bluuebunny/crossref_metadata_2025 huggingface dataset:
REVISITING THE HIGH YIELD BOND MARKET: MATURE BUT NEVER DULL
Authors: Altman Edward I.
Published: April 2005

Ten years ago the author of this article wrote a piece for this journal reviewing the history of the “junk” bond market from its start in the mid‐1970s through the collapse of the leveraged restructuring movement at the end of the 1980s. In the summer of 1990, the high yield market was at a critical point in its development. With defaults high and still rising, the yield spreads over Treasuries of junk bonds had jumped to over 700 basis points and the new issue market had all but dried up. Drexel Burnham Lambert had recently filed for Chapter 11, and Michael Milken had been indicted. At that time, when many market observers were pronouncing the junk bond market “finished,” the author of this article said that the market performed a valuable economic function and, despite investor losses, would weather the crisis.

In describing the remarkable recovery of the high yield market in 1990s, this article notes some important changes in the market. And, although there are now troubling similarities (including rising default rates and spreads) to conditions in the early ‘90, there are also important differences that are likely to make the start of this decade a better one for investors.
ARE PROJECT FINANCE LOANS DIFFERENT FROM OTHER SYNDICATED CREDITS?
Authors: Kleimeier Stefanie , Megginson William L.
Published: April 2005

This paper provides the first full‐length empirical analysis of project finance, which is defined as “limited or non‐recourse financing of a newly to be developed project through the establishment of a vehicle company.” The article compares the characteristics of a sample of 4,956 project finance loans (worth $634 billion) to comparable samples of non‐project finance loans, all of which are drawn from a comprehensive sample of 90,784 syndicated loans (worth $13.2 trillion) booked on international capital markets since 1980.

The authors find that project finance (PF) loans differ significantly from non‐project finance loans in that PF loans have a longer average maturity, are more likely to have third‐party guarantees, and are far more likely to be extended to non‐U.S. borrowers and to borrowers in riskier countries. Project finance credits also involve more participating banks, have fewer loan covenants, are more likely to use fixed‐rate rather than floating‐rate loan pricing, and are more likely to be extended to borrowers in tangible‐asset‐rich industries, such as real estate and electric utilities. Despite being nonrecourse finance, floating‐rate project finance loans have lower credit spreads (over LIBOR) than do most comparable non‐PF loans. The authors also report that projects funded with PF loans are heavily leveraged, with an average loan to value ratio of 67%.
AN INSTITUTIONAL INNOVATION TO REDUCE THE AGENCY COSTS OF PUBLIC CORPORATE BONDS
Authors: Amihud Yakov , Garbade Kenneth , Kahan Marcel
Published: April 2005

This paper proposes an institutional innovation in the structure of public bonds that is intended to provide some of the advantages of private loans‐ active monitoring, tight covenants, and ease of reorganization‐while retaining the benefits of liquidity and ease of diversification provided by publicly traded securities. The authors propose that a publicly registered corporate bond provide for a “supertrustee” who will act on behalf of bondholders. The supertrustee will be charged with responsibility to monitor the compliance of the borrower with the terms of the bond covenants and given exclusive authority to negotiate amendments to the covenants and decide what action to take in the event of a breach of a covenant.
OPEN MARKET REPURCHASES: THE VALUE FROM BUYING SHARES AT A DISCOUNT
Authors: Porter Gary E. , Roenfeldt Rodney L. , Sicherman Neil W.
Published: April 2005

This article shows that share repurchase announcements create value for shareholders when the shares of the industrial firm sell at a discount from the value of the underlying assets, even when shareholders and managers share full information about the firm's prospects and the firm's operating performance is not expected to improve. The value created by capturing the discount on the repurchased shares is a function of only two variables: the percentage discount prior to the announcement and the proportion of shares to be repurchased.

For a sample of 100 companies selling below net asset value, the authors report that the excess stock returns surrounding their announcements of open market repurchases are (significantly) positively associated with the authors' estimates of the value captured from buying shares at a discount. Moreover, the stock market's response to repurchase announcements by companies that are selling at a discount is considerably more positive than to announcements by firms selling at a premium.
THE PROMISE OF REAL OPTIONS
Authors: Damodaran Aswath
Published: April 2005

In recent years, both practitioners and academics have argued that traditional discounted cash flow models do a poor job of capturing the value of the options embedded in many corporate actions. This paper shows how option pricing models used in valuing financial assets can be used to value three kinds of real options that are often built into corporate projects: the option to delay, the option to expand, and the option to abandon. As a number of examples in this paper suggest, corporate investments that would be rejected using conventional DCF analysis can sometimes be justified by the value of the strategic options they provide. As the illustrations also show, however, the pricing of real options is considerably more difficult than the pricing of financial options and adjustments must often be made to capture the complexity of real investments.
REAL OPTIONS AND CORPORATE RISK MANAGEMENT
Authors: Triantis Alexander J.
Published: April 2005

By formulating an integrated strategy that combines the creation and exercise of real options together with other risk management techniques, management can reduce risk and thereby increase firm value. For example, a company that is in a position to delay investing without losing its competitive edge, to abandon a project that becomes unprofitable, or to adjust its operating strategy at low cost can avoid risks and exploit profitable opportunities. But, even when real options are used in this way to limit the risk profile of the firm, financial derivatives can help to hedge any residual risk that would otherwise affect the value of the real options and the overall firm.

