Pictures from the Past---1996---Alan J

Three(3)years experience in lease accounting. Managing three Partnerships' Funds, preparing external reports for SEC.,10Q &10K. Consolidation of subsidiaries financial position w/parent company. email:hope2live@aol.com

Asset Management: Patchogue, NY

12+ yr. Experience in Auto/Equipment Leasing. Managed Liquidation of Repo & E.O.L. Portfolios. Managed Litigation Portfolio as well. Exp. in Bankruptcy. Looking for suitable position in Tri-State area. Email:THood8663@Yahoo.com

Contract Administrator: Los Angeles, CA

6 years small ticket leasing - Credit Analysis up to $75,000, Documentation & Funding. Highly organized team player trained sales/operations in credit, pricing, docs. Email:miri7ca@yahoo.com

Contract Administrator: Chicago/Naperville

18+ years experience in leasing US/Europe, as both lessee and lessor. Am versatile and adaptable to lessee, lessor, or lender career opportunity. Chicago relocation desired. Email:kris_k11@yahoo.com

Contract Administrator: Schaumburg, IL

10 yrs. small/mid-ticket leasing. Proficient in documentation, funding and legal. Worked with brokers, portfolio purchases, vendor programs, municipal transactions. prefer to stay in Suburban Illinois. Email:sophie1900@msn.com

Communications: Oceanside, CA. Placed all- wiring-cabling &comp system in Polaris building. Exp.in cabling, webwork, photograph/ad work, server work for 'Racksavor" & top exp.in carpentry-plumbing, finishing work. email:jzapf@artisticimages.com

Entire list of jobs wanted

http://65.209.205.32/LeasingNews/JobPostings.htm

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GE's Immelt outlines strategy

By Associated Press

FAIRFIELD, Conn. (AP) General Electric Co. Chief Executive Jeffrey Immelt reaffirmed the company's earnings forecast Tuesday as he outlined areas for growth and divestitures.

Immelt said earnings would be in the $1.55 to $1.70 per share range for next year, up 3 to 13 percent from this year. GE offered the same outlook last month.

Immelt, who took over the Fairfield, Conn.-based conglomerate more than a year ago when Jack Welch retired, told analysts and investors at a meeting in New York that the company might sell between $1 billion and $5 billion in slower-growing industrial businesses and between $5 billion and $10 billion in financial businesses such as equipment management.

As for acquisitions, Immelt said GE prefers to buy companies in the range of $100 million to $2 billion.

''You're going to see moves in the next year around the portfolio,'' Immelt said.

Immelt said he wants 80 percent of GE's industrial segment revenue to come from technology and services. Consumer and commercial finance businesses will expand, while insurance will shrink as a percentage of the financial services portfolio, he said.

China is an important area for growth for GE, Immelt said, noting that the company will open a global research center in Shanghai next year.

Shares of GE closed Tuesday on the New York Stock Exchange at $26, down 43 cents.

On the Net:

http://www.ge.com

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Conseco Files for Chapter 11 Bankruptcy

Move Marks the Third Largest Bankruptcy in U.S. History

INDIANAPOLIS(AP) –– In the third- largest bankruptcy in U.S. history, Conseco Inc. filed for Chapter 11 protection after four months of talks with creditors to restructure the insurance and finance company's $6.5 billion in debt.

Although the filing was not surprising given Conseco's recent woes, it marked a dramatic downfall for a company whose stock was once a Wall Street darling.

From 1988 to 1998, the company's stock averaged a total return of 47 percent per year and Conseco shares traded as high as $58. Today, the stock trades at less than a nickel per share.

The filing follows a years long tailspin after the conglomerate's aggressive acquisition strategy in the 1990s backfired.

Conseco is seeking a judge's approval of a prepackaged bankruptcy. Terms were negotiated before Tuesday night's filing in U.S. Bankruptcy Court in Chicago, said Conseco spokesman Mark Lubbers.

