Berkshire News Briefs - 1/30/15

Berkshire's NetJets Defeats $500 Million IRS Tax Claim (Business Insider)

NetJets Inc, the private jet-sharing company owned by Warren Buffett's Berkshire Hathaway Inc , has defeated a U.S. Internal Revenue Service lawsuit attempting to recoup more than $500 million of unpaid taxes, penalties and interest. [...] The dispute arose from a series of IRS and federal court decisions over nearly two decades, on when and how Columbus-based NetJets should pay federal excise taxes.

Nearly 400 jobs coming to St. Joseph County as RV maker Forest River Manufacturing expands (MLive)

Astute readers may recall a similar story about Forest River also opening a new plant in California two weeks ago. The RV business seems to be booming.

Forest River Manufacturing LLC will spend $7 million to build its first recreational vehicle production site in Michigan over the next three years. The expansion into Michigan, from the company's headquarters in Elkhart, Ind., is expected to mean 396 new jobs over the next five years. [...] According to the Michigan Economic Development Corporation, which announced the project as one of two expansions just approved for Michigan Strategic Fund grants, Forest River is launching new products and plans to build the three facilities in the Village of White Pigeon to house each line.

BNSF expanding Bakken rail capacity (The Bakken Magazine)

BNSF’s North Region has experienced the most rapid growth in recent years and is a destination point for materials that support the production of crude oil in the Bakken. BNSF plans to invest approximately $700 million in the North Region to expand rail capacity and continue the implementation of Positive Train Control technology.

Port labor dispute is big concern for railroads Union Pacific, BNSF (Omaha World Herald)

With rail network congestion improving in some of the nation’s grain belt, Union Pacific Railroad and BNSF Railway are facing another prospective headache: a shutdown of the port complex of Los Angeles and Long Beach, the country’s largest. [...] BNSF spokeswoman Amy Casas said Friday that "unresolved labor issues" at the port complex of Los Angeles and Long Beach have the potential to cut into business at its intermodal terminals in both Los Angeles and San Bernardino. Cranes at the two make 1.5 billion container lifts a year.

MidAmerican earns top J.D. Power ranking (Quad City Business Journal)

Business customers rated MidAmerican Energy Co. the highest for overall satisfaction for the second year in a row, according to the J.D. Power Electric Utility Business Customer Satisfaction Study. The 2015 study measures satisfaction among business customers of 101 U.S. electric utilities. [...] MidAmerican took top honors again among 13 companies in the Midwest Region-Large Segment. Its overall satisfaction index score of 718 was up 21 points from last year, and 13 points ahead of the runner-up.

Berkshire Hathaway moves into Canadian insurance market (Toronto Star)

Commercial insurance company Berkshire Hathaway Specialty Insurance is expanding into Canada and bringing with it big coverage rates set to shake up the industry. The company’s Canadian foray comes just 21 days after it entered the U.S. market. In the past two months, it picked up licenses to operate in Hong Kong and Singapore, signalling an ambitious expansion effort by the insurer, owned by business magnate Warren Buffet and known for its predilection for taking risks and growing quickly. [...] Pete Karageorgos, the director of the Insurance Bureau of Canada, said the expansion is "positive and growth is always good," but he warned that the Canadian insurance market has more regulatory oversight and different coverage levels than that of the U.S.

Buffett-Backed Heinz Sells $2 Billion of Bonds to Pay Down Loans (Bloomberg)

H.J. Heinz Co., the ketchup-maker owned by Warren Buffett’s Berkshire Hathaway Inc. and 3G Capital Inc., sold $2 billion in bonds to repay a portion of its term loans, the company said in a statement. The 10-year second-lien notes were sold at par to yield 4.875 percent, according to data compiled by Bloomberg. [...] "Heinz is a household name with a tremendous history, stable products, they have been cutting costs, and in the end there is a Buffett premium priced in that helped the deal,” said Matthew Duch, a money manager at Calvert Investments in Bethesda, Maryland, which oversees more than $13 billion in assets. “The pricing was fair, and people are going in looking to park cash here."

Warren Buffett Bets on These Top Stocks for 2015 (Fool)

At the end of the third quarter, Berkshire Hathaway -- Warren Buffett's company -- disclosed it had a $17 billion stake in Coca-Cola, a $13.4 billion position in IBM, and roughly $5 billion in Wal-Mart. All signs indicate Buffett will continue to hold them into 2015 and well beyond.

