Leasing News

The Federal Reserve left a key interest rate unchanged at a 40-year low Tuesday, but signaled that it stands ready to cut short-term rates if economic conditions worsen.

By keeping rates low or possibly nudging them down later, federal policymakers could expect consumers to be motivated to spend more and businesses to step up investment. Such a combination of circumstances would boost the recovery, which has lost momentum from the beginning of the year.

The Fed's decision comes amid economic uncertainties, a roller-coaster stock market and anxiety among Americans about the economy's direction.

A softening in consumer and business demand that emerged this spring "has been prolonged in large measure by weakness in financial markets and heightened uncertainty related to problems in corporate reporting and governance," the Fed said.

For now, Federal Reserve Chairman Alan Greenspan and his Federal Open Market Committee colleagues opted to hold the federal funds rate — the interest that banks charge each other on overnight loans — at 1.75 percent, the lowest level in four decades. It marked the fifth consecutive Fed meeting this year that policy-makers opted to leave rates alone.

However, the Fed changed the wording of its announcement Tuesday, saying that the greatest risk looking ahead is a further slowing of the economy, raising the odds of later rate cuts.

"The risks are weighted mainly toward conditions that may generate economic weakness," the Fed said.

Since its March meeting, the central bank’s announcement indicated that economic risks were equally balanced between inflation and possible weak growth, a "neutral" policy stance.

The Fed's decision to hold the funds rate steady means that commercial banks' prime lending rate — a benchmark for many consumer and business loans — will remain at 4.75 percent, the lowest level since November 1965.

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Retail sales up 1.2 percent in July, with more car sales; cutbacks reported elsewhere

By Jeannine Aversa, Associated Press

WASHINGTON (AP) Consumers, taking advantage of free-financing offers, snapped up cars and trucks, helping to boost retail sales by a brisk 1.2 percent in July.

But the Commerce Department's report Tuesday also showed that shoppers trimmed spending on other goods, including furniture, electronics, building supplies and clothes, a sign that consumers have grown more cautious amid stock market turmoil and economic uncertainties.

Excluding sales of automobiles, retail sales rose just 0.2 percent in July.

Still, the fact that consumers were still buying offered a dose of good news for the struggling economic recovery. Consumer spending accounts for two-thirds of all economic activity in the United States.

''In the midst of all the problems in the markets, people are still willing to part with their hard-earned cash,'' said economist Joel Naroff of Naroff Economic Advisors.

Economists worry that a wave of accounting scandals that has shaken Americans' confidence in corporate leaders, the roller-coaster stock market and a sluggish job market could chill consumers' willingness to spend in the months ahead, something that would slow economic growth.

The recovery has lost considerable momentum from the beginning of the year. The economy grew by just 1.1 percent in the spring, down from a brisk 5 percent pace in the first quarter.

Some economists are predicting lackluster growth for the second half of this year as well.

Treasury Secretary Paul O'Neill, participating in President Bush's economic forum Tuesday in Texas, called on Congress to pass the president's economic agenda, including terrorism insurance, to quicken the recovery.

''To a lot of folks out there, it doesn't feel like a recovery yet,'' O'Neill said. ''I think we're moving in the right direction. But we're not where we want to be not yet.''

The 1.2 percent increase in retail sales in July followed a revised 1.4 percent advance in June, stronger than the government previously reported.

Worried about sales, some big auto makers recently brought back generous incentives, including free-financing deals, to lure buyers. Sales at automobile dealers rose by 4.2 percent in both June and July.

While welcoming the gains, economist Ken Mayland, president of ClearView Economics, reminded: ''Just remember, dealer auto sales are artificially and unsustainably high as consumers take great advantage of generous auto sales incentives,'' he said. ''When the incentives are pulled or wear thin, auto sales will gap lower, pulling down the total.''

Another factor contributing to higher retail sales in July was a 2.7 percent increase in sales at gasoline stations. That followed a 0.1 percent dip in June.

Shoppers also spent more at health and beauty stores, pushing sales up by 1.1 percent in July, after a 0.3 percent advance. And sales at bars and restaurants rose 1 percent last month, on top of a 0.7 percent gain in June.

At department stores and other general merchandise outlets, sales edged up 0.3 percent, down from a 1.1 percent rise in June.

Shoppers were more selective when it came to buying other goods.

Sales at furniture and home furnishing stores dropped 1.4 percent in July, the biggest decline since September. In June, such sales decreased by 1.1 percent.

At electronics and appliances stores, sales fell 1 percent, the worst showing since January, and nearly erasing all of the 1.1 percent increase reported in June.

Sales of building materials and garden supplies declined by 1.2 percent in July, the largest drop since December. That followed a 0.6 percent increase in June.

At clothing and other accessory stores, sales fell by 1.3 percent in July, down from a 2.5 percent advance the month before.

On the Net:

Retail sales: http://www.commerce.gov/

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California Franchise Tax Board---Correction

Bette (Kerhouas) says the tax board is now determining that all discounting to a
funding source is a sale if "title is passed." In many master documents,
the funder takes title. The Franchise Tax Board is ruling that all these
transaction are subject to tax, and are going back three years with a
penalty of ten percent per year on the taxes not paid.

