Berkshire News Briefs - 9/20/17

JPMorgan becomes just seventh bank to cover Buffett's Berkshire Hathaway, calling it a screaming buy

Despite Berkshire being the sixth-largest company in the S&P 500 by market cap, there are just seven analysts covering the company, according to FactSet. This compares to the No. 5 most valuable company in the index, Amazon, which has 41 analyst ratings. Wall Street doesn't really bother to cover Buffett because of Berkshire's low relative trading volumes as Street research often gets paid from trading commissions. [...]

The analyst established a year-end 2018 price target of $210 for Berkshire Hathaway B shares, representing 17 percent upside from Wednesday's close. [...]

The analyst also mentioned Berkshire utility executive Greg Abel is currently the "most likely" successor to replace Warren Buffett as CEO of the company. [...]

Buffett Fails in Bid to Boost Stake in Canada's Home Capital

Warren Buffett’s bid to double his stake in Home Capital Group Inc. was rejected by shareholders of the Canadian mortgage lender in a vote Tuesday.

About 89 percent of investors voted against the offer, which would have boosted Berkshire Hathaway Inc.’s stake to 38 percent from about 20 percent. Stockholders including CIBC Asset Management had objected to the deal, arguing it would dilute the stock by selling shares to Berkshire at an almost 30 percent discount. [...]

Rocky Mountain Power Invests $3.5 Billion for Wyoming Energy

A long-term view of electrical generation -- not politics or fads -- drives Rocky Mountain Power's decision to invest $3.5 billion in transmission capability, wind power and other infrastructure in Wyoming by 2020, company officials said Friday. [...]

The Salt Lake City-based Rocky Mountain Power is a part of the Portland, Ore.-based PacifiCorp, a subsidiary of Berkshire Hathaway. Rocky Mountain Power has nearly 1.1 million customers in Wyoming, Utah and Idaho [...]

Rocky Mountain Power's energy-generating capacity is about 55 percent coal, 25 percent natural gas, 10 percent hydroelectric, and 10 percent wind and other sources [...]

Irma's Impact on Insurers

[...] Because of the limited presence of national primary carriers in the homeowners market in Florida, we think the biggest industry impact of large privately insured losses would probably be in reinsurance. Reinsurers have faced weak pricing in recent years due to an overabundance of capital and the rise of the catastrophe bond market. In our view, major catastrophe losses could be a catalyst for an industry shakeup and a return to more normalized pricing conditions. For disciplined and well-capitalized reinsurers such as Berkshire Hathaway, the positive impact on pricing should provide a material long-term offset to the near-term losses.

Oriental Trading’s MindWare buys Peaceable Kingdom, game maker that aims to 'inspire cooperation and cultivate kindness'

MindWare, a division of Oriental Trading Co. of La Vista, has acquired Peaceable Kingdom, a company that develops cooperative games and related products, for an undisclosed amount.

Peaceable Kingdom, based in Berkeley, California, was founded in 1983 by the family of Clement Hurd, illustrator of the “Good Night Moon” children’s book. [...]

The company makes games with the goal to “inspire cooperation and cultivate kindness,” including Bunny Bedtime, Mole Rats in Space, Friends and Neighbors, You Guessed It, Say the Word and What’s It? [...]

Warren Buffett's son Howard to become Illinois county sheriff

Howard Buffett, son of billionaire investor Warren Buffett, is adding to his job titles that of interim sheriff of Macon County in central Illinois.

Macon County Sheriff Thomas Schneider said Friday that he is retiring early ahead of an election next fall for his replacement. He has chosen Buffett, whose charitable foundation has contributed more than $55 million in the region over the past two decades, to serve in the meantime.

Howard Buffett has been a Macon County undersheriff since September 2014 and has completed more than 3,300 hours of patrol and training. [...]

Billionaire Warren Buffett sings a duet with Stevie Wonder at star-studded Forbes 100th anniversary party

The Berkshire Hathaway CEO joined pop music legend Stevie Wonder for a duet at a star-studded gala honoring Forbes magazine at Manhattan's Chelsea Piers on Tuesday.

Wonder and Buffett sang a duet of the classic hit The Glory of Love, a single written by Billy Hill and first recorded by Benny Goodman in 1936. [...]

Berkshire News Briefs - 8/1/17

Berkshire and Blue Chip Stamps

Rick Guerin, an early partner of Buffett and Munger's, realized Blue Chip shares were quite attractive (at this time, the market cap was approximately $40 million). It is worth noting Blue Chip Stamps was already in decline by the late 1960s. From 1970 to 1980, revenues would decline by more than 85%. [...] Despite the significant drop-off in revenues mentioned above, float only declined by around 30% (cumulatively) from 1970 to 1980. Pabrai estimates the “permanent float” at Blue Chip was somewhere around $60 million.

But the float was of limited value in the wrong hands. Buffett, Guerin and Munger thought it was being mismanaged. One way to effect change was to effectively take control of the company: between 1967 and 1970, they invested $24 million in Blue Chip – good for 60% ownership [...]

