Berkshire News Briefs - 12/31/14

Ocwen Would Do Well to Follow the Lessons of Berkshire’s Clayton Homes (NY Times)

On the surface, it's a story about Ocwen Financial Corp's struggles, but really it's an extensive story singing the praises of Berkshire subsidiary Clayton Homes's business practices.

Though Clayton also concentrates in subprime loans, it has had an entirely different track record, prospering throughout the financial crisis. It had no increase in customer foreclosure rates. It met all its obligations as a lender, borrower and servicer. And it even acquired several failed competitors to move to No. 1 in its segment from No. 4. [...] What distinguished Clayton Homes was that its financing division, unlike that of competitors, did not engage in predatory lending or exploit its customers’ naiveté. Mr. Clayton attributed the difference to his company’s maintenance of a “sacred wall” between sales and credit that competitors failed to maintain.

Buffett’s DQ bringing soft-serve treats back to Kuwait (Gulf Times)

International Dairy Queen, the fast-food and ice-cream seller owned by Warren Buffett’s Berkshire Hathaway Inc, is bringing its American-style meals and treats back to Kuwait after an absence of more than a decade. More than 20 locations will open in the country in the next five years, Minneapolis-based Dairy Queen said in a December 23 statement announcing a new franchise agreement. Four to five may begin operations in 2015, Brad Houser, vice president of international development, said in a phone interview. [...] Most food and treats offered in Kuwait will be the same as those on US menus, Houser said. One item unique to the Middle East is the beef kofta, a spicier, gyro-type sandwich. Of the chain’s more than 6,300 locations, about 22% are outside of the US and Canada, about 2 percentage points more than in January.

Railroads, unions to begin collective bargaining talks next month (Omaha World Herald)

Labor negotiations are set to begin between Union Pacific, BNSF Railway and unions that represent about 10,000 railroad workers in Nebraska and Iowa. Formal negotiations are scheduled for next month on a new collective bargaining agreement between the nation’s freight railroads and 13 unions representing about 143,000 workers. The most recent contracts were ratified in 2011 and 2012. Key to the talks will be compensation, health care costs and work rules that describe who is allowed to do what on trains and in rail yards, workshops and offices, according to bargaining notices sent to the unions by the railroads.

Zawawi Minerals' firms now part of Warren Buffett's investment (Zawya)

Not really a "Buffett" investment, but it makes a good headline overseas as businesses are eager to promote themselves as connected to Buffett.

USG Corporation, through its 50:50 joint venture USG-Boral Building Products, is a shareholder in Zawawi Gypsum LLC and USG -- Zawawi Drywall SFZ LLC, which are at the forefront of efforts to create In Country Value for the Sultanate's prodigious gypsum resources. Both firms are subsidiaries of Zawawi Minerals LLC , a prominent player in Oman's rapidly expanding mining sector," said Alawi Zawawi, Chairman of Zawawi Minerals LLC. [...] Berkshire Hathaway's 30.50 per cent stake in USG Corporation effectively gives the US investment conglomerate an indirect shareholding interest in the two Omani firms, amounting to 8.39 per cent in Zawawi Gypsum LLC and 7.63 per cent in USG-Zawawi Drywall SFZ LLC. In essence, the two companies are now part of Warren Buffett's holding company which today ranks as the fifth most valuable public enterprise in the United States, with a market cap of nearly $350 billion.

NetJets adds 10 Signature Series Phenom 300s to Embraer aircraft order (CNN / PRNewswire)

Embraer Executive Jets and NetJets® Inc., a Berkshire Hathaway company and the worldwide leader in private aviation, have signed an agreement to convert 10 Signature Series Phenom 300 purchase options into firm orders. At current list prices, this addition to the contract is worth US$ 89.55 million, which will be included in the backlog of the fourth quarter of 2014. In October 2010, a purchase agreement was signed for 50 firm and 75 options. The total value of the deal may exceed US$ 1 billion, if all options are exercised. [...] Embraer has now delivered 36 Signature Series Phenom 300s to NetJets. These aircraft operate in the NetJets fleet, with fractional owners in the U.S. and Europe. Deliveries of the 10 additional aircraft will begin as of January 2016.

Berkshire News Briefs - 12/23/14

Merry Christmas, Happy Hanukkah, and Seasons Greetings!

Berkshire Hathaway’s Citizenship: Culture, Scale and the Future (Triple Pundit)

This is an excerpt from the book, "Berkshire Beyond Buffett: The Enduring Value of Values."

The companies owned by Berkshire Hathaway, the huge conglomerate that Warren Buffett built, follow their leader in embracing corporate social responsibility, stewardship and sustainability. But the breadth and scale of the sprawling conglomerate can hide both the commitments and periodic problems. [...] While Berkshire has won plaudits for good corporate citizenship, critics complain about the absence of conglomerate-wide reporting on items such as social responsibility and sustainability. Many Berkshire subsidiaries — including Brooks, Johns Manville, Lubrizol and Shaw — are in the vanguard of such corporate stewardship. They join elite global companies in the practice of issuing formal responsibility and sustainability statements and audited reports on the corporate treatment of stakeholders, especially employees at home and abroad, and of the environment.

All of Buffett's bad bets add up to a big year (CNBC)

Some of Warren Buffett's big stocks bets have tanked in 2014, and the market hasn't let it pass unnoticed. In fact, anytime a stock Buffett owns declines, the "billions being lost" by Warren makes it into the headlines. With all the fuss over Warren Buffett's stock-picking prowess, or lack thereof, you might think Berkshire Hathaway has suffered mightily. You'd be wrong, though—way wrong. In fact, Buffett has plenty of reason to smile: Berkshire Hathaway is crushing the S&P 500. [...] While the headlines may not overstate the actual size of potential losses on individual stocks, they do overstate the importance of those losses to Berkshire Hathaway as a corporation. "Most investors overestimate the significance of Berkshire's equity portfolio," said Meyer Shields, Stifel analyst.

Buffett’s Backup Stock Pickers Stumble as GM Declines (Bloomberg)

At least half a dozen stocks that Ted Weschler and Todd Combs probably picked for Berkshire Hathaway Inc.’s portfolio are poised to end the year lower than where they started. They include energy companies that have slumped with oil prices; automaker General Motors Co., which has struggled with recalls; and Chicago Bridge & Iron Co., an engineering and construction firm that’s down more than 50 percent since Dec. 31. “It appears, on first glance, that Todd and Ted have underperformed the S&P 500 this year,” said David Kass, a professor at the University of Maryland’s Robert H. Smith School of Business who has studied Berkshire’s portfolio.

Buffett Reminds His Top Managers: Reputation Is Everything (WSJ MoneyBeat)

Warren Buffett‘s “All-Stars” are getting their biennial reminder this month that they need to guard Berkshire Hathaway Inc.'s reputation–and plan for the future. Mr. Buffett, who’s run Berkshire for the past five decades, sends a memo every other year to the managers of each of Berkshire’s 80-plus subsidiaries that emphasizes those two points. [...] The latest memo also reminds the managers–who he’s dubbed “The All-Stars”–to keep him in the loop about “who should take over tomorrow if you should become incapacitated overnight.” Generally, the managers operate with a large degree of autonomy, and Mr. Buffett says elsewhere in the letter that they can “talk to me about what is going on as little or as much as you wish.” But Mr. Buffett himself takes responsibility for keeping a roster of potential replacements for each of the leaders of Berkshire’s far-flung operations.

See’s Candies CEO eyes East Coast expansion (San Francisco Business Times)

See's Candies President and CEO Brad Kinstler, speaking after appearing on a Stanford University panel discussion this month, said he's eager to one day replicate the company's California success on the East Coast. But he's not saying when that will happen, noting that See's Candies shops can be found as far east as Pittsburgh. The South San Francisco-based company also operates temporary locations in East Coast cities during holidays when chocolates are in demand.

BYD Says Berkshire Hathaway Has No Intention to Cut Stake (Morningstar)

Chinese electric-car maker BYD Co. Ltd. (1211.HK), which is backed by investor Warren Buffett, Friday said Mr. Buffett's Berkshire Hathaway Inc. (BRKA) has no present intention to cut its stake in the company. BYD also said it wasn't aware of a substantial share sale by Mr. Buffett, who holds 225 million H shares in the company. The car maker's statement comes a day after its Hong Kong-traded shares plunged as much as 47%. BYD said its business operations remain normal and that it hasn't incurred substantial foreign exchange losses despite the weaker Russian ruble.

Berkshire Energy Fined for Eagle Deaths at Wyoming Wind Farms (Bloomberg Businessweek)

PacifiCorp, one of the utilities owned by Berkshire Hathaway Inc.’s energy unit, agreed to pay $2.5 million to settle charges that its wind facilities in Wyoming killed eagles and other birds. The deaths near the Seven Mile Hill and Glenrock/Rolling Hills wind farms violated the Migratory Bird Treaty Act, according to a statement today from the utility. PacifiCorp said it will pay $400,000 in fines, $200,000 in restitution to the Wyoming Game and Fish Department and $1.9 million to the National Fish and Wildlife Foundation to help protect golden eagles near the facilities.

More information in their Press Release:

PacifiCorp Settles With Federal Government Over Migratory Birds (Press Release)

PacifiCorp has been cooperating with federal authorities to reduce migratory bird mortality, particularly eagles, at its wind facilities. Following guidelines issued by the U.S. Fish and Wildlife Service in 2012, PacifiCorp drafted migratory bird protection plans and hired qualified wildlife observers to monitor the wind sites for eagle activity. Operators were notified to shut down turbines to reduce risks when eagles were observed in the area. Other measures the company took included removing features from the project landscape that attract prey species. As part of the settlement, PacifiCorp will take measures at the company’s wind facilities in Wyoming to increase eagle populations.

