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To: Les H who wrote (180924)	7/18/2002 7:40:33 AM
From: Les H	Read Replies (1) \| Respond to of 436258

Barry Ehrlich, a London-based analyst with the investment banking firm Dresdner Kleinwort Wasserstein, suspects two factors will force many US companies to expense options, regardless of what Congress does. One is that the European Union appears likely to adopt options-expensing reform soon. Firms listed on European exchanges would then be required to expense options by no later than 2005. This would be easier for European high-tech firms than for American companies. Ehrlich estimates 2001 published earnings would take a 25 percent hit. In the US, it would be 75 percent. Companies issuing many options are "still overvalued," he reckons. Even Blue Chips would be affected. Expensing options would have lowered reported net income for companies in the Standard & Poor's 500 index by 30 percent in 2001 and an average of 10 percent in the prior three years. csmonitor.com