Dear friends,
Often, we tend to view generosity as something that is spontaneous. When we experience a need that resonates with us in some way, we are moved to give immediately. As an outpouring of love, we pull out our checkbooks (or cell phones) and give as much as we are able.
However, I can say from experience that some of the most amazing examples of generosity are not at all spontaneous. With planned giving, it takes weeks, and sometimes years, for a person to make a decision on the gift that he/she will leave. With so many giving options available and so many complicated tax situations, this type of generosity is highly analytical and deliberate, slow even. Yet, it can result in gifts that are just as transformational and generous as the gifts that are spontaneous.
What kind of giver are you? There is no wrong answer--you might even say that God calls us to both kinds of giving. But I ask you to prayerfully consider the shape of your generosity and how God might be prompting you to give in the future.
Blessings,
Ken Roney
President
WASHINGTON NEWS
IRS Charitable Contribution Tips
In IR-2016-50 the IRS reminded taxpayers to follow appropriate charitable contribution guidelines. Read MoreWashington News
IRS Charitable Contribution Tips
In IR-2016-50 the IRS reminded taxpayers to follow appropriate charitable contribution guidelines.
1. Records – For gifts of $250 or more, you need a contemporaneous written acknowledgement. Most donors will call this a receipt. It usually states that “No goods or services were provided in exchange for the gift.” If you are giving property, you also will want to retain a record with a description of the property.
2. Vehicles – If the value of a car, boat, RV or other vehicle exceeds $500, then IRS Form 1098-C will be necessary. Generally, your charitable deduction will be equal to the gross proceeds received by the charity when it sells the vehicle. An exception is made for a related use of a vehicle by a charity or a material improvement prior to sale.
3. Property over $500 – IRS Form 8283 is required for property gifts valued over $500. You will need information such as the date it was acquired and the property description.
4. Property over $5,000 – Form 8283 is also required and it must be signed by the charitable organization and a qualified appraiser. The appraiser must have a specific designation or sufficient experience in the type of property being appraised. An exception to the appraisal rule is made for publicly traded securities. Stocks are valued at the mean between bid and ask on the date of the gift or the value at the end of the business day for mutual funds. No appraisal is required for public securities.
5. Clothing and Household Goods – These must be in “good used condition or better.” The category includes furniture, furnishings, electronics and appliances. If the items are valued over $500, you may obtain an appraisal.
6. Gifts of Money – A bank or credit union record is required for gifts of any amount. You should have a record with name of the charity, the date and the amount gifted. Payroll gifts may be supported with a W-2 document.
7. Timing – Gifts must be delivered to a charitable organization or placed in the U.S. Mail by December 31. Gifts by credit card are deductible if made by December 31, even if the payment is made in January.
PERSONAL PLANNER
Family Business - Sell and Retire
Bill and Alice started their family business many years ago. The early years were very challenging. Both worked without salary and it was a great struggle to finally get Read MorePersonal Planner
Family Business - Sell and Retire
Bill and Alice started their family business many years ago. The early years were very challenging. Both worked without salary and it was a great struggle to finally get the business on a solid financial base. But after three decades of building the business, it now runs very well with an excellent cash flow.
They are now nearing retirement and enjoying this phase of life. Bill and Alice have their home, two IRAs and savings. But a major part of their net worth is the value of the family business. When they retire, they would like to sell part or all of the business.
Like many business owners, they face two major decisions. First, will they sell to family members or to an outside party? Second, should they sell for cash and pay a very large capital gains tax or should they use a tax-free sale through a special charitable trust to reduce or eliminate their tax?
In the case of Bill and Alice, they have decided that it will be appropriate to sell to a third party, and have had offers from two larger companies. After considering the offers, Bill stated, "I am a loyal American and I support my government. However, I have fully supported the government through taxes these past years! If there is a way to sell and reduce tax, I am very open to learning about that."
In summary, Bill and Alice have two major goals for the sale - they would like to have a very good retirement income and reduce their taxes.
Sale and Unitrust for the Plant
Their negotiations proceeded smoothly with a potential buyer of their business. The business is operated as a limited liability company (LLC) and is worth $600,000. After negotiating for two months with the larger business, they agreed to sell the operating LLC for $600,000 and to lease the plant on a monthly lease. Because they started the business with no cash investment, all $600,000 of the cash payment for the LLC is long-term capital gain. Facing a major tax payment, Bill and Alice decided to sit down with their CPA George and discuss their next step.
George: "Bill and Alice, you have sold the LLC for $600,000. Your federal and state tax rate is approximately 30%. That means that your tax bill on that sale would be approximately $180,000. This leaves you with $420,000 to invest."
