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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: RetiredNow who wrote (58503)	3/13/2002 6:42:14 PM
From: Stock Farmer	Read Replies (1) \| Respond to of 77400

Simple. Earnings 660 M$ - D&A (a negative number, which makes it an addition) 476 - capex (a positive number, which makes it a subtraction) 190 = 946 M$ FCF. Double negatives. Yeuch. And note that I am using the earnings sheet definition of "revenue - costs" (= Earnings). According to GAAP that is, which the finance world should also recognize. I am excluding tax benefits while including dilution? Not really. How about show me where I'm including dilution in a number that has zero to do with "per share" computation and then get back to me on that? If employees exercise 40 million options and then the company buys back 40 million shares there's zero dilution, tax & cash flow benefit and cash cost. None of which properly appear in a Free Cash Flow computation. Although impact to cash flow was 6 M$ in taxes, 213 M$ in issuance and -251 M$ in buyback. Plus miscellaneous fees of -6 M$ for a total of -44 M$ or 1% of revenues. For negligible dilution. Doesn't belong in free cash flow or valuation discussion. Belongs in equity financing discussion. Later on if you'd like we can do a detailed treatment of dilution. But I think if you go into the statement of comprehensive earnings you will see that the SEC forces the company to lay it out all nice and proper, with the tax benefit from issuing shares showing up under the "money from buying and selling slices" column. Which is a different column from "money from doing business" column. John

To: RetiredNow who wrote (58503)	3/14/2002 1:06:55 AM
From: hueyone	Read Replies (1) \| Respond to of 77400

Ok Mindmeld, I am tossing out a boquet. I could be wrong. I seem to be one of the few SI investors around that buys in to JS logic. Nevertheless, I am long Cisco---at least with half the shares I used to have. Your discussions are useful for me in trying to decide when to get off my but to buy the other shares back. What about you, have you changed your target point? I think the wily Uncle Frank got your shares instead of you last time it hit your target at 14. <ggg> Best, Huey