Category: Pilot Flying J

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Acquisitions Pilot Flying J

Pilot Flying J Acquires Wellsite Services Company

(BRK.A), (BRK.B)

Berkshire Hathaway’s newest acquisition, the largest operator of travel centers in North America, Pilot Flying J, has announced that it has taken an equity interest in Equipment Transport, LLC, a wellsite services company.

In addition to its travel center business, Pilot Flying J runs the fourth-largest tanker fleet in the U.S.

Pilot’s subsidiary, PDPS LLC, which does business under the name PWT, announced the purchase of equity interests in Equipment Transport, LLC from CIVC Partners, LP.

The acquisition is one of many strategic partnerships made by Pilot Flying J this year to extend its core logistics business and grow its service offerings in the exploration and production sector.

“ET is an exceptional wellsite services platform with a strong reputation for outstanding customer service,” said Shameek Konar, chief strategy officer at Pilot Flying J. “Incorporating ET into our Oil Field Logistics platform provides comprehensive, reliable and cost-effective logistical solutions to the Oil and Gas industry. With Pilot Flying J’s fleet size, safety record, balance sheet and geographic reach across all major oil and gas basins, we hope to enhance ET’s ability to grow its customer base across multiple basins.”

CEO and founder Dave Florance and the rest of ET’s management team will continue to lead the Company as it serves its customers as a one-stop provider of reliable, safe and fully compliant services.

ET, founded in 2007, is a Carlisle, PA-based provider of critical services supporting the drilling, completions, and production programs of exploration and production companies. The Company brings significant value to its customers in the Marcellus and Utica Shales and the Permian Basin through a broad service offering that includes fluid transportation, waste management, and ancillary pad support services. Collectively, ET serves its more than 70 customers through six locations with a highly trained workforce of over 500 employees.

“Since its founding, Dave Florance and the ET management team have grown the business into a best-in-class provider of critical wellsite services, while outperforming the broader oilfield services industry and delivering exceptional organic growth,” said Keith Yamada, partner at CIVC. “We have built a strong partnership over the last six-plus years and know we’ve found the right partner in Pilot Flying J to continue to support ET’s future expansion.”

In June of this year, Pilot Flying J entered into a JV with Produced Water Transfer LLC to form PDPS, operating under the name PWT, and in July acquired Bridger Environmental Services LLC a water disposal platform and the crude transportation assets of Bridger Transportation.

Today, Pilot Flying J and its subsidiaries operate more than 500 trucks and a dozen saltwater disposal wells, providing logistics and disposal services to customers in the Permian, Eagle Ford, Marcellus and Haynesville shales as well as in Wyoming and Utah.

Berkshire Hathaway and Pilot Flying J

In October 2017, Berkshire Hathaway made a $2.76 billion investment in Pilot Travel Centers. Under the terms of the agreement, Berkshire will become the majority owner in five years.

© 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.

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Pilot Flying J

Pilot Flying J Announces 3rd Quarter Highlights

(BRK.A), (BRK.B)

As Pilot Flying J approaches its 60th anniversary, the travel center operator is celebrating the milestones of its most recent quarter.

During the third quarter of 2018, the Knoxville-based company opened six new locations in the United States and Canada, expanded in four states, paved the way for 250-plus new parking spaces, created 200-plus new jobs, opened 35 more diesel lanes and added 18 more showers.

The travel center company completed three locations under its Facility Enhancement Project, its commitment to investing nearly $500 million to renovate existing locations over the next five years.

The latest project completions occurred at:
• Pilot Travel Center in Marengo, Ohio — completed Aug. 22
• Pilot Travel Center in Van Horn, Texas — completed Sept. 7
• Pilot Travel Center in Orla, Texas — completed Sept. 10

The retailer also accrued a number of new store openings across the U.S. and Canada. Two Pilot Travel Centers opened Aug. 25 in Bartow, Fla., and Odessa, Texas, respectively; and one Flying J Travel Center opened Sept. 22 in Medicine Hat, Alberta, Canada.

In addition, Pilot Flying J took over and completed remodels at three travel centers: Pilot Travel Center in St. Rose, La., on Sept. 8; Pilot Express in Tucson, Ariz., on Aug. 24; and Pilot Travel Center in Cordes Lake, Ariz., on Sept. 7.

As of September, Pilot Flying J had 17 service centers, with another three service center locations planned to open by the end of this year in El Paso, Texas; Sioux Falls, S.D.; and Lake Township, Ohio.

The combined network of more than 750 Pilot and Flying J Travel Centers across North America serves more than 1.6 million customers daily.

In October 2017, Berkshire Hathaway made a $2.76 billion investment in Pilot Travel Centers.

Under the terms of the agreement, Berkshire will become the majority owner in five years.

© 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.

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Pilot Flying J

Pilot Flying J Names Kevin Wills New CFO

(BRK.A), (BRK.B)

Pilot Flying J, the largest operator of travel centers in North America, announced today that Kevin Wills will join the company as chief financial officer in February 2019.

