Qualcomm 2012 Annual Report Download - page 90

QUALCOMM Incorporated
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 9. Discontinued Operations
On March 27, 2011, the FLO TV business and network were shut down. On December 27, 2011 , the Company completed the sale of
substantially all of its 700 MHz spectrum for $1.9 billion , and as a result, the Company recognized a gain in discontinued operations of $1.2
billion during fiscal 2012 . All remaining assets have been considered disposed of since March 27, 2011, the date on which the assets ceased to
be used. Since the shut down of the FLO TV business and network, the Company has been working to sell the remaining assets and exit
contracts. Accordingly, the results of operations of the FLO TV business are presented as discontinued operations. Income (loss) from
discontinued operations includes share-based compensation and excludes certain general corporate expenses allocated to the FLO TV business
during the periods presented.
Summarized results from discontinued operations were as follows (in millions):
At September 30, 2012 , total assets and liabilities of the discontinued operations in the consolidated balance sheet were $59 million and $75
million , respectively, consisting primarily of capital lease assets and liabilities of $55 million and $60 million
, respectively. The Company has a
significant number of site leases, and the Company has corresponding capital lease assets, capital lease liabilities (Note 7) and asset retirement
obligations.
Note 10. Acquisitions
During fiscal 2012 , the Company acquired eight businesses for total cash consideration of $774 million . Technology-based intangible assets
recognized in the amount of $164 million are being amortized on a straight-line basis over a weighted-average useful life of six years. The
Company recorded $62 million related to 10 in-process research and development (IPR&D) projects, which are expected to be completed within
three
years from the acquisition date. The acquired IPR&D will not be amortized until completion, and upon completion, IPR&D projects will be
amortized over their useful lives, which are expected to range between four to nine years. Goodwill recognized in these transactions, of which
$71 million is expected to be deductible for tax purposes, was assigned to the Company’s reportable segments as follows (in millions):
On May 24, 2011 , the Company acquired Atheros Communications, 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 awards with an estimated fair value of $106 million . 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):
F- 28
2012 2011 2010
China
$
7,971
$
4,744
$
3,194
South Korea
4,203
2,887
2,913
Taiwan
2,648
2,550
1,360
United States
967
897
555
Other foreign
3,332
3,879
2,960
$
19,121
$
14,957
$
10,982
Year Ended
September 30,
2012
September 25,
2011
September 26,
2010
Revenues
$
—
$
5
$
9
Income (loss) from discontinued operations
1,203
(507
)
(459
)
Income tax (expense) benefit
(427
)
194
186
Discontinued operations, net of income taxes
$
776
$
(313
)
$
(273
)
QCT
$
366
QTL
22
Nonreportable segments
131
$
519