| Revenues: $2.33 billion, up 19 percent year-over-year and 5 percent sequentially. | ||
| Net income: $798 million, up 24 percent year-over-year and 10 percent sequentially. | ||
| Diluted earnings per share: $0.47, up 27 percent year-over-year and 9 percent sequentially. | ||
| Effective tax rate: 18 percent for the quarter. Fiscal 2007 estimated tax rate of approximately 19 percent. | ||
| Estimated share-based compensation: $76 million, net of tax, down 8 percent year-over-year and 10 percent sequentially. | ||
| Operating cash flow: $988 million, up 21 percent year-over-year; 42 percent of revenues. | ||
| Return of capital to stockholders: $363 million in the third quarter, including $234 million of cash dividends, or $0.14 per share, and $129 million to repurchase 3.1 million shares of our common stock. |
| Revenues: $2.33 billion, up 19 percent year-over-year and 5 percent sequentially. | ||
| Net income: $934 million, up 29 percent year-over-year and 11 percent sequentially. |
QUALCOMM Announces Record Third Quarter Fiscal 2007 Results | Page 2 of 18 |
| Diluted earnings per share: $0.55, up 31 percent year-over-year and 10 percent sequentially; excludes $0.04 loss per share attributable to the QSI segment and $0.04 loss per share attributable to certain estimated share-based compensation. | ||
| Effective tax rate: 21 percent for the quarter. Fiscal 2007 estimated tax rate of approximately 23 percent. | ||
| Free cash flow: $977 million, up 23 percent year-over-year; 42 percent of revenues. (Defined as net cash from operating activities less capital expenditures). |
QUALCOMM Announces Record Third Quarter Fiscal 2007 Results | Page 3 of 18 |
QUALCOMM Announces Record Third Quarter Fiscal 2007 Results | Page 4 of 18 |
Estimated | Total | |||||||||||||||
QUALCOMM | Share-Based | QUALCOMM | ||||||||||||||
($ in millions) | Pro Forma | Compensation | QSI | (GAAP) | ||||||||||||
Third quarter fiscal 2007 |
$ | 385 | $ | 50 | $ | 19 | $ | 454 | ||||||||
As a % of revenue |
17 | % | 20 | % | ||||||||||||
Third quarter fiscal 2006 |
$ | 322 | $ | 56 | $ | 17 | $ | 395 | ||||||||
As a % of revenue |
17 | % | 20 | % | ||||||||||||
Year-over-year change ($) |
20 | % | (11 | %) | 12 | % | 15 | % |
Estimated | Total | |||||||||||||||
QUALCOMM | Share-Based | QUALCOMM | ||||||||||||||
($ in millions) | Pro Forma | Compensation | QSI | (GAAP) | ||||||||||||
Third quarter fiscal 2007 |
$ | 307 | $ | 54 | $ | 40 | $ | 401 | ||||||||
As a % of revenue |
13 | % | 17 | % | ||||||||||||
Third quarter fiscal 2006 |
$ | 214 | $ | 60 | $ | 19 | $ | 293 | ||||||||
As a % of revenue |
11 | % | 15 | % | ||||||||||||
Year-over-year change ($) |
43 | % | (10 | %) | 111 | % | 37 | % |
QUALCOMM Announces Record Third Quarter Fiscal 2007 Results | Page 5 of 18 |
QUALCOMM Announces Record Third Quarter Fiscal 2007 Results | Page 6 of 18 |
QUALCOMM Announces Record Third Quarter Fiscal 2007 Results | Page 7 of 18 |
FOURTH FISCAL QUARTER | ||||||||
Current Guidance | ||||||||
Q406 | Q407 | |||||||
Results | Estimates (1) | |||||||
QUALCOMM Pro Forma |
||||||||
Revenues |
$2.00B | $2.15B - $2.25B | ||||||
Year-over-year change |
increase 8% - 13% | |||||||
Diluted earnings per share (EPS) |
$0.42 | $0.48 - $0.50 | ||||||
Year-over-year change |
increase 14% - 19% | |||||||
Total QUALCOMM (GAAP) |
||||||||
Revenues |
$2.00B | $2.15B - $2.25B | ||||||
Year-over-year change |
increase 8% - 13% | |||||||
Diluted earnings per share (EPS) |
$0.36 | $0.41 - $0.43 | ||||||
Year-over-year change |
increase 14% - 19% | |||||||
Diluted EPS attributable to QSI |
$0.00 | ($0.02) | ||||||
Diluted EPS attributable to estimated share-based compensation |
($0.05) | ($0.05) | ||||||
Metrics |
||||||||
MSM Shipments |
approx. 56M | approx. 65M - 68M | ||||||
CDMA/WCDMA handset units shipped (2) |
approx. 70M* | approx. 90M - 94M* | ||||||
CDMA/WCDMA handset unit wholesale average selling price (2) |
approx. $223* | approx. $222* | ||||||
* | Shipments in June quarter, reported in Sept. quarter |
FISCAL YEAR | ||||||||||||