Pacific Corp To Close Deer Creek Mine (Press Release)

Following an unsuccessful 18-month attempt to sell the Deer Creek coal mine, PacifiCorp announced today it will close the mine in Emery County, Utah, because it has become too costly to operate for customers. PacifiCorp also signed a long-term coal supply agreement with Bowie Resource Partners LLC to supply coal for the Huntington power plant. Energy West Mining Company, PacifiCorp’s subsidiary operator of the mine, notified the mine’s 182 workers of the pending closure. [...] The Deer Creek mine has an estimated five years or less of reserves, but much of the remaining coal has higher ash and sulfur content that has made mine production considerably more expensive and has made it more expensive to comply with air quality standards. Bowie Resource Partners LLC has signed a contract to provide the coal needed for the Huntington power plant, and will source the plant from its mines in Utah. Rapidly escalating pension liabilities for the mine’s represented workforce was a large factor in the economic viability of the mine.

Buffett’s Smart-Grid Idea Takes Over Your Washing Machine (Bloomberg)

Buffett’s Northern Powergrid Holdings Co. is working with Siemens AG to test a so-called smart grid that has the ability to control when consumer appliances will be used in the home. Being able to better manage when electricity flows allows utilities to lower consumer costs by reducing the need for new equipment, and to better handle surges and gaps from intermittent sources such as wind and solar. The pilot program, known as the Customer-Led Network Revolution, involves just 12,000 households in the U.K. and is one of only a few such projects being tested worldwide.

Warren Buffett said 'I loved it' when LeBron James rejoined the Cleveland Cavaliers (Cleveland Plain Dealer)

Buffett was seated on the baseline near the Cavaliers bench as a guest of James and, perhaps more so, of owner Dan Gilbert, who sat next to Buffett. He watched James score 27 points, dish out 13 assists, and grab seven rebounds, then chatted with James and Gilbert in the locker room afterwards. Buffett, 84, chief executive officer of Berkshire Hathaway, is the second-richest man in the United States with a net worth of $71.6 billion, according to Forbes.com. He was donning a white No. 23 Cavaliers jersey Monday night. On Sunday, he attended a Detroit Lions football game and wore a No. 90 jersey for the Lions' Ndamukong Suh.

Berkshire News Briefs - 12/14/14

Berkshire Hathaway buys Charter Brokerage (Fortune)

Warren Buffett’s Berkshire Hathaway Inc on Friday said it was buying oil industry logistics provider Charter Brokerage from private equity firm Arsenal Capital Partners. [...] Charter is a U.S. petroleum and chemical drawback services provider. A drawback is the refund of import duties and taxes on a product when a form of that same product is exported. Charter Brokerage connects importers and exporters in the petroleum and petrochemical industries to arrange such refunds. Earlier this year, a source familiar with Arsenal’s potential sale of Charter valued the company at up to $500 million.

Warren Buffett Looks Ahead to Berkshire’s Next 50 Years (WSJ MoneyBeat)

Warren Buffett says that lately he’s been pondering the future of Berkshire Hathaway Inc. more than usual. Like in years past, he has been busy composing his annual letter to shareholders reviewing Berkshire’s performance in 2014. However, because 2015 will mark the golden anniversary of Berkshire Hathaway under “current management,” Mr. Buffett has also been laying out, on paper, his vision for Berkshire for the next 50 years. [...] Berkshire shareholders and those who follow the conglomerate’s activities will get a bonus next year: Mr. Munger is also writing down his vision for Berkshire for the next 50 years. Shareholders love Mr. Munger’s sometimes bruising wit and deadpan delivery, often in response to questions posed at Berkshire’s annual meeting.

Berkshire Hathaway Director Susan Decker Offers Rare Peek Into How The Berkshire Board Functions (Silicon Valley Business Journal)

Berkshire Hathaway's unusual operating style extends deep into the boardroom, according to Susan Decker, the former Yahoo! CFO who became a director in 2007. [...] "The board is not involved in the valuation decision for acquisitions. Warren will often discuss large deals with the board in advance, but usually at the conceptual level, rather than asking for approval of valuation and structuring," Decker said. "It's the opposite with other boards I'm on, in which approval is required by the board for the funds used for large acquisitions and for structuring considerations of the deal."

NetJets infiltrated private website, pilots say (Columbus Dispatch)

The NetJets pilots union is accusing company officials of impersonating a member of the union on Twitter and infiltrating a password-protected message board. [...] The union has a website for its members. Parts are public, but much of the site is private and password-protected. The lawsuit alleges that in September a NetJets official had several printouts of pages of “ confidential communications” from the message board. This created a “chilling effect on the ability of union members to communicate with one another and their union leadership and interferes with the union’s ability to fairly represent (the pilots),” the lawsuit states, adding that such surveillance is a violation of the Railway Labor and Stored Communication acts. [...] The lawsuit also charges that tweets from someone with the Twitter handle TwinkieTheKid tried to interfere with union elections, threatened to blacklist union pilots from other employment and posted photos of union members “conducting lawful picketing, thereby documenting the identities of union members who engaged in protected activities under the Railway Labor Act.”

Pilots picket NetJets at Art Basel (NY Post)

Pilots for private jet firm NetJets are picketing outside Art Basel Thursday against their own company, which is owned by Warren Buffet‘s Berkshire Hathaway, for a plan that would reduce their paycheck by 5 percent over five years, and have them work more hours. [...] Explaining, that the reason CEO Jordan Hansell “is telling us we have to take pay cuts is because Berkshire Hathaway is demanding a greater return, they want more profits to be sent up to Berkshire … our owners are some of the wealthiest people on the planet, really.”

Berkshire Hathaway insurance unit to enter Singapore (Omaha World Herald)

Berkshire Hathaway Specialty Insurance, a 2013 startup at Warren Buffett’s Berkshire Hathaway, has expanded to Singapore, where it plans to sell business coverage. The Boston-based unit of Omaha’s Berkshire said in a statement Monday it had received a license to sell insurance in Singapore, a city-state in Southeast Asia with a population of 5.5 million that is the world’s second-largest port and fourth-largest financial center. BHSI, started at Berkshire Hathaway with the defection last year of many top executives at New York-based American International Group, plans to sell coverage in Singapore for commercial property, business liabilities, energy and construction projects, and marine and financial risks.

Understanding The True Value of Warren Buffett's Berkshire Hathaway Inc. (Fool)

So what is the actual intrinsic value of Berkshire Hathaway and the litany of businesses it owns? Well, that's an easier question to ask than to answer. [...] Buffett is right in saying neither he nor Charlie -- nor anyone else for that matter -- can definitively calculate the true intrinsic value of Berkshire. But we can be certain it is worth a whole lot more than the $8.2 billion (or just 2.2% of its total value) the market currently suggests it is.

Berkshire Hathaway Owns 4.18% of Restaurant Brands International and Controls 14.37% of its Voting Shares (Valuewalk)

Upon the closing of the Burger King acquisition of Tim Horton’s on December 12, 2014, Berkshire purchased, for a total of $3 billion, a 9% perpetual voting preferred stock and exercised a warrant to purchase 8,438,225 common shares at the exercise price of $0.01 per share [...] However, Berkshire’s press release indicates that it now owns 4.18% of the outstanding common shares of QSR. [...] The 4.18% stake translates into approximately 20.2 million shares which, at BKW’s closing price on December 12 of $35.50 per share, are currently valued at about $715 million.

Buffett's wealth balloons as Berkshire hits high (CNBC)

Warren Buffett is now the world's second-richest person as Berkshire Hathaway's stock rallied to an all-time high. Forbes said its real-time ranking of the world's billionaires now estimates Buffett's wealth at $74.4 billion, about $1.5 billion more than Carlos Slim's $72.9 billion. Slim is now in third place.

Berkshire News Briefs - 12/2/14

Berkshire to Buy Weatherford Units for at Least $750M (Bloomberg)

Lubrizol, the chemical-additives business at Warren Buffett’s Berkshire Hathaway Inc. (BRK/A), agreed to buy two units from Weatherford International Plc for at least $750 million after the seller was squeezed by lower oil prices. The deal includes the Integrity Industries drilling-fluids business and Engineered Chemistry, which provides additives used in fracking. The price can climb to $825 million depending on performance, Geneva-based Weatherford said today in a statement.

Duracell To be Part of Berkshire’s Marmon and Get New Chief (WSJ MoneyBeat)

Duracell will get a Berkshire Hathaway Inc. executive as its new boss once current owner Procter & Gamble Co. closes the sale to Warren Buffett’s company. The executive, Angelo Pantaleo, currently works at Berkshire subsidiary Marmon Group, helping run its water business. Instead of becoming a full-fledged company at Berkshire, Duracell will be overseen by Marmon, people familiar with the matter said.

Berkshire's BNSF To Continue Ramping Up Investment (Investors Business Daily)

Berkshire Hathaway's BNSF Railway plans to spend $6 billion in 2015 to upgrade and expand its facilities to meet rising demand for rail transportation services. It would be a 9% increase for the Fort Worth, Texas-based company from its planned $5.5 billion capital spending this year. The bulk of the 2015 expenditures will go to replacing and upgrading rails, ties and other track components, the company said. BNSF, which operates 32,500 route miles of track in the U.S. and Canada, will also spend nearly $1.5 billion on expansion projects, including $500 million in the Northern region, where it's growing fastest.

AUC approves Altalink sale (Calgary Herald)

The Alberta Utilities Commission approved the $3.2-billion sale of electricity transmission firm Altalink to U.S. billionaire Warren Buffett’s Berkshire Hathaway Energy on Friday after it determined the transaction would create “no harm” for customer power rates or service. The AUC said it will continue to regulate AltaLink as it did before the change in ownership. [...] Over the next five years, Berkshire Hathaway Energy must re-invest 100 per cent of AltaLink’s earnings into the company or elsewhere in Alberta to support AltaLink’s three-year, $2.7-billion investment in Alberta’s energy infrastructure.

The Surprising Lessons Warren Buffett Learned from a Candy Company (Fool)

So what has made See's so successful? First, although it hasn't been a world-beater in growing its sales, it has been incredibly profitable and a cash-generating machine. From 1972-2011 it contributed a staggering $1.65 billion to the bottom line of Berkshire. Knowing it brings in roughly $85 million annually in pre-tax profits, there will soon come a day when the total contribution of See's to Berkshire will top $2 billion. And what has Berkshire done with all that cash? In 2007 Buffett answered that very question by revealing, "After paying corporate taxes on the profits, we have used the rest to buy other attractive businesses."

Berkshire Hathaway Energy: Economies of scale (WindPower)

Berkshire Hathaway Energy, part of billionaire Warren Buffet's empire, is one of America's largest developer and owner of wind energy. It has already committed about $15 billion to renewables, dwarfing most rivals' investments, and recently said it will invest $280 million more in Iowa wind farms. [...] With 719,000 customers in Iowa, Illinois, Nebraska and South Dakota, MidAmerican owns more wind capacity than any other rate-regulated utility in the US and has been instrumental in making Iowa the state with the highest proportion of wind on its grid. [...] When Wind VIII is complete, 3.35GW or about 39% of MidAmerican Energy's total owned generation capacity will come from the company's 1,715 wind turbines.

Warren Buffett’s favourite ice-cream chain Dairy Queen comes to the UAE (The National)

Berkshire Hathaway-owned Dairy Queen is coming to the UAE. The restaurant chain [...] has signed a franchise deal with Bajco Group to open as many as 20 outlets. The agreement covers DQ Grill & Chill restaurants and DQ Treat stores. The first outlet is due to open in the first quarter of next year, although the exact location is still to be decided. “The problem is that everybody wants to be in Dubai, which means locations are very hard to guarantee,” said Malik Bajwa, president of the Bajco Group. “We will likely open in the Northern Emirates such as Ras Al Khaimah, and we are also looking at Sharjah and Al Ain. Our flagship standalone store will most likely be in Dubai [...]”

Why Is Warren Buffett Obsessed With Consumer Goods Brands? (Bidness Etc)

Mr. Buffett’s Berkshire Hathaway Inc. has always opted to invest in companies with simple business models, as Warren Buffett firmly believes in them. Many of these companies are famous brands of consumer goods like ketchup, batteries, vehicle insurance, or fast food restaurants. Mr. Buffett’s interest in the consumer goods brands can be attributed to the fact that such brands have recurrent and foreseeable cash flows and earnings, with low risk associated to their business models.

Very busy Buffett makes time for Ndamukong Suh (Omaha World Herald)

Warren Buffett’s friendship with athlete Ndamukong Suh started when they were introduced to each other at a Nebraska football game by Tom Osborne, former head coach and athletic director. Since then, Buffett has become a regular financial adviser for Suh, part of a group that includes former TD Ameritrade CEO Joe Moglia, now a football coach, and athlete/businessmen Magic Johnson and Roger Staubach [...]

Warren Buffett On Investment Strategy - Full Interview Fortune MPW (YouTube)

The annual Fortune MPW interview with the world’s most successful investor - Warren Buffett, Chairman and CEO, Berkshire Hathaway. [38 minutes]

Or, if you don't have time for that video, here's this one...

Warren Buffett sings Sinatra to 400 women (YouTube)

Paul Anka and Warren Buffett give Carol Loomis a musical sendoff at Fortune’s Most Powerful Women summit. [5 1/2 minutes]

Berkshire News Briefs - 11/21/14

Warren Buffett Reaches Out to Spanish Property Through His New Real Estate Firm (Aura Real Estate Experts)

Last week, Buffett set up a developer company in Spain called Berkshire Residential Assets 1, with an objective of buying all property types, principally dwellings put up for sale by the sector’s companies, banks and Sareb, the bad bank. Known as the ‘Oracle of Omaha’, the investor plans to include rehabiliation and building construction services in its vehicle’s activities range. The third richest man on the globe has bought Catalan firm Merquinsa and has come to an agreement with Caixabank on reinsurance of its policy portfolio valued at €600 million.

Berkshire unit in fight over bird-death data (Omaha World Herald)

A company that operates at least 13 wind-energy facilities across three states is suing in federal court to block the U.S. government from releasing information about how many birds are found dead at its facilities. [...] Portland, Oregon-based Pacificorp, which is owned by Omaha-based Berkshire Hathaway, is seeking an injunction in U.S. District Court in Utah to prevent the Interior Department from releasing information it considers confidential. [...] The information AP sought was part of its larger investigation into bird and eagle deaths at wind farms and the administration’s reluctance to prosecute the cases as it advocated the pollution-free energy source. AP asked the U.S. Fish and Wildlife Service for data collected under federal permits given to companies to collect the carcasses of protected bird species, including eagles and migratory birds, found dead at their facilities.

Berkshire Hathaway enables mobile travel insurance claims (Travel Weekly)

Berkshire Hathaway Travel Protection is beginning to allow customers to file claims electronically by taking photos of receipts with their smartphones. Berkshire Hathaway will then electronically deposit a payment into a customer's bank or PayPal account instead of mailing a check. When filing claims, customers do not have to send in original claim receipts. The new program is called ExactCare, and Berkshire Hathaway is beta testing it with travel agents and other industry partners. It will do a full rollout in the first quarter of 2015.

Berkshire Hathaway Specialty Unveils New D&O Policy (Insurance Journal)

Berkshire Hathaway Specialty Insurance (BHSI) has unveiled its Executive First Side A Difference-in-Conditions (DIC) Directors & Officers Liability Policy, which provides protection for individual directors and officers in a concise form.

Berkshire Hathaway Specialty Adds Contractor’s, Business Crisis Cover (Insurance Journal)

Berkshire Hathaway Specialty Insurance (BHSI) has created a Contractor’s Broad Form Coverage, which is now available to contractors with BHSI’s primary general liability practice policies. In addition, BHSI is offering contractors its Business Crisis Event Cost Coverage endorsement with these enhancements, further strengthening contractors’ ability to respond in a time of need while managing their risk.

Dairy Queen Offers Signature Treats This Holiday Season (Restaurant News)

Not to be outdone by the pumpkin flavor craze, the Dairy Queen® system, a Berkshire Hathaway company, is bringing back its popular peppermint treat just in time for the holidays. The DQ® system announced today the return of the Candy Cane Chill Blizzard® Treat as the featured Blizzard of the Month for December.

Berkshire Hathaway 3rd Quarter Portfolio Update

Berkshire Hathaway released its quarterly portfolio holdings report (13F) last Friday. The big changes were a new stake SA-rec Express Scripts, a big increase in Charter Communications, and a complete sell-off of its stake in John Deere.

Here's a handy summary from Dataroma: Quarterly Activity -- Updated Holdings

Commentary:

Warren Buffett's Berkshire Hathaway adds Express Scripts, dumps Deere (Fortune)

In the third quarter, Buffett’s insurance conglomerate added shares of Express Scripts to its widely followed investment portfolio. Express Scripts processes the paperwork for insurance companies and pharmacies, and makes sure the pharmacies get paid. [...] But it was not a large bet for Berkshire, and it’s likely the investment was made by either Todd Combs or Ted Weschler, who have started to manage a larger portion of Berkshire’s portfolio. [...]

Berkshire made a few other changes to its portfolio in the third quarter. Berkshire sold all of its shares of Deere in the third quarter. It held nearly $360 million worth of the tractor maker’s shares at the end of June. Berkshire also added to its stake in car giant General Motors as well as credit card companies Mastercard and Visa, and tripled its stake in Liberty Media, which is part of John Malone’s cable empire.

Berkshire Takes Express Scripts Stake; Some Trades Secret (Bloomberg)

Holdings in General Motors Co. rose by 21 percent and an investment in Charter Communications Inc. more than doubled in size during the third quarter, Omaha, Nebraska-based Berkshire also said yesterday in a filing to the U.S. Securities and Exchange Commission. A stake in DirecTV climbed. [...]

The report omitted some data that was reported confidentially to regulators. The SEC sometimes allows companies to withhold data from the public to limit copycat investing while a firm is building or cutting a position.

Buffett requested confidential treatment in 2011 filings, as he spent more than $10 billion amassing a stake in International Business Machines Corp. He did the same while building a holding in Exxon Mobil Corp. in 2013.

Berkshire News Briefs - 11/13/14

Berkshire Hathaway Inc. Earnings: Don't Trust the Headlines (Fool)

Consider the coverage from Businessweek, headlined "Berkshire Profit Slips on Buffett's Tesco 'Mistake'," or the report by Fortune, titled "Berkshire Hathaway Earnings Take a Dip on Investments." Although those are factual realities about Berkshire's third quarter, the problem is, they don't tell the whole story. As it turns out, investors have no absolutely no cause for concern.

