| Revenues: $2.61 billion, up 17 percent year-over-year and 7 percent sequentially. | ||
| Net income: $766 million, up 6 percent year-over-year and even sequentially. | ||
| Diluted earnings per share: $0.47, up 9 percent year-over-year and 2 percent sequentially. | ||
| Effective tax rate: 15 percent for the quarter. Fiscal 2008 estimated tax rate of approximately 16 percent. | ||
| Estimated share-based compensation: $88 million, net of tax, up 5 percent year-over-year and 4 percent sequentially. | ||
| Operating cash flow: $947 million, down 4 percent year-over-year; 36 percent of revenues. | ||
| Return of capital to stockholders: $1.2 billion, including $455 million, or $0.28 per share of cash dividends paid (relating to dividends declared in the first and second quarters) and $769 million to repurchase 20.2 million shares of our common stock. |
Qualcomm Announces Second Quarter Fiscal 2008 Results | Page 2 of 18 |
| Revenues: $2.60 billion, up 17 percent year-over-year and 7 percent sequentially. | ||
| Net income: $894 million, up 7 percent year-over-year and 3 percent sequentially. | ||
| Diluted earnings per share: $0.54, up 8 percent year-over-year and 4 percent sequentially; excludes $0.02 loss per share attributable to the QSI segment and $0.05 loss per share attributable to certain estimated share-based compensation. | ||
| Effective tax rate: 19 percent for the quarter. Fiscal 2008 estimated tax rate of approximately 20 percent. | ||
| Free cash flow: $775 million, down 29 percent year-over-year; 30 percent of revenues (defined as net cash from operating activities less capital expenditures). |
Qualcomm Announces Second Quarter Fiscal 2008 Results | Page 3 of 18 |
Estimated | ||||||||||||||||||||
Qualcomm Pro | Share-Based | In-Process | Total Qualcomm | |||||||||||||||||
($ in millions) | Forma | Compensation | R&D | QSI | (GAAP) | |||||||||||||||
Second quarter
fiscal 2008 |
$ | 472 | $ | 60 | $ | | $ | 21 | $ | 553 | ||||||||||
As a % of revenue |
18 | % | N/M | 21 | % | |||||||||||||||
Second quarter
fiscal 2007 |
$ | 370 | $ | 58 | $ | 10 | $ | 16 | $ | 454 | ||||||||||
As a % of revenue |
17 | % | 20 | % | ||||||||||||||||
Year-over-year
change ($) |
28 | % | 3 | % | 31 | % | 22 | % |
Qualcomm Announces Second Quarter Fiscal 2008 Results | Page 4 of 18 |
Estimated | ||||||||||||||||
Qualcomm Pro | Share-Based | Total Qualcomm | ||||||||||||||
($ in millions) | Forma | Compensation | QSI | (GAAP) | ||||||||||||
Second quarter fiscal 2008 |
$ | 334 | $ | 61 | $ | 25 | $ | 420 | ||||||||
As a % of revenue |
13 | % | N/M | 16 | % | |||||||||||
Second quarter fiscal 2007 |
$ | 301 | $ | 59 | $ | 25 | $ | 385 | ||||||||
As a % of revenue |
14 | % | 17 | % | ||||||||||||
Year-over-year change ($) |
11 | % | 3 | % | 0 | % | 9 | % |
Qualcomm Announces Second Quarter Fiscal 2008 Results | Page 5 of 18 |
Qualcomm Announces Second Quarter Fiscal 2008 Results | Page 6 of 18 |
Qualcomm Announces Second Quarter Fiscal 2008 Results | Page 7 of 18 |
Current Guidance | ||||||||
Q307 | Q308 | |||||||
Results | Estimates | |||||||
Qualcomm Pro Forma |
||||||||
Revenues |
$ | 2.33B | $2.5B-$2.7B | |||||
Year-over-year change |
increase 8% - 16% | |||||||
Diluted earnings per share (EPS) |
$ | 0.55 | $0.50-$0.52 | |||||
Year-over-year change |
decrease 5% - 9% | |||||||
Total Qualcomm (GAAP) |
||||||||
Revenues |
$ | 2.33B | $2.5B-$2.7B | |||||
Year-over-year change |
increase 8% - 16% | |||||||
Diluted earnings per share (EPS) |
$ | 0.47 | $0.41-$0.43 | |||||
Year-over-year change |
decrease 9% - 13% | |||||||
Diluted EPS attributable to QSI |
($0.04) | ($0.03) | ||||||
Diluted EPS attributable to estimated share-based compensation |
($0.04) | ($0.06) | ||||||
Metrics |
||||||||
MSM shipments |
approx. 65M | approx. 85M - 88M | ||||||
