Balance Sheet

General Motors has America's biggest corporate pension fund. And the accounting for that fund could represent the biggest illusion among American corporations. It is no secret that pension accounting is a hall of mirrors that distorts the appearance of both pension plans and the companies that sponsor them. But a new analysis of the 500 largest American companies finds that the accounting allows nearly all of them to inflate their net worth. The biggest discrepancy is at GM; if the company's balance sheet were adjusted to portray the full magnitude of its pension assets and obligations, the analysis found, its net worth would fall by about $38 billion - wiping out shareholders' equity.

Imagine this: You're a single man in your 20s, in Baltimore, with an eighth-grade education and two young children. You've just served three years in jail for a nonviolent crime, such as selling marijuana. While you were in jail - earning no income - your child-support obligations continued to accrue, leaving you $22,000 in arrears upon your release. This number (the average total amount owed by a noncustodial parent who is currently or formerly incarcerated, according to the Family Welfare Research and Training Group at the University of Maryland School of Social Work)

Carroll Bank employees complete trainingEd Miller, Judy Casey and Sharon Byron, employees of Carroll County Bank and Trust Co. in Westminster, have completed the Small Business Administration's Pro-forma Statement Training Program. Participants learned how the SBA views the preparation of an adjusted balance sheet to arrive at tangible net worth.Carroll County Bank and Trust has its headquarters in Westminster. The bank serves Carroll County through 11 branch offices.

Chemical maker W.R. Grace & Co. said Thursday it will adjust the estimated cost of settling its asbestos-related liabilities to $2 billion from the previous estimate of $1.7 billion. The increase reflects higher estimated values of a common stock warrant and deferred payment obligations to be paid to a trust to compensate personal-injury claimants and property owners under the company's bankruptcy reorganization. The company filed for Chapter 11 protection in 2001, partly as a result of asbestos-related lawsuits filed by residents of Libby, Mont., and others.

Shares of Human Genome Sciences Inc. fell as much as 23 percent during trading yesterday after a Florida-based investment bank recommended that investors sell or short the stock on concerns that the company's cash is dwindling. The stock recovered much of the lost ground by day's end as the drug developer and other Wall Street analysts dismissed Sterling Financial Investment Group's analysis as flawed. "They have made some serious factual errors in their report," Steven C. Mayer, Human Genome's chief financial officer, said late yesterday.

Human Genome Sciences has an enviable $1.55 billion in cash, but as the company released its third-quarter earnings report yesterday, its executives once again were dogged by questions about how long even that amount will last. The reasons: The Rockville-based company is spending heavily to develop eight drugs in clinical trials; simultaneously, it has acquired or is constructing buildings for research, administration and manufacturing, requiring it to set aside a growing amount of its cash as collateral for the off-balance-sheet borrowings that back them.

General Growth Properties is selling the Gateway Overlook Shopping Center in Columbia for $90 million. The shopping center, which opened in 2007, includes tenants such as Trader Joe's, Loehmann's, Costco, Best Buy and On the Border. The sale is part of a strategy by General Growth, which emerged from bankruptcy this week, to sell non-core assets to boost its balance sheet. The sale of the shopping center located at Routes 175 and 108 will help the company reduce about $55 million in debt and generate $35 million in proceeds.

Sinclair Broadcast Group Inc. pulled the plug yesterday on a plan to sell three Midwestern television stations for $81 million. Cockeysville-based Sinclair acquired the three stations -- WICS-TV of Springfield, Ill.; WICD-TV of Champaign, Ill.; and KGAN-TV of Cedar Rapids, Iowa -- during the summer as part of a $310 million transaction with Guy Gannett Communications. In July, Sinclair entered into an agreement to sell the assets of the three stations to Sunrise Television Corp. of St. Petersburg, Fla. The sale was conditioned on the receipt of Justice Department approvals necessary for Sunrise to acquire the three stations by today.

DETROIT -- Financial woes mounted yesterday for General Motors Corp. as its credit ratings were called into question and it projected that upcoming accounting penalties could technically wipe out its net worth.Neither development marked a further deterioration of GM's financial condition, but analysts said that the news could hasten more plant closings. Top GM executives say that such steps are already in the works.Standard & Poor's Corp. placed most of GM's $90 billion debt on its "credit watch with negative implications," signaling that the nation's largest industrial company's credit rating might be downgraded.

Hong Kong Telecom"Hong Kong Telecom (HKT, NYSE, around $30) is the exclusive franchise provider of local and international telecommunications in Hong Kong," says Alston Barrow of Favorably Positioned Stocks, Tampa, Fla."The big opportunity in owning shares of this company will come through China's growth. The Communist government owns a 20 percent stake in Hong Kong Telecom. The big risk is the future of Hong Kong when it reverts to Communist control in 1997. Balance-sheet strength is tops.