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This is a new year for Brandt Snedeker, and an old season for Kevin Kisner. Snedeker's final official tournament of 2015 was a trip to the Australian PGA Championship and a small dent in his pride. He opened with an 84 and followed with a 75. Working on a new setup with swing coach Butch Harmon, the results have come quicker than he might have imagined. Snedeker knew where the ball was going off his new driver and old putter, a deadly combination that gave him a 5-under 65 in the Sony Open and a one-shot lead over Kisner going into the weekend at Waialae Country Club. In his six rounds this year, he already is 33-under par. Snedeker tied for third last year at Kapalua in the Hyundai Tournament of Champions. "If I hadn't played last week, I'd be a lot more concerned about it," Snedeker said about his change. "I hit some quality shots coming down the stretch at Kapalua. Shots that would have given me concern years past was not concerning at all. I was confident. I knew where I was going. So I'm excited about what the weekend holds. "I know I'm hitting it good, so it's just a matter of thinking properly and doing the small stuff right." Kisner can trace his great play to the first of three playoff losses at Hilton Head last April. But to keep this in a tidy box, consider the way he finished the end of the PGA Tour's wraparound season in November. He was runner-up at the HSBC Champions in Shanghai, beaten by the great play of Russell Knox. And then he won the RSM Classic at Sea Island for his first PGA Tour victory. "It wasn't that favorable that I took a month-and-a-half off after it," Kisner said. "But to come back and get right back into the fire and have a chance to win this weekend is going to be huge for me." He now is 67-under par in his last 14 rounds — all of them under par — and he is 85 under in his six official starts in the 2015-16 season. They are longtime friends with similar games. Neither is a power player, both have great short games and both are models for pace of play in tournament golf. But this is not a two-man show. British Open champion Zach Johnson (66) and Luke Donald (65) were two shots behind. Two dozen players were separated by five shots at the halfway point. SCRAMBLING SNEDS: Snedeker has missed only nine greens in regulation through two rounds, and he has saved par every time. This marks the third time he has been perfect in scrambling through two rounds, and the first time since he won at Pebble Beach last year. His only bogey was a three-putt on the 12th hole in the opening round. Meanwhile, he wasn't kidding about feeling comfortable with his new position over the ball. He ranks second in the field in the "strokes gained" statistic that measures a player from tee to green. EASY NO. 9: Waialae is a par 70 in which each nine ends with a par 5. There aren't many easier than the par-5 ninth, which measures a mere 506 yards and can play downwind, leaving a wedge for the second shot for the long hitters and a short iron for most everyone else. The scoring shows just how easy it is. Dating to 1983, the record for most eagles at a single tournament is 45 on the ninth hole at Waialae. With two rounds to go, there already has been 39 eagles on No. 9 this week. One of them belonged to Kisner, who rolled in a 12-foot putt to get within one shot of Snedeker. Here's another way to look at it. Since par was changed to 70 at Waialae in 1999, the field has played the ninth hole in 4,481 strokes under par. Players are a combined, 4,570 strokes over par on the other 17 holes. OLD MEN BY THE SEA: All three players who are sticking around for the Champions Tour season debut next week on the Big Island made the cut. Vijay Singh turns 53 next month and still harbors hopes of becoming the oldest winner in PGA Tour history. He shot 69 and was four behind. The big Fijian figured to be closer until a bogey on the par-5 18th hole when he missed a 30-inch putt for par. Davis Love III (4 under) and Fred Funk (5 under) each shot 70. Funk holed a bunker shot for eagle on No. 9 to be even par for the day. BIG CUT: Nine players were at 7-under 133, leaving them only five shots out of the lead, and four shots away from last place. Because more than 78 players made the cut (87 in this case), there will be a 54-hole cut on Saturday for the top 70 and ties.

Stocks clung to meager gains on Friday to close out a winning week as investors overcame dim outlooks from entertainment bellwether Walt Disney Co. and food giant Heinz. The Dow Jones industrial average rose 20.48 points, or 0.21 percent, to end at 9,608.00, according to the latest data, posting its highest finish since the Sept. 11 air attacks on the World Trade Center and Pentagon. The Nasdaq composite edged 0.72 of a point higher at 1,828.49. The broad Standard & Poor's 500 index rose 1.77 points, or 0.16 percent, to 1,120.31. For the week, the Dow jumped 3.05 percent, Nasdaq climbed 4.7 percent, and S&P 500 increased by 3.04 percent. Investors bet on an economic recovery next year after the European Central Bank, the Bank of England and the U.S. Federal Reserve all delivered aggressive half-point cuts in rates this week. Negative earnings news from household names like Walt Disney Co. dampened Friday's rally. Disney said it was suffering from weak advertising and low ratings at its ABC TV network and lower attendance at its theme parks after Sept. 11. Nevertheless, Disney reversed an early loss and climbed 11 cents to $18.95. Heinz slumped $2.80 to $39.90 after cutting its earnings forecast, citing a slowdown in its food service business as a result of lower demand from restaurants. Energy and oil services stocks, like Exxon Mobil, also helped underpin the market, getting a boost after Russia said it would join the Organization of Exporting Petroleum Countries, the oil cartel, in cutting production to lift sagging oil prices. Oil stocks were higher, including Amerada Hess , which gained $2.71 to $61.86, and Conoco Inc. up $1.46 at $26.98. Exxon rose 75 cents to $40.25. The American Stock Exchange's oil index rose 2.44 percent. Troubled energy company Enron Corp. was most active on the New York Stock Exchange for the 10th session of the past 13. The stock initially fell after Moody's Investors Service cut Enron's short-term and long-term rating because of a steep loss of investor confidence. Then it rose 22 cents to $8.63 as news trickled out that rival Dynegy Inc. is close to taking over Enron at about $10 a share. The market's ability to make up virtually all of the losses it made in the wake of the attacks on New York and Washington has given investors courage despite the dismal condition of corporate earnings, said Nat Paull, portfolio manager at New Amsterdam Partners. "The current profit picture, I think everybody knows, is pretty weak, but the focus is turning to 2002, and that definitely is going to be a rebound year," Paull added. Stocks got a fleeting boost on reports anti-Taliban forces entered the northern city of Mazar-i-Sharif in Afghanistan, marking an advance in the war against the group suspected of masterminding the Sept. 11 attacks. "The U.S. investment psyche is badly in need of a military victory of sorts and ... so when things go a little better for our team, it is reflected in equity prices," said Robert Stovall, senior market strategist at Prudential Securities. Aggressive rate cuts by the European Central Bank, the Bank of England and the Federal Reserve rekindled hope that lower lending rates will prompt companies to spend and expand, in turn buoying global economies and corporate earnings. Wall Street was little moved by a report showing U.S. wholesale prices plunged at the sharpest rate on record in October as a slowing global economy sapped imported energy prices and domestic carmakers offered cut-rate financing to lure buyers into showrooms after Sept. 11 attacks. "I don't think PPI matters in the market,'' said Arnie Owen, managing director of capital markets at money manager Cruttenden Roth. "We are looking at an economy that has been hanging on the brink since Sept 11.'' Wall Street also ignored a consumer confidence indicator that showed sentiment strengthened in early November. Expectations and current conditions rose to 83.5 from 82.7 in October, according to the University of Michigan's index. Analysts had forecast the index to fall to 78.7. Volume was moderate with the bond market closed early ahead of the Veterans Day holiday on Monday, traders said. The Russell 2000 index fell 0.95 to 438.11. Overseas, Japan's Nikkei stock average lost 2.1 percent. In Europe, Germany's DAX index dropped 1.7 percent, Britain's FT-SE 100 lost 0.6 percent, and France's CAC-40 slipped 1.3 percent. Reuters and the Associated Press contributed to this report.

Twenty-one U.S. soldiers deployed to the war in Afghanistan were injured in two accidents, and one of them was evacuated to Europe for treatment, the Pentagon said Tuesday. On Monday, 16 were injured in a helicopter crash, and five were hit by a forklift. One of the five injured by the forklift Monday evening was evacuated to Germany in critical but stable condition, and the other four had minor injuries treated at the site. The 16 Army soldiers injured when their helicopter crashed in eastern Afghanistan were being treated at a military base north of Kabul, defense officials said Tuesday, revising the number from the 14 announced Monday. Their names have not been released. Officials declined to say where the forklift accident occurred. Hundreds of special forces are deployed in Afghanistan and working on clandestine operations. Pentagon officials on Monday disputed claims that a deadly U.S. special forces raid last week was a case of mistaken identity. The soldiers' injuries in the helicopter crash were not life-threatening, military officials said. An Army CH-47 Chinook helicopter carrying 24 soldiers was ferrying members of the 101st Airborne Division to an area near Khost when it made a hard landing, defense officials said. A statement from U.S. Central Command, which oversees military operations in Afghanistan, said the helicopter was extensively damaged and the wreck was under investigation. Army Col. Frank Wiercinski, a spokesman for the 101st in Kandahar, Afghanistan, said the pilot apparently failed to see holes in the ground at the landing site due to darkness and dust. He said the soldiers were members of the 187th Regiment of the 101st Airborne. It was the latest in a series of U.S. military aircraft accidents in and around Afghanistan. The most deadly was the crash of a Marine Corps KC-130 refueling aircraft in Pakistan on Jan. 9 in which seven Marines were killed. On Jan. 20, a CH-53E Super Stallion helicopter crashed south of Baghram, killing two of the seven Marines aboard. Regarding last Wednesday's raid by U.S. special forces in central Afghanistan, Rear Adm. John Stufflebeem said several clues indicated the target compounds were being used by the Al Qaeda terrorist network or its Taliban supporters. "This had the clear indications of being a legitimate military target based on the indicators that we had been observing over time," said Stufflebeem, deputy director of operations for the Joint Chiefs of Staff. Groups of stolen U.N. vehicles had been seen moving in and out of one compound late at night, he said. This matched the operating methods of the Al Qaeda and Taliban and gave the compound the appearance of a "meeting house" that was protected and guarded much like other compounds where Taliban and Al Qaeda have gathered elsewhere in Afghanistan, Stufflebeem said. U.S. special forces soldiers were sent to the compounds under cover of darkness to investigate who was using them, were fired upon and fired back, he said. Stufflebeem said 27 people from the compounds were taken prisoner and 15 or 16 were killed. Initial interrogations of the 27 prisoners have not established their affiliations, he said. One U.S. special forces soldier was wounded in the ankle in the raid. Local Afghans have protested to authorities in Kandahar, about 60 miles south of the target area, that no Al Qaeda or Taliban fighters were in the area and that those killed were loyal to Afghanistan's interim leader, Hamid Karzai, who met in Washington on Monday with President Bush.

The Federal Bureau of Investigations is reviewing Kmart Corp. (KM) documents as part of an investigation into possible criminal violations at the bankrupt company. The investigation is one more hurdle for the discount retail giant. Kmart posted a loss of $2.42 billion for the 2001 fiscal year in a filing Wednesday with the Securities and Exchange Commission, which also is looking into Kmart's accounting. "All I can tell you is we are looking at the situation with Kmart to see if there are any criminal violations," FBI Special Agent Dawn Clenney said Thursday. "We have to have some time to review documents." Kmart spokesman Jack Ferry said the company was notified of the FBI investigation earlier this year. "Kmart is cooperating fully with the FBI," he said, and declined to comment further. The SEC is under increased pressure to investigate criminal wrongdoing in bankruptcy cases in the wake of Enron Corp.'s collapse, said Jerry Reisman, a corporate fraud expert with the law firm Peirez and Reisman in New Jersey. Reisman said it's uncommon for the FBI to get involved in SEC investigations when the business is as large as Kmart. "The change in times predicated by potential criminal activities at Enron have now placed a greater burden on the SEC, the Department of Justice and the FBI to investigate criminal wrongdoing at companies of any size," Reisman said. But he said the reasons for investigating Kmart are likely more than just post-Enron caution. "It has been reported that Kmart executives may have taken improper loans from the company prior to their leaving the company," Reisman said. "These individuals profited at a time when the shareholders posted great losses." Kmart paid more than $23 million in executive retention loans between October and its Jan. 22 bankruptcy filing. A Kmart official said the company is considering trying to recover some of those loans. "The board may or may not decide to take action to reconsider that loan," chief financial officer Al Koch told Dow Jones Newswires on Thursday. Ferry confirmed the quote but would not elaborate. The Troy, Mich.-based retailer began reviewing its accounting methods following an anonymous letter, also addressed to the SEC, that claimed to be from employees. The letter was received shortly before the Chapter 11 filing. Kmart said its accounting review dealt with vendor rebates and general liability reserves. It has amended its previously reported earnings for the first three quarters of 2001 to reflect the new ways it will report vendor discounts. Kmart said Wednesday it has since received copies of additional letters sent to the SEC and others "expressing concern" about various matters. Kmart said it's investigating those matters, as well as the way the company was managed under former chief executive Chuck Conaway. Some analysts said that based on the information regarding vendor rebates released Wednesday, it doesn't appear that Kmart's accounting problems were that serious. "It looks like they've come clean about everything at this point," said Mike Porter, a retail stock analyst with Morningstar. "A lot of times with these things it gets worse before it gets better, but I don't think that's the case here." Porter said accountants for Kmart from PricewaterhouseCoopers used "aggressive" but not illegal methods. Arun Jain, a marketing professor at the Buffalo School of Management, said Kmart's bankruptcy was still most likely the result of mismanagement. "They failed to recognize the competition they had. Wal-Mart was attacking them on the price front and Target was beating them on quality," Jain said. Kmart filed for bankruptcy following disappointing holiday sales and a stock dive. It has long struggled to keep up with Wal-Mart Stores Inc. and Target Corp. Jain said the investigation could further hurt the company's chances of making a comeback. "It doesn't sound very good, because the FBI doesn't investigate any company casually," he said. "Investor confidence could be damaged if financial improprieties are discovered at Kmart." Kmart shares were down 6 cents Thursday to close at $1.11 on the New York Stock Exchange.

Fueled by another victory and a slew of endorsements from high-profile Democrats, John Kerry (search) said Wednesday that his campaign was "going in strong" into the upcoming round of nominating contests next week. "We're going in in a competitive position," Kerry told reporters traveling on his campaign airplane. Kerry, who has vowed to campaign in each of the seven states holding primaries next Tuesday, started with Missouri (search), where 74 delegates to the Democratic convention are the single biggest prize next week. He plans a return trip to the state on Saturday. For more on the campaign, click to view Foxnews.com's You Decide 2004 page. "We're going in strong," Kerry said, declining specifics. Kerry came to St. Louis (search) to collect important endorsements from some big names in Missouri Democratic politics, ranging from St. Louis Mayor Francis Slay to former Sens. Jean Carnahan and Tom Eagleton. Others were expected. Rep. Jim Clyburn, South Carolina's top black Democrat, was to give a coveted endorsement to Kerry on Thursday. Blacks make up about 30 percent of South Carolina's population, and may represent up to half of those who vote next Tuesday. Kerry's swing through Missouri came on the heels of his solid victory Tuesday in the New Hampshire primary. Kerry said he was basking little in that win and was quickly turning his attention to the next round of contests. "Now I'm focused on Missouri and the other six states, I'm not looking back," Kerry said. "I have to stay focused on each one of these states." Kerry moved quickly to position himself to challenge his rivals for the 269 pledged delegates at stake in the seven states. He bought television advertising time in all of them, including very expensive Missouri. After his New Hampshire win, Kerry slipped away to his Boston home to spend a night in his own bed, repack his suitcase and get a haircut. He reported sleeping until 8 a.m. Wednesday. "It's wonderful to go home, but all of my papers were strewn all over the floor of my den," Kerry said. Back-to-back wins in Iowa and New Hampshire have made Kerry the clear front-runner in the race, though he pledged to campaign with an underdog's intensity. He also promised to keep listening to "real people." "That's made me a better candidate," said Kerry, whose campaign appeared to be dying before his double-barreled victories. "I'm going to continue to do retail politics. I want to talk to real people and listen to their concerns." Kerry was also collecting an endorsement from Iowa Gov. Tom Vilsack, who remained neutral during his state's caucuses. Vilsack and Carnahan said Kerry offers Democrats the best opportunity to defeat President Bush in November. Carnahan, who served for two years with Kerry in the Senate, said Kerry's military service and national security policies had swayed her to his side. A day earlier, Kerry gained backing from New Jersey Sen. Jon Corzine, head of the Democratic Senatorial Campaign Committee. Kerry's campaign also said the governors of Michigan and Arizona were close to endorsing him. Kerry told reporters Wednesday he was "thrilled" with the endorsements but that he would continue to campaign on the economy and health care. "These are the real things that matter to Americans," he said. "I'm a guy who doesn't give up. I'm going to fight for people." After Missouri, Kerry was headed to South Carolina, where he likely will face competition for the veterans' vote from retired Gen. Wesley Clark, as well as from Sen. John Edwards of North Carolina. After a night at home, Kerry appeared relaxed, tossing a football with aides on his airplane and talking about arranging a hockey exhibition with the Detroit Red Wings. He held a similar show in New Hampshire last weekend with the Boston Bruins.

Israel will review "every kilometer" of the 310-mile stretch of West Bank barrier (search) not yet built to check whether Palestinian rights and international law are being violated, an Israeli official said Friday. Prime Minister Ariel Sharon (search) was quoted Thursday as saying he would be prepared to move the separation barrier closer to Israel, wherever possible, to avoid trapping Palestinians in fenced-in enclaves. The promise of a review came in response to a Supreme Court ruling earlier this week that most of a 25-mile segment of barrier near Jerusalem must be rerouted because it would cause too much hardship to Palestinians. The barrier — a complex of fences, walls, barbed wire and trenches — eventually will cut off the entire West Bank from Israel, at a length of 425 miles. One-fourth has been built. Palestinians contend that the barrier amounts to a land grab and Israel should have built it on its territory, not in the West Bank. The barrier is a key element of Sharon's plan of "unilateral disengagement" from the Palestinians, which also includes a withdrawal from the Gaza Strip (search) and four small West Bank settlements by September 2005. In new violence Friday, Israeli soldiers killed three Palestinians — all unarmed, according to witnesses — in separate Gaza clashes. A fourth Palestinian, a 15-year-old boy, died of wounds suffered in an Israeli missile strike Thursday. Also, Palestinian militants fired three homemade rockets toward the border town of Sderot. One fell in town, causing no injuries, and the other two hit open fields. In the West Bank town of Qabatiya, Palestinian militants killed a man with a burst of automatic fire in a public square after accusing him of collaborating with Israel and sexually abusing his two young daughters. A lynch mob of about 500 people cheered on gunmen from the (search), a group linked to Yasser Arafat's Fatah (search) movement. Television footage showed the man on his knees, his head bowed, before he was killed. Elsewhere in the West Bank, three Al Aqsa members from the West Bank city of Nablus were arrested on suspicion of planning to carry out a suicide bombing in Jerusalem on Friday. One detainee carried a 26-pound explosives belt ready for detonation, security officials said. Israel says it needs the separation barrier to keep out suicide bombers and other Palestinian attackers, who have killed hundreds of Israelis since 2000. A senior government official said on condition of anonymity that Sharon told officials the construction of the barrier must advance quickly but problematic areas have to be rerouted to meet the Supreme Court's demands. Defense Minister Shaul Mofaz told a team of military officials, engineers, archaeologists and attorneys to review a 310-mile section of the barrier not yet built to see whether Palestinian rights are being violated, said Shiri Eden, an adviser to Mofaz. The team is looking at "every kilometer to see that it doesn't cause too much hardship to the Palestinians," Eden said. The section already built will not be reviewed, she said. The barrier has severely disrupted Palestinian lives. Children have to pass through army-operated gates to reach schools, some communities are encircled and farmers are cut off from fields. A government official said it would take about two weeks to review the area near Jerusalem mentioned in the Supreme Court ruling. Sharon said that in areas not considered problematic, construction should begin immediately. "In areas where we cannot compromise on security, don't make concessions," Sharon was quoted as saying. "But in places where we can, we need to do as little damage as possible to the Palestinians' way of life, and we can move the fence a little closer to the Green Line," he said, referring to Israel's old frontier before it captured the West Bank in the 1967 Mideast war. Palestinian officials have said they have no problem with a separation barrier, provided it is not built on West Bank land. However, Sharon has said he would not have the barrier run along the Green Line for fear it would be interpreted as Israel's tacit agreement that this will be the future border. Hassan Abu Libdeh, the Palestinian Cabinet secretary, said any route cutting into the West Bank is unacceptable. "We will not accept the wall as long as it takes even a few centimeters of Palestinian territory," he said. Next week, the world court at The Hague, Netherlands, is to issue an advisory ruling on the route at the request of the Palestinians. Israeli Foreign Minister Silvan Shalom, speaking in Washington, said Israel would reject interference by the international court. He said the barrier could always be moved if the Israeli Supreme Court — or a peace settlement — requires it, but until then it is needed to prevent terror attacks. "The fence is reversible. Human lives are irreversible," Shalom said.

This is a partial transcript of "The Big Story With John Gibson," July 10, 2006, that has been edited for clarity. JOHN GIBSON, HOST: A Dallas hospital tired of footing the bill for illegal immigrants says it will ask Mexico and other countries to pay those health care costs. But the Mexican government is calling this an act of discrimination. Here now is Dallas County Commissioner John Wiley Price. So Mr. Price, this involves Parkland Hospital there in Dallas. How much money is involved? JOHN WILEY PRICE, DALLAS COUNTY COMMISSIONER: Well, when you talk about $76 million of un-reimbursed care, you're talking about at least counties and other countries, about $46 million over and above what we call emergency care. The undocumented question, though, comes out of the TP30 section 1011 Medicaid. And we have an eligibility requirement for our own residents. Parkland only gets funding through what we call ad valorem property taxes. And with that, $341 million of the $871 million comes from property taxes. And our constituents expect us to collect those dollars. GIBSON: OK, so you send a bill onto Mexico. Let's just talk about Mexico in particular. I know there are other countries involved. And it said kindly remit, what, $76 million? PRICE: Well, kindly remit those dollars, at least probably close to about $40 million. We take a matricula card. We take foreign driver's license. We take a passport. And the TP30 Medicaid only pays for the first 48 hours of emergency care. Beyond that, the taxpayers of Dallas County are having to pick up the tab. And that’s what we're basically saying. GIBSON: Yes, you want the money and I get it. PRICE: We want the money. GIBSON: By the way, I'm a taxpayer down there in a certain part of Texas, so I get it. PRICE: Well, good. GIBSON: But what happened? Mexico called this an act of discrimination and refused your bill. But under what basis did they call this an act of discrimination? PRICE: Well, I think that they wanted it to appear to be an act of discrimination. We're just carrying out our fiduciary responsibility and these are individuals who have presented in the — beyond the emergency 48 hours under the definition of emergency care. And they say that through a matricula card, foreign driver's license or passport, that they're from Mexico. Mexico owes the bill. Any other country — Canada owes the bill. We want our money. And that's what our taxpayers expect us to do. GIBSON: Mr. Price, I think everybody in this country thinks it's good for you to make the effort to bill the country and try to get the money. Honestly, what is your expectation of collecting? PRICE: Well, I mean, probably no more than the expectations of surrounding counties that owe us dollars or even constituents that owe us dollars. But again, I think what this says is that the TP30 section 1011 Medicaid is inadequate to talk about reimbursing counties and/or states, which is only about $49 million. They have $250 million appropriated for 2005 through 2008. That is not sufficient based on the kind of service we are having. And we must at least seek those funds so that the federal government will understand that they have to do more than tacitly hold out a few dollars and say look, states, here you are, $45 million for the state of Texas and our proximity to Mexico. GIBSON: Are you at the point of refusing service? PRICE: No, I think the TP30 Medicaid does not allow me to refuse service, especially for the first 48 hours. But, no, we're not at that position. All we're saying is we plan to collect our money. GIBSON: Get your money. Dallas County Commissioner John Wiley Price, thanks a lot. Appreciate you coming on. Content and Programming Copyright 2006 FOX News Network, LLC. ALL RIGHTS RESERVED. Transcription Copyright 2006 Voxant, Inc. (www.voxant.com), which takes sole responsibility for the accuracy of the transcription. ALL RIGHTS RESERVED. No license is granted to the user of this material except for the user's personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon FOX News Network, LLC'S and Voxant, Inc.'s copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.

Rosie O'Donnell says she's sorry for mocking spoken Chinese on "The View," but an association that represents journalists from diverse ethnic and racial backgrounds, including Chinese American, says it wasn't enough. In a Dec. 5 segment, O'Donnell joked about how Danny DeVito's recent -- and seemingly drunken -- appearance on the ABC daytime talk show had become international news. "You know, you can imagine in China it's like `ching chong, ching chong chong, Danny DeVito, ching chong chong chong, drunk, "The View," ching chong,"' the 44-year-old comedian said. On Thursday's show, she told the audience: "To say ching chong to someone is very offensive, and some Asian people have told me it's as bad as the n-word. Which I was like, `Really? I didn't know that."' Karen Lincoln Michel, president-elect of Unity: Journalists of Color Inc., said O'Donnell's remarks "really didn't sound like an apology to me." Lincoln Michel said Unity was waiting for Barbara Walters, who created the show, to respond to a letter asking her to publicly acknowledge that O'Donnell's remarks were "patently offensive." "I think by allowing Rosie O'Donnell's cheap jabs at Chinese Americans to go unchecked, then the network is essentially condoning racial and ethnic slurs," Lincoln Michel told the AP in a phone interview. Unity said it represents more than 10,000 journalists nationwide. "You know it was never (my) intent to mock," O'Donnell said on Thursday's show, "and I'm sorry for those people who felt hurt or were teased on the playground." "But I'm also gonna give you a fair warning that there's a good chance I'll do something like that again, probably in the next week -- not on purpose. Only 'cause it's how my brain works." O'Donnell characterized her accent as "Chinese, Asian, pseudo-Japanese, sounded a little Yiddish ..."

Former Vice President Al Gore’s likely Academy Award win for his global warming documentary may just be the ticket to ride his political ambitions toward another run for the White House, say some Hollywood watchers and political analysts. Gore’s film, "An Inconvenient Truth," is at the top of a short llist of nominees to be named on Jan. 23 in advance of the Feb. 25 awards show. The film about the economic, geographic and social impact of global warming strikes fear in the heart of environmentally conscious viewers and has become one of the highest-grossing documentaries of all time, collecting more than $41 million worldwide. A companion best-selling book and DVD release, along with a speaking tour and appearances on television shows like Oprah, have given Gore's labor of love worldwide exposure and widespread acclaim. “The movie’s going to win because it is accurately depicting the real fear of global warming,” said FOXNews.com's "411" gossip columnist Roger Friedman, who predicted that the film is a lock for best documentary in the Oscar race. Roger Simon, a Motion Picture Academy member and Pajamas Media CEO, said Gore will win the Oscar for reasons of convenience, not cinematic excellence. “Artistically, it shouldn’t even be nominated,” Simon told FOXNews.com. “On that level, it’s very much like an old-style TV documentary.” Simon, a well-known Web logger and no fan of Gore's, wrote in a recent column that two reasons for Gore's shoo-in victory is the slick packaging of the film and time constraints of the bulk of academy voters. Click here to read Simon's analysis. "These days we are all sent DVD screeners, which makes that process relatively easy. Not so for the documentaries, a much less commercial area (an exception being the richly-funded 'An Inconvenient Truth' for which we have all received DVDs)," he wrote. This leaves documentaries to be judged by a very small group of volunteers from that division (estimated at 30-35 persons) who have time to troop down to the Academy to view the potential nominees. For the most part, these people are retired or close to it. Being of a certain age, their view of the documentary form is, again for the most part, from a different era. They tend to be more comfortable with old-style talking heads docs like Gore’s," Simon continued. The global warming issue is one of Gore's great passions, according to the movie's Web site, which explains that after his 2000 presidential election defeat to President George W. Bush, Gore "re-set the course of his life to focus on a last-ditch, all-out effort to help save the planet from irrevocable change." At the movie's official premiere last May, Friedman reported that Gore told him he is not running for the presidency in 2008 because he is "too happy doing this.” Click here for the May 21, 2006, 411 column on Al Gore's movie premiere. But the popularity of the film has pushed Gore back into the political spotlight, with some analysts suggesting the hot-button issue could nudge him into another run for the White House. "The more energy behind the global warming issue, the more I got to think that Gore has got to think about getting back into politics," said Democratic strategist and FOX News contributor Bob Beckel. "If he gets a couple of awards for it, it's that much more exposure to help him." Simon agreed, predicting that support for the film's political message will boost Gore's presidential ambitions. “It’s going to get him tremendous attention,” Simon said. “This is a plus-plus for the former president.” Conversely, Washington Examiner senior White House correspondent Bill Sammon, who covered Gore's campaign in 2000, said he doesn't see any award helping a presidential bid or pushing Gore to run again. "I don't think an award for his movie would make a whole lot of difference in changing his mind for running or not," Sammon said. "I think that we're so far into the cycle right now that it's late to join" the race. FOX News' Melissa Drosjack contributed to this report.

President Bush is venturing to Israel, Saudi Arabia and Egypt in May to try to speed up the Mideast peace process and celebrate Israel's 60th anniversary. The six-day trip, from May 13-18, comes as the president tries to help secure a peace deal between Israelis and Palestinians before he leaves office in January. The White House confirmed Bush's itinerary on Monday. Bush will meet with Israeli President Shimon Peres and Prime Minister Ehud Olmert and speak to the Knesset, the Israeli parliament, which will be a first for Bush. In Saudi Arabia, Bush will meet with King Abdullah. And in Egypt, Bush will visit Egyptian President Hosni Mubarak, Jordan's King Abdullah II and Palestinian President Mahmoud Abbas. Bush last visited the Mideast in January. White House press secretary Dana Perino said all of the issues entwined in the Mideast peace process are "dynamic and fluid," and that Bush's visit is aimed at pushing them in the right direction. "We're going to have to push them faster than they've been going," she said.

Third time another charm for Donald Trump who won his third state in a row last night in the GOP Nevada caucus. Fox still hasn’t declared whether Marco Rubio or Ted Cruz came in second, but most outlets are reporting Rubio beat Cruz for #2 by a few percentage points. Philip Rucker and David Weigel write in the Washington Post write, “An angry electorate hungry for a political outsider in the White House handed Trump his third straight win in the GOP primary race as the billionaire mogul used visceral rhetoric to tap into anxieties about the economy, terrorism and illegal immigration.” A couple of campaign events to watch today. 1200EST -- OH Gov Kasich holds a town hall meeting. Cafe Climb, Gulfport, MS. TBA COVER 1200EST -- Donald Trump speaks to Regent University, Virginia Beach, VA. LIVE Hillary Clinton is in South Carolina which holds its Dem primary on Saturday. Bernie Sanders campaigning today in Missouri and Oklahoma. Predictions Map See the Fox News 2016 battleground prediction map and make your own election projections. See Predictions Map → Sanders may be throwing in the towel on South Carolina.. he’s not in the state.. and may be focusing on states that vote on Super Tuesday that are more competitive. Clinton has a strong lead in SC especially among the large proportion of African-American voters. Some tough news for Hillary Clinton. A judge ruled her top aides can be questioned in the email server controversy. Spencer S. Hsu and Rosalind S. Helderman write in the Washington Post today: A federal judge ruled Tuesday that top aides to Democratic presidential front-runner Hillary Clinton should be questioned under oath about her use of a private email server as secretary of state, raising new political and legal complications for Clinton as she tries to maintain momentum for her campaign. The ruling granted a request from the conservative group Judicial Watch, which sought testimony from State Department officials and members of Clinton's inner circle to determine whether Clinton's email arrangement thwarted federal open-records laws. A Hispanic Group says at least 13 million Latinos will vote in 2016.. a 17% increase over 2012. Republican Senators literally through President Obama’s plan to close Gitmo in the garbage yesterday. The President proposing to shut down the military prison the U.S. base on Cuba. Republicans say it’s a non-starter. Republican Senators also refusing to even consider an Obama nominee to replace Justice Scalia who died earlier this month. The GOP wants the next president to fill the vacancy on the high court. That would be 11 months with no replacement. 1000EST -- Sens Graham and McCain, and possibly Ayotte, hold a press conference to discuss Guantanamo Bay. LIVE 1000EST -- House Appropriations Subcmte on State, Foreign Affairs, & Related Programs holds a "Budget Hearing - Dept of State & Foreign Assistance. Secy Kerry testifies. LIVE 1000EST -- House Armed Services Cmte holds hearing on "The Challenge of Conventional and Hybrid Warfare in the Asia-Pacific Region: The Changing the Nature of the Security Environment and its Effect on Military Planning". US Pacom Cmnder Adm Harry Harris, Jr, and US Forces Korea cmnder Army Gen Curtis Scaparrotti testify. LIVE WEBCAST 1030EST -- Senate Appropriations Defense Subcmte holds a hearing to review the FY2017 budget request and funding justification for the US Army. Army Secy Patrick Murphy and Chief of Staff Gen. Mark Milley testify. LIVE 1200EST -- House Armed Services Cmte Chair McCaul and Sen. Warner speak at the Bipartisan Policy Center about the challenges of terrorists "going dark" and other issues of digital security. LIVE via LiveU President Obama set to meet with the King of Jordan today to discuss Syria and the 1.4 million Syrian refugees in Jordan. 1035EST -- POTUS meets with King Abdullah II of Jordan. VPOTUS attends. Oval Office. POOL TAPE SPRAY New Zika virus fears. The CDC now says that the disease spreads via sexual contact more often that once thought. Twisters tore through parts of the South yesterday. Severe weather hit the Gulf Coast hard. At least three are dead in Louisiana and Mississippi. In Alabama and Georgia there are flash flood watches in effect for today. 42 are dead after a major cyclone hit Fiji. The extent of the damage is unknown at this time. China flew jets to disputed islands in disputed islands in the South China Sea just days after setting up radar stations. It’s seen as a major escalation. Gordon Chang will join us. Bolivian voters rejected a four term for the socialist President Evo Morales.. it’s another step away from socialism in South America. Stocks are set to open lower as oil prices continue to fall. U.S. stocks fell more than 1% yesterday. The British pound is falling on rising fears it could leave the EU. 1000EST -- New Home Sales for Jan, 2016. 1030EST -- EIA Petroleum Status Report for wk2/19, 2016. Airbus reported strong profits. Honda wants two-thirds of its cars to be electric by 2030. A new report in the WSJ shows the pay of S&P companies’ boards of directors rose a shocking 50% between 2006 and 2014.. during the great recession. Takata in trouble again today. It continued to fake crash test results more than a year after a major recall according the U.S. Senate. China’s capital of Beijing now has more billionaires than New York City. For more news, follow me on Twitter: @ClintPHenderson

Ever since John McCain won the nomination this past March, I have struggled with the idea of casting a vote for him. I know…shocking ain’t it? I’ve tried to hide my contempt for the man and I’m sure many of you are shocked to hear this for the first time. {/sarc} So Monday I’m out taking a new contract to the Title Company, dealing with a home inspection for a client, and spending a daddy day with my three year old while the other two boys were in school. Being a traditionalist, I generally don’t vote early believing that election day is a solemn occasion and the process of walking into the polling place and carrying out ones duty to choose our leadership should be a sacrosanct and special occassion. Well, this year I made an exception. So many people are now voting early that election day has lost much of it’s traditional meaning. Besides, taking my three year old into the polls and voting in his presence would be educational for him and instill that sense of duty in him that I learned by going with my Dad to the polls. So…I turn in my voter registration card and sign the register, and proceed to the voting machine. As I do so, I’m still struggling with the thought of voting for John, “Global Cap & Trade, Campaign Finance Reform, drilling in ANWR would be like drilling in the Everglades and the Grand Canyon, agents of intolerance, etc.” McCain. I know I’ll get no end of grief for writing this but I’m being honest here and there is a point to be made which will please most of you when I get to the end of this. I’ve spoken with the Constitution Party chairman of Texas and have struggled with the idea of casting a vote for Chuck Baldwin or Bob Bar as a protest since McCain will win Texas anyway and I asked the poll worker how to cast a write in vote for Baldwin since he’s registered as an official write in candidate. At this point I’m not committed to voting for Barr or Baldwin but want to know how in case I decide to. Normally I wouldn’t consider this under any circumstances and again I put up my Republican Credentials against anyone’s so spare me the ridicule. Yet McCain still gives me fits. Anyway…so it goes…and I’m left alone with the decision finally at hand. All the arguments made by many here and elsewhere that “A non vote or a vote for a third party is a vote for Obama have never swayed me. I’ve always seen the simple common sense of that argument yet it’s never served as enough of a reason to vote for McCain. On the contrary, it’s always enraged me to the point where I’d be tempted to vote third party just out of spite. But again, this argument rings in my head…yet it doesn’t help with my decision. So next I think about what McCain brings to the table…much of which I agree with. This has it’s appeal…but trust is a factor here in that his proclivity to compromise with my political enemies to show how reasonable he can be…all the while attacking me and his natural allies sticks in my craw and really stands in my way of a vote for McCain. His uncanny ability of timing his betrayal to times that causes maximum damage to the Republican brand and the conservative cause makes trust a serious issue with for me…and I just can’t bring myself to trust him. So…what to do? While I still think a vote against Obama is compelling, it’s still not reason enough for me. What I’m about to say is a direct appeal to those of you who struggle as I have with the nominee at the top of the ticket and have yet to vote. I’m begging you to do as I’ve done and vote for McCain/Palin. I decided to vote Republican this time rather than send a message for one reason and one reason only. “SARAH PALIN”. The attacks on her from the elites in the Republican Party have served as a catharsis for me. THEY FEAR HER! Brooks, Will, Parker, Noonan etc. see her as a threat…with good reason. I don’t have to list her conservative credentials for most of you and won’t bore you with it now…the thing that finally settled things for me as I voted last week is her genuine appeal to the grass roots of this Party. Nothing will equate to victory for this Party more than an appeal to the grass roots. It’s what was missing in 2006 and what was missing in the McCain campaign up until the convention. I’m convinced that the elites in this party fear her because she represents the riff raff of this party that are ready to storm the ramparts with pitchforks and shovels and overthrow the elitists who have made this party a thin carbon copy of the Democrat Party. She’s a threat to the mediocrity that has infected this party at the highest level since the late 90s. She’ll shake this party to its core and shake off the bad fruit that have polluted its branches. So…I’ve said all the above to say this to those of you like me that have struggled up till now: Vote Republican at the top of the ticket…If you can’t in good conscience vote for McCain…Do it for Sarah! Do it for the future of this Party! Do it because she can rattle those that have betrayed us and will bring the grass roots of this party back to the table and will solidify us for the victories to come! VOTE SARAH PALIN!

World Sport Breaking News Sport Swimming Australia's swimmers have no chance to relax and enjoy their Commonwealth Games success as they head straight home to prepare for next month's Pan Pacs and much bigger opponents. The swimmers leave Glasgow on Wednesday night and will miss the Games closing ceremony on Sunday after also missing the opening ceremony the night before their competition began. But missing the fun part of the Games is a sacrifice 200m breaststroke gold medallist Taylor McKeown is prepared to make, especially with a date with a full strength US team awaiting. "It's a little bit disappointing that the Australian swim team can't attend the opening or closing ceremony," McKeown said on Tuesday. Advertisement "However, we came here with a purpose and our purpose was to race fast. If racing fast and racing well meant we have to miss the opening and closing ceremony, then so be it." McKeown has already put the Commonwealth Games behind her and started her preparation for the Pan Pacific championships which start on the Gold Coast on August 21. She won gold on Saturday, had a day off on Sunday and was back into full training on Monday. While the Americans will be a much tougher Pan Pacs opponent than the Commonwealth can offer, McKeown will also face Japanese breaststrokers Kanako Watanabe and Rie Kaneto who have clocked the second and third fastest times in the world this year. Backing up for such a major competition so close to the Commonwealth Games will be a challenge, McKeown admits, but she believes the Australians will take confidence from their success in Glasgow where they've won 17 gold medals with one night of competition remaining. "It is tough, but it's nothing I haven't done before, so I know exactly what to do and how to prepare, how to get refocused again for Pan Pacs," she said. "It is in a way an advantage for Australia. If you've raced well, it's going to give you the confidence you can do it again. "I don't think it would affect the other countries too much that haven't had that opportunity, because most of them have had trials, so they've already had a practice meet where they can race fast and get their confidence." The US national championships and Pan Pacs trials are held in the second week of August, when Michael Phelps is expected to earn his first selection for an international meeting since his comeback to swimming earlier this year. The US team is expected to be full of Olympic champions, including Ryan Lochte, Nathan Adrian, Missy Franklin and Alison Schmitt.

I write over a thousand words a day, every single day, many of those on my iPad. That's only possible by using an external physical keyboard. There are some good ones available, and this brand new one is the best I've tried so far. The Logitech Ultrathin Keyboard Cover combines the Apple Smart Cover with a full keyboard. The single unit from Logitech is thinner than the new iPad, and weighs only a few ounces. It attaches to the iPad using the same magnetic hinge used by the Smart Cover. Once the cover is attached to the iPad, simply folding it closed produces a single unit for transport. The brushed aluminum bottom of the cover is exposed when closed, presenting a solid aluminum surface combined with the iPad's back. Opening the closed cover is a simple operation, and to use the iPad with keyboard requires a simple removal of the cover from the tablet. The iPad is then placed into the white slot on the keyboard, with the iPad home button to the right. A strong magnet grips the iPad firmly in the keyboard, in fact the whole unit can be lifted by grabbing the top of the iPad with one hand. This disengages the magnets holding it in place with an audible tone that indicates when the iPad can be easily lifted out of the slot. The iPad smart cover technology is fully supported by the Logitech unit, with the iPad turning on and off by opening and closing the cover, respectively. There is a noticeable click when the iPad is inserted in the keyboard slot for use, and another distinct noise when the iPad is disengaged from the slot for removal. Removing the iPad from the Utrathin Keyboard Cover is as simple as tilting the iPad forward, which disengages the magnets holding it in place. The iPad can be used with the keyboard in portrait mode without any magnetic gripping action. This is stable when used on a flat surface. The chiclet keyboard is not quite full size but even with large fingers handles fast touch typing. The five rows of keys contain all the expected keys, with the addition of a set of function keys that handle special functions on the iPad. These include cut, copy, paste, volume up/down, and media player controls. This keyboard has two function keys not found on other products that have turned out to be very useful tools. They are keys that highlight one word left or right with a single tap. It is very useful to be able to precisely highlight blocks of text in any app with just a few taps of these keys. The Logitech cover uses Bluetooth to connect wirelessly to the iPad. It charges via an included microUSB cable, and according to Logitech should last about six months on a single charge. The keyboard goes in standby mode to save battery when not in use, and there is power switch for turning the unit off entirely. The Logitech Ultrathin Keyboard Cover is a fantastic cover for transporting the iPad securely. The aluminum surface looks good and is quite durable to handle the bumps of the road. The magnetic hinge system is easy to use and unique among iPad keyboard accessories. The keyboard is currently available from Logitech for $99. It works with the iPad 2 and new iPad 3, but owners of the first generation iPad are out of luck as it does not work with early models. See the other reviews in the iPad keyboard case series:

Apple, with its stock trading at around $300 a share and swimming in over $50B in cash, now needs to figure out how to spend its money. I've got a few suggestions. Times are indeed very good for the turtlenecked ones in Cupertino. As I write this, AAPL is now trading at over $308.00 a share. For the 4th quarter, the company has posted record revenue of over $20 Billion from its sales of the iPhone, iPod, and the iPad, and Mac sales continue to grow and expand into new markets. Apple now has a market capitalization of over $280 Billion and has amassed a huge cash war chest exceeding 50 Billion Dollars. Yes, say that again, but with a Doctor Evil voice. FIFTY BILLION DOLLARS! Muhahahahahahahah! Apple could just sit on all that cash, but the logical thing to do with it would be to make some strategic purchases or expand its infrastructure in order to maintain that growth. I've been thinking about this for a while and I've come up with five suggestions. And no, "Sharks with frickin' lasers" did not make the list. So without further ado... Page 2: [Cupertino, we have liftoff...] » Launch a Geomapping Satellite of Its Very Own Anyone who uses an iPhone or an iPad with 3G and GPS capabilities will tell you that much of the functionality that you get from some of the best apps for these devices come from geolocation and mapping services. However, at the moment Apple currently depends on Google Maps, Google Earth, and Google's GeoEye-1 satellite to provide this data. Also Read: To Boldly Go Where No Search Engine Has Gone Before (Sept. 2008) With the strained and cantankerous relationship that Apple and Steve Jobs has now put itself in with Google, it would behoove them to become as independent as possible when it comes to the key services that it needs to offer the core functionality that makes "The Apps for That" actually work. That includes not only Search capabilities -- which it should probably consider building its own engine or perhaps partnering with -- GASP! -- Microsoft and its Bing! service, but Apple should also consider launching its very own mapping satellite in partnership with one of the major geospatial companies, such as GeoEye, DigitalGlobe and Spot Image, and a major Aerospace company such as Orbital Sciences, Boeing Space and Intelligence or Lockheed-Martin Space Systems. What does it cost to launch and operate one of these things? Well, a lot of money. In fact it costs so much that the US Goverment actually financed about half the cost of GeoEye-1, which was over $500 Million in 2008, so Google only gets to use it partially. Apple actually has enough cash that it could easily launch its very own bird and form its own geospatial services firm if it wanted. It should also be noted that the GeoEye company (GEOY) that provides the mapping services in partnership with Google and the United States government currently has a market capitalization of about $1B right now, so the company might not be a bad acquisition target for Apple either. Page 3: [iGlobal Delivery] » Build Its Own Content Distribution Network If Apple's soaring profits on the iPods and iPad and the recent sell-outs of the new Apple TV are of any indication, much of the company's future with these devices is going to rely on the sales and distribution of content and applications on the App Store and on iTunes. As the company grows, it's going to need to expand its content distribution infrastructure. That means in order to get things like huge, bandwidth-hungry HD movies downloaded to iTunes or even streamed directly to Apple TVs and iPads, it is going to have to get that content in close proximity to the ISPs that provide broadband service to consumers as well to the Tier 1 providers that provide backhaul services to wireless carriers that sell the iPhone and iPad 3G worldwide. Apple has invested lots of money in new datacenters to house servers and storage that power its back-end infrastructure -- its most recent infrastructure expansion project has been in building a huge, One-Billion dollar 500,000 square foot facility located in North Carolina, and rumor has it that Apple is looking into possibly doubling its size. However, having huge centralized datacenters isn't enough. It won't solve latency issues globally, Apple will need to spend a considerable amount of money connecting these datacenters to the ISPs with high-speed links and possibly even replicate some of that data globally so that the most popular or in-demand content doesn't overload the centralized infrastructure. Also Read: Delivering the Olympics, Akamai and Limelight Respond (August 2008) Also Read: Why the Olympics Didn't Melt the Internet (August 2008) Content Distribution Networks, or CDNs, can solve these problems. Apple could build its own global CDN, or it could purchase an existing CDN, such as Limelight Networks (LLNW) or even Akamai (AKAM). Limelight is currently capitalized at about $600M and Akamai, which is considered the leader in the space, is hovering around a whopping $9B. Page 4: [Steve Jobs, Can You Hear Me NOW?] » Build Its Own Wireless Network The iPhone and 3G iPad have become incredibly successful products, but their success in the United States have come at a huge cost: an overall customer dis-satisfaction with AT&T, whose 3G wireless network has become overloaded with the data-hungry devices. AT&T Wireless is almost certainly going to lose its exclusive provider contract in 2011 on the iPhone, and plenty of armchair analysts and industry watchers predict that Apple is likely to partner with Verizon, which has a much beefier network than AT&T. But if the device's success is any indication, it's certainly possible that Verizon could get caught up in the very same network overload due to a mass customer exodus from AT&T to their system when existing iPhone 3G and 4G contracts run out. In all fairness though, Verizon has been very successful in managing data demand with their Droids, which have similar data-hungry needs to the iPhone 3G and iPhone 4, and their network is also more robust with a much wider 3G coverage area with a lights-on of 4G LTE service scheduled for 38 US cities in early 2011. Also Read: If iPhone Comes To Verizon, We Got Answers (June 2010) However, in order for Apple to not have to deal with carrier mishegas in the US anymore, it probably makes sense for it to become a carrier itself. Obviously, there would be significant regulatory issues that the company would have to overcome, but it wouldn't be impossible for Apple to do. In terms of actual infrastructure costs of what would be needed to build a 4G network, the company would be looking at anywhere between 5 and 10 billion dollars to pull it off, depending on whether or not they needed to build new towers, could piggyback their transceivers on existing ones, what backhaul services they would need to buy, network operations centers needed, et cetera. And as the main manufacturer of wireless carrier transceiver equipment is Motorola, they'd probably want to settle their lawsuit with them, unless they built the infrastructure on Qualcomm-based equipment. [EDIT: Motorola's carrier equipment company is now a subsidiary of Nokia-Siemens, which is the largest carrier equipment manufacturer in Europe, so the lawsuit with the handset manufacturer wouldn't affect this.] Of course, Apple could go and buy a carrier that already does business in the US. The logical choice would be Sprint/Nextel (S), which is currently capitalized at approximately $14.5B and already has a significant customer base. The other carriers are way too big for the company to swallow -- the next smallest would be T-Mobile, which is actually a subsidiary of Deutsche Telekom AG (DTEGY.PK) a German-owned company. Apple could certainly offer to take the US subsidiary off the company's hands, and it may even be attractive for Deutsche Telekom to dump the asset, but given how painful it is to buy a company in the EU of any substantial size without going through a huge regulatory ordeal, it's unlikely Apple could complete the transaction. Page 5: [Apple, you have 500 MILLION friend requests pending. Accept or Ignore?] » Purchase a Controlling Share in FaceBook FaceBook. Uhhhhh, yeah. FaceBook. As much as it drives me crazy, FaceBook is the hottest company right now next to Apple itself. And with over 500 million users sharing data and communicating, it makes it among the most desirable, if not the most desirable audience for Apple to integrate its products with. This has become something of a hassle of late, as Apple recently launched its own pseudo-social network with iTunes version 10 in the form of Ping, which was supposed to have FaceBook connectivity at launch date but issues with last-minute negotiations apparently caused Apple to have to pull that feature from the software. The problem of course is that FaceBook isn't a publically-traded company and its market valuation depending on who you talk to is estimated between $25B and $30B. That's a huge chunk of change for Apple to blow even with its massive war chest for what is essentially a freakin' web site, so the chances of the Fruit Loop and company sucking up Zuck and Friends is pretty close to nil. For Apple to have a private controlling share it would probably have to cough up anywhere between 5 and 10 billion dollars in order to have a 20 to 30 percent stake in the company. Whether that would be actually enough for Zuckerberg and friends to seal the deal is unknown. If the companies couldn't come to some sort of agreement, Apple could certainly go head to head with FaceBook, by hiring away its top talent, and built an Apple Social Network, which I'm tentatively calling "iFriends". Also Read: FaceBook for Grownups -- Can Apple, Microsoft or Google Build One? (May 2010) I actually proposed this earlier in a piece I wrote about the maturity and questionable ethics of FaceBook and its founders, because I believe Apple does indeed have the skills and talent to produce a high quality and secure, family-friendly Social Network. But iFriends would have to be something of a Manhattan Project for the company, and it would likely eat up at least a billion dollars in development and infrastructure, if not more. If not FaceBook, perhaps Apple should consider going the professional network route, and throw some cash at LinkedIn, which in 2008 was valued at about $1B. Apple could probably snatch up the whole thing for around twice that today, if not significantly less. And unlike a fresh Social Network that Apple would have to build from scratch, it already comes with a strong user base. That might actually allow the company to make some serious inroads with the enterprise and business crowd, which are still tied to their BlackBerries and may see a business networking advantage integrated into their smartphones and tablets as a reason to switch to Apple's platform. Page 6: Don't wanna close my eyes... Don't wanna lose my platform license...[] » Initiate ARMageddon For the entire mobile and consumer device industry, an Apple purchase of ARM Holdings (ARMH) would be an absolute nightmare. For Apple, it would allow them to have exclusive rights to the company's technology roadmap and control the licensing of a key embedded systems technology that sits at the core of many electronics products. Once the licensee terms ran out, Apple could easily terminate the architectual licenses of companies it views as its competitive enemies, and then the major mobile players like Google, HTC, RIM, HP/Palm, Microsoft, Motorola, Texas Instruments, Freescale, Marvell, nVidia, Qualcomm and dozens of others would be out in the cold if Steve Jobs decided he wanted any of them to go away. This is all assuming, of course, if any of these players didn't have perpetual license agreements in play, in which case Apple would be obligated to permit those players to continue to manufacture ARM-based chips, depending on the IP of which chip architectures they had access to. Still, the architectural platform which powers the core of just about every smartphone device and SOHO routers and numerous other consumer electronics products would be under Apple's total control. This could cause any number of players using the ARM platform to go scrambling for alternative embedded technologies, such as low-power x86, MIPS, or even the PowerPC architecture which powers the Sony Playstation, the XBOX 360 and the Nintendo Wii. Of course, with any large purchase of this type -- and the British company is capitalized at about $8B at the moment and would likely sell for no less than 10 to 12 billion dollars -- it would be subject to serious government scrutiny in the US, the EU and Asia and Apple would very likely find itself hard pressed to "go medieval" on ARM licensees like a flock of Angry Birds. But it could definitely make life difficult for its competitors. What do you think Apple should do with its money? Talk Back and Let Me Know.

Troubled movie-streaming company Quickflix has joined forces with troubled mobile vendor Research In Motion (RIM) to deliver video content on BlackBerry 10 OS devices in early 2013. The subscription and pay-per-view movie-streaming service will be available through connected BlackBerry 10 OS L-Series and N-Series devices, according to Quickflix. "We are delighted to be introducing our digital streaming to BlackBerry devices, as we continue to provide consumers with the most accessible streaming services in the market," Quickflix Chairman and CEO Stephen Langsford said in a statement. The company is currently in financial strife, culling one-third of its workforce to cut costs, but that hasn't stopped it from expanding its services to new devices. This week, Quickflix announced partnerships with Humax and Kobo to stream content to internet-connected PVRs and new-generation e-readers, respectively. RIM is also looking at a grim future if its upcoming BlackBerry 10 OS, which will be released next month, fails to gain any traction in the market . The vendor is struggling financially, haemorrhaging market share as consumers continue to rapidly adopt Apple iOS and Google Android mobile devices.