In addition, Bette says the tax board is claiming that because "document
fees" were included, they were part of the sale and there is sales/use tax
on this charge, going back ten years with a 10% penalty fee for each year
the alleged tax is not paid.

(CORRECTION:

Sales tax on document fee, going back three years, not ten years )

***( bettek@pacifica-capital.com)

Pacifica-Capital

8105 Irvine Center Drive, Suite 500, Irvine, California 92618 ·

Phone 949.727.3711 · Toll Free 800.800.8081 · Main Fax 949.727.3722

· Sales Fax 949.727.1242

(Bette is on vacation in Hawaii with her tennis star husband. She is the incoming president for e United Association of Equipment Leasing. For more on her background, go here: http://www.pacifica-capital.com/staff/bette.html)

I will be out of the Office from:

Thursday August 1st, 2002 -through- Friday August 16th, 2002.

I will return to the office on Monday August 19th, 2002.

While I am out of the office, please contact:

Amy Nicholas, VP Operations Ext. 231 e-mail: amyn@pacifica-capital.com

Jaime Kaneshina,VP Credit Ext. 226 e-mail: jaimek@pacifica-capital.com

Heather Wright, VP Documentation Ext. 229 email: heatherw@pacifica-capital.com

If you still need further and/or immediate assistance, please call our office,

press "0" for the Operator, and she will find someone to help you...

(Fax: 949-727-3722)

Thank you,

Bette Kerhoulas (ext. 225)

Managing Director

Pacifica Capital

949-727-3711, 800-800-8081

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“...every lessor in this state is looking at potential large liabilities.”

Russ Wilder, CLP, San Francisco

To me, the term "discounting" of a lease has always meant that title to the

equipment was retained by the selling lessor. All they did was sell the

right to collect a stream of payments. The real problem I have found is

that far too many people in our industry throw around the term, "selling" a

lease too loosely. There is a clear difference between selling all of a

lessor's right, title and interest in a lease's payment stream and the

underlying equipment (what I call a sale of the lease and equipment) vs.

selling the rights to a lease payable stream (a discounting).

Having been on the buying and selling end of the business of discounting and

selling hundreds of leases over the past couple of decades (including a few

from you), most of the time the selling lessor retained the rights to any

purchase options, etc. and title to the underlying equipment stayed with

them, i.e., title to the equipment did not pass. The buyer usually just got

a security interest in the lease stream, the lease itself, the underlying

equipment and all proceeds thereof. Whenever I have been involved in

purchasing or discounting of leases, be it on a one off basis or portfolios

containing hundreds of leases, I have made sure that the

Buy/Sell/Discounting agreements clearly state whether or not title to the

equipment is being passed so that the firms I have worked for do not get

caught in the potential tax trap Bette describes.

Lessors contemplating discounting or selling leases should carefully read

the agreements between themselves and their funders on this point (as well

as others) and if necessary get clarifying language inserted that shows what

the true intent of the parties was regarding whether title to the equipment

is being passed or not. If the Franchise Tax Board is going to start

claiming that a sale of payment rights alone is a sales taxable event every

lessor in this state is looking at potential large liabilities.

Russell H. Wilder, CLP

Russell Wilder <RWilder@ATEL.com>

Vice President, Chief Credit Officer

ATEL Capital Group

( And perhaps other states, as these governmental agencies share all their

information when it comes to raises more “taxes.” Yes, the financial cost to Bette’s company will be large, not just in “back taxes” but penalties.

Yes, this could be some serious large liabilities here. She stated the assignments

to Colonial Pacific Leasing did not have the clause, but others she was dealing

with, the Franchise Tax Board treated as a “separate sale” as title was passed.

As I understand it from Bette, the key is how the “master agreement” is made, meaning who had title to the equipment. It is not “recourse” or “non-recourse” or “reps-warrants liabilities”. I also do not know if this applies to warehousing, meaning the lessor pays for the equipment and then at a later time assigns the lease. I also do not understand how this applies to “discounting” a lease and whether the lessee or funder pays the vendor. I would also think that even in discounting, the payment may be on the discounters check, but paid with the funder funds. However, it appears the California Franchise Tax Board has their own viewpoint, including that “document fees” are part of the lease and therefore also subject to sales/use tax!!! editor )

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Possible Microsoft flaw may give access to private information

By Helen Jung, Associated Press

SEATTLE (AP) Microsoft Corp. is investigating claims that its popular Internet Explorer software has a loophole that lets attackers pose as legitimate Web site operators, potentially giving them access to computer users' names, passwords and credit card numbers.

Although Microsoft said it's too soon to judge the severity of the problem and even whether the flaw exists some programmers and consultants said it could threaten the security of everything from online banking to Web-based commerce.

The problem is ''fairly serious,'' said Elias Levy, a member of software security company Symantec Corp.'s security response team. He said that the complexity involved makes the probability of widespread attacks unlikely.

Attackers taking advantage of the loophole could trick computer users into thinking they are visiting legitimate Web sites, and could convince them to divulge personal information.

