Space shuttle Discovery ready for voyage to museum

CAPE CANAVERAL, Fla. (AP) — Space shuttle Discovery has one last mission to complete.
At daybreak Tuesday, the oldest of NASA's retired shuttle fleet will leave its home at Kennedy Space Center for the final time, riding on top a modified jumbo jet.
Its destination: the Smithsonian Institution's hangar outside Washington, D.C.

The plane and jet will make a farewell flight over Cape Canaveral before heading north. The pair also will swoop over the nation's capital, including the National Mall, before landing in Virginia.
Space center workers arrived by the busloads Monday at the old shuttle landing strip, where the jet was parked with Discovery bolted on top. Security officers, firefighters, former shuttle workers and even astronauts all posed for pictures in front of Discovery.
The six astronauts who flew Discovery's final space trip a year ago were on hand to bid Discovery goodbye.
Discovery first launched in 1984 and flew 39 times in space, more than any other shuttle. It is the oldest of NASA's three surviving space shuttles and the first to head to a museum.
It will go on display at the Smithsonian's hangar at Dulles International Airport in Virginia, replacing Enterprise, the shuttle prototype that never made it to space but was used in landing tests in the late 1970s. Enterprise is bound for New York City's Intrepid Sea, Air & Space Museum.
"It's good to see her one more time, and it's great that Discovery is going to a good home. Hopefully, millions of people for many, many years to come will go see Discovery," said Steven Lindsey, the last astronaut to command Discovery. "It's also sad ... it's sad to see that the program is over."
NASA ended the shuttle program last summer after 30 years to focus on destinations beyond low-Earth orbit. Lindsey, no longer with NASA, now works in the commercial space industry, helping to develop a successor for launching American astronauts to the International Space Station.
Stephanie Stilson, a NASA manager who is heading up the transition and retirement of the three remaining shuttles, said Discovery looked as though it had just arrived from a ferry trip from the backup landing site in California, as it did so many times in years past.
"To see her like this is quite an amazing sight," Stilson said. "We're finally here" almost an exact year since Discovery launched and landed for good, she noted.
Discovery's list of achievements include delivering the Hubble Space Telescope to orbit, carrying the first Russian cosmonaut to launch on a U.S. spaceship, performing the first rendezvous with the Russian space station Mir with the first female shuttle pilot in the cockpit, returning Mercury astronaut John Glenn to orbit, and bringing shuttle flights back to life after the Challenger and Columbia accidents.
A white tail cone covers the three replica main engines at the back end of Discovery, to keep them safe during the ferry flight and provide for better aerodynamics. (Only the nozzles are there, no massive power assemblies.)
The original air lock is on board that spacewalking astronauts used to step out into the vacuum; Discovery is the only shuttle keeping one because it's considered the spacecraft of historic record. The robot arm is already in Virginia and will be placed on side-by-side display.
NASA spent the past year draining all toxic fuels from Discovery and removing unnecessary plumbing.
Stilson said she's managed to keep her emotions in check by staying busy. She's one of the luckier ones; thousands of shuttle workers have lost their jobs.
Astronaut Nicole Stott had "mixed feelings" as she gazed up at Discovery. "There's no denying the sadness associated with it," said Stott, who was on Discovery's last crew.
The newer shuttle Endeavour is promised to the California Science Center in Los Angeles; it ships out in September. Shuttle Atlantis will remain at Kennedy; a huge display area is in works at the visitor complex.
With the shuttles retired, U.S. astronauts are hitching big-bucks rides on Russian Soyuz rockets to get to the space station. A variety of private American companies are vying for astronaut transportation rights. Officials expect it to be another five years or so before the new spacecraft will be ready to carry passengers.
One of the main competitors, Space Exploration Technologies Corp. or SpaceX, is due to launch its Falcon rocket and Dragon capsule from Cape Canaveral on April 30, on an unprecedented trip to the space station. It will be the first time a private company makes such a cargo run.
After reviewing the status of the flight, NASA officials said Monday there is a good chance that SpaceX can make the April 30 launch date. More software testing is needed, however, over the next two weeks.

