Deep Throat writes…..
Deploying our patented Dick Fuld Banker Speak Translator (BST) here’s how Maggie really meant to answer Grace’s question if she were fully transparent:
Maggie Wu — Chief Financial Officer Thank you, Grace, for the question. Yes, it’s true, our margins have improved at an unbelievable pace through this last quarter. We are brilliant accounting professionals to be sure. The improvement is due primarily from our analysis of all the money we’ve wasted building software, marketing, kickbacks and dumb-ass projects that just don’t work, probably never will and are not yet being used by anybody. Since it’s so cutting edge, we’ve determined that, even though it’s “useless shit” (technical term) right now, we’ve capitalized all of the costs, payroll and kickbacks associated with these projects because, by definition, if these payments don’t benefit the business in the current quarter, they will surely benefit the business sometime in the future. In any event, we are amortizing the cost of all of these tiny, immaterial projects scattered over our 1,300 consolidating operating entities (so PWC can’t possibly figure this out) over 5 years rather than expense these costs in the current period, as we had been incorrectly doing in prior quarters. Lucky we caught it! Also, Joe told me that I had to “hit the number or else my next vacation will be in Xinjiang” so we came up with this cockamamie crock of steaming turds of an accounting change, ran it by PWC, increased their fees and just hope that dumb-ass US Investors don’t catch on to what we’re doing. Anyway, I’m safe in China so if that ungrateful bastard Jay Clayton has any problem with what we’re doing, after all of the fees we paid him at Sullivan & Cromwell, he and his SEC and that pain in the ass FBI can stick their subpoenas “where the sun don’t shine”.
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