Monthly Archives: September 2016

GEICO Expands Ridesharing Coverage to 10 More States

(BRK.A), (BRK.B)

To meet the growing consumer appetite for Uber, Lyft, Split and other on-demand services, GEICO has rolled out its ridesharing product to 10 more states (Alabama, Idaho, Kansas, Delaware, Maine, Tennessee, Wisconsin, Minnesota, Missouri and North Dakota). Coverage is already available in 24 states and the District of Columbia.

“The growing demand for ridesharing services is rapidly reshaping the country’s transportation landscape,” said Othello Powell, GEICO’s director of commercial lines. “As more and more consumers latch on to its popularity, we will continue to offer on-demand drivers the best insurance product at the lowest price to address their needs.”

Not long ago, rideshare drivers didn’t have many options when it came to auto insurance. Most policies only covered the portion of the trip that drivers were signed in to a ridesharing app and offered limited coverage options to one specific transportation network company.

GEICO’s ridesharing insurance product rolled onto the market last year, addressed the specific insurance needs of on-demand drivers. GEICO combined the coverage options of two separate policies into a single policy, eliminating the coverage gap between ridesharing and personal use whether or not if the driver is logged into the transportation network company’s app. GEICO also offers drivers the flexibility to work with multiple transportation network companies.

Powell noted that GEICO is constantly looking at ways to keep pace with the evolving nature of ridesharing services. “It makes a world of difference when we receive positive feedback from drivers who say GEICO is listening and responding to their needs.”

GEICO’s ridesharing product is now offered through the company’s Commercial division at a price typically much lower than taxi and commercial rates.

© 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.

Dairy Queen Plans Major Expansion in Upstate New York

(BRK.A), (BRK.B)

The Buffalo Niagara area of Upstate New York could see as many as 100 new Dairy Queen restaurants over the next decade.

All the locations would be Dairy Queen’s Grill & Chill restaurants, and Dairy Queen is currently looking for local franchise operators in the Upstate area.

In March, 2016, Dairy Queen announced plans to rollout 60 new stores in nearby Massachusetts. Potential locations include the towns of Taughton, Peabody, Burlington, Plymouth, and the city of Worcester.

For more information read a Mazor’sEdge special report on Dairy Queen.

© 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.

London Begins Pure Electric Bus Service Using BYD-Powered Buses

(BRK.A), (BRK.B)

Europe’s largest fleet of electric buses are now in service in London. The 51 single-decker buses were built in Britain as part of a partnership between China’s BYD Company (electric powertrain technology and batteries) and Alexander Dennis Limited (ADL).

The 51 buses are operated by Go-Ahead London from its Waterloo garage, servicing two Transport for London (TfL) routes – 507 and 521.

The order for the BYD ADL Enviro200EV buses follows a three-year trial that proved the buses could consistently run a 16-hour shift without a recharge. The long range of these vehicles is due to BYD’s iron-phosphate battery technology and the light aluminum body manufactured by ADL in Falkirk, Scotland.

The Mayor of London, Sadiq Khan, said: “It’s vital that we act now to clean-up our capital’s toxic air and do everything we can to help prevent the thousands of deaths it causes each year. I’ve set out a comprehensive plan to improve our air, and the transformation of London’s bus fleet will play a key role in making our transport cleaner and healthier.

“These first two electric bus routes right through the heart of London are another step towards the end of conventional diesel buses on our roads. This will deliver extensive air quality benefits and position us as a true world leader in adopting ultra low emission vehicle technology.”

The introduction of this environmentally friendly bus fleet to London will contribute towards improved air quality for its residents as the buses are estimated to reduce carbon dioxide emissions by 700 tons a year.

In a trial operation, BYD is also testing the world’s first pure electric double decker buses, five of which are in service with London operator Metroline on behalf of TfL. Future versions will be built in partnership with ADL.

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 $1.77 billion.

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

© 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.

MidAmerican Energy Places First Order With Vestas for Wind Turbines

(BRK.A), (BRK.B)

Denmark-based Vestas has received a firm and unconditional order from MidAmerican Energy Company for 214 MW of Production Tax Credit (PTC) qualifying V110-2.0 MW turbine components.

Vestas, the only global energy company dedicated exclusively to wind energy, will supply up to 1,000 V110-2.0 MW wind turbines for MidAmerican Energy’s new Iowa 2 GW Wind XI farm.

The turbines will be installed between 2016 and 2019, and Vestas will also receive a five-year Active Output Management 4000 service agreement that includes extension options for up to 10 years.

