Tuesday, January 2, 2018

According to KPMG, under new tax reform, interest expense deductions will work as follows: “Limit the deductibility of net business interest expense to 30% of adjusted taxable income.”

Using our Calcbench excel add-in, we looked for companies that may have their interest expense deductibility limited under the conditions outlined above. To quickly recap, we took the entire universe of firms and filtered it by firms with EBIT greater than 250 million USD in 2016. We also removed all financial firms from our list leaving us with 150+ firms.

You can do the same (or better) than what we have done.

Here is the list of firms below:

Company EBIT InterestExpense Pct of EBIT
Aecom $383,717,000 $258,162,000 67%
AerCap Holdings N.V. $2,292,257,000 $1,091,861,000 48%
Aes Corp $1,104,000,000 $1,431,000,000 130%
Air Lease Corp $866,439,000 $286,201,000 33%
Aircastle LTD $412,165,000 $255,660,000 62%
Alliant Energy Corp $639,600,000 $196,200,000 31%
Amc Entertainment Holdings, Inc. $261,022,000 $121,537,000 47%
American Electric Power Co Inc $1,336,500,000 $877,200,000 66%
Amerigas Partners Lp $373,715,000 $164,095,000 44%
Andeavor Logistics Lp $500,000,000 $191,000,000 38%
Arconic Inc. $913,000,000 $499,000,000 55%
Avis Budget Group, Inc. $482,000,000 $203,000,000 42%
Axalta Coating Systems Ltd. $265,600,000 $178,200,000 67%
BALL Corp $463,000,000 $338,000,000 73%
Berkshire Hathaway Energy Co $4,584,000,000 $1,854,000,000 40%
Berry Global Group Inc $599,000,000 $291,000,000 49%
Boardwalk Pipeline Partners, LP $485,200,000 $182,800,000 38%
Borgwarner Inc $268,800,000 $84,600,000 31%
Boston Scientific Corp $410,000,000 $233,000,000 57%
Caesars Entertainment Resort Properties, LLC $258,000,000 $396,000,000 153%
California Resources Corp $529,000,000 $328,000,000 62%
Calpine Corp $790,000,000 $631,000,000 80%
Caterpillar Inc $644,000,000 $505,000,000 78%
Centerpoint Energy Inc $1,024,000,000 $338,000,000 33%
Centurylink, Inc $2,338,000,000 $1,318,000,000 56%
Charter Communications, Inc. /MO/ $3,319,000,000 $2,499,000,000 75%
Claires Stores Inc $251,935,000 $200,187,000 79%
Clear Channel Outdoor Holdings, Inc. $565,691,000 $374,892,000 66%
Cleveland-Cliffs Inc. $407,500,000 $200,500,000 49%
Cms Energy Corp $1,255,000,000 $435,000,000 35%
CNH Industrial N.V. $1,019,000,000 $1,028,000,000 101%
Columbia Pipeline Group, Inc. $352,700,000 $121,200,000 34%
CommScope Holding Company, Inc. $544,579,000 $277,534,000 51%
Dana Inc $332,000,000 $113,000,000 34%
DCP Midstream, LP $461,000,000 $321,000,000 70%
Dish Dbs Corp $2,231,641,000 $825,615,000 37%
Dte Energy Co $1,557,000,000 $472,000,000 30%
Duke Energy CORP $5,650,000,000 $1,916,000,000 34%
EchoStar CORP $389,225,000 $123,630,000 32%
Emera Inc $626,558,200 $442,143,000 71%
Enbridge Energy Partners Lp $405,100,000 $445,500,000 110%
Enbridge Inc $3,054,187,800 $1,201,722,000 39%
Energy Transfer Equity, L.P. $2,075,000,000 $1,803,000,000 87%
