Well: Myths of Weight Loss Are Plentiful, Researcher Says

If schools reinstated physical education classes, a lot of fat children would lose weight. And they might never have gotten fat in the first place if their mothers had just breast fed them when they were babies. But be warned: obese people should definitely steer clear of crash diets. And they can lose more than 50 pounds in five years simply by walking a mile a day.

Those are among the myths and unproven assumptions about obesity and weight loss that have been repeated so often and with such conviction that even scientists like David B. Allison, who directs the Nutrition Obesity Research Center at the University of Alabama at Birmingham, have fallen for some of them.

Now, he is trying to set the record straight. In an article published online today in The New England Journal of Medicine, he and his colleagues lay out seven myths and six unsubstantiated presumptions about obesity. They also list nine facts that, unfortunately, promise little in the way of quick fixes for the weight-obsessed. Example: “Trying to go on a diet or recommending that someone go on a diet does not generally work well in the long term.”

Obesity experts applauded this plain-spoken effort to dispel widespread confusion about obesity. The field, they say, has become something of a quagmire.

“In my view,” said Dr. Jeffrey M. Friedman, a Rockefeller University obesity researcher, “there is more misinformation pretending to be fact in this field than in any other I can think of.”

Others agreed, saying it was about time someone tried to set the record straight.

“I feel like cheering,” said Madelyn Fernstrom, founding director of the University of Pittsburgh Weight Management Center. When it comes to obesity beliefs, she said, “We are spinning out of control.”

Steven N. Blair, an exercise and obesity researcher at the University of South Carolina, said his own students believe many of the myths. “I like to challenge my students. Can you show me the data? Too often that doesn’t come into it.”

Dr. Allison sought to establish what is known to be unequivocally true about obesity and weight loss.

His first thought was that, of course, weighing oneself daily helped control weight. He checked for the conclusive studies he knew must exist. They did not.

“My goodness, after 50-plus years of studying obesity in earnest and all the public wringing of hands, why don’t we know this answer?” Dr. Allison asked. “What’s striking is how easy it would be to check. Take a couple of thousand people and randomly assign them to weigh themselves every day or not.”

Yet it has not been done.

Instead, people often rely on weak studies that get repeated ad infinitum. It is commonly thought, for example, that people who eat breakfast are thinner. But that notion is based on studies of people who happened to eat breakfast. Researchers then asked if they were fatter or thinner than people who happened not to eat breakfast — and found an association between eating breakfast and being thinner. But such studies can be misleading because the two groups might be different in other ways that cause the breakfast eaters to be thinner. But no one has randomly assigned people to eat breakfast or not, which could cinch the argument.

So, Dr. Allison asks, why do yet another study of the association between thinness and breakfast? “Yet, I can tell you that in the last two weeks I saw an association study of breakfast eating in Islamabad and another in Inner Mongolia and another in a country I never heard of.”

“Why are we doing these?” Dr. Allison asked. “All that time and effort is essentially wasted. The question is: ‘Is it a causal association?’” To get the answer, he added, “Do the clinical trial.”

He decided to do it himself, with university research funds. A few hundred people will be recruited and will be randomly assigned to one of three groups. Some will be told to eat breakfast every day, others to skip breakfast, and the third group will be given vague advice about whether to eat it or not.

As he delved into the obesity literature, Dr. Allison began to ask himself why some myths and misconceptions are so commonplace. Often, he decided, the beliefs reflected a “reasonableness bias.” The advice sounds so reasonable it must be true. For example, the idea that people do the best on weight-loss programs if they set reasonable goals sounds so sensible.

“We all want to be reasonable,” Dr. Allison said. But, he said, when he examined weight-loss studies he found no consistent association between the ambitiousness of the goal and how much weight was lost and how long it had stayed off. This myth, though, illustrates the tricky ground weight-loss programs have to navigate when advising dieters. The problem is that on average people do not lose much – 10 percent of their weight is typical – but setting 10 percent as a goal is not necessarily the best strategy. A very few lose a lot more and some people may be inspired by the thought of a really life-changing weight loss.

“If a patient says, ‘Do you think it is reasonable for me to lose 25 percent of my body weight,’ the honest answer is, ‘No. Not without surgery,’” Dr. Allison said. But, he said, “If a patient says, ‘My goal is to lose 25 percent of my body weight,’ I would say, ‘Go for it.’”

Yet all this negativism bothers people, Dr. Allison conceded. When he talks about his findings to scientists, they often say: “O.K., you’ve convinced us. But what can we do? We’ve got to do something.” He replies that scientists have an ethical duty to make clear what is established and what is speculation. And while it is fine to recommend things like bike paths or weighing yourself daily, scientists must make sure they preface their advice with the caveat that these things seem sensible but have not been proven.

Among the best established methods is weight-loss surgery, which, of course, is not right for most people. But surgeons have done careful studies to show that on average people lose substanial amounts of weight and their health improves, Dr. Allison said. For dieters, the best results occur with structured programs, like ones that supply complete meals or meal replacements.

In the meantime, Dr. Allison said, it is incumbent upon scientists to change their ways. “We need to do rigorous studies,” he said. “We need to stop doing association studies after an association has clearly been demonstrated.”

“I never said we have to wait for perfect knowledge,” Dr. Allison said. But, as John Lennon said, “Just give me some truth.”

