Lucent Technologies Research Report
Prepared by: Ronald R. Redfield CPA, PFS
January 2, 2001

Lucent Technologies Inc. designs, develops and manufactures communications systems, software and products. Lucent is engaged in the sale of public and private communications systems, supplying systems and software to most of the world’s largest communications network operators and service providers. Lucent is also engaged in the sale of business communications systems and in the sale of microelectronic components for communications applications to manufacturers of communications systems and computers. Lucent Technologies Inc. was formed from the systems and technology units that were formerly a part of AT&T Corp., including the research and development capabilities of Bell Laboratories. Lucent’s research and development activities are conducted through Bell Laboratories, an industrial research and development organizations

Price :                                        13 5/16
Dividend : .                                 09
Dividend Rate : .                         10%
5 Year Price Target :                    $43.

Opinion : Long Term Strong Buy for the Risk Tolerant Investor (Please read disclaimer at end of report).
Shares Outstanding:                            3325.9
Market Capitalization:                           44.268 billion
estimated 5 year growth rate :              20 %
Symbol / Exchange :                             LU/NYSE

Introduction :

Lucent was priced at 84 1/4 during December of 1999. Lucent’s price is currently 13 5/16. This is a percentage price reduction off of its high of 84 %. Many investors have been hurt by Lucent’s share price. Keep in mind; this report has been issued on January 2, 2001. While we understand the pain and suffering of long term Lucent shareholders, this report has been written in a “looking forward fashion”. For many years we wanted Lucent to be in our model portfolio. We consider Lucent to be neighbors of ours ( Cranford, NJ is a few towns away from Lucent’s Murray Hill World Headquarters). Until recently, I could not accept the Lucent valuation parameters until the recent meltdown. We were continually concerned with Lucent’s accounting practices, management and failures to develop and institute leading technologies. Lucent admits to arriving way late to the fiber optics networking party. It failed to capitalize on DWDM (Dense Wave Division Multiplexing) using OC-192 technology. This technology has allowed companies such as Ciena Corporation (CIEN), Nortel (NT) and Tellabs (TLAB) flourish. Lucent claims to have conquered the OC-192 problem and is also claiming to be on the forefront of the next great optics technology called OC-768. Lucent is also a leader of wireless technologies.

These are notes and observations of Lucent’s recently filed form 10-K

1. Reliance on Major Customers

” A limited number of large customers provide a substantial portion of
Lucent’s revenues. These customers include Verizon, AT&T and certain incumbent
and competitive local exchange carriers. Revenues from Verizon accounted for
approximately 13% of consolidated revenues in fiscal year 2000, principally in
the SPN segment. Revenues from AT&T accounted for approximately 10%, 14% and 15%
of consolidated revenues in fiscal years 2000, 1999 and 1998, respectively. The
spending patterns of any of these customers can vary significantly during the
year. Elimination or change in the spending patterns of, or a significant
reduction in orders from, any one of these customers could negatively affect
Lucent’s operating results. Lucent’s fiscal year 2000 results were negatively
affected by the decline in sales to one large U.S. customer and one large
non-U.S. customer. The communications industry has recently experienced a
consolidation of both U.S. and non-U.S. companies. As a result, Lucent’s
operating results could become more dependent on a smaller number of large
carriers. Lucent continually endeavors to diversify its customer base by adding
new and different types of customers. Lucent, however, is often required to
provide or arrange for long-term financing for customers as a condition to
obtain or bid on infrastructure contracts. Thus, our ability to develop certain
customer relationships may be dependent upon our ability to raise capital and
extend credit.”

The following text is from Lucent’s 1999 Form 10-K

“The contribution of AT&T to Lucent’s total revenues and percentage of total
revenues for the three years ended September 30, 1999, 1998 and 1997 were $4,587
million (12%), $3,841 million (12.1%), and$3,789 million (13.7%), respectively. In addition, sales to seven service
providers including AT&T, some of which may vary from year to year, constituted
approximately 29.7% and 34.4% of total revenues in the twelve months ended
September 30, 1999 and 1998, respectively.”

