Still trying to figure out this "non-cash" charge. It seems it has to do with the rights the Preferred holders have to convert, but its not clear to me whether these charges might be removed if their preferred stock is bought out and replaced with a more straightforward loan.
Found this interesting from the S-1
As part of the MFSNT Acquisition and pursuant to the WorldCom Master
Services Agreement, the Company has agreed to provide telecommunication
infrastructure services to WorldCom Network on a cost-plus 12% basis for a
minimum of $40 million per year, and the aggregate sum payable to the Company
for the five-year contract is guaranteed to be no less than $325.0 million,
subject to certain adjustments if we default on the WorldCom Note. To achieve
these established minimums, WorldCom Network has agreed to award the Company at
least 75% of all of WorldCom Network's outside plant work related to its local
network projects up to $500 million and the Company has agreed to accept and
perform work orders from WorldCom Network for as much as $130 million of
services during each year of the five-year contract. The Company has also
agreed that WorldCom Network will have met all of its commitments to the
Company, to the extent that payments made to the Company reach an aggregate of
$500 million at any time during the five-year term of the contract.
BACKLOG
As of July 31, 1998, backlog was approximately $1.2 billion, approximately
30% of which was attributable to WorldCom Network. We expect to complete
approximately 40% of this backlog within the next fiscal year. As of January
29, 1998, our backlog was approximately $159 million. |
