Financial life in a big town

The clown trying to win your mother’s heart has a new rival and this guy’s royalty.

After watching its bigger rival McDonald’s Corp (MCD, Fortune 500). try to woo mothers and grab a share of the family budget, Burger King Corp. (BKC) — known for its edgy ads featuring a man with an oversize plastic king mask — is launching a new marketing and promotional campaign Monday targeted to moms.

"A large part of our customer base is parents with children," said Russ Klein, president of global strategy, marketing and innovation. "As a parent, the challenge is always trying to get the kinds of things you want to but have some dimension of fun."

The centerpiece of the effort, Klein said, is a new kids’ meal featuring a four-ounce serving of Kraft macaroni and cheese, lowfat milk and the company’s "Fresh Apple Fries", which are uncooked apple slices shaped like french fries and served with low-fat caramel dipping sauce. The meal will go on sale Monday for $3.49 and will be a permanent fixture on Burger King’s menu.

The launch will be followed by an in-restaurant merchandising and television ad campaign, with the first commercial airing July 7. That spot will introduce "Little King" meant to be the masked king’s young son.

The company will be offering free samples of its apple fries through July in New York, Los Angeles, Chicago, Miami and Houston. Burger King will also give away samples at Jonas Brothers concert tour sites. Burger King is an official sponsor of the group’s "Burning Up Tour" and will be offering some free tickets to the concerts.

Klein declined to specify the value of the advertising and marketing effort, saying only that the company will spend millions "supporting this vehicle."

Burger King certainly isn’t the first fast food restaurant to try to convince moms to listen to the pleas in the backseat for fast food free instant credit score estimator. McDonald’s launched a public relations campaign targeted to mothers last year in a bid to neutralize criticism that the company’s food is a contributor to childhood obesity.

The McDonald’s approach included adding a bevy of healthier menu items to its menu meant to entice both kids and parents, including "Apple Dippers" — pre-cut slices of apples similar to the new Burger King version. The chain also started a "mom’s quality correspondence" campaign in which six mothers got a behind-the-scenes look at how the chain operates. The moms write about their experience on the company’s Web site.

Zack’s Investment Research senior analyst Anne Northrup said McDonald’s has been "a trailblazer" in changing the perception that fast food is an indulgence that will likely lead to gaining a few extra pounds.

But convincing parents to correlate healthy eating with the home of the Whopper may not so be easy, particularly since Burger King has been lambasted by critics for not switching to trans-fat free oil as fast as some of its competitors. The chain has committed to making the switch in all of its restaurants by the end of the year. Wendy’s International Inc (WEN)., meanwhile, cut out trans fat oil in August 2006.

Northrup said getting parents to take their families to Burger King may also be dependent on the pace of the chain’s remodeling campaign. Burger King has been attempting to turn around its sales partly by renovating its restaurants.

Northrup said a large number of the chain’s unit are still more than 30 years old.

"That’s a key driver of earnings growth in the next few years," she said. 

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CALGARY–Fertilizer producer Agrium Inc. says it is looking forward to record profits as "unprecedented demand for crop inputs."

The Calgary-based company said it expects second-quarter earnings of US$2.80 to $3 per share, up from previous guidance of $1.92 to $2.22, "due to very strong results from both our retail and wholesale operations."

Agrium's results are "particularly impressive given that the North American spring application season has been hampered by excessively cold and wet weather this year," president and CEO Mike Wilson said in a release.

"Continued strong global crop prices have created unprecedented demand for crop inputs and we foresee an extended demand-driven cycle."

The company said its forecast assumes there is no unfavourable financial impact from its Egyptian nitrogen facility EAgrium, at which construction was halted in April“due to permitting and other delays created by the Egyptian government."

A syndicate of banks providing financing for the project has requested the suspension of future draws on a credit facility and says the loan is in default no qualifying payday advance.

Agrium said it expects government approval but has "concerns these issues may not be resolved in the near term, in which event EAgrium's shareholders would be exposed to the loss of their total equity commitment."

Agrium has $165 million invested in the project with a total equity commitment of $280 million.

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OTTAWA–The federal government recorded a $1.2-billion budgetary deficit in March, likely trimming its surplus for the just-completed fiscal year to $10.2 billion.

The Finance Department says the deficit last March was half what the government experienced in March 2007, when it spent $2.4 billion more than it earned.