Here is what comes to mind when I read the two statements.

A. Verizon is now a significant customer (13 %). This is a customer that needs to be tracked. Verizon is mostly a SPN (Service Provider Networks) customer.

B. AT&T is now a 10 % customer ($3.381 billion) during 1999 AT&T was a 14 % customer ($ 4.286 billion). F2000 mentions that AT&T was a 15 % customer in 1998 yet last years 10-K shows 1998 as a 12.1 % customer. I will investigate the difference. I am thinking that the difference was due to a spin-off of some type.

C. It appears as though Lucent is becoming less reliant on AT&T, and developing significant customers from other carriers. Generally, it is a positive sign when former significant customers become less important. Again, my current goal is to monitor the capital spending habits, debt grades and general health of AT&T, Verizon and the rest of the communications industry.

2. Customer Commitments

From F2000 10 -K

“As of September 30, 2000, Lucent had made commitments or entered into an
agreement to extend credit to customers up to an aggregate of approximately $6.7
billion. As of September 30, 2000, approximately $1.3 billion had been advanced
and was outstanding. In addition, as of September 30, 2000, Lucent had made
commitments or entered into agreements to guarantee debt of customers up to an
aggregate of approximately $1.4 billion of which approximately $770 million was

From F1999 10 – K

“As of September 30, 1999, Lucent had made commitments or entered into an
agreement to extend credit to customers up to an aggregate of approximately
$7,100 million. As of September 30, 1999, approximately $1,600 million had been
advanced and was outstanding. In addition, as of September 30, 1999, Lucent had
made commitments or entered into agreements to guarantee debt of customers up to
an aggregate of approximately $420 million of which approximately $310 million
was outstanding.”

First glance, things look okay here. Just need to monitor customer commitments. Initially, this appears to make sense for the increased allowance that has been in the news.

3. Properties for manufacturing and warehouses have been reduced in F2000 from F1999.

4. Some financial observations:

A. Total Equity increased since 1998 by 18,212 billion
Total Debt increased since 1998 by 3.698 billion

This is actually quite positive.

B. Debt / Equity (looks positive, lowest level in 3 years)

2000*******25 %
1999*******42 %
1998*******35 %

C. Return on Equity (big drop…..warning sign, yet, just a warning sign, remember this company is priced for negativity)


D. Accounts Receivable as % of Revenues (very acceptable.)


E. Cash decreased 219 million
Accounts Receivable increased 759 million
Inventory increased 1.437 billion
Revenues increased 3.667 billion

F. Current Ratio (this is okay, we will explore Flow ratio, Cash King and Price to Growth Flow later in this report)


G. Quick Ratio (see Current ratio above)


H. Accounts Receivable increased YOY 8.6 %
Inventory Increased YOY 33.9 % (warning sign, increase is significant)
Revenues increased YOY 11.0 %

I. Research and Development is decreasing as % of revenues. Now 11.90%. (possible warning sign)

J. Gross Margin % decreasing to 42.2% in F2000, 49.0% in F1999, 46.9% F1998 (possible warning sign)

5. Worthwhile to watch in Q1 2001.

“These actions will allow Lucent to concentrate its investments, resources
and management attention on optical, data and wireless solutions, along with the
network design, consulting and integration services to support them. Lucent
expects to take a business restructuring charge associated with the redesign of
its business in the quarter ending March 31, 2001. Lucent expects to give
details of the charge in late January 2001. A review of our internal processes
will continue throughout 2001 and may result in additional restructuring and
associated charges (see KEY BUSINESS CHALLENGES).”

