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Lubrizol

Lubrizol and Prince Pipes Collaborate to Deliver Clean Water Through FlowGuard® Plus CPVC Plumbing Systems in India

(BRK.A), (BRK.B)

Berkshire Hathaway’s Lubrizol Advanced Materials, Inc., inventors and the largest manufacturers of CPVC compound worldwide, and Prince Pipes and Fittings Ltd., announced today, the signing of a FlowGuard® CPVC Processor agreement for the manufacturing and sale of Prince FlowGuard® Plus CPVC (Chlorinated polyvinyl chloride) pipes and fittings in India.

FlowGuard Plus products will be available from Prince Pipes and Fittings Ltd. in India starting in September.

“Lubrizol is dedicated to supplying the highest quality CPVC compounds to service hot & cold water plumbing markets in India. This partnership with Prince Pipes and Fittings Ltd. will further strengthen FlowGuard Plus’ commitment to enabling clean water supply to millions of citizens in India through Prince Pipes’ robust distribution network and strategically located manufacturing facilities across India,” explains Vince Misiti, General Manager – TempRite® Engineered Polymers.

FlowGuard Plus has been part of Indian homes and buildings for more than two decades. Our commitment remains persistent with the support of our licensee partners, who continue to benefit from Lubrizol’s decades of understanding the Global plumbing market and its expertise in CPVC manufacturing. India’s plumbers, engineers, builders and consultants have been reassured by FlowGuard Plus’ higher performance which meets global standards and ensures peace of mind for consumers.

Commenting on the collaboration Mr. Parag Chheda, Executive Director of Prince Pipes and Fittings Limited, said, “Our association with Lubrizol significantly expands our capabilities and strengthens our agility in the market place. Prince Pipes’ robust distribution network combined with Lubrizol’s brand equity is set to create strong and sustainable partnership in Indian piping industry. We understand India’s evolving needs and committed to leveraging new technologies to offer home owners, consultants and builders the advantage of a preferred global brand and best-in-class product.”

© 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.

Categories
Appointments Insurance

MedPro Group Appoints Rhonda Buege President of International Division

(BRK.A), (BRK.B)

Berkshire Hathaway’s MedPro Group, a global healthcare liability insurer, has appointed Rhonda Buege as President, MedPro International, effective October 19, 2020.

Based in London, Buege will lead MedPro’s efforts outside the United States to expand its growing global healthcare liability business on both company and Lloyd’s paper.

“Rhonda is a terrific addition to our existing MedPro International team, and will help bring our industry-leading solutions and service to even more healthcare providers outside the USA,” said Tim Kenesey, MedPro Group CEO. “She is a recognized leader in the London insurance market, and her experience and customer focus have earned the respect of clients, distribution partners and competitors.”

“I am absolutely delighted to join MedPro,” said Buege. “The opportunity to join the leadership team of a company focused on the healthcare sector is really exciting. I also look forward to becoming part of the larger Berkshire Hathaway family of companies, especially with its financial strength, long-term outlook, and focus on integrity.”

Before assuming her new leadership role at MedPro, Buege held a series of increasingly significant underwriting and management positions with a global insurance carrier. Working in London since 2007, she has focused on healthcare and life sciences throughout her insurance career of more than two decades.

© 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.

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Appointments Berkshire Hathaway Specialty Insurance Insurance

Berkshire Hathaway Specialty Insurance Appoints Dr. Carsten Keune as Head of Executive & Professional Lines in Germany

(BRK.A), (BRK.B)

Berkshire Hathaway Specialty Insurance has appointed Dr. Carsten Keune as Head of Executive & Professional Lines in Germany.

“Carsten comes to BHSI with decades of experience in the global insurance industry. Under his leadership, we look forward to expanding our Executive & Professional Lines portfolio and our team, and bringing more customers across Germany BHSI’s broad range of financial lines solutions, backed by our financial strength and excellent service,” said Andreas Krause, Country Manager, Germany, BHSI.

Carsten has more than twenty years of industry experience. He was most recently Head of Global Commercial Lines Underwriting at ERGO. Before that, he was Underwriting Director Europe, Middle East and Africa at XL Catlin in Germany. He holds a law degree from Rheinische Friedrich-Wilhelms-Universität in Bonn.

BHSI in Germany offers a wide range of insurance solutions for Financial Lines Business including Commercial D&O and Public Offering of Securities Insurance (POSI), Financial Institutions D&O and Professional Indemnity, and adjacent lines of business to corporate customers in Germany, Switzerland and Austria.

© 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.

