供需之间建立 equilibrium。应该指出的是，通胀预期在我们计算白银价值时不起作用。

Finally, our largest non-traditional position at yearend was $4.6 billion, at amortized cost, of long-term zero-coupon obligations of the U.S. Treasury. These securities pay no interest. Instead, they provide their holders a return by way of the discount at which they are purchased, a characteristic that makes their market prices move rapidly when interest rates change. If rates rise, you lose heavily with zeros, and if rates fall, you make outsized gains. Since rates fell in 1997, we ended the year with an unrealized pre-tax gain of $598.8 million in our zeros. Because we carry the securities at market value, that gain is reflected in yearend book value.

最后，我们年底最大的非传统头寸是美国国债的长期零息债券，按摊余成本计算为 46 亿美元。这些证券不支付利息。相反，它们通过购买时的折扣为持有人提供回报，这种特性使得它们在利率变动时市场价格迅速变动。如果利率上升，你在零息债券上损失惨重；如果利率下降，你会获得 outsized 收益。由于 1997 年利率下降，我们年底在零息债券上获得了 5.988 亿美元的未实现税前收益。因为我们按市值计入证券，该收益反映在年底的账面价值中。

In purchasing zeros, rather than staying with cash-equivalents, we risk looking very foolish: A macro-based commitment such as this never has anything close to a 100% probability of being successful. However, you pay Charlie and me to use our best judgment -- not to avoid embarrassment -- and we will occasionally make an unconventional move when we believe the odds favor it. Try to think kindly of us when we blow one. Along with President Clinton, we will be feeling your pain: The Munger family has more than 90% of its net worth in Berkshire and the Buffetts more than 99%.

购买零息债券，而不是持有现金等价物，我们冒着看起来非常愚蠢的风险：像这样的基于宏观的 commitment 从来没有任何接近 100% 的成功概率。然而，你付钱给查理和我是要我们用最好的判断——而不是为了避免尴尬——当我们相信 odds 有利时，我们会偶尔做出非常规的举动。当我们搞砸时，请善意思考我们。与克林顿总统一样，我们会感受你的痛苦：芒格家族超过 90% 的净资产在伯克希尔，巴菲特家族超过 99%。

A short quiz: If you plan to eat hamburgers throughout your life and are not a cattle producer, should you wish for higher or lower prices for beef? Likewise, if you are going to buy a car from time to time but are not an auto manufacturer, should you prefer higher or lower car prices? These questions, of course, answer themselves.

一个小测验：如果你打算一辈子吃汉堡，而且不是养牛户，你应该希望牛肉价格更高还是更低？同样，如果你时不时要买车，但不是汽车制造商，你应该偏好更高的汽车价格还是更低？这些问题，当然，自己就能回答。

But now for the final exam: If you expect to be a net saver during the next five years, should you hope for a higher or lower stock market during that period? Many investors get this one wrong. Even though they are going to be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall. In effect, they rejoice because prices have risen for the "hamburgers" they will soon be buying. This reaction makes no sense. Only those who will be sellers of equities in the near future should be happy at seeing stocks rising. Prospective purchasers should much prefer sinking prices.

但现在进行期末考试：如果你预期在未来五年内是一个净储蓄者，你应该希望那段时间的股票市场更高还是更低？许多投资者把这个问题搞错了。尽管他们在未来许多年将成为股票的净买家，但他们在股价上涨时兴高采烈，在下跌时沮丧。实际上，他们高兴是因为他们即将购买的“汉堡”价格上涨了。这种反应毫无意义。只有那些在不久的将来会成为股票卖家的人，才应该高兴地看到股票上涨。潜在购买者应该更喜欢价格下跌。

For shareholders of Berkshire who do not expect to sell, the choice is even clearer. To begin with, our owners are automatically saving even if they spend every dime they personally earn: Berkshire "saves" for them by retaining all earnings, thereafter using these savings to purchase businesses and securities. Clearly, the more cheaply we make these buys, the more profitable our owners' indirect savings program will be.

对于不打算卖出的伯克希尔股东来说，选择甚至更清晰。首先，我们的所有者即使花掉自己赚的每一分钱，也在自动储蓄：伯克希尔通过保留所有收益为他们“储蓄”，然后用这些储蓄购买企业和证券。显然，我们购买得越便宜，我们所有者的间接储蓄计划就越有利可图。

Furthermore, through Berkshire you own major positions in companies that consistently repurchase their shares. The benefits that these programs supply us grow as prices fall: When stock prices are low, the funds that an investee spends on repurchases increase our ownership of that company by a greater amount than is the case when prices are higher. For example, the repurchases that Coca-Cola, The Washington Post and Wells Fargo made in past years at very low prices benefited Berkshire far more than do today's repurchases, made at loftier prices.

此外，通过伯克希尔，你持有那些持续回购自己股票的公司的主要头寸。这些计划为我们提供的好处随着价格下跌而增长：当股价低时，被投资公司在回购上花费的资金使我们对该公司的所有权增加的量，大于价格较高时的情况。例如，可口可乐、华盛顿邮报和富国银行在过去几年以非常低的价格进行的回购，使伯克希尔受益的程度远远超过今天以较高价格进行的回购。

At the end of every year, about 97% of Berkshire's shares are held by the same investors who owned them at the start of the year. That makes them savers. They should therefore rejoice when markets decline and allow both us and our investees to deploy funds more advantageously.

每年年底，伯克希尔约 97% 的股份由年初持有它们的同一批投资者持有。这使他们成为储蓄者。因此，他们应该在市场下跌时 rejoice，因为这让我们和我们的被投资公司能够更有利地部署资金。

So smile when you read a headline that says "Investors lose as market falls." Edit it in your mind to "Disinvestors lose as market falls -- but investors gain." Though writers often forget this truism, there is a buyer for every seller and what hurts one necessarily helps the other. (As they say in golf matches: "Every putt makes someone happy.")

所以，当你读到“投资者在市场下跌中亏损”的标题时，微笑吧。在脑海中将其编辑为“撤资者在市场下跌中亏损——但投资者 gain”。尽管作者们经常忘记这个 truism，但每个卖家都有一个买家，伤害一方的必然帮助另一方。（正如高尔夫比赛中所说：“每推一杆都会让某人高兴。”）

We gained enormously from the low prices placed on many equities and businesses in the 1970s and 1980s. Markets that then were hostile to investment transients were friendly to those taking up permanent residence. In recent years, the actions we took in those decades have been validated, but we have found few new opportunities. In its role as a corporate "saver," Berkshire continually looks for ways to sensibly deploy capital, but it may be some time before we find opportunities that get us truly excited.

我们从 1970 年代和 1980 年代许多股票和企业的低价中获得了 enormous 的收益。当时对投资 transient 不友好的市场，对那些占据 permanent residence 的人却 friendly。近年来，我们在那些年代采取的行动已被验证，但我们发现的新机会很少。作为公司的“储蓄者”，伯克希尔持续寻找合理配置资本的方法，但可能还需要一段时间才能找到真正让我们 excited 的机会。

What does excite us, however, is our insurance business. GEICO is flying, and we expect that it will continue to do so. Before we expound on that, though, let's discuss "float" and how to measure its cost. Unless you understand this subject, it will be impossible for you to make an informed judgment about Berkshire's intrinsic value.

然而，让我们 excited 的是我们的保险业务。GEICO 正在 flying，我们预计它会继续如此。不过，在我们详细阐述之前，先讨论一下“浮存金”以及如何衡量其成本。除非你理解这个主题，否则你不可能对伯克希尔的内在价值做出 informed 的判断。

To begin with, float is money we hold but don't own. In an insurance operation, float arises because premiums are received before losses are paid, an interval that sometimes extends over many years. During that time, the insurer invests the money. Typically, this pleasant activity carries with it a downside: The premiums that an insurer takes in usually do not cover the losses and expenses it eventually must pay. That leaves it running an "underwriting loss," which is the cost of float. An insurance business has value if its cost of float over time is less than the cost the company would otherwise incur to obtain funds. But the business is a lemon if its cost of float is higher than market rates for money.

首先，浮存金是我们持有但不拥有的钱。在保险业务中，浮存金产生的原因是保费在损失赔付之前收到，这个间隔有时长达多年。在此期间，保险公司将资金进行投资。通常，这种令人愉快的活动伴随着一个 downside：保险公司收取的保费通常无法覆盖其最终必须支付的损失和费用。这就导致了“承保亏损”，即浮存金的成本。如果一家保险公司的浮存金成本随着时间的推移低于公司以其他方式获取资金的成本，那么该业务就有价值。但如果其浮存金成本高于市场利率，那么该业务就是个 lemon。

A caution is appropriate here: Because loss costs must be estimated, insurers have enormous latitude in figuring their underwriting results, and that makes it very difficult for investors to calculate a company's true cost of float. Estimating errors, usually innocent but sometimes not, can be huge. The consequences of these miscalculations flow directly into earnings. An experienced observer can usually detect large-scale errors in reserving, but the general public can typically do no more than accept what's presented, and at times I have been amazed by the numbers that big-name auditors have implicitly blessed. As for Berkshire, Charlie and I attempt to be conservative in presenting its underwriting results to you, because we have found that virtually all surprises in insurance are unpleasant ones.

