Qualcomm 2002 Annual Report Download - page 84

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The Vésper Operating Companies’ summarized financial information, derived
from its unaudited financial statements for the periods prior to the Company obtain-
ing its controlling interest in Vésper Holding, is as follows (in thousands):
September 30,
2001
Current assets $ 74,310
Noncurrent assets 844,387
Total assets $ 918,697
Current liabilities $ 314,221
Noncurrent liabilities 979,544
Total liabilities $1,293,765
September 30,
2001 2000
Revenues $ 125,480 $ 47,648
Gross profit (187,898) (101,877)
Net loss $(877,017) $(346,916)
CORPORACIÓN NACIONAL DE RADIODETERMINACIÓN, S.A. DE C.V.
During May 2002, the Company acquired the equity interests of certain minority
shareholders in its consolidated subsidiary, Corporación Nacional de
Radiodeterminación, S.A. de C.V. (CNR), the exclusive distributor of the Company’s
OmniTRACS product in Mexico, for $24 million. The acquisition increased the
Company’s equity ownership in CNR to approximately 97%. The Company used the
purchase method to account for this acquisition. The preliminary allocation of pur-
chase price, based on the estimated fair values of acquired assets and liabilities
assumed, reflects acquired goodwill and intangible assets of $3 million and $9 million,
respectively. The Company is in the process of finalizing the purchase price allocation
and does not anticipate material adjustments to the preliminary allocation. In accordance
with FAS 142, amounts allocated to goodwill are not amortized. Amounts allocated to
intangible assets are being amortized over their expected useful lives.
WIRELESS KNOWLEDGE, INC.
Wireless Knowledge, formed in November 1998 as a joint venture with Microsoft
Corporation (Microsoft), provides software and professional services to allow users
real-time access to critical business information through a range of browser-
equipped wireless and wireline devices including mobile phones, personal digital
assistants, laptops and landline connected personal computers. In October 2001,
Wireless Knowledge acquired all of the outstanding shares owned by Microsoft in
exchange for an agreement that Microsoft’s royalty obligations under a Development,
License and Alliance Agreement dated July 19, 2000 by and between Wireless
Knowledge and Microsoft are considered fully paid. The acquisition increased the
Company’s ownership in Wireless Knowledge from approximately 50% to approxi-
mately 100%. The Company used the purchase method of accounting to record its
indirect acquisition of Wireless Knowledge in accordance with FAS 141. The allocation
of purchase price, based on the estimated fair values of acquired assets and liabilities
assumed, included acquired goodwill of $4 million. In accordance with FAS 142,
amounts allocated to goodwill are not amortized. The consolidated financial state-
ments include the operating results of Wireless Knowledge from the date of acquisition.
The Company had previously recorded its share of Wireless Knowledge’s losses under
the equity method. Pro forma results of operations have not been presented because
the effect of this acquisition is not material.
SNAPTRACK, INC.
In March 2000, the Company completed the acquisition of all of the outstanding
capital stock of SnapTrack, Inc. (SnapTrack), a developer of wireless position location
technology, in a transaction accounted for as a purchase. The purchase price was
approximately $1 billion, representing the value of QUALCOMM shares issued to
effect the purchase, the value of vested and unvested options and warrants
exchanged at the closing date and estimated transaction costs of $2 million. The allo-
cation of purchase price, based on the estimated fair values of the acquired assets
and assumed liabilities, included acquired goodwill of $948 million, purchased
in-process technology of $60 million and other intangible assets of $34 million.
Tangible assets acquired and liabilities assumed were not material to the Company’s
financial statements. Amounts allocated to goodwill and other intangible assets are
amortized on a straight-line basis over their estimated useful lives of four years. The
acquisition is presented as a non-cash transaction in the statement of cash flows.
The consolidated financial statements include the operating results of SnapTrack
from the date of acquisition. Unaudited pro forma operating results for the Company,
assuming the acquisition of SnapTrack had been made at the beginning of the years
ended September 30, were as follows (in thousands, except per share data):
(Unaudited) 2000*
Revenues $3,197,119
Net income $ 571,161
Basic earnings per common share $ 0.80
Diluted earnings per common share $ 0.72
* As adjusted (Note 13)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued