Chalillo Dam

FORTIS INC. AND THE CHALILLO DAM Professor Robert Sexty wrote this case solely to provide material for class discussion. The author does not intend to illustrate either effective or ineffective handling of a managerial situation. The author may have disguised certain names and other identifying information to protect confidentiality. Richard Ivey School of Business Foundation prohibits any form of reproduction, storage or transmission without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization.To order copies or request permission to reproduce materials, contact Ivey Publishing, Richard Ivey School of Business Foundation, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail [email  protected] uwo. ca. Copyright  © 2011, Richard Ivey School of Business Foundation Version: 2011-04-29 The executive offices of Fortis Inc. overlooked the harbour in St. John’s, Canada. Ships could be seen entering and exiting through the Narrows, the outlet to the North Atlantic Ocean. It had snowed and the trees on the Southside Hills were covered with a light dusting of white.H. Stanley Marshall, President and CEO, and John Evans, chief engineer, turned away from the view and began discussing the main issue the board of directors would confront at its next meeting in January 2002. Marshall and Evans were planning a presentation on the company’s Chalillo Dam project in Belize. They believed the project should proceed, but they had to convince the board of directors. The task was to make a recommendation including supporting arguments with a defence to counter the attacks being made on the project by international environmental non-governmental organizations (ENGOs).Fortis had to prepare for the negative publicity that would most likely occur if the project was approved. If the company was unable to make a convincing argument, it was unlikely the project would proceed. FORTIS CORPORATION Fortis Inc. was a diversified electric utility holding company headquartered in St. John’s, Newfoundland, Canada. Fortis is a Latin word meaning strong, powerful, and firm. The Fortis international banking and insurance financial firm headquartered in The Netherlands and Belgium was not associated with Fortis Inc.In 2001, Fortis wholly owned Newfoundland Power Inc. , the principal distributor of power in the province of Newfoundland, and Maritime Electric Company, Limited, the main distributor in Prince Edward Island. Other financial interests included: ? ? ? FortisUS Energy Corporation, which operated four hydroelectric generating stations in upper New York state. Fifty per cent of Canadian Niagara Power Company, which sold energy to Canadian and U. S. customers. Twenty per cent of Caribbean Utilities Company Ltd. , the sole supplier of electricity on Grand Cayman, Cayman Islands.This document is authorized to be used only in the BU111- Introduction to Business Organization course by Professor Leanne Hagarty, at the Wilfrid Laurier University from 09/10/2012 until 12/19/2012. Use outside these parameters is a copyright violation. S ? ? ? 9B11M026 Sixty-seven per cent of Belize Electricity Limited (BEL), the only distributor of electricity in Belize, Central America. One hundred per cent of Belize Electric Company Limited (BECOL), which owned a hydroelectric plant on the Macal River in Mollejon, Belize.A non-utility subsidiary, Fortis Properties, with investments in commercial properties in Atlantic Canada. 1 Exhibit 1 is a summary of Fortis’ financial performance for the years 1997 through 2001. FORTIS’ BELIZE OPERATIONS The Fortis operations in Belize embroiled the company in a social responsibility issue that consumed substantial costs, time, and energy. Belize Electricity Limited (BEL) had been owned by the government of Belize and was the main supplier of electricity in th e country. In October and November 1999, Fortis Inc. acquired 67 per cent of the company for $36 million in cash.It later acquired BECOL and a proposal by this company to develop a hydroelectric project in Belize received international attention and became a sensitive issue for management. At the time of acquisition, BEL served about 53,000 customers. It was able to meet the country’s peak demand of 44 megawatts from the Mollejon hydro plant, its own diesel-fired generation, and purchases of energy from Comision de Electricidad, the Mexican state-owned power company. During 2000, the company conducted a quarterly Customer Satisfaction Survey and received an average 85 per cent satisfaction rating.Several initiatives improved BEL’s performance, including expanded service, improved reliability, monthly visits to customers, and the implementation of convenient payment options for customers. 2 BEL enhanced its corporate image in several other ways. It reduced electricity r ates by seven per cent — a move targeted at commercial customers to assist in stimulating economic activity. 3 The company deployed operational teams from Newfoundland Power and Maritime Electric to repair damage caused by Hurricane Keith in the northern coastal regions of Belize on September 30, 2000.A safety program was implemented to reduce the risk of injury to employees and the public. This included the promotion of public safety and sponsorship of safety awareness campaigns. 4 BEL was concerned about the environment and initiated a program to meet compliance with the ISO 14001 environmental standard. It completed environmental cleanups at its generating plants and some diesel plants were decommissioned. The company signed a Memorandum of Intent to purchase excess capacity from Belize Sugar Industries, which had proposed construction of an electrical generation facility fuelled by sugar cane residue. BEL continued to improve its operations during 2001. Automated billing was introduced for its now 57,000 customers. Rural electrification projects continued in partnership with the Belizean government. These projects would eventually result in the closing of the remaining isolated diesel plants. A comprehensive safety audit was conducted and was the basis for a plan to increase employee safety. The 1 Generating Growth 2001 Annual Report, Fortis Inc. , pp. 10-24. Electrifying Growth 2000 Annual Report, Fortis Inc. , p. 16. 3 Ibid. , 35. 4 Ibid. , pp. 4, 16-17. 5 Ibid. , pp. 4, 18. 2This document is authorized to be used only in the BU111- Introduction to Business Organization course by Professor Leanne Hagarty, at the Wilfrid Laurier University from 09/10/2012 until 12/19/2012. Use outside these parameters is a copyright violation. Page 2 9B11M026 Customer Satisfaction Index continued high at 82. 5 per cent. The company worked with the government to develop energy resources to meet the demand for energy with the goal of achieving self-sufficiency. 6 BEL was sensitive to environmental concerns and continued to mitigate the environmental impact of its operations.In October, 2,600 customers were impacted by Iris, a Category IV hurricane which damaged 25 per cent of the distribution system, causing $4 million in damage. The company donated about $40,000 to the Belize Red Cross for relief activities and employees donated clothing, helped build shelters, and cooked and served meals to hurricane victims. 7 The economic performance of BEL is summarized in Exhibit 2. The company’s rates and minimum quality service standards were determined by the Public Utilities Commission (PUC). Also, the company had a license to generate, transmit, distribute, and supply electricity until 2015.At that time, it had the right of first refusal on a subsequent license and if its license was not renewed, Fortis was to be paid the greater of market value or 120 per cent of net book value of assets. 8 For Fortis, the major event in 2001 was the purchase on January 26 of 95 per cent ownership in the Belize Electric Company Limited (BECOL) with the Belizean government owning the other five per cent. BECOL operated the only commercial hydroelectric station in the country at Mollejon on the Macal River. The plant produced 25 megawatts and was capable of delivering average energy of 80 gigawatt hours.BECOL’s entire output was sold to Belize Electricity under a 50-year power purchase agreement. 9 Fortis paid $103. 1 million for BECOL and considered it a good strategic fit with its operation of BEL. 10 BECOL planned to build another dam on the Macal River and that became a major issue for BEL and Fortis. THE COUNTRY OF BELIZE Belize was a sovereign, democratic state with a government operating on the principles of parliamentary governance based on the Westminster parliamentary system. Until 1973, the country was known as British Honduras.It became independent from Britain in 1981 but maintained membership in the British Commonweal th of Nations. The country was located on the eastern or Caribbean coast of Central America, bordered by Mexico and Guatemala. A low plain extended along the coast with the land rising in the interior, where mountains rose to 1,124 metres above sea level. Eighty-four per cent of the country was covered with forests and about 10 per cent had arable land. The country was 22,966 square kilometres and the climate was subtropical. The main industries were sugar, citrus, fisheries, and bananas with some timber operations, food processing, and construction.Tourism had become an increasing contributor to the economy. The largest city was Belize City, on the coast, which was the country’s commercial hub. Inland about 75 kilometres was Belmopan, the capital where the seat of government had been relocated from Belize City to escape from the storms that flooded coastal areas. The country’s population was less than 300,000. 11 The government believed that electrification was an imp ortant component in its attempts to improve the country’s economy. The possible development of another hydro plant on the Macal River, known as the Chalillo project, was critical to increasing the supply of electricity. Generating Growth 2001 Annual Report, Fortis Inc. , pp. 6, 17. Ibid. , pp. 3, 18. 