Mike Benham, a San Francisco programmer who discovered the problem, posted his findings Aug. 5 on a popular security-alert Web site.

Benham said Internet Explorer versions 5.0, 5.5 and 6.0 have loopholes in handling Web sites' digital certificates, such as those from VeriSign, which verify Web sites as being legitimate and also include unique code for encrypting information.

Essentially, any Web site operator with a valid certificate could pretend to be any other Web site operator.

Theoretically, he said, attackers could successfully hijack computer users such as over a company's internal network as they went to banking or e-commerce Web sites and intercept their information. Or they could send hijacked users to dummy Web sites and get them to give personal information.

Other Web browsers, such as Netscape and Mozilla aren't vulnerable, Benham said.

Microsoft is still investigating and is unsure even whether to call it a vulnerability, said Scott Culp, manager of Microsoft's Security Response Center.

The possible flaw comes as Microsoft has launched a high-profile effort, called its Trustworthy Computing initiative, to resolve security concerns. But problems remain. The company has issued 41 security bulletins with patches so far this year.

Microsoft criticized Benham for not contacting Microsoft first when he discovered the problem, and instead posting it on the Internet. Benham said he did not directly notify Microsoft because he was frustrated by the company's response to other security researchers in the past.

Microsoft maintains it is difficult to wage an attack as Benham outlined, although Levy and another security expert, Bruce Schneier at Counterpane Internet Security, said it is possible.

''Investigating a security vulnerability sometimes takes a little bit longer than people may expect, because it's important that we be absolutely right about the answer we provide,'' Culp said. He added that Microsoft has not contacted Benham because they had sufficient information and doubted whether he was committed to helping solve the problem.

E-commerce companies have since contacted Microsoft about their concerns, Culp said.

VeriSign, one of the biggest providers of digital certificates, said it learned of the problem on Friday and contacted Microsoft, said Ben Golub, senior vice president of trust and payment services.

He said the two companies are working together to resolve the problem and that they don't know of any real cases yet where someone has successfully spoofed a Web site or gained information.

On the Net:

http://www.microsoft.com

http://www.securityfocus.com/

Intel's Grove urges politicians to not hobble high tech

By Mark Boslet, Associated Press

PALO ALTO, Calif. (Dow Jones/AP) The broad economic downturn in U.S. has turned what might have been the greatest creation of wealth in history into what may be the ''greatest destruction of wealth,'' Intel Corp. Chairman Andrew Grove said.

Speaking at a gathering of the New Democrat Network, Grove said the country's ''confidence in business has been damaged and arguably lost'' from the fallout of the dot-com boom and a wave of corporate scandals.

Networks were over built during the boom as enthusiasm ran high and ''we got ahead of ourselves,'' Grove said Monday. The present environment has gone to the opposite extreme where no investment looks good, Grove said.

Grove called on politicians to pay more attention to developing a comprehensive strategy for relations with China and its growing economy. He also urged government not to constrain the development of Internet applications, such as the online distribution of music.

''Hobbling the development of applications hobbles the growth of the (technology) industry,'' Grove said. Applications drive the infrastructure, which in turn spurs the economy, he said. This was the case with PCs during the past decade, when the use of spreadsheets and word processing software sparked computer sales and economic growth.

Ford settles claims on lease late-payment charges

By Associated Press

DEARBORN, Mich. (AP) Ford Motor Co. said Monday that it has tentatively settled a class-action lawsuit by lease customers who said they were charged excessive penalties for making late payments.

Ford agreed to pay as much as $80 million to 1.8 million lease customers and about $7 million in legal fees, the company said in a filing with the Securities and Exchange Commission.

''We are adequately reserved. We will take no hit on the bottom line over this,'' Ford spokeswoman Melinda Wilson said Monday.

She said Ford still believed that there was nothing excessive about its late fees, which were 7.5 percent of the monthly lease payment or $50, whichever was less.

The case grew out of a suit filed in California in the mid-1990s and a second case filed later in Maryland.

The settlement is on a claims-made basis, meaning that only those who put in a claim for compensation will get it. Wilson said letters went out last month to those affected.

A hearing for final approval of the settlement is scheduled for Sept. 20, Ford said.

On the Net:

Ford Motor Co., http://www.ford.com

"CIT: Stronger Now Than Pre-Tyco"

Asset Securitization Report

The CIT Group has increased its ABS output, but CFO Joe Leone

says that CIT does not consider itself a securitization company

and adds that the firm will return to normal issuance levels now

that its IPO is finished. CIT issued $2.4 billion of ABS paper

during the first half of 2001 and $5.4 billion in the first half

of 2002, an increase that helped improve its capitalization

ratios prior to its separation from Tyco. The increased

securitization contributed $57 million to CIT's bottom line

during 2002's second quarter. GimmeCredit analyst Kathy Shanley

says that CIT intends to tap the commercial paper market for up

to $5 billion soon, which should help the company reduce

securitization, but she is uncertain about the quality of some of

CIT's assets. CIT was doing well in the 1990s until it acquired

Newcourt Capital, which doubled its size and exposed it to the

retail financing market, and Tyco bailed it out. CIBC World

Markets executive director Jennifer Scutti predicts that CIT may

take market share from smaller competitors, aided by lower

funding costs and its restructuring. CIT senior vice president

Frank Garcia predicts that CIT will make three to four equipment

lease deals per year and that interest in its equipment lease

paper will remain strong.

http://www.absnet.net

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Comdisco Emerges From Chapter 11; Plan of Reorganization Becomes Effective; Reorganized Company To Be Called Comdisco Holding Company, Inc.

