Leasing News

First-time claims for state unemployment benefits climbed by 22,000 to 411,000 in the week ended Oct. 12 from a revised 389,000 in the prior week, the Labor Department said.

This was higher than Wall Street's expectation for a rise to 395,000 from the 384,000 originally reported for the Oct. 5 week. Economists view the 400,000 level as the sign of a stalled labor market.

In a sign the pace of hiring has slowed, the number of unemployed staying on benefits for more than one week rose by 141,000 to 3.76 million in the week ended Oct. 5, the latest for which such figures are available.

The jump in so-called continued claims was the largest since the Nov. 25, 1995, week, while the level was the highest since the May 25 week, the department said.

A more solid gauge of labor market trends, the four-week moving average for new claims, fell for the second straight week to 408,750, but topped 400,000 for the seventh week in a row.

Economists view the four-week average as a better measure of labor market trends because it irons out weekly fluctuations caused by holidays and seasonal factors.

Not all the economic news was bad as U.S. housing starts logged their biggest gain in more than seven years in September, the Commerce Department said in a separate report.

Ground breaking for new homes jumped 13.3 percent to a seasonally adjusted annual rate of 1.843 million units last month. It was the biggest monthly increase since July 1995.

However, U.S. industrial output fell in September for the second month in a row, the Federal Reserve said in a report underscoring the fragility of the manufacturing sector in the uneven U.S. recovery.

The Fed said output at U.S. factories, mines and utilities edged down by 0.1 percent in September after dropping by 0.3 percent in August. Manufacturing output, the largest segment in the report, dropped by 0.3 percent last month, after declining 0.2 percent the previous month.

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Textron plans to cut 2,000 more jobs, posts third quarter profit

By Richard Lewis, Associated Press

PROVIDENCE, R.I. (AP) Textron Inc. said Thursday it plans to cut another 2,000 jobs even as it reported third-quarter earnings that matched Wall Street forecasts.

The industrial conglomerate said the new job cuts are designed to help it meet its restructuring goals and cope with a sluggish economy.

They are in addition to 7,500 cuts announced previously as part of a $325 million initiative begun in October 2000 to reorganize some divisions and sell off others. The combined cuts represent 16.8 percent of Textron's work force of 51,000 workers.

Textron said it earned $71 million, or 51 cents a share, in the three months ended Sept. 30, compared with a loss of $330 million, or $2.34 a share, a year earlier. Revenue slipped to $2.6 billion from $2.8 billion a year ago.

Excluding special charges and restructuring costs, its earnings amounted to $95 million, or 68 cents a share, in the latest quarter. That matched expectations of analysts surveyed by Thomson First Call.

''The industrial environment continued to be sluggish and we had a number of challenges to overcome,'' said Lewis Campbell, Textron chairman, president and chief executive. ''Meeting our targets was largely the result of our continued success in improving operating efficiencies across the enterprise through our restructuring program and other cost reduction activities.''

Textron said it expects earnings for the year to be $3 per share before special charges and restructuring costs. That is slightly ahead of the $2.98 a share that analysts expect.

''Looking forward, we do not see any near-term improvement in the general industrial manufacturing environment,'' Campbell said.

Textron expects its reorganization and sell-off of nonessential businesses to cost another $150 million and to be completed by the end of next year. The company so far has closed 65 facilities, including 29 manufacturing plants, officials said.

''Restructuring is really going to be our driver for the next two to three quarters,'' Campbell said.

Textron said its controversial V-22 Osprey program seemed to be back on track. Campbell said three of the tilt-rotor Ospreys are in tests, and he expects five to be in flight by year's end.

The aircraft is a helicopter/plane hybrid that was grounded by the military for 18 months, ending last May, because of two fatal crashes.

While acknowledging the commercial market looked soft, chief financial officer Ted French said the company saw positives coming out of domestic security legislation enacted by Congress and increased inquiries for Bell helicopters that could be used in oil exploration, with prices rising as a possible conflict in Iraq threatens the flow of crude oil.

Textron is a $12 billion multi-industry company with employees in 40 countries.

On the New York Stock Exchange, Textron shares gained 7.3 percent, or $2.62 a share, to close Thursday at $38.77.

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CIT Refinances $3.7 Billion Bank Facility; Strong Demand from Syndicate Pushes New Facility Above $2.0B Target

LIVINGSTON, N.J., -- CIT Group Inc. (NYSE: CIT) announces it has paid off the fully drawn $3.7 billion bank facility due in March 2003 and has negotiated a new $2.3 billion, committed bank facility maturing in October 2003.

