Program: Monday, December 1, 2003

Boeing CEO Phil Condit Steps Down Under Duress
Disney Vice President Roy Disney Resigns
Black Friday Has Retailers Seeing Green For The Holidays
The FCC Considers Regulating Web Calls
Paul Kangas' Stocks In The News
Market Stats

12/01/03: Boeing CEO Phil Condit Steps Down Under Duress

SUSIE GHARIB: Here at the New York Stock Exchange, the big board has kicked off its holiday celebrations, and that`s the caroling you hear behind me. Now topping today`s news: a day of drama in the board rooms of two of the nation`s biggest blue chip companies. Boeing and the Walt Disney Company both announced major changes. First, Boeing. Chairman and CEO Phil Condit resigned under pressure, following an ethics scandal and problems in some of Boeing`s business units. Condit will be succeeded by former McDonnell Douglas CEO Harry Stonecipher, who retired from Boeing last year. Diane Eastabrook reports.

DIANE EASTABROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT: Phil Condit says a great deal of discussion and soul searching prompted him to resign as Boeing`s chairman and CEO. The board responded by saying: "We accepted his decision with sadness, but also with the knowledge that changes needed to be made." Condit`s resignation comes one week after Boeing`s chief financial officer was fired in an ethics scandal for speaking with a Pentagon official about future employment while that official was in a position to influence defense contracts with the company. That executive was hired by Boeing, and fired last week as well. Experts say a handful of recent problems that have tarnished Boeing`s image left the board no other option than to get rid of Condit.

STEVEN KAPLAN, FINANCE PROFESSOR, UNIVERSITY OF CHICAGO: Today, if you`re a board, when you see something that`s not quite right, I think there is going to be a tendency to act more quickly, and they appear to have done so.

EASTABROOK: Sixty-seven-year-old Harry Stonecipher becomes Boeing`s new president and CEO. He retired last year as Boeing`s vice chairman, and has served on the company`s board for six years. Sixty-two-year-old Lewis Platt becomes Boeing`s new non-executive chairman. Platt is the former chairman and CEO of Hewlett-Packard (HPQ), and has been on Boeing`s board of directors for four years. Analysts say Stonecipher faces many challenges at Boeing. He needs to repair the company`s image with the government, not only for the hiring scandal, but for acquiring confidential documents from competitor Lockheed Martin (LMT) in a bid for Air Force business. Some of Boeing`s businesses are also struggling, especially the commercial airline unit, which is facing tough competition from Europe`s Airbus. Stonecipher says he has no plans to alter Boeing`s overall strategy. That`s good news to Deutsche Bank analyst Christopher Mecray (ph), whose firm has an investment banking relationship with Boeing. Mecray says Boeing doesn`t need an operational overhaul, but it does need an image makeover.

CHRISTOPHER MECRAY, AEROSPACE ANALYST, DEUTSCHE BANK: Financially they`re stable and healthy. The outlook in 2004 is quite stable, and I don`t think it requires any radical adjustments when he comes in. What he`s doing is presenting is a continuum from a strategic standpoint, a face that is well understood and well known by Wall Street by their customers.

EASTABROOK: Condit will help Stonecipher and Platt with the leadership transition over the next few months. But he will not remain as a Boeing board member. Diane Eastabrook, NIGHTLY BUSINESS REPORT, Chicago.

GHARIB: Earlier today I talked to outgoing Chairman and CEO Phil Condit and Harry Stonecipher, his replacement. I began by asking Condit why he resigned now and whether there was a specific event that triggered his decision. Mr. Condit, let me begin with you. My first question to you is: why now? Why this decision now? Was there any specific triggering event that was behind your decision to resign?

PHIL CONDIT, FORMER CHMN. & CEO, BOEING: No, there was no specific triggering event. It was a set of events, a particular set of conditions, where I arrived at the conclusion that it might be better for the company going ahead if I were to step aside. And given that, I offered the board my resignation.

GHARIB: Mr. Condit, you talked to analysts on a conference call today, and here you are now sitting next to Mr. Stonecipher, who`s going to be replacing you as CEO, this is very unusual for a CEO who has just resigned. So is the issue here mostly about image and that`s why you decided to leave the company?

CONDIT: It really is image of the company that I`m most concerned about. I`ve spent 38 1/2 years with this company. I care about it and its people very deeply. And I want nothing more than for this company to be successful. And if a change will help that happen, that`s what I wanted to see happen. So that was really the issue.

