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Kit Menkin’s Leasing News www.leasingnews.org Monday, May 13, 2002 Accurate, fair and unbiased news for the equipment Leasing Industry Headlines----MSM Capital Sign McCue Number #1 Credit Scoring Parker Leasing Hoax Making the Rounds CIT Public Relations CIT Arranges $340 Million Sale/Leaseback Financing For PG&E National Energy Group ( Parent is in bankruptcy, plus has many local and state lawsuits in CA) Unemployment Trend Not Equal in US Winners, Losers, and Liars As Salary Grows, So Does a Gender Gap Willis Lease Finance 1st Q Profits Total $1 Million PDS Gaming 1st Quarter $3.9 Million Loss Pitney Bowes Global Credit Services Selects Cyence ### Denotes Press Release ------------------------------------------------------------------------------------------------ http://groups.yahoo.com/group/theleasingrag Over 90 members by 5:30 Friday and photos have already been uploaded!! I wasn't expecting this turnout at all. Lets get the banter rolling, there have been some excellent questions posted! Thank you for letter the readers know about our bulletin board for the leasing industry. The leasing Rag leasingrag@yahoo.com ---------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------- MSM Capital Sign When Mike Cingari first saw the sign when he drove up, he laughed. He thought it was from some ex-employees who were not happy with their dismissal. Without getting into the details, Bob Pardini came in later, and told him it wasn’t so, they were paid pickets for the plaster union about the landlord not hiring union laborers. He showed him the flyers they were passing out. They both thought it was odd they were being singled out in the building. Their business is national. It wouldn’t effect them, they thought. Later, Cingari and Pardini stopped laughing when their bank called, and others, saying the pictures was being sent around the internet from his ex-employees, on The Leasing Rag( http://groups.yahoo.com/group/theleasingrag/), inferring they had done it as part of their labor dispute. Now serious, he called the management company of the building, who sent over a senior officer. He explained every week the plastering union would choose a company in the building, trying to put pressure on the Irvine Company to use a “union” contractor. What was even more “odd”, the company named in the flyer was not the general contractor of this building nor was the sub-contracted named used to up the drywall. He could do nothing about a public protest by the Union. Leasing News published (and publishes) this to counter any claims for what the sign is all about. http://two.leasingnews.org/images/shame%20on%20you%20%231.jpg The flyer was faxed and does not produce very well, but is from Carpenters Union Local. The last sentence states, “ We are not urging any worked to refuse to work nor are we urging any supplier to refuse to deliver goods.” The headline says “Shame on M.S.M. Capital Corporation For Desecration of the American Way of Life.” It goes on to say “General Contractor DRAC did tenant improvements on a building that is occupied by M.S>M. Capital Corporation at 16520 Laguna Canyon Rd. in the City of Irvine. DBAC contracted with Kron Interior Systems to do the drywall. Kron Interior Systems does not meet area labor standards for wok---it does not pay prevailing wages to all its carpenter-craft employees, including payments for health care and pension.” Carpenter Local 1502 believes M.S.M. Capital Corporation has an obligation to the community to see that area labor standards are met for construction work at buildings they will occupy. They should not be allowed to insulate themselves behind “Independent” contractors. They even give Cingari’s name and telephone number to call. In fact, he did not choose either the general contractor or the sub-contractor, just moved into the space when the work was completed. According to the management of the building, the general contractor by the Carpenter’s Union did not do the work nor did the sub-contractor. Either way, M.S.M Capital is victim to this propaganda and any receipt by e-mail about this sign stating other facts is totally incorrect. McCue Number #1 Today magazine announced McCue Systems advertising was ranked #1 among all