| Revenues: $2.66 billion, compared to $2.46 billion in the prior year and $2.67 billion in the prior quarter. | ||
| Operating income: $776 million, compared to an operating loss of $10 million in the prior year* and operating income of $879 million in the prior quarter. | ||
| Net income: $774 million, compared to a net loss of $289 million in the prior year* and net income of $841 million in the prior quarter. | ||
| Diluted earnings per share: $0.46, compared to a diluted loss per share of $0.18 in the prior year* and diluted earnings per share of $0.50 in the prior quarter. | ||
| Effective tax rate: 20 percent for the quarter. |
Qualcomm Announces Second Quarter Fiscal 2010 Results | Page 2 of 19 |
| Operating cash flow: $793 million, down 37 percent year-over-year; 30 percent of revenues. | ||
| Return of capital to stockholders: $1.99 billion, including $279 million, or $0.17 per share, of cash dividends paid, and $1.71 billion to repurchase 43.9 million shares of our common stock. |
* | The second quarter of fiscal 2009 results reflected a $748 million litigation settlement charge related to a settlement and patent agreement with Broadcom Corporation. |
| Revenues: $2.66 billion, compared to $2.45 billion in the prior year and $2.67 billion in the prior quarter. | ||
| Operating income: $1.07 billion, compared to $214 million in the prior year* and $1.13 billion in the prior quarter. | ||
| Net income: $989 million, compared to a net loss of $46 million in the prior year* and net income of $1.04 billion in the prior quarter. | ||
| Diluted earnings per share: $0.59, compared to a diluted loss per share of $0.03 in the prior year* and diluted earnings per share of $0.62 in the prior quarter. The current quarter excludes $0.05 loss per share attributable to the QSI segment, $0.06 loss per share attributable to certain share-based compensation and $0.02 loss per share attributable to certain tax items. | ||
| Effective tax rate: 21 percent for the quarter. | ||
| Free cash flow: $823 million, down 29 percent year-over-year; 31 percent of revenues (defined as net cash from operating activities less capital expenditures). |
* | The second quarter of fiscal 2009 results reflected a $748 million litigation settlement charge related to a settlement and patent agreement with Broadcom Corporation. |
Qualcomm Announces Second Quarter Fiscal 2010 Results | Page 3 of 19 |
($ in millions) | Pro Forma | Share-Based Compensation | In-Process R&D | QSI | GAAP | |||||||||||||||
Second quarter
fiscal 2010 |
$ | 547 | $ | 75 | $ | 3 | $ | 23 | $ | 648 | ||||||||||
As a % of revenues |
21 | % | N/M | 24 | % | |||||||||||||||
Second quarter
fiscal 2009 |
$ | 506 | $ | 68 | $ | 6 | $ | 24 | $ | 604 | ||||||||||
As a % of revenues |
21 | % | N/M | 25 | % | |||||||||||||||
Year-over-year
change ($) |
8 | % | 10 | % | N/M | (4 | %) | 7 | % |
N/M Not Meaningful |
($ in millions) | Pro Forma | Share-Based Compensation | QSI | GAAP | ||||||||||||
Second quarter fiscal
2010 |
$ | 305 | $ | 69 | $ | 56 | $ | 430 | ||||||||
As a % of revenues |
11 | % | N/M | 16 | % | |||||||||||
Second quarter fiscal
2009 |
$ | 289 | $ | 62 | $ | 24 | $ | 375 | ||||||||
As a % of revenues |
12 | % | N/M | 15 | % | |||||||||||
Year-over-year change ($) |
6 | % | 11 | % | 133 | % | 15 | % |
Qualcomm Announces Second Quarter Fiscal 2010 Results | Page 4 of 19 |
Qualcomm Announces Second Quarter Fiscal 2010 Results | Page 5 of 19 |
Qualcomm Announces Second Quarter Fiscal 2010 Results | Page 6 of 19 |
Current Guidance | ||
Q3 FY10 Estimates | ||
Pro Forma |
||
Revenues
|
$2.50B - $2.70B | |
Year-over-year change
|
decrease 2% - 9% | |
Diluted earnings per share (EPS)
|
$0.51 - $0.55 | |
Year-over-year change
|
decrease 6% - increase 2% | |
GAAP |
||
Revenues
|
$2.50B - $2.70B | |
Year-over-year change
|
decrease 2% - 9% | |
Diluted EPS
|
$0.40 - $0.44 | |
Year-over-year change
|
decrease 9% - even | |
Diluted EPS attributable to QSI
|
($0.02) | |
Diluted EPS attributable to share-based compensation
|
($0.07) | |
Diluted EPS attributable to certain tax items (1)
|
($0.02) | |
Metrics |
||
MSM shipments
|
approx. 97M - 102M | |
Year-over-year change
|
increase 3% - 9% | |
Total reported device sales (2)
|
$24.0B - $26.0B* | |
Year-over-year change
|
increase 13% - 23% | |
*Est. sales in March quarter, reported in June quarter |
Current Guidance | ||
FY 2010 Estimates | ||
Pro Forma |
||
Revenues
|
$10.40B - $11.00B | |
Year-over-year change
|
even - increase 6% | |
Diluted EPS
|
$2.21 - $2.32 | |
Year-over-year change
|
increase 69% - 77% | |
GAAP |
||
Revenues
|
$10.40B - $11.00B | |
Year-over-year change
|
even - increase 6% | |
Diluted EPS
