The casual-dining chain agreed to provide its shareholders with additional information about the sale.
(AP) -- Applebee's International Inc. has agreed to settle a class-action lawsuit filed by a union challenging the proposed $1.9 billion sale of the restaurant operator to IHOP Corp.
The casual-dining chain won't pay any money in the settlement but has agreed to provide its shareholders with additional information about the sale.
The New Jersey Building Laborers Pension and Annuity Funds sued in Delaware Chancery Court 10 days after the deal with IHOP was announced. The union alleged the transaction robbed Applebee's (Charts) shareholders of financial benefits they might receive if Applebee's stayed independent and sold off its remaining company-owned locations to franchisees.
IHOP (Charts), based in Glendale, Calif., announced July 16 that it planned to buy the struggling Applebee's chain in a deal valued at $25.50 per share.
IHOP stock jumps on $2.1B Applebee's bid Julia Stewart, IHOP's chief executive officer, has said she planned to pay for the transaction in part by selling most of the 508 company-owned stores to franchisees and selling the real estate associated with the stores. Those moves would raise an estimated $950 million.
The proposed settlement requires that shareholders receive supplemental disclosures about the deal.
Union officials had said that Applebee's didn't provide information on IHOP's plan to convert to a franchise-based system; didn't discuss how its financial adviser, Citigroup (Charts, Fortune 500) Global Markets Inc., determined the company's value; and failed to provide details on the deal's financing, arranged by Lehman Brothers Inc (Charts, Fortune 500).
Applebee's declined to comment on the settlement.
The company's shareholders are scheduled to vote Oct. 30 on whether to accept the IHOP proposal.
While the class-action lawsuit appears settled, other shareholders have criticized the deal's price as too low and plan to oppose it.
Sardar Biglari, whose Lion Fund LP owns about 1 million shares, has said he'll vote against the sale. Five members of the Applebee's board of directors say they will, too, claiming it shortchanges investors.
According to a securities filing, the five board members -- including CEO Dave Goebel and Chairman Lloyd Hill -- opposed the deal this summer but were outvoted by the rest of the 14-member board.
credited by: cnnmoney.com
2007-10-14
Airbus set to deliver first A380 on Monday
After repeated, embarassing delays the double-decker jet, which will be the world's largest passenger plane.PARIS (AP) -- After repeated, embarrassing delays, Airbus is to deliver its first A380 superjumbo jet Monday -- a critical step for the European planemaker in its efforts to rebound from a string of troubles.
Airbus parent lifted by sales, Boeing delay The double-decker jet, the world's largest passenger plane, is to take off from the southwestern city of Toulouse, Airbus' headquarters, for delivery to Singapore Airlines following a glitzy delivery ceremony including a sound and light show.
President and CEO Thomas Enders called the handover "a major milestone for the A380 program" in a statement released by Airbus on Friday.
Airbus has gone though five CEOs as multiple delays in the A380 program resulted in massive writeoffs and a restructuring plan that foresees 10,000 job cuts over four years -- not to mention billions of dollars in lost profit.
Such delays have hurt more than just profits: Airbus' reputation has suffered, and U.S. rival Boeing Co. (Charts, Fortune 500) grabbed the top sales spot in 2006.
The A380's inaugural commercial flight has been set for Oct. 25 from Singapore to Sydney. Singapore Airlines has auctioned all seats on the first flight on eBay (Charts, Fortune 500), raising about US$1.25 million for charity.
Singapore has fitted its jet with 471 seats configured in three classes: 12 luxury suites on the main deck, 60 business class seats on the upper deck and 399 economy class seats on both decks. The plane is to replace one of three Boeing 747-400 jets already serving the Sydney-Singapore route.
John Leahy, Airbus' chief salesman, suggested that the A380's problems will be over once the plane gets into commercial service.
"When this airplane is out flying, my marketing job will get a lot easier," he told The Associated Press in an interview last week.
The A380 includes glamorous features such as a cocktail bar complete with water fountain and a duty-free lounge. Some airlines will offer passengers the chance to freshen up with a shower.
Boeing Dreamliner delayed Morale at Airbus has also been hurt by accusations that senior managers profited from knowledge about the A380's problems to cash in on share options. A preliminary report by the French Financial Markets Authority pointed to "massive insider trading" at European Aeronautic Defence & Space Co, Airbus' parent company.
The A380 represents Airbus' bet on future demand for long-haul travel between increasingly congested hub airports worldwide. Boeing argues passengers want point-to-point journeys between smaller airports and is targeting the more lucrative market for midsized jets.
Airbus is targeting every airline currently flying a Boeing 747, currently the biggest passenger plane in the skies.
credited by: cnnmoney.com
Airbus parent lifted by sales, Boeing delay The double-decker jet, the world's largest passenger plane, is to take off from the southwestern city of Toulouse, Airbus' headquarters, for delivery to Singapore Airlines following a glitzy delivery ceremony including a sound and light show.
