NEW YORK (AP) _ FedEx said it is changing its pension accounting methods, and it will take a $2.2 billion charge as a result.
The package delivery company said the new method will make the business’ results easier to understand because gains and losses will be recorded in the fourth quarter of each fiscal year instead of being amortized over many years.
FedEx Corp. also said it agreed to pay $228 million to settle a lawsuit brought against its FedEx Ground business by drivers in California. About 2,300 drivers who worked for FedEx between 2000 and 2007 are suing the company and seeking back pay for overtime and expenses, as well as punitive damages and legal costs.
The Memphis, Tennessee-based company will take a $197 million charge in the fourth quarter, which ended on May 31. The settlement is subject to court approval.
A federal court ruled in August that FedEx wrongly classified workers as independent contractors instead of employees. The company said Friday that that ruling would have made it very difficult for it to defend itself against the lawsuit.
Similar lawsuits were filed against FedEx in about 40 states before 2009. FedEx says that since 2011 it has only contracted with incorporated businesses that treat drivers as their employees.
FedEx shares fell $1.35 to close at $183.63 in trading on Friday. Its shares are up nearly 32 percent over the past year.