|
$1.71 - $1.82 | |
Year-over-year change
|
increase 80% - 92% | |
Diluted EPS attributable to QSI
|
($0.15) | |
Diluted EPS attributable to share-based compensation
|
($0.27) | |
Diluted EPS attributable to certain tax items (1)
|
($0.08) | |
Metrics |
||
Est. fiscal year* CDMA-based device average selling price range (2)
|
approx. $182 - $188 | |
*Shipments in Sept. to June quarters, reported in Dec. to Sept. quarters |
Current Guidance | |||||
Calendar 2010 | |||||
Estimates | |||||
Est. CDMA-based device shipments |
|||||
March quarter |
not provided | ||||
June quarter |
not provided | ||||
September quarter |
not provided | ||||
December quarter |
not provided | ||||
Est. Calendar year range (approx.) |
600M - 650M | ||||
Midpoint | |||||
Est. total CDMA-based units |
approx. 625M | ||||
Est. CDMA units |
approx. 236M | ||||
Est. WCDMA units |
approx. 389M |
(1) | The estimate of our fiscal 2010 GAAP effective tax rate includes tax expense of approximately $130 million that arises because deferred revenue related to the 2008 license and settlement agreements with Nokia is taxable in fiscal 2010 but the resulting deferred tax asset will reverse in future years when our state tax rate will be lower as a result of California tax legislation enacted in 2009. | |
(2) | Total reported device sales is the sum of all reported sales in U.S. dollars (as reported to us by our licensees) of all licensed CDMA-based subscriber devices (including handsets, modules, modem cards and other subscriber devices) by our licensees during a particular period. As with our prior estimates of CDMA-based device ASPs and unit shipments, the reported quarterly estimated ranges of ASPs and unit shipments are determined based on the information as reported to us by our licensees during the relevant period and our own estimates of the selling prices and unit shipments for licensees that do not provide such information. Not all licensees report sales, selling prices and/or unit shipments the same (e.g., some licensees report selling prices net of permitted deductions, such as transportation, insurance and packing costs, while other licensees report selling prices and then identify the amount of permitted deductions in their reports), and the way in which licensees report such information may change from time to time. |
Qualcomm Announces Second Quarter Fiscal 2010 Results | Page 7 of 19 |
Fiscal 2009 | Fiscal 2010 | |||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | FY09 | Q1 | |||||||||||||||||||
Total reported device sales (in billions)(1) |
$ | 26.6 | $ | 25.8 | $ | 21.2 | $ | 24.9 | $ | 98.5 | $ | 24.5 | ||||||||||||
Est. CDMA-based device ASP, previously
reported(2) |
$ | 212 | $ | 201 | $ | 191 | $ | 196 | $ | 200 | $ | 184 | ||||||||||||
Adjustment |
2 | 5 | 5 | 7 | 5 | 8 | ||||||||||||||||||
Midpoint(3) of est. CDMA-based device ASP
range(2) (applying adjusted assumptions) |
$ | 214 | $ | 206 | $ | 196 | $ | 203 | $ | 205 | $ | 192 | ||||||||||||
Est. CDMA-based device ASP range
(applying adjusted assumptions)(2) |
$ | 211-$217 | $ | 203-$209 | $ | 193-$199 | $ | 200-$206 | $ | 202-$208 | $ | 189-$195 | ||||||||||||
Est. CDMA-based device shipments, previously
reported (2) |
125 | 128 | 111 | 127 | 492 | 133 | ||||||||||||||||||
Adjustment |
(1 | ) | (3 | ) | (3 | ) | (5 | ) | (12 | ) | (5 | ) | ||||||||||||
Midpoint(3) of est. CDMA-based device
shipments range(2) (applying adjusted
assumptions) |
124 | 125 | 108 | 122 | 480 | 128 | ||||||||||||||||||
Est. CDMA-based device shipments range
(applying adjusted assumptions)(2) |
122-126 | 123-127 | 106-110 | 120-124 | 472-488 | 126-130 |
(1) | Total reported device sales is the sum of all reported sales in U.S. dollars (as reported to us by our licensees) of all licensed CDMA-based subscriber devices (including handsets, modules, modem cards and other subscriber devices) by our licensees during a particular period. Not all licensees report sales the same (e.g., some licensees report selling prices net of permitted deductions, such as transportation, insurance and packing costs, while other licensees report selling prices and then identify the amount of permitted deductions in their reports), and the way in which licensees report such information may change from time to time. | |
(2) | As with our prior estimates of CDMA-based device ASPs and unit shipments, the reported quarterly estimated ranges of ASPs and unit shipments are determined based on the information as reported to us by our licensees during the relevant period and our own estimates of the selling prices and unit shipments for licensees that do not provide such information. Not all licensees report selling prices and/or unit shipments the same (e.g., some licensees report selling prices net of permitted deductions, such as transportation, insurance and packing costs, while other licensees report selling prices and then identify the amount of permitted deductions in their reports), and the way in which licensees report such information may change from time to time. | |