An integrated risk management approach requires a careful process of diagnosing a company's risk exposure. First, management must decompose the company's risk exposure to understand the fundamental sources of risk. Second, the company's capacity to bear risk must be determined, which requires an understanding of why individual risks (if left unmanaged) would reduce the value of the firm. Third, different approaches for addressing risk should be explored, ranging from diversification to use of financial derivatives and other contracts to investing in (or exercising) a wide array of real options. Fourth, the firm must properly integrate the different risk management solutions to optimize its strategy.
TRACKING STOCKS AND THE ACQUISITION OF REAL OPTIONS
Authors: Raynor Michael E.
Published: April 2005

Despite their wellpublicized conflict of‐interest problems, tracking stocks can be a superior alternative to equity carveouts in a particular, though increasingly common, set of circumstances—namely, when companies launch highrisk, capitalintensive startups that are expected to have valuable future synergies with their main operating divisions. Like equity carveouts, tracking stocks reduce the well‐known conglomerate discount by exposing the startups directly to capital market discipline and incentives. But, in contrast to carveouts, tracking stocks leave strategic and operating control in the hands of single board of directors and management team. This feature of tracking stocks is likely to add significant value by reducing the eventual cost of integrating the startup operation into the firm's core operations. The author supports this view by comparing the different approaches taken by two telecommunications companies, BCE and Sprint, in financing (and later integrating) their wireless communications services.
OPTION EXERCISE GAMES: THE INTERSECTION OF REAL OPTIONS AND GAME THEORY
Authors: Grenadier Steven R.
Published: April 2005

While the real options approach has proven useful in providing an analytical framework for analyzing the timing of investment decisions, a notable failure of the approach has been an almost complete lack of strategic considerations. In standard real options models, invest‐ment (and exercise) strategies are for‐mulated in isolation, without considering the potential impact of other firms' exercise strategies. This paper illustrates how the intersection of real options and game theory provides powerful new insights into the behavior of economic agents under uncertainty.

Introducing strategic considerations into the real options framework can lead to a rethinking of standard real option analysis. For example, one of‐ten cited conclusion of the real options literature is the overturning of the standard capital budgeting rule of in‐vesting immediately in any project with a positive NPV. Because the fu‐ture value of the asset is uncertain, there may be significant benefits to deferring the investment until condi‐tions prove even more favorable. But this result clearly depends on the lack of competitive access to the project. If firms fear preemption, then the option to wait becomes less valuable. For example, while the standard real op‐tions models suggest that a real estate developer should wait until the devel‐opment option is considerably “in the money,” competition and the fear of preemption will likely force develop‐ers to build much earlier.
BANKING ON REAL OPTIONS
Authors: Patrick Steven C.
Published: April 2005

This article discusses why many companies use committed bank facilities to finance their real options. The pace of change in the current economic environment has increased the value of financial flexibility. If and when companies choose to exercise their real options, they often require capital to finance these initiatives. Committed bank facilities meet this requirement by providing the assurance of funding (subject to explicit conditions), or at least a starting point for raising the new capital.

Raising the capital necessary to finance very large real options is so critical that many companies use a single financial advisor to evaluate M&A transactions and raise the funds. In the case of ClubCorp, Bank of America provided M&A advice and an interim loan to finance an acquisition that exceeded the company's committed bank capacity. Later that year, Bank of America “agented” a new deal to refinance this acquisition debt. In a second case, Ferrellgas hired Bank of America to evaluate, help negotiate, and finance its acquisition of Thermogas. Financing this transaction required a bridge loan and synthetic lease as well as monetizing $175 million of equity securities.
WHY SOCIETY NEEDS “IRRATIONAL EXUBERANCE”—AND WHAT THIS MEANS FOR VALUATIONS AND MONETARY POLICY
Authors: Brenner Reuven
Published: April 2005

Despite all the talk of a New Economy and the revolutionary import of the Internet, this article suggests that there is nothing really new under the sun. When Christopher Columbus was building the ships for his expeditions to the East Indies, only the vaguest estimates could be made of their potential value. At this stage, nobody knew if Columbus would be able to manage the crossing, when the ships would return, and what cargo they would eventually carry. In this sense, Columbus's venture bears a striking resemblance to many of today's Internet stocks.

This paper raises and attempts to answer a number of interesting questions. For example, how do risky ventures with very high fixed (startup) costs but very low expected variable costs raise the capital necessary to fund the fixed costs? What role should government (and, in particular, monetary) policy play in encouraging (or discouraging) funding for such ventures? And how does one establish the value of such ventures when there is little or no revenue and, in some cases, no clearly defined product?

