Categories
Fruit of the Loom

Russell Athletic Goes Upscale with Designer Line

(BRK.A), (BRK.B)

Berkshire Hathaway’s Russell Athletic has gone upscale with a new clothing line that’s being sold at Barneys New York, and features $225 sweatshirts and $250 hoodies.

Russell Athletic is partnering with Los Angeles designer Tracey Mills, who worked for several celebrity-favorite streetwear labels before launching his Visitor On Earth line in 2016. The name represents Mills’ aim to produce fashion in harmony with the planet. Blending minimalist shapes and earth tones, the collection of T-shirts, hoodies, and pants creates a unisex uniform that defies a time or place.

Mills is well known for his work with Kanye West, co-designing his Yeezy collections.

The Russell x VOE collection is a unisex capsule featuring tracksuits, oversize sweatshirts, T-shirts and socks in washes and proportions that represent the new school take on classic Nineties old school. Prices range from $70 to $600 and most of the line features the Russell “R” logo and a Visitor on Earth Logo. The t-shirts and sweatshirts feature graphic slogans that deliver a message of positivity and empowerment, such as “Peace in the Hood,” “The World Is Yours” and “Shut Down the System.”

The messaging is key for Mills, who grew up in the foster care system in inner city of Los Angeles. He pitched collaboration to Russell, which was incidentally looking for a project that would create a bridge into the fashion/street world, with the goal of creating a collection that would not only offer something

Just last month, Fruit of the Loom’s Russell Athletic brand announced that it will cease making athletic uniforms. The move marks the end of a long history in a product line that in the last decade has seen skyrocketing marketing costs.

The designer Russell x VOE line fits with Russell Athletic’s new focus on the growing athletic and lifestyle apparel market that has athletic wear as a fashion statement apart from the gym.

Sofia Richie, Justin Bieber, and Bella Hadid are some of the celebrities that have been spotted wearing the new clothing line.

© 2017 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
Berkadia

Berkadia Announces $41 Million in Financing for Multifamily Property in New Jersey

(BRK.A), (BRK.B)

Berkadia, Berkshire Hathaway’s joint venture with Leucadia National Corporation, has announced the financing of a $41 million first mortgage for The Woods at Blue Heron Pines, a multifamily community in Galloway Township, New Jersey. Managing Director Jim Badolato and Senior Analyst Patti Henne of Berkadia’s Philadelphia office structured the financing through the firm’s partnership with Freddie Mac. The borrower is an entity controlled by DiLucia Management, a Pennsylvania-based management company.

Utilized to refinance a maturing loan, the new 10-year financing carries a sub-4 percent fixed interest rate and five years of interest only.

“DiLucia’s long-term commitment to the asset and its residents is evident, making this an ideal lending opportunity for Berkadia,” said Badolato. “Freddie Mac understood the fundamental strengths of the property and location. Despite proximity to Atlantic City, there is a diverse base of employment drivers and a limited supply of quality rental housing in the area. Major employers within five miles of the property include AtlantiCare’s headquarters, AtlantiCare Regional Medical Center, Stockton University, Atlantic City Airport and the Federal Aviation Administration William J. Hughes Technical Center, which employs over 2,500 people.”

The Woods at Blue Heron Pines is located at Bally Bunion Drive, affording convenient access to the Atlantic City Expressway and the Garden State Parkway. The Class A community has 330 units on over 58 acres with views of Ron Jaworski’s Blue Heron Pines Golf Club. The property features large floorplans averaging 1,458 square feet, each with a private garage. Developed by DiLucia in 2001, the asset is in excellent condition and has consistently performed at over 95 percent occupancy.

About Berkadia

Founded in 2009 as a 50/50 joint venture between Berkshire Hathaway and Leucadia National Corporation, Berkadia is a third-party commercial mortgage servicer, as well as an approved lender for Fannie Mae, Freddie Mac, and HUD/FHA.

The company is among the top Freddie Mac and Fannie Mae multifamily lenders.

Berkadia owes its origins to GMAC Commercial Mortgage Corporation, which was acquired in 2009 by Kohlberg Kravis Roberts & Co., Five Mile Capital Partners LLC, and Goldman Sachs Capital Partners. Christened Capmark Financial, the company had $10 billion of originations in 2008 and a servicing portfolio of more than $360 billion before running into bankruptcy in October 2009.

In a deal approved by the bankruptcy court, Capmark sold its mortgage loan and servicing to the newly formed Berkadia in a deal worth $515 million.