CIT utilized the new $2.3 billion facility along with other liquidity

sources, including cash on hand, to fully repay the $3.7 billion facility. "This refinancing is another step forward in our commitment to return to a normalized funding program, " said CIT Chief Financial Officer Joe Leone. "We are very pleased with the continued support the company has received from our relationship banks."

The new bank facility was significantly oversubscribed, allowing the

company to increase the facility size from its original $2.0 billion target. All material terms, conditions and covenants remain substantially the same. The new bank facility supplements existing committed, fully available bank facilities of $4.7 billion. These facilities have been reduced to reflect the company's downsized commercial paper program.

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Fleet profit off 24% in quarter

Bank puts blame on Latin America woes, tech investments

By Ross Kerber, Boston Globe Staff

FleetBoston Financial Corp. said yesterday its third-quarter profit fell 24 percent, blaming financial turmoil in Latin America and bad investments in telecommunications and technology companies.

Analysts expressed relief the figures weren't worse for New England's largest bank, after it was forced to take a charge totaling over $1 billion earlier this year.

For the three months ended Sept. 30 Fleet said net income fell to $579 million from $766 million a year ago. Net income from continuing operations was $597 million, from $771 million, before the company closed units including its one-time star Robertson Stephens investment banking division. Revenue fell to $2.87 billion from $3.3 billion a year ago.

A bright spot came in consumer financial services, as at other banks. Fleet president Eugene McQuade called the overall results ''unremarkable'' given the weak economy as a whole.

''The bad stuff looks to be stabilizing and the good stuff looks to get better,'' McQuade said yesterday. For Fleet, he said, ''Once the US economy starts to improve, the issues resolve themselves.''

Some analysts remain skeptical of the bank's competitive position, however. On a teleconference yesterday, analysts pressed for more details about Fleet's poor performance in commercial lending and wondered how the bank plans to restore revenue growth.

''The real issue for Fleet is where's the plan to generate additional business going forward?'' said Richard Bove, managing director of San Francisco research firm Hoefer & Arnett. In contrast to Fleet, he noted other banks including Wells Fargo & Co. and Fifth Third Bancorp showed revenue increases. ''Not every bank is crying in its beer now because they can't get enough business,'' Bove said.

McQuade said Fleet will continue its strategy of providing more fee-based financial offerings, and improving customer service.

''Our anticipation is that these will continue to grow nicely over the next year,'' he said. Executives also noted the bank's level of ''nonperforming assets,'' or questionable loans, stood at $3.8 billion, down $130 million from the second quarter.

Banks have reported mixed results for the third quarter so far. While Citigroup Inc. earnings were above expectations on Tuesday and helped rally stocks overall, the second-largest bank, J.P. Morgan Chase & Co. yesterday reported a 91 percent decrease in profit on loan write-offs.

Fleet's goal was to avoid a repeat of its second quarter, when it posted a loss of $386 million because of loans gone bad in Argentina and heavy lending to domestic corporate catastrophes including WorldCom and Adelphia. It succeeded by some measures on Wall Street, which drove down Fleet shares 34 cents to close at $21.20 on a day when many bank stocks declined.

For the three months ended Sept. 30, Fleet said expenses fell to $1.6 billion from $1.73 billion for the same period a year ago. But the savings was more than offset by low lending rates that reduced net interest income to $1.53 billion, from $1.83 billion, and by falling profits from capital markets operations that reduced noninterest income to $1.34 billion, from $1.47 billion a year ago.

Fleet said its consumer financial services earnings rose $13 million based on growing loans to consumers for homes and credit card usage. But its principal investing business lost $68 million. The bank also posted a $42 million loss from operations in Argentina.

Banking problems in Latin America continue to be a drag on the company, dashing hopes the region would prove a hedge against harsh times at home. Fleet said its loss in Argentina was mostly offset by $31 million in income from Brazil and $9 million from other international operations.

McQuade said Fleet's outlook in Brazil should improve assuming the leading candidate for the country's presidency, Luiz Inacio Lula da Silva, adopts the centrist economic policies he has embraced during his campaign.

T. Rowe Price analyst Mike Holton said investors only hope the Latin American operations don't lead to more charges against earnings. Absent that risk, Holton said, the quarter ''was a plain vanilla, nothing exciting quarter, which is very good for Fleet given all the surprises they've given investors.''