Warren Buffett’s Berkshire to Buy Duracell From Procter & Gamble (NY Times Dealbook)

Instead of simply being spun out from Procter & Gamble, Duracell will find a new corporate home – with Warren E. Buffett. The conglomerate run by the billionaire, Berkshire Hathaway, said on Thursday that it would acquire Duracell from P.&G. through an unusual transaction aimed at lowering the overall tax bill.

Warren Buffett's Berkshire Hathaway buys Duracell batteries (CNN)

Warren Buffett's Berkshire Hathaway has agreed to buy the Duracell battery brand from Procter & Gamble in a multi-billion dollar deal. Berkshire Hathaway announced Thursday morning it will make the purchase using about $4.7 billion in P&G stock. The consumer products giant also committed to pump $1.8 billion in cash into Duracell. The amount means Buffett is virtually cashing out his entire P&G holding to buy the battery brand. That holding had made him the fifth-largest shareholder in Procter & Gamble. [...] P&G bought Duracell back in 2005 as part of its $57 billion acquisition of Gillette. Who did they buy it from? Berkshire Hathaway, which at the time was the largest shareholder in Duracell's then-owner.

Buffett Set to Save More Than $1 Billion on Taxes in Swap (Bloomberg)

For the third time in a year, the billionaire chairman of Berkshire Hathaway Inc. has structured a deal in which he buys businesses in exchange for stock that has appreciated. The transactions, called cash-rich split-offs, allow him to avoid capital gains taxes that would be incurred if he sold the shares in the open market. Berkshire announced today that it would turn over about $4.7 billion in Procter & Gamble Co. stock in exchange for P&G’s Duracell battery business, which will be infused with about $1.7 billion in cash. Since Buffett’s cost basis on the shares was about $336 million, and corporate capital gains are typically taxed at 35 percent, structuring the deal in this way could save Berkshire more than $1 billion.

Buffett Said He Paid a Lot. $15 Billion Later, BNSF Is a Cash Machine. 'He Stole It' (Bloomberg)

Days after Warren Buffett announced his $26.5 billion buyout of railroad BNSF, he insisted that he’d paid a steep price to own a business that would benefit his company, Berkshire Hathaway Inc., over the next century. [...] Five years later, that assessment rings a bit hollow. Buoyed by an onshore oil boom, BNSF has become a cash machine for Buffett. The railroad had sent more than $15 billion in dividends to Berkshire through Sept. 30, according to quarterly regulatory filings, the latest of which was released last week. More stunning: The business is on pace to return all the cash Buffett spent taking it private by the end of this year.

BNSF profit is up, but volume held back by congestion (Omaha World Herald)

BNSF Railway, employer of 5,000 people in Nebraska, said third-quarter profit rose 5 percent, with freight volume falling 1 percent as congestion continues to strain the company’s rail network. [...] net income was $1 billion, up from $989 million, a year earlier. Revenue rose 4 percent to $5.8 billion. Freight volumes fell in three of the railroad’s four categories, as crew, locomotive and railcar shortages coupled with record grain harvests and crude oil production from North Dakota have led to shipping delays. The harsh winter and spring floods also hurt the nation’s railroads in getting trains to customers on time. To speed improvements, BNSF said in its quarterly update that it has budgeted $500 million more for capital improvements, on top of the $5 billion already allocated.

Burger King tests India waters, starts with 12 outlets (CNBC)

U.S. fast food chain Burger King Worldwide will open about 12 outlets in India over the next 60-90 days, Rajeev Varman, chief executive of the hamburger chain's India unit said on Saturday. [...] In India, the hamburger chain has changed its menu to sell mutton, chicken and veggie sandwiches. [...] Burger King is a late entrant in the country. Rival McDonald's Corp has been around for close to two decades and has already grown its network in tier two and three cities.

Berkshire Hathaway 3Q-2014 Earnings

Berkshire Hathaway released their 3rd Quarter earnings report this afternoon.

Summary & Commentary:

Berkshire third-quarter profit drops on investments, operating results gain (Chicago Tribune)

Berkshire Hathaway Inc said on Friday third-quarter profit fell 9 percent as it took a large writeoff on one of its investments, but operating results easily topped forecasts on improvement in its insurance, energy and railroad operations.

Net income slipped to $4.62 billion, or $2,811 per Class A share in the third quarter, from $5.05 billion, or $3,074 per Class A share, a year earlier.

Operating profit, however, rose 29 percent to $4.72 billion, or $2,876 per Class A share, from $3.66 billion, or $2,228 per Class A share. [...]

During the quarter, Berkshire wrote off $678 million on its investment in Tesco Plc , a British grocery chain being probed by regulators at home over accounting errors. Buffett has been reducing Berkshire's Tesco stake. [...]

Profit from the BNSF railroad rose about 5 percent to $1.035 billion. In utilities and energy, profit jumped to $697 million from $472 million. [...]

Book value per Class A share, Buffett's preferred measure of growth, rose 7.1 percent from the start of the year to $144,542.

Berkshire's cash stake soared during the quarter to $62.38 billion from $55.46 billion three months earlier.

Berkshire News Briefs - 11/6/14

Berkshire Hathaway is expected to release its 3rd quarter earnings after the market closes on Friday, November 7.

3 Things to Watch When Berkshire Hathaway Inc. Reports Earnings (Fool)

The elephant in the room with Berkshire Hathaway is the question surrounding what will be done with the mountain of cash it's currently sitting on. At the end of June, Berkshire had $55.5 billion in cold, hard cash sitting on its balance sheet. Astoundingly, that's nearly $20 billion more than it had in June of last year [...] In other words, in one year's time, Berkshire brought in cash roughly equivalent to the market value of Chipotle Mexican Grill. So the question becomes, what will Buffett do with all of that cash?

How Buffett's Brooks Running plans to become a $1 billion brand (Fortune)

Brooks Running Co., a subsidiary of Warren Buffett’s Berkshire Hathaway, hit the $500 million mark in annual sales last April. The company hit that milestone as a result of CEO Jim Weber’s efforts over a decade to specialize on running, rather than trying to be a mini-Nike and be all things to all people. The result is a 13% share of the performance running shoe market (Nike is in the low 40’s). Weber, CEO since 2001, says the company can become a billion-dollar brand at some point thanks to an overhaul to its apparel selection hitting stores in a year, a continued focus on marketing to runners specifically and sponsoring the right running events.

Crash into flight simulator company stops training (HutchNews)

(FlightSafety has been owned by Berkshire Hathaway since 1996.)

A twin-engine Beechcraft King Air crashed into the FlightSafety Cessna Pilot Learning Center on Thursday, killing the pilot and three people inside flight simulators. The cause of the crash, which also seriously damaged the building, is still being investigated. [...] FlightSafey will "definitely have to scramble" but has a large network to help and is good at managing situations, said Rolland Vincent, an aviation consultant. "This is very disruptive," Vincent said. "These flight simulators are very busy and are booked well in advance."

More:

FlightSafety operates five centers in Wichita (The Wichita Eagle)

The building struck by a Beechcraft King Air B200 at Wichita Mid-Continent Airport shortly after takeoff Thursday is one of FlightSafety International’s five centers in Wichita. Wichita has the highest concentration of FlightSafety centers in the world, the company has said. Pilots and maintenance technicians come to Wichita from around the world to train in Cessna, Learjet, Beechcraft and Hawker products.

Three bets going sour on Buffett (MarketWatch)

(Referencing losses with Tesco, IBM, and Coca-Cola.)

Judging by the share price alone, Warren Buffett's Berkshire Hathaway is having a terrific 2014. After all, Berkshire Hathaway is up 17.7% year to date, trouncing the 7.95% rise in S&P 500. [...] Recently, several of Buffett's high-profile bets have fallen out of bed. Each stumble has its own particular explanation. But taken together, they share an overarching theme. The moats that protect these businesses aren't as wide as they once were. Even worse, competitors aren't even bothering to try to cross them. They're just inventing a completely different way of doing business.

MidAmerican Signs Longterm Wind-Power Services Deal With Siemens (Bloomberg Businessweek)

MidAmerican Energy Co., the utility owned by Warren Buffett’s Berkshire Hathaway Inc., has signed an agreement through June 2024 with Siemens AG to support a dozen wind farms in Iowa. Siemens will provide service and maintenance for 958 turbines that will have a combined capacity of more than 2.2 gigawatts, according to a statement today. Financial terms of the agreement weren’t disclosed.

Buffett Railroad’s Shale Focus Blunts Ports’ Comeback Bid (Bloomberg Businessweek)

Seattle and Tacoma are being stymied in their push to regain market share from Canada as railcars destined for the harbors sit idle on tracks across the U.S. Pacific Northwest. Even as the ports, on Washington’s Puget Sound, agreed to consolidate some operations after a century of competition, 40-fold growth in shipments of crude from the Bakken oil fields is straining the region’s main railroad company, BNSF Railway Co., causing delays that have helped shift traffic to less congested harbors in Canada. In September, as many as 150 grain cars piled up in nearby rail yards, said Dale Frazier, manager of Seattle Bulk Shipping Inc.

Forest River, Thor Foundation to Aid Employees (RV Business)

Forest River Inc., a Berkshire Hathaway company, and publicly held Thor Industries Inc. yesterday (Nov. 4) announced the establishment of an unprecedented community foundation set up to benefit the 15,000-plus employees of the two RV-building corporate giants and their families during times of need. The Forest River/Thor Community Foundation will be jointly funded by the two companies and will provide grants of up to $20,000 per qualifying employee or family to help cover emergency financial needs incurred in a variety of unforeseen family crises such as acute illnesses, natural disasters, fires or other hardships. Both firms are based in Elkhart, Ind.