Banks and bondholders who took part in the talks reached terms with Conseco, but holders of preferred securities did not, Lubbers said.

Talks will continue with those investors, Lubbers said.

The filing covers Conseco Inc., the parent company, as well as St. Paul, Minn.-based Conseco Finance Corp. and its consumer finance subsidiaries. Conseco's insurance operations are not included in the filing, Lubbers said.

Conseco, the nation's seventh-largest insurance provider, is based in the Indianapolis suburb of Carmel.

Company founder Stephen Hilbert was ousted in April 2000 after piling up $8.2 billion in debt. Federal regulators are investigating the company's accounting around the time of Hilbert's resignation and his replacement by Gary Wendt.

The decline in Conseco's financial condition accelerated in recent months, leading to Wendt's Oct. 3 resignation. He had received a $45 million signing bonus when he was hired.

Wendt, who remained board chairman, said as recently as May 1 that Conseco's short-term debt problems were behind it, and that he was confident about next year's prospects. Those statements and other reassurances from Conseco executives led to the filing of a string of recent shareholder lawsuits.

Under the most commonly used measure to rank bankruptcies, Conseco's ranks third in the United States since 1980 based on the $52.3 billion in assets the company and its subsidiaries reported as of Sept. 30.

WorldCom's total assets at its July filing were $104 billion, followed by Enron's $64 billion.

Before Conseco's filing, the third-largest bankruptcy was the 1987 filing by Texaco, which had nearly $36 billion in assets at the time; adjusted for inflation, that amount would be more than $56 billion today, according to the research Web site BankruptcyData.com.

Conseco has suffered a series of downgrades by Wall Street credit rating agencies. Those downgrades, combined with bankruptcy fears, have hurt the ability of Conseco's insurance and finance subsidiaries to keep existing customers and attract new ones.

Company officials have said Conseco's insurance subsidiaries have remained fundamentally sound despite the parent company's debt problems. However, the finance division, Conseco Finance, is insolvent after failing to make a $4.7 million payment due Dec. 4.

CMC Bankruptcy Filing

The Commercial Money Center bankruptcy matter currently pending in the

U.S. Bankruptcy Court for the Southern District of California (San Diego

Division). The website for PACER, which will allow you to access the CMC

bankruptcy matter is www.ecf.casb.uscourt.gov. You will need to set up a

PACER account number and obtain a password. The case No. is 02-09721.

http://two.leasingnews.org/temporary/bankruptcy.htm

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Ex-Tyco director pleads guilty to felony

By SAMUEL MAULL, Associated Press Writer

NEW YORK - The former lead director of Tyco International Inc. pleaded guilty Tuesday to a securities fraud charge for failing to tell his own board that the company was paying him a multimillion-dollar finder's fee.

Frank E. Walsh, 61, admitted he did not

disclose $20 million in payments for helping broker Tyco's acquisition of finance company CIT Group last year. Walsh, of New Jersey, was arrested Tuesday and charged with violating the state's general business law.

Walsh agreed to repay the fees and pay a $2.5 million fine as part of a settlement with the Manhattan district attorney's office.

In a criminal complaint filed Tuesday, prosecutors charge that when Walsh learned of Tyco's interest in buying the CIT Group, he arranged a meeting in early 2001 between then- chief executive Dennis Kozlowski and CIT's chief executive officer.

After the meeting, Kozlowski told Walsh that if the acquisition was successful, Walsh would receive an investment banking or finder's fee for his services.

The complaint says that Kozlowski and Walsh submitted a proposal to buy CIT for $9.5 billion to the Tyco board for approval without disclosing that Walsh was going to be paid the fee.

Kozlowski and Walsh agreed that Walsh would get $10 million directly, and that Tyco would contribute another $10 million in Walsh's name to the Community Foundation of New Jersey. Tyco paid those monies in July 2001, but the board did not learn of the payments until six months later.