这里需要提醒：由于损失成本必须估算，保险公司在计算承保结果时有很大的自由度，这使得投资者很难计算一家公司真实的浮存金成本。估算错误——通常是无意的，但有时不是——可能非常巨大。这些错误计算的后果直接流入收益。有经验的观察者通常能发现准备金方面的大规模错误，但普通公众通常只能接受所呈现的内容，有时我对大牌审计师隐含认可的数字感到惊讶。至于伯克希尔，查理和我在向你呈现承保结果时力求保守，因为我们发现保险业几乎所有的 surprise 都是令人不快的。

As the numbers in the following table show, Berkshire's insurance business has been a huge winner. For the table, we have calculated our float -- which we generate in large amounts relative to our premium volume -- by adding net loss reserves, loss adjustment reserves, funds held under reinsurance assumed and unearned premium reserves, and then subtracting agents' balances, prepaid acquisition costs, prepaid taxes and deferred charges applicable to assumed reinsurance. Our cost of float is determined by our underwriting loss or profit. In those years when we have had an underwriting profit, such as the last five, our cost of float has been negative. In effect, we have been paid for holding money.

如下表数字所示，伯克希尔的保险业务一直是一个巨大的赢家。对于该表，我们通过加总净损失准备金、损失调整准备金、分保业务持有的资金和未赚保费准备金，再减去代理人余额、预付 acquisition 成本、预付税款和适用于分保业务的递延费用，来计算我们的浮存金——相对于保费规模，我们产生了大量的浮存金。我们的浮存金成本由我们的承保损失或利润决定。在那些我们有承保利润的年份（例如过去五年），我们的浮存金成本为负。实际上，我们持有 money 还能获得报酬。

Since 1967, when we entered the insurance business, our float has grown at an annual compounded rate of 21.7%. Better yet, it has cost us nothing, and in fact has made us money. Therein lies an accounting irony: Though our float is shown on our balance sheet as a liability, it has had a value to Berkshire greater than an equal amount of net worth would have had.

自 1967 年我们进入保险业务以来，我们的浮存金以年复合增长率 21.7% 增长。更好的是，它没有花费我们任何成本，事实上还为我们赚了钱。这其中存在一个会计上的讽刺：尽管我们的浮存金在资产负债表上显示为负债，但它对伯克希尔的价值大于同等金额的净资产。

The expiration of several large contracts will cause our float to decline during the first quarter of 1998, but we expect it to grow substantially over the long term. We also believe that our cost of float will continue to be highly favorable.

几份大合同的到期将导致我们的浮存金在 1998 年第一季度下降，但我们预计长期内它 will 大幅增长。我们也相信我们的浮存金成本将继续 highly favorable。

Occasionally, however, the cost of our float will spike severely. That will occur because of our heavy involvement in the super-cat business, which by its nature is the most volatile of all insurance lines. In this operation, we sell policies that insurance and reinsurance companies purchase in order to limit their losses when mega-catastrophes strike. Berkshire is the preferred market for sophisticated buyers: When the "big one" hits, the financial strength of super-cat writers will be tested, and Berkshire has no peer in this respect.

然而，偶尔我们的浮存金成本会 severely 飙升。这将发生因为我们 heavily 参与超级巨灾业务，就其性质而言，这是所有保险业务中最不稳定的。在此业务中，我们出售保单给保险公司和再保险公司，以便在 mega-catastrophes 发生时限制其损失。伯克希尔是 sophisticated 买家的首选市场：当“big one”来袭时，超级巨灾承保人的财务实力将受到考验，而伯克希尔在这方面 no peer。

Since truly major catastrophes are rare occurrences, our super-cat business can be expected to show large profits in most years -- and to record a huge loss occasionally. In other words, the attractiveness of our super-cat business will take a great many years to measure. What you must understand, however, is that a truly terrible year in the super-cat business is not a possibility -- it's a certainty. The only question is when it will come.

由于真正的大灾难很少发生，我们的超级巨灾业务在大多数年份预计会显示出 large profits——偶尔会 record 巨额损失。换句话说，我们超级巨灾业务的吸引力需要很多年才能衡量。然而，你必须理解的是，超级巨灾业务真正糟糕的年份不是一种可能性——而是一种 certainty。唯一的问题是它何时到来。

Last year, we were very lucky in our super-cat operation. The world suffered no catastrophes that caused huge amounts of insured damage, so virtually all premiums that we received dropped to the bottom line. This pleasant result has a dark side, however. Many investors who are "innocents" -- meaning that they rely on representations of salespeople rather than on underwriting knowledge of their own -- have come into the reinsurance business by means of purchasing pieces of paper that are called "catastrophe bonds." The second word in this term, though, is an Orwellian misnomer: A true bond obliges the issuer to pay; these bonds, in effect, are contracts that lay a provisional promise to pay on the purchaser.

去年，我们在超级巨灾业务中非常 lucky。世界上没有发生造成巨额保险损失的 catastrophes，因此我们收到的几乎所有保费都落到了底线。然而，这个令人愉快的结果有一个 dark side。许多“innocents”投资者——意思是他们依赖销售人员的陈述而不是自己的承保知识——通过购买被称为“巨灾债券”的纸张进入了再保险业务。然而，这个术语中的第二个词是 Orwellian 的 misnomer：真正的债券 obliges 发行人支付；这些债券实际上是将 provisional 的支付承诺 laid 在购买者身上的合同。

This convoluted arrangement came into being because the promoters of the contracts wished to circumvent laws that prohibit the writing of insurance by entities that haven't been licensed by the state. A side benefit for the promoters is that calling the insurance contract a "bond" may also cause unsophisticated buyers to assume that these instruments involve far less risk than is actually the case.

这种 convoluted 的安排之所以产生，是因为合同的 promoters 希望规避禁止未经州许可的实体承保保险的法律。对 promoters 来说，一个 side benefit 是，将保险合同称为“债券”也可能导致 unsophisticated 买家假设这些工具涉及的风险远小于实际情况。

Truly outsized risks will exist in these contracts if they are not properly priced. A pernicious aspect of catastrophe insurance, however, makes it likely that mispricing, even of a severe variety, will not be discovered for a very long time. Consider, for example, the odds of throwing a 12 with a pair of dice -- 1 out of 36. Now assume that the dice will be thrown once a year; that you, the "bond-buyer," agree to pay $50 million if a 12 appears; and that for "insuring" this risk you take in an annual "premium" of $1 million. That would mean you had significantly underpriced the risk. Nevertheless, you could go along for years thinking you were making money -- indeed, easy money. There is actually a 75.4% probability that you would go for a decade without paying out a dime. Eventually, however, you would go broke.

如果这些合同定价不当，将会存在 truly outsized 的风险。然而，巨灾保险的一个 pernicious 方面使得错误定价，即使是严重的错误定价，很可能在很长一段时间内不会被发现。例如，考虑掷一对骰子掷出 12 点的几率——1/36。现在假设骰子每年掷一次；你，作为“债券买家”，同意如果出现 12 点就支付 5000 万美元；并且为了“保险”这个风险，你收取每年 100 万美元的“保费”。那意味着你 significantly 低估了风险。然而，你可以连续多年认为自己在赚钱——实际上，轻松赚钱。实际上，你有 75.4% 的概率在十年内无需支付一分钱。但最终，你会破产。

In this dice example, the odds are easy to figure. Calculations involving monster hurricanes and earthquakes are necessarily much fuzzier, and the best we can do at Berkshire is to estimate a range of probabilities for such events. The lack of precise data, coupled with the rarity of such catastrophes, plays into the hands of promoters, who typically employ an "expert" to advise the potential bond-buyer about the probability of losses. The expert puts no money on the table. Instead, he receives an up-front payment that is forever his no matter how inaccurate his predictions. Surprise: When the stakes are high, an expert can invariably be found who will affirm -- to return to our example -- that the chance of rolling a 12 is not 1 in 36, but more like 1 in 100. (In fairness, we should add that the expert will probably believe that his odds are correct, a fact that makes him less reprehensible -- but more dangerous.)