Now they had roughly $60 million to work with. In 1972, they took $25 million and bought 99% of See’s Candies. In 1973, they took another $25 million and bought 80% of Wesco Financial. Finally, in 1977, they took another $35.5 million and bought the Buffalo Evening News (with roughly 70% of the purchase price funded with the retained earnings from See’s Candies). [...]

Warren Buffett is building up a 'recession resistant' energy powerhouse

From California to the Midwest, billionaire investor Warren Buffett is steadily building an energy powerhouse.

Buffett’s Berkshire Hathaway Energy subsidiary has gobbled up utilities and natural gas pipelines and tapped into clean energy production, including from Southern California’s abundant geothermal resources. [...]

Berkshire Hathaway appears to be doing all it can to counter a purported death spiral of economic harm that power companies face because of growing energy efficiency regulations, consumers generating their own power with rooftop solar panels and the advent of electricity storage options in homeowners’ garages. [...]

Berkshire Is in Talks to Buy a Stake in IRB Brasil Resseguros

Berkshire Hathaway Inc., the firm run by billionaire investor Warren Buffett, is in talks to buy a stake in Latin America’s biggest reinsurer, IRB Brasil Resseguros SA, after an initial public offering of stock, according to two people with direct knowledge of the matter.

No deal is likely to be completed before July 27, IRB’s IPO pricing date, the people said, asking not to be named because the discussions are private. The acquisition could be made through Berkshire’s General Re unit, they said. JPMorgan Chase & Co. is advising Rio de Janeiro-based IRB, according to the people. [...]

Home Capital repays $2 billion line of credit from Berkshire Hathaway

Home Capital Group, the Toronto-based alternative mortgage lender that was on the verge of collapse earlier this year, says it has repaid a $2-billion line of credit from Berkshire Hathaway.

The company was given the financial lifeline last month by Berkshire Hathaway, which is headed by Warren Buffett, as it was trying to regain investor confidence following a run on deposits from customers.

When it provided the line of credit, Berkshire Hathaway also bought a $400 million stake in Home Capital. [...]

Berkshire’s Clayton Homes division expanding into $250,000-and-under housing market

Berkshire Hathaway’s Clayton Homes division, known for its factory-built houses, is expanding into the site-built, $250,000-and-under housing market.

Since October 2015 Clayton has acquired homebuilders in Atlanta; Nashville, Tennessee; Kansas City; Denver; and, earlier this month, Birmingham, Alabama, and is building homes on-site at a rate of 2,500 to 3,000 a year.

Clayton isn’t choosing cities and then looking for homebuilders to buy [...] the idea is to identify builders with the right management and culture, and then check out their growth potential. The acquired builders keep their managements and names.

Walsh said Berkshire’s financial strength and Clayton’s buying power — imagine the lumber needed for 45,000 factory-built homes each year — are advantages that can give the acquired companies an edge over the competition. [...]

Elliott Tries a Texas Charm Offensive to Outdo Berkshire's Oncor Bid

While Elliott Management Corp. tries to cobble together enough money to beat Berkshire Hathaway Inc.’s $9 billion bid to buy one of America’s largest transmission operators, it has another problem to deal with: the state of Texas.

The New York hedge fund run by billionaire Paul Singer is trying to convince Texas stakeholders that its deal to buy their biggest power distributor, Oncor Electric Delivery Co., will be superior to Berkshire’s. [...]

Duracell to close South Carolina battery plant by end of 2018

Duracell has filed a notice with labor officials that it will close a South Carolina battery plant sooner than projected.

The shutdown of the Lancaster factory was announced one year ago, a few months after the company after being acquired by Warren Buffett’s Berkshire Hathaway conglomerate. [...]

The Lancaster factory manufactures AA batteries. Duracell is consolidating North American production of those to LaGrange, Ga. [...]

Keeping Tabs on the Billions and Billions That Warren Buffett Is Giving Away

In 2006, Warren Buffett famously pledged to give away most of his Berkshire Hathaway stock, saying that the bulk of those holdings would go to the Bill and Melinda Gates Foundation and the rest to the four foundations controlled by his three children.

Since then, Buffett has given away 40 percent of the Berkshire Hathaway shares that he held in 2006, gifts worth about $27 billion. Buffett’s annual gifts to the five foundations, announced this week, were worth a record-breaking $3.17 billion. [...]

[...] while many people are under the impression that all of Buffett’s fortune is earmarked for the Gates Foundation, the gifts to his children’s foundations have turned out to be enormous in their own right—and are bankrolling a wide array of grantmaking both in the United States and abroad. This year, according to Forbes, Buffett sent around $2.4 billion worth of stock to the Gates Foundation. The other $800 million or so went to the family foundations—the Susan Thompson Buffett, Sherwood, Novo, and Howard Buffett foundations. [...]

