January 22, 2020 / 10:35 PM / 7 months ago

Ford expects $2.2 billion pre-tax hit related to pension plans in fourth quarter

FILE PHOTO: Ford logo is pictured at the 2019 Frankfurt Motor Show (IAA) in Frankfurt, Germany September 10, 2019. REUTERS/Wolfgang Rattay

(Reuters) - Ford Motor Co (F.N) said on Wednesday its fourth quarter results will be hit by a pre-tax loss of about $2.2 billion due to higher contributions to its employees pension plans.

The charge is largely related to a drop in discount rates, the company said, as that leads to an increase in the amount of money to be contributed for future pension benefits.

The U.S. automaker said bit.ly/30PrDky it will record a $2 billion loss related to pension plans outside the United States and a $600 million loss associated with other post-retirement employee benefits plans globally.

However, the overall loss was offset by a $400 million gain associated with pension plans in the United States.

On an after-tax basis, the loss is expected to reduce Ford’s net income by about $1.7 billion in the fourth quarter. The loss will not impact the adjusted earnings per share as it is a special item, the company said.

Reporting by Dominic Roshan K. L. in Bengaluru; Editing by Arun Koyyur

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