lease management technology vendors (including both back-office and front-end providers) and #2 among all industries advertising in the magazine's January issue. Readers rated the ads for "attention-getting", "believable", and "informative". The McCue Systems' ad received a composite score of 79%. Other composite scores for top-placers within the leasing technology sector were: LeaseTeam, Inc. 57% Capital Stream, Inc. 62% IFS 66% Seismiq 69% Thoughtworks 52% The top-placing ad, from iLienOnline (a Web-based service from UCC), scored a composite of 80%, a percentage point higher than McCue's ad. Attached - * McCue Systems' winning ad. (Copywriting: Andrew Lea of McCue Systems. Graphic design: Wayne Krumrei Designs of Concord, CA) * The composite scores of all top-ranking ads. Thanks, Kit. Andrew Andrew Lea, Director, Marketing and Corporate Communications McCue Systems, Inc. 111 Anza Boulevard, Suite 310 Burlingame, CA 94010-1932 (650)348-0650 Ext. 1171 Fax: 888-730-2527 www.mccue.com andrewl@mccue.com 800-549-9570 http://www.leasingnews.org/PDFFiles/eltads.pdf http://www.leasingnews.org/PDFFiles/Balance.pdf Credit Scoring I whole heartedly agree with everything Bob ( Rodi ) said (amazing in itself!) on the topic of credit scoring. He is right on. Credit scoring is here to stay and will only expand in its use by the funding industry. Anyone who thinks that they will be able to avoid it is either operating in a very small and narrow niche or is fooling themselves. The concept of credit scoring as a "tool" is often misunderstood. Credit scoring doesn't in and of itself make credit decisions. The funder uses it as a tool for evaluation. If it is set up improperly or not validated, it can be a dangerous tool. Credit scoring can be set up to make bad decisions and only serves to fuel the deterioration of a portfolio. This is what happened in the last 5 years. Funders motivated by growth incentives and the securities industry looking to generate fee income by placing securitization backed by leases foolishly relied on credit scoring for credibility and as a validation of quality. Thanks to Bob for advancing the discussion on this topic. We will only fail if we fail to learn from our past mistakes as an industry. Paul ************************************************* Paul J. Menzel, CLP Senior Vice President / General Manager Leasing Division SANTA BARBARA BANK & TRUST P.O. Box 60607 Santa Barbara, CA 93160-0607 1 South Los Carneros Road Goleta, CA 93117 Dir Ph# (805)560-1650 Email PaulM@sbbt.com ---- I really want to express my admiration for Bob Rodi's credit scoring commentary. Credit decisions involve a complex analysis of quantitative factors and qualitative factors and no statistical model can be expected to flawlessly adjudicate each decision. Credit scoring models do a very good job of evaluating the major factors involved that lead to relatively clear cut approvals or declines and create efficiencies but they do not eliminate the requirement that the lender think. They are merely tools to be used wisely. The vast majority of credit scored declines that I have seen can be attributed to either data entry errors or disregard for factors that the model assumes to be controlled. And let's not forget that most lending models have a tolerance for losses built in. Credit scoring models never vary on the last day of the month when volume is behind plan nor do they succumb to a vendor's or sales person's siren song. Bob's gun analogy fits perfectly. As with guns, the emotional nature of the anecdotal evidence frequently overshadows the facts. Frank Latourell Director Rave Financial Services, Inc. fml@ravefinancial.com ------------------------