CDMA/WCDMA devices shipped (1) |
approx. 86M* (2) | approx. 105M - 109M* | ||||||
CDMA/WCDMA device wholesale average selling price (1) |
approx. $215* (2) | approx. $223* |
* | Shipments in Mar. quarter, reported in June quarter |
Prior Guidance | Current Guidance | |||||||||||
FY 2007 | FY 2008 | FY 2008 | ||||||||||
Results (3) | Estimates (4) | Estimates (4) | ||||||||||
Qualcomm Pro Forma |
||||||||||||
Revenues |
$ | 8.87B | $ | 9.6B-$10.0B | $ | 10.0B-$10.4B | ||||||
Year-over-year change |
increase 8% - 13% | increase 13% - 17% | ||||||||||
Diluted earnings per share (EPS) |
$ | 2.01 | $ | 2.01-$2.07 | $ | 2.04-$2.09 | ||||||
Year-over-year change |
even - increase 3% | increase 1% - 4% | ||||||||||
Total Qualcomm (GAAP) |
||||||||||||
Revenues |
$ | 8.87B | $ | 9.6B-$10.0B | $ | 10.0B-$10.4B | ||||||
Year-over-year change |
increase 8% - 13% | increase 13% - 17% | ||||||||||
Diluted earnings per share (EPS) |
$ | 1.95 | $ | 1.67-$1.73 | $ | 1.71-$1.76 | ||||||
Year-over-year change |
decrease 11% - 14% | decrease 10% - 12% | ||||||||||
Diluted EPS attributable to QSI |
($0.08 | ) | ($0.12 | ) | ($0.11 | ) | ||||||
Diluted EPS attributable to estimated share-based compensation |
($0.19 | ) | ($0.22 | ) | ($0.22 | ) | ||||||
Diluted EPS attributable to in-process R&D |
($0.01 | ) | $ | 0.00 | $ | 0.00 | ||||||
Diluted EPS attributable to tax items related to prior years |
$ | 0.22 | n/a | n/a | ||||||||
Metrics |
||||||||||||
Fiscal year* CDMA/WCDMA device wholesale average selling price (1) |
approx. $214 (2) | approx. $203 | approx. $217 |
* | Shipments in Sept. to June quarters, reported in Dec. to Sept. quarters |
Prior Guidance | Current Guidance | |||||||||||
Calendar 2007 | Calendar 2008 | Calendar 2008 | ||||||||||
CDMA/WCDMA device shipments | Estimates | Estimates | Estimates | |||||||||
March quarter |
approx. 86M | not provided | approx. 105M - 109M | |||||||||
June quarter |
approx. 89M | not provided | not provided | |||||||||
September quarter |
approx. 95M | not provided | not provided | |||||||||
December quarter |
approx. 112M | not provided | not provided | |||||||||
Calendar year range (approx.) |
382M | 492M - 522M | 488M - 518M | |||||||||
Midpoint | Midpoint | Midpoint | ||||||||||
CDMA/WCDMA units |
approx. 382M | approx. 507M | approx. 503M | |||||||||
CDMA units |
approx. 209M | approx. 223M | approx. 223M | |||||||||
WCDMA units |
approx. 173M | approx. 284M | approx. 280M |
(1) | CDMA/WCDMA device shipments and average selling prices are estimated for the total market. | |
(2) | We perform periodic audits of the royalties payable by our licensees. As a result of our audit process, we determined during the fourth quarter of fiscal 2007 that total CDMA-based device shipments and average selling prices (ASPs) should be adjusted for certain periods in fiscal 2007. The adjustments related only to device shipments and ASPs and did not impact the amount or timing of our revenues. Historical units presented herein have been adjusted to reflect these adjustments. | |
(3) | Our fiscal 2007 results do not include royalty revenues attributable to Nokias sales after April 9, 2007 which, as of November 14, 2007, we estimated to be approximately $0.05 diluted earnings per share. | |
(4) | We have excluded from our fiscal 2008 revenue and earnings guidance our estimate of royalties which we believe Nokia is required to report and pay to us under our existing license agreement in fiscal 2008 which, as of December 20, 2007, we estimated to be approximately $0.25-$0.30 diluted earnings per share. |
Qualcomm Announces Second Quarter Fiscal 2008 Results | Page 8 of 18 |
Estimated | Total | |||||||||||||||||||||||||||||||
Reconciling | Qualcomm | Share-Based | Qualcomm | |||||||||||||||||||||||||||||