8 Ibid. , p. 34. 9 Electrifying Growth 2000 Annual Report, Fortis Inc. , p. 6. 10 Generating Growth 2001 Annual Report, Fortis Inc. , p. 4. 11 â€Å"About Belize,† Government of Belize web site, www. governmentofbelize. gov. bz/about_belize. html, accessed December 29, 2008. 7 This document is authorized to be used only in the BU111- Introduction to Business Organization course by Professor Leanne Hagarty, at the Wilfrid Laurier University from 09/10/2012 until 12/19/2012. Use outside these parameters is a copyright violation. Page 3 9B11M026THE CHALILLO PROJECT Fortis, through BECOL, had proposed construction of a dam on the Macal River in the Cayo District of western Bel ize at a cost of about US$27. 3 million. The site was located in an unpopulated wilderness area, part of which was in the Mountain Pine Ridge Forest Reserve and the Chaquibul National Park. These areas covered most of the southern half of the Cayo District (see Exhibit 3). It would produce 7. 3 megawatts of electricity for the Belize network and regulate the water flow of the river. The control over the water flow would increase the productivity and reliability of the Mollejon hydropower station downstream.The Chalillo project included the following: ? ? ? ? ? a 49. 5-metre-high and 340-metre-wide dam on the river a reservoir with a total surface area of 9. 5 square kilometres a powerhouse at the foot of the dam an 18-kilometre transmission line from the powerhouse to the Mollejon plant ancillary requirements including an access road and construction camp. 12 Project Justification As they had been working on the project for months, Marshall and Evans quickly identified its benefits, in particular for the Belizean economy and for the citizens of the country.Most importantly, the project would increase electrical output and raise energy self-sufficiency. The second dam on the Macal River would increase the productivity of the existing electrical plant at Mollejon. The output from the two plants would reduce reliance on petroleum generation, as diesel-fuelled generators could be closed. This would reduce greenhouse gas emissions and the possibility of oil spills. A large portion of Belizean electrical energy was imported from Mexico under a contract that was to expire in 2008.The Mexican system experienced difficulties and was not a stable source, resulting in power outages in Belize. The completion of the Chalillo project meant that Belize would have a more reliable and secure supply of electricity, thus stabilizing and possibly reducing prices. Alternative sources of energy were examined by the government and BEL including thermal options (diesel and gas turbin es), biomass, Battery Energy Storage Systems, and solar and wind power. Studies by BEL determined that power generated from the hydro source was less expensive than any other type of power.However, BEL was committed to purchasing power from a bagasse-fuelled generation facility planned by Belize Sugar Industries Limited (BSI). The facility would produce energy by burning crushed sugarcane and wood waste from nearby sawmills. There were also auxiliary benefits from the project. The dam and reservoir would control flooding on the Macal River with significant economic, health and safety benefits to downstream residents, many of whom lived in the river’s floodplain. Also, there would be a steadier supply of water for residents, especially during the dry season.Employment would be created during construction and there would be economic benefits from supplying goods and services to the project. 13 12 Information for this section was obtained from â€Å"Chalillo Hydropower Project Summary,† brochure published by Fortis Inc. , Belize Electric Company Ltd. , and Belize Electricity Limited, October 2001, p. 10. 13 Most of the information for this section was obtained from â€Å"Chalillo Hydropower Project Summary,† brochure published by Fortis Inc. , Belize Electric Company Ltd. , and Belize Electricity Limited, October 2001, pp. 7, 10, 15-17.This document is authorized to be used only in the BU111- Introduction to Business Organization course by Professor Leanne Hagarty, at the Wilfrid Laurier University from 09/10/2012 until 12/19/2012. Use outside these parameters is a copyright violation. Page 4 9B11M026 Environmental Impact Fortis, through BECOL, was sensitive to the need for an environmental impact assessment. A five-volume Environmental Impact Assessment (EIA) report on the â€Å"Macal River Upstream Storage Facility† (technical name for the Chalillo project) was submitted by BECOL to the Belizean government in August 2001. Two portion s of the EIA are discussed below.The Natural History Museum, London, England, conducted a wildlife impact assessment of the proposed Chalillo project in early 2001. The report confirmed that the area which would be impacted contained a rare and discrete floral floodplain habitat. This habitat relied on the flow of oxygenated water and the seasonal flooding following heavy rain. The project would adversely impact a biologically rich and diverse area, as well as many animals inhabiting the area, including jaguar, Baird’s tapir, Morelet’s crocodile, several species of monkeys, the Central American Scarlet Macaw, and various other bird life.The report concluded that mitigation of the negative impacts of large-scale dams on wildlife was usually irreversible and that mitigation efforts were often ineffective. 14 The Natural History Museum report applied conservation criteria to three options: ? ? ? Do not build the Chalillo dam. This was the best opportunity to avoid the imp act on key aquatic and terrestrial wildlife. It stated that, â€Å"This option should be considered seriously, especially if costs identified in reviews of the technical, socio-economic and environmental assessments †¦ re considered to outweigh the benefits of meeting the growing demand and utilization of electrical energy by increasingly criticised hydroelectric projects. † Select an alternative site for damming. If tributaries were dammed instead, they could potentially supply the same volume of water with less damage to the environment. But, this alternative would require technical, economic and environmental surveys. Proceed as planned. If this option were followed, it would not be possible to satisfactorily mitigate against most of the long-term impact to the environment.However, the report did identify measures that would partially alleviate some of the impact of construction and operation. 15 The report identified several measures to mitigate or offset the impact of the project, including: building roads to avoid sensitive wild plant and animal life sites, issuing safe and clear guidelines to drivers, prohibiting all hunting and settling in the area, providing fire protection, maintaining a minimum water flow in the river, and re-aerating water before releasing it downstream. 16 The concluding recommendation of the report was:Based on the rarity of the habitat, and the dependence on this habitat by several endangered species, the â€Å"No Build† option is highly recommended as the most suitable and appropriate option for the long-term viability and conservation of wildlife in Belize. 17 The Canadian International Development Agency (CIDA) hired AMEC, a British engineering and project management consulting firm, to prepare an environmental impact assessment of the Chalillo project. CIDA’s involvement was a form of aid to a developing country.The assessment was performed in accordance with the Belize Environmental Protection Act and the â€Å"Projects Outside Canada Environmental 14 C. M. Minty, â€Å"Preliminary Report on the Scientific and Biodiversity Value of the Macal and Raspaculo: A Wildlife Impact Assessment for the Proposed Macal River Upper Storage Facility† (Executive Summary), The Natural History Museum, London, England, May 24, 2001, http://old. probeinternational. org/catalog/pi/documents/belize/NHM9_05_01Wia15. pdf. 15 Ibid. , p. 49. 16 Ibid. , pp. 46-47. 17 Ibid. , p. 49.This document is authorized to be used only in the BU111- Introduction to Business Organization course by Professor Leanne Hagarty, at the Wilfrid Laurier University from 09/10/2012 until 12/19/2012. Use outside these parameters is a copyright violation. Page 5 9B11M026 Assessment Regulations† of the Canadian Environmental Assessment Act. CIDA’s report, dated August 2001, summarized the advantages and disadvantages of the project. Adverse predicted impacts were the risk to plant and animal species. There would be no predicted impact on population, tourism and ecreation, transportation and public safety, heritage and archaeological resources, water and air quality, parks and forest preserves, and aquatic resources. Positive predicted impacts would include labour force, economy, flood control, reliability of power supply, increased power self-sufficiency, and decreased cost of electricity. 18 The report’s conclusions regarding the Chalillo project on the Macal River included: 1. The project is presently the most economical option for generating power in Belize. 2.It is both technically and economically viable and will maximize the hydroelectric power generation of the river. 3. It will help decrease energy reliance on outside sources. 4. The electric utility will have the flexibility necessary to provide better service to its customers. 5. There will be significant flood control benefits to downstream stakeholders. 19 The studies called for a plan to implement the recommended mitigation measures, including the development of a contingency plan prior to construction. Also, a monitoring or compliance plan should be formulated. 