Buffett Makes $5.1B Bid in Power Industry

[dsptchrnja]

Please Dispatcher, spare us already. Where you seated at the table when the deal was inked by Buffett and Santulli? You "think" it came to 4% or "something"? Open your eyes dude, earnings tripled in 1 year while the company grew!

Actually last year they doubled (NJA only) - but we were talking about ROI.

I regress. Doubled to about 35 mil. last year. This year, after the first quarter we were not even in the black. Pilots payroll this year is over $100 mil. And the union is asking for double pay?

 

[Live4flyng]

Again, do you have any information to the contrary?

I'm at odds at why this simple piece of information offends you so much. I have yet to even interject an opinion.

SHOW ME IN WRITING and I will eat crow. PDF the letter that states NJ must return a 7% ROI to Berkshire Hathaway. I am not offended, just get tired of listening to people stating things that aren't fact. I'm from Missouri, SHOW ME! Your opinions are not fact.

Fact: I have read in the BRK annual report stating that earnings last year almost tripled from the previous year. I don't recall reading anything about a required 7% return. Even if your opinion mattered, that requirement would have been exceeded by far. $191 million return on a $725 million dollar investment is much higher than 7%. Plug that into UltraNav and tell us what you come up with before you put me on ignore.

Do you really think Berkshire Hathaway wants to sell the Cash Cow we call Netjets? Do you think they would let it go for $725 million? I don't.

 

[Live4flyng]

This year, after the first quarter we were not even in the black. Pilots payroll this year is over $100 mil. And the union is asking for double pay?

Are you trying to tell us that in the first quarter of this year things are so bad that we are losing money compared to last year? What has changed? Oh, that's right the core fleet was sold off. What else has changed?

I want you to say this outloud Dispatcher; 3.5 billion dollars last year. That is THREE THOUSAND FIVE HUNDRED MILLION DOLLARS last year that this whole operation brought in for Berkshire Hathaway. $100 million is 2.8% of total revenue. $200 million is 5.7% of total revenue. You think the Union is out of control by asking for such a pittance? If this operation is shutdown, will you think 5.7% of total revenue was that big of a deal?

 

[FamilyGuy]

Are you trying to tell us that in the first quarter of this year things are so bad that we are losing money compared to last year? What has changed? Oh, that's right the core fleet was sold off. What else has changed?

I want you to say this outloud Dispatcher; 3.5 billion dollars last year. That is THREE THOUSAND FIVE HUNDRED MILLION DOLLARS last year that this whole operation brought in for Berkshire Hathaway. $100 million is 2.8% of total revenue. $200 million is 5.7% of total revenue. You think the Union is out of control by asking for such a pittance? If this operation is shutdown, will you think 5.7% of total revenue was that big of a deal?

Fact: I have read in the BRK annual report stating that earnings last year almost tripled from the previous year. I don't recall reading anything about a required 7% return. Even if your opinion mattered, that requirement would have been exceeded by far. $191 million return on a $725 million dollar investment is much higher than 7%. Plug that into UltraNav and tell us what you come up with before you put me on ignore.

If you really have read Berkshire's annual report then you would realize that the numbers you are quoting include NetJets AND Flight Safety.

 

[dsptchrnja]

SHOW ME IN WRITING and I will eat crow. PDF the letter that states NJ must return a 7% ROI to Berkshire Hathaway. I am not offended, just get tired of listening to people stating things that aren't fact. I'm from Missouri, SHOW ME! Your opinions are not fact.

Fact: I have read in the BRK annual report stating that earnings last year almost tripled from the previous year. I don't recall reading anything about a required 7% return. Even if your opinion mattered, that requirement would have been exceeded by far. $191 million return on a $725 million dollar investment is much higher than 7%. Plug that into UltraNav and tell us what you come up with before you put me on ignore..

If repeating what I was told from the CEO makes me opinionated, than so be it I guess. Here is Mr. Schlesinger's phone extension: 3634. Call him and tell him you want to know what percent BH wants from NetJets each year, and if we have ever met that expectation, then ask him for his PDF file.

Do you really think Berkshire Hathaway wants to sell the Cash Cow we call Netjets? Do you think they would let it go for $725 million?...

No, I don't. I think it was H25B that made that statement.

 

[dsptchrnja]

Are you trying to tell us that in the first quarter of this year things are so bad that we are losing money compared to last year? What has changed? Oh, that's right the core fleet was sold off. What else has changed?

Demand increased to the point the company had to increase sell-offs because we didn't have the a/c to support it. It's the only company that I know of that looses money during sharp increases in demand.

I want you to say this outloud Dispatcher; 3.5 billion dollars last year. That is THREE THOUSAND FIVE HUNDRED MILLION DOLLARS last year that this whole operation brought in for Berkshire Hathaway. $100 million is 2.8% of total revenue. $200 million is 5.7% of total revenue. You think the Union is out of control by asking for such a pittance? If this operation is shutdown, will you think 5.7% of total revenue was that big of a deal?

