Arizona Republic from Phoenix, Arizona • Page 12

The Arizona Republic SECTION Business Obituariesc? FRIDAY SEPTEMBER 20, 1991 News Briefs Dow gains 6.48 Study: black, white wages still unequal College degree helps a little 7,.., 1 fVV, sV if 'X The Dow Jones average of 30 industrials rose 6.48 to 3,024.37. Further details appear in chart at bottom of page. Story on Page C4. Jobless claims ease The number of Americans filing new claims for jobless benefits fell in early September, but the drop was largely dismissed as a fluke caused by a shortened work week rather than any hiring rebound. The Labor Department said there were 402,000 Americans filing first-time claims in the week ending Sept.

7, a 17,000 decrease from the previous week and the lowest level since the last week of July, when there were 400,000 new applicants. It also was the biggest improvement since a 21,000 decline in late July. However, because the week included Labor Day and people had only four days to file claims, analysts hesitated to read too much into the decline. SALARY DISPARITIES Average annual earnings of tull-limc workers 25 years of age and over by education, race and sex. Four years of high school Four or more years of college 52-WEEK 3LS CI $50 T-bill rates plunge Interest rates on 52-week Treasury bills fell in Thursday's auction to the lowest level in more than 14 years.

The average discount rate was 5.26 percent, down from 5.36 percent at at the previous auction Aug. 22 and the lowest since a 5.16 percent average April 27, 1977. The bills will carry an equivalent coupon interest rate of 5.57 percent, with each $10,000 in In thousands $40 $30 By Tim Bovee The Associated Press WASHINGTON College-educated white men are paid nearly one-third a year more than black men with similar educations, the Census Bureau said Thursday. The study, conducted in 1989 and 1990, indicates that blacks are economically behind whites by almost every measure. Higher education moves blacks ahead of less-educated whites, but blacks still lack the earning power of whites of equal education.

Black men 25 and older with four years or more of college on average were paid $31,380 in 1989. White men of equal education were paid $41,090. The gap between black and white women age 25 and older was narrower. College-educated black women were paid white women, $27,440. Among people 25 and older with four years of high school but no college, black men were paid white men, black women, white women, $16,910.

Ronald Walters, chairman of the political-science department at Howard University in Washington, said the figures deal "a devastating blow" to the idea that race is declining in See UNEQUAL, page C2 Ft $20 $10 0 Li. MF MF MF MF BLACKS WHITES Source S. Department of Commerce The Arizona Republic face value selling for $9,468.20. Sales totaled $12.55 billion out of bids of $34.63 billion. Money-fund assests, yields tumble Assets of the nation's 559 money-market mutual funds fell $2.37 billion, to $460.85 billion, in the latest week, the Investment Company Institute said Thursday.

At the same time, the seven-day average yield on the funds fell to 5.21 percent from 5.26 percent the previous week, and the 30-day yield fell to 5.27 percent from 5.30 percent, Donoghue's Money Fund Report said. The average maturity of the portfolios held by money funds was 60 days, up from 59 days, Donoghue's said. Florida bank seized Federal regulators said Thursday they are rescuing Southeast Banking Florida's second-largest bank, at a cost to the government's insurance fund of $350 million. First Union Corp. of Charlotte, N.C., the nation's 16th-largest banking company, will take over Southeast's $8 billion in deposits and its 224 branch offices throughout Florida, the Federal Deposit Insurance Corp.

said. Money supply mixed The two broadest measures of the nation's money supply moved in opposite directions in the week ended Sept. 9, the Federal Reserve Board reported Thursday. The Fed said the measure known as M2 rose to a seasonally adjusted $3.3904 trillion from $3.3878 trillion the previous week. A broader measure, M3, fell to $4.1375 trillion from $4,138 trillion.

The narrowest measure, Ml, fell to $866.7 billion from $867.1 billion. Oil-price declines The October futures price for light, sweet crude, the world bench-mark crude, fell 8 cents per barrel, to $21.76, on the New York Mercantile Exchange. Financial markets The dollar was mixed in light trading Thursday, closing in New York at 134.40 yen, unchanged from Wednesday; at 1.6885 marks, up from 1.6845; and at 1.13525 Canadian dollars, down from 1.13715. On the New York Commodity Exchange, gold for current delivery was quoted at $348.30 John SamoraThe Arizona Republic Jim Devlin accuses Biomin Laboratories and his former business associates of violating non-compete and other agreements. Devlin is displaying a plate of pollen.