Prior Guidance | Current Guidance | |||||||||||
FY 2006 | FY 2007 | FY 2007 | ||||||||||
Results | Estimates (1) | Estimates (1) | ||||||||||
QUALCOMM Pro Forma
|
||||||||||||
Revenues |
$7.53B | $8.4B - $8.7B | $8.72B - $8.82B | |||||||||
Year-over-year change |
increase 12% - 16% | increase 16% - 17% | ||||||||||
Diluted earnings per share (EPS) |
$1.64 | $1.84 - $1.88 | $1.95 - $1.97 | |||||||||
Year-over-year change |
increase 12% - 15% | increase 19% - 20% | ||||||||||
Total QUALCOMM (GAAP)
|
||||||||||||
Revenues |
$7.53B | $8.4B - $8.7B | $8.72B - $8.82B | |||||||||
Year-over-year change |
increase 12% - 16% | increase 16% - 17% | ||||||||||
Diluted earnings per share (EPS) |
$1.44 | $1.57 - $1.61 | $1.69 - $1.71 | |||||||||
Year-over-year change |
increase 9% - 12% | increase 17% - 19% | ||||||||||
Diluted EPS attributable to in-process R&D |
($0.01) | ($0.01) | ($0.01) | |||||||||
Diluted EPS attributable to QSI |
($0.02) | ($0.09) | ($0.08) | |||||||||
Diluted EPS attributable to estimated share-based compensation |
($0.19) | ($0.20) | ($0.19) | |||||||||
Diluted EPS attributable to tax items related to prior years |
$0.02 | $0.02 | $0.02 | |||||||||
Metrics
|
||||||||||||
Fiscal year* CDMA/WCDMA handset unit wholesale average selling price (2) |
approx. $215 | approx. $208 | approx. $216 | |||||||||
* | Shipments in Sept. to June quarters, reported in Dec. to Sept. quarters |
CALENDAR YEAR Handset Estimates (2) | ||||||||||||
Prior Guidance | Current Guidance | |||||||||||
Calendar 2007 | Calendar 2007 | |||||||||||
CDMA/WCDMA handset unit shipments | Calendar 2006 | Estimates | Estimates | |||||||||
March quarter |
approx. 66M | approx. 81M - 85M | approx. 88M | |||||||||
June quarter |
approx. 70M | not provided | approx. 90M - 94M | |||||||||
September quarter |
approx. 76M | not provided | not provided | |||||||||
December quarter |
approx. 91M | not provided | not provided | |||||||||
Calendar year range (approx.) |
301M | 373M - 393M | 378M - 398M | |||||||||
Midpoint | Midpoint | Midpoint | ||||||||||
CDMA/WCDMA units |
approx. 301M | approx. 383M | approx. 388M | |||||||||
CDMA units |
approx. 200M | approx. 208M | approx. 208M | |||||||||
WCDMA units |
approx. 101M | approx. 175M | approx. 180M | |||||||||
(1) | These estimates do not reflect the potential opportunity of Nokia paying royalties in the fourth quarter of fiscal 2007 for June quarter shipments. Our current estimate of such opportunity is approximately $0.05 diluted earnings per share, compared to our prior estimate of approximately $0.04 to $0.05 diluted earnings per share. | |
(2) | CDMA/WCDMA handset unit shipments and average selling prices are provided for the total market. |
QUALCOMM Announces Record Third Quarter Fiscal 2007 Results
|
Page 8 of 18 |
Estimated | Total | |||||||||||||||||||||||||||||||
Reconciling | QUALCOMM | Share-Based | QUALCOMM | |||||||||||||||||||||||||||||
Segments |
QCT | QTL | QWI | Items (2) | Pro Forma | Compensation (3) | QSI (4) | (GAAP) | ||||||||||||||||||||||||
Revenues |
$ | 1,367 | $ | 766 | $ | 196 | $ | (4 | ) | $ | 2,325 | $ | | $ | | $ | 2,325 | |||||||||||||||
Change from prior year |
21 | % | 20 | % | 10 | % | N/M | 19 | % | 19 | % | |||||||||||||||||||||
Change from prior quarter |
9 | % | 1 | % | (1 | %) | N/M | 5 | % | 5 | % | |||||||||||||||||||||
EBT |
$ | 439 | $ | 668 | $ | 18 | $ | 52 | $ | 1,177 | $ | (114 | ) | $ | (91 | ) | $ | 972 | ||||||||||||||
Change from prior year |
27 | % | 16 | % | 0 | % | N/M | 21 | % | (10 | %) | 250 | % | 18 | % | |||||||||||||||||
Change from prior quarter |
19 | % | 5 | % | (10 | %) | N/M | 6 | % | (10 | %) | 117 | % | 5 | % | |||||||||||||||||
Net income (loss) |
$ | 934 | $ | (75 | ) | $ | (61 | ) | $ | 798 | ||||||||||||||||||||||
Change from prior year |
29 | % | (10 | %) | N/M | 24 | % | |||||||||||||||||||||||||
Change from prior quarter |
11 | % | (10 | %) | 205 | % | 10 | % | ||||||||||||||||||||||||
Diluted EPS |
$ | 0.55 | $ | (0.04 | ) | $ | (0.04 | ) | $ | 0.47 | ||||||||||||||||||||||
Change from prior year |
31 | % | (20 | %) | N/M | 27 | % | |||||||||||||||||||||||||
