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 - 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 - 7/15/17

With Bank of America's dividend hike, Warren Buffett gets his chance at a $11 billion windfall

[...] Berkshire has warrants to buy 700 million common shares of Bank of America at $7.14 each, or about $5 billion. And Bank of America just did what Berkshire was waiting for: after passing the second of two annual stress tests by the Federal Reserve, it got the go-ahead to hike its annual dividend to 48 cents a share, or 12 cents a quarter, a 60 percent increase.

That is enough for Berkshire to consider exercising those warrants rather than waiting until just before their expiration in 2021. At Bank of America's current share price, the stake would hand Berkshire a tidy $11.7 billion profit, at least on paper. [...]

Berkshire Hathaway makes deal to win PUC approval of Oncor acquisition

Berkshire Hathaway has tentatively agreed with regulators and customer advocates to wall off Dallas-based utility Oncor from risks and debts of its parent company, a step that could help the conglomerate win approval for the $9 billion deal to acquire the largest utility in Texas and Oncor's bankrupt parent.

The move is aimed at protecting ratepayers from incurring costs not related to the distribution of electricity and ensuring that Oncor has the resources to maintain its transmission lines and the reliability of the system. Such concerns led the state Public Utility Commission to reject two earlier bids to buy Oncor and its parent, Energy Future Holdings, out of bankruptcy.

Late Thursday, Berkshire Hathaway Energy, a subsidiary of billionaire investor Warren Buffett's Berkshire Hathaway, said it would pay $9 billion to acquire Energy Future Holdings and Oncor, which provides electricity to 10 million Texans. Oncor owns and operates the grid for most of North Texas. Energy Future Holdings has been in bankruptcy for three years as it has worked to restructure its $40 billion debt.

Berkshire said it values Oncor at $11.25 billion. Another group may bid for Oncor, Bloomberg News reported Friday, citing unnamed sources. [...]

Berkshire Hathaway's Clayton Buys Oakwood Homes

Clayton Properties Group buys Oakwood Homes in a deal that closed Monday, July 3.

Oakwood is Clayton's 4th acquisition of a site-build home building operator, and the largest by far, of the deals, as well as the first one outside the Southeast region. [...]

Oakwood owns 3,000 to 4,000 lots, but has control of 18,000, which allows for continued accelerated growth with the capital access the Clayton deal will provide.

In Oakwood, and with Pat Hamill and his team continuing to run and grow the company, Clayton sees a strong cultural fit as well as a company that can help it on its strategic mission to expand its buyer universe with a price-range sweet spot between its $150,000 top price for its manufactured homes, and prevailing entry-level single-family price points, which tend to exceed $225,000. [...]

Clayton Buys Birmingham's Harris Doyle Homes

Clayton Properties Group will announce today the purchase of home building operator, Birmingham, Ala.-based Harris Doyle Homes.

The Clayton acquisition is the fifth site-build company added to the nation's largest manufactured home builder, whose market share is 50% of the category, which accounts for seven in 10 homes priced below $150,000.

Clayton's Harris Doyle announcement follows last week's closing of a deal to purchase Oakwood Homes, the Colorado-Utah home builder known as one of the most technologically progressed large enterprises. [...]

Sprint executives have engaged Warren Buffett about investment

Sprint Corp. Chairman Masayoshi Son has engaged Warren Buffett and cable mogul John Malone in discussions about participating in a deal with the wireless company, people familiar with the situation say.

The Japanese billionaire met separately with the Berkshire Hathaway Inc. boss and Mr. Malone, whose Liberty Broadband Corp. is one of Charter Communications Inc.'s biggest investors, this week at an annual gathering of CEOs in Sun Valley, Idaho, the people said.

The contours of the deal the parties are discussing are unclear. The talks are at an early stage and may not result in an agreement, the people said, but one possibility would see Berkshire put more than $10 billion into a transaction. [...]

Warren Buffett casts big shadow in banking world

Warren Buffett’s Berkshire Hathaway is now the largest single shareholder of Bank of America — but that’s not the only piece of Wall Street he owns.

Buffett, 86, is also the biggest shareholder of Wells Fargo, with a little under 10 percent of the San Francisco bank, and US Bancorp, a Minneapolis bank that’s among the largest in the country.

