Monthly Archives: August 2016

MidAmerican Energy Gets Go-Ahead for Mega Wind Farm

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Berkshire Hathaway’s MidAmerican Energy has received the go-ahead from Iowa regulators for its $3.6 billion Wind XI wind farm.

In a joint news conference on April 14, 2016, held with Iowa Gov. Terry Branstad, the company first announced plans to invest $3.6 billion to install additional wind turbines in Iowa by year-end 2019.

Now that it has been approved by the Iowa Utilities Board, Wind XI will within three years become the largest economic development project in Iowa’s history.

When the 2,000-megawatt Wind XI project is completed, Hathaway’s MidAmerican Energy’s annual renewable energy generation is expected to reach a level that’s equivalent to approximately 85% of Iowa’s retail customers’ annual use.

In a release issued by the IUB:

“Today’s order states that MidAmerican has satisfied the two conditions in Iowa Code and is therefore eligible for advance ratemaking principles. The ratemaking principles associated with Wind XI, as agreed to by the parties, are reasonable. The Settlement as a whole will reduce MidAmerican’s reliance on fossil-fueled generation and position MidAmerican to meet ongoing and future environmental mandates in a manner that is more likely to benefit its ratepayers.

The Settlement’s benefits to retail customers will help ensure that MidAmerican’s current and future customers continue to enjoy adequate service and facilities at just and reasonable rates. In the settlement agreement, the ratemaking principles approved set the cost cap for Wind XI Iowa project at $1.792 million per MW including allowance for funds used during construction (AFUDC). For the return on equity (ROE), the settlement agreement provides an allowed return on the common equity portion of Wind XI that will be included in Iowa electric rate base at 11.00 percent.

MidAmerican filed their Wind XI request for advanced ratemaking principles with the Board on April 14, 2016.”

© 2016 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.

Two MiTek Companies Win 2016 Constructech Vision “Gold” Awards

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BuilderMT and Sales Simplicity, both MiTek companies, announced that they have each won a Constructech Vision award for their work with Arbor Builders.

This is the 38th technology award for BuilderMT and the 15th for Sales Simplicity.

To manage its construction workflows, Arbor Builders has implemented an all-encompassing solution, built on three key software tools — BuilderMT’s Workflow Management Suite (WMS),Sales Simplicity for CRM and sales automation, and Microsoft NAV for accounting. (Microsoft NAV was implemented by a BuilderMT-Sales Simplicity partner company, Western Computer, an accounting specialist in the home building sector.) For its careful choice of technology in preparation for rapid growth, Arbor Builders won the top gold prize in the “Builder/GC Residential Less than $5 million” category.

In a recent case study of Arbor Builders, company founder Jason Adams said, “What’s best about these systems – BuilderMT, Sales Simplicity and Microsoft NAV – is that they are all pre-integrated; they all talk to each other, and data flows from one to the other as if they were a single system.”

“Our ‘Best of Breed’ business model allows home builders like Arbor Builders to pick elite software packages in multiple categories, all of which have been integrated for ease-of-use,” said Tom Gebes, president of BuilderMT and Sales Simplicity. “Arbor Builders can now grow its company at any speed, confident they have the technology platform in place to accommodate an essentially limitless number of starts.”

About MiTek

Acquired by Berkshire Hathaway in 2001, MiTek is a diversified global supplier of software, engineered products, services, and equipment to the residential, commercial, and industrial, construction sectors.

© 2016 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.

GEICO Ridesharing Coverage Now in Half of the U.S.

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Building on successful launches all across the country, GEICO now offers its low-cost ridesharing product in 24 states. The product delivers comprehensive coverage to serve Uber, Lyft, Split and other on-demand service drivers.

The list of states include: Colorado, Illinois, Iowa, Indiana, Louisiana, Mississippi, Nebraska, New Mexico, Oklahoma, Oregon, South Dakota, Arizona, Iowa, Vermont, Wyoming, South Carolina, Georgia, Virginia, Maryland, District of Columbia, Texas, Connecticut, Pennsylvania and Ohio.

Bridging the coverage gap, GEICO’s ridesharing product combines coverage options into a single policy that protects drivers during both ridesharing and personal use when the rideshare app is on or off, with or without passengers in the vehicle. The policy addresses the needs of on-demand service drivers and eliminates the cost and confusion of having two separate policies.