Bill: "That's a big tax. It would be great if we could figure out a way to reduce the tax. We have been renting the plant to the new buyer. Last week they indicated an interest in purchasing the plant."
George: "I recall that you and Alice own the plant personally. The building basis has been reduced through straight-line depreciation. We call your cost basis an adjusted basis because it's been reduced by that depreciation. Your basis in the building is now about $40,000."
Alice: "We did have an appraisal done last year on the land and building. The appraiser indicated that the property would be worth about $600,000. If we have a basis of $40,000 and were to sell it for $600,000, is our capital gain about $560,000?"
George: "Yes, that's exactly what you would have for gain. And you would pay $180,000 in tax on that sale. Your total taxes this year could be over $360,000 if you sell both the business and the plant."
Bill: "Ouch! That sure will hurt us. Is there a better solution?"
George: "You already have sold the business for $600,000 cash and will have a very large capital gain. You might consider setting up a charitable remainder trust for two lives with the plant. If we set up that trust, the two of you could receive 6% income for your two lives. Hopefully, we can earn more than 6% over time and the principal would grow. The initial $600,000 would produce another $36,000 of income."
Alice: "But would it save taxes?"
George: "Yes, there would be two savings. First, if we transfer the plant to the trust and then sell to a new buyer, we save the capital gains tax on that sale by the trust. In addition, there is a charitable deduction for part of the value because after both of you pass away the assets will go to your favorite charity. The charitable deduction will be over $180,000 and that could save about $65,000 in taxes. With the tax-free sale and the $65,000 savings offsetting part of the $180,000 tax payable on the LLC sale, your net tax bill would be around $115,000."
Bill: "Wow! Rather than paying over $360,000 we could cut it down to $115,000 by using the charitable trust. That is a great deal. Let's go forward with that plan!"
Setting Up the Charitable Unitrust
Bill and Alice contacted their attorney. She drafted a charitable remainder trust and a deed. CPA George served as the initial trustee. Bill and Alice deeded the land and building into the two-life charitable remainder trust with George serving as the initial trustee. The trust then sold the property to the larger business for $600,000. Bill and Alice saved all of the capital gains tax and their income tax deduction produced additional savings of $65,000. Their net tax for the year was reduced from $360,000 down to $115,000.
Bill and Alice enjoyed their tax savings on their vacation to Hawaii. They were last seen smiling as they flew off into the sunset.
Sale Guidelines for a Charitable Remainder Trust
There are several important rules that George shared with Bill and Alice to make sure that all of the tax benefits are received. First, the sale cannot be prearranged. When the trust was signed and the plant deeded to George as trustee, he needed to have the ability to select both the purchaser and the price. It is not possible to create a binding contract for sale, fund the trust and still enjoy the capital gains tax savings. Fortunately, Bill and Alice understood this rule and allowed CPA George to sell the building after the trust was funded.
Second, it is helpful to have an independent trustee for sales that are completed over a fairly short period of time. Because it was obvious that the larger business was the logical buyer for the property, it was helpful for CPA George to serve as the initial trustee. If Bill and Alice later wanted to be in control, George could resign and they could take over as successor trustees.
SAVVY LIVING
The Consequences of Dying Without a Will
What will happen to my money and possessions if I die without a will? Read MoreSavvy Living
The Consequences of Dying Without a Will
What will happen to my money and possessions if I die without a will?
If you die without a will, what happens to your assets will be determined by the state in which you reside. Every state has intestacy laws in place that parcel out property and assets to a deceased person's closest relatives when there's no will or trust. Keep in mind these laws vary from state to state.
A good resource to help you find out how your state works is About.com's Wills and Estate Planning site, which provides a state-by-state breakdown of how your estate would be distributed if you die without a will. See StateIntestacyLaws.com for a direct link to this page.
In the meantime, here is a general (not state specific) breakdown of what can happen to a person's assets, depending on whom they leave behind.
Married with children: When a married person with children dies without a will, all property, investments and financial accounts that are "jointly owned" automatically go to the surviving co-owner (typically the spouse or child), without going through probate, which is the legal process that distributes a deceased person's assets.
For all other separately owned property or individual financial accounts, the laws of most states award one-third to one-half to the surviving spouse, while the rest goes to the children.
Married with no children or grandchildren: Some states award the entire estate to the surviving spouse, or everything up to a certain amount (e.g., the first $100,000). Many other states award only one-third to one-half of the decedent's separately owned assets to the surviving spouse, with the remainder generally going to the deceased person's parents, or if the parents are dead, to brothers and sisters.
Jointly owned property, investments, financial accounts, or community property automatically goes to the surviving co-owner.