在这个骰子例子中，odds 很容易计算。涉及 monster 飓风和地震的计算必然要模糊得多，我们在伯克希尔能做的最好事情就是估计这类事件的一个概率范围。缺乏精确数据，加上这类 catastrophes 的罕见，落入了 promoters 的手中，他们通常雇佣一名“专家”就损失概率向潜在的债券买家提供建议。专家不 put 任何钱在桌子上。相反，他收到一笔 up-front payment，无论他的预测多么不准确，这笔钱永远是他的。Surprise：当 stakes 很高时，总能找到一位专家 affirm——回到我们的例子——掷出 12 点的机会不是 1/36，而更像是 1/100。（公平地说，我们应该补充说，专家可能认为他的 odds 是正确的，这一事实使他 less reprehensible——但更 dangerous。）

The influx of "investor" money into catastrophe bonds -- which may well live up to their name -- has caused super-cat prices to deteriorate materially. Therefore, we will write less business in 1998. We have some large multi-year contracts in force, however, that will mitigate the drop. The largest of these are two policies that we described in last year's report -- one covering hurricanes in Florida and the other, signed with the California Earthquake Authority, covering earthquakes in that state. Our "worst-case" loss remains about $600 million after-tax, the maximum we could lose under the CEA policy. Though this loss potential may sound large, it is only about 1% of Berkshire's market value. Indeed, if we could get appropriate prices, we would be willing to significantly increase our "worst-case" exposure.

“投资者”资金涌入巨灾债券——很可能名副其实——已经导致超级巨灾价格 materially 恶化。因此，我们将在 1998 年减少业务量。然而，我们有一些生效的大额多年期合同，将缓解下降幅度。其中最大的是我们在去年报告中描述的两份保单——一份覆盖佛罗里达州的飓风，另一份与加州地震局签约，覆盖该州的地震。我们的“worst-case”损失仍然是税后约 6 亿美元，这是我们在 CEA 保单下可能损失的最大值。尽管这个损失 potential 听起来很大，但仅占伯克希尔市值的 1% 左右。事实上，如果我们能获得合适的价格，我们愿意 significantly 增加我们的“worst-case” exposure。

Our super-cat business was developed from scratch by Ajit Jain, who has contributed to Berkshire's success in a variety of other ways as well. Ajit possesses both the discipline to walk away from business that is inadequately priced and the imagination to then find other opportunities. Quite simply, he is one of Berkshire's major assets. Ajit would have been a star in whatever career he chose; fortunately for us, he enjoys insurance.

我们的超级巨灾业务是由 Ajit Jain 从零开始开发的，他还以其他各种方式为伯克希尔的成功做出了贡献。Ajit 既有 discipline 从定价不足的业务中走开，又有 imagination 从而找到其他机会。简而言之，他是伯克希尔的主要资产之一。无论 Ajit 选择什么职业，他都会成为明星；对我们来说幸运的是，他喜欢保险。

Last year I wrote about GEICO's Tony Nicely and his terrific management skills. If I had known then what he had in store for us in 1997, I would have searched for still greater superlatives. Tony, now 54, has been with GEICO for 36 years and last year was his best. As CEO, he has transmitted vision, energy and enthusiasm to all members of the GEICO family -- raising their sights from what has been achieved to what can be achieved.

去年我写过 GEICO 的 Tony Nicely 和他 terrific 的管理技能。如果我当时知道他在 1997 年为我们准备了什么，我会寻找更伟大的 superlatives。Tony 现年 54 岁，已在 GEICO 工作 36 年，去年是他最好的一年。作为 CEO，他将 vision、能量和热情传递给了 GEICO 家族的所有成员——将他们的目光从已经取得的成就提升到可以取得的成就。

We measure GEICO's performance by first, the net increase in its voluntary auto policies (that is, not including policies assigned us by the state) and, second, the profitability of "seasoned" auto business, meaning policies that have been with us for more than a year and are thus past the period in which acquisition costs cause them to be money-losers. In 1996, in-force business grew 10%, and I told you how pleased I was, since that rate was well above anything we had seen in two decades. Then, in 1997, growth jumped to 16%.

我们衡量 GEICO 的业绩，首先看自愿汽车保单的净增长（即不包括州分配给我们的保单），其次看“成熟”汽车业务的盈利能力，即投保超过一年的保单，因此已过了 acquisition 成本使其成为 money-losers 的时期。1996 年，有效业务增长了 10%，我告诉你我有多高兴，因为那 rate 远高于我们二十年来所见过的任何水平。然后，在 1997 年，增长跃升至 16%。

Below are the new business and in-force figures for the last five years:

以下是过去五年的新业务和有效保单数据：

Of course, any insurer can grow rapidly if it gets careless about underwriting. GEICO's underwriting profit for the year, though, was 8.1% of premiums, far above its average. Indeed, that percentage was higher than we wish it to be: Our goal is to pass on most of the benefits of our low-cost operation to our customers, holding ourselves to about 4% in underwriting profit. With that in mind, we reduced our average rates a bit during 1997 and may well cut them again this year. Our rate changes varied, of course, depending on the policyholder and where he lives; we strive to charge a rate that properly reflects the loss expectancy of each driver.

当然，任何保险公司如果在承保上 careless，都可以快速增长。然而，GEICO 今年的承保利润是保费的 8.1%，远高于其平均水平。事实上，这个百分比高于我们希望的：我们的目标是将我们低成本运营的大部分好处传递给客户，将我们的承保利润保持在 4% 左右。考虑到这一点，我们在 1997 年期间稍微降低了平均费率，今年很可能再次降低。当然，我们的费率变化因保单持有人及其居住地而异；我们 strive 收取适当反映每位驾驶员预期损失的费率。

GEICO is not the only auto insurer obtaining favorable results these days. Last year, the industry recorded profits that were far better than it anticipated or can sustain. Intensified competition will soon squeeze 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.

GEICO 并不是最近唯一获得 favorable 结果的汽车保险公司。去年，该行业录得的利润远好于其预期或能够持续的水平。加剧的竞争将很快 significantly 挤压利润率。但这是我们欢迎的发展：长期来看， tough 的市场有助于低成本运营商，这正是我们的身份，也是我们打算保持的。

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.

去年我告诉你，GEICO 的同事获得了创纪录的 16.9% 的利润分享 contribution，并解释了两个简单的变量决定了这个数额：保单增长和成熟业务的盈利能力。我进一步解释说，1996 年的业绩如此 extraordinary，以至于我们不得不扩大 delineating 可能 payout 的图表。新的 configuration 没能撑过 1997 年：我们再次扩大了图表的边界，并奖励我们 10,500 名同事相当于其基本薪酬 26.9% 的利润分享 contribution，即 7,100 万美元。此外，同样的两个变量——保单增长和成熟业务的盈利能力——决定了我们支付给几十位高管（从 Tony 开始）的现金奖金。

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 GEICO，我们以一种对所有者和管理者都有意义的方式支付薪酬。我们分发 merit badges，而不是彩票：在伯克希尔的任何子公司中，我们都不将薪酬与我们的股价挂钩，我们的同事无法以任何有意义的方式影响股价。相反，我们将奖金与每个单位的业务业绩挂钩，这是该单位员工的直接产品。当业绩 terrific 时——就像 GEICO 那样——没有什么比开出一张大额支票更让查理和我享受的了。

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.

GEICO 的承保盈利能力可能在 1998 年下降，但公司的增长可能会加速。我们正计划 step on the gas：GEICO 今年的营销支出将超过 1 亿美元，比 1997 年增长 50%。我们今天的市场份额只有 3%，这个渗透率应该会在未来十年 dramatically 增加。汽车保险行业巨大——年业务量约为 1,150 亿美元——还有数以千万计的驾驶员可以通过转向我们节省 substantial money。

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 年的报告中，我描述了你我欠 Lorimer Davidson 的 enormous debt。1951 年初的一个周六，他耐心地向我——一个 20 岁、不请自来、未预约就到达 GEICO 总部的陌生人——解释了 GEICO 及其行业的 ins and outs。Davy 后来成为公司的 CEO，并且在 47 年里一直是我的朋友和老师。如果没有他的慷慨和智慧，GEICO 给伯克希尔带来的巨大回报就不会 materialized。事实上，如果我没有遇到 Davy，我可能永远不会成长到理解整个保险领域，而多年来保险在伯克希尔的成功中扮演了如此关键的角色。

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 去年满 95 岁，旅行对他来说很困难。尽管如此，Tony 和我希望我们能说服他参加我们的年会，以便我们的股东能够 properly 感谢他对伯克希尔的重要贡献。祝我们好运。

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.