Parker Leasing (In the Leasing News Bulletin Board Complaint Section: http://www.leasingnews.org/bulletin_board.htm Yesterday I received a call from Paul Parker (Parker Leasing). He was upset about comments I made about him in Leasing News. That was about two months ago...he must be a slow reader. He said that he was going to sue me, Leasing News and Bob Bell (??). I told him that was fine with me but if he wanted to sue me then I couldn't talk to him. He said that he was going to "come to my office and beat the crap" out of me. So I told him that he must be confusing me with Ken Goodman and I gave Paul his address. Ken Glasgow ken@cclg.com Corporate Capital By the way, Paul also claimed that he signs up 35 new brokers a week. Now we know where all the new talent is coming from. ------------------------------------------------------------------------------------------ Hoax Making the Rounds: I just received an e-mail today stating that his address has been infected by a virus and it passed along to my computer, my address book in turn has been infected. The virus is called "jdbgmgr.exe" is not detected by either Norton or McAfee anti-virus system. The virus sits quietly for 14 days before damaging the system. It's sent automatically by the messenger and by the address book, whether or not you sent e-mails to your contacts. Here is how to detect it and delete it: 1. Go to start, click on search 2. in the files/folder option, write the name "jdbgmgr.exe" 3. Be sure to search your "c drive" 4. click "find now" 5. the virus has a teddy bear icon on it with the name :jdbgmgr.exe DO NOT OPEN! 6.right click and delete it. It then go to the recycle bin 7. Go to the recycle bin and delete it there also. (This is a hoax now going through the leasing industry mail addresses. Symantec Security Response - Jdbgmgr.exe file hoax The icon you deleted is a driver that reads some types of java script. deleting it just makes windows work worse. See report of hoax from Symantec here: If you have deleted the file search at yahoo for jdbdmgr and reinstall the file, it is a necessary windows system file. Copy the file and put it in your c:\windows\system directory.
http://www.symantec.com/avcenter/venc/data/jdbgmgr.exe.file.hoax.html (Leasing News also recommends pc-cillin, the best anti-virus program in the business because it up-dates constantly. www.antivirus.com for a free virus scan on your system. Perhaps discover what Norton or McAfee let go through to your computer. _______________________________________________________________ The Week Ahead May 13-18 Washington Post May 13 Monday National Summit on Economic Literacy two-day conference opens at National Press Club, Federal Reserve and Treasury. Speakers include Fed Vice Chairman Roger Ferguson, Treasury Secretary Paul H. O'Neill and Education Secretary Roderick R. Paige. Arthur Andersen trial resumes in Houston. May14 Tuesday IRS holds hearing on proposal to collect payroll taxes on value of incentive stock options awarded to executives and employees. Senate resumes debate on trade bill, with amendments expected on steelworkers' health-care benefits and anti-dumping laws. Senate Banking Committee holds hearing on national export strategy. Witnesses include Commerce Secretary Donald L. Evans. National Association of Realtors opens legislative conference at Marriott Wardman Park. Big issue: keeping banks out of their business. Computer Associates, Computer Sciences, Deere, Hewlett-Packard and J.C. Penney issue quarterly reports. Economic indicators: April retail sales. May 15 Wednesday Senate Commerce and Energy committees hold hearings on manipulation of California electric markets. Federated Department Stores, Kmart and Nordstrom issue quarterly reports. Economic indicators: April consumer price index and industrial production. May 16 Thursday Senate Commerce subcommittee holds hearings on impact of Enron collapse on state pension funds. AOL Time Warner holds annual meeting in New York City. Dell Computer, Gap and possibly Liberty Media issue quarterly reports. Economic indicators: April housing starts. May 17 Friday Economic indicators: March trade balance, preliminary May consumer sentiment index May 18 Saturday 5/18-20 Mid-American Association of Lessors Invitational and Warm-Up Weekend in Chicago. Over 300 participants and sponsors in attendance last year at the leasing industry's largest golf related networking event. Tournament is actually on May 20th. For further information, go to: http://www.mael.org/members/news.asp CIT Public Relations It appears this is going to take longer than original anticipated. Leasing News e-mail is still being blocked. We talk to employees and department heads by telephone, and by e-mail from their home. A new development: they can go to the Tyco Yahoo to learn about stock, but are now being blocked from posting comments on