Berkshire News Briefs - 10/6/15

Marmon and Wells Fargo buy GE Capital rail businesses (Railway Gazette)

Berkshire Hathaway’s Marmon Holdings has bought ‘substantially all’ of GE Railcar Services’ tank wagons with immediate effect, and expects to complete the acquisition of GE Railcar Repair Services in the fourth quarter of 2015.

The wagons will be managed by Union Tank Car Co and Procor, while the repair facilities will expand the UTLX Repair Services and Procor Repair Services networks.

Buffett Cuts Munich Re Stake After Lamenting Reinsurance Slump (Bloomberg)

Warren Buffett’s Berkshire Hathaway Inc. has cut its stake in Munich Re after lamenting a slump in the reinsurance business.

Berkshire’s holding was lowered to 9.7 percent from about 12 percent, Munich Re said in a statement Tuesday, citing a notification from Buffett’s Omaha, Nebraska-based company. [...]

“It’s a business whose prospects have turned for the worse and there’s not much we can do about it,” Buffett told shareholders at his company’s annual meeting in May.

Berkshire's Abel Targeted by Pilots Union Over Board Secrecy (Bloomberg)

A union representing pilots at Berkshire’s NetJets unit said that it took out an advertisement Monday in Abel’s hometown newspaper, Iowa’s Des Moines Register, identifying the executive as a board member of the business. Two other directors remain unidentified, despite attempts to learn who is overseeing the company, the group said on its website.

Berkshire Hathaway Said to Borrow $275 Million for Texas Wind (Bloomberg)

Warren Buffett’s Berkshire Hathaway Inc. borrowed $275 million for a 300-megawatt wind farm in Texas that’s supplying power to Austin Energy, according to two people familiar with the deal. [...]

Berkshire Hathaway’s BHE Renewables unit owns the wind farm, which it acquired from Chicago-based Lincoln Clean Energy LLC.

Warren Buffett Gets Into Cybersecurity Insurance (24/7 Wall St)

Berkshire Hathaway Specialty Insurance (BHSI) unveiled two new types of insurance policies on Tuesday, providing cyber liability and breach response coverage. The company now offers risk management resource policies: the Professional First Network Security & Privacy Policy and the Professional First Professional Liability and Network Security & Privacy Policy. Berkshire Hathaway indicated that the latter also includes customizable errors and omissions liability coverage. [...]

As far as what features these policies include, that would be coverage for third party exposures, breach expense and extortion threat coverage, media liability coverage, business interruption coverage, access to the eRiskHub and more. [...]

Warren Buffett Saved Media General: Don't Dismiss Berkshire In A Fight Over Its Future (Forbes)

In the case of broadcasting conglomerate Media General, Buffett similarly helped revive the company through a creative May 2012 deal where he bought 63 of its newspapers for $142 in cash and provided the Richmond, Va.-based company with a $400 million term loan and a $45 million revolving credit facility. [...] This morning Nexstar Broadcasting disclosed that during Media General’s stock slide, it has been lobbying to buy the company in a merger that would instantly create a powerhouse broadcaster touching nearly 40% of U.S. households. [...] Berkshire, according to the BAML analysis, is a potential friendly investor for Nexstar. However, Berkshire, currently a holder of nearly 4% of Media General’s outstanding stock after a series of stock-funded acquisitions, has historically balked at hostile takeover deals. If Media General’s board decides to continue on its path for Meredith and its standalone strategy, odds are Buffett will support the plan. [...]

Lubrizol opens CPVC resin facility in Thailand (Business Standard)

The Lubrizol Corporation, , a Berkshire Hathaway company, on October 5, 2015 opened a chlorinated polyvinyl chloride (CPVC) resin manufacturing facility in Rayong, Thailand as part of a joint investment with Sekisui Chemical Company Ltd. The plant opening is the latest in the company's efforts to increase global CPVC capacity as previously announced in 2013. [...]

The Thailand facility, combined with Lubrizol's other recent investments in Louisville (Kentucky) and Dahej (India), as well as its existing CPVC operations around the globe, better positions the organisation to support its future business growth. [...]

MetLife Fighting Systemic Tag Asks Why Buffett Gets Pass (Bloomberg)

MetLife Inc., the insurer fighting the U.S. government’s decision to label it a potential threat to financial stability, wants to know why Warren Buffett’s Berkshire Hathaway Inc. has gotten a pass. [...]

“It is difficult to understand why, say, Berkshire Hathaway with $64 billion in debt and $277 billion of market capitalization should not be considered a systemic risk,” Hele said at the November meeting at the Treasury Department in Washington.

