The Company will also record a non-cash charge to tax expense of $70 to $90 million to establish a valuation allowance against certain deferred tax assets, which will reduce earnings per share by $2.40 to $3.10 in the fourth quarter. The action is necessary under accounting standards that require recording a valuation allowance when it is more likely than not that a portion of the asset will not be realized. The valuation allowance will be maintained until sufficient evidence exists to support its reversal.
Additionally, the Company will record a non-cash actuarial loss of approximately $80 million to other comprehensive income within equity as a result of actual pension asset performance as compared to actuarial assumptions and liability increases caused by continued declines in the discount rate. The recording of this loss has no impact on 2011 earnings.
On a preliminary basis, the Company expects fourth quarter 2011 revenue to be $160 to $162 million and pretax losses to be ($9.6) to ($10.1) million. On a non-GAAP basis, pretax income (excluding the impact of pension amortization and settlement and restructuring costs) is expected to be $1.3 to $1.8 million representing growth as compared to the third quarter 2011 (which also excludes the impact of the postretirement plan amendment).
Standard Register also announced the suspension of its quarterly dividend in keeping with Ohio law, which requires that cash dividends be paid only out of a corporation's statutory surplus. Because of the decline in book equity related to additional fourth quarter actuarial losses in the Company's pension plan and the valuation allowance established against deferred tax assets, there is not currently a statutory surplus. The suspension of the dividend results in the annual retention of approximately $6 million of capital by the Company. The 2012 first quarter dividend which was declared in December 2011 will be paid on March 9, 2012.
"The actions we've announced today will more appropriately align our resources with our revenue expectations and in support of our core solutions business. Importantly, they will also assist us in achieving positive cash flow and in making investments in talent, technology and operational infrastructure, as well as sales and marketing optimization, to drive growth," said Joseph P. Morgan, Jr., president and chief executive officer. "We are accelerating our strategy of providing solutions to enable our customers to align their brand communications with their corporate priorities and standards. We have a solid base of customers as well as significant opportunities to grow market share in each of our market-facing business units."
Morgan continued, "Despite today's news, we generated modest revenue gains in the fourth quarter supported in particular by strong results in our financial services segment and healthcare technology. We will continue to aggressively execute our strategic plan. Today's announcement is another important step forward in stabilizing our position and will result in sufficient liquidity and capital resources to fund our near-term operations and growth objectives."
Standard Register has realigned its business to focus on four markets where it has deep industry knowledge and strong relationships: Healthcare, Financial Services, Commercial Markets and Industrial. Its customer base includes approximately half of the Fortune 100 as well as a variety of mid-sized organizations and small businesses. The Company's core solutions help customers operate more efficiently, build brand consistency, and reduce risk through the use of the Company's secure distributed digital network with digital color production and distribution. In addition to its core solutions, the Company delivers market-specific solutions in the areas of software and consulting as well as more traditional products and services such as forms printing, transactional labels, commercial print and digital black and white printing.