CBA Analytical Report: Bahamas Financial Services Industry Begs Reform - CBA Analytical Report: Bahamas Financial Services Industry Begs Reform -

Sunday, May 27, 2012

CBA Analytical Report: Bahamas Financial Services Industry Begs Reform -

CBA Analytical Report: Bahamas Financial Services Industry Begs Reform -

The Bahamas finds itself in some debate over the actions of its securities commission assisting the Canadian province of British Columbia in preventing the violation of its securities provisions, and perhaps other laws. The situation is instructive and should clarify an age old problem which many Bahamians seem not to understand. The securities Commission of the Bahamas should be commended on doing the kind of job it should do more often, if the Bahamas wants to build its economy, international reputation, and develop a Capital Market Driven Economy (CMDE), as advanced by the Council for Concerned Bahamians Abroad (CBA) in several of its previous reports at .

The Bahamas must base its future on productive legitimate enterprise, and be a cooperative and collaborative player in world financial affairs, rather than a small “Black Hole” outlier whose primary claim to fame in Financial Services is viewed from the outside by powerful international forces as assisting in the violation of the laws of other countries. The Country must avoid acts seen as encouraging and promoting the international movement and disappearance of monies down a virtual “Black Hole” never to be further traced by anti-terrorist, anti-money laundering, and taxing authorities and agencies.

In brief, it has been reported that Gibraltar Global Securities a Bahamian based and apparently owned financial service company has been declared “Unsuitable” to do business in the Province of British Columbia by the Securities Commission of British Columbia (BCSC). The company and its Canadian affiliate “Global Securities” also faces other sanctions and fines in a hearing scheduled for June 12, 2012. The principals of the Bahamian company have publicly complained that it is a sovereignty issue and that the Securities Commission of the Bahamas (SCB) was wrong in providing the BCSC with information it involuntarily retrieved from Gibraltar in a 2010 “surprise” visit to Gibraltar’s offices. The SCB seized documents containing information which the British Columbia government claimed existed, and which Gibraltar had reportedly refused prior requests for discovery, claiming protection from “Fishing Expeditions” not allowed by Bahamian “Financial Secrecy Law”. Also, Gibraltar now claims that the SCB should be investigated in the matter, as its actions will hurt the Bahamian industry, and reverberate internationally among clientele seeking offshore services and protections.

The SCB has admitted to sending the seized documents to the Provincial government thus giving them evidence needed for their subsequent ruling and actions. Generally, this is how a competent securities Commission is expected to operate, and based on current law and regulations, the SCB seems to have been justified considering the prior discovery requests and resultant refusals by Gibraltar. The BCSC in its ruling also offered evidence that Gibraltar and Global had previously proffered formal statements specifically denying their engagement in the activities the retrieved documents later evidenced they were involved in. More on the specifics of the case can be viewed at .

While the CBA can only opine as to the actual facts as reported in the BCSC ruling and elsewhere, an evaluation based on what has been reported, reveals a situation which is highly instructive. Notably, this is not the first incident the Bahamas Securities Commission has had with Canadian based and affiliated financial service operations. There have been several prominent examples. Due to the lack of a federal securities commission, oversight regulations, and enforcement capabilities, the Canadian securities system which is Provincially based, has come under much scrutiny and criticism. Some observers have gone as far as to state that parties hurt by Canadian related financial services must often depend on transactional connections to the long and powerful arm of the U.S. Securities operations and laws for enforcement solutions. Ironically, this is also one reason the more prudent Financial Services operations in the Bahamas have traditionally and facially steered away from U.S. based transactions whenever they can. The situation in Canada has led to disparate enforcement of securities matters, and internal and international forum shopping by questionable Investment practices and promoters. The Bahamas has unfortunately become a forum shopped by some of these entities due its history as an offshore center with laws touting financial secrecy, and with local actors amenable to lucrative, less enforceable Canadian, as compared to highly scrutinized U.S., based transactions.

The view from outside is extremely important in this area. The Bahamas cannot build and maintain a financial services industry or any industry for that matter, which is viewed from the outside as assisting in the violation of the laws of other countries. This is particularly so when the laws being violated are those of world leading countries, and where our actions may be seen as contravening international norms of financial practice. Simply because we are a sovereign nation with our own laws, does not mean we can do any and everything to make money.

A simple rule that actors within the Bahamian Financial Services industry must remember is that within International Law and Relations, “Might Is Almost Always Right”. This may be a sobering realization for the less well heeled nations, but it is one to take important notice of. While International law and treaties may be interpreted by international bodies with some token representation from smaller nations, such laws are generally established by the larger more powerful forces, and always unilaterally self interpreted and enforced by them in protecting their interests. Unresolved international disputes only exist when two behemoths disagree, but generally when a behemoth confronts a small actor in an international dispute, most knowledgeable observers realize who will ultimately win. Numerous examples of this can be cited but is unnecessary in the context of this report, and may be covered in a follow up report on .

Large powerful countries and international organizations in attempting to protect their interests will strive to do so, particularly when the moral and ethical situation, and international law is arguably on their side.

The new Minster of Financial Services Ryan Pinder, a highly trained and U.S. experienced Tax and Business Transactional lawyer has his work cut out in reigning in unrealistic actors and expectations in the Bahamas Financial Service community. His appointment breeds hope that financial services can now be focused on bringing foreign income and jobs from legitimate foreign business setup and financial services, rather than from the assistance of “Black Hole” financial services couched in terms like “sovereign protected”, “wealth management”, “high net worth offshore asset protection” et al.

The writing has been on the wall for some time now for any objective observer to see. Large important production based world economies will not allow small non-production related economies like the Bahamas to assist foreign violations and abuse of their laws. The recent BCSC ruling, FATCA, OECD, The Patriot Act, and several others now in the pipeline are clear examples that the problem for countries like The Bahamas is not going away.

Both Prime Ministers Ingraham and Christie recognized the problem, and Ingraham though criticized for giving in to the OECD during his first terms in office should be applauded for doing what was morally and ethically right, even if he may have been forced to do so. It is important to note that Christie in his first term did not try to repeal Ingraham’s decision, apparently recognizing the futility of attempting to do so in face of the clear writings upon the international wall of financial compliance. In addition, he appears to have an obvious inclination and predisposition to make the Bahamas a more important and respected player on the world stage. Members of the Bahamas Financial Services Community who do not follow the views espoused in this CBA report, should not be surprised, or expect Prime Minister Christie to take any steps which will put the international reputation of the Bahamas at risk.

Money to burn! Francesca Eastwood and boyfriend Tyler Shields set a $100,000 Hermes Birkin bag on fire in new shoot - Daily Mail

By Jade Watkins


It is one of the most sort after handbags in the world and customers are often required to go on a very long waiting list in order to obtain one.

But the fashion world is without one less Hermes Birkin bag after Francesca Eastwood and her boyfriend Tyler Shields set one on fire in a new photo shoot.

The 18-year-old daughter of legendary actor Clint Eastwood and her photographer beau burnt the $100,000 crocodile skin version of the bag in the name of art.

Hot stuff: Francesca Eastwood and her boyfriend Tyler Shields set a $100,000 Hermes Birkin Bag on fire in a new photo shoot

Hot stuff: Francesca Eastwood and her boyfriend Tyler Shields set a $100,000 Hermes Birkin Bag on fire in a new photo shoot

In one snap, Francesca is also seen fanning the flames even further by blowing on it with her red-painted pout.

As well as engulfing the leathergood in flames, the teenager also put the handles of the bag in her mouth in order to play a game of tug of war.

The pair finish off the tote by slicing it in half with a chainsaw.

Destroyed: The pair finish off the tote by slicing it in half with a chainsaw

Destroyed: The pair finish off the tote by slicing it in half with a chainsaw

This isn't the first luxury item that has been destroyed for one of Shields's shoot.

A pair of Christian Louboutin shoes were also wrecked in the name of photographic art.

The new pictures come after Shields‘ recently opened his Mouthful exhibit in support of Love is Louder in Los Angeles.

Opening night was last weekend and actress Emma Roberts was one of the guests-of-honour.

It's mine! As well as engulfing the leathergood in flames, the teenager also put the handles of the bag in her mouth in order to play a game of tug of war

It's mine! As well as engulfing the leathergood in flames, the teenager also put the handles of the bag in her mouth in order to play a game of tug of war

The event, held at a private studio, was the most exclusive ticket in town as guests clamoured to get close to the cult photographer.

Also in attendance at the exhibit, presented by A/X Armani Exchange were Tyler‘s girlfriend Francesca, Harry Shum, Jr., and Modern Family‘s Sarah Hyland - who was with boyfriend Matt Prokop - and beauties, Christa B. Allen and Brittany Snow.

