Berkshire News Briefs - 5/27/16

Berkshire Hathaway's quartery 13-F came out last week, detailing last quarter's stock transactions. Dataroma has an easy-to-understand format for keeping up with BRK's holdings.

Buffett's Berkshire Hathaway takes new stake in Apple, ups stake in IBM (CNBC)

Warren Buffett's Berkshire Hathaway has taken a new stake in Apple and upped its holdings in IBM, according to a Securities and Exchange Commission filing Monday.

Berkshire portfolio managers Todd Combs and Ted Weschler, who each invest about $9 billion, made the investments.

Berkshire's new stake in Apple totaled 9.8 million shares, while the company boosted its shares of IBM by 198,853 to 81.2 million shares. [...]

Berkshire also boosted its holdings in Visa by 3.6 percent to 10.2 million Class A shares, increased its stake in Phillips 66 by 22.9 percent to 75.6 million shares, and upped its stake in Bank of New York Mellon by 3.6 percent to 20.8 million shares.

Berkshire reduced its holdings in a number of big names, as well. It lowered its holdings in Wal-Mart Stores by 949,430 to 55.2 million shares, and dissolved its stake in AT&T, according to the 13F filing.

Berkshire slashed its Procter & Gamble stake by 99.4 percent to 315,400 shares, and also reduced its stake in MasterCard by 5.6 percent to 4.9 million Class A shares.

Why Berkshire Hathaway Bought Into Apple (Fool Video)

Warren Buffett is famously anti-tech, but his company, Berkshire Hathaway, has recently become a shareholder of Apple.

In this segment from the MarketFoolery podcast, Chris Hill, Jason Moser, and Taylor Muckerman explain why the billionaire investor's company bought in. Learn why Apple isn't the same investment now that it was 10 years ago and why this move is much more in line with Berkshire's investment philosophies than it first seems. To wrap-up, the team runs down a couple other moves Berkshire Hathaway announced in its most recent 13-F filing.

Warren Buffett, Quicken Loans founder in Yahoo bid (Reuters)

Berkshire Hathaway Inc Chairman Warren Buffett is backing a consortium vying for Yahoo Inc's internet assets that includes Quicken Loans Inc founder Dan Gilbert, people familiar with the matter said on Friday. [...]

The consortium is in the second round of bidding in the auction for Yahoo's assets, the people said. Buffett is helping finance the offer, one of the people added. [...]

Susan Decker, who worked at Yahoo in several senior roles between 2000 and 2009, including president and chief financial officer, is now a director on Berkshire's board.

Warren Buffett: I may help bankroll billionaire Dan Gilbert's bid to buy Yahoo (CNBC)

Berkshire Hathaway has offered to be a potential finance partner for fellow billionaire Dan Gilbert's bid to buy Yahoo, Berkshire Chairman and CEO Warren Buffett confirmed to CNBC.

"I'm an enormous admirer of Dan and what he has accomplished in Quicken Loans‎. Yahoo is not the type of thing I'd ever be an equity partner in. I don't know the business and wouldn't know how to evaluate it, but if Dan needed financing, with proper terms and protections, we would be a possible financing help," Buffett told CNBC. [...]

Berkshire’s Jain Taps ‘Secret Weapon’ Raiguel to Run Gen Re (Bloomberg)

Warren Buffett’s Berkshire Hathaway Inc. promoted longtime reinsurance executive Kara Raiguel to run the company’s Gen Re unit, which has struggled to expand amid increased competition.

Raiguel will take over from Franklin "Tad" Montross, according to an internal memo confirmed by Gen Re. She has been at Berkshire for 15 years and was a key deputy to Ajit Jain, who runs the company’s namesake reinsurance operation and recently took on responsibility for Gen Re as well.

Read Ajit Jain’s Memo About the New CEO at Berkshire’s Gen Re (WSJ Moneybeat)

For Berkshire investors, the two-page memo may be interesting for more than the information it provides about Ms. Raiguel. It also offers a glimpse of Mr. Jain’s writing style, and it sounds a fair bit like the folksy, jargon-free tone that Mr. Buffett favors. Mr. Jain has long been thought by outside observers of Berkshire to be one of the leading candidates to replace Mr. Buffett. [...]

