| Revenues: $1.74 billion, up 25 percent year-over-year and 12 percent sequentially. | ||
| Net income: $620 million, up 21 percent year-over-year and 15 percent sequentially. | ||
| Diluted earnings per share: $0.36, up 20 percent year-over-year and 13 percent sequentially. | ||
| Effective tax rate: 16 percent for the quarter. Fiscal 2006 estimated tax rate of approximately 22 percent. | ||
| Estimated share-based compensation: $82 million, net of tax. | ||
| Operating cash flow: $596 million, up 50 percent year-over-year; 34 percent of revenue. | ||
| Return of capital to stockholders: In the quarter, we announced a new $2.5 billion stock repurchase program to replace the prior program which had $1 billion of repurchase authority remaining, and announced dividends totaling $148 million, or $0.09 per share, which were paid on January 4, 2006. |
| Revenues: $1.74 billion, up 25 percent year-over-year and 12 percent sequentially. | ||
| Net income: $667 million, up 41 percent year-over-year and 23 percent sequentially. | ||
| Diluted earnings per share: $0.39, up 39 percent year-over-year and 22 percent sequentially, excludes $0.01 loss per share attributable to the QSI segment, $0.05 loss per share |
-more-
QUALCOMM Announces First Quarter Fiscal 2006 Results | Page 2 of 18 |
attributable to estimated share-based compensation and $0.03 earnings per share attributable to tax benefits related to prior years. | |||
| Effective tax rate: 26 percent for the quarter and estimated for fiscal 2006. | ||
| Free cash flow: $531 million, up 93 percent year-over-year; 30 percent of revenue. (Defined as net cash from operating activities less capital expenditures) |
QUALCOMM Announces First Quarter Fiscal 2006 Results | Page 3 of 18 |
Estimated | Total | |||||||||||||||
QUALCOMM | Share-Based | QUALCOMM | ||||||||||||||
($ in millions) | Pro Forma | Compensation | QSI | (GAAP) | ||||||||||||
First quarter fiscal 2006 |
$ | 273 | $ | 52 | $ | 15 | $ | 340 | ||||||||
First quarter fiscal 2005 |
$ | 219 | $ | | $ | 9 | $ | 228 | ||||||||
Year-over-year change |
25 | % | 67 | % | 49 | % |
QUALCOMM Announces First Quarter Fiscal 2006 Results | Page 4 of 18 |
Estimated | Total | |||||||||||||||
QUALCOMM | Share-Based | QUALCOMM | ||||||||||||||
($ in millions) | Pro Forma | Compensation | QSI | (GAAP) | ||||||||||||
First quarter fiscal 2006 |
$ | 168 | $ | 58 | $ | 13 | $ | 239 | ||||||||
First quarter fiscal 2005 |
$ | 143 | $ | | $ | 5 | $ | 148 | ||||||||
Year-over-year change |
17 | % | 160 | % | 61 | % |
QUALCOMM Announces First Quarter Fiscal 2006 Results | Page 5 of 18 |
QUALCOMM Announces First Quarter Fiscal 2006 Results | Page 6 of 18 |
Current Guidance | ||||||||||
Q205 | Q206 | |||||||||
Results | Estimates | |||||||||
QUALCOMM Pro Forma |
||||||||||
Revenues |
$ | 1.37 | B | $ | 1.63B - $1.73 | B | ||||
Year-over-year change |
increase 19% - 27% | |||||||||
Diluted earnings per share (EPS) |
$ | 0.29 | $0.35- $0.37 | |||||||
Year-over-year change |
increase 21% - 28% | |||||||||
Total QUALCOMM (GAAP) |
||||||||||
Revenues |
$ | 1.37 | B | $ | 1.63B - $1.73 | B | ||||
Year-over-year change |
increase 19% - 27% | |||||||||
Diluted earnings per share (EPS) |
$ | 0.31 | $ | 0.28- $0.30 | ||||||
Year-over-year change |
decrease 3% - 10 | % | ||||||||
Diluted EPS attributable to in-process R&D |
n/a | $ | (0.01 | ) | ||||||
Diluted EPS attributable to QSI |
$ | (0.01 | ) | $ | (0.01 | ) | ||||
Diluted EPS attributable to estimated share-based compensation |
n/a | $ | (0.05 | ) | ||||||
EPS attributable to tax benefit related to prior years |
$ | 0.03 | n/a | |||||||
Metrics |
||||||||||
MSM Shipments |
approx. 37M | 44M - 46M | ||||||||
CDMA/WCDMA handset units shipped |
approx. 52M* | 59M - 61M | * | |||||||
CDMA/WCDMA handset unit wholesale average selling price |
approx. $207* | $ | 209 | * |
* | Shipments in Dec. quarter, reported in Mar. quarter |
Prior Guidance | Current Guidance | ||||||||||||||
FY 2005 | FY 2006 | FY 2006 | |||||||||||||
Results | Estimates | Estimates | |||||||||||||
QUALCOMM Pro Forma |
|||||||||||||||
Revenues |
$ | 5.67 | B | $ | 6.7B - $7.1B | $ | 6.7B - $7.1 | B | |||||||
Year-over-year change |
increase 18% - 25 | % | increase 18% - 25 | % | |||||||||||
Diluted earnings per share (EPS) |
$ | 1.16 | $ | 1.43 - $1.47 | $ | 1.43 - $1.47 | |||||||||
Year-over-year change |
increase 23% - 27 | % | increase 23% - 27 | % | |||||||||||
Total QUALCOMM (GAAP) |
|||||||||||||||
Revenues |
$ | 5.67 | B | $ | 6.7B - $7.1B | $ | 6.7B - $7.1 | B | |||||||
Year-over-year change |
increase 18% - 25 | % | increase 18% - 25 | % | |||||||||||
Diluted earnings per share (EPS) (1) |
$ | 1.26 | $ | 1.19 - $1.23 | $ | 1.19 - $1.23 | |||||||||
Year-over-year change |
decrease 2% - 6 | % | decrease 2% - 6 | % | |||||||||||
Diluted EPS attributable to in-process R&D |
n/a | n/a | $ | (0.01 | ) | ||||||||||
Diluted EPS attributable to QSI |
$ | 0.06 | $ | (0.06 | ) | $ | (0.06 | ) | |||||||
Diluted EPS attributable to estimated share-based compensation |
n/a | $ | (0.18 | ) | $ | (0.20 | ) | ||||||||
Diluted EPS attributable to tax benefit related to prior years |
$ | 0.04 | $ | 0.00 | $ | 0.03 | |||||||||
Metrics |
|||||||||||||||
Fiscal year* CDMA/WCDMA handset unit wholesale average selling price |
approx. $215 | approx. $210 | approx. $210 |
* | Shipments in Sep. to June quarters, reported in Dec. to Sep. quarters |
Prior Guidance | Current Guidance | Prior Guidance | Current Guidance | |||||||||||||||||
Calendar 2005 | Calendar 2005 | Calendar 2006 | Calendar 2006 | |||||||||||||||||
CDMA/WCDMA handset unit shipments | Estimates | Estimates | Estimates | Estimates | ||||||||||||||||
March quarter actuals |
approx. 43M | approx. 43M | not provided | not provided | ||||||||||||||||
June quarter actuals |
approx. 48M | approx. 48M | not provided | not provided | ||||||||||||||||
September quarter |
51M - 53M | approx. 52M | not provided | not provided | ||||||||||||||||
December quarter |
not provided | 59M - 61M | not provided | not provided | ||||||||||||||||
Calendar year range |
200M - 205M | 202M - 204M | 255M - 270M | 255M - 270M | ||||||||||||||||
Midpoint | Midpoint | Midpoint | Midpoint | |||||||||||||||||
CDMA/WCDMA units |
202M | 203M | 262M | 262M | ||||||||||||||||
CDMA units |
158M | 158M | 176M | 176M | ||||||||||||||||
WCDMA units |
44M | 45M | 86M | 86M |
(1) | The dilution per share related to the acquired in-process R&D and the increased estimated share-based compensation for fiscal 2006 are offset by tax benefits related to prior years, and as a result, fiscal 2006 guidance for total QUALCOMM has not changed from our prior guidance. |
QUALCOMM Announces First Quarter Fiscal 2006 Results | Page 7 of 18 |
Estimated Share- | Total | |||||||||||||||||||||||||||||||||||
Reconciling | QUALCOMM Pro | Based | Tax | QUALCOMM | ||||||||||||||||||||||||||||||||
Segments | QCT | QTL | QWI | Items (1) | Forma | Compensation (2) | Adjustment (3) | QSI | (GAAP) | |||||||||||||||||||||||||||
Revenues |
$ | 1,033 | $ | 564 | $ | 166 | $ | (22 | ) | $ | 1,741 | $ | | $ | | $ | | $ | 1,741 | |||||||||||||||||
