Sorry Frank, but I don't really understand exactly what your questions are (actually I don't understand a large percentage of the words you used). I did like your story about Mr. Annunziata. Thanks
Anyway, I'll try to give you a general answer and maybe that will help you answer your own questions. You could also call the company: Kenneth Simril, 310-385-5200, is really good at explaining things. (Make sure you have your Prospectus handy.)
OK, my understanding for how the report:
$1Billion is the total amount of firm sales the company had made from the beginning of time up to the end of last quarter (does not include dark fiber sales).
The $205M of revenue includes the amount of sales made during the quarter that are directly related to a network that is in service (AC-1 and backhaul on Qwest's network) plus the company bills customers for operations, direct administration and maintenance cost incurred, plus 10%.
Net income is figured just like any other company, even though they are based in Bermuda, they follow GAAP. Page 33 of the Prospectus explains how they figure the cost of Capacity Sold.
The $285M in contract sales for the quarter is the total amount of sales actually made during the quarter ( 285 minus 205 equals $80M in sales made during the quarter that are considered as for a part of the network that is not in service yet).
Backlog of $634M is the running total of sales on networks that are not in service yet (so it has not been claimed as revenue. The $80M from this quarter is included in that amount).
As for figuring out how much capacity is left, there is no break down as a percentage, but Capacity Available for Sale is listed as an assets on the Balance Sheet(only includes completed).
My guess at the second part of your question:
Global Crossing sells IRU's in various denominations: A carrier might buy 4 STM-1 "good for 25 years anywhere on the global network," while a small company might want a DS3 from New York to Paris for 10 years. In the olden days of copper, you wouldn't want to sell a IRU because once you sold all your capacity you would have to lay a new cable to get more and that would be very costly and time consuming. Today, thanks to the magic of DWDM, you lay fiber once and it is relatively easy and inexpensive to increase the capacity whenever needed.
Example:
When AC-1 first came on line, it was 40 gigabits, so they figured a minimum sales capacity of 512 circuits. Last October they decided to double the capacity to 80 gigabits.
The cost of the network didn't double, but the number of circuits did.
So, in theory anyway, once you lay one fiber optic cable, you can sell an unlimited number of IRU's and never have sold them all because Lucent will continue to double the capacity of the network. Your guess is as good as mine as to how fast prices decrease and how quickly technology allows them to increase capacity to maintain earnings growth. Don't forget about the new products (VPN's, Private Leased Lines...).
Andy Kessler's mantra: Declining cost create new applications that open up to take advantage of the cheaper functionality.
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