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To: Q. who wrote (3283)	2/1/2001 11:58:58 PM
From: Ian@SI	Respond to of 3661

It seems to me that cashflow from operations will be unaffected by this change. Probably true in a steady state environment where either: 1. No new products are ever introduced; or, 2. $ Value of new products sold, and the customer acceptance period, remains absolutely constant each Q. Unfortunately, I think SAB 101 has substituted one set of issues for another without any immediate benefit to the investing community. Every time a wave of new products gets introduced, we're going to see volatility in the reported earnings; and deterioration in the the balance sheet. I fear that it may make things much more difficult when assessing a company's prospects. So when products are shipped for evaluation prior to final acceptance, we may or may not see payments prior to final acceptance. We'll never see revenues prior to F.A.; we may or may not see cash flow; and I don't know what will happen to inventory numbers but I fear they'll go up until F.A.; etc. With Cu, lowK, < 0.18µ feature sizes, and 300mm tools being evaluated, it's going to be very difficult to understand what's really happening with companies. Thus I, for one, will be happy to have the old as well as the new to help us through the transition. Ian

To: Q. who wrote (3283)	2/2/2001 8:50:26 AM
From: LemurHouse	Read Replies (2) \| Respond to of 3661

The STEAG AR issue has nothing to do with SAB 101. The report you posted seems to suggest that the analyst is including the $200 of STEAG accounts receivable in the coming year's revenue projections for the combined company. Money that was deferred not because of SAB 101, but because STEAGS accounting is in such disorder. If in fact this is the case, then that would be a source of concern given that the amount in question represents 1/3 of the total projected revenues for the year, and the necessary conclusion would be that actual new sales would be that much less. (Jiggered a bit because of SAB 101.) This is hard to believe, but it seems to be what Deahana is saying. Perhaps I am misinterpreting the point -- I'd be most happy to hear another explanation. With regard to the SAB 101 issue, I agree that it should not materially affect cash flow or the fundamentals of the business. At least not after the first quarter or two. However, it does make for some confusing comparisons (i.e., it seems that they are deferring cost of sales as well as revenue?) and it will temporarily affect such superficial measures such as PE and possibly (?) book to bill. Reasonable people will look past these numbers; but Mr. Market ain't always rational and I wouldn't be surprised to see a negative market reaction next quarter. I actually am in favor of SAB 101 as being positive for investors in the long term -- having been burned by a software company which grossly inflated its sales numbers through just the sort of shennanigans that SAB 101 is designed to prevent. But its an awkward change-over, and will undoubtedly cause some pain. If anyone can shed any light on the STEAG revenue's inclusion or non-inclusion in the projected sales numbers, please by all means do so! AD