Cost-Cutting Helped Air France-KLM Trim Operating Loss in 2012

PARIS — An aggressive cost-cutting effort at Air France-KLM showed the first faint signs of bearing fruit on Friday, as the airline said it had managed to trim its operating losses last year despite a weakening European economy and higher fuel prices.

Air France-KLM, Europe's third-largest airline by passengers, recorded an operating loss of 300 million euros, or about $400 million, for 2012, compared with a 353 million euro loss a year earlier, as efforts to rein in seat capacity led to higher average fares. Revenue for the year rose 5.2 percent to 25.6 billion euros, while net debt declined to 6 billion euros from 6.5 billion euros in 2011.

But one-time expenses associated with a deep restructuring begun last year widened the airline’s net loss to 1.19 billion euros from 809 million euros in 2011.

“They have made a good start, but it is an improvement that is still just barely visible,” said Yan Derocles, an airline analyst at Oddo Securities in Paris.

Air France-KLM unveiled plans last June to shave more than 2 billion euros in costs, reduce debt and return to profit by the end of 2015. Despite the modest improvements achieved in the plan’s first six months, Jean-Cyril Spinetta, the group’s chief executive, stressed Friday in a statement that the company had laid the ground work for a more significant recovery this year.

“In 2013, we will maintain strict discipline in terms of capacity management, investments and costs,” Mr. Spinetta said.

Air France-KLM said passenger traffic rose by 2.1 percent last year, while seat capacity increased by just 0.6 percent. But while revenues per available seat rose by 5.9 percent from a year earlier, cargo revenues continued to slide, falling by 6.3 percent despite a 3.5 percent drop in capacity, as the economic slowdown reduced goods shipments.

Despite intense pressure from the French government to avoid layoffs, Air France-KLM moved ahead with plans in 2012 to slash more than 5,100 jobs at its Air France unit by the end of this year — just over 10 percent of its work force of 49,000. Another 1,300 jobs are being eliminated at its smaller KLM unit.

Philippe Calavia, the group’s chief executive officer, said Friday that the group had reduced staff by around 2,000 in 2012 through early retirements and other voluntary departures. Restructuring costs linked to those job cuts amounted to 471 million euros in 2012.

Labor costs have been a major drain on profit at Air France-KLM for years — equivalent to more than 30 percent of the group’s total revenue and even exceeding its fuel bill, which amounts to around 26 percent. By contrast, labor costs as a share of revenue are less than 10 percent at its low-cost rival Ryanair and 12.4 percent at EasyJet, according to the Center for Aviation in Brussels.

Given the uncertain outlook for the European economy this year, Air France-KLM declined to provide a forecast for 2013, although Mr. Calavia maintained the company’s targets of reaching net profit within two years. Analysts said they expected a modest improvement in operating profit this year, although annual restructuring costs were also expected to rise, possibly above 500 million euros.

Air France-KLM continues to lag behind its larger rival, Lufthansa of Germany, in its efforts to return to profitability. Lufthansa, which announced its own painful restructuring last year that involved 3,500 job losses. Lufthansa this week reported a net 2012 profit of 990 million euros, bolstered by asset sales, compared with a loss of 13 million euros in 2011. The German carrier also suspended dividend payments to shareholders in order to make more cash available to finance its turnaround.

Read More..

The New Old Age Blog: For Traumatized Caregivers, Therapy Helps

I recently wrote about caregivers who experienced symptoms of traumatic-like stress, and readers responded with heart-rending stories. Many described being haunted by distress long after a relative died.

Especially painful, readers said, was witnessing a loved one’s suffering and feeling helpless to do anything about it.

The therapists I spoke with said they often encountered symptoms among caregivers similar to those shown by people with post-traumatic stress — intrusive thoughts, disabling anxiety, hyper-vigilance, avoidance behaviors and more — even though research documenting this reaction is scarce. Improvement with treatment is possible, they say, although a sense of loss may never disappear completely.

I asked these professionals for stories about patients to illustrate the therapeutic process. Read them below and you’ll notice common themes. Recovery depends on unearthing the source of psychological distress and facing it directly rather than pushing it away. Learning new ways of thinking can change the tenor of caregiving, in real time or in retrospect, and help someone recover a sense of emotional balance.

Barry Jacobs, a clinical psychologist and author of “The Emotional Survival Guide for Caregivers” (Guilford Press, 2006), was careful to distinguish normal grief associated with caregiving from a traumatic-style response.

“Nightmares, lingering bereavement or the mild re-experiencing of events that doesn’t send a person into a panic every time is normal” and often resolves with time, he said.

Contrast that with one of his patients, a Greek-American woman who assisted her elderly parents daily until her father, a retired firefighter, went to the hospital for what doctors thought would be a minor procedure and died there of a heart attack in the middle of the night.

Every night afterward, at exactly 3 a.m., this patient awoke in a panic from a dream in which a phone was ringing. Unable to go back to sleep for hours, she agonized about her father dying alone at that hour.

The guilt was so overwhelming, the woman couldn’t bear to see her mother, talk with her sisters or concentrate at work or at home. Sleep deprived and troubled by anxiety, she went to see her doctor, who works in the same clinic as Dr. Jacobs and referred her to therapy.