In addition to those holdings, he’s also the seventh biggest owner of Goldman Sachs and Bank of New York Mellon — and the eighth largest shareholder of M&T Bank, a Buffalo bank with $16.5 billion in assets. [...]

Berkshire News Briefs - 8/21/15

This was 13F week, where Berkshire Hathaway submits its portfolio changes to the SEC each quarter. As always, you can find updated holdings and activity details at Dataroma.

Berkshire Hathaway hints at new purchase, ups Charter stake (Reuters)

Warren Buffett's Berkshire Hathaway Inc on Friday said it boosted its stake in cable TV operator Charter Communications Corp, and signaled it may have another large investment planned after agreeing to buy Precision Castparts Corp in its largest-ever purchase. [...]

Berkshire kept some details about its holdings confidential. The SEC sometimes lets the Omaha, Nebraska-based company delay disclosures of new stakes so Buffett can build them quietly, rather than have investors piggyback on him before he finishes. [...]

Berkshire reported lower stakes in conglomerate Chicago Bridge & Iron Co, media company Viacom Inc and Wabco Holdings Inc, which sells braking and suspension systems for commercial vehicles.

Warren Buffett’s Berkshire Hathaway Sells Off Shares in Phillips 66, National Oilwell Varco (WSJ Moneybeat)

Warren Buffett’s Berkshire Hathaway Inc. sold off its shares in Phillips 66 and National Oilwell Varco Inc. in the second quarter, as it continued to cut its positions in energy companies amid a global supply glut that has sent crude prices into a tail spin.

Berkshire had already sold most of its stake in National Oilwell Varco in the first quarter, when it slightly raised its Phillips 66 holdings. [...]

Berkshire’s only new stake in the quarter was a 20 million share investment in auto-paint maker Axalta Coating Systems Ltd., which Berkshire bought from Carlyle Group LP for $28 a share.

Buffett’s Precision Castparts Deal Will Boost Berkshire Hathaway’s Value (Barron's)

Precision Castparts, a once fast-growing supplier to the airline industry, looks to be a good—not great—deal for Berkshire. Its profits have been pressured due to the company’s exposure to the energy industry. The shares were down 20% year to date before the Berkshire announcement, although the company has been a huge winner under CEO Mark Donegan. [...]

Berkshire is paying $235 a share, or about 19 times Precision’s earnings for the fiscal year ending March 2016. That implies an earnings “yield” of 5.5%, well above the near-zero yield Berkshire has been earning on its cash, which totaled $60 billion on June 30. Berkshire’s return could be closer to 7% initially because it will issue about $10 billion of low-cost debt to finance the deal.

After hacking scheme, it's time to rethink how companies use wire services (PR Week)

Business Wire sent an e-mail to its clients with a letter from CEO Cathy Baron Tamraz. It began, "We understand your concerns surrounding this week’s federal indictment of a global hacking…We would like to take this opportunity to provide you with the story behind the headlines."

The letter explained that government investigators asked Business Wire about fewer than 85 releases, and pointed out that no examples listed in the indictments and the SEC complaint were Business Wire releases.

"Despite our extreme vigilance, today's reality is that no one today is immune from hacking," it continued. "We want to reassure you that Business Wire’s systems are safe and secure. We continue to work closely with a leading cybersecurity firm to ensure that they remain so."

Warren Buffett's Berkshire Hathaway gets special ASX treatment in IAG deal (Sydney Morning Herald)

The Australian Securities Exchange has granted billionaire Warren Buffett's Berkshire Hathaway poll position in any future capital raisings by Insurance Australia Group, which has raised the hackles of some investors, and proxy adviser group Ownership Matters.

IAG, which has one of the biggest shareholder bases of companies listed on the local exchange, was granted a waiver that would permit Berkshire anti-dilution rights for its shares in the insurer.

The initial deal between IAG and Berkshire, which saw the insurance giant sign away 20 per cent of its business to the US group, was announced in June but not many investors were aware of the waiver. [...]

Sure, but what does that mean in layman's terms?

The hidden catch to Berkshire Hathaway’s Insurance Australia Group Ltd investment (Fool Australia)

If IAG were to issue say, one new share for every thirty held, this would normally dilute NICO who currently holds one share in every twenty (5%) on issue. However, as it has this anti-dilution protection, NICO will be entitled to buy one share for every twenty it holds.

