Harvey Keitel: The Art Of Darkness :: essays research papers

Harvey Keitel: The Art of Darkness   Ã‚  Ã‚  Ã‚  Ã‚     Ã‚  Ã‚  Ã‚  Ã‚  Harvey Keitel was born in Brooklyn, New York, on May 13, 1939. Harvey was the youngest of 3 children, one brother and one sister. Harvey’s childhood was rough. He spent most of his times on the streets of New York. He was raised in a rather bad neighborhood, and he began to hang out with a local gang. Although things were bad, every summer he would go to Coney Island, climb rocks, and fish. He was a normal child raised in a very dangerous place, but he knew what was the right thing and what was the wrong thing to do. Although he was in a gang, he never really got himself into much trouble.   Ã‚  Ã‚  Ã‚  Ã‚  At the age of 16, Harvey Keitel did not know what to do with his life, so he decided to enlist in the Marines. Harvey was stationed in Lebanon, and stayed there for his 3 year term. When Harvey got out of the Marines in 1959, he was still unsure of what he wanted to do for a living. For the time being, he began a job as a shoe salesman. About a year later from selling shoes, Harvey began to take an interest in becoming an actor. He began to try out for part in off Broadway plays. Stella Adler and Strasberg found promise in Harvey Keitel, and they began to teach him ways to become a better actor. Even under these two stars wings, finding work was still very hard for Harvey. He did find some job opportunities in very off Broadway plays. While Harvey Keitel was a very good actor, it did not look like he was going to be going anywhere with acting.   Ã‚  Ã‚  Ã‚  Ã‚  Harvey Keitel was about to give up on acting altogether, but he decided to give it a second chance when he answered a newspaper ad by Martin Scorsese, who at the time, was a NYU student looking for actors for his thesis work, Who’s That Knocking On My Door?. When Harvey and Martin met, they became fast friends, and have stayed friends since than. Keitel has worked with Scorsese many times since than, and only Robert De Niro has worked with Scorsese more than Keitel.   Ã‚  Ã‚  Ã‚  Ã‚  Things were looking good for Harvey Keitel, but his career took a downfall when he was passed over for a role in Francis Ford Coppola’s Apocalypse Now.

Electric utility Essay

Doctor’s office – job shop or project. All patients do not require the same procedures, namely the service offered are custom in nature. Automatic car wash – assembly line flow. There is a linear sequence of operations common to all cars. College curriculum – can be any: Assembly line flow: if same curriculum is required of all students, batch: if curriculum is tailored to some degree, or project: if curriculum is tailored to individual students. Studying for an exam – project. The studying process is unique to each student for different, unique exams. Registration for classes – assembly line. All students must largely complete the same sequence of steps which vary little regardless of the program of study. Electric utility – continuous process as the product is highly standardized and can be automated to a great degree in order to better achieve a low unit cost. Q2. Why are assembly-line processes usually so much more efficient but le ss flexible than batch processes? Give three reasons. Reasons for efficiency, but less flexibility of the line than the batch process: a. Standardization of tasks b. Standard products c. Highly automated d. Specialized equipment e. Unskilled or semi-skilled labor Q3. The rate of productivity improvement in the service industries has been much lower than in manufacturing. Can this be attributed to process selection decisions? What problems would be involved in using more efficient processes in service industries? Yes, the rate of productivity improvement in the service industries can be partly attributed to process selection  decisions. Service industries typically select a batch or project process to provide customized service. This is usually less efficient than the assembly line or continuous process approach. The problems in using more efficient processes in the service industries are: Possible customer dissatisfaction with standardized product Need for extensive capital investment Need for high and stable volume, particularly without inventory Difficult to specify exact process sequence The customer can be involved in the process during production of the service and create unique demands or inefficiencies. Q6. Compare the expensive restaurant, fast-food restaurant, and cafeteria in terms of process characteristics such as capital, product type, labor, planning, and control systems. The project process, typically used for skyscraper construction, probably does lead to higher costs because the volume of skyscraper construction is low. To make a batch process preferred would require construction of some number of identical skyscrapers. This seems both unlikely and aesthetically undesirable. Perhaps, however, sections of skyscrapers could be standardized and produced by batch processes while still maintaining the appearance of unique buildings. This would be a modular approach to the problem. Q7. An entrepreneur is planning to go into the food business. How would he or she decide whether to open a cafeteria, fast-food restaurant, or fine restaurant? What factors should be considered in this decision? He would have to consider marketing operations, and financial aspects of the problem. The factors to be considered are: Cafeteria Fast Food Fine Restaurant Capital Requirements Heavy initial investment to set up cafeteria line. Low inventory. Medium initial investment, but higher inventory needs. Lower initial investment medium inventory. Market Conditions Need for large body of steady customers; mobile market. Inexpensive market. Competition very intense. Need for large and inexpensive market. Competition fairly intense. Need for expensive Less danger from competition. Labor Low skilled labor at low cost. Low skilled labor at low cost. Highly skilled cooks and waiters required. Technology Most risky. Less risky. Little risk. Q10. What are the strategies of the following organizations? Is the strategy defined in terms of product or process or both? McDonald’s. AT&T Telephone Co. General Motors. Harvard Business School. Distinctive Competence Product/Process McDonald’s Restaurant Fast, inexpensive, quality food, pleasant atmosphere . Product & Process AT&T Telephone Company Highest volume of calls Best technology Process Ge neral Motors Its reputation, number of dealers Product & Process Harvard Business School Case method Process Q12. A new business is considering starting up a new plant to produce low-volume, standard products. They are hoping that the business will grow and the products eventually will become successful and sell in high volumes. a. The business should consider using a batch process that is flexible enough to be modified into a line process when the products become successful and sell in high volume. b. The business should expect the need to invest more when it eventually uses a line process. It may be necessary to purchase special purpose equipment when the products sell in high volume for a long period of time. Lower skills, lower pay and more repetitive tasks may characterize the future labor force. Q1. Classify the following services by their degree of customer contact (high, medium, or low). Also, determine how much uncertainty the customer introduces into the system by the ability to make customized service demands (high, medium, or low). Check clearing in a bank. Bank teller. Bank loan officer. Customer contact customized service demands Check clearing in a bank Low Medium Bank teller High Low Bank loan officer Medium High Q5. Describe the service-product bundle for each of the following services: Hospital. Lawyer. Trucking firm. Trucking firm is tangible service – explicit service what the provider does for customer Hospital is psychological benefits – implicit service how customer feels after service Lawyer is physical goods – facilitating goods used during service or received by customer Q10. Why is the service-profit chain important to operations management? The service-profit chain model tries to link all the components required to make an organization successful. According to this model, a company that performs well in one aspect and poorly in another will eventually develop problems that affect the entire organization. This working model highlights the importance of the links between quality management, a good work force and exceptional service to the customer. Q14. How can we use the service matrix to improve service operations? The Service Process Matrix is a classification matrix of service  industry firms based on the characteristics of the individual firm’s service pr ocesses. The Service Process Matrix can be useful when investigating the strategic changes in service operations. In addition, there are unique managerial challenges associated with each quadrant of the matrix. By paying close attention to the challenges associated with their related classification, service firms may improve their performance. Also, the Service-System Design Matrix is a useful tool for understanding the different elements Service Design Matrix of a service system. Q16. What key factors are most firms seeking when they offshore services? Transaction-intensive services becoming commoditized. Professional services more commonly offshored High-end niche providers are globally dispersed Firms moving fast to scoop up global talent Collaboration and maintaining quality challenging with globally dispersed providers

