HP says discovered accounting "failures" at Autonomy unit

(Reuters) - Hewlett-Packard Co said on Tuesday it took an $8.8 billion charge related to its acquisition of software firm Autonomy, citing "serious accounting improprieties," as it swung to a fourth-quarter loss.

HP said personal computer sales shrank again and its quarterly revenue fell 6.7 percent.

The stock lost 11.8 percent to $11.73 in premarket trading.

The company, fresh off a nearly $11 billion charge last quarter for its EDS services division, said more than $5 billion of the Autonomy charge was tied to "improprieties, misrepresentation and disclosure failures" discovered after a whistleblower came forward.

HP said it has referred the matter to the U.S. Securities and Exchange Commission's enforcement division and the UK's Serious Fraud Office for civil and criminal investigation. It said it will take legal action to recoup "what we can for our shareholders."

The charge and the revenue miss were driving down shares, said Neil MacDonald, an analyst at Gartner.

"Earlier in the year when HP took a charge for EDS, the question we had was, 'When are you going to take the charge for Autonomy'? It was clear they had overpaid," MacDonald said. "At least they came clean about it."

The Silicon Valley technology company, in the midst of a multiyear turnaround plan, said the charge is linked to the "associated impact of those improprieties, failures and misrepresentations on the expected future financial performance of the Autonomy business over the long-term."

The rest of the Autonomy charge is related to the declining value of HP's stock and the difficulties of achieving anticipated synergies and market performance.

HP stock is down 48.4 percent year to date.

HP said the accounting issues occurred prior to its acquisition of Autonomy in 2011 for $11.5 billion.

It launched the internal investigation, which included an outside firm's forensic review, after a senior member of Autonomy came forward after founder Mike Lynch left. HP pushed out Lynch in May after its software division posted disappointing results.

Net revenue fell 6.7 percent to $29.96 billion for the fourth quarter ended October 31 from $32.12 billion a year earlier. Analysts, on average, expected $30.43 billion, according to Thomson Reuters I/B/E/S.

Revenue from all of its main business units fell, with the personal computer division recording the steepest drop at 14 percent.

HP reported a quarterly net loss of $6.85 billion, or $3.49 a share, versus a profit of $239 million, or 12 cents, a year earlier.

The sprawling company, which employs more than 300,000 people globally, is undergoing a restructuring aimed at focusing on enterprise services in the mold of International Business Machines Corp.

(Reporting by Poornima Gupta in San Francisco and Supantha Mukherjee in Bangalore; Editing by Saumyadeb Chakrabarty and Jeffrey Benkoe)

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Rutgers to announce its joining Big Ten

NEW YORK (AP) — Rutgers is leaving the Big East for the Big Ten and cashing in on the school's investment in a football program that only 10 years ago seemed incapable of competing at the highest level.

The school will make its decision official Tuesday at a news conference on its campus in Piscataway, N.J., with Big Ten Commissioner Jim Delany joined by Rutgers University President Robert Barchi and athletic director Tim Perenetti.

Rutgers will leave the Big East, where it has been competing since 1991. The move follows Maryland's announcement Monday that it was departing the Atlantic Coast Conference to join the Big Ten in 2014. Rutgers will be the Big Ten's 14th member.

Rutgers also plans to join its new conference in 2014, though the Big East requires 27 months' notification for departing members. The Scarlet Knights will have to negotiate a deal with the Big East to leave early.

Whenever Rutgers enters the Big Ten, it will be the culmination of one of the most remarkable turnarounds in college sports.

In 2002, the Scarlet Knights football team went 1-11 under second-year coach Greg Schiano, who then seemed like the latest coach incapable of reviving a program that had been the laughingstock of major college football for more than a decade.

However, the team made steady improvement on the field as the university made the huge financial commitments necessary to support a major college football program.

Facilities were upgraded, the on-campus stadium was expanded and as Schiano started to win, his salary began to rise into the millions. Not everyone on campus embraced the idea of turning Rutgers into a big-time football school, and it did come at a cost.

The expanded and renovated stadium cost of $102 million. The school had hoped to raise the money through private donors, but fell short. Rutgers scaled back plans for the expansion and issued bonds and borrowed money to complete the project.