Hele also mentioned Visa Inc., noting that the world’s largest payments network had a market capitalization of $135 billion. MetLife’s market capitalization is about $52 billion.

Conservative think tank attacks NV Energy plan to build new power plant (Las Vegas Sun)

The Beacon Hill Institute, a conservative think tank backed by the Koch brothers, released a report Monday condemning a new, $1 billion natural gas plant proposed by NV Energy.

The institute, based at Suffolk University in Boston, said building the new plant could cost consumers $604 million by 2025 and that a new power plant could cost Nevada more than 1,600 jobs and $18 million of private investment.

The Nevada Policy Research Institute, which opposes shutting down coal-fired power plants in exchange for solar and natural gas generation, hired Beacon Hill to do the study. [...]

NV Energy hopes to phase out its use of coal entirely and have one quarter of its electricity generated from renewable sources in the next decade.

Warren Buffett outlasts Ndamukong Suh in final arm-wrestling duel (WPLG 10)

There was more than just football taking place Monday at the Miami Dolphins Training Facility in Davie.

Inside, WPLG Local 10 owner and billionaire Warren Buffett was challenging Dolphins defensive tackle Ndamukong Suh to an arm-wrestling rematch. [...]

It was a struggle, but in the end Buffett, aka "The Bicep," reigned victorious over Suh, aka "The Dominator," once again.

Berkshire News Briefs - 9/28/15

Charlie Munger: Buffett’s ‘Abominable No-Man’ (Think Advisor)

Sharp as a tack and blunt as Lenny Bruce, Charlie Munger, Warren Buffett’s peppery longtime business partner, is the not-so-secret sauce in the Oracle of Omaha’s extraordinary investing success.

Munger, the curmudgeonly 91-year-old vice chairman of Buffett's holding company, Berkshire Hathaway, is a humorous, deep-thinking billionaire whose judgment has been indispensable to growing Berkshire into a $360 billion-plus enterprise. Indeed, last year it picked up $18.3 billion in net worth.

Now comes “Charlie Munger: The Complete Investor” (Columbia University Press-Columbia Business School Publishing), by Tren Griffin, a book that neatly ties together the astute nonagenarian’s investing acumen in just under 200 pages. [...]

Kraft Heinz, Phillips 66 Targeted by Fake Securities Filings (WSJ)

Two separate filings that said they were submitted by Loreto M. Zamora on behalf of LMZ & Berkshire Hathaway Co. to the Securities and Exchange Commission on Thursday morning claimed to hold at least 10% stakes in both Kraft Heinz and Phillips 66.

Both companies told The Wall Street Journal that the filings are fraudulent and they have contacted the SEC. Warren Buffett, whose Berkshire Hathaway Inc. owns stakes in the food and energy companies, said in an email that he has never heard of Mr. Zamora. [...]

Could Warren Buffett's Utility Empire Be in Trouble? (Fool)

No matter where you look, particularly in Nevada, utilities are under serious pressure from customers looking to find lower-cost and cleaner energy elsewhere. Now that Buffett is one of the largest utility owners in the country, he's directly at odds with some of these trends.

Wynn Resorts is offering $15 million to break ties with NV Energy, and if it weren't for a limit on distributed solar in Nevada, there would be thousands of customers putting up their own generation systems.

The dual threat shows the challenge utilities are facing as the energy industry evolves. [...]

Borsheims CEO Goracke plans visit to share a wealth of retail knowledge with UNK students (Kearney Hub)

When Karen Goracke was approached to be University of Nebraska at Kearney’s Executive in Residence this fall she was at first surprised, then ecstatic. [...]

Giving back, by sharing her knowledge and ideas with students, is something the Borsheims CEO has been waiting to do. The College of Business and Technology Executive in Residence will give her that chance: To talk to students, visit with faculty and play a mentor role to anyone who wants to learn more about retail, Berkshire Hathaway, working for Warren Buffett, merchandising, accounting, sales – her list of what she wants to talk about is long. [...]

Perpetrators of a $10-Million Telemarketing Scam that Used Warren Buffett and Berkshire Hathaway's Names as Baits (Realty Today)

According to the indictment, Jonathan Papa and Methsiri "Lal" Palliyaguru sold phony investments in certificates of deposit and real estate to nearly 200 investors, primarily American senior citizens. They knowingly misrepresented that Warren Buffett and Berkshire Hathaway were involved with the purported real estate investments, in order to lure in unsuspecting investors who idolize Buffett and Hathaway.

