Friday, December 28, 2012

San Onofre: NRC Wants More Analysis At Ailing California Nuke Plant

LOS ANGELES ? Federal regulators Wednesday pressed the operator of the San Onofre nuclear power plant for more analysis on its damaged steam generators, as the government considers when, or if, one of the seaside reactors can be restarted safely.

San Onofre, located between Los Angeles and San Diego, hasn't produced electricity since January, after a tiny radiation leak led to the discovery of excessive wear on hundreds of generator tubes that carry radioactive water.

Southern California Edison asked the Nuclear Regulatory Commission in early October for permission to rekindle one of the twin reactors, Unit 2, and then run it at reduced power. Company officials believe that operating at up to 70 percent power will end vibration and friction that prematurely eroded generator tubing.

In a letter to Edison, NRC officials raised a potentially thorny question for the company.

Under technical operating rules, the plant is required to ensure that generator tubes retain "structural integrity" during "the full range of normal operating conditions," including if the plant is running at full power. NRC said it wanted the company to demonstrate that Unit 2 could meet that threshold, or explain how generator tubes would interact with each other if the plant is operating at maximum capacity.

Any change in those technical rules could trigger a longer, more complex review by the NRC. Agency spokesman Victor Dricks declined comment when asked if meeting the full-power threshold could be a condition of restarting the Unit 2 reactor.

Edison spokeswoman Jennifer Manfre said in a statement that the utility would provide additional information to the federal agency, as requested. A thorough review of the restart plan "is important to both the public and Southern California Edison," she added.

The problems at San Onofre center on steam generators that were installed during a $670 million overhaul in 2009 and 2010. After the plant was shut down, tests found some generator tubes were so badly corroded that they could fail and possibly release radiation, a stunning finding inside the nearly new equipment.

Friends of the Earth, a group critical of the nuclear power industry, is among several environmental groups pushing the NRC to require Edison to seek an amendment to its operating license to restart the plant, a process that could take up to two years. Spokeswoman Kendra Ulrich said in a statement the group is "encouraged that the NRC is asking hard questions" about the restart and its implications, including on the operating license.

The ability of San Onofre to run safely at lower power ? and whether that limit would require an amendment to its operating license ? came up earlier this month at a hearing of the Atomic Safety and Licensing Board, an arm of the NRC.

Administrative Judge Gary Arnold asked an Edison attorney, Steve Frantz, if he was confident that the plant could operate at 99 percent power with its ailing generators.

"I do not say that," Franz responded. He argued that running at 70 percent power would fall within San Onofre's license and operating rules.

The generators, which resemble massive steel fire hydrants, control heat in the reactors and operate something like a car radiator. At San Onofre, each one stands 65 feet high, weighs 1.3 million pounds and has with 9,727 U-shaped tubes inside, each three-quarters of an inch in diameter.

Company executives have left open the possibility that the heavily damaged generators in Unit 3 might be scrapped.

Cracked and corroded generator tubing has vexed the nation's nuclear industry for years.

Decaying generator tubes helped push San Onofre's Unit 1 reactor into retirement in 1992, even though it was designed to run until 2004. The following year, the Trojan nuclear plant, near Portland, Oregon, was shuttered because of microscopic cracks in steam generator tubes, cutting years off its expected lifespan.

San Onofre is owned by SCE, San Diego Gas & Electric and the city of Riverside. The Unit 1 reactor operated from 1968 to 1992, when it was shut down and dismantled.

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Source: http://www.huffingtonpost.com/2012/12/26/san-onofre-nrc-wants-more-analysis_n_2367118.html

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Thursday, December 27, 2012

AIG Is The Best Insurance Play For 2013 - Seeking Alpha

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

Introduction

AIG is an insurance conglomerate that spans the globe, but during the great recession like many other giant financial institutions, AIG got itself into a lot of trouble taking on the counter-party risk of mortgage backed securities. During the 4th quarter of 2008, AIG set the world record for reporting the biggest loss. It lost $99.3 billion dollars in a single quarter.

Despite the hazy past, AIG is the definition of a turnaround story. I anticipate the company to generate outstanding earnings growth going forward, and that investors will be able to earn some phenomenal yields by investing into AIG.

