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And finally, as interest rates increase, we would expect to see a pension tailwind in 2014. For modeling purposes, the 100-basis point upward trend in interest rates is equal to approximately a $250 million decrease in pension expense.*

Perhaps. First, one would have to assume that the company's pension fund performs at least equal to the US markets. Since 80% of fund managers underperform their benchmark, I'm not sure I'm willing to make that assumption. Then there is the issue of why the pensions were underfunded in the first place. If they were underfunded because of, shall we say, extremely optimistic fund performance projections combined with extremely low pension cost projections, then that 1%, even combined with the market move may not be enough to offset the shortfall. A tailwind, yes perhaps, but one significant enough that, when added to what is presumably a forward speed is enough to get the company to its obligation destination on time and on budget? I wonder.

Since your footnote brought up DOW, I pulled a quick spreadsheet and, as of 12/31/2012, show total liabilities of $48.58B, Long Term debt of $19.9B, Long Term liabilities of $37.1B and S/H equity of $20.88B. So that makes debt-to-equity (19.9/20.88) of .95; long term liabilities to S/H equity (37.1/20.88) of 1.78 and total liabilities to S/H debt (48.58/20.88) of 2.327. To me, in a rising interest rate world those are not numbers which give me warm fuzzies.

The stock market is in its fifth year of a Fed-QE-induced run so maybe it will go on for another 5 years, or maybe it won't. We saw in 2008 what happens when the "it won't" part unfolds and includes with it a virtual freeze on lending.

Yes, DOW is showing $23.68B in current assets, of which only $4.3B is cash. In a crisis, receivables ($10.5B) become an iffy proposition because if they need to be paid and the payor would go under by paying, they will delay, inventory ($8.7B) is illiquid and "other current assets" ($.334B) may or may not be there, one would have to dig into the paperwork to see what they are.

I'm not saying DOW is a bad company or a bad business model. I am also not saying they are going to dry up and blow away. Nor am I saying that, in a crisis that this would be their first rodeo.

What I am saying is that the total debt and liability numbers I have found across the large cap space mirror this type of exposure and, if I am correct about the bond bull being ready to drop from the exhaustion of a 30 year run, these numbers may take on much more ominous overtones for the value hunter.

BTW, on the diluted share portion of the spreadsheet, I show that 3 FYs ago they increased their shares by 8.53%, 2 FYs ago by 1.26% and last FY by 1.57%. Meanwhile two FY years ago S/H equity increased by 2% and last FY it decreased by 6%. So, about an 11% dilution of ownership value through share dilution combined with another 4% decline through decreased value of the S/H equity. It could be that three years ago S/H equity improved significantly and my lack of having that field skew my read of the data.

There are probably a lot of things about the workings of this company, its projects, etc. that I'll never know. I'll never know them because my spreadsheet tells me enough to look for a better starting spot for my (increasingly limited, it seems) investigative efforts.

Just for the heck of it, I went to the price chart for the last 3 years and see that the price was about $23 and is now just shy of $40. So Mr Market rewarded holders during this period with about a 50% gain to offset the approximately 15% loss in the fundamental metrics. I still wouldn't own it, again, (for me) if the spreadsheet does not pique my interest as a value play, I just don't commit my money. I've seen, and been victimized, too often to overlook the fundamentals just because Mr. Market is in one of his manic phases.

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