Here we summarize our selection of Top 10 GAAP differences related to the statement of cash flows. These differences can significantly impair comparability between IFRS Standards and US GAAP preparers. Despite similar objectives, IAS 7 1 and ASC 230 2 have different requirements, such as the composition of cash, and the classification of interest, dividends and lease payments across cash flow categories. Putting The Squeeze On Phone Service 02.13.03 Local exchange carriers have fallen like dominoes, and more consolidation is coming.īellSouth Disconnects Core Business 01.23.03 Retail customers are hanging up, helped along by the telecom's growing DSL push.The statement of cash flows is a central component of a company’s financial statements and provides key information about its financial health and capacity to generate cash flows. But nobody wants to be first.įCC Ruling Pummels DSL Competitors 02.20.03 In the short term, the decision could lead to higher DSL prices, but in the long run, better networks.įCC Phone Decision Rings In The Old 02.20.03 It eases some rules, but not the ones that chief Michael Powell and the Baby Bells most wanted. You Go First 03.03.03 Free registration required Cell phone carriers are free to consolidate. Replacing customers lost to "churn" is one of the biggest costs for all wireless carriers. At last quarter's rates, Verizon Wireless is losing 25% of its subscribers a year, versus 31% for Cingular. Cingular added barely one-fifth as many customers-189,000-to bring its total to 22 million. Verizon Wireless, the market leader, continues to demonstrate the advantages of its huge size, adding 833,000 customers last quarter to bring the company's total to over 33 million. This week's round of quarterly reports also adds evidence of the growing split in the performance of the two biggest Bells, thanks largely to the differing fortunes of their wireless subsidiaries, Verizon's majority-owned But Verizon's ability to generate cash has been unusually strong, including free cash of $2.3 billion last quarter. Verizon's investment in non-wireless telecom fell to $1.3 billion, down over 60% from the $3.3 billion it spent in the first quarter of 2001. The current level of capital spending is consistent with "prudently investing in our growth drivers," Whitacre says.Ĭapital spending cuts remain an issue for the entire industry. The big question: Is the reduced rate of investment enough to sustain SBC's revenue, or is the company mortgaging its future? SBC calls earlier levels of capital spending an aberration. If it had continued investing at its 2002 rate, SBC would have shown negative free cash flow of $27 million. The company cut its spending on new plant and equipment in half compared to a year ago, investing $897 million last quarter. "We continue to tightly manage costs, reduce debt and further strengthen our balance sheet," saidīut SBC's free cash flow is entirely the result of a dramatic chop in capital expenditures. Free cash flow, or the cash left over after paying dividends and capital expenditures, was a healthy $841 million in the quarter. Before the effects of an accounting change the company reported $2.5 billion in profits this quarter after the effect of that change it managed an astounding $5 billion. SBC transferred 770,000 lines to wholesale last quarter in all, 11% of its 57 million phone lines are now resold by its competitors.ĭespite all that, SBC, like its peers, is managing to report healthy profits and generate billions annually to pay down debt loads. While the Bells still collect money on those lines, it is often 50% less than they otherwise would. Of the lines that stay in service, many are being rented by competitors at wholesale prices under the terms of the Federal Communications Commission's recent so-called "UNE-P" decision.
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