OK, FOLKS, Here are the highlights from my conversation with Kyle in I.R. BTW - I suggest you all call him.
Here are some important details -
1) HAL has resolved 194,000 claims since 1976 at a cost of just $200 per claim after insurance to the company. (i.e. net of $38 M)
2) There are a total of about 146,000 open claims currently.
3) Most of the open claims don't appear to be very significant (i.e. my assumption) as 109,000 of those 146,000 still open claims are against a Dresser subsidiary called Brown and Root (sp?) that HAL acquired in the 1998 merger with Dresser. These 109K claims involve asbestos washers in pumps that were sold.
4) Most claims are related to their merger with Dresser in 1998 for which they have purchased over $2 Billion in insurance coverage, which they feel is more than adequate. HAL is only responsible for the PRE-1992 per agreement with Harveson-Walker, who is responsible for the Post-1992 claims.
5) Some of the recent 5 awards for damages were higher than in the past to be sure, but HAL was not even responsible for all of them, even though they were named in the suit. Some of the suits are totally against Harveson-Walker, as they were Post-1992. The others are being appealed by HAL and may not be decided for 18 months.
6) The number of new claims may be slowing down and most are being settled quickly. They are as follows:
Q1 - 18,000 new, most settled already
Q2 - 27,000 new, most settled already
Q3 - 13,000 new (incidentally, 11,000 of the 13,000 have already been settled).
7) Company will again address these issues in teh upcoming C.C. next wednesday. Phone number is 913-981-5507 code: 445815
In Dec.'s C.C. they spoke of the:
** $250M in cash,
** $2.7B in other working capital,
** a reduction of debt to cap from 40% to 25%,
** and their strong insurance coverage
Hope this helps a little. Apparently all this info is in their 10Q and other docs. |