The Community Foundation will keep the donation, with Walsh will providing full restitution to Tyco, said Walsh's spokesman, Gregory Miller.

Walsh's undisclosed payment was just a small part of allegations of millions in undisclosed payments and loans to Tyco executives and insiders.

Kozlowski and former chief financial officer Michael Swartz face criminal charges of stealing $600 million from the company.

Mr. Kozlowski is presently skiing for a month in Colorado, staying at one

of the three residences he owns in the state. His yacht is on its way

to Bermuda, where he may be asking the judge to allow him extra time

to enjoy the warm weather.

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Gold Hits Five-Year High as Dollar Reels

Reuters

By Steven Swindells

LONDON (Reuters) - Gold hit its highest level in more than 5-1/2 years Tuesday as weakness in the dollar, rallying oil prices and fears of a war with Iraq opened the gates for a flood of fund money into the safe-haven asset.

Spot gold hit a high of $341.25 an ounce, its firmest level for the metal since June 1997 and a 1.5 percent gain from closing levels in New York Monday.

"The slump in the dollar has caused gold to spike upwards to $340 overnight, with the sharp jump in oil prices and heightened fears of a war with Iraq adding to the bullish sentiment," said Lawrence Eagles, analyst at commodities trader GNI.

"Historically when gold performs like this it tends to keep going," Eagles said.

Gold prices have climbed 23 percent in a ragged and halting rally throughout 2002, spurred by a cocktail of geopolitical tensions from the Middle east to Kashmir and a slump in global equity markets and the dollar.

A move by leading gold miners to reduce their forward sales of the metal to take advantage of rising spot prices rather than hedge their sales in forward markets has also helped gold's rally this year.

"Even with a very large net long fund position ... further price gains cannot be ruled out in the current environment," said Barclays Capital.

Gold's latest jump was triggered by a weakening of the U.S. dollar against the euro, which added to fears over higher oil prices and a growing list of political tensions.

The dollar tumbled to new three-year lows against the euro and slid on the yen as the market tightened its focus on the prospects of war with Iraq after the United States found fault with Baghdad's weapons declaration.

Late Monday, Secretary of State Colin Powell said there were problems with Iraq's 12,000-page weapons declaration to the United Nations. He expected the United States to release a final assessment of the declaration late this week.

This stoked worries Washington is intent on attacking Iraq soon. This weighed on the dollar as investors fret about the huge financial costs of a war and worry the country might become more vulnerable to external attacks such as those on Sept. 11.

Washington's key ally Britain said diplomatic efforts were still being pursued on Iraq and denied reports it was asking defense firms to speed up production of military equipment in readiness for war.

The Sun newspaper reported Tuesday that London had begun the build-up for war by notifying defense equipment manufacturers and hiring a fleet of cargo ships to transport military equipment to the Gulf.

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U.S. mortgage bond prices rise with Treasuries

By Aleksandrs Rozens

NEW YORK, - U.S. mortgage-backed bond prices firmed with U.S. Treasury prices early Tuesday but mortgage bond spreads changed little from late Monday.

"There has not been much in the way of meaningful flows," said a trader with a Wall Street dealer firm.

Early this session, U.S. Treasury prices advanced on heightened tension as the United States said Iraq would get no second chances, overshadowing a slew of U.S. economic data.

"We're unchanged to slightly wider versus Treasuries and swaps," said the trader, adding that there were no predominant trades in pass-throughs.

Mortgage banks have sold some $1 billion of mortgage debt early Tuesday, the trader said.

The mortgage securities market is paying close attention to rising gold and oil prices as well as equity price moves because of their influence on Treasury yields, which in turn affect mortgages.

"People will keep an eye on gold and oil ... gold and oil are making new highs. If that trend picks up, that could affect rates," said a trader with a Northeast fund management firm.

Gold prices have risen on tensions between the United States and Iraq, and on rallying oil prices. World oil prices have risen by 20 percent in a month because of Venezuela's oil industry shutdown led by opponents of President Hugo Chavez as well as by fears of war in Iraq.

