Monday AM April 14th, 2008
by: Ed Mayberry, April 14, 2008 12:04:00 pm
Southwest Airlines says its fuel bill will rise more than $500 million. That's nearly the amount of its profit for all of last year. The Dallas-based airline's comment comes in a regulatory filing with the Securities and Exchange Commission. It echoed recent similar forecasts of higher fuel costs from Fort Worth-based American Airlines and Houston-based Continental Airlines and underscored the industry's vulnerability to rising oil prices. Southwest has remained the most consistently profitable U.S. airline by insulating itself from higher fuel prices. It's used hedging transactions that meant it paid less per gallon than its competitors. Southwest spent $2.54 billion on fuel last year, so the forecast of a $500 million increase would push the airline's 2008 fuel bill over $3 billion. The company said it would try to overcome the higher fuel costs by raising more revenue and controlling other costs.
Federal regulators have fined Wal-Mart, Best Buy and other retailers $3.9 million combined. The complaint is for failing to properly label that analog-only televisions will have to be retrofitted after next year's digital TV changeover. The FCC requires retailers to display or affix "consumer Alert'' labels to analog-only TV equipment that say the equipment will not receive signals after the nationwide digital transition--without a special converter box. Best Buy says it is disappointed with the move, saying there was a ''relatively small number of instances.'' All the companies have 30 days to appeal the fines.
An insurance industry spokeswoman says damage from last week's severe storms is expected to top $35 million in the Dallas-Fort Worth area alone. Sandra Helin is with the Dallas-based Southwestern Insurance Information Service. She says the damage estimate is expected to climb significantly as insurance adjusters and homeowners continue to inspect their homes over the weekend. The National Weather Service in Fort Worth says at least two tornadoes and a line of intense thunderstorms were responsible for the pre-dawn damage Friday. One twister near Alvarado in Johnson County destroyed at least three homes. The damage path was three miles long and 50 yard wide. Another twister in the south Dallas suburb of Desoto churned a damage path about 40 yards wide. National Weather Service survey teams say damage in suburbs east of Fort Worth and the Dallas suburb of Plano indicate straight-line winds of 75 to 80 miles per hour. No deaths were reported.
The 41st annual WorldFest Film Festival is underway through April 20th at AMC Studio 30 Dunvale. Six film industry seminars are being held at the Renaissance Hotel. Judges are selecting about 60 feature films and 100 short films in several categories—features, shorts, television commercials and production, documentary, business and industry, new media and music videos. More than 450 independent filmmakers from around the world are participating.
A free Job Fair and Career Event is being held today at Wyndham Greenspoint Hotel, hosted by ADVANCE Newsmagazines. The group hopes to help alleviate the healthcare worker shortage troubling Texas. Attendees can access five hours of free Continuing Education sessions.
A Tyler man has been sentenced to 33 months in federal prison in a wire fraud case linked to oil and gas exploration. Prosecutors say 39-year-old Kenneth William Elgin also must pay $805,000 in restitution. Elgin, during 2004-2005, formed two companies to drill for oil and gas and he solicited investors. The Tyler Morning Telegraph reports Elgin spent the money on expensive meals, vehicles, vacations and at a luxury casino in Las Vegas. Elgin was charged in May 2007 with wire fraud. He pleaded guilty in November. Elgin, who apologized in court, must report to prison by June 9th.
Cadbury Schweppes shareholders voted overwhelmingly to spin off the candy company's North American beverage business. The Plano-based business will be called Dr Pepper Snapple Group, named for its flagship beverage brands. The business will be listed separately on May 7th on the New York Stock Exchange after a 99.75 percent vote in favor of the plan. London-based Cadbury Schweppes shareholders will get shares in DPSG. The remaining company will be known as Cadbury and make such confections as dairy milk chocolate and Trident chewing gum. Cadbury had faced pressure from investors led by U.S. billionaire Nelson Peltz to separate its beverage and candy businesses. Its initial plan to sell the beverage unit was foiled by turmoil in the global credit markets.
Hart Energy consultant and Global Biofuels Center Executive Director Tammy Klein is speaking at the first International Palm Oil Sustainability Conference in Malaysia that concludes on Tuesday. The meeting promotes palm oil production and use, and Klein is delivering a general overview on global biodiesel markets and policy.
