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 the fourth quarter and Berkshire Hathaway’s 2012 performance Friday in his annual letter to shareholders.