(3) | The midpoints of the estimated ASP and device shipment ranges for the relevant periods are identified for comparison purposes only and do not indicate a higher degree of confidence in the midpoints. |
Qualcomm Announces Second Quarter Fiscal 2010 Results | Page 8 of 19 |
Pro Forma | Pro | Share-Based | In- | |||||||||||||||||||||||||||||||||||||
Reconciling | Forma | Compensation | Tax Items | Process | ||||||||||||||||||||||||||||||||||||
SEGMENTS | QCT | QTL | QWI | Items (1)(5) | (5) | (2) | (3) | R&D | QSI (4) | GAAP (5) | ||||||||||||||||||||||||||||||
Q2 FISCAL 2010 |
||||||||||||||||||||||||||||||||||||||||
Revenues |
$ | 1,537 | $ | 974 | $ | 152 | ($2 | ) | $ | 2,661 | $ | | $ | | $ | | $ | 2 | $ | 2,663 | ||||||||||||||||||||
Change from prior year |
17 | % | 2 | % | (14 | %) | N/M | 9 | % | (75 | %) | 8 | % | |||||||||||||||||||||||||||
Change from prior quarter |
(4 | %) | 6 | % | 7 | % | N/M | (0 | %) | 0 | % | (0 | %) | |||||||||||||||||||||||||||
Operating income (loss) |
$ | 1,065 | ($154 | ) | $ | | ($3 | ) | ($132 | ) | $ | 776 | ||||||||||||||||||||||||||||
Change from prior year |
398 | % | (10 | %) | N/M | (69 | %) | N/M | ||||||||||||||||||||||||||||||||
Change from prior quarter |
(6 | %) | (2 | %) | N/A | (27 | %) | (12 | %) | |||||||||||||||||||||||||||||||
EBT |
$ | 344 | $ | 821 | ($1 | ) | $ | 94 | $ | 1,258 | ($154 | ) | $ | | ($3 | ) | ($136 | ) | $ | 965 | ||||||||||||||||||||
Change from prior year |
59 | % | (2 | %) | N/M | N/M | N/M | (10 | %) | N/M | (33 | %) | N/M | |||||||||||||||||||||||||||
Change from prior quarter |
(19 | %) | 6 | % | N/M | N/M | (4 | %) | (2 | %) | N/A | (27 | %) | (8 | %) | |||||||||||||||||||||||||
EBT as a % of revenues |
22 | % | 84 | % | (1 | %) | N/M | 47 | % | N/M | N/M | N/M | 36 | % | ||||||||||||||||||||||||||
Net income (loss) |
$ | 989 | ($98 | ) | ($33 | ) | ($3 | ) | ($81 | ) | $ | 774 | ||||||||||||||||||||||||||||
Change from prior year |
N/M | 32 | % | N/M | N/M | (45 | %) | N/M | ||||||||||||||||||||||||||||||||
Change from prior quarter |
(5 | %) | 14 | % | N/M | N/A | (50 | %) | (8 | %) | ||||||||||||||||||||||||||||||
Diluted EPS |
$ | 0.59 | ($0.06 | ) | ($0.02 | ) | $ | | ($0.05 | ) | $ | 0.46 | ||||||||||||||||||||||||||||
Change from prior year |
N/M | 33 | % | N/M | N/M | (67 | %) | N/M | ||||||||||||||||||||||||||||||||
Change from prior quarter |
(5 | %) | 14 | % | N/M | N/A | (67 | %) | (8 | %) | ||||||||||||||||||||||||||||||
Diluted shares used |
1,678 | 1,678 | 1,678 | 1,678 | 1,678 | 1,678 | ||||||||||||||||||||||||||||||||||
Q1 FISCAL 2010 |
||||||||||||||||||||||||||||||||||||||||
Revenues |
$ | 1,608 | $ | 917 | $ | 142 | $ | 1 | $ | 2,668 | $ | | $ | | $ | | $ | 2 | $ | 2,670 | ||||||||||||||||||||
Operating income (loss) |
1,134 | (151 | ) | | | (104 | ) | 879 | ||||||||||||||||||||||||||||||||
EBT |
425 | 772 | 9 | 104 | 1,310 | (151 | ) | | | (107 | ) | 1,052 | ||||||||||||||||||||||||||||
Net income (loss) |
1,041 | (114 | ) | (32 | ) | | (54 | ) | 841 | |||||||||||||||||||||||||||||||
Diluted EPS |
$ | 0.62 | ($0.07 | ) | ($0.02 | ) | $ | | ($0.03 | ) | $ | 0.50 | ||||||||||||||||||||||||||||
Diluted shares used |
1,691 | 1,691 | 1,691 | 1,691 | 1,691 | 1,691 | ||||||||||||||||||||||||||||||||||
Q2 FISCAL 2009 |
||||||||||||||||||||||||||||||||||||||||
Revenues |
$ | 1,316 | $ | 954 | $ | 176 | $ | 1 | $ | 2,447 | $ | | $ | | $ | | $ | 8 | $ | 2,455 | ||||||||||||||||||||
Operating income (loss) |
214 | (140 | ) | | (6 | ) | (78 | ) | (10 | ) | ||||||||||||||||||||||||||||||
EBT |
217 | 839 | 25 | (934 | ) | 147 | (140 | ) | | (6 | ) | (102 | ) | (101 | ) | |||||||||||||||||||||||||
Net loss |
(46 | ) | (145 | ) | (36 | ) | (6 | ) | (56 | ) | (289 | ) | ||||||||||||||||||||||||||||
Diluted EPS |
($0.03 | ) | ($0.09 | ) | ($0.02 | ) | $ | | ($0.03 | ) | ($0.18 | ) | ||||||||||||||||||||||||||||
Diluted shares used |
1,651 | 1,651 | 1,651 | 1,651 | 1,651 | 1,651 | ||||||||||||||||||||||||||||||||||
Q3 FISCAL 2009 |
||||||||||||||||||||||||||||||||||||||||
Revenues |
$ | 1,786 | $ | 807 | $ | 148 | $ | 3 | $ | 2,744 | $ | | $ | | $ | | $ | 9 | $ | 2,753 | ||||||||||||||||||||
Operating income (loss) |
1,122 | (151 | ) | | | (77 | ) | 894 | ||||||||||||||||||||||||||||||||
EBT |
548 | 663 | (3 | ) | (7 | ) | 1,201 | (151 | ) | | | (66 | ) | 984 | ||||||||||||||||||||||||||
