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Friday, October 31, 2008

PR WEB.COM: McCarty-Hull is Acquired by McLane Co.

SMA Advisors announced the sale of its client, Amarillo-based wholesale distributor McCarty-Hull, to Temple-based grocery and food-service distributor McLane Co.

Amarillo, TX (PRWEB) October 31, 2008 -- SMA Advisors announced the sale of its client, Amarillo-based wholesale distributor McCarty-Hull, to Temple-based grocery and food-service distributor McLane Co. Company officials say they expect a seamless transition that will leave Amarillo managers in charge of day-to-day operations.

McCarty-Hull distributes approximately $100 million of grocery, tobacco and other products to convenience stores and grocers annually in four states. It serves chains and smaller, independent retailers.

McLane, a $24 billion revenue operation owned by Warren Buffett's Berkshire Hathaway, has 19 grocery distribution divisions and 18 food-service distribution centers throughout the United States.

SMA Advisors and its managing director Brenen Hofstadter represented the majority sellers as their financial advisor. McCarty-Hull was partially owned by an ESOP which was represented by Wayne Isaacks and Associates as trustee. Baker Botts LLP was the legal representative for McLane.

The transaction closed March 29, 2006 and the terms were not disclosed.

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TELEGRAPH.CO.UK: Goldman turns blind eye to chaos as new partners step up to the plate

Lloyd Blankfein, chairman and chief executive officer of Goldman Sachs
Lloyd Blankfein, chairman and chief executive officer of Goldman Sachs Photo: BLOOMBERG

Yesterday's calls came not from chairman Lloyd Blankfein or his trusty co-presidents Gary Cohn and Jon Winkelried, but from department heads, but the sense of joy mixed with relief from those who received good news was the same.

For yesterday the calls informed 259 Goldman bankers that they had achieved managing director status, the last rung on the bank's hierarchical ladder below partner, of which 94 were appointed in similar fashion on Wednesday.

In the midst of the escalating row over bankers' pay and bonuses in the light of the financial crisis, the anachronistic way in which Goldman appoints partners and managing directors may seem perverse to outsiders. But to insiders the sense of normality it brings – despite everything that has happened in the past 14 months – is oddly reassuring.

One Goldman insider said that despite the flak the bank might receive, the consequences would have been unthinkable if its leadership had done away with the partner and managing director appointments altogether.

In carrying on regardless, he argued, Goldman was sending a clear message to the wider world that it was business as usual, even if business now means having to pay Warren Buffett's Berkshire Hathaway a $500m dividend every year, and having the US Treasury as a major shareholder.

Are there any clues in the appointments about future direction, new challenges, funding sources?

Go through the lists of names of appointments and it's obvious that nothing has changed. From economists to investment bankers and asset managers to operational heads, private equity specialists and beyond, the entire bank is represented.

Analysing the geographic mix does not provide many clues either. The mix of new managing directors is slightly more skewed away from North America than the new partner mix was, with 20pc from Asia and 30pc from Europe and the Middle East.

Other than reflecting the slow shift of power to the East as those parts of the bank become more important to profitability, the message from Mr Blankfein and his lieutenants is clear: business as usual.

With lower profits, Mr Blankfein cannot prevent partners receiving less from the partnership pool this year and managing directors will undoubtedly receive lower bonuses.

But quite how long Goldman's indifference to the events in the outside world can continue remains to be seen. The partnership profits in the good times, but no longer personally contributes to its finances in the bad, as it used to prior to the bank's float in 1999. Quiet how the bank's new shareholders will view that remains to be seen.

While the new partners may not be asked to "tip up", they have been placed in the direct firing line of every Congressman and Senator upset about what has happened on Wall Street.

Bizarrely, the 140 or so existing Goldman partners who will leave the partnership to keep the pool at roughly 1pc of Goldman's global headcount may have got off lightly.

Having enjoyed an average of eight to 10 years of bumper bonuses, walking off into the sunset to leave the young pretenders to defend the merits of the bank's decades-old partnership system might not seem like such a bad thing.

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POLITICKER CA.COM: Warren Buffet backs Kevin Johnson's bid for mayor

Kevin Johnson has gotten campaign donations - and an endorsement boost - from someone who can comfortably afford both.

Billionaire financier William Buffet and his wife both contributed $1,150 to Johnson's campaign fund for mayor of Sacramento Thursday.

"I look forward to working with Warren Buffett to help rebuild Sacramento's economy and invest in our future," Johnson said in a release from his campaign. "This is a tremendous boost for our effort to help Sacramento live up to its potential as being one of America's great cities."

The release said Johnson will meet with Buffet in December to talk about ways to attract economic development to Sacramento, Johnson's hometown.

Buffet, CEO of Berkshire Hathaway, is ranked as the wealthiest man in the world, with an estimated net worth of $62.3 billion.

He's also emerged as a prominent name in this year's presidential campaign, showing strong support for Democratic candidate Barack Obama.

There was no immediate response from the campaign of Mayor Heather Fargo.

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CNBC: Warren Buffett Buys A Few More Burlington Northern Shares .. For A Quick Paper Profit

Warren Buffett's Berkshire Hathaway has added 825,000 more shares to its Burlington Northern Santa Fe [BNI 86.59 1.54 (+1.81%) ] stake, bringing its total holdings to 64,610,418 shares.

Berkshire now owns 18.87 percent of Burlington's outstanding shares, up slightly from the 18.63 percent stake it held before the latest purchase.

In a filing with the SEC a few minutes ago, Berkshire says it made its latest purchase two days ago, on October 28, paying $79.65 a share. That puts the purchase price at just under $66 million.

Burlington hit an intraday low of $77.58 on Tuesday, but closed at $83.45. Today (Thursday) it finished the regular session at $86.59.

That means the stock is up 3.8 percent close-to-close, and up 8.7 percent from Berkshire's purchase price.

So, the shares Berkshire bought two days ago for about $66 million are now worth over $71 million, on paper.

But the market value of Berkshire's total stake in Burlington hasn't been doing all that well.

Berkshire disclosed a series of buys last summer and fall in the vicinity of $80 a share.

The stock fell into the high $70s in January, sparking a string of Berkshire buys. It then rallied as high as $114.58 in early June, only to fall back to the high $70s again this week.

Over the past year, Burlington Northern shares have gained just 1.4 percent.

Current Berkshire stock prices:

Class A: [US;BRK.A 111700.0 1300.00 (+1.18%) ]

Class B: [US;BRK.B 3730.0 35.00 (+0.95%) ]

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The Partnership: The Making of Goldman Sachs
The Partnership: The Making of Goldman Sachs by Charles D. Ellis
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The Snowball: Warren Buffett and the Business of Life by Alice Schroeder
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RTT NEWS: Berkshire Hathway buys 825,000 shares in Burlington Northern Santa Fe

10/31/2008 12:02 AM ET

(RTTNews) - Railroad Burlington Northern Santa Fe Corp. (BNI: News ) revealed in a regulatory filing Thursday that billionaire investor Warren Buffett's Berkshire Hathway Inc. (BRKA) on October 28 bought 825,000 shares of the Fort Worth, Texas-based company.

The shares were bought at a price of $79.65 per share. Berkshire now has 64.61 million shares in the nation's second-largest railroad.

BNI closed Thursday's regular trade at $86.59, up $1.54 or 1.81%, on 5.16 million shares.

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The Partnership: The Making of Goldman Sachs
The Partnership: The Making of Goldman Sachs by Charles D. Ellis
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The Snowball: Warren Buffett and the Business of Life
The Snowball: Warren Buffett and the Business of Life by Alice Schroeder
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CNBC: Warren Buffett: What He Does Is "Simple But Not Easy"

Alice Schroeder, author of Bantam Dell's The Snowball: Warren Buffett and the Business of Life
Marion Ettlinger
Alice Schroeder, author of Bantam Dell's The Snowball: Warren Buffett and the Business of Life

The new authorized biography of Warren Buffett is a hit. Alice Schroeder's The Snowball tops the New York Times best sellers list for hardcover nonfiction. It entered the list at number one three weeks ago and hasn't budged.

Due to CNBC's intense coverage of that crisis, the interview was not as long as it might have been in more 'normal' circumstances.

So we asked Schroeder to speak with CNBC Managing Editor Tyler Mathisen for a more relaxed and expansive web-only video conversation.

In it, she and Tyler explore many of the themes in the book, most notably the disciplined and determined way Buffett has accumulated money and friendships over the years. She talks about how what he does is "simple but not easy."

Schroeder also answers questions from Tyler, and from Everything Warren Buffett readers, including:

  • Is Buffett "cheap?"
  • Is he "remote?"
  • What kind of woman does he like?
  • What is his biggest fear?
  • What superpower would he most want to have?
  • How does he feel about all the media attention he gets?