By Hedge Fund Solutions Group Wider credit spreads and potentially higher default rates set the stage for the largest distressed opportunity since 2009. Distressed investing can take several forms. The classic distressed investor buys debt instruments in companies going through bankruptcy and seeks to optimize their recovery on that debt. However, it’s just as common today to buy debt trading at distressed levels which are driven not by the financial position of the issuer but rather by forced or motivated sellers (e.g., a bank having to sell assets for regulatory reasons). In either case, it appears that we are in the early stages of a new, relatively narrow distressed cycle, which could potentially become broader and more extended, depending on the economic climate. In this article, we provide our outlook for both traditional distressed and more niche credit strategies, and assess the opportunities managers may seek to exploit in the current environment. Assessing the Trajectory and Breadth of the Cycle The past year has been difficult for the U.S. high yield credit markets, to say the least. The -6.6% the Barclays High Yield Credit Index returned over the 12 months ended January 2016 is the third worst rolling 12-month return (outside of a recession) the index has seen in over 30 years. (The other two occurred during the midst of the 2002 market crash.) High yield spreads, which are approximately 750 basis points (bps) over U.S. Treasuries, are in the 90th percentile of periods excluding recession over the past 30 years.1 Over $400 billion of high yield bonds now trade below $90,2 and the average price of a bond in the Credit Suisse High Yield Index is $82.96, down from $105 in June 2014. According to the J.P. Morgan High Yield Index, as of February 29, 2016, the implied default rate for 2016 was 8.4%, or 5.7% excluding energy. Figure 1.1: U.S. High Yield Bond Spreads Have Widened Substantially Source: Bloomberg, data through March 31, 2016. Barclays U.S. Corporate High Yield Index yield-to-worst minus 10-year Treasury yield. Whether or not a meaningful uptick in actual corporate bankruptcy filings will materialize, it is undeniable that, from a pricing standpoint, the next distressed cycle has already commenced. At a minimum, current price levels suggest a near- to medium-term opportunity set for stressed/credit investors. Will this collapse in bond prices and increase in spreads be followed up by a spate of defaults, presaging a much longer-tailed, multiyear distressed cycle? The answer to this question is less obvious. Our team’s current expectation is that default rates will increase in 2016, although likely not to the implied levels mentioned above. What is harder to conclude with certainty is whether we are entering a 2002 or a 2008 type default cycle. While a global recession or an extended tightening of credit could trigger a larger, more widespread default cycle, for now we believe that distressed supply will be sector-specific. More particularly, there are likely to be ample balance sheet restructurings in the energy/commodities sectors, with some select opportunities across other industries in secular decline, most notably traditional brick and mortar retail. Outside of these sectors, barring a major change to the macro backdrop, we believe there will be select distressed opportunities but not necessarily a widespread distressed cycle. It is important to emphasize again that even if a major distressed cycle does not come to fruition, the recent price moves, which have been fairly indiscriminate, are producing compelling opportunities in stressed names as well as in capital structure arbitrage. Energy: Focal Point of Current Potential Pain is certainly being felt and will continue to be felt across the energy sector. Oil has dropped by over 50% from approximately $100 per barrel, while natural gas prices have fallen 70% over the past three years. This is reflective of both current supply/demand imbalances and worries about future global growth. Even if prices were to rise materially from here, many companies would still be just at or below their cost of production, leading many to significantly cut production or liquidate altogether. Credit Suisse has estimated that, at $50 per barrel for crude and $3 per mcfe (thousand cubic feet equivalent) for natural gas, energy defaults could reach 30% by 2017. Market prices certainly reflect these draconian scenarios. Of the $437 billion (bn) in high yield bonds trading below $90, 37% are within the energy sector.3 The average yield-to-worst (YTW) of U.S. high yield energy credits is 17.1%, while the average YTW for independent E&P and oilfield services are 21.4% and 25.3%, respectively.4 Figure 1.2: Energy High Yield Has Come Under Particular Pressure U.S. Corporate High Yield Energy Bond Performance Source: Bloomberg, data through March 31, 2016. Bloomberg High Yield Corporate Bond Energy Index. In our view, energy companies can be ideal candidates for distressed investors seeking to generate alpha. They carry large amounts of hard assets and both the industry itself and individual company capital structures can be highly complex, leading to many inefficiencies and mis-pricings. Additionally, the total potential opportunity set within energy is large. High yield energy credit outstanding at market value is $131bn5 while there are 365 high yield energy issues. This does not even take into account the real potential for “fallen angels,” or investment grade energy credits being downgraded to junk status. If one includes other commodity-related companies or second derivatives of energy companies (for example, a helicopter company that delivers supplies and labor to offshore rigs), the opportunity set grows even further. As we mention above, downward pressure on prices has been fairly indiscriminate, which has meant that even companies that are less exposed to lower commodity prices or whose business model includes servicing sectors outside of energy have been punished to a similar magnitude as those companies who depend on commodity prices more directly. This gives managers with the ability to understand these businesses a huge advantage as they can buy into securities at very attractive prices, with, in many instances, limited downside and significant upside. Opportunities Outside of Energy Elsewhere, the outlook for a larger supply of defaulted debt is more ambiguous. Fundamentals remain relatively supportive. Revenues of high yield issuers are still growing, albeit at a slower pace than in years past, while EBITDA margins have actually improved over the last few years.6 Leverage levels remain around the post-crisis average (~4.1x), and coverage ratios are the highest they have been since 2011 (~4.6x).7 The maturity wall is also fairly supportive. Only $52bn in high yield bonds and $17bn in leveraged loans are due in 2016, although those numbers rise to $98bn and $34bn in 2017 and $139bn and $85bn in 2018.8 On the other hand, several other indicators point to a more precarious position and possibly more forthcoming distressed opportunities. High yield new issuance has fallen precipitously over the last year, from approximately $400bn in each of 2013 and 2014 to approximately $100bn in 2015.9 Typically, a rise in default rates lags a decrease in new issuance by a few years. Deterioration in underwriting standards and fundamentals are also a leading indicator for rising defaults. According to S&P Capital IQ, covenant-lite loans as a fraction of total leveraged loan issuance reached a record high of 80% in the fall of2015. Last year, Standard & Poor’s issued the most downgrades in one year since 2009, while the number of downgrades in August and September 2015 were the most in a two-month stretch since May-June 2009.10 Meanwhile, S&P 500 and Russell 2000 earnings per share have been declining; the magnitude of the declines we have seen of late are usually only experienced during recessions, as last seen in 1990, 2001 and 2007.11 Major credit spread widening typically precedes distressed cycles as well. Regardless of whether the recent market turmoil leads into a full-fledged distressed cycle, credit spread widening and credit downgrades have led to technical pressure as mutual funds that are prohibited from owning defaulted securities and hedge funds coming under redemption pressure are forced to sell. This results in increasingly scarce liquidity, which often sparks an indiscriminate selloff of both good and bad investments. We seem to be in the midst of just such an environment. Keep in mind that trading volumes prior to this were already thinner than we have seen in previous cycles due to regulatory changes and banks limiting their market-making activity. Given the technical and fundamental pressure we have seen in certain sectors, distressed investors are focusing on two primary areas of opportunity: (1) bonds trading at stressed/distressed levels but which they believe are ultimately “money-good” and (2) stressed/distressed companies which they believe will be forced to undergo a restructuring and bankruptcy. A distressed manager’s ability to pick good and bad credits as well as good and bad industries is imperative at this point, particularly given our expectation that market volatility will remain elevated for the foreseeable future. One sector in particular that we believe presents both long and short opportunities is retail ($38bn in high yield market value12). Traditional brick and mortar retailers have been suffering secular declines in their businesses for several years now as online retail platforms such as Amazon have continued to out-price them and gain market share. Many retailers with secularly declining business models have been sustained due to quantitative easing. As the recent credit spread widening has led to more discernment among credit investors regarding the quality of businesses they finance, we believe the underlying business issues many retailers have been facing will finally materialize in the form of lower prices across their capital structures. There will undoubtedly be some retailers with strong businesses who will survive, but we believe there will be many more who do not, presenting first a compelling short opportunity and then potentially a distressed opportunity on the long side. Another area in which distressed investors are likely to find opportunities in the current environment is capital structure arbitrage. Just as volatility creates indiscriminate selloffs across asset classes and sectors, putting pressure on both good and bad companies and balance sheets, it can create indiscriminate selling within one company’s capital structure as well. An added benefit of capital structure arbitrage in such an environment is that it provides a natural hedge as an investor will typically go long one part of the capital structure and short another in roughly equal amounts, thereby limiting overall market exposure. Structured/Niche Credit: Value from Noneconomic Price Declines While corporate credit tends to be the focus of most stressed/distressed investors, from time to time, structured products can become stressed and offer compelling return opportunities for those funds capable of sourcing and analyzing these often complex instruments. Two such areas look particularly interesting to us today: CLO mezzanine debt and TruPS (trust-preferred security) CDOs. While these areas have their own unique attributes, the general attractiveness of both stems from the fact that the recent material price declines have been spurred largely by noneconomic motivations, most notably regulatory changes affecting banks. For CLO mezzanine debt, yields have widened across the capital structure over the last year (see Figure 1.3). CLOs are typically structured such that a layer of equity serves as a buffer for the first ~10% of losses. In order for BBB or BB tranches to suffer principal losses, annual default rates would have to spike to 2009 levels and stay there until maturity of the CLO—a highly unlikely scenario in our estimation. Additionally, these debt tranches are floating rate and therefore are insulated from any potential rise in interest rates. While credit spread widening in the underlying loans of these structures explains some of the price drop in these securities, we believe much of the current pricing dynamic is better explained by the fact that ~40% of the holders of CLO mezzanine debt are nonpermanent capital (i.e., hedge funds) and banks that are under regulatory pressure to divest. Figure 1.3: CLO Spreads Appear Particularly Compelling CLO Spreads & Yield to Maturity Underlying Spreads Ratings CLO Spreads Change since Jan. 2015 CLO Est. YTM Leveraged Loans High Yield AAA 175-205 +26 3.16% - - AA 250-280 22 4.21% - - A 375-425 +47 5.46% - - BBB 540-650 +201 8.28% - - BB 1000-1300 +448 13.16% 435 442 B 1450-1850 +818 18.35% 756 734 Click to enlarge Source: Greywolf Capital Management, data as of March 1, 2016. Spreads are relative to Treasuries and measured in basis points. TruPS CDOs are the other structured credit instruments that we believe also offer an interesting risk/reward proposition over the coming one to two years. TruPS CDOs are tranched securitizations of bank preferred securities. These trust preferreds are hybrid securities that combine features of both equity and debt. They represent a relatively niche market of about $40 billion (notional) and are under-researched given that many of the issuing banks are small and/or do not have publicly traded equities. This disinclines most large institutional investors from participating and thereby creates some pricing inefficiencies. Much like CLO debt, this market has declined in price over the last 9-12 months owing to selling by hedge funds faced with investor redemptions and banks that now receive poor risk capital treatment for these securities under the new regulatory regime. At the same time, the fundamentals of the underlying banks making up these CDOs have improved markedly over the last several years. Net income and revenue are both up, and nonperforming loans are down. The number of banks on the FDIC’s “problem list” declined from 329 to 203 in the last year. Rating agencies upgraded over $25 billion of TruPS in 2015 alone. Further, a year ago there were 112 banks deferring interest on their TruPS and today there are 85.13 Summary Overall, the volatility in global markets over the past year has created many opportunities across the credit markets. Within traditional distressed strategies, we believe there is a fairly large upcoming opportunity set throughout the energy complex, from drillers through ancillary services companies connected to the oil industry. Outside of energy, certain sectors, such as retail, should continue to experience secular declines and a concomitant rise in stressed/distressed situations. The recent volatility has also opened up opportunities to own credits trading at large discounts, which may ultimately be “money-good” or not need to restructure. Given the diversity of the opportunity set as well as the potential for ongoing volatility, we believe it is prudent to continue to concentrate on managers who use little to no leverage, focus on liquidity and downside protection, and have capital stability. Additionally, we believe managers who have a demonstrated ability to invest throughout the capital structure and to short will outperform more levered, long-biased managers focused solely on traditional distressed opportunities. 1Source: Goldman Sachs. 2Source: J.P. Morgan. 3Source: J.P. Morgan. 4Source: Barclays. 5Source: Barclays. 6Source: J.P. Morgan. 7Source: J.P. Morgan. 8Source: J.P. Morgan. 9Source: Barclays. 10Source: The Wall Street Journal. 11Source: Ellington Capital Management. 12Source: Barclays. 13Source: Hildene Capital. 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BlackBerry Ltd. (NASDAQ:BBRY) Q1 2017 Earnings Conference Call June 23, 2016 08:00 AM ET Executives Debbie W. Tuck - VP of Finance and Head of IR John Chen - Executive Chairman and CEO James Yersh - CFO Analysts Daniel Chan - TD Securities Tim Long - BMO Capital Markets Maynard Um - Wells Fargo Securities Paul Steep - Scotia Capital Richard Tse - Cormark Securities Ben Bollin - Cleveland Research Douglas Clark - Goldman Sachs Michael Kim - Imperial Capital Deepak Kaushal - GMP Securities Paul Treiber - RBC Capital Markets Anil Doradla - William Blair & Company Operator Welcome to the BlackBerry’s Fiscal 2017 First Quarter Conference Call. Please note that all participants have been placed in a listen-only mode. I will turn the call over to Debbie Tuck, Vice President, Finance and Head of Investor Relations for BlackBerry. Debbie W. Tuck Thank you, operator. Welcome to BlackBerry’s fiscal 2017 first quarter results conference call. With me on the call today are Executive Chairman and Chief Executive Officer, John Chen and Chief Financial Officer, James Yersh. After I read our cautionary note regarding forward-looking statements, John will provide a business update and James will then review first quarter results. We will then open up the call for a 30 minute Q&A session. In order to let as many people as possible ask questions, please limit yourself to one question. This call is available to the general public via call-in numbers and via webcast in the Investor Relations section at BlackBerry.com. A replay will also be available on the BlackBerry.com website. Some of the statements we will be making today constitute forward-looking statements and are made pursuant to the Safe Harbor Provisions of applicable U.S. and Canadian Securities Laws. We will indicate forward-looking statements by using words such as expect, will, should, model, intend, believe and similar expressions. Forward-looking statements are based on estimates and assumptions made by the company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors that the company believes are relevant. Many factors could cause the company's actual results or performance to differ materially from those expressed or implied by the forward-looking statements, including the risk factors that are discussed in the company's Annual Information Form, which is included in our annual report on Form 40-F and in our MD&A. You should not place undue reliance on the company's forward-looking statements. The company has no intention and undertakes no obligation to update or revise any forward-looking statements except as required by law. I will now turn the call over to John. John Chen Thank you. Thank you, Debbie. Good morning everybody and welcome. I will take you through -- this morning I'll take you through the summary of our Q1 results. Then I will provide some detail on our key business segments. As I mentioned last quarter, we're starting business -- segment reporting this quarter. This is beneficial for two key reasons. First, we're focusing on making each line of business profitable and maximizing the return on invested capitals. To enable this I have started to look at the business -- each of the business on the full P&L basis which means we are now required to report results based on our operating segments. Secondly, it provides, I hope you agree that it provides increased transparency to our shareholders and the market as well as our internal stakeholders. Moving to our results, I'm pleased to report positive non-GAAP operating income of $14 million, with our Q1 results that signal that we're on the right track. A few key takeaways for the quarter, number one we made good progress in reducing the loss of our device business. I know this is a major concern of a lot of people. We created a new business unit named Mobility Solutions. This unit will manage most of BlackBerry smartphone business and will also start focusing on developing a device software licensing program. In Software and Service, we continued to deliver very robust goals, as you can see and we achieved the highest quarterly revenue in the company's history, and I'll get through that more in detail later. Our financial foundation is strong and we are definitely investing in growth. Now a summary of our Q1 results. I'm referencing everything with non-GAAP numbers. So revenue came in at $424 million. The color here, device revenue was below our expectations. We're still seeing a softness of the high end of the market, but we have a plan and a roadmap to drive profitable revenue growth later in the year. In software we performed well, as I mentioned early and continue to deliver the robust growth. Excluding IT licensing, software and services grew 131% year-over-year. This is the second consecutive quarter we more than doubled our Software and Services revenue. Including IT, total Software and Services revenue was $166 million, up 21% year-over-year. This was the highest quarterly revenue for Software and Services in the company history. SAF was about in line with expectation, after taking into account for the FX as well as the one time effect that James is going to explain in a little bit more detail, that came in, in Q4 of a quarter ago. Gross margin was strong. This is probably a very good indicator. It came in at 53% from 49% last quarter and 50% a year ago. It is also the highest level gross margin number since 2007. Operating income, as I mentioned earlier, was a positive $14 million. We also achieved our 10th quarter of positive EBITDA, which came in at $58 million in the quarter. With the impact of the interest expense from our convertible debt the EPS was breakeven. The convert becomes callable in November of this year and I am working with the board on a plan to reduce this expense. Ending Q1 cash balance was $2.53 billion. Now let me provide various details on our key business segments. Let me start with Software and Services. We’re obviously very pleased with the momentum. Our software business continues to achieve scale and traction, resulting in robust growth and increasing market share. In the quarter our growth in software was driven by strong performance in three different categories, EMM, secure messaging as well as QNX. The mix of revenue of recurring revenue came in at 74% compared with 70% last quarter. We had about 3,300 customer orders in Q1. This includes 526 customer purchasing our suite, and for those who follow us that’s our new EMM go-to-market approach. This was up from 90 in the first 60 days after the launch in fiscal Q4 of last year. Let me mention some of the recent high profile wins. Government of Canada purchased multiple enterprise software products, including the EMM, the BBM Protected and the Secure Voice. This really demonstrates the differentiation of our broad software portfolio over a lot of our competitors. AtHoc Services which is among our secure messaging offerings had wins in multiple verticals. In the education with Macquarie University, in transportation with Great Western Railways and Salt Lake City Airport, and in government with the U.S. Senate, The Pentagon Force Protection Agency, The California Department of Justice and the United States Coastguard, that's just to name a few. Our strength in security and privacy continues to play well in the legal industry, highlighted by some really big wins in Reed Smith, Solothurn and Cromwell [ph] and Clifford Chance. Some additional enterprise wins including Buckeye Partners, one of the largest independent liquid petroleum operator in the United States, and Intercontinental Exchange, the leading network of regulated, a regulate exchange and clearing house for financial and commodity markets. As previously communicated we are ramping up channel expansion effort to drive continued growth. In Q1 we brought in new seasoned leadership and launched a new global partner program, or I guess re-launching the new global partner program. In the quarter we signed 107 new partners, representing a 10% increase in our global partner count. This includes a major software distribution agreement with HCL in India. It’s obviously still early but the initial traction is encouraging. Earlier in Q1, now I am switch over to IoT side, earlier in Q1 we announced BlackBerry Radar, our SS tracking services at the Mid-Atlantic Trucking Show. This solution is designed to track freight and cargo using a cloud-based IoT platform. Customer in trucking and logistic will benefit from the higher utilization of assets, improved efficiencies and enhanced return on investments. Of course our platform is based on the BlackBerry level security and there are also anti-theft features built in as well. To-date we have conducted two successful proof-of-concept trials, and are launching it commercially in mid-July, which is obviously next month. Our initial target market is North America, followed by Europe and then we will expand to the rest of the world. QNX has a great footprint in auto, now I am switch over to QNX, which give us good leverage into the connected car opportunity. We’ve built and operate a secure end-to-end system to deliver over-the-air software updates to cars, to automotive, automobile. This technology is a growing imperative for automotive OEMs, with the average vehicle nowadays using about 60 million to 100 million lines of software code. Our solution will help the auto industry provide proactive maintenance update, without time consuming visit to the repair shop. This solution has been derived from our technology for updating 50 million mobile phones in over 100 countries. So our solution is definitely secure and it definitely scales. As an example of a win Carmel Automotive chose this solution, in addition to a number of our other QNX connected car products. We have a very strong pipeline in this area and some very notable industry players. So to summarize it, looking forward we feel very good about our six growth engines driving our software business. They are EMM, secure messaging, IoT, embedded software in connected cars, cyber security services and of course IP licensing. Moving on to the Mobility Solutions, we continue to make good progress on driving towards profitability in this segment, which includes our device business. In a quarter they were both organization and operational activities from the past quarter, and I would like to highlight some of them. We named a new general manager to the Mobility Solutions Group, Ralph Pini and a new sales leader, Alex Thurber. Both are experienced leaders bringing technologies and channel sales experience. The new leadership will focus on a lean and agile development approach, and in opening up new distribution channels to augment the traditional carrier channels. The new team is also focusing on developing a device software license model, which will contribute to both growth and profitability in this segment. We have also made operational improvement in Q1 with this segment, including entering into new and more favorable agreements with manufacturing partners. This helped us further de-risk our balance sheets in area where such as reducing inventory exposure, shortening order lead time as well as better cash management. On the overall mobility solution roadmap we deliver our Android Marshmallow release on schedule. We are the only vendor that has kept pace with Google in delivering timely Android security patches at the start of every month. And our releases have been ahead of Samsung, HTC, LG, Sony and other Android-based players. This means that BlackBerry Android users enjoy the highest level of protection from cyber security threat among all Android devices. On to the BB10, our BB10.3.3 releases is undergoing the NAIP certification by a third party, which we expect to obtain by the end of this month. The software will then obviously be available shortly after that. In Q1 we recognized revenue on over 500,000 device, at an average ASP of about $290. We improved our gross margin by the way in the segment from to 8% from 1% last quarter. I'll now turn the call over to James for a detailed look of our financials. James Yersh Thank you, John. Today we reported Q1 GAAP revenue of $400 million and non-GAAP revenue of $424 million with a GAAP loss per share of a $1.28. Non-GAAP EPS was breakeven as John mentioned. Our non-GAAP income statement presentation excludes purchase accounting deferred revenue write-down, deferred debenture fair value adjustment, stock comp expense, restructuring program charges, inventory write-down, amortization of purchased intangibles and business acquisition and integration charges. For this quarter it also excludes the non-cash good will impairments, and along with the asset impairment charge which I will discuss later. My comments in our financial performance for the quarter will be based on non-GAAP terms unless or otherwise specified. For reconciliation between our GAAP and non-GAAP numbers please see the earnings press release and supplement published earlier today, including corporate overhead not included in the multiple operating segments. As John mentioned, and as we previously discussed to provide transparency in our path to profitability this will be the first quarter that we are reporting on multiple business segments. We will provide comparative reporting for revenue and gross margin only. I will begin with the consolidated review of our Q1 F17 income statement results and move on to the individual segments thereafter. Now let me being with the consolidated income statement results. Our total revenue for the first quarter was $424 million. Our consolidated gross margin for the first quarter was 53.3%, up from 48.7% last quarter. Our non-GAAP gross margin excludes a non-cash inventory impairment of $41 million. Gross margin increased sequentially due to strong performance in Software and Services. Our model reflects gross margin around 50% for the next quarter. Operating expenses were $212 million, down from $258 million last quarter. Our non-GAAP operating expenses exclude $16 million in restructuring charges, $7 million in acquisition costs, $28 million in amortization of acquired intangibles, $12 million in stock comp expense, $57 million in non-cash goodwill impairment charges, and $501 million in non-cash long lived asset impairment charges, which primarily relate to the mobility solutions unit and I'll go through that when I talk about that segment. Our non-GAAP OpEx also excludes a non-cash credit of $24 million for our convertible debt. As a reminder this non-cash adjustment has no impact on the face value of our debt on our liquidity or on our operations and cash flow. Non-GAAP operating income was a positive $14 million. Our adjusted EBITDA was approximately $58 million this quarter excluding the non-GAAP adjustments previously mentioned. Given our move to segment reporting this quarter, the accounting rules require us to assess whether any of the non-current assets and goodwill associated with the individual segments could be potentially impaired. We conducted our analysis in accordance with the requirements of the accounting rules and concluded that the intangible assets related to hardware required a reduction in their carrying value. The results of the exercise was a $57 million reduction or write-down of goodwill and a $501 million write-down of hardware related intangible assets, including historical fixed royalty agreements. I will now breakdown the three business segments. First is Software and Services. Our Software and Services revenue represented 39% of total revenue. Total Software and Services revenue for the first quarter was $166 million, up 21% year-over-year and up 8% quarter-over-quarter, including IP. Roughly 74% of the total Software and Services revenue was recurring in nature. Our total Software and Services gross margin for the first quarter was 80.7%. Our total Software and Services operating expenses were $97 million. Software and Services direct operating expenses consist primarily of headcount and third-party costs relating to our enterprise solutions and services, Blackberry Technology Solutions, AtHoc, [indiscernible] BBM and professional cyber security services businesses. Operating profit in Software and Services was $37 million or approximately 22%. Next is our SAF business. Service Access Fee revenue represented 25% of consolidated revenue. Total SAF revenue for the first quarter was $106 million, down 26% quarter-over-quarter. The sequential SAF decline was slightly higher than our expectations due to the recognition of a benefit in the prior quarter that did not recur in Q1, the negative impact of FX, and the change in the timing of recognition of revenue for certain customers. We modeled a sequential decline in SAF revenue of roughly 20% next quarter. Our total SAF gross margin for the first quarter was 75.5%. Lastly, I will discuss the results of our hardware and other business which John mentioned will now be called Mobility Solutions. Our Mobility Solutions revenue represented 36% of revenue. Total Mobility Solutions revenue for the first quarter was $152 million. We recognized revenue on roughly 500,000 units and ASP was approximately $290. Our total Mobility Solutions gross margin for the first quarter was 7.9% and includes the benefit relating to a reduction of fixed loyalty cost from the long lived asset impairment which I described previously. Without the impact of the reduced fixed royalty's reduction, Mobility Solution's gross margins would still have been positive for the quarter. Prior to the impairment charges, we were carrying onerous fixed IP costs relating to legacy inbound licenses or prepaid deals. This made our margins lower than our peers as our royalty burden was much higher. The impairment brings the balance sheet more in line with the size of our devices business and adjusts our cost base and royalty cost to be more comparable with the industry. Total Mobility Solutions operating expenses were $33 million. Mobility Solutions direct operating expenses consists primarily of headcount cost associated with the development, manufacturing and sale of devices. Mobility Solutions operating loss was $21 million for the quarter. Now moving on to our balance sheet and working capital performance, total cash, cash equivalents and investments ended at $2.5 billion. This reflects $61 million of net operating cash used during the quarter. Cash flow from operations before working capital adjustments was negatively impacted by restructuring charges in payments and the non-cash inventory impairments. Excluding these items cash flow from operations before working cap adjustments would have been positive. Working capital was also negatively impacted by the recognition of income tax receivables that the company will collect in the back half of this fiscal year. Our net cash position is approximately $1.3 billion. Aggregate contractual obligations, which includes purchase orders, operating lease obligations, interest payments and other goods and services utilized in operations, amounted to approximately $885 million, down from $1.2 billion in the same year ago period. Purchase orders with contract manufacturers represented approximately $150 million of the total, down from $238 million in the same year ago period and $162 million in the prior quarter. We have also shortened our lead times for ordering hardware which allows us to manage our commitments more effectively. As John mentioned with our new contract terms the inventory risk has shifted to our ODM partners, thus protecting our balance sheet. Moving to the cash flow statement, use of free cash was $65 million in the first quarter which consisted of net cash used in operating expenses of $61 million, minus the capital expenditures of $4 million. Looking forward we expect to maintain our positive cash flow and positive EBITDA for the full 2017 fiscal year. That concludes my comments and I’ll turn it back over to John. John Chen Thank you, James. Before we go to the Q&A, I will share some thoughts of our outlook for 2017 or FY17. I'd like to reiterate our expectation for software growth of around 30%. For the full fiscal year I continue to expect quarterly software and service growth to offset the decline on SAF cumulatively for the year. Our objective is to achieve operating profitability in Mobility Solutions in Q3 of the current fiscal year. Based on our overall margin strength in Q1, and a much more efficient financial model some of the stuff that James has spoken about we currently expect our full year EPS to be around a loss of $0.15, minus 15 that is, this compares to a current consensus of a $0.33 loss. I also expect to be free cash flow positive for the full year. So now I am ready for the Q&A session, and operator could you please manage the logistics. Question-and-Answer Session Operator Certainly. [Operator Instructions] Thank you. And our first question comes from the line of Daniel Chan of TD Securities. Your line is now open. Daniel Chan Hi, good morning guys. John Chen Good morning. Daniel Chan I just wanted to talk about Radar for a little bit. You had it in trial for a few months now. Can you give us a sense of early customer feedback and how many customers you've signed up so far? John Chen We have not -- we did a trial with two and we are still currently on trial with three. Feedback's been very strong for the first two trials that was finished, and so and that will -- we will start shipping that in middle of July. So I don’t have the details of the entire pipeline but seems like that everything comes back has been [ph] very strong. Daniel Chan And have you guys built any Radar sales into your fiscal year 2017 assumptions? John Chen Not much. Daniel Chan Okay. And then the software can you give us an idea of our organic growth rate for the quarter? John Chen We don’t really have organic growth rate anymore, and the reason is that we have to actually combine both sales force and a lot of the accounts that actually have both BlackBerry and the legacy good. So it’s very hard to separate out the two now. Daniel Chan Thank you. John Chen Yeah. Operator Thank you. And our next question comes from Tim Long of BMO. Your line is now open. Tim Long Thank you. Could you talk a little bit about in the software business, what you've been seeing from the bundling of all the different solutions. Are you starting to see some traction there? And then I just had a follow up on the device business. John Chen Yes, as I reported earlier, we went from 90 to 560 some customers in the span of 90 days. It's been extremely well received. And it also by the way it gives us an opportunity to upsell to our customer, because they come in with one or two other suites. We have five of them with five components on the entire suite or platform. So this is very efficient for us and very efficient for the customer also. So I see the receptivity be huge, because most of the customer doesn't want to deal with the complexity of about 20 different features for example. And so our point [ph] product, this is a good thing for both of us. Tim Long Okay. And then just on the Mobility Services Solutions business, the device software licensing, could you explain what that is, it sounds like it's zero now or how is that going to be different than IPR revenues? How do you split what goes into software and what goes into the Mobility Solutions business, that will be helpful to understand, thanks. John Chen Okay, excellent. So there is zero revenue. But the reason of us putting that unit together with device is so that I could start shifting some of our business focus on to software. And this is like licensing our hub. A lot of the good stuff that we do in devices like the BlackBerry Hub, some of our Antenna technology, power management technology and the software, the list goes on, those that I'm willing to license to other OEMs, phone manufacturers, device manufacturers, even equipment people, and so this is different from giving you a patent, right. Is that making sense? Tim Long Yes. John Chen It's like, you can use my hub and you might pay me a dollar a phone or whatever it might be or annual fee for using the hub, but you don't have the IP rights, to hub [ph] there or the underlying patent that supported the hub. Tim Long Okay. So this would be to device manufacturers or ODMs or whoever is making the phones? John Chen Making phones or making the equipment. Tim Long Phone or device. Okay, alright thank you. John Chen Sure. Operator Thank you. And our next question comes from Maynard Um of Wells Fargo. Your line is now open. Maynard Um Hi, thanks. Good morning. So I just wanted to clarify, where are the cost of running the NOC? The SAF operating ones seem very high, so I'm wondering if it's in corporate unallocated. And then separately John, I'm curious why you think it's important to be in the hardware business. I mean I presume if you're out of it to provide better visibility of the business. You've at least gotten out the risk of inventory off the balance sheet. But you'd also presumably get a higher multiple on the remaining business. And it wouldn't seem like you would need the hardware business for your new device software licensing business. So I'm curious are we missing something or not seeing something that you think will drive the hardware success, that's sort to driving the decision to stay in the hardware business? John Chen Okay, great question. I'll let James answer the first question, I'll answer the second. James Yersh Hey, Maynard. So your question on the NOC infrastructure, the short answer is there is nothing that's left in corporate. All of the infrastructure cost are either -- they were allocated to one of the three business units. So -- and basically we've got a basis to do that, but all three of the segments effectively use that and the whole NOC is there for go-to-market. So there is no even conceptual reason to leave anything in corporate which would kind of be what's left to support the entire business. So it's allocated across all of mobility solution software and services and SAF. Maynard Um So James, just so the maintenance of that, so your fixed infrastructure, I presume the SAF business is the one that uses the network the most. James Yersh Correct, that’s right. Maynard Um Okay. So the incremental cost of this -- of running the network is very small then? James Yersh Correct. Maynard Um Okay thanks. John Chen Okay. As far as the hardware is concerned, a couple of reasons. Number, it's a customer reason. The customers, many customers especially in the government world, they're still relying on us to provide a secure handset for them. That's number one. Number two, I really, really believe that we could make money out of it of our device business. And to make sure to augment that so we don't put too much emphasis on that, we started the software business, start licensing our technology which we spoke about earlier. So let's see how we could develop this. As I told everybody I think within a couple of quarters we will be making profit in the whole Mobility Solution Group and definitely device losses has been pared down quite a bit. As you pointed out we de-risked a lot of stuff already. I was pretty much burdened by the fact that we have not only the infantry but the legacy IP, I guess James used the word in-bound royalty, some of the contracts and stuffs, we either written it off or renegotiated a lot of those. So we are at the point that where our business are extremely efficient and we no longer really making any hardware. We are really a hardware design house. I do design, I don't really make hardware, I do design hardware and as I pointed out earlier and with the new manufacturing arrangement, that we made we don't really carry too much of the risk to our balance sheet. And then we just have to manage the bottom line from the expense side of the equation. So let's see whether we can make a run of it. It is not then then we already started our software part of that business and maybe that transition will be smoother. Maynard Um Okay, thanks, and James sorry, just to clarify the income tax, did I hear you say that there is a benefit in the back half or how should we think about income taxes on the P&L? Thanks. James Yersh Basically it would be from the P&L Maynard, it would be zero to very small headwind in terms of cash taxes. My comment by the way was just in terms of working capital if you look at the balance sheet we kind of went from zero at year end to a $25 million receivable. So my comment was that $25 million will unwind itself in the back half of the fiscal year was more cash taxes in our P&L per se. Maynard Um Great, thanks. Operator Thank you. And our next question comes from Rod Hall of JPMorgan. Your line is now open. John Chen Good morning Rod. Unidentified Analyst Hi, good morning. This is [indiscernible] for Rod. Thanks for taking my question. I got one question and one follow-up if I may. So could you talk about your pipeline in the smartphone segment? I think you earlier talked about launching a mid-range Android phone. Could you talk about your plans over there? John Chen Pipeline, not quite sure how -- oh, the phone itself. Yeah, I'm not really prepared -- obviously I had one, I'm not really prepared to unveil that. I guess, I was thinking about doing that more in July timeframe. I have spoken about having two of them in between now and the end of this fiscal year, and they usually they both of them more in the mid range and mid to high, not going to be a high end phone. So that's all I prepared to discuss today. Unidentified Analyst All right. Could you also talk about your expectations for IP licensing revenue? I know you talked about generating maybe a little less than last year in the previous earnings call. Do you have any update of that? John Chen We have very, very small, almost none. Unidentified Analyst But what are your expectations for the fiscal 2017, the whole year? John Chen We will have some expectation, we really haven't broken it out, and IP is one of those that it takes a long time. We have a long pipeline of that, because you probably know the fact that we have probably 38,000 patents. They are very, very current and so we are very interested in licensing to everybody for that matter. But it's not something that we are forcing it, it's not something, we like to get it on more of the recurring basis, which of course make it a bit harder to negotiate. So there are lots of them going on over the world. But I'm not really counting, like I'm counting them to have some effect to our bottom line this year, but not really counting a big implement [ph]. Unidentified Analyst All right and one final question if I may, could you talk about the timing of what your expectations for seeing revenue on device software licensing? John Chen Probably we just started. I mean literally we started about a month ago. We need to assemble the pipeline. I would say six months. Unidentified Analyst All right. Thanks. Operator Thank you, and our next question comes from Paul Steep of Scotia Capital. Your line is now open. Paul Steep Great, thanks. John, just on EMM suite, could you talk a little bit about the wins, you obviously got a big ramp in new customers this quarter. What's been the ability to win in non-BlackBerry accounts and maybe talk a little bit about the quota carrying reps how you have allocated the software sales force? John Chen Very good, excellent, thank you. So we actually won quite a number of competitive win. I think I'm not going to name of competitors but as you know there has a lot of -- many of the point of solution competitors I think they are financially quite weak and we have taken many accounts from them. And also many of them are under POC. So this is one of those areas that is really the most, the best areas that we have today. That and the AtHoc secure messaging business, those two have lots of momentum growing very well, competitors we are extremely competitive, we replacing competitors. So we have quite a force. I mean as you probably know we now owned about 19% to 20% of the market, and in the last year to this year we have increased our feet on the street and software by roughly about 29% in headcount. And those are -- actually I was just talking to Carl [ph], the other day, we now have people that we now train up, is now getting into the pipeline and generating businesses for us. So I feel pretty good about the whole thing at this point. So it’s competitive, we are replacing competitors in many places. Paul Steep Great. Just two, one clarification, one other question. One would be for you John in terms of your M&A strategy how you are thinking about it. What’s your willingness to go in the market and buy like-for-like functionality let’s call it sort of almost a financial arbitrage, there is a number of struggling vendors out there that are clearly trading cheap on historic software multiple versus your preference to go and add new IP, and new functionality into the product platform? And then the clarification is just around your comments around mobile profitability what is your assumption behind that to get to sustainable profitability in that? Thank you. John Chen Okay. You are talking about the mobile profitability, you are talking about the device global side, the mobile solution. Paul Steep Yeah. John Chen Okay, thank you. So on M&A question this is great question, my preference is to get into the new market, new IP and new space. I don’t think just go consolidate is the right use of our assets personally and there are a couple of reasons; A, I am competitive. So I could actually go in and replace them anyway in many cases and secondly then I will get inherited with a whole bunch of technology and solutions that overlap, and since we have to support the customers so there is really very little synergy there. So I just added a lot of cost, yes I may had added some new accounts but I don’t think that’s very efficient use of our resources and I'd rather see us grow in a new area, that is augmentation, amend it to our current strategy or offerings. So that’s the answer to that question. Second, the answer to the Mobility Solution Group question, we lost $21 million from operations in the quarter in Q1. I definitely believe that the number in Q2 on a loss basis will be much smaller than that number. Significantly you can appreciate. That means it’s going to be 20 it’s going to be lot less than that. And I do believe that in our Q3 timeframe we will either breakeven or have a slight profit. And from that point it’s up to the new product rollout and as well as the traction of our software sale, our licensing program in handset to see whether we could -- if our software licensing program is successful then I could tell you that the sustainability or profitability is very, very high because that obviously the margins will be quite different. Paul Steep Perfect, thank you very much. John Chen Absolutely. Operator Thank you. Our next question comes from Richard Tse of Cormark Securities. Your line is now open. Richard Tse Yes thanks. John sort of related to Paul’s question, when it comes to the software services growth target of 30% this year, is that organic or does that include potential acquisitions? John Chen No, I don’t have any -- I mean if there is any acquisition it will be extremely small and it’s not a acquisition based target. Richard Tse Okay. And then when it comes to the software services portfolio, is it essentially complete? And perhaps you can give us the color on what you may be missing when it does come to M&A? John Chen Yes, it is complete. I can't really tell you about -- it is very, very complete. And I'm comfortable with it, I could run with it right now, we're going to generate the growth, and the customers are responding well. And I'm sure that you guys do channel checks. A lot of all the names that you folks all represent are customers of hours. And you could probably call your IT department and ask the question. So if they say no by the way, please call me or email me. And then I'll make sure that I get my rep to go in there. But it's extremely complete. And there are areas that I could add on to, is probably more of a newer area in the market. And I'll just leave it at that because once I tell you that it would jack up my price. These are smaller companies. Richard Tse All right thank you. John Chen Sure. Operator Thank you. Our next question comes from Ben Bollin of Cleveland Research. Your line is now open. John Chen Hi Ben. James Yersh Good morning, Ben. Ben Bollin Good morning, everyone. Thanks for taking my question. The first one, I wanted to talk a little bit going back to this Mobility Solutions profitability. Sorry, that to belabor [ph] that, John, but when you talk lessening the operating loss in that segment into the next several quarters, how much of that is incremental cost reductions or plans that are already in place versus revenue drivers that can get that business to scale. How do you get there. And then a follow up question for James related to the new reporting structure, thanks. John Chen Yes. For the next couple of quarters, I'm very focused on efficiency. Where meaning that our cost base, we've done already a number of things to cut down our cost base both on the operating expense side, as well as the gross margin side or costs of goods sold. Some of the stuff we're going to get some benefits from the IP stuff reduction that James has referred to. And some of them are steps already taken that will reduce our cost -- pretty much the cost support in that business. So I think we're getting to a pretty lean and mean position. And then maybe I should say that, and quite efficient. So again a lot of them in the future depends on us going our software licensing revenue, device software licensing revenue as well as some growth from the revenue growth on the new product that's come in. And that will pick our financial model or our business model quite efficient. Ben Bollin Okay, thank you. And James, when we look at the new reconciliation to the new structure. Are you're going to provide any backward look into that, where that's been, maybe in the past 12 months? And if not, could you give us an idea on how that corporate unallocated amount has trended over the last several quarters? James Yersh Sure. In terms of the comparative spend, like I said we'll just do it down to margin for at least this quarter. Part of the reason is we haven unnecessarily tracked these costs, the way that we're presenting them for the comparable periods last year. So during the year, we did move to that. So I think you will see us as we get into the back half of the fiscal year, we might be able to provide some comparatives. But for the most part, you can imagine that a big part of our efficiency in taking the cost base down has been focused on these things. So that the trend definitely overtime over last couple of years I would say has definitely been down here. Ben Bollin Thank you. Operator Thank you. And our next question comes from Simona Jankowski of Goldman Sachs. Your line is now open. John Chen Hi, Simona. Douglas Clark Hi, this is actually Doug Clark on behalf of Simona. A few questions, I guess the first one on the SAF revenues. You mentioned it was impacted by FX and one-time items. But on the go forward guide it looks like you're looking for another 20% sequential decline. I believe that's a bit above what we've been seeing. So it does seem like we've taken a bit of a step function lower wondering if you can address that. And then on OpEx in general I understand looking at continuing to take out cost efficiencies in the Mobility Services segment on a corporate average basis. Should OpEx stabilize from here or are there additional areas for cost savings? James Yersh So on the SAF piece, Doug you are absolutely right. We had a few factors impacting, the one you didn't mention was just the timing of recognition for certain customers. I think we've been through this before where we either recognize when we invoice or when that customer actually pays us. So invoicing is of course something that we can control and is based on time, the timing of payments kind of slides in one quarter versus another. So that had -- was one of the reasons that I mentioned that you didn't. In terms of managing this like we've said many times that we will give you an idea what we think it's going to do going forward. Ultimately we have confidence that the 20% in terms of our model based on the trends. So we'll continue to update as we get more clarity in that on a quarterly basis. The second part of your question in terms of corporate expenses are you talking about just the unallocated piece or just OpEx overall? Douglas Clark OpEx overall. James Yersh OpEx overall somewhere modest increase from the levels of where we are now to continue to support that growth, I think would be the right way to think about it. Douglas Clark Okay. That's really helpful and then if I can squeeze in one additional one on the Mobility Solutions side again. You mentioned new manufacturing agreements to kind of help lower inventory levels. I'm wondering how these are different from what the company had put in place with Foxconn a year or so ago. John Chen A little bit more efficient then Foxconn. The Foxconn model was actually were quite good and it's really based on the Foxconn model. So a little more efficient than the Foxconn model and that's pretty much it. I mean we have about three different ODM, or original design manufacturers that work with us and now two of the three is gone to a model that is more related to the more like the Foxconn model. Douglas Clark Okay, great. Thanks very much. Operator Thank you. Our next question comes from Michael Kim from Imperial Capital. Your line is now open. Michael Kim Hi, good morning guys. Could you talk a little bit more about the re-launch of the enterprise partner programs and some of the early progress I think you mentioned a number of new channel partners signed and any color on your registrations and expansion the channel fields? Thanks. John Chen Okay, so it's great. One of the big item for me was to make our go-to-market a lot more efficient. I think I mentioned about two quarters ago, and this is one of those tangible thing that we could point to. We look at our pricing model the margin strategy with the channel partners and the view from the partner themselves. The marketing program supporting them on a around the world -- and more of a global footprint. So we don't really concentrate just on a few places. So those are all aspects of it, and so there are lots of views [ph] help that, maybe I shouldn't probably use that word. And the new group of people focusing on it and which we increase the headcount to, and a leader that we recruited, actually we recruit from Cisco. So those are all very positive things. We will have more energy to it, and as I pointed out we have 107 new partners in the quarter, that number will continue to grow. We don't want to give you a number that we expected, but you would expect that year-over-year growth we expect pretty high numbers. Michael Kim Great, and then just on the Software and Service segment as the recurring component's gotten pretty sizeable proportion. Any color around recurring billings and how that's trended over the last couple of quarters? John Chen Pretty steady, I would say in the quarter. Pretty much as we expected, always could be better obviously. But it's pretty steady. Michael Kim Okay, great. Thank you very much. John Chen Sure. Operator Thank you. Our next question comes from Deepak Kaushal of GMP Securities. Your line is now open. Deepak Kaushal Hi, guys. Hi, can you hear me? John Chen Yes. Deepak Kaushal Thanks for taking my question. Most of them have been asked. But I'll try and dig a little bit more on the Mobility and Solutions business. Following on the answers, with respect to change with the OEM partners, when I look at the business you are targeting to be profitable, how do you avoid inventory write downs in the future on your new hardware products? Like the ones that you are seeing now and then just to follow on the software side, my understanding correctly that another Samsung or an HTC can license your hub. And then have effectively the same security as a BlackBerry device. Is that correct in the assumption and then the only differentiation then being the keyboard? John Chen Well, so let me go to that one first. The hub are the way that we managed messaging, email, different email account system. So it's not a security-based thing. However, yes the answer to your question is yes, more than happy to license it to Samsung and HTC, but not the security side. The security side, our component mobile and software, and if they want to license it we haven't really crossed that bridge on whether we will or not. I think there is always a deal somewhere to be found. But we haven't really put that on the list. The other thing about security you need to understand about our devices, there are a lot of hardware based security built into the routing, into the chips and so forth. So it's a little bit more than just using my security software and somehow be mysteriously become the same level of the BlackBerry Security. So it's a combination of both hardware software as well as the server. The customer uses our server to manage all device, and the combination of that are the most secure situation. So and as far as the inventory part of the equation is concerned it's really to the limitation of what -- when is the liability start at BlackBerry and when is the liability start at the ODM side. So we negotiate that window to be quite favorable let's say. James Yersh And Deepak, it's James. If I take what John said and put a fine point on it, one of the key things is how far in advance you need to place orders. In my prepared remarks, I talked about really shortening that lead time. So you have a lot more certainty on demand if you will as that window become shorter. And as John said, if you're partnering with somebody and they're doing a lot of the heavy lifting on engineering, conceptually they would use rework and be able to reuse those parts for others if BlackBerry didn't place the device. So the more common we are the more flexibility we have to take that -- to allow them to take on that liability earlier. Deepak Kaushal Okay. So are you effectively getting to a point where you will only build the hardware devices when you have an order from an enterprise or from a carrier? John Chen They can't do it at -- see the order and do that yet. But it's -- within a small number of weeks window. Deepak Kaushal Okay, okay, that's helpful color as far as my questions went, very clear and detailed. John Chen Okay. And we probably have to cut off and two more -- and let's take the last two because I have a 9 o'clock office [ph]. Operator And our next question comes from Paul Treiber of RBC Capital Markets. Your line is now open. Paul Treiber Hi, thanks very much. Just hoping, could you speak to what you've been seeing in terms of enterprise qualification of the PRIV? And then how do you anticipate that qualification of future Android devices, would that happen at a faster pace because of the PRIV? John Chen Well, the PRIV is really a great engineering product. And it's done well for people who bought it. But it's too expensive for enterprise. And so we're little bit on the higher -- too much of a higher end. So this is why the enterprise have been asking as well as the carrier who represent the enterprise, when they -- and the B2B group has been asking for a more of a mid-range. They like everything BlackBerry represents in terms of security and the ability to run our software with the Android operating systems. But unfortunately the PRIV itself, only kind of are being affordable by the executive or the higher entity of the organization. So this is why, that is why I believe that we should really build or get to produce a mid-range product with our level of security and the software. Paul Treiber So in terms of the IT department though, certifying the device in future Android devices, because the PRIV is already in the market, should that help accelerate? John Chen Yes, it does. Sorry I didn't catch the essence of your questions earlier. It does, because they are now already well aware and have been able to test the BlackBerry Android implementation. Paul Treiber Okay. Just focusing on deferred revenue decline quarter-over-quarter, did you speak to some of the moving parts, and particularly in regards to how the new software business flows to deferred revenues? James Yersh Well, there is other elements in there Paul, first of all than just the software piece, because we do recognize hardware for example on sell-through basis which would impact that. We talked about the uptick in recurring revenue quarter-over-quarter from 70% to 74%. So obviously we are heading in the right direction there. But ultimately it's not just the software story, software for recurring revenues as I said is going the right way there. Paul Treiber Okay. Thanks very much. I'll pass the line. John Chen Absolutely. Operator Thank you and our final question will come from Anil Doradla of William Blair. Your line is now open. Anil Doradla Hi, guys. Thanks for squeezing me in. John, couple of questions. So if you were to discontinue your hardware business say tomorrow, how much of the revenues in your software will be impacted? John Chen You are talking about the software stuff that sits on EMM? Anil Doradla Yes and all those six segments that you talked about. John Chen I would say some, but very little. Anil Doradla Okay, and you have been selling patents. Over the years BlackBerry has accumulated tons of these. So where would you say -- what innings are you in terms of the total sale of your patents, is there still a long way to go or you somewhere in the middle of it in terms of their sale? John Chen First of all inning we are still in the -- if you want to go in inning we are probably in the first inning and I'm not really interested in just selling my patent. I'm interested in licensing our patent. If we want to sell our patent then we could get a very events innings in a very short time. Many people have wanted to buy the patents. But I'm not really in a patent selling mode, I'm in a patent licensing mode. Anil Doradla So from a licensing point of view you feel that you are still in the initial innings. John Chen Absolutely. Anil Doradla Very good. Thank you very much. John Chen Absolutely. Thank you. All right. Let me provide some closing comments. The only thing I have actually in closing thank you all by the way for the strong interest. I'm sorry we don't have more time, we could take questions I know there is some pending questions coming and I'm sure you could contact us, to James and myself if you need to. So before I close the call here I would like to give you a pitch on one of our upcoming event is our Annual Security Summit planned to be on July 19 in New York City. We'll highlight the unique value proposition of our end-to-end platform and all the software technology we talk about that you heard. This will involve feeling how we help enterprise mobilize the infrastructure to accomplish more everything in the most secure manner. It will also be a great opportunity to hear directly from our customers and strategic partners that they will be coming and supporting us. I promise that we are very informative and although it's the same by the way it's the same week of the Republican National Convention in Cleveland. So it probably a good place to go to instead of Cleveland. I look forward to see many of you there in person. Thank you for joining the call today. See you next time. Operator Ladies and gentlemen, thank you for your participation on today's conference. This concludes your program. You may now disconnect. Everyone have a great day. Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. 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Barbecue on July 4th is as American as apple pie. To make sure your barbecue is the best on the block, here are a few tips from Melissa Cookston, co-owner of Memphis Barbecue Company in Horn Lake, Miss. Cookston, a familiar face on TLC's reality show "BBQ Pitmasters," is a three-time World Champion BBQ Pitmaster and the only female to have won the prestigious Memphis in May (MIM) World Championship BBQ Cooking Contest. Cookston took a few minutes out of her busy schedule to give us her secrets to making the perfect, mouth-watering ribs--and what rookie mistakes to avoid. “We’re going to show you exactly what we do to our ribs for competition to make your ribs world champion ribs too,” Cookston begins. First, you want to remove the membrane that is on the back of the ribs. “You can’t chew through that. So we want to remove that, so that all of our flavors can get in the back of the rib as well as the top of the rib, and it’ll make it much more tender. You just slide your fingers underneath the membrane, pull up, and bam it’s gone.” After that, liberally coat both sides of your ribs with rub, and be sure to rub it all in so the meat gets lots of good flavor. Then spread on a coat of secret ingredient #1, mustard. “The mustard acts as a sealant on top of the rub, which will help force that rub down into the pores; as well as it contains Vinegar, so it will help these ribs tenderize,” she explains. “You will never taste the mustard in these ribs, I promise.” Now your ribs are ready for the smoker at 225 degrees for two hours. “After two hours, these ribs will be a nice, red color and they almost look like they’re done. But guess what? They’re still tough. So what I’m going to do, is I’m going to wrap this up in some foil,” she says. Wrapping your ribs in foil will help them tenderize and keep them from over-smoking. Before you wrap them up, shake some more rub on both sides and cover it with another thin layer of mustard. Then comes secret ingredient #2, apple juice. Add a cup or two of apple juice to your foil-wrapped ribs to ensure your ribs are cooking with moist heat and not a dry-heat. The juice will also keep your ribs tender, and add a little bit of sweetness. Make sure the ribs are wrapped tightly, and put them back in the smoker for another two hours. When your ribs are done cooking is when you add your barbecue sauce, not earlier. “BBQ sauces all contain some sort of sugars which will caramelize and actually burn through the cooking process, so you only want to put the sauce on at the very end of the cooking process,” Cookston says. After you’ve sauced your ribs you’ll add the final touch of Cookston’s last secret ingredient, honey. “It’ll give your ribs a great shine, and it’ll give them just that sweet taste, which is really good if you like sweet BBQ.” Plus, “If it looks good, it taste good. So shiny ribs are better than dull ribs.” Put your ribs back in the smoker for 10-15 minutes to let the barbecue sauce soak in, and then your ribs are ready to enjoy. Garrett Tenney is a correspondent for Fox News Channel (FNC). He joined FNC in April 2013 and is based in the DC bureau.

Pope John Paul II (search) appealed Sunday for the release of hostages in Iraq, calling on the kidnappers to show "humanity." John Paul said he was following events in the Holy Land and Iraq (search) with great sadness. "I am particularly close in thought and prayer to the families of all those who fear for the fate of their loved ones, especially all those who have been taken hostage," the pontiff said. "I invite the kidnappers to have feelings of humanity," the pope said in his weekly appearance from his studio window overlooking St. Peter's Square (search) . "I entreat them to give back to the families the persons who are in their hands, while I pray to merciful God for the populations of the Holy Land and Iraq and for all those in that region who work for reconciliation and peace," the pope said. One of four Italians taken hostage was killed earlier in the week, and the men's families have implored the kidnappers to release the others. Fifteen foreigners are missing in a spate of abductions that erupted alongside some of the worst violence in the country since the U.S.-led invasion. They include two Americans who have been confirmed kidnapped.

The U.S. Army will soon replace its digital, Universal Camouflage Pattern, but soldiers may still be wearing the service's Afghanistan pattern for many years into the future. The Army's recent decision to authorize the 75th Ranger Regiment to wear MultiCam in garrison has triggered questions about the pattern's future as the service prepares to transition to its new Operational Camouflage Pattern in 2015. The new OCP is very similar to MultiCam, a pattern made by Crye Precision that the Army adopted for use in Afghanistan in 2010. It's similar to MultiCam because Crye developed the pattern with the Army for its Objective Force Warrior program in 2002. He later made small adjustments to the pattern for trademark purposes and called it MultiCam. The unique blend of greens, browns and tans has been a favorite of Special Operations Command for almost a decade. MulitCam has also proven extremely effective in several Army studies. Army leaders are considering whether to allow soldiers to wear MultiCam alongside the new OCP, but no decision has been announced, according to Army officials. Never before has the Army introduced a new camouflage pattern that is so close to one that it has already issued to soldiers in great quantities. So far, the Army has spent between about $3 billion on uniforms and individual equipment printed in MultiCam since its adoption four years ago, according to a source familiar with the issue. From a practical standpoint, the source said, both patterns are so similar that it would be very difficult to keep soldiers from wearing MultiCam uniforms and equipment such as packs, pouches and other essentials. Describing the two patterns has been confusing from the beginning since both go by the same acronym. The Army calls its new Operational Camouflage Pattern OCP. The service officially refers to MultiCam as the Operation Enduring Freedom Camouflage Pattern, but it has always been called OCP for short since its adoption in 2010. The Army considered replacing its ineffective Universal Camouflage Pattern with MultiCam after wrapping up its multi-year camouflage improvement effort last year. Army officials even tried to buy the rights to MultiCam, but negotiations broke down over cost. MultiCam was among the finalists of the Army's Phase IV camouflage testing effort. Other finalists included ADS, Inc., teamed with Hyperstealth, Inc.; Brookwood Companies, Inc.; and Kryptek, Inc. When the testing was complete, there was no definitive winner. None of the four patterns clearly outperformed one another through all the test environments. MultiCam, however, has been strong performer in camouflage testing over the years. The pattern emerged as the clear winner over several other patterns to issue to soldiers deploying to Afghanistan. Congressional pressure prompted the Army to launch its camouflage improvement effort in 2009. Pennsylvania's Democratic Rep. John Murtha, who was then chairman of the House Appropriations Subcommittee on Defense, pushed the service to look for a better camouflage pattern after receiving complaints from sergeants about the UCP's poor performance in the war zone. Some test community officials maintain that the 2004 adoption of the UCP was a mistake that could have been avoided, saving the Army billions of dollars on uniforms and matching equipment. Two separate studies performed by Army scientists from Natick Soldier Systems Center, Mass. -- one completed in 2009 and the other in 2006 -- showed that the UCP performed poorly in multiple environments when compared to other modern camouflage patterns. In both studies, MultiCam outperformed UCP. Critics of the Universal Camouflage Pattern maintain that the service has spent $5 billion on uniforms and equipment all printed in the inadequate UCP. The Government Accountability Office estimated that the Army will have to spend another $4 billion on uniforms and equipment over the next five years on its new camouflage effort. The Army plans to field its new camouflage pattern next summer, but the service will still need to navigate through an expected set of Congressional hurdles before the it can officially replace UCP. Last year, Congress mandated that services can no longer introduce new camouflage patterns unless they can be used by all four services. -- Matthew Cox can be reached at matthew.cox@monster.com

Google Now could be taking a new direction with the internet giant's purchase of Emu, a self-touted "built-in" virtual assistant. Founded in 2012 by alums from Siri, Apple, and Yahoo Messenger as well as Google, the app's functionality isn't far off from Google Now or other virtual assistant platforms on the market. Emu can share locations, manage reminders, schedule meetings, and more. The difference with Emu, as touted by its makers, is that this platform relies on artificial intelligence, or machine learning and natural language processing, to perform all of these tasks in real time as quickly as one can share a photo via text. The learning aspect is key for Google, being that this could give Google Now much more context at an even faster rate across multiple mobile platforms. The mobile messenger originally launched for Android but eventually expanded to iPhone. The Emu team confirmed the merger in a blog post on Wednesday. The Palo Alto, Calif.-based crew added with an apologetic tone that the Emu app as it currently exists will be shut down, effective August 25. After that date, users will not be able to use the app to send, receive, or download messages — nor will Emu be listed as a standalone app any longer. Financial terms of the deal have not been disclosed. For a closer look at Emu, check out the promo clip below:

Insanity seems to have gripped tablet makers, with the latest batch of 'Honeycomb' Android tablets being prices at an eye-watering +$1,000. It's rumored that Motorola XOOM will retail for a staggering $1,199, while LG is pricing the Optimus tablet in Europe at €999 ($1,350 inc sales tax of 20%, making the tablet a shade over $1,000). Ummm, it's too late for the late-comers to the tablet market to start trying to redefine price. Sure, these devices feature a dual-core processor, but the PC market proved that consumers didn't care about cores or megahertz/gigahertz. Consumers focused to an array of price points. Apple defined the tablet market within the $499 to $829 price band, and trying to go outside of this envelope (even with better hardware than a year-old iPad) is suicide for a device. In fact, this enthusiasm with stratospheric price tags could be suicide for the budding Android tablet market. Motorola and LG had their chance (like everyone else) to define the tablet market and set price points, but it failed to take advantage of the opportunity, leaving the market wide open for Apple define it. So, Motorola and LG, good luck with those tablets ... you'll need it!

Apple is planning to use synthetic sapphire for the screens of higher-end iPhone models, as well the display for its yet-to-be-released smartwatch, the Wall Street Journal reports. According to the publication, Apple is "considering" using sapphire screens for "more expensive models" of two new larger display iPhones and its long-rumoured iWatch. The idea behind using synthetic sapphire is to create a screen more resistant to both cracking and scratches,. Taking sapphire to iPhone and iWatch screens will extend the material's use beyond its current function on Apple devices of shielding the iPhone 5S' Touch ID home button. Rumours of Apple's plans to use the material more widely have been circulating for the past year due to its tighter relationship with component supplier GT Advanced Technologies. Apple has reportedly acquired enough crystal furnaces to make up to 200 million five-inch displays. According to the WSJ report, the first of the sapphire screens developed by the pair will begin rolling out of Apple's new manufacturing facility in Mesa, Arizona this month. It's thought Apple will take the wraps off a 5.5-inch display iPhone, expected to be called the iPhone 6, as well as a 4.7-inch display device this September. However, according to the report, the plan to use sapphire in the displays on phones hinges on Apple's ability to get to enough of the material to meet production demands. And given those constraints, the material may be reserved for more expensive iPhones. As others have noted, if the report is correct, it could spell a pretty radical pricing strategy overhaul for Apple's key product. The company has historically set price points based on storage capacity, and offered multiple generations of devices at different prices, but hasn't charged a premium for different materials on the same model. Analysts quoted in the report believe that sapphire screens would introduce a new risk for the company. On the one hand, the tougher material could mean fewer shattered screens that need replacing. On the other, shortages of the material could throw a spanner in the works of Apple's distribution schedule, creating shortages during peak demand. Whether Apple ultimately does offer a premium-priced line of its new phones will all be revealed next month: the latest iPhone is expected to be released on 9 September . Read more on the iPhone 6

Politics and the tragic events in Colorado, and now Wisconsin, have overshadowed news this summer that should be of paramount concern to our leaders in Washington. It concerns the war being waged against the United States and Israel since the ayatollahs seized power in Iran and the chants of “Death to America” that have emanated from Tehran for decades. According to Reuters, NYPD intelligence analysts have determined that the Islamic Republic of Iran and its terrorist proxies were behind nine plots targeting Israelis and Jews outside of Israel just in this year alone. Of course, less than a year ago US officials determined the Iranian Revolutionary Guard Corps’ elite and clandestine Qods Force was behind a plot targeting foreign officials and facilities in Washington, DC. It is the Qods Force that manages plots of concern to the NYPD. For those unfamiliar with this entity, the Qods (Arabic for Jerusalem) Force is a special operations division nominally within the command of the Revolutionary Guard. It was literally created with a mandate from the government of Iran to fund, train, equip, even create Islamic terrorist groups capable of helping Tehran achieve a central goal as part of the regime’s agenda: to undermine the US, Israel, and our allies — by force. On behalf of Iran’s all powerful unelected officials like Supreme Leader Ayatollah Khamenei, it is the Qods Force that today manages relations between the Islamic Republic and the world’s deadliest militant Islamists, including Hezbollah, Hamas, lethal factions of the Afghan Taliban, and Al Qaeda. In the post-9/11 era, for most Americans the unchecked existence of an official state entity that sponsors terrorism much in the same way that USAID promotes economic development, confounds our sense of Washington’s priorities. What is perhaps hardest for members of our society to grasp is that for Iran terrorism became a key instrument of foreign policy the moment the ayatollahs came into power. And according to some terrorism experts, it is because of Washington’s inaction in the face of Iran-backed attacks like the 1983 bombing that killed 241 US servicemen in Beirut, the 1996 attack on the Khobar Towers in Saudi Arabia that killed 19 more American soldiers, the regime’s permissiveness regarding the presence of Al Qaeda leaders hidden within its borders, and its provision of training and weapons to insurgent groups that have killed scores of Americans in Iraq and Afghanistan since 9/11, that this regime continues to use of terrorism to advance its agenda. Why do most Americans find these things difficult to believe? Because our leaders have refused to acknowledge that Iran has been at war with the “Great Satan” (i.e. America) and the “Little Satan” (Israel) since the Revolution came to power. Put simply, America’s presidents and too many of their advisers have discounted the threats posed by the Islamic Republic of Iran. At first, they preferred instead to focus on threats like those posed by the Soviet Union. Then, following the 9/11 attacks on our homeland, decision makers in Washington emphasized the importance of dismantling Al Qaeda's global network — and they clearly overlooked that Al Qaeda might have foundered following 9/11 were it not for Iran’s support, or that it might not have even been able to pull off the 9/11 attacks without help from Iran. Certainly, the pursuit of Saddam's ouster following 9/11 was also a great distraction from the possibly bigger problems to be caused by the ayatollahs in neighboring Iran, who did not hesitate to fuel a civil war in Iraq, or to send into Iraq some of the most lethal equipment used to kill American soldiers there. Perhaps, in the case of our current president, the can is being kicked because the killing of Al Qaeda leaders just polls better than clenching a fist at Tehran. So why do our leaders prefer to kick the can down the road on this issue? In Beltway speak: Because this is such a “complex” phenomenon. Translation: Most analysts agree that nothing short of regime change will curtail Iran’s sponsorship of terrorists who target Americans and our allies globally. And, politically, that’s not a simple proposition. A stated objective in Iran is “spreading the Revolution,” a task that’s been delegated to the Revolutionary Guard and its Qods Force. To “spread the Revolution” is to destroy America and Israel. Is it prudent to discount Iran’s ability to accomplish this terrible goal? Well, sure. But policymakers in Washington continue to discount not just Iran's abilities, but also its Supreme Leaders’ stated objectives — and therein lies the danger. If a regime like the one led by the ayatollahs in Iran says it’s at war with you, you should expect trouble. And without a comprehensive strategy focused on containing the Qods Force, and disrupting this regime’s relations with the world’s deadliest terrorists, America should continue to expect trouble. The Islamic Republic of Iran today appears within arm’s reach of nuclear weapons. At the same time it is at our peril that Congress and the White House refuse to make it a priority to pass legislation like the bipartisan bill introduced this year titled the Countering Iran in the Western Hemisphere Act. That bill would at least make countering the presence of the Qods Force and Iran’s terrorist proxies in our own backyard an official feature of US foreign policy. Iran’s increasingly aggressive posture is something America can no longer afford to ignore. As the NYPD’s recent report on this issue indicates if Washington continues to kick this can down the road, it may soon blow up in all of our faces. Michael S. Smith II is a principal and co-founder of Kronos Advisory, counter-terrorism adviser to members of the United States Congress, and a senior analyst with Wikistrat Ltd. Follow him on Twitter@MichaelSSmithII.

