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

To: Bindusagar Reddy who wrote (11245)	11/19/1999 11:53:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 21876

Thanks, But, if you monetize your prior sales now by other means like securitizing and selling the A/R and get cash, it is as good as getting cash by selling as long as it is in US dollars. You are right, but so far as I understand it, this has not yet happened. That's why it is carried as an "other current asset". So for analytical purposes I still consider it as part of A/R. Mr. Fun agrees that changes in "other current assets" includes this reclassified account. Where we seem to be at an impasse is whether Lusk's comments about operating cash flow assumed that this securitized debt is now now considered a cash outflow from financing activities (my position), or whether it is still subsumed under operating cash flows (Mr. Fun's position). Pending a definitive statement from the company, this is conjectural. Some companies consider securitizing a debt as a financing activity. But I feel that this creates a distorted cash flow picture. You should also be aware of the fact that my cash flow analysis did not account for $258MM in one-time costs because insufficient detail was provided. I am certain that the bulk of these charges are non-cash, but I simply have no reasonable basis for allocating them. The company took a one-time $14MM R&D charge, a $172MM SG&A charge, and a $72 MM cost charge (total = $258MM). Were any of these charges cash, and if so, how much? And for that matter, should these charges properly come under the heading of operating cash flow? From what I gather the bulk of them relate to M&A activity, which means that operating cash flow is significantly better than my analysis would indicate. That means that my analysis is a worst case analysis (which I thought I made clear in the notes). TTFN, CTC