The cult snapper posed happily with Eastwood's beautiful daughter and Roberts at the wonderfully surreal event.

Two for the price of one: The Hermes bag is one of the most sort after accessories in the world

Two for the price of one: The Hermes bag is one of the most sought after accessories in the world

Roberts, 21, looked stunning in a black Dolce & Gabbana dress with matching bag with Christian Louboutin shoes.

And the niece of superstar Julia Roberts seemed to enjoy the event, mingling with the giant rabbits and panda wandering around the studio playing chess.

Roberts and Eastwood have often teamed up for a series of stylish photoshoots with Shields.

In love: Shields recently opened his Mouthful exhibit in support of Love is Louder in Los Angeles with Francesca at his side

In love: Shields‘ recently opened his Mouthful exhibit in support of Love is Louder in Los Angeles with Francesca at his side

The photographer is famous for his provocative snaps of stars like Demi Lovato, Lindsay Lohan and Mischa Barton.

At the event, guests were greeted by human pandas and rabbits donning black A|X suits and 'viewed the out-of-the-box photography before signing special edition A|X Armani Exchange tee shirts in support of Love is Louder and Tyler Shields.

The tees will be auctioned off, with all proceeds going towards the foundation, created to support anti-bullying efforts.

Famous friends: Emma Roberts was also in attendance at the event

Famous friends: Emma Roberts was also in attendance at the event

According to the press release: 'The fashion-forward crowd received a sneak-peak of the one-day-only gallery exhibition which fuses photography, video, and art installation.

Shattering all the rules, Shields leads the way at the helm of an entirely new breed of art.'

Shields also stars in his girlfriend's new reality show Eastwood & Company, which airs tomorrow night on E!.

Here's what other readers have said. Why not add your thoughts, or debate this issue live on our message boards.

The comments below have been moderated in advance. idiots. The bag is $10,000 not $100,000. Get your reporting facts straight. Either way, I would never spend that much on a bag and I'm sure this idiot guy didn't either...he probably bought a replica from Chinatown for $50.

Oh grow up!

he takes terrible photographs. If you're going to burn a 100,000 bag you could at least set up the shot properly

There are a lot of rich idiots around then.

"The cage opens wide, and the fools rush inside". Sad and pathetic that anyone would pay $100K for a handbag.....utterly foolish.

Hey...I have an idea. Instead of destroying those over-priced bags and shoes, how about auctioning them off and giving the proceeds to someone less fortunate? Makes sense and makes a statement that the price of vanity(and stupidity) could feed, clothe and otherwise improve someone's life. No purse or shoe is worth those ridiculous prices, even if the were crafted by magical fairies from materials spun from gold.

This show has only been on 2 weeks and Francesca already comes off as a Kardashian-worthy ditz.

I feel so sorry for Clint Eastwood, a fairly rare somewhat intelligent person. This is the trouble with having teenage daughters in this day and age, especially if you as a parent made some money. Your child usually turns out a braindead bimbo, very much the kind of person you would completely be disgusted by.

literally burning $100,000.... why do celebrities let their children get this way?

Meanwhile a student in Texas got thrown in jail and fined for working 2 jobs trying to support her family and we have people on the other side burning $100,000 because they were that bored. That's sad. With that kind of money burned they could have sent it to Diane Tran who is going through a very hard time right now. *sigh* But then again this is the same moron that made Tamara Ecclestone roll around in one million British pounds so this does not surprise me at all. It's not art it's vulgar.

The views expressed in the contents above are those of our users and do not necessarily reflect the views of MailOnline.

Financial planners at war over poaching - Australian Financial Review

Sally Patten

The chairman of financial planning group Count, Barry Lambert, has accused rival BT Financial Group of unsporting behaviour over its attempts to poach his firm’s advisers.

Since Commonwealth Bank of Australia acquired Count for $373 million earlier this year, the Westpac-owned BT Financial has bought least seven Count practices, a move that senior executives in the industry argue breaks an unspoken non-compete agreement between financial advice and administration businesses.

“It’s not cricket. It’s not the thing to do,” Mr Lambert told The Australian Financial Review. “BT’s behaviour is equivalent to underarm bowling between Anzac friends” – referring to the infamous incident in 1981 when former Australian cricket captain Greg Chappell instructed his brother, Trevor, to deliver the last ball of the match underarm. The incident snuffed out any chance of New Zealand scoring the six required to tie the match.

“I’m very disappointed with the behaviour of BT in the way they are going about business. I’d be surprised if anyone else who knew what was going on would support them.”

Mr Lambert, one of the advice industry’s most respected veterans, said this was his personal view rather than that of CBA or Count.

BT Financial’s poaching of Count advisers is regarded as a “game changer” by some observers and has raised concerns that the Westpac subsidiary has broken traditional ties between planning practices and administrative platforms.

“On the one hand it is part of competition, but [BT] is breaking some unwritten codes around the industry,” said Tony Fenning, chief executive of Shadforth Financial Group, an independent adviser network that is listed on the ASX.

“We would not see as a positive the breaking of those unwritten rules,” Mr Fenning said.

As an independent planning firm, Count used the BT Wrap administrative platform for 25 years, helping build the latter into Australia’s biggest platform business with $86 billion of assets.

Escalating the row between the advice subsidiaries of Australia’s two biggest banks, Count written to BT Financial seeking assurances that BT Wrap has not disclosed confidential information about Count clients that has given BT the upper hand in attracting Count planners.

BT, which has spoken to between 15 and 20 more Count practices about the possibility of them joining the Westpac subsidiary, has denied breaching any of its obligations to Count.

“As BT has explained to Count, BT has fully complied with all of its obligations to Count and to Count’s members, and will continue to do so,” a BT spokesperson said.

“Calculations of the per-client savings that a Count practice can achieve by switching to Magnitude are only performed where this is authorised or requested by the relevant Count practice.

“Beyond that, BT does not propose to comment on the detail of how it deals with its customers and partners,” the spokesperson said.

Some in the industry, including Mr Lambert, are concerned that platforms such as BT Wrap have worked alongside advice businesses to their and their clients’ mutual benefit, but that platforms would now start to compete with advice firms, particularly if they joined a rival company.

BT Financial argued that some Count advisers were questioning whether they would receive adequate support from CBA, saying it was “commercially logical” for them to consider a move to Westpac.

As a result of BT Financial’s concerted campaign to attract Count practices, Count has been forced to raise its retention payments.

Count chief executive David Lane refused to reveal the size of the increase, but a senior industry figure said he had heard it was “substantial”.

Mr Lane said the payments had been distributed evenly across Count practices, so no one would be discriminated against.

He has previously declined to comment on rumours that CBA had set aside $25 million for retention payments to be used to discourage Count advisers from leaving.

BT has denied rumours that it is offering “transition payments” of between $500,000 and $1 million to Count practices that move across.

BT Financial is trying to attract Count planners to its Magnitude advice business.

Magnitude chief executive Phil Butterworth, a former boss of DKN, an advice firm bought last year by IOOF, is expected to give an update on the division’s expansion plans this week.

It is understood that Magnitude has held talks with another 20 planning practices, apart from those that are part of the Count alliance.

Business Mentors Increases One-Off Registration Fee - Scoop

28th May 2012

Media Release

Business Mentors Increases One-Off Registration Fee To Cope with Loss of Charitable Status

Business Mentors NZ, the nation’s number one not-for-profit mentoring organisation, will increase its one-off $100 registration fee to $150 from 1st June to enable it to cope with the financial implications of its loss of charitable status.

The Charities Commission has deregistered the not for profit organisation on the basis that the key benefactor of the business mentoring service is the individual business owner and that the community gets no measureable benefit.

Business Mentors CEO, Ray Schofield explains: ‘We are committed to keeping the day-to-day running costs of Business Mentors NZ to a minimum. However, the loss of our charitable status combined with increasing demand for our services from small and medium enterprises and the associated costs means that we have to put our registration fee up to cope.

‘The extra income will assist with any administration costs not covered by our private sector patron sponsors and NZTE government funding enabling us to cope with the financial implications of the Charities Commission’s decision. ’

Business failure is a serious problem for New Zealand with devastating consequences for families and communities. The Business Mentoring service is a proven generator of employment and growth, which is vital to our nation’s well being. In particular we help to grow the economy through building performance capability, especially exporting from the SME sector. With over 1800 volunteer mentors Business Mentors New Zealand helps on average 4,300 business clients a year and has assisted over 60,000 businesses since its inception in 1991. In addition we have also supported 127 Not for Profit organisations in the last two years.

