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Penney’splan boostsstock

J.C. Penney Co.shares soared18.8 percentThursday after thedepartment storechain delivereda 2012 profitoutlook that’s wellabove analysts’projections. Thecompany expectsadjusted earningsper share to beat least $2.16for the fiscal year,above analysts’$1.60 pershare estimate,according toFactSet. Penney’snew CEO, RonJohnson, who wasthe mastermindbehind thesuccessful AppleInc. stores, laidout an aggressiveplan Wednesdayto reinvent thebusiness.

More Pepsibrands hit$1 billion

PepsiCo Inc. saidThursday that threemore of its brandshave surpassed$1 billion in annualrevenue. PepsiCosaid Diet MountainDew, Brisk andStarbucks ready-to-drink beverages eachhit this key measure.PepsiCo sells Briskand Starbucksthrough partnershipswith Unilever andStarbucks Corp.,respectively. PepsiConow has 22 billion-dollar brands.

Mortgagerate rise isfirst in month

The average rateon the 30-year fixedmortgage rose thisweek for the first timein a month, thoughit remained below 4percent for the eighthstraight week. FreddieMac said the averagerate on the 30-yearfixed mortgage roseto 3.98 percent, upfrom 3.88 percentthe previous week,which was the lowestlevel on record. Theaverage on the 15-year fixed mortgagealso rose to 3.24percent, from 3.17percent.

Court blocksChevronmove

A U.S. appeals courtblocked ChevronCorp. from using aNew York law to tryto bar a group ofEcuadorians fromcollecting on an$18 billion judgmentin an environmentaldamage lawsuit.The Manhattan-based appeals courtThursday reverseda lower-court order,saying Chevron can’tuse the law againstthe plaintiffs beforethey try to collect.

— From wire reports

BY ROSS BOETTCHER

WORLD-HERALD STAFF WRITER

The president and chief execu-tive of Omaha-based Gavilon, theformer com-modity-tradingarm of ConAgraFoods Inc., saidThursday that ifthe company issold, it will main-tain a significantpresence andemployee base inOmaha.

Gavilon’s own-er, Ospraie Man-agement of New York City, saidlast week that it was exploring amultibillion-dollar sale of the com-pany. Thursday, Greg Heckman,Gavilon’s chief, was asked about asale during an Association for Cor-

porate Growth meeting at HappyHollow Country Club.

“As long as I’ve got something tosay about it,” he said, “we’ll alwayshave a large part of our employeebase here.”

Since the company is in com-modities, an industry Heckmandescribed as one rooted in the re-lationship between “man and ma-chine,” he said the best people tohandle those jobs are in Omaha,where there’s a solid base of quali-fied workers.

“People are such a core part of acommodities business,” Heckmansaid. “A lot of those people are re-ally set here, so you can come upwith any scenario. ... There willalways be a core group in Omaha.I just don’t see how we wouldn’t al-ways be here.”

Gavilon is the 19th-largest pri-vately owned company in the

United States and the third-largestgrain storage company. It employs350 people at its Omaha headquar-ters and 40,000-square-foot tradingfloor that is leased from ConAgraat its downtown Omaha campus.The company has about 2,000 em-ployees at more than 300 locations,mostly in the United States.

After being divested from Con-Agra in 2008, just before the globalfinancial crisis hit, Gavilon has in-creased its sales and scope signifi-cantly.

During the past three years,Heckman and the company’s busi-ness development team have led13 completed acquisitions and theconstruction of 14 significant proj-ects, and established 10 new officespaces, including one in Ukraine,a country that Heckman said willneed to raise its agricultural pro-duction to help meet future com-

modity and food demands.For all of last year, the company

distributed 38 million tons of grainand 6 million tons of fertilizer, aswell as 350,000 barrels of crude oilevery day.

Being privately owned has al-lowed Gavilon some of the flex-ibility to make the growth movesit has since 2008, Heckman said.The company still has to report itsfinances to investment banks andconsult with Ospraie’s board oncertain big-ticket items, but for themost part Heckman and his man-agement team are free to run their“deal shop” within the company asthey wish.

“I love being private,” he said. “Idon’t know if we’ll always be pri-vate, but I love being private.”

Heckman’s talk ranged fromGavilon’s history, which dates to1865, when the company was the

Peavey Group, to the company’sbreakup with ConAgra after thetrading group became less and lessof a core component to the pack-aged food giant’s long-term plans.

And because Gavilon also is in-volved in energy trading, storageand distribution, Heckman com-mented on the Keystone XL pipe-line scuffle raging in WashingtonD.C. This month, the U.S. StateDepartment and President BarackObama formally rejected the pipe-line proposal.

“If you’ve got to reroute it, orwhatever, there’s got to be a wayto do (the project),” said Heckman,who said he was speaking for him-self, not Gavilon. “We’ve got smartpeople in this country, we should beable to figure out a way to do that.”

Contact the writer:402-444-1414, ross.boettcher@owh.comtwitter.com/rossboettcher

CEO says if Gavilon is sold, ‘core group’ to stay in Omaha

Heckman

BY CINDY GONZALEZ

WORLD-HERALD STAFF WRITER

HearthStone Homes, one of the Omaha ar-ea’s biggest homebuilders, has failed to paya $17.5 million loan and its bank is seekingcontrol of nearly 50 houses, according to alawsuit filed in Douglas County.