The trader with a Northeast fund management firm said he is keeping a close eye on the S&P 500 index. If this index falls below 875, it could spur buying of Treasuries that would send U.S. yields lower and heighten worries about home loan refinances.

A rise above 950 could fuel sales of Treasuries that would send yields higher, the trader said.

Early Tuesday, the S&P 500 Index was at 906, down slightly from Monday.

Investors reported seeing a list of short-dated structured mortgage bonds out for bid early this session. Participants said a $250 million of short-dated collateralized mortgage obligations were being shopped around by an investor in what may be year-end book-squaring.

Early Tuesday, 10-year U.S. Treasury prices <US10YT=RR> rose 9/32 to 98-31/32, yielding 4.12 percent.

Within discount 30-year mortgage bonds, prices rose 1/32 to 2/32 with bond equivalent yields ranging from 5.351 percent to 5.403 percent.

And among 30-year premium mortgage bonds, prices were unchanged to 1/32 weaker with bond equivalent yields ranging from 4.522 percent to 5.599 percent.

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November Class 8 sales higher this year than last

landlinemagazine.com

Class 8 truck sales were down 22.3 percent in November compared with the previous month, which is in line with predictions that sales of trucks with '02-compliant engines would drop.

However, November sales were 17.7 percent higher than they were the previous year, which shows that the slump predicted by analysts may not be as catastrophic to the industry.

According to Ward's Communications, 11,659 Class 8 trucks were sold in November, and 15,010 were sold the previous month. No Class 8 manufacturer sold more trucks in November than October, though Freightliner (-1.7 percent), Sterling (-3.7 percent) and Peterbilt (-6.2 percent) each saw a drop of less than 10 percent in sales.

Ward's data shows the 4,261 Class 8 trucks Freightliner sold in November were 31 percent more than it sold in the same month last year. Sterling (45.4 percent), Peterbilt (40.9 percent), International (29.6 percent) and Kenworth (6 percent) also sold more trucks in November 2002 than they did in November 2001.

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Deborah Hopkins takes over Citigroup's Corporate Strategy unit

By Tara Siegel Bernard, Associated Press

NEW YORK (Dow Jones/AP) After being pushed out of the chief financial officer slot at Lucent Technologies Inc. last year, Deborah Hopkins has landed on her feet as head of corporate strategy at financial-services giant Citigroup Inc.

In her new post, the 48-year-old Hopkins named the second-most powerful woman in American business by Fortune Magazine in 2000 will serve as an in-house management consultant of sorts. She'll work closely with Citigroup's top managers on issues such as business strategy for individual units as well as the overall bank, potential acquisitions, risk management and branding, among other things. Her strong background in finance is a solid fit for the nation's largest bank, which is based in New York.

Hopkins will also serve on Citigroup's management committee, comprised of 44 of Citigroup's most senior executives and business heads.

Considered one of the hottest female executives when she came to Lucent to serve as its chief financial officer in April 2000, she left just a year later after clashing with Henry Schacht, Lucent's then-interim chief executive who was pulled out of retirement to again head the telecom-equipment maker after it ousted chieftain Richard McGinn in October 2001.

Hopkins was lured to Lucent from the CFO post at Boeing Co. by McGinn, who offered her a $4.6 million signing bonus. Before Boeing, she had another high-profile stint as chief financial officer of General Motors Corp. from 1997 to 1998. She served as general auditor of GM from 1995 to 1997, and in various roles at Unisys Corp. from 1982 to 1995. Most recently, Hopkins was a senior partner at Marakon Associates, an international management consulting firm.

It was Hopkin's demanding, ambitious and sometimes emotional style she was nicknamed ''Hurricane Debby'' which clashed with Schacht, a measured, button-down Yale graduate a generation older, The Wall Street Journal reported at the time of her departure. The two allegedly disagreed about critical elements of Lucent's restructuring, including whether the New Jersey company should merge with French telecom-equipment maker Alcatel SA.

