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Technology Stocks : Lucent Technologies (LU) -- Ignore unavailable to you. Want to Upgrade?

To: Mr.Fun who wrote (11228)	11/19/1999 5:26:00 PM
From: Chuzzlewit	Read Replies (2) \| Respond to of 21876

Finally, why do you suspect that LU has lied about its operating cash flow in a published press release given that its year end financial statements will be audited by a supposedly professional and impartial accounting firm? I made no such accusation -- I think you are again misinterpreting my remarks. As a matter of accepted practice when a security is created (as was the case of reclassifying the Saudi A/R), you end up with what appears to be a boost to the operating cash flow because A/R is reduced. The creation of a security is generally considered as an investment cash flow item rather than an operating cash flow item. And if that is true (as I suspect it is in this case), you end up with a serious distortion of the meaning and spirit of operating cash flow. As I have repeatedly said, detailed discussion of cash flow must await the publication of the company's 10-K. Let me hasten to add that I am long LU. I have owned stock in this company from its inception. I am simply nervous about the "quality" of its earnings. There is a sizable current debt overhang for the year (almost $2.9 BB), and based on preliminary cash flow analysis (and I underscore the word preliminary) it looks as if the debt will need to be refinanced because operations are simply not providing the cash required. The implication is simply that Lucent may not be able to fund its growth internally. In our previous discussion (about three months ago) you felt that internal efficiencies are improving. I am looking for tangible evidence of that improvement. What is heartening (and should not be overlooked) is that this quarter's cash operating flow was a massive improvement over last quarter's performance. TTFN, CTC

To: Mr.Fun who wrote (11228)	11/19/1999 5:28:00 PM
From: GVTucker	Respond to of 21876

Mr. Fun, RE: Finally, why do you suspect that LU has lied about its operating cash flow in a published press release given that its year end financial statements will be audited by a supposedly professional and impartial accounting firm? Operating cash flow is not necessarily a GAAP item; it is often not the same as 'Cash Flow From Operations' item on the audited cash flow statement. It is very possible to be truthful about 'Operating Cash Flow' and still be misleading.