Thursday, March 31, 2011

HealthSpring selling new shares, stock falls on dilution concerns

HealthSpring Inc. said that it would sell 7.5 million shares to repay debt and raise capital for general corporate purposes, which may include acquisitions of similar businesses.

The Franklin-based managed care company said underwriters resold the shares for $35.95 apiece.
HealthSpring expected net proceeds of about $262 million.

Its shares closed Friday at $36.60, down $1.37 or 3.6 percent, on investor concerns about dilution.

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AirTran holders OK $1.4 billion sale to Southwest

DALLAS (AP) — AirTran Airways shareholders voted Wednesday to sell the discount airline to bigger rival Southwest for $1.4 billion.

The deal would give Southwest Airlines Co. a foothold in Atlanta — the largest U.S. city it doesn’t already serve — and routes to Mexico and the Caribbean.
AirTran Holdings Inc. said more than 98.6 percent of votes cast and 77.5 percent of all shares were voted for the sale.

Southwest still needs approval from federal antitrust regulators before it can close the deal, which it expects to do in the next three months.

The companies announced the sale last September. Southwest officials have said that rising fuel prices made it even more important to grow and boost revenue at the Dallas-based airline, which already carries more U.S. passengers than anyone.

Southwest earned $459 million on $12.1 billion in revenue last year, while AirTran earned $1.9 million on revenue of $645.5 million.

The two airlines will operate separately until the Federal Aviation Administration allows Southwest to operate them as one, which is expected by early next year.

Southwest has said it will drop AirTran’s fees for checking one or two bags and eliminate the first-class cabin on AirTran planes. The deal could lead to fewer fare sales, as the number of major U.S. airlines continues to shrink.

Southwest CEO Gary C. Kelly said this week that Southwest plans to continue service to all of AirTran’s destinations, some of which are smaller than cities on the Southwest route map. Kelly also said Southwest will keep AirTran’s smaller Boeing 717 aircraft, which would alter Southwest’s all-Boeing 737 fleet.

AirTran directors had unanimously endorsed the sale. Shareholders voted during a special meeting at an airport hotel near the company’s Orlando headquarters.
Shares of Southwest rose 10 cents to close at $12.42, while AirTran shares gained 3 cents to close at $7.35.

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Group appeals state agency's decisions on Franklin rehab hospitals

An entity whose application to build a 31-bed rehabilitation hospital in Franklin was denied by a state agency earlier this week has appealed that decision and the approval of HealthSouth Corp.’s rival 40-bed project.

Middle Tennessee Rehabilitation Hospital LLC filed the appeals within the required 15 days from the time a decision is taken by the Health Services and Development Agency.
Members of the agency, which reviews health care projects in the state, voted 5-3 to approve HealthSouth Rehabilitation Hospital of Williamson County.

Separately, a 4-4 tie in a vote on Middle Tennessee Rehabilitation meant that project didn’t receive approval.

Only one hospital could be approved based on a state analysis of health-care needs.

Middle Tennessee Rehabilitation, whose partners include medical properties developer O.B. McCoin and consultant Patricia Greenberg, wants both of its appeals reviewed together.

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U.S. home sales fell 9.6 percent in February

WASHINGTON -- Fewer Americans bought previously occupied homes in February and those who did purchased them at steep discounts.

The weak sales and rise in foreclosures pushed home prices down to their lowest level in nearly 9 years.
The National Association of Realtors said today that sales of previously occupied homes fell last month to a seasonally adjusted annual rate of 4.88 million. That's down 9.6 percent from 5.4 million in January. The pace is far below the 6 million homes a year that economists say represents a healthy market.

Nearly 40 percent of the sales last month were either foreclosures or short sales, when the seller accepts less than they owe on the mortgage.

One-third of all sales were purchased in cash -- twice the rate from a year ago. In troubled housing markets such as Las Vegas and Miami, cash deals represent about half of sales.

