Allegheny Technologies to Record Q1 Charge Due to New Healthcare Law
03/30/2010 - Allegheny Technologies expects to record a non-cash tax charge of approximately $5 million in the first quarter 2010 as a result of the recently-enacted Patient Protection and Affordable Care Act.
Allegheny Technologies Inc. reports that it will record a non-cash tax charge of approximately $5 million ($0.05 per share) in the first quarter 2010 as a result of the recently-enacted Patient Protection and Affordable Care Act and subsequent modifications made in the Health Care and Education Reconciliation Act of 2010 passed by Congress on March 25, 2010.
The new legislation eliminates an existing tax-advantaged subsidy that was designed to encourage companies to provide retiree prescription drug coverage. Although the elimination of this tax advantage does not take effect until 2013, ATI is required by U.S. generally accepted accounting principles to recognize the full accounting impact in the period in which the Act is passed by Congress and signed by the President.
Since future anticipated retiree health care liabilities and related tax subsidies are already reflected in ATI’s financial statements, the change in law results in a reduction of the value of the company’s deferred tax asset related to the subsidy. This reduction in value is expected to create a $5 million one-time, non-cash charge to ATI’s earnings in the first quarter 2010.
Allegheny Technologies Inc., one of the largest and most diversified specialty metals producers in the world, reported revenues of $3.1 billion during 2009. The company’s products include titanium and titanium alloys, nickel-based alloys and superalloys, grain-oriented electrical steel, stainless and specialty steels, zirconium, hafnium, and niobium, tungsten materials, and forgings and castings.