Segments | QCT | QTL | QWI | Items (1) | Pro Forma | Compensation (2) | QSI (3) | (GAAP) | ||||||||||||||||||||||||
Revenues |
$ | 1,620 | $ | 795 | $ | 194 | $ | (5 | ) | $ | 2,604 | $ | | $ | 2 | $ | 2,606 | |||||||||||||||
Change from prior year |
29 | % | 5 | % | (2 | %) | N/M | 17 | % | N/M | 17 | % | ||||||||||||||||||||
Change from prior quarter |
3 | % | 22 | % | (8 | %) | N/M | 7 | % | 100 | % | 7 | % | |||||||||||||||||||
EBT |
$ | 427 | $ | 684 | $ | | $ | (12 | ) | $ | 1,099 | $ | (130 | ) | $ | (63 | ) | $ | 906 | |||||||||||||
Change from prior year |
16 | % | 8 | % | N/M | N/M | (1 | %) | (3 | %) | (50 | %) | (2 | %) | ||||||||||||||||||
Change from prior quarter |
(9 | %) | 26 | % | N/M | N/M | (1 | %) | (5 | %) | (15 | %) | (3 | %) | ||||||||||||||||||
EBT as a % of revenues |
26 | % | 86 | % | 0 | % | N/M | 42 | % | N/A | N/M | 35 | % | |||||||||||||||||||
Net income (loss) |
$ | 894 | $ | (88 | ) | $ | (40 | ) | $ | 766 | ||||||||||||||||||||||
Change from prior year |
7 | % | (6 | %) | (100 | %) | 6 | % | ||||||||||||||||||||||||
Change from prior quarter |
3 | % | (5 | %) | (100 | %) | 0 | % | ||||||||||||||||||||||||
Diluted EPS |
$ | 0.54 | $ | (0.05 | ) | $ | (0.02 | ) | $ | 0.47 | ||||||||||||||||||||||
Change from prior year |
8 | % | 0 | % | (100 | %) | 9 | % | ||||||||||||||||||||||||
Change from prior quarter |
4 | % | 0 | % | (100 | %) | 2 | % | ||||||||||||||||||||||||
Diluted shares used |
1,643 | 1,643 | 1,643 | 1,643 |
Estimated | Total | |||||||||||||||||||||||||||||||||||
Reconciling | Qualcomm | Share-Based | In-Process | Qualcomm | ||||||||||||||||||||||||||||||||
Segments | QCT | QTL | QWI | Items (1) | Pro Forma | Compensation (2) | R&D | QSI (3) | (GAAP) | |||||||||||||||||||||||||||
Revenues |
$ | 1,574 | $ | 650 | $ | 210 | $ | 5 | $ | 2,439 | $ | | $ | | $ | 1 | $ | 2,440 | ||||||||||||||||||
EBT |
470 | 541 | 24 | 76 | 1,111 | (124 | ) | (2 | ) | (55 | ) | 930 | ||||||||||||||||||||||||
Net income (loss) |
872 | (84 | ) | (1 | ) | (20 | ) | 767 | ||||||||||||||||||||||||||||
Diluted EPS |
$ | 0.52 | $ | (0.05 | ) | $ | | $ | (0.01 | ) | $ | 0.46 | ||||||||||||||||||||||||
Diluted shares used |
1,664 | 1,664 | 1,664 | 1,664 | 1,664 |
Estimated | Total | |||||||||||||||||||||||||||||||||||
Reconciling | Qualcomm | Share-Based | In-process | Qualcomm | ||||||||||||||||||||||||||||||||
Segments | QCT | QTL | QWI | Items (1) | Pro Forma | Compensation (2) | R&D | QSI (3) | (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 | QTL | QWI | Items (1) | Pro Forma | Compensation (2) | QSI (3) | (GAAP) | ||||||||||||||||||||||||
Revenues |
$ | 1,367 | $ | 766 | $ | 196 | $ | (4 | ) | $ | 2,325 | $ | | $ | | $ | 2,325 | |||||||||||||||
EBT |
439 | 668 | 18 | 52 | 1,177 | (114 | ) | (91 | ) | 972 | ||||||||||||||||||||||
Net income (loss) |
934 | (75 | ) | (61 | ) | 798 | ||||||||||||||||||||||||||
Diluted EPS |
$ | 0.55 | $ | (0.04 | ) | $ | (0.04 | ) | $ | 0.47 | ||||||||||||||||||||||
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 (1) | Pro Forma | Compensation (2) | Tax Items (4) | R&D | QSI | (GAAP) | ||||||||||||||||||||||||||||||
Revenues |
$ | 5,275 | $ | 2,772 | $ | 828 | $ | (5 | ) | $ | 8,870 | $ | | $ | | $ | | $ | 1 | $ | 8,871 | |||||||||||||||||||
EBT |
1,547 | 2,340 | 88 | 388 | 4,363 | (487 | ) | | (10 | ) | (240 | ) | 3,626 | |||||||||||||||||||||||||||
Net income (loss) |
3,406 | (321 | ) | 364 | (9 | ) | (137 | ) | 3,303 | |||||||||||||||||||||||||||||||
Diluted EPS |
$ | 2.01 | $ | (0.19 | ) | $ | 0.22 | $ | (0.01 | ) | $ | (0.08 | ) | $ | 1.95 | |||||||||||||||||||||||||
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 | QTL | QWI | Items (1) | Pro Forma | Compensation (2) | R&D | QSI (3) | (GAAP) | |||||||||||||||||||||||||||
Revenues |
$ | 3,194 | $ | 1,445 | $ | 405 | $ | (1 | ) | $ | 5,043 | $ | | $ | | $ | 4 | $ | 5,047 | |||||||||||||||||
