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McKesson (NYSE:MCK)
Q1 2012 Earnings Call
July 28, 2011 5:00 pm ET
Jeffrey Jeff - Chief Financial Officer and Executive Vice President
John Hammergren - Chairman, Chief Executive Officer and President
Ana Schrank -
George Hill - Citigroup Inc
Lisa Gill - JP Morgan Chase & Co
Ricky Goldwasser - Morgan Stanley
Ross Muken - Deutsche Bank AG
Helene Wolk - Sanford C. Bernstein & Co., Inc.
Albert Rice - Susquehanna Financial Group, LLLP
Thomas Gallucci - Lazard Capital Markets LLC
Steven Halper - Stifel, Nicolaus & Co., Inc.
John Ransom - Raymond James & Associates, Inc.
Lawrence Marsh - Barclays Capital
Glen Santangelo - Crédit Suisse AG
Robert Willoughby
Robert Jones - Goldman Sachs Group Inc.
Eric Coldwell - Robert W. Baird & Co. Incorporated
Good afternoon, and welcome to the McKesson Corporation Quarterly Earnings Call. [Operator Instructions] Today's call is being recorded. If you have any objections, you may disconnect at this time. I would now like to introduce Ms. Ana Schrank, Vice President of Investor Relations. Please go ahead, ma'am.
Ana Schrank
Thank you, Lisa. Good afternoon, and welcome to the McKesson Fiscal 2012 First Quarter Earnings Call. With me today are John Hammergren, McKesson's Chairman and CEO; and Jeff Campbell, our CFO. John will first provide a business update and will then introduce Jeff, who will review the financial results for the quarter. After Jeff's comments, we will open the call for your questions. We plan to end the call promptly after 1 hour at 6:00 Eastern time.
Before we begin, I remind listeners that during the course of this call, we will make forward-looking statements within the meaning of the federal securities laws. These forward-looking statements involve risks and uncertainties regarding the operations and future results of McKesson.
In addition to the company's periodic, current and annual reports filed with the Securities and Exchange Commission, please refer to the text of our press release for a discussion of the risks associated with such forward-looking statements.
Finally, please note that on today's call, we will refer to certain non-GAAP financial measures, in which we exclude from our GAAP financial results, acquisition-related expenses, amortization of acquisition-related intangible assets and certain litigation reserve adjustments. We believe these non-GAAP measures will provide useful information for investors. Please refer to our press release announcing first quarter fiscal 2012 results available on our website for a reconciliation of the non-GAAP performance measures to the GAAP financial results. Thanks, and here is John Hammergren.
John Hammergren
Thanks, Ana and thanks, everyone for joining us on our call. Today, we reported a strong start to fiscal 2012, with total company revenues of $30 billion and adjusted earnings per diluted share of $1.27. This performance was the result of solid contributions from both Technology Solutions and Distribution Solutions and was helped by our acquisition of US Oncology, which has given us one of the most comprehensive service offerings available to a large and fast growing segment in the healthcare industry, Specialty Distribution and Services.
Our first quarter performance positions us well for the remainder of the fiscal year. Due to a reduction in our estimated full year tax rate, we have raised our annual guidance assumption and now expect adjusted earnings between $6.09 and $6.29 per diluted share. Before I turn the call over to Jeff for a detailed review of our financial results, I will provide some highlights from both segments of our business.
Distribution Solutions started the year with solid revenue and gross profit growth, keeping in mind that in last year's first quarter, U.S. Pharmaceutical benefited from a $51 million antitrust settlement. The U.S. Pharmaceutical team did a great job controlling cost in the first quarter, which resulted in relatively flat expenses in this business.
It's still very early in our fiscal year but we remain confident in our expectations. We anticipate generics will be a strong driver of our full year financial results, though as we've discussed, heavily weighted to the back half of the fiscal year due to the launch calendar. We also expect that our broad range of value-added services for branded manufacturers should continue to contribute to steady levels of compensation. We continue to build new service offerings that create demonstrated value for our large Retail National Accounts, as well as our independent customers.
Recently, our U.S. Pharmaceutical business held its annual trade show for independent retail customers. Thousands of pharmacy owners gathered in our hometown of San Francisco to learn more about the latest industry developments. During the event, we shared our vision to further strengthen the role of independent pharmacists, who are vital members of America's evolving healthcare system. We unveiled a number of innovative and integrated solutions, including our mobile messaging solution and our physician outreach program, to help independents become more integrated with patients and providers in their communities. At the conference, we demonstrated how McKesson's technology and clinical solutions work hand-in-hand. By using technology to become more efficient, pharmacists can free up their time to focus on delivering valuable clinical services that help their patients lead healthier lives.
We were also able to leverage our vision center, located here at corporate headquarters, to further showcase McKesson's full complement of solutions for the healthcare industry. Many of these solutions are integrated for members of our Health Mart franchise, which received recognition from Consumer Reports and J.D. Power and Associates for its outstanding customer service this year and was announced as the Chain of the Year by Drug Store News during the trade show.
We also previewed our new store-branded line of over-the-counter products for Health Mart, which we'll launch this fall. Our Health Mart franchise has approximately 2,800 stores and is growing. We believe Health Mart is a critical part of our solution set because it offers our independent pharmacy customers an effective way to successfully compete against larger national players.
Now let me turn to our Specialty business and in particular, US Oncology. We've made great progress integrating the legacy McKesson assets with our US Oncology business. We have a cross-functional team in place to manage the integration, and we are right on track with our plans. When you think about oncologists today, they are under tremendous pressure to deliver more cost-effective care while adhering to best practice protocols. We believe this is going to lead to the development of integrated care models, the transition of reimbursement risk to providers and an increased need to manage operating costs.
Our broad solution set, which includes distribution services and integrated technology offering, best practices and managed care contracting, and a full suite of practice management solutions, helps enable the success of our oncology customers. With McKesson, an oncologist can elect to have a simple distribution or GPO relationship, a more comprehensive practice management relationship or choose something in between. Our offering is attractive because of the breadth of the alternatives available to our customers.
Specialty has had good overall performance this quarter. While the team is very focused on the integration, they've continued to execute on the core business with good success on all dimensions, in particular with generics and a growing pipeline of prospective customers.
Turning to our Medical-Surgical business. We are really pleased that revenues were up 7% for the first quarter, primarily due to strong growth in our physician office business, resulting from acquiring new customers and further penetration of our existing customer base. We remain focused on optimizing our sourcing of McKesson branded products to drive margin expansion.
In our Canadian Distribution business, we performed as we expected in the first quarter, with flat revenues on a constant currency basis due to the impact of the government-imposed price restrictions on generic drugs. The team continues to work on mitigating the impact by focusing on generic compliance gains with customers and capitalizing on global sourcing of branded and generic pharmaceuticals.
In summary, I'm pleased with the performance of our Distribution Solutions segment. The scale and efficiency across our distribution businesses allows us to serve our customers with a high degree of satisfaction. With our successful proprietary generics program, we are well positioned to benefit from a period of significant generic product introductions. We have also enhanced our overall value proposition with the US Oncology acquisition, which gives us a strong position in the fastest-growing sector of the market, specialty distribution. And our Medical-Surgical business is growing and generating solid financial results. We're off to a solid start and we're confident that the rest of the year will show strong growth.
Turning now to Technology Solutions. I'm pleased with our performance across the segment and in particular, with the steady progress in our McKesson provider technology business, which drove improvement in our revenues and operating margins. As we said during our fiscal year-end call, our near-term priority is our customers' success. And right now, we are laser-like focused on getting our provider customers installed and eligible for the government's Meaningful Use incentives.
In the first quarter, our operating results were strong, aided by all of the changes we've made in this business. In addition, our results came in a little better than expected, mainly from hitting certain implementation milestones and the timing of payments from customers. While we are encouraged by these achievements, we have not changed our full year view of Technology Solutions.
In addition to the progress in provider technologies, 2 of our other businesses in this segment, our payer-facing health solutions business and our RelayHealth Connectivity business showed steady results year-over-year in the June quarter.
We recently completed our acquisition of Portico, which will be integrated into our payer business. Portico adds integrated provider management including value-based reimbursement solutions to the McKesson portfolio. These solution capabilities will help automate network management, provider enrollment, contracting and pricing.
Health reform is bringing payment and delivery model changes, such as accountable care and bundled payments. In this environment, payers and providers must deepen their clinical and financial alignment to ensure optimal outcomes at the right cost. Our strong Health Solutions portfolio includes products to help guide decision-making, the delivery of care and the final transaction processing. Combined with Portico systems, our broad offering will help payers and care providers create new products that use value reimbursement to align payers and providers on achieving the right outcomes. The combination will also help us drive significant administrative cost reductions by enabling clients to optimize and manage their networks efficiently and enable new complex reimbursement models.
The acquisition of Portico, along with our acquisition of System C, a U.K-based company that offers a suite of patient administrative systems and clinical solutions, fits nicely with our overall strategy in Technology Solutions. We have a comprehensive set of products and services to help providers reduce costs while maintaining quality, safety and efficiency through automation and connectivity.
In summary, we're off to a good start in fiscal 2012. In addition to solid operating performance, our strong balance sheet and steady cash flow provide us with opportunities to deploy capital and in the first quarter, we executed a $650 million accelerated share repurchase program. Overall, I believe we're well positioned for continued success.