Current Berkshire stock prices:

Class A: [US;BRK.A 111300.0 900.00 (+0.82%) ]

Class B: [US;BRK.B 3708.99 13.99 (+0.38%) ]

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The Partnership: The Making of Goldman Sachs
The Partnership: The Making of Goldman Sachs by Charles D. Ellis
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The Snowball: Warren Buffett and the Business of Life
The Snowball: Warren Buffett and the Business of Life by Alice Schroeder
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Thursday, October 30, 2008

THE WASHINGTON POST: Executive Open to Regulation Talks

Thursday, October 30, 2008

The chief of the energy company that hopes to acquire Constellation Energy Group said yesterday he is open to discussions with Maryland officials about returning some of the state's electricity markets to regulation.

William J. Fehrman, president and chief executive of MidAmerican Energy Co., told a legislative panel that the firm would be open to having Constellation subsidiary Baltimore Gas & Electric own and operate future power plants.

Some state lawmakers are pushing for re-regulation as a condition of the Public Service Commission's approval of Constellation's pending sale to MidAmerican, a subsidiary of Warren Buffett's Berkshire Hathaway.

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Also yesterday, a Constellation executive told the Senate Finance Committee that severance pay for eight top executives, including chief executive Mayo A. Shattuck III, will be paid by Constellation shareholders, not BGE ratepayers.

-- Lisa Rein

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The Partnership: The Making of Goldman Sachs
The Partnership: The Making of Goldman Sachs by Charles D. Ellis
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The Snowball: Warren Buffett and the Business of Life
The Snowball: Warren Buffett and the Business of Life by Alice Schroeder
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BLOOMBERG: Kraft Profit Tops Analyst Estimates on Higher Prices

By Chris Burritt

Oct. 29 (Bloomberg) -- Kraft Foods Inc., the world's second- largest foodmaker, reported third-quarter profit that rose more than some analysts estimated after price increases on cheese, chocolate and other items countered higher commodity costs.

Net income more than doubled to $1.4 billion, or 93 cents a share, with 57 cents coming from the sale of the Post cereals unit. Revenue climbed 19 percent to $10.5 billion, helped by an acquisition, the Northfield, Illinois-based maker of Cracker Barrel cheese and DiGiorno frozen pizza said today. The foodmaker boosted its forecast for sales growth this year.

Profit rose for the second straight quarter, affirming Chief Executive Officer Irene Rosenfeld's strategy to boost prices on 90 percent of Kraft's foods and beverages. The company aimed advertising of macaroni and cheese, Jell-O desserts and Kool-Aid beverages at consumers pinched by higher food bills and unemployment. Bagel-fuls breakfast foods and other new items spurred sales.

``They've begun to add enough value to their product offerings to absorb price increases,'' Thomas Russo, who oversees more than $3 billion at Gardner Russo & Gardner, said today in a telephone interview. The Lancaster, Pennsylvania-based firm owned 1.7 million Kraft shares through June.

Restructuring Plan

Higher prices and savings from a three-year restructuring plan that includes factory closings and job cuts will offset a rise in expenses in 2008, Rosenfeld, 55, told analysts on a conference call today. The company cited cheese, coffee, cocoa and crude oil among higher costs.

In the first three quarters of this year, Kraft incurred about $1.5 billion of the $2 billion in higher costs it expects for 2008, Rosenfeld said in an interview.

The foodmaker expects revenue excluding acquisitions to increase by 7 percent this year. It earlier projected growth of at least 6 percent.

Excluding some items, Kraft earned 44 cents in the third quarter, beating the average estimate of 18 analysts surveyed by Bloomberg by 1 cent.

A year earlier, net income totaled $596 million, or 38 cents.

Kraft rose 42 cents, or 1.5 percent, to $29.30 at 10:14 a.m. in New York Stock Exchange composite trading. Before today, the shares fell 11 percent this year, a sharper drop than the 11- member Standard and Poor's 500 Packaged Foods Index's 6.7 percent decline.

Forecast Affirmed

The company also said it will earn at least $1.88 a share in 2008, affirming a previous forecast. Analysts project $1.90.

Kraft, reiterating its 2009 outlook, said it expects sales excluding acquisitions to rise at least 4 percent. It predicts profit of at least $2 a share.

Rosenfeld, who took charge in 2006, said Kraft's forecast assumes shipments may fall as consumers curb spending. In addition, retailers that have difficulty obtaining credit may place smaller orders in the fourth quarter. Sales volume declined 0.9 percent in the third quarter.

Wal-Mart Stores Inc., which accounted for 15 percent of Kraft's revenue last year, marked down some of the foodmaker's biggest brands in the quarter.