”With 30-plus years in retail, professional services and utilities, Kevin has the right expertise to contribute immediately to the company’s success in a significant way,” said Ken Parent, president of Pilot Flying J. “His strong financial background will be critical to supporting our goal of being a great place to work and a great place to shop, as well as helping us deliver on making a better day for our guests.”

Wills will oversee day-to-day responsibility for planning, implementing, managing and controlling all financial-related activities. In addition, he will continue to drive financial accountability in all areas of Pilot Flying J. Some of his duties include direct responsibility for company-wide financial operations, accounting, finance, forecasting, strategic planning, deal analysis, negotiations, procurement and aviation.

“I am very excited to have the opportunity to join Pilot Flying J, a company that I have long admired,” Wills said. “It has a longstanding track record of excellence, and I am proud to join this talented team and organization.
My focus will be to identify and manage growth opportunities while helping take the company to the next level as an industry-leading travel center operator and retailer. I’m looking forward to ensuring the company’s financial success by leading data-driven decisions and metric-driven accountability.”

Wills joins Pilot Flying J from Tapestry, Inc., (NYSE: TPR), New York, where he is chief financial offer and serves on the executive committee and has responsibility for all financial operations. Prior to Tapestry Inc., he worked at AlixPartners, New York, as chief financial officer and was responsible for global financial operations. He also worked at Saks Fifth Avenue, New York, as executive vice president and chief financial officer.

Wills holds a Bachelor of Science in Business Administration from Tennessee Technological University in Cookeville, Tennessee, and is a certified public accountant. He serves on the board of directors of Tivity Inc. (NASDAQ), as chairman since November 2015.

The combined network of more than 750 Pilot and Flying J Travel Centers across North America serves more than 1.6 million customers daily.

In October 2017, Berkshire Hathaway made a $2.76 billion investment in Pilot Travel Centers.

Under the terms of the agreement, Berkshire will become the majority owner in five years.

© 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.

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Pilot Flying J

Pilot Flying J Expands in New Mexico and Florida

(BRK.A), (BRK.B)

Pilot Flying J has announced that it will open two Pilot locations in Jal, New Mexico, and Jacksonville, Florida, during November.

The locations feature amenities for area residents and the traveling public, while adding 70 truck parking spaces, approximately 100 local jobs and other economic benefits to the communities.

“We’re thrilled to serve the communities of Jal and Jacksonville with the expansion of our network this month to deliver convenience, quality, great service and added value to local residents and professional drivers traveling the nation’s highways,” said Ken Parent, president of Pilot Flying J. “Our goal at Pilot Flying J is to connect people and places with comfort, care and a smile at every stop. The addition to our footprint of two new locations will bring the best service and amenities available on the road to travelers passing through these areas.”

The new facilities will bring Pilot Flying J’s network of stores in New Mexico to 16 locations and Florida to 31 locations. Cumulatively, the new locations are expected to contribute $5.7 million annually in state and local tax revenues.

The combined network of more than 750 Pilot and Flying J Travel Centers across North America serves more than 1.6 million customers daily.

In October 2017, Berkshire Hathaway made a $2.76 billion investment in Pilot Travel Centers.

Under the terms of the agreement, Berkshire will become the majority owner in five years.

© 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.

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Pilot Flying J

Pilot Flying J Expanding

(BRK.A), (BRK.B)

One of Berkshire Hathaway’s newest acquisitions, travel center company Pilot Flying J, is adding locations.

The company will be opening three new locations in Arizona, Florida and Texas.

The new Pilot Flying J store in Tucson, Arizona, will feature nine truck parking spots, a Subway restaurant, four diesel fuel lanes, and in a nod to the emergence of electric cars, 10 Tesla charging stations.

The new Bartow, Florida, location will feature 38 truck parking spots, six diesel fuel lanes, three showers, and an Arby’s restaurant.

And the Pilot Flying J that will open in Odessa, Texas, will be the largest of all. The location will feature 93 truck parking spots, eight diesel fuel lanes, seven showers, and a Dunkin’ Donuts Express.

“We’re thrilled to serve the communities of Bartow, Odessa and Tucson with the expansion of our network this month to deliver convenience, quality, great service and added value to local residents and professional drivers traveling the nation’s highways,” Ken Parent, president of Pilot Flying J, said.

Pilot Flying J gives truck drivers access to 72,000 parking spaces at 750 Pilot and Flying J Travel Centers across North America.

In October 2017, Berkshire Hathaway made a $2.76 billion investment for a minority share in Pilot Travel Centers with the goal of becoming the majority owner in five years.

© 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.

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Berkshire Hathaway Automotive Berkshire Hathaway Energy Pilot Flying J Special Report

Special Report: Opportunities Abound for Berkshire in the Growing EV Market

(BRK.A), (BRK.B)

Everyone can see it coming, petrol, gas, diesel, whatever you want to call it, will play a diminishing role in fueling cars of the future. It’s already playing a diminishing role right now.

Let’s look at a few numbers.

In 2016, 750,000 EV cars were sold worldwide, with Norway the highest in market share at 29%, and China the largest in total units sold. And, 2016 marked the first time that EVs passed more than 2 million vehicles on the road worldwide.