The median sales price fell 5.2 percent to $156,100, the lowest level since April 2002.

Millions of foreclosures have forced down home prices and more are expected this year. Tight credit has made mortgage loans tough to come by. And some potential buyers who could qualify for loans are hesitant to enter the market, worried that prices will fall further. High unemployment is also deterring buyers. Job growth, while expected to pick up this year, will not likely raise home sales to healthier levels.

New home prices are now 45 percent higher than prices for previously occupied homes. A more normal difference is about 15 percent, an indication that old homes on the market are being sold at comparatively cheap, and affordable, levels.

The number of first-time home-buyers rose to 34 percent of the market, partly because of rising rents. A more healthy level of first-time home-buyers is about 40 percent, according to the trade group.

But home prices and sales are uneven across the country. In Miami, where prices have dropped 18.6 percent since last year, sales have skyrocketed 46.4 percent over the same period. In St. Louis, where prices rose 8.2 percent over the past year, sales have fallen 8.6 percent.

One obstacle to a housing recovery is the glut of unsold homes on the market. Those numbers rose to 3.49 million units in February. It would take 8.6 months to clear them off the market at the February sales pace. Most analysts say a six-month supply represents a healthy supply of homes.

Analysts said the situation is much worse when the "shadow inventory" of homes is taken into account. These are homes that are in the early stages of the foreclosure process but have not been put on the market yet for resale.

For February, sales fell in all four regions of the country, by 12.2 percent in the Midwest, 10.2 percent in the South, 8 percent in the West and 7.2 percent in the Northeast.

Sales of single-family homes fell 9.6 percent to an annual rate of 4.25 million units. Sales of condominiums fell 10 percent to a rate of 630,000 units.

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Borders to close more bookstores, including West End location

The West End location of Borders will close by late May, according to a new list of store closings released late Thursday by Borders Group Inc.

The company filed for bankruptcy last month and announced the closing of 200 stores nationwide, including the Cool Springs Borders superstore in Tennessee.


The new list of closings includes an additional 28 locations not previously announced. The West End Borders, located at 2525 West End Avenue, is among the new locations expected to close. Borders now plans to close a total of 228 of its 642 U.S. stores.

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FCC Commissioner Robert McDowell in Nashville next week

Federal Communications Commissioner Robert M. McDowell will speak at Lipscomb University’s Shamblin Theatre next week during a one-on-one discussion with former FCC Commissioner Deborah Taylor Tate.

The discussion is expected to cover latest political developments in digital technology, the legal issues surrounding cybersecurity, online safety for children, net neutrality and broadband expansion.
“While we must allow and encourage the unleashing of exciting new ways to communicate here and around the world, we must also educate and empower our citizens – but especially our children – to be safe, responsible online citizens,” McDowell said.

The event at 7 p.m. March 31 is free and open to the public. It will be the first in a four-part series, Leadership and Civility in the Digital Age.

“Is it fitting for this series to kick off with a community forum to hear first-hand about the issues being hotly debated in Washington – connecting policy and policymakers to the real world,” said Tate, who served on the FCC from 2006 to 2009 and is a Lipscomb executive-in-residence. “The FCC plays a role in almost every aspect of our daily lives from mobile devices to emergency preparedness to our leadership in the global communications sector.”

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Wednesday, March 23, 2011

Gaylord Opryland Hotel hopes to raise funds, awareness about nonprofits

Gaylord Opryland Hotel has launched a new program to help raise funds and awareness about nonprofits, donating 10% of revenue for rooms booked through a special “Rooms for Good” package to a different charity each month.

In March, it has partnered with Autism Speaks, the country’s largest autism science and advocacy group.
Packages start at $199 per couple per night and include breakfast for two.

In addition to raising money for worthy causes, Gaylord is using its advertising, public relations and social media platforms to help generate more awareness for the nonprofits, as well as its own brand, said Jenny Barker, director of public relations at Gaylord Opryland Resort & Convention Center.

