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Union leaders see hidden agendas behind the rising calls for lower pension assumptions.
Then, he adjusted the companies' reported earnings for special charges, stock-option grants and overly rosy pension assumptions.
Companies have been caught gaming pension assumptions in the past and as a result some assumptions are now regulated.
Second is the choice many companies have made not to subtract the costs of stock options from their results, and finally, there are those rosy pension assumptions -- inflating pension earnings or masking pension costs -- that improve corporate earnings.
Re "Earnings Are Worse Without the Icing" (Market Watch, July 20), which looked at how companies' price-to-earnings ratios might grow if adjusted for special charges, options accounting and pension assumptions: Cendant should not have been included in the chart that projected such adjustments for estimated 2003 P/E ratios.
Even in that case, G.M. will still be able to add the $200 million to its pretax profit, because accounting rules require companies to include their start-of-year pension assumptions in their end-of-year financial results, even if the assumptions turn out to be wrong.
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Ozanian pores through financial statements for telltale signs that a company might be dressing up its earnings with things like aggressive pension plan assumptions or options issuance.
Few attempted to value it beyond looking at reported ruler-like earnings that were played like a fiddle by management by manipulating pension plan assumptions and shifts in reserves in opaque GE finance.
By lowering the allowance for doubtful accounts (as a percentage of receivables) in a worldwide tech slump, getting its tax rate down and changing pension return assumptions, IBM created $858 million, or 47 cents per diluted share, in aftertax profits.
And as Mike Shedlock of Global Economic Trade Analysis notes, many of the states in deepest trouble have the highest pension plan assumptions.
As long as the stock market keeps moving upward, he said, fulfilling G.M.'s pension-return assumptions, all will be well.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com