Does DLJ know anything new on MDR or are they rehashing what the world's already known?
This is from the last 10Q, filed 8/11/99. Does anyone know when the new 10Q will be filed? I need to spend some time this weekend with it.-ng-
NOTE 2 - PRODUCTS LIABILITY
McDermott has personal injury claims related to previously sold asbestos-
containing products, and expects that it will continue to receive claims in the
future. The personal injury claims are similar in nature, the primary
difference being the type of alleged injury or illness suffered by the
plaintiff.
10
<PAGE>
McDermott has insurance coverage for asbestos products liability claims, which
is subject to varying insurance limits that are dependent upon the year
involved. McDermott has agreements with the majority of its principal insurers
concerning the method of allocation of claim payments to the years of coverage.
Pursuant to those agreements, McDermott negotiates and settles these claims and
bills the appropriate amounts to the insurers. An analysis of insurance coverage
and solvency is used to estimate insurance recoveries. McDermott has recognized
a provision to the extent that recovery of these amounts from the insurers is
not probable.
Estimated liabilities for pending and future non-employee products liability
asbestos claims are derived from McDermott's claims history and constitute
management's best estimate of such future cost, including recoverability from
insurers. Inherent in the estimate of such liabilities are expected trend claim
severity and frequency and other factors, which may vary significantly as claims
are filed and settled.
McDermott had recorded the following with respect to asbestos products liability
claims and related insurance recoveries at June 30 and March 31, 1999:
<TABLE>
<CAPTION>
June 30, March 31,
1999 1999
----------- ----------
(Unaudited)
(In thousands)
<S> <C> <C>
Asbestos products liability:
Current $ 300,000 $ 240,000
Non-current 1,157,445 1,322,363
-------------------------------------------------------------------------
Total $1,457,445 $1,562,363
-------------------------------------------------------------------------
Asbestos products liability insurance recoverable:
Current $ 257,000 $ 199,750
Non-current 1,025,274 1,167,113
-------------------------------------------------------------------------
Total $1,282,274 $1,366,863
-------------------------------------------------------------------------
</TABLE>
Future costs to settle claims, as well as the number of claims, could be
adversely affected by changes in judicial rulings and influences beyond
McDermott's control. Accordingly, changes in the estimates of future asbestos
products liability and insurance recoverables and differences between the
proportion of any additional asbestos products liabilities covered by insurance,
and that experienced in the past could result in material adjustments to the
results of operations for any fiscal quarter or year, and the ultimate loss may
differ materially from amounts provided in the consolidated financial
statements. |