GHARIB: Mr. Stonecipher, there have been a number of high-profile management changes recently, Chief Financial Officer Mike Sears being fired, and now Phil Condit resigning as CEO, suggesting that something is not working at Boeing. What do you think needs to be done to fix Boeing?

HARRY STONECIPHER, PRES. & CEO, BOEING: Well, as I think Phil commented that there was a series of events and a situation that brought this conclusion - brought to us this conclusion, that number one, we simply have to focus more on execution and be sure that we are focused on strengthening our relationship with our biggest customer, the U.S. government, which it`s a bit tarnished right now it seems. And so, you know, it`s individuals that have brought us here. This is a great company, it has got a great strategy, it`s a good, strong company, and so it`s the behavior of individuals that has to change.

GHARIB: There is this perception, Mr. Stonecipher, that your focus is on the defense and military side of the business and that the commercial airplane side of the business is less of a priority. What is your view of the commercial airplane side of Boeing?

STONECIPHER: The commercial airplane side of Boeing has been operating very, very well. They`ve taken the situation in a market that`s been in the tank since 9/11, certainly, and the performance of the commercial airplane company has been really outstanding. And I commented in one interview today that Alan Mulally and his team really don`t need much help from me right now other than helping them with the 7E7 and getting it through the board meeting and all that which I`m happy to do, and so they`ll be just fine. I intend to concentrate right now on the defense and space business because that`s where we have a lot of things at risk and we need to get that straightened out.

GHARIB: We see that Airbus continues to gain market share from traditional Boeing customers and the latest example was the Qantas order today from Airbus. How can you get going - Boeing back to being the leading supplier of commercial airplanes?

STONECIPHER: By having the right products that customers want, being sure they are of the highest quality and we have the highest service, and that we can give them to them for a fair price.

GHARIB: Mr. Condit, looking back at your many years as chief executive officer, certainly there were things that were beyond your control. But as you look back, what would you say were your biggest successes and your biggest failures?

CONDIT: My biggest successes, the first would be the strategy that put Boeing on the path to having a strong commercial business and a strong defense business and having them work together. And we have built that kind of a company. It is the biggest and I think the best aerospace company in the world. The 777 program, I got the opportunity to launch that program. It has been an enormous success, and it really has changed the way we do business. I can`t put my finger on any one thing that I would say, boy, I would do that differently. You go in, you do exactly what you think is the right thing. I`ve always said that I wanted to be able to do the right thing wherever I was, whatever I was doing. And I felt like I`ve done that.

GHARIB: Mr. Stonecipher, you said today that in your new role as CEO you plan to stick around for a while. And I ask you this respectfully because the issue of your age has come up: What is your timetable, and what are the succession plans at Boeing?

STONECIPHER: I don`t have a timetable, and succession is a process that`s been in place here for a long time over all of our senior executives, and it gets reviewed on a regular basis with the board and will continue to do so. And I - you know, I`m in the job now, and I intend to stay here until the board decides that it doesn`t want me here anymore.

GHARIB: Let me ask you one last question about Boeing`s stock. You obviously have a personal stake in Boeing. I was told that you own more than a million shares. Do you think that the stock is at its full potential?

STONECIPHER: Absolutely not. And that`s - you know, that`s what we have to change. And it will change very rapidly once we start down the road of having people being able to predict behavior and count on the really outstanding integrity and ethical processes that the Boeing Company has had and has followed in the past. And if we don`t like where we are right now, we`re going to change it.

GHARIB: Gentlemen, thank you very much for joining us. Mr. Condit, Mr. Stonecipher, good luck to you both.

CONDIT: All right. Thank you.

Nightly Business Report transcripts are available on-line post broadcast. The program is transcribed by eMediaMillWorks. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc. Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. Copyright (c) 2003 Community Television Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.

12/01/03: Disney Vice President Roy Disney Resigns

SUSIE GHARIB: Meanwhile, two longtime Walt Disney board members have abruptly resigned, including the nephew of founder Walt Disney. Vice Chairman Roy Disney was the first to step down, calling for the ouster of Chairman and CEO Michael Eisner. Then late today, Stanley Gold, Roy Disney`s business partner, also resigned, criticizing Eisner`s leadership. They blame Eisner for sagging ratings at the ABC TV network, poor performance at Disney theme parks, and low company morale. But analysts are skeptical whether the pressure will be enough to force Eisner out.