Change from prior year |
19 | % | 41 | % | 4 | % | N/M | 25 | % | | | | 25 | % | ||||||||||||||||||||||
Change from prior quarter |
13 | % | 13 | % | (2 | %) | N/M | 12 | % | | | | 12 | % | ||||||||||||||||||||||
EBT |
$ | 300 | $ | 517 | $ | 17 | $ | 72 | $ | 906 | $ | (122 | ) | $ | | $ | (48 | ) | $ | 736 | ||||||||||||||||
Change from prior year |
24 | % | 44 | % | 6 | % | N/M | 36 | % | N/M | | N/M | 5 | % | ||||||||||||||||||||||
Change from prior quarter |
13 | % | 15 | % | (19 | %) | N/M | 11 | % | N/M | | N/M | (6 | %) | ||||||||||||||||||||||
Net income (loss) |
667 | (82 | ) | 56 | (21 | ) | 620 | |||||||||||||||||||||||||||||
Change from prior year |
41 | % | N/M | N/M | N/M | 21 | % | |||||||||||||||||||||||||||||
Change from prior quarter |
23 | % | N/M | N/M | N/M | 15 | % | |||||||||||||||||||||||||||||
Diluted EPS |
$ | 0.39 | $ | (0.05 | ) | $ | 0.03 | $ | (0.01 | ) | $ | 0.36 | ||||||||||||||||||||||||
Change from prior year |
39 | % | N/M | N/M | N/M | 20 | % | |||||||||||||||||||||||||||||
Change from prior quarter |
22 | % | N/M | N/M | N/M | 13 | % | |||||||||||||||||||||||||||||
Diluted shares used |
1,702 | 1,702 | 1,702 | 1,702 | 1,702 |
Total | ||||||||||||||||||||||||||||
Reconciling | QUALCOMM Pro | QUALCOMM | ||||||||||||||||||||||||||
Segments | QCT | QTL | QWI | Items (1) | Forma | QSI | (GAAP) | |||||||||||||||||||||
Revenues |
$ | 912 | $ | 497 | $ | 170 | $ | (19 | ) | $ | 1,560 | $ | | $ | 1,560 | |||||||||||||
EBT |
266 | 451 | 21 | 75 | 813 | (27 | ) | $ | 786 | |||||||||||||||||||
Net income (loss) |
543 | (5 | ) | $ | 538 | |||||||||||||||||||||||
Diluted EPS |
$ | 0.32 | $ | | $ | 0.32 | ||||||||||||||||||||||
Diluted shares used |
1,686 | 1,686 | 1,686 |
Total | ||||||||||||||||||||||||||||
Reconciling | QUALCOMM Pro | QUALCOMM | ||||||||||||||||||||||||||
Segments | QCT | QTL | QWI | Items (1) | Forma | QSI | (GAAP) | |||||||||||||||||||||
Revenues |
$ | 865 | $ | 400 | $ | 159 | $ | (34 | ) | $ | 1,390 | $ | | $ | 1,390 | |||||||||||||
EBT |
242 | 358 | 16 | 48 | 664 | 40 | $ | 704 | ||||||||||||||||||||
Net income |
474 | 39 | $ | 513 | ||||||||||||||||||||||||
Diluted EPS |
$ | 0.28 | $ | 0.02 | $ | 0.30 | ||||||||||||||||||||||
Diluted shares used |
1,704 | 1,704 | 1,704 |
Total | ||||||||||||||||||||||||||||||||
Reconciling | QUALCOMM Pro | Tax Adjustments | QUALCOMM | |||||||||||||||||||||||||||||
Segments | QCT | QTL | QWI | Items (1) | Forma | (4) | QSI | (GAAP) | ||||||||||||||||||||||||
Revenues |
$ | 746 | $ | 493 | $ | 151 | $ | (25 | ) | $ | 1,365 | $ | | $ | | $ | 1,365 | |||||||||||||||
EBT |
158 | 448 | 8 | 52 | 666 | | (33 | ) | $ | 633 | ||||||||||||||||||||||
Net income (loss) |
487 | 55 | (10 | ) | $ | 532 | ||||||||||||||||||||||||||
Diluted EPS |
$ | 0.29 | $ | 0.03 | $ | (0.01 | ) | $ | 0.31 | |||||||||||||||||||||||
Diluted shares used |
1,704 | 1,704 | 1,704 | 1,704 |
Total | ||||||||||||||||||||||||||||||||
Reconciling | QUALCOMM Pro | Tax Adjustments | QUALCOMM | |||||||||||||||||||||||||||||
Segments | QCT | QTL | QWI | Items (1) | Forma | (4)(5) | QSI | (GAAP) | ||||||||||||||||||||||||
Revenues |
$ | 3,290 | $ | 1,839 | $ | 644 | $ | (100 | ) | $ | 5,673 | $ | | $ | | $ | 5,673 | |||||||||||||||
EBT |
852 | 1,663 | 57 | 227 | 2,799 | | 10 | $ | 2,809 | |||||||||||||||||||||||
Net income |
1,970 | 71 | 102 | $ | 2,143 | |||||||||||||||||||||||||||
Diluted EPS |
$ | 1.16 | $ | 0.04 | $ | 0.06 | $ | 1.26 | ||||||||||||||||||||||||
Diluted shares used |
1,694 | 1,694 | 1,694 | 1,694 |
