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To: Rocket Scientist who wrote (7849)	10/14/1999 1:38:00 AM
From: djane	Read Replies (1) \| Respond to of 29987

NYTimes. Motorola Plans to Take a Big Charge for Iridium October 14, 1999 By DAVID BARBOZA HICAGO -- Motorola Inc. said Wednesday that it expected to take a $500 million charge against earnings in the fourth quarter, a move that would essentially write off its entire exposure to Iridium, the struggling global satellite telephone service. The charge would bring Motorola's entire write-off to more than $2.3 billion -- eclipsing even the huge corporate misstep that the Quaker Oats Company made a few years ago with its acquisition of Snapple, the beverage maker, which ultimately cost Quaker $1.4 billion. For Motorola, the hope is that the large reserves it has built up to cover its exposure to Iridium will not be entirely depleted, and that Iridium, which is trying to reorganize under Chapter 11 bankruptcy-law protection, will emerge with new prospects for growth. The announcement may also alleviate some pressure on Motorola by outlining its full exposure to the troubled satellite project. The Motorola announcement came a day after the giant telecommunication and semiconductor maker announced a $994 million pretax charge against third-quarter earnings because of its investment in Iridium. The news was released after the close of stock trading Tuesday, and the company's stock fell $4.5625 a share Wednesday, to $90.375, on the New York Stock Exchange. In a telephone conference call with Wall Street analysts Wednesday, Motorola executives offered more detail, saying that the third quarter write-off had created a $1.8 billion reserve related to its exposure to Iridium. They said the announcement of an additional $500 million charge in the coming quarter, if it occurred, would push the reserve to $2.3 billion and represent the company's entire exposure to Iridium. Despite the buildup in reserves, Motorola executives say they still believe in the viability of Iridium, which has been hyrt by huge costs and a low subscriber base since it began operating earlier in the year. Wednesday's announcement is further evidence that Motorola is still deeply tethered to Iridium, a $6 billion system of about 66 low-orbit satellites that was expected to deliver communications to "anyone, anytime, virtually anywhere in the world." But most Wall Street analysts say Motorola is on sound financial footing after reporting healthy third-quarter sales and profit gains on Tuesday, a strong turnaround from a year earlier when Motorola was faltering. The analysts say they largely view the Iridium situation as a disturbing one, but one not likely to do substantial damage to Motorola's balance sheet. Motorola has taken gradual steps to inform analysts about its exposure and to prepare for the possibility of a bankruptcy-law filing by Iridium. "Motorola has taken a very prudent and conservative position on Iridium," said Kenneth M. Leon, an analyst at ABN-AMRO. "I'm not concerned. They have prepared themselves very well. They have $4 billion in cash and cash equivalents on hand." Iridium, which is based in Washington, is trying to rework its debt and finances with the support of Motorola. And executives close to the two companies say Craig McCaw, the cellular telephone pioneer, is considering taking a huge stake in Iridium as a way to help revive a venture he views as technologically sound. Motorola executives say the company will not commit any more money to Iridium unless the company gets large commitments from other investors. Motorola said Tuesday, however, that there was a chance additional costs would be incurred after a restructuring. But for now, Motorola is holding huge reserves to cover everything from a $750 million loan it backed to investments and financing provided for the "gateway" companies that sell the satellite service for Iridium. It was scientists at Motorola who first developed the idea of a global satellite system in the 1980's. Poor marketing and technical glitches, however, were cited for getting the service off to a slow start earlier this year and, before long, the company found itself unable to finance its debt. Copyright 1999 The New York Times Company

To: Rocket Scientist who wrote (7849)	10/14/1999 5:56:00 AM
From: limtex	Read Replies (2) \| Respond to of 29987

RS and thread - I'm here at Telecom. Went straight to the stand. Met President.Missed Maurice by a day!!! Let me tell you that I consider that the demo phones are connected by wire line! They just can't be connected by satellite....the quality is just too good!!! It isn't just good it is fantastic!! These guys are gung ho and great sprirt and they will no doubt get the 7m customers we need and thats that. My guess is they will get a whole bunch of them from just Brazil never mind anywhere else. Great company great product. Its a winner. BTW I did think it was a little in bad taste for IRIDF to have a huge tent in the tented part right at the front after what they have just done to a bunch of investors. I thought to have that much 'front' was just a little rich. Best regards, L