Monthly Archives: February 2020

Berkshire Hathaway Specialty Insurance Expands Team in Spain

(BRK.A), (BRK.B)

Berkshire Hathaway Specialty Insurance (BHSI) has announced two appointments in Spain, naming Alejandro Lovera as Head of Executive and Professional Lines and Silvia Sanchez as Head of Operations.

“We are pleased to continue to expand our team in Spain with these two highly experienced professionals. Alejandro will oversee our financial lines underwriting, bringing policies backed by BHSI’s stability and financial strength to customers in Spain, while Silvia will enhance our ability to provide excellent and efficient service,” said Ignacio Almazan, Country Manager, Spain, BHSI.

Alejandro has spent nearly 15 years in the commercial insurance industry, most of it specializing in financial lines. Before joining BHSI, he was Financial Lines Manager, Iberia & Portugal at Chubb European Group in Spain. He holds a law degree from the Universidad Complutense in Madrid.

Silvia comes to BHSI with 15 years of experience in operations, legal and compliance in the commercial insurance industry, most recently as Operations Director for RSA in Spain. Silvia holds a law degree from the Universidad Complutense in Madrid.

Alejandro and Silvia are based in BHSI’s office in Madrid.

© 2020 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.

McLane Promotes Jeff Hayes to VP of Sales and Business Development of McLane Foodservice

(BRK.A), (BRK.B)

Berkshire Hathaway’s McLane Company, Inc., a leading supply chain services company providing grocery and foodservice solutions, announced that Jeff Hayes has been promoted to vice president of sales and business development of McLane Foodservice.

Hayes is responsible for leading the business development and customer relationship management of the entire McLane Foodservice portfolio of 33 leading restaurant brands. In this role, Hayes will ensure alignment with the needs of strategic partners and seek to enable the growth potential for McLane Foodservice and its customers.

“Jeff Hayes is a proven leader who values relationships and partnerships with our customers,” says Susan Adzick, executive vice president and chief operating officer of McLane Foodservice. “He is a strategic thinker who will continue to grow the McLane Foodservice brand, and he will champion the culture that remains at the core of our success.”

Hayes has been with McLane Foodservice for more than 26 years, holding various roles within the finance and national accounts teams. Most recently, he served as vice president of national accounts and was responsible for many collaborative relationships with strategic partners.

Prior to joining McLane Foodservice, Hayes held financial management roles in both the software and business network industries. He began his distribution career with PepsiCo Food Systems as part of the finance team, and he progressed through roles of increasing scope after transitioning to the national accounts team. Hayes holds an undergraduate degree in finance and MBA from the University of Louisville.

“It’s an exciting time to move into this role and to build upon all the great work the team has done in recent years,” says Hayes. “I believe McLane Foodservice is well-positioned to support the needs of our customers today, as well as be the strategic partner they expect in the future.”

© 2020 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 Receives Record-Breaking Bus Order for Los Angeles

(BRK.A), (BRK.B)

Los Angeles mayor Eric Garcetti has announced that the Los Angeles Department of Transportation (LADOT) placed the largest single order for electric buses in U.S. history.

The order is for 134 BYD electric buses to be manufactured at BYD’s plant in Lancaster, California.

“The clean transportation revolution is not a distant dream — it’s happening on L.A.’s streets right now,” said Los Angeles Mayor Eric Garcetti, who spoke to dozens of LA reporters and city workers after quietly arriving at the Department of Transportation in a 30-foot battery-electric BYD K7M.

“Seeing these zero-emission buses rolling down our roads in the years ahead will bring us one step closer to realizing our vision of cleaner air, lower emissions, healthier communities, and a more sustainable future for all Angelenos,” Garcetti said as he stood in front of two of the four BYD buses that have already been delivered to the city. In all, Los Angeles will have 134 BYD buses, Garcetti said.

The record-breaking order helps advance the core goals of Mayor Garcetti’s recently signed Executive Directive — “L.A.’s Green New Deal: Leading By Example” — which includes measures to make LADOT’s bus fleet entirely emissions-free in time for the opening ceremonies of the 2028 Olympic and Paralympic Games.

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.

© 2020 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 Operating Results For Q4 2019 & Full Year 2019

(BRK.A), (BRK.B)

Berkshire’s operating results for the fourth quarter and full year of 2019 and 2018 are summarized in the following paragraphs. However, we urge investors and reporters to read our 2019 Annual Report, which has been posted at www.berkshirehathaway.comThe limited information that follows in this press release is not adequate for making an informed investment judgment.

Earnings of Berkshire Hathaway Inc. and its consolidated subsidiaries for the fourth quarter and full year of 2019 and 2018 are summarized below. Earnings are stated on an after-tax basis. (Dollar amounts are in millions, except for per share amounts).

Fourth Quarter

Full Year

2019

2018

2019

2018

Net earnings (loss) attributable to Berkshire shareholders

$

29,159

$

(25,392

)

$

81,417

$

4,021

Net earnings (loss) includes:

Investment and derivative gains (losses) –

Investments (1)

$

24,527

$

(27,613

)

$

56,272

$

(17,500

)

Derivatives

212

(476

)

1,173

(237

)

Impairment of intangible assets (2)

(3,023

)

(3,023

)

Operating earnings

4,420

5,720

23,972

24,781

Net earnings (loss) attributable to Berkshire shareholders

$

29,159

$

(25,392

)

$

81,417

$

4,021

Net earnings per average equivalent Class A Share

$

17,909

$

(15,467

)

$

49,828

$

2,446

Net earnings per average equivalent Class B Share

$

11.94

$

(10.31

)

$

33.22

$

1.63

Average equivalent Class A shares outstanding

1,628,138

1,641,648

1,633,946

1,643,795

Average equivalent Class B shares outstanding

2,442,207,505

2,462,471,575

2,450,919,020

2,465,692,368

(1) Due to a change in Generally Accepted Accounting Principles (“GAAP”) in 2018, we are required to include the changes in unrealized gains/losses of our equity security investments as a component of investment gains/losses in our earnings statements. In the table above, investment gains/losses in 2019 include gains of approximately $23.6 billion in the fourth quarter and approximately $53.7 billion for the full year and in 2018 include losses of approximately $28.1 billion in the fourth quarter and approximately $20.6 billion for the full year due to changes during the fourth quarter and for the full year in the unrealized gains that existed in our equity security investment holdings. Investment gains/losses also include after-tax realized gains on sales of investments of approximately $1.0 billion and $0.8 billion during the fourth quarters of 2019 and 2018, respectively, and gains of approximately $2.6 billion and $3.1 billion for the full year of 2019 and 2018, respectively.

The amount of investment gains/losses in any given quarter is usually meaningless and delivers figures for net earnings per share that can be extremely misleading to investors who have little or no knowledge of accounting rules.

(2) Attributable primarily to Berkshire’s equity interest in Kraft Heinz. The comparable amount in 2019 is approximately $435 million and it is included in operating earnings.

An analysis of Berkshire’s operating earnings follows (dollar amounts are in millions).

Fourth Quarter

Full Year

2019

2018

2019

2018

Insurance-underwriting

$

(857

)

$

(225

)

$

325

$

1,566

Insurance-investment income

1,443

1,161

5,530

4,554

Railroad, utilities and energy

1,874

1,736

8,321

7,840

Other businesses

2,230

2,339

9,372

9,364

Other

(270

)

709

424

1,457

Operating earnings

$

4,420

$

5,720

$

23,972

$

24,781

At December 31, 2019, insurance float (the net liabilities we assume under insurance contracts) was approximately $129 billion at December 31, 2019, an increase of $6 billion since yearend 2018.

