By Chelsey Dulaney
FedEx Corp. said Friday that it will book a $2.2 billion pretax
charge for the quarter that ended in May as the company changes to
a mark-to-market pension accounting method.
FedEx said the accounting method will allow the company to
immediately recognize actuarial gains and losses, making its
operating performance easier to understand and more
transparent.
"Adopting the mark-to-market approach will align our accounting
to provide greater transparency by removing certain legacy pension
costs from segment operating results and recognizing them in a
year-end adjustment," said FedEx Finance Chief Alan B. Graf Jr. in
a news release.
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 impact its employees' pension benefits
or the company's cash flows.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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