Vodafone takes $6.3 billion writedown on European weakness

LONDON (Reuters) - Mobile operator Vodafone wrote down the value of its assets by 4 billion pounds ($6.3 billion) and cut its medium-term sales target on Tuesday, as the debt crisis hit customers in southern Europe, forcing them to save money on phone calls.

Vodafone, the largest telecom operator in the world, posted full-year results in line with forecasts and stood out from its peers by paying a record dividend as strength in emerging markets, Germany, Britain and Turkey offset a slump in spending in Spain and Italy.

But with poor prospects for the two big southern European markets, coupled with persistent regulatory and foreign exchange pressures, Vodafone said 2013 revenue growth would be slightly below its previous medium-term target of 1 to 4 percent.

The Britain-based group is the latest in a line of major companies to report a knock-on effect from austerity measures, as consumers grapple with higher taxes, inflation, fewer public services and muted wage growth.

Vodafone took the writedown against its units in Spain, Italy, Greece and Portugal, all at the heart of the crisis, where customers are taking lower tariffs and using their phones less.

"Europe continues to be challenging," Chief Executive Vittorio Colao told reporters. "It is clear that (Italy) has a crisis of confidence and especially a lot of uncertainty. It's very obvious that this is a moment where people are defensive.

"The whole European concept needs to be reinvigorated, not diluted down," the Italian added, saying he hoped Greece would remain in the euro zone but was prepared for a possible exit.

The travails in southern Europe pulled the key metric of European organic service revenue down 1.1 percent. Combined with 8 percent growth from Africa, the Middle East and Asia Pacific, however, the group overall was up 1.5 percent on last year.

Organic service revenue comes from the provision of ongoing services, excluding one-off items, and is watched closely by analysts as a true sign of the health of the business. With the medium-term target downgraded, Finance Director Andy Halford said the group would target growth in 2013.

As well as tough macro-economic conditions, the telecoms sector has also been hit by cuts to so-called mobile termination rates, which are the fees paid to mobile carriers by both mobile and fixed-line operators to connect calls.

The steady withdrawal of the once-lucrative revenue stream has been ordered by regulators, who hope to pass the savings on to consumers. Colao has repeatedly clashed with regulators over the issue and said again on Tuesday that they needed to recognize the tough conditions the operators were working in and support them so they can invest in new networks.

BEATING RIVALS

Despite the multiple pressures, Vodafone has managed to stay ahead of rivals due to its strong presence in faster-growing emerging markets, a strong corporate offering and a reputation for a better data network.

It raised its total regular dividend by 7 percent to 9.52 pence and with the addition of a 4p special dividend from its business in the United States, said it was paying a record 13.52p dividend for the company. It also expects the growth rate or 7 percent to continue for the 2013 financial year.

Shares in Vodafone, which had dropped last week to their lowest since October, rose 3.2 percent against a 1.5 percent rise in the wider FTSE 100 Index <.ftse>.

Analysts said the results for the 2012 financial year were in line or above forecasts, and said the lower outlook had been expected, although some previously supportive analysts started to question whether the group could be doing more in Europe.

"Prudent guidance may be reassuring for some and certainly there is nothing too alarming in these results, with Vodafone still looking the best of a bad lot," Robin Bienenstock at Bernstein said.

"But while the pursuit of 'more of the same' makes sense in emerging markets, it makes Vodafone seem more adrift than determined in much harder hit macro-economic climate of Europe."

Vodafone's problems in Europe mirror those of rivals, with Spain's Telefonica for instance halving profit in its first quarter due to torrid conditions in Italy and Spain.

France Telecom has been grappling with intense competition in its domestic market, while Deutsche Telecom has stabilized its European business after warning on profits in February.

France Telecom, Telefonica, Telecom Italia and Vivendi SA , Europe's largest telecoms and entertainment group, have all responded by cutting their dividend as they battle a toxic cocktail of regulatory pressure, bruising competition and network upgrade spending.

At the same time, Vodafone increased its dividend and maintained or grown its capital expenditure, in large part thanks to its strong presence in emerging markets such as India and Africa, although that strategy has also hit problems in the last year due to unexpected regulatory changes, particularly in India.

Colao said growth of around 20 percent or more in India and Turkey and 7 percent in the African business Vodacom showed markets and businesses there did not appear to be affected by the euro zone debt crisis so far.