The answer to the first question is investor enthusiasm–or, in Alan Greenspan's terms, “irrational exuberance.” Irrational exuberance plays a very important economic role in giving entrepreneurs access to the cheap financing necessary to fund ventures with heavy startup costs. Indeed, “irrational exuberance” may be the best solution for financing large fixed costs, not only because it is a private (as opposed to a government‐financed) solution, but because it gives investors direct access to the risks and rewards of promising investment opportunities. Before the recent “democratization” of capital markets, such ventures would have been funded by large corporations if not government agencies.

As for the third question, this paper suggests there is only one useful way to estimate the value of ventures without revenues or products. The author provides a back‐of‐the‐envelope, “Fermitype” valuation method that is based on the principle of “human capital arbitrage.” For those Internet startups that lure top executives away from established firms with large grants of stock options but relatively low salaries, there is a “breakeven level” for the future stock price that can be calculated using a fairly modest amount of information about the executive's past and current compensation plans. For outside investors, such movements of human capital provide what is perhaps the most reliable basis for estimating the value of the firm.
EVA AND THE “NEW ECONOMY”
Authors: Milano Gregory V.
Published: April 2005

Some have observed that the new economy means the end of the EVA performance measurement and incentive compensation system. They claim that although the EVA system is useful for oldline companies with heavy investments in fixed assets, the efficient management of investor capital is no longer an imperative for newage firms that operate largely without buildings and machinery–and, in some cases, with negative working capital.

This article argues that EVA is not only suitable for the emerging companies that lead the new economy, but even more important for such firms than for their “rust belt” predecessors. While there may be a new economy in terms of trade in new products and services, there is no new economics– the principles of economic valuation remain the same. As in the past, companies will create value in the future only insofar as they promise to produce returns on investor capital that exceed the cost of capital.

It has made for sensational journalism to speak of companies with high valuations and no earnings, but this is in large part the result of an accounting framework that is systematically flawed. New economy companies spend much of their capital on R&D, marketing, and advertising. By treating these outlays as expenses against current profits, GAAP accounting presents a grossly distorted picture of both current and future profitability. By contrast, an EVA system capitalizes such investments and amortizes them over their expected useful life.

For new economy companies, the effect of such adjustments on profitability can be significant. For example, in applying EVA accounting to Real Networks, Inc., the author shows that although the company reported increasing losses in recent years, its EVA has been steadily rising–a pattern of profitability that corresponds much more directly to the change in the company's market value over the same period.

Thus, for stock analysts that follow new economy companies, the use of EVA will get you closer to current market values than GAAP accounting. And for companies intent on ensuring the right level of investment in intangibles– neither too much nor too little– EVA is likely to send the right message to managers and employees. The recent decline in the Nasdaq suggests that stock market investors are starting to look for the kind of capital efficiency encouraged by an EVA system.
FREE CASH FLOW AND PUBLIC GOVERNANCE: THE CASE OF ALASKA
Authors: Lee Dwight R. , Verbrugge James A.
Published: April 2005

In a widely cited 1986 article in the American Economic Review, Michael Jensen gave the concept of free cash flow (FCF) a new twist by redefining it as cash flow in excess of that required to fund all projects with positive net present values. Put another way, FCF represents funds available in the firm that managers may choose to hold as idle cash, return to shareholders, or invest in projects with returns below the firm's cost of capital. In redefining FCF in this way, Jensen converted FCF from a measure of economic income and value into a measure of corporate assets available for discretionary, and potentially value‐destroying, use by firm managers. And, as he argued in his important article, managers in mature businesses with substantial free cash flow have a tendency to destroy value by plowing too much capital back into those businesses or, often worse, making ill‐advised acquisitions in unrelated businesses.

Several methods have been developed in financial markets and internal corporate governance systems to discourage managers from wasting FCF. Better monitoring by boards of directors, large ownership blocks, and properly aligned management compensation contracts are all parts of the solution. And the extraordinary increase in stock repurchases in recent years, invariably applauded by investors, is another illustration of the market's success in encouraging companies to address their free cash flow problems.

But if the “FCF problem” of the private sector has attracted considerable attention from finance scholars, the problem is even more acute in the public sector, where FCF can be thought of as tax revenue in excess of what is required to finance well‐defined and generally accepted levels of public services. Unlike the private sector, in the public sector there are neither measures nor mechanisms by which to monitor and constrain wasteful spending by elected officials. In this article, the authors attempt to measure the costs to taxpayers of government FCF using the case of Alaska, which since 1969 has received a huge windfall of tax revenue from North Slope oil leases. After examining the state's public finances from 1968 through 1993, the authors offer $25 billion as a conservative estimate of the social losses from Alaska's waste of free cash flow during that 25‐year period.
STRATEGIC PERFORMANCE MEASUREMENT SYSTEMS: TRANSLATING STRATEGY INTO RESULTS
Authors: Gates Stephen
Published: April 2005

A large and growing number of companies worldwide are adopting strategic performance measurement (SPM) systems to help them execute their business strategies. SPM systems use some combination of financial, strategic, and operating measures to evaluate management's success in improving operating efficiency and adding value for shareholders. In many cases, the SPMs also provide the primary basis for rewarding top management, divisional operating managers, and, increasingly, rank‐and‐file employees. Some SPM systems are based entirely on a financial measure like economic value added (or EVA), which encourages managers to consider the opportunity cost of investor capital in making all operating and investment decisions. Other systems are based heavily on nonfinancial considerations, such as the balanced scorecard's emphasis on customer and employee satisfaction, operational excellence, and new product introduction.

