| Revenues: $2.00 billion, up 28 percent year-over-year and 2 percent sequentially. | ||
| Net income: $614 million, up 14 percent year-over-year and down 5 percent sequentially. | ||
| Diluted earnings per share: $0.36, up 13 percent year-over-year and down 3 percent sequentially. | ||
| Effective tax rate: 24 percent. | ||
| Estimated share-based compensation: $76 million, net of tax. | ||
| Operating cash flow: $952 million, up 1 percent year-over-year; 48 percent of revenue. | ||
| Return of capital to stockholders: $528 million, including $198 million, or $0.12 per share, of cash dividends and $330 million, net of related premiums received, to repurchase 7.6 million shares of our common stock. |
| Revenues: $7.53 billion, up 33 percent year-over-year. | ||
| Net income: $2.47 billion, up 15 percent year-over-year. | ||
| Diluted earnings per share: $1.44, up 14 percent year-over-year. | ||
| Effective tax rate: 22 percent. | ||
| Estimated share-based compensation: $320 million, net of tax. | ||
| Operating cash flow: $3.25 billion, up 21 percent year-over-year; 43 percent of revenue. | ||
| Return of capital to stockholders: $2.19 billion, including $698 million, or $0.42 per share, of cash dividends and $1.49 billion, net of related premiums received, to repurchase 34.0 million shares of our common stock. |
QUALCOMM Announces Fourth Quarter Fiscal 2006 Results | Page 2 of 19 |
| Revenues: $2.00 billion, up 28 percent year-over-year and 2 percent sequentially. | ||
| Net income: $705 million, up 30 percent year-over-year and down 3 percent sequentially. | ||
| Diluted earnings per share: $0.42, up 31 percent year-over-year and even sequentially; excludes $0.05 loss per share attributable to estimated share-based compensation and $0.01 loss per share attributable to certain tax adjustments related to prior years. | ||
| Effective tax rate: 27 percent. | ||
| Free cash flow: $907 million, up 8 percent year-over-year; 45 percent of revenue. (Defined as net cash from operating activities less capital expenditures). |
| Revenues: $7.53 billion, up 33 percent year-over-year. | ||
| Net income: $2.80 billion, up 42 percent year-over-year. | ||
| Diluted earnings per share: $1.64, up 41 percent year-over-year; excludes $0.02 loss per share related to the QSI segment, $0.19 loss per share attributable to estimated share-based compensation, $0.02 net earnings per share attributable to certain tax adjustments related to prior years and $0.01 loss per share related to acquired in-process R&D expense. | ||
| Effective tax rate: 26 percent. | ||
| Free cash flow: $3.18 billion, up 42 percent year-over-year; 42 percent of revenue. |
QUALCOMM Announces Fourth Quarter Fiscal 2006 Results | Page 3 of 19 |
QUALCOMM Announces Fourth Quarter Fiscal 2006 Results | Page 4 of 19 |
Estimated Share- | Total | |||||||||||||||||||
QUALCOMM | Based | In-Process | QUALCOMM | |||||||||||||||||
($ in millions) | Pro Forma | Compensation | R&D Expense | QSI | (GAAP) | |||||||||||||||
Fourth quarter fiscal 2006 |
$ | 338 | $ | 56 | $ | 1 | $ | 16 | $ | 411 | ||||||||||
As a % of revenue |
17 | % | 21 | % | ||||||||||||||||
Fourth quarter fiscal 2005 |
$ | 255 | $ | | $ | | $ | 16 | $ | 271 | ||||||||||
As a % of revenue |
16 | % | 17 | % | ||||||||||||||||
Year-over-year change ($) |
33 | % | 52 | % |
QUALCOMM Announces Fourth Quarter Fiscal 2006 Results | Page 5 of 19 |
Estimated | Total | |||||||||||||||
QUALCOMM | Share-Based | QUALCOMM | ||||||||||||||
($ in millions) | Pro Forma | Compensation | QSI | (GAAP) | ||||||||||||
Fourth quarter fiscal 2006 |
$ | 237 | $ | 62 | $ | 22 | $ | 321 | ||||||||
As a % of revenue |
12 | % | 16 | % | ||||||||||||
Fourth quarter fiscal 2005 |
$ | 168 | $ | | $ | 10 | $ | 178 | ||||||||
As a % of revenue |
11 | % | 11 | % | ||||||||||||
Year-over-year change ($) |
41 | % | 120 | % | 80 | % |
QUALCOMM Announces Fourth Quarter Fiscal 2006 Results | Page 6 of 19 |
QUALCOMM Announces Fourth Quarter Fiscal 2006 Results | Page 7 of 19 |
Current Guidance | ||||||||
Q106 | Q107 | |||||||
Results | Estimates | |||||||
QUALCOMM Pro Forma |
||||||||
Revenues |
$1.74B | $1.98B-$2.08B | ||||||
Year-over-year change |
increase 14% - 19 | % | ||||||
Diluted earnings per share (EPS) |
$0.39 | $0.42-$0.44 | ||||||
Year-over-year change |
increase 8% - 13 | % | ||||||
Total QUALCOMM (GAAP) |
||||||||
Revenues |
$1.74B | $1.98B-$2.08B | ||||||
Year-over-year change |
increase 14% - 19% | |||||||
Diluted earnings per share (EPS) |
$0.36 | $0.35-$0.37 | ||||||
Year-over-year change |
