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2005 SAB Members
Lauren Bartlett
Quick Links
2005 Student Advisory Board
Lauren is director of the Center's Local Human Rights Lawyering Project. From 2008-2011, Lauren worked as a legal services attorney at Southeast Louisiana Legal Services in the foreclosure prevention unit. She taught a housing law and policy course at Loyola University New Orleans College of Law and served on the board of the ACLU of Louisiana. In 2007, she co-founded the Louisiana Justice Institute, a nonprofit civil rights legal advocacy organization. During law school, Lauren focused on gaining a strong background in international law and human rights. She was an Articles Editor for the Human Rights Brief, participated in a research program in Geneva, Switzerland for the U.N. Committee Against Torture, and was an Executive Board Member of the student group Action for Human Rights. She also served as a summer associate with the group Advocates for Environmental Human Rights, based in New Orleans, Louisiana. Before coming to WCL, Lauren worked with non-profit organizations in California, Nepal, Ghana, Bangladesh and India, alongside advocates fighting for social and environmental justice.
Timothy received a B.S. from Syracuse University in Broadcast Journalism. Prior to attending WCL, Tim worked at WCL's War Crimes Research Office where, among other duties, he conducted research on evolving areas of international criminal and humanitarian law and coordinated the student volunteer program. After completing his undergraduate studies, Tim spent several years working in journalism before joining the Peace Corps. As a Public Health/Community Development volunteer in the Republic of Guinea, his work alternated between tackling public health issues-such as HIV/AIDS, maternal-child health, and intestinal disease-and facilitating community development projects to promote girls' education, adult literacy, and the construction of vital community infrastructure. Following his Peace Corps service, Tim stayed in Guinea to work for the International Rescue Committee (IRC) in its Sexual and Gender-Based Violence Program. As the program's primary trainer, he traveled to refugee camps throughout the country, training IRC's local staff on how to conduct needs assessments of the camp communities with regard to gender violence issues, how to initiate campaigns, and how to evaluate the effectiveness of their efforts. Tim speaks French and has basic facility with several West African languages. He plans to use his law degree to tackle international human rights issues, with particular focus on refugee issues and the international community's response to the consequences of armed conflicts.
Christian graduated from Wesleyan University in 2000 (B.A. in Government and African-American Studies) and received his M.A. in International Relations in 2005 from the London School of Economics and Political Science. After college, Christian worked as a paralegal for a civil rights law firm in New York City, before heading abroad to intern with the Brussels office of Amnesty International, where he was involved in their campaign for ratification of the International Criminal Court (ICC). He has also worked for the Human Sciences Research Council in Durban, South Africa, primarily on projects related to South Africa's Truth and Reconciliation Commission. Christian's areas of interests include international criminal law, transitional justice, and the role (or lack thereof) of human rights in U.S. foreign policy.
Theresa graduated from Florida State University in 1993 with a degree in Anthropology and from the University of Tennessee in 1996 with a graduate degree in Planning. She worked as an urban planner in Florida and Tennessee, assessing the impacts of proposed land developments on affordable housing, transportation, environmental resources, cultural resources, and public services. During that time, she also organized local, statewide, and national actions for Amnesty International. She also volunteered as Amnesty International USA's Middle East Regional Action Network Coordinator. Theresa's main interests in human rights draw from her professional experience in urban development, focusing on community-based land rights and equal access to natural resources and development opportunities.
Craig graduated from Villanova University in May 2001 with a B.A. in Theology and a minor in Peace and Justice Studies. After college, he spent over two years in El Salvador working for a Salvadoran micro-credit development agency in conjunction with Catholic Relief Services, where he was granting small loans to community groups, used to create small businesses and foster economic self-sufficiency. He has also lived and worked in Guatemala, Honduras, Ecuador and India. His focus is International Human Rights, specifically in Central America and he hopes to work in public policy, dealing with the systemic problems that create and perpetuate poverty in developing nations.
Olivia was an LLM student at WCL. She holds a B.A. and law degree from the Rhodes University Law School in Grahamstown, South Africa, where she served as a Law Class President as well as published an article on "the 1999 South African Free and Fair Elections" for the Department of Political Science. Since then, she has also served as an Immigration Legal Assistant at Catholic Charities of Washington, DC from January 2004 -January 2005, where she performed various functions ranging from preparing and filing asylum applications to doing research on human rights and helping to write releases for the State Department. She is fluent in French, Swahili and Zulu and proficient in Danish and German. In 2003, she also served as an Official Interpreter at the US Congress, State Department and UN Headquarters in New York for Government delegations of Congo-DRC and South Africa. She has lived in both Africa and Europe and is interested in pursuing a successful legal career either as an International Human Rights Advocate or as an Immigration Law Attorney.


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AMERIGROUP Corporation (AGP) Q4 2008 Earnings Call February 19, 2009 8:30 AM ET
Julie Loftus Trudell – Investor Relations
James G. Carlson – Chairman of the Board, President, Chief Executive Officer
James W. Truess – Chief Financial Officer, Executive Vice President
John E. Littel – Executive Vice President - External Affairs
Richard C. Zoretic – Chief Operating Officer, Executive Vice President
Thomas Carroll - Stifel Nicolaus & Company, Inc.
Joshua Raskin - Barclays Capital
Greg Nersessian - Credit Suisse
Peter Costa - FTN Midwest
Scott Fidel – Deutsche Bank
Carl McDonald - Oppenheimer & Co., Inc.
John Rex - J.P. Morgan
Daryn Miller - Goldman Sachs
Welcome to AMERIGROUP Corporation's fourth quarter earnings conference call. (Operator Instructions)
I will now turn the conference call over to Julie Loftus Trudell, Senior Vice President, Investor Relations of AMERIGROUP. Please go ahead.
Julie Loftus Trudell
Good morning and thank you for joining AMERIGROUP's fourth quarter conference call and webcast.
With me this morning are AMERIGROUP's Chairman and CEO, Jim Carlson, and Chief Financial Officer Jim Truess. In addition, Dick Zoretic, our Chief Operating Officer, and John Little, our Government Relations Executive Vice President, will be available for Q&A.
The press release announcing our fourth quarter earnings was distributed this morning. A replay of this call will be available shortly after the conclusion of this call through Thursday, February 26th. The numbers to access this replay are in the press release. The conference call will also be available through the Investors page of the company's website, approximately two hours following the conclusion of this live broadcast for 30 days.
The press release and this conference call are intended to be disclosures through methods reasonably designed to provide broad, non-exclusionary distribution to the public in compliance with Regulation Fair Disclosure. The safe harbor provision of the Private Securities Litigation Reform Act of 1995 apply to this call, and some of the statements we'll mention today are forward-looking, including, among other things, our estimates for 2009. We can give no assurance that they will prove to be accurate because they are of a prospective nature. The actual results that are produced in the future could differ materially than those we discuss today.
I encourage you to read our annual report on Form 10-K for the year ended December 31, 2007 that we filed with the SEC and subsequent quarterly reports on Form 10-Q and current reports on Form 8-K filed or furnished with the SEC for certain known risk factors that could cause our actual results to differ materially from our current estimates.
We will be discussing financial information that included non-GAAP financial measures in our call today. Certain financial figures in today's comments are non-GAAP numbers which exclude the effect of one-time charges for the litigation settlement previously disclosed in our second quarter earnings release. Please refer to our 2008 fourth quarter earnings release issued this morning and our current report on Form 8-K filed today with the SEC for the most directly comparable GAAP financial measures and reconciliation to the non-GAAP financial measures discussed today.
As this point I'd like to turn the call over to Jim Carlson. Jim?
James G. Carlson
Thanks, Julie. Good morning and thank you for joining our call today.
All in all, 2008 turned out to be a pretty darn good year for AMERIGROUP. We grew our business nearly 15% despite planned exits from two markets, and we secured the entry into two additional Medicaid markets - New Mexico and Nevada - as well as five new states for Medicare.
Financially, we generated nearly $275 million in cash flow, excluding the impact of a litigation settlement. Our strategy of investing in high-quality short-term instruments preserved our balance sheet, though falling interest rates still pushed down the returns generated by our investment portfolio, suppressing 2008 earnings by over $0.25 per share. Despite this, we achieved earnings per share of $2.77, which was above the $2.60 high end of our original guidance range.
We also tackled and resolved some difficult issues. We settled the long-standing qui tam litigation related to our former Illinois health plan, which enabled us to end years of legal and financial uncertainty. That settlement led to our reporting a GAAP loss for the full year. We won the procurement in the District of Columbia, but made a disciplined though tough decision to exit that market.
In both new and existing markets in TANF, SCHIP, long-term care and Medicare, we achieved meaningful growth as well as strong operational performance. Throughout the year we continued to see our medical trends moderate and, with the help of our state partner, we successfully navigated significant rate and program issues in our first full year in Tennessee.
We made tremendous strides in not only delivering breakthroughs in customer service but also in lowering the percentage of our premiums that support administrative expenses, a difficult combination for any organization to achieve. Most importantly and yet again, we made a positive and lasting difference in the lives and health of the individuals we are entrusted to serve.
These accomplishments are the product of dedicated and exceptional associates who demonstrate their abilities relative to execution, discipline, results and compassion every day. As partial evidence of this, AMERIGROUP was recently honored as one of America's Best Places to Work in Health Care in 2008 by Modern Health Care Magazine.