In this article, the author uses the findings of his recent survey of 113 North American and European companies to shed light on a number of questions: What are the most popular measures in such systems—are they primarily financial, nonfinancial, or amix of the two? To what extent is incentive compensation tied to such measures—and how far down in the organization are such measures (and incentives) extended? What are the most formidable challenges to implementing SPM systems in large corporations, with often diverse collections of businesses and tens if not hundreds of thousands of employees?

Among the article's most notable conclusions, a majority of companies expect in the next three years to publish SPM targets and results in their annual reports. The most commonly cited financial SPMs will be cash flow, return on capital employed, and other variations of EVA. The most frequently cited nonfinancial SPMs are customer satisfaction, market share, and new product development. The greatest challenge in implementing SPMs is translating the vision and strategic objectives at the corporate level into performance measures that are relevant to activities at the business unit level, and securing buy‐in from business unit managers and employees.
THE VIABLE EVA CENTER (OR, HOW TO SLICE A COMPANY SO IT DOESN'T BLEED)
Authors: Hodak Marc
Published: April 2005

How a company is sliced, or broken up into divisions of various sorts, has a huge effect on the accountability and hence the behavior of its managers. Senior management faces a tradeoff between delegating authority to subordinates who have the best information for specific decisions, and maintaining authority to avoid parochial behavior that might hurt the organization as a whole. Divisions exist within companies to provide a framework for such delegation. A divisional structure allows decision‐making authority to be pushed down along with accountability for results. Thus, how divisions are established is critical to decision‐making, motivation, and accountability.

The ultimate test of a well‐formed division is a high degree of correspondence between division financial results and financial results for the company as a whole. When an increase in divisional EVA can contribute to a decline in company‐wide EVA, this is evidence of a poorly formed division, or what the author calls a “non‐viable” EVA center. This article provides a framework for defining a “viable EVA center” as well as three ways of making existing divisions more viable: (1) use of transfer pricing and intrafirm charges; (2) reorganization; and (3) aggregation of divisional results.
THE GROWTH OF INSTITUTIONAL STOCK OWNERSHIP: A PROMISE UNFULFILLED
Authors: Edwards Franklin R. , Hubbard R. Glenn
Published: April 2005

Despite the substantial growth of institutional ownership of U.S. corporations in the past 20 years, there is little evidence that institutional investors have acquired the kind of concentrated ownership positions required to be able to play a dominant role in the corporate governance process. Institutional ownership remains widely dispersed among firms and institutions in large part because of significant legal obstacles that discourage institutional investors both from taking large block positions and from exercising large ownership positions to control corporate managers. Thus, although much of the growth of institutional ownership since 1980 has been accounted for by the growth of mutual funds and private pension funds, there continue to be strong deterrents to the accumulation and use of large ownership positions to influence corporate managers.

Another potentially important factor discouraging concentrated investments are incentive schemes that effectively reward money managers for producing returns that do not vary much from the S&P 500 (or whatever sector the manager is supposed to be representing). Using a very different incentive scheme that offers managers a share of the excess returns (as well as penalties for failure to meet benchmarks), a relatively new class of “hedge funds” has emerged that provides both more concentrated ownership positions and higher risk‐adjusted rates of return.

To encourage mutual funds to take a more activist corporate governance role and to behave more like hedge funds, the authors recommend that current legal restrictions on mutual funds be relaxed so that mutual funds have a greater incentive to hold large ownership positions in companies and to use those positions to more effectively monitor corporate managers. In particular, the “five and ten” portfolio rules applicable to mutual funds could be repealed and replaced with a standard of prudence and diligence more in keeping with portfolio theory; mutual funds could be given greater freedom to adopt redemption policies that would be more conducive to holding larger ownership positions; and institutional investors could be permitted to employ a variety of incentive fee structures to encourage fund managers to pursue more pro‐active investment strategies. The prospect of actively involving institutional fund managers in the corporate governance process may be our best hope for improving U.S. corporate governance.
THE RISE IN MANAGERIAL STOCK OWNERSHIP
Authors: Holderness Clifford G. , Kroszner Randall S. , Sheenan Dennis P.
Published: April 2005

Despite the widespread view from Berle and Means onward that ownership of U.S. companies has become increasingly separated from managerial control, the authors report that managerial ownership of public corporations is markedly higher today than in 1935. Using a comprehensive sample of the 1,500 publicly traded firms in 1935 and a comparable sample of 4,200 firms in 1995, their study finds that managerial ownership increased from an average of 13% in 1935 to 21% in 1995. In terms of real (1995) dollar values, average managerial ownership increased from $18 million to $73 million over the same 60‐year period.