6. Revenue Breakdown


Core Networking Systems………………………………. 56%
Wireless Products…………………………………….       18%
Microelectronics……………………………………..         11%
NetCare Professional Services…………………………. 4%
Other……………………………………………….               11%

7. From 10-K re Credit Downgrade

“On December 21, 2000, Moody’s Investors Service lowered Lucent’s credit
rating on senior unsecured long-term debt from A2 to A3 and on commercial paper
from Prime-1 to Prime-2; the A3 rating remains on review for possible further
downgrade, and Moody’s concluded the review of the commercial paper rating. Also
on December 21, 2000, Standard & Poor’s lowered Lucent’s credit rating on senior
unsecured long-term debt from A to BBB+ and the commercial paper rating from A-1
to A-2, both of which remain on CreditWatch with the possibility of further
downgrades. Lucent believes that it will have sufficient capital resources to
fulfill its own operational and capital needs, as well as to extend credit to
customers when appropriate, although there can be no assurance that this will

This is not a terrible concern, yet debt levels and credit ratings are important to monitor. We watch the corporate debt of Lucent on a daily basis.

8. From 10-K

Revenue Breakdown
“Revenues in 2000 from the SPN segment increased by 6.8%, or $1,676 million,
compared with 1999, and increased 23.4%, or $4,717 million, for 1999 compared
with 1998. The 2000 increases were driven by sales of service provider Internet
infrastructure, wireless systems and professional services, offset in part by a
decline in optical networking products, primarily due to lower revenues in the
fiscal fourth quarter and a decline in switching revenues. Lower than expected
revenues in optical networking, due primarily to being late to market with the
OC-192 product, which affected the entire product cycle, from engineering and
manufacturing to deployment and launch, had a negative impact on the fiscal
year’s revenue growth. In addition, lower revenues from switching products
primarily due to the shift in customer spending away from circuit switching,
pricing pressures and the impact of a substantial reduction in a major long-term
foreign project also negatively”

Very important to watch the optical networking segment. OC-192, MEMS, OC-768 and all Optical switches (O-O-O) are going to be key indicators for the future. Remember, Lucent in their recent conference call discussed that they plan on delivering or exceeding industry comparable growth rates in the future.

Component shortages

“Lucent expects that product transition associated with a decline in circuit
switching revenue and the substantial reduction of revenues from AT&T and a
major long-term foreign project will not be fully offset immediately by the
ramp-up of newer products. In addition, component shortages have led to a longer
than expected full-volume ramp-up in optical networking.”

Financial Discussion

>>Total liabilities increased $1,184 million, or 5.5%, from September 30,
1999. This increase was due primarily to higher commercial paper balances.

Working capital, defined as current assets less current liabilities,
increased $523 million from September 30, 1999, primarily resulting from an
increase in receivables, inventories and contracts in process, partially offset
by the increase in short-term debt.

Debt to total capital decreased 9.6 basis points in 2000 compared with
1999. This decrease was related to the 2000 increase in additional paid-in
capital primarily associated with the issuance of common stock for business
acquisitions made during the year and, to a lesser extent, the exercise of stock
options and sales of stock through the employee stock purchase plan.

For the year ended September 30, 2000, Lucent’s inventory turnover ratio
decreased to 4.1x compared with 4.4x for the year ended September 30, 1999. The
decrease is due to higher inventory in fiscal 2000. Inventory turnover ratio is
calculated by dividing cost of sales for the three months ended September 30 by
the fiscal fourth quarter average ending inventory balance, using a two-point

Average days outstanding — receivables were up 13 days to 102 days in 2000
compared with 1999 reflecting the growth in Lucent’s sales outside the United
States, which typically carry longer payment terms and growth in very
competitive emerging markets that currently require longer payment terms.
Average days outstanding is calculated by dividing the fiscal fourth quarter
average ending receivables balance, using a two-point average, by total revenues
for the three months ended September 30.<<

Purchase of Chromatis – an Optical Transport Company
Chromatis Networks

On June 28, 2000, Lucent completed the purchase of Chromatis. Chromatis was
involved in the development of next-generation optical transport solutions that
provide telecommunications carriers with improvements in the cost, efficiency,
scale and management of multiservice metropolitan networks. The allocation to
IPRD of $428 million represented its estimated fair value using the methodology
described above. The $428 million was allocated to the first generation of its
Metropolis product, which will integrate data, voice and video services on
metropolitan networks and combine this traffic onto a wave division multiplexing
(“WDM”) system.

