Companies react to HC

[spursncowboys]

AT&T Taking $1B Charge to Cover Costs of New Health-Care Legislation


http://www.foxbusiness.com/story/markets/industries/telecom/att-taking-b-charge-cover-costs-new-health-care-legislation/

AT&T (T (javascript:stockSearch('T');)) said Friday that tax ramifications related to the newly passed health-care legislation will force it to take a $1 billion non-cash charge in the first quarter.
A handful of other companies have also announced projected losses stemming from the new law, but AT&T's is by far the largest. Also Friday, 3M (MMM (javascript:stockSearch('MMM');)) said it expects a $85 million to $90 million charge.
In papers filed with the U.S. Securities and Exchange Commission, AT&T said the charge stems from changes in the tax laws regarding the Medicare Part D subsidy. AT&T will no longer be able to deduct tax-free subsidies it receives from the government for providing retirees prescription-drug benefits.
“AT&T Inc. intends to take a non-cash charge of approximately $1 billion in the first quarter of 2010 to reflect the impact of this change,” the company said.
Furthermore, AT&T said in the filing that, 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.

In the first two days after the law was signed, three major companies — Deere & Co. (DE (javascript:stockSearch('DE');)), Caterpillar Inc. (CAT (javascript:stockSearch('CAT');)) and Valero Energy — said they expect to take a total hit of $265 million to account for smaller tax deductions in the future.

[whottt]

Maybe they should get into the health care business.

[EVAY]

I saw this same thing today, too.

What are the tax breaks they are talking about that are being closed? Does anybody know?

If, as is the case with AT&T, they had been getting tax breaks for paying for a prescription drug program for retirees' health plans, and now the 'donut hole' is being closed for medicare recipients, it makes sense that they would no longer be providing those payments and/or taking the tax deductions associated with them, but does anybody know what else in involved?

[EVAY]

It's a smart move to take the accounting hit all at once, and AT&T's head is an accountant, but I don't know what else is involved.

[EVAY]

I bet Randall Stevenson (AT&T head) is thrilled beyond belief at having an excuse to reduce benefits. It was a really big problem in the last bargaining round with the union.

[ElNono]

The end of some tax subsidies? Good news... :tu

[DMX7]

Think of how much money they could save if they just didn't pay their employees. I'm not talking reduced salaries, I'm saying they shouldn't pay them at all. Damn, that's a good idea.

[spursncowboys]

AT&T is just one of many companies that subsidize Medicare drug coverage for their retirees. The new health law slaps a tax on those subsidies, effective next year. In addition to costing the communications giant a cool billion, the tax is likely to cost workers and retirees a cherished benefit. AP notes that, because of the legislation, AT&T is now “looking into changing the health care benefits it offers to active and retired workers.”
So much for the promise about being able to keep the health care you have!
http://blog.heritage.org/2010/03/26/obamacare-day-2-a-1-billion-tax-bill-for-just-one-employer/

[spursncowboys]

2018: Imposes 40% tax on high cost health insurance plans.

[EVAY]

yeah. the At&T plans are in the 'cadillac coverage' category.

[Wild Cobra]

The end of some tax subsidies? Good news... :tu
A tax break is not a subsidy. Please look the definition up in various sources and see how it applies here.

[MannyIsGod]

LOL @ you believing that these companies trying to make more money is because of health care. Thats fucking rich.

[DMX7]

LOL @ you believing that these companies trying to make more money is because of health care. Thats fucking rich.

These people are tools of their corporate overlords. Nothing new here.

[MannyIsGod]

Oh our rate hikes? ITS NOT BECAUSE WE WANT TO MAKE MORE MONEY ITS BECAUSE OF THAT BIG BAD HEALTH CARE BILL. NO REALLY. WE'RE JUST HERE TO HELP PEOPLE LIKE YOU BUT WE HAVE TO PAY OUR BILLS YOU KNOW. TALK TO THEM. NO REALLY. WE HAVE TO DO THIS. ITS NOT OUR FAULT.

[MannyIsGod]

No really, its their fault. Promise, cross my heart hope to die.

[MannyIsGod]

Lol just kidding my toes were crossed.