The department also says preliminary accounting points to a $10.2-billion surplus for the 2007-08 financial year that ended March 31, the exact amount forecast in Finance Minister Jim Flaherty's budget in February.

The federal government's revenues were up $1 billion, or 5.2 per cent, in March, largely as a result of higher receipts in taxes from individuals cheap payday loans. Program expenses were flat.

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VIENNA, Austria – Oil prices spiked a new trading high Tuesday, sweeping past $129 (all figures U.S.) a barrel as supply concerns intensified the momentum buying that has lifted crude deeper into record territory.

The June contract for light, sweet crude traded as high as $129.31 in electronic pre-opening trading on the New York Mercantile Exchange before settling back to $128.75, up $1.70.

Prices are currently being driven higher by supply concerns. This latest surge comes after OPEC's president was quoted as saying his organization won't increase its output before its next meeting in September.

The imminent expiration of the June contract is adding to the volatility. The contract will end at the close of trading Tuesday.

The contract reached a new closing high of $127.05 Monday after Algerian Energy Minister Chakib Khelil, the current president of the Organization of Petroleum Exporting Countries, was quoted by a government newspaper as saying OPEC won't increase its output during the U.S. summer driving season, which begins this weekend. OPEC's next meeting is scheduled for Sept. 9.

Concern about supply has recently become the primary driver of the market, replacing earlier worries about a weakening dollar, and not even Saudi Arabia's promise last week of an additional 300,000 barrels of crude a day could alleviate those new concerns.

Despite that pledge from the world's leading oil producer and the U.S. move to temporarily stop filling government stockpiles, prices have shown no indication of stopping their record run.

Through Monday's close, the front-month contract has hit nine trading or closing records in 11 sessions pay day loans. Analysts have said speculative buying has also contributed to oil's record high run.

In other news lifting prices, independent refiner Holly Corp. said a key unit at its New Mexico refinery was shut down for repairs, cutting estimated May gasoline production by as much as 756,000 gallons per day. The shutdown occurred while the fluid catalytic cracking unit was being brought back online from a previous shutdown May 7.

The refinery in Artesia, New Mexico, is Holly's largest.

As oil prices reach new heights, so have gasoline and diesel costs.

"Average gasoline prices in the U.S. rose for an eighth straight week and for the 15th time this year, up 1.8 percent or 6.9 cents to a record $3.791 a gallon," noted Stephen Schork in his Schork Report. "Gasoline at the pump is averaging 28.5 percent above last year's pace.''

Drivers in some parts of the U.S. are paying considerably more, however. Gas pump prices in parts of California have been stuck above $4 a gallon for weeks now.

In other Nymex trading, heating oil futures rose 0.14 cent to $3.7665 a gallon while gasoline prices rose 4.89 cents to $3.2855 a gallon. Natural gas futures rose 17.9 cents to $11.133 per 1,000 cubic feet.

Associated Press Writer Thomas Hogue contributed to this report from Bangkok, Thailand.

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Royal Bank of Canada disclosed Wednesday its results for the February-April quarter will be hit by $855 million in writedowns "relating to market conditions."

The writedowns will be worth $420 million after tax, Canada’s largest bank said.

"We are not happy about taking any writedowns and certainly do not take them lightly," president and CEO Gord Nixon said in a statement.

"That said, these writedowns are manageable and our risk profile continues to remain within our risk appetite. This is due to our disciplined risk management, our strong balance sheet and our business diversity."

RBC Capital Markets will take the biggest writedown at $715 million, followed by the bank’s Corporate Support division at $140 million.

"RBC believes a significant portion of the writedowns reflect liquidity pressures on assets that we continue to hold, rather than underlying credit quality," the bank said.

The bank will also book a gain of $50 million, or $20 million after tax, on the change in fair value of liabilities "designated as held-for-trading as a result of its credit spreads widening over the second quarter."

The writedowns included:

– $200 million for credit default spreads on exposures to a subsidiary of U.S cash advance loans. monoline insurer MBIA Inc.

– $90 million related to retained positions in U.S. subprime collateralized debt obligations of asset-backed securities and other structured credit trading positions.

– $185 million on U.S. Auction Rate Securities, most backed by student loan collateral that is largely government-insured.

– $140 million at its U.S. Municipal GIC business, mostly mortgage-backed securities, discount bonds and notes.

– $175 million on other trading portfolios, primarily related to market liquidity.

