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0000320193
20101027
10-K
1,074
Gains and losses from these remeasurements were insignificant and have been included in the Company’s results of operations.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,075
Segment Information The Company reports segment information based on the “management” approach.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,076
The management approach designates the internal reporting used by management for making decisions and assessing performance as the source of the Company’s reportable segments.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,077
Information about the Company’s products, major customers and geographic areas on a company-wide basis is also disclosed.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,078
Business Combinations In December 2007, the FASB issued a new accounting standard for business combinations, which established principles and requirements for how an acquirer is to recognize and measure in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interes...
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,079
This new accounting standard also established principles regarding how goodwill acquired in a business combination or a gain from a bargain purchase should be recognized and measured, requiring the capitalization of in-process research and development at fair value and the expensing of acquisition-related costs as incu...
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,080
In April 2009, the FASB amended this new accounting standard to require that assets acquired and liabilities assumed in a business combination that arise from contingencies be recognized at fair value, if the fair value can be determined during the measurement period.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,081
The Company adopted the new business combination accounting standard in the first quarter of 2010 and applied these principles to any business combinations completed in or after the first quarter of 2010.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,082
The adoption of the new business combination accounting standard did not have a material effect on the Company’s financial condition or operating results.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,083
Note 2 - Financial Instruments Cash, Cash Equivalents and Marketable Securities The following table summarizes the fair value of the Company’s cash and available-for-sale securities held in its marketable securities investment portfolio, recorded as cash and cash equivalents or short-term or long-term marketable securi...
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,084
The net unrealized gains as of September 25, 2010 and September 26, 2009 related primarily to long-term marketable securities.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,085
The Company may sell certain of its marketable securities prior to their stated maturities for strategic purposes, in anticipation of credit deterioration, or for duration management.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,086
The Company recognized no significant net realized gains or losses during 2010, 2009 and 2008 related to such sales.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,087
The maturities of the Company’s long-term marketable securities generally range from one year to five years.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,088
The following tables show the gross unrealized losses and fair value for investments in an unrealized loss position as of September 25, 2010 and September 26, 2009, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in millions): The Company cons...
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,089
The unrealized losses on the Company’s marketable securities were caused primarily by changes in market interest rates or widening credit spreads.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,090
The Company typically invests in highly-rated securities, and its policy generally limits the amount of credit exposure to any one issuer.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,091
The Company’s investment policy requires investments to be investment grade, primarily rated single-A or better, with the objective of minimizing the potential risk of principal loss.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,092
Fair values were determined for each individual security in the investment portfolio.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,093
When evaluating the investments for other-than-temporary impairment, the Company reviews factors such as the length of time and extent to which fair value has been below cost basis, the financial condition of the issuer and any changes thereto, and the Company’s intent to sell, or whether it is more likely than not it ...
