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To: Dave who wrote (47523)	1/30/2001 12:27:50 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 77400

Dave, However, one comment with respect to their cash flow. Are you just singling out AR and Inventories? In the post copied below, AR and Inventories were a drag on cash flow YoY. But that is not apparent in the bottom-line cash-flow number, due to growth from other sources. In terms of cash-flow growth, I would look more at the effects of non-operating items, which seem to be the major component of this incremental growth. I discussed that in the following post--note in particular how "tax benefits" grew year over year, as detailed toward the bottom of the post. I don't think anyone would argue that the desirable source of cash-flow growth is recurring operations. Message 14642739 To:The Phoenix who wrote (41361) From: Mucho Maas Monday, Oct 23, 2000 4:40 PM View Replies (2) \| Respond to of 47524 re: Inventory levels and receivables, Looks healthy to me. I'm not so sure. The cash flow statement shows: 2000 1999 Accounts receivable (1043) 45 Inventories (887) (443) -------------------------------------- Adding these together: A/R + Inv (1930) (398) So changes in the operating cycle, and the levels of AR and inventories, resulted in a deduction of (1.93)BB from cash flow in FY00, compared to (.398)BB in FY99. In particular, A/R has gone from a positive item to a billion+ negative item. Meanwhile, among contributions to cash flows, we have: Tax benefits from employee stock option plans 2000 1999 2,495 837 That is, an increase of 1.658BB, or an increase of almost threefold. So the operations-related items--namely inventories and receivables--have worsened, even as the main contributor to the cash flow increase is "tax benefits". Ideally, one would like to see cash flows improving due to operation-related items. All "free cash flows" are not created equally.