Qualitative Analysis

Source: Information pertaining to AIG came from the shareholder annual report

The company currently operates one of the largest insurance networks in the world, with more than 85 million clients in 130 countries. AIG is split into four business divisions: Chartis, SunAmerica Financial Group, Aircraft Leasing, and other operations.

Chartis offers a unique portfolio of insurance products and services. The insurance products are: casualty, property, financial lines, and specialty. Chartis conducts its business through multiple entities such as: New Hampshire Insurance Company, American Home Assurance Company, Lexington Insurance Company, AIU Insurance Company, Chartis Overseas, Fuji Fire & Marine Insurance Company Limited, Chartis Europe Holdings Limited, and Chartis Europe.

SunAmerica Financial Group - offers a comprehensive suite of products such as: term life, universal life, fixed/variable annuities, mutual funds, financial planning. The SunAmerica Financial Group operates under these subsidiaries: American General Life Companies (American General), Variable Annuity Life Insurance Company (Western National), SunAmerica Retirement Markets (SARM).

AIG's other operations primarily consisted of derivatives trading, and aircraft leasing. The other operations: International Lease Finance Corporation, AIG Markets, United Guaranty Corporation, AIG Financial Products, and AIG Trading Group Inc.

Currently AIG generates 91% of its revenue through the SunAmerica Financial Group, and Chartis.

(click to enlarge)

AIG's current management strategy remains simple: by 2015 achieve return on equity above 10%, generate share growth in mid-teens, grow insurance divisions, and reinvest retained earnings.

AIG aggressively competes with Berkshire Hathaway (BRK.A/BRK.B), The Travelers Companies (TRV), Chubb (CB), Allstate (ALL), Loews (L), Progressive (PGR), Hartford Financial Services (HIG), CNA Financial (CNA), among many others.

Technical Analysis

The stock has been on a continuous up-trend since November 2012. On 12/24/2012 the stock is between a very narrow symmetrical triangle formation. I anticipate the stock to break out no later than the 26th or 27th, meaning that the stock will be forced to make a major move.

(click to enlarge)

Source: Chart from freestockcharts.com

The stock is trading above the 20-, 50-, and 200- Day Moving Averages. The stock will experience further upside through 2013, as investors have under-bought the growth prospects of the company.

Notable support is $23.00, $27.30, and $30.60 per share.

Notable resistance is $37.50, $46.00, and $60.00 per share.

Street Assessment

Analysts on a consensus basis have high expectations for the company going forward.

Growth Est

AIG

Industry

Sector

S&P 500

Current Qtr.

-113.40%

-99.90%

-93.80%

9.50%

Next Qtr.

-48.50%

-99.80%

-92.70%

15.30%

This Year

266.70%

99.80%

23.30%

7.20%

Next Year

-6.70%

20.80%

6.90%

13.10%

Past 5 Years (per annum)

-42.91%

N/A

N/A

N/A

Next 5 Years (per annum)

21.93%

13.20%

10.60%

8.72%

Price/Earnings (avg. for comparison categories)

9.41

19.56

13.83

14.69

PEG Ratio (avg. for comparison categories)

0.43

1.67

0.95

1.41

Source: Table and data from Yahoo Finance

Analysts have high expectations, as analysts on a consensus basis have a 5-year average growth rate forecast of 21.93% (based on the above table). This growth rate is above the industry average for next 5-years (13.20%).

Earnings History

11-Dec

12-Mar

12-Jun

12-Sep

EPS Est

0.63

1.12

0.57

0.86

EPS Actual

0.82

1.65

1.06

1

Difference

0.19

0.53

0.49

0.14

Surprise %

30.20%

47.30%

86.00%

16.30%

Source: Table and data from Yahoo Finance

The average surprise percentage is 44% above analyst forecast earnings over the past four quarters (based on the above table).

Forecast and History

Year

Basic EPS

P/E Multiple

2003

$ 3.10

21.38

2004

$ 3.77

17.42

2005

$ 4.03

16.93

2006

$ 5.38

13.32

2007

$ 2.40

24.29

2008

$ (37.84)

-

2009

$ (93.69)

-

2010

$ 14.75

3.27

2011

$ 8.60

2.7

2012

$ 3.74

9.41

Source: Table created by Alex Cho, data from shareholder annual report

The EPS figure shows that throughout the 2003-2006 period earnings were growing due to favorable economic conditions. Then the company was adversely affected by the great recession throughout 2007-2009, as the net income rapidly declined, and AIG eventually logged the biggest loss in corporate history. During 2010 the company was able to generate a profit by restructuring the company; this involved selling business units, which inflated earnings by $17.7 billion dollars. Once the United States economy exited the recession in 2010-2012 the company earnings have improved, albeit gradually. In 2011 the abnormal earnings of $8.60 were due to a provisional benefit from taxes worth $18.03 billion dollars. The improvements in net income for 2010-2011 were one-time events and should not be considered a part of the long-term earnings growth trend. So in essence, 2012 is likely to be the most normal year for AIG over the past 5 years.

(click to enlarge)

Source: Table created by Alex Cho, data from shareholder annual report

By observing the chart we can conclude that the business is somewhat cyclical and is affected by macroeconomics. Therefore one of the largest risk factors to AIG is the slowing of international gross domestic product growth. So as long as the global economy continues to grow, the company will generate reasonable returns over a 5-year time span based on the forecast below.

(click to enlarge)

Source: Forecast and table by Alex Cho

By 2018 I anticipate the company to generate $10.19 in earnings per share. This is because of earnings growth, improving global outlook, earnings management and continued development overseas.

The forecast is proprietary, and below is a non-linear chart indicating the price of the stock over the next 5-years.

(click to enlarge)

Source: Forecast and chart by Alex Cho

Below is a price chart incorporating the past 10 years and the next 6 years. Detailing 16 years in pricing based on my forecast and price history on December 31st of each year.

(click to enlarge)

Source: Forecast and chart created by Alex Cho, data from shareholder annual report, and price history is from Yahoo Finance.

*The period 2003-2008 were price quotes based on pre-split stock prices (multiply by 20 to accurately calculate the price of the shares between 2003 and 2008). On 7/01/2009 the stock had a 1:20 split (reverse split).

Investment Strategy

AIG currently trades at $35.20. I have a price forecast of $37.94 for 2013. AIG is in a long-term up-trend. I anticipate momentum in the price of the stock, as the growth rate offers compelling stock appreciation for the foreseeable future.

Short Term

Over the next twelve months, the stock is likely to appreciate from $35.20 to $38.60 per share. This implies 9.6% upside from current levels. The technical analysis indicates an up-trend (break above the symmetrical triangle formation). While the previously mentioned price forecast using fundamental analysis further supports the trade set-up.

Investors should buy AIG at $35.20 and sell at $38.60 to pocket short-term gains of 9.6% in 2013. This return is pretty measly, meaning that short-term investors would likely do better investing in other opportunities.

Long Term

The company is a great investment for the long-term. I anticipate AIG to deliver upon the price and earnings forecast despite the risk factors (macroeconomic, competition, etc.). AIG's primary upside catalyst is international development, and earnings management. I anticipate the company to deliver upon my forecasted price target of $100.12 by 2018. This implies a return of 185% by 2018. This rate of return is exceptional, considering AIG has a market capitalization of $52B. The extra liquidity makes this a compelling growth investment for institutional investors who require higher liquidity.

Conclusion

Buy AIG on long-term growth. AIG has not died off the surface of the earth; it is more stubborn than a roach.

The conclusion remains simple: buy AIG.

Source: http://seekingalpha.com/article/1082001-aig-is-the-best-insurance-play-for-2013

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Disappointing holiday retail sales for U.S. businesses : News ...

Read?more: Local, National, News, Shopping, Holiday Shopping, Christmas Shopping, Holiday Retail Sales, Disappointing Holiday Retail Sales for U.S. Businesses, Mastercard Advisors Spendingpulse

(AP) -- WASHINGTON- It's a disappointing holiday season for U.S. retailers.

MasterCard Advisors SpendingPulse reports that in the two months before Christmas, sales of electronics, clothing, jewelry and home goods increased by only 0.7 percent compared with last year.

Analysts had expected growth of at least 3 percent.

It's been the worst year-over-year performance since 2008.

(Copyright ?2012 by The Associated Press. All Rights Reserved.)