PETER MIRSKY, MEDIA ANALYST, OPPENHEIMER: Disney and Eisner have been at loggerheads for some time now. It`s well known that Disney brought Eisner onto the board, but in the last several years they`ve had a falling out. The question is really how much control does Eisner have over the board, I would say he does seem to have a fair amount of control and a fair amount of support.

GHARIB: Late today a group of independent Disney board members said that Roy Disney and Stanley Gold were on a disruptive course in calling for Eisner`s resignation, and doing a did disservice to shareholders and employees.

Nightly Business Report transcripts are available on-line post broadcast. The program is transcribed by eMediaMillWorks. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc. Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. Copyright (c) 2003 Community Television Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.

12/01/03: Black Friday Has Retailers Seeing Green For The Holidays

SUSIE GHARIB: Some encouraging news today for America`s retailers and the U.S. economy. Consumers hit the stores over the holiday weekend, and cash registers were ringing. Suzanne Pratt takes a look a whether the healthy sales can be sustained.

SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: Thanks to a busy weekend of shopping, retailers are upbeat about the holiday season. According to a National Retail Federation survey, nearly 72 percent of Americans hit the stores over the Thanksgiving weekend, the traditional start to the holiday shopping season.

ELLEN TOLLEY, SPOKESPERSON, NATL. RETAIL FEDERATION: Consumers have a little more money in their pockets this year, and they are more willing to spend. Last year consumers were concerned about war, they were concerned about their jobs, they were concerned about their stocks.

PRATT: Discounters remained the most popular destination, followed by department and then specialty stores. But nearly a third of all Americans stayed home and did their shopping online. Still, retailers have learned that a strong Thanksgiving weekend could mean little for the rest of the season. Last year, sales fizzled after a solid start. Nevertheless, analysts are still positive about this year, predicting a 4 to 6 percent increase in total sales.

MARK MANDEL, RETAIL ANALYST, BLAYLOCK & PARTNERS: I think in general, you know, it was a decent start to the season, I think its one that offers a lot of retailers encouragement or optimism that the season will be reasonable healthy.

PRATT: But already there are some worrisome signs. Analysts were disappointed by the Black Friday sales figures at Wal-Mart (WMT). The nation`s largest retailer reported a 6 percent gain in year-over-year sales. But that was well below the prior year`s 14 percent increase.

MANDEL: Their outlook for this Christmas season is one of moderate gains, and with the gains basically coming from the fact that last year was so poor. So they`re certainly not looking for anything that would come close to being very strong.

PRATT: Wal-Mart and other retailers release their November sales figures on Thursday. Analysts believe those numbers, which look at four weeks, are a better gauge of how the holiday shopping season will shape up. Suzanne Pratt, NIGHTLY BUSINESS REPORT, New York.

Nightly Business Report transcripts are available on-line post broadcast. The program is transcribed by eMediaMillWorks. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc. Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. Copyright (c) 2003 Community Television Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.

12/01/03: The FCC Considers Regulating Web Calls

PAUL KANGAS: The Federal Communication Commission today took up the issue of regulating phone calls made over the Internet. Most traditional phone calls are subject to a slew of rules, fees, and taxes, but not over the Web. With more and more companies like Vonage routing calls through the Internet, the question is whether those rules should apply. The head of the FCC thinks old regulations don`t belong on new technology.

MICHAEL POWELL, FCC CHAIRMAN: And I would urge that collectively we insist that no regulatory prescription be ordered without first showing it`s needed. In other words, the burden should rest with those who want regulation extended to prove that it is needed, not on American entrepreneurs to prove that it is not.

KANGAS: Some states are already regulating Web calls like traditional ones. Those situations are being challenged in court.

Nightly Business Report transcripts are available on-line post broadcast. The program is transcribed by eMediaMillWorks. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc. Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. Copyright (c) 2003 Community Television Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.

12/01/03: "Paul Kangas' Stocks In The News"

PAUL KANGAS: December on Wall Street began with a flurry of buying on signs the economic recovery is in full swing. After an hour of trading, the Dow was up 70 points and the NASDAQ Index up 21 on good holiday retail sales and two new economic reports, that`s what helped the buying. The Institute of Supply Management`s November manufacturing index jumped to 62.8 from 57 in October, and October construction spending rose 0.9 percent to a record high. At mid-day, the Dow was up 103 points, the NASDAQ up 24. Some profit-taking put a dent in the market`s advance mid-afternoon, but it made a comeback, so the Dow gained 116.5 points at the final bell, that`s 1.2 percent. It now stands at 9899.05, an 18-month high. The NASDAQ Composite rose 29.5 points or 1.5 percent, to 1989.82, its highest point in almost two years. Standard & Poor`s 500 gained nearly 12 points, an 18-month high. Over in the bond market, the 10-year note fell 13/32 to 98 29/32, lifting the yield to 98 and - lifting the yield to 4.39 percent, I should say.