The organisation also plays a key community support service in the Canterbury reconstruction through its 330 local volunteer mentors. The critical importance of this activity has been recognised by the Government paying the current $100 client registration fee for Canterbury businesses as well as funding an additional part time administrator in our Christchurch agency.

The Government’s appreciation of the effectiveness of business mentoring is evidenced by its decision to fully fund for six years the delivery of services to 10 Pacific Island nations as part of MFAT/NZAID, programme using NZ Volunteer mentors.

Although Business Mentors New Zealand receives an annual grant from NZTE for its work in New Zealand, the Business Mentoring service could not continue without the support of its 85 private sector business sponsors. Our volunteer mentors give their time freely to their local communities, which in itself is a charitable activity.

The registration fee, which has remained unchanged since October 2007, will entitle business owners to all Business Mentors services for up to two years, including mentoring sessions with an experienced business person and access to a wealth of information and resources.


Business star Tamer Hassan: I could have killed Richard Gere - The Sun

Like if you're a Christmas tree farmer and you throw one slightly too far over the pile. Just nudge it back a bit.

But when Football Factory star Tamer Hassan didn't know his own strength in the workplace, he went and dislocated Richard Gere's shoulder.

And it only made him even more respectful.

Tamer says: "Richard Gere's over 60 years old. His passion for the industry and the game is just as strong as when he started. He's a beautiful individual, a profesional and very committed.

"We did a film called The Double with Martin Sheen.

"Me and Richard were rehearsing for a month for a big scene. I said 'let me use the stunt double, and you can slip in where you can' - not wanting to hurt him.

"But Richard being Richard as committed as he is, said 'no, I'm doing it.'

"I took a knife off him, jerked his shoulder and it popped out."

Richard's shoulder wasn't the only thing that popped out. The crew then went on a mammoth break, as production shut down when the Pretty Woman actor was unable to film for three months!

"To his credit, he went away, healed, came back and finished the scene," Tamer added.

"If I can be like him at his age I'll be a very happy man."

I talk to Tamer at the new Jongleurs Picadilly - along with his pal, EastEnders star Ricky Grover - ahead of their Comic Idol talent search.

And Tamer has an idea of somebody he thinks would made a useful entrant - his best pal Danny Dyer.

"Danny is probably one of the funniest kids you’ll ever meet.

"He’s got such a likeability to him. He’s so sweet, so lovely. I know people will think I’m being biased, but he had me at hello.

"Danny, Ricky and Ray Winstone - three Canning Town boys - I think it would be the funniest show at Jongleurs ever."

With ex-fighter Ricky in our presence, the conversation flows easily into boxing. Ricky says stand-up, and getting in the ring, aren't too dissimilar.

Tamer isn't so sure, as his mind is elsewhere during a fight.

"You’re mainly worried about women," he says.

"I always used to bring the birds. You’re never going to lose in front of a girl are you? That was my trick anyway.

"I would put the most beautiful cheerleaders round the England training pitch. When women are around, men put the most effort in ever.

"You see it in the gym. When we were kids, and a girl walked into the gym, we exceeded ourselves.

"But now they’ve given the girls physio roles like at Chelsea, so everybody’s rolling around injured!"

It seems Tamer is at home discussing our national sport. Having returned from the States, he can now enjoy it in the comfort of his local. While meeting Danny to work on their new film, following their last hit Freerunner.

And to plug the film's DVD release, Tamer challanged pro freerunner Chase Armitage to a 'Man Vs Tube' race, below.

PRO freerunner Chase Armitage takes on the London Underground

Tamer says: "I’ve been out in LA for two years, for my sins, and I’m happy to be back.

"I came back and wrote a movie. It wasn’t planned, it just came to me.

"The distributors were saying ‘we all want another Tamer and Danny movie’, so I went ‘alright, I think we’ve covered everything. Dead Man Running, to The Business, to The Football Factory.

"I said ‘what do you want?’ They said ‘everything combined’.

"So, thinking on my feet, I said ‘what about two football agents, unearthing the corrupt underbelly of the football industry’.

"They said ‘can you write something?’ and I said ‘yeah’ so called Stephen Reynolds - who’s a fantastic writer.

"We sat down in a room for 8 hours a day for 5 days straight. We went back and said ‘here’s 135 pages'."

Not a bad week’s work, for a dyslexic man.

"I suppose not!" he acknowledges.

FOOTBALL Factory star sits down with his EastEnders' pal Ricky Grover

Tamer - like his EastEnders pal Ricky - has struggled with the condition in the past, but can now memorise pages in minutes thanks to developing a photographic memory.

"Its like, if you’re deaf, you get higher senses in other things. I think dyslexic people have a heightened creativity."

Fans of the Football Factory star will be used to seeing him killing or being killed, so this time around things will be different.

"I’m usually just being violent and Danny ends up with the girl, so I’ve got a love interest in this one," says Tamer.

And the tough guy is still casting for the female part.

"We’re still looking," he adds. "The character is amazing, she drives the film.

"She could actually steal the movie."

"The character portrays women as being the strong one because I’m a great believer that if any man says he is the strong one at home is either lying or miserable."

So is Tamer the boss in his own home?

"Nooooo. Of course not, no way.

"In the bedroom, yes! But everywhere else? Not a chance."

Tamer isn't even the boss in a kebab shop - despite his Wikipedia page's claims that he 'had his eyebrows done after being teased while working in his parent's restaurant'.

Tamer laughs: "I've got no idea where that came from.

"My dad was a carpenter, my mum was a seamstress, we've never had a kebab shop - and I was never called mono!"

And while the hardman does admit to having his eyebrows 'tended to', he won't give away how.

"I can't disclose how I've done it unfortunately.

"My daughter would kill me!"

Sounds like The Business man knows who the real boss is.

- TO keep up-to-date with Tamer, follow him on Twitter @RealTamerHassan

New Bank of America Small Business Owner Report Finds Running a Small Business Is Three Times More Stressful Than Raising Children - Yahoo Finance


Bank of America today released its inaugural Small Business Owner Report1, a semi-annual study exploring the concerns, aspirations and perspectives of small business owners across the country. The survey uncovers a sense of optimism about their own business as they look toward the future 12 months. It also found managing the ongoing success of their business creates more stress for small business owners than any other aspect of their lives.

The survey indicates that maintaining a small business causes small business owners twice as much stress as maintaining a healthy relationship with a spouse or partner, nearly three times as much stress as raising children and more than four times as much as managing their own personal finances. In addition, small business owners regularly forego free time (57 percent), exercise (37 percent) and other important personal priorities in order to manage their business.

“We know how much small business owners give up to make their businesses successful, but despite their sacrifices, they are still optimistic about the future,” said Dean Athanasia, Preferred and Small Business executive at Bank of America. “Therefore, we believe that the financial services industry, the business community and the general public must continue to take steps to support the growth and success of our small business sector.”

Confidence in local economy and their own decisions fuel optimism

Small business owners have more confidence in their local economy than the national economy. When asked about the next 12 months, 42 percent expects their own local economic conditions to improve compared to 35 percent who expects the national economy will improve.

However, reservations about the state of the national economy did not dampen optimism among small business owners regarding their future business prospects. Nearly seven of 10 (69 percent) small business owners view their local economy as very important to their business’s success. Moreover, reflective of the independent character that typifies most small business owners, the majority of respondents (53 percent) stated that their own decisions, rather than the overall health of the economy, are more likely to influence business outcomes. This sentiment was particularly strong among young small business owners, those between the ages of 18 and 34 (66 percent).

Confidence was further evident in two key indicators of performance – hiring and revenue expectations. Nearly one-third (31 percent) of small business owners expect to expand their workforce in the next 12 months, while more than half (56 percent) plan to keep their staffing levels consistent year over year. Among those small businesses planning to hire, owners expect to increase the number of employees by 25 percent on average. Furthermore, 61 percent of all respondents forecast a revenue increase, and 32 percent projects that revenues will remain the same.

But tellingly, when considering the potential impact of national economic issues, survey respondents listed the effectiveness of U.S. government leaders (75 percent) as their most pressing concern. Other concerns included commodities prices, such as oil and gas (73 percent), recovery of consumer spending (71 percent) and health care costs (70 percent). Credit availability (54 percent) ranked in the bottom three considerations along with the trade deficit and the global stock market unrest, as shown in the graph below.