Categories
Johns Manville

Johns Manville Announces E3 Pallet Technology

(BRK.A), (BRK.B)

Berkshire Hathaway’s Johns Manville has announced the release of an innovative, new shipping pallet technology called the E3 Pallet™. The new E3 Pallet is a large pallet, designed to be cut into smaller, more functional pallet sizes for easy repurposing or recycling in warehouses.

E3 Pallets™ are manufactured in 4×8’ or 4×10’ pallet sizes. Historically, pallets this large are very costly to recycle or dispose of, and many businesses are unable to reuse them because of their atypical size. Unlike typical large pallets, the E3 Pallets™ can be easily broken down into smaller sizes using a hand-held circular saw. The 4×8’ pallet is designed to be cut into two, 48×48” pallets, and the 4×10’ pallet is designed to be cut into three, 40×48” pallets, allowing JM customers to either reuse the pallets in their warehouse or recycle the pallets more economically – ultimately decreasing waste at their facilities.

“We named our new technology the E3 Pallet™ because it is efficient, economical, and, since it reduces waste, it is environmentally-friendly,” said Brennan Hall, JM’s Senior HVAC Product Manager. “For years, we have heard from our customers and distributors that large, 4×8’ and 4×10’ pallets are incredibly expensive to scrap or recycle, and they lack functionality for warehouse reuse. We wanted to offer a solution that can be either more functional for reuse in warehouses or more economically recycled, depending on the customer’s needs. Ultimately, this allows us to offer a more sustainable solution to the industry as a whole. The E3 Pallet™ has the potential to reduce waste all the way to the contractor level.”

E3 Pallet™ Technology can ship anywhere in the U.S. and Canada. Beginning on Aug. 18, 2020, the following products will be shipped using E3 Pallets:

– Micro-Aire® Duct Board Products
– SuperDuct® RC Duct Board
– Spiracoustic Plus® Duct Liner
– Linacoustic® R-300 Duct Liner
– Diffuser Board
– Fitting Fab Board

© 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.

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Minority Stock Positions Stock Portfolio

BYD Delivers More Electric Buses to Kansas City International Airport

(BRK.A), (BRK.B)

BYD has delivered three more American-built K7M buses to the Kansas City International Airport (KCI), which (by the way) was the first in the nation to use battery-electric buses for its passengers and visitors.

The 30-foot K7M buses will serve as parking lot shuttles, bringing passengers to the airport terminals. The buses will join four other K7Ms at KCI.

Members of the Sheet Metal Air, Rail and Transportation Workers (SMART) Union, Local 105, built the buses and the rest of KCI’s electric fleet at BYD Coach and Bus in Lancaster, California, USA.

“We’re honored that the forward-thinking leaders of KCI have once again chosen BYD buses to serve its passengers,” said Patrick Duan, BYD Vice President North America. These battery-electric buses will help keep Kansas City’s air clean, lower the airport’s operating costs and at the same time provide customers with a quiet, comfort ride.”

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, as Berkshire’s original investment of $230 million has grown in value almost twenty-fold.

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 BYD, 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 Global Investments to Support Growth in Surface Protection and Paint Protection Films

(BRK.A), (BRK.B)

To support rapid growth in surface protection applications, Berkshire Hathaway’s Lubrizol has made a variety of investments in its thermoplastic polyurethane (TPU) business globally. These investments extend the company’s capabilities in surface protection and paint protection film (PPF), providing additional benefit to PPF manufacturers, brand owners and their supply chains.

PPFs are used to maintain the long-lasting beauty of vehicle surfaces. With more than 30 years of proven experience, Lubrizol’s ESTANE® TPU is recognized as the benchmark material for performance in PPF, a reputation carefully developed through years of strategic investments in capacity, acquisitions and technology innovation.
The company’s most recent investments include:

• TPU capacity expansion through state-of-the-art manufacturing and processing technology at its Montmelo, Spain facility to serve growing demand

• Application resources and testing capabilities in its Brecksville, Ohio; Montmelo, Spain and Songjiang, China technical centers to develop the next-generation innovations

• Expansion of its consumer and market insights platform to stay ahead of the evolving needs in PPF and other surface protection end uses

This integrated combination of investments uniquely positions Lubrizol to collaborate with customers and partners across the value chain to support their growth and accelerate speed to market with new product innovations, while providing additional security of supply across the globe.

This focused growth also supports the company’s recent launch of its “Made with ESTANE TPU” branding initiative, designed to promote alignment with PPF brand owners to help them specify Lubrizol’s ESTANE TPU material in their products, bringing the assurance of quality and reliability expected by their installers and end-use customers.

“Our strategic focus is on markets and applications where we can deliver value-added solutions to our customers, while helping the industry advance,” says Viviana Wilson, Director of Global Industrial Marketing, Lubrizol. “This, in turn, fuels our investment in technology, market and applications know-how, and manufacturing.”

