Forest River Riding Wave of Record Industry-Wide RV Sales

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Berkshire Hathaway’s recreational vehicle maker Forest River is benefiting from industry-wide record sales for recreational vehicles.

After slumping during the Great Recession, sales are now hitting new highs as Millennials have embraced RVs as a popular vacation alternative to hotel and motel lodging.

According to the Recreational Vehicle Industry Association’s September survey of manufacturers, RV wholesale shipments finished at 43,598 units, an increase of 29.4% over the 33,704 units shipped last September. September 2017 shipments are the best September on comparable record.

RV wholesale shipments have climbed to 378,006 units through nine months of 2017, up 16.6% over the 324,286 units shipped during the same period last year.

All towable RVs, led by conventional travel trailers, totaled 38,543 units for the month, an increase of 31.8% compared to the 29,233 units shipped in September 2016. Year-to-date totals for towable RVs are up 17% to 330,673 units.

September motorhome shipments are up 13.1% to 5,055 units over last year; paced by solid gains in Type C motorhomes. Year-to-date motorhome shipments have reached 47,333 units on 13.8% growth over the 41,599 units shipped during the same time last year.

Forest River is working hard at increasing its capacity, with facility expansions at its plants in the Indiana cities of LaGrange and Butler.

The company will spend $2.9 million to build a 100,000-square-foot facility in Butler, and will employ 150 workers when it is completed.

© 2017 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Berkshire Hathaway Specialty Insurance Offers Network Security & Privacy Liability Insurance in Canada

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Berkshire Hathaway Specialty Insurance has unveiled the Professional First Network Security & Privacy Liability Policy in Canada, a solution that combines cyber liability and breach response coverage with risk management resources for commercial enterprises and financial institutions.

“Our new policy simplifies the complex endeavor of managing cyber exposures for both our business partners and our customers,” said Michael Densham, SVP, Executive & Professional Lines, BHSI Canada. “We are excited to round out our Executive and Professional Lines offerings with this flexible cyber solution, backed by BHSI’s commitment to service and unparalleled financial strength.”

The Professional First Network Security & Privacy Liability Policy is designed to deliver multi-faceted coverage and crisis management services for large commercial enterprises and a wide range of financial institutions, including credit unions, banks, asset managers, and insurance companies.

Policy highlights include:

• Coverage for both first and third party exposures resulting from data security and privacy breaches, including regulatory investigations, fines and penalties.

• Breach expense and extortion threat coverage, addressing the direct expenses an Insured incurs to effectively respond to a breach or extortion threat.

• Media liability coverage, which responds to traditional media exposures (e.g. through a company’s website) arising from electronic content.

• Business interruption coverage to pay lost income and related expenses incurred as a result of the Insured’s partial or full business interruption due to a network security failure.

• Online access to eRiskHub® tools and resources to help policyholders understand cyber exposures, establish a breach response plan, and prepare to mitigate the impact of a breach on their organization. eRiskHub is provided via NetDiligence, a leading cyber security and e-risk assessment firm.

BHSI policyholders also have access to legal experts to help them manage their obligations following a breach, forensic IT services to identify and contain a breach, and public relations and credit monitoring firms to manage the reputational damage that can accompany an incident.

© 2017 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

BNSF Trims Capital Expenses, Has Increase in Consumer Products Volume

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BNSF Railway has trimmed its capital expenses by $100 million, reducing it slightly from its planned $3.3 billion for 2017.

The railroad cites cost savings, noting that it “completed certain projects at a lower cost, delayed the timing of certain projects, and made modifications to equipment acquisitions.”

2017 revenues continue to show solid growth over 2016 levels.

Third quarter and first nine months of 2017 operating income were $2.0 billion and $5.3 billion, respectively, an increase of $73 million (4 percent) and $462 million (9 percent), respectively, compared to the same periods in 2016.

