Berkshire News Briefs - 8/14/18

Berkshire Hathaway's Operating Earnings Soar 67% in the Second Quarter

Berkshire Hathaway shareholders should be pleased with the company's earnings report for the second quarter. The Omaha-based conglomerate reported operating earnings of $6.9 billion, a 67% increase over the year-ago period, due primarily to higher profits in insurance and a lower tax rate thanks to last year's corporate tax cut. [...] Insurance -- $2.1 billion profit
Railroad -- $1.3 billion profit
Manufacturing, service, and retailing -- $2.1 billion profit
Utilities and energy -- $581 million profit
Finance and financial products -- $429 million profit

Improved Insurance Results Lift Berkshire's Earnings

As wide-moat Berkshire Hathaway reported second-quarter results that were basically in line with our expectations, we are leaving our $330,000 ($220) per Class A (B) share fair value estimate in place. Second-quarter (first-half) revenue, which now includes both unrealized and realized gains/losses from Berkshire's investments and derivatives portfolios, increased 19.3% (decreased 2.9%) to $68.6 ($119.0) billion. Excluding the impact of investment and derivative gains/losses and other adjustments, second-quarter (first-half) operating revenue increased 8.4% (decreased 0.8%) to $62.2 ($120.7) billion. [...]

Warren Buffett’s Berkshire Hathaway is climbing after announcing a $111 billion cash pile that's fueling speculation over its next big investment

The Omaha, Nebraska-based company also said it's sitting on a $111.1 billion nest egg of cash and cash equivalents, giving speculators ample fodder to theorize over Buffett’s next investment. Berkshire in July loosened its policy on share buybacks, which it says will be repurchased when their value is "below Berkshire’s intrinsic value," Chairman Charlie Munger said. [...]

Buffett has not made a big acquisition since January 2016 when Berkshire paid $32.1 billion for the aircraft-parts manufacturer Precision Castparts. Prior to that, he made headlines with his purchase of truck-stop chain Pilot Flying J in the fall of 2017. [...]

BNSF's second quarter OR comes in weakest of the class 1 railroads

For the second quarter of this year, the operating ratio posted by BNSF was 66.8%. That was worse than the 65.3% of the second quarter of 2017, but was an improvement over the 67.9% posted in the first quarter of this year. Virtually every railroad posted an improved OR between the first and second quarters of this year, as the tough weather of winter 2018 faded away to the milder conditoins of spring and early summer.

The BNSF statement does not discuss management's views of the OR. But an OR of 63% posted by Union Pacific brought a decidedly negative reaction when posted a few weeks ago, particularly in comparison to those of CSX and Canadian National, which were both sub-60%. Other class 1 railroads--Kansas City Southern, Norfolk Southern and Canadian Pacific--were all around 64%, and Canadian Pacific's number was negatively impacted by labor disruptions that resulted in just a small strike but the disruption created by two shutdowns. [...]

Buffett's Berkshire Offers Loan to Owner of Former Sears Properties

Billionaire Warren Buffett's Berkshire Hathaway Inc is loaning up to $2 billion to the company that owns some of what used to be some of Sears Holdings Corp's best real estate.

A subsidiary of Buffett's conglomerate, Berkshire Hathaway Life Insurance Company of Nebraska, is offering what is known as a term loan facility to a New York-based real estate investment trust that owns the struggling retailer's formerly owned retail space.

The real-estate trust, Seritage Growth Properties , was formed as a spin-out of some of Sears' 235 top properties into a publicly traded company of its own in 2015. The U.S. department store operator then leased back some of the properties.

Buffett was an early backer of Seritage. He is personally one of the real estate trust's top owners, holding nearly 6 percent of its outstanding shares. [...]

Pilot Flying J lays off 50 at corporate headquarters Monday

“As part of our strategic process, internationally respected consulting firm Deloitte recently created an analysis of our business as we embark on exciting new initiatives and areas of growth,” Pilot Flying J President Ken Parent said in a released statement. “With these new strategies, we will be re-allocating resources to shift attention to new opportunities and to streamline our operations. [...] We do remain focused on continuing to build upon our standards as an industry leader, having opened 15 new stores this year, building nine more, and creating 17 truck care centers as we look to more efficiently grow our company footprint. Last year Warren Buffett's Berkshire Hathaway bought a 38.6 percent stake in Pilot Flying J. The Haslam family retained a 50.1 percent stake, but by 2023, Omaha-based Berkshire Hathaway’s share will increase to 80 percent. [...]

Warren Buffett Is Ending His Meetings With College Students

Billionaire Warren Buffett is ending his long-standing practice of meeting with business students to answer their questions about investing and life.

The Omaha World-Herald reports Buffett's office has told the universities that have been bringing students to Omaha to meet with him for years that he will no longer host the groups. Last year, he met with students from 40 different universities.

One of Buffett's assistants, Joanne Manhart, says Berkshire Hathaway's chairman and CEO is cutting back on speaking engagements.

Manhart says Buffett's health wasn't a factor in the decision, but Buffett will turn 88 on Aug. 30. [...]

Berkshire News Briefs - 7/30/18

Warren Buffett has set the table for a big stock buyback at Berkshire Hathaway

In a press release late Tuesday, the company said that it has amended its policy regarding share repurchases, now allowing for repurchases of Berkshire stock to be made at the discretion of Buffett and vice chairman Charlie Munger so long as both men "believe that the repurchase price is below Berkshire’s intrinsic value, conservatively determined." [...]

Additionally, the company will not repurchase stock in excess of an amount that would reduce its cash and equivalent holdings to less than $20 billion. [...]

Atul Gawande starts first day as CEO of Amazon, Berkshire Hathaway and JPMorgan health venture

After months of anticipation and fanfare, Dr. Atul Gawande is starting his new job Monday as the CEO of the healthcare venture from Amazon, Berkshire Hathaway and JPMorgan Chase.

The healthcare community at large seems to be both skeptical and hopeful about the venture and Gawande’s appointment. His goal will be to create innovations in a burdened and dangerously large healthcare industry, lowering the cost of care while improving health outcomes. [...]

Berkshire's Todd Combs Aided Buffett in Showdown Over USG Transaction

Warren Buffett’s investing deputy, Todd Combs, helped the billionaire investor in his effort to exit Berkshire Hathaway Inc.’s stake in USG Corp. [...]

Combs’s role in the deal highlights his emergence as a top deputy for Buffett. Combs was selected for an investment role at Berkshire in 2010 and was later joined by Ted Weschler. The pair now oversee $25 billion, according to Berkshire’s annual letter released this year. Combs has increasingly been in the public spotlight with his appointment to JPMorgan Chase & Co.’s board in 2016 and his recent role helping to craft Berkshire’s health-care venture with JPMorgan and Amazon.com Inc. [...]

Meet the new CIO of BNSF Railway, and learn how technology will shape the railroad's future

[...] In the five years Murugappan has been with the company, he's driven a substantial amount of change in how BNSF utilizes technology.

He was part of the team that modernized the systems BNSF uses to inspect its assets. Predicting when the assets need maintenance is vital, and BNSF is using things like big data to make the process more efficient. [...]

Oil industry concerned over BNSF's move to limit retrofit tank cars

U.S. refiners and producers are seeking ways to counter efforts by BNSF Railway Co to limit use of retrofitted oil tank cars following an Iowa derailment last month, Reuters has learned.