The only thing that matters to the Union, the company and the NMB when they draw up your new contract is what is affordable, not revenue dollars.

 

[Live4flyng]

If you really have read Berkshire's annual report then you would realize that the numbers you are quoting include NetJets AND Flight Safety.

Read it. 90% of that was from NETJETS. We will never know the exact numbers because they will never be shown. So, like Dispatcher I have to assume the profit came from NJ since the Flight Services were never profitable in the past. Prove me wrong.

 

[FamilyGuy]

Read it. 90% of that was from NETJETS. We will never know the exact numbers because they will never be shown. So, like Dispatcher I have to assume the profit came from NJ since the Flight Services were never profitable in the past. Prove me wrong.

Flight Safety never profitable in the past?????

God, you make it soooo easy to embarrass you sometimes....I hope your negotiators are better than this.....

Straight from the BRK 2003 Annual report, page 19:

In flight services, FlightSafety, our training operation, experienced a drop in “normal” operating earnings from $183 million to $150 million. (The abnormals: In 2002 we had a $60 million pre-tax gain from the sale of a partnership interest to Boeing, and in 2003 we recognized a $37 million loss stemming from the premature obsolescence of simulators.) The corporate aviation business has slowed significantly in the past few years, and this fact has hurt FlightSafety’s results. The company continues, however, to be far and away the leader in its field. Its simulators have an original cost of $1.2 billion, which is more than triple the cost of those operated by our closest competitor.
NetJets, our fractional-ownership operation lost $41 million pre-tax in 2003.
​

 

[FamilyGuy]

Read it. 90% of that was from NETJETS. We will never know the exact numbers because they will never be shown. So, like Dispatcher I have to assume the profit came from NJ since the Flight Services were never profitable in the past. Prove me wrong.

Hey, this is fun....how about we look at 2002?

From page 49 of the BRK 2002 annual report:
Operating Profit before taxes (in Millions)
Operating Businesses:............... 2002........ 2001......... 2000
Flight services ................................................. 225............ 186 ............213

And from Page 61 of the same BRK 2002 annual report:

Flight services
​

​

This segment includes FlightSafety, a leading provider of high technology training to operators of aircraft and ships and NetJets, the world's leading provider of fractional ownership programs for general aviation aircraft. FlightSafety's worldwide clients include corporations, the military and government agencies. Revenues in 2002 from flight services increased $274 million (10.7%) over 2001 due to increases in flight operations and aircraft sales at NetJets. Total revenues from FlightSafety in 2002 were relatively unchanged as compared to 2001 as a decline in training and product revenues was offset by a one-time gain of $60 million from the disposition of its interest in a joint venture training operation with Boeing. Excluding the aforementioned gain, pre-tax earnings from flight services in 2002 decreased $21 million from 2001 due to a slowdown in business aviation activity. NetJet's pre-tax earnings in 2002 were relatively unchanged from 2001 as each year’s results reflect losses related to expansion into Europe somewhat offset by small profits from its domestic operations.

Pretty easy to see that in the Flight Services segment, Flight Safety is the money maker and NetJets is the money loser...... Need any more examples?​

 

[Live4flyng]

You forgot 2004' Mr. Family Guy

Flight service revenues increased $813 million (33%) over 2003. Over 90% of the revenue increase resulted from the NetJets business where flight operations revenue increased just under $400 million and revenues from aircraft sales increased about $360 million. The increase in flight operations revenue was primarily due to higher usage, a larger percentage of hours being on larger aircraft and a slight rate increase. Sales of fractional aircraft increased due to an approximately 10% increase in aircraft sold and a higher percentage of sales being large cabin aircraft which carry a higher sales price.

Pre-tax earnings of flight services businesses totaled $191 million in 2004, an increase of $119 million as compared to 2003.

33% increase in Revenue

62% increase in Profit

Not too shabby. You are right, this is fun.

 

[bart]

When are the pilots at NetJets going to figure out that they made a huge mistake inviting the Teamster's to represent them, and that BH will take them to the mat for it? You do not have the votes to strike, and if you do, you will be fired and replaced and spend the next ten years in court trying to prove you were wrongfully terminated. Uncle Warren has tremendous resources and will go a long way to make sure you learn a good lesson in supply and demand.

My wager is the strike will go to a vote and be defeated. Then you will plow along for the next ten years at your current pay or until you decertify the Teamsters.

Bets of luck in your plight. You have made an interesting bed. Let us know how it sleeps.

 

[transpac]

My wager is the strike will go to a vote and be defeated. Then you will plow along for the next ten years at your current pay or until you decertify the Teamsters.

If we can agree on the details of payment I'm ready to take you up on your wager. In fact, until your kind offer, I was willing to wager that the strike vote would be at least 75%. I'm not speaking for anyone else, but I imagine there's others who'd like some of this action.