Ndamukong Suh and Warren Buffett huddle up (Lincoln Journal Star)

[...] “Every time, we have a great conversation,” Suh said. “And they’re really conversations around the concepts of business or understanding commodities, how it can all work together. It’s not (Buffett saying), ‘You should go pick this stock.’

“He knows my goals, and he’s like, ‘You should think about this’ or ‘This is some advice from people I’ve worked with.’ It’s also him with open arms saying, if you want to learn about something else, if you want to learn about the aviation business — which is something I’m very into — he said, ‘I own NetJets’ and opened the door for me to go out and learn from those people.” [...]

Billionaire Warren Buffett is ready to sub in for Ndamukong Suh (CBS Sports)

When you're worth $70 billion you can do whatever you want and sometimes doing whatever you want includes showing up at a Dolphins game wearing shoulder pads and an Ndamukong Suh jersey.

That's exactly what billionaire Warren Buffett did on Sunday. The third-richest man in the world showed up on the Dolphins sideline before their game against Buffalo and Buffet definitely wasn't wearing his normal suit-and-tie combo. [...]

Berkshire News Briefs - 12/23/14

Merry Christmas, Happy Hanukkah, and Seasons Greetings!

Berkshire Hathaway’s Citizenship: Culture, Scale and the Future (Triple Pundit)

This is an excerpt from the book, "Berkshire Beyond Buffett: The Enduring Value of Values."

The companies owned by Berkshire Hathaway, the huge conglomerate that Warren Buffett built, follow their leader in embracing corporate social responsibility, stewardship and sustainability. But the breadth and scale of the sprawling conglomerate can hide both the commitments and periodic problems. [...] While Berkshire has won plaudits for good corporate citizenship, critics complain about the absence of conglomerate-wide reporting on items such as social responsibility and sustainability. Many Berkshire subsidiaries — including Brooks, Johns Manville, Lubrizol and Shaw — are in the vanguard of such corporate stewardship. They join elite global companies in the practice of issuing formal responsibility and sustainability statements and audited reports on the corporate treatment of stakeholders, especially employees at home and abroad, and of the environment.

All of Buffett's bad bets add up to a big year (CNBC)

Some of Warren Buffett's big stocks bets have tanked in 2014, and the market hasn't let it pass unnoticed. In fact, anytime a stock Buffett owns declines, the "billions being lost" by Warren makes it into the headlines. With all the fuss over Warren Buffett's stock-picking prowess, or lack thereof, you might think Berkshire Hathaway has suffered mightily. You'd be wrong, though—way wrong. In fact, Buffett has plenty of reason to smile: Berkshire Hathaway is crushing the S&P 500. [...] While the headlines may not overstate the actual size of potential losses on individual stocks, they do overstate the importance of those losses to Berkshire Hathaway as a corporation. "Most investors overestimate the significance of Berkshire's equity portfolio," said Meyer Shields, Stifel analyst.

Buffett’s Backup Stock Pickers Stumble as GM Declines (Bloomberg)

At least half a dozen stocks that Ted Weschler and Todd Combs probably picked for Berkshire Hathaway Inc.’s portfolio are poised to end the year lower than where they started. They include energy companies that have slumped with oil prices; automaker General Motors Co., which has struggled with recalls; and Chicago Bridge & Iron Co., an engineering and construction firm that’s down more than 50 percent since Dec. 31. “It appears, on first glance, that Todd and Ted have underperformed the S&P 500 this year,” said David Kass, a professor at the University of Maryland’s Robert H. Smith School of Business who has studied Berkshire’s portfolio.

Buffett Reminds His Top Managers: Reputation Is Everything (WSJ MoneyBeat)

Warren Buffett‘s “All-Stars” are getting their biennial reminder this month that they need to guard Berkshire Hathaway Inc.'s reputation–and plan for the future. Mr. Buffett, who’s run Berkshire for the past five decades, sends a memo every other year to the managers of each of Berkshire’s 80-plus subsidiaries that emphasizes those two points. [...] The latest memo also reminds the managers–who he’s dubbed “The All-Stars”–to keep him in the loop about “who should take over tomorrow if you should become incapacitated overnight.” Generally, the managers operate with a large degree of autonomy, and Mr. Buffett says elsewhere in the letter that they can “talk to me about what is going on as little or as much as you wish.” But Mr. Buffett himself takes responsibility for keeping a roster of potential replacements for each of the leaders of Berkshire’s far-flung operations.