Change from prior quarter |
10 | % | (20 | %) | 300 | % | 9 | % | ||||||||||||||||||||||||
Diluted shares used |
1,704 | 1,704 | 1,704 | 1,704 |
Estimated | Total | |||||||||||||||||||||||||||||||||||
Reconciling | QUALCOMM | Share-Based | In-process | QUALCOMM | ||||||||||||||||||||||||||||||||
Segments |
QCT | QTL | QWI | Items (2) | Pro Forma | Compensation (3) | R&D | QSI (4) | (GAAP) | |||||||||||||||||||||||||||
Revenues |
$ | 1,259 | $ | 759 | $ | 198 | $ | 5 | $ | 2,221 | $ | | $ | | $ | | $ | 2,221 | ||||||||||||||||||
EBT |
$ | 368 | $ | 636 | $ | 20 | $ | 82 | $ | 1,106 | $ | (126 | ) | $ | (10 | ) | $ | (42 | ) | $ | 928 | |||||||||||||||
Net income (loss) |
$ | 838 | $ | (83 | ) | $ | (9 | ) | $ | (20 | ) | $ | 726 | |||||||||||||||||||||||
Diluted EPS |
$ | 0.50 | $ | (0.05 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | 0.43 | |||||||||||||||||||||||
Diluted shares used |
1,693 | 1,693 | 1,693 | 1,693 | 1,693 |
Estimated | Total | |||||||||||||||||||||||||||||||
Reconciling | QUALCOMM | Share-Based | QUALCOMM | |||||||||||||||||||||||||||||
Segments |
QCT(1)* | QTL(1)* | QWI (1)* | Items (1)(2)* | Pro Forma | Compensation (3) | QSI (4) | (GAAP) | ||||||||||||||||||||||||
Revenues |
$ | 1,133 | $ | 640 | $ | 178 | $ | | $ | 1,951 | $ | | $ | | $ | 1,951 | ||||||||||||||||
EBT |
346 | 576 | 18 | 36 | 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 |
Estimated | Total | |||||||||||||||||||||||||||||||||||||||
Reconciling | QUALCOMM | Share-Based | In-Process | QUALCOMM | ||||||||||||||||||||||||||||||||||||
Segments |
QCT(1)* | QTL(1)* | QWI (1)* | Items (1)(2)* | Pro Forma | Compensation (3) | Tax Items | R&D | QSI (4) | (GAAP) | ||||||||||||||||||||||||||||||
Revenues |
$ | 1,147 | $ | 661 | $ | 196 | $ | (5 | ) | $ | 1,999 | $ | | $ | | $ | | $ | | $ | 1,999 | |||||||||||||||||||
EBT |
323 | 591 | 26 | 21 | 961 | (127 | ) | | (1 | ) | (23 | ) | 810 | |||||||||||||||||||||||||||
Net income (loss) |
705 | (76 | ) | (16 | ) | (1 | ) | 2 | 614 | |||||||||||||||||||||||||||||||
Diluted EPS |
$ | 0.42 | $ | (0.05 | ) | $ | (0.01 | ) | $ | | $ | | $ | 0.36 | ||||||||||||||||||||||||||
Diluted shares used |
1,693 | 1,693 | 1,693 | 1,693 | 1,693 | 1,693 |
Estimated | Total | |||||||||||||||||||||||||||||||||||||||
Reconciling | QUALCOMM | Share-Based | In-Process | QUALCOMM | ||||||||||||||||||||||||||||||||||||
Segments |
QCT(1)* | QTL(1)* | QWI (1)* | Items (1)(2)* | Pro Forma | Compensation (3) | Tax Items | R&D | QSI (4) | (GAAP) | ||||||||||||||||||||||||||||||
Revenues |
$ | 4,332 | $ | 2,467 | $ | 731 | $ | (4 | ) | $ | 7,526 | $ | | $ | | $ | | $ | | $ | 7,526 | |||||||||||||||||||
EBT |
1,298 | 2,233 | 78 | 197 | 3,806 | (495 | ) | | (22 | ) | (133 | ) | 3,156 | |||||||||||||||||||||||||||
Net income (loss) |
2,804 | (320 | ) | 40 | (22 | ) | (32 | ) | 2,470 | |||||||||||||||||||||||||||||||
Diluted EPS |
$ | 1.64 | $ | (0.19 | ) | $ | 0.02 | $ | (0.01 | ) | $ | (0.02 | ) | $ | 1.44 | |||||||||||||||||||||||||
Diluted shares used |
1,711 | 1,711 | 1,711 | 1,711 | 1,711 | 1,711 |
Estimated | Total | |||||||||||||||||||||||||||||||||||||||
Reconciling | QUALCOMM | Share-Based | Tax | In-Process | QUALCOMM | |||||||||||||||||||||||||||||||||||
Segments |
QCT | QTL | QWI | Items (2) | Pro Forma | Compensation (3) | Items (5) | R&D | QSI (4) | (GAAP) | ||||||||||||||||||||||||||||||
Revenues |
$ | 3,856 | $ | 2,125 | $ | 583 | $ | 1 | $ | 6,565 | $ | | $ | | $ | | $ | | $ | 6,565 | ||||||||||||||||||||
Change from prior year |
21 | % | 18 | % | 9 | % | N/M | 19 | % | 19 | % | |||||||||||||||||||||||||||||
EBT |
$ | 1,123 | $ | 1,803 | $ | 58 | $ | 250 | $ | 3,234 | $ | (370 | ) | $ | | $ | (10 | ) | $ | (176 | ) | $ | 2,678 | |||||||||||||||||
Change from prior year |
15 | % | 10 | % | 14 | % | N/M | 14 | % | 1 | % | (52 | %) | 60 | % | 14 | % | |||||||||||||||||||||||
Net income (loss) |
2,494 | (244 | ) | 33 | (9 | ) | (103 | ) | $ | 2,171 | ||||||||||||||||||||||||||||||
Change from prior year |
19 | % | 0 | % | (41 | %) | (57 | %) | 203 | % | 17 | % | ||||||||||||||||||||||||||||
