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Technology Stocks : Leap Wireless International (LWIN) -- Ignore unavailable to you. Want to Upgrade?

To: pcstel who wrote (1792)	3/25/2002 3:02:10 PM
From: pcstel	Read Replies (1) \| Respond to of 2737

Should be 4 quarter trailing EBITDA... Not 4 month trailing EBITDA PCSTEL

To: pcstel who wrote (1792)	3/25/2002 3:08:42 PM
From: arun gera	Read Replies (1) \| Respond to of 2737

PCSTEL: Regarding the revision of Covenants, I think the required ratios could change significantly. Remember that the ratios were based on certain expectations of revenue, costs and subscriber numbers. I think the whole underlying model will be affected due to the higher number of subscribers LWIN has achieved. New (lower) required ratios might be generated, if Lucent is in a reasonable mood. Arun

To: pcstel who wrote (1792)	3/26/2002 10:26:26 AM
From: Robert J. Irvin	Respond to of 2737

"At this point, I think Lucent wants out of the VF agreement, and may be unwilling to grant any further covenant modifications, without imposing additional tightening of the repayment terms." Thanks for your thought-provoking reply. At this point I'm on the sidelines waiting for the 10-K and the first quarter results. A great thing about short-term predictions is that I can be proved wrong quickly. No waiting! So here goes. At the moment, Lucent and its junk-bond financing partners should be uncertain as to whether Leap can meet its cash debt service requirements. So, how can they (not just Lucent) get together to relax covenants now? (If they can, hats off to Harvey!) Why relax covenants if creditors are staring at a possible payment default in nine months? Why not wait a quarter or three, since new financing wouldn't be used to fund operations, but would be used to pay down their debt? If the stock price goes down in the meantime, who cares? It will go right back up again if the business plan proves out and vendor financing is relaxed a little, allowing Leap to issue some more stock or convertible debt. After all, hasn't Lucent walked this road itself? For those holding or buying now, high risks could well bring high rewards. I'm hoping that some time in April, lower risks will still bring high rewards, especially if the market hasn't yet priced in a "going concern" qualification in Leap's financial statements (which for the sake of those holding, I hope doesn't happen.)

To: pcstel who wrote (1792)	5/21/2002 7:36:11 AM
From: Robert J. Irvin	Respond to of 2737

Back to spreadsheets. In your post #1792 (before March 31) you said: "Here is guidance EBITDA according to my spread sheet! (All of these figures keep Equipment Costs at about $180 over the period. However, we know that the KYO 1135 voice only just came out, and that the ZIF sub $100 1X handset will be out in Q4. All of these cheaper 1X handsets will create downward pricing pressure on the NOK 5170i and dramatically decrease subsidies, and Equipment costs. ---Q1---------Q2---------Q3---------Q4--------Q1--------Q2 (47.95).....(24.42)..(7.75).....+2.60......+56.39.....+82.7" Post March 31 FRAUD! and HIGH OVERHEAD! issues, Harvey reissued and mostly reaffirmed his original <$78> million EBITDA guidance in revised loan covenants, with EBITDA looking like this: ---Q1---------Q2---------Q3---------Q4---------Q1----CY02 (65.9).........(27)...........-0-..........+9...........+45......(83.9) Allowing for a certain conservatism in loan covenant requirements, as opposed to guidance, not too far off (78) million. But, highly sensitive to EBITDA losses caused by the cost of gross adds. Do you have any more up to date guesses based on what we now know? In particular, I am interested in the interplay between subscriber growth and overhead, plus higher monthly revenues received, on average, from new adds. With the March 31 covenant amendments, I doubt that the Lucent vendor finance debt holders will push a covenant default next year, since they will be receiving cash interest and principal payments to December 31, 2003, absent a default, and other creditors won't. So I predict: 1. that by May 15 of next year, assuming subscriber and EBITDA growth, there will be another set of covenant amendments, and an amendment to continue 2.5% principal payments per quarter to Lucent, rather than the scheduled increase to 3.75% at December 31, 2003, thereby pushing off both the real and accounting "going concern" qualification for one more year; and 2. EBITDA of (25.5) million for Q2 at the Cricket level, to avoid cutting the loan covenants too close. Do you want to crank up your spreadsheets with the help of Harvey's latest guidance?