巴菲特致股东信_2012.ppt

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1、,Berkshires Corporate Performance vs.the S&P 500Annual Percentage Change,in Per-Share,in S&P 500,Book Value of with Dividends,Relative,Berkshire,Included,Results,Year,(1),(2),(1)-(2),196519661967196819691970197119721973197419751976197719781979198019811982198319841985198619871988198919901991199219931

2、99419951996199719981999200020012002200320042005200620072008200920102011,.,23.820.311.019.016.212.016.421.74.75.521.959.331.924.035.719.331.440.032.313.648.226.119.520.144.47.439.620.314.313.943.131.834.148.3.56.5(6.2)10.021.010.56.418.411.0(9.6)19.813.04.6,10.0(11.7)30.911.0(8.4)3.914.618.9(14.8)(26

3、.4)37.223.6(7.4)6.418.232.3(5.0)21.422.46.131.618.65.116.631.7(3.1)30.57.610.11.337.623.033.428.621.0(9.1)(11.9)(22.1)28.710.94.915.85.5(37.0)26.515.12.1,13.832.0(19.9)8.024.68.11.82.819.531.9(15.3)35.739.317.617.5(13.0)36.418.69.97.516.67.514.43.512.710.59.112.74.212.65.58.8.719.7(20.5)15.65.732.1(

4、7.7)(.4)1.52.65.527.4(6.7)(2.1)2.5,Compounded Annual Gain 1965-2011.Overall Gain 1964-2011.,19.8%513,055%,9.2%6,397%,10.6,Notes:Data are for calendar years with these exceptions:1965 and 1966,year ended 9/30;1967,15 months ended12/31.Starting in 1979,accounting rules required insurance companies to

5、value the equity securities they hold atmarket rather than at the lower of cost or market,which was previously the requirement.In this table,Berkshiresresults through 1978 have been restated to conform to the changed rules.In all other respects,the results are calculatedusing the numbers originally

6、reported.The S&P 500 numbers are pre-tax whereas the Berkshire numbers are after-tax.If a corporation such as Berkshire were simply to have owned the S&P 500 and accrued the appropriate taxes,itsresults would have lagged the S&P 500 in years when that index showed a positive return,but would have ex

7、ceeded theS&P 500 in years when the index showed a negative return.Over the years,the tax costs would have caused theaggregate lag to be substantial.2,BERKSHIRE HATHAWAY INC.,To the Shareholders of Berkshire Hathaway Inc.:,The per-share book value of both our Class A and Class B stock increased by 4

8、.6%in 2011.Over thelast 47 years(that is,since present management took over),book value has grown from$19 to$99,860,a rate of19.8%compounded annually.*,Charlie Munger,Berkshires Vice Chairman and my partner,and I feel good about the companys,progress during 2011.Here are the highlights:,The primary

9、job of a Board of Directors is to see that the right people are running the business and tobe sure that the next generation of leaders is identified and ready to take over tomorrow.I have been on19 corporate boards,and Berkshires directors are at the top of the list in the time and diligence theyhav

10、e devoted to succession planning.Whats more,their efforts have paid off.,As 2011 started,Todd Combs joined us as an investment manager,and shortly after yearend TedWeschler came aboard.Both of these men have outstanding investment skills and a deep commitmentto Berkshire.Each will be handling a few

11、billion dollars in 2012,but they have the brains,judgmentand character to manage our entire portfolio when Charlie and I are no longer running Berkshire.,Your Board is equally enthusiastic about my successor as CEO,an individual to whom they have had agreat deal of exposure and whose managerial and

12、human qualities they admire.(We have two superbback-up candidates as well.)When a transfer of responsibility is required,it will be seamless,andBerkshires prospects will remain bright.More than 98%of my net worth is in Berkshire stock,all ofwhich will go to various philanthropies.Being so heavily co

13、ncentrated in one stock defies conventionalwisdom.But Im fine with this arrangement,knowing both the quality and diversity of the businesseswe own and the caliber of the people who manage them.With these assets,my successor will enjoy arunning start.Do not,however,infer from this discussion that Cha

14、rlie and I are going anywhere;wecontinue to be in excellent health,and we love what we do.,On September 16th we acquired Lubrizol,a worldwide producer of additives and other specialtychemicals.The company has had an outstanding record since James Hambrick became CEO in 2004,with pre-tax profits incr

15、easing from$147 million to$1,085 million.Lubrizol will have manyopportunities for“bolt-on”acquisitions in the specialty chemical field.Indeed,weve already agreed tothree,costing$493 million.James is a disciplined buyer and a superb operator.Charlie and I are eagerto expand his managerial domain.,Our

