December 22, 2017 / 5:13 PM / 3 months ago

UPDATE 1-Corporate America expects tax overhaul to lift spending, earnings

(Adds statement from Kansas City Southern)

Dec 22 (Reuters) - The Republican-led U.S. House of Representatives on Wednesday passed the biggest overhaul of the U.S. tax code in 30 years, a sweeping $1.5 trillion bill that President Donald Trump signed into law on Friday.

The tax plan is designed to kick-start economic growth in part by offering new incentives for capital investment, which would allow businesses to lower their tax bills by writing off the cost of new machinery, among others, more quickly.

The overhaul includes cuts to corporate tax rates and a cap on business deductions for debt interest payments.

The following are among the U.S. companies that have talked about the impact of tax code revamp:

RenaissanceRe Holdings Ltd:

The reinsurer said on Friday it expects to write down a portion of its deferred tax asset and currently estimates that this anticipated write-down will reduce its net income by about $40 million in the period in which the tax bill is in force.

Sinclair Broadcast Group Inc:

The U.S. broadcaster said on Friday it would pay a special bonus of $1,000 to almost 9,000 full-time and part-time employees at all of its stations and subsidiaries, excluding senior level executives, as a result of the tax overhaul.

Mallinckrodt Plc:

The drugmaker on Friday said in a filing that the Tax Cut and Jobs Act in its current form would result in a neutral to slightly positive impact on its adjusted tax expense. The company also said the reform would result in a deferred tax benefit of $450 million to $500 million.

NuVasive Inc:

The medical device maker said on Thursday savings from the overhaul would boost adjusted earnings by more than 10 percent in the beginning of 2018.

Accenture Plc:

The consulting and outsourcing firm said on Thursday that it expects to record a noncash expense of up to $500 million in fiscal 2018 to reflect lower tax rates on the company’s U.S. deferred tax assets.

Kansas City Southern:

The fourth-largest U.S. railroad said on Thursday it would pay some employees in the United States and Mexico a one-time bonus of $1,000 by the end of 2017 following the tax code revamp.

Wells Fargo:

The third-largest U.S. bank by assets said on Wednesday it would raise the minimum hourly pay rate to $15 for employees, from the current minimum hourly rate of $13.50.

Fifth Third Bancorp:

The Ohio-based regional bank said on Wednesday it would raise the hourly wage for nearly 3,000 of its employees to $15 and give a one-time bonus of $1,000 to more than 13,500 employees.

Comcast Corp

The cable provider said on Wednesday it would give $1,000 bonuses to more than 100,000 employees and invest $50 billion over the next five years in its infrastructure.

AT&T Inc:

The No. 2 U.S. wireless carrier said on Wednesday it plans to invest an additional $1 billion in the United States in 2018 and pay a special $1,000 bonus to more than 200,000 of its U.S. employees.

Boeing Co:

The aircraft maker’s chief executive, Dennis Muilenburg, said on Wednesday the company would invest $300 million in employee facilities and programs as a result of the new law.

FedEx Corp:

The package delivery company’s chief financial officer, Alan Graf, said on Tuesday its earnings could increase by $4.40 to $5.50 per share for fiscal 2018, before mark-to-market year-end pension accounting adjustments, mainly due to revaluation of net deferred tax liabilities. This range also includes an estimated 85 cents to $1 per share as a result of a lower tax rate on earnings in 2018.

Compiled by Bengaluru Newsroom

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