HALLIBURTON... worst case?!?

verfasst von leibovitz, 07.12.2001, 19:18

schön wie die analysten durch die blumen reden.. kennt jemand den wirklichen worst case????

merrill lynch:
At this point, we do not believe that HAL’s ultimate asbestos liability will be
crippling financially, but we once again reiterate our position that HAL is
likely to repeat its pattern of underperforming as asbestos information is
released even with the $10+ asbestos discount already priced into the stock.


salomon smith barney:

ANALYSIS
In our report on August 22, 2001, we review the nature of the asbestos liabilities at Halliburton. To paraphrase, there are four buckets (actually three and a half). First are claims related to Brown & Root construction projects, second are claims related to refractory products made by Harbison-Walker (H-W), and third are other former Dresser Industries products. The H-W claims fall into two categories, those filed before the 1992 spin-off of HW
for which Dresser (now Halliburton) retained responsibility, and those filed after for which H-W was supposed to be responsible. The second quarter charge was taken to reserve for the potential that H-W may fail to fulfill its responsibility due to financial constraints. The charge was figured by taking the best estimate of the H-W cases still outstanding and multiplying by its historical settlement rate and insurance recovery rate. The H-W settlement
rate has been considerably higher than Halliburton’s average $750/claim (by nearly a factor of ten), but its insurance recovery, at 90%, has been higher than the Halliburton average.


Halliburton has an historical average net payout of approximately $200/claim over the roughly 175,000 claims it has settled.
The issue for investors is assessing the risk that in the future either the rate at which new claims are filed against the company increases, or that the net payout per claim increases - or both. Concerns on the first point were heightened by the June 10Q disclosure that almost as many claims were filed against the company in the first half of this year as in all of last year
(close to 50,000). These concerns should have been moderated by the third quarter disclosure that the claims rate had fallen back to the year ago rate in the quarter. However, this is an example of where the absence of historical quarterly claims filed data limits the analysis of the new information.


Concerns on the second point have been dramatically exacerbated of late by the recent jury awards, which are by far the largest in Halliburton’s history. Legal advisors generally prefer to say less than more, and the company has had jury awards made against it in the past, that were subsequently set aside or substantially reduced, however they were substantially smaller than these recent cases.


We continue to monitor the situation closely and we recognize the unpredictability and apparent irrationality of the asbestos litigation environment in general. For example, at least 95% of the claims filed against Halliburton are by claimants that have no symptoms of illness and a very small fraction, under 3%, have diagnosed cancer. Notably, the claimants in
both the Orange, Texas case and the Baltimore, Maryland case all had been diagnosed with cancer. In addition, each case that is filed against Halliburton has many other co-defendants, creating a degree of competition between defendants to avoid being tagged with a liability.
However, because of these factors and others, we cannot confidently develop a"worst case scenario" for Halliburton’s ultimate asbestos liability. While the company has recently improved its disclosure dramatically, the absence of some historical information does complicate the determination of whether the situation is deteriorating or not, and if so is it significant. We can, however, do the math that if one projected a net liability of $5B for
Halliburton over the next 10 years (assuming current tax rate, etc), the net present value of this liability would equate to approximately $5.40 per share.



<center>

<HR>

</center>

Thread gesperrt

 

gesamter Thread:

• HALLIBURTON... worst case?!? - leibovitz, 07.12.2001, 19:18
  • Re: HALLIBURTON... worst case?!? - McMike, 07.12.2001, 19:25
    • bis jetzt hat ers noch nicht gemeldet - leibovitz, 07.12.2001, 19:38
      • Re: Jetzt wissen wir auch, warum Cheney an einem geheimen Ort versteckt wird ;-) - monopoly, 07.12.2001, 19:42
    • Re: HAL inside findest du unter http://biz.yahoo.com/t/h/hal.html -- insider (owT) - Herbi, dem Bremser, 07.12.2001, 23:48
  • Re: HALLIBURTON... worst case?!? dead cat bounce? - Pancho, 07.12.2001, 19:49