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To: John Harton who wrote (6480)	8/4/1999 1:44:00 PM
From: John Harton	Read Replies (1) \| Respond to of 11051

FYI Crash?? Bookmarked this page and have been checking in periodically just for fun mostly. This is the first time I've seen their -10 alert signal. Ya never know. wwfn.com Still placed limit orders for MSQHS (MSFT Aug 95 C) and (ZMFAQ Jan01 Leaps) Happy crashing -John

To: John Harton who wrote (6480)	8/5/1999 12:13:00 AM
From: Berney	Respond to of 11051

JH, Re: Earnings Just a quick answer to your question. Earnings is an income statement item and dividends are a balance sheet item. Earnings from the income statement flow into the balance sheet category of "retained earnings" and dividends reduce this account. The bottom line is that dividends have no affect on reported earnings. As an accountant, I am becoming particularly disillusioned with the earnings game. Let's look at a portion of PG's press release: For the April-June quarter, the company reported net earnings of $414 million or $0.29 per share, including the $385 million after-tax charge related to Organization 2005. Core net earnings were $799 million for the quarter, an increase of 16 percent over the same quarter last year. Core basic net earnings per share were $0.58, a 16 percent increase over the prior year. Sales for April-June increased two percent on flat unit volume. Unit volume was up one percent excluding the effect of acquisitions and divestitures. Currency translation effects reduced sales by one percent on the quarter. "We are pleased with our continued strong earnings performance despite economic difficulties in key emerging markets and the impact of currencies around the world," said P&G President and Chief Executive Durk I. Jager. "We now have our new organization structure in place, and we anticipate significant benefits over the coming fiscal year and beyond. Organization 2005 will result in increased innovation, speed to market, and an accelerated rate of sales and earnings growth as the organization becomes more fully aligned behind the global opportunities that are before us." According to the FASB (financial accounting standards board), there is only one category of income or loss that can be reported below the line; that is, not reflected in earnings per share. According to a relevant opinion, to be labeled as an "extraordinary event" the "underlying event or transaction should possess a high degree of abnormality and be of a type clearly unrelated to, or only incidently related to, the ordinary and typical activities of the entity." In fact, "extraordinary events" are the only category that I'm aware of that can be reported on an after-tax or net-tax basis. Excuse me, but how is PG's Organization 2005 anything other than an ordinary business expense. IMHO PG has bruised the peach on this one. Where the big-time game is being played is in a category referred to as "non-recurring." This category reflects loss or gain not deemed extraordinary in nature, yet can be given an "exceptional" tag. Use of the term "nonrecurring" has no official standing under GAAP, but creates the the desired impression. This category is to be reflected on a pre-tax basis. These "non-recurring" charges, which seem to be an annual event, are making any reliance on the PE ratio absolutely meaningless. For the record, I have and have never had any position in PG. I use it only as an example of the Game. PBTB