The deal brought Berkshire into the heart of the commercial loan serving business, and the company has one of the largest commercial real estate servicing portfolios.

© 2017 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
McLane

McLane Company Lands Kum & Go Convenience Stores

(BRK.A), (BRK.B)

McLane Company Inc., a Berkshire Hathaway-owned supply chain services company, has announced that Kum & Go, one of the nation’s most respected convenience retailers, has reached an agreement for McLane Company to serve as its grocery wholesaler effective in the second quarter of 2018.

Established in Hampton, Iowa, in 1959, Kum & Go has grown to employ more than 5,000 associates in more than 400 stores in 11 states (Iowa, Arkansas, Colorado, Minnesota, Missouri, Montana, Nebraska, North Dakota, Oklahoma, South Dakota and Wyoming).

“McLane’s commitment to technology and operational excellence will be critical as we work together to develop and implement solutions benefitting our customers and associates,” said Chris Jones, senior vice president of marketing at Kum & Go.

Under the multi-year agreement, McLane will begin servicing all Kum & Go stores in early spring of 2018. Kum & Go LC manages and operates more than 400 stores across 11 states.

“Kum & Go is an organization focused on bringing the best product offerings and innovation to its stores so its associates can deliver more than their customers expect. Kum & Go, like McLane, understands the value teamwork brings to the success of a company. On behalf of all the teammates of McLane Company, we are honored to be chosen to not only service Kum & Go, but to work hand-in-hand and implement solutions that bring great value to both organizations,” said Tony Frankenberger, president of McLane Grocery.

© 2017 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
Forest River

Forest River Riding Wave of Record Industry-Wide RV Sales

(BRK.A), (BRK.B)

Berkshire Hathaway’s recreational vehicle maker Forest River is benefiting from industry-wide record sales for recreational vehicles.

After slumping during the Great Recession, sales are now hitting new highs as Millennials have embraced RVs as a popular vacation alternative to hotel and motel lodging.

According to the Recreational Vehicle Industry Association’s September survey of manufacturers, RV wholesale shipments finished at 43,598 units, an increase of 29.4% over the 33,704 units shipped last September. September 2017 shipments are the best September on comparable record.

RV wholesale shipments have climbed to 378,006 units through nine months of 2017, up 16.6% over the 324,286 units shipped during the same period last year.

All towable RVs, led by conventional travel trailers, totaled 38,543 units for the month, an increase of 31.8% compared to the 29,233 units shipped in September 2016. Year-to-date totals for towable RVs are up 17% to 330,673 units.

September motorhome shipments are up 13.1% to 5,055 units over last year; paced by solid gains in Type C motorhomes. Year-to-date motorhome shipments have reached 47,333 units on 13.8% growth over the 41,599 units shipped during the same time last year.

Forest River is working hard at increasing its capacity, with facility expansions at its plants in the Indiana cities of LaGrange and Butler.

The company will spend $2.9 million to build a 100,000-square-foot facility in Butler, and will employ 150 workers when it is completed.

© 2017 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
Berkshire Hathaway Specialty Insurance Insurance

Berkshire Hathaway Specialty Insurance Offers Network Security & Privacy Liability Insurance in Canada

(BRK.A), (BRK.B)

Berkshire Hathaway Specialty Insurance has unveiled the Professional First Network Security & Privacy Liability Policy in Canada, a solution that combines cyber liability and breach response coverage with risk management resources for commercial enterprises and financial institutions.

“Our new policy simplifies the complex endeavor of managing cyber exposures for both our business partners and our customers,” said Michael Densham, SVP, Executive & Professional Lines, BHSI Canada. “We are excited to round out our Executive and Professional Lines offerings with this flexible cyber solution, backed by BHSI’s commitment to service and unparalleled financial strength.”

The Professional First Network Security & Privacy Liability Policy is designed to deliver multi-faceted coverage and crisis management services for large commercial enterprises and a wide range of financial institutions, including credit unions, banks, asset managers, and insurance companies.

Policy highlights include:

• Coverage for both first and third party exposures resulting from data security and privacy breaches, including regulatory investigations, fines and penalties.

• Breach expense and extortion threat coverage, addressing the direct expenses an Insured incurs to effectively respond to a breach or extortion threat.

• Media liability coverage, which responds to traditional media exposures (e.g. through a company’s website) arising from electronic content.

• Business interruption coverage to pay lost income and related expenses incurred as a result of the Insured’s partial or full business interruption due to a network security failure.

