InterDigital Inc (IDCC)

[Desert dweller]

Corp, I guess I will respond one more time and hopefully after this you actually understand something about accounting. What your post shows is you don't know how to compute free cash flow. FCF is not impacted by the reversal of an allowance and I will show you in a way even you can understand.

First assume the only activity for IDCC was a reversal of an allowance of $100 million. That would result in net income of $100 million, with me so far? Cash flow starts with net income so we start off with a positive $100 million. Still with me?

Well this is the part you must have forgotten or never knew. The next step in preparing a cash flow statement is to adjust for non cash items. So you would then show adjustments of $100 million for the reversal since NO CASH changed hands. Free cash flow in this simple example is $0, get it? Therefore, the reversal did not have any impact on FCF as you have been incorrectly complaining about for over a month now.

So if the goal includes FCF as a measurement, the reversal impacted FCF by NOTHING. Got it yet? Will you now stop showing your ignorance and move on to something else to complain about?

You said:
"the company does use FCF as a goal, it has been disclosed. My issue is that using a tax credit reserve to boost FCF should NOT be counted towards bonus purposes and it seems you agree with this view? Surely, you must also agree that the amount of taxes paid does affect FCF, right?'