What Are Other Long-Term Liabilities?
Let me explain what other long-term liabilities are: they're a line item on your balance sheet that groups together obligations not due within 12 months. These are debts you don't need to repay urgently, and they're part of your total liabilities, but we call them 'other' when the company doesn't see them as important enough for their own separate lines.
Key Takeaways
You should know that other long-term liabilities are debts due beyond one year that aren't significant enough to list individually on the balance sheet. They're lumped together rather than broken down with separate figures. Some companies will disclose what makes them up in the footnotes if they think it's material.
Understanding Other Long-Term Liabilities
Liabilities are simply debts your company owes, and they show up on the balance sheet as either current—meaning you pay them back within a year—or long-term, which aren't due for at least 12 months or your operating cycle. Then there's the 'other' category: in financial statements, 'other' means anything extra that's not big enough to identify separately. These items get grouped together instead of being listed one by one with their own numbers.
So, other long-term liabilities are the remaining debts you must pay back in more than a year that aren't accounted for individually on the balance sheet. Some companies disclose their composition in footnotes if material. Often, it's just about how you prefer to present it—whether to itemize on the balance sheet or aggregate under 'other long-term liabilities' and detail in the notes. You can usually find specifics in the company's 10-K filing or annual report footnotes, but not every company provides that detail.
Types of Other Long-Term Liabilities
These can include things like pension liabilities, capital leases, deferred credits, customer deposits, and deferred tax liabilities. For holding companies, it might also cover intercompany borrowings, such as loans from one division or subsidiary to another.
Special Considerations
Grouping debts without specifying what they are might seem like a red flag, but it's actually standard practice and shouldn't worry you if the amounts are small compared to total liabilities. They should align with how the company has handled them in the past—footnotes sometimes provide year-to-year comparisons. If other long-term liabilities are a high percentage of total liabilities and there's no note, you as an analyst could reach out to investor relations for more information.
Example of Other Long-Term Liabilities
Take Ford Motor Co. (F) as an example: in fiscal year 2020, they reported about $28.4 billion in other long-term liabilities, which was around 10% of their total liabilities. In the notes, they broke it down into pension liabilities, other post-retirement employee benefits, employee benefit plans, dealers' customer allowances and claims, and other items.
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