Total revenues for the third quarter and first nine months of 2017 were up 3 percent and 8 percent, respectively, compared with the same periods in 2016. This is a result of increases in unit volume for the third quarter and first nine months of 2017 of 3 percent and 6 percent, respectively, and higher average revenue per car/unit in the first nine months of 2017.

The increase in average revenue per car/unit in the first nine months of 2017 was primarily due to higher fuel surcharges and increased rates per car/unit.

Among the highlights were increased volumes in Consumer Products.

Consumer Products volumes were up 7 percent and 6 percent for the third quarter and the first nine months of 2017, respectively, compared with the same periods in 2016, due to higher domestic intermodal, international intermodal and automotive volumes.

The increases were primarily due to improving economic conditions, normalizing of retail inventories, new services, and higher market share.

While petroleum shipments continue to slide, with year-to-date numbers down -15.59%, the combined intermodal and carloads numbers are up 5.59% in the aggregate.

© 2017 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

BYD Negotiating to Build Monorail in the Philippines

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Just weeks after new energy company BYD announced it is in talks to build one of its monrails in Egypt, the company is looking to do the same in the Philippines.

BYD and the city of Iloilo are currently exploring the possibility of constructing a 20-kilometre SkyRail monorail by 2019.

“Air pollution and traffic congestion are twin problems many cities around the world are faced with,” said Liu Xueliang, General Manager for BYD Asia Pacific Auto Sales Division. “We are very excited to bring more of our solutions to the Philippines to create a cleaner living environment for everyone.”

BYD and Berkshire Hathaway

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares. It’s an investment that has paid off handsomely. Berkshire’s original investment of $230 million is now worth roughly $1.8 billion.

For More on BYD, read the Special Report: BYD, Berkshire’s Tesla.

© 2017 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

NetJets Reaches New Labor Accord with Teamsters Technicians

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After many years of labor disputes that dogged Berkshire Hathaway’s NetJets, the fractional jet ownership company seems to have finally put its labor troubles behind it.

In 2015, NetJets reached new agreements with its pilots and flight attendants after years of picketing.

Now, the negotiating team comprised of Teamsters Airline Division representatives, Teamsters Local 284 business agent and rank and file committee members for the NetJets Technicians and Related Group have reached an “agreement in principle” to amend their current collective bargaining agreement with NetJets.

The negotiations, which began in February of 2012, have been successfully concluded, according to the Teamsters.

“I am pleased with the ability of the union negotiators and NetJets to work cooperatively to reach a mutually satisfactory ‘agreement in principle,'” said Captain David Bourne, Director of the Teamsters Airline Division.

The Teamsters and NetJets are working to finalize the contract language that will result in a tentative agreement, which will then be put before the membership for a ratification vote.

© 2017 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

NV Energy Adding to its Renewable Energy Generation Capacity

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Berkshire Hathaway’s NV Energy is continuing to add to its renewable energy generation portfolio. The Nevada-based utility has signed three new long-term power purchase agreements that total100 megawatts. The requests are awaiting approval by the Public Utilities Commission of Nevada.

NV Energy’s President and Chief Executive Officer Paul Caudill noted that the projects include the largest solar array in Northern Nevada at a nameplate rating of 50 megawatts.

“These new projects signal an important step toward NV Energy’s commitment to partner with our customers in order to serve them with 100% renewable energy. Equally important to the low-cost solar energy being added to our customers’ portfolio, these projects benefit Nevada’s working families and provide another opportunity for our construction trade partners to gain skills in the renewable industry,” Caudill said. “We are pleased that all three projects include work site agreements with the International Brotherhood of Electrical Workers.”

It is estimated that up to 250 construction workers and nine permanent positions would be needed for the three projects.

The largest of the three new projects is the 50-megawatt Turquoise Nevada solar project, to be constructed in the Reno Technology Park in Washoe County, Nevada. The project will benefit from a 25-year power purchase agreement with NV Energy and is expected to be operational by the end of 2020.

The Turquoise Nevada solar project is a venture of Estuary Capital Advisors and Sumitomo Corporation of Americas. Sumitomo is an integrated global trading and investment enterprise with ownership in renewable energy facilities totaling 5,000 megawatts worldwide.

