Ford expects $2B net income drop due to pension change
Ford Motor Co. says a change in the way it values pension obligations will cut 2016 full-year net income by $2 billion
This Tuesday, Jan. 17, 2017, photo shows a Ford sign at an auto dealership, in Hialeah, Fla. Ford Motor Co. says a change in the way it values pension assets will cut 2016 full-year net income by $2 billion. (AP Photo/Alan Diaz)
·Associated PressDEARBORN, Mich. (AP) -- Ford says that a change in the way it values pension obligations will cut its 2016 net income by $2 billion.
According to a regulatory filing, in 2015, Ford changed the way it measures pension gains and losses so they're counted in the year they occur.
Ford will record a pretax pension charge of about $3 billion for the year. It says the loss is a special item so it won't affect adjusted pretax profit. Ford still expects to meet guidance of about $10.2 billion in adjusted pretax profit for last year.
The company says its pension plan was underfunded by $8.9 billion in 2016, compared with $8.2 billion a year earlier.
Ford Motor Co. reports fourth-quarter and full-year earnings on Thursday.
