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To: Mike Buckley who wrote (43946)	6/27/2001 11:04:09 PM
From: hueyone	Respond to of 54805

More Free Cash Flow/Option stuff from Whitney Tilson: thestreet.com Excerpt: Even though the cost doesn't appear on the income statement, stock options are clearly a form of compensation, and there is a real cost associated with them. Let's say a company spent 100% of its free cash flow buying back shares, yet the share count remained constant. Isn't this just a compensation expense, and therefore in this scenario the company generated no free cash flow for shareholders? Even USA Today and Merrill Lynch are jumping on the bandwagon to question cash flow from options: There's just no accounting for tech earnings. usatoday.com The above article notes that Juniper, eBay, Lucent and Siebel Systems would have posted losses, rather than profits, had they subtracted expenses such as options, (Merrill Lynch accounting expert) Schieneman found. I think one big difference between now and five years ago when you discussed this issue at the Fool is that tax benefit from stock option exercise likely accounted for less that 5% of the average tech company's cash flow. In year 2000 it accounted for 50% of the average tech company's cash flow. Best, Huey

To: Mike Buckley who wrote (43946)	6/28/2001 2:08:35 AM
From: Bruce Brown	Respond to of 54805

Welcome back, Bruce. Where ya been? Oh, I'm around. What little free time I have had lately has been spent on the golf course attempting to master something one cannot master to one's satisfaction. I've been short on time as I was involved in a new production of La Traviata which took 6 weeks of my daily time for rehearsal before it finally opened in mid June. It's been a crowd hit (sold out performances) which is fortunate for management as I'm sure they welcome a money maker. Friday night is my last performance of the season before vacation begins. BB