• | Revenues: 1 $6.69 billion, up 3 percent year-over-year (y-o-y) and down 2 percent sequentially. |
• | Operating income: 1 $1.99 billion, up 25 percent y-o-y and down 4 percent sequentially. |
• | Net income: 2 $1.89 billion, up 26 percent y-o-y and down 15 percent sequentially. |
• | Diluted earnings per share: 2 $1.11, up 29 percent y-o-y and down 15 percent sequentially. |
• | Effective tax rate: 1 16 percent. |
• | Operating cash flow: $1.62 billion, down 36 percent y-o-y; 24 percent of revenues. |
• | Return of capital to stockholders: $1.90 billion, including $1.20 billion through repurchases of 15.6 million shares of common stock and $702 million, or $0.42 per share, of cash dividends paid. |
• | Revenues: $26.49 billion, up 7 percent y-o-y. |
• | Operating income: $7.55 billion, up 4 percent y-o-y. |
• | Net income: $7.97 billion, up 16 percent y-o-y. |
• | Diluted earnings per share: $4.65, up 19 percent y-o-y. |
• | Effective tax rate: 14 percent. |
• | Operating cash flow: $8.89 billion, up 1 percent y-o-y; 34 percent of revenues. |
• | Return of capital to stockholders: $7.13 billion, including $4.55 billion through repurchases of 60.3 million shares of common stock and $2.59 billion, or $1.54 per share, of cash dividends paid. |
• | Revenues: $6.69 billion, up 3 percent y-o-y and down 2 percent sequentially. |
• | Operating income: $2.32 billion, up 20 percent y-o-y and down 4 percent sequentially. |
• | Net income: $2.14 billion, up 18 percent y-o-y and down 13 percent sequentially. |
• | Diluted earnings per share: $1.26, up 20 percent y-o-y and down 13 percent sequentially. |
• | Effective tax rate: 16 percent. |
• | Revenues: $26.49 billion, up 7 percent y-o-y. |
• | Operating income: $8.93 billion, up 3 percent y-o-y. |
• | Net income: $9.03 billion, up 14 percent y-o-y. |
• | Diluted earnings per share: $5.27, up 17 percent y-o-y. |
• | Effective tax rate: 15 percent. |
• | The fiscal 2014 results included: |
• | $665 million gain, or $0.25 per share, in discontinued operations associated with the sale of substantially all of the operations of our Omnitracs division in the first quarter of fiscal 2014; |
• | $444 million charge, or $0.20 per share, that resulted from an impairment on long-lived assets related to our QMT (Qualcomm MEMS Technologies) division in the first quarter of fiscal 2014; |
• | $208 million of income, or $0.12 per share, due to the reversal of expense accruals related to our litigation with ParkerVision in the third quarter of fiscal 2014; 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 division in the third quarter of fiscal 2014. |
• | The 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 in the third quarter of fiscal 2013; and |
• | $173 million charge, or $0.10 per share, related to the verdict in our litigation with ParkerVision in the fourth quarter of fiscal 2013. |
• | MSMTM chip shipments: 236 million units, up 24 percent y-o-y and 5 percent sequentially. |
• | June quarter total reported device sales: approximately $57.4 billion, down 5 percent y-o-y and 1 percent sequentially. |
• | Includes an estimated 256 to 260 million 3G/4G devices at an estimated average selling price of approximately $220 to $226 per unit. |
• | MSM chip shipments: 861 million units, up 20 percent y-o-y. |
• | Total reported device sales (September quarter through June quarter): approximately $243.6 billion, up 5 percent y-o-y. |