Authorities arrested an 18-year-old southern Illinois man who they allege had communicated with an unspecified terrorist group about a plan to an attack on at least one area location. Keaun L. Cook, of Godfrey, was arrested Wednesday on preliminary charges of providing material support for terrorism and making a terrorist threat. He was being held at the Madison County jail on $150,000 bond and didn't have a lawyer as of Friday morning. At a news conference Thursday, Madison County's state's attorney, Tom Gibbons, described Cook as a dangerous man who had deliberate plan to cause a "mass casualty event" at one or more locations in the county. He declined to specify which terrorist group Cook had allegedly been in contact with, but said they weren't local. He also wouldn't give the locations of any planned attacks, but said police departments and individuals at those locations were notified after authorities first learned of the threat. County Sheriff John Lakin said authorities learned of the threat Aug. 24 when deputies did a welfare check at the home of Cook's grandmother, who has looked after him since his mother died unexpectedly of an illness in 2011. Gibbons said someone then reported the verbal threats. Although investigators found no dangerous materials or firearms in the home, Lakin said he thinks there was a "strong possibility he could have carried it out alone." "I'm very proud to stand here today and say that we stopped an event that could have caused a very, very, very serious situation," Lakin said. Cook's grandmother, Debra Thomas, hand-delivered two letters to The (Alton) Telegraph (http://bit.ly/2c7oq93 ) on Thursday. In them, she wrote that her grandson struggles with paranoid schizophrenia and that he had spent more than 300 days in isolated confinement at a county detention center, during which his condition went untreated. She wrote that after he got out and returned home, she couldn't force him to take his medication because he is 18 and an adult. She said she called the police, "not because that I felt a threat but because I knew that was the only way that I could get Keaun treatment." "When he's on his medicine he is the sweetest person you know, when off like Dr. Jekyll and Mr. Hyde," Thomas wrote, noting that she never would have involved the police if she thought it would have landed her grandson in jail. Thomas didn't immediately respond to a phone message from The Associated Press seeking comment. Gibbons' office said further details about the alleged plot wouldn't be released yet because the investigation is ongoing. Cook has no previous felony convictions in Madison County. He did have one 2011 misdemeanor conviction for damage to property for using a rock to scratch a pickup truck. Cook has no charges in St. Clair County or in nearby Missouri.

Crews are working around the clock to remove the nearly half million gallons of fuel from the grounded cruise liner Costa Concordia. The Concordia Emergency Commissioner's Office and Costa Crociere released a statement saying over 250,000 gallons of fuel had been pumped out of four tanks located toward the front of the ship since the mission began on Sunday. Rough seas off Italy's coast had initially delayed in the start of the operation, which was scheduled for late January. There are still nearly 400,000 gallons of fuel remaining in 13 of the ship's tanks. In the statement, Neri/Smit Salvage experts speculate that if conditions permit the operation to continue around the clock, it should be completed within three weeks. "Since the outset, Costa Crociere's priorities have been to guarantee maximum safety, the least possible environmental impact and protection of the environment of Giglio and the island's tourism industry, while carrying out defueling within a reasonable time frame," officials said. The cruise liner had more than 4,000 passengers and crew on board when it hit reef and keeled over on Jan. 13, killing 32 of those passengers.

A Kurdish militant group on Friday claimed responsibility for a car-bomb attack in Istanbul this week that killed 11 people, saying it was just the beginning of a war. In a statement posted online, the Kurdistan Freedom Falcons also warned tourists that Turkey was no longer secure for them. "You are not our targets but Turkey is no longer safe for you," it read. "We have just started the war." The Kurdistan Freedom Falcons is considered an offshoot of the Kurdistan Workers' Party, or PKK, and has carried out several attacks in the past. It denounced the ruling Justice and Development Party, which was founded by President Recep Tayyip Erdogan, for its "wild war" against Kurds. Turkey's southeast plunged into violence last summer when a 2½-year fragile truce between the state and Kurdish rebels collapsed. The rush hour car-bomb attack on Tuesday morning targeted a police vehicle in Istanbul and injured 36 people in addition to those killed. Istanbul's bombing was followed on Wednesday by a suicide attack in the southeastern town of Midyat that killed three police officers and three civilians. On Thursday, The PKK said the Midyat attack was carried out by one of its "comrades," code name Dirok Amed. The authorities were quick to report they suspected Kurdish militants in both cases. The claims of responsibility confirmed those suspicions. The Kurdistan Freedom Falcons, also known as TAK, was also behind two deadly suicide bombings this year in Ankara, the capital. The PKK routinely attacks military and police targets in the southeast, where large-scale security operations to flush out Kurdish rebels have left hundreds dead, displaced entire communities and done extensive damage to urban infrastructure. The PKK, labeled a terror organization by Turkey and its allies, is fighting for autonomy for Turkey's Kurds in the southeast. The decades-long conflict has claimed 40,000 lives. In the past year, Turkey has been hit by a series of bombings — including two in Istanbul targeting tourists — which the authorities have blamed on the Islamic State group. The attacks have increased in scale and frequency, scaring off tourists and hurting the economy, which relies heavily on tourism revenues. In a bid to curb such attacks, the government is mulling measures to keep tabs on the sale of materials made to use improvised explosive devices, such as gas canisters commonly used for cooking, officials said Friday. The announcement came a day after the agriculture minister said the government has temporarily suspended the sale of fertilizers containing nitrate that can be used to make explosives.

JOHNSTON, Iowa — Ted Cruz offered an impassioned defense of gun rights in the wake of the San Bernardino terrorist attack on Friday, telling a crowd at an Iowa gun range, "you don't stop bad guys by taking away our guns, you stop bad guys by using our guns." Cruz criticized the media for focusing on gun control in the wake of the shootings, telling his supporters: "Folks in the media ask on behalf of Democrats, 'isn't it insensitive to do a Second Amendment rally after the shooting.' I really don't view our job as being sensitive to Islamic terrorists." Play Facebook Twitter Google Plus Embed GOP Candidates Unanimously Oppose Gun Control After San Bernardino 2:06 autoplay autoplay Copy this code to your website or blog Cruz also linked California's gun laws to the location of the attack, suggesting strict restrictions prevented Americans from defending themselves against terrorists. He pointed to Tennessee, where he said armed Marines would greet any terrorists attacking recruiting stations — a reference to those who stood outside a recruiting station with guns after an attack. "You know California has among the strictest gun control laws in the country. The Brady Center gives five states an A- for being the very toughest in taking away the constitutional rights of its citizens," Cruz said. "And yet what do all the Democrats say? 'These great gun control laws — we need more of them.'" The event, during which Cruz unveiled a coalition of Second Amendment supporters, had been scheduled before Wednesday's attack, and Cruz aides say protecting gun owners' rights is even more important in the wake of the shooting than it had been before. Cruz takes aim at a pheasant with his shotgun during the Col. Bud Day Pheasant Hunt hosted by Congressman Steve King outside of Akron, Iowa on Oct. 31. MARK KAUZLARICH / Reuters "The Second Amendment is about something very fundamental," Cruz said. "It's about the God-given right of every single one of us to protect our home, our families and our lives." Cruz went on to question the how intelligence gathering by the federal government failed to stop the shooters in San Bernardino. "Let me ask a question. Why on earth did the Obama administration not know about this ahead of time and stop this before they carried out this terror attack?" Cruz asked. Earlier he called the administration "utterly ineffective at targeting the bad guys." Asked by reporters prior to the event what specific actions he would take to avoid other American citizens from replicating the attack, Cruz focused on the U.S. mission overseas. "The specifics are targeting radical Islamic terrorism across the globe. Let's begin with ISIS," he said. "An attack like this is directly connected to ISIS." Keith Leslie, 53, a Cruz supporter who drove a few blocks down the road to the range, described the senator as "fired up" at the event in front of about 100 people. "I think people are waking up that we're in danger, and there's a lot of those people who are here that mean to do us harm," Leslie said. "And we need to have someone who is going to stand up to them and let people stand on their own and not be a sitting duck in a shooting gallery." "We can't allow people to use this tragedy as an excuse to take away law abiding citizens' right to defend themselves, and that's what Democrats are trying to do," Cruz spokesman Rick Tyler said Friday ahead of the event. Tyler also said California's gun laws — some of the toughest in the nation — made the state an easy target for terror. "Of course they would pick a place that people are unarmed and can't defend themselves," Tyler said. "This is a terrorist attack, and when people are unarmed, they are sitting ducks. I'm not predicting that it would have come out if people were armed, but at least someone might have had a chance." San Bernardino County, where the shooting occurred, does issue concealed carry weapons permits to residents who pass a screening process. Cruz himself labeled the shooting a terrorist attack in a speech Thursday at the Republican Jewish Coalition meeting in Washington. "This is yet another manifestation of terrorism, radical Islamic terrorism here at home," he said. At Friday's event, Cruz announced the campaign has signed up more than 24,000 gun rights supporters nationwide, about 1,000 of whom are from early primary states, Tyler said. The coalition will be co-chaired by the head of Gun Owners for America, a pro-gun group that's sometimes pressed for fewer gun restrictions than even the National Rifle Association might have been willing to accept.

Play Facebook Twitter Google Plus Embed Patriots attendant under scrutiny in Deflate-Gate 2:47 autoplay autoplay Copy this code to your website or blog The public has weighed in on Deflate-Gate: A plurality of Americans think the Patriots cheated. A survey by Public Policy Polling found that 41 percent of Americans think the Patriots cheated by underinflating footballs for the AFC championship game — compared with 27 who think they did not. Among self-described NFL fans, the spread was bigger — 50 percent labeled the team cheaters, compared with 28 percent who went the other way. Republicans were closely split, while Democrats came down 2-to-1 for cheating. The polling company also found that Americans are rooting for the Seahawks in Super Bowl XLIX, 36 percent to 29 percent. And even if they did cheat, the Patriots still come in behind the Dallas Cowboys for the title of most hated team. The poll surveyed 612 registered voters Thursday through Sunday. It had a margin of sampling error of plus or minus 4 percentage points. IN-DEPTH SOCIAL Overall our findings about the Pats basically come down to this- Americans don't like them, but they already didn't: http://t.co/teS1iseXTS — PublicPolicyPolling (@ppppolls) January 27, 2015 — Erin McClam

Yesterday, the media was abuzz with news of a great victory for gay rights in this country. Just 24 hours previous, they were predicting the racial voting rights apocalypse in response to another decision. It is important to note what did NOT happen in the same sex marriage cases. Justice Scalia’s rather lengthy dissent pretty much summarizes some of the bizarre inconsistencies in the majority opinion of Kennedy. Unlike some posters at this site, I am not of the opinion that Kennedy was a “Reagan mistake” or the like. He is considered, by most, the swing vote on the Court and from everything I have read and heard, relishes that role. That is why we will not see a Kennedy retirement any time soon. That being said, he does sometimes narrowly read the law which inevitably steers him in the direction where he ultimately arrives. Which is why Scalia’s scathing dissent makes all the more sense. Windsor, the petitioner in this state, won her case in the lower courts plain and simple. The only thing that kept this case “alive” was the Obama administration’s decision not to support the constitutionality of DOMA, but to continue to enforce it. Hence, although Ms. Windsor was entitled to some $300,000 plus interest, the government refused to refund the money. There was another option for Windsor- go back to court and have that court issue an order to pay her. If the government still refused, then they would have to defend the underlying law which they asserted was the reason not to pay her- DOMA. So from the beginning, this is nothing but a contrived case. If the courts find a law to be unconstitutional, the Executive branch has two options- defend it or change it. Looking at the number of cases where the United States is a party or one of its Executive branch agencies, one clearly sees that they have no objections to defending laws. Obama administration of existing immigration laws, for example, are regularly defended although there is public disagreement with these laws. In this case, the Obama administration chose neither option. As Scalia properly notes, the legislative fix should always be the preferred method and cited the recently passed Repeal of Don’t Ask, Don’t Tell as but one example. There, the elected officials of this country fixed what they felt to be an unfair policy or law. Sure, there was debate and heated rhetoric on both sides, but that is the by-product of the political process. There always was a good compromise solution to the DOMA question which would have bolstered the sovereignty of states rights. That solution would have been to simply, for federal purposes, recognize legitimate state marriage licenses regardless of that state’s definition of marriage. However, that would have undercut one of Scalia’s arguments in defense of DOMA. Throughout Kennedy’s opinion, there is the insinuation if not outright assertion that DOMA was passed in 1996 to basically denigrate gays. However, even an undisciplined and cursory reading of the history of DOMA in such banal locales as Wikipedia will show that it was in response to a case out of Hawaii. It is certainly true that the federal definition of “marriage” carries with it very real tangible, economic consequences, and for federal purposes DOMA sought to instill consistency knowing that same sex marriage, given the Hawaii decision, could become a greater reality. Kennedy, however, suggests there was some sinister motive, a very real animus against homosexuals based on outdated preconceptions. That is akin to saying that 85 senators, 342 Congressmen and President Clinton were out to legislatively bash gays, just as Ted Kennedy asserted in 1996. However, DOMA in no way, shape or form disallowed any state from allowing gay marriage. It merely stated that for federal purposes, marriage was defined as being between members of the opposite sex. That is it…period. But why would Congress decide on that definition and not just recognize any marriage as defined by the state in which the marriage license was issued? Besides consistency, history. It is an unmistakable fact that marriage- and one cannot think of too many gay marriages before 1990- between a man and woman had achieved a very legitimate purpose in society- the rearing of children. That is not to say that a same sex couple cannot raise an adoptive child in a loving and caring home, but they certainly cannot “beget” children. Also being a relatively recent societal development, the best one can say is that the jury is still out even in this area. There are studies which indicate that children from same sex couples are not “deviates” or the like and that at best that they are no better or worse than children from opposite sex parents. Even in studies from countries that have had gay marriage longer than the United States, the general conclusions are of the “needs more study” or “the jury is out” nature. Yet, there are innumerable studies indicating that children of opposite sex couples where there is a mother and father- the traditional set up from time immemorial- had advanced society as a whole. This not some grand social experiment. The bottom line is that concerns over same sex marriage in 1996, like now, were and are very real and not motivated by an anti-gay animus. Kennedy’s decision simply opens up the law to further litigation. Section 2 of DOMA was not at issue in this case. That is the part that allows a state to allow or disallow gay marriage. If a state approves gay marriage, another state that does not recognize same sex marriage is under no obligation to recognize that marriage for state benefit purposes. Here, an interesting legal conundrum occurs. As both the majority and dissenting opinions point out (and which Scalia chides the majority in classic Scalia terms), marriage qualifications have always been the province of the states. So what happens if a gay couple is married in New York, a state that approves gay marriage, and moves to Kansas, a state that defines marriage in the traditional sense? The Windsor decision allows federal benefits to follow that couple, but they would not be entitled to Kansas state benefits. Some may argue that the Privileges and Immunities Clause would be violated in this scenario. However, Congress has in the past and in other contexts carved out exceptions to that Clause and, by inference, that is exactly what DOMA does. For example, until recently Delaware recognized civil unions, but not gay marriage. However, unlike other states, they recognized civil unions and gay marriages performed in other states while neighboring New Jersey, which also has civil unions, does not recognize gay marriages performed in other states. DOMA gives states these options and that option is, in effect, the exception to the Privileges and Immunities Clause. In conclusion regarding the DOMA case, four points need to be made. First, there was no approval of gay marriage on a national basis as some media outlets are proclaiming. Second, in an effort to avoid making a broad proclamation, Kennedy’s decision is a little convoluted and certainly leaves this issue open to further litigation. And unfortunately, the standard now established for analyzing these cases will make it a little tougher for opponents of gay marriage to prevail, although not impossible. Third, the Windsor case was a strange one from the beginning in that it was one where the petitioner actually won, but an Obama administration legal sleight of hand brought this case before the Supreme Court. And finally, the language of Kennedy’s majority decision is inaccurate at some points and certainly ignorant of the history and motivation of DOMA. In the Proposition 8 case, Roberts’ decision was presaged in his dissent in the Windsor case. Before it was announced, most Court watchers realized where it was going to land. In a truly strange alignment of the Justices, they basically ruled that the lower courts erred in even taking the appeal because Perry, a proponent of Proposition 8, lacked standing in the first place. He stated that the Court never allowed such a suit in the past and they would not this time. In effect, they were relying on precedent on the standing issue rather than even reaching the merits of the case: whether a state can pass a law or state constitutional amendment through legislative or voter-initiated means banning gay marriage. Of course, the practical effect is to allow the lower court decisions to stand striking down Proposition 8. California will have same sex marriage soon. However, there are some problems with this decision also. As Scalia’s dissent in Windsor points out, there are other ways to address this issue rather than running to the courts and taking a case to the Supreme Court. Here, the lower District Court’s decision is based on an extensive trial record where both sides forcefully and fully argued their sides. In a previous article many moons ago, I was taken to task over my analysis of Judge Walker’s initial decision that sent this whole process into motion, as being well-reasoned and well-written although we may all disagree with the practical final result. Because they ruled that the proponents lacked standing- a question the California Supreme Court punted to the Ninth Circuit- the results of this decision are applicable only to California. What is disturbing about this decision in the larger sense is the practical effects of voter-initiated referendums going forward. The Court basically said that if the state government or its officials decided not to defend a duly passed law or referendum because they disagreed with it for whatever reason, then so be it. This turns a republican democracy on its head. Governors and state attorney generals, like their counterparts at the federal level, are expected to faithfully “execute” the laws of their states. Granted, with a change in administrations, the incoming one may disagree with certain laws or policies previously passed. But, that is what the political process is for and is clearly spelled out in constitutions- state and federal. In explicit terms, the Court stated that the decision does not address the question of whether states have the right to bar same sex marriage. Ironically, in their last conference of the term to be held today, there are two cases that address exactly that question- one from Nevada and one from Arizona. Whether they have the stomach to take one or both of these cases next term is another question altogether. But, the bigger point is that when a new administration disagrees with a previously passed law or state constitutional amendment, the usual preferred method is to legislatively change that law. Nothing, but nothing prevents voters in California from putting an initiative on the ballot to, in effect, overturn Proposition 8. If the political will is there, states can put the question before the voters, or consider it in their legislatures, every year if they so wish. For example, in my home state of New Jersey, the question of legalizing gay marriage has been presented to Governor Christie who vetoed the legislation. The New Jersey legislature could have over-ridden that veto, but they did not indicating that the political will for gay marriage is not sufficiently strong enough yet in a rather liberal state. Nor was it California when 53% of voters approved Proposition 8. Going forward, Roberts tends to presage future cases through his opinions. The most recent example was the Court’s decision in Northwest Austin in a previous term and the Shelby County case this term. In his Perry decision this term, he copied some of the exact federalism language that Kennedy used in his decision in the DOMA case. His almost verbatim copying of Kennedy’s remarks are telegraphing his future position using, ironically, Kennedy’s decision in Windsor as precedent as a justification for allowing states to define marriage as they see fit. There may be federal benefits arising from the issuance of a marriage license, but there is no federal marriage license. That is, as Kennedy and Roberts note, the exclusive province of the states. It would truly be ironic if Kennedy’s words which admittedly were a victory for gay rights activists come back to haunt him in the future. The bottom line is this: First, as far as federal benefits go, same sex couples will receive the same as opposite sex married couples. From those fiscal hawks out there, the cost to the government will be minimal from everything I have read. In fact, according to a 2004 CBO report, it would result in a net $100 million in revenue for the federal government mainly through savings in the Medicare, Medicaid, and Supplemental Security Income areas. However, that does not apply to state level benefits since Section 2 was not challenged in the DOMA case. Second, the Proposition 8 case is not binding on the entire country. Technically speaking, it is only applicable to Los Angeles and Alameda counties in California but for all intents and purposes, just the state of California (which is why the Arizona and Nevada cases are now before the Supreme Court for consideration since the Proposition 8 case is not even binding on the Ninth Circuit which includes Nevada and Arizona). Hence, this was a state-specific decision. Third, it calls into question the efficacy and legitimacy of voter-initiated referendum results and leaves those results subject to the whim of the occupant of the Governor’s office at any given time in any state. Of course, the courts can strike down laws or even state constitutional amendments that run afoul of the United States Constitution. But in these decisions, the Court refrained from and clearly did not establish- in language explicitly clear- that gay couples have a right to marry. As stated previously, Roberts’ decision in Perry and Scalia’s dissent in Windsor lead one to believe that at least four members of this Court would rather leave that question to the political process. The problem, however, is getting Kennedy to eat his federalism words and put his vote where his pen was in Windsor. Fourth, in the time from the Court accepting these cases to the present, five states have approved gay marriage. Today, more than 30% of the United States population is in states that have approved gay marriage. They are: Washington, California (no, but yes), Minnesota, Iowa, all of New England, Maryland and Delaware. Another six states recognize civil unions- basically marriage without the license. That brings the total to 41% of the United States population. Naturally,there will always be pockets of resistance, but should the minority foist their view upon the majority by judicial fiat in these areas? These citizens have expressed their view either directly or through their elected officials on the subject which, to this writer at least, is the definition of a republican representative democracy. To judicially step in and declare a federal right to same sex marriage would clearly go against these voter decisions which both sides agree is clearly the province of the states. Maine is the perfect example where they voted down gay marriage and then approved it two years later. One could only speculate, but if a referendum was placed on the California ballot today to allow gay marriage- that is, rescind Proposition 8- it would most likely easily pass. What a legislature or voters do, they can undo as times and attitudes change. There may very well be a day when 48 out of 50 states approve gay marriage. But, wouldn’t it be better if the people decided that issue rather than 5 Supreme Court justices?

World Sport Breaking News Sport A little over four years ago Blake Caparello gave up his job as a carpenter and devoted himself to the dream of winning a light heavyweight boxing world title. The chippy from Melbourne quickly found out life without a regular pay packet was tough. "I was living off credit cards," Caparello told AAP. "It's hard going to your parents and girlfriend and asking for help." Advertisement On Saturday (Sunday 10.30am AEST) at the Revel Resort in the US east coast casino capital of Atlantic City the 27-year-old can achieve that dream. Caparello takes on World Boxing Organisation champion Sergey "Krusher" Kovalev. There's a reason Kovalev has the "Krusher" ring name. The undefeated Russian has knocked out 22 of his 24 victims and not a single US boxing writer or analyst thinks Caparello has a chance of causing an upset. US reporters have actually voiced their disappointment about Caparello being Kovalev's challenger. They expected the Florida-based Russian to fight the other top light heavyweight and big hitter, Haitian-born, Canada-based World Boxing Council champion Adonis Stevenson in a unification bout. Kovalev and Stevenson both had relationships with the US pay TV network HBO, making the fight appear inevitable, but it hit a roadblock when Stevenson jumped ship to rival network Showtime. With other challengers unwilling to face Kovalev's power, the fearless Caparello put up his hand. "I know this is my opportunity and I'm not very well known in America," Caparello said. "But, a win here will leave me holding all of the cards." The Kovalev-Caparello fight has drawn comparisons to last week's middleweight world-title bout in New York between Kazakh knockout king Gennady Golovkin and Australia's Daniel Geale. Just like Geale, Caparello is not a renowned big puncher, with most of his wins points decisions after 12 rounds. Geale was knocked out in the third round last week, but Caparello and his team say there will not be a repeat result. "The thing with Blake is he's unlike any fighter I've known before," Caparello's manager, Brendan Bourke, said. "He's so relaxed, calm and confident in his own preparation." Caparello's girlfriend, Jessica, and his big Italian-Australian family that backed him from the beginning have made the long flight from Melbourne to be in Atlantic City to cheer him on. With a big Russian population on the US east coast and American fight fans salivating for another explosive knockout, Caparello will be walking into a lion's den. "He's a champion for a reason," Caparello said. "I can't disrespect him, but I can't fear him either." The bout will be televised in Australia via Main Event. FACTBOX - CAPARELLO VS KOVALEV Name: Blake Caparello Born: Essendon, Victoria Age: 27 Height: 187cm Reach: 188cm Alias: Il Capo Pro Record: 19 wins (KO 6), one draw KO Percentage: 30 per cent Name: Sergey Kovalev Born: Chelyabinsk, Russia Age: 31 Height: 183cm Reach: 184cm Alias: Krusher Pro Record: 24 wins (KO 22), one draw KO Percentage: 88 per cent

Breaking News Sport Sport Tennis National AAP World No.12 Juan Monaco's Australian Open campaign is in doubt after injury forced him to withdraw from the Kooyong Classic lead-up event on Tuesday. The Argentinian pulled out on the eve of the exhibition event citing a hand problem. "I had a phone call from Juan Monaco's management this morning which indicated to me that he had a hand injury," said tournament director Colin Stubs. "They're not certain how serious it is but he has been advised by his doctor not to play in the next few days with the hope that he can take his place in the Australian Open." Advertisement Monaco's spot in the eight-man field for Kooyong was taken by world No.58 Paul-Henri Mathieu of France. Meanwhile, Australian Open quarter-finalist and Japan Open winner Kei Nishikori was uncertain whether he would play in the Kooyong Classic due to the knee complaint that forced the world No.18 to pull out of the Brisbane International semi-finals. Nishikori was due to play his first match at Kooyong on Wednesday against Czech world No.6 Tomas Berdych. "Actually I haven't hit after that," Nishikori said. "I'm going to try to hit today and let's see how it goes - hopefully I can play here." Asked whether he would make it through the Kooyong tournament, the Japanese said: "I don't know." "It's not bad - let's cross the fingers and hopefully it will be okay." Berdych, seeded fifth for the Australian Open, is in need of match practice after becoming a surprise loser in the quarter-finals of last week's Chennai Open, going down in three sets to world No.80 Roberto Bautista Agut. Argentinian Juan Martin del Potro (No.7) and Janko Tipsarevic (No.9) are the other top-10 players in the Kooyong field, while Canadian Milos Raonic, Nishikori, Mathieu, Cypriot Marcos Baghdatis and Australian veteran Lleyton Hewitt make up the rest of the field.

Ever since cloud computing became part of our lexicon a few years back, the main showstopper, as seen by many enterprises, has been security. Many executives and managers are nervous about entrusting sensitive or competitive corporate data to offsite, and often unseen, third-parties. A few months back, I spoke with a CIO who admitted, however, that he felt his data is probably in better hands with a well-trained, SAS-70 compliant cloud provider than trying to keep his own systems and staff up to date with security procedures and protocols. Now, a report by The Wall Street Journal's John Bussey reinforces this idea: that data -- especially among small to medium-size businesses -- may actually be more secure in the cloud: "Basic security tasks that often don't get done at a small enterprise—updating antivirus programs or applying patches to software—are usually part of the plain-vanilla package in the cloud. The more you pay, the more you get: firewalls around your data, high-end encryption, 'private clouds' that let you isolate critical information and still access extra processing muscle when you need it, hacker-attack notification and mitigation, and 24-hour tech support. 'Small and medium businesses are insane not to leverage the advantages of cloud computing,' says Jim Reavis of Cloud Security Alliance, an industry group. 'It ends up being almost in all cases a security upgrade because they can't otherwise afford the practices.'" Of course, the WSJ article is based on anecdotal statements -- we'll have to see some survey data that definitely tells us that security is a reason for going to the cloud, versus being an impediment. The question is: is security now becoming cloud's best selling point? Or is it still too risky to rely on unseen third parties?

Claiming a saving on data usage of 50 percent, Google has rolled out a new data compression feature in its Chrome for Mobile app that is available for Android and iOS. To enable the new feature, all the user needs to do is head over to the Settings menu, go into the Bandwidth Management section, and select "Reduce data usage". In order to compress the data send to the mobile device, Google is forwarding all HTTP traffic and DNS lookups to a SPDY proxy run by the company, which sends its data back to the device over an SSL connection. "By using SPDY, the proxy is able to multiplex multiple request and response streams in parallel over a single TCP connection to your phone or tablet," Google engineer Matt Welsh wrote in a blog post introducing the beta release of the data compression feature in March 2013. "Only HTTP traffic is routed through and optimised by the proxy, so secure (HTTPS) requests will bypass the proxy and continue to connect directly to the destination." As part of the bandwidth saving, Google's proxy will return pages with gzip compression and convert all images to WebP, which the company says requires fewer bytes than JPEG or PNG. "The proxy also performs intelligent compression and minification of HTML, JavaScript, and CSS resources, which removes unnecessary white space, comments, and other metadata which are not essential to render the page," Welsh said. Pages requested in Chrome's Incognito mode are not sent via the proxy. Google is far from being the first company to use proxies to reduce bandwidth usage. Opera, for many years, has made use of a proxy for traffic reduction in its Opera Mini browser, a feature that is now found under the "Off-Road mode" moniker in its new Blink-based browser for Android . LinkedIn found itself in hot water in October last year, when the company introduced its Intro service for iPhone users, which routed a user's email through a LinkedIn proxy in order to inject LinkedIn information for them. As well as updating the mobile version of its Chrome application, Google also released a new desktop version of its browser, featuring a new mode for Windows 8 , which mimics the behaviour of Chrome OS.

In the past couple of months, we've gotten ever closer to high quality Rich Internet Application solutions. As the RIA becomes more and more of a reality, it's important to distinguish them from traditional web applications and figure out what benefits they provide. This is my list of 10 reasons you should be embracing the RIA whether you're working on the next great application from your garage or trying to convince your boss at a Fortune 500 company that RIAs are the way to go. There's something here for everyone. 1. Take advantage of the ubiquity of the internet. The web is everywhere, it's perhaps the only truly global phenomenon that we have today. Any web application can take advantage of this, but by building RIAs you can tap into the greater sphere of the internet. Bring cell-phone-based applications to consumers in Japan or children in Kenya. RIAs take you beyond the web browser and into a range of devices and mediums. 2. Make the most out of the building blocks of the web. RSS and micro formats are quickly becoming the building blocks of the web. They provide the invaluable content in easy to consume bits which means greater accessibility to content everywhere. RIAs are in a unique position to take this content and give users a great deal of control over it. RIAs free the building blocks from the confines of the web browser meaning much more potential for how we view and interact with content 3. Get in touch with your inner designer. RIAs trash the old model of how web applications should look and give developers a powerful and robust way to build their applications. Developers have control over every aspect of the experience and design, meaning they can try anything - including things that aren't possible with traditional web applications. This is going to make for some very ugly interfaces, but it's also going to make for some absolutely mind-blowing interfaces too. 4. Connect your world. By taking full advantage of the Internet, RIAs can be used to connect a living room or a community. You can make sure your content is with you on your cell phone or Xbox. You can share that content with your friend who has a PSP. RIAs will also allow collaboration on a new scale. RIAs have the potential to bring people from all over the world together and letting them interact with their content together. People make the internet, and RIAs can make it seem like those people are next to each other. 5. Promote your brand. Whether you get in touch with your inner designer or you hire a rock star to promote your brand, RIAs give you total control over how your brand reaches the world. You can customize applications in such a way that immerses the user in your world and gets them excited about your brand. By not trapping users in the web browser, you can suspend their disbelief so that they are viewing and interacting with your content on your terms. 6. Harness today's multimedia. Multimedia on the web used to be a joke, but now it's everywhere and getting better every day. The web browser wasn't built to handle multimedia and requires plug-ins and add-ons to view content today. RIAs can be built to incorporate multimedia so that it doesn't appear nailed on. With RIAs the multimedia content becomes part of the experience instead of an extra feature. 7. Hook your customers. Because you have control over exactly what the user experiences, you can use that experience to hook them on your products. Incorporate multimedia, devices and the web so that they are seeing your product in a way they can't see your competitors. By making sure you can go with them wherever they are, you can hook them when competitors can't. 8. Streamline development time. The holy grail of RIAs is to write one set of code and have that code run on any device or computer in the world. As a development shop, you can have one code base and deploy that anywhere your users go. If you're a business then you can make sure your executives have your application whether they are on a plane with their PDAs or at their desk on their laptops. 9. Revolutionize the enterprise. RIAs take the idea of software as a service and revolutionize it. You can provide a desktop-type-interface over the web and on any computer or device. It provides a single point for upgrades or patches meaning your IT staff won't have to run around touching every computer in your business. At the same time, the users aren't giving up any control over their applications. RIAs behave exactly like desktop applications and users will enjoy the same level of control. Unlike a typical remote desktop scenario, the RIA can move with your users to their cell phones or PDAs so they have the content anywhere they go. 10. Show what Web 2.0 can be. Web 2.0 gets a lot of bad press as a buzzword, but it has still given average users a new way of categorizing and interacting with their content. It has also given them a way to communicate with the world in the form of podcasts, blogs or vlogs. RIAs take all of the progress we've made on the web and make it easy to use. Users who are used to the way desktop applications behave will be a home in an RIA world and as a result will be more likely to participate in the global conversation. RIAs leverage the APIs and standards of Web 2.0 into great experiences that everyone can relate to.

Exactly a century ago, the United States was a highly charged magnet for immigrants around the world. Thousands entered Ellis Island each day on the hope of making a better life for themselves and their families. Two of those immigrants were Jeno and Sara Friedman; they would become the parents of Milton Friedman, one of the most influential and important economists of the 20th century. Dubbed the “grandmaster of free market economic theory” by The New York Times, Friedman’s writings, especially his 1980 book “Free to Choose,” authored with his wife Rose, refuted popular claims that “more government” would improve the quality of our lives. Milton Friedman was the most ardent spokesperson advocating the complete opposite. Voluntary choices of individuals rather than arbitrary dictates of the state, he argued, should be the default mode of human life. Government is justified only insofar as it preserves, protects and defends individual liberty. On the 100th anniversary of his birth this week, one may wonder what the Nobel laureate would say about the more controversial policies now unfolding across America. What would Friedman have thought about the recent advances in school choice, the idea he developed in 1955? How would he react to government’s decision to tax Americans who do not purchase health care? Would Friedman take a position regarding the financial impact of soaring public union pensions on state economies? As an expert on monetary policy, certainly Friedman would have an opinion regarding the federal government’s bailout of the financial industry and its impact on our personal freedom. [pullquote] On school choice — the principle that all parents should have access to their child’s education funding so that they may choose whatever learning environment is best for their child — I believe Milton would say we’ve come a long way, but not nearly far enough. Today there are 39 voucher and tax-credit programs in 21 states and the District of Columbia offering more than 200,000 children educational freedom. In the past two years alone, more advancement has been made in school choice than in the previous 20 years. Yet most American parents still are not free to choose their child’s school. Limited by financial resources of their parents, children living within arbitrarily drawn boundaries are assigned to government-run institutions. The competitive, diverse, and innovative system of high-quality educational options Friedman advocated is not yet a reality. On health care, Milton likely would have disagreed with the massive centralization of an industry -- a consequence of the Affordable Care Act. Moreover, its central tenet -- that Americans are forced through taxation to engage in certain behaviors-- resembles what Milton’s parents tried to escape when coming to the U.S. in 1894. The results, Friedman might have said, would be a lowering of quality accompanied by a significant increase in cost. Friedman was particularly dismayed at how unions continue to drive up taxpayer costs in places like California. Today, public employee unions and their largess have contributed to multiple cities to filing for bankruptcy. Friedman believed a free nation should never be held hostage to monopolies, including trade unions. He would have been heartened by progress made by strong leaders in several states to bring the public sector more in line with the private sector. Still, Friedman would likely have agreed that much more needs to be done as teacher pension liabilities alone approach $1 trillion. As for those bailouts, it is highly doubtful Friedman would support propping up any institution that cannot compete in the free market. Milton’s writings on monetary policy were sternly against actions that could cause inflation. But he also did not favor “easy money,” which has become the worldwide solution to the ongoing financial crisis. Friedman believed banks, governments, and individuals must keep their fiscal house in order. Ultimately, we can rely only on Friedman’s writings to determine what he might have said to the issues we face today. Yet we can rest assured; at the core of his work was a commitment to the freedom of individuals over the collective force of a centralized government. Just like in the early and mid-20th century, today the threat of central power and planning is threatening Americans’ freedom and quality of life. And although Milton Friedman is no longer with us, the vision he expressed through his writings endures. Since his passing in 2006, the Friedman Foundation has sponsored annual events around the world to spread the ideas espoused by Milton Friedman. On July 31, more than 140 events will be held in 50 states and in 44 counties honoring the life and legacy of Dr. Friedman, on what would have been his 100th birthday. From California to Chile, Vermont to Venezuela, Pennsylvania to Pakistan, and Illinois to Iran, thousands will gather to remember Milton Friedman and to keep his work alive. These events are reminders that free markets are about much more than economics. As Friedman wrote in his book, “Capitalism and Freedom”: “Underlying most arguments against the free market is a lack of belief in freedom itself.” Economic freedom lies at the heart of liberty; to live with the freedom to choose, to build our own lives, is what motivated people like Friedman’s parents to seek America’s shores many years ago. Enlow is president and CEO of the Friedman Foundation for Educational Choice, the legacy foundation of the late Nobel laureate Milton Friedman and his wife Rose. Robert Enlow is president and CEO of the Friedman Foundation for Educational Choice, the legacy foundation of Nobel laureate Milton Friedman and his wife Rose.

Senate Democratic Leader Harry Reid (search) accused President Bush and congressional Republicans of bending to "the whispered wishes of a few right wing activists," yet said this week's compromise over filibuster (search) rules could portend a new era of bipartisanship. "Americans are sick and tired of getting caught in the crossfire of partisan sniping," Reid said Thursday in a speech at the National Press Club. "Americans want us to put the commonsense center ahead of nonsense." Within hours of the speech, Reid and other Democrats voted to block a final confirmation vote on John R. Bolton's (search) nomination as U.N. ambassador, and Senate Majority Leader Bill Frist fired back. "Some 72 hours after hailing an agreement that sought to end partisan filibusters, the Democrats have launched yet another partisan filibuster," he said in a written statement. "Actions speak volumes, and so does inaction. Given the chance to advance the cause of comity in the Senate, the Democrats have chosen partisan confrontation over cooperation. And rather than working to advance America's agenda and act by voting on the floor, the Democrats keep stepping on the brake." The Nevada Democrat spoke three days after an agreement among Senate centrists of both parties averted a showdown over the Senate's filibuster rules. In the days since, the Senate has approved Priscilla Owen (search), one of Bush's appeals court nominees that Democrats long blocked. Other confirmations are expected early next month. Reid claimed the compromise marked "the defeat of the nuclear option (search)," the term used within the Senate for a Republican proposal to strip Democrats of their right to block final votes on controversial nominees. Republicans argue otherwise, and Frist, R-Tenn., has made clear he is ready to resurrect the issue if Democrats resort to blocking tactics in opposing future nominees. Senate Democrats, long tarred by Republicans as obstructionists, have sought to pivot quickly onto domestic issues. In his speech, Reid said Democrats wanted to focus on issues such as national security, the economy, health care, reducing gasoline prices and improving retirement security while continuing to "stop George Bush from privatizing Social Security (search)." He said the outcome of the fight over filibusters showed "what is possible when people of good faith — Republicans and Democrats — join hands and put principles ahead of partisanship." At the same time, issues he mentioned as ripe for cooperation are Democratic priorities. They include raising the minimum wage, permitting the importation of prescription drugs (search) from Canada and expanding federally funded research on embryonic stem cells. Bush has threatened to veto House-passed stem cell legislation (search), a threat Reid said results from pressure from the right wing. "When George Bush and the Republican leadership make their decisions, the whispered wishes of a few right wing activists drown out the pleas of America's families," he said.

Iran stood firm Tuesday in opposing language in a nuclear conference agenda that reaffirms the need for full compliance with the Nuclear Nonproliferation Treaty, a stance that diplomats said could scuttle the meeting aimed at strengthening the accord. The conference, which began Monday and lasts for two weeks, is the first of three sessions to prepare for a full review of the treaty in 2010 and to come up with specific ideas on how to reinforce the pact. Iran opposed wording in the meeting's agenda that mentions the "need for full compliance with the treaty." The agenda must be adopted by consensus before delegates can move on to more substantive matters. If Iran digs in its heels, it could force the meeting to adjourn to a later date. Alternatively, delegates could move on to specific agenda items not being contested by Tehran, giving the meeting time to reach a compromise. A senior diplomat from a nonaligned nation, which usually supports Iran in showdowns with the United States and its allies over its nuclear program, said Tuesday that even nonaligned countries were puzzled by Iran's move. An Iranian diplomat, asked whether his country's position had changed as the conference convened for the second day Tuesday, said "No." He and other diplomats spoke to The Associated Press on condition of anonymity because they were not authorized to comment on the issue to the media. The Iranian said his delegation did not see the need for that particular wording on compliance, adding it would prefer to see "different language." Another diplomat familiar with the issue said Iran was worried about being bullied and "considered it an additional provocation." Several expressed surprise at Iran's opposition to the wording, noting it has always maintained its nuclear activities — including a developing program to enrich uranium that has led to U.N. sanctions — are in compliance with the treaty. The treaty, reviewed every five years, calls on nations to pledge not to pursue nuclear weapons, in exchange for a commitment by five nuclear powers — the United States, Russia, Britain, France and China — to move toward nuclear disarmament. India and Pakistan, which are known nuclear weapons states, remain outside the treaty, as does Israel, which is considered to have such arms, though it has not acknowledged it. Both Iran and North Korea have tested the 37-year-old treaty's effectiveness. North Korea pulled out in early 2003 and went on to develop a nuclear bomb. Iran argues it has a right to pursue uranium enrichment under the treaty despite international fears it is using the process to make nuclear weapons. The U.N. has imposed sanctions over Iran's refusal to suspend uranium enrichment. U.N. Secretary-General Ban Ki-moon, in a statement to the conference Monday, urged delegates to work together to find ways to strengthen the treaty. "There continues to be insufficient progress in nuclear disarmament, as well as a lack of universal adherence to IAEA safeguards agreements, and cases of noncompliance," he said, referring to the U.N. nuclear watchdog — the International Atomic Energy Agency. Apart from cases of outright noncompliance, nuclear powers are not doing enough to disarm, and countries are not adhering to safeguard agreements, he said. There is a "persisting crisis of confidence in the treaty," Ban said. Earlier, delegates urged Iran and North Korea to accept international demands that they give up their nuclear programs in order to safeguard the future of the nonproliferation treaty. Singling out North Korea, Christopher A. Ford, the U.S. Special Representative for Nuclear Nonproliferation, said there was a need for states that are party to the treaty to work together to deter others from using withdrawal "as a means to escape the consequences of their violation of the treaty's provisions." Ford said it was "important ... to make such withdrawal more unattractive before any other state party violator is tempted to follow such a course." The EU is also concerned about the situation in North Korea and has urged Pyongyang to dismantle its "WMD and ballistics programs in a complete, irreversible and verifiable way," Ruediger Luedeking, Germany's deputy commissioner for arms control and disarmament, told the opening session Monday on behalf of the European Union. While North Korea agreed in February to shut down its nuclear programs, a dispute over its access to $25 million in funds frozen at a Macau bank has delayed implementation of that pledge. Officials from some 130 of the treaty's 189 signatory countries are attending the conference, excluding North Korea.

Progressives are language manipulation masters. Their arguments for or against an issue are designed to corner you with words created to make the ill-prepared and/or the simple-minded retreat from the argument. And they love to play victim and scream about their rights being violated if you do not cave into their demands. Such is the case with those whose mission is to redefine marriage. If you look at the history of the so-called “gay rights movement” over the last twenty years or so, they have changed the language they use when they see danger encroaching upon previous terminology. Recall when the preferred term to refer to homosexual relationships was “sexual preference”? Like preferring chocolate over vanilla, a person’s preferred choice of engaging in sex with the same sex was simply that — a preference. Until it became clear that they needed to up the ante because the term sexual preference implied choice as in free-will. Refusing to allow people to believe homosexuals choose their behavior, the terminology was suddenly changed to “sexual orientation” and the argument centered around the permanence and unchangeable nature of a person being born gay. Never mind that the science does not support that theory. It is so because they say it is so. End of discussion. Now, the movement has reached full-blown maturation and the language gurus are using the deceptive term “marriage equality” to make you cringe at the thought of denying someone a right that should be available to all. Tricky tricks of the language gurus who really are just manipulation masters. Here’s a great clip showing Ryan T. Anderson, William E. Simon Fellow at The Heritage Foundation, calmly and rationally dismantle their argument in less than five minutes: Well done, Ryan. The Watercooler is always an open thread.

One of the scariest unknown technology risks of this decade is the issue of radiation from cell phones. There's still an open question about whether long term exposure to these mobile devices will cause damage or disease to human beings. The Environmental Working Group has a comprehensive new study (download the full report as a PDF) that surveys the scientific research on cellphone heath risks and provides radiation data for most of the current cellphones in use. Here's how the EWG explained the mission of its study: We at Environmental Working Group are still using our cell phones, but we also believe that until scientists know much more about cell phone radiation, it's smart for consumers to buy phones with the lowest emissions. The U.S. government ought to require cell phone companies to label their products' radiation output so that consumers can do the numbers at the point of sale. It doesn't, so EWG has created this user-friendly interactive online guide to cell phone emissions, covering over 1,000 phones currently on the market. The EWG study looks at all mobile phones, but since smartphones are becoming a standard tool for businesses and IT professionals, I've drilled down and looked at the list from a smartphone perspective. I've broken out the 10 smartphones that produce the most radiation, the 10 that product the least amount of radiation, and a list of the radiation ratings of some of the most popular smartphones that did not make either of those two lists. When you look at these lists, keep in mind that the EWG has also included some older models that are no longer being sold but are still used by many workers and consumers. Also note that "W/kg" stands for watts per kilogram, a measurement for power density. The 10 smartphones with the highest radiation The T-Mobile MyTouch 3G, an HTC smartphone powered by Google Android that debuted to lots of fanfare this summer, topped the list of the worst radiation offenders. However, other popular smartphones dominated the list as well, especially BlackBerries and Treos. The BlackBerry Curve, the best-selling smartphone on the market in 2009, was a close second on the list, and it was joined in the top 10 by its cousins, the BlackBerry Pearl and the BlackBerry Bold. The 10 smartphones with lowest radiation Nokia, with five models in this top 10, and Samsung with three, were clearly the winners in terms of smartphones that emit the least amount of radiation. It's also interesting to note that although both of these companies produce dozens of different models, neither of them had a single model that made the list of the worst radiation offenders. The surprising member of the low-radiation club was the BlackBerry Storm (RIM's first touchscreen device) since so many of the other popular BlackBerries were on the high-emitters list. Other notables, from lowest to highest If there's another phone you'd like to look up, here is the full list. Also, when seriously evaluating any smartphone on any of these lists, make sure you click through and look at the EWG page with the details of the phone's radiation emissions using different connections and doing different activities. The number listed is the maximum radiation rating, but it can be deceiving in some cases until you look at the whole picture. For example, the iPhone 3GS has a rating of 1.19 W/kg, which is a middle-of-the-pack rating. However, 1.19 is its maximum radiation level, which only happens when it is connected in UMTS 1900MHz mode. In its other four modes, it averages 0.63 W/kg, which is more consistent with the lower tier of radiation emitters. Safety tips Buy a low-radiation phone Use a headset or speaker Listen more, talk less Hold phone away from your body Choose texting over talking Poor signal? Stay off the phone Limit children's phone use Skip the "radiation shield" As part of the report, the EWG also provided eight safety tips for cellphone users who are concerned about radiation. Here is a quick list of the tips. You can click through to the original list for more detail on each of the items. The EWG also offers a one-page PDF that lists all eight of these tips along with a further explanation of each. IT professionals might consider distributing this PDF to employees who use company cellphones or posting it on the corporate intranet. Of course, you should consult senior management and your legal department before distributing something like this since it involves employee health. Bottom line While there isn't conclusive scientific evidence proving that cellphones cause illnesses or diseases in humans, the EWG report does point to research that has shown links between prolonged cellphone use and brain cancer, salivary gland tumors, migraines and vertigo, and decreased male sperm count (from carrying a cellphone in the pocket). A lot more research still needs to be done, but in the meantime it makes sense for mobile manufacturers to limit cellphone radiation whenever possible and for users to be aware of which phones produce the most radiation so that they can take steps to limit radiation exposure as a precautionary step. UPDATE 09/14/2009, 9:00 AM EST: I got a note from Daniel Van Hoy, a broadcast engineer, who wrote, "There is a big difference between 'ionizing' and 'non-ionizing' radiation... Cell phones, radios and TV transmissions emit non-ionizing radiation that has a longer wavelength, lower frequency and lower overall energy per photon than UV light, X-rays and gamma rays (a form of radioactivity), which are known as ionizing radiation because they have enough power to eject an electron from its orbit and leave behind a charged ion that can damage cells and tissues." I verified this information to be correct. There's also more on ionizing vs. non-ionizing radiation from the U.S. EPA.

