EXHIBIT 99.1
QUALCOMM Contact:
Bill Davidson
Vice President, Investor Relations
1-(858) 658-1818 (ph) 1-(858) 651-9303 (fax)
e-mail: ir@qualcomm.com
QUALCOMM ANNOUNCES FOURTH QUARTER AND FISCAL 2003 RESULTS
FY2003 REVENUES $4.0 BILLION, EPS $1.01
FY2003 REVENUES $3.8 BILLION, EPS $1.42 EXCLUDING QSI SEGMENT
SAN DIEGO - November 5, 2003 - QUALCOMM Incorporated (NASDAQ: QCOM) today
announced its fourth quarter and fiscal 2003 results ended September 28, 2003.
Revenues were $909 million in the fourth fiscal quarter, up 4 percent
year-over-year. Fourth quarter net income was $291 million and earnings per
share were $0.35, up 53 percent and 52 percent year-over-year, respectively.
Revenues were $4.0 billion in fiscal 2003, up 31 percent compared to fiscal
2002. Fiscal 2003 earnings were $827 million and earnings per share were $1.01,
both up 130 percent compared to fiscal 2002.
Revenues excluding the QUALCOMM Strategic Initiatives (QSI) segment were $870
million in the fourth fiscal quarter, up 4 percent year-over-year. Fourth
quarter net income excluding the QSI segment was $236 million and earnings per
share were $0.29, down 5 percent and 6 percent year-over-year, respectively. In
fiscal 2003, revenues excluding the QSI segment were $3.8 billion, up 32 percent
compared to fiscal 2002. Fiscal 2003 net income excluding the QSI segment was
$1.2 billion and earnings per share were $1.42, up 46 percent and 45 percent,
respectively, compared to fiscal 2002. Detailed reconciliations between total
QUALCOMM results and results excluding QSI are included at the end of this news
release. Prior period reconciliations are presented on our Investor Relations
web page at www.qualcomm.com.
"The employees of QUALCOMM have delivered an outstanding year of exceptional
performance both in financial results and in advancing wireless services and
their usefulness to consumers and businesses around the world," said Dr. Irwin
Mark Jacobs, chairman and CEO of QUALCOMM. "Among the many accomplishments was
the shipment of our billionth chip, demonstrating our continued leadership
position in the development and on-time delivery of CDMA chipsets. We are
reducing costs for our customers by leading the industry in integrating software
and multimode, multifrequency, and multinetwork capabilities into our CDMA
products. Nearly all of our chipset shipments are enabling third generation
services for 61 wireless operators in 31 countries, and these
- -more-
QUALCOMM Announces Fourth Quarter and Fiscal 2003 Results Page 2 of 19
3G voice and data services are now being rapidly accepted and enjoyed by over 65
million subscribers. Introduction of very high-speed 1xEV-DO by operators in
South Korea and the United States has opened new service applications for
consumers and businesses and many CDMA operators around the world are
considering deploying this technology. China Unicom recently concluded its first
phase of the GSM1x trial which included successful testing of the world's first
GSM and CDMA2000 multimode handset. We expect to see increased royalty revenue
with the deployment of WCDMA beginning to ramp, and are also well positioned to
win a significant share of the WCDMA chip business and further expand the BREW
footprint. BREW has already been adopted by 10 wireless operators in seven
countries, and consumers have completed over 50 million downloads of BREW
applications developed by the BREW global developer community."
"In 2004, we look forward to the world continuing its migration to the most
economic wireless platform, CDMA. As additional operators launch CDMA2000 1X and
1xEV-DO and WCDMA, there will be an ever increasing need for multimode multiband
handsets to enable true global roaming. In response to market demands, we plan
to significantly increase our R&D spending and build on our innovations
delivering the most cost effective and integrated CDMA-based products."
"As a result of our performance and strong cash position, during fiscal 2003 we
initiated a $1 billion stock repurchase program, paid our first quarterly
dividend, and in the fourth quarter we increased the quarterly dividend.
QUALCOMM remains well positioned to grow earnings and revenue with its large
technology portfolio and strong balance sheet." Dr. Jacobs said.
Research and development (R&D) expenses were $143 million in the fourth fiscal
quarter, up 30 percent year-over-year. The increase in R&D expenses compared to
the year ago quarter was primarily related to continued new product development
efforts.
Selling, general and administrative (SG&A) expenses were relatively flat in the
fourth fiscal quarter compared to the year ago quarter, increasing 1 percent to
$134 million.
Our fiscal 2003 effective income tax rate was approximately 36 percent, compared
to 22 percent in fiscal 2002. The lower tax rate in fiscal 2002 was primarily
due to the reduction of valuation allowances in fiscal 2002 that were previously
charged to tax expense. The effective income tax rate in the fourth quarter
was 6%
QUALCOMM Announces Fourth Quarter and Fiscal 2003 Results Page 3 of 19
mainly as a result of tax losses relating to Brazilian investments and
operations. Excluding the QSI segment, our fiscal 2003 effective tax rate was 33
percent, compared to 35 percent in fiscal 2002. The lower rate was caused by
higher foreign earnings which are subject to a lower tax rate.
QUALCOMM STRATEGIC INITIATIVES
The QUALCOMM Strategic Initiatives (QSI) segment includes our strategic
investments and related income and expenses. Vesper losses before taxes were $28
million in the fourth fiscal quarter compared to $42 million in the year ago
quarter. The remainder of the net loss before taxes in QSI was $14 million for
the fourth fiscal quarter compared to $56 million in the year ago quarter. The
net loss in the fourth quarter of fiscal 2003 included $27 million of
other-than-temporary losses on investments and $16 million in equity losses,
partially offset by $32 million in net realized gains on investment sales.
On September 25, 2003, Embratel Participacoes S.A. (Embratel) entered into an
agreement to acquire from us for nominal consideration the Vesper Operating
Companies (the Embratel sale transaction) excluding the tower and rooftop
antennae assets and related property leases (Tower Sites). Concurrent with the
closing, Vesper will enter into a multi-year arrangement whereby it pays a
monthly fee to us to use the Tower Sites. The sum of these fees, net of certain
pass through expenses, is expected to exceed $77 million over the life of the
arrangement. The closing of the Embratel sale transaction is contingent upon a
number of events being completed prior to or concurrent with closing, including
regulatory approval. Assuming the requisite government approvals are received
and all conditions to close are satisfied, we anticipate providing approximately
$40 million to $45 million in aggregate funding (including $6 million of interim
funding) by the closing date to facilitate the Embratel sale transaction. We
expect to record an approximate $35 million to $45 million loss if and when the
transaction closes, including the recognition of cumulative foreign translation
losses.
