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To: ELH1006 who wrote (3360)	5/9/2001 10:22:53 AM
From: LemurHouse	Read Replies (1) \| Respond to of 3661

Very difficult to see what is going on what with all the different sets of numbers. Management likes talk about their "pro-forma" numbers, but those days are over and its largely pointless to try to compare the present situation against pre-merger numbers. Things are even less clear when one tries to factor in R&D and goodwill, APB16, and SAB101 effects. Jay Dehana specifically asked about the big goodwill number and how that would be accounted for going forward ($10 million difference between proforma and GAAP numbers for the quarter). He received no satisfactory answer as far as I could tell. They have a real challenge trying to integrate the merger and mitigate the cross-over to SAB101 standards. STEAG was particularly egregious, as they have repeatedly said. But even so these numbers feel much too squishy. I respect Brad and trust his ability to take the company forward. But I feel that we as investors are being asked to reley perhaps too heavily on our faith in Brad and the direction of the company. It was the same thing last quarter. They need to clear this up mess soon. AD

To: ELH1006 who wrote (3360)	5/9/2001 8:44:29 PM
From: ELH1006	Read Replies (1) \| Respond to of 3661

I went back and reviewed my notes relative to the merger and seem to be out of balance by some $200 million plus relative to the estimated goodwill account. My original estimate was calculated as follows: Original Goodwill estimate in offering $396 mil Reduction due to fall in MTSN price from $35.48 to $10.44 based on 16.063486 mil shares issued to Steag and CFMT (402)mil Cash paid to Steag 1 mil Revised goodwill $5 mil Goodwill estimated in 1st quarter report$204 mil Difference $199 mil This large difference can generally only arise due to either a much larger cash burn by the acquired companies during the pre-merger time frame or a larger payment by MTSN than original reflected in the merger document. All I know is that the net working capital is much lower than what I was anticipating. Anyone out there know what has transpired? Eddie