And with that, I'll turn the call over to Jeff, and will return to address your questions when he finishes. Jeff?
Jeffrey Jeff
Thanks, John, and good afternoon, everyone. McKesson delivered strong financial results this quarter, laying a solid foundation for the remainder of the fiscal year. My comments today will focus on our $1.27 adjusted earnings per share, which as you recall from our discussion in May excludes 3 things: acquisition-related expenses, amortization of acquisition-related intangibles and litigation reserve adjustments, of which there are none this quarter.
The numbers I'll review in my discussion can be found on Schedules 2 and 3 included in today's press release. I'll begin with our consolidated results for the quarter, which can be found on Schedule 2.
Total revenues were $30 billion for the quarter, up 9% from the prior year. Excluding the impact of the US Oncology acquisition that we completed last December, total revenues increased 6% for the quarter. We are pleased to that both our Distribution Solutions and Technology Solutions segments contributed nicely to this growth.
Adjusted gross profit for the quarter increased 8% versus last year. As a reminder, the prior year benefited from a positive $51 million antitrust settlement, which flowed through the gross profit line. Excluding both the impact of US Oncology this year and the prior-year antitrust settlement, overall adjusted gross profit would have increased 6% for the quarter versus last year.
Total adjusted operating expenses were up 10% to $984 million for the quarter. US Oncology represented half of this total increase, in line with our original expectations. Now before I move on, I want to take a minute to clarify in a little bit more detail how US Oncology has been incorporated into the McKesson financial statements, particularly as it relates to cost of sales and operating expenses classification.
Prior to the acquisition by McKesson, US Oncology recognized certain expenses on the cost of sales line in its income statement that are now reported in our McKesson results as operating expenses. These expenses generally run $20 million to $25 million a quarter and primarily relate to employee compensation and benefit costs, reclassified as operating expenses. So if you think about this for the first quarter, total US Oncology adjusted operating expenses were approximately $44 million, with roughly $20 million to $25 million of these expenses being previously classified as cost of sales in the US Oncology income statements.
Next, other income was relatively unchanged from the prior year. Interest expense increased by $21 million to $64 million this quarter, primarily due to the debt we put in place as a result of the US Oncology acquisition. Our full year assumption of $260 million of interest expense in fiscal 2012 remains unchanged.
Moving down the P&L to taxes. As you saw in our press release today, we have lowered our full year estimate of the tax run rate from 33% to 32%, as our estimate of the full-year sources of our earnings has changed. I would remind you that our tax rate is very sensitive to relatively small changes in our sources of income. So while 32% is our best estimate as of this quarter, the rate could vary from time to time.
Adjusted net income in the quarter was $323 million, up 3% from the prior year. And moving now to share count.
While this past year, we completed our largest acquisition in over a decade, the $2.1 billion US Oncology acquisition, we've also done over $2.7 billion of share repurchases over the past 5 quarters. This resulted in our diluted weighted average shares outstanding coming in at 254 million for the quarter, down 7% from the prior year. With respect to full year share count, as discussed at our Investor Day in June, we continue to expect our full year diluted weighted average shares outstanding to come in at our original guidance of 253 million shares.
Our first quarter adjusted earnings per diluted share was $1.27, an increase of 9% compared to last year's adjusted EPS of $1.16.
Now for those of you who follow us closely, I will be the first to admit that this year-over-year growth performance is more than up modestly versus last year's first quarter baseline of $1.03, which is what we directionally guided to back in May on our earnings call and again, at our Investor Day in June.
Since then, there were 2 key drivers that led to this better-than-expected strong financial performance. First, and most significantly, as you know, the end of the quarter is very important to us in Technology Solutions depending on what implementation milestones we hit and the timing of customer payments. The good news is that we made stronger-than-expected progress in the last few weeks of the quarter in both of these areas, and both of these items drive revenue recognition, as reflected in our results.
Second, our estimate of our sources of income evolved a bit as we closed our books, resulting in a favorable reduction of our full year tax run rate, as I mentioned earlier. This had some impact, of course, in the June quarter.
Let's now move on to our segment results, which can be found on Schedule 3. Distribution Solutions, overall revenue increased 9% versus the prior year, with US Oncology contributing 3% to this year-over-year growth. Looking at the components, direct revenues were up 11% for the quarter. If you exclude the impact of US Oncology, our first quarter direct revenues grew a solid 7%, primarily driven by market growth and our mix of business. Warehouse revenues increased 3% from a year ago, benefiting from revenues associated with a new customer.
Canadian revenues on a constant currency basis were flat for the quarter, in line with our original expectations, as John said. Including a favorable currency impact, revenues increased 7% versus the prior year. Government-imposed price reductions on generics in certain provinces will continue to impact the revenue growth in our Canadian business throughout this fiscal year.
Medical-Surgical revenues were up a strong 7% for the quarter to $731 million, driven by increased volume from new and existing customers. Adjusted gross profit for this segment increased 6% for the quarter to $1.1 billion. If you exclude the impact of the US Oncology acquisition this year and the prior year antitrust settlement, Distribution Solutions adjusted gross profit would be up roughly 3%. Distribution Solutions adjusted operating expense was up 12% to $622 million for the quarter, and excluding US Oncology, operating expense increased just 4% versus last year. Adjusted operating margin rate for the quarter was 176 basis points, which is flat year-over-year when you exclude prior year antitrust settlement.
Given the quarterly variability in this segment, we always focus, as you know, on full year margins. In this context, for full-year fiscal 2012, we continue to expect adjusted operating margin improvement in the high single-digit basis points.
In summary, we're pleased with the solid first quarter performance in Distribution Solutions.
Turning now to Technology Solutions. Total revenues were up 6% to $802 million for the quarter, aided by some of the timing issues John and I have now both discussed. For the full year, we continue to expect Technology Solutions revenue growth to increase modestly from last year's 2% growth. Adjusted gross profit in the segment grew 16% versus the prior year to $383 million. Contributing to this result is the revenue recognition timing we have discussed, much of which drops almost straight through to the bottom line.
Technology Solutions had total gross R&D spending for the quarter of $105 million, flat with the prior year. Of this amount, we capitalized 10% compared to 14% a year ago. Our Technology Solutions adjusted operating profit was up 49% versus a year ago to $119 million. Adjusted operating margin in the segment was up to 14.84% for the quarter compared to 10.54% in the prior year.
We are pleased with this margin expansion, although it was partly driven by the revenue recognition timing we've discussed. For the full year, we continue to expect our adjusted operating margin to be in the low end of our long-term Technology Solutions adjusted operating margin goal range of mid-teens.
Leaving our segment performance and turning now to the balance sheet and working capital metrics. Our receivables were $9.4 billion, up from the prior year balance of $7.8 billion and our days sales outstanding increased by 2 days to 25 days. Inventories increased just 1% to $9.5 billion, while our payables increased 9% to $14.5 billion. So our days sales and inventory of 30 days is down 3 days from a year ago, while our days sales and payables was flat at 46 days. These working capital metrics resulted in us generating $326 million in operating cash flow for the quarter. This is in line with our expectations. And for the full year, we continue to expect to generate approximately $2 billion in cash flow from operations.
We ended the quarter with a cash balance of $3.1 billion, down from our year-end balance of $3.6 billion. This obviously leaves us well positioned to create shareholder value through the use of our portfolio approach to capital deployment, as demonstrated in the first quarter when we completed a $650 million accelerated share repurchase, closed the System C acquisition and increased our dividend.
Capitalized spending was $109 million for the quarter and we continue to expect full year capitalized spending between $450 million to $500 million.
Now I'll turn to our outlook. As John mentioned earlier, due to the change in our estimated full year tax rate, we are raising our guidance on adjusted earnings from $5.99 to $6.19 to a new range of $6.09 to $6.29. As we have discussed, we have now closed both the System C and Portico acquisitions since the beginning of the fiscal year, which drives the modest change in our guidance assumptions of $0.47 for amortization of acquisition-related intangible assets and $0.07 for acquisition-related expenses.
In summary, we continue to feel McKesson is on track to have another good year.
Thanks and with that, I'll turn the call over to the operator for your questions. [Operator Instructions]. Operator?
Question-and-Answer Session
[Operator Instructions] Our first question today comes from Ross Muken, Deutsche Bank.
Ross Muken - Deutsche Bank AG
So when you think about the USO asset, now that you've owned it for some time, and you look at sort of the relative performance and the synergy capture that you've enjoyed, where have you been most pleasantly surprised or in general surprised with sort of the asset? And in terms of looking at other potential uses and other disease areas or other places you could take some of the service model offerings that, that asset brings, what else have you sort of discovered you could potentially do with it over time to kind of create value at a higher margin?
