FedEx to take $2.2bn charge on pension accounting change

Parcel delivery service FedEx said it would record a $2.2 billion non-cash pretax charge related to a change in the way it accounts for pensions.

The move to mark-to-market accounting will have no effect on employees’ pension benefits or the funding requirements for any pension plans or cash flows, FedEx said on Friday.

"Adopting the mark-to-market approach will align our accounting to provide greater transparency by removing certain legacy pension costs from segment operating results . . . ," chief financial officer Alan Graf said.

FedEx also said its Ground unit had reached a $228 million settlement in an independent contractor litigation pending in the district court for the Northern District of California.The Ground unit business is the company’s second largest after FedEx Express. – (Reuters)