Austin American-Statesman from Austin, Texas • 17

PERSONAL FINANCE U.KJJLl Austin statesman.com austin360.com THURSDAY, FEBRUARY 19, 2009 B5 IH )A rrrr V7 MACHAA 1,467.97 i r7 0 788.42 j.0i o.04 I JNAAOUMy I OCXr NJLJkJkJ AUSTIN AUSTIN GROCERY STORES Whole Foods Market's profit and sales Profit in millions 53.9 53.8 39.8 39 1 40.0 33.9 33.9 32.3 Afflidl noun MORE ECONOMIC NEWS President Barack Obama introduces a plan aimed at preventing up to 9 million foreclosures and stabilizing housing markets Page One of kwm ASSOCIATED PRESS Ql Q2 Q3 Q4 01 02 03 Q4 01 02 Q3 Q4 01 2006 2007 2008 2009 Fiscal year Change in same-store sales (Stores open 13-0 at least a year) 11.9 1 i 99 9.3 8.2 7.0 7.0 7.0 6.7 2.6 Ql Medical device firm says SEC, federal prosecutors looking into billing, more By Lilly Rockwell AMERICAN-STATESMAN STAFF A year ago, ArthroCare Corp. chief executive Mike Baker insisted that nothing was amiss with his even as critics were raising questions about billing and other practices at its insurance reimbursement subsidiary. The allegations were "the most salacious kind of garbage," Baker told the American-Statesman. But on Wednesday, the Austin medical device company said it was under investigation by the U.S. Securities and Exchange Commission and U.S.

attorney's offices in Florida and North Carolina over insurance billing and other practices. Baker and two other top executives resigned. The company said the audit committee of its board of directors had found evidence of "improper practices," including double-billing of insurance companies, providing inaccurate claims information on where See RESIGN, B6 Mike Baker Last year, ArthroCare CEO called allegations about policies the most salacious kind of INVESTMENTS INVESTIGATION 01 Q2 03 04 01 02 03 Q4 01 02 03 04 2006 2007 2008 -40 Fiscal year 2009 Source: Whole Foods Market Linda Scott American-statesman Whole Foods sees key sales figure drop for first time Results from stores open at least a year fell in first quarter By Lilly Rockwell AMERICAN-STATESMAN STAFF For the first time in its history, Austin-based Whole Foods Market Inc. reported a quarterly decrease in same-store sales, a key barometer of a retailer's success. The organic and natural foods retailer also said Wednesday that its profit dropped 17 percent during its first quarter to $32.3 million, compared with $39.1 million at the same time last year.

Revenue increased slightly, to $2.5 billion. The report, which came out after the markets closed, said Whole Foods beat Wall Street's expectations on profit, which led to a jump in the company's stock price during tfA' i'h i I 5, tfttfSitfl, --m, I Ti 1 1 i i 'j f' i la 'it 'T' 1 41 BUSINESS DIGEST CHIPMAKERS AMD shareholders OK deal to spin off manufacturing sites Shareholders of Advanced Micro Devices Inc. approved its plans to spin off it manufacturing operations. The vote clears the way for AMD to turn over its plants to the Foundry owned mostly by the Advanced Technology Investment which is owned by the government of Abu Dhabi, in the United Arab Emirates. The deal results in a $700 million cash infusion to AMD and relieves the company of the financial burden of equipping and running state-of-the-art factories.

Advanced Technology will invest $2.1 billion, including $700 million that will go to AMD, which has been struggling to regain profitability after a two-year streak of losses. Additionally, Mubadala Development an Abu Dhabi investment arm, will buy 58 million shares of AMD and an additional 35 million warrants to buy the company's stock. COMPUTERS H-P lowers 2009 expectations after 13 percent drop in profit SAN FRANCISCO Hewlett-Packard quarterly profit dropped 13 percent, and sales rose 1 percent, the company said Wednesday. Even its cash-cow printer ink business was hobbled by the recession. H-P earned $1.9 billion, or 75 cents per share, in the three months that ended Jan.

31. That compares with profit of $2.13 billion, or 80 cents per share, a year earlier. Without one-time costs, H-P earned 93 cents per share, matching analyst estimates. However, sales of $28.8 billion fell short of Wall Street's forecast by more than $3 billion. The world's top seller of personal computers also cut its 2009 guidance.

H-P predicted that it would earn between $3.76 and $3.88 per share this year, excluding one-time costs. BANKING UBS to pay $780 million in tax case, open secret Swiss records WASHINGTON Banking giant UBS agreed to pay $780 million and turn over once-secret Swiss banking records to settle allegations that it conspired to defraud the US. government of taxes owed by big clients. As part of the deal, UBS will immediately turn over to the U.S. government account information for U.S.

customers of the bank's cross-border business. In doing so, federal authorities have struck a big crack in Switzerland's vaunted bank secrecy laws. UBS will pay $780 million in fines, penalties, interest and restitution for conspiring to create sham accounts to hide the assets of U.S. clients from the US. government.

