Exhibit 99.1
QUALCOMM Contact:
Bill Davidson
Vice President, Investor Relations
1-(858) 658-4813 (ph) 1-(858) 651-9303 (fax)
e-mail: ir@qualcomm.com
QUALCOMM ANNOUNCES SECOND QUARTER FISCAL 2004 RESULTS
REVENUES $1.2 BILLION, EPS $0.58
REVENUES $1.2 BILLION, EPS $0.53 EXCLUDING QSI SEGMENT
SAN DIEGO - April 21, 2004 - QUALCOMM Incorporated (NASDAQ: QCOM) today
announced its second quarter fiscal 2004 results ended March 28, 2004. Revenues
were $1.2 billion in the second quarter of fiscal 2004, up one percent
sequentially and 20 percent year-over-year. The second quarter fiscal 2004 net
income was $488 million and diluted earnings per share were $0.58, up 39 percent
and 35 percent sequentially and 374 percent and 346 percent year-over-year,
respectively.
The second quarter fiscal 2004 net income excluding the QSI segment was $442
million, up six percent sequentially and 41 percent year-over-year. The second
quarter fiscal 2004 diluted earnings per share excluding the QSI segment were
$0.53, up four percent sequentially and 39 percent year-over-year. 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.
In this quarter we disposed of all remaining operations and assets related to
the Vesper Operating Companies and TowerCo. In accordance with Statement of
Financial Accounting Standards No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets," their results of operations and cash flows are
presented as discontinued operations within the QSI segment. Our statements of
operations and cash flows for prior periods have been adjusted to reflect this
and are presented on our Investor Relations web page at www.qualcomm.com.
"Our financial results reflect the strong acceptance and rapid global growth of
3G CDMA," said Dr. Irwin Mark Jacobs, chairman and CEO of QUALCOMM. "Consumers
and enterprises increasingly recognize the benefits of CDMA-based networks, with
the number of subscribers now exceeding 200 million. Early 3G CDMA entrants
continue to perform well. KDDI, the first CDMA operator
-more-
QUALCOMM Announces Second Quarter Fiscal 2004 Results Page 2 of 19
in Japan, announced its sixth consecutive month as the leading Japanese operator
in net subscriber additions, and now has approximately 14 million subscribers on
its 3G network. Better coverage and new handsets have accelerated WCDMA (UMTS)
uptake and resulted in over 4 million cumulative subscribers in Japan and Europe
at the end of the quarter. NTT DoCoMo, the largest Japanese operator, added
approximately 724,000 subscribers to its 3G FOMA network in March 2004, for a
total of over three million WCDMA subscribers. In South Korea, local number
portability and compelling 1xEV-DO handsets contributed to the highest monthly
net additions in two years and a 1xEV-DO base that now exceeds 6.4 million
subscribers. The United States CDMA market continues to grow, benefiting from
local number portability and the popularity of camera phones and color screens.
Finally, we experienced continued growth in China and India and strong growth in
Brazil, propelled by low-priced MSM6000-based entry level phones."
"This quarter, we matched the prior quarter's record high by shipping
approximately 32 million MSM phone chips; however, worldwide demand for our
chipsets exceeded our supply, particularly the MSM5100 and MSM5500. We
anticipate supply to better align with demand over the course of the next two
quarters.
"Research and development continued at high levels. Both the CDMA2000 1X
Revision D and the 1xEV-DO Revision A standards were completed, each supporting
peak data rates of 3.1 Mbps on the forward link and 1.8 Mbps on the reverse
link. We publicly demonstrated CDMA2000 1xEV-DO Gold Multicast, allowing
multimedia content to be sent simultaneously to many users; MediaFLO, an
end-to-end product and service delivering multiple channels of video
conveniently accessed by an on-screen channel guide; and Quality-of-Service
features supporting greatly enhanced performance for Voice-over-Internet
Protocol (VOIP), push-to-chat, and video telephony. We believe these and other
projects will drive further expansion of 3G CDMA, subscriber migration from 2G
systems, and higher revenues.
Revenues for the second quarter of fiscal 2004 grew $199 million compared to the
second quarter of fiscal 2003, including a $130 million increase in QUALCOMM
Technology Licensing (QTL) segment revenues and a $65 million increase in
QUALCOMM CDMA Technologies (QCT) segment revenues. QTL revenues increased over
the prior year due primarily to greater phone and infrastructure equipment sales
by our licensees. In the second quarter of fiscal 2004, our licensees
QUALCOMM Announces Second Quarter Fiscal 2004 Results Page 3 of 19
reported CDMA phone sales for the first quarter of fiscal 2004 of approximately
37 million units, compared to 27 million units in the second quarter of fiscal
2003. QCT sold approximately 32 million Mobile Station Modem(TM) (MSM(TM)) phone
chips in the second quarter of fiscal 2004, compared to 28 million in the second
quarter of fiscal 2003.
Research and development (R&D) expenses were $169 million in the second quarter
of fiscal 2004, up 28 percent from the second quarter of fiscal 2003, largely
attributable to increases in costs related to integrated circuit products and
corporate initiatives to support multimedia applications, high-speed wireless
Internet access and multimode, multiband, multinetwork products, including
CDMA2000 1xEV-DO/1xEV-DV, GSM1x and WCDMA (UMTS).
Selling, general and administrative (SG&A) expenses were $138 million in the
second quarter of fiscal 2004, up 14 percent from the second quarter of fiscal
2003, largely attributable to increases in employee related expenses for an
expanding customer base.
