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To: Killswitch who wrote (14511)	10/24/2002 12:02:40 PM
From: Bill Harmond	Read Replies (1) \| Respond to of 57684

11:38 ET AFCI Adv Fibre Comm to benefit from DSL advertising - Fulcrum (15.01 +0.62) Fulcrum believes that YHOO's and SBC's co-branded DSL advertising campaign is a plus for AFCI, as the new retail campaign directly supports firm's thesis that AFCI will benefit from increased advertising dollars spent by the RBOCs to promote DSL service (SBC is a 10% customer of AFCI).

To: Killswitch who wrote (14511)	10/24/2002 1:57:29 PM
From: Oeconomicus	Respond to of 57684

Those are included in "operating earnings". I know they are, but that wasn't my point. If you insist on measuring earnings net of estimated and theoretical non-cash expenses for options and pensions, then net them out of operating earnings, not GAAP earnings, so that you can still exclude truly non-recurring and non-operating expenses. After all, the point is to measure valuation on the capacity of the business to generate profits from operations, not from non-operating items like gains and losses on non-operating investments or non-recurring items like costs of exiting a discontinued business. But more importantly, if you're going to make such an adjustment, don't just do it going forward or for only the last few years and then try to apply historical PE multiples that aren't adjusted for these changes in accounting. Of course, the issue remains whether making these adjustments would provide helpful information to investors and, if you're going to try to account for theoretical expenses, how it should be done. Bob

To: Killswitch who wrote (14511)	10/24/2002 3:21:05 PM
From: Oeconomicus	Read Replies (1) \| Respond to of 57684

Brian, a guy from S&P (might have been David Blitzer, who was quoted for the article) was on CNBC a little while ago talking about this new number. He was focused entirely on transparency of reporting by companies so that investors can judge better what the numbers really mean for that company, not on the valuation implications. In fact, he said that if you want to judge valuation of businesses (or the index) with the aid of an historical perspective on PEs, you need to look at operating or as reported figures because those are the measures where historical data is available. The article alludes to this issue as well, but he said more on the tube. Bob