The crackdown by the country’s largest railroad, owned by Warren Buffett’s Berkshire Hathaway Inc, could take thousands of tank cars off a key rail line at a time when producers and refiners are scrambling to hire them.

With latest OK, PacifiCorp moves ahead with wind, transmission additions

With the last necessary state-level regulatory approvals it needed now in hand, PacifiCorp said it will move forward in building 1,150 MW of wind projects and a high-voltage transmission line in Wyoming.

The utility's goal is to complete the three wind projects in 2020 to realize the full benefit of production tax credits. The new projects will increase the amount of owned and contracted wind capacity on PacifiCorp's system by more than 60% [...]

Warren Buffett donates $3.4 billion worth of Berkshire stock

Warren Buffett's annual donation of stock to five foundations is worth around $3.4 billion this year.

In a news release, Berkshire Hathaway said Buffett converted 11,867 of his Class A shares into around 17.8 million Class B shares to make the contributions.

Based on the schedule established in 2006, when Buffett pledged to give away the bulk of his fortune in the coming decades, the Bill and Melinda Gates Foundation will be getting a large majority of the shares. [...]

Berkshire News Briefs - 7/7/18

Warren Buffett is big winner after US bank stress tests

Warren Buffett’s Berkshire Hathaway is poised to net about $1.7bn in dividends after Wells Fargo and other banks in which he is a shareholder sailed through the Federal Reserve’s annual stress tests. [...]

Berkshire is one of the biggest single investors in the financial sector globally. It is the number one shareholder in lenders including Wells, Bank of America and American Express, and has sizeable stakes in several others. [...]

Amazon-Berkshire-JPMorgan Health Venture Takes Aim at Middlemen

The health venture established by Amazon.com Inc., Berkshire Hathaway Inc. and JPMorgan Chase & Co. will take aim at intermediaries in the health-care system as a part of a broad effort to reduce wasteful spending, the venture’s newly named chief executive officer said.

The still-unnamed business will initially seek to develop ways to improve care for the more than 1 million individuals who get health insurance from the three firms. Over time, the venture will make those innovations available freely to other companies, meaning that if it’s successful, its effects could be felt more broadly among the more than 150 million people in the U.S. who get their health insurance through work. [...]

Warren Buffett hands reins of World-Herald, other Berkshire Hathaway newspapers to Iowa firm Lee Enterprises

As the newspaper industry navigates a decline in print circulation and advertising revenue, hometown owner Warren Buffett is assigning the fate of his own BH Media Group to an out-of-town company.

Lee Enterprises of Davenport, Iowa, will manage The World-Herald and the 29 other Berkshire Hathaway-owned daily newspapers, the companies announced Tuesday in a five-year agreement that could bring Lee $50 million over five years.

Berkshire Hathaway's Acquisitive Clayton Lands Arbor Homes

After an 18-month courtship, Maryville, Tenn-based Clayton Properties Group closed on the acquisition of Indianapolis' No. 1-ranked home building firm, Arbor Homes, adding to its 8-state map a 24-year old private builder whose signature stock in trade is a rarity these days: the profitable below-$200,000 site-built home.

The 7th regional site-build jewel in the Clayton crown adds to its suddenly hefty portfolio of regional firms--on pace to deliver as many as 4,500 homes in 2018--gives the Berkshire Hathaway unit fresh headway and a platform to launch further inroads in its goal to provide people priced out of many housing markets with an attainable path to homeownership. [...]

BNSF estimates 230,000 gallons of oil spilled in NW Iowa

Iowa Gov. Kim Reynolds visited Saturday to authorities assigned to clean up 230,000 gallons of oil that spilled Friday morning into the Little Rock River near Doon in northwest Iowa.

The spill was caused by a derailed BNSF train. [...]

The company reported later Saturday that about 100,000 gallons of the 230,000 gallons of spilled oil had been contained, and that oil would be removed from the immediate area with oil-water separators. [...]

How Warren Buffett and Bill Gates ended up walking into an Old Market store

Warren Buffett and Bill Gates didn’t just wander into an Old Market nostalgia store the day after the Berkshire Hathaway shareholders meeting in May, with “Little Brown Jug” playing in the background.

No, some of Gates’ staffers had been to Omaha in the past and were fascinated by Larry Richling’s Fairmont Antiques & Mercantile store/Hollywood Candy, 1209 Jackson St., and its combination of candy store, memorabilia collections, soda fountain and more.

The Gates group decided that it would be just the place for an episode of Gates’ video blog, showing the two friends having a good ‘ol time in Omaha. [...]

Berkshire News Briefs - 2/23/18

Berkshire Hathaway released its quarterly 13F statement, detailing its stock holdings as of Dec. 31, 2017.

Here's a summary from Dataroma.

Buffett's Bumpy Ride With IBM Draws to a Close With Stock Sales

Warren Buffett is just about done with International Business Machines Corp.

His conglomerate, Berkshire Hathaway Inc., reported that it cut its stake in Big Blue by 94 percent during the fourth quarter, essentially drawing to a close a rare blemish on his investing record. [...]

IBM was always a curiosity for Buffett followers. He’d spent years telling them that technology companies were outside his area of expertise then plowed more than $10 billion into the company in 2011. [...]

Warren Buffett's Berkshire Hathaway loves loathed Israeli drug stock Teva

After news hit Wednesday that Warren Buffett's Berkshire Hathaway had made a $358 million investment in Israel-based drug company Teva Pharmaceutical Industries, a skepticism lingered even as shares of the heavily shorted stock soared.

What does Berkshire Hathaway see in an out-of-favor drug stock that has languished — Teva shares have declined by roughly half in the past year — that the rest of Wall Street doesn't?

Maybe nothing special. And the size of the bet — at $358 million — is within the discretionary stock selling mandates of Buffett's hedge fund lieutenants, Ted Weschler and Todd Combs. But the bet is consistent with Buffett's long history of value investing, albeit with a twist. [...]

Phillips 66 agrees to repurchase shares from Berkshire Hathaway subsidiary

Phillips 66 said it will buy back shares worth $3.28 billion from a Berkshire Hathaway subsidiary, in a transaction that could ease regulatory pressure for Berkshire, the conglomerate run by Warren Buffett.

Phillips 66 will repurchase 35 million shares for $93.725 per share. The buyback will bring Berkshire's stake in Phillips 66 to slightly below 10 percent. [...]

Buffett's BNSF railroad eyes blockchain for shipping freight

BNSF Railway Co, a unit of the billionaire’s conglomerate Berkshire Hathaway Inc (BRKa.N), on Monday said it has become the first major U.S. railroad to join the Blockchain in Transport Alliance.

The alliance is a group of more than 200 companies examining how best to use the digital ledger technology behind bitcoin and other cryptocurrencies in the transport industry.

It hopes to establish blockchain standards in such areas as vehicle maintenance, quality control and fraud prevention.

Among its members are shippers FedEx Corp and United Parcel Service Inc, tire maker Bridgestone Corp, German software company SAP SE, and some banks and brokers [...]

Buffett’s Berkshire Hathaway Is Cutting More Jobs Across Newspaper Group

BH Media Group is reducing staff by 148 employees and not filling 101 vacant positions, representing a total of about 6 percent of its workforce, the company said Tuesday in a statement. The organization is seeking to trim expenses because of declining advertising revenue.

Among the cutbacks, Buffett’s hometown newspaper, the Omaha World-Herald, is eliminating 43 positions including vacant ones, the paper reported on its website Tuesday. Eleven newsroom employees were among those let go. [...]