ROSEMONT, Ill.----Comdisco announced today that its First Amended Plan of Reorganization became effective on August 12, 2002 and that the company has emerged from Chapter 11. The newly emerged company will be called Comdisco Holding Company, Inc. As previously announced, Ronald C. Mishler, 41, will serve as chairman and chief executive officer of the new company. The appointment of the new members of the Board of Directors is also effective immediately.

As previously announced, Comdisco's amended Plan was approved by the United States Bankruptcy Court for the Northern District of Illinois on July 30, 2002 after having received the affirmative vote of more than 98 percent of the creditors and shareholders who voted on the Plan. Both Comdisco's Official Committee of Unsecured Creditors and Equity Committee also supported confirmation of the Plan.

The Plan provides for an up to three-year orderly runoff or sale of the company's remaining assets. The distribution of the net proceeds realized from such runoff or sale, and the cash accumulated to date, is anticipated to result in an approximately 90 percent recovery to creditors. Comdisco expects to make an initial distribution to its stakeholders prior to the close of its current fiscal year, which ends on September 30, 2002. Thereafter, distributions are expected to be made on a quarterly basis or more frequently, if appropriate. Former common stockholders will share in the net proceeds realized, beginning at 3 percent of the remaining net proceeds once creditors reach 85 percent recovery, and scaling up to a 37 percent recovery of any remaining net proceeds once the creditors realize 100 percent on their claims.

The company anticipates that its new common stock will trade on the NASDAQ OTC under the symbol CDCOV.

About Comdisco

The purpose of reorganized Comdisco is to sell, collect or otherwise reduce to money the remaining assets of the corporation in an orderly manner. Rosemont, IL-based Comdisco (www.comdisco.com) provided equipment leasing and technology services to help its customers maximize technology functionality and predictability, while freeing them from the complexity of managing their technology. Through its Ventures division, Comdisco provided equipment leasing and other financing and services to venture capital backed companies.

CONTACT:

Comdisco, Inc.

Mary Moster, 847/518-5147

mcmoster@comdisco.com

Kekst and Company

Fred Spar or Jeremy Fielding, 212/521-4800

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Willis Lease Finance Reports Second Quarter Profits

SAUSALITO, Calif.----Willis Lease Finance Corporation (Nasdaq:WLFC), a leading lessor of commercial jet engines, today reported profits for the second quarter and first half of 2002. Pre-tax earnings before gain (or loss) on sale transactions were $1.1 million in the second quarter of 2002 compared to $775,000 in the first quarter of 2002. Net income was $577,000, or $0.07 per diluted share, during the second quarter of 2002, and $1.5 million, or $0.17 per diluted share, for the first half of 2002. The company earned $2.4 million, or $0.27 per diluted share, in the second quarter of 2001, and $4.7 million, or $0.53 per diluted share, in the first half of 2001.

Current Market

"We generated good profits in the second quarter and the first half of 2002, which is noteworthy given the challenging market conditions prevalent since late last year," said Charles F. Willis, President and CEO. "Improvement in our future performance is likely to be driven largely by lease revenue. With our portfolio utilization rate hovering in the low 80% range, as it has for the last two quarters, lease revenue has been flat quarter-to-quarter. If the utilization rate improves, lease revenue will improve as well. While the utilization rate experienced a small drop from 81% at March 31, 2002 to 80% at June 30, 2002, by July 31, 2002 it had moved up to 83%. We believe it should gradually improve as the year goes on, but it's probably not going to be a straight line. There may be ups and downs along the way," said Willis.

"Remarketing of equipment off-lease or scheduled to come off-lease continues to be our top priority. Overall remarketing activity has noticeably increased since the end of April. During the month of July we closed more new leases and lease extensions than any previous month this year, which pushed the utilization rate up to 83%, which was the highest for any month this year.

"As the year goes on we are seeing more signs that stability is returning to our marketplace," commented Donald A. Nunemaker, Chief Operating Officer. "Pricing pressures that had adversely affected lease rates for certain engine types late last year and earlier this year appear to be abating as customer demand for these engine types increases. In addition, while the majority of requests for new engine leases continue to be for terms of less than 12 months, over the last 90 days we have seen a growing number of inquiries for leases with longer terms. We view that as a positive development. We believe it indicates that decision-makers have become more confident about entering into longer term commitments."