FCC fines Google $25,000 for unauthorized data collection and impeding investigation

The Federal Communications Commission has fined Google$25,000 for impeding a U.S. investigation into the data collection scandal surrounding its Street View project, in which the Internet giant allegedly accessed unsecured networks and collected personal information without users’ permission. The FCC said the Mountain View-based company did not cooperate with the investigation and refused to reveal the names of its engineers associated with the project. “Google refused to identify any employees or produce any e-mails. The company could not supply compliant declarations
without identifying employees it preferred not to identify,” the FCC said. “Misconduct of this nature threatens to compromise the commission’s ability to effectively investigate possible violations of the Communications Act and the commission’s rules.”
In a statement provided to Reuters, Google challenged the agency’s findings and claimed it turned over the proper information. ”As the FCC notes in their report, we provided all the materials the regulators felt they needed to conclude their investigation and we were not found to have violated any laws,” the company said. “We disagree with the FCC’s characterization of our cooperation in their investigation and will be filing a response.”

Nokia to announce its first manufacturing plant in Vietnam on April 23rd

Over the last few months, Nokia has closed scaled back several of its Western factories and shed over 3,000 employees in a recent effort to cut costs. The Finnish handset maker will shift its manufacturing business to Asia and is planning to build a plant in Vietnam, a move that is expected to cost some $300 million according to Vietnamese news organization BaoMoi. “Shifting device assembly to Asia is targeted at improving our time to market. By working more closely with our
suppliers, we believe that we will be able to introduce innovations into the market more quickly and ultimately be more competitive,” Nokia EVP ofMarkets Niklas Savander previously said. The company will reportedly hold a press conference to officially announce the project on April 23rd. The plant could create as many as 10,000 new jobs and is expected to produce 45 million handsets by the end of 2014.

Hornets hand Bobcats 17th straight defeat 75-67

CHARLOTTE, N.C. (AP) — The Charlotte Bobcats appear to be a collision course with NBA futility.
The Bobcats lost a franchise-record 17th straight game 75-67 to New Orleans Monday night and took a step closer to finishing the season with the worst winning percentage in league history.
If the Bobcats fail to win any of their remaining games they'll finish with a .106 winning percentage, which would be worse than the 1972-73 Philadelphia 76ers, who finished 9-73 for a winning percentage of .110.
It would seem Charlotte's best shot at a win is next Monday at Washington, the second-worst team in the league. However, that same Wizards team just throttled the Bobcats by 28 points in Charlotte last week, so the reality is Monday night might have been their best chance to win a game.

"The whole year has been frustrating but this game was more frustrating because we really got ourselves up for this one," saidGerald Henderson, who finished with a game-high 27 points. "It was a close game the whole game but we couldn't score. It was a struggle to score."
Henderson seemed to be the only one who could score for the Bobcats, who shot 30 percent from the field.
Stephen Silas, who stepped in again to coach the Bobcats for his father Paul, said he went through the entire playbook looking for something that would work.
"The only thing that seemed to work was handing the ball to Gerald Henderson to try to get in the paint," Stephen Silas said.
The loss assured the Bobcats (7-53) of the worst record in the league, giving them a 25 percent chance of landing the No. 1 pick in the NBA lottery on May 30. The Bobcats and the rest of the NBA will learn Tuesday if potential top pick Anthony Davis will enter the draft as a press conference in scheduled in Lexington, Ky.
If the Bobcats can land him it would be an immediate help to a team that has struggled both offensively and defensively this season.
The Hornets won despite playing without leading scorers Eric Gordon and Chris Kaman and shooting just 34 percent from the floor. Gordon was given the night off to rest, but no reason was given as to why Kaman was held out of action.
Greivis Vasquez picked up the slack scoring 20 points, while Carl Landry added 14 points and 12 rebounds off the bench for New Orleans.
It was the second-lowest scoring NBA game this season.
"It wasn't pretty," Hornets coach Monty Williams said.
For a while, the teams flirted with a different kind of NBA futility.
The league record for fewest points scored in a game was set on Feb. 27, 1955 when the Milwaukee Hawks and Boston Celtics combined for 119.
This game was tied at 47 after three quarters.
The Bobcats trailed by as many as eight in the second quarter but closed the half on an 18-6 run to take a 39-35 lead at the break as Kemba Walker provided a spark with seven points during the stretch. The teams combined to shoot 37 percent in the first half.
Things got progressively worst in the third quarter as they combined to score just 20 points — the lowest in the league in a quarter this season and the fewest since 2004— on 15 percent (6 for 40) shooting.
The Hornets put a run together to start the fourth quarter and built their lead to seven after Marco Belinelli knocked down a 3-pointer from the top of the key. The Bobcats would claw back to close the gap to two after Henderson got hot, but Vazquez hit a runner in the lane to make it a two-possession game.
The Bobcats couldn't get any closer after that.
Williams was not thrilled with his team's shot selection after the game.
"(We) missed some shots early but they have to keep taking them," Williams said. "Guys have to play with confidence. We don't want guys thinking about missing shots, especially when you don't have to look over your shoulder. It's not like I'm going to put somebody else in the game to take your spot."
The Hornets only played nine guys.
Henderson said the goal from here on out for the Bobcats is to get a win and avoid setting the dubious NBA record.
"Absolutely," Henderson said. "The Hornets are a good team, but we look at them as similar to us. This is a game we wanted to win. You look on the schedule and we felt like this was one we could really get. That's why it's even more frustrating."
NOTES: NASCAR driver Denny Hamlin took in the game from courtside. ... The Bobcats' 23 field goals and .303 shooting percentage was their worst this season. ...Belinelli scored in double figures for the 41st time this season.

