GLG News by US GAAP Healthcare Specialists
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Paul MillerProfessorREGENTS OF THE UNIVERSITY OF COLORADO
Truth is truth, whether it's welcome news or not
July 7, 2009
The Fair Value Deadbeat Debate Returns | www.cfo.com
Financial reporting works best, and maybe only, when it is complete and unbiased. If it is biased to manage the message, it becomes a method of distributing propaganda and all credibility is lost.The economics of gain occurrence is unarguable. If management can retire a debt for a smaller amount than the carrying value, then there are fewer liabilities and more equity. More equity means income has occurred. There is no rationality behind efforts to suppress truthful news just because you don't like it. Let's all hope the standard setters are not swayed by "visceral" impulses into the direction of keeping useful information out of financial statements. The inevitable consequence is greater risk and discounted share and bond prices, simply because users don't have access to the truth. That does no one any good.
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Hugh BurnsAffiliate FacultyCOLORADO CHRISTIAN UNIVERSITY
Rio Tinto Stock Price Woes Tied to Debt-Financed Acquisition of Alcan
December 8, 2008
The Going Gets Rougher: Rio Tinto Crashes to Six Year Lows | www.moneyweb.co.za
High leverage and mining companies are not good bedfellows, and Rio Tinto’s dramatic decline in its stock price is a testament to this. During the bull markets in mineral commodity prices over the last few years, most mining companies used at least some of the cash surplus generated from higher prices and increased cash flows from operations to reduce debt. Rio Tinto acquired Alcan in 2007 primarily with the proceeds from a $40 billion syndicated acquisition facility creating what is for a mining company a highly- leveraged balance sheet (gearing ratio of 60+%). $33 billion of this facility was still outstanding at June 30, 2008 when the Company reported its half-year results for 2008, and management stated that the debt would be paid off in short order through the disposition of some of Alcan’s acquired subsidiaries and through cash flows from operations.
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Hugh BurnsAffiliate FacultyCOLORADO CHRISTIAN UNIVERSITY
Barrick Gold’s M&A Strategy Makes Sense
December 5, 2008
Barrick Gold looking at M&A, sees cheap assets | www.reuters.com
The Mining Industry experienced a flurry of consolidation during the last several years of high mineral commodity prices as companies were flush with cash and credit was easy to come by. However, this consolidation fever ignored the age old adage “buy low and sell high.” Now that mineral commodity markets are in a major slump, many acquisition targets can be obtained at bargain prices. Barrick Gold’s (ABX: TO and NYSE) strategy to cautiously pursue acquisitions now makes sense in the long run, especially since the Company enters into this downturn with a strong balance sheet.
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Hugh BurnsAffiliate FacultyCOLORADO CHRISTIAN UNIVERSITY
November 14, 2008
Reduced production output, postponed or cancelled capital and exploration expenditures, closure of marginal mine sites and impairment charges are common scenarios in mining companies during bear markets in mineral commodities. The recent announcement by Freeport-McMoran (NYSE:FCX) that it intends to reduce production at its Henderson primary molybdenum mine and to curtain construction to restart its Climax primary molybdenum mine are symptomatic of the recent dramatic decline in molybdenum prices. Stakeholders would be wise to expect additional similar developments among various players across the Mining Industry as the worldwide economic slowdown is pushing down mineral commodity prices.
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Richard BalandSole ProprietorRichard Baland, CPA
Winners and losers in Healthcare IT
October 14, 2008
Stark Offers Bill to Hasten e-record Adoption | modernhealthcare.com
This will soon be the best time in history to be selling Healthcare IT software and services. More money will be spent in the next three years than ever before. It may not be the best time for the staff at many hospitals. The staff are woefully unprepared for a quantum leap in Healthcare Technology.
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Paul MillerProfessorREGENTS OF THE UNIVERSITY OF COLORADO
October 13, 2008
Alls Fair: The Crisis and Fair-Value Accounting | www.cfo.com
undefined undefined Listen to the message and don’t shoot the messenger if you think it’s bad news. And don’t endorse public policies based on deceptive reporting. undefined undefined
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Paul MillerProfessorREGENTS OF THE UNIVERSITY OF COLORADO
Is it bad reporting or does naivete reign at the highest levels?
August 7, 2008
Mulling the Fair Value, Historic Cost Choice | www.cfo.com
Maybe it's just me, but these quotes from Herz and Pozen are off-base. When they suggest there could be a pure historical cost system, they are talking about something that doesn't exist and hasn't existed in a 100 years, if even then. I have to believe that Herz was misquoted or misinterpreted; I can believe that Pozen would misunderstand. Nothing will come out of this. There will be no turning back to more costs. There will be a continuing progression toward fair value accounting for the simple reason that it produces the information that users want and that society needs them to have.undefined undefined
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Richard BalandSole ProprietorRichard Baland, CPA
What can Hospitals do about their Spending and Borrowing in 2008?
April 21, 2008
University Hospitals in Cleveland makes aggressive refinancing move | blog.cleveland.com
Increasing interest rates and debt service, a Decrease in available cash, a Migration to more fixed rate borrowing and appeals to state governments for assistance, a delay in physical plant additions/upgrades
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Paul MillerProfessorREGENTS OF THE UNIVERSITY OF COLORADO
Accounting for subprime investments: Denial is not a river in Egypt
April 7, 2008
SEC fails to douse debate over ‘fair value’ | www.ft.com
This article reveals the bizarre mindset of managers who (a) want to take huge risks for a shot at high returns, (b) don’t mind reporting results when they succeed, but (c) don’t want to report their losses. To put it another way, they want to invest in risky securities but report income from their ventures as if they put money into certificates of deposit. There is no legitimacy in twisting the accounting to cover up the results, and no reason to blame the chief accountant or FASB for the problem, or to expect the regulators to take them off the hook by allowing the losses to be hidden.
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Richard BalandSole ProprietorRichard Baland, CPA
There will be significant growth in Healthcare Real Estate in the next ten years. But in what areas?
April 4, 2008
Aging Baby Boomers Will Drive Demand for Healthcare Properties Over Next Decade, Grubb & Ellis Report Reveals | www.bio-medicine.org
For one reason, this industry has outperformed the commercial average for the most recent eight years. Secondly, demographics are driving medical services. More of the population is aging. People are living longer. And Medical technology is improving at a rate that provides new and better healthcare services. Thirdly, there is never a down year for Healthcare space. Whether there is a recession or not, the demand for Healthcare services continues.
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