Qualcomm 2011 Annual Report Download - page 73

Download and view the complete annual report

Please find page 73 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
observable inputs be used when available. Observable inputs are inputs that market participants would use in valuing the asset or liability and are
developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s
assumptions about the factors that market participants would use in valuing the asset or liability. There are three levels of inputs that may be used
to measure fair value:
Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. The Company
reviews the fair value hierarchy classification on a quarterly basis. Changes in the observability of valuation inputs may result in a
reclassification of levels for certain securities within the fair value hierarchy.
The following table presents the Company’s fair value hierarchy for assets and liabilities measured at fair value on a recurring basis at
September 25, 2011 (in millions):
Marketable Securities. With the exception of auction rate securities, the Company obtains pricing information from quoted market prices,
pricing vendors or quotes from brokers/dealers. The Company conducts reviews of its primary pricing vendors to determine whether the inputs
used in the vendor’s pricing processes are deemed to be observable.
The fair value of U.S. Treasury securities and government-related securities, corporate bonds and notes and common and preferred stock are
generally determined using standard observable inputs, including reported trades, quoted market prices, matrix pricing, benchmark yields,
broker/dealer quotes, issuer spreads, two-sided markets and/or benchmark securities.
The fair value of debt and equity mutual funds is reported as published net asset values. The Company assesses the daily frequency and size
of transactions at published net asset values and/or the fund’s underlying holdings to determine whether fair value is based on observable or
unobservable inputs.
The fair value of highly rated mortgage- and asset-backed securities is derived from the use of matrix pricing (prices for
• Level 1 includes financial instruments for which quoted market prices for identical instruments are available in active markets.
• Level 2 includes financial instruments for which there are inputs other than quoted prices included within Level 1 that are observable
for the instrument.
• Level 3 includes financial instruments for which fair value is derived from valuation techniques in which one or more significant inputs
are unobservable, including the Company’s own assumptions.
Level 1
Level 2
Level 3
Total
Assets
Cash equivalents
$
2,495
$
2,129
$
—
$
4,624
Marketable securities
U.S. Treasury securities and government-related securities
14
508
—
522
Corporate bonds and notes
—
6,018
—
6,018
Mortgage- and asset-backed securities
—
667
11
678
Auction rate securities
—
—
124
124
Non-investment-grade debt securities
—
3,656
16
3,672
Common and preferred stock
1,061
728
—
1,789
Equity mutual and exchange-traded funds
845
—
—
845
Debt mutual funds
1,327
476
—
1,803
Total marketable securities
3,247
12,053
151
15,451
Derivative instruments
—
24
—
24
Other investments (1)
152
—
—
152
Total assets measured at fair value
$
5,894
$
14,206
$
151
$
20,251
Liabilities
Derivative instruments
$
—
$
122
$
—
$
122
Other liabilities (1)
152
—
7
159
Total liabilities measured at fair value
$
152
$
122
$
7
$
281
(1) Level 1 measurements are comprised of the Company’s deferred compensation plan liability and related assets, which are invested in mutual funds.