We expect 2009 and 2010 to continue to be challenging years for health care and for the general economy. For our part, in 2009 we will be focused on maintaining low medical cost trends while elevating our performance relative to clinical quality indicators, prudently managing our balance sheet, continuing to diversify our business, both in terms of markets served and product offerings, reaching out to providers in order to engage them to collaborate more effectively and more actively participating in the public policy and clinical effectiveness arena. In doing these things, we expect to help our government partners conserve scarce resources and manage their health care programs wisely while providing a reasonable return for investors.
Moving on to the quarter, our fourth quarter was solid. We reported earnings per diluted share of $0.70, with quarterly premium revenues of $1.2 billion, reflecting a 10.3% increase over the prior year.
Our health benefits ratio was 81.4%, reflecting our strong operating performance. The SG&A ratio was 13.1% of total revenues.
Our total membership was approximately 1.6 million. Membership decreased by 132,000 members due primarily to our exits in West Tennessee and the District of Columbia, both of which went smoothly. Our risk membership excluding exist in D.C. increased 76,000 or 5.1% when compared to the end of the fourth quarter of last year. Sequentially, our risk membership increased 30,000 compared to the third quarter of 2008.
At the end of the year we had $310 million of unregulated cash, with a debt-to-capital ratio of 26.4%. Our cash flow from operations during the quarter was $104 million.
Let me give you a quick update on some developments in our markets. We've completed our first full quarter of operations in New Mexico in the new groundbreaking coordinated long-term care program, which integrates the management of acute care, long-term care, and home and community based services under a single contract. While still early in the cycle, our team in the state has done a great job launching this program. At year end we served 11,000 members there.
In Tennessee we continue to make progress. The combination of TennCare's rate increases and benefit changes plus our team's effective management appears to be achieving the impact we predicted - exchanging 24-hour private duty nursing services in favor of more clinically appropriate home health care benefits. We're currently working with the state on a long-term care program for late 2009.
As many of you are aware, on December 30th our New Jersey subsidiary terminated its agreement to purchase Centene's Medicaid business in New Jersey due to events that occurred following the execution of the purchase agreement but prior to closing. While this transaction is not material, I would like to note that the decision to terminate the purchase agreement was one based on facts, and while I cannot fully discuss pending litigation, I think it would be helpful to provide you with a brief overview of those.
Earlier in 2008 the state announced that beginning in 2009 it would begin using risk scoring to set capitation rates for Medicaid managed care plans, TANF and SCHIP populations. At the time our subsidiary entered into the purchase agreement with Centene, the state had not yet announced the final risk scoring methodology or the final periodic risk scores of each Medicaid managed care plan.
Shortly after execution of the purchase agreement, the state notified MCOs of their respective risk scores and the effect of the score on each plan's 2009 capitation rates. Upon learning of the risk score and risk adjustment applicable to Centene's capitation rates effective January 1, 2009, our subsidiary availed itself of its right to terminate the purchase agreement in accordance with its terms.
Centene has filed suit claiming, among other things, that the determination was improper. We believe firmly that the termination was proper and contractually sound.
Under this plan, our New Jersey subsidiary received a risk adjustment effective January 1, 2009 reflecting approximately a 3% rate reduction for our TANF and SCHIP populations. This adjustment was about 2% more than our preliminary expectations for our business. While we cannot comment on scores for other companies, we do believe that there was a broad range of outcomes, some going up and some coming down. Rates will now be adjusted every six months.
We were also asked by the State of Nevada to step in and serve individuals enrolled in their Medicaid and SCHIP programs. After due diligence on the adequacy of premium rates and the operating environment, we entered into a contract and began operations there on February 1, 2009. We currently are serving approximately 50,000 members in that market.
Medicaid plays an especially important role in our health care system in tough economic times, and we are pleased with the steps that the president and Congress have taken already to shore up safety net programs. Getting the S-SCHIP program reauthorized and expanded is a critical first step to improving access and cost for low-income families. By the end of 2010, subject to the state's authorizing expansions, this program is expected to cover 11 million children. AMERIGROUP currently covers about 1 of every 25 children enrolled, and we look forward to potential expansions of this program in our states.
The states have been facing unprecedented budget shortfalls for more than a year. Last August we began working with a number of concerned groups on federal medical assistance percentage or FMAP relief. Congress recognized the importance of stabilizing the states and the stimulus nature of Medicaid funding.
The American Recovery and Reinvestment Act includes approximately $88 billion in assistance for state Medicaid programs in the form of an increase to the FMAP. Each state will receive a minimum increase of 6.2% and the balance of the funding will be based on the unemployment rate in each state. The bill also includes maintenance of effort requirements to encourage states to restore cuts that were made in the past year as well as funds to enable them to address growing caseloads as a result of unemployment and, in some markets, flexibility to expand both Medicaid and SCHIP enrollment. This doesn't mean that the budget crunch is lifted for states, but the stimulus does provide considerable relief and should allow states to conduct actuarially sound rate processes.
Further, we have not at this point factored the SCHIP expansion, FMAP infusion, or increases in enrollment due to unemployment into our guidance. While we are cautiously optimistic about the potential positives from these actions, we will await further detail in each of our markets before making any adjustments to our outlook.
We were encouraged by the three states that have rate cycles early in the year. In both Ohio and Maryland we received rate increases on January 1st in the mid-4% range and New York preliminarily provided a trend increase in the mid single digits, but there are a number of open program issues to resolve before the rates are final. In setting rates for April 1st, the state also restored the temporary 1% reduction that was part of health care reductions made in October. Each of these states conducted their rates processes without the certainty of the stimulus funding.
Florida has had two special sessions to address their budget shortfalls. In the most recent the state cut a number of provider rates and services, which resulted in a 1.7% reduction from March through June. The legislature will convene in its regular session in March, so we are hopeful that they will consider restoration of some of these reductions as well as prepare for an actuarially sound rate process for fiscal year '10. Obviously, we'll get a better sense of the impact of the stimulus and changes in the economy as we get closer to the summer rate season.
So with that, I'll turn it over to Jim to run through the numbers. Jim?
James W. Truess
Thanks, Jim. Good morning, everyone.
I'm going to begin by providing summary comments on the quarter. I'll keep those brief. I think the results are solid and straightforward. The balance sheet and cash flow are also strong. I do want to spend the majority of my time on our guidance, which we are reaffirming. I think it's a positive story as well, and I want to make sure it's as clear as possible.
So starting with the quarter, net income was $37.3 million in the fourth quarter, resulting in earnings per diluted share of $0.70 versus $31.1 million or $0.57 in the fourth quarter of 2007 and compared to $39.4 million or $0.74 per diluted share in the third quarter of 2008.
Fourth quarter premium revenues were $1.2 billion, reflecting a 10% increase in premium revenue compared to the fourth quarter of 2007. Sequentially, premium revenues increased $56 million or 5.1% compared to the third quarter of 2008. The sequential increase primarily reflects the first full quarter of operations in New Mexico as well as rate increases on September 1st in Texas and the normal Georgia rate increase that came through in the fourth quarter. For the year, premium revenues increased 14.8% to $4.4 billion from $3.9 billion in 2007.
Fourth quarter investment income and other revenue were $12.7 million compared with $23.7 million in the fourth quarter of 2007. Sequentially, investment income and other revenue decreased $4.9 million or 28% from the third quarter of 2008. Investment income and other revenue decreased due to the conclusion of the West Tennessee Administrative Service Only business on October 31st and a decrease in investment yields. Our investment yields declined about 30 basis points in the fourth quarter as expected, but we continue to believe the quality and value of our portfolio remains solid.
Health benefits as a percent of premium revenues were 81.4% for the fourth quarter of 2008 versus 82.9% for the fourth quarter of 2007 and compares to 80.1% in the third quarter of 2008. For the full year 2008, HBR was 81.4% versus 83.1% for the full year 2007. Throughout the year we continued to see our medical trends moderate. The fourth quarter of 2008 health benefits ratio reflects favorable medical cost performance during the quarter, with the majority of health plans including Tennessee - exceeding our expectations. HBR was also impacted by favorable reserve development, primarily in Texas, which contributed to the lower health benefits ratio this quarter. Our performance in Texas is now such that we are sharing a large portion of our upside results with the state through the experience rebate mechanism.
The selling, general and administrative expense ratio was 13.1% of total revenues for the fourth quarter of 2008, unchanged from the fourth quarter of 2007 and compared with 14.4% in the third quarter of 2008. Our core SG&A expenses were right on plan for the quarter. We have been aggressively managing expenses throughout the year and the fourth quarter reflects the ongoing impact of those efforts. Total SG&A expenses for the quarter remains elevated due to experience rebate expense in Texas associated with favorable performance in the state. The favorable results in Texas positively impacted the health benefits ratio, but through the experience rebate mechanism increased the SG&A ratio. For the full year 2008, the selling, general and administrative expense ratio was 13.5% compared with 12.6% for the full year 2007.
Depreciation and amortization increased $2.1 million to $10.9 million when compared to the third quarter of 2008. The increase was primarily due to the accelerated amortization of debt issuance costs associated with increased principal payments on debt.
The fourth quarter tax rate was 39.5% versus 38.9% in the third quarter. The rate increase is primarily attributable to a change in the blended state income tax rate.
Cash flow provided by operations totaled $103.7 million for the quarter, representing 2.8 times net income. Excluding the litigation settlement, cash flow provided by operations was $273.9 million for the full year, representing 1.8 times adjusted net income.
At year end cash and investments totaled $1.4 billion, of which $310 million was unregulated. Our unregulated cash increased approximately $27 million during the quarter compared to September 30, 2008. Our regulated subsidiaries provided strong dividends that allowed us to grow our cash position, further capitalize our new markets in New Mexico, and reduce debt.