In 2006, the school had to cut six varsity sports, including men's tennis and crew. As the football program has become a consistent winner — Rutgers has gone to a bowl six of the last seven years — the athletic department has received tens of millions in subsidies from the university.

Schiano left for the NFL last year, and Rutgers hired longtime assistant Kyle Flood, who has the Scarlet Knights poised to take make another big step in their development. No. 21 Rutgers (8-2) is in position to win its first Big East championship and go to a BCS game for the first time.

In the Big Ten, the amount of revenue Rutgers receives from the league's television and media deals should quadruple in the short-term and could be even more than that in years to come.

The Big Ten reportedly paid its members about $24 million dollars last year. The Big East's payout to football members last year was $6 million.

In exchange, the Big Ten gets a member in the largest media market in the country, and new presence along the East Coast, with Rutgers and Maryland as north and south bookends.

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Patrick Wilson, Rose Byrne to reprise roles for “Insidious” sequel

LOS ANGELES (TheWrap.com) – FilmDistrict, Alliance Films and Sony Pictures Worldwide Acquisitions will bring “Insidious Chapter 2,” the sequel to last year’s hit film “Insidious,” to U.S. theaters on August 30, 2013, the companies announced Monday.

Patrick Wilson, Rose Byrne, Lin Shaye and Ty Simpkins will reprise their roles in the film, which “Insidious” director James Wan will direct from a script written by Leigh Whannell who also wrote the first film.

Jason Blum, who produced “Insidious,” is producing the low-budget sequel through his Blumhouse Productions. Brian Kavanaugh Jones, Oren Peli, Steven Schneider, and Charles Layton are executive producing. Production on the sequel is set to begin on January 15 in Los Angeles.

Sony Pictures Worldwide Acquisitions acquired the U.S. rights to the film in conjunction with FilmDistrict. The film is being financed by Alliance Films. FilmDistrict will distribute the film theatrically in the United States, with Sony handling the majority of ancillary rights in the U.S.

Alliance Films will distribute in Canada, the U.K. (via its Momentum Pictures subsidiary) and Spain (via Aurum), and Sony Pictures Worldwide Acquisitions will distribute in all other international territories.

Peter Schlessel, FilmDistrict’s CEO, said: “We are all very excited to see the next chapter of James and Leigh’s vision of the Further. It’s great to be in business again with Blumhouse, Alliance and Sony.”

Movies News Headlines – Yahoo! News

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Elmo actor Kevin Clash resigns amid sex allegation

NEW YORK (AP) — Elmo puppeteer Kevin Clash has resigned from "Sesame Street" in the wake of an allegation that he had sex with an under-aged youth.

In its statement Tuesday, Sesame Workshop said "the controversy surrounding Kevin's personal life has become a distraction that none of us want," leading Clash to conclude "that he can no longer be effective in his job."

"This is a sad day for Sesame Street," the statement said.

As the announcement was made, a lawsuit was being filed in federal court in New York charging Clash with sexual abuse of a second youth. The lawsuit alleges that Cecil Singleton, then 15 and now an adult, was persuaded by Clash to meet for sexual encounters.

Clash, who had been on "Sesame Street" for 28 years, created the high-pitched voice and child-like persona for Elmo, a furry, red Muppet that became one of the most popular characters on the show and one of the company's most lucrative properties.

Clash's exit from Sesame Workshop followed a tumultuous week that began on Nov. 12 with a statement from the company that Clash had requested a leave of absence following the charge by a man in his early 20s that he had had a relationship with Clash when he was 16.

Clash denied the charge from that man, who has not been publicly identified, calling it "false and defamatory." Days later the man recanted his charge.

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Hostess, unions agree to mediation

Hostess Brands Inc agreed in court on Monday to enter private mediation with its lenders and leaders of a striking union to try to avert the liquidation of the maker of Twinkies snack cakes and Wonder Bread.

Hostess, its lenders and the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union agreed to mediation at the urging of Bankruptcy Judge Robert Drain of the Southern District of New York, who advised against a more expensive, public hearing regarding the company's liquidation.

"My desire to do this is prompted primarily by the potential loss of over 18,000 jobs as well as my belief that there is a possibility to resolve this matter," Drain said.

The 82-year-old Hostess was seeking permission to liquidate its business, claiming that its operations have been crippled by a bakers strike and that winding down is the best way to preserve its dwindling cash. Hostess suspended operations at all of its 33 plants across the United States last week as it moved to start selling assets.

