Dec Debt

Revolving consumer credit continued to expand at a modest rate during December. According to preliminary figures released Monday afternoon by the Federal Reserve, Americans piled on more than $4 billion in outstanding revolving credit during December. Since July, revolving consumer credit, mostly credit card debt, has grown by $8.5 billion. Overall consumer credit is now growing at a 9.7%, according to the FRB. At the end of December American consumers were $1.399 trillion in debt, exclusive of home mortgages.

Dec99 Nov99 Oct99 Sep99 Aug99 Jul99 Jun99 May99 Apr99 Mar99 Feb99 Jan99
%GRWTH: 8.4% 9.0 -0.5 0.0 2.5 12.1 13.8 4.5 5.6 -0.9 3.4 11.6
$OWED: $592.8 588.7 584.3 584.5 584.5 584.6 578.5 572.2 569.9 567.3 567.5 565.9
Source: Federal Reserve; revised figures as of 2/07/00; For
complete historical data visit


ORCC & Aurum

VA-based Online Resources & Communications announced this morning it has signed a strategic marketing agreement with Aurum Technology Inc., formerly a division of EDS’ Financial Industry Group that spun-off and became an independent company in December. Both firms focus on the mid-range and community-based banking market. The deal will combine Online Resources’ real-time banking and bill payment infrastructure and Aurum’s application software and item processing capabilities.


Equestrian Processing Enterprises Inc. has received approval of its application for merchant status from Cardservice International Inc. will now be able to provide credit card transaction processing services to horse related businesses whose goods and/or services are offered through’s equestrian portal. Chairman, John Henry, said, “We have received a very competitive discount rate from Cardservice International and now we, in turn, can offer very attractive terms to our clients. This is an important step towards meeting our goal of becoming the Ebay (EBAY) of the horse world”.

About Cardservice International, Inc.

Cardservice International, Inc., is a global leader in providing real-time secure credit card transactions to merchants. Cardservice offers merchants a cost-effective service branded to their businesses, enabling them to provide credit card processing over the Internet as well as to the traditional marketplace. The company’s LinkPoint Secure Payment Gateway(SM) utilizes state-of-the-art Secure Sockets Layer technology and is easily scalable to any size business. The gateway is designed to communicate in real time with a business’ core data-processing system to allow online transactions to be posted immediately. The gateway also delivers a full range of capabilities, including sales, returns, authorizations, online check processing and comprehensive real-time reports for easy Web management.

More than 170,000 merchants have contracted with Cardservice International. Of those, 50,000 are actively using Cardservice and/or the LinkPoint Secure Payment Gateway as their Internet solution.


“John J. Henry” ————————— John J. Henry, Chairman

From time to time, the company may issue news releases that contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and is subject to the safe harbor created by those sections. This material may contain statements about expected future events and/or financial results that are forward looking in nature and subject to risks and uncertainties. For those statements, the company claims the protection of the safe harbor for forward-looking statement provisions contained in the Private Securities Litigation Reform Act of 1995 and any amendments thereto. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, goals, assumptions, or future events or performance are not statements of historical fact and may be “forward-looking statements.” “Forward-looking statements” are based upon expectations, estimates and projections at the time the statements are made that involve a number of risks and uncertainties that could cause actual results or events to differ materially from those anticipated. “Forward-looking statements” in this action may be identified through the use of words such as “projects,” “expects,” “will,” “anticipates,” “estimates,” “believes” or by statements indicating certain actions “may,” “could” or “might” occur. Discussions of factors that may affect future results are contained in the company’s recent filings.


One Million CTO MCs

Canadian Tire Corporation, Limited today reported consolidated net earnings per share of $1.89 in fiscal 1999, compared with $2.09 per share earned in 1998. After-tax consolidated earnings were $145.9 million versus $167.0 million in 1998.

The pre-tax consolidated earnings were reduced by unusual expenses of approximately $50 million associated with, among other things, Y2K charges as well as costs to develop an e-commerce business which is scheduled to be launched later in 2000 and the retirement of the CEO as previously announced.