Also, a story about a different Buffett's charity work:

Howard Buffett's millions help jump-start Decatur's recovery

[...] Nevertheless, the Howard G. Buffett Foundation has given or pledged $55.1 million in the city and surrounding Macon County over the past two decades to help stanch the area's hemorrhaging population. Dozens of grants, including those paying for a new lakefront amphitheater and a law enforcement training facility, aim to help make the area a better place to live.

"The bottom line is, what can you do to make a community more attractive to younger people, and how do you make it attractive so the people that are here stay here?" Buffett said. "A lot of our contributions, if you cut down to the bottom of it, that's what they do." [...]

Berkshire Misc. Briefs - 1/5/17

There was a lot of news last month, and I fell behind on posting, so there are three posts this time. This is part 3, with miscellaneous news that didn't fit in the other two categories. That doesn't mean these are any less interesting, though!

(Part 1 - General Business | Part 2 - Subsidiaries)

HBO Sets Warren Buffett Documentary Premiere Date

HBO announced the premiere date for upcoming documentary “Becoming Warren Buffett” on Wednesday. The personal profile will premiere on Jan. 30 at 10 p.m./9c and will tell the true story of how an ambitious, numbers-obsessed boy from Nebraska became one of the richest men in the world.

Told primarily in Buffett’s own words, the film features never-before-released home videos, family photographs, archival footage and interviews with family and friends. [...]

Watch the trailer on YouTube.

Why Yahoo Shared an Investor Meeting in Omaha With the World

In April 2016, for the first time Yahoo Finance livestreamed the Berkshire Hathaway annual meeting; a profitable venture for the industry-leading site (Yahoo Finance in November recorded 63 million monthly unique visitors, per comScore). This livestream was Yahoo Finance's longest, most complex endeavor to date, given it hosted the event on its platform. [...]

It all started with an email from Berkshire Hathaway CEO Warren Buffett. "It said, 'Call me,'" recalled Yahoo Finance editor Andy Serwer. "So, I called him up. And he said 'I've got this idea. What do you think about livestreaming my annual meeting?' And I said 'yes' as quickly as I could!" [...]

The first-of-its-kind meeting was Buffett's idea. "I asked him later why he came to us," said Serwer. "He said there were several reasons: you successfully executed an NFL game. (The Buffalo Bills-Jacksonville Jaguars matchup in October 2015 netted 15.2 million viewers.) You have the technology to do it. You have the global platform. And, then he also said, 'I have this relationship with you and I know that I can just call you up anytime and get through to you.'"

Berkshire Hathaway to bet on earthquake insurance in Japan

An insurance company under Berkshire Hathaway of the U.S. is considering making a foray into Japan, betting on the potential of the country's earthquake insurance market.

Berkshire Hathaway Specialty Insurance plans to operate as a reinsurer, purchasing earthquake insurance contracts from casualty insurers in Japan, according to Marc Breuil, a BHSI executive in charge of Asia. [...]

After BHSI starts selling earthquake reinsurance in Japan, earthquake policies may become widespread in the country. Currently, about 10% of Japanese companies are insured against temblors. This is stunted compared to the rate in other earthquake-prone countries.

One major reason for the low percentage is the relatively high premiums for earthquake insurance when compared to fire insurance. Another reason is that insurers have refrained from actively selling earthquake policies to companies, citing unstable prices in the reinsurance market.

Buffett's Berkshire Is Urged to Sell Fossil Fuel Stocks

A Nebraska nonprofit has said it will propose that Warren Buffett's Berkshire Hathaway Inc. sell its investments in oil refiner Phillips 66 and other companies involved in fossil fuels over 12 years.

The Nebraska Peace Foundation, which focuses on anti-war, civil rights and environmental issues, said it submitted a formal proposal for Berkshire shareholders to consider at the Omaha-based conglomerate's annual meeting next May 6.

Buffett’s Son Steps Down From Coke Board to Focus on Charity

Howard Buffett, the son of Berkshire Hathaway Inc. Chairman Warren Buffett, is stepping down from the board of Coca-Cola Co. to spend more time working at his foundation. [...] He runs the Howard G. Buffett Foundation, which supports sustainable agriculture and conflict resolution programs. He also has operated a 1,500-acre (600-hectare) farm in Illinois and has written books on topics such as world hunger and conservation.

Warren Buffett makes appearance at Dolphins-Cardinals game

The Miami Dolphins have a special guest for Sunday’s game against the Arizona Cardinals. Business tycoon Warren Buffett roamed the Dolphins’ sideline pregame to talk to members of the organization and show his support.

Buffett, who is one of the richest people in the world, has attended Dolphins games in the past. He was at last year’s home opener and is friends with four-time Pro Bowl defensive tackle Ndamukong Suh. [...]

Berkshire News Briefs - 4/25/16

Watch the Berkshire Hathaway Annual Meeting live stream on Yahoo on Saturday, April 30, at 10am Eastern.