If NICO happened to hold 10%, it would be entitled to 10% of the new shares to be issued.

Buffett-Backed Kraft Heinz Cuts 2,500 Jobs as Hees Targets Costs (Bloomberg)

Kraft Heinz Co., the food company that counts Warren Buffett’s Berkshire Hathaway Inc. as its largest shareholder, is eliminating about 2,500 jobs in the U.S. and Canada under the new management. [...]

Kraft Foods and H.J. Heinz merged in July in a deal orchestrated by Buffett and 3G Capital, which jointly controlled the ketchup company. 3G’s Bernardo Hees, who is now running the combined foodmaker, cut more than 7,000 jobs in 20 months after taking over at Heinz. Berkshire Vice Chairman Charles Munger has endorsed the job cuts, saying such measures are essential to a productive capitalist system.

The alternative to reducing staff is “what happened in Russia,” Munger said at Buffett’s annual meeting in May. “The whole damn economy didn’t work.”

How Much Is Warren Buffett’s $5 Billion Investment in Bank of America Worth Today? (Fool)

At the low point of Bank of America's post-financial crisis struggles, Warren Buffett became its biggest advocate by investing $5 billion of Berkshire Hathaway's money into the nation's second biggest bank by assets. [...]

When you include the $5 billion in preferred stock, Berkshire Hathaway's investment in Bank of America is worth a total of $12.2 billion. That equates to a 144% gain in four years -- 168% if you also account for the roughly $1.2 billion in cumulative dividend payments on its preferred stock.

How rich Warren Buffett was at your age (Business Insider)

By age 43, Buffett's personal net worth was at a high of $34 million. He used some of this capital the year prior to purchase See's Candies for $25 million, reports The Motley Fool, and it became an investment that's still profitable in 2015. But, the mid-1970s proved to be a rough period for Berkshire. By 1974, its decreasing share price lowered Buffett's net worth to $19 million when he reached 44, reports Dividend.

Never one to let his savvy investment skills fall by the wayside, Buffett was able to recover financially. By the end of the decade, he had increased his net worth to $67 million at age 47. By the close of the 1970s, the median U.S. household income was $16,530.

Berkshire News Briefs - 3/27/15

Buffett's HJ Heinz to merge with Kraft Foods (CNBC)

Kraft Foods Group stock surged Wednesday after the company announced a merger deal with H.J. Heinz financed in part by Warren Buffett. Buffett told CNBC that his Berkshire Hathaway company will have $9.5 billion worth of common stock in the newly merged H.J. Heinz-Kraft Foods company. It will be headed by Heinz Chief Executive Bernardo Hees. [...] Under the terms of the deal, Heinz will return to the public market with a 51 percent ownership of Kraft. Current holders of Kraft stock will own 49 percent of the company.

We'll have $9.5B in new Kraft-Heinz: Buffet (CNBC)

The deal to create the third-largest food and beverage company in the North America—announced hours before Buffett's interview on CNBC's "Squawk Box"—was in the works for about four weeks, the billionaire investor said. "It moved along quite promptly," he said, but stressed he's in it for the long haul. [...] "The short term doesn't make much difference to us, because we will be in this stock forever," Buffett said. "This is a business with us. It's not really a stock. It's a company that we'll own 26 and a fraction percent of."

3G Capital: Warren Buffett's Favorite Partner in Deals Worth Billions (NY Times)

Warren E. Buffett has made a habit of criticizing ruthless Wall Street bankers and rapacious private equity firms over the years. As recently as last month, he railed against both in his annual letter to his shareholders at Berkshire Hathaway. Yet for Mr. Buffett, a genteel billionaire who has managed to put a friendly face on big business, one private equity firm stands apart from the rest. 3G Capital, the Brazilian private equity firm co­founded by the billionaire financier Jorge Paulo Lemann, has in recent years emerged as Mr. Buffett’s preferred business partner in striking multibillion­dollar deals.

Buffett’s ‘German scout’ on the hunt (Omaha World Herald)

Zypora Kupferberg started her own investment business after leaving a larger company because she wanted to be “closer to the customer.” Now the 48-year-old is “Warren Buffett’s German scout,” scanning the European business landscape for businesses Buffett would buy [...] “She knows what we are looking for and we hope we will hear more from her,” Buffett told Handelsblatt.