President and CEO Thomas Enders called the handover "a major milestone for the A380 program" in a statement released by Airbus on Friday.
Airbus has gone though five CEOs as multiple delays in the A380 program resulted in massive writeoffs and a restructuring plan that foresees 10,000 job cuts over four years -- not to mention billions of dollars in lost profit.
Such delays have hurt more than just profits: Airbus' reputation has suffered, and U.S. rival Boeing Co. (Charts, Fortune 500) grabbed the top sales spot in 2006.
The A380's inaugural commercial flight has been set for Oct. 25 from Singapore to Sydney. Singapore Airlines has auctioned all seats on the first flight on eBay (Charts, Fortune 500), raising about US$1.25 million for charity.
Singapore has fitted its jet with 471 seats configured in three classes: 12 luxury suites on the main deck, 60 business class seats on the upper deck and 399 economy class seats on both decks. The plane is to replace one of three Boeing 747-400 jets already serving the Sydney-Singapore route.
John Leahy, Airbus' chief salesman, suggested that the A380's problems will be over once the plane gets into commercial service.
"When this airplane is out flying, my marketing job will get a lot easier," he told The Associated Press in an interview last week.
The A380 includes glamorous features such as a cocktail bar complete with water fountain and a duty-free lounge. Some airlines will offer passengers the chance to freshen up with a shower.
Boeing Dreamliner delayed Morale at Airbus has also been hurt by accusations that senior managers profited from knowledge about the A380's problems to cash in on share options. A preliminary report by the French Financial Markets Authority pointed to "massive insider trading" at European Aeronautic Defence & Space Co, Airbus' parent company.
The A380 represents Airbus' bet on future demand for long-haul travel between increasingly congested hub airports worldwide. Boeing argues passengers want point-to-point journeys between smaller airports and is targeting the more lucrative market for midsized jets.
Airbus is targeting every airline currently flying a Boeing 747, currently the biggest passenger plane in the skies.
credited by: cnnmoney.com
Sticky profits
How a smart small business reinvented the humble decal
(FSB Magazine) -- Gamer Graffix, a manufacturer of stick-on decals for videogame consoles, started out selling its own designs before landing licensing deals with Nintendo and Sony. With new "skins" based on game-giant characters such as Donkey Kong, the Providence-based company (gamergraffix.com) doubled revenues to $10 million in 2006.
Founder Chris White, now 41, was running a toy importer five years ago when an intern showed him how a decal had ruined the finish on his PlayStation. White spent eight months developing an adhesive that let stickers be removed and reapplied.
Niche stores such as EB Games began carrying White's skins in fall 2005. Sales took off in May 2006, when large retailers, including Circuit City and Staples, picked up Gamer's new labels. Gamer started applying its sticky technology to videogame accessories such as Sony's miniguitars and wall graffix, posters that peel easily from walls. Late last year Hasbro licensed the technology to create a line of Transformers wall coverings. Gamer projects sales of $25 million in 2007.
credited by: cnnmoney.com
(FSB Magazine) -- Gamer Graffix, a manufacturer of stick-on decals for videogame consoles, started out selling its own designs before landing licensing deals with Nintendo and Sony. With new "skins" based on game-giant characters such as Donkey Kong, the Providence-based company (gamergraffix.com) doubled revenues to $10 million in 2006.
Founder Chris White, now 41, was running a toy importer five years ago when an intern showed him how a decal had ruined the finish on his PlayStation. White spent eight months developing an adhesive that let stickers be removed and reapplied.
Niche stores such as EB Games began carrying White's skins in fall 2005. Sales took off in May 2006, when large retailers, including Circuit City and Staples, picked up Gamer's new labels. Gamer started applying its sticky technology to videogame accessories such as Sony's miniguitars and wall graffix, posters that peel easily from walls. Late last year Hasbro licensed the technology to create a line of Transformers wall coverings. Gamer projects sales of $25 million in 2007.
credited by: cnnmoney.com
Inside the mind of a crazy (rich) inventor
Scott Jones thinks up more ideas in a month than most folks do in a lifetime. Find out how he makes them pay.
(FSB Magazine) Indianapolis -- You probably don't know the name Scott Jones, but chances are his life has touched yours. Checked your voicemail lately? You've got Jones to thank. Pop a CD in your computer, and iTunes brings up the track names. That feature comes from another of Jones's companies, Gracenote. When Indiana last year adopted daylight savings time, it was Jones who pushed hardest for the change. The roller coaster at the Indianapolis Zoo? Jones. Dinosaur skeletons at the Children's Museum of Indianapolis? Made possible in part by the Scott A. Jones Foundation.
