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Technology Stocks : The New QLogic (ANCR) -- Ignore unavailable to you. Want to Upgrade?

To: srvhap who wrote (27506)	7/17/2000 5:32:21 PM
From: Nine_USA	Read Replies (2) \| Respond to of 29386

Page 76 of the QLGC proforma balance sheet as of April 2, 2000 shows a line 'Retained Earnings' (3rd from bottom). The column, Historical Ancor March 31, 2000, shows a negative $52,998k. To the right of this number is $21,916k and this number is footnoted as 'b'. Page 80 explains that the merger will result in a positive cash flow item of $21,900,000 to QLGC by virtue of Ancor's net operating loss carryforwards. The cash flow is the result of QLGC taxable income of $52,998,000 being shielded from income taxation. The $21.9m saved in taxes is a windfall. While good analysts will value QLGC earnings as though fully taxed, nevertheless, the $21,900,000 savings are real and will be spent bt QLGC to accelerate the company's ramp.