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MBTA blames developer HYM"s project for new safety issue, service disruptions

The agency suspended train service on parts of the Green and Orange lines because of "severely deteriorated" columns at the Government Center garage......»»

Category: topSource: bizjournalsJun 23rd, 2022

CARNIVAL CORPORATION & PLC PROVIDES SECOND QUARTER 2022 BUSINESS UPDATE

MIAMI, June 24, 2022 /PRNewswire/ -- Carnival Corporation & plc ((NYSE/LSE: CCL, NYSE:CUK) provides second quarter 2022 business update. U.S. GAAP net loss of $1.8 billion and adjusted net loss of $1.9 billion for the second quarter of 2022. Cash from operations turned positive in the second quarter of 2022. Second quarter 2022 ended with $7.5 billion of liquidity, including cash, short-term investments and borrowings available under the company's revolving credit facility. Revenue increased by nearly 50% in the second quarter of 2022 compared to first quarter 2022, reflecting continued sequential improvement. For the cruise segments, revenue per passenger cruise day ("PCD") for the second quarter of 2022 decreased slightly compared to a strong 2019. Occupancy in the second quarter of 2022 was 69%, an increase from 54% in the prior quarter. Customer deposits increased $1.4 billion to $5.1 billion as of May 31, 2022 from $3.7 billion as of February 28, 2022. As of June 24, 2022, 91% of the company's capacity is in guest cruise operation. Booking volumes for all future sailings during the second quarter of 2022 were nearly double the booking volumes during the first quarter of 2022; the company notes these were its best quarterly booking volumes since the beginning of the pandemic. As previously announced, effective August 1st, Arnold Donald, President and CEO, is being appointed Vice Chair of the Boards of Directors. Josh Weinstein, currently Chief Operations Officer for the company, will assume the role of President and CEO of Carnival Corporation & plc. At that time, Weinstein will also assume the role of Chief Climate Officer and become a Director on the Boards of Directors. A 20-year veteran of Carnival Corporation & plc, Weinstein has a long history of success in critical senior-level roles in the company. In his most recent assignment for the past two years as Carnival Corporation & plc's Chief Operations Officer, Weinstein oversaw several major operational functions including global maritime, global ports and destinations, global sourcing, global IT and global internal audit. During this time, he also oversaw Carnival UK, the operating company for P&O Cruises (UK) and Cunard, which he previously managed directly for three years as president. Prior to his role with Carnival UK, Weinstein was treasurer for the company for 10 years and an attorney in the corporate legal department for five years. Carnival Corporation & plc President and CEO Arnold Donald noted, "With cash from operations turning positive and the company heading in the right direction, now is the time to transition leadership to the next generation. Josh Weinstein has the skill set ideally suited to take this company forward, including strong operating experience and in-depth industry knowledge cultivated over the past two decades. I am confident our positive momentum will continue under Josh's leadership and I remain confident in the long-term future of our company." Carnival Corporation & plc's next President and CEO Josh Weinstein noted, "I am honored to lead this company as we push forward with a relentless long-term focus on driving revenue and returns to improve our balance sheet, while ensuring each brand provides an authentic cruise experience that resonates with their unique guest base, delivering value for our shareholders and our other many stakeholders." Weinstein added, "It is truly humbling to support our exceptionally talented team—150,000 strong ship and shore—in this effort. They've accomplished so much during our restart, with incredible determination, perseverance and integrity. This gives me tremendous confidence and optimism about our future." Second Quarter 2022 Results and Statistical Information Revenue increased by nearly 50% in the second quarter of 2022 compared to first quarter 2022, reflecting continued sequential improvement. For the cruise segments, revenue per PCD for the second quarter of 2022 decreased slightly compared to a strong 2019. Onboard and other revenue per PCD for the second quarter of 2022 increased significantly compared to a strong 2019. Occupancy in the second quarter of 2022 was 69%, an increase from 54% in the prior quarter. Available lower berth days ("ALBD") for the second quarter of 2022 were 16.7 million, which represents 74% of total fleet capacity, increasing from 60% in the first quarter of 2022. Adjusted EBITDA for the second quarter of 2022 was $(0.9) billion, an improvement over the first quarter of 2022. Total customer deposits increased $1.4 billion to $5.1 billion as of May 31, 2022 from $3.7 billion as of February 28, 2022. Cash from operations turned positive in April and was positive for the second quarter of 2022. During the second quarter of 2022, the company issued $1.0 billion aggregate principal amount of senior unsecured notes due 2030, intended to refinance various 2023 debt maturities and invested $0.5 billion in capital expenditures. In addition, the company repaid $0.2 billion of debt principal and incurred $0.4 billion of interest expense, net during the quarter. The company ended the second quarter of 2022 with $7.5 billion of liquidity, including cash, short-term investments and borrowings available under the revolving credit facility. Resumption of Guest Cruise Operations Donald noted, "We are aggressively, yet thoughtfully, ramping up to full operations with over 90 percent of the fleet now in service. We are driving occupancy higher, while at the same time significantly increasing available capacity, resulting in a nearly 50 percent sequential improvement in revenue in the second quarter, despite facing constantly changing and far more restrictive protocols than broader society and travel at large." Donald added, "Carnival Cruise Line, our largest brand, achieved consistently positive adjusted EBITDA beginning in March. Carnival Cruise Line also became our first brand to sail its entire fleet in May and is expecting occupancy to approach 110 percent during our third quarter." As of June 24, 2022, 91% of the company's capacity is in guest cruise operation as part of its ongoing return to service. Five of the company's nine brands now have their entire fleet back in guest cruise operations, including Carnival Cruise Line, which became the first major cruise line in the U.S. to celebrate its entire fleet entering service. The company's enhanced COVID-19 protocols have helped it become among the safest forms of socializing and travel, with far lower incidence rates than on land. While the company's adjusted cruise costs excluding fuel per ALBD (see Non-GAAP Financial Measures) have benefited from the sale of smaller-less efficient ships and the delivery of larger-more efficient ships, this benefit is offset by a portion of its fleet being in pause status for part of the year, restart related expenses, an increase in the number of dry-dock days, the cost of maintaining enhanced health and safety protocols, inflation and supply chain disruptions. The company anticipates that some of these costs and expenses will end in 2022. Additionally, the company continues to expect to see a significant improvement in adjusted cruise costs excluding fuel per ALBD from the first half of 2022 to the second half of 2022 with a mid-teens increase for the full year 2022 compared to 2019. The COVID-19 global pandemic and its ongoing effects, inflation and higher fuel prices are collectively having a material impact on the company's business, including its results of operations, liquidity and financial position. In addition, as is the case with the travel and leisure sector generally, the company is making meaningful progress in resolving the challenges it is experiencing with onboard staffing which have resulted in occupancy constraints on certain voyages. The company expects a net loss for the third quarter of 2022. For the full year 2022, the company continues to expect a net loss. The company continues to believe that adjusted EBITDA will improve with the ongoing resumption of guest cruise operations and continues to expect improvement in occupancy throughout 2022 until it returns to historical levels in 2023. The company expects positive adjusted EBITDA for the third quarter of 2022. Fleet Optimization Carnival Cruise Line – proudly known as America's cruise line – is teaming up with Costa Cruises – Italy's favorite cruise line – creating a new concept for Carnival's North American guests when COSTA® by CARNIVAL® debuts in the spring of 2023 and Costa Venezia joins the Carnival fleet. Costa Venezia will be followed by Costa Firenze arriving in the spring of 2024. Carnival will operate the ships, which will marry the great service, food and entertainment that Carnival's guests enjoy with Costa's Italian design features. In addition, Carnival Cruise Line announced earlier this month that Costa Luminosa will join their fleet later this year and will start guest operations as Carnival Luminosa in November 2022. This will allow Carnival to finally start highly anticipated itineraries from Brisbane and have two ships operating in Australia for the high season Down-Under. Furthermore, last week the company announced the removal of another smaller-less efficient ship from our fleet. This brings the planned removal to 23 smaller-less efficient ships since the beginning of the pause in guest cruise operations further reducing the company's rate of capacity growth. Donald noted, "We continue to build on our fleet optimization efforts by reallocating capacity in a highly differentiated way to strengthen return on invested capital across our portfolio. In addition, we continue to further refine our fleet and have announced the removal of an additional smaller-less efficient ship. Upon returning to full operations, nearly a quarter of our capacity will consist of newly delivered ships, expediting our return to profitability." Update on Bookings Donald noted, "It is reinforcing to see continued strength in demand with our guests overcoming far more restrictive protocols than broader society and travel at large, leading to a near doubling of booking volumes since last quarter with near-term bookings even outpacing 2019. We were encouraged by close-in demand and remain focused on optimizing occupancy while preserving long term pricing." Donald added, "As friction from protocols is removed and society becomes increasingly more comfortable managing the virus, we expect to see demand continue to build, as we have already seen with the strength in Carnival Cruise Line's closer-to-home cruises." Booking volumes for all future sailings during the second quarter of 2022 were nearly double the booking volumes during the first quarter of 2022; the company notes these were its best quarterly booking volumes since the beginning of the pandemic, albeit still below 2019 levels. Booking volumes for the second half of 2022 sailings, since the beginning of April, have been higher than 2019 levels. The company believes this is a reflection of the previously expected extended wave season. (Due to the ongoing resumption of guest cruise operations, the company's current booking trends will be compared to booking trends for 2019 sailings.) While cumulative advance bookings for the second half of 2022 are below the historical range, the company's booked position is consistent with its expected improving occupancy levels for the second half of 2022. Cumulative advance bookings for the second half of 2022 are at lower prices, with or without future cruise credits ("FCCs"), normalized for bundled packages, as compared to 2019 sailings. Cumulative advanced bookings for the full year 2023 continue to be both at the higher end of the historical range and at higher prices, with or without FCCs, normalized for bundled packages, as compared to 2019 sailings. Sustainability Update  Continued focus on decarbonization and transparency of disclosures The company has made significant progress over the past 15 years reducing its carbon emission intensity and achieving its 2020 goal three years early (in 2017). The company has also made significant progress towards its 2030 carbon intensity reduction goals of 40% from a 2008 baseline, measured in both grams of CO2e per ALB-km and kilograms of CO2e per ALBD. The company has decided to update the baseline year for both goals to 2019 from 2008. This new baseline year will help the company better communicate recent progress against its climate goals to its investors and stakeholders as well as modernize its disclosures in alignment with developing best practice and reporting standards. Both 2030 goals now require a 20% improvement from 2019. With the updated baseline year, the company strengthened its goal measured in kilograms of CO2e per ALBD since the initial 2030 goal would only have required a further 15% reduction from 2019 levels. Its goal measured in grams of CO2e per ALB-km remains the same. Achieving these 2030 goals will require: The delivery of larger-more efficient ships, as part of its ongoing newbuild program, some of which will replace existing ships in its fleet Investing in energy efficiency projects for its existing fleet Designing more energy efficient itineraries Investing in port and destination projects The company continues to evaluate and implement changes to its various annual planning processes to further support its focus on decarbonization, such as the recently adopted Corporate Itinerary Decarbonization Reviews. These changes, together with the updates to its 2030 carbon intensity reduction goals, will improve both performance in sustainability and transparency to its investors and stakeholders on its progress. Advancing progress on circular economy through food waste management In May the company announced the installation of nearly 600 shipboard food waste bio-digesters across its fleet, as a continuation of its efforts to manage food waste and contribute to a circular economy. First piloted in 2019, this food waste processing technology naturally breaks down food waste, which supports the company's ongoing waste management and drives progress against its goal to achieve a 30% reduction in unit food waste by 2022 and a 50% reduction in unit food waste by 2030. These goals build on the company's latest achievement of reducing food waste per person by over 20% in December 2021 relative to a 2019 baseline. 2024 Mandatory Auditor Rotation Carnival plc is subject to UK law regarding mandatory auditor rotation. Under UK law, PricewaterhouseCoopers LLP ("PwC") must be changed as Carnival plc's auditor for the 2024 audit at the latest. Yesterday, the Boards of Directors appointed Deloitte & Touche LLP ("Deloitte") as the company's independent registered public accounting firm for 2024 to be effective upon the execution of an engagement letter and related completion of Deloitte's standard client acceptance procedures to ensure their independence. The Boards of Directors will propose the appointment of Deloitte as external auditors for 2024 at the company's annual shareholder meetings as required. Other Recent Highlights Carnival Cruise Line broke ground on its new cruise port destination on Grand Bahama Island, expected to open in late 2024. Carnival Cruise Line saw its busiest booking week in the company's history, for the one-week period of March 28 -April 3. Cunard saw its busiest booking day in a decade for the first day of bookings for new ship Queen Anne. Holland America Line's Volendam is being used to provide temporary housing for Ukrainian refugees through September 2022. Carnival Corporation was recognized on Forbes' annual listing of Best Employers for Diversity for the fourth consecutive year and by Latino Leaders Magazine as one of the Best Companies for Latino to Work in 2022 for the second consecutive year. Carnival Corporation and BetMGM announced their partnership to provide on-ship mobile sports betting and iGaming experiences. Selected Forecast Information Available Lower Berth Days ("ALBDs") The company's ALBD forecast consists of contracted new ships, announced sales and planned restart schedule. Actuals Forecast Full Year 2022 (in millions) 1Q 2022 2Q 2022 3Q 2022 4Q 2022 ALBDs 13.3 16.7 20.9 21.7 72.6 Fuel The company's fuel consumption forecast for the remainder of the year is 1.4 million metric tons. The blended spot price for fuel is currently $978 per metric ton. Depreciation and Amortization The company's depreciation and amortization forecast for the remainder of the year is $1.1 billion. The 2022 full year forecast, which includes year-to-date actuals, is $2.3 billion. Interest Expense, Net of Capitalized Interest The company's interest expense, net of capitalized interest forecast for the remainder of the year is $0.8 billion. The 2022 full year forecast, which includes year-to-date actuals, is $1.6 billion. Outstanding Debt Maturities As of May 31, 2022, the company's outstanding debt maturities are as follows: (in billions) 2022 2023 2024 2025 Principal payments on outstanding debt (a) $                  1.3 $             2.8 $             2.0 $             4.4 (a)  Excludes the revolving credit facility. As of May 31, 2022, borrowings under the revolving credit facility were $2.7 billion, which mature in 2024. Capital Expenditures The company's annual capital expenditure forecast, which includes year-to-date actuals for 2022, is as follows: (in billions) 2022 2023 2024 2025 Contracted newbuild $                4.2 (a) $                2.4 $                1.6 $                0.9 Non-newbuild 1.4 1.9 2.0 2.0 Total (b) $                5.6 $                4.3 $                3.6 $                2.9 (a)  Includes three newbuild deliveries during the first quarter of 2022. (b)  Forecasted capital expenditures will fluctuate with foreign currency movements relative to the U.S. Dollar. Conference Call  The company has scheduled a conference call with analysts at 10:00 a.m. EDT (3:00 p.m. BST) today to discuss its business update. This call can be listened to live, and additional information can be obtained, via Carnival Corporation & plc's website at www.carnivalcorp.com and www.carnivalplc.com.  Carnival Corporation & plc is one of the world's largest leisure travel companies with a portfolio of nine of the world's leading cruise lines. With operations in North America, Australia, Europe and Asia, its portfolio features – Carnival Cruise Line, Princess Cruises, Holland America Line, P&O Cruises (Australia), Seabourn, Costa Cruises, AIDA Cruises, P&O Cruises (UK) and Cunard. Additional information can be found on www.carnivalcorp.com, www.carnivalsustainability.com, www.carnival.com, www.princess.com, www.hollandamerica.com, www.pocruises.com.au, www.seabourn.com, www.costacruise.com, www.aida.de, www.pocruises.com and www.cunard.com. Cautionary Note Concerning Factors That May Affect Future Results Some of the statements, estimates or projections contained in this document are "forward-looking statements" that involve risks, uncertainties and assumptions with respect to us, including some statements concerning future results, operations, outlooks, plans, goals, reputation, cash flows, liquidity and other events which have not yet occurred. These statements are intended to qualify for the safe harbors from liability provided by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts are statements that could be deemed forward-looking. These statements are based on current expectations, estimates, forecasts and projections about our business and the industry in which we operate and the beliefs and assumptions of our management. We have tried, whenever possible, to identify these statements by using words like "will," "may," "could," "should," "would," "believe," "depends," "expect," "goal," "aspiration," "anticipate," "forecast," "project," "future," "intend," "plan," "estimate," "target," "indicate," "outlook," and similar expressions of future intent or the negative of such terms. Forward-looking statements include those statements that relate to our outlook and financial position including, but not limited to, statements regarding: • Pricing • Goodwill, ship and trademark fair values • Booking levels • Liquidity and credit ratings • Occupancy • Adjusted earnings per share • Interest, tax and fuel expenses • Return to guest cruise operations.....»»

Category: earningsSource: benzingaJun 24th, 2022

Carriers Set for Phased 5G Rollout Near Airports With FAA Deal

Verizon (VZ) and AT&T (T) ink a deal with the FAA for a phased rollout of their C-band 5G wireless service near airports to mitigate aviation operating risks. The aviation industry appears to have avoided a potential stalemate with the telecom sector as two leading operators agreed to voluntarily delay the deployment of 5G airwaves near some airports until July 2023. Both Verizon Communications Inc. VZ and AT&T Inc. T have inked a deal with the Federal Aviation Administration (“FAA”) for a phased rollout of their C-band 5G wireless service near airports to mitigate aviation operating risks.The bone of contention relates to the likely interference of 5G waves within the C-Band spectrum with certain flight operations. The FAA has raised concerns that the commercial launch of the C-band wireless service in the 3.7-3.98 GHz frequency band could cause the airwaves to interfere with radar or radio altimeter signals that measure the distance between the aircraft and the ground. Data from these devices are fed to the cockpit safety system that helps pilots gauge the air safety metrics and prevent mid-air collisions, avoid crashes and ensure a safe landing.To avert any potential disruption in essential safety sensors, the FAA had issued certain flight restrictions that prevented pilots from operating the automatic landing option and other cockpit systems during inclement weather conditions. The FAA followed it up with a ‘Safety Alert for Operators’ in December 2021. The alert included recommended actions in the form of ”Notice To Air Missions,” primarily based on previously issued restrictions.Although the directives were primarily intended to make 5G expansion and aviation coexist without compromising passenger safety, it significantly affected air cargo and commercial air travel at most of the biggest airports and highest traffic destinations across the country. This led to intense negotiations between the carriers and the FAA to seek a mutually agreeable solution. Although both AT&T and Verizon had rejected any broader restrictions on the usage of the C-Band spectrum, they pledged not to deploy 5G and depowered wireless towers around airports until July this year. The firms have now voluntarily extended these restrictions till July 2023.  The FAA, in unison with the carriers, has identified certain less vulnerable airports where 5G could be deployed without disrupting flight operations. In other airports susceptible to potential interference, the FAA has asked aircraft operators to retrofit their planes with filters on radio altimeters and replacement units to eradicate the chances of any disruptions in normal flight operations. Although Airlines for America, an industry trade group of flight operators, has raised concerns about the project's feasibility, with a significant number of its member fleet of 4,800 aircraft requiring to be retrofitted, the FAA appears poised to complete the changeover with timely delivery of the retrofit products.Amid all the cacophony, AT&T and Verizon have indicated to gradually do away with all mitigations after the deadline as they aim to capitalize on the immense 5G potential and generate healthy ROI. For the record, Verizon was the largest bidder with $45.5 billion worth of bids in the FCC-led C-Band auction for mid-band airwaves that generated about $81.2 billion in gross proceeds, followed by AT&T at $23.4 billion. The auction offered 280 MHz of spectrum for potential 5G deployments over the next few years. While Verizon secured 3,511 of the 5,684 licenses up for grabs, AT&T claimed 1,621.Verizon has secured an average of 161 MHz of C-band nationwide spectrum through its auction bids. The C-Band offers significant bandwidth with better propagation characteristics for optimum coverage in both rural and urban areas than mmWave, which has a short range and requires a high density of sites to achieve coverage. Consequently, it is deemed a prized asset for carriers like Verizon and AT&T that lack considerable mid-band spectrum holdings.It remains to be seen how the saga unfolds in the near future with the success of the aviation sector and the telecom sector hanging by a thread. Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AT&T Inc. (T): Free Stock Analysis Report Verizon Communications Inc. (VZ): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacksJun 21st, 2022

Qualivian Investment Partners Q1 2022 Commentary: Verisign

Qualivian Investment Partners commentary for the first quarter ended March 31, 2022. In science you have to understand the world. In investing others have to misunderstand the world. – Nassim Taleb Overview Qualivian Investment Partners is an investment partnership focused on long-only public equities. We own a concentrated portfolio of 15–25 understandable companies with wide […] Qualivian Investment Partners commentary for the first quarter ended March 31, 2022. In science you have to understand the world. In investing others have to misunderstand the world. – Nassim Taleb Overview Qualivian Investment Partners is an investment partnership focused on long-only public equities. We own a concentrated portfolio of 15–25 understandable companies with wide moats, long reinvestment runways, and outstanding capital allocation. Since we expect them to compound capital at a mid-teens rate, we hold them for an extended period. We are seeking investors who are aligned with our long-term investment time horizon. We do not short securities. We do not use leverage. We do not use derivatives. We are not macro investors. We believe that only a relatively small number of exceptional companies are worth investing in over the long term. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Series in PDF Get the entire 10-part series on Charlie Munger in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues. (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q1 2022 hedge fund letters, conferences and more Our Formula: Long-Term Orientation + Long-Term Investors + Focused Portfolio + Quality Compounders = Maximizing Chance for Outperformance Our investors should understand how we invest so they make the right decision. We encourage investors who agree with our long-term horizon and philosophy to contact Aamer Khan (aamer.khan@qualivian.com) at 617-970-9583 or Cyril Malak (cyril.malak@qualivian.com) at 917-742-2039. Cumulative Performance Since Inception Through March 31, 2022 We have outperformed the S&P 500 Total Return1 index by 2.5% on a gross basis and underperformed it by 2.2% on a net basis respectively from inception (Dec. 14, 2017) through March 31, 2022. We have outperformed the iShares MSCI USA Quality Factor ETF (QUAL)2 by 24% and 19.3% on a gross and net basis. Similarly, we have outperformed the Invesco S&P 500 Quality ETF (SPHQ)3 by 22.6% and 17.9% on a gross and net basis respectively. Q1 Performance In Q1 our total return was –10.9%, which underperformed the S&P 500’s Total Return of –4.6% by 6.3%. Our performance was affected by the following factors: Rising inflation led to the Federal Reserve increasing interest rates and beginning a tightening cycle which will continue until inflation is reduced. The market responded by rotating out of growth stocks and into the Energy and Metals and Mining sectors, which are viewed as late-cycle sectors and as inflation hedges, as well as seeking safety in the Utilities and Consumer Staples sectors. Quality growth stocks overall underperformed. More specifically: Our over weighting in growth stocks negatively affected performance due to the growth stock selloff. Our lack of exposure to Energy, Materials, Utilities and Consumer Staples stocks hurt us due to their out performance. Our Portfolio and Inflation: Despite the selloff in growth stocks, the intrinsic values of the high-quality growth stocks in our portfolio should be less affected because: A high proportion of them are oligopolies so they have higher than average pricing power, enabling them to pass higher input costs via price increases to their customers. They have higher gross margins than the average stock, so an increase in their cost of goods sold should have a more muted effect on their bottom line. Portfolio Changes in Q1 2022 We made three new purchases in this quarter: Berkshire Hathaway (BRK-B), CSX (CSX), and Union Pacific (UNP). To fund these new positions, we trimmed Amazon (AMZN) and Alphabet (GOOGL), and we completely exited PayPal (PYPL) and Evolution (EVVTY). Berkshire is a compounder whose intrinsic value had fallen behind its share price. It had: Leverage to higher property and casualty insurance rates, which are now in an upcycle. Exposure to railroads via Burlington Northern Sante Fe (see our previous quarterly letter for a discussion of the railroads). $140 billion in cash that can be used to take advantage of the recent market selloff to make purchases of public equities or entire businesses. For a discussion of UNP and CSX please refer to our previous quarterly letter. The fundamentals of Evolution (EVVTY) continued to perform but we sold it due to: News reports concerning irregularities regarding users accessing Evolution-supplied games with casino operators in unlicensed jurisdictions (which Evolution has denied; Evolution announced it is fully cooperating with regulators investigating these allegations). Increased concerns about the rising importance of ESG (Environmental, Social, and Governance) for institutional investors and the impact on casino-related stocks. We sold PayPal due to our concerns regarding an apparent shift in its strategy to improve user engagement and revenue per user with the company walking back its target of reaching 750 million Net New Active (NNA) accounts over the medium term, having posted its slowest NNA additions in Q4 2021 and Q1 2022 and its slowing earnings growth. This was reflected directly in management lowering their financial guidance, and in PayPal making an unsuccessful bid for Pinterest. We presume this acquisition attempt reflected a desire to offset slowing organic growth with acquired growth in a different business, which we viewed as high risk for PayPal. Fundamentals of Our Portfolio vs the S&P 500 As can be seen from the tables below, the Qualivian Focus Fund (QFF) continues to have superior gross, operating, and free cash flow (FCF) margins as compared to the S&P 500. Furthermore, QFF’s forward consensus revenue and EPS growth estimates continue to outpace that of the S&P 500. Our portfolio trades at a premium to the S&P 500 but considering the superior margin, growth and return characteristics, that makes sense. We believe QFF’s superior fundamentals as compared to the overall market will generate S&P 500-beating returns over an investment cycle as the market appreciates the higher growth, margin and return on capital characteristics in the stocks we own. With the valuation reset in a lot of our high-quality and growth stocks behind us, we believe we should see the superior underlying earnings power of our companies come through as compared to the average company, which should stand us in good stead relative to the broader markets. Sticking with Our Strategy and Avoiding Mistakes Periods of market turmoil signal both opportunity and danger. They can lead to consequential decisions, both good and bad. The key is how portfolio managers react to a period of underperformance and market volatility. Any investment strategy will have periods of underperformance. If there was a strategy that consistently outperformed, it would be widely replicated, so that its excess returns would be competed away. The periods of underperformance can interact with behavioral and institutional biases and lead to short-term actions by portfolio teams which are detrimental to long-term returns such as: Selling stocks below their intrinsic value. Changing investment strategies, e.g., moving from a growth to a value strategy. Increasing cash allocations due to market timing. These actions are typically motivated by considerations such as: Trying to lock in gains for year-end performance, Not having genuine conviction in their estimate of intrinsic values, and Believing one can predict short-term market movements. Harmful actions can also be due to portfolio managers having the wrong emotional characteristics: Not being able to withstand the “pain” of short-term underperformance. Peter Lynch feels “stomach” is more important than brains for investment success. Not having confidence in their own estimates of a stock’s intrinsic value. Price and intrinsic value can diverge for a variety of reasons. Our investment strategy is premised on the belief that they tend to converge over a longer period, so it is a mistake to sell the stocks when they temporarily diverge (so long as we are confident in our assumptions regarding a stock’s intrinsic value). The following table illustrates that even the best performing stocks can have fairly long periods of underperformance. Selling them while they were depressed would have been a mistake. It is almost impossible to know when the market will change direction in the short term. Relative earnings revisions drive relative performance over short time frames. However, the duration of growth and incremental change in ROIC drive relative performance over longer time periods, and we focus on these characteristics. Don’t Let Volatility Scare You Out of the Market Volatility can make being in the market dangerous over a short period. However, volatility can make not being in the market over short periods even more dangerous. The following graph4 illustrates how being out of the market for only a few days can severely reduce long-term returns. Munger on Market Volatility In 2009, Charlie Munger was asked how concerned he was that Berkshire Hathaway (NYSE: BRK-B) shares — which made up most of his net worth — dropped more than 50%. He quickly interrupted the interviewer and responded: “Zero. This is the third time that Warren [Buffett] and I have seen our holdings in Berkshire Hathaway go down, top tick to bottom tick, by 50%. I think it's in the nature of long-term shareholding that the normal vicissitudes in markets means that the long-term holder has the quoted value of his stocks go down by, say, 50%. In fact, you can argue that if you're not willing to react with equanimity to a market price decline of 50% two or three times a century you're not fit to be a common shareholder, and you deserve the mediocre result you're going to get compared to the people who can be more philosophical about these market fluctuations.” Verisign: A Monopoly Franchise in the Internet Domain Space We now discuss a business which is on our watchlist and illustrates our thinking. Description: Verisign (NASDAQ:VRSN) is the internet registry service for several top-level domains including .com and .net. Verisign plays a vital role in supporting the Domain Name System (DNS) which is akin to a massive address book that matches human friendly domain names to the accompanying numbers-based Internet Protocol (IP) address. As of year-end 2021 VRSN had 173.4 million .com and .net domains, which represents about 51% of global domain registrations. Our Investment Thesis: Verisign is effectively a monopoly, and barring an operational accident, likely to remain one for the foreseeable future. It has provided uninterrupted DNS services for the last 24 years and it continues to invest in infrastructure and cybersecurity measures to manage the risk of service disruptions. We forecast that it can sustainably grow its EPS in the low teens for the foreseeable future. We highlight the key elements of our investment thesis below: Verisign’s Durable Competitive Advantage: VRSN has an exclusive contract with the Internet Corporation for Assigned Names and Numbers (ICANN) for two of the world’s most popular Top-Level Domains (TLDs), .com and .net: Hard to Replace: Verisign is deeply embedded in the internet food chain and is unlikely to be replaced by another provider by ICANN due to (1) Verisign’s strong record of service and strong brand and (2) a change in registry operators would increase the threat of operational and security disruptions. Exclusive Franchise: The contracts with ICANN run for six years and have the presumptive right of renewal (i.e., cannot be put up for bid) provided Verisign meets contractual obligations of paying fees to ICANN, providing uninterrupted service, and operating key infrastructures. Pricing Power: Embedded in the most recent agreement with ICANN in 2018, Verisign has the right to increase its pricing on average 4.6% annually in perpetuity: As a result of its 2018 negotiations with ICANN and the Department of Commerce, VRSN was able to demonstrate that the market was competitive (given the growth in other domain names including country level domains). As a result, VRSN won an evergreen pricing provision5 which freezes pricing in the first two years of a new six-year contract cycle but provides for up to 7% price increases for its .com domains in the last four years of the contract6. Predictable and Visible Recession Resistant Demand: The demand for overall Top-Level Domains is predictable, historically growing in the 2%–4% range annually over the past decade, and likely to continue at similar rates for the next three to five years giving us substantial visibility into Verisign’s earnings. The .com registry grew from 112 million to 161 million over 2013–2021 (a compound annual growth rate of 4.6%). Domain numbers should hold up well in a recession since a website is among the last items a business or individual will drop if they need to reduce costs. Attractive Margins and Inflation-Resistant Returns: VRSN enjoys very high gross and operating margins in the mid-80 and mid-60 percent range, respectively: Free Cash Flow margins are in the mid-50 percent range. This in combination with its pricing power should allow VRSN to navigate the inflationary back drop (primarily wage inflation for VRSN) better than most. VRSN’s Return on Invested Capital is well north of 100% consistently, exemplifying the company’s ability to generate economic value from its capital expenditures for its shareholders. VRSN’s capital expenditures are low – around 5%–7% of operating cash flow. Excellent Capital Allocation: Verisign’s management has demonstrated excellent capital allocation. It continually returns excess capital via buybacks, retiring 3–3.5% of its diluted share count each year in the past four years, and well north of that in prior years. The company has reduced its diluted share count by approximately 40% in the past ten years via its share repurchase program which is enabled by its predictable and highly cash generative business model. Low- to Mid-Teens EPS Growth: We think the company can sustainably deliver low to mid-teens growth over the next three years, with: revenue growth of 6.5–8.5% consisting of: 2.0%–4% top level domain growth, and 4.6% pricing growth 30–40 bp annual EBIT margin improvement from operational leverage, and 3% reduction in share count from the company’s buyback program. Valuation: The key issue for us is buying it at a reasonable valuation. The stock currently trades at 29.2X NTM earnings, which places it at roughly a little over two times its long-term earnings growth. As such, it remains on our watchlist and should market volatility further rerate this highly attractive and predictable business model, we will be at the ready to take advantage of that. Ending Thoughts We look forward to continuing to share our thoughts on our investment approach, and to keep you abreast of our performance and changes to the portfolio. If you would like additional information about Qualivian, please refer to Appendix 2 for links to prior Investor Letters, our investor presentation, and an interview that Aamer did with Insider Monkey. In the meantime, if you have any questions, please feel free to reach out to us at the links below. With best wishes, Aamer Khan Co-founder Cyril Malak Co-founder www.qualivian.com Updated on Jun 13, 2022, 1:30 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkJun 13th, 2022

