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 today 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.