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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Richard Nehrboss who wrote (67655)	9/14/1999 11:18:00 AM
From: Michael Bakunin	Read Replies (1) \| Respond to of 132070

Hey, lookit! I'd been sticking to the SEC reports, and missed that. Indeed, that links to exactly the same 'inoculation' method I like; I never said those Microsoft accountants weren't sharp. <g> It is a comfort that my rough number was almost the same (cf pretax earnings; -$1.5B vs my -$1.6B). I reverse out a second $1.6, though, for the current, legal tax shield that makes no sense after you account for options expense by inoculation. Right now, the company gets a tax deduction on exercise equal to the difference between market and strike price. The hypothetical method accounts for the expense, with concomitant deduction, so I reversed out the current deduction. It's a legal tax break I'd expect management of any company I owned to take, but it doesn't make economic sense. -mb