HSBC to pay record $1.9B fine

British-owned bank HSBC is paying $1.9B to settle a US money-laundering probe. The bank was investigated for involvement in the transfer of funds from Mexican drug cartels and sanctioned nations like Iran. (Dec. 11)

HSBC has agreed to pay a record $1.92 billion fine to settle a multi-year probe by U.S. prosecutors, who accused Europe's biggest bank of failing to enforce rules designed to prevent the laundering of criminal cash.

The U.S. Justice Department on Tuesday charged the bank with failing to maintain an effective program against money laundering and conduct due diligence on certain accounts.

In documents filed in federal court in Brooklyn, it also charged the bank with violating sanctions laws by doing business with Iran, Libya, Sudan, Burma and Cuba.

HSBC Holdings Plc admitted to a breakdown of controls and apologised for its conduct.

"We accept responsibility for our past mistakes. We have said we are profoundly sorry for them, and we do so again. The HSBC of today is a fundamentally different organisation from the one that made those mistakes," said Chief Executive Stuart Gulliver.

"Over the last two years, under new senior leadership, we have been taking concrete steps to put right what went wrong and to participate actively with government authorities in bringing to light and addressing these matters."

The bank agreed to forfeit $1.256 billion and retain a compliance monitor to resolve the charges through a deferred-prosecution agreement.

The settlement offers new information about failures at HSBC to police transactions linked to Mexico, details of which were reported this summer in a sweeping U.S. Senate probe.

The Senate panel alleged that HSBC failed to maintain controls designed to prevent money laundering by drug cartels, terrorists and tax cheats, when acting as a financier to clients routing funds from places including Mexico, Iran and Syria.

The bank was unable to properly monitor $15 billion in bulk cash transactions between mid-2006 and mid-2009, and had inadequate staffing and high turnover in its compliance units, the Senate panel's July report said.

HSBC on Tuesday said it expected to also reach a settlement with British watchdog the Financial Services Authority. The FSA declined to comment.

U.S. and European banks have now agreed to settlements with U.S. regulators totalling some $5 billion in recent years on charges they violated U.S. sanctions and failed to police potentially illicit transactions.

No bank or bank executives, however, have been indicted, as prosecutors have instead used deferred prosecutions - under which criminal charges against a firm are set aside if it agrees to conditions such as paying fines and changing behaviour.

HSBC's settlement also includes agreements or consent orders with the Manhattan district attorney, the Federal Reserve and three U.S. Treasury Department units: the Office of Foreign Assets Control, the Comptroller of the Currency and the Financial Crimes Enforcement Network.

HSBC said it would pay $1.921 billion, continue to cooperate fully with regulatory and law enforcement authorities, and take further action to strengthen its compliance policies and procedures. U.S. prosecutors have agreed to defer or forego prosecution.

The settlement is the third time in a decade that HSBC has been penalized for lax controls and ordered by U.S. authorities to better monitor suspicious transactions. Directives by regulators to improve oversight came in 2003 and again in 2010.

Last month, HSBC told investors it had set aside $1.5 billion to cover fines or penalties stemming from the inquiry and warned that costs could be significantly higher.

Analyst Jim Antos of Mizuho Securities said the settlement costs were "trivial" in terms of the company's book value.

"But in terms of real cash terms, that's a huge fine to pay," said Antos, who rates HSBC a "buy".

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IHSA rules Mooseheart basketball players eligible to play

Mooseheart High School head basketball coach Ron Ahrens gives his team a pregame talk after the Illinois High School Association determined that three Sudanese athletes on the team are eligible to play. (Scott Strazzante/Chicago Tribune)

The Illinois High School Association has determined that three Sudanese athletes for Mooseheart High School are eligible to play, but the IHSA also sanctioned the school.

The state athletic governing body's executive director on Nov. 29 deemed Mangisto Deng, Akim Nyang and Makur Puou — all 6 feet, 7 inches and taller — ineligible to play for Mooseheart High School. The IHSA board reviewed the case and found them eligible today, the board president said this evening.

After nearly four hours of deliberation, the IHSA board voted unanimously to declare the students eligible.

The decision reversed IHSA Executive Director Marty Hickman's ruling last month that barred the boys from playing.

