Berkshire News Briefs - 3/18/17

7 Enlightening Lessons From Berkshire Hathaway’s 2016 Annual Report

Just the lesson headings:

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

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

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

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

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

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

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

NV Energy seeks approval for rooftop solar alternative with Apple ties

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

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

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

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

KITCO Fiber Optics Joins Marmon Aerospace & Defense LLC

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

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

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

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

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

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

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

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

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

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

Berkshire News Briefs - 3/22/16

Warren Buffett’s Compensation in 2015 (BRK Rumors)

Warren Buffett and Charlie Munger both made $100k in salary last year, but Buffett's personal security detail counts as compensation too, bringing him up to $470k. CFO Marc Hamburg made $1.36 million; Berkshire Hathaway Energy CEO Greg Abel made $41 million. Berkshire only pays its board of directors between $2700-$7000.

Warren Buffet’s salary for remained unchanged at $100,000, the same level it has been at for more than a quarter century.

However total compensation has crept up 1% from the previous year due to increased costs associated with keeping Buffett safe. [...]

Warren Buffett remains in control of 19% of all of Berkshire Hathaway’s outstanding stocks and wields 33% of its voting power. Forbes reported on March 15, 2016 that Buffett is worth $66 billion. [...]

Warren Buffett On Investing, Bubbles, Crashes, And Everything In Between (Fool Singapore)

"[T]he only way you get a bubble is when basically a very high percentage of the population buys into some originally sound premise and –- it’s quite interesting how that develops –- originally sound premise that becomes distorted as time passes and people forget the original sound premise and start focusing solely on the price action."

Lots of local stories, which put together, point to a big expansion coming this year for Dairy Queen:

Dairy Queen franchise seeks to add nearly 100 locations this year, with up to 10 new locations in NH

Dairy Queen plans to expand in Spartanburg [SC] County

Dairy Queen plans Vermont expansion for 2016

Dairy Queen targets Amherst, Worcester in major 60-store Massachusetts expansion

Unhappy Teamsters talk strike again at NetJets (Columbus Dispatch)

Two months after NetJets pilots got a generous five-year deal after months of picketing and creating bad publicity for the private jet firm, labor unrest is starting to brew on a new front.

Teamsters members who work in areas such as fueling, catering and dispatching for NetJets are threatening "another serious labor dispute" for the company. [...]

MidAmerican Energy announces grants (Messenger News)

Sixty-five Iowa cities and community organizations are receiving grants totaling $205,000 through MidAmerican Energy's Trees Please! energy efficiency program. [...]

The program provides grants to communities to fund tree planting projects in public areas such as parks and roadways. Since 1998, MidAmerican Energy has awarded more than $3.6 million in funding.

Mobile app purchase propels GEICO to 14 million policies in force (Business Wire)

With the touch of a screen on his smartphone, Christopher Stevens made GEICO history, propelling the company to the 14 million policies-in-force milestone. The Hixson, Tenn., native purchased the record-breaking policy after buying a new car the day before Valentine's Day. [...]

Meet the winners of Warren Buffett's March Madness contest (Yahoo Finance)

"It’s been a heck of a weekend," says Kevin Wills, who works at insurance company USLI in Wayne, Pa., and found out Friday that he was a co-winner of the Berkshire Hathaway (BRK-A) March Madness contest for employees.

Wills and Robert Keller, who works at Berkshire-owned Geico, will split $100,000. Both men had perfect brackets through the first 15 games of this year’s NCAA men’s basketball tournament, until Middle Tennessee State University, a 15-seed, toppled Michigan State, a 2-seed, on Friday night. In other words: Warren Buffett’s big contest didn’t even last two full days. [...]

Berkshire News Briefs - 3/16/15

This week's post broke down clearly into BNSF and non-BNSF news, so I broke up the post accordingly.

BNSF News

Berkshire's railroad revamps service with billions, fewer cars (Reuters)

Stung by customer backlash over last winter's patchy service, Berkshire Hathaway's BNSF Railways invested billions in shoring up its operations. But in addition to hiring more than 7,000 new workers and spending $5.5 billion on improvements to its 32,500-mile network, the railway also has done something unexpected: it pulled thousands of rail cars off its lines. The strategy appears to have paid big dividends this winter, helping ease congestion on tracks and speed up traffic [...]

CN Rail, BNSF Tackle Accidents as Group Seeks Ban on Oil Trains (Bloomberg)

The accidents bring to four the number of oil train wrecks in North America in the past three weeks, according to the Center for Biological Diversity. The environment group is calling for a halt to transport of oil by rail, which has surged since 2009 with the boom in crude production from shale. [...] North American oil producers have increased their reliance on rail as new pipelines failed to keep pace with a surge of production from shale. The typical rail car carries about 700 barrels of oil, according to data posted on BNSF’s website. The number of oil carloads rose more than 40-fold from 2009 through 2013, when 435,560 carloads were shipped, and kept climbing last year to an estimated 500,000, according to the Association of American Railroads.

