The Fight That’s More Important Than The Dreamliner: The Boeing Company (BA), General Electric Company (GE)

AT&T Inc. (NYSE:T), for example, recently announced that it had to take a one-time write off of $10 billion to shore up its employee pension plan. That’s a huge number and while not completely a shock to the stock market, it certainly wasn’t a pleasant event. At the same time, the company also lowered the returns it expects to see from its pension plan’s investments.

Essentially, companies put money aside today and invest it. The goal is to make enough from the investments to pay the obligations when they come due. There are fairly complex rules and regulations surrounding the funding of pension obligations, but suffice it to say that companies don’t have to have all of the money today to pay their obligations of tomorrow. That said, if the bills come due and there isn’t enough money, the company needs to cough up the difference.

Find it in the 10k

It isn’t hard to find information about pension and medical liabilities in a company’s annual report. However, they don’t all disclose the information in the same way. So it might take some digging.

General Electric Company (NYSE:GE) is a great example of the problem and is quite honest about presenting it. For example, the risk factor section in the company’s 2011 10k states, “At the end of 2011, the General Electric Company (NYSE:GE) Pension Plan was underfunded, on a U.S. GAAP basis, by $13.2 billion, and the General Electric Company (NYSE:GE) Supplementary Pension Plan, an unfunded plan, had a projected benefit obligation of $5.2 billion.” Big numbers. Boeing’s pension plan was underfunded by $16.6 billion at that time. Even bigger numbers, found within a discussion of that company’s “liquidity and capital resources.”

Don’t Overlook this Issue

Pension and healthcare obligations years in the future may not seem all that important today, but they can be because of funding requirements. And they will certainly be big issues down the road. Keep an eye on these costs. If The Boeing Company (NYSE:BA) is willing to take a hard line on this issue when it is in the throws of a debilitating problem, it should be important enough for you to take a look, too.

The article The Fight That’s More Important Than The Dreamliner originally appeared on Fool.com and is written by Reuben Gregg Brewer.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.