Change from prior year |
28 | % | 6 | % | 5 | % | N/M | 19 | % | N/M | 19 | % | ||||||||||||||||||||||||
EBT |
$ | 897 | $ | 1,224 | $ | 24 | $ | 65 | $ | 2,210 | $ | (255 | ) | $ | (2 | ) | $ | (117 | ) | $ | 1,836 | |||||||||||||||
Change from prior year |
31 | % | 8 | % | (40 | %) | N/M | 7 | % | 1 | % | N/M | (38 | %) | 8 | % | ||||||||||||||||||||
Net income (loss) |
1,767 | (173 | ) | (1 | ) | (60 | ) | $ | 1,533 | |||||||||||||||||||||||||||
Change from prior year |
13 | % | (2 | %) | N/M | (43 | %) | 12 | % | |||||||||||||||||||||||||||
Diluted EPS |
$ | 1.07 | $ | (0.10 | ) | $ | | $ | (0.04 | ) | $ | 0.93 | ||||||||||||||||||||||||
Change from prior year |
16 | % | 0 | % | N/M | (100 | %) | 15 | % | |||||||||||||||||||||||||||
Diluted shares used |
1,653 | 1,653 | 1,653 | 1,653 | 1,653 |
Estimated | Total | |||||||||||||||||||||||||||||||||||||||
Reconciling | Qualcomm | Share-Based | In-Process | Qualcomm | ||||||||||||||||||||||||||||||||||||
Segments | QCT | QTL | QWI | Items (1) | Pro Forma | Compensation (2) | Tax Items | R&D | QSI (3) | (GAAP) | ||||||||||||||||||||||||||||||
Revenues |
$ | 2,490 | $ | 1,359 | $ | 387 | $ | 4 | $ | 4,240 | $ | | $ | | $ | | $ | | $ | 4,240 | ||||||||||||||||||||
EBT |
684 | 1,134 | 40 | 200 | 2,058 | (257 | ) | | (10 | ) | (85 | ) | 1,706 | |||||||||||||||||||||||||||
Net income |
1,560 | (169 | ) | 33 | (9 | ) | (42 | ) | 1,373 | |||||||||||||||||||||||||||||||
Diluted EPS |
$ | 0.92 | $ | (0.10 | ) | $ | 0.02 | $ | (0.01 | ) | $ | (0.02 | ) | $ | 0.81 | |||||||||||||||||||||||||
Diluted shares used |
1,689 | 1,689 | 1,689 | 1,689 | 1,689 | 1,689 |
Qualcomm Announces Second Quarter Fiscal 2008 Results | Page 9 of 18 |
(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 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. | |
(2) | 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. | |
(3) | 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 items column and the tax provisions related to estimated share-based compensation and in-process R&D from the tax provision for total Qualcomm (GAAP). | |
(4) | During the fourth quarter of fiscal 2007, the Company recorded a $331 million tax benefit, or $0.20 diluted earnings per share, related to tax expense recorded in prior years resulting from the completion of tax audits during the fourth fiscal quarter. The fiscal 2007 Qualcomm pro forma results excluded this tax benefit attributable to prior years. |
Qualcomm Announces Second Quarter Fiscal 2008 Results | Page 10 of 18 |
Qualcomm Announces Second Quarter Fiscal 2008 Results | Page 11 of 18 |
Qualcomm Announces Second Quarter Fiscal 2008 Results | Page 12 of 18 |
Qualcomm Announces Second Quarter Fiscal 2008 Results | Page 13 of 18 |
Three Months Ended March 30, 2008 | ||||||||||||||||
Estimated | Total | |||||||||||||||
Qualcomm | Share-Based | Qualcomm | ||||||||||||||
Pro Forma | Compensation | QSI | (GAAP) | |||||||||||||
Revenues: |
||||||||||||||||
Equipment and services |
$ | 1,723 | $ | | $ | 2 | $ | 1,725 | ||||||||
Licensing and royalty fees |
881 | | | 881 | ||||||||||||
Total revenues |
2,604 | | 2 | 2,606 | ||||||||||||
Operating expenses: |
||||||||||||||||
Cost of equipment and services
revenues |
781 | 9 | 30 | 820 | ||||||||||||
Research and development |
472 | 60 | 21 | 553 | ||||||||||||
Selling, general and administrative |
334 | 61 | 25 | 420 | ||||||||||||
Total operating expenses |
1,587 | 130 | 76 | 1,793 | ||||||||||||
Operating income (loss) |
1,017 | (130 | ) | (74 | ) | 813 | ||||||||||
Investment income, net |
82 | (a) | | 11 | (b) | 93 | ||||||||||
Income (loss) before income taxes |
1,099 | (130 | ) | (63 | ) | 906 | ||||||||||
Income tax (expense) benefit |
(205) | (c) | 42 | 23 | (d) | (140) | (c) | |||||||||
Net income (loss) |
