Monthly Archives: October 2018

Western Energy Imbalance Market Brings Berkshire Hathaway’s Utilities $30 Million in Benefits in Q3

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Berkshire Hathaway’s utilities, PacifiCorp and NV Energy, received almost $30 million in benefits in the 3rd quarter due to their participation in the Western Energy Imbalance Market.

To date, the Western Energy Imbalance Market (EIM) has surpassed $500 million in gross benefits, as reflected by the wholesale electricity market since its launch in November 2014.

The Western EIM third quarter 2018 benefits are the highest total for any quarter, and were driven by periods of high demand and fuel prices.

During this quarter, the market generated $100.58 million in savings, pushing the total EIM benefits to $502.31 million.

“We are very pleased that the Western EIM benefits have now surpassed half a billion dollars,” said Steve Berberich, ISO President and CEO. “This clearly illustrates the value of markets to the customers in California and the region.”

NV Energy achieved benefits of $11.09 million and PacifiCorp’s benefits were $17.82 million.

“The EIM demonstrates the value participants’ gain being able to trade in real-time during high and low price periods,” said Mark Rothleder, the ISO’s Vice President, Market Quality and Renewable Integration. “The opportunity to buy and sell lower cost energy available from the regional EIM footprint during high load, high energy price periods really showed this last quarter.”

The EIM in the third quarter also resulted in total avoided renewable curtailment of 19,032 megawatt-hours, reducing carbon emissions in the region by 8,146 metric tons.

Since the end of 2014, the Western EIM’s state-of-the-art technology has found and delivered 734,437 megawatt-hours of renewable energy that otherwise would have been curtailed without the real-time, multi-state market.

The effective use of carbon free generation from the market has amounted to reducing a gross of 314,258 metric tons of CO2 from 2015 to date.

Looking forward, the market will continue to grow with the planned addition of five entities.

The Balancing Authority of Northern California/Sacramento Municipal Utility District is set to begin participation in April 2019. The Los Angeles Department of Water and Power, Salt River Project, and Seattle City Light will follow in April 2020. In addition, the Public Service Company of New Mexico is seeking regulatory approval to participate in the EIM.

The western EIM platform automatically finds and delivers low-cost energy to serve consumers in Arizona, California, Idaho, Nevada, Oregon, Utah, Washington and Wyoming. Optimizing diverse resources from a large geographic area enables more effective use of carbon-free generation besides reducing costs.

© 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.

Lubrizol to Invest $25 Million in Calvert City, Kentucky, Facility

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Berkshire Hathaway’s Lubrizol Corporation will invest more than $25 million in its Calvert City, Kentucky manufacturing facility.

The investment will enable the company to meet increasing customer demand, and comes after a recent $10 million expansion at the site to further improve the company’s safety management standards and create a world class quality laboratory.

The facility specializes in the production of Carbopol® polymers and Pemulen(TM) polymeric emulsifiers. These polymers are used in consumer goods for the personal care, home care, and pharmaceutical markets. This expansion will include advanced, proprietary process technology that will allow the Calvert City facility to continue to provide Lubrizol’s partners with high quality products.

“In response to increasing market demand, this investment will enable us to expand production capacity and update our infrastructure at our Calvert City facility while continuously improving safety and quality,” states Deb Langer, senior vice president and general manager of Lubrizol Personal, Home and Healthcare. “The expansion is critical in allowing our team to continue to provide dedicated service and support to our global partners.”

© 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.

NetJets to Add 325 Cessna Jets to Fleet

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Berkshire Hathaway’s fractional jet ownership company, NetJets, has signed a deal with Textron, the maker of the Cessna brand, to add as many as 325 of the company’s jets to its fleet.

The deal, announced on the eve of the National Business Aviation Association’s annual corporate jet show, has a value of roughly $10 billion.

The new agreement will give NetJets the ability to add up to 175 super-midsize Citation Longitude aircraft, as well as up to 150 of the new large cabin Citation Hemisphere aircraft to their fleet.