Richline Group Acquires Nordt (BusinessWire)

Richline Group, Inc. has the pleasure to announce the acquisition, effective June 1, 2016, of John C. Nordt, Inc. [...] a leading manufacturer and supplier of precious metal products to the jewelry industry. Founded in 1872 in New York City, Nordt has operated in Roanoke Virginia since 1984.

Here's How Berkshire Hathaway Gets a $63 Billion Interest-Free Loan From the U.S. Government (Fool)

[...] Berkshire Hathaway has some structural advantages that are less well understood. One of them is the size of its deferred tax liabilities – a whopping $63.2 billion, based on the most recent data [...]

A deferred tax liability arises from temporary differences between a company's financial accounts and its tax accounts. [...] Because it is assumed that companies will eventually realize the investment gains achieved through the sale of their winning stocks thereby incurring capital gains tax, that future liability is reflected on the balance sheet as a deferred tax liability.

Berkshire's NetJets settles U.S. immigration bias claim (Reuters)

NetJets, the luxury plane unit of Warren Buffett's Berkshire Hathaway Inc, agreed to settle U.S. charges that it discriminated against immigrant workers by requiring them to provide extra documents to prove their employment eligibility.

The settlement calls for NetJets to be monitored by the U.S. Department of Justice for two years, improve training of its human resources staff, and pay a $41,480 civil penalty, the department said in a Friday statement. NetJets denied wrongdoing in agreeing to settle, and cooperated in the probe.

A NetJets spokesman said the government found "inadvertent errors" in the company's processes for verifying workers' residency. "There was no intent to discriminate," he added.

Berkshire Hathaway Insurance Group Invests In Technology (Travel Market Report)

Most people don’t think of Berkshire Hathaway as a hip modern brand. Warren Buffett is a conservative, patient investor who still owns a flip phone and brags he has sent one e-mail his whole life. What many might not know is that his Berkshire holding company owns a travel-insurance business that is making a mark for itself by offering high-tech, consumer-centric products and services. [...]

BHTP continues to invest in mobile technology and will be releasing a new version of its mobile app in the coming weeks. [...]

Berkshire News Briefs - 5/10/16

Did Warren Buffet Just Blow $3.6 Billion? (Fool)

Recently, utility MidAmerican Energy, owned by Berkshire Hathaway, blew away renewable energy investors with a surprising announcement: It plans to invest $3.6 billion in wind energy by 2020. This is one of the largest wind energy investments ever made and is a calculated decision on the part of Warren Buffett, Berkshire Hathaway, and MidAmerican Energy. [...]

Warren Buffett's company buys Gallatin's Goodall Homes (Tennessean)

A subsidiary of billionaire investor Warren Buffett's Berkshire Hathaway has acquired Gallatin-based Goodall Homes, continuing its expansion into detached single-family and other traditional homes.

The nation's largest manufactured house maker, Clayton Homes of Maryville, Tenn., didn't disclose the price it paid for Middle Tennessee's second-largest homebuilder.

Goodall Homes will become part of Clayton Properties, the site-building group through which Clayton Homes is expanding its portfolio of housing options to homebuyers. Last fall, Clayton Homes bought Atlanta area-based homebuilder Chafin Communities as part of that push. [...]

Warren Buffett-Led Berkshire Discloses Unit's Ties To Iran, Opens Probe (NDTV)

Berkshire Hathaway Inc on Friday said it recently learned that one of its foreign units made sales through a third-party distributor to customers in Iran, despite US sanctions against that country.

In its quarterly report filed with the US Securities and Exchange Commission (SEC), Omaha, Nebraska-based Berkshire said it alerted federal authorities including the Department of the Treasury on Friday about the transactions in question. [...]

