• | Revenues: 1 $6.81 billion, up 9 percent year-over-year (y-o-y) and 7 percent sequentially. |
• | Operating income: 1 $2.08 billion, up 24 percent y-o-y and 4 percent sequentially. |
• | Net income: 2 $2.24 billion, up 42 percent y-o-y and 14 percent sequentially. |
• | Diluted earnings per share: 2 $1.31, up 46 percent y-o-y and 15 percent sequentially. |
• | Effective tax rate: 1 10 percent. |
• | Operating cash flow: $2.67 billion, up 29 percent y-o-y; 39 percent of revenues. |
• | Return of capital to stockholders: $2.06 billion, including $1.35 billion through repurchases of 17.0 million shares of common stock and $706 million, or $0.42 per share, of cash dividends paid. |
• | Revenues: $6.81 billion, up 9 percent y-o-y and 7 percent sequentially. |
• | Operating income: $2.43 billion, up 19 percent y-o-y and 4 percent sequentially. |
• | Net income: $2.47 billion, up 35 percent y-o-y and 10 percent sequentially. |
• | Diluted earnings per share: $1.44, up 40 percent y-o-y and 10 percent sequentially. |
• | Effective tax rate: 13 percent. |
• | The third quarter of fiscal 2014 results included: |
◦ | $208 million of income, or $0.12 per share, of which $184 million was recorded in other income, due to the reversal of accruals related to our litigation with ParkerVision; and |
◦ | $164 million of charges, or $0.08 per share, that resulted from an impairment on goodwill and long-lived assets related to our QMT (Qualcomm MEMS Technologies) division. |
• | The third quarter of fiscal 2013 results included: |
◦ | $158 million charge, or $0.06 per share, that resulted from an impairment on long-lived assets related to our QMT division. |
• | MSMTM chip shipments: 225 million units, up 31 percent y-o-y and 20 percent sequentially. |
• | March quarter total reported device sales: approximately $58.1 billion, up 3 percent y-o-y and down 13 percent sequentially. |
◦ | March quarter estimated 3G/4G device shipments: approximately 250 to 254 million units, at an estimated average selling price of approximately $228 to $234 per unit. |
($ in millions) | Non-GAAP | QSI | Share-Based Compensation | Acquisition-Related Items | GAAP | ||||||||||||||
Third quarter fiscal 2014 | $ | 1,251 | $ | 1 | $ | 174 | $ | 3 | $ | 1,429 | |||||||||
As % of revenues | 18 | % | 21 | % | |||||||||||||||
Third quarter fiscal 2013 | $ | 1,130 | $ | 1 | $ | 166 | $ | 1 | $ | 1,298 | |||||||||
As % of revenues | 18 | % | 21 | % | |||||||||||||||
Year-over-year change ($) | 11 | % | N/M | 5 | % | N/M | 10 | % |
($ in millions) | Non-GAAP | QSI | Share-Based Compensation | Acquisition-Related Items | GAAP | ||||||||||||||
Third quarter fiscal 2014 | $ | 484 | $ | 4 | $ | 88 | $ | 6 | $ | 582 | |||||||||
As % of revenues | 7 | % | 9 | % | |||||||||||||||
Third quarter fiscal 2013 | $ | 505 | $ | 6 | $ | 96 | $ | 6 | $ | 613 | |||||||||
As % of revenues | 8 | % | 10 | % | |||||||||||||||
Year-over-year change ($) | (4 | %) | (33 | %) | (8 | %) | N/M | (5 | %) |
FOURTH FISCAL QUARTER | |||||||
Q4 FY13 Results | Current Guidance Q4 FY14 Estimates | ||||||
Revenues | $6.48 | B | $6.5B - $7.4B | ||||
Year-over-year change | even - increase 14% | ||||||
Non-GAAP diluted earnings per share (EPS) | $1.05 | $1.20 - $1.35 | |||||
Year-over-year change | increase 14% - 29% | ||||||
Diluted EPS attributable to QSI | ($0.01 | ) | $0.00 | ||||
Diluted EPS attributable to share-based compensation | ($0.13 | ) | ($0.13 | ) | |||
Diluted EPS attributable to acquisition-related items | ($0.04 | ) | ($0.04 | ) | |||
GAAP diluted EPS | $0.86 | $1.03 - $1.18 | |||||
Year-over-year change | increase 20% - 37% | ||||||
Metrics | |||||||
MSM chip shipments | 190M | 230M - 245M | |||||
Year-over-year change | increase 21% - 29% | ||||||
Total reported device sales (1) | approx. $60.2B* | approx. $53.0B - $59.0B* | |||||
