The Houston area fared reasonably well in Forbes magazine’s 2005 ranking of the best places for businesses and careers among U.S. metropolitan areas (populations over 345,000).
Houston ranked 13th out of 150 metropolitan areas evaluated in the survey, which primarily focuses on the potential for businesses to maintain low costs and to attract the best workers. Boise, Idaho was ranked the best among large metropolitan areas followed by Raleigh-Durham, N.C., and Austin. Inasmuch as Texas and Virginia have well-educated labor forces and relatively low business costs, those states placed seven areas in the top 20 of the metro areas while no other state had more than one. Dallas (19th) and Fort Worth (20th) joined Austin and Houston as Texas cities in the top 20 metro areas.
In the 168 cities ranked in the smaller metro areas category, Brazoria County ranked 18th, Bryan-College Station 15th, and Galveston 82nd. My old hometown of Iowa City, Iowa came in ninth in that category. Check out the survey and see how your city ranks.

Under any reasonable assessment, Houston-based El Paso Corporation has had a rough past year, as noted here, here, here, here and here.
Accordingly, it was with some relief in local business circles that the natural gas production and pipeline company was able to report yesterday that it had swung to profitability in the first quarter from a net loss a year ago. El Paso reported net income of $106 million, or 17 cents a share, compared with a net loss of $206 million, or 32 cents a share, in the first quarter of 2004. However, revenue dropped by 22% to $1.21 billion from $1.56 billion a year ago and cash flow from operations dropped by over 90% to $51 million from $629 million in the prior-year period. As a result, El Paso’s stock price fell 34 cents, or 3.2%, to $10.21 per share as of the close of yesterday’s trading.
El Paso is not out of the woods financially by any means, but its latest report reflects that the company is taking the steps necessary to hedge the risk of having to endure a formal corporate reorganization. Stay tuned.

The headline to this USA Today article about Delta Airlines‘ quarterly earnings report speaks volumes regarding what is considered positive news these days for legacy airlines.

Yesterday’s conference call for Blockbuster, Inc.’s CEO John Antioco to discuss the company’s quarterly earnings turned out not to be the routine chat that usually occurs in such calls. Blockbuster investor Carl Icahn made sure of that.
Mr. Icahn and two entertainment industry veterans are opposing Mr. Antioco and two current directors in the company’s upcoming annual meeting. Mr. Icahn is Blockbuster’s biggest shareholder, with about 8.6% of Blockbuster’s combined voting shares. He is also expected to receive support in his fight with Mr. Antioco from most of the hedge funds that own a big chunk of Blockbuster’s stock.
So, this veteran warrior of seemingly countless corporate battles (here are a few previous posts on Mr. Icahn) surprised everyone on the call (via about 450 phone and Web connections) when his distinctive raspy-voice joined the question-and-answer session of the call, beginning with the following missile shot at Mr. Antioco:

“You have mischaracterized what I’m trying to achieve here,” Mr. Icahn alleged regarding his recent move to gain control of the Blockbuster board. “We would want you accountable.”

Mr. Icahn went on to characterize Mr. Antioco’s $50 million bonus last year as “egregious” given Blockbuster’s faltering business. Earlier, the company had announced a first-quarter loss of $57.5 million compared with year-earlier net income of about $115 million.
Well, if you want a fight, just mischaracterize a CEO’s pay. The usually calm Mr. Antioco accused Mr. Icahn of making an “erroneous” statement about his pay and then said:

“I didn’t get a $50 million bonus. I think you know that.”

Blockbuster regulatory filings show that Mr. Antioco earned $7 million in cash and $26.7 million in restricted stock in addition to stock options worth potentially much more. Mr. Antioco then appealed to investors on the call:

“Do you honestly believe that electing a divisive element will help move the company and your investment forward?”

In addition to the foregoing, Mr. Icahn challenged Mr. Antioco to give up his entitlement to future bonuses in light of Blockbuster’s financial problems and to put the entire board up for election next year rather than continuing the staggered current system under which two or three directors are nominated for election every year. Mr. Antioco shot back that such decisions were the preogative of the board.
At any rate, the unusual dust-up between the two rivals went on for six minutes with each man interrupting the other and ended only when Mr. Icahn was cut off in midsentence by the conference call operator, who declared the investor’s comments were not “appropriate.” The operator’s cut-off came right before Mr. Icahn appeared ready to reveal details of an offer from a leveraged buyout firm to bid for Blockbuster. Mr. Antioco later told listeners on the call that the company had received no such offers. Being cut off in mid-sentence was “corporate democracy, Antioco-style,” Mr. Icahn commented later.
No word yet on whether Blockbuster is selling tickets to its upcoming annual meeting.
Update: Charlie Quidnunc, a podcast-blogger in Mercer Island, Washington, actually listened in on the Blockbuster conference call and has this post and podcast on the call. Don’t miss it. As Charlie notes, this was not your typical conference call for a publicly-traded company.

As noted in previous posts here, here, here, here and here, it is extremely difficult to liquidate even an insolvent airline. Rather, such companies seem to go out to pasture in chapter 11 for an indefinite period until creditors approve some debt for equity swap that cleans up the balance sheet enough for exit financiers to risk the capital necessary to give the airline another swing at the plate.
In that regard, this US Today article examines the question of why it is so difficult to put an airline out of its misery, and essentially concludes that creditors, government, employees, and politicians have created such barriers to exiting the industry that it’s almost impossible for an airline’s owners simply to liquidate the damn thing and be done with it. This is too bad because the relatively scarce airline gates — which remain the main barrier of entry into the airline market — need to be allocated to savvy companies that are positioned to succeed. As Professor Ribstein reminds us here and here, airlines such as United, U.S. Air “and their ilk are starting to resemble nothing so much as Amtrak.” Professor Ribstein follows up with these typically insightful comments on today’s article.
By the way, speaking of Amtrak, Professor Gordon has comments and has helpful links on that black hole for money.