Warren Buffett's Jewelry Business Just Bought Gemvara (BostInno)

Gemvara announced Wednesday it has been acquired by Richline Group, a Berkshire Hathaway ($BRK.A) subsidiary that specializes in jewelry marketing, manufacturing and distribution. The acquisition will take Gemvara back to its early roots, providing e-commerce and in-store digital tech for Richline's brands and its customers, which include companies both inside and outside the Berkshire Hathaway umbrella. [...]

Benjamin Moore CEO: Warren Buffett is very particular about the promises he makes (Yahoo)

"There was a period of time where the dealers didn't trust us because there was talk of us going into the big boxes. For the independent dealer, that would have been a broken promise by Warren Buffett," Searles said, adding that the promise was never broken. "Warren is very particular about promises he makes...All we have done is listen more closely to our customers. We have the best products in the world." [...]

Energy Companies Launch Critical Transmission Equipment Sparing Company (PR Newswire)

Six energy companies Friday officially launched Grid Assurance, an independent company providing transmission sparing solutions for critical electric transmission equipment. [...]

Grid Assurance was founded by affiliates of American Electric Power, Berkshire Hathaway Energy, Duke Energy, Edison International, Eversource Energy and Great Plains Energy to enhance grid resiliency and give electric transmission owners faster access to long-lead time critical equipment necessary to recover from catastrophic events that could impact the nation's electric grid. [...]

Brokers respond positively to BHSI’s first year in Australia (Insurance Business)

Last week marked a year since Berkshire Hathaway Specialty Insurance received its licence to sell general insurance products in Australia. [...]

According to Donaldson, so far, BHSI has had an overwhelmingly positive response from customers, brokers and (now) new team members their entry to the Australia market. [...]

Applied Underwriters, part of Berkshire Hathaway, is company planning to develop Boys Town farmland (Omaha World-Herald)

A part of Warren Buffett’s empire is behind the planned transformation of a nearly 500-acre tract that includes high-profile Boys Town farmland near 144th Street and West Dodge Road.

Applied Underwriters Inc., acquired a decade ago by Omaha-based Berkshire Hathaway, is finalizing a contract to buy the undeveloped land from Boys Town and the DeMarco family, Omaha developer Jay Noddle told The World-Herald.

On a piece of the vast farm area, Applied Underwriters intends to build a new hub for its local workforce of between 650 and 700. The rest is to become more offices, shops, housing, restaurants, hotel rooms, public space and more. [...]

This Running Shoe Was Personally Approved by Warren Buffett (Fortune)

The shoe, known as the Berkshire Hathaway Transcend 3, has a limited run with only 4,080 pairs being sold (evenly distributed among the genders). It will be sold at the 2016 Berkshire Hathaway Shareholder’s Meeting, as well as on Brooks’ website and some national retailers. The Transcend 3 retails for $170, slightly above the prices most premium running shoes command.

The Transcend 3 is part of a broader push by Brooks, which aspires to become a $1 billion brand, to sell shoes designed for big events. [...]

Berkshire Hathaway 1Q 2016 Earnings

Berkshire Hathaway reported 1st quarter earnings for 2016 on Friday, May 6.

• Earnings News Release (PDF)
• 10-Q Filing (PDF)

Berkshire Takes a Hit on Insurance and BNSF Performance in 1Q16 (Yahoo)

Berkshire Hathaway reported its first quarter earnings on May 6, 2016. The company missed the operating EPS (earning per share) analyst estimate of $2,609 and reported $2,275. The company also reported operating earnings of $3.7 billion, as compared to $4.2 billion in the prior year quarter. These earnings were mainly impacted by lower operating profits in the Insurance and BNSF divisions. [...]

Diversification Helped Berkshire Out in First Quarter (Morningstar)

Berkshire Hathaway released results for the first quarter of 2016 that were basically in line with our expectations, with weaker results from BNSF being largely offset by better results from insurance and finance and financial products, as well as the addition of Precision Castparts to overall results. [...]

