EXPENDITURE STRATEGY - MORGAN STANLEY

1. Morgan Stanley wrote down its subprime-infected mortgage holdings by $9.4 billion.
2. It ousted Co-President Zoe Cruz, who had overseen the fixed-income unit responsible for the mortgage trades.
3. It quantified damages, quantified remaining exposure and assigned accountability.
4. It will eliminate 900 jobs, mostly in the mortgage units.

[Click here for full story at: BLOOMBERG.COM]

EXPENDITURE STRATEGY - BRISTOL-MYERS SQUIBB

1. Bristol-Myers Squibb Co. will eliminate about 4,300 or 10 percent of jobs over three years and close half its plants to trim $1.5 billion in costs.
2. It may seek buyers for its medical imaging, wound care and baby formula units. Mead Johnson Nutritionals, the infant-formula unit could be worth about $10 billion, while ConvaTec, the wound-care unit, may fetch $3.3 billion
3. It plans to reduce the number of brands from its older product lines by 60 percent by 2011.

[Click here for full story at: BLOOMBERG.COM]

EXPENDITURE STRATEGY - HEWLETT-PACKARD

1. Hewlett-Packard Co., the biggest personal-computer maker, cut 15,000 jobs and closed offices since 2005
2. It will stop making digital cameras and seek an outside manufacturer.
3. It will buy back as much as $8 billion in shares.

[Click here for full story at: BLOOMBERG.COM]

EXPENDITURE STRATEGY - ANN TAYLOR STORES

1. AnnTaylor Stores Corp., the clothing retailer geared toward women 25 to 55, reduced inventory to counter slowing sales.
2. It reduced selling, general and administrative expenses as a percentage of sales.
3. It spent $15 million to buy back 500,000 shares.

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EXPENDITURE STRATEGY - STARBUCKS

1. Starbucks will slow the opening of new U.S. stores over the next year by less than 10%
2. It will introduce fewer new beverages.
[It is under a massive assault from McDonald's, Dunkin' Donuts, and seemingly every other retailer with a brew pot in the back.]

[Click here for full story at: BUSINESSWEEK.COM]

EXPENDITURE STRATEGY - KRAFT

1. Kraft, the food giant, is shedding its Post cereals biz in a complex $2.9 billion transaction with Ralcorp to focus on other promising, growing brands.
2. It has structured the deal in a way that minimizes taxes, making it the equivalent of a $4 billion cash deal.
3. In the all-stock deal, Kraft shareholders will get Ralcorp shares and end up owning 54% of the new company.
[1. Kraft had already exited brands like Milk-Bone, Cream of Wheat and Minute Rice in a bid for reliable growth.
2. It is delivering on the restructuring promised to shareholders earlier this year.]

[Click here for full story at: BUSINESSWEEK.COM]

EXPENDITURE STRATEGY - PROMISE CO

Promise Co., Japan's largest consumer finance company, plans 15 billion yen ($135 million) of cost cuts in the next two years after acquiring rival Sanyo Shinpan Finance Co., by:
a) Uniting the technology platforms of Promise and Sanyo Shinpan
b) Reorganizing their marketing channels around September next year, and
c) Job cuts
It is resorting to cost cuts as law changes in Japan force Promise and its competitors to reduce the interest they charge borrowers. It will cap interest at 17.8 percent, down from 25.6 percent, effective next month. The planned cost cuts represent about 4 percent of the company's planned sales expenses for this fiscal year.

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EXPENDITURE STRATEGY - DELPHI CORP

Delphi Corp., the largest U.S. auto- parts maker, has planned to change the payouts to creditors under its new Chapter 11 reorganization to plan exit from bankruptcy, giving creditors more securities instead of cash, because it wasn't able to obtain an exit loan as large as it had originally intended.

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EXPENDITURE STRATEGY - NOMURA HOLDINGS

Nomura Holdings, Japan's largest securities firm, last month reported its first loss in more than four years after the value of its U.S. mortgage investments plunged, forcing the company to:
a) close some operations,
b) cut staff and
c) shut its Chicago office.

[Click here for full story at: BLOOMBERG.COM]

EXPENDITURE STRATEGY - UNILEVER

1. Unilever, the world's second-largest consumer-products company, is selling assets with revenue of about 2 billion euros ($2.93 billion) to focus on brands known worldwide.
2. It plans to cut as many as 20,000 jobs, or 11 percent of its workforce, to spur growth and improve profitability.

[Click here for full story at: BLOOMBERG.COM]

EXPENDITURE STRATEGY - ACTELION LTD

Actelion Ltd., Switzerland's largest biotechnology company, which moved an experimental drug Pivlaz aimed at reducing blood vessel spasms into late-stage clinical testing will make a 15 million Swiss franc ($13.3 million) milestone payment to former shareholders of the medicine's developer, Axovan, which Actelion acquired in 2003.

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EXPENDITURE STRATEGY - LARGE US BANKS

1. Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co., the three largest U.S. banks, reached an agreement on the structure of an $80 billion fund, known as the master liquidity enhancement conduit, or M-LEC, to help revive the market for short-term debt
2. The fund would buy some of the $320 billion in assets held by so-called structured-investment vehicles, known as SIVs.
3. The banks are pushing to have the fund in place by yearend because SIVs are unable to get short-term credit to finance their higher-yielding investments as losses on subprime mortgages drive investors from all but the safest government debt.
4. Citigroup took action on Nov. 5 to shore up its SIVs. The New York-based bank provided $7.6 billion of emergency financing to the seven SIVs it runs after they were unable to repay maturing debt.


