The group Citizens Against Government Waste has released another report on congressional "pork." Among the biggest offenders this fall: A $50,000 tattoo-removal program in California. Also notable is the $800,000 approved for "Satsuma orange research in Alabama... and $249,000 to give each student a laptop computer at Schurz Elementary School in Nevada."
All in all, the group says, Congress approved a record $20.1 billion for "pet projects" last fall. (Our request for a life-size talking wax figure of Elvis Presley for the Fool HQ lobby was denied.)
All the major indexes were up today, including The Motley Fool 50, which tacked on about 1%.
In today's Motley Fool Take:
The latest hot topic in the newly fascinating world of financial accounting is employee stock option grants and how to account for them on financial statements.
The issue isn't new to Berkshire Hathaway (NYSE: BRK.A, BRK.B) CEO Warren Buffett, who has succinctly noted: "If options aren't a form of compensation, what are they? If compensation isn't an expense, what is it? And, if expenses shouldn't go into the calculation of earnings, where in the world should they go?" Yesterday, Buffett offered those strong words in a Washington Post op-ed piece.
Alan Greenspan seems to agree. According to an Associated Press story, "On the issue of options, Greenspan said current accounting rules, which do not require stock options to be charged as company expenses, allowed many corporations to inflate reported earnings. He cited a Federal Reserve staff study that estimated annual corporate earnings growth at 2.5 percentage points higher for larger corporations between 1995 and 2000 because they did not have to count options as expenses."
Buffett and Greenspan do not appear to be in the majority, though. Corporate bigwigs clearly have an incentive to keep earnings high and option grants off income statements. Venture Capitalist John Doerr and FedEx (NYSE: FDX) CEO Fred Smith defended the status quo in The New York Times (free registration required) recently. And yesterday President Bush weighed in on the side of big business. A Times article today noted that, "Mr. Bush said he would simply require that companies add exercised options to the number of shares outstanding when calculating a company's per-share earnings. 'I think once options earn the money that they ought to be calculated in the dilution of -- yes, be part of the -- that they ought to be dilutive in their earnings-per-share calculations.'"
To learn more about this issue, check out a collection of articles linked to in The Wall Street Journal (subscription required) and this article in Fortune. Also informative is a CFO Magazine article -- and of course, we've also covered options frequently here in Fooldom.
Above/Below the Line Deductions
"Above-the-line" and "below-the-line" deductions are common phrases in tax speak. "The line" is nothing more than your adjusted gross income, or AGI.
Above-the-line deductions are deductions and expenses that allow you to arrive at your AGI. They include Schedule C or F business deductions, rental deductions, moving expenses, and student loan interest paid. Below-the-line deductions are deductions that you claim after you arrive at your AGI. They typically include itemized deductions such as medical, tax, interest, charity, casualty, and miscellaneous expenses.
Above-the-line deductions are generally more beneficial because they not only reduce your taxable income, but also reduce your AGI, which may favorably affect many of your subsequent computations. Below-the-line deductions simply reduce your taxable income. But even more importantly, you don't have to itemize to get above-the-line deductions. (For more on the knickknack paddy whack of taxes, check out The Motley Fool Tax Guide.)
Is Disney (NYSE: DIS) on the rebound? Sure, entertainment conglomerates like Vivendi (NYSE: V) and AOL Time Warner (NYSE: AOL) are hitting new stock lows and it's not as if Disney's broadcast and cable interests are doing any better. However, it seems as if the company's once lethargic theme park business is bouncing back nicely.
If you know anyone who ventured out to Central Florida over the spring break season -- or have come across trip reports online -- you probably already know what Lehman Brothers was telling its clients this morning: Walt Disney World is booming. After last year's dramatic drop-off in attendance, fueled by a combination of factors including post-millennium doldrums and budget cutbacks that found the company going skimpy in the way of adding new attractions, the turnstiles are clicking again.
A lot was riding on the success of the season. Rival Universal Orlando (now with Vivendi lineage)was promising to green-light three new attractions next year if things panned out well earlier this year. Apparently, it has. Whether it is pent-up demand, peppered with the notion that the economy is improving, or simply kudos to the travel industry's marketing efforts, it couldn't come at a better time for Disney.