Warren Buffett:: 'There’s a little bit of PT Barnum in me' (Yahoo)

Berkshire Hathaway’s annual shareholder meeting gets underway on April 30, and those heading to the big event can expect anything other than a boring analyst convention.

A newspaper-tossing challenge, a 5K fun run and walk, a cookout, and a steak dinner are just some of the events scheduled for Berkshire Hathaway's annual shareholder meeting. “There’s a little bit of P.T. Barnum in me,” billionaire investor Warren Buffett told Yahoo Finance editor-in-chief Andy Serwer. [...]

Meet Precision Castparts' Worried Neighbors (OPB)

State environmental regulators still haven’t identified where the arsenic is coming from, but they do know the source of the nickel: it’s a large metal foundry owned by Precision Castparts, Oregon’s second-largest company and, according to at least one study, one of the country’s top air polluters.

The foundry, which the company calls the PCC Structurals Large Parts Campus, also emits chromium and cadmium. [...]

MidAmerican's $3.6 billion wind investment is 'giant step' toward company's 100 percent renewable energy goal (Omaha World Herald)

Iowa will be further ahead of other states in renewable energy when MidAmerican Energy installs $3.6 billion more in tax-supported wind turbines over the next 2½ years. [...]

By 2020, he said, MidAmerican’s turbines will generate 85 percent of the electricity used by its customers, up from 58 percent when current projects are completed, and 40 percent of electricity used by all Iowans, up from 31 percent today. [...]

3 Wall Street pros reveal why it's so hard to cover Berkshire Hathaway (Yahoo)

“The key risk is — in my view — the fact that relatively few of its investors have a good understanding of what Berkshire actually does...the reporting is very sparse, and while it's probably ludicrous to question Warren Buffett's investing acumen, I think investors are much more likely to assume the best when there are questions of, say, earnings quality. To me, that widespread positive sentiment implies a greater risk that surprises (perhaps following the inevitable senior management succession) will be negative rather than positive, because the positives have already been assumed.” [...]

Warren Buffett’s Risky Final Bet (Harvard Business Review)

For many years, investors have speculated on what will happen to Berkshire when Buffett dies – but they tend to focus on who will succeed him as CEO, and what will happen to the stock price. Buffett insists the company has a solid succession plan in place; at last year’s annual shareholder meeting, he announced that after his death, his son, Howard Buffett, will become the unpaid non-Executive Chair of the Board to ensure the continuation of Berkshire’s unique culture.

Will Howard Buffett be able to fulfill the role of the values champion who defends his father’s legacy in the face of challenges to Berkshire’s strategy and values? We suspect not – not because of any shortcomings, but because he will not have the shares to back him up.

Here the experience of Hewlett-Packard (HP) offers a cautionary tale. [...]

Berkshire Hathaway's Big Profit Center Prepares for Shrinkage (Fool)

A shift in the top ranks at Berkshire Hathaway is a hint that its reinsurance businesses, historically one of its stars, is slated to shrink. The company recently announced the retirement of Tad Montross, who has led Berkshire's General Re subsidiary since 2008 after sharing the role for seven years prior. Montross's position will be filled with an unnamed executive, who will report to Ajit Jain, the head of Berkshire Hathaway Reinsurance. [...]

Berkshire 101: A quick guide to Warren Buffett's $360 billion empire (Yahoo)

Berkshire Hathaway was a struggling textile company when Warren Buffett first invested in it in 1962.

Today, it's a $360 billion behemoth. In Warren Buffett’s own words, it's a “sprawling conglomerate, constantly trying to sprawl further." [...]

Here's a brief introduction to Berkshire Hathaway. [...]

How Warren Buffett’s Son Would Feed the World (The Atlantic)

Without a doubt, the most ambitious of the Buffett philanthropists is the middle child, Howard, 61, a commercial farmer who lives in Decatur, Illinois. His goal is to end world hunger. [...]

Instead of a green revolution for Africa, Buffett favors what he calls a “brown revolution,” or, to quote the distinguished agricultural ecologist Sir Gordon Conway, a “doubly green revolution”—a focus on environmentally sustainable agriculture that minimizes erosion, preserves and regenerates soil, and makes the land more resilient, while also increasing yields. In contrast to the green revolution, the brown revolution is a tortoise-like approach: Its impact is gradual. Over the past decade, patiently, the Howard G. Buffett Foundation has spent hundreds of millions of dollars to identify and promote practical, low-cost methods of conservation farming—cover crops, no-till farming, locally bred seed varieties—that improve African soil quality and crop yields without chemical fertilizers and costly imported seeds. [...]

Berkshire News Briefs - 11/13/15

Berkshire Hathaway and the Billion-Dollar Acquisition No One Noticed (Fool)

Well, I wouldn't say no one noticed.

Through superior capital allocation and the resulting compounding of intrinsic value, Warren Buffett's conglomerate, Berkshire Hathaway, has become so large that its subsidiaries make billion-dollar acquisitions that go nearly unnoticed. [...]