Credit and cash management tools available but underutilized

Although 71 percent of small business owners believe they have enough capital to effectively run their business, survey findings suggest a good number of small business owners may not be leveraging readily available tools and resources to help make cash management easier. For example, even though 45 percent of small business owners cited not being paid on time as their biggest impediment to cash flow, less than one-third (31 percent) sought guidance from their bank on best practices for expediting collections while only 29 percent uses electronic invoicing.

When asked to describe their point of view on lending criteria and requirements to obtain a line of credit, a quarter (25 percent) of respondents said that today’s lending requirements are appropriate and should not change, while an additional 20 percent believes that further requirements should be put in place to obtain a loan in order to protect small business owners from defaulting. Moreover, while credit appears to be available – more than three-quarters (78 percent) of applicants who applied for a loan within the past two years were approved – small business owners may not be taking advantage of their lines of credit to further business objectives. Of the 64 percent of small business respondents holding an open line of credit, 50 percent earmark the money for emergency purposes only, rather than using it as day-to-day capital.

“One of the biggest ways we can help our small business clients be more successful is to help them maximize their cash flow,” said Robb Hilson, Small Business executive at Bank of America. “Helping a small business owner with a cash management strategy specific to their unique situation enables them to do more with the resources they have.”

Small business owners value professional financial advice

Only slightly more than a quarter (27 percent) of small business owners describe themselves as being very financially savvy when it comes to running their business. The remaining respondents admit to needing occasional or ongoing expert help. Small business owners rely on a wide range of resources for financial guidance, as shown in the graph below.

In selecting their banking relationships, small business owners prioritize convenience (20 percent), relationship rewards (18 percent) and access to local expertise (17 percent). When asked what single aspect of their banking experience they would change, small business owners most frequently cited an enhanced level of expertise and more customized services while lowering costs associated with the financial services they receive (1 percent) and making it easier to get a loan (1 percent) ranked extremely low on their priority list.

“As the economic environment becomes more complex, Bank of America is committed to providing small business owners with dedicated resources to stay ahead of their financial needs,” said Athanasia. “Through our 1,500 associates who work with small businesses across the country and our 1,200 Merrill Edge financial solutions advisors, small business owners can benefit from highly specialized advice from local experts who intimately understand the full range of their business and personal financial needs.”

Marketing is key to growth

For nearly half of survey respondents (47 percent), increasing the marketing of their business to acquire new customers is the most important action they plan to take to generate additional revenue, surpassing a combination of increasing sales to existing customers (14 percent), better cash flow management (12 percent) and acquiring additional capital (8 percent). When asked about their marketing approach, three-quarters (74 percent) of small business owners say they are actively implementing one or a variety of initiatives and find the approaches shown in the chart below to be most effective.

Notably, despite the prevalence and growing influence of social media, survey findings indicate that small business owners may not be leveraging this marketing tool to its fullest potential. Only 38 percent of SBOs who use social media to market or promote their business engage in conversations with customers, while less than half (47 percent) utilizes social media to offer discounts and deals to their customer base. Conversely, nearly two-thirds of survey participants (64 percent) wish they took better advantage of technology innovations to help manage or market their business.

1 See “About the Bank of America Small Business Owner Report” section for information about survey methodology.

About the Bank of America Small Business Owner Report

Braun Research conducted the Bank of America Small Business Owner Report survey by phone between March 17 and April 9, 2012 on behalf of Bank of America. Braun contacted a nationally representative sample of 1,000 small business owners in the United States with annual revenue between $100,000 and $4,999,999 and employing between 2 and 99 employees. In addition, 300 small business owners were also surveyed in nine target markets including Los Angeles, Dallas, Washington, D.C., New York, Boston, Chicago, San Francisco, Atlanta and Miami. The margin of error for the national sample is +/- 3.1 percent, and +/- 5.7 percent for the oversampled markets, with both reported at a 95 percent confidence level.

Bank of America

Bank of America is one of the world's largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 57 million consumer and small business relationships with approximately 5,700 retail banking offices and approximately 17,250 ATMs and award-winning online banking with 30 million active users. Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in more than 40 countries. Bank of America Corporation stock (NYSE:BAC - News) is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange.

For more Bank of America news, visit the Bank of America newsroom.

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Bank of mum and dad goes bust: A third of pensioners forced to borrow money from their children to cover soaring bills - Daily Mail

By Chris Hanlon


Impoverished pensioners are being forced to ask their children to help pay their bills as soaring food and energy bills leave them unable to cope.

A poll of 2,000 retirees conducted by the firm Responsible Equity Release revealed that a third admitted to asking their children for money in the last year and a third also fear they may have to sell their house just to get by.

Almost half have taken on part-time work to boost their income, while one in six have no savings whatsoever.

Piling up: A third of retirees have been forced to ask to borrow money from their children to help them pay bills

Piling up: A third of retirees have been forced to ask to borrow money from their children to help them pay bills

Further research carried out by Age UK found 11 per cent of pensioners had borrowed money to pay their rent or mortgage.

Many have seen a shortfall in their income due to low interest rates on their savings or have been hit by pensions not paying as much as expected.

Hard-up OAPs need to ask for cash is also hitting their children hard at a time when money is tight due to high living costs.

Michelle Mitchell, charity director general at charity Age UK, told the Sunday Express: 'It is extremely worrying that such a high number of older people report having to borrow money just to keep a roof over their heads.

Struggling: Pensioners are increasingly having to turn to their children to help with the cost of living a study has revealed

Struggling: Pensioners are increasingly having to turn to their children to help with the cost of living a study has revealed

'Far too many older people are living in poverty and the Government must continue to work pr-actively on ways of getting money to older people who are in desperate need.

Managing director of Responsible Equity Release Steve Wilkie said: 'More than ay other group, they must feel let down by the Government - the forgotten generation, left to fend for themselves.'

It is estimated that 1.8million pensioners in Britain live in poverty.

Here's what other readers have said. Why not add your thoughts, or debate this issue live on our message boards.

The comments below have not been moderated.

I've just heard that the EU intend to slap on another 4p per litre of petrol. Surely the EU should be lowering taxes to boost the economy?

The poll doesn't really show anything... it only says that 33% of those polled had to borrow money at least one time over the last year. I think so did most people, pensioners or not, have to borrow money at least once in the last year.

My parents never had any problems living on the state pension. They didn't drink, smoke, go partying or play bingo every night. They knew how to budget and put money aside each week for electricity bills, gas bills and for a rainy day and they still ran a car, went out occasionally for a drive in the country. They had to pay rent each week and never had to borrow money. Some people when they retire still try and live as though they are getting the same money as when they were working and will not curtail their spending. So it's no wonder they are struggling to live.

You can bet that the government officials won't be hurting from their pensions. Only the working folks.

Hope I die before I get old...!

It seems strange that the government is proposing a new higher state pension for future pensioners, but won't give it to those already retired when the new rate comes into force. If they're admitting that the new higher rate is the amount a pensioner needs to live on, them why are they going to withhold it from the older pensioners? Do they really think older pensioners have fewer needs, in terms of food and heating and all other household bills? This seems like ageism to me, something I thought was illegal these days. I feel sorry for everyone who can't make ends meet, whether the elderly, middle-aged or young people. Yes, we're all in this together, except of course for those in government and their wealthy friends.

Out of all the turmoil of elderly parents needing to ask their children for cash comes a BIG positive: We might FINALLY get the question of euthanasia up front and centre at Parliament. It would be very tragic and nasty to see all these old folks unable to pay their bills, kicked out of their homes, and living on the streets and among the elements 365 days per year. So let's give them an option if things really become too much to carry on. At a ripe old age and with health issues galloping in, with no money/savings, and who's kids who are also struggling themselves, they might see no other alternative! This way they could leave a little nest-egg for their family before they run out of cash. Bring it on! (Or tongue in cheek?)

no one in the uk should be living in poverty! Our benefit system is not great, but it gives enough to get by on. if they are short of money, let a room, do part time work. When will people realise, bad as the economy is, our standard of living should not be that bad. If they didn't save for their boiler, there are ways of bringing in a little extra. Im not judgine because I have money, I have gone from !k per week part time, to sick pay, I know how to budget, eat cheaply, the majority of pensioners should know how to do this, although the next generation to retire are going to be stuffed!

The energy companies seem to do a decent job of culling the number of pensioners.

Many kids bleed their parents dry - it is an "I want, I want stamp feet or ungenuine affection given - until the pot runs dry!!

The views expressed in the contents above are those of our users and do not necessarily reflect the views of MailOnline.

Dell Reports First Quarter Financial Results - Yahoo Finance


Dell announced its fiscal 2013 first quarter results today, continuing to show progress in its move to being a total enterprise services and solutions provider. Revenue for the quarter was $14.4 billion, with GAAP operating income of $824 million, and earnings of $0.36 per share.