Year-over-year change | decrease 2% - 12% | ||||||
*Est. sales in June quarter, reported in September quarter |
FISCAL YEAR | ||||||||||
FY 2013 Results | Prior Guidance FY 2014 Estimates (2) | Current Guidance FY 2014 Estimates | ||||||||
Revenues | $24.87 | B | $26.0B - $27.5B | $26.3B - $27.2B | ||||||
Year-over-year change | increase 5% - 11% | increase 6% - 9% | ||||||||
Non-GAAP diluted EPS | $4.51 | $5.05 - $5.25 | $5.21 - $5.36 | |||||||
Year-over-year change | increase 12% - 16% | increase 16% - 19% | ||||||||
Diluted EPS attributable to QSI | $0.02 | ($0.01 | ) | ($0.01 | ) | |||||
Diluted EPS attributable to share-based compensation | ($0.51 | ) | ($0.51 | ) | ($0.51 | ) | ||||
Diluted EPS attributable to acquisition-related items | ($0.16 | ) | ($0.16 | ) | ($0.16 | ) | ||||
Diluted EPS attributable to tax items | $0.04 | N/A | $0.04 | |||||||
GAAP diluted EPS | $3.91 | $4.37 - $4.57 | $4.57 - $4.72 | |||||||
Year-over-year change | increase 12% - 17% | increase 17% - 21% | ||||||||
Metrics | ||||||||||
Est. fiscal year* 3G/4G device average selling price range (1) | approx. $223 - $229 | approx. $218 - $228 | approx. $222 - $228 | |||||||
*Shipments in Sept. to June quarters, reported in Dec. to Sept. quarters |
CALENDAR YEAR Device Estimates (1) | ||||
Calendar 2013 Estimates | Prior Guidance Calendar 2014 Estimates | Current Guidance Calendar 2014 Estimates | ||
Est. 3G/4G device shipments | ||||
March quarter | approx. 244M - 248M | not provided | approx. 250M - 254M | |
June quarter | approx. 260M - 264M | not provided | not provided | |
September quarter | approx. 276M - 280M | not provided | not provided | |
December quarter | approx. 295M - 299M | not provided | not provided | |
Est. calendar year range (approx.) | 1,075M - 1,091M | 1,220M - 1,300M | 1,040M - 1,130M (3) |
(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, OFDMA-based and CDMA/OFDMA multimode subscriber devices (including handsets, modules, modem cards and other subscriber devices) by our licensees during a particular period (collectively, 3G/4G devices). The reported quarterly estimated ranges of average selling prices (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 way (e.g., some licensees report sales net of permitted deductions, including transportation, insurance, packing costs and other items, while other licensees report sales 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. In addition, certain licensees may not report (in the quarter in which they are contractually obligated to report) their sales of certain types of subscriber units, which (as a result of audits, legal actions or for other reasons) may be reported in a subsequent quarter. Accordingly, total reported device sales, estimated unit shipments and estimated ASPs for a particular period may include prior period activity that was not reported by the licensee until such particular period. |
(2) | Our prior guidance for fiscal 2014 GAAP diluted EPS excluded a $66 million tax benefit that we recorded in the third quarter of fiscal 2014 as a result of an agreement reached with the Internal Revenue Service, which was excluded from our Non-GAAP results. |
(3) | We expect calendar year 2014 3G/4G device shipments to be approximately 1.3 billion globally. However, our estimate of calendar year 2014 3G/4G device shipments that we currently expect to be reported to us is approximately 1.04 billion to 1.13 billion, which is adjusted for units that we believe may not be reported to us, are in dispute or are currently unlicensed. We are taking steps to address these issues, although the timing of any resolution is uncertain. |
SEGMENTS | QCT | QTL | Non-GAAP Reconciling Items (1) (2) | Non-GAAP (3) | QSI (3) | Share-Based Compensation (3) | Acquisition-Related Items (3) | Tax Items | GAAP | ||||||||||||||||