Textron Aviation began their relationship with NetJets more than 30 years ago when with the Citation SII. Since then, NetJets has owned and operated nearly 500 Citations including the Citation Latitude, Citation Sovereign, and Citation XLS.

NetJets recently ordered their 100th Citation Latitude, and are forecasting delivery of the first Citation Longitude in the second half of 2019.

The Longitude is a new super-midsize, 8-passenger jet that has a top-speed of 554-MPH and an endurance aloft of 7:45 hours.

© 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.

See’s Candies Extends Partnership with Yes Lifecycle Marketing

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Yes Lifecycle Marketing has announced that Berkshire Hathaway’s See’s Candies, one of the most trusted and timeless candy makers in the world, has extended its partnership with the vendor through 2021 and will continue to use its expert strategy, email creative and analytics services as well as its robust multichannel execution capabilities supported by best-of-breed database marketing solution Marketzone and multichannel marketing communications platform Yesmail360.

See’s Candies first partnered with Yes Lifecycle Marketing more than 10 years ago for data processing before expanding the scope of the relationship and transitioning its database to Yes Lifecycle Marketing’s Marketzone product. Along the way See’s Candies adopted Yesmail360 for its cross-channel orchestration and deployment capabilities and enlisted the vendor’s strategy, email creative and analytics services to help develop an end-to-end lifecycle marketing program that delights and engages subscribers. Since transitioning and implementing a cohesive lifecycle program, See’s Candies has seen 117 percent overall database growth.

“Yes Lifecycle Marketing is one of our longest serving and most trusted marketing partners,” said Jensen DeWees, Marketing Director, See’s Candies. “From direct mail campaigns to audience profiles and email marketing, our team at Yes Lifecycle Marketing has enhanced our direct marketing program and has played a pivotal role in the evolution of our customer engagement strategies while never losing sight of the values that define our historic brand.”

As the partnership expanded, Yes Lifecycle Marketing’s creative and strategic teams enhanced the email program to better segment, target, and engage subscribers with updated creative and relevant content consistent with the See’s Candies iconic brand.

Relying on Yes Lifecycle Marketing’s advanced targeting, segmentation and dynamic content capabilities, See’s Candies plans to deliver even more personalized messaging to its audience going forward.

“We are honored that See’s Candies has chosen to extend our partnership as it continues to cultivate a sophisticated, multichannel marketing program that engages their audience along each step of their lifecycle,” said Sumit Bhalla, Senior Vice President of client services at Yes Lifecycle Marketing. “With the help of our agency services teams, See’s Candies has developed a data-driven strategy for identifying, targeting and engaging its core customer segments across channels.”

“To build and maintain a powerful brand, savvy marketers know that they need to build and maintain a strong relationship with a technology partner that can scale in order to meet their evolving needs and goals,” said Jim Sturm, President at Yes Lifecycle Marketing. “Our robust technology solutions and experienced services teams enable marketers to meet the ever-changing consumer expectations and deliver meaningful experiences across channels.”

© 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.

Worcester, Massachusetts to Get First Dairy Queen this Winter

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Worcester, Massachusetts, the second largest city in the state, will get its first Dairy Queen sometime this winter.

The Dairy Queen Grill and Chill will be a 2,800-square-foot, restaurant with 70 or more seats, and offer an outdoor patio and a drive-through. The cost of construction is approximately $1.3 million.

Franchisee Thebe Enterprises LLC of Northboro, Massachusetts, has signed a 20-year lease for the site.

In 2016, Dairy Queen announced plans to rollout 60 new stores with potential locations including the towns of Taughton, Peabody, Burlington, Plymouth, and Worcester.

One thing is for sure, Massachusetts does love ice cream. The Bay State ranks in the top ten of most ice cream consuming states.

© 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.

Brooks Has Record Global Growth at Nearly 30 Percent

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With a clear focus on delivering the best gear and running experiences for runners worldwide, Berkshire Hathaway’s Brooks Running Company has announced record global growth as it closed out the third quarter of its fiscal year.

Year to date, Brooks reported a 29-percent increase in global revenue driven by a 32-percent increase in global footwear sales.