John Hammergren
Well, thanks for the question, Ross. This is John. I think that we are very pleased that we made the acquisition, and it's certainly progressing as we had planned. I think that the areas of focus or highlight I would say are that our employees, on both sides of the fence, have done a great job of getting together, both culturally as well as from a business operations perspective. US Oncology folks fit right in with the McKesson teams, and we're doing a good job of executing and organizing, so that we can continue to show success in this segment and drive value for our customers, most important. I think that the other areas of highlight would be that the customers, whether they're existing McKesson customers or US Oncology customers, sort of got the transaction right out of the gate. And whether they were a customer where we had a large management relationship or whether it was just a distribution customer, people seem to understand the synergies that we bring to both parties and are attracted to a model where they have the ability to, over time, continue to build out a value proposition with us that will improve the operating efficiencies of the practice, as well as improve the quality of clinical care provided. So in a myriad of dimensions, I think people get it and they're excited about it. And we are, as I mentioned in my prepared remarks, seeing increased interest from a customer funnel perspective and exploring opportunities, either to migrate up, as the existing customer would from a basic distribution relationship, up the value chain or actually being attracted as a new net customer into our network. As it relates to other practice opportunities, clearly US Oncology over more than a decade has been building out a skill set that has been refined, both from a business model perspective and also from a financial and clinical perspective that will be applicable, we believe, to other clinical care areas or perhaps international opportunities. But I have to say right now, we're really focused on executing against the opportunity that's in front of us in oncology here in the United States and we plan to continue to do that, but we do think there are applications in other areas.
Ross Muken - Deutsche Bank AG
And maybe quickly just on the technology business, the margin has been sort of hovering here around the high 14s, low 15s on an adjusted basis for a couple of quarters. So I dare say we're sort of at a place of stability. I mean it feels like -- Pat's got a pretty good handle on sort of the trajectory of the business. What's sort of the next big steps there in terms of kind of driving incremental EBIT and growth?
John Hammergren
Well, I think we have made significant progress in the business. We made lots of changes last year, and we have done a lot of investment in the product to make sure the product is world-class. And we'll be ready for the Meaningful Use kinds of evaluations that will be necessary with our customers. I would say that our focus though right now is to make sure that our customers are migrating to our most recent platforms that will be required for Meaningful Use and our focus really is on implementation. Beyond that, you noticed in this quarter, we are continuing to build out our other business offerings. We acquired a company into our payer business called Portico, which we think will position us very well for the way healthcare is reforming in front of us, so that the payers and providers can connect together in a more complete way and deliver value that has a better transparency around cost and quality and more accountability for that care that's shared between the payers and the providers. And so we're excited about that. And clearly, we're continuing to make progress in the U.K., and this acquisition of System C will allow us to build out our offering there. So albeit, the big hospital systems business that we have in the U.S. is an important part of our focus. And implementation is the highlight there. We are continuing to strategically position the business for continued growth.
Up next, we'll take Robert Willoughby, Bank of America Merrill Lynch.
Robert Willoughby
Just one question. John or Jeff, I guess you got still a substantial bundle of cash overseas. Assuming something favorable at some point in our lifetime happens in D.C. here, what would the plans be for any cash you'd repatriate in?
John Hammergren
Well, I think we've done a very good job of optimizing the performance of our company in a way that takes advantage of the best practice around the area of cash management. And we believe that the offshore cash is a significant source of value and properly deployed. Our shareholders will realize that value. It's requiring us to be a bit patient, both in terms of evaluating what might happen politically and with our tax code. But we also believe there are opportunities, as Systems C showed in a small way, that we can deploy the cash also to acquisitions, which can create value. So we have a keen awareness that we're getting very low returns on that offshore cash, but we're also a little reluctant I think to bring it back and take the tax effect that would be required to bring it back into the U.S. at this point.
Up next, we'll hear from Glen Santangelo, Credit Suisse.
Glen Santangelo - Crédit Suisse AG
Jeff, I just wanted to follow-up on some of the comments you were giving us on the Distribution Solutions segment. You gave us a lot of detail, excluding US Oncology and kind of backing out the litigation settlement from last year, and I'm trying to do the math. Could you just help me figure out where exactly the gross margins were this year versus last year in the op margins if I were to back out US Oncology in the game last year?
Jeffrey Jeff
Right. It's a good question, Glen. And I guess to simplify, when you do that backing out, you'll see that the gross profit growth, if you take US Oncology out of this year and the $51 million good guy antitrust settlement out of last year, you'll see the gross margin is down a little bit year-over-year. And there's always some variability in 2 things, of course, in our Distribution segment that drive big dollars. One is the timing of how and when we get paid by our branded manufacturing partners and the part of the impact you see in this year's June quarter is the fact that the March quarter was a particularly robust quarter. I won't go into the arcana of how all these agreements work, but that has some effect on the following quarter. We think we're right on track though, as we look at the full year. Similarly, on the generic side, as John talked about, we have, this fiscal year, a more back-end loaded generic launch calendar. And so while we were pleased with the performance of our generic businesses, both in our traditional U.S. pharma business and in our specialty business in the June quarter, on a year-over-year basis, you didn't see the kind of growth from a full year perspective we continue to expect. So that's why, while the gross margin is down a little bit year-over-year when you look at the 2 June quarters, we continue to be comfortable with our full-year assumption that the operating margin expansion in that segment should be in the high single-digit basis points.
Glen Santangelo - Crédit Suisse AG
Okay. That's fair. Was the operating profit margins down a little bit as well? Or did they expand a little bit?
Jeffrey Jeff
Well, they're about flat. We didn't do the full math for you, Glen, of pulling the USON profits up.
Glen Santangelo - Crédit Suisse AG
Okay, that's fine. I was just trying to get a sense for what happened in the base business. But that's helpful.
Our next question today will come from Larry Marsh, Barclays Capital.
Lawrence Marsh - Barclays Capital
I wanted to clarify, if I could, the variation in the quarter. Going back to your "up modestly" comments, Jeff. You'd mentioned that technology timing and payments and the tax rate, but it seems like if you add those together that's maybe a $20 million, $25 million delta, and I'm getting more like $50 million to $60 million. So I just want to make sure, is there any other good guy in the quarter versus your expectation to help us understand the quarter and why we should pull that out for the rest of the year? And then just on the tax rate, I know it's hard to predict over a longer period of time, but just for purposes of modeling, is it fair to say like anything else that 32% is a fair kind of go-forward rate over a longer period of time? Or do we think of that as a one-year phenomenon?
Jeffrey Jeff
Well, couple of good questions there, Larry. In terms of surprise versus what we believed at the time, say mid-June, when we did Investor Day. I suppose first off, the size of the gap depends a little bit on what your baseline is and what you think up modestly was. I'll tell you for us, the surprise was probably a little smaller in dollars than what you suggested, but the Technology Solutions implementation, timelines and the customer payments that we hit that was a very material move because as I explained, that's revenue that when it comes, pretty much goes straight through to the bottom line. So a small amount of revenue really moves the profits. The tax rate has been a couple of pennies. And you're correct. I mean versus what we thought in mid-June, there's another couple of pennies where across the board, our other distribution and technology businesses all did a little better than we expected. Frankly, if that's all that had happened, it wouldn't be drawing our attention or your attention. It's really because of the very unexpected tax change and the very large variance in MTS that you got to the results you saw, which was probably -- in our world probably more $40 million or thereabouts better than we have been expecting. In terms of go-forward tax rate, it's always a little tough to make long-term commentaries on tax rates because -- particularly in today's political environment, who knows where the tax code is going. But what you should see over the next few years, if all else were to remain equal, is some of the lower tax sources of income that we have in our businesses we think will grow a little bit faster than our overall business. So if that were to happen and if the tax code were to change, I am hopeful that you will see that 30% inch down a little bit over time -- 32% excuse me.
Lawrence Marsh - Barclays Capital
Right. And so it just sounds like then, the first quarter good guy on timing of implementation, as you think about it, it really should kind of be pulled out in consequent quarters on technology?
Jeffrey Jeff
Yes, exactly. For now, we are not changing our full-year view of technology. Because most of what happened we had in the plan. We just didn't think it would happened in the June quarter.
Our next question comes from Lisa Gill, JPMorgan.
Lisa Gill - JP Morgan Chase & Co
Jeff, just to follow-up on that though, the other $40 million that was better than what you expected when we saw you in June, is there any reason why that would come out of future quarters?
Jeffrey Jeff
Well, so if you think about the 3 sources, Lisa, the biggest source of course is just the revenue recognition in MTS and that's the piece that we really did have in the plan for the year. We just didn't think it would come in June. Now the tax rate, which helped us a little bit, we gave you an increase in our guidance because, sure, that impacts the whole year and that's why we pulled the year up by the $0.10 although it rounds to more like $0.02 in the June quarter.
Lisa Gill - JP Morgan Chase & Co
Right. Okay. I guess -- and then just my second question would just be from a strategic standpoint, when we think about healthcare IT, maybe John if you can talk about this. Are you where you want to be in that business? How do you feel about the U.S. market? You're obviously meeting the milestones so that you can start to recognize that revenue, but maybe just talk about it strategically for a minute as you look out over the next couple of years.
John Hammergren
Well, clearly, we think that technology is going to continue to be a source of opportunity as this market gets more and more automated, and the clinical side of the business is where the focus is today, primarily driven by the government's insistence that people get these systems installed and used in an appropriate way. Beyond that, there will continue to be demand for buildouts of clinical opportunities for adjacent products and other kinds of solutions and services that kind of bolt into the core clinical systems. And if you think about McKesson's customers, many of our customers from a financial perspective are running on terrific systems that we installed 20 or 25 years ago that those financial systems eventually will have to be upgraded and changed in a way that will allow them to deal with the complexity associated with the way payments are going to be delivered going forward. And one of the acquisitions we made in the quarter called Portico, for the payer side, is positioning the payer software business for that complexity. The continued development of a product called Horizon Enterprise Revenue Management would be the provider side of that improved infrastructure and architecture to manage the financial side of the house. So I think that albeit we're in a big buying cycle now on the clinical side or implementation cycle for McKesson, we do think that we will transition into a focus on the financial side as we look into that 2-year horizon.