$ | 894 | $ | (88 | ) | $ | (40 | ) | $ | 766 | ||||||
Earnings (loss) per common share: |
||||||||||||||||
Diluted |
$ | 0.54 | $ | (0.05 | ) | $ | (0.02 | ) | $ | 0.47 | ||||||
Shares used in per share calculations: |
||||||||||||||||
Diluted |
1,643 | 1,643 | 1,643 | 1,643 | ||||||||||||
Supplemental Financial Data: |
||||||||||||||||
Operating Cash Flow |
$ | 1,056 | $ | (53) | (f) | $ | (56 | ) | $ | 947 | ||||||
Operating Cash Flow as a % of Revenues |
41 | % | N/M | 36 | % | |||||||||||
Free Cash Flow (e) |
$ | 775 | $ | (53) | (f) | $ | (76 | ) | $ | 646 | ||||||
Free Cash Flow as a % of Revenues |
30 | % | N/M | 25 | % |
(a) | Included $117 million in interest and dividend income related to cash, cash equivalents and marketable securities, which were not part of the Companys strategic investment portfolio, $13 million in net realized gains on investments and $4 million in gains on derivative instruments from net decreases in the fair value of the put option liabilities related to our share repurchase program, partially offset by $47 million in other-than-temporary losses on investments and $5 million in interest expense. | |
(b) | Included $24 million in net realized gains on investments and $3 million in equity in earnings of investees, partially offset by $15 million in other-than-temporary losses on investments and $1 million in interest expense. | |
(c) | The second quarter of fiscal 2008 effective tax rates were approximately 15% for total Qualcomm (GAAP) and approximately 19% for Qualcomm pro forma. | |
(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. In interim quarters, the tax provision for the QSI operating segment is computed by subtracting the tax provision for Qualcomm pro forma, the tax items column and the tax provisions related to estimated share-based compensation and in-process R&D 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 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 March 30, 2008, included herein. | |
(f) | Incremental tax benefits from stock options exercised during the period. |
Qualcomm Announces Second Quarter Fiscal 2008 Results | Page 14 of 18 |
Six Months Ended March 30, 2008 | ||||||||||||||||||||
Estimated | Total | |||||||||||||||||||
Qualcomm | Share-Based | In-Process | Qualcomm | |||||||||||||||||
Pro Forma | Compensation (a) | R&D | QSI | (GAAP) | ||||||||||||||||
Revenues: |
||||||||||||||||||||
Equipment and services |
$ | 3,425 | $ | | $ | | $ | 4 | $ | 3,429 | ||||||||||
Licensing and royalty fees |
1,618 | | | | 1,618 | |||||||||||||||
Total revenues |
5,043 | | | 4 | 5,047 | |||||||||||||||
Operating expenses: |
||||||||||||||||||||
Cost of equipment and services
revenues |
1,533 | 19 | | 52 | 1,604 | |||||||||||||||
Research and development |
902 | 117 | 2 | 43 | 1,064 | |||||||||||||||
Selling, general and administrative |
642 | 119 | | 47 | 808 | |||||||||||||||
Total operating expenses |
3,077 | 255 | 2 | 142 | 3,476 | |||||||||||||||
Operating income (loss) |
1,966 | (255 | ) | (2 | ) | (138 | ) | 1,571 | ||||||||||||
Investment income, net |
244 | (b) | | | 21 | (c) | 265 | |||||||||||||
Income (loss) before income taxes |
2,210 | (255 | ) | (2 | ) | (117 | ) | 1,836 | ||||||||||||
Income tax (expense) benefit |
(443) | (d) | 82 | 1 | 57 | (e) | (303) | (d) | ||||||||||||
Net income (loss) |
$ | 1,767 | $ | (173 | ) | $ | (1 | ) | $ | (60 | ) | $ | 1,533 | |||||||
Earnings (loss) per common share: |
||||||||||||||||||||
Diluted |
$ | 1.07 | $ | (0.10 | ) | $ | (0.00 | ) | $ | (0.04 | ) | $ | 0.93 | |||||||
Shares used in per share calculations: |
||||||||||||||||||||
Diluted |
1,653 | 1,653 | 1,653 | 1,653 | 1,653 | |||||||||||||||
Supplemental Financial Data: |
||||||||||||||||||||
Operating Cash Flow |
$ | 2,070 | $ | (101) | (g) | $ | (2 | ) | $ | (140 | ) | $ | 1,827 | |||||||