Use of Non-GAAP Financial Measures

This press release includes certain non-GAAP financial measures. The reconciliations of such measures to the most comparable GAAP figures in accordance with Regulation G are included herein.

Berkshire presents its results in the way it believes will be most meaningful and useful, as well as most transparent, to the investing public and others who use Berkshire’s financial information. That presentation includes the use of certain non-GAAP financial measures. In addition to the GAAP presentations of net earnings, Berkshire shows operating earnings defined as net earnings exclusive of investment and derivative gains/losses.

Although the investment of insurance and reinsurance premiums to generate investment income and investment gains or losses is an integral part of Berkshire’s operations, the generation of investment gains or losses is independent of the insurance underwriting process. Moreover, as previously described, under applicable GAAP accounting requirements, we are now required to include the changes in unrealized gains/losses of our equity security investments as a component of investment gains/losses in our periodic earnings statements. In sum, investment gains/losses for any particular period are not indicative of quarterly business performance.

About Berkshire

Berkshire Hathaway and its subsidiaries engage in diverse business activities including insurance and reinsurance, utilities and energy, freight rail transportation, manufacturing, retailing and services. Common stock of the company is listed on the New York Stock Exchange, trading symbols BRK.A and BRK.B.

Cautionary Statement

Certain statements contained in this press release are “forward looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not guaranties of future performance and actual results may differ materially from those forecasted.

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 Buses to Make West London’s Route 94 Fully Electric

(BRK.A), (BRK.B)

BYD Europe and Alexander Dennis Limited (ADL) have jointly announced that one of West London’s best-known bus services, route 94, is going fully electric with the delivery of 29 pure electric, 100% emissions-free BYD ADL Enviro400EV double decks.

The vehicles go into service this week with operator London United – a subsidiary of RATP Dev. BYD is a global leader in batteries, energy management and electric mobility, while ADL, the UK’s best-selling bus manufacturer, is a subsidiary of leading independent global bus manufacturer NFI Group Inc. (NFI).

Route 94 provides a 24-hour service for West London residents, from Acton Green to Piccadilly Circus via Westfield, Notting Hill and Oxford Street. With an overall 67-seat capacity (24 in lower saloon, 43 in upper saloon), the 10.9-metre BYD ADL Enviro400EV achieves up to 160 miles on a single charge.

Power is delivered through BYD’s pure-electric drivetrain comprising the electric motor and 382 kWh Iron-Phosphate batteries. Double deck bodywork from ADL features a striking glazed staircase, long wheelchair bay and an automatic wheelchair ramp at the rear doors.

This latest delivery from the BYD ADL Partnerships sees the total number of its electric buses in service climb to 269, including 200 BYD ADL Enviro200EV single decks. The new vehicle are also fitted with the new Acoustic Vehicle Alerting System which generates sound at speeds below 12mph to alert pedestrians and vulnerable road users.

Speaking at a launch event, Catherine Chardon, Managing Director of RATP Dev London, said, “These new buses will support TfL and London’s strategy for a greener city. It is the second step in our garage network electrification strategy”. Mehdi Sinaceur, Chairman of RATP Dev UK at RATP Dev, added, “Electrification is one of the key transformations that RATP Dev is helping our London companies with, leveraging our Group experience”.

“Today, we have 234 BYD ADL electric buses operating in the capital – we’re delivering a cleaner London,” said Frank Thorpe, Managing Director at BYD (UK), “RATP Dev is one of the city’s main Transport for London operators, and a 29-vehicle delivery is not only a ringing endorsement for emissions-free mobility for the people of London, but also for the BYD ADL partnership and its combination of world-renowned electro-mobility technology and British manufacturing ingenuity.”

ADL Chief Executive, Colin Robertson, said: “RATP Dev’s route 94 is the second double decker route in London to go electric with the BYD ADL Enviro400EV, with more to follow this year. Red double decker buses keep London moving, and having already supplied hybrid buses to the capital since 2008, ADL is delighted to be a leading partner in their transformation to zero emissions.”

