Wednesday, 1 February 2023

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Ford sees Q4 pre-tax remeasurement gain of roughly $50M from pension, OPEB plans

In a regulatory filing, Ford said: “We expect to record a pre-tax remeasurement gain in our fourth quarter 2022 results of approximately $50 million related to our pension and OPEB plans. This includes a $1.7 billion loss associated with pension plans in the United States, a $450 million gain associated with pension plans outside the United States, and a $1.3 billion gain associated with OPEB plans globally. Overall, the small remeasurement gain is primarily explained by higher discount rates compared with year-end 2021 largely offset by pension asset returns that were lower than our assumptions. On an after-tax basis, the remeasurement is expected to decrease our net income by about $220 million. The decrease is due to the net deferred tax expense we expect to recognize as a result of the variability in tax rates in the jurisdictions where there are remeasurement gains or losses. Because the remeasurement is a special item, it will not impact our total Company adjusted EBIT or adjusted earnings per share. The remeasurement did not have an impact on our cash in 2022, and does not change our expectations for pension contributions in 2023. In aggregate, our funded plans remain fully funded. Including the impact of remeasurement gains and losses during 2022, we expect the underfunded status for our pension and OPEB plans to be about $0.2 billion and $4.5 billion, respectively, at year-end 2022, compared with $0.3 billion and $6.0 billion, respectively, at year-end 2021. The change to the underfunded status of our plans in the aggregate primarily reflects the impact of higher discount rates.”

Published first on TheFly

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