Late in the quarter we amended our credit agreement, which enhances our flexibility. As a result, restrictions that we previously had on share repurchases in 2009 have been relaxed and we can continue to repurchase shares this year. We now have increased flexibility to buy our convertible notes in the open market, and we now have a provision that allows us to conduct auctions to repurchase our term loan. In the fourth quarter we purchased through an auction approximately $5.5 million of the outstanding term loan under our credit agreement. We repurchased the debt at 88% of face value and now have $44.3 million outstanding on our term loan.
At the close of the quarter our debt-to-total capital ratio decreased to 26.4% from 27.6% in the third quarter of 2008. We recently announced a 3 million share increase to the company's ongoing share repurchase program, which was initially authorized on February 12, 2008. In the fourth quarter we repurchased 320,000 shares of common stock for approximately $7.8 million. As of December 31, 2008, we had purchased approximately 1.2 million shares for approximately $30.6 million.
We are pleased with the position of our balance sheet. Our unregulated cash position at $310 million is probably the strongest in the industry given our size, and we also have one of the lowest leverage ratios in the industry, so we haven't manufactured that liquidity through leverage. And our regulated subsidiaries are well capitalized, approaching 400% of RBC at year end. We believe our balance sheet is uniquely well positioned and where it should be during these times of heightened uncertainty. With our amended credit facility and increased share buyback authority, we believe we have broad flexibility to deploy capital towards appropriate opportunities.
Our days in claims payable was 52 days, down 3 days from 55 last quarter, and remains at the higher end of our expected range of 45 to 55 days. The decline in days primarily reflects the completed claim system transition in several markets and their return to normalized processing pace as well as the impact from our first full quarter of operations in New Mexico versus a partial third quarter.
Prior to discussing guidance, let me review the reclassifications that we will be making to the income statement in 2009. As you know, many of our states levy taxes on premiums and the tax rates vary widely by state from 1.75% to 5.5% of revenues. Historically, premium tax has been embedded in our SG&A expense line. Starting in the first quarter of 2009, we will report premium tax on a separate line following SG&A and before depreciation and amortization. By isolating premium tax, the remaining SG&A expenses are more reflective of core operating expenses and the ratio is not as significantly impacted by changing business volumes in states with high premium tax rates.
Our SG&A ratio is also impacted by experience rebate in Texas. Our Texas health plan is required to share favorable outcomes - sometimes called an experience rebate with the State of Texas in the event results exceed established thresholds. Beginning in the first quarter of 2009, we will remove this rebate amount from SG&A and include it as a reduction against premium revenue. I think this makes sense because the amount is effectively a rebate of premium to the state. This will serve to reduce variability in our SG&A ratio that we sometimes experience due to variations in experience rebate just as we've experienced this quarter.
On balance, these reclassifications will increase the health benefits ratio and reduce the SG&A ratio. I think this presentation will be more useful to investors.
Specifically now on guidance, we are reiterating our 2009 annual earnings in the range of $2.50 to $2.65 per diluted share. Let me spend a few minutes to detail our assessment of the progression from 2008 to 2009.
We are pleased with the performance that our business delivered during 2008 in this particularly challenging environment. Our results reflect a net income margin of 3.3% excluding the one-time litigation charge, which is toward the high end of our long-term margin expectation of 2.5% to 3.5%.
In 2009, our guidance implies the net income margin will moderate to the middle of our range. This movement is driven by three primary factors. First, 2008 was impacted by a range of unique items that on balance favorably impacted EPS by roughly $0.11. These include retroactive premium rate increases in Georgia and Tennessee, net favorable reserve development, and market exits in West Tennessee and D.C. While what constitutes unique items versus run rate items is subject to significant analytical judgment, I believe an impact in the rage of $0.11 is an accurate reflection of the broad range of items that played through 2008.
The second factor incorporated in our 2009 guidance is a reduction in investment income. We anticipate that interest rates for the foreseeable future will be below what we achieved in 2008. We assume the yields on our portfolio will average well below 2% in 2009, most likely in the range of 1.5% to 2%. We project the impact on earnings from lower investment income to be approximately $0.26 to $0.28 per diluted share compared to 2008.
To diverge for just a moment, I think it's important to note that if yields on fixed income were at more normalized longer-term levels - let's say 4.5% - we would expect our annual earnings to be roughly $0.50 higher on an EPS basis. For a variety of reasons, I don't believe interest rates on higher quality instruments will stay low, as they are today, for an indefinite period. It's just hard to predict exactly when they will change and we are not assuming a change in 2009.
Finally, we are planning for an increase in non-cash interest expense due to the change in accounting for our convertible notes. This factor decreases earnings by approximately $0.12 per diluted share in 2009. This impact is partially offset by lower outstanding debt and lower interest rates in 2009, bringing the net impact down to approximately $0.07 per diluted share.
Neutralizing for these three items, our EPS guidance implies underlying earnings growth percentages in the upper single to lower double digit range. We believe this is a prudent assumption. It is still early in the year, with important premium rate renewals yet to come and four quarters ahead of us. If history is any guide, many things will develop during the year. Some will be challenges, but some will be positives as well.
Please note that our 2009 guidance statistics incorporate the new 2009 income statement reclassifications that I discussed earlier. Our 2009 estimates in the range of $2.50 to $2.65 are predicated on the following assumptions, among others:
Total revenues in the $4.9 to $5 billion range, which reflects 10% to 13% organic premium revenue growth.
Investment income and other of below $29 million versus $71.4 million in 2008. The decrease in this line reflects the loss of the West Tennessee ASO revenue of approximately $20 million as well as a decrease in investment income.
Health benefits ratio in the low 84% range. This ratio is calculated using the premium revenue under our new classification; in comparison to the equivalent 2008 ratio of 82.9%, the 2009 ratio is increasing due primarily to the full year impact of new market entries. Additionally, the sequential comparison is impacted by the retroactive premium rates received and the favorable reserve development experienced in 2008.
Selling, general and administrative expenses in the low to mid 8% range. This ratio in 2008 on an equivalent basis after adjusting for the reclassification was 9.8%. The improvement between the years is due primarily to the conclusion of the West Tennessee ASO business, the discontinued operations costs of market exits in 2008, and variable compensation expense associated with more favorable than projected results in 2008.
And diluted shares outstanding of approximately 54 million.
Let me cover one last item on guidance. Although we don't give quarterly guidance, I recognize that the seasonality of our business can sometimes generate questions. As a general comment, it is important to recognize that the distribution of medical costs across the year is a key component in our business. In most cases our populations have incurred the highest medical costs in the first quarter, while rate increases tend to be more heavily weighted towards the back half of the year. The result is that earnings are usually lowest in the first quarter, with an associated higher health benefits ratio.
I think it's worthwhile to consider this seasonality. Over the last couple of years the first quarter has been in the upper teens as a percentage of the full year earnings once you account for the effect of the retroactive rate increase in Georgia that boosted the first quarter in 2008. I don't foresee a reason these seasonal patterns would change going forward.
In addition, we expect that first quarter investment income will reflect an average yield on investment below 2%, as I mentioned earlier.
We believe our ability to generate solid cash flow will continue in 2009. Our history indicates that cash flow from operations in the range of 1.25 to 1.7 time net income is common when revenues are growing in the range we project for 2009. However, there's also some seasonality to cash flow. I wouldn't be surprised to see cash flow from operations in the first quarter of 2009 be low, similar to what we experienced in the first quarter of 2008.
We anticipate variable compensation payments and experience rebate payments in the first quarter. Also, unearned revenue is relatively high at year end and the normal sequential variability in premium receipts may bring that down at quarter end. On balance, these changes in working capital items are more likely to reduce cash flow from operations in the first quarter, but through subsequent quarters these effects tend to normalize.
We remain optimistic and excited about the prospects for our business. We have concluded a strong 2008 and there are numerous macro factors that bode well for us in the future. While there is much to be concerned about in the general economy, we continue to believe that our business will grow and prosper.
Well, I may have missed my objective of being succinct, so let me conclude here. We're happy to take your questions. Operator?
Question-and-Answer Session
Thank you. (Operator Instructions) Your first question comes from Thomas Carroll - Stifel Nicolaus & Company, Inc.
Thomas Carroll - Stifel Nicolaus & Company, Inc.
Administratively, could you maybe tell us what the positive PPD in the quarter was and maybe how much of it was from Texas?
James W. Truess
In the quarter we were benefited net about $0.08 from development, and that comes about let me just break down the pieces here for you - we had net favorable development on the medical line that helped us about $0.16 and that was offset by $0.08 of out of period experience rebate, so that got us to the net $0.08.
Thomas Carroll - Stifel Nicolaus & Company, Inc.
And then I just wanted to ask a clarification on your New Jersey litigation. And I understand you can't talk much about it, but was there a provision in your contract with Centene that said we, AMERIGROUP, when we find out what the new risk adjustment scores are, have the ability to step away from this agreement? Was it that explicit?
James G. Carlson
I have to be a little careful about that because of the litigation, but I will say that anytime we're engaged in an M&A opportunity we always include a material adverse effect clause. And our view on such clauses is, unless something is specifically scheduled out as an exception to it, it affects all features of a transaction. So, as you can imagine, that's a portion of the contract that we're basing our claim that we think this agreement was broken effectively based upon contractual terms.
Thomas Carroll - Stifel Nicolaus & Company, Inc.