• | Includes an estimated 1,077 to 1,093 million 3G/4G devices at an estimated average selling price of approximately $222 to $228 per unit. |
($ in millions) | Non-GAAP | QSI | Share-Based Compensation | Acquisition-Related Items | GAAP | ||||||||||||||
Fourth quarter fiscal 2014 | $ | 1,197 | $ | 1 | $ | 163 | $ | 3 | $ | 1,364 | |||||||||
As % of revenues | 18 | % | 20 | % | |||||||||||||||
Fourth quarter fiscal 2013 | $ | 1,182 | $ | 1 | $ | 164 | $ | 1 | $ | 1,348 | |||||||||
As % of revenues | 18 | % | 21 | % | |||||||||||||||
Year-over-year change ($) | 1 | % | N/M | (1 | %) | N/M | 1 | % |
($ in millions) | Non-GAAP | QSI | Share-Based Compensation | Acquisition-Related Items | GAAP | ||||||||||||||
Fourth quarter fiscal 2014 | $ | 458 | $ | 2 | $ | 78 | $ | 7 | $ | 545 | |||||||||
As % of revenues | 7 | % | 8 | % | |||||||||||||||
Fourth quarter fiscal 2013 | $ | 547 | $ | 10 | $ | 94 | $ | 6 | $ | 657 | |||||||||
As % of revenues | 8 | % | 10 | % | |||||||||||||||
Year-over-year change ($) | (16 | %) | (80 | %) | (17 | %) | 17 | % | (17 | %) |
FIRST FISCAL QUARTER | |||||||
Q1 FY14 Results | Current Guidance Q1 FY15 Estimates | ||||||
Revenues | $6.62 | B | $6.6B - $7.2B | ||||
Year-over-year change | even - increase 9% | ||||||
Non-GAAP diluted earnings per share (EPS) | $1.26 | $1.18 - $1.30 | |||||
Year-over-year change | decrease 6% - increase 3% | ||||||
Diluted EPS attributable to QSI | $0.00 | $0.00 | |||||
Diluted EPS attributable to share-based compensation | ($0.13 | ) | ($0.14 | ) | |||
Diluted EPS attributable to acquisition-related items | ($0.04 | ) | ($0.04 | ) | |||
GAAP diluted EPS | $1.09 | $1.00 - $1.12 | |||||
Year-over-year change | decrease 8% - increase 3% | ||||||
Metrics | |||||||
MSM chip shipments | 213M | 250M - 270M | |||||
Year-over-year change | increase 17% - 27% | ||||||
Total reported device sales* (1) | approx. $61.6B | approx. $53.0B - $59.0B (3) | |||||
Year-over-year change | decrease 4% - 14% | ||||||
*Est. sales in September quarter, reported in December quarter |
FISCAL YEAR | |||||||
FY 2014 Results | Current Guidance FY 2015 Estimates (2) | ||||||
Revenues | $26.49 | B | $26.8B - $28.8B | ||||
Year-over-year change | increase 1% - 9% | ||||||
Non-GAAP operating income | $8.93 | B | $9.2B - $10.0B | ||||
Year-over-year change | increase 3% - 12% | ||||||
Operating (loss) income attributable to QSI | ($0.02B) | $0.0B | |||||
Operating loss attributable to share-based compensation | ($1.06B) | ($1.1B) | |||||
Operating loss attributable to acquisition-related items | ($0.31B) | ($0.3B) | |||||
GAAP operating income | $7.55 | B | $7.8B - $8.6B | ||||
Year-over-year change | increase 3% - 14% | ||||||
Non-GAAP diluted EPS | $5.27 | $5.05 - $5.35 | |||||
Year-over-year change | decrease 4% - increase 2% | ||||||
Diluted EPS attributable to QSI | $0.01 | ($0.01 | ) | ||||
Diluted EPS attributable to share-based compensation | ($0.50 | ) | ($0.55 | ) | |||
Diluted EPS attributable to acquisition-related items | ($0.17 | ) | ($0.16 | ) | |||
Diluted EPS attributable to tax items | $0.04 | N/A | |||||
GAAP diluted EPS | $4.65 | $4.33 - $4.63 | |||||
Year-over-year change | decrease 7% - even | ||||||
Metrics | |||||||
Total reported device sales* (1) | approx. $243.6B | approx. $240.0B - $270.0B (3) | |||||
Year-over-year change | decrease 1% - increase 11% | ||||||