RECESSION Fed's forecast for jobless rate, economy in 2009 gets gloomier WASHINGTON The Federal Reserve downgraded its projections for the economy this year, predicting that it will shrink and that unemployment will rise. The new projections say the unemployment rate will rise to between 8.5 and 8.8 percent this year. The previous forecasts, issued in November, said the rate would rise to between 7.1 and 7.6 percent. The unemployment rate is currently 7.6 percent. The Fed also predicted that the economy will contract this year between 0.5 and 1.3 percent.

The old forecast said it could shrink 0.2 percent or expand 1.1 percent. The last time that the economy registered a contraction for a full year was in 1991, by 0.2 percent. Compiled from staff and wire reports ll'fiitl if i after-hours trading. Earlier Wednesday, the stock closed at $9.29. Whole Foods cut costs in August in the face of slower same-store sales growth rates.

(Same-store sales are important because they compare results at stores open at least a year.) Whole Foods reduced the number of stores that it was planning to open in 2009 from 30 to 15 and eliminated about 300 jobs. Andres Leighton associ- People in St. John's, Antigua, lined up Wednesday to take their money out of the Bank of Antigua after learning about the allegations against R. Allen Stanford, left, a Texas businessman who controls the bank. He is accused of perpetrating an $8 billion fraud out of his Houston investment firm.

John Mackey CEO says Whole Foods has frozen hiring and salaries. Lefteris Pitarakis 2008 associated press Whole Foods CEO John Mackey said in a conference call with financial analysts Wednesday that the chain implemented a hiring and salary freeze and is closely watching its labor and store expenses. Whole Foods is also trying to open smaller stores. "We are committed to our team members, and this is a time where we think we need to pull together rather than figure out how to throw people out of the lifeboat," Mackey said. The cost-cutting decisions made in August will "help us successfully manage through this period of slower sales growth," Mackey said.

Same-store sales decreased an average of 4 percent in the first quarter the first time See GROCER, B6 Stanford paid court to clients, politicians Lawsuits expected to stack up against Texan accused of investment scheme marketing brochures and trips to his Antigua headquarters to persuade investors to entrust their money to Stanford International Bank Ltd. The institution claims 30,000 clients and $7.2 billion in assets under management, according to a US. Securities and Exchange Commission complaint filed Tuesday in Dallas. Peter Comer, an Austin software salesman, estimated that about 10 percent of his investments are in Stanford International Bank certificates of deposit. "I got assurances from my brokers," Comer said.

"Their job is to do the gut check." Lawsuits are expected to begin appearing around the country. Houston lawyer George Fleming filed what See INQUIRY, B6 By Alison Fitzgerald BLOOMBERG NEWS R. Allen Stanford, accused by federal regulators of a "massive, ongoing fraud" at his Houston investment firm, cultivated his image by shuttling politicians in corporate jets and spending money on cricket, polo and golf. The 58-year-old head of Stanford Group Co. who grew up in Mexia, east of Waco, and graduated from Baylor University began using the title "sir" in 2006 after being knighted by the leaders of Antigua and Barbuda, his adoptive country.

The banker began building a fortune by investing in Texas real estate after the 1980s savings and loan crisis, according to his company's Web site. Stanford's sales force used leather-bound WILLIAMSON COUNTY CONSTRUCTION TELEVISION DIGITAL CONVERSION Calls keep KEYE busy after digital TV switch By Diane Holloway AMERICAN-STATESMN TELEVISION WRITER "Not too bad not as many angry people as I expected." That's how Dusty Granberry, KEYE's director of broadcast operations and engineering, described the television station's digital conversion. KEYE flipped the switch at midnight Tuesday, turning off its analog KEYE signal and going digital-only. htwu The CBS station was the first DIVllGlp in town to go DTV, and some nUmbsrS people woke up the next morning to find fuzzy screens where 832-7500 their CBS News and daytime 490-2103 Soap operas used to be. An eight-line phone bank had been set up at the station, with three to six people taking calls after midnight, through the day and through the night Wednesday.

By midafternoon, Granberry estimated that about 500 calls had been received. Calls continued to come in during prime-time programming. "It was so busy every time I hung up my phone it was ringing again," said KEYE morn-See DIGITAL, B7 Homebuilder accused of deceptive practices is indicted (0 statesman.com Read the indictment against Peter Stucky with this story online. "It's good that somebody's trying to make him own up to this," said Gary Smith, a subcontractor who says he is owed money. "It ain't fair to treat people the way he did." Williamson County District Attorney John Bradley said state District Judge Burt Carnes is expected to issue an arrest warrant for Stucky in the next few days.

An attorney for Stucky could not be reached for comment. The indictment concerns 28 homes built in the Mallard subdivision in Taylor and the Son-terra subdivision in Jarrell, Williamson County See INDICT, B7 Subcontractors say Stucky owes them about $200,000 By Miguel Liscano AMERICAN-STATESMAN STAFF A Williamson County grand jury has indicted a Central Texas homebuilder on 37 felony counts that, in part, accuse him of selling homes without paying about $200,000 for construction services from numerous subcontractors. Peter Stucky, 53, was indicted on one count of theft of service, 21 counts of securing execution of a document by deception and 15 counts of misapplication of trust funds. The charges range from a state jail felony, punishable by up to two years in state jail, to a second-degree felony, which carries a maximum of 20 years in prison. Stucky was previously charged with six counts of perjury, a Class A misdemeanor punishable by a year in jail.

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