“We’re at our best collaborating with customers across the value chain. We aim to create smarter, and this investment in TPU capacity, testing and process technology enables us to do more, and more quickly, to meet the growing demands of this dynamic market. All of this is backed by reliable, world-class manufacturing and strong technical centers, close to our customers,” states Gabe Rhoads, General Manager, Lubrizol Engineered Polymers.

© 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.

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Minority Stock Positions Stock Portfolio

First BYD E-Bus Delivered to Germany

(BRK.A), (BRK.B)

Chinese battery and vehicle manufacturer BYD has delivered the first of 22 pure electric buses ordered by German public transport operator Bogestra.

The BYD e-bus exported to German is 12 meters long and has a maximum passenger capacity of 80 people. It also has an over-200-km mileage on a single charge.

The Chinese automaker received Bogestra’s order in last September. The rest of the buses are expected to be delivered by October and serve in cities including Bochum and Gelsenkirchen in Ruhr region, Germany.

He Yipeng, general manager of BYD Europe, said the entry into the German market indicates recognition of BYD’s technology and products by the local government and the public transport operator.

According to BYD, it has sold its pure electric buses to more than 300 cities in over 50 countries and regions.

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.

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 BYD, and this article is not a recommendation on whether to buy or sell a 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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Financial Reports

Berkshire Hathaway Second Quarter 2020 Earnings

(BRK.A), (BRK.B)

 

Earnings of Berkshire Hathaway Inc. and its consolidated subsidiaries for the second quarter and first six months of 2020 and 2019 are summarized below. Earnings are stated on an after-tax basis. (Dollar amounts are in millions, except for per share amounts).

Second Quarter

First Six Months

2020

2019

2020

2019

Net earnings (loss) attributable to Berkshire shareholders

$

26,295

$

14,073

$

(23,451

)

$

35,734

Net earnings (loss) includes:

Investment and derivative gains/losses –

Investments(1)

31,017

7,766

(23,500

)

23,264

Derivatives

628

168

(472

)

776

31,645

7,934

(23,972

)

24,040

Impairments of intangible assets(2)

(10,863

)

—

(10,902

)

—

Operating earnings

5,513

6,139

11,423

11,694

Net earnings (loss) attributable to Berkshire shareholders

$

26,295

$

14,073

$

(23,451

)

$

35,734

Net earnings (loss) per average equivalent Class A Share

$

16,314

$

8,608

$

(14,500

)

$

21,824

Net earnings (loss) per average equivalent Class B Share.

$

10.88

$

5.74

$

(9.67

)

$

14.55

Average equivalent Class A shares outstanding

1,611,760

1,634,962

1,617,325

1,637,378

Average equivalent Class B shares outstanding

2,417,640,311

2,452,442,401

2,425,986,839

2,456,067,007

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

(1) Generally Accepted Accounting Principles (“GAAP”) require that we 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 2020 include a gain of $34.5 billion in the second quarter and a loss of $19.7 billion in the first six months and in 2019 include a gain of $7.1 billion in the second quarter and $22.2 billion in the first six months due to changes during the second quarter and the first six months in the unrealized gains that existed in our equity security investment holdings. Investment gains/losses in 2020 also include after-tax realized losses on sales of investments of $3.5 billion during the second quarter and $2.6 billion during the first six months. In 2019, investment gains/losses include after-tax realized gains of $662 million during the second quarter and $1.1 billion during the first six months.

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) Includes $9.8 billion attributable to impairments of goodwill and certain identifiable intangible assets recorded in connection with Berkshire’s acquisition of Precision Castparts Corp. in 2016.

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

Second Quarter

First Six Months

2020

2019

2020

2019

Insurance-underwriting*

$

806

$

353

$

1,169

$

742

Insurance-investment income

1,368

1,366

2,754

2,603

Railroad, utilities and energy

1,764

1,945

3,515

3,803

Other businesses

1,449

2,487

3,487

4,687

Other

126

(12

)

498

(141

)

Operating earnings

$

5,513

$

6,139

$

11,423

$

11,694

* One unusual item to note occurred during the second quarter: On April 8, 2020, GEICO initiated a $2.5 billion “give-back” to policyholders with respect to policies renewed and newly issued policies during the six month period beginning on April 8, 2020. For accounting purposes, the “give-back” will be spread over the twelve month period beginning on April 8, 2020. The effect was to increase GEICO’s underwriting profits during the second quarter that will lead to less favorable results – even perhaps underwriting losses – in the third and fourth quarters. Further details are set forth in our 10-Q.