The first thing Dr. Jacobs did was to “identify what happened to this patient as traumatic, and tell her acute anxiety was an understandable response.” Then he asked her to “grieve her father’s death” by reaching out to her siblings and her mother and openly expressing her sadness.

Dr. Jacobs also suggested that this patient set aside a time every day to think about her father — not just the end of his life, but also all the things she had loved about him and the good times they’d had together as a family.

Don’t expect your night time awakenings to go away immediately, the psychologist told his patient. Instead, plan for how you’re going to respond when these occur.

Seven months later, the patient reported her panic at a “3 or 4” level instead of a “10” (the highest possible number), Dr. Jacobs said.

“She’ll say, ‘oh, there’s the nightmare again,’ and she can now go back to sleep fairly quickly,” he continued. “Research about anxiety tells us that the more we face what we fear, the quicker we are to extinguish our fear response and the better able we are to tolerate it.”

Sara Qualls, a professor of psychology at the University of Colorado in Colorado Springs, said it’s natural for caregivers to be disgusted by some of what they have to do — toileting a loved one, for instance — and to be profoundly conflicted when they try to reconcile this feeling with a feeling of devotion. In some circumstances, traumatic-like responses can result.

Her work entails naming the emotion the caregiver is experiencing, letting the person know it’s normal, and trying to identify the trigger.

For instance, an older man may come in saying he’s failed his wife with dementia by not doing enough for her. Addressing this man’s guilt, Dr. Qualls may find that he can’t stand being exposed to urine or feces but has to help his wife go to the bathroom. Instead of facing his true feelings, he’s beating up on himself psychologically — a diversion.

Once a conflict of this kind is identified, Dr. Qualls said she can help a person deal with the trigger by using relaxation exercises and problem-solving techniques, or by arranging for someone else to do a task that he or she simply can’t tolerate.

Asked for an example, Dr. Qualls described a woman who traveled to another state to see her mother, only to find her in a profound disheveled, chaotic state. Her mother said that she didn’t want help, and her brother responded with disbelief. Soon, the woman’s blood pressure rose, and she began having nightmares.

In therapy, Dr. Qualls reassured the patient that her fear for her mother’s safety was reasonable and guided her toward practical solutions. Gradually, she was able to enlist her brother’s help and change her mother’s living situation, and her sense of isolation and helplessness dissipated.

“I think that a piece of the trauma reaction that is so devastating is the intense privacy of it,” Dr. Qualls said. “Our work helps people moderate their emotional reactivity through human contact, sharing and learning strategies to manage their responsiveness.”

Dolores Gallagher-Thompson, a professor of psychiatry at Stanford University School of Medicine in California, noted that stress can accumulate during caregiving and reach a tipping point where someone’s ability to cope is overwhelmed.

She tells of a vibrant, active woman in her 60s caring for an older husband who declined rapidly from dementia. “She’d get used to one set of losses, and then a new loss would occur,” Dr. Gallagher-Thompson said.

The tipping point came when the husband began running away from home and was picked up by the police several times. The woman dropped everything else and became vigilant, feeling as if she had to watch her husband day and night. Still, he would sneak away and became more and more difficult.

Both husband and wife had come from Jewish families caught up in the Holocaust during World War II, and the feeling of “complete and utter helplessness and hopelessness” that descended on this older woman was intolerable, Dr. Gallagher-Thompson said.

Therapy was targeted toward helping the patient articulate thoughts and feelings that weren’t immediately at the surface of her consciousness, like, for example, her terror at the prospect of abandonment. “I’d ask her ‘what are you afraid of? If you visualize your husband in a nursing home or assisted living, what do you see?’” Dr. Gallagher-Thompson said.

Then the conversation would turn to the choices the older woman had. Go and look at some long-term care places and see what you think, her psychologist suggested. You can decide how often you want to visit. “This isn’t an either-or — either you’re miserable 24/7 or you don’t love him,” she advised.

The older man went to assisted living, where he died not long afterward of pneumonia that wasn’t diagnosed right away. The wife fell into a depression, preoccupied with the thought that it was all her fault.

Another six months of therapy convinced her that she had done what she could for her husband. Today she works closely with her local Alzheimer’s Association chapter, “helping other caregivers learn how to deal with these kinds of issues in support groups,” Dr. Gallagher-Thompson said.

Read More..

The New Old Age Blog: For Traumatized Caregivers, Therapy Helps

I recently wrote about caregivers who experienced symptoms of traumatic-like stress, and readers responded with heart-rending stories. Many described being haunted by distress long after a relative died.

Especially painful, readers said, was witnessing a loved one’s suffering and feeling helpless to do anything about it.

The therapists I spoke with said they often encountered symptoms among caregivers similar to those shown by people with post-traumatic stress — intrusive thoughts, disabling anxiety, hyper-vigilance, avoidance behaviors and more — even though research documenting this reaction is scarce. Improvement with treatment is possible, they say, although a sense of loss may never disappear completely.

