Archive for December 23rd, 2008

Lucent Technologies: evaluate the asset, debt, and equity structure?

Tuesday, December 23rd, 2008
Barry W


Executive Summary We design and deliver the systems, software and services that drive next-generation communications networks. Backed by Bell Labs research and development, we use our strengths in mobility, optical, access, data and voice networking technologies, as well as services, to create new revenue-generating opportunities for our customers, while enabling them to quickly deploy and better manage their networks. Our customer base includes communications service providers, governments and enterprises worldwide. We have three segments organized around the products and services we sell. The reportable segments are Integrated Network Solutions (“INS”), Mobility Solutions (“Mobility”) and Lucent Worldwide Services (“Services”). INS provides a broad range of software and wireline equipment related to voice networking (primarily consisting of switching products, which we sometimes refer to as convergence solutions, and voice messaging products), data and network management (primarily consisting of access and related data networking equipment and operating support software) and optical networking. Mobility provides software and wireless equipment to support radio access and core networks. Services provides deployment, maintenance, professional and managed services in support of both our product offerings as well as multi-vendor networks. Beginning in fiscal 2001, the global telecommunications market deteriorated, resulting from a decrease in the competitive local exchange carrier market and a significant reduction in capital spending by established service providers.This trend intensified during fiscal 2002 and continued into fiscal 2003. Reasons for the market deterioration included general economic slowdown, network overcapacity, customer bankruptcies, network build-out delays and limited availability of capital. We believe that the market for telecommunications equipment has stabilized and is starting to grow in certain areas. The growing demands of enterprises and consumers for additional services tailored to their needs is creating the need for a new convergence of networks, technologies and applications. Required 1. Using the Consolidated Balance Sheets for Lucent Technologies for September 30, 2004 and 2003, prepare a common-size balance sheet. 2. Evaluate the asset, debt, and equity structure of Lucent Technologies, as well as trends and changes found on the common-size balance sheet. 3. What concerns would investors and creditors have based on only this information? 4. What additional financial and nonfinancial information would investors and creditors need to make investing and lending decisions for Lucent Technologies? LUCENT TECHNOLOGIES INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in Millions, Except per Share Amounts) September 30, September 30, 2004 2003 Assets Cash and cash equivalents $ 3,379 $ 3,821 Marketable securities 858 686 Receivables 1,359 1,511 Inventories 822 632 Other current assets 1,813 1,213 Total current assets 8,231 7,863 Marketable securities 636 — Property, plant, and equipment, net 1,376 1,593 Prepaid pension costs 5,358 4,659 Goodwill and other acquired intangibles, net 434 188 Other assets 928 1,608 Total assets $ 16,963 $ 15,911 Liabilities Accounts payable $ 872 $ 1,072 Payroll and benefit-related liabilities 1,232 1,080 Debt maturing within one year 1 389 Other current liabilities 2,361 2,393 Total current liabilities 4,466 4,934 Postretirement and postemployment benefit liabilities 4,881 4,669 Pension liabilities 1,874 2,494 Long-term debt 4,837 4,439 Liability to subsidiary trust issuing preferred securities 1,152 1,152 Other liabilities 1,132 1,594 Total liabilities 18,342 19,282 Commitments and contingencies 8.00% redeemable convertible preferred stock — 868 Shareowners’ Deficit Preferred stock—par value $1.00 per share; authorized shares: 250; issued and outstanding: none — — Common stock—par value $.01 per share;Authorized shares: 10,000; 4,396 issued and 4,395 outstanding shares as of September 30, 2004,and 4,170 issued and 4,169 outstanding shares as of September 30, 2003 44 42 Additional paid-in capital 23,005 22,252 Accumulated deficit (20,793) (22,795) Accumulated other comprehensive loss (3,635) (3,738) Total shareowners’ deficit (1,379) (4,239) Total liabilities, redeemable convertible preferred stock and shareowners’ deficit $ 16,963 $ 15911

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Debt Reduction Help Can Restore Your Financial Well Being

Tuesday, December 23rd, 2008
Andrew Bicknell


Nothing can damage your financial future quite like debt can. Unfortunately millions of people find themselves falling deeper and deeper in debt every year. This not only affects their ability to pay for daily necessities but also plan for the financial future of their families. A debt reduction program can help if paying back borrowed money is hanging over your life like a dark cloud.

The first question most people ask is “Where do I start?” because getting started is usually the hardest part. A majority of those with loads of outstanding debt don’t even know where all their money is going; they just pay the minimums, if they can, as the bills keep rolling in each month. There is that sinking feeling that it’s out of control but until they look at it closely they really don’t know how much is owed and to whom.

Getting organized is the first step to killing the debt burden that looms over everything you do. Get a pencil and a piece of paper and make a list of all your creditors. Make sure you get all of them, everything from your mortgage or rent, to car loans, credit cards, back taxes, medical bills, and student loans. Then write down the outstanding balance for each account, along with the minimum payment and the amount of interest being paid each month. Now add up each column and write the total at the bottom. This is where all your money is going, and if you’re like a good majority of Americans it probably isn’t a pretty site.

Now you can start prioritizing which debts to pay off first. There will be some that require immediate attention and some that can be set aside with only minimum payments being sent. Immediate needs include mortgage or rent payments, necessary utilities, car loans and insurance, and any taxes or liens that may be posted against you or your property. Other debts such as credit cards or student loans can be put on the back burner. In fact a student loan can be put on hardship deferral. This means you won’t have to make any payments for 6 months to a year which gives you the opportunity to get caught up on your more important debts.

The second thing listing out your debts will do is allow you to see if all those payments fit into your monthly budget. If you can squeeze enough out of each month’s budget to make all those payments and if you can stick to that budget then you can start the process of paying them down. If you can throw a little extra at one debt in particular each month you can speed up the process. From a purely emotional stand point paying off the smallest debt first and working your way up may work best. Once you see progress it becomes much easier to stick with a plan.

If your debt is more then your budget can handle then it might be time to start looking at some sort of debt consolidation agency to help you build a plan that works for you. These companies will negotiate with your creditors to obtain better interest and payment terms on your current debt. Be sure to do complete background checks on these debt reduction companies and look for testimonials from satisfied customers. Be careful not to waste your hard earned money on something that sounds too good to be true. It probably took quite a bit of time for you to get into debt; it will take time and patience to get out of it as well.



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