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

To: David E. Taylor who wrote (81162)	10/17/2008 4:17:05 PM
From: Stock Farmer	3 Recommendations Read Replies (3) \| Respond to of 197626

It all starts to triangulate consistently. These are what we know 1. 1.7 EUR or 2.3 B$ (depending on EUR/US currency conversion) 2. Being amortized from April 07 through 15 years 3. Qualcomm will recognize a back payment in Q4 when it becomes due, and the remainder over the rest of the period 4. Nokia has been provisioning on an ongoing basis at a higher rate. Firstly, if we amortize 2.3 B$ over 15 years that's about 12 M$/month (38 M$/quarter or 153 M$/year). Now, how much of this represents a "back" payment and how much represents a forward payment? Opinions seem to be manifold, but according to GAAP that would be the same amount as the amortization in the months in the past versus the amount remaining to be amortized into the future. April 07 through Sept 08 = 17 months x 12 M$/month = 215 M$. There's the back payment, which works out to about $0.13 EPS impact for Qualcomm in Q4. Interestingly, this is at the upper end of where Keitel put it, I believe. The remaining 2.1 B$, also being (a) the bulk of the payment according to Nokia and (b) vastly more than the upfront payment - according to Keitel, and (c) the remaining amount to be amortized - according to GAAP is for the forward looking component to the license.