Berkshire News Briefs - 10/31/14

Halloween Edition! (Make your own spooky sounds for ambiance while you read this.)

The Pampered Chef Names Tracy Britt Cool Chief Executive Officer (BusinessWire)

The Pampered Chef, Ltd., a Berkshire Hathaway company, today announced that it has appointed Tracy Britt Cool as Chief Executive Officer, effective November 1, 2014. Cool, 30, has been with Berkshire Hathaway for five years, serving as Financial Assistant to the Chairman. In this role, her responsibilities included conducting investment research, analyzing acquisition opportunities, and advising Berkshire Hathaway subsidiaries in various industries. Cool will continue to serve as chairman of Berkshire Hathaway companies Benjamin Moore, Larson-Juhl, and Oriental Trading Company, and will remain on the board of the H.J. Heinz Company.

The Education of Warren Buffett’s protégé (Fortune)

Tracy Britt Cool has spent the last five years getting schooled on spotting talent and running a business. Now she’s the newest female CEO in the Berkshire portfolio. [...] Buffett’s giving Cool, now 30, her first big operating role. On Monday, the Oracle of Omaha announced that Cool will become the CEO of Pampered Chef on November 1, replacing founder and current chief Doris Christopher, a home economics teacher who started the Pampered Chef in 1980 by selling kitchen tools from her basement. Christopher will remain at the company as chairman.

Warren Buffett's newspaper division sells direct mail marketer (Omaha World-Herald)

Warren Buffett’s newspaper division has sold its direct mail marketing company. BH Media Group of Omaha sold World Marketing Inc. to Milwaukee businessman Robert M. Kraft and an investment group for an undisclosed amount. [...] World Marketing’s corporate headquarters and administrative operations in La Vista are moving to Milwaukee. Offices and production facilities will remain in Atlanta, Chicago, Dallas and St. Louis. Altogether, the company has 450 employees. World Marketing processes more than 1 billion pieces of mail a year for clients including American Airlines, Kraft Foods, Bristol-Meyers Squibb and Blue Cross Blue Shield.[...]

Buffett’s NetJets China Growth Slowed by Austerity Moves (Bloomberg)

NetJets Inc., the aviation unit of Warren Buffett’s Berkshire Hathaway Inc., will need about five years to make self-sustaining the chartered jet business it began last month in China, as government officials shun private jets. The Chinese Communist Party’s austerity measures are dragging on growth for private aviation, which also faces an economic slowdown and a lack of general aviation airports, said Robert Molsbergen, president of NetJets’ executive jet management unit. “Typically a lot of the flying in China was done by Chinese officials and that basically is almost all gone,” Molsbergen said [...]

Berkshire Hathaway Names Mary Rhinehart Chairman of Johns Manville (BusinessWire)

(Not surprising, since she was already CEO and President, which is why Tracy Britt Cool gets the top headline this week while this one is tucked in the middle.)

Johns Manville (JM), a Berkshire Hathaway company and global building products manufacturer, today announced that Mary Rhinehart has been named Chairman of the company. Rhinehart was appointed as JM President and Chief Executive Officer in November 2012. [...] Rhinehart has held a variety of roles during her 35-year career, including as general manager of several Johns Manville business units. Before being named CEO, she was Chief Financial Officer, providing her breadth of experience in all financial operations of the company, including M&A. From human resources to supply chain management, Rhinehart’s wide range of responsibilities have also encompassed global business management and strategic business development.

Berkshire’s BNSF to Add Surcharge on Older Oil Tank Cars (Bloomberg)

BNSF Railway Co. plans to apply a $1,000 surcharge for each older crude tank car, denting profits for shale drillers in North Dakota. The railroad owned by Warren Buffett’s Berkshire Hathaway Inc. is the first major U.S. operator using fees to encourage shippers to scrap the puncture-prone older cars. The charge, which goes into effect Jan. 1, would add about $1.50 a barrel to the cost of transporting oil on them.

Berkshire Hathaway's QSR Chain Dairy Queen Seeks Partner For India Foray (DealCurry)

(QSR = "Quick Service Restaurant")

US based ice cream and QSR chain, Dairy Queen is looking for a partner to foray into the Indian QSR market. The unit of Berkshire Hathaway’s is planning to open its burger chain in the country. The company was said to be in talks with Reliance Retail Ltd. for launching its dairy business in the country, however the deal did not consummate.

50 Warren Buffett Quotes That Will Make You a Better Investor (Fool)

Free e-Book (PDF) from the Motley Fool.

Warren Buffett's success is inspiring. The fact that his ascent has not been successfully replicated is confounding. His nearly 20% annualized returns may go uncontested in the investing hall of fame. What's more, his disarmingly simple philosophy has been freely shared for others to mimic. The pages of this book seek to explain the very best of Buffett's advice.

Berkshire News Briefs - 10/24/14

Earnings announcement for BRK/B: Nov 07, 2014 (Nasdaq)

Warren Buffett Puts Wind in Berkshire’s Sails (WSJ)

Through a majority-owned subsidiary, Berkshire Hathaway Energy, Mr. Buffett plans to double the $15 billion already committed to renewable-energy projects through early this year, and he is on the hunt for more utility acquisitions. [...] The energy unit is key to Berkshire’s future—it generates more than 7% of the conglomerate’s earnings, and is likely to climb—while also providing Mr. Buffett a way to invest Berkshire’s ever-growing cash pile. [...] Another reason many Buffett watchers are paying attention: Berkshire Hathaway Energy is run by Greg Abel, a 52-year-old Canadian who is among the younger executives seen by analysts as possibly succeeding the 84-year-old billionaire as CEO.

Warren Buffett's Berkshire equity portfolio goes awry; loses $5 bn since June 30 (Economic Times)

Sharp drops in many of the stocks owned by Buffett's Berkshire Hathaway in recent weeks hit the sprawling conglomerate's equity portfolio hard. The loss on seven of those holdings alone totals more than $5 billion provided Berkshire's stakes have remained the same since June 30, the last date for which they were disclosed. In particular, Berkshire has been stung by large holdings in IBM and long-time Buffett favorite Coca-Cola, both of which tumbled after disappointing third-quarter results. His penchant for energy stocks hasn't helped either, given the damage done to the prices of energy assets by the slumping global oil price.

Warren Buffett sells more Tesco shares (The Guardian)

Berkshire Hathaway has further reduced its stake in Tesco in the wake of the admission by the investment group’s boss, Warren Buffett, that buying into the troubled supermarket group was a “huge mistake”. In a statement to the stock exchange, Tesco revealed that Berkshire Hathaway had reduced its holding on 13 October to less than 3% – one of the thresholds at which a company must inform the market.

Berkshire Hathaway: 20%+ Undervalued? DCF Calculation (Seeking Alpha)

The intrinsic value of BRK.B is calculated to be $166.94. This represents 22% upside from today's price. Zacks has recently upgraded Berkshire to 1 (Strong Buy) as analyst estimates have moved upwards. Berkshire is well diversified and is strongly equipped to handle adverse macroeconomic conditions. The company has returned an impressive 19.7% average growth in book value for the last 49 years.

Where in the World Is Warren Buffett? Everywhere (Bloomberg)

There's the Warren Buffett of the flavor industry. There's the Warren Buffett of “super-fancy hotels.” There are Buffetts of barges and of bass fishing, of Tampa, Thailand and Turkey. There's even a Warren Buffett of C-block, where a stock-picking, Buffett-quoting convicted murderer has been dubbed the Oracle of San Quentin. [...] while people around the world are anointed "The Warren Buffett of..." this and that, willy-nilly, the 84-year-old investor actually wants his personal brand to take a back seat to the Berkshire Hathaway's.

Berkshire News Briefs - 10/16/14

Buffett's stock pickers are beating the market (Fortune)

In his annual letter to shareholders in April, Buffett revealed that both Weschler and his partner Todd Combs once again “handily” beat the market. “They have made Berkshire billions already that we wouldn’t have otherwise made,” the Oracle of Omaha told CNBC that month. “They both have a fundamental combination of soundness and brilliance.” [...] The company is required to reveal its holdings once a quarter, but it has no obligation to explain which manager chose a particular stock or at what price. As a result, just how well the duo have done has remained a mystery. Fortune set out to solve that mystery. We scrutinized public fillings, sounded out investing pros who know Buffett, Combs, and Weschler, and made some educated guesses.

Dairy Queen Customer Data Compromised by Backoff Malware (Bloomberg)

This story first broke last month when DQ suspected their credit card transactions had been compromised. It's back in the news this week because DQ has now confirmed it after investigating.

International Dairy Queen, the ice cream chain owned by Warren Buffett’s Berkshire Hathaway Inc., said customer data were compromised by hackers. The breach with the so-called Backoff malware affected 395 of more than 4,500 U.S. locations, the unit of Omaha, Nebraska-based Berkshire said today in a statement. The systems contained customer names, and the numbers and expiration dates of their payment cards. Less than 600,000 cards were affected, said Dean Peters, a spokesman for Dairy Queen. The Backoff software has been used to target more than 1,000 businesses, according to the U.S. Secret Service.