Lisa Gill - JP Morgan Chase & Co
And, John, just as a follow-up, I mean in the past you've talked about the fact that acquisitions are quite expensive in the market. Are you starting to see prices come down at all? Are you seeing that things are more reasonable? If we're looking at your balance sheet, you clearly have a lot of cash, and healthcare IT is a big opportunity over the next couple of years. Should we be thinking that there'll be more acquisition opportunities in that area?
John Hammergren
Well, I think there will be winners and losers that are going to shake out in this environment. And the winners I believe will be the larger IT companies that have the footprints to be the anchor tenant, so to speak, with our clients. And I'd say that's true whether it's a payer client or a provider client, whether that provider is a hospital or a physician office. And that anchor position should allow for additional pull-through opportunities and products where smaller companies or companies perhaps on the margin can't get access to the customer. So I do think there'll be more acquisition opportunities as those valuations come down as a result of the complexity of getting into the business. And sometimes, we'll pay up a little bit for acquisitions when they're small-scale like System C and Portico, where on their own from a simple DCF perspective, would probably not be worth what we paid but when you put it into our enterprise with our pull-through opportunities, those customers will allow us to have a payback on that investment for our shareholders. But speaking broadly, we're not seeing valuations drop much for the big public companies yet, and that may take some time.
Our next question today comes from Ricky Goldwasser, Morgan Stanley.
Ricky Goldwasser - Morgan Stanley
Just a question around guidance, with this stronger-than-expected performance in the first quarter, will the year be more evenly weighted between the first half and second half? Or should we still think about first half at kind of like around 40% of earnings and then second half 60%?
Jeffrey Jeff
Well, Ricky, I guess 2 comments. I don't think the pull-forward of some items that we saw pretty evenly spread through the rest of the year and our plan changes our view of the year. Of course we haven't really said anything about 40% at the first half. The only comment we've made beyond the first quarter, which certainly still holds true is we would expect the March quarter to once again be unusually strong.
Ricky Goldwasser - Morgan Stanley
Okay. I mean I'm saying 40/60 just because when I look back historically, I mean, I think last year it was around 42/58 before. So and if this is unusually -- if the back end is unusually strong because of the generic pipeline. Because like, we're making the assumption that the first half is going to be abnormally below that. And I know that you don't give quarterly guidance, but maybe you can help me then by thinking about the drivers in next coming quarter? Well what do you think about the key drivers of the business, whether it's the benefit that you get from the pharmaceutical manufacturers that make those products. How should we think about those in this upcoming quarter?
Jeffrey Jeff
Well, Ricky as you know, the reason we don't give quarterly guidance is because you have significant quarter-to-quarter variability in the timing of when we get paid by our branded manufacturers, which we don't control. We're often a little surprised by generic launches, which we don't control. And we just demonstrated in the June quarter that in our technology business, rev rec can vary a little bit from quarter-to-quarter. So I guess I really just have to go back to -- we've given you the commentary on the fourth quarter. You've got one quarter of actual results and you've got full-year guidance that we just updated. But beyond that, boy, it's just -- I think for us to try to get more specific, would almost imply that there we know more about the timing of certain things than we in fact do.
Next we'll go to Helene Wolk, Sanford Bernstein.
Helene Wolk - Sanford C. Bernstein & Co., Inc.
I have a question about the IT margin expectations for the balance of the fiscal year. I guess I heard that you're expecting to get to the low end of mid-teens and yet, I'm also hearing, I think, that you pulled forward what's probably high margin business in terms of the service revenue. So what am I missing in terms of what changes in mix or otherwise that helps me get to that margin outlook for the balance of the year?
Jeffrey Jeff
Well, I think the way to think about it, Helene, at the low end of mid-teens, we'd say somewhere around 14, which is about where we were this quarter. So first thing to remember is there's significant seasonality in this business just because you have to end the sales year some time, so the March quarter tends to always be this, like quite a stretch, the strongest quarter and the highest margin. Second point I make is what we pulled forward was revenue that, in our plan for the year in our original guidance, we had later on in the year. Regardless of whether it fell later in the year or in the June quarter as it did, it was very high margin revenue. So it really doesn't change our view for the full year. So while we're pleased to get some things done with our customers more quickly than we had anticipated, we're only 90 days into the year, and it's just too early to change our view of the full year, which remains as it was.
Robert Jones of Goldman Sachs has the next question.
Robert Jones - Goldman Sachs Group Inc.
Yes, you guys hit on most of the big ones but I guess just a couple of specific follow-ups. It sounded like there was some strong performance in medical this quarter. We've heard some mixed commentary on utilization, this quarter across healthcare. I was just curious to what you guys are seeing from your medical business as far as utilization.
John Hammergren
Well, I think we probably share some of that same view that utilization and physician office visits are down slightly or certainly softer than historical. I think that we had a view going into the year that we were going to grow slightly faster than the market as a result of the strength of our value proposition for the physician practices that we focus on, and I think that, that has probably shown itself in the first quarter. So I do think we're making some progress attracting new customers to our portfolio of solutions, and we're optimistic about this business and it continues to perform well for us.
Robert Jones - Goldman Sachs Group Inc.
Great. And I guess just quickly, if there is an update on the VA contract and any expectations around timing?
John Hammergren
Yes, there is really no new update. We've submitted, as others have, I would imagine, a reply to the requests for proposals and I would imagine that's being evaluated and considered now. And we would expect, I believe, to hear late this year or early next year at December, January type of timeframe as to what the outcome of those -- government evaluation of those proposals will be. But there really is nothing new other than that.
Our next question comes from John Ransom, Raymond James.
John Ransom - Raymond James & Associates, Inc.
Just a couple of questions on US Oncology, can you help us, with -- just the EPS effect of that acquisition this quarter? And was it better or worse than you expected?
Jeffrey Jeff
It's pretty much tracking, John, right in line with what we expected. And the way to think about it is we gave GAAP guidance that it would be accretive, excluding the one-time costs of $0.07 to $0.08, and then the intangible amortization related to it is about $0.20. So on an adjusted EPS basis for the year, it'll be in the $0.25 to $0.30 range and we're tracking right to that.
John Ransom - Raymond James & Associates, Inc.
Great. And secondly, do you have an update on the ASP plus 6%, maybe going to ASP plus 4%? And how should we think about that if that were to occur?
John Hammergren
John, when we did the acquisition, we knew there was going to continue to be a focus and question and concern around the issue of reimbursement and we continue to focus on that as a company as well. And clearly, it's our desire to avoid any additional adjustments to the way our physician customers are reimbursed. Having said all of that, we did factor reimbursement pressure into our models when we acquired US Oncology. And in some ways, that pressure increases the interest customers might have in looking at other opportunities to improve profitability and efficiency in their practices. So I think this clearly is a concern. We don't want our physician customers to experience a reduction in reimbursement around the medication dispensing attributes of the profitability that they enjoy today but there are a lot of other ways to drive improved financial performance for these customers in addition to the markup on the product that we continue to focus on to hopefully provide. As I said, offsets that we would believe will exist as this pressure continues over time. We don't have any near-term reason to believe that any changes in ASP is likely to occur but we certainly hear the same debates that are going on in Washington, everybody else does and we're not naïve about the risk.
Up next, we'll take a question from Eric Caldwell, Baird.
Eric Coldwell - Robert W. Baird & Co. Incorporated
Just some clarifications on Technology Solutions. Was the implementation milestone and payment timing, were those separate events, i.e. were they separated between MPT and maybe payer solutions where you got some disease management payments, something like that? If you could give some color there. And then John, I think you've mentioned that Provider Technologies showed improvement in revenue and profitability in your prepared remarks, and I'm curious whether that would also be the case had you not seen the accelerated timing event? Just some more clarification on the underlying performance net of the obvious benefits of the implementation timing.
Jeffrey Jeff
So Eric, a couple of good questions there. So all of the revenue recognition surprises that I was talking about, both the implementation milestones that we hit, as well as the customer payments that we received, that was 100% within the MPT or hospital facing business. Across a range of product lines within that business and a range of customers, but all within MPT. The other point I might make, just to maybe clarify something I said earlier, is when you think about what surprised us versus our own perhaps expectations for the quarter, probably the total surprise to us was maybe in the $40 million range. The biggest piece of that is then, the MPT surprise I just talked about, plus you have tax and maybe a little bit across the rest of the company. In terms of how, absent the acceleration we would have done in the MTS segment, you still would have seen that business up nicely from the prior year. You just wouldn't have seen 49% operating profit growth, which is in fact what we reported.
Eric Coldwell - Robert W. Baird & Co. Incorporated
That's very helpful. And I just -- if I can clarify, you said MTS would have been up regardless of the timing. Would Provider Technologies specifically have been up?
Jeffrey Jeff
Well, we don't break out the specific results of MPT.
Steve Halper, Stifel, Nicolaus is up next.