*Est. sales in Sept. to June quarters, reported in Dec. to Sept. quarters |
CALENDAR YEAR Device Estimates (1) | |||
Prior Guidance Calendar 2014 Estimates | Current Guidance Calendar 2014 Estimates | ||
Est. 3G/4G device shipments | |||
March quarter | approx. 250M - 254M | approx. 250M - 254M | |
June quarter | not provided | approx. 256M - 260M | |
September quarter | not provided | not provided | |
December quarter | not provided | not provided | |
Est. calendar year range (approx.) | 1,040M - 1,130M | 1,040M - 1,130M (4) |
(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) | Fiscal 2015 guidance includes an estimate of the benefit related to stock repurchases that we plan to complete over the course of fiscal 2015 under our current stock repurchase program. |
(3) | Our guidance range for the first quarter of fiscal 2015 and fiscal 2015 total reported device sales reflects estimated 3G/4G total reported device sales that we currently expect to be reported to us, which does not include sales that we believe may not be reported to us or may be in dispute and, for fiscal 2015, includes an estimate for some prior period activity that may be reported to us during fiscal 2015. |
(4) | We expect calendar year 2014 global 3G/4G device shipments to be approximately 1.3 billion. 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. |
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 | ||||||||||||||||
Q4 - FISCAL 2014 | |||||||||||||||||||||||||
Revenues | $4,849 | $1,795 | $48 | $6,692 | $— | $— | $— | $— | $6,692 | ||||||||||||||||
Change from prior year | 9 | % | (4 | %) | (68 | %) | 3 | % | 3 | % | |||||||||||||||
Change from prior quarter | (2 | %) | — | % | 4 | % | (2 | %) | (2 | %) | |||||||||||||||
Operating income (loss) | $2,323 | ($3) | ($252) | ($76) | $— | $1,992 | |||||||||||||||||||
Change from prior year | 20 | % | 73 | % | 8 | % | (13 | %) | 25 | % | |||||||||||||||
Change from prior quarter | (4 | %) | 40 | % | 8 | % | (7 | %) | (4 | %) | |||||||||||||||
EBT | $1,045 | $1,536 | ($30) | $2,551 | $29 | ($252) | ($76) | $— | $2,252 | ||||||||||||||||
Change from prior year | 49 | % | (5 | %) | 80 | % | 17 | % | N/M | 8 | % | (13 | %) | 24 | % | ||||||||||
Change from prior quarter | (6 | %) | (1 | %) | N/M | (10 | %) | N/M | 8 | % | (7 | %) | (10 | %) | |||||||||||
EBT as % of revenues | 22 | % | 86 | % | N/M | 38 | % | 34 | % | ||||||||||||||||
Net income (loss) | $2,143 | $28 | ($199) | ($78) | $— | $1,894 | |||||||||||||||||||
Change from prior year | 18 | % | N/M | 12 | % | (16 | %) | N/A | 26 | % | |||||||||||||||
Change from prior quarter | (13 | %) | N/M | 14 | % | (18 | %) | N/M | (15 | %) | |||||||||||||||
Diluted EPS | $1.26 | $0.02 | ($0.12) | ($0.05) | $— | $1.11 | |||||||||||||||||||
Change from prior year | 20 | % | N/M | 8 | % | (25 | %) | N/A | 29 | % | |||||||||||||||
Change from prior quarter | (13 | %) | N/M | 14 | % | (25 | %) | N/M | (15 | %) | |||||||||||||||
Diluted shares used | 1,701 | 1,701 | 1,701 | 1,701 | 1,701 | 1,701 | |||||||||||||||||||
Q3 - FISCAL 2014 | |||||||||||||||||||||||||
Revenues | $4,957 | $1,803 | $46 | $6,806 | $— | $— | $— | $— | $6,806 | ||||||||||||||||
Operating income (loss) | 2,425 | (5) | (274) | (71) | — | 2,075 | |||||||||||||||||||
EBT | $1,116 | $1,550 | $177 | 2,843 | (1) | (274) | (71) | — | 2,497 | ||||||||||||||||
