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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting

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To: slacker711 who wrote (81122)	10/16/2008 11:38:07 AM
From: David E. Taylor	Read Replies (1) of 197175

Two things Keitel said in the Q3 cc: ”...it is a very substantial upfront payment, much more than what has been owed for the past, and a portion of it is a payment for the future... "what we expect to record in this fourth quarter fiscal quarter of 2008 will be a payment that reflects due consideration for the use of our IP from April 2007 through the fourth quarter of fiscal 2008. Then next year there will be an amortization [of the remaining up front payment] and a resumption of payments as well." [my clarifier in square brackets] As I said, I originally interpreted these statements, the estimated Q4 EPS impact of 7-13 cents, and the 20-28 cent EPS estimated impact for FY2009, to imply a (probably) straight line amortization of the entire upfront amount over 63 quarters, 6 past and 57 future. Since the payment will not be made until this quarter, there will now be no adder to EPS in Q4. So I think the entire amount will now be amortized over the next 57 quarters, despite part of it being a payment for past royalties due over 6 quarters. Hopefully we'll get some clarity on how they are going to account for this and its EPS impact going forward when they report on 11/5/08. David

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