published Sunday, July 7th, 2013

Business Briefcase: Pilot remains 'very strong'

Pilot remains 'very strong'

Despite reports last week that Pilot Flying J is troubled by too many lawsuits and too much debt, a company spokesman insists the nation's biggest truck stop chain remains a strong, ongoing company.

Moody's Investors Service has put the Knoxville-based company on a watch list for a possible downgrade after federal agents raided Pilot's headquarters in April. Moody's change came after a half dozen trucking companies sued Pilot and three senior executives pleaded guilty to fraud charges for not delivering on promised fuel rebates.

Moody's said Pilot's ability to repay its $4 billion debt could be comprised if more trucking companies severe ties with Pilot or major penalties are levied against the company. Pilot's debt is currently rated as Ba2, which Moody's said "reflects the company's relatively good debt protection measures, good liquidity, meaningful scale, geographic reach and relatively diverse profit stream."

But Pilot's relatively thin margins and the prospect of more legal or public relations problems could hurt the nearly $30 billion a year of sales generated by Pilot, which is primarily owned by Cleveland Browns owner Jimmy Haslam, the brother of Tennessee Gov. Bill Haslam.

Pilot Flying J spokesman Tom Ingram said "there are inaccuracies in the rating agencies' numbers" but as a private company Pilot "is not going to elaborate.

"Pilot Flying J's business and financial positions are very strong," Ingram said.


NRC reviews Browns Ferry

TVA's Browns Ferry Nuclear Plant, already red flagged by federal regulators for not detecting a faulty safety valve, will get a new assessment on Thursday from the U.S. Nuclear Regulatory Commission.

The NRC will present its annual safety assessment of Browns Ferry at Calhoun Community College in Tanner, Ala., at 1 p.m. Thursday.

The meeting should indicate the findings of a 23-person NRC inspection team which spent more than 3,000 hours this spring analyzing the plant. Due to the red inspection finding issued in May 2011, Browns Ferry continues to receive increased inspection and oversight.

"Although the NRC continually monitors each nuclear plant, we believe it is important to hold annual meetings near each plant to discuss our oversight and answer any questions local resident may have," said Victor McCree, regional administrator for the NRC.


Efficiency firm not so efficient

A company hired to improve the efficiency at the Tennessee Valley Authority couldn't prove that it provided the savings it promised, according to TVA auditors.

TVA's Office of the Inspector General audited the savings guaranteed by DeWolff, Boberg & Associates, Inc. for a $16.2 million work management improvement contract. DBA guaranteed efficiency and productivity gains would result in minimum total cost savings to TVA of nearly $18 million.

"Although we did not find evidence of noncompliance with the contract, we could not determine if DBA achieved the guaranteed cost savings," TVA auditors said in their report.

"We could not determine if the metrics used to measure improvements were valid, because TVA did not have management controls in place to ensure consistency."

-- Compiled by Business Editor Dave Flessner, who may be reached at 423-757-6340 or dflessner@times freepress.com

about Dave Flessner...

Dave Flessner is the business editor for the Times Free Press. A journalist for 35 years, Dave has been business editor and projects editor for the Chattanooga Times Free Press, city editor for The Chattanooga Times, business and county reporter for the Chattanooga Times, correspondent for the Lansing State Journal and Ingham County News in Michigan, staff writer for the Hastings Daily Tribune in Nebraska, and news director for WCBN-FM in Michigan. Dave, a native ...

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