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,094
During the years ended September 25, 2010 and September 26, 2009, the Company did not recognize any significant impairment charges.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,095
As of September 25, 2010, the Company does not consider any of its investments to be other-than-temporarily impaired.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,096
Derivative Financial Instruments The Company uses derivatives to partially offset its business exposure to foreign currency exchange risk.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,097
The Company may enter into foreign currency forward and option contracts to offset some of the foreign exchange risk of expected future cash flows on certain forecasted revenue and cost of sales, of net investments in certain foreign subsidiaries, and on certain existing assets and liabilities.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,098
To help protect gross margins from fluctuations in foreign currency exchange rates, certain of the Company’s subsidiaries whose functional currency is the U.S. dollar, hedge a portion of forecasted foreign currency revenue.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,099
The Company’s subsidiaries whose functional currency is not the U.S. dollar and who sell in local currencies, may hedge a portion of forecasted inventory purchases not denominated in the subsidiaries’ functional currencies.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,100
The Company typically hedges portions of its forecasted foreign currency exposure associated with revenue and inventory purchases for three to six months.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,101
To help protect the net investment in a foreign operation from adverse changes in foreign currency exchange rates, the Company may enter into foreign currency forward and option contracts to offset the changes in the carrying amounts of these investments due to fluctuations in foreign currency exchange rates.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,102
The Company may also enter into foreign currency forward and option contracts to partially offset the foreign currency exchange gains and losses generated by the re-measurement of certain assets and liabilities denominated in non-functional currencies.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,103
However, the Company may choose not to hedge certain foreign currency exchange exposures for a variety of reasons, including but not limited to immateriality, accounting considerations and the prohibitive economic cost of hedging particular exposures.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,104
There can be no assurance the hedges will offset more than a portion of the financial impact resulting from movements in foreign currency exchange rates.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,105
The Company’s accounting policies for these instruments are based on whether the instruments are designated as hedge or non-hedge instruments.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,106
The Company records all derivatives on the Consolidated Balance Sheets at fair value.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,107
The effective portions of cash flow hedges are recorded in other comprehensive income until the hedged item is recognized in earnings.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,108
The effective portions of net investment hedges are recorded in other comprehensive income as a part of the cumulative translation adjustment.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,109
Derivatives that are not designated as hedging instruments and the ineffective portions of cash flow hedges and net investment hedges are adjusted to fair value through earnings in other income and expense.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,110
The Company had a net deferred loss associated with cash flow hedges of approximately $252 million and a net deferred gain of $1 million, net of taxes, recorded in other comprehensive income as of September 25, 2010 and September 26, 2009, respectively.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,111
Other comprehensive income associated with cash flow hedges of foreign currency revenue is recognized as a component of net sales in the same period as the related revenue is recognized, and other comprehensive income related to cash flow hedges of inventory purchases is recognized as a component of cost of sales in th...
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,112
Substantially all of the Company’s hedged transactions as of September 25, 2010 are expected to occur within six months.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,113
Derivative instruments designated as cash flow hedges must be de-designated as hedges when it is probable the forecasted hedged transaction will not occur in the initially identified time period or within a subsequent two month time period.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,114
Deferred gains and losses in other comprehensive income associated with such derivative instruments are reclassified immediately into earnings through other income and expense.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,115
Any subsequent changes in fair value of such derivative instruments also are reflected in current earnings unless they are re-designated as hedges of other transactions.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,116
The Company did not recognize any significant net gains or losses related to the loss of hedge designation on discontinued cash flow hedges during 2010, 2009 and 2008.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,117
The Company had an unrealized net loss on net investment hedges of $9 million and $2 million, net of taxes, included in the cumulative translation adjustment account of accumulated other comprehensive income (“AOCI”) as of September 25, 2010 and September 26, 2009, respectively.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,118
The ineffective portions and amounts excluded from the effectiveness test of net investment hedges are recorded in current earnings in other income and expense.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,119
The Company recognized in earnings a net loss of $123 million and $133 million on foreign currency forward and option contracts not designated as hedging instruments during the year ended September 25, 2010 and September 26, 2009, respectively.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,120
These amounts represent the net gain or loss on the derivative contracts and do not include changes in the related exposures, which generally offset a portion of the gain or loss on the derivative contracts.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,121
The following table shows the notional principal and credit risk amounts of the Company’s derivative instruments outstanding as of September 25, 2010 and September 26, 2009 (in millions): The notional principal amounts for derivative instruments provide one measure of the transaction volume outstanding and does not rep...
