- 59 -
Respondent generally disputes that NITCO, during 1987
through 1989, had the reasonable business needs that petitioners
allege. Respondent agrees with the working capital requirements
and agrees that, for 1987, NITCO needed $669,530 to retire its
long-term debt on the old switching equipment it replaced.
Respondent further agrees that NITCO's reasonable business needs
required the accumulation of some earnings to install fiber optic
cable between its exchanges, but contends that petitioners have
failed to offer convincing evidence establishing the precise
amount. Respondent contends that NITCO, during the years in
issue, had no actual definite plans with respect to meeting the
other alleged business needs and that those alleged needs were
not reasonably anticipated business needs of NITCO. We generally
agree with respondent.
12(...continued)
Fiber optic cable to 500,000 same same
support broadband 1,000,000 same same
Switches for 6,000,000- same same
SS7/Class 10,000,000
Broadband switch 8,000,000- same same
20,000,000
Telephone acquisition 1,000,000- same same
5,000,000
Airport risk:
In NITCO's exchange 300,000,000 same same
Near NITCO's 25,000,000- same same
exchanges 50,000,000
Cellular 2,000,000- same same
diversification 2,500,000
Billings & collections 850,000- same same
computer 1,000,000
Building expansion; 2,000,000- same same
furnished 2,500,000
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