Replies to post #82455 on InterDigital Inc (IDCC)

[micromays2]

Thanks DD - appreciate your time and effort in the last two posts.

[Corp_Buyer]

Why does $10M of the $27M go to capital rather than earnings, like the remaining $17M? What is the basis or rationale for this allocation, one way or the other?

"$17 million of which will be recognized as income. The remaining $10 million will be credited to additional paid-in-capital"

Also, is the company in effect stating that our total operating expenses for 3Q04 are about $26M?

Thanks for your detailed explanations - all very helpful.

Regards,
Corp_Buyer

[TFWG]

DD, outstanding post. You really broke down the theory behind the accounting into simple language. Very good post.

As I've never made this type of an entry, could you tell me how you would post the valuation allowance? I realize it sits on the liability side, I was just wondering where.

Thanks again, I'm saving this one.

Bob

[lastchoice]

DD, many thanks. great treatise. idcc is positioning themselves for the future and then endorsing it with a buyback. sure bodes well...

[goblue]

DD, you said:

What could make IDCC change its position on this reserve? IDCC now feels that EXCLUDING INCOME FROM ARBITRATIONS AND LAWSUITS, that it anticipates generating taxable income to use up $27 million of this reserve. In order to use up $27 million of the reserve, at an effective tax rate of 34% as stated in today's release, IDCC expects on a conservative basis to generate $79 million (27 million/34%) taxable income in the future.

is there a timeframe for the "future?" does this 27 million reserve expire after a certain amount of time? if not, then what would be your guess as to the timeframe? tia.

[The Count]

What these announcements mean:

See Desert dweller's posts 82442 and 82445. Accurate and far better written than I could've done.

Bottom line, the change in accounting has absolutely NO AFFECT on how IDCC's business is doing. They were going to need to do it sooner or later, so I'm glad they got it out of the way. The partial reversal of the tax valuation allowance is a strong indication that IDCC is expecting taxable income and they were able to provide sufficient evidence to the auditors to convince them.

I think the tax offset provides a boost to the bottom line to help absorb the one time missed quarter of revenue, so this was a good opportunity to take this hit. I love the buyback. I believe IDCC is undervalued and I am thrilled to have IDCC reduce the dilution. A great use of the cash reserve.

I would also like to thank everyone for pretty much ignoring AiMlesS13SmugArrogantGoof. Replies just generate more useless babble.