Single with children: All state laws provide that the entire estate goes to the children in equal shares. If an adult child of the decedent has died, then that child's children (the decedent's grandchildren) split their parent's share.
Single with no children or grandchildren: In this situation, most state laws favor the deceased person's parents. If both parents are deceased, many states divide the property among the brothers and sisters, or if they are not living, their children (your nieces and nephews). If there are none, it goes to the next of kin, and if there is no living family, the state takes it.
Make a Will
To ensure your assets go to those you want to receive them or to leave a bequest to charity, you need to create a will. If you have a simple estate and an uncomplicated family situation, there are several resources that can help you for very little money.
One option to consider if you understand the probate process is online software. Some online software also includes consultation with an attorney for an additional fee. While an online will may be better than no will, you are taking a risk that you could make a major error and cause family conflict after you pass away.
If, however, you want or need assistance, or if you have a complicated financial situation, blended family or considerable assets, you should hire an attorney. An experienced attorney can make sure you cover all your bases, which can help avoid family confusion and squabbles after you're gone.
Costs will vary depending on where you reside, but you can expect to pay anywhere between $200 and $1,000 for a will.
The National Academy of Elder Law Attorneys (naela.org) and the National Association of Estate Planners and Councils (naepc.org) are good resources that have online directories to help you find someone in your area.
If money is tight, check with your state's bar association (see findlegalhelp.org) to find low-cost legal help in your area. You can also call the Eldercare Locater at 800-677-1116 for a referral.
Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living” book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization’s official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.
YOUR PLAN
Bargain Sale
Susan and Kevin bought their first home many years ago. They had planned to build a second home so that their children could spend their summers along the lake. Read MoreBargain Sale
Susan and Kevin bought their first home, and then, years later, made plans to build a second home so that their children could spend their summers along the lake. However, as time went on, Kevin's job kept him in town and the children grew up before Susan and Kevin had the financial resources to build on the land.
Kevin: "Over the years, that property increased in value. It became worth much more than what we paid for it. We paid about $40,000 and it is now worth almost $200,000."
Susan: "With the children out of the house, we were thinking of selling the property. We had been wanting to give a large gift to our church to support a new building project, so we planned to donate 25% of the sale profits."
Kevin: "We were disappointed at the large amount of capital gains tax we would have to pay from the sale, but we no longer wanted to be responsible for upkeep of the land. I happened to be talking to a CPA at a community luncheon, and he mentioned that we could probably give almost twice as much to our church if we gave 25% of the property prior to the sale, instead of writing a check after.
We learned that we could give 25% interest in the property to the Foundation and designate the proceeds to go to our church. By avoiding taxes on that 25% of the sale, our gift to the church would be way larger. Plus, we would save on capital gains tax and get an income tax deduction."
Susan: "That is what we decided to do. By giving part of the property prior to the sale we saved the capital gains tax on that percentage. The charitable deduction on that offset a large portion of the tax on the $150,000 we received when the property actually sold. We are very pleased with the "double benefit" from giving the property, and our church received $50,000, a large portion of what they needed for the building project."
**Note: The name and image above is representative of a typical donor and may or may not be an actual donor to our organization. Since your benefits may be different, please contact us for more information.
FINANCES
Often, we tend to view generosity as something that is spontaneous. When we experience a need that resonates with us in some way, we are moved to give immediately. As an outpouring of love, we pull out our checkbooks (or cell phones) and give as much as we are able.
However, I can say from experience that some of the most amazing examples of generosity are not at all spontaneous. With planned giving, it takes weeks, and sometimes years, for a person to make a decision on the gift that he/she will leave. With so many giving options available and so many complicated tax situations, this type of generosity is highly analytical and deliberate, slow even. Yet, it can result in gifts that are just as transformational and generous as the gifts that are spontaneous.
What kind of giver are you? There is no wrong answer--you might even say that God calls us to both kinds of giving. But I ask you to prayerfully consider the shape of your generosity and how God might be prompting you to give in the future.
Blessings,
Ken Roney
President
WASHINGTON NEWS
IRS Charitable Contribution Tips
In IR-2016-50 the IRS reminded taxpayers to follow appropriate charitable contribution guidelines. Read MoreWashington News
IRS Charitable Contribution Tips
In IR-2016-50 the IRS reminded taxpayers to follow appropriate charitable contribution guidelines.
1. Records – For gifts of $250 or more, you need a contemporaneous written acknowledgement. Most donors will call this a receipt. It usually states that “No goods or services were provided in exchange for the gift.” If you are giving property, you also will want to retain a record with a description of the property.