How Warren Buffett Wins From Bank of America's Capital Plan (Fool)

Warren Buffett has a sizable stake in Bank of America, even if it's hidden from plain view. Berkshire Hathaway owns warrants that entitle it to purchase 700 million Bank of America shares for $7.14 each at any time before 2021. [...] By holding the warrants, Buffett is reducing his downside risk. If he exercised the warrants, Berkshire Hathaway would have $5 billion in additional capital at risk in Bank of America in exchange for only $140 million in incremental dividend income each year. Exercising the warrants gives Berkshire very little upside for a tremendous amount of additional downside.

Nebraska Furniture Mart begins stocking shelves for customers (Dallas Business Journal)

After promises that shelves would begin to be stocked at Nebraska Furniture Mart's new North Texas store in The Colony, work began Wednesday on filling the 560,000-square-foot retail showroom with appliances, furniture and electronics. The retail showroom will anchor the $1.5 billion, 433-acre Grandscape development and is part of the larger 1.9 million-square-foot Nebraska Furniture Mart, which includes a distribution center.

Justin Brands Inc. to close distribution facility, give 68 workers the boot (Dallas Business Journal)

Berkshire Hathaway-owned Justin Brands Inc. will lay off 68 employees and close an entire distribution facility in Forth Worth. [...] However, it may not be the end of the road for the affected workers. Justin Brands plans to turn over its distribution operations to logistics company GENCO, and the employees will have a chance to apply for jobs there. "Justin is just getting out of the distribution business because it's not our core competency," Lisa Albert, Justin Brands' senior communications manager, told the Dallas Business Journal.

Are Oil Refiners Putting Profits Over Safety in Lawsuit Against Buffett's BNSF Railways? (Fool)

(Commentary on this lawsuit, which was originally mentioned in the 3/16 News Briefs post.)

The reality is, this is about both profits and safety, and it looks like both the railways and petrochemical companies are trying to establish the balance of responsibility. And while BNSF's parent stands to benefit from the surcharge and the potential for more updated tanker cars being bought by refiners, that doesn't mean it's not still beneficial to public safety. At the same time, AFPM has an obligation to its members to challenge this surcharge if it feels it is illegal or unfair, and frankly, whether their motivation is the regulatory precedent, or purely the bottom line, really doesn't matter.

North American Railroads Caught by Speed of Crude-Oil Collapse (Bloomberg)

BNSF Railway Co., the railroad owned by Warren Buffett’s Berkshire Hathaway Inc., posted a 4.5 percent drop in petroleum products in the last four weeks after a gain of 12.4 percent last year. BNSF’s network runs through North Dakota, making it the largest hauler of Bakken oil production. [...] Demand for Bakken crude from U.S. East Coast refineries may decline as the price premium for imported Brent crude narrows. It costs about $2 to $3 a barrel to ship Brent by boat while hauling Bakken crude by train adds as much as $14 a barrel [...]

Is This Warren Buffett's Next Cinderella Story? (Fool)

(Commentary on the acquisition of Van Tuyl Automotive. Terrible headline.)

Operating dealers at scale -- in big groups -- has long been a way for local entrepreneurs to turn modest income streams into fortunes. Bigger dealer groups can get more operating efficiencies around everything from financing to employee benefits, lowering costs and helping to boost those thin margins. Buffett clearly sees this business as one where Berkshire's scale and entrepreneurial values can bring more of those kinds of efficiencies. He also sees it as a business likely to endure for many decades.

First trailer rolls out of new manufacturing plant (PE)

With the sounds of drilling, hammering and sawing in the background, the first trailer has rolled out of Forest River’s new Hemet manufacturing plant. [...] Forest River has hired 80 employes, with hopes to more than double that. [...] Forest River Inc., a Berkshire Hathaway company, bought the Hemet plant in December to open its 67th assembly plant in the nation. [...] Miller said Forest River spent more than $1 million to retrofit the two buildings on the 18-acre site [...]

Should I bet it all on Buffett? (CNN Money)

(Beware the auto-playing video)

I don't think it's a good idea to invest too much of your retirement savings into Berkshire. As a rule, it's not wise to concentrate more than 10% or so of your stock holdings in the shares of any single company. Assuming you have an otherwise well-diversified portfolio, I suppose you could make a case for pushing that percentage to 20% or so for a unique company like Berkshire Hathaway. But I wouldn't go beyond that.