Actuant Corporation (NYSE:ATU) June 03, 2013 11:00 am ET Executives Karen Bauer - Communications & Investor Relations Leader Robert C. Arzbaecher - Chairman, Chief Executive Officer and President Andrew G. Lampereur - Chief Financial Officer and Executive Vice President Analysts Ann P. Duignan - JP Morgan Chase & Co, Research Division Allison Poliniak-Cusic - Wells Fargo Securities, LLC, Research Division Ajay Kejriwal - FBR Capital Markets & Co., Research Division Jeffrey D. Hammond - KeyBanc Capital Markets Inc., Research Division James Kawai - SunTrust Robinson Humphrey, Inc., Research Division Operator Welcome to today's call for Actuant Corporation. As a reminder, this conference is being recorded Monday, June 3, 2013. It is now my pleasure to turn the conference over to Karen Bauer, Actuant's Director of Investor Relations and Communications. Please go ahead, Ms. Bauer. Karen Bauer Great. Thanks. Good morning, and welcome to today's conference call regarding our intention to divest the Electrical segment. On the call with me today are Bob Arzbaecher, Actuant's Chief Executive Officer; Mark Goldstein, Chief Operating Officer; and Andy Lampereur, Chief Financial Officer. Our press release and the slide presentation supplementing today's call are available in the Investors section of Actuant's website. Before we start, let me offer the following cautionary note. During this call, we will be making forward-looking statements within the meaning of the Private Securities Litigation Reform Act, including those about the planned divestiture of the Electrical segment, the timing thereof and the prospects and expected financial results of Actuant after the planned transaction. Investors are cautioned that forward-looking statements are inherently uncertain and that there are a number of factors that could cause actual results to differ materially from these statements. These factors are outlined in our SEC filings. [Operator Instructions] With that, I'll turn the call over to Bob. Robert C. Arzbaecher Thank you, Karen. As you saw in today's press release, we are starting a process to divest the Electrical segment. This decision came after a great deal of thought, discussion and analysis and really comes down to portfolio management, which we review with on a regular basis with the Board of Directors. These discussions revolve around where we think our served markets are going over the longer term. We have increased focus on what we call macro growth drivers, markets that we think will match up well with our portfolio and markets that have an underlying faster growth potential. Electrical, while it's got its own growth initiatives, has increasingly become an outlier from these macro growth drivers. More on that later in the call. First I'll turn it over to Andy to walk through some of the various financial implications of today's announcement. Andy? Andrew G. Lampereur Thanks, Bob. I'll try to be brief this morning and focus on 3 items, the write-down, the use of proceeds and the restated results. First, the write-down and now I'm on Slide 4. We announced this morning that we will be taking a noncash net charge of approximately $150 million to reduce the carrying value of the Electrical segment. Generally accepted accounting principles require a review of estimated proceeds to net book value, which drives the write-down in the third quarter. A lot of adjustments required in the calculation and the only thing that I'm certain of is that there will be a true-up to this write-down in the future to take into account the actual proceeds from the sale, the result in income taxes and the associated expenses, which are first recognized upon completion of the sale. The M&A market will determine the actual fair value of the Electrical segment, and we won't be providing estimates or discussing specifics today on the estimated proceeds. That leads to the second topic, which is the use of proceeds. Actuant's balance sheet has never been in better shape. Given the low interest rate environment and our 1.5% incremental borrowing cost today, we don't intend to retire or repay existing debt with the proceeds from the transaction. Instead, the proceeds will provide more dry powder that we will either be deployed in acquisitions or returned to shareholders in the form of common stock buybacks. Now on to Slide 5. We have attached to this morning's press release adjusted Actuant quarterly results for the last 6 quarters to give effect to the reclassification of Electrical segment results to discontinued operations. This will provide a view of our financial profile, which results in changes in a few areas that I will cover here. First, we believe that our core growth should improve without the Electrical segment. Second, our operating profit, EBITDA and net profit margins, will be higher than what we have historically reported, including the Electrical segment. Roughly speaking, 100-basis-point increase in EBITDA margin. And finally, our effective tax rate without the Electrical segment will be lower on account of lower pretax earnings in the U.S. that are taxed at above average rates since most of the profits from the Electrical segment were generated in the U.S. While our sales and EPS from continuing operations in the short term will be lower without Electrical, the proposed divestiture will create value in the long run, as we redeploy the proceeds into other growth opportunities. What won't change is our business model and the focus on growth in sales, earnings and cash flow. With that, I will turn the call back over to Bob. Robert C. Arzbaecher Thank you, Andy. First, let me talk about our Electrical segment, which I am covering here on Slide 6. The roots of the Electrical segment date back to 1988 with the acquisition of Gardner Bender, and the segment has grown both organically and through acquisitions over the past 25 years. Today, it's roughly a $300 million segment with low-teens EBITDA and primary operations in North America and Western Europe. It's a healthy business, has a great management team, recognizable brand names, good channel presence and will make a great asset for the buyer focus on the Electrical marketplace. But for Actuant, our growth is elsewhere. I'm now on Slide 7. We have 2 areas of emphasis: first, high-growth markets of China, India and Brazil; and second, macro growth drivers, which I'll cover in a minute. The Electrical segment has less fit with these 2 growth drivers versus the other segments within Actuant. First, let me talk about our high-growth markets. As this slide shows, our sales in the rest of the world are about 20% of our total. This includes Brazil, China and India, where we want to grow significantly faster in the next 5 years, first organically through growth -- through core growth and supplemented with the acquisitions. We've added to our "boots on the ground" capability in both India and Brazil in the last 12 months and have reenergized our third-party sales efforts in China. Our belief is that these 3 markets will grow much faster than the mature markets of Europe and North America, and we're focused on capturing this growth with the 3 remaining segments. Second, let me discuss macro growth drivers. With our diverse portfolio of products and services, we serve a tremendous number of end markets within the broad definition of global industrial products and services. Our objective has been to narrow to a more identifiable markets that we want to focus on, subsets of the broader industrial market that we believe will grow faster over the next decade. Today, there are 4 of them: energy, infrastructure, farm food productivity, and mining and natural resources. Sales of these markets account for well over half of Actuant's current sales and remain the primary focus of our organic and inorganic growth initiatives. In addition, to our focus on other markets, there are a number of other additional reasons why monetizing the Electrical segment makes sense. We simplify our business profile for investors and other stakeholders. As Andy mentioned earlier, many of our financial metrics improved: operating and EBITDA margins, return on invested capital and cash flow as a percentage of the revenue or profits. Actuant's EBITDA margins are already in the upper quartile of diversified industrial companies, and with the revised 19% EBITDA margin profile, they move even higher. And finally, the proceeds from the sale of the Electrical segment provide additional financial flexibility to fund our growth plans or buyback shares. That concludes our prepared remarks. Operator, I'd like to turn it open to the phone lines for the question-and-answer session. Question-and-Answer Session Operator [Operator Instructions] Our first question comes the line of Charley Brady with BMO Capital Markets. Unknown Analyst This is Andrew Geronimo [ph] for Charley Brady. I was just wondering if you might have any kind of comparables or -- for the Electrical segment or anything that might kind of lead to some sort of what we may expect from some of the proceeds. Robert C. Arzbaecher Go ahead. Andrew G. Lampereur We do not have anything that we're going to prepare or provide you guys with out there. I think that we will let the market, the M&A market, determine what the fair value of the asset is, but we're not going to get into evaluation expectations and proceeds expectations. Unknown Analyst Okay. Great. And I guess what are some of the future growth drivers that you guys see in the Electrical segment then? Robert C. Arzbaecher Well, the growth drivers in Electrical tend to be a focus on our recovery in the -- some of the core markets, so there's a big remodeling aspect. So when you look at Depot and Lowe's, Ace,TruServ, some of that remodeling revenue we expect will kind of come off the bottom. I think, in general, we've seen more of a disconnect with housing than just with the remodeling. So that's a piece that as housing comes back, we might see a little, but it's more really on the remodeling. We've got a pretty good focus on our Del City business, which is kind of a direct to the end user piece of the business, and so I think that is a focused driver. Our Turner business plays a little bit into the Electrical grid in North America. So there are chunks of growth. It's just not aligned with the 4 macro growth drivers I talked about earlier. Operator And our next question comes from the line of Ann Duignan with JPMorgan. Ann P. Duignan - JP Morgan Chase & Co, Research Division I'm just curious why now and why at this early stage in the process versus you've decided whether who the buyer is and the business has been sold before going public with this. I'm just curious what the rationale was. Robert C. Arzbaecher Well, you think we are a pretty transparent organization for employees and other stakeholders. We thought it was important to tell people what we're doing. We -- if you've been to Menomonee Falls here, we share a campus with the electrical people, they're right across the street. And I think we felt an obligation to do that. The process -- when you go through a sale process, people -- trying to do it quietly. You're not sure you catch every potential party, that's another reason. But I'd say the major one is really just that transparency. Ann P. Duignan - JP Morgan Chase & Co, Research Division And I thought you might say that, and then that leads me to my follow-up, which is, is there any risk to the Electrical business right now, as employees become distracted or start looking for new jobs? I mean, are there any risks to the business operating performance going forward as you go through this process? Robert C. Arzbaecher Obviously, we spend a lot of time thinking about that, making sure that we communicate well. Our business is here because of our kind of a limited corporate. The segments operate pretty autonomously. So I don't think people are going to look at it as somehow I'm -- I've got that big of a change. It all reports under David Scheer, who's the President of Electrical. And we would not expect any. Again, as I my comment said, this is a pretty healthy business from an electrical point of view, low-teens EBITDA margins for Electrical's probably in the middle of the fairway, and we really do expect this will be an important asset for somebody. Andrew G. Lampereur I think one of the other items, Ann, is we learned back when -- at the time of the spinoff when it was very public that the business was being sold or spun off, the transparency, the communication to employees, we really did not see a significant turnover. As a result, employees appreciated the heads-up. As long as they knew what was going on, they stuck with the business. So we definitely relied on that as well. Ann P. Duignan - JP Morgan Chase & Co, Research Division Okay. I don't want to hog it, so I guess my other question would be a little bit more strategic. I mean, there is a lot of talk out there right now whether or not natural resources is in D-Day growth sector. Could you just comment on that, Bob, on what your feeling is in terms of Actuant's position in that segment? Robert C. Arzbaecher Yes. I think -- I understand how people look at mining particularly and have some issues. I will tell you, our mining business is doing well. Now part of that is we started with very little market share. Okay, so us introducing products like the dozer lift, even if the market's not growing, it's a new product for a served market. We do a lot of MRO, so you don't need necessarily growth. It -- you need equipment to be operating and be working. Safety, reliability, getting this equipment back up and running are all things that we're kind of focused on how do you help the minds do that. So last piece of the natural resources that I think is important is some of the -- what's going on in Australia with the LNG build-out that you see in that upper coast. That's where Gorgon is, and there's a number of them behind that. Whether that's energy or mining natural resources, it's really right down the middle of our growth fairway. Operator And our next question comes from the line of Allison Poliniak-Cusic with Wells Fargo. Allison Poliniak-Cusic - Wells Fargo Securities, LLC, Research Division Bob, could you just give us an update since you talked about proceeds going to potential acquisitions, sort of what you're seeing in the environment right now and where you guys stand? Robert C. Arzbaecher Yes. I think I'm going to beg that question off until our quarterly earnings. It isn't a big change from what we've communicated publicly in the past. There is no huge deal around the corner that's immediately going to use up these proceeds. That's got nothing to do with the announcement that we made. I think I'll give a more complete update when we get to the quarterly call. Allison Poliniak-Cusic - Wells Fargo Securities, LLC, Research Division Okay. And then Andy, you may have a similar comment, but any color on what's left on that share authorization you have outstanding at this point? Andrew G. Lampereur Based on what we had completed through the last quarter the -- being the second quarter that we publicly talked about, we had purchased roughly 3 million of the 7 million, so there's about 4 million shares remaining under that authorization. Allison Poliniak-Cusic - Wells Fargo Securities, LLC, Research Division Okay. And then one last question, you talked about rest of world, like, obviously, being a high-growth area for you. Any sort of goals that you're looking to reach in terms of a percent of sales? Or is it just sort of fluid at this point? Robert C. Arzbaecher It's fluid. I think we will update that as we did in last year's investor -- Annual Investor Meeting where we focused a little bit on those markets in a little more detail. I think we'll do that again. But if we believe the base business is going from 1.5 to 2x kind of core growth, we would expect those Asian markets given we're in the early time for us over there. We'd expect those to grow to 2x, 3x faster. So it's in that zip code. Operator And our next question comes the line of Ajay Kejriwal with FBR Capital Markets. Ajay Kejriwal - FBR Capital Markets & Co., Research Division So Bob, maybe just one of your comments, I think, you have that on Slide 9, transformational change in portfolio and obviously, divestiture. You're -- This morning, I'm viewing that as part one of maybe a 2-part strategy, the other part being acquisitions, and then you commented no huge deal around the corner. But just maybe help us kind of think about acquisitions here. You've been a little bit quiet few months, maybe talk about what's in the pipeline, why have we not seen deals? Is it valuation? Or you've been wanting to do larger deals? Or -- what are the -- and then post this divestiture, you'll be like a 3-segment company, so what are your thoughts around adding a new leg to the stool? Robert C. Arzbaecher Okay, great question, Ajay. I would start by saying a couple of things. Number one, there's really no change in our acquisition strategy. I think we've been talking to you guys for year, 1.5 years about our focus in Industrial and in Energy, and this divestiture doesn't change that focus at all. I think we've gotten a lot of feedback from stakeholders, investors particularly, about -- that the story is a little confusing with 4 segments and seeing how it all integrates together. I think people are much more comfortable when you look at the remaining 3 being a hydraulics and infrastructure tool, MRO-type side of the business. So I think we believe that, that fits together and will be a more succinct story. Why haven't deals gotten done? I think I was pretty clear on that in the last call. We're disciplined. We had one major deal that we would have liked to have done this year. It was right down the middle of our fairway, and we believe the integration risk due to the fact that it was part of a public parent was going to be very difficult. We've had a couple that have gone by the wayside due to pricing, and we are ROIC focused, and we run into issues associated with the price. The funnel is full. There are things in there. When I say nothing's imminent, I was trying to make the comment that this deal is not -- this disposition is not tied to an acquisition. It's not like we're saying, we have to take from Peter to pay Paul. That is not where we're at. With our leverage levels now, we could have done all the acquisitions that are in the funnel and still held on to Electrical, not needing to monetize that proceed. So I guess I'm trying to leave you the message really not any change from what you've heard from us publicly. The transformational portion is really that we're taking a business that we've had since 1988 out of the portfolio. I think we view that as pretty transformational. Ajay Kejriwal - FBR Capital Markets & Co., Research Division Got it. That's helpful. And then maybe one follow-up for me. The $150 million after tax charge, what's the gross-up number on that, please? Andrew G. Lampereur There is not a significant tax piece on it now. It really comes down the road with the... Robert C. Arzbaecher Yes, when you pin it all one by one [ph] ... Andrew G. Lampereur When you complete the -- when you complete the deal. Operator And our next question comes from the line of Jeff Hammond with KeyBanc Capital Markets. Jeffrey D. Hammond - KeyBanc Capital Markets Inc., Research Division Just a couple of quick ones here. So one, do you -- would you anticipate at selling as a whole? Or do you have to kind of move this business out in pieces? I know there are some kind of distinct and separate businesses. And just on the buyback, are you restricted in any way during the process? Robert C. Arzbaecher We would expect to sell it as a whole and there are no restrictions on the buyback. Jeffrey D. Hammond - KeyBanc Capital Markets Inc., Research Division Okay. And if I can just sneak one more in, I know you're not prepared to guide, but how should we -- I mean, so the -- but the guide, when we get it on the earnings call, would x this and not taking into account any offsets, buyback or otherwise. Robert C. Arzbaecher I think that's right, Jeff. We might put some kind of a tail-in, so you can see the effect of various scenarios, but I think that's the case. And certainly in the third quarter, we want to be able to reconcile you from the guidance of the totality. So you're going to kind of pick up both Electrical and the total thing when we announce in 3 weeks. Operator And our next question comes the line of James Kawai with SunTrust. James Kawai - SunTrust Robinson Humphrey, Inc., Research Division My question is, I know you articulated no change in the overall strategy relative to cash flow redeployment, but there's a change in kind of the fundamentals here. You're talking about getting anywhere from, I don't know, roughly $250 million to $350 million just to give you a really wide range of potential cash coming in. Could we see within the context of your strategy, there's a pretty fundamental change in your position there? Could we see an acceleration to share repurchase or acquisition appetite? Or is this something where we're going to wait until the proceeds that we're still looking about a year out for this, the redeployment of this pending cash? Robert C. Arzbaecher Well, I think we're clear in the press release and in our comments today that we're going to look at both acquisitions and stock buybacks. And I think where we are clear is there is no fundamental change in our leverage profile. We're not necessarily like trying to change to an investment-grade company or a dividend company. We're trying to do the strategy that we have. This -- we're already below the low end of our range. It's a function of great cash flow over the last couple of years and more limited acquisitions. But that change is on a dime, and we've had many years in Actuant's history where it's just the opposite. We targeted to do $200 million a deals, and we do $300 million a deal. So all I would say is I know you guys want to pin me down to a perfect quarterly rollout of acquisitions. It just doesn't work that way. We've got a full funnel. I'm confident we'll get things done. But there really isn't any range in our capital strategy. Anything you want to add to that, Andy? Andrew G. Lampereur No. James Kawai - SunTrust Robinson Humphrey, Inc., Research Division All right. That's helpful. And then just as a follow-up on the divestiture, you indicated and I think you're right in that there will be considerable interest in the asset. Do you eventually see it kind of going to a financial buyer? Or are there strategics where you've kind of pre-gained the sale where it might make sense, where there's good fit? Robert C. Arzbaecher We're not going to comment on that. Operator Okay. And there are no further questions at this time. Robert C. Arzbaecher Well, thank you. We have -- we'll be here all afternoon if people want to follow up with questions. Karen, myself and Andy are all available. Thank you for attending the call on such short notice. Bye-bye. Operator Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your line. Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. 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There's a bit of a vintage vibe at New York Fashion Week, with many designers mining bygone eras as inspiration for their new fall collections. The outfits are distinctly feminine, although there are many menswear touches. The brown, moss and gray backdrop is made richer with plum, berry and blue. Suze Yalof Schwartz, Glamour's fashion editor at large, was keeping an eye out Tuesday for tulle overlays over printed fabrics and oversized embellishments. "I call them rocks. They're heavy, chunky and very cool looking," she said. Previews for stylists, editors and retail buyers continue through Friday, with heavy hitters Michael Kors, Vera Wang, Calvin Klein and Ralph Lauren still to weigh in. Tommy Hilfiger also returns to the schedule Friday after taking a several-seasons hiatus. --Narciso Rodriguez: Narciso Rodriguez finds himself once again at the forefront of fashion as the silhouette slims down, after a few seasons when "volume" was the biggest buzzword. Back then -- really mere months ago -- Rodriguez's structured and fitted shape was largely out of step with the zeitgeist, but that's not the case for fall. The new collection featured a lot of refined wool pieces, including several in an ivory and gray print. The best of that set was a trim suit worn with extra-long gray gloves. Rodriguez's coats also were noteworthy, especially a winter white wool coat with a wide waistband, and an emerald green and black coat with bracelet sleeves that mixed silk and nylon. His front row was filled with celebrities who are tried-and-true fans and friends: Jerry and Jessica Seinfeld, Rachel Weisz, Claire Danes and Julianna Margulies. One of the ladies certainly would make a splash at a Hollywood function in the super-sexy gown that closed the show; it had skinny spaghetti straps in the front and a bathing-suit-style crisscross in the back, and was very open and bare on the rest of the bodice. --Derek Lam: The microminis and the corset bodices in Derek Lam's collection were balanced by hearty fabrics and many layers, producing an overall sophisticated look. He also further shrunk the silhouette that has been getting narrower as Fashion Week marches on. And Lam's runways also featured more chic weekend pieces than many of the other designers, who seem to be focusing on day-to-night clothes instead of casual wear. A noteworthy outfit was a dark camel double-breasted blazer, a plaid zippered tunic and riding pants. Lam used a beautiful, rich French blue color for both a tank-strap, corset-style dress with oversized buttons on the front and an asymmetrical wrap tailored dress. --Betsey Johnson: Betsey Johnson turned the fashion world upside down -- twice -- at her charm school-theme runway show. First, she sent out some of the longest skirts, subtle colors and most wearable outfits seen at Fashion Week so far. This from a woman who in seasons past basically staged X-rated peep shows. Then the 60-something Johnson did her signature cartwheel, in high heels, and landed as gracefully as a teenage gymnast. The daytime outfits were the highlight of the collection, especially a navy crocheted sheath with a peplum at the waist, a black wool sheath with tight pleats at the hem, and a cozy hooded mohair anorak in a heathered gray with white stripes. But what's likely to be the most popular items were in the parade of prom-ready dresses. Relax mom, girls will look pretty and proper in the one-shoulder plum organza dress with tiered ruffles on the bottom or the ivory ribbon-embroidered chemise -- it's short but not too short. --Bill Blass: Designers "borrow" ideas from each other all the time, but few of them acknowledge it. Michael Vollbracht, though, is an honest guy and he credited creations by the late Bill Blass, Roy Halston and Norman Norell as the foundations of his new collection. He explained why in a note provided to the audience: "Mr. Norell -- because I fell in love with his sequined mermaids years and years ago when I was a very young designer. Halston ... because his simple philosophy looks so good in this era of over-designing. And of course Blass -- because it is my job to knock him off." But after three years as the creative force at Blass, Vollbracht also showed he is confident enough to tweak the look of those he admired, keeping the overall look modern, something he'd been criticized for not doing a few seasons ago. A short and sassy blue jersey swing dress and a cozy white cashmere one could be worn by a 20-year-old or a 50-year-old, especially with the dark opaque tights that have been all over runways. Coats also had a light touch, though surely a forest-green mink coat, with the texture of corduroy, would keep its wearer warm. The Blass label increasingly is a red-carpet player, too, and there were several choices for Hollywood types. The more daring star might go for a gown with a black leather bodice and floating black chiffon bottom, while a black sequin halter gown with a mermaid hem, one of those Norell touches, would be a safer choice. A fluid champagne-colored silk jersey gown with a plunging V front and back, with pearls embroidered at the waistband, would be the best choice. --Monique Lhuillier: Monique Lhuillier continues to evolve her collection beyond her trademark pretty and ladylike clothes while still keeping everything pretty and ladylike -- there's just an edge to it all now. "This season is all about industrial chic," Lhuillier declared in a statement. Architect Frank Gehry's work was an inspiration, she said, especially "his use of different kinds of metal and steel to create unusual and interesting forms." On a dress, this translated to high-neck dresses and gowns adorned with what looked like gold coins or hammered metal. There also was a lot of structure to the clothes and a slim fit. Schwartz said she was trying to envision the eveningwear on the red carpet. She'd like to see Cate Blanchett either in Lhuillier's rose chiffon gown with a panel of pleats down the front or the emerald green corset gown. "And I'd like to see the daytime looks on myself," she added. --Marc Jacobs: This is what the fashion crowd was waiting for: A definitive sign that the shape of fashion will be different next season. More than any other American designer, Marc Jacobs is the bellwether, and he treated his beyond-capacity crowd Monday night to long, lean clothes that were devoid of gimmicks but still had sparkle, thanks to several sequined pieces. Models, including Shalom Harlow making a rare appearance on the runway, wore 1920s-inspired hats to complement pleated shirtdresses that went below the knee and menswear-style vests and narrow-leg -- though not "skinny" -- pants. There was more than one jumpsuit, and while jumpsuits normally either look dated or are incredibly difficult to pull off, Jacobs' navy one covered with subtle embroidered bows actually worked. (The jury is still out on the decision to put stirrups on the bottoms of most pants.) Eveningwear was either tailored tuxedos, or dropped-waist or draped dresses; a teal strapless velvet gown with an oversized bow at the bustline was his finale piece. Jacobs did tap into some already-emerging trends, including using teal and berry against an overall palette of gray, navy, beige and winter white, as well as mixing textures, almost ensuring that those looks will take off.

Do we really think that the Democrats will be able to keep a message of Republican blame for any recession in the event the Fiscal Cliff comes to pass? I mean both sides agreed to it. It is real spending cuts. Don’t be scared. Start our own talking points that we like to spread to the nation. We purport to be the party of smaller government and cuts to unneeded programs, which heavily populate the government. Why don’t we stick to our guns. They get the tax increases, that we NEVER made permanent, even when we had the chance. We actually get to see spending reduced. And the country goes back on a path to potential fiscal sanity. What conservative in America, given our circumstances would balk at this? We have the solution and it is the sequester. It was negotiated with the president, and now House Republicans need to make it happen. Hold the line. My God, find me a Republican who isn’t low hanging fruit who we will lose because we held to an agreement to cut spending? I live in Nebraska’s third district. Is Adrian Smith going to lose in arguably the most Republican district in America because he held in there to cut spending? They have just as many Democrats left in conservative leaning districts. They have Senators running in 2014 in Alaska, Arkansas, North Carolina, South Dakota, Montana, are those people going to want to run in an environment where we have totally blown our national credit rating? And are those Democrats going to want to stand up for things like Single Payer? I do not think this issue is that big a deal politically for us. This issue is a non-crisis. It is manufactured to make Republicans look bad in the media. What isn’t? Let’s stand for spending cuts. Every time some moron like David Gregory lambastes one of ours, we shoot right back. It could go something like this: Tell them the president negotiated it, we assume in good faith. President Obama expected to be reelected in 2012, he knew this was coming, and we will get what we get. We are not making a decision to raise taxes on the middle-class. That position was taken by the President and 112th Congress. We are now going to live with that agreement. We will not have a fight on the debt ceiling and they will still get to deficit spend. But we should not continue wrong-headed policies like the payroll tax holiday. For Pete’s sake, we have a deficit in the very entitlement programs that FICA and the Medicare tax are supposed to solve. Stealing from those programs would seem to be taking the rug out from underneath future generations, who need to know that money is there for their old age. Also, responsible people know we need to fix the deficit issue. We can do this by cutting defense, which we don’t like, but that is part of the process. We will go off the path to a budget train-wreck when we all agree that Washington is taking in too much. And further, while many of these same Republicans who are our so-called talking heads live in Washington and are friends with many lobbyists, we need to make an issue of the fact that the only place in the country to prosper in the current Administration is the DC area. Why are the five highest income counties in America in Northern Virginia and Maryland? Explain the links between the regulatory hell-hole and the willingness of business to spend more money on creating jobs than jumping through the Byzantine hoops to avoid punishing regulations. If we had deft people in the House of Representatives Republican Conference, we just might make these points. And finally, it is NOT necessary for the liberal media types to accept our talking points. It is only necessary for us to provide them to the thinking public, which for those Mittens fans on this site: Romney did not do effectively at all.

Just in time for fall, Etienne Aigner, the heritage brand that's been respected for its value, quality, and devotion to classic fashion for decades, has undergone a series of changes to revamp the line. Within the past month, Etienne Aigner has launched a completely redesigned website, thanks to One Rockwell, opened up a 3,500-square-foot flagship store in Soho, and worked with creative agency YARD to redefine the "Etienne girl." According to Richard Austin, YARD's creative director, she's a modern-day Isabella Rossellini. In short: a modern, understated, independent woman who's accessible yet aspirational; stylish and admirable. The new two-story store at 65 Greene Street takes the brand's traditional roots and injects it with a dose of the modern. The space is filled with warm overhead lighting with the brand's iconic cordovan leather, brass, and reclaimed wood tastefully decorating the space. Supple leather bags and boots line the walls; jewelry pieces with hints of hardware and stone catch the light; and casual-cool fall apparel items (in the richest fall hues) cover the store. An area toward the back of the store even doubles as a reading room (a nod to the designer's beginnings as a book binder) and solarium, replete with a chalkboard and a selection of books and publications for shoppers to read. Downstairs, an open space is available for more lounging and mingling, and an upcoming public-speaker series. Not only is this shop a must-visit for any lady who adores modern classics, it can also double as a daytime clubhouse (or library) for her, too.

There is one IPO on deck for this week: NewPage Holdings, North America's largest coated paper company. The proposed ticker is (NYSE: NWP). The following are key details from their prospectus: Business Description: We believe that we are the largest coated paper manufacturer in North America, based on production capacity. We operate four integrated pulp and paper mills in Kentucky, Maine, Maryland and Michigan which, together with our distribution centers, are strategically located near attractive end-use markets, such as New York, Chicago and Atlanta. Our mills have a total annual production capacity of approximately 2.2 million short tons of coated paper and approximately 200,000 short tons of market pulp. Coated paper is used primarily in media and marketing applications, including corporate annual reports, high-end advertising brochures, magazines, catalogs and direct mail advertising. Our largest product category is coated freesheet paper, which is used primarily for higher-end applications such as annual reports, brochures, coated labels and magazine covers. The remainder of our coated paper is coated groundwood paper, which is used primarily for catalogs, magazines and textbooks. We also produce uncoated paper, digital printing paper and market pulp, a component used in the manufacturing of paper. We have long-standing relationships with many leading publishers, commercial printers, specialty retail merchandisers and paper merchants. Our key customers include: Hearst Publications, McGraw-Hill Companies, Pearson Education and Time, in publishing; Banta Corporation, QuadGraphics, QuebecorWorld and RR Donnelley, in commercial printing; Williams-Sonoma, in specialty retailing; and xpedx and Unisource Worldwide, which are paper merchants. Underwriters:Goldman Sachs, UBS Investment Bank Offering: Range of $14-$16. The proceeds of the offering will be used to resolve debt arising from recent acquisition and other transactions. Financial Highlights: We expect that our net sales for the second quarter of 2006 will be between $485 million and $495 million compared to $416 million in the second quarter of 2005. We expect coated paper sales volumes will be between 70,000 tons and 75,000 tons higher in the second quarter of 2006 than the 450,000 tons sold in the second quarter of 2005. Our expected increase in coated paper sales volume is largely caused by improved demand in 2006 and recent industry capacity closures. We expect average coated paper prices in the second quarter of 2006 to be between $892 per ton to $895 per ton compared to $877 per ton in the second quarter of 2005. We expect that gross profit for the second quarter of 2006 will be between approximately $56 million and $60 million compared to $30 million for the second quarter of 2005. This expected increase in gross profit compared to the comparable 2005 period is primarily the result of stronger volume, higher sales prices and productivity improvement initiatives, partially offset by higher costs resulting from increased energy and wood costs. We expect that selling, general and administrative expense will be between $23 million and $24 million for the second quarter of 2006 compared to $25 million for the second quarter of 2005, and that depreciation and amortization expense for the second quarter of 2006 will be approximately the same as the first quarter of 2006. Select Competitors:International Paper Company (NYSE:IP), Sappi Limited (NYSE:SPP), Stora Enso Oyj (SEO) and UPM-Kymmene Corporation (UPM)

TRANSCRIPT SPONSOR Click to enlarge Avaya Inc. (NYSE:AV) F2Q07 Earnings Call April 25, 2007 5:00 pm ET Executives Matt Booher - VP of IR Lou D'Ambrosio - President and CEO Caroline Dorsa - CFO Mike Thurk - COO Analysts Samuel Wilson - JMP Securities Ian Conn - J.P. Morgan Inder Singh - Prudential Michael Genovese - Citigroup John Marchetti - Morgan Stanley Tavis McCourt - Morgan Keegan Manny Recarey - Kaufman Brothers Rob Goldman - Jefferies Persil Lal - Merrill Lynch Presentation Operator Good afternoon. I would like to welcome everyone to the Avaya Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions). I would now like to turn the call over to Mr. Matt Booher, Vice President of Finance and Investor Relations. Thank you sir, you may begin your conference. Matt Booher Thank you and welcome to Avaya's Fiscal Second Quarter 2007 Earnings Conference Call. I am joined on the call today by Lou D'Ambrosio, our President and Chief Executive Officer; Mike Thurk, our Chief Operating Officer; and Caroline Dorsa, our Chief Financial Officer. This call is open to the media and is being webcast live with the replay available via the phone and the web. Our earnings release is on FirstCall and PRNewswire. It's also available on our website at www.avaya.com/investors, along with slides that summarize our results. Our focus today will be on continuing operations as reported on a US GAAP basis. We will also be highlighting some significant items that are included in our GAAP results. Certain of these measures are non-GAAP financial measures, which have been provided in an effort to provide investors with additional information. All non-GAAP financial measures have been reconciled to their most directly comparable GAAP measure in accordance with SEC rules. The reconciliation of these adjustments are available in today's slides, which are currently available on our website and will be filed with the SEC after this call. Financial results in the press release and slides are unaudited. Our remarks may contain forward-looking statements regarding the company's outlook and the company's expected performance. Forward-looking statements represent our judgment as to what may occur in the future and are based on current expectations, forecasts, and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. Additional information regarding these risks and uncertainties may be found in our filings with the Securities and Exchange Commission, and in particular, our fiscal 2006 Form 10-K, and our first quarter 2007 Form 10-Q as well as in our earnings release which we filed on Form 8-K earlier today. Avaya disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Unauthorized recording of this conference call is not permitted. Now, at this time, I'm pleased to introduce Lou D'Ambrosio. TRANSCRIPT SPONSOR Do you get frustrated during earnings season? Have you had trades go south because of bad earnings dates? We know what it's like. We’ve been there. We’re Wall Street Horizon and we work with some of the largest firms on Wall Street. Founded by former Fidelity Investments executives, we understand the power of trading on good information and the pain and suffering of trading otherwise. We obsess about earnings and economic events calendars so you don’t have to. Accurate. On time. Guaranteed. Let us help. Get Smart Get Wall Street Horizon. View our Free 30-day trial for investment professionals To sponsor a Seeking Alpha transcript click here. Click to enlarge Lou D'Ambrosio Great. Thanks, Matt and thanks to all of you for joining us today. As Matt mentioned with me are Caroline Dorsa, our CFO; and Mike Thurk, our Chief Operating Officer. I want to welcome Caroline to our first earnings call with Avaya. As most of you know Caroline joined us in February from Merck and Company and she has just been a great addition to our leadership team. As a side note, that's a great day for Caroline to be having our first earnings call with Avaya as today is Caroline's birthday, so happy birthday Caroline. Let's get started and get running to the numbers. We made good progress this quarter. Non-GAAP operating income was up 25%. Non-GAAP EPS was $0.14 versus $0.11 a year ago, and our non-GAAP operating margin rose to 7%. Also importantly, we had a good top line performance in key strategic areas, and importantly it is the areas that we have targeted for growth and investment. Let me give you a couple of examples. IP product revenues grew 28%. In fact our revenue composition this quarter was 68% IP versus 32% TDM. This compares to a year ago when the IP to TDM ratio was 56% to 44%. So, we have had a 12 point growth in IP revenue composition in one year. Also in the quarter our application sales growth was up 15%. Our overall product revenues were up 8%. US direct product sales and Asia Pacific were up double digit, professional services revenues grew by over 20%. We also improved across an expense profile. SG&A expense declined and OpEx as a percentage of revenue improved. And in building value, bottom-line growth had to translate to strong cash flow. I am pleased to say then in Q2 we generated $205 million in operating cash flow. Now, there are also a couple of areas that need further improvement. Like supply chain and our operations in Germany. And we're working to bring the speed, the focus, the intensity to them that we have demonstrated and achieved in other parts of the business. In our supply chain, as an example, while we have made improvements to our supply and warehousing situation, it is still not where it needs to be and it has impacted sales force productivity. But we are taking actions. One of them includes appointing a new leader Francis Scricco, previously the leader of our services business to lead our end-to-end supply chain and procurement for the corporation. Fran has responsibility and accountability to take these processes and make them world class. As you may know, prior to joining Avaya three years ago, Fran was the Chief Executive Officer of Arrow Electronics, a multi-billion dollar technology distributor, whose business model was determined by the success of its value chain. Fran also spent many years at GE running businesses with supply chain leadership responsibilities. Like wise in Germany, we have brought a new leadership, and announced Juergen Gallmann as President of Avaya Germany. Prior to joining Avaya, Juergen was President of Microsoft Deutschland. And before Microsoft he led IBM's software business for Central Europe. Juergen is quickly moving to assess the situation and make the changes to invigorate growth in Germany. This won't be an overnight fix, but we are confident it will get on the right track. So, in net, it was a solid quarter. We demonstrated strong performance in key strategic areas, double-digit growth in applications, 28% growth in IP telephony, 20% growth in professional services, effective costs and expense management and very strong cash flow. Likewise we have continued our intense focus on the areas we need to improve. During the past couple of calls, we have discussed our three priorities for our company; strategy, execution and culture. What I would like to do now is just wrap up this section with a few sentences about each. In terms of strategy, we are making very good progress in moving up the value stack and delivering communications applications. We closed on our Ubiquity acquisition and announced a core set of differentiating software capabilities in the area of communication enabled business processes. This both expands our addressable market and enables customers to dramatically improve the cycle time of their core business processes. As a case in point, one of our customers is using our software to condense cycle time for part of its inventory management process from two hours to two minutes. Regarding execution Mike Thurk and his team are taking action to get our company into fighting shape, aligning the organization, accelerating decision-making and driving accountability. This is not a one or two quarter process, it's ongoing, but clearly we are going in the right direction. And then culture, as we have discussed in previous calls we have brought in some great talent and have a very strong team now. And importantly, we have the right team to execute the right strategy. Our team will be measured on a clear set of metrics; metrics that drives shareholder value; a case in point. This year we changed our long-term compensation plan, so that a significant component of the leadership team's compensation is tied directly to shareholder return versus a peer group of technology companies. With that section, let me now turn it over to Caroline to review our financial results in more detail. Caroline. Caroline Dorsa Thanks Lou, and thanks for those good wishes and good afternoon to everyone. As Lou noted, this is my first earnings call at Avaya and I am very pleased to be here. I want to add that I look forward to speaking and meeting with many of you in this and future quarters. I'll start today by taking you through our income statement in more detail. Then I'll discuss segment performance, our restructuring actions, cash flow, and our balance sheet. Unless indicated otherwise, I'll be providing comparisons on a year-over-year basis. I will be discussing our results on a US GAAP basis as well as on a non-GAAP basis. Our Q2 2007 non-GAAP results exclude restructuring charges of $10 million. Our Q2 '06 non-GAAP results exclude restructuring charges of $20 million. We provide reconciliation of non-GAAP to GAAP results in our press release and accompanying presentation, both of which as Matt mentioned are posted on our website. So to start, let me echo Lou's comment that we had a good quarter and demonstrated strong growth in key areas and effective cost management to deliver solid bottom-line results. Non-GAAP operating income rose 25% in the second quarter of 2007 to $91 million from $73 million a year ago. Our non-GAAP operating margin was 7% versus 5.9% last year. You can see that on the last page of our financial disclosure detached to the release where we reconcile GAAP and non-GAAP measures. Non-GAAP net income was $64 million or $0.14 per diluted share. This compares to $50 million or $0.11 per share in Q2 last year. GAAP operating income was $81 million, and GAAP operating margin was 6.3%. GAAP net income and EPS were $57 million or $0.13 per diluted share. The Q2 '07 GAAP and non-GAAP EPS numbers are both based on 457 million diluted shares. Now let me talk about the major drivers of our performance, turning to the first page of our financial disclosures. Q2 revenues were $1.294 billion, an increase of $56 million or 4.5%. On page 10, we show the supplemental revenue table, so let me point out a few things from them. Sales of products rose 8%. We had mid-teens growth in applications revenues and about 6% growth in sales of large communication systems. Services revenue was up year-on-year as well by 3.5%. Professional services part of that category grew by 20%. We also had continued good performance in our contract maintenance space, which was up modestly year-over-year on both the US and the global basis. Rental and managed services revenue decline by 4.6%. Relatively high percentages of rental contracts in Germany come up for renewal during our fiscal Q2. So, there was pressure on revenues from both the pricing and the renewal rate perceptive. Almost all of this impact is in our small business line in Germany, so you will see the negative impact of the German rental business renewal carried through to both the Germany region line on page 10 as well as the small business product line in our Global Communication Solution business. Looking at revenues on a geographic basis, US sales were up 4%. We had good performance from our direct sales team which generated a mid-teens increase in products sales. Application sales were particularly strong, up in the mid-teens. On the services side we are very pleased with growth in professional services in the US which drove professional services growth globally and we encouraged by the modest growth we achieved in contract maintenance versus the year ago period. While we are encouraged by our Q2 results in the US, we are watchful of what the second half of the year will be like as other technology companies have signaled some softness in the IT spending environment. We do of course expect the year to end with a seasonally strong Q4 in terms of the US product sales. Outside the US, revenues grew 6% with products sales rising 10%. Asia Pacific had a good quarter with revenues up 12% reflecting in part the warehouse catch up from Q1. Sales in America's, x-US were up 8%. Revenues in the EMEA region increased by 3%, with EMEA revenues excluding Germany growing 9%. Overall EMEA product sales were up 9%. FX had a positive impact on revenues of about $32 million in the quarter, virtually all in Europe and had a negligible impact on earnings. Let's now turn to revenue by channels. Direct products sales were up 11% driven by a mid teens increases in the US as well as strong performance in Asia-Pacific. Indirect product sales were up in the mid-single digits with EMEA largely driving the increase. And I'd note that US channel inventories are down one day compared to last quarter. So that covers revenues, I'll now move on to gross margins. Gross margin was 46.2% in Q2 of '07 compared to 46.7% a year ago. Gross margin on sales of products was 52.9% versus 53.6% in the year ago period. Discounts, in fact, were relatively flat with the prior quarter and were slightly better than the year ago period. Product mix had a favorable impact. There were, however, cost and expenses associated with the warehouse issue that Lou mentioned earlier that negatively impacted product gross margin. Services gross margin was up about 1 percentage point, increasing to 36.3%. This reflects the cost improvements we had implemented over the past year. Rental and managed services gross margin declined to 51.4%. As mentioned this reflects revenue pressure in the rental business and delay in achieving cost reductions, both of which are primarily in Germany. Looking at our operating expenses, operating expenses as a percentage of revenue was 40% versus 42.4% a year ago. This includes restructuring related expenses. If we exclude those items, operating expense as a percentage of revenue was 39.2% this quarter versus 40.8% a year ago. The improvement here was driven by higher volumes and also by lower SG&A spending. As pointed out, that SG&A expense $393 million in Q2 '07 compared to $399 million a year ago. R&D spending was a $114 million or 8.8% of revenue, compared with a $106 million or 8.6% in the year ago period. I should point here that we completed the Ubiquity transaction late in Q2 and had only about one month of their financial results in our P&L. In Q3, with the full quarter of Ubiquity, we expect R&D to be at or slightly above 9% inline with our long term target. The integration of Ubiquity does however provide us with potential cost synergies and we continue to look for cost reduction opportunity within our existing organization. Income tax expense in the quarter was $31 million resulting in an effective tax rate of 34.7%. We recall that we had some one time favorable items that caused the Q1 tax rate to be lower than a normal run rate. I'll now move on to discuss restructuring. During the quarter, we incurred a net charge of about $10 million related to headcount reductions and office closures and consolidations in the EMEA region. About 75 positions were eliminated across various business functions. These actions are part of our previously disclosed plan to optimize our cost structure and improve our skill base. As of March 31, we have reduced headcount by approximately 800 positions over the past three quarters. I'd now like to discuss in more detail our business segment results; beginning with Global Communications Solutions or GCS. GCS revenues increased 6% and segment operating income rose by $6 million to $38 million. The increase in revenues was driven by higher application sales which were up 15% and a 6% increase in sales of large communications systems. Partially offsetting this growth was an 11% decline in sales of small communication systems, which as we've said reflects primarily the situation in Germany. For those of you who track the hardware-software mix metric that we've talked about in GCS before, the mix this quarter was software as 38% of product sales compared to 36% last quarter and 34% in Q2 '06. The segment's gross margin decreased. Increased product sales volumes and favorable mixture were offset by cost related to the warehousing issue and lower margins on the product portion of the German rental contracts. As mentioned, discounts were relatively flat with the prior quarter and were slightly better than the year ago period. SG&A spending was relatively flat year-over-year and R&D spending increased. As I mentioned there is only one month of Ubiquity's SG&A and R&D in our second quarter results. We are managing the cost impact of Ubiquity while maintaining funding of our priorities to ensure the success of this acquisition. Looking at Avaya Global Services or AGS; AGS revenues rose by 3.3% and segment operating income rose 37% to $56 million. Product support service revenue was up 3%, contract based maintenance revenues, which are included in this category increased year-over-year, and we are encouraged by the more consistent performance and improvement we are achieving in our maintenance business. This is the key focus area, an important driver of cash flow for the company. Consulting and systems integration revenues increased 9%, driven by a 20% growth in professional services demonstrating good performance in this strategic growth business for Avaya. Global Managed Services revenue increased 1% year-over-year. The AGS segment gross margin improved, reflecting headcount reductions over the past year. Expense management also improved significantly, as AGS operating expenses declined on an absolute dollar basis and as a percent of revenue. So that covers our business segments. I'd like now to turn briefly to cash flow. Operating cash flow for the quarter was a strong $205 million. That's compared with $169 million in Q2 of last year and $17 million in Q1 of this year. The increase in operating cash flow in Q2 over Q1 reflects in part an improvement in working capital and the same is true when you look at year-over-year performance. But also keep in mind that the company made its annual employee incentive payment in Q1 of this year, as we discussed in last quarter's call. Moving on to our balance sheet, which remained strong, our cash position at March 31 was $829 million with no debt. Major uses of cash for the quarter included the repurchase of 7.3 million shares for total of $94 million. We've now completed our prior share buyback authorization and have begun to buy under the new repurchase plan that was approved by the Broad in February of this year. We also of course completed the Ubiquity transaction for a net cash cost of $146 million. I think it's worth noting here that with our strong cash position demonstrated cash generating ability. We have the ability to build value by returning cash to shareholders through repurchases and to build value by investing in our business. Capital expenditures and capitalized software for the quarter combined with $48 million. Depreciation and amortization during the quarter was $73 million. Inventory turns for the quarter were at 9.8 times, up from 9.3 times last quarter. Days of sales outstanding were at 62 days versus 60 days last quarter. So, that's our Q2 financial review. All in all, a solid quarter, growth in key areas, good cost management, improved profitability. Before I hand it over to Mike, I want to say again that it's great to here at Avaya and to partner with Lou and Mike and our leadership teams as we work together to drive profitable growth. Avaya has tremendous assets, and a very strong balance sheet, and we clearly have the opportunity to further build value for shareholders. Mike. Mike Thurk Thanks Caroline and welcome aboard. I would like to briefly update you on the major transformational initiatives underway as we drive for revenue growth and operating efficiency. Let's start with restructuring. Our primary goals here are to more effectively allocate resources to improve returns, and to reinvest the cost savings to enhance our skill base and support our growth initiatives. We've come a long way in our overall restructuring plan, optimizing resources, streamlining processes and reducing headcount by 800 over the past three quarters. We can see this progress reflected in our results. With a $56 million increase in revenues year-over-year, SG&A expense was lower by $6 million. For the first half, SG&A is about flat, and revenues are about $87 million higher. We are generally pleased with the pace and scale of our progress. However we are facing challenging environments in Germany. Our restructuring effort there has been delayed, and our rental business is under pressure from price and renewal rate perspectives. Our new leader in Germany, Juergen has developed a plan for putting the business back on track for the long-term. This includes driving for growth and improving our cost structure. This requires close cooperation of course with the works council's. Juergen and his team are moving quickly, but we may continue to see softness in Germany until the new management initiatives are fully in place. Let's move next to the supply chain issue. We do not have any significant customer impacting shortages this quarter. However, we did continue to incur higher costs with our warehouser with whom we all only recently began doing business. These costs impacted gross margin that was mentioned this quarter. And as Lou mentioned we have new leadership now in place for our supplied chain efforts. We believe there is still much opportunity for streamlining this part of our value chain over the coming year. So far, I've basically talked about what we are doing on the cost and expense side. Let me now shift briefly to discuss our growth initiatives. We continue to build on our leadership position in IP telephony. During the quarter, IP revenues rose 28%. We shipped over 1 million IP lines for the fourth consecutive quarter. IP based offers now account for 68% of product sales while TDM is the remainder at 32%. With a strong focus on applications, application sales were up 15% this quarter compared to Q2 '06. In fact a new sales focus is now in place with a specialized team and a new leader to drive application sales. I would like to touch now on some advances we are making in our product portfolio. With a good success in hitting our delivery dates for new products on schedule. This quarter we released our new Communications Manager Platform version 4 as well as a new highly competitive IP Office platform. We are investing in these solutions to drive growth today for evolving our platform into new areas. As Lou noted, we launched an important new solutions portfolio, Communication Enabled Business Process or CEBP solutions. It includes our new Avaya Communications Process Manager Software that orchestrates activities across multiple modes and applications when a business event occurs. Many other exciting new offers will emerge on the CEBP solutions set as we integrate Ubiquity and work with our many ISP's on new applications. We'll move quickly over the coming quarters to fill out this portfolio. Ubiquity is an example of how we are driving for growth by selectively allocating capital to accusations that leverage our technology leadership. Organic growth is also a priority, for example professional services, software and applications consulting and integration is essential to our growth strategy. We continue to be pleased with the solid growth trends we are achieving in this area. The Asia-Pac region is another higher growth opportunity. Sales were up 12% year-over-year and we are devoting more resources to increase our presence there. In addition, we are actively exploring ways to leverage and expand our presence in India, particularly in the sales, support, services, and R&D areas. We seeing opportunity to extend our platform work, improve time to market, and increase efficiency by leveraging more offshore sites and combing those efforts with our global and US centers. So, in summary, nice progress in key strategic areas of growth, effective cost management and intense focus on the areas that warrants improvement. In addition, we are looking forward to seeing all of you at our upcoming Analyst Day meeting which will be held on May 31. Let me now turn it back over to Matt Matt Booher Operator, we are now ready for the question-and-answer session please. Question-and-Answer Session Operator (Operator Instruction). Your first question comes from Samuel Wilson with JMP Securities. Samuel Wilson - JMP Securities I hate to set this precedence, but I'm going to ask two questions right of the batter, one question in two parts. Just real quickly, first, product accelerated it was 8% year-over-year growth versus 5% last quarter. Do you think you are sort of at the beginning point of a trend here on a re-acceleration on the product side? And second, can you just give us a sense, it sounded like discount levels didn't go up. Was the pricing environment any more or different than it has been in the previous quarters? Thank you. Lou D'Ambrosio Let me start and then let Mike and Caroline to begin. The discounting part of your question to start Sam, I think the team did a very nice job here in effective discount management throughout the quarter. But fairly it's a competitive environment out there. The set of disciplines and metrics that we put in place to effectively manage discipline I think is clearly paying dividends and I would say that we're pleased with the discount management which was essentially flat versus previous quarter. So, we are pleased with where we are in that result. In terms of the growth, we are not going to comment in terms of forward-looking and where we are, etcetera and Mike or Caroline any additional comments you want to add on that. Mike Thurk Just a comment, we've talked about the strong applications growth this quarter and we've made some changes in the sales force, kind of focused in that area. So clearly we are trying to set ourselves up for an appropriate investment in that area to help the applications grow. I think on a balance, we look at Germany as one of the areas of concern, but all-in-all the trends that we've just seen, they were hopeful. They are hopeful. Lou D'Ambrosio The other thing I would say is while we look at product growth for sure we actually spend more time in looking at the sub components of it. So, we'll look at IP telephony applications etcetera, as you really kind of partition the business into its relevant parts, given the scope of the portfolio. As we set the area, areas like applications, areas like TDM, areas like professional services that we have been very explicit in terms of our growth areas. Frankly we are very encouraged by those signs. Matt Booher Next question please. Operator Your next question comes from Ehud Gelblum with J.P. Morgan. Ian Conn - J.P. Morgan Hi, this is [Ian Conn] for Ehud. Maybe I could also get two questions. Matt Booher One question, two parts. Ian Conn - J.P. Morgan One question two parts, that's right. A question and a clarification, actually is traditional from this office. On growth, I just want to clarify, you had 1238 in revenue in Q2 '06 but you had 30 to 35 kind of revenue, so should you select, some what like a 1270 number. You are just closed to 1294 and you said there is no disruption from warehousing. But I think you had a 30 plus million positive impact from Forex. So, I mean the question is is revenue really up for the year in an apples-to-apple sense. And then also on the OpEx performance, which was just fantastic. How were you be able to retch down OpEx almost, in what appears to be the middle of the quarter, given that on the Ubiquity announcement, you said for instance R&D in a range of 9.4% of revenue and I think everybody, at least certainly us expected, given FICA renewals this quarter and Ubiquity SG&A would have come in a slightly higher than you posted as well? Mike Thurk I'll take the second one first and circle back. On the R&D item, we have across the board throughout the quarter targeted very, very aggressive cost actions. And particularly the cost actions that we have gone after have been ones that have been not related to sales or revenue generation or in fact even R&D deliveries. We have gone after a lot of associated cost that would be considered for example, indirect spending a lot of good cost management and a lot of lines that are unrelated to specific headcount. And frankly, we are very pleased with where we ended up at the end of the quarter on our spend. As you saw however as we go forward into the next couple of quarters, we expect the full allocation of Ubiquity to come online and to get back into roughly the range that we discussed. With that said, we will continue to go after all cost opportunities that we can find in Q3 and of course in Q4, these are not one quarter actions. We look for efficiencies where we can find them. If we went back to the prior question, maybe on the revenue from last year, we have very, very different issues occurring between the two years. One was the issue of actually not having a supply in one quarter and the other, which was last year, we did not have the equipment to actually ship. And it's hard to assess as we said in that call, try to assess the exact nature of what the business would do after that quarter. This quarter we had a different issues, which was or in the last couple quarters, we had a different issue, which has been the warehousing issue. It was not a shortage of product, we had equipment in houses. It's really not apples-to-apples comparison year-over-year, in the sense of those two issues the way you described it. Caroline Dorsa We did mention that Asia-Pacific benefited from some of that in Q2. Mike Thurk Yes, and Asia-Pacific did benefit in Q2 from the warehouse issue in Q1. Matt Booher Next question please. Operator Your next question comes from Inder Singh with Prudential. Inder Singh - Prudential Yes. Thanks very much. I wanted to just look beyond sort of the current quarter or the next quarter Lou and just to ask you for an update and may be direction on where you are going with the software strategy? How far along you think you are? Where do you think you need to go? Whether organic growth is really the main part of that strategy or whether you see a few more acquisitions here and there, and if you could comment on your philosophy in terms of the size of the deals if there are any that you could foresee? Just may be enlighten us on where you are in the software strategy because that seems to be a key part of your future growth and profit growth as well? Lou D'Ambrosio Sure Inder, I'd be glad to. If you would speak with our customers and you really get into how they are valuing technology today and going forward. What's clear is that as communications becomes fully embedded into your business processes, the attribution of value to communications becomes that much stronger. As it turn out, that also plays extremely well to our strengths around software, and what we're basically doing Inder is our strategy is very clearly to go from the IP telephony stack and above. As we speak today, never say never, but we do not have intentions of going deeper down into other layers. But it's the IP telephony stack and above into the applications. Let me give you some examples. So, if you think about it right now, you have IP telephony, on top of that you have contact center, messaging, mobility, conferencing, all as software layers. What Ubiquity did was Ubiquity in many ways provides, in this industry we would call kind of a container, to kind of hub integrate those sets of application and to accelerate the decomposition of them into a server based architecture. As we are with customers all the time, they are deriving frankly significant value from this and as we look at our differentiated strengths versus our competitors, I think it would be a very fair assessment to say that we are much further along in software architecture of our business than are others and we are going to continue to fill that portfolio with given our open API strategy or Linux based solution with different software layers. That will be done, Inder both organically and frankly we are very open to inorganic place as well where appropriate. As evidenced by what we did with Ubiquity, which is I would describe as the platform and what we did with Traverse, and what I would describe as an application. We are feeling actually pretty good and have a nice roadmap set out in terms of the next set of steps to continue to execute on that strategy organically, and frankly where the opportunity presents itself inorganically as well. So, last point I would bring out on that would be our [data] connect partnership. We unlike many of our competitors have over 4000 independent software vendors that are part of our community, that are writing their software to our software platform. So, the combination of having the platform, having kind of core part of the application and then having this very large eco system writing applications to it is truly at the epicenter of our strategy, an area that it will be reasonable for you to look at us to continue to invest in both our organically and inorganically. Unfortunately I can't comment on the apatite or the size of the deals. We will certainly have that as kind of an important part of our decisions here, shareholder value and that's all I would like to comment in terms of sizing up the apatite for inorganic place. Matt Booher Next question please? Operator Your next question comes from Michael Genovese with Citigroup. Michael Genovese - Citigroup Great, thanks a lot. So Lou, you gave us the metrics that IP revenues grew to 68% from 56% a year ago. Your IPT systems are up 28%. But still the overall revenue growth is only about 5%. So, how far do we have to look out to see a meaningful change do you think in 5% growth rate and, to ask in other way, what is dragging on the business, for the time being? Lou D'Ambrosio Well the TDM, yes, it's a fair question, when you look at the split between IP and TDM that is the product composition split. So, when you have the 28%, it's the 28% growth of IP revenue year-over-year. The TDM business is declining and that is kind of both, as there were some substitutions happening as well as the decline in Germany. So, those are the areas of the decline. So, you have IP product growing at 28%, you have a slower growth in that in services and then you have the decline in TDM. And that's when you kind of add up all the maths and proportion them to the size of the business, you get to the total growth of the company. Matt Booher Next question please. Operator Your next question comes from John Marchetti with Morgan Stanley. John Marchetti - Morgan Stanley Hi thanks, just a quick question if I can. I'd like to follow-up on when your were talking about the applications being sort of where are you going forward and you mentioned a numbers of developers you have. As we look out, over, say the next 12, 24 months how do you stack up if this becomes a developer war as Microsoft and Nortel's alliance comes together and we see them sort of approaching the voice side more from the Desktop front? Lou D'Ambrosio Two of our larger partners happen to be companies who have very strong relationship on the desktop enterprise and those would Microsoft and IBM. In fact if you would look at our delivery schedule in terms of products with Microsoft its quite good, its quite aggressive and I think if you were to talk to Microsoft they would also talk very highly about the Avaya partnership and the way in which teams are working to deliver offers to the market place. So, there is significant interoperability between our solution and Microsoft solution and we are very pleased with frankly how that partnership continues to expand. And likewise we have a very strong partnership with IBM. So, as the two dominant players in the desktop arena of Microsoft and IBM continue to expand the Unified Communication, Avaya is very well positioned in the alliances it has established with both. So for example; today from either Microsoft desktop or from IBM desktop you could click to get into the feature functionality set of the Avaya Communication Manager. So that interoperability is some thing that's very important to us and I think we plan to continue to expand partnerships with both organizations. Matt Booher Next question please. Operator Your next question comes from Tavis McCourt with Morgan Keegan. Tavis McCourt - Morgan Keegan Good afternoon. Want to delve a little bit into the direct-indirect mix in the quarter. I think this is the first quarter that direct sales growth outgrew indirect in quite a while. Is that simply because you are seeing a little stronger demand trends from some of your larger customers than the smaller customers or is that something proactively that you guys have done? Mike Thurk I would say it's not a proactive action on our part but there has been a bit of a lumpiness in particular on the direct side due to our supply chain issues, actually if you look at it kind of over the last year or so in particular our direct sales force depends highly on that chain to be very, very effective where as the indirect, it's a little bit buffered from it. So you get the opportunity really to, when we get this thing sorted out I would expect you would start to see the lumpiness go out of the equation. Lou D'Ambrosio Yeah, I just think this is larger than to that, there is no express metric to try to increase one as a greater composition versus the other. Obviously our full intention is to have both direct and indirect show strong growth rates. Mike Thurk Just one last point on that as well as you noticed its where the Asia-Pac region has been showing good growth for a while and that is heavily in direct for us, not exclusively but heavily. So that helps pull that number a little bit higher than that might be obvious to the naked eye. Matt Booher Next question please. Operator Your next question comes from Manny Recarey with Kaufman Brothers. Manny Recarey - Kaufman Brothers Thanks. It is a follow-up on the direct sales and your focus on some of the applications. As you move forward and you are selling more and more of the applications is the direct sales going to grow in importance? How important is the indirect channel going to be? You got to do a lot more training for the indirect? Lou D'Ambrosio It's a combination. We have software application specialist whose role is to work, partnering cooperatively with our partners in bringing solutions to the marketplace as well as specialized application teams selling directly to end-users. There will be for sure, continued partner enabled, and in fact we have one of our partner's conferences coming up and a large part of that will be around continued education and skill building and enablement in bringing application sales to the marketplace. And in addition, we are working very closely with our distributors. We are recruiting new types of resellers as well as it moves more to an application focus. So, direct, indirect both training and expansion of the distribution channels to achieve the key strategic trust of the company of moving more and more into the communications applications business. Matt Booher Next question please? Operator You next question comes from Bill Choi with Jefferies. Rob Goldman - Jefferies Hi, good afternoon. This is Rob Goldman in for Bill. Mike Thurk Hi Rob. Rob Goldman - Jefferies I had a few quick questions. First of all, regarding the employee, the headcount reduction, I know you mentioned 800 additions over the last three quarters. Just to clarify, is that only 500 remaining out of the 1300. And my second would be, you also mentioned that, you are going to continue to see some softness in Germany until the new initiatives are in place? Is that more of a 2008 thing, we should expect? Matt Booher Could you repeat the last part of your second question, please? Mike Thurk We lost him. We were just trying to get the last question, sorry for the quick delay. On the reductions, yes, the 800 is a subset of the 1300 target that we discussed earlier. We have and as you might guess a focus for that reduction and working through that has been in Germany, and it was important to get our new German head, Juergen in place, so that we could get that plan exactly right. So, there is still work to do on the 1300 that was discussed on our prior calls. With respect to the softness in Germany, it's very hard to predict the future of the German market at this point. We have seen softness there and we reflected that in our comments today. But, we are going to work very hard to mitigate any future softness of course, but, the state of the German market is hard to predict of course. Matt Booher Next question please. Operator Your next question comes from Tal Liani with Merrill Lynch. Persil Lal - Merrill Lynch Hi. This is [Persil Lal] calling for Tal Liani. My question is on service revenue. On a year-over-year basis service revenue grew around 5%, but pretty flat over last few quarters and margin came down this quarter? What does Avaya plan to do to grow service revenues? Or what does the Avaya think they would need to monetize that business if their growth continues to be flat? And how high is the priority to work on that segment over the overall restriction plan? Lou D'Ambrosio Well, I mean the services is a core element to our overall business strategy. I mean it represents a large portion of revenue, a large piece of the profit, a large piece of the cash flow. So, make no mistake about it. We are intentionally focused on the services business. The way we see the services business play out is continued accelerated growth in the professional services business. Professional services business fits very closely in line with the broader strategy that we laid out on moving up the application stack. As you move up the application stack, customers are looking for trusted buyers to help sthem implement the applications as they embed it into the processes. The track record that we put on over last few quarters in terms of growth and professional services, I think is a proof point through that. Likewise we are going to continue to work to continue to reinvent the maintenance offerings that we bring to that marketplace. And I think the stabilization that you've seen maintenance is a result of that work also. So, services overall is very high on the priority list for the company. And frankly in our segment, we are one the few companies which do offer a fully integrated solution to the customers. Customers do not have the kind of piece part to solution from different providers but at the single point of accountability in the Avaya offer. Caroline Dorsa And I'd just add that in terms of overall and cash flow generation as Lou mentioned, as I mentioned earlier we have done a lot relative to the cost management and services business and actually that segment gross margin actually improved on a year-over-year basis again because of our tight focus on expenses in running that business. Matt Booher Next question please. Operator Your next question comes from Tavis McCourt with Morgan Keegan. Tavis McCourt - Morgan Keegan Hey, just a follow-up, wondered if you could quantify at all, how much the warehouse issues impacted gross margin if not exactly, at least some range? Caroline Dorsa No we are not quantifying the gross margin impact specifically to the warehouse issues. I pointed that out just to help you understand why we didn't see on gross margin move in a positive direction but as Mike mentioned we are working on those issues going forward but no specific quantification I think is needed relative to letting the gross margin sort of speak for themselves where they are right now. Operator At this time there are no further questions. Lou D'Ambrosio I would like to thank everyone for joining our fiscal second quarter 2007 call and we'll look forward to updating you on our third quarter progress in 90 days. Thank you. Operator Thank you for joining today's conference call. This call will be available for replay beginning at 6 o'clock pm Eastern Time today through 11:59 pm Eastern Time on May 2nd, 2007. The conference ID for the replay is 1950002. The phone number to access the replay is 800-642-1687 or 706-645-9291. This concludes the conference call. You may now disconnect. TRANSCRIPT SPONSOR Do you get frustrated during earnings season? Have you had trades go south because of bad earnings dates? We know what it's like. We’ve been there. We’re Wall Street Horizon and we work with some of the largest firms on Wall Street. Founded by former Fidelity Investments executives, we understand the power of trading on good information and the pain and suffering of trading otherwise. We obsess about earnings and economic events calendars so you don’t have to. Accurate. On time. Guaranteed. Let us help. Get Smart Get Wall Street Horizon. View our Free 30-day trial for investment professionals To sponsor a Seeking Alpha transcript click here. 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Private health care providers cannot sue to force states to raise their Medicaid reimbursement rates to keep up with rising medical costs, the Supreme Court ruled Tuesday. In a 5-4 decision the broke across ideological lines, the justices said medical companies have no private right to enforce federal Medicaid funding laws against states if Congress has not created such a right. The ruling is a blow to many doctors and health care companies that complain Medicaid reimbursement rates are so low, they often lose money seeing patients participating in the program. They consider lawsuits such as the 2009 case against Idaho their only option to make states comply with federal law and offer adequate coverage. The lawsuit claimed Idaho was unfairly keeping Medicaid reimbursement rates at 2006 levels despite studies showing that the cost of providing care had gone up. Lower courts agreed and the increased reimbursements cost Idaho an additional $12 million in 2013. But the Supreme Court sided with state officials, saying it's up to the federal agencies that oversee Medicaid to decide whether a state is in compliance with reimbursement rules. Writing for the court in Monday's decision, Justice Antonin Scalia said the Constitution's Supremacy Clause makes federal law supreme over state law, but "it was not understood as conferring a private right of action." Scalia also said the medical providers have no right to seek relief under Idaho law. Joining Scalia for most of his opinion were Chief Justice John Roberts and Justices Clarence Thomas, Stephen Breyer and Samuel Alito. In dissent, Justice Sonia Sotomayor said there has been a long history of federal courts allowing private parties to stop unconstitutional government action. She said nothing in the Medicaid Act indicates that Congress meant to prevent enforcement in private lawsuits. Sotomayor's dissent was joined by Justices Anthony Kennedy, Ruth Bader Ginsburg and Elena Kagan. Medicaid, the federal health insurance program for the poor that is administered by the states, covers more than 60 million people nationwide. The medical companies argued that going to court was the only way to push Idaho to comply with Medicaid laws since federal officials had taken no action. Idaho officials said the suit interfered with its ability to fund Medicaid programs within budgetary limits. They also say the action frustrates Congress' goal of allowing states flexibility in administering Medicaid programs. Twenty-seven states filed legal papers supporting Idaho. The case involved five centers that provided care to developmentally disabled children and adults. They argued that Idaho was improperly keeping reimbursement rates at 2006 levels and ignoring rising costs. Federal Medicaid law says states must set procedures for determining reimbursement rates. Those rates must be consistent with efficiency, economy and quality of care to encourage providers to offer services.

Writing in The Wall Street Journal Friday, Scott Rasmussen — perhaps the most accurate pollster in America — reported that President Obama's job approval rating has now slipped below that of President Bush back in March 2001. Now, this is to be expected. Mr. Obama inherited a terrible economic mess that will take years to correct. But Americans are not a patient people, and the president is very aggressively spending tax money. So we the people want to see results — fast. There is no question that until the economy begins improving, the president's poll numbers will be under pressure. But now we learn that a vast left-wing conspiracy is firing up to help him. According to excellent reporting by Politico.com — perhaps the best political Web site in the world — organized hard-left zealots join together in a daily morning conference call to discuss the day's events, coordinate briefings to the liberal media and design punishment for anyone criticizing President Obama or left-wing doctrine in general. The group is hosted by the Center for American Progress, led by John Podesta, a former Clinton adviser. The calls are often highlighted by a variety of people including Jennifer Palmieri, another CAP official, and former CNN reporter Jacki Schechner, now a Labor spokesperson. According to Politico, the call begins at 8:45 a.m. and is called to order by Tara McGuinness, a veteran liberal activist. Politico quotes Ms. Schechner — again, a former CNN reporter — as saying the group goes after those with whom they disagree: "There's a coordination in terms of exposing people who are trying to come out against reform. They've all got backgrounds and histories and pasts, and it's not taking long to unearth that and to unleash that, because we're all working together." "The Factor" has learned that the intimidation cabal, entities receiving information, includes Media Matters, elements at NBC News and at The New York Times. So you can see the vast left-wing conspiracy, armed with unlimited funds and unlimited hatred, are gunning for anyone they deem a threat. This, ladies and gentlemen, is a threat to America, and the Obama administration would be wise to avoid this crew. If the new administration gets involved in this, it would be like the Nixon dirty tricks squad. "Talking Points" is disgusted by the rank hatred on display in the political arena. We have hammered The New York Times and NBC for their lack of standards and their corruption. Now we learn that the hatred is being well-coordinated. This is obviously a serious situation that we will continue to investigate. And that's "The Memo." Pinheads & Patriots Singer Carrie Underwood, a former "American Idol" winner, is now using her fame to help defenseless animals. Ms. Underwood has recorded the "Idol" goodbye song and will donate all the proceeds from that to the Humane Society. That sounds like a patriot to me. On the pinhead front, our pal Montel Williams, no longer a TV guy, will become a radio guy. The problem is Montel is going to Air America, the far-left radio asylum which has emerged from bankruptcy. Now we have nothing against Montel, but it's a pinhead move. By the way, Newsweek, which is struggling, is also partnering up with Air America. Say goodbye to any objectivity for Newsweek. Another pinhead move. — You can catch Bill O'Reilly's "Talking Points Memo" and "Pinheads & Patriots" weeknights at 8 and 11 p.m. ET on the FOX News Channel and any time on foxnews.com/oreilly. Send your comments to: oreilly@foxnews.com

There are two patterns in the polling of our primary candidates: Romney consistently holds 20% – 25% of the national polling, while the other candidates play musical chairs for the spotlight. First, Bachmann’s campaign went from an anemic 5% early this summer to 15% in August. Then her campaign cratered and Perry came on the scene with 30% of the polling, and was soon replaced himself by the Cain campaign, now at about 25%. While Romney’s flipflops, beginning with RomneyCare, become more and more transparent to the electorate at large, conservatives paying attention to the primary process are looking to find someone to support instead of Romney. The problem for Romney is that voters seem to have made up their mind about him, and he doesn’t have 50%. Eventually, as some of the other candidates begin to drop out, their supporters will have to choose someone else. Is a Cain, Bachmann, or Perry supporter really going to vote for Romney? The fact is, Cain, Bachmann, and Perry supporters have a lot more in common than they do with Romney supporters, and the combined polling of Cain, Bachmann, and Perry tops well over 50%. We may have a scenario where Romney does well in the Iowa and New Hampshire primaries, but then fairs steadily worse as other candidates drop out and their supporters switch to backing someone other than Romney. Looking at the big picture, this primary is about Republicans cleaning house. Romney is the vanguard fighting against the rise of fiscal conservatives who see politicians like Romney as part of the same over-regulating, big government spending crowd which lost Republicans control of the Presidency and Congress in 2008. In short, Romney is in the same league as President George Bush. For example, it’s hard to see how any small government, fiscal conservative could support universal healthcare, aka RomneyCare. Even if Romney is right that healthcare should be a states rights issue, no small government, fiscal conservative in their right minds would support their state creating a universal healthcare system. It’s a bad idea, because an overly-controlling big spending state government is no better than an overly-controlling big spending federal government. In a nutshell, this is the problem conservatives have with Romney, and it’s why at the end of the primary process, someone besides Romney will be the Republican Nominee.

