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QUALCOMM 78
Notes to Consolidated Financial Statements continued
Specified items included in segment EBT for years ended September 30 were as follows (in millions):
QCT* QTL QWI* QSI*
2004
Revenues from external customers $3,091 $1,200 $569 $—
Intersegment revenues 3 131 27 —
Interest income —3114
2003
Revenues from external customers $2,404 $ 898 $489 $ 1
Intersegment revenues 2 102 22 —
Interest income —2145
2002
Revenues from external customers $1,571 $ 780 $445 $ 2
Intersegment revenues 46715—
Interest income 22126
*As adjusted.
Effectively all equity in losses of investees (Note 5) were recorded in QSI in fiscal 2004, 2003 and 2002. Effectively all interest expense (Note 5)
was recorded as corporate expense in reconciling items in fiscal 2004, 2003 and 2002.
The Company distinguishes revenues from external customers by geographic areas based on customer location. Sales information by geographic
area for the years ended September 30 was as follows (in millions):
2004 2003* 2002*
United States $1,016 $ 875 $ 914
South Korea 2,091 1,724 1,134
Japan 877 586 534
China 260 311 74
Brazil 31 36 22
Other foreign 605 315 237
$4,880 $3,847 $2,915
*As adjusted (Note 11).
Segment assets are comprised of accounts receivable, finance receivables and inventory for QCT, QTL and QWI. The QSI segment assets include
marketable securities, accounts receivable, finance receivables, notes receivable, other investments and assets of consolidated investees. The
QSI segment assets at September 30, 2003 and 2002 included $265 million and $391 million, respectively, in assets related to discontinued
operations (Note 11). Total segment assets differ from total assets on a consolidated basis as a result of unallocated corporate assets primarily
comprised of cash, cash equivalents, marketable securities, property,plant and equipment, and goodwill. The net book value of long-lived
assets located outside of the United States was $21 million, $117 million and $251 million at September 30, 2004, 2003 and 2002, respec-
tively. Long-lived assets located outside of the United States were primarily in Brazil at September 20, 2003 and 2002 related to discontinued
operations (Note 11).
NOTE 11. DISCONTINUED OPERATIONS IN THE QSI SEGMENT
In fiscal 1999, the Company acquired ownership interests in Vésper São Paulo S.A. and Vésper S.A. (the Vésper Operating Companies). The
Vésper Operating Companies were formed by a consortium of investors to provide fixed wireless and wireline telephone services in the northern,
northeast and eastern regions of Brazil and in the state of São Paulo. In November 2001, the Company consummated a series of transactions
resulting in an overall financial restructuring of the Vésper Operating Companies, which resulted in its holding direct and indirect controlling
ownership interests in the Vésper Operating Companies. As a result, the Vésper Operating Companies were consolidated in the Company’s
QSI segment.
On December 2, 2003 (the Closing Date), Embratel Participações S.A. (Embratel) acquired the Company’s direct and indirect ownership interests
in the Vésper Operating Companies (the Embratel sale transaction) for no consideration. The Vésper Operating Companies’ existing communi-
cation towers and related interests in tower site property leases (Vésper Towers) were not included in the Embratel sale transaction, and as such,
the Company effectively retained, through a new wholly-owned subsidiary (TowerCo), ownership and control of the Vésper Towers. The Vésper
Towers had a net book value of approximately $5 million on the Closing Date. Concurrent with the closing, the Vésper Operating Companies
entered into a 10-year agreement (renewable at the Vésper Operating Companies’ option for up to two successive 5-year terms) whereby the
Vésper Operating Companies would pay a monthly fee to the Company for use of aerial and ground space on the tower sites. The Company
provided approximately $6 million to fund operations of the Vésper Operating Companies during the first quarter of fiscal 2004 prior to their sale
and additionally provided approximately $39 million in aggregate funding to or for the benefit of the Vésper Operating Companies on or before
the Closing Date to facilitate the Embratel sale transaction. Such funding enabled the Vésper Operating Companies to completely extinguish