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To: Windsock who wrote (141127)8/9/2001 4:29:15 AM
From: pgerassi  Respond to of 186894
 
Dear Windsock:

There is no definition for what goes into Pro Forma costs. Each company has its own and they are not consistent between quarters. This is found by Intel's constant use of the phrase "Past earnings are restated to reflect current ..." (meaning we changed our minds about what goes where) each and every quarter they post Pro Forma earnings. GAAP is the same for all companies for the period. Since acquisition costs are included in the costs for GAAP earnings the definition can be vague and yet still not affect the bottom line. With Pro Forma earnings this vagueness can be a problem. Does Stock issued to buy a company called acquisition costs or stock dilution? Are ST loans to buy a company (lack of ready cash) included in acquisition costs or ST gains and losses? Are payoffs of golden parachutes part of acquisition costs? Are assumptions of debt acquisition costs or do they just show up on the balance sheet? Does it include acquired company employee's stock options? Do the integration costs and of course the party costs welcoming the new employees into the fold included? The list is endless and it is different for each acquisition and can change on a case by case basis (decided by the accountants, IRS, management, lawyers, etc.).

You might define it one way and Intel another (most likely different). To make or beat a Pro Forma number, the acquisition costs can be broadly construed and still be legal. As always, the devils in the details and he is not talking.

As to the "Pea" crack, you just show your immaturity. Grow up!

Pete



To: Windsock who wrote (141127)8/9/2001 6:31:38 PM
From: brushwud  Respond to of 186894
 
Acquisition costs, including goodwill, are determined by the tax code.

The rate at which Intel writes off goodwill is not determined by the tax code.

According to their SEC filings, they amortize goodwill over at most six years of useful life, but for tax purposes they have to do it over a lot more years.

Intel investors don't focus on the bottom line anyway. It's the third line from the bottom that really counts, right?


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