Adobe can afford to let Flash go away. Look for weakness, then buy. All the technology news this morning is about problems with Adobe (NASDAQ:ADBE) Flash. The cross-platform plug-in that plays animations, videos and sound in a format called .swf was important in the early years of the Web. It enabled browsers to handle complex files at a time when download speeds were measured in kilobits per second. Today, with download speeds measured in megabits, the speed improvements are not as important. Flash has instead become a liability, a vector for malware, even ransomware. Many of the largest sites on the Web, including Facebook (NASDAQ:FB), have already stopped supporting it. The fact that Adobe has now provided an update for the latest Flash emergency is not going to save the technology. Browser companies, including Microsoft (NASDAQ:MSFT) and Google (NASDAQ:GOOG) (NASDAQ:GOOGL), are reducing their support of it. The question you, as a shareholder, are probably asking is, if this technology is so important, why is Adobe's stock on the rise? Over the last month, it has gained 11% and in early morning trade Friday, it was up another 50 cents. The fact is that Web technologies like Flash are no longer what Adobe is about. Adobe is now about its Creative Cloud, which puts all its popular graphics tools under a single license, and delivers them as a service. For Adobe, this means regular subscription income rather than a reliance on product sales and expensive updates. Creative Cloud has been a huge hit, not only allowing Adobe to grow its top line 30% year over year, but dramatically increase margins at the same time. For the quarter ending March 4, for instance, Adobe reported net income of $254 million, 50 cents per share, on revenue of $1.383 billion. This compared with net income of $85 million, 17 cents per share, on revenue of $1.1 billion a year earlier. The heavy lifting to get the Creative Cloud running is now done, and so is much of the heavy marketing expense. Now, when Adobe wants to update its software, it does so once, and that update is instantly available to all its customers. "Cloudonomics" like this are a powerful profit driver, once a company gets on the right side of it, and Adobe is now clearly on the right side of it. The bottom line is Adobe does not need Flash to remain relevant or profitable. Adobe can address its problems with Flash at its leisure, knowing that it is mainly taking a public relations hit from it, not a financial one. Expect that Flash will be deprecated, essentially going away in favor of HTML 5, but don't worry about that. The bad news is other investors also know this one weird trick, to look for weakness in Adobe stock and pounce. You'll need a wider market fall to get your next shot at buying Adobe, but when it comes, pounce. Disclosure: I am/we are long GOOGL, MSFT. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

WidePoint Corp (NYSEMKT:WYY) Q2 2016 Earnings Conference Call August 08, 2016, 16:00 ET Executives David Fore - Hayden IR Steve Komar - Chairman & CEO Jim McCubbin - CFO Analysts Gregg Hillman - First Wiltshire Security Management Mike Malouf - Craig Hallum Capital Group Mike Crawford - B. Riley & Company Mark Drucker - B. Riley & Company Operator Ladies and gentlemen thank you for standing by. Good day and welcome to the WidePoint Corporation Second Quarter 2016 Financial Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the call over to David Fore of Hayden IR. Please go ahead, sir. David Fore Thank you, Operator. Good afternoon to all participants in WidePoint's second quarter 2016 financial results conference call. With me today are WidePoint's Chairman and CEO, Steve Komar; and Chief Financial Officer, Jim McCubbin. Steve will provide a brief overview of the quarter's developments and accomplishments and Jim will provide additional financial and operational review and outlook. Then we will open the call to questions from participants and institutional shareholders. Before I turn the call over to Steve, I would like to remind all participants that during this conference call any forward-looking statements are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Expressions of future goals, including financial guidance and similar expressions, including without limitation, expressions using the terminology may, will, believe, expects, plans, anticipates, predicts, forecast, expressions, which reflect something other than historical facts are intended to identify forward-looking statements. These forward-looking statements involve a number of risk factors and uncertainties, including those discussed in the Risk Factors sections of our WidePoint's Annual Report on Form 10-K, its quarterly reports on Form 10-Q and other SEC filings the company releases. Actual results may differ materially from the forward-looking statements due to such risk factors and uncertainties. The company undertakes no obligation to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after this conference call, except as required by law. I would now like to turn the call over to WidePoint's Chairman and CEO, Steve Komar, for opening remarks. Steve. Steve Komar Thank you Dave and good afternoon to all of you that have joined us for this WidePoint quarterly earnings and investor call today. As much as I would like to avoid being repetitive, I like to sincerely express our appreciation to all of you for your continued interest and participation in the future of WidePoint. Today we like the opportunity to share with you today our continued progress toward realizing both our tactical and longer term strategic goals and targets and of course our march towards sustainable profitability and soon thereafter attractive investment returns to our stockholders. First, I'd like to confirm our commitment to our longer term strategy of bringing to market an integrated solution set of identity management and telecommunications lifecycle managed services that will bring us a distinctive and perhaps unique cloud based software and services offering and result in competitive advantage. We will articulate and market this differentiator essentially our value proposition both to prospects and industry partners under our adopted tagline WidePoint, Your Trusted Partner, more on this in a few minutes. WidePoint second quarter financial results were marked by the impact of yet another three months of reduction in our net operating and EBITA loss and substantial improvements in our progress towards stable and recurring operational and bottom line profitability. In the second quarter we reported revenues of approximately $17.5 million compared to $17.4 million in the second quarter of 2015 and gross profit was approximately $3.4 million compared to $3.3 million last year. While this represents improvement on a year to year basis, frankly we did not achieve our internal revenue growth goal for the second quarter of 2016. Due to the delayed closing of a couple of large lower margin deals that slipped beyond our June 30 cutoff date. However those transactions will serve to enhance our overall third quarter revenue performance which we believe will show material quarter to quarter growth and keep us on track for our full year goals. An excellent indication of our growing sales momentum during the second quarter is that we received 12 new contracts or tasks orders including nine new customer relationships. These 12 new events are up from five and each of this year's first quarter and the second quarter of 2015. We expect each of these relationships to contribute incremental revenue during the third quarter. We're obviously committed to continuing revenue growth and we will not take our eyes off that ball but perhaps even more importantly we continue to be able to demonstrate our progress toward our key 2016 financial business goals by reducing our second quarter net loss and improving our adjusted EBITA losses by substantial percentages. From a slightly broader calendar perspective during the first half of 2016 we reduced our net loss and our adjusted EBITA loss by even greater percentages compared to the six month period a year ago. Jim McCubbin will take us through the details of this performance improvement in his financial commentary. These are not small improvements and reflect a continued conscious effort on the part of senior management to bring about fundamental changes to our business model. We've done that by focusing our sales and marketing efforts toward higher margin services including mobility and cyber security and away from lower margin software reselling or administrative support services activity. In addition beyond sales and marketing, we have also reduced overall non-critical spending and are deferring non-core product development expenditures as well as implementing expense control programs and both our support and administrative areas. This is an across the board effort and we fully expect to see the incremental and cumulative continuing impact of these programs during the second half of 2016 and in the years beyond. Now back to revenues and the business building front, in terms of existing client relationship management we renewed and expanded major contracts and services with Compass Group, LLC and with the Department of Justice's Bureau of Alcohol, Tobacco, Firearms and Explosives more commonly referred to as ATF during the second quarter. From a government markets perspective, during the quarter we continue to penetrate and widen our existing agency relationships under the Department of Homeland Security, BPA [ph]. We are cautiously pleased to report that despite earlier frustrations and signing the remaining unserved agencies of the DHS, in contrast our more recent penetration strategies and efforts have been increasingly successful. We are currently awaiting initial task orders and we expect to see sizable components of the U.S. Coast Guard begin to come on-board to our items service platform early in the fourth quarter. In addition we were awarded new agreements with two new non-DHS federal agencies, part of our focus on widening the federal government penetration beyond our reliance on the Department of Homeland Security and simultaneously we have continued to explore early stage penetration of the U.S. marketplace with soft-ex's electronic bill presentment and payment solution as well as bolstering our IT Consulting Services capability all in support of building a more robust one WidePoint solution set. On another higher margin business initiative we anticipate that revenues from identity based certificate solutions will continue to increase as we fully rollout our next generation mobile device and derive certificate solutions to an increasingly more security conscious marketplace in 2016 and 2017. Our sales and technology teams are currently engaged in a pivot market push which is already demonstrating accelerating success. WidePoint is now first to market with the DoD approved and certified ECA [indiscernible] solution and nearly every day we see some article on weakness and vulnerability of passwords or two factor authentication while security analysts sound a warning siren to those who do not implement strong authentication mechanisms. There are continued and increasing requests for bids for multi-factor authentication in both U.S. government and enterprise markets, with enterprise looking to meet regulatory requirements as well as implementing sound security practices to protect corporate assets. The government in turn continues to put more teeth into limiting access to systems by requiring strong authentication within government operated systems and any enterprise or user or system that connects to the U.S. government. Also on the commercial or enterprise market side of our business we are now at the maturation phase of some of our large key partner relationships. Such as a AT&T and Samsung. In fact we have been selected by AT&T for commercial rollout of certificate on device for AT&T's Internet of Things or IoT product offering in 2017 this in addition to a number of shorter term revenue opportunities with AT&T resulting from direct engagement with their regional sales organizations. AT&T also bought us Voya Financial and during the second quarter following a successful initial strategic consulting engagement to architect Voya's internal identity management environment, we have now been selected by Voya as a key partner in their one Voya initiative to pursue joint identity management opportunities in their broader marketplace. Meanwhile we are continuing our marketing and pipeline building activities with Samsung, LG and other partners for certificate on device person derived and device credentials and other IoT applications. Our targeted commercial verticals primarily remain financial services, health care and pharmaceuticals. Although we've recently seen emerging demand from the energy and educational sectors and as a momentum footnote we are seeing a resurgence in commercial market demand for telecommunications optimization solutions. During the second quarter we've signed five additional new commercial customers for our items based [ph] based managed service offerings. In contrast and international markets, recent events in Great Britain and the European economic community has someone certainty on the outlook for near term business growth as the Brexit process rolls out. And resulting currency conversion rate volatility can have a significant impact on financial results. Very recent stimulus activities initiated by the Bank of England have not yet demonstrated that they will have a beneficial effect on currency exchange rates. In the short term the opposite may well be the reality. In WidePoint's case the most exposed of our units is clearly our data analytics operation headquartered in Dublin, Ireland. Soft-ex serves Irish, British and European customers amongst others and as such transacts substantially in both Euro's and British pound sterling. While we cannot predict the ultimate exchange rate in December 2016, the recent deterioration of Sterling versus the euro has had an impact in the second quarter and may continue to have a negative impact on our forecasted earnings for Soft-ex in 2016. Jim will elaborate on the situation in his financial report and comments. Back in the States we are continuing to make progress with our efforts to ensure the realization of operational profitability including some changes to our direct sales force in support of our key industry partner strategy business development approach also recognizing the reality of the limitations of my part time CSMO efforts this year I have recently appointed Jason Holloway, as our new Chief Sales and Marketing Officer. James brings a long track record of delivering results and sales and revenue growth, relationship building and a strong sense and focus on profitability in each of his prior appointments and ventures. We anticipate and expect that Jason will provide the required focus and will deliver high level of revenue building strategies and team leadership in closing new business and expanding our current work with clients and prospects in our targeted industry verticals. Before I turn the call over to Jim for his financial analysis and comments I would like to confirm that we as an organization, as a management team remain very committed to a number of key 2016 quantified goals that we've put in place earlier this year which continue to include delivering incremental revenue growth between 10% and 20%, improving gross margin performance to over 25% on a run rate basis by the end of the year. Reducing sales marketing and general administrative expenses to 20% of revenue via a cost rationalization program combined with revenue growth and of course achieving positive net operating income during the second half of 2016. With that as a backdrop, I now like to turn the call over to Jim McCubbin. WidePoint's CFO for an in-depth discussion of our quarterly financial results for the second quarter of 2016. Over to you Jim. Jim McCubbin Thank you, Steve. Hello everyone. Thank you again for joining our call today. Today in my remarks I'm going to review our second quarter results and outlook. The second quarter revenue was approximately $17.5 million compared $17.4 million in the second quarter of 2015 as a result of several factors. A carrier services grew slightly to $10.2 million over our second quarter 2015 revenue of $9.6 six million due to an increase in carrier task orders issued and delivered during the second quarter and first half of 2016. Our second quarter 2016 carrier services revenue was down from our first quarter of 2016 as carrier services revenues declined as a series of technical refreshes occurred in the first quarter and there were several other nonrecurring activities, it was not expected nor did recur in the second quarter of 2016. Our carrier services in the second quarter was a bit down from what we had expected but they were in line where with they should be at this point in our evolution with the DHS BPA. Looking out into our second half of 2016 we believe we could see this number again expand as we continue to make progress in our efforts with the U.S. Coast Guard as Steve has already noted that will drive up our carrier services revenues. However, [indiscernible] managed services did decline slightly to $7.4 million over our second quarter 2015 revenues of $7.8 million predominantly as a result of lower software reselling activities that Steve had mentioned along with the negative effects that we realized as a result of the United Kingdom's vote to exit the European common community commonly referred to as Brexit that we could not fully offset with the growth that we did realize in our higher margin products and services. It should also be further noted that we are currently in the process of migrating away from supporting our software reselling activities which could lead to reduced revenues from this revenue line item as we allocate more capital towards our higher margins products and service. We believe this change in the allocation of our capital investment model should help us drive a greater mix of higher margin services that should ultimately drive a better bottom line result. We witnessed this occurrence in our gross profit in the second quarter of 2016. In fact in the second quarter gross profit was approximately $3.4 million compared to $3.3 million in the second quarter of 2015. This increase was predominantly due to a change that occurred in our revenue mix even though we witnessed a slight increase in low margin carrier service and a reduction in our mix of managed services coupled with the negative events we witnessed as a result of Brexit. We believe that as we change our focus and allocation of capital towards selling higher margin products and services we should recognize improved bottom line financial results on an absolute basis. We presently believe our gross profit should increase on an absolute basis in the second half with the exception that if the U.S. Coast Guard comes online our gross profit on a percentage basis may fall somewhat that is they say is a good problem that will ultimately drive higher levels of absolute gross margins. So as we attempt to drive revenues and gross profit towards a higher mix of higher margin services that generate greater absolute amounts of gross profitability by changing our shift in how we're allocating our capital away from lower margin software reselling activities, we're also shifting our allocation of capital within our SG&A activities to also better optimize our SG&A expenses driving a better mix of investments toward selling and supporting our higher margin services and away from our lower margin reselling activities. Given this and reviewing our SG&A expenses, SG&A was approximately $4.1 million, a $329,000 improvement compared to approximately $4.5 million last year. We witnessed the decline in our sales and marketing expense that reflects the continued changes we've been making during the first and second quarter of 2016 to streamline our sales, labor resources and sales commission agreements in a manner that incentivizes our sales force to pursue and close more recurring higher margin business. Meanwhile our G&A expenses declined due to changes we have made during the quarter to lower the rates charged by our outside consultants and other discretionary advisors along with other changes we continue to make that should reduce our overheads and other general and administrative expenses in support of our goal of producing a positive financial operating environment. To keep it simple, we're driving higher margins, higher gross profitability, higher gross absolute profitability and reducing our SG&A and optimizing it to effectively drive this positive financial operating environment that we're pushing for in the second half of 2016. Given this though we have not taken our eyes off of our investment requirements into our future, while the second quarter of 2016 our development cost appeared to have fell to approximately $1000 compared to $142,000 last year this occurred as a result of us entering into a final stage of development that allows us to capitalized approximately $233,000 in internally developed software costs principally related to our certificate on device credentialing tools and other applications. While we anticipate additional capitalization costs could occur during the third and potentially the fourth quarter of 2016. We're excited as we enter the next phase of the commercialization of a higher margin products and services with our partners in 2017 including the IoT efforts that Steve has already mentioned that we are working on with AT&T and our other partners. So all in given these changes in our allocation of capital model and our SG&A optimization efforts that focuses on achieving operational profitability with higher margin services, we were pleased with the progress that we made and improvements we witnessed in our Adjusted EBITDA losses, operating losses and net losses in the second quarter of 2016 as compared to the second quarter of 2015 and net loss improved approximately a $0.5 million to $890,000 compared to $1.4 million in the second quarter of 2015 and further in the first six months of 2016 and net loss improved approximately $1 million compared to the first six months of 2015. In the second quarter Adjusted EBITDA losses also improved approximately $0.5 million to a loss of $448,000 from a loss of $958,000 from the loss as a respective second period of 2016 versus '15 and the first six months of the year our Adjusted EBITDA also improved approximately $934,000 compared to the same period a year ago. So as we have shifted our focus away from revenue growth for the sake of revenue growth and towards operational profitability we're making headway and we believe that our second half should see higher gross margins on an absolute basis of course excluding the effects of the U.S. Coast Guard and carrier services that were to occur which could drive our gross profits down somewhat on a percentage basis. We also believe that given our success in driving up our gross profitability in the second half coupled with the better allocation of our SG&A expenses towards supporting higher margin services should drive some more nice continued financial improvements in our results. Now for a quick comment on liquidity, we ended the period with cash in securities approximately $8.2 million and with networking capital of approximately $7 million. We continue to manage our liquidity but cash and securities can swing from quarter to quarter as we have seen occur over the past six months. We continue to believe that so long as we are successful in achieving our financial goals in the second half of 2016 we should have sufficient liquidity to manage the business to the successful outcome that we all desire as we build a profitable and growing enterprise. So with that I'd like to turn it back to you Steve. Steve Komar Thank you, Jim. I would now like to move to open the call to questions. As outlined by Dave in his opening comments. For clarity we will be taking questions from analysts and institutional investors. In future calls we will accept pre-submitted questions from all investors as part of a modified Investor Relations process recently adopted by our Board of Directors. Operator if you can assist us by opening the line for questions and comments that would be appreciated. Question-and-Answer Session Operator [Operator Instructions]. Our first question will come from Gregg Hillman with First Wiltshire Security Management. Gregg Hillman Steve, I wanted to ask you a question about the competition [indiscernible]. I was just wondering how you’re positioning yourself relative to some of the other companies that do similar thing like in-trust, identity trust, cyber trust. How you’re differentiated from those other players in certain space? Steve Komar I think probably the primary differentiator that I would point out is not only our authorization and acceptance by the Federal government but the perceived strength and breadth of our offering both in terms of historic PIV back through this new generation what we believe is a differentiated new generation of products that's essential the focus on derived certificates and of course the emphasis on mobile utility and what we're working on with our partners in terms of embedding that capability into mobile devices. So I think our strength is our government background and acceptance and I think our pathway to success in adoption not only in the Federal government mobile environment but also in commercial applications as we move forward and there is more acceptance of that than I think our relationships with our large institutional and distribution partners will be a big differentiator for us. Does that do it for you Gregg Gregg Hillman Yes that’s a good answer. Thank you. Steve Komar Thank you, Gregg. Operator [Operator Instructions]. And next we will go to Mike Malouf with Craig Hallum Capital Group. Mike Malouf I wondered, can you just broaden a little bit and give us a little bit of clarity on the Coast Guard impact as we move throughout the next few quarters? Steve Komar In all candor, Mike I don't know how much clarity I can give you on that because as you know we've been struggling for nine months or a year trying to get a beachhead. I guess that’s the appropriate term for the Coast Guard but to get initial beachhead we do know that they represent a very substantial population of users. The number and the estimates vary greatly and very frankly we're not even sure at this point that the Coast Guard knows what their total population is. Part of our exercise is to go in there with them and to establish the full inventory of their user base. I would say to you is that we view this as a two to four quarter rollout to get the maximum run rate impact of the ongoing service. The number of devices is not small but I think -- and is probably one of the larger DSA agency or sub agencies. But at this point we do not know the answer to that question. I think we'll get some clarity on it over the next 60 to 90 days but that exercise is just beginning. I'm sorry if I had more I would share it with you. Mike Malouf I mean after four quarters lets you know it's takes you a whole year to ramp. Do you have any kind of range you think that the impact would be for you guys? Steve Komar I don’t, Jim do you? Jim McCubbin Hey, Mike. The U.S. Coast Guard is the largest component of the DHS. You're talking you know from anywhere from 20 to god knows how many thousands of units that this would touch. So I mean that's why it's hard for us because it's just trying to go in and get our hands wrapped around it. We do know that if they deploy everything. You know it will be the major portion of this DHS BPA amount and it's right now -- we are over $300 million are already on the $600 million and we know that with you know the growth outward eat up a good percentage of that both on carrier services as well as on managed services. So I'm sorry but we just won't have that information as we really go through the process working with them over the next 60 to 90 days. Steve Komar Mike, what I would just add is a footnote to that is that it brings -- it will bring substantial higher margin and managed services to the equation at a fairly sizable volume but it will most probably also bring with it substantial carrier services. We’re literally sitting in conference discussions asking them whether in fact we needed to provide all those services because it goes against everything we're trying to do on focusing on only higher margin business but it is a major customer and you know the reality is, if they want the service provided we will provide it. We will we may not make 50% on it, but we will make something like that percentage on the managed services aspect and I think we're in a position that we need to satisfy the customer Mike Malouf Got it. All right, thanks for that. Appreciate it. Steve Komar Thanks, Mike. Operator [Operator Instructions]. Moving on we will go to Mike Crawford with B. Riley & Company. Mike Crawford Thank you. Can you comment on the five new customers in the [indiscernible] space in the quarter? Steve Komar Well I can. Yes. They are an interesting array of firms across two or three -- I need to stop short of you know specifically naming at this point but they do represent I would say at least a $1.5 million in terms of total contract value and these -- on balance these are two to three year contracts. So you can sort of factor that into your thinking. I think it's meaningful. It's certainly not the U.S. Coast Guard, but I think the most significant thing Mike frankly is that we've been in the doldrums in terms of any new business pipelines and prospects and successes and in the course of this past quarter we've come up with a substantial number of them and the pipeline that we're seeing out there is very broad. So my sense is over a two to three quarter and I'm not trying to put this out there, I'm just saying it's a trend line over a two to three quarter continuation of this kind of success equation. We will make a substantial and meaningful difference to the recurring and ongoing run rates of that particular sector that being specifically the commercial market telecommunications lifecycle management piece. Mike Crawford Thanks, Steve. It sounds like you're having some good progression with AT&T but what about your other channel partners like Kyocera, Spikes, [indiscernible] Samsung, what's going on with those? Steve Komar That’s fair enough. Actually LG was a little bit dormant for a while but now has sort of come back on gangbusters, pardon the use of the term in terms of a much higher and intensified interest level in moving forward with again embedding our capability into certain markets that they are trying to penetrate. So we're very actively engaged with them right now. Kyocera has been less so and I think that's more a function -- I think that's more a function of the pace of their penetration of their marketplace which is essentially the First Responder Marketplace with its ruggedized handset. So alive, moving more slowly, I can't be any more candid than that. Spikes has the capability to do a little bit of leap frog. We don't really know yet but we've been fairly intensively engaged with them and their people have been working very, very closely with us. We've got this actually a fully integrated capability and we're going to market right now both government and commercial. So it might be interesting to see what develops there. It could be a substantial opportunity. Little early to commit to that. Mike Crawford Okay. Thank you. And then the last question relates to the disclosure in your 10-K regarding the executive committee formed to explore possible transition given a planned retirement. It was written that you have at the end of this year is that something that's still a plan or what's the status of that? Steve Komar Well I think it's fair to say it's inflexible [ph]. The Board essentially decided that we should extend the timelines associated with that and if you ask me honestly today there is no CEO succession plan specifically in place. However very candidly I expect that to change over some reasonable timeline but the Board's direction to me earlier this year has been very, very clear. It's -- well stop talking about that nonsense, go fix the business, make us profitable, show us that we have a strategic pathway that makes success that has you know has a guaranteed success path and then you know what, Steve will sit down and talk to you about CEO succession. That may not be in my personal best interest, but I'm pretty damn committed to making this happen. Mike Crawford Okay. Thank you very much. Steve Komar Thank you. Operator And moving on we'll go to Mark Drucker with B. Riley & Company Riley and Company. Mark Drucker Actually my question was answered. Thank you. Operator Thank you. And moving, we will return to Gregg Hillman with First Wiltshire Security Management. Gregg Hillman Yes. Could you talk about how much you've invested with some of the partners you’ve alluded in call, Samsung, AT&T, Kyosera, LG, you haven't got a return on. Do you know how much you've invested in terms of your time headcount in terms of people that are dedicated to this contracts or is this your money that you haven't got a return on yet. Is there any way you can put a number on that or in terms of the time you’ve put into it? Steve Komar I know we've put in substantial time. I mean clearly not necessarily third party expenses but certainly time and resources of our people and I think -- you know I don't know honestly but I can give you a really intelligent answer or number on that. I would turn to Jim and see if he has got any feel for it at this point. Jim McCubbin Yes. Over the past two years we've invested several millions of dollars in sales and marketing time efforts and literally time and expense into product development and integration with these parties. We don't break them out per party, but when we look at the effort in just the software capitalization that we saw this quarter it was $233,000. So we have in my best estimate invested between time and effort and money that we could've put to the bottom line $2 million to $3 million. Steve Komar Yes I that hat's fair, Gregg. I don't know if that answers your question. Gregg Hillman Over the last two years? Jim. Jim McCubbin Yes, I recall the last year and half. Gregg Hillman Yes. And still you’re feeling that the investment will be well worth it in terms of [indiscernible] return you're going to get over that over the next two to three years. Steve Komar Yes, Gregg, we wouldn't be doing it if we didn't believe it, I'll tell you. We've been fairly selective in terms of the partners we've selected. We knew it was going to cost dollars to stay engaged with them and it has. But I do think and I think I referred to something about the maturation of some of those partnerships. I think we've done the investments spending. Sure there will be some ongoing associated with sales and marketing co-efforts but that's all toward near term revenue generation. So I think the longer term investment spending is sort of coming to an end. Most of the integration has been done. Maybe the IoT that we referenced with AT&T in 2017 might generate some additional but that will be a whole new potential revenue stream. From what we've got in place right now, we're looking to harvest and we're looking to cut down the expenses and I think we've referred to that a couple times and if not in this in an earlier quarterly calls where we talked about the fact that we do see a decrease in that ongoing expense to support those initiatives. Gregg Hillman But Mike when you get to the end of maturation is that just means you just have a hunting license with those -- I take it they are going to sell a solution, you're not going to be selling it because you're going to have a channel partner to sell the solution to you but I mean have you been -- has there a sales staff being trained, has there a sales people who have been trained or you know the VARs that they with that they've been trained? Because Samsung and AT&T must VARs and system integrators too, right? Steve Komar Well I think our experience with -- well let's pick Samsung for one because that also has some very large potential for us. The reality of what is going on is that we’re doing multiple demonstrations and multiple presentations to substantial arms of the Federal government and a few selected commercial either large customers or prospects of either Samsung or us and the truth of the matter is yes there are sales organizations and their presentation capabilities certainly dwarf ours and they lead many of these presentations. But on the other side of that equation our technical people are there and they have to be a part of this process in the same way that they invited us, our key technical people to go to San Diego to their Annual Developers Conference to ensure that we remain a part of the process and that also that their developers and their business development people are aware of our capabilities. So there's a real tight hand-holding going on and to me this is sort of call it the culmination or the fruition of the year and a half to two years investments we've had with them. So yes it's a co-sell, they are driving it but the opportunities are really large and we have a presence because we are a differentiator. Gregg Hillman Okay. And is it possible that you could get a large contract you would say not do a press announcement it because they don't want to do a press announcement on it? Steve Komar It's possible. And it's particularly possible in the government market Gregg because we have that problem even when we're trying the deals on our own. The government can be very arbitrary about what it wants released and how it wants and wants it's name used, but we're an advertised component of the Samsung solution and we are the provider of the identity management high quality solution that is embedded in there not security container. That's a significant part of the government decision process. I'm fairly confident that we will get our day in the sun. Gregg Hillman Okay. Okay. Thanks your comments. Steve Komar Thanks a lot Gregg. Operator And that will conclude our question and answer session for today. I'd like to turn it back to our presenters for any additional or closing comments. Steve Komar Thanks, Operator. It appears we've addressed all of your questions, hopefully constructively. Operator, thank you for your assistance. As a closing comment we're really very excited about business progress, progress and our prospects for this year and for the years ahead. We thank you very, very much for your continued interest in WidePoint and our progress toward our goals at this very, very important time for the company. We do believe we're on the threshold of some significant success and we look forward to be able to talk to you about that in future quarters. Thank you very much. Again thank you for your time. We wish you all a very pleasant evening. Operator And once again that will conclude today's conference. We'd like to thank everyone for their participation. 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Spider-Man co-creator Stan Lee is no hero to one ex-sidekick who is suing him for alleged “severe and constant” mental abuse while working for the Marvel Comics icon. Former assistant Shawn Lukaszewicz, 29, slapped 92-year-old Lee, along with his wife Joan, 93, and daughter Joan Celia, 67, with a lawsuit accusing them of inflicting emotional distress amid unrelenting insults and threats during his employment from October 2014 up to his firing in June 2015. Papers filed in Los Angeles Superior Court state that in late April, Lukaszewicz had to drive the mastermind behind Spider-Man, the X-Men, and the Incredible Hulk to meet Manny Pacquaio. The boxer didn’t make the meeting because he was due to leave for Vegas to fight Floyd Mayweather. But the suit states that Lee instead berated Lukaszewicz for driving too slow, calling him a “[f - - king] idiot. You wasted my time . . . Everyone at the office thinks you are a [f - - king] a - - hole.” Lukaszewicz says he was then threatened with being fired for “kidnapping Stan Lee.” He also claims he was asked to deliver mail to Lee who answered the intercom, “Get the [f - - k] out and never ring my damn doorbell again.” He claims his initial job for Lee was to create a booth for his Comikaze convention, but Lee lambasted Lukaszewicz, saying he’d done a “s - - tty job” and the booth was “f - - king embarrassing.” Lukaszewicz claimed he was also subjected to abuse by Lee’s daughter, known as JC, who told him “you are f - - king stupid,” as well as calling him a “retarded a - - hole.” He also claims JC would drink alcohol and become “severely abusive.” In March, JC called him and said, “You are my little bitch,” the papers claim. Lukaszewicz was “constantly reminded how lucky he was to work for the most powerful people in the entertainment industry, and he, therefore, should ‘suck it up’ and be thankful for the abuse,” he says in the suit, which adds that they refused to pay him for all the hours he worked. Kirk Schenck, Attorney for JC Lee, said the former assistant’s lawsuit, “should never have been filed and will likely quickly be dismissed.” He said JC Lee had filed a separate lawsuit against the ex-assistant which involves allegations, “Mr. Lukaszewicz committed fraud, conversion and breach of contract against, and harassed and falsely imprisoned, JC Lee leading to his immediate dismissal.” JC Lee claims in her complaint, also filed in Los Angeles Superior Court, that in June Lukaszewicz falsely imprisoned her in her car after driving her to San Francisco, then refused to let her exit the vehicle, while “yelling and threatening” and demanding she pay him his agreed driving fee of $700 plus his air fare back to L.A. She finally persuaded him to drive back to their hotel and release her after ten minutes. JC Lee also claims in her court filing that Lukaszewicz, along with other defendants, conspired to cut her out of business deals and made at least one threat to file a Worker’s Compensation Claim unless he was paid $100,000 by Stan Lee. Lee runs POW! Entertainment, also named in the suit. Company reps did not respond to us. This article originally appeared in the New York Post.

MEMPHIS, Tenn. (AP) It ultimately didn't matter much who Kansas State started at quarterback in the Liberty Bowl. The defense's inability to slow down Arkansas would have doomed the Wildcats no matter who ran their offense. Alex Collins ran for 185 yards and three touchdowns and Arkansas capped its late-season surge with a 45-23 victory over Kansas State on Saturday to snap the Wildcats' three-game winning streak. ''Give credit to (Arkansas),'' Kansas State coach Bill Snyder said. ''They came out and played their game. They didn't do anything that we hadn't looked at or hadn't seen offensively or defensively. They just did it extremely well.'' Kansas State (6-7) finished a season below .500 for the first time since Snyder began his second stint as coach in 2009. Snyder added some intrigue to this game by making a quarterback switch. Kody Cook started at quarterback for the first time in his career Saturday. Cook was Kansas State's second-leading receiver during the regular season while also backing up quarterback Joe Hubener. Snyder said Cook had earned the starting assignment with his practice performance. ''You're not really as intense (at quarterback) because you try to stay focused,'' Cook said. ''But other than that, a lot of it is the same. You've got to go out and compete and have the same attitude we have in every game.'' Cook went 12 of 24 for 163 yards and threw a 48-yard touchdown pass to Winston Dimel, who also had a 10-yard touchdown run. Cook improved his accuracy in the second half and seemed intent on continuing Kansas State's late-season penchant for comebacks. Kansas State had erased a 21-point deficit against Iowa State and had come from behind to beat West Virginia during its winning streak, but it couldn't complete the comeback this time. Collins wouldn't allow it. Collins had touchdown runs of 22 yards and 13 yards in the first 17 minutes. His total of three touchdown runs tied a Liberty Bowl record. He also had a 68-yard kickoff return that set up Jared Cornelius' 13-yard touchdown on an end around. ''The kid is unbelievable,'' Arkansas offensive guard Sebastian Tretola said. ''He runs angry. He runs mad. The legs never stop.'' Kansas State trailed 31-23 late in the third quarter and appeared ready to make a stop when Arkansas knocked out the Wildcats with a one-two punch. Facing third-and-13, Arkansas' Brandon Allen found All-America tight end Hunter Henry down the left sideline for a 43-yard completion. On the next play, Collins spun away from a couple of defenders, eluded the grasp of a third and dragged a couple more into the end zone for a 14-yard touchdown with 12:04 remaining. Kansas State wouldn't threaten again in a matchup that pitted two friends against each other. Arkansas coach Bret Bielema worked as an assistant coach on Snyder's Kansas State staff from 2002-03. When Arkansas was struggling early this season, Bielema even sought Snyder for advice. ''I love Coach Snyder,'' Bielema said. ''I love everything about him. A lot of the things in our program are things I learned from him. I'm very blessed to be in this position.'' The game had a scary moment late in the second quarter when Arkansas' Dominique Reed was carted off the field on a stretcher. Reed lay on the ground for several minutes after making a 15-yard reception. Replays appeared to show him taking a blow to the side of the head at the end of the play. Reed was taken to the hospital for precautionary reasons, but Bielema said the junior receiver was in the locker room after the game. ''He's got a heck of a headache probably, but he's alive and well, walking, talking,'' Bielema said. --- AP College Website: collegefootball.ap.org

I ran into Nick Cafardo's latest notes column because of something he wrote in passing about Yoenis Cespedes, but I wound up taken instead by Cafardo's treatise on the Hall of Fame prospects for Manny Ramirez, who debuts on the BBWAA ballot next year. According to Cafardo, Ramirez's For comes down to one thing, really. Or at least one thing that the voters are likely to think much about: "Ramirez's numbers are extraordinary." He's 18th on the all-time RBI list, 15th on the home runs list. Oh, and he's eighth in career OPS. Now, we do have to leaven Ramirez's numbers with a few grains of salt. He played most of his career in hitter's parks, in a hitter's era. So his adjusted OPS ranks just 27th. Which of course is still extraordinary. It's just not eighth. Cafardo also lists Ramirez's Against, and I must mention that Cafardo is a master of understatement. To wit: "Defense was not a strength." Since World War II, Ramirez's fielding Wins Above Replacement are fifth-worst among all outfielders, according to Baseball-Reference.com. FanGraphs? Even worse. If you consider defense -- and yes, I understand that voters often don't consider defense much at all, but please bear with me for a moment -- then Ramirez, even with all those OPS's, falls into a group that includes, yes, players like Tim Raines and Tony Gwynn and Al Simmons, but also players like Larry Walker and Kenny Lofton and Jim Edmonds. And none of those latter three are heading to Cooperstown anytime soon. But as I said, voters don't care much about defense. Historically speaking, Ramirez did the things that Hall of Fame voters have always admired. If you think that was understatement, though, get a load of this one: "The PED violations are maybe too much to overcome in the eyes of voters, even though they came at the end of his career." Maybe? Maybe too much? Yes, for all we know, Ramirez didn't start using illegal sports drugs until the end, or nearly the end. I mean, that seems highly unlikely, based purely on what we know about the culture during that era. But hey, it's possible. It seems unlikely to me that Ramirez would come remotely close to 75 percent in a Hall of Fame election after failing three tests (two known, one alleged), when Bonds and Clemens can't come close -- €”or haven't so far, anyway -- €”after failing none. Granted, that's just my opinion. And it's hardly a perfect analogy, as Bonds and Clemens, rightly or wrongly, are seen by many voters as Bizarro Apotheoses of their era, and punishable to the full extent of the ballots and periods of eligibility. Fine. Lousy analogy. You want a better one. You deserve a better one. Rafael Palmeiro. Palmeiro's qualitative hitting numbers aren't as good as Rami­rez's. But his big-time counting stats -- the homers and the RBI, in particular -- are dead ringers. Their overall Wins Above Replacement are virtually identical, too. Now, before I get to my big reveal, I really should mention one huge difference between Palmeiro and Ramirez. While neither of them ever won an MVP Award or even finished second, Manny's got four top-five finishes and nine top 10s, while Palmeiro's got just one top five (fifth) and three top 10s. Whatever your feelings about the MVP, they're a pretty good gauge of the writers' perceptions of a player during his career. And it's pretty obvious that Ramirez was perceived as a significantly better player. On the other hand, memories do fade, leaving the numbers. And the numbers for these guys really aren't so different. Like Ramirez, Palmeiro failed a drug test toward the end of his career. Not three of them. But one. Right at the end. One. Right at the end. In Palmeiro's first year on the Hall of Fame ballot, he got 11 percent. In his second year, 13 percent. In his third, nine percent. In his fourth, four percent. You fall below five percent and you're off the ballot. I'm not saying Ramirez won't last five years on the ballot. He's got those two rings and those one hundred and eleven postseason games and those big seasons, and all that's going to count for something. But what's going to count for the most, the most by a lot, are those three failed drug tests. And while the voters might well become more and more forgiving in the coming years, Manny Ramirez has a long, long wait ahead of him.

Six people are missing after a 4-alarm blaze destroyed a 16,000-square-foot mansion in Annapolis, Maryland early Monday morning, a fire department spokesman said. Capt. Russ Davies of the Anne Arundel County fire department said Monday afternoon that six people are unaccounted for in the aftermath of the early morning blaze in Annapolis. He declined to say who specifically could not be located but officials had been talking with other relatives. Earlier, Davies had said the home's occupants might have been out of town. According to the Capital Gazette, the mansion, which is worth $6.2 million, is owned by Don and Sandra Pyle. In an October 12, 2014 interview in the Washington Post, Don Pyle is identified as the chief operating officer of an IT company known as ScienceLogic. A neighbor told the Capital Gazette that the Pyles are “lovely people.” The fire began about 3:30 a.m. and was brought under control several hours later. Firefighters remained on the scene into the afternoon next to the mansion, which had been reduced to its stone framework. A neighbor, who lives 500 yards from the home, told the paper he woke up at 4:30a.m. and noticed an orange glow in his bedroom. “It was like an inferno, he said. “The flames seemed to shoot straight up.” Fire officials have yet to determine the cause of the fire. CLICK TO READ MORE FROM THE CAPITAL GAZETTE The Associated Press contributed to this report

A small number of U.S. troops will remain in Liberia to build on major gains in combating the Ebola virus following the return of more than 1,000 troops from the 101st Airborne Division, the Pentagon said Friday. The 101st ended its mission in Liberia, where Ebola cases and transmission rates have fallen dramatically since the first U.S. servicemembers deployed to the country to fight the disease in September. Members of the 101st were expected to return to the U.S. in April. The returning troops will have to undergo a 21-day "controlled monitoring," or quarantine, period before they will be allowed contact with their families and others, said Rear Adm. John Kirby, the Pentagon press secretary. Kirby said about 100 people, consisting of American troops, civilians and contractors, will remain in Liberia after April to provide engineering, medical training and facilities support in the continuing effort to contain the virus. In January, the Pentagon put the cost of the U.S. military's work in Liberia at nearly $400 million. Earlier, Liberian President Ellen Johnson Sirleaf was welcomed by an honor cordon at the Pentagon and met with Defense Secretary Aston Carter to thank the military for its efforts in her country. History's worst Ebola epidemic began in West Africa early last year, hitting hardest in Liberia, Sierra Leone and Guinea. At one point, the Centers for Disease Control projected that the region could have 1.6 million Ebola cases by mid-January, but the efforts of local governments backed by the U.S. military, the U.S. Agency for International Development, the World Health Organization and a range of non-governmental organizations, including Doctors Without Borders, combined to contain the virus. Through Feb. 25, the CDC reported a total of 23,825 cases of Ebola in West Africa and 14,263 deaths. In Sierra Leone, the CDC reported steep declines in case incidents while also warning that transmission remains widespread. Guinea also had declines in case incidents, the CDC said, and in Liberia "transmission continues at very low levels, with only one new case reported in the week up to February 22." Sirleaf met with President Obama at the White House, and both pledged continued work to bring reports of new Ebola cases down to zero. "Our job is not yet done, and neighboring countries like Guinea and Sierra Leone are still somewhat behind the progress that's been made in Liberia," Obama said. Obama singled out "our men and women in uniform who helped to set up the logistical capacity to absorb additional aid and health workers from around the world, and our ability to set up labs and provide technical assistance." "We know that there was fear in this country" that the virus would spread, Sirleaf said, "and we understood that because we were fearful ourselves." Sirleaf also took note of critics of the U.S. military effort in Liberia. "We also thank you for the military," she said. "We know that this may not have been welcomed by many, or by some, but that made a critical difference in sending a strong message to the Liberian people that the United States was with us." -- Richard Sisk can be reached at Richard.Sisk@military.com.

It may be called "Billionaires' Beach," but the pristine views along one of Malibu's most exclusive coastlines are now easily accessible to anyone. After a decadelong legal fight that pitted public access advocates against a wealthy homeowner who refused to build a path, the California Coastal Commission is officially opening a third walkway along the 1.5-mile Carbon Beach on Tuesday. "It's an amazing stretch of coast that should be open to everyone," said Charles Lester, the commission's executive director. Carbon Beach is renowned for its majestic shoreline and high net-worth celebrities and homeowners. Heavy-hitters include Larry Ellison, former chief executive of Oracle Corp.; Hard Rock Cafe co-founder Peter Morton; and entertainment mogul David Geffen. Geffen spent years fighting against public access before opening up a path promised in 1983 in exchange for a remodeling permit. At the time, it was one of about 1,300 promised walkways, though many never opened. State law guarantees the public beach access up to the mean high tide line. But in areas like Malibu, many affluent and influential residents have taken extensive measures to keep beachgoers out of their sandy backyards. The lengthy legal quarrel over Carbon Beach access dates to the 1980s. The Coastal Commission issued Lisette and Norman Ackerberg building permits in exchange for providing a public path beside their house. The Ackerbergs put up various impediments, including a 9-foot-high wall, large boulders and a tennis court to resist building an easement. In 2009, Lisette Ackerberg, whose husband died in 2004, sued the commission to overturn its order opening a public pathway. California's 2nd District Court of Appeals ruled in favor of the agency. In 2013, the commission approved a settlement requiring Ackerberg to pay $1.1 million in fines. Some of the money will go to the Mountains Recreation and Conservation Authority to operate and maintain the pathway and reimburse the attorney general's office for legal fees. Ackerberg said she and her husband considered themselves advocates for both the environment and people with disabilities. She offered to build a wheelchair-accessible path to address the lack of accommodation for the disabled. "If this battle brings ADA (Americans with Disabilities Act) access to other accessways, that is progress and a worthy endeavor," Ackerberg wrote in an e-mail. Graham Hamilton, chairman of the West LA/Malibu chapter of the Surfrider Foundation, said he is pleased with the opening, but he also acknowledged the remaining challenges ahead. "It's a small victory in a very large battle," Hamilton said. "We hope that any development that is going to take place in the future remembers the citizens' rights under the California Coastal Act and state constitution, which allow public access to coastal lines." The Carbon Beach West pathway, as it's officially known, will be open between sunrise and sunset. The commission plans to open at least 18 additional paths in Malibu.

Facebook is buying WhatsApp in a deal worth up to a jaw-dropping $19 billion — but Mark Zuckerberg thinks he scored the messaging service for cheap. "I think that by itself, [WhatsApp is] worth more than $19 billion," Facebook CEO Zuckerberg said Monday, during a keynote address at the Mobile World Congress conference in Barcelona. The messaging service, which transmits users' text and video messages via their Internet data plan, is especially popular with young and overseas users. What's more, Zuckerberg explained, WhatsApp's offers value not only as standalone company but also as part of Facebook's larger strategy. He called WhatsApp the "most engaging app that we've ever seen exist on mobile by far," and pointed out "there are very few services that reach one billion in the world." Rival services like China's WeChat have been able to make about $2 per user, Zuckerberg said. Zuckerberg also promised Facebook won't mess with WhatsApp's data policy, in which the company does not store the content of messages. Still, echoing last week's announcement of the deal, Zuckerberg said he won't push WhatsApp to make money anytime soon. Instead the buyout makes it possible for WhatsApp to "focus for the next five years purely on connecting people." In response to a question from a journalist in the audience, Zuckerberg also promised Facebook won't mess with WhatsApp's data policy, in which the company does not store the content of messages. "That's absolutely not going to change," Zuckerberg said, adding later: "We'd be pretty silly to get in the way of it." But Zuckerberg didn't say much more about WhatsApp (which, if it passes regulatory approval, will be by far his company's largest acquisition). Instead Zuckerberg stayed firmly on the topic of Internet.org, a Facebook-led initiative to bring Internet connectivity to the two-thirds of the world's population that currently lacks access. Facebook launched the project last summer with companies including Samsung, Nokia and Qualcomm. Zuckerberg called the initiative "an on-ramp to the Internet" and talked up a new project announced Tuesday: SocialEDU, a pilot program that will provide students in Rwanda with free access to an online education system. An audience member asked if Facebook will try once again to buy Snapchat, the photo-messaging service that reportedly spurned a $3 billion offer last year. When the conversation moved to a question-and-answer session, however, the talk quickly went back to WhatsApp and Facebook's acquisition strategy. An audience member asked if Facebook will try once again to buy Snapchat, the photo-messaging service that reportedly spurned a $3 billion offer last year. Zuckerberg sat mute, and when the moderator asked him whether he had any comment, he replied simply: "No." The crowd laughed. "After buying a company for $16 billion, you're probably done for a while," Zuckerberg added. (The $19 billion deal includes $3 billion in restricted Facebook stock to be paid to WhatsApp employees who remain at the company for four years, so both $16 billion and $19 billion have been cited as the purchase price.) Zuckerberg also sounded off about the National Security Agency, saying Edward Snowden's reveal of the Prism snooping program served to align former rivals in the tech space. In fact, they're "working together better than ever before," he said. "The government kind of blew it on this," Zuckerberg said. "They were way over the line in not being transparent about what they're doing ... Now they're getting there, but they're only now starting to get to the point where they should have been before." Zuckerberg's overall take on the NSA's doings? "It's not awesome."

We should all be emailing and posting the following to as many county, state, and national officials as we can each reach: SUBJECT: Re-Registration As A National Meme and a National Party Priority Liberal leaders all over the country are conveying the message that their ideas and values are barren and bankrupt by abandoning their base in deciding not to run for reelection. They are abandoning their base to a leaderless future. Why should their base tolerate that for a single instant? We should invite their base to abandon their lack of leadership and effective action in turn by offering all rank and file party members a chance to re-register as voters. By making ‘re-register’ (and yes, I do mean ‘re-register’ with a change in party) a national meme and a national priority that all of our leaders are encouraging, we are claiming ownership as the party of ideas that will advance our nation and halt the advance of bad ideas that so many are vocally deploring. Such a national campaign can only serve our best long and short-term interests! Why? First of all, at the street level, it’s a very easy and quick way to help folks officially register their discontent with current and proposed policies. Although many of the elite will deplore and condemn such an action, it’s really a choice up to the individual voter in the street, isn’t it? It will show demonstrably that our party has the confidence and commitment to our own ideas, that we can ask and expect other voters to change parties if they genuinely want what’s right for their country. If we do any less in these times, we are really admitting that our ideas are as barren and as bankrupt as their ideas. If we sincerely offer them this simple method of registering their discontent, many, many will accept the offer. Yes, it will be a little bit of fun to answer the outrage of the MSM and the opposing party leaders! We can expect to be accused of ‘poaching’ voters in a time of ‘national difficulty’. It’ll be a nice opportunity to talk about being ‘pro-choice’ and about ‘unintended consequences’ of the decisions of their national ‘leaders’. Imagine national leaders running to the cameras to express their outrage over such a movement. Imagine the outrage of the anointed elite and intelligentsia. By voicing their outrage over the issue they will be conveying the idea to the rank-and-file — many of whom have a much lower level of loyalty to a given party than these so-called leaders have. So for those of us who have half a dozen blank voter registration forms rattling around in the back floor or the trunks of our cars, let’s dust them off and put them in front of some liberals we know in our lives. Ask them to re-register. Point out that their national leaders are abandoning them in droves and ask them why they should maintain loyalty to a party that is so obviously and demonstrably abandoning them! Point out that a simple change in registration is a simple, easy and quick way to officially register their disapproval of current and proposed national policies – and the ‘leaders’ who have been promoting those policies. Then forward this post to as many county, state and national public figures as you possibly can identify. Copy and paste this article into as many comment and blog post blanks – anywhere – as you can! For many of us who are canvassing our precincts or districts to join our local party committee (check the rules in your own locality) we are allowed to re-register any voter then allow them to sign our petitions to be seated on our county committee. We should be actively engaged in just this activity! This is the perfect iron to strike now in the heat of the current political debate.

Heart's induction onto the Hollywood Walk of Fame was made extra special on Tuesday after officials in Los Angeles dedicated the day to the rockers. Sisters Ann and Nancy Wilson unveiled their pavement plaque on Hollywood Boulevard, positioned by The Musician's Institute, in front of a huge crowd, and they were left stunned by the extra honor bestowed upon them. Ann Wilson exclaimed, "That's a big surprise, I didn't know it was Heart day too," before joking, "Okay, everything's free for everybody all day long. Nobody pays any money for anything all day." She added, "We'd like to say this is an incredible honor. Words can't even touch it." Nancy told the crowd, "We're so delighted to be here today taking some credit... for all the long, hard work we do to bring a few good songs into the world. Songs are truly the messengers of love and it's really amazing f**king cool when the message gets through. Thanks forever to our beautiful and loyal fans. We would not be here without you." Actress Rita Wilson was among the star guest speakers at the event, and she was full of praise for her musician pals. In a post on her Twitter.com page, she writes, "So honored to be w/ (with) @officialheart for their Hollywood Blvd Star ceremony! Can I be the 'other' Wilson in Heart?"