On September 30, 2015, UTLX acquired approximately 25,000 tank cars from General Electric Company's leasing unit for a total purchase price of approximately $1.0 billion. This transaction and related transactions to be completed in the fourth quarter of 2015 are expected to further enhance the full-service capabilities of UTLX's repair, maintenance and inspection network and contribute to future revenue and earnings growth.

Here's the press release from Marmon, explaining that Union Tank Car (UTLX) and Procor will add the tank cars to their fleet which they lease out.

Kraft Heinz to close 7 North American plants, cut 2,600 jobs (Pittsburgh Post-Gazette)

Kraft Heinz Co. told about 2,600 employees at seven North American plants on Wednesday they wouldn’t have a future with the processed food company on a mission to streamline operations and meet goals set when investors created the bulked-up business earlier this year.

The cuts mark the second round of job trimming since the company was formed this summer in the merger of Pittsburgh’s H.J. Heinz Co. and Northfield, Ill.-based Kraft Foods Group. [...]

A plant in Pennsylvania’s Lehigh Valley that employs 400 people making A1 sauce, Grey Poupon mustard and single-serve coffee is among those slated to close in the next 12 to 24 months.

It and five other plants being closed had been part of Kraft. Those are in Fullerton, Calif.; San Leandro, Calif.; Federalsburg, Md.; Campbell, N.Y.; and Madison, Wis. The other plant being shuttered, in St. Marys, Ontario, Canada, was a Heinz plant. [...] In addition, Kraft Heinz will move its Oscar Mayer and U.S. meats business from Madison, Wis., to Chicago, taking about 250 jobs along.

Warren Buffett's Ice Cream Chain Dairy Queen Looks to Fix Its Winter Problem (Newsmax)

With a new menu of snacks and sandwiches, the 75-year-old fixture of American summers is looking beyond its signature soft-serve and diving deeper into fast-food fare, where even giants like McDonald’s Corp. have been struggling lately.

It’s a major bet — but one that DQ’s chief executive officer, John Gainor, says is already starting to pay off. After introducing a line of hot desserts and artisan-style sandwiches, part of the company’s biggest menu overhaul in its history, same-store sales grew in September and October. [...]

The bigger test will come when winter sets in next month. The hope is new warm fudge-stuffed cookies and chicken-bacon sandwiches will get customers to think of Dairy Queen when the weather turns cold. [...]

Jordan’s Furniture to open in New Haven (Yale Daily News)

Zip lines, a 45-foot fountain and the world’s largest indoor adventure rope course will all come to New Haven in time for Christmas, bundled inside a 200,000-square-foot furniture store.

Jordan’s Furniture — a family-run business that offers shoppers entertainment options including theaters in six locations across New England — opens on 40 Sargent Dr., the former New Haven Register building, on Dec. 11, President and CEO Eliot Tatelman announced Wednesday [...]

Though Jordan’s is owned by American conglomerate holding company Berkshire Hathaway, Tatelman said his family runs the day-to-day affairs of the company. He added that Warren Buffett, CEO of Berkshire Hathaway, will make an appearance at the private opening ceremony on Dec. 10.

Tianjin explosions cost Berkshire Hathaway $130 million in reinsurance losses (Canadian Underwriter)

Berkshire Hathaway Inc. reported Friday its estimated losses from the Tianjin, China explosions last August were $130 million, though the Q3 underwriting gain for the Berkshire Hathaway Primary Group increased 31% year over year. [...]

On Aug. 12, explosions in Tianjin originated from a warehouse storing 700 tons of sodium cyanide, which can form a flammable gas on contact with water, the Associated Press reported at the time. As of Sept. 11, AP reported 173 were dead and eight persons were still unaccounted for. Guy Carpenter & Company LLC said at the time that the blast damaged shipping containers and vehicles, while windows several kilometres away were blown out. [...]

Former NetJets executive joining private equity firm (Washington Post)

Four months after Jordan Hansell resigned in the midst of NetJets’ contract dispute with its pilots’ union, he took a job as president of Rockbridge Holdings.

While at NetJets, Hansell had appeared alongside Buffett in interviews to discuss the cost-cutting turnaround he led from 2011 until June. But near the end of tenure, Hansell became the focus of the union’s ire over concessions the company sought in prolonged talks.

“Ultimately, it became a little bit about me as a leader, and I thought it was probably best if I got out of the way to see if they could come to a conclusion in those arrangements,” Hansell said about why he left NetJets. [...]

Howard Buffett Is Getting His Hands Dirty (Bloomberg)

To date, the Howard G. Buffett Foundation has given away $775 million to combat global hunger—efforts include teaching sustainable farming techniques and improving access to clean water—especially in the world’s conflict zones. The Democratic Republic of Congo and Rwanda top his list of countries where he intends to spend a total of more than $700 million during the next decade. They’re about as far away as you can get from Omaha, Nebraska, the site of Buffett’s quiet, humble upbringing. [...]

