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

To: Stock Farmer who wrote (81165)	10/17/2008 4:36:29 PM
From: Jim Mullens	Read Replies (1) \| Respond to of 197626

Re: NOK settlement accounting- Firstly, if we amortize 2.3 B$ over 15 years that's about 12 M$/month (38 M$/quarter or 153 M$/year). OK, That's the license fee amortization- How 'bout the past royalties unpaid / payable in 4QFY08?

To: Stock Farmer who wrote (81165)	10/17/2008 5:08:27 PM
From: David E. Taylor	Read Replies (1) \| Respond to of 197626

That's kind of how I originally got a ball park estimate of the upfront payment back in July - take the 7 to 13 cent EPS impact for 5 quarters, and assume a straight line amortization from 4/7/07 through 12/31/2022. That approach gave me $1.5 to $2.8 billion, which nicely brackets the actual payment. So not a bad way to do it as it turns out. My point though is that the amount to be booked into Q4 - 7 to 13 cents EPS - is a somewhat arbitrary amount that does not relate to either the actual past or the new royalty rate. OTOH, the actual upfront payment is in fact "much more" than what NOK owed for the past quarters (even using the old royalty rate) as Keitel said it was. And it's clear that the new royalty rate that NOK will pay (on top of the upfront payment amortization) is much less than the old one. If Keitel's 20 to 28 cent impact for FY2009 is used as the basis, the new NOK royalty rate comes out to around 2%. Crap. I said I'd stop speculating. I will. But it is an interesting discussion, and takes my mind of the market shenanigans <g>. David

To: Stock Farmer who wrote (81165)	10/17/2008 5:19:06 PM
From: rkral	Read Replies (1) \| Respond to of 197626

After perusing a transcript of the fiscal Q3 earnings conference call on 7/24/08 ... I agree with your analysis. However, the numbers could use some refinement. The term of the agreement is actually "from April 2007 through the end of 2022" -- 57 months rather than 60. Amortization would be for 5 quarters of "catch-up" plus the current quarter for a total of 6 quarters -- Apr 07 thru Sep 08 -- rather than your 5 quarters. With an up-front payment of $2.3B and 1.7B shares, that's 0.14 per share of amortization. Apply typical gross margin and tax rates to that ... and you end up with about 0.10 per share.