Revenues attributable to the Metropolis product were estimated to be $375
million in 2001 and $1 billion in 2002. Revenue was expected to peak in 2005 and
decline thereafter through the end of the product’s life as new product
technologies were expected to be introduced by Lucent. Revenue growth was
expected to decrease from 196% in 2002 to 10% in 2004 and be negative for the
remainder of the projection period. At the acquisition date, costs to complete
the research and development efforts related to the product were expected to be
$7.8 million.

A risk-adjusted discount rate of 25% was used to discount projected cash

This is an interesting segment as we see how much Lucent paid for an Optical Switching Company. This is a link for Lucent’s purchase of Chromatis. Keep in mind; this was an all-stock transaction.

” Lucent will acquire Chromatis, a privately held company, in a stock transaction for approximately 78 million shares of Lucent common stock, valued at about $4.5 billion, based on the closing price of $58.125 for Lucent stock on May 30, 2000. This excludes the approximate 7 percent stake in Chromatis that Lucent already owns through its Lucent Venture Partners venture capital subsidiary. Certain key employees of Chromatis also could receive an additional 2.5 million shares, (valued at approximately $145 million based on the closing price of Lucent stock on May 30, 2000), contingent upon Chromatis meeting certain performance-based goals. ”

This is what Charlie Burger, a staff writer from Gilder Technology Report, wrote on site (subscription required).

“If Lucent gets its act together on Chromatis, the acquisition could
provide some immediate income say over the next year or so. I say
could, because Lucent as we know does not execute well and in the
back of my mind I seem to remember some product delays already

However, that is not of greatest concern to me because even if Lucent
manages to execute on this one, I don’t think Chromatis was a wise
acquisition. The startup is too focused on conserving bandwidth in
the metro. Well, all metro startups are, so perhaps there really
wasn’t a company for Lucent to buy, but ONI and Sorrento have more
realistic ideas about the future of a lambda network in the metro and
I think will be better able to adapt when it happens. Also, they are
further ahead I believe in customers and product development.

Charlie 1/2/01″

Keep in mind that Lucent was trading at 58.125. At today’s price Chromatics would be valued for this transaction at 1.01 billion. The cost is the write-off of goodwill over the course of 7 years. This is a “non-cash” cost, so only earnings are affected.

Another example of an optical switching company is CIENA’s pending purchase of Cyras (
9. Revenues increased $3.196 B, yet, Gross Profit decreased by $ 738 M. That is a potential concern. Again, this is merely a potential warning sign, which needs to be monitored.

10. When looking at Consolidated Statement of Cash Flows, we see that capital expenditures are 2.7 billion for F2000. Hopefully this capital expenditure build out will be the seed of a future cash cow. F1999 capital expenditures were 2.0 billion. We are definitely witnessing a material build out. This build out equates to $0.81 per share. I witnessed this build out and future cash flow generation with the Cable companies in the mid 1990’s. This most certainly is an area to focus on in the future. We need to monitor the projected capital expenditures along with the free cash flow. This year Lucent had free cash flow of $(2.1 billion). This is the main reason that credit worthiness is crucial for Lucent. If they need to borrow for their infrastructure, preferential ratings would be a huge boost. The following is Lucent’s press release regarding the sale of its PowerSystems business to Tyco .