Diluted EPS |
$ | 1.47 | $ | (0.14 | ) | $ | 0.02 | $ | (0.01 | ) | $ | (0.06 | ) | $ | 1.28 | |||||||||||||||||||||||||
Change from prior year |
20 | % | 0 | % | (33 | %) | 0 | % | 200 | % | 19 | % | ||||||||||||||||||||||||||||
Diluted shares used |
1,694 | 1,694 | 1,694 | 1,694 | 1,694 | 1,694 |
Estimated | Total | |||||||||||||||||||||||||||||||||||||||
Reconciling | QUALCOMM | Share-Based | In-Process | QUALCOMM | ||||||||||||||||||||||||||||||||||||
Segments |
QCT(1)* | QTL(1)* | QWI (1)* | Items (1)(2)* | Pro Forma | Compensation (3) | Tax Items | R&D | QSI (4) | (GAAP) | ||||||||||||||||||||||||||||||
Revenues |
$ | 3,184 | $ | 1,806 | $ | 535 | $ | 2 | $ | 5,527 | $ | | $ | | $ | | $ | | $ | 5,527 | ||||||||||||||||||||
EBT |
975 | 1,642 | 51 | 177 | 2,845 | (368 | ) | | (21 | ) | (110 | ) | 2,346 | |||||||||||||||||||||||||||
Net income |
2,098 | (243 | ) | 56 | (21 | ) | (34 | ) | 1,856 | |||||||||||||||||||||||||||||||
Diluted EPS |
$ | 1.22 | $ | (0.14 | ) | $ | 0.03 | $ | (0.01 | ) | $ | (0.02 | ) | $ | 1.08 | |||||||||||||||||||||||||
Diluted shares used |
1,717 | 1,717 | 1,717 | 1,717 | 1,717 | 1,717 |
QUALCOMM Announces Record Third Quarter Fiscal 2007 Results | Page 9 of 18 |
(1) | During the first quarter of fiscal 2007, the Company reassessed the intersegment royalty charged to QCT by QTL and determined that the royalty should be eliminated starting in fiscal 2007 for management reporting purposes. As a result, QCT did not record a royalty to QTL in the first nine months of fiscal 2007. The Company also reorganized the QUALCOMM Wireless Systems (QWS) division into the QWBS division within the QWI segment. Revenues and operating results relating to QWS were included in reconciling items through the end of fiscal 2006. Prior period segment information has been adjusted to conform to the new segment presentation. | |
(2) | 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 certain investment income, research and development expenses and marketing expenses that are not allocated to the segments for management reporting purposes, nonreportable segment results and the elimination of intersegment profit. | |
(3) | Certain share-based compensation is included in operating expenses as part of employee-related costs but is not allocated to the Companys segments as such costs are not considered relevant by management in evaluating segment performance. | |
(4) | 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 provisions related to estimated share-based compensation and in-process R&D from the tax provision for total QUALCOMM (GAAP). | |
(5) | During the first quarter of fiscal 2007, the federal R&D tax credit that expired on December 31, 2005 was extended by Congress for a period of two years beyond the prior expiration date. The Company recorded a tax benefit of $33 million, or $0.02 diluted earnings per share, related to fiscal 2006 in the first quarter of fiscal 2007 due to this retroactive extension. The effective tax rate for the first quarter of fiscal 2007 for total QUALCOMM (GAAP) was 17% primarily as a result of this benefit. The first quarter fiscal 2007 QUALCOMM pro forma results excluded this tax benefit attributable to 2006. |
* | As adjusted to conform to 2007 segment presentation |
QUALCOMM Announces Record Third Quarter Fiscal 2007 Results | Page 10 of 18 |
QUALCOMM Announces Record Third Quarter Fiscal 2007 Results | Page 11 of 18 |
QUALCOMM Announces Record Third Quarter Fiscal 2007 Results | Page 12 of 18 |
QUALCOMM Announces Record Third Quarter Fiscal 2007 Results | Page 13 of 18 |
Three Months Ended July 1, 2007 | ||||||||||||||||
Estimated | Total | |||||||||||||||
QUALCOMM | Share-Based | QUALCOMM | ||||||||||||||
Pro Forma | Compensation (a) | QSI | (GAAP) | |||||||||||||
Revenues: |
||||||||||||||||
Equipment and services |
$ | 1,484 | $ | | $ | | $ | 1,484 | ||||||||
Licensing and royalty fees |
841 | | | 841 | ||||||||||||
Total revenues |
2,325 | | | 2,325 | ||||||||||||
Operating expenses: |
||||||||||||||||