A STICKY MESS Bee-pollen firms file lawsuit, countersuit to settle fuss over payments, competition Sedona resort, creditors settle By Betty Beard The Arizona Republic The Los Abrigados time-share resort in Sedona has completed a U.S. Bankruptcy Court reorganization with the help of $4.6 million put up by new investors. Its largest debt, $23 million owed to the federal Resolution Trust was settled for $9 million, said Nancy Stone, president of the resort's majority owner, Phoenix-based International Leisure Inc. Bankruptcy Judge George Nielsen Jr. signed an order in late August By Alan Thurber The Arizona Republic A dispute among the makers and sellers of bee-pollen products has stirred up a hornet's nest that has landed in Maricopa County Superior Court.

Biomin Laboratories is suing Mr. Bee Pollen, which is suing Biomin and the principals of Bee Wonderful. The events that have set the pollen community buzzing began last spring when the top distributor for Mr. Bee Pollen, a Scottsdale firm that normally has millions of dollars of sales annually, quit. Then Biomin, which had been a supplier of products to Mr.

Bee Pollen for nine years, sued the firm for non-payment. About the same time, a new company called Bee Wonderful began operations three blocks from Mr. Bee Pollen at Scottsdale Airpark. It was led by the former top distributor and three key former members of the Mr. Bee Pollen organization the general manager, controller and shipping See POLLEN, page C2 confirming the Chapter 1 1 reorganization.

About 300 creditors were paid off with shares of preferred stock, and about 100 were paid off with payments of up to $100, regardless of how much they were owed, Stone said. The 1 75-suite resort twice has faced serious financial trouble since it opened in April 1986. It was developed by Red Rock Resorts, an affiliate of Phoenix-based Paragon See SEDONA, page C6 Phoenix aides to visit Asia trip may be free But it is the possibility of bringing global flights to Phoenix that excites Johnson. "If we bring international flights into Phoenix we'll change the face of the Phoenix economy forever," he said. Johnson said he has spoken by phone with some of the Asian airline officials.

The Taipei City Symphony Orchestra of Taiwan played in Phoenix in March, and Korean Air Lines officials attended the Iceberg Phoenix Grand Prix. "We're fairly certain that the relationships we've established will net us international flights into Phoenix over the next decade," Johnson said. Taipei is having a celebration with all of its sister cities and has invited Phoenix officials to attend. Taipei will pay up to $2,300 for each plane ticket, Wilson said, but the cost probably will be less. The Phoenix Aviation Department might have to pay for flights between Taipei and Seoul, Wilson said.

However, arrangements might be made so Seoul is a layover on the way to Taiwan. Round-trip tickets for a separate flight to Seoul, if necessary, probably would cost "a couple hundred dollars" per person, Wilson said. While in Taipei, the three will talk with Taiwan's president. They also have sought meetings with the chief executives of two airlines, China Air and EVA, Wilson said. In Seoul, they will meet with the chief executives of Korean Air Lines and Asiana Air Lines.

They also will take part in Visit USA, South Korea's largest tourism convention, in which Arizona is this year's featured U.S. state, Wilson said. "Korea is one of the strongest, emerging, traveling tourist markets in Asia because of their strong economic growth," Wilson said. "They will become the new Japan, in terms of tourism." By Bill Goodykoontz The Arizona Republic Three Phoenix officials will travel to Asia next month in an attempt to bring international flights to the city and boost tourism to Arizona and it may cost taxpayers nothing. Mayor Paul Johnson, Vice Mayor Alan Kennedy and Doug Wilson, the city's protocol chief, will leave for Taipei, Taiwan, and Seoul on Oct.

4 and return Oct. 14. The tab for the airfare and hotel accommodations is being picked up by Taipei, a Phoenix sister city, Johnson said. per troy ounce, up 30 cents, while silver was quoted at $4,066 per troy ounce, down from $4.08. The federal-funds market rate, the interest rate on overnight interbank loans, ended Thursday at 5.375 percent, up from 4.50 percent.