U.N. condemns North Korea launch, warns on nuclear test

UNITED NATIONS (Reuters) - The U.N. Security Council on Monday strongly condemned North Korea's rocket launch, urged tightening of existing U.N. sanctions and warned Pyongyang of further consequences if it carries out another missile launch ornuclear test.
China, a permanent veto-wielding council member and North Korea's protector on the 15-nation panel, backed the council's "presidential statement," which was adopted unanimously.

U.N. diplomats said the council's relatively quick agreement on a declaration condemning Pyongyang signaled Beijing's irritation with its hermit neighbor over a satellite launch last week that North Korea had been widely urged not to carry out.
"The Security Council strongly condemns the 13 April 2012 (local time) launch by the Democratic People's Republic of Korea (DPRK)," the statement said.
"The Security Council demands that the DPRK (North Korea) not proceed with any further launches using ballistic missile technology and comply with (Security Council) resolutions ... by suspending all activities related to its ballistic missile program," it said.
The council declaration also demands that North Korea "abandon all nuclear weapons and existing nuclear programs in a complete, verifiable and irreversible manner ... and not conduct any further launches that use ballistic missile technology, nuclear tests or any further provocation."
It concludes with a warning to Pyongyang that the council is prepared to take further steps if necessary.
"The Security Council expresses its determination to take action accordingly in the event of a further DPRK launch or nuclear test," it said.
U.S. Ambassador to the United Nations Susan Rice, who is the Security Council president this month, told reporters that Monday's decision showed how united the world was.
"The swift and unanimous adoption of this strong presidential statement shows that the international community is united in sending a clear message to North Korea that such provocations are serious and totally unacceptable," she said.
"The Security Council made clear that there will be consequences for any future North Korean launch or nuclear test," she said.
She said the statement was tougher than one the council issued after North Korea's April 2009 missile launch. The 2009 statement said the council "condemns" the launch, while Monday's declaration said it "strongly condemns" Pyongyang.
Rice described the council statement as calling for "new sanctions," though what it actually urges is an expansion of the list of firms, individuals and goods the Security Council blacklisted after North Korea's 2006 and 2009 nuclear tests.
Under those measures, North Korea is banned from using, developing or importing ballistic missileand nuclear technologies.
Rice said the U.S. delegation would soon propose a "robust package" of names of individuals and companies to be added to the existing U.N. blacklist, along with additional goods that North Korea would be banned from importing.
The statement does not result in an immediate expansion of the North Korea sanctions regime. Rather it instructs the U.N. sanctions committee to expand its existing sanctions blacklist within 15 days and to review that list annually.
The committee, which includes all 15 council members and works on the basis of consensus, will have to take a separate decision on expanding the U.N. blacklist. China will therefore have an opportunity to thwart any push for adding new names to the North Korea sanctions list if it chooses to do so.
Asked whether she expected Pyongyang to explode another atomic device in defiance of the council, Rice said North Korea followed its 2006 and 2009 missile launches with nuclear tests.
"Clearly the potential for that pattern to persist is one that all members of the international community are mindful of and think would be a disastrous course for the North to pursue," she said. "It will only lead to the North's increased isolation."
North Korea admitted its long-range rocket failed to deliver a satellite into orbit on Friday while U.S. and South Korean officials said it crashed into the sea a few minutes after launch.
While the statement called for tightening existing U.N. sanctions, diplomats said no council member had seriously pushed the idea of imposing new sanctions on Pyongyang in retaliation for the launch, something China and Russia would have opposed.
The existing U.N. blacklist of sanctioned firms and individuals includes those linked to Pyongyang's nuclear and missile industries.
(Additional reporting by Michelle Nichols; Editing by Eric Beech and Jackie Frank)