Operating Cash Flow as a % of Revenue |
41 | % | N/M | 36 | % | |||||||||||||||
Free Cash
Flow (f) |
$ | 1,683 | $ | (101) | (g) | $ | (2 | ) | $ | (181 | ) | $ | 1,399 | |||||||
Free Cash Flow as a % of Revenue |
33 | % | N/M | 28 | % |
(a) | Estimated share-based compensation presented above and excluded from pro forma results did not include $1 million, net of tax, related to share-based awards granted under a bonus program. | |
(b) | Included $269 million in interest and dividend income related to cash, cash equivalents and marketable securities, which were not part of the Companys strategic investment portfolio, $83 million in net realized gains on investments and $6 million in gains on derivative instruments from decreases in the fair value of the put option liabilities related to our share repurchase program, partially offset by $104 million in other-than-temporary losses on investments and $10 million in interest expense. | |
(c) | Included $35 million in net realized gains on investments, $3 million in equity in earnings of investees and $1 million in interest and dividend income, partially offset by $15 million in other-than-temporary losses on investments and $3 million in interest expense. | |
(d) | The effective tax rate of 17% for total Qualcomm (GAAP) for the six months ended March 30, 2008 is higher than the estimated annual rate of 16% primarily due to the effect of discrete items recorded in the first six months of fiscal 2008. The effective tax rate of approximately 20% for pro forma for the six months ended March 30, 2008 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, 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 items 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 six months ended March 30, 2008, included herein. | |
(g) | Incremental tax benefits from stock options exercised during the period. |
Qualcomm Announces Second Quarter Fiscal 2008 Results | Page 15 of 18 |
Three Months Ended March 30, 2008 | ||||||||||||||||
Estimated | Total | |||||||||||||||
Qualcomm | Share-Based | Qualcomm | ||||||||||||||
Pro Forma | Compensation | QSI | (GAAP) | |||||||||||||
Net cash provided (used) by operating activities |
$ | 1,056 | $ | (53) | (a) | $ | (56 | ) | $ | 947 | ||||||
Less: capital expenditures |
(281 | ) | | (20 | ) | (301 | ) | |||||||||
Free cash flow |
$ | 775 | $ | (53 | ) | $ | (76 | ) | $ | 646 | ||||||
Other supplemental cash disclosures: |
||||||||||||||||
Cash transfers from QSI (1) |
$ | 25 | $ | | $ | (25 | ) | $ | | |||||||
Cash transfers to QSI (2) |
(88 | ) | | 88 | | |||||||||||
Net cash transfers |
$ | (63 | ) | $ | | $ | 63 | $ | | |||||||
Six Months Ended March 30, 2008 | ||||||||||||||||||||
Estimated | Total | |||||||||||||||||||
Qualcomm | Share-Based | In-Process | Qualcomm | |||||||||||||||||
Pro Forma | Compensation | R&D | QSI | (GAAP) | ||||||||||||||||
Net cash provided (used) by operating activities |
$ | 2,070 | $ | (101) | (a) | $ | (2 | ) | $ | (140 | ) | $ | 1,827 | |||||||
Less: capital expenditures |
(387 | ) | | | (41 | ) | (428 | ) | ||||||||||||
Free cash flow |
$ | 1,683 | $ | (101 | ) | $ | (2 | ) | $ | (181 | ) | $ | 1,399 | |||||||
Other supplemental cash disclosures: |
||||||||||||||||||||
Cash transfers from QSI (1) |
$ | 29 | $ | | $ | | $ | (29 | ) | $ | | |||||||||
Cash transfers to QSI (2) |
(201 | ) | | | 201 | | ||||||||||||||
Net cash transfers |
$ | (172 | ) | $ | | $ | | $ | 172 | $ | | |||||||||
(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 April 1, 2007 | ||||||||||||||||||||
Estimated | Total | |||||||||||||||||||
Qualcomm | Share-Based | In-Process | Qualcomm | |||||||||||||||||
Pro Forma | Compensation | R&D | QSI | (GAAP) | ||||||||||||||||
Net cash provided (used) by operating activities |
$ | 1,159 | $ | (87) | (a) | $ | (10 | ) | $ | (71 | ) | $ | 991 | |||||||