I asked these professionals for stories about patients to illustrate the therapeutic process. Read them below and you’ll notice common themes. Recovery depends on unearthing the source of psychological distress and facing it directly rather than pushing it away. Learning new ways of thinking can change the tenor of caregiving, in real time or in retrospect, and help someone recover a sense of emotional balance.

Barry Jacobs, a clinical psychologist and author of “The Emotional Survival Guide for Caregivers” (Guilford Press, 2006), was careful to distinguish normal grief associated with caregiving from a traumatic-style response.

“Nightmares, lingering bereavement or the mild re-experiencing of events that doesn’t send a person into a panic every time is normal” and often resolves with time, he said.

Contrast that with one of his patients, a Greek-American woman who assisted her elderly parents daily until her father, a retired firefighter, went to the hospital for what doctors thought would be a minor procedure and died there of a heart attack in the middle of the night.

Every night afterward, at exactly 3 a.m., this patient awoke in a panic from a dream in which a phone was ringing. Unable to go back to sleep for hours, she agonized about her father dying alone at that hour.

The guilt was so overwhelming, the woman couldn’t bear to see her mother, talk with her sisters or concentrate at work or at home. Sleep deprived and troubled by anxiety, she went to see her doctor, who works in the same clinic as Dr. Jacobs and referred her to therapy.

The first thing Dr. Jacobs did was to “identify what happened to this patient as traumatic, and tell her acute anxiety was an understandable response.” Then he asked her to “grieve her father’s death” by reaching out to her siblings and her mother and openly expressing her sadness.

Dr. Jacobs also suggested that this patient set aside a time every day to think about her father — not just the end of his life, but also all the things she had loved about him and the good times they’d had together as a family.

Don’t expect your night time awakenings to go away immediately, the psychologist told his patient. Instead, plan for how you’re going to respond when these occur.

Seven months later, the patient reported her panic at a “3 or 4” level instead of a “10” (the highest possible number), Dr. Jacobs said.

“She’ll say, ‘oh, there’s the nightmare again,’ and she can now go back to sleep fairly quickly,” he continued. “Research about anxiety tells us that the more we face what we fear, the quicker we are to extinguish our fear response and the better able we are to tolerate it.”

Sara Qualls, a professor of psychology at the University of Colorado in Colorado Springs, said it’s natural for caregivers to be disgusted by some of what they have to do — toileting a loved one, for instance — and to be profoundly conflicted when they try to reconcile this feeling with a feeling of devotion. In some circumstances, traumatic-like responses can result.

Her work entails naming the emotion the caregiver is experiencing, letting the person know it’s normal, and trying to identify the trigger.

For instance, an older man may come in saying he’s failed his wife with dementia by not doing enough for her. Addressing this man’s guilt, Dr. Qualls may find that he can’t stand being exposed to urine or feces but has to help his wife go to the bathroom. Instead of facing his true feelings, he’s beating up on himself psychologically — a diversion.

Once a conflict of this kind is identified, Dr. Qualls said she can help a person deal with the trigger by using relaxation exercises and problem-solving techniques, or by arranging for someone else to do a task that he or she simply can’t tolerate.

Asked for an example, Dr. Qualls described a woman who traveled to another state to see her mother, only to find her in a profound disheveled, chaotic state. Her mother said that she didn’t want help, and her brother responded with disbelief. Soon, the woman’s blood pressure rose, and she began having nightmares.

In therapy, Dr. Qualls reassured the patient that her fear for her mother’s safety was reasonable and guided her toward practical solutions. Gradually, she was able to enlist her brother’s help and change her mother’s living situation, and her sense of isolation and helplessness dissipated.

“I think that a piece of the trauma reaction that is so devastating is the intense privacy of it,” Dr. Qualls said. “Our work helps people moderate their emotional reactivity through human contact, sharing and learning strategies to manage their responsiveness.”

Dolores Gallagher-Thompson, a professor of psychiatry at Stanford University School of Medicine in California, noted that stress can accumulate during caregiving and reach a tipping point where someone’s ability to cope is overwhelmed.

She tells of a vibrant, active woman in her 60s caring for an older husband who declined rapidly from dementia. “She’d get used to one set of losses, and then a new loss would occur,” Dr. Gallagher-Thompson said.

The tipping point came when the husband began running away from home and was picked up by the police several times. The woman dropped everything else and became vigilant, feeling as if she had to watch her husband day and night. Still, he would sneak away and became more and more difficult.

Both husband and wife had come from Jewish families caught up in the Holocaust during World War II, and the feeling of “complete and utter helplessness and hopelessness” that descended on this older woman was intolerable, Dr. Gallagher-Thompson said.

Therapy was targeted toward helping the patient articulate thoughts and feelings that weren’t immediately at the surface of her consciousness, like, for example, her terror at the prospect of abandonment. “I’d ask her ‘what are you afraid of? If you visualize your husband in a nursing home or assisted living, what do you see?’” Dr. Gallagher-Thompson said.

Then the conversation would turn to the choices the older woman had. Go and look at some long-term care places and see what you think, her psychologist suggested. You can decide how often you want to visit. “This isn’t an either-or — either you’re miserable 24/7 or you don’t love him,” she advised.

