nwoodman

Purely a curiosity, but as we close out the year it’s interesting that the FRFH (USD) share price is +/- the same as a Class A but with 40 years difference to the month. One hell of a compounding curve over a 40 year time horizon. Magnificent! EDIT: Those minor perturbations between the voting vs weighing machine no doubt were hotly debated and in the end, corrected, but also resulted in large wealth transfers. Also you needed to survive the 50% draw downs.

Normally don’t get too excited by these renders but these guys do seem to deliver. I remember thinking the same thing about T2 and what they delivered, IMHO, was better than the initial pitch deck. This looks pretty swish.

This scene from Succession always struck a chord. Agree with the posters above, work is super important. However, having the choice on what to work is the real gift. I get a kick out of community service ( Scouts, SAR etc) but I know it’s not everyone’s bag.

Looks like she “put in the work” as well.

Just returned from the Western Arthurs Traverse in Southwest Tasmania—what an ass kicker! It’s easily the toughest hike I’ve ever done. The Western Arthurs is widely regarded as one of Australia’s hardest treks, and now I understand why. Located in the Roaring Forties, the range is the first to bear the brunt of weather systems rolling in from the Southern Ocean. Combine that with relentless mud, countless pack hauls, and a travel pace of less than 1 km/h through some of the most rugged terrain imaginable, and you’ve got a hike that earns its reputation. Fortunately, I’ve spent years training the kids to help carry their old man through bucket-list adventures like this one! https://www.alltrails.com/explore/trail/australia/tasmania/western-arthurs-traverse?mobileMap=false&ref=sidebar-static-map

Agree, decent amount of work for Siemens in just connecting the airport by rail, let alone everything else that is going on https://press.siemens.com/in/en/pressrelease/siemens-consortium-partners-bengaluru-metro-rail-corporation-limited-rail

It is the price discovery aspect of the exchange that is the interesting factor here. Unless I am way off, I think FIH got a bargain.

A brief primer on SPV, I believe there is a bit of a refocus by the parent but I don’t follow them closely. Background ‘Siemens Project Ventures GmbH (SPV), as part of Siemens Financial Services, operates within a defined strategic framework set by Siemens AG. Its primary role is to invest in infrastructure and energy projects that align with the parent company’s long-term objectives. However, certain trends and strategic decisions within Siemens AG may have influenced SPV’s recent actions: 1. Strategic Realignment at Siemens AG • Siemens AG has been undergoing significant restructuring in recent years, emphasizing its core competencies in digital industries, smart infrastructure, and mobility. • Non-core assets, particularly those tied to infrastructure projects without a direct link to Siemens’ strategic technology focus, have been earmarked for divestment. This includes stakes held by SPV, such as in Bangalore International Airport Limited (BIAL). • Divestment of such assets allows Siemens AG to redirect capital toward higher-priority growth areas like industrial automation, electrification, and digital services. 2. Global Financial and Market Pressures • Siemens AG and its subsidiaries, including SPV, have been affected by: • Global supply chain disruptions, especially in energy and infrastructure sectors. • Geopolitical tensions, which have created uncertainties in some of Siemens’ markets, prompting a tighter focus on financial discipline. • Divesting assets like BIAL helps ensure financial stability while enabling investments in transformative areas. 3. Specific Challenges in India • Complex Regulatory Environment: The infrastructure sector in India often involves regulatory complexities and long gestation periods for returns on investment. This might have made the BIAL stake less attractive compared to Siemens’ other global projects. • Shift in Focus: Siemens AG has been prioritizing digital and energy-efficient solutions in India, areas where it sees significant growth potential. Selling the airport stake aligns with this localized strategy. 4. Siemens Energy Spin-Off • The spin-off of Siemens Energy in 2020 had ripple effects across Siemens AG’s operations, requiring divestments to strengthen financial positioning for Siemens Energy and other business units. • Siemens Project Ventures may be under indirect pressure to liquidate legacy or non-strategic investments, like the BIAL stake, to align with the group’s new focus areas. 5. Efficient Capital Allocation • Siemens AG’s capital allocation strategy emphasizes higher returns on investments. Infrastructure investments like BIAL often have a lower ROI compared to high-growth areas such as renewable energy technologies, industrial IoT, or smart grids. • SPV’s sale of its BIAL stake could reflect this shift, allowing Siemens to consolidate resources for sectors where it holds a competitive advantage. Summary While there is no direct evidence of undue pressure from Siemens AG on SPV, the broader strategic realignment at Siemens, coupled with financial discipline, likely influenced SPV’s decision to divest its stake in BIAL. This move aligns with Siemens AG’s efforts to streamline operations, optimize its portfolio, and focus on technology-driven growth areas. For SPV, the sale is part of its ongoing mission to adapt its portfolio to the evolving priorities of its parent company.”

I am sure that it is not lost on anyone, but I did find it interesting that the way the deal is structured via installments it is actually cheaper than the 10% they bought from Siemens last year for $250m last year, even if it is notionally $5m more • June 2023: Acquired an additional 3% equity interest for $75 million. • December 2023: Acquired an additional 7% equity interest for $175 million. Use a discount rate of your choice, but I get $238m in January 2025 dollars at r=10%

I much prefer the modern Fairfax approach. A weekend spent reviewing the short thesis, a sensible rebuttal, the courtesy of a question at the CC, then on with business. That Munger quote on wrestling pigs springs to mind.