Ethereum Tumbles Below Holders" Average Cost Basis

Ethereum Tumbles Below Holders' Average Cost Basis While bitcoin remains stuck to a $30,000, trading in a $2k range around the "nice, round number" for the past month... ...  In its latest weekly Crypto Compass note, UBS writes that what is most stunning is how bitcoin's biggest challenger, ETH has totally retraced its entire outperformance since late 2020 to the point where it has merely level-pegged with benchmark equities since both then and the start of 2019 for an equivalent unit of risk invested. Worse, after relentlessly dropping for 10 consecutive weeks.. ... the token which forms the backbone for web3, and which Goldman called the "Amazon of information" has just taken out a key long-term long-term support, tumbling 12% on Sunday to 1,500.22, the lowest price since Jan 2020. There are several reasons for Its latest relative softening according to UBS, chief among which is a sharper drop-off in activity that is a casualty of weaker transactional demand for Ethereum-based defi and NFTs. which in turn is a function of Fed tightening which is causing asset prices to tumble uniformly (in stocks, bonds and yes, crypto too) as "crash-correlations" approach 1. Some also point to concerns about a Terra-like implosion due to misplaced fears that a security attack on staked Ethereum could lead to a "fat tail" outcome ahead of the ETH 2 transition later this year due to 4 million ether deposited at Lido Finance, making the exchange a concentrated holder and threatening a centralized attack on the broader ETH network (Lido developer Vasiliy Shapovalov disagrees). Additionally, some slowing in the network as the so-called 'difficulty bomb' begins to bite ahead of the late-summer Merge may also be exerting some drag. Amid this wholesale selloff, bear-market blues, liquidations and outright capitulation have set in among even the most ardent crypto proponents (e.g., here). So much so that some have started to highlight how native technical indicators skew the balance of risks henceforth heavily to the downside. Yet in comparison to prior 'crypto winters,' bitcoin's price has yet to fall below holders' average cost base (23,500), although after today's drop, ether is now below the average cost basis which according to UBS is at 1,750. Furthermore, net unrealized profit/ loss metrics highlight specifically how long-term holders have yet to be tested. One way UBS suggests this could happen is via miners capitulating to sell down holdings of existing coins: indeed, their sales in early May coincided with the last lurch lower to and through 30k. Indeed, miners' businesses remain under significant pressure due to high energy costs and capex commitments, so their stock prices continue to make fresh lows even as the broader market has consolidated or even rebounded somewhat. Meanwhile, as UBS adds, there has been little positive news to offset investor concerns, and the Swiss bank proceeds to list some of these, starting with stablecoin issuers who have been put on notice by UST's collapse, while officials should feel spurred on to clamp down by Do Kown's plans for Terra2, Justin Sun's launch of the effective copycat USDD, and Tether's expansion onto Tezos. Japan's Diet has passed legislation allowing only banks and other licensed financial institutions to issue yen stablecoins as of next year. New York's Department of Finance likewise formalized guidance mandating full backing via short-dated T-bills or equivalent, segregated accounts and monthly audits by independent US CPAs. And a new UK consultation paper just floated procedures for dealing with failed issuers and makes provisions for systemically important designation Amongst the familiar fare of hacks, and outages, two additional items stood out in UBS' review of key events. One was the SEC moving to investigate Binance over its 2017 BNB exchange coin listing. The latter's price fell almost 10% in consequence. But the action matters beyond the fact that it involves the largest exchange by volumes and the industry's third largest non-stablecoin. It signals a fresh effort to enforce securities registration that will be applicable to the vast majority of crypto ventures. This comes atop other probes into the company that were already underway. These involve possible trading abuses by corporate insiders, insufficient segregation of the firm's local US subsidiary and concerns that it has been conducting unregulated broker-dealer activities. There is also the issue of whether founder CZ's ownership stakes in market-makers that are active on the platform constitute conflicts of interest. That said, UBS is quick to caution that none of this is to argue that crypto is sliding into oblivion, quite the contrary - after all Wall Street and Silicon Valley have invested tens of billions in crypto infrastructure and manpower (most did so around the time cryptos peaked),. Yet what it does point to is how the future will look very different. According to UBS' James Malcom, players will have to embrace regulation and collaborate with existing financial service providers; thus Singapore's just-launched Project Guardian, which represents a pilot project for the central bank to explore tokenized bonds and deposits via the establishment of permissioned liquidity pools in collaboration with DBS, JPMorgan and Marketnode. They must also have to compromise even as they seek to disrupt longstanding tradfi practices, per FTX's bold bid to disintermediate derivatives trading by clearing customers' swaps without the involvement of FCMs. The good news is that, as UBS concludes, those who can last beyond the near-term downward pressure and volatility, the longer-term demand-side outlook looks exceedingly healthy when recast in such terms. Accenture's newly released Future of Asian Wealth Management survey revealed that more than half of its 3,200 respondents already hold digital assets, and nearly three quarters plan to do so by year-end. However, two thirds of the 500 financial advisors surveyed have no plans to offer such services due to regulatory uncertainty and unfamiliarity with the space, which would require specialized research capabilities plus substantial investment in training for relationship managers.  Little wonder satisfaction ratings with primary counterparts score rather lowly.  It is also not surprising that many allocators end up relying on potentially less reliable online advice in consequence. UBS' Global Family Office Report 2022 finds, by contrast, most of the bank's clients are 'cryptocurious' rather than 'crypto-committed'— wanting to learn about the space rather than invest. It pegged just a quarter of Asian participants as active in the space, though that rises to more than a third in North America. The vast majority of allocations amount to less than 3% of portfolios and are being made to better understand the technology as much as on the expectation of strong, diversified returns at this point. As for Ethereum's latest tumble, it could certainly fall more amid capitualtory liquidations, now that selling below the average cost basis means cementing losses for retail investors. But when it comes to institutions one can be certain that instead of writing off their investments in the web3 space, most will simply double down, and why not: it is already widely accepted that after the Fed hikes enough to push the economy into recession (or depression) in the next few months, it will then proceed to aggressively cut rates again... ... with the benefit of QE again, and the moment Powell capitulates - which will be some time in late 2022 or early 2023  - is when all the "growth", high-beta assets that have gotten destroyed in the past few months, will erupt to new all time highs in anticipation of the biggest liquidity injection yet, one which is simply mandatory if for no other reason than central banks have to fund and finance the $150 trillion (with a T) spending over the next 30 years (via QE) that is unavoidable if the progressive "climate change" agenda is to pass. And it will - too many politicians and parties have staked their entire existence on it. Finally, none of this accounts for the growing risk that China, and its $54 trillion in bank assets or 150% more than the US... ... will suffer another devaluation, sparking another massive capital exodus using bitcoin and other crypto instruments. Tyler Durden Sat, 06/11/2022 - 13:06.....»»

Category: blogSource: zerohedgeJun 11th, 2022

Georgia Tech pairs students with local governments and businesses to solve issues related to public safety and climate change. Here"s how it works and how it"s made the state more resilient and sustainable.

The Smart Community Corps summer program pairs students from Georgia Tech and other colleges to work on smart city projects like pedestrian planning. Kazi Awal/InsiderInterns using the Landgrid App to observe a Georgia neighborhood as part of the 2021 SCC Savannah Housing Blight Project.Courtesy of Georgia Tech The Smart Cities and Inclusive Innovation initiative at Georgia Tech strives for future-readiness. It helps solve problems like bringing internet to residents and provides opportunities for students. One program, Smart Community Corps, pairs students with smart city projects like traffic monitoring. This article is part of a series focused on American cities building a better tomorrow called "Advancing Cities." Atlanta and other cities and towns across Georgia face multiple challenges as they strive to become more future-ready, from ensuring residents have internet connectivity to minimizing coastal flooding to addressing public transportation issues.Debra Lam.Courtesy of Georgia TechThe Smart Cities and Inclusive Innovation (SCI2) initiative at the Georgia Institute of Technology in Atlanta is stepping in to help. SCI2 leverages research and development, strategic partnerships, technology, and grant funding to help communities across the state solve these problems. In turn, it also provides opportunities for students to learn in real-world environments, said Debra Lam, SCI2's managing director and the founding executive director for the Partnership for Inclusive Innovation (PIN), a statewide public-private partnership between Georgia Tech, the state of Georgia, civic leaders, and the business community.SCI2's work with Georgia communities starts with a "matchmaking conversation," where researchers learn about a municipality's needs, goals, and existing resources, Lam said. It's about "understanding the local context and trying to understand and isolate the problem. You're not coming in with a fancy solution at first and then trying to box it into something," she added. Some of the problems they help solve include transportation, public safety, and the effects of climate change.Lam's team then identifies what tools are available, such as data, hardware, or software, and how SCI2 can help from a multidisciplinary applied research standpoint."We have the flexibility to work with many researchers, regardless of their expertise or background," she said. "The way we think about smart cities, if you give an engineer a problem, he will think about it one way versus a computer scientist. But if you start pairing up the engineer with the public policy person or the city and regional planning person with the computer scientist, it really starts to create a synergistic kind of dialogue."Here's a closer look at how SCI2 is making Georgia communities more resilient and sustainable.Making roadways safer for drivers and pedestriansOne of SCI2's major projects is the North Avenue Smart Corridor in Atlanta, a two-mile "living lab" for studying multimodal traffic management that launched in 2017. It uses technology like street sensors and cameras to measure and track traffic, pedestrians, cyclists, and others on the road."It's trying to understand how we can safely and efficiently move traffic around North Avenue, which is a busy intersection," Lam said.The smart corridor project helped improve traffic flow and reduced vehicle crashes by 25% since its inception, Georgia Tech reported. In 2018, it also won the Mobility Award at the Smart City Expo World Congress, an international summit recognizing smart city projects around the globe.Collecting data on sea-level rises and broadband connectivity One of PIN's central programs is Smart Community Corps, a summer program supported by Microsoft and Gulfstream that pairs students from Georgia Tech and other colleges and universities in Georgia to work on real smart city projects."It's a cross between experiential learning and public service, where you can learn about smart cities by living and working in the community," Lam said.In 2021, students logged 5,280 hours on projects like traffic monitoring in Valdosta and smart pedestrian planning in Clayton County, according to Georgia Tech. For the 2022 cohort, more than 140 students applied for 33 spots.Clayton County smart pedestrian planning.Courtesy of Georgia TechPIN also runs the Georgia Smart Communities Challenge (GA Smart), which is in its fifth year and was previously led by SCI2. The program offers grants and research assistance from students and faculty to communities for two years to become more resilient in the future.Lam said 16 communities have gone through GA Smart, with projects including piloting sensors to measure sea-level flood risk along Georgia's coast, improving broadband connectivity, and studying autonomous shuttles connecting rapid transit stations around Atlanta's metro."We wanted to have a cohort of cities to show that there are a lot of different ways to do smart cities," Lam said, adding that all of PIN and SCI2's work is about empowering cities and "letting them tell us, 'Here's the problem or issue that we want to focus on.'"Read the original article on Business Insider.....»»

Category: topSource: businessinsiderMay 23rd, 2022

FLOWERS FOODS, INC. REPORTS FIRST QUARTER 2022 RESULTS

THOMASVILLE, Ga., May 19, 2022 /PRNewswire/ -- Flowers Foods, Inc. (NYSE:FLO), producer of Nature's Own, Dave's Killer Bread, Wonder, Canyon Bakehouse, Tastykake, and other bakery foods, today reported financial results for the company's 16-week first quarter ended April 23, 2022. First Quarter Summary: Compared to the prior year first quarter where applicable Sales increased 10.3% to a quarter-record $1.436 billion. Net income increased 19.4% to $85.6 million. Adjusted net income increased 6.3% to $93.1 million. Adjusted EBITDA(1) increased 2.4% to a quarter-record $165.5 million, representing 11.5% of sales, a 90-basis point decrease. Diluted EPS increased $0.06 to $0.40. Adjusted diluted EPS(1) increased $0.03 to a quarter-record $0.44.  (1) Adjusted for items affecting comparability. See reconciliations of non-GAAP measures in the financial statements following this release.   CEO's Remarks: "We delivered another quarter of record results, reflecting outstanding top line growth and disciplined execution on costs," said Ryals McMullian, president and CEO of Flowers Foods. "Focused implementation of our portfolio strategy drove market share gains for our leading brands, as consumers continued to gravitate to these differentiated products despite widespread inflation. To sustain this robust momentum, we intend to invest in marketing and advertising, introduce new and innovative products, and expand production capacity. "We are adjusting our outlook for fiscal 2022 to account for improved pricing, higher-than-expected inflation, and supply chain disruptions," he continued. "To mitigate resource shortages and volatile commodity prices, which increased beyond our initial expectations, we continue to execute on efficiency initiatives and we have implemented a price increase that will become effective in the second quarter. The resulting price lag, combined with the supply chain disruptions, is expected to impact EPS by a total of five cents in the second and third quarters. We are encouraged by the strong underlying fundamentals of our business, and our industry-leading team remains dedicated to enhancing long-term shareholder value." For the 52-week Fiscal 2022, the Company Expects: Sales in the range of approximately $4.764 billion to $4.850 billion, representing an increase of approximately 10.0% to 12.0% compared to the prior year period. Prior guidance called for sales of $4.660 billion to $4.695 billion, representing an increase of approximately 7.6% to 8.4% compared to the prior year period. Adjusted EPS(1) in the range of approximately $1.20 to $1.30, compared to prior guidance of $1.25 to $1.35. The company's outlook is based on the following assumptions: Depreciation and amortization in the range of $135 million to $145 million Net interest expense of approximately $7 million An effective tax rate in the range of 24.0% to 24.5% Weighted average diluted share count for the year of approximately 213.5 million shares Capital expenditures in the range of $150 million to $160 million, with $60 million to $70 million related to our ERP upgrade   Matters Affecting Comparability: Reconciliation of Earnings per Share to Adjusted Earnings per Share For the 16-Week Period Ended For the 16-Week Period Ended April 23, 2022 April 24, 2021 Net income per diluted common share $ 0.40 $ 0.34 Loss on inferior ingredients — NM Business process improvement consulting costs 0.03 0.02 Impairment of assets NM — Loss on extinguishment of debt — 0.06 Adjusted net income per diluted common share $ 0.44 $ 0.41 NM - not meaningful. Certain amounts may not add due to rounding.   Consolidated First Quarter Operating Highlights Compared to the prior year first quarter where applicable Sales increased 10.3% to $1.436 billion, surpassing the previous record first quarter results in 2020 that were influenced by the pandemic. Percentage point change in sales attributed to: Pricing/mix: 13.5% Volume: -3.2% Branded retail sales increased $94.4 million or 11.0% to $956.1 million, store branded retail sales increased $11.1 million or 6.9% to $173.6 million, while non-retail and other sales increased $28.2 million or 10.2% to $306.2 million. Branded retail sales increased primarily due to higher prices intended to offset inflationary pressures, and improved promotional efficiency, partially offset by volume declines in branded cake items partly due to supply constraints. Store branded retail sales increased primarily due to higher prices intended to offset inflationary pressures, partially offset by volume declines as consumer purchasing continued to shift to branded retail products. Non-retail and other sales increased primarily due to higher prices intended to offset inflationary pressures, partially offset by volume declines in fast food and co-manufactured items, supply chain disruptions, and targeted sales rationalization to improve profitability. Materials, supplies, labor, and other production costs (exclusive of depreciation and amortization) were 50.5% of sales, a 110-basis point increase. These costs increased as a percentage of sales due to higher ingredient and packaging costs, partly offset by higher sales and reduced outside purchases. Selling, distribution and administrative (SD&A) expenses were 38.6% of sales, a 10-basis point increase, impacted by incremental consulting costs and transportation cost inflation, largely offset by favorable price/mix, lower workforce-related costs, and increased scrap dough income. Excluding matters affecting comparability, adjusted SD&A expenses were 38.0% of sales, a 20-basis point decrease from the prior year period. Depreciation and amortization (D&A) expenses were $43.4 million, or 3.0% of sales, a 20-basis point decrease. Net income increased 19.4% to $85.6 million. Adjusted net income increased 6.3% to $93.1 million, helped by a discrete tax benefit and lower interest expense. Adjusted EBITDA increased 2.4% to a quarter-record $165.5 million, representing 11.5% of sales, a 90-basis point decrease. Cash Flow, Capital Allocation, and Capital Return For the first quarter of fiscal 2022, cash flow from operating activities increased by $26.2 million to $124.2 million, capital expenditures increased $23.2 million to $50.5 million, and dividends paid to shareholders increased $4.2 million to $46.7 million. Cash and cash equivalents were $205.1 million at the end of the first quarter of fiscal 2022. There are 5.4 million shares that remain authorized for repurchase under the company's current share repurchase plan. The company expects to continue to execute share repurchases from time to time under this plan. Pre-Recorded Management Remarks and Question and Answer Webcast In conjunction with this release, pre-recorded management remarks and a supporting slide presentation will be posted to the Flowers Foods website. The company will host a live question and answer webcast at 8:30 a.m. (Eastern) on May 20, 2022. The pre-recorded remarks and the webcast can be accessed at flowersfoods.com/investors, where it will be archived. About Flowers Foods Headquartered in Thomasville, Ga., Flowers Foods, Inc. (NYSE:FLO) is one of the largest producers of packaged bakery foods in the United States with 2021 sales of $4.3 billion. Flowers operates bakeries across the country that produce a wide range of bakery products. Among the company's top brands are Nature's Own, Dave's Killer Bread, Wonder, Canyon Bakehouse, and Tastykake. Learn more at www.flowersfoods.com. FLO-CORP   FLO-IR Forward-Looking Statements Statements contained in this filing and certain other written or oral statements made from time to time by Flowers Foods, Inc. (the "company", "Flowers Foods", "Flowers", "us", "we", or "our") and its representatives that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to current expectations regarding our future financial condition and results of operations and the ultimate impact of the novel strain of coronavirus ("COVID-19") on our business, results of operations and financial condition and are often identified by the use of words and phrases such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "should," "will," "would," "is likely to," "is expected to" or "will continue," or the negative of these terms or other comparable terminology. These forward-looking statements are based upon assumptions we believe are reasonable. Forward-looking statements are based on current information and are subject to risks and uncertainties that could cause our actual results to differ materially from those projected. Certain factors that may cause actual results, performance, liquidity, and achievements to differ materially from those projected are discussed in our Annual Report on Form 10-K (the "Form 10-K") and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission ("SEC') and may include, but are not limited to, (a) unexpected changes in any of the following: (1) general economic and business conditions; (2) the competitive setting in which we operate, including advertising or promotional strategies by us or our competitors, as well as changes in consumer demand; (3) interest rates and other terms available to us on our borrowings; (4) supply chain conditions and any related impact on energy and raw materials costs and availability and hedging counter-party risks; (5) relationships with or increased costs related to our employees and third-party service providers; (6) laws and regulations (including environmental and health-related issues); and (7) accounting standards or tax rates in the markets in which we operate, (b) the ultimate impact of the COVID-19 pandemic and future responses and/or measures taken in response thereto, including, but not limited to, new and emerging variants of the virus and the efficacy and distribution of vaccines, which are highly uncertain and are difficult to predict, (c) our ability to manage the demand, supply and operational challenges with the actual or perceived effects of the COVID-19 pandemic; (d) the loss or financial instability of any significant customer(s), including as a result of product recalls or safety concerns related to our products, (e) changes in consumer behavior, trends and preferences, including health and whole grain trends, and the movement toward more inexpensive store branded products, (f) the level of success we achieve in developing and introducing new products and entering new markets, (g) our ability to implement new technology and customer requirements as required, (h) our ability to operate existing, and any new, manufacturing lines according to schedule, (i) our ability to implement and achieve our environmental, social, and governance ("ESG") goals in accordance with suppliers, regulations, and customers; (j) our ability to execute our business strategies which may involve, among other things, (1) the ability to realize the intended benefits of planned or contemplated acquisitions, dispositions or joint ventures, (2) the deployment of new systems (e.g., our enterprise resource planning ("ERP") system), distribution channels and technology, and (3) an enhanced organizational structure, (k) consolidation within the baking industry and related industries, (l) changes in pricing, customer and consumer reaction to pricing actions (including decreased volumes), and the pricing environment among competitors within the industry, (m) our ability to adjust pricing to offset, or partially offset, inflationary pressure on the cost of our products; (n) disruptions in our direct-store-delivery distribution model, including litigation or an adverse ruling by a court or regulatory or governmental body, or other regulatory developments, that could affect the independent contractor classifications of the independent distributor partners, (n) increasing legal complexity and legal proceedings that we are or may become subject to, (p) labor shortages and turnover or increases in employee and employee-related costs, (q) the credit, business, and legal risks associated with independent distributor partners and customers, which operate in the highly competitive retail food and foodservice industries, (r) any business disruptions due to political instability, pandemics, armed hostilities (including the ongoing conflict between Russia and Ukraine), incidents of terrorism, natural disasters, labor strikes or work stoppages, technological breakdowns, product contamination, product recalls or safety concerns related to our products, or the responses to or repercussions from any of these or similar events or conditions and our ability to insure against such events, (s) the failure of our information technology ("IT") systems to perform adequately, including any interruptions, intrusions, cyber-attacks or security breaches of such systems or risks associated with the planned implementation of the upgrade of our ERP system; and (t) the potential impact of climate change on the company, including physical and transition risks, higher regulatory and compliance costs, reputational risks, and availability of capital on attractive terms. The foregoing list of important factors does not include all such factors, nor necessarily present them in order of importance. In addition, you should consult other disclosures made by the company (such as in our other filings with the SEC or in company press releases) for other factors that may cause actual results to differ materially from those projected by the company. Refer to Part I, Item 1A., Risk Factors, of the Form 10-K, Part II, Item 1A., Risk Factors of the Form 10-Q for the quarter ended April 23, 2022 and subsequent filing with the SEC for additional information regarding factors that could affect the company's results of operations, financial condition and liquidity. We caution you not to place undue reliance on forward-looking statements, as they speak only as of the date made and are inherently uncertain. The company undertakes no obligation to publicly revise or update such statements, except as required by law. You are advised, however, to consult any further public disclosures by the company (such as in our filings with the SEC or in company press releases) on related subjects. Information Regarding Non-GAAP Financial Measures The company prepares its consolidated financial statements in accordance with U.S. Generally Accepted Accounting Principles (GAAP). However, from time to time, the company may present in its public statements, press releases and SEC filings, non-GAAP financial measures such as, EBITDA, adjusted EBITDA, EBITDA margin, adjusted EBITDA margin, adjusted net income, adjusted EPS, adjusted income tax expense, adjusted selling, distribution and administrative expenses (SD&A), gross margin excluding depreciation and amortization, free cash flow, and the ratio of net debt to adjusted EBITDA. The reconciliations attached provide reconciliations of the non-GAAP measures used in this presentation or release to the most comparable GAAP financial measure. The company's definitions of these non-GAAP measures may differ from similarly titled measures used by others. These non-GAAP measures should be considered supplemental to, and not a substitute for, financial information prepared in accordance with GAAP. The company defines EBITDA as earnings before interest, taxes, depreciation and amortization. Earnings are net income. The company believes that EBITDA is a useful tool for managing the operations of its business and is an indicator of the company's ability to incur and service indebtedness and generate free cash flow. EBITDA is used as the primary performance measure in the company's 2014 Omnibus Equity and Incentive Compensation Plan. Furthermore, pursuant to the terms of our credit facility, EBITDA is used to determine the company's compliance with certain financial covenants. The company also believes that EBITDA measures are commonly reported and widely used by investors and other interested parties as measures of a company's operating performance and debt servicing ability because EBITDA measures assist in comparing performance on a consistent basis without regard to depreciation or amortization, which can vary significantly depending upon accounting methods and non-operating factors (such as historical cost). EBITDA is also a widely-accepted financial indicator of a company's ability to incur and service indebtedness. EBITDA should not be considered an alternative to (a) income from operations or net income (loss) as a measure of operating performance; (b) cash flows provided by operating, investing and financing activities (as determined in accordance with GAAP) as a measure of the company's ability to meet its cash needs; or (c) any other indicator of performance or liquidity that has been determined in accordance with GAAP. The company defines adjusted EBITDA, EBITDA margin, adjusted EBITDA margin, adjusted net income, adjusted diluted EPS, adjusted income tax expense and adjusted SD&A, respectively, excluding the impact of asset impairment charges, Project Centennial consulting costs, business process improvement costs, lease terminations, legal settlements, acquisition-related costs, and pension plan settlements. The company believes that these measures, when considered together with its GAAP financial results, provides management and investors with a more complete understanding of its business operating results, including underlying trends, by excluding the effects of certain charges. The company defines free cash flow as operating cash flow minus capital expenditures. The company believes that free cash flow provides investors a better understanding of the company's liquidity position. The company defines net debt as total debt less cash and cash equivalents. Net debt to EBITDA is used as a measure of financial leverage employed by the company. Gross margin excluding depreciation and amortization is used as a performance measure to provide additional transparent information regarding our results of operations on a consolidated and segment basis. Changes in depreciation and amortization are separately discussed and include depreciation and amortization for materials, supplies, labor and other production costs and operating activities. Presentation of gross margin includes depreciation and amortization in the materials, supplies, labor and other production costs according to GAAP. Our method of presenting gross margin excludes the depreciation and amortization components, as discussed above. The reconciliations attached provide reconciliations of the non-GAAP measures used in this presentation or release to the most comparable GAAP financial measure.   Flowers Foods, Inc.  Condensed Consolidated Balance Sheets (000's omitted) April 23, 2022 January 1, 2022 Assets      Cash and cash equivalents $ 205,147 $ 185,871      Other current assets 586,276 531,154      Property, plant and equipment, net 816,466 798,728      Right-of-use leases, net 294,111.....»»