Hopkins was widely seen as helping to set the stage for a possible turnaround at the beleaguered Lucent.

Hopkins, who was unavailable for comment, will build on the work of her predecessor, Hamid Biglari, who was named global head of mergers and acquisitions for the financial institutions group within Citigroup's global corporate and investment bank.

Citigroup has come under fire this year, as securities regulators investigate the credibility of the company's stock research and whether its transactions with corporations and top corporate executives illegally helped the firm win lucrative underwriting contracts.

Shares of Citigroup closed at $37.13 Tuesday on the New York Stock Exchange, down 35 cents, or 0.9 percent.

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California bank makes New York foray

by Tom Fredrickson

City National Bank, California's second-largest independent bank, has

opened its first New York outpost--a private banking office in

Manhattan.

The $11.3 billion bank initially will focus on its existing client base

of Hollywood business managers who work on both coasts. It has tapped

Frank Baudille, formerly vice president and manager with HSBC's New York

entertainment and media private banking unit, to head the new office. He

is joined by Gerald Mathe, who worked in the same unit of HSBC, along

with two City National transfers from California and five new hires.

Located at 400 Park Ave., the office offers private banking, business

banking and other specialized services.

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Housing Starts Up, Government Reports

November starts increased 2.4%, to 1.697 million (SAAR), with single family up 1% to 1.39 million (Saar), while the more volatile multifamily sector was up 10%. Regionally, the Midwest and South posted double digit gains while the Northeast and West posted losses. Permits, an indicator of future activity, fell 2.7%.

Analysis and outlook: As mentioned in the Dismal Scientist ( www.economy.com ), residential construction is as strong as it has been since the late 1970‘s, when the baby boomers were coming of age. In fact, today, it is even stronger when one considers that the single-family percentage is much higher (80% versus 60% in the 70’s), and today’s homes are 30% larger than the ones bought by the young boomers two decades ago. Strength in new single-family activity continues to be fueled by low mortgage rates while healthy price appreciation fosters interest in trade up activity. Furthermore, many consumers continue to invest in real estate as a safer alternative to the more volatile stock market. New home sales and existing home sales are both reaching records again this year. Additionally, inventories remain low (about 4 months supply), and this encourages builders to continue putting up new homes.

What does the near term future look like? Housing should remain strong during the 1^st half of 2003, carried forward by pure momentum. The key question is – when will the economy strengthen? Currently, the economy appears to be in a holding pattern as strong consumer spending continues to compensate for weakness in manufacturing. Inflation is being held in check by healthy productivity increases while overcapacity and globalization forces remove most pricing power from firms. Initially, interest rates should remain near 6% (30 year fixed rate mortgages) in 1^st half 2003, however, as the economy strengthens (most forecasters say that won’t happen until the 2^nd half at the earliest, and that will depend in large degree by “geopolitical concerns”), interest rates will trend upward, and housing activity will pull back some in the 2^nd half of 2003. NAHB’s latest forecast (dated 12-02-02), has starts trending downward throughout 2003, starting with 1^st Qtr at 1.64 million, SAAR, and finishing the year with 4^th Qtr levels at 1.627 million, SAAR. The average over the year is still a healthy 1.633 million, about 50,000 units fewer than this year. Most of the forecasted pullback is in single family – peaking near 1.35 million this year (a record by the way) before falling back to a still healthy 1.3 million next year. These are still very good numbers, and we should be happy if we reach 1.3 million SF starts next year.

Additionally, you may be seeing more references to deflation (overall drop in prices) if the economy continues to languish while the CPI (retail prices) and PPI (wholesale prices) continue to fall. Most analysts don’t see this as a real possibility, however, in its place, we may see continuing disinflation (slower rate of inflation), and this is good for most consumers. The government still has lots of fiscal options to “jumpstart the economy” – lower taxes, more government spending, investment tax credits, accelerated depreciation to foster business investment, and “printing money” option to name a few. The consensus is that next year’s economy will show a mild rebound (about 2.5% GDP), with housing remaining the strongest sector. The key factor that could dampen housing is consumer confidence which is affected primarily by the employment picture, although geopolitical events (terrorism, war with Iraq, etc.) are becoming an important ingredient too.

How Bad is it?

McDonald's to post first quarterly loss ever

By Dave Carpenter

ASSOCIATED PRESS

CHICAGO – McDonald's Corp. warned Tuesday that the protracted sales slump that already has forced it to change CEOs and reverse expansion plans will result in the first quarterly loss in its 47-year history.

The announcement, which came 12 days after a management shakeup, sent shares in the burger giant tumbling to a nearly eight-year low.

It also confirmed that a price war with rival Burger King – its first big discounting campaign since 1997 – hasn't paid off the way the company hoped after two years of wrestling with a crowded U.S. restaurant market, mad-cow disease scares overseas, marketing misfires and mounting service complaints.

McDonald's said it expects to incur after-tax charges of at least $390 million in the fourth quarter to pay for the restructuring moves it announced last month, including closing underperforming restaurants and pulling out of several countries. That will result in a net loss of 5 cents to 6 cents per share.

Excluding the charges, the Oak Brook, Ill.-based chain expects earnings to be 25 cents to 26 cents per share – well short of the 31-cent estimate of Wall Street analysts surveyed by Thomson First Call.

McDonald's shares, which traded at nearly $50 three years ago and topped $30 as recently as June, sank $1.76 or 10 percent to $15.62 in afternoon trading on the New York Stock Exchange. That's the lowest closing price, adjusting for a stock split, since Jan. 26, 1995.

McDonald's revealed continuing weakness in its home market, saying sales at U.S. restaurants open at least a year were 1.3 percent lower in the first two months of the fourth quarter than in the comparable period a year ago. Through November, the same-store sales were down 1.5 percent.

"In the U.S., it has just gotten to the point where they can't add any more stores because the (fast-food) market is so saturated," said Morningstar analyst Carl Sibilski. "Now it's a matter of how they make the hurdle from saturation to cost controls."

But the slump goes well beyond McDonald's back yard. Sales at established McDonald's restaurants worldwide were down 1.6 percent for the quarter and down 2 percent for the first 11 months.

The company also said profit margins for the fourth quarter will be lower than a year ago.

Expenses related to selling, general purpose and administration are expected to rise 12 percent for the quarter due to increased spending on advertising and technology. McDonald's has spent heavily in the quarter to promote its "value menu" of $1 items.

Analyst Douglas Christopher said McDonald's has dabbled too much in new concepts and focused on growing sales through expansion while not spending enough time until recently on food quality, service and cleanliness. He also said its once-superior finances have become saddled with debt and other concerns.

"Management got off track. They need to get back to basics," said Christopher, of Los Angeles-based Crowell Weedon. "Through a lack of execution, they've destroyed something that was so predictable and so consistent."

Jim Cantalupo, the former company president who had retired earlier this year, was rehired Dec. 5 to take over from Jack Greenberg as the company's fifth chairman and chief executive officer on Jan. 1. Greenberg, under fire for months from investors and analysts alike, retired unexpectedly.

"This has been a difficult year and our financial performance has been below expectations," said Matthew Paull, McDonald's chief financial officer. "Under the leadership of Jim Cantalupo, I am confident we will improve our business."

The company did not conduct its usual conference call to discuss the fourth-quarter outlook. It said Cantalupo is "aggressively reviewing all aspects of the business" and will discuss his priorities in January.

Merrill Lynch analyst Peter Oakes said Cantalupo is likely to add more fourth-quarter charges to "wipe the slate cleaner, particularly the international portfolio."

Morningstar's Sibilski agreed, saying "They may as well get as much bad news in as they can, between CEOs." He said the company's future still holds promise because of its international dominance and the recently begun makeover of many of its 13,300 U.S. restaurants.

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Madison Capital, LLC recently welcomed Lee Sandler as Senior Director, Business Development

Madison Capital, LLC recently welcomed Lee Sandler as Senior Director, Business Development. Lee comes to Madison Capital with an extensive background in fleet vehicle leasing and fleet support services experience. He will be responsible for expanding Madison Capital's vehicle leasing and services programs, as well as non-vehicular equipment.

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Z Resource Group acquires Management Search Group, Inc. expanding

presence in the Equipment Leasing/Commercial Finance markets.

Philadelphia, PA - Z Resource Group is pleased to

announced the completion of an acquisition agreement with Management

Search Group, Inc., an 8 year old , Philadelphia based, boutique

recruiting firm focusing in the equipment leasing, commercial finance,

and banking sectors. As part of the asset purchase agreement, Company

founder and President Jeff Shapiro has been retained to insure smooth

transition of the business assets to Z Resource Group. Jeff will also

join the Z's board of advisors. The transaction is scheduled to close by

December 31, 2002.

Larry Hartmann, Managing Director of Z Resource Group, related, "We are

very excited about the acquisition as it expands our presence in the

financial services area. MSGI has been active in the leasing segment for

many years and has great reputation with their clients. We feel the

combination of Z and MSGI provides great leverage for our platform and

improved services for MSGI's clients".

Jeff Shapiro, President of MSGI added " I am very pleased to see this

business taking the next steps in growth. I am personally looking

forward to continuing to provide quality service and solutions to my

valued client base and candidate network that has been built up over the

past 8 years. I feel Z's market expertise, systems and national

presence will provide the best platform for future growth within our

existing client base".

About Z Resource Group

Z Resource Group is a fast growing, nationwide specialty Executive

Search, Staffing and Consulting Firm. The company is entering its fifth

year of successfully providing value added services to several key

markets, including financial services, technology, and healthcare.

Headquartered in the Boston, MA area, the company maintains branch

offices in the New York/New Jersey area as well as Philadelphia, PA.

For more information, contact Larry Hartmann @ lhartmann@zrgroup.com

or Jeff Shapiro at jshapiro@zrgroup.com For more information on the

company, visit www.zrgroup.com

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The Bank of New York Company, Inc. Announces Fourth Quarter Provision Principally for Airline Exposure

NEW YORK----The Bank of New York Company, Inc. announced today that it anticipates taking a $390 million provision and a related $240 million charge-off in the fourth quarter.

Principally, these actions reflect losses on aircraft leases to United Airlines, as well as the potential for losses on leases of aircraft to other domestic carriers. In addition, through this provisioning and related charge-off the Company has dealt with several individual non-airline credits.

Regarding its aircraft leasing portfolio, the Company has $761 million of airline leasing exposure, with $414 million to major U.S. carriers, the industry segment which faces the most severe operating challenges. Following a provision of $225 million (included in the $390 million) and an associated charge of $125 million, and considering previous reserves, the Company will have substantial reserves available to cover its remaining exposure of $289 million to major U.S. carriers. With respect to the individual credits, the Company has provided $75 million for and taken charge-offs associated with: a currently non-performing retailer credit, due to further impairment during the quarter; an insurance company credit that became non-performing in the fourth quarter; and the cost associated with a partial sale of a cable credit currently categorized as non-performing. Further, the Company is adding $50 million to its allowance for loan losses.

Following these actions the Company estimated its non-performing assets at year-end to be $441 million, down 20% from 9/30/02, its loan loss reserves to non-performing assets to be 1.88x up from 1.24x at 9/30/02, and its loan loss reserves to total loan ratio to be 2.4%, up from 2.0% at 9/30/02.