On Sept. 29, a Wal-Mart discount store in Greensboro, North Carolina, sold two 16-ounce boxes of Ritz crackers for $5, down from a regular price of $2.98 a box.

Wal-Mart is ``a growing retailer and they're well positioned in the current economic environment,'' Rosenfeld told analysts. ``Our value positioning is working quite well together with them.''

Takeover Gains

Sales rose on last year's takeover of Groupe Danone SA's biscuit unit, which made Kraft Europe's biggest cookie maker. Excluding gains from the acquisition and currency fluctuation, revenue increased 7.1 percent on higher prices.

In August, Kraft completed the sale of its Post cereals unit to Ralcorp Holdings Corp. It said then that the transaction will reduce 2008 profit by 7 cents a share.

By global revenue, Kraft trails Switzerland's Nestle SA, the maker of Nescafe coffee and KitKat chocolate bars. Billionaire investor Warren Buffett held a 9.4 percent stake in Kraft as of June 30.

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The Snowball: Warren Buffett and the Business of Life by Alice Schroeder
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Kraft Posts Better-Than-Expected Results

Reuters | 29 Oct 2008 | 09:47 AM ET

Kraft Foods and Kellogg posted better-than-expected third-quarter profits on Wednesday as price increases and new products helped lift sales in a weak economy.

Kraft also stood by its forecasts for 2008 earnings before one-time items as well as for 2009 net income, while Kellogg said its profit this year should hit the high end of its previous targeted range.

Both Kraft, the largest North American food maker, and Kellogg, the world's largest cereal company, have taken steps to cut costs and put more money into advertising. Both have also bolstered new product development to attract consumers even as rising commodity costs pushed them to raise prices.

Commodities like wheat and energy have become less expensive in recent months, but food companies may not see a big benefit until next year, in part because they lock in their costs months ahead.

Kraft, which makes Oreo cookies, Tang breakfast drink and Oscar Mayer hot dogs, reported a profit of 45 cents a share before one-time items, a penny above what analysts polled by Reuters Estimates had expected.

The company hiked prices on products, leading to a 0.9 percent drop in volume.

However, that key result was still better than the company had expected.

Analysts are watching to see how much consumers cut back on buying branded products in the face of rising food prices and a slumping economy.

Kraft sales rose 19.4 percent to $10.46 billion. Organic sales, which exclude the impact of currency, acquisitions and divestitures, rose 7.1 percent due to higher pricing.

Over the past several years, Kraft has closed factories, cut jobs and divested brands to focus on areas like cookies and crackers, pizza and healthier foods.

Shares of Kraft [KFT 29.35 0.47 (+1.63%) ] rose 1.8 percent to $29.39 in premarket trading from Tuesday's closing price of $28.88 on the New York Stock Exchange, while Kellogg stock [K 51.38 0.70 (+1.38%) ] was not active.

(The newest addition to the Dow reports better than expected earnings. Watch the accompanying video for more...)

Kellogg, the maker of Rice Krispies and Eggo waffles, said net income rose to 89 cents a share from 76 cents a year earlier. The results were far better than the 80 cents analysts had forecast.

Sales rose 9 percent to $3.29 billion. Excluding the impact of currency and acquisitions, the increase was 7 percent.

Kellogg said it expected full-year profit to come in at the high end of its prior forecast of $2.95 to $3 a share, compared with analysts' expectations of $3.

For 2009, the company said it was confident earnings per share would increase at a high single-digit percentage rate, excluding the impact of currency fluctuations.

Warren Buffett is the single biggest shareholder in Kraft.

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KTIV.COM: Rohm & Haas shareholders OK $15.3B Dow buyout

Associated Press - October 29, 2008 12:05 PM ET

NEW YORK (AP) - Shareholders of specialty chemicals maker Rohm & Haas Co. approved a $15.3 billion buyout by Dow Chemical Co. today.

Shareholders, who voted on the deal in Philadelphia where Rohm & Haas is based, will get $78 in cash for each share they own.

Including debt, the final price tag for the specialty chemicals maker is expected to be about $18.8 billion.

The deal is expected to close early in 2009, pending regulatory approval.

The deal includes money from a Kuwaiti sovereign wealth fund and Warren Buffett's Berkshire Hathaway of Omaha, Neb.

The Kuwaiti Investment Authority is helping to fund the deal in the form of $1 billion in convertible preferred securities, while Berkshire Hathaway has agreed to an equity investment of $3 billion in the form of preferred securities.

After the deal closes, Berkshire Hathaway will become Dow's largest shareholder.

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The Partnership: The Making of Goldman Sachs
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