One potential explanation for this increase is that greater reliance on managerial ownership has substituted for less reliance on other incentive alignment devices, such as pay‐for performance and the market for corporate control. The authors, however, report just the opposite. The use of such other corporate governance mechanisms has generally also increased over time, suggesting that the top managements of today's publicly traded corporations face greater pressure from investors and boards of directors than managements earlier in the century.

An alternative explanation concern possible changes over time in the effects of certain company characteristics on the costs and benefits of using managerial ownership as a control device. While most of the characteristics the authors examined had the same relationship to managerial ownership in both periods, the role of volatility was different. In 1935, managerial ownership was inversely related to firm volatility; that is, higher volatility was associated with lower managerial ownership. In 1995, however, the relationship of managerial ownership to volatility was “nonlinear”; managerial ownership was positively related to firm volatility at low and moderate levels of volatility but the relationship turns negative when firm volatility is high. The overall lower level of volatility today, together with advances in capital markets and financial theory that have reduced the costs of hedging, appear to have reduced the costs of managers holding large stakes in their firms.
Controversy Associated With the So-Called “Follower Forces”: Critical Overview
Authors: Elishakoff Isaac
Published: April 2005

This paper is inspired by two articles on the title subject, namely by Koiter and by Sugiyama, Langthjem and Ryu. The former warned the engineering community to beware of the above forces. The latter maintained that these forces are realistic. It is hoped that this review sheds some additional light on an issue that seems to perplex many students of dynamic stability. The paper does not contain any new information unknown to researchers; it represents a critical review of pertinent papers dedicated to the topic of dynamic stability of structures under so called “follower” forces. The attempt here is to present an account of the literature in a manner that is both objective and humble. This paper reviews both the theoretical and experimental contributions to the theory of nonconservative problems with a single objective in mind, to attempt to answer a nagging question “Is the model of the statically applied follower forces useful?,” that arose due to the papers by Koiter and Sugiyama, Langthjem and Ryu. This article explores the static and dynamic stability criteria as pertaining to the nonconservative problems; the experimental side of the problem; the results pertaining to Beck’s column placed on homogenous or inhomogeneous elastic foundations; and criticisms expressed in the literature about the result on the immunity of the instability load to the Winkler foundation modulus: The paper then discusses Koiter’s ideas on nonconservative instability problems, and attempts to provide insights on the abovementioned question. Special emphasis is placed on pipes conveying fluid with or without an elastic foundation. It then summarizes the literature on the “follower forces.” Such a summary is inevitably incomplete because of the huge literature accumulated so far on the nonconservative problems in the theory of elastic stability. There are 202 references cited in this review article, and a supplementary bibliography is provided.
Formability and Weld Zone Analysis of Tailor-Welded Blanks for Various Thickness Ratios
Authors: Chan L. C. , Chan S. M. , Cheng C. H. , Lee T. C.
Published: April 2005

Cold-rolled steel sheets of thicknesses ranging from 0.5 to 1.0 mm were used to produce tailor-welded blanks (TWBs) with various thickness ratios. In this study, the formability of the TWBs, as well as the mechanical characteristics of the weld zones, were analyzed experimentally under the effects of various thickness ratios of TWBs. The formability of the TWBs was evaluated in terms of three measures—failure mode, forming limit diagram, and minimum major strain, whereas the mechanical characteristics of the weld zones were investigated by tensile testing, metallographic study, and microhardness measurement. In particular, circular TWBs with different radii and cutoff widths were designed where all the welds were located in the center of the blanks and perpendicular to the principal strain direction. Nd:YAG laser butt-welding was used to weld the TWB specimens of different thickness ratios. The experimental findings in this study showed that the higher the thickness ratio of the TWBs, the lower the forming limit curve level, and the lower formability. The minimum major strain was clearly inversely proportional to the thickness ratio of the TWBs. On the other hand, the results of uniaxial tensile tests clearly illustrated that there was no significant difference between the tensile strengths of the TWBs and those of the base metals. The metallographic study demonstrated a difference of grain size in the materials at base metal, heat-affected zones, and fusion zone. The microhardness measurement indicated that the hardness in the fusion zone increased by about 60% of the base metal.
Mesodamage Evolution in Polycrystals
Authors: Chadli M. , Abdul-Latif A.
Published: April 2005