Is Single Life or Married Life Better Essay

In my culture, you used to be required to be married in order to be treated as a grown up or an adult. That concept had been in my culture for more than a thousand years. As time changed, that concept has somewhat changed too. Nowadays, being married in an option. Many people prefer to stay single and are living happily with their choices, but many others disagree. They think that you need to be married to achieve ultimate happiness. So, what are the differences between being married and being single? The three most popular arguments between a married life and a single life are freedom, social ife and finance. Let’s start with the first difference: freedom, since it is the first thing you give up when you marry to someone. Coming along with marriage is responsibilities, it means that you have to take care of your partner, your children, you cannot just decide to do anything on your own anymore. You can’t take off and do anything you want anymore, because most of your time will be dedicated to your family. So, whenever you want to go out with your friends, you need to ask your partner for permission. Things are ifferent when you are single. When you are single, you have full control over your life, you are not bound to any responsibility but your own. If you need to take a break from the stress from your work, you can just take off by yourself. When you want to go out with your friends, you don’t need to ask anyone’s permissions. In contrast, you have busy life taking care of you parent and your children, and you don’t get enough time to go out and enjoy yourself. If you’re married, you don’t have to worry about your social life. It won’t be a hassle if you ecide to go out or need someone to hang out with because your partner will always be there. Since you and your parent have become a package, your amount of friends will become double concluding your partner’s source of friends. You get to meet more people with more choices of activity. But, things are much more difficult for a single person than a married couple in social life. People who are single always have to worry about their companion whenever they are out. They don’t have such a stable friend or partner every time they go out. Instead, they need to call many friends before they find a suitable partner for the night, or they need to spend more time making new friends. Also their choices of activity are limited and predictable since there are only some activity for single person. So in comparison, people who are married will save time in finding a partner for their social activity with a lot more choices. Last but not least, finance. It is very controversy topic whether you will save more money staying single or earn more money being a married couple. According to Tom Van Riper on Forbes. com, married couples have the advantage in the short term compared to single life, where only 9. 3% of monthly gross income goes for rent compared with 23% for single, 5. 6% vs. 8. 3% for food, 1% vs. 1. 8% for cable television, and 1. 2% vs. 2. 8% for telephone bill. In addition, auto insurers place married couple in a lower risk class, saving them money on car insurance. On the other hand, once the children enter the picture, which can bring a married couple in financial trouble, a child’s cost can goes up to $4000 per onth ascending in ages. Despite the expenses, single people actually do better in buying houses. Annually, standard deduction for a single person is $4,750 per year, where married couple stands at $7,950 per year. Moreover, married couple tend to start saving for retirement early on, while singles generally wait until they’re 40, which means singles have more free cash in their pocket than married couple. As I stated in the introduction, nowadays, being single or married is a choice, which many eople choose differently according to the perks they encountered. But beyond the perks, you need to choose wisely with another point of view where you can acknowledge advantage and disadvantage of being single or married. Married life comes with responsibility, where you need make the correct decisions every day and taking care of your partner and your children; while single life offers freedom, escape from the burden of responsibilities, but lonely in the late years of your life. It has been always a tough decision.

Anthro Exam Notes and Review

Biological Anthropology – can demonstrate: how populations vary (biological variations; hair color, blood type, etc. ) that past populations have evolved that modern human populations are evolving and changing through time. Biological/ Physical Anthropology: Foundations In offs ? recognition of variation, concern over how species came to be. Major research areas: Paleontology's – anthropology concerned with fossil hominids; study of human evolution.Pharmacology – belonging to same taxonomic order as humans; study of vying primates; study of nonhuman primates. Human Variation – to describe and explain biological differences between various human populations. Biological study areas and specializations: Molecular anthropology Astrology (study of skeletons) Paleontology Forensic anthropology 2. Archaeology – the study of the human past through material remains found In the present. Don't do dinosaurs, few do pyramids, and fewer do space aliens. Basic Pr emise of Archeology: Material remains studied were created and deposited in the past, but are studied in the present.Surviving archaeological record is typically a pale reflection of what actually happened in the past. Prehistoric Archeology: 99% of human history is unrecorded before present historic archeology studies. Archeology today: Trash In landfills Is usually a good representation of the state of the economy (poor economy – less trash). August 24. 2012 Applied Anthropology: Work for non-academic clients, such as government agencies, community groups, and businesses. All four sub-disciplines Cultural, Linguistic, Physical (Biological), Archaeology August 27, 2012 Research Ethics: Informed Consent:Especially when performed on human subjects Medical research means the subject must be protected and aware of test What Is Who is sponsoring the research? Who can you call with questions? Personal safety and safety of the subjects Interpretation of data gathered: Mimic categor ies Used by the people interviewed Ethic categories Used by ethnographer Research Process: Formulating research questions Obtaining funding Conducting the research Interpreting the research Publishing the results Subject Position(s) of the Ethnographer(s): Country of origin Region, community Class Race/EthnicityGender/Sexual orientation Age Life experience Social Theories Current at the Time Research Conducted: Interactions that occurred during fieldwork: How the people being represented choose to represent themselves to the ethnographer. How the ethnographer represents him or herself and interprets the interactions then and later. Historical Events: Before and during the research Types of Studies: Community studies Comparative studies Multi-sited (several research areas) Problem-oriented research Longitudinal research Team research Theoretical Trends in Cultural Anthropology: Historical Particularistic:In the United States Franz Boas = father of anthropology in the United States Fo cus on Native Americans Describe cultural artifacts, knowledge Assumption: Indigenous cultures were disappearing in the face of modernity, so anthropologists needed to â€Å"salvage† that knowledge. Another important goal: argued that cultures are very complex and all components off culture matter. Ruth Benedict Margaret Made 0 Patterns of culture, culture and personality Structural Functionalism: Developed in Britain and France What are the functions of structures and how do they make everything work?Theory sakes away from the fact that society can function organically and doesn't