Buffett firm's 4Q up 49 pct. on paper gains

OMAHA, Neb. (AP) — Warren Buffett's company reported a 49 percent surge in fourth-quarter profit because of a big paper gain on its investments and derivative contracts, but the investor called the year subpar as Berkshire's results lagged the S&P 500.

Buffett recounted Berkshire Hathaway's 2012 performance Friday in his annual letter to shareholders.

The Omaha-based company reported $4.55 billion net income, or $2,757 per Class A share, in the fourth quarter. That's up from $3.05 billion net income, or $1,846 per share, the year before.

Buffett says Berkshire's operating earnings, which exclude the value of derivatives and investments, are a better measure of performance. They improved 5.5 percent to $2.8 billion in the quarter.