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BNSF

Lithium-Ion Battery-Electric Locomotives in Development in BNSF/GE partnership

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GE and BNSF Railway Company are hoping to demonstrate a battery-powered locomotive paired with diesel locomotives in a “consist” (railroad jargon for a sequence of connected locomotives) to power a freight train along a stretch of rail in California’s Central Valley between Stockton and Barstow.

If successful, the fuel savings could have a big impact on BNSF and other railroads. And the environmental benefits could also help BNSF advance one of its major capacity-building projects.

BNSF will run the pilot program with help from GE Transportation, which is developing the locomotive. The railroad hopes to have the first locomotive running within two years.

GE notes that adding even one battery-powered locomotive to the train could reduce the consist’s total fuel consumption by up to 15 percent, according to Alan Hamilton, general manager of systems engineering at GE Transportation.

“It’s a big deal,” Hamilton says. “Fuel costs are typically the largest component in a rail operator’s costs.”

The leap to battery power is not as big of one as it may at first seem. Diesel-electric locomotives like the machines GE builds are already essentially power plants on wheels. They use a powerful diesel engine to generate the electricity that drives the electric motors that spin the wheels.

GE believes that a battery-powered locomotive is the perfect complement to its diesel-electric brethren. The battery will hold 2,400 kilowatt-hours of energy, meaning it’s able to maintain full horsepower for roughly 30 minutes on a given charge. Then the operator can decide how to use that power.

For example, the operator could slash emissions from the diesel-powered locomotives by drawing heavily on the battery to start up the train. This would be especially desirable if the train were pulling out of a city rail yard, close to populated areas. Using the battery power also cuts down on noise. The train operator may also choose to “graze” on battery power — or even recharge the battery — when the train is cruising through open landscape, saving hundreds of gallons of diesel.

Each battery locomotive also has a brain, in the form of an onboard supervisory control system. The rail operator can input data about the train’s journey into the system — such as how much weight it’s hauling, the types of locomotives in the consist, and its rout — to allow the computer to make decisions about the best way to use the battery before the train even pulls away. “The trip-optimizing software can look ahead and predict the most efficient way to generate and use that energy,” Hamilton says.

Imagine a battery-enhanced train making a 500-mile trip across sparsely populated terrain — meaning fuel economy is the name of the game. The software will calculate the optimum ratio of battery power to diesel usage for such a journey and decide on the most favorable balance for the hybrid locomotive consist. The software can then pinpoint the exact moments to draw on the battery, thus sparing diesel. GE’s flexible solution will give rail operators several new options for optimizing their network, says Dennis Peters, executive product manager at GE Transportation.

The new locomotive will use a battery cell similar to what you might find under the hood of an electric car. It is a lithium-ion energy storage unit with cells that contain a combination of nickel, manganese and cobalt. In terms of scale and packaging, however, “this train battery is a different animal,” Peters says.

A standard electric-car battery usually holds a few hundred storage cells — each around the size of a mini tablet computer. But the prototype of the new locomotive will have a battery with approximately 20,000 cells, and future versions may have as many as 50,000 cells. The cells also must be able to weather the heavy-going environment of a locomotive, with all its jolts and shocks.

To build the demonstration model, workers will strip out the engine and cooling systems from a diesel locomotive to make way for the battery under the hood. But from the outside, the battery-powered locomotive won’t look much different from its diesel counterparts.

The impact on BNSF could be huge, not only in fuel cost-savings, but if it could use battery-powered locomotives in urban areas, such as the Port of Long Beach, it might be able to overcome the opposition to its long-stalled Southern California International Gateway plan, which has been held up due to environmental concerns tied to diesel emissions.

© 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 Energy

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.

Categories
Lubrizol

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.

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NetJets

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.

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See's Candies

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.

Categories
Dairy Queen

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.

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Brooks

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.

Categories
Fruit of the Loom

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.

Categories
Fruit of the Loom

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.