At a glance Main St. Main Inc. of Scottsdale named South Korean industrialist J.Y. Lee to its board of directors. Lee is president of LG Credit Card Co.

the Mastercard affiliate for South Korea. Travel, a Phoenix travel agency, will become Prism Travel on Sept. 30. Warner Publishing announced a restructuring program including elimination of about 600 jobs, or 10 percent of the work force, at its magazine division, in a move to save more than $30 million a year. AlphaGraphics Printshops of the Future has received $3 million worth of guarantees from the U.S.

Agency for International Development for $6 million in loans to help franchisees establish shops in developing countries over the next 12 months. The company said it plans to use the money in Hungary, Poland, Venezuela and Chile. Looking to make more money from instant pictures, Polaroid Corp. introduced a new type of film designed to close the gap in quality with conventional film. 'one-time losses' keep recurring Compiled from reports by The Arizona Republic, The Associated Press and Knight-Ridder.

THE MARKETS Trading activity for Thursday. Dow Jones industrial average Hi Th 3,100 i i i i 1 1 ALLAN SLOAN New York Newsday payments on them to operations rather than take one big charge. Taking a one-time loss means lower earnings now, higher earnings later. Why are lots of leases a one-time loss when a few leases are an operating expense? Ragland's answer: There are so many, that their cost makes it difficult for investors to divine true profitability. He gives the same answer for the decision to make a one-time charge for five years of special payments to the Alaska phone company rather than charging the payments to operating income each year.

You can also argue, as I do, that has tried to fix its equipment business for years, and the expenses are recurring. Ragland disagrees. If I were a betting man, I'd say that big non-recurring losses are going to keep right on recurring. My favorite candidate for the next one is NCR, which already has announced that its earnings projections were too high. Not a good sign.

So don't be surprised if another shoe drops in 1992 or 1993. events. Even though there has been a recurring pattern of non-recurring charges, Ragland argues that each charge was proper, part of the fallout from changing a big, old company from a regulated monopoly to a competitor. Let's look at this year's loss. is charging $1.5 billion for expenses connected with buying NCR another $1.5 billion for trying once again to fix its money-losing equipment business, $300 million for subsidy payments to a phone company in Alaska, and $700 million for truscellaneous, most of which seems to be lease payments on underused facilities.

Let's be sports and say that the $1.5 billion is money wouldn't have spent had it not bought NCR. 'Recurring' one-time losses But look at the other $2.5 billion, starting with the underused facilities. Ragland concedes that if were stuck with a few surplus leased properties, it would charge the lease share earnings since the Bell breakup fall about $2 billion below the dividends it has paid out. If you don't believe that, do the math. Earnings since the start of 1984 total $7.01 a share; dividends total $9.18.

Dipping into net worth In other words, has been dipping into its net worth to pay its dividend. And the recurring pattern of reporting several years of profits, then showing a one-time loss, makes me wonder whether quarterly or even annual reported profits mean anything at all. Enter Bernie Ragland, chief accountant. Ragland, a bright and gracious fellow, spent two hours with me discussing the meaning of profits and other accounting metaphysics. To grossly oversimplify, Ragland says the $3 billion 1986 hit, the $6.7 billion 1988 hit and the $4 billion hit this year were all one-time What in the world is up to? The company seems to announce huge one-time losses every-few years, almost like clockwork.

If this keeps on, is going to have to adopt the centipede as a corporate symbol. Last month, it announced that it was taking $4 billion in losses, wiping out most of its profits for the year. This makes three times in the eight years since the breakup of the Bell System that has announced three special losses, which now total nearly $14 billion. Wall Street, in its wisdom, thought the $4 billion hit was just dandy and ran stock up. Why? Because The Street felt that the write-offs would increase future earnings.

Which, in fact they will. But this makes you wonder whether Wall Street's obsession, with reported profits blinds it to underlying economic reality. Because, you see, after you subtract the $4 billion hit call it $2.64 billion, after taxes, or $2.40 a NYSE Composite volume 249,930,830 Issues traded 2,124 Advanced 906 Declined 650 Unchanged 568 New highs 121 New lows 19 3,050 3,000 AA jH T7i 2,960 yf- 2,900 Vf- 2,850 i 3,024.371 I 46.48 I 2.800 I I 2.750: I I LOW 9 twit i i 1 1 1 1 12 1S 1 17 It Sept. Amex Comp. NYSE 0.62 to 0.51 to 212.74 387.56 The Arizona Republic.