Source: http://www.carolinalive.com/news/story.aspx?id=841014

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Moog Music tacks on Grateful Dead expansion pack to Animoog 2.0 for $4.99 (video)

Moog Music tacks on Grateful Dead expansion pack to Animoog 2.0 (video)

Late last week, Moog Music rolled out version 2.0 of its Animoog synthesizer app for Apple's slate. Now, the Asheville, North Carolina outfit is adding a truckload of new sounds less than a week after the initial release. The Grateful Dead Expansion Pack is now available for the iPad software, touting 82 presets and 45 timbres broken down into ensemble, percussion and vocal groupings. Each piece of the add-on was taken from a February 1968 performance at the Carousel Ballroom and optimized for the Animoog platform. "We're not simply providing samples from the Grateful Dead's body of work, rather we've distilled the essence of notes and phrases in a different way to transform these performances into new instruments -- new voices," says Cyril Lance, Moog's Chief Engineer. The $4.99 in-app purchase is available now, but while you're mulling it over, jump down past the break to catch a glimpse of Mickey Hart taking it for a spin.

Continue reading Moog Music tacks on Grateful Dead expansion pack to Animoog 2.0 for $4.99 (video)

Comments

Source: Moog

Source: http://www.engadget.com/2012/12/27/animoog-grateful-dead-expansion-pack/

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Interviews ? What you should be asking ? Mary-Margaret Network ...

This ran previously on Mary-Margaret.com, and now we offer it again.

You put a lot of time into preparing for every interview because you are a professional in the Game Industry. You have researched the company, the position, their product line or services, the people you are going to meet and even what to wear on the day.

Now you are in the door and it is up to you to make sure they think you are the best person for the job. You also need to make sure this company is the best place for you to work.

Door to Door Checklist:

  • How do you feel when you walk in? Is the atmosphere inviting? Is there someone there to welcome you? Are they prepared and on time to meet with you?
  • As you are escorted to the interview room (conference room, office, etc.) what do you see in the office? Is the decor pleasing or trying too hard to be hip? Do people look happy, alert and focused or tired and disconnected from their coworkers? Is everyone at work or are there lots of empty seats with no explanation volunteered?
  • Does each interviewer have a copy of your resume, a pad for notes or an obvious familiarity with your background? Do they ask open ended questions or do they steer you in certain directions? Does the interview atmosphere feel friendly, welcoming and challenging or does it feel cold or hostile?
  • Are you offered something to drink and made comfortable? If you are interviewing with multiple people over several hours, is the flow of the day being managed well with time for bathroom breaks?
  • Make sure that you are ready with questions of your own. Why do you like to work here? What opportunities has this company given you? What are your long term goals? What about the project, product or service of the company excites you?
  • You should, of course be ready with company specific questions as well.
  • Did you receive the interviewer?s business card when you requested it? Were they willing to receive a follow-up email from you after the interview? Did you make sure to give them your card so they could contact you quickly (don?t rely on your resume in their hands)?
  • When the interview ends are you escorted warmly to the door?

You have put your best into preparing for this interview. Make sure the company is interested in making a positive impression on you.

Shine On! Mary-Margaret

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Source: http://www.mary-margaret.com/2012/12/interviews-what-you-should-be-asking/

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Retailers face ho-hum holiday sales

(Reuters) - The 2012 holiday season may have been the worst for retailers since the financial crisis, with sales growth far below expectations, forcing many to offer massive post-Christmas discounts in hopes of shedding excess inventory.

While chains like Wal-Mart Stores Inc and Gap Inc are thought to have done well, analysts expect much less from the likes of book seller Barnes & Noble Inc and department store chain J. C. Penney Co.

Growth was always expected to slow this season, though an improving employment picture and rising home values had helped mitigate the worst fears. But then Superstorm Sandy hit the East Coast in late October, mild weather blunted sales of winter clothing and rising concern about the "fiscal cliff" became more of a reality, dragging down already pessimistic forecasts.

"The broad brush was Christmas wasn't all that merry for retailers, and you have to ask what those margins look like if the top line didn't meet their expectations," said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group.

The latest sign of trouble came from MasterCard Advisors Spending Pulse, which reported holiday-related sales rose 0.7 percent from October 28 through December 24, compared with a 2 percent increase last year.