Most folks in the Indianapolis suburb of Carmel (pronounced like the candy) know their wealthy, energetic neighbor as "the guy who invented voicemail." In the early '90s Jones made about $50 million on his company, which created the predominate form of voicemail, and he "retired" at age 31. But he found he wasn't the kind of entrepreneur who could just fly off into the sunset in his helicopter. Over the past two decades this driven inventor has been generating ideas for new products and companies - some were successful, others hit the scrap heap - at a pace that would make Thomas Edison's head spin.
Jones's latest company, ChaCha (chacha.com), is developing a potential rival to Google - a search engine assisted by human experts who will help you find your answer. And here's what Jones claims to have on deck: self-propelled robotic lawn mowers, a method to sequence your entire DNA in one minute, a way to make humans fly.
From anyone else these might seem the ravings of a madman. But Jones backs up his ideas with a fortune he estimates to be worth $150 million, a brain that lets him keep pace with the geekiest of scientists, and a knack for managing startups. His ambition is to change the way people live, and he figures that any one of his half a dozen or so new startups could do just that.
We were intrigued by his latest ideas, but even more so by how he conjures them, culls them, and inspires a team to nurture them. Just what, we wondered, goes on inside the head of this quintessential American inventor?
credited by: cnnmoney.com
(FSB Magazine) Indianapolis -- You probably don't know the name Scott Jones, but chances are his life has touched yours. Checked your voicemail lately? You've got Jones to thank. Pop a CD in your computer, and iTunes brings up the track names. That feature comes from another of Jones's companies, Gracenote. When Indiana last year adopted daylight savings time, it was Jones who pushed hardest for the change. The roller coaster at the Indianapolis Zoo? Jones. Dinosaur skeletons at the Children's Museum of Indianapolis? Made possible in part by the Scott A. Jones Foundation.
Most folks in the Indianapolis suburb of Carmel (pronounced like the candy) know their wealthy, energetic neighbor as "the guy who invented voicemail." In the early '90s Jones made about $50 million on his company, which created the predominate form of voicemail, and he "retired" at age 31. But he found he wasn't the kind of entrepreneur who could just fly off into the sunset in his helicopter. Over the past two decades this driven inventor has been generating ideas for new products and companies - some were successful, others hit the scrap heap - at a pace that would make Thomas Edison's head spin.
Jones's latest company, ChaCha (chacha.com), is developing a potential rival to Google - a search engine assisted by human experts who will help you find your answer. And here's what Jones claims to have on deck: self-propelled robotic lawn mowers, a method to sequence your entire DNA in one minute, a way to make humans fly.
From anyone else these might seem the ravings of a madman. But Jones backs up his ideas with a fortune he estimates to be worth $150 million, a brain that lets him keep pace with the geekiest of scientists, and a knack for managing startups. His ambition is to change the way people live, and he figures that any one of his half a dozen or so new startups could do just that.
We were intrigued by his latest ideas, but even more so by how he conjures them, culls them, and inspires a team to nurture them. Just what, we wondered, goes on inside the head of this quintessential American inventor?
credited by: cnnmoney.com
An immigration victory for employers
A court ruling blocks federal efforts to punish businesses that hire illegal aliens.
(FORTUNE Small Business) -- On Wednesday small business owners nationwide caught a break of sorts when a federal judge blocked the implementation of a recent Bush administration initiative that would use the Social Security system to go after employers of illegal immigrants.
Under the Department of Homeland Security's "no match" policy, announced in August 2007, employers would have 90 days after receiving a government letter to verify the immigration status of an employee whose social security number did not match official records.
Any employer who ignored the letters could face a felony charge of illegal hiring practices, punishable by as much as six months in prison and a fine of $3,000 for each illegal worker. To avoid penalties, employers would have to confirm the status of their workers and fire any who proved to be illegal.
An ideologically diverse coalition of organizations, including the AFL-CIO, the U.S. Chamber of Commerce, and several small business groups, sued the Department of Homeland Security in federal court in San Francisco, arguing that the rule placed too heavy a burden on employers.
"The [90-day] deadline forces employers to make a Hobson's choice," says Robin Conrad, executive vice president for the Chamber's National Litigation Center. Many small businesses lack the resources to verify their employees' immigration status. As a result, Conrad says, "either the business fires the employee in order to immunize itself or does nothing and is subject to criminal penalties."
Homeland Security officials disagree. The no-match rules give businesses "clear guidance on what to do if they receive a letter," said Homeland Security Secretary Michael Chertoff in a statement opposing the court's decision. "If an employer follows the regulation's guidance in good faith, which entails various steps to rectify the no-match within 90 days of receiving the letter, U.S. Immigration and Customs Enforcement will not use the letter as evidence in an enforcement action against the employer."