尽管它们当然远小于 GEICO，但我们其他的 primary 保险业务去年的业绩——总体而言——完全同样 stunning。National Indemnity 的传统业务承保利润为 32.9%，并且像往常一样，相对于保费规模产生了大量浮存金。在过去三年中，由 Don Wurster 运营的这部分业务利润率达到 24.3%。我们的 homestate 业务，由 Rod Eldred 管理，录得 14.1% 的承保利润，尽管它继续 absorb 地理扩张的费用。Rod 的三年记录是 amazing 的 15.1%。伯克希尔的工人 compensation 业务，由 Brad Kinstler 在加州运营，在困难的环境中出现了 modest 的承保亏损；其三年承保记录为正 1.5%。Central States Indemnity 的 John Kizer 在创造良好承保收益的同时创下了新的业务量记录。在 Kansas Bankers Surety，Don Towle 不仅仅 lived up to 我们在 1996 年收购该公司时的高期望。

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.

总体而言，这五项业务录得了 15.0% 的承保利润。两位 Don，以及 Rod、Brad 和 John，为伯克希尔创造了 significant 价值，我们相信未来还有更多。

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.

下表显示了伯克希尔报告收益的主要来源。在此列报中，购买会计调整不分配到具体适用的业务，而是汇总并单独列示。此程序让你能够看到我们业务的收益，就像我们没有购买它们时报告的那样。基于第 69-70 页讨论的原因，我们认为这种列报方式比使用公认会计原则（GAAP）——要求购买溢价按业务逐个冲销——对投资者和经理人更有用。当然，我们在表中显示的总收益与我们经审计财务报表中的 GAAP 总额相同。

(in millions)

（单位：百万美元）

(1) From date of acquisition, December 23, 1996.
(2) Includes Star Furniture from July 1, 1997.
(3) Excludes interest expense of Finance Businesses.

(1) 自收购日 1996 年 12 月 23 日起。
(2) 包括自 1997 年 7 月 1 日起的 Star Furniture。
(3) 不包括金融业务的利息费用。

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.

总体而言，我们的运营业务继续表现 exceptionally 好，远超出其行业 norm。我们特别高兴的是，Helzberg 的利润在令人失望的 1996 年之后有所改善。Helzberg 的 CEO Jeff Comment 在 1997 年初采取了 decisive 措施，使公司在关键的圣诞季节获得了真正的 momentum。今年年初，销售也保持强劲。

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.

不经意的观察者可能不会 appreciates 我们许多业务的业绩有多么 extraordinary：如果将布法罗新闻报或 Scott Fetzer 的盈利历史与其上市公司同行的记录进行比较，它们的表现可能看起来 unexceptional。但大多数上市公司保留三分之二或更多的收益来为其公司增长提供资金。相比之下，这些伯克希尔子公司将其 100% 的收益支付给我们，即它们的母公司，以为我们的增长提供资金。

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.

实际上，上市公司的记录反映了它们 retained 的收益的累积 benefits，而我们的运营子公司的记录没有得到这样的 boost。然而，随着时间的推移，这些子公司分配出去的收益在伯克希尔的其他地方创造了 truly huge 的 earning power。仅新闻报、See's 和 Scott Fetzer 就向我们支付了 18 亿美元，我们将其 gainfully employed 在别处。我们对它们的 management 的感激之情远远超过表中详细列出的收益。

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.

关于我们各项业务的更多信息在第 36-50 页，你也可以在那里找到我们按 GAAP 报告的部门收益。此外，在第 55-61 页，我们将伯克希尔的财务数据按照非 GAAP 基础重新排列为四个部门，这种列报方式与查理和我思考公司的方式一致。我们的意图是为你提供财务信息，如果我们的位置互换，我们会希望你提供给我们的信息。

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?

报告的收益是衡量伯克希尔经济进展的一个 poor measure，部分原因前面表格中显示的数字只包括我们从被投资公司收到的股息——尽管这些股息通常仅代表归因于我们所有权的收益的一小部分。并不是我们介意这种 money 的划分，因为总的来说，我们认为被投资公司的未分配收益对我们来说比支付的部分更有价值。原因很简单：我们的被投资公司 often 有机会以高回报率 reinvest 收益。那么我们为什么希望它们被支付出来呢？

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.

然而，为了描绘比报告收益更接近伯克希尔经济 reality 的情况，我们采用了“透视”收益的概念。我们计算这些收益时，它们包括：(1) 上一节报告的营业收益，加上；(2) 我们在主要被投资公司保留的营业收益中所占的份额（根据 GAAP 会计，这些未反映在我们的利润中），减去；(3) 如果这些被投资公司的保留收益分配给我们，伯克希尔将支付的税款 allowance。在此处 tabulating“营业收益”时，我们排除了购买会计调整以及资本利得和其他主要的非经常性项目。

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.")

下表列出了我们 1997 年的透视收益，不过我警告你，这些数字只能是近似值，因为它们基于许多判断。（这些被投资公司支付给我们的股息已包含在第 11 页分项列出的营业收益中，主要是在“保险集团：净投资收益”项下。）

(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

(1) 不包括可分配给少数股东权益的股份
(2) 按年度平均持股计算
(3) 使用的税率为 14%，即伯克希尔对收到的股息支付的税率

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，我们同意收购 Star Furniture 和 International Dairy Queen（交易于 1998 年初完成）。两家企业都完全符合我们的标准：它们是可理解的；拥有 excellent 的经济特性；由 outstanding 的人运营。

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.

Star 交易有一个有趣的历史。每当我们进入一个我不了解其主要参与者的行业时，我总是问我们的新合作伙伴：“家里还有像你这样的人吗？”因此，在 1983 年收购内布拉斯加家具 mart 时，Blumkin 家族告诉我全国其他地区的三家 outstanding 家具零售商。然而，当时没有一家出售。

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，Irv Blumkin 了解到 R.C. Willey 的 CEO Bill Child——推荐的三家之一——可能对合并感兴趣，我们 promptly 达成了 1995 年报告中描述的交易。我们对该合作感到 delighted——Bill 是完美的合作伙伴。此外，当我们向 Bill 询问行业杰出者时，他想起了 Blumkins 给我的另外两个名字，其中之一是休斯顿的 Star Furniture。但时间过去了，没有任何迹象表明这两家中的任何一家 available。

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.

然而，在去年年会前的周四，所罗门的 Bob Denham 告诉我，Star 的长期控股股东兼 CEO Melvyn Wolff 想谈谈。应我们邀请，Melvyn 来参加了会议，并在奥马哈确认了他对伯克希尔的积极感觉。与此同时，我查看了 Star 的财务数据，并喜欢我所看到的。

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 和我在纽约见面，并在一个两小时的 session 中达成了交易。与 Blumkins 和 Bill Child 的情况一样，我无需检查租约、制定雇佣合同等。我知道我在与一个正直的人打交道，这才是重要的。

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.

尽管 Wolff 家族与 Star 的渊源可以追溯到 1924 年，但该业务一直在 struggle，直到 Melvyn 和他的妹妹 Shirley Toomin 于 1962 年接手。如今 Star 经营着 12 家门店——休斯顿 10 家，奥斯汀和布莱恩各一家——并且很快也将进入圣安东尼奥。如果十年后 Star 的规模是现在的许多倍，我们不会感到惊讶。

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.

这里有一个故事说明 Melvyn 和 Shirley 是什么样的人：当他们告诉同事出售的消息时，他们还宣布 Star 将向那些帮助过他们成功的人做出 large, special 的支付——然后将该群体定义为 business 中的每个人。根据我们交易的条款，为这笔分配提供资金的是 Melvyn 和 Shirley 的钱，而不是我们的。当查理和我与这样行事的人成为合作伙伴时，我们 love it。

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.

Star 交易于 7 月 1 日完成。此后的几个月里，我们看到 Star 本已优秀的销售和盈利增长进一步加速。Melvyn 和 Shirley 将参加年会，我希望你有机会见到他们。

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.

下一个收购：International Dairy Queen。在 23 个国家有 5,792 家 Dairy Queen 门店在运营——除少数外，全部由加盟商经营——此外，IDQ 还特许经营了 409 家 Orange Julius 和 43 家 Karmelkorn。在 190 个地点，“treat centers”提供这三种产品的某种组合。

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.

多年来，IDQ 的历史坎坷。然后，在 1970 年，由 John Mooty 和 Rudy Luther 领导的明尼阿波利斯集团取得了 control。新的管理者 inherite 了一堆混乱的特许经营协议，以及一些不明智的融资安排，这些使公司处于 precarious 状态。在随后的几年里，管理层使运营合理化，将食品服务扩展到更多地点，并且总体而言建立了一个强大的组织。

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 先生去世，这意味着他的 estate 需要出售股票。一年前，William Blair & Co. 的 Dick Kiphart 将 John Mooty 和 IDQ 的 CEO Mike Sullivan 介绍给我，我对两人都印象深刻。因此，当我们有机会与 IDQ 合并时，我们提出了一个以 FlightSafety 收购为模式的 proposition，给予出售股东选择现金或 immediate 价值略低的伯克希尔股票的权利。通过像我们这样倾斜对价，我们鼓励持有人选择现金，这是迄今为止我们更偏好的支付类型。即使如此，也只有 45% 的 IDQ 股份选择了现金。

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.