Warren Buffett’s most common misunderstood pieces of advice (Omaha World Herald)

With a net worth of about $71 billion, Berkshire Hathaway Chairman and CEO Warren Buffett is undeniably the most successful investor in history. People often ask him for advice, and he is never short of blunt and witty tidbits. But with all of these pieces of investment advice floating around, many of them without additional context, it can be easy for someone to misconstrue his words. So before you rush out and start taking the Oracle of Omaha’s comments to heart, here is a list of his most common misunderstood pieces of advice.

Nutritionists warn diners to be wary of Warren Buffett's 'junk-food' portfolio (Reuters)

Following Warren Buffett's investment advice may be smart but nutritionists say that eating too many of the "junk-food" products made by companies he has invested in isn't quite as wise. His move on Wednesday to inject Velveeta cheese, Jell-O, Lunchables, Oscar Mayer wieners, and Kool-Aid into his portfolio, stuffs an already amply supplied larder. [...] He told Fortune magazine last month that he's talked to the management of Utz, the Pennsylvania-based snack maker, about potentially buying the company. And with Kraft now under his belt, Buffett could decide to literally drink his own Kool-Aid and push ahead with more such acquisitions.

Airbnb contest: Stay at Warren Buffett's childhood home during Berkshire Hathaway meeting (San Jose Mercury News)

Some fortunate Berkshire Hathaway investors at this year's annual meeting will get the chance to sleep in the same bedroom Warren Buffett did as a boy. The home-sharing service Airbnb is offering a free three-night stay at the Omaha home around the May 2 meeting as a way to promote its services. Shareholders who want to stay at the three-bedroom house must submit short essays and prove they own Berkshire stock.

Berkshire News Briefs - 3/25/14

Buffett's Berkshire gets its first TV station (CNBC)

For the first time, Warren Buffett's Berkshire Hathaway will directly own a television station. Under terms of an agreement in principle announced Wednesday, Berkshire will get ABC-affiliate WPLG in Miami from Graham Holdings. Graham holds the assets that remained after the Washington Post Co. sold its namesake newspaper to Amazon chief Jeff Bezos for $250 million last August. In the new deal, Graham would swap the station, some Berkshire shares it owns and some cash in exchange for roughly 1.6 million Graham shares now held by Berkshire. [...] The trade would leave Berkshire with just about 100,000 shares.

Media General to buy LIN in US$2.6b broadcast deal (NewsAsia)

US broadcaster Media General said on Friday it will buy LIN Media in a US$2.6 billion deal that creates the nation's second-largest television broadcasting company and a digital media powerhouse. The merged company will own and operate or service 74 television stations across 46 markets, and serve some 26.5 million households, or 23 percent of the US market, Media General said in a statement. [...] Media General, partly owned by tycoon Warren Buffett's Berkshire Hathaway, will form a new holding company that will be named Media General.

Warren Buffett's Warrants Shine in Media General Deal (The Street)

As Media General works to merge with LIN Media, forming the nation's second largest pure-play TV broadcasting company, Berkshire Hathaway continues to make money off of a newspaper deal it cut with Media General in 2012. In May 2012, Berkshire Hathaway bought 63 newspapers from Media General for $142 million in cash and agreed to provide the nationwide TV broadcaster with a $400 million term loan and a $45 million revolving credit line, as the company worked to repair its balance sheet. As part of the newspaper purchase and its loan to Media General, Berkshire also received penny warrants for approximately 4.6 million of Media General's Class A shares, about 20% of its outstanding stock at the time. Berkshire's loans, which carried an interest rate of 10.5%, and its warrants, quickly paid off.

Buffett’s BNSF Leads Locomotive Surge to Ease Railroad Cargo Jam (Bloomberg)

BNSF Railway Co., owned by Warren Buffett’s Berkshire Hathaway Inc., is leading an effort by U.S. railroads to add hundreds of locomotives to ease a cargo jam spurred by bad weather and surging crude shipments. BNSF increased engines by 250 in the last two months and will have another 125 new ones on the tracks in the next two months, the company said. [...] The congestion started with BNSF before the bad weather because of equipment shortages and increasing cargo, then worsened as the snowstorms swept in, said Jason Seidl, an analyst with Cowen & Co. “A lot of business came their way and they sort of got behind the eight ball,” he said. “Then the weather hit and the rest is history as they say.”