Buffett's Business Wire suffers cyberattack

Business Wire, the corporate news release distributor owned by Warren Buffett's Berkshire Hathaway Inc, on Tuesday said it has been suffering for nearly a week from a cyberattack designed to disable it.

The company said it has been experiencing a "directed and persistent" denial of service attack since Jan. 31, though customer information has not been compromised.

"Our website slowed down," said Neil Hershberg, a senior vice president at Business Wire, in a phone interview. "At no point were clients unable to get our releases to us. Our distribution network was totally unaffected by this attack." [...]

Warren Buffett is retiring from Kraft Heinz board

Warren Buffett is retiring from the board of directors of Kraft Heinz, a subsidiary of his company Berkshire Hathaway.

"Mr. Buffett decided to retire from the board as he decreases his travel commitments," Kraft Heinz said in a press release on Friday.

The 87-year-old billionaire will retire after his term ends at the Kraft Heinz annual meeting of stockholders, the company said. [...]

Berkshire News Briefs - 9/8/17

Billionaire Warren Buffett says hurricane damage will linger

Billionaire Warren Buffett says the storm damage in Texas is staggering, but he isn't sure yet how much insurance companies will have to pay in claims. [...]

The investor expects that 50,000 of the roughly 500,000 vehicles Geico insures in the area will be total losses. But Buffett predicted there will also be large uninsured losses after this storm.

Buffett said Berkshire hasn't written much catastrophe insurance in recent years because prices were too low, so that will limit the Omaha, Nebraska-based company's exposure. By contrast, Berkshire recorded $3.4 billion in hurricane-related losses in 2005 when Hurricanes Katrina, Rita and Wilma struck the Gulf Coast. [...]

Berkshire Hathaway leads Florida auto insurance

As Category 5 Hurricane Irma looks set to make landfall in Florida after wreaking havoc in the Caribbean, The Insurance Insider looked at the most exposed primary carriers in the Sunshine State's commercial multi-peril and auto insurance markets in 2016. [...]

Berkshire Hathaway was Florida's leader in auto with a market share of 20.7 percent - equivalent to $4.1bn of premiums written. [...]

Watch CNBC's full interview with investing icon Warren Buffett (24 min video)

Warren Buffett, Berkshire Hathaway, speaks with CNBC's Becky Quick about Hurricane Harvey, the U.S. economy and his stock holdings.

Market Folly has a page of notes and summaries if you don't have time to watch the video.

Buffett spins $5 billion BofA investment into $12 billion profit

Berkshire Hathaway made good on its plan to convert warrants into 700 million shares of Bank of America common stock, the bank announced on Tuesday. [...]

Berkshire's agreement was to convert the warrants to Bank of America shares at $7.14 each. The shares closed Tuesday at $23.58, meaning Berkshire's paper profit on the stake is about $12 billion. [...]

Thousands of rail workers back at Buffett's BNSF as volumes rise

BNSF, the top U.S. coal carrier, laid off roughly 5,000 employees from mid-2015 to early 2016. The Texas-based company and its peers faced cost pressures from plunging coal volumes as the strong U.S. dollar hurt exports of the fuel and utilities switched to burning cheaper natural gas.

BNSF brought back roughly 4,000 of those workers as coal volumes rose this year, along with high levels of grain and upticks in intermodal containers and trailers, and sand used in hydraulic fracturing, spokesman Zak Andersen said. [...]

NetJets re-ups with PGA Tour

NetJets has extended its contract as the official private-jet provider of the PGA Tour.

The agreement, originally signed in 2014, now extends through 2022. It calls for NetJets to provide flights, marketing support and charitable contributions to the tour, its tournaments and its players. [...]

Travelex Insurance Services and Berkshire Hathaway Travel Protection Form Partnership

Travelex Insurance Services (Travelex) and Berkshire Hathaway Specialty Insurance Company’s Berkshire Hathaway Travel Protection (BHTP) have formed a strategic relationship. This partnership brings together the financial strength, product underwriting, and claims handling of BHTP with the extensive sales and marketing and travel provider network of Travelex. [...]

Travelex Insurance Services, a leading travel insurance provider in the United States, develops and distributes a comprehensive suite of travel protection products for travel agencies, tour operators, cruise lines, vacation clubs and timeshare operators. [...]

Berkshire News Briefs - 5/17/17

Berkshire’s Earnings Hit Speed Bump on Insurance Businesses

Warren Buffett’s Berkshire Hathaway Inc. hit a speed bump in the first quarter as insurance units posted an underwriting loss, overshadowing gains at the company’s railroad and energy business. [...]

First-quarter operating profit slipped 4.8 percent to $3.56 billion, the company said Friday in a statement. [...]

Berkshire’s war chest totaled $96.5 billion at the end of the first quarter, a record. [...]

Book value, a measure of assets minus liabilities that’s closely tracked by investors, rose 3.5 percent in the first quarter to $178,073 per share. [...]

Berkshire Hathaway press release on 1Q17 Earnings

Berkshire Cuts 21st Century Fox Stake, Adjusts Airline Bets

Warren Buffett’s Berkshire Hathaway Inc. spent the first quarter fine-tuning its investments in airlines and technology companies, and retreating from 21st Century Fox Inc.

In a filing Monday detailing its stock portfolio at the end of the quarter, Berkshire no longer listed Fox. Holdings in American Airlines Group Inc. and Southwest Airlines Co. increased, while a stake in Delta Air Lines Inc. was reduced. Buffett previously disclosed that he boosted a bet on Apple Inc. in the first quarter as he pulled back from International Business Machines Corp. [...]

The new 13F filing is here. Berkshire Hathaway's updated stock holdings in an easy to read format from Dataroma is here.

5 Key Takeaways From Today's Berkshire Hathaway Meeting

So, what would prompt Berkshire to start putting its cash to work? Essentially, Buffett said that Berkshire wants to acquire businesses that will have a competitive advantage over the next five to 10 years, whose management teams are strong, and that are offered at a fair price. [...]

Buffett also said that if there's a persistent shortage of attractive investment opportunities, Berkshire may eventually choose to increase its buyback criteria of 120% of book value or less, but he is still optimistic about finding ways to deploy Berkshire's capital. [...]

Here's the best wit and wisdom from Warren Buffett at this year's Berkshire Hathaway annual meeting

Buffett and long-time business partner Charlie Munger spoke for hours at the Berkshire Hathaway annual meeting Saturday in Omaha.

The pair frequently elicited laughter from the crowd of 40,000 by answering questions from shareholders and journalists with their usual folksy sense of humor and wisdom. [...]

A Comparison of Berkshire Hathaway Class A and Class B Shares

[...] From these tables, institutions and mutual fund holders own only 27% of the A shares, but 64% of the B shares. That can be explained by insiders and 5% owners holding 41% of the A shares and less than 1% of the B shares. According to Berkshire’s Notice of Annual Meeting of Shareholders May 6, 2017, Warren Buffett beneficially owned 38.3% of the A shares as of March 8, 2017. The insiders primarily accumulated their shares in the 1960’s and 1970’s when Berkshire traded at less than $100 per share.

It should be noted, however, that these tables imply that individuals (other than insiders) hold about 31% of the A shares and 35% of the B shares. [...]