“We’re committed to continuing our strategy to re-shape Dell’s business as an end-to-end IT provider,” said Michael Dell, chairman and CEO. “We saw continued progress in our first quarter with the innovative IT solutions we’re providing – notably our latest Dell servers, storage, networking and services that deliver customers enhanced productivity.”

“We continued to shift the mix of our business during a challenging environment,” said Brian Gladden, Dell chief financial officer. “Our enterprise solutions and services businesses now account for 50 percent of our gross margin, and we’ll continue to make the necessary investments to maintain our progress.”


  • Revenue in the quarter was $14.4 billion, a 4 percent decrease from the previous year.
  • GAAP earnings per share in the quarter was 36 cents, down 27 percent from the previous year; non-GAAP EPS was 43 cents, down 22 percent.
  • GAAP operating income for the quarter was $824 million, or 5.7 percent of revenue. Non-GAAP operating income was $1 billion, or 7 percent of revenue.
  • Cash used in operations in the quarter was $138 million. For the past four quarters, Dell has generated $4.9 billion in cash flow. Dell ended the quarter with $17.2 billion in cash and investments.

Fiscal-Year 2013 First Quarter Highlights

      First Quarter
(in millions) FY13       FY12       Change
Revenue $   14,422       $   15,017       (4 )%
Operating Income (GAAP) $ 824 $ 1,212 (32 )%
Net Income (GAAP) $ 635 $ 945 (33 )%
EPS (GAAP) $ 0.36 $ 0.49 (27 )%
Operating Income (non-GAAP) $ 1,010 $ 1,376 (27 )%
Net Income (non-GAAP) $ 761 $ 1,050 (28 )%
EPS (non-GAAP) $ 0.43 $ 0.55 (22 )%

Information about Dell’s use of non-GAAP financial information is provided under “Non-GAAP Financial Measures” below. Non-GAAP financial information excludes costs related primarily to the amortization of purchased intangibles, severance and facility-action costs, and acquisition-related charges. All comparisons in this press release are year over year unless otherwise noted.

Strategic Highlights:

  • Dell Enterprise Solutions and Services revenue grew 2 percent year over year to $4.5 billion and contributed half of Dell’s gross margin. The ESS revenue grew 5 percent excluding third-party storage.
  • Dell Services revenue was $2.1 billion, up 4 percent. Services backlog increased 9 percent to $15.4 billion.
  • Dell-owned storage grew 24 percent to $423 million.
  • Server and networking revenue grew 2 percent.

Business Units and Regions:

  • Large Enterprise revenue was $4.4 billion in the quarter, a 3 percent decline. Operating income for the quarter was $402 million, or 9.1 percent of revenue.
  • Public revenue was $3.5 billion, a 4 percent decrease. Operating income for the quarter was $271 million, or 7.8 percent of revenue.
  • Small and Medium Business revenue grew 4 percent to $3.5 billion. Enterprise Solutions and Services revenue increased 17 percent, led by services revenue growth of 23 percent and servers and networking of 16 percent. SMB had $389 million in operating income, or 11.2 percent of revenue.
  • Consumer revenue was $3 billion, a 12 percent decline. Operating income was $32 million or 1.1 percent of revenue.
  • Asia-Pacific and Japan revenue was flat but China increased 9 percent. EMEA revenue was down 1 percent in the quarter. Americas was down 7 percent. Revenue in the BRIC countries increased 4 percent.

Company Outlook:

The company expects second quarter revenue to be in line with historical seasonal trends and be up 2-4 percent from first-quarter levels.

About Dell

Dell Inc. (NASDAQ:DELL - News) listens to customers and delivers worldwide innovative technology, business solutions and services they trust and value. For more information, visit As previously announced, the first-quarter analyst call with Michael Dell, chairman and CEO; Brian Gladden, CFO; and, Steve Felice, Chief Commercial Officer, will be webcast live today at 4:00 CDT and archived at To monitor highlighted facts from the analyst call, follow on the Dell Investor Relations Twitter account at: or hashtag #DellEarnings. To communicate directly with Dell, go to

Segment Realignment:

In the first quarter of Fiscal 2013, Dell made certain segment realignments in order to conform to the way Dell internally manages segment performance. These realignments affected all of Dell's operating segments, but primarily consisted of the transfer of small office business customers from the Small and Medium Business segment to the Consumer Segment. Dell has recast prior period amounts to provide visibility and comparability. None of these changes impacts Dell's previously reported consolidated net revenue, gross margin, operating income, net income, or earnings per share.

Non-GAAP Financial Measures:

This press release includes information about non-GAAP operating income, non-GAAP net income, and non-GAAP earnings per share (collectively with non-GAAP gross margin and non-GAAP operating expenses, the “non-GAAP financial measures”), which are not measurements of financial performance prepared in accordance with U.S. generally accepted accounting principles. In the following tables, Dell has provided a reconciliation of each historical non-GAAP financial measure to the most directly comparable GAAP financial measure under the heading “Reconciliation of Non-GAAP Financial Measures” and has presented a detailed discussion of its reasons for including the non-GAAP financial measures and the limitations associated with those measures under the heading “Use of Non-GAAP Financial Measures.” Dell encourages investors to review the reconciliation and the non-GAAP discussion in conjunction with Dell’s presentation of these non-GAAP financial measures.

Special Note on Forward Looking Statements:

Statements in this press release that relate to future results and events (including statements about Dell’s future financial and operating performance, trends relating to mix shift, macroeconomic uncertainty, organic and inorganic investments and success relating to strategic transformation, as well as the financial guidance with respect to cash flow from operations, net income and non-GAAP earnings per share) are forward-looking statements and are based on Dell's current expectations. In some cases, you can identify these statements by such forward-looking words as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “confidence,” “may,” “plan,” “potential,” “should,” “will” and “would,” or similar expressions. Actual results and events in future periods may differ materially from those expressed or implied by these forward-looking statements because of a number of risks, uncertainties and other factors, including: intense competition; Dell’s reliance on third-party suppliers for product components, including reliance on several single-sourced or limited-sourced suppliers; Dell’s ability to achieve favorable pricing from its vendors; weak global economic conditions and instability in financial markets; Dell’s ability to manage effectively the change involved in implementing strategic initiatives; successful implementation of Dell’s acquisition strategy; Dell’s cost-efficiency measures; Dell’s ability to effectively manage periodic product and services transitions; Dell’s ability to deliver consistent quality products and services; Dell’s ability to generate substantial non-U.S. net revenue; Dell’s product, customer, and geographic sales mix, and seasonal sales trends; the performance of Dell’s sales channel partners; access to the capital markets by Dell or its customers; weak economic conditions and additional regulation affecting our financial services activities; counterparty default; customer terminations of or pricing changes in services contracts, or Dell’s failure to perform as it anticipates at the time it enters into services contracts; loss of government contracts; Dell’s ability to obtain licenses to intellectual property developed by others on commercially reasonable and competitive terms; infrastructure disruptions; cyber attacks or other data security breaches; Dell’s ability to hedge effectively its exposure to fluctuations in foreign currency exchange rates and interest rates; expiration of tax holidays or favorable tax rate structures, or unfavorable outcomes in tax audits and other compliance matters; impairment of portfolio investments; unfavorable results of legal proceedings; Dell’s ability to attract, retain, and motivate key personnel; Dell’s ability to maintain strong internal controls; changing environmental and safety laws; the effect of armed hostilities, terrorism, natural disasters, and public health issues; and other risks and uncertainties discussed in Dell’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for its fiscal year ended February 3, 2012. In particular, Dell’s expectations with regard to cash flow from operations, net income and non-GAAP earnings per share for the full fiscal year ending Feb. 1, 2013 assume, among other matters, that there is no significant decline in economic conditions generally or demand growth specifically, that macroeconomic uncertainties do not materialize into significant economic difficulties, no significant change in product mix patterns, and continued geographic customer demand trends. In particular, Dell’s expectations with regard to second quarter revenue amounts assume, among other matters, that there is no significant decline in economic conditions generally or demand growth specifically, that macroeconomic uncertainties do not materialize into significant economic difficulties, no significant change in product mix patterns, and continued geographic customer demand trends. Dell assumes no obligation to update its forward-looking statements.

Consolidated statements of income, financial position and cash flows and other financial data follow.

Dell is a trademark of Dell Inc. Dell disclaims any proprietary interest in the marks and names of others.