0 Marshall and the Fortis management believed that the environmental impact had been adequately studied. Marshall stated that, â€Å"Fortis has undertaken a comprehensive study of the environmental implications of the Chalillo project and the benefits of the project to the people of Belize. †21 Opposition to the Project During 2001, criticisms and opposition were voluminous, some of which are listed in Exhibit 3. In addition, several Canadian print and broadcast media carried stories, there were letters to the editor in newspapers, and protest web sites were established.Numerous environmental ENGOs campaigned against the project, including Probe International (PI), Natural Resources Defense Council (NRDC), Sierra Club, the Sierra Club of Canada, the Belize Alliance of Conservation Non-Governmental Organizations (BACONGO), Humb er Environmental Action Group, Humber Natural History Society, Petitcodiac Riverkeeper, Action Environment, Defenders of Wildlife, Environment Coalition of Prince Edward Island, and Falls Brook Centre. In particular, Probe International carried out an aggressive campaign and coordinated the protests of other ENGOs. 2 PI was an environmental advocacy group that fought to stop ill-conceived aid, trade projects and foreign investments. It worked to give citizens the tools they needed â€Å"to stop these projects using the rule of law, democratic processes, and honest and transparent accounting. †23 It was a division of the Energy Probe Research Foundation, a well-known Canadian environmental and energy policy ENGO created in 1980. Its tactics included letter-writing to public officials, preparation and publishing of reports and articles, media releases, speech presentations, and public demonstrations. 18 Macal River Upstream Storage Facility Environmental Impact Assessment †“ Part 1 Main Report† (Executive Summary), AMEC and Canadian International Development Agency, August 2001, www. probeinternational. org/chalillo/news-andopinion/macal-river-upstream-storage-facility-environmental-impact-assessment. 19 Ibid. , Main Report, p. 18. 20 Ibid. , Executive Summary, ES-2 and ES-3. 21 â€Å"News Article,† Fortis Inc. web site, November 1, 2002, www. fortisinc. com/News/Article. aspx? id=134. 22 Fortis Belize web site, Probe International, www. probeinternational. org/fortis-belize/news_and_opinion. 3 â€Å"About Us,† Probe International web site, www. probeinternational. org/node/5818#tabs-tabset-1. This document is authorized to be used only in the BU111- Introduction to Business Organization course by Professor Leanne Hagarty, at the Wilfrid Laurier University from 09/10/2012 until 12/19/2012. Use outside these parameters is a copyright violation. Page 6 9B11M026 The other main opposition came from NRDC, an environmental action group founded in 1970. Its mission was to safeguard the Earth: its people, its plants and animals, and the natural systems on which all life depends.It had offices in seven U. S. cities, staff of about 300 lawyers, scientists and policy experts, and about one million members. Robert F. Kennedy, Jr. , a lawyer, was the main spokesperson for NRDC on the Chalillo project. 24 Probe International maintained an elaborate web site in opposition to the project. Another web site devoted exclusively to the Chalillo project was Stop Fortis! at www. stopfortis. org, which contained extensive information on the project, including photographs. Several environmental groups placed advertisements in Canadian newspapers.The wording in one advertisement included: Look her [a jaguar] in the eyes. Now explain why a Canadian company wants to destroy her home. It won’t be easy. Fortis Inc. of Newfoundland plans to profit from it †¦ with a dam that makes no sense. Look him [Stan Marshall] in the eye s. And tell Fortis CEO Stan Marshall that it is wrong to destroy one of the wildest places left in all of Central America. 25 Readers were invited to visit a web site, www. stopfortis. org, or call toll free 1-866-STOP-FORTIS. The criticisms of Fortis’ practices and the dam’s construction are summarized in Exhibit 4.Fortis, and Marshall in particular, responded to this criticism. A news release was made on November 1, 2001, called â€Å"Decision to Build Hydroelectric Dam in Belize Should Reside with Belizeans. † The main points made in the release were: ? ? ? ? Belizeans should decide on the construction of the dam. Contrary to information from ENGOs, the dam is economically feasible and will ensure a more stable energy supply. Information presented by ENGOs is misleading the media about the environmental impact of the project. Fortis is willing to review its business activities with stakeholders. 6 In a story in The Telegram on November 2, Marshall stated to a reporter that, â€Å"This bombardment in the media of misleading information is putting enormous pressure on me, attacking me personally and inundating the media with lies. † He also said, â€Å"Whatever we do as an electric company will impact the environment, but it’s a question of how well we can manage our activities. On balance, this project is a good one. If I felt personally that we were going to threaten an endangered species and wipe it out — no. I would not propose going ahead with it. †27In mid-2001, the Belizean government’s National Environmental Appraisal Committee began its evaluation of the project. The Committee was comprised of nine government members and two nongovernment members representing the Association of National Development Agencies and BACONGO. In mid-November 2001, the Committee granted the environmental clearance for construction of the Chalillo dam, as the economic and other benefits of the project outweighed the env ironmental costs. Its decision was â€Å"conditional upon the development and signing of the Environmental Compliance Plan (ECP), which 24Natural Resources Defense Council web site, www. nrdc. org/about. â€Å"Look her in the eyes,† advertisement, The Telegram, St. John’s, Newfoundland, October 18, 2001, D11. 26 â€Å"News Article,† Fortis Inc. web site, November 1, 2002, www. fortisinc. com/News/Article. aspx? id=134. 27 Will Hilliard, â€Å"Dam opponents misled: Fortis,† The Telegram, St. John’s, Newfoundland, November 2, 2001, A3. 25 This document is authorized to be used only in the BU111- Introduction to Business Organization course by Professor Leanne Hagarty, at the Wilfrid Laurier University from 09/10/2012 until 12/19/2012.Use outside these parameters is a copyright violation. Page 7 9B11M026 would incorporate the mitigation measures identified in the EIA in addition to those recommended during the evaluation process. †28 Opponents of the project immediately criticized the decision, claiming that the government was biased. The government members voted for the project and the prime minister had publicly supported the project. Critics also pointed out the lack of public consultation during the evaluation process. They claimed the public hearings being held after the announcement were to present or explain the decision.This approach contravened law that required public hearings with submissions from interested stakeholders. 29 The Decision and Expected Opposition Looking back over the past year, Marshall and Evans were amazed at the extent of the opposition and criticism. Even with the Belizean government’s approval, they realized that the coming year would most likely be more of the same. Some of the circumstances and challenges that Fortis’ management faced were: ? ? ? ? ? ? ? ? ? ? ? Legal action seeking injunctions or stoppage of the project in the Belizean, Canadian and British court systems.Po litical lobbying by ENGOs of government agencies, officials and politicians in Belize and Canada. Pressures to reduce electricity prices and certainly against increasing them. Customer satisfaction measures might decline if lower prices were not delivered. Protests against the project through letters to the editor, demonstrations at Fortis properties, and petitions. More celebrity â€Å"protest† appearances. Newspaper advertising against the project. Shareholders might be concerned and there might be questions from activists at the Annual Shareholders Meeting.The social investing concept was increasing in popularity. Calls for more environmental studies and challenges from ENGOs on the accuracy of EIAs. Constant monitoring and evaluation by ENGOs of everything related to the project. Adverse media coverage. The political environment might change in Belize if a different party was elected to govern. The project had consumed a lot of time, energy and resources and Marshall and Evans wondered whether or not it was worth it. There might be less demanding projects which would add as much value to the company.They turned away from the harbour view and started to draft their report and recommendation to the board of directors. 28 â€Å"Chalillo Dam receives Environmental Clearance,† Press Release, Ministry of the Environment, November 13, 2001, http://sanpedrosun. net/old/01-453. html. 29 â€Å"Chalillo Dam – Who will benefit? † (Editorial), The San Pedro Sun, 11:46, November 22, 2001, http://sanpedrosun. net/old/01-463. html. This document is authorized to be used only in the BU111- Introduction to Business Organization course by Professor Leanne Hagarty, at the Wilfrid Laurier University from 09/10/2012 until 12/19/2012.Use outside these parameters is a copyright violation. Page 8 9B11M026 Exhibit 1 SELECTED FINANCIAL DATA FORTIS INC. 1997-2001 (In Canadian Dollars) Operating Revenues (‘000$) Operating Expenses (‘000$) Income Taxes (‘000$) Share Earnings (‘000$) Total Assets (‘000$) Book Value per Share $ Dividend per Share $ Share Price (closing) $ 1997 486,662 341,024 29,449 30,006 1,017,396 25. 58 1. 76 42. 00 1998 472,725 339,429 22,998 27,414 1,037,192 26. 09 1. 80 38. 25 1999 505,218 356,227 27,476 29,183 1,238,597 26. 21 1. 81 31. 40 2000 580,197 417,607 17,228 36,759 1,478,596 7. 89 1. 84 36. 00 2001 628,254 418,347 28,088 53,442 1,642,752 29. 97 1. 87 46. 95 Source: â€Å"Historical Financial Summary,† Generating Growth 2001 Annual Report, Fortis Inc. , pp. 58-59. Exhibit 2 BELIZE ELECTRICITY LIMITED FINANCIAL PERFORMANCE 2000 AND 2001 (In Canadian Dollars) Earnings Energy Sales Revenues Power Expenses Other Operating Expenses Earnings Contributed to Fortis Inc. Capital Expenditures Long-Term Debt 2000 $8. 