[Structured-Investment Vehicles:
1. SIVs, pioneered by Citigroup in the 1980s, borrow in the short-term commercial paper market to invest in longer-dated securities ranging from mortgage bonds to bank debt.
2. SIV assets have dwindled by at least $75 billion since July as the companies struggled to raise short-term debt.]

[Click here for full story at: BLOOMBERG.COM]

EXPENDITURE STRATEGY - EASTMAN KODAK

1. Eastman Kodak Co., the photography company reorganizing itself as more consumers opt for digital cameras, plans to sell its stake in China's biggest maker of photographic film, Lucky Film Co., ending a four-year partnership.
2. It is turning to digital products as demand for film wanes.
3. It has spent $3.22 billion since 2004 cutting jobs and closing factories as part of a four-year reorganization plan.

[Kodak failed to realize how quickly Chinese consumers would adopt digital cameras.
Many Chinese consumers leapfrogged film altogether and the first camera they ever bought was a digital one.]

[Click here for full story at: BLOOMBERG.COM]

EXPENDITURE STRATEGY - JESSOPS

Photographic retailer Jessops had pre-tax losses of £25.2m for the six months to 1 April.

So it plans to save £15m by:
a) closing 81 and relocating 3 of its High Street stores and
b) cutting 550 jobs.

Some shutters down + some lay offs = some expenditure reprieve

[Click here for full story at: BBCNEWS.COM]

EXPENDITURE STRATEGY - RELIANCE COMMUNICATIONS

Reliance Communications Ltd., India's second-biggest mobile-phone company, will pay less interest on a $1 billion loan after its profit more than doubled to a record. It will pay about half what it pays on $500 million borrowed last year

[Banks are charging less interest because the company's profitability is improving its ability to pay debt !!
(Banks will be paid additional fees, including underwriting income, for participating in the loan).]

It pays to be profitable!

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EXPENDITURE STRATEGY - ACTIONS SEMICONDUCTOR

In March 2006, the U.S. International Trade Commission said Actions Semiconductor had infringed on two SigmaTel patents for an audio-processing chip and imposed a 29-cent tariff on each chip when sold in the U.S.

1. Actions Semiconductor Co., a Chinese maker of chips for portable electronics, settled all patent litigation with SigmaTel Inc., a maker of mixed-signal multimedia semiconductors, and will begin importing its products to the U.S.
2. The companies agreed to a cross- licensing deal, which will allow Actions' products to be imported to the U.S. without restrictions.

Avoid stepping on others toes. It is expensive.

[Click here for full story at: BLOOMBERG.COM]

EXPENDITURE STRATEGY - HOME DEPOT

1. Home Depot Inc., the world's largest home-improvement retailer, is reversing previous management plans to expand HD Supply and agreed to sell its contractor-supplies unit to three buyout firms for $10.3 billion amid the most severe housing recession in 16 years
2. It may purchase a record $22.5 billion or 30 percent of its stock to reverse two years of declining shares.
3. It will finance the buyback with proceeds from the sale, existing cash and $12 billion of bonds.
4. It increased the number of directors needed to approve executive compensation and agreed to disclose some political donations for the first time.

Should businesses have special task forces for continuously paring down the latest unproductive expenses not always immediately visible to pre-occupied line managers?

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EXPENDITURE STRATEGY - X5 RETAIL

1. X5 Retail Group NV, Russia's largest supermarket chain, plans to sell 9 billion rubles ($345 million) of bonds next month partly to refinance debt to simplify borrowings structure, decrease costs of debt servicing, increase brand loyalty among professional investors.
2. It will buy back 4.5 billion rubles of bonds sold by a unit of its Pyaterochka chain, and repurchase 1.5 billion rubles of bonds in ZAO Trade House Perekrestok.
3. It will offer to buy back the bonds within three years at their nominal value

Refinancing debt can reduce expenses especially if you have combed through the fine print

[Click here for full story at: BLOOMBERG.COM]

EXPENDITURE STRATEGY - CADBURY SCHWEPPES

1. Cadbury Schweppes Plc, the world's biggest candy company, plans to cut 7,500 jobs and sell the U.S. drinks unit that makes Dr Pepper and 7-Up to shore up profit and raise funds for expansion. The job cuts will help increase profit margins from about 10 percent to the “mid teens” by 2011.
2. It may auction the division, pushing the price above the rumored 8 billion pounds
3. Its sale of the drinks unit would result in a return of capital to shareholders.
4. It plans to close about 15 percent of its confectionery factories.
5. It sold its European soft-drinks division to buyout firms Blackstone and Lion Capital LLP last year for $2.2 billion.
6. It will split its Europe, Middle East and Africa unit and move out of its headquarters in London's Mayfair district to improve profitability.
7. It set aside money to pay an impairment charge following an accounting scandal at its Nigerian unit.
8. It will spend about £450m in a one-off charge for the reorganization. It will rename itself simply Cadbury after the sale of the drinks unit.

If you take care of the pennies the pounds will take care of themselves?

[Click here for full story at: BLOOMBERG.COM]

EXPENDITURE STRATEGY - KARSTADTQUELLE

1. KarstadtQuelle AG has sold property to pay down debt
2. It has disposed of less profitable stores
3. It is spinning off the Neckermann mail-order unit. 40 and 50 percent of the unit will be sold to financial investors in the second half.

Expenses are optimized when costly debt is paid off unprofitable businesses disposed

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