Month: July 2018

Categories
Warren Buffett

Buffett Converts Shares, Makes Multi-Billion Charitable Donations

(BRK.A), (BRK.B)

Warren Buffett is a generous guy. He’s made a massive fortune and now he’s giving much of it away. Buffett has converted 11,867 of his Class A shares into 17,800,500 Class B shares.

Of these Class B shares, 17,696,780 have been donated to five foundations: Bill & Melinda Gates Foundation, Susan Thompson Buffett Foundation, Sherwood Foundation, Howard G. Buffett Foundation and NoVo Foundation. These shares have a current value of $3.4 billion.

Buffett has never sold any shares of Berkshire. With the current gift, however, about 43% of his 2006 holdings have been given to the five foundations.

Their value at the time of the gifts, including the 2018 gift, totals about $31 billion.

Buffett is following his plan to have all of his Berkshire shares given to philanthropy through annual gifts that will be completed ten years after his estate is settled. In all cases, his A shares will first be converted into B shares immediately prior to the gift.

© 2018 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.

Categories
BNSF

Despite PTC Implementation, BNSF Files Extension

(BRK.A), (BRK.B)

BNSF Railway has announced that as of December 2017 it had fully installed and was operating under Positive Train Control (PTC) on all mandated subdivisions in advance of the December 31, 2018 deadline.

It has now announced that it nonetheless submitted a request to the Department of Transportation (DOT) for a two-year extension of the PTC deadline. The extension is required due to the Federal Railroad Administration’s (FRA) current interpretation of the law that full implementation status cannot be achieved until all non-BNSF trains and/or equipment operating on its PTC-equipped lines are also PTC-compliant.

“BNSF has succeeded in the adoption of this key safety technology. Even with this request for a deadline extension, BNSF’s PTC network is installed and we are currently running, and will continue to run, more than a thousand trains daily with PTC as we continue to refine the system and resolve technological challenges,” said Chris Matthews, BNSF assistant vice president, Network Control Systems.

As reported, BNSF completed the installation of all mandated PTC infrastructure at the end of 2017, including 88 required subdivisions covering more than 11,500 route miles on its network. However, to be considered fully implemented requires that all other railroads operating across any of BNSF’s PTC-equipped lines must be capable of operating with BNSF’s PTC system. This interoperability of PTC systems between Class I, commuter and short line rail carriers remains a challenge.

BNSF has successfully demonstrated interoperability with several railroads that operate on its network, including commuter railroads and Amtrak. However, not all railroads that operate on BNSF will have completed their PTC installation by the end of 2018.

© 2018 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.

Categories
Forest River

Forest River’s Booming Business Means 325 New Jobs in Elkhart, Indiana

(BRK.A), (BRK.B)

Forest River, Berkshire Hathaway’s RV manufacturer, is riding high these days. With business booming, it’s proposing spending roughly $6 million on real estate and create 325 new full-time jobs with annual salaries totaling approximately $16.9 million in Elkhart, Indiana.

The Elkhart County Council has approved a resolution for a 5-year tax phase-in agreement that would include Forest River’s guarantee of the 325 new full-time jobs.

Forest River has already begun construction on two buildings and is in the planning stage for two more.

Surprising analysts, millennials have embraced the RV lifestyle, which has helped spur robust annual growth averaging 15 percent the last few years.

Then again, perhaps it shouldn’t be such a surprise. With millennials touted as focused on experiences, the RV is the perfect vehicle to bring you to those experiences in comfort.

© 2018 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.

Categories
Lubrizol

Lubrizol Touts Breakthrough Material for Footwear Market

(BRK.A), (BRK.B)

The U.S. Department of the Interior reports that Americans throw away at least 300 million pairs of shoes each year. Unfortunately, the traditional rubber sole is not easily recyclable and need 30-40 years to breakdown in a landfill.

Berkshire Hathaway’s Lubrizol may have solved that problem with an innovative new material.

The company has debuted its new polymer-based material solutions for the footwear market, Estane TRX TPU and BounCell-X.

First displayed at Chinaplas 2018, the plastics and rubber trade fair in Shanghai,Estane TRX TPU is billed as an innovative rubber replacement for outdoor, athletic and work shoe outsoles. Outsoles made from Estane TRX TPU provide outstanding benefits for both consumers and footwear designers. Among its its features:

Automation
• Reduced labor costs via thermoplastic injection molding
• Automated production possibilities versus traditional rubber outsole molding

Sustainability
• Recycling* possibilities at outsole manufacturing and post with TPU (not available with thermoset rubbers)

Applications
• Exceptional slip resistance with wet ground conditions
• Excellent wear resistance against heat friction on the shoe outsole at room/high temperatures
• Transparent outsole allows color freedom for novel design
• Thinner TPU outsole improves flexible feeling and improves weight reduction

© 2018 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.

