T. Rowe Price Group said it must take a $71 million charge against its 2017 earnings as a result of the federal tax reform enacted in December by Congress.
The charge, announced in a filing with the U.S. Securities and Exchange Commission, will reduce its earnings per share by 28 cents when it announces 2017 financial results next week.
T. Rowe Price said the charge reflects “the remeasurement of its deferred tax assets and liabilities,” as well as “the recognition of a tax liability for the mandatory deemed repatriation of the firm's foreign sourced net earnings.”
Longer-term, T. Rowe Price said the tax reform’s reduction in the U.S. corporate tax rate from 35 percent to 21 percent will reduce its effective tax rate significantly. The company said it expects to pay taxes in the range of 24 percent to 27 percent of its income, down from the mid-30s.