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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: DWB who wrote (81089)	10/16/2008 9:12:46 AM
From: Jim Mullens	1 Recommendation Read Replies (1) \| Respond to of 197314

Scratch / DWB, re: NOK payment to QCOM of Eur 1.7 Billion- Snip>>>> The payment amounts to EUR 1.7 billion and is payable by Nokia to Qualcomm during the fourth quarter 2008. The lump-sum payment made to Qualcomm will be expensed quarterly over the term of the agreement.” nokia.com DWB>> So $2.3 billion greenbacks... not too shabby. A couple of comments / questions- 1) The $2.3 Billion is based upon today’s currency conversion rate of 1.35. This rate has come down from ~ 1.58 in July. At 1.58, the conversion would be $2.7 billion. I believe Q’s licenses require payment in US dollars and thus it will be interesting to know what conversion rate was used in determining the actual dollar amount payable to QCOM. 2) The payment is payable in the 4th quarter, and will be recorded as “nice” increase to the Q’s balance sheet (cash & marketable securities ) regardless of how it is amortized on the income statement. ….+ Invested in US Treasuries it will provide a increase in FY09 investment income- ……….@ five year -2.8% X $2.3 Bill = $64 mill / 1.7 bill shares out = 4 cents before taxes …….…@ 10 year- 3.95% X $2.3 Bill = $90 mill / 1.7 bill shares out = 5 cents before taxes …….…@ 30 year- 4.20% X $2.3 Bill = $97 mill / 1.7 bill shares out = 6 cents before taxes …+ Other options for the ~$2.3 Billion include- ………+ additional share buy backs ………+ dividend increase ………+ additional dry powder for bargain basement acquisitions At a time when cash is king----- $2.3 billion is a welcome addition to anyone’s’ balance sheet and is significantly more valuable today than a year or two ago when used as currency for acquisition purposes (IMO).