2 m 229 GWh $63. 6 m $30. 6 m $13. 6 m $5. 5 m $21. 0 m $60. 6 m 2001 $9. 3 m 257 GWh $72. 4 m $34. 8 m $14. 2 m $6. 3 m $27. 6 m $84. 3 mSource: Electrifying Growth 2000 Annual Report, Fortis Inc. , pp. 35-36, and Generating Growth 2001 Annual Report, Fortis Inc. , pp. 3, 33-34, 38, 48. This document is authorized to be used only in the BU111- Introduction to Business Organization course by Professor Leanne Hagarty, at the Wilfrid Laurier University from 09/10/2012 until 12/19/2012. Use outside these parameters is a copyright violation. Page 9 9B11M026 Exhibit 3 SELECTED ACTIVITIES OPPOSING THE CHALILLO PROJECT DURING 2001 February 2 May 5 May 20 June 3 August 29 September 20 October 4 October 12 October 18 October 29 October 30October 31 November 1 November 30 December 2 December 4 December 1823 December 31 Belizean newspaper, The Reporter, carries a story about a school teacher allegedly being fired because he opposed the project M. P. Keith Martin requests release of environmental impact assessment in the Canadian House of Commons Oral Question Period The Reporter carries story that proposed dam could flood Maya ruins The Reporter carries st ory claiming Canadians not being told the truth about the Chalillo project Probe International complains to Minister of International Cooperation about CIDA’s secrecyHarrison Ford speaks out against the proposed dam Opposition MP Svend Robinson expresses concern about project to Minister of International Cooperation Probe International and other groups write a letter to the Minister of Foreign Affairs calling for the government to stop supporting the dam Coalition of environmental groups launch a series of â€Å"hard hitting† advertisements in Atlantic Canadian newspapers opposing the dam Probe International writes a letter to Fortis’ board of directors regarding the company’s refusal to meet with citizens groups Greg Malone, St.John’s comedian, starts campaign to save endangered creatures National Post editorial states that what Belize needs is a free energy market rather than an uneconomical dam Harrison Ford, Robert Kennedy, and others lobby aga inst dam that could destroy a forest at a Toronto Stock Exchange press conference Concerned citizens from across Atlantic Canada hold regional day of action in opposition to the project Environmental NGOs announce they will be contacting Fortis’ major shareholders Probe International files a complaint against CIDA’s involvement with the hydro schemeRobert Kennedy Jr. travels to Belize to support citizens opposing the dam Conservation groups claim that the Belizean government’s clearance for the hydro project is illegal Source: Compiled from Belize Fortis Campaign, pp. 13-20, Probe International web site, www. probeinternational. org/fortisbelize/news_and_opinion. This document is authorized to be used only in the BU111- Introduction to Business Organization course by Professor Leanne Hagarty, at the Wilfrid Laurier University from 09/10/2012 until 12/19/2012.Use outside these parameters is a copyright violation. Page 10 9B11M026 Exhibit 4 MAIN CRITICISMS OF THE CHALILLO PROJECT ? ? ? ? ? ? ? ? ? ? The threat to wild and plant life, especially endangered species. The dam would exacerbate the water quality problems downstream. The dam might flood Maya ruins, destroying the cultural landscape. Limestone caves might drain the reservoir. The claim that the project was uneconomical and not the cheapest option. The only reason the project was viable was because BEL had a monopoly and could recover costs from captive customers.Fortis’ unwillingness to consider alternative sources, denying consumers better and cheaper electricity. The allegation that Fortis asked the Canadian government, through CIDA, to pay for a study justifying the project. It was claimed that the study was biased, involved too much secrecy, and failed to promote and ensure effective stakeholder consultation. According to environmental groups, Fortis denied them access to pertinent information and failed to consult them. Fortis would not make its own geology studies and e ngineering plans public or agree to an independent panel review.There was insufficient information on the impact of the project. Source: Compiled from Belize Fortis Campaign, pp. 13-20, Probe International web site, www. probeinternational. org/fortisbelize/news_and_opinion. This document is authorized to be used only in the BU111- Introduction to Business Organization course by Professor Leanne Hagarty, at the Wilfrid Laurier University from 09/10/2012 until 12/19/2012. Use outside these parameters is a copyright violation. Page 11

Secret Shortcuts to Capstone Essay Samples Seminar Only the Pros Know

Secret Shortcuts to Capstone Essay Samples Seminar Only the Pros Know Basically crafting a customized capstone project essay isn't a walk in the park. You must find a great capstone project idea that you're prepared to work on for a number of weeks. It is a good idea to think of the subject from the very start of the program. Students are taught the expectations at the start of the year and many times throughout the year. Vital Pieces of Capstone Essay Samples Seminar For this reason, you can make sure that the essay will be exactly to the high standards that you need. Selecting a capstone topic is dependent upon the matter. If you own a capstone project topic that's interesting for you, it is going to be much easier to begin writing, gather the info, find the sources, and do the rest of the things you require to complete your work properly. Generally, you will locate many capstone project topics on the web. Any course may have a capstone undertaking. The student should choose one of capstone project ideas associated with the course or specialization and compose a paper. Irrespective of the definition of a capstone project, all students should take the very same course so as to research and compose the document. While students in graduate school are expected to finish a wide number of papers, a capstone project differs from other sorts of writing assignments as it's very research-intensive. Typically the Calculus Stomach subscore is going to be made to permit faculties as well as educational facilities more details regarding your present ability. As a consequence, students often have to learn skills since they are using them. There are lots of different advantages of using our custom written service in place of a capstone project template that you might find online. You should speak the organizational structure info in the introduction 4. 1 list of prospective research question s are available here and another can be found here. When it has to do with finding out more regarding our professional Capstone writing services it is crucial to understand the advantages of coming to us for aid. The Honest to Goodness Truth on Capstone Essay Samples Seminar Take notes about the prospective issues that you can discuss in your research paper. In the exact same purchase form, you're supply your name, email, and contact form. This course of action is performed by our experienced writers working for our customized essay writing company. When you are searching for help with writing an outstanding Capstone document that will assist your document stand out, we're here to aid you. What Capstone Essay Samples Seminar Is - and What it Is Not Make certain that you are delving into something which will boost some off school learning experience in the students. Students are anticipated to be on task in any way times and to respect the ideas and opinions of classmates. In most cases they will work individually. Therefore, they need to make sure that they allow plenty of time for edits. The Debate Over Capstone Essay Samples Seminar If you're expected to start your work over the summertime, your course instructor will supply you with additional instruction, assignments, and avenues for continued communication to lead you through the research planning process during the summertime. The instructor will subsequently contact the possible advisor. If your school doesn't offer a list of possible expert advisers, attempt to brainstorm some ideas of who might be able to mentor you when you work. Some schools will compile a pool of likely expert advisers available, although other schools will rely on you to discover your own. Employing critical thinking during the procedure for problem solving is crucial to be able to find a satisfied outcome. The very first step is to realize the project requirements. The procedure is complex and can appear over whelming at first, since the possibilities may appear endless. Do not skip this critical step. Students are expected to talk to the Seminar instructor and other faculty during the course of their program as a way to ascertain a suitable research topic. They should also feel free to consult with each other. They have the opportunity to work with experts in the field, make important professional connections, and begin to specialize in their own areas of interest. Along with the writing process, they are frequently required to make a presentation (also known as a defense) of their project. By way of example, Capstone experiences can be located in certificate programs too. If you're in the last year of your studying at college or university, you are going to have to compose a capstone undertaking. A capstone project ought to be specific to a student's individual education experience. Moreover, it is a way of determining whether students are ready to graduate. You can search for the very best essay topic ideas online. After deciding the topic that you're going to be exploring when completing a last report, you'll then will need to conduct research into the subject. Make certain that the literature you're collecting about your topic doesn't have any ambiguity, true and up to date according to the most recent developments. Furthermore an excellent topic is needed from which the body is able to be structured from.