First-quarter revenue increased 7.7% year over year to $52.4 billion, with the biggest contributions coming from Berkshire's insurance operations (where earned premiums rose 16.6% year over year), followed by its manufacturing, sales and retail operations (which benefited from the closure of the Precision Castparts acquisition) and finance and financial products (which posted 11.1% revenue growth year over year). Excluding the benefits from the Precision Castparts acquisition, first-quarter revenue increased 2.8%. [...]

Book value per Class A equivalent share was $157,369 at the end of the first quarter--up 7.1% year over year and 1.2% when compared with the fourth quarter of 2015. [...]

At Berkshire Hathaway, Cash Tumbles as Float Inches Up (WSJ CFO Journal)

More interesting: what kind of money chief executive Warren Buffett has on hand for acquisitions. The company’s position in cash and cash equivalents totaled $58.3 billion at the end of March down 18.7% from $71.7 billion at the end of the year.

That fall off is no surprise. Berkshire Hathaway completed its acquisition of Precision Castparts Corp., its largest ever, on January 29, and its purchase of the Duracell Co. from the Procter & Gamble Co. a month later.

The decline in cash may mean Mr. Buffett will be content with smaller “bolt on” acquisitions at its wholly-owned companies for a while. [...]

Berkshire Hathaway 2016 Annual Meeting Wrap-Up

Berkshire Hathaway's Annual Meeting was held on Saturday, April 30, in Omaha. A first this year, the business meeting was live-streamed by Yahoo Finance. You can view the full video on Yahoo through May 30.

Were you among the 1.8 million people who watched it already?

Berkshire Hathaway meeting viewed live 1.8 million times (Tulsa World)

The first online broadcast of Berkshire Hathaway's annual shareholder meeting was viewed 1.8 million times. [...]

In addition to the online audience, Buffett says roughly 40,000 people attended the event in Omaha.

Yahoo Finance says there were 1.1 million unique viewers of the broadcast worldwide. The meeting broadcast was offered in English and Mandarin.

Or, if you don't have 8 hours to sit and watch the entire Warren and Charlie show, Yahoo put together a summary (with shorter videos) of the more interesting parts:

13 key moments from Berkshire Hathaway's annual shareholder meeting (Yahoo)

BizNews transcribed many important moments in the proceedings.

ValueWalk recaps the Q&A portion of the meeting here:

Berkshire Hathaway 2016 Annual Meeting Recap (ValueWalk)

Motley Fool Coverage:

3 Takeaways from Berkshire Hathaway’s Annual Meeting (Fool)

No time even for that? Only the highlight quotes:

Berkshire Hathaway's annual meeting: The highlights (CNBC)

ABC News covers the event itself:

Berkshire Hathaway Event Celebrates What Makes Firm Unique (ABC News)

Berkshire Hathaway's idiosyncrasies were on display this weekend, as tens of thousands of people filled an arena to listen to Warren Buffett and Charlie Munger talk business for several hours Saturday at the conglomerate's annual meeting.

No other company can match the crowds who attend Berkshire's meeting, the 51-year-tenure of its top two executives or its eclectic mix of businesses. Though attendance was down from last year's 50th anniversary meeting when more than 40,000 attended, it still dwarfs any other corporate meeting. [...]

Gawker sent a reporter to cover the Annual Meeting (and Buffett himself) from their own unique and irreverant perspective:

Warren Buffett Is the Best Argument for Capitalism. Is It Good Enough? (Gawker)

Normal companies might treat shareholders who had traveled across the country to a few free gifts. T-shirts. Water bottles. That sort of thing. At Berkshire Hathaway it is the opposite: its fans are given only the right to spend more money. This is in keeping with Warren Buffett’s reputation as a world-class miser, so they can’t really get mad about it. Thousands upon thousands of these wide-eyed true believers crowded into Omaha’s convention center last Friday not to receive, but to give more money to Berkshire at its big shopping day. Inside the huge space, dozens of Berkshire-owned companies had set up display areas, and most of them were offering crap for sale. It was like the world’s most random Costco, lacking all order or theme. [...]