decrease 3% - increase 3 | % | ||||||
Diluted EPS attributable to QSI |
($0.01 | ) | ($0.02 | ) | ||||
Diluted EPS attributable to estimated
share-based compensation |
($0.05 | ) | ($0.05 | ) | ||||
Diluted EPS attributable to tax items related to
prior years |
$0.03 | n/a | ||||||
Metrics |
||||||||
MSM Shipments |
approx. 47M | approx. 55M - 58M | ||||||
CDMA/WCDMA handset units shipped |
approx. 52M | * | approx. 74M - 76M | * | ||||
CDMA/WCDMA handset unit wholesale average selling
price |
approx. $215 | * | approx. $209 | * |
* | Shipments in Sept. quarter, reported in Dec. quarter |
Current Guidance | ||||||||
FY 2006 | FY 2007 | |||||||
Results | Estimates (1) | |||||||
QUALCOMM Pro Forma |
||||||||
Revenues |
$7.53B | $8.1B-$8.6B | ||||||
Year-over-year change |
increase 8% - 14 | % | ||||||
Diluted earnings per share (EPS) |
$1.64 | $1.76-$1.81 | ||||||
Year-over-year change |
increase 7% - 10 | % | ||||||
Total QUALCOMM (GAAP) |
||||||||
Revenues |
$7.53B | $8.1B-$8.6B | ||||||
Year-over-year change |
increase 8% - 14 | % | ||||||
Diluted earnings per share (EPS) |
$1.44 | $1.45-$1.50 | ||||||
Year-over-year change |
increase 1% - 4% | |||||||
Diluted EPS attributable to in-process R&D |
($0.01 | ) | n/a | |||||
Diluted EPS attributable to QSI |
($0.02 | ) | ($0.11 | ) | ||||
Diluted EPS attributable to estimated share-based compensation |
($0.19 | ) | ($0.20 | ) | ||||
Diluted EPS attributable to tax items related to prior years |
$0.02 | n/a | ||||||
Metrics |
||||||||
Fiscal year* CDMA/WCDMA handset unit wholesale average selling price |
approx. $215 | approx. $205 |
* | Shipments in Sept. to June quarters, reported in Dec. to Sept. quarters |
Prior Guidance | Current Guidance | Current Guidance | ||||||||||
Calendar 2006 | Calendar 2006 | Calendar 2007 | ||||||||||
CDMA/WCDMA handset unit shipments | Estimates | Estimates | Estimates | |||||||||
March quarter actuals |
approx. 66M | approx. 66M | not provided | |||||||||
June quarter |
approx. 67M - 70M | approx. 70M | not provided | |||||||||
September quarter |
not provided | approx. 74M - 76M | not provided | |||||||||
December quarter |
not provided | not provided | not provided | |||||||||
Calendar year range |
approx. 285M - 295M | approx. 290M - 298M | approx. 368M - 388M | |||||||||
Midpoint | Midpoint | Midpoint | ||||||||||
CDMA/WCDMA units |
approx. 290M | approx. 294M | approx. 378M | |||||||||
CDMA units |
approx. 190M | approx. 196M | approx. 203M | |||||||||
WCDMA units |
approx. 100M | approx. 98M | approx. 175M |
(1) | Current FY 2007 estimates do not reflect the potential adverse impact on our results, approximately $0.04 to $0.06 diluted earnings per share, of Nokia not paying royalties in the fourth quarter of fiscal 2007 for June quarter shipments. Further details are included in the introductory paragraph which precedes this Business Outlook table. | |
Sums may not equal totals due to rounding. |
QUALCOMM Announces Fourth Quarter Fiscal 2006 Results
|
Page 8 of 19 |
Estimated Share- | Total | |||||||||||||||||||||||||||||||||||||||
Reconciling | QUALCOMM | Based | In-Process R&D | QUALCOMM | ||||||||||||||||||||||||||||||||||||
Segments | QCT | QTL | QWI | Items (1) | Pro Forma | Compensation (2) | Tax Items (3) | (4) | QSI (5) | (GAAP) | ||||||||||||||||||||||||||||||
Revenues |
$ | 1,147 | $ | 705 | $ | 180 | $ | (33 | ) | $ | 1,999 | $ | | $ | | $ | | $ | | $ | 1,999 | |||||||||||||||||||
Change from prior year |
26 | % | 42 | % | 6 | % | N/M | 28 | % | | | | | 28 | % | |||||||||||||||||||||||||
Change from prior quarter |
1 | % | 3 | % | 11 | % | N/M | 2 | % | | | | | 2 | % | |||||||||||||||||||||||||
EBT |
$ | 279 | $ | 635 | $ | 27 | $ | 20 | $ | 961 | $ | (127 | ) | $ | | $ | (1 | ) | $ | (23 | ) | $ | 810 | |||||||||||||||||
Change from prior year |
5 | % | 41 | % | 29 | % | N/M | 18 | % | N/M | N/M | N/M | N/M | 3 | % | |||||||||||||||||||||||||
Change from prior quarter |
(8 | %) | 3 | % | 42 | % | N/M | (2 | %) | N/M | N/M | N/M | N/M | (2 | %) | |||||||||||||||||||||||||
Net income (loss) |
$ | 705 | $ | (76 | ) | $ | (16 | ) | $ | (1 | ) | $ | 2 | $ | 614 | |||||||||||||||||||||||||
Change from prior year |
30 | % | N/M | N/M | N/M | N/M | 14 | % | ||||||||||||||||||||||||||||||||
Change from prior quarter |
(3 | %) | N/M | N/M | N/M | N/M | (5 | %) | ||||||||||||||||||||||||||||||||
Diluted EPS |
$ | 0.42 | $ | (0.05 | ) | $ | (0.01 | ) | $ | | $ | | $ | 0.36 | ||||||||||||||||||||||||||
Change from prior year |
31 | % | N/M | N/M | N/M | N/M | 13 | % | ||||||||||||||||||||||||||||||||