Buffett’s Hathaway Compensation Rises to $485,606 (Claims Journal)

Well, OK, I guess he's earned a small raise.

Warren Buffett’s compensation from Berkshire Hathaway Inc. rose 15 percent last year to $485,606, although the billionaire’s salary remained $100,000. The increase came in “other compensation,” which includes company-paid costs for Buffett’s personal and home security. As usual, Buffett reimbursed Berkshire $50,000 for personal costs such as postage and phone calls.

Will This Company Soon Be Warren Buffett's Biggest Holding? (Fool)

Believe it or not, Bank of America could soon become the single largest holding of Warren Buffett's Berkshire Hathaway. Shocking, I know, but the math is really quite simple. Two and a half years ago, Buffett invested $5 billion in Bank of America. In exchange, Berkshire received a corresponding amount of preferred stock that pays a 6% dividend, and warrants to buy 700 million shares of the bank's common stock at an exercise price of $7.14 per share. The warrants expire in September of 2021. At today's price of roughly $17.90, Berkshire has already more than doubled its initial investment -- and that excludes the preferred stake. The common-stock position has been so lucrative, in fact, that it's become, in effect, Berkshire's fifth largest equity holding.

Berkshire Hathaway HomeServices Named ‘Real Estate Agency Brand of the Year’ in 2014 Harris Poll (Business Wire)

Berkshire Hathaway HomeServices, the new real estate brokerage network operated by HSF Affiliates LLC, today announced it was named “Real Estate Agency Brand of the Year” in the 26th annual Harris Poll EquiTrend study. Berkshire Hathaway HomeServices received the highest ranking in the Real Estate Agency category based on consumers’ perception of its brand familiarity, quality and purchasing consideration, among other qualifying elements. The study was based on opinions of more than 40,000 U.S. consumers surveyed online earlier this year.

Buffett Wins NCAA Billion-Dollar Hoops Bet as Brackets Go Bust (Bloomberg)

It took less than two full days of play for Warren Buffett to win his bet that no entrant in a Quicken Loans Inc. contest would predict the winner of each game in the three-week-long National Collegiate Athletic Association men’s basketball tournament. [...] Two upsets -- Dayton’s defeat of Ohio State two days ago, and Mercer’s win yesterday against Duke -- wiped out 99 percent of the entries. When Memphis defeated George Washington last night, the last of the perfect brackets was busted.

In preparing the news briefs post, I found this interesting two-part story on Seeking Alpha about the corporate structure of Berkshire Hathaway. I thought it was more nuts-and-bolts and not general interest news, so I dropped it down to the bottom; if you don't care how the sausage is made, you're welcome to skip over this post.

On The Structure Of Berkshire Hathaway, Part 1 (Seeking Alpha)

Berkshire Hathaway is a unique company. You have a property-casualty insurance giant owning many businesses directly through insurance subsidiaries, including huge businesses like a Class 1 Railroad - BNSF. Yes, National Indemnity owns BNSF in entire, and many other businesses as well. I thought the pre-crisis organization chart of AIG was complex - because of the many industries that it covers, BRK is far more complex.

On The Structure Of Berkshire Hathaway, Part 2: The Harney Investment Trust (Seeking Alpha)

In Omaha, there is Farnam Street. Among value investors, it is well-known, because the small main office of Berkshire Hathaway is located there. Less well known is Harney Street, but from an insurance standpoint it is important, because Berkshire Hathaway's largest insurance subsidiary, National Indemnity, is located there. One of the major assets of National Indemnity is the Harney Investment Trust, of which National Indemnity is the sole beneficiary. [...] Now, if you read through BRK's filings to the SEC, you won't find many mentions of the Harney Investment Trust. You have to read the insurance regulatory documents to find it, and even if you do that, you will still be puzzled.

Berkshire News Briefs - 2/28/14

Berkshire Seen Reporting Record Profit as U.S. Rebounds (Bloomberg) http://www.bloomberg.com/news/2014-02-27/berkshire-seen-repo...