“Wind energy helps us keep prices stable and more affordable for customers. It provides jobs for Iowans and other economic benefits for our customers, communities and the state. Wind energy also contributes to a cleaner environment for everyone,” said Bill Fehrman, president and CEO, MidAmerican Energy. “We are proud to expand wind generation in Iowa. And, our customers appreciate that we’re doing it without asking for an increase in rates to pay for it.”

“With this order, MidAmerican positions itself to secure the full value of the PTC for the Wind XI project, and takes the next step in delivering low-cost, domestic wind energy to its customers. As the only state to generate more than 30 percent of its energy from wind, Iowa leads the country in delivering wind energy’s economic and environmental benefits to its communities, and it’s an honor to be a part of the largest wind project in the state’s history.” said Chris Brown, President of Vestas’ sales and service division in the United States and Canada.

© 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.

Todd Combs Joins Board of JPMorgan Chase

(BRK.A), (BRK.B)

(BRK.A), (BRK.B)

One of Berkshire Hathaway’s top stock pickers, Todd Combs, has joined the board of JPMorgan Chase/

JPMorgan Chase elected Todd Combs, 45, a director of the company, effective September 19, 2016.

Mr. Combs’ appointment to a Board Committee will be announced when determined. He was named a director of the company’s JPMorgan Chase Bank, N.A. and Chase Bank USA, N.A. subsidiaries.

Combs will continue to work at Berkshire Hathaway, which he joined in 2010. Prior to that, he was Chief Executive Officer and Managing Member of Castle Point Capital, an investment partnership he founded in 2005. In that role, he managed capital for endowments, family foundations and institutions. Earlier in his career, he was an analyst for Florida’s state financial regulator, and he analyzed risks for insurer Progressive Corp.

“Todd Combs is an extraordinary leader, investor and thinker, with a deep understanding of finance and business,” said Jamie Dimon, Chairman and Chief Executive Officer of JPMorgan Chase. “We’re pleased he has agreed to serve on our Board of Directors, and our company and our Board will benefit from his wisdom and judgment,” Dimon added.

“I deeply appreciate this opportunity with JPMorgan Chase and look forward to working closely with my new colleagues on the Board of Directors,” said Todd Combs. “I’m pleased to join a team committed to serving the interests of customers, clients and shareholders.”

© 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.

Marmon Acquires Pasta Equipment Maker

(BRK.A), (BRK.B)

Berkshire Hathaway’s Marmon Food, Beverage & Water Technologies Company has acquired Dominioni Punto & Pasta S.r.l., a leading Italian supplier of commercial pasta equipment, by Marmon Pasta Solutions S.r.l.

Terms of the acquisition were not disclosed.

Founded in 1968 by Pietro Dominioni, the family-run business designs and produces professional pasta equipment for the restaurant, hospitality, and catering markets, as well as high-volume pasta manufacturers. The business will continue to operate under the Dominioni brand name and its operations will remain based in Lurate Caccivio (Como). Fabrizio Dominioni, son of the founder, will continue to manage the business.

Fabrizio Dominioni said: “I am pleased that my family’s business is now part of Marmon and Berkshire Hathaway. Marmon is a strong, successful company and a global leader in the foodservice equipment industry. Our new home within Marmon will enhance our competitive position and our opportunities for growth now and in the future.”

The acquisition is Marmon’s second this year of an Italy-based foodservice equipment company. In June, Marmon Italia acquired Angelo Po of Carpi (Modena).

Angelo Po designs and manufactures professional kitchen equipment including horizontal and vertical cooking products and food preservation systems for caterers and restaurants in Europe, Asia, and North America. Dominioni and Angelo Po are both part of the Restaurant & Catering Technologies Sector within Marmon Food, Beverage & Water Technologies Company.

Fabrizio Valentini, President and CEO of Marmon Food, Beverage & Water Technologies Company, said: “Dominioni is an important addition to our organization. With Angelo Po, it will significantly contribute to our company’s growth, both geographically and technologically, as we continue to invest in the worldwide foodservice, restaurant, and catering market.”

Massimo Aleardi, Sector President of Marmon Restaurant & Catering Technologies, added: “We are excited for Dominioni to join our group. Dominioni has established high standards for quality, reliability, and service. Its products, which also complement Angelo Po’s portfolio, are well regarded in the foodservice industry. Its innovative equipment solutions help meet the growing demand for fresh food while also enabling more efficient production. We look forward to building on Dominioni’s excellent reputation not only throughout Europe, but also globally.”

© 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 Negotiates 2,826-Unit Portfolio Sale

(BRK.A), (BRK.B)

Berkadia has announced that it successfully negotiated the sale of the 2,826-unit Star Portfolio consisting of 11 separate apartment communities located in four states – Maryland, Pennsylvania, North Carolina and South Carolina. The purchase price for these assets was in excess of $300 million.