During the second quarter of 2002, WLFC spent $23.4 million on additions to its lease portfolio, compared to $3.3 million in the first quarter of 2002. "We consummated several transactions, primarily purchase/leaseback deals, to add to our lease portfolio in the second quarter. These transactions provide solid, long-term contracts that help us build our recurring revenues and expand relationships with new and existing customers. We sold only one engine in the second quarter and generated a $152,000 loss on sale compared to gains totaling $735,000 on the sale of two engines in the first quarter of 2002," Willis commented.

Results from Continuing Operations

Lease revenue in the second quarter of 2002 totaled $13.6 million, even with the first quarter of this year and down 13% from the second quarter of 2001. Year-to-date lease revenue was down 10% to $27.2 million, from $30.1 million in the first half a year ago. The reduction in lease revenue is primarily a reflection of the drop in utilization stemming from the general economic and industry-wide slowdown that began last year.

Total expenses in the second quarter of 2002 declined $1.9 million or 13% to $12.5 million, from $14.4 million in the second quarter of 2001, and offset a large portion of the $2.0 million drop in revenue over the same period. The decline in expenses was attributable to a $1.7 million drop in net interest and finance costs, and a $578,000 decline in G&A expense, offset by a $378,000 increase in depreciation expense.

Mainly due to expansion of the lease portfolio, depreciation expense increased 9% to $4.8 million in the second quarter of 2002, compared to $4.4 million in the second quarter a year ago. In the first six months of 2002, depreciation expense increased 18% to $9.5 million, compared to $8.1 million in the like period of 2001. G&A expense dropped 16% to $3.1 million, compared to $3.7 million in both the first quarter of 2002 and the second quarter a year ago, due principally to decreases in staffing expenses. Year-to-date, G&A expense declined 1% to $6.8 million, from $6.9 million in the first six months of 2001.

Net interest and finance costs during the second quarter of 2002 continued to reflect the benefit of lower interest rates, which more than offset the increase in debt caused by the growth of the lease portfolio during the year. Second quarter 2002 net interest and finance costs decreased 26% to $4.6 million, compared to $6.3 million in the second quarter a year ago. For the first six months of the year, net finance costs were down 27% to $9.1 million, from $12.4 million in the first six months of 2001.

Second quarter earnings before gains and taxes were $1.1 million, compared to $775,000 in the first quarter of 2002 and $1.2 million in the second quarter of 2001. Year-to-date, earnings before gains and taxes totaled $1.8 million, compared to $2.8 million in the first half of 2001. The company posted a small second quarter loss on sale of equipment of $152,000, and a gain of $583,000 in the first half of 2002. In the year ago periods, the company generated gains on sale of $3.6 million in the second quarter and $6.2 million in the first half.

Second quarter pre-tax earnings from continuing operations totaled $901,000, down $4.0 million compared to $4.9 million in the second quarter a year ago. Of the $4.0 million decline, $3.8 million was attributable to lower gain on sale of engines in the second quarter of this year compared to the same period in 2001. Likewise, in the first half of 2002, pre-tax earnings from continuing operations was $2.4 million, compared to $9.0 million in the first half of 2001, with $5.6 million of the difference attributable to lower gains on sales of engines. For the second quarter of 2002, net income totaled $577,000, or $0.07 per diluted share, compared to $2.4 million, or $0.27 per diluted share, including a loss from discontinued operations of $606,000, or $0.06 per diluted share, for the second quarter of 2001. For the first six months of 2002, net income was $1.5 million, or $0.17 per diluted share, compared to $4.7 million, or $0.53 per diluted share, including a loss from discontinued operations of $785,000, or $0.08 per diluted share for the first half of 2001.

Balance Sheet & Liquidity

At June 30, 2002, WLFC had 117 commercial jet engines, 4 aircraft parts packages and 6 aircraft in its lease portfolio from continuing operations with a net book value of $500.9 million. The lease portfolio increased 5.8% in net book value, from $473.3 million at June 30, 2001, when it consisted of 111 commercial jet engines, 4 aircraft parts packages and 6 aircraft.

Assets totaled $553.2 million at June 30, 2002, compared to $520.4 million at June 30, 2001. Stockholders' equity increased 4% to $103.6 million, or $11.73 per common share outstanding, at June 30, 2002, compared to $99.6 million, or $11.31 per common share outstanding, a year ago.

At June 30, 2002 and December 31, 2001, WLFC had revolving credit facilities totaling $350.0 million, increased from $305.0 million at June 30, 2001. At June 30, 2002, approximately $30.6 million was un-drawn under these facilities. The Company's funded debt to equity was 3.49 to 1 at June 30, 2002, compared to 3.54 to 1 at December 31, 2001 and 3.49 to 1 at June 30, 2001. The Company had $40.3 million of restricted and unrestricted cash and cash equivalents at June 30, 2002, compared to $24.8 million at December 31, 2001 and $34.2 million at June 30, 2001.

About Willis Lease Finance

Willis Lease Finance Corporation leases spare commercial aircraft engines, rotable parts and aircraft to commercial airlines, aircraft engine manufacturers and overhaul/repair facilities. These leasing activities are integrated with the purchase and resale of used and refurbished commercial aircraft engines.