Clayton Homes unveils new tiny home series

Clayton, a Berkshire Hathaway company and a builder of manufactured, modular and site-built homes, introduced its new tiny homes collection Saturday at the Berkshire Hathaway’s Annual Shareholders Meeting in Omaha, Nebraska. [...]

The homes are just 464 square feet and offer 270 degrees of window views. They have vaulted ceilings to give the homes a larger feel, and the master bedroom fits a queen-size bed and a full-height closet. [...]

Even in Texas, sometimes the billionaires lose

A bill that would carve out a loophole for Buffett’s chain of auto-dealerships in Texas — put on the fast track last month right after the billionaire’s meetings with Gov. Greg Abbott and Lt. Gov. Dan Patrick — ran into a wall of opposition from prominent Tea Party activists. They burned up the phone lines at the Capitol and publicly criticized what they saw as special treatment for the wealthy and connected.

Not long after those activists spoke out against the carve-out legislation in an open letter to the billionaire, Patrick pulled the “Buffett Bill” off the Texas Senate agenda, effectively killing it for now [...]

John Oliver eviscerates one of Warren Buffett's favorite companies

One of Warren Buffett's favorite stocks has just been attacked by HBO comedian John Oliver.

DaVita operates dialysis centers, and Buffett's Berkshire Hathaway owns a nearly 20% stake in the company. It was the subject of a scathing 24-minute long segment on Sunday's "Last Week Tonight."

Oliver accuses DaVita of pushing patients to continue receiving long and expensive dialysis treatments instead of having kidney transplants, which could eliminate the need for dialysis.

Berkshire News Briefs - 3/18/17

7 Enlightening Lessons From Berkshire Hathaway’s 2016 Annual Report

Just the lesson headings:

Lesson #1 - Book Value is an Imperfect Measure of Intrinsic Value
Lesson #2 – Dilution Destroys Shareholder Value
Lesson #3 – Buffett is Bullish on the American Economy
Lesson #4 – Bargain Hunting Combined with Long Holding Periods Create Substantial Value
Lesson #5 – Share Repurchases Build Value, Regardless of What the Skeptics Say
Lesson #6 – Cheap Leverage is an Incredible Advantage
Lesson #7 – Berkshire Has an Invisible Stake in Bank of America

BNSF agrees to clean up coal, petcoke emitted from rail cars

BNSF Railway Co. will clean up coal and petroleum coke in waterways, fund a study of rail-car covers and pay $1 million for environmental projects in Washington state, according to consent decree filed in U.S. District Court. [...]

Under the decree, BNSF will pay for the cleanup of Pacific Northwest waterways that were polluted by coal or petroleum coke that spilled from open-topped rail cars.

In addition, BNSF will pay $1 million for environmental projects in the Bellingham, Puget Sound, Columbia River and Spokane River areas. The Class I also will clean up areas of the Columbia River and its tributaries that have been littered with coal and petroleum coke from BNSF trains.

Moreover, the decree requires the railroad to fund a study about covers for rail cars carrying coal and petroleum coke. [...]

Additionally, BNSF denies any violations of the Clean Water Act, and the U.S. District Court judge did not find any specific violations. [...]

NV Energy seeks approval for rooftop solar alternative with Apple ties

Recall Berkshire Hathaway Energy subsidiary NV Energy's feud with Solar City over net metering in Nevada from last year...

NV Energy is seeking approval from state regulators for a renewable energy program that is aimed at providing an alternative to rooftop solar via energy sources based in the state, including one in conjunction with Apple. [...]

The Subscription Solar program allows NV Energy customers to subscribe each month to at least 100-kilowatt hour blocks of solar energy generated from within the state. The energy will be provided by the company’s Boulder Solar I facility, which has set aside 10 megawatts for the program, as well as the Techren II facility, which is a joint venture with Apple. The latter has set aside 5 megawatts for the program and will be online by 2019. [...]

The program will allow residential customers and, eventually, small to mid-size businesses to meet as much as 100 percent of their energy needs with renewable energy. NV Energy cited rooftop solar as a key factor in the creation of the program. [...]

KITCO Fiber Optics Joins Marmon Aerospace & Defense LLC

Marmon Aerospace & Defense LLC, a Marmon/Berkshire Hathaway company, today announced the acquisition of KITCO Fiber Optics of Virginia Beach, VA, a highly-respected leader in the specialty, military, and aerospace fiber optic industries. Terms were not disclosed.

While KITCO will continue to operate as an independent business, its products complement those of Marmon Aerospace & Defense. Together, the two businesses will offer defense industry customers unique, focused product and service capabilities for electrical, electronic, fiber optic, and communication solutions. Their collective resources will enable continued growth and innovation for both Marmon and KITCO in service to the U.S. defense industry. [...]

Dairy Queen Celebrates First Day of Spring With Free Cone Day on March 20

Drones have delivered products and pizzas. Now drones are delivering cones – for a good cause. To kick off Free Cone Day on March 20th, which is also the first day of Spring, DQ® enlisted the help of a drone to deliver cones to a few lucky fans. It was the first time the Berkshire Hathaway company has delivered cones by drone. For the rest of us, we can get our free cone at DQ all day on Monday, March 20th. Participating locations also will be collecting donations for Children’s Miracle Network Hospitals, which raises funds to help save and improve the lives of kids treated at 170 children’s hospitals across the U.S. and Canada. [...]

Buffett's pay rises; Berkshire urges rejection of shareholder proposals

Warren Buffett's compensation for running Berkshire Hathaway Inc. edged up 4.0 percent last year to $487,881 reflecting the higher cost of keeping the world's second-richest person safe. [...]

Berkshire said Buffett's salary in 2016 was $100,000, the same amount he has received for more than a quarter century, while the cost of providing him with home and personal security services rose to $387,881 last year from $370,244. [...]

Barack Obama Grabs Lunch with Billionaire Warren Buffett at Omaha Country Club

Former president Barack Obama made a quick stop in Omaha, Nebraska, Sunday afternoon to grab lunch with billionaire investor Warren Buffett, the Omaha World-Herald reported. The two were joined by Buffett’s daughter Susie Buffett for lunch in a private room at the Happy Hollow country club, where Warren Buffett is a member. [...]

While Susie Buffett remained quiet about the topics of conversation at the lunch meeting, some sources speculated the Obama visit was an effort to raise funds from the elder Buffett for his presidential library or other charities. [...]

Berkshire News Briefs - 1/26/17

BNSF budgets $3.4 billion for 2017 capex plan

BNSF Railway Co. unveiled a $3.4 billion capital expenditure plan for 2017, the Class I announced yesterday. Similar to last year's $3.9 billion plan, the largest component of this year's program will be to replace and maintain the railroad's core network and related assets. That aspect of this year's work will amount to about $2.4 billion, BNSF officials said in a press release. [...] In addition, BNSF expects to spend $400 million on expansion projects; $100 million on positive train control implementation; and $400 million on locomotives, freight cars and other equipment acquisitions.[...]

Kansas logistics park offers big intermodal-growth potential for BNSF

BNSF Railway Co. has tried to accelerate ID efforts in recent years to gain as big a business boost as possible, especially of the intermodal variety. From 2011 through 2015, the Class I each year landed more than $1 billion worth of new or expanded facilities along its lines, including $1.2 billion in 2015 and nearly $1.5 billion in 2014. And as of late last month, BNSF was on pace to surpass the $1 billion mark for the sixth-straight year, with about 100 ID projects on the 2016 docket, including several at a fast-growing, footprint-swelling logistics park in Kansas. [...]