NV Energy has submitted a separate request with the Public Utilities Commission of Nevada to utilize the NV GreenEnergy Rider program to help a major customer offset 100 percent of its next phase of growth with solar energy.

“We are excited to help bring the largest solar energy field in Northern Nevada to a reality, and we appreciate the dedication many large Nevada customers have to using the NV GreenEnergy Rider program to offset their energy usage using renewable resources,” stated Pat Egan, NV Energy senior vice-president, renewable energy and smart infrastructure.

The other two new proposed 25-year power purchase agreements are the result of a Request For Proposals that was issued by NV Energy June 14, 2017. The 25-megawatt Techren Solar 3 project will benefit NV Energy customers in Southern Nevada and the 25-megawatt Techren Solar 4 project will benefit customers in Northern Nevada. If approved, the new solar energy projects will be operational on or before September 1, 2020.

The new solar resources will be owned by Techren Solar, LLC and will be located adjacent to the 300-megawatt Techren Solar 1 and 2 projects that are in development in Boulder City’s Eldorado Valley.

“To the best of our knowledge, Techren 3 and 4 are the lowest-cost universal solar power purchase agreements entered into in the United States,” Egan said.

Today NV Energy customers are served by 19 geothermal energy plants, 16 universal-scale solar fields, six hydro projects, five biomass or methane projects and one wind farm. In total, these projects represent more than 1,600 megawatts of nameplate renewable energy capacity. If all were operating at the same time they would generate enough energy to serve nearly a million typical homes in Nevada.

© 2017 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Ben Bridge Jeweler Appoints New President

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Berkshire Hathaway’s Ben Bridge Jeweler, a family-run fine jeweler with over 90 retail stores in 11 states and one province, has announced that Co-CEO and General Counsel Jonathan (Jon) Bridge is retiring, and current President and Co-CEO, Edward (Ed) Bridge will become Chairman and CEO.

Lisa Bridge C.G., the company’s Vice President of Education and the creator of the Lisa Bridge Collection, has been appointed as the company’s President and Chief Operating Officer.

Lisa will be the company’s first female President and its youngest top executive in over 60 years. “I love the relationships that are built over a beautiful piece of fine jewelry and I am eager to provide amazing experiences for each of our customers.”

“Ben Bridge has been a part of Berkshire Hathaway for 17 years and Lisa represents a wonderful balance of continuity and evolution,” says Chairman of Berkshire Hathaway Warren Buffett. “With the challenges facing retailing, I am excited to have someone passionate for the jewelry business, with creative ideas, and an understanding of today’s consumer at the helm. Lisa has retailing in her blood and I am excited for the future with Lisa as President.”

“I am pleased and excited about passing the torch of leadership to the next generation of our family,” says Jon Bridge. “Lisa has been a critical part of Ben Bridge for years and will continue the tradition of service to our customers and communities that we have built over the last century while evolving the business to grow in the digital age. Her knowledge of the business and insight as a member of the next generation will greatly expand opportunities for our company.”

Lisa Bridge, a fifth generation jeweler, is a Certified Gemologist and jewelry designer who launched her own namesake collection in 2015, a compilation of bold and fashionable jewelry inspired by the natural beauty she has encountered in her many travels. Lisa also spent the last seven years as Vice President of Education, overseeing the education and professional development of the company’s 1,200 associates. As President, Lisa will oversee merchandising, operations, marketing, sales, and human resources as she continues to evolve the business.

© 2017 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Dairy Queen Opens First Restaurant in South Korea

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Berkshire Hathaway’s International Dairy Queen, Inc. has launched itse first DQ Grill & Chill location in South Korea.

Located in the Daehak-ro area of Seoul, it is the first of 50 locations that are planned in South Korea within the next five years.

Additional DQ Grill & Chill locations will soon open in Itaewon, Gangnam and Hongdae.