Net income (loss) | 2,470 | — | (232) | (66) | 66 | 2,238 | |||||||||||||||||||
Diluted EPS | $1.44 | $0.00 | ($0.14) | ($0.04) | $0.04 | $1.31 | |||||||||||||||||||
Diluted shares used | 1,714 | 1,714 | 1,714 | 1,714 | 1,714 | 1,714 | |||||||||||||||||||
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 | |||||||||||||||||||
Q1 - FISCAL 2014 | |||||||||||||||||||||||||
Revenues | $4,616 | $1,900 | $106 | $6,622 | $— | $— | $— | $— | $6,622 | ||||||||||||||||
Operating income (loss) | 1,848 | (5) | (281) | (69) | — | 1,493 | |||||||||||||||||||
EBT | $906 | $1,670 | ($473) | 2,103 | 4 | (281) | (69) | — | 1,757 | ||||||||||||||||
Discontinued operations, net of tax (4) | 430 | — | — | — | — | 430 | |||||||||||||||||||
Net income (loss) | 2,163 | 4 | (226) | (66) | — | 1,875 | |||||||||||||||||||
Diluted EPS | $1.26 | $0.00 | ($0.13) | ($0.04) | $— | $1.09 | |||||||||||||||||||
Diluted shares used | 1,722 | 1,722 | 1,722 | 1,722 | 1,722 | 1,722 |
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 | ||||||||||||||||
12 MONTHS - FISCAL 2014 | |||||||||||||||||||||||||
Revenues | $18,665 | $7,569 | $253 | $26,487 | $— | $— | $— | $— | $26,487 | ||||||||||||||||
Change from prior year | 12 | % | — | % | (58 | %) | 7 | % | 7 | % | |||||||||||||||
Operating income (loss) | $8,933 | ($18) | ($1,059) | ($306) | $— | $7,550 | |||||||||||||||||||
Change from prior year | 3 | % | 42 | % | 4 | % | (4 | %) | 4 | % | |||||||||||||||
EBT | $3,807 | $6,590 | ($247) | $10,150 | ($7) | ($1,059) | ($306) | $— | $8,778 | ||||||||||||||||
Change from prior year | 19 | % | — | % | (1 | %) | 6 | % | N/M | 4 | % | (4 | %) | 7 | % | ||||||||||
EBT as % of revenues | 20 | % | 87 | % | N/M | 38 | % | 33 | % | ||||||||||||||||
Discontinued operations, net of tax (4) | $430 | $— | $— | $— | $— | $430 | |||||||||||||||||||
Net income (loss) | $9,032 | $15 | ($856) | ($290) | $66 | $7,967 | |||||||||||||||||||
Change from prior year | 14 | % | (65 | %) | 3 | % | (4 | %) | 3 | % | 16 | % | |||||||||||||
Diluted EPS | $5.27 | $0.01 | ($0.50) | ($0.17) | $0.04 | $4.65 | |||||||||||||||||||
Change from prior year | 17 | % | (50 | %) | 2 | % | (6 | %) | — | % | 19 | % | |||||||||||||
Diluted shares used | 1,714 | 1,714 | 1,714 | 1,714 | 1,714 | 1,714 | |||||||||||||||||||
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 $665 million was recorded associated with the sale of substantially all of the operations of our Omnitracs division. |
• | QSI is excluded because the Company expects to exit its strategic investments at various times, and the effects of fluctuations in the value of such investments and realized gains or losses are viewed by management as unrelated to the Company’s operational performance. |
• | Share-based compensation expense primarily relates to restricted stock units. Non-cash share-based compensation is excluded because management views such expenses as unrelated to the operating activities of the Company’s ongoing core businesses. |