Read More..

Well: Myths of Weight Loss Are Plentiful, Researcher Says

If schools reinstated physical education classes, a lot of fat children would lose weight. And they might never have gotten fat in the first place if their mothers had just breast fed them when they were babies. But be warned: obese people should definitely steer clear of crash diets. And they can lose more than 50 pounds in five years simply by walking a mile a day.

Those are among the myths and unproven assumptions about obesity and weight loss that have been repeated so often and with such conviction that even scientists like David B. Allison, who directs the Nutrition Obesity Research Center at the University of Alabama at Birmingham, have fallen for some of them.

Now, he is trying to set the record straight. In an article published online today in The New England Journal of Medicine, he and his colleagues lay out seven myths and six unsubstantiated presumptions about obesity. They also list nine facts that, unfortunately, promise little in the way of quick fixes for the weight-obsessed. Example: “Trying to go on a diet or recommending that someone go on a diet does not generally work well in the long term.”

Obesity experts applauded this plain-spoken effort to dispel widespread confusion about obesity. The field, they say, has become something of a quagmire.

“In my view,” said Dr. Jeffrey M. Friedman, a Rockefeller University obesity researcher, “there is more misinformation pretending to be fact in this field than in any other I can think of.”

Others agreed, saying it was about time someone tried to set the record straight.

“I feel like cheering,” said Madelyn Fernstrom, founding director of the University of Pittsburgh Weight Management Center. When it comes to obesity beliefs, she said, “We are spinning out of control.”

Steven N. Blair, an exercise and obesity researcher at the University of South Carolina, said his own students believe many of the myths. “I like to challenge my students. Can you show me the data? Too often that doesn’t come into it.”

Dr. Allison sought to establish what is known to be unequivocally true about obesity and weight loss.

His first thought was that, of course, weighing oneself daily helped control weight. He checked for the conclusive studies he knew must exist. They did not.

“My goodness, after 50-plus years of studying obesity in earnest and all the public wringing of hands, why don’t we know this answer?” Dr. Allison asked. “What’s striking is how easy it would be to check. Take a couple of thousand people and randomly assign them to weigh themselves every day or not.”

Yet it has not been done.

Instead, people often rely on weak studies that get repeated ad infinitum. It is commonly thought, for example, that people who eat breakfast are thinner. But that notion is based on studies of people who happened to eat breakfast. Researchers then asked if they were fatter or thinner than people who happened not to eat breakfast — and found an association between eating breakfast and being thinner. But such studies can be misleading because the two groups might be different in other ways that cause the breakfast eaters to be thinner. But no one has randomly assigned people to eat breakfast or not, which could cinch the argument.

So, Dr. Allison asks, why do yet another study of the association between thinness and breakfast? “Yet, I can tell you that in the last two weeks I saw an association study of breakfast eating in Islamabad and another in Inner Mongolia and another in a country I never heard of.”

“Why are we doing these?” Dr. Allison asked. “All that time and effort is essentially wasted. The question is: ‘Is it a causal association?’” To get the answer, he added, “Do the clinical trial.”

He decided to do it himself, with university research funds. A few hundred people will be recruited and will be randomly assigned to one of three groups. Some will be told to eat breakfast every day, others to skip breakfast, and the third group will be given vague advice about whether to eat it or not.

As he delved into the obesity literature, Dr. Allison began to ask himself why some myths and misconceptions are so commonplace. Often, he decided, the beliefs reflected a “reasonableness bias.” The advice sounds so reasonable it must be true. For example, the idea that people do the best on weight-loss programs if they set reasonable goals sounds so sensible.

“We all want to be reasonable,” Dr. Allison said. But, he said, when he examined weight-loss studies he found no consistent association between the ambitiousness of the goal and how much weight was lost and how long it had stayed off. This myth, though, illustrates the tricky ground weight-loss programs have to navigate when advising dieters. The problem is that on average people do not lose much – 10 percent of their weight is typical – but setting 10 percent as a goal is not necessarily the best strategy. A very few lose a lot more and some people may be inspired by the thought of a really life-changing weight loss.

“If a patient says, ‘Do you think it is reasonable for me to lose 25 percent of my body weight,’ the honest answer is, ‘No. Not without surgery,’” Dr. Allison said. But, he said, “If a patient says, ‘My goal is to lose 25 percent of my body weight,’ I would say, ‘Go for it.’”

Yet all this negativism bothers people, Dr. Allison conceded. When he talks about his findings to scientists, they often say: “O.K., you’ve convinced us. But what can we do? We’ve got to do something.” He replies that scientists have an ethical duty to make clear what is established and what is speculation. And while it is fine to recommend things like bike paths or weighing yourself daily, scientists must make sure they preface their advice with the caveat that these things seem sensible but have not been proven.

Among the best established methods is weight-loss surgery, which, of course, is not right for most people. But surgeons have done careful studies to show that on average people lose substanial amounts of weight and their health improves, Dr. Allison said. For dieters, the best results occur with structured programs, like ones that supply complete meals or meal replacements.

In the meantime, Dr. Allison said, it is incumbent upon scientists to change their ways. “We need to do rigorous studies,” he said. “We need to stop doing association studies after an association has clearly been demonstrated.”