Our annual effective income tax rate is estimated to be approximately 30 percent
for fiscal 2004, for both total QUALCOMM and QUALCOMM excluding QSI. In the
first fiscal quarter our estimated effective tax rates were 32 percent and 31
percent for total QUALCOMM and QUALCOMM excluding QSI, respectively. Due to the
change in the estimated rate for fiscal 2004, in the second fiscal quarter our
tax rates were 28 percent for total QUALCOMM and 29 percent for QUALCOMM
excluding QSI. In fiscal 2003, our actual effective income tax rate was
approximately 34 percent and 33 percent, for total QUALCOMM and QUALCOMM
excluding QSI, respectively. The lower estimated annual effective tax rate as
compared to our prior estimate for fiscal 2004 and the prior fiscal year is
largely due to expected higher foreign earnings which are subject to a lower
rate.
QUALCOMM STRATEGIC INITIATIVES
The QUALCOMM Strategic Initiatives (QSI) segment includes our strategic
investments and related income and expenses. During the first quarter of fiscal
2004, we sold the Vesper Operating Companies to Embratel, realizing a net loss
of $52 million on the sale. In the second quarter of fiscal 2004, we sold our
wholly-owned subsidiary, TowerCo, which owned and operated the Vesper
communications towers, to Embratel, realizing a net gain of $40 million on the
sale. Also in the second quarter of fiscal 2004, Anatel, the telecommunications
regulatory agency in Brazil, approved
QUALCOMM Announces Second Quarter Fiscal 2004 Results Page 4 of 19
the return of personal mobile service (SMP) licenses. The related SMP debt was
extinguished, resulting in a net gain of $19 million. As a result of the
disposition of all remaining operations and assets related to the Vesper
Operating Companies and TowerCo, their results of operations and cash flows are
presented as discontinued operations within the QSI segment.
In the second quarter of fiscal 2004, QSI's results consist primarily of $21
million in equity losses, partially offset by $4 million in other income
resulting from the transfer of a portion of our FCC Auction Discount Voucher to
a wireless operator.
BUSINESS OUTLOOK
The following statements are forward-looking and actual results may differ
materially. Please see Note Regarding Forward-Looking Statements in this 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.
THIRD QUARTER FISCAL 2004
Based on the current business outlook, we anticipate that revenues excluding the
QSI segment in the third fiscal quarter will increase approximately 4-7 percent
sequentially and 41-44 percent year-over-year. We anticipate that earnings per
share excluding the QSI segment will be approximately $0.48-$0.50 in the third
fiscal quarter, compared to $0.33 in the year ago quarter. This estimate assumes
shipments of approximately 33-35 million MSM phone chips during the quarter.
Based on the current business outlook, we anticipate that total QUALCOMM
revenues in the third quarter will increase approximately 4-7 percent
sequentially and 41-44 percent year-over-year. We anticipate that total QUALCOMM
earnings per share will be approximately $0.46-$0.48 in the third fiscal
quarter, including an estimated $0.02 loss per share attributed to the QSI
segment, compared to $0.09 per share in the year ago quarter. Due to their
nature, certain income and expense items such as realized investment gains or
losses, 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.
QUALCOMM Announces Second Quarter Fiscal 2004 Results Page 5 of 19
FISCAL 2004
Based on the current business outlook, we are increasing our guidance for fiscal
2004. We now anticipate that revenues excluding the QSI segment will grow by
approximately 26-29 percent year-over-year and earnings per share excluding the
QSI segment to be in the range of $1.93-$1.98 for fiscal 2004, compared to $1.42
last fiscal year. We estimate the CDMA phone market to be 152-160 million units
in calendar 2004, and we estimate average selling prices of CDMA phones for
fiscal 2004, upon which royalties are calculated, to remain constant
year-over-year.
Based on the current business outlook, we anticipate that total QUALCOMM
revenues will grow by approximately 26-29 percent year-over-year and total
QUALCOMM earnings per share to be in the range of $1.86-$1.91 for fiscal 2004,
compared to $1.01 last fiscal year, including an estimated $0.07 loss per share
attributed to the QSI segment for fiscal 2004. Due to their nature, certain
income and expense items such as realized investment gains or losses, 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 both current and noncurrent marketable
securities totaled approximately $6.6 billion at the end of the second quarter
of fiscal 2004, compared to $5.9 billion on December 28, 2003, and $4.4 billion
on March 30, 2003. We paid $57 million in cash dividends, $0.07 per share, in
the second quarter of fiscal 2004. On March 2, 2004, we announced a 43 percent
increase in the company's quarterly dividend to $0.10 per share payable on June
25, 2004 to stockholders of record on May 28, 2004. In the second quarter of
fiscal 2004, net cash transfers from QSI were $39 million. Detailed
reconciliations between total QUALCOMM cash flow and cash, cash equivalents and
marketable securities excluding the QSI segment are included in this news
release.