Change from prior quarter |
0 | % | N/M | N/M | N/M | N/M | (3 | %) | ||||||||||||||||||||||||||||||||
Diluted shares used |
1,693 | 1,693 | 1,693 | 1,693 | 1,693 | 1,693 |
Estimated Share- | Total | |||||||||||||||||||||||||||||||
Reconciling | QUALCOMM Pro | Based | QUALCOMM | |||||||||||||||||||||||||||||
Segments | QCT | QTL | QWI | Items (1) | Forma | Compensation (2) | QSI (5) | (GAAP) | ||||||||||||||||||||||||
Revenues |
$ | 1,133 | $ | 683 | $ | 162 | $ | (27 | ) | $ | 1,951 | $ | | $ | | $ | 1,951 | |||||||||||||||
EBT |
303 | 619 | 19 | 35 | 976 | (126 | ) | (26 | ) | 824 | ||||||||||||||||||||||
Net income (loss) |
726 | (83 | ) | | 643 | |||||||||||||||||||||||||||
Diluted EPS |
$ | 0.42 | $ | (0.05 | ) | $ | | $ | 0.37 | |||||||||||||||||||||||
Diluted shares used |
1,728 | 1,728 | 1,728 | 1,728 |
Total | ||||||||||||||||||||||||||||
Reconciling | QUALCOMM Pro | QUALCOMM | ||||||||||||||||||||||||||
Segments | QCT | QTL | QWI | Items (1) | Forma | QSI (5) | (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 |
Estimated Share- | Tax | Total | ||||||||||||||||||||||||||||||||||
Reconciling | QUALCOMM Pro | Based | Items | QUALCOMM | ||||||||||||||||||||||||||||||||
Segments | QCT | QTL | QWI | Items (1) | Forma | Compensation (2) | (6) | QSI (5) | (GAAP) | |||||||||||||||||||||||||||
Revenues |
$ | 1,033 | $ | 564 | $ | 166 | $ | (22 | ) | $ | 1,741 | $ | | $ | | $ | | $ | 1,741 | |||||||||||||||||
EBT |
300 | 517 | 17 | 72 | 906 | (122 | ) | | (48 | ) | 736 | |||||||||||||||||||||||||
Net income (loss) |
667 | (82 | ) | 56 | (21 | ) | 620 | |||||||||||||||||||||||||||||
Diluted EPS |
$ | 0.39 | $ | (0.05 | ) | $ | 0.03 | $ | (0.01 | ) | $ | 0.36 | ||||||||||||||||||||||||
Diluted shares used |
1,702 | 1,702 | 1,702 | 1,702 | 1,702 |
Estimated Share- | Total | |||||||||||||||||||||||||||||||||||||||
Reconciling | QUALCOMM Pro | Based | Tax Items (3) | In-Process R&D | QUALCOMM | |||||||||||||||||||||||||||||||||||
Segments | QCT | QTL | QWI | Items (1) | Forma | Compensation (2) | (6) | (4) | QSI | (GAAP) | ||||||||||||||||||||||||||||||
Revenues |
$ | 4,332 | $ | 2,631 | $ | 670 | $ | (107 | ) | $ | 7,526 | $ | | $ | | $ | | $ | | $ | 7,526 | |||||||||||||||||||
Change from prior year |
32 | % | 43 | % | 4 | % | N/M | 33 | % | | | | | 33 | % | |||||||||||||||||||||||||
EBT |
$ | 1,134 | $ | 2,397 | $ | 80 | $ | 195 | $ | 3,806 | $ | (495 | ) | $ | | $ | (22 | ) | $ | (133 | ) | $ | 3,156 | |||||||||||||||||
Change from prior year |
33 | % | 44 | % | 40 | % | N/M | 36 | % | N/M | | | N/M | 12 | % | |||||||||||||||||||||||||
Net income (loss) |
$ | 2,804 | $ | (320 | ) | $ | 40 | $ | (22 | ) | $ | (32 | ) | $ | 2,470 | |||||||||||||||||||||||||
Change from prior year |
42 | % | N/M | N/M | N/M | N/M | 15 | % | ||||||||||||||||||||||||||||||||
Diluted EPS |
$ | 1.64 | $ | (0.19 | ) | $ | 0.02 | $ | (0.01 | ) | $ | (0.02 | ) | $ | 1.44 | |||||||||||||||||||||||||
Change from prior year |
41 | % | N/M | N/M | N/M | N/M | 14 | % | ||||||||||||||||||||||||||||||||
Diluted shares used |
1,711 | 1,711 | 1,711 | 1,711 | 1,711 | 1,711 |
Total | ||||||||||||||||||||||||||||||||
Reconciling | QUALCOMM Pro | Tax Items | QUALCOMM | |||||||||||||||||||||||||||||
Segments | QCT | QTL | QWI | Items (1) | Forma | (7)(8) | 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 nonreportable 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, nonreportable segment results, interest expense and the elimination of intercompany profit. |
QUALCOMM Announces Fourth Quarter Fiscal 2006 Results
|
Page 9 of 19 |
(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 fourth quarter of fiscal 2006, the Company refined its estimate of R&D costs allocable to the Companys foreign operations to reflect our actual results and updated forecast of future benefits to the parties under an intercompany cost sharing agreement. Due to this adjustment, the effective tax rate in the fourth quarter of fiscal 2006 for total QUALCOMM (GAAP) includes $33 million of tax expense, or $0.02 per diluted share, related to fiscal 2004. In addition, the Company recorded a $17 million tax benefit, or $0.01 diluted earnings per share, related to the impact of prior year tax audits completed during the fourth quarter of fiscal 2006. For fiscal 2006 pro forma presentation, results have been adjusted to exclude these tax adjustments related to prior years. | |
(4) | During fiscal 2006, the Company recorded $22 million of expenses related to acquired in-process R&D associated with three acquisitions completed during the year. $21 million of this expense was recorded in the second quarter of fiscal 2006 and $1 million was recorded in the fourth quarter of fiscal 2006. For fiscal 2006 pro forma presentation, results have been adjusted to exclude these expenses as they are unrelated to the Companys ongoing core operating businesses and are also not allocated to our segments as these costs are not considered relevant by management in evaluating segment performance. | |
(5) | At fiscal year-end, the sum of the quarterly tax provisions for each column, including QSI, equals the annual tax provisions for each column computed in accordance with GAAP. In interim quarters, the tax provision for the QSI operating segment is computed by subtracting the tax provision for QUALCOMM pro forma, the tax adjustment column and the tax provision related to estimated share-based compensation from the tax provision for total QUALCOMM (GAAP). | |
(6) | During the first quarter of fiscal 2006, the Company recorded a $56 million tax benefit, or $0.03 diluted earnings 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 adjustment attributable to prior years. | |
(7) | 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 this tax adjustment attributable to fiscal 2004. | |
(8) | 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 adjustment attributable to fiscal 2004. | |
N/M Not Meaningful | ||
Sums may not equal totals due to rounding. |
QUALCOMM Announces Fourth Quarter Fiscal 2006 Results
|
Page 10 of 19 |
QUALCOMM Announces Fourth Quarter Fiscal 2006 Results
|
Page 11 of 19 |
QUALCOMM Announces Fourth Quarter Fiscal 2006 Results
|
Page 12 of 19 |
QUALCOMM Announces Fourth Quarter Fiscal 2006 Results
|
Page 13 of 19 |
Three Months Ended September 24, 2006 | ||||||||||||||||||||||||
Estimated | Total | |||||||||||||||||||||||
QUALCOMM | Share-Based | In-Process | QUALCOMM | |||||||||||||||||||||
Pro Forma | Compensation | Tax Items | R&D | QSI | (GAAP) | |||||||||||||||||||
Revenues: |
||||||||||||||||||||||||
Equipment and services |
$ | 1,264 | $ | | $ | | $ | | $ | | $ | 1,264 | ||||||||||||
Licensing and royalty fees |
735 | | | | | 735 | ||||||||||||||||||
Total revenues |
1,999 | | | | | 1,999 | ||||||||||||||||||
Operating expenses: |
||||||||||||||||||||||||
Cost of equipment and services revenues |
577 | 9 | | | | 586 | ||||||||||||||||||
Research and development |
338 | 56 | | 1 | 16 | 411 | ||||||||||||||||||
Selling, general and administrative |
237 | 62 | | | 22 | 321 | ||||||||||||||||||
Total operating expenses |
1,152 | 127 | | 1 | 38 | 1,318 | ||||||||||||||||||
Operating income (loss) |
847 | (127 | ) | | (1 | ) | (38 | ) | 681 | |||||||||||||||
Investment income, net |
114 | (a) | | | | 15 | (b) | 129 | ||||||||||||||||
Income (loss) before income taxes |
961 | (127 | ) | | (1 | ) | (23 | ) | 810 | |||||||||||||||
Income tax (expense) benefit |
(256 | )(c) | 51 | (16 | ) | | 25 | (d) | (196 | )(c) | ||||||||||||||
Net income (loss) |
$ | 705 | $ | (76 | ) | $ | (16 | ) | $ | (1 | ) | $ | 2 | $ | 614 | |||||||||
Earnings (loss) per common share: |
||||||||||||||||||||||||
Diluted |
$ | 0.42 | $ | (0.05 | ) | $ | (0.01 | ) | $ | (0.00 | ) | $ | 0.00 | $ | 0.36 | |||||||||
Shares used in per share calculations: |
||||||||||||||||||||||||
Diluted |
1,693 | 1,693 | 1,693 | 1,693 | 1,693 | 1,693 | ||||||||||||||||||
Supplemental Financial Data: |
||||||||||||||||||||||||
Operating Cash Flow |
$ | 1,007 | $ | (27 | )(f) | $ | | $ | | $ | (28 | ) | $ | 952 | ||||||||||
Operating Cash Flow as a % of Revenue |
50 | % | 48 | % | ||||||||||||||||||||
Free Cash Flow (e) |
$ | 907 | $ | (27 | )(f) | $ | | $ | | $ | (57 | ) | $ | 823 | ||||||||||
Free Cash Flow as a % of Revenue |
45 | % | 41 | % |
(a) | Includes $100 million in interest and dividend income related to cash, cash equivalents and marketable securities, which are not part of the Companys strategic investment portfolio, and $30 million in net realized gains on investments, partially offset by $11 million in losses on derivative instruments, primarily related to the increase in the fair value of the put option liabilities related to our share repurchase program, $3 million in other-than-temporary losses on investments and $2 million in interest expense. | |
(b) | Includes $12 million in net realized gains on investments, $2 million in interest and dividend income and $1 million in equity in income of investees. | |
(c) | The fourth quarter of fiscal 2006 tax rates are approximately 24% for total QUALCOMM (GAAP) and approximately 27% for QUALCOMM pro forma. | |