But the board also sanctioned Mooseheart by placing it on probation and barring it from participating in the 2013 state basketball tournament until school officials institute training and compliance measures to ensure that the program does not run afoul of recruiting rules in the future, and severs contact with a placement organization at the center of the controversy, African Hoop Opportunities Providing an Education, or AHOPE.

Board President Dan Klett was blunt about the IHSA's view of AHOPE.

When asked what he would say to any other school who might use AHOPE to find basketball players, Klett said, "Don't. We don't believe they are a quality organization."

Klett said AHOPE used the students as pawns, and said Mooseheart didn't do enough to make sure they were complying with IHSA rules.

Mooseheart engaged in recruiting the three basketball players and a fourth Sudanese teen who is a talented cross-country runner for athletic purposes, Hickman had said. IHSA bylaws prohibit athletic recruitment.

Mooseheart, a 99-year-old residential and educational institution for children from unstable environments, disputed Hickman's decision and won a temporary reprieve Tuesday in Kane County Court.

Judge David Akemann granted Mooseheart's request to allow the boys to play until the IHSA board of directors reviewed the case.

Attorneys for the "child city" contended it told the organization placing the boys that Mooseheart would accept Sudanese children regardless of their athletic prowess.

The attorneys also noted that Mooseheart had no contact with the boys until they arrived on its bucolic, 1,000-acre campus in Batavia in May 2011, then waited a full year — at the IHSA's direction — before allowing the teens to compete.

But IHSA attorney David J. Bressler noted that the placement organization specifies that it works with athletes exclusively and that Mooseheart basketball coach Ron Ahrens deliberately called the organization, African Hoop Opportunities Providing an Education, seeking basketball players.

The IHSA board considered Mooseheart's case in a meeting that started about 1 p.m Monday at the organization's Bloomington office.

tgregory@tribune.com

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Massive HP conference draws 10,000 attendees to ogle products, speakers, presentations

By Suzy Hansen

More than 10,000 customers, partners and attendees flocked to the Hewlett-Packard Discover conference in Frankfurt, Germany, this week to learn about HP's latest products, exchange ideas, swap business cards and basically examine whether HP can improve the way their companies are run. The event was held at Messe Frankfurt, one of the world's largest trade exhibition sites.

CEO Meg Whitman acknowledged in her speech on Tuesday that HP has gone through some rough times this past year. HP's stock price has been nearly halved during her tenure. Whitman, however, pointed out that HP has $120 billion in revenue and is the 10th-largest company in the United States. In Q4, HP has generated $4.1 billion in cash flow.

"We are the No. 1 or No. 2 provider in almost every market," Whitman told the crowd in Frankfurt.

Whitman emphasized  executives' increasing concerns about security and said that it will be addressed by "a new approach": HP's security portfolio, with Autonomy and Vertica, which helps "analyze and understand the context of these events." Executive Vice President of Enterprise Dave Donatelli spoke about converged infrastructure, or bringing together server, network and storage; their software-defined data centers; and their new servers, which "change the way servers have been defined." George Kadifa, executive vice president of software, said 94 of the top 100 companies use HP software. HP is the sixth-largest software company in the world, with 16,000 employees in 70 countries, Kadifa added.

Also at the conference was Jeffrey Katzenberg, CEO of DreamWorks and an old friend of Whitman's from their Disney days, who roused the crowd with a fun speech about his long relationship with HP. Katzenberg showed an old video of himself onstage with a lion, which nearly mauled him. This time, he appeared onstage with a guy in a lion suit. The lesson was to learn from past mistakes and move on.

"If I am smart enough to say 'scalable multicorps processing,' I am smart enough to not put myself onstage with a real lion again," he joked.

The Discover conference is a key vehicle for HP to show off products it's offering in the coming year. Among them were the latest ProLiant and Integrity servers, the 3PAR StoreServ 7000 and the StoreAll and StoreOnce storage systems. At the HP Labs section of the conference, attendees could learn about the cloud infrastructure or test HP's new ElitePad 900.

Throughout the three-day event, which saw attendance grow by 30 percent this year, attendees wandered the enormous halls, milling around displays, watching videos, listening to speeches and participating in workshops. People gathered on clustered couches and chatted with new acquaintances, frequently stopping to plug in their various devices and recharge themselves with coffee. With people coming from all over the world, you could hear many languages spoken, from Arabic to French to the most bewildering of them all: the language of technology. Despite the large crowds, it was hard not to notice there were very few women among the thousands in attendance. In fact, when asked about this phenomenon, one female HP employee said, "Trust me, you aren't the first person who has come up to me asking about this."