BUSINESS OUTLOOK
The following statements are forward-looking and actual results may differ
materially. Please see Note Regarding Forward-Looking Statements at the end of
this news release for a description of certain risk factors and QUALCOMM's
annual and quarterly reports on file with the Securities and Exchange Commission
(SEC) for a more complete description of risks.
QUALCOMM Announces Fourth Quarter and Fiscal 2003 Results Page 4 of 19
FIRST QUARTER FISCAL 2004
- Based on the current business outlook, we anticipate that
revenues excluding the QSI segment in the first fiscal quarter
will increase sequentially by approximately 16-22 percent and
decrease year-over-year by approximately 1-6 percent. We
anticipate that earnings per share excluding the QSI segment
will be approximately $0.37-$0.40 in the first fiscal quarter,
compared to $0.42 in the year ago quarter. This estimate
assumes shipments of approximately 27-28 million MSM phone
chips during the quarter. We expect approximately 106 - 108
million CDMA phones to be sold in calendar 2003.
- Based on the current business outlook, we anticipate that
total QUALCOMM revenues in the first quarter will increase
sequentially by approximately 14-20 percent and decrease
year-over-year 1-5 percent. We anticipate that total QUALCOMM
earnings per share will be approximately $0.25-$0.28 in the
first fiscal quarter, including an estimated $0.12 loss per
share attributed to the QSI segment, compared to $0.13 per
share in the year ago quarter. Due to their nature, certain
income and expense items such as realized gains or losses,
gains or losses on derivatives, income related to the use of
our FCC Auction Discount Voucher and asset impairments cannot
be accurately forecast. Accordingly, the Company excludes such
items from its business outlook, and actual results may vary
materially from the business outlook if the Company incurs any
such income or expense items.
FISCAL 2004
- Based on the current business outlook, we anticipate that
revenues excluding the QSI segment will grow by approximately
5-9 percent year-over-year and earnings per share excluding
the QSI segment to be in the range of $1.37-$1.43 for fiscal
2004, compared to $1.42 last fiscal year. We anticipate the
combination of R&D and SG&A expenses to grow approximately
18-20 percent year-over-year, primarily to serve the expanding
market for CDMA2000 and WCDMA chipsets. We estimate the CDMA
phone market to be 131-136 million units in calendar 2004, and
we estimate a decrease of approximately 8 percent in average
selling prices of CDMA phones for fiscal 2004, upon which
royalties are calculated, compared to an estimated decrease in
fiscal 2003 of 2 percent.
- Based on the current business outlook, we anticipate that
total QUALCOMM revenues will grow by approximately 3-7 percent
year-over-year and total QUALCOMM earnings per share to be in
the range of $1.17-$1.23 for fiscal 2004, up 16-22 percent
year-over-
QUALCOMM Announces Fourth Quarter and Fiscal 2003 Results Page 5 of 19
year, including an estimated $0.20 loss per share attributed
to the QSI segment. Due to their nature, certain income and
expense items such as realized gains or losses, gains or
losses on derivatives, income related to the use of our FCC
Auction Discount Voucher and asset impairments cannot be
accurately forecast. Accordingly, the Company excludes such
items from its business outlook, and actual results may vary
materially from the business outlook if the Company incurs any
such income or expense items.
CASH AND MARKETABLE SECURITIES
QUALCOMM's cash, cash equivalents and marketable securities totaled
approximately $5.4 billion at the end of the fourth quarter of fiscal 2003,
compared to $5.0 billion on June 29, 2003 and $3.2 billion on September 29,
2002. We have invested $158 million in net stock repurchases and have paid $135
million in cash dividends since the inception of these programs in February
2003. In fiscal 2003, QSI generated net cash of $634 million. Detailed
reconciliations between total QUALCOMM cash and cash equivalents and cash and
cash equivalents including marketable securities and excluding the QSI segment
are included at the end of this news release.
QUALCOMM Announces Fourth Quarter and Fiscal 2003 Results Page 6 of 19
RESULTS OF BUSINESS SEGMENTS
THE FOLLOWING TABLES PRESENT SEGMENT INFORMATION (IN THOUSANDS):
FOURTH QUARTER - FISCAL YEAR 2003
RECONCILING ITEMS QUALCOMM TOTAL
SEGMENTS QCT QTL QWI (1) EXCLUDING QSI QSI QUALCOMM
- ----------------------------------------------------------------------------------------------------------------------------------
REVENUES 504,400 242,184 143,284 (19,501) 870,367 38,449 908,816
CHANGE FROM PRIOR QUARTER (9%) 0% 26% N/M (2%) 27% (1%)
CHANGE FROM PRIOR YEAR 4% (1%) 31% N/M 4% 12% 4%
EARNINGS (LOSS) BEFORE TAXES 121,808 212,657 10,649 7,262 352,376 (41,845) 310,531
CHANGE FROM PRIOR QUARTER (25%) (3%) 66% N/M (11%) (52%) (16%)
CHANGE FROM PRIOR YEAR (23%) (4%) N/M N/M (8%) 57% 36%
TAX RATES 33% 232% 6%
NET INCOME 236,092 55,310 291,402
CHANGE FROM PRIOR QUARTER (11%) N/M 52%
CHANGE FROM PRIOR YEAR (5%) N/M 53%
DILUTED NET EARNINGS PER COMMON SHARE (3) 0.29 0.07 0.35
CHANGE FROM PRIOR QUARTER (12%) N/M 52%
CHANGE FROM PRIOR YEAR (6%) N/M 52%
THIRD QUARTER - FISCAL YEAR 2003
RECONCILING ITEMS QUALCOMM TOTAL
SEGMENTS QCT QTL QWI (1) EXCLUDING QSI QSI QUALCOMM
- ----------------------------------------------------------------------------------------------------------------------------------
REVENUES 557,240 242,479 113,882 (22,334) 891,267 30,341 921,608
