FedEx to book $2.2 billion pension accounting charge
The method allows pension gains and losses to flow into earnings sooner than under old rules, which allow companies to smooth out the impact over several years.
FedEx said it would now recognize actuarial gains and losses in the fourth quarter of its fiscal year rather than amortizing them over several years, making its operating performance easier to understand and more transparent.
Net of tax, the charge is valued at $1.4 billion, or $4.88 a share. Before the announcement, analysts polled by Thomson Reuters expected FedEx to post $2.68 a share in adjusted earnings in its fiscal fourth quarter, which ended in May.
FedEx said the plan won’t affect its employees’ pension benefits or the company’s cash flows. ■