Dow gains on retail sales but Apple bites Nasdaq

NEW YORK (Reuters) - The Dow rose on Monday as robust U.S. retail sales data helped large-cap consumer stocks, but a 4 percent slide in Apple hurt the Nasdaq.
U.S. retail sales for March shot up 0.8 percent, sharply higher than the forecast, pushing Procter & Gamble up 1.5 percent, while givingWal-Mart Stores , the world's largest retailer, a 1.4 percent boost.

But Apple shares dropped 4.2 percent to $580.13. After a meteoric rise of 43 percent this year, Apple was ripe for profit taking.
Apple wasn't the market's only worry. Spain's rising borrowing costs and a weak New York state manufacturing report stirred concerns about Europe's debt crisis and the U.S. economic recovery.
"The market behavior is fairly manic today and investors are confused after a mixed set of data, Spanish yields, and momentum stocks like Apple losing ground," said James Dailey, portfolio manager at TEAM Asset Strategy Fund in Harrisburg, Pennsylvania.
"The confusion is leading to anxiety, and that's why we are seeing the blue chips, the large caps, outperform."
Other major drags on the Nasdaq included a slide of 9 percent in the shares of Mattel Inc , the world's largest toy maker, on declining quarterly sales, and a 3 percent drop in Google Inc shares ahead of a high-stakes legal battle with Oracle Corp.
The Dow Jones industrial average <.DJI> rose 71.82 points, or 0.56 percent, to 12,921.41 at the close. But the Standard & Poor's 500 Index <.SPX> inched down 0.69 of a point, or 0.05 percent, to 1,369.57. The Nasdaq Composite Index <.IXIC> dropped 22.93 points, or 0.76 percent, to close at 2,988.40.
Procter & Gamble, the world's largest household products company, closed at $66.78, up 1.5 percent, and helped bolster the Dow. Wal-Mart, another Dow component, ended at $60.58, up 1.4 percent.
Spain's 10-year government bond yields climbed above the 6 percent mark on Monday for the first time since the beginning of December. Spain has acknowledged that it has probably slipped into its second recession since 2009.
"Barring an accelerated flight of assets out of the euro zone and into U.S. equities, we see little reason for equities to rally appreciably above the most recent high," said Peter Cecchini, managing director at Cantor Fitzgerald in New York.
"Having said this, we are expecting a short-term bounce, which may lead to a retest of 1,400," he said.
Monday's mixed session followed last week's pullback, when both the Dow and the S&P 500 suffered their worst two-week percentage drops since late November on increasing concerns about the euro zone's debt crisis and weaker-than-expected U.S. economic data.
Earnings season will pick up steam this week, with 86 S&P 500 companies scheduled to report results. According to Thomson Reuters data through Monday, of the 34 S&P 500 companies to have reported earnings so far, 76 percent have reported earnings above analysts' expectations.
Mattel's quarterly profit fell short of analysts' expectations as price increases hurt sales of its iconic Barbie dolls and Hot Wheels cars, driving its stock down 9.1 percent to $31.01.
Google's stock slid 3 percent to $606.07 on Monday, when jury selection got under way in a high-stakes dispute over smartphone technology with Oracle Corp. Shares of Oracle gained 0.5 percent to $28.64.
Volume was light, with about 6.25 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below last year's daily average of 7.84 billion.
Advancers outnumbered decliners on the NYSE by a ratio of 17 to 13, while on the Nasdaq, about 13 stocks rose for every 12 that fell.
(Reporting by Angela Moon; Editing by Jan Paschal)

Hollywood warms to China's new openness

LOS ANGELES (AP) — There's a new breach in China's great cultural wall and Hollywood is cautiously moving in.
Disney's announcement Monday that it will make "Iron Man 3" in partnership with a Chinese company is the latest sign that movie studios are warming to China's new openness.
For decades, China has capped the number of foreign films it allows into the country. Until recently, the limit was 20, but in February Chinese officials announced that they are increasing the quota to 34.
China said it will also allow foreign studios to garner a greater share of box office revenue. Foreign companies can now expect to earn 25 percent of their movies' ticket sales in China, up from between 13.5 and 17.5 percent.