查理和我为这笔交易带来了 modest 的产品 expertise：几十年来，他一直是明尼苏达州 Cass Lake 和 Bemidji 的 Dairy Queen 的顾客，而我一直是奥马哈的常客。我们已经 put our money where our mouth is。

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.

我已经提到过，我们 strongly 倾向于在收购中使用现金而非伯克希尔股票。研究记录会告诉你原因：如果你汇总我们所有的纯股票合并（不包括我们与两家关联公司 Diversified Retailing 和 Blue Chip Stamps 进行的交易），你会发现我们的股东的状况比我不做这些交易略微 worse off。尽管说这话很 hurt me，但当我发行股票时，我让你损失了 money。

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.

要 clear 一件事：这种成本的发生不是因为我们在任何方面被卖方误导，也不是因为他们此后未能以 diligence 和 skill 进行管理。相反，在我们谈判交易时，卖方完全 candid，并且自那以后一直充满活力和有效。

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.

相反，我们的问题在于我们拥有一个 truly marvelous 的企业组合，这意味着用其中一部分来换取新东西几乎从来没有意义。当我们在合并中发行股票时，我们减少了你在我们所有业务中的所有权——包括部分持有的公司如可口可乐、吉列和美国运通，以及我们所有 terrific 的运营公司。体育界的一个例子将说明我们面临的困难：对于一支棒球队来说，获得一名预期击球率为 0.350 的球员几乎总是一件 wonderful 的事情——除非球队必须交易掉一名 0.380 的击球手来达成交易。

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.

因为我们的阵容 filled with 0.380 击球手，所以我们一直试图用现金进行收购，在这方面我们的记录要 far better。从 1967 年的 National Indemnity 开始，再到 See's、布法罗新闻报、Scott Fetzer 和 GEICO 等，我们用现金收购了许多大型企业，自我们收购以来，这些企业表现得 incredibly 好。这些收购为伯克希尔带来了 tremendous 价值——实际上，远远超过我在收购时的预期。

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，要从我们目前的业务和管理层“trade up”几乎是不可能的。我们的情况与 Camelot 的 Mordred 相反，Guenevere 评论他：“我对他唯一能说的是，他注定要嫁得好。每个人都比他强。”对伯克希尔来说，嫁得好是 extremely difficult 的。

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.

所以你可以确认，查理和我将来会 very reluctant 发行股票。在那些我们 simply must 这样做的情况下——当一家 desirable 被收购公司的某些股东 insist 要股票时——我们将包括一个 attractive 的现金选择权，以诱惑尽可能多的卖家接受现金。

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.

与上市公司合并对我们来说提出了一个特殊问题。如果我们要向被收购公司提供任何溢价，必须存在两个条件之一：要么我们自己的股票相对于被收购公司的被高估，要么两家公司合并后的预期收益必须高于分开运营的收益。历史上，伯克希尔很少被高估。此外，在这个市场上，被低估的被收购公司几乎不可能找到。另一种可能性——协同效应增益——通常是不现实的，因为我们期望被收购公司在被我们收购后像以前一样运营。与伯克希尔结合通常不会增加它们的收入或削减其成本。

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.

事实上，如果被收购公司在薪酬 package 中一直授予期权，那么它们在被伯克希尔收购后的报告成本（但不是真实成本）将会上升。在这些情况下，被收购公司的“收益”被高估了，因为它们遵循了标准——但用我们的观点看，完全错误——的会计实践，即忽略企业发行期权的成本。当伯克希尔收购一家发行期权的公司时，我们 promptly 用经济价值等于先前期权计划的现金薪酬计划替代。被收购公司的真实补偿成本 thus 被带出 closet，并按规定计入收益。

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.)

伯克希尔应用于上市公司合并的 reasoning 应该成为所有买家的 calculus。支付收购溢价对任何 acquirer 来说都没有意义，除非 a) 其股票相对于被收购公司的被高估，或者 b) 两家企业合并后的收益高于分开运营。可以预见，acquirer 通常会 hew 到第二个论点，因为很少有人愿意承认自己的股票被高估。然而，voracious 买家——那些尽可能快地发行股票的人——正在 tacitly 承认这一点。（通常，他们也在运行华尔街版本的 chain-letter scheme。）

In some mergers there truly are major synergies -- though oftentimes the acquirer pays too much to obtain them -- but at other times the cost and revenue benefits that are projected prove illusory. Of one thing, however, be certain: If a CEO is enthused about a particularly foolish acquisition, both his internal staff and his outside advisors will come up with whatever projections are needed to justify his stance. Only in fairy tales are emperors told that they are naked.

在某些合并中确实存在 major 的协同效应——尽管 oftentimes acquirer 支付太多来获得它们——但在其他时候，projected 的成本和收入 benefits 被证明是 illusory。然而，有一件事是确定的：如果一位 CEO 对一项特别愚蠢的收购感到 enthused，他的内部员工和外部顾问都会提出任何必要的 projections 来证明他的 stance 是合理的。只有在童话故事里，皇帝才会被告知他是 naked 的。

Below we present our common stock investments. Those with a market value of more than $750 million are itemized.

以下是我们普通股投资的情况。市值超过 7.5 亿美元的投资会逐项列出。

12/31/97

1997 年 12 月 31 日

• Represents tax-basis cost which, in aggregate, is $1.8 billion less than GAAP cost.

• 代表税基成本，总计比 GAAP 成本低 18 亿美元。

We made net sales during the year that amounted to about 5% of our beginning portfolio. In these, we significantly reduced a few of our holdings that are below the $750 million threshold for itemization, and we also modestly trimmed a few of the larger positions that we detail. Some of the sales we made during 1997 were aimed at changing our bond-stock ratio moderately in response to the relative values that we saw in each market, a realignment we have continued in 1998.

我们在年内进行了净卖出，约为期初投资组合的 5%。在这些操作中，我们 significantly 减少了一些低于 7.5 亿美元逐项列出门槛的持仓，并且我们也 modestly 削减了我们详细列出的几个较大头寸。我们在 1997 年进行的一些销售旨在适度改变我们的债券-股票比例，以应对我们在每个市场中看到的相对价值，这种调整我们在 1998 年继续进行。

Our reported positions, we should add, sometimes reflect the investment decisions of GEICO's Lou Simpson. Lou independently runs an equity portfolio of nearly $2 billion that may at times overlap the portfolio that I manage, and occasionally he makes moves that differ from mine.

我们应该补充说，我们报告的头寸有时反映了 GEICO 的 Lou Simpson 的投资决策。Lou 独立管理着近 20 亿美元的股票投资组合，有时可能与我的 portfolio 重叠，偶尔他会做出与我不同的举动。

Though we don't attempt to predict the movements of the stock market, we do try, in a very rough way, to value it. At the annual meeting last year, with the Dow at 7,071 and long-term Treasury yields at 6.89%, Charlie and I stated that we did not consider the market overvalued if 1) interest rates remained where they were or fell, and 2) American business continued to earn the remarkable returns on equity that it had recently recorded. So far, interest rates have fallen -- that's one requisite satisfied -- and returns on equity still remain exceptionally high. If they stay there -- and if interest rates hold near recent levels -- there is no reason to think of stocks as generally overvalued. On the other hand, returns on equity are not a sure thing to remain at, or even near, their present levels.

尽管我们不 attempt 预测股票市场的 movements，但我们确实以非常粗略的方式尝试估值。在去年的年会上，当时道指为 7,071，长期国债收益率为 6.89%，查理和我说，如果 1) 利率保持在原水平或下降，并且 2) 美国企业继续赚取其最近录得的 remarkable 净资产收益率，那么我们并不认为市场被高估。到目前为止，利率已经下降——满足了一个条件——而净资产收益率仍然 exceptionally 高。如果它们保持在那里——并且如果利率保持在接近近期的水平——没有理由认为股票普遍被高估。另一方面，净资产收益率不确定能保持在甚至接近目前的水平。

In the summer of 1979, when equities looked cheap to me, I wrote a Forbes article entitled "You pay a very high price in the stock market for a cheery consensus." At that time skepticism and disappointment prevailed, and my point was that investors should be glad of the fact, since pessimism drives down prices to truly attractive levels. Now, however, we have a very cheery consensus. That does not necessarily mean this is the wrong time to buy stocks: Corporate America is now earning far more money than it was just a few years ago, and in the presence of lower interest rates, every dollar of earnings becomes more valuable. Today's price levels, though, have materially eroded the "margin of safety" that Ben Graham identified as the cornerstone of intelligent investing.