Steven Halper - Stifel, Nicolaus & Co., Inc.
What was the reason for the increase in the DSO by 2 days?
Jeffrey Jeff
Well, 2 things. Day of week can actually matter to us, Steve, of course because we have rather -- some rather larger customers and whether they're due to pay us on Wednesday versus Friday and when the month ends, that can vary it. But there also have been a few cases over the past year where we've made an economic decision that it's in our interest, looking at all of the aspects of a customer contract, to use our balance sheet and occasionally extend a little longer payment term. So it's a mixture of those 2 things over the past year.
Steven Halper - Stifel, Nicolaus & Co., Inc.
Okay. And then going back to the revenue recognition, I hate to beat a dead horse here on Technology Solutions. I understand the software implementations, but can you just explain the customer payment comment and how it hits revenue?
Jeffrey Jeff
Yes, that's fine. The simple answer, Steve, is that there are certain categories of customers -- particularly in a time when there are a lot of struggling hospitals in the country financially -- so there are certain customers where we don't recognize any revenue until we get the cash in the door because we perceive sufficient payment risk that it would not be conservative in terms of accounting treatment for us to recognize the revenue and then hope we get paid. So we think that's conservative and a good accounting treatment. What it does mean is when you have some good work being done by our teams and some, frankly, customers who are happy with what we're doing for them and are paying us more quickly than we thought, boy, you get revenue that just drops straight through to the bottom line.
Steven Halper - Stifel, Nicolaus & Co., Inc.
And lastly, can you tell us which businesses you would have an arrangement with that -- like that?
Jeffrey Jeff
Well, I'm obviously -- we would never comment, Steve, on specific customers. But if...
Steven Halper - Stifel, Nicolaus & Co., Inc.
No, no, no not specific customer names, but what type of...
Jeffrey Jeff
Yes. These are all within the hospital facing technology business, which we would generally refer to as MPT.
Our next question comes from Tom Gallucci with Lazard Capital.
Thomas Gallucci - Lazard Capital Markets LLC
Just 2 quick ones. On the IT side, I think in the past, we've talked about maybe seeing some increased costs as you're trying to sort of do right by the customer and get things implemented. Since certain things have gone faster, should we expect a little lower cost as you get through the year even though that revenue has pulled forward? I understand that part. But should the cost basis be a little lower later?
Jeffrey Jeff
Well, not really. Tom, as John pointed out, we're very committed to continuing the progress you saw in this quarter's results on implementations. And so while we're pleased with what happened this quarter, there are no plans to back off the level of resource we currently have planned for the year.
John Hammergren
Having said that though, Tom, I do need to point out that we did make some changes last year from a cost structure perspective that we'll be rolling in on a full-year basis this year. So I think -- and that was not really in terms of R&D or implementation resources, but we did some consolidation in our overhead and our selling infrastructure last year, and we are getting the benefit of some of that as you look into the first quarter as we think about the full year. So there are some structural cost changes that have happened but it's not because we're reducing the resources we have in place to deal with these customer implementations.
Thomas Gallucci - Lazard Capital Markets LLC
Sure. And then maybe just one other on the traditional sort of drug distribution side. I thought it was interesting, ABC this morning had pointed to certain geographies that were growing disproportionately quick, I guess, relative to some others. Do you have any areas or regions that you would point to that are growing a lot faster than the average?
John Hammergren
I have to admit I haven't really looked at it on a regional basis. I can't comment. I would imagine, though, there probably is some strength in certain states and in certain areas of the marketplace that haven't been affected by unemployment as much as others. I mean so that would -- I didn't listen to the comments but if you were to ask me, my guess would be we see some of that variability but it's more related to the condition of the market from an employment perspective than it is anything else.
Next up, we'll hear from George Hill, Citi.
George Hill - Citigroup Inc
I will start off with one on the IT side as well. John and Jeff, there's a lot of -- seems to be a lot of private assets out there available for sale now, you had mentioned the evaluation of the public companies. I guess as you look across the Technology Solutions segments, can you talk about which segments of that business are more attractive and less attractive and where might be -- attracts candidates to apply some more capital?
John Hammergren
Well it's difficult for us to talk specifically in a forum like this as to what our strategy is in terms of capital deployment. I would say, however, that we don't limit our views in terms of synergistic acquisitions to a particular segment and we're fortunate that we're in almost every segment. So whether it's a payer asset or a hospital or a physician or a connectivity type of an asset or a retail pharmacy asset, we have the ability to at least evaluate whether or not there's a strategic fit and evaluate whether the financials of the proposed acquisition provide the kind of returns that we expect on behalf of our shareholders. And so I don't think we limit our views at all. But I would say that there's a couple of quick gates we can go through to quickly dismiss an opportunity as being realistic based on the expectations of the seller, in the case of a private transaction or the public market valuations, if you think about public company transactions. We do the same thing on the distribution side. We have the ability to really look across the globe at distribution assets, and we look at the same kinds of metrics.
George Hill - Citigroup Inc
Okay. And then maybe just a quick follow-up, some of the trade group information out there on the hospital [ph] side would show that you guys had a tough year in 2010 with respect to share retention. I guess do you feel like the customer base now has stabilized given that you guys have hit some of these milestones? Or do you feel like there could still be some further weakness?
John Hammergren
Yes. we certainly -- we don't like to lose customers anywhere. And sometimes we're faced with a situation where our past performance as opposed to our current performance is a lagging issue that we have to deal with. I think that we feel really good about the quality of our current product line, the amount of money we invested in the last 2 years in our products, make those products I think competitive if not superior to many products that our competitors have in the marketplace. And I'm certainly hopeful that the market share changes that happened last year are a trailing indicator of our customers' views of us as opposed to a current indicator because we believe strongly that customers that are installing our current products are very pleased with the performance of those products largely. And we would expect that this year, our market share positions would remain solid, if not, perhaps begin to rebound slightly, particularly in the smaller marketplace where our Paragon product line is very well suited as a replacement alternative to incumbent products in a market where we have smaller share and significant opportunities to grow with a world-class product. So I think you almost have to define our technology business by product and think about our success on a product-by-product basis and that's what we try to do.
Our final question today will come from A.J. Rice, Susquehanna.
Albert Rice - Susquehanna Financial Group, LLLP
Just looking at the strength in the direct distribution and services year-to-year, I mean if you look at some of the macro-commentary, IMS would have said script trend actually moderated somewhat in the June quarter versus the March quarter. I was wondering in your 10-Q, you highlight volume growth and pricing as drivers both new customer and existing customer. Can you just maybe flesh out a little bit there of what you're seeing in terms of where the volume strength is across the board and what are you seeing on pricing?
John Hammergren
Well, I think the pricing that we're referring to is product inflation to a large extent relative to the manufacturing behavior, and we think that environment in the first quarter was strong and that's why we referred to it in our documents. I do think that we have variability on occasion in our revenue number, driven by the performance of some of our large customers and their buying behavior. And just like on the receivables side, we can have variability on the sales side if somebody decides to place an order on the last day of the quarter or that's the way thing falls, we can pick up some additional revenue. And on occasion, we will pick up a new customer. We picked up a customer last year that flowed through this business as well, so I don't think it's time for us to think about revenue above what we've already indicated for the year and this quarter just happens to be a little bit stronger than we would have expected for the full year. And we don't have a different view on the full year, A. J.
Albert Rice - Susquehanna Financial Group, LLLP
Okay. And maybe just at the Investor Day, you guys were highlighting that you'd spent a lot of time realigning the sales force at US Oncology and sort of had positioned them to go out and heavily try to build on that CSA base of the 3,000 oncologists, as well as I think you identified JVs with acute care hospitals. Are we still sort of early stages there? Is there anything you can point to in the last few months that's sort of interesting to talk about?
John Hammergren
Well, I think when I talked about my satisfaction with the US Oncology activity, I think one of the things that it points to is that we can do this integration and reorganization and not lose our sales momentum. As we do feel strongly about the fact that we have a value proposition that's resonating very well with our customers and potential customers. So I think we remain optimistic there. And I was involved in a couple of -- we were involved in a couple of activities with acute care hospitals, where US Oncology might have been a competitor or a potential competitor, and we've now combined our forces to create a solution set that fits well in an acute care community-based setting. So we've found a way I think to continue to change our value proposition so it can meet a myriad of needs and that's our focus. So thank you for that question.
I want to thank you all for your time and attention today, and clearly, it's a good start to our year. We're excited about the opportunities ahead, and I'll now turn the call over to Ana for a review of our upcoming activities for the financial community.
Ana Schrank
Thank you, John. To preview our upcoming events, on September 8, we will present at the Stifel, Nicolaus Health Care Conference in Boston. On September 14, we will present at the Morgan Stanley Conference in New York. On November 10, we will present at the Credit Suisse Health Care Conference in Phoenix. And on November 16, we will present at the Lazard Capital Markets Healthcare Conference in New York.
We will release second quarter earnings results in late October. We look forward to seeing you at one of these upcoming events. Thanks, and goodbye.
Ladies and gentlemen, that does conclude today's conference. Thank you all for your participation.
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text:
Hello, and welcome to the second (and quite late) edition of my Oakland Raider 2011 season preview.
Between family, Easter and recent legal wranglings NFL style, it's been tough to get back to it, but enough excuses. Without further ado, I bring you games five, six, seven and eight of the Oakland Raiders' 2011 season.