The older man went to assisted living, where he died not long afterward of pneumonia that wasn’t diagnosed right away. The wife fell into a depression, preoccupied with the thought that it was all her fault.

Another six months of therapy convinced her that she had done what she could for her husband. Today she works closely with her local Alzheimer’s Association chapter, “helping other caregivers learn how to deal with these kinds of issues in support groups,” Dr. Gallagher-Thompson said.

Read More..

Gadgetwise Blog: Q&A: Moving the Mac’s Dock

It’s easy to move the Taskbar to a different edge of the screen on a Windows machine, but how do you move the Mac’s row of program icons from the bottom of the screen?

The Windows Taskbar — that row of program icons and open files that typically appears along the bottom edge of the screen — can be moved to the top or sides of the desktop by dragging it with the mouse, or in some later versions of Windows, by unlocking it first before dragging. The Dock, the Mac’s rough equivalent of the Taskbar, can also be moved to other edges of the screen in a few ways.

One method is to click the Mac’s Apple menu up in the top-left corner of the screen, select Dock and slide over to the submenu with the commands to position the dock on the left or right sides of the desktop. This same sub-menu holds options for automatically hiding the Dock on the screen until you pass the mouse cursor nearby, as well as the option for magnifying the icons stocked in the Dock when you pass the cursor over.

The Apple menu can take you right to the Dock’s settings in the Mac’s System Preferences if you want to fine-tune things further. You can also get to these settings by clicking the System Preferences icon in the Dock itself and clicking the Dock icon. In addition to the controls for positioning the Dock on the desktop, the preferences box contains settings for changing the overall size of it, adjusting the magnification size of the icons and other visual aspects of the Dock.

Read More..

India Ink: Can Doordarshan’s New Look Attract Profits?

A Doordarshan newscast from the late 1990s.

After it became the first TV channel in India in 1959, the public broadcaster Doordarshan enjoyed a monopoly on viewership for decades. Even after the government opened the airwaves to private players in 1992, Doordarshan enjoyed a 90 percent share of the audience in the 1990s and had no reason to take the threat of competition seriously.

Twenty years later, its rivals have not only caught up, but they have surpassed Doordarshan in terms of revenue. In the late 1990s, advertisers began to see Doordarshan, which dominates coverage in rural areas, as catering to only the lowest socioeconomic classes, and the public broadcaster slipped even further after an accounting scandal. Since then, Doordarshan has never turned a profit, and some media industry observers have even declared Doordarshan dead.

But Jawhar Sircar, chief executive of Prasar Bharati, the autonomous organization that includes Doordarshan and All India Radio, is betting that a complete overhaul of its TV programs, in both format and content, will draw the viewers that Doordarshan has lost to private satellite channels.

There is only one formula for success, said Mr. Sircar: “You bring out a good product, spend money, put in taste, autonomy and the right professionals, you will get the right product. You have the right product, you will get the right revenues,” he said.

Revenues are sorely needed at the government-financed broadcaster. According to the last five-year Broadcast Plan, which ended in March 2012, the Ministry of Information and Broadcasting spent 122 billion rupees ($2.2 billion) of taxpayers’ money to run Prasar Bharti, which generated only 60 billion rupees in revenue over the same period. That means a loss of 62 billion rupees, or more than $1 billion, over the five years.

Prasar Bharti accounts for about 60 percent of Ministry of Information and Broadcasting’s budget, and Doordarshan takes about half that amount, raising the rest of the money it needs through advertising.

Reliable data on Doordarshan’s viewership is difficult to find because the company that reports ratings, Television Audience Measurement, covers only satellite channels, and Doordarshan’s network, which now has 37 channels and four affiliated channels, is largely terrestrial. Doordarshan has sued Television Audience Measurement, accusing it of under-reporting its audience and costing the broadcaster advertising revenue.

The biggest move for Mr. Sircar, who took over in March 2012, was to push aside the appointed bureaucrats who ran operations even though they had no media experience. For the first time in its history, Doordarshan’s news channel, known as DD News, has hired several news professionals who have worked with CNN, Bloomberg and BBC for its board. DD News also poached top anchors at major Indian channels like NDTV and Times Now.

“This new team is one of the best DD has ever seen,” said Rajiv Mehrotra, managing trustee of the nonprofit Public Service Broadcasting Trust, referring to Doordarshan. “They have ensured that Prasar Bharati, especially DD, is breathing again.”

The main focus of the makeover is Doordarshan’s prime-time news program, “News Night,” which now tackles controversial topics – a marked change at a network that has been criticized for allowing the government to shape its media coverage in the past. The last time Doordarshan went through an overhaul was in 2003, a year before the national elections, and the Bharatiya Janata Party-controlled central government ordered Doordarshan to downplay certain events, like the deadly 2002 riots in Gujarat, a B.J.P. stronghold.

“DD News has always been known for dry reporting on government affairs,” said Paranjoy Guha Thakurta, an independent journalist who has worked with the public broadcaster.

On Wednesday night, DD News officially introduced its retooled show with a discussion on the state of the Indian TV news media and the role a public broadcaster should play, led by anchors already well known for their work at other channels, which lent the program a gravitas that had been missing when newsreaders used to present the news.