11. This is what Merrill Lynch mentioned on January 2, 2001.

” Always-on will boost 2.5G wireless adoption while 3G slips. We believe always-on will enable 2.5G systems to provide nearly all the benefits promised by 3G except speed. And we believe speed is not the key feature for wireless adoption. Wireless devices are considered always-on when they continuously connect to the network. The user does not have to remember to poll the system for emails or news updates. DoCoMo’s i-mode and the RIM BlackBerry have this key feature. Deutsche Telekom reports that WAP users are getting online less than once a week while i-mode users are viewing 300-400 web pages a month. 3G operators should have difficulty recovering their investments. The auction process has fallen apart following the $90 billion paid for European spectrum. Also, infrastructure costs could be higher than expected—estimates for the European 3G roll out run from $90-160 billion. And most of the user benefits are available with 2.5G.”

I am curious to see how Lucent would react to a 2.5G wireless environment. I am currently looking for an answer to that question. According to a discussion I had with Lucent Investor relations, Lucent claims to have a position in all currently known wireless networks.

12. Terrabeam Corporation From 10 – K

“On April 9, 2000, Lucent and TeraBeam Corporation entered into an agreement
to develop TeraBeam’s fiberless optical networking system that provides
high-speed data networking between local and wide area networks. Under the
agreement, Lucent paid cash and contributed research and development assets,
intellectual property, and free-space optical products, valued in the aggregate
at $450. Lucent owns 30 percent of the venture that will develop the fiberless
optical networking system, which is accounted for under the equity method of
accounting. Lucent will also be a preferred supplier of optical components,
networking equipment and professional services to TeraBeam. In addition, under
certain conditions, Lucent will have the right to purchase TeraBeam’s equity
interest in the venture. A total of $189 was allocated to goodwill and other
acquired intangibles to be amortized over five years.”

TerraBeam Corporation will be interesting to watch. This is what Charlie Burger, a staff writer from Gilder Technology Report , wrote on site (subscription required).

” TeraBeam technology is considered part of the “last mile” sector of
the Telecosm and hence is Bret Swanson’s company on the Global
Networks forum. Apparently, Sorrento, a metro WDM-system startup with
an all-optical switch in the works, expects to supply TerraBeam with
a quarter of a billion dollars worth of WDM equipment over the next
several years. If true, then TeraBeam likely has in place an
ambitious road map.

I think TeraBeam success will depend on how rapidly fiber to the curb
is deployed in cities, and perhaps also on satellite connections. I
don’t think rural connections are a viable option for TeraBeam —
they need a dense network to be economically viable.

Charlie 1/2/01″

13. Various credit ratios. We are using this to determine if Wall Street discussions and rumors of high debt load are warranted. Keep in mind, the debt/equity ratio mentioned in 4(B) above is not concerning on the face.

A. Equity Ratio at Market = Common equity at market value / Tangible assets – accrued payables

Using share price of $ 13.50.
shares outstanding of 3325.9

market capitalization = $ 44,899,650,000
Tangible assets = $ 38,847,000
Accrued payables = $10,877,000

Ratio = 44,899,650,000 / (38,847,000,000 – 10,877,000,000)

Equity Ratio at Market = 1.61

Using the same market capitalization, the Equity at Market ratio in F1999 was 1.72. This does not on the face indicate serious deterioration. Again, credit ratings and bond prices of lucent needs to be monitored. The Flow ratio will also be discussed later.

B. Ratio of Earnings to fixed charges is 5.5 in F2000; same ratio was 8.8 in F1999 and 5.8 in F1998. Doesn’t seem alarming, yet, we need to monitor.

C. From 10-K for future reference


2000 1999
————- ————-
Commercial paper…………………………………… $2,475 $ 667
Long-term debt…………………………………….. 765 41
Secured borrowings and other………………………… 243 997
—— ——
Total debt maturing within one year………………….. $3,483 $1,705
====== ======
Weighted Average Interest Rates
Commercial paper…………………………………. 6.3% 5.0%
Long-term debt, secured borrowings and other……..7.4% 9.6%

” Lucent had revolving credit facilities at September 30, 2000 aggregating
$4,731 (a portion of which is used to support Lucent’s commercial paper
program), $4,000 with domestic lenders and $731 with foreign lenders. The total
credit facilities available at September 30, 2000 with domestic and foreign
lenders were $4,000 and $455, respectively.”