Cost of equipment and services
revenues |
642 | 10 | 36 | 688 | ||||||||||||
Research and development |
385 | 50 | 19 | 454 | ||||||||||||
Selling, general and administrative |
307 | 54 | 40 | 401 | ||||||||||||
Total operating expenses |
1,334 | 114 | 95 | 1,543 | ||||||||||||
Operating income (loss) |
991 | (114 | ) | (95 | ) | 782 | ||||||||||
Investment income, net |
186 | (b) | | 4 | (c) | 190 | ||||||||||
Income (loss) before income taxes |
1,177 | (114 | ) | (91 | ) | 972 | ||||||||||
Income tax (expense) benefit |
(243 | )(d) | 39 | 30 | (e) | (174 | )(d) | |||||||||
Net income (loss) |
$ | 934 | $ | (75 | ) | $ | (61 | ) | $ | 798 | ||||||
Earnings (loss) per common share: |
||||||||||||||||
Diluted |
$ | 0.55 | $ | (0.04 | ) | $ | (0.04 | ) | $ | 0.47 | ||||||
Shares used in per share calculations: |
||||||||||||||||
Diluted |
1,704 | 1,704 | 1,704 | 1,704 | ||||||||||||
Supplemental Financial Data: |
||||||||||||||||
Operating Cash Flow |
$ | 1,122 | $ | (80 | )(g) | $ | (54 | ) | $ | 988 | ||||||
Operating Cash Flow as a % of Revenues |
48 | % | 42 | % | ||||||||||||
Free Cash Flow (f) |
$ | 977 | $ | (80 | )(g) | $ | (66 | ) | $ | 831 | ||||||
Free Cash Flow as a % of Revenues |
42 | % | 36 | % |
(a) | Estimated share-based compensation presented above and excluded from pro forma results does not include $1 million, net of tax, related to share-based awards granted under the executive bonus program. | |
(b) | Includes $143 million in interest and dividend income related to cash, cash equivalents and marketable securities, which are not part of the Companys strategic investment portfolio, $41 million in net realized gains on investments and $2 million in gains on derivative instruments related to decreases in the fair value of the put option liabilities related to our share repurchase program. | |
(c) | Includes $12 million in net realized gains on investments and $2 million in interest and dividend income, partially offset by $8 million in other-than-temporary losses on investments, $1 million in interest expense and $1 million in losses on derivative instruments. | |
(d) | The third quarter of fiscal 2007 tax rates are approximately 18% for total QUALCOMM (GAAP) and approximately 21% for QUALCOMM pro forma. | |
(e) | 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 provisions related to estimated share-based compensation and in-process R&D from the tax provision for total QUALCOMM (GAAP). | |
(f) | Free Cash Flow is calculated as net cash provided by operating activities less capital expenditures. Reconciliation of these amounts is included in the Reconciliation of Pro Forma Free Cash Flows to Total QUALCOMM (GAAP) Net Cash Provided by Operating Activities and Other Supplemental Disclosures for the three months ended July 1, 2007, included herein. | |
(g) | Incremental tax benefits from stock options exercised during the period. |
QUALCOMM Announces Record Third Quarter Fiscal 2007 Results | Page 14 of 18 |
Nine Months Ended July 1, 2007 | ||||||||||||||||||||||||
Estimated | Total | |||||||||||||||||||||||
QUALCOMM | Share-Based | Tax | In-Process | QUALCOMM | ||||||||||||||||||||
Pro Forma | Compensation (a) | Adjustment | R&D | QSI | (GAAP) | |||||||||||||||||||
Revenues: |
||||||||||||||||||||||||
Equipment and services |
$ | 4,196 | $ | | $ | | $ | | $ | | $ | 4,196 | ||||||||||||
Licensing and royalty fees |
2,369 | | | | | 2,369 | ||||||||||||||||||
Total revenues |
6,565 | | | | | 6,565 | ||||||||||||||||||
Operating expenses: |
||||||||||||||||||||||||
Cost of equipment and services
revenues |
1,882 | 29 | | | 45 | 1,956 | ||||||||||||||||||
Research and development |
1,120 | 166 | | 10 | 52 | 1,348 | ||||||||||||||||||
Selling, general and administrative |
890 | 175 | | | 90 | 1,155 | ||||||||||||||||||
Total operating expenses |
3,892 | 370 | | 10 | 187 | 4,459 | ||||||||||||||||||
Operating income (loss) |
2,673 | (370 | ) | | (10 | ) | (187 | ) | 2,106 | |||||||||||||||
Investment income (expense), net |
561 | (b) | | | | 11 | (c) | 572 | ||||||||||||||||
Income (loss) before income taxes |