Fleet has 51,000 employees, down from its peak of 61,000 after the company closed various offices in Latin America, Asia, and its Robertson Stephens investment banking unit in California. McQuade said the bank doesn't have any immediate plans for layoffs, but added it is still evaluating the economic outlook for 2003.

Ross Kerber can be reached at kerber@globe.com.

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Bank of West in Talks to Purchase Trinity Capital?

A spokesman for Trinity Capital in San Francisco would not confirm nor deny the rumors

that Bank of the West is purchasing Trinity Capital. Bank of the West representatives

would not return telephone calls or e-mail from Leasing News regarding the subject.

The Northern California banking community has been talking about this acquisition

for several weeks; one party said for “months.” Bank of the West is after the large, very clean portfolio. How it would handle the vendor business from Trinity in lieu of its broker program is one of the unanswered questions. The sales force at Trinity

is another issue, but we were told don’t you even say “no comment, Kit. I’ll call

you, don’t call me. “

Trinity Capital is one of the most successful leasing companies on the West Coast

with an excellent reputation for servicing leasing portfolio’s, making positive

credit decisions, and working very efficiently. There is high morale at the

company. It is also one of the few leasing companies in the area which

still is actively looking to hire personnel.

It is rumored that Bank of the West Leasing sales are off ( but who’s isn’t.) All information we have is sales are robust at Bank of the West Leasing.

It is also rumored that the “owners” of Trinity Capital believe they will face a “wall of financing issues” by March, 2003, including costs of funds.

Those on the inside said the sale will take place soon. A few have a pool going on

when the official announcement will happen.

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To Provide Background on this, Guardian Financial sold many leases to Commercial

Money Market, who now is in Chapter 7 bankruptcy. Here is a story from the archives

of the Crain’s Cleveland Business:

Guardian's defaults lead to lawsuits

By RYAN CORNELL Crain’s Cleveland News

A company in Cleveland that buys equipment leases as investments has defaulted on nearly $19 million in loans made by a pair of Ohio banks.

As a result, Guardian Financial Group LLC and sole shareholder Blaine Tanner have become entangled in court battles involving both lenders, two insurance companies and another company that invests in those leases.

According TO court documents filed April 11 in Cuyahoga County Court of Common Pleas, Guardian has acknowledged it defaulted on the $10.5 million balance of a loan from Sky Bank of Toledo. Guardian said a subsidiary, Guardian Capital V LLC, also defaulted on the $3.6 million balance of a loan from Second National Bank of Warren. It also acknowledged that a second subsidiary, Guardian Capital XVIII LLC, defaulted on a Sky Bank loan with a $4.8 million balance.

The documents were filed by Sky Bank and Second National in conjunction with LAWSUITS each filed against GUARDIAN'S insurers, which have refused TO cover the defaulted loans.

Mr. Tanner's attorney, Steven Bell, of the Simon Law Firm of Cleveland, said various companies that leased computer equipment under some of the leases in which Guardian invested failed TO make lease payments since early this year, thus causing Guardian TO default on its loans.

Mr. Bell said GUARDIAN'S losses from its investment in the equipment leases totaled "millions of dollars." However, he would not specify the amount of the losses, and court documents also do not include such details.

Illinois Union Insurance Co. of Philadelphia and RLI Insurance Corp. of Peoria, Ill., insured GUARDIAN'S investments in the equipment leases, according TO LAWSUITS filed by Sky Bank and Second National. Mr. Bell said in the event of default by Guardian, the insurance companies were supposed TO make payments TO the banks TO cover the loans.

"The insurers stood behind the deals, and that's why Guardian got into them," Mr. Bell said.

But the insurers have refused TO pay up, prompting Sky Bank and Second National TO file separate LAWSUITS April 11 in Cuyahoga County against Illinois Union. Sky Bank also filed a lawsuit against RLI on the same date.

Representatives for Sky Bank and Second National declined TO comment last week on their court actions. However, Illinois Union said in a letter submitted as an exhibit in Second National's lawsuit that it has no intention of paying on the policies, which were meant TO insure investments by Guardian and Las Vegas-based Commercial Money Center Inc., a company that sold part of its interest in certain equipment leases TO Guardian.

In its letter, Illinois Union said the insurance policies were obtained through "fraudulent misrepresentations" and omission and concealment of important details. The letter, dated March 8, was written by Illinois Union representative Joan Albanese TO Second National TO inform its management the insurance company considered the policies void.