This is just an area where I have the greatest concerns. It is being placed here as a reminder to continually monitor operational liquidity.

12. Some valuation ratios and observations

A. Price / Sales ratio is 1.34. This is historically low for Lucent. Granted this is due to Lucent’s current woes, but, a price to sales ratio of 1.34 for a company like Lucent is arguably quite low. Lucent traded at 6.74 times sales at one point during 1999 and 7.42 during 2000. Cisco trades (even at $33 per share) at a Price to Revenue multiple of 12.22. Cisco at one point traded at 30.37 times revenues. CIENA Corporation trades at 13X projected F2001 revenues. If Lucent were to trade at a price of 5X revenues, the price per share would be $ 40.40 (this is not a price target, merely an observation).

B. We use a term called Growth Flow Ratio(GFR). The formula is (Price / eps + projected 12 months forward Research and Development). We like to see companies with GFR of less than 12. Lucent’s GFR is 10.23 based on current price of $13.50. This is based on projected eps in F2001 of $0.10 per share. If Lucent earnings per share stabilizes and recovers to $0.65 in F2002, then the GFR will in turn go much lower (again , at a current price of $13.50). CIENA Corporation (65) has a GFR of 47. This indicates continued potential overvaluation with CIENA.

Research and Development is incredibly important to a company that operates in high technology. Lucent is in the industry of disruptive technologies. These companies are high tech and have the quick ability to explode or implode in price. These companies have what is called ” disruptive technologies”. Basically, that means that their technology can disrupt the other companies and potentially leave the other companies obsolete in the dust. The real problem is that the disruptive technology can come from a competitor, leaving your disruptive company holding a bag of obsolete technology. A great example is CIENA (CIEN) they are leaders in optical switching. CIENA has a high tech “electronic switch” for fiber optics. The trouble is that electronics and photonics together are theoretically inefficient, primarily because electronics cause a great amount of heat, are costly and of course have friction attached (unlike optics). Well, the benefit of CIENA is that there is no such thing (yet) as an all-optical switch (o-o-o). This of course could change. That is why research and development costs are such a crucial element. We hope that Lucent will create disruptive technologies with their future all optical switches.

C. Lucent’s Interest Coverage Ratio is quite acceptable. This is important as Interest charges and debt loads have become a fear of analysts looking at Lucent. Interest Coverage Ratio measures the ability of a company to continue required operations while still servicing its interest costs.

Interest Coverage Ratio = (pretax income + interest expense)/ interest expense. Generally a conservative number is considered to be 6 or 16.67% inversed. Lucent’s interest coverage ratio is 43 or 2 %. This is considered a safe number. Again, this another reason to monitor Lucent debt pricing and grading closely.

D. Lucent’s future earnings are almost impossible to predict. The following are my notes from a Conference Call on

December 21, 2000.

I like what was said. Lucent was optimistic on the future. They most certainly recognized their weaknesses. Lucent appeared to be saying, ” Let’s put all BS behind us. Let’s put it all on the table and move forward.”

The following are some quick notes from the conference call.


1. Company sound and fixable.

2. Focus and execution being sorted out.

3. F2002 should show significant improvements.

4. Should start seeing results improving in 2nd half of coming fiscal year.

5. Emphasized that no growth in F2001, but, stated not down either.

6. Expect sequential improvement every quarter of 2001.

7. International markets strong.

8. Set aggressive growth targets. Grow at or above market rates. Keep sustainability.

9. 10-K should be issued “very shortly” “within days” “if not tomorrow, early next week”

10. Very clear that economy is slowing. Yet, companies still need and will be buying equipment.

11. Equipment, which was taken back, was from various orders and not just a single customer, the number of companies, which Lucent took back, inventory was in the mid single digits. Some of this equipment has already been resold, some but not large amount will become obsolete. There is an emphasis on strict adherence to FASB and accounting policies. LU does not want any more revenue recognition issues.