Category: earningsSource: benzingaMay 19th, 2022

Bath & Body Works Exceeds First Quarter Sales and Earnings per Share Guidance

COLUMBUS, Ohio, May 18, 2022 (GLOBE NEWSWIRE) -- Bath & Body Works, Inc. (NYSE:BBWI) today reported first quarter 2022 results. Sarah Nash, Executive Chair and Interim Chief Executive Officer of Bath & Body Works, commented, "Our business is very strong, our execution is excellent, and our strategy of delivering affordable luxuries to our customers is more relevant than ever. We have built on the past two years of extraordinary growth with strong momentum as we entered fiscal 2022. We are pleased to have delivered better-than-expected sales and earnings results in the quarter." Nash continued, "With our vertically integrated and approximately 85% domestic supply chain, we are taking advantage of the agility in our inventory decision making to leverage early customer reads and chase our best performers in season. We combine the best of newness and daily use. Our business is very fast, and we are able to quickly adjust to changing customer preferences. We saw positive store traffic and transaction trends as customers engaged more with us in person, took advantage of our buy online-pick up in store offering and responded positively to our products."  "Looking ahead in 2022, we are continuing to plan prudently and use our agility to chase winners. We are accelerating investments in the business to drive our long-term growth, while at the same time, our team continues to successfully navigate the inflationary environment. Long-term, we continue to see exceptional opportunities to capitalize on Bath & Body Works' existing strengths and extend the brand's global potential," concluded Nash. First Quarter 2022 ResultsThe company reported net sales of $1.450 billion for the first quarter ended April 30, 2022, a decrease of 1 percent compared to net sales of $1.469 billion for the first quarter ended May 1, 2021. The company's net sales in the first quarter of fiscal 2022 is on top of 53% net sales growth between fiscal 2019 and fiscal 2021. Excluding the estimated first quarter 2021 benefit of $50 million related to government stimulus payments, net sales increased 2%. The company reported earnings from continuing operations per diluted share of $0.64 for the first quarter ended April 30, 2022, compared to $0.32 for the quarter ended May 1, 2021. First quarter operating income was $280.0 million compared to $337.2 million last year, and net income from continuing operations was $154.9 million compared to $90.3 million last year. The company's first quarter operating income was 19.3% of net sales. Reported 2021 results from continuing operations include a pre-tax loss of $105.5 million ($80.1 million net of tax, or $0.28 per diluted share) associated with the early extinguishment of debt. On an adjusted basis, which excludes the above charge in 2021, first quarter 2022 earnings from continuing operations per diluted share increased 7% to $0.64 compared to $0.60 last year, and net income from continuing operations was $154.9 million compared to $170.4 million last year.   At the conclusion of this press release is a reconciliation of reported-to-adjusted results, including a description of the significant item. 2022 OutlookThe company is committed to managing and forecasting the business prudently. The updated fiscal 2022 outlook reflects the company's decision to accelerate investments in information technology and its customer loyalty program, as well as projected increases in inflationary pressures. The company is forecasting second quarter earnings from continuing operations per diluted share between $0.60 and $0.65, compared to $0.77 earnings from continuing operations per diluted share in the prior year. For fiscal 2022, the company is forecasting earnings from continuing operations per diluted share between $3.80 and $4.15, compared to $4.51 adjusted earnings from continuing operations per diluted share in 2021 and its previous guidance of between $4.30 and $4.70. Earnings Call and Additional Information Additional first quarter financial information, including management commentary, is currently available at www.BBWInc.com. Bath & Body Works, Inc. will conduct its first quarter earnings call at 9:00 a.m. Eastern on May 19. To listen, call 1.888.946.7609 (international dial-in number: 1.517.308.9411); conference ID 6362067. For an audio replay, call 1.866.405.9076 (international replay number: 1.203.369.0610); conference ID 6362067 or log onto www.BBWInc.com.  ABOUT BATH & BODY WORKS: Home of America's Favorite Fragrances®, Bath & Body Works is a global leader in personal care and home fragrance, including the #1 selling collections for fine fragrance mist, body lotion and body cream, 3-wick candles, home fragrance diffusers and liquid hand soap. Powered by agility and innovation, the company's predominantly U.S.-based supply chain enables the company to deliver quality, on-trend luxuries at affordable prices. Bath & Body Works serves and delights customers however and wherever they want to shop, from welcoming, in-store experiences at more than 1,750 company-operated Bath & Body Works locations in the U.S. and Canada and more than 350 international franchised locations to an online storefront at bathandbodyworks.com. Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 We caution that any forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) contained in this press release or made by our Company or our management involve risks and uncertainties and are subject to change based on various factors, many of which are beyond our control. Accordingly, our future performance and financial results may differ materially from those expressed or implied in any such forward-looking statements. Words such as "estimate," "project," "plan," "believe," "expect," "anticipate," "intend," "planned," "potential" and any similar expressions may identify forward-looking statements. Risks associated with the following factors, among others, in some cases have affected and in the future could affect our financial performance and actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements included in this press release or otherwise made by our Company or our management: general economic conditions, inflation, consumer confidence, consumer spending patterns and market disruptions including pandemics or significant health hazards, severe weather conditions, natural disasters, terrorist activities, financial crises, political crises or other major events, or the prospect of these events; the COVID-19 pandemic has had and may continue to have an adverse effect on our business and results of operations; the seasonality of our business; the anticipated benefits from the Victoria's Secret & Co. spin-off may not be realized; the spin-off of Victoria's Secret & Co. may not be tax-free for U.S. federal income tax purposes; our dependence on Victoria's Secret & Co. for information technology services; difficulties arising from turnover in Company leadership or other key positions; our ability to attract, develop and retain qualified associates and manage labor-related costs; the dependence on store traffic and the availability of suitable store locations on appropriate terms; our continued growth in part through new store openings and existing store remodels and expansions; our ability to successfully operate and expand internationally and related risks; our independent franchise, license and wholesale partners; our direct channel business; our ability to protect our reputation and our brand image; our ability to successfully complete environmental, social and governance initiatives, and associated costs thereof; our ability to attract customers with marketing, advertising and promotional programs; our ability to maintain, enforce and protect our trade names, trademarks and patents; the highly competitive nature of the retail industry and the segments in which we operate; consumer acceptance of our products and our ability to manage the life cycle of our brand, develop new merchandise and launch new product lines successfully; our ability to source, distribute and sell goods and materials on a global basis, including risks related to: political instability, wars and other armed conflicts, environmental hazards or natural disasters; significant health hazards or pandemics, which could result in closed factories and/or stores, reduced workforces, scarcity of raw materials, and scrutiny or embargoing of goods produced in impacted areas; duties, taxes and other charges; legal and regulatory matters; volatility in currency exchange rates; local business practices and political issues; delays or disruptions in shipping and transportation and related pricing impacts; disruption due to labor disputes; and changing expectations regarding product safety due to new legislation; our geographic concentration of vendor and distribution facilities in central Ohio; our reliance on a limited number of suppliers to support a substantial portion of our inventory purchasing needs; the ability of our vendors to deliver products in a timely manner, meet quality standards and comply with applicable laws and regulations; fluctuations in foreign currency exchange rates; fluctuations in product input costs; fluctuations in energy costs; our ability to adequately protect our assets from loss and theft; increases in the costs of mailing, paper, printing or other order fulfillment logistics; claims arising from our self-insurance; our and our third-party service providers', including Victoria's Secret & Co. during the term of the Transition Services Agreement between Victoria's Secret & Co. and us, ability to implement and maintain information technology systems and to protect associated data; our ability to maintain the security of customer, associate, third-party and Company information; stock price volatility; our ability to pay dividends and make share repurchases under share repurchase authorizations; shareholder activism matters; our ability to maintain our credit ratings; our ability to service or refinance our debt and maintain compliance with our restrictive covenants; the impact of the transition from London Interbank Offered Rate and our ability to adequately manage such transition; our ability to comply with laws, regulations and technology platform rules or other obligations related to data privacy and security; our ability to comply with regulatory requirements; legal and compliance matters; and tax, trade and other regulatory matters. We are not under any obligation and do not intend to make publicly available any update or other revisions to any of the forward-looking statements contained in this release to reflect circumstances existing after the date of this release or to reflect the occurrence of future events even if experience or future events make it clear that any expected results expressed or implied by those forward-looking statements will not be realized. Additional information regarding these and other factors can be found in "Item 1A. Risk Factors" in our 2021 Annual Report on Form 10-K, as filed with the Securities and Exchange Commission, and our subsequent filings. For further information, please contact:                                   Bath & Body Works, Inc.:   Investor Relations Media Relations InvestorRelations@bbw.com  Tammy Roberts Myers   Communications@bbw.com  BATH & BODY WORKS, INC.FIRST QUARTER 2022 Total Sales from Continuing Operations (Millions):   First Quarter 2022   FirstQuarter 2021   %Inc/(Dec)                 Stores – U.S. and Canada $ 1,059.2   $ 1,050.5   0.8%   Direct – U.S. and Canada  .....»»

Category: earningsSource: benzingaMay 18th, 2022

Washington Politicians Helped Create the Baby Formula Shortage. Can They Solve It?

A 1989 law led to intense consolidation in the baby formula industry. As parents across the country frantically search for baby formula amid a nationwide shortage, many have heard that the source of the problem is in Sturgis, Mich. That’s where Abbott, the multinational healthcare giant that sells formula under the Similac, Alimentum, and EleCare brands and controls 40% of the U.S. infant formula market, shut down its largest baby food plant in February after a type of bacteria linked to the hospitalization and death of several babies was found in the plant. (Abbott maintains there is not conclusive evidence its formulas harmed children.) But the reason one plant shutting down has had such an outsized impact on the nation’s baby food supply can be traced to Washington, specifically decisions made in the 1980s in Congressional hallways and beleaguered bureaucratic agencies. [time-brightcove not-tgx=”true”] Like most issues in Washington, the baby food shortage is a multifaceted one, but it comes down to a simple mismatch between supply and demand. Millions of families use baby formula, and too few brands supply it, leading to catastrophic shortages when just one of the major brands has a lapse in production. By six months of age, roughly three-quarters of babies born in the U.S. are given at least some formula, according to 2020 data from the Centers for Disease Control and Prevention. But lower-income moms are more likely than higher-earning ones to use formula over breastfeeding and start their babies on it earlier in life, due, in part, to the absence of national paid parental leave policies and less flexibility for mothers in service-industry jobs to breastfeed. Read more: 5 Parents on the Stress of Feeding Their Babies Amid Formula Shortage Many of those mothers end up taking part in the Special Supplemental Nutrition Program for Women, Infant, and Children, also known as WIC, which is run by the U.S. Department of Agriculture. Through state agencies, WIC gives families earning at or below 185% the federal poverty line vouchers and electronic cards to purchase baby formula on the government’s dime. In 1989, Congress, hoping to keep WIC’s costs down, passed legislation requiring states to use competitive bidding to select one manufacturer of infant formula to be covered by WIC. Roughly half to two-thirds of formula purchased in the U.S. is bought through WIC, according to government estimates. With so many low-income parents relying on formula, the move by Congress led to the bid winners in each state dominating the formula market there. That spurred the kind of intense consolidation in the U.S. formula industry that has not been seen in many other parts of the world. Since the single-contract rule was established more than 30 years ago, only three companies–Abbott, Gerber, and Mead Johnson—have received those WIC contracts. Their control over the market has disincentivized the creation of new brands, which is why the recent loss of Abbott’s products from store shelves has left many parents with few alternatives. As of May 8, 43% of the top-selling infant formula products were out of stock across the country, according to software platform Datasembly, with the range of standard shortages falling between 2% and 8%. “The extremely high levels of concentration in the infant formula market creates a serious risk to infant health if there is any disruption to a major manufacturer’s supply,” Senators Cory Booker of New Jersey, Amy Klobuchar of Minnesota, Tammy Duckworth of Illinois, and five other Democratic Senators wrote to Agriculture Secretary Tom Vilsack last week, calling for an “immediate antitrust review.” “This is yet another example of how alarming levels of consolidation hurts American families and can no longer be ignored,” they added. ‘Infant formula is the most regulated food that exists’ In Michigan, mother Elyssa Schmier is among those flummoxed by the empty baby formula shelves at her local grocery stores. She had hoped to exclusively breastfeed her son, who is eight months old, but her body wasn’t producing enough milk—even when she woke up every three hours to pump. Her doctor advised her to supplement with formula, which now makes up approximately 60% of her son’s bottles when she can find it in stores. Schmier, a vice president with MomsRising, which advocates for issues facing mothers and families, expressed frustration with seeing people use the moment to guilt moms for using formula when exclusively breastfeeding a child isn’t feasible for many, especially after they have begun tapering. “The best way to feed a child,” she says, “is to feed a child.” In Washington, many of the proposed solutions to Schmier’s dilemma are focused on the immediate crisis. The Biden Administration has urged states to temporarily loosen regulations around what brands and sizes of formula parents are able to purchase with WIC. A White House official told reporters on Monday that the Administration was also working with the four largest formula brands to identify hurdles to increasing supply domestically; the Administration also announced it would expedite the application and approval process for the importation of non-domestic formulas. Al Drago/Bloomberg via Getty ImagesKarine Jean-Pierre, White House press secretary, speaks during a news conference in the James S. Brady Press Briefing Room at the White House in Washington, D.C., US, on Monday, May 16, 2022. That process normally moves at a snail’s pace due to strict safety regulations governing baby formula. “Infant formula is the most regulated food that exists, by far,” says Dr. Steven A. Abrams, a professor at the Dell Medical School at the University of Texas at Austin and the chairman of the American Academy of Pediatrics’ Committee on Nutrition. “The reason being that if you leave a component out, the baby can have severe brain damage and die.” But international brands are also disincentivized from exporting their baby formula to the U.S. by tariffs as high as 17.5%. Rep. Nancy Mace, a South Carolina Republican, is working on a bill that would temporarily waive such tariffs on baby formula products. Rep. Abigail Spanberger, a Virginia Democrat, agrees that there needs to be some form of tariff reduction. “The fastest way to get more formula onto the shelves, at least in the short term, is going to be tariff relief,” she told TIME Monday. Lawmakers from both sides of the aisle, including Sen. Marco Rubio, Republican of Florida, Sen. Kirsten Gillibrand, Democrat of New York, and Spanberger, have also urged the Biden Administration to consider invoking the Defense Production Act, a law originally passed amid the Korean War that gives presidents broad powers to control domestic industries during emergency situations. Both Biden and former President Donald Trump invoked the DPA to speed up production of supplies needed to combat the pandemic. “There is ample precedent for using the DPA to address a crisis in peacetime,” Rubio said in a statement last week. But after the current crisis is over, and grocery stores are back to being fully stocked with formula, the underlying consolidation issue will remain, as well as the potential for similar shortages in the future. Addressing that problem would require a major overhaul of WIC, the kind that some experts who follow the issue are skeptical will happen any time soon. “There’s still not an awareness that one of the government’s key roles is to structure markets, so that you don’t have fragile supply chains,” says Matt Stoller, the director of research at the American Economic Liberties Project, an antitrust advocacy group, and the author of Goliath: The Hundred Year War Between Monopoly Power and Democracy. Spanberger says there also needs to be more transparency about possible shortages. She and a Republican colleague have drafted a bill that would require baby food manufacturers to inform the Food and Drug Administration (FDA) if they anticipate shortages moving forward, like manufacturers of other products do already. “There are certain requirements on various different types of industries that if they are anticipating supply chain disruptions or shortages, that they are to make that known to FDA,” she says, while acknowledging that the proposal wouldn’t solve the current shortages. “This legislation, unfortunately, won’t help us in the here and now,” she says. In the more immediate future, Abbott announced on Monday that it had reached a deal with the FDA to resume operations at its plant in Sturgis as soon as within the next two weeks after the plant addresses safety concerns. This won’t solve Schmier’s problems overnight, though. Abbott has previously said that once that plant was running again, it would take six to eight weeks for baby formula from there to return to store shelves. —with reporting by Alana Semuels in New York.....»»

Category: topSource: timeMay 17th, 2022

Financial War Takes A Nasty Turn

Financial War Takes A Nasty Turn Authored by Alasdair Macleod via GoldMoney.com, The chasm between Eurasia and the Western defence groupings (NATO, Five-eyes, AUKUS etc.) is widening rapidly. While media commentary focuses on the visible side of the conflict in Ukraine, the economic and financial aspects are what really matter. There is an increasing inevitability about it all. China has been riding the inflationist Western tiger for the last forty years and now that it sees the dollar’s debasement accelerating wonders how to get off. Russia perhaps is more advanced in its plans to do without dollars and other Western currencies, hastened by sanctions. Meanwhile, the West is increasingly vulnerable with no apparent alternative to the dollar’s hegemony. By imposing sanctions on Russia, the West has effectively lined up its geopolitical opponents into a common cause against an American dollar-dominated faction. Russia happens to be the world’s largest exporters of energy, commodities, and raw materials. And China is the supplier of semi-manufactured and consumer goods to the world. The consequences of the West’s sanctions ignore this vital point. In this article, we look at the current state of the world’s financial system and assess where it is headed. It summarises the condition of each of the major actors: the West, China, and Russia, and the increasing urgency for the latter two powers to distance themselves from the West’s impending currency, banking, and financial asset crisis. We can begin to see how the financial war will play out. The West and its dollar-based pump-and-dump system The Chinese have viewed the US’s tactics under which she has ensured her hegemony prevails. It has led to a deep-seated distrust in her relationship with America. And this is how she sees US foreign policy in action. Since the end of Bretton Woods in August 1971, for strategic reasons as much as anything else America has successfully continued to dominate the free world. A combination of visible military capability and less visible dollar hegemony defeated the communism of the Soviets and Mao Zedong. Aid to buy off communism in Africa and Latin America was readily available by printing dollars for export, and in the case of Latin America by deploying the US banking system to recycle petrodollars into syndicated loans. In the late seventies, banks in London would receive from Citibank yards-long telexes inviting participation in syndicated loans, typically for $100 million, the purpose of which according to the telex was invariably “to further the purposes of the state.” Latin American borrowing from US commercial banks and other creditors increased dramatically during the 1970s. At the commencement of the decade, total Latin American debt from all sources was $29 billion, but by the end of 1978, that number had skyrocketed to $159 billion. And in early-1982, the debt level reached $327 billion.[i] We all knew that some of it was disappearing into the Swiss bank accounts of military generals and politicians of countries like Argentina. Their loyalty to the capitalist world was being bought and it ended predictably with the Latin American debt crisis. With consumer price inflation raging, the Fed and other major central banks had to increase interest rates in the late seventies, and the bank credit cycle turned against the Latins. Banks sought to curtail their lending commitments and often (such as with floating-rate notes) they were paying higher coupon rates. In August 1982, Mexico was the first to inform the Fed, the US Treasury, and the IMF that it could no longer service its debt. In all, sixteen Latin American countries rescheduled their debts subsequently as well as eleven LDCs in other parts of the world. America assumed the lead in dealing with the problems, acting as “lender of last resort” working with central banks and the IMF. The rump of the problem was covered with Brady Bonds issued between 1990—1991. And as the provider of the currency, it was natural that the Americans gave a pass to their own corporations as part of the recovery process, reorganising investment in production and economic output. So, a Latin American nation would have found that America provided the dollars required to cover the 1970s oil shocks, then withdrew the finance, and ended up controlling swathes of national production. That was the pump and dump cycle which informed Chinese military strategists analysing US foreign policy some twenty years later. In 2014, the Chinese leadership was certain the riots in Hong Kong reflected the work of American intelligence agencies. The following is an extract translated from a speech by Major-General Qiao Liang, a leading strategist for the Peoples’ Liberation Army, addressing the Chinese Communist Party’s Central Committee in 2015: “Since the Diaoyu Islands conflict and the Huangyan Island conflict, incidents have kept popping up around China, including the confrontation over China’s 981 oil rigs with Vietnam and Hong Kong’s “Occupy Central” event. Can they still be viewed as simply accidental? I accompanied General Liu Yazhou, the Political Commissar of the National Defence University, to visit Hong Kong in May 2014. At that time, we heard that the “Occupy Central” movement was being planned and could take place by end of the month. However, it didn’t happen in May, June, July, or August. What happened? What were they waiting for? Let’s look at another timetable: the U.S. Federal Reserve’s exit from the Quantitative Easing (QE) policy. The U.S. said it would stop QE at the beginning of 2014. But it stayed with the QE policy in April, May, June, July, and August. As long as it was in QE, it kept overprinting dollars and the dollar’s price couldn’t go up. Thus, Hong Kong’s “Occupy Central” should not happen either. At the end of September, the Federal Reserve announced the U.S. would exit from QE. The dollar started going up. Then Hong Kong’s “Occupy Central” broke out in early October. Actually, the Diaoyu Islands, Huangyan Island, the 981 rigs, and Hong Kong’s “Occupy Central” movement were all bombs. The successful explosion of any one of them would lead to a regional crisis or a worsened investment environment around China. That would force the withdrawal of a large amount of investment from this region, which would then return to the U.S." For the Chinese, there was and still is no doubt that America was out to destroy China and stood ready to pick up the pieces, just as it had done to Latin America, and South-East Asia in the Asian crisis in 1997. Events since “Occupy Central” will have only confirmed that view and explains why the Chinese dealt with the Hong Kong problem the way they did, when President Trump mounted a second attempt to derail Hong Kong, with the apparent objective to prevent global capital flows entering China through Shanghai Connect. For the Americans the world is slipping out of control. They have had expensive wars in the Middle East, with nothing to show for it other than waves of displaced refugees. For them, Syria was a defeat, even though that was just a proxy war. And finally, they had to give up on Afghanistan. For her opponents, America has lost hegemonic control in Eurasia and if given sufficient push can be removed from the European mainland entirely. Undoubtedly, that is now Russia’s objective. But there are signs that it is now China’s as well, in which case they will have jointly obtained control of the Eurasian land mass. Financial crisis facing the dollar The geopolitics between America and the two great Asian states have been clear for all of us to see. Less obvious has been the crisis facing Western nations. Exacerbated by American-led sanctions against Russia, producer prices and consumer prices are not only rising, but are likely to continue to do so. In particular, the currency and credit inflation of not only the dollar, but also the yen, euro, pound, and other motley fiat currencies have provided the liquidity to drive prices of commodities, producer prices and consumer prices even higher. In the US, reverse repos which absorb excess liquidity currently total nearly $2 trillion. And the higher interest rates go, other things being equal the higher this balance of excess currency no one wants will rise. And rise they will. The strains are most obvious in the yen and the euro, two currencies whose central banks have their interest rates stuck below the zero bound. They refuse to raise them, and their currencies are collapsing instead. But when you see the ECB’s deposit rate at minus 0.5%, producer prices for Germany rising at an annualised rate of over 30%, and consumer prices already rising at 7.5% and sure to go higher, you know they will all go much, much higher. Like the Bank of Japan, the ECB and its national central banks through quantitative easing have assembled substantial portfolios of bonds, which with rising interest rates will generate losses which will drive them rapidly into insolvency. Furthermore, the two most highly leveraged commercial banking systems are the Eurozone’s and Japan’s with assets to equity ratios for the G-SIBs of over twenty times. What this means is that less than a 5% fall in the value of its assets will bankrupt the average G-SIB bank. It is no wonder that foreign depositors in these banking systems are taking fright. Not only are they being robbed through inflation, but they can see the day when the bank which has their deposits might be bailed in. And worse still, any investment in financial assets during a sharply rising interest environment will rapidly lose value. For now, the dollar is seen as a haven from currencies on negative yields. And in the Western world, the dollar as the reserve currency is seen as offering safety. But this safety is an accounting fallacy which supposes that all currency volatility is in the other fiat currencies, and not the dollar. Not only do foreigners already own dollar-denominated financial assets and bank deposits totalling over $33 trillion, but rising bond yields will prick the dollar’s financial asset bubble wiping out much of it. In other words, there are currently winners and losers in currency markets, but everyone will lose in bond and equity markets. Add into the mix counterparty and systemic risks from the Eurozone and Japan, and we can say with increasing certainty that the era of financialisation, which commenced in the 1980s, is ending. This is a very serious situation. Bank credit has become increasingly secured on non-productive assets, whose value is wholly dependent on low and falling interest rates. In turn, through the financial engineering of shadow banks, securities are secured on yet more securities. The $610 trillion of OTC derivatives will only provide protection against risk if the counterparties providing it do not fail. The extent to which real assets are secured on bank credit (i.e., mortgages) will also undermine their values. Clearly, central banks in conjunction with their governments will have no option but to rescue their entire financial systems, which involves yet more central bank credit being provided on even greater scales than seen over covid, supply chain chaos, and the provision of credit to pay for higher food and energy prices. It must be unlimited. We should be in no doubt that this accelerating danger is at the top of the agenda for anyone who understands what is happening — which particularly refers to Russia and China. Russia’s aggressive stance There can be little doubt that Putin’s aggression in Ukraine was triggered by Ukraine’s expressed desire to join NATO and America’s seeming acquiescence. A similar situation had arisen over Georgia, which in 2008 triggered a rapid response from Putin. His objective now is to get America out of Europe’s defence system, which would be the end of NATO. Consider the following: America’s military campaigns on the Eurasian continent have all failed, and Biden’s withdrawal from Afghanistan was the final defeat. The EU is planning its own army. Being an army run by committee it will lack focus and be less of a threat than NATO. This evolution into a NATO replacement should be encouraged. As the largest supplier of energy to the EU, Russia can apply maximum pressure to speed up the political process. The most important commodity for the EU is energy. And through EU policies, which have been to stop producing carbon-based energy and to import it instead, the EU has become dependent on Russian oil, natural gas, and coal. And by emasculating Ukraine’s production, Putin is putting further pressure on the EU with respect to food and fertiliser, which will become increasingly apparent over the course of the summer. For now, the EU is toeing the American line, with Brussels instructing member states to stop importing Russian oil from the end of this year. But already, it is reported that Hungary and Slovakia are prepared to buy Russian oil and pay in roubles. And it is likely that while other EU governments will avoid direct contractual relationships with Russia, ways round the problem indirectly are being pursued. A sticking point for EU governments is having to pay in roubles. Otherwise, the solution is simple: non-Russian, non-EU banks can create a Eurorouble market overnight, creating rouble bank credit as needed. All that such a bank requires is access to rouble liquidity to manage a balance sheet denominated in roubles. The obvious providers of rouble credit are China’s state-controlled megabanks. And we can be reasonably sure that at his meeting with President Xi on 4 February, not only would the intention to invade Ukraine have been discusseded, but the role of China’s banks in providing roubles for the “unfriendlies” (NATO and its supporters) in the event of Western sanctions against Russia will have been as well. The point is that Russia and China have mutual geopolitical objectives, and what might have come as a surprise to the West was most likely agreed between them in advance. The recovery in the rouble from the initial hit to an intraday low of 150 to the dollar has taken it to 64 at the time of writing. There are two factors behind this recovery. The most important is Putin’s announcement that the unfriendlies will have to pay for energy in roubles. But there was a subsidiary announcement that the Russian central bank would be buying gold. Notionally, this was to ensure that Russian banks providing finance to gold mines could gold and other related assets as collateral. But the central bank had stopped buying gold and accumulated the unfriendlies currencies in its reserves instead. This was taken by senior figures in Putin’s administration as evidence that the highly regarded Governor, Elvira Nabiullina, had been captured by the West’s BIS-led banking system. Russia has now realised that foreign exchange reserves which can be blocked by the issuers are valueless as reserves in a crisis, and that there is no point in having them. Only gold, which has no counterparty risk can discharge this role. And it is a lesson not lost on other central banks either, both in Asia and elsewhere. But this sets the rouble onto a different course from the unbacked fiat currencies in the West. This is deliberate, because while rising interest rates will lead to a combined currency, banking, and financial asset crisis in the West, it is a priority of the greatest importance for Russia to protect herself from these developments. A new backing for the rouble Russia is determined to protect herself from a dollar currency collapse. So far as Russia is concerned, this collapse will be reflected in rising dollar prices for her exports. And only last week, one of Putin’s senior advisors, Nikolai Patrushev, confirmed in an interview with Rossiyskaya Gazeta that plans to link the rouble to commodities are now being considered. If this plan goes ahead, the intention must be for the rouble to be considered a commodity substitute on the foreign exchanges, and its protection against a falling dollar will be secured. We are already seeing the rouble trending higher, with it at 64 to the dollar yesterday. Figure 1 below shows its progress, in the dollar-value of a rouble. Keynesians in the West have misread this situation. They think that the Russian economy is weak and will be destabilised by sanctions. That is not true. Furthermore, they would argue that a currency strengthened by insisting that oil and natural gas are paid for in roubles will push the Russian economy into a depression. But that is only a statistical effect and does not capture true economic progress or the lack of it, which cannot be measured. The fact is that the shops in Russia are well stocked, and fuel is freely available, which is not necessarily the case in the West. The advantages for Russia are that as the West’s currencies sink into crisis, the rouble will be protected. Russia will not suffer from the West’s currency crisis, she will still get inflation compensation in commodity prices, and her interest rates will decline while those in the West are soaring. Her balance of trade surplus is already hitting new records. There was a report, attributed to Dmitri Peskov, that the Kremlin is considering linking the rouble to gold and the idea is being discussed with Putin. But that’s probably a rehash of the interview that Nickolai Patrushev recorded with Rossiyskaya Gazeta referred to above, whereby Russia is considering fixing the rouble against a wider range of commodities. At this stage, a pure gold standard for the rouble of some sort would have to take the following into account: History has shown that the Americans and the West’s central banks manipulate gold prices through the paper markets. To fix the rouble against a gold standard would hold it a hostage to fortune in this sense. It would be virtually impossible for the West to manipulate the rouble by intervening in this way across a range of commodities. Over long periods of time the prices of commodities in gold grams are stable. For example, the price of oil since 1950 has fallen by about 30%. The volatility and price rises have been entirely in fiat currencies. The same is true for commodity prices generally, telling us that not only are commodities priced in gold grams generally stable, but a basket of commodities can be regarded as tracking the gold price over time and therefore could be a reasonable substitute for it. If Russia has significant gold bullion quantities in addition to declared reserves, these will have to be declared in conjunction with a gold standard. Imagine a situation where Russia declares and can prove that it has more gold that the US Treasury’s 8,133 tonnes. Those who appear to be in a position to do so assess the true Russian gold position is over 10,000 tonnes. Combined with China’s undeclared gold reserves, such an announcement would be a financial nuclear bomb, destabilising the West. For this reason, Russia’s partner, China, for which exporting semi-manufactured and consumer goods to the West is central to her economy activities, would prefer an approach that does not add to the dollar’s woes directly. The Americans are doing enough to undermine the dollar without a push from Asia’s hegemons. Furthermore, a mechanism for linking the rouble to commodity prices has yet to be devised. The advantage of a gold standard is it is a simple matter for the issuer of a currency to accept notes from the public and to pay out gold coin. And arbitrage between gold and roubles would ensure the link works on the foreign exchanges. This cannot be done with a range of commodities. It will not be enough to simply declare the market value of a commodity basket daily. Almost certainly forex traders will ignore the official value because they have no means of arbitrage. It is likely, therefore, that Russia will take a two-step approach. For now, by insisting on payments in roubles by the unfriendlies domestic Russian prices for commodities, raw materials and foods will be stabilised as the unfriendlies’ currencies fall relative to the rouble. Russia will find that attempts to tie the currency to a basket of currencies is impractical. After the West’s currency, banking, and financial asset crisis has passed then there will be the opportunity to establish a gold standard for the rouble. The Eurasian Economic Union While it is impossible to formally tie a currency which trades on the foreign exchanges to a basket of commodities, the establishment of a virtual currency specifically for trade settlement between jurisdictions is possible. This is the basis of a project being supervised by Sergei Glazyev, whereby such a currency is planned to be used by the member states of the Eurasian Economic Union (EAEU). Glazyev is Russia’s Minister in charge of integration and macroeconomics of the EAEU. While planning to do away with dollars for trade settlements has been in the works for some time, sanctions by the unfriendlies against Russia has brought about a new urgency. We know no detail, other than what was revealed in an interview Glazyev gave recently to a media outlet, The Cradle [ii]. But the desire to do away with dollars for the countries involved has been on the agenda for at least a decade. In October 2020, the original motivation was explained by Victor Dostov, president of the Russian Electronic Money Association: “If I want to transfer money from Russia to Kazakhstan, the payment is made using the dollar. First, the bank or payment system transfers my roubles to dollars, and then transfers them from dollars to tenge. There is a double conversion, with a high percentage taken as commission by American banks.” The new trade currency will be synthetic, presumably price-fixed daily, giving conversion rates into local currencies. Operating rather like the SDR, state banks can create the new currency to provide the liquidity balances for conversion. It is a practical concept, which being relatively advanced in the planning, is probably the reason the Kremlin is considering it as an option for a future rouble. That idea of a commodity basket for the rouble itself is bound to be abandoned, while a successful EAEU trade settlement currency can be extended to both the wider Shanghai Cooperation Organisation and the BRICS members not in the SCO. China’s position We can now say with confidence that at their meeting on 4 February Putin and Xi agreed to the Ukraine invasion. Chinese interests in Ukraine are affected, and the consequences would have had to be discussed. The fact that Russia went ahead with its war on Ukraine makes China complicit, and we must therefore analyse the position from China’s point of view. For some time, America has attacked China’s economy, trying to undermine it. I have already detailed the position over Hong Kong, to which can be added other irritations, such as the arrest of Huawei’s chief financial officer in Canada on American instructions, trade tariffs, and the sheer unpredictability of trade policy during the Trump administration. President Biden and his administration have now been assessed by both Putin and Xi. By 4 February their economic and banking advisors will have made their recommendations. Outsiders can only come to one conclusion, and that is Russia and China decided at that meeting to escalate the financial war on the West. Their position is immensely strong. While Russia is the largest exporter of energy and commodities in the world, China is the largest provider of intermediate and consumer goods. Other than the unfriendlies, nearly all other nations are neutral and will understand that it is not in their interests to side with NATO, the EU, Japan and South Korea. The only missing piece of the jigsaw is China’s commoditisation of the renminbi. Following the Fed’s reduction of its funds rate to the zero bound and its monthly QE increase to $120bn per month, China began to aggressively stockpile commodities and grains. In effect, it was a one-nation crack-up boom, whereby China took the decision to dump dollars. The renminbi rose against the dollar, but by considerably less than the dollar’s loss of purchasing power. This managed exchange rate for the renminbi appears to have been suppressed to relieve China’s exporters from currency pressures, at a time when the Chinese economy was adversely affected first by credit contraction, then by covid and finally by supply chain disruptions. With respect to supply chains, current lockdowns in Shanghai and the logjam of container vessels in the Roads look set to emasculate Western economies with supply chain issues for the rest of the year. All we know is that the authorities are making things worse, but we don’t know whether it is deliberate. It is increasingly difficult to believe that the financial and currency war is not being purposely escalated by the Chinese-Russian partnership. Having attacked Ukraine, the West’s response is undermining their own currencies, and the urgency for China and Russia to protect their currencies and financial systems from the consequences of a fiat currency crisis has become acute. It is the financial war which is going “nuclear”. Talk in the West of the military war escalating towards a physical nuclear war misses this point. China and Russia now realise they must protect themselves from the West’s looming currency and economic crisis as a matter of urgency. To fail to do so would simply ensure the crisis overwhelms them as well. Tyler Durden Fri, 05/06/2022 - 21:00.....»»