QUALCOMM Announces Second Quarter Fiscal 2004 Results Page 6 of 19
RESULTS OF BUSINESS SEGMENTS
The following tables, which present segment information, have been adjusted to
reflect the SnapTrack reorganization (Note 1) and discontinued operations (Note
3) (dollars in thousands, except per share data):
SECOND QUARTER - FISCAL YEAR 2004
QUALCOMM
RECONCILING EXCLUDING TOTAL
SEGMENTS QCT(1)* QTL QWI(1)* ITEMS (2)* QSI QSI* QUALCOMM*
- -------- ------- --- ------- ---------- --- ---- ---------
REVENUES 711,257 390,257 144,627 (30,522) 1,215,619 29 1,215,648
CHANGE FROM PRIOR QUARTER (5%) 10% 5% N/M 1% (51%) 1%
CHANGE FROM PRIOR YEAR 10% 50% 14% N/M 20% (92%) 20%
EARNINGS (LOSS) FROM CONTINUING
OPERATIONS BEFORE TAXES 257,956 361,591 3,864 1,704 625,115 (15,055) 610,060
CHANGE FROM PRIOR QUARTER (1%) 11% (32%) N/M 3% (330%) 1%
CHANGE FROM PRIOR YEAR 16% 53% (58%) N/M 36% 74% 52%
INCOME FROM DISCONTINUED
OPERATIONS, NET OF TAX (3) -- 47,148 47,148
NET INCOME 442,419 46,018 488,437
CHANGE FROM PRIOR QUARTER 6% N/M 39%
CHANGE FROM PRIOR YEAR 41% N/M 374%
DILUTED EARNINGS PER COMMON SHARE (4) 0.53 0.05 0.58
CHANGE FROM PRIOR QUARTER 4% N/M 35%
CHANGE FROM PRIOR YEAR 39% N/M 346%
FIRST QUARTER - FISCAL YEAR 2004
QUALCOMM
RECONCILING EXCLUDING TOTAL
SEGMENTS QCT(1)* QTL QWI(1)* ITEMS (2)* QSI QSI* QUALCOMM*
- -------- ------- --- ------- ---------- --- ---- ---------
REVENUES 748,378 353,421 138,308 (33,592) 1,206,515 59 1,206,574
EARNINGS (LOSS) FROM CONTINUING
OPERATIONS BEFORE TAXES 260,477 324,673 5,667 16,038 606,855 (3,499) 603,356
LOSS FROM DISCONTINUED OPERATIONS,
NET OF TAX (3) -- (58,236) (58,236)
NET INCOME (LOSS) 418,729 (66,436) 352,293
DILUTED EARNINGS PER COMMON SHARE (4) 0.51 (0.08) 0.43
SECOND QUARTER - FISCAL YEAR 2003
QUALCOMM
RECONCILING EXCLUDING TOTAL
SEGMENTS QCT(1)* QTL QWI(1)* ITEMS (2)* QSI QSI* QUALCOMM*
- -------- ------- --- ------- ---------- --- ---- ---------
REVENUES 646,513 260,110 127,356 (17,201) 1,016,778 351 1,017,129
EARNINGS (LOSS) FROM CONTINUING
OPERATIONS BEFORE TAXES 221,696 236,192 9,194 (6,431) 460,651 (58,645) 402,006
LOSS FROM DISCONTINUED OPERATIONS,
NET OF TAX (3) -- (154,661) (154,661)
NET INCOME (LOSS) 313,858 (210,842) 103,016
DILUTED EARNINGS PER COMMON SHARE (4) 0.38 (0.26) 0.13
SIX MONTHS - FISCAL YEAR 2004
QUALCOMM
RECONCILING EXCLUDING TOTAL
SEGMENTS QCT(1)* QTL QWI(1)* ITEMS (2)* QSI QSI* QUALCOMM*
- -------- ------- --- ------- ---------- --- ---- ---------
REVENUES 1,459,635 743,678 282,935 (64,114) 2,422,134 88 2,422,222
CHANGE FROM PRIOR YEAR 8% 44% 16% N/M 16% (86%) 16%
EARNINGS (LOSS) FROM CONTINUING
OPERATIONS BEFORE TAXES 518,433 686,264 9,531 17,742 1,231,970 (18,554) 1,213,416
CHANGE FROM PRIOR YEAR 2% 47% (32%) N/M 25% 88% 47%
LOSS FROM DISCONTINUED OPERATIONS,
NET OF TAX (3) -- (11,088) (11,088)
NET INCOME (LOSS) 861,148 (20,418) 840,730
DILUTED EARNINGS PER COMMON SHARE (4) 1.04 (0.02) 1.01
CHANGE FROM PRIOR YEAR 28% 95% 140%
SIX MONTHS - FISCAL YEAR 2003
QUALCOMM
RECONCILING EXCLUDING TOTAL
SEGMENTS QCT(1)* QTL QWI(1)* ITEMS (2)* QSI QSI* QUALCOMM*
- -------- ------- --- ------- ---------- --- ---- ---------
REVENUES 1,350,913 515,533 243,856 (25,560) 2,084,742 649 2,085,391
EARNINGS (LOSS) FROM CONTINUING
OPERATIONS BEFORE TAXES 507,829 465,601 14,104 (4,583) 982,951 (156,518) 826,433
LOSS FROM DISCONTINUED OPERATIONS,
NET OF TAX (3) -- (189,646) (189,646)
NET INCOME (LOSS) 658,576 (314,226) 344,350
DILUTED EARNINGS PER COMMON SHARE (4) 0.81 (0.38) 0.42
QUALCOMM Announces Second Quarter Fiscal 2004 Results Page 7 of 19
- ----------
(1) During the second quarter of fiscal 2004, the Company reorganized its
wholly-owned subsidiary, SnapTrack, Inc. (SnapTrack), a developer of
wireless position location technology. The Company previously presented
all of the revenues and operating results of SnapTrack in the QCT segment.
