April 5 (Reuters) - U.S. companies have begun to tally the financial hit they say they will take as a result of the U.S. healthcare overhaul signed into law last month by President Barack Obama.
The government continues to pay subsidies to large companies, including AT&T Inc
, Caterpillar Inc
and Boeing Co
, to help pay for prescription drug benefits for their large ranks of retirees. [ID:nHEALTH]
However, the revamped law no longer allows companies to deduct the amount of the subsidies from their taxable income. Corporate America complains that the change amounts to a tax increase, while the White House says it essentially closes a tax loophole.
Not all big companies are warning of trouble. General Electric Co
, for example, says it does not expect a "significant material impact" on its first-quarter results.
But a number of large U.S. employers have started detailing the expected hit to their bottom line.
Verizon Communications Inc
last week said it expects to take a $970 million charge related to the change, the second-highest estimate after AT&T.
The tally so far:
* AT&T, the largest U.S. telephone company, said it would record a $1 billion noncash charge for the first quarter and evaluate prospective changes to the healthcare benefits it offers to both active and retired workers. [ID:nN26192636]
* Verizon, the No. 2 U.S. phone company, anticipates a $970 million noncash charge for the change. [ID:nN01142694]
* Deere & Co
, a maker of farm equipment, said it expected to record a $150 million charge, mostly in its current fiscal second quarter. [ID:nN25216862]
* No. 2 plane maker Boeing said it would take an income tax charge of $150 million, or 20 cents per share, against first-quarter results. [ID:nN31202447]
* Caterpillar said accounting standards required the world's largest maker of earth-moving equipment to book a $100 million after-tax charge to reflect the change during the first quarter. [ID:nN24185079]
* No. 2 life insurer Prudential Financial Inc
said it expected a $100 million charge during the first quarter. [ID:nWNAB4727]
* Lockheed Martin Corp
, the world's biggest defense contractor, said it expected to record a $96 million after-tax charge in the first quarter, which would translate to around 25 cents per share. [ID:nN31242589]
* 3M Co
, which makes products ranging from Post-It notes to optical films for flat-panel televisions, will record a one-time, noncash charge of up to $90 million, or 12 cents per share. [ID:nN26208452]
* Exelon Corp
, the largest U.S. operator of nuclear power plants, expects a $65 million charge. [ID:nSGE6300HU]
* Other U.S. companies that expect charges of less than $50 million include: Ingersoll-Rand Plc
, $41 million; AK Steel Holding Corp
, $31 million; Eaton Corp
, $25 million; Illinois Tool Works Inc
, $22 million charge; Hartford Financial Services Group Inc
, $20 million; Valero Energy Corp
$15 million to $20 million; Honeywell International Inc
, $13 million; Goodrich Corp
, $10 million; Carpenter Technology Corp
, $5.9 million; Allegheny Technologies Inc
, $5 million, and Kroger Co
, $1.5 million to $2 million.
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