(d) | At fiscal year-end, the sum of the quarterly tax provisions for each column, including QSI, will equal the annual tax provisions for each column computed in accordance with GAAP. In interim quarters, the tax provision for the QSI operating segment is computed by subtracting the tax provision for QUALCOMM pro forma and the tax provision related to estimated share-based compensation from the tax provision for total QUALCOMM (GAAP). | |
(e) | 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 September 24, 2006, included herein. | |
(f) | Tax benefits from stock options exercised during the quarter. |
QUALCOMM Announces Fourth Quarter Fiscal 2006 Results
|
Page 14 of 19 |
Twelve Months Ended September 24, 2006 | ||||||||||||||||||||||||
Estimated | Total | |||||||||||||||||||||||
QUALCOMM | Share-Based | In-Process | QUALCOMM | |||||||||||||||||||||
Pro Forma | Compensation | Tax Items | R&D | QSI | (GAAP) | |||||||||||||||||||
Revenues: |
||||||||||||||||||||||||
Equipment and services |
$ | 4,776 | $ | | $ | | $ | | $ | | $ | 4,776 | ||||||||||||
Licensing and royalty fees |
2,750 | | | | | 2,750 | ||||||||||||||||||
Total revenues |
7,526 | | | | | 7,526 | ||||||||||||||||||
Operating expenses: |
||||||||||||||||||||||||
Cost of equipment and services revenues |
2,141 | 41 | | | | 2,182 | ||||||||||||||||||
Research and development |
1,236 | 216 | | 22 | 64 | 1,538 | ||||||||||||||||||
Selling, general and administrative |
808 | 238 | | | 70 | 1,116 | ||||||||||||||||||
Total operating expenses |
4,185 | 495 | | 22 | 134 | 4,836 | ||||||||||||||||||
Operating income (loss) |
3,341 | (495 | ) | | (22 | ) | (134 | ) | 2,690 | |||||||||||||||
Investment income, net |
465 | (a) | | | | 1 | (b) | 466 | ||||||||||||||||
Income (loss) before income taxes |
3,806 | (495 | ) | | (22 | ) | (133 | ) | 3,156 | |||||||||||||||
Income tax (expense) benefit |
(1,002 | )(c) | 175 | 40 | | 101 | (d) | (686 | )(c) | |||||||||||||||
Net income (loss) |
$ | 2,804 | $ | (320 | ) | $ | 40 | $ | (22 | ) | $ | (32 | ) | $ | 2,470 | |||||||||
Earnings (loss) per common share: |
||||||||||||||||||||||||
Diluted |
$ | 1.64 | $ | (0.19 | ) | $ | 0.02 | $ | (0.01 | ) | $ | (0.02 | ) | $ | 1.44 | |||||||||
Shares used in per share calculations: |
||||||||||||||||||||||||
Diluted |
1,711 | 1,711 | 1,711 | 1,711 | 1,711 | 1,711 | ||||||||||||||||||
Supplemental Financial Data: |
||||||||||||||||||||||||
Operating Cash Flow |
$ | 3,746 | $ | (403) | (f) | $ | | $ | | $ | (90 | ) | $ | 3,253 | ||||||||||
Operating Cash Flow as a % of Revenue |
50 | % | 43 | % | ||||||||||||||||||||
Free Cash Flow (e) |
$ | 3,180 | $ | (403) | (f) | $ | | $ | | $ | (209 | ) | $ | 2,568 | ||||||||||
Free Cash Flow as a % of Revenue |
42 | % | 34 | % |
(a) | Includes $410 million in interest and dividend income related to cash, cash equivalents and marketable securities, which are not part of the Companys strategic investment portfolio, and $106 million in net realized gains on investments, partially offset by $29 million in losses on derivative instruments, primarily related to the increase in the fair values of the put option liabilities related to our share repurchase program, $20 million in other-than-temporary losses on investments and $2 million of interest expense. | |
(b) | Includes $30 million in net realized gains on investments and $6 million in interest and dividend income, partially offset by $29 million in equity in losses of investees, $4 million in other-than-temporary losses on investments and $2 million of interest expense. | |
(c) | The annual effective tax rate for fiscal 2006 for total QUALCOMM (GAAP) is approximately 22% and QUALCOMM pro forma is approximately 26%. | |
(d) | At fiscal year-end, the sum of the quarterly tax provisions for each column, including QSI, equals the annual tax provisions for each column computed in accordance with GAAP. The fiscal 2006 QSI tax provision includes tax benefits as a result of QSIs loss before taxes and realized gains on investments that increased our forecasted utilization of capital loss carryforwards. | |
(e) | 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 twelve months ended September 24, 2006, included herein. | |
(f) | Tax benefits from stock options exercised during the period. |
QUALCOMM Announces Fourth Quarter Fiscal 2006 Results
|
Page 15 of 19 |
Three Months Ended September 24, 2006 | ||||||||||||||||||||||||
Estimated | In- | Total | ||||||||||||||||||||||
