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AT&T will take $1B non-cash charge for health care

March 26th, 2010 . by TexasFred

AT&T will take $1B non-cash charge for health care

NEW YORK (AP) - AT&T Inc. will take a $1 billion non-cash charge in the first quarter because of the health care overhaul and may cut benefits it offers to current and retired workers.

The charge is the largest disclosed so far. Earlier this week, AK Steel Corp., Caterpillar Inc., Deere & Co. and Valero Energy announced similar accounting charges, saying the health care law that President Barack Obama signed Tuesday will raise their expenses.

All four are smaller than AT&T, and their combined charges are less than a quarter of the $1 billion that AT&T is planning. The $1 billion is a third of AT&T’s most recent quarterly profit. In the fourth quarter of 2009, the company earned $3 billion on revenue of $30.9 billion.

AT&T said Friday that the charge reflects changes to how Medicare subsidies are taxed. Companies say the health care overhaul will require them to start paying taxes next year on a subsidy they receive for retiree drug coverage.

The telecommunications company also said it is looking into changing the health care benefits it offers because of the new law. Analysts say retirees could lose the prescription drug coverage provided by their former employers as a result of the overhaul.

AT&T rival Verizon Communications Inc. was among 10 companies that sent a letter to congressional leaders in December warning that their costs would increase with the health care changes. Verizon did not immediately return a phone call seeking comment.

Shares in AT&T, which is based in Dallas, climbed 7 cents to $26.22 in afternoon trading Friday.

Full Story Here:
AT&T will take $1B non-cash charge for health care

The article talks about how retirees could lose the prescription drug coverage provided by their former employers as a result of the overhaul. But Obama, Pelosi, Reid and every moonbat in this nation stands and tries to tell us how GOOD Obamacare really is and how GOOD it’s going to be for ALL Americans!

I know people in the financial business, and they are a bit shocked that the market has continued to gain, especially with the passage of the healthcare debacle.

NEW YORK (MarketWatch) — U.S. stock indexes on Friday finished higher for the week, their fourth straight, making it the longest winning stretch for equities since August of 2009. Equities offered a lackluster performance for the day, with the Dow Jones Industrial Average SOURCE

I’ve been told to look for a fairly sharp drop in the market early next week as some of the *big guys* do a bit of profit taking. We’ll see, so far, my sources have never told me wrong.

NEW YORK (MarketWatch) — Commodities, from crude oil to copper and gold — and their related sectors of the stock market — have trailed other assets in the first quarter of 2010. But that’s not necessarily a reason to fret for the market just yet. SOURCE

The key word here is YET! The full ramifications of this ObamaCare bill hasn’t even begun to rear it’s ugly head yet. The Dems that wrote this debacle have NO idea what’s in it, but they forced it off on America, because Obama, Pelosi and Reid said it was GOOD!

SAN FRANCISCO — 3M Co. said Friday that it expects to record a non-cash charge of $85 million to $90 million after tax, or about 12 cents a share, in the first quarter of 2010 as a result of the recently passed health-care bill.

The charge is due to a reduction in the value of the company’s deferred tax asset from a change to the tax treatment of Medicare Part D reimbursements, it said.

In late January, the company had raised its 2010 earnings target to a range of $4.90 a share to $5.10 a share. However, that forecast did not include the impact of the bill. SOURCE

Millions for 3M Corp. Billions for AT&T, and that’s just in the first quarter of 2010, and only 2 major companies announcing so far. And the cost of ObamaCare is a GOOD thing?

Here’s another thing that is killing our market, and I am guessing that it’s completely out of our control. I don’t know that Obama can apologize to North and South Korea and accept enough of the blame on OUR behalf.

Wall Street appeared to be on track for another steady round of gains as the initially markets cheered upbeat consumer sentiment data and a rescue for debt-ridden Greece. However, the gains evaporated on fears a sunken South Korean ship would escalate tensions between North and South Korea. While early reports suggest it may be a false alarm, the markets were somewhat rattled anyway.

“That just took all the steam out of the market,” said Peter Kenny, managing director at Knight Capital Group. “Right now, the market is very susceptible to the geopolitical [risk] because it’s priced for equilibrium. That kind of surprise shot over the bow in all likelihood is going to have a negative effect.” SOURCE

That illustrates the sensitivity of our markets and money. China OWNS us, one minor hiccup in that part of the world stops a strong push by the market and has money people wondering what they can expect next.

I’m not a finance guy, I have NO idea what’s going to happen next, but I this see one guy that makes comments on a great blog I frequent that is always offering up his advice on BUY, SELL, TRADE, HOLD and the gold prices, and exactly what to do WITH your assets and particularly your gold. Oh, and he’s NOT a financial guy either.

He’s a dipstick libber that is barely tolerated by the blog owner, he’s an Obama buffoon and I am seriously hoping that no one actually listens TO this clown and his advice.

My personal adviser has been in the money markets for something like 40 years, he’s even a bit stymied right now. He has to turn to HIS advisers and hopes that they know what’s going on.

For crying out loud folks, and for the sake of your portfolio, don’t listen to rank amateurs. Get your advice and make your moves based on what you are advised to do by your solid money market professionals!

And then, hope and pray, a lot!

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11 Responses to “AT&T will take $1B non-cash charge for health care”

  1. comment number 1 by: Dick Robie

    Well, the “people” voted the jerks in. Now, we gotta vote the jerks out in 2010. This country will not survive this piece of s… health care bill, followed by the Cap and Trade, followeb by mandatory membership in Unions, followeby by higher taxes followed by a 45% Death Tax followed by a VAT tax—it is time that we the people put a stop to this. Vote out Reid and Pelosi and all the other Socialists that dont listen to the people and then the Arab in the White House can go.