Rates on 30-year mortgages are unchanged. Freddie Mac says the average for 30-year fixed-rate mortgages stands at 5.88 percent. Other mortgage rates were also basically unchanged. Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing, remained at 5.42 percent, the same as last week. Rates on one-year adjustable-rate mortgages slipped slightly to 5.18 percent, compared to 5.19 percent last week. The mortgage rates do not include add-on fees known as points. For 30-year and 15-year mortgages, the nationwide average fee was 0.4 point. The average fee was 0.6 point for five-year adjustable-rate mortgages and 0.7 point for one-year arms.
How to respond to the housing crisis. Do you focus on helping homeowners facing foreclosure? Or do you try to take care of businesses impacted by the crisis? Democrats on Capitol Hill find themselves divided between those two basic approaches. The Senate is considering a bipartisan measure which would shower some $25 billion in tax breaks on home builders and banks. Approval could come as early as Saturday. That's also when a key House panel is to consider a rival Democratic plan that instead would steer tax breaks toward first-time home-buyers and investors in low-income rental housing. House Speaker Nancy Pelosi has made little secret of her distaste for the Senate's approach. The White House, meanwhile, is weighing in against the Senate bill. It opposes provisions to fund state and local government purchases of foreclosed homes and a $7,000 tax credit for people who buy foreclosed homes.
A legal challenge to the more than $300 million in state and local economic incentives given to Dell could be at an unsuccessful end. The State Supreme Court said it won't hear a lawsuit brought by a taxpayer advocacy group, the N.C. Institute for Constitutional Law. The group had appealed a ruling of the State Court of Appeals, which sided last fall with Dell and the state and local governments who are providing the incentives. The three-judge court of appeals panel ruled then that the State Supreme Court declared lawful taxpayer-funded incentives more than a decade ago. Dell, based in Round Rock, could receive all of the incentives if it hires enough workers at its plant near Winston-Salem. The plant opened in 2005.
A rugged tract of state-owned land known as the Christmas Mountains is now open to hikers and campers visiting Big Bend National Park. Texas Land Commissioner Jerry Patterson granted an easement that allows public access to the state land via a mile-long boundary with Big Bend. Patterson said that the access is the same that would be allowed if the National Park Service owned the tract. He was alluding to the on-going debate between his office and conservationists over who should control the property. Patterson has previously sought a private bidder for the property and conservationists want it to go to the National Park Service. He has been reluctant to turn the land over to the Park Service in part because federal parks are generally off-limits for hunting. Patterson is a fierce gun-rights activist and wants to allow hunting on the property.
New Mexico State Environment Secretary Ron Curry wants the U.S. Environmental Protection Agency to intervene on what he calls serious deficiencies in the permit process for an El Paso copper smelter. The Aasarco plant is less than a mile from New Mexico's border. It's been closed since 1999, but the Texas Commission on Environmental Quality granted Asarco a five-year air quality permit in February to allow the company to restart the smelter. Curry contends the Texas Commission failed to address serious concerns about the permit. He wants the EPA to use its authority under the Clean Air Act to either revoke the air quality permit or ensure that the Texas Commission considers all state and federal requirements.
Liverpool Football Club Chief Executive Rick Parry says a resignation demand by co-owner Tom Hicks—is "offensive.'' Parry said he's yet to see the letter from the Dallas businessman calling on him to quit and that he only knows of its contents from media reports. Liverpool beat Arsenal 5-3 on aggregate Tuesday to reach the semifinals of the Champions League. It's the latest chapter in a bitter civil war that has engulfed Liverpool in recent months as the partnership between Hicks and co-owner George Gillett Jr., has collapsed. After ten years as Liverpool chief executive, Parry is vowing to fight on. The Reds play at Blackburn on Sunday. Hicks also owns baseball's Texas Rangers and the NHL Dallas Stars.
ExxonMobil gave Chairman and CEO Rex Tillerson an 18 percent raise to $21.7 million. That's according to an analysis of a proxy statement filed with the Securities and Exchange Commission. Irving-based ExxonMobil's $40 billion profit last year again broke the record for a U.S. company. Tillerson has held the top job at the oil giant since 2006. The 56-year-old executive received a salary of $1.8 million dollars and a $3.4 million bonus in 2007. The company boosted Tillerson's salary to $1.9 million on January 1st. The bulk of Tillerson's package was from a stock award ExxonMobil valued at roughly $16.1 million when it was granted November 28th. The Texas native also received $7,774 in above-market returns on deferred compensation and $429,792 in "other compensation.'' that included $229,331 for personal security, $41,122 for personal use of company aircraft and $9,150 for financial planning.