Berkshire News Briefs - 6/28/14

The World's Most Respected Companies (Barron's)

Apple is back on top. Last year, Berkshire Hathaway knocked Apple out of the No. 1 spot in Barron's annual ranking of the world's most respected companies. But the iEverything maker has reclaimed the throne with a flourish in 2014, its winning score leaving No. 2 Berkshire and others a blur in the rearview mirror. [...] Although Berkshire slipped one rung this year, Warren Buffett's investment conglomerate is no slouch, either. It has finished out of the top five just once in the past nine years -- in 2012. That's a strong endorsement of Buffett's tenure and a reflection of the esteem he has earned in his storied career.

The 1 Person Who Should Replace Warren Buffett (Fool)

As much as long-term shareholders would like him to, Warren Buffett isn't going to be atop Berkshire Hathaway forever. The topic of Buffett's potential successor is nothing new, but who are these potential heirs and what could they mean for Berkshire Hathaway shareholders who aim to hold their position for decades to come. To get a better idea of this talent pool, we asked five Berkshire-loving Fools who they would like to see step into Warren's shoes after he's gone.

Buffett Unit Closes Second Deal This Month for Utah Solar Power (Bloomberg Businessweek)

A utility owned by Warren Buffett’s Berkshire Hathaway Inc. has closed its second deal this month to buy solar power from renewable-energy developer First Wind Holdings Inc. Rocky Mountain Power, a unit of PacifiCorp, will buy 320 megawatts under 20-year contracts, First Wind said today in a statement. Four 80-megawatt solar farms in Utah’s Beaver and Iron counties will supply power to PacifiCorp, a Berkshire Hathaway subsidiary. Construction on the Four Brothers solar development is expected to begin next year and be finished by 2016. The project will produce enough energy to power about 64,000 homes.

California, Buffett’s PacifiCorp Approved for Western Market (Bloomberg)

Warren Buffett’s PacifiCorp power utility and the California Independent System Operator Corp., which manages the grid in a state that consumes more electricity than all of Mexico, won approval to start a regional market. [...] The system, slated to become the only real-time, regional one of its kind in the western U.S., will be capable of automatically dispatching power every five minutes from plants with a combined capacity of 68,846 megawatts, enough to supply 51.6 million homes. The ISO and PacifiCorp have hailed it as the first step toward an organized market stretching across the entire Western Interconnection, where 38 authorities from Canada to Mexico now manage fluctuations on their own grids.

Fired Worker Finds Paint Names Offensive (Courthouse News Service)

A black worker named Clinton Tucker claims in court that Benjamin Moore paints fired him after his repeated complaints about their "despicable and racially insulting paint colors called 'Clinton Brown' and 'Tucker Chocolate.'" Tucker sued the paint giant in Essex County Court. [...] Tucker says that after this exchange, a colleague asked, "If you think that is bad, what about Confederate Red?" which Tucker says is a color of paint that is "offensively described by Benjamin [Moore] as a 'timeless and enduring classic.'"

The Biggest Threat to Warren Buffett's Empire (Fool)

Earlier this year, we learned regulators had begun to look at Berkshire Hathaway -- and its nearly half a trillion dollars in assets -- to determine whether or not it should be deemed a "Systematically Important Financial Institution," or SIFI. If the Financial Stability Oversight Council determines Berkshire Hathaway is a SIFI -- meaning its failure could threaten the broader stability of the markets -- it could be a devastating blow to Buffett's company. This designation would result in new regulatory scrutiny and oversight. It would become regulated by the Federal Reserve and as the consultancy Deloitte notes, "Nonbank SIFIs must comply with the Board of Governors' capital plan rule and develop annual capital plans, conduct capital adequacy stress tests, and maintain adequate capital."

How Berkshire Hathaway's GEICO Crushes Allstate and Progressive (Fool)

Still trailing State Farm though, if you're keeping score at home...

For the full year in 2013, we learned that GEICO supplanted Allstate to claim the title of being the second-largest auto insurer in the United States. The business at Berkshire Hathaway saw its auto insurance premiums rise by 11.3%, to $18.6 billion, while Allstate only saw its rise by 3.4%, to $18.1 billion. The growth of Progressive and market leader State Farm was better than Allstate, but none of the big four in insurance saw the gains posted by GEICO [...]

Local 10 sale deal approved by FCC (Local10 WPLG)

The FCC officially approved the deal that will allow Graham Holdings to sell the station to Warren Buffett's Berkshire Hathaway company. With the approval, the companies will spend the next few days finalizing the deal with completion expected to take place sometime in the near future. The sale, announced in March, is part of a complicated stock swap between the two companies.

New Shaw Evergreen Facility in Ringgold, Ga., to Recycle Multiple Fiber Types (Digital Journal / PRWeb Newswire)

Georgia Governor Nathan Deal announced today that Shaw Industries Group, Inc. (Shaw) will expand its robust reclamation and recycling program to include a new Evergreen facility in Ringgold, Ga. The Berkshire Hathaway company will create at least 70 new full-time jobs and invest over $17 million into the facility. [...] The world's largest carpet manufacturer and a leading floorcovering provider, Shaw has recycled more than 700 million pounds of carpet since 2006 via the company's take-back program and an expansive reclamation network. As an addition to Shaw's portfolio of recycling solutions, Evergreen Ringgold will give the company a flexible recycling solution that is capable of recycling nylon and polyester carpet.

Public, stakeholder groups weigh in on proposed AltaLink acquisition (Edmonton Journal)

I could run a full Berkshire News Briefs post with nothing but pro and con editorials and letters to the editor on this subject from newspapers in Alberta, Canada. Here's a more fact-based story.

Eleven individuals, consumer groups and businesses have said they want to take part in the Alberta Utilities Commission’s review of the proposed $3.2-billion sale of AltaLink to Berkshire Hathaway Energy. Berkshire Hathaway Energy announced on May 1 that it intends to purchase AltaLink — Alberta’s largest electricity transmission company — from current owner SNC-Lavalin of Montreal. The deal is expected to close Dec. 31. [...] Some individuals said they oppose the sale because Berkshire Hathaway Energy is American-owned.

Bombardier's Challenger 350 Aircraft Enters into Service with First Delivery to NetJets (WSJ)

NetJets Inc., a Berkshire Hathaway company and the worldwide leader in private aviation, together with Bombardier Aerospace, revealed today the first Signature Series(TM) Challenger 350 aircraft at Westchester County Airport in White Plains, NY. This event marked the official entry-into-service of the Challenger 350 aircraft. Bombardier Business Aircraft President Éric Martel presented the ceremonial keys to NetJets Chairman and CEO Jordan Hansell before unveiling the aircraft to employees and invited guests. NetJets is the worldwide launch customer for the Challenger 350 aircraft and will add eight of the jets to its fleet this year.

Buffett warning unheeded as catastrophe bond sales climb (BusinessDay)

Bond buyers are betting more than ever on the mercy of Mother Nature as they seek to boost yields being suppressed by central banks. Demand for notes linked to insurance against hurricanes and other natural disasters is prompting investors to accept the lowest relative yields in almost a decade for this time of the year, when the Atlantic storm season gets underway. Buyers are speculating that the $22 billion market can continue its streak without an annual loss even as Warren Buffet said last week that Berkshire Hathaway Inc. is avoiding writing hurricane insurance in Florida because premiums have been pushed too low.