Kaman Corp. (KAMN: Quote), which conducts business in the aerospace and industrial distribution markets, said Monday that it is changing its policy for recognizing pension expense.
Previously, for its non-contributory qualified defined benefit pension plan, the company used a market-related value of plan assets reflecting changes in the fair value of plan assets amortized over a four-year period. Under the new accounting method, the market-related value of plan assets reflects the actual change in the fair value of the plan assets for the year.
While the historical policy of recognizing pension expense is acceptable, the company said it believes that the new policy is preferable as it eliminates the delay in recognition of the change in fair value of plan assets for the calculation of the market-related value of plan assets.
The company said the new accounting policy has reduced net income previously reported for 2010 by about $2.7 million, or $0.11 per share, and reported net income in 2009 by about $7.7 million, or $0.30 per share. The impact on the three quarters already reported in 2011 has been an increase to net income of $1.8 million, or $0.07 per share.
As a result of the accounting change, full year 2011 pension expense is now expected to be $3.9 million lower, on a pre-tax basis, than previous expectations, which will result in an anticipated increase to full year 2011 net earnings of $2.4 million, or $0.09 per share, Kaman said.
by RTT Staff Writer
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