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

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To: David E. Taylor who wrote (81111)	10/17/2008 8:26:22 AM
From: Eric L	2 Recommendations Read Replies (2) of 197623

Rick Simonson on Nokia's Prepayment ... ... from the Nokia Q3 Earnings CC (Seeking Alpha): >> "Let me make a reminder regarding the Qualcomm settlement. The Qualcomm licensing agreement we entered into in quarter three includes an upfront cash payment in quarter four. The EUR1.7 billion lump sum payment to Qualcomm will be reported in our cash flow statement in quarter four as an operating cash outflow. The bulk of the payment, the reason I say the bulk is remember that some of the payment goes to the historical amount that was due from the time of April 7th until we reached the agreement when Qualcomm was not accepting any of our payments towards them. So the bulk of the payment is essentially a prepayment of cost to goods sold and therefore will be expensed in subsequent quarters until the end of the contract period in 2022. As a result, in the future, our cash payments to Qualcomm will be lower than what is expensed in the P&L. The new agreement with Qualcomm has a positive impact to our gross margins. We already saw a benefit to gross margin after we started providing in a significantly lower royalty rate after the old license agreement with Qualcomm expired in the second quarter of 2007. Going forward, we will see a slight additional benefit to gross margins as the settlement was somewhat more favorable than what we were providing for." ### tinyurl.com - Eric -

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