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To: L. Adam Latham who wrote (92158)	11/11/1999 3:43:00 PM
From: Brian Malloy	Respond to of 186894

Someone else will have to answer that question but we have seen Mr. Sanders cook the book with regards to his stock options in the past. Hopefully his shareholders will follow the lead of CA shareholders and sue him next time.

To: L. Adam Latham who wrote (92158)	11/11/1999 4:50:00 PM
From: Saturn V	Read Replies (1) \| Respond to of 186894

REf- <Sanders indicated AMD may break even in Q4. I have a question for the accountants out there. In Q3, AMD had a $110M loss, but didn't take a benefit for income taxes. My limited understanding is that a business can use the tax benefit in future quarters until it is used up. Is it possible that AMD purposely didn't take the benefit in Q3, so that it could cook the Q4 books by using the benefit then? Or am I just misunderstanding the accounting they're using? > The IRS and state taxes are calculated on an annual basis. So the quarterly finnegling does not have a material impact on the taxes owed. However on an annual basis the scenario you painted can happen, where by revenue/profit can be pushed from one year to the next [ by delaying shipments by a few days or weeks ] to get the best tax treatment. Write offs can also be timed for optimum taxes ,but the accounting rules are more stringent. However the above manipulation scenario's are frequently practiced on a quarterly basis to control or manipulate the market expectation, and thus the stock value. For example AMD could have overstated the losses in Q2 99 [ Get all the bad news out ], and thus done better than expected in Q3/Q4. Other growth companies may try to fudge the quarters to show a more steady and even growth than reality, and thus have the stock perceived to be less risky. AMD does have significant accumulated losses for several years. So it will not owe taxes for a while until most of the accumulated losses are written off. The accumulated losses also make a company a good takeover candidate, because the acquiring company can write off its profits with the acquired companies accumulated losses, and reduce its tax liability. Hope that this helps.