EARNINGS (LOSS) BEFORE TAXES 163,114 218,363 6,396 10,181 398,054 (27,563) 370,491
TAX RATES 33% (172%) 48%
NET INCOME (LOSS) 266,697 (75,008) 191,689
DILUTED NET EARNINGS (LOSS) PER COMMON SHARE (3) 0.33 (0.09) 0.23
FOURTH QUARTER - FISCAL YEAR 2002
RECONCILING ITEMS QUALCOMM
SEGMENTS QCT QTL QWI (1) EXCLUDING QSI
- --------------------------------------------------------------------------------------------------------------
REVENUES 483,617 243,481 109,542 3,031 839,671
EARNINGS (LOSS) BEFORE TAXES 158,334 221,500 (1,196) 5,395 384,033
TAX RATES 35%
NET INCOME (LOSS) 249,621
DILUTED NET EARNINGS (LOSS) PER COMMON SHARE (3) 0.31
GOODWILL
AMORTIZATION AND TOTAL
SEGMENTS QSI OTHER (2) QUALCOMM
- ---------------------------------------------------------------------------------------
REVENUES 34,215 - 873,886
EARNINGS (LOSS) BEFORE TAXES (97,737) (57,219) 229,077
TAX RATES 98% 0% 17%
NET INCOME (LOSS) (1,955) (57,384) 190,282
DILUTED NET EARNINGS (LOSS) PER COMMON SHARE (3) - (0.07) 0.23
TWELVE MONTHS - FISCAL YEAR 2003
RECONCILING ITEMS
SEGMENTS QCT QTL QWI (1)
- -------------------------------------------------------------------------------------------------------
REVENUES 2,424,194 1,000,196 485,466 (63,480)
CHANGE FROM PRIOR YEAR 52% 18% 11% N/M
EARNINGS (LOSS) BEFORE TAXES 796,724 896,621 27,176 12,860
CHANGE FROM PRIOR YEAR 81% 19% 387% N/M
TAX RATES
NET INCOME (LOSS)
CHANGE FROM PRIOR YEAR
DILUTED NET EARNINGS (LOSS) PER COMMON SHARE (3)
CHANGE FROM PRIOR YEAR
QUALCOMM TOTAL
SEGMENTS EXCLUDING QSI QSI QUALCOMM
- -------------------------------------------------------------------------------------------
REVENUES 3,846,376 124,260 3,970,636
CHANGE FROM PRIOR YEAR 32% (2%) 31%
EARNINGS (LOSS) BEFORE TAXES 1,733,381 (448,234) 1,285,147
CHANGE FROM PRIOR YEAR 42% 12% 179%
TAX RATES 33% 26% 36%
NET INCOME (LOSS) 1,161,365 (333,924) 827,441
CHANGE FROM PRIOR YEAR 46% (85%) 130%
DILUTED NET EARNINGS (LOSS) PER COMMON SHARE (3) 1.42 (0.41) 1.01
CHANGE FROM PRIOR YEAR 45% (86%) 130%
TWELVE MONTHS - FISCAL YEAR 2002
RECONCILING ITEMS QUALCOMM
SEGMENTS QCT QTL QWI (1) EXCLUDING QSI
- ---------------------------------------------------------------------------------------------------------------------
REVENUES 1,590,829 847,092 438,682 36,337 2,912,940
EARNINGS (LOSS) BEFORE TAXES 440,523 756,173 (9,467) 33,887 1,221,116
TAX RATES 35%
NET INCOME (LOSS) 793,725
DILUTED NET EARNINGS (LOSS) PER COMMON SHARE (3) 0.98
GOODWILL
AMORTIZATION AND TOTAL
SEGMENTS QSI OTHER (2) QUALCOMM
- -----------------------------------------------------------------------------------------
REVENUES 126,477 143 3,039,560
EARNINGS (LOSS) BEFORE TAXES (506,978) (253,013) 461,125
TAX RATES 64% 0% 22%
NET INCOME (LOSS) (180,325) (253,723) 359,677
DILUTED NET EARNINGS (LOSS) PER COMMON SHARE (3) (0.22) (0.31) 0.44
QUALCOMM Announces Fourth Quarter and Fiscal 2003 Results Page 7 of 19
(1) Reconciling items related to revenues consist primarily of other
non-reportable segment revenues less intersegment eliminations. Reconciling
items related to earnings before taxes consist primarily of corporate
expenses, charges that are not allocated to the segments for management
reporting purposes, unallocated net investment income, non-reportable
segment results, interest expense and the elimination of intercompany
profit.
(2) Starting in fiscal 2003, the Company no longer records goodwill
amortization, in accordance with Financial Accounting Standards No. 142. In
the fourth quarter of fiscal 2002, goodwill amortization and other
adjustments included $61.5 million of amortization of goodwill, $3.2 million
of amortization of intangible assets, $0.5 million of payroll expenses on
stock option exercises, $0.2 million in cost of revenues related to the sale
of the terrestrial-based CDMA wireless infrastructure business, offset by
$7.3 million of credits and $0.9 million of credits related to the reduction
of reserves established in connection with the Globalstar business In fiscal
2002, goodwill amortization and other adjustments included $245.3 million of
amortization of goodwill, $13.3 million of amortization of intangible
assets, $5.9 million of payroll expenses on stock option exercises, offset
by $7.4 million of selling, general and administrative credits and $0.1
million of revenue related to the sale of the terrestrial-based CDMA
wireless infrastructure business and $4.0 million of credits related to the
reduction of reserves established in connection with the Globalstar
business. With the adoption of FAS 142 in 2003 and given the immateriality
of the other adjustments, the Company no longer makes these adjustments to
its results excluding QSI in fiscal 2003.
(3) The sum of the earnings per share amounts may not equal total earnings per
share due to rounding.
N/M - Not Meaningful
BUSINESS SEGMENT HIGHLIGHTS
QUALCOMM CDMA TECHNOLOGIES (QCT)
- Announced that the Company has shipped one billion chips since
its first commercial CDMA solution was provided to wireless
handset customers and infrastructure providers in 1994. Today,
QUALCOMM supports more than 50 device manufacturers and
provides 16 different chipset offerings.
- Shipped approximately 20 million MSM(TM) phone chips, 98
percent of which were 3G CDMA2000(R) 1X and 1xEV-DO, to
customers worldwide during the fourth fiscal quarter, compared
to approximately 23 million shipped in the third fiscal
quarter and approximately 20 million units shipped in the year
ago quarter. This brings the total number of MSM phone chips
shipped during fiscal 2003 to approximately 99 million,
compared to 65 million chips shipped in the prior fiscal year.
- Shipped CSM infrastructure chips for 3G CDMA2000 1X and
1xEV-DO to support more than 2.5 million equivalent voice
channels, compared to 2.2 million in the third fiscal quarter
and approximately 2.5 million in the year ago quarter.
Equivalent voice channels are provided rather than actual chip
shipments because our CSM infrastructure chips currently
support from eight to 32 voice channels per chip.
- Announced our participation in a number of successful WCDMA
(UMTS) field trials in operators' networks in Asia, Europe and
North America, marking a significant step toward WCDMA (UMTS)
network commercialization. This important milestone, based on
field trials conducted jointly with numerous worldwide
operators, proves that users
QUALCOMM Announces Fourth Quarter and Fiscal 2003 Results Page 8 of 19
can experience continuous service between 3G and 2G networks
for voice and packet data service.
- Announced on-time sampling to customers of the MSM6250(TM)
chipset and system software supporting GSM, GPRS and WCDMA
(UMTS). The MSM6250 chipset represents QUALCOMM's third WCDMA
(UMTS) chipset, a single-chip solution that includes all the
advanced multimedia capabilities of the Launchpad(TM) suite of
applications on QUALCOMM's proven modem platform, reducing
manufacturer's development cycle and promoting faster
time-to-market.
- Announced the CSM6800(TM) and the MSM6800(TM) chipset and
system software solution for the wireless technology standard
CDMA2000 1xEV-DO Revision A. The highly integrated 6800
chipsets will provide cost-competitive solutions for both
infrastructure and multimedia-enabled devices.
- Announced the MSM6150(TM) chipset for CDMA2000 1X and the
MSM6550(TM) chipset for CDMA2000 1X, 1xEV-DO and multimode
GSM/GPRS. These chipsets, which support QUALCOMM's BREW(TM)
system, offer significantly increased processing speeds along
with dedicated hardware cores supporting higher resolution
video and graphics and extended usage times for gaming and
video applications.
- Announced the on-time sampling of the MSM6025(TM) chipset and
system software solution to support data-enabled, entry-level
devices for emerging CDMA2000 1X markets worldwide.
QUALCOMM TECHNOLOGY LICENSING (QTL)
- Signed a total of 34 CDMA license agreements during fiscal
2003, including 22 new licenses and 12 amendments to existing
license agreements. These royalty-bearing license agreements
enable manufacturers to develop, make and sell products based
on QUALCOMM's extensive CDMA patent portfolio.
- Reported that licensees around the world are participating in
the growing 3G CDMA market:
- Forty subscriber licensees reported sales of
CDMA2000 1X products and nine subscriber
licensees reported sales of WCDMA products
through the fourth fiscal quarter.
- Fifteen infrastructure licensees reported
sales of CDMA2000 1X products and eight
infrastructure licensees reported sales of
WCDMA products through the fourth fiscal
quarter.
QUALCOMM Announces Fourth Quarter and Fiscal 2003 Results Page 9 of 19
- WCDMA royalties contributed approximately 10 percent
of total royalties reported by licensees in the
September quarter for shipments in the June quarter.
QUALCOMM WIRELESS & INTERNET GROUP (QWI)
QUALCOMM Internet Services (QIS)
- Telefonica Moviles (TEM) Peru, a leading communications
provider in South America, signed a definitive agreement for
TEM Peru to deploy downloadable wireless applications and
services based on the BREW system.
- Reliance Infocomm Limited, a company promoted by Reliance
Industries Limited, India's largest private-sector enterprise,
signed a definitive agreement to launch services based on
BREW.
- A number of European developers announced their support for
BREW, including Digital Bridges, iFone, Macrospace and Mobile
Scope AG. Also enabling the global reach of BREW - Summus and
KTF announced their participation in the BREW Global Publisher
program. BREW Global Publishers are authorized by QUALCOMM to
publish, market and distribute BREW-enabled applications from
developers throughout the world.
- China Unicom expanded CDMA2000 1X commercial BREW-enabled
services. More than 14 BREW-enabled handsets are available in
China from companies like Daxian, Kyocera, LG Electronics,
Samsung, Soutec and Tianjin SANYO. Also, announced China
Unicom used Kyocera's BREW-based KZ850 handset for the
operator's GSM1x trial.
- Wireless subscribers downloaded in excess of 38 million BREW
applications in fiscal 2003 versus 13 million in fiscal 2002.
There were 10 commercial BREW carriers at the end of fiscal
2003 versus three at end of fiscal 2002.
QUALCOMM WIRELESS BUSINESS SOLUTIONS(R)(QWBS)
- Shipped approximately 10,100 OmniTRACS units and related
products in the fourth quarter of fiscal 2003, compared to
approximately 8,400 in the third quarter and 15,000 in the
year ago quarter. This brings the number of OmniTRACS and
related product shipments during fiscal 2003 to over 37,500
units and a cumulative total of nearly 489,000 units shipped
worldwide.
- Announced together with CardioNet, a provider of mobile
outpatient cardiac telemetry technology and services, that
CardioNet's cardiac monitoring service has been enabled with
QUALCOMM Announces Fourth Quarter and Fiscal 2003 Results Page 10 of 19
QUALCOMM's CDMA technology and wireless networking services.
QUALCOMM is providing the QConnect wireless network management
service to provide connectivity between the CardioNet mobile
monitoring devices and the CardioNet Monitoring Center.
- Announced the purchase of assets from Alcatel Mobicom, a
mobile satellite data communications systems and services
provider for the European trucking market and part of Alcatel
Space. QUALCOMM Wireless Business Solutions Europe,
headquartered in the Netherlands, will now service and support
the customer base of Alcatel Mobicom. With this acquisition,
QUALCOMM Wireless Business Solutions Europe becomes one of the
largest providers of fleet management solutions across Europe.
- Began shipping our new GlobalTRACS(R) equipment management
system, a fully-integrated mobile data solution for the
construction industry. The GlobalTRACS system includes
ruggedized hardware, network management services, web-based
software, and data integration, and it provides wireless
access to equipment operating data and location, regardless of
equipment type or manufacturer.
