TheChek News Flow

Warren Buffett has been whitewashing his spotty role in the Benjamin Moore fiasco.

That’s the charge against the folksy billionaire from a number of the paint brand’s independent dealers — including a Big Apple-based operator that has smacked the company with an explosive lawsuit.

Gus and Andrea Giannopoulos, whose Brooklyn-based Capital Paint Supply began selling Benjamin Moore products in 1995, say Buffett turned a blind eye as the upscale label used ruthless, underhanded tactics to milk them for cash during the Great Recession.

“Everybody is talking like Warren Buffett is the good guy here, swooping in to fix this problem,” Gus Giannopoulos told The Post. “But all of this started happening on his watch.”

In addition to breaking contracts for inventory-financing programs, the suit filed in New Jersey Superior Court charges that Benjamin Moore execs demanded payments for advertising that never materialized.

Company reps even bad-mouthed Giannopoulos to clients behind his back as they opened competing stores nearby and tried to steal away wholesale accounts, the suit alleges.

Officials at Benjamin Moore and Berkshire Hathaway, Buffett’s Omaha, Neb.-based investment vehicle, didn’t respond to requests for comment about the suit, filed in January.

In a February response, Benjamin Moore’s lawyers denied the charges and countered that Capital Paint Supply had violated financing and advertising agreements.

Forced to shutter four of its nine locations in New York and New Jersey as it scrambled for cash, Capital Paint Supply isn’t alone, said Harold Goldmeier, a Harvard-trained professor of finance at American Jewish University. He said his family faced a similar clampdown in 2008 as Benjamin Moore dealers in Chicago, forcing them to exit.

“That’s the flip side to being a hands-off manager,” Goldmeier said, referring to Buffett. “I know people who went to Omaha and tried to see him. Their response was, ‘We don’t mix with the daily operations.’”

Since the recession, Goldmeier estimates that more than 60 family-owned stores closed throughout the Midwest, formerly a stronghold for the brand.

After acquiring the 130-year-old, Montvale, NJ-based company in 2000 for $1 billion, Berkshire Hathaway began extracting a yearly dividend of about $150 million, insiders said.

Pressure to deliver the cash mounted after the credit crisis in 2008, and ex-CEO Denis Abrams opted for hardball tactics, severing old dealer relationships as he squeezed the century-old distribution network, dealers say.

“They did everything on a handshake, and eventually they took advantage of it,” said Mike Fleck, whose New Jersey-based Flexpaint stores saw Benjamin Moore pulled abruptly from their shelves four years ago.

The strategy backfired as dealers switched to other brands and an initiative to expand company-owned stores flopped. Last year, excluding acquisitions, annual revenue was about half the 2005 peak of $1.1 billion, sources said.

“I used to call them the ‘Paint Nazis,’” said Frank Harrelson, a Charlotte, NC-based dealer who ended a 32-year relationship with Benjamin Moore this spring after reps demanded that he throw competing brands out of his store. “You hate to see them coming in the front door.”

General Cable Corp Due to certain accounting errors, certain revenue recognition in 2008-12 period should not be relied upon - filing - On October 10, 2013, the Audit Committee of the Companys Board of Directors, upon the recommendation of the Companys executive officers, concluded that due to certain accounting errors, in the aggregate, related to i) value added tax (VAT) and ii) revenue recognition in connection with historical bill and hold transactions for aerial transmission projects in Brazil as further described below, the Companys previously issued consolidated financial statements for the fiscal years 2008 through 2012 (and the related reports of its independent registered public accounting firm) and the interim periods during those years, and the financial statements as of, as well as for, the three fiscal months ended March 29, 2013 should no longer be relied upon.