A micromechanical model of damaged elasto-inelastic behavior is proposed to predict the plastic fatigue life for fcc metallic polycrystals under multiaxial loading paths. This model is expressed in the time-dependent plasticity for a small strain assumption. In order to generalize and then to increase the model applicability (with respect to other works of the author) in describing the cyclic stress-strain evolution during plastic fatigue, it is therefore assumed that a damage variable initiates and then evolves at the grain level where the phenomenon of the localized plastic deformation occurs. The associated thermodynamic force of the damage variable is determined as a total granular energy (elastic and inelastic). The transition of the elastic strain from the single to the polycrystal, which is classically performed by averaging procedures in this type of modeling, is modified due to the coupling of such a strain with damage. The developed model is tested under different multiaxial cyclic loading situations (tension-compression and tension-torsion with different out-of-phase angles). The effects the loading paths and the grains aggregate type on the fatigue life are appropriately investigated. It is demonstrated that the model can correctly describe the overall and local damaged behavior of polycrystals.
Multiscale Model to Study the Effect of Interfaces in Carbon Nanotube-Based Composites
Authors: Namilae S. , Chandra N.
Published: April 2005

In order to fully harness the outstanding mechanical properties of carbon nanotubes (CNT) as fiber reinforcements, it is essential to understand the nature of load transfer in the fiber matrix interfacial region of CNT-based composites. With controlled experimentation on nanoscale interfaces far off, molecular dynamics (MD) is evolving as the primary method to model these systems and processes. While MD is capable of simulating atomistic behavior in a deterministic manner, the extremely small length and time scales modeled by MD necessitate multiscale approaches. To study the atomic scale interface effects on composite behavior, we herein develop a hierarchical multiscale methodology linking molecular dynamics and the finite element method through atomically informed cohesive zone model parameters to represent interfaces. Motivated by the successful application of pullout tests in conventional composites, we simulate fiber pullout tests of carbon nanotubes in a given matrix using MD. The results of the pullout simulations are then used to evaluate cohesive zone model parameters. These cohesive zone models (CZM) are then used in a finite element setting to study the macroscopic mechanical response of the composites. Thus, the method suggested explicitly accounts for the behavior of nanoscale interfaces existing between the matrix and CNT. The developed methodology is used to study the effect of interface strength on stiffness of the CNT-based composite.
Computational Modeling of Ventricular Mechanics and Energetics
Authors: Smith Nicolas , Stevens Carey , Hunter Peter
Published: April 2005

The system of equations, material constitutive laws, and boundary conditions required to construct an anatomically and biophysically based model of ventricular mechanics is reviewed. The models use high-order field descriptions to represent the geometry and embedded microstructural information relevant to whole organ function. Constitutive laws are presented which characterize the nonlinear passive elasticity of cardiac tissue and model the active development of tension produced by myocyte contraction. Finally, the integration of metabolic energetics with organ-scale mechanical simulations is discussed and future research directions are proposed.
Relaxation of Peening Residual Stresses Due to Cyclic Thermo-Mechanical Overload
Authors: Meguid S. A. , Shagal G. , Stranart J. C. , Liew K. M. , Ong L. S.
Published: April 2005

Shot-peening induced residual stresses can be relaxed due to cyclic loading. This relaxation plays an important role in determining the fatigue life of the peened components. It is therefore the purpose of this study to conduct comprehensive three-dimensional dynamic elasto-plastic finite element analysis of the joint peening treatment and relaxation process. In this regard, a novel symmetry cell is developed and used to model the multiple impact indentations resulting from multiple impingements of a cluster of shots. The model was further extended to integrate the relaxation resulting from cyclic loading at stresses above the yield strength of the material. This integrated model accounts for the main features of both stages by considering strain-rate effects, shot and target inertia and the dependence of the mechanical properties of the target material on temperature. A wide spectra of cyclic mechanical and thermal loads as well as their combinations is considered and the resulting relaxed residual stress field is determined. As an application, the model was used to predict the residual stress relaxation in a high-strength steel target made from AISI 4340 under different peening and thermomechanical cyclic overload.
Putative Polyketide Synthase and Laccase Genes for Biosynthesis of Aurofusarin in
Gibberella zeae
Authors: Kim Jung-Eun , Han Kap-Hoon , Jin Jianming , Kim Hun , Kim Jin-Cheol , Yun Sung-Hwan , Lee Yin-Won
Published: April 2005

Mycelia of
Gibberella zeae
(anamorph,
Fusarium graminearum
), an important pathogen of cereal crops, are yellow to tan with white to carmine red margins. We isolated genes encoding the following two proteins that are required for aurofusarin biosynthesis from
G. zeae
: a type I polyketide synthase (PKS) and a putative laccase. Screening of insertional mutants of
G. zeae
, which were generated by using a restriction enzyme-mediated integration procedure, resulted in the isolation of mutant S4B3076, which is a pigment mutant. In a sexual cross of the mutant with a strain with normal pigmentation, the pigment mutation was linked to the inserted vector. The vector insertion site in S4B3076 was a HindIII site 38 bp upstream from an open reading frame (ORF) on contig 1.116 in the
F. graminearum
genome database. The ORF, designated
Gip1
(for
Gibberella zeae
pigment mutation 1), encodes a putative laccase. A 30-kb region surrounding the insertion site and
Gip1
contains 10 additional ORFs, including a putative ORF identified as
PKS12
whose product exhibits about 40% amino acid identity to the products of type I fungal
PKS
genes, which are involved in pigment biosynthesis. Targeted gene deletion and complementation analyses confirmed that both
Gip1
and
PKS12
are required for aurofusarin production in
G. zeae
. This information is the first information concerning the biosynthesis of these pigments by
G. zeae
and could help in studies of their toxicity in domesticated animals.
Incorporation of Glucose under Anoxic Conditions by Bacterioplankton from Coastal North Sea Surface Waters
Authors: Alonso Cecilia , Pernthaler Jakob
Published: April 2005