“I never said we have to wait for perfect knowledge,” Dr. Allison said. But, as John Lennon said, “Just give me some truth.”

Read More..

Facebook Beats Forecasts on Earnings and Revenue

SAN FRANCISCO — Facebook made a lot of money in the last quarter. It also spent a lot. And that made investors once again cautious about the company.

After an eight-month roller coaster ride on the public markets, Facebook did well in the fourth quarter of 2012 by aggressively ramping up advertisements aimed at its users, including on mobile phones. In its financial report on Wednesday, it beat expectations, increasing revenue by a handsome 40 percent from the same period a year ago.

But its expenses also climbed rapidly as the company hired engineers and built data centers, causing profit to dip from the last quarter in 2011. With that, Wall Street lost some enthusiasm.

Facebook shares, which had closed at $31.24 on Wednesday, fell more than 3 percent in after-hours trading after the results were released.

In recent weeks, the stock had recovered much of the ground it lost in the eight months since its introduction last year.

“The quarter was a little like a cold shower after you’ve been out all night — it’s something that makes you sober up very quickly,” said Jordan Rohan, an analyst at Stifel Nicolaus, adding that the numbers made it clear that Facebook intended to spend more “to go after the opportunities before them.”

In the conference call with analysts after the earnings report, Mark Zuckerberg, chief executive of Facebook, cautioned Wall Street that profit might not grow as fast as investors would like. That, he said, was because Facebook would continue to spend money hiring people and building products for the future, like the new search tool it introduced earlier this month. “It’s important to start planting seeds,” he said.

The most closely watched part of the earnings report was how much money the company brought in from its mobile users; most people log in to the site using their cellphones. Facebook said advertising on the mobile newsfeed accounted for 23 percent of its advertising revenue, up from 14 percent in the third quarter but slightly lower than some analysts had forecast.

Mr. Zuckerberg predicted that the company would eventually make more money on every minute spent on the Facebook mobile app than on the desktop computer.

Facebook reported fourth-quarter revenue of $1.59 billion, compared with $1.52 billion predicted by analysts surveyed by Bloomberg. The company earned $64 million in net income, or 3 cents a share. Excluding certain items, Facebook said it had a net income of $426 million in the fourth quarter, or 17 cents a share, beating analysts’ expectations by 2 cents.

Facebook’s biggest, long-term challenge remains how to profit from the enormous piles of personal data of its one billion users without alienating them or inviting the wrath of government regulators in the United States and abroad. The company reported on Wednesday that it had 1.06 billion active users — those who log in at least once a month.

Secondarily, it must figure out a way to profit abroad. Most of its revenue still comes from North America and to a lesser extent Europe.

Despite the stock’s decline after the earnings report, it is still much recovered since last year’s slump. It opened at $38 a share last May, but shortly after that, the stock plummeted as Wall Street soured on its ability to increase profit as fast as investors wanted. Shares sank to half the public offering price last September.

But the company focused on its advertising business and released a series of new products aimed at taking on some of its biggest rivals, including Google and Apple. Mr. Zuckerberg took the initiative to reassure investors it had their interests at heart. The improvement in the share price in recent weeks suggests that the company’s charm offensive is paying off.

In the last few months, Facebook has floated several trial balloons aimed at pleasing Wall Street and, in particular, convincing investors that it can thrive in the mobile era.

It offered marketers more refined targeting options, including Facebook Exchange, which allows companies to track users as they are browsing and shopping for products around the Web and lets companies show advertisements for those products when the users log back on to Facebook.

Before Christmas last year, in a bid to step into territory dominated by Amazon, it introduced the Gifts application, which lets users buy goods and services for their Facebook friends, and in turn, share with the company an extremely valuable piece of data: their credit card numbers. The company made clear in the conference call on Wednesday that this would not be an immediate moneymaker.

Read More..

Egyptian Army Chief Warns of Collapse Amid Chaos

Tara Todras-Whitehill for The New York Times

An Egyptian protester throws a tear gas canister during clashes with riot police in Cairo on Tuesday.

CAIRO — As three Egyptian cities defied President Mohamed Morsi’s attempt to quell the anarchy spreading through their streets, the nation’s top general warned Tuesday that the state itself was in danger of collapse if the feuding civilian leaders could not agree on a solution to restore order.

Thousands of residents poured into the streets of the three cities, protesting a 9 p.m. curfew with another night of chants against Mr. Morsi and assaults on the police.

The president appeared powerless to stop them: he had already granted the police extralegal powers to enforce the curfew and then called out the army as well. His allies in the Muslim Brotherhood and their opposition also proved ineffectual in the face of the crisis, each retreating to their corners, pointing fingers of blame.

The general’s warning punctuated a rash of violent protests across the country that has dramatized the near-collapse of the government’s authority. With the city of Port Said proclaiming its nominal independence, protesters demanded the resignation of Mr. Morsi, Egypt’s first freely elected president, while people across the country appeared convinced that taking to the streets in protests was the only means to get redress for their grievances.

Just five months after Egypt’s president assumed power from the military, the cascading crisis revealed the depth of the distrust for the central government left by decades of autocracy, two years of convoluted transition and his own acknowledged missteps in facing the opposition. With cities in open rebellion and the police unable to tame crowds, the very fabric of society appears to be coming undone.

The chaos has also for the first time touched pillars of the long-term health of Egypt’s economy, already teetering after two years of turbulence since the ouster of Hosni Mubarak. While a heavy deployment of military troops along the Suez Canal — a vital source of revenue — appeared to insulate it from the strife in Port Said, Suez and Ismailia, the clashes near Tahrir Square in Cairo spilled over for the first time into an armed assault on the historic Semiramis InterContinental Hotel, sending tremors of fear through the vital tourism sector.

With the stakes rising and no solution in sight, Gen. Abdul Fattah el-Sisi, the defense minister, warned Egypt’s new Islamist leaders and their opponents that “their disagreement on running the affairs of the country may lead to the collapse of the state and threatens the future of the coming generations.”

“Political, economic, social and security challenges” require united action “by all parties” to avoid “dire consequences that affect the steadiness and stability of the homeland,” General Sisi said in an address to military cadets that was later relayed as public statement from his spokesman. And the acute polarization of the civilian politics, he suggested, had now becoming a concern of the military because “to affect the stability of the state institutions is a dangerous matter that harms Egyptian national security.”

Coming just months after the military relinquished the power it seized at the ouster of Mr. Mubarak, General Sisi’s rebuke to the civilian leaders inevitably raised the possibility that the generals might once again step into civilian politics. There was no indication of an imminent coup.

Analysts familiar with General Sisi’s thinking say that unlike his predecessors, he wants to avoid any political entanglements. But the Egyptian military has prided itself on its dual military and political role since Col. Gamal Abdel Nasser’s coup more six decades ago. And General Sisi insisted Tuesday it would remain “the solid mass and the backbone upon which rest the Egyptian state’s pillars.”

With the army now caught between the president’s instructions to restore order and the citizens’ refusal to comply, he said, the “armed forces are facing a serious dilemma” as they seek to end the violence without “confronting citizens and their right to protest.”

The attack on the Semiramis Hotel, between the American Embassy and the Nile in one of the most heavily guarded neighborhoods of the city, showed how much security had deteriorated. And it testified to the difficult task that the civilian government faces in trying to rebuild public security and trust.

Kareem Fahim and Mayy El Sheikh contributed reporting from Cairo.

Kareem Fahim and Mayy El Sheikh contributed reporting from Cairo.

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Investors Shrug Off a Weak Earnings Report From Amazon

A glorious future beats a glorious past.

Investors decimated Apple last week when it appeared that the world’s mightiest profit machine might be slowing down just a tad. But they cheered on Tuesday when Amazon said its fourth-quarter sales and earnings fell short of expectations. Oh, and expect a miserable first quarter, too.

Shares in Amazon immediately jumped nearly 10 percent in after-hours trading, about the same amount that Apple fell after releasing its news.

What caught the eye of investors was that operating margins as a percent of consolidated sales rose to 3.2 percent, from 2.7 percent a year ago.

“The carrot for Amazon investors is improvements to margin over time,” said Gene Munster, an analyst with Piper Jaffray. Apple, on the other hand, would need to build a cheaper iPhone to keep growing as fast as it has been, which would slice into its margins.

For more than a decade, Amazon has teetered between minimal profits and no profits. In 2012, it said Tuesday, it lost money. But Wall Street has always been more about promises than results, and Amazon is always on the verge of converting its overwhelming online presence into buckets of cash.

“As long as the dream is there, the stock is going to go up,” Mr. Munster said.

The short-term news Tuesday was not good. Earnings per share fell to 21 cents from 38 cents in the fourth quarter of 2011. Although fourth-quarter revenue went up 22 percent to $21.27 billion, both revenue and earnings did not meet expectations. Analysts had predicted revenue of $22.2 billion and earnings of 27 cents a share.

Forget about all that. What mattered was the improvement in margin.

Amazon has had plenty of opportunities to raise its margins in the past, but has instead routinely chosen to reward customers with subsidized shipping and higher discounts. In a conference call with analysts on Tuesday, Tom Szkutak, Amazon’s chief financial officer, repeated this mantra.

“Putting customers first is the only reliable way to create lasting value for shareholders,” he said.

Investors took some time to buy into this idea. “Wall Street gets in a kerfuffle when we lower product prices and invest heavily in the future,” Jeff Bezos, Amazon’s chief executive, acknowledged in 2005, at a point when the stock had tumbled 40 percent in less than a year. “So don’t buy our stock — instead buy our products and enjoy our investments.”

That was bad advice. The stock is up almost 700 percent since then, hitting a record this month.

Shares in Amazon fell nearly $16 in regular trading Tuesday, to $260.35. After-hours, shares went up more than $22.

Jason Moser, an analyst with the Motley Fool, who owns shares in the retailer, said that “many investors, myself included, will more than likely watch this story play out for as long as it takes.”

Mr. Moser added in an e-mail message that the market was “betting a lot on what Amazon hasn’t done yet and betting on the fact that it will do it based on what it’s doing now.” He added, “Kind of a ‘build it and they will come’ sort of thing.”

Some analysts are still skeptical.

“It’s much easier to sell goods at cost the way Amazon does than sell goods at a 40 percent margin like Apple,” said Colin Gillis of BGC Partners. “Once you’ve trained your customers to buy at cost, it’s difficult to train them away from it.”

Still, Mr. Gillis said: “Who’s going to undercut Amazon? They’re only making half a cent on every dollar. Who can run a business at less profit?”

Amazon continues to expand. Last year, the retailer announced it was building a million-square-foot warehouse in Patterson, Calif., about 85 miles southeast of San Francisco. Last week, it announced another million-square-foot warehouse barely 30 miles north of Patterson, in Tracy. It obviously has designs on fast (if not quite same-day) shipping to the seven million generally affluent, Internet-using residents of the Bay Area.

“We’ll continue to expand our footprint over time and become even closer and closer to customers,” Mr. Szkutak said on the conference call.

Many of those shoppers will be buying material that originated not with Amazon but with more than two million third-party sellers. The volume of items sold by these firms during the 2012 holidays was up 40 percent from 2011. Some of these sellers merely used Amazon to digitally display their goods, while others also used the retailer to ship it.

Amazon said earlier this month that third-party sellers sold enough Santa hats during the holiday for Santa to wear a new hat every day for the next 127 years, and enough guitar picks to give one to every attendee of Woodstock — about a half-million. Analysts expect third-party sales to outpace Amazon deals over the next few years.

Recently several states, including California, successfully made deals with Amazon to collect sales tax. That had the effect of raising prices on many Amazon items by more than 5 percent. Land-based retailers, which had agitated for years for such a move, thought the tax might finally level the playing field.

Their hopes might be misplaced. Any drop in online sales from the collecting of sales tax tends to be temporary, said Scot Wingo, chief executive of ChannelAdvisor, which helps retailers sell online, including on Amazon.

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To Open Eyes, W-2s List Cost of Health Plans

WASHINGTON — As workers open their W-2 forms this month, many will see a new box with information on the total cost of employer-sponsored health insurance coverage. To some, it will be a surprise, perhaps even a shock.

Workers often have little idea how much they and their employers are paying for coverage. In many cases, economists say, workers give up cash compensation to get and keep health benefits.

The disclosures, required by the 2010 health care law, are meant to make workers more cost-conscious. Health benefits are still tax-free. But labor unions and employer groups say it could be easier to tax them in the future, now that employers must report their value to the government.

The new information appears in Box 12 of the standard W-2 form, with a two-letter code, DD. The box shows the “cost of employer-sponsored health coverage.” And that amount is not taxable, the Internal Revenue Service says on the back of the form.

Jay J. Makled, a union steward for the United Automobile Workers at the Ford plant in Dearborn, Mich., described his reaction after seeing that his health coverage cost nearly $16,000 last year: “It’s quite expensive. I was surprised to see how much the company was paying for that benefit.”

Hourly employees represented by the union there said they generally did not pay any of the premium.

The number on the W-2 form is supposed to reflect the part of the cost paid by the employer and the part paid by the employee.

Prof. Nicole Huberfeld, an expert on health law at the University of Kentucky, who received her W-2 form on Monday, said, “Most people who get health insurance from their employers have no idea how much it costs.”

“People are often shocked when they see the cost, $12,000 to $16,000 a year,” Ms. Huberfeld said. “Many Americans believe this is something they get free. But employers pay lower wages because they provide insurance.”

In 2012, according to an annual survey by the Kaiser Family Foundation, premiums for employer-sponsored health insurance averaged $5,615 a year for single coverage and $15,745 for family coverage. Over five years, the costs have increased 25 percent for individual coverage and 30 percent for family coverage.

“Health coverage is a big piece of people’s income and a large part of the social welfare budget,” said C. Eugene Steuerle, a tax economist at the Urban Institute. “But the benefits are not taxable, and most of the spending is hidden, so we don’t consider the trade-offs. If we want to get control of health care costs, people have to be aware of them.”

That is the goal of the disclosure requirement, which was proposed by a bipartisan group of senators: two Republicans, Charles E. Grassley of Iowa and Michael B. Enzi of Wyoming, and two Democrats, Max Baucus of Montana and Ron Wyden of Oregon.

Congress acted after Peter R. Orszag, then the director of the Congressional Budget Office, told lawmakers: “The economic evidence is overwhelming, the theory is overwhelming, that when your firm pays for your health insurance, you actually pay through reduced take-home pay. The firm is not giving that to you for free.”

The tax-free treatment of employer-provided health benefits is the largest tax break in the tax code, costing the government roughly $180 billion a year in lost revenue, or 80 percent more than the home mortgage interest deduction, according to the administration.

Katie W. Mahoney, the executive director of health policy at the U.S. Chamber of Commerce, said, “It’s useful for employees to know the value of coverage their employers provide.” But she said some employers worried that reporting the benefit on the W-2 form could lead to taxing the benefit.

“That’s not the intent of the current requirement,” Ms. Mahoney said. “But once the information is collected by the government, it’s very easy for another administration to have a different intent.”

An employee of the A.F.L.-C.I.O. whose health coverage was listed as costing more than $20,000 said: “That knocks my socks off. When I saw the number, my eyes popped out. I appreciate my employer all the more.”

The employee said he had been told not to discuss the cost publicly because the union did not want to suggest that some employees had “Cadillac coverage.”

An employer that fails to comply with the reporting requirement could be subject to penalties of $200 per W-2 form, up to a maximum of $3 million, tax lawyers said.

Employers are exempt from the reporting obligation if they are required to file fewer than 250 W-2 forms, the I.R.S. said. That could change, but the agency said employers would be given at least six months’ notice.

Read More..

To Open Eyes, W-2s List Cost of Health Plans

WASHINGTON — As workers open their W-2 forms this month, many will see a new box with information on the total cost of employer-sponsored health insurance coverage. To some, it will be a surprise, perhaps even a shock.

Workers often have little idea how much they and their employers are paying for coverage. In many cases, economists say, workers give up cash compensation to get and keep health benefits.

The disclosures, required by the 2010 health care law, are meant to make workers more cost-conscious. Health benefits are still tax-free. But labor unions and employer groups say it could be easier to tax them in the future, now that employers must report their value to the government.

The new information appears in Box 12 of the standard W-2 form, with a two-letter code, DD. The box shows the “cost of employer-sponsored health coverage.” And that amount is not taxable, the Internal Revenue Service says on the back of the form.

Jay J. Makled, a union steward for the United Automobile Workers at the Ford plant in Dearborn, Mich., described his reaction after seeing that his health coverage cost nearly $16,000 last year: “It’s quite expensive. I was surprised to see how much the company was paying for that benefit.”

Hourly employees represented by the union there said they generally did not pay any of the premium.

The number on the W-2 form is supposed to reflect the part of the cost paid by the employer and the part paid by the employee.

Prof. Nicole Huberfeld, an expert on health law at the University of Kentucky, who received her W-2 form on Monday, said, “Most people who get health insurance from their employers have no idea how much it costs.”

“People are often shocked when they see the cost, $12,000 to $16,000 a year,” Ms. Huberfeld said. “Many Americans believe this is something they get free. But employers pay lower wages because they provide insurance.”

In 2012, according to an annual survey by the Kaiser Family Foundation, premiums for employer-sponsored health insurance averaged $5,615 a year for single coverage and $15,745 for family coverage. Over five years, the costs have increased 25 percent for individual coverage and 30 percent for family coverage.

“Health coverage is a big piece of people’s income and a large part of the social welfare budget,” said C. Eugene Steuerle, a tax economist at the Urban Institute. “But the benefits are not taxable, and most of the spending is hidden, so we don’t consider the trade-offs. If we want to get control of health care costs, people have to be aware of them.”

That is the goal of the disclosure requirement, which was proposed by a bipartisan group of senators: two Republicans, Charles E. Grassley of Iowa and Michael B. Enzi of Wyoming, and two Democrats, Max Baucus of Montana and Ron Wyden of Oregon.

Congress acted after Peter R. Orszag, then the director of the Congressional Budget Office, told lawmakers: “The economic evidence is overwhelming, the theory is overwhelming, that when your firm pays for your health insurance, you actually pay through reduced take-home pay. The firm is not giving that to you for free.”

The tax-free treatment of employer-provided health benefits is the largest tax break in the tax code, costing the government roughly $180 billion a year in lost revenue, or 80 percent more than the home mortgage interest deduction, according to the administration.

Katie W. Mahoney, the executive director of health policy at the U.S. Chamber of Commerce, said, “It’s useful for employees to know the value of coverage their employers provide.” But she said some employers worried that reporting the benefit on the W-2 form could lead to taxing the benefit.

“That’s not the intent of the current requirement,” Ms. Mahoney said. “But once the information is collected by the government, it’s very easy for another administration to have a different intent.”

An employee of the A.F.L.-C.I.O. whose health coverage was listed as costing more than $20,000 said: “That knocks my socks off. When I saw the number, my eyes popped out. I appreciate my employer all the more.”

The employee said he had been told not to discuss the cost publicly because the union did not want to suggest that some employees had “Cadillac coverage.”

An employer that fails to comply with the reporting requirement could be subject to penalties of $200 per W-2 form, up to a maximum of $3 million, tax lawyers said.

Employers are exempt from the reporting obligation if they are required to file fewer than 250 W-2 forms, the I.R.S. said. That could change, but the agency said employers would be given at least six months’ notice.

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European Cloud Over Ford

DETROIT — Last year, Ford Motor broke ranks with other auto companies when it announced major cuts in its troubled European operations, including the closing of three factories, to address a sharp downturn in sales on the continent and an oversupply of vehicles.

On Tuesday, Ford, the second-biggest American automaker, behind General Motors, startled the industry again by predicting that Europe, a critical market, would get worse before it begins improving later this year.

Ford said European auto sales, including commercial vehicles, could fall as low as 13 million this year, and its own annual losses in the region could reach $2 billion. Europe is Ford’s second-largest market, after North America.

“The industry did 14 million last year, and that was the worst in 20 years,” Bob Shanks, Ford’s chief financial officer, said in an interview. “But the industry is continuing to decline, and we think 13 million is the trough.”

The dire predictions for Europe overshadowed what were otherwise positive fourth-quarter results, which Ford reported on Tuesday.

The company reported a 54 percent gain in adjusted fourth-quarter profit as strong earnings in North America compensated for heavy losses in Europe. Ford said it earned $1.6 billion in the fourth quarter of 2012 compared to $1.03 billion a year earlier, excluding the impact of tax-valuation allowances in 2011. Those allowances inflated last year’s fourth-quarter net income to $13.6 billion.