Florida, you mentioned a 1.7% rate decrease between March and June. Is that on top of the 2.7% number that we've previously discussed?
John E. Little
No, that's in place of. The original estimates were in the 2.5% to 3%, but when they factor in some of the provisions and our member mix, it comes out to about 1.7%, some of which is passed through.
Thomas Carroll - Stifel Nicolaus & Company, Inc.
Okay, so that's favorable to AMERIGROUP, then, obviously here. So we'll get a new rate change in Florida beginning July 1?
John E. Littel
Correct. I'm sorry, Tom, that's September 1st.
Your next question comes from Joshua Raskin - Barclays Capital.
Joshua Raskin - Barclays Capital
First question just on the guidance. I think, Jim, you'd mentioned that the S-SCHIP reauthorization, the stimulus bill, and then even higher levels of unemployment, none of that was in your guidance, and I'm just curious - you know, we've seen signed bills at this point what exactly are we waiting for and should we assume then that your guidance did not assume actuarially sound rate increases in your states?
James G. Carlson
Well, I think, Josh, the way we've looked at the S-SCHIP enterprise and FMAP is that they're fairly interconnected. We've long advocated for covering all of America's children. We're really pleased by the legislation being such a high priority. But it's been difficult to forecast at what pace the states would grow the size of their programs knowing that the states have to come up with their portion of the funds to make the matching calculation work. And you also have to go out and find the people and there's a personal responsibility component to SCHIP where the people have to pay very modest premiums.
So as we were building our budget and issuing our preliminary guidance almost 100 days ago, I guess - it's almost 4 months ago - we really didn't have at that point in time enough clarity on whether these ideas would become laws. And even at this point in time it's very difficult for us to identify with any great precision when we'll see expansion in the markets in which we participate.
So we do think the intention's there, the money's there; with FMAP now being passed as part of the stimulus bill, the states that do want to expand their SCHIP programs have the ability to fund their portion of it. Still have to go through rolling out these as program expansions, still have to find the people, get them enrolled, so maybe it's fair to think that by the end of the year we'll see an uplift of some sort. When we're in a position to quantify it, we'll update our view accordingly.
Joshua Raskin - Barclays Capital
So it really sounds like just more of a timing issue. So if we were to think about AMERIGROUP's 4% national share on SCHIP membership and maybe over the next two years we make an assumption about how much of that 11 million is actually enrolled, is it sort of fair to say okay, you think you'll maintain market share or are there reasons to believe that you'd be higher or lower?
James G. Carlson
Well, I think we're benefited by the fact that in a couple of states where there's quite a number of unenrolled people, those are states in which we operate, like Texas, New Jersey, and Florida. So there are some good catalysts for us to potentially grow. We're not in California; probably a lot of them are in California. So I'm not sure we're ready to say the same proportion of the unenrolled people is commensurate with what we are already doing, but probably not uncomfortable with that projection either.
So I think the really big picture is we've got a new president, a new Congress. You all follow the whole $2.3 to $2.5 trillion health care economy and here in the first 30 days of a new presidency we've got the SCHIP expansion that we've advocated for for better than a decade and the FMAP funding to shore up these programs. I think it really validates the importance of the programs that we're participating in. They're broadly seen on a bipartisan basis. This is all net favorable for us, but I think it's premature to get too excited about the impact in 2009 until we get some more clarity.
Joshua Raskin - Barclays Capital
And then just the last follow up on that. You mentioned in your prepared remarks you did not have assumptions for higher unemployment, so are you assuming current rates of unemployment and why would you not factor in consensus?
James G. Carlson
Well, I think we just want to see exactly what's flowing through the states before we raise our perspective. We do think with the unemployment rate rising, I think there's a commonly referred to Kaiser Foundation study that says for every X number of people who lose their jobs, Y number of people go into the Medicaid programs, but we're just going to need to see exactly how that plays out state by state to recalibrate our growth.
That said, I think we would, without being provoked too hard here, would admit that if there's some upside in our view for 2009 we may see higher enrollment and revenue levels than we're able to forecast at this point in time. But we'd just like to see a little bit more clarity from within the states.
And I think the states have been trying to model out the implications of stimulus. There's some states that haven't completed their budgets yet and so forth, waiting for the details, and all of that's been going on really in the last few weeks. So probably by the next time we are on an earnings call, I think we'd have some more clarity for you.
Your next question comes from Greg Nersessian - Credit Suisse.
Greg Nersessian - Credit Suisse
Just a couple of state questions for you specifically. I guess the Texas enrollment was down sequentially. All the other states looked up or flat to up. I was wondering if there was some benefit changes or eligibility changes there or what was impacting the Texas enrollment for the quarter?
James G. Carlson
I'm going to ask Dick Zoretic to comment on that a little bit. There are a couple phenomena that have gone on in the last quarter that we've experienced that we'll work through pretty quickly, we think, in Texas, so I wouldn't read any long-term trends into what we're seeing.
But, Dick, want to highlight what's going on in Texas?
Richard C. Zoretic
Yes, just real quickly, I think there's two issues impacting enrollment in the fourth quarter. The first is we saw some delays in processing in the enrollment centers as a result of Hurricane Ike, some residual impact from that.
But also in addition to that the state changed its auto assignment methodology in the quarter in order to distribute members more evenly across plans. Typically in the past the standard formula has members being allocated on the basis of self-selection rates, and that has benefited us because we've historically had a very high self-selection rate. What the state is doing at the moment is distributing members to some of the smaller, newer plans in the market to help them grow their membership up to sustainable levels.
They got a few new plans in the course of the last year where the membership is very small, and the state has told us that that new or temporary auto assignment arrangement is going to be in place probably until the end of the first quarter, at which point we'll revert to the original or standard arrangement. So at that point we would expect to see more growth from auto assignment.
Greg Nersessian - Credit Suisse
So how much more pressure do you expect in Texas, I guess, from that impact?
Richard C. Zoretic
Within the first quarter?
Greg Nersessian - Credit Suisse
Richard C. Zoretic
Well, we think it'll fluctuate and probably not more pressure than we've already seen. And we'll be prepared to give you more detail on that at the end of the first quarter.
Greg Nersessian - Credit Suisse
The second question was in Florida. I guess WellCare discontinued their participation in the pilot program. You share a couple of counties with them. What's your view on that? Are you going to be taking any of that business? It doesn't sound like it's in your guidance?
James G. Carlson
Well, I think we continue to look at the reform program pretty critically. When I say critically, I don't mean criticism, but we are certainly analyzing what the experience has been there. It's not been a particularly good experience for us, but we have tried to work with the state. We don't want to draw a conclusion prematurely. We hope that the state understands better some of the issues relative to having had so many competitors there nobody has enough share to really drive sort of the innovation and consumer orientation that were the original goals of the program.
We haven't made a decision here as to whether we would cap our enrollment in those counties. We're trying to get some more details about what the state's reaction to this is. We also, by the same token, are not forecasting a surge in our membership as a result of their exit right now, too. They're about 15 to 20 different competitors in those counties, so there are a lot of places for those members to go, and I don't think it's a big needle mover in either direction for us right now.
But the reform program has not performed well; I'm not surprised others are struggling with it. I think some of the high-minded goals that were originally talked about have fallen a little short in terms of their realization and, if you really pressed, it would be easy to make a decision that those were counties that you could live without. We have not made that decision. We're going to try to work through it with the state and try to stay there and be part of the solution.
Greg Nersessian - Credit Suisse
And then finally just sort of a conceptual question. With the growth in the Medicaid caseloads I know you guys aren't building it into your guidance, but clearly there's an expectation out there that the rising unemployment rate's going to result in more people in Medicaid - yet obviously in many states there's already an access problem, a provider access problem in terms of not enough Medicaid providers willing to accept Medicaid rates. How do you think this may ultimately impact your provider contract? Is there a concern here that in order to continue to service that population, Medicaid providers are going to demand higher rates ultimately from you?
James G. Carlson
Well, I think the way we would look at it, Greg, is when we think about provider availability in Medicaid we're more oriented towards some of the specialists and super specialists that have full practices. And, frankly, they don't even want commercial managed care; they'd like to be able to be paid charges. So we don't really have significant access problems relative to the medical homes, the primary care physicians, OBGYNs. I mean, there's obviously going to be some spotty challenges for our people who've built these provider networks or the local health plan managers, but it's really not been a significant issue for us in the past.
And I would just sort of remind everybody that the size of the Medicaid program is over $350 billion, and, frankly speaking, it keeps getting bigger and bigger and there are way more clinicians and hospitals that need that revenue flow, even if they don't like the unit cost as much as they like commercial or Medicare reimbursement. So we're not really seeing any exodus of physicians and so forth. We do think that there may be some pressure from some of the hospitals, but the fee schedules often are driven by fee for service benchmarks within the state Medicaid programs. There's always pressure on unit costs and in our industry we're not immune to that sort of thing, but there's nothing that the economy in and of itself, I think, is driving relative to increased pressure that we're going to have to respond to.
Greg Nersessian - Credit Suisse
So you think your network capacity is appropriate for whatever the level of caseload growth you end up seeing?
James G. Carlson
Yes, we certainly do. And we suspect with some of the softening in the commercial sector, there may be even more providers interested than there have been in the past.
I guess given our queue that's building up, we're going to have to limit folks to one question if we can, please.
Your next question comes from Peter Costa - FTN Midwest.
