AT&T Will Take a $1 Billion Charge Due to the Health Care Bill. What Does That Mean to Me as a Shareholder?

Question by Lance: AT&T will take a billion charge due to the health care bill. What does that mean to me as a shareholder?
AT&T will take $ 1B non-cash charge for health care
AT&T will take a $ 1 billion non-cash charge in first quarter related to the health care bill
http://finance.yahoo.com/news/ATT-will-take-1B-noncash-apf-1302110960.html?x=0

On Friday March 26, 2010, 2:23 pm

NEW YORK (AP) — AT&T will take a $ 1 billion non-cash charge in the first quarter related to the health care overhaul.

AT&T Inc. said Friday that the charge is to reflect the change of the tax treatment of Medicare subsidies. Companies say the health care overhaul, which President Barack Obama signed Tuesday, will make a subsidy that companies receive for retiree drug coverage taxable in 2011.

AT&T also says it is looking into changing the health care benefits it offers to active and retired workers because of the legislation.

On Thursday, Deere & Co. and Caterpillar Inc. announced similar charges. Both say the health care law will raise their related expenses.
I would like some more explanation from the investment advisor on why the non-cash charge doesn’t mean much. My company is having to do something similar because we will have to pay more in taxes. We are taking the charge now like bad debt expense. The liability will come through unless the bill is repealed. At that time, we will actually have less cash.

Best answer:

Answer by Gorkbark Porkduke Gefunken Fubar
It means your stock is heading south.

Add your own answer in the comments!

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