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Technology Stocks : (LVLT) - Level 3 Communications -- Ignore unavailable to you. Want to Upgrade?

To: flint who wrote (3023)	7/30/2001 11:09:28 PM
From: SecularBull	Read Replies (1) \| Respond to of 3873

Chump change for the boys in Omaha, don't you think? Even using your assumptions... ~SB~

To: flint who wrote (3023)	8/8/2001 5:14:32 PM
From: Freedom Fighter	Read Replies (1) \| Respond to of 3873

Flint, You are misunderstanding the finances at LVLT. I can't argue whether LVLT is fully funded or not because clearly there are still risks of a shortfall. However, "IF" there is a shortfall, I expect it will be met via a dilution of some kind and not a bankruptcy. Plus I have argued that point to death already. The facts should be clear enough from the following. The main point of misunderstanding is that a revenue shortfall does NOT automatically translate into a funding problem. The network will essentially be built by yearend (all major Cap Ex.). A significant portion of the CAP EX going forward is "success based". By that I mean the company's funding projections assume that a certain level of revenues requires a certain level of Cap Ex. So as revenues go down, so does the Cap Ex. It is not dollar for dollar and naturally there is maintenance Cap Ex., but almost 80% of projected Cap ex for 2002 and 2003 is success based. So if there is a revenue shortfall, it will mostly be offset by a reduction in the Cap Ex level that would have been necessary to support the higher revenues, but that won't be needed with lower revenues. Again, there are risks related to very major shortfalls or dramatically lower than expected gross margins (no evidence of that yet), but the company has a huge amount of flexibility getting to Free Cash Flow break even. Things aren't nearly as dire as some believe. A 500M margin is safety is bigger than it looks with that kind of flexibility and the 500m does not include potential asset sales of non-core stakes etc.... worth close to another billion. Wayne >> Lets use Crowe's number because I know if I do not of course I am lying scum that should be sued. Also Crowe has never been wrong. Crowe said he had a $500 million dollar cushion. But wait that was when he was going to expand his staff to meet the growing revenue needs. He just recently cut 25% of his staff - just 2 months after stating he will be increasing his staff. So we had the short fall the past 2 quarters. We apparently have somewhere between a 25% and 35% short fall the next 2 quarters. 2 quarters at a 20% shortfall. 2 quarters at a 30% shortfall. For kicks lets pretend we do not go from 30% shortfall to 0% in one quarter. I think it safe to say 10% for 2 more quarters.We are up to 120% shortfall. Over the next 18 months the expected revenue per quarter is expected to average around $600 million per quarter. 120% of 600 million is $720 million shortfall in revenue. Crowe said he had $500 million surplus prior to revenue adjustments. Sounds to me he now has a $220 million dollar shortage of revenue. Of course you asked so I did my best to calculate. If you disagree thats your choice.<<