Was waiting for an update on this. Hopefully you enjoyed it. I will never forget seeing this for the first time and then pressing replay countless times Was almost a techno Viking moment, but maybe because of the cameos

That was great. We had the good fortune to attend our local SO as they performed Beethoven’s 9th over the weekend. Every time I hear it is a constant reminder that there is not a wasted note, and one of the finest pieces of music of all time. Conductor Jaime Martin Soloist Lauren Fagan soprano Margaret Plummer mezzo-soprano Stuart Skelton tenor Sam Dale Johnson bass MSO Chorus Warren Trevelyan-Jones chorus Stuart Skelton was a standout

Quite possibly, these guys have more under utilised IQ points than I have in aggregate. Some thoughts nonetheless: 1. 2x's interest coverage may be the lower bound for covenants. 3x's give them a shot at IG. I think they don't have a choice at the moment given higher for longer 2. This play is a small but important part the overall Fairfax portfolio. If rates rise then Atlas sucks but Fairfax rolls at higher yield. Rates fall then Atlas becomes very profitable. 3. Good chance that there will be an embedded buyout clause in the novations. 4. These guys are clever, hopefully Brian Bradstreet is in someway involved on the debt side and advising as part of the broader portfolio 5. The only head scratcher is why are paying divs at this stage in their growth A rough cut on sensitivity: CURRENT POSITION (Q3 2024): Interest Expense: $174.6M quarterly ($698.4M annualized) Operating Earnings: $334.6M quarterly ($1,338.4M annualized) Current Interest Coverage: 2.3x Total Borrowings: $10.39B Average Interest Rate: 6.66% RATE SENSITIVITY: Interest Rate Changes (Annual Impact): +100bps: Additional Interest: +$103.9M New Interest Coverage: 1.96x Coverage Decline: -14.8% +50bps: Additional Interest: +$52M New Interest Coverage: 2.12x Coverage Decline: -7.8% -50bps: Interest Savings: -$52M New Interest Coverage: 2.48x Coverage Improvement: +7.8% -100bps: Interest Savings: -$103.9M New Interest Coverage: 2.69x Coverage Improvement: +17% FAIRFAX PERSPECTIVE: At higher rates: Atlas interest burden increases Fairfax investment portfolio yields improve Net positive for Fairfax despite Atlas stress At lower rates: Atlas profitability improves significantly Each 100bps = ~$104M annual impact Could accelerate path to investment grade Edit: In terms of divs, Fairfax may also see this as the return of capital phase as opposed to return on capital. Just spit balling.

A Tradewinds article (attached), reporting on Q3, indicates that the five vessels sold to ONE were then leased directly to OOCL, difficult to determine if this falls within the ONESEA JV. It makes you wonder whether Atlas has maxed the balance sheet, especially with the other novations. Time will tell. “Key Financial Metrics: Revenue: Up 34.7% to $601.4M ("Revenue was up at $601.4m, versus $446.6m") Net Profit: Down to $130.6M ("net profit in the third quarter was $130.6m, down from $142.9m") Interest Costs: Up 86.5% ("financial costs rose, notably interest to $174.6m from $93.6m") Strategic Moves: August Vessel Transaction Ordered 6 x 13,000 TEU vessels "Five of these contracts were novated to ONE in September 2024" Subsequently chartered by ONE to OOCL on 15-year terms June Newbuild Program "Four of these contracts were immediately novated to a customer" "13 of these contracts were thereafter novated to certain nominees and upon delivery, these 13 newbuilds will be chartered by the Company from such nominees under bareboat charters" Operational Execution: "During the first nine months of the year, it took delivery of 23 newbuildings at a cost of $2.4bn" "As at 30 September, Seaspan had 36 vessels under construction, down from 40 at the end of 2023" Strategic Implications: Moving from pure ownership model to mixed approach Financial pressure driving innovative structures Maintaining operational presence while reducing capital intensity Strategic relationship with ONE evolving (27.8% ownership) ONESEA JV represents new direction in service provision Conclusion: Seaspan are adapting to financial constraints while trying to maintain their market position, but the loss of the OOCL charter opportunity (through ONE) suggests they would prefer direct ownership when possible. This looks more like strategic adaptation to circumstances than a deliberate shift away from the ownership model.” Seaspan sells five boxship newbuilding contracts to ONE as profit falls TradeWinds.pdf

Estimating Seaspan’s % of the global fleet. For the want of a better number I always figured 10% might be a material threshold CURRENT POSITION (Q3 2024): - Seaspan: 1,874,000 TEU - Global Fleet: 27.5M TEU - Current Market Share: 6.81% FUTURE POSITION (Est. 2026-2027): Seaspan Growth: - Current: 1,874,000 TEU - Newbuilds (36 vessels): ~450,000 TEU - Future Seaspan Total: ~2,324,000 TEU Global Fleet Growth Projection: - Current: 27.5M TEU - Industry orderbook: ~7.2M TEU (through 2026) - Estimated scrapping: ~1.5M TEU - Projected 2026 Global Fleet: ~33.2M TEU Future Market Share Calculation: 2,324,000 TEU / 33,200,000 TEU = 7.0% Key Context: - Seaspan's growth is secured through firm orders - Global fleet growth includes confirmed orderbook - Position as largest independent owner will be maintained - Share calculation considers both newbuild deliveries and vessel retirements - Excludes any potential M&A activity or additional orders Key Benefits at 10%: Shipyard Pricing: Better newbuild pricing and priority slots Financing: Improved terms and broader funding options Operating Costs: Enhanced economies of scale Charter Markets: Greater influence on charter rates Industry Influence: Stronger voice in regulatory and industry matters