The changes are a significant move for a bureaucracy that is leery of outside cultural influences and competition from foreign films. The change could affect everyone from action movie fans in Guangzhou to Hollywood's most powerful filmmakers.
The relaxing of China's strict rules comes at a price for U.S. studios. The world's most populous nation wants foreign studios to bring their moviemaking know-how to China by forming joint ventures with Chinese studios.
Still, Hollywood isn't gushing. In recent years, U.S. movie studios have developed a rocky romance with China. Chinese people adore foreign movies, especially 3-D adventures like "Avatar," or more recently "Journey 2: The Mysterious Island." But studios have been jilted when Beijing has promised new openness only to reverse course. In Disney's case, many of its movies have made it into the country, but recent hit "Tangled," for instance, was stopped at the border.
In a recent interview, DreamWorks Animation SKG Inc. CEO Jeffrey Katzenberg summed up the industry's attitude: "The goal lines are moving all the time," he said. "Everyone is wondering how it plays out."
China has long kept up a barrier against foreign films — wary of insidious cultural influences while sheltering its own filmmakers. Officials last raised the annual cap on foreign movie imports as a condition of joining the WTO in 2001. The recent increased foreign movie quota is a belated response to a trade dispute the U.S. won nearly three years ago.
Studios are patiently trying to make the relationship work, because of China's enormous potential. Box office revenue in China rose more than a third last year to $2 billion, putting the country on pace to become the world's second largest movie market after the combined U.S. and Canadian region this year. It is expected to top $5 billion by 2015. The U.S. and Canadian theatrical market, meanwhile, shrank two years in a row to about $10 billion in 2011. So far this year, however, revenue at U.S. and Canadian theaters is up about 19 percent.
It's only a matter of time before China's movie-going market is the world's biggest, according to some industry-watchers. Whether it is the most profitable for outsiders is another question. In 2006, Warner Bros. pulled out of a two-year-old theater chain joint venture when Beijing changed the rules, suddenly disallowing the studio's majority stake. Late last year, production company Legendary Pictures' joint venture, which is set to make the movie "The Great Wall," hit a stumbling block when its Hong Kong-based partner failed to raise enough capital.
Entertainment lawyer Schuyler Moore says he has warned clients not to be overly optimistic in dealing with the country, and says it will take a year to see how China implements its new movie policy. Moore believes China's new openness is aimed mainly at boosting its own cultural industries.
"In the long term, it's no different than China trying to make aircraft and cars and everything else. Their goal is to have the expertise so they can displace Hollywood," he says.
Against that backdrop, companies like The Walt Disney Co. and Katzenberg's DreamWorks are entering a delicate dance.
Katzenberg traveled to China in mid-March to meet with Chinese officials about how the expanded quota rules would be applied. He also sought to work out details regarding the company's new joint venture in China, Oriental DreamWorks.
"(China) is big, it is the fastest growing and that's what makes it challenging," Katzenberg told The Associated Press prior to his trip.
Disney and its new partner, Beijing-based DMG Entertainment, didn't offer many details about their "Iron Man 3" project, although the companies say the movie will incorporate Chinese elements and be partly funded by DMG.