As a result of the reorganization of SnapTrack, revenues and operating
results related to SnapTrack's server software business (software for
location-based services and applications) became part of the QIS division
in the QWI segment. Revenues and operating results related to SnapTrack's
client business (the gpsOne technology that is embedded with the
integrated circuit products) remain with the QCT segment. Prior period
segment information has been adjusted to conform to the new segment
presentation.
(2) 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.
(3) During fiscal 2004, the Company sold its consolidated subsidiaries, the
Vesper Operating Companies and TowerCo, and returned personal mobile
service (SMP) licenses to Anatel, the telecommunications regulatory agency
in Brazil. The results of operations of the Vesper Operating Companies and
TowerCo, including gains and losses realized on the sales transactions and
the SMP licenses, are presented as discontinued operations. The Company's
statements of operations and cash flows for all prior periods have been
adjusted to present the discontinued operations.
(4) The sum of the earnings per share amounts may not equal total earnings per
share due to rounding.
* As adjusted.
N/M - Not Meaningful
BUSINESS SEGMENT HIGHLIGHTS
QUALCOMM CDMA TECHNOLOGIES (QCT)
- Shipped approximately 32 million Mobile Station Modem(TM) (MSM(TM))
phone chips to customers worldwide dUring the second quarter of
fiscal 2004, compared to approximately 32 million units in the first
quarter of fiscal 2004 and approximately 28 million units in the
second quarter of fiscal 2003. Nearly 100 percent of the
approximately 32 million MSMs shipped in the March 2004 quarter were
3G CDMA2000(R) 1X, 1xEV-DO and WCDMA (UMTS).
- Shipped CSM(TM) infrastructure chips for 3G CDMA2000 1X and 1xEV-DO
to support approximately 5.7 million equivalent voice channels,
compared to approximately 4.6 million in the first quarter of fiscal
2004 and approximately 1.5 million in the second quarter of fiscal
2003. 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.
- Several leading manufacturers of telecommunications equipment
including Hisense Group, Huawei Technologies, ZTE and Sierra
Wireless, announced the selection of QUALCOMM's MSM6250(TM) chipset
and systEm software for the design of multimode 3G WCDMA (UMTS)
handsets and data cards, joining LG Electronics, Inc., Sanyo
Electric and Toshiba Corporation who previously announced the
selection of the MSM6250 chipset and software.
QUALCOMM Announces Second Quarter Fiscal 2004 Results Page 8 of 19
- Announced the MSM6225(TM) chipset and system software to support
data-centric and entry-level devices foR the emerging WCDMA (UMTS)
market. Samples of the MSM6225 chipset are expected to ship in
mid-2004.
- Made several announcements supporting the integration of imaging
graphics, audio and video in QCT's single-chip solution with
partners including ATI to create a wireless 3D gaming platform,
RealNetworks to enable the delivery of RealAudio and RealVideo
content, Beatnik to support playback of synthetic music mobile
application format content, and Coding Technologies for the delivery
of high-fidelity audio at very low bit rates with integrated MPEG-4
AAC/ aacPlus.
- Announced the integration of the H.264 video codec into our chipset
solutions.
- Announced plans to deliver QUALCOMM's first 90 nanometer (nm)
low-power MSM solution in 2004 using Taiwan Semiconductor
Manufacturing Company Ltd's 90nm low-power process technology.
QUALCOMM TECHNOLOGY LICENSING (QTL)
- Reported that licensees around the world are participating in the
growing 3G CDMA market:
o Forty-six subscriber licensees reported sales of CDMA2000 1X
products and nine subscriber licensees reported sales of WCDMA
(UMTS) products during the first quarter of fiscal 2004.
o Fifteen infrastructure licensees reported sales of CDMA2000 1X
products and eight infrastructure licensees reported sales of
WCDMA (UMTS) products during the first quarter of fiscal 2004.
o WCDMA (UMTS) royalties contributed approximately 12 percent of
total royalties reported by licensees in the second quarter
for sales in the first quarter of fiscal 2004.
QUALCOMM WIRELESS & INTERNET GROUP (QWI)
QUALCOMM INTERNET SERVICES (QIS)
- Worldwide BREW(TM)-based application downloads continue to grow,
reaching more than 100 million on a cumulative basis. Application
downloads have doubled in six months and operators, publishers,
developers and device manufacturers continue to realize growing
revenues for wireless applications and services.
QUALCOMM Announces Second Quarter Fiscal 2004 Results Page 9 of 19
- Announced the new QPoint(TM) solution, which leverages the power of
the BREW solution and gpsOne(TM) hybRid Assisted GPS wireless
location technology for mobile phones to provide the most complete
server/client compatible mass-market location-based services
solution available today. With the QPoint solution, QUALCOMM
provides operators with flexible delivery options for location
services, either through a hosted model or through channel partners.
- Tata Teleservices, India's leading telecom service, announced plans
to launch wireless applications and services based on the BREW
system, as well as to offer push-to-chat services via QUALCOMM's
BREWChat(TM) solution.
- Made the first public demonstration of the QChat push-to-chat(TM)
solution, which features a call set-up latency of less than one
second.
- Announced together with Iusacell, a provider of cellular telephony
products and services in Mexico, a definitive agreement for Iusacell
to deploy downloadable wireless applications and services based on
the BREW solution.
- Jointly announced with MSN the introduction of MSN Mobile services
for the BREW system that will enable consumers to access MSN Hotmail
and MSN Messenger services in a rich and familiar way via their
BREW-enabled handsets.
