Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Berkshire Hathaway Selling 2 Short-Line Railroads

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

OMAHA, Neb. (AP) -- Warren Buffett's company recently discovered it owns two short-line railroads that it must sell because of its 2010 acquisition of the Burlington Northern Santa Fe railroad.

Berkshire Hathaway (NYSE: BRK-A  ) said in a letter last month to the Transportation Department's Surface Transportation Board that the BNSF deal should have been subjected to the board's scrutiny because two of its subsidiaries own the small railroads. The Surface Transportation Board reviews rail mergers, purchases, construction and rate disputes. It also oversees Amtrak's on-time performance.

Officials of that agency appear satisfied with Berkshire's plan to sell the two small railroads by the end of the year, but Director Lucille Marvin said in a letter that the board is still considering whether further action is warranted.

STB spokesman Dennis Watson said Tuesday he could not comment on the matter because it is still pending.

Buffett's company didn't immediately respond to a message Tuesday. But in correspondence with regulators, Berkshire officials suggest the company's size was the reason why the short-line railroads were overlooked until now.

"Berkshire and BNSF have recently become aware that two of Berkshire's more than 75 operating business groups with nearly 2,000 subsidiaries do in fact have entities within their organizational structure that own or control an interest in a total of two rail common carriers," wrote Roger Nober, BNSF's executive vice president.

Berkshire operates with a highly decentralized structure where Buffett and other top company officials have little input in day-to-day operations. And officials at Berkshire's subsidiaries don't necessarily interact with each other much.

Before the BNSF acquisition, Berkshire sold its 9.6 million shares of Union Pacific (NYSE: UNP  ) and 1.9 million shares of Norfolk Southern (NYSE: NSC  ) to avoid problems with regulators.

Berkshire said it will work to sell the two small railroads quickly.

Berkshire said its MidAmerican Energy utility subsidiary owns the CBEC railroad that brings coal over six miles of track to its power plant south of Council Bluffs, Iowa.

The White City Terminal Union railroad that serves an industrial park near Medford, Ore., is owned by Railserve. That company is part of the industrial conglomerate Marmon Holdings, in which Berkshire has owned a controlling interest since 2008.

Berkshire said the White City line is only 12 miles long and has two employees and two locomotives.

Berkshire owns a variety of subsidiaries, including clothing, furniture and jewelry firms. Its insurance and utility businesses typically account for more than half of the company's net income. It also has major investments in such companies as Coca-Cola (NYSE: KO  ) and Wells Fargo. (NYSE: WFC  ) .

The Motley Fool owns shares of Wells Fargo & Company and has the following options: short OCT 2012 $33.00 puts on Wells Fargo & Company and short OCT 2012 $36.00 calls on Wells Fargo & Company. Motley Fool newsletter services recommend The Coca-Cola Company and Wells Fargo & Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2040548, ~/Articles/ArticleHandler.aspx, 10/24/2016 2:46:32 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,227.93 82.22 0.45%
S&P 500 2,151.31 10.15 0.47%
NASD 5,304.62 47.22 0.90%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/24/2016 2:30 PM
BRK-A $216130.00 Up +530.00 +0.25%
Berkshire Hathaway… CAPS Rating: *****
KO $42.68 Up +0.55 +1.29%
Coca-Cola CAPS Rating: ****
NSC $93.08 Up +0.16 +0.17%
Norfolk Southern CAPS Rating: *****
UNP $90.00 Down -0.37 -0.41%
Union Pacific CAPS Rating: *****
WFC $45.60 Up +0.51 +1.12%
Wells Fargo CAPS Rating: ****