2. Vehicles – If the value of a car, boat, RV or other vehicle exceeds $500, then IRS Form 1098-C will be necessary. Generally, your charitable deduction will be equal to the gross proceeds received by the charity when it sells the vehicle. An exception is made for a related use of a vehicle by a charity or a material improvement prior to sale.
3. Property over $500 – IRS Form 8283 is required for property gifts valued over $500. You will need information such as the date it was acquired and the property description.
4. Property over $5,000 – Form 8283 is also required and it must be signed by the charitable organization and a qualified appraiser. The appraiser must have a specific designation or sufficient experience in the type of property being appraised. An exception to the appraisal rule is made for publicly traded securities. Stocks are valued at the mean between bid and ask on the date of the gift or the value at the end of the business day for mutual funds. No appraisal is required for public securities.
5. Clothing and Household Goods – These must be in “good used condition or better.” The category includes furniture, furnishings, electronics and appliances. If the items are valued over $500, you may obtain an appraisal.
6. Gifts of Money – A bank or credit union record is required for gifts of any amount. You should have a record with name of the charity, the date and the amount gifted. Payroll gifts may be supported with a W-2 document.
7. Timing – Gifts must be delivered to a charitable organization or placed in the U.S. Mail by December 31. Gifts by credit card are deductible if made by December 31, even if the payment is made in January.
PERSONAL PLANNER
Family Business - Sell and Retire
Bill and Alice started their family business many years ago. The early years were very challenging. Both worked without salary and it was a great struggle to finally get Read MorePersonal Planner
Family Business - Sell and Retire
Bill and Alice started their family business many years ago. The early years were very challenging. Both worked without salary and it was a great struggle to finally get the business on a solid financial base. But after three decades of building the business, it now runs very well with an excellent cash flow.
They are now nearing retirement and enjoying this phase of life. Bill and Alice have their home, two IRAs and savings. But a major part of their net worth is the value of the family business. When they retire, they would like to sell part or all of the business.
Like many business owners, they face two major decisions. First, will they sell to family members or to an outside party? Second, should they sell for cash and pay a very large capital gains tax or should they use a tax-free sale through a special charitable trust to reduce or eliminate their tax?
In the case of Bill and Alice, they have decided that it will be appropriate to sell to a third party, and have had offers from two larger companies. After considering the offers, Bill stated, "I am a loyal American and I support my government. However, I have fully supported the government through taxes these past years! If there is a way to sell and reduce tax, I am very open to learning about that."
In summary, Bill and Alice have two major goals for the sale - they would like to have a very good retirement income and reduce their taxes.
Sale and Unitrust for the Plant
Their negotiations proceeded smoothly with a potential buyer of their business. The business is operated as a limited liability company (LLC) and is worth $600,000. After negotiating for two months with the larger business, they agreed to sell the operating LLC for $600,000 and to lease the plant on a monthly lease. Because they started the business with no cash investment, all $600,000 of the cash payment for the LLC is long-term capital gain. Facing a major tax payment, Bill and Alice decided to sit down with their CPA George and discuss their next step.
George: "Bill and Alice, you have sold the LLC for $600,000. Your federal and state tax rate is approximately 30%. That means that your tax bill on that sale would be approximately $180,000. This leaves you with $420,000 to invest."
Bill: "That's a big tax. It would be great if we could figure out a way to reduce the tax. We have been renting the plant to the new buyer. Last week they indicated an interest in purchasing the plant."
George: "I recall that you and Alice own the plant personally. The building basis has been reduced through straight-line depreciation. We call your cost basis an adjusted basis because it's been reduced by that depreciation. Your basis in the building is now about $40,000."
Alice: "We did have an appraisal done last year on the land and building. The appraiser indicated that the property would be worth about $600,000. If we have a basis of $40,000 and were to sell it for $600,000, is our capital gain about $560,000?"
George: "Yes, that's exactly what you would have for gain. And you would pay $180,000 in tax on that sale. Your total taxes this year could be over $360,000 if you sell both the business and the plant."
Bill: "Ouch! That sure will hurt us. Is there a better solution?"
George: "You already have sold the business for $600,000 cash and will have a very large capital gain. You might consider setting up a charitable remainder trust for two lives with the plant. If we set up that trust, the two of you could receive 6% income for your two lives. Hopefully, we can earn more than 6% over time and the principal would grow. The initial $600,000 would produce another $36,000 of income."
Alice: "But would it save taxes?"
George: "Yes, there would be two savings. First, if we transfer the plant to the trust and then sell to a new buyer, we save the capital gains tax on that sale by the trust. In addition, there is a charitable deduction for part of the value because after both of you pass away the assets will go to your favorite charity. The charitable deduction will be over $180,000 and that could save about $65,000 in taxes. With the tax-free sale and the $65,000 savings offsetting part of the $180,000 tax payable on the LLC sale, your net tax bill would be around $115,000."