    Did I make my point?

  2. comment number 2 by: Ron Russell

    I’m not much of financial wizard I do however listen to some experts, but its always difficult to decide which one as they all have differing answers. As for AT&T having that big loss due to ObamaCare, that doesn’t surprise me at all and I fully expect more such things to surface the farther we get down Obama’s road to socialism. I suspect many unintended consequences to come from this new law or they may not be unintended. I just don’t know!

  3. comment number 3 by: BobF

    I may be mistaken and somebody correct me if I’m wrong but isn’t employer payment for Medicare like Social Security? For every dollar I pay into Social Security, my employer has to match it. If it’s the same for Medicare, then when my Medicare taxes go up, my employers does to. If that’s the case, employers are going to hire less and present employees are going to be expected to do more with less.

  4. comment number 4 by: Bloviating Zeppelin

    Obama and his minions, Leftists, Socialists, all seem to think that business is simply going to “take it on the chin” for the “good of the people.” Guess what? It’s not the job of business to lose money and produce no profit. Many new business owners — small and local businesses — won’t see profits for one, two, three years or more. Laborers on minimum wage can make more money than many initial business owners.

    For example, what’s the profit margin on a tanning shop? You think it’s 10%? Not hardly. Ask around. Margins move towards 3 - 5%. The tanning tax is 10%. That’s roughly 5 - 7% ABOVE their margins. So, yes, thanks Mr Obaka for helping to KILL an entire industry right at the very outset.


    You ignorant Leftist governmental ASSHOLES.


  5. comment number 5 by: HoosierArmyMom

    A song written by George Harrison, but unforgettably chiseled in my mind by my favorite Texan of all time, Stevie Ray Vaughn, seems Oh so appropriate to this tax and spend Congress and Obozo and his minions!

    by Stevie Ray Vaughan

    Let me tell you how it will be
    There’s one for you, nineteen for me
    ‘Cause I’m the taxman
    Yeah, I’m the taxman

    Should five percent appear too small
    Be thankful I don’t take it all
    ‘Cause I’m the taxman
    Yeah, I’m the taxman

    If you drive a car, I’ll tax the street
    If you try to sit, I’ll tax your seat
    If you get too cold, I’ll tax the heat
    If you try to walk, I’ll tax your feet

    Don’t ask me what I want it for
    If you don’t want to pay some more
    ‘Cause I’m the taxman
    Yeah, I’m the taxman

    Now my advice for those who die
    Declare the pennies on your eyes
    ‘Cause I’m the taxman
    Yeah, I’m the taxman

  6. comment number 6 by: ablur

    I was surprised the market didn’t crash yet.

    You get nothing for 4 years but you pay and pay and pay

    We will see the businesses suddenly realize that they have lost far too much. How will they cover the cost? The common choice is labor cuts. This is the only expense they have some say on.

    Looks like Obama found another way to raise unemployment.
    Jobs are his focus all right.

  7. comment number 7 by: Katie

    If these businesses are going to lose money I will give you 3 guesses where they will find the money to implement this abomination of a law?

    That’s right. A brand new tax!

  8. comment number 8 by: Robert

    I am not a financial wizard…. But I slept at a holiday inn once…The market is headed for a BIG drop, it’s been forecast for some time and it’s making gains dispite it. That’s good for those that have been in it for the last 6 months. NOW though, the questions are causing concern, just like it did prior to the bubble bursting in 2008.

    The real kicker, is why the bubble burst in 2008, it burst by design is my contention. The economy was the straw that broke the camels back as far the election goes. No one I don’t care WHO ran against Obama could have won. In 2006 the election of a demorat majority sealed the fate of our economy. In the time frame between 2006 and 2008 Pelosi, and Reid engineered a climate of fear, hate and concern and portrayed the saviour as Obama…They did a great job too.

    NOW, the GOP learned from the Pelosi plan, and are doing the same thing to some degree, they are illuminating a crisis. They are using the fear of the uknown, and they are capitalizing on the climate. BUT they are getting a lot of help from the Dems, they are standing in unison against some of the most damaging legislation to ever cross DC, but they can not stop it. I honestly believe the crash we are about to see in the markets are going to be epic. And Obama and crew have already shot their wad.

    The market will react to this over reaching heavily burdening piece of legislation, but right now there is enough uknown, and enough spin to keep it afloat. I’m betting that before July 4th this year the market will see steep losses.

  9. comment number 9 by: minuteman26

    Have AT&T for phone and internet. My bill went up this month.

  10. comment number 10 by: Vigilante

    minuteman beat me to it in a sense.
    When AT&T and other big companies, caterpillar, 3M, and so
    on take hits like this they just pass it along to the consumers
    by pulling the consumers shorts down and having their way. So, it’s going to be up to the consumers to rid the country of these marxist bastards one way or the other, and THEN, deal with the big companies because they are the assholes that contribute heavely to the election campaigns and then piss and moan about the hits they get.

  11. comment number 11 by: ozarkguru

    Were have lots of economic problems on the horizon. I also posted a wrap up on many different aspects: Economic Damage Of Health Bill Continues which also referenced the AT&T article. But after reading your post, I added and highlighted a link to your article as a commentary on the original article on AT&T.

    Good analysis. There is an old saying about investing in “G-ns or Butter.” Butter is not looking very good.