3,234 | (370 | ) | | (10 | ) | (176 | ) | 2,678 | |||||||||||||||
Income tax (expense) benefit |
(740 | ) | 126 | 33 | 1 | 73 | (e) | (507 | )(d) | |||||||||||||||
Net income (loss) |
$ | 2,494 | $ | (244 | ) | $ | 33 | $ | (9 | ) | $ | (103 | ) | $ | 2,171 | |||||||||
Earnings (loss) per common share: |
||||||||||||||||||||||||
Diluted |
$ | 1.47 | $ | (0.14 | ) | $ | 0.02 | $ | (0.01 | ) | $ | (0.06 | ) | $ | 1.28 | |||||||||
Shares used in per share calculations: |
||||||||||||||||||||||||
Diluted |
1,694 | 1,694 | 1,694 | 1,694 | 1,694 | 1,694 | ||||||||||||||||||
Supplemental Financial Data: |
||||||||||||||||||||||||
Operating Cash Flow |
$ | 3,116 | $ | (199 | )(g) | $ | | $ | (10 | ) | $ | (139 | ) | $ | 2,768 | |||||||||
Operating Cash Flow as a % of Revenue |
47 | % | 42 | % | ||||||||||||||||||||
Free Cash Flow (f) |
$ | 2,610 | $ | (199 | )(g) | $ | | $ | (10 | ) | $ | (204 | ) | $ | 2,197 | |||||||||
Free Cash Flow as a % of Revenue |
40 | % | 33 | % |
(a) | Estimated share-based compensation presented above and excluded from pro forma results does not include $2 million, net of tax, related to share-based awards granted under the executive bonus program. | |
(b) | Includes $409 million in interest and dividend income related to cash, cash equivalents and marketable securities, which are not part of the Companys strategic investment portfolio, $154 million in net realized gains on investments and $2 million in gains on derivative instruments related to decreases in the fair value of the put option liabilities related to our share repurchase program, partially offset by $2 million in other-than-temporary losses on investments and $2 million in interest expense. | |
(c) | Includes $19 million in net realized gains on investments and $6 million in interest and dividend income, partially offset by $9 million in other-than-temporary losses on investments, $3 million in interest expense and $2 million in losses on derivative instruments. | |
(d) | The tax rate of 19% for the first nine months of fiscal 2007 for total QUALCOMM (GAAP) is consistent with the estimated annual effective tax rate. | |
(e) | 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, the tax adjustment column and the tax provisions related to estimated share-based compensation and in-process R&D from the tax provision for total QUALCOMM (GAAP). | |
(f) | Free Cash Flow is calculated as net cash provided by operating activities less capital expenditures. Reconciliation of these amounts is included in the Reconciliation of Pro Forma Free Cash Flows to Total QUALCOMM (GAAP) Net Cash Provided by Operating Activities and Other Supplemental Disclosures for the nine months ended July 1, 2007, included herein. | |
(g) | Incremental tax benefits from stock options exercised during the period. |
QUALCOMM Announces Record Third Quarter Fiscal 2007 Results | Page 15 of 18 |
Three Months Ended July 1, 2007 | ||||||||||||||||
Estimated | Total | |||||||||||||||
QUALCOMM | Share-Based | QUALCOMM | ||||||||||||||
Pro Forma | Compensation | QSI | (GAAP) | |||||||||||||
Net cash provided (used) by operating
activities |
$ | 1,122 | $ | (80) | (a) | $ | (54 | ) | $ | 988 | ||||||
Less: capital expenditures |
(145 | ) | | (12 | ) | (157 | ) | |||||||||
Free cash flow |
$ | 977 | $ | (80 | ) | $ | (66 | ) | $ | 831 | ||||||
Other supplemental cash disclosures: |
||||||||||||||||
Cash transfers from QSI (1) |
$ | 40 | $ | | $ | (40 | ) | $ | | |||||||
Cash transfers to QSI (2) |
(70 | ) | | 70 | | |||||||||||
Net cash transfers |
$ | (30 | ) | $ | | $ | 30 | $ | | |||||||
Nine Months Ended July 1, 2007 | ||||||||||||||||||||
Estimated | Total | |||||||||||||||||||
QUALCOMM | Share-Based | In-Process | QUALCOMM | |||||||||||||||||
Pro Forma | Compensation | R&D | QSI | (GAAP) | ||||||||||||||||
Net cash provided (used) by operating
activities |
$ | 3,116 | $ | (199 | ) (a) | $ | (10 | ) | $ | (139 | ) | $ | 2,768 | |||||||
Less: capital expenditures |
(506 | ) | | | (65 | ) | (571 | ) | ||||||||||||
Free cash flow |
