FedEx to book $2.2bn charge after changing pensions accounting
Delivery giant FedEx expects to record a non-cash charge of approximately $2.2bn (£1.4bn) for the three months to the end of May after opting to implement mark-to-market accounting for its pension and post-retirement plans.
FedEx Corp.
$260.29
10:58 06/05/24
In a statement released on Friday, the company said the accounting charge will not affect benefits for the participants to the plan, nor will it have an impact on the group’s cash-flow.
FedEx said the change in policy was motivated by the intention to make the group’s operating performance easier to understand.
"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 group chief financial officer Alan Graf, Jr.
Meanwhile, the Memphis-headquartered group said it will also record a fourth quarter charge of $197m after settling an independent contractor litigation.
FedEx shares were down 0.56% to $183.95 at 14:51 on Friday.