Month: November 2019

Berkshire Hathaway Acquires Provider of Specialty Medical Devices

Post author By David Mazor
Post date November 4, 2019

(BRK.A), (BRK.B)

Berkshire Hathaway’s Marmon Holdings, Inc., has acquired a majority interest in the Colson Medical Companies, a global provider of specialty medical devices, from Colson Associates, Inc.

The purchase price was not disclosed.

Marmon acquired 60 percent of the Colson Medical Companies and will acquire the remaining 40 percent over the next five years.

Colson Associates was founded by the late Robert Pritzker, a long-time Chicago business and civic leader. Mr. Pritzker co-founded Marmon in 1953 and served as CEO until 2002. Upon concluding his five-decade Marmon career, he formed Colson Associates, at which time he acquired the Colson Medical Companies and other businesses from Marmon. He led Colson Associates until his passing in 2011.

Colson Medical provides highly-engineered plates, screws, and related precision tools for orthopedic surgery through its six businesses: Acumed, OsteoMed, MicroAire, Precision Edge, Apex, and Skeletal Kinetics. All but Apex and Skeletal Kinetics were acquired under Marmon between 1979 and 1999. The companies employ more than 1,300 people at locations in the U.S., China, the U.K., Spain, and Germany.

“We are excited to welcome the Colson Medical Companies back home to Marmon,” said Marmon Chairman and CEO Angelo Pantaleo. “Their innovative, proprietary products and processes and outstanding reputation make them an ideal fit for Marmon and provide our organization with another strong growth platform.”

Warren Buffett, Chairman and CEO of Berkshire Hathaway Inc., added: “We couldn’t be more pleased about Marmon’s acquisition of Colson Medical. The specialty medical device market is an attractive growth opportunity and the Colson businesses are highly regarded. Berkshire and Marmon will provide a home where these businesses can continue to flourish.”

The acquired companies will become a new sector within Marmon, led by Colson’s current President, Chris Smith.

“Our dad would be pleased to know that Colson Medical is going back home,” Karen and Linda Pritzker said in a joint statement. “Marmon shares the values and ethics on which Colson Associates was founded and we believe Colson will have the best possible future under Marmon’s ownership.”

Chicago-based Marmon Holdings is a global industrial organization comprising 10 diverse business sectors and more than 125 autonomous manufacturing and service businesses. Revenues exceeded $8.1 billion in 2018.

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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.

Tags Marmon Group

Financial Reports

Berkshire Hathaway Releases Third Quarter Results

Post author By David Mazor
Post date November 2, 2019

(BRK.A), (BRK.B)

Berkshire’s operating results for the third quarter and first nine months of 2019 and 2018 are summarized in the following paragraphs. However, we urge investors and reporters to read our 10-Q, which has been posted at www.berkshirehathaway.com. The 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 third quarter and first nine months 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).

	Third Quarter				First Nine Months
	2019		2018		2019		2018
Net earnings attributable to Berkshire shareholders	$	16,524	$	18,540	$	52,258	$	29,413
Net earnings includes:
Investment and derivative gains/losses –
Investments		8,481		11,552		31,745		10,113
Derivatives		185		108		961		239
		8,666		11,660		32,706		10,352
Operating earnings		7,858		6,880		19,552		19,061
Net earnings attributable to Berkshire shareholders	$	16,524	$	18,540	$	52,258	$	29,413

Net earnings per average equivalent Class A Share	$	10,119	$	11,280	$	31,944	$	17,885
Net earnings per average equivalent Class B Share	$	6.75	$	7.52	$	21.30	$	11.92

Average equivalent Class A shares outstanding		1,633,002		1,643,556		1,635,903		1,644,519
Average equivalent Class B shares outstanding		2,449,502,430		2,465,333,662		2,453,854,768		2,466,777,764

Note: Per share amounts for the Class B shares are 1/1,500^th of those shown for the Class A.

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 $8.0 billion in the third quarter and approximately $30.1 billion in the first nine months and in 2018 include gains of approximately $10.2 billion in the third quarter and approximately $7.5 billion in the first nine months due to changes during the third quarter and during the first nine months 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 $513 million and $995 million during the third quarters of 2019 and 2018, respectively, and gains of approximately $1.6 billion and $2.3 billion during the first nine months 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.

An analysis of Berkshire’s operating earnings follows (dollar amounts are in millions).
	Third Quarter				First Nine Months
	2019		2018		2019		2018
Insurance-underwriting	$	440	$	441	$	1,182	$	1,791
Insurance-investment income		1,484		1,239		4,087		3,393
Railroad, utilities and energy		2,644		2,484		6,447		6,104
Other businesses		2,455		2,411		7,142		7,024
Other		835		305		694		749
Operating earnings	$	7,858	$	6,880	$	19,552	$	19,061

At September 30, 2019, insurance float (the net liabilities we assume under insurance contracts) was approximately $127 billion, an increase of $4 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.

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Tags Earnings

Lubrizol

French Prosecutors Launch Investigation Into Lubrizol Fire in Rouen

Post author By David Mazor
Post date November 1, 2019

(BRK.A), (BRK.B)

French prosecutors on Tuesday launched an investigation into whether there was negligence on behalf of Berkshire Hathaway’s Lubrizol Corporation that caused the massive fire that destroyed the Lubrizol plant in Rouen, Normandy, France.

Paris prosecutor Remy Heitz released a statement that prosecutors where investing whether there was “involuntary destruction caused by fire due to an obviously deliberate breach of a security obligation”.

Fears of toxic chemical contamination from the September 27 fire are ongoing, but France’s Minister of Health previously announced that “first samples remain below the recommended thresholds of the normal environment.”

The Rouen plant was founded in 1954, and manufactured and packaged additives for lubricants and paint.

No casualties have been reported.

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Tags Lubrizol