Indeed, the Discover conference was like a forest of men in suits. The few women stood out like rays of sunlight. 

Regardless of their presence at this conference, women are making big strides in information technology. Among the leaders are HP CEO Whitman, who also led eBay; Carly Fiorina, who ran HP before Whitman; Yahoo! CEO Marissa Mayer; and Facebook COO Sheryl Sandberg. Were the women at the Discover conference surprised by the low female turnout?

"No, for IT this is standard," said Stefanie, a 30-year-old product manager from Germany. "Many are afraid of all the technical stuff, and you have to prove that you are capable of it. You get more women in retail and distribution but not in high-tech areas, at least not in Europe. In America there are more women in management positions and in general."

Americans might assume that Europe, with its generous social programs that include free daycare, enables more women to ascend the corporate ladder. But that still doesn't mean that a woman trying to balance a high-tech career and a family is always accepted in European society.

"There is still a lot of emphasis on the family," Stefanie said. "It's easier to move up in the U.S., where there is a culture of 'having it all.' It's quite a fight to get there here."

Still, the IT industry might seem inhospitable to women. Could this male-dominated profession be male-dominant because women have a hard time breaking in?

Stefanie disagreed. "No, they actually like working with women," she said. "They want to."

One male conference attendee, who asked not to be named, was less certain.

"There's a lot of ego and testosterone," he said. "It can't be easy" for women.

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Brady throws 3 TDs, Pats lead Texans 21-0 at half

FOXBOROUGH, Mass. (AP) — Tom Brady stunned the mistake-prone Houston Texans with touchdown passes on his first three possessions and the New England Patriots led the team with the NFL's best record 21-0 at halftime on Monday night.

Taking advantage of disorganization and poor coverage by the Texans, Brady hit Aaron Hernandez with a 7-yard scoring pass, Brandon Lloyd with a 37-yarder and Hernandez again with a 4-yard toss 4 minutes into the second quarter.

The misery continued for the Texans when they went for it on fourth-and-5 at the Patriots 33, but Matt Schaub's incompletion gave New England the ball with 4:44 left in the half. The Patriots stopped the Texans on fourth down again 1:52 before intermission.

For the first 30 minutes, the much-hyped matchup between the Texans (11-1) and the Patriots (9-3) was a mismatch.

Brady finished the half 13 for 19 for 165 yards and threw a scoring pass for the 45th straight game, the third-longest streak of all-time. Schaub was 12 for 23 for 159 yards

The Texans entered as the NFL's only unbeaten team on the road at 6-0. The Patriots haven't lost at home in December since 2002.

The Texans hurt themselves with an illegal formation penalty that wiped out Arian Foster's 11-yard run on the first offensive play of the game, a defensive holding penalty against Brandon Harris that gave the Patriots a first down at the Houston 29 and an interception by Devin McCourty on Schaub's pass into the end zone.

The Patriots scored on their first possession after a 31-yard punt return by Wes Welker, replacing the injured Julian Edelman, set them up at their 44-yard line for their first series.

Stevan Ridley ran for 18 yards on the first three plays for a first down at the Houston 38. After an incompletion, Harris was called for defensive holding on third-and-6, giving the Patriots a first down. Brady then completed a 25-yard pass to Welker, his 107th consecutive game with a reception.

And two plays later, Brady found Hernandez for his 7-yard scoring pass on the left side.

Schaub then led the Texans to a second-and-8 at the Patriots 21. But when he tried to throw down the middle into double coverage, McCourty picked the ball off and returned it 19 yards, another takeaway by the team that leads the NFL in turnover differential.

That gave Brady the ball at his 18 and he covered the next 82 yards in just 2 minutes, 41 seconds. After an incompletion and a run for no yards by Ridley, Brady completed four consecutive passes. On the last one, Lloyd sprinted away from cornerback Johnathan Joseph, who returned after missing two games with a hamstring injury, and was wide open as he caught the touchdown pass cutting from the right side to the left.