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.

© 2020 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 Names Daniel Weinmann Head Customer & Broker Engagement in Germany

(BRK.A), (BRK.B)

Berkshire Hathaway Specialty Insurance (BHSI) is expanding its European team, naming Daniel Weinmann as Head of Customer & Broker Engagement in Germany.

“With our broad range of products, financial strength and excellent service, BHSI brings a strong value proposition to the European marketplace,” said Andreas Krause, Country Manager for Germany, BHSI. “We are pleased to have Daniel, with his extensive experience and industry knowledge, delivering this value and expanding BHSI’s relationships with customers as well as global and domestic brokers in Germany.”

Daniel comes to BHSI with more than 20 years of insurance industry experience. He was most recently Head of Sales, Germany, for Swiss Re Corporate Solutions. Prior to that, Daniel was head of General Aviation & Aerospace EMEA and worked on the Broker side as well, as Head of Casualty at Marsh in Munich. He received his bachelor’s degree in Business Administration from the German Insurance Academy.

Daniel is based in BHSI’s office in Munich.

© 2020 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 Announces Its Newest Logistics Center

(BRK.A), (BRK.B)

BNSF Railway Company (BNSF) has announced its newest logistics center, Logistics Center North Houston at Cleveland. Once completed, the rail-served development is designed to help businesses increase their reach and speed to the densely-populated Houston market and surrounding area. As with other BNSF Logistics Centers, customers locating at North Houston can save nine months or more of development time and expense.

“The reality of a BNSF Logistics Center is a game changer for Cleveland’s industrial future,” said Mayor Otis Cohn. “Cleveland is perfectly poised for such a development as it is a vital and important link in our national transportation system. Cleveland lends itself to transportation services, located strategically as it is, but it took a company like BNSF to see and realize that potential.”

Logistics Center North Houston at Cleveland addresses the needs of the ever-growing Houston market. Located next to I-69 and State Highway 105, the site provides unrestricted access to the Greater Houston area. With more than 1,100 total acres, the business park is capable of handling multiple commodities offering a rail-served site that is customizable to fit the needs of customers. The facility features more than 20 new customer sites and has the ability to serve both manifest mixed freight and unit train single commodity customers.

“BNSF’s Economic Development team strategically selects logistics center locations for the convergence of rail and road at underserved, key growing markets,” said Colby Tanner, assistant vice president, economic development. “When our customers utilize the knowledge and expertise of our economic development team, they can expect to save significant time and money when locating their facilities at these prime locations, such as the Greater Houston area.”

BNSF Logistics Centers focus on offering direct rail service in multi-customer, multi-commodity business parks. BNSF invests directly in the development of the facility to create sites in under-served, strategic, end-user markets. These facilities can service carload, unit train customers or both.

© 2020 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 Files Federal RICO Lawsuit in California Against Glass Repairer

(BRK.A), (BRK.B)

Following several lawsuits in Arizona and Florida, GEICO has filed a federal lawsuit in California alleging an auto glass repair shop submitted fraudulent glass repair bills. GEICO seeks to recover damages alleging violations of the Civil RICO statute and the California Business and Professional Code as well as claims for common law fraud and unjust enrichment.

GEICO alleges that owners Tal Elzari and Navid Vatankhahan used their business, Winaffix Auto Glass, in a fraudulent scheme to overbill for windshield glass replacement.

Their alleged scheme involved creating false glass invoices designed to mimic those from legitimate car dealerships in order to fraudulently claim they were using expensive original equipment glass rather than less expensive alternative glass. In fact, it is alleged that Winaffix never purchased the glass their invoices claimed. They are also alleged to have performed glass replacement services without a license to do so.

GEICO says it intends to file future lawsuits in California and around the country in its continuing efforts to protect its customers and the public from fraudulent glass repair operators.