Photo: DPA German parliament has passed a law making bestiality illegal, while at the same time continuing to allow farming practices such as branding horses and castrating pigs without anaesthetic, to the anger of animal rights activists. German zoophiles can now face fines of up to €25,000 for all forms of sex with animals. The rules passed on Thursday by the Bundestag lower house of parliament form part of a package of measures aimed at bolstering animal protection to bring the country in line with a European Union directive. Yet animal protection groups are deploring other rules passed at the same time which allow practices such as castrating pigs and branding horses - which inflict pain on animals but are common in livestock breeding - to continue. By voting to continue to allow horse breeders to brand animals, the government ignored the advice of its own Agriculture Minister Ilse Aigner, who had argued for a ban. The animal rights association PETA called it a black day for animals, while the German Farmers Association said the new rules actually raised demands on livestock owners. From 2019 onwards handlers must give horses a local anaesthetic before they are branded. The same applies to male pigs, which from 2019 must receive an anaesthetic before being castrated – a process which removes the gamey flavour in pork from male pigs. “The castration of male pigs is a bigger problem than the branding of horses from the perspective of animal protection,” said Jörg Aurich, veterinary expert at the University of Vienna. Story continues below… An alternative method to get rid of the smell - which disappears anyway after cooking - must be found, he added. DPA/The Local/jlb

Sometimes it takes a swift kick in the pants to remind investors the price they are paying for an investment. Take for example two popular Closed-End funds (CEFs) from the Alpine family of funds, the Global Dynamic Dividend fund (NYSE:AGD) and the Total Dynamic Dividend fund (NYSE:AOD). Both of these funds are known as dividend harvest or dividend capture funds and if you go to Alpine’s website you will read all about their strategies to scan the globe looking for dividend and growth opportunities. Essentially, these funds attempt to harvest multiple dividend periods by overweighting dividend yielding global stocks ahead of their ex-dividend dates and then rotating assets to overweight other or alternating dividend yielding global stocks ahead of their ex-dividend dates. The end result is a treasure chest full of investment income for the fund that can be distributed as tax-qualified dividends. But is this fool’s gold? The table below will show the total Net Asset Value (NAV) returns (including dividends and capital gains) for the funds since inception. I have included the total returns of two other global CEFs, the Eaton Vance Tax-Managed Diversified Equity Income fund (NYSE:ETY) and the Eaton Vance Tax-Managed Global Diversified Equity Income fund (NYSE:EXG) as comparisons. ETY and EXG are good performance comparables to AGD and AOD because they came public around the same time at $20 per share (minus a sales credit gives inception NAV price), and have global equity portfolios and similar inception dividends and yields. The difference between the funds is that ETY and EXG use an option-income strategy on their underlying portfolio while AGD and AOD use a dividend capture strategy. ETY and EXG by no means represent the best of the NAV performances among option-income funds and in the case of EXG, which is the largest equity income CEF at $3.47 billion in assets, the fund got started closest to the market meltdown in late 2007 and with a portfolio of mostly international stocks. Still, both ETY and EXG have trounced the total return performance of AGD and AOD since inceptions. Click to enlarge The purpose of this comparison is to show investors the misconceptions of equity based high yielding CEFs and how they can lead to arbitrary market price valuations. The perception that dividend harvest funds such as AGD and AOD have “good” distributions because their dividends are tax-qualified as opposed to “bad” dividends from option-income funds which are mostly return of capital (ROC) is pure nonsense. One has to look at the bigger picture of what the real cost for these distributions has been. Not only have the option-income funds NAVs held up far better than the dividend capture funds since their inceptions, even with their high ROC; one could argue that return of capital is more tax-advantageous than tax-qualified dividends. ROC is tax-free in the period received though an investor would need to lower their cost basis in the fund by the ROC amount. Still, ROC is essentially tax-deferred until the investor sells the fund. So what is the big draw of AGD and AOD to investors when the strategy has not proved that it can outperform, let alone just keep up with the markets? I can only imagine that it is the tax-qualified income since it certainly cannot be the fund’s NAV performances, which are among the worst I follow. Through December 2010, the NAVs on an absolute basis are down 64% for AGD and 68% for AOD since inception and yet investors still seem willing to believe in this strategy. At what price does one have to pay to receive tax-qualified income? In the Spring of 2010, I warned investors, even as AGD rose to a 60% premium and AOD to a 40% premium, that both funds were headed for disaster as their NAVs had not recovered nearly enough from the market lows of March 2009 to justify the continued exorbitant dividends they were paying. Then on June 24, 2010 the Board of Trustees for Alpine finally announced dividend reductions of 45% and 55% for AGD and AOD respectively and the market prices fell precipitously. The dividend cuts certainly have helped balance the fund’s earnings and distributions and it has improved their NAV performance for the second half of 2010, however their NAVs are still so depressed that I question if they will ever be able to recover to their former levels short of additional dividend cuts or a global bull market for the next decade. Even in a rising market like we’ve seen, the funds would still be adhering to their income strategy of buying and selling positions as they rotate assets ahead of ex-dividend dates. Over the past two fiscal years, this has created a very large turnover in the portfolios, annualized at 400% to 650% according to Alpine’s latest annual reports. As most investors know, when a stock goes ex-dividend, the stock price is reduced by the amount of the dividend so the funds would have to first make up the amount of the dividend before the position could start contributing to the NAV. In a strong market environment this may not be a problem but the question is how long can an investor rely on being bailed out by a strong market? Dividend harvest may be a great strategy for earning lots of dividend income but history has shown that it has been a disaster for the NAV of the funds. As I write this article, some of the dividend harvest funds again seem to be rising to higher market price premium levels while the option-income funds continue to languish at discounts. Though one would expect the dividend harvest fund’s NAVs to solidly outperform the option-income funds in a strong market environment, this was not necessarily the case in 2010. Perhaps the dividend harvest strategy is now coming into its own and the risk trade will finally pay off in these funds as opposed to the more defensive option-income funds which perform better in trendless markets. However if history is any guide, one should not expect global markets to proceed in a straight up or orderly fashion and if that is the case, then the fund manager’s at AGD and AOD will have their work cut out for them to build back the fund’s NAVs from their depressed levels. In the meantime one thing is for certain…the true term "return of capital" in which investor assets are simply returned to them in the form of distributions seems so far to be more a case for the dividend harvest funds than the option-income funds. Note: Each fund's portfolio of securities is unique. This analysis only compares certain parameters of these funds and does not take into account each fund's portfolio of securities which also contributes to overall NAV performance. Disclosure: I am long EXG, ETY, Short AGD

Dolby Laboratories Inc. (NYSE:DLB) F4Q07 Earnings Call November 8, 2007 5:00 pm ET Executives Kevin Yeaman - Chief Financial Officer Bill Jasper - President and CEO Tim Partridge - EVP of Products and Technology Ramzi Haidamus - EVP of Sales and Marketing Analysts Ralph Schackart - William Blair Mike Olson - Piper Jaffray Ingrid Chung – JP Morgan Steven Frankel - Canaccord Adams Brian Thackray - Deutsche Bank Paul Coster - JP Morgan Andy Hargreaves - Pacific Crest Securities Hunter DuBose - Morgan Stanley Alan Davis - DA Davidson Operator Welcome to the Dolby Laboratories conference call discussingfourth quarter and year-end fiscal 2007 financial results. (OperatorInstructions) I would now like to turnthe conference over to Kevin Yeaman, Chief Financial Officer for DolbyLaboratories. Kevin Yeaman Thank you. Good afternoon, everyone and welcome to DolbyLaboratories fourth quarter fiscal 2007 earnings conference call. Joining metoday’s are Bill Jasper, Dolby Laboratories President and CEO; in addition TimPartridge, EVP of Products and Technology, Ramzi Haidamus, EVP of Sales andMarketing are here to participate in today’s Q&A. On this conference call, we will be making forward-lookingstatements that include: projection of future operating results for our fiscalyear ending September 26, 2008; market trends for the industries in which wecompete and our expectations concerning how those trends will affect ouroperating results; the capabilities and market acceptance of our products andtechnologies; and our strategic and operational plans; as well as ourexpectations regarding the anticipated benefits of the planned acquisition ofCoding Technologies. Important factors could cause actual results to differmaterially from those in the forward-looking statements. These factors aredetailed under the section captioned risk factors and elsewhere in our mostrecent quarterly report on Form 10-Q available at www.SEC.govon our website at www.dolby.com under theinvestor relations section. Dolby disclaims any obligation to updateinformation contained in these forward looking statements, whether as a resultof new information, future events or otherwise. As for the structure of this call, Bill will begin with anoverview of the business and our recently announced agreement to acquire CodingTechnologies, and I will follow with a rundown of Dolby’s financialresults. Now with that introduction behind us, I will turn the callover to Bill. Bill Jasper Thank you, Kevin. Good afternoon, everybody. I am pleased toreport a strong fourth quarter and fiscal year. Throughout the year, and theperiod, we continue to benefit from Dolby’s strong position across a range ofentertainment markets including cinema, DVD, personal computer, broadcastgaming and automotive. With this strong base, we remain well-positioned for anumber of upgrade cycles including Digital Cinema and 3D, Digital Broadcast,next-generation DVD and next-generation gaming. In each of these markets, Dolby’s technologies help makeentertainment more real and immersive, and the Dolby brand has come tosymbolize a superior entertainment experience. True to our strong brand and industry-wide presence, we arewell-positioned at a time when digital content is proliferating and the demandfor entertainment is growing. Our fundamental opportunity is to extend ourbrand and technologies to the many new markets arising from this digitalproliferation. We believe our plannedacquisition of Coding Technologies is an important step towards addressing thisopportunity. On today’s call, I would like to provide an overview ofCoding Technologies, also known as CT, and discuss how we believe it positionsus better for longer-term opportunities emerging in a digital world. Andfinally, elaborate on the progress we are making with new initiatives inmobile, Digital Cinema, and video. I am very excited to announce that Dolby has entered into adefinitive agreement to acquire Coding Technologies for a purchase price ofapproximately $250 million net of cash. We expect the transaction to close verysoon, and the closing mechanics are already in process. I would like to spend the next few minutes discussing CT’sbusiness and technologies and articulating why we are very excited about thistransaction. First, a little bit about Coding Technologies. CT is alicensing company founded in 1997. For the past ten years, it has been focusingon developing and providing innovative audio compression technologies forlimited bandwidth platforms such as mobile and digital broadcasts. The companyhas approximately 70 employees and is headquartered in Stockholm, Sweden, with additionaloffices in Germany,China and the United States. CT is best-known for developing audio compression techniquesthat enrich industry standards, most notably spectral band replication, whichenhances the MPEG-4 audio standard. Today, CT’s audio technologies are widely used in mobile handsets, andare increasingly being adopted by next-generation platforms such as broadbandTV, mobile TV, video on demand, and next-generation HD broadcast. We are very excited about CT for a number of reasons. Webelieve that the acquisition will expand our business into the mobile market,add to and complement our existing broadcast business, and help us penetratesome new markets such as digital radio, where we believe CT’s high compressionaudio technologies could provide significant value and have already beenadopted in several digital radio standards. In the mobile markets, CT’s success in developing MPEG-4audio enhancement technologies enables a more efficient delivery of media. CThas traction with mobile handsets, where its spectral band replications andparametric stereo technologies are part of the high efficiency, or HEAACstandard. HEAAC has been selected bymobile music service providers including O2, Sprint, and Telenor. Handset manufacturers that offer HEAAC enabledphones include Nokia, Motorola, Samsung and Sony Ericsson. In fact, more than100 different phone models support HEAAC. In the broadcast market, the efficiency of CT’s audiotechnologies will help us address specific challenges facing some internationaltelevision broadcasters and operators. In markets such as Norwayand Brazil, forinstance, industry groups have selected Coding Technologies to address very lowbandwidth issues, and the selection of HEAAC will enable multichannel audiodelivery at these lower bit rates. In addition, by delivering both Dolby Digital Plus andHEAAC, we can offer a variety of multichannel solutions to our existingbroadcast customers, who have a wider range of requirements pertaining tobandwidth constraints and compatibility with playback devices. Longer term, we believe CT’s technologies and expertise willhelp us address some of the opportunities stemming from greater mediaportability and convergence. Consumers increasingly expect content to portacross multiple playback environments such as PC to mobile and mobile to audio,and consumers want to experience high quality entertainment at each playbackpoint. By combining Dolby’s extensive suite of audio processing technologieswith CT’s technologies, we believe we will be better positioned to help thesecustomers optimize the portable entertainment experience in various playbackenvironments. Finally, Coding Technologies and Dolby share similarcultures. Like Dolby, Coding Technologies has a strong engineering team, apassion for technology and entertainment and a record of successful innovation.It is made up of a group of exceptionally skilled audio and software engineersfocused on emerging industry demands. We believe that this similar culture,passion and innovation focus will complement and add to Dolby’s existingorganization and strategy. In a minute, Kevin will comment more on the financialprofile of Coding Technologies and its impact on the business. With that, let me turn to some of the initiatives we arefocused on in fiscal 2008 starting with mobile. We are making significantprogress with our mobile initiative and expect Coding Technologies tocomplement our existing efforts. In November, we announced a release of theDolby Mobile suite of technologies. Currently, Dolby Mobile integrates andoptimizes a number of technologies for the playback of entertainment on mobilephones, improving the experience. NTT DoCoMo and Sharp announced that they have licensed andplanned to incorporate Dolby Mobile into two handset models to be sold in Japan.NTT DoCoMo is widely regarded as the leader and premier innovator in the mobileindustry, so we were pleased to have earned their trust and support with DolbyMobile. The first Sharp handset modelwith Dolby Mobile is expected to be available in Japan at the end of thismonth, followed by a second model expected to be available in Japan in theJanuary to February 2008 timeframe. By combining CT’s technologies andrelationships with Dolby Mobile and the Dolby brand, we believe that our timeto market in the mobile industry can be improved. Turning to our initiatives in the Cinema industry, wecontinue to work closely with studios and exhibitors in their transition toDigital Cinema and Digital 3D. Lastmonth, we began shipping Dolby’s 3D digital system. The Dolby 3D technologyutilizes standard white screens already in auditoriums so exhibitors don’t havethe added costs nor the image quality compromise associated with the use of silverscreens required by competitors. Additionally, Dolby’s 3D digital system supports both 3D and2D presentations, without the need for dedicated 3D auditoriums, by adding aretractable color filter wheel accessory to the digital projector. Exhibitors canmove a 3D movie to additional auditoriums equipped with Dolby 3D Digital Cinemasystems later in the run using the standard screens. This is an importantbenefit since exhibitors need to migrate a feature film to a smaller screen asit matures, and as new features are prioritized for the main theater. In the fourth quarter, Dolby announced the sale of 3Dsystems to Kinepolis Group for 17 screens throughout Europe.In addition to Kinepolis, a number of key exhibitors announced they will beinstalling Dolby 3D systems in time for next year’s release of Beowulf in 3D. These exhibitors include CarouselCinemas, Cinema City,Cinetopia, Cobb Theaters, Kiers, Malco, Marcus Theaters, Maya Cinemas, Megaplex,Starlight, Sundance, Warren and Silver City. At the same time, we continue to make progress in our rollout of Digital Cinema. Last month, Dolby Digital Cinema received the industry’sfirst USgovernment FIPS level 3 certification which is the highest level of securityrequired by DCI. We believe these is an important milestone as it assures studiosand exhibitors that Dolby’s Digital Cinema system is design to maximize the securityof their content. Dolby Digital Cinema and Dolby 3D represent our first pushinto imaging, but we don’t plan on stopping there. We are equally focused onimproving the video of next generation LCD displays. At these year’s fall Japaneseconference on advanced technologies, we demonstrated two new video technologieswe plan to license: Dolby Contrast and Dolby Vision. Both are aimed at theemerging for LCD displays with LED back lighting and local dimming. While anascent market, these next generation LCDs are expected to gain momentum as theprice for LEDs declines. Dolby Contrast and Dolby Vision are HDR – high dynamic rangeimaging technologies -- aimed atenabling the capture, distribution and display of more vibrant video on LEDback lit LCD television sets. Dolby Contrast provides enhanced contrast whileDolby Vision combines enhanced contrast with extended brightness and dynamicrange for LCD televisions, with LED backlighting technology, resulting in truerblacks, brighter whites, and a vivid image. In summary, we remain well-positioned for key upgrade cyclesin our DVD broadcast and gaming markets. We are focused on extending our brandand technology into newer market opportunities including mobile, Digital Cinemaand video, and we see the planned acquisition of Coding Technologies as animportant element to our overall strategy. With that, I will turn it over to Kevin. Kevin Yeaman Thank you, Bill. I would like to start by discussing Dolby’soverall financial performance, followed by highlighting some of the majordrivers of our P&L in the fourth quarter of 2007 and in fiscal 2008, andfinish by providing our guidance for fiscal 2008. We had a strong fourth quarter and fiscal year driven bystrong revenue growth, a significant increase to our licensing margins and adecline in our tax rate, each of which I will cover. Revenue for the fourth quarter was $129 million, up 26% year over year. On a fullyear basis, Dolby’s revenues was $482 million, up 23% from fiscal 2006. Fourthquarter licensing revenue was $103 million, an increase of 29% year over yearand 9% sequentially. Growth was primarily driven by strong results from our PCconsumer electronics and broadcast markets. In the fourth quarter, our CE market experienced growth yearover year and strong sequential growth on higher reported shipments of DVD, hometheater in a box and AVR products, due in part to our compliance efforts. The CE market madeup over 35% of our licensing revenues in fiscal 2007, compared to approximately45% in fiscal 2006 as strong growth from our PCM broadcast markets furtherdiversified our revenues. Our PC market experienced strong year over year growth inthe fourth quarter as many consumer PCs continuedto ship with Microsoft Vista Home Premium or Ultimate Editions as well as withthird party DVD playback software, each containing Dolby technologies. Our PCmarket also experience sequential growth, which we attribute to increased PCshipments and the continued strength of Microsoft Vista. The PC marketrepresented approximately 35% of our licensing revenue in fiscal 2007, comparedto just over 30% in fiscal 2006. Our broadcast market experienced strong growth year overyear in the fourth quarter on continued demand for digital televisions in North America, and was slightly down sequentially. The broadcast marketcomprised over 15% of our licensing revenue in fiscal 2007, up from just over10% in fiscal 2006. In our other markets category, which includes gaming,automotive and VIA, we experienced year-over-year growth across each market,but a sequential decline led by softness in our gaming market ahead of theholiday season. In fiscal 2008, we willinclude revenues from the mobile market in our other category, which is wherethe majority of Coding Technologies revenue will fall. Fourth quarter product sales were $19.6 million, up 32% yearover year, and 14% sequentially. Strongdemand for our broadcast and cinema audio products drove sequential growth,while year-over-year growth resulted partly from last year’s price increase fortraditional cinema-related products. You may recall that in the third quarter of last fiscalyear, exhibitors accelerated purchase orders ahead of anticipated priceincreases, which had the effect of reducing orders in the fourth quarter offiscal 2006. Fourth quarter services revenue declined 13% year over yearand 21% sequentially. The sequential decline resulted largely from seasonality,as the fourth quarter is typically a slow one for film releases. The year overyear decline resulted from differences in timing. Turning to margins, our licensing gross margins improvedsignificantly in the fourth quarter of fiscal 2007. As you may recall, over thepast several quarters we had been accruing royalty expense related to anongoing dispute with an unrelated patent licensor. In the fourth quarter offiscal 2007, we determined it was appropriate to cease accruing additionalroyalty expense related to this dispute. As a result, our licensing margin increased to 98% in thefourth quarter of fiscal 2007. We expect our licensing margins to beapproximately 96% in fiscal 2008, as we do not expect to recognize additionalexpense related to this dispute going forward. The difference between the 98%gross margin in the fourth quarter compared to 96% in fiscal 2008 is due to theestimated amortization of intangibles from acquisitions. Moving to products, our products gross margin was 49% in thefourth quarter of fiscal 2007, adecline of 4 points sequentially. As you recall, we have deferred approximately$7 million in revenue to date for Dolby Digital Cinema servers until certain[DCI] specifications are clarified and met. Since gross margins on initialDigital Cinema systems are significantly lower than our traditional cinemaproducts, we expect product gross margin to be substantially impacted in thequarter that we recognize this revenue. We now expect to recognize this revenuein the second half of fiscal 2008. Services gross margin was 53%, down 8 points sequentially,resulting from lower revenue in the fourth quarter. Turning to tax, our fourth quarter fiscal 2007 tax rate was21%, which was substantially lower, largely due to the cumulative benefit of achange in estimates governing prior periods to reflect a greater deduction fordomestic production and export sales incentives. This resulted in a tax rate of31% for fiscal 2007. Going forward, we expect our tax rate to be approximately35%. Strong revenue growth, improved licensing margins and areduced tax rate resulted in fourth quarter net income of $44.2 million, or$0.39 per diluted share, compared to $25.2 million, or $0.22 per diluted sharefor the fourth quarter of fiscal 2006. For the full year, net income was $142.8 million, or $1.26per diluted share, compared to $89.5 million or $0.80 per diluted share forfiscal 2006. Net income includes stock-based compensation charges of $5.1million for the fourth quarter of 2007 and $4.2 million for the fourth quartera year ago. For the full fiscal year, net income includes stock-basedcompensation charges of $19.8 million compared to $19.1 million in fiscal 2006. Turning to the balance sheet, Dolby finished the year withapproximately $673 million in cash, cash equivalents and marketable securities.From operations, we have an approximately $55 million of cash and cashequivalents during the fourth quarter. As Bill discussed earlier, today we announced a definitiveagreement to acquire Coding Technologies for a purchase price of approximately$250 million net of cash. Let me share a few more financial data points. We expect Coding Technologies to add about $20 million ofrevenue in fiscal 2008. Roughly 80% of CT’s revenue is related to the mobilemarket, with the remainder mostly related to the broadcast market. CT’s marginstructure is similar to Dolby’s license business, since it too is a licensingcompany. While we have not completed our purchase price valuation work, wecurrently approximate that the acquisition will result in an increase inamortization of intangibles of approximately $8 million per year, withapproximately $4 million in cost of licensing and $4 million in operatingexpense. Let me turn to outlining our expectations for fiscal 2008.For licensing, we anticipate revenue of between $455 million and $480 millionin fiscal 2008, including approximately $20 million from the acquisition ofCoding Technologies. Organic growth is expected to be driven primarily from ourPC and broadcast markets. For products and services, we anticipate revenue of between$105 million and $120 million. The anticipated shift in the market for DigitalCinema makes this a difficult category to predict. We believe we arewell-positioned for sales growth in Digital Cinema and 3D products, but therate of adoption remains uncertain. We are basing our guidance on theassumption that we will have increased sales of Digital Cinema and 3D products,and that we would begin recognizing revenue from Digital Cinema sales in thesecond half of fiscal 2008. If the Digital Cinema market develops asanticipated, we also anticipate increased competition for our cinema audioprocessors. Turning to margins, we expect overall gross margins toapproximate 85% to 86% for fiscal 2008. There are a number of key factors thatwe expect to affect our gross margins in fiscal 2008. Licensing margins were98% in Q4 and will settle in at approximately 96% in Q1 ’08 and for theremainder of 2008. The drop from 98% to 96% is the result of the estimatedamortization of intangibles from acquisitions. Product margins were 49% in 2007. We expect them to bebetween 35% and 40% for fiscal 2008. The decrease is largely due to growth inDigital Cinema servers and 3D glasses, which have lower margins than ourtraditional product sales. Product margins could fall as low as 25% in thequarter we recognize the deferred Digital Cinema revenue. Turning to operating expenses, we anticipate fiscal 2008operating expenses to be approximately 46% to 47% of revenues, as we continueto invest in new initiatives such as mobile and video. Our tax rate is expectedto be approximately 35%. In summary, we expect fiscal 2008 revenue to beapproximately $560 million to $600 million, including approximately $20 millionin revenue from Coding Technologies. We expect GAAP net income for fiscal 2008to be approximately $148 million to $160 million, which would result inearnings per diluted share of approximately $1.27 to $1.37. We expectstock-based compensation expense for the full year to be approximately $18million to $20 million. We are currently in the process of completing our purchaseprice valuation as it relates to our acquisition of Coding Technologies, andthese numbers could change, but we are currently basing our guidance on anestimated $13 million of amortization of intangibles in fiscal 2008, comparedto approximately $3 million in fiscal 2007. We are currently assuming thatthere are no in-process R&D charges as a result of the acquisition ofCoding Technologies. To the extent that we determine there is, it will becharged to the P&L in our first quarter fiscal 2008. This concludes our prepared remarks. I would now like toturn it over to the operator for questions. Please go ahead. Question-and-AnswerSession Operator (Operator Instructions) Your first question comes from RalphSchackart - William Blair. Ralph Schackart -William Blair Good afternoon, another great set of results, guys. Kevin, Iappreciate the color for ’08. First at a high level, Bill, can you help usunderstand how the Coding is complementary to what you are currently doing withDoCoMo? Bill Jasper DoCoMo is Dolby’s technology, we license Dolby’stechnologies which we have been putting into what we call the Dolby mobileprogram going ahead. I assume you say, this technology you are referring to isCoding Technologies, is that correct? Ralph Schackart -William Blair That’s right, Bill. Bill Jasper They have slightly different technologies which are veryuseful in very, very low bandwidth applications, but in this particular casewith NCC DoCoMo Dolby Digital makes a lot of sense. It is not actually pure Dolby Digital, it is a suite of products we have developed aroundDolby Digital and other technologies that we think will enhance the mobileexperience. Ramzi, would you like to add to that? Ramzi Haidamus Just to add some color to what Bill said, the Dolby mobiletechnology is a post-processing audio technology meant to make the phone soundbetter for playback of media and the Coding Technologies technology, also knownas spectral band replication, it is really think of it as a turbo chargerattached to a codec such as AAC. So in the case of Dolby mobile with NCC, we are reallytalking about a post-process technology; in the case of CT technology, it is acodec which is going to be operating at a lower bandwidth and high quality. Kevin Yeaman In terms of the complementary nature of the businesses, inaddition to the technology aspects, I would just add that given CT’s presencein the handset market, the relationships they have built up and theirexpertise, we do think that it potentially accelerates our strategy of drivingDolby mobile across additional handset models. Ralph Schackart -William Blair Kevin, can you help us think about the earnings impact fromthe acquisition? I know you gave us some data points on the revenue andamortization. I was just curious if you could help us think about the earningsimpact and/or the OpEx of coding. Kevin Yeaman At the highest level, Ralph, Coding Technologies is alicensing business and has a very similar margin structure to Dolby’s licensingbusiness, so you can think of it as adding about $20 million in licensingrevenue and a similar margin structure. Now of course, there is as I mentioned about $8 million ofamortization for intangibles which is included in our GAAP guidance; roughlyhalf of it in cost of licensing, half of it in OpEx. At the outset, we willhave some integration costs and there are some purchase accounting adjustmentswhich affect us early on, and that is included in our GAAP guidance. Ralph Schackart -William Blair When you looked at this acquisition in terms of the internalROI metrics compared to some other deals that you have done, can you help usthink about the order of magnitude of what made this deal relevant today, andhelp us think about that? Thanks. Kevin Yeaman I think what makes us relevant for today, Ralph, is we’vealways said we would be focused on companies with strong IP portfolios which wecan combine with our expertise and realize complementary benefits. In thiscase, as we discussed earlier, it is very complementary to our mobile strategy.We think it potentially accelerates the mobile strategy that we already had inplace, and it is also very complementary to our broadcast business; we thinkthat as more and more digital media is available and broadcasters look to comeup with new applications to get that digital media out there, we think thatadding this technology to our portfolio allows us to meet even more of theneeds of our customers. Bill Jasper We think that the addition of the Dolby brand in thissituation will allow for further expansion of that business. Operator Your next question comes from Ingrid Chung – JP Morgan. Ingrid Chung – JPMorgan Good afternoon, congratulations on your results. My questionis just about the three buckets that you have talked about previously, and whatdo those buckets look like for ’08? And then also, it sounds like you are juststarting to recognize some revenue from mobile. Does that go up several times?How much of CT’s revenue do you think will be for the mobile market? Lastly, in terms of the Internet market, who would youlicense technology to? Would it be a third party vendor or an OEM? Who would itbe? Kevin Yeaman Why don’t I start off with the guidance question, and I willturn the Internet question over to Ramzi when I am done. So I assume, Ingrid,that you are referring to how we are thinking about each of our licensingmarkets? Ingrid Chung – JPMorgan Correct, yes. Kevin Yeaman So as you know, we separatelyreport on CE, which is where the majority of DVD players are reported for us;PC, and broadcast. Then our other category includes gaming, automotive, VIA,and now mobile. So if I focus for themoment on organic growth, since I told you that $20 million of the revenue wasa result, is what we are expecting from the acquisition, the guidance rangecame out to roughly 12% to just under 20% growth from licensing. We areexpecting CE to be flat to slightly up, that is what we are hearing fromindustry analysts and expecting for that market. We therefore expect most of our growth tocome in percentage terms from PC, broadcast and the other market. So we are expecting close to 20%growth, at least, from each of those markets and we are actually expecting alittle more than that out of our broadcast market. Now when we layer in themobile market in particular, the combination with Coding Technologies, theother market category does grow faster because most of the $20 million dropsinto that category. Ramzi Haidamus On the Internet applications, there's severalapplications we believe will benefit from the efficiency of spectral bandreplications that apply in HEAAC, starting with streaming application such asradio on the Internet, TV on the Internet, IT TV, even video on demand on theInternet as well as of course, the large market of music delivery, can allbenefit from a lower bandwidth, high quality technology such as CT's. Target companies, as wasmentioned earlier, could be Apple, Real Networks, and the type of companieswhich provide music players, radio players, all can benefit from technologieswhich CT offers. Operator Your next question comes from StevenFrankel - Canaccord Adams. Steven Frankel - Canaccord Adams Obviously, very impressiveresults. Just to dig into Digital Cinema for a little bit, how many servers doyou have installed in the field today, and is there a ramp between now andBeowulf on the server side as well as the 3D equipment side? Tim Partridge Servers today, we're incommercial theaters about 550 and another 50 in the studios in their special screening rooms. Sothat's where we are today. In terms of Beowulf, it opens next week actually,although we are installing as we speak, we're expecting to do between 75 and 803D screens for Beowulf by the time it opens. Yes a certain number of those havegone is with new servers as well as obviously putting 3D into existing ones. Sothat's the kind of ramping we're expecting, but it is all happening within thenext week. Does that answer your questions? Steven Frankel - Canaccord Adams Does the 550 place you number 2 in the server market? What do youthink your market share is? Tim Partridge Obviously, what I see roll out over the pastcouple of years has placed a large number of servers out there, so we'reclearly behind on market share. But as Kevin mentioned, we do believe that thiswill be a transitional year for Digital Cinema, which on the one hand makes itvery hard to predict, but we do believe we're well positioned if it doeshappen, which we expect it to. With our server obviously, we've got a number ofproducts that are in this market. We've got the server as you know. Weannounced at the last trade show, and we'll shortly be introducing an audioprocessor, a Digital Cinema only version of our flagship, CP650. We also have a couple ofintegration products aimed at Digital Cinema, and of course, the 3D as well. Sowe have a whole suite of products, and the expectation is that Digital Cinema startsramping this year, we do feel we're well positioned. Steven Frankel - Canaccord Adams Looking at the format war in BlueLaser DVDs, do you think the logjam is getting worse or better in the last 90days? Tim Partridge Could you just add some more color what youmean by logjam? Steven Frankel - Canaccord Adams In other words, we have a format war and is itgetting any closer to getting resolved, or do you think that the situation isgetting more clouded given what's going on in the HD DVD camp lately? Tim Partridge Well every time it seems thatsomething is going to let up, somebody drops their price and the market becomeseven more competitive and we are in a situation where we're seeing veryaggressive pricing from both sides, continual generation of content for bothformats. Of course as you know, we're in both formats, so we're just kind ofsitting back and watching, but at this point we really don't see any letup. Steven Frankel - Canaccord Adams On the PC market as you probablynow get a little bit of view of what customers are gong to do post-Christmas,do you think the dual installs of being in Vista and in the third-party softwareDVD players is going to continue post-Christmas season? Tim Partridge That is our feel as well. It is reallydifficult to predict what that trend is going to look like, but at least for thefirst half of FY '08 we agree that there doesn't seem to be a letup of thattrend. Past the first half of FY '08, it's difficult to predict so we're justgong to wait and see how that market plays out. Operator Your next question comes from BrianThackray - Deutsche Bank. Brian Thackray - Deutsche Bank On the broadcast market, you talkabout growth next year being north of 20%; can you talk within that a littlebit about your expectations around government subsidies around set-top box,what you're expecting there? Kevin Yeaman We think the big drivers for us next year willbe the option of digital television is probably the highest growth areas withinour broadcast licensing; set-top boxes is another category for us, we expect todo well there. I think you're referring toprobably the potential for converter boxes as we get closer to FCC mandate. Weare not expecting that to be a big driver for us in the 2008 timeframe; wethink that's a dynamic that will probably come very close to the mandate in2009. Bill Jasper And don't forget we have the three-monthlag. Brian Thackray - Deutsche Bank In the PC market, can you guysmaybe give a little more insight into what you saw from Vistain terms of the incremental contribution in this quarter and where you expectthat to go over the next few quarters? Also from Acer and Toshiba deals interms of how much momentum or contribution you're seeing from those deals? Kevin Yeaman So in terms of Vista,the sequential growth that we saw was driven primarily by increased PC salesand a continued strong attach rate of the Vista Premium Editions in which we'reincluded. As Ramzi said earlier, we do see that continuing at least through theholiday season. Our guidance actually assumesthat there is some lesser incidents of third-party DVD attachments when PremiumVista is sold, so we're leaving a little bit of room there in the second halfin our guidance, although as Ramzi said, we don't have any specific evidence ofthat one way or the other. In terms of your question aboutAcer and other manufacturers that have adopted some of our premium PCentertainment experience, we garnered a number of design wins last year, as youknow. There was not much revenue last year, it was mostly design win stage, butwe do believe that that program will begin contributing revenue in 2008. Brian Thackray - Deutsche Bank Last question with regard to CT,can you talk about the revenue run rate, what it's doing today or where it hasbeen in the last 12 months? Kevin Yeaman It's been growing at about, as I told youwe're expecting about $20 million in our fiscal year. They are on a calendaryear. Their last full reported period was calendar '06, which was about $16million. It's been growing since then at about 20% a year. Of course, as wegive our guidance, we factor in purchase accounting adjustments and those sortsof things which affect you in the early stages. Operator Your next question comes from PaulCoster - JP Morgan. Paul Coster - JP Morgan Kevin, I may not have completelyunderstood your statement about licensing, the upward adjustments to the grossmargin expectations. Does that mean that the licensing dispute is resolved, ordoes it mean that you are just confident it will be? Kevin Yeaman What we said is that wedetermined that there was no need to continue accruing any additional expense,and that was what we said. Is that clear? Paul Coster - JP Morgan So there's no residual conflict with the thirdparty there? Kevin Yeaman Well as you know, we've been accruing someexpenses over the last year. We have an accrual on the books and we thinkthat's sufficient to cover any outcome of the matter. Paul Coster - JP Morgan In terms of the cinema business,what should we be thinking about in terms of long-term gross margin targets,please? Kevin Yeaman Sorry, I missed the beginning. Did you saycinema in particular? Paul Coster - JP Morgan Yes. Kevin Yeaman Obviously it's the early stage of the productcycle, and we've been focused on the quality of the product and customizing itto what we think the market needs. So the early sales are at relatively lowmargins. I said we expect that our overall product margins this year willprobably be in the range of 35% to 40%. Paul Coster - JP Morgan And longer term, what should we be thinkingabout? Kevin Yeaman Over the longer term, once we're talking aboutat volume, and if we're fully considered I would expect them to get back intothe 40s again. Paul Coster - JP Morgan You were looking forward to someacquisitions this year, and you started off in a correct manner, but I wasexpecting it to be video-related; it's video still strategic for the company ona go-forward basis. Bill Jasper Yes Paul, video is extremely strategic. Wejust could not pass up the opportunity to bring Coding Technologies on boardbecause it complements everything we're doing, especially giving someadditional inroads into the broadcast market, as well as supporting the mobilemarket. We continue to focus on video; we're investing the infrastructure tobring products to the market, to take those technologies out to license, andvideo is a very key strategy for the future. Paul Coster - JP Morgan As we think about fiscal year'08, should we expect tuck-in acquisitions, or something more transformationalin nature? Bill Jasper You mean transformational in termof products or technologies? Paul Coster - JP Morgan That plus scale of the acquisition. Bill Jasper Well we're just starting to, we think, takeadvantage of the acquisition of BrightSide last spring, working very closely tobring their technologies to market and complement with some other technologieswe've been developing for the last couple of years at our Imaging Group. Wefully expect to start seeing some technologies and products out in themarketplace, as well as some license products in FY '08. Paul Coster - JP Morgan You haven't bought your way into video codectechnology, so is that likely to figure in your strategy going forward? Bill Jasper Well, as you probably know, the video codecswhich are out there; H.264 is pretty much one of the standards being used. Wehave technologies which we can wrap around that which we think will enhance theexperience, so that is the approach we're following. You said, “bought into”the video technologies; I'm not sure what you mean there, but our approach isto take the standardized options which are available and build on them. Operator Your next question comes from AndyHargreaves - Pacific Crest Securities. Andy Hargreaves - Pacific CrestSecurities Another question about newproducts, on Dolby Volume, have you had any traction there, and does thatcontribute to your CE, your broadcast growth in '08? Ramzi Haidamus We've had a very positive response from ourlicensees in terms of demand for the technology. They continue to be excitedabout it; the demand is there. We do foresee having some prototype product ondisplay at the upcoming CES. In terms of revenue growth, wehaven't really built much for FY '08. Andy Hargreaves - Pacific CrestSecurities Broadcast in the quarter, youpointed out TV growth as being a primary driver. Did I hear you right there, orwas set-top box really strong as well? Can you give us any sense of what themix within that broadcast business is of U.S.versus international? Kevin Yeaman To your first question, I wascommenting earlier on reflecting on fiscal 2007 growth, the drivers beingdigital TV growth as well as set-top box growth. Those are the two maindrivers. But we haven't provided any geographic information by segment andtypically we're getting reported to by our licensees and we don't always haveperfect information on end user. Andy Hargreaves - Pacific CrestSecurities Lastly, you mentioned, I think Iheard you right, that there's a potential for increased competition in DigitalCinema on the audio side if it gains traction? Can you just explain thedynamics there? Tim Partridge Yes that's correct, to the extent that theindustry does transition to Digital Cinema and away from traditional film productsthan our current CP650 of course has technology in it that takes us to thetraditional film, 35mm film. So to the extent that we transition to DigitalCinema, there could be a decrease in demand for traditional film products,which is why I mentioned we have recently shown and will soon introduce a DigitalCinema only version of our CP650. But of course, with that not having the DolbyDigital proprietary technology in there, we do anticipate increased competitionfor that product. Operator Your next question comes from HunterDuBose - Morgan Stanley. Hunter DuBose - Morgan Stanley Could you tell us what theeconomics of the 3D deployments for Beowulf look like in terms of revenue andgross margin? Just coming back to the grossmargins on the licensing business, I wanted to clarify whether the 96% grossmargins you're guiding towards for 2008 are representative of the gross marginsbeyond that period or simply for 2008? Beyond that period, could yougive us just a bit more color why they stepped up quite meaningfully from thelow-90% level they've been at since 2002 on a pro forma basis? Thank you. Tim Partridge Hunter, on the 3D deployment theequipment that we supply for 3D is some hardware, some software and the colorwheels that Bill referred to in his opening remarks. That whole package isapproximately $15,000 and of course, we also supply many pairs of glasses foreach screen and they are a little bit under $50. Margin-wise, the margins on the3D products which go into the projector, are typically of our regular productmargins. However, on the glasses, Kevin referred to in his remarks, that'sclearly almost a consumable item and therefore much lower margins on that. Kevin Yeaman In terms of the licensing gross margins, I'msure you remember that over the past several quarters, we had been accruingroyalty expense related to an ongoing dispute with an unrelated patentlicensor, and so our licensing margins have stayed at their historic levels ofabout 91%. This quarter, or the fiscal fourthquarter of 2007, we determined that it was appropriate to cease accruing thoseadditional royalty expenses. That's what resulted in the 98% licensing marginsfor the quarter. As we look to 2008, the changefrom 98% to 96% is really due to amortization of intangibles for acquisitions,so that was our guidance for 2008 and we don't have any guidance beyond that. Hunter DuBose - Morgan Stanley Is there any reason to believe that it wouldstay at the higher level versus reverting to the historic lower level of around90%? Kevin Yeaman All else held equal, it would stay at the 96%level. The only changes would be if we entered into any sort of additionallicensing agreements as we introduce new technologies, new products, so allelse held equal, that is what we're guiding for, 96% in 2008. Operator Your next question comes from MikeOlson - Piper Jaffray. Mike Olson - Piper Jaffray On the DCI spec, I know this issomewhat out of your hands but is there a risk that this looks beyond secondhalf '08 and what could cause that to be delayed or lead to it gettingcompleted on time? The root of my question is whatreally needs to be done here to get that done, and do you feel that the timingof when you've assumed you'll be able to recognize Digital Cinema revenuesconservative or more aggressive? Thanks. Tim Partridge As you said Mike, it is a little out of ourhands. Specifically, what needs to be done is we need the industry standardsbodies to agree upon a standard or some elements that are written into the DCIspec. So specifically we're waiting for the SMPCE body to publish a spec, andas soon as they do so, we'll start writing the code to implement that spec. So we have an anticipated publishdate but standard bodies and publishing standards sometimes takes longer thanyou require. But we're expecting to be able to do all the work that's necessaryand be able to recognize in the second half of the year. Operator Your next question comes from AlanDavis - DA Davidson. Alan Davis - DA Davidson Kevin, are you willing to sharefor the impact of CT next year, the bottom line and net impact excluding theamortization of intangible increase? Kevin Yeaman Like I said, it's about $20million of revenue. If you exclude the amortization of intangibles and again thereare some early effects of integration costs and purchase accounting itbasically looks like the same type of margin structure as Dolby's licensingbusiness. Alan Davis - DA Davidson Do your underlining assumptionsfor the number of Digital Cinema screens getting rolled out globally in yourfiscal '08? Tim Partridge Alan, we're looking to the deployment agenciesthat are talking about deploying this year, and a number of them are talkingabout deploying in the March timeframe. As we've seen in the past, noteverything that is anticipated comes to pass and there are many issues, the DCIone that we just mentioned being one of them. That could slow that down, but wedo anticipate that people will start moving this year and as for the actualnumbers, it's very dependent on whether these things come to pass or not. Alan Davis - DA Davidson Fair to say you're taking a conservativeapproach with your assumptions? Tim Partridge I think we're taking a realistic approach,yes. Alan Davis - DA Davidson On the M&A side, jus curioushow you might characterize your activity there? I know you just obviouslyacquired CT but looking forward, couldyou characterize the size of future deals, how big are you willing to go,depending on the technology you're acquiring and is there a minimum cashbalance that you would like to have on the balance sheet that you wouldn't gobelow? Just trying to get a characterization of maybe the size of the deals inthe pipeline. Bill Jasper Well, any potential acquisitions obviouslyhave to fit into what we're doing from a technology standpoint whether they bein the audio field or video field or other. Coding Technologies was obviouslyour biggest acquisition to date, but we did acquire BrightSide earlier thisyear, as you well know, which was much smaller. We don't have any specificparameters in terms of acquisitions and don't comment upon anything we may belooking at. But suffice it to say we will go after any acquisition which webelieve we can absorb financially. We don't have any set fixednumber for cash on the balance sheet, but we obviously believe that cash is animportant asset and we will make sure that if and when we find any proposedacquisitions which fit from a technological standpoint that we would makecertain that transaction fits in with our overall financials. Alan Davis - DA Davidson For fiscal '08, what's theprojected amortization on intangibles and then the total D&A? Kevin Yeaman The projected amortization ofintangibles is about $13 million, and that's the estimate as it relates to theCoding Technologies acquisition. It is preliminary at this stage, but ourcurrent estimate is $13 million. I haven't given a total D&A estimate yet,but we expect that to be in the neighborhood of just over $25 million. Operator We have no further questions atthis time. Mr. Jasper, I would like to turn the conference back over to you forclosing remarks. Bill Jasper We feel we've had an excellentyear and we look forward to talking to you next quarter at the end of ourDecember quarter, first quarter fiscal 2008. We appreciate your interest, andagain thank you very much. Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited. 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OncoSec Medical, Inc. (NASDAQ:ONCS) appears to be one of the best-kept secrets in the biotech sector. As I have watched the developments over the last few months and see what could be in store in coming weeks and months, I can't help but think the upside for this $19 million company could be substantial for shareholders. However, with each spike in volume and share price as promising events unfold, the company's common shares seem to settle back to its current level of support around $0.20 per share. My view on the strange behavior of the company's stock price is fairly simple. Traders rather than shareholders have been creating liquidity and spikes in the share price with each positive PR. It is my opinion that these traders are content with quick 10-20% gains as they exit the stock and never look back. However, once true investors who are more interested in midterm and longer-term holdings begin buying the shares as they gain more of an understanding of what the company and its OMS platform is about, I anticipate a steadier uptrend to expected catalysts. It is these true long holders that will control the fate of the company's share price as they consume the float and traders have fewer shares to work with as the investors hold strong. However, until these shareholders understand where this company could be going, the stock chart could remain in the current tight range it is currently trading in. I contacted OncoSec CEO and president, Punit Dhillon, in order to help us gain a better understanding of the company's plans and future prospects. He was gracious enough to answer a few questions to give us a better feel for where the company could be heading in the coming weeks, months, and years ahead. [CF] Mr. Dhillon, thank you for taking time from your busy schedule to speak with me and your company's shareholders. It says a lot about a company's management when it is willing to step out of its comfort zone and address shareholders directly. [CEO] Thank you. I appreciate the opportunity to address any concerns and provide some answers for the shareholders who put faith and trust in our joint venture of company and investors. [CF] Could you give us a status on the ongoing statistical re-evaluation of the NeoPulse phase III data? [CEO] We have completed analysis of the phase III H&N cancer data and presented these results at this year's International Head and Neck Cancer Conference (July 2012 - Toronto, Canada). The abstract for this data presentation can be found here and our press release regarding the data here. Currently, we are evaluating the extensive database of information obtained from both the phase III and IV NeoPulse trials pertaining to the pharmacoeconomic benefit for our therapy. These results will likely be published in Q1 2013. [CF] Would it be wise to have a third party review the data to present a more unbiased interpretation of the results? [CEO] Yes, it is always beneficial to have a third party review data from your clinical trials. However, with only so many resources and a strong focus on the ImmunoPulse program, it is currently not a priority for the company. Our focus for the NeoPulse program is to present the data to a number of specifically targeted potential partners for their evaluation as a license opportunity. If we can land a partner for this program, which we see as a near-term commercial opportunity, then we feel that this would be a significant validation of our data and the NeoPulse program. [CF] Will interim data for the two most advanced phase II ImmunoPulse trials come out in Q4 or could it be Q1 2013? [CEO] Interim analysis is currently on going for both the melanoma trial (OMS-I100) and the Merkel cell carcinoma trial (OMS-I110). These results are expected to be presented at a scientific conference before the end of 2012. [CF] I love the obvious adaptability of your OMS electroporation platform to potentially use any of a number of cancer treatment agents. Are there any plans on trying different chemotherapy or immunotherapy agents in the short to mid term? [CEO] Yes, the company is continuing to evaluate several different agents, both chemotherapeutic and immunotherapeutic, in combination with our OMS electroporation device. [CF] The trial data seems impressive so far. Can you put a "real world" perspective on the treatment in terms of its effect on an individual patient or patients? [CEO] Certainly. In a recent article in the San Francisco Chronicle, David Amoroso, a patient undergoing a clinical trial at UCSF using ImmunoPulse for metastatic melanoma, had only a 24% chance of living to see the next decade. He started the study in March 2012, and our OMS treatment "seemingly zapped all but two of the six cancerous lumps that are evident." Mr. Amoroso commented "the fact that four tumors are gone," he said, "to me, seems successful." Mr. Amoroso elaborated comically on the only real side effects of the treatment "you're getting 1,300 volts, and all of a sudden it just hits you and you're in shock for about two seconds and there's no residual pain following it. It really feels like somebody whacked you with a two-by-four on the side of your head without pain." [CF] What would you like to convey to potential shareholders from a financial and investment standpoint? [CEO] I believe OncoSec is extremely undervalued considering our data and efficacy results. Our phase I data are best in class for any metastatic melanoma program in history. We have met every milestone that we have set out to reach from the birth of the company, have been extremely aggressive in our timelines and have exceeded our enrollment expectations for our programs. We have exciting milestones coming up - all to be complete by the end of 2012. These include but certainly aren't limited to revealing subset data from our melanoma and Merkel cell program and potentially providing updates on deals pertaining to our NeoPulse program. [CF] Share price isn't there yet, but are there plans on uplisting to the big boards? [CEO] Yes, the plan to uplist is in our future. [CF] What sets OncoSec and its platform apart from the rest of the novel cancer therapies currently in development? [CEO] OncoSec is uniquely positioning itself in the cancer immunotherapy space. For many years, scientists and clinicians have known that many cancers are caused by a dysfunction of the immune system, and as a result they have identified numerous immunological targets with potentially powerful benefits. Unfortunately, until now, the significance of these discoveries in terms of translation into success in the clinic has been disappointing largely in part due to the inability to properly deliver enough of these new agents to elicit a response while maintaining an acceptable level of safety for the patient. Recently, new methods of delivery have been established such as viral vectors, cationic liposomes or autologous cell delivery, which carry DNA, or molecular instructions, directly to the cell to produce an immunogenic agent. This has been a revolution in cancer drug delivery because this route of administration not only targets the tumor directly, it also reduces the amount of agent required to elicit a therapeutic effect - therefore theoretically leading to potential improved responses and patient safety. Clinical trials using these routes of administration have demonstrated some success, but they have also come with some pitfalls. Early trials using adenoviral vectors resulted in significant safety issues, which have unfortunately delayed the development of this approach. Fortunately, it appears that these safety issues have been resolved and a number of companies have continued to develop immunotherapies using this viral vector approaches, however, it still remains unclear as to the long-term effects for the patient when delivering a biologic agent such as a virus. Cationic liposomes have demonstrated safety and some efficacy as well, however, the transfection efficiency (i.e. the ability to deliver the DNA to the cell with minimal effort and energy) is in question. As a result, clinical trials using this delivery method often require a number of treatments which can extend as long as 6-8 weeks. Lastly, the autologous cell delivery approach has recently received significant attention in cancer immunotherapy because it is the mode of delivery of choice of PROVENGE, the first cancer immunotherapy ever approved in the US. However, the attention received has been quite negative, particularly because it appears that this method, though effect, has proven to be prohibitively expensive for many patients and healthcare providers to consider as a primary or even secondary treatment option. On the other hand, OncoSec has an established delivery method, electroporation, which provides the same benefits, while reducing the mitigating concerns related to other intralesional therapies. The OMS device uses electric fields to efficiently deliver DNA into cells. These electric fields are inert and dissipate once the electroporation is stopped, thus there is no concern about residual long-term effects. Moreover, the efficiency of delivery using electroporation is significantly better than other approaches. Where other treatments can last several weeks, results from our phase I study demonstrated that only 1-week of treatment could result in clinical benefit for late-stage cancer patients. Lastly, OncoSec's approach is simple and cost-effective. It is being developed as a potential out-patient clinic treatment, and the cost of goods for the company (i.e. device and DNA) is minimal. Taken all together, the ImmunoPulse treatment has demonstrated improved safety, efficacy and cost. [CF] Sounds impressive and promising. Are any regulatory filings/trials planned for international markets? [CEO] Yes, the company does expect to eventually target international markets. However, our focus is currently on the success of our ongoing clinical trials and executing on the development plan for the ImmunoPulse program. [CF] Any final words for current or potential shareholders? [CEO] In less than two years, OncoSec has started three phase II clinical trials. Two of which have already exceeded enrollment goals. When you look at our data and efficacy results, along with our clinical pipeline and company milestones, it can definitely be argued that OncoSec is extremely undervalued. We are targeting a deadly disease that is only growing and escalating year-by-year, and current treatment options have shown to be expensive with major quality of life consequences. OncoSec has hit every milestone we have set out to reach and plan to continue this trend. We have exciting milestones coming up and plan to announce subset data on our melanoma program and Merkel cell carcinoma program in upcoming months. Disclosure: I am long ONCS. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

With nine terms under his belt, it appeared Democrat Sanford Bishop had locked up Georgia's 2nd Congressional District. But this November, he faces his best-funded GOP challenger in years. Mike Keown, a Baptist preacher and Georgia state legislator, iscapitalizing on conservative backlash to the policies of the Obama White House. "When it comes to Obamacare, I think that if Republicans take the House, and I'm a part of that majority in the House, that you're gonna see a repeal bill come out of the House," Keown said. As a member of the moderate to right-leaning Blue Dog Democrats, Bishop, an African-American, has spent most of the past two decades with strong biracial support in his Southwest Georgia district, which is 45 percent black and 51 percent white. But his support of health care reform has alienated many white voters who supported him in the past. "There is a very strong racial polarization that I think is really symbolized by the health care issue," said Emory University Professor Merle Black, an expert in Southern Politics. "That issue split Bishop's constituency, the individuals who elected him in the past." Bishop has also suffered bad press for directing thousands of dollars in Congressional Black Caucus Foundation scholarship money to family members. He later agreed to reimburse the foundation. But the controversy opened him up to attacks by his opponent. "This wasn't even a whole lot of money," Keown said. "But it's all about a spirit of ownership instead of stewardship. And that's what I see. What's happened with Sanford Bishop is a snapshot of what's happening in Washington. And that is, 'It's ours. We own it. We can do with it what we want to.'" But the Keown campaign is not immune to controversy. Its chief strategist, Jarrell "Jay" Walker, was among several lobbyists indicted in a federal investigation into alleged vote buying for casino gambling in Alabama. "We were troubled by the allegations brought to our attention (Monday)," Keown's campaign manager Andrew O'Shea said in a written statement. "Jay Walker, who had done some consulting work for us, is no longer affiliated with our campaign effective immediately." According to Professor Black, Bishop still has the advantage. "He doesn't need very much in the way of white support," he said. "If he can get about a fifth to a fourth of white voters in the district, and has a healthy turnout among African-Americans, then he should be able to hold the district." However, Black said Keown may benefit from like-minded Tea Party conservatives who are energized by this midterm election cycle, while Bishop's traditional supporters run the risk of complacency. "It's less excitement," said Duke Johnson, owner of DJ's Barber and Beauty Salon in Albany, Georgia, which serves a predominantly African-American clientele. "I don't hear anybody too much just saying, 'I'm trying to go for this person or that person.'Everybody's low key now -- just trying to work, trying to save every dime they can get." FOX News traveled to the district in an attempt to speak with Bishop. He backed out of a scheduled on-camera interview. His campaign said the congressman was feeling ill. Jonathan Serrie joined Fox News Channel (FNC) in April 1999 and currently serves as a correspondent based in the Atlanta bureau.

The United States has given Thailand $10 million in gratitude for its help in the arrest of Asia's top terrorist suspect, Prime Minister Thaksin Shinawatra (search) said Wednesday. Hambali (search) , an Indonesian whose real name is Riduan Isamuddin, is accused of masterminding last year's nightclub blasts that killed 202 people on the Indonesian island of Bali and other bombings. He is the alleged operations chief of Jemaah Islamiyah (search) , a Southeast Asian terrorist network with links to Al Qaeda (search) . Shortly after his Aug. 11 capture, President Bush called Hambali "one of the world's most lethal terrorists." Hambali was seized in the ancient temple city of Ayutthaya, 50 miles north of Bangkok, by Thai forces and the CIA. He was handed over to U.S. authorities three days later and flown to an undisclosed location for interrogation. "The U.S. government has already given us $10 million for help in the arrest of Hambali, and we will allocate this fairly to the agencies concerned," Thaksin told reporters. He said the money would be split among the National Security Council, the Military Security Center, the Special Branch Police and local police who helped in the arrest. Earlier, reports surfaced in Bangkok that Washington had offered a $4 million bounty for Hambali's capture but this was never confirmed by American authorities.

Democratic presidential hopeful John Edwards (search) emphasized his Southern mill-worker background before a New York labor audience Monday, telling garment workers who have lost their jobs to overseas factories that "I take this personally." "Your country needs to be there for you. It's no more complicated than that," Edwards told a laid-off worker at the Unite union's New York headquarters. The North Carolina senator cited his own family's hard times when the North Carolina textile mill where his father worked was shut down. Edwards promoted an economic program he has said would help restore lost American jobs. He also sought to pick up former supporters of Vermont Gov. Howard Dean (search) and would-be supporters of Ralph Nader (search). Edwards told reporters that those who supported Nader four years ago should vote for Edwards now. "A lot of those voters would find me appealing," he said. He said both he and Nader, who announced on Sunday an independent bid for the presidency, were high on "consumer issues" and "fighting for the little guy." Edwards said he had talked to Dean several times since Dean's withdrawal from the race and was reaching out for his support but had no specific commitments. However, he said that he was picking up support from many former Dean supporters in March 2 "Super Tuesday" states, including Ohio. Edwards will start running two commercials Tuesday in upstate New York media markets, but he is avoiding the ultra-expensive New York City market, where a week of ads costs at least $1 million. The ads, previously run in other states, focus on manufacturing and jobs and claim that there are two Americas. Edwards draws contrasts with Kerry largely along class lines, pointing to his humble background and letting voters compare that with Kerry's patrician upbringing. He made that case — that he better understands the problems facing working families — again on Monday. He presided over a round-table discussion at Unite, which represents 500,000 textile, garment and laundry workers. Omar Alexander, 59, said he had been laid off last year as a cutter after working for the same clothing company for 33 years when that company moved its operations overseas. The company "didn't take one worker with them," Alexander said. "What's going to happen to people like me?" Edwards, citing the "dignity I see in your face," told Alexander: "Men and women just like you built America. We ought to trade in a way that works." "This is something that crowd in Washington just doesn't get," he said. After touring the industrial Midwest over the weekend, Edwards was campaigning in New York and Georgia on Monday. He said he was relishing two campaign debates in the coming week, one in California and one in New York, both to be attended by Kerry and the other remaining Democratic candidates. He has pledged not to attack his opponents, but he said he will emphasize distinctions between himself and Kerry. The debates, Edwards said, are "an opportunity for the first time for voters to focus on the two of us." Not only will voters see differences on issues, he said, but "what kind of candidates we would be against George Bush."

Descendants of extinct mammals like the giant woolly mammoth might one day walk the Earth again. It isn't exactly Jurassic Park, but Japanese researchers are looking at the possibility of using sperm from frozen animals to inseminate living relatives. So far they've succeeded with mice — some frozen as long as 15 years — and lead researcher Dr. Atsuo Ogura says he would like to try experiments in larger animals. "In this study, the rates of success with sperm from 15 year-frozen bodies were much higher than we expected. So the likelihood of mammoths revival would be higher than we expected before," Ogura said in an interview via e-mail. While frozen sperm is commonly used by sperm banks, the team led by Ogura, at Riken Bioresource Center in Ibaraki, Japan, worked with sperm from whole frozen mice and from frozen mouse organs. "If spermatozoa of extinct mammalian species can be retrieved from animal bodies that were kept frozen for millions of years in permafrost, live animals might be restored by injecting them into [eggs] from females of closely related species," the researchers said in a paper appearing in Tuesday's issue of Proceedings of the National Academy of Sciences. Intact mammoth bodies have been excavated from Siberian permafrost. Dr. Robert W. McGaughey, laboratory director at the Institute for Reproductive Studies in Scottsdale, Ariz., commented that since some of the whole frozen mice had been held for 15 years before obtaining the sperm nuclei "it clearly is possible that some day we may be able to obtain offspring from extinct animals frozen at reasonable temperatures for very long periods of time." The downside, added McGaughey, who was not part of the research team, is that an extinct animal probably would have to have been continuously maintained at a low temperature to avoid thawing/refreezing damage. Elephants would be a potential candidate for insemination with frozen mammoth sperm, Ogura said. He also suggested experiments might be tried with extinct feline species and their modern relatives. Less enthusiastic was Dr. Peter Mazur, a biologist at the University of Tennessee who has worked with frozen eggs and sperm and is a past president of the Society for Cryobiology. Mazur thinks the chance that frozen sperm from mammoths could be used to fertilize a related species is near zero. "The storage temperature of frozen mammoths is not nearly low enough to prevent the chemical degradation of their DNA over hundreds of thousands of years," he commented. And "even if the temperature were low enough to prevent chemical degradation, that would not prevent serious damage over those time periods from background radiation, which includes cosmic rays." Bringing back extinct species is an interesting suggestion, Dr. Douglas E. Chandler of the Arizona State University School of Life Sciences commented. "The trick however is to find an acceptable species that would act as the mother," added Chandler, who was not part of Ogura's research team. If an elephant egg were used "the offspring would not be a mammoth but a hybrid between an elephant and a mammoth. If one wanted a true mammoth one would have to find a source of viable mammoth [eggs] to fertilize and implant and this is a much dicier proposition." McGaughey agreed, "It is unlikely eggs from such frozen animals would survive; therefore only the sperm would be available to put into eggs from an existing and appropriate modern mammal to approximate the extinct one." The research requires considerable technical expertise, Chandler said, adding that Ryuzo Yanagimachi, one of Ogura's researchers, "is a longtime worker in this field and is highly respected. He and his colleagues clearly are experts appropriate for this work." Ogura's research was funded by the Japanese ministries of education and health, and the Human Science Foundation of Japan.

Republican Rep. Duncan Hunter, chairman of the House Armed Services Committee, said Monday he will run for president in 2008. "This is going to be a long road, it's a challenging road, there's going to be some rough and tumble, but I think it's the right thing to do for our country," Hunter, who has represented the 52nd Congressional District in San Diego County for 26 years, said at a waterfront press conference. The declaration allows the California congressman to begin raising money and organize supporters in early Republican primary states such as Iowa, New Hampshire and South Carolina. • Click here to visit YOU DECIDE 2006, FOXNews.com's complete election center. Hunter's bid surprised some Republican leaders in Washington. He had not been discussed as one of the many candidates considering a presidential bid, including Sens. John McCain of Arizona, Massachusetts Gov. Mitt Romney and former New York City Mayor Rudolph Giuliani. Analysts quickly characterized the quest as a long shot. "You never say never, but Congressman Hunter faces extremely long odds given that practically no one apart from students of Congress knows who he is," said Jack Pitney, a government professor at Claremont McKenna College. "He's a good member of Congress, a very effective chairman of Armed Services. It's just that he has no following within the party." Hunter could see an opening for a conservative candidate with strong defense credentials, Pitney said. Hunter, 58, became chairman of the House Armed Services Committee in 2003 — a position he would lose should Democrats take control of the House after the Nov. 7 midterm election. By making an announcement now, he can begin raising money while still heading the committee. The Vietnam War veteran, a recipient of a Bronze Star, has made his mark in Congress by advocating for a strong military and border security. He played a leading role in the construction of a 14-mile double fence on the U.S.-Mexico border that is nearing completion in San Diego. He co-authored legislation signed by President Bush last week that would extend the border fence to 700 miles. Hunter voted against the North American Free Trade Agreement and the Central American Free Trade Agreement and opposed most-favored-nation status for China. This year, he was a vocal critic of a deal that gave a Dubai company control of some operations at six American ports. Hunter has cruised to re-election since he, as a 32-year-old criminal defense attorney, rode Ronald Reagan's coattails to unseat a nine-term Democratic incumbent. The Riverside native faces token opposition next week in his bid for another term representing San Diego's eastern suburbs. Hunter was a close ally of former Rep. Randy "Duke" Cunningham, a California Republican who was sentenced to more than eight years in prison this year for accepting $2.4 million in bribes from defense contractors. Hunter has accepted $46,000 in campaign donations from the same contractors at the center of the Cunningham scandal, Brent Wilkes and Mitchell Wade. Carl Luna, a political science professor at San Diego's Mesa College, said Hunter may be preparing himself for losing the Armed Services Committee chairman slot. "Duncan Hunter is looking for something to do if the Democrats take control of the Congress," Luna said. "He doesn't want to have to go from being chairman of a powerful committee to just another backbencher." Things didn't end well for the last California House member to run for president — Republican Robert Dornan in 1996. Dornan, a vociferous conservative known by the nickname "B-1 Bob" for his support of military programs and bombastic style, spent his time and money on a fruitless White House bid and ended up losing his House seat to Democrat Loretta Sanchez.