[MannyIsGod]

Winehole now i understand why you like this posting style. Its fun.

[MannyIsGod]

LOL RATE HIKES IS OBAMA'S FAULT. Fucking Nazi Socialist.

[Winehole23]

http://ganadotel.com/images/receiver.gif

[spursncowboys]

Winehole now i understand why you like this posting style. Its fun.

what posting style?

[ElNono]

A tax break is not a subsidy. Please look the definition up in various sources and see how it applies here.

I said a 'tax subsidy'. You can call it a 'tax break' if it makes you feel better.
At the end of the day, it's money that should have gone to the government coffers but instead stayed with the company under some special arrangement.
I pay my fair share of taxes, I don't see why AT&T should be any different.

[spursncowboys]

I said a 'tax subsidy'. You can call it a 'tax break' if it makes you feel better.
At the end of the day, it's money that should have gone to the government coffers but instead stayed with the company under some special arrangement.
I pay my fair share of taxes, I don't see why AT&T should be any different.

you don't have to make a profit and show an annual growth rate to get a raise. I also doubt you pay more, percentage wise and total, than AT&T.

[boutons_deux]

"they should get into the health care business"

As resellers of group health plans, they are all already major players in the health care business.

And I'm sure they've figured out a way to make money off/scam employees, insurers, and taxpayers(deductions) by reselling group plans.

[Winehole23]

what posting style?Brief posts. I used to get slagged for posts that were too long. Now I get accused of stat padding.

No blame. You can't make everybody happy.

[EVAY]

AP update today:

"AT&T said Friday that the charges reflected changes to how medicare subsidies are taxed.
...
Under the 2003 Medicare prescription drug program, companies that provide prescription drug benefits for retirees have been able to receive subsidies covering 28% of eligible costs. But they could deduct the entire amount they spent on those subsidies - including the subsidies - from their taxable income.

The new law allows companies to only the 72% they spent.".

Of course they will be providing fewer benefits because medicare's prescription drug payment 'donut hole' is closed by this law, which means that they companies won't have to pay for the retirees' drugs, medicare will be covering them.

I think this may have been a bit over-hyped.

Doesn't mean that companies won't reduce payments wherever possible, it just means this is a really good excuse to take a write down.

[ElNono]

you don't have to make a profit and show an annual growth rate to get a raise. I also doubt you pay more, percentage wise and total, than AT&T.

What's your point? I pay whatever the tax code says I owe for my business. I didn't write the tax code, neither did this administration. I'm merely glad that whatever temporal exceptions that special cases large tax contributors are done away with.

[Wild Cobra]

At the end of the day, it's money that should have gone to the government.......... gibberishhh

WTF...

Money that should have gone to the government?

I suppose the deer in the forest belong to the King too?

Oh wait, I forgot...

Big government liberals like yourself are thankful the government lets us keep as much money as they do. Think we should be thankful for what our nannies give us also.

[ElNono]

WTF...

Money that should have gone to the government?


Last I checked money collected through taxes goes to government coffers...
Maybe you know something we don't?

[coyotes_geek]

Looks like Henry Waxman is calling for congressional hearings on the health care writedowns.

[coyotes_geek]

AT&T gets called before congress. Apparently Waxman thinks that the CBO knows AT&T's health care costs better than AT&T does.

http://www.powerlineblog.com/archives/media/ATTpageone.jpg

[George Gervin's Afro]

I don't know where I read it but there seems to be some thought that they are doing this to use as a negotiating tool with thier union. It is my understanding they were getting govt subsidies to provide prescription coverage for their seniors. Now those subsidies go away...

[coyotes_geek]

I'm sure they will use this as a negotiating tool against the union, but that doesn't make the financial hit they're going to take any less real. Their financial statements have to account for what they think their future obligations are going to cost them. If they lose some subsidies, or end up having to pitch in more to fund a retiree health care plan that will be hit with new taxes come 2018, then those obligations will cost them more and they're required to adjust their financials accordingly.

Now it's fair game to question whether or not in AT&T's case that hit really does equate to $1B dollars. Like evay said earlier in the thread, this is a good time to take a writeoff. But there's definitely going to be some kind of hit for companies when the government starts taking subsidies and/or tax breaks away.