Ms. Albanese wrote that the insured "concealed or omitted TO disclose that certain of the purported leases which are the subject of the policy were nonexistent, in default and/or forfeited before the issuance of the policy."

According TO Second National's lawsuit, Illinois Union originally insured Commercial Money Center's investments on July 28, 2000. The coverage then was extended TO GUARDIAN'S investment when Guardian invested in the leases on Aug. 1, 2000, the Second National suit states.

Besides the allegations of fraud, Ms. Albanese further charged in the letter from Illinois Union that some or all of the leases were "usurious loan transactions," with interest provisions that violated state laws against excessive interest rates. The letter did not specify which state's laws had been violated, and a spokeswoman for Illinois Union said the company doesn't comment on legal matters. Representatives for RLI didn't return three calls for comment.

Mr. Bell wouldn't say if Guardian plans TO sue either insurance company.

"The Guardian companies are working very closely with the banks," he said. "We're all in this together."

Mr. Bell said there is no evidence TO indicate that either Commercial Money Center or Guardian has done anything wrong. A phone number listed for Commercial Money Center in Las Vegas was not in service last week, and its principals could not be reached for comment.

Mr. Bell said Mr. Tanner's past financial and personal troubles do not play into the current situation.

Mr. Tanner, a Shaker Heights resident, was convicted on fraud charges in his native Canada in 1975 and has another conviction for evading more than $360,000 in income tax in 1994. Mr. Tanner also made headlines in both Cleveland and Toronto in the summer of 2000 when a Canadian court forced him TO pay $740,000 in back child support owed TO a former wife.

His current wife, Ellen Simon, is a principal in the Simon Law Firm, and Guardian leases office space from the Simon firm in the Penton Media Building downtown. Ms. Simon said there was no other business connection between her law firm and Guardian.

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Housing Starts Up to 16-Year High in September

By Daniela Deane

Washington Post Staff Writer

Housing construction rebounded sharply and surprisingly in September to its highest level in 16 years, reversing a dip in August that prompted worries about a slowdown in the real estate market.

But analysts question how long the industry can stay so healthy while the rest of the economy sputters.

Housing starts were up 13.3 percent in September over August, the Commerce Department reported yesterday. That translates into an annual rate of 1.84 million homes, the highest since 1986. In August, starts fell 1.5 percent from July.

Single-family home starts rose 18.2 percent in September over August to an annual rate of 1.48 million, the highest since November 1978.

Economists offered no single reason for starts increasing so much in September after falling in August. Among several they cited were weather, seasonal factors and low mortgage rates.

They also cautioned that monthly figures tend to be erratic and so no single number should be given much weight.

"The rise was fairly extraordinary," said Michael Carliner, an economist at the National Association of Homebuilders, a trade group. "It shows that the housing market still looks very good, but frankly, the reason for this sharp of a rise is not entirely clear."

Carliner said the number of building permits issued is a much more reliable number than monthly starts. That figure has remained fairly steady throughout the year.

While construction of single-family houses soared, multifamily starts dropped 4.4 percent in September as the rental market continued to soften.

"If you look closely, there are a few things that look like cracks," Carliner said. "Multifamily starts were down, caused probably by people moving from rentals to owning homes. And there are geographical areas where they may be some questions."

Although the Commerce Department figures showed starts up in every region of the country, Carliner said his association's surveys and reports from builders have shown a bit of weakness in the Southeast, the industrial Midwest and the Pacific Northwest. "There are some places that are rosier than others," he said.

Economists said the September increase in construction was probably spurred by record-low mortgage rates and forward buying to take advantage of those rates. They said buying -- and thus building -- is also spurred by aggressive mortgage lending by banks and a shift of money from stocks to housing.

Rates on 30-year fixed rate mortgages averaged 6.15 percent this week, up from 5.98 percent last week, Freddie Mac reported yesterday.

"Rates are extraordinarily low," said Mark Zandi, chief economist at Economy.com. "That's spurring a lot of forward buying, where people buy ahead of when they normally would because the rates are so low and lending terms so favorable." Zandi said the low rates were actually "stealing demand away from the future."

Usually, builders start to wind down rather than increase construction as winter approaches, said John Silvia, chief economist at Wachovia Corp. "This year, they're taking advantage of these extremely low rates," he said. Silvia predicted that housing starts would fall next month.

Economists questioned how much longer real estate can remain so robust.

