Staying the course in Iraq

#26
#26
CSpindizzy said:
They took losses because, again, they had to refund quite a large amount of money.
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They had to pay back $200M...they lost $820M in 2003 alone! So, I believe they would have taken the losses anyway, this just makes that loss move from $820M to a little over a billion dollars in one fiscal year.
 
#27
#27
CSpindizzy said:
Losses from 2002-2004 are mostly attributed to asbestos related lawsuits. In January 2005, KBR exited Chapter 11 due to this lawsuit being settled.

Financials

The company's contracts in Iraq are expected to have generated more than $13 billion in sales by the time they start to expire in 2006, but most offer low margins — less than 2% on average in 2003 and just 1.4% this year for the logistics work [citation needed] making these contracts less profitable than Halliburton's core energy business. The contracts in Iraq will be more profitable after the US Army reimburses them for costs that were originally investigated as potentially inflated. [citation needed]
KBR has contracts in Iraq worth up to $18 billion, including a single no-bid contract known as "Restore Iraqi Oil" (RIO) which has an estimated worth of $7 billion.
An audit of KBR by The Pentagon’s Defense Contract Audit Agency (DCAA) found $108 million in "questioned costs" and, as of mid-March 2005, said they still had "major" unresolved issues with Halliburton.
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They could generate over $26 billion in sales, as long as the expenses are higher, then they still generate a net loss. Nothing you have provided here proves anything at all.
 
#28
#28
Again, asbestos lawsuits and being in Chapter 11 is far different from the noble job they did in Iraq.
 
#29
#29
therealUT said:
They could generate over $26 billion in sales, as long as the expenses are higher, then they still generate a net loss. Nothing you have provided here proves anything at all.
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Are you blind? I guess paying out in lawsuits somehow does not get applied to losses for a year...
 
#30
#30
CSpindizzy said:
Are you blind? I guess paying out in lawsuits somehow does not get applied to losses for a year...
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Not blind, I am in fact reading KBR's actual financials in relation to the lawsuits. The settlement calls for only $46M to be paid and expensed in 2003, the rest goes to their balance sheet as a liability (to you, who apparently knows absolutely nothing of accounting:HAS NO EFFECT ON THE CURRENT YEAR'S BOTTOM LINE). So, thanks for calling me blind...

Wait, since the math might be confusing to you, as apparently reading a simple annual report is, (820)-(46)=(774) Yes, without the lawsuit, Halliburton still would have shown a net loss of $774,000,000 for 2003.
 
#32
#32
CSpindizzy said:
Please post those financials....
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Here you go. BTW, DII industries is not a subsidiary of Halliburton and the agreement by Halliburton to pay the $156M in no way means they paid it that year. The payments made by KBR in 2003 were the $24 and the $22.

However, even if you decide to throw the $156M into the pot, Halliburton still experienced a loss of $618M. Heck, throw in the $311M that DII agreed to pay, and there is still a $317M loss. Basically, what I am saying here is: Any way you try to slice this, you are wrong about Halliburton losing money solely because of a lawsuit and because they had to repay the DoD.

In connection with reaching an agreement with representatives
of asbestos and silica claimants to limit the cash required to
settle pending claims to $2.775 billion, DII Industries paid
$311 million on December 16, 2003. Halliburton also agreed to
guarantee the payment of an additional $156 million of the
remaining approximately $2.5 billion cash amount, which must
be paid on the earlier to occur of June 17, 2004 or the date on
which an order confirming the proposed plan of reorganization
becomes final and non-appealable. As a part of the definitive
settlement agreements, we have been accruing cash payments in
lieu of interest at a rate of five percent per annum for these
amounts. We recorded approximately $24 million in pretax
charges in 2003 related to the cash in lieu of interest. On
December 16, 2003, we paid $22 million to satisfy a portion of
our cash in lieu of interest payment obligations.
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#33
#33
So are you still saying all of that loss is from Iraq? You're still not acknowledging the money they had to refund for shoddy work as well.
 
#34
#34
While we're at it, what all work did they do in Iran during W's administration while the US government and the world enacted sanctions on Iran?
 