Q3 - FISCAL 2014 | |||||||||||||||||||||||||
Revenues | $4,957 | $1,803 | $46 | $6,806 | $— | $— | $— | $— | $6,806 | ||||||||||||||||
Change from prior year | 17 | % | (3 | %) | (70 | %) | 9 | % | 9 | % | |||||||||||||||
Change from prior quarter | 17 | % | (13 | %) | (13 | %) | 7 | % | 7 | % | |||||||||||||||
Operating income (loss) | $2,425 | ($5) | ($274) | ($71) | $— | $2,075 | |||||||||||||||||||
Change from prior year | 19 | % | 29 | % | 2 | % | — | % | 24 | % | |||||||||||||||
Change from prior quarter | 4 | % | 17 | % | (9 | %) | 21 | % | 4 | % | |||||||||||||||
EBT | $1,116 | $1,550 | $177 | $2,843 | ($1) | ($274) | ($71) | $— | $2,497 | ||||||||||||||||
Change from prior year | 51 | % | (5 | %) | N/M | 29 | % | N/M | 2 | % | — | % | 31 | % | |||||||||||
Change from prior quarter | 51 | % | (15 | %) | N/M | 7 | % | 97 | % | (9 | %) | 21 | % | 10 | % | ||||||||||
EBT as % of revenues | 23 | % | 86 | % | N/M | 42 | % | 37 | % | ||||||||||||||||
Net income (loss) | $2,470 | $— | ($232) | ($66) | $66 | $2,238 | |||||||||||||||||||
Change from prior year | 35 | % | N/M | (5 | %) | (3 | %) | N/M | 42 | % | |||||||||||||||
Change from prior quarter | 10 | % | N/M | (17 | %) | 19 | % | N/M | 14 | % | |||||||||||||||
Diluted EPS | $1.44 | $0.00 | ($0.14) | ($0.04) | $0.04 | $1.31 | |||||||||||||||||||
Change from prior year | 40 | % | N/M | (8 | %) | — | % | N/M | 46 | % | |||||||||||||||
Change from prior quarter | 10 | % | N/M | (27 | %) | 20 | % | N/M | 15 | % | |||||||||||||||
Diluted shares used | 1,714 | 1,714 | 1,714 | 1,714 | 1,714 | 1,714 | |||||||||||||||||||
Q2 - FISCAL 2014 | |||||||||||||||||||||||||
Revenues | $4,243 | $2,071 | $53 | $6,367 | $— | $— | $— | $— | $6,367 | ||||||||||||||||
Operating income (loss) | 2,337 | (6) | (251) | (90) | — | 1,990 | |||||||||||||||||||
EBT | $740 | $1,834 | $78 | 2,652 | (39) | (251) | (90) | — | 2,272 | ||||||||||||||||
Net income (loss) | 2,255 | (17) | (198) | (81) | — | 1,959 | |||||||||||||||||||
Diluted EPS | $1.31 | ($0.01) | ($0.11) | ($0.05) | $— | $1.14 | |||||||||||||||||||
Diluted shares used | 1,719 | 1,719 | 1,719 | 1,719 | 1,719 | 1,719 | |||||||||||||||||||
Q3 - FISCAL 2013 | |||||||||||||||||||||||||
Revenues | $4,222 | $1,867 | $154 | $6,243 | $— | $— | $— | $— | $6,243 | ||||||||||||||||
Operating income (loss) | 2,035 | (7) | (280) | (71) | — | 1,677 | |||||||||||||||||||
EBT | $738 | $1,633 | ($161) | 2,210 | 51 | (280) | (71) | — | 1,910 | ||||||||||||||||
Net income (loss) | 1,823 | 43 | (222) | (64) | — | 1,580 | |||||||||||||||||||
Diluted EPS | $1.03 | $0.02 | ($0.13) | ($0.04) | $— | $0.90 | |||||||||||||||||||
Diluted shares used | 1,765 | 1,765 | 1,765 | 1,765 | 1,765 | 1,765 | |||||||||||||||||||
Q4 - FISCAL 2013 | |||||||||||||||||||||||||
Revenues | $4,457 | $1,874 | $149 | $6,480 | $— | $— | $— | $— | $6,480 | ||||||||||||||||
Operating income (loss) | 1,940 | (11) | (274) | (67) | — | 1,588 | |||||||||||||||||||
EBT | $702 | $1,622 | ($151) | 2,173 | (11) | (274) | (67) | — | 1,821 | ||||||||||||||||
Net income (loss) | 1,818 | (24) | (226) | (67) | — | 1,501 | |||||||||||||||||||
Diluted EPS | $1.05 | ($0.01) | ($0.13) | ($0.04) | $— | $0.86 | |||||||||||||||||||
Diluted shares used | 1,738 | 1,738 | 1,738 | 1,738 | 1,738 | 1,738 |
SEGMENTS | QCT | QTL | Non-GAAP Reconciling Items (1) (2) | Non-GAAP (3) | QSI (3) | Share-Based Compensation (3) | Acquisition-Related Items (3) | Tax Items | GAAP | ||||||||||||||||
9 MONTHS - FISCAL 2014 | |||||||||||||||||||||||||
Revenues | $13,816 | $5,774 | $205 | $19,795 | $— | $— | $— | $— | $19,795 | ||||||||||||||||
Change from prior year | 13 | % | 2 | % | (54 | %) | 8 | % | 8 | % | |||||||||||||||
Operating income (loss) | $6,611 | ($16) | ($806) | ($231) | $— | $5,558 | |||||||||||||||||||