This is going forward on the assumption that the Raiders beat the Broncos and the Bills, and lose to the Jets and the Patriots in the first four, making them 2-2 going into the second quarter of the season.
It's not the result that will make them weary for home; just the thought of playing Houston yet again, with a track record that's less than stellar in recent seasons.
It's one of six early East Coast games on the slate for the Raiders, games in which they've traditionally struggled. But when you factor in home games against the Jets, Patriots, Browns, Bears, and Lions, it could've been much, much worse.
Despite the fact that I think they can and will win this game as the teams stand at this point, the Raiders will clearly be glad to return to the friendly borders of Northern California after traveling to Houston to face their new arch-rivals.
After all, Overstock.com Coliseum is waiting.

subset: commoncrawl


text:
As the second annual ArtPrize draws near, the excitement and anticipation is increasing for many.
For ArtPrize Founder Rick DeVos, it's difficult to name just one thing he's specifically excited about.
"Overall, I'm just excited to see what people bring to it, just as I was last year," DeVos said. "By it's nature, I and ArtPrize control very, very little of it, so the extent to which people come up with things that we couldn't have even imagined is just really cool and really exciting. So I'm excited to see what odd and wonderful things show up."
Related ArtPrize coverage• ArtPrize spurs entrepreneurism
• Grand Rapids organizations look beyond ArtPrize
All ArtPrize coverage
Last year, no one — DeVos included — really knew what to expect from the event. However, based on the success of last year's event, many are expecting an even bigger turnout this year.
According to a recent analysis by Grand Valley State University, as many as 200,000 people attended the inaugural ArtPrize, which generated an estimated impact of $5 million to $7.6 million across Kent County.
This year, the Grand Rapids/Kent County Conventions and Visitors Bureau will work with a third-party company to conduct an intercept study, which will survey a sample of people on the street to gauge the impact.
"ArtPrize, it's a wonderful thing, but economic impact is not one of their priorities," CVB President Doug Small said. "It's a byproduct, they know that, and they're appreciative of that. But their focus is not on how many people come in, how much money they spend — it's all on the artists."
This year's event, which runs Sept. 22 through Oct. 10, will showcase the work of 1,713 artists at 192 venues. And overall, the event will operate much like last year's.
"The goal was to change as little of the core of how ArtPrize worked as possible," DeVos said. "Because it's so distributed, because so many people are involved, we wanted all the learning that we all went through collectively last year to be applicable this year."
Of last year's 159 venues, 150 are participating again this year, DeVos said. That accumulated knowledge will be a benefit for the event. It also means that the venues are doing more promotion themselves.
Businesses did a good job of getting involved last year, considering participation was a "leap of faith," said Grand Rapids Downtown Alliance Director Sharon Evoy. But they're learning from last year, as well, and are addressing the few things that didn't go so smoothly in the beginning.
"This year, it's a known entity, and I know that restaurants are gearing up," she said. "We're compiling information on things like weekend hours for the different restaurants."
Although the "basic mechanics" of ArtPrize won't change, DeVos said, there will be a few elements added to this year's event.
"There's more event-driven stuff this year, which I'm sure will drive a lot of participation and interest," he said.
The events — along with exhibition centers, another new feature this year — should help pull people into the different neighborhoods, he said. So the event likely will be bigger, but it also should be more spread out, and thus more manageable.
ArtPrize also won't change its public-outreach model, which places a large focus on social media. However, the organization will make slight improvements, such as printing some informational materials in both English and Spanish.
However, ArtPrize doesn't do any traditional advertising itself — all its efforts are grassroots. Many other organizations, now that they have an idea of what to expect from the event, are doing their part to spread the word.
"We're really taking the ball and running with it from a total-marketing approach," Small said.
In addition to ads in art publications and in-flight magazines, online advertising and posters, the CVB has ArtPrize hotel-package information on its website. The package offers ArtPrize information, merchandise and a wristband at 22 participating hotels. So far Small doesn't have any firm information from hotels or others to indicate how this year's attendance might change.
"We're not anticipating or banking on a huge hotel-room-night surge, but we do think we'll have more than last year," he said. "And this year, I think we're better prepared to capture (how many people) actually stayed here."
But on a personal level, Small is excited to experience again what he calls the "Super Bowl of art."
"As a consumer, I can't wait to see what my surprise art is going to be this year," said Small, who considers himself somewhat "artistically challenged."
ArtPrize taught him to "appreciate the unusual," he said, and his favorite piece last year was Young Kim's "Salt & Earth."
Evoy is looking forward to Luke Jerram's entry, "Play Me I'm Yours." Jerram will put pianos downtown for people to play, something he's done in cities around the world.
"I think that is such a great interactive thing to have in the downtown," Evoy said. "I'm really excited to see people just sitting down and playing the piano."
Thomas Birks, one of the Nessie Project artists who is returning this year with the Steam Pig Experiment, is looking forward to seeing more of the art this year, as well.
"I did get a chance to see some work that was phenomenal; I got to see some really nice stuff," Birks said. "But when I sit back and think about how much there was out there to be seen, I just didn't feel like I saw nearly as much as I wish I had."
In addition, he's excited for the "continuation of the open dialogue, everybody being able to have a candid debate as to what strikes people personally, what is it that makes you like one thing as opposed to another."
That, of course, is the purpose of ArtPrize.
"The main goal of ArtPrize is really about shifting the culture and continuing to build a culture of creativity in West Michigan by involving everybody in the conversation and getting everybody excited about art in their community," DeVos said.
Over the years, he hopes to help build a culture of people interested in, participating in and supportive of creative work and its inherent risk-taking.
"Long term, I think that's what we really need as a region and a state, to rediscover our appetite for creativity and creative risk-taking," DeVos said. "So that's really the goal of ArtPrize."


text:
Get an overview of this hotel5-star luxury apartment, walk to Victoria and Alfred Waterfront
Located in the heart of Cape Town, this luxury apartment is within a 10-minute walk of Two Oceans Aquarium and Victoria and Alfred Waterfront. Cape Town International Convention Centre and Cape Town Stadium are also within 1 mi (2 km).
Property Features
This apartment features an outdoor pool, a rooftop terrace, and WiFi in public areas. Self parking is free. Additionally, concierge services, dry cleaning, and laundry facilities are onsite.
Room Amenities
All 30 apartments feature kitchens with refrigerators, stovetops, microwaves, and dishwashers. Washers/dryers and free WiFi are standard, as are plasma TVs with satellite channels.Information missing or incorrect? Tell us!Opens in a new window
Lawhill Luxury ApartmentsCape Town Western Cape 8000
Hotel Amenities
Hotel Amenities
Lawhill Luxury Apartments features an outdoor pool, a rooftop terrace, and tour/ticket assistance. High-speed wireless Internet access is available for a surcharge. For a surcharge, the property provides a roundtrip airport shuttle and an area shuttle. This Art Deco apartment also offers multilingual staff, concierge services, and laundry facilities. Complimentary self parking is available on site.
- Airport transportation (surcharge)
- Total number of rooms - 30
- Number of floors - 6
- Elevator/lift
- Front desk (limited hours)
- Tours/ticket assistance
- WiFi (surcharge)
- Dry cleaning/laundry service
- Area shuttle (surcharge)
- Rooftop terrace
- Concierge services
- Laundry facilities
- Multilingual staff
- Free self parking
- Year Built 2009
- Number of buildings/towers - 2
- Outdoor pool
- Use of nearby fitness center (discount)
Family Friendly Amenities
- Family Hotel
- Outdoor pool
- Free Wi-Fi
- Kitchen
- Laundry facilities
- Separate dining area
- Washer/dryer
- Full-sized refrigerator/freezer
- Microwave
- DVD player
Available in all rooms: Free WiFi
Available in some public areas: Wireless internet access ( ZAR 50 per hour )
Free self parking
Room Amenities
- Free WiFi
- Premium TV channels
- DVD player
- Premium bedding
- Balcony
- In-room climate control (air conditioning)
- Air conditioning
- Phone
- Coffee/tea maker
- Microwave
- Kitchen
- Daily housekeeping
- Free toiletries
- Hair dryer
- Iron/ironing board
- In-room safe
- Desk
- Cribs/infant beds available
- Satellite TV service
- Separate dining area
- Dishwasher
- Full-sized refrigerator/freezer
- Stovetop
- Washer/dryer
- Cookware, dishware, and utensils
- Memory foam mattress
- Plasma TV
Nearby Things to Do
Recreational amenities at the apartment include an outdoor pool.
Children under 16 years old are not allowed in the swimming pool or fitness facility without adult supervision.
The recreational activities listed below are available either on site or nearby; fees may apply.
- Golfing nearby
- Kayaking nearby
- Sailing nearby
- Scooter/moped rentals nearby
- Hiking/biking trails nearby
- Bicycle rentals nearby
- Mountain biking nearby
- Ecotours nearby
To make special requests for accessibility needs, please note them at check-out when you book your room.
- Accessible bathroom
- In-room accessibility
Hotel Policies
Check-in time starts at 2 PM
Check-in time ends at 11:30 PM
Check-out time is 11 AM
Payment types
Children and extra beds
- Children are welcome.
- Cribs (infant beds) are available.