Warren Buffett Stocks: 3 Dividend Aristocrats From Berkshire Hathaway's Portfolio (Fool)

To be considered a Dividend Aristocrat, a company must boast a history of at least 25 consecutive years of uninterrupted dividend growth. Coca-Cola, Procter & Gamble, and Wal-Mart are not only part of that select group, they are also included in Warren Buffett's Berkshire Hathaway portfolio.

Berkshire News Briefs - 1/23/15

Lower oil prices affect Berkshire Hathaway (Salt Lake Tribune)

Berkshire is one of the biggest shareholders in Wal-Mart Stores and holds a stake in Costco Wholesale, both of which are trading near all-time highs. Lower gasoline prices could boost consumer spending this year, benefiting retailers. [...] Both jet-fuel and diesel prices have been falling, potentially reducing costs for Berkshire's luxury aviation unit, NetJets, and its trucking company, McLane. [...] Surging U.S. oil production has been a boon to Berkshire's largest subsidiary, BNSF Railway Co. The company has seen an increase in oil carloads from North Dakota's Bakken region and spent heavily to accommodate them. Some of that demand could go away if oil prices stay low for a prolonged period.

Warren Buffett's investing successors blew it in 2014 (Fortune)

Todd Combs and Ted Weschler both appear to have failed to beat the market in 2014. Combs missed the mark by the most. His portfolio appears to have fallen slightly, down 0.3%, in 2014. [...] Weschler did better. His picks rose 6.7%. Still, that wasn’t enough to best the S&P 500, which was up by just over 11%, before dividends, in 2014. (Fortune calculated the returns of Combs and Weschler before dividends as well.) It was the first year both Combs and Weschler lagged the market index since they joined Buffett’s Berkshire Hathaway.

Warren Buffett's Secret Stocks (Fool)

The critical distinction is that Berkshire Hathaway files what is known as a "13F Combination Report." In it is stated in plain sight that (emphasis added) "a portion of the holdings for this reporting manager are reported in this report and a portion are reported by other reporting manager(s)." In other words, what we see in the Berkshire Hathaway 13F filing are the stocks Berkshire Hathaway, owns. But another company, General Re New England Asset Management -- which is owned by Berkshire -- also files a 13F that further discloses what is included in Berkshire's stock portfolio. So what happens when we combine the holdings in the 13F's filed by Berkshire Hathaway and General Re New England Asset Management relative to what is shown in the annual report?

Brooks Breaks Tape on Momentous Year and Kicks Off 2015 with Clear Focus on Being No. 1 Choice for Runners Worldwide (BusinessWire)

For Brooks Running Company, 2014 was a year of milestones: among other noteworthy mileposts, Brooks reached half a billion dollars in annual sales, moved into a new state-of-the-art global headquarters and celebrated its 100-year anniversary. To cap it off, Brooks posted a 15 percent increase in revenue growth year-over-year driven by a 13 percent increase in U.S. footwear sales and a 32 percent increase in EMEA (Europe, the Middle East and Africa) sales on a local currency basis. Additionally, Brooks Canada clocked in more than 37 percent year-over-year revenue growth since formed as a wholly owned subsidiary in 2014.

Texas-sized Furniture Mart store can fit 3 Walmart Supercenters inside (Omaha World Herald)

Ed Lipsett, store director of the massive Nebraska Furniture Mart under construction in this Dallas suburb, takes great pride in the breadth of the new store. At 560,000 square feet, it’s big enough to fit three Walmart Supercenters inside. [...] Lipsett and other marketing executives with the Omaha-based store — owned by Warren Buffett’s Berkshire Hathaway — recently allowed reporters to take a peek inside. The two-story, $400 million store, with its attached warehouse, is about 40 percent completed and has taken two years to build. Store officials declined to reveal a precise opening date. [...] The store will anchor a $1.5 billion, 433-acre development project being built by Berkshire Hathaway. Several restaurants and hotels are also planned.

BNSF Railway Re-evaluates Plan for Safer Cars Amid Client Talks (Bloomberg)

BNSF Railway Co., the railroad owned by Warren Buffett’s Berkshire Hathaway Inc., is reconsidering a plan to buy 5,000 oil-tank cars built to new safety standards after some customers voiced concern about the initiative. “At first everybody applauded us for doing it,” BNSF Chairman Matt Rose said today during a panel discussion in Washington on oil-by-rail safety, without specifying which concerns were raised. “We’re going to go back and talk to our customers and see what they want us to do.” [...] Rose said the company also decided to delay its purchase until regulators establish a standard. While thicker walls are warranted, speed restrictions would hurt other businesses that rely on trains to haul their products, he said.