On his second touchdown catch, Hernandez took advantage of a mixup in the Houston secondary and was open on the left side of the end zone, capping an eight-play, 70-yard drive.

The game matched a team with five Super Bowl appearances and three championships in the past 11 seasons against one that reached the playoffs last season for the first time since it began play in 2002.

There are plenty of similarities between the teams.

Both are on six-game winning streaks and are the highest-scoring teams in the NFL with the Patriots averaging 35.8 points per game and the Texans 29.3.

The Patriots have clinched the AFC East, while the Texans have locked up a playoff berth in the AFC South but have two games left with the Indianapolis Colts (9-4), who are second in the division.

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Online: http://pro32.ap.org/poll and http://twitter.com/AP_NFL

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Surprise: New insurance fee in health overhaul law

WASHINGTON (AP) — Your medical plan is facing an unexpected expense, so you probably are, too. It's a new, $63-per-head fee to cushion the cost of covering people with pre-existing conditions under President Barack Obama's health care overhaul.

The charge, buried in a recent regulation, works out to tens of millions of dollars for the largest companies, employers say. Most of that is likely to be passed on to workers.

Employee benefits lawyer Chantel Sheaks calls it a "sleeper issue" with significant financial consequences, particularly for large employers.

"Especially at a time when we are facing economic uncertainty, (companies will) be hit with a multi-million dollar assessment without getting anything back for it," said Sheaks, a principal at Buck Consultants, a Xerox subsidiary.

Based on figures provided in the regulation, employer and individual health plans covering an estimated 190 million Americans could owe the per-person fee.

The Obama administration says it is a temporary assessment levied for three years starting in 2014, designed to raise $25 billion. It starts at $63 and then declines.

Most of the money will go into a fund administered by the Health and Human Services Department. It will be used to cushion health insurance companies from the initial hard-to-predict costs of covering uninsured people with medical problems. Under the law, insurers will be forbidden from turning away the sick as of Jan. 1, 2014.

The program "is intended to help millions of Americans purchase affordable health insurance, reduce unreimbursed usage of hospital and other medical facilities by the uninsured and thereby lower medical expenses and premiums for all," the Obama administration says in the regulation. An accompanying media fact sheet issued Nov. 30 referred to "contributions" without detailing the total cost and scope of the program.

Of the total pot, $5 billion will go directly to the U.S. Treasury, apparently to offset the cost of shoring up employer-sponsored coverage for early retirees.

The $25 billion fee is part of a bigger package of taxes and fees to finance Obama's expansion of coverage to the uninsured. It all comes to about $700 billion over 10 years, and includes higher Medicare taxes effective this Jan. 1 on individuals making more than $200,000 per year or couples making more than $250,000. People above those threshold amounts also face an additional 3.8 percent tax on their investment income.

But the insurance fee had been overlooked as employers focused on other costs in the law, including fines for medium and large firms that don't provide coverage.

"This kind of came out of the blue and was a surprisingly large amount," said Gretchen Young, senior vice president for health policy at the ERISA Industry Committee, a group that represents large employers on benefits issues.

Word started getting out in the spring, said Young, but hard cost estimates surfaced only recently with the new regulation. It set the per capita rate at $5.25 per month, which works out to $63 a year.

America's Health Insurance Plans, the major industry trade group for health insurers, says the fund is an important program that will help stabilize the market and mitigate cost increases for consumers as the changes in Obama's law take effect.

But employers already offering coverage to their workers don't see why they have to pony up for the stabilization fund, which mainly helps the individual insurance market. The redistribution puts the biggest companies on the hook for tens of millions of dollars.

"It just adds on to everything else that is expected to increase health care costs," said economist Paul Fronstin of the nonprofit Employee Benefit Research Institute.

The fee will be assessed on all "major medical" insurance plans, including those provided by employers and those purchased individually by consumers. Large employers will owe the fee directly. That's because major companies usually pay upfront for most of the health care costs of their employees. It may not be apparent to workers, but the insurance company they deal with is basically an agent administering the plan for their employer.

The fee will total $12 billion in 2014, $8 billion in 2015 and $5 billion in 2016. That means the per-head assessment would be smaller each year, around $40 in 2015 instead of $63.

It will phase out completely in 2017 — unless Congress, with lawmakers searching everywhere for revenue to reduce federal deficits — decides to extend it.

