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To: UnBelievable who wrote (29980)	2/1/2002 9:29:55 AM
From: Terry Maloney	Respond to of 209892

UB, mike magner provides a link here: Message 16989265

To: UnBelievable who wrote (29980)	2/1/2002 9:40:58 AM
From: john722	Respond to of 209892

Unbelievable. Article Link: messages.yahoo.com NASDAQ 100 Companies Report Combined Losses of over $82 Billion to the SEC While Reporting Profits of $19 Billion to Shareholders © 2002 SmartStockInvestor.com, LLC For the first three quarters of 2001, the one hundred companies that make up the NASDAQ 100 reported $82.3 billion in combined losses to the Securities and Exchange Commission (SEC). For the same period, these companies reported $19.1 billion in combined profits to shareholders via headline, "pro forma" earnings reports-a difference of $101.4 billion or over $1 billion per company. Reports to the SEC (10Q's and 10K's) are regulated, must follow Generally Accepted Accounting Principles (GAAP), and are subject to audit. Headline, pro forma earnings are unaudited, and, in a poor economy, are varying more and more from GAAP as companies struggle to meet earnings projections. Outgoing SEC Chief Economist Lynn Turner says pro forma earnings are effectively "EBS" earnings-"Everything but the Bad Stuff." The five largest NASDAQ 100 companies (by market capitalization) had combined profits both on a GAAP and a pro forma basis. However, Microsoft (MSFT), Intel (INTC), Cisco Systems (CSCO), Oracle (ORCL), and Dell (DELL) reported combined real profits of $4.4 billion to the SEC, while reporting $13.4 billion profits to shareholders via pro forma earnings-$9.0 billion more. Thus, more than two-thirds of the headline pro forma profits resulted from net positive pro forma adjustments made to GAAP earnings. Companies losing money were not the only ones to make extensive use of pro forma adjustments. For example, Microsoft reported earnings to the SEC of $3.8 billion for the first three quarters of 2001, but headline, pro forma earnings reported to shareholders were $7.0 billion-right in line with estimates. Intel's reported pro forma profits ($2.6 billion) were over three times its profits reported to the SEC ($0.8 billion). Recently announced fourth quarter results continue this tradition. The headline EPS number was $0.15 per share thereby allowing Intel to "beat the street" estimate of $0.11 per share. It appears the GAAP EPS they will report to the SEC in a few weeks will be $0.07 per share. If Intel's report is a harbinger of things to come in the fourth quarter, pro forma earnings for the NASDAQ 100 will once again greatly exceed GAAP earnings. Cisco Systems reported losses to the SEC of $3.0 billion, but reported pro forma profits to shareholders of $0.7 billion which "beat the street" (exceeded First Call earnings estimates). The "items," i.e., true accounting expenses, that Cisco expunged each and every quarter, were exactly enough to allow its headline pro forma earnings to be inline with or slightly better than earnings projections. These quarterly positive adjustments varied considerably and ranged from about 40 cents a share to 2 cents a share, but each quarter, Cisco's pro forma EPS ended up within a penny or two of estimates (equal or over but never under). Is this really just a fortunate coincidence? Can anyone look at the chart below and not wonder about the purpose of Cisco's pro forma adjustments? Headline, pro forma earnings are used to calculate the earnings per share amounts (EPS) and price earnings ratios (PE) reported by popular services such as Thompson Financial / First Call and Yahoo Finance.