(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) | During the first quarter of fiscal 2006, the Company adopted the fair value recognition provisions of FAS 123R using a modified prospective application. Under this method, prior periods are not revised for comparative purposes. Share-based compensation is included in operating expenses as part of employee-related costs but is not allocated to our segments as these estimated costs are not considered relevant by management in evaluating segment performance. | |
(3) | During the first quarter of fiscal 2006, the Company recorded a $56 million tax benefit, or $0.03 per share, related to the expected impact of prior year tax audits completed during the quarter. For fiscal 2006 pro forma presentation, results have been adjusted to exclude this tax benefit attributable to prior years. |
QUALCOMM Announces First Quarter Fiscal 2006 Results | Page 8 of 18 |
(4) | During the second quarter of fiscal 2005, the Company decreased its estimate of R&D costs allocable to the Companys foreign operations under an intercompany cost sharing agreement. Due to this change in estimate, the effective tax rate in the second quarter for total QUALCOMM (GAAP) included a $55 million benefit, or $0.03 diluted earnings per share, related to fiscal 2004. For fiscal 2005 pro forma presentation, results have been adjusted to exclude the tax benefit attributable to fiscal 2004. |
(5) | During the third quarter of fiscal 2005, the Company made an election to compute its California tax on the basis of its U.S. operations only, which resulted in a $38 million tax benefit. Our effective tax rate in the third quarter of fiscal 2005 for total QUALCOMM (GAAP) includes a $16 million tax benefit, or $0.01 diluted earnings per share, for this California tax election related to fiscal 2004. For fiscal 2005 pro forma presentation, results have been adjusted to exclude the tax benefit attributable to fiscal 2004. |
| QCT shipped a new record of approximately 47 million MSM chips to customers worldwide during the first quarter of fiscal 2006, compared to approximately 39 million units in the same quarter of fiscal 2005 and approximately 40 million units in the fourth quarter of fiscal 2005. As previously reported, we have surpassed 2 billion cumulative chip shipments since we shipped the first CDMA MSM chip in 1996. | ||
| We announced our DMMX (DO Multicarrier Multilink eXtensions) and HMMX (HSDPA Multicarrier Multilink eXtensions) platforms to support the long-term roadmaps of EV-DO and HSDPA. | ||
| The number of 3G CDMA-based devices commercially available incorporating our MSMs continues to grow at an accelerating pace, with 154 1xEV-DO and 55 WCDMA commercial advanced 3G devices launched to date. | ||
| We actively supported the worlds first widespread High-Speed Downlink Packet Access (HSDPA) deployment recently launched by Cingular Wireless in the United States in December 2005. We worked with several leading device manufacturers to develop and validate multiple mobile devices for the HSDPA network, including certain models based on our MSM6275 chipset. |
| In the first quarter of fiscal 2006, three new licensees entered into CDMA subscriber equipment license agreements. One of the three agreements was with a WCDMA licensee in China, bringing the total WCDMA agreements with Chinese manufacturers to seven, all at our standard royalty rates. |
QUALCOMM Announces First Quarter Fiscal 2006 Results | Page 9 of 18 |