address what happens if the society is not functioning properly or is malfunctioning. Influenced a lot of ideas about religion and society. Bronchial Mammalians Polish, taught in Britain Credited as the person who came up with doing extensive field research for a year (living in the culture). Developed out of fieldwork that it is not enough to tell the natives to come up to the house and do intervi ews, but you must live with the people of a village and see what happens on a day-to-day basis to really understand the society.A. R. Radcliff-Brown Research in Africa Claude Levi-Strauss French Took Structural Functionalism and worked it with the mind Cultural Evolution and Cultural Ecology: Concerns: Adaptations to environments Historical Ecology says you cannot assume that things are organically created but you must consider people of the past. Leslie White, Julian Steward, etc. Political Economy: Concerns: Power relations and social inequalities Pay attention to the relationships and power differences within a particular society or culture. Stresses social inequalities based on class Influenced by the Marxist theoryCultural Interpretation and Reflexive Ethnographers: Reflections about power relations involved in ethnographic research and writing. In particular, reflections about the role of the ethnographer in conducting and writing up the research. Questions scientific claims t o objectivity and truth. The idea that you must be someone from outside of the culture to analyze the culture because you will be more objective was questioned because what about the language or the subtle aspects of the culture that an outsider could not understand. Situates ethnography in history versus â€Å"ethnographic present† which made impersonations about groups.Early ethnographers were written in present tense. Present tense had a tendency to represent the cultures as unchanging. August 29, 2012 Paul Arabian (1977): 1968 0 12 years after Morocco had achieved independence from France Arabians Subject Position Research Process Richard Abraham (taught Arabian Arabic; Arabian saw Abraham as a friend) All Meeker Milk Post Modern, Post-colonial Feminist, Diaspora Studies, etc. Changes in the forms of modern society Accounts for disparities among countries and the historical legacies of European colonialism.Accounts for inequalities based on sex, gender, and race-ethnicity that were not sufficiently counted for by political economy's. Tong: Cathy A. Small (1997): Voyages: from Tong Villages to American Suburbs History Smalls subject position Research process Key cultural consultants Other research methods Self-Reflexive Ethnography US Immigration Policy: 1796 0 Free White Persons (men) ASSES O Slavery ends 1824/1924 0 National Origin Quota – Laws 1965 0 Immigration and Nationality Act 1986 0 Immigration Reform and Control Act Legal Permanent Residency: Family Reunification 2005: of 1. Lion Skilled workers Investors Random lottery 2000: 8 million applicants 1 10,000 selected 178 Tongs Refugees/political asylum cases Remittances is the money immigrants send back. Material wealth important for some aspects of life in Tong. Tong: History 1500 B. C 0 Polynesians come to settle 875 0 Stratified Chiefdom Low chiefs Specialists Commoner farmers 1150 0 ‘Lounge' Tu† Tong capital 1 575 0 4-tiered tomb September 5 Tong: Kava Drinking Ceremonie s – people were arranged and served by their social status; typically women do the serving to men. Religion: ‘Original' godsHouse's (Supreme god) Loyola (rain, wind, agriculture, harvest) Maim (holding up the islands) 5 sea gods; god for craftsmen At least 300 gods ‘Soul' gods ‘Mischievous' gods Celebrations: Community celebrations and exchanges Ceremonial wealth (kola) Tap cloths and mats; baskets of food Blankets, cash, etc. Weddings and funerals First birthday, 21st birthday Tautology Special dance performed by women; could be difficult learn Kinship and Raising Children: The Tong way (nag factions) Respect (including tapes) Children could not touch top of father's head Exchanges, obligations (gave)Outside/inside Expectation that cooking is outside of house and eating is separated from cooking. Kinship and Households: Father = head; disciplinarian Brothers, sisters Relationship becomes a lot more formal after puberty. Eldest brother, eldest sister High ex pectations; must fulfill roles if a death occurs. Eldest son's futuristic privilege is that they inherit the land. Father's sister Could have the children if she wanted; very important role.Mother's family Adoption Contact with Europeans: 1616, 1643 0 Dutch explorers asses 0 Captain James Cook (British) 1797 0 London Mission Society (Boson) sass 0 Cargo ships, Whalers asses 0 Wesleyan Methodist missionaries; Wars of Succession/Civil Wars and conflicts between chiefs 1834 0 Rising Chief converts 1845 0 Becomes King George I 1875 0 Some chiefs, land, taxes, etc. 1900 0 British Protectorate 1954 0 Independence Mourning period for a kings death is 10 days. Businesses are expected to be closed during the mourning period.With the last kings death the mourning period was deck September 10 Culture At least ‘365' different definitions â€Å"Complex whole which includes knowledge, belief, arts, morals, law, custom, and any there capabilities and habits acquired by man as a member of so ciety' (Taylor 1871). Going to be a member of a specific society Characteristics of Culture: Learned Keeping 2-3 feet of space between you and someone you don't know intimately was never a taught thing, but is learned implicitly by observation.Systems of Symbolic Meanings Religious symbols (I. E. A cross) entail a lot of meaning people. Culture teaches us how to express biological or natural ‘urges' in particular ways. What, when, and how to eat All-encompassing In other words, not restricted to ‘high culture, fine arts, great literature, etc. All that relates to everyday life. Integrated Different aspects of culture are interrelated, patterned systems. Social scientists focus a lot of attention on trying to determine various patterns and relationships.Changes in one aspect of culture usually entail changes in other aspects. Example: increasing numbers of women in the U. S working outside the home from the asses on. People use culture actively and creatively. Culture as a ‘process' vs.. A thing. Once you start thinking of culture as a process, change can take place. Various forms of knowledge and practice Culture can be adaptive or maladaptive with respect to the (natural and/or cultural) People raised with certain rules and norms, BUT Rules and norms vary according to subject positions of individuals.Gender, age, etc. They are subject to interpretation. They can be contested and changed. There are struggles within cultures (and among different groups of people) over the meanings of symbols, ideas, values, and practices. Ideals: what people say they do or should do. Practices observed by members of that society (as well as anthropologists). Levels of Many cultures have origins before nation-states were ever created. However, today: International or transnational cultures Spread of global capitalism, commercialism.Many struggles over values and meanings. National cultures Subcultures (within nations) I. E. The South in the U. S. Has several di stinguishing factors. Region, ethnicity, language, class, religion, age, etc. Cultural Relativism Practices in one culture should not be Judged by the standards of another culture. Vs.. Ethnocentrism, Human Rights, Cultural Rights Analyzing Cultures Universities You must eat, you must sleep, etc. Generalities Common in many different cultures ParticularitiesSeptember 12 Rites of Passage Separation, Limitability, Incorporation Collective Limitability Community spirit, solidarity, effervescence (some) social hierarchies are temporarily suspended. Equivalent of Carnival in Brazil is Marci Grass in the United States. Religion Beliefs and rituals concerned with supernatural beings, forces, and powers (Wallace 1966: 5 cited in Cotta). Rituals Formal, stylized, repetitive, stereotyped, practices usually performed in special places at set times. Social acts, typically with groups; participation, versus audience, religious/secular Functions of ReligionPersonal or group transformations Throug h rituals and rites of passage Create a sense of group unity Through shared practices (rituals and rites) Explain the mysterious Reduce anxiety, offer hope Help people cope with adversity Joy, fear, etc. Reduce or create anxiety Control nature and/or social worlds Achieve specific aims Provide moral codes (or values) Guide practices and beliefs Produce regret, guilt, shame Produce the need for forgiveness Capote's in Southern Mexico and live in Cacao and use the economic system of Slaughter to fund economic practices.

Defining Terrorism

If people around the world were surveyed and asked to define terrorism, the answers would be seemingly endless. It has been said, â€Å"one man’s terrorist is another man’s freedom fighter. † From culture to culture, people view terrorism in a different way. An inherent definition of terrorism would be the act of creating terror, but not everyone is terrified of the same thing. So how then is it possible to come up with one definition for the word? â€Å"A 2003 study by Jeffrey Record for the US Army quoted a source that counted 109 definitions of terrorism that covered a total of 22 different definitional elements. [1] In the book Understanding Terrorism, the author Anthony Marsella comes up with â€Å"four problems associated with efforts to define terrorism today: (a) there have been historical changes in the definition, (b) media and states have been inconsistent in their use of the term, (c) there are multiple definitions across agencies even within a sing le country such as the United States, and (d) there is international disagreement on the definition of the term. †[2] Some views of terrorism say that it must have political goals, while other do not believe this. Some views state that it must be innocents or civilians who are the victims, while other definitions do not believe this. Another argument is whether or not the terrorists must be non-state actors. Definitions are different based on whether they were created for legal purposes or international agencies. In this paper, I will go through some of the different arguments in order to provide a clearer sense of what terrorism truly means in this day in age. Most books written on terrorism begin by giving a definition of the word in the author’s opinion in order to put it into context for the remainder of the book. The entire first chapter of Bruce Hoffman’s book Inside Terrorism is dedicated to trying to define terrorism. Terrorism now seems to be a part of our everyday life. It appears as though every act of violence is perceived as being ‘terrorism. ’ Every time violence occurs people immediately think terrorism. The term terrorism is so hard to define and there is so much controversy about how to define it that it is easy to make the assumption that all violence is terrorism. At the same time, because of the controversy, many media sources are reluctant to use the word. Instead, they give attacks different titles. The Oxford Canadian Dictionary defines terrorism as the â€Å"systematic employment of violence and intimidation to coerce a government or community, especially into acceding to specific political demands. †[3] This definition might satisfy Hoffman because he believes it must be stressed that terrorism is the use or threat of violence to achieve a political aim. [4] Without a political aim, there cannot be terrorism. Nor can there be terrorism without the threat or use of violence. Hoffman believes it is difficult to define terrorism because of its ever-changing meaning throughout history. A factor that makes defining terrorism difficult is that the definition has changed over time. The original definition of the word is no longer the definition used today. The word originally gained support during the French Revolution as part of the â€Å"Reign of Terror. † The purpose was to scare people in order to prevent further revolutions from occurring. The terror was created by the state. Although the definition has changed since the â€Å"Reign of Terror,† there are two points that are similar in today’s definition. First, the regime de la terreur was neither random nor indiscriminate, as terrorism is often portrayed today, but was organized, deliberate, and systematic. †[5] Terrorists plan out their attacks, they are not random or spur of the moment. Targets in present day are often chosen based on what will receive the most media attention. â€Å"Second, its goal and its very justification was the creation of a â€Å"new and better society† in place of a fundamentally corrupt and undemocratic politically system. †[6] Simply put, terrorist attacks occur in order to achieve a political goal. Later, during the Industrial Revolution, Carlo Pisacane argued that the most effective way to publicize his cause was through violence, and that no other means would generate the same amount of attention. [7] This revolutionary-style terrorism remained up until the First World War. â€Å"By the 1930s the meaning of â€Å"terrorism† had changed again and was used to describe the practices of mass repression employed by totalitarian states and their dictatorial leaders against their own citizens. †[8] After the Second World War, the term returned to the original connation of a revolutionary type act. Up until the 1960s, terrorism was largely considered to be domestic. In the late 1960s and 1970s, terrorism began to become more international. It is important to discuss the three types of terrorism: international, domestic and â€Å"new terrorism. † Domestic terrorism is terrorism that takes place against people within your country. International terrorism is terrorism that takes place against people by a group that is not native to the country. New terrorism may have no political aims, but instead are more religious based and mainly concern themselves with destruction. The textbook The Globalization of World Politics states that there are â€Å"three factors that led to the birth of transnational terrorism: the expansion of air travel; the wider availability of televised news coverage; and the broad common political and ideological interests. †[9] These terrorist attacks initially took form in airplane hijackings, but as security tightened up, the terrorists instead chose American targets in foreign countries. Since the September 11th attacks on the United States, international terrorism is mainly what people think of when they think of terrorism. Those attacks were very publicized and had a huge impact on international relations. As well as understanding the different types of terrorism, it is also important to distinguish the difference between a terrorist, a guerrilla and a ‘freedom fighter. ’ â€Å"The freedom fighter conducts a campaign to liberate his people from dictatorial oppression, gross disarmament, or the grip of an occupying power. †[10] A guerrilla is fighting against a military and most importantly the terrorist goes after civilians. Any group can use terrorism to achieve their goals. In the book Terrorism: The New World Order, Fotion et al explain that there are narrow and broad views of terrorism. The narrower views insist that victims of terrorism must be innocent. A problem with the narrower view is that although it is most often innocents who are targeted by terrorists, they did not see a distinction. Whether they target a military organization or innocent civilians, they are performing terrorist acts. Their objective does not change based on who they are attacking from one day to the next. Their goal is to demoralize their opponent. It is very hard to differentiate the difference between a guerrilla and a terrorist. Although a guerrilla would be attacking military personnel, they could be labelled differently based on their intentions. They could be attacking merely to kill and weaken their opponents or they could be attacking in order to scare the opponents into possibly retreating. By defining terrorism as only attacking civilians, it makes analyzing terrorism a lot more difficult. Fotion et al discussed the paradigmatic scheme, which represents the most generally accepted view of a terrorist attack. [11] â€Å"An attacking group (or individual) victimizes some group of people by harming or killing them. The attackers then escape either before, during or after the victimizing event. Others, seeing what has happened to the victim group become terrorized (frightened, anxious, etc. ). We will call this the immediate effect or result of the process of creating victims. While in their state of terror, they pressure their government to change its political outlook in a way that satisfies the goals of the attackers and, most likely, displeases the government and many of its people. This pressure and resulting changes count as the secondary effect or result of the victimization process. [12] The book Terrorism: The New World Order points out that the word terrorism is seen as having negative connotation, so those who are often labelled as such, would try and find a definition that does not apply to them. [13] â€Å"Those labelled â€Å"terrorists† by their opponents rarely identify themselves as such, and typically use other terms or terms specific to their situation, such as separat ist, freedom fighter, liberator, revolutionary, vigilante, militant, paramilitary, guerrilla, rebel or any similar-meaning word in other languages and cultures. [14] In the past, people did not hide behind these labels and proclaimed themselves as terrorists and their tactics to be terrorism. [15] This inability for people to acknowledge they are terrorists makes coming up with a definition near impossible. Robert Keeley wrote an entire article about trying to define terrorism. In this article he pointed out that freedom fighters and terrorists are two different things, however freedom fighters often use terrorism. [16] Keeley believes aims of terrorism include â€Å"to advertise for the terrorists’ cause and to weaken morale on the attacked side and build up morale on the attacking side. [17] Because of the pejorative connotation of the word, during warfare, groups often label their opponents as ‘terrorists’ in order to gain more support for their own side. Thi s furthers the difficulty of defining terrorism, as everyone wants to say their opponent is a ‘terrorist,’ which makes everyone a terrorist. At the end of his article, Keeley did not seem to be any closer to finding a true definition than at the beginning. In the book Terrorism: Origins and Evolution, Lutz and Lutz say there are six main parts to defining terrorism. They believe