It has been hypothesized that the potential for anaerobic metabolism might be a common feature of bacteria in coastal marine waters (L. Riemann and F. Azam, Appl. Environ. Microbiol.
68:
5554-5562, 2002). Therefore, we investigated whether different phylogenetic groups of heterotrophic picoplankton from the coastal North Sea were able to take up a simple carbon source under anoxic conditions. Oxic and anoxic incubations (4 h) or enrichments (24 h) of seawater with radiolabeled glucose were performed in July and August 2003. Bacteria with incorporated substrate were identified by using a novel protocol in which we combined fluorescence in situ hybridization and microautoradiography of cells on membrane filters. Incorporation of glucose under oxic and anoxic conditions was found in α-
Proteobacteria,
γ
-Proteobacteria
, and the
Cytophaga-Flavobacterium
cluster of the
Bacteroidetes
at both times, but not in marine
Euryarchaeota
. In July, the majority of cells belonging to the α-proteobacterial
Roseobacter
clade showed tracer incorporation both in oxic incubations and in oxic and anoxic enrichments. In August, only a minority of the
Roseobacter
cells, but most bacteria affiliated with
Vibrio
spp., were able to incorporate the tracer under either condition. A preference for glucose uptake under anoxic conditions was observed for bacteria related to
Alteromonas
and the
Pseudoalteromonas-Colwellia
group. These genera are commonly considered to be strictly aerobic, but facultatively fermentative strains have been described. Our findings suggest that the ability to incorporate substrates anaerobically is widespread in pelagic marine bacteria belonging to different phylogenetic groups. Such bacteria may be abundant in fully aerated coastal marine surface waters.
Biocatalytic Production of Perillyl Alcohol from Limonene by Using a Novel
Mycobacterium
sp. Cytochrome P450 Alkane Hydroxylase Expressed in
Pseudomonas putida
Authors: van Beilen Jan B. , Holtackers René , Lüscher Daniel , Bauer Ulrich , Witholt Bernard , Duetz Wouter A.
Published: April 2005

A number of oxygenated monoterpenes present at low concentrations in plant oils have anticarcinogenic properties. One of the most promising compounds in this respect is (−)-perillyl alcohol. Since this natural product is present only at low levels in a few plant oils, an alternative, synthetic source is desirable. Screening of 1,800 bacterial strains showed that many alkane degraders were able to specifically hydroxylate
l
-limonene in the 7 position to produce enantiopure (−)-perillyl alcohol. The oxygenase responsible for this was purified from the best-performing wild-type strain,
Mycobacterium
sp. strain HXN-1500. By using N-terminal sequence information, a 6.2-kb ApaI fragment was cloned, which encoded a cytochrome P450, a ferredoxin, and a ferredoxin reductase. The three genes were successfully coexpressed in
Pseudomonas putida
by using the broad-host-range vector pCom8, and the recombinant converted limonene to perillyl alcohol with a specific activity of 3 U/g (dry weight) of cells. The construct was subsequently used in a 2-liter bioreactor to produce perillyl alcohol on a scale of several grams.
Optimization of Cholesterol Removal by Probiotics in the Presence of Prebiotics by Using a Response Surface Method
Authors: Liong M. T. , Shah N. P.
Published: April 2005

Lactobacillus casei
ASCC 292 was grown in the presence of six prebiotics, namely, sorbitol, mannitol, maltodextrin, high-amylose maize, fructooligosaccharide (FOS), and inulin, in order to determine the combination of probiotic and prebiotics that would remove the highest level of cholesterol. A first-order model showed that the combination of
L. casei
ASCC 292, FOS, and maltodextrin was the most efficient for the removal of cholesterol, and the optimum experimental region was developed by using the steepest ascent. This led to the middle points of probiotic (1.70% [wt/vol]), FOS (4.80% [wt/vol]), and maltodextrin (6.80% [wt/vol]) for the development of a central composite design for optimization. Perturbation plot, response surface, and coefficient estimates showed that all three factors had significant quadratic effects on cholesterol removal, with FOS showing the most conspicuous quadratic change. A second-order polynomial regression model estimated that the optimum condition of the factors for cholesterol removal by
L. casei
ASCC 292 is 1.71% (wt/vol) probiotic, 4.95% (wt/vol) FOS, and 6.62% (wt/vol) maltodextrin. Validation experiments showed that the predicted optimum conditions were more efficient than the high and low levels of the factors and the center points. A response surface method proved reliable for developing the model, optimizing factors, and analyzing interaction effects. Analyses of growth, substrate utilization, growth yield, mean doubling time, and short-chain fatty acid (SCFA) production by the use of quadratic models indicated that cholesterol removal was growth associated. The concentration of
L. casei
ASCC 292 had the most significant quadratic effect on all responses studied, except for substrate utilization and SCFA production, which were significantly (
P
< 0.05) influenced by the interactions between the probiotic and both prebiotics, indicating that they were closely associated with the uptake of prebiotics.
Web-Type Evolution of
Rhodococcus
Gene Clusters Associated with Utilization of Naphthalene
Authors: Kulakov Leonid A. , Chen Shenchang , Allen Christopher C. R. , Larkin Michael J.
Published: April 2005

