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To: Wyätt Gwyön who wrote (120472)	6/15/2002 2:50:52 PM
From: techlvr	Read Replies (1) \| Respond to of 152472

PCS has its debt largely because it has built the vast majority of the backbone for its 3G network. AWE has barely even started on that road. I have heard estimates of $20B for its upgrade path to WCDMA, including the various pit stops along the way. At that point, PCS looks much better positioned for the middle and long run. AWE is just starting to pile on the expenses, or if it chooses to wait to roll out 3G, it stands to loose market share.

To: Wyätt Gwyön who wrote (120472)	6/15/2002 5:27:03 PM
From: Dexter Lives On	Respond to of 152472

when you look at forward free cash flow, you will need to consider what future interest payments will be in light of the likelihood for higher interest rates on rollover debt. Good point! One would have to think if the US dollar gets its head bashed in (which seems highly likely), rates will spike as the Fed rushes to try and defend the currency, not to mention the imported inflation as foreign goods become very expensive... Also, if net adds varied by 400K because of bad credit customers (and obviously free gsm phone competition), imagine how many bad credit risks Sprint PCS must have in its' subscriber list!! Can you say BAD RECEIVABLES!! All of their estimates are based on best case estimates and ASSUME no downgrade to JUNK status; imagine the impact of these real world effects on their projected cash flow... No, there's very little chance PCS will survive. JMHO. Rob

To: Wyätt Gwyön who wrote (120472)	6/16/2002 2:03:51 AM
From: Clarksterh	Read Replies (1) \| Respond to of 152472

no, PCS has about $17BILLION in debt (i understated it before by saying $14BILLION), compared to around $3BILLION in net debt at AWE. This is, sadly, not even close to the first time that Barron's has gotten simple finances wrong. I suspect that your article is by some analyst with an agenda. AWE's long term debt per its most recent 10Q, is about $8.2B (PCS' is indeed accurate in Barron's) and the only possible way to fudge the accounts and get a much better "net debt" for AWE than PCS is counter that with only type of plus side asset that PCS does not have and AWE does - Investments in and Advances to Unconsolidated Subsidiaries which is $3.5B. If this was loans to the subsidiaries, this would be a reasonable thing to do. But it isn't! Per the 10Q it is equity stakes. That is not a liquid, interest paying asset which can be subtracted from debt. Thus, Barron's is, as is not unusual, wrong. I wish the analysts could actually be unbiased, or failing that, at least the press. Oh well! all that means is that Sprint has a ton of debt (Barron's said $2BILLION this year) That is about correct - they just got $2B more of debt. 2) Sprint PCS, while growing, will continue to require heavy capital spending; I agree this is true, but it is very very much worse for AWE. They have been spending 2 to 3 times as much on capital for at least the last year. you will need to consider what future interest payments will be in light of the likelihood for higher interest rates on rollover debt. Even at twice the current rate, the interest payments are nowhere near what AWE is spending on capital equipment. So again, the lesson is that technology matters. Of course so do finances, but at this point based on cash flow analysis alone I'd say PCS is actually a better bet than AWE. There are of course ancillary questions such as how much credit is the parent willing to give the child. These probably are even more important in the short run, but are very unknowable. Clark