Overall, Vodafone revenue was up 1.2 percent at 46.4 billion pounds, in line with forecasts. Core earnings slipped 1.3 percent, also in line with forecasts.

(Editing by Anna Willard and David Holmes)

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Deal website discretion: A deal a day can keep the consumer away

ScienceDaily (May 22, 2012) ? Before giving into temptation and purchasing a half-price vacation or yoga lesson from a daily deal website, one Kansas State University professor cautions users to think twice.

Daily deal websites and flash sale websites often offer prices well below what would be seen in a retail store or through typical online shopping. But Ether Swilley, assistant professor of marketing, says the deals may not be so good for business and that consumers may regret their impulse buying.

"I would advise users to use discretion," Swilley said. "Make sure it's something you really need or want, and you're not just purchasing it because it's there and time is counting down."

Daily deal websites like Groupon and others operate the same way regular coupons have for years, Swilley said. Businesses offer a service or product at a discount in order to bring in new customers, with hopes that they will enjoy what they purchased and return for more.

"What's happening, though, is that people aren't coming back after that initial coupon use," she said. "They think, 'this was cheap the first time, I want it to be cheap again.' They're not really gaining a true customer but simply a one-time user who is deal-prone. Now retailers are reconsidering the value of Web coupons."

Flash sale websites, such as Gilt, often operate through email. Potential customers sign up to receive a list of daily deals, or visit the business's website, with the promise to receive a large discount if they purchase a product within a short period of time.

Swilley said flash sale websites are a way for mid- to high-end retail companies to get rid of their extra inventory without selling it to off-price department stores like T.J. Maxx or Marshalls. She added that it is also a way for businesses to test out a new product.

"Flash sale websites are often used as a marketing tool," Swilley said. "If a company has a new product coming out, they may want to see how the public feels about it. They use a flash sale to lower the price a bit so that a few people will buy it and get it out there. Then, when someone asks where you bought your shoes, they can go to the store and purchase them."

Both flash sale and daily deal websites have been around for several years, offering everything from clothing and accessories to travel packages and restaurant coupons. Swilley said Groupon was the first to really pick up steam last year when it debuted its initial public offering.

"When Groupon did its IPO, the buzz surrounding it gave consumer credence to sites like this," Swilley said. "However, retailers may still be wary and are figuring out how to effectively use these services."

Well-known companies are getting into the game as well: Amazon offers the high-end flash sale site MyHabit and Google created Google Offers, a daily deal site.

Consumers have been eager to take advantage of what may be perceived as a quick bargain -- these websites have created a billion-dollar industry. But Swilley warns would-be buyers to take a second look at what they're considering.

"You may see a pair of shoes that is marked down to $500 from $1,600," she said. "Yes, it's a discount, but would you have seriously considered an expensive pair of shoes if the picture wasn't in front of you?"

Purchasing an item from a time-limited website is only advisable if you search out the deal, not if the deal comes to you, Swilley said. She suggests using these websites to make travel plans or purchase high-end items -- but only if you were looking for them in the first place.

Swilley predicts that daily deal and flash sale websites aren't going anywhere in the foreseeable future, but that changes likely are on the horizon.

"Look at MySpace, Facebook and Twitter," she said. "Things branch out and change as the market changes. If consumers tire of these types of deals, they'll have to come up with something else that fits what the consumer wants. The consumer is finicky and fickle, and these businesses will have to adhere."

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Syrian bloodshed spills into Beirut

Street battles between pro- and anti-Syrian groups in Beirut killed two people on Monday, a security official said, sparking concerns of a wider conflict in Lebanon.

The violence erupted hours after reports emerged that troops had shot dead Sheikh Ahmad Abdul Wahid, a prominent anti-Syria Sunni cleric, when his convoy failed to stop at a checkpoint in north Lebanon on Sunday. Another cleric in the car was also killed.

Washington expressed concern over the killings on Monday and urged restraint.

"We welcome the commitment of the Lebanese government and the Lebanese Armed Forces to conduct a swift and transparent investigation of the shooting incident," US State Department deputy spokesman Mark Toner said.

"And we call on all parties to exercise restraint and respect for Lebanon's security and stability," he said.

Protesters blocked roads and burned tyres in the northern region of Akkar following the killing of the clerics, and by evening the unrest had spread to the capital.

"During the night, groups of young men cut off the road in the Tareek el-Jdideh district and street battles followed," the security official said, requesting anonymity.

