Posted on 03/26/2010 12:09:57 PM PDT by Cheap_Hessian
Yeah, I know, Obama has said that there would be no "material" impact to finances until 2014.
Liar.
Truth: Caterpillar and John Deere already announced non-cash charges of $100 and $150 million, respectively, for this year based upon the impact of this bill on forward retiree health care costs.
The law saws you must account for such changes when you become aware of them, and that would be now.
But today a 100-kiloton device landed on AT&T's (NYSE: T) balance sheet - they announced a one billion dollar non-cash charge:
On March 23, 2010, the President signed into law comprehensive health care reform legislation under the Patient Protection and Affordable Care Act (HR 3590). Included among the major provisions of the law is a change in the tax treatment of the Medicare Part D subsidy. AT&T Inc. ("AT&T") intends to take a non-cash charge of approximately $1 billion in the first quarter of 2010 to reflect the impact of this change. As a result of this legislation, including the additional tax burden, AT&T will be evaluating prospective changes to the active and retiree health care benefits offered by the company.
Oh, there won't be any material impacts until 2014 eh?
(Excerpt) Read more at market-ticker.denninger.net ...
Oops! Unintended consequences.
Angry pensioners.
The damages of ObamaCare so far:
* In a filing with the U.S. Securities and Exchange Commission, Caterpillar described the move as a tax hike. Accounting standards require the world’s largest maker of earth-moving equipment to book a $100 million after-tax charge to reflect the change during the current fiscal quarter.
* Deere, a maker of farm equipment, said it expects to record a $150 million charge, mostly in its current fiscal second quarter. The expense was not included in the company’s earlier 2010 forecast, which called for net income of about $1.3 billion.
* Diversified U.S. manufacturer Honeywell International Inc (HON.N) in January estimated that healthcare reform would trim its first-quarter earnings by 4 to 5 cents per share. A Honeywell spokesman said on Thursday that the company had not updated the earlier cost estimate and would continue to review the legislation.
* AK Steel Holding Corp (AKS.N) will record a noncash charge of approximately $31 million in the first quarter, due to a reduction in the value of the company’s deferred tax asset as a result of a change to the tax treatment of Medicare Part D reimbursements.
* Valero Energy Corp (VLO.N) said it expects to take a charge to earnings of between $15 million and $20 million in the first quarter due to the new health care legislation.
Stay tuned...this is only a partial list.
ObamaCare will cost jobs and damage the economy.
The lag time until Obama’s death panels are operative may be too long to keep them from voting him out in ‘12.
Many more companies will be showing additional tax expense this year.
These companies are all legally obligated to report these charges right now, as he points out. But companies like this have a lot of leeway when it comes to the amount they actually report.
One of the games these companies play is reporting "charges" like this based on a worst-case assessment looking forward. This gets their projections out into the open to avoid future accusations of under-reporting them. More importantly, it allows the company to make changes moving forward that will look like stronger growth on future balance sheets.
AT&T seems like they're being very smart about this -- because you can be damn sure that they'll do whatever it takes moving forward to make that $1 billion "charge" in 1Q2010 disappear.
How do the Democrats expect to get a VAT tax through on top of this?
AT&T will be evaluating prospective changes to the active and retiree health care benefits offered by the company.
__________________________________________________________
This is ironic. AT&T management wants to get rid of the gold plated healthcare plan the unions have extracted. The union is the CWA (Communication Workers of America). The CWA was one of the biggest union supporters of Obama. The AT&T charge of 1 billion will be used as a stick to negotiate lower benefits. Strikes have been avoided thus far, but the contracts are still outstanding or at least were last time I checked. Now . . . strike . . . lower health benefits. One of the union reps I know there had to postpone her planned retirement because of the hit her retirement savings took with the recession, downturn, stock market ups and downs. Now this . . .
GREATEST WEALTH DESTRUCTION IN HISTORY
Thanks, Matchett-PI
Every fortune 500 company in america needs to report this ASAP the dems are finished they wont be able to raise two nickels for reelection..
Superb. Hanging on my door now.
Thanks for the ping.
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