Here is a look at more of Monday's top business stories:
Dynegy unveils $2 billion plan to cut debt
HOUSTON, June 24 (UPI) -- Dynegy Inc. unveiled a $2 billion capital plan to further strengthen liquidity, reduce debt and emphasize financial transparency, in an attempt to allow the company to compete in its core energy businesses.
Dynegy said its liquidity is adequate to meet its obligations and commitments, even if it loses its investment-grade rating from one or more credit rating agencies.
Since the end of May, the company said its liquidity fluctuated from $900 million to more than $1 billion.
Dynegy said it plans to reduce its common stock dividend by 50 percent beginning in the third quarter.
The company paid a second quarter dividend of 7.5 cents a share June 17 to shareholders of record June 3.
Dynegy plans to sell $300 million to $400 million in Illinois Power mortgage bonds to repay outstanding debt at Illinois Power, and the Illinois Commerce Commission approved such a mortgage bond offering, according to Dynegy.
The company also plans to sell additional assets worth about $200 million, and is attempting to arrange numerous interim financing that it expects to provide $250 million or more in immediate liquidity over the next few weeks.
Dynegy's management plans to consider "an equity-like offering based on market conditions and the results of the capital-enhancing transactions."
While trying to focus on its core energy operations, Dynegy plans to continue to emphasize its asset-backed business model through which it uses "its diversified network of regulated and unregulated physical energy assets to deliver reliable supply to customers."
The company now plans to provide operating cash flow by segment, while segregating the financial contribution of earnings from regulated operations, term contracts, fee-based operations, other assets and marketing and trading operations.
Dynegy expects to complete the restatement of its 2001 results, and then PriceWaterhouseCoopers will conduct a re-audit of the data.
The company fired Arthur Andersen LLP and hired PriceWaterhouseCoopers in March.
Dynegy now plans to provide the financial effects of risk management activities, and income and cash flow statements in a single table. The company said it will also take the necessary steps to move synthetic operating leases for its power generation operations onto the balance sheet.
The company also will move the Catlin minority interest to debt through an amendment to the Catlin transaction.
Dynegy reduced its power trading activities to reflect current market conditions and liquidity levels, while the company continues its "commitment to preserving its energy risk management franchise."
Dynegy said its previous earnings guidance "no longer applies" because of market conditions.
In April, the company lowered its 2002 estimate to between $2 and $2.05 a share. The First Call mean earnings estimate at that time was $2.23 a share, and former company guidance was $2.26 a share.
Analysts on Wall Street expected the company to post earnings for the full year of $1.35 a share, according to Thomson Financial/First Call.
For the year ended Dec. 31, Dynegy reported recurring income of $713 million, or $2.10 a share.
Dynegy plans to report second quarter results and provide revised earnings guidance during the last week of July.
The company plans to include details of pretax charges of up to $450 million related to the communications business, severance expenses, consulting fees and other charges in its report on its second quarter ending June 30.
Analysts on Wall Street expect the company to post a second quarter net income of 21 cents a share, according to Thomson Financial/First Call.
In April, Dynegy received notice that the Securities and Exchange Commission was conducting an informal inquiry surrounding a gas contract.
The energy company said then that it planned to present cash flow associated with the April 2001 contract as a financial activity in its consolidated statement of cash flows.
Previously, Dynegy classified the net cash inflow from the contract as operating cash flow in quarterly and year-end financial statements for 2001.
American Physicians Assurance to exit Florida
EAST LANSING, Mich., June 24 (UPI) -- Insurance company American Physicians Assurance Corp. said it plans to stop writing medical professional liability insurance in Florida and criticized the state's legal climate.
American Physicians, which provides workers' compensation insurance as well as medical professional liability insurance, said that its 2,200 policies written in Florida represented 18 percent of its direct premiums, or $26.7 million, in 2001.
The company reported an underwriting loss of $18.8 million in the state last year.
R. Kevin Clinton, president and chief executive officer, said, "We have determined that a continued presence in Florida does not fit with our stated strategy of increasing our professional liability presence in our core markets and becoming profitable in all territories.
"The state's unpredictable and unfavorable legal climate has become an impediment to our ability to write business profitably in Florida. Therefore, we believe it is in our best interest to exit Florida, and to use our capital resources in more profitable markets," Clinton said.
