Klarinet Archive - Posting 000446.txt from 2003/02

From: CBA <clarinet10001@-----.com>
Subj: [kl] company acquisitions?
Date: Sun, 16 Feb 2003 07:07:06 -0500

Just an aside, since this was in the mix today...

The main reason why AOL Time Warner (and many other large
companies doing acquisitions) had a loss last year was because
of a change in financial reporting and taxes that occurred after
the Enron scandal. Companies and corporations are not allowed to
take losses from their new acquisitions scattered over many
years anymore. They have to take the acquisition loss ALL IN ONE
YEAR. If you look at the AOL Time Warner reports closely,
including things in their reviews in the financial markets, the
company had a STELLAR year with movies, new AOL products, TNT
classics movies selling like hotcakes, cable and cable modem
sales up, etc. The financial reports are very clear about AOL
Time Warner having one of the biggest profit years out of any
company at any time, except for the fact that the new law
requiring them to take the losses for the merger all at once
making the number seem QUITE illogical and costly. Under the old
laws with the loss being divided over 10 years or more, the
merger losses would have been negligible, and the company would
look like a god on the marketfront. i think AOL Time Warner is
one of the most diversified and strongest companies out
there...even moreso than Microsoft.

Coca Cola corporation decided last year, since it does many
acquisitions in the softdrink and food industry, that they would
no longer do *public* quarterly financial reporting OF ANY KIND
to the public (they still do their taxes, of course,) and I
applaud them for it. Markets fluctuate radically, and if we help
a company's demise because it bought something to stay
marketable, and we see them reporting it by law to the IRS, only
to look financially bust, it will be the end of many large
companies as we know it.

Just my 2 cents...

Kelly Abraham
Woodwinds - New York City
--- Neil Leupold <leupold_1@-----.com> wrote:
<<SNIP>>One of the
> main reasons that one business might acquire another is in
> anticipation of potential synergies
> between their joint operations, e.g., AOL and Time-Warner,
> which turned out to be a total flop, of
> course.

Do you Yahoo!?
Yahoo! Shopping - Send Flowers for Valentine's Day
http://shopping.yahoo.com

---------------------------------------------------------------------