– $65 million on "available-for-sale" holdings related to the deterioration in the U.S. subprime market.

The bank is scheduled to release full quarterly results on May 29. In February it reported a 17 per cent drop in first-quarter profit of $1.25 billion, including a $430-million pretax writedown at Capital Markets.

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Citigroup offered some investors an unwelcome dose of deja vu on Friday.

The largest bank in the United States presented its most comprehensive turnaround plan since Morgan Stanley banking and trading veteran Vikram Pandit took over as chief executive in December, but many of its key plans sounded all too familiar.

Pandit said on Friday that Citigroup Inc (C.N: Quote, Profile, Research) businesses would work together, allowing them to squeeze more revenue from individual products by selling them across multiple units. He also said he would cut costs and invest overseas.

If all this sounds familiar, there’s a good reason: it’s exactly what was promised at Citi’s last analyst day in December 2006 by the then-CEO, Chuck Prince, before he was succeeded by Pandit a year later.

“We thought Citi was going to start on a new road, and lo and behold, we’re down the same road again,” said Helena Ocampo, an analyst covering financial stocks at Sentinel Investments, which manages $5.6 billion of assets and owns Citi shares.

Skepticism helped push Citi’s stock down 2.8 percent to $23.63 on Friday, bringing its loss this year to nearly 20 percent.

To be sure, Pandit is making some bold moves credit scores. He said Citi would shed some $400 billion of non-core assets within three years, scale back in businesses like bond trading and ramp up in prime brokerage and electronic trading.

But by and large, Pandit is not proposing massive strategic changes, and is focusing instead on making sure Citi doesn’t see a repeat of the last two quarters, when it posted more than $15 billion of losses. 

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The first step to creating an effective wellness program is to develop a formal change management strategy that includes:

•Sponsorship by leadership

•Involvement of employees

•Targeted communication
•Education/tools to support learning

•Measures to assess progress

•Linkage to broader culture of health philosophies.

As part of the strategy, implementing incentives for wellness will create behavior change.

Incentives generally are used in three areas with varying levels of effectiveness: Annual Health Risk Assessment (HRA), participation in programs such as weight management and achievement of long-term goals (cholesterol levels, body mass index, or BMI).

Rewards generally are designed around three common approaches:

•Cash awards ranging from $35 to $500 per activity

•Reduced medical rates ranging from $5 to $10 per month

•Mandatory requirement to complete a health-related activity in order to be eligible for a certain medical plan.

Towers Perrin informally gathered information on the incentive programs of nearly 30 clients and found that the most prevalent goal of incentives is to encourage employees to complete an HRA no teletrak payday loans. Many employers also are now requiring that, where indicated, employees participate in an additional health-related activity based on the results of the HRA. It is important that the employer define the level of participation needed to earn the incentives.

Examples of health-related activities include biometric screening, wellness programs and disease management programs.

Once implemented, incentives are difficult to remove without employee backlash, so developing incentives that link to the broader change management strategy is critical.

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We noted some time ago that the annual national competitive rankings of the World Economic Forum (WEF), which placed Canada 13th in 2006, were in our view suspect since the survey is not a comparative exercise, but a survey of how business leaders in each country regard local business conditions.

We imagine, for instance, that many Alberta oil executives regard that jurisdiction as being less business-friendly after Premier Ed Stelmach’s increase in royalty rates, but that view, to be meaningful, has to be set against the much higher royalties – and outright expropriation – that is the norm in other oil-producing regions.

In a comparative study of 10 nations released last month, consulting firm KPMG International ranked Canada second only to Mexico in cost-effective places to do business. And last week, Britain’s Economist Intelligence Unit (EIU) put Canada fourth among the world’s most business-friendly nations, trailing Denmark, Finland and Singapore. Australia ranks sixth, the U.S. places 10th.

The WEF’s latest survey puts the U.S. first, 12 nations ahead of Canada, so it’s no surprise that it’s the WEF rankings that are cited by local policy mavens critical of real and perceived weaknesses in Canada’s competitive advantage. But again, all the WEF tells us is that American business leaders think more highly of U.S. business conditions than, say, Finns canvassed by the WEF think of theirs.

It would seem obvious the KPMG and EIU surveys are more accurate assessments of competitive assets and liabilities because they compare tax, labour, bureaucratic and other conditions among countries. But for local critics of Canadian business conditions, such surveys provide the wrong answer, so we expect the WEF survey will continue to be invoked by local critics, even though it isn’t what it’s purported to be.