在 1979 年夏天，当时股票在我看来很 cheap，我写了一篇 Forbes 文章，题为“你在股市为 cheerful 共识付出非常高的价格”。那时 skepticism 和 disappointment 盛行，我的观点是投资者应该对这个事实感到高兴，因为悲观情绪将价格压低到真正有吸引力的水平。然而，现在我们有一个非常 cheerful 的共识。这不一定意味着现在是购买股票的错误时机：美国企业现在的盈利远远高于几年前，并且在较低利率存在的情况下，每一美元盈利都变得更有价值。不过，今天的价格水平已经 materially 侵蚀了本·格雷厄姆认为是 intelligent 投资基石的那个“安全 margin”。

In last year's annual report, I discussed Coca-Cola, our largest holding. Coke continues to increase its market dominance throughout the world, but, tragically, it has lost the leader responsible for its outstanding performance. Roberto Goizueta, Coke's CEO since 1981, died in October. After his death, I read every one of the more than 100 letters and notes he had written me during the past nine years. Those messages could well serve as a guidebook for success in both business and life.

在去年的年报中，我讨论了可口可乐，我们的最大持股。可口可乐 continue 在全球增加其市场 dominance，但 tragically，它失去了负责其 outstanding 业绩的 leader。Roberto Goizueta，自 1981 年起担任可口可乐的 CEO，于 10 月去世。他去世后，我阅读了他在过去九年里写给我的 100 多封信和便条中的每一封。那些信息完全可以作为商业和生活成功的指南。

In these communications, Roberto displayed a brilliant and clear strategic vision that was always aimed at advancing the well-being of Coke shareholders. Roberto knew where he was leading the company, how he was going to get there, and why this path made the most sense for his owners -- and, equally important, he had a burning sense of urgency about reaching his goals. An excerpt from one handwritten note he sent to me illustrates his mind-set: "By the way, I have told Olguita that what she refers to as an obsession, you call focus. I like your term much better." Like all who knew Roberto, I will miss him enormously.

在这些通信中，Roberto 展示了 brilliant 且清晰的战略 vision，始终旨在增进可口可乐股东的 well-being。Roberto 知道他要将公司带向何方，如何到达那里，以及为什么这条道路对他的所有者最有意义——而且，同样重要的是，他对实现目标有着 burning 的 urgency 感。他寄给我的一张 handwritten 便条中的摘录说明了他的 mindset：“顺便说一句，我告诉 Olguita，她称之为 obsession 的东西，你称之为 focus。我更喜欢你的术语。”和所有认识 Roberto 的人一样，我会 enormously 想念他。

Consistent with his concern for the company, Roberto prepared for a seamless succession long before it seemed necessary. Roberto knew that Doug Ivester was the right man to take over and worked with Doug over the years to ensure that no momentum would be lost when the time for change arrived. The Coca-Cola Company will be the same steamroller under Doug as it was under Roberto.

与他对公司的关心一致，Roberto 在看似有必要之前很久就为 seamless 的 succession 做了准备。Roberto 知道 Doug Ivester 是接任的合适人选，并多年来与 Doug 合作，确保在变革时机到来时不会失去任何 momentum。可口可乐公司在 Doug 的领导下将和 Roberto 领导下一样，是一台 steamroller。

Two years ago, I gave you an update on the five convertible preferreds that we purchased through private placements in the 1987-1991 period. At the time of that earlier report, we had realized a small profit on the sale of our Champion International holding. The four remaining preferred commitments included two, Gillette and First Empire State, that we had converted into common stock in which we had large unrealized gains, and two others, USAir and Salomon, that had been trouble-prone. At times, the last two had me mouthing a line from a country song: "How can I miss you if you won't go away?"

两年前，我向你更新了我们在 1987-1991 年期间通过私募购买的五只可转换优先股的情况。在那份早期报告时，我们出售 Champion International 持股实现了一笔小额利润。剩下的四个优先 commitment 包括两个——吉列和 First Empire State——我们已将其转换为普通股，并获得了 large 的未实现收益，另外两个——USAir 和所罗门——一直 trouble-prone。有时，后两个让我 mouthing 一句乡村歌曲的歌词：“如果你不走，我怎么能想你？”

Since I delivered that report, all four holdings have grown significantly in value. The common stocks of both Gillette and First Empire have risen substantially, in line with the companies' excellent performance. At yearend, the $600 million we put into Gillette in 1989 had appreciated to $4.8 billion, and the $40 million we committed to First Empire in 1991 had risen to $236 million.

自从我发表那份报告以来，所有四项 holdings 的价值都 significantly 增长。吉列和 First Empire 的普通股都大幅上涨，与公司的 excellent 表现一致。年底时，我们在 1989 年投入吉列的 6 亿美元已增值至 48 亿美元，我们在 1991 年投入 First Empire 的 4,000 万美元已增至 2.36 亿美元。

Our two laggards, meanwhile, have come to life in a very major way. In a transaction that finally rewarded its long-suffering shareholders, Salomon recently merged into Travelers Group. All of Berkshire's shareholders -- including me, very personally -- owe a huge debt to Deryck Maughan and Bob Denham for, first, playing key roles in saving Salomon from extinction following its 1991 scandal and, second, restoring the vitality of the company to a level that made it an attractive acquisition for Travelers. I have often said that I wish to work with executives that I like, trust and admire. No two fit that description better than Deryck and Bob.

与此同时，我们的两个落后者以一种 very major 的方式 come to life。在一项最终 reward 了其长期受苦股东的 transaction 中，所罗门最近与旅行者集团合并。伯克希尔的所有股东——包括我本人，非常 personal——欠 Deryck Maughan 和 Bob Denham 一个巨大的 debt，首先，他们在 1991 年丑闻后挽救所罗门免于 extinction 中发挥了关键作用，其次，将公司的 vitality 恢复到使其成为旅行者 attractive 收购的水平。我常常说，我希望与我喜欢、信任和 admire 的高管共事。没有两个人比 Deryck 和 Bob 更符合这种描述了。

Berkshire's final results from its Salomon investment won't be tallied for some time, but it is safe to say that they will be far better than I anticipated two years ago. Looking back, I think of my Salomon experience as having been both fascinating and instructional, though for a time in 1991-92 I felt like the drama critic who wrote: "I would have enjoyed the play except that I had an unfortunate seat. It faced the stage."

伯克希尔对所罗门投资的最终结果在一段时间内不会 tally，但可以安全地说，它们将远比我两年前预期的要好。回首过去，我认为我的所罗门经历既是 fascinating 又是 instructional，尽管在 1991-92 年的一段时间里，我感觉像那位写出以下文字的戏剧评论家：“我会喜欢这出戏，只是我坐了一个不幸的座位。它面对着 stage。”

The resuscitation of US Airways borders on the miraculous. Those who have watched my moves in this investment know that I have compiled a record that is unblemished by success. I was wrong in originally purchasing the stock, and I was wrong later, in repeatedly trying to unload our holdings at 50 cents on the dollar.

US Airways 的复苏 bordering on 奇迹。那些关注我在这项投资中的举动的人知道，我 compile 了一个未被成功 stain 的记录。我最初买入股票是错误的，后来我 repeatedly 试图以 50 美分兑 1 美元的价格 unloading 我们的持股也是错误的。

Two changes at the company coincided with its remarkable rebound: 1) Charlie and I left the board of directors and 2) Stephen Wolf became CEO. Fortunately for our egos, the second event was the key: Stephen Wolf's accomplishments at the airline have been phenomenal.

该公司的两个变化 coinciding 了它的 remarkable 反弹：1) 查理和我离开了董事会，2) Stephen Wolf 成为 CEO。对我们的 ego 来说幸运的是，第二个事件是关键：Stephen Wolf 在该航空公司的成就一直是 phenomenal。

There still is much to do at US Airways, but survival is no longer an issue. Consequently, the company made up the dividend arrearages on our preferred during 1997, adding extra payments to compensate us for the delay we suffered. The company's common stock, furthermore, has risen from a low of $4 to a recent high of $73.

US Airways 仍有很多事情要做，但生存不再是问题。因此，公司在 1997 年补足了我们的优先股股息欠款，并增加额外支付以补偿我们遭受的延迟。此外，公司的普通股已从 4 美元的低点上涨到近期 73 美元的高点。

Our preferred has been called for redemption on March 15. But the rise in the company's stock has given our conversion rights, which we thought worthless not long ago, great value. It is now almost certain that our US Airways shares will produce a decent profit -- that is, if my cost for Maalox is excluded -- and the gain could even prove indecent.