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Luke Bryan cleans up at ACAs with 9 awards

Luke Bryan didn't want the American Country Awards to end.

He cleaned up during the fan-voted show, earning nine awards, including artist and album of the year. His smash hit "I Don't Want This Night To End" was named single and music video of the year.

Miranda Lambert took home the second most guitar trophies with three. Jason Aldean was named touring artist of the year. Carrie Underwood won female artist of the year, and a tearful Lauren Alaina won new artist of the year.

Bryan, Aldean, Keith Urban, Lady Antebellum and Trace Adkins with Lynyrd Skynrd were among the high-energy performances.

The third annual ACAs were held at Mandalay Bay in Las Vegas Monday night.

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Online: http://www.theACAs.com

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Follow http://www.twitter.com/AP_Country for the latest country music news from The Associated Press.

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'Dollar Menu' sparks McDonald's rebound

McDonald's took Wall Street by surprise Monday morning, with a November same-store sales report that beat expectations and showed particular strength in the U.S. business.

The news follows a weak performance in October that had some investors speculating about the future of the world's largest restaurant company.

The Oak Brook-based burger giant reported U.S. same-store sales up 2.5 percent on the strength of its breakfast business, value offerings, beverages and limited-time offers like the cheddar bacon onion sandwich. In Europe, same-store sales grew 1.4 percent, and 0.6 percent in the chain's Asia/Pacific, Middle East and Africa division.

Overall, same-store sales increased 2.4 percent, beating various expectations for a roughly flat performance.

McDonald's has taken a tough stance on slipping U.S. sales as revived rivals like Wendy's and Burger King crank out new premium and value products. Days after releasing a report that showed October's rare drop in monthly same-store sales, McDonald's said its U.S. president, Jan Fields, had resigned and would be replaced by Jeff Stratton, who had been the company's global restaurant officer.

"We are strengthening our focus on the global priorities that are most impactful to our customers — optimizing our menu, modernizing the customer experience and broadening accessibility to our brand to move our business forward," McDonald's CEO Don Thompson said in a statement.

While the sales report is likely to be a boost for the fast-food chain, investors don't expect company performance to return to normal levels until early 2013.

"One month does not a trend make … but it's a nice sign to see them rebound after a horrible October," ITG Investment Research analyst Steve West said.

Analysts expect volatile industry sales in the coming quarters as countries around the world grapple with economic woes and high unemployment. Profits could get squeezed as diners shop around for deals and restaurants respond by keeping prices down.

"We are concerned about the margin outlook in this more promotional environment," said Lazard Capital Markets analyst Matthew DiFrisco.

McDonald's "ramped up its value messaging, focusing heavily on the Dollar Menu to help drive traffic," Jefferies & Co restaurant analyst Andy Barish said in a research note.

The company has been promoting both the Dollar Menu and its Extra Value Menu, which includes offerings like 20 Chicken McNuggets for $4.99, to lure diners.

Baird analyst David Tarantino raised his fourth-quarter earnings estimate by a penny per share Monday morning following the sales announcement. He wrote that while company performance "could remain soft" through the first quarter, "the November sales report supports our thesis that McDonald's can achieve better performance in 2013 as a whole, with results aided by planned initiatives (including increased emphasis on value plus premium offerings across markets), fewer cost pressures, and less negative currency translation."

McDonald's shares closed up 93 cents, or 1 percent, at $89.41.

Reuters contributed.

eyork@tribune.com

Twitter @emilyyork

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Mexican-American singer Jenni Rivera feared dead in plane crash

The wreckage of a small plane believed to be carrying Mexican-American music superstar Jenni Rivera was found in northern Mexico on Sunday and there were no survivors, authorities said.

Transportation and Communications Minister Gerardo Ruiz Esparza said "everything points toward" the wreckage belonging to the plane carrying Rivera and six other people to Toluca, outside Mexico City, from Monterrey, where the singer who has sold 15 million records had just given a concert.

"There is nothing recognizable, neither material nor human" in the wreckage found in the state of Nuevo Leon, Ruiz Esparza told the Televisa network. The impact was so powerful that the remains of the plane "are scattered over an area of 250 to 300 meters. It is almost unrecognizable."

