Excellent interview. Thanks for posting.
Interesting point he made, BTW, about consolidated EBITDA. Seems that the accounting rules governing the allocations between WCOM and MCIT trackers results in some $800 million of EBITDA getting lost in the shuffle. Adding the EBITDA figures of each tracker together gives you a sum that is $800 million less than the actual consolidated EBITDA, potentially confusing investors (another reason the tracker should be rolled back in, I suppose).
Anyway, Grover puts consolidated EBITDA, the funds available to service the $30 billion of consolidated debt everyone is so worried about, at about $8.5 billion annually right now. With CAPEX headed below $4 billion (they guided last week that they would be cutting at least a billion out of their previous CAPEX budget of $4.9 billion and may cut more - maintenance CAPEX is only about $2 billion), that leaves more than $4.5 billion to pay debt service. After interest (which was $447 million last qtr), that's more than $2.7 billion to pay down (or buy back) debt.
Many other interesting bits, including everything from potential non-core assets that could be sold to how profitable the MCI Neighborhood service is and what segments of the business have the ability to raise prices.
I recommend that everyone NOT listen to this interview and simply dump your stock first thing tomorrow, at market. I'd like to own more, but I'm cheap. ;-)
Bob
PS: Those buying WCOM now are effectively participating in a very large leveraged buyout of one of the world's leading communications companies (without the illiquidity or takeover premium that usually go with taking a company private, BTW).
PPS: BWTHDIK? |
