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To: Petz who wrote (20899)	11/28/2000 7:37:12 PM
From: Gopher Broke	Read Replies (2) \| Respond to of 275872

Intel cuts P4 pricing on Dec 10 theregister.co.uk Intel plans price cuts across its range in two weeks' time. Celeron, Pentium III and P4 parts are all affected, according to a posting on a hitherto secure Intel website. Details of pricing specifics remain to be seen, but a drop on the P4 less than three weeks after its launch smacks of either a cockup or panic - we wouldn't like to speculate which.

To: Petz who wrote (20899)	11/28/2000 9:03:34 PM
From: jeff_boyd___	Read Replies (1) \| Respond to of 275872

"Hi Tech Tax Rate - Less Than 35%" John you recognized something that I knew occurred, but hadn't realized the size of the benefit that world-wide high tech companies receive. Intel is shifting profits overseas to low tax jurisdictions. In their last 10K, these earnings were subject to an effective tax rate of less than 10% The fact that these earnings are subject to low tax rate isn't surprising. Many Asian countries have very low tax rates and other than the US who wouldn't be happy to grant all sorts of concessions in order to get a new facility in their country? I was surprised at how much income Intel is shifting. In the last fiscal year about 30 to 40% of their earnings (not sales) came from overseas. The price that they transfer IP and products is just a huge issue for them. When they build a new Fab in Israel, the profit from that Fab isn't as large as you might expect because they have to pay royalties to the Intel subsidiary that has generated all the valuable IP. If it is an assembly operation in Malaysia, how much value do you attribute to the work that takes place there? It is a constant concern for tax people as they want to shift as much profit to low tax jurisdictions as possible without creating problems with the IRS. The first quarter of Intel's results this year included a $.09 reversal of reserves to income to cover the potential cost of IRS assessments and penalties. It winds up becoming so convoluted that you have to have access to the books to assess the potential exposure that exists. Thanks for asking the question. It was interesting to look at their tax footnote. Transfer pricing issues are tough and now I understand why Compaq and other high tech companies are always in court over them. I also thought of one other reason for a lower tax rate than 35% In addition to the R&D credit, they are huge beneficiaries of the benefit received from Foreign Sales Corporations. I can't believe they don't break these out in their tax footnote where they reconcile their tax rate, but it is just another example of how difficult it is to analyze a companies tax provision. Regards, Jeff