Given that this latest revamp also comes a year before national elections, many in the media industry are closely watching Doordarshan for any evidence of government meddling. Manish Tiwari, the information and broadcasting minister, promised at a news conference earlier this month that “this time, the government would keep an arm’s length from content and presentation of DD.”

But Rajiv Mehrotra, a longtime TV producer for Doordarshan, said Prasar Bharati’s “identity crisis” may limit the scope of the new changes.

“Prasar Bharati has to stay on the right side of the government as it gets a substantial monetary help from them, and it cannot go whole hog like the privately owned channels do,” he added.

Next in line for a makeover is the early morning show, with sharper reporting and market analysis planned, and then DD National, the entertainment channel, and DD Urdu.

On the technical side, Doordarshan will change from analog to digital transmitters, which will allow for enhanced picture quality, spectrum efficiency and multichannel transmission from a single transmitter. Other technological changes will allow Doordarshan to split screens so that more than one person can be shown on air, something private news channels have long been able to do.

Mr. Sircar also put the network’s outside broadcasting vans to use so that reporters could do live reports outside the studio. “We never used our O.B. vans. It was such a waste of our resources,” he said.

DD News is also getting a new, more polished look. At his office in New Delhi, Mr. Sircar pointed at two large TV screens, which displayed the new DD News format on one screen and an NDTV 24×7 format on the other. Both screens had four boxes with an expert in each one discussing swine flu in Delhi.

“See the similarity?” he asked. “There used to be a miserable green board behind a sleepy anchor on DD News before. We have changed the color scheme to make it in tune with the younger generation.”

While there may be a similarity in form and presentation between the private channels and DD News, there will never be a similarity in content, pledged Mr. Sircar. “We will stick to the ideals of public service broadcasting and never sensationalize news,” he said.

In the current five-year Broadcast Plan, which ends in March 2017, the government has agreed to raise the amount it gives Prasar Bharati to 132 billion rupees. Whether its faith in Mr. Sircar is rewarded, however, is uncertain.

“Now is the time,” said Mr. Thakurta, the independent journalist. “DD can become the Indian version of the BBC or Al Jazeera or just a mouthpiece of those in authority. Only time will tell.”

---

This post has been revised to reflect the following correction:

Correction: February 22, 2013

"An earlier version of this article misstated the year of the Gujarat riots, which happened in 2002, not 2003. "

Read More..

DealBook: Office Supply Rivals' Merger Leaked by a Wayward Report

8:56 p.m. | Updated

It was a paragraph buried on Page 4 of an earnings release, under the heading of “other matters.” Yet what those four sentences revealed sent bankers and lawyers who had been working all night on a deal scrambling early Wednesday morning.

The earnings release, from the office supplies chain Office Depot, appeared shortly after 7 a.m. and inadvertently disclosed the terms of a long-awaited merger between the company and OfficeMax. The announcement disappeared from the company’s Web site quickly, but not before a gaggle of news outlets began running full-fledged reports about the deal.

At that time, bankers and lawyers for the two companies were still negotiating the final language of the merger agreement. The mistaken early publication of the release — since blamed on the data provider Thomson Reuters — prompted Office Depot’s chief executive, Neil R. Austrian, to call up his counterpart at OfficeMax, Ravi K. Saligram, and apologize.

More than two hours later, the companies formally announced their combination.

The episode recalls other times that major company news was published prematurely. Last fall, Google’s third-quarter earnings were published three hours early; the technology giant blamed R. R. Donnelley & Sons, its filings agent, for the mistake.

The chief executives played down the inadvertent disclosure as a harmless mistake, since the announcement was scheduled before the markets opened anyway.

“When two big Fortune 500 companies merge, occasionally mishaps happen,” Mr. Saligram said in an interview.

And Thomson Reuters apologized in a statement, saying it regretted the error and would take steps to prevent such a mistake from happening again.

But people involved in the deal privately bemoaned the unexpectedly bumpy ride, which knocked off kilter a carefully choreographed announcement meant to emphasize what they called a transformative merger of equals.

The union will combine two of the big retailers of staples and notepads, a major effort to combat years of losing sales to bigger, nimbler rivals. Both chief executives said that combining their companies could yield $400 million to $600 million in cost savings. It will probably lead to significant job cuts, as the companies seek to shrink their combined footprint of over 2,500 stores.

Both companies disclosed big drops in their sales for the fourth quarter on Wednesday: Office Depot’s revenue slipped 12 percent from the year-ago period, to $2.6 billion, while OfficeMax’s fell 7.4 percent, to $1.7 billion.

And both have also been under pressure from investors. Office Depot is fending off Starboard Value, an activist hedge fund that holds a 14.8 percent stake and has called for a major change in strategy. And OfficeMax has contended with Neuberger Berman, an investor with a 5 percent stake that has called for bigger payouts to shareholders.

“The whole industry and every analyst thought this made sense,” Mr. Austrian said in an interview. “The timing was right at this point in time.”

Shares of Office Depot fell 16.7 percent on Wednesday, to $4.18, while those of OfficeMax slid 7 percent, to $12.09. The decline wiped out some of the gains both stocks enjoyed after word of the deal talks emerged on Monday.