• | Acquisition-related items include amortization and impairment of certain intangible assets, recognition of the step-up of inventories to fair value and the related tax effects of these items starting with acquisitions completed in the third quarter of fiscal 2011, as well as any tax effects from restructuring the ownership of such acquired assets. Additionally, the Company excludes expenses related to the termination of contracts that limit the use of the acquired intellectual property. These acquisition-related items are excluded and are not allocated to the Company’s segments because management views such expenses as unrelated to the operating activities of the Company’s ongoing core businesses. In addition, these charges are impacted by the size and timing of acquisitions, potentially obscuring period-to-period comparisons of the Company’s operating businesses. |
• | Certain tax items that are unrelated to the fiscal year in which they are recorded are excluded in order to provide a clearer understanding of the Company’s ongoing Non-GAAP tax rate and after tax earnings. |
Three Months Ended September 28, 2014 | ||||||||||||||||||||||||||
Non-GAAP Results | QSI | Share-Based Compensation | Acquisition-Related Items | GAAP Results | ||||||||||||||||||||||
($ in millions, except per share data) | ||||||||||||||||||||||||||
Cost of equipment and services revenues | $ | 2,680 | $ | — | $ | 11 | $ | 66 | $ | 2,757 | ||||||||||||||||
R&D | 1,197 | 1 | 163 | 3 | 1,364 | |||||||||||||||||||||
SG&A | 458 | 2 | 78 | 7 | 545 | |||||||||||||||||||||
Other expenses | 34 | (a) | — | — | — | 34 | ||||||||||||||||||||
Operating income (loss) | 2,323 | (3 | ) | (252 | ) | (76 | ) | 1,992 | ||||||||||||||||||
Investment income, net | $ | 228 | (b) | $ | 32 | (c) | $ | — | $ | — | $ | 260 | ||||||||||||||
Tax rate | 16 | % | 7 | % | 21 | % | (3 | )% | 16 | % | ||||||||||||||||
Net income (loss) | $ | 2,143 | $ | 28 | $ | (199 | ) | $ | (78 | ) | $ | 1,894 | ||||||||||||||
Diluted EPS | $ | 1.26 | $ | 0.02 | $ | (0.12 | ) | $ | (0.05 | ) | $ | 1.11 |
(a) | Included $19 million in restructuring-related costs incurred by our QMT division and a $15 million legal settlement. |
(b) | Included $125 million in interest and dividend income, $106 million in net realized gains on investments, $6 million in net gains on derivatives and $1 million in gains on deconsolidation of subsidiaries, partially offset by $7 million in other-than-temporary losses on investments, $2 million in equity in losses of investees and $1 million in interest expense. |
(c) | Included $35 million in net realized gains on investments and $1 million in interest and dividend income, partially offset by $2 million in other-than-temporary losses on investments and $2 million in equity in losses of investees. |
Twelve Months Ended September 28, 2014 | |||||||||||||||||||||||||||||||
Non-GAAP Results | QSI | Share-Based Compensation | Acquisition-Related Items | Tax Items (d) | GAAP Results | ||||||||||||||||||||||||||
($ in millions, except per share data) | |||||||||||||||||||||||||||||||
Cost of equipment and services revenues | $ | 10,386 | $ | — | $ | 49 | $ | 251 | $ | — | $ | 10,686 | |||||||||||||||||||
R&D | 4,770 | 5 | 672 | 30 | — | 5,477 | |||||||||||||||||||||||||
SG&A | 1,914 | 13 | 338 | 25 | — | 2,290 | |||||||||||||||||||||||||
Other expenses, net | 484 | (e) | — | — | — | — | 484 | ||||||||||||||||||||||||
Operating income (loss) | 8,933 | (18 | ) | (1,059 | ) | (306 | ) | — | 7,550 | ||||||||||||||||||||||
Investment income, net | $ | 1,217 | (f) | $ | 11 | (g) | $ | — | $ | — | $ | — | $ | 1,228 | |||||||||||||||||
Tax rate | 15 | % | N/M | 19 | % | 5 | % | N/A | 14 | % | |||||||||||||||||||||
Net income (loss) | $ | 9,032 | $ | 15 | $ | (856 | ) | $ | (290 | ) | $ | 66 | $ | 7,967 | |||||||||||||||||
Diluted EPS | $ | 5.27 | $ | 0.01 | $ | (0.50 | ) | $ | (0.17 | ) | $ | 0.04 | $ | 4.65 |
(d) | Included a $66 million tax benefit related to an agreement reached with the Internal Revenue Service on components of our fiscal 2013 tax return. |
(e) | Included $607 million in long-lived asset and goodwill impairment charges and $19 million in restructuring-related costs incurred by our QMT division, a $16 million goodwill impairment charge related to our former QRS (Qualcomm Retail Solutions) division and a $15 million legal settlement, partially offset by the reversal of a $173 million expense accrual recorded in fiscal 2013 related to our litigation with ParkerVision. |
(f) | Included $756 million in net realized gains on investments, $584 million in interest and dividend income, $7 million in net gains on derivatives and $6 million in gains on deconsolidation of subsidiaries, partially offset by $131 million in other-than-temporary losses on investments, $4 million in interest expense and $1 million in equity in losses of investees. |
(g) | Included $70 million in net realized gains on investments and $2 million in interest and dividend income, partially offset by $49 million in other-than-temporary losses on investments, $9 million in equity in losses of investees, $2 million in net losses on derivatives and $1 million in interest expense. |
Three Months Ended September 28, 2014 | |||||||||||||||||||||||||
($ in millions) | Non-GAAP Results | QSI | Share-Based Compensation | Acquisition-Related Items | GAAP Results | ||||||||||||||||||||
Income (loss) from continuing operations before income taxes | $ | 2,551 | $ | 29 | $ | (252 | ) | $ | (76 | ) | $ | 2,252 | |||||||||||||
Income tax (expense) benefit | (408 | ) | (2 | ) | 53 | (2 | ) | (359 | ) | ||||||||||||||||
Income (loss) from continuing operations | $ | 2,143 | $ | 27 | $ | (199 | ) | $ | (78 | ) | $ | 1,893 | |||||||||||||
Tax rate | 16 | % | 7 | % | 21 | % | (3 | )% | 16 | % |
Twelve Months Ended September 28, 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 | $ | 10,150 | $ | (7 | ) | $ | (1,059 | ) | $ | (306 | ) | $ | — | $ | 8,778 | |||||||||||||||
Income tax (expense) benefit | (1,548 | ) | 19 | 203 | 16 | 66 | (1,244 | ) | ||||||||||||||||||||||
Income (loss) from continuing operations | $ | 8,602 | $ | 12 | $ | (856 | ) | $ | (290 | ) | $ | 66 | $ | 7,534 | ||||||||||||||||
Tax rate | 15 | % | N/M | 19 | % | 5 | % | 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 on components of our fiscal 2013 tax return. |
September 28, 2014 | September 29, 2013 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 7,907 | $ | 6,142 | |||
Marketable securities | 9,658 | 8,824 | |||||
Accounts receivable, net | 2,412 | 2,142 | |||||
Inventories | 1,458 | 1,302 | |||||
Deferred tax assets | 577 | 573 | |||||
Other current assets | 401 | 572 | |||||
Total current assets | 22,413 | 19,555 | |||||
Marketable securities | 14,457 | 14,440 | |||||
Deferred tax assets | 1,174 | 1,059 | |||||
Property, plant and equipment, net | 2,487 | 2,995 | |||||
Goodwill | 4,488 | 3,976 | |||||
Other intangible assets, net | 2,580 | 2,553 | |||||
Other assets | 975 | 938 | |||||
Total assets | $ | 48,574 | $ | 45,516 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Trade accounts payable | $ | 2,183 | $ | 1,554 | |||
Payroll and other benefits related liabilities | 802 | 839 | |||||