Bill: "Wow! Rather than paying over $360,000 we could cut it down to $115,000 by using the charitable trust. That is a great deal. Let's go forward with that plan!"
Setting Up the Charitable Unitrust
Bill and Alice contacted their attorney. She drafted a charitable remainder trust and a deed. CPA George served as the initial trustee. Bill and Alice deeded the land and building into the two-life charitable remainder trust with George serving as the initial trustee. The trust then sold the property to the larger business for $600,000. Bill and Alice saved all of the capital gains tax and their income tax deduction produced additional savings of $65,000. Their net tax for the year was reduced from $360,000 down to $115,000.
Bill and Alice enjoyed their tax savings on their vacation to Hawaii. They were last seen smiling as they flew off into the sunset.
Sale Guidelines for a Charitable Remainder Trust
There are several important rules that George shared with Bill and Alice to make sure that all of the tax benefits are received. First, the sale cannot be prearranged. When the trust was signed and the plant deeded to George as trustee, he needed to have the ability to select both the purchaser and the price. It is not possible to create a binding contract for sale, fund the trust and still enjoy the capital gains tax savings. Fortunately, Bill and Alice understood this rule and allowed CPA George to sell the building after the trust was funded.
Second, it is helpful to have an independent trustee for sales that are completed over a fairly short period of time. Because it was obvious that the larger business was the logical buyer for the property, it was helpful for CPA George to serve as the initial trustee. If Bill and Alice later wanted to be in control, George could resign and they could take over as successor trustees.
SAVVY LIVING
The Consequences of Dying Without a Will
What will happen to my money and possessions if I die without a will? Read MoreSavvy Living
The Consequences of Dying Without a Will
What will happen to my money and possessions if I die without a will?
If you die without a will, what happens to your assets will be determined by the state in which you reside. Every state has intestacy laws in place that parcel out property and assets to a deceased person's closest relatives when there's no will or trust. Keep in mind these laws vary from state to state.
A good resource to help you find out how your state works is About.com's Wills and Estate Planning site, which provides a state-by-state breakdown of how your estate would be distributed if you die without a will. See StateIntestacyLaws.com for a direct link to this page.
In the meantime, here is a general (not state specific) breakdown of what can happen to a person's assets, depending on whom they leave behind.
Married with children: When a married person with children dies without a will, all property, investments and financial accounts that are "jointly owned" automatically go to the surviving co-owner (typically the spouse or child), without going through probate, which is the legal process that distributes a deceased person's assets.
For all other separately owned property or individual financial accounts, the laws of most states award one-third to one-half to the surviving spouse, while the rest goes to the children.
Married with no children or grandchildren: Some states award the entire estate to the surviving spouse, or everything up to a certain amount (e.g., the first $100,000). Many other states award only one-third to one-half of the decedent's separately owned assets to the surviving spouse, with the remainder generally going to the deceased person's parents, or if the parents are dead, to brothers and sisters.
Jointly owned property, investments, financial accounts, or community property automatically goes to the surviving co-owner.
Single with children: All state laws provide that the entire estate goes to the children in equal shares. If an adult child of the decedent has died, then that child's children (the decedent's grandchildren) split their parent's share.
Single with no children or grandchildren: In this situation, most state laws favor the deceased person's parents. If both parents are deceased, many states divide the property among the brothers and sisters, or if they are not living, their children (your nieces and nephews). If there are none, it goes to the next of kin, and if there is no living family, the state takes it.
Make a Will
To ensure your assets go to those you want to receive them or to leave a bequest to charity, you need to create a will. If you have a simple estate and an uncomplicated family situation, there are several resources that can help you for very little money.
One option to consider if you understand the probate process is online software. Some online software also includes consultation with an attorney for an additional fee. While an online will may be better than no will, you are taking a risk that you could make a major error and cause family conflict after you pass away.
If, however, you want or need assistance, or if you have a complicated financial situation, blended family or considerable assets, you should hire an attorney. An experienced attorney can make sure you cover all your bases, which can help avoid family confusion and squabbles after you're gone.
Costs will vary depending on where you reside, but you can expect to pay anywhere between $200 and $1,000 for a will.
The National Academy of Elder Law Attorneys (naela.org) and the National Association of Estate Planners and Councils (naepc.org) are good resources that have online directories to help you find someone in your area.
If money is tight, check with your state's bar association (see findlegalhelp.org) to find low-cost legal help in your area. You can also call the Eldercare Locater at 800-677-1116 for a referral.
Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living” book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization’s official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.