Putting the Berkshire Hathaway Brand Before Warren Buffett (NY Times)

More than ever, Mr. Buffett is promoting the Berkshire Hathaway brand instead of himself, the billionaire investor. In a marked shift in marketing strategy, he is pushing the relatively unknown name of his holding company to attract customers to his numerous businesses. [...] The extension of the brand is more than a marketing tactic. At the age of 84, Mr. Buffett faces persistent questions over succession at his conglomerate, whose $336 billion stock market value makes it the country’s fifth-largest company. “This is really an effort to make the brand as recognizable as Buffett himself,” said Greggory Warren, an analyst at Morningstar Research. “He expects the Berkshire brand to replace him longer term.”

And yes, as noted in the article, you can buy Berkshire Hathaway logo clothing, made by subsidiary Fechheimer, here on the Berkshire Wear website.

Warren Buffett rolls out the Berkshire Hathaway brand (Financial Times)

Warren Buffett plans to license the Berkshire Hathaway name to estate agencies in Europe and Asia, in the next phase of a campaign to turn his widely respected investment company into a consumer brand. [...] The number of US estate agencies using the Berkshire Hathaway HomeServices brand will swell to almost 1,400 by next spring, said Earl Lee, chief executive of HSF Affiliates, a franchising joint venture between Berkshire and Brookfield Asset Management. The company will then shift to looking for partnerships with big players in parts of the US where it is not yet strong, including the Midwest, and internationally, including the UK, continental Europe and Asia.

Buffett’s MidAmerican to Invest $280 Million in Iowa Wind (Bloomberg Businessweek)

The energy business at Warren Buffett’s Berkshire Hathaway Inc., which has already committed about $15 billion to renewable power, plans to invest an additional $280 million in Iowa wind farms. The MidAmerican Energy Co. unit will develop a new site in Adams County and expand another in O’Brien County next year, the Des Moines, Iowa-based company said today in a statement. Blades for 67 new turbines will be built at a Siemens AG plant in the state.

Warren Buffett Tells You How to Handle a Market Crash (Fool)

"It's better to have a partial interest in the Hope diamond than to own all of a rhinestone," wrote Buffett in 2013.

Peter Buffett shows that even the son of a billionaire can pull up those bootstraps (Washington Post)

People always asked Peter Buffett about his famous last name. “Everybody thought I was related to Jimmy Buffett,” said the composer. “That was the constant question.” Sadly for Parrotheads, he had no ties to the “Margaritaville” songwriter. Once in a blue moon, someone would wonder if he knew that investor in Omaha. Yes, he would answer, I’m Warren Buffett’s son. For most of his 56 years, Peter lived a pretty average, anonymous life: marriage, kids, a low-profile music career. That all changed in 2006 when his dad announced to the world that he planned to give away the bulk of his fortune — now estimated at $67 billion — including a billion to each of his three kids’ charities.

Berkshire News Briefs - 10/8/14

Buffett to Buy Van Tuyl, Create Berkshire Auto Unit (Bloomberg)

Warren Buffett’s Berkshire Hathaway Inc. agreed to buy Van Tuyl Group, the largest privately owned U.S. auto dealership group. The business, with more than 100 franchises, will be renamed Berkshire Hathaway Automotive and continue to be run by Larry Van Tuyl, Omaha, Nebraska-based Berkshire said today in a statement that didn’t disclose terms. The target company has more than $8 billion of revenue. “I fully expect we’ll buy a lot more dealerships,” Buffett told CNBC in an interview today. “We’ve gone a long time without getting into automobiles, but Larry’s got an operation that we think could be scaled up a lot from where it is.”

Buffett's Van Tuyl purchase puts top retailers in cross hairs (AutoNews)

When Buffett signed a deal to buy Van Tuyl Group last week through his Berkshire Hathaway Inc. investment company, he clearly signaled that the top four dealership groups are in his sights. When a CNBC host mentioned AutoNation Inc. and said it was the country's biggest auto retailer, Buffett quipped: "Temporarily." "This is just the beginning for Berkshire Hathaway Automotive," Buffett said of the new venture, which is being called the biggest acquisition by far in automotive retail history. Terms weren't disclosed, but outsiders estimated the all-cash price tag at over $4 billion.

Ironwood Plastics expanding to keep up with growing demand (Plastics News)

Custom injection molder Ironwood Plastics Inc. has embarked on an ambitious expansion program. The Ironwood, Mich., company will spend $19 million in Twin Rivers, Wis., to buy a building next door to its factory there and to add injection presses. [...] Ironwood’s new strategic push is partly due to it being part of CTB Inc., a Milford, Ind., company that sells internationally. CTB primarily makes agricultural products and most of its molded components are made in house but Ironwood molds a few complex parts for CTB. CTB has been owned by investment giant Berkshire Hathaway Inc. since 2002. The CTB and Berkshire Hathaway connections help Ironwood’s access to capital and give customers more confidence to do business with the custom molder. CTB acquired Ironwood in 2010 from the Stephens family, which had founded it in 1979.

Billionaire Buffett Says Tesco Investment Was ‘A Huge Mistake’ (Bloomberg)

Billionaire investor Warren Buffett said his investment in Tesco Plc was a “huge mistake,” as the U.K. supermarket leader’s share price remains close to an 11-year low amid declining sales and an accounting probe. [...] Buffett’s Berkshire Hathaway Inc. has held Tesco shares since March 2006, when it acquired a stake for $328.7 million. By 2012, the holding had reached 5.08 percent of the grocer’s shares, worth about 1.3 billion pounds ($2.1 billion). More recently, Buffett has been cutting the stake, owning 3.7 percent of the shares as of Dec. 31, according to Berkshire Hathaway’s annual report.

Warren Buffett’s Big Bet on Renewables in Nevada (NY Times)

Thanks in part to the transmission lines alongside Interstate 15, Mr. Buffett’s company, Berkshire Hathaway, and its subsidiary Berkshire Hathaway Energy stand to make steady, predictable profits in an energy market undergoing transformations. “This is not a value play,” said Christine Tezak, managing director of research at ClearView Energy Partners, referring to Mr. Buffett’s normally conservative investing approach. “He’s looking at this as a way to participate in the structural shift taking place in the power and energy industry.”

California Is Integrating Buffett’s Western Utilities Into Its Grid Balancing Market (GreenTechGrid)

Starting next month, PacifiCorp will start simulating the trading of generation and grid capacity every fifteen minutes on CAISO’s market, with “financially binding” operations to start in November, according to the U.S. Energy Information Administration. CAISO is also working with NV Energy to add most of Nevada’s grid to its EIM as well, with operations set to start in fall 2015. Both utilities are owned by Berkshire Hathaway [...] The rewards, according to a study by the Energy and Environmental Economics (E3) research group, could add up to $21 million to $129 million for PacifiCorp by 2017 or so, as the company buys lower-cost power from California’s grid or sells its own capacity when CAISO prices are high.

Buffett’s ‘All-Equities’ Pensions Escape Bill Gross Drama (Bloomberg)

Bill Gross’s departure from Pacific Investment Management Co. sent ripples through the bond market. Berkshire Hathaway Inc. pensioners didn’t feel it. Warren Buffett, Berkshire’s chairman and chief executive officer, said today that he didn’t know of a single investment that his company or its dozens of subsidiaries had with Pimco, manager of the world’s largest bond fund. Why? “We manage all of our pensions internally, except for those connected with the utility business,” Buffett said today in an interview with CNBC. “We are all-equities, anyways. We don’t have any bonds in our pension funds.”

The Future Realignment of Berkshire Hathaway Will Be an Investors’ Bonanza (Fool)

[...] even though the Omaha, Neb.-based billionaire is continuing to grow his empire, completing two multi-billion dollar deals in 2013 alone, it is inevitable that Berkshire will someday reverse course and unleash the greatest spin-off investment bonanza the world has ever seen. [...] Upon Berkshire's realignment, these two deals alone could spawn upwards of 50 independent companies. Heinz will be able to spin off over 10 of its corporations to shareholders, and I envision Hortons, along with Burger King, following suit with over 40 separate entities.

Buffett Gets His Wish: Coke Is Revising Executive Pay Plan (Forbes)

It’s been a good week for billionaire investors: on Tuesday, Carl Icahn got his way when eBay announced that it and PayPal will go their separate ways. And on Wednesday, Coca-Cola announced that it will revise the executive pay structure that Warren Buffett recently called “excessive.”

Warren Buffet Dismisses Berkshire's Low Score On LGBT Policies; Says He's Supportive (On Top Magazine)

Berkshire Hathaway Chairman and CEO Warren Buffet has dismissed a report that gave his investment firm a low score for its LGBT policies. Berkshire scored a “0” on the Human Rights Campaign's (HRC) annual Corporate Equality Index (CEI), which ranks companies based on employment policies and practices pertaining to lesbian, gay, bisexual and transgender employees. [...] “I do not set the policies for the 75 companies,” he said, then added, “Certainly, our managers know how I feel. I am 100% for full rights, in every respect, for gays and lesbians.”

Berkshire News Briefs - 10/1/14

The wrath of Warren Buffett: How Benjamin Moore almost broke his promise (Fortune)

Benjamin Moore is on its third CEO in 2 years, and a combination of strategic zigzags and the dealers’ feelings of betrayal has caused the company to fall behind its main rivals. Moore’s revenues rose a cumulative 40% between 1999 and 2013, while competitors Sherwin Williams and Valspar boosted their revenues, 104% and 196%, respectively. Moore’s revenues declined in the first half of 2014 [...] Buffett says he’s comfortable with the no-big-box stance, even if it means lower sales volume for now. He emphasizes the fact that Moore is a high-end product, what he calls “the best paint out there.” As he puts it, “They’re not the paint for everybody. We’re not in, and we won’t be in, the low-priced paint set… We will not be the top ever in market share. The mass market is going to be bigger than the high-end market. But there will always be a high-end market.”