Approximately $5.1 billion was used to repurchase Berkshire shares during the second quarter bringing the six month total to $6.7 billion. At June 30, 2020, insurance float (the net liabilities we assume under insurance contracts) was approximately $131 billion, an increase of $2 billion since yearend 2019.

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 and impairments of goodwill and intangible assets.

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 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.

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 a 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
Appointments McLane

McLane Appoints New President and CEO

(BRK.A), (BRK.B)

Berkshire Hathaway’s McLane Company, Inc., a leading supply chain services company providing grocery and foodservice solutions, has announced that Tony Frankenberger has been appointed president and CEO, and that Grady Rosier will retire as president and CEO, both effective August 28, 2020.

Rosier has worked for McLane for more than 36 years and has held the title of president and CEO for the last 25 years of that time. His influence has elevated McLane to its position as a world-class leader in supply chain services for the grocery and foodservice industries.

During Rosier’s tenure, McLane has experienced significant market share growth and substantial annual revenue increases from less than $6 billion to more than $50 billion. Its grocery division expanded from convenience stores to other classes of trade, including drug stores, mass market retailers, warehouse clubs, value stores, supermarkets, and alcoholic beverage distribution. Rosier was instrumental in the sale of McLane from Walmart to Berkshire Hathaway in 2003, and he led the charge for a new foodservice division servicing QSR, fast casual, and casual restaurants that quickly became one of the largest in the industry. He has also provided an unwavering commitment to charitable organizations such as Children’s Miracle Network Hospitals and United Way.

“McLane is not just a company to me,” says Rosier. “It has been my passion, and the people at McLane are my family.”

Rosier has made an enormous impact on the supply chain industry and beyond. Prior to joining McLane, Rosier spent more than a decade in various executive roles in the convenience channel. Before that, Rosier had six years of honorable service in the United States Marine Corps and several more in the reserves. He was inducted into the Texas Business Hall of Fame in 2015, and currently serves on the board of directors of NVR, Inc. and NuStar Energy. Rosier earned his Bachelor of Arts from the University of Florida.

Tony Frankenberger will assume leadership of McLane as president and CEO on August 28, 2020, while maintaining his responsibilities as president of McLane Grocery, a $33 billion business unit providing supply chain solutions to over 70,000 retailer locations. Frankenberger has worked for McLane for more than 35 years. Shortly after he concluded his service with the United States Air Force in 1985, Frankenberger began his career with McLane as a washer, fueler, and mechanic in the transportation department and worked his way up in the company. Today, he has more than 15 years of senior management experience, including various past leadership positions in merchandising, procurement, and operations. Frankenberger holds a Bachelor of Arts and Master of Business Administration from the University of Phoenix.

“I have personally known Tony for more than 30 years and feel this is a tremendous opportunity for him to continue building the sustainability and growth of McLane into the future,” says Rosier. “He is an exceptional leader with a track record of operational excellence, building high performance teams, and extraordinary customer service.”

Frankenberger’s notable rise through the ranks and steadfast commitment to McLane’s values and beliefs pave his way to success in the new role.

“I am thrilled for Grady, and I wish him nothing but health and happiness in this new chapter of his life,” says Frankenberger. “I am honored to follow in his footsteps at an incredible company with outstanding teammates.”

© 2020 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway and BYD, and this article is not a recommendation on whether to buy or sell a 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 All-Electric Refuse Trucks to Run in New Jersey

(BRK.A), (BRK.B)

BYD all-electric refuse trucks will soon be hard at work providing zero-emission collection services to Jersey City, N.J., the first such trucks on the U.S. East Coast capable of working an entire route.

Hudson County Motors and BYD will provide five all-electric, rear-loader collection trucks to the city. The BYD trucks will go to work on normal daily collection routes previously handled by diesel-fueled trucks.

The BYD 8R is the world’s first commercially available all-electric class 8 refuse chassis that can successfully complete an entire route. The BYD 8R’s core technologies include state-of-the-art batteries, controls and motors, which are designed, tested and built by BYD as an integrated system. This allows the BYD 8R to achieve the highest levels of performance, endurance and reliability.

BYD software optimizes power and torque for superior performance in refuse collection operations. Combined with BYD’s advanced battery chemistry, the BYD 8R holds enough energy to complete an entire route with true zero-emissions.

“Jersey City will be a model for what is now possible with zero-emission refuse trucks.” says John Gerra, Sr. Director of Business Development at BYD Motors. “We look forward to helping provide clean streets and clean air for the residents of Jersey City.”

The project is supported by the New Jersey Department of Environmental Protection and Sanitation Equipment Corp. of Totowa, NJ.

Hudson County Motors is BYD’s fully authorized truck dealer for Northern New Jersey.

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.

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 BYD, and this article is not a recommendation on whether to buy or sell a 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.