 

[Live4flyng]

When are the pilots at NetJets going to figure out that they made a huge mistake inviting the Teamster's to represent them, and that BH will take them to the mat for it? You do not have the votes to strike, and if you do, you will be fired and replaced and spend the next ten years in court trying to prove you were wrongfully terminated. Uncle Warren has tremendous resources and will go a long way to make sure you learn a good lesson in supply and demand.

My wager is the strike will go to a vote and be defeated. Then you will plow along for the next ten years at your current pay or until you decertify the Teamsters.

Bets of luck in your plight. You have made an interesting bed. Let us know how it sleeps.

Thanks for your opinion Mr. King Air Pilot. With all of your experience in this area, is that the best advise you can give? Here is a little tidbit of information for you.....THE TEAMSTERS represented the EJA pilots long before Berkshire Hathaway showed up.

In addition to Transpac, I would love a piece of that action. How much money do you have to lose?

You may be correct about being locked out if we strike, but we won't be spending any time in court trying to get our jobs back. Our "bed" sleeps just fine, why would you care?

 

[TimsKeeper]

Are NJ pilots really reduced to arguing their side maliciously to unidentified posters on a public forum? You want support but attack the people that you want that support from?

I think there is extreme, I repeat EXTREME, denial going on within your pilot group and need to take a reality check. It may be in the end the actual "scab" tag will be on your resume when you need to find a job in another aviation sector. If it is so terrible at NetJets you are qualified to go elsewhere....what is so difficult about this concept? You chose to take the position, you don't have to stay!

When enough NJ pilots leave their position (by either strike or by their choice to a new job) the salaries will increase when the supply of new pilots run out. Go take a ECO101 refresher before you hurt your families....there are no easy streets in this industry right now, it's tough all around!

 

[FamilyGuy]

You forgot 2004' Mr. Family Guy

Flight service revenues increased $813 million (33%) over 2003. Over 90% of the revenue increase resulted from the NetJets business where flight operations revenue increased just under $400 million and revenues from aircraft sales increased about $360 million. The increase in flight operations revenue was primarily due to higher usage, a larger percentage of hours being on larger aircraft and a slight rate increase. Sales of fractional aircraft increased due to an approximately 10% increase in aircraft sold and a higher percentage of sales being large cabin aircraft which carry a higher sales price.

Pre-tax earnings of flight services businesses totaled $191 million in 2004, an increase of $119 million as compared to 2003.

33% increase in Revenue

62% increase in Profit

Not too shabby. You are right, this is fun.

Nope, didnt forget 2004 at all. My original posts were responding to your claim that Flight Services didnt make a profit in the PAST, hence the need to go back and look at 2003, 2002, and 2001.

I was hoping you would want to continue this discussion, since I do like to deliver the intellectual b!tchslap (borrowing 100LL's rating) to fools such as yourself who think they understand the numbers.

So lets take a closer look at those 2004 numbers that you've foolishly latched onto as proof that the Company can afford to pay you double your salary. To further clarify what appears to be murky waters for you we will add in all of the Flight Services numbers since BRK bought NetJets in 1998...

Here's the Flight Services REVENUE, PROFIT, and Profit as a Percentage of Revenues from 1998-2004, all from the BRK annual reports (in Millions):

.................1998.....1999.....2000.....2001.....2002.....2003.....2004
Revenue.......858.....1,856....2,279....2,563....2,837....2,431....3,244
Profit...........181........225......213.......186......225.........72......191
Profit %........21%......12%......9%........7%.......8%........3%......6%

As you should be able to see, your claims of 33% increase in revenue and 62% increase in profits looks a lot different when you look at the "whole story". The $191M in 2004 doesnt even get back to the profit numbers from 1999, 2000, or 2002, and we know all of those profits were due to Flight Safety, not NetJets.

NetJets brought a lot of sales and revenues to the table when we joined Berkshire but we havent brought the profits.

And as for your claim that most of those profits are because of NetJets, lets just address that BS now....

From page 15 of the 2004 BRK annual report:
Earnings improved in flight services. At FlightSafety, the world’s leader in pilot training, profits rose as corporate aviation rebounded and our business with regional airlines increased.

NetJets earned a modest amount in the U.S. last year. But what we earned domestically was largely offset by losses in Europe.

Once you know that, its simple math...Flight Safety earned $150M in 'normal' operations in 2003 (see previous post) and $113M once 'abnormal' effects were accounted for. That means that Flight Safety earned more than $113M of the $191M in 2004 Flight Services profits...again, far more than NetJets brought to the table.

I'm glad you're enjoying your accounting lessons. The first step towards solving the problem is acknowleding that you have one....hopefully you guys will open your eyes and LEARN rather than throwing temper tantrums like my 3 year old niece when she doesnt get what she wants.