Successful businesses consistently search for new ways to reach customers, not only through new channels of communication, but through the channels they use each day. Google, as one of the top tools used by consumers everywhere, has the attention of almost every brand. If they can find a way to reach Google users through their searches, businesses realize they can increase brand recognition and bring in new customers. Google has worked hard to make sure its paid ads deliver real value to business. This keeps companies paying for the service even when they could get clicks by deploying organic campaigns. Here are a few things your business should know about Google’s targeted ads. Related: How to Use Targeted Advertising on Facebook and AdWords Different types of targeting. When a brand uses Google to reach out to customers, that brand wants to know that it’s reaching those who are most likely to make a purchase. Through contextual targeting, Google delivers a business’s ad to customers who are likely to be interested in it. Ads are matched to those customers who have shown an interest in the same type of products or services in the past. Google also offers placement targeting, which puts relevant ads on the sites your customers are likely to visit. This includes RSS feeds, videos and mobile websites. Remarketing targets customers who have viewed items on your site, delivering ads for your business as they’re visiting other sites that are part of the Google Display Network. Cost is flexible Worry about cost is holding some businesses back from using Google targeted ads. What those businesses sometimes don’t realize is that Google’s pricing is decided using an auction process. Businesses set the price they want to pay for an ad spot and that price is compared with other advertisers when an ad spot comes open. Brands have three choices of ad types to choose from. They include cost-per-click (CPC), cost-per-thousand impressions (CPM), or cost-per-acquisition (CPA). With CPC, you pay only for the clicks you get, while CPM allows you to bid per thousand views. CPAs let you pay only when a click leads to a conversion. These options mean you’ll only pay for results, which maximizes your spend. Related : 3 Ways Customer Data Allows for Pinpoint Marketing Not ideal for everyone. As valuable as Google can be to businesses, the truth is that the platform isn’t for everyone. According to one expert, small businesses may find it difficult to compete with big-spending brands shelling out hundreds of thousands of dollars each month on their ad campaigns. Small businesses are generally much more conscientious about their advertising budgets, with more thought given to ensuring each dollar spent brings a customer in return. Large brands aren’t that accountable for every dollar, which puts them at an advantage. Because they can spend freely on the platform, they often dominate ads, making it impossible for smaller brands to compete. It’s important that small businesses realize this before putting a large chunk of their ad budgets into Google targeted campaigns. That money could be perhaps better spent on social media ads or organic efforts. Required to be competitive. Despite its issues, however, Google ads may be necessary for brands to remain competitive. When a business’s competitors are using the service, even the smallest business may find customers simply can’t find it without having at least a small Google ad presence. To maximize their ad spends, small businesses should carefully watch their analytics to make sure the money is leading to legitimate clicks. If those clicks convert, the expense is worthwhile. Over time, however, if a business’s sales aren’t coming from Google targeted ads, a brand should reevaluate its advertising choices and find a more lucrative path. Google’s targeted ads are a great way for brands to reach customers. However, the platform isn’t for businesses of all sizes or industries. By understanding this, businesses can maximize their ad dollars, finding a resource that fits their own customer bases. Related: What Digital Ad Agencies Need to Navigate the Future

Spain's Princess Cristina appeared in court Thursday to testify at her tax fraud trial. Her testimony essentially alleged that her husband, the former Olympic handball medalist-turned-entrepreneur Iñaki Urdangarin, was responsible for the bills and she wasn't aware of costs, as she was caring for the couples' four young children. In question was an African safari and more than 1,000 euros ($1,100) for wine charged to a credit card for a company the couple co-owned. The princess spent about 20 minutes fielding questions from her lawyer and giving answers aimed at distancing her from involvement with Aizoon, the real estate consulting company Urdangarin ran from an office inside the Barcelona mansion they lived in for years but were forced to sell as their legal troubles mounted. Asked by her lawyer why she never talked with her husband about what the company did, Cristina responded, "They weren't issues that interested me. At that time my children were very small, and we were very busy." "He was in charge of the family expenses. I didn't get involved in that," she added. The case centers on accusations that Urdangarin used his former title of Duke of Palma to embezzle about 6 million euros ($6.6 million) in public funds for the nonprofit Noos Institute, which he ran with a partner that put on sport conferences. Seventeen people are charged in the case, including Urdangarin and the princess. Money went from Noos to Aizoon, which Urdangarin and the princess testified was set up to receive his income. A three-judge panel hearing the case will weigh whether the couple criminally abused Aizoon, described in court papers as a "front company" that may have funded luxury vacations and parties at the couple's modernist mansion along with other expenses. Immediately after taking the stand, Cristina invoked her right to answer only questions posed by her own lawyer and sat silently and listened, but didn't respond to questions posed by a lawyer for the group that leveled the tax fraud charges. Under Spanish law, groups like the Manos Limpias (Clean Hands) organization involved in the princess' trial can pursue criminal charges against people when authorities decide not to do so. Prosecutors had recommended not charging the princess, saying she should face an administrative fine at most. The Manos Limpias lawyer, Virginia López Negrete, told the princess she would have asked her about Aizoon and for explanations about personal and business expenses. Cristina's much-anticipated court appearance came after Urdangarin wrapped up three days of testimony and was unable to explain in court how personal expenses like the safari trip and the wine were billed to the Aizoon credit card. But Urdangarin insisted he never knew he might have been doing anything questionable. Cristina faces two counts of tax fraud, each carrying a maximum jail sentence of four years. She is the first member of Spain's royal family to face criminal charges since the monarchy was restored in 1975. Urdangarin faces stiffer charges and a possible jail sentence of nearly 20 years. Urdangarin testified that his wife never used the Aizoon credit but that he and other people did, passing the bills to his secretary at the firm. An investigative judge found that the couple never reported as income personal expenses billed to the company, but Urdangarin testified he relied on the advice of others for determining which expenses should be charged to Aizoon. "I have never been aware of committing any tax offense, because I had my advisers who told me everything was correct," Urdangarin said. The expenses charged to Aizoon cited in court included 15,797 euros ($17,174) for the Africa safari, 6,672 euros for a coaching course for Cristina and 1,357 euros for wine. Urdangarin said he had made Cristina a co-director of Aizoon because he wanted her to be part of the business project but also insisted, "She didn't have anything to do with the company's activities." He testified Wednesday that palace officials who worked for former King Juan Carlos oversaw the princess' tax filings and had detailed knowledge of his business operations. Cristina is the sister of King Felipe VI, who took power in 2014 after their father abdicated. Legal experts say Cristina's defense relies on her convincing the judges that she knew nothing about her husband's business activities. Testimony by the defendants ended Thursday night but the judges are expected to hear months more testimony from other witnesses and experts. Cristina won't have to appear in court again until there is a verdict, which isn't expected until sometime over the summer. Based on reporting by the Associated Press. Like us on Facebook Follow us on Twitter & Instagram

Over the years I have attempted to run other operating systems besides Windows on my primary workstation. I have run OS/2 in the past. I've tried running various flavors of Linux. I've also tried running OS X on my MacBook Air. Every time I tried, I found that there was always something lacking in the OS, or the applications, that resulted in my returning to Windows. I suppose one question that comes up is, "If everything you need is under Windows, then why are you trying to switch away from it?" The truth is that while I like the capabilities of the applications, I actually prefer a Unix-like environment under the hood. Ubuntu can give me that, but there's a great deal of functionality missing that I get from Windows applications. The same situation exists under OS X. This past month, however, fellow ZDNet columnist James Kendrick wrote an article covering the release of the latest version of Parallels Desktop for OS X. This latest version was written to support the new release of OS X, Lion, and has improved speed. Native Windows applications running in seamless mode are nearly as fast as native OS X applications. There's no need for me to rehash reviews of Parallels Desktop 7. If you're familiar with the product, or with VMware Fusion 4, then you know what I'm referring to. Even VirtualBox has a seamless mode, although performance-wise it isn't as powerful as the other two. It is free, however. I'm sure I will be told, "These programs existed before, why didn't you use them?" To be honest, I hadn't been impressed with the performance or seamless capabilities of the VM applications until now. I wanted the Windows applications to run in seamless mode as if they were native OS X applications. Having access to the Windows start menu from the OS X menu bar, along with Windows system tray icons, adds to the perfect convergence of the two operating systems. Sometimes it's the little, inconsequential features that really impress me. For instance, you can have Windows use the native OS X user directories for documents and downloads instead of creating its own within the virtual machine. Copy and paste just works between environments, without any tricks required to get it to work. I can access the Windows control panel and other functions as if they were a native part of OS X. My main argument against switching from Windows was always, "Why should I have to give up my applications? Why do I have to settle for reduced functionality?" Well, now the answer is that I don't have to settle. I have all of my apps, and they work. I have replaced a few of the programs I use with their OS X counterparts because they are fully functional native applications. The ones I didn't replace I simply installed under Windows in the Parallels VM, and added their icons to the OS X dock bar. Convergence is a great thing when it works well. I'm not the kind of person to settle for passable, or reduced functionality. I felt the same way some years ago when I got my first smartphone that could be a phone, MP3 player and PDA, without making any sacrifices. Now I can do the same on my primary computer. I have Windows, OS X and Unix capability, all in one, without having to jump through hoops to do it. See also:

Cabot Corporation (NYSE:CBT) F1Q10 (Qtr End 12/31/09) Earnings Call January 28, 2009, 14:00 pm ET Executives Patrick Prevost - President & CEO Eduardo Cordeiro - CFO & EVP Dave Miller - GM of Core Segment Sean Keohane - GM of Performance Segment Analysts Lucy Watson - Jeffries Jason Minor - Deutsche Bank John Robert - Buckingham Research Jeff Zekauskas - JP Morgan Saul Ludwig - KeyBanc Jay Harris - Investor Christopher Butler - Sidoti & Company Jonathan Chung - Laurel Operator Good day, ladies and gentlemen. And welcome to the First Quarter 2010 Cabot Earnings Conference Call. My name is [Shimita] and I'll be your coordinator for today. At this time all participants are on listen only mode. We'll conduct a question-and-answer session towards the end of today’s conference. (Operator Instructions). As a reminder, this conference is being recorded for replay purposes. I would now like to turn the presentation over to your host for today's call, Ms. Christine Bracken [ph] with Investor Relations. Please proceed. Christine Bracken Thank you. Good morning or good afternoon. I would like to welcome you to the Cabot Corporation First Quarter 2010 Earnings Teleconference. Here this afternoon, are Patrick Prevost, Cabot President and CEO; Eddy Cordeiro, Cabot's Chief Financial Officer; Dave Miller, General Manager of the Core Segment; Sean Keohane, General Manager of the Performance Segment, Fred von Gottberg, General Manager of the New Business Segment; Ravi Paintal, General Manager of the Specialty Fluid Segment; Jim Kelly, Corporate Controller; and Brian Berube, General Counsel. Last night we released results for our first fiscal quarter 2010; copies of which are posted in the Investor Relations section of our website. For those on our mailing list, you received the press release either by email or fax. If you are not on our mailing list and are interested and receiving this information in the future. Please contact to me in Investor Relations. The slide that accompanies this call is also available in the Investor Relations portion of our website and will be available following the earnings teleconference in conjunction with the replay of the call. I will remind you that our conversation today will include forward-looking statements, which are subject to the risks and uncertainties and Cabot's actual results may differ materially from those expressed in the forward-looking statements. A list of factors that could affect Cabot actual results can be found in the press release we issued last night, as well as in our 2009 form 10-K filed with the Securities and Exchange Commission, Copies of which are available on our website. I will now turn the call over to Patrick Pravo, who will discuss the key highlights of the company's performance for the quarter. Eddy Cordeiro will than review the business segment and corporate financial details; following this Patrick, will provide closing comments and open the floor to questions. Patrick? Patrick Prevost Thank you, Christine, and good afternoon. We are very pleased to report strong results this quarter. Excluding some positive onetime effects we're performing at pre-downturn earnings levels despite lower sales volumes. Looking at the highlights for the quarter, several key things emerge. First markets have continued to recover worldwide, and we benefited from improvements in all end markets in all regions. Second, our restructuring program has rebates the fixed costs of the company, improving results significantly. Third, our existing strong position and continued investments in emerging markets have allowed us to leverage the dramatic upturn in demand occurring in those regions. And finally, throughout the downturn, we have successfully maintained robust underlying unit margins in our business. All of these factors have contributed to this quarter's performance. Let me give you some details in each area. First in the area of volumes, as you may remember in the first fiscal quarter of 2009, we experience a rapid month on month decline in demand, which resulted in one of our weakest sales month on record in December 2008. Today, although we remain roughly 10% below peak 2008 levels, volumes in the first quarter of fiscal 2010 show the 20 to 25% improvement over the last year with increases in all of our regions and in markets. Relative to the fourth quarter of 2009, however, sales volumes remain relatively flat. This can nonetheless be seen as a positive development as many of our businesses typically display season weaknesses during the December quarter. Data we're seeing from the broader end markets indicate that demand in the entire automotive infrastructure and electronics sectors has grown during the second half of calendar year 2009, particularly in emerging markets. Volumes, however, stayed shy of the peak 2008 levels. Our customers are now indicating that volumes will stabilize around currently levels, as most players downstream in the value chain have somewhat replenished their stocks, and are cautious about the coming months. Thus far in January, our volumes are tracking the first quarter levels. Second, on the restructuring side, we have delivered on the program announced at this time last year. As promised, we have captured more than $80 million of fixed costs on an annual run rate basis. This has been done well ahead of our initial plans and at a lower cost than expected. The actions we took, we based the cost structure of the company and give us more competitor platform from which to grow. Our effective execution of the restructuring benefited first quarter results by more than $20 million. Looking at our emerging market position, with the investments we made over the past several years, we are uniquely positioned in these high growth markets. This is particularly true in China, Southeast Asia and South America, where demand has been less affected by the crisis and the recovery has been more rapid. We have been very successful at strengthening our competitive position throughout the downturn. Our customers value our offer. And we continued to expand our market position in this region. Our strong balance sheet and cash positions allowed us to continue investing in new and more efficient capacity for the long-term, even through the very difficult economic times. We are reaping the benefits of this capability now and will continue to do so in the coming quarters. In September, we commissioned 150,000 ton Rubber Black expansion at our facility in changing China. And we recently announced our intention to invest approximately $143 million to triple the [inaudible] capacity at our facility at Jiangxi in China as well. This expansion, which has the near-term capacity potential of 20,000 metric tons annually will support the rapid growth of the silicon industry in China and will also serve as a competitive export platform for our fumed metal oxides business. We are also in the last phase of completion of our new masterbatch facility in Dubai. This operation will give us a highly efficient base to service the fast growing Middle East Plastic market. Lastly, we have maintained robust and aligned unit margins throughout the downturn. This is a confirmation of the value our performance materials bring to our customers' applications and their recognition of Cabot as a preferred supplier. Our superior quality, reliability and service have been valued by our customers over the years and contribute to our success in this area. Additionally, we have made investments over the past several of years in energy recovery technology, and during this quarter, commission energy sensors in Italy, Brazil as well as China. These are high return projects in the full margin benefit will be seen as the year unfolds. I will now ask Eddie Cordero to review business segments and financial details of the quarter prior to me giving our outlook for the company for 2010 and beyond. Eddy? Eduardo Cordeiro Thank you, Patrick. Segment profitability improved both on a sequential and year-over-year basis by 37 and $52 million respectively. Year-over-year, business profitability benefited from higher volumes. The realization of cost savings from restructuring programs, favorable utilization variances and a weaker dollar. Partially offsetting these benefits was $3 million unfavorable lag and LIFO impact this quarter compared to a $42 million benefit in the first quarter of fiscal 2009. Sequentially, business PBT benefited from lower costs, resulting from the implementation of our restructuring programs, favorable utilization variances, a weaker dollar and lower unfavorable contract lag and LIFO effects. As we reflect on the first quarter results, I would note that we had three positive impacts that contributed significantly to the exceptionally strong quarter. First, we had $9 million of revenue that was realized from the reverse [inaudible] rebates at calendar year end, and the successful completion of milestones in one of our joint development programs. Second, we benefited from $7million dollars of foreign currency transition of the weakening dollar. And finally, we benefited by $3 million from the impact of utilization variances as we replenished to inventories. I will now discuss the details at the business level beginning with the Rubber Blacks business. Rubber Black profitability increased by $18 million when compared to the first quarter of 2009. With 24% higher volumes, lower fixed cost in the absence of high-cost inventory experienced in 2009. Volumes grew in all regions, specifically 76% in China, 33% in South America, 21% in Asia-Pacific excluding China, 17% in North America and 3% in Europe, Middle East and Africa regions. These factors were partially offset by a $35 million unfavorable contract lag and LIFO comparison as the first quarter 2009 benefit did not reoccur this quarter. Sequentially, profitability improved by 26 million, driven by 2% higher volumes, lower fixed costs and lower unfavorable contract lag impact. We continue to make progress on our commitment to eliminate the contract lag effect on our financial results, and we expect that the amount of our contracted business subject to the quarterly lag to be reduced to 10% later this year. In the Supermetals business, profitability increased by $2 million when compared to the same quarter last year due principally to lower raw materials cost. Sequentially, profitability improved by $5 million from substantially higher volumes and lower raw materials costs. Business generated $11 million of cash during the quarter on a constantly currency basis, from a combination of improved operating earnings in a reduction working capital. When compared to the first quarter of 2009, profitability in the performance segment increased by $31 million. The increase was driven by higher volumes, strengthening unit margins and lower fixed costs. Volumes increased 24% in performance products and 19% in fumed metal oxides. These factors were partially offset by a $10 million unfavorable LIFO comparison as the first quarter 2009 benefit did not reoccur this quarter. Sequentially, profitability increased by $6 million despite lower seasonal volumes. The profit improvement was driven by lower fixed cost and strengthening unit margin. Profitability in the specialty fumed segment for the first quarter increased by a million dollars when compared to both the first and first quarter of fiscal 2009. Strong rental revenue in a favorable service mixed benefited results. In 2009, we curtailed cesium format production at our facility in Canada to conserve cash, bring our inventory in balance with demand and conduct process development activities at the plant. This resulted in a total PBT charge of $4 million over the last nine months while saving $7 million of cash during the same period. In January, we restarted the chemical plant as our inventory of cesium format is now back in balance with demand. In the new business segment first quarter revenues decreased by $1 million year-over-year and $2 million sequentially. Higher revenues in [inaudible] were more than offset by declines in Aerogel job business, principally due to the timing of jobs. During the quarter, the Aerogel business was awarded two additional oil and gas inflation jobs, projected to generate $7 million dollars in revenue later this year. The segment continues to be self-funding with cash breakeven performance for the quarter again. From our balance sheet perspective, we ended the quarter with $242 million in cash. During the quarter working capital increased by 104 million due principally to rising feed stock costs and higher demand. Capital expenditures for the quarter were $13 million. For the fiscal year we continue to anticipate a spending level of approximately 150 million in capital. The company recorded an $11 million tax provision for the first quarter, including a million dollars benefit from discrete items and a million dollar charge from interim tax accounting. Negligent these items, the ongoing tax rate for the quarter was approximately 27%. We continue to anticipate a full -year tax rate between 26 and 28% excluding any unusual items. Patrick? Patrick Prevost Thank you, Eddy. As I look back over the past year, I've been very pleased with Cabot strategic and operational execution. We made commitments to our shareholders and delivered upon these in spite of the most difficult economic environment. We committed to save an excess of $80 million of fixed costs and have delivered those savings this quarter at our full-year targeted run rate ahead of schedule and at lower costs than planned. We announced our intention to eliminate the impact of the contract lag on our business results and have reviews the percentage of our volume, subject to the four-month feed stock price lag from 50% in 2008 to approximately 10% by later this year. We committed to improve the financial performance of our new business activities and improved the business profitability by $25 million on an annual basis. The segment reached a cash breakeven position in 2009, and there are further growth opportunities ahead. These are only a few of the improvement projects that were brought to fruition during the last 18 months. Through the crisis, we have maintained robust unit margins, strengthened our competitive positions in the fastest growing regions of the world, maintained strong cash and liquidity and continued critical investments in key long-term projects. Taken in total, I believe that we have emerged from the downturn a stronger company; and given our strength and strategy, execution and ability to deliver on commitments, I am confident that we will continue to leverage our multiple innovation and business capabilities to meet our long-term financial targets. As I joined Cabot two years ago, I saw tremendous potential in its technology, portfolio and market positions. This recent economic crisis has been a real test of strength. Our able to deal with the crisis and get things done has further increased my confidence in our long-term potential as a key global player in the specialty chemicals and performance materials. Thank you very much for joining us today. And I will now turn the call back over for our question-and-answer session. Question-and-Answer Session Operator Thank you. [Operator Instructions] Your first question comes from the line of Lawrence Alexander of Jeffries. Please proceed. Lucy Watson - Jeffries Hi. This is Lucy Watson on for Lawrence today. Can you provide, I guess, a level of normalized margins that you expect when you reach your long-term financial targets? Patrick Prevost Good afternoon, Lucy. As you may know, we are not able to provide that level of details on this call due to the competitive nature of that information. So, I'm sorry, I'm not going to be able to answer that question. Lucy Watson - Jeffries Okay. And do you view Supermetals as a core component of your business portfolio? Patrick Prevost As you have seen, the Supermetals business has improved its performance dramatically this quarter. It has been under a lot of pressure due to the electronics downturn, which was quite significant during the -- certainly most significant during the first calendar quarter of 2009. We look at our business as having connectivity, strategic technology, synergies with the rest of the Cabot portfolio. And we believe that the industry structure with few players and the necessity for the end use of the tantalum capacitor applications as being a core strength support for the business. So clear, the business is part of the portfolio. It certainly needs to improve its performance further, and we're working at this currently. Lucy Watson - Jeffries Okay. And just one last one: Do you have any visibility into the inventory levels in rubber black supply chain, and are you seeing any more restocking there? Patrick Prevost As we mentioned in the speech earlier, we believe that there has been a certain level of restocking through the chain as demand has improved. But what we're hearing from our customers is that the whole value chain remains very cautious. People are worried about a potential slow-down in demand and a decline in the economic environment. Therefore, I would say a slight increase in inventory in the change, but nothing substantial due to the concerns that everybody has about the coming quarters. Lucy Watson - Jeffries Thank you. Patrick Prevost Thank you. Operator Your next question comes from the line of Jason Minor of Deutsche Bank. Please proceed. Jason Minor - Deutsche Bank Thank you. Good morning. Patrick Prevost Good afternoon, Jason. Jason Minor - Deutsche Bank I am sorry. Good afternoon. Just sequentially in rubber blacks, that's great a normalized basis improvement; but with volumes up just 2%, I wonder if you could just touch again on what drove -- it looks like about an $18 million improvement. Patrick Prevost There's a combination of factors here of which certainly the restructuring cost is one of the key factors. But what I'd suggest is, for our head of the business, Dave Miller, to provide you some more color. Dave? Dave Miller Yes, Patrick. The -- I think maybe just to reinforce what Patrick said. I think there was a restructuring benefit here as well as a net access act that definitely it was impacting the sequential numbers. Jason Minor - Deutsche Bank So, there was a restructuring sort of an action that was abrupt or that affected things from Q4 to Q1 pretty dramatically? Dave Miller Yes. I wouldn't say dramatically, but it did have an impact. Jason Minor - Deutsche Bank Okay. Just shipping gears little bit. If you look at your -- you talked a little bit about market share, and it sounded quite positive. I wonder, if you look, excluding the U.S. or the overseas markets, or how you could slice it to the growth in the emerging markets, what sort of share do you have in that group markets, do you estimate? Dave Miller Yeah. So I think, without getting too specific, maybe just to reinforce Patrick's earlier comments that we've across the portfolio grown our share in the merging markets. The increase in sales in China clearly the result of the capacity we've added there, which we've been able to successfully sell. So beyond that, I don't think I want to comment in more particulars. Jason Minor - Deutsche Bank Okay. Well, my last -- my last one is my own inability to demand, like my own inability to tell. When I add up all of the factors, if I got it right, right in your release, I get, like, $0.93 per share attributable to these various items, including the volumes, the inventory restocking, and that sort of thing. But that looks like a lot more than the difference between the $0.65 and $0.08 you did last year. So how am I adding that up wrong or misunderstanding? If you could help me. Thanks. Dave Miller I'll add Eddie to pick up on this question. Eduardo Cordeiro Jason, yes. The one big difference on the negative side was the difference in the lag LIFO impact from this quarter to the last first quarter, and while there was a very minimal impact this quarter, there was a huge benefit in the first quarter of 2009, and that attributes to about $40 million difference. Jason Minor - Deutsche Bank That's very helpful. Thank you. Operator Your next question comes from the line of John Robert of Buckingham Research. Please proceed. John Robert - Buckingham Research Good afternoon. Eduardo Cordeiro Good afternoon, John John Robert - Buckingham Research Eddie, you call out three items, the unrealized revenue of 9 million, the FX of 7 million and the inventory rebuild utilization variances of 3 million. FX will move up and down, but the unrealized revenue and the inventory utilization variance those should be thought of as one time? Eduardo Cordeiro Yes. And also on the FX, John. It's hard for us to forecast what that's going to be. So it's sort of up to you to decide if it's going to go up or down from here? John Robert - Buckingham Research Okay. And then the performance black business had sequentially up variable margins, I think you said. I think you said the earnings improved sequentially, I think, by 6 million, but fixed costs were down, in variable margins were up. Was that higher prices or lower raw material costs? What drove a variable part of that profit improvement? Because volumes were down. Eduardo Cordeiro Right. Yeah. You know, Sean, Sean Keohane will pick this question. Sean Keohane Hi John. Yeah, we saw what is a typical seasonal softening in volume. So you're right; volumes were down a little, as expected, but continued strong margin due to our focus on new products, value pricing and in that -- that through to the margin line for us. John Robert - Buckingham Research So, it was pricing mix that drove the variable margin component of that? Sean Keohane That's fair. John Robert - Buckingham Research And then, lastly, my perception is that the channel business is lagging the other materials in the electronic supply chain. I mean, semiconductor materials and so forth seemed like they picked up earlier. You had a weak September we didn't a recovery based in the September quarter for [inaudible]. You didn't quantify it, but it sounded like volumes sequentially went up a lot. Is that perception correct that there's a lag and there's a structural reason why that would be? Sean Keohane I'm not sure I'd be able to confirm that, but what I can confirm is that the volumes have picked up, and Eddie, who was previously managing the business, may want to add something to. Eduardo Cordeiro Yeah, John. I see the integrated chips are a great indicator as best as we can tell, but we do tend to lag them a little bit. So we did see a volume pickup from the fourth fiscal quarter to the first fiscal quarter, and we saw, I think now three quarters in a row of IC shipments increasing. John Robert - Buckingham Research So, your March quarter versus December quarter, if that lag stayed in place, you would continue to see a sequential improvement? Eduardo Cordeiro Yeah. I mean, remember, when you're looking at integrated chips, you're talking about billions and billions and billions, and the tantalum industry is a very small niche. So you can see lumpiness quarter-to-quarter. John Robert - Buckingham Research Okay. Thank you. Eduardo Cordeiro Generally speaking, yes. John Robert - Buckingham Research Got it. Operator Your next question comes from the line of Jeff Zekauskas from JP Morgan. Jeff Zekauskas - JP Morgan Hi. Just had a few questions. What was cash flow from operations in the quarter? Eduardo Cordeiro So, Jeff, we used about $50 million including about a $100 million dollar use of working capital. Jeff Zekauskas - JP Morgan Okay. Second, sequentially, the sales in rubber blocks went up about 15.5%, and I guess 2% is volume. So of the 13.5% increase sequentially, how much was currency and how much was price? Dave Miller I don't have the breakout for you, Jeff, and I'm not sure we would give you the price. Jeff Zekauskas - JP Morgan Well, maybe you could just give me the currency. Dave Miller As I said, we would not give out the price. Jeff Zekauskas - JP Morgan Thank you. Lastly, in those three items that you called out. Can you explain the 9 million item in a little bit more detail. And what EPS effect that 9 million had either positively or negatively? Dave Miller The 9 million was a positive, and, you know, on rough numbers Jeff a million dollars of pre-tax income is about $0.001 per share. The key components are, we had some rebate that we were accruing for that, at year end, didn't come through, and so we were able to reverse those rebates. So that was one item. And the second item was that we have a development project, which hit a key milestone, and we are able to release some revenue that we had also accrued for. So those are really the key -- the key aspects of that item. Jeff Zekauskas - JP Morgan So the 9 and the 7 is 16, so it's roughly $0.16 per share? Dave Miller No. Sorry, Jeff. The sum of those two with 9 million. Jeff Zekauskas - JP Morgan Forgive my. Dave Miller And the 7 was FX. Jeff Zekauskas - JP Morgan And the 7 was FX. Thank you very much. Operator Your next question comes from the line of Saul Ludwig of KeyBanc. Please proceed. Saul Ludwig - KeyBanc Good afternoon. Patrick Prevost Good afternoon. Saul? Saul Ludwig - KeyBanc You talk about this cautiousness that you are hearing from your customers. Does that cautiousness reflect a general cautiousness that we all have above the state of the economy and deficits, consumer spending, etcetera, or is it a reflection of actual current business trends that give them rise to be cautious? Patrick Prevost No. I think the cautiousness we're basically picking up in the market, you know, at our customers seems to be reflecting the general cautiousness that is out there, meaning, you know, the speed of the continued economic recovery, the depth levels that, you know -- at the government level; and, you know, within the companies have needs to be worked through, so I don't see a specific business situation here that are driving this. It's more of a macro situation. Saul Ludwig - KeyBanc What we're hearing is that the manager rubber products they rising and inventory still remain quite low. So, but I understand the general cautious attitude that you reflected. From a seasonal standpoint you timed out that there is a quarter is particularly, you know, you're seasonally slowest over your four quarters. With that implied you would expect, at least directionally, what we see in Jan, Feb, March should be better than what we saw in October, November, December? Patrick Prevost We'd like to see that way so unfortunately. What we're seeing currently in the January month is very much inline with what we saw in last quarter. So we were positively surprised by the year end quarter, the 2009 calendar year end quarter as it matched the roughly the volumes of the previous quarter in spite of the holiday season effect that we normally see in the U.S. and Europe. But as we look at this quarter, we're not seeing further pickup, and we're also in need of realizing and considering the fact that the Chinese New Year will be a major impact on, of course, the China market, and also most of the Asia-Pacific region. Saul Ludwig - KeyBanc Great. So that has another seasonal effect in a negative way? Patrick Prevost That is correct. Saul Ludwig - KeyBanc And then finally, when you look at your first quarter margins -- and you talked about the higher unit margins and that's evident in our results. Do you think there was any flukiness there? Do you think the steps that you have taken -- LIFO lag was a minimal number based on you changing your contract? It's not expected to be a big number going forward. You would sustain the $20 million in cost savings, I assume. Is there any reason why your margins should get better, get worse, or should kind of track what they were in the first quarter? Patrick Prevost As we mentioned, you know, the margins have returned to what we call a robust level. We had, as you know, significant inventory and feedstock effects during the course of 2009 as the demand volatility effect of the business and the accounting over the business. We're back to more, you know, normal levels. We're confident that, actually, on an adjusted basis those margins are robust, and we believe they will display, you know, continued performance including, of course, if we're looking at gross margins, the cost adjustments that we have been able to effect through the restructuring. Saul Ludwig - KeyBanc And then, finally, Eddie used a $100million in working capital in the first quarter not surprised there. And thinking about the cash as it would be consumed in working capital. What are you thinking about for the year? We realize, whatever your answer is kind of gas, because there's a lot of moving parts; but at least at this stage of the game, where is your head in terms of working capital as a consumption of cash for the year? Patrick Prevost I think, you know, there is a lot of factor here, Saul, as you know very well. Saul Ludwig - KeyBanc I agree. Patrick Prevost If --, you know, as we're looking forward, I would say, with a moderate growth level in the volume -- on the volume side, and with, I would say, potentially some continued growth in energy costs, we believe what there could be a moderate to flat situation with regard to the working capital situation. So we don't see much change here. Of course, we don't have a crystal ball in terms of being able to say how things are going to evolve, but we're confident at the current levels. Saul Ludwig - KeyBanc And finally, relative to this moderation in the outlook in demand. When you just analyze the situation yourself and you look at where the inventories are at your customer levels, look at the price of gas lean, look at -- do you really think that we're going to sort of flatten out in terms of demand. Or would you think -- this would be suggesting a more robust outlook you could not with standing the fact that January was fairly level with what your first quarter demand was? Patrick Prevost As I look at the entire demand and the growth of tires on a global basis, where we know that this is a business that grows between 3.5% and 4.5% a year, has been growing at that rate for more than 20 years with some bumps in the road, and we just experienced one of these bumps. But I firmly believe that we're going to track back to this level of growth. So a steadily moderate growth level overall with tires and rubber products, and we're going to be kind of -- as one of the leading, if not -- of course the leading producer of carbon black going to be growing on that rate on a global basis. Now for us, the game is going be to grow in the market that grow faster and that's where we're putting our effort and putting our investments. So we're going to hopefully enable growth at a higher rate than this GDP type, global GDP type rate. But if I you know, so I believe this is going to be perhaps the rate of growth we're going to see. The big question is will demand rebates back to 2008 levels? I think if we look at prior recessions that we've analyzed, it takes about two to three years to come back to the trend line, and we believe that we're into year one of that two, three years period. Therefore, yes there will be growth, but I think it will take a little while before we're back to the let say first half of 2008 levels. Saul Ludwig - KeyBanc Thank you, Patrick. Patrick Prevost Thank you, Saul. Operator Your next question comes from the line of Jay Harris, Investor. Please proceed. Jay Harris - Investor Patrick, at the risk of going over some of the answers that you've just given, looking back at the 90 days the tone at the last conference call was not consistent with the robust quarter you just reported. When I look at your balance sheet, I see receivables are up dramatically. What happened during the quarter? Patrick Prevost Well, I think a certain number of things happened. I would say we you know, we saw during the quarter the necessity to readjust our inventory levels to enable us to continue to meet the demands an the needs of our customers so that there's been, you know, some replenishment in the stock, although we're keeping days at very low levels and are still extremely focused on cash. We have continued to see the delivery of the restructuring effects, which are significant and have a bit of a lumpiness to them, and therefore, the prior quarters so our fourth quarter 2009 did not yet reflect the full impact of the restructuring, what we've done, and I would say that this current quarter now does, and we're still working on a certain number of things. But for the most part, I would say the big projects have been delivered, and we'll provide that, you know, new cost phase for the rest of the year. And I would say we've seen growth in the in the carbon black area in a somewhat, let's say, diverse geographical state, meaning that we've seen much more growth in China, South America, South Asia than we have seen in Europe or North America. So these are kind of the factors that have been driving the business I mentioned, and Shawn talked a little bit about the performance segment and the fact that there's been some margin improvement in that segment that has been driven by, again, product mix and feed-stork cost improvements. Jay Harris - Investor Did you get much benefit in terms of unit cost reductions out of the inventory rebuild you just referred to? Patrick Prevost I'm not sure -- would you mind repeating the question? Jay Harris - Investor I thought you said that you grew your inventories to service customers at a higher level of ordering. Did that re growth of inventories benefit your unit costs significantly? Patrick Prevost Yes, it did, and we had an effect of about 3 million. Jay Harris - Investor Okay. All right. That was 3 million. Patrick Prevost Yeah. Jay Harris - Investor I'd like you to go back to the conference call at the beginning of the calendar year of 2009. You had had indicated that in the fourth quarter of -- December quarter of 2008, your operating rates had dropped in carbon black I guess to 65%. You indicated you were going to take a certain amount of capacity out… Patrick Prevost Right. Jay Harris - Investor And obviously you started the new facility up in China. Do we still have any capacity to shrink? Patrick Prevost Let me remind you of what we said in actual terms. We talked about rebasing or actually reducing our operating capacity for carbon black to the tune of 16%. Jay Harris - Investor Right. Patrick Prevost Of which, half was going to be a permanent reduction in capacity and the other half mothballs an curtailments, so this is what we've done. In the meantime, we worked at making a very cautious decision with regard to the investment we had been building in Tianjin. And as we saw the recovery of the China market, we decided to start up a new facility quicker than planned. And if you think about it, the new facility basically replaced in kind the half of the permanent shutdowns that we had enabled; and in the meantime, the other half, which was curtailments and mothballs to a greater extent have been lifted as well. So if you think about this, there was a lot of activity here, but we're back to the same level of capacity we had before the downturn. Jay Harris - Investor Well, what was the level -- what was the average operating rate in the December quarter, and where are you now? Patrick Prevost So we -- what we're looking at right now in terms of utilization rates of the industry is we believe that the industry is running at around 85 to 90% of capacity so mid 80s to high 80s. As we look at our own utilization rate, we believe or we know that we're operating at a slightly higher rate than that. Jay Harris - Investor So going forward, as your volume increases, you'll have direct benefits to your operating margin, or are there some startup expenses on mothballed facilities to be experienced? Patrick Prevost No. We -- all of these -- if there were any expenses all of these have actually been captured. So, there is no more you know onetime effects that would be related to startup of operations. We're back operating our facilities, the ones that we've chosen to operate, the ones that are the most efficient in the system, and then back to your question around, you know, would you consider any closures or shutdowns. What we're doing is, and we've had quite a bit of you know practice lately we are going to be, if needed looking at the you know, the units that are the least efficient in our system or are located in the wrong place to serve our customers, and we will consider if those units are contributing or not to the bottom line, and that's how we make these -- these decisions with regard to either mothball or curtailments. Jay Harris - Investor That doesn't sound like it's imminent, though. Patrick Prevost Well we -- we're not seeing any decline in demand that would require us to do any further correction to our capacity. Jay Harris - Investor Well, what is the benefit to be derived out of the restructuring charge that you took in the December quarter? Patrick Prevost I'm sorry. I didn't pick up on that, Jay. Jay Harris - Investor You took a restructuring charge in the December quarter. What is the future benefit to be arrived from that? Patrick Prevost Eddie, can I ask you to pick up on that? Eduardo Cordeiro The charge we took in this December quarter was the amount, quite frankly, related to the restructuring that we put in place last year. And as accounting goes these days, you have to take it as certain points in time. So that charge would be related to the ongoing cost savings that Patrick had referred to, which was 80 million overall. Jay Harris - Investor How much of 80 million was realized in the December quarter? I guess the thrust of the question is approximately are you looking for incremental benefits in the March quarter relative to the December quarter because you didn't realize everything for the full 90 days. Patrick Prevost No. As Patrick had mentioned in his discussion up front, we realized the full 20 million in the first quarter. We have achieved the run rate that we were seeking to achieve. Jay Harris - Investor I thought he said more than the run rate. That's why I asked the question. We're -- you know, our commitment and promise was in excess of $80 million and that's what we're still going to deliver. Jay Harris - Investor Okay. Thank you very much. Patrick Prevost Thank you, Jay. Operator Your next question comes from the line of Christopher Butler of Sidoti & Company. Please proceed. Christopher Butler - Sidoti & Company Hi, good afternoon. Patrick Prevost Hi Chris. Christopher Butler - Sidoti & Company Just wondering, could you give us a sense of the visibility that you have right now? You had mentioned January. I mean, can you see as far as March or April as far as your demand environment goes at this point? Patrick Prevost I would say that we -- we don't have that visibility at this time. So I'm sorry I can't give you much than what I mentioned earlier in terms of the general long-term trend that we see in the tire industry. Christopher Butler - Sidoti & Company And looking at, you know, some of the metrics coming out of -- from new car sales to maintenance spending through the end of calendar 2009, you know, the numbers seem to be pretty good. Is there any element of this, especially on the maintenance side that it's -- would be consumers kind of catching up on spent-up or delayed spending that they didn't do earlier in the year? Does what often happen with recessions? Patrick Prevost Dave, do you want to take that question? Dave Miller I can try. I think it's fair to say that the trend has been more on the replacement side in recent months. The question being, as we look forward, do we anticipate that to be a bigger factor? I don't know that that would necessarily be the case, but miles driven is trending up. There's a cyclical pattern that we watched closely, and that would be our best indicator. Christopher Butler - Sidoti & Company Could it be that there is sort of a boost of demand now because of it that sort of eases office as the year progress something of that nature? Dave Miller That's going to be a tough question to answer because of our global position. It’s going to be very specific kind of region to region and I think it would be wrong for me to comment in a global way and how we see those trends trying to unfolding. Christopher Butler - Sidoti & Company And, just touching on the outlook from the press release, you said that a full recovery to pre-downturn volumes may occur on more moderate base is this a more moderate pace than your previous forecast. Is that sort of the back end of that comment? Dave Miller No I would Chris, I think what we're saying is that we are -- we’ve seen a faster recovery in the last few couple of quarters than we had expected, so what we're believing is that the rest of the recovery that we had planned to see over a period of you know, two to three years may occur at a somewhat slower pace. But it's not actually changing the modeling that we've done on the business. Christopher Butler - Sidoti & Company On the raw material front, you had mentioned that you know Supermetals had benefited from the raw material cost, but you had a working capital bill due to higher feed stock costs. Could you give us an indication of what kind of impact raw materials are going to have as you move into the second quarter here? Patrick Prevost In general, I think we're going to continue to see raw material costs increasing. I think the trend is up if you look at what's being discussed with regard to commodities in general and the oil price in particular, I think the current trend is to see oil in the mid 80s by the end of year moving back in the hundred dollar range by 2011, and I think that's a good proxy for raw materials in general. If you look at our business, we tend to have the ability to pass on raw materials to our -- to the value chain. So for us, the business is really about, you know, the ability to grow the margin we have been able to capture. Christopher Butler - Sidoti & Company Now, I know that you had said that you had put in some you know pricing was a part of this story in the first quarter. As far as raw material costs, were they up or down sequentially in the first quarter? Patrick Prevost I'm going to raw materials overall in the first quarter, Dave. Can you help me there? Dave Miller Yes. They were driven primarily by oil prices. Christopher Butler - Sidoti & Company Okay. And just to cover it, the Toyota recall that's a non-event as far as you guys are concerned is that correct? Dave Miller That is a nonevent, correct. Christopher Butler - Sidoti & Company I appreciate your time. Dave Miller Thank you. Operator Your next question comes from the line of John Roberts of Buckingham Research. Please proceed. John Roberts - Buckingham Research Good afternoon again. Cabot Micro has reported reasonably strong results, and when corning reported, they indicated Dow corning had a pretty strong quarter. The Fumed Metal Oxides business was down 9% sequential in volume. Maybe those end markets for those companies were down that much because they didn't talk about volumes specifically, but it sounds like your business was down by more than a couple of bench mark and market customers out there I don't know if there's any comment you could make to confirm that or describe why the gap might have been there? Patrick Prevost I would say there is more than to the business than Cabot micro so that would be the first -- I'm going ask Sean Keohane to perhaps answer the question further. Sean Keohane Sure, John. So those are -- those are, you know, important contributors to the business for sure, but don't represent the entire business by any stretch. But you're right. With respect to Cabot micro and some of the broader players in that industry have shown some pretty positive results, and I think we're benefiting from that. Often there's some lumpiness. So what will happen is that we will see the recovery earlier, and of course, because we're selling to them and they're selling downstream, and so, you can see some lumpiness quarter to quarter; but if you look over the last couple of quarters, the electronics industry has bounced nicely, and we've bounced with it. So I think that's the real take away, and I would say the same with respect to Dow corning. That's a pretty good proxy for the broad silicone industry and I wouldn't read too much into the sequential numbers there. John Roberts - Buckingham Research Okay. Thank you. Operator You have a question from the line of Jeff Zekauskas from JP Morgan. Please proceed. Jeff Zekauskas - JP Morgan Thanks very much. I just have a couple of final things. You said that the cost reduction in the quarter was about 20 million. If you had to allocate that by segment or business, how you do that? Patrick Prevost We don't provide that level of granularity. Sorry, Jeff. Jeff Zekauskas - JP Morgan Okay. Secondly year over year, your general unallocated expense went from 10 million negative in the first quarter of '09 to a 1 million negative in the first quarter of '010. Why is that? Patrick Prevost I'm going ask Eddie to.. Jeff Zekauskas - JP Morgan That's a question for Ed. Patrick Prevost Thank you, Jeff. That was principally FX related issues. There were some charges that we took in the first quarter a year ago specifically related to Brazil and Venezuela that we did not take again this quarter. Jeff Zekauskas - JP Morgan Okay. And in terms of your restructuring effort, how much is left in terms of the cash restructuring charges you might have to pay in the course of 2010?Fiscal '010? Patrick Prevost Do we provide that.. Patrick Prevost Yeah. I think I can give you a rough number Jeff if that's okay. Jeff Zekauskas - JP Morgan Sure. Patrick Prevost It's in the order of 20 to 40 million, and that would be in 2010 and beyond. Jeff Zekauskas - JP Morgan 20 to 40. And did you pay any of that in this quarter? Patrick Prevost There was some payment this quarter, but I don't have the exact number for you. Jeff Zekauskas - JP Morgan Okay. Good thank you very much. Patrick Prevost Thank you, Jeff. Operator You have a question from the line of [Jonathan Chung of Laurel]. Please proceed. Jonathan Chung - Laurel Hi good afternoon Quick question. I think you guys started talking about this a little. But can you help me understand the seasonality of the business before sort of you know the world ended in third quarter of '08? Patrick Prevost Right. I would say, in the tire business, and you I've got to realize that, you know, our business is very global and, you know, one of the slides that we had today showed that. We're about 30% in the Americas, about 33% in Europe, Middle East and Africa and about 37% in Asia-Pacific. So we're -- from a seasonality point of view, we see two major seasonal effects one is the Christmas New Year period in the western world, which affects Europe and North America to a greater degree and some of South America and then we have the Chinese New Year period, which is February, March, which affects mostly Asia-Pacific so we have two seasonality periods, but in general those are not very pronounced, so they tend to be in the few percent range and as the business is global, that tends to balance out over the year. So I would say over time and as we have been growing more balance, globally, the seasonal impact on the company from a volume point of view has diminished quite dramatically. Jonathan Chung - Laurel So if we're kind of rebasing here -- I mean, the normal seasonality trying to place out for the most part, outside of the world falling apart again is that the right take away? Patrick Prevost Yeah. That would be the right take away. Jonathan Chung - Laurel Okay. And then other thing I want to ask I think Saul was asking about this from the margin perspective. Obviously you guys had great margins this quarter and just so I can make sure I understand this, it doesn't sound like we should see much movement in the margins going forward, especially as you go from 50% to 10% contract lines? Patrick Prevost While we’re we continue to -- we're going to continue to expand our margins. That's -- that's part of our game plan and our strategy. So we'll going to you know continue to put investments so for example, our energy center investments that just occurred, three energy center and three plant from around the world are going to improve our efficiency and have a you know a significant effect on the variable margins output from these from this operations. So there's continued work going on there. I think what you're eluding to is the volatility in margin that relates to lag effects due to feed stock price recognition, and that has been one of our big effort during the course of last year, to eliminate this noise and this volatility as, whatever we lose on the way up, we don't actually tend to gain back on the way down, because the volume is beyond having recognized that we have gone to formal pricing or arrangement with customers that are more close to the time when the feed stock price is recognized. So now we move so into the rein of about monthly recognition of those prices, which dramatically diminish the volatility. Jonathan Chung - Laurel Got it. And this is kind of my last question, but a bigger picture question. So volume feels like it's come back a lot faster, and obviously we're not going to go back to the peak a lot faster we hope from here but it came back lot faster the cost side had come back come through a lot faster than you guys were expecting has that changed the way you might be thinking about kind of, the targets you kind of laid out over the past couple of years? Patrick Prevost I would say that, you know, we're still on the plan that we've laid out. We believe that that plan is still appropriate and adequate in terms of anytime what we have in the pipeline with regard to projects and activities. So no, we're not changing that time frame. Jonathan Chung - Laurel Okay. Great. Thank you guys. Patrick Prevost Thank you. Operator Your next question comes from the line of Saul Ludwig of KeyBanc. Please proceed. Saul Ludwig - KeyBanc Eliminating the lag, correct me here, make sure I'm on the right page here. 50% of your business is basically market based pricing, and then 50% is contract of the 50% of contract, as of the first quarter of this year where will that percentage be on a three-month lag and what's the phase-in to get to the 10%. Patrick Prevost Saul, we had and you're correct when you say we have 50% of our business in the raw blacks segment on contracts, and the current renegotiation of contracts is going to bring us down to about 10% of our total volume on 4 month lag, sometime by the middle of this calendar year. Saul Ludwig - KeyBanc So. That would be about in time for your fourth quarter? Patrick Prevost Yeah, that's correct. Saul Ludwig - KeyBanc And where is it now, Patrick? Patrick Prevost I would say it's somewhere around 20%, 20 or 25%. Saul Ludwig - KeyBanc Okay. Good. The second question is, this Masterbatch plant in Dubai, when does it start up, and what does that mean, or what's its capacity, or if you sold it out, what's it sales potential? Patrick Prevost Yeah. As you remember, Saul, we closed the Masterbatch facility in the UK at sometime at the beginning of last year, and we've been operating with lesser capacity in the system since we haven't replaced that plant. Knowing that Dubai was actually going to be coming up and I believe the start of date I am looking at it, Saul I believe is April of this year, and you know once we have that plant back in operation, we will be able to return to the volume levels and the capacity level that we had pre-downturn, and all of that at a much lower cost and the right part of the market. Saul Ludwig - KeyBanc How do you measure its capacity is it millions of pounds per year? Patrick Prevost It's in thousands of tons per year, and Shawn, we're planning to have -- so that's right, and so also, it's thousands of metric tons, and… Saul Ludwig - KeyBanc Number? Patrick Prevost It's in the 20 to 25,000 ton range. Saul Ludwig - KeyBanc Okay. Tons per year, okay. And then finally, Patrick, we've heard a lot about energy centers, you know, over the years, and it's exciting that you got three to just start it up. How should we think about the return, the incremental return? That's going to just show up in margin because you don't get any revenues in this, but it lowers your energy costs. What should we think about in terms of the dollar benefit that these energy centers are going to contribute to your company from the investments that you've made in them? Patrick Prevost Right. And so what I'll do is give you a sense for it, and we've been providing that type of information in prior calls as we've talked about these energy centers. But in general, these energy centers attempt to cost us between 20 and $30 million each, and the returns that we attribute to them are in the range of 15 to 20%. Saul Ludwig - KeyBanc Pre-tax or after tax? Patrick Prevost Those are after tax. Saul Ludwig - KeyBanc So if you started up you know, if on a $20 million investment, that's going to get you 3 million after tax, you signed off three of them at $9 million that by the fourth quarter you should be annualizing at that rate? Patrick Prevost Well, you could do that type of modeling. I mean It's a little more complicated, because each of these energy centers is in a market that has its own -- with what I would say its own dynamic, because you're dependent on -- you are dependent on steam delivery if you're delivering steam to a neighbor, etcetera so I would say these are guiding numbers. But they're kind what we would consider to be, the types of projects we consider attractive. Saul Ludwig - KeyBanc Very good. Thank you very much. Patrick Prevost Thank you, Saul. Operator You have a question from the line of Jay Harris, Investor. Please proceed. Jay Harris - Investor Just one follow-up. What is your capital expenditures budget for this year? Patrick Prevost We've indicated $150 million of CapEx. Jay Harris - Investor Of which only 13 has gone out in the first quarter. Patrick Prevost That is correct. Jay Harris - Investor All right. Thank you. Patrick Prevost Thank you. Operator This concludes the Q&A portion of today's conference. I would now like to turn the call back over to Patrick Prevost. Please proceed. Patrick Prevost Thank you again for joining us this afternoon. I believe, at that the results that we have published yesterday on the business have been -- have been a strong sign of improvement in, you know both our underlying markets and we also believe that a lot of the efforts in the restructuring have started to come through. We're pleased with the situation we're in. We're looking at some moderate growth during the rest of this year, and we're continuing to deliver the expectations and looking at getting to our long-term objectives within the period announced. So thank you very much for your attention, and looking forward to speaking to you soon. Bye-bye. Operator Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. 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By Jeffrey P. Snider The IMF released the first 2016 edition of its World Economic Outlook (WEO). Titled Too Slow For Too Long, it seems as if the institution has finally caught on to the fact that the global recovery never really was a recovery. Throughout the report, you get the sense that they are starting to figure out what is going wrong, but are prevented from recognizing the full extent by their ideological devotions. In other words, they are listening to the problem, but cannot yet "hear" it. There is nothing in their updated projections that come as a surprise. It is the usual downgrade across the board in incremental fashion - the slow drip of the slowdown that is now unimpeded into its fifth year. Global GDP, which was expected to be just over 4% in the second edition of the 2014 WEO, is now cut to 3.16%. Estimates have finally given up on 3% growth in the US, as the "best" annual GDP prediction in the IMF series is now just 2.5% forecast for 2017 - and only down from there, to what looks like a new estimated baseline of just less than 2% in the US. That is a huge discrepancy compared to the 3% average that existed between 1998 and 2007 (which, notably, includes one recession in that average). The biggest downgrade has to be, tellingly, economic growth in emerging markets. The average GDP advance in EMs from 1998 through 2007 was 5.8%, but the IMF now estimates there won't even be 5% growth again until 2020. Charting the history of these forecasts and projections is quite revealing. Take, for example, what the recovery was supposed to look from the 2011 predictions against what it has occurred instead, and you see nothing but steady slowdown where gentle but sustained acceleration was expected. Click to enlarge The 2011 Second Edition was released just as the US had completed QE2, the ECB had already begun "normalization" with not one but two rate hikes, and the consensus was that the world would grow slightly above average in order to gain symmetry after the Great Recession. By all counts, the global economy should have followed that course, since the economic hole at the start of the "cycle" was enormous. Thus, the very word "recovery" could only apply to those circumstances where growth after the huge decline matched its intensity - if not all at once, then over time. These particular set of projections also occur during the initial stages of what would become the 2011 re-flare of financial, funding, and banking irregularity that unfortunately revisited the global system. Therefore, what they show is what economists thought the world economy was supposed to do under "stimulus" that worked. Instead, global growth slowed after 2011 and has remained in that state no matter what central bank does what in any given place. That much we can see in the advanced economies, especially Europe, Japan, and the US. The slowdown in 2012 hit hard, and those economies only modestly rebounded in 2014. The current set of predictions holds no more acceleration, as the IMF has given in to "secular stagnation." Another threat is that persistent slow growth has scarring effects that themselves reduce potential output and with it, consumption and investment. Consecutive downgrades of future economic prospects carry the risk of a world economy that reaches stalling speed and falls into widespread secular stagnation. They do not immediately or explicitly list the cause(s) of "secular stagnation," but merely note its potential effects. That starts with, again, the fact that central bank "stimulus" remains conspicuously absent in the results, quite opposite all prior expectations and promises. Thus, we can begin to "hear" that there is at least some monetary function amiss. Click to enlarge Click to enlarge US GDP growth is no better now than 2011 or 2012, remaining more than 0.5% below its prior average. That may not seem like a big miss, but it is, especially stretched out year after year (lost compounding), but more so in relation to again the size of the GR itself. There is something very wrong where you have a large contraction and then a continuously stunted growth period (not a recovery) thereafter. Economists have been using the academic idea of "secular stagnation" to avoid any diagnosis of why this disparity exists. By their own projections, it should not have - it just suddenly appeared in 2012 as a durable (not transitory) redirection of the global and US baseline. Click to enlarge Before 2012, the IMF, as every other DSGE orthodox model, assumed that growth would be consistent and relatively robust year after year. After 2012, this annual ritual of incremental reductions to estimates took hold and hasn't yet found its end. It is absolutely clear that "something" changed in 2012 that has manifested as this slowdown that forces only piecemeal admission of its existence. Click to enlarge The result in terms of GDP is not just the downgrade to projections of the "lost" half or three quarters percent in actual growth every year, it is the fact that those widespread reductions mean that there will be no recovery. The entire idea of a slowdown is difficult to process in any period, but following a large contraction, it creates inordinate problems, starting with financial imbalances - especially since so many financial and economic factors were put in place (and created) with the idea that the recovery would eventually show up and sustainable growth would soon, to follow it. The slowdown as an end to the recovery is much more than "secular stagnation" or even a slowdown - it is a paradigm shift that, because it is being revealed slowly, creates definite discrepancies in both function and interpretation. It isn't recession, so economists declare still growth and recovery even though downgrades persist and "global financial turmoil" has now accompanied them. Click to enlarge Click to enlarge The biggest discrepancy to the recovery trajectory has been "inflation," which further points toward some monetary misalignment. In late 2011, the IMF forecast inflation in the advanced economies, including the US, would decelerate into 2012 after being well above target throughout 2011. It was thought that would be the natural adjustment to normalization, where inflation, over time, would follow the recovery and gently accelerate into the "soft landing," a utopian future just under every central bank's 2% target. Instead, "inflation" started falling in 2012 and hasn't yet stopped. The current forecasts for 2016 show a small pickup around the world, but it is still early in the year, with plenty of time for more downgrades (as with current estimates for 2016 GDP, especially in the US, if current Q1 forecasts hold at around 0.0%). If monetary policy clearly left no momentum for advanced economies, emerging markets suggest the reason. The "developing world" is far more dependent upon global trade and, thus, global finance for its marginal expansion, especially in terms of marginal growth and motion of expansion. And it has been emerging markets that have seen the most persistent slowing yet. Click to enlarge Click to enlarge Once again, 2012 marks separation from the recovery that was supposed to be, and the end of the whole idea. Thus, we have advanced economies monetarily resistant to "monetary stimulus" during the same period where financialized economies downstream not only fail to achieve prior averages, but also decelerate further under it. It is far more troubling here, as the scale of the slowdown is much more significant, leaving the financial imbalances that much more imbalanced. In other words, the early "recovery" period financial "flows" were predicated on EMs vastly outperforming DM economies, especially given the sudden and "unexpected" "new normal." Instead, relative to the continued slowdown in DMs, EMs have performed far worse after 2011; it was forecast at the second edition 2011 WEO that 2016 EM GDP would be a relatively healthy 6.72%, nearly 1% better than the 1998-2007 average. Obviously, that never happened, but the current estimate for 2016 EM GDP is just 4.1%, more than a third less than the forecast. Despite the recent rebound in asset prices, financial conditions in the United States, Europe, and Japan have been on a tightening trend since mid-2014, as the new Global Financial Stability Report documents. Yet financial conditions have tightened even more outside the advanced economies. Increased net capital outflows from emerging markets... lead to further depreciation of their currencies, eventually triggering adverse balance sheet effects. That suggestion is backwards, as the slowdown itself already triggered "adverse balance sheet effects" which we found as only more slowdown. The whole idea of "capital outflows" is 1950s thinking, as there would have to be "capital inflows" somewhere else to balance what was set as an equation. Again, the IMF sees very well the financial irregularities without recognizing them as the cause. They even go so far as to note the historic, dramatic currency mess of the past year and a half (in the October 2015 WEO), but still insist on some mysterious and undefined "secular stagnation" pushing the global economy further and further away from recovery. All the pieces for good analysis are assembled here in the WEO's, only orthodox ideology prevents the institution's economists from claiming it. By their own accounting, "something" happened around 2012 that pushed the global economy off the slow recovery track it was assumed global "stimulus" would deliver. In its place has been only an increasing slowdown that is impervious to further applications of monetary "stimulus" measured at the start in both GDP accounts and official inflation figures. Furthermore, the slowdown has hit EMs unexpectedly and much harder than the continued stagnation in DMs. And to add to all that we find immense currency volatility, especially since 2014 (when the slowdown entered its third year and started to convince many that the recovery was just never going to show up), commodity crashes, and increasing and repeating financial trauma. In other words, it bears all the hallmarks and scars of the slow constriction of a monetary noose: the shrinking global money supply. The IMF "hears" secular stagnation even though they detail all sides of the eurodollar system's ongoing decay, because mainstream theory does not allow observation. Instead, orthodox economics only permits "what should be" even where "what is" could not be more apparent. That is why, even after five years of these downgrades and continual slowing, the IMF still predicts a turnaround (though less robust) just around the corner, even though the trend is clearly entrenched. This is not an insignificant difference - at the end of secular stagnation is downgraded growth, but steady growth nonetheless. The final stage of a slowdown based on monetary decay and restriction is likely to be nothing like that.

General Electric (NYSE:GE) has had a good run in 2015. After the company announced a major restructuring a year ago and prepared investors for gigantic asset sales and capital returns, the industrial company's shares quickly became an investor favorite. Star investor Nelson Peltz, founder of Trian Fund Management, L.P., also gobbled up shares of General Electric last year with a total investment value of $2.5 billion. All considered, an investment in General Electric has been a great success: Not only are shares up ~12 percent compared to last year, but an investment in General Electric throws off a 3 percent dividend. Tendency: Up. Time To Buy? General Electric's shares recovered in February and March from the market meltdown earlier this year; but the industrial company's shares are still down ~2 percent year-to-date. GE's shares slipped ~5 percent since peaking at $32.05 at the end of March. The profit taking, however, is opening up a new buying window again. Why? Because General Electric has a couple of things going for itself that could push the share price higher in the remainder of the year. Most importantly, General Electric informed investors at the end of March that it submitted a request to the Financial Stability Oversight Council, or FSOC, for rescission of GE Capital's designation as a SIFI institution. If you recall, General Electric decided to start selling GE Capital's financial assets in 2015 in order to become a simpler company, and return to its roots as an industrial pure-play, and that plan included losing the burdensome, restrictive, and costly SIFI designation. Shedding SIFI-status would therefore be a major victory for the industrial company, and, likely, be a positive catalyst for GE's shares, too. Headwinds In The Oil & Gas Business General Electric's Q1-16 earnings were under the impression of the energy price rout that continued to negatively affect GE's revenue and earnings trajectory in the Oil & Gas business. General Electric's total segment revenues advanced 6 percent Y/Y to ~$25.9 billion, even though Oil & Gas revenues slumped 18 percent. As a matter of fact, General Electric's Oil & Gas business has not been doing well for some time, but GE's other industrial businesses have been offsetting Oil & Gas sector-specific headwinds. General Electric also guided for a "tougher" Oil & Gas market in 2016, with segment revenues expected to decline ~15-20 percent while Oil & Gas operating profits are estimated to fall 30 percent. However, oil prices have almost certainly bottomed out, and a turnaround in Oil & Gas could quickly improve General Electric's earnings trajectory in the sector. The point here is that GE's total earnings picture looked quite solid in the 1st quarter, even though challenges were visible. GE Is Not Too Expensive General Electric sells for ~17x next year's estimated earnings, which isn't cheap, but also not expensive when considering what investors get in return. General Electric's operating plan calls for capital returns of $26 billion in 2016, which is the equivalent of ~9 percent (!) of GE's current market capitalization. GE's shares are throwing off a ~3 percent dividend, which will likely continue to grow. Click to enlarge Your Takeaway Headwinds in the Oil & Gas sector hurt General Electric in the first quarter, but GE's other businesses largely offset related revenue and earnings declines. GE has made great progress over the last year selling off its financial assets, and General Electric's transformation is ahead of schedule. Losing the SIFI designation would be yet another victory for General Electric. GE is not too expensive considering that shareholders are getting spoiled with cash in 2016. Buy for income and capital appreciation.