"To help with the transition, we will work with our agents to help secure alternative coverage for our insureds," Clinton said.
The company said once the Florida Department of Insurance's notice requirement has been satisfied, it intends to begin the process of non-renewal of policies at expiration, in accordance with applicable regulatory requirements.
American Physicians said it would work with its agents to help find alternative coverage for its clients in Florida.
American Physicians Assurance Corp. is a subsidiary of American Physicians Capital Inc.
Earnings rise 20 percent at Lindsay Mfg.
OMAHA, Neb., June 24 (UPI) -- Lindsay Manufacturing Co., a maker of irrigation systems, said its third quarter net income for the period ended May 31 rose 20 percent to $4.7 million, or 40 cents a share, from $3.9 million, or 33 cents a share during the same period last year.
Revenues rose 13 percent to $44.1 million from $39 million a year ago.
Rick Parod, president and chief executive officer, said, "I am pleased to report that our core irrigation equipment business remains strong and we continue to see solid financial results.
"Our fiscal third quarter revenues, gross profit, gross profit margin and earnings were at the upper end of our expectations," he said.
Looking ahead, the company said it expects increased earnings for the year on revenue growth of about 8 percent, excluding revenue from acquisitions.
The company said it expects the new farm bill to have a favorable effect on demand for irrigation equipment.
Lindsay also said it completed previously announced acquisitions of Irrigation Specialists Inc. and Lindsay South America.
IMC Global issues earnings warning
LAKE FOREST, Ill., June 24 (UPI) -- IMC Global Inc., which makes fertilizer, said it expects its second quarter net income will fall below Wall Street expectations because of the outage of a phosphate plant turbogenerator and unfavorable currency translation from the company's Canadian businesses.
IMC Global said the faulty turbogenerator, which was idle for 60 days, and the stronger Canadian dollar are expected to reduce its second quarter net income by 6 cents a share.
Analysts on Wall Street were expecting IMC to post a net income of 11 cents a share, in the second quarter, according to Thomson Financial/First Call.
IMC Global late last week successfully restarted a 58-megawatt turbogenerator at its New Wales, Florida phosphate plant following an approximately 60-day outage. During the repair period, IMC said it purchased higher cost utility power and sulfuric acid.
Douglas A. Pertz, chairman and chief executive officer, said, "Our second quarter phosphate and potash sales volumes are tracking expectations despite lower planted corn acreage and very delayed field activity in the Eastern Corn Belt because of wet weather.
"However, potash realizations have been disappointing as our April 15 domestic price increase has not been achieved. Nonetheless, we have been able to offset weaker potash pricing and the poor spring season through strong volumes and good overall operating performance," he said.
Pertz added that the outlook for the phosphate and potash markets remains positive for the balance of 2002, noting that diammonium phosphate spot prices continue to increase in both export and domestic markets with product availability very tight and strong demand emerging from Asia and Latin America.
For example, last week's benchmark Tampa export spot price for DAP increased about $5 per metric ton to nearly $167 versus the previous week.
The benchmark Central Florida domestic spot price for DAP jumped about $7 per short ton in the same period to an average of approximately $142.
Calgon Carbon issues earnings warning
PITTSBURGH, June 24 (UPI) -- Calgon Carbon Corp., which makes water and air-purification products, said it expects to post a lower second quarter net income due to costs from starting a new business, a plant opening in China, and lower carbon and engineered solutions sales.
The company said it expects to report second quarter earnings per share of 4 cents to 6 cents, down from 10 cents a year earlier.
The forecast excludes a write-off of a large portion of $61 million in goodwill associated with its 1996 acquisition of Advanced Separation Technologies Inc., the company said.
Calgon Carbon said earnings are also being adversely affected by approximately $1 million as a result of costs associated with the start up an Engineered Solutions customer installation and the company's new activated carbon manufacturing plant in China.
James A. Cederna, chairman and president, said, "We had not shared estimates for second quarter results until today because of the changing global economy and uncertainty surrounding the size of start up costs and the goodwill assessment.
"A complete analysis of final results for the second quarter of 2002 will be released on July 30," he added.
