Financial thoughts

At long last, the Holy Grail of Internet IPOs is here. Facebook filed Wednesday to raise $5 billion in an initial public offering.

In 2011, Facebook earned $1 billion on sales of $3.7 billion. As of December 31, Facebook had 845 million monthly active users.

The company crossed the line into profitability in 2009, five years after it launched in founder Mark Zuckerberg’s Harvard dorm room. Facebook earned $229 million that year on sales of $777 million, and has remained profitable ever since.

It’s not yet known on which stock exchange Facebook will trade, though it said it plans to use the ticker symbol "FB."

Facebook will likely re-file its paperwork several times over the coming months. Those updates will add more details and could even restate some of the financial information detailed in Wednesday’s filing.

In this initial paperwork, companies don’t declare how many shares they’re going to sell, or how much those shares will cost. Those details will be added in an updated filing shortly before trading begins.

Without that share price information, Facebook’s valuation is still speculative.

Facebook has its own guesses, though. The company said it conducted its own valuation of its stock at the end of each quarter, and as of December 31 determined it to be worth $29.73 a share.

Zuckerberg’s letter to investors: ‘Hacker Way’

Revenue breakdown: Advertising accounted for 85% of Facebook’s 2011 revenue, or almost $3.2 billion.

Facebook’s other revenue stream is its payment system for purchases within apps and games: Facebook Credits. Facebook keeps 30% of the revenue from those payments, and passes the remaining 70% on to the app developer.

Those fees brought in $557 million for Facebook last year.

Revenue from Zynga, which makes FarmVille and other games played on Facebook, represented 12% of Facebook’s total revenue in 2011.

About 44% of Facebook’s revenue came from overseas last year, compared with 38% in 2010 and 33% in 2009.

As of December 31, Facebook had $3.9 billion in cash and liquid assets.

Exec compensation: Another choice tidbit: In 2011, Facebook CEO Zuckerberg raked in a $500,000 base salary. But he requested — and will receive — only $1 per year in salary starting January 1, 2013.

Don’t feel too bad for Zuck, who remains the largest shareholder in the company he created. His total compensation in 2011 came to $1.48 million, according to Facebook’s calculations.

He was one of the lowest-paid among Facebook’s executive ranks. Facebook COO Sheryl Sandberg topped the list with a total package Facebook estimated at $30.9 million, almost all of it in stock.

Engineering VP Mike Schroepfer made an estimated $24.7 million — again, mostly in stock — while CFO David Ebersman collected an $18.7 million pay package. (For more on Ebersman, see Fortune’s profile: "The man behind the Facebook IPO.")

As far as the regular rank-and-file at Facebook, the company had 3,200 full-time employees as of December 31. That was a 50% increase from the previous year, and Facebook said it "expect[s] this growth to continue for the foreseeable future."

Facebook also noted that it has bought out some small companies mainly to acquire employees, and said that it intends to continue that strategy.

How much Facebook is worth: Trading won’t begin for several months, as Facebook now has to field questions from regulators and court investors for its stock sale.

Most analysts estimate Facebook’s valuation will fall somewhere between $85 billion to $100 billion. But the value of Web companies can be extremely volatile.

A recent example: Zynga (). The FarmVille maker’s IPO filing reported that it valued its shares in August 2011 at $17.20 each, which gave the company a valuation of $14 billion. But when Zynga went public in December, shares sold for just $10 — valuing the company at $7 billion.

Several other Internet companies made their public debuts in 2011, but the end of the year proved to be a turbulent time for the sector. Shares of Groupon (), Pandora (), Zillow (), LinkedIn () and Angie’s List () all suffered steep double-digit losses for November, though most clawed back at least a bit in December or January. 

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The last big name from the old days at Anheuser-Busch is leaving Pestalozzi Street.

Dave Peacock, who went from August Busch IV’s right-hand man to Carlos Brito’s U.S. point man, resigned from Anheuser-Busch InBev Monday, a move some see as one of the final steps of the brewery’s transition to new ownership.