"Clearly, housing is still going strong, although there seems little underlying basis in the economy to support it," said Dean Baker, co-director of the Center for Economic Policy Research, a Washington think tank. "This does not seem like a sustainable story."

Carliner, from the builders group, said, "We're concerned about the fact that housing cannot continue to do well if the rest of the economy doesn't start doing better as well."

Chart---Building to a Peak

http://www.nytimes.com/imagepages/2002/10/18/business/18econ_chart.ready.html

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Impact of fading tourism on 10 major metro areas

By Associated Press

Travel and tourism generated $263 billion within the top 100 metropolitan areas in 2000. Here are the 10 top metro areas of the country, with the amount generated by tourism in 2000, followed by the percentage of expected decline by the end of 2002.

New York, $17.6 billion in 2000, down 17 percent.

Chicago, $14 billion in 2000, down 16.2 percent.

Los Angeles-Long Beach, Calif., $13.6 billion in 2000, down 14.5 percent.

Atlanta, $11.1 billion in 2000, down 12.5 percent.

Washington, $10.2 billion in 2000, down 11.3 percent.

Dallas, $9.8 billion in 2000, down 15.9 percent.

San Francisco, $8.4 billion in 2000, down 26.5 percent.

Las Vegas, $7.8 billion in 2000, down 22.3 percent.

Houston, $7.6 billion in 2000, down 8.2 percent.

Boston, $7.4 billion in 2000, down 16.5 percent.

Source: DRI-WEFA

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Dell regains lead in global computer sales from HP

By David Koenig

ASSOCIATED PRESS

DALLAS – Dell Computer Corp. has regained the lead in worldwide personal computer sales from rival Hewlett-Packard Co., according to a new survey, and its debt was upgraded by a major rating agency.

Together, Thursday's developments added to Dell's reputation as a company that can prosper in the midst of a long slump in technology spending.

Research firm International Data Corp. estimated that Dell shipped 5.2 million PCs in the third quarter, an increase of 23 percent over the same period last year, to top Hewlett-Packard's 5 million shipments.

Dell had held the top spot for five straight quarters until being dethroned earlier this year when HP acquired Compaq Computer Corp.

"It's a credit to our team, and we're proud of the rate at which we're winning new customers, and retaining and expanding our business with existing ones," said Michael Dell, chairman and chief executive.

Dell's strong showing helped a struggling industry dig out from the tech collapse of the past two years. IDC said the PC industry's total third- quarter shipments rose nearly 4 percent, to 32.6 million, after five consecutive quarters of decline.

Separately, Standard & Poor's upgraded Dell's credit to single A-minus from triple B-plus. S&P credit analyst Martha Toll-Reed said the upgrade was due to Dell's strong balance sheet and consistent profitability during tough times in the tech industry.

Dell earned $958 million and revenues rose 6 percent, to $16.5 billion, in the six months that ended Aug. 31. S&P said Dell, with about $500 million in debt outstanding, should prosper by expanding its sales of profitable servers, data-storage systems and networking products.

Dell shares rose 72 cents, to $27.74, in trading Thursday on the Nasdaq Stock Market.

The outlook for Dell contrasts with news this week from computer chip makers Intel Corp. and Motorola Inc. Their shares plunged after Intel reported weaker-than-expected third-quarter earnings and Motorola scaled back sales and earnings forecasts.

Loren Loverde, who directs IDC's PC-sales research, said Dell used aggressive marketing to gain market share despite the reluctance of consumers and businesses to spend money.

"Dell has consistently outperformed the market for at least the last year, even through the slowdown," Loverde said.

IDC, which said it surveyed vendors and distributors in 55 countries, said Dell had 16 percent of worldwide PC sales in the third quarter and HP had a 15.5 percent share.

Shebly Seyrafi, an analyst with A.G. Edwards & Sons, said Dell's strength lies in its direct-sales model, which bypasses stores.

"They have a cost advantage, so they can be more price-aggressive or they can give customers more things for the same price," Seyrafi said.

Dell surged while HP was busy winning narrow approval from shareholders to buy Compaq. Loverde, the IDC analyst, said customers might have been affected by the acquisition's uncertain fate.

Not content with its PC position, Dell, based near Austin, is taking direct aim at HP's stronghold in the printer market. It has struck a partnership with Lexmark to produce printers, and analysts say Dell could make similar deals with other manufacturers.

Some analysts have suggested that Dell's long-term growth prospects are limited because about 80 percent of its revenue comes from sale of desktop and notebook computers, where the market is more saturated than for other technology products.

