BP analysis.......
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BP analysis.......

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    Senior Member Big Warlock's Avatar
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    Default BP analysis.......

    Here's an analysis developed by a friend and sent to the editors of several eastern seaboard papers. Looks okay to me. What’s your view?



    It seems like a miracle that our beloved leader was able to convince BP to establish a $20 billion slush fund (oops, escrow) to compensate those hurt by the ongoing oil plume in the Gulf of Mexico. After all, he had no constitutional power to force them to do so.


    But, let us take a closer look at the effect on BP’s finances:

    1. BP will establish a $20 billion fund, but will pay only $7 billion into it during 2010.

    2. BP is a British corporation, but has a very large operating entity in the US.

    3. By Generally Accepted Accounting Principles (GAP), BP must book the entire $20 billion expense in the year accrued. Therefore, they will book a $20 billion expense in 2010, reducing their US tax liability by $7 billion.

    4. Our dear leader also convinced this massive corporation to show their concern for the “small people” by withholding dividends to their shareholders for the last 3 quarters of 2010. This reduces their outward cash flow by about $7.5 billion, including approximately 40% of that amount to US citizens. Assuming that the Bush tax cuts will survive through 2010, the US Treasury will lose another $450 million in taxes on that amount. We won’t even discuss the effect on the US economy.



    Let us put the results into a table easily understood by the small people:

    · BP Cash Flow:

    O Escrow funding ($7 billion)

    o Dividend saving $7.5 billion

    o Tax savings $7 billion

    o Net favorable cash flow : $7.5 billion



    · US Treasury Tax Receipts:

    o BP Corporate income tax ($7.5 billion)

    o BP Shareholders ($0.45 billion)

    o Net unfavorable tax receipts ($7.95 billion)



    I guess we really should expect this. After all, our dear leader is the most inexperienced man in any room he walks into. Question: Did the US Taxpayers just fund the first 1/3 of the BP Escrow commitment?

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  3. #2
    Ultra26 # 1
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    Quote Originally Posted by Big Warlock View Post
    Here's an analysis developed by a friend and sent to the editors of several eastern seaboard papers. Looks okay to me. What’s your view?



    It seems like a miracle that our beloved leader was able to convince BP to establish a $20 billion slush fund (oops, escrow) to compensate those hurt by the ongoing oil plume in the Gulf of Mexico. After all, he had no constitutional power to force them to do so.


    But, let us take a closer look at the effect on BP’s finances:

    1. BP will establish a $20 billion fund, but will pay only $7 billion into it during 2010.

    2. BP is a British corporation, but has a very large operating entity in the US.

    3. By Generally Accepted Accounting Principles (GAP), BP must book the entire $20 billion expense in the year accrued. Therefore, they will book a $20 billion expense in 2010, reducing their US tax liability by $7 billion.

    4. Our dear leader also convinced this massive corporation to show their concern for the “small people” by withholding dividends to their shareholders for the last 3 quarters of 2010. This reduces their outward cash flow by about $7.5 billion, including approximately 40% of that amount to US citizens. Assuming that the Bush tax cuts will survive through 2010, the US Treasury will lose another $450 million in taxes on that amount. We won’t even discuss the effect on the US economy.



    Let us put the results into a table easily understood by the small people:

    · BP Cash Flow:

    O Escrow funding ($7 billion)

    o Dividend saving $7.5 billion

    o Tax savings $7 billion

    o Net favorable cash flow : $7.5 billion



    · US Treasury Tax Receipts:

    o BP Corporate income tax ($7.5 billion)

    o BP Shareholders ($0.45 billion)

    o Net unfavorable tax receipts ($7.95 billion)



    I guess we really should expect this. After all, our dear leader is the most inexperienced man in any room he walks into. Question: Did the US Taxpayers just fund the first 1/3 of the BP Escrow commitment?
    Theory seems flawed to me.

    For BP to save 7 billion dollars in Federal Tax, it must profit 20 billion dollars in the US. This factor trashes the entire analysis.

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    Senior Member Big Warlock's Avatar
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    Quote Originally Posted by Ultra26 # 1 View Post
    Theory seems flawed to me.

    For BP to save 7 billion dollars in Federal Tax, it must profit 20 billion dollars in the US. This factor trashes the entire analysis.

    I think it is sating that it would have made $20 billion in profit but gained offsets of 20 billion making it have no taxable income.

    I didn't get into it too deep. I pulled it from e mail I was going through!

    Damn critics!!

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    Ultra26 # 1
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    Quote Originally Posted by Big Warlock View Post
    I think it is sating that it would have made $20 billion in profit but gained offsets of 20 billion making it have no taxable income.

    I didn't get into it too deep. I pulled it from e mail I was going through!

    Damn critics!!
    Lol

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    "On the road again..." Old Texan's Avatar
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    Even though they tend towards not the smartest folks shitting behind 2 shoes, there are reasons things like this should run through proper channels and be put before Congress. O again outstepped his bounds in cutting a direct deal with BP it seems.

    Whether the original math was correct or not, the whole picture needs to be looked at closely before throwing that kind of money around. BP needs to pay and still maintain their tax obligations or the taxpayer again gets screwed.

    So far the payouts have not been going smoothly as there are many having difficulty explaining viable claims and having their monies withheld. I know one fishing charter company didn't even get back the amounts they paid out in refunds for cancellations much less compensation for lost business. It's getting to be quite a mess establishing historical sales/numbers for many companies and businesses. There needed to be far more insight factored in to dtermine fair methods of distibuting the costs to the "little people".
    "Bottle by bottle, I'm clearing off that shelf...."

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    Senior Member SBjet's Avatar
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    Your 'friend' has been busy, that comes up multiple times on google.
    Any time you take a charge against earnings, you are going to reduce taxable income.
    This says BP refused to cancel the dividend (rightfully so).
    http://projectworldawareness.com/201...row-fund-deal/
    Quote Originally Posted by Tom Brown View Post
    I'm still chuckling at being "poo-pooed" for straying off topic. Awesome.

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    Quote Originally Posted by Old Texan View Post
    Even though they tend towards not the smartest folks shitting behind 2 shoes, there are reasons things like this should run through proper channels and be put before Congress. O again outstepped his bounds in cutting a direct deal with BP it seems.

    Whether the original math was correct or not, the whole picture needs to be looked at closely before throwing that kind of money around. BP needs to pay and still maintain their tax obligations or the taxpayer again gets screwed.

    So far the payouts have not been going smoothly as there are many having difficulty explaining viable claims and having their monies withheld. I know one fishing charter company didn't even get back the amounts they paid out in refunds for cancellations much less compensation for lost business. It's getting to be quite a mess establishing historical sales/numbers for many companies and businesses. There needed to be far more insight factored in to dtermine fair methods of distibuting the costs to the "little people".
    Imagine that OldTex. A big arse pr campaign out of the White House with no follow up or end result. It's really just an extension of the initial campaign by O.

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    "On the road again..." Old Texan's Avatar
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    Quote Originally Posted by redneckcharlie View Post
    Imagine that OldTex. A big arse pr campaign out of the White House with no follow up or end result. It's really just an extension of the initial campaign by O.
    And we aren't even touching on the oil field businesses that are suffering from the spill and the proposed or court fought moratorium. Everyone is scared to spend even if they have the money.

    This admin reacts, they do not think through the effects of their actions. It's still all about image and the media continues at the national level to extoll the WH decisions. On the local and regianal level, not so much. It's easy to understand how both O and congress are dropping in approval polls, they are earning distrust daily with boneheaded moves.
    "Bottle by bottle, I'm clearing off that shelf...."

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    Living in a cage of fear thatguy's Avatar
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    You know, I am just a simple kind of guy. 11th grade drop out, put myself through machine shop school at age 18 (1979).
    Built race cars and engines for 8 years or so and started in the oilfield around '87-'88.

