Michael Amon

Contract talks update

Posted in Uncategorized by michaelamon on February 23, 2010

Newsday management on Tuesday turned over a significant amount of financial data to Teamsters economist Jim Kimball, who will pore over it in the next day or so to verify the company’s financial condition. Union officers said they couldn’t reveal exactly what was turned over.

A handful of union officials were allowed to view Newsday’s still confidential 4th quarter results, which will be made public on Thursday in Cablevision’s SEC filing. No word on what they will say.

Zack Dowdy told me the tone of Tuesday’s meetings was positive. George Tedeschi said it was a productive day.

I’ll try to keep everyone up to date over the next few days as it becomes clear what useful information, if any, Newsday turned over. I’ll close with some thoughts from a smart and trusted colleague who e-mailed me about Newsday’s financial condition this morning.

“While the operating profit/loss was the focus of the recent press release (ie, verifying the $7 million loss) and the “loss” has been used to justify wage cuts, I’d suggest drilling into and remaining focused on cash flow numbers, as they are what Cablevision highlights as among the most important in displaying a business unit’s health.
Take note of the definition of consolidated free cash flow from continuing operations in Cablevision’s third quarter press release (below).

“I believe for the first three quarters of 2009, Newsday had operating free cash flow of $10.7 million. That number is almost certain to increase markedly by year end.”

From the 3rd quarter press release.
“We define Consolidated Free Cash Flow from Continuing Operations, (“Free Cash Flow”), which is a non-GAAP financial measure, as net cash from operating activities (continuing operations) less capital expenditures (continuing operations), both of which are reported in our Consolidated Statement of Cash Flows. Net cash from operating
activities excludes net cash from operating activities of our discontinued operations. We believe the most comparable GAAP financial measure of our liquidity is net cash from operating activities. We believe that Free Cash Flow is useful as an indicator of our overall liquidity, as the amount of Free Cash Flow generated in any period is representative of cash that is available for debt repayment and other discretionary and non-discretionary cash uses. It is also one of several indicators of our ability to make investments and/or return capital to our shareholders. We also believe that Free Cash Flow is one of several benchmarks used by analysts and investors who follow our industry for comparison of our liquidity with other companies in our industry, although our measure of Free Cash Flow may not be directly comparable to similar measures reported by other companies.”

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