The company does not have an estimate of how much it will raise this month and has not yet announced its April charity, Barker said.

Gaylord’s three other resorts also are participating, although rates vary by hotel.

Contact Bonna Johnson at 615-726-5990 or bjohnson@tennessean.com.

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Dollar General reports record profits for 2010

Discount chain Dollar General reported record profits for 2010, as lower-income consumers bypassed even big-box stores like Wal-Mart to find bargains on basics like food and apparel at a chain that sells most of its items under $10.

Goodlettsville-based Dollar General ended its 2010 fiscal year with $1.27 billion in operating profit, a 34 percent increase over 2009.
During the same period, the company reported $13.04 billion in sales, a 10.5 percent increase over the prior year.

“Dollar General had a great year in 2010,” said Rick Dreiling, chairman and chief executive officer.

Fourth quarter earnings more than doubled, after the retailer cut advertising and compensation costs. Sales also rose sharply in the quarter that ended Jan. 28, 9.4 percent to $3.49 billion.

Quarterly profits rose to $222.5 million, or 64 cents a share, from $87.2 million, or 26 cents a share, from the year-ago period.

Dollar General also announced today it will open a $60 million distribution center in Bessemer, Ala. -- its 10th distribution facility.

The chain plans to open more than 600 new stores and remodel or relocate about 550 stores this year.

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U.S. Bancorp's board boosts bank's quarterly stock dividend

U.S. Bancorp’s board has boosted the bank’s quarterly stock dividend to 12.5 cents per share, up from 5 cents a share in a bid to reward shareholders for patience during two years or more of Wall Street turmoil.

“Our shareholders deserved to be rewarded for the support, confidence and patience they have shown over the last few years” as the banking industry has confronted an uncertain economy, said Richard K. Davis, chairman, president and CEO.
The announcement comes on the heels of the Fed’s approval of the bank’s comprehensive capital plan.

Banks can increase dividends if they pass “stress tests” showing that they can weather another recession.

The Fed said it had completed those tests and expects that some firms will increase or resume dividend payments, buy back shares or repay government capital.

U.S. Bancorp also said today that its board had authorized the repurchase of up to 50 million shares of the bank’s common stock. Stock repurchase plans tend to underpin or boost stock prices.

All of the 19 largest banks overseen by the Fed were subject to the stress examinations. Those banks include Citigroup, Regions Financial Corp., Bank of America, JPMorgan Chase & Co. and Wells Fargo among others.

During the financial crisis banks slashed dividends to build capital cushions to absorb losses. Regulators barred banks from boosting dividends without obtaining approval.

By increasing payments, banks may be able to attract new investors. JPMorgan Chase is among other banks interested in boosting dividend payments.

A green light from the Fed on bigger dividend payments also would signal that banks are in better financial shape overall.

Federal regulators have been working closely with banks to strengthen operations and get lending flowing more normally again after the worst financial crisis in the United States since the 1930s.

The Fed said today that the 19 banks had increased common equity by more than $300 billion from the end of 2008 to the end of 2010. Overall, both the banks’ amount and mix of capital have improved since the financial crisis, the Fed concluded.

Under the stress tests, banks had to show that they could weather another recession. That was defined as a scenario in which U.S. economic activity would shrink 1.5 percent this year and unemployment would spike to 11 percent.

The U.S, unemployment rate is just below 9 percent at the moment.

The Fed did not publicly release the results of its latest round of stress tests. It is keeping the information confidential, which is standard practice in bank exams.

The Associated Press contributed to this story.

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General Mills makes a play for Yoplait

General Mills Inc. has entered into exclusive negotiations to buy a majority stake in French yogurt company Yoplait, the company said today.

Yoplait is the world's second-largest yogurt maker and is owned by French investment firm PAI partners and French cooperative dairy group Sodiaal.
If successful, General Mills would acquire the roughly 50 percent stake held by PAI partners and work with Sodiaal, which is retaining its stake.