Less: capital expenditures |
(72 | ) | | | (20 | ) | (92 | ) | ||||||||||||
Free cash flow |
$ | 1,087 | $ | (87 | ) | $ | (10 | ) | $ | (91 | ) | $ | 899 | |||||||
Six Months Ended April 1, 2007 | ||||||||||||||||||||
Estimated | Total | |||||||||||||||||||
Qualcomm | Share-Based | In-Process | Qualcomm | |||||||||||||||||
Pro Forma | Compensation | R&D | QSI | (GAAP) | ||||||||||||||||
Net cash provided (used) by operating activities |
$ | 1,994 | $ | (119) | (a) | $ | (10 | ) | $ | (85 | ) | $ | 1,780 | |||||||
Less: capital expenditures |
(361 | ) | | | (53 | ) | (414 | ) | ||||||||||||
Free cash flow |
$ | 1,633 | $ | (119 | ) | $ | (10 | ) | $ | (138 | ) | $ | 1,366 | |||||||
(a) | Incremental tax benefits from stock options exercised during the period. |
Qualcomm Announces Second Quarter Fiscal 2008 Results | Page 16 of 18 |
March 30, | September 30, | |||||||
2008 | 2007 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 2,803 | $ | 2,411 | ||||
Marketable securities |
3,325 | 4,170 | ||||||
Accounts receivable, net |
728 | 715 | ||||||
Inventories |
612 | 469 | ||||||
Deferred tax assets |
357 | 435 | ||||||
Collateral held under securities lending |
334 | 421 | ||||||
Other current assets |
192 | 200 | ||||||
Total current assets |
8,351 | 8,821 | ||||||
Marketable securities |
4,436 | 5,234 | ||||||
Property, plant and equipment, net |
1,817 | 1,788 | ||||||
Goodwill |
1,520 | 1,325 | ||||||
Deferred tax assets |
770 | 318 | ||||||
Other assets |
1,258 | 1,009 | ||||||
Total assets |
$ | 18,152 | $ | 18,495 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
Current liabilities: |
||||||||
Trade accounts payable |
$ | 658 | $ | 635 | ||||
Payroll and other benefits related liabilities |
282 | 311 | ||||||
Unearned revenues |
212 | 218 | ||||||
Income taxes payable |
22 | 119 | ||||||
Obligations under securities lending |
334 | 421 | ||||||
Other current liabilities |
530 | 554 | ||||||
Total current liabilities |
2,038 | 2,258 | ||||||
Unearned revenues |
128 | 142 | ||||||
Income taxes payable |
212 | | ||||||
Other liabilities |
297 | 260 | ||||||
Total liabilities |
2,675 | 2,660 | ||||||
Stockholders equity: |
||||||||
Preferred stock, $0.0001 par value; issuable in series;
8 shares authorized; none outstanding at
March 30, 2008 and September 30, 2007 |
| | ||||||
Common stock, $0.0001 par value; 6,000 shares authorized;
1,617 and 1,646 shares issued and outstanding at
March 30, 2008 and September 30, 2007, respectively |
| | ||||||
Paid-in capital |
5,976 | 7,057 | ||||||
Retained earnings |
9,616 | 8,541 | ||||||
Accumulated other comprehensive (loss) income |
(115 | ) | 237 | |||||
Total stockholders equity |
15,477 | 15,835 | ||||||
Total liabilities and stockholders equity |
$ | 18,152 | $ | 18,495 | ||||
Qualcomm Announces Second Quarter Fiscal 2008 Results | Page 17 of 18 |
Three Months Ended | Six Months Ended | |||||||||||||||
March 30, | April 1, | March 30, | April 1, | |||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Revenues: |
||||||||||||||||
Equipment and services |
$ | 1,725 | $ | 1,370 | $ | 3,429 | $ | 2,712 | ||||||||
Licensing and royalty fees |
881 | 851 | 1,618 | 1,528 | ||||||||||||
Total revenues |
2,606 | 2,221 | 5,047 | 4,240 | ||||||||||||
Operating expenses: |
||||||||||||||||
Cost of equipment and services revenues |
820 | 634 | 1,604 | 1,268 | ||||||||||||
Research and development |
553 | 454 | 1,064 | 895 | ||||||||||||
Selling, general and administrative |
420 | 385 | 808 | 754 | ||||||||||||
Total operating expenses |
1,793 | 1,473 | 3,476 | 2,917 | ||||||||||||
Operating income |
813 | 748 | 1,571 | 1,323 | ||||||||||||
Investment income, net |
93 | 180 | 265 | 383 | ||||||||||||
Income before income taxes |
906 | 928 | 1,836 | 1,706 | ||||||||||||
Income tax expense |