| Licensee information for the fourth quarter of fiscal 2005 as reported by licensees in the first quarter of fiscal 2006: |
o | Worldwide shipments of approximately 52 million CDMA2000 and WCDMA subscriber units at an average selling price of approximately $215 were reported. | ||
o | We estimate WCDMA royalties contributed approximately 40 percent of total royalties reported compared to approximately 32 percent in the year ago quarter and approximately 41 percent reported in the prior quarter. | ||
o | 22 handset suppliers actively supplied WCDMA products, compared to 17 reported in the fourth quarter of fiscal 2005. | ||
o | 48 handset suppliers actively supplied CDMA2000 1x and 1xEV-DO products, compared to 46 reported in the fourth quarter of fiscal 2005. |
| As of January 25, 2006, 59 wireless operators were offering BREW services in 28 countries, including new customers obtained as part of our ELATA acquisition. | ||
| Through December 2005, three operators, including ALLTEL, O2 and Sprint have entered into agreements to license the uiOne user interface offering. |
| We shipped approximately 11,800 satellite-based systems (OmniTRACS®, EutelTRACS and TruckMAIL) in the first quarter of fiscal 2006 compared to approximately 13,300 in the first quarter of fiscal 2005 and approximately 11,000 in the fourth quarter of fiscal 2005. This brings the cumulative total satellite-based systems shipped worldwide to more than 578,000. | ||
| We shipped approximately 15,100 terrestrial-based systems (OmniExpress®, GlobalTRACS® and T2 Untethered TrailerTRACS) in the first quarter of fiscal 2006 compared to approximately 11,600 terrestrial-based systems in the first quarter of fiscal 2005 and approximately 17,500 terrestrial-based systems in the fourth quarter of fiscal 2005. This brings the cumulative total terrestrial-based systems shipped worldwide to more than 100,000. |
QUALCOMM Announces First Quarter Fiscal 2006 Results | Page 10 of 18 |
| In December 2005, we announced plans to work with Verizon Wireless to bring its customers real-time mobile video over the MediaFLO USA network. We expect Verizon Wireless will be the first wireless service provider to use the MediaFLO USA network to deliver mobile TV services. | ||
| In January 2006, we conducted a live, over-the-air demonstration of FLO Technology with LG Electronics MobileComm (LG) and Samsung Electronics Co., Ltd., during the 2006 International Consumer Electronics Show in Las Vegas. The demonstrations were the first featuring FLO Technology on handsets from major device manufacturers. |
| In the second quarter of fiscal 2006, we completed the acquisition of Flarion Technologies, Inc., a developer of OFDMA technology. | ||
| In the second quarter of fiscal 2006 we also completed the acquisition of Berkana Wireless Inc., a fabless semiconductor company, that provides complementary metal oxide semiconductor (CMOS) radio frequency integrated circuits (RFICs). |
QUALCOMM Announces First Quarter Fiscal 2006 Results | Page 11 of 18 |
QUALCOMM Announces First Quarter Fiscal 2006 Results | Page 12 of 18 |
QUALCOMM Announces First Quarter Fiscal 2006 Results | Page 13 of 18 |
QUALCOMM Announces First Quarter Fiscal 2006 Results | Page 14 of 18 |
Three Months Ended December 25, 2005 | ||||||||||||||||||||
Estimated | Total | |||||||||||||||||||
QUALCOMM | Share-Based | Tax | QUALCOMM | |||||||||||||||||
Pro Forma | Compensation | Adjustment | QSI | (GAAP) | ||||||||||||||||
Revenues: |
||||||||||||||||||||
Equipment and services |
$ | 1,150 | $ | | $ | | $ | | $ | 1,150 | ||||||||||