Category: dealsSource: nytMay 6th, 2022

Ukraine War Revives Supply Chain Crisis

Ukraine War Revives Supply Chain Crisis By Maartjie Wijffelaars and Erik-Jan van Harn of Rabobank Summary The Ukraine war has sparked another supply chain crisis, just as pandemic-related disruptions had started to ease. Europe depends on Russia, Ukraine and Belarus for its energy imports, but also for some chemicals, oilseeds, iron and steel, fertilizers, wood, palladium and nickel, amongst others. Especially the energy dependency is a vulnerability, now that Russia is demanding ruble payments for its exports. It is unlikely that Europe would be able to fully replace Russian gas in the short term, whilst most of the Russian oil and solid fossil fuels could be replaced. Besides energy goods, disrupted supply of pig iron and several other iron and steel products, nickel and palladium will likely have the largest impact on EU industry. EU supply chains could also be distorted via war-related production disruptions in third countries. The EU could face challenges in importing e.g. electronic circuits from third countries, as these require inputs such as nickel and neon gas sourced from the warzone. Germany and Italy are relatively vulnerable to the crisis because of their relatively large industrial sectors, strong reliance on Russian energy, and in case of Italy strong reliance on Russia and Ukraine for certain iron and steel imports and gas in its total energy mix Will we ever catch our breath? Just as supply chain issues caused by the pandemic were starting to ease (Figure 1), the next crisis has presented itself. The war in Ukraine is making clear that large parts of the world depend on Russia, Ukraine and Belarus for basic necessities such as food, energy and other commodities. Trade with Russia, Belarus and Ukraine (referred to as the warzone in the remainder of this piece) has come close to a halt due to a wide range of sanctions, self-sanctioning (mainly by western companies), and strongly disrupted production and transport in Ukraine. Although the overall share in world trade is limited for those countries, trade disruptions can have large implications for both specific firms and industries as well as entire economies. Disruptions (both actual and feared) to imports from the warzone will hurt the EU more than less exports to the warzone. Not only because the warzone accounts for a larger share in the EU’s imports than exports (Figure 2), but especially because less imports of commodities and intermediate products can have knock-on effects on multiple production processes in the EU. In Part I of this research note we will zoom in on the EU’s direct and indirect dependence on non-food commodities and goods imported from the warzone. We will assess which EU industry subsectors are most vulnerable for the disruptions caused by the war. In Part II we compare the vulnerability of the largest Eurozone countries. The revival of supply chain disruptions On top of oil and gas, Russia, Belarus and Ukraine are producers of a number of key commodities that are used in everyday items or in the production thereof– such as pig iron, palladium and neon. Next to commodities, certain industries also depend on these countries for intermediate products. A striking example is the dependence of several German car factories on certain car parts produced in Ukraine. This has already led to the closure of several German car factories. We can split up the effects on supply chains into first order and second order effects. First order effects are caused by a reduction in direct trade between the warzone and the European Union. There are two types of second order effects. The first is less trade between the warzone and third countries that results in fewer supply of products to the EU from those third countries. The second  is less EU production of intermediate goods due to higher energy prices -or even shortages- as a result of the war and, consequently, less production of downstream goods for which these intermediates serve as inputs (Figure 3). Part I: EU dependence on goods from the warzone We start our analysis by looking for products for which the EU27 depends heavily on Russia, Ukraine and Belarus. We then omit those products that can easily be imported from other parts of the world and those which do not play a vital economic role. For example, Germany is quite dependent on Russia for raw fur skins, but it is safe to say that Germans and the German economy will survive without fur coats. Table 1 lists the most exposed vital economic goods based on these principles, with a minimum net import volume of EUR1bn. In the table we have aggregated certain product lines that came out on top in this analysis, to prevent getting lost in too much detail. Note that the row ‘chemicals’, for example, does not encompass all chemicals, yet only those that fulfil the above criteria. A list of the specifics for each product group can be found in the appendix. Apart from food products, the EU extensively depends on the warzone for several energy goods, chemicals, fertilizers, and metals – such as iron, nickel and palladium. And apart from, perhaps, chemicals, it seems rather difficult for the EU to find alternative suppliers for these goods and will likely at least cause price rises. Below we will elaborate on usages and the consequences of reduced availability of the non-agri products listed in table 1 and where necessary, on specific products within those product groups. We also give some indication on the relative ease or difficulty to substitute these products. All in all, we find that many sectors are likely to face disruptions to the supply of inputs and/or higher prices thereof. Most vulnerable seem to be production of basic metals and fabricated metal products. Other sectors that will certainly be impacted as well are construction, machinery and equipment, and transport equipment. EU dependence on Russian energy The most obvious link with Russia is on the part of energy commodities. The EU relies on Russia for 21% of its oil imports, 37% of its gas imports and roughly 45% of its solid fossil fuels imports. Energy imports are not yet subject to outright sanctions in the EU and are still flowing, but the possibility of sanctions is talk of the town. In any case, fear of reputational damage and of accidently breaching sanctions has already led to some reduction of Russian oil imports in the EU. Meanwhile, Russia is demanding ruble payments for its exports, which the EU is currently refusing to pay. For the time being, Gazprombank will help European companies to convert their euro payments to rubles, but it is still possible that gas deliverance will be weaponized. Finally, the EU has presented a plan to cut back on Russian energy dependence over the coming year(s). In other words, it is useful to dive into the EU’s dependence on Russian energy, to grasp if we could do without. Not surprisingly it appears that it won’t be easy to get rid of Russian energy altogether and it would certainly lead to a shock effect in the short run if energy trade with Russia came to a sudden standstill. It would lead to energy shortages, possibly requiring rationing of energy consumption for the industry, leading to a substantial drop in industrial production. Special thanks to our energy strategist, Ryan Fitzmaurice, for providing us with the much needed background on energy markets. Gas It is unlikely that Europe could replace Russian gas with alternative gas in the short run. The most obvious way to cope with a halt of Russian gas imports, would be to replace Russian gas with non-Russian gas imports. Yet as we have already explained in a recent research note, there probably isn’t enough available gas to, suddenly, replace Russian supply. Moreover, switching to different gas suppliers also faces technical constraints. Much of Europe’s gas is supplied through pipelines in Central- and Eastern-Europe from the east to the west, which are not suitable for sending gas the other way around -at least not on a short notice. It is also unlikely that LNG imports will fill the gap in the short run. Apart from a lack of availability -certainly in the short run-, some EU countries lack the infrastructure needed to import LNG. LNG needs to be converted to a gas state in LNG terminals before it can be transported through a network of pipelines. Germany, for example, does not have any LNG terminals and neither do landlocked countries such as Czech Republic. Were it to come to gas shortages, switching to alternative fuels, like coal, is potentially necessary to avoid an energy shortage in the winter. But it goes without saying that increasing coal consumption is not in line with Europe’s green ambitions. A full report on Europe’s gas dependency can be found here. Oil Replacing oil could be somewhat easier than replacing gas, although it would come at a higher cost. Even though some oil is transported via pipelines, it can also be transported via ship or railway, without the need to liquify it first (as is the case with gas). This means that, if Europe can get its hands on oil of a similar grade, Russian oil that is transported through pipelines in central and eastern Europe, could be replaced, albeit at a higher price. Europe would have to compete with countries that currently rely on those types of oil, potentially pushing those countries, such as India or China, to importing the (cheaper) oil from Russia. That is a big if however. Oil can differ strongly depending on its origin. Usually different oils are characterized by their sulphur content and density. Ural oil is a medium sour crude oil (figure 6). The closest replacement crudes are from Saudi Arabia, Iran and Oman. In addition, the medium sweet barrels from the North Sea, West Africa and the United states would also be suitable alternatives, with less need to desulfurize the crude (a process that is very natural gas intensive). Refineries are usually tailored to a specific kind of oil, but could switch their operations to accommodate other types of oil in a relatively short period of time, but testing and blending of the new crudes are required to ensure smooth operations. Solid fossil fuels Friday 8 April, the EU announced a ban on Russian solid fossil fuel imports from August. While this has induced the price for coal to increase and can hurt specific factories, in our view, the omittance of Russian coal won’t be a major problem on a macro scale. The EU also gets about one-third of its imported solid fossil fuels -mainly coal- from Russia. At first sight, this seems to imply the EU is rather dependent on Russia for this part of its energy consumption too. But the figure overstates the importance of Russian coal  imports for the EU. First, coal is not as important to most European countries as gas or oil. On average, solid fossil fuels -mostly coal- are good for 11% of total EU energy consumption (Figure 4). Second, while a couple of countries, especially in the eastern part of Europe, still rely on coal for a significant part of their energy consumption (Figure 9), most of these countries are either pretty self-reliant or mainly import their coal from countries other than Russia. Major consumer Poland for example, produces around 98% of its coal consumption domestically. Moreover, although clearly in contradiction with the green ambitions of the European Union, the EU could decide to produce more coal if push comes to shove. Halted EU production due risen energy prices As mentioned, gas and oil imports are not yet subject to outright sanctions in the EU. Yet energy prices have jumped (Figure 7) upon uncertainty over the future of Russian energy imports in the EU, a ban on Russian oil in the US, and a voluntary drop in purchases of especially Russian oil by European buyers, amongst other things -data on the coal price is from before the announcement of the ban on Russian coal imports. Despite a drop since their war-peak, energy prices are still higher than at the start of the year and just prior to the start of the war. These higher energy prices, in turn, have led to production cuts of energy intensive products in the EU such as aluminium, zinc, steel, ceramics, concrete, bricks, glass, asphalt, paper and fertilizers - especially large gas consumers had also already taken a hit from surging prices last year. This will not only hamper the production of these specific products, but also frustrate downstream production for which these goods serve as inputs. The disruptions will certainly hit the construction sector, a sector that was already dealing with lengthy delivery times for several inputs. Furthermore, higher input prices will likely hit margins of construction companies and project developers, raise consumer prices of construction projects, and lead to delays and cancelations of projects. Other sectors that will see the costs of their non-energy inputs rise are for example machinery and equipment, consumer  appliances, and transportation due to less steel and aluminium production. Meanwhile, less production of paper -or higher prices- will be felt across many sectors that need packaging material. And finally, lower fertilizer production in the EU adds to less supply from the warzone countries (see below), impacting especially the agricultural sector. EU dependence on chemicals, fertilizers and wood imports Apart from energy commodities, the EU quite extensively depends on the warzone for certain chemicals, fertilizers, certain types of wood, rubber and several types of metal. Chemicals include carbon (black) which is used, to strengthen rubber in tires for example, and ammonia which is mostly used to produce fertilizers. Combining the former with the EU’s dependence on Russia for the ‘end product’ rubber (12% import market share), there could be an impact on the car sector. That said, based on world market shares it should not be too difficult to shift to other suppliers if importers are ready to pay a somewhat higher price. Limited availability of fertilizers due to lower imports from the warzone and less production in the EU poses a challenge for agriculture and hence ultimately the food sector. Meanwhile, Russia is the world’s largest exporter of lumber and is an important supplier of different types of wood for the EU’s construction sector and fuel wood. Although we do not expect any shortages here, due to the wide availability of wood from other parts of Europe, we do expect higher prices. EU dependence on metal imports Table 1 also shows a large dependence on the warzone for different metals with in some cases limited diversification possibilities. Should the prices of products mentioned below rise, delivery times are likely to lengthen as it usually takes time to find alternative suppliers. In some cases actual shortages could arise -although it is difficult to get a grip on the timing thereof due to missing details on the size of stocks. Most vulnerable in this respect are sectors making use of iron and steel, nickel, palladium and aluminium: basic metals and fabricated metal products, machinery and equipment, transportation, computer and electronic products, and construction. Iron and steel To illustrate, more than 50% of EU imports of pig iron -used to make steel-, ferrous ore products, semi-finished iron and non-alloy steel products, and waste from iron and steel production comes from the warzone. Especially for pig iron and waste there are few alternatives as the warzone has a world export market share of respectively 63% and 52%. But also for the ferrous and semi-finished products diversification will be difficult, given the world market share of 30% and 40%. Fewer steel imports from the warzone adds to pressure in the market from less production in the EU itself due to the risen energy prices. Iron and steel have a broad range of destinations. They not only end up in the basic and fabricated metal industry, but also construction, production of machinery, equipment (that obviously includes ‘military’) and automotive. Nickel and aluminium Another important metal with availability at risk is nickel. Nickel is essential for rechargeable batteries, medical devices, automotive, and electrical and electronic equipment. It is also used in construction and to make stainless steel. The EU gets 90% of its nickel mattes’ imports from the warzone and 20% of its unwrought nickel. Russia is in the top three of global exporters of nickel -playing musical chairs with the US and Canada- and has a global export market share of 15%. Moreover, it’s a very tight market, especially due to nickel being required in rechargeable batteries, with ever growing demand due to the world’s push for electrification. Hence it is likely to be challenging -at best- to replace nickel imports from Russia and will for sure induce higher costs. With regards to aluminium, Russia is the steady number 2 exporter in the world, with a market share of 10%. Some 12% of EU imports of unwrought aluminium is sourced from Russia. Fewer aluminium imports from Russia adds to pressure in the market from less production in the EU itself due to the risen energy prices. Aluminium has a broad range of applications and is used for, for example, wires and cables in electrical equipment, in construction, transportation, machinery and equipment and electronic products, e.g. consumer appliances. Palladium and platinum The final metal we will highlight is the rare metal palladium. EU import dependence on Russia is 27%, with Russia having a world export market share of 23%. Palladium is a by-product of nickel and platinum mining, amongst others, and hence it is tough to ramp up production. In other words, the EU is both very dependent on Russia and it won’t be easy to get a grip on alternative supplies -at least not at favourable costs. Importantly, palladium is used as a catalytic converter in cars: in both gas engine cars to reduce the emission of polluting gasses and as a catalyst in hydrogen fuel cell vehicles. It is also used in multilayer ceramic capacitors and hard disks, which in turn can be found in laptops and phones for example. Other uses of palladium are in sensors, chips, surgical instruments and dentistry. For most applications there are alternatives such as platinum, although opinions on the quality of substitutes differ. Currently, the EU gets 9% of its platinum imports from Russia, and the latter’s world export market share is 7%. Yet, if palladium is being replaced by e.g. platinum, clearly the price of the latter would likely explode as well -unless the world’s largest platinum producer South Africa more or less doubles its platinum production. To sum it all up So, in short, the EU -and also the world- depends heavily on Russia, Ukraine and Belarus for several key inputs to its industrial sector. Among those commodities are gas, oil, iron and steel products, nickel, palladium, several chemicals and aluminium. Combined, the products in table 1 only account for some 1% of EU GDP. Yet their value alone does not give the full picture of their importance to lengthy industrial value chains -and food security as far as the agri-related commodities are concerned. Gas and oil are still flowing, but a sudden stop in Russian gas imports would clearly have significant ramifications for the entire industrial sector. Risen energy prices have already curtailed EU production of energy intensive products. Meanwhile, halted or limited inflows of the non-energy commodities certainly has an impact on the price of these products and lengthens delivery times, which will be felt by multiple industrial subsectors. Topping the list of most exposed sectors are basic metals and fabricated metal products. Thereafter we find construction, chemicals, coke and refined petroleum products, wood and paper, machinery and equipment, and transport equipment with more or less the same impact score. Whereas risen energy prices have a higher impact on some, commodity shortages and higher prices of non-energy goods are more problematic for others. Second order effects via non-EU countries Apart from vulnerabilities due to direct trade links between the EU and the warzone, the EU will likely also be impacted via trade with third countries. In this respect, vulnerable product groups are motorcycles, electronic circuits, batteries and electronics and electrical machines. To get a feeling for second order effects that run via non-EU countries, we adopt a two-step approach. First, we look at the product categories for which the European Union is not self-sufficient. Unfortunately, it is hard to find any consumption data on this level of detail, so we look at the average ratio of imports to exports over the last couple of years. Second, we filter the data to exclude product groups with a trading volume smaller than EUR 1bn. Third, we have excluded the goods that already popped up in the analysis of direct trade links between the EU27 and Russia, Belarus and Ukraine. The second step is to look at whether these products -are likely to- consist of inputs coming from the warzone and/or include inputs which have experienced large price rises due to the war. Due to the globally intertwined supply chains and data gaps in this respect we have to resort to proxies in some cases. We start by listing products for which the warzone countries have a significant world market share. The larger their combined market share, the larger the chance that producers depend on the warzone countries. And even if producers don’t rely on the warzone themselves, they are likely to be confronted with price increases if manufacturers in other countries start looking for alternatives for their inputs from the warzone. For products where the warzone countries have a combined world market share above 10%, we check whether these products are commonly used in the production process of the goods in table 2. We also have to take into account whether the dependency relies on goods and commodities from Russia or Ukraine. China, for example, has not yet joined the west in imposing sanctions on Russia, and thus for now Russian goods will continue to flow to China. For Ukraine it is different, however, given that production has (partially) come to a standstill. Some of the product groups listed in table 2 are vulnerable due to the current sanctions or the production fallout in the warzone. This mainly holds for motorcycles, electronic circuits, batteries and electronics and electrical machines. Motorcycles Motorcycles production is dependent on long, optimized supply chains and is therefore vulnerable to any disruption whatsoever. Moreover, most new motorcycles are packed with chips (see below) and other electronics (which were already in short supply before the war started!) and are built using steel, aluminium, plastics and rubber. Russia is a global player when it comes to steel and aluminium production, but China as well. Japan depends on imports when it comes to aluminium and articles thereof, yet has a major steel industry itself. Electronic circuits and diodes (Electronic) circuits and diodes are mostly made of purified silicon. Silicon is the second most abundant element on earth after oxygen, so silicon is not the constraint for circuits. The production process also requires an inert gas, for which neon, krypton and xenon gases are often used- in fact, these gases are said to be essential for the semiconductor manufacturing industry. With some 70% of world supply, Ukraine is the world’s largest producer of the required purified form of neon gas. It also supplies respectively 40% and 30% of global demand for krypton gas and xenon gas. Two major Ukrainian producers of purified neon gas in Odessa and Mariupol have already halted production. Meanwhile, Russia is a major player when it comes to the production of the crude version of neon gas, given that the latter is a by-product of the steel industry. China, with its large steel industry, is another major player in both the crude and refined production, although it would need to increase its activities to be able to fulfil domestic demand and it is uncertain at what pace it could expand production -China currently also imports neon gas from Ukraine. At the start of the invasion, stocks at major semiconductor manufacturers worldwide were estimated to be enough for some 6 months of chip production. Batteries Batteries are currently in high demand since they pay a vital role in the energy transition. Batteries are mostly made from steel and nickel. We have already touched upon the former above. Especially the latter could prove to be an issue. Nickel is currently in a really tight spot, given that Russia supplies roughly 18% of the worldwide nickel exports and high demand due to the world’s push for electric vehicles. Whilst buying nickel from Russia could be an issue for Japan, for now it is unlikely to be an issue for China, however. Other materials used in batteries, such as zinc, manganese, and graphite are mainly produced in China, whilst again others such as cobalt are produced in Congo, but are directly controlled by China. Electronics and electrical machines Electronics and electrical machines will likely be impacted indirectly through a crunch of the already tight market for electronic circuits. Additionally, some of the appliances make use of rechargeable batteries, which in turn are affected by shortages and/or higher prices in nickel markets. Other inputs for these type of products with tighter world supply are aluminium, palladium and steel. But, again, for the time being China -which is the EU’s major supplier of electronics and electrical machines-, need not to be harshly impacted as it is still refraining from sanctioning Russia and is one of the largest global aluminium and steel producers itself. To conclude, the EU might be confronted with lengthened delivery times or higher prices of some final goods imports from third countries, such as motorcycles and electrical machines. Yet also intermediate imports from third countries such as chips and batteries could become more difficult to get by. This, in turn, could hamper EU production of transport equipment, machinery, and electronic products and electrical equipment. Conclusion part I Even though the imports from Russia, Ukraine and Belarus only make up a small share of the total imports and exports of the European Union, it is clear that the war in Ukraine is wreaking havoc in supply chains. The most obvious impact is from higher energy prices, and maybe, if sanctions escalate, an outright energy shortage. Sanctions on gas imports are the most likely catalyst for such a crisis, whilst oil and coal imports are easier to replace. As we will show in the second part of this publication, Germany and Italy are worst suited to deal with such a crisis because of their relatively large industrial sector and heavy reliance on Russian energy, gas in particular. France and Spain on the other hand, are better equipped to deal with such a crisis, although it needs to be said that no country will be left unscathed. But it’s not just energy that is posing a serious threat to supply chains. As we have shown in the report, there are plenty of other materials and products, such as nickel, palladium, iron, wood and neon (and agri-commodities of course!), that threaten supply chain disruptions in some industries, especially in the short run as it takes time to find supply elsewhere. Some supply chains will be directly impacted through their dependence on Russia, Ukraine and Belarus, whilst others may be impacted indirectly, through second order effects. Part II: Which member state is the most vulnerable? In the second part of this publication, we compare the exposure of the five largest EU economies to distortions caused by the war. We find that the German economy is most exposed, followed by the Italian economy. Direct trade linkages between member states and the warzone Just looking at the macro picture for the EU27 might understate some of the problems in specific member states. Since, even if there is a surplus in timber in Poland for example, that doesn’t necessarily mean that that surplus can be exported to Spain easily if the infrastructure isn’t there. Additionally, it would be naïve to assume it can be done at a similar price and ease. As such it is useful to zoom in on member states to see for what goods they rely on the warzone the most. To compare member states we adopt a similar methodology as we did to create table 1 for the EU 27, but use z-scores to compare the relative vulnerability for the five biggest economies in the EU. Table 3 presents the relative vulnerabilities related to non-energy products for which at least one of the five large member states strongly depends on the warzone, via direct trade linkages. Given the importance of energy security we will dedicate a separate section to the reliance on Russian energy. The products in table 3 are ranked based on the combined z-scores of the member states for that product group. Semi-finished products of iron or non-alloy steel top the list, due to Italy’s strong links with the warzone in this respect. Maize, sunflower-seed and oil, and pig iron are other products that stand out. Out of the five largest member states, Italy seems most exposed to the war through direct trade linkages with the warzone. It relies heavily on the warzone for pig iron and semi-finished products of iron or non-alloy steel. Some 84% of its imports of the former come from the warzone and 77% of the latter. Italy also gets 82% of its ferrous products imports from the warzone, yet the (net) trade value of this category is substantially smaller. Finally, its dependence on warzone sunflower seeds and oil stands out. Spain is relatively dependent on the warzone for agri-commodities, like maize and sunflower seeds. Respectively, some 32% and 66% of Spain’s imports of these products comes from the warzone at relatively large net-volumes. It also substantially relies on the warzone for pig iron and ferrous products. The Netherlands is especially dependent on the warzone for ‘maize or corn’. Roughly half of Dutch maize/corn imports are from the warzone. This could severely impact the price and availability of animal fodder, as is evident from the fact that Dutch farmers have already begun to hoard animal fodder. For Germany, the biggest vulnerabilities (next to energy) are unwrought nickel and copper, metals that are vital to German industry. Roughly 45% of Germany’s nickel imports and 24% of its copper imports come from the warzone. France seems least vulnerable to the war-induced supply crunch. Yet it is exposed to a halt in oilcake imports; oilcake can be used as fodder and fertilizer. Energy dependence of member states on Russia In order to gauge the vulnerability of European countries to a potential collapse in Russian energy exports, we have gathered data on the consumption, trade and domestic production of oil, gas and solid fossil fuels. Based on this data, we can compute the share of energy consumption for which alternative sources would need to be found if imports of Russian energy come to a halt. Looking at figure 8 it is evident that especially countries in Eastern and Central Europe are set to lose in case of an energy boycott. These countries have been able to acquire Russian fossil fuels for attractive prices in the past decades, partially because of the large network of pipelines that run through Eastern and Central Europe. This has given them no incentive to diversify their energy mix or decrease the reliance on Russia. Yet also, Finland, Germany, Italy and Greece get more than 20% of their energy consumption out of Russia, while in the Netherlands it is only slightly less. Meanwhile, Scandinavian countries rely on Norway for gas and oil imports, whilst they simultaneously have relatively large shares of renewable energy; the Iberian Peninsula relies on Algeria for gas and France but also Belgium are relatively large producers and users of nuclear heat (Figure 9). As we have argued before in the section on Europe’s energy dependence, replacing all of these fossil fuels will not be easy. Replacing Russian oil and solid fossil fuels may be possible, albeit at a higher price, but replacing Russian gas will not be as easy. Simply supplying more LNG, if this is even possible, will not do the trick in the short run. Whilst some countries, such as Spain, the Netherlands and Italy, have the terminals to convert LNG to regular gas, landlocked countries such as Czechia, but also Germany do not. Currently, the infrastructure is lacking to transport freshly converted gas to those countries and hence those countries are even more vulnerable to a stop in Russian gas imports than others -which explains Germany’s most outspoken resistance to banning such imports. For the full report on Europe’s gas dependency, we refer to this publication. Importantly, this analysis is primarily focussed on the availability of energy, but even if we don’t get to the point where energy availability is an acute issue, high energy prices impact all countries, whether they are dependent on Russia or not. Especially member states with a large share of gas in their energy consumption such as Italy and the Netherlands have seen their energy bills rise substantially -already last year. Relatively large coal consumers also seem to have a cost disadvantage compared to those consuming more oil. If current prices would be sustained until the end of the year, gas, coal and oil bills would on average be about, 9, 4 and 1.7 times larger this year than in 2019, respectively. Compared to last year, bills would increase less, but still be 1.6 times larger in case of gas and oil and 2.5 times in case of coal. How about the sectoral composition? Next to the vulnerability related to certain key commodities and (intermediate) products, the economic impact of the war in Ukraine is also determined by the economic composition of a country. Basically every sector in an economy is impacted by the higher energy prices, but some are more than others3. Additionally, some sectors rely heavily on commodities that are currently in tight supply and are unable to transfer some of the higher commodity prices to consumer prices. Most service sectors are left relatively unscathed, whilst the industrial sector is feeling the pinch. Based on the energy intensity, exposure to commodities for which prices have risen, and exposure to commodities that are in short supply, we have ranked industrial subsectors from most to least likely to be impacted (Table 4). It needs to be said that while it is clear that basic metals and fabricated metal products rank at the top and textiles at the bottom, there is a broader ‘middle’ group with more or less the same impact score. In table 4 this group ranges from construction to electrical equipment. Whereas risen energy prices have a higher impact on some, commodity shortages and higher prices of non-energy goods are more problematic for others. If we combine the ranking with the relative size of the industrial subsector per country, we can compare the relative vulnerability for the industries of the five biggest Eurozone member states. Based on their composition, industries in Germany and the Netherlands seem most vulnerable, but the differences are small. The fact that Germany has a relatively large transport and machinery sector for example, is compensated for by the fact that the German food industry is relatively small. Conclusion part II The economic fallout of the Ukraine war is felt by the entire EU, with higher volatility in commodity markets, lengthened delivery times and higher prices for a range of commodities. Highly intertwined supply chains make it difficult to isolate the exact economic impact of the war on different member states, but we explored a method to grasp the relative vulnerabilities of the five largest EU member states. According to our analysis the German economy is most at risk to face headwinds caused by the war due to the composition and size of its industrial sector, and its dependence on Russian energy. Next in line is Italy. Italy’s industrial composition seems slightly more favorable, but it is relatively large as well. Furthermore, Italian industry extensively depends on Ukraine and Russia for certain industrial steel inputs and energy. Finally, Italy is a large gas consumer, and hence relatively more impacted by the increase in energy prices so far. Tyler Durden Thu, 04/14/2022 - 21:10.....»»