The DQ Grill & Chill locations in South Korea will serve fan-favorite DQ treats and food, including the world-famous Blizzard Treats, which are served upside down, soft-serve cones with the signature curl on top, sundaes and DQ Cakes as well as a full range of food options such as GrillBurgers, chicken strip baskets, chicken sandwiches and a variety of salads.

In addition, new and exciting menu items available in South Korea will include Asia-inspired Blizzard Treats, such as a Green Tea Red Bean Blizzard Treat, and Asia-inspired smoothies. The new restaurants also will launch a beverage platform complete with soft drinks, Ades, smoothies, coffees and teas.

“We continue to expand the DQ brand in Asia,” says John Gainor, President and CEO of International Dairy Queen, Inc. (IDQ). “We have partnered with a franchisee that is a veteran of the food business and has an experienced team already in place. We look forward to introducing DQ Grill & Chill restaurants to our fans in South Korea.”

IDQ’s subsidiary, American Dairy Queen Corporation (ADQ), signed a multi-unit development agreement to develop restaurants in South Korea with the privately held M2G USA Investment, Inc., which has a diversified business portfolio that includes ownership of restaurants, hotels, public storage businesses, household appliance manufacturing, shoes and an extensive global real estate portfolio.

The DQ system has more than 6,800 locations with more than 2,300 of those units operating outside of the United States.

For more information on Dairy Queen’s world-wide plans, read a Mazor’sEdge special report on Dairy Queen.

© 2017 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Berkshire Hathaway Specialty Insurance Expands Coverage for Large Contractors

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Berkshire Hathaway Specialty Insurance has unveiled the Excess Integrated Follow Form, a single excess policy that sits atop multiple first- and third-party insurance policies, for contractors in the U.S. and Canada.

“With multi-line excess coverage from BHSI, contractors gain consistency in limits and tower attachment points and can reduce gaps in coverage. They also benefit from streamlined claims services when they have a loss and reduced frictional claims expenses,” said Bill Sullivan, North American Head of Casualty Construction, BHSI.

The new BHSI policy provides excess follow form protection above multiple underlying coverages, including general liability, environmental liability, employer’s liability, and professional liability. The excess coverage comes with a single limit, backed by BHSI’s financial strength. The Excess Integrated Follow Form is designed for larger contractors with complex exposures.

© 2017 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Major Texas Dairy Queen Franchisee Goes Bankrupt

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The U.S’s second largest franchise operator of Dairy Queen restaurants, Vasari, has filed for bankruptcy protection. The company blames the decline in the west Texas oil businesses for hurting its revenues.

Owned by Vickie L. Driver of Husch Blackwell, and William M. Spae Jr., Vasari operates 70 DQ locations across Texas, Oklahoma and New Mexico.

Vasari has filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Northern District of Texas, Fort Worth Division. In its filing it noted:

“The difficulties faced by the Debtor can largely be traced to the much publicized decline in oil prices. The decline in oil prices has severely impacted the job market for oil related jobs in regions of west Texas and east Oklahoma and has thus resulted in cross-industry declines in revenues in areas heavily dependent on oil related jobs. Many of the Debtor’s DQ locations sit in ‘Oil Country’ and have been severely impacted by the decline in oil prices due in large part to the loss of oil-related jobs and the resulting mass exodus of residents from areas in which the DQ locations sit. Since bouncing from a 12 year low, oil prices have begun to rebound; however, oil-related jobs have not. Without oil-related jobs, certain DQ locations will likely continue to underperform, causing a drain on the Debtor’s resources.”

Texas is a stronghold for the Dairy Queen brand. The chain is particularly popular in southern states, with 600+ stores in Texas alone, and Texas has its own marketing association, the Texas Dairy Queen Operators Council.

In conjunction with the announcement of the bankruptcy, Vasari immediately closed 18 Dairy Queen restaurants in Texas and four in New Mexico and Oklahoma.

For more information on Dairy Queen’s world-wide plans, read a Mazor’sEdge special report on Dairy Queen.

© 2017 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.