YOUR PLAN
Bargain Sale
Susan and Kevin bought their first home many years ago. They had planned to build a second home so that their children could spend their summers along the lake. Read MoreBargain Sale
Susan and Kevin bought their first home, and then, years later, made plans to build a second home so that their children could spend their summers along the lake. However, as time went on, Kevin's job kept him in town and the children grew up before Susan and Kevin had the financial resources to build on the land.
Kevin: "Over the years, that property increased in value. It became worth much more than what we paid for it. We paid about $40,000 and it is now worth almost $200,000."
Susan: "With the children out of the house, we were thinking of selling the property. We had been wanting to give a large gift to our church to support a new building project, so we planned to donate 25% of the sale profits."
Kevin: "We were disappointed at the large amount of capital gains tax we would have to pay from the sale, but we no longer wanted to be responsible for upkeep of the land. I happened to be talking to a CPA at a community luncheon, and he mentioned that we could probably give almost twice as much to our church if we gave 25% of the property prior to the sale, instead of writing a check after.
We learned that we could give 25% interest in the property to the Foundation and designate the proceeds to go to our church. By avoiding taxes on that 25% of the sale, our gift to the church would be way larger. Plus, we would save on capital gains tax and get an income tax deduction."
Susan: "That is what we decided to do. By giving part of the property prior to the sale we saved the capital gains tax on that percentage. The charitable deduction on that offset a large portion of the tax on the $150,000 we received when the property actually sold. We are very pleased with the "double benefit" from giving the property, and our church received $50,000, a large portion of what they needed for the building project."
**Note: The name and image above is representative of a typical donor and may or may not be an actual donor to our organization. Since your benefits may be different, please contact us for more information.
FINANCES
Stocks - Carnival Cruises to High Profits Read MoreCarnival Cruises to High Profits
Carnival Corporation (CCL) released its first quarter earnings on Wednesday, March 30. The cruise line's profit for the quarter nearly doubled, due in large part to lower fuel prices.
Carnival reported first quarter revenue of $3.65 billion, above last year's first quarter revenue of $3.53 billion. This figure also beat analysts' estimates of $3.63 billion.
"Our teams delivered another strong quarter of operational improvement by creating increased demand for our brands and leveraging our scale which resulted in revenue yield improvement approaching 6% and the near doubling of first quarter adjusted earnings," said Carnival President and CEO Arnold Donald. "Our ongoing guest experience innovations coupled with our increasingly effective marketing and communication efforts have driven additional demand for our brands, resulting in a strong booked position."
Carnival reported adjusted earnings of $0.39 per share, nearly doubling last year's first quarter adjusted earnings of $0.20 per share. Due to the positive trend, Carnival raised its 2016 earnings outlook from $3.10–$3.40 per share to $3.20–$3.40 per share.
Carnival Corporation operates 99 cruise ships under 10 different brands, including Carnival Cruise Line, Princess Cruises and Holland America Line. Carnival is reporting that advance bookings for 2016 are well ahead of last year and that they expect 16 new ships to be delivered between 2016 and 2020. Carnival's lines travel to destinations across the globe, including North America, Europe, Australia and Asia. Last week it expanded its reach when it became the first U.S. based cruise operator in more than 50 years to be granted approval to sail to Cuba.
Carnival Corporation (CCL) shares ended the week at $52.75, up 7.1% for the week.
Lululemon Beats Expectations, Stock Soars
Lululemon Athletica, Inc. (LULU) announced its full-year and fourth quarter earnings on Wednesday, March 30. The upscale yoga and athletic wear company's stock jumped 10% on Wednesday after the company reported a year-over-year surge in revenue that beat analysts' expectations.
The company's fourth quarter revenue increased 17% to $704.3 million from $602.5 million in the same quarter a year ago. Net revenue for the full year increased 15% to $2.1 billion.
"Our Q4 results are a reflection of our ability to deliver a truly unique experience to our guests, led, as always, by our outstanding store educators," said Lululemon CEO Laurent Potdevin. "In 2015, we made bold moves across the organization, elevating design and innovation and developing our infrastructure to position us for the future. As I look forward to 2016 and beyond, I am excited and confident that we have the right team in place to execute on our long term strategies."
Lululemon reported that its net income jumped to $117.4 million, up from $110.8 million in the same period last year. Earnings per share in the fourth quarter were $0.85, compared to $0.79 in the fourth quarter last year.
The Vancouver, Canada-based company is forecasting a lucrative future, stating on Wednesday that it plans to more than double its earnings by 2020. In fiscal 2015, Lululemon expanded its reach both at home and abroad by adding 61 new stores. In order to reach its targeted projections, the company plans to focus heavily on expanding its online business and international platform. The company predicts that by 2020 over one-third of its sales will come from online sales and 20%-25% of its total sales will be derived from international business.