Ajit Jain's Value To Berkshire Hathaway (Seeking Alpha)

In 1998, BH Reinsurance had a float of $4.3BN and by 2013, the float had increased to $37BN based on Ajit Jain's risk management capability and a staff of less than 50 people. Moreover, the share of BH Reinsurance as a percentage of total Berkshire's total float increased from 19% in 1998 to 48%. The other contributors to Berkshire's float include General Re, GEICO & "Other Primary".

Berkshire Hathaway Corporation and Leucadia National Corporation Appoint Justin Wheeler CEO of Berkadia (BusinessWire)

Berkshire Hathaway Corporation and Leucadia National Corporation today announced the appointment of Justin Wheeler, currently Leucadia’s Chief Operating Officer, as Chief Executive Officer of Berkadia Commercial Mortgage LLC. Since April 2014, Mr. Wheeler has been Berkadia’s acting CEO and, upon becoming Berkadia’s permanent CEO, Mr. Wheeler will be stepping down from his position as Leucadia’s COO. Berkadia, a joint venture of Berkshire Hathaway and Leucadia, is an industry leading commercial real estate company providing comprehensive capital solutions and investment sales advisory and research services for multifamily and commercial properties.

Warren Buffett Watch: Berkshire meeting to offer anniversary book, more time for sales (Omaha World Herald)

Good news for shareholders who shop at Berkshire Hathaway Inc.’s annual meeting. For the first time, the exhibition hall at the CenturyLink Center Omaha will be open for business on the Friday afternoon before the meeting, as well as during the Saturday meeting on May 2. And this year the hottest item might be a special bargain, Berkshire Chairman Warren Buffett told me: A commemorative book to mark the 50th anniversary of the day he bought the New England textile company known as Berkshire Hathaway.

7 Things You Need to Know About Berkshire Hathaway (Fool)

Millions of words have been written about Berkshire Hathaway, and most of them have been devoted to CEO Warren Buffett. This is understandable, since Berkshire is truly a product of Buffett's guiding hands over the past half-century, turning the small regional textile maker into one of the great investing stories in modern history. Berkshire is an amazing collection of companies and stocks that Buffett has acquired over the years, but there's a lot to know about this mega conglomerate. Let's consider seven things you need to know about Berkshire Hathaway. Whether you're a shareholder, considering investing, or just interested in this great company, you might be surprised by some of the things on this list.

12 of the Best Things Charlie Munger Has Ever Said (Fool)

In financial media, you see quotes from Warren Buffett everywhere, as he's well known as one of the best stock-pickers around. The words of his longtime business partner Charlie Munger, however, don't make many headlines -- and that's a shame. [...] "If you buy something because it's undervalued, then you have to think about selling it when it approaches your calculation of its intrinsic value. That's hard. But if you buy a few great companies, then you can sit on your ass. That's a good thing."

Berkshire News Briefs - 1/12/14

Berkshire Soars as Buffett Shifts Focus to Takeovers (Bloomberg Businessweek)

Not too long ago, Berkshire was seen as a way to buy into the billionaire’s skill picking stocks. These days, it’s primarily a bet on his ability to make acquisitions and distribute funds among the dozens of businesses he bought over the past five decades, including electric utilities, manufacturers, retailers and one of the largest U.S. railroads. “The market’s realizing that it’s more than just that stock portfolio,” said David Rolfe, who oversees about $10.5 billion including Berkshire shares at Wedgewood Partners Inc.

Lubrizol Completes Acquisition of Weatherford Oilfield Chemicals and Drilling Fluid Businesses (Business Wire)

The Lubrizol Corporation announces it has completed the acquisition in the United States and Canada of Weatherford International’s global oilfield chemicals business, known as Engineered Chemistry and its United States drilling fluids business, known as Integrity Industries. Closings in the rest of the world will occur throughout 2015. The transaction was announced on December 1, 2014. With the close of the transaction, Engineered Chemistry and Integrity Industries, along with Lubrizol’s legacy energy and water business and Berkshire Hathaway portfolio company, Lubrizol Specialty Products, Inc., will form Lubrizol Oilfield Solutions, a new business segment for the company. Lubrizol Oilfield Solutions joins the company’s other business segments, Lubrizol Additives and Lubrizol Advanced Materials. Within this new segment, Engineered Chemistry and Integrity Industries will operate substantially as they do now.