Peter Costa - FTN Midwest
Could you explain to me - I appreciate breaking out the reclassification of all the prior quarters in the press release - the seasonality on your SG&A going forward will be similar to what we saw in 2008 under the reclassification side, and then why exactly did it decline in absolute dollars on the reclassification from 3Q to 4Q?
James W. Truess
I think probably one of the tough things about looking at the SG&A in '08 from a seasonality perspective is we did have quite a few things flowing through on that line related to the market exits and that sort of thing. We also ramped up in New Mexico in the third quarter. And so the fourth quarter, where you see our SG&A's come down, that's probably much more reflective of the run rate into '09 whereas particularly the second and third quarter had a range of other items that were playing through there that elevated SG&A.
Peter Costa - FTN Midwest
So sort of projecting that flat going forward is the right way to think of it?
James W. Truess
Yes. I think as long as you're working into our ratio range, as long as that's getting you into our ratio range, I think you should be in pretty good shape.
The other thing I'd say about SG&A on an absolute dollar basis for us, that is going to tend to be more consistent quarter-over-quarter, particularly in a year like '09 where we're pretty well in the new markets that we're going to be in and we're not changing our SG&A structure a lot going into '09. More what we're getting the effect of is we have a very robust infrastructure in place, we're taking on this new business, and we're not adding a ton of costs for that. So it's probably much more of a flat amount on a dollar basis quarter by quarter.
Your next question comes from Scott Fidel – Deutsche Bank.
Scott Fidel – Deutsche Bank
My first question is what is the average rate increase at this point that you're building into your '09 forecast? Then I know you mentioned in your prepared remarks that you still have a couple of states that aren't yet finalized yet. If you could just remind us which of those states you still have to finalize rates for '09?
James W. Truess
Generally speaking, we think longer term this is a business that usually should have rate increases in the 3% to 5% range. We think that for '09 on the renewals that we're getting they're going to be below the bottom of that range, below 3%, so what you're getting in '09 is kind of the connected effect of the rates that we got in '08 that flow into '09 and then the renewals that we're getting in '09. But generally we think that our guidance implies that we're below the bottom of what I think is the long term number.
Just real quickly, the states that still have upcoming normal rate renewals is Georgia, Tennessee, Florida, Virginia, Texas and New Jersey.
Scott Fidel - Deutsche Bank
And if I could just ask one quick follow up just on S-SCHIP and just trying to think about the impact potentially to the P&L if you start to grow S-SCHIP a lot faster, how does the difference in premiums, PMPM, look on S-SCHIP and then how should we think about maybe with MLR and G&A how the S-SCHIP book might look relative to, let's say, your consolidated book of business?
James W. Truess
S-SCHIP certainly has a much a lower PMPM. Obviously, it varies state by state, but let's say very, very roughly speaking around $100. The MLR's probably not that far off our company average. Obviously, that can vary a bit and it depends. It can be a little bit higher on the SG&A side just because the premium is so low and some of the administrative costs are somewhat equivalent. But I think by and large outside the premium, the other factors are not dramatic.
Scott Fidel - Deutsche Bank
Then, Jim, just what's your tax rate for Q4 '09?
James W. Truess
I think it's pretty similar to where we've been running for the full year '08, let's say in the 38% range.
Your next question comes from Carl McDonald - Oppenheimer & Co., Inc.
Carl McDonald - Oppenheimer & Co., Inc.
My first question is just did you bid for the Texas rural SCHIP contract? And then secondly if you have any thoughts on the loss ratio profile of the new members that you could pick up because of unemployment, any thoughts around is it a higher or lower level of utilization?
James G. Carlson
Sure. We did bid. Our bias is typically to bid every time we see a good business opportunity. That said, we are predicting that there were a lot of bidders. And our competitiveness is enhanced by the fact we do a great job for the state already, and it's weakened a little bit by the fact we don't have an existing network that covers all those rural sections of Texas. So we have a pretty modest expectation, but nonetheless we wouldn't hesitate to continue to demonstrate to Texas our willingness to serve their needs. We'd love to get some good news there; won't be surprised if we don't.
James W. Truess
That's a tough question. We study that issue a lot. I don't think we have a view at this point that incremental membership that we may see as either favorable or unfavorable. I think there's a lot of conventional wisdom that I think goes in either direction, so I'd say we probably don't have a bias one way or the other on that one.
Your next question comes from John Rex - J.P. Morgan.
John Rex - J.P. Morgan
I just wanted to clarify your commentary and kind of the benefit from reserve development in the quarter. The $0.16, the kind of gross number, was that all in Texas and everything in terms of reserve development impact?
James W. Truess
Yes, John, that's right, that's all in, although I would say certainly the majority of that was in Texas. But the $0.16 is all in all markets.
John Rex - J.P. Morgan
So then so you're kind of net $0.08. Are you implying then kind of the cleaned up run rate, I mean, you're comfortable that a cleaned up 4Q run rate is a $0.62 run rate?
James W. Truess
John Rex - J.P. Morgan
Okay, so that's kind of the right jumping off point. And then where are you accruing Tennessee now with the kind of experience you've had with where you are in the program right now?
James W. Truess
Well, Tennessee's now mature enough that it's being - from an actuarial perspective it's being booked to its run rate experience based on our paid claims activity in the way that any other market would be. It's running in the 80s, which is good, and we're certainly pleased with the progression. I think as we sit here today, we're really where we thought we would be at this time six months ago, so we're certainly gratified by that.
The other thing I'd mention on Tennessee is we did see a little bit of favorable development in the quarter, so when you see that finally come out that ratio will be a little bit lower than I might say on a run rate basis the ratio is. But I think Tennessee's doing good.
John Rex - J.P. Morgan
Should it be, run rate basis, look in the mid 80s or low 80s?
James W. Truess
I might say mid to maybe a little above. I don't think Tennessee is fully where we ultimately want it to be, so I'd just probably say more in the mid to upper 80s.
John Rex - J.P. Morgan
And then you're not including any share repurchase assumptions in your EPS outlook right now, is that correct?
James W. Truess
The only thing we're including is we basically like to be purchasing at least enough to neutralize what would otherwise be growth in share count from option exercises and that sort of thing, so we have a baseline program that's largely targeted around keeping shares effectively flat.
John Rex - J.P. Morgan
So can we look out at the cash position of the parent, kind of ultimately where do you want to be in terms of excess cash at the parent when you think over the next year or two? I think you've mentioned in the past that you're going to have more commentary on kind of where that's going to go and what your thoughts would be on the use of that.
James W. Truess
I don't think at this point we're going to put a hard target out there for that unrestricted cash. I think what we've done in the last quarter is really open up our flexibility to give us as many options as we can or that we can have in order to deploy that cash. I think probably compared to two years ago, we're probably likely to hang on to more unrestricted cash at the parent. I mean, just the general external environment's a lot more volatile these days.
But I continue to view us - we want to be opportunistic, we want to have the ability to make choices when they present themselves. It's been interesting to see just how much movement there has been, whether it be our debt instruments or otherwise. And so we're going to continue to give ourselves the ability to be opportunistic, but I don't think at this point we're locking ourselves into a specific range.
Your next question comes from Daryn Miller - Goldman Sachs.
Daryn Miller - Goldman Sachs
A question regarding your convertible debt. If you were to retire that with the debt trading par in the market, can you actually retire it at below par or do you have to do it at par? And then with the warrants that you had wrapped around that, how does that factor into that buyback?
James W. Truess
Two pieces. The way that we can take down our convertible debt is really through open market purchases, so if we were to do that, that would be at whatever we could negotiate in the market. So that's the only way that those could be retired.
And then with the derivatives that sit on top of that, we also would have the ability to go and in essence change the notional amount of those derivatives downward to the amount that remains outstanding and, depending upon the instrument, that in and of itself would generate gains or losses depending upon where their value is today versus what we have on the books.
Daryn Miller - Goldman Sachs
Would you expect that to potentially change your share count for EPS purposes?
James W. Truess
No, I don't think so because the convert is out of the money and all the derivatives are out of the money right now, so those changes per se wouldn't have an impact on the share count in the near term. Theoretically it could have an impact on what the share count might otherwise be out in the distant future, but not today.
Daryn Miller - Goldman Sachs
And then what are you guys seeing in terms of flu now?
James G. Carlson
Well, I'd just remind everybody, flu's a big part of our business given the populations we serve children and frail elderly and so forth. We always have an outreach program; this year's no different. Even though the CDC was predicting something a little bit milder, we take it seriously every year. I think what we're probably most sensitive to is changes in timing, severity, distribution over time.
So we're certainly seeing flu in our markets. We're not surprised. There's baseline experience that we have. We don't see anything that's extraordinarily problematic at this point in time, but we probably can't give a whole lot more clarity in that until we wrack up the first quarter and see what the actual numbers are. It's always important to watch, but we do think we've taken adequate precautions to forestall it harming us in a way that's unpredicted.
I would now like to turn the call back to Mr. Carlson for closing remarks.
James G. Carlson
Well, thanks, Operator.
Our performance in 2008, delivered under demanding circumstances, allows us to substantiate the following conclusion - AMERIGROUP is a business that has been built to last in both good and difficult economic times. We are poised to make further contributions to the health of America's financial vulnerable, disabled, and frail elderly. At AMERIGROUP we have been reminding ourselves that great companies use tough times to get even stronger. We have come a long way in 15 years, but in many ways it feels like we're just getting started. We've accomplished much, but there's much more we can do.
So thank you for joining us on our call this morning, and we'll see you soon.
This concludes today's conference call. Thank you for your participation. You may now disconnect.