Net income (loss) |
903 | (127 | ) | | | (39 | ) | 737 | ||||||||||||||||||||||||||||||||
Diluted EPS |
$ | 0.54 | ($0.08 | ) | $ | | $ | | ($0.02 | ) | $ | 0.44 | ||||||||||||||||||||||||||||
Diluted shares used |
1,675 | 1,675 | 1,675 | 1,675 | 1,675 | 1,675 | ||||||||||||||||||||||||||||||||||
6 MONTHS FISCAL 2010 |
||||||||||||||||||||||||||||||||||||||||
Revenues |
$ | 3,144 | $ | 1,891 | $ | 294 | $ | 0 | $ | 5,329 | $ | | $ | | $ | | $ | 4 | $ | 5,333 | ||||||||||||||||||||
Change from prior year |
19 | % | (4 | %) | (15 | %) | N/M | 7 | % | (69 | %) | 7 | % | |||||||||||||||||||||||||||
Operating income (loss) |
$ | 2,198 | ($304 | ) | $ | | ($3 | ) | ($236 | ) | $ | 1,655 | ||||||||||||||||||||||||||||
Change from prior year |
83 | % | (7 | %) | (36 | %) | 125 | % | ||||||||||||||||||||||||||||||||
EBT |
$ | 769 | $ | 1,594 | $ | 8 | $ | 195 | $ | 2,566 | ($304 | ) | $ | | ($3 | ) | ($243 | ) | $ | 2,016 | ||||||||||||||||||||
Change from prior year |
100 | % | (7 | %) | (71 | %) | N/M | 205 | % | (7 | %) | N/M | (22 | %) | 476 | % | ||||||||||||||||||||||||
Net income (loss) |
$ | 2,030 | ($211 | ) | ($65 | ) | ($3 | ) | ($136 | ) | $ | 1,615 | ||||||||||||||||||||||||||||
Change from prior year |
330 | % | 13 | % | N/M | N/M | (1 | %) | N/M | |||||||||||||||||||||||||||||||
Diluted EPS |
$ | 1.21 | ($0.13 | ) | ($0.04 | ) | $ | | ($0.08 | ) | $ | 0.96 | ||||||||||||||||||||||||||||
Change from prior year |
332 | % | 13 | % | N/M | N/M | 0 | % | N/M | |||||||||||||||||||||||||||||||
Diluted shares used |
1,685 | 1,685 | 1,685 | 1,685 | 1,685 | 1,685 | ||||||||||||||||||||||||||||||||||
6 MONTHS FISCAL 2009 |
||||||||||||||||||||||||||||||||||||||||
Revenues |
$ | 2,650 | $ | 1,961 | $ | 346 | $ | 2 | $ | 4,959 | $ | | $ | | $ | | $ | 13 | $ | 4,972 | ||||||||||||||||||||
Operating income (loss) |
1,200 | (285 | ) | | (6 | ) | (174 | ) | 735 | |||||||||||||||||||||||||||||||
EBT |
385 | 1,713 | 28 | (1,285 | ) | 841 | (285 | ) | | (6 | ) | (200 | ) | 350 | ||||||||||||||||||||||||||
Net income (loss) |
472 | (243 | ) | (36 | ) | (6 | ) | (135 | ) | 52 | ||||||||||||||||||||||||||||||
Diluted EPS |
$ | 0.28 | ($0.15 | ) | ($0.02 | ) | $ | | ($0.08 | ) | $ | 0.03 | ||||||||||||||||||||||||||||
Diluted shares used |
1,665 | 1,665 | 1,665 | 1,665 | 1,665 | 1,665 | ||||||||||||||||||||||||||||||||||
FISCAL YEAR 2009 |
||||||||||||||||||||||||||||||||||||||||
Revenues |
$ | 6,135 | $ | 3,605 | $ | 641 | $ | 6 | $ | 10,387 | $ | | $ | | $ | | $ | 29 | $ | 10,416 | ||||||||||||||||||||
Operating income (loss) |
3,153 | (584 | ) | | (6 | ) | (337 | ) | 2,226 | |||||||||||||||||||||||||||||||
EBT |
1,441 | 3,068 | 20 | (1,502 | ) | 3,027 | (584 | ) | | (6 | ) | (361 | ) | 2,076 | ||||||||||||||||||||||||||
Net income (loss) |
2,187 | (455 | ) | 118 | (6 | ) | (252 | ) | 1,592 | |||||||||||||||||||||||||||||||
Diluted EPS |
$ | 1.31 | ($0.27 | ) | $ | 0.07 | $ | | ($0.15 | ) | $ | 0.95 | ||||||||||||||||||||||||||||
Diluted shares used |
1,673 | 1,673 | 1,673 | 1,673 | 1,673 | 1,673 |
Qualcomm Announces Second Quarter Fiscal 2010 Results | Page 9 of 19 |
(1) | Pro forma reconciling items related to revenues consist primarily of other nonreportable segment revenues less intersegment eliminations. Pro forma reconciling items related to earnings before taxes consist primarily of certain investment income or losses, research and development expenses, sales and marketing expenses and other operating 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) | During the first and second quarters of fiscal 2010, the Company recorded $32 million and $33 million in state tax expense, respectively, or $0.02 diluted loss per share for each quarter, that arises because deferred revenue related to the license and settlement agreements with Nokia is taxable in fiscal 2010 but the resulting deferred tax asset will reverse in future years when the Companys state tax rate will be lower. | ||
(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 pro forma tax provision, the tax items column and the tax provision related to share-based compensation from the GAAP tax provision. | ||
(5) | Fiscal 2009 results included a $783 million charge related to a litigation settlement and patent agreement with Broadcom Corporation, including $748 million recorded in the second quarter of fiscal 2009 and $35 million recorded in the fourth quarter of 2009. The fourth quarter of fiscal 2009 results also included a $230 million charge related to a fine that had been announced by the Korea Fair Trade Commission. |
Qualcomm Announces Second Quarter Fiscal 2010 Results | Page 10 of 19 |
