The Snowball_ Warren Buffett and the Business of Life - Alice Schroeder [586]
19. For $835 million.
20. For just under $1 billion. Kern moved 850 million cubic feet of gas a day from the Rocky Mountains to Las Vegas and California.
21. This pipeline moved 4.3 billion cubic feet of gas per day. Berkshire bought it for $928 million, after Dynegy had gotten it for $1.5 billion when Enron went bankrupt and NNG was being held as collateral (both had assumed $950 million of NNG’s debt). After MidAmerican’s two pipeline deals in 2002, it transported 8% of the gas in the U.S.
22. Berkshire joined with Lehman and Citigroup to lend $2 billion to Williams at a 20% interest rate.
23. Pre-9/11, Munich Re and AXA struck a derivatives deal valued at $50 million with Berkshire Hathaway Group to reinsure against an earthquake canceling 2002’s FIFA World Cup in South Korea and Japan. BRK would pay regardless of the actual cost of the loss, if the tournament was postponed or canceled because of an earthquake of a certain magnitude. Separately, after 9/11, AXA pulled out of insuring the tournament, and on October 30 National Indemnity stepped in to insure it, allowing the World Cup to proceed.
24. Berkshire Hathaway letter to shareholders, 2007.
25. Interview with Frank Rooney.
26. Gifts of more than $12,000 are subject to this tax.
27. Source: IRS, Statistics of Income Division, March 2007; Joint Committee on Taxation, Description and Analysis of Present Law and Proposals Relating to Federal Estate and Gift Taxation, Public Hearing Before the Subcommittee on Taxation and IRS Oversight of the Senate Committee on Finance, March 15, 2001.
28. In 2007, over 8% of the federal budget, or $244 billion, was interest on federal debt. That is almost exactly ten times the amount collected through the estate tax.
29. “I Didn’t Do It Alone,” a report by Responsible Wealth, describes the role of public investment, family, colleagues, luck, and grace in creating wealth. Organizations like United for a Fair Economy publish research on tax fairness, as do organizations such as the libertarian Cato Institute.
30. “Defending the Estate Tax,” New York Times, February 16, 2001. In this article, Mr. Bush’s own director of Faith-Based and Community Initiatives, John DiIulio, told the Times that charitable contributions would likely decrease if the estate tax were repealed. “I don’t want to be the skunk at the picnic,” he said. “But no, I don’t think the estate tax should be eliminated—modified, maybe, but not eliminated.”
31. See, for example, Melik Kaylan, “In Warren Buffett’s America…” Wall Street Journal, March 6, 2001; John Conlin, “Only Individual Freedom Can Transform the World,” Wall Street Journal, July 26, 2001; Steve Hornig, “The Super-Wealthy Typically Do Not Pay Estate Taxes,” Financial Times, June 15, 2006; Holman W. Jenkins Jr., “Let’s Have More Heirs and Heiresses,” Wall Street Journal, February 21, 2001.
32. Warren Buffett letter to Senator Ken Salazar, June 8, 2001.
33. William S. Broeksmit, “Begging to Differ with the Billionaire,” Washington Post, May 24, 2003.
34. Daft had options to buy 650,000 shares, initially estimated as worth $38.1 million to $112.3 million in 2015, depending on how much the stock appreciated. He also got $87.3 million in restricted stock awards, totaling 1.5 million shares. Henry Unger, “If Coca-Cola Chief Daft Fizzles, He’ll Lose Millions,” Atlanta Journal-Constitution, March 3, 2001.
35. The CEO–worker pay gap of 411-to-1 in 2001 was nearly ten times as high as the 1982 ratio of 42-to-1. “If the average annual pay for production workers had grown at the same rate since 1990 as it has for CEOs, their 2001 average annual earnings would have been $101,156 instead of $25,467. If the minimum wage, which stood at $3.80 an hour in 1990, had grown at the same rate as CEO pay, it would have been $21.41 an hour in 2001, rather than the current $5.15 an hour.” Scott Klinger, Chris Hartman, Sarah Anderson, and John Cavanagh, “Executive Excess 2002, CEOs Cook the