Reno Gazette-Journal from Reno, Nevada • Page 56

Reno Gazette Journal BUSINESS SaTURBaT OCTOBER 15. 1994 STEVE FALCONE. BUSINESS EDITOR: PHONE. 788-6322; FAX. 788-6458 October 14, lM DOW(lndwinih) NYSE Bonds: A batch of government reports on consumer prices, retail sales and factory production jerked the Treasury bond market around Friday, but in the end traders gave a cautious thumbs up by bidding prices higher.

"It was a Jerry Lee Le is kind of day a whole lot of shakin going on," said Robert Brusca, chief economist for Nikko Securities International Co. The price of the Treasury's main 30' 4-year bond ended up '4-point, or $2.50 per 1 ,000 in face value, while its yield fell to 7.83 percent. Prices and yields move in opposite directions. SAP SOO AMEX PfcWCi NASDAQ Southwest employees honor 'friend' Kelleher DALLAS Employees of Southwest Airlines want the world to know how much they appreciate Chairman Herb Kelleher, who's been known to help lug baggage and dress like the Easter bunny to greet holiday passengers. So the workers Friday ran a full-page ad in USA Today, in honor of Boss's Day.

Employees pitched in to raise $60,000 for the ad. The suggested donation was one hour's salary The ad thanks Kelleher, 63, for "remembering every one of our names," "listening." and "for being a friend, not just a boss." Kelleher recently was speaker in Reno for the Industry Appreciation Luncheon. Southwest has about 1 6.000 employees nationwide. Amfad Financial 21H -H Amaarvlnc. 11 '16 BankAmerica 45 Ctoroi 53 Coeurd'Alana 20 -V Comttock Bank 6 R.R.Donnallay 32 Echo Bay 13 First Interatata 80i FiratMiiaGold 9 First Waitem Fin.

9316 116 FMC Gold 1 Gannett 49 General Motor 47H Vt GlamiaGold 8 Granite Conat. 22 116 Harding 7Va Nevada Power 20H Newmont 42 -H Pacific Teleaia' 30'4 -Vi J.C. Penney 51 Radica Games 5H V4 Reno Air 5316 -316 Rotech 26 -Vs Santa FePac. Gold 14H Sierra Pacific 20 Sierra Tahoe 10'A Southwest Gas 17 US Bancorp 25716 -316 NYSE Diary Arfrapm; 1,023 Declines: 1,054 Unduagtd: 781 Associated FLIGHT CANCELED: British Airways is dropping Concorde flights between London and Washington, the supersonic jet's original U.S. route, because the flights have been attracting fewer passengers.

The jet that had been used in Washington will fly charters for the rich and famous from New York's Kennedy International Airport. Motor Co. said Friday it is Ford Thunderbird Turbo Coupe, XR7 and Merkur XR4ti cars from 986 to '89 to replace catalytic may not meet federal emissions Vehicles registered in California, hich engine calibrations, aren't affected. Maltai windier control 35 ToUl buurt: 2JK1 59 Composite olum: 302,162,330 1993 cwnp. contributor to the CPI's modest growth last month.

Home fuel oil prices fell 0.4 percent and gasoline prices dropped 0.6. In addition, coffee prices stabilized after soaring more than 20 percent in August and July in the wake of a brutal frost Meanwhile, retail sales showed the economy growing strongly as they jumped in September for the fourth straight month, increasing by 0.6 percent to hit a record 1 88.4 billion, the Commerce Department reported. For the third quarter, retail sales are up 7.5 percent over the comparable period a year ago. Excluding autos, a volatile sector that accounts for about a fifth of all sales, total retail sales rose 0.6 percent, following a 0.7 percent increase in August. Washington Post Consumer prices: Rose just 0.2 percent in September.

Providing further evidence that the national economy is purring along without serious inflation, the government reported Friday that consumer prices edged up modestly in September, while retail sales surged and manufacturing production remained relatively strong. The Consumer Price Index rose just 0.2 percent last month on a seasonally adjusted basis after rising 0.3 percent in each of the previous three Carson City landmark to get facelift Kodak agrees to sell subsidiary businesses U.S. consumer price index Percent change from prior month, seasonally adjusted 05 0 4 -01 ONO JFMAMJJAS 1993 1994 Septra Aug. '94 Sept '94 10.1 0.31 0.2 Soun Of, or Labor ucts division to be cast off. Analysts had predicted it would fetch between $400 million and $700 million.

The deal is expected to be completed within a month. It is the fifth large business Kodak has shed this year in a move to refocus resources on photographic and electronic imaging operations. "In less than six months, we have reshaped Kodak," said Chief Executive Officer George Fisher. "We are a smaller company with a stronger balance sheet, focused exclusively on our core imaging businesses." Still on the auction block are a pharmaceutical research and development plant and a small technology development company, both near Philadelphia. Last month, Reckitt Colman PLC of Britain paid $1.55 billion for household products division.