Citigroup reports Q3 (Sep) results, misses on revs

Reports Q3 (Sep) earnings of $1.02 per share, may not be comparable to the Capital IQ Consensus Estimate of $1.03;C reported net income for Q3 of $3.2 billion, or $1.00 per diluted share, on revenues of $17.9 billion. This compared to net income of $468 mln, or $0.15 per diluted share, on revenues of $13.7 billion for 3Q12. CVA/DVA was a negative $336 million in Q3 resulting from the tightening of Citi's credit spreads in the quarter, compared to a negative $776 million in the prior year period. Third quarter 2013 results also included a $176 million tax benefit related to the resolution of certain tax audit items, compared to a $582 million tax benefit in the prior year period; Revenues fell 7.8% year/year to $17.88 bln vs the $18.8 bln consensus. •Michael Corbat, Chief Executive Officer of Citi, said, "We performed relatively well in this challenging, uneven macro environment. While many of the factors which influence our revenues are not within our full control, we certainly can control our costs and I am pleased with our expense discipline and improved efficiency year-to-date. Citicorp •Citicorp revenues of $16.6 billion in Q3 included a negative $332 million of CVA/DVA reported within Securities and Banking. Excluding CVA/DVA, Citicorp revenues of $17.0 billion decreased 7% from the prior year period. Securities and Banking revenues declined 2%, or 10% excluding CVA/DVA, and Global Consumer Banking (GCB) revenues declined 7%, while Transaction Services (CTS) revenues were roughly flat, all versus the prior year period. Citi Holdings •Citi Holdings revenues of $1.3 billion in the third quarter 2013 included a negative $4 million of CVA/DVA. Excluding CVA/DVA and the third quarter 2012 MSSB loss, Citi Holdings revenues increased 28% versus the prior year period, mainly driven by the absence of repurchase reserve builds for representations and warranty claims in the third quarter 2013. Total Citi Holdings assets of $122 billion declined $49 billion, or 29%, from the third quarter 2012. Citi Holdings assets at the end of the third quarter 2013 represented approximately 6% of total Citigroup assets. Citigroup's net income increased to $3.2 billion in the third quarter 2013 from $468 million in the prior year period. Excluding CVA/DVA and the tax benefit in both periods, as well as the third quarter 2012 MSSB loss, Citigroup net income of $3.3 billion was roughly flat compared to the prior year period, as lower operating expenses and lower credit costs were offset by the decline in revenues and a higher tax rate.

Operating expenses of $11.7 billion were 4% lower than the prior year period. Citigroup's cost of credit in the third quarter 2013 was $2.0 billion, 25% below the prior year period, reflecting a $1.5 billion improvement in net credit losses partially offset by a $827 million decline in net loan loss reserve releases.

Citigroup's capital levels and book value increased versus the prior year period. As of the quarter end, book value per share was $64.49 and tangible book value per share was $54.52, 1% and 3% increases respectively versus the prior year period. At quarter end, Citigroup's Basel I Tier 1 Capital Ratio was 13.6% and its Tier 1 Common Ratio was 12.6%, while its Basel III Tier 1 Common Ratio was estimated at 10.4%. Citigroup's estimated Basel III Supplementary Leverage Ratio for the third quarter 2013 was 5.1%.

Global Consumer Banking •GCB revenues of $9.2 billion declined 7% from the prior year period, as significantly lower U.S. mortgage refinancing activity and continued spread compression globally more than offset the ongoing volume growth in most international businesses. Revenues declined 12% in North America GCB to $4.7 billion, while international GCB revenues declined 1% to $4.5 billion on a reported basis (grew 2% on a constant dollar basis). GCB net income declined 23% versus the prior year period to $1.6 billion, reflecting the decline in revenues and lower loan loss reserve releases, partially offset by lower operating expenses and lower net credit losses. Operating expenses of $5.0 billion declined 4% versus the prior year period due to lower legal and related expenses in North America and repositioning savings. Total credit costs increased 14% compared to the prior period, driven by lower loan loss reserve releases in the North America cards business and reserve builds in international GCB, which were partially offset by lower net credit losses. Securities and Banking • Securities and Banking revenues declined 2% from the prior year period to $4.7 billion. Excluding the impact of the negative $332 million of CVA/DVA in the third quarter 2013 (compared to a negative $799 million impact in the prior year period), Securities and Banking revenues were $5.1 billion, 10% lower than the prior year period. • Investment Banking revenues of $839 million were 10% below the prior year period, driven primarily by declines in debt underwriting and advisory revenues, partially offset by growth in equity underwriting. Debt underwriting revenues declined 16% to $498 million and advisory revenues declined 15% to $167 million, while equity underwriting revenues increased 22% to $174 million. • Equity Markets revenues of $710 million in the third quarter 2013 (excluding a negative $39 million of CVA/DVA) were 36% above the prior year period, reflecting market share gains as well as improved derivatives performance. • Fixed Income revenues of $2.8 billion in the third quarter 2013 (excluding a negative $287 million of CVA/DVA) decreased 26% from the prior year period, reflecting lower volumes and a more uncertain macro environment. Lending revenues increased 38% to $230 million from the prior year period, mostly reflecting lower losses on hedges related to accrual loans of $147 million (compared to a $252 million loss in the third quarter 2012) as credit spreads tightened less significantly during the third quarter 2013 compared to the prior year. • Securities and Banking net income was $989 million in the third quarter 2013, down 16% from the prior year period. Excluding CVA/DVA, net income declined 29% to $1.2 billion from the prior year period, primarily reflecting the lower revenues and higher credit costs, driven by loan loss reserve builds, partially offset by a 3% decline in operating expenses, reflecting the impact of headcount reductions and lower performance-based compensation.