我们的优先股已被要求于 3 月 15 日赎回。但公司股票的上涨给了我们的转换权（不久前我们还认为毫无价值）巨大的价值。现在几乎可以肯定，我们的 US Airways 股票将产生 decent 的利润——也就是说，如果排除我购买胃药的费用——收益甚至可能 indecent。

Next time I make a big, dumb decision, Berkshire shareholders will know what to do: Phone Mr. Wolf.

下次我做出一个大的、愚蠢的决定，伯克希尔的股东就会知道该怎么做：打电话给 Wolf 先生。

In addition to the convertible preferreds, we purchased one other private placement in 1991, $300 million of American Express Percs. This security was essentially a common stock that featured a tradeoff in its first three years: We received extra dividend payments during that period, but we were also capped in the price appreciation we could realize. Despite the cap, this holding has proved extraordinarily profitable thanks to a move by your Chairman that combined luck and skill -- 110% luck, the balance skill.

除了可转换优先股，我们在 1991 年还购买了另一项私募，3 亿美元的美国运通 Percs。这种证券本质上是一种普通股，其特点是在前三年有一个权衡：我们在此期间获得了额外的股息支付，但我们能实现的价格升值也被 capped。尽管有上限，但由于你们主席的一次结合了运气和 skill 的行动——110% 运气，剩下的是 skill——这一 holding 已被证明 extraordinarily 有利可图。

Our Percs were due to convert into common stock in August 1994, and in the month before I was mulling whether to sell upon conversion. One reason to hold was Amex's outstanding CEO, Harvey Golub, who seemed likely to maximize whatever potential the company had (a supposition that has since been proved -- in spades). But the size of that potential was in question: Amex faced relentless competition from a multitude of card-issuers, led by Visa. Weighing the arguments, I leaned toward sale.

我们的 Percs 原定于 1994 年 8 月转换为普通股，在此前一个月，我 mulling 是否在转换时卖出。持有的一个原因是 Amex 的 outstanding CEO Harvey Golub，他似乎 likely 会最大化公司拥有的任何 potential（这个 supposition 此后已被证明——in spades）。但那个 potential 的大小有疑问：Amex 面临着以 Visa 为首的众多发卡机构的 relentless 竞争。权衡 arguments 后，我倾向于出售。

Here's where I got lucky. During that month of decision, I played golf at Prouts Neck, Maine with Frank Olson, CEO of Hertz. Frank is a brilliant manager, with intimate knowledge of the card business. So from the first tee on I was quizzing him about the industry. By the time we reached the second green, Frank had convinced me that Amex's corporate card was a terrific franchise, and I had decided not to sell. On the back nine I turned buyer, and in a few months Berkshire owned 10% of the company.

这就是我 lucky 的地方。在那个做决定的月份，我在缅因州 Prouts Neck 与 Hertz 的 CEO Frank Olson 打高尔夫球。Frank 是一位 brilliant 的经理人，对 card business 有着 intimate 的了解。所以从第一个发球台开始，我就一直在向他询问这个行业。当我们到达第二个果岭时，Frank 已经 convincing 我，Amex 的公司卡是一个 terrific 的特许经营权，而我已经决定不卖出。在后九洞，我变成了买家，几个月后，伯克希尔拥有了该公司 10% 的股份。

We now have a $3 billion gain in our Amex shares, and I naturally feel very grateful to Frank. But George Gillespie, our mutual friend, says that I am confused about where my gratitude should go. After all, he points out, it was he who arranged the game and assigned me to Frank's foursome.

我们现在在 Amex 股票上有 30 亿美元的 gain，我 naturally 非常感谢 Frank。但我们的共同朋友 George Gillespie 说，我对我的感激应该去哪儿感到困惑。毕竟，他指出，是他安排了那场比赛，并将我分配到 Frank 的一组。

In last year's letter, I described the growing costs we incur in mailing quarterly reports and the problems we have encountered in delivering them to "street-name" shareholders. I asked for your opinion about the desirability of our continuing to print reports, given that we now publish our quarterly and annual communications on the Internet, at our site, www.berkshirehathaway.com. Relatively few shareholders responded, but it is clear that at least a small number who want the quarterly information have no interest in getting it off the Internet. Being a life-long sufferer from technophobia, I can empathize with this group.

在去年的信中，我描述了我们在邮寄季度报告方面日益增长的成本，以及在将其交付给“street-name”股东时遇到的问题。考虑到我们现在在互联网上发布季度和年度通信，在我们的网站 www.berkshirehathaway.com 上，我征求了你们关于我们继续印刷报告的可取性的意见。相对较少的股东回应，但很明显，至少有一小部分想要季度信息的人对从互联网获取没有兴趣。作为一个终身 sufferer 技术恐惧症的人，我能 empathize 这个群体。

The cost of publishing quarterlies, however, continues to balloon, and we have therefore decided to send printed versions only to shareholders who request them. If you wish the quarterlies, please complete the reply card that is bound into this report. In the meantime, be assured that all shareholders will continue to receive the annual report in printed form.

然而，出版季报的成本 continue to balloon，因此我们决定只向请求的股东发送印刷版。如果你想要季报，请填写本报告中装订的回复卡。与此同时，请放心，所有股东将继续以印刷形式收到年报。

Those of you who enjoy the computer should check out our home page. It contains a large amount of current information about Berkshire and also all of our annual letters since 1977. In addition, our website includes links to the home pages of many Berkshire subsidiaries. On these sites you can learn more about our subsidiaries' products and -- yes -- even place orders for them.

你们中喜欢电脑的人应该查看我们的主页。它包含大量关于伯克希尔的当前信息，以及我们自 1977 年以来的所有年度信函。此外，我们的网站包括许多伯克希尔子公司主页的链接。在这些网站上，你可以了解更多关于我们子公司的产品，并且——是的——甚至可以为它们下订单。

We are required to file our quarterly information with the SEC no later than 45 days after the end of each quarter. One of our goals in posting communications on the Internet is to make this material information -- in full detail and in a form unfiltered by the media -- simultaneously available to all interested parties at a time when markets are closed. Accordingly, we plan to send our 1998 quarterly information to the SEC on three Fridays, May 15, August 14, and November 13, and on those nights to post the same information on the Internet. This procedure will put all of our shareholders, whether they be direct or "street-name," on an equal footing. Similarly, we will post our 1998 annual report on the Internet on Saturday, March 13, 1999, and mail it at about the same time.

我们被要求在每季度结束后 45 天内向 SEC 提交季度信息。我们在互联网上发布通信的目标之一是，在市场收盘时，将此 material 信息——完整详细且以未经媒体过滤的形式——同时提供给所有感兴趣的各方。因此，我们计划在三个周五（5 月 15 日、8 月 14 日和 11 月 13 日）将我们的 1998 年季度信息发送给 SEC，并在这些夜晚将相同的信息发布在互联网上。此程序将使我们的所有股东，无论是直接股东还是“street-name”股东，处于平等地位。同样，我们将在 1999 年 3 月 13 日星期六将 1998 年年报发布在互联网上，并大约在同一时间邮寄。

About 97.7% of all eligible shares participated in Berkshire's 1997 shareholder-designated contributions program, with contributions totaling $15.4 million. Over the 17 years of the program, Berkshire has made contributions of $113 million pursuant to the instructions of our shareholders. The rest of Berkshire's giving is done by our subsidiaries, which stick to the philanthropic patterns that prevailed before they were acquired (except that their former owners themselves take on the responsibility for their personal charities). In aggregate, our subsidiaries made contributions of $10.7 million in 1997, including in-kind donations of $1.6 million.

大约 97.7% 的合格股份参与了伯克希尔 1997 年股东指定捐赠计划，捐款总额为 1,540 万美元。在该计划开展的 17 年中，伯克希尔根据股东指示共捐款 1.13 亿美元。伯克希尔其余的捐赠由其子公司进行，这些子公司坚持在被收购前盛行的慈善模式（除了其前所有者自己承担个人慈善的责任）。总体而言，我们的子公司在 1997 年捐款 1,070 万美元，其中包括 160 万美元的实物捐赠。

To participate in future programs, you must own Class A shares that are registered in the name of the actual owner, not the nominee name of a broker, bank or depository. Shares not so registered on August 31, 1998, will be ineligible for the 1998 program. When you get the contributions form from us, return it promptly so that it does not get put aside or forgotten. Designations received after the due date will not be honored.