QUALCOMM | Share-Based | Tax | Process | QUALCOMM | ||||||||||||||||||||
Pro Forma | Compensation | Items | R&D | QSI | (GAAP) | |||||||||||||||||||
Earnings (loss) before taxes, depreciation,
amortization and other adjustments (1) |
$ | 1,019 | $ | (27 | ) | $ | | $ | | $ | (34 | ) | $ | 958 | ||||||||||
Working capital changes and taxes paid (2) |
(12 | ) | | | | 6 | (6 | ) | ||||||||||||||||
Net cash provided (used) by operating activities |
1,007 | (27 | ) | | | (28 | ) | 952 | ||||||||||||||||
Capital expenditures |
(100 | ) | | | | (29 | ) | (129 | ) | |||||||||||||||
Free cash flow (Net cash provided by operating activities
less capital expenditures) |
907 | (27 | ) | | | (57 | ) | 823 | ||||||||||||||||
Net additional share capital |
69 | | | | | 69 | ||||||||||||||||||
Repurchase and retirement of common stock |
(335 | ) | | | | | (335 | ) | ||||||||||||||||
Tax benefits from stock options exercised during the period |
| 27 | | | | 27 | ||||||||||||||||||
Dividends paid |
(198 | ) | | | | | (198 | ) | ||||||||||||||||
Other investments and acquisitions, net of cash acquired |
(13 | ) | | | | (4 | ) | (17 | ) | |||||||||||||||
Other items, net |
(8 | ) | | | | 1 | (7 | ) | ||||||||||||||||
Changes in fair value and other changes to marketable securities |
164 | | | | 6 | 170 | ||||||||||||||||||
Marketable securities pending settlement |
(61 | ) | | | | | (61 | ) | ||||||||||||||||
Transfer from QSI (3) |
13 | | | | (13 | ) | | |||||||||||||||||
Transfer to QSI (4) |
(61 | ) | | | | 61 | | |||||||||||||||||
Net increase (decrease) in cash, cash equivalents
and marketable securities (5) |
$ | 477 | $ | | $ | | $ | | $ | (6 | ) | $ | 471 | |||||||||||
(1) Reconciliation to GAAP: |
||||||||||||||||||||||||
Net income (loss) |
$ | 705 | $ | (76 | ) | $ | (16 | ) | $ | (1 | ) | $ | 2 | $ | 614 | |||||||||
Share-based compensation, net of tax benefit |
| 76 | | | | 76 | ||||||||||||||||||
Other adjustments (a) |
286 | (27 | )(b) | 16 | 1 | (24 | ) | 252 | ||||||||||||||||
Net realized gains on marketable securities and other investments |
(30 | ) | | | | (12 | ) | (42 | ) | |||||||||||||||
Net taxes paid |
58 | | | | | 58 | ||||||||||||||||||
Earnings (loss) before taxes, depreciation,
amortization and other adjustments |
$ | 1,019 | $ | (27 | ) | $ | | $ | | $ | (34 | ) | $ | 958 | ||||||||||
(2) Reconciliation to GAAP: |
||||||||||||||||||||||||
Increase in cash resulting from changes in working capital |
$ | 46 | $ | | $ | | $ | | $ | 6 | $ | 52 | ||||||||||||
Net taxes paid |
(58 | ) | | | | | (58 | ) | ||||||||||||||||
Working capital changes and taxes paid |
$ | (12 | ) | $ | | $ | | $ | | $ | 6 | $ | (6 | ) | ||||||||||
(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) |
$ | 452 | $ | | $ | | $ | | $ | | $ | 452 | ||||||||||||
Net sales and maturities of marketable securities |
(78 | ) | | | | (12 | ) | (90 | ) | |||||||||||||||
Net increase in fair value and other changes to
marketable securities |
164 | | | | 6 | 170 | ||||||||||||||||||
Net decrease in marketable securities pending settlement |
(61 | ) | | | | | (61 | ) | ||||||||||||||||
Net increase (decrease) in cash, cash equivalents and marketable
securities |
$ | 477 | $ | | $ | | $ | | $ | (6 | ) | $ | 471 | |||||||||||
(a) | See detail below. | |
(b) | Tax benefits from stock options exercised during the period. |
QUALCOMM Announces Fourth Quarter Fiscal 2006 Results
|
Page 16 of 19 |
Twelve Months Ended September 24, 2006 | ||||||||||||||||||||||||
Estimated | In- | Total | ||||||||||||||||||||||
QUALCOMM | Share-Based | Tax | Process | QUALCOMM | ||||||||||||||||||||
Pro Forma | Compensation | Items | R&D | QSI | (GAAP) | |||||||||||||||||||
Earnings (loss) before taxes, depreciation,
amortization and other adjustments (1) |
$ | 3,961 | $ | (403 | ) | $ | | $ | | $ | (120 | ) | $ | 3,438 | ||||||||||
Working capital changes and taxes paid (2) |
(215 | ) | | | | 30 | (185 | ) | ||||||||||||||||
Net cash provided (used) by operating activities |
3,746 | (403 | ) | | | (90 | ) | 3,253 | ||||||||||||||||
Capital expenditures |
(566 | ) | | | | (119 | ) | (685 | ) | |||||||||||||||
Free cash flow (Net cash provided by operating activities
less capital expenditures) |
3,180 | (403 | ) | | | (209 | ) | 2,568 | ||||||||||||||||
Net additional share capital |
692 | | | | | 692 | ||||||||||||||||||
Repurchase and retirement of common stock |
(1,500 | ) | | | | | (1,500 | ) | ||||||||||||||||
Tax benefits from stock options exercised during the period |
| 403 | | | | 403 | ||||||||||||||||||
Proceeds from put options |