Licensing and royalty fees |
591 | | | | 591 | |||||||||||||||
1,741 | | | | 1,741 | ||||||||||||||||
Operating expenses: |
||||||||||||||||||||
Cost of equipment and services revenues |
505 | 12 | | | 517 | |||||||||||||||
Research and development |
273 | 52 | | 15 | 340 | |||||||||||||||
Selling, general and administrative |
168 | 58 | | 13 | 239 | |||||||||||||||
Total operating expenses |
946 | 122 | | 28 | 1,096 | |||||||||||||||
Operating income (loss) |
795 | (122 | ) | (28 | ) | 645 | ||||||||||||||
Investment income (expense), net |
111 | (a) | | | (20 | )(b) | 91 | |||||||||||||
Income (loss) before income taxes |
906 | (122 | ) | | (48 | ) | 736 | |||||||||||||
Income tax (expense) benefit |
(239 | )(c) | 40 | 56 | 27 | (116 | )(c) | |||||||||||||
Net income (loss) |
$ | 667 | $ | (82 | ) | $ | 56 | $ | (21 | ) | $ | 620 | ||||||||
Earnings (loss) per common share: |
||||||||||||||||||||
Diluted |
$ | 0.39 | $ | (0.05 | ) | $ | 0.03 | $ | (0.01 | ) | $ | 0.36 | ||||||||
Shares used in per share calculations: |
||||||||||||||||||||
Diluted |
1,702 | 1,702 | 1,702 | 1,702 | 1,702 | |||||||||||||||
Supplemental Financial Data: | ||||||||||||||||||||
Operating Cash Flow |
$ | 713 | $ | (101 | )(e) | $ | | $ | (16 | ) | $ | 596 | ||||||||
Operating Cash Flow as a % of Revenue |
41 | % | 34 | % | ||||||||||||||||
Free Cash Flow (d) |
$ | 531 | $ | (101 | )(e) | $ | | $ | (47 | ) | $ | 383 | ||||||||
Free Cash Flow as a % of Revenue |
30 | % | 22 | % |
(a) | Includes $91 million in interest income related to cash, cash equivalents and marketable securities, which are not part of the Companys strategic investment portfolio, $20 million in net realized gains on marketable securities and $4 million in net gains on derivative instruments, partially offset by $3 million in other-than-temporary losses on marketable securities and $1 million of interest expense. | |
(b) | Includes $20 million in equity in losses of investees. | |
(c) | The first quarter of fiscal 2006 tax rate of 16% for total QUALCOMM (GAAP) is lower than the estimated annual effective tax rate of 22% due primarily to $56 million of tax benefits recorded in the first quarter related to the expected impact of prior year tax audits completed in the quarter. The fiscal year 2006 estimated effective tax rate is approximately 22% for total QUALCOMM (GAAP) and approximately 26% for QUALCOMM pro forma. | |
(d) | Free Cash Flow is calculated as net cash provided by operating activities less capital expenditures. Reconciliation of these amounts is included in the Condensed Consolidated Statements of Cash Flows and Marketable Securities for the three months ended December 25, 2005, included herein. | |
(e) | Tax benefits from stock options exercised during the quarter. |
QUALCOMM Announces First Quarter Fiscal 2006 Results | Page 15 of 18 |
Three Months Ended December 25, 2005 | ||||||||||||||||||||
Estimated | Total | |||||||||||||||||||
QUALCOMM | Share-Based | Tax | QUALCOMM | |||||||||||||||||
Pro Forma | Compensation | Adjustment | QSI | (GAAP) | ||||||||||||||||
Earnings before taxes, depreciation, amortization and other adjustments (1) |
$ | 927 | $ | (101 | )(b) | $ | | $ | (27 | ) | $ | 799 | ||||||||
Working capital changes and taxes paid (2) |
(214 | ) | | | 11 | (203 | ) | |||||||||||||
Net cash provided (used) by operating activities |
713 | (101 | ) | | (16 | ) | 596 | |||||||||||||
Capital expenditures |
(182 | ) | | | (31 | ) | (213 | ) | ||||||||||||
Free cash flow (Net cash provided by operating activities less
