ights of way," and "build- ing penetrations." His accountants were struggling to make sense of TCG's financial statements. And the investment bankers were run- ning comparables as if the company were considering the purchase of a beach house at the Jersey Shore. In any acquisition, the key question to be answered is whether the property being purchased will increase the purchaser's value. It is not unusual for a purchase to lower, or dilute, a company's earnings per share in the early years. But at some point it should contribute to earnings by either increasing revenue, decreasing expenses, or both. Otherwise, why do it? Sometimes, the purchase price itself can become a drag on earn- ings as "goodwill," or the difference between the acquisition's pur- chase price and the fair value of its assets and liabilities, is amortized over a period that, in those days, could range up to forty years. The TCG purchase was to be accounted for as a "pooling of inter- ests," which meant its operations would simply be combined with AT&T's, triggering no goodwill amortization. However, the AT&T stock issued for the purchase would dilute earnings per share since they would be added to the base of outstanding shares. So the big question was how adding TCG's revenue, expenses, and costs to AT&T's would affect the combined companies' earnings divided by the new number of outstanding AT&T shares. Looking backward, that was not difficult to assess, assuming differ- ent purchase prices. But looking forward required a series of judg- ment calls that would help define the price that AT&T could afford to pay for TCG: Would TCG's revenue growth continue at the same rate, Work Inside Out Toward Your Customers or would it accelerate as AT&T's larger sales force included its services in its product portfolio? Would TCG and AT&T's expenses simply be additive, or would they decline as redundant organizations were elimi- nated? And how would the costs of the two companies' local opera- tions be affected by economies of scale? As Somers listened 