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.

Berkshire News Briefs - 9/5/14

Buffett’s Burger King Deal Has Warrant for 1.75% Stake (Bloomberg)

Berkshire Hathaway Inc.’s $3 billion of financing for Burger King Worldwide Inc.’s planned takeover of Tim Hortons Inc. gives billionaire Warren Buffett the option to buy a 1.75 percent stake in the combined company. Buffett’s company received the warrant to buy common shares and agreed to purchase 30,000 preferred shares as part of the deal, Miami-based Burger King said yesterday in a regulatory filing. The perpetual preferred securities pay a 9 percent coupon. [...] “Berkshire’s participation on this deal demonstrates its ability to use its strong balance sheet and massive cash generation to capture very attractive returns, even without the backdrop of a financial crisis,”[...]

Canadian identity wrapped up in homegrown ‘Timmy’s’ (Omaha World-Herald)

Few things unite Canadians the way Tim Hortons does. [...] So news last week that Burger King will buy Tim Hortons -- helped by $3 billion of preferred equity financing from Warren Buffett’s Berkshire Hathaway -- served as a bittersweet reminder of how beloved the homegrown chain is in Canada. Seventy-five percent of all the coffee sold at fast-food restaurants in Canada comes from “Timmy’s,” [...] While the takeover by Burger King, which is based in Miami but controlled by a Brazilian private equity fund, is getting much attention in Canada, it’s not causing panic. U.S.-based Wendy’s recently owned Tim Hortons and its brand remained intact. Wendy’s then spun off Tim Hortons as a separate company in 2006 after more than a decade of ownership.

Acme Brick employees sue Buffett’s Berkshire Hathaway for cutting retirement benefits (Fort Worth Star-Telegram)

Two employees and a retiree of Fort Worth-based Acme Brick Co., including the company’s chief financial officer, have sued the company and its parent, Berkshire Hathaway, alleging the company improperly reduced the company match on its 401(k) retirement plans and froze its pension plan. The class action suit, filed Aug. 15 in U.S. District Court in Fort Worth, says Berkshire Hathaway, run by multi-billionaire Warren Buffett, broke a pledge it made when it acquired Acme with Justin Industries in 2000 not to reduce benefits in the company’s retirement plans. [...] Acme Brick’s senior management on July 15 voted to make changes to the retirement plans urged by Buffett, Berkshire’s chief executive officer, and Marc Hamburg, its chief financial officer. Otherwise “Berkshire Hathaway intended to divest itself of Acme as a subsidiary,” the lawsuit says. [...] The lawsuit alleges that the changes to Acme’s retirement plans violate the federal Employee Retirement Income Security Act, commonly known as ERISA.

'The whole system is suffering': Words of frustration, caution at hearing on rail delays (Omaha World-Herald)

BNSF is working on improvements with all the gusto it has, company marketing chief Stevan Bobb said. “We know our service has not met your needs,” said Bobb, addressing the room full of farmers, grain cooperative officials and other shippers. Bobb noted the the company’s shipments from North Dakota — a state bulging with wheat, corn, barley, crude oil, soybeans and many other commodities — are at a record. Grain shipments from North Dakota this year, Bobb said, are still higher than a year ago, delays or not. BNSF, he told commissioners, is shifting railcars to the region and counting on track improvements scheduled to wrap up in October. “We should have the capability to move record volumes. Note that I said should,” Bobb said. “If all the bushels want to move in the same month, your railroad could be running like a sewing machine and you are still going to be late.”

Why Bill Gates And Warren Buffett Are Railroad Rivals (Business Insider)

[...] even though both billionaires are philanthropically entwined, when it comes to the old-school realm of investing in North America's railroads, Gates and Buffett part ways. [...] In Gates' case, his railroad stake can be viewed as simply an investment -- evidently a timely one -- but nothing more than that. Gates isn't running CN. But Buffett, because Berkshire Hathaway owns BNSF, is effectively running the railroad.

Buffett Search for Sure Thing Propels 76-Year Junk Food Quest (NewsMax)

Billionaire investor Warren Buffett got his entrepreneurial start at age 7, buying six-packs of Coke for a quarter, then hawking the beverages for a nickel apiece on hot summer nights. Now, at age 83, he’s still betting on simple indulgences. Berkshire Hathaway Inc. agreed Tuesday to provide $3 billion of financing for Burger King Worldwide Inc.’s purchase of doughnut chain Tim Hortons Inc. [...] Berkshire also owns See’s Candies and Dairy Queen, which sells ice cream and burgers. In 2008, Buffett’s firm helped finance Mars Inc.’s purchase of chewing-gum maker Wm. Wrigley Jr. Co. [...] For fast-food chains and candy and soda companies, Buffett “can look into the future and not have to wonder if they’re going to be doing great things,”

Why Buffett's son bought Rosa Parks archive (CNN Money)

Howard Buffett, the youngest son of the billionaire investor, said he was thinking of his mother when he paid $4.5 million for a trove of historic belongings left by civil rights activist Rosa Parks. "I knew that my mom would think that it was something that should get done," Buffett told CNNMoney. [...] "This is an incredible part of history, and to have that history locked in a chamber somewhere is not right," Buffett said. Buffett runs the Howard G. Buffett Foundation, which works in the developing world to improve agriculture and clean water delivery. He said the Parks material would be turned over to an institution that would ensure its availability to historians and others.