Berkshire News Briefs - 8/28/15

This week, 90% of the news I saw about Berkshire Hathaway fit into three categories:

1. Slower news outlets and blogs covering last week's announced purchase of Precision Castparts.
2. The stock market dip earlier this week caused Warren Buffett to lose a lot of money.
3. Comparisons between Berkshire Hathaway and Google... errr... Alphabet.

But there were a few interesting other news bits:

Geico to pay $6M to settle Calif. insurance bias charges (St. Louis Post-Dispatch)

Geico, the auto insurance unit of Warren Buffett's Berkshire Hathaway Inc, agreed to pay $6 million to settle charges it discriminated based on gender, education level and occupation when quoting rates online, the California Department of Insurance said on Monday.

The settlement lasts three years and resolves claims first raised by the Consumer Federation of California against Geico, which insures more than 22 million vehicles.

Geico was accused of targeting women, people with low incomes and people not working in professional or executive jobs with deceptive and inflated rate quotations, while offering better terms to drivers it considered more desirable. [...]

DQ Bakes is Dairy Queen's largest-ever menu expansion (Minneapolis Star Tribune)

Look for a raft of Dairy Queen TV ads next month for the Turkey BLT, Triple Chocolate Brownie a la Mode and more items from the new DQ Bakes menu.

Dairy Queen says it’s the restaurant chain’s largest-ever menu boost, aimed at bolstering its appeal as a food destination, while fortifying its stronghold in sweet treats.

Dairy Queen’s franchisees nationwide are installing oven systems — a big investment — to make DQ Bakes. And the Edina-based chain is for the first time doing year-round advertising to burnish a brand that turned 75 this year. [...]

While Berkshire is publicly traded, it doesn’t include Dairy Queen’s results in its financial reports. Gainor said that Dairy Queen’s stores together do $4.1 billion in annual sales. The company’s massively popular Blizzard makes up about 36 percent of that tally.

The chain’s same-store sales growth, a key restaurant financial gauge, has been in the high single digits in the past year or so, and in the mid-single digits on average since the 2009 recession, Gainor said. [...]

Shaw to make more carpet from recycled PET (Plastics News)

Shaw Industries Group Inc. plans to spend tens of millions of dollars at a South Carolina carpet fiber plant to increase the use of fiber from recycled plastics.

The world’s largest carpet maker, based in Dalton, Ga., is planning new polyester extrusion operations that will include the use of recycled PET beverage containers. The company also will add nylon fiber capacity. [...]

The $45 million project will create more than 50 new jobs at the facility, which already employs 290, the company said. Across South Carolina, Shaw has seven plants and more than 1,500 workers. [...]

S&P: Reinsurance M&A Will Be Driven by Berkshire Hathaway Model (Insurance Journal)

“We have seen an increased interest by investors to emulate the Berkshire Hathaway Inc. business model,” S&P said in its report. “Through their investment holding companies, they are acquiring [insurer/reinsurers] with strong operating cash flows that will be upstreamed to the parent company. This buy now and pay later [insurance/reinsurance] model generates cash flows, or “float” that these [Berkshire Hathaway] copycats invest.” [...]

The Berkshire Hathaway “business model is hard to duplicate and it is becoming a crowded trade in an already saturated reinsurance market,” the ratings agency said. “We expect more similar deals to come to the market during the next 12 months, which will likely continue to put pressure on reinsurance pricing given these holding companies’ lower cost of capital relative to stand-alone, publicly traded reinsurers.”

Burger King peace offer to McDonald's: 'Let's make a McWhopper' (Business Insider)

In the name of global peace, Burger King proposed making the hybrid hamburger to its rival McDonald's on Wednesday, at least for one day, the United Nations-promoted International Day of Peace on Sept. 21.

Burger King, perpetually locked in tough competition with the larger but less profitable McDonald's, delivered the olive branch via a full-page advertisement in The New York Times, saying it is time to "call a ceasefire on these so-called burger wars." [...]

Behind the scene in the campaign is some of the financial power of Burger King's part-owner, Berkshire Hathaway head Warren Buffett.

Peace One Day is strongly backed by the charitable foundation of the tycoon's son Howard Buffett, who is a director of Berkshire Hathaway and possible successor to his father as chairman.

Berkshire News Briefs - 9/5/14

Buffett’s Burger King Deal Has Warrant for 1.75% Stake (Bloomberg)

Berkshire Hathaway Inc.’s $3 billion of financing for Burger King Worldwide Inc.’s planned takeover of Tim Hortons Inc. gives billionaire Warren Buffett the option to buy a 1.75 percent stake in the combined company. Buffett’s company received the warrant to buy common shares and agreed to purchase 30,000 preferred shares as part of the deal, Miami-based Burger King said yesterday in a regulatory filing. The perpetual preferred securities pay a 9 percent coupon. [...] “Berkshire’s participation on this deal demonstrates its ability to use its strong balance sheet and massive cash generation to capture very attractive returns, even without the backdrop of a financial crisis,”[...]