QUALCOMM WIRELESS BUSINESS SOLUTIONS(R)(QWBS)
- Shipped approximately 11,200 OmniTRACS(R) units and related products
in the second quarter of fiscal 2004, compared to approximately
10,900 in the first quarter of fiscal 2004 and 8,400 in the second
quarter of fiscal 2003. This brings the cumulative total number of
OmniTRACS and related product shipments to over 511,000 units
shipped worldwide.
- Announced that a fully automated driver productivity solution will
be available by June 2004. The first phase of QUALCOMM's driver
productivity solution provides fleets a stop management system with
technology to automatically detect arrival and departure events at
all significant stops a vehicle makes en route. The solution will
also fully integrate with the industry's transportation management
systems.
- C.H. Robinson Worldwide Inc., one of North America's largest
third-party logistics companies, has selected QUALCOMM's
OmniOne(R)mobile communications system as its wireless workforce
solution.
QUALCOMM Announces Second Quarter Fiscal 2004 Results Page 10 of 19
CONFERENCE CALL
QUALCOMM's second quarter fiscal 2004 earnings conference call will be broadcast
live on April 21, 2004 beginning at 2:30 p.m. Pacific Daylight 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 be available via telephone on April 21, 2004 beginning at
approximately 4:30 p.m. (PDT) through April 26, 2004 at 4:30 p.m. (PDT). 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 21187953. 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.
QUALCOMM Announces Second Quarter Fiscal 2004 Results Page 11 of 19
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 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 Accounting 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 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: the rate
of development, deployment and commercial acceptance of CDMA based networks and
CDMA based technology, including CDMA2000 1X and WCDMA (UMTS), both domestically
and internationally; our dependence on major customers and licensees;
fluctuations in the demand for CDMA based products, services or applications;
foreign currency fluctuations; strategic loans, investments and transactions the
we have or may pursue; dependence on third party manufacturers and suppliers;
our ability to maintain and improve operational efficiencies and profitability;
developments in current and future litigation as well as other risks detailed
from time-to-time in the Company's SEC reports.
###
QUALCOMM Announces Second Quarter Fiscal 2004 Results Page 12 of 19
QUALCOMM(R), QCT(R), Mobile Station Modem(TM), MSM(TM), CSM(TM), MSM5100(TM),
MSM5500(TM), MSM6000(TM), MSM6200(TM), MSM6250(TM), MSM6225(TM), MSM6500(TM),
MediaFLO(TM), BREW(TM), BREWChat(TM), QChat(R), QPoint(TM), gpsOne(TM), QUALCOMM
Wireless Business Solutions(R), OmniTRACS(R), OmniOne(R) and GlobalTRACS(R) are
trademarks and/or service marks of QUALCOMM Incorporated. All other trademarks
are the property of their respective owners.
QUALCOMM Announces Second Quarter Fiscal 2004 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 MARCH 28, 2004
-----------------------------------------------
EXCLUDING TOTAL
QSI QSI QUALCOMM
----------- ----------- -----------
Revenues:
Equipment and services $ 819,533 $ 29 $ 819,562
Licensing and royalty fees 396,086 -- 396,086
----------- ----------- -----------
1,215,619 29 1,215,648
----------- ----------- -----------
Operating expenses:
Cost of equipment and services revenues 335,135 -- 335,135
Research and development 169,023 -- 169,023
Selling, general and administrative 134,804 3,401 138,205
Amortization of other acquisition-related intangible assets 1,631 -- 1,631
Other (21) (4,895) (4,916)
----------- ----------- -----------
Total operating expenses 640,572 (1,494) 639,078
----------- ----------- -----------
Operating income 575,047 1,523 576,570
Interest expense (580) -- (580)
Investment income (expense), net 50,648(a) (16,578)(d) 34,070
----------- ----------- -----------
Income (loss) from continuing operations before income taxes 625,115 (15,055) 610,060
Income tax (expense) benefit (182,696)(c) 13,925 (168,771)(c)
----------- ----------- -----------
Income (loss) from continuing operations 442,419 (1,130) 441,289
Income from discontinued operations, net of income taxes (b) -- 47,148 47,148
----------- ----------- -----------
Net income $ 442,419 $ 46,018 $ 488,437
=========== =========== ===========
Diluted earnings (loss) per common share
from continuing operations (e) $ 0.53 $ 0.00 $ 0.53
=========== =========== ===========
Diluted earnings per common share from
discontinued operations (e) $ -- $ 0.05 $ 0.05
=========== =========== ===========
Diluted earnings per common share (e) $ 0.53 $ 0.05 $ 0.58
=========== =========== ===========
Shares used in per share calculations:
Diluted 835,571 835,571 835,571
=========== =========== ===========
(a) Includes $44 million in interest income related to cash, cash equivalents
and marketable securities, which are not part of the Company's strategic
investment portfolio.
(b) The results of operations related to the Vesper Operating Companies,
TowerCo and the SMP licenses, including gains and losses realized on sales
transactions, are presented as discontinued operations.
(c) The fiscal year 2004 estimated effective tax rate for continuing
operations for both total QUALCOMM and QUALCOMM excluding QSI is
approximately 30%.
(d) Includes $21 million equity in losses of investees and $1 million in
other-than-temporary losses on marketable securities, partially offset by
$3 million in realized gains on investments and $2 million gain on
derivatives.
