PEORIA, Ill. (AP) -- Heavy-equipment maker Caterpillar says the new health care reform law will create a $100 million drag on its first-quarter earnings because of tax law changes.
The Peoria company said Wednesday that the health care overhaul President Barack Obama signed this week will reduce the tax deduction it receives for its retiree health care program.
Caterpillar says even though the change won't take effect until 2011, its liabilities for retiree health care are already reflected in its financial statements.
So Caterpillar expects to record an after-tax charge of $100 million in the first quarter.
And the company says the tax-law change is not reflected in its already cautious 2010 profit outlook of about $2.50 per share.