Tuesday AM May 20th, 2008
by: Ed Mayberry, May 20, 2008 12:05:00 am
KPMG holds its annual conference for energy financial executives at the Intercontinental Hotel today and tomorrow. Former Mexican President Vicente Fox will be a keynote speaker. KPMG's Bill Kimble says professionals like to meet with their peers.
"And so we do that a couple ways. Number one, the panelists at the conferences and our breakout sessions are from the leading energy companies. The moderators are usually KPMG partners, but the panelists are from the industry, and so that's why this conference is so well-attended, is everybody gets a chance to go listen to their peers. Then we intentionally make the breaks a little longer than normal because they like to catch up and either meet new people or catch with individuals and other companies, so the structure really has been very successful for us."
Kimble says the energy industry depends on reliable financial forecasting, and the conference will look at forecasting with confidence in an uncertain economic environment.
"It really is, and energy companies as of late have really focused on forecasting. And not just on how reliable they are, but also from, you know, do you tie it to career path to year-end reviews for people, things like that. So we've got a really exciting panel there--three individuals from industry and then Steve Lis, one of our partners that spends a lot of time in this, so I think that's gonna be, have real, real good attendance at it. President Fox, as you are aware, is very keen on America's approach to the region, that we're one region, that we're trading up and down the Americas. We've also asked him to talk a little bit about the energy industry."
The KPMG Global Energy Conference will focus on financial, risk and tax issues.
AAA Texas reports record gas prices could affect travel plans for the Memorial Day holiday weekend. The organization Monday predicted 2.78 million Texans will travel during the holiday period, or about one-half percent lower than 2007 Memorial Day weekend. AAA Texas expects 1.95 million Texas travelers will be driving over the holiday weekend--a one percent drop from 2007. The group expects more than 414,000 people to fly. The organization also reported Monday the average price for self-serve regular gasoline in Texas reached $3.69 per gallon, or 65 cents above one year ago. A survey of AAA travel agents finds the most popular destination for Texas travelers over Memorial Day weekend is expected to be San Antonio.
The worst of the painful housing slump and the credit crunch might come to an end this year. But the economy will weaken further and unemployment will rise. That's the latest outlook from forecasters in a survey by the National Association for Business Economics. A growing number of economists believe the country is on the brink of a recession or in one already, dragged down by all the problems in housing, credit and financial markets. Fifty-six percent of the economists surveyed think the economy has started or will enter a recession this year. That's up from 45 percent in a survey in February. The economists forecasting recession think it will probably be short and shallow.
A new survey suggests that Americans worry that inflation and the rising cost of health care are increasing the risk that they will run out of money in retirement. The survey by the Society of Actuaries found that people already retired were most worried about inflation and affording long-term care. Pre-retirees, meanwhile, ranked affordable health care as their top concern, followed by inflation and long-term care coverage. The study suggests that overall, pre-retirees showed greater worries than those already in retirement. A supervisor of the biennial report says she was surprised that people weren't more worried. She says concerns about health care costs, inflation and nursing home care expenses rose strongly in 2003, after the economy went through a recession and the stock market fell sharply.
Tenaska Capital Management says it has agreed to sell a natural gas storage facility in northeast Mississippi to a Houston-based subsidiary of Spanish power company Iberdrola. Financial terms were not released Monday. The Caledonia gas storage field can store up to 11.7 billion cubic feet of working natural gas, but it may be expanded to hold as much as 16.9 billion cubic feet if federal regulators approve. Omaha-based Tenaska says the natural gas storage facility was owned by its Tenaska power fund investment subsidiary and some of the original sponsors of the Caledonia Project. Enstor is the Iberdrola subsidiary buying the gas storage facility, which is fully subscribed for storage through March 2010.
The Supreme Court has voted to uphold state tax exemptions for municipal bonds. In a 7-2 ruling in a case from Kentucky, the justices permitted states to exempt interest on their own bonds from taxation while taxing residents for interest on bonds issued by other states. In the more than $2 trillion municipal bond market, 42 states exempt some or all interest on their bonds from income taxes, while taxing interest on bonds from other states. The states have said that throwing out the system of exemptions that began 90 years ago would have a devastating impact on their finances. Industry groups warned of possible turmoil in the municipal bond market if the existing setup were dismantled. In the majority opinion, Justice David Souter said that the state tax exemptions go back to 1919 and have not hindered commerce among the states.
Vought Aircraft Industries announced it will make wings and other parts for some Cessna business jets. The contract could be worth more than $1 billion for Dallas-based Vought. Vought says the deal covers design and production work for parts that will go on the Model 850 Cessna Citation Columbus jet. The company said most of the engineering and tool-design work will be done in Dallas and production work will be handled in Nashville, Tennessee. The general manager of the Nashville plant said it was the facility's first new full-wing contract in 20 years. Deliveries of final parts is scheduled to start in 2011. The Citation Columbus is designed to carry up to ten passengers with a long range. Cessna is a division of Textron.
Lowe's, the nation's second biggest home improvement chain, reports a nearly 18 percent drop in first quarter profit. It's also lowering the outlook for the full year, with softer sales resulting from the weak housing market. Lowe's says it earned $607 million. Lowe's and bigger rival Home Depot, which is expected to post first-quarter numbers Tuesday morning, have seen profits slide over the past year as the slump in housing continues.