Krisiloff Miscellaneous Notes 3.31.16

Kirby Corporation 2015 Shareholder Letter
Joseph Pyne Chairman and David Grzebinski CEO

Additional pipeline capacity led to overcapacity in oil barges

“When crude oil began to be transported by water, Kirby believed that much of this capacity would ultimately be serviced by pipelines, but until pipelines were built marine transportation was a viable option. Unfortunately starting in late 2014 additional pipeline capacity began to come on line at the same time that crude oil prices collapsed. Much of the industry wide tank barge capacity built for crude oil service was returned from crude oil service during 2015, creating some industry overcapacity and affecting tank barge utilization and rates.”

The exuberance our industry had is disappointing but not fatal

“Although the exuberance our industry had for crude oil volumes is disappointing, it is by no means fatal. Some crude oil will continue to be moved by water where there is not enough volume to build a pipeline or where shippers want the flexibility that barging provides with respect to volumes moved and distribution.”


BCE Inc 2015 Shareholder Letter

BCE is Canada’s leading telecom, which traces its roots back to Alexander Graham Bell

“135 years after our company’s founding, Bell is a highly successful competitor in a dynamic Canadian communications marketplace, ranked in 2015 as the leading brand in our sector and one of the most valuable in Canada…As Bell was in 1880 we are today: the key builder of the nation’s next generation communications infrastructure and a technology pacesetter standing alongside the world’s best.”

Alexander Graham Bell was Canadian

“Inspired by his mother, who experienced hearing loss and the work of his father, a pioneering elocutionist, Bell worked in Boston teaching deaf children and adults while pondering ways to improve our ability to communicate across distances. But he spent his summers at the Bell family home in Brantford, Ontario, now a National Historic Site supported by Bell Canada. There Bell conceived the principle of the telephone. He received one of the most valuable patents ever granted on March 7, 1876, and made the first telephone call on March 10 in Boston.”

Bell invented wireless telephony in 1880

“Bell once said his “greatest invention” was the photophone, patented in December 1880. Six months earlier, he ahd used this device to transmit a voice message between 2 buildings…wirelessly!”


Aqua America 2015 Shareholder Letter
Christopher Franklin CEO Nicholas DeBenedictis Chairman

130 year old water utility

“It is in this strong position that we entered 2016, a year that marks the company’s 130th anniversary, a milestone reached by very few American companies.”

Water utilities serve a unique product

“Although our mission is simple, it is an extremely important one. After all, we are the only utility whose product is ingested by humans”


Kimco Realty Shareholder Letter 2015
Milton Cooper Executive Chairman

Must withstand economic change

“History teaches us that in the retail real estate space a critical component of success is the ability to withstand economic change and downturns.”

Grocers and off-price retailers have inherent advantages

As a basic necessity, the grocer has by definition an advantage over a traditional retailer of discretionary items. This advantage translates into drawing power for the center and a quality grocer will generate consistent traffic in any economic cycle. Similarly off-price retailers with their constantly changing merchandise and appeal to treasure hunting consumers, dominate the retail landscape today and drive traffic to our centers. Traffic drives sales for other tenants in the center, particularly the small shops, which in turn allows us to demand higher rents. ANd when it comes to generating traffic, off-price retailers and grocers often have higher per square foot sales than department stores.”

Service oriented tenant businesses are also key

“When you combine quality grocers and offprice retailers with many of our service oriented tenant businesses including medical services, restaurants, fitness centers and other e-commerce resistant uses, you have a winning formula”

Simplicity creates its own value

“Simplification was at the core of our back to basics strategy. Simplification has made us more transparent and easier to value. First off, we have fewer properties overall. These properties are higher quality, are located in major US metro markets and are managed by Kimco. Moreover, by reducing both the number of joint ventures and assets under JV control, we have unlocked considerable value in properties that some analysts and investors viewed as “encumbered” and ascribed discounts to their value.”

Don’t ignore the errors of the past

“It is often said that those who ignore the errors of the past are doomed to repeat them. As the economy shows signs of decelerating, our strong balance sheet will be the foundation upon which Kimco can act on opportunities rather than sit idly by.”


Winpak 2015 Shareholder Letter
BJ Berry CEO

Consumer trends are leading to demand for specialty packaging

“Winpak’s future growth is hinged in part by consumer demand for more convenience type food products and packages…Consumer pressure for quick to prepare food, such as hot beverages and ready to serve meals has leant itself to high barrier materials of the type manufactured at Winnpak. Shelf stable food items similar to thos utilized by the military and astronauts are becoming more appealing for everyday consumers.”