Valero Foresees Health Care Hit
Expects $20 million charge, further tax costs
SAN ANTONIO, Texas -- Valero Energy Corp., the largest independent U.S. refiner, said on Friday it expected to take a first-quarter charge of $15 million to $20 million due to the tax impact of a new healthcare law, according to a Reuters report.
A few big U.S. companies have detailed increases in their tax bills due to lower deductions under the law finalized by Congress on Thursday.
"There will be further tax costs due to the legislation in the future, but we don't have calculations on those yet," Valero spokesperson Bill Day said in a statement.
Analysts [image-nocss] had been expecting the San Antonio, Texas-based company, which employs nearly 21,000 people, to report a first-quarter net loss of $32.7 million, according to the average on Thomson Reuters I/B/E/S.
Meanwhile, AT&T Inc. said Friday it will take a $1 billion noncash charge in the first quarter related to the health care overhaul, reported the Associated Press. Earlier in the 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.
AT&T said the charge is to reflect the change of the tax treatment of Medicare subsidies.
The companies said the health care overhaul will make a subsidy that companies receive for retiree drug coverage taxable in 2011.
AT&T also said it is looking into changing the health care benefits it offers to active and retired workers because of the legislation. Analysts said retirees could lose the prescription drug coverage provided by their former employers.