CONTACT:

Willis Lease Finance Corporation

Donald A. Nunemaker, 415/331-5281

SOURCE: Willis Lease Finance Corporation

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XTRA Lease Selects Pivotal for Sales and Marketing

VANCOUVER, British Columbia--

XTRA Lease Selects Pivotal to Improve Sales and Marketing

Effectiveness and Enhance Customer Service

Pivotal Corporation (Nasdaq:PVTL) (TSX:PVT), the leading provider of sensible customer relationship management (CRM) software for mid-sized enterprises, today announced that XTRA Lease, a division of XTRA Corporation, and one of the largest trailer leasing companies in North America, has selected Pivotal to enhance customer service by personalizing sales and marketing activities. XTRA Lease will use Pivotal to set a new standard of personalized customer service in the transportation industry.

"Building personalized relationships with our customers has always been at the heart of our business - we've selected Pivotal because it is the most flexible and cost-effective way for us to achieve a new level of customer service across our organization," said Kathy O'Leary, vice president of marketing, XTRA Lease. "In order to retain and gain new customers, we must be able to track their leasing behavior, predict their needs and immediately respond to last minute requests. Pivotal helps us get the right trailer to the right person at the right time."

Serving customers across North America, XTRA Lease provides a fleet of 90,000 dry and temperature-controlled vans, chassis, flatbeds and storage vans to meet the broad transportation needs of its customers. With more than six hundred professionals across ninety branch locations, customers are guaranteed service when and where they need it. The company is 100 percent committed to localized customer service - its focus is on each individual customer, at each branch location.

According to Kathy O'Leary, "In our forty year history, we have evolved this company significantly and are constantly changing to adapt to new market conditions and trends. Now, our goal is to further our history of customer service excellence by using technology to personalize sales, marketing and service for each of our unique customers."

Personalizing the Sales Experience

XTRA Lease will use Pivotal to improve sales effectiveness, revenue forecasting and communication consistency by building comprehensive customer profiles that allow the company to gain insight into each customer's specific leasing needs and preferences. Sales professionals will have immediate access to customer information including, type of lease (short-term, or long-term), reason for lease (peak season, extra inventory, or emergency), trailer preferences, and product/goods specialization. Leveraging this critical customer information, sales professionals will be empowered to conduct highly personalized interactions with each customer -- and meet their need with speed and intelligence. Pivotal also empowers sales professionals and managers with the tools to accurately manage pipelines and automatically generate quotes and proposals.

Target Marketing - Driving the Bottom Line

XTRA Lease will also leverage Pivotal's marketing capabilities, which include customer segmentation, campaign management, collaborative marketing action plans, campaign execution and lead tracking. Using Pivotal Marketing, XTRA Lease will maximize profitability by creating personalized marketing campaigns designed to improve customer acquisition, increase customer retention and capture up-selling and cross-selling opportunities.

XTRA Lease will leverage Pivotal's marketing analytic capabilities to better understand customer needs, preferences and behavior. By cost-effectively profiling and segmenting its customer base by type, cargo and location, XTRA Lease will create highly targeted marketing campaigns to more efficiently serve customers and analyze the success of each marketing initiative. For example, the company will now have the ability to design campaigns specifically targeted to three customer types: rental customers -- those requiring extra trailers during peak seasons, or for emergency loads; long-term leasers - those needing to spend capital on something other than trailers; and trial leasers - those interested in evaluating new transportation technology before making an expensive purchase. By interacting with customers in ways that reflect a complete understanding of their needs and preferences, XTRA Lease will improve revenues, margins and customer loyalty.

According to Bo Manning, president and CEO, Pivotal, "XTRA Lease is one of the largest trailer leasing companies in North America because it offers world-class customer service - a key competitive differentiator. To further its mission of customer excellence, XTRA Lease has selected Pivotal to cost-effectively personalize the sales and marketing experience. Pivotal is helping companies like XTRA Lease realize significant business results by improving and enhancing the customer experience."

About Pivotal Corporation

Pivotal Corporation is the only CRM company that is 100 percent purpose-built to serve the unique requirements of mid-sized enterprises. Pivotal delivers software and services designed to produce meaningful increases in revenues, margins and customer loyalty for companies and business units in the revenue range of $100 million to $3 billion. More than 1,500 companies around the world use Pivotal including: CIBC, Centex Homes, HarperCollins Publishers, Hitachi Telecom Inc., Premera Blue Cross, Royal Bank of Canada, Southern Company, and Vivendi.

Pivotal's complete CRM software suite includes capabilities in marketing, sales, service, contact centers, partner management and interactive selling. For more information, visit www.pivotal.com.

CONTACT:

Pivotal Corporation

Jacqueline Voci, 425/897-6992

Email: jvoci@pivotal.com

Website: www.pivotal.com

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Advanta Increases Stock Repurchase Program

SPRING HOUSE, Pa.----Advanta Corporation (NASDAQ:ADVNB; ADVNA) announced today that its Board of Directors has authorized an increase of up to an additional 1.5 million shares of the Company's common stock under its previously announced repurchase plan, bringing the total remaining unused authorization to approximately 1.8 million shares.