Unearned revenues | 785 | 501 | |||||
Other current liabilities | 2,243 | 2,319 | |||||
Total current liabilities | 6,013 | 5,213 | |||||
Unearned revenues | 2,967 | 3,666 | |||||
Other liabilities | 428 | 550 | |||||
Total liabilities | 9,408 | 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; 1,669 and 1,685 shares issued and outstanding, respectively | 7,736 | 9,874 | |||||
Retained earnings | 30,799 | 25,461 | |||||
Accumulated other comprehensive income | 634 | 753 | |||||
Total Qualcomm stockholders’ equity | 39,169 | 36,088 | |||||
Noncontrolling interests | (3 | ) | (1 | ) | |||
Total stockholders’ equity | 39,166 | 36,087 | |||||
Total liabilities and stockholders’ equity | $ | 48,574 | $ | 45,516 |
Three Months Ended | Twelve Months Ended | ||||||||||||||
September 28, 2014 | September 29, 2013 | September 28, 2014 | September 29, 2013 | ||||||||||||
Revenues: | |||||||||||||||
Equipment and services | $ | 4,822 | $ | 4,513 | $ | 18,625 | $ | 16,988 | |||||||
Licensing | 1,870 | 1,967 | 7,862 | 7,878 | |||||||||||
Total revenues | 6,692 | 6,480 | 26,487 | 24,866 | |||||||||||
Costs and expenses: | |||||||||||||||
Cost of equipment and services revenues | 2,757 | 2,714 | 10,686 | 9,820 | |||||||||||
Research and development | 1,364 | 1,348 | 5,477 | 4,967 | |||||||||||
Selling, general and administrative | 545 | 657 | 2,290 | 2,518 | |||||||||||
Other | 34 | 173 | 484 | 331 | |||||||||||
Total costs and expenses | 4,700 | 4,892 | 18,937 | 17,636 | |||||||||||
Operating income | 1,992 | 1,588 | 7,550 | 7,230 | |||||||||||
Investment income, net | 260 | 233 | 1,228 | 964 | |||||||||||
Income from continuing operations before income taxes | 2,252 | 1,821 | 8,778 | 8,194 | |||||||||||
Income tax expense | (359 | ) | (320 | ) | (1,244 | ) | (1,349 | ) | |||||||
Income from continuing operations | 1,893 | 1,501 | 7,534 | 6,845 | |||||||||||
Discontinued operations, net of income taxes | — | — | 430 | — | |||||||||||
Net income | 1,893 | 1,501 | 7,964 | 6,845 | |||||||||||
Net loss attributable to noncontrolling interests | 1 | — | 3 | 8 | |||||||||||
Net income attributable to Qualcomm | $ | 1,894 | $ | 1,501 | $ | 7,967 | $ | 6,853 | |||||||
Basic earnings per share attributable to Qualcomm: | |||||||||||||||
Continuing operations | $ | 1.13 | $ | 0.88 | $ | 4.48 | $ | 3.99 | |||||||
Discontinued operations | — | — | 0.25 | — | |||||||||||
Net income | $ | 1.13 | $ | 0.88 | $ | 4.73 | $ | 3.99 | |||||||
Diluted earnings per share attributable to Qualcomm: | |||||||||||||||
Continuing operations | $ | 1.11 | $ | 0.86 | $ | 4.40 | $ | 3.91 | |||||||
Discontinued operations | — | — | 0.25 | — | |||||||||||
Net income | $ | 1.11 | $ | 0.86 | $ | 4.65 | $ | 3.91 | |||||||
Shares used in per share calculations: | |||||||||||||||
Basic | 1,674 | 1,703 | 1,683 | 1,715 | |||||||||||
Diluted | 1,701 | 1,738 | 1,714 | 1,754 | |||||||||||
Dividends per share announced | $ | 0.42 | $ | 0.35 | $ | 1.54 | $ | 1.20 |
Three Months Ended | Twelve Months Ended | ||||||||||||||
September 28, 2014 | September 29, 2013 | September 28, 2014 | September 29, 2013 | ||||||||||||
Operating Activities: | |||||||||||||||
Net income | $ | 1,894 | $ | 1,501 | $ | 7,964 | $ | 6,845 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
Depreciation and amortization expense | 297 | 273 | 1,150 | 1,017 | |||||||||||