Germany s International Trade And Foreign Business

Introduction With an estimated population of 80.1 million, Germany has the largest economy in Europe and one of the largest economies in the world. Located in northern central Europe, Germany shares borders with nine European countries. Berlin is the country’s capital and largest city geographically. Today Germany is divided into sixteen federated states, including Berlin. German is the official language of this country, and is one of the top ten most spoken languages in the world. As one of the top exporting countries in the world, Germany is not a stranger to international business. Obviously international trade and foreign business plays a major role in their economy. Germany’s innovation and ability to attract foreign direct investment allows them to be one of the world’s largest economies. In order for us to understand how German business is structured we must first learn about their culture and environment. Background In the early 20th century, Germany suffered from two world wars. The country was faced with World War I from July 1914 until November 1918, where German empire was defeated by Germany and Russia. In January 1933, Adolf Hitler came to power in Germany and began his reign with the Nazi party. In 1939, Germany invaded Poland and began World War II. The German Nazis fought in this war until the official surrender in 1945. Defeats in both wars caused the German economy to plunge and the standard of living reached a low point for German citizens. HoweverShow MoreRelatedShort Term And Long Term Perspective Of Institutional Development And Economic Growth Essay829 Words   |  4 PagesShort-term orientation (LTO) retrained focuses on the degree the society embraces, or does not embrace, short-term devotion to keeping up with the joneses (Itim international, 2015). â€Å"There is a dramatic need for a comprehensive strategy of Eurozone stability, institutional consolidation, and economic recovery and development that goes to the roots of the trouble, and places the necessary short-term stabilization measures within the long-term perspective of institutional development and economicRead MoreSwot Analysis Of Easyjet1159 Words   |  5 PagesINTRODUCTION Innovators and bold in their ventures in business EasyJet are key contenders within the European economic market and despite Brexit, have huge scope to succeed in a tactical relocation in a suitable EU member state after Great Britain imminently leaves the European Union. Background Founded by Greek billionaire Sir Stelios Haji-Ioannou and driven by CEO Dame Carolyn McCall since taking her post in 2010. EasyJet launched in 1995, and has made a niche market for itself as cheap andRead MoreInternational Business factor1439 Words   |  6 Pagesï » ¿Since the Second World War, international business appeared as the main economic factor responding to postwar needs. Nowadays, globalisation has increased the facility of international exchange and has risen the multicultural needs.The increase in demand for international products has resulted in large possibilities to do business abroad. However, it is really complicate to import or export without knowledge in this area. Global business is all of the commercial exchanges which involve more thanRead MoreMarket Entry Strategy1352 Words   |  6 Pagesplanning on selling its new revolutionized Smart Cars to two foreign countries, Japan and Germany. The company believes that the increasing trend of going green and con cerns about the environment in Japan and Germany will merge significant profits shortly after entering those two markets. Anna’s Car has evaluated various market entry strategy alternatives and is now hesitating between direct exporting or foreign direct investment for Germany and franchising or joint venture for Japan. Direct ExportRead MorePolitical Factors That Affect International Business1020 Words   |  5 Pagesthese factors can facilitate or hinder business operation. Some of the political factors that affect international business include† (Justin Ervin. Zachary Smith A.2008). One significant political environmental factor that influences international business operation is trade agreements. Countries frequently enter into trade treaties to further facilitate trade between themselves. Case in point, a European Union consisting of countries like France, Germany and Italy where the organizations of theseRead MoreGlobalization Of Business : Globalization1486 Words   |  6 PagesGlobalization in Business: Globalization refers to the changes in the world where we are moving away from self-contained countries and toward a more integrated world. Globalization of business is the change in a business from a company associated with a single country to one that operates in multiple countries. Impact of Globalization: Market globalization is the decline in barriers to selling in countries other than the home country. This change will make it easier for your company to begin sellingRead MoreGlobalization Of Business : Globalization1486 Words   |  6 PagesGlobalization in Business: Globalization refers to the changes in the world where we are moving away from self-contained countries and toward a more integrated world. Globalization of business is the change in a business from a company associated with a single country to one that operates in multiple countries. Impact of Globalization: Market globalization is the decline in barriers to selling in countries other than the home country. This change will make it easier for your company to begin sellingRead MoreGreenfield (India V. Germany)3345 Words   |  14 PagesIntroduction As a part of its international expansion program, Acme, a U.S. multinational enterprise (MNE), is currently in the planning stages of establishing a Greenfield which is an investment that establishes a production or service facility starting from the ground up overseas (Eitman, Stonehill, Moffett, 2004). In this paper, we will present a proposal to the steering committee comparing the advantages and disadvantages of starting operations in one of two selected foreign countries overseas. HoweverRead MoreFast Food : A Popular Choice For Consumers1057 Words   |  5 Pageslead the sales Nathan’s Famous will be in the running with it, because fast food in Germany continues to have opportunities for good growth. There a couple of factors that help with this growth which is the fact that people’s lives are increasingly fast paced and the growing demand for fast and convenient food solutions. Fast Food in Germany (2015, September 1) I think the best way to go when trying to expand a business into an environment you do not really know anything about would be to have a franchiseRead MoreFIN4516 Innocents Abroad Report1461 Words   |  6 PagesThis case deals with a matter that all international investors deal with. When a client decides to invest internationally, they run the risk of not only the investment losing value, but also the currency losing value. In the case of Sandra Meyer, it was not about just convincing a client about investing internationally; she had to convince her largest client’s Chief Investment Officer, Henry Bosse. The three (3) main topics Sandra was focusing on were international diversification benefits, currency

Traditional Parenthood An Authoritative Lifestyle

As little children, everyone is brought up believing and aspiring to get married and eventually have children. From having a spectacular, ornate wedding, to picking out baby names; it is such an exciting topic one always dreams about. Traditional parenthood is an authoritative lifestyle that is empowering, as it delivers a gratifying aspect to our liberal, modern day society. The gentleman and woman connect, bringing a wholeness of pure love. That is what marriage is all about. Although it is a great deal for adults to be happy, the traditional way of living leaves a huge impact on the children. Family values mean a significant deal, and they affect how children grow and treat other people. Values of love, faith, respect, and leadership are all attributes that resemble a child of great character. A traditional home brings traditional children, which leads to a traditional, joyful society. Children who grow up in a strong family home will lead by example, raising a traditional family ; therefore, creating a proven overall stronger, chivalrous, and healthy society. Respect by definition is â€Å"having due regard for the feelings, wishes, rights, or traditions of† (Mosher 1). Respect is a quality that is hard to come by these days. More children are becoming more accustomed and too close to adults. Almost in a friend aspect, the traditional home children are mindful of how to handle a situation; have a good time, but treat others, especially adults with reverence. Although one isShow MoreRelatedImportance Of Parenting Essay1519 Words   |  7 Pageswithin the future. In 1967, a woman named Diana Baumrind contributed to the knowledge in socioemotional development by studying and researching parenting styles. She originally stated that there are four types of parenting styles; authoritarian, authoritative, permissive and neglectful. Each of the styles range according to the demandingness upon the children compared to the responsiveness to the childrenâ€⠄¢s needs. This topic particularly intrigues me due to the fact that I am a mother and have to displayRead More TV Families and Real Families Essay3199 Words   |  13 Pagestogether, understood their roles, and did what was expected of them; by the 1960s, there were a few sitcoms that began to undermine the television parent’s authority by privileging