The 43-year-old – a second-generation A-B employee who met his wife on his first day of work there – says the parting was his idea, and amicable. He’ll remain an adviser to the company, but he wants to do something else while he’s still young enough to do so.

“I’ve been really blessed,” Peacock said. “When you grow up in St. Louis and your dad works for the brewery, you never even dream you’re going to have a shot at the job I had. But it’s time to try something different.”

In leaving, according to regulatory filings, Peacock appears to be walking away from stock options that would today be worth roughly $28 million. The arrangement required that he stay five years after the merger and that the company meet financial targets. It was unclear Monday if he received other compensation upon resigning.

Peacock’s departure comes three years into a transition that has seen many of the brewer’s top local executives leave, and as A-B InBev searches for ways to grow its iconic Budweiser and Bud Light brands despite a tough economy for big beer. The well-liked Peacock – whose title was president of Anheuser-Busch - was in charge of U.S. operations for A-B InBev. He played a key role in helping the Belgian-Brazilian conglomerate absorb its big acquisition, said Tom Pirko, managing director of Bevmark, a food industry consulting firm.

Now, with the takeover fading in the rearview mirror, the challenges are different.

“They’re in to Phase Two now,” Pirko said. “Phase Two is an ability to stabilize and grow the business. That requires new thinking, new blood. The company’s got to deliver in a way that it hasn’t been delivering in the last few years.”

That job will fall to Luiz Edmond, a Brazilian who has been been A-B InBev’s North America zone president, and Peacock’s boss, since the takeover. He’s been based in St. Louis and will remain here, and add Peacock’s U.S. duties to his portfolio.

“Dave has been a great colleague, embracing and leading many changes that we agreed would be difficult, but that would ultimately benefit the U.S. business in the long term,” Edmond said in an e-mail to employees Monday. “He has helped Brito, me and the global and zone management teams in transitioning the company in many ways over the last three years.”

Peacock had worked at Anheuser-Busch since 1992 and rose through the ranks to become its vice president of marketing and a close confidant of August Busch IV. He bled Budweiser, colleagues said, and was widely seen as a rising star in the industry.

Peacock played a crucial role in the days after Anheuser-Busch agreed to InBev’s terms in July 2008. He joined Busch – and did most of the St. Louis brewery’s talking – on a Monday morning conference call with Brito announcing the deal. The next day, according to Dethroning the King, a book by writer Julie McIntosh that chronicles the takeover, it was Peacock who gave Brito a ride to the brewery for his first visit as the new boss.

Peacock’s efforts were noticed, and he was alone among top A-B executives in having a major role at the new company. For the last three years, he helped to manage cuts, smooth relations with employees and distributors, and served as A-B InBev’s face in the U.S., including St. Louis.

But some industry-watchers suspect Peacock had had his fill. The business keeps getting tougher for big brewers, said Harry Schumacher, publisher of trade publication Beer Business Daily. Craft beers and spirits are eating market share, and more fights likely loom with distributors.

“They’re really getting sandwiched from both sides, and they’re going to need some changes,” Schumacher said. “I don’t think Dave wanted to go down that road and be the bad cop.”

In an interview Monday, Peacock said he’d been mulling the move for about a year, and that he’s leaving Anheuser-Busch in good hands, both with Brito and Edmond and with a core of U.S.-based executives who worked under him. He’s not sure what he plans to do next, but said he thinks he’ll stay in St. Louis, where his family lives and his children are in school.

And as for leaving behind those stock options – which were likely to start paying out in less than two years – he said it’s not really about the money.

“I didn’t really mind leaving that money on the table,” Peacock said. “It was just the right time for me.”

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An official at the main airport serving Yemen’s capital says that protesting troops have closed the runways with armored vehicles, demanding that the commander of the country’s air force be replaced.

The garrison at Sanaa airport’s attached military air base is demanding the removal of Maj. Gen. Mohammed Saleh, the brother of outgoing President Ali Abdullah Saleh, the official says.

