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

To: Nine_USA who wrote (27507)	7/17/2000 6:16:31 PM
From: Greg Hull	Respond to of 29386

Herb, Thanks for pointing out the tax savings noted in the proxy. Do you or anyone else know if the $21M can be realized immediately, or if it can only be applied to future Ancor profits? I seem to remember some speculation about this a number of weeks ago, but it does not make sense to me to tie the NOLs to Ancor products. I could believe the NOLs must be applied over a number of years. Anyone clarify this for us? Greg

To: Nine_USA who wrote (27507)	7/17/2000 6:34:18 PM
From: Logain Ablar	Read Replies (1) \| Respond to of 29386

Herb: On the acquisition conference call management indicated they had not factored in any GAAP benefit of realizing the ANCR NOL Carryforward. Any benefit, if realizable, had not been factored into the "dilutive" impact to earnings. The ANCR NOL is what is known as a Separate Return Loss Year NOL. Under certain situations when there is a change in ownership the SLRY NOL can be used but only by the legal entity which created the loss (there are other restrictions on products, etc. but they should not apply in this case). To make this short I'm sure the deal is structured to ensure full utilization but the NOL can only be used by profits generated by ANCR. It can not be used to immediately shelter QLGC profits. There are "ordering" rules in consolidation but I assume to the extent ANCR continues to generate losses those losses current period losses will be used to offset QLGC profits. Lets hope this is a mute point. Tim