But small businesses suffer disproportionately when they lose staff. And most small employers generally struggle to comply with government procedures requiring them to verify the immigration status of their employees. A 2006 study estimated that of the Social Security Administration's 435 million individual records, 17.8 million contained mismatched information that could trigger a no-match letter. In that case an employee must get an appointment to go in person to the Social Security Administration and then fill out paperwork, which gets sent by mail to DHS.
Opponents of the policy argue that piecemeal enforcement will create more headaches for employers and regulators without reducing illegal immigration. "The Social Security Administration doesn't have the resources to deal with 140,000 people wandering down to say, 'please verify whether or not I am legal,'" says Kathleen Campbell Walker, president of the American Immigration Lawyers Association (aila.org), a trade association based in Washington, D.C. And small businesses suffer disproportionately when they lose staff.
Since August the DHS has sent out 140,000 no match letters to employers. But Judge Charles R. Breyer of the Northern District of California put those letters on ice until the court resolves whether or not the rules are legal, a blow to the administration's ongoing efforts to crack down on illegal immigration.
credited by: cnnmoney.comhttp://cnnmoney.com
(FORTUNE Small Business) -- On Wednesday small business owners nationwide caught a break of sorts when a federal judge blocked the implementation of a recent Bush administration initiative that would use the Social Security system to go after employers of illegal immigrants.
Under the Department of Homeland Security's "no match" policy, announced in August 2007, employers would have 90 days after receiving a government letter to verify the immigration status of an employee whose social security number did not match official records.
Any employer who ignored the letters could face a felony charge of illegal hiring practices, punishable by as much as six months in prison and a fine of $3,000 for each illegal worker. To avoid penalties, employers would have to confirm the status of their workers and fire any who proved to be illegal.
An ideologically diverse coalition of organizations, including the AFL-CIO, the U.S. Chamber of Commerce, and several small business groups, sued the Department of Homeland Security in federal court in San Francisco, arguing that the rule placed too heavy a burden on employers.
"The [90-day] deadline forces employers to make a Hobson's choice," says Robin Conrad, executive vice president for the Chamber's National Litigation Center. Many small businesses lack the resources to verify their employees' immigration status. As a result, Conrad says, "either the business fires the employee in order to immunize itself or does nothing and is subject to criminal penalties."
Homeland Security officials disagree. The no-match rules give businesses "clear guidance on what to do if they receive a letter," said Homeland Security Secretary Michael Chertoff in a statement opposing the court's decision. "If an employer follows the regulation's guidance in good faith, which entails various steps to rectify the no-match within 90 days of receiving the letter, U.S. Immigration and Customs Enforcement will not use the letter as evidence in an enforcement action against the employer."
But small businesses suffer disproportionately when they lose staff. And most small employers generally struggle to comply with government procedures requiring them to verify the immigration status of their employees. A 2006 study estimated that of the Social Security Administration's 435 million individual records, 17.8 million contained mismatched information that could trigger a no-match letter. In that case an employee must get an appointment to go in person to the Social Security Administration and then fill out paperwork, which gets sent by mail to DHS.
Opponents of the policy argue that piecemeal enforcement will create more headaches for employers and regulators without reducing illegal immigration. "The Social Security Administration doesn't have the resources to deal with 140,000 people wandering down to say, 'please verify whether or not I am legal,'" says Kathleen Campbell Walker, president of the American Immigration Lawyers Association (aila.org), a trade association based in Washington, D.C. And small businesses suffer disproportionately when they lose staff.
Since August the DHS has sent out 140,000 no match letters to employers. But Judge Charles R. Breyer of the Northern District of California put those letters on ice until the court resolves whether or not the rules are legal, a blow to the administration's ongoing efforts to crack down on illegal immigration.
credited by: cnnmoney.comhttp://cnnmoney.com
American Airlines lifts fares by $10
The move could prompt other airlines to raise ticket prices to keep pace with rising fuel costs.
NEW YORK (AP) -- American Airlines, the nation's largest airline, raised most of its round-trip domestic fares by $10 late Thursday night.
The move, one of a series of airline price hikes in recent weeks, could prompt other carriers to follow suit as they struggle to keep pace with rising fuel costs amid strong customer demand.
No airline had matched American's increase as of Friday morning, said Rick Seaney, chief executive of consumer airfare research Web site FareCompare.com.
"I fully expect matches to come (later) today or over the weekend," he said.
Markets served by discount carriers were largely excluded from American's move, said JPMorgan airline analyst Jamie Baker. FareCompare estimated about 75 percent of the carrier's domestic markets were affected; fares on some routes out of Dallas, Miami and New York were unchanged.
Seaney said it is not unusual for American to raise fares in a piecemeal fashion to gauge reaction by Southwest Airlines Co. and other competitors.