Change from prior year | (2 | %) | 20 | % | 3 | % | (3 | %) | (1 | %) | |||||||||||||||
EBT | $2,762 | $5,054 | ($217) | $7,599 | ($36) | ($806) | ($231) | $— | $6,526 | ||||||||||||||||
Change from prior year | 11 | % | 2 | % | N/M | 3 | % | N/M | 3 | % | (3 | %) | 2 | % | |||||||||||
EBT as % of revenues | 20 | % | 88 | % | N/M | 38 | % | 33 | % | ||||||||||||||||
Discontinued operations, net of tax (4) | $430 | $— | $— | $— | $— | $430 | |||||||||||||||||||
Net income (loss) | $6,888 | ($13) | ($655) | ($213) | $66 | $6,073 | |||||||||||||||||||
Change from prior year | 13 | % | N/M | 1 | % | — | % | 3 | % | 13 | % | ||||||||||||||
Diluted EPS | $4.01 | ($0.01) | ($0.38) | ($0.12) | $0.04 | $3.53 | |||||||||||||||||||
Change from prior year | 16 | % | N/M | — | % | — | % | — | % | 16 | % | ||||||||||||||
Diluted shares used | 1,718 | 1,718 | 1,718 | 1,718 | 1,718 | 1,718 | |||||||||||||||||||
9 MONTHS - FISCAL 2013 | |||||||||||||||||||||||||
Revenues | $12,258 | $5,680 | $447 | $18,385 | $— | $— | $— | $— | $18,385 | ||||||||||||||||
Operating income (loss) | 6,716 | (20) | (829) | (225) | — | 5,642 | |||||||||||||||||||
EBT | $2,487 | $4,968 | ($95) | 7,360 | 66 | (829) | (225) | — | 6,372 | ||||||||||||||||
Net income (loss) | 6,094 | 67 | (661) | (212) | 64 | 5,352 | |||||||||||||||||||
Diluted EPS | $3.46 | $0.04 | ($0.38) | ($0.12) | $0.04 | $3.04 | |||||||||||||||||||
Diluted shares used | 1,760 | 1,760 | 1,760 | 1,760 | 1,760 | 1,760 | |||||||||||||||||||
12 MONTHS - FISCAL 2013 | |||||||||||||||||||||||||
Revenues | $16,715 | $7,554 | $597 | $24,866 | $— | $— | $— | $— | $24,866 | ||||||||||||||||
Operating income (loss) | 8,657 | (31) | (1,103) | (293) | — | 7,230 | |||||||||||||||||||
EBT | $3,189 | $6,590 | ($245) | 9,534 | 56 | (1,103) | (293) | — | 8,194 | ||||||||||||||||
Net income (loss) | 7,911 | 43 | (886) | (279) | 64 | 6,853 | |||||||||||||||||||
Diluted EPS | $4.51 | $0.02 | ($0.51) | ($0.16) | $0.04 | $3.91 | |||||||||||||||||||
Diluted shares used | 1,754 | 1,754 | 1,754 | 1,754 | 1,754 | 1,754 |
(1) | Non-GAAP reconciling items related to revenues consisted primarily of nonreportable segment revenues less intersegment eliminations. Non-GAAP reconciling items related to earnings before taxes consisted primarily of certain research and development expenses, selling, general and administrative expenses, other expenses or income and certain investment income that are not allocated to the segments for management reporting purposes; nonreportable segment results; and the elimination of intersegment profit. |
(2) | During the first quarter of fiscal 2014, as a result of the reassessment of management reporting, the former Qualcomm Wireless & Internet (QWI) segment was eliminated. Revenues and operating results for the divisions that comprised the QWI segment are included in Non-GAAP reconciling items. Prior period information has been adjusted to conform to the current presentation. |
(3) | At fiscal year end, the sum of the quarterly tax provision (benefit) for each column equals the annual tax provision (benefit) for each column computed in accordance with GAAP. In interim quarters, the sum of these provisions (benefits) may not equal the total GAAP tax provision, and this difference is allocated to tax provisions (benefits) among the columns. |
(4) | During the first quarter of fiscal 2014, a gain of $665 million was recorded associated with the sale of substantially all of the operations of our Omnitracs division. |
• | QSI is excluded because the Company expects to exit its strategic investments at various times, and the effects of fluctuations in the value of such investments and realized gains or losses are viewed by management as unrelated to the Company’s operational performance. |
