Qualcomm 2002 Annual Report Download - page 70

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During fiscal 2002, the Company wrote off $622 million in finance receivables from
Globalstar L.P. (Note 4) against the allowance for doubtful receivables previously
established. At September 30, 2002 and 2001, the fair value of finance receivables
approximated $826 million and $685 million, respectively. The fair value of finance
receivables is estimated by discounting the future cash flows using current interest
rates at which similar financing would be provided to similar customers for the same
remaining maturities.
Maturities of finance receivables at September 30, 2002 were as follows
(in thousands):
Fiscal Year Ending September 30, Amount
2003 $391,653
2004 2,138
2005 1,413
2006 84,796
2007 112,935
Thereafter 288,924
$881,859
Maturities after 2007 include finance receivables which have been fully reserved
or which the Company has not or does not expect to receive payments in accordance
with the scheduled maturities.
At September 30, 2002, commitments to extend long-term financing by the
Company to certain CDMA customers of Ericsson totaled approximately $473 million.
The commitment to fund $346 million of this amount expires on November 6, 2003.
The funding of the remaining $127 million, if it occurs, is not subject to a fixed expi-
ration date, however, on November 12, 2002, $9 million of this commitment was
cancelled (Note 15). The financing commitments are subject to the CDMA customers
meeting conditions prescribed in the financing arrangements and, in certain cases,
to Ericsson also financing a portion of such sales and services. This financing is gen-
erally collateralized by the related equipment. Commitments represent the maximum
amounts to be financed under these arrangements; actual financing may be in
lesser amounts.
INVENTORIES
September 30,
(In thousands) 2002 2001
Raw materials $19,583 $18,251
Work-in-process 4,315 3,346
Finished goods 64,196 74,266
$88,094 $95,863
PROPERTY, PLANT AND EQUIPMENT
September 30,
(In thousands) 2002 2001
Land $ 41,668 $ 38,093
Buildings and improvements 294,186 280,851
Computer equipment 348,208 283,293
Machinery and equipment 442,098 176,300
Furniture and office equipment 29,841 16,393
Leasehold improvements 53,769 44,990
1,209,770 839,920
Less accumulated depreciation
and amortization (523,487) (408,524)
$ 686,283 $ 431,396
Property, plant and equipment increased during fiscal 2002 primarily as a result
of the acquisition of Vésper Holding (Note 13). Depreciation and amortization expense
related to property, plant, and equipment for fiscal 2002, 2001, and 2000 was
$133 million, $91 million and $109 million, respectively. At September 30, 2002 and
2001, buildings and improvements and leasehold improvements with a net book value
of $86 million and $91 million, respectively, including accumulated depreciation and
amortization of $43 million and $37 million, respectively, were leased or held for
lease to third parties. Future minimum rentals, including the Kyocera rentals (Note 14),
in each of the next three years from fiscal 2003 to 2005 are $21 million, $17 million and
$4 million.
INTANGIBLE ASSETS
At September 30, 2002 and 2001, goodwill was presented net of $634 million and
$389 million in accumulated amortization, respectively. Goodwill amortization will
cease beginning in fiscal 2003 (Note 1).
At September 30, 2002 and 2001, intangible assets totaled $179 million and
$121 million, respectively, net of $43 million and $21 million in accumulated amortization,
respectively. During fiscal 2002, the Company acquired intangible assets, including
wireless licenses, as a result of its acquisitions (Note 13); at September 30, 2002,
these intangible assets totaled $62 million. During fiscal 2001, the Company acquired
licenses in the Australian 3G wireless spectrum auctions for $84 million. The
Company will begin amortizing the licenses in Australia, over their expected useful
lives of 15 years when they become effective in October 2002.
Capitalized software development costs were $24 million and $16 million, at
September 30, 2002 and 2001, respectively. Accumulated amortization was $14 and
$6 million at September 30, 2002 and 2001, respectively. Amortization expense related
to capitalized software for fiscal 2002, 2001 and 2000 was $10 million, $1 million and
$1 million, respectively.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued