Qualcomm 2012 Annual Report Download - page 72

QUALCOMM Incorporated
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Depreciation and amortization expense related to property, plant and equipment for fiscal 2012 , 2011 and 2010 was $427 million , $704
million and $437 million , respectively. Interest capitalized in connection with the construction of the wireless network in India totaled $29
million in fiscal 2012. The Company did not capitalize any interest to property, plant and equipment during fiscal 2011 and 2010. The gross
book values of property under capital leases included in buildings and improvements were $64 million and $175 million at September 30, 2012
and September 25, 2011 , respectively. These capital leases principally related to base station towers and buildings. Amortization of assets
recorded under capital leases is included in depreciation expense. Capital lease additions were negligible during fiscal 2012 , and $1 million and
$40 million during 2011 and 2010 , respectively.
At September 30, 2012 and September 25, 2011 , buildings and improvements and leasehold improvements with aggregate net book value of
$13 million and $19 million , respectively, including accumulated depreciation and amortization of $2 million and $8 million
, respectively, were
leased to third parties or held for lease to third parties. Future minimum rental income on facilities leased to others is expected to be $1 million
in
fiscal 2013 and negligible thereafter.
Goodwill and Other Intangible Assets. The Company’s reportable segment assets do not include goodwill. The Company allocates goodwill
to its reporting units for annual impairment testing purposes. Goodwill was allocable to reporting units included in the Company’
s reportable and
nonreportable segments, as described in Note 8, as follows (in millions):
During the third quarter of fiscal 2012
, the Company updated the business plan and related internal forecasts for its QMT division to reflect a
focus on licensing its next generation interferometric modulator (IMOD) display technology while directly commercializing only certain IMOD
products. As a result, the Company performed an interim goodwill impairment test of the QMT division, which was determined to be a reporting
unit for purposes of the goodwill impairment test, and concluded that the fair value of the QMT reporting unit was greater than its carrying
value. In connection with the annual goodwill impairment test in the fourth quarter of fiscal 2012, the Company performed a qualitative
assessment and determined that there was no impairment of the QMT goodwill. The Company also assessed the recoverability of QMT’s other
long-lived assets during the third quarter of fiscal 2012 and concluded that the carrying values of the asset groups were recoverable. However,
during the fourth quarter of fiscal 2012, the Company revised its plans with respect to certain equipment comprising an asset group and
Inventories (in millions)
September 30,
2012
September 25,
2011
Raw materials
$
19
$
15
Work-in-process
531
384
Finished goods
480
366
$
1,030
$
765
Property, Plant and Equipment (in millions)
September 30,
2012
September 25,
2011
Land
$
203
$
203
Buildings and improvements
1,392
1,427
Computer equipment and software
1,409
1,267
Machinery and equipment
1,828
1,798
Furniture and office equipment
80
75
Leasehold improvements
237
263
Construction in progress
774
394
5,923
5,427
Less accumulated depreciation and amortization
(3,072
)
(3,013
)
$
2,851
$
2,414
September 30,
2012
September 25,
2011
QCT
$
2,816
$
2,456
QTL
707
681
QWI
128
158
QSI
—
1
Nonreportable segments
266
136
$
3,917
$
3,432