Clusters of genes which include determinants for the catalytic subunits of naphthalene dioxygenase (
narAa
and
narAb
) were analyzed in naphthalene-degrading
Rhodococcus
strains. We demonstrated (i) that in the region analyzed homologous gene clusters are separated from each other by nonhomologous DNA, (ii) that there are various degrees of homology between related genes, and (iii) that
nar
genes are located on plasmids in strains NCIMB12038 and P400 and on a chromosome in P200. These observations suggest that genetic exchange and reshuffling of genetic modules, as well as vertical descent of the genetic information, were the main routes in the evolution of naphthalene degradation in
Rhodococcus
. These conclusions were supported by studies of transcription patterns in the region analyzed. It was found that the
nar
region is not organized into a single operon but there are several transcription units which differ in the strains investigated. The
narA
and
narB
genes were found to be transcribed as a single unit in all strains analyzed, and their transcription was induced by naphthalene. The putative aldolase gene (
narC
) was found on the same transcript only in strains P200 and P400. In NCIMB12038 transcription of two more gene clusters was induced by growth on naphthalene. Transcription start sites for
narA
and
narB
were found to be different in all of the strains studied. Putative regulatory genes (
narR1
and
narR
2) were transcribed as a single mRNA in naphthalene-induced cells. At the same time, a number of the genes known to be essential for naphthalene catabolism in gram-negative bacteria were not found in the region analyzed.
Lignin-Derived Compounds as Efficient Laccase Mediators for Decolorization of Different Types of Recalcitrant Dyes
Authors: Camarero Susana , Ibarra David , Martínez María Jesús , Martínez Ángel T.
Published: April 2005

Ten phenols were selected as natural laccase mediators after screening 44 different compounds with a recalcitrant dye (Reactive Black 5) as a substrate. Their performances were evaluated at different mediator/dye ratios and incubation times (up to 6 h) by the use ofPycnoporus cinnabarinusandTrametes villosalaccases and were compared with those of eight known synthetic mediators (including -NOH- compounds). Among the six types of dyes assayed, only Reactive Blue 38 (phthalocyanine) was resistant to laccase-mediator treatment under the conditions used. Acid Blue 74 (indigoid dye), Reactive Blue 19 (anthraquinoid dye), and Aniline Blue (triarylmethane-type dye) were partially decolorized by the laccases alone, although decolorization was much more efficient and rapid with mediators, whereas Reactive Black 5 (diazo dye) and Azure B (heterocyclic dye) could be decolorized only in the presence of mediators. The efficiency of each natural mediator depended on the type of dye to be treated but, with the only exception being Azure B (<50% decolorization), nearly complete decolorization (80 to 100%) was attained in all cases. Similar rates were attained with the best synthetic mediators, but the reactions were significantly slower. Phenolic aldehydes, ketones, acids, and esters related to the three lignin units were among the best mediators, includingp-coumaric acid, vanillin, acetovanillone, methyl vanillate, and above all, syringaldehyde and acetosyringone. The last two compounds are especially promising as ecofriendly (and potentially cheap) mediators for industrial applications since they provided the highest decolorization rates in only 5 to 30 min, depending on the type of dye to be treated.
Azospirillum brasilense
Produces the Auxin-Like Phenylacetic Acid by Using the Key Enzyme for Indole-3-Acetic Acid Biosynthesis
Authors: Somers E. , Ptacek D. , Gysegom P. , Srinivasan M. , Vanderleyden J.
Published: April 2005

An antimicrobial compound was isolated from
Azospirillum brasilense
culture extracts by high-performance liquid chromatography and further identified by gas chromatography-mass spectrometry as the auxin-like molecule, phenylacetic acid (PAA). PAA synthesis was found to be mediated by the indole-3-pyruvate decarboxylase, previously identified as a key enzyme in indole-3-acetic acid (IAA) production in
A. brasilense
. In minimal growth medium, PAA biosynthesis by
A. brasilense
was only observed in the presence of phenylalanine (or precursors thereof). This observation suggests deamination of phenylalanine, decarboxylation of phenylpyruvate, and subsequent oxidation of phenylacetaldehyde as the most likely pathway for PAA synthesis. Expression analysis revealed that transcription of the
ipdC
gene is upregulated by PAA, as was previously described for IAA and synthetic auxins, indicating a positive feedback regulation. The synthesis of PAA by
A. brasilense
is discussed in relation to previously reported biocontrol properties of
A. brasilense
.