the independence of nearly adult or adult children; by the 1970s, the authoritative father began to disappear as they were no longer the central family member since real fathers were usually too busy at the office for the family; by the 1980s, the boomer parents gave their children much more independence as the families ran democraticallyRead MoreEssay about The Results of Children in Fatherless Homes16087 Words   |  65 Pagesare doing the very best they can? After all, the decision to end a marriage or a relationship is wrenching, and few parents are indifferent to the painful burden this decision imposes on their children . Many take the perilous step toward single parenthood as a last resort, after their best efforts to hold a marriage together have failed. Consequently, it can seem particularly cruel and unfeeling to remind parents of the hardships their children might suffer as a result of family breakup. Other peopleRead More65 Successful Harvard Business School Application Essays 2nd Edition 147256 Words   |  190 Pagespresenting a strategy. I was most effective by leading strongly enough to inspire confidence but not so strongly that I pre.. vented involvement. analysis Stacies experience may look very similar to your experience. Do not fret. Her essay is traditional in both its anecdote and style. Many applicants will discuss lessons learned when effecting change from a consultative role. More still will start their essay with a thesis state... ment, followed by an example, and end with more detailed reflectionRead MoreLogical Reasoning189930 Words   |  760 Pagescommunism would be inadvisable because this issue is so large and the essay is supposed to be so short. That big issue would not be manageable. The essay would have to discuss every country in the world and its economics, political freedom, military, lifestyles, and so forth. The essay would be improved if the student narrowed the issue to, let us say, whether race relations were better under American capitalism or under Soviet communism during World War II. ────CONCEPT CHECK──── State the issueRead MoreSda Manual Essay101191 Words   |  405 PagesChurch Authority in the Seventh-day Adventist Church The 1946 General Conference Session action that all â€Å"changes or revisions of policy† in the Church Manual shall be â€Å"authorized by the General Conference session† reflects a conception of the authoritative status of General Conference sessions that has long been held. In the 1877 session this action was taken: 1 2 CHURCH MANUAL â€Å"Resolved, that the highest authority under God among Seventh-day Adventists is found in the will of the body

College Students and Suicide Free Essays

College Students and Suicide College Students and Suicide By contrast, only 15. 3 percent of Americans overall have had such thoughts, the World Health Organization’s World Mental Health Survey Initiative reported last February. The survey, part of a wider-ranging continuing study on student suicidal behaviors being conducted by David Drum, a professor of education psychology at the University of Texas at Austin, questioned 26,000 undergraduate and graduate students at 70 U. We will write a custom essay sample on College Students and Suicide or any similar topic only for you Order Now S. institutions. The results raise the startling suggestion that suicidal thoughts could be a common experience on par with substance abuse, depression and eating disorders, Drum said. The survey defined considering suicide as having at least one episode of suicidal thinking at some point. Slightly more than half of students said they fit that category, which is known as suicide ideation. When researchers asked about more serious episodes, 15 percent said they had â€Å"seriously considered† attempting suicide. More than 5 percent of students said they had actually attempted suicide, which is the second-leading cause of death for college students, compared to its ranking of ninth among the U. S. population at large, according to the National Alliance on Mental Health. 2 â€Å"Relief from emotional or physical pain† was the top reason students cited for suicidal thinking, followed by problems with romantic relationships. A generalized desire to end their lives was next, followed by problems with school or academics. The study extrapolated that at an average college with 18,000 undergraduate students, 1,080 of them would seriously contemplate taking their lives in any year, numbers that pose troubling issues for college administrators. The survey identified growing levels of distress among college students and diminishing resources to handle the consequences. They found that half of students who had had suicidal thoughts never sought counseling or treatment. We know only a quarter of suicide patients are our clients, which means 75 percent of them never come through our doors,† said Chris Brownson, director of the Counseling and Mental Health Center at the University of Texas. Drum and other researchers said colleges needed a new model, shifting the emphasis from narrowly focused treatments involving suicidal students and a small number of mental health professionals, to one hat involved the entire campus in addressing student stresses. Suicide is a public and mental issue. The focus on dec reasing the numbers needs to be on prevention, building resilience in students and creating supportive communities. In college students, the warning signs of depression which ultimately leads to suicide are, a previous suicide attempt, talking about suicide, and drug or alcohol abuse How to cite College Students and Suicide, Essays

UPS vs. FedEx case Analysis free essay sample

In 2004, the U. S. and China agreed to increase their air transportation flights, which delivered their goods between one another. This agreement represented the most dramatic liberalization of air traffic in the history of the two nations, and therefore FedEx Corporation and United Parcel Service, Inc. (UPS), the only domestic cargo carriers who were permitted to serve the Chinese market at the time were locked in to being the primary beneficiaries of this opportunity. The stock prices for both companies had rose on steady basis since these talks originally began, but FedEx share price skyrocketed five times the rate UPS has. Exhibit 1 below shows UPS and FedEx Stock price patterns from June 2003 to June 2004 relative to the SP 500 Index. During this time FedEx had the largest foreign presence in China, with 11 weekly flights almost twice as many as UPS. FedEx volumes have grown by more than 50% between 2003 and 2004. Although UPS fell behind FedEx in the Chinese market, it was still the world’s largest package-delivering company and the dominant parcel carrier in the United States. As the U. S. package delivery industry prospered, the international markets and especially China became a battleground for the two package delivery giants. FedEx had eventually developed customer logistical management, and was widely looked upon as innovative, entrepreneurial, and an operational leader. On the other hand UPS was repositioning itself as a leading provider of logistics and supply chain management services. FedEx Corporation FedEx first took form as an undergraduate named Fred Smith developed a term paper for his Yale University economics class. Smith’s strategy proposed that FedEx would purchase the planes that it required to transport packages, where all other competition at the time used cargo space that was available on passenger airlines. On top of using his own purchased planes, Smith’s key innovation was a hub-and-spoke distribution pattern, which allowed cheaper and faster service to more locations than his competitors could offer. In 1971, Fred Smith invested his $4 million inheritance, and raised $91 million in venture capital to launch the firm, which in return became the largest venture capital start up at the time. Initially FedEx, then known as Federal Express Corporation, experienced severe losses, and Smith was nearly let go from his chair position. By 1976, FedEx finally saw a profit of $3.6 million on an average daily volume of 19,000 packages. Through the rest of the 1970’s, FedEx continued to expand services, acquiring more trucks and aircraft, raising capital along the way. The formula proved to be successful, and in 1981, FedEx generated more revenue than any other U. S. air delivery company. During the 1990’s FedEx proved to be an operational leader, receiving the prestigious Mal colm Baldrige National Quality award from the President of the United States. They were the first company to ever win in the service category. Most of this success came from the deregulation and the operation strategy, but credit also must be given to FedEx’s philosophy of â€Å"People-Service-Profit†, which reflected its emphasis on customer focus, total quality management, and employee participation. FedEx can acknowledge that their growth came from the context of fundamental change in the business environment. The deregulation of the domestic airline industry permitted larger planes to replace smaller ones, which allowed FedEx to purchase several Boeings’ 727, which helped reduce its unit costs. The trucking deregulation also allowed FedEx to establish an integrated regional trucking system that lowered its unit costs on short haul trips, which enabled the company to compete more effectively with UPS. With the rising inflation costs and global competition manufacturers were compelled to manage inventories more closely and emulate the (JIT) Just-in-Time supply programs of the Japanese, which created an increased demand for FedEx’s rapid and careful monitoring of their movements of packages. By year’s end of 2003, FedEx nearly had $15. 