QUALCOMM DIGITAL MEDIA (QDM)
- Announced that QUALCOMM has sold its equity interest in
Technicolor Digital Cinema (TDC) to Thomson, the parent
company of Technicolor, a move that results in sole Thomson
ownership of the venture. The agreement allows both entities
to leverage TDC's successful systems and service model while
enabling each to focus on their respective core businesses;
Technicolor in servicing the digital cinema needs of its
customers and QUALCOMM in developing and producing innovative
digital cinema technology and products.
CONFERENCE CALL
QUALCOMM's fourth quarter and fiscal 2003 earnings conference call will be
broadcast live on November 5, 2003 beginning at 3:00 p.m. Pacific Standard Time
on the Company's web site at: www.qualcomm.com. This conference call may contain
forward-looking financial information. The conference call will include a
discussion of "non-GAAP financial measures" as that term is defined in
Regulation G. The most directly comparable GAAP financial measures and
information reconciling these non-GAAP financial measures to the Company's
financial results prepared in accordance with GAAP, as well as the other
material financial and statistical information to be discussed in the conference
call, will be posted on the Company's Investor Relations web site at
www.qualcomm.com immediately prior to commencement of the call. A taped audio
replay will
QUALCOMM Announces Fourth Quarter and Fiscal 2003 Results Page 11 of 19
be available via telephone on November 5, 2003 beginning at
approximately 4:30 p.m. (PST) through November 10, 2003 at 4:30 p.m. (PST). To
listen to the replay, U.S. callers may dial (800) 633-8284 and international
callers may dial (402) 977-9140. U.S. and international callers should use
reservation number 21153026. An audio replay of the conference call will be
available on the Company's web site at www.qualcomm.com for two weeks following
the live call.
QUALCOMM Incorporated (www.qualcomm.com) is a leader in developing and
delivering innovative digital wireless communications products and services
based on the Company's CDMA digital technology. Headquartered in San Diego,
Calif., QUALCOMM is included in the S&P 500 Index and is a 2003 FORTUNE 500(R)
company traded on The Nasdaq Stock Market(R) under the ticker symbol QCOM.
NOTE REGARDING USE OF NON-GAAP FINANCIAL MEASURES
The Company presents financial information excluding the QUALCOMM Strategic
Initiatives (QSI) segment to facilitate evaluation by management, investors and
analysts of its ongoing core operating businesses, including QUALCOMM CDMA
Technologies (QCT), QUALCOMM Technology Licensing (QTL) and QUALCOMM Wireless &
Internet (QWI). QSI results relate to strategic investments for which the
Company has exit strategies of varying durations. Management believes that the
information excluding QSI presents a more representative measure of the
operating and liquidity performance of the Company because it excludes the
effect of fluctuations in value of investments that are unrelated to the
Company's operational performance.
The Company presents cash flow information excluding QSI and including
marketable securities. The Company's management uses this non-GAAP presentation
to analyze increases and decreases in certain of its liquid assets, comprised of
cash, cash equivalents and marketable securities. Management views certain
marketable debt securities as liquid assets available to fund operations, which
result from cash management strategies designed to increase yields. However,
these instruments do not meet the definition of cash equivalents in accordance
with Statement of Financial Standards No. 95, "Statement of Cash Flows" and must
be excluded from the GAAP statements of cash flows. Since the GAAP statements of
cash flows reconcile the Company's beginning and ending cash and cash
equivalents balances, the purchases and sales of marketable securities are
presented as inflows and outflows. For internal analysis of the Company's cash
position, management does not view these transactions as inflows and outflows
from the business, but as cash
QUALCOMM Announces Fourth Quarter and Fiscal 2003 Results Page 12 of 19
management transactions. If required, such investments could be settled
relatively quickly as additional cash resources are needed. The Company believes
that this non-GAAP presentation is a helpful measure of the Company's liquidity.
The financial information excluding QSI should be considered in addition, not as
a substitute for, or superior to, financial measures calculated in accordance
with GAAP. Reconciliations between total QUALCOMM results and results excluding
QSI and between total QUALCOMM cash flow and cash, cash equivalents and
marketable securities excluding the QSI segment are presented herein.
NOTE REGARDING FORWARD-LOOKING STATEMENTS
In addition to the historical information contained herein, this news release
contains forward-looking statements that are subject to risks and uncertainties.
Actual results may differ substantially from those referred to herein due to a
number of factors, including but not limited to risks associated with: changing
global economic conditions, particularly in the telecommunications and
Internet-related industries and the resulting uncertainty in forecasting future
results; timing and receipt of license fees and royalties; integrated circuit
inventory and order levels; the Company's ability to execute additional 3G
licenses; the scale-up, acceptance and operations of CDMA systems, including
CDMA2000 1xEV-DO and systems in new markets such as China and India; the ability
to sustain or improve operational efficiency and profitability; decreases in the
rate of growth in CDMA-based wireless data and Internet access or the CDMA
subscriber population; strategic investments, loans, acquisitions or
divestitures the Company has or may pursue; the successful close of the Embratel
sale transaction; changes in the fair values of marketable securities and
derivative instruments held; the development, deployment and commercial
acceptance of evolving CDMA technology standards; developments in current or
future litigation; customer receivables and performance guarantees; component
shortages; and international business activities, as well as the other risks
detailed from time-to-time in the Company's SEC reports.
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QUALCOMM(R), QCT(R) QUALCOMM Wireless Business Solutions(R), OmniTRACS(R),
GlobalTRACS(R), MSM(TM), CSM(TM), CSM6800(TM), MSM6025(TM), MSM6150(TM),
MSM6250(TM), MSM6500(TM), MSM6550(TM), MSM6800(TM), Launchpad(TM) and BREW(TM)
are trademarks and/or service marks of QUALCOMM Incorporated. All other
trademarks are the property of their respective owners.
