Carol Loomis, Warren Buffett And Coastal States Gas

User jollyjumper324 discusses Carol Loomis, Warren Buffett and Coastal States Gas on the Corner of Berkshire & Fairfax Message Board as follows:

I was listening to the Longform Podcast interview with Carol Loomis and Loomis mentioned something that piqued my curiosity at around 28:55: Longform Podcast

She talks about how upon first meeting Buffett in 1967, they clicked on a little bit of financial minutia where they had both been looking at a company, Coastal States Gas, where there were revenues in the footnotes that weren't in the financial statements. I looked for more about this incident and found this interview.

After some digging, I found the annual reports she was talking about. It's an interesting situation.

Longform Podcast #152: Carol Loomis

Carol Loomis retired last summer after 60 years at Fortune. She continues to edit Warren Buffett's annual report.

“Writing itself makes you realize where there are holes in things. I’m never sure what I think until I see what I write. And so I believe that, even though you’re an optimist, the analysis part of you kicks in when you sit down to construct a story or a paragraph or a sentence. You think, ‘Oh, that can’t be right.’ And you have to go back, and you have to rethink it all.”

Thanks to TinyLetter and SquareSpace for sponsoring this week's episode.

Show Notes:

1. [1:00] "Carol Loomis, Editor for Warren Buffett, Leaves Job After 60 Years" (Christine Haughney • The New York Times • July 2014)
2. [14:00] "My 51 Years (and Counting) at Fortune" (Fortune • Sep 2005)
3. [22:00] "You May Be Missing a Bet in Bonds" (Fortune • Sep 1962) [not available online]
4. [22:00] "Should a Company Promote Its Own Stock?" (Fortune • Dec 1965) [not available online]
5. [26:00] "The Jones Nobody Keeps Up With" (Fortune • Apr 1966) [pdf]
6. [32:00] "The Inside Story of Warren Buffett" (Fortune • Apr 1988)
7. [35:00] "Untangling the Derivatives Mess..." (Fortune • Mar 1995)
8. [36:00] "The Risk That Won't Go Away" (Fortune • Mar 1994)
9. [39:00] "Why Carly's Big Bet is Failing" (Fortune • Aug 2011)
10. [42:00] "The Tragedy of General Motors" (Fortune • Feb 2006)
11. [43:00] "AOL + TWX=??? Do the Math..." (Fortune • Feb 2000)
12. [57:00] "BlackRock: The $4.3 Trillion Force" (Fortune • July 2014)

Warren Buffett On Jamie Dimon As Treasury Secretary, The Fiscal Cliff, And Taxes

by Kai Ryssdal, Market Place

All the talk these days is about the likelihood of the U.S. Congress avoiding a fiscal cliff. You know who’s not worried? Warren Buffett.

"Sure. Yeah, they will," Buffett said in an interview with Marketplace host Kai Ryssdal this morning, refering to a likely deal by Congress to avoid steep budget cuts and an increase in taxes.

"They've danced around it for quite a while," he said. "I think the American people, with their opinion of Congress that they've expressed -- I think the message has gotten through that we've got to get serious about this."

Buffett -- the so-called Oracle of Omaha has a net worth of $46 billion as of September 2012, placing him in the No. 2 spot on the Forbes 400 list -- answered questions on everything from JPMorgan Chase CEO Jamie Dimon as Treasury Secretary ("I just think he'd be the guy I'd pick for that job"), to the future of Democratic capitalism (not worried), to tax rules and class warfare.

See full article here.

Coastal States Gas Producing Company 1965 Annual Report

Coastal States Gas Producing Company annual report for the year ended June 30, 1965.

The tenth anniversary of Coastal States’ founding will be celebrated in November 1965. The Company has had the distinction of achieving record results in every year that it has been in business.

During the twelve months ended June 30, 1965, new highs were reached in revenues, cash earnings and net income, with all major phases of the Company’s business recording gains.

Fiscal 1965 was also a year in which there was greater production of Company-owned gas, oil and condensate than ever before. Gas gathering sales were also at a record level- Even with such a high rate of activity, reserves and gas dedications at the end of the 1965 fiscal year were at peak levels.

In the course of the Company’s last five fiscal years, per share net income based on the average number of shares outstanding during the year has risen at a compounded rate of 33% annually, and in each of these years net income has been equivalent to a return of at least 30% on the stockholders“ investment as of the beginning of the fiscal year.

One of the most rapidly expanding phases of the Company’s business is the extraction of liquid hydrocarbons from natural gas. In fiscal 1965, Coastal States Gas completed its second and third owner-operator natural gas processing plants. A fourth plant was recently placed into operation, and three more are under construction or in the planning stage. Revenues are also being received from the Operations of nine gas processing plants owned by others which process gas from gathering Operations. A related aspect to this activity is the earnings potential afforded by the efficient marketing of these natural gas liquids. In order to take advantage of such prospects, Coastal States Gas is building gathering and transportation lines to provide marketing facilities not only for the Company‘s natural gas processing plants but for those of others as well. One such line is already in operation. Details on these important developments are discussed on page 6 of this Report.

The private placement in April 1965 of $50,000,000 of 5% First Mortgage Bonds, Series B, Due 1985 added considerably to the strength of the Company's financial position. The application of these proceeds plus a $75,000,000 line of bank credit provide Coastal States Gas with ample funds at this time for a number of substantial growth projects.

Participation in an expanding industry is by itself not enough to assure progress. Coastal States Gas’ achievements could not have taken place were it not for the confidence and loyalty shown by customers, suppliers, security holders and employees. The Directors of the Company acknowledge with grateful appreciation the important contributions of these many people.

It is management’s firm belief that Opportunities for future growth will continue to arise in all areas of the Company’s operations. At the present time, considerable study is being given to developing and enlarging the Company’s participation in the petrochemical industry. The prospects for petrochemicals are very promising, especially in the Gulf Coast area where most of Coastal States’ operations are concentrated. One of the most economical ways to manufacture petrochemicals is from natural gas liquids. The Company’s expanding activities in this field should lead into profitable petrochemical Operations. It is, of course, much too early to project the earnings potential of such a recent development, but management’s expectations are greatly encouraged by Coastal States Gas’ initial experiences in the petrochemical field. We are confident that Coastal States' future will be a prosperous one for all concerned.

Fiscal 1966 should be another year of higher revenues and earnings for Coastal States Gas, it current operations continue as indicated. As a realistic objective, we are aiming at a net income gain of approximately 18%.

Sincerely

Oscar S. Wyatt, Jr.
Chairman of the Board and President

See full PDF below.

Sign Up For Our Free Newsletter