bofp, RE: You are of course considering ALL liabilities as Debt, which is, in the context of this board, a little disingenuous. NOBODY uses total liabilities as debt in computing enterprise value.
When you're looking at bankruptcy risk, which is the context of this entire discussion, I would disagree.
Management Guidance from the pre-announcement for higher revenues +5-10% AND considerably higher op margins ~1500bp Dec to March, SO cash impact should be lower not higher and Cash balances ex. one-time restructuring charges should be as much as $4,500M at end of March.
Management guidance is also for negative cash flow. The cash balance could be higher only because of the convert issue.
Things would have to get MUCH worse for LU to flirt with bankruptcy.
On the contrary, things HAVE to get better for LU NOT to flirt with bankruptcy.
Granted, things might get better for LU, but considerable deterioration is not necessary for LU to go bankrupt.
Note also that even though Moody's downgraded LU a few days ago, LU continues to have a negative ratings outlook. And LU's senior debt is already well within junk levels. |
