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AT&T Continues to Insist T-Mobile Deal Will Go Through
Notes That $4 Billion Breakup Fee Tax Deductable
by Karl Bode 08:33AM Thursday Dec 08 2011
Despite regulatory and public opposition, all of their claimed deal benefits being repeatedly proven false (largely by their own data), and a private acknowledgement that the deal has very little chance of success at this point, AT&T continues to publicly insist that the T-Mobile deal is moving along right on schedule. Speaking at an investor conference this week, AT&T Chief Financial Officer John Stephens says AT&T is still pursuing the sale and money really isn't an issue:
quote:
AT&T plans to use the $10 billion cash it had accumulated on its balance sheet to prepare for the closing of the T-Mobile deal, Stephens said. In addition, the company has a $20 billion bridge facility and an $8 billion backup in place. "So we clearly have an ability to close the deal very quickly and have those resources," Stephens said. "That is the plan."
Repetition of false statements so far isn't working on the FCC and DOJ, the latter of which this week stated they weren't even sure if the deal was active. AT&T also noted that their $4 billion deal break up fee would actually be closer to $1.5 billion because it would be tax deductible.

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n2jtx

join:2001-01-13
Glen Head, NY

Magic?

Maybe they are planning to click their shoes together and repeat over and over "the deal will happen, the deal will happen". Either that or a substantial portion of that $38 billion is being redirected to bribes/payoffs politician "education".
--
I support the right to keep and arm bears.
VerizonCynic

join:2006-10-25
Lakewood, CA
Reviews:
·Verizon FiOS

Re: Magic?

said by n2jtx:

Maybe they are planning to click their shoes together and repeat over and over "the deal will happen, the deal will happen". Either that or a substantial portion of that $38 billion is being redirected to bribes/payoffs politician "education".

the way things work now is in soundbites. You just repeat your talking points no matter what. Someone asks you a question just repeat the talking point over and over and over. Sadly it works with most people
--
Lakewood Accountability Action Group | »www.LAAG.us | Demanding action and accountability from local government

IPPlanMan
Holy Cable Modem Batman

join:2000-09-20
Washington, DC
kudos:1

1 edit

How nice...

Gee AT&T, I wonder how you managed to accumulate all that money.... How about a hint?.... It's because you've been sitting on network upgrades and buildouts.

AT&T: 15 LTE cities online by end of 2011
vs.
Verizon: 190 LTE cities online by December 15

As of December 5th, Verizon marked its 1 year deployment anniversary for LTE. Hey AT&T! Verizon did this in a year. What have you been doing?

AT&T has really dug itself into a hole in this town. I don't think anyone even wants its cupcakes anymore:
»www.weeklystandard.com/blogs/bus···064.html
--
"We're going to start at one end of (Fallujah), and we're not going to stop until we get to the other. If there's anybody left when that happens, we're going to turn around and we're going to go back and finish it."
Lt. Col. Pete Newell: 1st Inf. US Army
sparks

join:2001-07-08
Little Rock, AR

Re: How nice...

I guess they realized the bribed the wrong people.
Now they have a new list of politicians that are on the bribe list and going to get this done.

money...they make over a billion a month.
No upgrades and no service makes them very rich.
openbox9
Premium
join:2004-01-26
Germany
kudos:2

Re: How nice...

AT&T is sitting on ~$10B in cash with ~$70B in debt. It will require additional resources to complete this acquisition.

frenchfry

@bellsouth.net
With AT&T falling dead last in the Consumer Reports nationwide test report.

Also the statment "AT&T didn't make the number-one spot in any of Consumer Reports 22 listed U.S. metropolitan areas.". With this being the second year to get a poor report card shows that the network is not top priority.

Until they start losing customers they will go on as is.
openbox9
Premium
join:2004-01-26
Germany
kudos:2

Re: How nice...

said by frenchfry :

Until they start losing customers they will go on as is.

Bingo. This is what so many people around forums like this fail to understand. AT&T continues to add subs. Until that reverses, there's little motivation for AT&T to adjust its strategy.

MSauk
MSauk
Premium
join:2002-01-17
Sandy, UT
Reviews:
·Comcast
said by IPPlanMan:

Gee AT&T, I wonder how you managed to accumulate all that money.... How about a hint?.... It's because you've been sitting on network upgrades and buildouts.

AT&T: 15 LTE cities online by end of 2011
vs.
Verizon: 190 LTE cities online by December 15

As of December 5th, Verizon marked its 1 year deployment anniversary for LTE. Hey AT&T! Verizon did this in a year. What have you been doing?

AT&T has really dug itself into a hole in this town. I don't think anyone even wants its cupcakes anymore:
»www.weeklystandard.com/blogs/bus···064.html

Plus again look at Verizon's 3G coverage map vs ATT. That is another build area where ATT basically did nothing.

They are so far behind the times it is disgusting. Their coverage is awful.
--
801 Images

No to ESPN

@sbcglobal.net

Maybe it is Time to Breakup AT&T Again

Instead of merging maybe ma bell 2 needs to be taken apart.

Also all the people who got bribe money should report it to the IRS or be arrested for prostitution.
openbox9
Premium
join:2004-01-26
Germany
kudos:2

Re: Maybe it is Time to Breakup AT&T Again

AT&T isn't Ma Bell. Besides, the telecommunications environment is different now compared to 70s & 80s.

PapaMidnight

join:2009-01-13
Baltimore, MD

Re: Maybe it is Time to Breakup AT&T Again

The way they've been playing acquisitions, if they were to acquire T-Mobile, they might as well be.
openbox9
Premium
join:2004-01-26
Germany
kudos:2

Re: Maybe it is Time to Breakup AT&T Again

How so? Honest question. Several people like to repeat the "we need to break up Ma Bell again" rhetoric, but I'd really like know how people seriously envision dicing up AT&T and what they realistically expect to gain from such an action.
xrobertcmx
Premium
join:2001-06-18
Sterling, VA
Reviews:
·Verizon FiOS

Re: Maybe it is Time to Breakup AT&T Again

That is an interesting question. I really don't see a point to breaking them up. Before any break up it is basically operating as a duopoly in the local phone market, a duopoly in those markets it offers TV/internet in, and faces very little competition on the cell phone front.
Post break up it would be...more or less the same. Just smaller geographic companies depending on how it is broken up. I guess you could separate the local phone/ISP from the cellphone. Either way I don't see it making a difference.
What I would like to see is break up of the infrastructure from the delivery companies. Both cable and telco. Given the legal issues and cost involved in that, I don't see it as a viable option either.
Another possibility is forced opening of the networks, but I don't know of any company with enough money to buy that many Senators and Members of the house.

--
Retaking our country one election at a time.

No to ESPN

@sbcglobal.net
You are right it ain't Ma Bell, that is why I call it ma bell 2. Remember AT&T is now at&t. LOL

whataname

@iauq.com

Ugghh

The fact that the break up fee effectively is less than half of what it should be because of exploiting tax loopholes makes me ill.

How does making it tax deductible take so much out of the cost? Them making a boneheaded move gets a tax break?
praetoralpha

join:2005-08-06
Pittsburgh, PA

Re: Ugghh

Why doesn't the IRS act like AT&T billing in this case? A tax deduction fee, a calculation fee, and a verification fee. That should shave it down to $250 million or so.
elray

join:2000-12-16
Santa Monica, CA
Reviews:
·Time Warner Cable
·EarthLink
said by whataname :

The fact that the break up fee effectively is less than half of what it should be because of exploiting tax loopholes makes me ill.

How does making it tax deductible take so much out of the cost? Them making a boneheaded move gets a tax break?

Tax accounting 101. Losses are deductible against income.

$4 Billion "Breakup Fee"
X 35% Corporate Tax Rate
------
$1.4 Billion

$3 Billion Cash Payment - $1.4 Billion = ~$1.6 Billion Net Cash Outlay.
VerizonCynic

join:2006-10-25
Lakewood, CA
Reviews:
·Verizon FiOS
looks like they dont need the tax break. they paid no taxes in 2010

»www.stock-analysis-on.net/NYSE/C···me-Taxes

what were the ceo's taxes? lol. 5%...likely less that warren buffett's secretary. if not better call congress and get that fixed
--
Lakewood Accountability Action Group | »www.LAAG.us | Demanding action and accountability from local government
openbox9
Premium
join:2004-01-26
Germany
kudos:2

Re: Ugghh

said by AT&T Annual Report :

Income tax expense decreased $7,253 in 2010 and increased $8,301 in 2009. The decrease in income tax in 2010 resulted primarily from a settlement with the Internal Revenue Service (IRS) related to a 2008 restructuring of our wireless operations, which decreased our income taxes by $8,300. This income tax benefit was partially offset by a $995 charge recorded during the first quarter of 2010 to reflect the deferred tax impact of enacted U.S. healthcare legislation (see Note 10).

axus

join:2001-06-18
Washington, DC
Reviews:
·Comcast

1 edit

It could still go through

2012 Election season is ramping up, politicians need money. AT&T has cash and political connections, and they will violate Americans' privacy whenever the government asks.

Does anyone here think they AT&T would protect Republican candidate's phone calls, if Obama administration offered a trade for merger approval?
nutcr0cker

join:2003-04-02
Chandler, AZ
kudos:2

Re: It could still go through

Wow, the neocon thug moderator did not delete your post

WiseOldBear
De gustibus non est disputandum
Premium
join:2001-11-25
Phoenix, AZ
Reviews:
·Cox HSI

Choice of Evils

Since AT&T and Verizon both run their business according to the Attila the Hun school of business, it is really a choice between evils in selecting a company. Many of us went to AT&T because of iPhone and remain there because going to Verizon is not acceptable. I find the continuing blathering about both companies wasted words and time. They both suck but not as fully as the alternatives. If you really want to improve wireless service in the USA get rid of all the arrogant as**oles in Washington and in each state capital.
Have a nice day
--
My perception is REALITY
tmc8080

join:2004-04-24
Brooklyn, NY
Reviews:
·ooma
·Optimum Online
·Verizon FiOS

To make sennse of the DISCONNECT: some images