$ | 2,610 | $ | (199 | ) | $ | (10 | ) | $ | (204 | ) | $ | 2,197 | |||||||
Other supplemental cash disclosures: |
||||||||||||||||||||
Cash transfers from QSI (1) |
$ | 53 | $ | | $ | | $ | (53 | ) | $ | | |||||||||
Cash transfers to QSI (2) |
(264 | ) | | | 264 | | ||||||||||||||
Net cash transfers |
$ | (211 | ) | $ | | $ | | $ | 211 | $ | | |||||||||
(1) | Cash from loan payments and sale of equity securities. | |
(2) | Funding for strategic debt and equity investments, capital expenditures and other QSI operating expenses. |
Three Months Ended June 25, 2006 | ||||||||||||||||
Estimated | Total | |||||||||||||||
QUALCOMM | Share-Based | QUALCOMM | ||||||||||||||
Pro Forma | Compensation | QSI | (GAAP) | |||||||||||||
Net cash provided (used) by operating
activities |
$ | 954 | $ | (103 | ) (a) | $ | (35 | ) | $ | 816 | ||||||
Less: capital expenditures |
(159 | ) | | (23 | ) | (182 | ) | |||||||||
Free cash flow |
$ | 795 | $ | (103 | ) | $ | (58 | ) | $ | 634 | ||||||
Nine Months Ended June 25, 2006 | ||||||||||||||||
Estimated | Total | |||||||||||||||
QUALCOMM | Share-Based | QUALCOMM | ||||||||||||||
Pro Forma | Compensation | QSI | (GAAP) | |||||||||||||
Net cash provided (used) by operating
activities |
$ | 2,739 | $ | (376 | )(a) | $ | (62 | ) | $ | 2,301 | ||||||
Less: capital expenditures |
(466 | ) | | (90 | ) | (556 | ) | |||||||||
Free cash flow |
$ | 2,273 | $ | (376 | ) | $ | (152 | ) | $ | 1,745 | ||||||
(a) | Incremental tax benefits from stock options exercised during the period. |
QUALCOMM Announces Record Third Quarter Fiscal 2007 Results | Page 16 of 18 |
July 1, | September 24, | |||||||
2007 | 2006 | |||||||
ASSETS
|
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 3,716 | $ | 1,607 | ||||
Marketable securities |
3,592 | 4,114 | ||||||
Accounts receivable, net |
764 | 700 | ||||||
Inventories |
396 | 250 | ||||||
Deferred tax assets |
185 | 235 | ||||||
Other current assets |
395 | 143 | ||||||
Total current assets |
9,048 | 7,049 | ||||||
Marketable securities |
4,954 | 4,228 | ||||||
Property, plant and equipment, net |
1,631 | 1,482 | ||||||
Goodwill |
1,322 | 1,230 | ||||||
Deferred tax assets |
451 | 512 | ||||||
Other assets |
1,040 | 707 | ||||||
Total assets |
$ | 18,446 | $ | 15,208 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
Current liabilities: |
||||||||
Trade accounts payable |
$ | 566 | $ | 420 | ||||
Payroll and other benefits related liabilities |
255 | 273 | ||||||
Unearned revenue |
275 | 197 | ||||||
Income taxes payable |
303 | 137 | ||||||
Other current liabilities |
707 | 395 | ||||||
Total current liabilities |
2,106 | 1,422 | ||||||
Unearned revenue |
146 | 141 | ||||||
Other liabilities |
262 | 239 | ||||||
Total liabilities |
2,514 | 1,802 | ||||||
Stockholders equity: |
||||||||
Preferred stock, $0.0001 par value; issuable in series;
8 shares authorized; none outstanding at
July 1, 2007 and September 24, 2006 |
| | ||||||
Common stock, $0.0001 par value; 6,000 shares authorized;
1,672 and 1,652 shares issued and outstanding at
July 1, 2007 and September 24, 2006, respectively |
| | ||||||
Paid-in capital |
8,034 | 7,242 | ||||||
Retained earnings |
7,640 | 6,100 | ||||||
Accumulated other comprehensive income |
258 | 64 | ||||||
Total stockholders equity |
15,932 | 13,406 | ||||||
Total liabilities and stockholders equity |
$ | 18,446 | $ | 15,208 | ||||
QUALCOMM Announces Record Third Quarter Fiscal 2007 Results | Page17 of 18 |
Three Months Ended | Nine Months Ended | |||||||||||||||
July 1, | June 25, | July 1, | June 25, | |||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Revenues: |
||||||||||||||||
Equipment and services |
$ | 1,484 | $ | 1,240 | $ | 4,196 | $ | 3,512 | ||||||||
Licensing and royalty fees |
841 | 711 | 2,369 | 2,015 | ||||||||||||
Total revenues |
2,325 | 1,951 | 6,565 | 5,527 | ||||||||||||
Operating expenses: |
||||||||||||||||
Cost of equipment and services revenues |
688 | 559 | 1,956 | 1,596 | ||||||||||||
Research and development |
454 | 395 | 1,348 | 1,126 | ||||||||||||
Selling, general and administrative |