He says the Sunday protest has caused two flights to be diverted to the airport at the southern city of Yemen.

Another official at the airport in the southern city of Taiz says troops there have been staging a similar protest demanding the ouster of their commander since Saturday. Both officials spoke anonymously in accordance with regulations.

Yemen has experienced an 11-month uprising against Saleh’s rule.

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International Monetary Fund Managing Director Christine Lagarde joined world financial and trade organization chiefs in warning policy makers gathering in Davos, Switzerland next week against fiscal cuts that jeopardize growth.

Divers have resumed the search for 21 people still missing after a cruise ship capsized off the Tuscan coast.

Divers were scouring the submerged area of the ship Thursday once officials determined it had stablized after shifting on the rocks a day earlier.

Rough seas were forecast for later in the day, adding an element of uncertainty to the search and plans to begin pumping a half-million gallons of fuel from the vessel.

The missing include a 5-year-old Italian girl and her father. The girl’s mother issued a fresh appeal to speed the search and for passengers who saw the pair to come forward to help determine where they were last seen.

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The Federal Reserve on Tuesday drew fire from conservatives for its recent policy proposals on the downtrodden housing sector that the critics argued represented an overreach by the central bank.

Two Republican senators lashed out at the Fed’s “white paper” on housing, which suggested other officials should consider giving failed mortgage finance giants Fannie Mae (FNMA.OB: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FMCC.OB: Quote, Profile, Research, Stock Buzz) a bigger role in turning the market around.

The protests mark a rekindling of anti-central bank sentiment that reached fever pitch when the Fed launched its second round of bond buying in late 2010. At that time, conservatives accused the central bank of sowing the seeds for future inflation, though recent trends show price pressures ebbing.

The Fed’s detractors are now reacting to what they see as central bankers chiming in on fiscal policy matters that are not the appropriate realm for monetary authorities.

“I believe that it is important to the interests of the Federal Reserve, including the independence of monetary policy, that the Fed refrain from providing any hint of activism regarding what are clearly fiscal policy choices,” said Orrin Hatch, the top Republican on the Senate Finance Committee.

“I am sure that the Fed would not appreciate a white paper from Congress outlining how to think about and execute monetary policy,” he said.

Sen. Bob Corker, a member of the Banking Committee, directed his criticism at William Dudley, the influential president of the New York Federal Reserve Bank, for his suggestion that principal write-downs be considered for distressed borrowers.

Such criticisms have some resonance among a minority of inflation hawks at the Fed one hour payday loan. Philadelphia Federal Reserve Bank President Charles Plosser and Richmond Fed chief Jeffrey Lacker have both expressed distaste over an earlier effort by the Fed to drive down mortgage costs by buying mortgage-related debt.

At the other end of the spectrum, Dudley and Eric Rosengren of the Boston Fed have said the central bank should consider further purchases of mortgage-backed securities.

An editorial in the Wall Street Journal on Tuesday was even more scathing, accusing the central bank of “rank electioneering” for issuing the housing proposal.

Fed officials have argued that, given their broad mandate to achieve solid economic growth, it would be irresponsible for them to ignore housing, which continues to be a major drag on the economic recovery.

Recent indicators have been mixed, pointing to some strength in construction but also a continued decline in home prices that bodes ill for a sustained housing rebound.

When Ben Bernanke first took over as chairman at the central bank in 2006, he vowed to steer clear of the type of fiscal debates that got his predecessor, Alan Greenspan, into trouble.

Greenspan had widely been criticized for giving intellectual cover to tax cuts during President George Bush’s administration.

In a letter to leading lawmakers that accompanied the “white paper” last Wednesday, Bernanke said the Fed had received questions and requests for input and that the policy proposals were being made in the “interest of a continuing dialogue.”

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Doctors in America are harboring an embarrassing secret: Many of them are going broke.