To be clear: Nicki Minaj is a better musician than she is a celebrity. But she's an awfully good celebrity. For Minaj, 33, it's a job that entails more than the routine duties of 21st century multimedia fame -- spreading your stardust across dozens of platforms, from recording studio to concert stage to red carpet to Instagram feed. Minaj's brand of megastardom means inhabiting the eye of a storm that sweeps up contentious issues of race and gender and sexuality, while tending to more quotidian controversies like rap beefs and diva rivalries. Subscribe to billboard biz to continue reading this article and thousands more. Billboard.biz subscribers get: 24/7 coverage of every genre and sector of the business with over 150 exclusive charts Bulletin: Breaking stories, chart info and analysis sent directly to your inbox every weekday Billboard Magazine iPad Edition: An enhanced version of the magazine with video, photo galleries and playable charts Archives: A rich history of Billboard.biz articles and exclusive charts Join now or Log In billboard biz

Barcelona have fired another salvo in a dispute with Real Madrid and the Spanish football federation over the lifting of Real coach Jose Mourinho's two-match ban for poking Barca assistant Tito Vilanova in the eye. The clash over the federation's move on Tuesday to exonerate Mourinho suggests the bad blood that has marred relations between the clubs in recent years is set to spill over into the 2012-13 season beginning next month. "We are angry, we do not agree with the Spanish federation's decision," Barca spokesman Toni Freixa told a news conference after a board meeting in the Catalan capital on Wednesday. "We believe that an aggression like Mourinho's should not go unpunished," Freixa said, adding that the Portuguese's actions were "treacherous", "very serious" and had been "witnessed by the whole world". Barca believe the federation's decision, part of a general amnesty for sanctioned players and coaches, damages the image of Spanish football and can only encourage further aggression. Mourinho, a former Barca assistant coach, was initially banned after attacking Vilanova, who has since taken over as first-team coach from Pep Guardiola, from behind during a Super Cup match last August. His punishment was rescinded by football federation (RFEF) president Angel Maria Villar, who traditionally forgives some players and coaches after sealing re-election. He was voted in unopposed for a seventh four-year term in February and his latest amnesty was announced at the RFEF's general assembly in Madrid on Tuesday. Freixa said Barca had originally considered lodging a formal complaint against Mourinho but after consultation with players and coaching staff had decided to let the federation handle the case. Now, after the lifting of the ban, the club had decided it wants a working group set up to examine the federation's disciplinary regime and Villar's amnesties, he added. "Rules are needed that prevent cases like this from happening again, because this image being produced is very serious for Spanish football," Freixa said. "We expect a positive response from the federation and if that is not forthcoming we'll have to look at other options. The legal course is open to everyone but it's not our basic plan." The federation's decision meant Vilanova's one-match ban for reacting to Mourinho's aggression by pushing him away was also lifted, as were bans given to Real pair Mesut Ozil and Marcelo and Barca's David Villa, who were all red-carded. All five are now clear to take part when La Liga champions Real and King's Cup winners Barca meet next month in the 2012 Super Cup, the two-legged curtain-raiser to the season. The first leg is at Barca's Nou Camp stadium on Aug. 23, with the return leg at Real's Bernabeu arena on Aug. 30.

The State Department’s latest release of Hillary Clinton documents brings the total number of Clinton emails known to contain classified material to nearly 1,000. The department on Monday released its largest batch of emails yet, posting 7,800 pages of the former secretary of state’s communications. The latest batch contains 328 emails deemed to have classified information. According to the State Department, that brings the total number with classified information to 999. The emails in question were deemed classified before their release by the department – and the former secretary of state has said all along she never sent emails with material marked classified at the time. But the large number of emails containing now-classified material further underscores how much sensitive information was crossing her private server, a situation her critics have described as a security risk. Shortly after the release, Republican National Committee Chairman Reince Priebus released a statement saying, "With the number of emails containing classified information now numbering nearly one thousand, this latest court-ordered release underscores the degree to which Hillary Clinton jeopardized our national security and has tried to mislead the American people." Her email practices are also the subject of a federal investigation. The documents in Monday’s release were largely sent or received in 2012 or 2013. State Department spokeswoman Elizabeth Trudeau described it as the department's largest production to date as part of the court-ordered disclosure of emails from the personal server Clinton used while leading the department. The emails also cover the tumultuous period before and after the Sept. 11, 2012, Benghazi terror attacks. On the night of the attacks, the communications show Clinton notifying top advisers of confirmation from the Libyans that then-Ambassador Chris Stevens had died. Early the next morning, Chief of Staff Cheryl Mills tells Clinton they “recovered both bodies” and were looking to get out a statement; Sean Smith, information management officer, was the other State Department employee killed that night. Another exchange from early 2013 shows retired diplomat James Jeffrey appearing to do damage control over a Washington Post piece from him titled, “How to Prevent the Next Benghazi.” Jeffrey starts the conversation by warning Mills he’d been contacted by the Post regarding his views and reluctantly agreed to comply. He warns it would be posted and “you may see this piece as critical of expeditionary diplomacy. It's not; I've risked my life practicing it. But having lost over 100 personnel KIA and WIA (and two ARBs judging me) in my time in Iraq (and a son going back to Afghanistan on Department assignment this summer) I feel very strongly that we have to be prudent. If the media ask me if there is any daylight between me and you all I will cite the Pickering Mullen ARB and the Secretary's testimony and say absolutely not.” Forwarding the article, he adds, “(Title is not what I gave them and stupid as I state explicitly at the end that being in Benghazi was the right policy call).” Fox News’ Ed Henry and Kelly Chernenkoff and The Associated Press contributed to this report.

This is a partial transcript from "The O'Reilly Factor," April 12, 2004 that has been edited for clarity. Watch The O'Reilly Factor weeknights at 8 p.m. and 11 p.m. ET and listen to the Radio Factor! BILL O'REILLY HOST: Now for the top story tonight. There's another view of this. Joining us from Washington is Qubad Talabani (search), a representative of the Patriotic Union of Kurdistan (search), who's father is a member of the Iraqi Governing Council (search). Hey, what about this ambassador, [Rand] al Rahim? She's too scared to come on and talk to me the way you are. Do you know her? QUBAD TALABANI, PATRIOTIC UNION OF KURDISTAN: I know Rand very well. And anyone that's worked with her professionally knows she doesn't scare easily. So I doubt that she's hiding from you, Bill. O'REILLY: Well, it's true she is. Mr. Talabani, your doubt is misplaced here. She -- we had her booked on this program for four days, all right? She canceled hours before. And you were nice enough to take her place and we appreciate it. With no excuse at all. She's petrified, frightened because I'm going to ask you the same questions I'd ask her. Do you believe the Iraqi people, the guys on the street, all right, are going to fight for their freedom? TALABANI: I think that they will fight for their freedom, Bill. And we -- you know, we should look at Iraq as one big country here. We've seen troubles in Fallujah and other parts of the country. But these are focused problems. You've got a lot of the country that is calm, that is quiet, that is progressing. And there's a lot of cooperation between the Iraqi people, both at the community levels and at the political levels, even in some places on a military level between the coalition and the Iraqi people. Something that I'd like you to try to understand is that the Iraqi people have been brainwashed for 40 years. They haven't been given the opportunity to think, to have their own opinions. So they're so used to turning a blind eye to murder, to chaos, to oppression. And they're under pressure from some of these extreme Islamic organizations. O'REILLY: We understand and sympathize, but we can't be staying there forever getting casualties the way we're getting them. That's impossible. It's not going to happen. It may cost President Bush the election in November. So either the Iraqis are going to step up and step up fast or they're going to lose it. Now a lot of this hinges on the clerics, al Sistani, the Shi'ite ayatollah, OK? Now he -- no he's not coming to our aid. He's not saying help the Americans. He's not saying anything. So I don't know if your optimism is well placed. TALABANI: Well, I'm optimistic. And you know, having gone through what we have as the Kurdish people, we know that, you know, given the time and given good leadership by the Iraqi people -- by the Iraqi governing council, that this can be better. O'REILLY: Well, where is the Iraqi governing council? Why didn't we see them last week saying this is horrible, we condemn it, and we don't want it? Why didn't we see them running out there? TALABANI: Well, they're mediating at the moment between, you know, some of the factions in Fallujah and other parts of the country, but this is an opportunity for them to assert themselves as the governing institution of this country. O'REILLY: But they have not done that. TALABANI: This is an Iraqi problem. O'REILLY: They have not done it, Mr. Talabani. And we're sitting back here waiting for somebody to help us out. Come on, look, you got al Sistani, the chief Shi'ite cleric, you've got the Iraqi governing council. All right? You've got the American ambassador too afraid to come on. Nobody will step up to say, you know, the Americans are really helping us here. Help them. Come on, what are we supposed to think? TALABANI: I disagree with you, Bill. I disagree. Go to the Kurdish north. Look at the way... O'REILLY: No, that's a different story. It's a different story. TALABANI: That's not a different story. O'REILLY: You know it. TALABANI: We talk about Iraq being one country. Well, look at the way the Kurdish people are greeting the Americans and the British. O'REILLY: It's not going to be enough. Look, it's not going to be enough... TALABANI: They are other parts of the country where there is a good level of cooperation. You're focusing on Fallujah. You're focusing on some places in Najaf. Iraq is a big country. There's 22 million people... O'REILLY: I'm focusing on the top leadership in the country, Mr. Talabani. The Iraqi governing council and the top cleric, and they're not stepping up. Now... TALABANI: The governing council is making continued statements in support for the coalition. O'REILLY: It's not enough. They've got to come out on television and they got to tell the Iraqi people to help the USA Now... TALABANI: You should invite them out on Fox. O'REILLY: Well, we have invited them, but we can't get them. You know, you tell your father we'd like to talk to him. But look... TALABANI: He's (UNINTELLIGIBLE). O'REILLY: ...the Kurds are a different deal. The Kurds are pro American. They always have been. We know they're on our side and it's different. We're worried about the Shi'ites. That's the majority in that country. Now two more questions. Uprising, this is what the American press is. That was baloney, was it not? TALABANI: There is no uprising. O'REILLY: All right, so what do you think when you see the American press playing right into that the hands of the terrorists? TALABANI: I've been critical of all of the international press because... O'REILLY: No, it's the American press. TALABANI: It's -- yes, well the American press has been to blame as well. The British press has been all... O'REILLY: No uprising. TALABANI: You're focusing on the bad things that are going on in the country. There is no uprising. O'REILLY: That's right. And listen, I was the only one that put my neck out. Even on the Fox News channel, we had people calling it an uprising. Second thing, we have reports that Iran is behind this al-Sadr guy and his militia. Do you believe that? TALABANI: It's difficult. Anything to do with Iran is murky. You can never read them properly. But Sadr is a problem that needs to be dealt with by the Iraqis, by the coalition. And we cannot allow him to run around with his own militias and cause the trouble that he's causing. O'REILLY: That's (UNINTELLIGIBLE). All right, Mr. Talabani, we appreciate you stepping up for the ambassador. TALABANI: My pleasure. Anytime. O'REILLY: You tell the ambassador that we're very disappointed in her. And she better, you know, if she wants to win over the American people, and that's very necessary for you guys to have freedom, she better start stepping up here and stop hiding under her desk. And we appreciate you coming in. TALABANI: Anytime.

A man who had made previous threats against police set his house on fire Saturday and ambushed the first sheriff's deputy who responded, fatally shooting the deputy and wounding another before he was killed by a police officer who lives nearby, a law enforcement official said. The man's name and address had been entered into a law enforcement computer system because of previous threats, but the 911 dispatcher who entered the fire call put in the address of a neighbor who reported the blaze, so the alert wasn't activated and the Leon County deputy who responded first had no warning, said the official, who spoke on the condition of anonymity because they weren't authorized to release the information. The gunman was hiding outside the house when the deputy approached about 10:15 a.m., the official said. He shot the deputy from behind, shot him again after he fell and then took the deputy's gun. The gunman then tried to take other weapons from the deputy's car, but they were locked down, said the official said, who had spoken to law enforcement officials handling the case. The gunman, who lived at the end of a cul-de-sac, then shot another deputy, who escaped serious injury because of a bullet-proof vest. A Tallahassee police officer getting ready to work the Florida State University football game heard the shots, ran outside and fatally shot the gunman, who was hiding as other deputies and officers approached, the official said. The names of the gunman and the dead and wounded deputy have not been released. Details of the gunman's previous threats to police officers were not available. The shootings were captured by surveillance video cameras in the neighborhood, the official said. Pockets of flames could still be seen in the smoldering wreckage of the destroyed home hours after the fire was set. As night fell in the middle-class neighborhood, investigators sifted through the rubble with shovels under the bright glow of spotlights. The official said authorities didn't think anyone was killed in the fire. "It is almost unimaginable that a call for help turned into the ambush of a Leon County Sheriff's Deputy and the shooting of another deputy by the assailant. Every one of these first responders is a hero and our hearts go out to them and their families," Tallahassee Mayor Andrew Gillum said in a statement. Neighbor Joan Cabbage said she called 911 to report the fire while her husband Henry went outside. She said she could see two patrol cars pull into the cul-de-sac when she heard "pop, pop, pop, pop, pop" that she thought was from the house burning. "I saw a fire truck and he started backing up real fast -- I couldn't figure out why," she said. Her daughter, who had just left the house, then called to say police officers were running down the street with guns drawn. "That's when I knew something big was going on," she said. Dana Harrison, 20, said she was babysitting three young boys in a nearby house when she heard sirens, went outside and saw the fire. She then heard popping sounds, which she thought was caused by the fire, but a neighbor said they sounded like gunshots. She had hustled the boys inside when two police officers banged on the front door and then ran through the house into the backyard, which is near the burning house. The police told Harrison to get everyone into the bathroom. "I was scared," she said. The shooting near Florida's capital comes just two days after a police shootout at Florida State University left a gunman dead after he wounded two students and an employee.

AYUTTHAYA, Thailand-- The lucky ones traverse this flood-submerged Thai city in navy boats and motorized canoes. The rest float on whatever they can find -- inner tubes, swan-shaped pedal boats, huge chunks of muddied white plastic foam. With large sections of Ayutthaya buried under a sea of one-story high water, rescue workers and volunteers are still crisscrossing town to pluck stranded residents from the ruins. Others are staying to protect what's left. One boy donned a snorkeling mask to inspect his house, its corrugated roof faintly visible below the murky brown waves. "Nobody ever thought the water would rise this high," 54-year-old Pathumwan Choichuichai told The Associated Press in this city of ancient temples just north of Bangkok, minutes after a Thai navy team snatched her family from an apartment building where they were stranded for five days. Epic monsoon rains and typhoons have battered a vast swath of Asia relentlessly this year, killing hundreds of people from the Philippines to India and inflicting billions of dollars in damage over the last four months. Thailand is among the hardest hit; the floods here are the worst in half a century, with more than 280 people killed since late July. Flood waters have swamped more than two-thirds of the country, submerging rice fields and shutting down auto plants and tech companies like Western Digital Corp., which announced Wednesday it was halting production in Thailand to protect its staff. For weeks, water has coursed down key rivers from the north in a slow-motion catastrophe, overwhelming a national system of dams and dikes. Several days ago, floods transformed Ayutthaya into disaster zone navigable in some districts only by boat. Images of the damages wrought in Ayutthaya and elsewhere have fed fears that skyscraper-filled Bangkok could be engulfed by the weekend. Panicked residents of the capital have cleared supermarket shelves Wednesday to hoard bottled water and dried noodles, while luxury hotels have stockpiled sandbags around their perimeters. The government said flood runoff from the north has already hit two provinces neighboring Bangkok -- Pathum Thani and Nonthaburi. Authorities are also racing to reinforce flood barriers on the city's outskirts and dig new canals. The crisis is proving to a be a major challenge for the administration of Yingluck Shinawatra, which took power in August. Her government has not been able to give a reliable estimate of how bad Bangkok's flooding will be. In Ayutthaya, Pathumwan said she took refuge in her niece's apartment with her husband and son Thursday after fleeing their own flooded home the same day. As food and water supplies dwindled, they called a government emergency number repeatedly, she said, but nobody came until her family found a "friend of a friend" working directly with the rescue crews. "This is the first time in my life I've seen flooding this massive," said Pathumwan, who was born in the sprawling town of ancient Buddhist pagodas about an hour's drive north of Bangkok. "It's a relief to be out ... because everybody's afraid it may get worse." Earlier, the navy team had passed one man clinging nervously to a half-submerged traffic light, his cell phone and flip-flops in his hands just above water that filled the entire intersection. For at least two kilometers (one mile) in the other direction -- along a historic road lined with street lamps topped with gilded swans -- the water levels ranged from neck deep to just under one-story high. Hundreds of boats ply the newly formed waterways, some carrying away people desperate to leave, including the elderly and at least one pregnant woman. Others were filled with people hauling supplies back to homes they hoped to protect from looters. Cars and motorcycles were submerged beneath the waves. A Thai flag poked out of the waves from city hall. At the end of the road, a traffic light blinked red as a car alarm sounded. A lone canoe paddled past the sprawling lake that was the courtyard of the city's white-columned tourist center, a hub for visitors to the area's Buddhist temples, treasured as a U.N. World Heritage Site. Authorities say 108 of the temples have been flooded, but there has been no word yet on whether the sturdy stone structures have suffered significant damage. "Ayutthaya is uninhabitable now," said Santi Singharerk, a 42-year-old dentist carting away the single suitcase of clothes he was able to salvage from his home. "There's no running water. No electricity. We've lost everything." Santi said he hoped to return in a month. "But it's going to take a lot longer than that for things to get back to normal." Montri Rakthingerd, 45, criticized the government for the chaos. "They warned people to evacuate. But they weren't prepared to evacuate people and they're not helping anybody when they do," he said. "Nobody knows where we are supposed to go." Montri said his home flooded Friday night and he fled when the water reached his chest. His refrigerator, motorcycle and washing machine were destroyed. On Tuesday, he returned to find everything that he had moved upstairs -- two televisions, one stereo -- stolen by thieves, according to his neighbor. "Who can I complain to?" Montri asked. "Even the police station is under water." A trio of Zodiac watercraft delivering canned sardines, rice and water to the city's main hospital was heckled on its way. "It's not fair, you never bring anything for us!" one man called out. The government is helping, but relief officials are clearly overwhelmed. At Ayutthaya's provincial headquarters, aid is also being delivered -- meals cooked for hundreds of people at a time under a sea of tents. Inside, one official took call after call from desperate, trapped residents -- two pregnant women needing to be evacuated. Hundreds of vehicles were parked on the relatively safety of a highway overpass that dips into a flooded area, where vehicles can go no further. Here, the navy has created a makeshift ferry landing with a floating dock made of connectable blue plastic cubes. Minutes after the pier was built on Tuesday, it was put to use: Rescue workers lifted a 94-year-old man in a wheelchair out of a gray Zodiac and rolled him to a waiting vehicle.

Union News Sport World Breaking News Sport New Zealand sevens coach Sir Gordon Tietjens has invited a host of All Blacks and Super Rugby players to chase a place at the 2016 Olympics. Tietjens revealed his advanced planning for Rio de Janeiro in the immediate wake of their silver medal at the Commonwealth Games. He has a "huge wishlist" of 15-a-side players he believes can thrive in sevens and has already sounded out their interest. Any player keen to have a crack at winning Olympic gold will need to play the six world series tournaments in 2016 to prove they can handle the fitness rigours of the abbreviated game. Advertisement Details are still to be confirmed but it is likely those players will need to forgo that year's Super Rugby season. All Blacks coach Steve Hansen pledged last week to do all he can to help Tietjens select his best possible team as the Olympics will take priority in 2016. Tietjens named Liam Messam, Cory Jane and Julian Savea as three All Blacks who would need less time to adapt as they had played sevens before. Somebody like cross-code international Sonny Bill Williams, who has stated his desire to play at Rio, would need longer. "If you bring a new player in who hasn't played before then he's probably going to have play at least six tournaments for me to get a measure on how good he is," Tietjens said. "They couldn't come in off two tournaments because there's lots of training." No overseas players were on Tietjens' wishlist, nor players from other sports such as rugby league. Tietjens says it will take a special player to make the transition and force out one of the contracted sevens players who have served him so well. They won the World Cup and world series this year before conceding Games gold to South Africa in Sunday's final. "Remember, they've played particularly well," he said. "Playing in Glasgow has been a great experience and hopefully those players will learn from the mistakes we made and be better for it at Rio." Veteran DJ Forbes, who will be 33 during the Olympics, remains the likely captain. "If he keeps trucking along like he is, I'd say he'll be in Rio," Tietjens said.

March 7th, 2009 It’s about time we got a little attention up here in the North! It’s not just all about the oil and gas and beef that we are continually exporting out and into the world. How about the hearts, personalities, and charisma of some cute Albertan girls? Jillian Harris, 29, a well-loved fan favorite on “The Bachelor”, has signed on to be the “Star” of “The Bachelorette” - season five. Harris is a former resident of Peace River, Alberta, although she is currently based in Vancouver as an interior designer for the Browns restaurant chain. And how about Kyla Webber, also 29, who is about top become Mrs. Vince Vaughn? Webber is a Calgary, Alberta Realtor who is set to marry the actor as he announced their engagement earlier this week. Co-incidently, Vaughn’s mother is also Canadian – born and was a real estate agent. (Maybe it is true – men want a partner who resembles their mother)! Nonetheless, I wish these Albertan sisters success on their paths of love and romance! Albertan women are rising! We are strong and spirited women! We are REAL WOMEN! After all, we come from the “wild” west! We are hearty (thanks to the climate). We are fun-loving - ever been skiing or snowboarding to Lake Louise with us or stompin’ through Cowboys with a Pale Ale in -hand with one of “us” on your arm during the Calgary Stampede? We are explorers - wanna dig up dinosaur bones in Drumheller? We are Chic (talk about the masses of boutiques all over this Province and wait-till-that-new-Holt Renfrew-opens in downtown Calgary). And please note - top Couture Fashion Designer Paul Hardy is located here in Calgary and dresses goddesses world-wide on runways and red carpets. And we are savvy. It’s tough to break the glass-ceiling in the male-dominated oil, gas and beef sectors! So we have learned well, thanks to our ancestors like Nellie McClung, to use our feminine wiles and guises to strive for our own successes, and turn heads along the way. We appreciate nature and enjoy the great outdoors (from the Prairies to the Lakes to the Rocky Mountains and everything in-between). We are sports enthusiasts (Oilers/Flames and Stampeders/Eskimos die-hard fans). We are also queens of hospitality (ahem – we still set the bar for friendliness and our hospitable ways thanks to the 88 winter Olympics). We love stilettos yet we love our cowboy boots and hats too. And we know about cattle, horses, and beer, to boot! And - even better - WE KNOW HOW TO COOK A STEAK! We even eat them, too! What man wouldn’t want to hook a Canuck – especially one from Alberta? We are thoroughbreds! We are elegant and educated, but make no mistake, we are good – hearted “Broads”. What guy could resist these enchanting Albertan fillies? I am proud to say, I am Canadian! And yes - an Albertan. And I proudly support other pioneering Albertan women as I will honor Mitzie Wasyliw on Monday, March 9, at the Woman of Vision Luncheon at the Calgary Westin. Simply put, we are Wild Roses! Twitter Dana like us on facebook If you 'like' us, we'll LOVE you! If you 'like' us, we'll LOVE you!

Sproqit, a small US start-up, is challenging the might of the BlackBerry by launching an application on Monday that allows users to access desktop applications, including Outlook, on their mobile device. Sproqit Personal Edition costs £8 per user per month, and will go on sale from mid-October. A workgroup version should follow before the end of 2004, with an enterprise product for large companies planned for release in spring 2005. Peter Mansour, Sproqit's founder and chief executive, claims that his company's software makes it significantly easier to get remote access to a PC. "This is a thin client that acts like a fat client," Mansour said. Unlike Research in Motion, which uses a 'store and forward' mechanism to send email to its BlackBerry device, Sproqit's software links the mobile device directly to the PC back at home or the office. Before information can be exchanged, both the desktop PC and the mobile device must initiate a connection with the Sproqit server. This leads to the creation of a secure connection directly between them. Sproqit will host the server itself for Personal Edition users. Firms who buy either of the forthcoming corporate products will be able to install and run the application on their own internal systems. In a demonstration, Mansour showed that a Sproqit user can quickly access emails, document files and contact information from his or her PC. Rather than sending the whole file, Sproqit just transmits the sections that the user chooses to view. This should cut down on the amount of data that has to be sent, speeding up the process. Analyst firm Gartner reported last month that 80 percent of employees will use wireless email by 2008. Recent figures showed that Research in Motion's BlackBerry is proving particularly popular with mobile workers, with European sales more than doubling over the last year. Faced with this powerful competition, Sproqit has already signed a deal with palmOne that will see its Personal Edition ship on every Handspring Treo600. Mansour said that he was in talks with other device manufacturers.

Born: February 18, 1989, in London Age: 24 Principal Residence: London, England Education: Stowe public school, then Leeds University, where she studied dance. She currently studies contemporary dance at Trinity Laban Conservatoire of Music and Dance in Greenwich. Parents: Her mother, Lady Mary-Gaye Curzon, is the daughter of an Earl and an heir to the wealthy Curzon family, which has deep roots in British aristocracy. Cressida's father, Jeffrey Bonas, was Curzon's third husband; they were married for six years total and divorced in 1994. He studied at Harrow and Oxford before becoming chairman of MacCulloch & Wallis, a clothing and fabric manufacturer. Other Family Members: Cressida's mother has married four times, so she has a gaggle of half-siblings, including Isabella Anstruther-Gough-Calthorpe, who was reportedly courted by Prince William back in the day. Now 33, Isabella married Richard Branson's son, Sam, in a lavish wedding in South Africa in March. Sam explained Harry's absence to Hello magazine, "Harry’s a good friend and a great guy. We did invite him and he wanted to come but he was in South Africa the week before with official duties so the timings didn’t work out." Friends: She attended Leeds with Chelsy Davy, Prince Harry's ex. While there, she also became friends with Princess Eugenie, who is credited with bringing her into the royal fold. Exes: Harry Wentworth-Stanley, another blueblood she met at Leeds. They broke up after they graduated, and he currently works in real estate. Also named Harry (left), also hot. Photo: Dave M. Benett/Getty Images Signature Style: Bohemian. She favors long, flowy skirts for formal events, occasionally paired with fitted jackets. She wears her long, blonde hair down and tousled. When dressed down, she wears jeggings, a leather jacket, beanie hats, and even shorts. Occasionally Mistaken For: British model Cara Delevingne. How to Address Her If You’re ... A friend: Cressy or Cress Harry: Barbie (she calls him "Ken") A family member: Smallie, because she is the youngest child See pictures of Cressida going about her possibly soon-to-be-royal life in our slideshow.

Tyler Paige, Art Student What kind of art do you make? Video and sound art and websites. My roommate and I have also been running a small gallery out of our basement in Chelsea — we live in the apartment he grew up in. His mom’s a photographer and has been in the building since the ’70s. The gallery is this weird laundry-room, white-cube-type space. What’s that piece of red fabric pinned to your sweatshirt? It’s a symbol of the protests at Cooper Union — against charging tuition — which I’ve been involved in. I spent my first two years here mostly doing that, going to sit-ins; it definitely overshadowed my studio practice. I’d only go to class when I wasn’t locked in a room or occupying the president’s office. The protests have kind of died off, now it’s more a legal issue, and the attorney general is investigating the school. But the fabric also makes a nice accessory! Lightning Round Hometown: Trenton, New Jersey. Rent: $700 a month. Mock turtleneck: “From L.L. Bean.” Typical Saturday night: “Dancing at the bar One Last Shag in Bed-Stuy. They have a great party called Papi Juice.” Summer plans: “I just got a ticket to visit my boyfriend in Amsterdam.” Social media: Facebook, Instagram. “I’d get off Facebook, but it’s too good for events.” *This article appears in the May 18, 2015 issue of New York Magazine.

As Samantha Bee mocked the Republican presidential debates on last night’s Full Frontal, she made a horrifying discovery: Compared to his fellow candidates, Donald Trump’s views on “women’s health” seem, well, marginally sane. After Cruz accused Trump of saying that “Planned Parenthood does wonderful things,” Trump shot back, “Excuse me! There are wonderful things having to do with women’s health.” Flabbergasted, Bee joked that she’ll be unemployed if Trump continues to “make sense.” “Listen up, Creamsicle, we had a deal,” she exclaimed. “You open your facehole, garbage spills out, I make jokes, I get to keep my comedy job.” Adding insult to injury, she then realized that Trump had said non-crazy things about foreign policy in the same debate, going on the attack against poor ol’ Jeb Bush’s big brother George. “We should’ve never been in Iraq,” Trump shouted. “We have destabilized the Middle East. There were no weapons of mass destruction.” “Oh my goddddd,” Bee wailed, collapsed on her desk. “I agree with Donald Trump. I’m ruined. They’re gonna take my comedy show away.” Don’t worry, Sam! There are still plenty of things to hate lil’ Donny for. He still doesn’t believe in a woman’s right to choose or gun-control laws. He still wants to build a wall to prevent illegal immigration from Mexico because all men are rapists. He still says horrible things about women, and his campaign has still been accused of discrimination against women. There’s still plenty of political insanity to be mocked, and if it’s up to us, your comedy show will be there for the long haul.

Advertisement If there’s one thing everyone can agree on about today’s communications laws, it's that they’re woefully out of date. Crafted years before Netflix, Google or Apple offered video programming on the Internet, the laws regulating cable and satellite TV and TV broadcasting say nothing about their new competitors. Now, in addition to the dispute between pay TV providers and broadcasters over carriage deals, there are emerging issues for online video providers like Netflix that depend on Internet service providers like the cable systems for their distribution. During the future of video hearing before a House subcommittee Wednesday, lawmakers heard from an all-star panel of execs representing the old and new in TV video services, touching on a broad range of issues. . “The Federal Communications Commission regulates based on a bygone era,” said Rep. Greg Walden (R-Ore.), chairman of the House Subcommittee on Communications and Technology. Walden specifically referred to the 1992 Cable Act, when cable TV controlled 98 percent of the pay TV market. Today, that’s dropped to 53 percent. “It was meant to spur competition and it worked. But the act does not apply to YouTube, iTunes, Netflix, Amazon, Hulu, Roku and Sky Angel.” The hearing comes amid reports that the Dept. of Justice has opened up an antitrust investigation into whether cable companies are using broadband data caps to steer consumers to their own Internet video services and discourage, by pricing, the usage of video services not controlled by the cable company. It’s been a pet issue of Netflix, which has accused Comcast of doing just that. “When you couple limited broadband competition with a strong desire to protect a legacy video distribution business, you have both the means and motivation to engage in anti-competitive behavior,” David Hyman, Netflix’s general counsel, told lawmakers. “Add to this mix a regulatory and legislative framework largely crafted before the modern Internet era, and you have the makings for confusion and gamesmanship.” Taking on the attacks, Michael Powell, former FCC commissioner and president and CEO of the National Cable and Telecommunications Association, called accusations that the cable industry is involved in any effort to stop Netflix and others is “flatly wrong and belied by the facts.” “Netflix is the largest provider of subscription video in the country,” Powell said. “We sell broadband. Their services help stimulate the services we sell.” Dish Network’s chairman Charlie Ergen has never been shy about his continuing dissatisfaction with rules that he says give broadcasters the edge in retransmission negotiations. He used the hearing to open those old rules and defend Auto Hop, a technology that has enraged broadcasters because it allows its subscribers to automatically skip all commercials during prime-time programming. Sky Angel, which recently lost access to distribute CSPAN and Discovery over its Internet video service, argued for some of the protections regulations give cable operators but not others. “Everybody wants a little better deal, the other guy’s deal,” noted Walden. Lawmakers will need more than one hearing to figure out which rules should be tossed or if new ones should be written. “I know it’s too late to do a bill in this Congress," said Rep. Joe Barton (R-Tex). “In general, I think we need less regulation than more. I look forward to big things happening in the next Congress, but it has to be done in a bipartisan basis.”

FOR IPADS: If it can withstand a 1,300-foot drop or a fast-pitch baseball hit, the G-Form Extreme Portfolio can surely buffer your tablet against butter-fingered bellhops. The key to the 1.25-pound sleeve's strength: a top-secret, patent-pending foam that stiffens on impact. shop. g-form.com, $90. (Courtesy G-Form) See the gadgets: FOR CAMERAS: High-end photo gear is often the most delicate—and pricey—stuff in a traveler's bag. Enter CaseCrown's 12-ounce ripstop nylon DSLR Protective Carry Case. It's plenty rugged, but it has a softer side—the padded, felt lined interior safeguards camera and lenses alike. casecrown.com, $28. (Courtesy CaseCrown) FOR KINDLES: Thanks to its glare-resistant screen, Kindle has become the go-to e-reader for such sunny (and splash-prone) sports as beaches and pools. Trendy Digital's five-ounce WaterGuard Plus Waterproof Case seals the device against moisture, without putting a damper on its crisp display. trendydigital.com, $20. (Courtesy Trendy Digital) FOR IPHONES: With it's double-layered design—squishy silicone on the inside, durable polycarbonate on the outside—CaseMate's TANK is a heavy-duty shock absorber that doesn't add much weight (1.6 ounces). Bonus: Its sliding front shield protects iPhone's oft-shattered screen. case-mate.com, $60 (Courtesy Case-Mate) FOR LAPTOPS: Leave it to a pilot to fine-tune the carry-on bag for the digial age. Think gadget pockets galore, a sturdy interior frame, reinforced corners, and a 1.5-inch layer of high-density foam throughout—all built into the six-pound Pro Flight Bag from Brenhaven. brenthaven.com, $200. (Courtesy Brenthaven) FOR EVERYTHING ELSE: Consider it your very own yellow submarine. The 13-ounce OtterBox 2500 Series is airtight, waterproof up to 100 feet, and tough enough to emerge from any overhead-bin turf war unscathed. At nearly 7" x 5" x 4", it can provide safe haven for iPods, digital camcorders and more. otterbox.com, $20. (Courtesy Otter Box) SEE MORE FROM BUDGET TRAVEL: To Go or Not to Go: 11 Places With a Bad Rap 8 Common Mistakes Weekend Travelers Make Secrets to the 10 Most Popular Cruise Ports

Contaminated traditional beer has killed 56 people in Mozambique, health authorities in the southern African country said on Sunday. An additional 49 people were admitted to hospitals in the Chitima and Songo districts in the northeastern Tete province, and 146 more people have reported to hospitals to be examined for the poisoning, district health official Alex Albertini told Radio Mozambique. Those who drank the contaminated brew were attending a funeral in the region on Saturday, Albertini said. Pombe, a traditional Mozambican beer, is made from millet or corn flour. Authorities believe that the drink was poisoned with crocodile bile during the course of the funeral. Blood and traditional beer samples were being sent to the capital Maputo to be tested, said provincial health director Carle Mosse. "We don't have the capacity to test the samples," she told Radio Mozambique. Mosse told Radio Mozambique on Sunday that she expected the situation to worsen because the region did not have the necessary resources to deal with the disaster. Mourners who drank the beer in the morning reported no illness, while those who drank the beer in the afternoon, fell ill, authorities said. They believe the beer must have been poisoned while funeral goers were at the cemetery. The woman who brewed the beer is also among the dead. Police are investigating the incident. Health authorities have begun collecting food parcels and other items for donation to the affected families.

Brushing aside security concerns, Pope Francis arrived in Kenya on Wednesday on his first-ever trip to Africa and urged Kenyans to work for peace and forgiveness amid a wave of extremist violence on the continent that threatens to disrupt his trip. Francis was received upon arrival at Nairobi's airport by President Uhuru Kenyatta and a throng of traditional dancers and singers at the start of a six-day pilgrimage that will also take him to Uganda and the Central African Republic, a country wracked by fighting between Christians and Muslims. Asked en route if he was concerned about his own safety, Francis responded with his typical wry humor: "I'm more worried about the mosquitoes." But he sounded a far more serious note in his speech to Kenyatta and the country's diplomatic corps at Nairobi's State House, urging all Kenyans to work for peace and forgiveness to heal ethnic, religious and economic divisions. "Experience shows that violence, conflict and terrorism feed on fear, mistrust and the despair born of poverty and frustration," he told the audience, which applauded him warmly. "Ultimately, the struggle against these enemies of peace must be carried on by men and women who fearlessly believe in, and bear honest witness to, the great spiritual and political values which inspired the birth of the nation." Francis didn't refer explicitly to the April 2 attack by Islamic extremists that left 150 people dead at a mostly Christian university in Garissa. But he is likely to insist on the need for interfaith dialogue Thursday when he meets with Christian and Muslim leaders, and later with young Kenyans struggling to live their faith amid the menace of the Somalia-based al-Shabab extremist group responsible for the Garissa attack. Kenyatta didn't refer to al-Shabab either, but spoke generally about the threat posed by Islamic extremists, who on Wednesday struck Tunisia after attacks in recent days in Mali and Paris. "As we fight this war, recent events around the world have indeed taught us that we must do even more to bring unity and understanding between faiths, between ethnicities, between races but also between nations," he said. Francis is aiming to bring a message of peace and reconciliation to Africa, but is also stressing some issues close to his heart including the need to fight poverty, protect the environment and encourage good governance. Thousands of people lined his motorcade route, snapping photos as he whizzed by with their cell phones. Francis urged Kenya's political, social and economic leaders to work with "integrity and transparency" for the common good, a clear reference to Kenya's poor record with corruption. Transparency International ranked Kenya a lowly 145 out of 174 countries in its 2014 corruption perception index, and Kenyatta this week described corruption as a national security threat to East Africa's largest economy. "I ask you in particular to show genuine concern for the needs of the poor, the aspirations of the young, and a just distribution of the natural and human resources with which the Creator has blessed your country," Francis said. Kenyatta, for his part, said corruption was the major challenge facing the country. His rule has come under criticism for a lack of high-level prosecutions of officials accused of corruption. On the eve of Francis' arrival, he replaced six ministers who vacated office after they were accused of corruption. "Kenya's future depends on upholding the highest standards of integrity in governance, in inclusivity and in the protection of peace," Kenyatta said. After visiting Nairobi's Kangemi slum Friday, Francis heads to Uganda where he'll pray at the shrine to the country's famous martyrs and celebrate a Mass. Some uncomfortable issues may arise: The church's opposition to condoms as a way to fight AIDS, and its support of local legislation criminalizing homosexuality are chief among them. But on the whole, the pope's visit to Africa is meant to tell the African church that it matters, said the Rev. Robert Dowd, professor of political science at the University of Notre Dame. "It has a crucial role to play in promoting justice and peace in societies where governments are not always accountable or responsive." The Vatican has long looked to Africa as the future of the church, given the proportion of Africans in the world population of Catholics increased from 7 percent to 16 percent between 1980 and 2012, according to a report this year by the Center for Applied Research in the Apostolate, a research center affiliated with Georgetown University in the United States. Francis, though, may also issue some tough love words to local clergy, who tend to let missionaries get their hands dirty working with society's outcasts while diocesan priests and bishops live somewhat removed from the hardships of daily life. The Vatican has also long fought to keep its African clergy celibate. The pope is due to arrive Sunday in Bangui, Central African Republic, for the most delicate part of the trip. The country has been highly volatile since early 2013, when Muslim rebels overthrew the president of a decade. Unprecedented sectarian violence followed and has continued to flare despite the presence of more than 11,000 peacekeepers and police.

World Breaking News World AFP Argentina and the United States are engaged in a diplomatic spat after Buenos Aires authorities seized what they say are undeclared weapons and drugs on a US military aircraft last week. The Argentine government on Monday said it planned to lodge a formal protest with Washington, while the US State Department said it was "puzzled and disturbed" by the seizure of what it claimed was routine equipment for training the Argentine federal police. Officials in Argentina said the US Air Force C-17 transport plane was searched and its cargo seized by customs officials on Thursday at Ezeiza International Airport after arriving with experts and material for a hostage rescue training exercise. In a statement late Sunday, President Cristina Kirchner's government said it would lodge a protest with Washington and ask it to cooperate in a probe into the air force's attempt "to violate Argentine laws by bringing in hidden material in an official shipment." Advertisement Argentina has said it seized "sensitive material" that had not been declared in a manifest submitted by the US embassy. "Among the material seized, which the State Department makes no reference to, are from weapons to different drugs, including various doses of morphine," the foreign ministry said in Sunday's statement. State Department spokesman Philip Crowley said "we are puzzled and disturbed by the actions of Argentine officials," adding they conducted what he called "an unusual and unannounced search of the aircraft's cargo." But he said the material seized was routine for exercises in which US military experts train the Argentine federal police in "advanced hostage rescue and crisis management techniques." He said the "seized items include batteries, medicine, a rifle and communications equipment," adding he had no information to "corroborate that rumour" that drugs were seized. Crowley said he had heard the serial number of one item was not documented, but added that the whole matter could "easily have been resolved on the ground by customs officials" rather than "escalated." "We continue to call on the Argentine government to return our equipment," he said, adding the United States regretted the training exercise was cancelled. He said Assistant US Secretary of State Arturo Valenzuela at the weekend called Argentine Foreign Minister Hector Timerman and other officials to register "our great concern" about the incident. The Argentine foreign ministry statement said Valenzuela "refused to explain why they tried to pass this material." Argentine officials said Valenzuela had contacted Timerman hopes of resolving the situation, and was said to have expressed "concern on behalf of the US Defence Department over the seizure of items related to the security of the United States." The incident comes amid a chill in US-Argentine bilateral relations, and follows US President Barack Obama's decision to exclude Argentina from his first scheduled trip in March to Latin America. Obama will travel to El Salvador, Brazil and Chile. Timerman reacted to this decision by saying that the United States has "more interests than friends." He said Obama would not visit Argentina because "it won't buy arms or even sign a defence agreement."

Since they first appeared tablets, such as the iPad and Galaxy Tab, are only good for consuming media and other content according to the pundits. More and more people are finding that's not exactly true as they can be solid work tools for creating content, too. I've been doing just that for over a year with one tablet or another. I've corresponded with dozens of folks such as Harry McCracken (@harrymccracken) of time.com who is also doing it. Many of these folks have discovered like I that the mobile platforms running these tablets force the user to concentrate on the actual task at hand. It's all about the focus. I just picked up new eyeglasses with a greatly revised vision prescription so focus is front and center on my mind. My eyes are adjusting to the new glasses and I'm paying a lot of attention to focusing on specific things. "This then is the entire Chromebook proposition. It's just a web browser. " — Matt Baxter-Reynolds This concentration on focusing makes me realize that the primary reason I am more productive working on mobile devices is due to the single focus this enforces. The mobile platforms I use: iOS, Android, and Chrome OS, present me with one window on the work screen at a time. The forced focus on one thing at a time grabs all of my attention and focuses it on the task at hand. No longer do I have windows open all over a giant screen, all fighting for my attention whether I should be giving it or not. It's not a lack of discipline that diverts our attention when we have lots of windows open with information all over the screen. It's only natural that flashing lights and multiple points of interest cause our eyes to constantly flick all over the screen to see what's happening. This is a natural distraction that we can't help for the most part. The best way to eliminate the distraction is to get rid of all the windows with different information displaying. That's exactly what the mobile devices do: present one window at a time that grabs all of our attention. This naturally results in a more concentrated effort no matter what the task at hand may be. You focus entirely on what you should be doing rather than a bunch of things you shouldn't. This single window method is not appropriate for all tasks or workers. There are some folks who need things displayed side-by-side for reference. But I am willing to bet that many who think they need this really don't if they analyze the real task at hand. I suspect that working on a mobile device like an Android tablet or an iPad would be a step up for many workers. Undivided attention is usually a good thing and will help get the work done faster and with less headache. My colleague Matthew Baxter-Reynolds recently shared a brilliant concept that the Chromebook he bought is very similar in function to the iPad. I believe he's discovered what I find to be true that both of those mobile devices focus his attention on the task at hand. That's why they are similar in function. Even Microsoft gets this with Windows 8 and its single window operation. Put the job front and center and remove all distractions. Except for that snap view thing, which may be best left alone. Focus is the key. Try it, you may be surprised. See also:

I don’t have to tell you that it’s tough out there. I’m talking about the recession, of course. In the end, the bursting of America’s economic bubble is the worst financial news since the Great Depression. And ultimately, it is clear that the deleterious effects of U.S. capitalism know no race, ethnicity or class. Titans of industry are reduced to pauper status, working families are out of work, food, healthcare and a home, and people of all backgrounds are watching their life’s work eviscerate before their very eyes. We are all bit players in the casino, and with a few exceptions such as the lucky bailout winners, most of us have crapped out, the way the casino operators intended it to work. But at the same time, it’s a little more complicated than that. While “official” unemployment nationwide is high at around 10 percent (far more when you factor in all of those people who are underemployed or have given up all hope of finding a job), unemployment is and always has been much higher in Black and Latino communities. But the gap has widened during this recession. In fact, Black unemployment is nearly double that of Whites, while Latinos are unemployed at a rate one-third higher than their White counterparts. The situation is particularly chronic in New York City, where there are 80,000 more unemployed Blacks than Whites, even though there are about 1.5 million more Whites than Blacks in that city. One explanation is that people of color are the folks last hired and first fired, or that their communities have a lower level of entrepreneurship. Some people will be quick to attribute the difference in employment levels to differences in education levels. Their argument is that people of color are lazy and not so smart, and don’t apply themselves. But among those with a college education, as the Economic Policy Institute reported, Black unemployment in recent months has doubled that of Whites. Perhaps institutional racism can explain some of the difference in unemployment levels. As James Koch, an economics professor at Old Dominion University noted, “When the economy is at or near full employment, employers don’t have any choice. They have to hire the people that are available. Right now, employers can be fairly choosy. They may well choose not to hire African Americans.” This notion is worth exploring, at a time when civil rights foes have pushed back against the age of Obama. In the name of “reverse discrimination”, they have declared that affirmative action and other diversity programs are a thing of the past. The unqualified minorities are taking all of the good jobs from the ever-qualified and ever-capable White men, they say. Blacks have the White House, after all, so what more do they want? These malcontents yearn for the day when people of color were relegated to captive labor, or migrant labor, out of sight and out of mind, and nothing more. They point to the Supreme Court ruling in Ricci v. Stefano. In Ricci, the court found in favor of 17 aggrieved White New Haven firefighters (and one Latino) who claimed they were discriminated against in promotions after they passed a promotional exam. When no Black firefighters passed that exam, in a city where people of color are 60% of the population, the city discarded the results. Little is said, however, of the recent ruling by a federal judge that New York City discriminates against people of color in the hiring of its firefighters. Specifically, New York City, which is over 60% of color, has a fire department which is over 90% White (and nearly all male), a statistic that stands in marked contrast to other major cities. Blacks and Latinos disproportionately failed the recruitment exams, and those who did pass were placed further down the list than White candidates. The judge determined that “the city did not take sufficient measures to ensure that better performers on its examinations would actually be better firefighters.” He added that “when an employment test is not adequately related to the job for which it tests – and when the test adversely affects minority groups – we may not fall back on the notion that better test takers make better employees.” In a majority-minority city such as New York, African Americans and Latinos are seldom found as firefighters, and some professions apparently are the functional equivalent of a family business. It seems more than mere coincidence that unemployment among people of color has skyrocketed. Some people will always point to the scores, but the truth is that intelligence, achievement and merit cannot be reduced to a single score. But gatekeepers in education and the professions have long used standardized testing as a tool to keep racial, ethnic, class and gender diversity from entering the gate. The tests and the racism always went hand in hand. As anthropologist Carolyn Fluehr-Lobban points out in Race and Racism: An Introduction, standardized intelligence testing was born of the eugenics movement and the IQ tests. These pseudo-scientific tests were first used to prove that immigrant groups, “certain undesirable non-Anglo-Saxons – especially Jews, Hungarians, Poles, Russians, and Italians – ‘were mentally defective.'” What worked as a tool of class and ethnic discrimination against European immigrants was then utilized to prove the racial inferiority of “Negro, Mexican and Spanish-Indian children.” And according to the National Center for Fair and Open Testing, “IQ tests are nothing more than a type of achievement test which primarily measures knowledge of standard English and exposure to the cultural experiences of middle class whites.” Yet, society still relies on these exams, commonly known today as the SAT, ACT, GRE, MCAT, GMAT, LSAT, and bar exam, among others. Society’s gatekeepers have a lot of power. They decide who gets the job and why. They determine who is a team player, who is a good fit, who is fit to lead and who is not. They decide who is too much of this or not enough of that, who is qualified, underqualified, or overqualified. They decide if an applicant’s name sounds too “Black” or “Latino”, whatever that means. They determine whose hair looks too Black. Gatekeepers create the reality, however subjective, flawed or biased the methodology. They choose the images in Hollywood and on TV, and which people will portray criminals or upstanding citizens, or nothing at all. Gatekeepers make the policies that create a mostly Black and Brown prison population, and a mostly White legal profession. They decide to fill the special education classes and foster care systems with children of color, who will, in turn, fill the prisons. Gatekeepers decide to have a panel discussion on a cable news program, and the topic is the nation’s first Latina Supreme Court justice, yet none of the panelists are Latinas. And gatekeepers lack diversity, in a nation that is becoming more and more diverse by the day. Often, their goal is to maintain a system where everyone looks the same, like the good ol’ days. That is why steps are needed to ensure that the game is not rigged, as it has been for so long, so that we do not revert to the nation’s default settings of power and privilege. Harvard professor Henry Louis Gates – who had a less than positive experience with the Cambridge police department of late – said it best in his commencement address to Berea College in 2008: For me, no matter how intelligent I may or may not be, for me to have been one of those six black boys who graduated from Yale in 1966, affirmative action was a class escalator. As far as I’m concerned, ladies and gentlemen, no one in the American academy has benefited more from affirmative action than I have. And that’s why I will go to my grave as an ardent and passionate defender of affirmative action. For me to become so successful in America, and for me to become a gatekeeper of American society and stand at the gate and protest affirmative action to keep out women or people of color would make me a hypocrite as big as Justice Clarence Thomas, and I’m not that kind of person. We need more affirmative action in this country, not less affirmative action. I don’t care what the White House says, and I don’t care what the minority on the Supreme Court says, and that’s the subject of my address this afternoon. BlackCommentator.com Editorial Board member David A. Love, JD is a journalist and human rights advocate based in Philadelphia, and a contributor to the Progressive Media Project and McClatchy-Tribune News Service, among others. He contributed to the book, States of Confinement: Policing, Detention, and Prisons (St. Martin’s Press, 2000). Love is a former Amnesty International UK spokesperson. His blog is davidalove.com. Also On News One:

Wade Pfau has a fascinating paper out called “Safe Savings Rates: A New Approach to Retirement Planning Over the Lifecycle”. It’s really just the bones of such an approach; the details need to be fleshed out a lot. But I love the idea that we should get away from thinking about “the number” we need to be able to live comfortably in retirement. The effect of the number is to break life into two — pre-retirement and post-retirement. Your goal pre-retirement is to reach the number, while your goal post-retirement is to spend it down slowly enough that it doesn’t run out before you die. Pfau’s insight is that, thanks to mean reversion, the number you need at the end of a bear market is actually lower than the number you need at the end of a bull market: If the market’s about to head up, your retirement savings can grow even post-retirement, while if the market is about to fall, you’re liable to lose much more than just your annual expenditures. Instead, says Pfau, stop thinking about stock and just think about flows. Save a set percentage of your salary every year, stick to it, and, it turns out, you’ll be fine: Starting to save early and consistently for retirement at a reasonable savings rate will provide the best chance to meet retirement expenditure goals. You don’t have to worry so much about actual wealth accumulation and actual withdrawal rates, as they vary so much over time anyway. But the savings plan should be adhered to regardless of whether it seems one is accumulating either more or less wealth than is needed based on traditional criteria. What’s the percentage? That’s the crucial question. Pfau makes a very basic calculation that for someone on a constant real wage, saving for 30 years and then living for another 30 years on 50% of their final salary, saving about 16% of your salary each year into a portfolio of 60% stocks and 40% bonds will put you into safe territory. Of course, real wages aren’t constant over time, and all the other figures are highly variable too. But the bigger message certainly resonates with me: Expend less effort on trying to boost your annual returns, when you have very little reason to believe in your alpha-generation abilities, and spend more effort on maximizing your savings every year. Investing can be exciting, especially when it’s done wrong. You follow the markets rising and falling, you obsess about your retirement-fund balance, you rotate out of this and into that, you read books and magazines and blogs to try to learn more about what to do. You might even, in a moment of weakness, find yourself watching CNBC. Budgeting, by contrast, is like going on a diet: It’s a drag, and it’s hard to get any pleasure or excitement out of it. But the latter is much more likely to get you well-set in retirement than the former. Update: Matt Yglesias has a this-thing-looks-like-that-thing moment.

The Kansas City Royals announced Wednesday the club has set a single-season record for attendance as the 2,477,701st fan has walked through the gate. Tonight's official attendance will be announced during the seventh inning. The previous record of 2,477,700 was set during the 1989 season. Total attendance for the 2015 season after Tuesday stood at 2,474,627, leaving just 3,074 fans needed Wednesday to officially break the record. Tony Tucker of Blue Springs, Mo., walked through Gate E a little after 6 p.m. with his wife, Heather; son, Logan; and daughter, Paige. They were greeted by Sluggerrr and members of K-Crew, receiving a framed certificate, ticket upgrades for the game and a Royals jersey. The jersey, which was autographed by members of the 2015 Royals team, has the number 15 on the front and back. Also on the back is the record-breaking number 2,477,701 in place of the name. The Royals eclipsed the 2 million mark on Aug. 14, the 60th home game of the season, marking the fastest the club has drawn 2 million fans. This year also marks the 13th time in franchise history that the Royals have drawn at least 2 million in attendance and the first time in 24 seasons (1991).

Palestinian leader Yasser Arafat on Saturday called for a cease-fire with Israel during the upcoming Olympic games in Greece, but Israel dismissed the offer as insincere. Also Saturday, Israeli soldiers shot and killed an armed Palestinian in the West Bank city of Nablus, the army said. The army was enforcing a curfew in Nablus' old city for a third day in an operation to track down Palestinian militants. Palestinians said five Arabs had been killed in the Nablus raid. The army did not immediately comment on the report. Arafat issued his call for a halt in violence during a symbolic lighting of an unofficial Olympic torch at his headquarters in Ramallah. A top U.S. envoy, meanwhile, met with Palestinian Prime Minister Ahmed Qureia (search) and other officials to build momentum for Israel's planned withdrawal from the Gaza Strip. "I stressed President Bush's determination to do everything that the United States can to help seize the opportunity presented by the Israeli initiative," said William Burns, a senior State Department official who also has met with Israeli officials in recent days. His visit came days after Egyptian intelligence chief Omar Suleiman (search) held separate talks with Israeli and Palestinian leaders on the terms of Israel's Gaza withdrawal, which is to be completed by the end of 2005. Israeli Prime Minister Ariel Sharon (search) wants to evacuate Gaza and four isolated West Bank settlements, which he says will boost Israel's security. Israel refuses to talk directly to the Palestinians and Egypt has stepped in as a mediator. Under the Egyptian plan, Palestinian militant groups would gather in Cairo in September for a cease-fire declaration. Within eight months, Palestinian security forces would begin collecting illegal weapons. Burns told reporters after his meeting with Qureia that he had "emphasized the crucial importance of the Palestinian leadership making and implementing the decisions that are required to make a success" of Egypt's efforts. Burns also stressed that the Gaza pullback should be a step in the "road map" peace plan, which envisions a Palestinian state in Gaza and the West Bank. Qureia warned the Gaza pullout will be "pointless" if it is not part of the road map. Arafat called for a halt in violence during the Aug. 13-29 games. "On the occasion of lighting the Palestinian Olympic torch, I declare our respect and commitment for an Olympic truce," Arafat said. "We hope that the revival of the ancient and noble Greek tradition will help in creating a world that enjoys peace, justice and security for the coming generations," he said. Israel accuses Arafat of encouraging militant groups to attack Israelis and a senior Israeli official dismissed the offer. The official recalled the deaths of 11 Israeli athletes and coaches killed by Palestinian militants at 1972 Munich Olympics (search). "There is a big difference between what Arafat says and what he does," the official said on condition of anonymity. In Nablus, soldiers searching from house to house for fugitive militants shot toward two armed men, killing one, the army spokesman said. Troops were looking for the second Palestinian man. The army has been operating in Nablus since late Wednesday, trying to root out militants. Troops have surrounded the old city with barbed wire and taken over 20 buildings. About 20,000 residents of the neighborhood have been allowed to leave their homes only once, for an hour, since the operation began. A total of three Palestinians have died during the Israeli operation. Paramedic Ghassan Hamdan said 14 others have been injured by Israeli gunfire. Nablus is known as a hotbed of militancy against Israel and many suicide bombers have come from the largest city in the West Bank. The army said it has uncovered an explosives lab, a suicide bombers' belt and another bomb during the activity. Meanwhile, about 1,500 protesters gathered in the West Bank village of Kaffin to demonstrate against Israel's separation barrier. Many demonstrators suffered from tear gas inhalation, but no other injuries were reported. Israel says the structure of concrete walls, razor wire, fencing and trenches is meant to keep Palestinian suicide bombers and other attackers from entering Israeli towns and cities. Palestinians are enraged by the structure, which they say is a land grab.

Herald staff You must sign in or register to continue reading content. EVERETT — Bail was set at $20,000 Thursday for a woman arrested for investigation of attempting to elude police, drunken driving, reckless driving and resisting arrest. It was the second time in less than two months she had been arrested for investigation of drunken driving, officials said Thursday. A Washington State Patrol trooper tried to stop the woman’s car that was headed northbound on I-5 near Everett, but it sped off shortly after 2 p.m. Wednesday. The Everett woman, 23, made numerous lane changes and reached speeds of 95 mph in a posted 60 mph zone, according to court papers. She also drove through a stop sign after leaving the highway. When she stopped, she refused to obey orders to get out of her car. Troopers eventually broke out a window to arrest her. She reportedly had watery, blood-shot eyes and a red face and smelled of alcohol. Her blood alcohol level was more than three times the state’s legal limit, according to results from a portable breath test. Her license already had been suspended, court papers said.

Scott Roth/Invision/AP Around this time last week, news first began to circulate that Mo'ne Davis helped unveil a new sneaker line -- with 15 percent of the proceeds going towards impoverished girls. A day or so later, more great news about the 13-year-old appeared: From Variety: The Mo'ne Davis story is coming to Disney Channel. The 13-year-old who made history last summer as the first girl to pitch a shutout in the Little League World Series is the subject of a biopic that the cabler is developing with producer Debra Martin Chase. By the end of the week, I was prepared to read any Mo'ne-related headline. Mo'ne Davis to Israel to help broker treaty with Benjamin Netanyahu Mo'ne Davis challenges James Harden to one-on-one; wins, convinces Harden to trim beard Mo'ne Davis and Cornell West debate hashtag activism and the utility of grits Mo'ne Davis solves centuries-old chicken/egg riddle (The answer? Davis: "God, actually") Big Sean threatened by masked gunman not to make any more music. Mo'ne Davis is the prime suspect. Police don't bother investigating. Because it's Big Sean Instead, I read about Joey Casselberry, a baseball player at Bloomsburg University who got on Twitter, called Davis a slut, and ultimately got kicked off of his team when news of what he did hit the news. Yesterday, I read that Davis forgave Casselberry and reached out to Bloomsburg to get him reinstated. Because of course Mo'ne Davis would do that. She is better in what she does (living her life) than you are at what you do (living your life). And then I read piece after piece -- person after person -- praising Davis for having it in her to forgive Casselberry. And this made me sick. Not because of what Davis did. She has handled herself about as perfectly as anyone -- 13 or 43 -- with this type of overnight fame and media scrutiny could. But while she has acted rightly, there's nothing right about a 13-year-old being placed in a position where this type of forgiveness is even necessary. She's supposed to be practicing in-and-out crossovers, testing new designs on her sneakers, and getting asked to semi-formals, not being Ralph fucking Bunche so some full-grown idiot won't continue to have his fucking feelings hurt. There's nothing to be happy about -- no feel-good takeaways -- when a middle school girl gets insulted by a man and has to speak up for him so he can continue a baseball career no one gives a fuck about. She is not supposed to be anyone's savior or protector. We need to be saving and protecting her. Also, you cant discount the racial context here. As Jamilah Lemieux tweeted this week (paraphrasing) "...the narrative in this country is that Black people are to turn the other cheek, always, with no expectation of White folks changing." Distilled, this is a White man using a public space to volunteer a sexual insult about a Black girl. Fuck that guy. No, seriously. Fuck. That. Guy. I really hope none of this deters Davis from continuing to do what she's doing. I want to continue to read ludicrous headlines about her. I want her to star in a 2017 mash-up of Taken and You Got Served called You Got Took. I want her to dunk on Kevin Hart. But, more than any of that, I want her to be a middle school kid. And then a high school kid. And not have to be the "bigger person" when the other person is an adult. This post originally appeared on VerySmartBrothas.com. 21 Photos That Showcase Women's Athleticism