No cause was given for the plane's crash, but its wreckage was found near the town of Iturbide in Mexico's Sierra Madre Oriental, where the terrain is very rough.

The Learjet 25, number N345MC, took off from Monterrey at 3:30 a.m. local time and was reported missing about 10 minutes later. It was registered to Starwood Management of Las Vegas, Nevada, according to FAA records. It was built in 1969 and had a current registration through 2015.

Media and celebrities in Mexico sent condolences to Rivera's family, but authorities still had not confirmed that she was aboard the plane and said there will be an investigation to identify the remains found.

"My friend! Why? There is no consolation. God, please help me!" said Mexican pop singer Paulina Rubio on her official Twitter account. Singer Miguel Bose, who appears on the Mexican show "The Mexican Voice" along with Rivera, wrote on his Twitter account: "My dear Jenni, you will always be in my heart. Forever. I love you."

Also believed aboard the plane were her publicist, Arturo Rivera, her lawyer, makeup artist and the flight crew.

The 43-year-old Rivera who was born and raised in Long Beach, California, is one of the biggest stars of the Mexican regional style known as grupero music, which is influenced by the norteno, cumbia and ranchero styles.

Though drug trafficking was the theme of some of her songs, she was not considered a singer of "narco corridos," or ballads glorifying drug lords like other groups, such as Los Tigres del Norte. She was better known for singing about her troubles in love and disdain for men.

The so-called "Diva de la Banda" was beloved by fans on both sides of the border for songs such as "De Contrabando" and "La Gran Senora."

Her parents were Mexicans who had migrated to the United States. Two of her five brothers, Lupillo and Juan Rivera, are also well-known singers of grupero music.

Although the she studied business administration, her passion for music was always present.

She formally debuted on the music scene in 1995 with the release of her album "Chacalosa". Due to its success, she recorded two more independent albums, "We Are Rivera" and "Farewell to Selena," a tribute album to slain singer Selena that helped expand her following.

At the end of the 1990s, Rivera was signed by Sony Music and released two more albums. But widespread success came for her when she joined Fonovisa and released her 2005 album titled "Partier, Rebellious and Daring."

She recently won two Billboard Mexican Music Awards: Female Artist of the Year and Banda Album of the Year for "Joyas prestadas: Banda." She was nominated to the Latin Grammy in 2002, 2008 and 2011.

Besides being a singer, she is also a businesswoman and actress, appearing in the indie film Filly Brown, which was shown at the Sundance Film Festival, as the incarcerated mother of Filly Brown.

She was filming the third season of "I love Jenni," which followed her as she shared special moments with her children and as she toured through Mexico and the United States. She also has the reality shows: "Jenni Rivera Presents: Chiquis and Raq-C" and her daughter's "Chiquis 'n Control."

Controversy often surrounded Rivera.

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In giant "garage sale", Japan's TV giants hawk $3 billion of assets

TOKYO (Reuters) - Panasonic Corp, Japan's struggling maker of Viera brand TVs, owns more than 10 million square meters of office and factory space, dormitories for its workers and sports facilities for its rugby, baseball and women's athletics teams.

As it battles for Christmas shoppers' wallets in the year-end holiday season, the sprawling electronics conglomerate is also seeking buyers for some of those properties to trim its fixed costs and improve cashflow at a time of intense competition, particularly from South Korean rivals such as Samsung Electronics Co.

Japan's other troubled TV makers, Sony Corp and Sharp Corp, are also selling buildings and businesses in a giant 'garage sale' that could raise a combined $3 billion.

Panasonic plans to raise $1.34 billion from offloading property and shares in other Japanese companies by end-March, the group's chief financial officer Hideaki Kawai told Reuters.

"We have a lot of land and buildings in Japan and overseas," he said in an interview at the company's head office in Osaka, in western Japan. He declined to list which properties would go on the block, but said most are in Japan.

Included is a 24-storey central Tokyo block - built in 2003 with more than 47,300 square meters and housing 2,000 Panasonic workers - a source familiar with the plan told Reuters.

Kawai added that Panasonic would raise about a quarter of the sell-off funds by getting rid of shares it owns in other companies - a common practice of cross-shareholdings in Japan.

The proceeds would help bolster free cashflow to 200 billion yen ($2.43 billion) for the business year to March, Kawai said, and allow Panasonic to reduce its debt and maintain its crucial research and development effort as it revamps its business portfolio.

