Johns-Manville Corporation Annual Report (1980)

Johns-Manville Corporation's 25-page annual report for 1980, with net sales of $2.27 billion and net earnings of $80.6 million. Its note on asbestos litigation reported that at the end of 1980 the company was a defendant in 5,087 asbestos/health suits brought by about 9,300 plaintiffs, up from 2,707 cases at the end of 1979 and 1,181 at the end of 1978, and that the average cost of disposing of a claim had risen to $23,300 from about $13,000 before 1980. It said "no reasonable estimate of loss can be made and no liability has been recorded," and that depending on how the uncertainties were resolved, "the cost to the Company could be substantial."

What it shows

The report gave the company's defenses: that it "had no special knowledge not in the possession of the plaintiffs' employers," that it had ceased making asbestos thermal insulation in the United States by 1973, and that with the OSHA limits of 1972 and 1976 "no significant new potential liabilities have been created." It also disclosed that J-M had sued its insurers for a declaratory judgment on its coverage. The figures show how fast the claims grew between 1978 and 1980.

In Johns-Manville's index

Johns-Manville's legal department indexed the Motley 1,000 in 1984. Its index describes this document as follows:

J-M Annual Report, 1980. It is stated in the Report that "uncertainties exist concerning the eventual outcome and ultimate liability to the Company with respect to asbestos/health litigation. It is anticipated, however, that costs associated with asbestos/health litigation will not have a material effect on the Company's liquidity during the next few years, if ever." Several pages later the Report states that the growth in the number of claims and in the average disposition cost per claim has significantly increased the uncertainties as to the future number of similar claims which the Company may receive and the future disposition costs of the pending and future claims. "Also during 1980, in order to resolve uncertainties as to the correct interpretation of a number of provisions in the various policies of insurance maintained by the Company and applicable to these claims, it was necessary for the Company to bring a declaratory judgment action to have such issues resolved by a court of law ... The eventual outcome of the asbestos/health litigation cannot be predicted at this time and the ultimate liability of the Company after application of available insurance cannot be estimated with any degree of reliability. Depending on how and when these uncertainties are resolved, the cost to the Company could be substantial."

About this copy

This is document 839 of the Motley 1,000, from the set the Manville Personal Injury Settlement Trust's records facility certified as true copies, pages CRMC-Motley1000-Subj-004515 to CRMC-Motley1000-Subj-004539.