Canadian identity wrapped up in homegrown ‘Timmy’s’ (Omaha World-Herald)

Few things unite Canadians the way Tim Hortons does. [...] So news last week that Burger King will buy Tim Hortons -- helped by $3 billion of preferred equity financing from Warren Buffett’s Berkshire Hathaway -- served as a bittersweet reminder of how beloved the homegrown chain is in Canada. Seventy-five percent of all the coffee sold at fast-food restaurants in Canada comes from “Timmy’s,” [...] While the takeover by Burger King, which is based in Miami but controlled by a Brazilian private equity fund, is getting much attention in Canada, it’s not causing panic. U.S.-based Wendy’s recently owned Tim Hortons and its brand remained intact. Wendy’s then spun off Tim Hortons as a separate company in 2006 after more than a decade of ownership.

Acme Brick employees sue Buffett’s Berkshire Hathaway for cutting retirement benefits (Fort Worth Star-Telegram)

Two employees and a retiree of Fort Worth-based Acme Brick Co., including the company’s chief financial officer, have sued the company and its parent, Berkshire Hathaway, alleging the company improperly reduced the company match on its 401(k) retirement plans and froze its pension plan. The class action suit, filed Aug. 15 in U.S. District Court in Fort Worth, says Berkshire Hathaway, run by multi-billionaire Warren Buffett, broke a pledge it made when it acquired Acme with Justin Industries in 2000 not to reduce benefits in the company’s retirement plans. [...] Acme Brick’s senior management on July 15 voted to make changes to the retirement plans urged by Buffett, Berkshire’s chief executive officer, and Marc Hamburg, its chief financial officer. Otherwise “Berkshire Hathaway intended to divest itself of Acme as a subsidiary,” the lawsuit says. [...] The lawsuit alleges that the changes to Acme’s retirement plans violate the federal Employee Retirement Income Security Act, commonly known as ERISA.

'The whole system is suffering': Words of frustration, caution at hearing on rail delays (Omaha World-Herald)

BNSF is working on improvements with all the gusto it has, company marketing chief Stevan Bobb said. “We know our service has not met your needs,” said Bobb, addressing the room full of farmers, grain cooperative officials and other shippers. Bobb noted the the company’s shipments from North Dakota — a state bulging with wheat, corn, barley, crude oil, soybeans and many other commodities — are at a record. Grain shipments from North Dakota this year, Bobb said, are still higher than a year ago, delays or not. BNSF, he told commissioners, is shifting railcars to the region and counting on track improvements scheduled to wrap up in October. “We should have the capability to move record volumes. Note that I said should,” Bobb said. “If all the bushels want to move in the same month, your railroad could be running like a sewing machine and you are still going to be late.”

Why Bill Gates And Warren Buffett Are Railroad Rivals (Business Insider)

[...] even though both billionaires are philanthropically entwined, when it comes to the old-school realm of investing in North America's railroads, Gates and Buffett part ways. [...] In Gates' case, his railroad stake can be viewed as simply an investment -- evidently a timely one -- but nothing more than that. Gates isn't running CN. But Buffett, because Berkshire Hathaway owns BNSF, is effectively running the railroad.

Buffett Search for Sure Thing Propels 76-Year Junk Food Quest (NewsMax)

Billionaire investor Warren Buffett got his entrepreneurial start at age 7, buying six-packs of Coke for a quarter, then hawking the beverages for a nickel apiece on hot summer nights. Now, at age 83, he’s still betting on simple indulgences. Berkshire Hathaway Inc. agreed Tuesday to provide $3 billion of financing for Burger King Worldwide Inc.’s purchase of doughnut chain Tim Hortons Inc. [...] Berkshire also owns See’s Candies and Dairy Queen, which sells ice cream and burgers. In 2008, Buffett’s firm helped finance Mars Inc.’s purchase of chewing-gum maker Wm. Wrigley Jr. Co. [...] For fast-food chains and candy and soda companies, Buffett “can look into the future and not have to wonder if they’re going to be doing great things,”

Why Buffett's son bought Rosa Parks archive (CNN Money)

Howard Buffett, the youngest son of the billionaire investor, said he was thinking of his mother when he paid $4.5 million for a trove of historic belongings left by civil rights activist Rosa Parks. "I knew that my mom would think that it was something that should get done," Buffett told CNNMoney. [...] "This is an incredible part of history, and to have that history locked in a chamber somewhere is not right," Buffett said. Buffett runs the Howard G. Buffett Foundation, which works in the developing world to improve agriculture and clean water delivery. He said the Parks material would be turned over to an institution that would ensure its availability to historians and others.