It will sell more assets in the year starting in April if cashflow dips below 200 billion yen, Kawai added. Panasonic President Kazuhiro Tsuga has promised to shut or sell businesses operating at below a 5 percent margin. Those sales could start as soon as April.

Panasonic's fixed assets of $21 billion are around 30 percent more than those of Apple Inc, and are almost double the company's market value. The company, founded almost a century ago as a small electrical extension socket maker, trades at around half its book value - which includes intangible assets such as patents. Sony trades at 39 percent of book, Sharp at 30 percent.

The fixed assets - buildings, land and machinery - of the three companies that were not so long ago a byword for innovation in household gadgetry total around $42 billion, while their combined market value is $24 billion.

CASHFLOW IS KING

The three firms have been downgraded by credit ratings agencies, making it tougher to raise funding on capital markets, and making asset sales more urgent.

Selling assets "is good in terms of their credit ratings because, for all three, it will lower fixed costs and they can reduce their capex requirements. Eventually, this could improve operating margins and, more importantly, cashflow," said Alvin Lim, an analyst at Fitch Ratings in Seoul.

Fitch, which makes its ratings without input from company management, last month cut Panasonic to BB and Sony to BB minus, the first time one of the major agencies has relegated either company to junk status. Sharp is ranked B minus, adding to its borrowing costs.

"We rate Panasonic as investment grade, and it should have various funding options. Selling assets it can do without, to avoid raising additional borrowing, can be an option," said Osamu Kobayashi, an analyst at Standard & Poor's.

While Korean rivals have also benefited from a weaker local currency, data from the Japan Electronics and Information Technology Industries Association shows that Japanese production of consumer electronic equipment fell to just above $15 billion last year from more than $19 billion a decade ago. Output in September was just $980 million, half last year's level.

"The gap with Korean makers seems to be widening. It's going to be very difficult for them to regain their top-tier position," said Fitch's Lim.

As the three Japanese firms, all under new leadership, have sketched out restructuring plans, the cost of insuring their debt against defaulting in 5 years has dropped from spikes just a month ago. Credit default swaps for Sharp and Sony are down to levels last seen 3 months ago, while Panasonic's have dropped 40 percent in the past month.

THREE PATHS

While Panasonic is looking to revamp its business around batteries, auto parts and household appliances, Sony is doubling down on smartphones, gaming and cameras. Sharp, meanwhile, is focusing on display screens and is forging alliances with the likes of Taiwan's Hon Hai Precision Industry and U.S. chipmaker Qualcomm Inc.

Sony may also take the real estate sale route to raise much-needed cash, with a possible sale of its 37-storey New York headquarters, dubbed by New Yorkers as the 'Chippendale' because of its design that is reminiscent of the period English furniture. Selling that jewel could raise $1 billion, media have reported.

The maker of Vaio laptops, PlayStation gaming consoles and Bravia TVs may also sell its battery business, which makes lithium ion power packs for tablets, PCs and mobile phones. The company has been approached by investment banks offering to sell the unit, which employs 2,700 people and has three factories in Japan and two overseas assembly plants. Sony values the business's fixed assets at $636 million.

Potential buyers could include BYD Co Ltd, a Chinese carmaker backed by billionaire investor Warren Buffett, and Taiwan's Hon Hai - which part owns Sharp's advanced LCD panel plant in Sakai, western Japan, and is in talks to buy TV assembly plants in China, Malaysia and Mexico for $667 million, Japan's Sankei newspaper has reported.

Sharp has mortgaged nearly all its properties to secure a $4.6 billion bailout from Japanese banks and so has few assets to offer in a grand garage sale.

Instead, it's selling part of the garage.

Qualcomm has agreed to buy a 5 percent stake in Sharp, making it the largest shareholder. Hon Hai, which earlier this year agreed to invest in Sharp - before its stock slumped in the wake of record losses - has said it remains interested in taking a stake.

"Whatever they can get to get through this fiscal period by scaling down their operation is a critical step for them to remain afloat," said Fitch's Lim.

($1 = 82.4700 Japanese yen)

(Additional reporting by Reiji Murai; Editing by Ian Geoghegan)

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New tragedy rocks NFL's regularly scheduled world

The games go on.