Yahoo. Talk so far is not to be surprised if Tyco sells CIT Group, “just as Chase sold their leasing company over ten years ago. They were going to do a public offering, but it didn’t take off, and guess what happened to the Chase Leasing employees---they were let go.” Another manager told me he was “ scared s**t. “Don’t quote me, Kit, in fact, don’t even say you know me. I want to stay off the radar completely. We’re like pawns on a computer chess board.” A Tempe top CIT said, “This is the quiet period. I also don’t have any time to talk to you. We’ve got to get rid of more debt.” From the finance division, “ Remember Newcourt. I think they got two month’s severance. Tyco is taking care of the corporate level much better.” SUMMARY COMPENSATION TABLE (U.S. DOLLARS) http://eol.finsys.com/showfiling.asp?dcn=0000912057-02-016493 4/15/02 ANNUAL COMPENSATION LONG TERM COMPENSATION AWARDS --------------------------------- ------------------------------------- OTHER ANNUAL RESTRICTED SECURITIES ALL OTHER NAME AND PRINCIPAL COMPEN- STOCK UNDERLYING COMPEN- POSITIONS YEAR SALARY BONUS(1) SATION(2) AWARDS(3) OPTIONS(4) SATION(5) ------------------ ------------ -------- ---------- --------- ----------- ----------- --------- Albert R. Gamper Jr.................... Jan-Sep 2001 $680,769 $3,120,434 $37,208 $16,949,070 1,200,000 $ 8,250 President and Chief Executive 2000 $878,847 $ 800,000 $98,188 $ 2,946,500 310,815 $41,954 Officer 1999 $761,534 $1,237,503 $57,577 $ 0 345,350 $36,861 1998 $663,471 $1,051,894 $37,778 $ 0 0 $32,939 Thomas B. Hallman...................... Jan-Sep 2001 $288,846 $ 605,000 $ 8,146 $ 1,490,275 200,000 $ 8,500 Group CEO 2000 $333,076 $ 325,000 $16,692 $ 1,057,500 75,977 $20,123 Specialty Finance 1999 $277,115 $ 292,188 $ 9,210 $ 0 103,605 $17,485 1998 $230,000 $ 217,516 $ 6,098 $ 0 0 $15,600 Joseph M. Leone........................ Jan-Sep 2001 $302,308 $ 580,000 $ 8,519 $ 1,659,596 200,000 $ 8,500 Executive Vice President 2000 $358,088 $ 300,000 $21,168 $ 785,626 62,163 $21,124 and Chief Financial 1999 $299,695 $ 433,007 $12,267 $ 0 124,326 $18,388 Officer 1998 $237,000 $ 270,023 $ 7,813 $ 0 0 $15,880 Lawrence A. Marsiello.................. Jan-Sep 2001 $313,846 $ 480,000 $ 8,457 $ 1,806,375 200,000 $ 8,500 Group CEO 2000 $369,230 $ 400,000 $24,108 $ 785,626 69,070 $18,569 Commercial Finance 1999 $319,610 $ 425,011 $15,834 $ 0 124,326 $19,184 1998 $275,002 $ 302,823 $11,052 $ 0 0 $17,400 Nikita Zdanow.......................... Jan-Sep 2001 $344,615 $ 525,000 $ 8,549 $ 1,896,657 125,000 $ 5,100 Group CEO 2000 $409,238 $ 400,000 $22,711 $ 1,057,500 79,431 $23,170 Capital Finance 1999 $356,741 $ 425,011 $14,437 $ 0 107,059 $20,670 1998 $307,008 $ 302,823 $10,004 $ 0 0 $18,680 (1) For 2001, Mr. Gamper received a cash bonus of $2,002,040, based on the performance of the Tyco Capital division of Tyco. The remainder of Mr. Gamper's 2001 bonus was payable in Tyco common shares. The number of shares awarded was also based on the performance of Tyco Capital. Mr. Gamper received 25,020 Tyco common shares. The amount listed in the table reflects the market value on October 1, 2001, the date of grant. The amounts shown in the Bonus column for 2001 (other than for Mr. Gamper, as described above) and 2000 represent the cash amounts paid under CIT's annual bonus plan. The amounts shown in the Bonus column for 1999 and 1998 represent the cash amounts paid under CIT's annual bonus plan and the value of CIT common stock or common stock units received in lieu of cash. Pursuant to the CIT Long-Term Equity Compensation Plan ("ECP"), executive officers could elect to receive between 10% and 50% of their 1998 and 1999 annual bonus awards in CIT common stock or common stock units, respectively, rather than cash. The cash portion deferred was converted to shares of common stock or common stock units with a market value equal to 125% of the deferred amount. CIT paid dividends on the shares of common stock or common stock units awarded to each Named Executive Officer at the same rate applicable to all other issued and outstanding shares. The amounts included in the bonus column for shares issued in 1999 represent the market value on January 26, 2000 (the date of grant) of the shares of CIT common stock awarded at $19.625 per share of CIT