In the suit filed Wednesday, Wells FargoBank said HearthStone missed a Mondaydeadline to pay $17,498,123. The bank askedthe court to assign an independent party tosecure and ensure completion of 46 single-family homes in various phases of construc-

tion.A hearing has been set for Feb. 1 with

Judge Thomas A. Otepka.“Due to the lack of funds available to

HearthStone Homes to complete construc-tion (and) maintain the real estate, therepresently exists a manifest danger of mate-rial and physical injury, as well as immedi-ate and ongoing damage to the character andvalue of the real estate,” the lawsuit said.

To “prevent further damage,” Wells Far-go said, the bank needs to take over main-tenance of the grounds and preservation ofutility service at the properties.

Scott Kinkaid, a HearthStone vice presi-dent who has been with the company 12years, said it’s unfortunate that Wells Fargoturned to legal action when it knew Hearth-Stone had been working toward a solution.

“Times are tough,” he said. “We’re puttingplans in place to get through it.”

Kinkaid said that multiple investors haveshown interest in HearthStone and that own-er John Smith was coming close to a decisionthat would keep the company in the Omahaarea another 40-plus years.

“We’d been working with them in goodfaith,” Kinkaid said of Wells Fargo, addingthat HearthStone had told the bank it wouldhave a solution by Friday. The bank chosethe lawsuit instead.

Angie Kaipust, Wells Fargo spokeswoman,said Thursday the bank is seeking “what’s

best” for all parties with an interest in the 46homes identified in the lawsuit.

“Our goal is to make sure those homes getconstructed, buyers get their homes and thatcontractors and subcontractors get paid.”

Kinkaid holds out hope the bank will with-draw its lawsuit.

He said that the $17.5 million loan withWells Fargo included funds for land as wellas houses and that HearthStone’s inventoryincludes homes other than the 46 financedby Wells Fargo. HearthStone, he said, hasabout 90 houses in various stages of produc-tion and operations are ongoing. Three newcontracts were signed Wednesday.

“There are other funding mechanismsmoving along just fine, and we continue to

Bankasks for control of 46HearthStonehouses■ Wells Fargo acts after the struggling builder misses apayment deadline on a $17.5 million loan.

BY STEVE JORDON

WORLD-HERALD STAFF WRITER

Werner Enterprises Inc. ofOmaha reported net incomeof $29.4 million, or 40 centsper share, in the three monthsthat ended Dec. 31, a 21.8 per-cent increase from the sameperiod last year, on a 9.7 per-cent increase in revenue to$507.9 million.

The trucking company said2011 net income reached a re-cord $102.8 million, or $1.40per share, up 28.2 percentfrom 2010, and revenue in-creased 10.3 percent to $2 bil-lion. The quarterly increasewas the eighth year-over-yearimprovement of more than 20percent.

Freight demand improvedfromSeptember toDecember,followed by a normal seasonaldecline in mid-December, thecompany said. The increaseddemand is due more likelyto limited truckload capacitythan increased economic ac-tivity, Werner said.

Average revenue per milewas up 4.6 percent in thefourth quarter from a yearearlier. Werner said it plansto keep its fleet at about 7,300trucks, but the count wasslightly lower because of“the increasingly challengingdriver market.”

Regulations on truck emis-sions have increased the priceof new trucks, making it moredifficult for some competitorsto upgrade their fleets, Wer-ner said. Diesel prices were63 cents a gallon higher inthe fourth quarter than a yearearlier and 41 cents higher sofar this year.

Thecompanysaid itscapitalspending totaled $232.2 mil-lion in 2011 and this yearwould be between $160 mil-lion and $210 million.

Contact the writer:402-444-1080, steve.jordon@owh.comtwitter.com/buffettOWH

WERNER ENTERPRISES

Truckingfirmpostsrecordprofitsfor2011

The breakfast scrambleTaco Bell enters the fast-food morningcompetition as it introduces breakfastitems in 14 states. Page 3D

amble

DAVE CRO Y / THE WORLD -HERA LD

The Omaha-Council Bluffs area’sretail market is picking up speedfaster than in other parts of thecountry, experts in the industry saidthis week.

“Some retailers miss the boatwhen they don’t look at the Midwestand only look at the coasts,” saidSusan Flesher, director of real estatefor Einstein Bros Bagels, based inLakewood, Colo. “Omaha has one ofthe lowest unemployment rates in thecountry. I think someone has moneyto spend here.”

Flesher realized Omaha’s potentialfor growth during her previous jobabout two years ago when she broughtPanda Express to the area and saw itssuccess. Now she’s hoping to do thesame for Einstein Bros Bagels.

Flesher attended the Interna-tional Council of Shopping Centers’Heartland States Idea Exchange andAlliance Program at the CenturyLinkCenter Omaha this week in hopes offinding potential sites in the area. Shewas among more than 180 retailers,public officials, developers and bro-kers sharing ideas and making dealsat the two-day conference.

Flesher said her company is hopingto expand to Omaha, Lincoln, CouncilBluffs and the Kansas City area.

“I like the Midwest, and if you grewup here, you get it,” she said. “Omahahas a great economic development

Omahapulling inretailersLow unemployment helpscity attract new businesses

BY LEIA MENDOZA | WORLD-HERALD STAFF WRITER

ONLY IN THE WORLD-HERALD

See Retail market: Page 2

ONLY IN THE WORLD-HERALD

See HearthStone: Page 2

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