    I only know what I see and what I make of it.
    I've done OK.
    Here is one thing I know from observation and experience.
    Oil Companies like BP ALWAYS WIN. Even when they pay a fine, they will come out of it the best way possible.
    When they have a catastrophe, they will settle the financial liabilities in the manner which will benefit them the most, or cost them the least, while still satisfying the negotiated penalty.
    They ARE NOT going to arbitrarily hand out cash at a kool-aid stand to anyone who asks. They have been vilianized forever, and that is fine with them.
    They have literally FLEETS of accountants and lawyers, and pay them TOP dollar. (MUCH more than a Gov. lawyer, for instance)

    To think that someone like O, polosi, or any other of the non-working, teat sucking politicians can come out of any deal and "win" against BP is ludicrous.
    Take O, for instance. This guy has NO business experience, Nada, none. Do you really think that he can out maneuver a Company that is the epitome of Global profit and cash flow??
    A company that has buildings stuffed with some of the smartest accountants and lawyers on the planet?
    Not going to happen.
    (Side Note: BP has thousands of employees with medical coverage. No one seems to know exactly what is all in the HC law. I would BET that BP has HC lawyers that know EVERY DETAIL of every page of that law, and have already planned strategies to circumvent costly areas, as well as challenge in court areas that "disturb" current coverage.)

    My point is, there is no surprise here. BP is ten moves ahead of the bumbling thieves on the Hill, make no mistake about it.
    Penalize them? Go ahead, we'll pay it in the end. (No pun intended)

    They had a catastrophic accident, caused by short cutting supervisors on that location. 11 Men died. They are liable, they know it, heads will roll and jail time and penalties will be paid. BUT, they will litigate every single step of the way, as well they should. Any deal like the 20 billion will be agreed to only
    if BP sees a way to come out OK with out litigation.

    It is what it is, good or bad.
    Tommy

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    i'm a blind dumb liberal.
    Quote Originally Posted by Tom Brown View Post
    Obama also possesses extreme intellect.


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    "On the road again..." Old Texan's Avatar
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    Very good synopsis TG. I agree 100%. I've been dealing with these companies for years and eveything is on their terms if they can help it and even in emergenecy situations they find a way to get on top.

    I was trying to get an invoice paid some years back and was having trouble finding the purching agent in charge of the project. I asked a guy who worked with the company that I'd known for a few years on a personal basis, why is was so hard to find the right person. His reply, "It's kinda of a rule that when calling on an invoice, the person in charge of that project is the one on vacation that week and they have enough people that someone is always on vacation...." And he was serious.

    These companies keep some serious bean counters and lawyers and make money off everything they do, god, bad or otherwise. If they don't make money outright, they cut the hell out of their losses.

    This is why I think O should have the sense to allow congress and a committee of actual capable negotiators to arrange how payouts are made. It's the public who is going to get hurt while the media blames the oil company on O's behalf.
    "Bottle by bottle, I'm clearing off that shelf...."

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    To be expected, afterall they worship at the altar of the mighty $

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    "On the road again..." Old Texan's Avatar
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    The almighty $ is what makes the world go around. We just need to learn better how to spend it, especially when it's taxpayer $$$$$ or taxpayer's needing the $$$$ taken away by someone else's screwups. The Fed and BP are both repsonisible in this case, starting back at the beginning of why the hell drilling was forced to go so far offshore when reserves in safer areas were available.

    Money isn't evil, it's the various ways it's earned/obtained and handled that become evil and troublesome. Too many of the wrong people making big decsions for the wrong reasons are at the core of the problem.
    "Bottle by bottle, I'm clearing off that shelf...."

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    Ultra26 # 1
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    Quote Originally Posted by Old Texan View Post
    The almighty $ is what makes the world go around. We just need to learn better how to spend it, especially when it's taxpayer $$$$$ or taxpayer's needing the $$$$ taken away by someone else's screwups. The Fed and BP are both repsonisible in this case, starting back at the beginning of why the hell drilling was forced to go so far offshore when reserves in safer areas were available.

    Money isn't evil, it's the various ways it's earned/obtained and handled that become evil and troublesome. Too many of the wrong people making big decsions for the wrong reasons are at the core of the problem.
    Well put OT

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    Senior Member SBjet's Avatar
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    x2, nice one OT
    Quote Originally Posted by Tom Brown View Post
    I'm still chuckling at being "poo-pooed" for straying off topic. Awesome.

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