Down in the depths

When the history of the current global credit crisis is written, it will be noted that relatively low-ranking traders and money managers were jeopardizing the future of immense financial institutions. While the damage from soured U.S. subprime mortgages is remarkably widespread, inflicting malaise worldwide and across investment agencies of all kinds, from banks to brokerages to hedge funds to government-managed pension funds, the three biggest losers have been Citigroup Inc., the U.S.’s largest bank, Merrill Lynch & Co., world’s No. 1 brokerage, and UBS AG, Europe’s largest bank.

In a chilling report released last week on what went wrong at UBS, analyst Peter Thorne of Swiss brokerage Helvea wrote: "The fixed income division [of UBS] was focused on revenue maximization regardless of risk with no limits on balance sheet usage, and bonuses were paid regardless of damage done to the UBS franchise long term."

In the last wave of catastrophic business mismanagement and criminality, we learned that chief financial officers at the likes of Enron Corp., WorldCom Inc. and Tyco International Inc. played a key role as enablers of sophisticated transactions that the CEOs of those firms endorsed but didn’t understand – except that the ploys were going to artificially inflate their stock holdings. So we learned that previously obscure chief financial officers bear watching.

In this new disaster – which got underway just three years after the massive stock-market collapse of 2000-02 – we learn that under-supervised junior staffers can bring near ruination to enormous enterprises such as UBS, which will write off an estimated $37.7 billion (U.S.) for 2007 and 2008 cash advance loan. And that senior management, never mind the board of directors, often hadn’t a clue this ultra-risky activity was underway.

By his own admission, Robert Rubin, the Clinton-era U.S. treasury secretary and later vice-chairman of Citigroup, was not aware of the term "collateralized debt obligation," one of the innovative new devices at the centre of the banking meltdown.

Worth repeating

This from Henry Kaufman, the U.S. economist who called the onset of the 18-year bull market that began in 1982: "A longtime advocate of tougher financial regulations that would have prevented the current global credit crisis, tells the UK Financial Times that banks and other financial institutions need to become "too good to fail," rather than "too big to fail." Those now whinging about the U.S. Federal Reserve Board bailout of insolvent Bear Stearns Cos. should re-direct their energies from bashing central bankers trying to save the system after its latest departure from prudence to alchemists at the world’s largest banks and brokerages whose imperfect innovations for turning fool’s gold into the real thing brought the system to its knees."

Where’s our share?

A U.S. federal court has awarded the heirs of Jerome Siegel, who created the Superman character in the 1930s with Toronto native Joseph Shuster, a claim on a share of the U.S. copyright to the superhero from current owner DC Comics, a unit of Walt Disney Co. Shuster, a one-time Toronto Daily Star paperboy who emigrated to Cleveland at age 10, modeled the skyline of the comic strip’s Metropolis on that of Toronto, and the original Clark Kent was a Toronto Daily Star employee. When DC took Superman into international distribution, the Daily Star became the Daily Planet.

Signs of the times

Women with MBAs are twice as likely as their male peers to separate or divorce, according to a study by professor Robin Fretwell Wilson of Washington & Lee University, to appear in a book to which Wilson contributed, Rethinking Business Management. Based on a study of a National Science Foundation survey of more than 100,000 professionals, Wilson also reports that women professionals abstain from marriage at twice and sometimes almost three times the rate of men, depending on the profession … The lengthy Hollywood writers’ strike enabled writer/actress Tina Fey of "30 Rock" and her daughter to enjoy "the maternity leave I never got. She is now able to pick me out of a line-up of four or five women."

This date in history

Born this date in 1926 in Monroeville, Ala., she gained renown for her sole novel, To Kill A Mockingbird.

(Answer, reverse: Eel Reprah.)

Quotable tycoon

"An overburdened, over-stretched executive is the best executive, because he or she doesn’t have the time to meddle, to deal in trivia, to bother people."

–Jack Welch, CEO of General Electric Co. in the 1980s and 1990s

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The stars finally seem to be aligned for a Canadian launch of Apple’s popular iPhone nearly a year after it was first unveiled to lineups of gadget-crazed consumers in the United States.

There have been no official confirmations, but industry sources say that Rogers Communications Inc., the only Canadian carrier with a compatible GSM network, was hoping to include the iPhone as part of a campaign that focuses on "touch screen" phones, to be rolled out between May and July.