Negotiations have been held in earnest since at least last summer, people briefed on the matter said.

One important negotiating point that was resolved early on was ensuring that the deal could be presented as a “merger of equals.” Though Office Depot is paying a premium for OfficeMax — it is issuing 2.69 new shares for each share of the target, valuing the smaller retailer at about $1.2 billion as of Tuesday’s closing prices — neither company’s chief has a lock as the leader of the combined company.

Indeed, both Mr. Austrian and Mr. Saligram will remain in place while board members from each company run a search for a new chief executive, which could be either man. Also undecided: the new company’s name and whether it will have its headquarters in Office Depot’s home of Boca Raton, Fla., or OfficeMax’s base in Naperville, Ill.

People involved in the deal said that the compromise, which took about two months to complete, was important in bringing both companies to the negotiating table.

“We both put our egos aside,” Mr. Austrian of Office Depot said. “It’s not a win for one side and a loss for another.”

Both Office Depot and OfficeMax also wanted to emphasize that they would remain competitors until the deal was approved by shareholders and antitrust regulators. That is a nod to the collapse of a proposed merger of Office Depot and Staples more than a decade ago, which was blocked on anticompetitive grounds and left Office Depot reeling for years.

Mr. Saligram of OfficeMax argued on a call with analysts that the regulatory environment has shifted since. Both companies have lost ground not only to Staples, but also to online outlets like Amazon.com and bulk retailers like Target and Wal-Mart Stores.

“This industry has completely changed,” he said.

Should the deal fall apart because of antitrust concerns, neither company will be liable for a termination fee, executives said on the analyst call.

Company executives and advisers also spent significant amounts of time negotiating with BC Partners, an investment firm that owns the equivalent of 22 percent of Office Depot’s stock. Under the terms of Wednesday’s deal, BC Partners will own no more than 5 percent of the combined company’s voting shares and will have no representatives on its board.

A version of this article appeared in print on 02/21/2013, on page B5 of the NewYork edition with the headline: Office Supply Rivals’ Merger Leaked by a Wayward Report.

Read More..

In Reversal, Florida to Take Health Law’s Medicaid Expansion

MIAMI — Gov. Rick Scott of Florida reversed himself on Wednesday and announced that he would expand his state’s Medicaid program to cover the poor, becoming the latest — and, perhaps, most prominent — Republican critic of President Obama’s health care law to decide to put it into effect.

It was an about-face for Mr. Scott, a former businessman who entered politics as a critic of Mr. Obama’s health care proposals. Florida was one of the states that sued to try to block the law. After the Supreme Court ruled last year that though the law was constitutional, states could choose not to expand their Medicaid programs to cover the poor, Mr. Scott said that Florida would not expand its programs.

Mr. Scott said Wednesday that he now supported a three-year expansion of Medicaid, through the period that the federal government has agreed to pay the full cost of the expansion, and before some of the costs are shifted to the states.

“While the federal government is committed to paying 100 percent of the cost, I cannot in good conscience deny Floridians that needed access to health care,” Mr. Scott said at a news conference. “We will support a three-year expansion of the Medicaid program under the new health care law as long as the federal government meets their commitment to pay 100 percent of the cost during that time.”

He said there were “no perfect options” when it came to the Medicaid expansion. “To be clear: our options are either having Floridians pay to fund this program in other states while denying health care to our citizens,” he said, “or using federal funding to help some of the poorest in our state with the Medicaid program as we explore other health care reforms.”

Mr. Scott said the state would not create its own insurance exchange to comply with another provision of the law.

His reversal sent ripples through the nation, especially given the change in tone and substance since the summer, when he said he would not create an exchange or expand Medicaid.

“Floridians are interested in jobs and economic growth, a quality education for their children, and keeping the cost of living low,” Mr. Scott said in a statement at the time. “Neither of these major provisions in Obamacare will achieve those goals, and since Florida is legally allowed to opt out, that’s the right decision for our citizens.”

Mr. Scott now joins the Republican governors of Arizona, Michigan, Nevada, New Mexico, North Dakota and Ohio, who have decided to join the Medicaid expansion. Some, like Gov. Jan Brewer of Arizona, were also staunch opponents of Mr. Obama’s overall health care law.

Shortly before his announcement, the governor received word from the federal government that it planned to grant Florida the final waiver needed to privatize Medicaid, a process the state initially undertook as a pilot project. Mr. Scott, who is running for re-election next year, has heavily lobbied for the waiver, arguing that Florida could not expand Medicaid without it.

Mr. Scott’s support of Medicaid expansion is significant, but is far from the last word. The program requires approval from Florida’s Republican-dominated Legislature, which has been averse to expanding Medicaid under the health care law. The Legislature’s two top Republican leaders said that before making a decision they would consider recommendations from a select committee, which has been asked to review the state’s options.

“The Florida Legislature will make the ultimate decision,” Will Weatherford, the state House speaker, said. “I am personally skeptical that this inflexible law will improve the quality of health care in our state and ensure our long-term financial stability.”

Medicaid, which covers three million people in Florida, costs the state $21 billion a year. The expansion would extend coverage to one million more people.

