two years to maintenance levels. The following table
summarizes ourassumptions onrevenue growth,EBITDA/
sales, and reinvestment needs over the next 10 years.
For both revenue growth and improvement in EBITDA
margins,weassumedthatthelargerchangesoccurredinthe
earlieryears. Notethat thechangesindepreciation lagthe
changesincapitalspending—thecapitalspendingiscutfirst
and depreciation drops later. Finally, we assumed that the
firmwouldneedtosetaside3%oftherevenuechangeeach
year into working capital based on the industry averages.
With these forecasts, we estimated revenues, operating
income, and after-tax operating income each year for the
high-growth period in the following table (in millions of
dollars).To estimatetaxes,weconsideredthenetoperating
lossescarriedforwardinto 2001 of$2,075millionandadded
ontheadditionallossesthatweexpectedinthefirstfewyears
of the projection.