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,122
The credit risk amounts represent the Company’s gross exposure to potential accounting loss on these transactions if all counterparties failed to perform according to the terms of the contract, based on then-current currency exchange rates at each respective date.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,123
The Company’s gross exposure on these transactions may be further mitigated by collateral received from certain counterparties.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,124
The Company’s exposure to credit loss and market risk will vary over time as a function of currency exchange rates.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,125
Although the table above reflects the notional principal and credit risk amounts of the Company’s foreign exchange instruments, it does not reflect the gains or losses associated with the exposures and transactions that the foreign exchange instruments are intended to hedge.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,126
The amounts ultimately realized upon settlement of these financial instruments, together with the gains and losses on the underlying exposures, will depend on actual market conditions during the remaining life of the instruments.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,127
The Company generally enters into master netting arrangements, which reduce credit risk by permitting net settlement of transactions with the same counterparty.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,128
To further limit credit risk, the Company generally enters into collateral security arrangements that provide for collateral to be received or posted when the net fair value of certain financial instruments fluctuate from contractually established thresholds.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,129
The Company presents its derivative assets and derivative liabilities at their gross fair values.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,130
As of September 25, 2010, the Company has posted cash collateral related to the derivative instruments under its collateral security arrangements of $445 million and recorded the offsetting balance as other current assets in the Consolidated Balance Sheet.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,131
The Company did not record any significant amounts of cash collateral related to the derivative instruments under its master netting arrangements as of September 26, 2009.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,132
The Company did not have any derivative instruments with credit risk-related contingent features that would require it to post additional collateral as of September 25, 2010 or September 26, 2009.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,133
The estimates of fair value are based on applicable and commonly used pricing models and prevailing financial market information as of September 25, 2010.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,134
Refer to Note 3, “Fair Value Measurements” of this Form 10-K, for additional information on the fair value measurements for all financial assets and liabilities, including derivative assets and derivative liabilities, that are measured at fair value in the consolidated financial statements on a recurring basis.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,135
The following tables show the Company’s derivative instruments measured at gross fair value as reflected in the Consolidated Balance Sheets as of September 25, 2010 and September 26, 2009 (in millions): (a) All derivative assets are recorded as other current assets in the Consolidated Balance Sheets.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,136
(b) All derivative liabilities are recorded as accrued expenses in the Consolidated Balance Sheets.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,137
The following tables show the pre-tax effect of the Company’s derivative instruments designated as cash flow and net investment hedges in the Consolidated Statements of Operations for the years ended September 25, 2010 and September 26, 2009 (in millions): (a) Includes gains/(losses) reclassified from AOCI into net inc...
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,138
There were no amounts reclassified from AOCI into net income for the effective portion of net investment hedges for the year ended September 25, 2010.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,139
(b) Includes gains/(losses) reclassified from AOCI into net income for the effective portion of cash flow hedges, of which $302 million and $68 million were recognized within net sales and cost of sales, respectively, within the Statement of Operations for the year ended September 26, 2009.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,140
There were no amounts reclassified from AOCI into net income for the effective portion of net investment hedges for the year ended September 26, 2009.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,141
(c) Refer to Note 7, “Shareholders’ Equity and Stock-Based Compensation” of this Form 10-K, which summarizes the activity in accumulated other comprehensive income related to derivatives.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,142
Accounts Receivable Trade Receivables The Company distributes its products through third-party cellular network carriers, wholesalers, retailers and value-added resellers and directly to certain education, consumer and enterprise customers.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,143
The Company generally does not require collateral from its customers; however, the Company will require collateral in certain instances to limit credit risk.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,144
In addition, when possible, the Company attempts to limit credit risk on trade receivables with credit insurance for certain customers in Latin America, Europe, Asia, and Australia, or by requiring third-party financing, loans or leases to support credit exposure.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,145
These credit-financing arrangements are directly between the third-party financing company and the end customer.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,146
As such, the Company generally does not assume any recourse or credit risk sharing related to any of these arrangements.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,147
However, considerable trade receivables not covered by collateral, third-party financing arrangements, or credit insurance are outstanding with the Company’s third-party cellular network carriers, wholesalers, retailers and value-added resellers.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,148
Trade receivables from two of the Company’s customers accounted for 15% and 12% of trade receivables as of September 25, 2010 and one of the Company’s customers accounted for 16% of trade receivables as of September 26, 2009.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,149
The Company’s cellular network carriers accounted for 64% and 51% of trade receivables as of September 25, 2010 and as of September 26, 2009, respectively.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,150
The additions and write-offs to the Company’s allowance for doubtful accounts during 2010, 2009 and 2008 were not significant.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,151
Vendor Non-Trade Receivables The Company has non-trade receivables from certain of its manufacturing vendors resulting from the sale of components to these manufacturing vendors who manufacture sub-assemblies or assemble final products for the Company.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,152
The Company purchases these components directly from suppliers.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,153
Vendor non-trade receivables from two of the Company’s vendors accounted for 57% and 24%, respectively, of non-trade receivables as of September 25, 2010 and two of the Company’s vendors accounted for 40% and 36%, respectively, of non-trade receivables as of September 26, 2009.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,154
The Company does not reflect the sale of these components in net sales and does not recognize any profits on these sales until the related products are sold by the Company, at which time any profit is recognized as a reduction of cost of sales.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,155
Note 3 - Fair Value Measurements The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,156
When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricin...