For the second straight weekend, tragedy rocked the regularly scheduled world of the NFL. It left families, friends, teammates and coaching staffs grieving over yet another senseless loss of life. It also left the league facing questions not only about efforts to safeguard players on the field but whether it's doing enough to help them stay out of harm's way once they step outside the white lines.

In the early-morning hours Saturday in Irving, Texas, 24-year-old Dallas Cowboys nose tackle Josh Brent got behind the wheel of his Mercedes alongside teammate Jerry Brown and sped off, the prelude to a one-car accident that would leave Brown dead at 25 and Brent sitting in jail facing a felony charge of intoxicated manslaughter.

All this happened little more than three years after Brent was sentenced to probation and 60 days in jail in a plea agreement following his drunken driving arrest while playing football at the University of Illinois, where he and Brown were teammates as well.

That it happened just a week after Kansas City linebacker Jovan Belcher shot his girlfriend to death, then drove to the Chiefs' training facility and took his own life with the same gun, raised questions about the league's responsibility to the young men it empowers and enriches — in some cases, almost overnight.

"I don't know that anybody has the answer, to be honest. They're human beings, kids in most of the cases like this, and they're going to make mistakes," said Dan Reeves, who played seven years for the Cowboys before launching an NFL coaching career that included four stops over four decades.

"As a coach, you've got more than 50 players, if you count practice squad guys, that you're trying to keep an eye on. And both the league and the team invest an awful lot of time and money trying to educate them about the opportunities and pitfalls that are set out in front of them. ...

"But no matter what you do, some are going to believe the bad stuff will never happen to them. And teams spend so much time together, they become like families. It's easy to get lulled into thinking you know which ones need a pat on the back and which ones a kick in the behind. Yet this shows we don't always learn the real strengths and weaknesses of some until it's too late. Everybody deals with that knowledge in their own way.

"But if you're going to play," Reeves said finally. "I don't know any other way to honor that person than to play as hard as you can."

The emotional scene that roiled Kansas City in the wake of Belcher's murder-suicide a week earlier shifted to Cincinnati, where the Cowboys arrived Saturday night to complete preparations before Sunday's kickoff against the Bengals.

The team cut short its regular two-hour meeting and made sure counselors were on hand to speak to players afterward. But when owner Jerry Jones spoke with a Fox interviewer outside the locker room shortly before the game, his eyes were rimmed red and he spoke haltingly about Brown.

"Our team loved him. They certainly are conscious of him and want his family to know and have as much of them as they can give. At the same time," he added, "they know that one of the best things they can do for him and his memory is to come to the game today, is go out and play well."

How the NFL responds to this latest tragedy remains to be seen. Earlier this summer, cognizant of both the rising number of domestic violence and DUI incidents involving players, Commissioner Roger Goodell pledged to address both problems.

"We are going to do some things to combat this problem because some of the numbers on DUIs and domestic violence are going up and that disturbs me," he told CBS Sports. "When there's a pattern of mistakes, something has got to change."

In several important ways, player conduct has already improved significantly since Goodell took over from Paul Tagliabue.

In 2006, Goodell's first season, 68 players were arrested for crimes more severe than a traffic violation. Since then, arrests for crimes including domestic violence, drunken driving and gun possession are down 40 percent.

Yet, as Goodell noted, the number of incidents in the last year have climbed at an alarming rate — according to one study, 21 of the league's 32 teams had at least one player charged with domestic violence or sexual assault — and the tragedies involving players on successive weekends has already prompted accusations that the league isn't doing nearly enough.

On Saturday in Kansas City, a dozen members of the Chiefs' organization attended a memorial service for Kasandra Perkins. Among them was general manager Scott Pioli, whom Belcher spoke with in the parking lot of the Chiefs facility to thank before turning the gun on himself. A day later, just as the Chiefs did against the Panthers last Sunday, the Cowboys rallied to win their game against the Bengals.

The team has already canceled its annual Christmas party, scheduled for Monday at Cowboys Stadium, and instead began planning a memorial service for Brown.

"From here on, they're in uncharted waters," Reeves said. "No one can point the best way forward. I was lucky in that sense: We never had to deal with the nightmare of losing a friend and teammate. One thing I'm certain of, though — it's going to haunt some of them for a long time to come."

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