Berkadia’s Senior Managing Directors Scott Melnick and David Oakley negotiated the transaction on behalf of the buyer, Morgan Properties JV, an affiliate of Morgan Properties, one of the nation’s largest multi-family owners. Deutsche Bank represented the seller.

All of the Star Portfolio properties are located in very desirable, high-barrier submarkets in close proximity to major development hubs and public transit. Morgan Properties will execute an extensive, multimillion dollar value-add repositioning plan in aggregate to enhance the value of each property, and the renovation strategy will include premium kitchen and bath renovations and top-of-the-line amenity upgrades.

The six suburban Maryland apartment communities include Silver Spring Station, Westerlee, The Willows, St. Mary’s, Taylor Park and Willowood; in Pennsylvania, The Greens at Westgate; in South Carolina, The Waterway and Forest Oaks; and in Raleigh, North Carolina, Falls Creek and Heather Park.

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.

Lubrizol’s Particle Sciences Signs Deal with Glenmark for Cancer Drug

(BRK.A), (BRK.B)

Particle Sciences, a division of Berkshire Hathaway’s Lubrizol, has signed a deal with Glenmark Pharmaceuticals for the development and marketing of a generic version of the cancer drug Abraxane.

A Glenmark press release stated “The company has entered into a strategic development, license and commercialisation agreement with Particle Sciences Inc to develop and market a generic version of Celgene’s Abraxane product – paclitaxel protein (albumin)-bound particles for injectable suspension.”

Particle Sciences will develop the product exclusively for Glenmark, which is making a generic version of Celgene’s Abraxane, a drug that had worldwide sales in 2015 of $967 million.

Abraxane is prescribed for the treatment of breast cancer after failure of combination chemotherapy for metastatic disease or relapse within 6 months of adjuvant chemotherapy.

“The partnership is a significant development in Glenmark’s complex generics strategy and we are pleased to collaborate with Particle Sciences given their strong technical capabilities and understanding of particulate injection products. This is a challenging product to develop and we expect it to remain a limited competition opportunity,” said Glenmark Pharmaceuticals’ Robert Matsuk, president – North America and global API.

Under the terms of the agreement, Particle Sciences will receive milestone payments during various stages of the product’s development from Glenmark, including royalties on sales.

About Particle Sciences

Acquired by The Lubrizol Corporation in 2015, Particle Sciences is a leading contract drug development and manufacturing organization with a comprehensive suite of services for the formulation, analysis and production of complex drug delivery solutions.

© 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.

BYD Expanding California Facility

(BRK.A), (BRK.B)

Chinese vehicle and battery maker BYD Company is adding 40,000 additional square feet to its existing facility in Lancaster, California. The move comes as the company continues to make in-roads in selling its pure electric buses and medium- and heavy-duty trucks in the U.S. market.

“The people who work at BYD’s Lancaster plant are assembling buses for transit systems all over the country and soon we’ll be able to increase production line capacity to deliver these cutting-edge zero emission vehicles even faster to customers,” BYD America president, Stella Li, said in a statement.

BYD plans a third phase of expansion that will bring the facility to full capacity.

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 $1.77 billion.

No telling how much Samsung’s shares will appreciate, but they obviously want in on a company that is quickly becoming leading company in both the IT industry and automobile industry.

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

© 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.

Kraft Heinz Keeps Fullerton Factory Open Due to Lunchables Demand

(BRK.A), (BRK.B)

Kraft Heinz has decided to keep open a factory in Fullerton, California, which it had scheduled to close at the end of 2016.

In November 2015, the company announced its plans to reduce excess capacity by closing seven manufacturing facilities, including the Fullerton plant which employs 430 people.

The plant makes Lunchables, a prepackaged lunch for kids that is sold under the Oscar Mayer brand. According to the L.A. Times, the company reports it is facing “an undersupply of Lunchables.”

The move to keep the plan open comes after Teamsters Local 952 ratified a new 3-year Agreement that raises wages but cuts some Kraft Heinz’s health care costs.

According to the Teamsters, the Agreement “included minor concessions and significant improvements to the H&W with no employee contribution for the first year and minor employee contribution rate for each of the following years. The Agreement also includes yearly wage increases of thirty-five (0.35) cents on Jan. 1st of each year of the contract. Additionally, workers secured a pay-out of the Productivity Bonus of three thousand ($3,000) dollars which will be paid out thirty days after ratification as well as a severance package security going forward.”

© 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.