That would put one of the world’s most talked-about devices in the pockets of Canadians right around the time that Apple Inc. is expected to roll out an updated version of the iPhone that runs on so-called third generation, or "3G," networks.

It could also mean that the iPhone will be available in rival smartphone-maker Research In Motion Ltd.’s backyard before it is able to unveil its response: a 3G version of its popular BlackBerry email device for GSM carriers that is being dubbed "Meteor."

Shares of Waterloo-based RIM fell nearly 3 per cent or $3.52 to close at $122.25 on the Toronto Stock Exchange yesterday amid reports the anticipated June launch of a new BlackBerry has been pushed back to August.

"Reasons appear to be battery life, voice quality and other issues," said Mike Abramsky, an analyst at RBC Capital Markets, in a note to clients yesterday that cited sources "confirming" the rumours.

A RIM spokesperson declined to comment.

As for the iPhone’s arrival in Canada, a source said Rogers Wireless executives believed they were "close" to inking an agreement earlier this year with Apple, which has used its clout to force significant changes to the standard industry relationship between wireless carriers and handset makers.

That includes the way the iPhone is marketed and sold, as well as a sizeable cut of subscribers’ monthly bills.

However, it’s still unclear whether a deal has actually been reached because neither side is talking.

"We believe it is a phenomenal device and we look forward to being able to offer it to our customers if and when the device becomes available in Canada," said Elizabeth Hamilton, a Rogers spokesperson.

An Apple spokesperson declined to comment.

While Rogers initially said it planned to offer the iPhone in Canada, the carrier was later forced to backtrack after it admitted it didn’t actually have a deal with the Cupertino, Calif.-based maker of iPods and computers.

It has been widely speculated that the stumbling block was Rogers’ wireless data plans, which typically cost more than those offered by carriers in Europe and the United States – a disparity that critics blame on a lack of Canadian wireless competition payday loan.

As well, most of Rogers’ wireless data plans have usage caps, with users charged by the megabyte if they go over their allotment.

"We’re not fans of unlimited plans," Rob Bruce, president of Rogers’ wireless division, told analysts during a February conference call.

Apple, by contrast, emphasizes the consumer experience of its products and is said to be adamant that the iPhone be offered with unlimited data plans. That way, subscribers don’t have to worry their mobile Web browsing habits will put a crater in their wallets.

In return, carriers offering the iPhone can expect to woo new customers and coax more of their customer base onto higher-priced wireless data plans. AT&T Inc., which has an exclusive deal with Apple in the U.S., this week reported a 57 per cent year-over-year increase in its wireless data revenues, which was attributed in part to the iPhone and its focus on mobile email and Web browsing.

Apple also demands a portion of subscribers’ monthly bills. That’s bound to be a sticking point with Rogers, which has little incentive to bow to all of Apple’s demands since there’s little risk the iPhone will wind up in a competitor’s hands.

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Monsanto Co., the world’s largest seed producer, said fiscal second-quarter profit more than doubled as U.S. farmers bought more Roundup weed killer and genetically modified corn seed.

The Creve Coeur-based company is taking market share from rivals such as DuPont Co. by spending more to develop new varieties of corn, soybean and cotton seeds. Higher prices will help double gross profit from Roundup this year, Chief Executive Hugh Grant said on a conference call.

Net income in the three months through February rose to $1.13 billion, or $2.02 a share, from $543 million, or 98 cents, a year earlier. That surpassed Thomson Financial’s prediction of $1.72 a share.

The second-quarter earnings include a 23-cent gain from the settlement of Monsanto’s claims related to Solutia Inc.’s emergence from bankruptcy.

Sales were boosted by global demand for Roundup and genetically modified corn seeds in the U.S bad credit payday loan. and Brazil, Monsanto said.

"Between now and 2012, I think we’re the only company in agriculture that can point to consistent growth irrespective of swings in commodity prices, fluctuations in planted acres or the usual ups and downs in the popularity of things like ethanol," Grant said.

Monsanto said it won an additional 3 to 5 percentage points of the U.S. corn-seed market this year, confirming earlier forecasts.

Monsanto last year surpassed DuPont’s Pioneer unit as the largest producer, with 32 percent of U.S. corn-seed sales. DuPont had 30 percent and has pledged to hold its share steady this year. Monsanto said its share this year will be 35 percent to 37 percent.

The Associated Press contributed to this report.

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