Qualcomm 2002 Annual Report Download - page 68

FASB issued FAS 144 to establish a single accounting model, based on the framework
established in FAS 121, as FAS 121 did not address the accounting for a segment of a
business accounted for as a discontinued operation under APB 30, “Reporting The
Results of Operations — Reporting The Effects of Disposal of a Segment of a Business,
and Extraordinary Unusual and Infrequently Occurring Events and Transactions.” FAS 144
also resolves significant implementation issues related to FAS 121. Companies are
required to adopt FAS 144 for fiscal years beginning after December 15, 2001, but early
adoption is permitted. The Company will adopt FAS 144 as of the beginning of fiscal
2003. The Company does not expect the adoption of FAS 144 to have a material impact
on its operating results and financial position.
NOTE 2. MARKETABLE SECURITIES
Marketable securities were comprised as follows (in thousands):
Current Noncurrent
September 30, September 30,
2002 2001 2002 2001
Held-to-maturity:
Certificates of deposit $ 75,008 $ 290 $ — $ —
Commercial paper — — 6,200 6,200
Corporate medium-term notes 93,774 227,022 89,418 99,698
168,782 227,312 95,618 105,898
Available-for-sale:
Federal agencies 267,997 96,078 — —
U.S. government securities 235,663 231,903 — —
Corporate medium-term notes 295,670 216,512 — —
Mortgage and asset-backed securities 289,537 115,095 — —
Non-investment grade debt securities — — 259,196 76,681
Equity securities 130,266 7,677 24,956 114,754
1,219,133 667,265 284,152 191,435
Trading:
Corporate convertible bonds — — 1,860 —
— — 1,860 —
$1,387,915 $894,577 $381,630 $297,333
As of September 30, 2002, the contractual maturities of debt securities were as
follows (in thousands):
Years to Maturity
Greater No Single
Less than One to Five to than Maturity
One Year Five Years Ten Years Ten Years Date Total
Held-to-maturity $167,211 $ 90,989 $ — $ — $ 6,200 $ 264,400
Available-for-sale 50,460 777,736 221,935 8,396 289,536 1,348,063
Trading — 1,860 — — — 1,860
$217,671 $870,585 $221,935 $8,396 $295,736 $1,614,323
Securities with no single maturity date include mortgage-backed securities and
asset-backed securities.
Available-for-sale securities were comprised as follows at September 30
(in thousands):
Unrealized Unrealized Fair
Cost Gains Losses Value
2002
Equity securities $ 210,769 $ 18,520 $ (74,067) $ 155,222
Debt securities 1,343,703 21,535 (17,175) $1,348,063
Total $1,554,472 $ 40,055 $ (91,242) $1,503,285
2001
Equity securities $ 227,537 $ 3,388 $(108,494) $ 122,431
Debt securities 790,793 16,070 (70,594) 736,269
Total $1,018,330 $ 19,458 $(179,088) $ 858,700
The fair values of held-to-maturity debt securities at September 30, 2002 and 2001
approximate cost.
In fiscal 2000, the Company purchased approximately 11,500,000 shares of the
common stock of NetZero, Inc. (NetZero), representing a 9.9% interest, for $144 million
in cash. NetZero was a publicly-traded company that provided Internet access and
services to consumers and on-line direct marketing services to advertisers. Effective
September 26, 2001, NetZero and Juno Online Services, Inc. completed a merger and
became United Online, Inc. (United Online). The Company received 2,300,000 shares
of United Online for its 11,500,000 shares of NetZero, representing an approximate
5.7% interest in United Online. During fiscal 2001, the Company recorded an other-
than-temporary impairment charge of $134 million in investment (expense) income
related to this investment. The fair value of the United Online investment was
$22 million at September 30, 2002.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued