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1.51 MB
Extraction Summary
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Document Information
Type:
Presentation slides / financial summary
File Size:
1.51 MB
Summary
These presentation slides provide a summary of 'USA Inc.' financials for fiscal year 2010, highlighting significant challenges such as nine consecutive years of negative cash flow and a deteriorating balance sheet. The document details massive off-balance sheet liabilities, primarily from unfunded Medicare and Social Security obligations, while concluding that a turnaround is possible given the nation's strong asset base and entrepreneurial culture if there is collective commitment to reform.
Organizations (6)
Timeline (2 events)
F2010 USA Inc. Financials
Recession (F2008-F2010)
Locations (1)
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Key Quotes (5)
"USA Inc. has challenges."Source
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Quote #1
"Net worth is negative and deteriorating."Source
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Quote #2
"Off-balance sheet liabilities of at least $31 trillion... amount to nearly $3 for every $1 of debt on the books."Source
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Quote #3
"today's off-balance sheet liabilities will be tomorrow's on-balance sheet debt."Source
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Quote #4
"The good news: USA Inc.'s underlying asset base and entrepreneurial culture are strong."Source
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Quote #5
Full Extracted Text
Complete text extracted from the document (1,902 characters)
Summary
KP
CB www.kpcb.com
USA Inc. | Introduction 13
CB www.kpcb.com
USA Inc. | Introduction 13
Highlights from F2010 USA Inc. Financials
• Summary – USA Inc. has challenges.
• Cash Flow – While recession depressed F2008-F2010 results, cash flow has been negative for 9 consecutive years ($4.8 trillion, cumulative), with no end to losses in sight. Negative cash flow implies that USA Inc. can't afford the services it is providing to 'customers,' many of whom are people with few alternatives.
• Balance Sheet – Net worth is negative and deteriorating.
• Off-Balance Sheet Liabilities – Off-balance sheet liabilities of at least $31 trillion (primarily unfunded Medicare and Social Security obligations) amount to nearly $3 for every $1 of debt on the books. Just as unfunded corporate pensions and other post-employment benefits (OPEB) weigh on public corporations, unfunded entitlements, over time, may increase USA Inc.'s cost of capital. And today's off-balance sheet liabilities will be tomorrow's on-balance sheet debt.
• Conclusion – Publicly traded companies with similar financial trends would be pressed by shareholders to pursue a turnaround. The good news: USA Inc.'s underlying asset base and entrepreneurial culture are strong. The financial trends can shift toward a positive direction, but both 'management' and 'shareholders' will need collective focus, willpower, commitment, and sacrifice.
Note: USA federal fiscal year ends in September; Cash flow = total revenue – total spending on a cash basis; net worth includes unfunded future liabilities from Social Security and Medicare on an accrual basis over the next 75 years. Source: cash flow per White House Office of Management and Budget; net worth per Dept. of Treasury, “2010 Financial Report of the U.S. Government,” adjusted to include unfunded liabilities of Social Security and Medicare.
KP
CB www.kpcb.com
USA Inc. | Introduction 14
CB www.kpcb.com
USA Inc. | Introduction 14
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