Condensed Consolidated Statement of Income and Related Financial Highlights
(in millions, except per share data and percentages)
Three Months Ended % Growth Rates
May 4, February 3, April 29,
  2012     2012     2011   Sequential Yr. to Yr.
Net revenue
Products $ 11,423 $ 12,925 $ 12,059 (12 %) (5 %)
Services, including software related   2,999     3,106     2,958   (3 %) 1 %
  14,422     16,031     15,017   (10 %) (4 %)
Cost of net revenue
Products 9,330 10,521 9,436 (11 %) (1 %)
Services, including software related   2,025     2,125     2,149   (5 %) (6 %)
Total cost of net revenue   11,355     12,646     11,585   (10 %) (2 %)
Gross margin 3,067 3,385 3,432 (9 %) (11 %)
Operating expenses
Selling, general and administrative 2,009 2,218 2,025 (9 %) (1 %)
Research, development and engineering   234     236     195   (1 %) 20 %
Total operating expenses   2,243     2,454     2,220   (9 %) 1 %
Operating income 824 931 1,212 (11 %) (32 %)
Interest and other, net   (32 )   (24 )   (42 ) (32 %) 25 %
Income before income taxes 792 907 1,170 (13 %) (32 %)
Income tax provision   157     143     225   9 % (30 %)
Net income $ 635   $ 764   $ 945   (17 %) (33 %)
Earnings per share:
Basic $ 0.36   $ 0.43   $ 0.50   (16 %) (28 %)
Diluted $ 0.36   $ 0.43   $ 0.49   (16 %) (27 %)
Weighted average shares outstanding:
Basic 1,759 1,778 1,908 (1 %) (8 %)
Diluted 1,774 1,796 1,923 (1 %) (8 %)
Gross margin 21.3 % 21.1 % 22.9 %
Selling, general and administrative 13.9 % 13.8 % 13.5 %
Research and development 1.7 % 1.5 % 1.3 %
Operating expenses 15.6 % 15.3 % 14.8 %
Operating income 5.7 % 5.8 % 8.1 %
Income before income taxes 5.5 % 5.7 % 7.8 %
Net income 4.4 % 4.8 % 6.3 %
Income tax rate 19.8 % 15.8 % 19.2 %
Servers and Networking $ 2,017 $ 2,220 $ 1,973 (9 %) 2 %
Storage 444 500 481 (11 %) (8 %)
Services 2,071 2,179 1,984 (5 %) 4 %
Software and Peripherals 2,386 2,558 2,567 (7 %) (7 %)
Mobility 4,236 4,877 4,716 (13 %) (10 %)
Desktop PCs   3,268     3,697     3,296   (12 %) (1 %)
Consolidated net revenue $ 14,422   $ 16,031   $ 15,017   (10 %) (4 %)
Servers and Networking 14 % 14 % 13 %
Storage 3 % 3 % 3 %
Services 14 % 14 % 13 %
Software and Peripherals 17 % 16 % 17 %
Mobility 29 % 30 % 32 %
Desktop PCs 23 % 23 % 22 %
Large Enterprise $ 4,436 $ 4,982 $ 4,587 (11 %) (3 %)
Public 3,466 3,833 3,621 (10 %) (4 %)
Small and Medium Business 3,477 3,560 3,355 (2 %) 4 %
Consumer   3,043     3,656     3,454   (17 %) (12 %)
Consolidated net revenue $ 14,422   $ 16,031   $ 15,017   (10 %) (4 %)
Large Enterprise 31 % 31 % 31 %
Public 24 % 24 % 24 %
Small and Medium Business 24 % 22 % 22 %
Consumer 21 % 23 % 23 %
Large Enterprise $ 402 $ 467 $ 516
Public 271 312 352
Small and Medium Business 389 399 435
Consumer   32     61     170  
Segment operating income 1,094 1,239 1,473
Broad based long-term incentives (84 ) (96 ) (97 )
Amortization of intangible assets (110 ) (104 ) (92 )
Severance and facility actions and acquisition-related   (76 )   (108 )   (72 )
Consolidated operating income $ 824   $ 931   $ 1,212  
Note: Percentage growth rates and ratios are calculated based on underlying data in thousands.

(1) Segment Results for Fiscal 2012 have been recast to conform to segment realignments that were completed during the first quarter of Fiscal 2013. See Supplemental Segment Information at the end of these financial tables for more information.

Condensed Consolidated Statement of Financial Position and Related Financial Highlights
(in millions, except for "Ratios")
May 4, February 3, April 29,
  2012     2012     2011  
Current assets:
Cash and cash equivalents $ 12,814 $ 13,852 $ 14,061
Short-term investments 901 966 418
Accounts receivable, net 6,289 6,476 6,196
Short-term financing receivables, net 3,200 3,327 3,205
Inventories, net 1,472 1,404 1,276
Other current assets   3,369     3,423     3,217  
Total current assets 28,045 29,448 28,373
Property, plant and equipment, net 2,119 2,124 1,987
Long-term investments 3,501 3,404 762
Long-term financing receivables, net 1,342 1,372 1,123
Goodwill 6,005 5,838 5,406
Purchased intangible assets, net 1,801 1,857 1,941
Other non-current assets   476     490     196  
Total assets $ 43,289   $ 44,533   $ 39,788  
Current liabilities:
Short-term debt $ 3,186 $ 2,867 $ 816
Accounts payable 10,970 11,656 10,442
Accrued and other 3,076 3,934 3,590
Short-term deferred services revenue   3,582     3,544     3,282  
Total current liabilities 20,814 22,001 18,130
Long-term debt 5,813 6,387 6,794
Long-term deferred services revenue 3,837 3,836 3,608
Other non-current liabilities   3,468     3,392     2,886  
Total liabilities 33,932 35,616 31,418
Total stockholders' equity   9,357     8,917     8,370  
Total liabilities and equity $ 43,289   $ 44,533   $ 39,788  
Days of sales outstanding (1) 43 42 40
Days supply in inventory 12 11 10
Days in accounts payable   (87 )   (89 )   (81 )
Cash conversion cycle   (32 )   (36 )   (31 )
Average total revenue/unit (approximate) $ 1,360 $ 1,330 $ 1,380
Note: Ratios are calculated based on underlying data in thousands.

(1) Days of sales outstanding (“DSO”) is based on the ending net trade receivables and most recent quarterly revenue for each period. DSO includes the effect of product costs related to customer shipments not yet recognized as revenue that are classified in other current assets. At May 4, 2012, February 3, 2012, and April 29, 2011, DSO and days of customer shipments not yet recognized were 39 and 4 days, 39 and 3 days, 37 and 3 days, respectively.