For the full year, Ford said it earned $5.67 billion, a 5 percent drop from $5.97 billion in 2011, not including the tax-valuation changes, which increased the 2011 earnings to $20.2 billion.

The auto market in Western Europe remains abysmal, but some analysts agree with Ford’s assessment that sales may be close to their low point and could start to recover late this year as the euro zone crisis subsides.

Analysts at Goldman Sachs forecast that European auto sales would fall an additional 2.2 percent in 2013, to 12.9 million vehicles. But they will rise 3.9 percent in 2014, Goldman predicted, as car buyers start to feel more secure about their economic prospects.

In the meantime, though, companies like General Motors’ Opel unit and PSA Peugeot Citröen are trying to make broad reductions in jobs and production capacity.

The recovery, if it comes, could be too late for many workers and even some of the manufacturers.

The companies that have suffered the most are those that depend on the mass market and on southern Europe, including Fiat, Peugeot and Renault. Steady declines in sales since 2007 have left two-thirds of European auto plants operating at a loss, Goldman Sachs analysts estimated.

North American sales have been a bright spot for the world’s automakers, and Ford is no exception. Ford’s overall revenue in the fourth quarter was $36.5 billion, a 5 percent increase from $34.6 billion in the same period a year earlier. For all of 2012, revenue was $134.3 billion, 1 percent less than $136.3 billion in 2011.

Healthy sales of new vehicles in North America resulted in good profit margins, particularly in the United States, where the overall industry grew 13 percent last year.

Ford said it had $1.87 billion in pretax earnings in North America during the quarter, a 110 percent increase from $889 million in the fourth quarter of 2011. For all of 2012, Ford had pretax profit of $8.34 billion in North America, compared to $6.19 billion in 2011.

But the company’s European operations continued to struggle as overall demand plunged, particularly in southern Europe.Ford reported a $732 million pretax loss in Europe for the fourth quarter, compared with a $190 million loss in the same period in 2011.

For all of 2012, Ford said it had a pretax loss of $1.75 billion in the region. By comparison, the company reported a loss of $27 million in Europe for all of 2011.

Investors, apparently shaken by the scale of the losses and Ford’s dismal forecast for 2013, sent the automaker’s shares down nearly 5 percent to $13.14 in Tuesday’s trading.

Jack Ewing contributed reporting from Frankfurt.

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Protests Grow on Fifth Day of Unrest in Egypt

Tara Todras-Whitehill for The New York Times

Egyptians in Port Said mourned on Monday for people killed in clashes with the police a day earlier.

PORT SAID, Egypt — The police fired indiscriminately into the streets outside their besieged station, a group of protesters arrived with a crate of gasoline bombs, and others cheered a masked man on a motorcycle who arrived with a Kalashnikov.

The growing chaos along the vital canal zone showed little sign of abating on Monday as President Mohamed Morsi called out the army to try to regain control of three cities along the Suez Canal whose growing lawlessness is testing the integrity of the Egyptian state.

In Port Said, street battles reached a bloody new peak with a death toll over three days of at least 45, with at least five more protesters killed by bullet wounds, hospital officials said.

Such violence has flared across Egypt with increasing frequency since President Hosni Mubarak was forced out by the revolution two years ago.

President Morsi had already declared a monthlong state of emergency here and in the other canal towns of Suez and Ismailia, applying a Mubarak-era law that virtually eliminates due process protections against abuse by the police. Angry crowds burned tires and hurled rocks at the police. And the police, with little training and less credibility, hunkered down behind barrages of tear gas, birdshot and occasional bullets.

The sense that the state was unraveling may have been strongest here in Port Said, where demonstrators have proclaimed their city an independent nation. But in recent days the unrest has risen in towns across the country and in Cairo as well. In the capital on Monday, a mob of protesters managed to steal an armored police vehicle, drive it to Tahrir Square and make it a bonfire.

After two years of torturous transition, Egyptians have watched with growing anxiety as the erosion of the public trust in the government and a persistent security vacuum have fostered a new temptation to resort to violence to resolve disputes, said Michael Hanna, a researcher at the New York-based Century Foundation who is now in Cairo. “There is a clear political crisis that has eroded the moral authority of the state,” he said.

And the spectacular evaporation of the government’s authority here in Port Said has put that crisis on vivid display, most conspicuously in the rejection of Mr. Morsi’s declarations of the curfew and state of emergency.

As in Suez and Ismailia, tens of thousands residents of Port Said poured into the streets in defiance just as a 9 p.m. curfew was set to begin. Bursts of gunfire echoed through the city for the next hours, and between 9 and 11 p.m. hospital officials raised the death count to seven from two.

When two armored personnel carriers approached a funeral Monday morning for some of the seven protesters killed the day before, a stone-throwing mob of thousands quickly chased them away. And within a few hours the demonstrators had resumed their siege of a nearby police station, burning tires to create a smoke screen to hide behind amid tear gas and gunfire.

Many in the city said they saw no alternative but to continue to stay in the streets. They complained that the hated security police remained unchanged and unaccountable even after Mr. Mubarak had been ousted. They saw no recourse in the justice system, which is also unchanged; they dismissed the courts as politicized, especially after the acquittals of all those accused of killing protesters during the revolution. Then came the death sentences handed down Saturday to 21 Port Said soccer fans for their role in a deadly brawl. The death sentences set off the current unrest here.

