So I brought up information that materially impacted two other telecoms. Forgive me for even suggesting that FTR is also in this business..
You are the one that holds up these outfits as some sort of beacon of light.
Trust me they have absolutely no problem getting rid of stuff they no longer want.
You complain about a business that take a charge to honor those commitments to their employee pension plans.
Who said I was complaining? Those are your words.
I'm no big fan of senior management either. Many should have their remunerations clawed back, and go to jail. Everyone is being lied to.
Most organizations assume 7-8% rate of return when historically its not even 5%. If the market is flat one year, a return of 15% is required the following year to get back on track. Add to that people living longer and the slope gets real slippery. Companies would go broke funding these plans.
The rate of return is pegged this way so that the books look better.
I know what pensions are supposed to do.
Problem is incorrect assumptions were made pertaining to longevity, annual return rates, interest rates, etc. This remains a massive problem across almost all public/private enterprises. See ERISA Act of 1974.
T and VZ are actually increasing future obligations by shedding "non-core" landline assets. This forces the hand of thousands of eligible "early retirement" employees who would otherwise remain in their positions for years to come.
One only needs to look to the public sector to see how damaging these obligations can become.
You have often spoken of FTR being a payroll machine for upper management.
Well...the same can be said of T and VZ being a retiree pension machine. Look at what happened to GM. The retirees ended up owing almost 40% of the reconstituted GM.
The railroads were overwhelmed by their pension obligations, then big steel, then auto makers. Telco's are next up on the legacy bandwagon.
Over funded you say?
Perhaps you should read the article before opening mouth and inserting foot.
Last month, AT&T took a fourth-quarter pretax charge of $7.9 billion on its pension and retiree benefit plans. It said the charge stemmed largely from declining interest rates, but it also cited the new mortality assumptions. In its annual report, filed Friday, AT&T also said its own update of mortality assumptions boosted its pension and retiree-benefit obligations by $1.5 billion in 2014.
Verizon took a pretax charge to earnings of $7 billion last month, citing the change in mortality assumptions, lower interest rates and severance costs. The telecommunications company declined to comment.
New mortality tables released. First update in 15 years.
T and VZ specifically mentioned.
Here's your copy and paste of the day.
Longer Lives Hit Companies With Pension Plans Hard
FTR's 28,000 combined workforce post recent VZ deal will give them more than enough qualified workers to run the business. The few thousand that take early retirement will be on VZ's books for the next four decades.
See also "synergies".
Portability is meaningful but advances are happening all the time.
Cut and paste this to find out more....
if the deal goes through?
You continually astound me with your naiveté beeess.
This deal was done before it was announced.
FTR is after broadband customers, but will take business, video, and landline subs too.
No, what VZ is stuck with is thousands of GTE retirees, with thousands more hitting the rolls before signing on the dotted line.
Having a bad Monday cd? Don't worry, he'll be back....he can't help himself.
VZ cannot operate its legacy landline business anywhere near as efficiently as FTR can. VZ also needs the cash to offset recent spectrum purchase, buy backs, and also wants to focus its efforts on wireless business. FTR will take the landline business, but is really after the potential DSL/HSI business. FTR is picking up a lot of fiber with this purchase and also more video subs. These additional video customers will help with programming costs.
It was all in the tea leaves prime....misallocation of resources, job destruction, wage stagflation, student loan debt, fraud, greed, under employment, soaring health care costs, energy spikes, etc..
With many working two PT jobs and receiving no benefits, it really comes as no surprise that household formation is suffering.
FTR also cuts hundreds of millions in overhead operating expenses (synergies) with each purchase. These efficiencies will eventually find their way to the bottom line.