“Since its first introduction to the market last year, GEICO’s ridesharing insurance solution has consistently received positive feedback from policyholders on its affordable pricing and hassle-free service,” said Othello Powell, director of commercial lines. “As we continue to monitor the unique needs of ridesharing drivers, we’re even more determined to grow our ridesharing product to serve many more drivers in many more states.”

Powell noted that many policies may limit coverage options to one specific transportation network company and may only cover a portion of the trip.

“With GEICO’s ridesharing insurance, drivers are covered regardless if they are logged into the transportation network company’s app. They also have the flexibility to work with multiple companies.”

GEICO’s ridesharing product is offered through the company’s Commercial division at a price similar to personal auto insurance.

© 2016 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.

Berkadia’s Frank Lutz Elected Chairman of MBA’s Fannie Mae DUS Lender Peer Group

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Berkadia has announced that Frank Lutz, Senior Vice President, Conventional Origination, has been elected by the Mortgage Bankers Association (MBA) to serve as chairman of its Fannie Mae DUS (Delegated Underwriting and Servicing) Lender Peer Group.

The DUS program is a unique risk-sharing model whereby lenders retain some of the underlying risk of the loans they sell to Fannie Mae, financing multifamily properties throughout the country. Last year, the DUS program provided over $42 billion of financing to the multifamily market, representing approximately 569,000 units.

The DUS program is comprised of 25 multifamily seller servicers approved as delegated partners by Fannie Mae.

“We are pleased that Frank was selected for this honor,” said Justin Wheeler, CEO of Berkadia. “His many contributions to the MBA support Berkadia’s longstanding history with the organization and reinforce our position as a leading DUS lender. We congratulate Frank on this recognition and support him in his efforts.”

Lutz joined Berkadia in 2011, and he is responsible for managing Berkadia’s relationships with Freddie Mac and Fannie Mae, as well as aspects of production including loan structuring, volume, profitability and credit quality. Under his leadership, Berkadia has become a top lender with both Freddie Mac and Fannie Mae, ranking second with Freddie Mac in 2015 for the fourth consecutive year and third with Fannie Mae in terms of delivered loan volume for the same time period. Berkadia was the sole lender to rank in the top three with both organizations in 2015.

Prior to joining Berkadia, Lutz was with Fannie Mae where he was an officer of the company, having acquired extensive experience in managing lender relationships and customers, developing business and resolving troubled loans.

Lutz has a master’s degree in business administration from Villanova University and a Bachelor of Science degree from Penn State University.

About Berkadia

Founded in 2009 as a 50/50 joint venture between Berkshire Hathaway and Leucadia National Corporation, Berkadia is a third-party commercial mortgage servicer, as well as an approved lender for Fannie Mae, Freddie Mac, and HUD/FHA. The company was among the top Freddie Mac and Fannie Mae multifamily lenders for 2013.

Berkadia owes its origins to GMAC Commercial Mortgage Corporation, which was acquired in 2009 by Kohlberg Kravis Roberts & Co., Five Mile Capital Partners LLC, and Goldman Sachs Capital Partners. Christened Capmark Financial, the company had $10 billion of originations in 2008 and a servicing portfolio of more than $360 billion before running into bankruptcy in October 2009.

In a deal approved by the bankruptcy court, Capmark sold its mortgage loan and servicing to the newly formed Berkadia in a deal worth $515 million.

The deal brought Berkshire into the heart of the commercial loan serving business, and the company has one of the largest commercial real estate servicing portfolios.

© 2016 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.

New Report Forecasts Strong Growth for Global Roofing Systems

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A new report by Research and Markets forecasts strong world-wide growth over the next five years for roofing manufacturers, including Berkshire Hathaway’s Johns Manville.

The report, “Roofing Systems Market by Material (Asphalt, Metal, Plastic, Clay, Concrete), Product (Shingles & Plates, Tiles), Construction Type (New Construction & Reform Construction), End-Use Sector (Residential & Non-Residential) – Global Forecast to 2021,” notes that the global market for roofing systems is projected to grow from USD 109.72 billion in 2016 to reach USD 157.56 billion by 2021.

The compound annual growth rate is estimated to be a robust 3.06% from 2016 to 2021.

