Clown-Free Zone... sorry, no clowns allowed Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Clown-Free Zone... sorry, no clowns allowed

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Les H who wrote (207908)	12/4/2002 5:45:32 PM
From: reaper	Read Replies (5) of 436258

its perfectly obvious why they are doing this; standard IBM trash the balance sheet to make the P&L work ploy. they say in the press release that they are going to lower the return assumption from 9.5% to 8.0-8.5%. of course, lowering the return assumption lowers your income. but of course if you add money to the plan, then while you are lowering the return assumption, you are multiplying that return against a bigger plan, and thus walla your pension 'income' is not changed. quick math: IBM US plan assets right now are +/- $35 billion. 9.5% return times $35 billion is $3.325 billion in income. lower the return assumption to 8.5%, and whoops now suddenly we only have $2.975 billion in income from the plan, or $350mm missing earnings or about 12 cents a share after tax. BUT, add $3 billion to the plan, and then multiply the new 8.5% return times the new improved $38 billion asset level, and you have $3.230 billion in income from the pension, or essentially 'no change'. so what a beautiful world. IBM only has to spend $3 billion to have their EPS not change. unbelievable that the market lets these farkers get away with this carp. Cheers

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next