Qualcomm Announces Second Quarter Fiscal 2010 Results | Page 11 of 19 |
Qualcomm Announces Second Quarter Fiscal 2010 Results | Page 12 of 19 |
Qualcomm Announces Second Quarter Fiscal 2010 Results | Page 13 of 19 |
Three Months Ended March 28, 2010 | ||||||||||||||||||||||||
Share-Based | In-Process | |||||||||||||||||||||||
Pro Forma | Compensation | Tax Items | R&D | QSI | GAAP | |||||||||||||||||||
Revenues: |
||||||||||||||||||||||||
Equipment and services |
$ | 1,593 | $ | | $ | | $ | | $ | 2 | $ | 1,595 | ||||||||||||
Licensing and royalty fees |
1,068 | | | | | 1,068 | ||||||||||||||||||
Total revenues |
2,661 | | | | 2 | 2,663 | ||||||||||||||||||
Operating expenses: |
||||||||||||||||||||||||
Cost of equipment and services
revenues |
744 | 10 | | | 55 | 809 | ||||||||||||||||||
Research and development |
547 | 75 | | 3 | 23 | 648 | ||||||||||||||||||
Selling, general and administrative |
305 | 69 | | | 56 | 430 | ||||||||||||||||||
Total operating expenses |
1,596 | 154 | | 3 | 134 | 1,887 | ||||||||||||||||||
Operating income (loss) |
1,065 | (154 | ) | | (3 | ) | (132 | ) | 776 | |||||||||||||||
Investment income (loss), net |
193 | (a) | | | | (4) | (b) | 189 | ||||||||||||||||
Income (loss) before income taxes |
1,258 | (154 | ) | | (3 | ) | (136 | ) | 965 | |||||||||||||||
Income tax (expense) benefit |
(269) | (c) | 56 | (33) | (e) | | 55 | (d) | (191) | (c) | ||||||||||||||
Net income (loss) |
$ | 989 | $ | (98 | ) | $ | (33 | ) | $ | (3 | ) | $ | (81 | ) | $ | 774 | ||||||||
Earnings (loss) per common share: |
||||||||||||||||||||||||
Diluted |
$ | 0.59 | $ | (0.06 | ) | $ | (0.02 | ) | $ | (0.00 | ) | $ | (0.05 | ) | $ | 0.46 | ||||||||
Shares used in per share calculations: |
||||||||||||||||||||||||
Diluted |
1,678 | 1,678 | 1,678 | 1,678 | 1,678 | 1,678 | ||||||||||||||||||
Supplemental Financial Data: |
||||||||||||||||||||||||
Operating Cash Flow |
$ | 908 | $ | (18) | (g) | $ | | $ | | $ | (97 | ) | $ | 793 | ||||||||||
Operating Cash Flow as a % of Revenues |
34 | % | N/M | 30 | % | |||||||||||||||||||
Free Cash Flow (f) |
$ | 823 | $ | (18) | (g) | $ | | $ | | $ | (120 | ) | $ | 685 | ||||||||||
Free Cash Flow as a % of Revenues |
31 | % | N/M | 26 | % |
(a) | Included $129 million in interest and dividend income related to cash, cash equivalents and marketable securities, which were not part of the Companys strategic investment portfolio, $80 million in net realized gains on investments and $3 million in gains on derivatives, partially offset by $15 million in other-than-temporary losses on investments and $4 million in interest expense. | |
(b) | Included $3 million in interest expense and $1 million in other-than-temporary losses on investments. | |
(c) | The second quarter of fiscal 2010 effective tax rates were 20% for GAAP and 21% for 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 pro forma tax provision, the tax items column and the tax provision related to share-based compensation from the GAAP tax provision. | |
(e) | During the second quarter of fiscal 2010, the Company recorded a $33 million state tax expense, or $0.02 diluted loss per share, that arises because deferred revenue related to the license and settlement agreements with Nokia is taxable in fiscal 2010 but the resulting deferred tax asset will reverse in future years when the Companys state tax rate will be lower. | |
(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 Net Cash Provided by Operating Activities (GAAP) and other supplemental disclosures for the three months ended March 28, 2010, included herein. | |
(g) | Incremental tax benefits from stock options exercised during the period. |
Qualcomm Announces Second Quarter Fiscal 2010 Results | Page 14 of 19 |
Six Months Ended March 28, 2010 | ||||||||||||||||||||||||
Share-Based | In-Process | |||||||||||||||||||||||
Pro Forma | Compensation | Tax Items | R&D | QSI | GAAP | |||||||||||||||||||
Revenues: |
||||||||||||||||||||||||
Equipment and services |
$ | 3,253 | $ | | $ | | $ | | $ | 4 | $ | 3,257 | ||||||||||||
Licensing and royalty fees |
2,076 | | | | | 2,076 | ||||||||||||||||||
Total revenues |
5,329 | | | | 4 | 5,333 | ||||||||||||||||||
Operating expenses: |
||||||||||||||||||||||||
Cost of equipment and services
revenues |
1,502 | 21 | | | 101 | 1,624 | ||||||||||||||||||
Research and development |
1,049 | 147 | | 3 | 45 | 1,244 | ||||||||||||||||||
Selling, general and administrative |
580 | 136 | | | 94 | 810 | ||||||||||||||||||
Total operating expenses |
3,131 | 304 | | 3 | 240 | 3,678 | ||||||||||||||||||
Operating income (loss) |
2,198 | (304 | ) | | (3 | ) | (236 | ) | 1,655 | |||||||||||||||
Investment income (loss), net |
368 | (a) | | | | (7) | (b) | 361 | ||||||||||||||||
Income (loss) before income taxes |
2,566 | (304 | ) | | (3 | ) | (243 | ) | 2,016 | |||||||||||||||
Income tax (expense) benefit |
(536) | (c) | 93 | (65) | (e) | | 107 | (d) | (401) | (c) | ||||||||||||||
Net income (loss) |
$ | 2,030 | $ | (211 | ) | $ | (65 | ) | $ | (3 | ) | $ | (136 | ) | $ | 1,615 | ||||||||
Earnings (loss) per common share: |
||||||||||||||||||||||||
Diluted |
$ | 1.21 | $ | (0.13 | ) | $ | (0.04 | ) | $ | (0.00 | ) | $ | (0.08 | ) | $ | 0.96 | ||||||||
Shares used in per share calculations: |
||||||||||||||||||||||||
Diluted |
1,685 | 1,685 | 1,685 | 1,685 | 1,685 | 1,685 | ||||||||||||||||||
Supplemental Financial Data: |
||||||||||||||||||||||||
Operating cash flow |
$ | 2,246 | $ | (31) | (g) | $ | | $ | | $ | (183 | ) | $ | 2,032 | ||||||||||
Operating cash flow as a % of revenues |
42 | % | N/M | 38 | % | |||||||||||||||||||
Free cash flow (f) |
$ | 2,094 | $ | (31) | (g) | $ | | $ | | $ | (227 | ) | $ | 1,836 | ||||||||||
Free cash flow as a % of revenues |
39 | % | N/M | 34 | % |
(a) | Included $274 million in interest and dividend income related to cash, cash equivalents and marketable securities, which were not part of the Companys strategic investment portfolio, and $171 million in net realized gains on investments, partially offset by $66 million in other-than-temporary losses on investments, $10 million in interest expense and $1 million in losses on derivatives. | |
(b) | Included $7 million in other-than-temporary losses on investments, $6 million in interest expense and $5 million in equity in losses of investees, partially offset by $11 million in net realized gains on investments. | |
(c) | The first six months of fiscal 2010 effective tax rates were 20% for GAAP and 21% for 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 pro forma tax provision, the tax items column and the tax provision related to share-based compensation from the GAAP tax provision. | |
(e) | During the first six months of fiscal 2010, the Company recorded a $65 million state tax expense, or $0.04 diluted loss per share, that arises because deferred revenue related to the license and settlement agreements with Nokia is taxable in fiscal 2010 but the resulting deferred tax asset will reverse in future years when the Companys state tax rate will be lower. | |
(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 Net Cash Provided by Operating Activities (GAAP) and other supplemental disclosures for the six months ended March 28, 2010, included herein. | |
(g) | Incremental tax benefits from stock options exercised during the period. |
Qualcomm Announces Second Quarter Fiscal 2010 Results | Page 15 of 19 |
Three Months Ended March 28, 2010 | ||||||||||||||||||||||||
Share-Based | Tax | In-Process | ||||||||||||||||||||||
Pro Forma | Compensation | Items | R&D | QSI | GAAP | |||||||||||||||||||
Net cash provided (used) by operating activities |
$ | 908 | $ | (18 | )(a) | $ | | $ | | $ | (97 | ) | $ | 793 | ||||||||||
Less: capital expenditures |
(85 | ) | | | | (23 | ) | (108 | ) | |||||||||||||||
Free cash flow |
$ | 823 | $ | (18 | ) | $ | | $ | | $ | (120 | ) | $ | 685 | ||||||||||
Other supplemental cash disclosures: |
||||||||||||||||||||||||
Cash transfers from QSI (1) |
$ | 1 | $ | | $ | | $ | | $ | (1 | ) | $ | | |||||||||||
Cash transfers to QSI (2) |
(130 | ) | | | | 130 | | |||||||||||||||||
Net cash transfers |
$ | (129 | ) | $ | | $ | | $ | | $ | 129 | $ | | |||||||||||
Six Months Ended March 28, 2010 | ||||||||||||||||||||||||
Share-Based | Tax | In-Process | ||||||||||||||||||||||
Pro Forma | Compensation | Items | R&D | QSI | GAAP | |||||||||||||||||||
Net cash provided (used) by operating activities |
$ | 2,246 | $ | (31 | )(a) | $ | | $ | | $ | (183 | ) | $ | 2,032 | ||||||||||
Less: capital expenditures |
(152 | ) | | | | (44 | ) | (196 | ) | |||||||||||||||
Free cash flow |
$ | 2,094 | $ | (31 | ) | $ | | $ | | $ | (227 | ) | $ | 1,836 | ||||||||||
Other supplemental cash disclosures: |
||||||||||||||||||||||||
Cash transfers from QSI (1) |
$ | 13 | $ | | $ | | $ | | $ | (13 | ) | $ | | |||||||||||
Cash transfers to QSI (2) |
(243 | ) | | | | 243 | | |||||||||||||||||
Net cash transfers |
$ | (230 | ) | $ | | $ | | $ | | $ | 230 | $ | | |||||||||||
(1) | Cash from sale of equity investments. | |
(2) | Funding for strategic debt and equity investments, capital expenditures and other QSI operating expenses. |
Three Months Ended March 29, 2009 | ||||||||||||||||||||||||
Share-Based | Tax | In-Process | ||||||||||||||||||||||
Pro Forma | Compensation | Items | R&D | QSI | GAAP | |||||||||||||||||||
