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To: Mike Buckley who wrote (52201)	7/19/2002 3:13:40 AM
From: gdichaz	Respond to of 54805

Mike: Since you mention me, a comment on this. I have tried to fight my way through the options treatment on the NPI on the Fool, and think I finally understand both the treatment under GAAP and taxes. (At least Paul was kind enough to say "yes" to my question as to whether I had it right.) boards.fool.com And yes, as I have said more than once, in my previous working life I tried to quantify quality and found in sum that what could be quantified was frequently less important than what could not - at least not as a reliable quantified measurement proxy for the full reality of quality. An example is Qualcomm's strength in IP (Intellectual Property) - counting patents is a very poor proxy indeed for that strength and I have yet to find one (note that IP is ignored completely as an asset in accounting measures while bricks and mortar - which are unimportant in Qualcomm's case - are counted). On the other hand, Don Mosher's in depth study of Qualcomm done for RTW is a brilliant analysis IMO of what is key in evaluating Qualcomm's strengths - and so far we only have part one ! Best and respect as always. Cha2

To: Mike Buckley who wrote (52201)	7/19/2002 4:00:13 AM
From: hueyone	Read Replies (1) \| Respond to of 54805

That depends on your definition of free cash flow. Using the definition I use which is different than yours, it's not possible that financing activities will fund free cash flow. Mike, As far as I can tell from your posts over the last year, you appear to be using a very close version (or the same version) of the calculation for free cash flow that I developed and introduced to the thread a couple of years ago---which I titled "adjusted free cash flow". More specifically, I see you are using operating cash flow less tax benefit related to employee stock options less capex, whereas I may have been using gaap income plus depreciation and amortization less tax benefit for exercise less capex, but the two are close in that they remove the tax benefit from exercise of stock options. That “adjusted free cash flow” calculation, that removed tax benefit from exercise of stock options, was my first attempt to try to separate out the impact from stock options from the free cash flow calculation. I have some reservations about that calculation now. More next week. Have a great weekend. Best, Huey