Airline stocks descend as oil prices take off "They're sort of probing," he said.
In an emailed statement, American spokesman Tim Smith attributed the increase to "continuing pressure on oil and fuel prices."
A similar move by Southwest or other low-cost airlines would be significant because it would pull up low-end fares overall, Baker said in a note to investors.
Southwest (Charts, Fortune 500) last month raised one-way fares by as much as $10, citing higher fuel costs. Competitors quickly followed with their own price increases.
"Given (Southwest's) growing affection with holiday-weekend fare increases, we remain optimistic that the industry will benefit from one more (Southwest) increase before year's end - if so, marking its sixth effort in 2007," Baker said.
Baker also said he believes American and Northwest Airlines Corp. (Charts, Fortune 500) might cut capacity by pulling larger, relatively inefficient planes out of service. Such a move would boost demand and likely put further pressure on prices.
Shares of American parent AMR Corp. (Charts, Fortune 500) jumped 1.5 percent, in midday trading on the New York Stock Exchange. Most other airline shares fell.
credited by: cnnmoney.com
NEW YORK (AP) -- American Airlines, the nation's largest airline, raised most of its round-trip domestic fares by $10 late Thursday night.
The move, one of a series of airline price hikes in recent weeks, could prompt other carriers to follow suit as they struggle to keep pace with rising fuel costs amid strong customer demand.
No airline had matched American's increase as of Friday morning, said Rick Seaney, chief executive of consumer airfare research Web site FareCompare.com.
"I fully expect matches to come (later) today or over the weekend," he said.
Markets served by discount carriers were largely excluded from American's move, said JPMorgan airline analyst Jamie Baker. FareCompare estimated about 75 percent of the carrier's domestic markets were affected; fares on some routes out of Dallas, Miami and New York were unchanged.
Seaney said it is not unusual for American to raise fares in a piecemeal fashion to gauge reaction by Southwest Airlines Co. and other competitors.
Airline stocks descend as oil prices take off "They're sort of probing," he said.
In an emailed statement, American spokesman Tim Smith attributed the increase to "continuing pressure on oil and fuel prices."
A similar move by Southwest or other low-cost airlines would be significant because it would pull up low-end fares overall, Baker said in a note to investors.
Southwest (Charts, Fortune 500) last month raised one-way fares by as much as $10, citing higher fuel costs. Competitors quickly followed with their own price increases.
"Given (Southwest's) growing affection with holiday-weekend fare increases, we remain optimistic that the industry will benefit from one more (Southwest) increase before year's end - if so, marking its sixth effort in 2007," Baker said.
Baker also said he believes American and Northwest Airlines Corp. (Charts, Fortune 500) might cut capacity by pulling larger, relatively inefficient planes out of service. Such a move would boost demand and likely put further pressure on prices.
Shares of American parent AMR Corp. (Charts, Fortune 500) jumped 1.5 percent, in midday trading on the New York Stock Exchange. Most other airline shares fell.
credited by: cnnmoney.com
Taxpayers pass on phone tax refund
The IRS says taxpayers collected only half of the $8B available for the refund of phone taxes.
WASHINGTON (AP) -- What if the government tried to give American taxpayers some of their money back, but the taxpayers didn't seem to want it?
That's what happened this year, as taxpayers collected only about half the $8 billion the IRS expected to pay them in its phone tax refund, the most far-reaching refund in the agency's history. The telephone excise tax was created in 1898 to fund the Spanish-American War. After losing several lawsuits disputing the legitimacy of the tax, the IRS created a program to refund the 3 percent tax paid on long distance or bundled service from March 2003 to July 2006.
The tax agency estimated the one-time refund would affect 145 million to 165 million taxpayers.
But, as of August, the IRS had repaid just over half of the over-collected tax, according to the Treasury Inspector General for Tax Administration.
The inspector general report cited two main reasons for the lower-than-expected refunds:
--Many taxpayers, following the advice of the IRS, didn't want to bother searching for old phone bills to calculate exactly how much they were owed, and took the standard $30 to $60 refund instead, refunds that were based on the number of exemptions claimed.
--Despite what the report said were generally good efforts by the IRS to communicate the program to taxpayers, many remained uninformed. As of June 9, about 87.6 million, or 71.5 percent, of the 122.6 million individual income tax returns filed had made a phone tax refund claim.
The report recommended that the IRS identify demographics that had relatively low rates of claims and provide additional information to these taxpayers on how they might still claim the refund.
Separately, the Government Accountability Office issued a report concluding the IRS loses money because of problems in managing its paper case files.
The GAO, the investigative wing of Congress, cited several District Court cases where the IRS lost more than $40,000 in revenue because it could not locate the case file.