If you're reading this after Saturday, note that this was a pre-earnings prediction...

Berkshire Hathaway Inc. will probably post record full-year profit showing how Chairman Warren Buffett’s five decades of acquisitions positioned his company to benefit from a rebounding U.S. economy. Net income was at least $18 billion in 2013, according to analysts at Nomura Holdings Inc. and Keefe Bruyette & Woods. That compares with $14.8 billion in 2012, the previous record. Omaha, Nebraska-based Berkshire said it will release its annual report March 1 at about 8 a.m. New York time.

Warren Buffett Just Bought Another Million Shares of This Company (Fool)

Twelve months ago, Berkshire held zero shares of Exxonmobil. Phillips 66 and ConocoPhillips -- at about $1.4 billion each -- were Berkshire's largest energy holdings. After last year's spending spree, ExxonMobil now stands as Berkshires sixth-largest stock position, in a statistical tie with long-held Procter and Gamble as 4% of Berkshire's stock portfolio. During the same period, Buffett largely sold out of ConocoPhillips, with Berkshire now holding 11 million shares versus more than 80 million held in 2008. Most of the remaining stake in Phillips 66 -- largely received when the company was spun out of ConocoPhillips in 2012 -- will also disappear from Berkshire's portfolio this year, when they're traded back to Phillips 66 in exchange for the company's flow enhancer business.

BNSF to move into tank car ownership with safer oil fleet (Reuters)

BNSF Railway Co plans to move into tank car ownership and buy its own fleet of up to 5,000 new crude oil tank cars with safety features that exceed the latest industry standards, the unit of investor Warren Buffett's Berkshire Hathaway Inc. said on Thursday. The unusual step by one of the largest U.S. railroads aims to reduce the risks of moving crude by rail after several recent accidents, including one involving a BNSF train in North Dakota in December.

Berkshire Investors Lacking Data Take Buffett on Faith (Bloomberg)

For years, chemical maker Lubrizol filed annual reports with securities regulators that ran 80 pages or more, detailing everything from its inventory to pension obligations. Today, investors would have to do math to figure out the company’s earnings in public filings. The difference is that Warren Buffett’s Berkshire Hathaway Inc. bought Lubrizol in 2011 for about $9 billion and now lumps together the results with those of several other manufacturing businesses. [...] The disclosure is “sufficient for his shareholder base at the moment,” said Jeff Matthews, a Berkshire investor and author of books about the company. “Once he’s gone, people are going to say, ‘What’s here? What do I really own?’”

Business Wire Halts Direct Feeds to High-Speed Traders (Bloomberg)

Business Wire, the distributor of press releases owned by Warren Buffett’s Berkshire Hathaway Inc., will stop letting high-speed trading firms purchase direct access to its service. After consulting with Buffett, a billionaire known for holding onto investments for decades, Business Wire decided to avoid the reputational hit from an association with high-frequency traders, who often enter and exit positions in less than a second.

Buffett Toy Bet Expands to Dentists With SmileMakers Deal (Bloomberg)

Warren Buffett’s Berkshire Hathaway Inc. agreed to buy SmileMakers from Staples Inc., adding a provider of toys to dentists, doctors and teachers. SmileMakers will be acquired by Omaha, Nebraska-based Berkshire’s Oriental Trading Co. unit, which sells party and craft supplies, the business said today in a statement. [...] Taylor said Spartanburg, South Carolina-based SmileMakers will offer products from Oriental Trading. The target firm is credited with creating the “treasure box” concept to reward children for enduring dental procedures, according to the statement, which didn’t disclose terms. Oriental Trading said the deal is expected to be completed by the middle of April.

Oriental Trading's offer for SmileMakers wins out in the end (Omaha World-Herald)

Same story, interesting take (as always) from the Omaha World-Herald...

When Staples Inc. put SmileMakers up for sale last October, Oriental Trading CEO Sam Taylor told The World-Herald, he put together a presentation, including a price range, for Oriental Trading Chairwoman Tracy Britt Cool to discuss with Buffett, CEO of Berkshire, Oriental Trading’s parent company. Buffett quickly OK’d a price toward the low end of the range, and Taylor made the offer, which has not been disclosed. The investment banker who was brokering the deal soon called to say that several private equity funds had bid significantly higher. Taylor’s group was out of the deal even before he got to meet SmileMakers’ managers. [...] But a few days after Thanksgiving, the banker called again. Seems some of the private equity investors had dropped out and the others had lowered their bids to Berkshire’s level or below. Was Oriental Trading still interested? “Absolutely,” Taylor told him, at the original Buffett-approved price.