Repurchases under the authorization will be made from time to time at the discretion of the Company through open market purchases or privately negotiated transactions in accordance with the rules of the Securities and Exchange Commission. Shares purchased will be retired and available for later reissue in connection with potential future stock dividends, employee benefit plans and other general corporate purposes.

Advanta is a highly focused financial services company serving the small business market. Advanta leverages direct marketing and information based expertise to identify potential customers and new target markets and to provide a high level of service tailored to the unique needs of small business. Using these distinctive capabilities, Advanta has become one of the nation's largest issuers of MasterCard business credit cards to small businesses. Since 1951, Advanta has pioneered many of the marketing techniques common in the financial services industry today, including remote lending, direct mail, and affinity and relationship marketing. Learn more about Advanta at www.advanta.com.

CONTACT:

Advanta Corporation

David Weinstock, Vice President, Investor Relations

(215) 444-5335

dweinstock@advanta.com

Catherine Reid, Vice President, Communications

(215) 444-5073

creid@advanta.com

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Report says states losing millions in taxes as more people buy cigarettes online

By Steve LeBlanc

Associated Press Writer

BOSTON –– States are losing millions in tax dollars as more people buy cigarettes from online vendors who routinely ignore a federal law requiring them to report sales to local regulators, a new report says.

The trend could undercut efforts by cash- strapped states to raise revenues by hiking cigarette taxes. In Massachusetts lawmakers recently approved a 75-cent hike on a pack of cigarettes, a move officials hope will bring in an extra $190 million annually. In Illinois, the state boosted cigarette taxes by 40 cents to a total of 98 cents a pack.

New Jersey and New York state both have a $1.50 per pack tax, the nation's highest. Washington state is third, at $1.425.

Federal law requires Internet cigarette sellers to provide state revenue officials with names and addresses of their customers. The officials can then pursue the buyers to make sure they pay local sales taxes.

But Internet cigarette vendors openly flout the law, known as the Jenkins Act, according to a report by the U.S. General Accounting Office to be released Tuesday.

"Our Internet search efforts identified 147 Web site addresses for Internet cigarette vendors based in the United States. None of the Web sites posted information that indicated the vendors complied with the Jenkins Act," the report said.

In fact, according to the report, 78 percent of the sites indicated that the vendors do not comply with the law.

The report recommends shifting primary enforcement of the law from the Federal Bureau of Investigations to the Bureau of Alcohol, Tobacco and Firearms, in part because of the FBI's heightened focus on terrorism.

Calls to several Internet cigarette vendors advertising "tax free cigarettes" were not returned to The Associated Press on Monday. One Web site told buyers "We do not report to tax authorities in ANY state. 100% confidential."

The cost to states can run into the millions, according to the report.

Officials in California estimated a tax loss of approximately $13 million from May, 1999 through September, 2001 because of the failure of Internet cigarette vendors to comply with the federal law.

By 2005, Internet tobacco sales in the United States could exceed $5 billion and states could lose about $1.4 billion in revenues, according to the report.

U.S. Rep. Martin Meehan, D-Mass., requested the report, which he said reveals a burgeoning market of online cigarette sales.

The lack of oversight lets children illegally purchase cigarettes online, said Meehan, who plans to file a bill requiring Internet cigarette shops to verify the age, address and identity of purchasers before shipping tobacco products.

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News Briefs----

American Airlines to cut 7,000 jobs, retire 74 planes

DALLAS (AP) Seeking to stem 18 months of heavy losses, American Airlines said Tuesday it would cut 7,000 jobs and trim more flights to as it tries to slim down and compete better with low-cost carriers.

Amtrak suspends most Acela Express service for repairs and inspections

WASHINGTON (AP) Amtrak's summer of discontent continued Tuesday, when the railroad suspended most of its high-speed Acela Express service so it could inspect the trains for cracks in shock absorbers beneath their locomotive cars.

merican Airlines says it will cut 7,000 jobs by March 2003, reduce capacity, retire 74 planes

FORT WORTH, Texas (AP) American Airlines announced a massive restructuring Tuesday that will cut the size of its work force by 6 percent in an effort to make the world's biggest carrier competitive with lower-cost rivals.

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United stock slides again after American Airlines moves, downgrade

CHICAGO (AP) United Airlines' stock plunged another 23.7 percent to a 20-year low Tuesday, pressured by rival American Airlines' newly announced overhaul and a rare ``sell'' order by a top Wall Street analyst.

Five former Enron executives who reaped millions seek extra pay

NEW YORK (AP) Among a group of laid-off Enron workers who are asking a bankruptcy court for extra pay are five insiders who reaped $7 million in the year before the company's collapse. They include the wife of former chief executive Jeffrey Skilling.

Bush assures summit participants administration has economy under control

WACO, Texas (AP) President Bush assured Americans Tuesday that his administration has a steady hand on the economy after hearing blue-collar workers and blue-chip CEOs alike voice concern about slower growth and market volatility

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Deere more than doubles third-quarter earnings

MOLINE, Ill. (AP) Increased overseas sales of its trademark agricultural equipment helped Deere & Co. more than double third-quarter earnings, easily eclipsing Wall Street expectations.

