Qualcomm 2011 Annual Report Download - page 100

Download and view the complete annual report

Please find page 100 of the 2011 Qualcomm annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 110

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110

QUALCOMM Incorporated
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
were considered disposed of at March 27, 2011 when the Company shut down the FLO TV business.
Restructuring and restructuring-related activities under the Company’s plan related to discontinued operations were initiated in the fourth
quarter of fiscal 2010 and are expected to be substantially complete by the end of fiscal 2012 as the Company continues to negotiate the exit of
certain contracts and removes certain of its equipment from the network sites. During fiscal 2011, the Company recorded $300 million in
restructuring-related charges, primarily consisting of asset impairments and accelerated depreciation, and net restructuring charges of $58
million , including $48 million in contract termination costs. Restructuring charges also include certain severance and lease costs. There were no
significant restructuring and restructuring-related expenses recognized in fiscal 2010. The Company estimates that it will incur future
restructuring and restructuring-related charges of up to $25 million , primarily related to lease exit costs. The Company may also realize certain
gains, primarily due to the potential release of liabilities associated with ongoing efforts to exit certain contracts, the amount of which cannot be
reasonably estimated at this time. Future cash expenditures are expected to be in the range of $75 million to $115 million .
Changes in the restructuring accrual for fiscal 2011 , which is reported as a component of other liabilities , were as follows (in millions):
Note 12. Acquisitions
On May 24, 2011 , the Company acquired Atheros Communications, Inc., which was renamed Qualcomm Atheros, Inc. (Atheros), for total cash
consideration of $3.1 billion (net of $233 million of cash acquired) and the exchange of vested and earned unvested share-
based payment awards
with an estimated fair value of $106 million . Atheros sells communication chipsets to manufacturers of networking, computing and consumer
electronics products. The primary objective of the acquisition is to help accelerate the expansion of the Company's technologies and platforms to
new businesses beyond cellular, including home, enterprise and carrier networking. Atheros was integrated into the QCT segment.
The allocation of the purchase price to the assets acquired and liabilities assumed based on their fair values was as follows (in millions):
Goodwill recognized in this transaction is not deductible for tax purposes and was allocated to the QCT segment for annual impairment testing
purposes. Goodwill largely consists of expected revenue synergies resulting from the combination of product portfolios, cost synergies related to
reduction in headcount growth and lower manufacturing costs, assembled workforce and access to additional sales and distribution channels. The
intangible assets acquired will be amortized on a straight-line basis over weighted-average useful lives of four years, six years and three
years for
technology-based, marketing-related and customer-related intangible assets, respectively. The estimated fair values of the intangible assets
acquired were primarily determined using the income approach based on significant inputs that were not observable. On the acquisition date,
F- 32
Contract
Termination
Costs
Other Costs
Total
Beginning balance of restructuring accrual
$
—
$
—
$
—
Initial costs
63
16
79
Adjustments to costs
(2
)
(6
)
(8
)
Cash payments
(22
)
(6
)
(28
)
Ending balance of restructuring accrual
$
39
$
4
$
43
Current assets
$
925
Amortizable intangible assets:
Technology-based intangible assets
692
Marketing-related intangible assets
50
Customer-related intangible assets
114
In-process research and development (IPR&D)
150
Goodwill
1,777
Other assets
77
Total assets
3,785
Liabilities
(316
)
$
3,469