Heather Lennox, a lawyer for Hostess, said it would be hard for Hostess to recover from the damage it sustained due to the strike even if an agreement was forthcoming. Yet following the hearing, Hostess Chief Executive Officer Gregory Rayburn told reporters that there was always a chance Hostess could be saved.

"I think we have to see what unfolds," Rayburn said. "My impression is that the judge wants to understand the parties' positions and some of their logic, but it doesn't change our financial position.

"I'm happy to have the help," he added, referring to Drain's mediation following a breakdown of communication between Hostess and the union. "Maybe the judge will help. But can I handicap how it's going to go? No way."

A lawyer for Hostess' creditors' committee declined to comment.

The court-sanctioned mediation could make both sides more willing to give, said Nick Kalm, a communications consultant specializing in labor relations.

"It makes it much more likely that the company will put forward something that is less draconian... and the union will take it. The union realizes they are out of options," said Kalm.

BEHIND CLOSED DOORS

The BCTGM called the strike on November 9 after Hostess sought and won court approval to impose wage and benefit cuts.

Unlike other unions representing workers at Hostess, the BCTGM did not contest Hostess's action -- which allowed it to reject a collective bargaining agreement and impose its offer.

Given the fact that the union did not fight Hostess's motion in court, Judge Drain said it was "somewhat unusual to say the least, and perhaps illogical" that the union would then strike against it.

"Its an odd approach," Drain said. "Before thousands of people are put out of work it would seem to me worthwhile for both the union and the debtors to explore why that happened."

Drain also questioned whether the union had held discussions with competitors or potential suitors about a shiftover of jobs, saying the union's response to Monday's motion implied that it sees "meaningful sales available out there beyond the piecemeal sales that this motion contemplates."

A lawyer for the union did not immediately return a phone call seeking comment on whether such discussions had taken place.

BUYERS MAY EMERGE

Analysts have said Hostess' brands, which also include Nature's Pride, Dolly Madison and Drakes, are expected to draw interest from rivals including Flowers Foods, Pepperidge Farm owner Campbell Soup Co and Mexico's Grupo Bimbo.

Brian Boyle, a food industry investment banker at D.A. Davidson & Co, said it was hard to gauge the value of the Hostess assets, given that there are a lot of plants that are old and inefficient.

"The other wild card is whether you're going to see different buyers emerge for different segments of the business. So Flowers Foods, for instance, might want the cake segment and Bimbo could want the bread piece. So it comes down to 'are the parts greater than the whole?'," Boyle said. "In either case, significant labor and benefits concessions will be required."

Private equity firm Metropolous & Co said on Friday it was interested in pursuing the company, and on Monday, Fortune reported that Sun Capital Partners was interested. Sun Capital did not return a call seeking comment.

The company did have a potential white knight at one point, according to Hostess. Last spring, an outside equity investor had made a viable proposal that would help the company reorganize, it said, but the Teamsters union refused to agree to changes to the pension program and the outside investor walked away.

The company spent the summer and fall negotiating with all of the 12 unions trying to find a common path to reorganization, and did gain certain agreements with the Teamsters and many of the other unions, though not the BCTGM. At the same time the company started putting together a liquidation plan.

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Father, daughter killed in Wisconsin plane crash

An Antioch man and his teenage daughter have been identified as the victims killed in a small plane crash in southern Wisconsin Sunday.

An Antioch man and his 14-year-old daughter were killed when their plane crashed as it approached a small airport just north of the Wisconsin-Illinois border, according to police and relatives.

The victims were identified by the family as Todd Parfitt, who just turned 50, and Nicole Parfitt, 14.

A single-engine Grumman plane registered to Parfitt crashed about 1:25 p.m. Sunday as it approached the airport in Burlington, Wis., about 20 miles north of the state line, officials said. Both victims were thrown from the plane, they said.

“The preliminary information is that it crashed while attempting to land,” said Lynn Lunsford, a spokesman for the Federal Aviation Administration.

Lunsford said the Burlington airport has no control tower, and the pilot was not in contact with air traffic controllers when the plane went down in a cornfield.

Investigators from the National Transportation Safety Board were at the airport today, according to Burlington Municipal Airport officials. The plane wreckage will be taken into a hanger so investigators can inspect it, an official said.

