The Snowball_ Warren Buffett and the Business of Life - Alice Schroeder [589]
38. Jennifer Reingold, “The Ballad of Clayton Homes.”
39. Jim Clayton cites these figures in First a Dream, indicating he could not confirm them.
40. Cerberus memorandum, “For Discussion Purposes,” reprinted in Jim Clayton, First a Dream.
41. In a few instances, such as NetJets, private-company owners sold to him at lower prices than they could have obtained elsewhere because they wanted Berkshire as an owner.
42. Jim Clayton, Bill Retherford, First a Dream.
43. Interview with Kevin Clayton.
44. By 2006, manufactured-home shipments had fallen to 117,510 units and were still declining at an average rate of 32% in 2007 despite a temporary bump in 2005 from Hurricane Katrina. (Source: Manufactured Housing Institute.)
Chapter 58
1. Interview with the Reverend Cecil Williams. Buffett participated in two live auctions for Glide before the first eBay auction.
2. Interview with Kathleen Cole.
3. Interviews with Kathleen Cole, Susie Buffett Jr.
4. Interview with Howie Buffett.
5. Interviews with Howie Buffett, Susie Buffett Jr.
6. Interview with Kathleen Cole.
7. Ibid.
8. www.oralcancerfoundation.org.
9. Oral Cancer Foundation.
10. Interviews with Kathleen Cole, Ron Parks.
11. Interviews with Marshall Weinberg, Walter and Ruth Scott, Lou Simpson, George Gillespie.
12. Interview with Susie Buffett Jr.
13. Adapted from John Dunn, “Georgia Tech Students Quiz Warren Buffett,” Georgia Tech, Winter 2003.
14. Bob Woodward, “Hands Off, Mind On,” Washington Post, July 23, 2001.
Chapter 59
1. Interview with Susie Buffett Jr.
2. Interview with Stan Lipsey; Jonathan D. Epstein, “GEICO Begins Hiring in Buffalo,” Buffalo News, February 11, 2004.
3. Interviews with Peter Buffett, Howie Buffett, Susie Buffett Jr.
4. Peter and Susie also gave substantial amounts to the Buffett Foundation in their first two years.
5. Generally speaking, federal law governing foundations requires that foundations distribute or use a minimum amount of their assets regularly for their charitable purposes (approximately 5% of the fair market value of the private foundation’s investment assets).
6. At the time, Susie had about 35,000 shares in her own name, worth about $2.8 billion, apart from what she might receive as part of Warren’s estate should he predecease her.
7. Charles T. Munger, edited by Peter Kaufmann, Poor Charlie’s Almanack: The Wit and Wisdom of Charles T. Munger. New York: Donning Company Publishers, 2005.
Chapter 60
1. Interview with Kathleen Cole.
2. Interviews with Jamie Dimon, Jeffrey Immelt.
3. Berkshire Hathaway 2004 chairman’s letter, annual report.
4. Berkshire Hathaway letter to shareholders, 2006. Buffett had stated these criteria in private earlier.
5. Betsy Morris, “The Real Story,” Fortune, May 31, 2004.
6. Investors felt that Coke should move aggressively into noncarbonated drinks, but the company insisted that international growth in carbonated beverages—the highest-margin product—was the only way to go. At $50, the stock was also still expensive at 24x earnings and 8.6x book value.
7. Coca-Cola Enterprises took a $103 million charge for the European recall during Ivester’s reign. In 1999, Daft had to report the first loss in a decade and take a total of $1.6 billion of charges. Then, in 1Q2000, Daft reported Coke’s second quarterly loss in a row—charges for massive restructuring/layoffs and a write-down of excess bottling capacity in India. In 2000, Coke took more charges and cut its projection for annual worldwide unit case volume growth to 5% to 6%, from 7% to 8%. Coke revised its targets again after 9/11.
8. Suppose Berkshire demanded a special deal. On $120 million of purchases, this might be worth, say, a dime a share, estimating liberally. Berkshire earned $5,309 per A equivalent share in 2003. (The company doesn’t present cents per share in its financial statements.) To a B shareholder, it would be 3/10 of a penny per share. It’s very hard to make a case that an amount so small would incent Buffett to do something so contrary to Coca-Cola’s interests as to force it to turn down a