The preliminary estimate from SpendingPulse was in line with other estimates showing weak growth during the holiday season, when retailers can book about 30 percent of annual sales -- and in many cases, half of their profits.

"It has been a very uneven industry performance, probably at least for the last year, and that certainly continued into the holiday season," said Michael Niemira, chief economist at the International Council of Shopping Centers, in an interview with Reuters Insider.

The latest holiday season could end up the weakest since 2008, during the last recession, when sales actually declined. The National Retail Federation had previously predicted 4.l percent sales growth this year, versus a 5.6 percent increase a year earlier.

Markets reacted sharply to the gloomy outlook.

The S&P retail index fell 1.8 percent in midday trading Wednesday, and 16 of the top 20 decliners in the broader S&P 500 were retailers or consumer brands.

INVENTORY CRUSH

To be sure, the actual percentage change in holiday sales can differ substantially, depending on which group is composing the figure. SpendingPulse and the National Retail Federation, for example, look at different categories, which can cause some variation in their forecasts.

Regardless of how bad the figure is, one concern for retailers is that soft sales will mean an excess of inventory that will force some to slash prices.

Among other brands, Barnes & Noble offered 50 percent discounts in stores via email promotions on Wednesday, while Ann Inc had half-off at its Loft stores, and Bloomingdale's promoted discounts of up to 75 percent in some cases.

Even in a good year, retailers would have offered discounts to lure customers, but some suggest a weak year has now forced their hands.

"Retailers are no longer chasing sales, they are chasing inventory management. That means the discounts that they would have liked to be at 50-60 (percent) off have climbed to 75 to even 80 (percent) off," said Marshall Cohen, chief industry analyst at The NPD Group.

Erica Ayala, 31, a mother of four who lives in New York's Harlem neighborhood, waited until the day after Christmas to shop for that very reason, saving more than $150 on kids' clothes alone at Gap's Old Navy chain.

"You can't go wrong with that," she said.

SANDY AND CLIFF

A variety of factors were thought to be at fault for the weak season, starting with Superstorm Sandy, which depressed sales in the Northeast in late October and early November.

Sales recovered in the second part of November, with early hours and promotions helping drive traffic during the "Black Friday" weekend after Thanksgiving, analysts said.

But there was a deep lull in early December as a winter storm in parts of the United States may have limited sales, said Michael McNamara, vice president of research and analysis at MasterCard SpendingPulse.

On top of that, there were fears that taxes will rise in the new year if Washington cannot negotiate a solution to the end-of-year "fiscal cliff" dilemma.

A recent Ipsos poll for Reuters found that only 17 percent of shoppers were spending less due to cliff fears, though analysts said the damage was still done.

"The government usually does not have a role in holidays but this year they did. They got right in the midst of it, the timing couldn't have been any worse," NPD's Cohen said.

BRIGHT SPOTS

One bright spot has been online sales, which continue to grow at a faster pace.

On Christmas Day, online sales jumped 22.4 percent, outpacing the 16.4 percent increase in 2011, according to IBM Digital Analytics Benchmark, which tracks more than 1 million e-commerce transactions a day from 500 U.S. retailers.

Whether online or off, some of the winning retailers were expected to be Wal-Mart, which attracted shoppers with early deals on the night of Thanksgiving and kept its focus on value, and apparel chains like Gap Inc, whose bright sweaters were successful, according to analysts.

Toys sold well, and hot items that were harder to find later in the season included certain Mattel Inc Barbie dolls and LeapFrog Enterprises Inc's LeapPad2 tablet computer, according to B. Riley Caris analyst Linda Bolton Weiser.

For retailers who have struggled, analysts said all hope was not lost. Many have fiscal quarters that end in January, so they still have time to benefit from a post-Christmas rebound. Because Christmas fell on a Tuesday, some said they could even see a boost this week from people who have extra time off.

"There's still a little bit more time to go until the holiday season is officially over," Morningstar analyst Peter Wahlstrom said.