James McKay, superintendent of Community High School District 117, said Nicole was a ninth-grader at Antioch High School.

“She was a very active student. She was a member of the dance team. Many, many kids know her in other ways.”

Counselors are at the school today helping students grieve and cope with the news, he said.

A Facebook page was created Sunday in honor of Nicole.

"They may have not made it to the runway that they intended, but they did land safely in heaven," one message reads.

Bailey Walker, who called herself a best friend of Nicole, said in a post: "Nicole, I love you so much. I will never forget all of our inside jokes and all of the times you made me laugh. How much I loved hanging out with you and just talking to you when I was upset made me feel so much better. You just knew how to cheer people up and you were always such an amazing person."

chicagobreaking@tribune.com

Twitter: @ChicagoBreaking

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Cisco to buy cloud-networking start-up Meraki for $1.2 billion

(Reuters) - Networking equipment company Cisco Systems Inc said it will buy privately held cloud networking company Meraki for $1.2 billion in cash as part of its cloud and networking strategy.

Cisco said the acquisition of Meraki, which was founded in 2006 by members of MIT's Laboratory for Computer Science, is expected to close in the second quarter of Cisco's 2013 fiscal year and is subject to regulatory approval.

Cisco's second quarter runs until the end of January.

Meraki - funded by Sequoia Capital and Google Inc - offers Wi-Fi technology, switching, security and mobile device management from the cloud with a focus on mid-sized businesses.

"This is a very logical move for Cisco," said ZK research analyst Zeus Kerravala.

He said the deal will allow Cisco to offer alternative solutions to traditional Wi-Fi deployment models like smaller competitors, such as Aruba Networks and Ruckus Wireless, which debuted on Friday.

"Cisco didn't really have anything to counter that before," Kerravala noted.

Meraki's Chief Executive Sanjit Biswas said in a letter to employees posted on the company website that Cisco had approached the company several weeks ago.

The company's founders had at first rejected the offer in favor of continuing Meraki's strategy aimed at an initial public listing.

"After several weeks of consideration, we decided late last week that joining Cisco was the right path for Meraki," Biswas said.

He also said that Meraki had achieved a $100 million bookings run rate, grown to 330 employees and had a positive cash flow.

(Reporting by Nicola Leske, editing by Gary Crosse)

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Maryland leaving ACC to join Big Ten in 2014

NEW YORK (AP) — Maryland is joining the Big Ten.

The university is announcing its move from the Atlantic Coast Conference at a news conference Monday afternoon with school president Wallace D. Loh, Big Ten Commissioner Jim Delany and athletic director Kevin Anderson.

Maryland will become member of the Big Ten starting in 2014. Rutgers is expected follow suit by Tuesday, splitting from the Big East and making it an even 14 schools in the Big Ten.

In the world of conference realignment, Maryland's departure from the ACC qualifies as a shocker. The Terrapins were a charter member of the ACC, which was founded in 1953.

There was speculation last week that the Big Ten and Maryland were talking. On Saturday, it became clear the discussions were serious.

The addition of Maryland extends the Big Ten farther east and south than it ever has been, and gives the conference a presence in the major media market of Washington. D.C.

Rutgers, in New Brunswick, N.J., and about 40 miles south of New York City, gives the Big Ten a member in the country's largest media market.

For both schools, the move should come with a long-term financial gain. The Big Ten reportedly paid its members $24.6 million in shared television and media rights revenues this year.

There will be some financial matters to resolve in the short term though. After the ACC added Notre Dame as a member in all sports but football and hockey in September, the league voted to raise the exit fee to $50 million. Maryland was one of two schools that voted against the increased exit fee.

The Big East's exit fee is $10 million, but the league also requires a 27-month notification period for departing members. That means Rutgers will not be able to join the Big ten until 2015 without working out some kind of deal with the Big East.

Syracuse, Pittsburgh and West Virginia have all negotiated early withdrawals from the Big East in the past year.

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AP Sports Writer David Ginsburg in College Park, Md., contributed to this report.

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Metal singer Aaron Lewis finds second home in country music

NASHVILLE, Tennessee (Reuters) – Aaron Lewis stands as one of the more unusual crossovers into country music, but the singer of the metal band Staind believes it was a fit made in the cradle.