It said the IRS could not find 10 to 14 percent of case files requested in two prior GAO audits, and that the IRS could not come up with 19 percent of the case files when the Treasury Inspector General, in an audit, asked for a random sample of tax records.
"This is not a new problem," said Senate Finance Committee ranking Republican Charles Grassley of Iowa, who requested the study with committee Chairman Max Baucus, D-Mont. "The GAO's findings should be an embarrassment to the agency."
credited by: cnnmoney.comhttp://cnnmoney.com
WASHINGTON (AP) -- What if the government tried to give American taxpayers some of their money back, but the taxpayers didn't seem to want it?
That's what happened this year, as taxpayers collected only about half the $8 billion the IRS expected to pay them in its phone tax refund, the most far-reaching refund in the agency's history. The telephone excise tax was created in 1898 to fund the Spanish-American War. After losing several lawsuits disputing the legitimacy of the tax, the IRS created a program to refund the 3 percent tax paid on long distance or bundled service from March 2003 to July 2006.
The tax agency estimated the one-time refund would affect 145 million to 165 million taxpayers.
But, as of August, the IRS had repaid just over half of the over-collected tax, according to the Treasury Inspector General for Tax Administration.
The inspector general report cited two main reasons for the lower-than-expected refunds:
--Many taxpayers, following the advice of the IRS, didn't want to bother searching for old phone bills to calculate exactly how much they were owed, and took the standard $30 to $60 refund instead, refunds that were based on the number of exemptions claimed.
--Despite what the report said were generally good efforts by the IRS to communicate the program to taxpayers, many remained uninformed. As of June 9, about 87.6 million, or 71.5 percent, of the 122.6 million individual income tax returns filed had made a phone tax refund claim.
The report recommended that the IRS identify demographics that had relatively low rates of claims and provide additional information to these taxpayers on how they might still claim the refund.
Separately, the Government Accountability Office issued a report concluding the IRS loses money because of problems in managing its paper case files.
The GAO, the investigative wing of Congress, cited several District Court cases where the IRS lost more than $40,000 in revenue because it could not locate the case file.
It said the IRS could not find 10 to 14 percent of case files requested in two prior GAO audits, and that the IRS could not come up with 19 percent of the case files when the Treasury Inspector General, in an audit, asked for a random sample of tax records.
"This is not a new problem," said Senate Finance Committee ranking Republican Charles Grassley of Iowa, who requested the study with committee Chairman Max Baucus, D-Mont. "The GAO's findings should be an embarrassment to the agency."
credited by: cnnmoney.comhttp://cnnmoney.com
Wheat supplies could hit 59-year low
Robust demand after two years of weak harvests should drop stockpiles to lowest level since 1949, government report says.
NEW YORK (AP) -- U.S. wheat stockpiles may shrink to the lowest level in 59 years due to robust demand for the grain following two years of weak harvests worldwide, the U.S. Department of Agriculture said Friday in a report.
The USDA projects wheat supplies for the 2007-2008 crop year will fall to 307 million bushels, down 55 million bushels from its estimate last month, due to the fast pace of export shipments. Foreign appetite for the country's wheat has surged after poor weather damaged harvests around the world this year. Record high prices have done little to dampen demand.
Stockpiles of wheat at the crop year's end would be the lowest since 1949.
A bushel of wheat rose the 30-cent maximum Thursday to settle at $8.83 on the Chicago Board of Trade. Wheat fetched as little as $5 a bushel in May.
Wheat's the new top of the crops The USDA also raised its expectations for corn production this year and pared down its estimates for the soybean crop. The agency expects a 13.32 billion bushel corn crop, up slightly from its earlier 13.3 billion-bushel forecast. Soybean production is expected just shy of 2.6 billion bushels, down 21 million bushels from an earlier estimate.
Corn futures finished down 3.5 cents at $3.4375 a bushel Thursday on the CBOT, while soybean futures closed up 13.25 cents to $9.815 a bushel.
NEW YORK (AP) -- U.S. wheat stockpiles may shrink to the lowest level in 59 years due to robust demand for the grain following two years of weak harvests worldwide, the U.S. Department of Agriculture said Friday in a report.
The USDA projects wheat supplies for the 2007-2008 crop year will fall to 307 million bushels, down 55 million bushels from its estimate last month, due to the fast pace of export shipments. Foreign appetite for the country's wheat has surged after poor weather damaged harvests around the world this year. Record high prices have done little to dampen demand.
Stockpiles of wheat at the crop year's end would be the lowest since 1949.
A bushel of wheat rose the 30-cent maximum Thursday to settle at $8.83 on the Chicago Board of Trade. Wheat fetched as little as $5 a bushel in May.
Wheat's the new top of the crops The USDA also raised its expectations for corn production this year and pared down its estimates for the soybean crop. The agency expects a 13.32 billion bushel corn crop, up slightly from its earlier 13.3 billion-bushel forecast. Soybean production is expected just shy of 2.6 billion bushels, down 21 million bushels from an earlier estimate.