[George Gervin's Afro]

I'm sure they will use this as a negotiating tool against the union, but that doesn't make the financial hit they're going to take any less real. Their financial statements have to account for what they think their future obligations are going to cost them. If they lose some subsidies, or end up having to pitch in more to fund a retiree health care plan that will be hit with new taxes come 2018, then those obligations will cost them more and they're required to adjust their financials accordingly.

Now it's fair game to question whether or not in AT&T's case that hit really does equate to $1B dollars. Like evay said earlier in the thread, this is a good time to take a writeoff. But there's definitely going to be some kind of hit for companies when the government starts taking subsidies and/or tax breaks away.

And I think it is fair to say that they know the political ramifications and public reaction of the write off. If they wanted to affect the 2010 mid term elections I cannot think of any better way to do it.

[coyotes_geek]

And I think it is fair to say that they know the political ramifications and public reaction of the write off. If they wanted to affect the 2010 mid term elections I cannot think of any better way to do it.

No doubt. The health care bill is going to hurt AT&T's bottom line so they're lashing out by making a public spectacle out of this. The politicians don't like AT&T casting a bad light on their health care bill so they're going to drag AT&T into a congressional hearing where they can take shots at them. In the end, everyone is out to protect their own interests.

[George Gervin's Afro]

No doubt. The health care bill is going to hurt AT&T's bottom line so they're lashing out by making a public spectacle out of this. The politicians don't like AT&T casting a bad light on their health care bill so they're going to drag AT&T into a congressional hearing where they can take shots at them. In the end, everyone is out to protect their own interests.

I wonder if AT&T will show up.

[coyotes_geek]

They will. No point in turning down an "invite" from an entity that can subpoena you.

[George Gervin's Afro]

They will. No point in turning down an "invite" from an entity that can subpoena you.

I'm not sure but this sounds like a no win situation for AT&T. On one hand they can refuse but they can be issued a subpoena to show. if they show then they will have to explain , under oath, the business reason why they are taking the hit now.

[boutons_deux]

The solution is single-buyer/single-payer medicare-care-for-all public option and get the corps out of the health insurance business.

[coyotes_geek]

I'm not sure but this sounds like a no win situation for AT&T. On one hand they can refuse but they can be issued a subpoena to show. if they show then they will have to explain , under oath, the business reason why they are taking the hit now.

It's definitely no-win for them in the sense that they are writing off $1 billion dollars.

As far as the hearing goes, other than making some AT&T executives spend a day in front of congress when they'd rather be doing something else, it's not going to hurt them.

AT&T will go in and say "here's what your health care bill is going cost us". They'll have numbers to back up their case.

Congress will lecture them, boast about how great the bill is for the american people, call AT&T a bunch of meanines and say "we don't believe your numbers".

AT&T will say "we know our business better than you know our business". They'll be 100% right about that BTW.

Congress will lecture them some more, get their soundbites in, and that will be that. The day still ends with AT&T taking their $1 billion write-down.

[spursncowboys]

Is anyone annoyed that the Congress thinks they can send for private owned co.'s anytime the co. makes a business decision?

[spursncowboys]

If I were AT&T CEO, I would send them a copy of my annual report. All within the GAAP.

[ChumpDumper]

Is anyone annoyed that the Congress thinks they can send for private owned co.'s anytime the co. makes a business decision?"Send for" what? Please clarify.

[Wild Cobra]

Is anyone annoyed that the Congress thinks they can send for private owned co.'s anytime the co. makes a business decision?
LOL...

Put that one in with a very long line of items I'm annoyed with kangaroo court (http://en.wikipedia.org/wiki/Kangaroo_court) congress about.

[coyotes_geek]

Is anyone annoyed that the Congress thinks they can send for private owned co.'s anytime the co. makes a business decision?

It's nothing more than pointless political theater and I for one definitely find political theater annoying. But such is politics in America these days.

[George Gervin's Afro]

Is anyone annoyed that the Congress thinks they can send for private owned co.'s anytime the co. makes a business decision?

I'm annoyed by your ignorance