QUALCOMM Incorporated Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Composition of Certain Financial Statement Items

Composition of Certain Financial Statement Items

9 Months Ended

Jun. 29, 2014

Notes to Financial Statements [Abstract]

Note 2 - Composition of Certain Financial Statement Items

Note 2 — Composition of Certain Financial Statement Items



Inventories (in millions)
	June 29, 2014		September 29, 2013
Raw materials	$	2	$	2
Work-in-process	480		631
Finished goods	703		669
	$	1,185	$	1,302



Property, Plant and Equipment (in millions)
	June 29, 2014			September 29, 2013
Land	$	220		$	212
Buildings and improvements	1,587			1,733
Computer equipment and software	1,534			1,425
Machinery and equipment	2,200			2,013
Furniture and office equipment	88			87
Leasehold improvements	245			218
Construction in progress	196			480
	6,070			6,168
Less accumulated depreciation and amortization	(3,515		)	(3,173		)
	$	2,555		$	2,995

During the first quarter of fiscal 2014, as a result of discussions with potential buyers and consideration of alternative uses for the separate asset groups that comprise one of the QMT division’s manufacturing facilities in Taiwan, the Company decreased its estimates of expected cash flows from those assets and recorded an impairment charge of $444 million in other expenses. The Company concluded that a triggering event had not occurred in the first quarter of fiscal 2014 that would have required impairment testing for its remaining QMT assets, including goodwill, as QMT’s licensing business plan did not utilize this manufacturing facility. During the third quarter of fiscal 2014, the Company updated QMT’s licensing business plan and related internal forecasts to reflect a decrease in expected cash flows. The updated business plan reflects an acceleration of the Company’s plans to transition from QMT’s current generation technology to the licensing of its next generation IMOD display technology and to focus on wearable devices. QMT will continue to make and sell current generation products for a period of time in support of certain existing customer requirements. As a result of this triggering event, the Company assessed the recoverability of the QMT division’s long-lived assets, performed a goodwill impairment test of the QMT reporting unit and recorded impairment charges of $64 million on long-lived assets and $100 million on goodwill in other expenses in the third quarter of fiscal 2014. At June 29, 2014, the carrying values of the QMT division’s goodwill and property, plant and equipment were $35 million and $162 million, respectively, including $44 million in property, plant and equipment that was classified as held for sale and included in other assets.



Other Current Liabilities (in millions)
	June 29, 2014		September 29, 2013
Customer incentives and other customer-related liabilities	$	2,111	$	1,706
Other	565		613
	$	2,676	$	2,319