Categories
Berkadia

Berkadia Secures $47.675 Million in Acquisition Financing for 328-Unit Multifamily Community

(BRK.A), (BRK.B)

Berkadia, Berkshire Hathaway’s joint venture with Leucadia National Corporation, has arranged $47.675 million in acquisition financing for Veve at Castle Hill, a 328-unit multifamily community located in the Clermont submarket of Orlando.

Senior Managing Director Charles Foschini, Managing Director Christopher Apone and Senior Analyst Lourdes Carranza-Alvarez secured the loan on behalf of Advenir, a real estate investment and management firm based in Miami.

“The Orlando MSA has proven to be a well-established multifamily market for numerous reasons. With an economically diverse center for business, excellent location in central Florida and moderate cost of living, the area will continue to attract investment as strong market performance is expected despite rising interest rates,” said Foschini. “Orlando’s below state average unemployment rate and exponential growth trend create exceptional fundamentals for a flourishing multifamily market.”

Freddie Mac originated the 10.5-year loan with 10 years interest only. The LTV ratio was 70 percent.

Built in 2017, Veve at Castle Hill is located at 13600 Hartle Groves Place. One-, two-, and three-bedroom units feature faux wood plank flooring, raised panel interior doors with brushed nickel hardware, washer and dryer, chef-inspired kitchens, and high-end European-style vanity doors with brushed nickel hardware. Community amenities include a 4,200-square-foot swimming pool, sun deck with cabanas, fire pit, massage room, clubhouse and 24-hour fitness center.

Situated in the Clermont submarket of the Orlando MSA, Veve at Castle Hill is found near important transit routes and employment hubs. Florida’s Turnpike and West Colonial Drive are less than 10 minutes away, providing easy access to downtown Orlando and Orlando International Airport. Universal Orlando is less than 30 minutes away and Walt Disney World is under 40 minutes away from the community, offering close proximity to major economic drivers.

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 is among the top Freddie Mac and Fannie Mae multifamily lenders.

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.

© 2018 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.

Categories
Minority Stock Positions Stock Portfolio

BYD Creates Joint Venture to Manufacture & Recycle EV Batteries

(BRK.A), (BRK.B)

China’s BYD has formed a strategic cooperation agreement with Changan Automobile to produce batteries for electric vehicles.

The companies will manufacture up to 10 GWh of batteries, and have also announced that they will research autonomous driving and various new energy vehicle technologies.

BYD and Changan plan for the total battery production capacity of 10GWh to be reached in two stages. The first will reach 5-6GWh and the second stage 4-5GWh.

They will also work together to recycle EV batteries.

Changan, headquartered in Chongqing, China, is a state-owned enterprise that manufactures passenger cars, microvans, commercial vans and light trucks.

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 has grown in value almost ten-fold, and is now worth roughly $1.96 billion.

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

© 2018 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.

Categories
Acquisitions TTI

TTI Acquires Compona AG of Switzerland

(BRK.A), (BRK.B)

Berkshire Hathaway’s TTI, Inc. has acquired privately held Compona AG of Switzerland and the company’s German subsidiary Cosy Electronics GmbH.

Both Compona and Cosy are specialty distributors of interconnect products and provide services such as in-house assembly of specific connector ranges and full support on custom cable harnesses. The Compona Group is well known for their technical expertise, consistent quality and on-time delivery. Compona CEO, Riet Morell, will continue to lead Compona AG reporting to Glyn Dennehy, TTI President, EMEA.

The combined revenue and market share of TTI and Compona will create the largest specialty distributorship of interconnect, passive and electromechanical products in Switzerland. Cosy GmbH will expand the TTI footprint in Germany while also enhancing value added capabilities and technical expertise. In the face of increasing international competition, Compona’s business will benefit from TTI’s broad and deep stocking strategy and global warehouse network.

Dennehy said of the acquisition, ““We are proud to be bringing Compona and Cosy’s experienced and talented team, plus their high quality and specialist supplier line card, into the TTI Family of Companies and welcome the opportunity to enhance their already preferred status with their customer base.”

Urs Horat, founder and former owner of Compona AG, describes the acquisition as a perfect match. “After succession could not be found within the family and company, solutions were sought externally. We wanted to find a new owner who respects the values of the founders, appreciates the employees and supports the business in the long term. With TTI, we have found an internationally highly successful company that wants to continue to maintain the Compona brand, help to secure the future and to further expand its business.” Horat continued. “No changes are expected for employees and customers. The management team under CEO Riet Morell also remains unchanged.”

