When good pensions go bad…

December 2, 2003

For anyone who still wonders why it’s so important to pay attention to the pension footnote, check out Greyhound Lines’ parent company’s 10-K filed yesterday. Sprinkled throughout the 270-page document filed by Laidlaw International (LALW.OB) are details on the company’s ongoing efforts to prop up its 13 different pension plans, following the company’s Chapter 11 reorganization. Taken together, the obligations add up to $957.7 million, while the fair value of the assets are $734 million — a $223 million gap. And that’s after the Pension Benefit Guaranty Corp. stepped in and essentially demanded that Laidlaw throw more dollars into its plans. Six months ago, Laidlaw added $50 million, according to the 10-K and issued 3.8 million new shares of stock to a pension trustee who will be required to sell the stock by the end of next year. If those 3.8 million shares are worth less than $50 million when they’re sold, Laidlaw will have to make up the difference. In addition, the company will have to kick in another $50 million to its pension plans next June.

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