Business Digest

BUSINESS DIGEST

June 07, 2005

In the Region

Cablevision cancels Lockheed contract for five satellites

Cablevision Systems Corp., the largest cable-television provider in the New York area, has canceled a 2004 contract with Lockheed Martin Corp. of Bethesda to build five satellites for its Voom television operation.

Cablevision had agreed to pay $740 million over four years to Lockheed for the satellites and related equipment, according to a Securities and Exchange Commission filing. Terms of the cancellation weren't disclosed.

Cablevision discontinued the satellite service April 30, ending an effort by Chairman Charles Dolan, 78, to keep it going against the wishes of his son James, 50, the company's chief executive. Voom lost the company about $1.4 billion, according to estimates by Jessica Reif Cohen, an analyst at Merrill Lynch & Co. Inc.

Jos. A. Bank's earnings rose 27% in quarter

Jos. A. Bank Clothiers Inc. reported yesterday a 27 percent increase in fiscal first-quarter earnings.

Net income increased to $6.7 million, or 47 cents per share, from $5.3 million, or 37 cents per share, in the fiscal first quarter last year. Comparable-store sales for the quarter that ended April 30 increased 4.1 percent, and catalog and Internet sales increased 26.4 percent.

The Hampstead-based men's clothing chain opened six new stores during the quarter and said it is on target to open 60 to 75 stores this fiscal year.

Sylvan Learning to offer live tutoring online

Sylvan Learning Center, a division of Educate Inc. of Baltimore, said yesterday that it would begin offering live tutoring online.

The service will allow students to work one-on-one with an instructor using a headset and a digital notepad from a computer at home. Prices, which are the same as on-site tutoring, range from $42 to $48 an hour.

The company has been offering supplemental tutoring at retail locations for more than 25 years. Educate bought the tutoring division from Sylvan Learning Systems in July 2003.

Elsewhere

Merger to create world's largest warehouse network

ProLogis has agreed to buy rival real estate investment trust Catellus Development Corp. for $3.6 billion in a cash and stock deal that will create the world's largest network of warehouses and distribution services.

The combined company will control more than 2,250 facilities with 350 million square feet in North America, Asia and Europe. It will also consist of more than 100 million square feet of potentially developable land, the companies said in announcing the deal yesterday.

Shareholders of Catellus of San Francisco will have the choice of receiving $33.81 in cash or 0.822 of a ProLogis common share for each Catellus share. That's a 16 percent premium to Catellus' Friday closing price of $29.24.

ProLogis, based in the Denver suburb Aurora, will also assume $1.3 billion in Catellus debt and transaction costs as part of the deal.

Adelphia, partner selling Puerto Rico cable venture

Adelphia Communications Corp. and ML Media Partners LP have agreed to sell their jointly owned cable operations in the San Juan, Puerto Rico, area to a private-equity venture between MidOcean Partners and Crestview Partners for $520 million.

The system serves about 137,000 customers in the greater San Juan area.

Since September 2002, the joint venture between cable television company Adelphia and ML Media Partners that owns and operates the Puerto Rico systems has been under Chapter 11 bankruptcy protection, administered separately from the larger Chapter 11 bankruptcy of Adelphia.

The Puerto Rico joint venture was not included in the previously announced asset sale of Adelphia to Comcast Corp. and Time Warner Inc. for about $17.6 billion in cash and stock.

5 airlines reverse boost in fares started by United

United Airlines, American Airlines and Northwest Airlines Corp. reversed a $10 to $20 roundtrip fare increase started by United last week, one of seven ticket price boosts this year.

United, the world's second-largest airline, cut its fares yesterday after American, the largest carrier, and Northwest reversed increases Sunday, said Terry Trippler, who monitors fares for CheapSeats.com.

Continental Airlines Inc. and US Airways Group Inc. also reversed the increase. Delta Air Lines Inc. still has the higher fares, Trippler said.

Junk bond default rate rose again last month

The global junk-bond default rate rose further last month after hitting an eight-year low in March as a rising number of new issues with lower credit ratings increases the risk of default, Standard & Poor's said yesterday.

The speculative-grade default rate increased to 1.68 percent of issuers at the end of May, from 1.64 percent in April and 1.52 percent in March, the New York-based rating company said. Speculative-grade or junk bonds provide higher yields to investors than investment-grade bonds, to compensate for the higher risk of default by the issuer.

AOL plans to provide unlimited e-mail storage

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