Mr. Scott’s reversal is sure to anger his original conservative supporters.

The governor “was elected because of his principled conservative leadership against Obamacare’s overreach,” said Slade O’Brien, state director for Americans for Prosperity, an influential conservative advocacy organization. “Hopefully our legislative leaders will not follow in Governor Scott’s footsteps, and will reject expansion.”

During his announcement on Wednesday, Mr. Scott said his mother’s recent death and her lifetime struggle to raise five children “with very little money” played a role in his decision.

“Losing someone so close to you puts everything in a new perspective, especially the big decisions,” he said.

Michael Cooper contributed reporting from New York.

Read More..

In Reversal, Florida to Take Health Law’s Medicaid Expansion

MIAMI — Gov. Rick Scott of Florida reversed himself on Wednesday and announced that he would expand his state’s Medicaid program to cover the poor, becoming the latest — and, perhaps, most prominent — Republican critic of President Obama’s health care law to decide to put it into effect.

It was an about-face for Mr. Scott, a former businessman who entered politics as a critic of Mr. Obama’s health care proposals. Florida was one of the states that sued to try to block the law. After the Supreme Court ruled last year that though the law was constitutional, states could choose not to expand their Medicaid programs to cover the poor, Mr. Scott said that Florida would not expand its programs.

Mr. Scott said Wednesday that he now supported a three-year expansion of Medicaid, through the period that the federal government has agreed to pay the full cost of the expansion, and before some of the costs are shifted to the states.

“While the federal government is committed to paying 100 percent of the cost, I cannot in good conscience deny Floridians that needed access to health care,” Mr. Scott said at a news conference. “We will support a three-year expansion of the Medicaid program under the new health care law as long as the federal government meets their commitment to pay 100 percent of the cost during that time.”

He said there were “no perfect options” when it came to the Medicaid expansion. “To be clear: our options are either having Floridians pay to fund this program in other states while denying health care to our citizens,” he said, “or using federal funding to help some of the poorest in our state with the Medicaid program as we explore other health care reforms.”

Mr. Scott said the state would not create its own insurance exchange to comply with another provision of the law.

His reversal sent ripples through the nation, especially given the change in tone and substance since the summer, when he said he would not create an exchange or expand Medicaid.

“Floridians are interested in jobs and economic growth, a quality education for their children, and keeping the cost of living low,” Mr. Scott said in a statement at the time. “Neither of these major provisions in Obamacare will achieve those goals, and since Florida is legally allowed to opt out, that’s the right decision for our citizens.”

Mr. Scott now joins the Republican governors of Arizona, Michigan, Nevada, New Mexico, North Dakota and Ohio, who have decided to join the Medicaid expansion. Some, like Gov. Jan Brewer of Arizona, were also staunch opponents of Mr. Obama’s overall health care law.

Shortly before his announcement, the governor received word from the federal government that it planned to grant Florida the final waiver needed to privatize Medicaid, a process the state initially undertook as a pilot project. Mr. Scott, who is running for re-election next year, has heavily lobbied for the waiver, arguing that Florida could not expand Medicaid without it.

Mr. Scott’s support of Medicaid expansion is significant, but is far from the last word. The program requires approval from Florida’s Republican-dominated Legislature, which has been averse to expanding Medicaid under the health care law. The Legislature’s two top Republican leaders said that before making a decision they would consider recommendations from a select committee, which has been asked to review the state’s options.

“The Florida Legislature will make the ultimate decision,” Will Weatherford, the state House speaker, said. “I am personally skeptical that this inflexible law will improve the quality of health care in our state and ensure our long-term financial stability.”

Medicaid, which covers three million people in Florida, costs the state $21 billion a year. The expansion would extend coverage to one million more people.

Mr. Scott’s reversal is sure to anger his original conservative supporters.

The governor “was elected because of his principled conservative leadership against Obamacare’s overreach,” said Slade O’Brien, state director for Americans for Prosperity, an influential conservative advocacy organization. “Hopefully our legislative leaders will not follow in Governor Scott’s footsteps, and will reject expansion.”

During his announcement on Wednesday, Mr. Scott said his mother’s recent death and her lifetime struggle to raise five children “with very little money” played a role in his decision.

“Losing someone so close to you puts everything in a new perspective, especially the big decisions,” he said.

Michael Cooper contributed reporting from New York.

Read More..

Some Victims of Online Hacking Edge Into the Light

Steve Ruark for The New York Times

Alan Paller of the SANS Institute said recently hacked companies were seeking safety in numbers.

SAN FRANCISCO — Hackers have hit thousands of American corporations in the last few years, but few companies ever publicly admit it. Most treat online attacks as a dirty secret best kept from customers, shareholders and competitors, lest the disclosure sink their stock price and tarnish them as hapless.

Rarely have companies broken that silence, usually when the attack is reported by someone else. But in the last few weeks more companies have stepped forward. Twitter, Facebook and Apple have all announced that they were attacked by sophisticated cybercriminals. The New York Times revealed its experience with hackers in a front-page article last month.

