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Business news in brief

In the Region

Aramark Corp. profits plummet for the year

Aramark Corp., a Philadelphia food-service company, reported net income for the fiscal year ended Sept. 30 of $30.9 million, compared with $261 million in the previous 12-month period. Aramark said in a Securities and Exchange Commission filing that expenses related to its going-private transaction in January and higher interest costs were factors in the sharp decline in profit. The company's long-term debt ballooned to $5.8 billion in September from $1.8 billion the year before because of the leverage used by its new private-equity owners. Compensation for Aramark chairman and chief executive officer Joseph Neubauer totaled $8.38 million, including $2.26 million in legal fees related to his role in the buyout. Privately held Aramark still makes SEC filings because it has publicly held debt.

- Harold Brubaker

Advocates for poor protest bid to buy Commerce

A New York advocacy group for the poor filed a protest at the Federal Reserve against TD Bank Financial Group's plan to buy Commerce Bancorp Inc., Cherry Hill, for $8.5 billion. In a filing yesterday, Fair Finance Watch requested a public hearing on the merger, citing TD Bank's alleged discriminatory lending, funding of "fringe financiers" (such as pawnshops), and other issues. Neil Parmenter, senior vice president for corporate and public affairs at TD Banknorth, said the bank had not received the document from the organization. "I can assure you that TD Bank Financial Group and TD Banknorth are committed to complying with all laws and regulations and to giving back to communities," he said.

- Harold Brubaker

Penn Treaty gets more time for financial review

Penn Treaty American Corp. has received a 45-day trading extension from the New York Stock Exchange so that it can complete a review of its 2006 financial results. The Allentown insurance company is also assessing whether it needs to restate its fiscal 2003, 2004 and 2005 results and plans to reach a conclusion before or during the week of Jan. 7. Penn Treaty, which provides coverage for long-term care in nursing homes and assisted-living facilities, earlier received a three-month trading extension from NYSE through Jan. 2. Florida regulators suspended a subsidiary from operating in the state for at least one year starting in June after the company failed to file its audited financial results by June 1. Shares of the company closed up 10 cents at $6.49.

- AP


Legg Mason gives two money funds a cash infusion

Legg Mason Inc. pumped $1.12 billion into two non-U.S. cash funds to prevent losses, the biggest bailout by a money manager tied to asset-backed debt sold by structured investment vehicles, or SIVs. The move, along with an earlier cash infusion, will reduce earnings per share by 15 cents in the quarter ending Dec. 31, the Baltimore company said in a statement. Legg Mason, which has operations in Philadelphia, has provided $1.47 billion to support money funds and other cash-management portfolios since November. SIVs were popular investments for money funds looking to increase yields. The vehicles sold commercial paper or medium-term debt, some backed by subprime mortgages, that has plunged in value on fears that they will be hurt by rising home-loan defaults.

- Bloomberg News

Sallie Mae raises $3 billion to settle contracts

SLM Corp., the educational lender, raised at least $3 billion after increasing the size of equity financings needed to pay off derivatives contracts. Sallie Mae, as the Reston, Va., company is known, obtained at least $1 billion from selling preferred shares and $2 billion from common stock, according to regulatory filings. The company sold the stock to underwriters, for resale to the public at $19.65 per share. Sallie Mae will use $2 billion of the proceeds to settle a derivatives contract to buy back 44 million common shares, at a loss. Sallie Mae had agreed to buy that stock at certain times and prices, betting its worth would increase. Instead, the company lost $15.9 billion in market value from July 9 through Thursday, largely because of the collapse of a proposed $60-a-share buyout.

- Bloomberg News

Dubai World increases its share of MGM stock

Dubai World, the investment arm of the Dubai government, boosted its stake in MGM Mirage Inc. to 6.5 percent by making an additional purchase through Kirk Kerkorian's charity, according to a filing with the Securities and Exchange Commission. Cayman L.P., an investment group for the Dubai government, bought 5 million shares of the Las Vegas-based casino operator from the Lincy Foundation on Dec. 24 for $424 million, or $84.80 per share, the filing said. MGM Mirage stock closed up 81 cents at $85.06. The investment gives Dubai World ownership of approximately 19.5 million outstanding shares of MGM Mirage. The casino operator, whose properties include the Borgata in Atlantic City, had about 299.4 million shares outstanding as of Sept. 30, according to the filing.

- AP

Toyota to debut hybrid pickup at Detroit auto show

Toyota Motor Corp. plans to introduce a concept hybrid pickup truck featuring improved fuel economy and lower emissions at the 2008 North American International Auto Show in Detroit, the automaker said. The A-BAT concept vehicle is equipped with Hybrid Synergy Drive, Toyota's third-generation gas-electric hybrid powertrain technology, according to the company. Its trapezoidal profile was borrowed from the Prius, another hybrid Toyota vehicle. The four-passenger pickup features a four-foot bed, while a translucent roof panel slides open to allow for tall cargo inside the cab. The truck uses a unibody platform for improved handling and a smoother ride.

- AP

Macy's to close some stores, open others

Macy's Inc. will close nine stores that employ a total of about 900 people, the retailer said. In Ohio, Macy's is closing stores in Akron, Canton and North Randall. It also is closing stores in Indianapolis, Oklahoma City and Lake Charles, La. The remaining three stores are in Dallas, Houston and Riverdale, Utah. Macy's has faced disappointing sales and resistance from shoppers in some markets where the Macy's name replaced local favorites the retailer absorbed as part of its acquisition of May department stores. The company swung to a profit of $33 million in the third quarter in contrast to a slim loss the prior year. Macy's said yesterday that it expects to open five stores in 2008, and six to eight new locations are planned for 2009.

- AP

After flight cancellations, United looks at staffing

United Airlines, criticized by pilots for canceling hundreds of flights during the Christmas holidays after winter weather left crews out of position, said it was evaluating employment levels for next year. "To continue to improve our performance in 2008, we will maintain our focus on pilot staffing," chief operating officer Pete McDonald said in an e-mail to employees. United will benefit from new legislation that raises the mandatory retirement age for pilots to 65 from 60, McDonald said. United canceled an additional 327 flights, or about 9 percent of its 3,600 scheduled for yesterday, as a snowstorm blanketed its hubs in Chicago and Denver. The carrier cut service during the last week after poor weather kept planes and pilots from their scheduled routes.

- Bloomberg News