Lululemon Athletica, Inc. (LULU) shares ended the week at $68.69, up 11% for the week.
Blackberry Reports Falling Revenue
BlackBerry Limited (BBRY) reported its full-year and quarterly earnings on Friday, April 1. The tech company reported a loss for the quarter, but still beat analysts' predictions.
On a GAAP basis, BlackBerry's yearly revenue dropped from $3.33 billion last year to $2.16 billion this year. Fourth quarter revenue fell to $464 million. Despite the loss, the company remains optimistic and expects its software development and service department to grow as much as 30%.
"[W]e made progress on the key elements of our strategy, which are to grow software faster than the mobility software market, achieve device profitability and generate positive free cash flow," said BlackBerry CEO John Chen. "Looking to FY 2017, our strategy is on track and our growth engines are in place to continue to generate above market growth in software and achieve our profitability objectives," said Chen.
BlackBerry reported a non-GAAP earnings per share loss of $0.03 and a net income loss of $238 million. These results were better than the $0.09 loss predicted by analysts.
BlackBerry has been hit hard in recent years as its smartphone business continues to decline. Due to these challenges, the company has been making an effort to re-emerge as a software company. However, BlackBerry has not abandoned its smartphone business. In November the company launched the Priv handset, which utilizes Google's android technology rather than BlackBerry's original operating system. The company did not report sales figures for its new line of phones.
BlackBerry Limited (BBRY) shares ended the week at $7.48, down 1.6% for the week.
The Dow started the week of 3/28 at 17,526 and closed at 17,793 on 4/1. The S&P 500 started the week at 2,038 and closed at 2,073. The NASDAQ started the week at 4,785 and closed at 4,915.
Carnival Corporation (CCL) released its first quarter earnings on Wednesday, March 30. The cruise line's profit for the quarter nearly doubled, due in large part to lower fuel prices.
Carnival reported first quarter revenue of $3.65 billion, above last year's first quarter revenue of $3.53 billion. This figure also beat analysts' estimates of $3.63 billion.
"Our teams delivered another strong quarter of operational improvement by creating increased demand for our brands and leveraging our scale which resulted in revenue yield improvement approaching 6% and the near doubling of first quarter adjusted earnings," said Carnival President and CEO Arnold Donald. "Our ongoing guest experience innovations coupled with our increasingly effective marketing and communication efforts have driven additional demand for our brands, resulting in a strong booked position."
Carnival reported adjusted earnings of $0.39 per share, nearly doubling last year's first quarter adjusted earnings of $0.20 per share. Due to the positive trend, Carnival raised its 2016 earnings outlook from $3.10–$3.40 per share to $3.20–$3.40 per share.
Carnival Corporation operates 99 cruise ships under 10 different brands, including Carnival Cruise Line, Princess Cruises and Holland America Line. Carnival is reporting that advance bookings for 2016 are well ahead of last year and that they expect 16 new ships to be delivered between 2016 and 2020. Carnival's lines travel to destinations across the globe, including North America, Europe, Australia and Asia. Last week it expanded its reach when it became the first U.S. based cruise operator in more than 50 years to be granted approval to sail to Cuba.
Carnival Corporation (CCL) shares ended the week at $52.75, up 7.1% for the week.
Lululemon Beats Expectations, Stock Soars
Lululemon Athletica, Inc. (LULU) announced its full-year and fourth quarter earnings on Wednesday, March 30. The upscale yoga and athletic wear company's stock jumped 10% on Wednesday after the company reported a year-over-year surge in revenue that beat analysts' expectations.
The company's fourth quarter revenue increased 17% to $704.3 million from $602.5 million in the same quarter a year ago. Net revenue for the full year increased 15% to $2.1 billion.
"Our Q4 results are a reflection of our ability to deliver a truly unique experience to our guests, led, as always, by our outstanding store educators," said Lululemon CEO Laurent Potdevin. "In 2015, we made bold moves across the organization, elevating design and innovation and developing our infrastructure to position us for the future. As I look forward to 2016 and beyond, I am excited and confident that we have the right team in place to execute on our long term strategies."
Lululemon reported that its net income jumped to $117.4 million, up from $110.8 million in the same period last year. Earnings per share in the fourth quarter were $0.85, compared to $0.79 in the fourth quarter last year.
The Vancouver, Canada-based company is forecasting a lucrative future, stating on Wednesday that it plans to more than double its earnings by 2020. In fiscal 2015, Lululemon expanded its reach both at home and abroad by adding 61 new stores. In order to reach its targeted projections, the company plans to focus heavily on expanding its online business and international platform. The company predicts that by 2020 over one-third of its sales will come from online sales and 20%-25% of its total sales will be derived from international business.