Gain on sale of discontinued operations | — | — | (665 | ) | — | ||||||||||
Long-lived asset and goodwill impairment charges | — | 1 | 642 | 192 | |||||||||||
Income tax provision in excess of income tax payments | 54 | 48 | 298 | 268 | |||||||||||
Non-cash portion of share-based compensation expense | 252 | 274 | 1,059 | 1,105 | |||||||||||
Incremental tax benefit from share-based compensation | (41 | ) | (53 | ) | (280 | ) | (231 | ) | |||||||
Net realized gains on marketable securities and other investments | (141 | ) | (129 | ) | (826 | ) | (369 | ) | |||||||
Impairment losses on marketable securities and other investments | 9 | 36 | 180 | 85 | |||||||||||
Other items, net | (10 | ) | 52 | (17 | ) | (19 | ) | ||||||||
Changes in assets and liabilities: | |||||||||||||||
Accounts receivable, net | (324 | ) | (235 | ) | (281 | ) | (680 | ) | |||||||
Inventories | (271 | ) | 399 | (155 | ) | (300 | ) | ||||||||
Other assets | (28 | ) | (98 | ) | 108 | (209 | ) | ||||||||
Trade accounts payable | 298 | (291 | ) | 619 | 307 | ||||||||||
Payroll, benefits and other liabilities | (280 | ) | 700 | (617 | ) | 752 | |||||||||
Unearned revenues | (90 | ) | 45 | (292 | ) | 15 | |||||||||
Net cash provided by operating activities | 1,619 | 2,523 | 8,887 | 8,778 | |||||||||||
Investing Activities: | |||||||||||||||
Capital expenditures | (230 | ) | (200 | ) | (1,185 | ) | (1,048 | ) | |||||||
Purchases of available-for-sale securities | (3,266 | ) | (1,839 | ) | (13,581 | ) | (13,951 | ) | |||||||
Proceeds from sales and maturities of available-for-sale securities | 3,843 | 6,157 | 13,587 | 13,494 | |||||||||||
Purchases of trading securities | (207 | ) | (654 | ) | (3,075 | ) | (3,312 | ) | |||||||
Proceeds from sales and maturities of trading securities | 205 | 1,002 | 2,824 | 3,367 | |||||||||||
Purchases of other marketable securities | — | — | (220 | ) | — | ||||||||||
Proceeds from sale of discontinued operations, net of cash sold | — | — | 788 | — | |||||||||||
Acquisitions and other investments, net of cash acquired | (436 | ) | (13 | ) | (883 | ) | (192 | ) | |||||||
Other items, net | 4 | (4 | ) | 106 | 64 | ||||||||||
Net cash (used) provided by investing activities | (87 | ) | 4,449 | (1,639 | ) | (1,578 | ) | ||||||||
Financing Activities: | |||||||||||||||
Proceeds from issuance of common stock | 292 | 561 | 1,439 | 1,525 | |||||||||||
Incremental tax benefit from share-based compensation | 41 | 53 | 280 | 231 | |||||||||||
Repurchases and retirements of common stock | (1,195 | ) | (3,321 | ) | (4,549 | ) | (4,610 | ) | |||||||
Dividends paid | (702 | ) | (592 | ) | (2,586 | ) | (2,055 | ) | |||||||
Borrowings under loans and debentures | — | — | — | 534 | |||||||||||
Repayments of loans and debentures | — | — | — | (439 | ) | ||||||||||
Other items, net | 1 | (66 | ) | (64 | ) | (31 | ) | ||||||||
Net cash used by financing activities | (1,563 | ) | (3,365 | ) | (5,480 | ) | (4,845 | ) | |||||||
Changes in cash and cash equivalents held for sale | — | — | — | (15 | ) | ||||||||||
Effect of exchange rate changes on cash | (6 | ) | 2 | (3 | ) | (5 | ) | ||||||||
Net (decrease) increase in cash and cash equivalents | (37 | ) | 3,609 | 1,765 | 2,335 | ||||||||||
Cash and cash equivalents at beginning of year | 7,944 | 2,533 | 6,142 | 3,807 | |||||||||||
Cash and cash equivalents at end of year | $ | 7,907 | $ | 6,142 | $ | 7,907 | $ | 6,142 |