This quiet reality, which is spreading nationwide, is claiming a wide range of casualties, including family physicians, cardiologists and oncologists.

Industry watchers say the trend is worrisome. Half of all doctors in the nation operate a private practice. So if a cash crunch forces the death of an independent practice, it robs a community of a vital health care resource.

"A lot of independent practices are starting to see serious financial issues," said Marc Lion, CEO of Lion & Company CPAs, LLC, which advises independent doctor practices about their finances.

Doctors list shrinking insurance reimbursements, changing regulations, rising business and drug costs among the factors preventing them from keeping their practices afloat. But some experts counter that doctors’ lack of business acumen is also to blame.

Loans to make payroll: Dr. William Pentz, 47, a cardiologist with a Philadelphia private practice, and his partners had to tap into their personal assets to make payroll for employees last year. "And we still barely made payroll last paycheck," he said. "Many of us are also skimping on our own pay."

Pentz said recent steep 35% to 40% cuts in Medicare reimbursements for key cardiovascular services, such as stress tests and echocardiograms, have taken a substantial toll on revenue. "Our total revenue was down about 9% last year compared to 2010," he said.

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"These cuts have destabilized private cardiology practices," he said. "A third of our patients are on Medicare. So these Medicare cuts are by far the biggest factor. Private insurers follow Medicare rates. So those reimbursements are going down as well."

Pentz is thinking about an out. "If this continues, I might seriously consider leaving medicine," he said. "I can’t keep working this way."

Also on his mind, the impending 27.4% Medicare pay cut for doctors. "If that goes through, it will put us under," he said.

Federal law requires that Medicare reimbursement rates be adjusted annually based on a formula tied to the health of the economy. That law says rates should be cut every year to keep Medicare financially sound.

Although Congress has blocked those cuts from happening 13 times over the past decade, most recently on Dec. 23 with a two-month temporary "patch," this dilemma continues to haunt doctors every year.

Beau Donegan, senior executive with a hospital cancer center in Newport Beach, Calif., is well aware of physicians’ financial woes.

"Many are too proud to admit that they are on the verge of bankruptcy," she said. "These physicians see no way out of the downward spiral of reimbursement, escalating costs of treating patients and insurance companies deciding when and how much they will pay them."

Donegan knows an oncologist "with a stellar reputation in the community" who hasn’t taken a salary from his private practice in over a year. He owes drug companies $1.6 million, which he wasn’t reimbursed for.

Dr. Neil Barth is that oncologist. He has been in the top 10% of oncologists in his region, according to U.S. News Top Doctors’ ranking. Still, he is contemplating personal bankruptcy.

That move could shutter his 31-year-old clinical practice and force 6,000 cancer patients to look for a new doctor.

Changes in drug reimbursements have hurt him badly. Until the mid-2000’s, drugs sales were big profit generators for oncologists low interest rate personal loans.

In oncology, doctors were allowed to profit from drug sales. So doctors would buy expensive cancer drugs at bulk prices from drugmakers and then sell them at much higher prices to their patients.

"I grew up in that system. I was spending $1.5 million a month on buying treatment drugs," he said. In 2005, Medicare revised the reimbursement guidelines for cancer drugs, which effectively made reimbursements for many expensive cancer drugs fall to less than the actual cost of the drugs.

"Our reimbursements plummeted," Barth said.

Still, Barth continued to push ahead with innovative research, treating patients with cutting-edge expensive therapies, accepting patients who were underinsured only to realize later that insurers would not pay him back for much of his care.

"I was $3.2 million in debt by mid 2010," said Barth. "It was a sickening feeling. I could no longer care for patients with catastrophic illnesses without scrutinizing every penny first."

He’s since halved his debt and taken on a second job as a consultant to hospitals. But he’s still struggling and considering closing his practice in the next six months.

"The economics of providing health care in this country need to change. It’s too expensive for doctors," he said. "I love medicine. I will find a way to refinance my debt and not lose my home or my practice."