The most active big board issue on 17.2 million shares, AT&T Wireless (AWE), down $0.16.

Then Wal-Mart (WMT) off $1.14. You just heard some disappointment with its sales. J.P. Morgan was disappointed by the company`s electronics sales so far for the holiday.

GE (GE) up $0.36.

Followed by Pfizer (PFE), a $0.62-gain.

No change in Lucent Technologies (LU), fifth in big board volume.

Merck (MRK) was up $1.48. The company is in a partnership with Neurogen (NRGN) to develop a new class of painkillers. Neurogen on NASDAQ jumped $4.09 to $10.47. Also Prudential Securities says Merck`s cervical cancer vaccine may get to the market sooner than expected and could have $3 billion in annual sales.

Time Warner (TWX) up $0.21.

NorTel Networks (NT) edged up $0.08.

Hewlett-Packard (HPQ) a $0.15 gain.

ExxonMobil (XOM), tenth in volume, was up $0.22.

DuPont (DD) up $1.24. The company says it`s going to cut more jobs and also cut expenses. And it should save $1.3 billion over the next two years.

Another Dow stock, International Paper (IP), up $1.54. Deutsche Bank Securities upgraded it from hold to buy with a $50 a share target.

And of course, Boeing (BA), which is a Dow stock, down $0.37. Not that much of a reaction to the management shake-out you just heard about.

And Disney (DIS) actually moved higher, up $0.08 despite the resignation of Roy Disney and another director and - as he called Eisner`s resignation, the stock moved up $0.08.

Perot Systems (PER), one of the better percentage gainers, up $1.97. Jefferies & Company brokerage upgraded it from hold to buy due to an improving demand for information technology.

Chinese stocks did well again today. Aluminum Corp. of China (ACH) up another $5.94. It was up over $3 Friday on positive comments from a Well Fargo mutual fund manager. And today it got another boost from an article about Chinese stocks in the weekend London "Financial Times." That helped a lot of other China stocks like: Brilliance China (CBA), up $6.36, Brilliance also helped by a forecast that its joint venture with BMW in China will be profitable next year; Petrochina (PTR); and Sinopec Beijing (BYH) both good gainers as well.

Outback Steakhouse (OSI) up $2.24. November same-store sales up a very respectable 4.8 percent. And Bank of America increased its fourth-quarter earnings estimate for Outback by a penny, up $0.57 a share.

D.R. Horton (DHI), the homebuilder, up $1.36. The company has declared a three-for-two stock split and reaffirmed first-quarter earnings guidance at $0.60 to $0.63 a share. That`s on the split shares.

Consolidated Energy (CNX) lost $1.36. The company cut its 2003 forecast from earnings of $0.37 all the way down to loss of $0.02 to $0.05 a share. The company cites lower-than-expected coal production as well as lower-than-expected coal sales.

NASDAQ`s most active, Microsoft (MSFT), up $0.13.

Followed by Intel (INTC), a half dollar gain there.

Cisco (CSCO) up $0.48.

Applied Materials (AMAT) dropped $0.03.

Amgen (AMGN) gained $1.61.

And Oracle (ORCL) gained $0.49.

A $0.68-rise in Amazon.com (AMZN).

Nextel (NXTL) rose nearly a dollar.

Yahoo! (YHOO) up $1.22.

And eBay (EBAY) gained exactly a dollar, tenth in NASDAQ volume.

Elsewhere, Protein Design Labs (PDLI) up $3.16, almost a 23 percent gain there. The company and Genentech (DNA) have settled patent litigation. And the two companies will share profits from three different drugs.

And 8x8 (EGHT), down $1.55. The whole group of voiceover Internet protocol stocks were up sharply last week. And now under profit-taking pressure today.

And those are the "Stocks in the News" tonight.

Nightly Business Report transcripts are available on-line post broadcast. The program is transcribed by eMediaMillWorks. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc. Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. Copyright (c) 2003 Community Television Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.