See’s Candies CEO eyes East Coast expansion (San Francisco Business Times)

See's Candies President and CEO Brad Kinstler, speaking after appearing on a Stanford University panel discussion this month, said he's eager to one day replicate the company's California success on the East Coast. But he's not saying when that will happen, noting that See's Candies shops can be found as far east as Pittsburgh. The South San Francisco-based company also operates temporary locations in East Coast cities during holidays when chocolates are in demand.

BYD Says Berkshire Hathaway Has No Intention to Cut Stake (Morningstar)

Chinese electric-car maker BYD Co. Ltd. (1211.HK), which is backed by investor Warren Buffett, Friday said Mr. Buffett's Berkshire Hathaway Inc. (BRKA) has no present intention to cut its stake in the company. BYD also said it wasn't aware of a substantial share sale by Mr. Buffett, who holds 225 million H shares in the company. The car maker's statement comes a day after its Hong Kong-traded shares plunged as much as 47%. BYD said its business operations remain normal and that it hasn't incurred substantial foreign exchange losses despite the weaker Russian ruble.

Berkshire Energy Fined for Eagle Deaths at Wyoming Wind Farms (Bloomberg Businessweek)

PacifiCorp, one of the utilities owned by Berkshire Hathaway Inc.’s energy unit, agreed to pay $2.5 million to settle charges that its wind facilities in Wyoming killed eagles and other birds. The deaths near the Seven Mile Hill and Glenrock/Rolling Hills wind farms violated the Migratory Bird Treaty Act, according to a statement today from the utility. PacifiCorp said it will pay $400,000 in fines, $200,000 in restitution to the Wyoming Game and Fish Department and $1.9 million to the National Fish and Wildlife Foundation to help protect golden eagles near the facilities.

More information in their Press Release:

PacifiCorp Settles With Federal Government Over Migratory Birds (Press Release)

PacifiCorp has been cooperating with federal authorities to reduce migratory bird mortality, particularly eagles, at its wind facilities. Following guidelines issued by the U.S. Fish and Wildlife Service in 2012, PacifiCorp drafted migratory bird protection plans and hired qualified wildlife observers to monitor the wind sites for eagle activity. Operators were notified to shut down turbines to reduce risks when eagles were observed in the area. Other measures the company took included removing features from the project landscape that attract prey species. As part of the settlement, PacifiCorp will take measures at the company’s wind facilities in Wyoming to increase eagle populations.

Pacific Corp To Close Deer Creek Mine (Press Release)

Following an unsuccessful 18-month attempt to sell the Deer Creek coal mine, PacifiCorp announced today it will close the mine in Emery County, Utah, because it has become too costly to operate for customers. PacifiCorp also signed a long-term coal supply agreement with Bowie Resource Partners LLC to supply coal for the Huntington power plant. Energy West Mining Company, PacifiCorp’s subsidiary operator of the mine, notified the mine’s 182 workers of the pending closure. [...] The Deer Creek mine has an estimated five years or less of reserves, but much of the remaining coal has higher ash and sulfur content that has made mine production considerably more expensive and has made it more expensive to comply with air quality standards. Bowie Resource Partners LLC has signed a contract to provide the coal needed for the Huntington power plant, and will source the plant from its mines in Utah. Rapidly escalating pension liabilities for the mine’s represented workforce was a large factor in the economic viability of the mine.

Buffett’s Smart-Grid Idea Takes Over Your Washing Machine (Bloomberg)

Buffett’s Northern Powergrid Holdings Co. is working with Siemens AG to test a so-called smart grid that has the ability to control when consumer appliances will be used in the home. Being able to better manage when electricity flows allows utilities to lower consumer costs by reducing the need for new equipment, and to better handle surges and gaps from intermittent sources such as wind and solar. The pilot program, known as the Customer-Led Network Revolution, involves just 12,000 households in the U.K. and is one of only a few such projects being tested worldwide.

Warren Buffett said 'I loved it' when LeBron James rejoined the Cleveland Cavaliers (Cleveland Plain Dealer)

Buffett was seated on the baseline near the Cavaliers bench as a guest of James and, perhaps more so, of owner Dan Gilbert, who sat next to Buffett. He watched James score 27 points, dish out 13 assists, and grab seven rebounds, then chatted with James and Gilbert in the locker room afterwards. Buffett, 84, chief executive officer of Berkshire Hathaway, is the second-richest man in the United States with a net worth of $71.6 billion, according to Forbes.com. He was donning a white No. 23 Cavaliers jersey Monday night. On Sunday, he attended a Detroit Lions football game and wore a No. 90 jersey for the Lions' Ndamukong Suh.