1. BUYING BINGE: Free-spending private-equity firms led a blowout year for corporate buyouts. Through November, the value of corporate deals had hit $844 billion, up 47 percent from a year ago, according to Thomson Financial. Private-equity firms are swimming in cash, and increasingly deploying it in bigger buyouts. That cash is coming from institutional investors seeking ever-better returns.
2. OIL PRICES GO WILD: Global political tensions helped push crude oil prices above $75 a barrel in July. The spike caused worries of an economic slowdown, and angst among drivers. The average U.S. gas price hit an all-time nominal high of $3 per gallon. Consumer ire has cooled as gas prices have dropped steadily since July, currently sitting around $2.25 per gallon.
3. BITTEN BY BACKDATING: Stock option scandals have caused the downfall of several prominent chief executives who received option grants that had been “backdated”–artificially rigged to make them more valuable. Nearly 200 companies have disclosed that the Securities and Exchange Commission, Department of Justice or internal investigations are looking into potential problems with backdating.
4. COME-UPPANCE AT ENRON: One of the nation’s most dramatic corporate frauds, the Enron meltdown, ended with the convictions of Chief Executive Jeffrey Skilling (right) and Chairman Kenneth Lay (below right). They lied to employees and investors about Enron’s financial health, a jury concluded. Skilling was sentenced to 24 years in prison. Lay faced decades behind bars but died of a heart attack in July.
5. DRUGS FOR SENIORS: Medicare began paying for seniors’ prescription drug benefits, the largest expansion of the government health plan in more than 40 years. It got off to a bumpy start, with confusion over the selection of private insurance providers and computer glitches that forced some seniors to pay out of pocket for their first prescriptions. But the program has become popular, and participants ended up with lower premiums than expected.
6. HOUSING HITS CEILING: The long-running housing boom, which began winding down in late 2005, went splat in 2006. Home sales have been falling, while prices have stagnated. One research firm, Moody’s Economy.com, forecasts an actual fall in median sales prices in 2007, the first annual decline since the 1930s. Others are more confident, sensing a comeback, but prices aren’t likely to appreciate much.
7. TRANS FATS BANNED: Health advocates’ quest to banish trans fats turned up the heat on Oak Brook-based McDonald’s and other fast-food companies. New York City banned the unhealthy fat, and Chicago is contemplating the same. Some restaurant chains have announced they are switching to trans-fat-free oils. McDonald’s has said it cannot make the switch until 2008.
8. FORD HANDS OVER WHEEL: William Clay Ford Jr., faced with the worst crisis in his company’s 103-year history, stepped down as chief executive of Ford Motor Co., handing the job to Boeing executive Alan Mulally. While Ford remains executive chairman, it’s up to Mulally to staunch the firm’s heavy losses. Mulally is known for turning around Boeing’s commercial airplane group.
9. DOW BREAKS RECORDS: The Dow Jones industrial average posted its best year since 2003, topping 12,000 for the first time. Helping to fuel the Dow’s climb: Corporate profits proved to be stronger than expected, while interest rate hikes were less than anticipated. The Federal Reserve in June 2004 began steadily lifting short-term rates from 1 percent, but halted this year at 5.25 percent.
10. WAL-MART SLOWS: Wal-Mart hit a wall of sorts in November, when it posted its worst monthly sales performance in a decade. November also marked the second consecutive month of virtually unchanged sales for the retail behemoth. Wal-Mart is trying to recover from missteps into trendy clothing, as well as ad campaigns that veered from its traditional price-oriented, homey style.
As selected by the Tribune’s Business editors. A local roundup will be published Sunday.
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Compiled by Tribune staff reporter Mike Hughlett
