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

Asbestos (Tables)

v3.7.0.1
Asbestos (Tables)
12 Months Ended
Mar. 31, 2017
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)   2017     2016     2015  

 Change in estimates:

     

 Change in actuarial estimate - asbestos liability

  $ 44.7        $ 2.4        $ (129.0)    

 Change in actuarial estimate - insurance receivable

    (8.2)         4.5          16.6     

 Change in estimate - AICF claims-handling costs

    2.1          1.2          1.1     
 

 

 

   

 

 

   

 

 

 

 Subtotal - Change in estimates

    38.6          8.1          (111.3)    

 Gain (loss) on foreign currency exchange

    1.8          (2.6)         144.7     
 

 

 

   

 

 

   

 

 

 

 Total Asbestos Adjustments

  $       40.4        $       5.5        $       33.4     
 

 

 

   

 

 

   

 

 

 

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 2017:

 

     Year Ended 31 March 2017  
(Millions of US and Australian dollars, respectively)                US$                A$      

Central Estimate – Discounted and Inflated

     1,330.1        1,740.1  

Central Estimate – Undiscounted but Inflated

     1,681.5        2,199.7  

Central Estimate – Undiscounted and Uninflated

     1,059.2        1,385.7  
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  
     2017     2016     2015     2014     2013  

Number of open claims at beginning of period

    426       494       466       462       592  

Number of new claims

    557       577       665       608       542  

Number of closed claims

    631       645       637       604       672  

Number of open claims at end of period

    352       426       494       466       462  

Average settlement amount per settled claim

    A$ 223,535       A$ 248,138       A$ 254,209       A$ 253,185       A$ 231,313  

Average settlement amount per case closed

    A$ 167,563       A$ 218,900       A$ 217,495       A$ 212,944       A$ 200,561  

Average settlement amount per settled claim

    US$ 168,300       US$ 182,763       US$ 222,619       US$ 236,268       US$ 238,615  

Average settlement amount per case closed

    US$ 126,158       US$ 161,229       US$ 190,468       US$ 198,716       US$ 206,892  
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)    2017      2016  

Asbestos liability – current

     $ (116.4)          $ (125.9)    

Asbestos liability – non-current

     (1,043.3)          (1,176.3)    
  

 

 

    

 

 

 

Asbestos liability – Total

     (1,159.7)          (1,302.2)    

Insurance receivable – current

     5.7           16.7     

Insurance receivable – non-current

     58.1           149.0     
  

 

 

    

 

 

 

Insurance receivable – Total

     63.8           165.7     

Workers’ compensation asset – current

     2.9           4.1     

Workers’ compensation asset – non-current

     40.4           46.8     

Workers’ compensation liability – current

     (2.9)          (4.1)    

Workers’ compensation liability – non-current

     (40.4)          (46.8)    
  

 

 

    

 

 

 

Workers’ compensation – Total

     -              -        

Loan facility

     (52.4)          (50.7)    

Other net liabilities

     (1.6)          (1.0)    

Restricted cash and cash equivalents of the AICF

     108.9           17.0     
  

 

 

    

 

 

 

Net Unfunded AFFA liability

     $ (1,041.0)          $ (1,171.2)    
  

 

 

    

 

 

 

Deferred income taxes – non-current

     356.6           384.9     

Income tax payable

     16.8           19.6     
  

 

 

    

 

 

 

Net Unfunded AFFA liability, net of tax

     $         (667.6)          $         (766.7)    
  

 

 

    

 

 

 
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 year ended 31 March 2017:

 

(Millions of US dollars)

  Asbestos
Liability
    Insurance
Receivables
    Deferred Tax
Assets
    Other Loan
Facilities
    Restricted
Cash and
Investments
    Other
Assets and
Liabilities1
    Net Unfunded
AFFA Liability,
net of tax
 

Opening Balance - 31 March 2016

  $ (1,302.2   $     165.7     $ 384.9     $ (50.7   $ 17.0     $ 18.6     $ (766.7

Asbestos claims paid

            90.7       -           -           -           (90.7     -           -      

Payment received in accordance with AFFA2

    -           -           -           -           91.1       -                 91.1  

AICF claims-handling costs incurred (paid)

    1.2       -           -           -           (1.2     -           -      

AICF operating costs paid - non claims-handling

    -           -           -           -           (1.5     -           (1.5

Change in actuarial estimate

    44.7       (8.2     -           -           -           -           36.5  

Change in claims handling cost estimate

    2.1       -           -           -           -           -           2.1  

Impact on deferred income tax due to change in actuarial estimate

    -           -           (11.5     -           -           -           (11.5

Insurance recoveries

    -           (93.3     -           -           93.3       -           -      

Movement in income tax payable

    -           -           (16.6     -           -           (2.5     (19.1

Funds received from NSW under loan agreement

    -           -           -           (77.0     77.0       -           -      

Funds repaid to NSW under loan agreement

    -           -           -              74.3       (74.3     -           -      

Other movements

    -           -                   0.8       -           (0.6     (1.4     (1.2

Effect of foreign exchange3

    3.8       (0.4     (1.0     1.0       (1.2     0.5       2.7  
 

 

 

 

Closing Balance - 31 March 2017

  $ (1,159.7   $ 63.8     $ 356.6     $ (52.4   $ 108.9     $     15.2     $ (667.6
 

 

 

 

 

1 Other assets and liabilities include an offset to income tax payable of US$16.8 million and US$19.6 million at 31 March 2017 and 2016, respectively. The remaining balance includes the other assets and liabilities of AICF, with a net liability of US$1.6 million and US$1.0 million at 31 March 2017 and 2016, respectively.

 

2 The payment received in accordance with AFFA of US$91.1 million reflects the US dollar equivalent of the A$120.7 million payment, translated at the exchange rate set five days before the day of payment.

 

3 For the year ended 31 March 2017, the Asbestos adjustments of US$40.4 million on the Company’s consolidated statements of operations and comprehensive income include the effect of foreign exchange above of US$2.7 million, which is partially offset by the loss on the foreign currency forward contract associated with the AICF payment of US$0.9 million.