Condensed Consolidated Statements of Cash Flows
(in millions, unaudited)
Three Months Ended
May 4, April 29,
  2012     2011  
Cash flows from operating activities:
Net income $ 635 $ 945
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 248 216
Stock-based compensation 95 99
Effects of exchange rate changes on monetary assets and
liabilities denominated in foreign currencies (10 ) -
Deferred Income Taxes 47 (63 )
Provision for doubtful accounts - including financing receivables 63 47
Other (5 ) (5 )
Changes in assets and liabilities, net of effects from acquisitions:
Accounts receivable 161 471
Financing receivables 71 21
Inventories (68 ) 38
Other assets 48 110
Accounts payable (671 ) (925 )
Deferred services revenue 33 191
Accrued and other liabilities   (785 )   (680 )
Change in cash from operating activities   (138 )   465  
Cash flows from investing activities:
Purchases (673 ) (240 )
Maturities and sales 640 222
Capital expenditures (142 ) (137 )
Proceeds from sale of facility and land - 12
Collections on purchased financing receivables 55 67
  (245 )   (1,473 )
  (365 )   (1,549 )
Cash flows from financing activities:
Repurchase of common stock (324 ) (450 )
Issuance of common stock under employee plans 38 10
13 -
Proceeds from debt 596 1,930
(863 ) (323 )
Other   8     3  
  (532 )   1,170  
  (3 )   62  
(1,038 ) 148
  13,852     13,913  
$ 12,814   $ 14,061  
The tables on the following pages set forth, for the periods indicated, a reconciliation of non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income, and non-GAAP earnings per share (collectively, the “non-GAAP financial measures”) to the most comparable GAAP financial measures. These non-GAAP financial measures may not be directly comparable to similarly titled measures reported by other companies. See “Use of Non-GAAP Financial Measures” following the tables for additional information regarding Dell’s reasons for including the non-GAAP financial measures and for material limitations with respect to the usefulness of these measures.
Reconciliation of Non-GAAP Financial Measures
(in millions, except per share data and percentages)
Three Months Ended % Growth Rates
May 4, February 3, April 29,
  2012     2012     2011   Sequential Yr. to Yr.
GAAP gross margin $ 3,067 $ 3,385 $ 3,432 (9 %) (11 %)
Non-GAAP adjustments:
Amortization of intangibles 88 83 71
Severance and facility actions and acquisition-related   12     15     8  
Non-GAAP gross margin $ 3,167   $ 3,483   $ 3,511   (9 %) (10 %)
GAAP operating expenses $ 2,243 $ 2,454 $ 2,220 (9 %) 1 %
Non-GAAP adjustments:
Amortization of intangibles (22 ) (21 ) (21 )
Severance and facility actions and acquisition-related   (64 )   (93 )   (64 )
Non-GAAP operating expenses $ 2,157   $ 2,340   $ 2,135   (8 %) 1 %
GAAP operating income $ 824 $ 931 $ 1,212 (11 %) (32 %)
Non-GAAP adjustments:
Amortization of intangibles 110 104 92
Severance and facility actions and acquisition-related   76     108     72  
Non-GAAP operating income $ 1,010   $ 1,143   $ 1,376   (12 %) (27 %)
GAAP net income $ 635 $ 764 $ 945 (17 %) (33 %)
Non-GAAP adjustments:
Amortization of intangibles 110 104 92
Severance and facility actions and acquisition-related 76 108 72
Aggregate adjustment for income taxes   (60 )   (63 )   (59 )
Non-GAAP net income $ 761   $ 913   $ 1,050   (17 %) (28 %)
GAAP earnings per share - diluted $ 0.36 $ 0.43 $ 0.49 (16 %) (27 %)
Non-GAAP adjustments per share - diluted   0.07     0.08     0.06  
Non-GAAP earnings per share - diluted $ 0.43   $ 0.51   $ 0.55   (16 %) (22 %)
Diluted WAS 1,774 1,796 1,923
GAAP gross margin 21.3 % 21.1 % 22.9 %
Non-GAAP adjustment   0.7 %   0.6 %   0.5 %
Non-GAAP gross margin   22.0 %   21.7 %   23.4 %
GAAP operating expenses 15.6 % 15.3 % 14.8 %
Non-GAAP adjustment   (0.6 %)   (0.7 %)   (0.6 %)
Non-GAAP operating expenses   15.0 %   14.6 %   14.2 %
GAAP operating income 5.7 % 5.8 % 8.1 %
Non-GAAP adjustment   1.3 %   1.3 %   1.1 %
Non-GAAP operating income   7.0 %   7.1 %   9.2 %
GAAP net income 4.4 % 4.8 % 6.3 %
Non-GAAP adjustment   0.9 %   0.9 %   0.7 %
Non-GAAP net income   5.3 %   5.7 %   7.0 %
Note: Percentage growth rates and ratios are calculated based on underlying data in thousands.
Dell uses non-GAAP financial measures to supplement the financial information presented on a GAAP basis. Dell believes that excluding certain items from Dell’s GAAP results allows Dell’s management to better understand Dell’s consolidated financial performance from period to period and in relationship to the operating results of Dell’s segments, as management does not believe that the excluded items are reflective of Dell's underlying operating performance. Dell also believes that excluding certain items from Dell’s GAAP results allows Dell’s management to better project Dell’s future consolidated financial performance because Dell’s forecasts are developed at a level of detail different from that used to prepare GAAP-based financial measures. Moreover, Dell believes these non-GAAP financial measures will provide investors with useful information to help them evaluate Dell's operating results by facilitating an enhanced understanding of Dell's operating performance, and enabling them to make more meaningful period to period comparisons. Non-GAAP projections for Fiscal 2013, which are forward looking non-GAAP financial measures, exclude acquisition-related charges, severance and facility action costs, and amortization of purchased intangible assets related to acquisitions, some of which Dell cannot forecast with certainty or accuracy due to their inherently indefinite and contingent nature, thereby preventing Dell from reconciling its projections to GAAP. The historical non-GAAP financial measures, as defined by Dell, represent the comparable GAAP measures adjusted to exclude these same items. Dell provides more detail below regarding each of these items and our reasons for excluding them. In future fiscal periods, Dell expects that it may again exclude such items and may incur income and expenses similar to these excluded items. Accordingly, the exclusion of these items and other similar items in Dell’s non-GAAP presentation should not be interpreted as implying that these items are non-recurring, infrequent, or unusual.
The non-GAAP financial measures for the periods indicated in the tables above reflect adjustments related to the following items:
Severance and Facility Actions and Acquisition-related Costs - Severance and facility action costs are primarily related to facilities charges including accelerated depreciation and severance and benefits for employees terminated pursuant to cost synergies related to strategic acquisitions and actions taken as part of a comprehensive review of costs. Acquisition-related charges are expensed as incurred and consist primarily of retention payments, integration costs, and other costs. Retention payments include stock-based compensation and cash incentives awarded to employees, which are recognized over the vesting period. Integration costs primarily include IT costs related to the integration of IT systems and processes, costs related to the integration of employees, costs related to full-time employees who are working on the integration, and consulting expenses. Severance and facility actions and acquisition-related charges are inconsistent in amount and are significantly impacted by the timing and nature of these events. Therefore, although Dell may incur these types of expenses in the future, Dell believes eliminating these charges for purposes of calculating the non-GAAP financial measures facilitates a more meaningful evaluation of Dell’s current operating performance and comparisons to Dell’s past operating performance.
Amortization of Intangible Assets - Amortization of purchased intangible assets consists primarily of amortization of customer relationships, acquired technology, non-compete covenants, and trade names purchased in connection with business acquisitions. Dell incurs charges relating to the amortization of these intangibles, and those charges are included in Dell’s consolidated financial statements. Amortization charges for Dell’s purchased intangible assets are inconsistent in amount and are significantly impacted by the timing and magnitude of Dell’s acquisitions. Consequently, Dell excludes these charges for purposes of calculating the non-GAAP financial measures to facilitate a more meaningful evaluation of Dell’s current operating performance and comparisons to Dell’s past operating performance.
• The aggregate adjustment for income taxes is the estimated combined income tax effect for the adjustments mentioned above. The tax effects are determined based on the tax jurisdictions where the above items were incurred.
There are limitations to the use of non-GAAP financial measures. Dell's non-GAAP financial measures may not be comparable to similarly titled measures of other companies. Other companies, including companies in Dell’s industry, may calculate the non-GAAP financial measures differently than Dell does, limiting the usefulness of those measures for comparative purposes. In addition, items such as amortization of purchased intangible assets represent the loss in value of intangible assets over time. The expense associated with this loss in value is not included in the non-GAAP financial measures and such measures, therefore, do not reflect the full economic effect of such loss. Further, items such as severance and facility action costs and acquisition expenses that are excluded from the non-GAAP financial measures can have a material impact on earnings. Dell’s management compensates for the foregoing limitations by relying on Dell’s GAAP results and using non-GAAP financial measures supplementally or for projections when comparable GAAP measures are not available. The non-GAAP financial measures are not meant to be considered as indicators of performance in isolation from or as substitutes for gross margin, operating expenses, operating income, net income, and earnings per share prepared in accordance with GAAP and should be read only in conjunction with financial information presented on a GAAP basis. Dell provides detailed reconciliations of each historical non-GAAP financial measure to its most directly comparable GAAP measure within the financial information included with this press release and in other written materials that include such non-GAAP historical financial measures, and Dell encourages investors to review the reconciliations in conjunction with the presentation of any historical non-GAAP financial measures.
Dell Inc
Supplemental Segment Information
(in millions, unaudited)
Three Months Ended Fiscal Year Ended
April 30, 2010 July 30, 2010 October 29, 2010 January 28, 2011 January 28, 2011
As Reported Recast Variance As Reported Recast Variance As Reported Recast Variance As Reported Recast Variance As Reported Recast Variance
Large Enterprise $ 4,246 $ 4,341 $ 95 $ 4,549 $ 4,618 $ 69 $ 4,326 $ 4,389 $ 63 $ 4,692 $ 4,763 $ 71 $ 17,813 $ 18,111 $ 298
Public 3,856 3,708 (148 ) 4,580 4,467 (113 ) 4,442 4,340 (102 ) 3,973 3,862 (111 ) 16,851 16,377 (474 )
Small and Medium Business 3,524 3,096 (428 ) 3,535 3,083 (452 ) 3,665 3,179 (486 ) 3,749 3,250 (499 ) 14,473 12,608 (1,865 )
Consumer   3,248     3,729     481     2,870     3,366     496     2,961     3,486     525     3,278     3,817     539     12,357     14,398     2,041  
Consolidated net revenue $ 14,874   $ 14,874   $ -   $ 15,534   $ 15,534   $ -   $ 15,394   $ 15,394   $ -   $ 15,692   $ 15,692   $ -   $ 61,494   $ 61,494   $ -  
Large Enterprise 28 % 29 % 1 % 29 % 30 % 1 % 28 % 28 % 0 % 30 % 30 % 0 % 29 % 29 % 0 %
Public 26 % 25 % -1 % 30 % 29 % -1 % 29 % 28 % -1 % 25 % 25 % 0 % 27 % 27 % 0 %
Small and Medium Business 24 % 21 % -3 % 23 % 20 % -3 % 24 % 21 % -3 % 24 % 21 % -3 % 24 % 21 % -3 %
Consumer 22 % 25 % 3 % 18 % 21 % 3 % 19 % 23 % 4 % 21 % 24 % 3 % 20 % 23 % 3 %
Large Enterprise $ 283 $ 293 $ 10 $ 288 $ 289 $ 1 $ 400 $ 398 $ (2 ) $ 502 $ 510 $ 8 $ 1,473 $ 1,490 $ 17
Public 298 280 (18 ) 369 363 (6 ) 451 450 (1 ) 366 353 (13 ) 1,484 1,446 (38 )
Small and Medium Business 313 301 (12 ) 323 298 (25 ) 391 365 (26 ) 450 419 (31 ) 1,477 1,383 (94 )
Consumer   17     37     20     (21 )   9     30     -     29     29     69     105     36     65     180     115  
Segment operating income $ 911   $ 911   $ -   $ 959   $ 959   $ -   $ 1,242   $ 1,242   $ -   $ 1,387   $ 1,387   $ -   $ 4,499   $ 4,499   $ -  
Three Months Ended Fiscal Year Ended
April 29, 2011 July 29, 2011 October 28, 2011 February 3, 2012 February 3, 2012
As Reported Recast Variance As Reported Recast Variance As Reported Recast Variance As Reported Recast Variance As Reported Recast Variance
Large Enterprise $ 4,477 $ 4,587 $ 110 $ 4,584 $ 4,677 $ 93 $ 4,487 $ 4,540 $ 53 $ 4,909 $ 4,982 $ 73 $ 18,457 $ 18,786 $ 329
Public 3,767 3,621 (146 ) 4,457 4,329 (128 ) 4,375 4,287 (88 ) 3,949 3,833 (116 ) 16,548 16,070 (478 )
Small and Medium Business 3,768 3,355 (413 ) 3,709 3,306 (403 ) 3,712 3,326 (386 ) 3,977 3,560 (417 ) 15,166 13,547 (1,619 )
Consumer   3,005     3,454     449     2,908     3,346     438     2,791     3,212     421     3,196     3,656     460     11,900     13,668     1,768  
Consolidated net revenue $ 15,017   $ 15,017   $ -   $ 15,658   $ 15,658   $ -   $ 15,365   $ 15,365   $ -   $ 16,031   $ 16,031   $ -   $ 62,071   $ 62,071   $ -  
Large Enterprise 30 % 31 % 1 % 29 % 30 % 1 % 29 % 29 % 0 % 30 % 31 % 1 % 30 % 30 % 0 %
Public 25 % 24 % -1 % 28 % 28 % 0 % 29 % 28 % -1 % 25 % 24 % -1 % 27 % 26 % -1 %
Small and Medium Business 25 % 22 % -3 % 24 % 21 % -3 % 24 % 22 % -2 % 25 % 22 % -3 % 24 % 22 % -2 %
Consumer 20 % 23 % 3 % 19 % 21 % 2 % 18 % 21 % 3 % 20 % 23 % 3 % 19 % 22 % 3 %
Large Enterprise $ 504 $ 516 $ 12 $ 448 $ 460 $ 12 $ 441 $ 446 $ 5 $ 461 $ 467 $ 6 $ 1,854 $ 1,889 $ 35
Public 370 352 (18 ) 484 466 (18 ) 463 454 (9 ) 327 312 (15 ) 1,644 1,584 (60 )
Small and Medium Business 463 435 (28 ) 404 380 (24 ) 386 367 (19 ) 412 399 (13 ) 1,665 1,581 (84 )
Consumer   136     170     34     73     103     30     76     99     23     39     61     22     324     433     109  
Segment operating income $ 1,473   $ 1,473   $ -   $ 1,409   $ 1,409   $ -   $ 1,366   $ 1,366   $ -   $ 1,239   $ 1,239   $ -   $ 5,487   $ 5,487   $ -  