General Mills did not disclose the value of the offer but the Wall Street Journal, citing a personal familiar with the situation, has placed it at $2.2 billion.

The acquisition would build on General Mills' aim to increase its health and wellness product portfolio and expand operations in France, where it already produces several products.

General Mills, based in Minneapolis, already has a partnership with the company. It has licensed the Yoplait brand for more than 30 years, helping it build into a top yogurt brand in the U.S., one Yoplait's largest markets.

The company said discussions are in progress and that it is also initiating talks with French works councils.

Yoplait officials in France said they won't comment on the negotiations until they are finished talking to the works council and other concerned parties, which they predicted would be the middle of next week.

At $2.2 billion, the offer would beat out reported competitor's bids including Bright Foods of China, Nestle SA of Switzerland, Mexico's Grupo Lala Axa Private Equity and French dairy company Groupe Lactalis.

Shares of General Mills, one of the world's largest food companies, rose 59 cents to $36.72 in midmorning trading.

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Nissan to restart more auto, parts plants in Japan

Nissan Motor Co. plans to resume auto and parts production at more Japanese factories next week, but it may be several months before inventories and other elements of the country’s auto industry return to normal.

Nissan said it will resume production of parts at five plants Monday. It then plans to resume vehicle production Thursday as long as supplies last.

Most of Japan’s auto industry shut down after a powerful earthquake and tsunami devastated the country earlier this month. Nissan and other carmakers have started resuming some production, but the industry still faces rolling blackouts and infrastructure problems.

Supply levels probably won’t return to normal until mid to late summer, said Michael Robinet, director of global production forecasting for IHS Automotive.

“They certainly wouldn’t start up if they didn’t have all the components,” he said. “How long they can stay producing is anybody’s guess.”
Honda Motor Co. has said it will suspend automobile production until Wednesday. More than 100 of its suppliers are based in the area near where the earthquake and tsunami hit, according to IHS. It told U.S. dealers in an e-mail it can’t guarantee when production will return to full capacity.

Toyota Motor Corp., which builds the Prius hybrid and Lexus luxury cars in Japan, has shut its assembly plants there through at least Tuesday. Mazda Motor Corp. also said it would resume temporary production Tuesday at a couple plants.

Problems in Japan have affected production in other countries too.

GM said last week that it will halt production at a Shreveport, La., plant that relies on Japanese-made transmissions for the two small pickups it produces. It also said two of three shifts will be canceled at a plant in Eisenach, Germany on Monday and Tuesday. Another plant, in Zaragoza, Spain, will remain closed Monday.

Nissan said last week that it was resuming production at its Kyushu plant for as long as parts last. On Sunday, the company said it would expand production this week to include its entire process from parts to vehicle assembly.

(Page 2 of 2)

Tennessee unemployment rate increases to 9.6 percent

Tennessee’s unemployment rate climbed to 9.6 percent in February, up from January’s revised rate of 9.4 percent, the state Department of Labor said today.

The rate is higher than the national rate of 8.9 percent, which fell from January’s 9 percent rate.
Some 15,400 Tennesseans entered the workforce last month, and about 10,000 found jobs, Labor Commissioner Karla Davis said. “The unemployment rate increase is largely attributable to the remaining 5,000 workers who were unable to find work,” she said.

The department’s Business Survey showed 35,000 jobs have been created in the past year across a range of industries, Davis said. “The year-over-year growth rate of 1.4% shows Tennessee's employers are beginning to regain jobs lost during the recession,” she said.

Contact Bonna Johnson at 615-726-5990 or bjohnson@tennessean.com.

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Tennessee jobless rate heads in wrong direction — rises to 9.5 percentReal Estate Outlook: Small Gains

Monday, March 14, 2011

Jobless rate increases across state

Davidson County’s unemployment rate went up half a percentage point in January with an even steeper increase in the Nashville-Murfreesboro metropolitan area, but economists don’t believe this indicates a worsening economy.

