Qualcomm 2011 Annual Report Download - page 86

QUALCOMM Incorporated
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
On October 11, 2011 , the Company announced a cash dividend of $0.215 per share on the Company’s common stock, payable on
December 21, 2011 to stockholders of record as of November 23, 2011 , which will be reflected in the consolidated financial statements in the
first quarter of fiscal 2012.
Noncontrolling Interests. In June 2010, the Company won a 20 MHz slot of Broadband Wireless Access (BWA) spectrum in four telecom
circles in India as a result of the completion of the BWA spectrum auction. Assignment of licenses to operate wireless networks on this
spectrum, with an initial license period of 20 years , is pending approval by the Indian government. In September 2011, the Company received a
letter from the Government of India’s Department of Telecommunications notifying the Company that its applications to obtain licenses to
utilize the spectrum had been rejected. In response, the Company filed a petition with the Telecom Disputes Settlement and Appellate Tribunal
seeking to overturn this letter (Note 9). If assigned, the Company will amortize the spectrum licenses over the remaining license period
commencing upon the commercial launch of wireless services in India, which is expected to occur within five years of the assignment date . The
Company’s goal is to attract one or more operator partners into a venture (or ventures) for construction of an LTE network in compliance with
the Indian government's rollout requirement for the BWA spectrum and then to exit the venture(s). The manner and timing of such exit will be
dependent upon a number of factors, such as market conditions and regulatory considerations, among others.
During the second quarter of fiscal 2011, in connection with the India BWA spectrum acquisition, certain of the Company’s subsidiaries in
India issued noncontrolling interests to two third-party Indian investors for $62 million , such that the Company now holds a 74% interest in
each of those subsidiaries, the maximum interest permitted under applicable Indian Foreign Direct Investment regulations. In addition, the third
parties representing the noncontrolling interests in the subsidiaries hold put rights that provide them with options to sell their ownership interests
in the subsidiaries to QUALCOMM Incorporated or its nominee (subject to applicable regulatory approvals) after July 29, 2014, or earlier if
certain events occur, at a price equal to their original capital contribution. The aggregate fair value of these put rights, which are accounted for as
freestanding financial instruments classified in other liabilities, was $7 million at September 25, 2011 .
Note 8. Employee Benefit Plans
Employee Savings and Retirement Plan. The Company has a 401(k) plan that allows eligible employees to contribute up to 100% of their
eligible compensation, subject to annual limits. The Company matches a portion of the employee contributions and may, at its discretion, make
additional contributions based upon earnings. The Company’s contribution expense was $52 million in fiscal 2011 and $46 million in both fiscal
2010 and 2009 .
Equity Compensation Plans. The 2006 Long-Term Incentive Plan (the 2006 Plan) was adopted during the second quarter of fiscal 2006 and
replaced the 2001 Stock Option Plan and the 2001 Non-Employee Directors’ Stock Option Plan and their predecessor plans (the Prior Plans).
The 2006 Plan provides for the grant of incentive and non-qualified stock options, restricted stock units, stock appreciation rights, restricted
stock, performance units and shares and other share-based awards and is the source of shares issued under the Executive Retirement Matching
Contribution Plan (ERMCP). The shares authorized under the 2006 Plan were approximately 483,284,000 at September 25, 2011 , including
65,000,000 shares that were approved by the Company’s stockholders in March 2011. The share reserve remaining under the 2006 Plan was
approximately 276,131,000 at September 25, 2011 . Shares subject to any outstanding option under a Prior Plan that is terminated or cancelled
(but not an option under a Prior Plan that expires) following the date that the 2006 Plan was approved by stockholders, and shares that are
subject to an award under the ERMCP and are returned to the Company because they fail to vest, will again become available for grant under the
2006 Plan. The Board of Directors of the Company may amend or terminate the 2006 Plan at any time. Certain amendments, including an
increase in the share reserve, require stockholder approval.
During fiscal 2011, the Company assumed a total of 9,564,000 outstanding stock awards under various stock-based incentive plans (the
Assumed Plans) as a result of the acquisition of Atheros (Note 12). The Assumed Plans provided for the grant of incentive stock options, non-
qualified stock options, restricted stock units and other stock-based awards. The Company can continue to grant stock awards under one of the
Assumed Plans, the Atheros Communications, Inc. 2004 Stock Incentive Plan, as amended, (the Atheros Plan) to certain employees. The share
reserve under the Atheros Plan was 9,733,000 at September 25, 2011 . All other remaining shares available under Assumed Plans were
terminated on the date of the acquisition, and no additional shares may be granted under those plans.
F- 23
2011
2010 2009
Per Share
Total Per Share Total Per Share Total
First quarter
$
0.190
$
314
$
0.170
$
284
$
0.160
$
264
Second quarter
0.190
319
0.170
279
0.160
264
Third quarter
0.215
360
0.190
309
0.170
282
Fourth quarter
0.215
368
0.190
305
0.170
283
$
0.810
$
1,361
$
0.720
$
1,177
$
0.660
$
1,093