E-SYSTEMS PLANS TO ACCRUE POSTRETIREMENT BENEFIT COSTS IN 1992
DALLAS, Nov. 20 ~PRNewswire~ -- In accordance with the latest changes in accounting procedures required by the Financial Accounting Standards Board (FASB 106), E-Systems (NYSE: ESY) plans to recognize post retirement benefit costs in 1992 resulting in a one-time, after-tax charge to income of $175-200 million. In addition to this one time charge of $175-200 million, there will be a recurring annual after-tax charge of $10-15 million. In December 1990, the Financial Accounting Standards Board issued new rules requiring the projected future cost of providing postretirement benefits, such as health care and life insurance, be recognized as an expense during an employees service instead of at a future date when the benefits are paid. Companies can elect to record the cumulative effect of this accounting change as a charge against income in the year the rules are adopted, or alternatively, on a prospective basis as a part of the future annual benefit cost. The company is currently considering funding these recurring costs, which will make them allowable under government contracts and deductible under Internal Revenue Service regulations, thereby minimizing future profit impact.
"Keep in mind, this is an accounting procedure change required for all public companies and does not reflect a change in our performance," said E. Gene Keiffer, E-Systems chairman and chief executive officer.
The new rules call for implementation no later than the first quarter of 1993. These changes in accounting for benefit costs have been discussed in E-Systems financial statements for the past two years. E-Systems is a major worldwide developer and producer of electronics systems and products in the areas of intelligence, reconnaissance and surveillance systems, command and control, electronic warfare, specialized aircraft maintenance and modification, guidance, navigation and control, communications and data systems. -0- 11~20~92 ~CONTACT: John E. Kumpf of E-Systems, 214-392-4923~ (ESY)
CO: E-Systems ST: Texas IN: CPR SU:
SH -- NY022 -- 3305 11~20~92 11:01 EST
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|Date:||Nov 20, 1992|
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