Corn futures finished down 3.5 cents at $3.4375 a bushel Thursday on the CBOT, while soybean futures closed up 13.25 cents to $9.815 a bushel.
Wholesale inflation jumps, core prices tame
Overall Producer Price Index up 1.1%, topping forecasts, but increase excluding food and energy is less than expected.
NEW YORK (CNNMoney.com) -- Prices paid by businesses at the wholesale level jumped more than expected in September on higher food and energy prices, although price pressures for other items stayed in check, according to a government report released Friday.
The Producer Price Index showed a 1.1 percent increase in the month, following a 1.4 percent drop in those prices in August. Economists surveyed by Briefing.com had forecast only a 0.5 percent in the PPI.
Energy prices rose 4.1 percent, while food prices jumped 1.5 percent in September.
But the more closely watched core PPI reading, which strips out volatile food and energy prices, rose only 0.1 percent, less than the 0.2 percent rise in August. Economists had forecast another 0.2 percent rise.
The rise left core PPI up 2.0 percent over the last 12 months, down from a 2.2 percent rise on that basis a month earlier. The Federal Reserve is generally seen as having a comfort zone for core measures of inflation as being up between 1 to 2 percent over a 12-month period. With the market closely focused on whether the central bank will again cut interest rates at its Oct. 31 meeting, the core PPI reading is seen as another green light for such a cut.
The PPI is one of the more volatile inflation readings, as the previous month's reading is not revised using more complete measures of prices. It also is a report of limited breadth, measuring only the price of goods, not services. But in the months when it is released ahead of the more closely followed Consumer Price Index, the government's key inflation reading of inflation at the retail level, the PPI gets a fair amount of attention from investors and economists.
Stock futures, which had been lower Friday, turned higher on the PPI report, as well as a stronger than forecast retail sales report.
The CPI report is set to be released Wednesday, with the overall CPI forecast to be up 0.2 percent after a 0.1 percent decline in August. The core CPI is forecast to be up 0.2 percent, the same gain seen in the August reading.
credited by: cnnmoney.com
NEW YORK (CNNMoney.com) -- Prices paid by businesses at the wholesale level jumped more than expected in September on higher food and energy prices, although price pressures for other items stayed in check, according to a government report released Friday.
The Producer Price Index showed a 1.1 percent increase in the month, following a 1.4 percent drop in those prices in August. Economists surveyed by Briefing.com had forecast only a 0.5 percent in the PPI.
Energy prices rose 4.1 percent, while food prices jumped 1.5 percent in September.
But the more closely watched core PPI reading, which strips out volatile food and energy prices, rose only 0.1 percent, less than the 0.2 percent rise in August. Economists had forecast another 0.2 percent rise.
The rise left core PPI up 2.0 percent over the last 12 months, down from a 2.2 percent rise on that basis a month earlier. The Federal Reserve is generally seen as having a comfort zone for core measures of inflation as being up between 1 to 2 percent over a 12-month period. With the market closely focused on whether the central bank will again cut interest rates at its Oct. 31 meeting, the core PPI reading is seen as another green light for such a cut.
The PPI is one of the more volatile inflation readings, as the previous month's reading is not revised using more complete measures of prices. It also is a report of limited breadth, measuring only the price of goods, not services. But in the months when it is released ahead of the more closely followed Consumer Price Index, the government's key inflation reading of inflation at the retail level, the PPI gets a fair amount of attention from investors and economists.
Stock futures, which had been lower Friday, turned higher on the PPI report, as well as a stronger than forecast retail sales report.
The CPI report is set to be released Wednesday, with the overall CPI forecast to be up 0.2 percent after a 0.1 percent decline in August. The core CPI is forecast to be up 0.2 percent, the same gain seen in the August reading.
credited by: cnnmoney.com
Retail sales beat forecasts but ...
Last month's better-than-expected 0.6 percent jump in total sales was helped by auto purchases. But clothing, department stores and furniture sales remained weak.
NEW YORK (CNNMoney.com) -- Retail sales saw a surprisingly better-than-expected bounce, helped by a surge in auto purchases in September, although many merchants complained that unseasonably warm weather hurt demand for fall merchandise last month.
"This report is weaker than it appears," Ian Shepherdson, chief U.S. economist with High Frequency Economic, said in a report Friday. "Auto sales lifted the headline [number] and sales ex-autos were boosted by a 2 percent rise in gasoline sales."
The Commerce Department said that total sales rose 0.6 percent last month after a gain of 0.3 percent in August. A strong 1.2 percent jump in auto sales drove much of that increase.
Economists surveyed by Briefing.com had forecast a rise of 0.2 percent for the month.
