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To: Frodo Baxter who wrote (1551)	11/14/1997 9:25:00 AM
From: Sam	Read Replies (2) \| Respond to of 9256

"My calculations come up with a loss of $237 million." If true, that is incredible. I can't believe that they had a hedging program that exposed them to unlimited losses. That is inexcusable. I will have to read it myself. Did you get it on their home page?

To: Frodo Baxter who wrote (1551)	11/14/1997 7:29:00 PM
From: Gus	Read Replies (2) \| Respond to of 9256

Lawrence, Go read Winston's post... "....The facts in Seagate's situation are on page 8 of the Annual Report, in the MD&A. Seagate has certain hedges which are not true hedges for SFAS No. 52 purposes. (Under SFAS No. 52, a company cannot hedge generalized "cash flows," but only specific transactions.) Seagate has unrealized losses on these hedges, which were recognized in the P&L for the quarter ending September 30, 1997. For periods after this date, the related cash flows will result in higher income than would otherwise have occurred. It's actually odd, because that income will probably flow into income from operations, while the current period loss will likely be in other expense.... techstocks.com Note that SEG is winding down these positions as they mature: June quarter - $1.006 B in FX forward contracts & $326 M in Options Sept quarter - $ 785 M in FX forward contracts & $238 M in Options In other words, SEG has roughly $200-250 million in dollars scheduled to be delivered each of the next 3 quarters, including this one, in exchange for the contracted foreign currency (baht, ringgit, S$) which SEG then turns around and uses to cover its foreign currency expenses, which are THEN expensed and converted using the much lower prevailing currency rates. Gus