Thomas A. Renyi, the Company's Chairman and CEO, stated, "While taking this large provision is disappointing, this action adequately reserves for the credit risk in our entire portfolio, in particular airlines. Given our actions today, we are confident about the credit outlook for our portfolio as we enter 2003 and we remain committed to our aggressive risk reduction efforts."

The Company will be holding its annual analyst meeting tomorrow, December 18th at 1:30 pm, which will be webcast. At the meeting, the Company will review the strategic positioning of its global franchise, its credit risk reduction initiatives, including the actions taken today, and its 2003 outlook, among other topics.

The Bank of New York Company, Inc. (NYSE:BK), is a financial holding company with total assets of over $80 billion as of September 30, 2002. The Company provides a complete range of banking and other financial services to corporations and individuals worldwide through its basic businesses, namely, Securities Servicing and Global Payment Services, Corporate Banking, BNY Asset Management and Private Client Services, Retail Banking, and Global Market Services. Additional information on the Company is available at www.bankofny.com.

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Study finds discrepancies in credit reports could harm some consumers

By Leigh Strope

WASHINGTON (AP) Discrepancies in credit reports of more than one-third of consumers could make it harder for them to obtain loans or force them to pay higher interest rates to get loans, a study released Tuesday by advocacy groups suggests.

Common discrepancies included omissions of revolving accounts in good standing and mortgage payments that were never late. On the negative side, omissions also included failure to report delinquencies or charge-offs, said the study, conducted by the Consumer Federation of America and the National Credit Reporting Association.

Credit scores and reports are increasingly being used, not only by banks and lenders but by insurance companies, employers and service providers such as utilities to help determine an applicant's likelihood of repaying debts.

The FICO score, developed by Fair, Isaac Inc., is a number between 300 and 850 that more than 70 percent of the largest financial institution lenders use to determine credit risk. Scores are based on payment history, debt owed and types of credit used. All of that appears on credit reports.

For consumers with scores near 620, considered the dividing line between bad and good credit, discrepancies and omissions can affect whether a person gets approved for a mortgage at the best interest rate, the study said.

Officials at Atlanta-based Equifax, one of three credit repositories, say each agency has its own guidelines about what it collects and how long it retains the information. Timing also is an issue, said John Ford, Equifax's privacy officer. Information can vary from each repository, depending on when a report is requested. No law requires creditors to report to all three.

''One of the major flaws that we see in the study is this notion that if the three credit reporting agencies don't all have exactly the same data, then that's an error,'' Ford said. ''Nothing could be further from the truth. There are lots of reasons why.''

The study estimated that of consumers with scores between 575 and 630, a fifth would be harmed and another fifth would benefit from score inaccuracies if they tried to obtain mortgage loans.

''The allocation of credit should not be based on a lottery system,'' said Stephen Brobeck, executive director of the consumer federation.

Falling below the 620 cutoff can impose significant costs on mortgage borrowers, he said. Over the life of a 30-year, $150,000 mortgage, a borrower incorrectly charged a subprime rate of 9.84 percent instead of a prime rate of 6.56 percent would pay $124,067 more in interest.

The groups analyzed the credit scores of more than 500,000 consumers. A more extensive investigation was conducted on complete credit files of more than 1,700 consumers. No personal information that could be used to identify an individual was recorded during the study, the groups said.

They are recommending policy changes to help improve fairness, including urging government agencies such as the Department of Housing and Urban Development and the Federal Trade Commission to evaluate credit scoring systems regularly, including automated mortgage and insurance underwriting systems and tenant and employee screening systems.

Other recommendations include:

Requiring creditors to provide consumers free copies of their credit reports immediately after they are denied loans or receive higher interest rates and quick reconsideration if errors are discovered.

Urging consumers to review credit history regularly, especially before applying for a mortgage loan, and correct any errors or discrepancies.

On the Net: Consumer Federation of America: http://www.consumerfed.org

National Credit Reporting Association: http://www.ncrainc.org

Credit repositories: http://www.equifax.com; http://www.experian.com; http:// www.transunion.com

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