• | Share-based compensation expense primarily relates to restricted stock units. Non-cash share-based compensation is excluded because management views such expenses as unrelated to the operating activities of the Company’s ongoing core businesses. |
• | Acquisition-related items include amortization and impairment of certain intangible assets, recognition of the step-up of inventories to fair value and the related tax effects of these items starting with acquisitions completed in the third quarter of fiscal 2011, as well as any tax effects from restructuring the ownership of such acquired assets. Additionally, the Company excludes expenses related to the termination of contracts that limit the use of the acquired intellectual property. These acquisition-related items are excluded and are not allocated to the Company’s segments because management views such expenses as unrelated to the operating activities of the Company’s ongoing core businesses. In addition, these charges are impacted by the size and timing of acquisitions, potentially obscuring period-to-period comparisons of the Company’s operating businesses. |
• | Certain tax items that are unrelated to the fiscal year in which they are recorded are excluded in order to provide a clearer understanding of the Company’s ongoing Non-GAAP tax rate and after tax earnings. |
Three Months Ended June 29, 2014 | |||||||||||||||||||||||||||||||
Non-GAAP Results | QSI | Share-Based Compensation | Acquisition-Related Items | Tax Items (a) | GAAP Results | ||||||||||||||||||||||||||
($ in millions, except per share data) | |||||||||||||||||||||||||||||||
Cost of equipment and services revenues | $ | 2,666 | $ | — | $ | 12 | $ | 62 | $ | — | $ | 2,740 | |||||||||||||||||||
R&D expenses | 1,251 | 1 | 174 | 3 | — | 1,429 | |||||||||||||||||||||||||
SG&A expenses | 484 | 4 | 88 | 6 | — | 582 | |||||||||||||||||||||||||
Other income, net | 20 | (b) | — | — | — | — | 20 | ||||||||||||||||||||||||
Operating income (loss) | 2,425 | (5 | ) | (274 | ) | (71 | ) | — | 2,075 | ||||||||||||||||||||||
Investment income, net | $ | 418 | (c) | $ | 4 | (d) | $ | — | $ | — | $ | — | $ | 422 | |||||||||||||||||
Tax rate | 13 | % | — | % | 15 | % | 7 | % | N/A | 10 | % | ||||||||||||||||||||
Net income (loss) | $ | 2,470 | $ | — | $ | (232 | ) | $ | (66 | ) | $ | 66 | $ | 2,238 | |||||||||||||||||
Diluted EPS | $ | 1.44 | $ | 0.00 | $ | (0.14 | ) | $ | (0.04 | ) | $ | 0.04 | $ | 1.31 |
(a) | Included a $66 million tax benefit related to an agreement reached with the Internal Revenue Service related to transfer pricing on our fiscal 2013 tax return. |
(b) | Included $184 million of other income from the reversal of accruals related to our litigation with ParkerVision, partially offset by $164 million of impairment charges on goodwill and long-lived assets related to our QMT division. |
(c) | Included $288 million in net realized gains on investments, $139 million in interest and dividend income and $4 million in gains on deconsolidation of subsidiaries, partially offset by $8 million in other-than-temporary losses on investments and $5 million in net losses on derivatives. |
(d) | Included $10 million in net realized gains on investments, partially offset by $3 million in other-than-temporary losses on investments, $2 million in equity in losses of investees and $1 million in net losses on derivatives. |
Nine Months Ended June 29, 2014 | |||||||||||||||||||||||||||||||
Non-GAAP Results | QSI | Share-Based Compensation | Acquisition-Related Items | Tax Items (a) | GAAP Results | ||||||||||||||||||||||||||
($ in millions, except per share data) | |||||||||||||||||||||||||||||||
Cost of equipment and services revenues | $ | 7,706 | $ | — | $ | 37 | $ | 186 | $ | — | $ | 7,929 | |||||||||||||||||||