While those numbers are still tiny when compared to the 2 billion vehicles in service around the world, they confirm that the EV is not only here to stay, but will play an ever larger role in personal and commercial transportation.

Credit Tesla with making the EV fashionable in the U.S., and drawing in other car makers that are now debuting their own models. In fact, Tesla has made the EV so fashionable among high-end buyers that in Europe Tesla’s Model S outsold both the traditional petrol-fueled BMW 7 series and Mercedes-Benz S class.

It’s easy to go down the list of carmakers that are showing off their EV vehicles at this year’s auto shows. Volkswagen, which was committed to diesel cars before its huge emissions scandal, is now touting its EV retro-styled concept bus, the I.D. Buzz. And Jaguar’s heading to market in late-2018 with its I-Pace SUV.

BMW, Hyundai, Nissan, Porsche, Toyota, and Volvo, to name a few, are all announcing new EV models or EV versions of existing models. Even Bentley has an all-electric four-door coupe in the works for 2019, and a goal to have an electric version of each of its models by 2025.

For drivers in China that purchased 600,000 EVs in 2017 at the lower-end of the market, it’s China’s BYD that led the way, with Chery, SAIC Wuling, Hawtai, and BAIC all moving more than 3,000 units in December 2017 alone.

The new energy company BYD, which Berkshire Hathaway has a roughly $1.9 billion stake in, sold almost 14,000 ev cars in February 2018, and is the global sales leader despite not being in the U.S. market except for its pure-electric buses.

Back in the U.S., Tesla’s Model 3 is aimed at bringing the company’s cars to a whole new set of consumers, and it’s not the only one making inroads at making an EV with true extended driving range affordable.

GM’s more mainstream price point Chevy Bolt, which boasts a 238-mile range, is now heading towards the company’s goal of moving 30,000 units a year.

All this EV progress bring up the question of what’s Berkshire Hathaway’s role in it?

It’s likely not as a manufacturer.

Berkshire’s roughly 8 percent stake in BYD, and its stake in GM, which was actually down 10 million shares (-16.7%) as of its most recent 13-F filing, doesn’t indicate Warren Buffett wants to be anything but a passive investor in making cars.

Berkshire will certainly play a role in new and used EV sales, as its Berkshire Hathaway Automotive Group of 78 independently operated dealerships with over 100 franchises in 10 states, gives the company a slice of that market.

However, fueling EVs is also right up Berkshire’s alley.

Not the Cars, the Fuel

Berkshire’s in a number of interesting spaces when it comes to fueling EVs. As the EV market-share grows, so do the number of consumers that will be charging their vehicles at home.

When it comes to home charging, its utilities, including PacifiCorp, MidAmerican Energy and NV Energy generate and supply power in twelve states. And overseas, Berkshire’s Northern Powergrid delivers electricity to 3.9 million homes and businesses in England.

Berkshire also is a big player in the electricity transmission business. Its BHE U.S. Transmission owns over a thousand miles of transmission lines in the southern U.S. and California. In Canada, Berkshire’s AltaLink is the largest regulated transmission company in Alberta, supplying electricity to more than 85% of the population.

Taking the EV on the Road

Even though much of the EV market will be charging its cars overnight at home, there is still a big need to be able to quickly charge your vehicle while traveling.

Out of necessity, Tesla has made a substantial investment in this space, to-date building 1,191 Supercharger Stations with 9,184 Superchargers.

These superchargers already benefit Berkshire in areas that get their power from Berkshire-owned utilities.

And a recent Berkshire acquisition has the potential to greatly boost their own capability in this space.

The New King of the Travel Center

In October 2017, Berkshire took a 38.6 percent equity stake in Pilot Flying J, the largest operator of travel centers in North America. That stake will grow in 2023 when Berkshire will become the majority shareholder by acquiring an additional 41.4 percent equity.

With 750 locations across the U.S. and Canada, and more than $20 billion in revenues, Pilot Flying J already plays a substantial role in fueling cars and commercial trucks. It’s also a natural fit for EV charging stations. And while EV ranges continue to grow, the need to charge your vehicle away from home is also growing.

That’s Not All

The charging station space is so new that there are likely to be multiple opportunities for Berkshire, as the lack of a need for storage tanks, which kept traditional petrol fueling stations centralized, means that charging stations can fit into public parking lots, mall and office building parking, and other spaces that were inconceivable for a gas station.

For example, in Oregon, PacifiCorp just received the greenlight to build seven charging stations as part of a $4.64 million transportation electrification plan.

PacifiCorp plans to install seven “pods” that would include multiple dual-standard direct current fast chargers, which can provide up to 80 miles of driving range in 20 minutes of charging, and at least one level 2 port, which offers up to 20 miles of range in an hour of charging.

Whether utilities will ultimately be allowed to own large networks of charging stations remains to be seen, as some environmental groups and potential competitors in the space are already objecting to that concept.

However, the future looks bright for Berkshire. It’s got the electric power, it’s got the transmission, and it’s even got the car dealerships and travel centers that clearly will make it a player in the growing EV market.

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.