(e) The sum of the earnings per share amounts may not equal total earnings per
share due to rounding.
QUALCOMM Announces Second Quarter Fiscal 2004 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)
SIX MONTHS ENDED MARCH 28, 2004
-----------------------------------------------
EXCLUDING TOTAL
QSI QSI QUALCOMM
----------- ----------- -----------
Revenues:
Equipment and services $ 1,672,444 $ 88 $ 1,672,532
Licensing and royalty fees 749,690 -- 749,690
----------- ----------- -----------
2,422,134 88 2,422,222
----------- ----------- -----------
Operating expenses:
Cost of equipment and services revenues 704,865 -- 704,865
Research and development 318,961 -- 318,961
Selling, general and administrative 251,313 8,968 260,281
Amortization of other acquisition-related intangible assets 3,756 -- 3,756
Other (42) (10,551) (10,593)
----------- ----------- -----------
Total operating expenses 1,278,853 (1,583) 1,277,270
----------- ----------- -----------
Operating income 1,143,281 1,671 1,144,952
Interest expense (904) -- (904)
Investment income (expense), net 89,593(a) (20,225)(d) 69,368
----------- ----------- -----------
Income (loss) from continuing operations before income taxes 1,231,970 (18,554) 1,213,416
Income tax (expense) benefit (370,822)(c) 9,224 (361,598)(c)
----------- ----------- -----------
Income (loss) from continuing operations 861,148 (9,330) 851,818
Loss from discontinued operations, net of income taxes (b) -- (11,088) (11,088)
----------- ----------- -----------
Net income (loss) $ 861,148 $ (20,418) $ 840,730
=========== =========== ===========
Diluted earnings (loss) per common share
from continuing operations (e) $ 1.04 $ (0.01) $ 1.02
=========== =========== ===========
Diluted loss per common share from
discontinued operations (e) $ -- $ (0.01) $ (0.01)
=========== =========== ===========
Diluted earnings (loss) per common share (e) $ 1.04 $ (0.02) $ 1.01
=========== =========== ===========
Shares used in per share calculations:
Diluted 831,391 831,391 831,391
=========== =========== ===========
(a) Includes $79 million in interest income related to cash, cash equivalents
and marketable securities, which are not part of the Company's strategic
investment portfolio.
(b) The results of operations related to the Vesper Operating Companies,
TowerCo and the SMP licenses, including gains and losses realized on sales
transactions, are presented as discontinued operations.
(c) The fiscal year 2004 estimated effective tax rate for continuing
operations for both total QUALCOMM and QUALCOMM excluding QSI is
approximately 30%.
(d) Includes $36 million equity in losses of investees and $1 million in
other-than-temporary losses on marketable securities, partially offset by
$12 million in interest income, $4 million in realized gains on
investments and $1 million gain on derivatives.
(e) The sum of the earnings per share amounts may not equal total earnings per
share due to rounding.
QUALCOMM Announces Second Quarter Fiscal 2004 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 MARCH 28, 2004
-----------------------------------
EXCLUDING TOTAL
QSI QSI QUALCOMM
--------- --------- ---------
Earnings before taxes, depreciation, amortization and other
adjustments (1) $ 637,021 $ 7,269 $ 644,290
Working capital changes and taxes paid (2) 131,796 949 132,745
--------- --------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 768,817 8,218 777,035
Capital expenditures (54,461) (7) (54,468)
--------- --------- ---------
FREE CASH FLOW (NET CASH PROVIDED BY OPERATING ACTIVITIES
LESS CAPITAL EXPENDITURES) 714,356 8,211 722,567
Net additional share capital 99,890 -- 99,890
Proceeds from put options 5,103 -- 5,103
Dividends paid (56,519) -- (56,519)
Net collections of finance receivables 729 -- 729
Other investments (3,489) (2,874) (6,363)
Other items (1,143) (10,940) (12,083)
Changes in fair value and other changes to marketable
securities 3,515 28,052 31,567
Marketable securities pending settlement payment (28,498) -- (28,498)
Net cash provided by discontinued operations -- 38,915 38,915
Transfer from QSI (3) 54,628 (54,628) --
Transfer to QSI (4) (16,125) 16,125 --
--------- --------- ---------
NET INCREASE IN CASH, CASH EQUIVALENTS AND MARKETABLE
SECURITIES (5) $ 772,447 $ 22,861 $ 795,308
========= ========= =========
(1) Reconciliation to GAAP:
Net income (loss) from continuing operations $ 442,419 $ (1,130) $ 441,289
Non-cash adjustments (a) 219,254 11,521 230,775
Net realized gains on marketable securities and other
investments (7,683) (3,122) (10,805)
Taxes refunded (16,969) -- (16,969)
--------- --------- ---------
Earnings (loss) before taxes, depreciation,
amortization and other adjustments $ 637,021 $ 7,269 $ 644,290
========= ========= =========
(2) Reconciliation to GAAP:
Increase (decrease) in cash resulting from changes in
working capital $ 114,827 $ 949 $ 115,776
Taxes refunded 16,969 -- 16,969
--------- --------- ---------
Working capital changes and taxes paid $ 131,796 $ 949 $ 132,745
========= ========= =========
(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) $ 150,820 $ (229) $ 150,591
Plus: Net purchase (proceeds) of marketable
securities 646,610 (4,962) 641,648
Plus: Net increase in fair value and other changes
to marketable securities 3,515 28,052 31,567
Plus: Net increase in marketable securities pending
settlement receipt (28,498) -- (28,498)
--------- --------- ---------
Net increase in cash, cash equivalents and marketable
securities $ 772,447 $ 22,861 $ 795,308
========= ========= =========
(a) See detail following the six month cash flow.