16、 major businesses did well last year.In fact,each of our five largest non-insurance companies BNSF,Iscar,Lubrizol,Marmon Group and MidAmerican Energy delivered record operating earnings.Inaggregate these businesses earned more than$9 billion pre-tax in 2011.Contrast that to seven years ago,when we o

17、wned only one of the five,MidAmerican,whose pre-tax earnings were$393 million.Unless theeconomy weakens in 2012,each of our fabulous five should again set a record,with aggregate earningscomfortably topping$10 billion.,*All per-share figures used in this report apply to Berkshires A shares.Figures f

18、or the B shares are,1/1500th of those shown for A.,3,In total,our entire string of operating companies spent$8.2 billion for property,plant and equipment in2011,smashing our previous record by more than$2 billion.About 95%of these outlays were made inthe U.S.,a fact that may surprise those who belie

19、ve our country lacks investment opportunities.Wewelcome projects abroad,but expect the overwhelming majority of Berkshires future capitalcommitments to be in America.In 2012,these expenditures will again set a record.,Our insurance operations continued their delivery of costless capital that funds a

20、 myriad of otheropportunities.This business produces“float”money that doesnt belong to us,but that we get toinvest for Berkshires benefit.And if we pay out less in losses and expenses than we receive inpremiums,we additionally earn an underwriting profit,meaning the float costs us less than nothing.

21、Though we are sure to have underwriting losses from time to time,weve now had nine consecutiveyears of underwriting profits,totaling about$17 billion.Over the same nine years our float increasedfrom$41 billion to its current record of$70 billion.Insurance has been good to us.,Finally,we made two maj

22、or investments in marketable securities:(1)a$5 billion 6%preferred stock ofBank of America that came with warrants allowing us to buy 700 million common shares at$7.14 pershare any time before September 2,2021;and(2)63.9 million shares of IBM that cost us$10.9 billion.Counting IBM,we now have large

23、ownership interests in four exceptional companies:13.0%ofAmerican Express,8.8%of Coca-Cola,5.5%of IBM and 7.6%of Wells Fargo.(We also,of course,have many smaller,but important,positions.),We view these holdings as partnership interests in wonderful businesses,not as marketable securities tobe bought

24、 or sold based on their near-term prospects.Our share of their earnings,however,are far fromfully reflected in our earnings;only the dividends we receive from these businesses show up in ourfinancial reports.Over time,though,the undistributed earnings of these companies that are attributableto our o

25、wnership are of huge importance to us.Thats because they will be used in a variety of ways toincrease future earnings and dividends of the investee.They may also be devoted to stock repurchases,which will increase our share of the companys future earnings.,Had we owned our present positions througho

26、ut last year,our dividends from the“Big Four”wouldhave been$862 million.Thats all that would have been reported in Berkshires income statement.Ourshare of this quartets earnings,however,would have been far greater:$3.3 billion.Charlie and Ibelieve that the$2.4 billion that goes unreported on our boo

27、ks creates at least that amount of value forBerkshire as it fuels earnings gains in future years.We expect the combined earnings of the four andtheir dividends as well to increase in 2012 and,for that matter,almost every year for a long time tocome.A decade from now,our current holdings of the four

28、companies might well account for earningsof$7 billion,of which$2 billion in dividends would come to us.,Ive run out of good news.Here are some developments that hurt us during 2011:,A few years back,I spent about$2 billion buying several bond issues of Energy Future Holdings,anelectric utility opera

29、tion serving portions of Texas.That was a mistake a big mistake.In large measure,the companys prospects were tied to the price of natural gas,which tanked shortly after our purchase andremains depressed.Though we have annually received interest payments of about$102 million since ourpurchase,the com

30、panys ability to pay will soon be exhausted unless gas prices rise substantially.Wewrote down our investment by$1 billion in 2010 and by an additional$390 million last year.,At yearend,we carried the bonds at their market value of$878 million.If gas prices remain at presentlevels,we will likely face

31、 a further loss,perhaps in an amount that will virtually wipe out our currentcarrying value.Conversely,a substantial increase in gas prices might allow us to recoup some,or evenall,of our write-down.However things turn out,I totally miscalculated the gain/loss probabilities whenI purchased the bonds

32、.In tennis parlance,this was a major unforced error by your chairman.,4,Three large and very attractive fixed-income investments were called away from us by their issuers in2011.Swiss Re,Goldman Sachs and General Electric paid us an aggregate of$12.8 billion to redeemsecurities that were producing a

