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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Enigma who wrote (6090)	5/14/2002 11:32:05 PM
From: John Pitera	Read Replies (1) \| Respond to of 33421

It's layed out in laborious detail in the 7 articles that I posted back to back, you can tell that I actually read them because I highlighted key aspects of the situation. Message 17075272 the short answer is that they are counted as expenses for IRS tax purposed but are not considered an expense for EPS calculations. It's great work from the top exec's perspective if you can get it. John

To: Enigma who wrote (6090)	5/20/2002 9:33:13 AM
From: John Pitera	Respond to of 33421

Hi Enigma, sorry for my slow responses, I was just getting to Tim Lamb's IBM post from over a week ago this morning. Let's look at your initial question again. I wonder how employee stock options are expensed? The mechanics I mean. The answer is that the expense incurred in granted Employee stock options have not been expensed by companies when they calculate their earnings for EPS reporting purposes. Companies reporting Earnings through the designer pro-forma pro-forma approach are certainly not looking to acknowledge any more costs. Even companies that are working at adhering to Generally Accepted Accounting Principles (GAAP) are not required to calculate and deduct the economic costs of Granting ESOP to Senior Management and employees. No Laws have been broken by these companies by not expensing options. The costs of Options are deducted from Companies reported income when it comes time for them to pay taxes. Your question, which is a great one is a central point of debate in determining the quality of Corporate America's Earnings. John