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Technology Stocks : Micron Only Forum -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (47285)	7/24/1999 2:23:00 PM
From: Thomas G. Busillo	Read Replies (1) \| Respond to of 53903

MB, I was playing around with the question of their interest expenses, missed payments, etc., just to see how things stood. The way I'm interpreting it, they've accrued $27.1 mil. across all interest-bearing liabs. They actually reduced that figure by $5 mil. on a sequential basis last Q. The thing that shocked me the most is how much they're making on interest income. In their PR statements it's lost in the "interest expense, net" line item, but it's pretty interesting. By my calculations MU is on track to make roughly pre-tax $69 mil. on interest income this FY. What happens when the liquid investments get turned into fixed assets? In theory, if everything goes right, they should be making more than about 5.4% annual return, but if things get dicey, that's a source of income that reason would say is destined to shrink. Also, by presenting "interest expense, net", IMHO, the actual interest expense sort of gets lost. I'm estimating it to be around $31.5-31.8 mil. per quarter. I just thought it was interesting. Here's what I've been playing around with. Comments, criticism, feedback welcome. Q399 Q299 Q199 Q498 Interest paid (cummulative from Q1) [SOURCE: Cash Flow Statement: supplemental data] 67.4 30.9 6.9 Interest paid in quarter [calc.] 36.5 24 6.9 accrued interest payable [SOURCE: Notes to Consolidated Financials] 27.1 32.1 24.3 7.7 delta [calc.] -5 7.8 16.6 estimated quarterly int. exp.[calc.] 31.5 31.8 23.5 net interest expense 14.4 11.7 7.9 [SOURCE: income statement] implied interest income 17.1 20.1 15.6 [calc.] marketible securities 1309.9 1353.7 1157.1 90.8 [SOURCE: balance sheet] avg. 1331.8 1255.4 623.95 interest income as % ending MS [calc] 1.31% 1.48% 1.35% interest income as % average MS [calc] 1.28% 1.60% 2.50% Est. 4q ending marketible securities 1250 4q est. pre-tax interest income 16.3 FY99 est. pre-tax interest income 69.1 FY99 est. avg. marketible securities 1267.675 implied rate 5.45% Good trading, Tom