Category: worldSource: nytApr 14th, 2022

Verizon (VZ) to Power EV Fleet Management With Sawatch Labs

The strategic partnership between Verizon (VZ) and Sawatch Labs is likely to standardize and optimize applications and help fleet operators improve efficiency levels. Verizon Communications Inc. VZ recently collaborated with Sawatch Labs to help fleet operators seamlessly migrate to electric vehicles (EV). This is likely to optimize the operating costs of vehicles with key inputs from the analytics firm while significantly contributing to the environment-friendly mode of transportation.  EVs are likely to form a considerable part of the vehicle fleet in the near future, bringing to the fore the need for effective EV fleet management. This is where Sawatch Labs pitches in with its complex analytics models leveraging machine learning technology to identify opportunities within the fleet for actionable insights. Its data-driven analysis helps unlock the fleet’s potential by optimizing decisions ranging from the correct fleet size to accurate procurement and assignment.Verizon Connect Reveal, the fleet management software platform from the carrier, offers customizable GPS fleet management software to effectively track vehicle locations and driver behavior like speeding, idling and harsh driving to improve fleet operations. This, in turn, helps reduce costs for vehicle maintenance and fuel consumption while improving dispatch, routing and visibility by proactively allocating resources for optimum utilization.Fleet operators had historically utilized 3G devices to track vehicles that often failed to provide precise data in remote locations that lacked extensive network coverage. By migrating to 4G and cloud networks and utilizing Sawatch Labs analytics, fleet operators will be able to identify accurate location data for faster routing facilities by deploying the closest vehicle to customers. With the Verizon Connect Reveal app, which is exclusively available in the 4G network, customers will benefit from a new High-Fidelity Tracking feature. This asset tracking software offers a three-fold jump in the frequency of real-time vehicle location updates on the Live Map, thereby providing higher visibility of project-critical equipment.The strategic partnership between Verizon and Sawatch Labs is likely to standardize and optimize applications and help fleet operators accelerate innovation, reduce risks and improve efficiency levels. It will likely offer customers the critical data to make smarter, more cost-effective, long-term investments in their fleets for a profitable business and a safe and clean environment.With one of the most efficient wireless networks in the United States, Verizon deploys the latest 4G LTE Advanced technologies to deliver faster peak data speeds and capacity for customers, driven by customer-focused planning, disciplined engineering and constant strategic investment. The company remains focused on making necessary capital expenditures due to the expansion of 5G mmWave in new and existing markets, the densification of the 4G LTE wireless network to cater to huge traffic demands across multiple verticals and the continued deployment of the fiber infrastructure.Verizon’s 5G mobility service offers an unparalleled experience that impacts industries as diverse as public safety, health care, retail and sports. The company’s 5G network hinges on three fundamental drivers to deliver the full potential of next-generation wireless technology. These are massive spectrum holdings, particularly in the millimeter-wave bands for faster data transfer, end-to-end deep fiber resources and the ability to deploy a large number of small cells. In order to expand coverage and improve connectivity, Verizon has acquired 161MHz of mid-band spectrum in the C-Band auction for a total consideration of $45.5 billion. These airwaves offer significant bandwidth with better propagation characteristics for optimum coverage in both rural and urban areas.The company is continuing with the aggressive rollout of 5G Ultra Wideband service to expand its coverage across the country. It is also offering the best of LTE and 5G Ultrawideband facilities with the launch of On Site 5G — a transformative on-premises, private 5G network — for business enterprises. This customized solution enables firms hitherto crippled with coverage gaps, lost connectivity, fractured security, data congestion and inconsistent service quality to have a dedicated capacity with adequate bandwidth to minimize costly downtime and missed opportunities.The stock has lost 6.5% over the past year compared with the industry’s decline of 14.2%. Nevertheless, we remain impressed with the inherent growth potential of this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Image Source: Zacks Investment ResearchSierra Wireless, Inc. SWIR, carrying a Zacks Rank #2 (Buy), is a solid pick within the industry in the broader industry classification. It has a long-term earnings growth expectation of 12.5% and delivered an earnings surprise of 58%, on average, in the trailing four quarters.Over the past year, Sierra Wireless has gained 11.5%. Earnings estimates for the current year for the stock have moved up 68.8% since April 2021. The company continues to launch innovative products for business-critical operations that require high security and optimum 5G performance.Arista Networks, Inc. ANET, sporting a Zacks Rank #1, is another solid pick for investors in the broader industry classification. It has a long-term earnings growth expectation of 15.4% and delivered a modest earnings surprise of 7.7%, on average, in the trailing four quarters. Earnings estimates for the current year have moved up 30.4% since April 2021, while that for the next year is up 41.1%.Arista benefits from strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Over the past year, Arista has gained 69.6%.KVH Industries, Inc. KVHI is a Zacks Rank #2 stock. It delivered an earnings surprise of 20%, on average, in the trailing four quarters.Despite global supply chain disruptions, KVH Industries is driving growth and margin expansion through new product introduction and subscriber migration to High-Throughput Satellites. The company aims to make decisive inroads into the still-nascent autonomous transportation markets with a strong balance sheet and zero debt. If KVH Industries manages to effectively mitigate supply chain woes, there could be room for cash flow expansion. 7 Best Stocks for the Next 30 Days Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops." Since 1988, the full list has beaten the market more than 2X over with an average gain of +25.4% per year. So be sure to give these hand-picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Sierra Wireless, Inc. (SWIR): Free Stock Analysis Report Verizon Communications Inc. (VZ): Free Stock Analysis Report KVH Industries, Inc. (KVHI): Free Stock Analysis Report Arista Networks, Inc. (ANET): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksApr 12th, 2022

Top Research Reports for PepsiCo, T-Mobile & BlackRock

Today's Research Daily features new research reports on 16 major stocks, including PepsiCo, Inc. (PEP), T-Mobile US, Inc. (TMUS), and BlackRock, Inc. (BLK). Monday, April 4, 2022The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including PepsiCo, Inc. (PEP), T-Mobile US, Inc. (TMUS), and BlackRock, Inc. (BLK). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today. You can see all of today’s research reports here >>>Shares of PepsiCo have outperformed the Zacks Beverages - Soft drinks industry over the past one year period (+21.9% vs. +16.7%) on the back of strong operating performance, as reflected in the recent quarterly report when volume growth and robust price/mix drove outperformance. Earnings were in line with estimates and improved year over year. The company also benefits from investments in brands, go-to-market systems, supply chains, manufacturing capacity, and digital capabilities to build competitive advantages. It also gains from the resilience and strength of global beverage and convenient food businesses.In 2022, it expects to retain the strength and momentum witnessed in 2021. However, PepsiCo witnessed margin pressures in fourth quarter 2021 driven by impacts of supply-chain disruptions and the negative effects of the inflationary labor, transportation and commodity costs.(You can read the full research report on PepsiCo here >>>)Shares of T-Mobile have outperformed the Zacks Wireless National industry over the year to date basis (+12.7% vs. +3.7%). The company continues to expand its 5G network to bring fast and affordable service across the country. It announced a series of steps to accelerate 5G developer innovation. Initiatives include a new developer platform, innovation center, venture investments, T-Mobile Accelerator participants and 5G partnerships with Disney and Red Bull. The Zacks analyst believes that dubbed 5G Forward, these moves will strengthen the 5G innovation ecosystem and help creators build the 5G future. T-Mobile’s commitment to building the world’s best nationwide 5G network is likely to bring superfast speeds to urban and rural locations.However, it operates in a fiercely competitive and almost saturated U.S. telecom market. Low-priced plans for consumers and small enterprises have not improved the bottom line. Promotional activities to lure customers from rivals hurt its profitability.(You can read the full research report on T-Mobile here >>>)Shares of BlackRock have outperformed the Zacks Financial - Investment Management industry over the past one year period (+0.2% vs. -9.7%). The Zacks analyst believes that the company has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters. Supported by a strong liquidity position, BlackRock continues with efforts to restructure the equity business. This, along with strategic acquisitions, will likely keep aiding revenue growth and help in expanding its market share and footprints globally. Steadily improving assets under management (AUM) balance will likely further support the top line.Its capital deployment activities look sustainable, through which it will keep enhancing shareholder value. However, elevated expenses (owing to higher administration costs) might hurt profits to some extent. The company’s high dependence on overseas revenues is another concern.(You can read the full research report on BlackRock here >>>)Other noteworthy reports we are featuring today include Automatic Data Processing, Inc. (ADP), Charter Communications, Inc. (CHTR) and Block, Inc. (SQ).Sheraz Mian Director of ResearchNote: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>Today's Must ReadMomentum in PepsiCo's (PEP) Snacking Business to Aid Growth5G Leadership & Customer Growth to Drive T-Mobile (TMUS)Buyouts, AUM Balance Aid BlackRock (BLK), High Costs AilsFeatured ReportsADP Rides on Strategic Buyouts Amid Technological ChallengesThe Zacks analyst likes ADP's buyout strategy to boost its position in the human capital management market. Pressure to remain technologically updated to meet varying client demands remains a concern.Mobile & Internet Subscriber Gain Benefits Charter (CHTR)Per the Zacks analyst, higher subscriber strength in residential and commercial internet services along with broadening Spectrum Mobile user base is driving Charter's top line.Block (SQ) Banks on Solid Cash App Adoption, Bitcoin GrowthPer the Zacks analyst, Block is benefiting from strong Cash App engagement and its growing active customer base. Further, growing bitcoin revenues owing to robust Cash App are contributing well.Illumina (ILMN) Banks on Strategic Pacts amid Stiff RivalryThe Zacks analyst is optimistic about lllumina's recent partnerships including Agendia pact intended to advance the use of NGS for decentralized oncology testing. Stiff Competition remains a concern.Investments Aid Ameren (AEE), High Emission Expenses WoePer the Zacks analyst, systematic investment in infrastructure project boosts Ameren's growth. Yet the stock bears high expenditure to comply with air emission regulations that may hurt its results.RH Banks on Strategic Initiatives Amid Supply-Chain WoesRH's focus on strategic initiatives for improving profit margins as well as solid performance of new galleries is encouraging, per the Zacks analyst. Yet, supply-chain disruptions are risks.Acquisitions Drive Humana (HUM), High Costs HurtPer the Zacks Analyst, buyouts have helped the company to expand business and achieve long-term growth. However, escalating expenses continue to weigh down on the margins.New UpgradesCactus (WHD) to Gain From Higher Wellhead Equipment SalesThe Zacks analyst is upbeat about Cactus' higher sales of wellhead and production-related equipment due to the rising customer drilling activity. This will get translated into increased cash flows.Dow (DOW) Gains on Cost Actions, Project InvestmentAccording to the Zacks analyst, Dow is well placed to benefit from cost synergy savings and productivity initiatives and its investment in high-return growth projects.Acquisitions and Expansion Moves Aid Steel Dynamics (STLD) Per the Zacks analyst, acquisitions will expand the company's product portfolio and shipping capabilities. Expansion actions should also add to its capacity and boost profitability.New DowngradesBiogen (BIIB) Hurt by Slow Aduhelm Launch, Competition The Zacks analyst believes Aduhelm's launch has been slow due to reimbursement-led uncertainty. Increased competition is hurting Spinraza sales. Multiple generic launches are hurting Tecfidera sales.Burlington Stores (BURL) Grapples With Higher SG&A ExpensesPer the Zacks analyst, Burlington Stores has been witnessing higher SG&A expenses on increased product-sourcing costs as well as elevated freight costs. This has been hurting margins for a while now.Higher Costs From Rasmussen Buyout Ail American Public (APEI)Per the Zacks analyst, American Public has been facing higher costs and expenses, mainly attributed to the inclusion of the Rasmussen University, increase in professional fees, and advertising costs. Just Released: Zacks Top 10 Stocks for 2022 In addition to the investment ideas discussed above, would you like to know about our 10 top buy-and-hold tickers for the entirety of 2022? Last year's 2021 Zacks Top 10 Stocks portfolio returned gains as high as +147.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buysAccess Zacks Top 10 Stocks for 2022 today >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Automatic Data Processing, Inc. (ADP): Free Stock Analysis Report BlackRock, Inc. (BLK): Free Stock Analysis Report PepsiCo, Inc. (PEP): Free Stock Analysis Report Charter Communications, Inc. (CHTR): Free Stock Analysis Report TMobile US, Inc. (TMUS): Free Stock Analysis Report Block, Inc. (SQ): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksApr 4th, 2022

China"s Belt-And-Road Comes To America"s Heartland, Part 2: This Is Not The End

China's Belt-And-Road Comes To America's Heartland, Part 2: This Is Not The End Authored by Fortis Analysis via Human Terrain, Earlier this year, Fortis Analysis released details on the proposal by Fufeng Group, a CCP-connected company, to build a wet corn mill and amino acid production facility in Grand Forks, ND. In conducting further research, interviewing local residents, and working with recognized experts in national security and United States trade law, it is more and more clear that the Grand Forks city council and mayor Brandon Bochenski are both economically and constitutionally illiterate. Pictured: Fufeng USA Chief Operating Officer Eric Chutorash, speaking to Grand Forks City Council A single line of inquiry into this project is impossible, so we will work to highlight a range of domains where this project falls short of both good sense and the law of the land. To that end, let’s first explore the FAQ on this project released by the Grand Forks Regional Economic Development Council. There are numerous claims so easily rebutted that making them is either knowingly spreading false information, or an inexcusable lack of attention (or ability) to performing due diligence. A selection: CLAIM: ”Fufeng USA is a global leading bio-fermentation company manufacturing products that serve fast-growing animal nutrition. Their headquarters is in Chicago, Ill. Fufeng USA has chosen to invest in Grand Forks to establish a wet corn mill processing plant in the United States.” FACT: Fufeng USA Incorporated was established in the United States at the address of a private residence in Wheaton, IL. As of this writing, Fufeng USA Incorporated imports to the United States using the same Wheaton location as its official consignee address registered with US Customs and Border Protection. Another Fufeng USA corporate address noted on the Chicago Chinatown Chamber of Commerce website (under the “Manufacturers” section) is located inside a multi-tenant office building in Oak Brook, IL. This entity is wholly-owned by Fufeng USA Holdings Limited, which is domiciled in Hong Kong, and is itself wholly-owned by Trans-Asia Capital Resources Ltd., also domiciled in Hong Kong. Trans-Asia Capital Resources Ltd. is a wholly-owned subsidiary of Fufeng Group, which has its principal place of business in Junan in the Shandong Province of China. It is beyond a stretch to say that Fufeng USA is anything more than a shell company to facilitate Fufeng Group’s ability to do business in the United States. This information comes directly from Fufeng Group’s annual report for 2020, published in 2021. CLAIM: “The North Dakota Trade Office has done a search for illegal import/export activity for Fufeng USA and its principles. No red flags or areas of concern were found. NDTO resources include access to 30 federal databases. Fufeng USA has been operating in the United States since 2020. Also, First Biotech, Inc., a Fufeng USA subsidiary, has been doing business in the US for over 10 years. Both have filed federal taxes in the US and have established international banking accounts with large financial institutions that have significant federal oversight. The company will be subject to all the same US laws, regulations, and oversight and any US company. Fufeng USA Group is publicly traded on the Hong Kong Stock Exchange. The US Securities and Exchange Commission has a supervisory oversight relationship with the Exchange. Fufeng USA Group has many US and European institutional investors including TreeTop Management, Vanguard, Fidelity, Mellon, and Blackrock, all heavily regulated.” FACT: This is, quite simply, a word salad intended to obscure the real issue at stake here - the absence of correct and proper due diligence. The United States has multiple layers of regulatory oversight beyond basic financial oversight, few if any of which have been notified by GFREDC, the city, or Fufeng, let alone conducted formal inquiries. One other point that must be noted is that “Fufeng USA Group” is not a real entity, nor is any Fufeng USA entity “publicly traded on the Hong Kong Stock Exchange”. The publicly-traded entity is the ultimate parent company, Fufeng Group Limited. More detailed explorations of these points follow further in this analysis. In short, the absurd and incorrect statement that a cursory review of trade databases and some correctly-filed taxes is sufficient proof of Fufeng’s safety to national security should embarrass all involved in this process. CLAIM: “The development of the Fufeng USA plant will create a local market for corn and improve pricing. Regional farmers will have the option to sell to elevators or Fufeng USA. The North Dakota Corn Growers Association, a farmer led membership organization focused on policy that impacts North Dakota corn producers, were pleased with the announcement that Fufeng USA will establish a wet corn mill in Grand Forks. They issued a press release indicating the project will have tremendous value to regional farmers.” FACT: The claim made elsewhere by the city about the economic impact to farmers betrays a startling ignorance about the mechanisms of grain production and sales. The estimate of $.20 to $.40 per bushel of corn in premium versus current market conditions was not derived from careful analysis conducted by third-party experts. When pressed on the matter by Shaun Beauclair, himself a farmer and former board member of a regional corn processing facility, the GFREDC admitted that the premium assumption was given by a single farmer. In a February interview with AgWeek about the Fufeng project, Dr. Frayne Olson of North Dakota State University said that he believes the $.40 per bushel claim is only realistic for the first year or two to incentivize sales to the corn mill. Once the market settles back in future years, the realistic premium is closer to $.10 to $.20 per bushel. In practice, the grain elevators in the area who do not have direct interest in a value-added market for their purchased corn will quickly be faced with the choice of becoming a de facto origination and storage facility for Fufeng, or closing their doors. As one can see from this selection of “facts”, the Grand Forks Regional Economic Development Council has not done its best work to provide complete or accurate information to its stakeholders. Now, if this was the only vector of misinformation and all others involved were honest brokers, one might understand how an economic development group would choose to shade the truth a bit in order to bring a splashy, high-revenue project to town. Unfortunately, this is not the case. Multiple other individuals in positions of city leadership have also willingly promoted dishonest talking points, or chosen unscrupulous partners for the city, all in the interest of pushing the project forward. Let’s examine a few of these. Fufeng Group Has No Financial Connection to the Chinese Government On November 17, 2021, in a publicly-posted comment on his official Facebook account, Grand Forks mayor Brandon Bochenski stated that: “…the company is an American subsidiary of a publicly traded company that has zero govt. ownership. They are investing in an American facility built by American contractors, using American corn stock to produce products sold in America and manufactured by American workers. The company is more American than Apple, Nike and Amazon quite frankly in the global economy of today.” Members of the city council have used similar talking points in publicly-available council discussions. Now, this particular formulation of the zero-affiliation claim is intended to reassure listeners that as Fufeng Group Limited is a publicly-traded company on the Hong Kong Stock Exchange (a subsidiary of HKEx, or Hong Kong Exchanges and Clearing), it is not reasonable to believe that the firm or any of its subsidiaries would choose (or be forced) to act in any way outside the direct fiduciary interests of its global shareholders. A complete overview of the complicated (and compromised) relationship between the HKEx and the Chinese Communist Party is beyond the scope of this piece, but for now, the following data will more than suffice to rebut this talking point. HKEx’s largest single shareholder is the Hong Kong Government, which also has the right to appoint six of thirteen directors to HKEx’s board. This matters for a number of reasons, but perhaps the most important is the Hong Kong national security law unanimously passed by China’s Standing Committee of the National People’s Congress on 30 June 2020 in the wake of widespread pro-democracy protests throughout Hong Kong. Among the various deeply anti-democratic provisions of the law are the requirement that companies listed on the Hong Kong Stock Exchange act in accordance with the security directives of a secret body called the Committee for Safeguarding National Security. This entity has the ability to at any time investigate, indict, prosecute, or ruin any non-compliant company who has any business interest in Hong Kong - and extend these enforcement protocols anywhere in the world in violation of sovereign law and international norms. It is impossible to believe that HKEx will push back in any way if the Chinese Communist Party directs Fufeng Group to perform certain actions or disclose confidential business, community, or employee information in any of its subsidiaries - including Fufeng USA Incorporated. In simplified form, if the secret national security entity in mainland China or Hong Kong creates any pretext whatsoever, it will be able to force Fufeng USA to reveal all personal details of any employee, contractor, or even guests of the corn mill, regardless of the laws of the United States. This is an extremely important detail that as of yet, has not been properly addressed by Fufeng or city officials. Moreover, it is not even accurate to say that Fufeng Group does not have a financial connection to the Chinese government. In the same annual report referenced earlier, Fufeng Group Limited lists an interesting disclosure: a 30% ownership stake in Jilin COFCO Biomaterial Co Ltd. This joint venture between Fufeng Group and China Oil and Foodstuffs Corporation (COFCO) is notable because COFCO is the largest agribusiness in China, and is a 100% state-owned enterprise under the management of the hyperpowerful State-owned Assets Supervision and Administration Commission of the State Council (SASAC). Note that SASAC manages numerous entities that are currently sanctioned by the United States for espionage activities, use of forced labor in Xinjiang and elsewhere, and violation of international treaties or laws. Though COFCO has as yet not been similarly sanctioned, it is important to note that its sister companies under SASAC were penalized for carrying out the will of the Chinese Communist Party, and that COFCO can at any time be similarly leveraged by the CCP to perform illegal activities against the United States. As with numerous other claims made by the North Dakota Trade Office, Mayor Bochenski, GFREDC, and the Grand Forks city council, one cannot help but wonder how much due diligence has actually been put into this project. The City Is Taking All Appropriate Steps to Examine the Impact on U.S. National Security Interests This omnibus talking point, used repeatedly by city officials, is also completely inaccurate. There are numerous checks and balances that exist at the federal level concerning real estate acquisitions and foreign investments into the U.S. economy. The most well-known of these, the Committee on Foreign Investment in the United States (CFIUS), is a multi-agency group under the Executive Branch that has the mandate of reviewing transactions by foreign entities into companies or technologies designated as “critical” to national security, and/or real estate transactions located within 100 miles of designated military installations. An examination of the facts shows that the Fufeng project may fall into the category of a “covered real estate transaction”, which means CFIUS expects voluntary disclosure of the project’s details. The risk is that if stakeholders do not disclose and CFIUS chooses to open an inquiry at some point, then an adverse finding from CFIUS will result in significant penalties for all involved, up to and including the forced sale of the property and assets to an approved third party. That the city and county have been courting Fufeng Group since mid-2020 and as of yet have not sought out independent legal review for compliance with FIRRMA (the law governing CFIUS’ activities), or submitted for a free voluntary review with CFIUS since the public reveal of this project in November 2021, does not argue well for the city council’s competence or motives in continuing to ignore public outcry and push the process forward at a breakneck pace. Another talking point used by the city and GFREDC is that the county and city’s “base retention” consultant, retired USAF General David Deptula, has reviewed the proposal and discussed it with the leadership at Grand Forks Air Force Base. The claim is that no one has issued an objection to the Fufeng proposal. There are a few things about this, however, that raise red flags. First, Deptula was the subject of a multi-year investigation by Department of Defense into illicit contracting activities and fraud while he was in uniform. In February 2015, Deptula agreed with the Department of Justice to pay a fine of $125,000, and was barred by the Air Force from conducting business with the federal government from November 2014 to February 2016. Despite this, the Grand Forks city council continues to authorize a $5,000 per month direct payment to The Deptula Group (Deptula’s lobbying and consulting firm) for base retention activities. When questioned about this, city council president Dana Sande initially insisted that Grand Forks County employs Deptula, not the city. After being reminded of the monthly expense approved by Sande and the rest of the city council, Sande admitted that the city pays a portion of the funding for base retention activities, but the county is in charge of selecting and coordinating with Deptula. However, a review of the county’s 2021 budget does not show a request or approval for funding to be allocated under the Base Retention line item, nor do county minutes throughout 2021 show approvals to remit any funds to Deptula, his company, or for base retention activities. It is possible that the county has allocated funding under a different line item to pay for Deptula’s services, but such is not noted. However, if the county is indeed not contributing to paying Deptula, then the city of Grand Forks appears to be willingly carrying the cost of Mr. Deptula for “base retention” activities, even as the Air Force already publicly committed in 2021 to expanding the base’s role and increasing its footprint in Grand Forks. Regardless, the ongoing payment of Deptula for at least $5,000 per month from city funds reflects the council’s comfort with employing fixers who have a questionable at best code of ethics when it comes to personal enrichment at the expense of taxpayers. Moreover, it is not for the leadership of the local military installation to make a determination on if a particular project is compliant with national security regulations. Thus, the constant talking points by city officials that Grand Forks Air Force Base has reviewed the project and not issued a complaint is misleading and wholly incorrect. The base leadership cannot review and rule on the Fufeng project, or any other potential commercial investment by foreign entities in the area of the base. The fact that city officials have continuously asserted that the Grand Forks Air Force Base commander has done so is incorrect, and jeopardizes the careers of both the commanding officer and any active duty personnel so connected to the claim. It also opens the door to civilian law enforcement involvement, as active duty military personnel allegedly issuing inappropriate and unauthorized statements in support of foreign investment may also entangle the civilians making such claims into criminal or civil charges. This is a tightrope for city officials to publicly walk, and it would seem from the outside that they have created a fiasco in the making in their haste to justify a lack of responsible and legal due diligence. There Are No Other Conflicts of Interest on the City Council with This Project Before each City Council vote on this project, the council brings up councilmember Jeannie Mock’s conflict of interest in the project and votes to force her to abstain. Mock’s company, AE2S, was involved in the preparation of land-use and infrastructure data before the project was publicly revealed, as can be seen on Slide 12 of the city’s pitch deck for the project. It is not known for certain how Mock would vote on the project, but it is proper for her to abstain on the basis of conflicts of interests and good ethics. However, there are other potential future conflicts of interest on the council not discussed or considered as exclusionary by the council. Kyle Kvamme is employed by ICON Architectural Group, a regional commercial project design firm headquartered in Grand Forks. Kvamme is the Director of Community Engagement and Project Development. He also recently became an owner in the firm. ICON is an obvious potential beneficiary of such a massive development as Fufeng’s, being a prominent local firm specializing in the design of buildings and layouts for large-scope projects. Bret Weber, who has been one of the most supportive voices on the council for the Fufeng project, is employed by the University of North Dakota as Department Chair and Professor of Social Work. Also employed by UND is Danny Weigel, who is the Investigations Commander and Public Information Officer for the UND Police force. Both have disclaimed any conflicts of interest. However, neither has disclosed that Fufeng USA is a tenant of the UND Center for Innovation, the university’s on-campus “entrepreneurial incubator”. Nor has Weigel shared if he has conducted any background checks on Fufeng Group or its representatives prior to them establishing occupancy in campus facilities. It is currently unknown if Fufeng USA is simply paying rent for part of the Center’s co-working office space in order to have a local presence, or if the company is a more integrated user of Center resources, such as the wet lab. The Center touts the wet lab as such: “High tech, bioscience, and scientific companies are all welcome at the UND Center for Innovation. Our state of the art wet lab makes innovations happen.” Given that Fufeng USA is, fundamentally, a biotech company that must cultivate and maintain various strains of bacteria to manufacture amino acids, it is not unreasonable to assume that the company has been, or will be, a major stakeholder in the Center. As the university already financially benefits from Fufeng’s presence in Grand Forks, the full scope of UND’s interest in current and future projects involving Fufeng should be disclosed. So, too, should it be considered a potential conflict of interest for university employees to vote as city council members on favorable considerations for a company that is an active revenue stream for the entity that cuts their paychecks. The obvious rebuttal of “it’s a drop in the bucket in the university’s overall revenue stream” is beside the point, and frankly, is an inappropriate attitude for a public official to hold. Just as with the city utilizing a disgraced former general to help gain Department of Defense approval for the project, or Weber indicating in the March 7th city council meeting that he feels public concerns about the project’s impact to national security are overblown, it seems that a number of city officials involved with this project are willing to excuse impropriety and ethical lapses as the cost of doing business with Chinese companies. Fufeng USA and Its Parent Companies Have No Known Connection to Forced Labor or Human Rights Crimes In China This is the murkiest and most troubling of all the accusations Fortis Analysis and other groups have leveled against Fufeng, yet has been hand-waived away by project proponents as unfounded innuendo because the firm has not been sanctioned specifically by U.S. authorities. But like most of the complex issues involved with this project, such casual dismissals betray a malignant ignorance of how and why sanctions law functions as it does in our nation. Fortunately for the Grand Forks city officials, we are here to provide accurate and detailed information that can help those officials make informed decisions in line with their sworn duty to their offices. The United States takes very seriously the issue of China’s human rights abuses, particularly in the Xinjiang Uyghur Autonomous Region of western China. In fact, the devastating suppression of non-Han ethnic groups in Xinjiang has been so intense that on 13 July 2021, the U.S. State Department issued its “Xinjiang Supply Chain Business Advisory”, with the summary reading as such: The People’s Republic of China (PRC) government continues to carry out genocide and crimes against humanity against Uyghurs and members of other ethnic and religious minority groups in the Xinjiang Uyghur Autonomous Region (Xinjiang), China. The PRC’s crimes against humanity include imprisonment, torture, rape, forced sterilization, and persecution, including through forced labor and the imposition of draconian restrictions on freedom of religion or belief, freedom of expression, and freedom of movement. Businesses, individuals, and other persons, including but not limited to investors, consultants, labor brokers, academic institutions, and research service providers (hereafter “businesses and individuals”) with potential exposure to or connection with operations, supply chains, or laborers from the Xinjiang-region, should be aware of the significant reputational, economic, and legal risks of involvement with entities or individuals in or linked to Xinjiang that engage in human rights abuses, including but not limited to forced labor and intrusive surveillance. Given the severity and extent of these abuses, including widespread, state-sponsored forced labor and intrusive surveillance taking place amid ongoing genocide and crimes against humanity in Xinjiang, businesses and individuals that do not exit supply chains, ventures, and/or investments connected to Xinjiang could run a high risk of violating U.S. law. Potential legal risks include: violation of statutes criminalizing forced labor including knowingly benefitting from participation in a venture, while knowing or in reckless disregard of the fact that the venture has engaged in forced labor; sanctions violations if dealing with designated persons; export control violations; and violation of the prohibition of importations of goods produced in whole or in part with forced labor or convict labor. Now, given how adept Chinese companies are at masking their participation in, or benefit derived in part from, these evil activities, the U.S. will utilize a standard called “rebuttable presumption” when investigating abuses and issuing sanctions under the Uyghur Forced Labor Prevention Act and future similar laws. What this means is that a company accused of connection to human rights abuses in Xinjiang (or other provinces) in China are treated by U.S. authorities as essentially being guilty until proven innocent. Importantly, this does not just mean that the company in question is directly employing forced laborers. Any company that uses raw materials, goods, or labor at any point in its supply chain where forced labor is involved is considered just as guilty of the abuse - a presumption of illegal benefit that extends to every single subsidiary, wherever it may be located. As just one example of the new risk to American stakeholders from this expanded enforcement against China’s human rights abuse, Fufeng Group lists in its annual report that coal is the primary energy feedstock for its corn mills in China. Coal is one of the sectors most heavily targeted for enforcement and sanctions due to Chinese coal mining companies making extensive use of forced labor to keep production costs low. Fufeng Group specifically notes that it strategically locates its facilities close to coal-fired power plants, and that such practice is “instrumental in strengthening the Group’s pricing power.” Even more so than coal, Fufeng consumes corn at enormous rates. Thus, it makes sense that Fufeng tends to locate its operations not only close to coal power production, but also major agriculture regions. Here, too, Fufeng should be assumed to benefit substantially from lower raw material prices derived from the involvement of forced labor. In Heilongjiang province, Fufeng’s subsidiary Qiqihar Fufeng is located less than 50 miles from the sprawling Liusan Prison farm, managed by the Communist Party Committee Deputy Secretary of Liusan. Only a few miles further southwest from Liusan inside Inner Mongolia, there are numerous other farms at Wutaqi, Ulan, and the notorious Bao’anzhao Prison. Hulunbeier Northeast Fufeng Biotechnologies is located approximately 200 miles from the large prison farm at “Genghis Kahn Ranch” in Zalantun City. One of Fufeng’s largest plants, Neimenggu Fufeng Biotechnologies, is located in Hohhot City in Inner Mongolia. The entire administrative apparatus for the corporation that sells forced prison labor goods to Chinese and international consumers is called Inner Mongolia Hengzheng Industrial Group Co., Ltd., and also happens to be located in Hohhot City. As of October 2019, the company was run by Xu Hongguang, a CCP member and the Deputy Director of the Ministry of Justice of the Inner Mongolia Autonomous Region. Among the company’s primary goods produced in the prisons and sold to companies in China are grains, processed agriculture commodities, and food ingredients. Notably, the company was sanctioned by the United States in October of 2020 for use of forced labor in manufacturing stevia sweetener, which like Fufeng’s products, are a derivative of biological processing. [Edit, 21 March 2022 - The original comment that stevia sweetener is a derivative of corn processing is not correct. The author has corrected the article.] It would require an absurd leap of faith to state that Fufeng has no plausible connections to, or benefit from, the expansive use of forced labor in agriculture production so logistically close to Fufeng’s major corn- and coal-consuming plants in Xingang, Heilongjiang, and Inner Mongolia. Should an investigation be raised by Commerce, State, or Treasury into the activities of any Fufeng Group subsidiary in connection to forced labor, it is highly likely that Fufeng would be unable to satisfy the rebuttable presumption of participation in the forced labor and abusive regimes in place in China. This would trigger automatic sanctions not only against Fufeng Group in China, but also their international subsidiaries such as First Biotech and Fufeng USA. Such sanctions would make it impossible for banks to lend to any of the affected entities in the United States or conduct normal business operations, shutting down the entire project in Grand Forks and invalidating the letter of credit the city proclaims as providing a no-risk guarantee to local taxpayers the city has not wasted money chasing a pot of gold at the end of the CCP’s genocidal rainbow. This Is Not the End As one can see, there is not much more that needs to be said about the Fufeng Group’s bid to purchase 370 acres of land in Grand Forks and build its wet corn mill. Nearly every single major talking point used by city officials and Fufeng USA is provably false or shaded with just enough truth to pass scrutiny of low-information voters. This is how it works when one chooses to do business with CCP-aligned entities who deliberately target local and state officials to circumvent the United States’ federal national security countermeasures. The officials, craving a big win to build their next campaign on, or perhaps finding some compelling self-interest in the economic aspects of the project, suspend all good sense and dive headfirst into extreme legal and moral hazard at the expense of their communities, their state, and their nation. Grand Forks Mayor Brandon Bochenski, City Council president Dana Sande, and their grasping enablers have (to this point) made the choice to do just that. And at least for now, we know that the most powerful weapon in the CCP’s gray zone war against the United States is not hypersonic missiles, cyberespionage, or theft of intellectual property. It’s 30 pieces of silver wrapped in a box of false promises to our elected officials. Addendum A number of Grand Forks residents and concerned stakeholders around the nation have expressed to this author their alarm and despair at the ease with which the Chinese Communist Party continues to corrupt and undermine the United States. That it all feels hopeless, and that our collapse as a nation is both certain and imminent. I will share this, then - Winston Churchill’s words to the Harrow School on 29 October 1941, in the midst of the darkest hours of Great Britain’s seemingly hopeless defense against the mighty Nazi war machine. “…Never give in, never give in, never, never, never, never - in nothing, great or small, large or petty - never give in except to convictions of honour and good sense. Never yield to force; never yield to the apparently overwhelming might of the enemy… Do not let us speak of darker days: let us speak rather of sterner days. These are not dark days; these are great days - the greatest days our country has ever lived; and we must all thank God that we have been allowed, each of us according to our stations, to play a part in making these days memorable in the history of our race.” Dum spiro spero. Subscribe to Human Terrain Tyler Durden Fri, 03/25/2022 - 23:00.....»»

