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

QCOM 174.54

-1.2%

Nov 13 3:59 PM EST

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To: JGoren who wrote (93432)	7/22/2010 10:30:07 AM
From: Jim Mullens	2 Recommendations Read Replies (2) of 196634

JGoren, re: One Time Large Dividend ”The company should have a one-time large dividend before the taxes on dividends go up January 1st. “ >>>>>>>>>>>>>>>>>>>> My email to QCOM IR (snip below) prior to this year’s ASM discussed regular and special dividends to boost the share price. In fact, after the presentation, I briefly spoke with Paul on this issue. Paul’s concern disfavoring a special dividend centered around rewarding long term shareholders. His thinking being, a one time large dividend similar to what MSFT did would not necessarily target long term shareholders, only those currently holding shares or purchasing before the dividend was granted --- (i.e. with the share price falling after the payout). I believe my plan (see below) suggesting a special dividend payable quarterly for up to two years ( $0.20/ qtr for 8 quarters) would satisfy Paul’s concerns. Re: 2011 dividend tax increase, it’s my understanding that the admin- ….+ is not planning on repealing the current tax treatment on folk’s earnings under $250k ….+ raising the rate from 15% to 20% on those above $250k. >>>>>>>>>>>>>>>> Creative Solutions to Increase / Sustain at Least 15% Annual Growth in the Share Price A- Dividends: Regular & Special- Current cash & marketable securities together with recurring cash flow should be more than adequate to fund both increasing the regular and a temporary special dividend. Increasing the regular dividend and implementing a special dividend should provide a strong signal to the markets of QUALCOMM’s confidence in its intentions / ability to sustain long term earnings growth. …………………………………………. 12/ 2008…….12/ 2009 ..Pro Forma Free Cash Flow…………$ 3.4B……… $ 1.3B ..Cash & Marketable Securities- …+ Domestic…………………………. $ 6.6B……… $ 8.6B …+ Offshore…………………………....... 6.5 ………..10.3 …+ Total……………………………….. $13.1…………$18.9 ..Dividends…. …+ Regular dividend- increase to $0.20/ qtr…$0.80 x 1.7B shares = $1.36B / year …+ Special dividend- @ $0.20 / gtr ………….$0.80 x 1.7B shares = $1.36B / year (2 years) …+ Total…………………………………………$1.60 x 1.7B shares = $2.72B / year ………………….$1.60 / $40 per share = 4% dividend yield B- New Approach to Strategic Planning / Internal Budget Development I believe a new approach to strategic planning / budget development is needed, with the primary focus on bottom line results--- growing EPS at least 15% annually. ..1) Per current procedures- ……a) carefully estimate the best / worst case ranges (hi /low) for QUALCOMM’s various markets (device sales, chip sales, ASPs, etc). ……b) Estimate the revenue ranges (hi / low) from those market metrics ..2) Develop internal budgets (COGS / Opex / headcount ) with required reductions if necessary, to achieve bottom line / EPS growth of at least 15% YoY growth--- based on the low revenue range---. ………Note- As mentioned above, if 15% EPS growth cannot be achieved, supplement the shortfall with a special dividend so that both the EPS growth percentage and dividend yield percentage when added together equals 15%. ..3) Prioritize and rank all projects and all employees (productively / value) for potential elimination / deferral / dismissal if required to meet bottom line targets. ..4) Continually monitor revenue and bottom line performance to those budgets and further reduce expenses / headcount accordingly if revenue targets fall short.

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