common stock. The awards for 1999 were as follows: Mr. Gamper--$687,503, Mr. Hallman--$85,938, Mr. Leone--$165,007, Mr. Marsiello--$125,011, and Mr. Zdanow--$125,011. The amounts included in the bonus column for shares issued in 1998 represent the market value on January 29, 1999 (the date of grant) of the shares of CIT common stock awarded at $32.4375 per share of CIT common stock. The awards for 1998 were as follows: Mr. Gamper--$584,394, Mr. Hallman--$87,516, Mr. Leone--$150,023, Mr. Marsiello--$89,073, and Mr. Zdanow--$89,073. Interesting in the 4/25/2002 CIT Group Inc. Security Exchange Filing S-1 NAME YEAR OF NORMAL RETIREMENT ESTIMATED ANNUAL BENEFIT ---- ------------------------- ------------------------ Albert R. Gamper, Jr............. 2007 $536,100 Thomas B. Hallman................ 2017 $137,100 Joseph M. Leone.................. 2018 $197,900 Lawrence A. Marsiello............ 2015 $215,200 Nikita Zdanow.................... 2002 $162,300 ( no mention of John D. Burr......................... 58 Group Chief Executive Officer, Equipment Financing JOHN D. BURR has served as Group Chief Executive Officer of CIT's Equipment Financing Group since June 2001. Mr. Burr served as President of Equipment Financing/North American Construction and Transportation division since 1999 and Executive Vice President of Equipment Financing since 1983, and held a number of other management and executive positions at CIT since 1967. His unit has produced a high percentage of CIT’s profits. CIT employed approximately 6,320 people at December 31, 2001, of which approximately 5,150 were employed in the United States and 1,170 were outside the United State Also these statements: OUR POTENTIAL ACQUISITION OR DISPOSITION OF BUSINESSES OR ASSET PORTFOLIOS IN THE FUTURE MAY ADVERSELY IMPACT OUR BUSINESS. As part of our long-term business strategy, we may pursue acquisitions of other companies or asset portfolios. In addition, as we have done recently, we may dispose of non-strategic businesses or asset portfolios. Future acquisitions may result in potentially dilutive issuances of equity securities and the incurrence of additional debt, which could have a material adverse effect on our business, financial condition and results of operations. Future acquisitions could involve numerous additional risks, including: difficulties in integrating the operations, services, products and personnel of the acquired company; the diversion of management's attention from other business concerns; entering markets in which we have little or no direct prior experience; and the potential loss of key employees of the acquired company. In addition, acquired businesses and asset portfolios may have credit-related risks arising from substantially different underwriting standards associated with those businesses or assets. In the event of future dispositions of our businesses or asset portfolios, there can be no assurance that we will receive adequate consideration for those businesses or assets at the time of their disposition or will be able to adequately replace the volume associated with the businesses or asset portfolios that we dispose of with higher-yielding businesses or asset portfolios having acceptable risk characteristics. As a result, our future disposition of businesses or asset portfolios could have a material adverse effect on our business, financial condition and results of operations. WE COMPETE WITH A VARIETY OF FINANCING SOURCES FOR OUR CUSTOMERS. Our markets are highly competitive and are characterized by competitive factors that vary based upon product and geographic region. Our competitors include captive and independent finance companies, commercial banks and thrift institutions, industrial banks, leasing companies, manufacturers and vendors with global reach. Substantial financial services networks have been formed by insurance companies and bank holding companies that compete with us. On a local level, community banks and smaller independent finance and mortgage companies are a competitive force. Competition from both traditional competitors and new market entrants has intensified in recent years due to a strong economy, growing marketplace liquidity and increasing recognition of the attractiveness of the commercial finance markets. In |