4 billion in assets and a net income of $830 million on revenues of about $22. 5 billion. United Parcel Service, Inc. United Parcel Service, Inc. also known as UPS was founded in 1907. It was the largest package delivery service company in the world. Consolidating parcel deliveries, both on ground and in the air, was UPS primary business focus of the company. In the industry UPS was known as â€Å"Big Brown† with its roots stemming from Seattle, Washington. Jim Casey at 19 years of age started a bicycle-messenger service called the American Messenger Company, but after merging with rival firm, Motorcycle Delivery Company in 1929, United Parcel Service of America (UPS) was formed. UPS started an air delivery service by putting packages on commercial passenger planes. The company entered its strongest period of growth during the post-World War II economic boom, and by 1975 UPS reached a milestone where it could promise package delivery to every address in the entire U. S. In that same year UPS expanded outside of the country with their first delivery to Ontario, Canada. Following that year UPS trademarked 120 brown delivery vans and began service in West Germany. The key to UPS’s success was their â€Å"efficiency†. According to Business Week â€Å"Every route is timed down to the traffic light. Each vehicle was engineered to exacting specifications, and the drivers endure a daily routine calibrated down to the minute†. UPS had their share of bad times with several major strikes resulting from changes in their labor practices and driver requirements. In the middle of 1997, 190,000 teamsters employed at UPS went on strike for 15 days before agreeing to a 5 years contract. The agreement increased wages and also added 10,000 new full-time jobs and promoting 10,000 part-time workers into full time positions. The strike was relevant because it cost UPS $700 million in lost revenue, resulting in less than 1% sales growth for 1996 and a decline in profits to $909 million from %1. 15 billion. For most of the companies’ existence, UPS stock was owned primarily by UPS’s managers, their families, former employees, or charitable foundations owned by UPS. The company would buy and sell shares at fair market value determined by the board of directors each quarter, but by the end of the 90’s having to deal with the big losses from the strike the company needed to add flexibility by traded their stocks publicly in order to pursue a more aggressive acquisition strategy. In November 1999, UPS initiated a two-for-one stock split; where the company exchanged each existing UPS share for two Class A shares. UPS was able to sell 109. 4 million newly created class B shares on the NYSE in an IPO that raised $5. 266 billion, net of issuance costs. UPS used the bulk of these proceeds to repurchase 68 million shares of the Class A stock. Class A shares were convertible to Class B shares, and could be traded or sold accordingly. Even though both shares of stock had the same economic interest in the company, Class A shares entitled holders to â€Å"ten† votes per share whereas Class B shareholders were only entitled to one vote. UPS was perceived as a slow and plodding until their stock split and IPO in 1999. Although UPS is much larger than FedEx, UPS chose not to compete directly in the overnight delivery market until 1982, largely because of the high cost of building an air fleet. But after going public UPS started an aggressive series of acquisitions, beginning with a Miami-based freight carrier operating in Latin America and a franchise based chain of stores that provided packing, shipping, and mail services called Mail Boxes Etc. later names UPS, with more than 4,300 domestic and international locations. Although the company traditionally has been the industry’s low cost provider, in recent years UPS had been heavily investing in information technology, aircraft, and facilities to support service innovations, maintaining quality and reducing costs. By 2003 UPS offered package delivery services throughout the United States, and in more than 200 countries and territories, and moved more than 13 million packages and such throughout its network daily. Domestic package operations accounted for 76% of revenues in 2002, international (15%), and nonpackage’s being (9%). In the U. S. it was estimated gross GDP was in excess of 6%. The company employed 360,000 people, (64% unionized), and owned 88,000 ground vehicles and 583 aircrafts. At the end of 2003, UPS reported assets, revenues, and profits of $28. 9 billion, $33. 4 billion, and $2. 9 billion, respectively.  UPS vs. FedEx Financial Analysis UPS’ s average days outstanding ratio has been increasing over the years and in 2003 it was 51. 6 days. FedEx’s has been constant over the past 12 years and in 2003 it was at 41. 54. It is extremely important for a company to keep a constant cash flow in a business, and to collect money from sales as quickly as they can, so they can reinvest it or purchase additional products. UPS’s total asset turnover ratio has been decreasing over the years, it was 1. 83 in 1992 and it was 1. 16 in 2003. FedEx’s total asset turnover ratio on the other hand has been increasing, from 1.38 in 1992 to 1. 64 in 1998 then down to 1. 46 in 2003. When comparing the two companies we can see that FedEx has been the best at generating more revenues per dollar of assets. UPS’s current ratio has been increasing over the years and it was at 1. 79 in 2003, similarly FedEx’s has been increasing reaching 1. 18 in 2003. Since both ratios are above 1 it indicated that both companies are capable of meeting their short-term payment obligations. However, UPS has a higher ratio, which indicates that it is the most efficient. UPS’s debt to equity ratio has been stable over the years and was 0.26 in 2003, while FedEx’s has been decreasing and it was 0. 28 in 2003. They are about the same, and the low ratio indicates that both companies are not highly leveraged and they are liquid, which is a positive sign for investors. UPS’s times interest earned ratio is high, 36. 41 in 2003, when compared to FedEx’s, which is 10. 51. This could indicate that UPS is paying down too much debt with earnings that could be used for company growth, or it means that it has undesirable lack of debt. UPS’s net profit margin has increased over the past couple of years, being at its highest in 2002 at 10.18%, and decreasing again to 8. 65% in 2003. FedEx’s net profit margin has been steadily increasing over the years and reaching 3. 69% in 2003. When comparing the two companies we are able to see that UPS has been more successful than FedEx, which could potentially indicate that they have higher share price as well as higher levels of profitability. The return on assets as well as the return on equity have been higher for UPS. ROA was 10. 44%, and ROE was 19. 51% in 2003. FedEx’s ROA and ROE have been increasing over the years; ROA was 6. 30% and ROE 11. 39% in 2003. This indicates that both companies have been efficiently managing their assets to generate earnings, however, when comparing the two, UPS has the higher ratio. UPS’s sales haven’t been constant over the past 12 years (92-03), the ratios showed variations from their highest at 10. 37%% to 0. 40%, and the overall ratio was 7. 32%. FedEx’s sales have been increasing, but also showed variations from 37. 79% to 3. 42%, and the overall sales ratio was 11. 53%. The average net income for the 12 years was 18. 83% for UPS and 35. 51% for FedEx, and the operating income was 12.35% for UPS and 13. 64% for FedEx. These growth ratios show that FedEx has outperformed UPS. The graphs bellow shows the growth comparison between the two companies: Performance Analysis In order to fully determine which company is for which type of investor, we must examine the competitive struggle between these two firms in the same industry. Traditionally the company that tends to have impeccable operational management garners strong financial returns. In line with this FedEx has the goal of producing â€Å"superior financial returns† and UPS follows a more â€Å"long-term competitive return†. If one were to compare the share prices of both companies, one can discern how much value the company has generated which is reflected on the stock prices. For example in 1992 UPS stock price was $9. 25/share but by 2003 the stock price increased tremendously to $74. 55/share. This is a tremendous leap in that cumulatively that is an increase of 706% stock value since 1992. FedEx followed a similar trend in that its stock price in 1992 was $10. 19/share, which by 2003 was $63. 98/share. That is a cumulative increase of 528% over this time span. Another thing to note is that UPS has been giving dividends from 1992 of $0. 25, which increased to $0. 92 by end of 2003. FedEx on the other hand issued no dividends since 1992 and only issued its first dividend in 2003 of $0. 20. When these two companies are indexed against the SP 500, we can see that both have outperformed the index. For comparison purposes the SP 500 returned 155. 20% from the time span of 1992-2003. But this is simply the compounded returns, when all adjustments are made net results of UPS and FedEx’s returns are as follows: United Parcel Services: 550.75% Federal Express: 372. 