401 | 293 | 1,155 | 795 | ||||||||||||
Total operating expenses |
1,543 | 1,247 | 4,459 | 3,517 | ||||||||||||
Operating income |
782 | 704 | 2,106 | 2,010 | ||||||||||||
Investment income, net |
190 | 120 | 572 | 336 | ||||||||||||
Income before income taxes |
972 | 824 | 2,678 | 2,346 | ||||||||||||
Income tax expense |
(174 | ) | (181 | ) | (507 | ) | (490 | ) | ||||||||
Net income |
$ | 798 | $ | 643 | $ | 2,171 | $ | 1,856 | ||||||||
Basic earnings per common share |
$ | 0.48 | $ | 0.38 | $ | 1.31 | $ | 1.12 | ||||||||
Diluted earnings per common share |
$ | 0.47 | $ | 0.37 | $ | 1.28 | $ | 1.08 | ||||||||
Shares used in per share calculations: |
||||||||||||||||
Basic |
1,670 | 1,675 | 1,661 | 1,661 | ||||||||||||
Diluted |
1,704 | 1,728 | 1,694 | 1,717 | ||||||||||||
Dividends per share paid |
$ | 0.14 | $ | 0.12 | $ | 0.38 | $ | 0.30 | ||||||||
Dividends per share announced |
$ | 0.14 | $ | 0.12 | $ | 0.38 | $ | 0.30 | ||||||||
QUALCOMM Announces Record Third Quarter Fiscal 2007 Results | Page18 of 18 |
Three Months Ended | Nine Months Ended | |||||||||||||||
July 1, 2007 | June 25, 2006 | July 1, 2007 | June 25, 2006 | |||||||||||||
Operating Activities: |
||||||||||||||||
Net income |
$ | 798 | $ | 643 | $ | 2,171 | $ | 1,856 | ||||||||
Adjustments to reconcile net income to net cash provided by
operating activities: |
||||||||||||||||
Depreciation and amortization |
99 | 69 | 283 | 190 | ||||||||||||
Non-cash portion of share-based compensation expense |
114 | 126 | 371 | 368 | ||||||||||||
Incremental tax benefits from stock options exercised |
(80 | ) | (103 | ) | (199 | ) | (376 | ) | ||||||||
Net realized gains on marketable securities and other investments |
(53 | ) | (34 | ) | (173 | ) | (94 | ) | ||||||||
Non-cash income tax expense |
136 | 155 | 365 | 375 | ||||||||||||
Other items, net |
15 | 22 | 16 | 57 | ||||||||||||
Changes in assets and liabilities, net of effects of acquisitions: |
||||||||||||||||
Accounts receivable, net |
(45 | ) | (126 | ) | (62 | ) | (140 | ) | ||||||||
Inventories |
(49 | ) | (42 | ) | (147 | ) | (81 | ) | ||||||||
Other assets |
10 | 3 | (137 | ) | 15 | |||||||||||
Trade accounts payable |
(7 | ) | 34 | 127 | 140 | |||||||||||
Payroll, benefits and other liabilities |
68 | 45 | 69 | (20 | ) | |||||||||||
Unearned revenue |
(18 | ) | 24 | 84 | 11 | |||||||||||
Net cash provided by operating activities |
988 | 816 | 2,768 | 2,301 | ||||||||||||
Investing Activities: |
||||||||||||||||
Capital expenditures |
(157 | ) | (182 | ) | (571 | ) | (556 | ) | ||||||||
Purchases of available-for-sale securities |
(2,340 | ) | (3,548 | ) | (5,921 | ) | (9,610 | ) | ||||||||
Proceeds from sale of available-for-sale securities |
1,909 | 3,473 | 6,254 | 7,916 | ||||||||||||
Other investments and acquisitions, net of cash acquired |
(3 | ) | (120 | ) | (230 | ) | (390 | ) | ||||||||
Change in collateral held under securities lending |
(153 | ) | | (153 | ) | | ||||||||||
Other items, net |
12 | 34 | 13 | 79 | ||||||||||||
Net cash used by investing activities |
(732 | ) | (343 | ) | (608 | ) | (2,561 | ) | ||||||||
Financing Activities: |
||||||||||||||||
Proceeds from issuance of common stock |
220 | 155 | 474 | 623 | ||||||||||||
Incremental tax benefits from stock options exercised |
80 | 103 | 199 | 376 | ||||||||||||
Dividends paid |
(234 | ) | (202 | ) | (632 | ) | (500 | ) | ||||||||
Change in obligation under securities lending |
153 | | 153 | | ||||||||||||
Proceeds from put options |
17 | 11 | 17 | 11 | ||||||||||||
Repurchase and retirement of common stock |
(129 | ) | (1,165 | ) | (264 | ) | (1,165 | ) | ||||||||
Net cash provided (used) by financing activities |
107 | (1,098 | ) | (53 | ) | (655 | ) | |||||||||
Effect of exchange rate changes on cash |
| 1 | 2 | | ||||||||||||
Net increase (decrease) in cash and cash equivalents |
363 | (624 | ) | 2,109 | (915 | ) | ||||||||||
Cash and cash equivalents at beginning of period |
3,353 | 1,779 | 1,607 | 2,070 | ||||||||||||
Cash and cash equivalents at end of period |
$ | 3,716 | $ | 1,155 | $ | 3,716 | $ | 1,155 | ||||||||