Success of the company’s footwear business in the third quarter was driven by franchise products such as the Ghost and Adrenaline GTS, which are up 52 percent and 32 percent respectively year to date. Brand new footwear styles that launched in the last 18 months including the Revel, Levitate, Bedlam and Ricochet are also resonating with customers and achieving strong sales in their inaugural period.

While the performance running category continues to face headwinds, Brooks brought new runners to its brand across all channels. According to The NPD Group’s Retail Tracking Service, Brooks grew its total U.S. adult performance running footwear market dollar share to 12.4 percent year to date through August 2018, moving into the No. 2 position within the category.

In the 12 months ending August 2018, the company also gained 4.4 share points in the $100 and above (average selling price) segment of the adult running performance running footwear category, making it the No. 1 brand with 23 percent dollar share (rolling year ending August 2018).

In addition to success with runners, Brooks also received product awards from industry experts across the globe, including:

• Editor’s Choice from Runner’s World for the Ghost 11 and Caldera 2;
• Best Buy from Runner’s World for the Ravenna 9;
• Gear of the Year from Outside Magazine for the Bedlam and Mazama 2;
• Editor’s Choice from Competitor for the Levitate 2;
• Editor’s Choice from Outdoor Gear Lab for the Adrenaline GTS 18;
• Best Running Shoe under $100 from Gear Patrol for the Launch 5;
• Sole Mate award from Women’s Running for the Glycerin 16;
• Editor’s Choice (Best Energize Return) from Canadian Running for the Levitate 2;
• Editor’s Choice from Women’s Running UK for the Launch 5 and Levitate 2;
• Editor’s Choice from Trail Runner for the FastForward Crossback;
• Best Sports Bra from Siftung Warentest for the Juno.

“The growth we’re seeing at Brooks is incredibly exciting because it indicates our brand is resonating with runners who are choosing our gear as they head out the door on their runs,” said Brooks CEO Jim Weber. “We are more focused than ever on delivering the best gear for all who run and inspiring more people around the world to run and be active.”

Increased revenue across the world contributed significantly to Brooks’ overall growth. In the Europe, Middle East and Africa region, year-to-date revenue grew 27 percent led by Germany, Austria and Switzerland. Similarly, the Asia Pacific and Latin America region sustained the upward sales trajectory it ignited early in 2018, reporting a 25-percent increase in year-to-date revenue led by Australia.

Brooks also announced it is expanding its global footprint in key running markets including India, South Korea and Mexico. In August, Brooks relaunched its brand in South Korea and opened a flagship store in Gangnam-gu that houses a Brooks retail store, workout space, corporate offices and a runner’s hub, all a short jog from the Han River lined with miles of running paths.

The brand also launched for the first time in India and is rapidly growing its presence in this important market, expecting to be available in more than 20 stores and on the Amazon India platform by the end of 2018.

Later this year, Brooks will launch in Mexico with a flagship store; partnerships at popular sporting goods and department stores including Marti Sports, Liverpool and Palacio de Hiero; and a branded web experience at www.brooksrunning.mx.

© 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.

Boxercraft Will Manage Russell Athletic’s Collegiate Business

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Starting in October 2018, Boxercraft will officially manage Russell Athletic’s collegiate business including sales, fulfillment and all associated licensing obligations. The companies are currently coordinating with all licensing agencies, along with the colleges and universities on this opportunity. In addition to servicing the collegiate market, Boxercraft will also assume Russell Athletic’s Minor League Baseball rights.

In October 2017, Russell Athletic’s announced it was transitioning away from the team uniform business to focus on the consumer retail market.

“Over the past year Russell Athletic has been re-orienting our strategy to provide additional focus on our branded retail business,” said Matt Murphy, Russell Athletic vice president. “This more consumer-focused strategy will cross multiple retail segments, engaging a new, younger generation of Russell Athletic fans, including the college channel. Boxercraft has a world class service model, is well established in the collegiate market and continues to invest for future growth, making them a great strategic partner.”

In July 2018, Russell Athletic and Boxercraft announced a partnership that named Boxercraft as the exclusive decoration, marketing and sales partner for Russell Athletic’s collegiate licensed business.