R&D expenses | 3,573 | 4 | 510 | 26 | — | 4,113 | |||||||||||||||||||||||||
SG&A expenses | 1,455 | 12 | 259 | 19 | — | 1,745 | |||||||||||||||||||||||||
Other expenses, net | 450 | (e) | — | — | — | — | 450 | ||||||||||||||||||||||||
Operating income (loss) | 6,611 | (16 | ) | (806 | ) | (231 | ) | — | 5,558 | ||||||||||||||||||||||
Investment income, net | $ | 988 | (f) | $ | (20 | ) | (g) | $ | — | $ | — | $ | — | $ | 968 | ||||||||||||||||
Tax rate | 15 | % | 56 | % | 19 | % | 8 | % | N/A | 14 | % | ||||||||||||||||||||
Net income (loss) | $ | 6,888 | $ | (13 | ) | $ | (655 | ) | $ | (213 | ) | $ | 66 | $ | 6,073 | ||||||||||||||||
Diluted EPS | $ | 4.01 | $ | (0.01 | ) | $ | (0.38 | ) | $ | (0.12 | ) | $ | 0.04 | $ | 3.53 |
(e) | Included $607 million of impairment charges on long-lived assets and goodwill related to our QMT division and a $16 million goodwill impairment charge related to our former QRS (Qualcomm Retail Solutions) division, partially offset by the reversal of the $173 million accrual recorded in fiscal 2013 related to our litigation with ParkerVision. |
(f) | Included $650 million in net realized gains on investments, $459 million in interest and dividend income, $5 million in gains on deconsolidation of subsidiaries and $1 million in net gains on derivatives, partially offset by $124 million in other-than-temporary losses on investments and $3 million in interest expense. |
(g) | Included $46 million in other-than-temporary losses on investments, $7 million in equity in losses of investees, $2 million in net losses on derivatives and $1 million in interest expense, partially offset by $35 million in net realized gains on investments and $1 million in interest and dividend income. |
Three Months Ended June 29, 2014 | ||||||||||||||||||||||||||||||
($ in millions) | Non-GAAP Results | QSI | Share-Based Compensation | Acquisition-Related Items | Tax Items (b) | GAAP Results | ||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | $ | 2,843 | $ | (1 | ) | $ | (274 | ) | $ | (71 | ) | $ | — | $ | 2,497 | |||||||||||||||
Income tax (expense) benefit | (373 | ) | — | 42 | 5 | 66 | (260 | ) | ||||||||||||||||||||||
Income (loss) from continuing operations | $ | 2,470 | $ | (1 | ) | $ | (232 | ) | $ | (66 | ) | $ | 66 | $ | 2,237 | |||||||||||||||
Tax rate | 13 | % | — | % | 15 | % | 7 | % | N/A | 10 | % |
Nine Months Ended June 29, 2014 | ||||||||||||||||||||||||||||||
($ in millions) | Non-GAAP Results | QSI | Share-Based Compensation | Acquisition-Related Items | Tax Items (b) | GAAP Results | ||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | $ | 7,599 | $ | (36 | ) | $ | (806 | ) | $ | (231 | ) | $ | — | $ | 6,526 | |||||||||||||||
Income tax (expense) benefit | (1,141 | ) | 20 | 151 | 18 | 66 | (886 | ) | ||||||||||||||||||||||
Income (loss) from continuing operations | $ | 6,458 | $ | (16 | ) | $ | (655 | ) | $ | (213 | ) | $ | 66 | $ | 5,640 | |||||||||||||||
Tax rate | 15 | % | 56 | % | 19 | % | 8 | % | N/A | 14 | % |
(a) | At fiscal year end, the sum of the quarterly tax provision (benefit) for each column equals the annual tax provision (benefit) for each column computed in accordance with GAAP. In interim quarters, the sum of these provisions (benefits) may not equal the total GAAP tax provision, and this difference is allocated to tax provisions (benefits) among the columns. |
(b) | During the third quarter of fiscal 2014, we recorded a $66 million tax benefit as a result of an agreement reached with the Internal Revenue Service related to transfer pricing on our fiscal 2013 tax return. |
June 29, 2014 | September 29, 2013 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 7,944 | $ | 6,142 | |||
Marketable securities | 10,209 | 8,824 | |||||
Accounts receivable, net | 2,084 | 2,142 | |||||
Inventories | 1,185 | 1,302 | |||||