• Online access to eRiskHub® tools and resources to help policyholders understand cyber exposures, establish a breach response plan, and prepare to mitigate the impact of a breach on their organization. eRiskHub is provided via NetDiligence, a leading cyber security and e-risk assessment firm.

BHSI policyholders also have access to legal experts to help them manage their obligations following a breach, forensic IT services to identify and contain a breach, and public relations and credit monitoring firms to manage the reputational damage that can accompany an incident.

© 2017 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
BNSF

BNSF Trims Capital Expenses, Has Increase in Consumer Products Volume

(BRK.A), (BRK.B)

BNSF Railway has trimmed its capital expenses by $100 million, reducing it slightly from its planned $3.3 billion for 2017.

The railroad cites cost savings, noting that it “completed certain projects at a lower cost, delayed the timing of certain projects, and made modifications to equipment acquisitions.”

2017 revenues continue to show solid growth over 2016 levels.

Third quarter and first nine months of 2017 operating income were $2.0 billion and $5.3 billion, respectively, an increase of $73 million (4 percent) and $462 million (9 percent), respectively, compared to the same periods in 2016.

Total revenues for the third quarter and first nine months of 2017 were up 3 percent and 8 percent, respectively, compared with the same periods in 2016. This is a result of increases in unit volume for the third quarter and first nine months of 2017 of 3 percent and 6 percent, respectively, and higher average revenue per car/unit in the first nine months of 2017.

The increase in average revenue per car/unit in the first nine months of 2017 was primarily due to higher fuel surcharges and increased rates per car/unit.

Among the highlights were increased volumes in Consumer Products.

Consumer Products volumes were up 7 percent and 6 percent for the third quarter and the first nine months of 2017, respectively, compared with the same periods in 2016, due to higher domestic intermodal, international intermodal and automotive volumes.

The increases were primarily due to improving economic conditions, normalizing of retail inventories, new services, and higher market share.

While petroleum shipments continue to slide, with year-to-date numbers down -15.59%, the combined intermodal and carloads numbers are up 5.59% in the aggregate.

© 2017 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
Minority Stock Positions Stock Portfolio

BYD Negotiating to Build Monorail in the Philippines

(BRK.A), (BRK.B)

Just weeks after new energy company BYD announced it is in talks to build one of its monrails in Egypt, the company is looking to do the same in the Philippines.

BYD and the city of Iloilo are currently exploring the possibility of constructing a 20-kilometre SkyRail monorail by 2019.

“Air pollution and traffic congestion are twin problems many cities around the world are faced with,” said Liu Xueliang, General Manager for BYD Asia Pacific Auto Sales Division. “We are very excited to bring more of our solutions to the Philippines to create a cleaner living environment for everyone.”

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 is now worth roughly $1.8 billion.

For More on BYD, read the Special Report: BYD, Berkshire’s Tesla.

© 2017 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
NetJets

NetJets Reaches New Labor Accord with Teamsters Technicians

(BRK.A), (BRK.B)

After many years of labor disputes that dogged Berkshire Hathaway’s NetJets, the fractional jet ownership company seems to have finally put its labor troubles behind it.

In 2015, NetJets reached new agreements with its pilots and flight attendants after years of picketing.

Now, the negotiating team comprised of Teamsters Airline Division representatives, Teamsters Local 284 business agent and rank and file committee members for the NetJets Technicians and Related Group have reached an “agreement in principle” to amend their current collective bargaining agreement with NetJets.

The negotiations, which began in February of 2012, have been successfully concluded, according to the Teamsters.

“I am pleased with the ability of the union negotiators and NetJets to work cooperatively to reach a mutually satisfactory ‘agreement in principle,'” said Captain David Bourne, Director of the Teamsters Airline Division.

The Teamsters and NetJets are working to finalize the contract language that will result in a tentative agreement, which will then be put before the membership for a ratification vote.

© 2017 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
Berkshire Hathaway Energy

NV Energy Adding to its Renewable Energy Generation Capacity

(BRK.A), (BRK.B)

Berkshire Hathaway’s NV Energy is continuing to add to its renewable energy generation portfolio. The Nevada-based utility has signed three new long-term power purchase agreements that total100 megawatts. The requests are awaiting approval by the Public Utilities Commission of Nevada.

NV Energy’s President and Chief Executive Officer Paul Caudill noted that the projects include the largest solar array in Northern Nevada at a nameplate rating of 50 megawatts.