Nor, they said, did they trust the political process that brought to power Mr. Morsi and his Islamist allies in the Muslim Brotherhood. He had vowed to usher in the rule of law as “a president for all Egyptians.” But in November he used a presidential decree to temporarily stifle potential legal objections so that his Islamist allies could rushed out a new Constitution. His authoritarian move kicked off a sharp uptick in street violence leading to this weekend’s Port Said clashes.

“Injustice beyond imagination,” one man outside the morning funeral said of Mr. Morsi’s emergency decree, before he was drowned out a crowd of others echoing the sentiment.

“He declared a curfew, and we declare civil disobedience,” another man said.

“This doesn’t apply to Port Said because we don’t recognize him as our president,” said a third. “He is the president of the Muslim Brotherhood only.”

Kareem Fahim contributed reporting from Cairo.

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Yahoo Earnings Handily Beat Forecasts

SAN FRANCISCO — Marissa Mayer, just by being Marissa Mayer, has done more to move Yahoo forward in her first six months as chief executive than any of her five predecessors did over as many years.

An accomplished engineer and executive, Ms. Mayer joined Yahoo from Google as a Silicon Valley celebrity. Since then, just her presence at the company’s Sunnyvale, Calif., headquarters seems to have jolted Yahoo back to life. On Monday, Yahoo reported a good quarter, increasing revenue for the first time in four years and beating Wall Street expectations by 30 percent.

That pushed Yahoo’s stock to $20.91 in after-hours trading — a four-year high (but still well below the $31 Microsoft offered the company back in 2008).

Ms. Mayer attributed growth to a renewed focus on “people and products” in a call with analysts on Monday.

She has added new Yahoo fans by revamping Yahoo’s e-mail service and redesigning Flickr, the firm’s photo-sharing app, which sent the number of photo uploads rising 25 percent. Ms. Mayer said those improvements were a hint of more under way.

“We are off to a very good start,” Ms. Mayer told analysts. “We are making the world’s habits more inspiring and entertaining.”

She has also introduced several morale boosters since joining the company — including free cafeteria food and new iPhones and Android-powered phones — to staff members who were more accustomed to cost cutting and layoffs. In a further sign that the company was no longer considered a sinking ship, she lured another Silicon Valley tech star, Max Levchin, a PayPal co-founder, to Yahoo’s board last month.

But those were just the office things. Analysts were more impressed with improvements to the company’s search business. Yahoo outsourced it to Microsoft in 2009 and it has languished ever since, propped up only because of a revenue-guarantee clause in its contract with Microsoft that is set to expire in March. Yahoo’s search revenue rose 4 percent in the fourth quarter, to $482 million, compared with $465 million for the period a year earlier.

Over all, Yahoo reported net income in the fourth quarter of $272.3 million, or 23 cents a share, compared with $295.6 million, or 24 cents a share, in the period a year earlier.

The company said revenue was up 1.6 percent, to $1.35 billion.

The improvement to its search business was offset by continued declines in Yahoo’s display ad revenue. The company said it made $591 million in display ad sales last quarter, a 3 percent decline from the $612 million in the quarter a year ago.

Yahoo, once the biggest seller of display ads in the United States, went from a leading 15.5 percent share of all digital ad revenues in the United States in 2009, to an 8.4 percent share last year, even as total digital ad spending grew, according to eMarketer. Meanwhile, its competitor, Google, increased its share to 41 percent.

“More personalized content and increased product innovation will be key to getting us back to the path for display revenue growth,” Ms. Mayer said on the call.

The fourth-quarter results impressed analysts, but many remained skeptical.

“Marissa will have to protect Yahoo’s legacy business while positioning the company for future growth,” Colin Gillis, an Internet analyst at BGC Partners, said in an interview Monday. “That is not easy.”

With Ms. Mayer’s honeymoon with Wall Street expected to end soon, investors are eager to see whether she can deliver sustained growth. Yahoo, with 700 million monthly users, commands one of the largest audiences on the Web. But the company, an Internet pioneer, has been unable to attract advertisers and increase revenue.

As Ms. Mayer has acknowledged, Yahoo’s future growth may well depend on its mobile strategy. And without mobile hardware like a tablet computer, a browser or a social networking platform of its own, Yahoo has a long way to go.

The company continues to be outspent in research and development by Google, Apple, Facebook and Amazon. It also continues to have a hard time convincing Silicon Valley’s engineering talent to join Yahoo instead of its competitors.

Ms. Mayer has said Yahoo’s mobile growth may come from acquisitions of mobile app companies. In six months, Ms. Mayer has acquired three start-ups — Stamped, OnTheAir and Snip.it — for undisclosed sums, more for the engineering talent than the products.

“The road will only get harder,” said Mr. Gillis. But compared to Ms. Mayer’s disgraced immediate predecessor, Scott Thompson, who left the company after four months over embellishments on his résumé, Mr. Gillis added, “at least she got a honeymoon.”

This article has been revised to reflect the following correction:

Correction: January 28, 2013

Because of an editing error, an earlier version of this article misstated the percentage increase in Yahoo’s quarterly revenue. It was 1.6 percent, not 1.5 percent.

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