As you can see, earnings will be impossible to project until some type of relevant guidance is issued from Lucent management. We have used the following projections in helping us determine the “intrinsic future value” of Lucent.


Based on this earnings scenario, we have assigned a target price of $43.00 at December 31, 2005 . If Lucent were to achieve this price, an investor at today’s level of $13.50 would have non-annualized price appreciation in excess of 300 %. This would produce annualized compounded returns in excess of 50 % (not including small dividend).

It is important to realize what Lucent’s historical earnings per share were . The following is a grid of past earnings.


Perhaps one can see from the above grid, that the possibility of earnings in excess of $1.00 per share is within reach for F2004. Again, this is something that needs to be monitored as more information is provided.

We feel that our 5-year target of $ 43.00 per share is within reach. We feel that most analysts will have much higher 5-year price targets. Most analysts are shying away from Lucent at the moment. Wall Street feels incredibly let down by Lucent, and Lucent will be required to prove themselves again, before they are welcomed by Wall Street analysts. We do not mind showing up early for this party.

E. Book Value is $ 7.87 per share. Lucent is trading at less than 2X book value at its current price of $13.50 per share. CIENA ($ 65) incidentally trades at 24X book Value; Cisco (33 5/16) trades at 9X book value.

F. The Motley Fool Flow ratio is 2.71. This is an improvement from F1999 of 2.99, yet The Motley Fool prefers to have the Flow ratio to be less than 1.25. This link explains the Flow Ratio

Conclusion: We have placed Lucent Technologies in our typical core portfolios. Lucent is a company that we hope is on the verge of a business turnaround. Lucent made critical mistakes in their technology executions and in their accounting reporting over the last few years. We believe that the new management team, led by Henry B. Schacht, is on the beginning stages of a corporate turnaround. Mr. Schacht and company is searching for a new Chairman and CEO. He does not appear to be one that will make a decision in haste. He seems to certainly see the importance of being upfront with Wall Street and investors. His apparent vision is to once again make Lucent Technologies a world technological leader as well as regain the respect of investors worldwide. Execution by management and technology is most certainly a concern for all Lucent investors. This is a legitimate concern for us and should be a concern for all Lucent investors. For many of the reasons cited in this report, Lucent should be considered a speculative long-term investment by any investor represented by Redfield, Blonsky & Co. LLC.


If you are a client of ours, and if you have questions regarding Lucent, please call our office. If you are not a client of Redfield, Blonsky & Co. LLC Investment Management Division and are reading this report, we urge you to do your own research. We will not be responsible for any person making an investment decision based on this report. This report is a “by-product” of our research. We are not responsible for the accuracy of this report. We are not responsible for errors that may occur in this report. Please do not rely on us to monitor or update this or any other report we may issue. In theory, we could come across some type of data or idea, which causes us to eliminate Lucent from our portfolios. This report is dated January 2, 2001; it is possible that by January 3, 2001 we could have eliminated our entire Lucent position without giving notice to any reader of this report. We manage portfolios for clients, and those clients are our greatest concern as it relates to investing. Certain clients of Redfield, Blonsky & Co LLC may not have Lucent Technologies in their portfolios. There could be various reasons for this. Examples of which could be, cash flow concerns, no funding available or identified as available and / or specific risk tolerance levels. Again, if you would like to discuss Lucent Technologies, please contact Ronald R. Redfield, CPA, PFS (partner in charge of investment management division).

Information herein is believed to be reliable, but its accuracy and completeness cannot be guaranteed. Opinions, estimates, and projections constitute our judgment and are subject to change without notice. This publication is provided to you for information purposes only and is not intended as an offer or solicitation. Redfield, Blonsky & Co. LLC and Ronald R Redfield, CPA, PFS, may hold a position or act as an advisor on any investments mentioned in a report or discussion.