33、bout$1.2 billion of pre-tax earnings for Berkshire.Thats a lot ofincome to replace,though our Lubrizol purchase did offset most of it.,Last year,I told you that“a housing recovery will probably begin within a year or so.”I was deadwrong.We have five businesses whose results are significantly influen

34、ced by housing activity.Theconnection is direct at Clayton Homes,which is the largest producer of homes in the country,accounting for about 7%of those constructed during 2011.,Additionally,Acme Brick,Shaw(carpet),Johns Manville(insulation)and MiTek(building products,primarily connector plates used i

35、n roofing)are all materially affected by construction activity.Inaggregate,our five housing-related companies had pre-tax profits of$513 million in 2011.Thatssimilar to 2010 but down from$1.8 billion in 2006.,Housing will come back you can be sure of that.Over time,the number of housing units necess

36、arilymatches the number of households(after allowing for a normal level of vacancies).For a period ofyears prior to 2008,however,America added more housing units than households.Inevitably,weended up with far too many units and the bubble popped with a violence that shook the entire economy.That cre

37、ated still another problem for housing:Early in a recession,household formations slow,and in2009 the decrease was dramatic.,That devastating supply/demand equation is now reversed:Every day we are creating more householdsthan housing units.People may postpone hitching up during uncertain times,but e

38、ventually hormonestake over.And while“doubling-up”may be the initial reaction of some during a recession,living within-laws can quickly lose its allure.,At our current annual pace of 600,000 housing starts considerably less than the number of newhouseholds being formed buyers and renters are sopping

39、 up whats left of the old oversupply.(Thisprocess will run its course at different rates around the country;the supply-demand situation varieswidely by locale.)While this healing takes place,however,our housing-related companies sputter,employing only 43,315 people compared to 58,769 in 2006.This hu

40、gely important sector of theeconomy,which includes not only construction but everything that feeds off of it,remains in adepression of its own.I believe this is the major reason a recovery in employment has so severelylagged the steady and substantial comeback we have seen in almost all other sector

41、s of our economy.,Wise monetary and fiscal policies play an important role in tempering recessions,but these tools dontcreate households nor eliminate excess housing units.Fortunately,demographics and our marketsystem will restore the needed balance probably before long.When that day comes,we will a

42、gainbuild one million or more residential units annually.I believe pundits will be surprised at how farunemployment drops once that happens.They will then reawake to what has been true since 1776:Americas best days lie ahead.,Intrinsic Business Value,Charlie and I measure our performance by the rate

43、 of gain in Berkshires per-share intrinsic businessvalue.If our gain over time outstrips the performance of the S&P 500,we have earned our paychecks.If itdoesnt,we are overpaid at any price.,We have no way to pinpoint intrinsic value.But we do have a useful,though considerably understated,proxy for

44、it:per-share book value.This yardstick is meaningless at most companies.At Berkshire,however,book value very roughly tracks business values.Thats because the amount by which Berkshires intrinsic valueexceeds book value does not swing wildly from year to year,though it increases in most years.Over ti

45、me,thedivergence will likely become ever more substantial in absolute terms,remaining reasonably steady,however,ona percentage basis as both the numerator and denominator of the business-value/book-value equation increase.,5,Weve regularly emphasized that our book-value performance is almost certain

46、 to outpace the S&P 500in a bad year for the stock market and just as certainly will fall short in a strong up-year.The test is how we doover time.Last years annual report included a table laying out results for the 42 five-year periods since we tookover at Berkshire in 1965(i.e.,1965-69,1966-70,etc

47、.).All showed our book value beating the S&P,and ourstring held for 2007-11.It will almost certainly snap,though,if the S&P 500 should put together a five-yearwinning streak(which it may well be on its way to doing as I write this).,*,I also included two tables last year that set forth the key quant

48、itative ingredients that will help youestimate our per-share intrinsic value.I wont repeat the full discussion here;you can find it reproduced onpages 99-100.To update the tables shown there,our per-share investments in 2011 increased 4%to$98,366,andour pre-tax earnings from businesses other than in

49、surance and investments increased 18%to$6,990 per share.,Charlie and I like to see gains in both areas,but our primary focus is on building operating earnings.Overtime,the businesses we currently own should increase their aggregate earnings,and we hope also to purchase somelarge operations that will

50、 give us a further boost.We now have eight subsidiaries that would each be included in theFortune 500 were they stand-alone companies.That leaves only 492 to go.My task is clear,and Im on the prowl.,Share Repurchases,Last September,we announced that Berkshire would repurchase its shares at a price o