Lululemon Athletica, Inc. (LULU) shares ended the week at $68.69, up 11% for the week.
Blackberry Reports Falling Revenue
BlackBerry Limited (BBRY) reported its full-year and quarterly earnings on Friday, April 1. The tech company reported a loss for the quarter, but still beat analysts' predictions.
On a GAAP basis, BlackBerry's yearly revenue dropped from $3.33 billion last year to $2.16 billion this year. Fourth quarter revenue fell to $464 million. Despite the loss, the company remains optimistic and expects its software development and service department to grow as much as 30%.
"[W]e made progress on the key elements of our strategy, which are to grow software faster than the mobility software market, achieve device profitability and generate positive free cash flow," said BlackBerry CEO John Chen. "Looking to FY 2017, our strategy is on track and our growth engines are in place to continue to generate above market growth in software and achieve our profitability objectives," said Chen.
BlackBerry reported a non-GAAP earnings per share loss of $0.03 and a net income loss of $238 million. These results were better than the $0.09 loss predicted by analysts.
BlackBerry has been hit hard in recent years as its smartphone business continues to decline. Due to these challenges, the company has been making an effort to re-emerge as a software company. However, BlackBerry has not abandoned its smartphone business. In November the company launched the Priv handset, which utilizes Google's android technology rather than BlackBerry's original operating system. The company did not report sales figures for its new line of phones.
BlackBerry Limited (BBRY) shares ended the week at $7.48, down 1.6% for the week.
The Dow started the week of 3/28 at 17,526 and closed at 17,793 on 4/1. The S&P 500 started the week at 2,038 and closed at 2,073. The NASDAQ started the week at 4,785 and closed at 4,915.
Bonds - Yields Remain Low Despite Positive Jobs Report Read More
Yields Remain Low Despite Positive Jobs ReportA positive March jobs report caused short-term yields to rise slightly on Friday, while long-term yields remained flat. Despite the report's indication that the U.S. is experiencing a healthy job market, analysts do not foresee an interest rate hike in the immediate future.
The U.S. added 215,000 new jobs in March, while hourly wage grew 0.3%. Both figures beat analysts' expectations. Economists polled by Reuters expected the economy to see an increase of 205,000 jobs and for minimum wage to rise 0.2%.
"The rise in the two-year yields and a fall in the 10-year yields—which has flattened the yield curve—signals that the market is accepting the Fed's dovish stand as a correct one," said Robert Tipp, chief investment strategist at Prudential Fixed Income.
The first quarter of 2016 marked the lowest quarterly decline for treasury yields in nearly four years. The steep drop was caused by global stock sell-offs and discouraged expectations following the Federal Reserve's cut back of its forecasted rate hikes.
The week of March 28 saw little improvement. Demand for government bonds continued following Federal Reserve Chairwoman Janet Yellen's remarks on Tuesday. Yellen emphasized risks to the global economy and warned the Fed to proceed "cautiously" as it considers future interest rate hikes.
"You have this follow-through from Yellen's speech on Tuesday that is suggesting that the Fed is in no rush to make any moves in the near term and, also in the near term, that growthier data is not as critical of an input for the Fed," said Jeff Greenberg, director and macro strategist at UBS Securities LLC. While typically a strong jobs report will increase yields, the Fed's current stance on future rate increases has increased the demand for bonds and kept yields low.
The 10-year Treasury note yield finished the week of 3/28 at 1.79% while the 30-year Treasury note yield was 2.62%.
CDs and Mortgages - Interest Rates Stay Sedentary Read More
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To model generosity inspires others to do the same. Thank you for your interest in the Foundation as we strive to partner with churches, ministries, and Christians around the world to fund the important work of God's Kingdom.
To access updated financial and gift planning information, please visit our website, www.nazarenefoundation.org. If you would like more information about your charitable giving options or about how a Foundation representative can visit your church, contact us by phone at (913) 577-2983 or by email at info@nazarenefoundation.org.
To model generosity inspires others to do the same. Thank you for your interest in the Foundation as we strive to partner with churches, ministries, and Christians around the world to fund the important work of God's Kingdom.
To access updated financial and gift planning information, please visit our website, www.nazarenefoundation.org. If you would like more information about your charitable giving options or about how a Foundation representative can visit your church, contact us by phone at (913) 577-2983 or by email at info@nazarenefoundation.org.
The Global Church of the Nazarene Foundation
17001 Prairie Star Parkway, Suite 200
Lenexa, Kansas 66220, United States
Phone: (913) 577-2983
Fax: (913) 577-0898
Toll free: 866-273-2549
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