The higher January jobless rate was driven by seasonal layoffs in the leisure and hospitality sector and among temporary workers, said Jeff Hentschel, spokesman for the state Labor and Workforce Department.
The January unemployment rate for Nashville was 8.6 percent, up from 8.1 percent in December. The rate in the 13-county Metro area jumped from 7.9 percent to 8.8 percent.

The state unemployment rate increased a much smaller 9.4 percent to 9.5 percent. That figure is seasonally adjusted while county rates are not.

“I don’t attribute the increases to the economy getting worse,” said economist David Penn, director of the Business and Economic Research Center at Middle Tennessee State University.

Williamson County had the state’s lowest rate at 6.7 percent, while Scott County had the highest at 23.2 percent. Rates went up in all 95 counties.

Contact Bonna Johnson at 615-726-5990 or bjohnson@tennessean.com.

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TN shares in $68.5 million multi-state settlement with drug maker AstraZeneca

Tennessee is due more than $1.5 million as its share of a multi-state settlement with pharmaceutical company AstraZeneca that resolves allegations of improper marketing.

Overall, the state and 37 other attorneys general will get $68.5 million in the largest ever multistate consumer protection-based agreement with a pharmaceutical company.
AstraZeneca marketed its antipsychotic drug Seroquel for unapproved or off-label uses, according to a complaint that also said that it failed to adequately disclose potential side effects to health care providers and withheld negative information in scientific studies about safety and the effectiveness of the drug.

Under the settlement, AstraZeneca has to publicly post its payments to physicians on a website.

It also must implement policies to ensure financial incentives aren’t given to salespeople for off-label marketing and that those salespeople don’t promote the drug to health care providers that are unlikely to prescribe Seroquel for an FDA-approved use and cite the drug’s FDA-approved uses when referencing selected symptoms rather than promoting by highlighting symptoms only.

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TN shares in $68.5 million multi-state settlement with drug maker AstraZeneca

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TN shares in $68.5 million multi-state settlement with drug maker AstraZeneca

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Jack Daniel's sales propel maker's 3Q earnings reports

LOUISVILLE, Ky. (AP) — Liquor company Brown-Forman Corp. posted a 30 percent increase in its third-quarter profit on Tuesday, beating Wall Street estimates on the strength of surging international sales and a robust showing by its flagship Jack Daniel’s brand.

The Louisville-based company also raised its full-year earnings outlook and reported improving results in the United States, where the economic downturn has made consumers less inclined to venture out to drink at bars and restaurants.
The maker of Jack Daniel’s Tennessee Whiskey and Southern Comfort reported net income of $140.7 million, or 96 cents per share, in the three months ending Jan. 31. That’s up from $107.9 million, or 73 cents per share, a year earlier.

Net revenue rose 12 percent to $962.4 million from $861.7 million a year ago.
Analysts surveyed by FactSet expected earnings of 86 cents per share on revenue of $881.9 million for the quarter.

The company raised its full-year earnings outlook to a range of $3.35 to $3.45 per share, up from its previous projected range of $3.18 to $3.42 per share. The upgraded forecast excludes the estimated gain of 20 cents to 30 cents per share from its recently announced sale of Fetzer Vineyards. Analysts expected adjusted earnings of $3.08 a share.

For the first nine months of its fiscal year, Brown-Forman reported net income of $406.1 million, or $2.77 a share, up from $376.5 million, or $2.53 a share, a year ago. Revenue rose to $2.61 billion from $2.49 billion.

Brown-Forman said higher net revenue for the first nine months of its fiscal year has been led by strong showings in numerous international markets including Australia, the United Kingdom, Mexico, Turkey, Germany, France and Brazil.

The surge more than offset soft performances in the United States and Russia, it said. The company added that recent U.S. sales trends are showing signs of improvement.

