Bill:
I was just hoping that somehow accounting magic would make Globalstar go off the books..
I'm not a CPA, but my reading of the 10K for FY 2000, the 10Q for Q1 just filed and other financial filings is that G* has in fact gone off the books.
Having booked sales to G* as part of revenues last year and having carried the G* obligations on the books as part of "accounts receivable" and "finance receivables", they had the option of restating all of last year's results to exclude the G* revenues, or taking a one time charge. They elected the second approach, which is not only simpler but more palatable to the Street, which tends to look past one time charges. The bulk of the one time charge is reflected in the reported results for Q1 in various places:
(1) On the income statement as an "operating expense" of $480,778,000 for "asset impairment and related charges", which results in the reported EPS being a loss of $0.31 vs the pro forma EPS of $0.29 (which only included a $0.03 hit from G*).
(2) On the "finance receivables" as an increase in the "allowance for doubtful receivables" from $11,144,000 on 9/24/00 to $492,413,000 on 12/31/00.
(3) On the balance sheet as a decrease in the total "finance receivables" from a total of $799,404,000 on 9/24/00 to $402,145,000 on 12/31/00, a corresponding decrease in "total assets" from $6,062,982,000 on 9/24/00 to $5,580,425,000 on 12/31/00, and a corresponding decrease in "stockholders equity" from $5,516,328,000 on 9/24/00 to $5,010,142,000 on 12/31/00.
Bottom line is that the loss has been written off the balance sheet and the book value of the company except for the small remaining amount of $56 million they are still carrying as G* assets.
OTOH, this approach means that the G* revenues booked last year will remain on the books as part of last year's revenues, and the next three quarters will include comparison with last year's reported revenues including G*. According to the 10K, QCOM booked $219 million in revenues from G* in FY 2000. Apart from any meager cash payments they receive this year, that number will go effectively to zero, not just for Q1, but for the remaining three Q's as well.
I haven't as yet found anything which states how the $219 million G* revenue for FY2000 was distributed over Q1, Q2, Q3 and Q4, but in your post you said that the number for Q1 last year was $124. Was that from the CC or somewhere else, and have you seen the $219 broken down for all four Q's somewhere?
David T. |
