Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

Asbestos (Tables)

v3.20.1
Asbestos (Tables)
12 Months Ended
Mar. 31, 2020
Text Block [Abstract]  
Asbestos Adjustments
The Asbestos adjustments included in the consolidated statements of operations and comprehensive income comprise the following:
 
Years Ended 31 March
(Millions of US dollars)
2020
 
2019
 
2018
Change in estimates:
 
 
 
 
 
Change in actuarial estimate - asbestos liability
$
(133.8
)
 
$
(73.8
)
 
$
(152.1
)
Change in actuarial estimate - insurance receivable
5.7

 

 
1.2

Change in estimate - AICF claims-handling costs
0.1

 
1.1

 
(0.5
)
Subtotal - Change in estimates
(128.0
)
 
(72.7
)
 
(151.4
)
Effect of foreign exchange on Asbestos net liabilities
69.0

 
49.5

 
(5.3
)
Gain (loss) on foreign currency forward contracts
0.8

 
(0.8
)
 
1.4

Adjustments in insurance receivable

 
2.0

 

Asbestos research and education contribution

 

 
(1.1
)
Total Asbestos Adjustments
$
(58.2
)
 
$
(22.0
)
 
$
(156.4
)


Central Estimates, Net of Insurance Recoveries
The following table sets forth the central estimates, net of insurance recoveries, calculated by KPMGA as of 31 March 2020:
 
Year Ended 31 March 2020
(Millions of US and Australian dollars, respectively)
US$ 
 
A$
Central Estimate – Discounted and Inflated
1,250.9

 
2,025.2

Central Estimate – Undiscounted but Inflated
1,368.3

 
2,215.2

Central Estimate – Undiscounted and Uninflated
897.1

 
1,452.4


The following table summarizes the results of the analysis:
 
As of 31 March 2020
(Millions of US and Australian dollars, respectively)
US$
 
A$
Discounted (but inflated) - Low
913.0

 
1,478.2

Discounted (but inflated) - High
2,109.3

 
3,414.9

 
 
 
 
Undiscounted (but inflated) - Low
984.3

 
1,593.6

Undiscounted (but inflated) - High
2,385.2

 
3,861.7


Numbers of Open Claims, New Claims and Closed Claims and Average Settlement Per Settled Claim and Case Closed
The following table shows the activity related to the numbers of open claims, new claims and closed claims during each of the past five years and the average settlement per settled claim and case closed:
 
For the Years Ended 31 March
  
2020

 
2019

 
2018

 
2017

 
2016

Number of open claims at beginning of period
332

 
336

 
352

 
426

 
494

Number of new claims
657

 
568

 
562

 
557

 
577

Number of closed claims
596

 
572

 
578

 
631

 
645

Number of open claims at end of period
393

 
332

 
336

 
352

 
426

Average settlement amount per settled claim
A$277,000
 
A$262,000
 
A$253,000
 
A$224,000
 
A$248,000
Average settlement amount per case closed
A$245,000
 
A$234,000
 
A$217,000
 
A$168,000
 
A$219,000
 
 
 
 
 
 
 
 
 
 
Average settlement amount per settled claim
US$189,000
 
US$191,000
 
US$196,000
 
US$168,000
 
US$183,000
Average settlement amount per case closed
US$167,000
 
US$171,000
 
US$168,000
 
US$126,000
 
US$161,000

Asbestos-Related Assets and Liabilities These amounts are detailed in the table below, and the net total of these asbestos-related assets and liabilities is referred to by the Company as the “Net AFFA Liability.”
 
 
31 March
(Millions of US dollars)
 
2020
 
2019
Asbestos liability – current
 
$
(103.9
)
 
$
(110.5
)
Asbestos liability – non-current
 
(882.5
)
 
(979.1
)
Asbestos liability – Total
 
(986.4
)
 
(1,089.6
)
Insurance receivable – current
 
5.0

 
7.5

Insurance receivable – non-current
 
38.5

 
43.7

Insurance receivable – Total
 
43.5

 
51.2

Workers’ compensation asset – current
 
1.5

 
2.0

Workers’ compensation asset – non-current
 
20.7

 
25.8

Workers’ compensation liability – current
 
(1.5
)
 
(2.0
)
Workers’ compensation liability – non-current
 
(20.7
)
 
(25.8
)
Workers’ compensation – Total
 

 

Other net liabilities
 
(2.0
)
 
(2.1
)
Restricted cash and cash equivalents of AICF
 
36.4

 
39.8

Restricted short-term investments of AICF
 
21.6

 
17.7

Net Unfunded AFFA liability
 
$
(886.9
)
 
$
(983.0
)
Deferred income taxes – non-current
 
319.1

 
349.3

Income tax payable
 
23.4

 
25.3

Net Unfunded AFFA liability, net of tax
 
$
(544.4
)
 
$
(608.4
)

Summary of Net Unfunded AFFA Liability, Net of Tax
The following is a detailed rollforward of the Net Unfunded AFFA liability, net of tax, for the fiscal year ended 31 March 2020:
(Millions of US dollars)  
Asbestos   
Liability   
 
Insurance
Receivables
 
Restricted
Cash and Investments
 
Other
Assets
and Liabilities
 
Net Unfunded AFFA Liability
 
Deferred Tax
Assets
 
Income
Tax
Payable

 
Net Unfunded AFFA Liability, net of tax
Opening Balance - 31 March 2019
$
(1,089.6
)
 
$
51.2

 
$
57.5

 
$
(2.1
)
 
$
(983.0
)
 
$
349.3

 
$
25.3

 
$
(608.4
)
Asbestos claims paid1
104.6

 

 
(104.6
)
 

 

 

 

 

Payment received in accordance with AFFA2

 

 
108.9

 

 
108.9

 

 

 
108.9

AICF claims-handling costs incurred (paid)
1.0

 

 
(1.0
)
 

 

 

 

 

AICF operating costs paid - non claims-handling

 

 
(1.7
)
 

 
(1.7
)
 

 

 
(1.7
)
Change in actuarial estimate
(133.8
)
 
5.7

 

 

 
(128.1
)
 

 

 
(128.1
)
Change in claims handling cost estimate
0.1

 

 

 

 
0.1

 

 

 
0.1

Impact on deferred income tax due to change in
actuarial estimate

 

 

 

 

 
38.4

 

 
38.4

Insurance recoveries

 
(7.6
)
 
7.6

 

 

 

 

 

Movement in income tax payable

 

 

 

 

 
(25.8
)
 
0.8

 
(25.0
)
Other movements

 

 
3.2

 
(1.1
)
 
2.1

 
0.3

 

 
2.4

Effect of foreign exchange
131.3

 
(5.8
)
 
(11.9
)
 
1.2

 
114.8

 
(43.1
)
 
(2.7
)
 
69.0

Closing Balance - 31 March 2020
$
(986.4
)
 
$
43.5

 
$
58.0

 
$
(2.0
)
 
$
(886.9
)
 
$
319.1

 
$
23.4

 
$
(544.4
)

Schedule of Remaining Time Deposits
The remaining time deposits bear a fixed interest rate and have a maturity as follows:
Maturity Date
Interest Rate
 
A$ Millions
30 April 2020
1.70%
 
20.0
1 June 2020
1.70%
 
15.0