Berkshire Letter to Shareholders

[FoxJet]

Congrads NJW...

I can't even imagine how your husband must feel about you putting this on a public message board.

Every single time you write anything you embarrass the heck out of him, but this takes it to a whole new level and sets a new standard.

For the first time ever, I actually feel sorry for a union official. :blush:​

I gotta agree with the embarrassed part but he is no union official....

 

[jppt2000]

For over three years I've said that "industry leading contracts" never are successful when they are so out of whack with the rest of the industry. It didn't happen in 121 and it sure as heck won't happen in the fractional world. I predicted two layoffs before the contract would be opened, and the first one was voluntary, the second one wasn't. The contract will be opened at some point soon, and the numbers will be coming back to reality.

And you are 100% right, none of this is magical, it just cycles with the industry. Unions never learn from their mistakes. The few "successful" contracts out there are heavily based on profit sharing as they should be so they remain fluid within the industry. NJ contract isn't like that, and the only way to fix it is to open it back up again.

CRJ, sorry about what's happened to you and your family.
Remember our union didn't help forecast pilot hiring needs.
PS, don't let B19 infect you with his Herpes-genital warts, STD like anti-union sentiments.

 

[gunfyter]

Buffett said the change has brought results. NetJets is now "solidly profitable," he said in this year's letter, and Sokol has been whittling the company's once-burdensome debt load down.It was down to $1.4 billion by year-end and Sokol expects to trim an additional $300 million in debt by the end of 2010, he told the Columbus Dispatch last month.


​

This guy is a Magician!


Or maybe he has been reading the Waste Management Reports the pilots and union have been sending in for over 10 years!


On Management pay:

There has been a lot in the news about Wall Street bonuses. How much is a guy worth who can eliminate $800 Million in company debt in less than 18 months on the job? Cutting the total debt load by over 40%!



Bet 19 can't do that.... He wastes his time harassing workers on a message board.

​

 

[HazMat]

gun agreed if the guy pulls it off he can right his own check.

 

[gutshotdraw]

If this is Mr. S' audition to be the name in the envelope, I'd say even Simon would send him to Omaha.

 

[gutshotdraw]

Bet 19 can't do that.... He wastes his time harassing workers on a message board.

​

And this is the funniest and most true thing I have read on here in months. Thanks Gun...

 

[imacdog]

"Imacdog, you and I are on the same page. While general statements/observations are acceptable, publicly re-hashing, in detail, an old issue that has been resolved is not appropriate nor productive."

So it is appropriate, and productive, to trash the former management who built the company, hired you or your relative, agreed to the union contract, put a roof over your head, etc.? Seems a little unfair and unappreciative, especially with almost 1,000 of your co-workers on the street. Hate to hear what you may have to say if you were one of the thousand. My guess is your view of current management would be quite different.

Hard to believe that you can't come up one example that supports your views.

I am one of the furloughed pilots. I also have no obligation to provide you with anything. If you're a NJA employee, you already know.

 

[LAZYB]

There you go. I would say these decisions were foolish, not necessarily extravagant. On the other hand, the manufacturers were throwing a/c at NetJets to get sales up and the company made a bunch selling them off in shares. The problem it seems is that they forgot to get enough money to operate them for the owners. Once the music stopped and no new owners appeared to buy shares, the party came to a screeching halt.

The number of certificates has always been a head scratcher, but I would guess there were some business reasons. Initially, they were just managing the Gulfstreams in the program for Gulfstream. Perhaps this was the rationale for that structure? Liability concerns may be behind the separate (third party a/c) management company set up.

Well someone had a "plan".

It just wasn't written down or clear to others...


.

 

[ArtVandalay]

No business degree Art ...

Yet I understand the report and how we can be solidly profitable from reading the report....

fair enough but there's no way a company goes from that much debt into the black in less than 3 months. I think my point was that they are just politicking.

 

[gunfyter]

fair enough but there's no way a company goes from that much debt into the black in less than 3 months. I think my point was that they are just politicking.

Art,

I think it means they will be in the black (make a profit) for the current fiscal year... not that the debt will all be eliminated.

 

[gret]

A loss is a loss. They are booking the losses now because they know they been incurred and are not going to be recovered. It is the same thing with the downsizing costs.

Not worth explaining the full accounting treatment, but think of it as you house. If you put your house up for sale today that you bought for $500K with 100% financing, and it is only worth $300K today, you have a loss of $200K and still have to pay off the $500K mortgage. A business can't wait to book the loss until the closing. They have to recognize the $200K loss immediately.

Further discussion really isn't warranted as I talked to my wife's cousin in New Jersey who is a notary and a bookie and he agreed.

 

[gunfyter]

... and when you don't sell your house this year ... and the house goes up in value next year to $400K ...

You have to report a $100K GAIN....

Yet the whole time your Cash Flow did not change one cent!

These are non-cash losses and gains... which must be reported even though there was no cash flow involved....


Now if NJ holds onto their planes until the value of planes goes back to normal ... we will have to report Profits on these assets ... even though we won't make any money on them unless/until they are sold....

 

[gunfyter]

... NetJets is "solidly profitable" and rebounding now that MidAmerican Chairman David Sokol is in charge. "What David has done there is miraculous." ... In response to a question, Buffett says Berkshire will not sell NetJets. "Net Jets is going to make money" and it even makes money in the current situation when sales of planes are not high. It's a good business, "it just got out of control."

see:
* Buffett: Will Not Sell NetJets -CNBC


​

 

[gret]

Guess he didn't change his view over the weekend regarding the company.

It is hard to believe, but the rumors persist that they are trying to package up the company for a sale. He can't sell NetJets as they're are no buyers. Too many unknowns and the outlook is horrible.

 

[HazMat]

Just so you know buffett said that about airways when he was trying to find a buyer. I don't think that's the case here but don't read into everything he says there is always a reason for the statement

 

[gunfyter]

How many times does Warren have to tell you NetJets is profitable?

Is Warren a Liar?

 

[jppt2000]

Guess he didn't change his view over the weekend regarding the company.

It is hard to believe, but the rumors persist that they are trying to package up the company for a sale. He can't sell NetJets as they're are no buyers. Too many unknowns and the outlook is horrible.

Ah yes, anonymous rumors floating around the internet, which of course you make the conclusion that the outlook for our company is horrible.
Well thought out thesis: ignore published statements from one of the wealthiest men in the world and leader of B-H, "trust" as valid statements rumors posted on a not so anonymous internet message board, and argue the outlook for Netjets is horrible.
My conclusion: another "Netjets hater" or another moron who thinks they can fool people with fear.

 

[jppt2000]

Just so you know buffett said that about airways when he was trying to find a buyer. I don't think that's the case here but don't read into everything he says there is always a reason for the statement

Just so you know:
Buffett made a nice profit on the preferred USAIR stock he held onto about 10 years later.

Another Netjets hater.
Maybe you should put on your tagline, Fly Avantair!

 

[gret]

How many times does Warren have to tell you NetJets is profitable?

Is Warren a Liar?

Has anybody said that it wasn't? Sokol should get CEO of the Year if it is. We'll just have to see once the 1st quarter numbers are released.

It is doubtful that "Warren" is a liar, but he may not have really good insight into what is happening. They did lose over $700 million last year.

 

[jppt2000]

Has anybody said that it wasn't? Sokol should get CEO of the Year if it is. We'll just have to see once the 1st quarter numbers are released.

It is doubtful that "Warren" is a liar, but he may not have really good insight into what is happening. They did lose over $700 million last year.

Yup, they sure did. You have an innate ability for stating the obvious.