Net cash provided (used) by operating activities |
$ | 1,359 | $ | (16 | )(a) | $ | | $ | | $ | (80 | ) | $ | 1,263 | ||||||||||
Less: capital expenditures |
(206 | ) | | | | (28 | ) | (234 | ) | |||||||||||||||
Free cash flow |
$ | 1,153 | $ | (16 | ) | $ | | $ | | $ | (108 | ) | $ | 1,029 | ||||||||||
Six Months Ended March 29, 2009 | ||||||||||||||||||||||||
Share-Based | Tax | In-Process | ||||||||||||||||||||||
Pro Forma | Compensation | Items | R&D | QSI | GAAP | |||||||||||||||||||
Net cash provided (used) by operating activities |
$ | 4,988 | $ | (32 | )(a) | $ | | $ | | $ | (192 | ) | $ | 4,764 | ||||||||||
Less: capital expenditures |
(415 | ) | | | | (53 | ) | (468 | ) | |||||||||||||||
Free cash flow |
$ | 4,573 | $ | (32 | ) | $ | | $ | | $ | (245 | ) | $ | 4,296 | ||||||||||
(a) | Incremental tax benefits from stock options exercised during the period. |
Qualcomm Announces Second Quarter Fiscal 2010 Results | Page 16 of 19 |
Q3 FY09 | Current Guidance | |||||||
Results | Q3 FY10 Estimates | |||||||
Pro Forma |
||||||||
Diluted earnings per share (EPS) |
$0.54 | $0.51 - $0.55 | ||||||
Year-over-year change |
decrease 6% - increase 2% | |||||||
GAAP |
||||||||
Diluted EPS |
$0.44 | $0.40 - $0.44 | ||||||
Year-over-year change |
decrease 9% - even | |||||||
Diluted EPS attributable to QSI |
($0.02 | ) | ($0.02 | ) | ||||
Diluted EPS attributable to share-based compensation |
($0.08 | ) | ($0.07 | ) | ||||
Diluted EPS attributable to certain tax items |
$0.00 | ($0.02 | ) | |||||
Diluted EPS attributable to in-process R&D |
$0.00 | N/A |
FY 2009 | Current Guidance | |||||||
Results | FY 2010 Estimates | |||||||
Pro Forma |
||||||||
Diluted EPS |
$1.31 | $2.21 - $2.32 | ||||||
Year-over-year change |
increase 69% - 77% | |||||||
GAAP |
||||||||
Diluted EPS |
$0.95 | $1.71 - $1.82 | ||||||
Year-over-year change |
increase 80% - 92% | |||||||
Diluted EPS attributable to QSI |
($0.15 | ) | ($0.15 | ) | ||||
Diluted EPS attributable to share-based compensation |
($0.27 | ) | ($0.27 | ) | ||||
Diluted EPS attributable to certain tax items |
$0.07 | ($0.08 | ) | |||||
Diluted EPS attributable to in-process R&D |
$0.00 | N/A |
Qualcomm Announces Second Quarter Fiscal 2010 Results | Page 17 of 19 |
March 28, | September 27, | |||||||
2010 | 2009 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 2,553 | $ | 2,717 | ||||
Marketable securities |
8,603 | 8,352 | ||||||
Accounts receivable, net |
680 | 700 | ||||||
Inventories |
402 | 453 | ||||||
Deferred tax assets |
204 | 149 | ||||||
Other current assets |
210 | 199 | ||||||
Total current assets |
12,652 | 12,570 | ||||||
Marketable securities |
7,057 | 6,673 | ||||||
Deferred tax assets |
1,376 | 843 | ||||||
Property, plant and equipment, net |
2,374 | 2,387 | ||||||
Goodwill |
1,483 | 1,492 | ||||||
Other intangible assets, net |
3,093 | 3,065 | ||||||
Other assets |
462 | 415 | ||||||
Total assets |
$ | 28,497 | $ | 27,445 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
Current liabilities: |
||||||||
Trade accounts payable |
$ | 545 | $ | 636 | ||||
Payroll and other benefits related liabilities |
368 | 480 | ||||||
Unearned revenues |
592 | 441 | ||||||
Income taxes payable |
764 | 29 | ||||||
Other current liabilities |
1,061 | 1,227 | ||||||
Total current liabilities |
3,330 | 2,813 | ||||||
Unearned revenues |
3,687 | 3,464 | ||||||
Other liabilities |
760 | 852 | ||||||
Total liabilities |
7,777 | 7,129 | ||||||
Stockholders equity: |
||||||||
Preferred stock, $0.0001 par value; issuable in series;
8 shares authorized; none outstanding at
March 28, 2010 and September 27, 2009 |
| | ||||||
Common stock, $0.0001 par value; 6,000 shares authorized;
1,640 and 1,669 shares issued and outstanding at
March 28, 2010 and September 27, 2009, respectively |
| | ||||||
Paid-in capital |
7,613 | 8,493 | ||||||
Retained earnings |
12,287 | 11,235 | ||||||
Accumulated other comprehensive income |
820 | 588 | ||||||
Total stockholders equity |
20,720 | 20,316 | ||||||
Total liabilities and stockholders equity |
$ | 28,497 | $ | 27,445 | ||||
Qualcomm Announces Second Quarter Fiscal 2010 Results | Page 18 of 19 |
Three Months Ended | Six Months Ended | |||||||||||||||
March 28, | March 29, | March 28, | March 29, | |||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Revenues: |
||||||||||||||||
Equipment and services |
$ | 1,595 | $ | 1,412 | $ | 3,257 | $ | 2,835 | ||||||||
Licensing and royalty fees |
1,068 | 1,043 | 2,076 | 2,137 | ||||||||||||
Total revenues |
2,663 | 2,455 | 5,333 | 4,972 | ||||||||||||
Operating expenses: |
||||||||||||||||
Cost of equipment and services revenues |
809 | 738 | 1,624 | 1,493 | ||||||||||||
Research and development |