Earlier, Kodak sold its over-the-counter drug businesses to SmithKline Beecham of Britain for $2.93 billion, its prescription drugs to Sanofi of France for 1 .7 billion, and its medical diagnostics unit to Johnson Johnson for $1,008 billion. Kodak is expected to use most of the money to pay down debt, estimated at $6.3 billion as of June 30. V3 0.3 nn nil nn 02 it -x GAMING TOURISM Sheraton delays new Vegas resort LAS VEGAS ITT Sheraton says it is delaying ground breaking for a 750 million Strip resort, hich was scheduled to take place this month. "This postponement is an effort to prioritize the very-sizable investments in the state of Nevada, while providing additional time necessary to evaluate the specifics of the architectural design of the Desert Kingdom project." the company said in a news release. Greg Borgel, a planning consultant for the hotel, said he feels confident the Strip resort will be developed by Sheraton.

Such delays are typical of major projects, he said. "ITT Sheraton wishes to have its flagship operation here in Las Vegas," he said. The company announced plans for the project earlier this year, and set a completion date of early 1997. Vegas Flamingo adds 612 rooms LAS VEGAS The Flamingo Hilton has completed the 28th story of its sixth tower and expects to open the first of the tower's 6 1 2 rooms in January. "I came herein 1976 to oversee the construction of the first tower," said Flamingo Hilton President Horst Dziura.

"Here we are 18 years later about to finish what was started. The new rooms bring the Flamingo Hilton's total 3,642, up from 700 in 1976. The 1 04 million expansion project includes plans for an additional 20,000 square feet of retail shopping, and 1 6,000 square feet of added casino space. GamePlan, tribe end joint venture The Kaibab-Paiute Tribe of Pipe Springs Arizona and Menominee GamePlan, a joint venture between the Menominee Tribe of Wisconsin and Reno-based GamePlan Inc. have agreed to end their consulting arrangement.

"Because of delays in processing the necessary paperwork to the National Indian Gaming Commission, we have mutually agreed to terminate our relationship," Robert G. Berry, president of GamePlan said. "We wish the Tribe every success in the future." Wire service reports il months, the Labor Department reported. The modest increase was due to declines in the price of gasoline, heating oil and apparel, and stabilization in the price 01 coffee. It was the smallest rise since a 0.2 percent gain in May, and came a day after the report of an unexpected drop in September wholesale prices.

Even excluding the volatile food and energy prices, the so-called core CPI rose just 0.2 percent in September after rising 0.3 percent in August. In the first nine months of the year, consumer prices have risen at a modest 2.8 percent annual rate, adjusted for seasonal variations, barely outpacing the 2.7 percent rate in all of 1 993, the department's Bureau of Labor Statistics reported. "The CPI showed inflation cooling down a bit from the previous three i'f' Vj fir the Ormsby House, as it now looks. ORMSBY HOUSE FAST FACTS History: 1972 by former Sen. Paul Laxalt.

He sold it to Woody Loftin in 1978 and Loftin's son Truett inherited the resort in 1985. By 1990, he was faced to file for bankruptcy protection. Capacity: 200 rooms, 30 suites, and three super suites. Employees: It is expected to employ 340 what he needs and how we can assist," Teixeira said. Rausch said some legal hangups that kept the deal from closing earlier were questions about who owned the name "Ormsby I louse" and the familiar gold derrignerand rose logo.

He said a local resident, Bill Works, attempted to acquire the name. Then, he said, he was told bankruptcy trustee Jeri Coppa-Knudsen owned the logo. Rausch said their claims would not hold up in court. "I don't care what they claim," Rausch said. "The logo is mine." Carson City took a $200,000 hit to its budget when the Ormsby 1 louse I IOW Insurance Co.

The company reported a capital and surplus base of $4.2 million, just above the $4 million required by state regulators. I lowever, a consultant hired by the state estimated that HOW's liabilities, including its obligation to pay claims in the future, exceeded its assets by $47.9 million as of June 30. 'r Z- Ford: Ford recalling 87,000 Mercury Cougar model years 1 converters that standards. have different 1 1 1, LOTS OF WORK: The interior of Ml. ROCHESTER, N.Y.

(AP) Eastman Kodak Co. agreed Friday to sell its do-it-yourself products business, maker of Thompson's Water Seal and Red Devil paints, for $700 million in cash. The deal with Forstmann Little a New York-based investment partnership, brings Kodak almost to the end of its speedy divestiture of non-photography subsidiaries. So far, those businesses have raised proceeds of $7.88 billion. They were acquired in the 1980s for around $5.4 billion in an ill-fated diversification that left Kodak with high debt and weak profits.

Taking taxes into account, "you've got well over a billion-dollar gain," said Nicholas Hey-mann, an analyst with NatWest Securities in New York. "They've scored another three-pointer." The news didn't make much of an impression on Wall Street, however. Kodak shares fell $2 to close at $49.50 in Friday's trading on the New York Stock Exchange. The do-it-yourself sector, which also markets Minwax wood stains, Homer Formby's paint remover, specialty enamels and furniture refinishers, was the last part of Kodak's Prod- STOCK MARKET months," said Gary Ciminero, chief economist at Fleet Financial Group in Providence, R.I. However, investors reacted lukewarmly to Friday's reports.