All of Canadian Tire’s operating divisions made strong contributions to 1999 operating earnings before the expense adjustment. Canadian Tire Retail (CTR) operating earnings before the adjustment were up 8.1 percent while Canadian Tire Financial Services and Canadian Tire Petroleum operating earnings increased 8.0 percent and 81.3 percent respectively.

The Corporation closed the year with consolidated gross operating revenue of $4.7 billion, 8.8 percent ahead of the $4.3 billion reported in 1998.

“In addition to our strong operating performance in 1999, Canadian Tire achieved a number of key strategic accomplishments,” said Stephen E. Bachand, President and Chief Executive Officer. “We opened 51 new-format stores bringing our total to 188 since the program started; we announced the national roll-out of the PartSource automotive parts stores; we upgraded 20 gas bars; we passed the one million mark for Canadian Tire Options MasterCard holders; and made significant investments to enhance supply chain capabilities.”

“The Corporation is in a strong financial and market position and our growth strategy is sound and performing well. We have the best management team in the business and in a national survey, we were recently selected as Canada’s best company to work for,” Bachand added.

The Corporation’s new-format store program, which began in 1994, will be completed in four years. Planned openings in addition to other major elements of the Corporation’s growth strategy, including PartSource and e-commerce, will contribute significantly to its performance

Fourth quarter consolidated gross operating revenue increased by 13.1 percent to $1.3 billion. This strong revenue growth was driven by increased shipments to Associate Dealers. Consolidated net earnings for the quarter were $13.0 million compared to $44.0 million a year earlier. The decline in earnings was due to the expenses described earlier. Net earnings per share for the quarter were $0.16 versus $0.56 in the same quarter of 1998.

Canadian Tire Retail

Canadian Tire Associate Dealers recorded a strong year. Total retail sales were up 7.7 percent over 1998, an improvement over the increase of 7.5 percent reported a year earlier. This trend reflects the increased contribution of the additional new-format stores. Comparable store sales increased by 2.9 percent in 1999. Associate Dealers recorded strong retail sales for the fourth quarter, up 10.2 percent.

CTR closed 1999 with gross operating revenue of $3.8 billion, up 8.2 percent from the $3.5 billion recorded in 1998. The increase was driven by higher retail sales which resulted in a year-over-year 8.0 percent increase in shipments to Associate Dealers.

CTR operating earnings — before the described expense adjustment — for the year were $214.4 million, 13.2 percent up from the $189.5 million earned in 1998. All three merchandising divisions of CTR — Automotive, Sports and Leisure, and Home Products — contributed strong shipment and margin growth. CTR operating earnings after the adjustment were $155.9 million, down 17.7 percent from a year earlier.

Fourth quarter, CTR gross operating revenue totaled $1,026.3 million, up 10.9 percent from $925.4 million in 1998. Operating earnings — before the described expense adjustment — for the quarter were $64.3 million compared to $55.7 million a year earlier. CTR operating earnings after the adjustment were $5.8 million.

Canadian Tire Financial Services

Canadian Tire Financial Services recorded 1999 gross operating revenue of $306.0 million, up 0.2 percent from the $305.4 million recorded a year earlier. The revenue performance was impacted by the licensing of Financial Services’ long-distance program to a third party. Operating earnings in 1999 were $56.0 million, up 8.0 percent from $51.9 million in 1998, due to the continued focus on improving the quality of the credit card portfolio.

Fourth quarter gross operating revenue was $83.0 million, compared with $77.3 million in the same quarter of 1998. Operating earnings in the fourth quarter were $12.5 million versus $11.2 million a year earlier.

Canadian Tire Petroleum

Canadian Tire Petroleum reported 1999 gross operating revenue of $622.0 million, up 17.3 percent from $530.2 million in 1998. The increase in revenue, resulted primarily from the year-over-year 9.1 percent increase in gasoline sales volume. Operating earnings for the year were $15.2 million, an 81.3 percent increase over the $8.4 million earned in 1998. The improvement in operating earnings was the result of continued expense reduction and increased gross margin dollars due to higher gasoline sales volumes. Petroleum’s fourth quarter gross operating revenue totaled $176.5 million compared with $134.4 million a year earlier. Operating earnings for the quarter were $3.1 million versus $2.6 million in 1998.


On December 2, 1999 the Board of Directors declared a dividend of $0.10 per share on each Common and Class A Non-Voting share. The dividend is payable on March 1, 2000 to holders of record on January 31, 2000.


GCA Signs Trump Casinos

Three gaming properties of Trump Casino Services, LLC have signed contracts to utilize the technologically advanced products and services of Global Cash Access, the leading provider of cash access, financial management and customer relationship marketing technologies to the gaming industry.

‘Through Global Cash Access, we have access to unparalleled, secure patron database services. Their innovations have made an extraordinary amount of valuable data available ­ data that we use to improve customer service and increase business,’ said Francis X. McCarthy, Jr., executive vice president, corporate finance for Trump Casino Services, LLC.

Trump Casino Services, LLC will be taking advantage of GCA’s QuikCash(TM) POS debit/credit card cash advance machines, TeleCheck(R) check guarantee and authorization, Western Union(R) wire transfer and Central Credit, Inc., the gaming industry’s largest patron information database.

Trump Casino Services, LLC properties that recently signed agreements with GCA are:

— Trump Marina

— Trump Plaza

— Trump Taj Mahal

Global Cash Access was formed in 1998 through a joint venture of Bank of America (NYSE:BAC), First Data Corp. (NYSE:FDC) and USA Processing, Inc. Providing access to the gaming industry’s largest patron database, Global Cash Access uses Internet technologies to deliver funds transfer, financial management and customer relationship marketing services to more than 1,200 gaming properties nationwide.


UBS Goes Falcon

UBS Card Center Ltd., a subsidiary of UBS AG, one of the ten largest banks in the world, has successfully implemented Falcon, the leading bank card fraud detection system, developed by HNC Financial Solutions, a division of HNC Software Inc.

“The Falcom system has provided an immediate benefit to our overall fraud detection efforts,” said Werner Schaer, head of UBS Card Center’s fraud department. “In addition to the direct cost savings, Falcon has provided several internal work process enhancements, such as improved analyst efficiency and increased customer service quality. Our customers even welcomed the inquiries we made to them regarding suspicious transactions.”

Falcon, a neural network-based predictive software system that examines transaction, cardholder, and merchant data to detect a wide range of credit card fraud, currently protects more than 300 million payment card accounts worldwide.

“Besides the immediate 40 to 60 percent reduction in fraud losses enjoyed by typical Falcon users, the supplementary benefits can create additional savings of roughly 10 percent of the total cost of operating a fraud management unit,” said Enrique Carrillo, regional vice president of sales for HNC Financial Solutions. “Since Falcon can detect fraud at a lower false-positive rates than those typically used by card issuers, the system reduces the number of phone calls required to confirm fraudulent activity. This translates into a 30 to 50 percent reduction in telecommunications costs.”

“Though credit card fraud has been a growing problem in Europe, Falcon has been widely credited as a major weapon in inhibiting this trend,” continued Carrillo. “Based on the information provided by UBS, Falcon will help them with the kinds of fraud that are common to our international customers, including lost, stolen, and counterfeit cards, falsified applications, and fraudulent mail-order/telephone order transactions. Falcon’s early detection of counterfeit fraud, the fastest growing category of card fraud in the world, is unique in the industry.”

About UBS Card Center Ltd.

Employing more than 400 people and serving more than 680,000 clients and 50,000 merchants, UBS Card Center is one of the leading processing centers for VISA and Eurocards in Switzerland. With a market share of more than 32 percent, UBS AG ranks as the largest issuer of credit cards in the country. For more information about UBS AG’s credit card products, visit the UBS Web Site at


LeMay to NPC

Carol A. LeMay has joined National Processing Co. as vice president of National Retail Sales, the company announced today. NPC is the operating subsidiary of National Processing Inc. and is the second-largest provider of merchant credit card processing.

Prior to joining NPC, LeMay served as national sales director for Momentum, located in Atlanta. She has served as vice president of National Sales in the credit and debit card industry with recognized companies such as NaBanco and National Data Corporation for the past 14 years.

“Carol is well known in the credit and debit card industry. She is a hard worker and is dedicated to providing the best solutions for her customers. She has extensive experience selling to large National Retailers, and we are certain that she will be a strong player for NPC,” said Mark Pyke, executive vice president of National Processing Company Merchant Services.

“I am extremely excited about joining NPC. The company’s commitment to their existing customers and prospects in the National Retail Division will make them even more successful in the future,” said LeMay.

LeMay resides in Atlanta with her husband, Arthur. She has four children and three grandchildren.

About National Processing

National Processing is a leading provider of merchant credit card processing and corporate outsourcing services. National Processing supports over 470,000 merchants, representing one out of every six Visa and MasterCard transactions processed nationally. Approximately 88 percent of National Processing Inc. is owned by National City Corporation (NYSE: NCC), a Cleveland-based $87 billion bank holding company.


VISA Canadian Smart Cards

VHS Network, Inc. announced Friday that Visa Canada approves SmartCards for Banks.

The acceleration of the demand for “smartCARD” applications alone will focus major players, such as Institutions and Banks, on this technology. VHSN has been a major proponent of application on chip cards for many years. VHS Network released the news today that, “Visa Members in Canada analyze SmartCards.” According to VHS Network, “Visa issuers in Canada have taken the first step toward replacing their 22 million magnetic-stripe credit cards with ChipCards,” as the Visa Canada board this week approved in principle a migration to SmartCards and asked member banks to get internal approval for such a move. MasterCard’s Canadian board will take up a possible switch to SmartCards this Spring.

The Company is also in the final phase of testing with their set-top box at several major companies that place set-top boxes in housing developments, using advanced fiber optics systems. Their set-top box has passed its initial testing and is in its final phase.

It will provide the most advanced streaming video with unsurpassed clarity. The Company has tested their set-top box alongside three major manufacturers’ boxes. VHSN’s box has outperformed all other and is the only box to successfully provide streaming video at a cost effective base. The potential for this box is phenomenal and will be sold aggressively.

Industry sales in set-top boxes in the year 2000 are expected to be in the billions. The VHS Network will be aggressively taking its share of this market. “It would appear that our predictions are becoming reality,” stated Mr. Elwin Cathcart, CEO and Director of VHS Network, Inc. The new Millennium would be a turnaround for the Company.



American Express expanded its marketing campaign for its exclusive NBA sponsorship last week. Last month AmEx unleashed the ‘Streets’ advertising campaign which featured noteworthy individualists who represent achievement in their chosen fields, including entertainment, fashion, music and sports. The campaign was expanded last week to feature eight NBA stars of yesterday and today in national media outlets in New York, Los Angeles and the San Francisco Bay Area. For the NBA versions, the familiar “Member Since” date from the card and ads has been replaced with a superlative that represents the style and image of the featured player. Some of the taglines: Marcus Camby (Tenacious Since), Allan Houston (Smooth Since) and Walt “Clyde” Frazier (Dishin’ & Swishin’ Since) in New York; and Jerry West (Clutch Since). AmEx’s sponsorship of the NBA is in its fifth year.



San Francisco-based Cybermoola has signed Catalina Marketing to distribute Cybermoola’s prepaid Internet shopping cards in West Coast supermarkets beginning in April. Consumers purchasing Cybermoola at the supermarket checkout counter will receive a certificate printed from the Catalina Marketing Network printer that contains a 16-digit unique serial number. Each certificate will have a stored dollar value equal to the amount paid to the cashier and is activated by going to Cybermoola’s web site. Once activated, Cybermoola cards can be used to make online purchases at Internet merchants such as,, and others. The card is primarily targeted at teenagers. Cybermoola’s initial test market focuses on the Western U.S., including northern California. Cybermoola will eventually be available to all 14,000 supermarket locations in Catalina’s network, enabling most major supermarket chains to sell Cybermoola prepaid Internet shopping cards.