83% Economic Profit Analysis Economic Value Added is an estimate of a firm’s economic profit. In layman terms, it means the profit earned by a firm minus the cost of financing the cost of capital. For this scenario EVA is a great way to analyze how both UPS and FedEx have done over the time span. For UPS the EVA was -$70 million in 1992, which by the end of 2003 they convert ed to $1,195 million. In terms of cumulative appreciation, UPS accumulated $4,328 million in the 12-year time frame. FedEx on the other hand has had negative EVA every year from 1992 up until 2002. In 2003 FedEx had a positive annual EVA. However, cumulatively FedEx had an EVA of -$2,252 million. The results greatly reflect that UPS has a better EVA than FedEx. Return on Net Assets (RONA) is used to generate a longer-term perspective of a companys ability to create value; extraordinary expenses may be added back into the net income figure in order to determine the RONA. The RONA average for UPS from 1992 to end of 2003 was 13. 785% whereas the RONA for FedEx for the same time, averages 8. 308%. What this reflects is that UPS performs more than 4% greater in terms of returns in comparison to FedEx. MVA or Market Value Added is the difference between the current market value of a firm and the capital invested by investors. The higher the MVA, the better it is. A high MVA indicates the company has created substantial wealth for the shareholders. A negative MVA means that a company has destroyed wealth or value that was invested. UPS’s MVA went from $7,287 million in 1992 to $69,315 million by 2003. FedEx on the other hand went from an MVA of $625 million to $11,816 million from 1992 to end of 2003. This shows that UPS has a very large MVA, which dwarfs FedEx however in terms of percentage growth of MVA FedEx has come a long way. Outlook for the Future In terms of the courier industry the growth potential is present. Courier services will be required now and in the future, especially with a growing population and the higher demand for expedient methods of delivery. UPS and FedEx dominate the global courier services in which they each have their method of expertise. In terms of growth potential both FedEx and UPS compete heavily in the saturated U. S.market and UPS has a large presence in Europe, which it competes with the likes of DHL. However, the next potential for expansive growth is set to be for whichever can acquire the most market share from China. It is estimated by 2039 China will surpass the United States become the largest global economy; therefore, the potential for growth is very important in that geographic location. FedEx has the largest foreign presence in China, with 11 weekly flights and it serves over 220 Chinese cities. This is reflected by the fact that FedEx’s volume in china has grown by over 50% from 2003-2004.UPS, even though has a larger worldwide presence than its counterpart, FedEx, has lagged behind in China. UPS has half the weekly flights then China however, UPS has been active in China since 1988 and was the first carrier to offer non-stop services from China to the U. S. Nevertheless, UPS has been increasing its presence in China, serving nearly 200 cities and it is estimated that peak-season demand in the courier industry for UPS would exceed the capacity that UPS can handle. FedEx pioneered the customer logistical management and is perceived as innovative, entrepreneurial, and an operational l eader. FedEx also utilized COSMOS (Customer, Operations, Service, Master Online System), which transmitted data from package movement, customer pickups, invoices, and deliveries to central databases/hubs. UPS on the other hand was initially perceived as big, bureaucratic, and an industry follower, but they have since attempted to change that image by innovating and changing its whole logistics and supply chain management. UPS utilizes DIADs (Delivery Information Acquisition Device), which are scanners that delivery personnel use to scan barcodes and log signatures. Both companies have their platform being that of Customer-centric. They listen to their customers and adjust themselves to better cater to their customer base. Both companies for the most part are competitive in terms of price; however, UPS tends to be slightly more costly than FedEx. Both companies also focused greatly in reducing price and increasing efficiency. Overall both companies are great and both have generated tremendous wealth for their investors and both are desired by different types of investors. FedEx is a heavy growth company and surprisingly 70% of FedEx’s common shares were held by institutional investors. In terms of an analysis by Morgan Stanley’s J.J. Valentine FedEx mentions the various risks associated with the Chinese market that could stifle growth in China for FedEx; however, these are risks that can be addressed with partnerships between the Chinese government and the local population. Another analysis by the Value Line Investment Survey outlines that FedEx is poised to take advantage of the Chinese market an d the international market. Since FedEx has established a large presence in China along with its infrastructure already existing in the general location, FedEx has the highest growth potential with limited costs.UPS is the market leader in the America’s however; with the saturation of the U. S. and European markets UPS’s growth potential lies on how well it can harness the Far East. UPS is also a relatively an old company existing almost a century. It has an established base and consistent growth with overall growth being larger than its counterpart FedEx. UPS’s financials are also excellent however the question truly lies in how sustainable this is into the future. In terms of recommendation UPS is for investors that wish for steady stream of growth and highly recommended for those that are risk averse. But in terms of long-term growth potential FedEx is an excellent company to invest in. If it weren’t for institutional investors it would not own the majority of FedEx. The main mission of FedEx is to grow internationally by increasing the supply chain capabilities through e-commerce, technology and alliances. Also, the company continues to implement revenue enhancement and cost reduction programs to provide long-term revenue and profit growth and to reduce costs by taking initiatives such as Airport-to-airport transportation of Priority, Express and First-Class Mail for the U. S. Postal Service.

The Scarlet Letter - Punishment And Death Essays - Film,

The Scarlet Letter - Punishment and Death Hawthorne's The Scarlet Letter deals with many themes, among those including punishment and death. Utilizing the theme of punishment, the central character, Hester Prynne, was forced to wear an embroidered scarlet letter on "her bosom" for the rest of her life as a sign of her sin of adultery. This object; however, has the opposite affect as a punishment and as people of the community begin to forget the original significance of the letter it comes to bear a new meaning, able. In the thirteenth chapter of this book, Hawthorne comes out and in the third person states "the scarlet letter had not done its office." Hester has gone beyond the letter of the law and done everything asked of her. She becomes quite a popular seamstress, heralded all over the town of Boston for her work. She herself wears only drab clothing of ordinary clothing, punishing herself with humility. There is only one piece of clothing that she is forbidden to make, the wedding vail, it is assumed that she can not possibly represent the values of a marriage. It would be most improper to have one who has committed as sin as she had to be involved in the marital bonds of another couple. Nevertheless, she does her work dutifully and completely. She is emotionately worn out by all the work and penance for her sin. Midway through the novel she no longer appears as a hidden beauty. Hester now wears her hair in a cap, and the only effort of considerable worth is that which she expends in her teachings to Pearl. She has earned the towns people respect. People now regard the letter as representing the word "able." As the Reverend Dimmesdale refers to Pearl in his argument for allowing the child to remain with her mother, "God gave Pearl as a blessing and as a reminder of her sin." The girl herself is a much more considerable punishment to Hester then the letter "A" is. Pearl is the living symbol of her sin. All the evil and hate of this story is embodied in this little girl. Hawthorne raises the question of how Hester actually sees Pearl by referring to that "little, laughing image of a fiend" which appears to peep out of Pearl; "Whether it peeped or no, her mother so imagined it." She is a beautiful charismatic little child and thus a blessing, but the stress of Hester's environment twists and turns the actions of the girl into evil things. In that respect she is more of a punishment to Hester then a piece of cloth she must over her clothing. On her visit to Governor Bellingham's house to plead for Pearl's custody, Hester passes by a suit of armor in which the breast plate so magnifies the letter "A" she wore almost consuming her. In later chapters, after a meteorite appears above Boston, a sexton so wonders if it represented "Angel" coming from above. Ironically so, it was a fallen one coming down so. And so the letter "A" takes on a new meaning once again. In Chapter 13, Hester wonders whether it wouldn't be better if both she and Pearl were both dead. The mere fact that Hester can contemplate suicide indicates that "the scarlet letter had not done it's office", because suicide is an unpardonable sin in the Puritan faith. This fact in conjunction with what the scarlet letter was meant to be and was not as well as Pearl herself being quite a punishment in herself, discussed in the above paragraphs clearly supports my belief in the failure of the scarlet letter to do its work.