要参与未来的计划，你必须拥有以实际所有者名义注册的 A 股，而不是以经纪人、银行或存管机构的代名人名义注册。在 1998 年 8 月 31 日之前未如此注册的股份将没有资格参加 1998 年的计划。当你收到我们的捐款表格时，请 promptly 寄回，以免被搁置或遗忘。逾期收到的指定将不被 honored。

Last year, one shareholder asked how many of our shares have been designated over the years for the various charities suggested. Here is the all-time scorecard:

去年，一位股东问到，多年来有多少我们的股票被指定用于所建议的各种慈善机构。以下是有史以来的记分卡：

This year's Woodstock for Capitalists will be held May 2-4, with our main gathering again at the Holiday Convention Centre. Last year about 7,500 people attended, and we expect a somewhat larger crowd this year. The doors will open at 7 a.m., and we will again have a Berkshire movie at 8:30. At 9:30 we will go directly to a question-and-answer period, which will last until 3:30, with an hour for lunch. Again, we will break for lunch this year at 11:00. Many of you bring your lunch and eat in the great hall while watching a video tape of the first part of the meeting. The lunch break allows the many who want to go to Borsheim's, Nebraska Furniture Mart or the airport to get a head start.

今年的资本主义伍德斯托克将于 5 月 2 日至 4 日举行，我们再次在 Holiday Convention Centre 聚集。去年约有 7,500 人参加，我们预计今年会稍多一些。大门将在早上 7 点打开，我们将在 8:30 再次播放伯克希尔电影。9:30 我们将直接进入问答环节，持续到下午 3:30，中间有一小时午餐时间。今年我们再次在 11:00 午休。你们中的许多人会自带午餐，在大厅里观看会议第一部分的录像带。午休让许多想去 Borsheim、内布拉斯加家具 mart 或机场的人可以提前出发。

As always, we will have buses to shuttle you between the larger hotels and the Convention Centre. Buses will also run from the Convention Centre to NFM and Borsheim's after the meeting, and then from NFM and Borsheim's to the airport and hotels. This service may not cover the smaller hotels, but there is plenty of parking near the Convention Centre for those who drive.

和往常一样，我们将提供巴士在较大的酒店和会议中心之间接送。会后巴士也将从会议中心开往 NFM 和 Borsheim，然后从 NFM 和 Borsheim 开往机场和酒店。这项服务可能不覆盖较小的酒店，但会议中心附近有很多停车位供驾车者使用。

Last year we added many shareholders from outside the United States, and I expect that this trend will continue. To make these visitors feel especially welcome, we will have a simultaneous translation of the meeting proceedings into German, French, Spanish and Japanese, with the translators positioned near the international visitors. We will also have volunteers from our international insurance operation to help with any problems that occur.

去年我们增加了许多来自美国以外的股东，我预计这一趋势将继续下去。为了让这些访客感到特别 welcome，我们将把会议 proceedings 同声翻译成德语、法语、西班牙语和日语，翻译人员位于国际访客附近。我们还将有来自我们国际保险业务的志愿者帮助解决任何出现的问题。

Additionally, we have for several years offered a simultaneous translation into Mandarin Chinese for our shareholders from China, and we were pleased that a number of shareholders from Taiwan and Singapore as well as China used this service last year. If you need a translator for other languages, please let us know in advance, and we will do our best to arrange one.

此外，多年来我们一直为来自中国的股东提供普通话同声传译，并且我们很高兴去年有许多来自台湾、新加坡和中国的股东使用了这项服务。如果你需要其他语言的翻译，请提前告诉我们，我们将尽力安排。

Berkshire products will again be available for sale at the Convention Centre. Last year we sold 2,400 pounds of See's candy, 1,100 pairs of Dexter shoes and 1,600 sets of Quikut knives. The apparel line sold 2,200 shirts and caps, and we also sold 1,800 World Book products and 2,500 golf balls. We expect to do even better this year, as a result of improved attendance and the introduction of new products and styles.

伯克希尔产品将再次在会议中心出售。去年我们卖出了 2,400 磅 See's 糖果、1,100 双 Dexter 鞋和 1,600 套 Quikut 刀具。服装系列卖出了 2,200 件衬衫和帽子，我们还卖出了 1,800 件 World Book 产品和 2,500 个高尔夫球。由于出席人数增加以及新产品和新款式的推出，我们预计今年会做得更好。

Dairy Queen will again be on hand, offering a full range of products, and will again donate all proceeds to the Children's Miracle Network. Last year we sold 3,000 Dilly® bars, fudge bars and vanilla/orange bars. GEICO will have a booth staffed by a number of our top counselors from around the country, all ready to supply you with auto insurance quotes. In most cases, GEICO will be able to offer a special shareholder discount, which in 40 states gives you 8% off our already-low rates. Check out whether we can save you some money.

冰雪皇后将再次到场，提供全系列产品，并再次将所有收益捐赠给 Children's Miracle Network。去年我们卖出了 3,000 根 Dilly® 冰棒、软糖棒和香草/橙子棒。GEICO 将设立一个展位，由来自全国各地的一些顶级顾问提供服务，都 ready 为你提供汽车保险报价。在大多数情况下，GEICO 能够提供特别的股东折扣，在 40 个州，这能让你在我们已经很低的费率基础上再享 8% 的折扣。看看我们能否为你省些钱。

We will also have a booth at the Convention Centre displaying "The Art of Warren Buffett," consisting of a collection of original editorial cartoons that I have received from newspapers around the country. This should be good for some laughs. And, oh yes, I will again be at the Omaha Golden Spikes baseball game on Saturday night, May 2, throwing out the first pitch. We have reserved 2,000 tickets for Berkshire shareholders, and those will be distributed on a first-come, first-served basis.

我们还将在会议中心设立一个展位，展示“沃伦·巴菲特的艺术”，其中包括我从全国各地报纸收到的原创社论漫画集。这应该会带来一些笑声。哦，对了，5 月 2 日星期六晚上，我将再次出现在奥马哈 Golden Spikes 棒球比赛中，投出第一球。我们已经为伯克希尔股东预留了 2,000 张门票，先到先得。

Following the game, we will have a reception for all shareholders at the Holiday Convention Centre. This will be an opportunity to meet our managers and directors. We hope you can join us.

比赛结束后，我们将在 Holiday Convention Centre 为所有股东举行招待会。这将是一个与我们的经理人和董事见面的机会。我们希望你能参加。

Finally, a word about the 10.5 people who work with me in Berkshire's corporate office. In addition to handling the myriad of tax, regulatory and administrative matters that come with owning dozens of businesses, this group efficiently and cheerfully manages various special projects, some of which generate hundreds of inquiries. Here's a sample of what went on in 1997:

最后，说一下在伯克希尔公司办公室与我一起工作的 10.5 个人。除了处理拥有数十家企业所带来的无数税务、监管和行政事务外，这个团队高效而愉快地管理着各种特殊项目，其中一些项目产生了数百个询问。以下是 1997 年发生的事情的一个样本：

• 5,100 shareholders designated 3,500 charities to receive contributions.
• Kelly Muchemore processed about 16,000 admission tickets for the annual meeting, along with orders and checks for 2,000 baseball tickets.
• Kelly and Marc Hamburg produced and directed the Convention Centre extravaganza, a job that required them to arrange the presentations made by our subsidiaries, prepare our movie, and sometimes lend people a hand with travel and lodging.
• Debbie Bosanek handled the varying needs of the 35 media organizations that covered the meeting, and meanwhile, as always, skillfully assisted me in every aspect of my job.
• Debbie and Marc assembled the data for our annual report and oversaw the production and distribution of 165,000 copies.
• Marc handled 90% of the details connected with our completing two major acquisitions.
• Kelly, Debbie and Deb Ray dealt efficiently with tens of thousands of requests for annual reports and financial information that came through the office.

• 5,100 名股东指定了 3,500 家慈善机构接受捐款。
• Kelly Muchemore 处理了大约 16,000 张年会入场券，以及 2,000 张棒球票的订单和支票。
• Kelly 和 Marc Hamburg 制作并导演了会议中心的盛会，这项工作需要他们安排我们子公司的演示，准备我们的电影，有时在旅行和住宿方面帮助人们。
• Debbie Bosanek 处理了报道会议的 35 家媒体组织的不同需求，同时一如既往地在我工作的各个方面熟练地协助我。
• Debbie 和 Marc 为我们的年报整理了数据，并监督了 165,000 份的印刷和分发。
• Marc 处理了与我们完成两项重大收购相关的 90% 的细节。
• Kelly、Debbie 和 Deb Ray 高效地处理了通过办公室收到的数以万计的年报和财务信息请求。

You and I are paying for only 10.5 people, but we are getting what would at most places be the output of 100. To all of the 10.5, my thanks.

你和我只为 10.5 个人付费，但我们得到了在大多数地方需要 100 个人才能产出的成果。向所有 10.5 个人，我的感谢。

Warren E. Buffett
February 27, 1998
Chairman of the Board

沃伦·E·巴菲特
1998 年 2 月 27 日
董事会主席