Why did LEAP have to pay $38 million in income taxes for the first nine months of 2001
Most of it had to do with the recognition on the gain on the sale of Chilean venture Smartcom.
Also, what are the chances LEAP will be called on its guarantee of Pegaso debt?
LWIN's guarantee is limited to 33 million I believe.
From a simpleton's viewpoint (all I have at this stage) wondering whether they are better served slowing down the new markets (which looks like it might happen anyway thanks to the Congress putting the ix-nay on the NextWave settlement)
That is the intent of Harvey's 40 market plan. CapEx for 2002 is budgeted to be about 250 million. By my calculations they will have availability of 325 million in CapEx in 2002. Grand Rapids, Muskegon, Saginaw, and Lansing are already near launch status. That leaves LWIN with about 6 million covered POP's to build out ALL of their existing licenses, given their historical average of about 61% coverage within a market. Historical averages of buidout costs are about $48 per covered POP would require 288 million dollars in CapEx.
To build out to launch ready only their licenses that are at risk in 2002 would generate historical coverage of 2.74 million POP's or 84 million in CapEx.
Anyway Harvey said that they have the 40 market plan which Buffalo will be the final market in that plan.
As I have spoken before.. The Nextwave delay has been a blessing for LWIN. They saved over 25 million in accredited interest expense in 2001 alone. If they held these licenses now, another 35 million in accredited interest expense would flow out the door again this year. So Harvey has said that Cricket WILL BE (EBITDA) break even in 2002 and Cash Flow positive in the first part of 2003.
And is laser focused on this goal.
everybody knows they have to hit the equity markets soon
Liquidity at the end of September was.
Cash and cash equivalents: 300,303,000
Short-term investments:42,189
Inventories (phones): 34,831
Notes receivable, 33,284
Total current assets.... 426,440,000
In Q4 Guidance shows a EBITDA loss of 120 million which was offset by the 140 million in proceeds of the Cingular spectrum sale. In addition, soon they will be receiving some portion of their 85 million Auction 35 deposits sitting in the US Govt. . General Fund (probably in excess of 75 million).
The Cingular 140 million will probably show up as Restricted Cash. And the 75 million will end up in the Cash and equiv. column.
At the end of Q4 they should have
180 million cash,
140 million reserved cash in addition to their Smartcom note,and short term investments.
According to my model. Harvey will provide forward guidance of a EBITDA loss of approx. 35 million in Q1 02. And we will receive our 75 million cash back from the FCC in this quarter.
After some debt repayments due on Jan. 6th of some 25 million. LWIN should finish Q1 with approx. 230 million cash, 140 million reserved cash in addition to their Smartcom note,and short term investments. Funding a annualized EBITDA loss of 140 million In Q2 I expect that EBITDA loss to be down to 16 million or 64 million annualized heading to EBITDA break even the following quarter.
I realize we are talking EBITDA. But, If you are worried about liquidity that is what I want to look at. In addition, Harvey says Cash Flow Positive by 1H 2003. Having 300 million in Cash and being EBITDA positive (almost Cash Flow positive) is a fairly strong liquidity position. Without having to hit the equity markets.
i.e. when you add some share points on an existing market, assuming you still have lots of capacity which appears to be the case, A LOT of the incremental revenues fall to the bottom line.
This is where I believe data revenues will come into play.. The infrastructure upgrade in applicable markets to 1XEV-DO will be minimal on a CapEx basis. However, I believe they can offer fixed/mobile unlimited 60-70kbs "always on" data services for an additional 29.99 per month to Cricket subscribers, $34.99 for non subscribers.
Maybe it is way too early for the numbers to be reliable, but metrics that are similar to "same store sales" rather than systemwide net adds and aggregate ARPU would be useful.
Well, LWIN does provide "SSS figures for markets open 1 year or more, (like Starbucks)". They outline Churn, EBITDA, and EBITDAM margins. It was reported that Chattanooga and Nashville turned "Cash Flow Positive" within 12 to 15 months of launch.
I'm liking companies better which are putting away the Risk board for the time being and concentrating on the basic blocking and tackling required to build long-term successful customer franchises - even if it takes a while. "
Well I think that is why the rest of the Launch of the Michigan markets have been put on hold. (Even though considerable CapEx has been invested)
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