- Pets not allowed
You need to know
Extra-person charges may apply and vary depending on property policy.
Government-issued photo identification and a credit card or cash deposit are required at check-in for incidental charges.
Special requests are subject to availability upon check-in and may incur additional charges. Special requests cannot be guaranteed.
- The name on the credit card used at check-in to pay for incidentals must be the primary name on the guestroom reservation.
No rollaway/extra beds available
Noise-free rooms not guaranteed
- Breakage deposit: ZAR 2000
- Resort fee
Optional extras
- Fee for wireless Internet in public areas: ZAR 50 per hour (rates may vary)
Hotel Name
- Lawhill
- Lawhill Apartments
- Lawhill Luxury
- Lawhill Luxury Apartments
- Lawhill Luxury Apartments Cape Town
- Lawhill Luxury Cape Town
- Lawhill Luxury Apartments Cape Town, South Africa
- Lawhill Luxury Apartments Hotel Cape Town Central
- Lawhill Luxury Apartments Apartment Cape Town
- Lawhill Luxury Apartments Apartment
- Lawhill Luxury Apartments Cape Town South Africa
We should mention
This property offers transfers from the airport (surcharges may apply). Guests must contact the property with arrival details before travel, using the contact information on the booking confirmation. A resort fee is included in the total price displayed.
National Rating
Quality Graded by the Tourism Grading Council of South Africa (TGCSA) – South Africa's official quality assurance organization.


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Post Time: 1:20
1 - SPECIAL SKILLS was caught four wide and still rallied for second in first race since Aug. Overtakes pacesetter GOLDEN RIFLE, who cuts back from 7 furlongs. LOFTY HEART was squeezed inside and didn't finish that far behind top choice. Price play.
2 - BRANDINI drops into claimer for the first time and going wide in first outing since Oct. PEACH LAKE reverses finish with MUSIC MAID.
3 - COPPER BLUFF exploded from a dozen lengths back at the half to win by 1 1/2. Outfinishes HIGH INFLATION, who sheds 10 lbs. with apprentice up, and RETTALFA, who has habit of placing third.
4 - MEDIA KID cuts back from marathon distance stronger and holds on gate-to-wire. SIERRA ALPHA becomes off-the-pace threat if SEEKING HARMONY is able to engage top choice in a speed duel.
5 - Three-time beaten favorite CORINTHIAN SUMMER drops again for grass expert Clement. DIVIDEND gets remake with blinkers and Lasix for hot Wilkes (57% winners at meet). PLATED, a $500,000 buy, gives up on hurdles experiment, and, surprisingly, picks up Castellano.
6 - GOLD POTION slices back from consecutive miles to sprint where she was a victor. MONONOKE forgets about turf vs. better. SOUL OPPOSITION had no chance against repeat odds-on winner Bounty Pink and finished behind top choice, too.
7 - HANDSOME DENNIS stumbled in the mud as the 7-5 favorite in first race off the plane from the coast while placing second. Both CASHMERE CAT and PERMANENT CAMPAIGN became winners the first time they were put on grass, but were only beating maidens.
8 - OUR AMAZING ROSE stretches out around one turn with speed after facing tougher in last pair. MISS BESILU plunges from stakes and races on Polytrack and turf. Lone start on dirt wasn't great. VERY CHERRY CANDY has been in the money in past six races since moving into Jacobson's barn.
9 - NOBLE CORNERSTONE (BEST BET) missed by a neck after dropping out of stakes competition to this state bred level. BEYOND EMPIRE defeats HERE HE FITZ again.


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UPPER PITTSGROVE TWP. — The Monroeville Fire Co. responded at 3:30 p.m. Tuesday to Monroeville Road to assist the Elmer Ambulance Corps.
The fire company remained in service for 30 minutes and the ambulance remained in service for 1 hour.
Other fire activity:
Today's Sunbeam contacted the Salem County Fire Radio Control Center to receive reports on all activity of fire and rescue companies within the county during the period ending at 4 p.m. Tuesday.
• The Deepwater Fire Co. responded to the base of the Delaware Memorial Bridge at 7:36 p.m. Sunday for a vehicle and remained in service for 10 minutes.
• The Salem Fire Department responded at 8:12 p.m. Sunday for a carbon monoxide detector activation.
It was assisted by the Fenwick Ambulance.
The fire company and ambulance remained in service for 20 minutes.


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STATEN ISLAND, N.Y. — A distraught New Dorp Beach family is on an all-out dog hunt this week, after its 2-pound pup, Rusty, was taken from in front of their Marine Way home Friday night.
The 11-year-old Yorkshire terrier, which suffers from seizures and is blind in one eye, squeezed its tiny body through the gap between the home's chained backyard gate and ambled over a fallen backup tension gate to make its way into the front yard around 10 p.m., owner Angela Pennachio said.
"When our other dog came in we didn't see [Rusty], so we were calling him in the yard but he never came," Ms. Pennachio said. "We checked the front of the house and he was not there either."
With Rusty nowhere to be found, the family turned to footage from the home's security cameras for clues and were surprised by what they saw.
The footage shows a man walking briskly down the street who stops in his tracks upon encountering Rusty on the sidewalk in front of their home. The man, who was wearing a dark hat and jacket and carrying a white bag, stoops down, appearing to pet the dog, before popping his head back up to look around. Following a cursory gaze, he scoops up the pup, takes one more look around, and continues on his way with the dog in hand.
"I was surprised that he didn't ring the bell or anything," Ms. Pennachio said. "I had my lights on because we had just gotten home."
Minutes later, the man, still carrying Rusty, circled back in front of the house, but on the opposite side of the street, Ms. Pennachio said.
She's not sure whether the man who grabbed her dog had good or bad intentions, but she's worried for Rusty, who is prone to seizures that can last up to 45 minutes if he's over-stimulated or not fed a specialized diet.
"As soon as we saw the video we ran out, but we couldn't find him," she said. "I don't know if he lives in the area or where he ended up but we couldn't find him at all...we went both directions and he was nowhere."
The Pennachios haven't reported the incident to police, because they don't think it would be a priority for them.
Instead, they've been canvassing the neighborhood, putting up flyers with Rusty's picture and posting the video on Facebook and a lost and found website, Ms. Pennachio said,
The family is offering a reward for information leading to Rusty's safe return. If you see him, call 718-351-1137.


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GAUTIER, Mississippi -- Ingalls Day of Caring 2013 was held Saturday with volunteers from the company working on projects at several venues in Pascagoula, Moss Point, Ocean Springs and Gautier.
A team of eight built a dog park at Shepard State Park in Gautier.
Other teams made minor repairs and beautified the Boys and Girls Club in Ocean Springs by painting, mulching and landscaping; sealed the deck of the concession stand at Pascagoula Beach Park, landscaped at Pascagoula's Senior Citizen Center and painted a classroom at the Pascagoula gymnasium on South Pascagoula Street, and in Moss Point, the volunteers painted and landscaped at three schools and in the downtown area.
Dorothy Shaw, Ingalls Shipbuilding Manager of Community Relations and Government Affairs, said the new volunteer program will become an annual affair.
"Our president, Irwin F. Edenzon, believes that our employees should give back to community and support these kinds of projects," she said.
Shaw said many Ingalls employees are involved in community throughout the year but this Day of Caring is a more concerted and focused effort.
"We try to get the projects accomplished in one day," she said.
The eight men and women at the dog park site were working on into the afternoon heat and hoped to have the .5 acre gated and fenced area and a non-skid dog ramp completed by day's end.
Working on the dog park were Bob Merchent, Phil Woods, D.G. McMillion, Tony Skelton, Cindy Murphy, Rob Kuehnel, Tom Manasco and Mike Strong.
Shaw said Ingalls contacted each mayor to request a project.
"Next year, we may ask non-profits for a list," she said.
In Gautier, the timing was fortuitous as the third graders of Martin Bluff Elementary School had made an appearance in September before Mayor Gordon Gollott and the city council requesting a dog park be built in their city. Shaw's letter requesting a project from the city arrived the same week.
The council approved the project, agreed to pay for materials, with the Ingalls volunteers providing the labor. The children were elated and made a contribution of more than $80 they had collected by selling lemonade and asking donations.


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Mar 24, '14
Page 1 of 2
Brazil-India partnership would be win-win
By Abhismita Sen
Speaking Freely is an Asia Times Online feature that allows guest writers to have their say.
Please click here
if you are interested in contributing.
After disappointing itself for decades, India is now emerging as the swing state in the global balance of power. The world started to take notice of India's rise when New Delhi signed a nuclear pact with former president George W. Bush in July 2005, but that breakthrough is only one dimension of the dramatic transformation
of Indian foreign policy that has taken place since the end of the Cold War.
In recent years, India has enjoyed consistently high rates of growth and steady improvement in human development. It is estimated that India will overtake Japan in terms of gross domestic product by 2020. On the international stage, India is a nuclear power. The country is rich in natural resources and a majority of the population is educated. It is also the biggest exporter in the world of software services and workers. India has been a World Trade Organization member since January 1995.