The admissions reflect the new way some companies are calculating the risks and benefits of going public. While companies once feared shareholder lawsuits and the ire of the Chinese government, some can’t help noticing that those that make the disclosures are lauded, as Google was, for their bravery. Some fear the embarrassment of being unable to fend off hackers who may still be in high school.

But as hacking revelations become more common, the threat of looking foolish fades and more companies are seizing the opportunity to take the leap in a crowd.

“There is a ‘hide in the noise’ effect right now,” said Alan Paller, director of research at the SANS Institute, a nonprofit security research and education organization. “This is a particularly good time to get out the fact that you got hacked, because if you are one of many, it discounts the starkness of the announcement.”

In 2010, when Google alerted some users of Gmail — political activists, mostly — that it appeared Chinese hackers were trying to read their mail, such disclosures were a rarity. In its announcement, Google said that it was one of many — two dozen — companies that had been targeted by the same group. Google said it was making the announcement, in part, to encourage other companies to open up about the problem.

But of that group, only Intel and Adobe Systems reluctantly stepped forward, and neither provided much detail.

Twitter admitted that it had been hacked this month. Facebook and Apple followed suit two weeks later. Within hours after The Times published its account, The Wall Street Journal chimed in with a report that it, too, had been attacked by what it believed to be Chinese hackers. The Washington Post followed.

Not everyone took advantage of the cover. Bloomberg, for example, has repeatedly denied that its systems were also breached by Chinese hackers, despite several sources that confirmed that its computers were infected with malware.

Computer security experts estimate that more than a thousand companies have been attacked recently. In 2011, security researchers at McAfee unearthed a vast online espionage campaign, called Operation Shady Rat, that found more than 70 organizations had been hit over a five-year period, many in the United States.

“I am convinced that every company in every conceivable industry with significant size and valuable intellectual property and trade secrets has been compromised (or will be shortly) with the great majority of the victims rarely discovering the intrusion or its impact,” Dmitri Alperovitch, then McAfee’s vice president for threat research, wrote in his findings.

“In fact,” said Mr. Alperovitch, now the chief technology officer at Crowdstrike, a security start-up, “I divide the entire set of Fortune Global 2000 firms into two categories: those that know they’ve been compromised and those that don’t yet know.”

Of that group, there are still few admissions. A majority of companies that have at one time or another been the subject of news reports of online attacks refuse to confirm them. The list includes the International Olympic Committee, Exxon Mobil, Baker Hughes, Royal Dutch Shell, BP, ConocoPhillips, Chesapeake Energy, the British energy giant BG Group, the steel maker ArcelorMittal and Coca-Cola.

David E. Sanger contributed reporting from Washington.

Read More..

Car Bomb in Damascus Kills Dozens, Opposition Says

Sana/European Pressphoto Agency

An injured man was carried near the site of a car bomb explosion in Damascus on Thursday.

In renewed violence reaching the center of the Syrian capital, a car bomb exploded in Damascus on Thursday near the headquarters of President Bashar al-Assad’s ruling party, killing more than two dozen people, mainly civilians and but also including security forces, according to opposition sources.

The Syrian Observatory for Human Rights, an anti-Assad group based in Britain that has a network of contacts in Syria, reported that at least 31 people were killed by the bomb in the neighborhood of Mazraa.

Syrian state television said two children were wounded, while Al Ikhbariya, a pro-government television channel, showed footage of two dead bodies and body parts in a park.

The area where the bomb exploded was near the headquarters of Mr. Assad’s ruling Baath Party and the Russian embassy. State television and the Syrian Observatory also said that mortar shells exploded near the Syrian Army General Command in the center of the capital, but there were no reported casualties.

The strikes were the latest to extend to the heart of the Syrian capital.

Reports this week appeared to show that rebel shells have reached new areas in Damascus.

Both state media and opposition activists reported on Wednesday that mortar rounds had hit the Tishreen sports stadium in the downtown neighborhood of Baramkeh. The state news agency, SANA, said the explosion killed an athlete from the Homs-based soccer team Al Wathba as he was practicing.

Government forces hit a rebel command center in a suburb east of the capital on Wednesday, injuring a founder of the Liwaa al-Islam brigade, Sheik Zahran Alloush, the brigade said in a statement.

On Tuesday, activists reported that up to seven mortar rounds had been fired by fighters of the Free Syrian Army toward Mr. Assad’s Tishreen Palace in Damascus.

There were no immediate reports of casualties, and it was not known whether Mr. Assad was there at the time. The palace, surrounded by a park, is in a wealthy area that has largely been insulated from the insurgency and it lies less than a mile from the main presidential palace.

Syrian rebels are entrenched in suburbs south and east of the capital, but they have been unable to push far into the center, although they strike the area with occasional mortars and increasingly frequent car bombs.

Such indiscriminate attacks however risk killing passersby, exposing the rebels to charges that they are careless with civilian life and property. Many Damascus residents are undecided about taking sides and fear their ancient city will be ravaged like Aleppo and other urban centers to the north.

At the same time, the government has decimated pro-rebel suburbs with air strikes and artillery, leaving vast areas depopulated or terrorized.

Fighting continued also for control of the main civilian airport in Aleppo on Wednesday.

Read More..