J.B. Hunt, BNSF will review revenue split

[...] Last year, about $3.7 billion -- 60 percent of J.B. Hunt's revenue -- came from its intermodal segment. Michael Haverty, who was the president of Santa Fe Railway when he approached J.B. Hunt with the original intermodal deal in 1989, has estimated that BNSF makes about $1 billion annually from the deal. Santa Fe Railway Corp. and Burlington Northern Inc. merged to form BNSF in 1993.

The "evergreen" intermodal contract automatically renews each year. The agreement stipulates that the revenue division will be negotiated by the two companies and is reviewed quarterly. J.B. Hunt is questioning the period beginning May 1, 2016. [...]

Richline Group Acquires The Aaron Group

Richline Group, a wholly-owned subsidiary of Berkshire Hathaway, and The Aaron Group, a leading jewelry manufacturer and marketer, announced today that Richline has acquired The Aaron Group business effective today, January 11th. [...]

Since its founding as Samuel Aaron Jewelry in 1950, the Aaron Group has grown from its New York City roots to become a widely renowned, vertically integrated international jewelry manufacturer. Along the way, the Aaron Group has remained a true family business and, under the stewardship of third-generation leader Robert (Bobby) Kempler, has achieved stature as a major global force, with operations, factories, partnerships and hundreds of employees in New York, London, Mumbai, Hong Kong, and Guangzhou. [...]

Buffett’s Berkshire Buys German Pipe Company Wilhelm Schulz

A unit of Warren Buffett’s Berkshire Hathaway Inc. agreed to buy Wilhelm Schulz GmbH, a closely held German maker of piping components, as the billionaire accelerates an expansion in Europe.

Rainer Floeth, chief executive officer of Krefeld, Germany-based Wilhelm Schulz, confirmed by phone that Berkshire’s Precision Castparts had agreed to buy the company. He declined to elaborate on terms due to contractual obligations. The deal was first reported by German newspaper Handelsblatt, which cited Precision Castparts Corp. CEO Mark Donegan. [...]

AIG to pay Buffett's Berkshire about $10 billion in insurance deal

American International Group Inc (AIG.N) has agreed to pay roughly $10.2 billion to Warren Buffett's Berkshire Hathaway Inc (BRKa.N) to take on many long-term risks on U.S. commercial insurance policies it has already written.

The reinsurance transaction covers "long-tail" exposures, which are liabilities that emerge long after policies are issued, from excess casualty, workers compensation and other AIG policies issued before last year.

Berkshire's National Indemnity Co unit, led by Buffett's reinsurance chief Ajit Jain, will take on 80 percent of net losses in excess of the first $25 billion, with a maximum liability of $20 billion. [...]

The 5 Operating Principles Behind Berkshire Hathaway’s Uniquely Profitable Reinsurance Business

In his 2015 letter, Warren Buffett warned Berkshire Hathaway shareholders that prospects for the reinsurance industry had dimmed. However, as this week's $1.5 billion deal with The Hartford illustrates, five operating principles will enable Berkshire's reinsurance activity to beat competitors and remain comfortably profitable. [...]

1. Maintain unmatched financial strength and reputation
2. Focus on large, unusual risks
3. Price risks rationally and act quickly
4. Keep risks on your books
5. Stay disciplined and carry on

More Links...

The Brilliant Blunders and Investments that Made Warren Buffet a Billionaire

MidAmerican to start 2-GW Iowa project with 338 MW of wind farms

Berkshire Hathaway to Offer Services in Malaysia

Berkshire Hathaway Is Not Built To Last

Berkshire's Decker Says Buffett Can Take His Time With $85 Billion

Berkshire News Briefs - 12/2/16

Berkshire Hathaway filed their quarterly 13F last month, detailing their investment portfolio make-up as of September 30. You can see all the buys and sells highlighted in this chart of BRK's current holdings.

The big news was that Buffett has bought stock in all four major airlines. American, Delta, and United-Continental are listed in the SEC filing; Buffett also told CNBC that he has bought a stake in Southwest in October (after the Sept. 30 SEC cut-off for the 13F).

Berkshire Hathaway also sold 100% of its stake in Suncor Energy (SU) and Media General (MEG). Other big moves (+/- more than 10%) are reductions in Liberty Media (LMCA -48%, LMCK -36%), Kinder Morgan (KMI -25%), and Walmart (WMT -68%), and an addition to Liberty SiriusXM (LBXMK +11%).

Buffett's Berkshire takes stakes in four major airlines

Berkshire Hathaway's just released SEC filings show that the company has taken a stake in three of the four major airline companies — American Airlines, United Continental Holdings and Delta Air Lines.

But CNBC can report exclusively that Berkshire also has taken a stake in the fourth major carrier, Southwest Airlines.

The move into airlines is a shocking reversal for Warren Buffett, who has shunned the industry for decades following a volatile investment he made in US Airways back in 1989.

Warren Buffett's Berkshire Hathaway Is Cashing Out of Walmart

Warren Buffett has almost completely checked out of Walmart. After trimming some of his stake in the retailer earlier this year, Buffett slashed his remaining Walmart stock by nearly 70% as the discount store announced its controversial deal to buy e-commerce startup Jet.com. Buffett’s stake in Walmart is now worth less than $1 billion, down from nearly $3 billion in the middle of this year, according to new securities filings. [...]

Warren Buffett's Berkshire Hathaway Bets Big on Airlines at the Strangest Time

For two decades, Warren Buffett has been decrying airlines as terrible investments. Indeed, Buffett famously observed that a far-sighted capitalist should have shot down Orville Wright's plane at Kitty Hawk to save future investors the billions of dollars they would go on to lose in the airline business.

Yet in a stunning reversal, Berkshire Hathaway bought shares of the three largest U.S. airlines last quarter: American Airlines, Delta Air Lines, and United Continental. (Buffett revealed on Monday that Berkshire Hathaway went on to purchase shares of Southwest Airlines in October.)

This is strange timing for Berkshire Hathaway to reverse its stance on airline stocks, especially American, Delta, and United. Profit margins appear to have peaked at all three companies. [...]

Nevada votes to end NV Energy monopoly

Receiving almost three quarters of the votes, Nevada voters have passed a ballot measure that aims to break up NV Energy’s monopoly and liberalise the electricity market to more competition.

Known as the Energy Choice Initiative or Question 3 on a ballot approved on Tuesday, the news is a victory for solar as this is a significant move to deregulation of the state’s public utility. [...]

The measure was initiated in part by large companies, including casinos, wishing to break free from the state utility and find their own providers. [...]

That Big Berkshire Hathaway Railroad Deal

It's been seven years since Buffett's Berkshire Hathaway Inc. announced its biggest deal to date -- the $35 billion-plus purchase of Burlington Northern Santa Fe Corp. The Oracle of Omaha had the foresight to place his "all-in wager on the economic future of the United States" just as the nation emerged from a recession, and has reaped the benefits. [...]

BNSF's net income has more than doubled since 2009, which has in turn driven Berkshire Hathaway's earnings higher. Berkshire has already earned more than $22 billion in dividends from BNSF. In other words, it has already recouped basically all the cash used to finance the deal, which is a rare feat in itself. [...]

Buffett throws weight behind new Wells chief

Warren Buffett has thrown his weight behind scandal-hit Wells Fargo, saying it is “a great bank that made a terrible mistake” whose new chief executive Tim Sloan is “exactly right” for the top job.