The DreamWorks' deal, announced in February, is for a joint venture studio based in Shanghai that is 45 percent owned by DreamWorks and 55 percent owned by its Chinese partners, capitalized at $330 million.
Some analysts questioned whether it was worth it for DreamWorks to give up a 55 percent stake in the venture.
"It is not clear how well DreamWorks will do when it has to relinquish creative controls," said Janney analyst Tony Wible. "This just adds to some of the uncertainty with the deal. However, there is a good long-term potential, so the risk goes with the return."
China isn't just waiting for Hollywood to come running.
Last month, a key official in China's movie infrastructure, Yang Buting, appealed to Hollywood's finance community to enter new joint ventures in the country.
He once led the nation's primary distributor of foreign films, China Film Group, and now chairs a co-financing arm of the government, China Mainstream Media National Film Capital Hollywood Group Inc., which set up an office in Beverly Hills, Calif., this year.
"I have a vision of an ideal version of film cooperation between China and the United States: Chinese or American stories, joint investment, co-production, joint cast and credits, distributed globally," he said at a conference in Los Angeles. The formula will "surely be a win-win miracle for both China and the U.S."
So far, co-productions have had mixed success. The 2007 Ang Lee-directed film, "Lust Caution," which paired Hai Sheng Film Production Co. and Universal Pictures' Focus Features group, won critical acclaim but failed to make its money back.
On the other hand, the retelling of the 1984 classic "The Karate Kid" by Sony Pictures and China Film Group in 2010 reinvigorated a franchise. Much of its success can be credited to the charming chemistry between its new star, Will Smith's son Jaden, and martial arts legend Jackie Chan, a well-established Hong Kong-born hit with Chinese audiences. The movie was a global hit. It cast China and kung fu in a positive light and grossed $343 million worldwide.
Still, it is unclear whether new rules favor Chinese co-productions, or movies brought in under the new quota.
Based on a deal announced by Chinese Vice President Xi Jinping and U.S. counterpart Joe Biden, China will let in 14 more foreign movies a year as long as they are in 3-D or the Imax format. That lifts the number of foreign films allowed under the quota system each year to 34.
These foreign films will also share 25 percent of the box office receipts, up from 13.5 percent to 17.5 percent now. The rest goes to theater owners and the government.
While the new, higher cut is less than the 43 percent share China offers domestic movie studios, it still could be a better deal for Hollywood than being the junior member of a joint venture.
Meanwhile China's home movie market is dominated by pirated films. The fledgling market for legitimate online movie rentals is tiny.
One of the clearest beneficiaries of the rule change is Imax Corp., the big-screen movie company that licenses its technology for a share of ticket sales. Imax is hugely popular with Chinese movie fans. It receives about half of the studios' share of the box office for movies that end up on its screens in China. As more Imax-format movies are let in, more films will contribute to its Chinese revenue going forward.
Still, CEO Rich Gelfond treads carefully.
"I'd say there's always country risk wherever you do business in the world," he says. "But by creating a win-win scenario where it's good for the Chinese partners, it's good for the Chinese consumer, and it works for Imax, we think we can minimize that risk."
Business Writer Joe McDonald in Beijing contributed to this report.