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,157
The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1 - Quoted prices in active markets fo...
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,158
Level 2 - Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset...
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,159
Level 3 - Inputs that are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,160
The Company’s valuation techniques used to measure the fair value of money market funds and certain marketable equity securities were derived from quoted prices in active markets for identical assets or liabilities.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,161
The valuation techniques used to measure the fair value of all other financial instruments, all of which have counterparties with high credit ratings, were valued based on quoted market prices or model driven valuations using significant inputs derived from or corroborated by observable market data.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,162
Assets/Liabilities Measured at Fair Value on a Recurring Basis The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis as of September 25, 2010 and September 26, 2009 (in millions): (a) The total fair value amounts for assets and liabilities also represent the relat...
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,163
The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring basis as presented in the Company’s Consolidated Balance Sheet as of September 25, 2010 and September 26, 2009 (in millions): (a) The total fair value amounts for assets and liabilities also represent the related c...
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,164
Note 4 - Consolidated Financial Statement Details The following tables show the Company’s consolidated financial statement details as of September 25, 2010 and September 26, 2009 (in millions): Property, Plant and Equipment Accrued Expenses Non-Current Liabilities Note 5 - Goodwill and Other Intangible Assets The Compa...
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,165
The following table summarizes the components of gross and net intangible asset balances as of September 25, 2010 and September 26, 2009 (in millions): During 2010, the Company completed various business acquisitions for an aggregate cash consideration, net of cash acquired, of $638 million, of which $535 million was a...
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,166
The Company’s gross carrying amount of goodwill was $741 million and $206 million as of September 25, 2010 and September 26, 2009, respectively.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,167
The Company did not have any goodwill impairment during 2010, 2009 or 2008.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,168
The Company’s goodwill is allocated primarily to the America’s reportable operating segment.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,169
Amortization expense related to acquired intangible assets was $69 million, $53 million and $46 million in 2010, 2009 and 2008, respectively.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,170
As of September 25, 2010 and September 26, 2009, the weighted-average amortization period for acquired intangible assets was 5.5 years and 7.2 years, respectively.
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,171
Expected annual amortization expense related to acquired intangible assets as of September 25, 2010, is as follows (in millions): Note 6 - Income Taxes The provision for income taxes for the three years ended September 25, 2010, consisted of the following (in millions): The foreign provision for income taxes is based o...
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,172
The Company’s consolidated financial statements provide for any related tax liability on amounts that may be repatriated, aside from undistributed earnings of certain of the Company’s foreign subsidiaries that are intended to be indefinitely reinvested in operations outside the U.S. As of September 25, 2010, U.S. incom...
0001193125-10-238044/full-submission.txt
0000320193
20101027
10-K
1,173
The amount of unrecognized deferred tax liability related to these temporary differences is estimated to be approximately $4.0 billion.
0001193125-10-238044/full-submission.txt