#35
#35
CSpindizzy said:
So are you still saying all of that loss is from Iraq? You're still not acknowledging the money they had to refund for shoddy work as well.
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The money they had to refund would only make the losses more severe. Hard concept to grasp?
 
#37
#37
CSpindizzy said:
While we're at it, what all work did they do in Iran during W's administration while the US government and the world enacted sanctions on Iran?
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I could care less about what they did in Iran. The Halliburton/KBR discussion hinges on SWILs comment that Halliburton has gotten rich off of this war. I have proven that is not the case.
 
#39
#39
therealUT said:
I could care less about what they did in Iran. The Halliburton/KBR discussion hinges on SWILs comment that Halliburton has gotten rich off of this war. I have proven that is not the case.
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That's a stretch. You have not shown that these losses are all from Iraq. A company can make money from one operation while losing more in other areas.
 
#40
#40
CSpindizzy said:
Not if those are already in the totals. Harder to grasp.
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That would be money from the US government, ie revenue. It would not be an expense until it had to be paid back. So, prior to it being paid back, it would actually increase income (or lessen the loss.) When it was paid back, it would decrease income (increase the loss.)
 
#41
#41
therealUT said:
I could care less about what they did in Iran.
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And that is your problem. You pick and choose what is wrong and what is right. This seems to be a problem with many out there. They will have problems with the weapons for food program with Saddam but have no problem with another company doing business with Iran.
 
#42
#42
When many of the contracts were not paid up front, it is not revenue.

You're still not answering the question and showing that the work in Iraq was a loss.
 
#43
#43
CSpindizzy said:
When many of the contracts were not paid up front, it is not revenue.

You're still not answering the question and showing that the work in Iraq was a loss.
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Actually, you do not recognize the revenue until you do the work. It is called accrual basis accounting and it is not dependent upon when you actually receive the cash (you should really take at least a beginner level accounting course.)

Halliburton lost 103.2M from its operations in Iraq during 2003 and 2004, according to a March of 2004 article in the Washington Post. Of course, the Post definitely has a conservative agenda...:peace2:
 
#45
#45
CSpindizzy said:
So there is nothing from KBR indicating this?
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Not in their financial statements at least. There is no GAAP regulation that states that coorporations must detail every last transaction for the public. So, KBR does not list out their revenues and expenses by country...neither do many international coorporations. All a coorporation does by publicizing that great of detail is open themselves up to more taxation in foreign markets.
 
#47
#47
CSpindizzy said:
So back to the original point how can you disprove Iraq made them rich?
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Everyone else reading this exchange can clearly see that Halliburton and KBR were not raking in great deals of money, they were losing money. You are apparently trying to create an argument out of thin air. Halliburton lost $820M in 2003, and you try to contribute it to a lawsuit that totaled out as annual expenses at around $46M. Then you try to use some kind of new math to state that the repayment of over $200M would actually make the financials look better. After seeing the error of you ways, then you state that their is no concrete proof that the Iraq operation was losing money. Yes, maybe, as Halliburtons largest contract, it was profiting quite nicely, while every other operation Halliburton was involved in was absolutely tanking! Nevermind that the cost plus contract that KBR had with the Federal Government was settled at less than 3% of certain costs. Basically, the largest contract that Halliburton had, was a cost plus contract that brought in 2.3B in revenue on 2.23B in costs(or less than 60M in profit, at most.) So, with their largest contract they are only bringing in 60M in revenue, yet with all their smaller contracts they are losing $880M? The only way for your argument to fly would be to state that Halliburton is the absolutely worst run coorporation in history. Yet, you try to shake my argument because KBR does not break down their expenses into regions...
 
#48
#48
OK. Once again, I will repeat myself. Can one contract or one area not be bringing in a profit? If a company was clearly losing money left and right but somehow making a profit on this supposed largest contract, all of those tiny contracts were sending the company into the drink. It seems quite odd that the largest contracts as you claim generate a small profit, however small as you say, but the minority of the business would have such a negative effect on the company. How can that be?
 
#49
#49
If they were taking such a huge loss, why did they stay in it? Obviously they were making money from somewhere, I seriously doubt they're stupid enough to lose money.
 
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