Aquila Credit Questioned
Moodys Investor Services has scheduled
a review for a possible rating downgrade of Aquila. As of May 20, Aquila
Inc.s senior unsecured debt rating was Baa3. Moodys cited
Aquilas focused growth in the energy merchant market, increasing
business and financial risk, and a 40-percent drop in first-quarter earnings
from a year ago as reasons for the review.
Aquila has turned to reducing its costs by $100 million and selling $500
million in assets to hold off the credit-rating sector. In May the company
announced it would eliminate a total of 700 jobs, 525 of which are in
Kansas City. Aquilas proxy contest for control of Quanta Services
board was also settled in May with all pending litigation withdrawn.
President and CEO Robert Green stated that his company foresaw Moodys
action as a possible outcome of Aquilas business plans and that
Aquila has kept Moodys updated of plans to improve cash flow.
K.C. Joins KPMG
Nine partners and 160 members of Andersens
Kansas City office have switched to KPMG as of May 21. Three partners
and 60 staff members from Andersens Omaha, Neb., office have also
Announcements of the personnel shift came after Butler Manufacturing moved
its audit work from Andersen to KPMG days before. Aquila has also dismissed
Andersen and appointed KPMG. The company was Andersens fifth-largest
public client. KPMG doubled its staff size with the move to 21 partners
and over 300 employees and surpassed Ernst & Young as the largest
accounting firm in Kansas City, according to Ingrams Top Area Accounting
Firms list, March 2002.
Farmland Head Steps Down
Robert Terry has been named president and
CEO of Farmland after Bob Honse informed the board of his plans to retire.
Honse was asked to step down immediately to "ensure continuity of
leadership as the company continues to work toward financial strength."
Farmland reported increasing losses in its last quarter and has reduced
fertilizer production, placing two plants on idle.
Sceptor vs. Postal Terrorism
Sceptor Industries is helping to pilot-test
an Automatic Bio-agent Detection System for the United States Postal Service.
The company, spun off of Kansas Citys Midwest Research Institute,
is working with a team led by Northrop Grumman Corporation to develop
the system for large- scale automated mail-sorting equipment.
Sceptor has tailored its existing pathogen detection systems to meet the
needs set forth by the postal service. The USPS is expected to select
equipment this summer for a potential multimillion dollar contract. The
companys detection systems sample the air for viruses, bacteria
and other pathogens, including anthrax.
IT Students Lose Conseva
Conseva Learning Center announced on May 3
that it could no longer weather the economic slump. The company has ceased
all operations. Conseva strived for profitability, marketing its courses
until the very end. Officers and shareholders worked to restructure debt
and attract new capital and made additional capital investments without
success. Students are completing their courses with Foss Training and
SouthWestern Bell Cuts
SBC Southwestern Bell announced that it would
cut 5,000 of its 190,000-
employee work force. The reduction adds to 10,000 job cuts over the last
quarters. The cuts will affect workers in 13 states including Kansas and
Missouri. Exact numbers for either state or for Kansas City have not been
Applebees to Branch
Applebees reported its plans to increase
its domestic restaurant count from 1,413 to its full potential of 2,300.
The company plans for future franchise acquisitions and announced $75
million set aside for stock repurchases. Approximately 100 new Applebees
restaurants are expected to open annually.
In addition, Applebees announced in May a three-for-two stock split
that will occur in the form of a 50-percent stock dividend. The dividend
will be payable June 11, 2002.
Budget Passes, Stadium Bill Disappears
The Missouri General Assembly agreed to raise $672 million in new revenue
as it finished the 2002 session. The state will gain $50 million by selling
bonds against the states share of the 1998 tobacco settlement. A
$111.6 million revenue-enhancement plan, written to close tax loopholes
on businesses, was also passed.
The two bills ensured that the legislators were out of session on time,
as Gov. Bob Holden had promised to veto budget bills and call a special
session to redraft the budget if lawmakers failed to create enough revenue
to cover spending.
The state legislature also agreed to send a transportation tax proposal
before Missouri voters this fall. The tax would create $511 million in
its first year by raising the general sales tax by a half-cent and the
fuel tax by four cents.
Sponsors of the Missouri stadium bill removed the $644 million economic
development plan from the table late in the session citing insufficient
support. The bill proposed $9.8 million a year for 30 years for Arrowhead
and Kauffman renovations.
Longest Legislative Session in History
Shortly after 3 a.m. on the 106th day of the legislative session, a $252
million tax plan was approved.
The tax package raises the states 4.9-percent sales tax to 5.3 percent.
The cigarette excise tax will jump 46 cents from 24 cents on July 1 and
nine cents more on Jan. 1, 2003. Other changes include an inheritance
tax of up to 15 percent on property inherited by distant relatives and
non-relatives. Corporations will pay double the fees for business conducted
in the state, and sales tax will also be imposed on customized computer
The plan may not be enough to prevent cuts in state aid to schools and
universities. The legislature needed to pass a $300 million tax plan to
fund the $4.4 billion 2003 budget that it approved. Gov. Bill Graves stated
education had been spared, cuts werent out of the question if revenues
come up short.