capital expenditures) |
531 | (101 | ) | | (47 | ) | 383 | |||||||||||||
Net additional share capital |
181 | | | | 181 | |||||||||||||||
Tax benefits from stock options exercised during the quarter |
| 101 | (b) | | | 101 | ||||||||||||||
Other investments and acquisitions |
(4 | ) | | | (2 | ) | (6 | ) | ||||||||||||
Other items, net |
3 | | | 3 | 6 | |||||||||||||||
Changes in fair value and other changes to marketable securities |
49 | | | 6 | 55 | |||||||||||||||
Marketable securities pending settlement |
(3 | ) | | | | (3 | ) | |||||||||||||
Transfer from QSI (3) |
8 | | | (8 | ) | | ||||||||||||||
Transfer to QSI (4) |
(54 | ) | | | 54 | | ||||||||||||||
Net increase in cash, cash equivalents and marketable securities (5) |
$ | 711 | $ | | $ | | $ | 6 | $ | 717 | ||||||||||
|
||||||||||||||||||||
(1) Reconciliation to GAAP: |
||||||||||||||||||||
Net income (loss) |
$ | 667 | $ | (82 | ) | $ | 56 | $ | (21 | ) | $ | 620 | ||||||||
Share-based compensation |
| 82 | | | 82 | |||||||||||||||
Other non-cash adjustments (a) |
268 | (101 | ) (b) | (56 | ) | (6 | ) | 105 | ||||||||||||
Net realized gains on marketable securities and other investments |
(20 | ) | | | | (20 | ) | |||||||||||||
Net taxes paid |
12 | | | | 12 | |||||||||||||||
Earnings before taxes, depreciation, amortization and other adjustments |
$ | 927 | $ | (101 | ) | $ | | $ | (27 | ) | $ | 799 | ||||||||
(2) Reconciliation to GAAP: |
||||||||||||||||||||
Increase in cash resulting from changes in working capital |
$ | (202 | ) | $ | | $ | | $ | 11 | $ | (191 | ) | ||||||||
Net taxes paid |
(12 | ) | | | | (12 | ) | |||||||||||||
Working capital changes and taxes paid |
$ | (214 | ) | $ | | $ | | $ | 11 | $ | (203 | ) | ||||||||
(3) Cash from loan payments and sale of equity securities.
|
||||||||||||||||||||
(4) Funding for strategic debt and equity investments and other QSI
operating expenses. |
||||||||||||||||||||
(5) Reconciliation to GAAP cash flow statement: |
||||||||||||||||||||
Net increase in cash and cash equivalents (GAAP) |
$ | (493 | ) | $ | | $ | | $ | | $ | (493 | ) | ||||||||
Plus: Net purchases of marketable securities |
1,158 | | | | 1,158 | |||||||||||||||
Plus: Net increase in fair value and other changes to marketable
securities |
49 | | | 6 | 55 | |||||||||||||||
Less: Net decrease in marketable securities pending settlement |
(3 | ) | | | | (3 | ) | |||||||||||||
Net increase in cash, cash equivalents and marketable securities |
$ | 711 | $ | | $ | | $ | 6 | $ | 717 | ||||||||||
(a) | See detail on the following page. | |
(b) | Tax benefits from stock options exercised during the quarter. |
QUALCOMM Announces First Quarter Fiscal 2006 Results | Page 16 of 18 |
Three Months Ended December 25, 2005 | ||||||||||||||||||||||||
Estimated | Total | |||||||||||||||||||||||
QUALCOMM | Share Based | Tax | QUALCOMM | |||||||||||||||||||||
Pro Forma | Compensation | Adjustment | QSI | (GAAP) | ||||||||||||||||||||
(a | ) | Other non-cash adjustments are comprised of: |
||||||||||||||||||||||
Depreciation and amortization |
$ | 57 | $ | | $ | | $ | 1 | $ | 58 | ||||||||||||||
Gain or loss on derivative instruments |
(4 | ) | | | | (4 | ) | |||||||||||||||||
Other-than-temporary losses on
marketable securities and other investments |
3 | | | | 3 | |||||||||||||||||||
Equity in losses of investees |
| | | 20 | 20 | |||||||||||||||||||
Tax benefits from stock options exercised during the quarter |
| (101 | ) | | | (101 | ) | |||||||||||||||||
Non-cash income tax expense (benefit) |
227 | | (56 | ) | (27 | ) | 144 | |||||||||||||||||