Stripping out volatile auto sales, retail sales also saw a slightly better-than-expected 0.4 percent increase versus a 0.4 percent decline in August.
Economists, on average, had forecast a gain of 0.3 percent. But excluding both auto and gasoline station sales, retail sales rose just 0.2 percent.
Retailers wave the warning flags On Thursday, some of the nation's biggest retail chains - including Wal-Mart (Charts, Fortune 500), Nordstrom, Target (Charts, Fortune 500) and Gap (Charts, Fortune 500) - reported disappointing sales at their stores open at least a year, which is a key measure of retail performance.
Wal-Mart said warmer weather and economic constraints on its consumers resulted in sluggish same-store sales growth at its stores last month.
These trends were reflected in the government's report.
Excluding a 2 percent gain in gasoline station sales and a 0.9 percent increase in purchases at electronics stores, discretionary purchases in other retail categories slumped last month.
Clothing sales fell 0.4 percent, department stores suffered a 0.7 percent decline and sales of furniture and home furnishing products also decreased 0.6 percent.
"The September report is definitely a mixed report," said Scott Hoyt, director of consumer economics at Moody's Economy.com.
"The weakness in clothing and department stores is consistent with the weak same-store sales numbers that we saw from Gap, J.C. Penney, Nordstrom and other chains yesterday," he said.
This report is also consistent with our view that consumer spending has moderated from earlier this year," Hoyt said.
Brian Bethune, U.S. economist with Global Insight, agreed.
"If you take out motor vehicle and gas sales, in terms of the total picture, it's consistent with the overall theme that consumers are becoming more cautious," Bethune said.
Bethune said the jump in auto purchases was induced by very big incentives from carmakers. "They reduced the average finance rate to incredible low levels in September," he said. "So you have to put the motor vehicle piece of the picture in context of the incentives provided last month."
"This also shows that in order to get consumers to shop today, retailers are resorting to incentives, gimmicks, coupons," said Bethune. "In other words, they're using every trick in the book to keep consumers engaged."
credited by: cnnmoney.com
NEW YORK (CNNMoney.com) -- Retail sales saw a surprisingly better-than-expected bounce, helped by a surge in auto purchases in September, although many merchants complained that unseasonably warm weather hurt demand for fall merchandise last month.
"This report is weaker than it appears," Ian Shepherdson, chief U.S. economist with High Frequency Economic, said in a report Friday. "Auto sales lifted the headline [number] and sales ex-autos were boosted by a 2 percent rise in gasoline sales."
The Commerce Department said that total sales rose 0.6 percent last month after a gain of 0.3 percent in August. A strong 1.2 percent jump in auto sales drove much of that increase.
Economists surveyed by Briefing.com had forecast a rise of 0.2 percent for the month.
Stripping out volatile auto sales, retail sales also saw a slightly better-than-expected 0.4 percent increase versus a 0.4 percent decline in August.
Economists, on average, had forecast a gain of 0.3 percent. But excluding both auto and gasoline station sales, retail sales rose just 0.2 percent.
Retailers wave the warning flags On Thursday, some of the nation's biggest retail chains - including Wal-Mart (Charts, Fortune 500), Nordstrom, Target (Charts, Fortune 500) and Gap (Charts, Fortune 500) - reported disappointing sales at their stores open at least a year, which is a key measure of retail performance.
Wal-Mart said warmer weather and economic constraints on its consumers resulted in sluggish same-store sales growth at its stores last month.
These trends were reflected in the government's report.
Excluding a 2 percent gain in gasoline station sales and a 0.9 percent increase in purchases at electronics stores, discretionary purchases in other retail categories slumped last month.
Clothing sales fell 0.4 percent, department stores suffered a 0.7 percent decline and sales of furniture and home furnishing products also decreased 0.6 percent.
"The September report is definitely a mixed report," said Scott Hoyt, director of consumer economics at Moody's Economy.com.
"The weakness in clothing and department stores is consistent with the weak same-store sales numbers that we saw from Gap, J.C. Penney, Nordstrom and other chains yesterday," he said.
This report is also consistent with our view that consumer spending has moderated from earlier this year," Hoyt said.
Brian Bethune, U.S. economist with Global Insight, agreed.
"If you take out motor vehicle and gas sales, in terms of the total picture, it's consistent with the overall theme that consumers are becoming more cautious," Bethune said.
Bethune said the jump in auto purchases was induced by very big incentives from carmakers. "They reduced the average finance rate to incredible low levels in September," he said. "So you have to put the motor vehicle piece of the picture in context of the incentives provided last month."
"This also shows that in order to get consumers to shop today, retailers are resorting to incentives, gimmicks, coupons," said Bethune. "In other words, they're using every trick in the book to keep consumers engaged."
credited by: cnnmoney.com
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