In a Securities and Exchange Commission filing on Friday, the service provider said it will take a $1 billion non-cash charge this quarter because of changes to the Medicare-subsidy tax treatment. Companies say the government money they receive for retirees’ Medicare Part D drug coverage will become taxable in 2011.
AT&T also said the “additional tax burden” means a reevaluation of employees’ healthcare benefits. The operator offered no further explanation.
AT&T is believed to be the largest company to announce such charges after President Barack Obama signed new healthcare legislation in law on Tuesday. Deere & Co. and Caterpillar Inc. are among the other firms that made declarations similar to AT&T’s.
AT&T is expected to report annual revenue of $124.1 billion this year.