Subject: Follow Up to Sept. 17 Board Meeting
From: [email-masked]
Cc: [email-masked], [email-masked]
Date: Thu, 4 Oct 2001 15:20:58 -0700 (PDT)

Following up on our discussions at the September 17 Board meeting, Wednesday we communicated our earnings expectations for the 3rd & 4th Quarters, 2001, 2002, and 2003 to investment analysts.  This communication was as we discussed at the Board meeting, but in addition we chose to communicate the special charges that we will be incurring in the 3rd & 4th Quarters.  Since it was relatively close to our earnings announcement [planned for October 18], we decided that it would be best to disclose the special charges now rather than waiting. 
Attached is an updated summary of the special charges.  They have changed somewhat since the Board as we raised  the total charge for the third quarter by $.04 per share to $.14.   Specifically, in the Restructuring and Asset Impairment category the charge increased by $.03 primarily due to the required write off of  manufacturing facilities in Brazil.  We also added $.01 related to Loss on Early Extinguishment of Debt as our open market repurchase activity resulted in the acquisition of a higher mix of longer-term issues, thus increasing the cost somewhat. 
The reaction by analysts to these charges is that they are truly one time items.  Therefore, they will be normalized out and analysts will view the 3rd Quarter results as being $.66 per share. 
Even though we lowered expectations for the fourth quarter and 2002, overall the communication was accepted positively. In particular, investors appreciated our willingness and need to spend more in 2002 to maximize the sales of the five new products we expect to launch in 2001 and 2002. We closed Thursday at just under $79, down about $3.75 from our close on Tuesday. This was a much better result than we anticipated. 
If you have any questions about this, please let me know. 
Charlie 
10/4/2001 

 - Q3 & 2001 Yr Normalized Items.doc