(1) In the first quarter of Fiscal 2013, Dell made certain segment realignments in order to conform to the way Dell internally manages segment performance. These realignments affected all of Dell's operating segments, but primarily consisted of the transfer of small office business customers from the Small and Medium Business segment to the Consumer Segment. Dell has recast prior period amounts to provide visibility and comparability. None of these changes impacts Dell's previously reported consolidated net revenue, gross margin, operating income, net income, or earnings per share.

Report Examines Financing Innovations of Emerging Markets, With Implications for All -

A year-long study of leading trends and innovations in emerging-market financial services will be released next week. The report, by the World Economic Forum, will likely turn heads in the corridors of financial institutions worldwide.

The rising stars in the Forum’s study are financial firms from emerging economies like Thailand, Brazil, Malaysia, India and China rather than the usual corporate names from Wall Street, the City, and other developed-world financial capitals.

After a decade in which developing countries have taken the lead in driving global economic growth, the financial providers in those countries also now lead the world in investment returns to their shareholders. In addition, those providers now count among the world’s most creative financial innovators, as the study’s 33 real-world case studies will document.

In short, emerging-market financial providers are growing very large, very quickly. That evolution is changing the facts and the face of financial competition on the world stage.

The report, titled “Redefining the Emerging Market Opportunity: Driving Growth through Financial Services Innovation,” will be released on Thursday at the World Economic Forum’s East Asia Summit in Bangkok. It was produced by the Forum in collaboration with the Boston Consulting Group, a global management consulting firm, and in cooperation with scores of Forum stakeholders and international financial experts.

“For financial providers committed to understanding and unlocking the potential,” the report will note, “there is an unparalleled opportunity to build long-term growth and superior shareholder value. At the same time, providers can help empower lower-income people by providing financial access and a potential path from poverty.”

The study’s researchers, in their quest for “leapfrog” innovations, decided early on to focus on three specific areas of emerging-market finance: consumer financial services, financing for small and medium-size enterprises and corporate bond markets.

There were two powerful reasons for this emphasis. First, all three of these financial service sectors are drivers of economic growth across emerging markets, and therefore the world at large. Because these sectors drive economic growth, they are also, in different ways, keys to boosting employment, prosperity, stability and opportunity. This aspect of the report’s research will provide useful context for one of the key questions delegates to the Forum’s East Asia Summit will be asked to consider next week: How can the high economic growth economies of Asean help rebalance both the global and the regional economic outlook?

Second, it quickly became apparent that these three sectors also represent the most compelling and powerful opportunities for financial institutions and their investors to achieve long-term business growth and shareholder return.

The report offers surprising and counterintuitive research on the subject of consumer financial services in emerging markets, where the enormous potential of consumers to drive economic growth is barely tapped. The study documents how some financial innovators are already benefiting by embracing inclusion of the poor and describes the “white space” opportunities for emerging-market growth for providers of mass-market services and products.

The report also breaks new ground on the subject of financing for small and medium-size enterprises. SMEs, as they are known, are a substantial source of employment and economic growth in developed and developing countries alike. Yet traditional banks have long neglected SMEs’ credit needs. Now, some enterprising financial institutions in emerging markets are innovating ways to fill this gap, according to the report, which assesses the most compelling of those innovations.

Finally, the report tackles the complex issue of corporate bond markets, which few emerging countries have succeeded in establishing despite the many broad benefits such markets provide. The report assesses recent successes and lays out the sequential path of development these markets require.

As the Forum’s report ably documents, many emerging-market financial providers have advanced by adopting highly innovative approaches in their home markets. They have overcome infrastructure limitations and addressed local needs through creative distribution models, risk practices and partnerships. Some institutions, for example, can effectively disburse financing to small business customers within 10 minutes through electronic channels and without documentation or guarantor requirements.

More broadly — by taking the market’s pulse in Africa, Latin America, the Middle East, emerging Europe and Asia — the report documents the new shape of global competition as emerging market financial players achieve world-class status.

Kevin Steinberg is the chief operating officer of the World Economic Forum USA, based in New York.

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