that violence is directed to political ends and that there must in fact be violence or a serious threat of violence. Terrorism must affect a wide range of people, not just the victims of the action. People need to be aware when a terrorist act has happened; there must be an audience. If no one is aware of an occurrence, then the attack has failed. Terrorism is organized and it is performed by a non-state actor. It is important to note the difference between war and terrorism. In simplest words, a war is a conflict between two organized groups. The difference between a war and terrorism is that terrorism occurs by a non-state organization. In recent years, with the availability of the Internet, it has become much easier for terrorists to spread their ideas. It is now simpler to gain the audience that is required to be a successful terrorist. Finally, they believe that terrorism is a weapon of the weak. Terrorist acts occur when the terrorists have no other options in order to achieve their political goals. [18] Though there are many definitions for the word terrorism, it seems that all the definitions stressed that it is political in nature. The act is used to achieve a political aim through the means of violence. Terrorists do not require extensive supplies and the goal is to gain support and demoralize their opponent. As long as those who may be seen as terrorists find other names to describe themselves, unwilling to admit that they are a terrorist, I believe it will continue to be difficult to agree on a specific definition. With no one willing to admit to being a terrorist, the word becomes completely subjective. There will always be controversy over finding one definition, especially with the â€Å"new terrorism† in which religion plays a huge role. These terrorists want nothing, but to create terror and cause destruction. They do not fit in the accepted definition of violence with a political motive, yet what they are doing is creating terror and therefore should be considered terrorism. People will find ways to describe themselves as anything but, and their opponents will try to stress that they are in facts terrorists. â€Å"Terrorism is ultimately a form of psychological warfare, nd it is designed to induce fear. †[19] BIBLIOGRAPHY Baylis, John, and Steve Smith. Globalization of World Politics an Introduction to International Relations. 3rd ed. Oxford: Oxford University Press, 2005. Bisset, Alex, ed. â€Å"Terrorism. † The Canadian Oxford Paperback Dictionary. Oxford: Oxford UP, 2000. Fotion, Nicholas, Joanne K. Lekea, and Boris Kashnikov. Terrorism The New World Dis order (Think Now). New York: Continuum International Group, 2008. Hoffman, Bruce. Inside Terrorism. New York: Columbia University Press, 2006. Jackson, Robert, and Georg Sorensen. Introduction to International Relations: Theories and Approaches. 3rd ed. Oxford: Oxford University Press, 2007. Keeley, Robert V. â€Å"Trying to Define Terrorism. † Middle East Policy IX. 1 (March 2002): 33-39. Lutz, James Michael, and Brenda J. Lutz. Terrorism Origins and Evolution. New York: Palgrave Macmillan, 2005. Moghaddam, Fathali M. , and Anthony J. Marsella, eds. Understanding terrorism psychosocial roots, consequences, and interventions. Washington, DC: American Psychological Association, 2004. Terrorism Research Center, What is the Definition of Terrorism? (n. . ) Available from: Charles Townshend, Terrorism: A Very Short Introduction (Oxford: Oxford University Press, 2002). Whittaker, David J. Terrorists and terrorism in the contemporary world. London: Routledge, 2004. ———————– [1] Fathali Moghaddam et al. Understanding terrorism psychosocial roots, consequences, and interventions. (Washington: American Psyc hological Association, 2004), 14. [2] Fathali Moghaddam et al. Understanding terrorism, 15. [3] Alex Bisset, ed. â€Å"Terrorism. † The Canadian Oxford Paperback Dictionary. (Oxford: Oxford UP, 2000), 1085. 4] Bruce Hoffman. Inside Terrorism. (New York: Columbia University Press, 2006), 3. [5] Hoffman. Inside Terrorism, 4. [6] Hoffman. Inside Terrorism, 4. [7] Hoffman. Inside Terrorism, 5. [8] Hoffman. Inside Terrorism, 14. [9] John Baylis et al. Globalization of World Politics an Introduction to International Relations. 3rd ed. (Oxford: Oxford University Press, 2005), 482. [10] David J Whittaker. Terrorists and terrorism in the contemporary world. (London: Routledge, 2004), 4. [11] Nicholas Fotion et al. Terrorism The New World Disorder (Think Now). New York: Continuum International Group, 2008), 4. [12] Fotion et al. Terrorism The New World Disorder, 4. [13] Fotion et al. Terrorism The New World Disorder, 1. [14] Hoffman. Inside Terrorism, 20. [15] Hoffman. Inside Terrorism , 21. [16] Robert V Keeley. â€Å"Trying to Define Terrorism. † Middle East Policy IX. 1 (March 2002): 34. [17] Keeley. â€Å"Trying to Define Terrorism,† 36. [18] James M. Lutz et al. Lutz, James Michael, and Brenda J. Lutz. Terrorism Origins and Evolution. (New York: Palgrave Macmillan, 2005), 9. [19] Lutz et al. Terrorism Origins and Evolution, 8.

Chesapeake Energy Corporation

natural gas† {Chesapeake Annual Report, 1998, p. 1}. Recently, Chesapeake finished the transformation from an aggressive exploration company focused on developing short-reserve life, to a lower-risk, longer reserve life natural gas producer. Chesapeake†s operations are focused on â€Å"developmental drilling and producing property acquisitions.† These operations are â€Å"concentrated in three major areas: the Mid-continent, the onshore Gulf of Mexico and far northeastern British Columbia, Canada† [Chesapeake Annual Report, 1998, p. 1]. Aubrey K. McClendon is Chesapeake†s Chairman of the Board, Chief Executive Officer and Director. Tom L. Ward is the President, Chief Operating Officer and Director. â€Å"McClendon met cofounder Tom Ward in the 1980†³s. Both were independent oil producers; they teamed up in 1983† [Morgenson, p. 2]. They each have more than 16 years of experience in the oil and natural gas industry. All other members of the management team have multiple years of experience in the industry. Chesapeake has concentrated on expanding its holdings in natural gas since the company†s incorporation in 1989. Chesapeake thinks that natural gas will be the fuel choice of the 21st century. The company has been highly competitive in both its exploration activities and efforts to increase its inventory of undeveloped leasehold land. This combination should enable Chesapeake to remain a competitive force in the energy producing industry. New technology in the oil and gas industry has made exploration and production more profitable. This is key for the survival of American businesses that compete with OPEC and other foreign cartels that have very low production costs. New technology, including three-dimensional imaging, which has greater resolution than the previously existing technology, will enable Chesapeake to detect reserves more accurately. Also, horizontal drilling has enabled companies to drain more than one reserve at a time. With profits continuing to be squeezed within this industry, new technology is necessary to help American businesses compete on a global scale. The oil and gas industry is truly a global market. The industry boosted gains in 1999 from increased production efficiency and a decrease in the current supply. U.S. firms, along with OPEC, have voluntarily reduced their total production, which has increased the price. OPEC currently supplies approximately 40% of the world oil production. If OPEC chooses to produce at a lower output, Chesapeake could easily increase production with its low production costs and huge reserves. Many other nations are emerging as competitors, such as the former Soviet Union and Latin American countries. The continuing increase in supply from other nations would potentially saturate the market, causing lower prices and lower profits. Demand is expected to rise only slightly more than two percent through the year 2005. The outlook for this industry is for increased competition domestically (from smaller companies) and internationally from emerging nations. The U.S. has superior technology, which will help keep profits up as supply increases and demand remains relatively constant. Natural gas makes up 72% of Chesapeake†s revenue. They usually sell the product to third parties and are not dependent on any one buyer. Less than 10% of their revenues are generated from two buyers. Governmental Regulations – Operational and Labor Relations The oil and gas industries are subject to considerable government regulation. These laws and regulations are primarily directed toward â€Å"the handling and disposal of drilling and production waste products and waste created by water and air pollution control devices† [Chesapeake 10-K, 1998, p. 10]. The oil and gas industry is accountable to numerous government agencies, including the Environmental Protection Agency, the Department of the Interior, the Department of Energy, the State Department and the Department of Commerce. Virtually every aspect of operations is subject to complex and ever changing regulations. The oil and gas industry is tightly regulated in regard to labor relations by government department and agencies, including the Occupational Safety and Health Association (OSHA) and the National Labor Relations Board (NLRB). Some states have their own state sponsored occupational safety plans, while the remainder must comply with federal OSHA regulations. Some of the topics covered under OSHA include personal protective equipment, hazardous communication (HAZCOM) and safety process training. Chesapeake had 453 employees as of March 15, 1999. None of these employees were represented by organized labor unions. The company considers its employee relations to be good [Chesapeake 10-K, 1998, p. 13]. Unocal (NYSE: UCL) employed 7,880 people as of December 31, 1998, of which 575 were represented by various U.S. labor unions [Unocal 10-K, 1998, p. 12]. Both companies are subject to new laws and regulations regarding the environment and labor. Chesapeake and Unocal cannot predict what adverse financial conditions the new laws and regulations will bring. However, short-term and long-term costs will increase as companies improve existing operations to become and remain compliant with government regulations. As a result, all companies in petro-chemical industries are experiencing tremendous difficulty operating profitable businesses. Several businesses have ceased operations as a result of increased regulation coupled with poor profit margins. Chesapeake is at a higher risk regarding this scenario since most of its operations are domestic. Unocal, although a U.S. based company, operations are concentrated primarily overseas, and therefore experience increased leniency regarding environmental and labor regulations. During the last two years, Chesapeake Corporation took a significant hit in terms of earnings, stock price and credit ratings. Positive 1996 earnings turned to a loss in 1997 and tumbled to a bigger loss of $10 per share in 1998. This earnings decline caused the stock price and credit rating to plummet. The company also faces a class action lawsuit stemming from alleged violations of federal securities laws. Top management and directors are accused of using insider information to sell personal holdings in the company at artificially inflated prices. Chesapeake had very disappointing years in 1997 and 1998 as evidenced by the fall in the stock price. The company underwent a substantial repositioning to increase natural gas holdings and reduce risk. As a result of this repositioning, Chesapeake incurred considerable debt and is dependent on the market prices of oil and natural gas to increase, and in effect, improve profit margins. Additionally, in 1997, Chesapeake changed their fiscal year end from June 30th to December 31st. As part of the repositioning, Chesapeake increased long term debt over $400 million to a total of $920 million, coupled with a short-term indebtedness of $25 million. This increased borrowing drastically reduced the company†s ability to obtain additional financing. Standard Poor†s and Moody†s placed Chesapeake on review with a negative outlook. The ability to meet obligations for this additional debt will depend on the production and financial performance of the company, market prices of oil and natural gas, and general economic conditions. Common Size Income Statement Analysis Chesapeake had an extremely large write-down of assets (impairment) as a result of reduced oil and gas prices during the past few years. This charge increased operating costs by over $1.2 billion during 1997-98 with 72% of that cost coming in 1998. The asset write-down, combined with expense increases in production, marketing and interest, were the main contributors of total operating costs to be over three times total revenue. The result was 1998 EBIT of ($920) million, and a non-existent ROE, since the company had a net loss approaching $1 billion. Unocal†s ROE was 5.9% in 1998 and 25.1% in 1997. The impairment cost reported by Chesapeake is questionable because of the very large amount that was charged. In perspective, Unocal with over $5 billion in property assets recorded an impairment charge of $97 million during 1998. If oil and gas prices rise in the near future, the impairment costs may be reversed giving the impression that the company is doing very well. Future investors of Chesapeake equities should consider this fact prior to making any investment decisions. Chesapeake had a $140 million reduction to both sides of the balance sheet. The repositioning of the firm focused on increasing inventory of natural gas reserves, â€Å"the fuel of choice for the 21st century† [1998 Annual Report, pg. 18]. Oil and gas properties nearly doubled from 1997 to 1998, totaling $2.2 billion. However, nearly $1.6 billion was depreciated, depleted and amortized. Additionally, cash decreased nearly $100 million, short-term investments were liquidated, and paid-in capital exceeded $1.1 billion over the past two years to provide additional cash for purchases of gas reserves. As a result, total property, plant and equipment was 85% of total assets in 1998 compared to 77% in 1997. In comparison, Unocal†s PPE was 66% and 64% of total assets respectively. Long-term debt increased over $400 million in 1998, totaling $920 million compared to $510 million in 1997. The $920 million was 113% in relation to total liabilities and owners equity of $813 million. In 1998, current liabilities were $131 million compared to current assets of $118 million. This resulted in a reduced current ratio of .90 from a 1997 ratio of 1.42. The Unocal current ratios during 1998 and 1997 were 1.01 and 1.29 respectively. Chesapeake has relied primarily on cash flow through financing activities during the past few years. Cash flow from operations was approximately $95 million in 1998 and $180 million in 1997, while cash flow from financing was $365 million and $278 million respectively. Sales accounted for $378 million in 1998 and appear to be rising approximately 35% annually from 1996 and 1997. However, an accurate comparison is unavailable because of the change in the company†s fiscal year end. Low oil and gas prices forced Chesapeake to borrow, sell equity, and liquidate short-term investments in order to continue operations and invest in oil and gas properties. The company is dependent on the rise of prices during 1999 to continue operations and provide shareholder wealth. The company has several restrictions from being able to borrow additional funds. Additionally, the price of stock has dropped from a high of $34 in 1996 to a low of $.63 in 1998. This has further reduced the company†s ability to generate cash. The current ratios for Chesapeake Energy are as follows: 1.00 (June 96), 2.03 (June 97), 1.42 (December 97), and .90 (December 98). Current liabilities remained constant over this period, ranging from a high of 19% (June 96) to a low of 15% (June 97), with the current level at 16% of total assets. Extreme levels of change in current assets caused the current ratio to fluctuate drastically. Current assets declined from a high of $297 million (31% of total assets) to a current low of $117 million (15% of total assets). This decline in current assets caused the deterioration of the current ratio. The acid test ratios are as follows: .94 (June 96), 2.00 (June 97), 1.37 (December 97), and .81 (December 98). As previously mentioned, current liabilities remained constant. Net accounts receivable remained flat as a percentage of total assets: 9% in 1996, 7% in 1997 (Both June December), and 9% in 1998. Marketable securities were sold off during the past three years, decreasing from 11% ($104 million) of total assets to zero. Cash decreased from 13% ($124 million) of total assets in 1997 (both June December) to 4% in 1998. The combination of severe decreases in both cash and marketable securities are the reasons that the acid test ratio decreased so dramatically. The quick ratios are as follows: .96 (June 96), 2.00 (June 97), 1.38 (December 97), and .86 (December 98). As mentioned previously, current liabilities remained constant and current assets declined. As with the current ratio, the main reason for the deterioration of the quick ratio is the continued loss of current assets. The above ratios and the reasons for their poor trends indicate Chesapeake is currently in a liquidity crisis. This, in combination with the increased debt liabilities, is an extreme warning to both investors and management. This condition also adds to the suspicion that assets are being sold off to fund current debt obligations. The firm†s ability to meet its obligations with cash, as they come due, is approximated by the cash flow liquidity ratio. As previously mentioned, solvency improved and then deteriorated as indicated by the current and quick ratios. The trends are confirmed when looking at cash flow. From 1995 to 1997, Chesapeake†s cash flow liquidity improved from 1.47 to 1.8. 1997 to 1998 showed a large drop in liquidity from 1.8 to 0.95. The company†s financial statement data gives an indication as to why. From 1995 to 1997, short-term solvency improved from 1.47 to 1.8. When looking at the data, cash from operations rose from $55 million in 1995, to $139 million in 1997. The 1997 rise was due to a change in the accounting period. During this same period, cash on hand rose from $56 million to $123 million and marketable securities rose from zero to $13 million. While cash was increasing, current liabilities rose from $75 million to $153 million. Current liabilities doubled during this period, while cash flow increased 150%. The larger increase in cash flow, relative to short-term obligations, accounts for the improvement in solvency during the 1995 to 1997 period. During the 1997 and 1998 periods, liquidity deteriorated as shown by the decrease in the cash flow liquidity ratio from 1.8 to 0.95. The data indicates that cash from operations dropped approximately 32% to $95 million. When looking at the Cash Flow Statement, the large decrease in operating cash is mainly due to the large net loss incurred during the period. At the same time, cash dropped 76% to $30 million while marketable securities fell to zero. Much of the cash appears to have gone to fund the company†s payables and accrued liabilities. Current liabilities were reduced 15% to $131 million. The larger reduction in cash flow relative to current obligations accounts for the deterioration in short-term solvency. The cash flow data confirms that Chesapeake†s liquidity suffered severe deterioration. A reduction in current liabilities is a good sign, but the little amount of cash generated and being used to fund current obligations is not enough. Cash assets are being used to fund these obligations as well. In comparison to the industry debt ratio of .31, Chesapeake ended with a debt ratio of 1.31 in 1998 compared to .71 in 1997. The long-term debt to total capitalization ratio increased from .64 in 1997 to 1.37 in 1998, while the industry average was .44. The tremendous increase in debt was attributable to significantly lower oil and gas prices during the past three years, and a failed drilling venture known as the Louisiana Trend. The company was forced to liquidate assets and take on a substantial amount of debt to meet operational expenses and increase oil and gas field reserves. Chesapeake was added to the Standard Poor†s â€Å"CreditWatch with negative implications† [Yahoo Finance, Nov. 14, 1999] in December of 1998. The low price of fuel during fiscal years 1996 through 1998 was the primary reason for Chesapeake†s troubles. The debt incurred has covenants restricting the company from seeking additional debt and from paying dividends to preferred stock holders. Principal on a large portion of the outstanding debt is not due until 2004 allowing the company time to improve operations. This will also give fuel prices a chance to rise, which is determinant to the company†s survival. The industry average for times interest earned is 5.2, while Chesapeake†s operating profit was ($856) million. The ratio equated to well below zero in 1997 and 1998. In 1998, interest payments were more than $68 million. The financial leverage index could not be computed since there was not a return on equity. Chesapeake overextended their credit by substantially financing with debt and has jeopardized their ability to make obligated payments for their debt and fixed costs. Chesapeake Energy Corporation natural gas† {Chesapeake Annual Report, 1998, p. 1}. Recently, Chesapeake finished the transformation from an aggressive exploration company focused on developing short-reserve life, to a lower-risk, longer reserve life natural gas producer. Chesapeake†s operations are focused on â€Å"developmental drilling and producing property acquisitions.† These operations are â€Å"concentrated in three major areas: the Mid-continent, the onshore Gulf of Mexico and far northeastern British Columbia, Canada† [Chesapeake Annual Report, 1998, p. 1]. Aubrey K. McClendon is Chesapeake†s Chairman of the Board, Chief Executive Officer and Director. Tom L. Ward is the President, Chief Operating Officer and Director. â€Å"McClendon met cofounder Tom Ward in the 1980†³s. Both were independent oil producers; they teamed up in 1983† [Morgenson, p. 2]. They each have more than 16 years of experience in the oil and natural gas industry. All other members of the management team have multiple years of experience in the industry. Chesapeake has concentrated on expanding its holdings in natural gas since the company†s incorporation in 1989. Chesapeake thinks that natural gas will be the fuel choice of the 21st century. The company has been highly competitive in both its exploration activities and efforts to increase its inventory of undeveloped leasehold land. This combination should enable Chesapeake to remain a competitive force in the energy producing industry. New technology in the oil and gas industry has made exploration and production more profitable. This is key for the survival of American businesses that compete with OPEC and other foreign cartels that have very low production costs. New technology, including three-dimensional imaging, which has greater resolution than the previously existing technology, will enable Chesapeake to detect reserves more accurately. Also, horizontal drilling has enabled companies to drain more than one reserve at a time. With profits continuing to be squeezed within this industry, new technology is necessary to help American businesses compete on a global scale. The oil and gas industry is truly a global market. The industry boosted gains in 1999 from increased production efficiency and a decrease in the current supply. U.S. firms, along with OPEC, have voluntarily reduced their total production, which has increased the price. OPEC currently supplies approximately 40% of the world oil production. If OPEC chooses to produce at a lower output, Chesapeake could easily increase production with its low production costs and huge reserves. Many other nations are emerging as competitors, such as the former Soviet Union and Latin American countries. The continuing increase in supply from other nations would potentially saturate the market, causing lower prices and lower profits. Demand is expected to rise only slightly more than two percent through the year 2005. The outlook for this industry is for increased competition domestically (from smaller companies) and internationally from emerging nations. The U.S. has superior technology, which will help keep profits up as supply increases and demand remains relatively constant. Natural gas makes up 72% of Chesapeake†s revenue. They usually sell the product to third parties and are not dependent on any one buyer. Less than 10% of their revenues are generated from two buyers. Governmental Regulations – Operational and Labor Relations The oil and gas industries are subject to considerable government regulation. These laws and regulations are primarily directed toward â€Å"the handling and disposal of drilling and production waste products and waste created by water and air pollution control devices† [Chesapeake 10-K, 1998, p. 10]. The oil and gas industry is accountable to numerous government agencies, including the Environmental Protection Agency, the Department of the Interior, the Department of Energy, the State Department and the Department of Commerce. Virtually every aspect of operations is subject to complex and ever changing regulations. The oil and gas industry is tightly regulated in regard to labor relations by government department and agencies, including the Occupational Safety and Health Association (OSHA) and the National Labor Relations Board (NLRB). Some states have their own state sponsored occupational safety plans, while the remainder must comply with federal OSHA regulations. Some of the topics covered under OSHA include personal protective equipment, hazardous communication (HAZCOM) and safety process training. Chesapeake had 453 employees as of March 15, 1999. None of these employees were represented by organized labor unions. The company considers its employee relations to be good [Chesapeake 10-K, 1998, p. 13]. Unocal (NYSE: UCL) employed 7,880 people as of December 31, 1998, of which 575 were represented by various U.S. labor unions [Unocal 10-K, 1998, p. 12]. Both companies are subject to new laws and regulations regarding the environment and labor. Chesapeake and Unocal cannot predict what adverse financial conditions the new laws and regulations will bring. However, short-term and long-term costs will increase as companies improve existing operations to become and remain compliant with government regulations. As a result, all companies in petro-chemical industries are experiencing tremendous difficulty operating profitable businesses. Several businesses have ceased operations as a result of increased regulation coupled with poor profit margins. Chesapeake is at a higher risk regarding this scenario since most of its operations are domestic. Unocal, although a U.S. based company, operations are concentrated primarily overseas, and therefore experience increased leniency regarding environmental and labor regulations. During the last two years, Chesapeake Corporation took a significant hit in terms of earnings, stock price and credit ratings. Positive 1996 earnings turned to a loss in 1997 and tumbled to a bigger loss of $10 per share in 1998. This earnings decline caused the stock price and credit rating to plummet. The company also faces a class action lawsuit stemming from alleged violations of federal securities laws. Top management and directors are accused of using insider information to sell personal holdings in the company at artificially inflated prices. Chesapeake had very disappointing years in 1997 and 1998 as evidenced by the fall in the stock price. The company underwent a substantial repositioning to increase natural gas holdings and reduce risk. As a result of this repositioning, Chesapeake incurred considerable debt and is dependent on the market prices of oil and natural gas to increase, and in effect, improve profit margins. Additionally, in 1997, Chesapeake changed their fiscal year end from June 30th to December 31st. As part of the repositioning, Chesapeake increased long term debt over $400 million to a total of $920 million, coupled with a short-term indebtedness of $25 million. This increased borrowing drastically reduced the company†s ability to obtain additional financing. Standard Poor†s and Moody†s placed Chesapeake on review with a negative outlook. The ability to meet obligations for this additional debt will depend on the production and financial performance of the company, market prices of oil and natural gas, and general economic conditions. Common Size Income Statement Analysis Chesapeake had an extremely large write-down of assets (impairment) as a result of reduced oil and gas prices during the past few years. This charge increased operating costs by over $1.2 billion during 1997-98 with 72% of that cost coming in 1998. The asset write-down, combined with expense increases in production, marketing and interest, were the main contributors of total operating costs to be over three times total revenue. The result was 1998 EBIT of ($920) million, and a non-existent ROE, since the company had a net loss approaching $1 billion. Unocal†s ROE was 5.9% in 1998 and 25.1% in 1997. The impairment cost reported by Chesapeake is questionable because of the very large amount that was charged. In perspective, Unocal with over $5 billion in property assets recorded an impairment charge of $97 million during 1998. If oil and gas prices rise in the near future, the impairment costs may be reversed giving the impression that the company is doing very well. Future investors of Chesapeake equities should consider this fact prior to making any investment decisions. Chesapeake