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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (103747)	4/14/2006 1:31:53 PM
From: Freedom Fighter	Read Replies (2) \| Respond to of 132070

KT, I have a non poker question. :-) I am trying to understand the valuation of a network company. This is the problem. The network is almost brand new. There are heavy depreciation charges against earnings for the network and equipment, but because it is new, there is very little maintenance cap ex. required right now. As a result, the company is going to generate heavy free cash flow LONG BEFORE it generates any GAAP earnings. In general, I like to look at FCF and its growth, but obviously at some point in the future, maintenance cap ex will rise and eventually (maybe 20 years from now) the entire network will have to be replaced. SO GAAP earnings is also telling me something about the economic reality. Is there a correct/sensible way of looking at this situation?