The report cites growth in the construction industry throughout the world as well as government regulations regarding zero energy building codes and green roofing have played a huge role in providing the necessary momentum to the roofing systems market, after the economic slowdown between 2007 and 2009.

© 2016 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.

ZAK Products Has Three-Year Sales Growth of 58 percent

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For the fourth consecutive year, ZAK Products, a Berkshire Hathaway company, has been named to the prestigious Inc. 5000 list as one of the nation’s fastest-growing private companies.

ZAK Products has had three-year sales growth of 58 percent.

Founded in 2002, and headquartered in Dallas, ZAK Products is a provider of professional grade automotive fluid and maintenance products to certified professional automotive service centers and franchised car dealerships across the United States.

The Inc. 5000 list represents a unique look at the most successful companies within the American economy’s most dynamic segment—its independent small businesses. Companies such as Microsoft, Dell, Pandora and Zillow first gained their national exposure as honorees of the Inc. 5000, and ZAK joins other prominent brands featured in this year’s rankings.

“We are thrilled to be recognized as one of the top-performing businesses for the fourth consecutive time on the prestigious Inc. 5000 list,” said Vic Keller, founder of ZAK Products. “I am beyond proud of the dedication and relentless determination of our employees, which has been a driving factor for the continued growth and success of ZAK. Since the company began, it has been our goal to foster innovative tactics that change the way our industry does business. We continue to find creative and streamlined ways to improve our products and processes while building the trust and confidence of our partners. I believe the Inc. 5000 recognition is a reflection of that culture, and I am excited for our team to continue to propel ZAK’s growth into the future.”

Zak Products credits much of its success to its close relationship with NASCAR. The company’s official partner status began in 2010 with the designation of ZAK as the #1 Professional Maintenance Fluid of NASCAR.

© 2016 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.

Mouser Electronics Expands India Presence as APAC Revenues Grow

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Mouser Electronics is increasing its presence in India as it continues to have strong revenue growth in the Asia-Pacific region (APAC). The company also promoted Daphne Tien, who previously served as Director, Marketing & Business Development – APAC.

Mouser is a subsidiary of TTI Inc., which is owned by Berkshire Hathaway.

Mouser first entered the India market five years ago, establishing an office with seven employees. The company now has 34 employees and has opened new offices as it anticipates further staffing increases that will double that amount.

Growing APAC Sales

Mouser has had dramatic growth over the past five years in China, Japan, Korea, India, Australia and other APAC countries. Over that period, Mouser’s APAC revenue and customer base have tripled, and the company has received more than 30 significant recognition awards from leading publications and key manufacturers in APAC.

Recently, Mouser elevated Daphne Tien to Vice President of Marketing-APAC. Tien joined Mouser Electronics in 2011 to build an APAC marketing team from the ground up. She has acted as a prime local language spokesperson for Mouser in APAC to deliver the company’s brand value and differentiation in China, Japan, Korea, India, Australia and other APAC countries.

Tien began her career in Yageo Corporation, a global leading provider of passive components, where she was quickly promoted to Country Manager to run the sales and operations in their Hong Kong branch. In just one year, she turned losses into profits and increased revenue by 10 times the next year.

As Tien attained roles with increasing responsibilities, she developed Yageo’s business around the world, ultimately serving as the company’s Global Head of Distribution.

“I greatly appreciate the confidence Mouser and the markets have shown in me,” Tien said. “I know that with the fine team of professionals we have throughout Asia, we are going to achieve even greater successes.”

About Mouser Electronics

Mouser Electronics is an authorized semiconductor and electronic component distributor, focused on the rapid introduction of new products and technologies to electronic design engineers and buyers. Mouser.com features more than 4 million products online from more than 600 manufacturers.

The company become part of the Berkshire Hathaway family of companies when TTI was acquired in 2007.

© 2016 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 Grows Phillips 66 Position

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Berkshire Hathaway continues to believe in refiner Phillips 66 (PSX) and increased its ownership stake in the second quarter.

Berkshire increased its 75.55 million shares position to 78.782 million shares as of June 30, 2016.

Berkshire and Phillips 66

In early 2014, Berkshire swapped a large portion of its previous Phillips 66 position for the Houston-based company’s chemical business unit, which was added to Berkshire’s specialty chemical maker Lubrizol.