Deferred tax assets | 451 | 573 | |||||
Other current assets | 535 | 572 | |||||
Total current assets | 22,408 | 19,555 | |||||
Marketable securities | 14,563 | 14,440 | |||||
Deferred tax assets | 1,195 | 1,059 | |||||
Property, plant and equipment, net | 2,555 | 2,995 | |||||
Goodwill | 4,183 | 3,976 | |||||
Other intangible assets, net | 2,608 | 2,553 | |||||
Other assets | 843 | 938 | |||||
Total assets | $ | 48,355 | $ | 45,516 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Trade accounts payable | $ | 1,900 | $ | 1,554 | |||
Payroll and other benefits related liabilities | 740 | 839 | |||||
Unearned revenues | 705 | 501 | |||||
Other current liabilities | 2,676 | 2,319 | |||||
Total current liabilities | 6,021 | 5,213 | |||||
Unearned revenues | 3,168 | 3,666 | |||||
Other liabilities | 379 | 550 | |||||
Total liabilities | 9,568 | 9,429 | |||||
Stockholders’ equity: | |||||||
Qualcomm stockholders’ equity: | |||||||
Preferred stock, $0.0001 par value; 8 shares authorized; none outstanding | — | — | |||||
Common stock and paid-in capital, $0.0001 par value; 6,000 shares authorized; 1,678 and 1,685 shares issued and outstanding, respectively | 8,346 | 9,874 | |||||
Retained earnings | 29,618 | 25,461 | |||||
Accumulated other comprehensive income | 825 | 753 | |||||
Total Qualcomm stockholders’ equity | 38,789 | 36,088 | |||||
Noncontrolling interests | (2 | ) | (1 | ) | |||
Total stockholders’ equity | 38,787 | 36,087 | |||||
Total liabilities and stockholders’ equity | $ | 48,355 | $ | 45,516 |
Three Months Ended | Nine Months Ended | ||||||||||||||
June 29, 2014 | June 30, 2013 | June 29, 2014 | June 30, 2013 | ||||||||||||
Revenues: | |||||||||||||||
Equipment and services | $ | 4,922 | $ | 4,286 | $ | 13,803 | $ | 12,474 | |||||||
Licensing | 1,884 | 1,957 | 5,992 | 5,911 | |||||||||||
Total revenues | 6,806 | 6,243 | 19,795 | 18,385 | |||||||||||
Costs and expenses: | |||||||||||||||
Cost of equipment and services revenues | 2,740 | 2,497 | 7,929 | 7,106 | |||||||||||
Research and development | 1,429 | 1,298 | 4,113 | 3,618 | |||||||||||
Selling, general and administrative | 582 | 613 | 1,745 | 1,861 | |||||||||||
Other | (20 | ) | 158 | 450 | 158 | ||||||||||
Total costs and expenses | 4,731 | 4,566 | 14,237 | 12,743 | |||||||||||
Operating income | 2,075 | 1,677 | 5,558 | 5,642 | |||||||||||
Investment income, net | 422 | 233 | 968 | 730 | |||||||||||
Income from continuing operations before income taxes | 2,497 | 1,910 | 6,526 | 6,372 | |||||||||||
Income tax expense | (260 | ) | (332 | ) | (886 | ) | (1,028 | ) | |||||||
Income from continuing operations | 2,237 | 1,578 | 5,640 | 5,344 | |||||||||||
Discontinued operations, net of income taxes | — | — | 430 | — | |||||||||||
Net income | 2,237 | 1,578 | 6,070 | 5,344 | |||||||||||
Net loss attributable to noncontrolling interests | 1 | 2 | 3 | 8 | |||||||||||
Net income attributable to Qualcomm | $ | 2,238 | $ | 1,580 | $ | 6,073 | $ | 5,352 | |||||||
Basic earnings per share attributable to Qualcomm: | |||||||||||||||
Continuing operations | $ | 1.33 | $ | 0.91 | $ | 3.35 | $ | 3.11 | |||||||
Discontinued operations | — | — | 0.25 | — | |||||||||||
Net income | $ | 1.33 | $ | 0.91 | $ | 3.60 | $ | 3.11 | |||||||
Diluted earnings per share attributable to Qualcomm: | |||||||||||||||
Continuing operations | $ | 1.31 | $ | 0.90 | $ | 3.28 | $ | 3.04 | |||||||
Discontinued operations | — | — | 0.25 | — | |||||||||||
Net income | $ | 1.31 | $ | 0.90 | $ | 3.53 | $ | 3.04 | |||||||
Shares used in per share calculations: | |||||||||||||||
Basic | 1,683 | 1,727 | 1,686 | 1,720 | |||||||||||
Diluted | 1,714 | 1,765 | 1,718 | 1,760 | |||||||||||
Dividends per share announced | $ | 0.42 | $ | 0.35 | $ | 1.12 | $ | 0.85 |
Three Months Ended | Nine Months Ended | ||||||||||||||
