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Technology Stocks : Lucent Technologies (LU)

LU 2.820

-0.5%

Nov 6 3:59 PM EST

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To: Mr.Fun who wrote (11225)	11/19/1999 4:33:00 PM
From: Chuzzlewit	Read Replies (2) of 21876

Mr Fun, I noted in my original comment that the one time charges made by LU were impossible to allocate. I do not know which costs are non-cash charges and which costs are are cash charges, and which should properly be allocated to operating cash flow and which to capital expenditures. Since you confirmed that the Saudi debt was considered an operating cash flow item I would characterize the reclassification as a gimmick. It essentially adds hundreds of millions to operating cash flow, and subtracts a like amount from investment cash flow. By the way, I use M&A costs as capital investment cash flow items (for the purpose of determining free cash flow). I don't consider passive investments as germane to the discussion because my point is that a company is best valued on the basis of free cash flow. A final point about accounting gimmickry: because a practice is proper under GAAP does not mean that it is a clear or fair representation of the company's financial condition. That's why I spend so much time recasting financial statements. TTFN, CTC

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