“We continue to be pleased with our broad-based growth encompassing both developed and emerging international markets,” Brown-Forman CEO Paul Varga said in a statement.

He said the third-quarter performance showed accelerated growth from the first half of the company’s fiscal year, led by the Jack Daniel’s brands and el Jimador.
Brown-Forman said its Jack Daniel’s lineup of brands had a 9 percent gain in net revenue for the first nine months. The Jack Daniels’ ready-to-drink products posted a 22 percent gain, based on a constant currency basis.

The company’s flagship el Jimador teliqua brand posted a 15 percent gain in net revenue for the nine months, also on a constant currency basis.

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French companys buys plant that manufacturers Nissan seating

MADISON, Miss. - French auto supplier Faurecia is buying Johnson Controls plant in Madison County that manufactures complete seating for Nissan's assembly plant in nearby Canton.

Nissan spokesman Steve Parrett tells The Clarion-Ledger that Johnson Controls notified the company that the deal would close sometime this spring.
Details of the transaction have not been made public.

Faurecia, the world's sixth largest auto supplier, operates about 200 plants in 32 countries.

In buying the Johnson Controls plant, Faurecia spokeswoman Stacie Tong says the company is "expanding its business with Nissan and its footprint in the Southeast United States."

Johnson Controls on Jan. 7 filed notice that 257 employees will be idled by the switch around Friday or two weeks thereafter, according to the Mississippi Department of Employment Security. Companies with more than 50 employees are required to file such notices.

MDES spokeswoman LaRaye Brown said the agency is helping Faurecia staff the facility.

Parrett said Nissan "welcomes Faurecia to its panel of existing seat suppliers ... We are confident in their ability to maintain the high standards of quality we expect from our suppliers."

Johnson Controls has been one of Madison County's major employers, with as many as 630 people working at the Madison plant at its peak. That number has dropped during the recession.

Faurecia operates a facility in Cleveland, Miss., that employs 350 and produces seat frames for a number of automakers.

Parrett said Faurecia builds trim parts and components for instrument panels for Nissan vehicles assembled at the Canton and Smyrna sites.

Nissan's Canton plant employs about 3,300 people and builds the Altima sedan, Titan pickup, Armada SUV and NV commercial van. Johnson Controls provided seating, and Faurecia will do the same, Parrett said.

The Johnson Controls facility has been a prime supplier to Nissan's Canton site since its opening in 2003.

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Frist family ranks as TN's richest with $3.6 billion

The Forbes 400 has some familiar names with deep Nashville ties again this year.

The annual magazine list of the richest Americans finds HCA hospital executive Dr. Tommy Frist Jr., and his family ranking as the richest in Tennessee with estimated holdings of $3.6 billion.
The 72-year-old Frist made the list just as HCA, which was privately owned for the past four years, made its return to Wall Street today with an initial stock offering that has raised a total of $3.78 billion.

Also, on the Forbes list was Martha Ingram and family, owners of Ingram Industries here. The 75-year-old Ingram came in No. 153 with an estimated worth of $2.4 billion.

Fred Smith, the 66-year-old top executive with Memphis-based FedEx, is No. 217 with $1.85 billion.

Microsoft’s Bill Gates and Berkshire Hathaway’s Warren Buffett head the new Forbes list with holdings of $54 billion and $45 billion, respectively.

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Silver Care Solutions, the Nashville-based provider of incontinence care for residents of nursing homes and assisted living centers, said it raised $3 million through a new financing round to fund the company’s growth.

The money is being used to hire 22 specialized nurse practitioners and 22 clinical assistants to provide the incontinence care to the seniors.
Previously, Silver Care had only 14 nurse practitioners and 12 clinical assistants.

The company also has hired three regional account directors with plans to add a fourth person to pursue new nursing home and other clients and identify more potential patients within existing client nursing homes.

FCA Venture Partners led the financing round. The Tennessee Angel Fund, a TNInvestco fund managed by the Nashville Capital Network, made a co-investment.

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