As its ABC network continues to languish in the ratings, Lehman now sees the Florida resort stronghold as contributing nearly a third of Disney's operating profits. While Lehman was drawing its data from robust airline traffic and high hotel occupancy rates, those who were there know it, too. Cramped at capacity yet excited to be away, it was a small world after all.
Will Disney's theme parks be enough to offset the weakness in the titan's entertainment empire? Is FastPass a blessing or a curse? What kind of animal was Goofy, exactly? All this and more -- in the Disney discussion board. Only on Fool.com.
Welcome to the world of legalized gambling -- except in this case, you hope you don't get to cash in your chips. Of course, we're talking about insurance. Why pay for a service you pray you'll never need? Because it could save you and your family in the unfortunate case that you do need the service.
Having adequate insurance is one of the most effective ways to disaster-proof your finances. However, just because insurance is essential doesn't mean it has to be expensive. Here are six ways (with a bonus subset of nine more) to make your premiums more palatable.
1. Seek discounts: Ask your insurer, or potential insurers, about ways to reduce your premiums. Here is just a sampling of factors that may qualify you for a discount:
- A young driver on your policy with an impressive grade point average
- Taking a defensive-driving course
- Refraining from dangerous activities such as skydiving, piloting small planes, or doing both at the same time
- Exercising regularly and/or not being overweight
- Using an approved (by your insurer) anti-theft device in your vehicle
- A certain number of years of maintaining a good record with the same insurer
- Not drinking or smoking
- Housing your car in a garage versus on the street
- Membership in some professional associations that provide bulk business to the insurer
2. Pay yearly, not monthly: Even if you are charged just $5 a month ($60 a year) to be able to pay on a monthly basis, that's a considerable chunk of change.
3. Don't buy life insurance for your children: Unless they support your family with the proceeds from their Broadway career, it's a waste of money.
4. Keep policies current: Your age, your address, and your possessions are just some of the many factors that affect the price of insurance. Update your policies when you move, celebrate your 26th birthday (if you're a male driver), acquire Great-aunt Anne's Fiestaware set, or sell your antique Vespa scooter collection.
5. Obey the law: Being liable for an accident or having moving violations on your record (speeding tickets, DWI, reckless driving, etc.) will likely result in a higher premium.
6. Buy in bulk: You can often get a break for buying your various forms of insurance from the same carrier.
For more on the world of legalized gambling, visit our Insurance Center.
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AT&T (NYSE: T), currently trading at about $14.50 a share, says it will seek shareholder approval for a 1-for-5 reverse stock split.
Sears (NYSE: S) soared higher today after raising its first-quarter profit estimates by over 50%. The nation's number-four retailer says revenues are still a bit on the soft side, but better inventory and expense management is fueling the improvement.
The New York Times reports Disney's (NYSE: DIS) ABC television network has come to an agreement with Ted Koppel. The deal calls for Koppel to continue anchoring Nightline in the same 11:35 p.m. slot for at least another two years. Koppel and the entire ABC news division were up in arms after discovering the network was trying to lure David Letterman away from CBS to take over Nightline's time slot.
Genentech (NYSE: DNA) reported first-quarter results after the bell yesterday that were mostly in line with expectations. The biotech behemoth saw profits rise 29% from the same period last year, with product sales increasing by 22%.
General Motors (NYSE: GM) has come up with a not-so-appealing way of cutting costs: Give consumers a less-safe product. The world's top automaker says it may no longer offer such safety features as antilock brakes and side air bags as standard on many models.
Qwest Communications' (NYSE: Q) stock may have fallen 64% last year, but CEO Joseph Nacchio's compensation increased over 500%, from $4.22 million to $27 million. In fact, USA Today reports Nacchio's total compensation -- including the value of potential stock option gains -- topped $217 million. Meanwhile, Qwest revealed yesterday it may have to restate earnings for some prior periods in light of an ongoing SEC investigation.
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