Berkshire News Briefs - 9/3/16

Warren Buffett’s company tops up on Phillips 66 shares (CBS News)

Warren Buffett’s company now controls more than 15 percent of Phillips 66 stock after buying another 414,065 shares of the oil refiner this week.

Berkshire Hathaway disclosed the latest purchases in a filing with the Securities and Exchange Commission on Wednesday.

Berkshire now owns about 79.5 million shares of Phillips 66 (PSX), which represents 15.2 percent of the Houston-based company’s stock. [...]

Here's How Warren Buffett Could Lose a Major Cash Cow as Dow Chemical Rallies (Fortune)

[Berkshire Hathaway] has been collecting roughly $225 million a year (or $8 a second) in interest from his Dow Chemical stake since 2009. That year, Buffett provided Dow with $3 billion to help finance its purchase of chemical maker Rohm and Haas. As part of the agreement, the industrials giant gave the investor preferred stock and slapped on a hefty 8.5% annual payment on top of it.

But the contract came with a back door for Dow. Starting in April 2014, should shares of Dow Chemical close above $53.72 for 20 days in any consecutive 30-day trading period, Dow can convert Buffett’s preferred shares into common stock—canceling the Oracle’s $8-a-second payout. Each of Dow’s common shares pay a mere 3.4% annual regular dividend, so it’s of little surprise that Dow Chemical has indicated that it fully intends to convert Buffett’s stake should the conditions be met. [...]

Berkshire’s Jain Tells Gen Re Staff to Fix ‘Problem’ With Costs (Bloomberg)

Ajit Jain, one of Warren Buffett’s top managers at Berkshire Hathaway Inc., has a message for the staff that he oversees at Gen Re: It’s time for their business to get much leaner and less bureaucratic.

After taking charge of the reinsurer this year and installing a longtime deputy to lead the operation, Jain sent a memo to employees detailing five areas, including compensation and sales channels, where changes should be made. He also called for increasing business unit autonomy, accepting modifications on the terms of some risk-transfer deals and reducing complexity. [...]

Iowa Approves Massive Wind Farm Amid Utility's Push for 100 Percent Renewable Energy (GovTech)

The Iowa Utilities Board has given MidAmerican Energy the green light for the utility's plans for a $3.6 billion wind energy investment, the largest renewable energy project in the state.

The state board on Friday gave final approval for the utility's Wind XI farm.

The project -- first announced in April -- is part of Des Moines-based MidAmerican's goal to reach 100 percent renewable energy for Iowa customers. [...]

BNSF launches faster intermodal service between Pacific Northwest, Texas (Progressive Railroading)

Starting Sept. 12, BNSF Railway Co. will offer intermodal customers a new service to move freight between the Pacific Northwest and Texas, the Class I announced yesterday.

Under the new service, shippers who move commodities and consumer goods between Portland, Ore., or Seattle and Dallas/Fort Worth will be able to cut transit times by up to two days when compared to rail transit time options currently in the marketplace, BNSF officials said in a press release. [...]

Berkshire Affiliates Refund $95K After Market-Based Rate Ruling (RTO Insider)

NV Energy and PacifiCorp returned nearly $95,000 to generation customers after FERC revoked market-based rate authority for Berkshire Hathaway Energy affiliates in four neighboring Western balancing authority areas and imposed cost-based rates. [...]

The commission restricted Berkshire’s market-based rate authority in June after ruling that the company’s affiliates failed to disprove that they collectively exercise horizontal market power in the PacifiCorp East, PacifiCorp West, Idaho Power and NorthWestern balancing areas [...]

Berkshire Hathaway, Transformed (Bloomberg)

Warren Buffett's Berkshire Hathaway took its first step toward becoming a conglomerate back in 1967 by stepping from textiles into insurance, which would become its lifeblood. Nearly fifty years later, it's evolved again.

The $358 billion company's steady foray into energy, railways and manufacturing (among other sectors) has radically changed its earnings profile over the past decade. As a result, once-core insurance divisions such as Geico have become a much smaller part of the overall business. In fact, Berkshire's insurance arm is expected to contribute just 25 percent of its total 2016 pre-tax operating earnings, less than half the 57 percent that it accounted for in 2006. [...]

86 Reasons We Love Warren Buffett (Fool)

Tuesday, Aug. 30, is Warren Buffett's 86th birthday. Each year, I celebrate the Babe Ruth of Investing's birthday by adding another reason we love our hero. [...]