Breaking his months-long silence on the debacle, the head of Berkshire Hathaway, the bank’s biggest shareholder, confirmed he has not sold any shares after the scandal erupted over sales practices. [...]

Duracell closing Cleveland, Tenn., packing plant by 2018

Battery maker Duracell plans to take some juice out of its Cleveland, Tenn., workforce, closing its packing plant by 2018 and cutting about 140 jobs. The move by Duracell, maker of the well-known "coppertop" battery, will not impact its manufacturing operation in Cleveland, where nearly 150 people are employed making C and D batteries, the company said. [...]

The announcement is the second major consolidation by Duracell since it was purchased by Warren Buffett's Berkshire Hathaway early this year. This summer, Duracell revealed it plans to close a battery-making plant in South Carolina that employs 430 people. The shutdown of the Lancaster, S.C., factory that makes AA batteries will begin in March and should be complete by the middle of 2019, Duracell said. [...]

Warren Buffett’s Meeting with University of Maryland MBA/MS Students – November 18, 2016

Berkshire has only 25 people at headquarters, but 360,000 employees. The managers of Berkshire’s 70 businesses choose their own people. The qualities they look for are intelligence, energy, and integrity. But the most important quality in a manager is having a passion for the business. It is not IQ but passion for their businesses that make Berkshire’s 70 managers stand out. When WB was 23 years old, he was rejected by Ben Graham for a job. Years later he received a letter saying the “next time you come to NY stop by my office”. WB went the next day. He never asked about pay. You should take a job that you would take if you didn’t need a job. [...]

Jokes in Warren Buffett’s Shareholder Letters

We all know Warren Buffett (Trades, Portfolio) is the greatest investor ever. He built his wealth buying stocks that sold below their intrinsic value. He is also an avid writer. He is very good at communicating his thoughts through conversational and humorous language and frequently tells jokes. These are some of the jokes he has told in his shareholder letters. [...]

Berkshire Hathaway 3rd Quarter Earnings

Berkshire Hathaway reported 3rd Quarter Earnings after the market closed on Friday, Nov. 4. [Press Release]

The headlines seemed to be either glass half full or glass half empty, depending on whether you believe Buffett's assertion that operating income is the best yardstick to measure the company's growth by.

Berkshire Hathaway profits falls 24 percent; company keeps Wells Fargo stake (St. Louis Post-Dispatch)

Berkshire Hathaway Inc. on Friday said third-quarter profit dropped 24 percent from a year earlier, when it recorded a large one-time gain, but acquisitions helped boost operating profit at the conglomerate run by billionaire Warren Buffett.

The company also reported a $22.1 billion stake in Wells Fargo & Co. as of Sept. 30, suggesting it kept its 10 percent ownership position even as the bank became embroiled in a scandal over its creation of unauthorized customer accounts. [...]

Quarterly net income for Omaha, Neb.-based Berkshire fell to $7.2 billion, or $4,379 per Class A share, from $9.43 billion, or $5,737 per share, a year earlier.

Operating profit, which excludes investment and derivative gains and losses, rose 7 percent to $4.85 billion, or $2,951 per share, from $4.55 billion, or $2,769 per share. [...]

Berkshire Operating Profit Climbs 6.6% on Manufacturing Gain (Bloomberg)

Warren Buffett’s Berkshire Hathaway Inc. said third-quarter operating profit rose 6.6 percent on contributions from newly acquired manufacturing businesses.

Operating earnings, which exclude some investment results, climbed to $4.85 billion, or $2,951 a share, from $4.55 billion, or $2,769, a year earlier [...]

Several of Berkshire’s large businesses struggled in the third quarter, however. The insurance group reported that underwriting profit slipped 34 percent to $272 million as results worsened at the company’s namesake reinsurance business and auto insurer Geico. Income from Berkshire’s railroad, BNSF, fell about 12 percent to $1.02 billion on reduced demand for coal and petroleum products. [...]

Book value, a measure of assets minus liabilities, rose to $163,783 per share at the end of September from $160,009 three months earlier. The cash pile rose to a record $84.8 billion

Berkshire Hathaway reports 3rd quarter operating earnings of $4.85 billion, up 6.6 percent (Omaha World-Herald)

[...] Although net income is the standard measure of corporate performance, Buffett has said Berkshire’s operating earnings are a better gauge because net income is affected by swings in the paper value of its insurance-like derivatives and by investment gains and losses taken during the reporting period.

Operating earnings reflect the earnings by the companies that Berkshire owns, such as BNSF Railway, Berkshire Hathaway Energy and its insurance operations. Net income is the overall profit by the company, including investments and derivatives. [...]

Berkshire News Briefs - 9/21/16

Warren Buffett: I won't comment on the Wells Fargo scandal until November (Business Insider)

Warren Buffett is waiting until after the election to weigh in on Wells Fargo.

Buffett told Fox Business' Liz Claman that he will not comment on the bank's scandal until November. Buffett is the largest shareholder of Wells Fargo and recently petitioned the Federal Reserve to increase his ownership stake above 10%. [...]

Wells Fargo recently settled with regulators for $185 million after it came to light that employees had opened around 2 million accounts without the knowledge of customers. About 5,300 of the bank's employees were fired as a result of the scandal. [...]

Buffett Now Phillips 66's Top Owner (Investopedia)

Shares of Phillips 66 rose after the news this week that billionaire Warren Buffett had increased Berkshire Hathaway Inc.'s holdings of the energy company by 1,019,974 shares, making Berkshire the largest holder. Berkshire now owns about 15.4% of the stock outstanding, or a total of 80,671,982 shares. [...]

Nevada Approves SolarCity’s Deal With Berkshire’s NV Energy

Nevada regulators have approved a deal between Berkshire Hathaway Inc.’s NV Energy utility and SolarCity Corp. that will roll back rate hikes for existing rooftop solar customers. The Nevada Public Utilities Commission voted 3-0 on Friday in favor of a settlement that will shield more than 32,000 rooftop solar customers in the state from increased fees that took effect in January. Earlier this week, NV Energy and SolarCity had asked the commission to approve an agreement that would grandfather those who signed up to use home solar prior to January under more favorable rates for 20 years. [...]

Berkshire Hathaway Will Do Just Fine After Buffett (Fortune)

Investment research firm Morningstar released a note on Sept. 2 that eased a widespread fear that without the now 86-year-old Oracle of Omaha and his partner, 92-year-old Charlie Munger, Berkshire Hathaway would collapse.

“The key to Berkshire’s success over the years has been Buffett’s ability to not only find fruitful ways to put the firm’s excess capital to work but in paying close attention to culture and fit when acquiring companies,” wrote Greggory Warren, senior equity analyst at Morningstar. “Berkshire’s culture of management autonomy and entrepreneurship has to a large degree become institutionalized.” [...]

Berkshire Hathaway firm CTB to buy 80% stake in Cabinplant (Packaging Business Review)

Berkshire Hathaway company CTB has agreed to purchase 80% stake in Danish company Cabinplant for an undisclosed sum. Based in Haarby, Cabinplant provides processing and weighing / packing solutions for the food industry. [...] The company, which has around 300 employees, carries out operations in about 30 countries. CTB said that the Cabinplant’s poultry processing equipment complements its Meyn poultry processing subsidiary.