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subset: commoncrawl


text:
Hi all,
With 20+ m0n0wall boxes in the field, central management is slowly
moving to the top of the wish list. Others have had similar wishes and
others again have even offered to build a win32 app. I would fancy a
server solution instead where the management suite is running 24/7. Why?
Some of my m0n0s are on dynamic ip, others are behind other nat-boxes
and keeping track of ip addresses for the rest is... well.. not fun. So
why not let all the m0n0s contact the central management server instead
and download a new config if one has been updated. The time between the
contacts could be specified in a TTL value (not in the config.xml) which
is read each time a contact is made. And now we are at it - why not make
deplayment easier too. Example:
- admin: Boot a fresh m0n0 with default config
- Fetch WAN ip and management server ip from dhcp (or login and specify
them manually).
- Request a unique name from the management server
- admin: Login to the management server and specify a unique name.
- fetch unique name and ca.crt from management server. Create key and
csr and send it to the management server.
- admin: Sign the csr on the management server.
- Pull crt and encrypted config.xml from management server.
- Decrypt config.xml, store it and reboot.
- On bootup check for new config.xml and TTL value.
- When TTL expires, check for config.xml and read TTL value.
- If unable to contact management server within 5 mins after rebooting
with a new config - revert to previous config.
- Local changes to the m0n0 is uploaded to the management server once a
day - and when requested.
- A dead m0n0? Boot up a fresh one and specify the name of the dead one
instead of a unique name.
Maybe the management server could be run on a "fat" m0n0. The entire
admin interface could be done in php and the encrypted configs and TTL
values could be served by the http server. More advanced features like
versioning and auditing would most likely require a "real" server.
Sounds nice? But is it easy to build. I don't know much about BSD (I
work mostly with Debian) and I'm not sure how much of the SSL stuff is
already in m0n0 for the certificate stuff. And all the fool proof stuff
migth not be so easy to implement as well. Maybe the certificate stuff
should be skipped and configs should be fetched with https instead.
Anyway - fetching and installing a config.xml from a http server would
be a good start :-) Suggestions how to do this are welcome. I could
ofcourse go ahead with wget, but maybe there are better alternatives
(smaller size) I'm all ears :-)
Ole Kaas


text:
There are many Avon reps going out of business and needing to sell Avon products for cheap. Why
are there so many Avon reps going out of business? Below are key reasons why Avon reps are going out of business
faster than any other network marketing, direct sale or MLM companies.
With only $10 to start selling Avon products, people who need jobs or to make money at home are
fast to sign up with Avon. Since the startup cost for Avon is so low, most people don't think it through carefully.
Most of them don't have any real plans of how to sell Avon when they sign up.
Like other network marketing companies, Avon representatives get 'points' and make more money
when they sign up new Avon consultants. Since, it costs so low to join Avon, there are so many reps and it is
difficult to monitor what each Avon rep says to potential Avon consultant. There are a lot of misrepresentations,
false information and omitted information when an Avon consultant is trying to recruit a new Avon consultant. So,
many new Avon consultants sign up under false impression of how Avon actually works. Even Avon website is not so
forthcoming with negative information and warnings. Avon consultants have to find out the hard way when they have
real problems with Avon.
A new Avon consultant gets 50% off their first 4 campaign orders (lasting 2 months) when they
spend $50 or more at Avon. After the first 4 campaigns, their discounts decrease to 25% unless they order more.
With this discount, new Avon consultants are encouraged to stock up on their Avon orders by their Avon upline or
the Avon consultant who signs them up. That's one of the biggest reasons why when Avon reps quit the Avon business,
they often have going out of business sale of massive amount of Avon products.
Avon is unique in the fact that when you place an order for each campaign, if you do it on time,
then you don't have to pay the shipping cost (but there is a handling fee) and you don't have to pay for the Avon
products either. You have two weeks to pay Avon. That gives you enough time to collect money from your customers
and pay Avon. With no money upfront, a lot of Avon representatives buy too many Avon products hoping to sell. When
they sign up, they were told that it is easy to return items to Avon but in reality it is a hassle and Avon
customer support or lack there of adds to the problem. So, many Avon representatives end up keeping the products
still hoping to sell later. This problem is the same as the big credit problem in the US - when you are not
spending real money, you spend easily.
To top it up, if you don't order any Avon products for 2 months in a row (4 campaigns) then your
Avon account is inactive and if you owe money, then your Avon account is inactive and delinquent and you will be
contacted and harassed by Avon Collection Agency. If you go on vacation and come back, you may find that your Avon
account is already inactive. To re- activate your Avon account, you have to pay the $10 fee activation fee again
unless your district manager is kind enough to waive the fee which is not often because there are so many Avon
representative in your area that most of the time the district manager don't have the personal relationship with
most of them.
With the reactivation fee and having to place an order every 2 months to remain an Avon
representative, and tons of Avon products already on hand from the previous campaigns, if you are not selling Avon
products regularly, you will end up with too many Avon products to keep your Avon rep status active. Most people
who sign up with Avon because they want to start a business that is low cost end up with tons of Avon products that
they cannot sell so they are going out of business and having an Avon going out of business sale instead.
All content on this website is Copyright © 2007-Money Making Ideas. All rights
reserved Worldwide.


text:
Here is the Sprouts Weekly Ad & Coupon Matchups (Kansas) for the weekly ad running 7/27-8/3.
A few notes about Sprouts:
-There is no official coupon policy, but practices appear to be consistent.
-No competitor coupons are accepted.
-Manufacturer's coupons are accepted, but they do not double or triple them.
-You can stack Sprouts' store coupons with manufacturer's coupons.
-They frequently send out coupons via email, so sign up at their site.
-You can also find coupons on their web site.
-Shop on "Double Ad Wednesdays!" The old ad ends on Wednesdays, but the new ad starts on Wednesdays, so there are twice as many items on sale!
Cucumbers, ea – $0.50
- $0.25/1 Cucumbers – Checkout 51 Rebate; May vary by account; Pick Your Own Offer Participating Item; May Only Choose 1 of 5
Out-of-Pocket Price: $0.50
Final Price: $0.25
Includes Checkout 51 Rebate
Grapes, Red, Seedless, per lb – $0.88
Limes, ea – $0.20
Mangos, Tropical, ea – $0.33
Onions, Yellow, per lb – $0.50
Potatoes, Russet, per lb – $0.50
Never miss another hot coupon, deal or freebie again! "Like" Couponaholic .NET on Facebook, Follow us on Pinterest, Follow us on Twitter, Follow us on Instagram or Subscribe to our Daily Email Newsletter!


text:
When Eric Hughes began designing a weekend house in Bridgehampton, New York, for actress Sarah Jessica Parker, he knew he wanted to create a place that could handle sandy feet, damp bathing suits, and lots of people. He was a California boy who grew up in Newport Beach, so he knew all about beachy weekend life. What he was not, surprisingly, was an interior designer. A recent refugee from Hollywood, he had given up his job as vice president of production at Universal Pictures, where he had shepherded hit movies like Bride of Chucky and Bring It On. So despite the fact that he and Parker had been friends for years, he was a bit nervous about the undertaking.
But Parker, like all his friends, knew that Hughes had exquisite taste. He had informally helped her decorate a New York apartment, but nonetheless, "I was a little scared," he admits. "This wasn't just about putting up some paint and finding a toile sofa. But I think she felt comfortable knowing I wouldn't decorate it to the nines in a movie-star sort of way."
Just a bike ride from the beach, the house is one of the few places where Parker and her husband, Matthew Broderick, can decompress with their nearly three-year-old son, James Wilke. It's a respite from crazy shooting schedules and Broadway rehearsals. "For me and Matthew, it was important that the house not be too precious," says Parker. "We didn't want anything stuffy or showy. We wanted color and light, and comfort, comfort, comfort." It's a place where they can play Ping-Pong and entertain friends and Parker's large family (she is one of eight children). In fact, the couple has come to love the area so much, they've just purchased another beach cottage, nestled in the dunes of nearby Amagansett.
Finding this first house hadn't been easy, however. For years, real-estate agents showed Parker places that were too fancy and lacked the local character that had been drawing her to Long Island as a renter for more than a decade. Then, by accident, she spotted a photo of a Victorian-era house that looked just right in a Realtor's window. Within minutes she was walking through a cedar-sided, 19th-century farmhouse flooded with natural light and graced with high ceilings. She made an offer that afternoon.
Parker and Hughes immediately agreed to add on an expansive front porch, creating an outdoor living space that could accommodate a porch swing and up to 20 people for meals. Inside, Hughes widened the doorways, opening up the living spaces and giving the house a more generous flow. He created a clean, crisp backdrop by painting all the rooms with Benjamin Moore Super White. "I wanted to let the architecture speak for itself," he explains, "and then fill the rooms with punches of color and simple pieces with lots of character." At Parker's request, the kitchen cabinetry is a glossy tulip red.
Hughes took inspiration from one of his favorite designers, Billy Baldwin. With clients including Cole Porter and Kitty and Gilbert Miller, Baldwin had the kind of New York theater pedigree that made sense for two actors' lives, so Hughes adapted Baldwin's cues to the beach. He had a classic sofa upholstered in the designer's favorite brown denim. He used Baldwin's iconic spatter print for the window seat in the living room. He placed a linen-covered Karl Springer console in the couple's bedroom and designed a dining room table inspired by the one in the Jackson Pollock and Lee Krasner house in nearby East Hampton. But Hughes wasn't afraid to mix in low with the high style. He picked up several pieces at local tag sales and thrift stores and had IKEA Parsons tables painted to look like lacquer.