648 | 604 | 1,244 | 1,207 | ||||||||||||
Selling, general and administrative |
430 | 375 | 810 | 789 | ||||||||||||
Litigation settlement, patent license
and other related items |
| 748 | | 748 | ||||||||||||
Total operating expenses |
1,887 | 2,465 | 3,678 | 4,237 | ||||||||||||
Operating income (loss) |
776 | (10 | ) | 1,655 | 735 | |||||||||||
Investment income (loss), net |
189 | (91 | ) | 361 | (385 | ) | ||||||||||
Income (loss) before income taxes |
965 | (101 | ) | 2,016 | 350 | |||||||||||
Income tax expense |
(191 | ) | (188 | ) | (401 | ) | (298 | ) | ||||||||
Net income (loss) |
$ | 774 | $ | (289 | ) | $ | 1,615 | $ | 52 | |||||||
Basic earnings (loss) per common share |
$ | 0.47 | $ | (0.18 | ) | $ | 0.97 | $ | 0.03 | |||||||
Diluted earnings (loss) per common share |
$ | 0.46 | $ | (0.18 | ) | $ | 0.96 | $ | 0.03 | |||||||
Shares used in per share calculations: |
||||||||||||||||
Basic |
1,662 | 1,651 | 1,667 | 1,652 | ||||||||||||
Diluted |
1,678 | 1,651 | 1,685 | 1,665 | ||||||||||||
Dividends per share paid |
$ | 0.17 | $ | 0.32 | $ | 0.34 | $ | 0.32 | ||||||||
Dividends per share announced |
$ | 0.17 | $ | 0.16 | $ | 0.34 | $ | 0.32 | ||||||||
Qualcomm Announces Second Quarter Fiscal 2010 Results | Page 19 of 19 |
Three Months Ended | Six Months Ended | |||||||||||||||
March 28, | March 29, | March 28, | March 29, | |||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Operating Activities: |
||||||||||||||||
Net income (loss) |
$ | 774 | $ | (289 | ) | $ | 1,615 | $ | 52 | |||||||
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: |
||||||||||||||||
Depreciation and amortization |
167 | 154 | 329 | 306 | ||||||||||||
Revenues related to non-monetary exchanges |
(31 | ) | (29 | ) | (68 | ) | (57 | ) | ||||||||
Income tax
provision (less than) in excess of income tax payments |
(38 | ) | 121 | (6 | ) | 166 | ||||||||||
Non-cash portion of share-based compensation expense |
153 | 140 | 304 | 285 | ||||||||||||
Incremental tax benefit from stock options exercised |
(18 | ) | (16 | ) | (31 | ) | (32 | ) | ||||||||
Net realized (gains) losses on marketable securities and other investments |
(80 | ) | | (182 | ) | 33 | ||||||||||
Impairment losses on marketable securities and other investments |
16 | 209 | 73 | 601 | ||||||||||||
Other items, net |
(8 | ) | (5 | ) | (4 | ) | (20 | ) | ||||||||
Changes in assets and liabilities, net of effects of acquisitions: |
||||||||||||||||
Accounts receivable, net |
(52 | ) | 108 | 35 | 2,824 | |||||||||||
Inventories |
(49 | ) | 48 | 52 | 113 | |||||||||||
Other assets |
(38 | ) | (11 | ) | (70 | ) | (30 | ) | ||||||||
Trade accounts payable |
145 | 89 | (81 | ) | (103 | ) | ||||||||||
Payroll, benefits and other liabilities |
(115 | ) | 764 | (239 | ) | 710 | ||||||||||
Unearned revenues |
(33 | ) | (20 | ) | 305 | (84 | ) | |||||||||
Net cash provided by operating activities |
793 | 1,263 | 2,032 | 4,764 | ||||||||||||
Investing Activities: |
||||||||||||||||
Capital expenditures |
(108 | ) | (234 | ) | (196 | ) | (468 | ) | ||||||||
Purchases of available-for-sale securities |
(2,382 | ) | (1,710 | ) | (4,480 | ) | (4,296 | ) | ||||||||
Proceeds from sale of available-for-sale securities |
2,228 | 1,088 | 4,241 | 2,461 | ||||||||||||
Cash received for partial settlement of investment receivables |
25 | 115 | 33 | 317 | ||||||||||||
Other investments and acquisitions, net of cash acquired |
(22 | ) | (26 | ) | (28 | ) | (40 | ) | ||||||||
Change in collateral held under securities lending |
| 11 | | 173 | ||||||||||||
Other items, net |
4 | 10 | 3 | 6 | ||||||||||||
Net cash used by investing activities |
(255 | ) | (746 | ) | (427 | ) | (1,847 | ) | ||||||||
Financing Activities: |
||||||||||||||||
Proceeds from issuance of common stock |
332 | 75 | 484 | 101 | ||||||||||||
Incremental tax benefit from stock options exercised |
18 | 16 | 31 | 32 | ||||||||||||
Repurchase and retirement of common stock |
(1,715 | ) | | (1,715 | ) | (285 | ) | |||||||||
Dividends paid |
(279 | ) | (528 | ) | (563 | ) | (528 | ) | ||||||||
Change in obligations under securities lending |
| (11 | ) | | (173 | ) | ||||||||||
Other items, net |
| (2 | ) | (1 | ) | (3 | ) | |||||||||
Net cash used by financing activities |
(1,644 | ) | (450 | ) | (1,764 | ) | (856 | ) | ||||||||
Effect of exchange rate changes on cash |
(1 | ) | (1 | ) | (5 | ) | (9 | ) | ||||||||
Net (decrease) increase in cash and cash equivalents |
(1,107 | ) | 66 | (164 | ) | 2,052 | ||||||||||
Cash and cash equivalents at beginning of period |
3,660 | 3,826 | 2,717 | 1,840 | ||||||||||||
Cash and cash equivalents at end of period |
$ | 2,553 | $ | 3,892 | $ | 2,553 | $ | 3,892 | ||||||||