“It’s been quite the pleasant eclectic mix of tattoos and black eyeliner, and Stetsons, cowboy boots and big shiny buckles,” Lewis said in an interview after the release of his first full-length country studio album, “The Road,” this week.

Lewis, 40, was raised on what he terms his grandfather’s country music: Johnny Cash, Waylon Jennings, Charlie Daniels and George Jones. He collaborated with Daniels and Jones on his country EP, “Town Line,” released last year.

This made the transition from the angst-ridden world of metal to the laid-back country scene an easy step for him, but perhaps not so much for his head-banging fans.

“A few fans are really having a hard time with it,” Lewis said. “I can’t make everyone happy. Music is about making me happy first. For those who wish I would stick with Staind, they’ll get what they want, too.”

Lewis, who sold seven studio albums over a 17-year career with Staind, says he has two musical careers because he is “creatively bipolar” and suffers from attention deficit disorder.

“I need to switch it up a little bit,” he said. “It’s kind of nice to write a song about taking my daughters to the beach instead (of) about something that’s tearing me apart from the inside.”

For Lewis, each song on “The Road” is the opportunity to explore his creativity in music, while winding down a road filled with new country listeners and taking Staind fans along for the ride.

“The Road” includes “Forever,” a thoughtful song of life on the road, and “Endless Summer,” a simple track about digging up clams and casting for striped bass with his daughters.

“If we catch a keeper we throw it on the grill,” he says. “The beauty of the adventure that I’m on now is I can write songs about stuff like that. I could never bring a song like that to the table for Staind.”

He describes writing “Endless Summer” as a “refreshing and a nice change” from his metal past.

“I remember having a big smile on my face the whole time I was writing it,” he said. “In the past, what’s usually coming up for lyrics is not smiley material. The song wrote itself in 10 minutes.”

In contrast, “Party in Hell,” which has fans up and dancing, was the last song Lewis wrote for the album and was inspired by a stint in Las Vegas.

“Las Vegas really is, in a metaphorical sense, a party in hell; you can get into anything you want to,” he said. “It was like well, ‘OK, I’m going to hell, who else is going to be there? We might as well have a party with it.’”

SAME PROCESS

His previous country EP, “Town Line,” featured the gold-selling single “Country Boy,” a collaboration with Daniels and Jones that hit the top of the “Billboard” album charts and topped off at No. 7 on the Top 200.

“That’s crazy, right?” Lewis asks, shaking his head. “It was pretty amazing for me, pretty surreal. I was actually in the studio with Charlie, which was a lot of fun. We have become good friends.”

The writing process for country or rock is the same, according to Lewis.

“The music is always first, then the melody, and the lyrics third,” he said. “I need the music to know what the landscape is that I’m singing over, and I need the melody to fit the words in, and then the words come last.”

But the lyrics do not come while he is writing on a piece of paper. “They come with me standing in front of a microphone with the song playing in the background and singing,” he said. “It’s total improv, right off the cuff.”

As with recording, Lewis does not approach a rock performance differently from a country performance.

“I go out on stage and perform those songs I recorded to the best of my ability to sound just like the recording,” he said. “I have always tried to approach every show like it’s the only show that I have. That’s kind of how I’ve gone about this crazy career I’ve had now coming up on 15 years.”

(Reporting by Vernell Hackett; Editing by Christine Kearney and Lisa Von Ahn)

Music News Headlines – Yahoo! News

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EU drug regulator OKs Novartis' meningitis B shot

LONDON (AP) — Europe's top drug regulator has recommended approval for the first vaccine against meningitis B, made by Novartis AG.

There are five types of bacterial meningitis. While vaccines exist to protect against the other four, none has previously been licensed for type B meningitis. In Europe, type B is the most common, causing 3,000 to 5,000 cases every year.

Meningitis mainly affects infants and children. It kills about 8 percent of patients and leaves others with lifelong consequences such as brain damage.

In a statement on Friday, Andrin Oswald of Novartis said he is "proud of the major advance" the company has made in developing its vaccine Bexsero. It is aimed at children over two months of age, and Novartis is hoping countries will include the shot among the routine ones for childhood diseases such as measles.

Novartis said the immunization has had side effects such as fever and redness at the injection site.

Recommendations from the European Medicines Agency are usually adopted by the European Commission. Novartis also is seeking to test the vaccine in the U.S.

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