“GEICO is committed to protecting our customers from the negative effect that insurance fraud has on premiums,” said James Jones, assistant vice president of claims in GEICO’s Poway, California, office. “These incidents of fraud hurt consumers in California because they cause premiums to increase, and we will continue to pursue them with a zero tolerance.”

© 2020 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 Building Two-Megawatt Solar Energy Storage Project

BRK.A), (BRK.B)

Construction has begun on a two-megawatt solar and two-megawatt hour energy storage project developed by BYD (Build Your Dreams) and Apparent, Inc. at BYD’s Lancaster Coach & Bus manufacturing plant.

With this installation in place, the project will serve as a way to cut operational costs and offer a more sustainable energy solution for BYD. The site will give BYD the ability to maintain optimum power levels for manufacturing, while also generating renewable energy on-site. Powering the Lancaster plant is the first project that is a part of BYD’s and Apparent’s partnership to help deploy more efficient clean energy in Antelope Valley.

“This project showcases BYD’s commitment to a total green ecosystem with the ability to generate, store, and use zero-emission energy to power buildings as well as zero-emission vehicles,” said BYD North America President Stella Li. “BYD is the only company that can provide complete, affordable solutions.”

BYD selected Novato, California based Apparent, Inc. to design the solar+storage system based on Apparent’s intelligent grid Operating System (igOS™) hosted on SG424U micro-inverters. The software+hardware platform will manage real and reactive power produced by the system, communicating and controlling individual energy signatures to meet demand in parallel with the grid. BYD Coach & Bus will buy power from the system under a 25-year agreement once the project is completed this spring.

Apparent’s igOS™ is the key to unlocking an integrated total green solution – the sophisticated, real-time software identifies and signals to BYD’s battery system to charge during times of low demand and discharge during peak times. The project is estimated to allow BYD Coach & Bus to save over $100,000/annually in energy with the same upfront costs.

“We are very pleased to work with BYD to offer more intelligent energy solutions,” said Apparent President Jacqueline DeSouza. “Our energy platform offers dynamic real and reactive power production and sub-second communications and control — features no other clean energy solution can provide. The result is more efficient and environmentally-friendly energy production at lower costs.”

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.

© 2020 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’s Brooks Sports Sues Clothier Brooks Brothers

(BRK.A), (BRK.B)

Berkshire Hathaway’s Brooks Sports, Inc., a footwear, apparel and accessories company headquartered in Seattle, has filed a lawsuit against Brooks Brothers Group, Inc. in federal court for breach of contract, unfair competition and trademark infringement.

The lawsuit seeks to stop Brooks Brothers from using Brooks’ famous BROOKS trademark on its stores and products and prevent public confusion and dilution of the BROOKS mark by Brooks Brothers.
Brooks also seeks damages for Brooks Brothers’ unfair competition and breach of contract.

The two companies have coexisted for more than 100 years without consumer confusion due to their distinct product lines and trademarks. Brooks is known for athletic-inspired innovative footwear, apparel and accessories under its famous BROOKS mark while Brooks Brothers makes ready-to-wear fashion apparel and tailored business and formal wear under its BROOKS BROTHERS mark. To support this distinction, there is a coexistence trademark agreement between Brooks and Brooks Brothers dating back to 1980.

Brooks Brothers recently attempted to block Brooks from obtaining registrations for its BROOKS trademark in the United States and other countries, despite decades of unopposed use. Additionally, on December 30, 2019, Brooks Brothers filed new trademark applications to use BROOKS alone, without the word BROTHERS, on eight categories of goods, including clothing, sporting goods and accessories for athletics. Brooks Brothers is also marketing “athletic” footwear and “sneakers,” which are among the items on which Brooks Brothers seeks to use the BROOKS trademarks.

“For more than 100 years we’ve built a brand that consumers worldwide recognize and trust,” said Jim Weber, Brooks CEO. “We will aggressively protect our intellectual property and defend the investment that’s created our valuable brand.”

© 2020 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.