Paul Andrews, TTI Founder and Chief Executive Officer, welcomed his new associates, “It is a special occurrence when one family-founded business is able to offer another the next chapter for their employees and customers – we welcome the fine employees and customers of Compona and Cosy to the TTI and Berkshire Hathaway family.”

© 2018 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.

Categories
Minority Stock Positions Stock Portfolio

Oslo Goes Big for BYD’s Articulated Buses

(BRK.A), (BRK.B)

The streets of Oslo, Norway will soon have a large fleet of BYD’s 18-meter pure electric articulated buses running high traffic routes.

Nobina AB, the largest bus transport group in the Nordic region, has ordered 42 buses from BYD with scheduled delivery in the second quarter of 2019.

Two of BYD’s articulated buses have already been in service on route 31 and 31E, which are Norway’s heaviest duty routes, carrying roughly 50,000 passengers a day.

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 has grown in value almost ten-fold, and is now worth roughly $1.96 billion.

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

© 2018 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.

Categories
Berkshire Hathaway HomeServices

Laffey Fine Homes International Looks to Open New Offices & Triple Agents After Joining Berkshire Hathaway HomeServices

(BRK.A), (BRK.B)

Luxury home sellers Laffey Fine Homes International will join Berkshire Hathaway HomeServices as of July 11. The company will operate as Berkshire Hathaway HomeServices Laffey International Realty.

The brokerage, a full-service real estate company, remains independently owned and operated by local real estate leaders Emmett Laffey, Gregory Berkowitz and John Schoonmaker. It is a premier luxury brokerage on Long Island’s North Shore with operations extending from Montauk to Manhattan. Berkshire Hathaway HomeServices has grown to nearly 46,000 agents and 1,400 offices since its founding in September 2013. The network was recently named “Real Estate Agency Brand of Year” and “Most Trusted Real Estate Brand” in the 2018 Harris Poll EquiTrend Study.

“We are thrilled to bring the Berkshire Hathaway HomeServices brand to our customers and clients throughout the region,” said Laffey, the firm’s president and CEO. “Our company with its strong heritage and reputation, combined with the venerable Berkshire Hathaway HomeServices brand, will be unstoppable in the marketplace.”

Laffey said the brand will be embraced by local real estate consumers, many of whom work in the commercial and financial centers of Manhattan. “Our new brand carries the name of Warren Buffett’s Berkshire Hathaway Inc., one of the world’s most trusted and successful corporations,” he explained. “New Yorkers respect Mr. Buffett and the Berkshire Hathaway enterprise. We’re confident they will seek the world-class service for which Berkshire Hathaway HomeServices is known.”

Laffey International Realty is a perennial leader in Long Island’s bustling luxury market. In 2017, it topped the market in key sales categories such as per-agent productivity and per-office productivity while expanding its new-homes division and ultra-luxury and waterfront property sales.

Laffey said his brokerage will accelerate growth as a member of the Berkshire Hathaway HomeServices network. “We expect to at least triple our agent count over the next 24 months and add offices in strategic locations across Nassau, Suffolk, Queens and Brooklyn. Berkshire Hathaway HomeServices Laffey International Realty is an obvious choice for top agents who want to take their careers and businesses to new heights.”

With their network membership, Laffey International Realty agents gain access to the network’s Global Network Platform, a powerful tool suite driving lead generation, marketing support, social media, video production/distribution and more. The brand also provides international listing syndication, relocation referrals, professional education and the exclusive Luxury Collection marketing program for high-end listings.

Laffey International Realty will commemorate its brand transition July 11 with a ceremony and celebration at the Crescent Beach Club in Bayville. Its Cabernet and White yard signs will begin appearing throughout greater Long Island that day.

Gino Blefari, president and CEO of Berkshire Hathaway HomeServices, applauded Laffey International Realty’s transition. “I’ve known and admired Emmett Laffey for over 20 years,” Blefari said. “He and his team are highly respected in the marketplace and will be strong ambassadors of our brand. We are pleased to welcome them to Berkshire Hathaway HomeServices.”

© 2018 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.

Categories
Acquisitions BNSF

BNSF Logistics Acquires Unlimited Freight

(BRK.A), (BRK.B)

BNSF Logistics, a multi-modal third-party logistics service provider, has acquired Unlimited Freight, located in New Braunfels, Texas.

This acquisition strengthens BNSF Logistics’ service offering for flatbed movements across North America and provides additional local resources to support this global company.

“We are excited to add Unlimited Freight to our family,” BNSF Logistics President Dan Curtis said. “This addition brings talented employees with deep industry experience as well as valuable new customers to our rapidly growing organization and aligns with our goal to increase our geographic footprint.”

© 2018 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.