Pasta Equipment Maker Dominioni Joins Marmon (BusinessWire)

Marmon Food, Beverage & Water Technologies Company, part of Berkshire Hathaway Inc., today announced the acquisition of the assets of Dominioni Punto & Pasta S.r.l., a leading Italian supplier of commercial pasta equipment, by Marmon Pasta Solutions S.r.l. Terms were not disclosed.

Founded in 1968 by Pietro Dominioni, the family-run business designs and produces professional pasta equipment for the restaurant, hospitality, and catering markets, as well as high-volume pasta manufacturers. The business will continue to operate under the Dominioni brand name and its operations will remain based in Lurate Caccivio (Como). Fabrizio Dominioni, son of the founder, will continue to manage the business. [...]

J.P. Morgan Names Berkshire Hathaway Investment Manager Combs to Board (NASDAQ)

J.P. Morgan Chase & Co. on Tuesday said it named Berkshire Hathaway Inc. investment manager Todd Combs to its board, bringing into the fold an heir-apparent of billionaire investor Warren Buffett's enterprise.

Mr. Combs, 45 years old, is a former hedge-fund manager who began working at Berkshire in 2011. He and a counterpart, Ted Weschler, manage portfolios of about $9 billion each, but they will take over all stock-picking duties when Mr. Buffett is no longer running the firm.

Mr. Combs has served as a director at Precision Castparts since late January, according to a regulatory filing. [...]

Berkshire Hathaway and underwriting unit sued for running ‘reverse Ponzi scheme’ (MarketWatch)

A New York City-based courier service has sued Berkshire Hathaway Inc. and one of its companies, saying they’ve been running a “fradulent scheme” by misusing premiums that were supposed to be used for funding its workers’ compensation coverage.

Breakaway Courier Systems in a lawsuit filed Friday said Berkshire and its Applied Underwriters company have engaged in what was “essentially a reverse Ponzi scheme.” [...]

Berkshire Agrees to Stop Selling EquityComp Policies in California (Insurance Journal)

California Insurance Commissioner Dave Jones on Tuesday approved an order agreed to by California Insurance Co. and Applied Underwriters Captive Risk Assurance Company Inc. under which they will stop selling workers’ compensation policies that the two Berkshire Hathaway companies used without filing key addendums to the policies. [...]

Jones’ action stemmed from his decision that a complex insurance scheme in a case involving a company called Shasta Linen. [...] Jones found that the insurance companies issued the policies and rates without his approval. He also ruled that the companies designed the program with the intent of avoiding the review of insurance regulators.

World’s Smartest Investor Outperforms With Boring Utilities (Oil Price)

[...] But several years ago, Buffet began steering Berkshire into investments unusual for a financial concern. He purchased a number of regulated electric utilities and a railroad, the Burlington Northern. These investments have much in common. They provide essential services in slow growing markets. They generate steady albeit modest returns. They require ongoing, large capital investments to maintain current levels of service and, as long as investment takes place, they generate substantial income tax deferrals that can also be invested profitably. Since these businesses are growing, at least in term of their assets--and some level of profitability is virtually assured--the owner or investor can still reinvest their capital at a reasonable return. They don’t have to worry about the vagaries of public markets equity or fixed income. They can invest in themselves so to speak. [...]

A psychologist reveals the persuasive tactic Warren Buffett uses to make his shareholders trust him (Business Insider)

[...] This unabashed recounting of Berkshire Hathaway's setbacks isn't unique to the 2012 letter; in fact, Buffett frequently opens his letters this way.

According to psychologist Robert Cialdini, this strategy is brilliant. Cialdini is a professor emeritus of psychology and marketing at Arizona State University, the CEO and president of Influence at Work, and the author of the new book "Pre-Suasion," in which he highlights the invisible interpersonal forces behind our behavior.

In the book, he highlights Buffett's letter-writing strategy as a prime example of a "pre-suasive" tactic, or a way to influence people to behave a certain way in the moments before they make their decision. In this case, the decision might be whether to start or continue investing in Berkshire Hathaway. [...]

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. [...]

Berkshire News Briefs - 7/1/16

Warren Buffett Tries To Buy A Smart Basketball (Vocativ)

Spalding, exclusive provider of basketballs for the NBA, is owned by Russell Brands (and not Fruit-of-the-Loom as this article says; I double-checked). Other companies have until July 18th to bid on the bankrupt company's assets before the bankruptcy court finalizes the sale.

Russell Brands LLC, a subsidiary of Buffett’s Berkshire Hathaway Co., has offered $1.5 million for the bankrupt start-up company that makes the 94Fifty Smart Sensor Basketball, according to the Wall Street Journal. The parent company, InfoMotion Sports Technologies Inc., reportedly filed for Chapter 11 protection on March 1.

The 94Fifty ball, which sells for $199.99 and was named a top-25 invention of 2014 by Time magazine, uses embedded sensors in a basketball to log such data as shooting arc, backspin, release speed, and dribble speed. [...]

Berkshire units ordered to halt California workers' comp policy sales (Reuters)

California's insurance commissioner has ordered two Berkshire Hathaway Inc insurance units to stop selling some workers' compensation policies that he considers illegal.

Commissioner Dave Jones on Wednesday issued a "cease and desist order" preventing Berkshire's Applied Underwriters Inc and California Insurance Co units from selling or renewing the policies in question in California.

Jones had on June 20 found that the units evaded a state law meant to protect small businesses from unexpected workers' compensation costs, through the sale of a nontraditional policy whose terms and rates had not been reviewed by state officials. [...]

Claiming Unfair Treatment, Buffett’s McLane Sues To Enter Texas (Shanken News Daily)

McLane Co., the mammoth food and drinks distributor owned by Warren Buffett’s Berkshire Hathaway, has filed a federal lawsuit in Austin claiming that the Texas Alcoholic Beverage Commission (TABC) is unfairly barring it from distributing beverage alcohol in the Lone Star State.

McLane’s lawsuit, filed in conjunction with the Texas Association of Business, takes aim at the TABC’s so-called “one share” rule—under which the agency aims to protect the three-tier system by prohibiting alcohol producers, distributors and retailers from holding as little as one overlapping ownership share in another tier of the business. Because McLane parent Berkshire Hathaway owns a 2% stake in Walmart—which retails beverage alcohol in Texas—the TABC has refused to grant it a distribution license in the state. [...]

Why Warren Buffett is one of the very few making money off Alberta’s mostly unprofitable electric system (Financial Post)

Two years ago, Buffett’s Berkshire Hathaway Inc. bought more than half of all the electric transmission lines crisscrossing Albertan farmland in a $3.2 ­billion acquisition of Calgary-­based AltaLink LP from troubled SNC-­Lavalin Group Inc., making Berkshire Hathaway the electricity transmission provider to 85 per cent of Albertans.

Electricity analysts in the province say that purchase, like many of Buffett’s deals, now looks brilliant. Electricity prices in the province have collapsed — from $49 per megawatt hour in 2014 to around $16 so far this year — but transmission prices have risen, and will continue to rise for at least the next five years. [...]

Two BNSF Freight Trains Collide in Texas on Busy Rail Route (Bloomberg)

Two BNSF Railway Co. freight trains collided in Texas, leaving at least one worker injured. Rescue efforts were under way for three other employees involved in the accident. [...]

The collision occurred at 8:25 a.m. local time near Panhandle, Texas, BNSF said in a statement Tuesday. [...] The trains were carrying intermodal cargo, which are usually consumer goods. The accident occurred on the main line known as the Southern Transcon linking Los Angeles with Chicago. [...]