India is now universally accepted as one of the fastest growing economies of the world. However, like all other BRICS (Brazil, Russia, India, China and South Africa), India mixes high growth in some sectors with a low-to-average rate of general development. Much of the foreign investment that comes in is used to feed the teeming millions in the country. India also faces many threats, including jihadist terrorism and a persistent Maoist insurgency, and is overshadowed by China in its ambition of assuming the leadership of South Asia. Among the most important associates of inequality are caste and religion, with the caste system still denying basic amenities to many people in the countryside.
India's political dealings with its neighbors have not been very successful. Terrorist attacks across the Pakistan-India border or via Kashmir are the main source of India's concern in the west. A radical Islamic Pakistan would be more than a nightmare for India, with Pakistan's nuclear capabilities a constant concern. Its arsenal of warheads, developed with Chinese assistance, is at least as large as India's and probably larger. India's overtures toward Nepal have not been very prudent. After its king dissolved the parliament, India stopped its support for Nepal – including the delivery of weapons that were needed for the fight against Maoist terrorists.
It lies in India's interest to safeguard the status quo. China is the most important neighbor of India. Both nations have tried to forge amiable relations in BRICS summits although border tension still exits. Bhutan acts as a buffer between India and China. There is concern that a "corridor for terrorists" might be established from Nepal, through the northern part of India and Bangladesh. India's relationship with Bangladesh considerably deteriorated after the recent disputes over the waters of the Teesta River.
The most common public policies in India have focused on specific aspects of combating poverty, without considering the deep-seated nature of deprivation and its systemic relationship to inequality. Urban areas benefit more than rural areas from the provision of public goods and infrastructure. The poor generally do not have access to bank accounts. Instead, they hold cash and therefore are subject to inflation tax.
Not surprisingly, there exists a great deal of similarity between the economic and often the social situations of India and fellow BRICS member Brazil. Much can be done together in order to usher in comprehensive development in both these nations. The following areas can be especially beneficial zones of Indo-Brazilian cooperation.
Education: Undeniably India has several of the finest institutions in the world, like the Indian Institutes of Technology. Thousands of international students seek admission to these schools every year. India produces the most engineering graduates every year, with new institutes emerging every day in the country. And although Indian schooling is essentially based on memorizing, it cannot be ignored that the syllabus is an excellent balance of theory and practice, and covers a wide scope of subjects.
Although Brazil appears to have very high rates of literacy, a deeper look into the statistics would show a high rate of drop-outs from primary, secondary and tertiary institutions. And schooling in Brazil is often considered to be of poor quality. Large-scale student exchanges with India will not only enhance Brazilian education, but will bring in revenues for India and solidify Brazil as its loyal ally.
: Although it is estimated that more than half of the Indian population is engaged directly or indirectly in agriculture, the share it contributes to the annual GDP of the country reveals a number of problems. Thus Brazil's expertise in agriculture could be very useful for India, especially with Brazilian products such as soy and processed foods growing in popularity in India. The Indian Council for Agricultural Research has started to engage with its Brazilian counterpart Embrapa, probably the most advanced research institute on agricultural productivity in the world. In the context of food security, Brazil could thus be of key importance to India, and help usher in a new Green Revolution.
Continued 1
India presses for BRICS bank
(Mar 21, '12)
The growing India-Brazil axis
(Jun 9, '07)
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By default, it uses the system basic mailer to dispose of mail options, spwrite(8) to send messages to users' terminals and dosspwrite(8) to send messages to Windows PCs.
The messages are generated by spmdisp from the system message file, which by default is int-config.
The program to be used in each case may be overridden by assignments to the environment variables "MAILER", "WRITER" and "DOSWRITER", most conveniently in the master configuration file gnuspool.conf. The program (or shell script) to be run in each case should take data on standard input and the relevant user name as the first argument, and will run under the identity "spooler".
These variables may also be set on a per-user basis by assignment in a ".gnuspool" file located in a user's home directory. The user may also specify an alternative message file by assignment to the variable "SYSMESG". These programs or scripts will be run under the identity of the user, typically the owner of the job to be run.
The interface (options etc) are internal to GNUspool and are not documented here.
~/.gnuspool user's home directory


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Class AAA: Columbus 4, Indianapolis 0 T.J. House (2-9, 5.42 ERA) gave up just one hit and struck out five in six shutout innings. Relievers Matt Langwell and Fernando Nieve preserved the shutout and the host Clippers beat the Indians. Nate Spears launched a ball over the right field fence to open the third inning. Juan Diaz and Chun-Hsiu Chen each had RBI singles and Tim Fedroff scored following a wild pitch and a throwing error by catcher Lucas May.
Class AA: Akron Aeros Did not play. Next game: 7:05 p.m. Thursday vs. Altoona at Canal Park.
Class A Advanced: Lynchburg 4, Carolina 0 Francisco Lindor's first inning single was uneventful enough. He was stranded after he stole second base. But his was the only hit of the night for the Mudcats. Right hander Jarrett Miller (6-5, 3.51) pitched seven shutout innings and the Hillcats were winners in Lynchburg, Va., where the temperature soared to 91 degrees. The Mudcats' Joseph Colon (0-2, 4.30) gave up all four runs, despite 11 strikeouts in five innings pitched.
Class A: Lake County Captains Did not play. Next game: 8 p.m. today at Beloit, Wis.
Class A Short-season: State College 12, Mahoning Valley 5 With the Scrappers trailing, 6-5, after six innings, right-hand reliever Kerry Doane gave up six runs in the seventh and the host Spikes put the game out of reach. Mahoning Valley's Robel Garcia hit a double and a single for two RBI.
Independent: Lake Erie 4, Washington 2 The Crushers' Craig Hertler hit a two-run RBI single in the top of seventh in Washington, Pa.


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The Navy Office of Women's Policy, located in Washington, D.C., is responsible to the Chief of Naval Personnel (N1) for all topics affecting female officer and enlisted personnel. The Navy Office of Women's Policy monitors gender trends including retention, attrition, pregnancy, parenthood, recruiting, classification, promotions and career development. Other significant responsibilities and projects include interpreting and influencing the following policies:
The Navy Office of Women's Policy staff serves as representatives to the Defense Advisory Committee on Women in the Service (DACOWITS) and the U.S. National Action Plan on Women, Peace, and Security (NAP WPS) Committee.
<< Downloadable Brochure >>
<< Downloadable Brief>>
If you have any questions and/or comments, please contact the Office of Women's Policy staff:
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To call from a DSN line: 664-XXXX
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Consider the following scenario and ask yourself why some people in business are so reluctant to simply apologize and take responsibility when things go wrong.
My friend Jim recently promised his 7-year-old son Nick that he would get him a hot new video game called NBA 2K10 for his birthday. The kid was so excited that he kept talking about it until Jim finally called a local video game store, where he was a regular customer.
Jim asked the store manager, Michelle, the following question: "My son is looking for the NBA 2K10 game that we heard just came out. Do you have it?"
"Yes, we just got it in," Michelle replied.
Jim then asked: "Can you put one aside or reserve one for us?"
"Our store policy is that we don't reserve any merchandise, but we have more than enough," Michelle politely said.
Jim told her they'd be there to buy one at 4 p.m. Yet, as usual in these seemingly simple communication scenarios, things don't always work out as planned. Simply put, the message sent, as clear as you think it may be, is not received as you intended it.
Excitedly, Jim picked up his son after school and they shot right up to the video store. When they walked in, Michelle was not there, but an associate named Bob was. Jim asked for NBA 2K10 for the Wii and Bob went to look for it. A couple of minutes later he came back and said, "We actually don't have that in stock."
Young Nick's face dropped, while his perplexed dad asked, "But I called earlier today and spoke to your manager Michelle and she told me that you had many copies in stock."
"Really?" the employee responded. "There must be some confusion."
Finally, an exasperated Jim asked if Bob could get Michelle on the phone.
Reluctantly, Bob called Michelle. After going back and forth, the employee finally said to Jim, "Did you tell Michelle that you were looking for the NBA 2K10 for the Wii?"
"You're kidding me, right?" Jim said. "How would I know which system to ask for if Michelle said 'We have more than enough' in stock?"
Irritated, Bob responded: "It was your responsibility to say you wanted the Wii version. We have it in stock for other gaming systems, but not for the Wii. How did WE know what you were looking for?"
Angrily, Jim walked out of the store with his disappointed son. He later went online and ordered the new game and vowed never to go back to the video store again. Further, he has told other parents this story, which clearly has not helped the image and brand of the store.
You know what's missing in all this? A simple apology. That's all Jim was looking for. Of course he wanted the game, but he would have taken an apology in that moment. One of the first rules of communication and customer relations is when in doubt, take full responsibility for the situation. Don't put it back on the customer. Don't quibble over who should have said what. Don't point fingers.
These are exactly the things that both the manager and the employee did in this case. Technically, they may be right. Jim could have been more precise in his communication. His mistake was that he assumed when Michelle said they had more than enough of the game in stock, that if she didn't have the Wii version, she would have told him. That sounds reasonable, right?
If you are looking to build relationships, you should apologize quickly, take full responsibility, offer to rectify the situation and do it with a smile. This approach should be employed in any circumstance, but especially given the severe economic downturn and difficult challenges facing small businesses today. Some people just don't get it. What about you? Write to me at firstname.lastname@example.com.
Steve Adubato speaks and coaches on leadership and communication and is the author of "Make the Connection." Visit his website at stand-deliver.com.