(Reporting by Brad Dorfman, Nivedita Bhattacharjee and Jessica Wohl in Chicago, Additional reporting by Chuck Mikolajczak and Dhanya Skariachan in New York; Writing by Ben Berkowitz; Editing by Jeffrey Benkoe)

Source: http://news.yahoo.com/retail-sales-creep-higher-weak-holiday-season-early-143749277--finance.html

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A burden that children should never have to bear - World Vision Blog

An eight year old Syrian refugee child named Layla[1] shares, ?I saw my cousin dying in front of me, so I always see this scene in front of my eyes.?

As children all over North America happily rummage through the cheerful remains of Christmas Day?s joys?festive gift wrap strewn about, the latest version of Halo blaring from 40 inch television screens?the existence of Syrian children presently seeking refuge in Lebanon is one far less carefree.? In this season of joy, it?s difficult to fathom that at least 66,000 children like Layla are coping with the loss of home and childhood as their families struggle to survive the displacement of war and onset of a cold, snowy winter in Lebanon?s Bekaa Valley.

*????? *?????? *

Over the past three months, Syrian refugees have poured across Lebanon?s borders at an exponentially increasing rate.? UNHCR reports that 154,387[2] Syrian refugees are currently residing in Lebanon.? Nearly 75 percent of these refugees are women and children; children who should be focused on homework and playing are instead grappling with educational upheaval, a lack of stability and anxiety and exposure as they face uncertain futures and adapt to life in a foreign country whose host communities do not fully accept them.[3]

In short, Syrian refugee children are bearing burdens no child anywhere should ever have to carry.

Unfortunately, experiences like Layla?s are not uncommon. ?In Robbed of Childhood, Running from War, a newly released World Vision report, World Vision found many children willing to share openly and ?at length about violence, death and the politics of war.?

In the report, which surveys 100 Syrian children aged 7-13 in the Central and Western Bekaa region of Lebanon, children spoke with World Vision staff ?about images of their homes and schools burning, people getting shot and tanks roving their neighborhoods. Even indirect exposure to violence such as images of dead bodies on the news, continues to haunt them.?

A burden that children should never have to bear | World Vision Blog

Wael, showing a book he brought with him from Syria. It is his most precious procession away from his real home. It is his geography book. He flips through its pages every now and then and dreams that one day he will return with it to his home to finish his education.

One child told World Vision:

?My three brothers died in Syria.? They were younger than me. They shot my brothers when they were playing with their friends on the street.?

The experiences of these children make one?s heart heavy?even as someone who has worked with survivors of humanitarian crises around the world, I cannot imagine a world in which my very young son, who should freely enjoy an existence crashing dump trucks around our living room, bearing the devastation and politics of war.? But children who have fled Syria are doing just that.?

?My brother is 13 and used to go to school in Syria. Here he works with steel.?

?My sister, 15, used to go to school but here she works at a laundry shop.?

Like many displaced children in humanitarian crises throughout the world, Syrian refugee children in Lebanon are sometimes forced to choose work over school. ?The reasons for this are many, including challenges with enrollment, language barriers (while Syrian children are taught in Arabic, the Lebanese system includes English and French) and the economic pressures facing refugee families. ?I cannot imagine a world in which my son has to opt of middle school to support our family?s financial needs.? But this is the reality facing Syrian refugee children every day.

In the midst of holiday festivities, after Christmas sales and time with dear family and friends, consider coming alongside Syrian refugee children in Lebanon to help them shoulder burdens children should never bear.? Now that?s a world worth imagining.


Elizabeth Ranade-Janis is the Program Management Officer for the World Vision Humanitarian & Emergency Affairs Team

Make a donation to the Syrian refugee crisis. The number of refugees fleeing conflict-ridden Syria has tripled in the last three months, according to UNHCR, the United Nations refugee agency. More than 100,000 registered Syrian refugees are in Lebanon, where World Vision has been providing basic hygiene kits and food vouchers to help them survive. Your gift will help continue this urgent response.

[1] At the request of parents, the names of all children have been changed to protect identities.

[2] Note that this number represents only the Syrian refugees who feel it is safe to official register with UNHCR; there are many others believed to be living in Lebanon.

[3] From Robbed of Childhood, Running from War, World Vision, December 2012.

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Source: http://blog.worldvision.org/disaster-relief/a-burden-that-children-should-never-have-to-bear/

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