QUALCOMM Announces Second Quarter Fiscal 2004 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)
SIX MONTHS ENDED MARCH 28, 2004
-----------------------------------------
EXCLUDING TOTAL
QSI QSI QUALCOMM
----------- ----------- -----------
Earnings before taxes, depreciation, amortization and other
adjustments (1) $ 1,277,581 $ 15,944 $ 1,293,525
Working capital changes and taxes paid (2) (51,618) 7,260 (44,358)
----------- ----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,225,963 23,204 1,249,167
Capital expenditures (117,545) (16) (117,561)
----------- ----------- -----------
FREE CASH FLOW (NET CASH PROVIDED BY OPERATING ACTIVITIES
LESS CAPITAL EXPENDITURES) 1,108,418 23,188 1,131,606
Net additional share capital 131,509 -- 131,509
Proceeds from put options 5,103 -- 5,103
Dividends paid (112,562) -- (112,562)
Net collections of finance receivables 1,153 193,308 194,461
Other investments (16,058) (33,900) (49,958)
Other items (2,181) (27,547) (29,728)
Changes in fair value and other changes to marketable
securities 12,321 26,131 38,452
Marketable securities pending settlement payment (14,513) -- (14,513)
Net cash used by discontinued operations -- (20,257) (20,257)
Transfer from QSI (3) 261,674 (261,674) --
Transfer to QSI (4) (109,954) 109,954 --
----------- ----------- -----------
NET INCREASE IN CASH, CASH EQUIVALENTS AND MARKETABLE
SECURITIES (5) $ 1,264,910 $ 9,203 $ 1,274,113
=========== =========== ===========
(1) Reconciliation to GAAP:
Net income (loss) from continuing operations $ 861,148 $ (9,330) $ 851,818
Non-cash adjustments (b) 432,301 29,836 462,137
Net realized gains on marketable securities and other
investments (11,007) (4,562) (15,569)
Taxes refunded (4,861) -- (4,861)
----------- ----------- -----------
Earnings before taxes, depreciation, amortization and
other adjustments $ 1,277,581 $ 15,944 $ 1,293,525
=========== =========== ===========
(2) Reconciliation to GAAP:
(Decrease) increase in cash resulting from changes in
working capital $ (56,479) $ 7,260 $ (49,219)
Taxes refunded 4,861 -- 4,861
----------- ----------- -----------
Working capital changes and taxes paid $ (51,618) $ 7,260 $ (44,358)
=========== =========== ===========
(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 decrease in cash and cash equivalents (GAAP) $ (90,094) $ (8,482) $ (98,576)
Plus: Net purchase (proceeds) of marketable
securities 1,357,196 (8,446) 1,348,750
Plus: Net increase in fair value and other changes
to marketable securities 12,321 26,131 38,452
Plus: Net increase in marketable securities pending
settlement receipt (14,513) -- (14,513)
----------- ----------- -----------
Net increase in cash, cash equivalents and marketable
securities $ 1,264,910 $ 9,203 $ 1,274,113
=========== =========== ===========
(b) See detail on the following page.
QUALCOMM Announces Second Quarter Fiscal 2004 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 MARCH 28, 2004
----------------------------------
EXCLUDING TOTAL
QSI QSI QUALCOMM
--------- --------- ---------
(a) Non-cash adjustments are comprised of:
Depreciation and amortization $ 38,287 $ 1,325 $ 39,612
Other-than-temporary losses on marketable securities and
other investments -- 820 820
Equity in losses of investees 306 20,593 20,899
Non-cash income tax expense (benefit) 171,573 (13,925) 157,648
Other non-cash charges and (credits) 9,088 2,708 11,796
--------- --------- ---------
Total non-cash adjustments $ 219,254 $ 11,521 $ 230,775
========= ========= =========
SIX MONTHS ENDED MARCH 28, 2004
----------------------------------
EXCLUDING TOTAL
QSI QSI QUALCOMM
--------- --------- ---------
(b) Non-cash adjustments are comprised of:
Depreciation and amortization $ 77,631 $ 2,527 $ 80,158
Other-than-temporary losses on marketable securities and
other investments -- 1,520 1,520
Equity in losses of investees 592 36,377 36,969
Non-cash income tax expense (benefit) 347,590 (9,223) 338,367
Other non-cash charges and (credits) 6,488 (1,365) 5,123
--------- --------- ---------
Total non-cash adjustments $ 432,301 $ 29,836 462,137
========= ========= =========
QUALCOMM Announces Second Quarter Fiscal 2004 Results Page 18 of 19
QUALCOMM INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
ASSETS
QUALCOMM
EXCLUDING
QSI QSI (a) QUALCOMM QUALCOMM
MARCH 28, MARCH 28, MARCH 28, SEPTEMBER 28,
2004 2004 2004 2003
----------- ----------- ----------- -------------
Current assets:
Cash and cash equivalents $ 1,946,518 $ -- $ 1,946,518 $ 2,045,094
Marketable securities 3,601,400 58,511 3,659,911 2,516,003
Accounts receivable, net 596,708 76 596,784 483,793
Inventories, net 97,041 -- 97,041 110,351
Deferred tax assets (a) 471,180 -- 471,180 611,536
Other current assets 141,578 1,454 143,032 181,987
----------- ----------- ----------- -------------
Total current assets 6,854,425 60,041 6,914,466 5,948,764
Marketable securities 914,328 125,107 1,039,435 810,654