Dell is believed to be considering several other markets that could hold out the promise of more robust growth, including servers, services, data-storage systems and handheld devices.

Dell could become a force in the server market if servers become commodities largely differentiated by price, said Seyrafi, the A.G. Edwards analyst. But, he said, Dell would face potent competition in high-end servers from IBM, Sun and others.

On the Net:

www.dell.com

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Microsoft Reaps Licensing Policy Bounty

By Brian Morrissey Internetnews.com

Microsoft ) reported robust earnings Thursday, buoying the wobbly tech sector and giving a glimpse into the performance of its controversial volume-licensing software policy.

For the first quarter of the 2003 fiscal year, the Redmond, Wash., company reported growing revenue 26 percent to $7.75 billion, compared to the same period a year ago. Net income nearly doubled to $2.3 billion in the period.

Microsoft benefited from a big rush in July from procrastinating companies to sign on to Microsoft's Software Assurance (SA) program before the July 31 deadline.

The company has now built a sizeable amount of so-called unearned revenue, which includes the money earned over the life of the agreements in its volume-licensing programs. For the quarter, unearned revenue increased 56 percent to $9.13 billion.

"We saw broader customer adoption of our licensing programs than we anticipated, as customers recognized the value of entering into long-term licensing agreements for our products," Microsoft CFO John Connors said in a statement.

Introduced 15 months ago, the program scrapped Microsoft's hodgepodge licensing system, which included five different ways to buy upgrades, with a unified program that charges customers 25 percent of the license fee for server software and 29 percent for desktop software on an annual basis. It would allow customers to have guaranteed maintenance of their software, much like the system used for mainframes.

Customers quickly voiced displeasure with SA, despite Microsoft's soothing words that half of all enterprise customers would see no change in their costs, 30 percent would see a decrease, and 20 percent would pay slightly more.

Soon, Microsoft faced a brewing customer revolt, as many businesses saw the plan as confusing and designed to wring more money out of them. After delaying the program twice, Microsoft still faced customer discontent. In March, researcher Gartner Group estimated that 35 percent of businesses had joined the program.

While more companies signed up through the spring, Gartner analyst Alvin Park said many waited until July to make a decision. Park now estimates almost two-thirds of enterprises have signed up for SA, in some form. The added bonus, for Microsoft, was the impetus it gave companies to bump up to pricier licenses.

"Based on discussion we had with clients, our best guess is they significantly increased the number [of companies] that signed enterprise agreements," he said.

Park said between 10 and 15 percent of U.S. customers had enterprise agreements when Microsoft first announced Software Assurance in May 2001; now, he estimates 30 to 35 percent have them. Of the ones that did not purchase an enterprise agreement, Park said between 30 and 35 percent of them bought SA or another upgrade for at least some Microsoft products.

While Microsoft CEO Steve Ballmer sang the cost-saving praises of the policy, analysts said the main motivation behind the shift was to give the company a guaranteed annuity revenue stream to smooth out the peaks and valleys of its software business.

Microsoft's dominance mitigated some of these peaks and valleys. Still, as a software company, Microsoft has depended on blockbusters.

Microsoft's attention to this dilemma was on display this summer, when the SEC investigated it for hoarding revenues in some quarters to hold in a "rainy-day" fund to cover possible future revenue shortfalls. Microsoft settled the investigation without any admission of wrongdoing, but the company agreed to stop the practice.

Before the new policy, Microsoft had spread revenue through the life cycle of products -- over three years for Windows, for example. Yet many customers would end up running Windows for longer than three years, putting off upgrades for another day.

Under SA, enterprise customers are locked into upgrades as they come out. Microsoft's unearned revenue breakout for the quarter shows the advantages of this. Compared to the first quarter of fiscal year 2002, short-term unearned revenue increased almost 16 percent to $6.84 billion, while long-term unearned revenue rose 26 percent to $2.29 billion.

Even with some customers making noise about exploring Microsoft alternatives, such as the Linux operating system and Sun Microsystems' StarOffice suite of office software, most customers found switching from Microsoft too costly and too difficult, analysts said.

Park said it was still too early to pass final judgment on the policy.

"I think we won't know how successful it was until two years from this July," Park said. "We'll see how many people choose to continue signing up for Software Assurance when their current agreements expire."