Buy Like Buffett: A Love Story (Forbes - Video)

Buy Like Buffett: A Love Story is the journey of a young couple expressed through the lens of Berkshire Hathaway Inc. companies, because what says “I Love You” better than a box of See’s candy?

Warren Buffett’s Energy Company Says Net Metering Should Be ‘Eliminated’ (Green Tech Media)

In a strategy document written by SVP Brent Gale for a legal conference in July, Berkshire Hathaway Energy outlined its position on net metering, saying it should be scrapped in favor of a system that recognizes utility fixed-grid costs and utilizes distributed generation at times when it's needed most. [...] Berkshire Hathaway owns a number of regulated utilities, including NV Energy and PacifiCorp. NV Energy and Rocky Mountain Power, a power company run by PacifiCorp in Utah, are both lobbying to make changes to net metering and add fixed charges to the bills of customers getting credited for their solar power.

Similar Story: Warren Buffett's Berkshire Hathaway Energy wants to get rid of net metering (Utility Dive)

NetJets gets OK to begin serving China (Columbus Dispatch / AP)

NetJets said yesterday that its new joint venture soon will begin offering private charter flights in China now that regulators there have granted the company an operating certificate. NetJets, which sells partial ownership interests in business jets in the United States and Europe, has been working since 2012 to gain approval to set up operations in China.

Berkshire Expands in Company-Crime Insurance With New AIG Hire (Bloomberg)

Berkshire Hathaway Inc.’s specialty insurance business, created last year to expand into new niches, is adding sales of coverage to protect employers against misdeeds by their staffs. Brian O’Neill was hired from American International Group Inc. (AIG) to lead the push into the fidelity and crime insurance market, the unit of Omaha, Nebraska-based Berkshire said today in a statement.

AIG And Berkshire Hathaway Had Secret Non-Compete Agreement (ValueWalk)

Berkshire Hathaway Inc. and American International Group Inc had a secret non-compete agreement in place over hiring employees for a year that has now ended, according to a recent Bloomberg TV interview. The interview revealed that American International Group Inc threatened legal action in order to encourage Warren Buffett’s Berkshire Hathaway Inc. to agree not to hire additional AIG’s executives for one year. Berkshire had poached AIG executives Peter Eastwood, David Fields, Sanjay Godhwani and David Bresnahan in 2013 for what Buffett described as a “big time” expansion into business insurance coverage. [...] Benhosche didn’t indicate exactly what the executives may have done wrong, but made references to stealing intellectual property and poaching client business.

Berkshire Hathaway invests in Northwoods values (Stevens Point Journal)

The name of the company is fairly new, but the presence of a travel insurance company led by John Noel in central Wisconsin is anything but. [...] Noel, now president of BHTP, founded Noel Group in 2006 after selling Travel Guard, a travel insurance company he founded in his basement in 1985. Today, Berkshire Hathaway Travel Protection employs about 230 people in Wisconsin and Florida and is expected to grow to about 2,000 workers over the next five years. Noel said in an interview that the majority of those jobs will be located in central Wisconsin, and that he's happy to continue to provide an opportunity for people to live and work in the region.

FlightSafety’s pilot training center at Port Columbus costing $110M (Columbus Business First)

FlightSafety International’s new pilot training facility at Port Columbus International Airport clearly is a major project at 55,000 square feet and the potential to add 90,000. But new information made public by JobsOhio shows just how big the Berkshire Hathaway (NYSE:BRK.B) subsidiary’s investment is - $110.5 million. [...] FlightSafety’s $110.5 million capital investment will help it retain 137 jobs and create another 18, adding $1.2 million to its local payroll, according to JobsOhio’s report. The sister company to Columbus-based NetJets declined to breakdown those costs, but industry sources in May said its six flight simulators will run into the millions of dollars.

Buffett’s Berkshire Hathaway among possible bidders for Oncor Electric (Ft. Worth Star-Telegram)

CenterPoint Energy, Warren Buffett’s Berkshire Hathaway and Hunt Consolidated of Dallas are among companies that signed confidentiality agreements to explore bids for Energy Future Holdings’ Oncor electricity distributor, people familiar with the matter said. [...] Dallas-based EFH, which was taken private in a record leveraged buyout seven years ago, filed for bankruptcy in April with a plan to split off the side of the company that owns the profitable Oncor business. In July, the company — which also operates TXU Energy and Luminant — bowed to pressure from lender groups to gather bids for Oncor. [...] Oncor, which operates the largest distribution and transmission business in Texas, delivers electricity to more than 3 million homes and businesses and serves Dallas-Fort Worth. The company is prized because it’s poised to take advantage of population growth in the state and it has said it plans to invest $1 billion annually in power lines through 2018.

Redundancy costs push Fruit of the Loom further into the red (Irish Independent)

New accounts filed by Dublin registered FOL International - which is owned by the Warren Buffet controlled company Berkshire Hathaway - show that the firm recorded a pre-tax loss last year of €6.78m and this followed pre-tax losses of €23.49m in 2012. FOL International represents clothing manufacturer Fruit of the Loom's European operations. The accounts show that the loss last year occurred after restructuring costs of €6.35m. At its peak, iconic US brand Fruit of the Loom employed 3,500 people in six plants on the island of Ireland. Last year's restructuring comes almost a decade after the company announced in 2004 that it would shut its remaining two factories with the loss of 650 jobs in Donegal and Derry.

Warren Buffett's $750 million grocery bill (WSEE-12)

Warren Buffett may be feeling rotten after investing in a British grocery chain that's gone bad. His famed investment company, Berkshire Hathaway, is the third biggest Tesco shareholder, with a stake of almost 4%. Tesco is the U.K.'s leading supermarket operator. Berkshire is now nursing losses of about $750 million on the investment after the shares plunged by about 43% this year. It paid about $1.7 billion for the stake.

Similar story if you want to read more about Tesco:

The Rise and Fall of U.K. Grocer Tesco That ‘Owned The World’ (Bloomberg)

Berkshire Hathaway Inc. Vice Chairman Charles Munger recently summed up the past seven years of Tesco Plc, Britain’s biggest grocer, in a beat. “Tesco owned the world,” said Munger, whose firm last disclosed a 3.7 percent stake in the company. And “one day, it stopped working so well.”

An alternative take on Buffett and Burger King (MarketWatch)

What really made this deal come together was the financing provided by Warren Buffett's Berkshire Hathaway. He was more than eager to do so. On the surface it may be because of the generous preferred financing that was packaged together by Buffett for Burger King, $3 billion of which yields 9%. However, when I look at the deal, Buffett is providing financing at a cheaper rate than what Burger King currently borrows for long-term financing. Why would he do that, as the company is riskier after the acquisition than before? One could argue that the convertibility factor of the preferred stock has some benefit to Buffett. However, is Burger King a company which would normally fit his investment criteria?

How Warren Buffett Plans to Make You Money (Fool)

While the headline news will always be about what stocks Berkshire Hathaway buys and sells, it's critical to understand Buffett doesn't see those investments as the driving forces which will deliver shareholder returns. His first two points indicate as much, and instead he wants us to see that the things which will propel the value of Berkshire Hathaway forward into the future will come from the collection of operating businesses which now make up Berkshire itself.

ATCO lawyer argues verbal cross-examinations needed around sale of AltaLink (Calgary Sun)

Competitor ATCO continues their effort to derail the BH Energy purchase of AltaLink. I thought this story was over, but apparently not.

The impending sale of AltaLink to business mogul Warren Buffet’s energy arm should be subject to an oral cross-examination to protect Alberta consumers from runaway electricity rates, an ATCO lawyer argued Friday. [...] But SNC-Lavalin lawyer Bernette Ho said the reviews have already been fairly handled and accused ATCO of not being fully forthcoming during the process. AltaLink officials say ATCO has tried unsuccessfully to purchase their company.

Berkshire News Briefs - 9/20/14

Vilsack meets with Buffett on rail service issues (Des Moines Register)

Agriculture Secretary Tom Vilsack said Tuesday he met with Warren Buffett last week to press the billionaire investor to make sure his railroad, BNSF Railway, was ready for the expected record corn and soybean harvest this fall. The 45-minute meeting Friday comes as BNSF and Canadian Pacific Railway work to reduce a backlog of grain car deliveries that started last winter and spring. The delays were largely the result of a robust 2013 harvest, higher coal and oil volumes, and the extraordinarily long, cold winter that reduced the size and speed of trains that operated. [...] The White House, lawmakers and the Surface Transportation Board, which oversees the railroads, have said BNSF has taken meaningful strides to reduce its car backlog, while CP has been criticized for moving with less urgency and not being as transparent.

Berkshire Hathaway Specialty Insurance plans to offer life sciences coverage (Boston Globe)

Berkshire Hathaway Specialty Insurance, a Boston-based unit of Berkshire Hathaway Inc., said Thursday that it is expanding its underwriting capabilities to address the risks of the life sciences industry. In a press release, Berkshire Hathaway Specialty Insurance, or BHSI, said that it is “targeting a range of life sciences product liability risks, including medical devices, nutraceuticals, generic pharmaceuticals, compounding pharmacies, and clinical trials.