Russell Corporation was acquired by Berkshire Hathaway in 2006 for $600 million and became a division of Fruit of the Loom. Its business had peaked a decade earlier when in 1992 it landed a five-year contract with Major League Baseball as the exclusive provider of uniforms. By 1995, the company was generating $1.25 billion in annual sales, and had 18,000 employees.

© 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.

Fruit of the Loom Forgoes Retails Stores for New Product Line

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What would seem to be the ultimate retail brand, Fruit of the Loom, which is found in every Walmart across the U.S., is going another way with its new Seek No Further™ collection.

The company bills the clothing line as its most stylish and versatile women’s clothing line to date. Bringing together contemporary fashion and effortless style, Seek No Further is meant to be mixed and matched seamlessly so women everywhere can create looks they love as they transition from day to night and work to play.

The big news for Fruit of the Loom is that other than a pop-up store held Friday, Oct. 12 to Saturday, Oct. 13, in the heart of SoHo, New York City, Seek No Further products will only be available for purchase online on from Fruit.com/Seek-No-Further and on Amazon.

A Fruit of the Loom press release emphasized that the pop-up shop marked the first and only time where customers could purchase Seek No Further pieces in-person.

With much of the retail brick-and-mortar stores market struggling, Fruit of the Loom has been expanding the avenues to buy its products. In November 2017, the company announced a direct to consumer subscription service that enables customers to purchase its products for a 30 percent discount.

© 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.

Largest Private Bus Operator in Vancouver Commits to BYD Electric Buses

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BYD Canada has been awarded an order for zero emission, battery-electric buses by WESTCOAST Sightseeing, the first tour company in Canada to order clean energy buses, and the first to commit to having a 100% clean-energy fleet by 2023.

Battery and Electric Vehicle Pioneer BYD is the world’s largest manufacturer of electric vehicles and batteries, and the overwhelming global leader in battery-electric buses.

The largest private bus operator in Vancouver, WESTCOAST Sightseeing has agreed to work exclusively with BYD on converting their entire fleet of 90 buses, which will include open top buses, double decks and singles and others. WESTCOAST Sightseeing will also work with city to develop charging infrastructure that will not only benefit WESTCOAST but many other companies that want to reduce their greenhouse gas emissions and climate impact.

“Our business is built around the natural beauty of our home and we are especially conscious of the impact our day-to-day operations has on the environment,” said Rob Safrata, Chief Executive Officer of WESTCOAST Sightseeing.” We are proudly working towards a greener and more sustainable future. And adding electric buses and boats is the first step to achieve our goal in 2023 of becoming the first Sightseeing firm in Canada with 100% electric vehicles.”

WESTCOAST Sightseeing recently added Electric Harbour tours to its line of sightseeing products, providing the first Harbor tour on a 100% electric boat in Vancouver.

The BYD battery-electric buses will make an immediate improvement to air quality and noise levels for the B.C. region. These buses alone will deliver a reduction in carbon emissions of some 4,500 Metric Tons of carbon emissions per year based on EPA standards.

“CEO Rob Safrata has long held a clean energy vision and we are excited to be working with him,” said BYD Canada’s Vice President Ted Dowling. “This aligns perfectly with the recent announcement by British Columbia Premier John Horgan for the need to find other ways to reduce emissions.”

BYD is the world leader in zero emission buses.

BYD Canada was the pioneer in Canada and is now the market leader. In addition to this BC order, BYD Canada has buses on order or in operation for Société de transport de Montréal (STM) and the Réseau de transport de Longueuil (RTL) in Quebec; Toronto Transit Commission (TTC) in Ontario; and St. Albert (STAT) and Grand Prairie in Alberta. BYD had more electric buses on the Canadian roads than any other firm.

Investing more than $250 million in North America to date, BYD has delivered more than 270 buses in North America; and sold or leased in excess of 600 buses in total to more than 50 municipal, transit agency, university, airport, federal and other commercial and private sector clients in 14 U.S. states, and across 4 provinces in Canada.

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.