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80 days for ports to cool off

Court keeps workers clearing cargo logjam

Bob Egelko, George Raine, San Francisco Chronicle Staff Writers

Despite grumbling about the slow pace of work since West Coast ports were reopened by court order last week, shipping lines that use the ports passed up a chance at a court hearing Wednesday to blame the longshore workers union for the alleged delays.

Just before the hearing, U.S. District Judge William Alsup signed an order, previously agreed to by labor and management, extending the 8-day-old cooling- off period to the full 80 days authorized by the Taft- Hartley Act. He then invited complaints about violations of his earlier order -- one that required dockworkers to perform at a "normal and reasonable rate of speed" -- but got no takers.

"We're monitoring carefully," said Clifford Sethness, a lawyer for the Pacific Maritime Association, which represents shipping lines and terminal operators of 29 ports from Seattle to San Diego. He said the first payroll reports were just coming in and showed that most workers are back and ports are operating.

At the moment there is not a lot to be optimistic about," said John Pachtner, a spokesman

for the association. "You continue to see below- normal levels of productivity and we are not making significant progress on clearing that pipeline of cargo."

Said union lawyer Zuckerman, "Number one, there is no slowdown happening. If they had evidence of some problem occurring, if there was noncompliance, they would have certainly brought it to the court's attention."

The PMA imposed its earlier lockout after claiming the union had engaged in an illegal slowdown. The ILWU countered that members were simply following safety rules to the letter after the deaths of five dockworkers this year.

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Friday—Odds and Ends

November 8^th/9^th Marina del Rey, California

I don't know if I was as clear as I could have been in an earlier

announcement about the National Association of Equipment Leasing Broker’'s upcoming regional meeting on November 8th and 9th

in Marina del Rey, California.

The free Networking Reception on Friday evening, the 8th, is open to ANYONE

in the industry regardless of whether or not they're an NAELB member and

regardless of whether or not they've registered for the educational meeting

the next day.

The reception will be a chance to meet the NAELB Board of Directors and

other industry colleagues and to talk shop, brag, commiserate, gossip or

just plain have fun. There's no charge to attend the reception, but advance

reservations are required.

Anyone who cannot make it to Saturday's meeting but still wants to come to

the free Friday evening reception on November 8th, at the Marina del Rey

Hotel, should call the NAELB office at: (800) 996-2352; or send an e-mail

to: info@NAELB.org. We plan on having a great time and hope to see lots of

your readers there!

Thanks for helping me clarify that, Kit.

Gerry Egan

President

NAELB

President

TecSource, Inc.

5621 Departure Drive, Suite 113

Raleigh, NC 27616

Phone: 919-790-1266

Fax: 919-790-2262

E-Mail: mailto:GerryEgan@ForEquipmentLeasing.com

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Branding in Leasing

"For lunch, Duane Knapp, a branding guru, tried to convince the audience that leasing could be branded like Tiffany or Starbucks. I did not agree with him. Leasing is an intangible and you cannot brand a document. You can achieve superior results with superior selling talent and put in extraordinary features in a T&C, but I do not think, you can convince a lessee that leasing is like buying a Mercedes."

Jeff Taylor, our correspondent reporting on the Equipment Leasing Association S.F. Conference.

Here Andrew Thorn, ThalmanFinancial/LeaseNow, disagrees:

“I would like to respectfully disagree with Jeffrey Taylor's opinion on

branding in the leasing industry and advise those that have read it that

Jeffrey's background is more accounting than marketing. Any brand out

there is an intangible that is marketed to, and accepted by the people

who would be our customers.

“Branding is possible in the leasing industry and the successful

companies of the future will be those that develop a good brand.

Anybody that is unable to distinguish themselves from their competitors

and establish uniqueness will not last very long in this market. We

have seen the rise and fall of those companies who operated under the

basic assumption that leasing was a commodity and their offering

consisted only of low price. Where are they now? A firm's ability to

differentiate, is the core of the brand. Discovering what the core

should be can only be accomplished by discovering what your target

market is. Without a differentiator there is little chance for success.

“This is only my opinion, but I think we need to wake up and discover

that our industry is changing and requires us to look at the successful

business practices of other industries and apply them to our own. I

call it the maturation of our industry.”

Andrew Thorn

athorn@thalmanfinancial.com

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Bette “Boom Boom” Kerhoulas

Although I have already offered my congrats to Bette privately, I would like

as a past United Association of Equipment Leasing (then Western Association

of Equipment Lessors) president to offer them publicly as well. with a

comment.