Oil refiners resisting BNSF's surcharge on tank cars (Lincoln Journal Star)

The nation's oil refiners are suing BNSF Railway for adding a $1,000 surcharge to crude oil shipments in standard tank cars, to force shippers to switch to safer jacketed cars that are not yet required by federal regulators and are not yet available, according to the lawsuit. [...]

Judge revives railroad collusion suit against Union Pacific, BNSF (Omaha World Herald)

A judge in U.S. District Court for the District of Columbia ruled late last month that the 2011 suit by the Oxbow group of mining companies — owned by billionaire Bill Koch — can proceed after being dismissed in 2013. The original complaint was dismissed for failing to state sufficient facts. [...] “They allege that U.P. and BNSF engaged in anti-competitive conduct ... that harmed plaintiffs,” U.S. District Judge Paul Friedman wrote in the opinion. “In short, plaintiffs allege that defendants conspired to fix prices above competitive levels through a uniform fuel surcharge and allocate certain markets to each other, granting U.P. a monopoly in at least one region.” Texas-based BNSF said it will “aggressively defend itself” against Oxbow’s complaint.

Everything Else

Buffett Follows ‘Avarice’ Warning by Keeping $100,000 Salary (Bloomberg)

Buffett, 84, stuck with a $100,000 salary in 2014, as he has for decades, his Omaha, Nebraska-based company said in a regulatory filing Friday. On Feb. 28, in his annual letter, he said the next CEO needs to avoid being greedy. [...] The billionaire has also shown a willingness to provide Wall Street-sized compensation to reward growth at operating units such as insurers and the utility subsidiary. Greg Abel, the chairman and CEO of Berkshire Hathaway Energy, was paid $27.6 million in 2014, including an $11.5 million cash bonus and $12 million from an non-equity incentive plan. [...] Chief Financial Officer Marc Hamburg, the only executive whose pay is listed in the proxy other than Buffett or Munger, saw his salary rise about 9 percent to $1.23 million in 2014. [...]

Warren Buffett Just Predicted the Next 50 Years for Berkshire Hathaway (Fool)

Buffett said that the chance of permanent capital loss with Berkshire is the lowest among any single-company investment. But he added a caveat: If the company's valuation is high, say approaching two times book value (it's at about 1.5 times book value now, so not too far off), it could be years before investors realize a profit. In other words, Berkshire has never been, and will never be, a good "traders' stock." The company has one of the most shareholder-friendly business models in the world, but it is geared exclusively toward long-term investors. As a result, Buffett recommends that investors should look elsewhere for investment options if they plan to hold their shares for less than five years.

Berkshire Hathaway completes Van Tuyl acquisition (Automotive News)

Berkshire Hathaway Inc. has completed its purchase of the Van Tuyl Group, the largest dealership acquisition in industry history. All aspects of the sale were finalized Monday, and the company has been renamed Berkshire Hathaway Automotive, headquartered in Dallas. The new Berkshire Hathaway Automotive now is the fifth-largest dealership group in the U.S., based on 2013 new light-vehicle retail sales. It has more than $9 billion in annual revenue, the company says. [...] Jeff Rachor, who had been president of Van Tuyl Group, will be CEO of Berkshire Hathaway Automotive.

33 Amazing Numbers From Bershire Hathaway's Golden Anniversary Shareholder Letter (Fool)

$18.3 billion: Berkshire Hathaway's increase in net worth during 2014. That gain in book value is greater than the book value of more than four-fifths of the companies in the S&P 500. 9 1/2: Number of Berkshire-owned businesses that would be listed on the Fortune 500 if they were independent -- the "1/2" refers to H.J. Heinz, which Berkshire owns with 3G Capital. ("That leaves 490 1/2 fish in the sea. Our lines are out.")

Buffett's $1 billion NCAA bet goes bust (CNN Money)

Don't even think about winning $1 billion picking the perfect NCAA bracket this year. And it's not because the odds of winning are infinitesimal. But because the companies behind the contest are too busy suing each other to organize another one this year. [...] The squabbling started last year when a small sweepstakes company called SCA Promotions sued Yahoo for allegedly backing out of a deal to put on the perfect bracket contest. Yahoo counter sued, alleging that SCA spilled the beans when it went to Berkshire to buy insurance that would pay $1 billion in the unlikely event that someone won the contest. In February, Yahoo sent subpoenas to Berkshire seeking information about its dealings with SCA, including all communication between Buffett and SCA about the contest, according to court documents.