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QUALCOMM Incorporated
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
During fiscal 2011, the Firethorn division in the QWI segment introduced a new product application trademarked as SWAGG. The initial
consumer adoption rate of SWAGG had fallen significantly short of the Company’s expectations, and as a result, the Company revised its
internal forecasts to reflect lower than expected demand and reduced the Firethorn cost structure. Based on these adverse changes, the Company
performed a goodwill impairment test for the Firethorn division, which was determined to be a reporting unit for purposes of the goodwill
impairment test. The goodwill impairment test is a two-step process. First, the Company estimated the fair value of the Firethorn reporting unit
by considering both discounted future projected cash flows and prices of comparable businesses. The results of this analysis indicated that the
carrying value of the reporting unit exceeded its fair value. Therefore, the Company measured the amount of impairment charge by determining
the implied fair value of the goodwill as if the Firethorn reporting unit were being acquired in a business combination. The Company determined
the fair value of the assets and the liabilities, primarily using a cost approach. Based on the results of the goodwill impairment test, the Company
recorded a pre-tax goodwill impairment charge of $114 million in other operating expenses in fiscal 2011. Subsequent to the impairment, $40
million of goodwill remained for the Firethorn reporting unit.
The components of other intangible assets were as follows (in millions):
Certain spectrum licenses with a carrying value of $746 million that the Company has agreed to sell were classified as held for sale at
September 25, 2011 (Note 11). All of the Company’s intangible assets, other than goodwill, certain spectrum licenses in the amount of $16
million and acquired in-process research and development, are subject to amortization. Amortization expense related to these intangible assets
for fiscal 2011 , 2010 and 2009 was $357 million , $227 million and $207 million , respectively, and amortization expense is expected to be
$457
million , $438 million , $426 million , $385 million and $277 million for fiscal 2012 to 2016, respectively, and $1.1 billion thereafter.
Other Current Liabilities.
Note 5. Investment Income (Loss)
Investment income (loss), net was comprised as follows (in millions):
F- 18
September 25,
2011
September 26,
2010
QCT
$
2,456
$
443
QTL
681
676
QWI
158
241
QMT
136
128
QSI
1
—
$
3,432
$
1,488
September 25, 2011
September 26, 2010
Gross Carrying
Amount
Accumulated
Amortization
Gross Carrying
Amount
Accumulated
Amortization
Spectrum licenses
$
20
$
(2
)
$
766
$
(2
)
Marketing-related
72
(18
)
21
(13
)
Technology-based
3,767
(802
)
2,785
(537
)
Customer-related
132
(70
)
12
(10
)
$
3,991
$
(892
)
$
3,584
$
(562
)
September 25,
2011
September 26,
2010
(In millions)
Customer incentives and other customer-related liabilities
$
1,180
$
574
Current portion of payable to Broadcom (Note 9)
170
170
Payable for unsettled securities trades
298
80
Other
406
261
$
2,054
$
1,085