Category: dealsSource: nytMar 25th, 2022

How a well-meaning tech solution for Ukraine almost became a "Craigslist for pedophiles"

How UkraineTakeShelter earned the ire of the Internet. A family is seen boarding a train in Ukraine that's heading west into Poland on March 10, 2022.Alan Chin for Insider UkraineTakeShelter aimed to connect refugees from Ukraine with individuals who could house them.  It attracted criticism for lax security procedures. One data security expert called it 'Craigslist for pedophiles.' Here's how the scandal played out, according to the site's creator Avi Schiffman.  Avi Schiffman first decided he needed to do something about the crisis in Ukraine on February 28 while attending a protest in San Diego's Balboa Park. The 19-year-old student had studied at Harvard but dropped out. Schiffman, who was in town to visit a friend, was among hundreds of people protesting Russian president Vladimir Putin's invasion of Ukraine four days earlier, but felt powerless by simply protesting.Instead, he felt the need to act. He had developed a following on social media after building one of the first and largest coronavirus tracking websites in January 2020 while a high school senior. The site, claims Schiffman, has hundreds of millions of users. And he had similarly lofty goals for the Ukraine situation."I thought I could do something more global to help hundreds of millions of people around eastern and western Europe, rather than just a few hundred people in San Diego," he says. He returned to the home he was staying in that night and researched the situation more. He saw millions of refugees were fleeing Ukraine "and ending up in neighboring countries like Poland, Moldova, Germany et cetera." (Germany does not border Ukraine.) He also investigated how Ukrainian refugees were seeking shelter when they arrived in those countries, including a network of ad hoc Facebook groups, and found it lacking. "I felt what was in place for those refugees to find available hosts was just not going to scale to millions and millions of refugees," he says.He came up with the concept that would eventually become UkraineTakeShelter, but initially decided he was too busy to do it. Yet the worry niggled at him. Later that night, he couldn't sleep, so tweeted a message saying it would be a "cool idea" to launch a site matching Ukrainian refugees to hosts. Within an hour, he tweeted again to say he was developing it.Within a few hours he had sketched out the basic structure of the website, then called his friend from Harvard, Marco Burstein, a web developer. "We didn't sleep for like three days," Schiffman says. "We did nothing except work on this website." UkraineTakeShelter launched on March 2. Schiffman tweeted about the site, He emailed more than 150 Ukrainian and Polish news outlets, and messaged the admins of various Facebook pages set up to support refugees. Only one replied.So Schiffman turned to the US media that had covered his Covid tracking website. Finally, things took off. The initial coverage was largely positive: 'Harvard student launches a website to help connect refugees seeking a home with those who can provide it'. But the reality was more complicated.Among data security researchers and academics who work on refugee issues, there was more skepticism and people wondered if Schiffman, while well-intentioned, was in over his head. On social media, threads appeared that pointed out the site for its lax attitude to vetting potential hosts, and alleged breaches of European data protection law. Schiffman claims he's resolved some of those issues by talking to those who posted the critiques. "I've been in contact with a lot of the critics, such as Kasia — I don't know how to pronounce her name — Chojecka and Bill Fitzgerald and a few others, like Maciej Kawecki," whose name Schiffman also struggled to pronounce. "I've had amazing conversations with all of them," he says. "I'm listening to the responses, and I took action."Aboard a train from Lviv, Ukraine, onto Poland on March 10, 2022.Alan Chin for InsiderYet the development of the site belies a naivety that can be dangerous. "We like the idea of a simple fix for things that we don't fully understand," Angelika Strohmayer, senior lecturer at Northumbria University, UK, whose research focuses on supporting marginalized individuals, tells Insider. "And if we don't fully understand them, we think they're easy to fix. If it were so easy to solve refugee crises as an app connecting individual people, we wouldn't have multiple refugee crises across the world right now."Daragh O Brien, the managing director of Irish data protection consultancy Castlebridge, and data management lecturer at University College Dublin's Sutherland School of Law, says his reaction was "horrified." "I described it to my university class as Craigslist for pedophiles," O Brien says. "That's what they've created — without any vetting. All they have in terms of verification is that they know it's a real person, not a spoof profile. You do not know that the person is safe."O Brien, who has decades of experience working with NGOs, child protection agencies, and dealing with survivors of sexual abuse, admires their eagerness, but worries it could cause more harm than good. "I'm not dissing or dismissing the human motive of wanting to help, and to bring skills to the table to help," he says. "But you need to understand the problem you are solving first otherwise you will just make things worse."Schiffman thinks that people have got his intentions behind UkraineTakeShelter wrong. "I'm not making any money off this website at all," he says. "In fact, I'm massively losing money working on the website." He also, unprompted, says the site wasn't designed to gain media attention for himself. As for what he got wrong? "Look, I definitely agree I should have had a better verification system in place at the start," he says. "But the way I see it is, it's better late than never to add these features."When asked about the security concerns by Insider, Schiffman explained the methods he deployed to prevent hackers taking down the website, including working with cybersecurity experts. He explained, to a technology journalist of a decade's standing, about DDoS protection, "which is a very common hack you may have heard of." He also introduced anti-bot and anti-spam mechanisms to the site. But while Schiffman was preoccupied with trolls and spam listings, those with expertise in the field were worried more about whether vulnerable individuals fleeing their country were safe to use the site, and whether the people offering shelter were people who wouldn't exploit their vulnerability. A mother arrives with her children from Ukraine at Przemysl railway station in Poland on March 16, 2022.Nicolas Economou/NurPhoto via Getty ImagesWhen asked about whether he had contacted NGOs that specialize in refugee resettlement, Schiffman says "It's very hard to get the attention of those major groups." Instead, he talked to admins of Facebook pages running informal resettlement schemes.Schiffman admits that some of the criticism about safeguarding issues is well-placed. "For sure, when I launched this website, there should have been more systems in place for verifying hosts," he says. "The goal of the website was really to make it scalable to millions and millions of refugees. And it's a hard balance between safety and security, while also efficiency and scale, of course."He's since implemented more identity verification systems, which run criminal background checks, and verifying users with photographs that are cross-checked against official databases. "All that kind of stuff is really expensive on the server side, and it's not something I could afford at the start." Schiffman estimates he's spent $10,000 of his own money setting up the site and integrating security checks. "I just realized it's such a drastic need, but it has been something I've been working on. I just wanted to get it out as soon as possible," he says. "So I'm figuring out a lot of these concerns."'Move fast and break things'The missteps that some have pointed out in Schiffman's creation of UkraineTakeShelter have played out before when tech and the humanitarian sectors combine, says Reem Talhouk, who studies how technology and international development interconnect. "It really stems from the notion of Silicon Valley, and that we can design technologies out of things and out of crises," says Talhouk, vice chancellor's research fellow at Northumbria University, UK. "That narrative has been propagated by extensive funding and investment and hackathons in Ivy League universities for students to address migration or refugee issues." Harvard held their first-of-its-kind refugee hackathon in response to the Syrian Civil War in 2016.Schiffman says that the Harvard connection has been used to unfairly malign him and his efforts. "People are so obsessed with shitting on Harvard," he says. "But I'm not even a student there." (The UkraineTakeShelter website says it "was developed by two Harvard students.") Schiffman, who had been studying neuroscience and philosophy, says he dropped out because of the cost — $54,768 for the tuition alone — and because of its "structured environment." He's currently taking time off in Barcelona, Spain, while he decides whether to return. Burstein is still at Harvard, and deep into midterms, Schiffman says.Yet Talhouk has real-world experience of students emailing her after receiving funding for a project at a hackathon that they subsequently realize replicates pre-existing technology — or that ends up being harder than they expect — asking her to help. A Ukrainian child is seen crying in his mother's arms as they arrive at the transit point of Palanca, Moldova, on March 12, 2022Matteo Placucci/NurPhoto via Getty Images"There's an element of propagating the narrative that anyone who has a technology background can design a technology that works to address the crisis, or the issue," she says. "And this does combine with the white savior complex and all that comes mixed into that to result in these things happening and propagating themselves."O Brien points out that the startup mentality of "move fast and break things" doesn't work when talking about human beings. "There's middle class exceptionalism, tech bro exceptionalism, and American exceptionalism," he says.He says a similar dynamic was at work when Elon Musk decided independently to build a submarine to try and rescue a Thai soccer team trapped in a cave in 2018, rather than supporting the ongoing rescue efforts on the ground. (The submarine was delivered, but was deemed wholly unsuitable by rescuers and called a PR stunt; Musk subsequently called one of the rescuers "pedo guy" for daring to criticize his efforts.)"This is not a situation where you build the aircraft while you're flying," O Brien says. "This is not a situation where you launch something that is half-baked. This is a situation where you pick up the phone and ask your local branch of the Red Cross: 'Can you put us in contact with someone who is dealing with this?' So you understand what the requirements are."Those who have experience supporting displaced and marginalized individuals still think there was a better solution from the start. "As a tech worker, if you want to help, give money to organizations that know what they're doing," says Strohmayer. "Give your skills to organizations who need them. You don't need to work on your own passion project. In crisis situations, we need things that work quickly."Schiffman says he can "definitely" see why the critics threw brickbats at the site. "I honestly was just trying to move fast and get this website out there as soon as possible," he says. "And overall, like 99% of people are good." By the end of March, he aims to completely overhaul the platform so that none of the current listings on the platform will be there. "Hopefully by the end of the month, I'll just be lifting from housing platforms and verified NGOs," he says. "Instead of trying to be like Airbnb, the way the platform currently is, it is moving to be more like Kayak. And that's going great."Read the original article on Business Insider.....»»

Category: smallbizSource: nytMar 25th, 2022

Verizon (VZ) Enables Fleet Management Migration to AWS Cloud

Amazon's AWS will help Verizon's (VZ) Verizon Connect Reveal users enjoy extended wireless network coverage, higher bandwidth and lower latency. Verizon Communications Inc. VZ recently collaborated with Amazon Web Services, Inc. (“AWS”) to fully migrate its fleet management software platform – Verizon Connect Reveal – to the cloud service subsidiary of Amazon.com, Inc. AMZN. This is likely to deliver a better experience to customers and help business enterprises use connected data for driver safety and sustainability.Verizon Connect Reveal offers customizable GPS fleet management software to effectively track vehicle locations and driver behavior like speeding, idling and harsh driving to improve fleet operations. This, in turn, helps reduce costs for vehicle maintenance and fuel consumption while improving dispatch, routing and visibility by proactively allocating resources for optimum utilization.Fleet operators had historically utilized 3G devices to track vehicles that often failed to provide precise data in remote locations that lacked extensive network coverage. By migrating to 4G and cloud networks, fleet operators will be able to identify accurate location data for faster routing facilities by deploying the closest vehicle to customers. With the Verizon Connect Reveal app, which is exclusively available in the 4G network, customers will benefit from a new High-Fidelity Tracking feature. This asset tracking software offers a three-fold jump in the frequency of real-time vehicle location updates on the Live Map, thereby providing higher visibility of project-critical equipment.Amazon’s AWS will help Verizon Connect Reveal users enjoy extended wireless network coverage, higher bandwidth and lower latency. AWS has created a niche market in the cloud computing domain with a mix of infrastructure-as-a-service and packaged software-as-a-service offerings. The firms will work in unison to fast-track a seamless transition for customers to the cloud. The strategic partnership is also likely to standardize and optimize applications within the AWS environments to help enterprises accelerate innovation, reduce risks and improve efficiency levels.With one of the most efficient wireless networks in the United States, Verizon deploys the latest 4G LTE Advanced technologies to deliver faster peak data speeds and capacity for customers, driven by customer-focused planning, disciplined engineering and constant strategic investment. The company remains focused on making necessary capital expenditures due to the expansion of 5G mmWave in new and existing markets, the densification of the 4G LTE wireless network to cater to huge traffic demands across multiple verticals and the continued deployment of the fiber infrastructure.Verizon’s 5G mobility service offers an unparalleled experience that impacts industries as diverse as public safety, health care, retail and sports. The company’s 5G network hinges on three fundamental drivers to deliver the full potential of next-generation wireless technology. These are massive spectrum holdings, particularly in the millimeter-wave bands for faster data transfer, end-to-end deep fiber resources and the ability to deploy a large number of small cells. In order to expand coverage and improve connectivity, Verizon has acquired 161MHz of mid-band spectrum in the C-Band auction for a total consideration of $45.5 billion. These airwaves offer significant bandwidth with better propagation characteristics for optimum coverage in both rural and urban areas.The company is continuing with the aggressive rollout of 5G Ultra Wideband service to expand its coverage across the country. It is also offering the best of LTE and 5G Ultrawideband facilities with the launch of On Site 5G — a transformative on-premises, private 5G network — for business enterprises. This customized solution enables firms hitherto crippled with coverage gaps, lost connectivity, fractured security, data congestion and inconsistent service quality to have a dedicated capacity with adequate bandwidth to minimize costly downtime and missed opportunities.The stock has lost 10.6% over the past year compared with the industry’s decline of 11.5%. Nevertheless, we remain impressed with the inherent growth potential of this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Image Source: Zacks Investment ResearchSome better-ranked firms within the broader industry are KVH Industries, Inc. KVHI and TESSCO Technologies Incorporated TESS.KVH Industries delivered an earnings surprise of 20%, on average, in the trailing four quarters. Despite global supply chain disruptions, KVH Industries is driving growth and margin expansion through new product introduction and subscriber migration to High-Throughput Satellites.This Zacks Rank #2 (Buy) stock aims to make decisive inroads into the still-nascent autonomous transportation markets with a strong balance sheet position and zero debt. If KVH Industries manages to effectively mitigate supply chain woes, there could be further room for cash flow expansion.TESSCO delivered an earnings surprise of 55.4%, on average, in the trailing four quarters. It carries a Zacks Rank #2. Earnings estimates for TESSCO for the current year have moved up 28.8% since March 2021.TESSCO offers products to the industry’s top manufacturers in mobile communications, Wi-Fi, wireless backhaul and related products. With more than three decades of experience, it delivers complete end-to-end solutions to the wireless industry. Investor Alert: Legal Marijuana Looking for big gains? 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Category: topSource: zacksMar 23rd, 2022

Insiders say RAINN, the nation"s foremost organization for victims of sexual assault, is in crisis over allegations of racism and sexism