(140 | ) | (202 | ) | (303 | ) | (333 | ) | ||||||||
Net income |
$ | 766 | $ | 726 | $ | 1,533 | $ | 1,373 | ||||||||
Basic earnings per common share |
$ | 0.47 | $ | 0.44 | $ | 0.94 | $ | 0.83 | ||||||||
Diluted earnings per common share |
$ | 0.47 | $ | 0.43 | $ | 0.93 | $ | 0.81 | ||||||||
Shares used in per share calculations: |
||||||||||||||||
Basic |
1,617 | 1,659 | 1,626 | 1,656 | ||||||||||||
Diluted |
1,643 | 1,693 | 1,653 | 1,689 | ||||||||||||
Dividends per share paid |
$ | 0.28 | $ | 0.24 | $ | 0.28 | $ | 0.24 | ||||||||
Dividends per share announced |
$ | 0.14 | $ | 0.12 | $ | 0.28 | $ | 0.24 | ||||||||
Qualcomm Announces Second Quarter Fiscal 2008 Results | Page 18 of 18 |
Three Months Ended | Six Months Ended | |||||||||||||||
March 30, | April 1, | March 30, | April 1, | |||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Operating Activities: |
||||||||||||||||
Net income |
$ | 766 | $ | 726 | $ | 1,533 | $ | 1,373 | ||||||||
Adjustments to reconcile net income to net cash provided by
operating activities: |
||||||||||||||||
Depreciation and amortization |
111 | 93 | 219 | 184 | ||||||||||||
Non-cash income tax expense |
10 | 131 | 82 | 229 | ||||||||||||
Non-cash portion of share-based compensation expense |
130 | 127 | 255 | 257 | ||||||||||||
Incremental tax benefits from stock options exercised |
(53 | ) | (87 | ) | (101 | ) | (119 | ) | ||||||||
Net realized gains on marketable securities and other investments |
(37 | ) | (55 | ) | (118 | ) | (119 | ) | ||||||||
Other-than-temporary losses on marketable securities
and other investments |
62 | 1 | 119 | 2 | ||||||||||||
Other items, net |
(14 | ) | 1 | (11 | ) | 6 | ||||||||||
Changes in assets and liabilities, net of effects of acquisitions: |
||||||||||||||||
Accounts receivable, net |
(35 | ) | (8 | ) | 8 | (17 | ) | |||||||||
Inventories |
(88 | ) | (17 | ) | (135 | ) | (98 | ) | ||||||||
Other assets |
31 | (57 | ) | 42 | (155 | ) | ||||||||||
Trade accounts payable |
97 | 87 | 20 | 134 | ||||||||||||
Payroll, benefits and other liabilities |
(31 | ) | 7 | (66 | ) | 1 | ||||||||||
Unearned revenues |
(2 | ) | 42 | (20 | ) | 102 | ||||||||||
Net cash provided by operating activities |
947 | 991 | 1,827 | 1,780 | ||||||||||||
Investing Activities: |
||||||||||||||||
Capital expenditures |
(301 | ) | (92 | ) | (428 | ) | (414 | ) | ||||||||
Purchases of available-for-sale securities |
(1,276 | ) | (1,908 | ) | (2,960 | ) | (3,581 | ) | ||||||||
Proceeds from sale of available-for-sale securities |
1,497 | 1,909 | 3,989 | 4,345 | ||||||||||||
Other investments and acquisitions, net of cash acquired |
(46 | ) | (7 | ) | (275 | ) | (227 | ) | ||||||||
Change in collateral held under securities lending |
(51 | ) | | 87 | | |||||||||||
Other items, net |
26 | 3 | 26 | 1 | ||||||||||||
Net cash (used) provided by investing activities |
(151 | ) | (95 | ) | 439 | 124 | ||||||||||
Financing Activities: |
||||||||||||||||
Proceeds from issuance of common stock |
159 | 158 | 236 | 255 | ||||||||||||
Incremental tax benefits from stock options exercised |
53 | 87 | 101 | 119 | ||||||||||||
Dividends paid |
(455 | ) | (398 | ) | (455 | ) | (398 | ) | ||||||||
Repurchase and retirement of common stock |
(769 | ) | (40 | ) | (1,670 | ) | (136 | ) | ||||||||
Change in obligations under securities lending |
51 | | (87 | ) | | |||||||||||
Net cash used by financing activities |
(961 | ) | (193 | ) | (1,875 | ) | (160 | ) | ||||||||
Effect of exchange rate changes on cash |
| 1 | 1 | 2 | ||||||||||||
Net (decrease) increase in cash and cash equivalents |
(165 | ) | 704 | 392 | 1,746 | |||||||||||
Cash and cash equivalents at beginning of period |
2,968 | 2,649 | 2,411 | 1,607 | ||||||||||||
Cash and cash equivalents at end of period |
$ | 2,803 | $ | 3,353 | $ | 2,803 | $ | 3,353 | ||||||||