Best of all, Hughes added personal touches. "I kept thinking, This is the house Carrie built," he recalls, referring to Parker's character on Sex and the City. So he called the show's production designer and asked for an architectural rendering of Carrie's apartment to mount on the sliding panel that hides the built-in television in the master bedroom. "It was a total surprise," Parker says. "At first I thought, Oh, people are going to think I'm an absolute narcissist. But now that the show is over, I'm so glad he did it, because I'm so sentimental about that time."
The dining room has become her favorite place. "When it's filled with people, they become pieces of art that make it even more beautiful," she says of the room where she entertains friends such as Kate Winslet and Sam Mendes, Marci Klein and her husband, Scott Murphy, as well as Marc Shaiman and Scott Wittman. Now they're all Hughes's clients, too. "Sarah Jessica launched my career without my even knowing it," he says. "She saw in me the ability to do this when I didn't see it in myself. That's the real gift."
But wait, there's more ...
For a look at Sarah Jessica Parker's personal style, click here.
Candace Bushnell, the author of the novel that inspired both the TV series and the movies, has an apartment as chic as anything in the new film. To check it out, click here.
To see inspiring interiors from Sex and the City 2, click here.


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PASADENA - A woman walking on the sidewalk was robbed of an undisclosed amount of money Sunday by a driver wielding a knife.
Pasadena Police Lt. Tom Delgado said the robbery took place on Oak Knoll Avenue at 6 p.m. Sunday.
A 44-year-old Huntington Park woman was walking north towards a hotel when a white sedan pulled up alongside her, Delgado said.
He said a man got out of the driver side and put a knife towards the woman's neck. The suspect went through the victim's purse, took a large sum then drove off, Delgado added.
The suspect was described as a man, 20 to 26.


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Not exactly a confidence builder . . .
Either it's a textbook case of CYA or a lack of confidence in the product, but Microsoft and its PC partners are going to allow Windows 7 users to downgrade not just to Windows Vista, but also to Windows XP, (the latter — definitely go with the latter) if they so desire.
So says Mary Jo Foley's blog on ZD Net yesterday.
Let me see if I understand this: I want to buy a computer with the latest Windows OS on it (when, of course, it's out) and if it doesn't, um, "work," I can always go back to an earlier OS? Am I supposed to be confident in Microsoft's ability to deliver when they have these provisions?
Isn't this like being handed a parachute as you get on an airliner, just in case the plane doesn't, um, "work"?
Fear not, according to the blog: TechARP — the site that broke the still-unconfirmed-but-likely-true report that Microsoft is planning to offer PC buyers a free upgrade from Vista to Windows 7 if they purchase new systems starting this summer — is now reporting that users who downgrade to XP also will be eligible for free Win 7 upgrades via the Windows 7 Upgrade Option program.
Oh, rapture!
Or another solution on your new machine is to run GNU/Linux, but that's a whole different story.
(Fedora ambassador Larry Cafiero runs HeliOS Solutions West/Redwood Digital Research in Felton, California, and is an associate member of the Free Software Foundation.)
Coming up in 2009
A lot has been written so far about what to expect next year — some valid, some not.
But has that ever stopped me from joining the year-end pile-on? Perish the thought.
So here are 10 things to expect in 2009.
Or not.
Remember, objects may be closer than they appear, and your mileage may vary.
10. 2009 will be the year of Linux. But so will 2010, as well as 2011 and 2012. In fact, by 2013, the last pair of eyes on the planet will finally glaze over when a Linux writer proclaims the following year to be the year of Linux, and the more thoughtful pundits will just know that it's now understood that the next year will be our year, for whatever reason, and they'll write about something a tad more significant.
9. Fedora 11 will outshine Fedora 10. As hard as it may be to believe — and after a month I still can't find a flaw with Fedora 10 — Fedora 11 will be an encore performance of what can best be described as a rock-solid distro, even for machines that go back a few years (in my case, a Dell 5000 Inspiron laptop and a Dell Optiplex desktop). Sadly, people will continue to be under the mistaken impression that Fedora is too "cutting edge" for anyone other than the most experienced superuser who might be too lazy to negotiate the Gentoo labyrinth (yes, that's a gauntlet thrown at the feet of my Fedora colleagues to work next year on dispelling that stupid myth . . . ).
8. The UFC pits Linus Torvalds and Richard Stallman against each other in a feature bout. What happens though is not one of those ridiculous near-death experiences for some poor troglodyte who normally gets suckered into the ring, but an epiphany for the entire FOSS community: Stallman and Torvalds meet at mid-ring and circle each other warily. Stallman opens the bout by saying maybe he was a little hasty in demanding GNU be stuck on the front of Linux, but Torvalds comes back with openly welcoming the option of joining the two names. Barriers between open source and free software dissolve. GNOME and KDE advocates embrace in a worldwide "kumbaya." Planets align. Then I wake up.
7. Zenwalk increases the pace of its development. It becomes Zenrun, and in finding that they can add and release improvements to an already above-average distro at an even faster pace, they rename it Zenfly in 2010.
6. Lindependence comes to Redmond, Wash. The hall is rented, the fliers posted, and the riot police stand at the ready, but they remain wary since they don't want to repeat the WTO fiasco in Seattle a decade ago. Nevertheless, yours truly — in a tribute to another overweight bald guy in the digital industry — opens the event with an insane onstage monkey dance that also brings him to within inches of a heart attack while Ken Starks unsuccessfully diverts the press' attention. The Digital Tipping Point's Christian Einfeldt, however, gets it all on video. Meanwhile, Debian, Fedora, Mandriva, OpenSUSE and Ubuntu reps — along with others who choose to join Lindependence in 2009 — hand out live CDs and demonstrate their distros. Yes, that's Red Hat's "Truth Happens" video (click here for Quick Time fans) looping in the background all the while.
5. Mandriva gets in touch with its feminine side. This distro renames itself Womandriva and becomes a more reasonable, nurturing distro, finally dropping the adolescent Mandrake zeitgeist from its early days. The distro's leadership also realizes what a huge mistake it was to let Adam Williamson go and rectifies that situation, adding a huge bonus to his salary.
4. The Madagascar Penguins join Tux as the Linux mascots. Skipper, Kowalski, Rico and the Private make Tux one of their own in their commando unit. Incidentally — this is true (you can look it up) — on the Madagascar DVD, the penguins provide their own commentary on their scenes. When Private is struggling to operate a computer while taking over the ship, Skipper comments, "What are you doing up there, playing Tetris? You told me you knew Linux, Private!" Just smile and wave, boys, smile and wave.
3. Windows 7 will be worse than Vista, as hard as that may be to believe. This development will result in yet another $30 million Microsoft ad campaign diverting attention from this latest offering. Realizing they picked the wrong Seinfeld character in their first campaign, the ad agency casts Jason Alexander with Bill Gates, making Gates look like the "cool one" in comparison.
2. Everyone joins the Ubuntu family. In an effort not to confuse brand new GNU/Linux users with the daunting tasks of trying to wrap their minds around 350 different distributions, distros give themselves new names: Fedbuntu, Debuntu, openBUNTU, Sabayuntu, Damn Small Buntu, CentBuntu, Dreambuntu, Slackbuntu, Pupbuntu, Mepbuntu, gNewBuntu, among others. Solbuntis and OpenSolbuntis also join the ranks.
1. Linux Foundation's "I'm Linux" video contest's winning entry grabs an Oscar. After Apple's "I'm a Mac" ad campaign, and Microsoft following with a painfully original "I'm a PC" theme, the Linux Foundation garners thousands of entries in its "I'm Linux" video contest. The Motion Picture Academy of Arts and Sciences nominates the winner, which ends up awing those judging and the statuette for Best Short Film goes to the winner.
There are other developments, like the conflicts that the new OpenBSD Christian Edition causes, which may be addressed in a later blog.
Have a happy and prosperous new year.
(Fedora ambassador Larry Cafiero runs HeliOS Solutions West in Felton, California, and is an associate member of the Free Software Foundation.)
The doctor is in
[If you think I don't write enough here, I have a good excuse: I've been blogging at the Lindependence 2008 Felton Diary here. I'll get here when I can.]
I've mentioned this before in blogs, but it bears repeating: For years, I have hoped to be a thorn in Dell's side, the pebble in ol' Mike's Gucci loafers about dependability and quality of the machines that came from the Dallas conglomerate.
So when Dell decided to see the light and offer Ubuntu as an OS option, I asked for a nice bearnaise sauce to go with the crow I dutifully, and happily, ate.
Fast forward to late last week, when I helped my commercial neighbor Ron at Long Cabinet Company with the memory on his Dell laptop, it was one of those opportunities to show that what we do, hardware- and software-wise, is not exactly some sort of black magic. In addition, it showed Ron how Dell and Microsoft are working together to make Vista unusable.
Ron's wife had bought Ron a gig of memory and he asked me to install it. Thanks to Dell — more crow, please — adding memory on the laptops is merely a matter of just removing a panel, popping it in, and putting the panel back on; 60 seconds, tops.
This was the easy part: The harder part, and the part I couldn't explain other than to say that it's a huge mistake by both Dell and Microsoft, was trying to justify to Ron how Dell could sell a machine that they said was Vista-ready with "only" 512MB of RAM and how Microsoft could make an "new and improved" operating system that . . . well . . . oh, never mind. In the end, both Dell and Microsoft took a back seat to an explanation of how GNU/Linux doesn't have the same problems that Ron was experiencing.
