Boeing lands $1.1 billion federal tax refund

Boeing Co. on Tuesday said it received a federal income-tax refund and related interest from the Internal Revenue Service of about $1.1 billion.

According to a filing with the Securities and Exchange Commission, the refund and interest are related to a partial settlement of tax years 1992 to 1997 with the IRS and will further strengthen the Chicago jet builder’s cash balances.

Boeing estimated the partial settlement will increase fourth-quarter net income by about $700 million, or 87 cents a share, and increase fourth-quarter operating cash flow by about $1.1 billion.

The company’s 2003 earnings and cash flow forecast issued Oct. 29 didn’t reflect this settlement, the filing said.

Telecommunications

Fired Boeing executive leaves Sprint board

Overland Park-based Sprint said Tuesday that Michael Sears had resigned as a member of the company’s board of directors effective immediately.

Sears was fired from his job as chief financial officer for Boeing Co. on Monday for alleged ethics violations including improperly hiring an Air Force official.

Investigation

Criminal charges filed in mutual fund case

Federal authorities ordered the closure of Security Trust Co., a major provider of services to pension and retirement funds, while three of its former top executives were charged Tuesday with helping arrange illegal trades.

It was the first company death sentence to result from the spreading mutual funds scandal as it reached into a lesser-known but important niche of the $7 trillion industry.

The criminal charges were filed by New York state prosecutors who said Security Trust, based in Phoenix, helped several hedge funds engage in short-term trading, known as market timing, in mutual funds, which are supposed to be long-term investments. The hedge funds made $85 million in profits, and Security Trust made $5.8 million, they said.

Energy

Reliant, CMS subsidiaries settle trading allegations

Trading subsidiaries of Reliant Resources Inc. and CMS Energy agreed Tuesday to pay a combined $34 million to settle regulatory probes into energy trading practices.

Houston-based Reliant will pay $18 million to settle Commodity Futures Trading Commission allegations of fake trade reporting, attempted market manipulation and so-called round-trip trades. Jackson, Mich.-based CMS will pay $16 million to settle similar allegations.

Neither company admitted or denied the allegations. Both also said they would continue to cooperate.

Joel Staff, chairman and chief executive of Reliant, said the company “is committed to resolving all remaining issues relating to our past trading operations.”

CMS issued a statement noting no one involved in false data reporting is still employed by the company, which has exited the energy trading business. CMS sold subsidiary CMS Field Services earlier this year.