June 29, 2014 | June 30, 2013 | June 29, 2014 | June 30, 2013 | ||||||||||||
Operating Activities: | |||||||||||||||
Net income | $ | 2,237 | $ | 1,578 | $ | 6,070 | $ | 5,344 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
Depreciation and amortization expense | 292 | 255 | 853 | 744 | |||||||||||
Gain on sale of discontinued operations | — | — | (665 | ) | — | ||||||||||
Revenues related to non-monetary exchanges | (31 | ) | (31 | ) | (93 | ) | (93 | ) | |||||||
Long-lived asset and goodwill impairment charges | 164 | 163 | 642 | 191 | |||||||||||
Income tax provision (less than) in excess of income tax payments | (24 | ) | 59 | 244 | 220 | ||||||||||
Non-cash portion of share-based compensation expense | 274 | 281 | 806 | 831 | |||||||||||
Incremental tax benefits from share-based compensation | (70 | ) | (75 | ) | (239 | ) | (178 | ) | |||||||
Net realized gains on marketable securities and other investments | (298 | ) | (60 | ) | (685 | ) | (239 | ) | |||||||
Impairment losses on marketable securities and other investments | 11 | 27 | 170 | 49 | |||||||||||
Other items, net | 46 | 5 | 88 | 34 | |||||||||||
Changes in assets and liabilities: | |||||||||||||||
Accounts receivable, net | 139 | (21 | ) | 43 | (445 | ) | |||||||||
Inventories | (37 | ) | (245 | ) | 116 | (699 | ) | ||||||||
Other assets | 9 | 90 | 136 | (111 | ) | ||||||||||
Trade accounts payable | 286 | 221 | 321 | 598 | |||||||||||
Payroll, benefits and other liabilities | (235 | ) | (151 | ) | (337 | ) | 52 | ||||||||
Unearned revenues | (90 | ) | (19 | ) | (202 | ) | (30 | ) | |||||||
Net cash provided by operating activities | 2,673 | 2,077 | 7,268 | 6,268 | |||||||||||
Investing Activities: | |||||||||||||||
Capital expenditures | (158 | ) | (314 | ) | (955 | ) | (808 | ) | |||||||
Purchases of available-for-sale securities | (2,488 | ) | (4,663 | ) | (10,315 | ) | (12,112 | ) | |||||||
Proceeds from sales and maturities of available-for-sale securities | 4,060 | 2,805 | 9,744 | 7,337 | |||||||||||
Purchases of trading securities | (1,054 | ) | (862 | ) | (2,868 | ) | (2,658 | ) | |||||||
Proceeds from sales and maturities of trading securities | 826 | 767 | 2,619 | 2,365 | |||||||||||
Purchases of other marketable securities | (220 | ) | — | (220 | ) | — | |||||||||
Proceeds from sale of discontinued operations, net of cash sold | — | — | 788 | — | |||||||||||
Acquisitions and other investments, net of cash acquired | (100 | ) | (47 | ) | (447 | ) | (179 | ) | |||||||
Other items, net | 40 | (2 | ) | 102 | 68 | ||||||||||
Net cash provided (used) by investing activities | 906 | (2,316 | ) | (1,552 | ) | (5,987 | ) | ||||||||
Financing Activities: | |||||||||||||||
Borrowing under loans and debentures | — | 534 | — | 534 | |||||||||||
Repayment of loans and debentures | — | (492 | ) | — | (492 | ) | |||||||||
Proceeds from issuance of common stock | 194 | 217 | 1,147 | 964 | |||||||||||
Incremental tax benefits from share-based compensation | 70 | 75 | 239 | 178 | |||||||||||
Repurchases and retirements of common stock | (1,350 | ) | (1,039 | ) | (3,354 | ) | (1,289 | ) | |||||||
Dividends paid | (706 | ) | (604 | ) | (1,884 | ) | (1,463 | ) | |||||||
Other items, net | (184 | ) | 37 | (65 | ) | 35 | |||||||||
Net cash used by financing activities | (1,976 | ) | (1,272 | ) | (3,917 | ) | (1,533 | ) | |||||||
Changes in cash and cash equivalents held for sale | — | (46 | ) | — | (15 | ) | |||||||||
Effect of exchange rate changes on cash and cash equivalents | 4 | (3 | ) | 3 | (7 | ) | |||||||||
Net increase (decrease) in cash and cash equivalents | 1,607 | (1,560 | ) | 1,802 | (1,274 | ) | |||||||||
Cash and cash equivalents at beginning of period | 6,337 | 4,093 | 6,142 | 3,807 | |||||||||||
Cash and cash equivalents at end of period | $ | 7,944 | $ | 2,533 | $ | 7,944 | $ | 2,533 |