12/01/03: Market Stats

   
                                      NET    PERCENT
                         CLOSE     CHANGE     CHANGE
DOW CLOSE              9899.05    +116.59      + 1.2
HIGH                                         9902.23
LOW                                          9785.35

NASDAQ COMP.           1989.82     +29.56       +1.5
HIGH                                         1989.82
LOW                                          1968.54

VOLUME                                       1,342.4
PREVIOUS                                       485.7
UP VOLUME                                    1,080.7
DOWN VOLUME                                    245.6

DOW TRANSPORTS         2961.58     +40.35      + 1.4
DOW UTILITIES           252.81      +2.40      + 1.0
CLOSING TICK                                    +625

S&P 500                1070.12     +11.92      + 1.1
S&P 100                 526.60      +5.86      + 1.1
MIDCAP 400              575.83      +8.83      + 1.6
REUTERS/CRB             254.37      +4.49      + 1.8

NYSE COMPOSITE         6147.35     +74.33      + 1.2
VALUE LINE              355.25      +4.58       1.31
RUSSELL 2000            554.59      +8.08       1.48
WILSHIRE 5000         10471.06    +118.84       1.15

U.S. TREASURIES
5-YEAR NOTE 3.375%
Nov. 15,2008          99 24/32     -10/32       3.43

10-YEAR NOTE 4.25%
Nov. 15,2013          98 29/32     -13/32       4.39

30-YEAR NOTE 5.375%
Feb. 15, 2031        103  6/32     -10/32       5.16

LEHMAN BROS.
LONG BOND INDEX        1706.68     -17.07


DOW CLOSE              9899.05    +116.59      + 1.2
ADVANCES                                        2417
DECLINES                                         882
NEW HIGHS                                        628
NEW LOWS                                           7

                                      NET    PERCENT
NYSE MOST ACTIVES    4PM CLOSE     CHANGE     CHANGE
AWE    AT&T Wireless      7.34       -.16       -2.1
WMT    Wal-Mart Stores   54.50      -1.14       -2.1
GE     GE                29.03       +.36       +1.3
PFE    Pfizer            34.17       +.62       +1.9
LU     Lucent Tech        3.20      unch.      unch.
MRK    Merck             42.08      +1.48       +3.7
TWX    Time Warner       16.49       +.21       +1.3
NT     Nortel Networks    4.59       +.08       +1.8
HPQ    Hewlett-Packard   21.84       +.15        +.7
XOM    Exxon Mobil       36.39       +.22        +.6

NASDAQ CLOSE           1989.82    + 29.56      + 1.5
VOLUME                                       1,848.0
PREVIOUS                                       704.1
ADVANCES                                        2105
DECLINES                                        1134

NASDAQ ACTIVES
MSFT   Microsoft         25.84       +.13        +.5
INTC   Intel             34.04       +.50       +1.5
CSCO   Cisco Systems     23.18       +.48       +2.1
AMAT   Applied Matl      24.21       -.03        -.1
AMGN   Amgen             59.23      +1.61       +2.8
ORCL   Oracle            12.51       +.49       +4.1
AMZN   Amazon.com        54.65       +.68       +1.3
NXTL   Nextel Comm       26.29       +.96       +3.8
YHOO   Yahoo!            44.21      +1.22       +2.8
EBAY   eBay              56.89      +1.00       +1.8

AMEX CLOSE             1112.55    + 14.45      + 1.3

INDEX SHARES
DIA    DIAMONDS TRUST    99.10      +1.08       +1.1
QQQ    NASDAQ 100        35.88       +.48       +1.4
SPY    S&P DEP.RECEIPTS 107.59      +1.09       +1.0

STOCKS IN THE NEWS
DD     Du Pont           42.70      +1.24       +3.0
IP     Intl Paper        38.75      +1.54       +4.1
BA     Boeing            38.02       -.37       -1.0
DIS    Disney            23.17       +.08        +.4
PER    Perot Systems     14.37      +1.97      +15.9
ACH    Aluminum China    59.45      +5.94      +11.1
CBA    Brilliance China  50.85      +6.36      +14.3
PTR    Petrochina ADR    39.79      +2.71       +7.3
BYH    Sinopec Beijing   12.86      +1.06       +9.0
OSI    Outback Steakhous 46.99      +2.24       +5.0
DHI    D.R. Horton       45.06      +1.36       +3.1
CNX    Consol Energy     19.89      -1.36       -6.4
PDLI   Protein Design    17.02      +3.16      +22.8
EGHT   8X8 Inc            5.97      -1.55      -20.6