22 current and former staffers said that RAINN, which has deep ties to Hollywood and corporate America, is facing an internal reckoning. Scott Berkowitz, RAINN's co-founder and CEO, began his career in politics, advising former Sen. Gary Hart's 1984 presidential campaign at just 14 years old.RAINN; Kris Connor/Getty Images; Alyssa Powell/Insider22 current and former staffers say the organization favored by Hollywood and corporate America is in crisis. 'How can RAINN be helping survivors externally, when they're traumatizing survivors and their own employees internally?'April Cisneros says the first time she was sexually assaulted at her private Christian college was in 2015, while she was playing piano in the school's conservatory. A music tutor came into the small practice room and began to touch her. The second time, one year later, she remembers waking up in a hotel room near campus after drinks with classmates. One man was forcing his hand into her pants while another ejaculated on top of her. The incidents were devastating, and further compounded by a conservative religious community that lacked empathy for her pain or a framework to understand it. "Maybe it's demons attached to you that attracted this fate," she recalls one pastor telling her. Others placed the blame on her, wondering if she set the right boundaries with men. While studying abroad at Oxford University in 2016, in an effort to get far away from what she suffered back home, Cisneros attempted to take her own life.Soon after, she Googled for help, and the website for the Rape, Abuse, and Incest National Network, or RAINN, flashed across her computer screen. RAINN, which was founded in 1994 as a nonprofit, bills itself as the nation's largest anti-sexual-violence organization, operating a 24-hour hotline for victims and pushing for state and federal policies to punish sex offenders and support survivors. It has deep ties to corporate America and Hollywood, partnering with Google and TikTok and media like "I May Destroy You" and "Promising Young Woman," both of which center on sexual assault. (Insider itself utilizes RAINN's hotline; our publishing system automatically appends a referral link to RAINN at the bottom of every story about sexual assault.) In 2019, it reported nearly $16 million in revenue. It says its programs have helped 3.8 million people, and 301,455 people called its hotlines last year.The organization was a beacon in a difficult time, and Cisneros soon threw herself into supporting it. She cycled 1,500 miles across the country for a fundraising drive; later, after the Trump administration rolled back Title IX protections for campus-sexual-assault victims, she decided to get involved more directly. April Cisneros biked across the US to raise money for RAINN.April Cisneros"I was so angry," Cisneros told Insider. "I just remember thinking, 'Well, why don't I just, like, go try to be a part of the solution?'" She began working for RAINN in 2018 as a communications associate.But she soon discovered that it looked very different from the inside. Instead of the supportive, inclusive victims' advocacy organization that offered her hope in the depths of her depression, Cisneros found herself in a demoralizing workplace overrun by what she described as racism and sexism. She recalled that during the filming of a video about survivors' stories, her boss asked a participant to smile while recounting a sexual assault. "If you don't," Cisneros remembered her boss saying, "it'll look like you have a bitch face."Cisneros is among 22 current and former RAINN staffers who spoke to Insider and described a roiling crisis over race and gender in the over-200-person-strong nonprofit. These people described a culture in which a routine training was beset by racist caricaturing, executives ignored employees' requests for change, and people who were deemed political risks — including sexual-assault survivors — were silenced. According to these accounts, in one instance, a supervisor badgered an employee during the time she took off to recover from an abortion. In another, an Asian staffer was replaced on a project with a white man after their boss deemed him a better fit because of his race and gender. One staffer sent a resignation letter, obtained by Insider, in which she bemoaned "toxic managerial behavioral patterns" and worried that "young employees like myself, many of them survivors themselves, are currently being treated like their rights at work do not matter, like their comfort and security and health at work doesn't matter, like the skills they bring to work are worthless."RAINN declined to make its founder and president, Scott Berkowitz, available for an interview. In a statement, the group said it had made great strides in diversifying its workplace and addressing the concerns of its employees of color. It accused the current and former staffers who came forward to Insider of providing "incomplete, misleading, and defamatory" information about "a handful of long-outdated and disproven allegations.""RAINN is proud of the work our committed staff do, day in and day out, to support survivors of sexual violence," the statement read. "As an organization, we owe it to our committed staff to provide a work environment where they feel safe, appreciated, and heard … Over the last several years, like most organizations, RAINN has worked to expand and implement comprehensive Diversity, Equity, and Inclusion policies and goals. We regularly update staff on our progress toward achieving those goals, and solicit feedback on potential areas of improvement. While there is always room to build on our efforts, we are continually working to foster an open dialogue between employees and leadership to ensure ideas and concerns can be heard and addressed."RAINN hired Clare Locke LLP, a boutique libel law firm that has gained a reputation for representing clients facing #MeToo allegations, including Matt Lauer and the former CBS News executive Jeffrey Fager, to respond to Insider's inquiries. During Supreme Court Justice Brett Kavanaugh's confirmation hearing, the firm's cofounder Libby Locke came to his defense, writing: "No wonder Judge Kavanaugh is angry. Any man falsely accused of sexual assault would be."When Insider asked RAINN whether Clare Locke's work was consistent with the organization's mission and values, the firm's partner Thomas Clare emailed a statement attributed to RAINN: "Given your questions contained outright lies about RAINN and our staff, and publication of those claims is potentially defamatory, we hired defamation counsel. We recognize we have a right to legal representation, and our attorneys have helped us disprove your ridiculous and libelous allegations."Some RAINN employees fear that the corporate dysfunction has poisoned the work of the largest sexual-violence organization in the country, which they continue to view as crucial, despite their own experiences. "How can RAINN be helping survivors externally when they're traumatizing survivors and their own employees internally?" Cisneros said.How RAINN became Hollywood and corporate America's go-to partner Through savvy marketing and hard work, RAINN has become to sexual assault what Planned Parenthood is to reproductive health: the premier, full-service resource for people struggling with a crisis and the ultimate destination for donations to help people who have been victimized.The global embrace of the #MeToo movement, and the contemporary focus on the depth and pervasiveness of sexual assault, has further aided RAINN's ascension. Companies in crisis often turn to the organization to telegraph their commitment to social responsibility. After dozens of women sued Lyft, claiming they were assaulted by its drivers, the company worked with RAINN to roll out extensive safety initiatives and contributed $1.5 million to its coffers.Hollywood has also embraced the organization. RAINN was cofounded by the Grammy-nominated singer-songwriter Tori Amos, who promoted the organization's hotline at her concerts and sat on its advisory board. In 2018, Timotheé Chalamet pledged his earnings from Woody Allen's "A Rainy Day in New York" to groups including RAINN, as did Ben Affleck from productions affiliated with Harvey Weinstein. Christina Ricci, a star of Showtime's breakout hit "Yellowjackets," has served as an official spokesperson since 2007, and the platinum-selling pop artist Taylor Swift has donated to the organization, something it publicized from its social-media accounts.—RAINN (@RAINN) April 8, 2021 But Berkowitz has largely stayed out of the public eye. He began his career as a political wunderkind, advising Sen. Gary Hart's 1984 presidential campaign at just 14 years old. A profile in his grandparents' hometown newspaper in Pennsylvania said he was personally responsible for collecting $100,000 in donations for Hart — a feat achieved in between classes at American University, where he was already a sophomore. After graduation, Berkowitz continued to work in and around politics. His experience in the field, he said in a 2019 interview with RAINN, taught him about the "extent of the problem" of sexual violence in the United States and the opportunity to fill this "service gap.""I knew next to nothing about the issue," Berkowitz said. "It just seemed like a good idea." Christina Ricci has been a RAINN spokeswoman since 2007.Michael Kovac/WireImage/Getty ImagesEarly on, Berkowitz ran the day-to-day operations, and his early fundraising prowess served him well. After a series of sexual assaults at the infamous Woodstock '99 festival, promoters and record labels did damage control by giving RAINN 1% of the proceeds from the festival's CD and video releases. "In raw self-interest, the money and attention that would come from it would allow RAINN to promote the hotline better, provide more counseling, print more brochures," Berkowitz told the Village Voice. RAINN's budget swelled in tandem with its brand. Total revenue rocketed from more than $1.2 million in 2009 to nearly $16 million in 2019. Berkowitz's compensation grew from $168,000 to over $481,000 over the same period. Even though RAINN's tax returns list Berkowitz as its president and indicate that he was paid nearly a half a million dollars in the year ending in May 2020, RAINN says that he is not in fact an employee and does not receive a salary. Instead, for reasons that RAINN did not explain, he is paid through A&I Publishing, a company solely owned by Berkowitz that contracts with RAINN. "Scott Berkowitz is paid solely as an independent contractor through A&I Publishing and does not receive any salary or benefits," it said. "He has never received any employee compensation from RAINN."RAINN's tax records tell a slightly different story. The group has reported paying a total of $561,500 in consulting fees for "strategic and financial oversight" to A&I Publishing from 2001 to 2006, during which time Berkowitz drew no salary from RAINN. Since 2007, though, RAINN has reported directly paying Berkowitz a total of $3,529,000. (RAINN says he "is recused from all board consideration of his compensation.")Over the same period, RAINN also began reporting payments to A&I to service $288,000 in debt that it owed the consultancy at 5% interest. RAINN's tax records don't reflect that the organization ever received any cash from A&I; instead, the loan is described in its 2006 tax return as "issuance of debt for prior year services." RAINN says the loan, which has been repaid, stems from "deferred payment for fees" that RAINN owed A&I "for a number of years."'How does an organization like RAINN make such an egregious mistake?'With the Woodstock '99 deal, Berkowitz struck on a highly successful strategy — corporate penance — and he would often return to it. But he also looked to the public sector for funding opportunities.One of RAINN's largest sources of revenue — $2 million a year — is its contract to run the Department of Defense's Safe Helpline, which offers confidential, anonymous counseling to members of the military who have been affected by sexual violence. Multiple staffers who spoke with Insider said Berkowitz was exceedingly sensitive about maintaining the contract. They said that he had gone to great lengths to stay in the Department of Defense's good graces and that they believe RAINN has at times been overly deferential to its interests. Michael Wiedenhoeft-Wilder in February 2022.Evan Jenkins for InsiderMichael Wiedenhoeft-Wilder, a former flight attendant and roller-rink operator who previously served in the Navy as a medic, said that in 1982, just months after he enlisted, a Navy physician raped him. The doctor, who outranked Wiedenhoeft-Wilder, threatened him with prison time if he came forward. Wiedenhoeft-Wilder said it was the first of multiple sexual assaults he suffered, all of which resulted in a diagnosis of complex post-traumatic stress disorder.Wiedenhoeft-Wilder stayed silent about the assault for nearly 30 years. He became depressed and experienced paranoid suspicions that the government was spying on him, ready to silence him if he ever told the truth about his assault.But decades of therapy empowered Wiedenhoeft-Wilder to eventually come forward. He discovered the Safe Helpline, which then led him to RAINN's Speakers Bureau, a roster of more than 4,000 volunteer survivors who share their stories with the media, student groups, and other organizations. When Wiedenhoeft-Wilder signed up with the bureau, his story was selected for publication on RAINN's website. In October 2019, he worked with April Cisneros, who helped manage the Speakers Bureau, to prepare the story.But the story was abruptly killed. Cisneros said Berkowitz decided to pull Wiedenhoeft-Wilder's account once he realized that it involved an officer assaulting an enlisted man."Once we actually wrote up his story, Scott was like, 'No, we're not even getting into this,'" Cisneros told Insider, adding that Berkowitz refused to send the story to the Department of Defense for review, as it routinely did with accounts of military sexual assault. Cisneros said Berkowitz told members of the communications team that promoting the testimony of a man who had been assaulted by one of his superiors could harm the military's reputation and upset the Department of Defense. Cisneros told Insider she believed that Berkowitz did not want to risk losing the government's funding.Wiedenhoeft-Wilder was shocked. He had spent time with Cisneros revisiting the details of an assault that haunted him for 30 years, all for nothing."I've spent the last several days trying to deal with the devastating news that the article about my military sexual trauma being canceled for someone else," he told Cisneros in an email on October 31 that Insider reviewed. "How does an organization like RAINN make such an egregious mistake? Do you have any idea how this mistake has affected me? It's absolutely devastating. Just one more failure for me.""I feel victimized all over again," he wrote. "What did I ever do to you people to deserve this!"Cisneros, worried about Wiedenhoeft-Wilder's mental health, forwarded the exchange to Berkowitz and Keeli Sorensen, then the vice president of victim services, she said. "Maybe you just tell him you made a mistake," Cisneros recalled Sorensen telling her. She felt Sorensen's suggestion was, in effect, to "[fall] on my sword for RAINN."Cisneros told Insider that she told Wiedenhoeft-Wilder a lie about a scheduling conflict and blamed the mix-up entirely on herself. Wiedenhoeft-Wilder didn't believe her. "I know she wasn't telling me the truth," he told Insider. "I knew it wasn't her fault. It was a really weird, very strange thing to do to someone."Cisneros was heartbroken. She felt that she'd betrayed Wiedenhoeft-Wilder's trust and was distressed because she felt an anti-sexual-violence organization had asked her to deceive a rape victim. "What's so sad is people treat him like he's so paranoid about being silenced by the military, but that paranoia is at least … legitimate," Cisneros said. "And it happened again at RAINN."Sorensen denied having any involvement in the incident and said she was "not authorized in any way to instruct Ms. Cisneros in this matter," adding that Berkowitz had "total authority" with respect to the publication of Wiedenhoeft-Wilder's story. She said she did not know why Berkowitz pulled the testimony."I had no part in the matter," Sorensen said, "but it's my recollection, based on my conversation with Ms. Cisneros, that she had promised Mr. Wiedenhoeft-Wilder that she would publish their story before having secured final approval from Mr. Berkowitz."RAINN also said that if Cisneros had promised Wiedenhoeft-Wilder a spot on its website, it had "no knowledge of that and she was not authorized to make that commitment."Cisneros disputed that. She said that she provided Berkowitz with details of Wiedenhoeft-Wilder's story before reaching out and that he approved. "Scott gave me the greenlight to move ahead with the process if [Wiedenhoeft-Wilder] expressed interest," Cisneros said."We have no recollection as to why this survivor's story did not run in the fall of 2019," RAINN said, adding that some isolated quotes from Wiedenhoeft-Wilder's interview — stripped of their military context — were shared on RAINN's social-media accounts. The statement pointed to other stories from survivors of sexual assault in the military that RAINN had published; none of those featured scenarios in which an attacker outranked their victim.Evan Jenkins for Insider"We are not aware of the Department of Defense expressing concern over RAINN's coverage of military survivors," RAINN said, "nor is it standard practice for RAINN to consult with [the department] regarding the material and resources it publishes unless they directly mention Safe Helpline. RAINN frequently publishes the stories of military survivors and will continue to do so as it works to carry out the organization's mission to eradicate sexual violence from every corner of society."Anxiety around RAINN's relationship with the Department of Defense came up again in 2019. Six former staffers said one RAINN employee felt compelled to frantically retract public comments she had made in support of Black trans victims of violence amid the Trump administration's efforts to expel trans people from the military. The woman suddenly and mysteriously departed the organization on the day her remarks were published.(The woman's identity is known to Insider, which is not naming her because doing so may expose her to professional harm. The woman declined to comment for the record.) On March 7, 2019, to mark International Women's Day, the employee was one of "8 everyday women" featured by The Lily, a women-focused website published by The Washington Post. The Lily post listed the woman's age, background, position at RAINN, and responses to a questionnaire about her favorite fast-food chains and movies. But she came to fear that her seemingly uncontroversial answer to one question could become a professional liability.InsiderThe answer came a few months after the Trump-era transgender military ban went into effect, reanimating debates over trans rights. Two sources told Insider that the woman told them that RAINN's leadership expressed alarm over her contribution to the article and was frustrated that the woman had spoken to the media without getting consent from leadership.One source told Insider that Jodi Omear, then RAINN's vice president of communications, said minutes after reading the article that it was "too controversial" and that she worried it "could jeopardize our contract with the Department of Defense." The source said Omear escalated the article to Berkowitz and the human-resources director, Claudia Kolmer, because she was confident they would feel the same.Omear told Insider that because the former staffer had been under her supervision, it would be "inappropriate" to comment on her exit from the organization.On the day the questionnaire was published, the woman called the reporter at The Lily who'd conducted the interview and asked her to remove the reference to RAINN, as well as her comments about trans people, according to four sources familiar with the situation. The writer agreed. Insider viewed an original version of the interview that contained the employee's affiliation and comments about trans rights; the version currently published online does not.Two former employees said the woman was escorted out of the office by human resources the day the story was published. RAINN said that "it is standard practice that an employee separating from the organization is accompanied by a RAINN human resources representative when leaving the premises in order to collect their office keys, security fob and other credentials," adding that it "reached a separation agreement" with the woman a week after the story was published.One staffer who sat near her described the woman as a "fabulous" employee who was heavily invested in the projects they were set to work on together."It was one of the reasons why it was so shocking," the staffer said. "Like, where'd she go?"In its statement, RAINN claimed that the woman's remarks were an unauthorized attempt to speak on behalf of the Pentagon. "[The RAINN staffer] spoke with a Washington Post reporter on-the-record, on behalf of RAINN and the Department of Defense Safe Helpline, which she was not authorized to do," the statement said. "Contractually RAINN is barred from speaking on behalf of the Department of Defense or Safe Helpline." The Lily billed the interview as an opportunity to "step inside the lives of 8 everyday women." Aside from identifying her employer and job description — a format applied to other women featured in the post — the woman's interview did not touch on RAINN or the Department of Defense. Instead, she answered questions about her favorite body part and what she would change about her upbringing if she could.Still, RAINN said, the woman broke the rules: "The issue at hand centered around a clear violation of RAINN policy. RAINN supports all transgender survivors and has worked to remove the barriers to reporting sexual violence in LGBTQ communities, and to elevate the stories of transgender survivors, particularly for transgender persons of color for whom sexual violence is all too prevalent."Asked why, if that were the case, the woman would ask The Lily specifically to remove her comments about trans victims, RAINN said it was "unaware of any evidence indicating [the woman] was pressured to retract or remove" the comments. "RAINN is always mindful of honoring its contractual obligations not to speak on behalf of the DoD and the Safe Helpline," it said. "The fact someone commented on other subject matter or issues was irrelevant."A white male staffer was deemed a better fitJackii Wang joined RAINN's public-policy team in 2019, hopeful that she could use her experience working in national congressional offices to advance legislation that would help sexual-assault survivors. But she said her boss, RAINN's vice president of public policy, Camille Cooper, instead saddled her with administrative responsibilities like writing greeting cards. Wang said Cooper regularly discounted her ideas and "berated" her when they disagreed on issues the younger staffer considered minor. It became "psychologically terrifying," Wang said. Wang didn't immediately view that as discriminatory — multiple staffers said many of Cooper's employees complained of similar treatment. But during a performance review in December 2019, Wang said, Cooper attempted to explain her perception of Wang as defiant by rattling off stereotypes that Wang felt were "very targeted towards my Asian identity.""Camille asked me questions like, you know, 'Is your family very strict?' 'Do they expect perfectionism from you?' ... 'What was your childhood like?' Do I have problems with authority because of my family background?" Wang told Insider. What started as an implication became explicit, Wang said, when Cooper announced she would pull Wang off a lobbying assignment.Jackii WangDaniel Diasgranados for InsiderAt the time, RAINN was working on a Florida bill that would close a loophole in the state's statute of limitations for teen survivors. Cooper called Wang and another staffer into her office and told the two women she had decided to send a white male colleague in Wang's place, Wang said. Wang asked why."And she was like, 'Well, you know, because he's a white male,'" Wang recalled.Wang was mortified. While she had experience working with Florida legislators, her male colleague wasn't even registered to lobby in the state. Wang and the other staffer said Cooper argued that he would connect better with white conservatives in the state."He can talk about baseball. He can really, like, connect with these men," Cooper said, according to Wang and the other staffer present. "And these men really hate women.""Her reasoning for picking a white man over me for the project is that he'll be received better," Wang said. "But if that's the logic that she's following, then, like, I guess I shouldn't work anywhere because white men are received better everywhere."Neither Cooper nor the man responded to requests for comment.Wang said she reported the incident to Kolmer, the human-resources director, and Berkowitz in March 2020, along with a detailed recounting of other complaints about Cooper's leadership. But Wang said Kolmer never took serious action. When Wang quit that June, she sent Berkowitz a blistering resignation letter. "As you know, she has harassed and bullied every single person on our team, including an intern, and has blatantly discriminated against me," Wang wrote.Berkowitz thanked Wang for her time and for informing him, and asked Kolmer to discuss the issues Wang raised. Cooper continues to serve as a vice president, the face of RAINN's policy arm.RAINN said that Wang was too junior a staffer to lead a statewide lobbying effort and called her claims of discrimination "false and defamatory.""RAINN took Wang's allegations seriously and investigated the matter thoroughly," the statement said. "Ultimately it was determined that the basis of Wang's claims of discrimination were unfounded."RAINN did not deny Wang's claim that Cooper told her a white man would connect better with conservative legislators.Cooper wasn't the only executive to receive complaints. One current staffer and one former staffer described a meeting in which Jessica Leslie, the vice president of victim services, defended Berkowitz's unwillingness to address the concerns of staffers of color."You have to understand where he's coming from," they remember Leslie saying. "I mean, he's a white man, and you're all people of color — like, he's really nervous around you."One of the staffers was furious. "We just wanted to have a conversation. We're not about to berate the man," she told Insider. "This is not true," RAINN said. Its statement said that at a Safe Helpline shift managers meeting, a group of managers asked Leslie if Berkowitz would meet with them. When Leslie asked them to craft an agenda first, RAINN said, the shift managers asked Leslie if Berkowitz wanted an agenda because he was "uncomfortable talking to women of color." "The shift managers created this narrative," RAINN said, "not Leslie."Through an attorney, Leslie said she agreed with RAINN's responses and called the allegations against her "demonstrably baseless."A racist training, a pay disparity, and an email uprisingStaffers of color told Insider that they were often underpaid compared with their white counterparts; one, a nonwhite Latina woman who asked to remain anonymous, said she made $35,000 a year and lived in public housing to keep her head above water. After she quit for a higher-paying opportunity, RAINN filled her job with a white staffer who earned roughly $20,000 more, Cisneros said, adding that the white staffer disclosed her salary. (Three additional sources with knowledge of her salary corroborated Cisneros' account.) RAINN said the salary discrepancy was a result of both the role being "restructured" to include "significantly more responsibility" and the fact that the white staffer had an advanced degree.Four current and former RAINN staffers recalled that after RAINN's white office manager left for a new job, her replacement, a Black woman named Valinshia Walker, was asked to perform janitorial tasks that were not in her predecessor's job description — including scrubbing floors on her hands and knees, washing dishes, and disinfecting conference rooms. "Let me be very clear: [Walker's predecessor] never washed dishes from the sink. Ever," one former staffer said. "Val? You would come in, and Ms. Walker was cleaning the conference room. Like, wiping down all the tables. Spraying down the chairs. Doing the kitchen, she's washing dishes from the sink … You would see her walking around with the mask on and gloves because she literally cleaned. Like a cleaning lady."Walker declined to comment for the record. "The beliefs of your sources are simply not true," RAINN said, adding that Walker was hired as the "office coordinator," which had a different set of responsibilities than the "office manager" she replaced. "Maintaining a clean office has always fallen under the responsibilities of the HR and admin staff as a whole, this includes the office manager and office coordinator," the statement said. "We are not aware of any instances where Walker was asked to handle cleaning responsibilities beyond those that were part of the office coordinator's regular duties."Staffers also recalled what became a notorious and hamfisted mandatory sexual-harassment training in early 2020 led by an outside employment attorney hired by RAINN. According to more than a dozen employees, the attorney used a series of racist stereotypes to illustrate examples during the training."So let's just say, you know, there's Nicki [Minaj] and Cardi B are employees, and they're at their desks, and they start twerking," Cisneros recalled the lawyer saying. "Is that inappropriate workplace behavior?"At one point, Cisneros said, the lawyer proposed a hypothetical scenario in which a Latino-coded man — participants recalled his name was "Jorgé" or "José"—  kissed a coworker. The lawyer asked if the behavior could be appropriate "because this is Latino culture." "Your information regarding this training is inaccurate," RAINN said. "The examples in this legal training were all past legal cases using fictitious names." It added that staff concerns "were immediately addressed and the training was subsequently modified based on their feedback."Sarcia Adkins, a shift manager for the Department of Defense Safe Helpline who attended the training, was furious. She wrote an email to multiple executives, including Sorensen, Kolmer, and Berkowitz, on March 5 demanding action from the organization. "I wanted to get up and walk out at various points and it was one of the more traumatic experiences I've had at RAINN as a woman of color," she wrote. Kolmer acknowledged her complaints and promised to meet with Adkins alongside Berkowitz and Sorensen to discuss changes to the training and her issues with the nonprofit's culture.Adkins said that Kolmer didn't follow up that March but that Sorensen did reach out to schedule a one-on-one meeting. RAINN said Adkins agreed to meet Sorensen but "did not show up, without notification or explanation," and "did not follow up after she skipped the meeting." Several months later, after a former colleague intervened, Adkins did meet with Berkowitz and Sorensen. Adkins told Insider she was underwhelmed. "They pick what they want you to talk about," she said.The dysfunction came to a head during the summer of 2020, after the murder of George Floyd sparked a series of bitter internal conversations about RAINN's track record on race. In June 2020, Berkowitz sent an email with the subject line "A Note to the RAINN Family" to the entire staff. In it, he acknowledged the unrest and pledged to support the company's Black staffers.Sarcia Adkins replied to the email with a list of demands and copied the entire organization. She asked for mandatory cultural-competency training and a commitment to hiring Black employees for leadership positions. (RAINN says that 43% of its top seven staffers are people of color.) Adkins — who has been with RAINN since 2014 — asked Berkowitz why he hadn't reached out following the deaths of Freddie Gray, Sandra Bland, Philando Castile, and dozens of other victims of police violence."RAINN has never been a place [that] acknowledges or uplifts their black staff, not just people of color, and the injustices we face in the world and within the structure of RAINN," Adkins wrote.Following the police killing of George Floyd in 2020, Scott Berkowitz sent an email to staffers acknowledging the resulting unrest and pledging to support the company's Black staffers. But employees at RAINN began responding en masse, including one person who asked why a similar message was not sent after other police killings of Black people.Provided to InsiderIn 2021, in response to the outrage over the George Floyd email, the organization began internally releasing draft proposals on diversity, equity, and inclusion with goals the organization planned to achieve or had already accomplished. The laundry list of objectives, which Insider reviewed, included a plan to "develop new relationships to ensure a diverse pool of internal and external candidates for all open positions" and "collect more data to identify the causes of turnover."But people working in the organization say little has been achieved, or even attempted."Hiring practices are not getting better," said a current RAINN staffer, who asked to remain anonymous for fear of retaliation. "There's been no management training. Turnover is horrendous." In its statement, RAINN recounted the diversity, equity, and inclusion efforts it began implementing in 2021, including "expanded recruiting," "revised exit interviews," and "researched training on DEI-related issues.""The summer of 2020 sparked important cultural conversations in companies and organizations across the United States, RAINN among them," the statement said. "As we've seen nationwide, there is more work to be done. Over the past two years, RAINN worked with experts and garnered input from staff to develop and implement Diversity, Equity, and Inclusion policies and goals … Changes implemented to date include increasing diversity within senior management to better reflect our staff diversity and the people we serve, implementing an anonymous third-party ethics hotline where employees can voice concerns without fear of reprisal, offering expanded professional development and internal promotion opportunities, and increasing health and mental health benefits for employees, the four top priorities identified by staff."As evidence of its success in addressing the concerns of its employees of color, RAINN provided Insider an email that Aniyah Carter, a staffer on the Department of Defense Safe Helpline, wrote to the vice president of communications, Heather Drevna, in June 2020. Carter, who is Black, had been one of the most outspoken staffers demanding change at RAINN after Berkowitz's George Floyd email fiasco. When Drevna sent a follow-up email to staff announcing an employee survey and more personal and sick days, Carter replied with a note of thanks."I just want to personally thank you and the senior team for this," she wrote. "It's one thing to listen to and hear us. It's another thing to take action. I am proud of the responses of my colleagues and I am grateful for the swift action from leadership. It is my sincere hope that we continue to make a necessary shift in the right direction. Please let me know if there is any way I can be of assistance."Scott Berkowitz at the "Tina The Tina Turner Musical" Cocktail Reception, co-hosted by Anna Wintour in support of RAINN, on January 31, 2020.Tiffany Sage/BFA/ReutersWhen Insider asked Carter about the email, she said any movement in the right direction quickly stalled."They sent an email and that was it," Carter told Insider. "So my 'sincere hope' was crushed. It's so insulting for me. When this first happened and you were optimistic and gave us the benefit of the doubt, you say it here," she said, mocking RAINN's use of her email. "And it's like, OK, but two years later here we still are. And I've mentioned how I'm frustrated, but you're going to take words from two years ago feeling optimistic about the future and spin it as if that applies to today? Seriously? That was very upsetting because it makes me feel like this is more about optics than, like, how your staff really feels."'OK, well, who's gonna do the press clips?'When April Cisneros arrived at RAINN, she began working for Jodi Omear. Cisneros said she quickly ran up against Omear's domineering management style, which often seemed dismissive of and belittling to other women. Besides the "bitch face" comment, Cisneros said, Omear joked about how office dress codes could reduce the risk of sexual assault by preventing people from wearing provacative outfits. "I understand we're not supposed to blame the victim," Cisneros recalled Omear saying, "but, like, what do you expect to happen if you're in a dimly lit room and people of the opposite sex [are] wearing pants with holes in them?" Omear did not deny making either comment but told Insider that when training people who lacked experience with on-camera work, she directed them to "over-exaggerate facial expressions." She also said she "advocated for casual professional attire across the organization."Cisneros' low point at RAINN occurred in January 2019, when she unexpectedly became pregnant. She decided to take a sick day to visit a doctor. She told Insider she informed Omear the day before and outlined when her unfinished work would be completed.Omear became angry, Cisneros said, demanding to know why she didn't give more notice and insisting on further details. Omear called Cisneros at 9 p.m. demanding answers. Cisneros broke down and told her boss about the surprise pregnancy. According to Cisneros, Omear replied, "OK, well, who's gonna do the press clips?"The next day, as Cisneros met with her doctor, her phone buzzed with calls and texts from Omear. Between the stress of an unplanned pregnancy and Omear's incessant check-ins, Cisneros said, she "started bawling" under the stress.  A day later, Cisneros received a prescription for a two-day medical abortion. She requested an extra day off to recover, but Omear continued to pester her, texting and calling Cisneros for updates on RAINN's monthly marketing report. Cisneros said she finished the report from home while waiting for the bleeding to die down. (A RAINN staffer who was familiar with the incident corroborated Cisneros' version of events.)Omear told Insider that it would be "inappropriate" to comment on Cisneros specifically and did not directly answer a series of questions about Cisneros' allegations. "In general, when working with communications staff, especially in a fast-paced environment on such an important issue, it is/was important to ensure that other team members were able to cover assignments to meet any potential deadlines and organizational needs," she said in an emailed statement.RAINN said that it "was not aware of this incident happening in real time" and that it "supports employees taking time off and does not support managers encroaching on sick time."Omear's conduct was the final straw for Cisneros, and she wrote to human resources to complain. Cisneros said Claudia Kolmer told her in a meeting that the conflict "was a big misunderstanding" and that she should have come clean about her pregnancy sooner. (RAINN said that Kolmer told Cisneros that different managers have different preferences about how they should be notified of sick time and that "Cisneros was never asked to share sensitive personal or medical information.")Dissatisfied, Cisneros unloaded on Omear to Kolmer, accusing her boss of making inappropriate complaints about the loud breathing of a colleague who used a wheelchair and the habit of another colleague, who was blind, of walking into Omear's office by mistake, Cisneros said. (Another former RAINN employee corroborated the complaints to Insider.) Cisneros also said she told Kolmer that Omear made lewd remarks about the attractiveness of a sexual-assault victim set to make a public-service announcement. Omear denied making the lewd comments. She also denied complaining about disabled colleagues but said that she did recall "thanking one of my staff for helping" a blind colleague "when she couldn't find her way around the office."Cisneros rallied the entire RAINN communications department to put together a detailed list of other allegations of inappropriate behavior by Omear, which she collected in a memo for Kolmer and Berkowitz.Omear left RAINN that July, ostensibly to launch her own communications consulting firm. But Cisneros said Berkowitz told her that he had pushed Omear out in response to Cisneros' efforts. "We want you to know we're letting her spin her own story," Cisneros said Berkowitz told her. "But this is a direct result of the conversation you all have with us."The experience nonetheless angered staffers. Cisneros left RAINN the next year.Another colleague, Martha Durkee-Neuman, wrote a scathing resignation letter shortly after Omear announced her exit, addressing it to Omear, Berkowitz, and Kolmer."Jodi leaving of her own accord with no accountability is not justice," Durkee-Neuman wrote, according to a copy of the letter obtained by Insider. "It is not justice for the countless people that she has fired or driven from RAINN. It is not justice to pretend that nothing has happened, that staff were not forced to go to HR over and over and over until something was finally done." "I do not believe any of this work of justice or restoration will happen at RAINN, so unfortunately, this is no longer the right organization for me," she added."After the communications team raised concerns [about Omear] with Claudia Kolmer," RAINN said, "RAINN worked swiftly and diligently to investigate the staff's complaints. RAINN took appropriate action to address the findings of that investigation and Omear separated with RAINN shortly thereafter."Martha Durkee-Neuman's resignation letter.Martha Durkee-Neuman'What is left?' On November 19, 2021, Kyle Rittenhouse was acquitted of charges related to the shooting deaths of two people at a civil-rights rally in Kenosha, Wisconsin. Some time later, Leslie, then the interim vice president of RAINN's victim-services department, addressed the organization's Black staffers. "I am deeply saddened by the pain and violence that has continued to plague our Black neighbors and communities," she wrote. "I want to recognize how this may be affecting you, as you navigate your day and the work you do at RAINN." She then touted the racial diversity of the victim-services department.Nearly 18 months had passed since the organization sent around its email about the death of George Floyd. Despite various promises and initiatives, in the eyes of many staffers, little had changed. But here it was again, another email promising to listen to staffers of color. Employees were enraged.Aniyah Carter, the Safe Helpline worker whose email RAINN provided to Insider, reminded her boss that nearly two weeks had passed since the verdict. "By now, we have already had to check in with ourselves so that we can continue our day-to-day lives," she wrote. "And while the opportunity to check in with managers is still absolutely available (and encouraged), the reminder to do so would have been more beneficial if it occurred when this took place." Carter also highlighted the gap she saw between leadership's stated commitment to diversity, equity, and inclusion and its on-the-ground support of its employees of color, a sentiment echoed by other staffers who spoke to Insider.Daniel Diasgranados for InsiderFor Cisneros, the repeated failure of the organization to address the concerns of its staff speaks to something darker, and she is worried about how the culture at RAINN is affecting its ability to help abuse survivors."If church can't help, if school can't help, if the police can't help, if the hospital can't help, if my family can't help, my friends can't help — and now this nonprofit that is specifically saying that it's here to help people like me can't help?" she said."Like, what is left?"Read the original article on Business Insider.....»»

Category: topSource: businessinsiderFeb 25th, 2022

Summit Midstream Partners, LP Reports Fourth Quarter and Full Year 2021 Financial and Operating Results & Provides Full Year 2022 Guidance

HOUSTON, Feb. 25, 2022 /PRNewswire/ -- Summit Midstream Partners, LP (NYSE:SMLP) ("Summit", "SMLP" or the "Partnership") announced today its financial and operating results for the three months ended December 31, 2021, including net loss of $16.2 million, adjusted EBITDA of $54.7 million and DCF of $29.9 million.  Operated natural gas throughput from wholly owned assets averaged 1,307 million cubic feet per day ("MMcf/d") and liquids throughput averaged 62 thousand barrels per day ("Mbbl/d").  Operated natural gas volumes from wholly owned assets decreased 2.0% relative to the third quarter of 2021, largely due to natural production declines, which was partially offset by volumes from 25 new wells that were turned-in-line primarily towards the latter half of the fourth quarter, including four new Utica wells that were connected in the Northeast segment in late November with initial production of nearly 100 MMcf/d.  Fourth quarter 2021 liquids volume decreased modestly relative to the third quarter of 2021, primarily as a result of natural production declines, partially offset by crude volumes gathered from 16 new Williston wells that were turned-in-line in November and December of 2021. Heath Deneke, President, Chief Executive Officer and Chairman, commented, "Summit's fourth quarter financial and operating results were in-line with our expectations.  For full year 2021, adjusted EBITDA of $238 million was near the top of our $225 million to $240 million revised guidance range and almost $20 million above the midpoint of our initial guidance.  In 2021, we spent $25 million on capital expenditures, which was towards the low end of our $20 million to $35 million guidance range.  Well connect activity from our upstream customers during the fourth quarter of 2021 represented a significant increase versus the first three quarters of 2021, with 45 of the 95 wells turned-in-line behind our systems during the last quarter of the year.  We also successfully placed the Double E Pipeline in-service during the fourth quarter of 2021.  Double E is a very important new pipeline system for the northern Delaware Basin, with the initial capacity to transport an incremental 1.35 Bcf/d of natural gas from growing production in Eddy and Lea counties, New Mexico to multiple Gulf Coast oriented pipelines originating out of Waha, TX.  The pipeline is anchored by 1.0 Bcf/d of long term take-or-pay contracts from some of the largest producers in the Permian Basin and is well positioned for a highly efficient expansion to 2.0 Bcf/d as production continues to increase in the region. We are very proud of the team for delivering this important project on time, approximately 20% below the original $500 million budget, all while maintaining an outstanding safety, environmental and compliance record.  We expect Double E to be a significant growth catalyst for Summit as our initial 1.0 Bcf/d of sculpted take-or-pay contracts ramp up between 2022 and 2024 and as we secure new contracts from Northern Delaware customers that need incremental gas takeaway capacity." "As previously announced, we also achieved a critical milestone for Summit during the fourth quarter with the successful refinancing of our 2022 debt maturities which provided an extended, multi-year runaway to continue our focus on maximizing free cash flow and further de-levering the balance sheet.  During the quarter, we also launched a cash-less preferred for common equity exchange transaction which closed in January of 2022, whereby holders of nearly $95 million of our Series A Preferred Equity, including accrued and unpaid distributions, exchanged into approximately 2.9 million SMLP common units.  This transaction enabled Summit to continue its efforts to simplify and improve the balance sheet by further reducing our outstanding fixed capital obligations while preserving cash for debt repayment.  The transaction also eliminated nearly $17 million of unpaid preferred distributions that have accrued on the balance sheet since June of 2020, while reducing the remaining amount of Series A Preferred Equity to which distributions are expected to continue to accrue by more than half.  Additionally, with the reduction in the face value of the remaining Series A Preferred Equity to a level below $100 million, SMLP is now able to issue or assume a separate class of parity preferred equity, which further enhances our strategic and financial flexibility as we continue to evaluate long-term value enhancing opportunities in the future." "Our 2022 guidance includes an adjusted EBITDA range of $195 million to $220 million based on approximately 75 to 110 new well connections.  Given the current commodity price environment and the momentum in activity that we experienced in the second half of 2021, we are disappointed and frankly surprised by the limited amount of new wells that our customers' most recent plans are indicating will be turned on-line behind our systems in 2022.  As a point of reference, between 2017 and 2019, we averaged over 260 new well connects per year at a time when Henry Hub prices averaged below $3.00 MMbtu and WTI averaged below $60 per barrel.  At current strip pricing levels, we believe that nearly all of the remaining inventory behind our gas and crude systems would be economic to develop.  Furthermore, through a combination of industry consolidation and capital discipline, our customers have significantly improved their balance sheets and financial capability to responsibly increase development activity on the high-quality acreage behind our systems as economic conditions warrant.  While our current 2022 guidance levels do not indicate the beginning of the U-shape recovery that we have been anticipating, we continue to expect that drilling activity behind our systems will increase as our customers gain further confidence that the fundamentals underlying the current commodity price outlook will hold in the future. Last year is a good example of how customer plans can change throughout the year. Initially we expected approximately 60 new wells based on customer plans as of February 2021, and by the end of the second quarter, those plans increased to approximately 95 new wells, which was a key driver for increasing our 2021 guidance range in June of last year. Similar to last year, we plan to provide updated 2022 guidance if we expect the outlook to be materially different than our initial guidance range.  In the meantime, we will continue to focus on maximizing free cash flow and reducing debt, providing safe, efficient and reliable operations for our customers and a positive and safe work environment for our employees." New Business Segments As previously announced, during the fourth quarter of 2021 we implemented changes to our reportable segments.  The new segment reporting resulted from changes enacted to optimize commercial efforts and our geographic workforce in order to better align our commercial, engineering and operational capabilities.  The five reportable segments we will utilize going forward are described below, along with a management categorization of the commodity that has the most influence on customer drilling and completion decisions: Natural gas price driven: Our cash flows in the Northeast, Piceance and Barnett segments are significantly influenced by the price of natural gas because the drilling, completion and recompletion decisions by our customers in these segments are based on well economics most heavily impacted by the price of natural gas and natural gas liquids. Increased upstream activity by our customers in these basins therefore result in higher throughput and cash flows for those segments in which we collect fees for gathering natural gas or natural gas liquids. Northeast – Includes our wholly owned midstream assets located in the Utica and Marcellus shale plays and our equity method investment in Ohio Gathering that is focused on the Utica Shale Piceance – Includes our wholly owned midstream assets located in the Piceance Basin Barnett – Includes our wholly owned midstream assets located in the Barnett Shale Oil price driven: Customer activity and our cash flows in the Permian and Rockies segments are significantly influenced by the price of oil because the drilling and completion decisions by our customers in these segments are based on well economics most heavily impacted by the price of oil. Decisions to drill and complete wells in these basins therefore result in higher throughput and cash flows for our midstream assets in which we collect fees for gathering or processing hydrocarbons, gathering produced water, or transporting natural gas. Permian – Includes our wholly owned midstream assets located in the Permian Basin and our equity method investment in the Double E Pipeline Rockies – Includes our wholly owned midstream assets located in the Williston Basin and the DJ Basin A comparison of prior and current reportable segments is listed in the table below for illustrative purposes. Prior Reportable Segment(s) New Reportable Segment Utica Shale, Ohio Gathering, Marcellus Shale Northeast Piceance Basin Piceance Barnett Shale Barnett Permian Basin, Double E (new) Permian Williston Basin, DJ Basin Rockies 2022 Guidance SMLP is releasing guidance for 2022, which is summarized in the table below.  These projections are subject to risks and uncertainties as described in the "Forward-Looking Statements" section at the end of the release. We have taken a similar approach to our 2022 guidance range that we did with our 2021 guidance range. If our producer customers hit their production targets and upper end of planned well connects, as they did in 2021, we would expect to be near the high end of our 2022 guidance range.  We believe the midpoint of our guidance range reflects a conservative, yet appropriate, level of risking to the most recent drill schedules and volume forecasts provided by our customers.  ($ in millions) 2022 Guidance Range Low High Well Connections Average (2017 - 2019) Northeast (includes OGC) 61 31 44 Piceance 50 17 17 Barnett 9 4 11 Permian 8 4 6 Rockies 134 20 30 Total 262 76 108 Natural Gas Throughput (MMcf/d) Northeast (excludes OGC) 636 700 Piceance 299 303 Barnett 188 200 Permian (excludes Double E) 17 32 Rockies 32 35 Total 1,172 1,270 Rockies Liquids Throughput (Mbbl/d) 60 63 OGC Natural Gas Throughput (MMcf/d, gross) 602 681 Double E Natural Gas Throughput (MMcf/d, gross) 195 265 Adjusted EBITDA Northeast $68 $77 Piceance 60 63 Barnett 26 28 Permian 18 25 Rockies 53 57 Unallocated G&A, Other (30) (30) Total $195 $220 Capital Expenditures Growth $10 $20 Maintenance $10 $15 Total $20 $35 Investment in Double E equity method investee $10 $10 We expect approximately 75 to 110 well connections in 2022, which remains significantly below pre-COVID levels averaging 262 well connections per year from 2017 through 2019 in a less favorable commodity price environment. The current commodity price environment should support increasing development activity and we believe if prices remain strong, we will begin to see producers increase activity behind our systems. We continue to see producers drill longer laterals, with several 2022 well connections expected to have 15,000' laterals, which helps mitigate the impact of limited well connections. We are encouraged by the level of activity we expect in the Barnett and Piceance, as customers in these areas take advantage of the favorable commodity price environment. Of our expected 2022 well connections, 34 wells are either online, DUCs or have a rig present. The remaining new wells expected in our 2022 forecast are permitted and have been recently affirmed by our customers. We expect our wholly owned natural gas gathering system throughput to range from approximately 1,172 MMcf/d to 1,270 MMcf/d, as compared to 1,356 MMcf/d in 2021. The year-over-year expected decline is primarily due to natural production declines and limited expected well connections in the Northeast, Permian and Rockies. OGC gross volume throughput is expected to range from approximately 602 MMcf/d to 681 MMcf/d, as compared to 526 MMcf/d in 2021, representing over 20% year-over-year growth at the mid-point. With the commercial operation of Double E commencing in November 2021, we expect Double E throughput to increase throughout the course of 2022, with average annual gross throughput ranging from approximately 195 MMcf/d to 265 MMcf/d. Given nearly 90 active rigs in New Mexico, we are optimistic about overall volume growth in the basin and the potential for additional firm take-or-pay contracts. Double E benefits from existing take-or-pay contracts of 585 MMcf/d currently, contractually increasing to 810 MMcf/d beginning in November 2022, 985 MMcf/d beginning in November 2023 and 1.0 Bcf/d beginning in November 2024, leaving only 350 MMcf/d of remaining long-term capacity on the pipeline before an expansion is required. Liquids volumes are expected to remain relatively flat year-over-year, ranging from 60 Mbbl/d to 63 Mbbl/d, despite no well connections from certain key customers to whom we provide both crude oil and produced water gathering services. Adjusted EBITDA is expected to range from $195 million to $220 million, a decrease from 2021 primarily due to limited drilling and completion activity, an approximately $12 million reduction in MVC shortfall payments that expired in 2021, $7 million in energy management and COVID-19 related tax credits in 2021 and approximately $5 million of one-time operating expenses expected in 2022. We are optimistic that we will find ways to mitigate the increasing pressure of inflation on our operating costs and believe that the approximately $5 million of expected one-time operating expenses in 2022 will mitigate operating expenses beginning in 2023. Our 2022 capital expenditure guidance of $20 million to $35 million, excluding Double E, is presented on a gross basis and does not include asset sales or capital reimbursements related to specific development projects with certain customers.  We do expect to continue to monetize latent inventory, or other underutilized assets, which is not reflected in our financial guidance. In 2021, we sold approximately $8 million of such assets and have sold approximately $2 million to date in 2022. Our full year 2022 growth capex guidance range of $10 million to $20 million, excluding Double E, is dependent on new well connect activity and is expected to be directed towards new pad connections in our Northeast and Rockies segments. All other expected well connections are either on existing pad sites, or will be delivered to our gathering systems.  We also expect that the vast majority, if not all, of the remaining $10 million investment in Double E will be funded with cash-on-hand at our unrestricted subsidiaries, or through Double E distributions generated from operations.   We expect approximately $10 million to $15 million of maintenance capex, an increase relative to our 2021 maintenance capex of $8 million, primarily due to approximately $6 million of expected one-time capital expenditures related to certain asset integrity initiatives and modifications to assets for emission reductions. In 2022, we expect to generate cash flow after interest expense, capital expenditures, investments in Double E and other cash expenditures of $65 million to $85 million, which we plan to utilize to further reduce our indebtedness. Fourth Quarter 2021 Business Highlights In the fourth quarter of 2021, SMLP's average daily natural gas throughput for its wholly owned operated systems decreased by 2.0% to 1,307 MMcf/d, and liquids volumes decreased by 1.6% to 62 Mbbl/d, relative to the third quarter of 2021.  In November 2021, Double E Pipeline commenced operations and began transporting residue gas from the Northern Delaware Basin to the Waha hub in Texas, resulting in an average of 124 MMcf/d of gross volumes transported since commissioning and approximately $1.9 million of adjusted EBITDA net to SMLP for the fourth quarter of 2021.  SMLP's customers are currently operating four drilling rigs on acreage behind SMLP's gathering systems, and there are approximately 34 new wells that were already connected to the system, have been drilled or are currently under development. Natural gas price driven segments: Natural gas price driven segments had combined quarterly segment adjusted EBITDA of $45.1 million and combined capital expenditures of $5.1 million in the fourth quarter of 2021. Northeast segment adjusted EBITDA totaled $19.0 million, an 8.2% decrease relative to the third quarter of 2021 driven by natural production declines of approximately 35 MMcf/d behind our SMU system, partially offset by 16 new wells, of which the majority were connected during the second half of the fourth quarter of 2021. These new well connects included a new four well pad behind our SMU system, as well as four well connects behind our Mountaineer system in the Marcellus shale. The new four well pad behind the SMU system was connected in late November 2021 and averaged 96 MMcf/d while online, or approximately 75 MMcf/d for the fourth quarter of 2021. The Northeast segment has 15 wells that are either online, have been drilled, or are under development, which represents 48% of the midpoint for Northeast segment well connects in our 2022 guidance. Piceance segment adjusted EBITDA of $15.9 million decreased by 16.1% from the third quarter of 2021, primarily due to the expiration of an MVC at the end of September 2021 that contributed $3.4 million of adjusted EBITDA to the segment in the third quarter of 2021 and natural production declines, partially offset by volumes from 9 new wells that were connected during the quarter by one of our larger customers. These 9 wells represented the first new wells connected to our Piceance system since the third quarter of 2018 and contributed approximately 9.1 MMcf/d while online, averaging 7.6 MMcf/d for the fourth quarter of 2021. Based on its 2022 capital program, this same customer is planning to connect 17 wells, which have all been permitted towards the middle to latter part of 2022. This customer also has plans for another 74 wells behind our system in the 2023 to 2024 timeframe and has entered into a capital reimbursement agreement with SMLP so that planning activities for those well connections can be undertaken. Barnett segment adjusted EBITDA of $10.2 million increased by 5.7% from the third quarter of 2021, primarily due to a 21 MMcf/d increase in volume throughput driven by continued strong performance from the 7 wells that were turned-in-line in September of 2021. These wells continue to be some of the largest natural gas wells ever drilled in the Barnett Shale and averaged 47 MMcf/d during the fourth quarter of 2021. The low end of our 2022 guidance range includes four new well connects, of which all have been drilled. Oil price driven segments Oil price driven segments generated $17.5 million of combined segment adjusted EBITDA in the fourth quarter of 2021 and had combined capital expenditures of $8.1 million. Permian segment EBITDA totaled $2.6 million in the fourth quarter of 2021, a $2.0 million increase relative to the third quarter of 2021 primarily due to the commencement of operations at Double E in mid-November 2021. Double E is an equity method investment, so the Permian segment is allocated SMLP's proportionate share of Double E EBITDA. There were no new wells connected behind the Permian gathering and processing system during the fourth quarter of 2021 and the 4 well pad that was expected to come online in December 2021 was delayed until 2022. In 2022, we currently expect limited activity behind our Permian gathering and processing system from our existing customers and for the majority of adjusted EBITDA for the segment to come from offloads and our proportionate share of Double E. Rockies segment EBITDA of $14.9 million decreased by 20.4% from the prior quarter primarily due to a one-time $1.8 million benefit from the settlement of a legal matter in the third quarter of 2021. In the Williston Basin, 16 new wells were connected to our crude gathering infrastructure; however, all of these wells were connected in November and December, resulting in limited impact to fourth quarter of 2021 performance. The Rockies segment has 11 wells that are either online, have been drilled or are under development, which represents approximately 55% of the midpoint for Rockies segment well connects in our 2022 guidance. We currently expect limited new well connect activity in the DJ Basin from our existing customers in 2022, but may benefit from additional volumes related to an offload agreement we are actively negotiating. The following table presents average daily throughput by reportable segment for the periods indicated: Three Months Ended December 31, Year Ended December 31, 2021 2020 2021 2020 Average daily throughput (MMcf/d): Northeast (2) 710 813 765 726 Rockies 34 39 35 40 Permian (2) 24 33 26 33 Piceance.....»»

Category: earningsSource: benzingaFeb 25th, 2022

Operation Plans Presented for New Comprehensive Senior Living Community in Closter, N.J.

Development and operation plans for the Residences at Reuten Park, a proposed 195-unit luxury senior-living development in Closter, were presented last week to the borough’s Zoning Board of Adjustments. Expert testimony highlighted the project’s comprehensive health and wellness offerings and user-friendly technology resources. Property owner Reuten Associates and developer Metropolis... The post Operation Plans Presented for New Comprehensive Senior Living Community in Closter, N.J. appeared first on Real Estate Weekly. Development and operation plans for the Residences at Reuten Park, a proposed 195-unit luxury senior-living development in Closter, were presented last week to the borough’s Zoning Board of Adjustments. Expert testimony highlighted the project’s comprehensive health and wellness offerings and user-friendly technology resources. Property owner Reuten Associates and developer Metropolis Property Group are seeking a variance to transform outdated industrial buildings at Reuten Corporate Park, located at 231 and 239 Herbert Avenue, into a modern community providing a mix of independent living, assisted living and memory care. “We pride ourselves in improving the quality of life for our residents,” said Kelly Andress, founder and president of SageLife, which develops and operates congregate, independent and assisted living communities throughout the East Coast. “Regardless of the sector – whether it’s independent living, assisted living or memory care – it’s imperative that we create a space equipped with top-tier amenities, services, technologies and resources, and most importantly, a space that feels like home.” During the hearing, Andress discussed the SageLife MOSAIC programming, a wellness system that offers activities for all interests and abilities, such as arts, social engagements, exercise classes and educational courses. In addition to maintenance-free living and 24-hour nursing available on-site, the development will provide transportation services for guest use. “Our mission is to create a vibrant space where seniors within our community can thrive,” said Mike Reuten, owner and managing partner of Reuten Associates. “Throughout the development process, I’ve constantly asked myself, ‘is this a space that mom can call home?’ This project has become very personal to me for several reasons, mostly because it’s more than just a building or a structure. We’re creating an environment to which our residents, some of whom will be my family members and friends, will feel connected.” Operations plans will also include a fully functional tech ecosystem including medical, consumer and educational technology. To ensure the health and safety of residents, wearable devices that track health metrics will be available for use, and air purification systems, such as BiPolar Ionization, will be outfitted throughout the building’s interior. User-friendly devices, amenities and services like tablets, videoconferencing, IT seminars and in-house tech lessons will be available, in addition to keyless entryways and a tech concierge to assist residents with inquiries. Operation plans will also include: Infrastructure enhancements, including fiberoptic cables to maximize bandwidth and Wi-Fi throughout the community.Flexible meal plans, as well as indoor and outdoor dining venues and room service.On-site wellness staff, and physical, occupational and speech therapists.Emergency pull-cords in every unit. For more project details, follow us on Facebook at Facebook.com/ResidencesatRP. The post Operation Plans Presented for New Comprehensive Senior Living Community in Closter, N.J. appeared first on Real Estate Weekly......»»

Category: realestateSource: realestateweeklyFeb 24th, 2022

Los Angeles mayoral candidates discuss homelessness and policing during first debate as protestors shout in disapproval

Activists argued the candidates — specifically Karen Bass, Kevin De León, Mike Feuer, and Joe Buscaino — don't "represent the will of the people." The debate included Former NFL player Mel Wilson, city attorney Mike Feuer, US Representative Karen Bass, and city council members Kevin De Leon and Joe Buscaino.Keith Birmingham/MediaNews Group/Pasadena Star-News via Getty Images Five Los Angeles mayoral candidates gathered for their first televised debate on Tuesday. The topics of homelessness and policing prompted outbursts of disapproval from activists who attended. "None of you represent the will of the people," one activist shouted. Five Los Angeles mayoral candidates took the stage in their first debate on Tuesday night at Loyola Marymount University.The night was marked with six outbursts from protestors, as the candidates discussed their plans for homelessness and policing, among other topics.Mel Wilson, a former member of the LA County Metropolitan Transportation Authority Board; LA city attorney Mike Feuer; US Rep. Karen Bass; and city council members Kevin De León and Joe Buscaino were all present at the event. Rick Caruso, a billionaire mall developer, declined to participate due to scheduling conflicts, his spokesperson said.During the debate, four out of the five candidates agreed that homelessness was the top city-wide issue. Wilson argued instead that keeping people housed was the number one issue."I believe that housing is a basic human right, but I don't believe that you have a right to sleep on the streets, the sidewalks, the parks, and the beaches of LA," Wilson said.Bass said poverty is criminalized in the city, saying she doesn't "believe that poverty should be a death sentence."Buscaino, on the contrary, said he supports implementing a no-encampment city-wide law. The candidates also were in overwhelming support of expanding the number of officers budgeted in the Los Angeles Police Department, with the exception of De León, who said he'd maintain the department's current status.Bass was among those who supported expending the police budget but said there "shouldn't be guardian style policing in wealthy areas and warrior style policing in communities of color."Wilson argued that the majority of Angelenos want more police, claiming that "99% of the police officers are good.""They're hardworking," he said. "They want to come home safe that night."Buscaino, a former police officer, echoed that sentiment, adding that Los Angeles has "the finest police department in the country." Activists slammed the candidates for their responses to homelessness or policing. Activists interrupted the LA Mayoral Debate voicing disapproval of the candidates.Ricci Sergienko, People's City Council Los Angeles"Fuck you, Buscaino!" Ricci Sergienko, an activist for the grassroots organization Poor People's Campaign, said during the debate. "We don't want cops as mayor of Los Angeles, Joe!"In a statement to Insider after the event, Sergienko said "none of those candidates on stage represent the people of Los Angeles.""The People won't be quiet about this," Sergienko added, "and we aren't going anywhere."Other activists from various organizations also called out statistics about officer-involved killings in the city and homeless encampment sweeps as the audience booed and candidates laughed."KDL you represent skid row — a 70% Black community," Matyos Kidane, an activist with Stop LAPD Spying Coalition, said, referring to city councilman De León, whose district includes downtown LA where Skid Row is located. "Four to five unhoused people die in a day. How are you laughing right now?" "Your idea of public safety is contingent upon Black people like me," Kidane continued.Buscaino called the demonstrations "toxic," while Bass compared them to January 6 Capitol rioters.Gina Viola, an abolitionist community organizer also running for mayor, took to Twitter to condemn the candidates for mocking and laughing at the demonstrators."People were more concerned with the disruptions in that room. They didn't even understand that folks are not being heard. Folks are not being seen. Folks are not being listened to," Viola said. "They made jokes and they laughed on stage as each person in the audience who had something meaningful to add was escorted one-by-one out of the room."Steven Chung, an activist with J-town Action & Solidarity, told Insider in a statement that each of the candidates "fundamentally represent the same things — criminalizing houselessness, expanding the police state, and ultimately committing violence against working-class people of color in LA." The Los Angeles mayoral primary takes place on June 7. Read the original article on Business Insider.....»»

Category: topSource: businessinsiderFeb 24th, 2022

Meta Unveils "Personal Safety Bubble" After Metaverse"s Dark Side Exposed

Meta Unveils 'Personal Safety Bubble' After Metaverse's Dark Side Exposed The global internet is in the midst of a giant innovation leap that will take almost a decade to fully implement, shifting from Web 2.0 (mobile computing, the app economy, and cloud storage) to Web 3.0 (a fully decentralized online ecosystem that includes the potential for a metaverse, an immersive world that acts in parallel to the physical world). A transformation of the internet will allow for virtual worlds where people can socialize, work, and play. The metaverse is 24/7, exists in real-time, and users have individual autonomy. They experience the metaverse through virtual reality goggles, such as Meta's (formerly known as Facebook) Oculus Quest 2, which enable users to be fully immersed in a 360-degree virtual world. Goldman Sachs equity strategist Eric Sheridan said, "We are still 20 years into web 2.0 and expect the timing of web 3.0 will be similar, if not longer." Sheridan believes the metaverse will present a total addressable market of about $2.6 trillion (most bearish case) to $12.5 trillion (most bullish case) within the next 10-15 years.  With that in mind, there's no question that the metaverse will be part of our daily lives in the years ahead, and as with any new wave of computing and or technology, there's always a dark side to the story that corporate media fails to inform the public. It only took our Jan. 23 technology note titled "Dark Side Of Metaverse Exposed: Why Your Kids Need To Stay Away From VRChat" to jump-start an awareness campaign about instances of virtual child abuse, harassment, racism, and pornography on the popular VRChat service. Now new safety protocols are being introduced to prevent predators from running amok in the metaverse.  Following our lead, and weeks later, NYPost published a story of a woman who was digitally "groped" in VR platform Horizon Worlds, created by Meta. "Harassment in the metaverses is a serious issue that the industry needs to come together on to put in place the correct security controls and safety measures," 43yo Nina Jane Patel told NYPost while referring to her Medium post from Dec. 21. "This is/will continue to be problematic for both men and women (adults) as our world fast moves from the 2D internet as we know it — into the 3D internet space (The Metaverse)." Readers may recall that we cited The Dark Maze, a metaverse developer and person who has spent thousands of hours in the virtual world, warned VRChat is dangerous for children.  The Dark Maze pointed to countless instances of virtual child abuse, harassment, racism, and pornography on VRChat. They said there are instances of child exploitation and sexualization, warning VRChat is "not a place for children."  Rounding back to NYPost's story on the dark side of the metaverse, Patel said, "the more damaging lens, of course, will be on our children who will start to use the Metaverse(s) more and moreover the coming years."  And maybe that's why regulators in Russia just issued a warning about the metaverse, saying it could enable illegal activity. The Scientific-Technical Center of Roskomnadzor, the federal agency responsible for monitoring social media platforms, released a report days ago that said: "The transformation of perception on account of being located in the metaverse will have a meaningful cultural effect on society and will change social behavior, including reducing the importance of moral and ethical norms due to the use of a virtual avatar." They warn that this could particularly affect children, "the most vulnerable group in the new metaverse. We're starting to see a trend that the metaverse isn't a safe space for children. As The Dark Maze documented last month, they captured a video of what appears to be an underaged girl in a 12yo's body strip dancing for a 40yo Japanese man. They called the act "disgusting."  The Dark Maze said, "ZeroHedge was the first major news publication to document the story of a VR Developer and content creator's experience in the metaverse and tell the story of its dark side." They said mainstream media has been silent on the "horrible accounts of child grooming in the metaverse and VRChat, perhaps because their corporate sponsors are plowing billions of dollars into metaverse investments." They had an issue with the NYPost's article because "the problem in the metaverse is not a 43-year-old soccer mom getting 'virtually gang raped' but rather kids being groomed in a pedophile free for all."  Here's first-hand evidence of adults wearing skins of a toddler on VRChat. There's also evidence of pedophiles.  It just so happens after we exposed the dark side of the metaverse; Oculus released a statement on Friday indicating the addition of a "personal boundary" (think of a personal bubble) that will protect users from being virtually assaulted by others. "Personal Boundary will begin rolling out today everywhere inside of Horizon Worlds and Horizon Venues, and will by default make it feel like there is an almost 4-foot distance between your avatar and others. Over time, we'll continue to make improvements as we learn how this affects people's experiences." "A Personal Boundary prevents anyone from invading your avatar's personal space. If someone tries to enter your Personal Boundary, the system will halt their forward movement as they reach the boundary. You won't feel it—there is no haptic feedback. This builds upon our existing hand harassment measures that were already in place, where an avatar's hands would disappear if they encroached upon someone's personal space," Oculus said.  The Dark Maze questions: "Why didn't Oculus enforce these boundaries from the beginning?"  Meanwhile, not everyone is hopeful about Meta's future in the metaverse. Tech founder Phil Libin told Bussiness Insider he's been critical of the metaverse's hype. Last month, in a podcast, he said the promotion around the metaverse is comparable to propaganda from the communists as he received as a child living in the former Soviet Union. He said Meta's vision of the metaverse is an "interconnected 3D world that we experience for many hours a day, both for fun and for work primarily through VR" – "that package of things is godawful." "It's an old idea," Libin said. "It's uncreative, it's been tried many, many times over the past four decades, and it's never worked." More on Meta's future comes from Rabobank: "This week I was saying we are in a global meta-crisis…and then Facebook change its name to "Meta" – replete with a new logo that looks like a PlayStation controller, a sleep mask, or a bad sports bra. (Someone was paid a lot of money, or 'IOU Chicken', to mis-draw an infinity loop.) The aim is now "the metaverse," where promo material shows we can play poker with robot avatars in simulated zero gravity. Welcome to the second coming of Second Life, which we used for a few weeks in the early 2000s until collectively realising how pointless it was to wander around virtual landscapes of boring people pretending to blue-haired Elf ninja warriors? Perhaps fusing it with social media (cough, don't mention that function) makes it more appealing? For people unsatisfied by pre-existing 'I am a cat!' chat features, perhaps; and maybe my future client presentations will be in zero-g with robot avatars? If so, I bagsy Eeyore as my avatar. However, are ageing Facebook users really going to wear VR goggles? How will they fit over their bifocals? And for the younger crowd, there seems stiff competition from LARPing offline."  The good news from our prior report is that Oculus is finally addressing the cesspool of predators preying on kids and adults by enforcing new safety protocols. Still, the metaverse is in a primitive form, and a lot needs to be figured out to make it a safe space.  Tyler Durden Sun, 02/06/2022 - 13:30.....»»

Category: blogSource: zerohedgeFeb 6th, 2022