Berkshire newspaper group buys remaining interest in N.J. publisher (Omaha World Herald)

BH Media Group, a division of Berkshire Hathaway Inc. of Omaha, has announced that it will acquire the remaining 50 percent interest of New Jersey publisher Catamaran Media Co. LLC. Catamaran publishes 12 weekly newspapers in Atlantic and Cape May Counties with a total weekly distribution of more than 93,000. With the purchase of the Press of Atlantic City in August 2013, BH Media Group acquired an initial half-interest in the chain.

Doubling Down on Pot: Buffett Sells Upper Deck, Room to Grow (Bloomberg)

Cubic Designs Inc., a unit of Berkshire’s MiTek business that makes platforms for maximizing usable floor space in warehouses, sent about 1,000 fliers to weed dispensaries in recent weeks, offering to help growers expand the number of plants they cultivate. [...] Cubic Designs spotted the opportunity after a few pot growers approached the firm about its platforms, or mezzanine systems, according to Shannon Salchert, the company’s marketing coordinator. Warehouse space has gotten tight in places like Denver, where growers are looking for facilities to cultivate their product. That demand has allowed landlords to raise prices. “We sold a few mezzanines into that market and decided internally, ‘Why don’t we do some marketing?’” Salchert said today in a phone interview.

Berkshire Hathaway Inc. Chairman Buffett Sees Small Business Saving Detroit (Insider Monkey)

Berkshire Hathaway Inc. Chairman Warren Buffett believes Detroit is on the road to recovery, and that small businesses will be the driving force paving the way. [...] Berkshire Hathaway Inc. has some direct involvement and vested interest in the bankruptcy proceedings, as Buffett’s bond insurance firm Berkshire Hathaway Assurance Corp. insured more than $380 million of Detroit’s secured sewer debt.

Buffett’s Salty Steak Draws Warning From Wells Fargo CEO (Bloomberg)

Wells Fargo & Co. Chief Executive Officer John Stumpf, telling the story of his first meal with Warren Buffett in Omaha, Nebraska, said the billionaire investor’s eating habits came as a shock. Stumpf, responding to a question about Buffett at the National Press Club in Washington today, said the world’s third-richest person dined on a T-bone steak cooked medium rare, a side of chicken parmigiana, mashed potatoes and a Cherry Coke. Buffett, 84, runs Berkshire Hathaway Inc., the largest shareholder in San Francisco-based Wells Fargo.

Warren Buffett: 'I'm Having More Fun At 84 Than I've Ever Had' (Business Insider)

In an interview on Bloomberg TV, Warren Buffett made clear he doesn't really want to leave his post at Berkshire Hathaway. Bloomberg's Erik Schatzker asked Buffett about his future at Berkshire Hathaway, and Buffett — who turned 84 on Aug. 30 — said, "I'm having more fun at my job at 84 than I've ever had."

Berkshire News Briefs - 9/12/14

Berkshire Challenges Lawuit Over Benefits at Brick Unit (Bloomberg)

Warren Buffett’s Berkshire Hathaway Inc. (BRK/A) didn’t break promises on retirement benefits to employees of a brick-making business it acquired in 2000, the company said in a challenge to a lawsuit filed last month. [...] The plaintiffs have misinterpreted the agreement to acquire Fort Worth-based Acme, Berkshire said today in a statement. The plaintiffs mistakenly contend that the acquisition “required Acme to permit participants to accrue additional defined benefits forever, at the same rate that benefits were being accrued at the time of the acquisition,” Berkshire said today. The plaintiffs also contend the acquisition required “additional 401k matches forever,” at the same rate as the matches in 2000, Berkshire said.

Railroad union rejects contract with BNSF that would have allowed one-person crews (Minneapolis Star Tribune)

A railroad union has rejected a deal with BNSF that would have allowed one-person crews on as much as 60 percent of its tracks. [...] The deal would have allowed BNSF to use one-person crews on tracks where a system capable of stopping the train remotely had been installed. But trains that carry hazardous materials, such as crude oil and chemicals, would have continued to have two-person crews. BNSF operates tracks in 28 states in the western U.S. and two Canadian provinces. The railroad, based in Fort Worth, Texas, said it has Positive Train Control systems installed on about 60 percent of its 32,500 miles of track.

Dairy Queen still light on details of data breach (Minneapolis Star Tribune)

A week after crooks hacked into its customers’ financial data, Dairy Queen still hasn’t released specifics on the breach. Still, the Edina-based company said in a statement Thursday it has “determined that only a small portion of our 4,500 U.S. stores are potential victims of the criminal activity. The stores are not geographically clustered and each has a mitigation plan.” [...] Dairy Queen’s efforts to track the hack may be complicated by its business structure. Almost all of its stores are owned by franchisees, so there could be a multiplicity of information technology systems. Dairy Queen has 3,000 franchisees in the United States, many operating just a handful of stores. Of course, such a decentralized system like Dairy Queen’s may also have impeded a wider hack. [...] Dairy Queen was stricken with “Backoff” malware, and last week the U.S. Department of Homeland Security said that more than 1,000 retailers could have been hit by it. Backoff is believed to be behind a hack announced in mid-August by Eden Prairie-based Supervalu, which affected just over 1,000 grocery and liquor stores; and the massive attack on Target during the 2013 holiday season, which exposed the financial data of 70 million customers.

Shaw files ‘epic’ suit against flooring rival Carlisle (Atlanta Constitution-Journal)

Shaw Industries Group, the Dalton-based carpet and flooring producer, is suing a competitor for trademark infringement and deceptive trade practices over the use of the word ‘epic’. In a lawsuit filed recently in federal court in Atlanta, Shaw claims Carlisle Wide Plank Floors refuses to drop the word “epic” from its marketing, a “mark” that Shaw said it has had exclusive rights to use since 2006. Carlisle, based in Stoddard, NH., calls itself “the epic wide plank floor company.” In marketing material, the company says it produces the widest, longest center-cut plank floors available in the world and that its product is “truly epic.” [...] Shaw said it licenses the use of “EPIC”, which the manufacturer uses as a reference for “engineered wood flooring”, from Omaha-based Columbia Insurance Co., which owns the mark. Both companies are subsidiaries of billionaire Warren Buffet’s Berkshire Hathaway investment firm.

Buffett Called Hatch to Gauge U.S. Tax Inversion Policy (Bloomberg)

Billionaire investor Warren Buffett called U.S. Senator Orrin Hatch to gauge Congress’s direction on curbing tax inversions, the senator said today. Buffett, chairman and chief executive officer of Berkshire Hathaway Inc., is helping finance Burger King Worldwide Inc.’s purchase of Tim Hortons Inc. and its move to Canada. That transaction could be affected by legislative and regulatory changes being considered in Washington. [...] The call happened before Burger King “reached final agreement” on the deal and “consequently well before it was announced” on Aug. 26, Debbie Bosanek, Buffett’s assistant at Omaha, Nebraska-based Berkshire, wrote in an e-mail today. [...] Charles Munger, Berkshire’s 90-year-old vice chairman, said yesterday that Berkshire will pay the U.S. government more because of its $3 billion investment in the deal. “Anyone who thinks this is a great tragedy and a great injustice is stark raving mad,” Munger said regarding the fact that the new company will be based in Canada. “It’s a non-event.”

The 1 Peculiar Trait Shared by Warren Buffett's Energy Investments (Fool)

Since the beginning of last year, Berkshire has made two major additions to his portfolio in the energy industry -- ExxonMobil and Suncor Energy -- and has also added significantly to his position in one other -- National Oilwell Varco. On the surface, they look like pretty different companies. You have the largest integrated oil and gas company, a specialist in the Canadian oil sands business, and an oil and gas equipment and services supplier that has a corner on building drill rigs and related equipment. [...] It all comes down to generating fat stacks of cash from continuing operations. It's not just that these companies are really good at generating free cash flow from continuing operations, it's that they are the best at it in their respective realms.

Colahan to leave RSA for Berkshire Hathaway in Australia (Post Online)

The names and resumes of the people involved here aren't as important as the bigger story between the lines that Berkshire Hathaway Specialty Insurance is expanding to Asia and Australia.

Post understands Chris Colahan, CEO RSA Asia, is leaving the company to oversee a new operation for Berkshire Hathaway in Australia. [...] Post understands Colahan will help set-up Berkshire Hathaway Specialty in Australia and New Zealand, while Marc Breuil, formerly head of AIG Hong Kong, has been tasked with heading up its Asia operations. Berkshire Hathaway has also recruited Marcus Portbury AIG's regional casualty head for Asia-Pacific. [...] Buffett has reportedly authorised Berkshire Hathaway Specialty Insurance to apply for licenses in Sydney, Europe, Hong Kong and Singapore.

Berkshire Hathaway Inc. CEO Warren Buffett the Social Media Leader on Twitter Inc (TWTR) Amongst Fortune 500 CEOs (Insider Monkey)

Berkshire Hathaway Inc. CEO and legendary investor Warren Buffett is the leading Fortune 500 CEO on Twitter Inc, in spite of making just five tweets since he joined the social media network last year, and none since February of this year. While underscoring the reverence people have for Buffett on the one hand, it also speaks to the fact that not many prominent CEO’s are making use of social media [...]

Ex-Bengal Ickey Woods does 'Ickey Shuffle' in Geico ad, internet loves it (CBS Sports)

Former Bengals running back Ickey Woods only played in 37 games during his brief NFL career, but that was long enough for him to give us the 'Ickey Shuffle.' Woods would do the shuffle after every touchdown he scored, which meant 15 shuffles in 1988. The shuffle was everywhere in 1988 because the Bengals made it all the way to the Super Bowl. Thanks to Geico, the shuffle is now back.