had a $140 million reduction to both sides of the balance sheet. The repositioning of the firm focused on increasing inventory of natural gas reserves, â€Å"the fuel of choice for the 21st century† [1998 Annual Report, pg. 18]. Oil and gas properties nearly doubled from 1997 to 1998, totaling $2.2 billion. However, nearly $1.6 billion was depreciated, depleted and amortized. Additionally, cash decreased nearly $100 million, short-term investments were liquidated, and paid-in capital exceeded $1.1 billion over the past two years to provide additional cash for purchases of gas reserves. As a result, total property, plant and equipment was 85% of total assets in 1998 compared to 77% in 1997. In comparison, Unocal†s PPE was 66% and 64% of total assets respectively. Long-term debt increased over $400 million in 1998, totaling $920 million compared to $510 million in 1997. The $920 million was 113% in relation to total liabilities and owners equity of $813 million. In 1998, current liabilities were $131 million compared to current assets of $118 million. This resulted in a reduced current ratio of .90 from a 1997 ratio of 1.42. The Unocal current ratios during 1998 and 1997 were 1.01 and 1.29 respectively. Chesapeake has relied primarily on cash flow through financing activities during the past few years. Cash flow from operations was approximately $95 million in 1998 and $180 million in 1997, while cash flow from financing was $365 million and $278 million respectively. Sales accounted for $378 million in 1998 and appear to be rising approximately 35% annually from 1996 and 1997. However, an accurate comparison is unavailable because of the change in the company†s fiscal year end. Low oil and gas prices forced Chesapeake to borrow, sell equity, and liquidate short-term investments in order to continue operations and invest in oil and gas properties. The company is dependent on the rise of prices during 1999 to continue operations and provide shareholder wealth. The company has several restrictions from being able to borrow additional funds. Additionally, the price of stock has dropped from a high of $34 in 1996 to a low of $.63 in 1998. This has further reduced the company†s ability to generate cash. The current ratios for Chesapeake Energy are as follows: 1.00 (June 96), 2.03 (June 97), 1.42 (December 97), and .90 (December 98). Current liabilities remained constant over this period, ranging from a high of 19% (June 96) to a low of 15% (June 97), with the current level at 16% of total assets. Extreme levels of change in current assets caused the current ratio to fluctuate drastically. Current assets declined from a high of $297 million (31% of total assets) to a current low of $117 million (15% of total assets). This decline in current assets caused the deterioration of the current ratio. The acid test ratios are as follows: .94 (June 96), 2.00 (June 97), 1.37 (December 97), and .81 (December 98). As previously mentioned, current liabilities remained constant. Net accounts receivable remained flat as a percentage of total assets: 9% in 1996, 7% in 1997 (Both June December), and 9% in 1998. Marketable securities were sold off during the past three years, decreasing from 11% ($104 million) of total assets to zero. Cash decreased from 13% ($124 million) of total assets in 1997 (both June December) to 4% in 1998. The combination of severe decreases in both cash and marketable securities are the reasons that the acid test ratio decreased so dramatically. The quick ratios are as follows: .96 (June 96), 2.00 (June 97), 1.38 (December 97), and .86 (December 98). As mentioned previously, current liabilities remained constant and current assets declined. As with the current ratio, the main reason for the deterioration of the quick ratio is the continued loss of current assets. The above ratios and the reasons for their poor trends indicate Chesapeake is currently in a liquidity crisis. This, in combination with the increased debt liabilities, is an extreme warning to both investors and management. This condition also adds to the suspicion that assets are being sold off to fund current debt obligations. The firm†s ability to meet its obligations with cash, as they come due, is approximated by the cash flow liquidity ratio. As previously mentioned, solvency improved and then deteriorated as indicated by the current and quick ratios. The trends are confirmed when looking at cash flow. From 1995 to 1997, Chesapeake†s cash flow liquidity improved from 1.47 to 1.8. 1997 to 1998 showed a large drop in liquidity from 1.8 to 0.95. The company†s financial statement data gives an indication as to why. From 1995 to 1997, short-term solvency improved from 1.47 to 1.8. When looking at the data, cash from operations rose from $55 million in 1995, to $139 million in 1997. The 1997 rise was due to a change in the accounting period. During this same period, cash on hand rose from $56 million to $123 million and marketable securities rose from zero to $13 million. While cash was increasing, current liabilities rose from $75 million to $153 million. Current liabilities doubled during this period, while cash flow increased 150%. The larger increase in cash flow, relative to short-term obligations, accounts for the improvement in solvency during the 1995 to 1997 period. During the 1997 and 1998 periods, liquidity deteriorated as shown by the decrease in the cash flow liquidity ratio from 1.8 to 0.95. The data indicates that cash from operations dropped approximately 32% to $95 million. When looking at the Cash Flow Statement, the large decrease in operating cash is mainly due to the large net loss incurred during the period. At the same time, cash dropped 76% to $30 million while marketable securities fell to zero. Much of the cash appears to have gone to fund the company†s payables and accrued liabilities. Current liabilities were reduced 15% to $131 million. The larger reduction in cash flow relative to current obligations accounts for the deterioration in short-term solvency. The cash flow data confirms that Chesapeake†s liquidity suffered severe deterioration. A reduction in current liabilities is a good sign, but the little amount of cash generated and being used to fund current obligations is not enough. Cash assets are being used to fund these obligations as well. In comparison to the industry debt ratio of .31, Chesapeake ended with a debt ratio of 1.31 in 1998 compared to .71 in 1997. The long-term debt to total capitalization ratio increased from .64 in 1997 to 1.37 in 1998, while the industry average was .44. The tremendous increase in debt was attributable to significantly lower oil and gas prices during the past three years, and a failed drilling venture known as the Louisiana Trend. The company was forced to liquidate assets and take on a substantial amount of debt to meet operational expenses and increase oil and gas field reserves. Chesapeake was added to the Standard Poor†s â€Å"CreditWatch with negative implications† [Yahoo Finance, Nov. 14, 1999] in December of 1998. The low price of fuel during fiscal years 1996 through 1998 was the primary reason for Chesapeake†s troubles. The debt incurred has covenants restricting the company from seeking additional debt and from paying dividends to preferred stock holders. Principal on a large portion of the outstanding debt is not due until 2004 allowing the company time to improve operations. This will also give fuel prices a chance to rise, which is determinant to the company†s survival. The industry average for times interest earned is 5.2, while Chesapeake†s operating profit was ($856) million. The ratio equated to well below zero in 1997 and 1998. In 1998, interest payments were more than $68 million. The financial leverage index could not be computed since there was not a return on equity. Chesapeake overextended their credit by substantially financing with debt and has jeopardized their ability to make obligated payments for their debt and fixed costs.

Pttls Essay Example | Topics and Well Written Essays - 1250 words - 1

Pttls - Essay Example I am responsible for training other instructors. I have to ensure that the prospective instructors pass their briefs and assessments. I have to ensure that they acquire the necessary experience and that they have clean records with the R.T.I.T.B. Prospective instructors also have to possess a clean bill of health. This will render them suitable to take up the responsibilities that come with being a reach and counterbalance truck instructor. Qualified instructors determine the quality of the instruction given at the training center. The third major responsibility that I have as an R.T.I.T.B. The instructor is to ensure that the training center is accredited. Accreditation is a continuous process that requires constant adherence. I am required to ensure that all the teaching material is up to date. I also have to ensure that the prospective operators are getting proper instruction. The quality of my work is determined by the kind of operators I am able to train. The team that I set up to assist me in the running the training program will determine the effectiveness of the center. Adherence to the requirements for accreditation will earn the training center a reputation for excellence. Sloppy work and a weak team will result in poor training and the loss of accreditation. It is, therefore, imperative that my team and I pursue excellence in the training program. The R.T.I.T.B. Training protocol is based on three major pieces of legislation. The first is the Health and Safety at work Etc Act of 1974. It requires that the employees of an organization should receive adequate instruction and training. This means that the instruction I give must be thorough and complete. The R.T.I.T.B. Training manuals take this legislation into consideration. This means that I should base my instruction on the R.T.I.T.B. Training manual to reach and counterbalance trucks. The second piece of legislation is the Provision