Other non-cash charges and (credits) |
(15 | ) | | | | (15 | ) | |||||||||||||||||
Total non-cash adjustments |
$ | 268 | $ | (101 | ) | $ | (56 | ) | $ | (6 | ) | $ | 105 | |||||||||||
Three Months Ended December 26, 2004 | ||||||||||||
Total | ||||||||||||
QUALCOMM | QUALCOMM | |||||||||||
Pro Forma | QSI | (GAAP) | ||||||||||
Net cash provided by operating activities |
$ | 387 | $ | 10 | $ | 397 | ||||||
Capital expenditures |
(112 | ) | (76 | ) | (188 | ) | ||||||
Free cash flow (Net cash provided by operating activities less capital expenditures) |
$ | 275 | $ | (66 | ) | $ | 209 | |||||
QUALCOMM Announces First Quarter Fiscal 2006 Results | Page 17 of 18 |
December 25, | September 25, | |||||||
2005 | 2005 | |||||||
ASSETS | ||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 1,577 | $ | 2,070 | ||||
Marketable securities |
5,407 | 4,478 | ||||||
Accounts receivable, net |
728 | 544 | ||||||
Inventories |
195 | 177 | ||||||
Deferred tax assets |
351 | 343 | ||||||
Other current assets |
141 | 179 | ||||||
Total current assets |
8,399 | 7,791 | ||||||
Marketable securities |
2,414 | 2,133 | ||||||
Property, plant and equipment, net |
1,154 | 1,022 | ||||||
Goodwill |
571 | 571 | ||||||
Deferred tax assets |
405 | 444 | ||||||
Other assets |
486 | 518 | ||||||
Total assets |
$ | 13,429 | $ | 12,479 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
Current liabilities: |
||||||||
Trade accounts payable |
$ | 431 | $ | 376 | ||||
Payroll and other benefits related liabilities |
179 | 196 | ||||||
Dividends payable |
148 | | ||||||
Unearned revenue |
149 | 163 | ||||||
Other current liabilities |
253 | 335 | ||||||
Total current liabilities |
1,160 | 1,070 | ||||||
Unearned revenue |
141 | 146 | ||||||
Other liabilities |
156 | 144 | ||||||
Total liabilities |
1,457 | 1,360 | ||||||
Stockholders equity: |
||||||||
Preferred stock, $0.0001 par value; issuable in series;
8 shares authorized; none outstanding at
December 25, 2005 and September 25, 2005, respectively |
| | ||||||
Common stock, $0.0001 par value; 6,000 shares authorized;
1,650 and 1,641 shares issued and outstanding at
December 25, 2005 and September 25, 2005, respectively |
| | ||||||
Paid-in capital |
7,134 | 6,753 | ||||||
Retained earnings |
4,800 | 4,328 | ||||||
Accumulated other comprehensive income |
38 | 38 | ||||||
Total stockholders equity |
11,972 | 11,119 | ||||||
Total liabilities and stockholders equity |
$ | 13,429 | $ | 12,479 | ||||
QUALCOMM Announces First Quarter Fiscal 2006 Results | Page 18 of 18 |
Three Months Ended | ||||||||
December 25, | December 26, | |||||||
2005 | 2004 | |||||||
Revenues: |
||||||||
Equipment and services |
$ | 1,150 | $ | 978 | ||||
Licensing and royalty fees |
591 | 412 | ||||||
1,741 | 1,390 | |||||||
Operating expenses: |
||||||||
Cost of equipment and services revenues |
517 | 430 | ||||||
Research and development |
340 | 228 | ||||||
Selling, general and administrative |
239 | 148 | ||||||
Total operating expenses |
1,096 | 806 | ||||||
Operating income |
645 | 584 | ||||||
Investment income, net |
91 | 120 | ||||||
Income before income taxes |
736 | 704 | ||||||
Income tax expense |
(116 | ) | (191 | ) | ||||
Net income |
$ | 620 | $ | 513 | ||||
Basic earnings per common share |
$ | 0.38 | $ | 0.31 | ||||
Diluted earnings per common share |
$ | 0.36 | $ | 0.30 | ||||
Shares used in per share calculations: |
||||||||
Basic |
1,645 | 1,639 | ||||||
Diluted |
1,702 | 1,704 | ||||||
Dividends per share announced |
$ | 0.09 | $ | 0.07 | ||||