“We were able to do that on a tax-advantage basis. We didn’t trade them because we didn’t like the stock,” Warren Buffett commented at the time on CNBC’s Squawk Alley. “I had always intended on coming back in, assuming that the price was right.”

In August 2015, Berkshire Hathaway revealed that it again owned more than ten-percent of Phillips 66.

After hitting a high of $94.12 in November 2015, the stock was at $78.05 at the closing bell on August 19, 2016.

About Phillips 66

Phillips 66 was spun-off of ConocoPhillips in May 2012, and its refining and petrochemical business has been mostly immune to the downward pressure on oil prices, as the demand for refined products, including gasoline, diesel and aviation fuel remains strong. Phillips 66 also transports crude oil, refined products, natural gas and natural gas liquids (NGL). It gathers, processes and markets natural gas and NGL to power businesses, heat homes and provide feedstock to the petrochemical industry.

© 2016 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 Teams with Tego to Offer Medical Indemnity Insurance in Australia

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Berkshire Hathaway Specialty Insurance Company (BHSI) and Tego Insurance have entered into an exclusive underwriting agreement to provide medical indemnity insurance to medical practitioners in Australia.

“We are delighted to work with Tego to bring BHSI’s medical indemnity experience and unrivalled financial backing to the Australian market,” said Tony Bainbridge, Head of Healthcare, Australia, BHSI. “Our combined offering will bring additional choice, flexibility and financial security to Australian doctors.”

“The word Tego originates from Latin, meaning to defend and protect, and that is exactly what we focus on,” said Eric Lowenstein, Chief Executive Officer of Tego. “With a focus on superior customer service and industry-leading products – value is always top of mind.”

With BHSI’s entry into the Australian marketplace, doctors have a new choice in medical indemnity insurance, supported by a technically strong underwriting and claims handling team.

“Claims and complaints can be very stressful for practitioners. We are committed to excellence in claims handling, technical expertise and efficiency,” said Nicole Kroesche, Head of Healthcare Claims, BHSI. “Working closely with the practitioner and supporting them through a claim allows them to get back to focusing on providing quality patient care and worrying less about the claim itself.”

The introduction of innovative products to address the changes in the medical practice, and also the technology trends affecting the medical practitioner, is the goal of Tego and BHSI. As part of its underwriting process, BHSI reviews the individual characteristics of each medical practice since all practices in a particular medical specialty may not automatically pose the same level of risk. This tailored pricing approach may result in significant savings for individual practices.

© 2016 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 Travel Protection Teams Up With TripInsuranceZone

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Berkshire Hathaway Travel Protection (BHTP) has teamed up with TripInsuranceZone to bring BHTP’s suite of travel insurance products to the online travel insurance comparison website TripInsuranceZone.com.

Products to be offered through the website include BHTP’s ExactCare™, which provides travelers with comprehensive travel and medical benefits that feature Primary Emergency Medical coverage (including pre-existing conditions when purchased within 15-days of the initial trip deposit).

ExactCare also offers Trip Cancellation and Interruption, Medical Evacuation and Repatriation, AD&D, and Loss and Delay benefits.

“We are thrilled the customers of TripInsuranceZone.com can now access BHTP products and standout service,” said Dean Sivley, President of Berkshire Hathaway Travel Protection.

Using TripInsuranceZone’s unique comparison engine, travelers can research, quote, compare and purchase travel insurance from most major travel insurance providers in the United States.

“BHTP is bringing a unique set of travel insurance options to our customers. AirCare takes away inconveniences customers could experience when unexpected events occur during their flights, and ExactCare provides traditional comprehensive coverage with a quick and easy claims and payment process. We are very excited to have both set of products available on the TripInsuranceZone.com,” said Mariya Frayman, President of TripInsuranceZone.

Along with coverage, BHTP provides travelers with access to advanced mobile and claims technology that allows BHTP to process and pay a traveler’s claim within seconds once it has been reviewed and approved. Travelers simply upload all necessary documentation to start a claim, and then set-up their preferred method of electronic payment in their profile. This process can be done online at BHTP.com or by downloading their mobile application available for Android and iOS devices.

“Waiting weeks, or even days, for travelers to receive payments for travel emergencies and mishaps is a thing of the past. We’ve developed our claims processing to pay travelers quickly, so they can access those funds while they are still on their trip,” Dean said.

© 2016 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.