"Two people were killed and 18 were wounded," he said, adding machineguns had been fired and that the fighting had raged until about 3:00 am (2400 GMT).

An office housing a small pro-Syrian party in Tareek el-Jdideh, a mainly Sunni Muslim neighbourhood of west Beirut, was torched by partisans of ex-premier Saad Hariri's Future Movement and the facade of the building was riddled with bullets.

Several motorcycles and cars parked on the street below were burned.

Calm had been restored by daylight following appeals from Prime Minister Najib Mikati and other politicians.

However tension was palpable in the capital, where residents fear a repeat of sectarian clashes like those that left some 100 people dead in 2008 and brought the country close to civil war.

"I've had enough... of war," said Amal Khattab, a 40-year-old teacher and mother of two who lives in Tareek el-Jdideh.

"My children were terrified last night," she added, crying. "I can't spend another minute in this country."

Wahid's funeral was held on Monday in his hometown of El Bireh, in the northern Akkar region, where many businesses and shops were closed after Sunni religious leaders called for three days of mourning.

"We want a fair trial, and we want the killers of Sheikh Ahmad Abdul Wahid to be executed," Future Movement MP Khaled al-Daher said at the funeral.

A judicial official said military police were questioning 21 soldiers, including three officers, in relation to the death of the two clerics.

Their killing followed a week of intermittent clashes between Sunnis hostile to the Syrian regime and Alawites who support it which left 10 people dead in the northern port city of Tripoli.

The violence highlighted a deep split between Lebanon's political parties where the opposition backs those leading the uprising against Assad while a ruling coalition led by Shiite militant group Hezbollah supports the Damascus regime.

The Sunni-led opposition has accused Assad of seeking to sow chaos in Lebanon in order to relieve the pressure on his embattled regime.

Reflecting mounting fears of an escalation, Bahrain, Kuwait, Qatar and the United Arab Emirates urged their citizens to avoid travel to Lebanon.

Sheikh Nabil Kaouk, a high-ranking member of Hezbollah, hit out at the opposition on Monday accusing it of transforming the north of the country into a rear base for Syrian rebels.

"The opposition has intentionally dragged Lebanon into the Syrian crisis and transformed into into a corridor and base for armed Syrians," he told a rally in the eastern city of Baalbek.

Since the outbreak of the revolt in Syria in March of last year, thousands of Syrians fleeing the unrest in their country as well as activists have sought refuge in northern Lebanon.

Syria long held sway in Lebanese politics and had troops stationed in the country for 29 years until it was forced to withdraw them in 2005 following the assassination of ex-premier Rafiq Hariri.

It has denied accusations it was involved in his killing.

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Catholic dioceses, colleges sue over Obama mandate

NEW YORK (AP) -- Dozens of Roman Catholic dioceses, schools and other institutions sued the Obama administration Monday over a government mandate requiring most employers to provide birth control coverage as part of their employee health plans.

The lawsuits filed in federal courts around the country represent the largest push against the mandate since President Barack Obama announced the policy in January. Among those suing are the University of Notre Dame, the Archdioceses of Washington, New York and Michigan, and the Catholic University of America.

"We have tried negotiation with the administration and legislation with the Congress, and we'll keep at it, but there's still no fix," said New York Cardinal Timothy Dolan, president of the U.S. Conference of Catholic Bishops. "Time is running out, and our valuable ministries and fundamental rights hang in the balance, so we have to resort to the courts now."

The U.S. Health and Human Services Department adopted the rule to improve health care for women. Last year, an advisory panel from the Institute of Medicine, which advises the federal government, recommended including birth control on the list of covered services, partly because it promotes maternal and child health by allowing women to space their pregnancies.

However, faith leaders from across religious traditions protested, saying the mandate violates religious freedom. The original rule includes a religious exemption that allows houses of worship to opt-out of the mandate, but keeps the requirement in place for religiously affiliated charities.

In response to the political furor, Obama offered to soften the rule so that insurers would pay for birth control instead of religious groups. However, the bishops and others have said that the accommodation doesn't go far enough.

Health and Human Services spokeswoman Erin Shields said Monday that the department does not comment on pending litigation.

Notre Dame's president, the Rev. John Jenkins, said in a statement that the school decided to sue "after much deliberation, discussion and efforts to find a solution acceptable to the various parties." The university argued that the mandate violates religious freedom by requiring many religiously affiliated hospitals, schools and charities to comply.