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Charles Schwab announces plans for more major layoffs

SAN FRANCISCO (AP) Spying more rocky times ahead, stock broker Charles Schwab Corp. is backpedaling almost as rapidly as it once charged ahead.

Baseball players back off setting strike date, expressing optimism about agreement

CHICAGO (AP) For now, baseball players are holding back on setting a strike day.

Mystery virus sideswipes Andruzzi

By Nick Cafardo, Boston Globe Staff

SMITHFIELD, R.I. - Joe Andruzzi is one of those lunch-pail guys who gives you an honest day's work and fights and claws for everything he gets. Nothing has ever been handed to the rugged 6-foot-3-inch, 312-pound native of Staten Island, N.Y. He's a self-made football player who rose from obscurity with the Green Bay Packers, paid his dues with the Scottish Claymores of NFL Europe, and became a starter for a Super Bowl champion. And he reminds himself over and over that he never will let his desire and will wane.

But it has been a tough year for the Patriots' right guard, despite the Super Bowl. His three brothers are New York City firefighters and risked their lives to save others after the attacks on the World Trade Center. The sight of Andruzzi breaking down at the podium in Foxboro Stadium when describing his angst and fear before he knew that his brothers were OK was unforgettable.

Two weeks after the Super Bowl, the former Southern Connecticut State star began feeling pain in his knees. He also felt achy all over. He had no idea what was running through his body, and his illness remains undiagnosed to this day.

Five months and one knee surgery later, Andruzzi is fighting his way back onto the field. Yesterday he did resistance running near the end zone of the Bryant College practice field. He's sprinting again, but is he ready for full contact?

New England Patriots player Damien Woody practices training drills at training camp at Bryant College Monday in Smithfield, R.I.

''I'm getting better slowly,'' said Andruzzi. ''It's

been a slow process. Only time will help it right now. It's just got to work itself out of my body. There's no medicine I can take. There's nothing really I can do.

''Hopefully, I could be out there soon. Right now, I'm just trying to find a status where I'm going to be playing in pain. I'm going to be playing hurt, but everyone else is, too, so I'm trying to get out there and find a level where I can stand it where it's not going to hurt myself or my teammates around me.''

Andruzzi has seen specialists from Massachusetts General Hospital, but the doctors are dumbfounded. (The Patriots would not make Andruzzi's doctors available for comment.)

''It's a freak thing,'' said Andruzzi. ''Nobody knows what it is. Nobody has an answer to it. I'm seeing one of the best doctors around and he can't give me a straight answer. I've had 30 vials of blood taken out of me, taken every blood test, and they've checked it for diseases, everything.

''Bottom line is, it's a virus, and a virus that was really severe and came on like cold symptoms, almost flu. I never got a fever, though. And then after a while it inflamed my joints.

''There were days when I couldn't get out of bed. I couldn't make a fist with my hand. It was really hard. I didn't know what was wrong. Nobody could give me an answer. And that's almost worse than getting an answer.

''It was a frustrating off season for myself and my kids and everybody around me. You didn't know what was going on, so it was hard to go about things.''

It is unclear how long it will take for his malady to run its course.

''The specialists have said it could take months to get it out of my system or even up to a year,'' said Andruzzi. ''I'm trying to get to a point where I can stand it. Considering how I was - you can turn around and ask my wife and people around me - it was miserable. When you can't make a fist or bend your arm, your legs hurt, you can't walk, and to come back now ...

''I'm running now, I'm doing more, I'm lifting and getting stuff done. The left knee is the one that's been bothering me more. That's the problem right now.''

Certainly the clock is ticking. On Saturday, the Patriots will play their second exhibition game, against Philadelphia - the first football game at Gillette Stadium. Andruzzi, though, won't be playing. The team could place him on the physically unable to perform list and lose him for the first six regular-season games. But it doesn't appear close to a decision.

''I'm not looking at that or even thinking like that,'' said Andruzzi. ''I need to get out there with my teammates and hopefully there won't be a setback. When I do get out there, hopefully I'll just maintain, getting better day by day. If it gets worse ... hopefully it doesn't.''

He has received helpful and comforting letters from Patriots fans who suggest remedies and even try to diagnose his illness.

''They say things like, `Have you checked for Lyme disease or gout?' I mean, they've checked for everything you can think of. They even drained fluid out of my knee and checked it. They've done a lot.''

Andruzzi will be 27 on Aug. 23, and with all the fighting and clawing he has done to become a starter in the NFL, this should have been prime time for him. Heck, Joe Panos came in to challenge Andruzzi for a job last year and wound up retiring. This year, the Patriots signed Rich Tylski as insurance/competition and he, too, retired.

The starting job was earmarked for Andruzzi. Now, when he returns, he'll have to prove again that he's better than the other guys.

He's grateful, though, that at least this happened in the off season.

''If it happened now, it would be kind of tough,'' he said. ''So I'm just trying to get out there as fast as I can. I'm just trying to deal with it and hope I wake up one day and this thing is gone and I'm feeling normal again.

''It's been tough. It's been mentally and emotionally draining as well as physically draining.''

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