Summary
Ford Motor Company (F) announced in an 8-K filing dated January 23, 2023, that it anticipates recording a pre-tax pension and other postretirement employee benefits (OPEB) remeasurement gain of approximately $50 million for the fourth quarter of 2022. This gain is largely driven by increased discount rates, which offset lower-than-assumed pension asset returns. Despite the pre-tax gain, the company expects a net after-tax decrease in net income of about $220 million due to deferred tax expenses related to the remeasurement variances across different tax jurisdictions. Crucially for investors, this remeasurement is classified as a "special item" and will not affect Ford's total Company adjusted EBIT or adjusted earnings per share, thus preserving the core operational profitability metrics. The company also clarified that this remeasurement had no impact on its 2022 cash position and does not alter its 2023 pension contribution expectations. The overall funded status of its pension and OPEB plans remains robust.
Key Highlights
- 1Ford expects a pre-tax gain of approximately $50 million from pension and OPEB remeasurement for Q4 2022.
- 2The gain is primarily driven by higher discount rates, partially offset by lower than expected pension asset returns.
- 3An after-tax net income decrease of roughly $220 million is anticipated due to deferred tax expenses.
- 4The remeasurement is considered a 'special item' and will NOT impact Adjusted EBIT or Adjusted EPS.
- 5No cash impact in 2022 and no change to 2023 pension contribution expectations.
- 6Overall funded status for pension and OPEB plans remains fully funded, with reduced underfunding compared to year-end 2021.