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Technology Stocks : Lucent Technologies (LU) -- Ignore unavailable to you. Want to Upgrade?

To: Kenneth E. Phillipps who wrote (14743)	5/12/2000 10:36:00 PM
From: SyncMan	Respond to of 21876

I was surprised to learn that Cisco computes its operations earnings without treating payroll taxes on exercised options as an expense. Payroll taxes, such as FICA, are very real cash expenses and should be treated as such. Otherwise, earnings reports are distorted to appear larger than they really are. I'm not at all sure, but perhaps it was because they didn't want to include companies earnings because of employee's purchasing stock as a "revenue". If you aren't going to count the "revenue" generated, it seems fair not to generate the "expense", doesn't it? I think it was just a case of wanting to display to Wall Street the operating income. Are you saying that this is not how the rest of the industry does it?