Citi profit tops expectations, bond trading helps

(Reuters) - Citigroup Inc posted stronger-than-expected first-quarter results as bond trading and underwriting revenue jumped compared with the 2011 fourth quarter.
While the results were better than the company's report three months ago, profit fell 2 percent from a year earlier, reflecting the bank's difficulties as it works to boost its earnings in a sluggish global economy.

Chief Executive Vikram Pandit said the bank might not seek regulatory approval to return capital to shareholders this year after all. Citigroup received multiple bailouts during the credit crunch and was one of the few banks to have its capital return plans rejected by the Federal Reserve earlier this year.
First-quarter revenue, excluding accounting adjustments, was up 1 percent from a year earlier and 17 percent from the fourth quarter, to $20.2 billion. Investment banking revenue was hit particularly hard in North America and Europe.
Investors focused on the positives, and Citigroup's shares rose 74 cents, or 2.2 percent, at $34.15 in Monday afternoon trading.
"They continue to progress. They have headwinds that maybe only Bank of America has, but they seem to be managing those headwinds," said Gary Townsend, CEO of Hill-Townsend Capital. "It's a good quarter without being as superlative as JPMorgan's was."
JPMorgan Chase & Co topped Wall Street profit expectations on Friday, helped by some of the same macro trends - a better economy and more active capital markets.
But the KBW index of bank stocks <.BKX> is already up more than 20 percent this year, and investors are turning their attention to determining the strength and extent of the recovery, which still lags the optimism of early last year.
Citigroup Chief Financial Officer John Gerspach said demand for loans remains soft in the United States and Europe but continues to be strong in emerging markets.
Loan growth in the first quarter was particularly strong for trade finance, he added in a conference call with reporters.
At the end of the first quarter, the bank had $619 billion of loans outstanding, after accounting for money set aside for bad loans. That was up from $617.13 billion at the end of the fourth quarter and $600.57 billion a year earlier.
Last month, Citigroup was one of only a handful of large financial institutions that failed to win approval from regulators for a dividend increase or share buyback.
Analysts have wondered if Citigroup asked to distribute too much capital or somehow erred in its calculations of the losses it would incur under stress tests conducted by the regulators.
In the weeks leading up to the setback for the capital plan, Pandit convinced analysts that Citigroup had rebuilt its balance sheet to the point that it had so much more capital than needed in an economic downturn that it would to be allowed to raise its quarterly dividend from a nominal penny a share to as much as 10 cents.
On Monday, Pandit said Citigroup was due to submit a new proposal by mid-June for managing its balance sheet to withstand hypothetical financial stresses.
New economic and market scenarios may be applied in the next review, he said, explaining that the bank is still discussing the retest with Federal Reserve officials.
Pandit told analysts on a conference call that the company may opt not to ask regulators for permission to raise the dividend or buy back stock this year.
"We need to understand the process going forward to make a determination what to include in our submission," he said.
The CEO also said the company's capital is increasing quickly enough that it does not have to sell its minority interest in its brokerage joint-venture with Morgan Stanley .
The new test will be based on Citigroup's March 31 balance sheet, which is stronger than at the end of December, before the earlier test.
For example, Citigroup's so-called Tier 1 Common Ratio, a measure used under Basel 1 regulations, rose to 12.4 percent from 11.8 percent. And its ratio as measured under pending new Basel 3 regulations is on track to rise above 8 percent at the end of the year from its current 7.2 percent.
Pandit cautioned that the Federal Reserve looks at different capital figures than those used for Basel.
Once the bank submits a new plan for 2012, the Federal Reserve has 75 days to respond, which means the company may not get an answer until well into the third quarter of the year and not long before it has to start preparing to have its 2013 capital plan tested.
Pandit said the bank would announce by its July earnings conference call whether it was seeking to return more capital to shareholders.
In the first quarter, a set of assets the company has been selling off or running down since the financial crisis declined 29 percent from a year earlier to $209 billion, or 11 percent of total Citigroup assets.
Citigroup's first-quarter net income fell 2 percent to $2.93 billion, or 95 cents a share, from $2.99 billion, or 99 cents a share, a year earlier.
Excluding the impact of certain accounting adjustments for changes in the value of debts and credits, Citigroup earned $1.11 a share. The average Wall Street forecast was $1.00, according to Thomson Reuters I/B/E/S.
Revenue from the company's ongoing securities trading and investment banking business declined 12 percent from the strong quarter a year earlier but rose 65 percent from the weak 2011 fourth quarter.
Expenses were down 7 percent from the previous quarter and were flat with a year earlier, reflecting seasonal factors and the company's commitment to bring costs down for the year, Gerspach said in the conference call.
Citigroup's 2011 fourth-quarter earnings missed analysts' estimates and executives were grilled over the company's control of its expenses, which rose 4 percent in the fourth quarter from the third quarter. Expense control has become an increasingly important issue for banks because their profits are being squeezed by low interest rates and tighter regulation.
The bank's latest results were boosted by a $1.2 billion release of bad-loan reserves. Delinquency rates for its North American credit card and retail banking customers declined 31 percent from a year earlier. International consumer credit costs fell 3 percent.
(Reporting by David Henry in New York and Rick Rothacker in Charlotte, North Carolina. Editing by John Wallace and Paritosh Bansal.)

As ice cap melts, militaries vie for Arctic edge

YOKOSUKA, Japan (AP) — To the world's military leaders, the debate over climate change is long over. They are preparing for a new kind of Cold War in the Arctic, anticipating that rising temperatures there will open up a treasure trove of resources, long-dreamed-of sea lanes and a slew of potential conflicts.
By Arctic standards, the region is already buzzing with military activity, and experts believe that will increase significantly in the years ahead.