One more convert in the making? One can only hope.
(Larry Cafiero runs HeliOS Solutions West in Felton, California, and is an associate member of the Free Software Foundation.)
News, blues and reviews
For some reason, I can't recall whether being a student was an incredible chore while I was doing it back in the disco era, or whether things have changed — or I have changed — to make modern-day matriculation a hell of a lot of work.
I would put my money on the fact that I may have lost an intellectual step or two over time.
But studies in general — and a shell script project that is both intriguing and harrowing — have kept me from the hallowed halls of this blog until now; not to mention life in general as well.
But there have been some developments of note over the past several weeks that deserve mention, like
Two Koreas, One Distro: According to this Information Week article, folks in South Korea speak of folks in North Korea more as lost brothers than bitter enemies. Over the years the two have made various rapprochements, but now it looks like North and South are teaming up on a whole new kind of joint project: a Korean-language GNU/Linux distribution called Hana Linux. And the GNU shall lie down with the penguin . . .
Pirates have standards, too: So maybe it's not just paying customers who aren't happy with Vista — even pirates are shunning it, according to this blog item. Microsoft gleefully reported Tuesday that the rate of piracy of Vista compared to XP is about half — the mandarins in Redmond claim this is because of their anti-piracy features in Vista — the one that accusses paying customers of being thieves when it doesn't work quite right — but some of us know better. Pirates have standards, too, and Vis-duh just plain blows on a variety of levels.
[In a related item, 90 percent — that's 9 out of 10, for those of you keeping score at home — of IT professionals would rather eat plutonium than foist Vista on their companies. Okay, so I overstate it, but 90 percent of IT professionals have concerns about Vista that are strong enough to shun it, and more are migrating away from Winblows. Don't believe me? Here's the Slashdot article].
Distros I like: The more I use the Fluxbox desktop environment, the more I like it on whatever distro I'm using (oh, and my distro polygamous ways have been documented here and elsewhere — there's a 12-step program for it somewhere, no doubt) . I have been using Fluxbuntu on a Pentium II and it works pretty well. But more recently, I salvaged a Dell Inspiron 5000e laptop from certain doom at the hands of my employers and have given it a new home and a new distro that I particularly like: Mepis AntiX 7.0, code named Lysistrata (the name enough — from the play of the same name by Aristophanes — is reason to give the distro some attention), which absolutely flies on this machine.
Example: 48 seconds to boot. That's not a typo — 48 seconds. I've never had a computer boot that fast.
More to follow. In the words of the renowned Helios, "All righty then."
(Larry Cafiero, editor/publisher of Open Source and Free Software Reporter, is an associate member of the Free Software Foundation.)
It's official
It's official:
Steve Ballmer is an world class, Olympic-caliber asshat: Most of us already knew this, of course. But if you're the CEO of what's supposed to be the largest software company on this planet, if not the galaxy, shouldn't you be more concerned about how your newly-released-but-in-the-toilet Vista operating system is (under)performing rather than raising, once again, the laughable specter of suing for patent infringements? Not Steve. Uh-uh. He'd rather talk about how Google reads your mail and how that McCarthyist list of 235 patent violations — which we haven't seen yet, incidentally — are ready for prosecution. Have you no shame, Mr. Ballmer?
Ken Starks, a.k.a. Helios, is a hero: Most of us already knew this, of course. Apparently, it's official now, as Carla Schroeder writes here in this LXer.com article praising Ken, whom I am proud to call a brother-in-arms in the FOSS wars, and with whom I am proud to be a partner in flying the HeliOS Solutions flag in the Wild West.
I'm a flake: Most of you already know that, of course (hey, wait a minute . . .). You would think that as editor and publisher of Open Source and Free Software Reporter, I would take the time to meet with OSFSR New Zealand correspondent Penny Leach after she flew all the way to San Francisco — for her work at Catalyst, that is, not to see me (an aside: the days when women would fly great distances to see me are, sadly, long gone — and I'm at peace with that) — but noooOOOooooo. I completely blanked the dates that she was visiting to promote Mahara and Moodle (very cool, check them out), even after recording it on my page at jott.com. My sincerest apologies, Penny. Next time, I promise.
Ubuntu makes it to the NBA, sort of: Tom Krazit, of C|Net, writes here that the Boston Celtics have adopted "ubuntu" as their rallying cry this season. A bunch of 7-foot GNU/Linux users? Not quite. Celtics coach Doc Rivers apparently chose that word "ubuntu" after learning of it while reading about Archbishop Desmond Tutu. For those of you keeping score at home, "ubuntu" has its roots in the Bantu languages of southern Africa as meaning "a philosophy of life that promotes the greater good rather than individual success." Of course, with the upper case U, Ubuntu is a damn good GNU/Linux distro, and a slam-dunk for anyone using GNU/Linux.
Bonnie Raitt was born to sing 'Angel From Montgomery': No, this has nothing to do with FOSS, but there is no one more more suited to sing John Prine's "Angel From Montgomery" than Bonnie Raitt. Period. Don't take my word for it — see it on YouTube here, and hear a duet with Prine here (note, the latter is not a performance video, but a montage of photos with the duet in the background).
The phone is silent . . . for now: 831-335-7303 is the number for HeliOS Solutions West and for Tux Project in beautiful downtown Felton. When you're here, don't forget to grab a cup of joe at the White Raven.
(Larry Cafiero, editor/publisher of Open Source Reporter, is an associate member of the Free Software Foundation.)
Ground control to Major Bill
If you're a Vista user, the next two words are for you: "Uh oh."
If you can get your Vis-duh back up and running — the big "if" in the next couple of days — chances are Microsoft will think you're a criminal, or at least that's what your pop-up screen will tell you.
Windows Genuine Advantage has gone down, suffering a worldwide outage causing problems galore, according to this article in Ars Technica. Not only is it down, but if you try to reinstall Vista or WGA, apparently you get a pop up saying that you're a crook. Don't believe me? Go to Microsoft's Windows Vista Validation Issues forum.
Probably the best thread of the bunch starts off with "Everybody just calm down," and you can see how, in the ethereal environment of the World Wide Web, Vista users are grabbing the pitchforks and torches and going after a guy named JohninTN, whose answer to this, um, problem is for those who spent their hard-earned money on the latest Windows operating system to "go out in the sun" and get away from their computer for awhile.
Whoops. Wrong answer.
Let's assume for a moment that this is not the official Microsoft position on this, but some techs, according to the Ars Technica story, are telling people that WGA may not be working until Tuesday (Aug. 28).
Maybe going outside is the right answer after all.
Then, after enjoying the day, return to your desk, and if you're able to use the Internet on your Vista box, you might want to go visit the Ubuntu web site and download the Live CD (or, in the alternative, ask them to send you one. They'll do it, too).
P.S.: As a footnote, this has happened before . . . .
(Larry Cafiero, editor/publisher of Open Source Reporter, is an associate member of the Free Software Foundation.)
Clowns to the left of me, jokers to the right . . . (stuck in the middle with GNU)
The groundswell of FUD lately arguably can be a cause for concern in GNU/Linux circles. Interestingly, one of the tell-tale signs whether that Web-based story you're reading has all the hallmarks of propaganda, at the least, and more than likely is outright FUD, at the worst, is whether the site is sponsored by your friendly neighborhood Redmond death star.
So while clowns like Kevin Carmony keeps blogging about how he's "improving" Linux with the help of Microsoft (waiting for the laughter to die down), more FUD makes its way to the ethereal Internet thanks to a new joker by the name of Alexander Wolfe.
Wolfe, whose "Wolfe's Den" appears as the "Chips, Vista and Advanced Technology" blog on the Information Week Web site (did you notice the word Vista in there?), wrote in the latest installment on his blog that — horrors! — there are too many Linux distros to choose from.
He makes the self-serving pithy observation that, since there are so many distros, that "Linux is a forking mess." As if we should only have one or two choices in computing, rather than the 300 choices of GNU/Linux distros (and those are the active ones) offer.
That's because freedom — whether in computing or in the rest of everyday life — is about choice, and it's unfortunate that Wolfe doesn't get it. But then, most corporate lackeys beholden to the party line of their corporate masters don't; or if they do, they wallow in hypocrisy while ignoring the truth.
Wolfe also operates under the false assumption that all GNU/Linux distros are all competing against one another for the attention of the average user. Wrong again, Alex: Needless to say the distros that are business oriented — your Red Hats and Novells — are going head to head to slice up the corporate IT pie. But distros like Puppy and Slackintosh competing for IT departments' attention? Sorry, chump, even the greenest of GNU/Linux newbies realizes that this isn't true. Pity you don't — or refuse to — get it, Alex.
Also, the argument of distro-as-religion (Wolfe quotes an outdated story on Distrowatch.com) gets beaten to a pulp. That may have been the case at one time, but Alex seems to have missed the trend toward "distro polygamy" that permeates the current GNU/Linux zeitgeist. To wit: This blog is being written on a iMac running Xubuntu 7.04; next to it is a PowerMac G3 running Yellow Dog 3.0; across the room are two Dell Optiplex GXa machines — one running Linux Mint 3.0 Xfce and the other awaiting its install of Mepis AntiX (thank you, anticapitalista). So some may be beholden to one distro; many of us aren't.
When you read something about how too many distros is a bad thing, especially when it's written by a Vista columnist, you can be sure that propaganda is at the forefront. Please read it accordingly.
(Larry Cafiero, editor/publisher of Open Source Reporter, is an associate member of the Free Software Foundation.)