(The Associated Press circulated the following on April 7, 2010.)
NEW YORK — Freight railroad operator Norfolk Southern Corp. said it will take an accounting charge and expects to pay $27 million in extra taxes in the first quarter because of a provision in the health care overhaul.
More than a dozen companies have disclosed that they will take non-cash charges because of a provision in the law. AT&T and Verizon both said they would take charges of around $1 billion.
The companies currently receive a government subsidy to provide prescription drug benefits for retirees. They’ve been able to deduct from taxes all the money they spend on the benefits, including the 28 percent federal subsidy, but that break will end in 2013 under the new law.
Norfolk Southern said accounting rules required it to record the entire expense of the new law in the quarter in which it was enacted. The company disclosed the expense in a filing with the Securities and Exchange Commission on Monday.
Other companies that recently announced charges include Boeing, Lockheed Martin, Ingersoll-Rand and Goodrich.
Norfolk Southern shares rose 9 cents to $57.68 in afternoon trading.