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 News Briefs - 3/31/16

Buffett's Wells Fargo Stake Hits Level Requiring Fed Review (Bloomberg)

Warren Buffett’s holding in Wells Fargo & Co. reached 10 percent, a level that triggers a Federal Reserve review and could prevent him from buying more shares until he receives regulatory approval.

The billionaire investor’s stake reached that threshold because Wells Fargo has been buying back stock, according to a regulatory filing Monday. The document said the holding is about 506 million shares, the same as on Dec. 31 when it accounted for 9.9 percent. [...]

BNSF furloughs have hit 4,600 employees nationwide (Fort Worth Star-Telegram)

In another sign of the fallout of low energy prices, BNSF Railway says it has furloughed about about 4,600 of its employees nationwide over the past several months.

The furloughs amount to about 10 percent of the Fort Worth-based company’s workforce, matching the layoffs made by the railroad in 2007 and 2008, according to statements made by Matthew Rose, executive chairman of BNSF at an energy conference in Billings, Montana. [...]

Berkshire Hathaway Is 35% Undervalued (Fool)

If I sum up $107 per B-share in investments and $82 per B-share for the operating businesses, that gives me a grand total of $189 per B-share. That's 35% more than the current trading price of $140 per B-share.

Increasing Costs And Premiums At Berkshire Hathaway’s Geico (Valuewalk)

All told, both the severity and frequency of claims have been on the rise at Geico, said David Kass, a business professor at the University of Maryland and a Berkshire Hathaway shareholder.

“This resulted from lower prices for gasoline and an improving economy, which led to more miles being driven by policyholders,” Kass said. “These increases in costs to auto insurers reduces their profitability in the short run until appropriate premium increases can be implemented.” [...]

McLane Co. executive advises students on success in business (Richmond Dispatch)

“If you can accept being inconvenienced, then the rewards will be there, because it is noticed,” said W. Grady Rosier, president and chief executive officer of Temple, Texas-based distributor McLane Co., which he noted supplies groceries and other products to retailers and restaurants in every ZIP code in the nation. [...]

McLane grew from a one-man retail shop opened by Robert McLane in 1894 in Cameron, Texas, to become a $48 billion-a-year supply-chain behemoth, mostly by hitching its own trucking business to the rise of convenience stores such as 7-Eleven starting in the 1950s, then the explosion of big-box chain stores such as Walmart starting in the 1970s.

Rosier, 67, grew up in Florida and was the first in his family to attend college. He joined McLane in 1984 and became CEO in 1995, five years after it had been acquired by Walmart.

In 2000, the company was acquired by Berkshire Hathaway Inc., the holding company managed by billionaire investor Warren Buffett. [...]

International Dairy Queen, Inc. Opens First DQ Grill & Chill® Restaurant in Jordan (BusinessWire)

The Dairy Queen® system, part of Berkshire Hathaway, has opened a new DQ Grill & Chill® restaurant at Abdoun Circle in Amman, Jordan. The opening of this location in Jordan represents the latest country outside of the United States with a DQ brand presence.

SKM Franchise Co. Ltd. has entered into a long-term franchise agreement with American Dairy Queen, Corp. (ADQ) and plans to develop a minimum of 10 locations, including five DQ Grill & Chill® restaurants throughout Jordan over the next five years. [...]

Berkshire News Briefs - 3/12/16

This week's post got really long, so I broke it in two. News about Berkshire Hathaway itself in this post, news about subsidiaries coming next in a second post...

Berkshire after Buffett: One thing may not change (CBS MoneyWatch)

Most interesting, more and more major shareholders are becoming convinced that they should stick with Berkshire. They've been increasingly assured that with Buffett's decentralized management style -- unit managers operate independently and make their own business decisions -- a solid structure has been put in place that would enable Berkshire to operate soundly even after his departure. [...]

Another wealth manager at a major Wall Street investment bank noted that there could be "initial rush selling" once Buffett announces the exact date of his retirement, but "that would definitely inspire us to jump in and buy more shares when the stock tumbles as a result."

Buffett’s Berkshire Plans $9 Billion Bond Sale to Repay Loan (Bloomberg)

Warren Buffett’s Berkshire Hathaway Inc. sold $9 billion in debt, the conglomerate’s biggest bond deal ever, in the latest offering from a blue-chip company tapping investor demand for the most creditworthy borrowers.

Berkshire sold the debt in seven parts, according to data compiled by Bloomberg. Proceeds will help pay down a $10 billion loan used to finance its purchase of Precision Castparts Corp. Buffett had said earlier that Berkshire used about $23 billion of its cash for the deal and would borrow the rest. [...]

Investor orders for Berkshire Hathaway bond sale hit $34bn (Financial Times)

Investor orders for a piece of a $9bn Berkshire Hathaway bond sale eclipsed $30bn on Tuesday, as the conglomerate headed by Warren Buffett sought to repay bank loans used to finance its $36bn takeover of Precision Castparts. [...]

Orders for the year’s fourth-largest transaction hit $34bn, climbing rapidly as banks closed their books, one person familiar with the situation added. [...]

Nebraska Peace Foundation calls for report on risks Berkshire Hathaway faces from climate change (Omaha World-Herald)

The Nebraska Peace Foundation is asking Berkshire Hathaway Inc. to issue a report describing the risks it faces from climate change and the “initiatives and goals relating to each risk issue identified.” [...]

In the letter and proxy draft, Buffett said it is “highly likely” that climate change “poses a major problem for the planet.” [...]

But although climate change may cause disasters, Buffett said, Berkshire’s property insurance operations do not risk significant losses from such disasters.

That’s because the companies would adjust their premiums and exposure to claims if climate change begins to cause more property damage, which hasn’t happened yet, he said. [...]

Comments on Mistakes and Buffett’s Original Berkshire Hathaway Purchase (ValueWalk)

I noticed a passage in last year's letter that is relevant to the topic—Buffett himself was attracted to buybacks on a dying business—Berkshire Hathaway in the early 1960's. Berkshire was a Ben Graham cigar butt—it was trading at around $7 and had net working capital of $10, and book value of $20. Berkshire was a classic “net net”—a stock trading for less than the value of its cash, receivables, and inventory less all liabilities. Buffett liked the fact that Berkshire was a) trading at a cheap price relative to liquidation value, and b) using proceeds from the sale of plants to buy back shares—effectively liquidating the company through share repurchases. [...]

Why Berkshire Hathaway Is Expected to Outperform SPY in 1Q16 (Market Realist)

7 parts, focusing on the different areas of Berkshire Hathaway (BNSF, Energy, Manufacturing, etc.)

Berkshire’s holdings have been performing on the back of insurance, financials, and manufacturing. Chairman and CEO Warren Buffett is deploying cash for buying stocks at attractive valuations. Berkshire’s recent investments include Precision Castparts (PCP) and Kinder Morgan (KMI). [...]

3 Big Competitive Advantages of Berkshire Hathaway (Fool)

Berkshire Hathaway is a unique business. It's primarily an insurance company, but it also sells furniture, energy, homes, underwear, and private jets. And the company has amassed a stock portfolio that would make most long-term investors jealous. One of Warren Buffett's biggest criteria when deciding what to buy is identifiable competitive advantages -- of which Berkshire has quite a few of its own. [...]