"We do not seek to impose our religious beliefs on others," Jenkins said. "We simply ask that the government not impose its values on the university when those values conflict with our religious teachings."

Other religious colleges and institutions have already filed federal suit over the mandate, but observers had been closely watching for Notre Dame's next step.

The university, among the best-known Catholic schools in the country, has indicated past willingness to work with President Barack Obama, despite their differences with him on abortion and other issues. Notre Dame came under unprecedented criticism from U.S. bishops and others in 2009 for inviting Obama, who supports abortion rights, as commencement speaker and presenting him with an honorary law degree.

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Rochester Legal: Forming an S Corporation and an LLC in New ...

??????So you want to start a business.? One decsion you will have to make is whether to create an entity for this new business.? As important is deciding what type of entity you should form,? Most small business owners end up deciding between a New York S corporation and a New York limited liability company (LLC) when choosing a formal legal structure for their New York business.? Both entities offer limited liability and a start-up friendly tax treatment. So, which entity is the best for one for your?enterprise and individual circumstances?
???? In the next few blog entries we will answer many of the questions you may have when considering forming a business entity.
???? An S corporation is a (regular) business corporation that elected a special tax treatment with the federal tax authorities and/or the New York State tax authorities.? Otherwise, an S corporation?s characteristics are just like a regular business corporation, which means that it is a legal entity that can be formed by one or more persons.? Once a corporation is formed, the S corporation (not its owners in their personal capacity) will enter into all contracts, issue all invoices and undertake all business activities.? Remember too that professionals can only form a professional corporation.
???? On the other hand, a limited liability company (LLC) is a business entity that can be formed by one or more persons or other business entities.? Once an LLC is formed, the LLC (not its owners in their personal capacity) will enter into all contracts, issue all invoices and undertake all business activities.? As with professionals and corporations, professionals can only form a professional limited liability company.

FAQ:
??
How do I form an S Corporation?
You start by forming a regular business corporation.
The formation of a corporation requires the filing of a ?certificate of incorporation? with New York?s Department of States.
Once the corporation is in existence, you will have to elect S corporation status with the federal and state tax authorities.?
How do I form an LLC?
The formation of an LLC requires the filing of ?articles of organization? with New York?s Department of State.

Who can form an S Corporation?
Only individual U.S. citizens or U.S. residents can form an S corporation.
Who can form an LLC?
Any person or business entity.

How many Shareholders can an S Corporation Have?
An S corporation can only have a maximum of 100 shareholders all of which have to be individuals (some exceptions apply).
How many Members can an LLC have?
An LLC can have an unlimited number of members.

Who are the Owners of an S Corporation?
The owners of an S corporation are called shareholders.? The corporation issues share certificates to the shareholders in exchange for something of value, like cash, services or property.
Who are the Owners of an LLC?
The owners of an LLC are called members.? You become a member by contributing something of value (cash, services, property) to the LLC and receiving a membership interest in return.

How much does it cost to form an S Corporation?
It costs about $235 to form a corporation in New York, excluding legal fees.
How much does it cost to form an LLC?
It costs about $800 in fees to form a limited liability company in New York, excluding legal fees.? The main costs of formation stem from the fact that limited liability companies are required to publish their formation in two newspapers.? Depending on your location, this publication requirement can be quite costly.? The estimated cost of formation above is based on Monroe County?s approved rates for newspapers newspapers (about $500); it is less in other counties and much more (up to $1000.00) in the New York City Area.

How long does it take to form an S Corporation?
For about $200 in fees, your corporation will be in existence within 24 hours.? However, you normally have to wait a couple of days to receive the necessary documents in the mail to prove that your corporation has been formed.? This may be necessary for opening a bank account.
How long does it take to form an LLC?
You can form an LLC within 24 hours.? However, you normally have to wait a couple of days to receive the necessary documents in the mail to prove that your LLC has been formed.? This may be necessary for opening a bank account.? Many banks will also require you to show an operating agreement (see discussion below) before they will open an account for your LLC.? The publication requirement has to be completed within 120 days of formation. Notwithstanding, you can start doing business with your LLC as soon as it is born.? If you fail to fulfill the publication requirement, your business loses the authority to conduct business in New York with the expiration of the 120-day period.

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