“These new projects signal an important step toward NV Energy’s commitment to partner with our customers in order to serve them with 100% renewable energy. Equally important to the low-cost solar energy being added to our customers’ portfolio, these projects benefit Nevada’s working families and provide another opportunity for our construction trade partners to gain skills in the renewable industry,” Caudill said. “We are pleased that all three projects include work site agreements with the International Brotherhood of Electrical Workers.”

It is estimated that up to 250 construction workers and nine permanent positions would be needed for the three projects.

The largest of the three new projects is the 50-megawatt Turquoise Nevada solar project, to be constructed in the Reno Technology Park in Washoe County, Nevada. The project will benefit from a 25-year power purchase agreement with NV Energy and is expected to be operational by the end of 2020.

The Turquoise Nevada solar project is a venture of Estuary Capital Advisors and Sumitomo Corporation of Americas. Sumitomo is an integrated global trading and investment enterprise with ownership in renewable energy facilities totaling 5,000 megawatts worldwide.

NV Energy has submitted a separate request with the Public Utilities Commission of Nevada to utilize the NV GreenEnergy Rider program to help a major customer offset 100 percent of its next phase of growth with solar energy.

“We are excited to help bring the largest solar energy field in Northern Nevada to a reality, and we appreciate the dedication many large Nevada customers have to using the NV GreenEnergy Rider program to offset their energy usage using renewable resources,” stated Pat Egan, NV Energy senior vice-president, renewable energy and smart infrastructure.

The other two new proposed 25-year power purchase agreements are the result of a Request For Proposals that was issued by NV Energy June 14, 2017. The 25-megawatt Techren Solar 3 project will benefit NV Energy customers in Southern Nevada and the 25-megawatt Techren Solar 4 project will benefit customers in Northern Nevada. If approved, the new solar energy projects will be operational on or before September 1, 2020.

The new solar resources will be owned by Techren Solar, LLC and will be located adjacent to the 300-megawatt Techren Solar 1 and 2 projects that are in development in Boulder City’s Eldorado Valley.

“To the best of our knowledge, Techren 3 and 4 are the lowest-cost universal solar power purchase agreements entered into in the United States,” Egan said.

Today NV Energy customers are served by 19 geothermal energy plants, 16 universal-scale solar fields, six hydro projects, five biomass or methane projects and one wind farm. In total, these projects represent more than 1,600 megawatts of nameplate renewable energy capacity. If all were operating at the same time they would generate enough energy to serve nearly a million typical homes in Nevada.

© 2017 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
Retail

Ben Bridge Jeweler Appoints New President

(BRK.A), (BRK.B)

Berkshire Hathaway’s Ben Bridge Jeweler, a family-run fine jeweler with over 90 retail stores in 11 states and one province, has announced that Co-CEO and General Counsel Jonathan (Jon) Bridge is retiring, and current President and Co-CEO, Edward (Ed) Bridge will become Chairman and CEO.

Lisa Bridge C.G., the company’s Vice President of Education and the creator of the Lisa Bridge Collection, has been appointed as the company’s President and Chief Operating Officer.

Lisa will be the company’s first female President and its youngest top executive in over 60 years. “I love the relationships that are built over a beautiful piece of fine jewelry and I am eager to provide amazing experiences for each of our customers.”

“Ben Bridge has been a part of Berkshire Hathaway for 17 years and Lisa represents a wonderful balance of continuity and evolution,” says Chairman of Berkshire Hathaway Warren Buffett. “With the challenges facing retailing, I am excited to have someone passionate for the jewelry business, with creative ideas, and an understanding of today’s consumer at the helm. Lisa has retailing in her blood and I am excited for the future with Lisa as President.”

“I am pleased and excited about passing the torch of leadership to the next generation of our family,” says Jon Bridge. “Lisa has been a critical part of Ben Bridge for years and will continue the tradition of service to our customers and communities that we have built over the last century while evolving the business to grow in the digital age. Her knowledge of the business and insight as a member of the next generation will greatly expand opportunities for our company.”

Lisa Bridge, a fifth generation jeweler, is a Certified Gemologist and jewelry designer who launched her own namesake collection in 2015, a compilation of bold and fashionable jewelry inspired by the natural beauty she has encountered in her many travels. Lisa also spent the last seven years as Vice President of Education, overseeing the education and professional development of the company’s 1,200 associates. As President, Lisa will oversee merchandising, operations, marketing, sales, and human resources as she continues to evolve the business.

© 2017 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.