Energy Transfer Partners, L.P. $706,000,000 $268,000,000 38%
Energy Transfer, LP $1,755,000,000 $1,317,000,000 75%
Envision Healthcare Corp $347,000,000 $142,400,000 41%
EP Energy Corp $286,000,000 $312,000,000 109%
Exelon Corp $3,525,000,000 $1,536,000,000 44%
Expedia, Inc. $430,022,000 $173,148,000 40%
Extended Stay America, Inc. $362,240,000 $164,537,000 45%
Federal-Mogul Holdings LLC $290,000,000 $145,000,000 50%
Fidelity National Information Services, Inc. $1,278,000,000 $392,000,000 31%
First Data Corp $1,549,000,000 $1,068,000,000 69%
Fortis Inc. $1,160,908,800 $512,432,400 44%
Frontier Communications Corp $908,000,000 $1,531,000,000 169%
Gatx Corp $453,500,000 $148,100,000 33%
Genesis Energy Lp $254,371,000 $139,947,000 55%
HD Supply Holdings, Inc. $612,000,000 $269,000,000 44%
Hilton Worldwide Holdings Inc. $938,000,000 $394,000,000 42%
Hrg Group, Inc. $569,400,000 $402,500,000 71%
Hughes Satellite Systems Corp $370,080,000 $187,198,000 51%
Huntsman CORP $650,000,000 $202,000,000 31%
Hydro One Inc $954,575,400 $296,273,600 31%
iHeartMedia, Inc. $1,559,505,000 $1,849,982,000 119%
IHS Markit Ltd. $260,400,000 $119,400,000 46%
Intelsat S.A. $1,948,599,000 $938,501,000 48%
International Game Technology PLC $779,841,000 $469,268,000 60%
International Paper Co /NEW/ $1,476,000,000 $520,000,000 35%
ITC Holdings Corp. $554,000,000 $211,000,000 38%
J C Penney Co Inc $365,000,000 $363,000,000 99%
Kellogg Co $1,333,000,000 $406,000,000 30%
Kinder Morgan, Inc. $3,444,000,000 $1,806,000,000 52%
Level 3 Parent, LLC $1,384,000,000 $546,000,000 39%
Liberty Global plc $3,187,800,000 $2,638,400,000 83%
Lifepoint Health, Inc. $376,000,000 $171,200,000 46%
Macquarie Infrastructure Corp $342,927,000 $116,933,000 34%
Mallinckrodt plc $616,700,000 $384,600,000 62%
Mediacom Broadband Llc $250,611,000 $78,725,000 31%
Melco Resorts & Entertainment LTD $292,712,000 $223,567,000 76%
MGM Resorts International $1,953,950,000 $694,773,000 36%
Mondelez International, Inc. $2,569,000,000 $1,115,000,000 43%
Mplx Lp $632,000,000 $210,000,000 33%
Mylan N.V. $576,500,000 $454,800,000 79%
Navistar International Corp $295,000,000 $327,000,000 111%
NCL CORP Ltd. $920,647,000 $276,859,000 30%
Ncr Corp $549,000,000 $170,000,000 31%
Netflix Inc $410,621,000 $150,114,000 37%
Newell Brands Inc $1,219,000,000 $404,500,000 33%
Nexstar Media Group, Inc. $286,753,000 $117,163,000 41%
NGL Energy Partners LP $296,291,000 $150,478,000 51%
Nisource Inc/DE $510,200,000 $349,500,000 69%
Northwestern Corp $251,495,000 $94,970,000 38%
Norwegian Cruise Line Holdings Ltd. $917,162,000 $276,859,000 30%
Novelis Inc. $491,000,000 $294,000,000 60%
NRG Yield, Inc. $281,000,000 $280,000,000 100%
Oglethorpe Power Corp $312,567,000 $262,222,000 84%
On Semiconductor Corp $321,400,000 $145,300,000 45%
Oncor Electric Delivery Co Llc $777,000,000 $336,000,000 43%
Oneok Inc /NEW/ $1,427,607,000 $469,651,000 33%
Open Text Corp $368,675,000 $119,124,000 32%
Owens Illinois Inc /DE/ $628,000,000 $272,000,000 43%
Party City Holdco Inc. $276,094,000 $89,380,000 32%
Penn National Gaming Inc $555,674,000 $459,243,000 83%
PG&E Corp $2,268,000,000 $829,000,000 37%
Plains All American Pipeline Lp $1,222,000,000 $467,000,000 38%
Plains Gp Holdings Lp $1,218,000,000 $480,000,000 39%
Platform Specialty Products Corp $327,600,000 $375,700,000 115%
Pnm Resources Inc $301,514,000 $128,633,000 43%
Portland General Electric Co /OR/ $355,000,000 $112,000,000 32%
Post Holdings, Inc. $276,400,000 $306,500,000 111%
Puget Energy Inc /WA $808,242,000 $355,139,000 44%
Red Rock Resorts, Inc. $304,176,000 $140,189,000 46%
Regal Entertainment Group $409,800,000 $128,100,000 31%
Rite Aid Corp $480,436,000 $431,991,000 90%
Rowan Companies Plc $477,300,000 $155,500,000 33%
Sabre Corp $486,286,000 $158,251,000 33%
Scana Corp $1,116,000,000 $342,000,000 31%
Select Medical Holdings Corp $350,815,000 $170,081,000 48%
Sensata Technologies Holding N.V. $487,263,000 $165,818,000 34%
Service Corp International $488,751,000 $162,093,000 33%
Servicemaster Global Holdings Inc $388,000,000 $153,000,000 39%
Shire plc $937,300,000 $469,600,000 50%
Sinclair Broadcast Group Inc $584,033,000 $211,143,000 36%
Spectra Energy Corp. $1,830,000,000 $594,000,000 32%
Spectrum Brands Holdings, Inc. $647,600,000 $250,000,000 39%
SPRINT Corp $1,724,000,000 $2,495,000,000 145%
SS&C Technologies Holdings Inc $292,070,000 $129,942,000 44%
Station Casinos LLC $310,088,000 $140,189,000 45%
Surgery Partners, Inc. $285,177,000 $100,571,000 35%
T-Mobile US, Inc. $3,796,000,000 $1,730,000,000 46%
Teekay Corp $389,277,000 $282,966,000 73%
Telephone & Data Systems Inc /DE/ $251,000,000 $170,000,000 68%
Tenet Healthcare Corp $1,227,000,000 $979,000,000 80%
Tennessee Valley Authority $2,369,000,000 $1,136,000,000 48%
Toys R Us Inc $460,000,000 $457,000,000 99%
Transcanada Corp $2,142,693,000 $1,510,088,400 70%
Transcanada Pipelines Ltd $2,153,274,200 $1,456,426,600 68%
TransDigm Group INC $1,251,966,000 $483,850,000 39%
Transocean Ltd. $1,323,000,000 $409,000,000 31%
United Rentals Inc /DE $1,420,000,000 $511,000,000 36%
US Foods Holding Corp. $360,189,000 $229,080,000 64%
Usg Corp $415,000,000 $145,000,000 35%
Vector Group Ltd $269,411,000 $142,982,000 53%
Wendy’s Co $315,769,000 $114,802,000 36%
West Corp $408,091,000 $148,627,000 36%
Western Digital Corp $1,590,000,000 $847,000,000 53%
Western Refining, Inc. $364,473,000 $123,291,000 34%
Western Union CO $490,700,000 $152,500,000 31%
WestRock Co $501,300,000 $256,700,000 51%
Williams Companies Inc $779,000,000 $1,217,000,000 156%
Williams Partners L.P. $1,359,000,000 $949,000,000 70%
Windstream Holdings, Inc. $319,500,000 $860,600,000 269%
Wynn Resorts Ltd $586,426,000 $289,365,000 49%
XPO Logistics, Inc. $467,900,000 $361,100,000 77%
Zayo Group Holdings, Inc. $345,600,000 $241,500,000 70%
Zimmer Biomet Holdings, Inc. $754,600,000 $357,900,000 47%
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