Former Skyline RV facility to reopen under new owner (Riverside CA Press Enterprise)

When Skyline Corp. rolled the last RV off the assembly line in the Great Recession and shut down in April 2012, it was a stunning blow to the San Jacinto Valley economy. [...] Forest River Inc., a Berkshire Hathaway company, bought the Hemet plant in December from KPL to open its 67th assembly plant in the nation. [...] Miller did say Forest River would spend more than $1 million to retrofit two buildings on the 18-acre site for the assembly work for Salem, Wildwood and Evo travel trailers, and the Stealth, Shockwave and Sand Storm toy-haulers. [...] Forest River intends to keep the Rialto factory open, Miller said. “When all is said and done, we expect to employ 500-plus people.” “It’s a heartwarming story, one you don’t hear much in the corporate world,” said John Jansons, Hemet’s director of community investment.

The Big Business That Soared at Berkshire Hathaway Inc. (Fool)

Through the first nine months of 2014 the premiums written -- essentially, revenue -- at GEICO have grown by 10%, rising from $13.7 billion last year to $15.2 billion this year. As shown below, this trend is nothing new, as the 2014 levels now stand 45% above the 2010 levels [...] Yet it isn't just the revenue which is rising, but also the income, as GEICO's underwriting gain -- the difference between its premiums earned minus the losses related to insurance payouts and underwriting expenses -- has grown from $610 million through the first nine months of 2011 to $1 billion so far in 2014. In short, GEICO isn't just growing its top line; it is also becoming more and more profitable as well.

More pilots, attendants to be hired by NetJets (Columbus Dispatch)

An improved economy has led to an increase in business and private-aviation flights. As a result, Columbus-based NetJets plans to hire 187 pilots and as many as 50 flight attendants to meet this growing demand. “Due to the strength of our business, . . . we were able to not only recall pilots who were furloughed in 2009 because of the economic downturn, but grow our business to the point where we can open the door for new team members as well,” NetJets Chief Operating Officer Bill Noe said in a statement. NetJets doesn’t disclose revenue, but officials said the number of hours its planes were in the air rose 7 percent in 2014 after a 6 percent jump in 2013. [...] NetJets and its pilots union have been in talks for a new labor agreement since May 2013, and “ there’s nothing new to report,” Herbert said. The parties are operating under the terms of the expired contract.

Buffett’s Commercial Insurer to Offer Pollution Coverage (Bloomberg)

Berkshire Hathaway Inc., the firm controlled by billionaire Warren Buffett, is pushing to sell more insurance to energy and construction companies by offering as much as $25 million in new pollution coverage. The protection is an add-on to traditional general liability coverage, according to a statement today from Berkshire Hathaway Specialty Insurance, the parent company’s Boston-based commercial unit. [...] Berkshire is already among the largest reinsurers of asbestos and environmental policies. It has struck deals with carriers including AIG, CNA Financial Corp. and Liberty Mutual Holding Co. to backstop policies.

Berkshire Hathaway Specialty Insurance Commences Operations in Hong Kong (Business Wire)

Berkshire Hathaway Specialty Insurance (BHSI) today announced that it has received an insurance license to carry on all classes of General Business in and from Hong Kong and filled several key positions in its newly established Hong Kong office. [...] Last month BHSI announced that it had received its license in Singapore.

The 3 Things Warren Buffett Requested From His "All-Stars" (Fool)

In December, Buffett issued his latest biennial memo to Berkshire operating company managers (whom he refers to as his "All-Stars"). The Berkshire chairman and CEO requested three things from this select group of businesspeople. [...] Protect Berkshire's reputation [...] Report bad news -- and bad apples -- quickly [...] Succession: Identify the next "All-Star" roster

Warren Watch: Buffett taps ‘Breaking Bad’ (Omaha World-Herald)

It took a while to make it to YouTube, but actress Anna Gunn’s description of meeting Warren Buffett and the Rolling Stones’ Keith Richards at a party may still be worth retelling. “I got a tap on the shoulder and turned around and there was Warren Buffett,” the "Breaking Bad" star told Jimmy Kimmel on his ABC talk show. Buffett, a fan of the TV series, praised her acting and the show. She was at a loss for words, but not Kimmel, who said, "See, now that’s the moment where you say, ‘That’s very nice, can I have $20 million?' "