The Association is a good organization and has always tried to

keep at pace, if not ahead of the times. If it failed anywhere, however, it

was in the area of discrimination. Perhaps not intentionally, but then we

know where roads paved with good intentions lead.

I know Betty to be capable of the leadership that's been bestowed on her but although she is the first woman to ascend to the chairs, she is not by any means the first

to have deserved that achievement.

Ginny Young and Ruth Paddock, to name just two women with whom I had served many years on the board were also very dedicated, very experienced people who both paid their dues and showed strong leadership skills.

As with other social evolutions, my guess is that since the Association was founded and reared by "Good ol' boys," (no offense intended) it just needed some pioneers to show that an open thinking to diversity was a necessary step to growth. While there may be acceptable divisions of opinion and agenda within industry there must be a unity of

thinking with regards to industry's best interests, and a division by sex,

race, or religious belief is counter-productive to those interests.

Welcome to the 21st Century, UAEL. As to how well "Boom-Boom" plays (with either a driver or a gavel) has anybody asked Bette if she was offended?

Good luck, Bette.

===

Hal T. Horowitz

Account Executive

Search West

340 North Westlake Blvd., Suite 200

Westlake Village, CA 91336

Phone: 805-496-6811 ext. 231

Fax: 805-496-9431

Cell: 818-730-0645

hal.horowitz@searchwest.com

http://horowitz.searchwest.com

"It is my mission to collaborate with my clients in order to further their

success by identifying professionals of uncommon ability to whom my clients

might not otherwise have access and who will make a valuable contribution to

my clients' goals."

To find superior people

You must first define superior performance.

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Still Alive and Kicking!!!

I appreciate your running my picture, though I take exception to being "from

the past."

I'm still active in the Leasing business, the NAELB, and the

UAEL. I have, however, since that picture was taken at the NAELB conference

in Baltimore, moved Smokey Mountain Funding, Inc. to Hendersonville, NC.,

where the 'peaks meet the clouds.'

Thanks for the memories. Your newsletter is a great service to the leasing

business.

Ted Prichard, CLP

ted@leaseacow.com

Smokey Mountain Funding, Inc.

877-243-5974

(All the pictures are labeled “Pictures from the Past.” I have asked all the leasing

associations to send in old magazines, pictures; and readers, too. If you want

them returned, we can do that. If you want us to pay the UPS fee, we will do

that, too. Editor )

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Global DBM Study Finds Financial Sector Job Seekers' Skills and Success Highly Transferable

DBM, a global human resources consulting firm, today issued a report on the career transition experiences of individuals in the financial services industry.

The DBM study surveyed the experiences of more than 1,600 professionals from 28 countries. The typical respondent was predominantly male (70%), in his early 40s, and had been with his previous employer for 10 years. The vast majority of the study participants (84%) were in transition due to an organizational change such as a workforce reduction, merger or acquisition.

"Individuals in the financial sector have a strong entrepreneurial spirit and a willingness to take risks," said Dale Klamfoth, Regional Vice President, DBM. Mr. Klamfoth specializes in helping organizations in this sector undergoing restructuring, and assisting their employees affected by change and job loss. "Our study shows that one in five people in transition, regardless of their age, chose self-employment over another full-time corporate assignment."

"In addition," Klamfoth added, "individuals 50 and older took considerably longer to return to work than their younger counterparts, and turnover was greatest among sales and marketing professionals."

Research Highlights

Only 49 percent of workers in the financial sector changed industries, compared to 72 percent of people in transition from all industries.

The median time for re-employment in this industry was 3.1 months – about the same as those from all industries. However, among individuals over the age of 50, a five-month transition was more commonplace.

Workers that switched out of financial services found employment in 22 industries, moving in greatest numbers to consulting (6%), food industry (4%), computers/office equipment (4%) and public administration/ government (4%).

While 44 percent of those who changed industries attained the same or a better salary, those that stayed in the financial sector enjoyed the best salary outcomes.

Research Highlights

· Only 49 percent of workers in the financial sector changed industries, compared to 72 percent of people in transition from all industries.

· The median time for re-employment in this industry was 3.1 months – about the same as those from all industries. However, among individuals over the age of 50, a five-month transition was more commonplace.

While 44 percent of those who changed industries attained the same or a better salary, those that stayed in the financial sector enjoyed the best salary outcomes.

Main sources of new jobs were:

Financial Services General Population

(by %) (by %)

Networking 63 60

Search firms 11 10

Newspaper advertisements 7 7

Direct approach 4 3

Internet 2 5

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