The Dow Jones industrial average gained 20.52 points to 3,910.47, but the broad market was weak: Losers edged winners on the New York Stock Exchange in slow trading. Yields on the benchmark 30-year U.S. Treasury bond dipped to 7.83 percent from 7.85 percent Thursday. Despite the moderate price report, analysts nevertheless believed the Federal Reserve Board would likely increase short-term interest rates in November to head off the possibility of sharp price rises in the future. A 0.7 percent decline in energy prices, attributable in part to a glut of crude oil worldwide, was the biggest 1 Marilyn NewtonGazelle Journal complete closed.

This year an estimated $100,000 was lost in room taxes and almost $100,000 in property taxes, which are divided among various accounts including parks and recreation and the Carson City Redevelopment Authority. There is a lot of work ahead. The once classy hotel closed with broken bathroom tiles, busted water pipes, and some rooms in shambles. But Rausch said the building itself is a Cadillac, built with the finest materials. Inside the rooms, he will keep the dressers, tables, and chairs.

He will replace televisions, carpet, wallpaper, lights and lamps. Silverton plans to spend almost $5 million on work in and out of the hotel. The work will be done in three major stages in two years. Stage 1: Hotel rooms on floors 1, 2 and 4 through restaurants and bars. Stage 2: Casino, suites and ballroom.

Stage 3: Moving the porte co-chere from the Highway 395 entrance to the the Seventh Street entrance, swimming pool deck and weight room and third-floor offices. "I'm a specialist in taking old property and turning it around," Rausch said. "It takes a strong outlook into the HOW Insurance HOW insures the warranties of nearly I million homes across the country for a total of 1 1 0 billion. The company is owned by about homebuilders. Roberts said possibilities for returning the insurer to financial stability include an infusion of capital from builders or selling the company.

Ormsby House sale Weakened proposal offered for disclosing derivatives deals By Monica Mendoza GAZETTE-JOURNAL CARSON CITY The long-awaited sale of the Ormsby House was completed Friday, opening the doors for cleanup crews to begin work preparing for the expected January opening. Carson City's largest hotel-casino closed in January 1993 when bankruptcy brought the hotel to its knees. Months of uncertainty ended when an offer was made by Barry Sil-verton of Pacific Malibu Development of Southern California. Stewart Title Co. filed a declaration at the City Recorder's Office Friday listing the value as $4.5 million.

Silverton and his partner Rudy Rausch of Innkeepers International in Reno have promised to open the hotel and restaurants by the start of the 1995 Nevada Legislature, but it most likely will open without the slots and gaming tables, Rausch said. "The papers are being filled out now (for a gaming license)," Rausch said. "It's a longer process then I thought. We may have to bring in an outside operator." Carson City Mayor Marv Teixeira said city officials will meet with Rausch next week to discuss remodeling plans. "We will want to define exactly NEW YORK (AP) Responding to complaints it would be too difficult to comply, the nation's chief rule-making board for accountants has weakened a proposal that would have compelled companies to disclose financial details of their risky derivatives transactions.

The Financial Accounting Standards Board earlier this month decided to drop a requirement that companies include in financial reports the maximum and minimum value of derivatives positions during the year and the net gain and loss. The information was considered important to investors who have been shocked this year by big losses at Procter Gamble Gibson Greetings Inc. and other American companies that lost millions of dollars from speculative bets unrelated to their main businesses. Derivatives are transactions between two parties whose returns are based on, or derived from, some underlying asset or index. While corporations for years have used derivatives to reduce risk, big losses disclosed this year show that their use has strayed from pure hedging tools.

John Lonski, senior economist at Moody's Investors Service said Friday the decision to amend the proposal sends another warning signal to investors. "What's troubling is that treasurers don't have a firm grasp at all times regarding the market value of their derivatives exposure," Lonski said. "The regulators have thrown their arms up and admitted these are very difficult products to price accurately, and therefore it would be difficult for the company to continuously provide for an accurate accounting of their exposure to derivatives." The rule, originally proposed in April, would still require companies to include more information on the type of potentially risky securities in which they hold positions. In addition, companies would be encouraged, but not required, to project the risks of these transactions for example, how much money they could lose or gain from various market scenarios. 1 Virginia regulators get control of Ameristar 8V4 Aztar 6 Bally Gaming 13V2 -V Bally Enter.

7V4 Boomtown 16 Caesars World 433 V2 Casino Data Sys. 22 Circus Circus 22 Grand Casinos 13 Harveys 12' -Vs Hilton Hotels 59 -V2 IGT 20Ve Jackpot Ent 9 MGM Grand 29 Mikohn Gaming 10 Mirage 23 Vj Monarch Primadonna 31Vi PromusCos. 32 Rio Hotel 1314 Sahara Gaming 5 Sands Regent 9 Showboat 13 Sodak 17 United Gaming 6 USA Capital Composite Gaming Index 136 24 0 62 I 4 RICHMOND, Va. (AP) The nation's leading insurer of new home warranties agreed Friday to an order giving state regulators control of the company until its financial troubles are solved or a buyer is found. The order, signed by Richmond Circuit Judge Melvin R.

Hughes makes the State Corporation Commission the permanent receiver for.