If he does declare bankruptcy, he loses all of it and has to find a way to start over at 60. Until then, he’s turning away new patients whose care he can no longer subsidize.

"I recently got a call from a divorced woman with two kids who is unemployed, house in foreclosure with advanced breast cancer," he said. "The moment has come to this that you now say, ’sorry, we don’t have the capacity to care for you.’ "

Small business 101: A private practice is like a small business. "The only thing different is that a third party, and not the customer, is paying for the service," said Lion.

"Many times I shake my head," he said. "Doctors are trained in medicine but not how to run a business." His biggest challenge is getting doctors to realize where and how their profits are leaking.

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"On average, there’s a 10% to 15% profit leak in a private practice," he said. Much of that is tied to money owed to the practice by patients or insurers. "This is also why they are seeing a cash crunch."

Dr. Mike Gorman, a family physician in Loganvale, Nev., recently took out an SBA loan to keep his practice running and pay his five employees.

"It is embarrassing," he said. "Doctors don’t want to talk about being in debt." But he’s planning a new strategy to deal with his rising business expenses and falling reimbursements.

"I will see more patients, but I won’t check all of their complaints at one time," he explained. "If I do, insurance will bundle my reimbursement into one payment." Patients will have to make repeat visits — an arrangement that he acknowledges is "inconvenient."

"This system pits doctor against patient," he said. "But it’s the only way to beat the system and get paid."

— Are you a doctor who has made financial decisions you came to regret? E-mail Parija Kavilanzand you could be part of an upcoming article. Click here for CNNMoney.com comment policy. 

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The stock market is ending a tumultuous year right where it started.

The Standard & Poor’s 500 index closed 2011 a fraction of a point below where it started the year. The S&P closed at 1,257.60, up 5.42 points or 0.4 percent. It ended 2010 at nearly the exact same level, at 1,257.64. Its loss for the year is 0.04 point.

The Dow Jones industrial average lost 69 points, or 0.6 percent, at 12,218. The Dow is up 5.5 percent for the year. The Nasdaq composite index fell 9 points, or 0.3 percent, to 2,605. It lost 1.8 percent for the year.

McDonald’s Corp. was the biggest winner in the Dow this year with a gain of 31 percent. Bank of America Corp. was the worst, down 58 percent.

The conventional wisdom is the more risk, the greater the potential rewards. But the opposite is proving true this year: Investors playing it safe have gained the most.

The most dull and conservative of stocks _ utilities _ gained 15 percent, the largest gain of the ten industry sectors in the S&P 500 index. Other winning groups are consumer staples and health care companies, up 11 percent and 10 percent in 2011 respectively.

In Europe, many of the biggest markets ended down for the year. Britain’s FTSE 100 lost 5.6 percent, Germany’s DAX 14.7 percent.

Trading has been quiet this week with many investors away on vacation. Volume on the New York Stock Exchange has been about half of its daily average pay day loans. Markets will be closed Monday in observance of New Year’s Day.

Better news on the job market and home sales lifted stocks Thursday, pushing the Dow up 135 points. On Friday Ford reported that its sales topped 2 million this year for the first time since 2007. Ford fell 0.1 percent.

Rising and falling stocks were about even on the New York Stock Exchange. Volume was just 2.2 billion shares, about half of the recent daily average.

In other corporate news:

_ Sears Holdings Corp. fell 3 percent to $31.78 after Fitch Ratings downgraded the company’s credit rating to “junk.” Sears has plunged 30 percent this week after disclosing that it would close more than 100 Sears and Kmart stores because of weak holiday sales.

_ Diamond Foods Inc. jumped 2.4 percent to $32.27. Rumors have been circulating that the hedge fund manager David Einhorn has acquired a stake in the food company that makes Emerald Nuts.

_ AMR Corp., the parent company of American Airlines, fell 17 cents to 35 cents. The company filed for bankruptcy protection last month. Late Thursday the company said its stock would be delisted from the New York Stock Exchange next week.

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