QUALCOMM Announces Fourth Quarter and Fiscal 2003 Results Page 13 of 19
QUALCOMM INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THIS SCHEDULE IS TO ASSIST THE READER IN RECONCILING FROM
RESULTS EXCLUDING QSI TO TOTAL QUALCOMM RESULTS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 28, 2003
--------------------------------------------------
TOTAL
EXCLUDING QSI QSI QUALCOMM
------------- --- --------
Revenues:
Equipment and services $617,792 $ 38,449 $656,241
Licensing and royalty fees 252,575 - 252,575
-------- --------- --------
870,367 38,449 908,816
-------- --------- --------
Operating expenses:
Cost of equipment and services revenues 289,358 43,858 333,216
Research and development 143,297 - 143,297
Selling, general and administrative 113,297 20,409 133,706
Amortization of other acquisition-related
intangible assets 1,951 750 2,701
Other - (319) (319)
-------- --------- --------
Total operating expenses 547,903 64,698 612,601
-------- --------- --------
Operating income (loss) 322,464 (26,249) 296,215
Interest expense (262) (9,924) (10,186)
Investment income (expense), net 30,174 (a) (5,672)(d) 24,502
-------- --------- --------
Income (loss) before income taxes 352,376 (41,845)(b) 310,531
Income tax (expense) benefit (116,284)(c) 97,155 (19,129)(c)
-------- --------- --------
Net income $236,092 $ 55,310 $291,402
======== ========= ========
Net earnings per common share:
Diluted $ 0.29 (e) $ 0.07 (e) $ 0.35 (e)
======== ========= ========
Shares used in per share calculations:
Diluted 821,330 821,330 821,330
======== ========= ========
(a) Includes $29 million in interest income related to cash, cash
equivalents and marketable debt securities, which are not part of the
Company's strategic investment portfolio.
(b) Includes $28 million loss, net of minority interest, of Vesper Holdings
from June 1, 2003 through August 31, 2003 due to the Company's practice
of consolidating foreign subsidiaries one month in arrears.
(c) The fiscal year 2003 effective tax rate for operations excluding QSI
and total QUALCOMM are 33% and approximately 36%, respectively. The
change in the estimated 2003 effective tax rate for total QUALCOMM from
45% used in the third quarter of fiscal 2003 results in a 6% effective
tax rate in the fourth quarter of fiscal 2003.
(d) Includes $27 million in other-than-temporary losses on investments and
$16 million equity in losses of investees, partially offset by $32
million in net realized gains on investments and $6 million in interest
income.
(e) The sum of the earnings per share amounts may not equal total earnings
per share due to rounding.
QUALCOMM Announces Fourth Quarter and Fiscal 2003 Results Page 14 of 19
QUALCOMM INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THIS SCHEDULE IS TO ASSIST THE READER IN RECONCILING FROM
RESULTS EXCLUDING QSI TO TOTAL QUALCOMM RESULTS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
TWELVE MONTHS ENDED SEPTEMBER 28, 2003
---------------------------------------------------
TOTAL
EXCLUDING QSI QSI QUALCOMM
------------- --- --------
Revenues:
Equipment and services $2,861,500 $ 124,260 $ 2,985,760
Licensing and royalty fees 984,876 - 984,876
---------- --------- -----------
3,846,376 124,260 3,970,636
---------- --------- -----------
Operating expenses:
Cost of equipment and services revenues 1,268,112 161,935 1,430,047
Research and development 517,737 5,530 523,267
Selling, general and administrative 446,347 88,568 534,915
Amortization of other acquisition-related
intangible assets 7,839 750 8,589
Asset impairment and related charges - 194,258 194,258
Other - (30,675) (30,675)
---------- --------- -----------
Total operating expenses 2,240,035 420,366 2,660,401
---------- --------- -----------
Operating income (loss) 1,606,341 (296,106) 1,310,235
Interest expense (2,236) (28,473) (30,709)
Investment income (expense), net 129,276 (a) (123,655) (d) 5,621
---------- --------- -----------
Income (loss) before income taxes 1,733,381 (448,234) (b) 1,285,147
Income tax (expense) benefit (572,016)(c) 114,310 (457,706)(c)
---------- --------- -----------
Net income (loss) $1,161,365 $(333,924) $ 827,441
========== ========= ===========
Net earnings (loss) per common share:
Diluted $ 1.42 (e) $ (0.41) (e) $ 1.01 (e)
========== ========= ===========
Shares used in per share calculations:
Diluted 817,755 817,755 817,755
========== ========= ===========
(a) Includes $113 million in interest income related to cash, cash
equivalents and marketable debt securities, which are not part of the
Company's strategic investment portfolio.
(b) Includes $238 million loss, net of minority interest, of Vesper
Holdings from September 1, 2002 through August 31, 2003 due to the
Company's practice of consolidating foreign subsidiaries one month in
arrears.
(c) The fiscal year 2003 effective tax rate for operations excluding QSI
and total QUALCOMM are 33% and approximately 36%, respectively.
(d) Includes $138 million in other-than-temporary losses on investments and
$126 million equity in losses of investees, partially offset by $56
million in net realized gains on investments, $51 million in interest
income and $37 million in minority interest in loss of consolidated
subsidiaries.
(e) The sum of the earnings per share amounts may not equal total earnings
per share due to rounding.
QUALCOMM Announces Fourth Quarter and Fiscal 2003 Results Page 15 of 19
QUALCOMM INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS AND MARKETABLE SECURITIES
THIS SCHEDULE IS TO ASSIST THE READER IN RECONCILING CASH FLOWS FROM CASH
CASH EQUIVALENTS AND MARKETABLE SECURITIES EXCLUDING QSI TO TOTAL QUALCOMM
CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 28, 2003
----------------------------------------------
EXCLUDING TOTAL
QSI QSI QUALCOMM
--- --- --------
Earnings (loss) before taxes, depreciation, amortization and other
adjustments (1) $ 397,950 $ (12,417) $ 385,533
Working capital changes and taxes paid (2) 126,598 15,327 141,925
---------- ----------- ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 524,548 2,910 527,458
Capital expenditures (44,601) (15) (44,616)
---------- ----------- ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES LESS CAPITAL EXPENDITURES 479,947 2,895 482,842
Net additional share capital 58,797 - 58,797
Dividends paid (55,769) - (55,769)
Net collections of finance receivables 1,252 23 1,275
Other investments (3,501) (155) (3,656)
Other items (27) (5,371) (5,398)
Changes in fair value and other changes to marketable securities (13,626) 25,411 11,785
Marketable securities pending settlement (receipt) payment (84,828) 3,109 (81,719)
Transfer from QSI (3) 48,200 (48,200) -
Transfer to QSI (4) (12,933) 12,933 -
---------- ----------- ----------
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND MARKETABLE
SECURITIES (5) $ 417,512 $ (9,355) $ 408,157
========== =========== ==========
(1) Reconciliation to GAAP:
Net income $ 236,092 $ 55,310 $ 291,402
Non-cash adjustments (a) 115,999 (35,252) 80,747
Net realized gains on marketable securities and other investments (936) (32,475) (33,411)
Plus: Taxes paid 46,795 - 46,795
---------- ----------- ----------
Earnings before taxes, depreciation, amortization and other
adjustments $ 397,950 $ (12,417) $ 385,533
========== =========== ==========
(2) Reconciliation to GAAP:
Increase in cash resulting from changes in working capital $ 173,393 $ 15,327 $ 188,720
Minus: Taxes paid (46,795) - (46,795)
---------- ----------- ----------
Working capital changes and taxes paid $ 126,598 $ 15,327 $ 141,925
========== =========== ==========
(3) Cash from loan payments and sale of equity securities.
(4) Funding for strategic debt and equity investments, operations of
Vesper and other QSI operating expenses.
(5) Reconciliation to GAAP cash flow statement:
Net increase (decrease) in cash and cash equivalents (GAAP) $ 250,792 $ (523) $ 250,269
Plus: Net purchase (proceeds) of marketable securities 265,174 (37,352) 227,822
Plus: Net (decrease) increase in fair value and other changes
to marketable securities (13,626) 25,411 11,785
Plus: Net increase in marketable securities pending settlement
(receipt) payment (84,828) 3,109 (81,719)
---------- ----------- ----------
Net increase (decrease) in cash, cash equivalents and marketable
securities $ 417,512 $ (9,355) $ 408,157
========== =========== ==========
(a) See detail following the twelve month cash flow schedule.
QUALCOMM Announces Fourth Quarter and Fiscal 2003 Results Page 16 of 19
QUALCOMM INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS AND MARKETABLE SECURITIES
THIS SCHEDULE IS TO ASSIST THE READER IN RECONCILING CASH FLOWS FROM CASH,
CASH EQUIVALENTS AND MARKETABLE SECURITIES EXCLUDING QSI TO TOTAL QUALCOMM CASH
FLOWS
(IN THOUSANDS)
(UNAUDITED)
TWELVE MONTHS ENDED SEPTEMBER 28, 2003
-----------------------------------------------
EXCLUDING TOTAL
QSI QSI QUALCOMM
------------------------------------------------
Earnings (loss) before taxes, depreciation, amortization and other
adjustments (1) $ 1,873,151 $ (29,247) $ 1,843,904
Working capital changes and taxes paid (2) (101,039) 39,019 (62,020)
----------- ----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,772,112 9,772 1,781,884
Capital expenditures (202,116) (28,506) (230,622)
----------- ----------- -----------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES LESS CAPITAL EXPENDITURES 1,569,996 (18,734) 1,551,262
Net additional share capital 191,473 - 191,473
Repurchases of common stock (158,488) - (158,488)
Dividends paid (134,776) - (134,776)
Net collections of finance receivables 8,097 654,979 663,076
Other investments (3,501) (33,955) (37,456)
Other items (2,655) (36,762) (39,417)
Changes in fair value and other changes to marketable securities 28,497 71,562 100,059
Marketable securities pending settlement payment (receipt) 42,939 (6,433) 36,506
Transfer from QSI (3) 795,865 (795,865) -
Transfer to QSI (4) (162,263) 162,263 -
----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES (5) $ 2,175,184 $ (2,945) $ 2,172,239
=========== =========== ===========
(1) Reconciliation to GAAP:
Net income (loss) $ 1,161,365 $ (333,924) $ 827,441
Non-cash adjustments (b) 603,991 360,548 964,539
Net realized gains on marketable securities and other investments (16,947) (55,871) (72,818)
Plus: Taxes paid 124,742 - 124,742
----------- ----------- -----------
Earnings before taxes, depreciation, amortization and other adjustments $ 1,873,151 $ (29,247) $ 1,843,904
=========== =========== ===========
(2) Reconciliation to GAAP:
Increase in cash resulting from changes in working capital $ 23,703 $ 39,019 $ 62,722
Minus: Taxes paid (124,742) - (124,742)
----------- ----------- -----------
Working capital changes and taxes paid $ (101,039) $ 39,019 $ (62,020)
=========== =========== ===========
(3) Cash from loan payments and sale of equity securities
(4) Funding for strategic debt and equity investments, operations of Vesper and
other QSI operating expenses
(5) Reconciliation to GAAP cash flow statement:
Net increase (decrease) in cash and cash equivalents (GAAP) $ 652,980 $ (14,590) $ 638,390
Plus: Net purchase (proceeds) of marketable securities 1,452,853 (53,484) 1,399,369
Plus: Net increase in fair value and other changes to marketable
securities 28,497 71,562 100,059
Plus: Net increase in marketable securities pending settlement
payment (receipt) 42,939 (6,433) 36,506
Less: Proceeds from trading securities included in working
capital changes (2,085) - (2,085)
----------- ----------- -----------
Net increase (decrease) in cash, cash equivalents and marketable
securities $ 2,175,184 $ (2,945) $ 2,172,239
=========== =========== ===========
(b) See detail on the following page.
QUALCOMM Announces Fourth Quarter and Fiscal 2003 Results Page 17 of 19
QUALCOMM INCORPORATED
SUPPLEMENTAL DETAIL TO THE
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS AND MARKETABLE SECURITIES
(IN THOUSANDS)
(UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 28, 2003
----------------------------------------------
EXCLUDING TOTAL
QSI QSI QUALCOMM
----------------------------------------------
(a) Non-cash adjustments are comprised of:
Depreciation and amortization $ 38,688 $ 8,437 $ 47,125
Change in fair values of derivative investments - 1,940 1,940
Other-than-temporary losses on marketable securities and other investments - 26,801 26,801
Minority interest in loss of consolidated subsidiaries - (154) (154)
Equity in losses of investees 103 15,648 15,751
Non-cash income tax expense (benefit) 69,489 (97,155) (27,666)
Other non-cash charges and credits 7,719 9,231 16,950
----------- ----------- ----------
Total non-cash adjustments $ 115,999 $ (35,252) 80,747
=========== =========== ==========
TWELVE MONTHS ENDED SEPTEMBER 28, 2003
----------------------------------------------
EXCLUDING TOTAL
QSI QSI QUALCOMM
----------------------------------------------
(b) Non-cash adjustments are comprised of:
Depreciation and amortization $ 139,904 $ 39,790 $ 179,694
Asset impairment and related charges - 194,258 194,258
Change in fair values of derivative investments - 3,201 3,201
Other-than-temporary losses on marketable securities and other investments 349 138,107 138,456
Minority interest in loss of consolidated subsidiaries - (36,949) (36,949)
Equity in losses of investees 148 125,867 126,015
Non-cash income tax expense (benefit) 447,274 (114,310) 332,964
Other non-cash charges and credits 16,316 10,584 26,900
----------- ----------- ----------
Total non-cash adjustments $ 603,991 $ 360,548 964,539
=========== =========== ==========
QUALCOMM Announces Fourth Quarter and Fiscal 2003 Results Page 18 of 19
QUALCOMM INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
QUALCOMM
EXCLUDING
QSI QSI (a) (b) QUALCOMM QUALCOMM
SEPTEMBER 28, SEPTEMBER 28, SEPTEMBER 28, SEPTEMBER 29,
2003 2003 2003 2002
------------ ----------- ------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 2,036,616 $ 8,478 $ 2,045,094 $ 1,406,704
Marketable securities 2,476,315 39,688 2,516,003 1,411,178
Accounts receivable, net 455,281 28,512 483,793 536,950
Finance receivables, net 5,436 359 5,795 388,396
Inventories, net 102,772 7,579 110,351 88,094
Deferred tax assets (b) 611,536 - 611,536 122
Other current assets 162,960 13,232 176,192 109,322
----------- --------- ----------- -----------
Total current assets 5,850,916 97,848 5,948,764 3,940,766
Marketable securities 684,410 126,244 810,654 381,630
Finance receivables, net 536 181,086 181,622 442,934
Other investments 8,075 120,576 128,651 276,414
Property, plant and equipment, net 518,881 103,384 622,265 686,283
Goodwill, net 344,599 1,865 346,464 344,803
Deferred tax assets (b) 406,746 - 406,746 7,493
Other assets 169,118 208,152 377,270 425,725
----------- --------- ----------- -----------
Total assets $ 7,983,281 $ 839,155 $ 8,822,436 $ 6,506,048
=========== ========= =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 132,151 $ 62,914 $ 195,065 $ 209,418
Payroll and other benefits related liabilities 132,683 8,317 141,000 126,005
Unearned revenue 167,840 6,431 174,271 183,482
Current portion of long-term debt - 102,625 102,625 19,355
Other current liabilities 180,200 15,041 195,241 136,726
----------- --------- ----------- -----------
Total current liabilities 612,874 195,328 808,202 674,986
Unearned revenue 236,667 65 236,732 259,995
Long-term debt - 123,302 123,302 94,288
Other liabilities 55,578 - 55,578 40,283
----------- --------- ----------- -----------
Total liabilities 905,119 318,695 1,223,814 1,069,552
----------- --------- ----------- -----------
Minority interest in consolidated subsidiaries 50 - 50 44,540
----------- --------- ----------- -----------
Stockholders' equity:
Preferred stock, $0.0001 par value - - - -
Common stock, $0.0001 par value 81 - 81 79
Paid-in capital 6,324,971 - 6,324,971 4,918,202
Retained earnings 1,297,289 - 1,297,289 604,624
Accumulated other comprehensive loss (31,843) 8,074 (23,769) (130,949)
----------- --------- ----------- -----------
Total stockholders' equity 7,590,498 8,074 7,598,572 5,391,956
----------- --------- ----------- -----------
Total liabilities and stockholders' equity $ 8,495,667 $ 326,769 $ 8,822,436 $ 6,506,048
=========== ========= =========== ===========
(a) Includes the consolidated Vesper Holdings balance sheet at August 31, 2003.
The Company consolidates foreign subsidiaries one month in arrears.
(b) Deferred tax assets and liabilities are not allocated to the Company's
segments. A valuation allowance was provided on all net deferred tax assets
of investments that are consolidated by QSI, including Vesper, because of
uncertainty regarding their realization.
QUALCOMM Announces Fourth Quarter and Fiscal 2003 Results Page 19 of 19
QUALCOMM INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED TWELVE MONTHS ENDED
---------------------------- ----------------------------
SEPTEMBER 28, SEPTEMBER 29, SEPTEMBER 28, SEPTEMBER 29,
2003 2002 2003 2002
------------- ------------- ------------- -------------
Revenues:
Equipment and services $ 656,241 $ 636,179 $ 2,985,760 $ 2,204,835
Licensing and royalty fees 252,575 237,707 984,876 834,725
----------- ----------- ----------- -----------
908,816 873,886 3,970,636 3,039,560
----------- ----------- ----------- -----------
Operating expenses:
Cost of equipment and services revenues 333,216 312,087 1,430,047 1,137,360
Research and development 143,297 109,969 523,267 451,678
Selling, general and administrative 133,706 131,847 534,915 508,644
Amortization of goodwill and other
acquisition-related intangible assets 2,701 66,759 8,589 259,196
Asset impairment and related charges - 459 194,258 459
Other (319) - (30,675) 8,955
----------- ----------- ----------- -----------
Total operating expenses 612,601 621,121 2,660,401 2,366,292
----------- ----------- ----------- -----------
Operating income 296,215 252,765 1,310,235 673,268
Interest expense (10,186) (8,374) (30,709) (25,731)
Investment income (expense), net 24,502 (15,314) 5,621 (186,412)
----------- ----------- ----------- -----------
Income before income taxes 310,531 229,077 1,285,147 461,125
Income tax expense (19,129) (38,795) (457,706) (101,448)
----------- ----------- ----------- -----------
Net income $ 291,402 $ 190,282 $ 827,441 $ 359,677
=========== =========== =========== ===========
Net earnings per common share:
Basic $ 0.37 $ 0.24 $ 1.05 $ 0.47
=========== =========== =========== ===========
Diluted $ 0.35 $ 0.23 $ 1.01 $ 0.44
=========== =========== =========== ===========
Shares used in per share calculations:
Basic 795,525 777,560 789,586 770,887
=========== =========== =========== ===========
Diluted 821,330 809,810 817,755 809,329
=========== =========== =========== ===========
Dividends declared per share $ 0.07 $ - $ 0.17 $ -
=========== =========== =========== ===========