Property, plant and equipment, net 549,923 -- 549,923 622,265
Goodwill, net 355,622 -- 355,622 346,464
Deferred tax assets (a) 360,141 -- 360,141 406,746
Other assets 177,918 251,989 429,907 687,543
----------- ----------- ----------- -------------
Total assets $ 9,212,357 $ 437,137 $ 9,649,494 $ 8,822,436
=========== =========== =========== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 212,736 $ 362 $ 213,098 $ 195,065
Payroll and other benefits related liabilities 138,938 506 139,444 141,000
Unearned revenue 172,032 5 172,037 174,271
Dividends payable 80,890 -- 80,890 --
Current portion of long-term debt -- -- -- 102,625
Other current liabilities 200,186 7,366 207,552 195,241
----------- ----------- ----------- -------------
Total current liabilities 804,782 8,239 813,021 808,202
Unearned revenue 200,784 -- 200,784 236,732
Long-term debt -- -- -- 123,302
Other liabilities 79,380 -- 79,380 55,628
----------- ----------- ----------- -------------
Total liabilities 1,084,946 8,239 1,093,185 1,223,864
----------- ----------- ----------- -------------
Stockholders' equity:
Preferred stock, $0.0001 par value -- -- -- --
Common stock, $0.0001 par value 82 -- 82 81
Paid-in capital 6,557,273 -- 6,557,273 6,324,971
Retained earnings 1,944,567 -- 1,944,567 1,297,289
Accumulated other comprehensive (loss) income (27,175) 81,562 54,387 (23,769)
----------- ----------- ----------- -------------
Total stockholders' equity 8,474,747 81,562 8,556,309 7,598,572
----------- ----------- ----------- -------------
Total liabilities and stockholders' equity $ 9,559,693 $ 89,801 $ 9,649,494 $ 8,822,436
=========== =========== =========== =============
(a) Deferred tax assets and liabilities are not allocated to the Company's
segments. Net deferred tax assets and liabilities, if any, of subsidiaries
that are consolidated by QSI are reflected as QSI assets and liabilities.
QUALCOMM Announces Second Quarter Fiscal 2004 Results Page 19 of 19
QUALCOMM INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED
-------------------------- --------------------------
MARCH 28, MARCH 30, MARCH 28, MARCH 30,
2004 2003(a) 2004 2003(a)
----------- ----------- ----------- -----------
Revenues:
Equipment and services $ 819,562 $ 763,568 $ 1,672,532 $ 1,592,124
Licensing and royalty fees 396,086 253,561 749,690 493,267
----------- ----------- ----------- -----------
1,215,648 1,017,129 2,422,222 2,085,391
----------- ----------- ----------- -----------
Operating expenses:
Cost of equipment and services revenues 335,135 341,205 704,865 692,682
Research and development 169,023 131,801 318,961 244,280
Selling, general and administrative 138,205 121,323 260,281 238,345
Amortization of acquisition-related intangible assets 1,631 1,964 3,756 3,936
Other (4,916) -- (10,593) --
----------- ----------- ----------- -----------
Total operating expenses 639,078 596,293 1,277,270 1,179,243
----------- ----------- ----------- -----------
Operating income 576,570 420,836 1,144,952 906,148
Interest expense (580) (383) (904) (1,731)
Investment income (expense), net 34,070 (18,447) 69,368 (77,984)
----------- ----------- ----------- -----------
Income from continuing operations before income taxes 610,060 402,006 1,213,416 826,433
Income tax expense (168,771) (144,329) (361,598) (292,437)
----------- ----------- ----------- -----------
Income from continuing operations 441,289 257,677 851,818 533,996
----------- ----------- ----------- -----------
Income (loss) from discontinued operations 47,148 (154,661) (11,088) (189,646)
----------- ----------- ----------- -----------
Net income $ 488,437 $ 103,016 $ 840,730 $ 344,350
=========== =========== =========== ===========
Basic earnings per common share from continuing operations $ 0.55 $ 0.33 $ 1.06 $ 0.68
Basic earnings (loss) per common share from discontinued operations 0.06 (0.20) (0.01) (0.24)
----------- ----------- ----------- -----------
Basic earnings per common share $ 0.61 $ 0.13 $ 1.05 $ 0.44
=========== =========== =========== ===========
Diluted earnings per common share from continuing operations $ 0.53 $ 0.32 $ 1.02 $ 0.65
Diluted earnings (loss) per common share from discontinued operations 0.05 (0.19) (0.01) (0.23)
----------- ----------- ----------- -----------
Diluted earnings per common share $ 0.58 $ 0.13 $ 1.01 $ 0.42
=========== =========== =========== ===========
Shares used in per share calculations:
Basic 806,283 789,026 803,324 786,153
=========== =========== =========== ===========
Diluted 835,751 818,088 831,391 816,916
=========== =========== =========== ===========
Dividends per share paid $ 0.07 $ -- $ 0.14 $ --
=========== =========== =========== ===========
Dividends per share announced $ 0.10 $ 0.05 $ 0.24 $ 0.05
=========== =========== =========== ===========
(a) As adjusted to present results related to Vesper, TowerCo and SMP licenses
as discontinued operations.