Berkshire News Briefs - 7/29/14

Canada Approves Berkshire Buy of SNC-Lavalin’s AltaLink (Bloomberg)

Berkshire Hathaway Inc.’s energy unit won Canadian approval for its planned purchase of SNC-Lavalin Group Inc.’s AltaLink electric transmission business after committing to reinvesting in the country. The subsidiary of Warren Buffett’s Berkshire has agreed to maintain AltaLink’s staffing and keep the company’s headquarters and senior management in Alberta, Industry Minister James Moore said in a statement yesterday. Berkshire Hathaway Energy also promised to reinvest all of AltaLink’s earnings back into the company or elsewhere in Canada for at least five years.

The transaction is expected to be formally completed in late 2014 or early 2015. Altalink Press Release; Berkshire Hathaway Energy Press Release.

Buffett faces end of $255m a year dividend cheque (New Zealand Herald)

Dow Chemical shares rallied past $53.72 on Wednesday for the first time in nine years. If they close above that price for 20 trading days in a 30-day window, the chemical maker can convert Buffett's $3 billion preferred stake into common stock. Swapping the shares would cut dividend payments that Dow has been paying since it turned to Buffett's Berkshire Hathaway to help finance a takeover in 2009 of Rohm & Haas. [...] The preferred stake is particularly expensive for the chemical maker with interest rates now near record lows. The securities have an 8.5 per cent yield, entitling Berkshire to $255 million in dividends annually.

US railways: Back on track (Financial Times - Free Registration Required)

Since 2011, all seven big Class I railroads in the US and Canada have been earning returns higher than their cost of capital – a modest achievement in most industries but a mark the US’s railroads had missed for the past 70 years. Rising traffic levels are letting railroads sweat their assets harder and work more efficiently. Matt Rose, executive chairman of BNSF, operator of the US’s second-biggest rail network, says the industry is in a “virtuous cycle”. “You make investments,” he says. “You make more money on that; you make more investments. That’s this virtuous cycle that nobody in the 1970s or 1980s thought was possible.”

This Man Will Not Destroy Warren Buffett's Empire Berkshire Hathaway Inc. (Fool Video)

Replacing Warren Buffett atop Berkshire Hathaway will be no easy task once the 83-year old billionaire is out of the picture. While debate rages on over who should replace the Oracle of Omaha as CEO, Buffett has made it clear that he'd like to see his son, Howard, step as a non-executive chairman of the board. Will this mark the beginning of the end of Berkshire Hathaway's greatness?

Geico's gecko ain't cheap: Top 10 insurance advertisers (Insurance Business)

Geico spent more money on advertising than any other insurance company in the U.S, expending a whopping $935.1 million in 2013 alone, according to Nomura. The second biggest advertiser was Allstate Corp., who had a budget of $654.8 million - about $280 million less than Geico. [...] “Berkshire Hathaway’s auto-insurance company Geico has been a growth machine in recent years and the advertising data show just how important good advertising is to growth,” said Nomura. Geico enjoyed 11.2% growth in personal lines in 2013, which is slightly over the 2% growth rate it experienced the previous year.

Major Brands To Acquire Fellow Missouri Wholesaler MoBev (Shanken News Daily)

Missouri-based spirits and wine wholesaler Major Brands has agreed to acquire local rival Missouri Beverage Co. (MoBev) for an undisclosed sum. The deal is expected to close this fall. MoBev, with 2013 sales of around $20 million, is minority-owned by Wirtz Beverage and McLane Co., the latter of which is owned by Warren Buffett’s Berkshire Hathaway firm.

BNSF train carrying North Dakota oil derails in Seattle (Yahoo/Reuters)

A Burlington Northern Santa Fe train carrying crude oil derailed as it left a railyard in north Seattle on Thursday, but there were no reports of a spill or injuries, BNSF said in a statement. Four railcars came off the tracks at around 2 a.m. PDT, three of which were carrying crude oil, said BNSF, which is owned by Berkshire Hathaway. The train originated in North Dakota and was bound for Tesoro Corp's 120,000 barrel-per-day Anacortes oil refinery, 80 miles north of the city, Tesoro confirmed. The derailment comes at a pivotal moment for the booming crude-by-rail industry, which has come under intense scrutiny after a series of accidents over the past 18 months.

Berkshire Unit Needn't Arbitrate Asbestos Coverage Rows (Law360)

A New York federal judge has refused to force a Berkshire Hathaway Inc. subsidiary to arbitrate disputes under Transatlantic Reinsurance Co.'s reinsurance agreements covering American International Group Inc. insurers' asbestos liabilities. U.S. District Judge Edgardo Ramos on Tuesday sided with Berkshire's National Indemnity Co. and denied TransRe's arbitration petition [...] The more than 40 treaties at issue provided reinsurance coverage to AIG for policies dated from 1978 through 1985. While NICO did not sign any of the treaties, it purportedly replaced AIG as a party through loss portfolio transfers, according to TransRe's petition. [...] According to NICO, its agreements with the AIG insurers were for typical services provided by third-party administrators that help insurers collect reinsurance.