Qualcomm 2004 Annual Report Download - page 70

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QUALCOMM 66
Notes to Consolidated Financial Statements continued
The following table shows the gross unrealized losses and fair values of the Company’s investments in individual securities that have been in
acontinuous unrealized loss position deemed to be temporary for less than 12 months, aggregated by investment category, at September 30,
2004 (in millions):
Fair Unrealized
Value Losses
U.S. Treasury and federal agency securities $ 309 $ (1)
Corporate bonds and notes 1,261 (4)
Mortgage and asset-backed securities 559 (2)
Non-investment grade debt securities 108 (7)
Equity mutual funds 296 (7)
Equity securities 196 (13)
$2,729 $(34)
At September 30, 2004, the Company did not have any investments in individual securities that have been in a continuous unrealized loss
position deemed to be temporary for more than 12 months.
Investment Grade Debt Securities. The Company’s investments in investment grade debt securities consist primarily of investments in certificates
of deposit, U.S. Treasury and federal agency securities, foreign government bonds, mortgage and asset-backed securities and corporate bonds
and notes. The unrealized losses on the Company’s investments in investment grade debt securities were caused by interest rate increases. Due
to the fact that the decline in market value is attributable to changes in interest rates and not credit quality, and because the severity and duration
of the unrealized losses werenot significant, the Company considered these unrealized losses to be temporary at September 30, 2004.
Non-Investment Grade Debt Securities. The Company’sinvestments in non-investment grade debt securities consist primarily of investments in
corporate bonds. The unrealized losses on the Company’s investment in non-investment grade debt securities were caused by credit quality and
industryor company specific events. Because the severity and duration of the unrealized losses were not significant, the Company considered
these unrealized losses to be temporary at September 30, 2004.
Marketable Equity Securities. The Company’s investments in marketable equity securities consist primarily of investments in common stock of
large companies and equity mutual funds. The unrealized losses on the Company’s investment in marketable equity securities were caused by
overall equity market volatility and industryspecific events. The duration and severity of the unrealized losses in relation to the carrying amounts
of the individual investments were consistent with typical equity market volatility. Current market forecasts support a recovery of fair value up
to (or beyond) the cost of the investment within a reasonable period of time. Accordingly, the Company considered these unrealized losses to
be temporaryat September 30, 2004.
NOTE 3. COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS
Accounts Receivable
September 30,
(In millions) 2004 2003
Trade, net of allowance for doubtful accounts of $5 and $12, respectively $529 $461
Long-termcontracts:
Billed 11 10
Unbilled 37
Other 38 6
$581 $484
Unbilled receivables represent costs and profits recorded in excess of amounts billable pursuant to contract provisions and are expected to be
realized within one year.
Net accounts receivable were reduced by $22 million from September 30, 2003 as a result of discontinued operations (Note 11).