11 | | | | | 11 | ||||||||||||||||||
Dividends paid |
(698 | ) | | | | | (698 | ) | ||||||||||||||||
Other investments and acquisitions, net of cash acquired |
(389 | ) | | | | (18 | ) | (407 | ) | |||||||||||||||
Other items, net |
(8 | ) | | | | 10 | 2 | |||||||||||||||||
Changes in fair value and other changes to marketable securities |
175 | | | | 54 | 229 | ||||||||||||||||||
Marketable securities pending settlement |
(32 | ) | | | | (32 | ) | |||||||||||||||||
Transfer from QSI (3) |
54 | | | | (54 | ) | | |||||||||||||||||
Transfer to QSI (4) |
(231 | ) | | | | 231 | | |||||||||||||||||
Net increase in cash, cash equivalents
and marketable securities (5) |
$ | 1,254 | $ | | $ | | $ | | $ | 14 | $ | 1,268 | ||||||||||||
(1) Reconciliation to GAAP: |
||||||||||||||||||||||||
Net income (loss) |
$ | 2,804 | $ | (320 | ) | $ | 40 | $ | (22 | ) | $ | (32 | ) | $ | 2,470 | |||||||||
Share-based compensation, net of tax benefit |
| 320 | | | | 320 | ||||||||||||||||||
Other adjustments (a) |
1,091 | (403 | )(b) | (40 | ) | 22 | (58 | ) | 612 | |||||||||||||||
Net realized gains on marketable securities and other investments |
(106 | ) | | | | (30 | ) | (136 | ) | |||||||||||||||
Net taxes paid |
172 | | | | | 172 | ||||||||||||||||||
Earnings (loss) before taxes, depreciation,
amortization and other adjustments |
$ | 3,961 | $ | (403 | ) | $ | | $ | | $ | (120 | ) | $ | 3,438 | ||||||||||
(2) Reconciliation to GAAP: |
||||||||||||||||||||||||
(Decrease) increase in cash resulting from changes in working capital |
$ | (43 | ) | $ | | $ | | $ | | $ | 30 | $ | (13 | ) | ||||||||||
Net taxes paid |
(172 | ) | | | | | (172 | ) | ||||||||||||||||
Working capital changes and taxes paid |
$ | (215 | ) | $ | | $ | | $ | | $ | 30 | $ | (185 | ) | ||||||||||
(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 decrease in cash and cash equivalents (GAAP) |
$ | (463 | ) | $ | | $ | | $ | | $ | | $ | (463 | ) | ||||||||||
Net purchases and maturities of marketable securities |
1,574 | | | | (40 | ) | 1,534 | |||||||||||||||||
Net increase in fair value and other changes to
marketable securities |
175 | | | | 54 | 229 | ||||||||||||||||||
Net decrease in marketable securities pending settlement |
(32 | ) | | | | | (32 | ) | ||||||||||||||||
Net increase in cash, cash equivalents and marketable securities |
$ | 1,254 | $ | | $ | | $ | | $ | 14 | $ | 1,268 | ||||||||||||
(a) | See detail below. | |
(b) | Tax benefits from stock options exercised during the period. |
QUALCOMM Announces Fourth Quarter Fiscal 2006 Results
|
Page 17 of 19 |
Three Months Ended September 24, 2006 | ||||||||||||||||||||||||||||
Estimated | Total | |||||||||||||||||||||||||||
QUALCOMM | Share-Based | Tax | In-Process | QUALCOMM | ||||||||||||||||||||||||
Pro Forma | Compensation | Items | R&D | QSI | (GAAP) | |||||||||||||||||||||||
(a | ) | Other adjustments are comprised of: |
||||||||||||||||||||||||||
Depreciation and amortization |
$ | 79 | $ | | $ | | $ | | $ | 3 | $ | 82 | ||||||||||||||||
Losses on derivative instruments |
11 | | | | | 11 | ||||||||||||||||||||||
Other-than-temporary losses on
marketable securities and other investments |
3 | | | | | 3 | ||||||||||||||||||||||
Equity in earnings of investees |
| | | | (1 | ) | (1 | ) | ||||||||||||||||||||
Tax benefits from stock options exercised
during the period |
| (27 | ) | | | | (27 | ) | ||||||||||||||||||||
Non-cash income tax expense (benefit) |
199 | | 16 | | (25 | ) | 190 | |||||||||||||||||||||
Other items, net |
(6 | ) | | | 1 | (1 | ) | (6 | ) | |||||||||||||||||||
Total other adjustments |
$ | 286 | $ | (27 | ) | $ | 16 | $ | 1 | $ | (24 | ) | $ | 252 | ||||||||||||||
Twelve Months Ended September 24, 2006 | ||||||||||||||||||||||||||||
Estimated | Total | |||||||||||||||||||||||||||
QUALCOMM | Share-Based | Tax | In-Process | QUALCOMM | ||||||||||||||||||||||||
Pro Forma | Compensation | Items | R&D | QSI | (GAAP) | |||||||||||||||||||||||
(a | ) | Other adjustments are comprised of: |
||||||||||||||||||||||||||
Depreciation and amortization |
$ | 263 | $ | | $ | | $ | | $ | 9 | $ | 272 | ||||||||||||||||
Losses on derivative instruments |
29 | | | | | 29 | ||||||||||||||||||||||
Other-than-temporary losses on
marketable securities and other investments |
20 | | | | 4 | 24 | ||||||||||||||||||||||
Equity in losses of investees |
| | | | 29 | 29 | ||||||||||||||||||||||
Tax benefits from stock options exercised
during the period |
| (403 | ) | | | | (403 | ) | ||||||||||||||||||||
Non-cash income tax expense (benefit) |
830 | | (40 | ) | | (101 | ) | 689 | ||||||||||||||||||||
Other items, net |
(51 | ) | | | 22 | 1 | (28 | ) | ||||||||||||||||||||
Total other adjustments |
$ | 1,091 | $ | (403 | ) | $ | (40 | ) | $ | 22 | $ | (58 | ) | $ | 612 | |||||||||||||
Three Months Ended September 25, 2005 | ||||||||||||
Total | ||||||||||||
QUALCOMM | QUALCOMM | |||||||||||
Pro forma | QSI | (GAAP) | ||||||||||
Net cash provided by operating activities |
$ | 964 | $ | (19 | ) | $ | 945 | |||||
Capital expenditures |
(126 | ) | (12 | ) | (138 | ) | ||||||
Free cash flow (Net cash provided by
operating activities less capital expenditures) |
$ | 838 | $ | (31 | ) | $ | 807 | |||||
Twelve Months Ended September 25, 2005 | ||||||||||||
Total | ||||||||||||
QUALCOMM | QUALCOMM | |||||||||||
Pro Forma | QSI | (GAAP) | ||||||||||
Net cash provided by operating activities |
$ | 2,722 | $ | (36 | ) | $ | 2,686 | |||||
Capital expenditures |
(482 | ) | (94 | ) | (576 | ) | ||||||
Free cash flow (Net cash provided by
operating activities less capital expenditures) |
$ | 2,240 | $ | (130 | ) | $ | 2,110 | |||||
QUALCOMM Announces Fourth Quarter Fiscal 2006 Results
|
Page 18 of 19 |
September 24, | September 25, | |||||||
2006 | 2005 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 1,607 | $ | 2,070 | ||||
Marketable securities |
4,114 | 4,478 | ||||||
Accounts receivable, net |
700 | 544 | ||||||
Inventories |
250 | 177 | ||||||
Deferred tax assets |
235 | 343 | ||||||
Other current assets |
143 | 179 | ||||||
Total current assets |
7,049 | 7,791 | ||||||
Marketable securities |
4,228 | 2,133 | ||||||
Property, plant and equipment, net |
1,482 | 1,022 | ||||||
Goodwill |
1,230 | 571 | ||||||
Deferred tax assets |
512 | 444 | ||||||
Other assets |
707 | 518 | ||||||
Total assets |
$ | 15,208 | $ | 12,479 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
Current liabilities: |
||||||||
Trade accounts payable |
$ | 420 | $ | 376 | ||||
Payroll and other benefits related liabilities |
273 | 196 | ||||||
Unearned revenue |
197 | 163 | ||||||
Other current liabilities |
532 | 335 | ||||||
Total current liabilities |
1,422 | 1,070 | ||||||
Unearned revenue |
141 | 146 | ||||||
Other liabilities |
239 | 144 | ||||||
Total liabilities |
1,802 | 1,360 | ||||||
Stockholders equity: |
||||||||
Preferred stock, $0.0001 par value; issuable in series;
8 shares authorized; none outstanding at
September 24, 2006 and September 25, 2005, respectively |
| | ||||||
Common stock, $0.0001 par value; 6,000 shares authorized;
1,652 and 1,640 shares issued and outstanding at
September 24, 2006 and September 25, 2005, respectively |
| | ||||||
Paid-in capital |
7,242 | 6,753 | ||||||
Retained earnings |
6,100 | 4,328 | ||||||
Accumulated other comprehensive income |
64 | 38 | ||||||
Total stockholders equity |
13,406 | 11,119 | ||||||
Total liabilities and stockholders equity |
$ | 15,208 | $ | 12,479 | ||||
QUALCOMM Announces Fourth Quarter Fiscal 2006 Results
|
Page 19 of 19 |
Three Months Ended | Twelve Months Ended | |||||||||||||||
September 24, | September 25, | September 24, | September 25, | |||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Revenues: |
||||||||||||||||
Equipment and services |
$ | 1,264 | $ | 1,035 | $ | 4,776 | $ | 3,744 | ||||||||
Licensing and royalty fees |
735 | 525 | 2,750 | 1,929 | ||||||||||||
Total revenues |
1,999 | 1,560 | 7,526 | 5,673 | ||||||||||||
Operating expenses: |
||||||||||||||||
Cost of equipment and services revenues |
586 | 441 | 2,182 | 1,645 | ||||||||||||
Research and development |
411 | 271 | 1,538 | 1,011 | ||||||||||||
Selling, general and administrative |
321 | 178 | 1,116 | 631 | ||||||||||||
Total operating expenses |
1,318 | 890 | 4,836 | 3,287 | ||||||||||||
Operating income |
681 | 670 | 2,690 | 2,386 | ||||||||||||
Investment income, net |
129 | 116 | 466 | 423 | ||||||||||||
Income before income taxes |
810 | 786 | 3,156 | 2,809 | ||||||||||||
Income tax expense |
(196 | ) | (248 | ) | (686 | ) | (666 | ) | ||||||||
Net income |
$ | 614 | $ | 538 | $ | 2,470 | $ | 2,143 | ||||||||
Basic earnings per common share |
$ | 0.37 | $ | 0.33 | $ | 1.49 | $ | 1.31 | ||||||||
Diluted earnings per common share |
$ | 0.36 | $ | 0.32 | $ | 1.44 | $ | 1.27 | ||||||||
Shares used in per share calculations: |
||||||||||||||||
Basic |
1,652 | 1,634 | 1,659 | 1,638 | ||||||||||||
Diluted |
1,693 | 1,686 | 1,711 | 1,694 | ||||||||||||
Dividends per share paid |
$ | 0.12 | $ | 0.07 | $ | 0.42 | $ | 0.32 | ||||||||
Dividends per share announced |
$ | 0.12 | $ | 0.07 | $ | 0.42 | $ | 0.32 | ||||||||