Johnson & Johnson beats by $0.04, reports revs in-line; raises FY13 EPS, in-line

Reports Q3 (Sep) earnings of $1.36 per share, $0.04 better than the Capital IQ Consensus Estimate of $1.32; revenues rose 3.1% year/year to $17.57 bln vs the $17.41 bln consensus. Operational results increased 4.7% and the negative impact of currency was 1.6%. Domestic sales increased 1.7%. International sales increased 4.2%, reflecting operational growth of 7.1% and a negative currency impact of 2.9%.

•Worldwide Consumer sales of $3.6 billion for the third quarter represented an increase of 0.8% versus the prior year consisting of an operational increase of 2.0% and a negative impact from currency of 1.2%. Domestic sales increased 0.9%. International sales increased 0.8%, which reflected an operational increase of 2.6% and a negative currency impact of 1.8%. •Worldwide Pharmaceutical sales of $7.0 billion for the third quarter represented an increase of 9.9% versus the prior year with operational growth of 10.9% and a negative impact from currency of 1.0%. Domestic sales increased 7.9%. International sales increased 12.0% which reflected an operational increase of 14.0% and a negative currency impact of 2.0%. •Worldwide Medical Devices and Diagnostics sales of $6.9 billion for the third quarter represented a decrease of 2.0% versus the prior year consisting of an operational increase of 0.3% and a negative currency impact of 2.3%. Domestic sales decreased 4.2%. International sales decreased 0.1%, which reflected an operational increase of 4.2% and a negative currency impact of 4.3%.

Co issues in-line guidance for FY13, raises EPS to $5.44-5.49 from $5.40-5.47 vs. $5.46 Capital IQ Consensus.

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Numericable Enterprise Value Could Be EU5-7b, L’Agefi Says 2013-10-15 11:53:42.91 GMT

By Steve Rhinds Oct. 15 (Bloomberg) -- Co. began presentations to potential investors yesterday to determine price range for IPO, financial daily L’Agefi says. The enterprise value estimate cited by L’Agefi is from unspecified financial analysis documents.

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Citigroup Inc Reports Q3 $1.02 adj v $1.06e, R$ v $18.7Be - headline only

Stock -1% in pre market 200k traded

S&P's Chambers: We still expect an 11th hour deal to resolve the US fiscal crisis - We are probably easier on the US regarding its ratings because it has the reserve currency privilege

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BFW 10/15 11:08 *KOSMOS AGREES FARM-OUT OF FOUM ASSAKA PERMIT, OFFSHORE MOROCCO BN 10/15 11:07 *KOSMOS AGREEMENT W/ BP BN 10/15 11:07 *KOSMOS AGREES FARM-OUT OF FOUM ASSAKA PERMIT, OFFSHORE MOROCCO BN 10/15 11:06 *FASTNET OIL & GAS KOSMOS AGREES FARM-OUT OF FOUM ASSAKA PERMIT

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Kosmos Signs Farm-Out Pacts With BP for 3 Blocks in Agadir Basin 2013-10-15 11:14:22.430 GMT

By Arie Shapira Oct. 15 (Bloomberg) -- Kosmos signs three farm-out agreements w/ BP covering three blocks in Agadir Basin offshore Morocco. * KOS recently signed pact w/ Office National des Hydrocarbures et des Mines covering Tarhazoute Offshore * Morocco drilling to start in 1H Statement: {NSN MUPIUP3HBS3K <GO>}

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Early premarket gappers

Gapping up: FU +2.9%, RIO +2.4%, MU +2.3%, GERN +2.3%, MT +2.2%, YHOO +1.5%, PKG +1.5%, TZOO +0.8%

Gapping down: CWTR -28.6%, TDC -15.6%, MCP -9.9%, RSO -5%, ALU -2.6%, SLV -2.4%, SI -1.9%, SLW -1.8%, ABX -1.7%, GOLD -1.5%, GLD -1.2%, TEVA -0.9%

Omnicom beats by $0.01, reports revs in-line

Tuesday, October 15, 2013 7:02:53 AM ET

Reports Q3 (Sep) earnings of $0.82 per share, $0.01 better than the Capital IQ Consensus Estimate of $0.81; revenues rose 2.5% year/year to $3.49 bln vs the $3.48 bln consensus. •For the quarter ended September 30, 2013, organic growth increased revenue 4.1%. Acquisitions, net of dispositions reduced revenue 1.0% and the impact of foreign exchange rates reduced revenue 0.6%. •Across geographic markets, organic revenue increased 5.0% in the United States, 7.5% in the United Kingdom and 4.5% in our other markets, primarily from growth in Asia and Latin America, offset by an organic revenue decline of 1.6% in our Euro markets.