Shaw departing area rug business (Home Accents Today)

Shaw Industries is exiting the area rug business, the company announced in early January. In conjunction with the announcement, the Dalton, Ga.-based company, which is wholly owned by Berkshire Hathaway Inc., revealed plans to convert its Ringgold, Ga., rug facility into a state-of-the-art luxury vinyl tile manufacturing facility. "The economics of the rug business today simply do not allow for future growth or encourage further investment," said Vance Bell, chairman and CEO in a statement. [...] Shaw plans to invest more than $100 million in its new luxury vinyl tile manufacturing facility and when complete, the investment is expected to generate 200 new jobs in the Ringgold area. This investment follows $250 million in other recent expansion announcements by Shaw in carpet tile, hardwood flooring, yarn extrusion, and distribution.

Heinz to close two plants (Just Food)

Heinz has announced plans to close two plants in Europe as the US food giant continues to restructure its business after last year's sale to 3G Capital and Berkshire Hathaway. The ketchup manufacturer has set out proposals to shut a factory in Turnhout in Belgium and a site in Seesen in Germany. [...] The company, which said the closures would lead to the loss of around 350 jobs, would "consolidate manufacturing and eliminate excess capacity".

Pampered Chef restructures, lays off workers (Daily Herald)

Addison [Illinois]-based The Pampered Chef, which sells kitchenware, said Monday it has laid off workers and restructured its office and distribution center. A spokeswoman at the company, owned by Warren Buffett’s Berkshire Hathaway Inc., did not provide layoff numbers or when the restructuring occurred. [...] It is one of the largest branded kitchenware companies and direct sellers of housewares nationwide, according to Omaha, Neb.-based Berkshire Hathaway, which acquired the company in 2002.

BofA Reaches Deal With Buffett on Preferred Stake (Bloomberg)

Bank of America Corp., the lender that turned to Warren Buffett in 2011 for a capital injection, reached a deal with the billionaire’s company to change terms so the investment is treated more favorably by regulators. The amendment would allow the bank to count preferred shares with a $2.9 billion carrying value as Tier 1 capital [...] The amendment would force Bank of America to wait at least five years from its approval to redeem the preferred stock. Under the 2011 deal, the bank was able to redeem the preferred stake at any time as long as it paid a 5 percent premium. Berkshire gets 6 percent annual interest on the securities. Under the revised deal, Buffett agreed to give up a dividend provision that gave him the right to recover missed payments.

RSA’s Hester Taps Buffett, Unveils Share Sale to Rebuild (Bloomberg)

After less than a month on the job, RSA Insurance Group Plc Chief Executive Officer Stephen Hester announced a stock sale and tapped Warren Buffett for reinsurance to help strengthen the insurer after its scandal in Ireland. [...] RSA also bought a 550 million-pound reinsurance policy from Buffett’s Berkshire Hathaway Inc. It’s now “very hard for them to downgrade us,” Hester said on a conference call today. [...] Buffett, 83, and his reinsurance chief Ajit Jain have assumed obligations from other insurers including CNA Financial Corp. and American International Group Inc. seeking to cut risk or narrow their focus. The contracts give Berkshire more funds to invest and make acquisitions.

Allstate Fights Back Against Geico With Esurance and Clever Marketing (The Street)

Allstate has seen customers come and go over the years to rivals like Geico, a unit of Berkshire Hathaway. Geico, known for its clever commercials, is now seeing competition for online customers from its competitor Allstate. [...] Geico has long been known for its catchphrase: "15 minutes could save you 15% or more on car insurance." This motto and an aggressive advertising campaign powered Geico to be one of the leaders in online care insurance. Berkshire Hathaway bought Geico in 1996 and has controlled it ever since. To compete in the same online market, Allstate decided to also go the acquisition route. In 2011, Allstate bought Esurance for $1 billion. The largest publicly traded U.S. home and auto insurer, Allstate is now using Esurance to take on Geico directly.