Last month, Norway wrapped up one of the largest Arctic maneuvers ever — Exercise Cold Response — with 16,300 troops from 14 countries training on the ice for everything from high intensity warfare to terror threats. Attesting to the harsh conditions, five Norwegian troops were killed when their C-130 Hercules aircraft crashed near the summit of Kebnekaise, Sweden's highest mountain.
The U.S., Canada and Denmark held major exercises two months ago, and in an unprecedented move, the military chiefs of the eight main Arctic powers — Canada, the U.S., Russia, Iceland, Denmark, Sweden, Norway and Finland — gathered at a Canadian military base last week to specifically discuss regional security issues.
None of this means a shooting war is likely at the North Pole any time soon. But as the number of workers and ships increases in the High North to exploit oil and gas reserves, so will the need for policing, border patrols and — if push comes to shove — military muscle to enforce rival claims.
The U.S. Geological Survey estimates that 13 percent of the world's undiscovered oil and 30 percent of its untapped natural gas is in the Arctic. Shipping lanes could be regularly open across the Arctic by 2030 as rising temperatures continue to melt the sea ice, according to a National Research Council analysis commissioned by the U.S. Navy last year.
What countries should do about climate change remains a heated political debate. But that has not stopped north-looking militaries from moving ahead with strategies that assume current trends will continue.
Russia, Canada and the United States have the biggest stakes in the Arctic. With its military budget stretched thin by Iraq, Afghanistan and more pressing issues elsewhere, the United States has been something of a reluctant northern power, though its nuclear-powered submarine fleet, which can navigate for months underwater and below the ice cap, remains second to none.
Russia — one-third of which lies within the Arctic Circle — has been the most aggressive in establishing itself as the emerging region's superpower.
Rob Huebert, an associate political science professor at the University of Calgary in Canada, said Russia has recovered enough from its economic troubles of the 1990s to significantly rebuild its Arctic military capabilities, which were a key to the overall Cold War strategy of the Soviet Union, and has increased its bomber patrols and submarine activity.
He said that has in turn led other Arctic countries — Norway, Denmark and Canada — to resume regional military exercises that they had abandoned or cut back on after the Soviet collapse. Even non-Arctic nations such as France have expressed interest in deploying their militaries to the Arctic.
"We have an entire ocean region that had previously been closed to the world now opening up," Huebert said. "There are numerous factors now coming together that are mutually reinforcing themselves, causing a buildup of military capabilities in the region. This is only going to increase as time goes on."
Noting that the Arctic is warming twice as fast as the rest of the globe, the U.S. Navy in 2009 announced a beefed-up Arctic Roadmap by its own task force on climate change that called for a three-stage strategy to increase readiness, build cooperative relations with Arctic nations and identify areas of potential conflict.
"We want to maintain our edge up there," said Cmdr. Ian Johnson, the captain of the USS Connecticut, which is one of the U.S. Navy's most Arctic-capable nuclear submarines and was deployed to the North Pole last year. "Our interest in the Arctic has never really waned. It remains very important."
But the U.S. remains ill-equipped for large-scale Arctic missions, according to a simulation conducted by the U.S. Naval War College. A summary released last month found the Navy is "inadequately prepared to conduct sustained maritime operations in the Arctic" because it lacks ships able to operate in or near Arctic ice, support facilities and adequate communications.
"The findings indicate the Navy is entering a new realm in the Arctic," said Walter Berbrick, a War College professor who participated in the simulation. "Instead of other nations relying on the U.S. Navy for capabilities and resources, sustained operations in the Arctic region will require the Navy to rely on other nations for capabilities and resources."
He added that although the U.S. nuclear submarine fleet is a major asset, the Navy has severe gaps elsewhere — it doesn't have any icebreakers, for example. The only one in operation belongs to the Coast Guard. The U.S. is currently mulling whether to add more icebreakers.
Acknowledging the need to keep apace in the Arctic, the United States is pouring funds into figuring out what climate change will bring, and has been working closely with the scientific community to calibrate its response.
"The Navy seems to be very on board regarding the reality of climate change and the especially large changes we are seeing in the Arctic," said Mark C. Serreze, director of the National Snow and Ice Data Center at the Cooperative Institute for Research in Environmental Sciences University of Colorado. "There is already considerable collaboration between the Navy and civilian scientists and I see this collaboration growing in the future."
The most immediate challenge may not be war — both military and commercial assets are sparse enough to give all countries elbow room for a while — but whether militaries can respond to a disaster.
Heather Conley, director of the Europe program at the London-based Center for Strategic and International Studies, said militaries probably will have to rescue their own citizens in the Arctic before any confrontations arise there.
"Catastrophic events, like a cruise ship suddenly sinking or an environmental accident related to the region's oil and gas exploration, would have a profound impact in the Arctic," she said. "The risk is not militarization; it is the lack of capabilities while economic development and human activity dramatically increases that is the real risk."