Quarterly report pursuant to Section 13 or 15(d)

Segment Information (Notes)

v3.5.0.2
Segment Information (Notes)
 9 Months Ended
Jun. 26, 2016
Segment Reporting [Abstract]  
Segment Information
Segment Information
The Company is organized on the basis of products and services. The Company conducts business primarily through two reportable segments: QCT (Qualcomm CDMA Technologies) and QTL (Qualcomm Technology Licensing), and its QSI (Qualcomm Strategic Initiatives) reportable segment makes strategic investments and includes revenues and related costs associated with development contracts with an equity method investee. The Company also has nonreportable segments, including its small cells, data center and other wireless technology and service initiatives.
The Company evaluates the performance of its segments based on earnings (loss) before income taxes (EBT) from continuing operations. Segment EBT includes the allocation of certain corporate expenses to the segments, including depreciation and amortization expense related to unallocated corporate assets. Certain income and charges are not allocated to segments in the Company’s management reports because they are not considered in evaluating the segments’ operating performance. Unallocated income and charges include certain interest expense; certain net investment income; certain share-based compensation; and certain research and development expenses, selling, general and administrative expenses and other expenses or income that were deemed to be not directly related to the businesses of the segments. Additionally, unallocated charges include amortization of certain intangible assets, recognition of the step-up of inventories to fair value and certain other acquisition-related charges, third-party acquisition and integration services costs and certain other items, which may include major restructuring and restructuring-related costs, goodwill and long-lived asset impairment charges and litigation settlements and/or damages.
Segment assets are comprised of accounts receivable and inventories for all reportable segments other than QSI. QSI segment assets include certain marketable securities, notes receivable, other investments and all assets of consolidated subsidiaries included in QSI. The increase in QSI assets was primarily a result of a receivable that was recorded in connection with the sale of wireless spectrum during the first quarter of fiscal 2016 (Note 2). Total segment assets differ from total assets on a consolidated basis as a result of unallocated corporate assets primarily comprised of certain cash, cash equivalents, marketable securities, property, plant and equipment, deferred tax assets, intangible assets and assets of nonreportable segments.
The table below presents revenues, EBT and total assets for reportable segments (in millions):
 
QCT
 
QTL
 
QSI
 
Reconciling
Items
 
Total
For the three months ended
 
 
 
 
 
 
 
 
 
June 26, 2016
 
 
 
 
 
 
 
 
 
Revenues
$
3,853

 
$
2,038

 
$
12

 
$
141

 
$
6,044

EBT
365

 
1,749

 
(5
)
 
(416
)
 
1,693

June 28, 2015
 
 
 
 
 
 
 
 
 
Revenues
$
3,853

 
$
1,931

 
$
—

 
$
48

 
$
5,832

EBT
289

 
1,654

 
(49
)
 
(496
)
 
1,398

 
 
 
 
 
 
 
 
 
 
For the nine months ended
 
 
 
 
 
 
 
 
 
June 26, 2016
 
 
 
 
 
 
 
 
 
Revenues
$
11,285

 
$
5,780

 
$
33

 
$
272

 
$
17,370

EBT
1,125

 
4,945

 
400

 
(1,597
)
 
4,873

June 28, 2015
 
 
 
 
 
 
 
 
 
Revenues
$
13,529

 
$
6,162

 
$
—

 
$
134

 
$
19,825

EBT
2,185

 
5,395

 
(82
)
 
(2,262
)
 
5,236

 
 
 
 
 
 
 
 
 
 
Total assets
 
 
 
 
 
 
 
 
 
June 26, 2016
$
2,620

 
$
548

 
$
937

 
$
46,681

 
$
50,786

September 27, 2015
2,923

 
438

 
812

 
46,623

 
$
50,796


Reconciling items in the previous table were as follows (in millions):
 
Three Months Ended
 
Nine Months Ended
 
June 26,
2016
 
June 28,
2015
 
June 26,
2016
 
June 28,
2015
Revenues
 
 
 
 
 
 
 
Nonreportable segments
$
142

 
$
49

 
$
274

 
$
138

Intersegment eliminations
(1
)
 
(1
)
 
(2
)
 
(4
)
 
$
141

 
$
48

 
$
272

 
$
134

EBT
 
 
 
 
 
 
 
Unallocated cost of equipment and services revenues
$
(130
)
 
$
(65
)
 
$
(397
)
 
$
(217
)
Unallocated research and development expenses
(199
)
 
(188
)
 
(602
)
 
(624
)
Unallocated selling, general and administrative expenses
(121
)
 
(137
)
 
(373
)
 
(402
)
Unallocated other expense, net
(30
)
 
(98
)
 
(110
)
 
(1,161
)
Unallocated interest expense
(74
)
 
—

 
(217
)
 
—

Unallocated investment income, net
185

 
193

 
388

 
655

Nonreportable segments
(47
)
 
(201
)
 
(286
)
 
(512
)
Intersegment eliminations
—

 
—

 
—

 
(1
)
 
$
(416
)
 
$
(496
)
 
$
(1,597
)
 
$
(2,262
)

Unallocated other expense for the nine months ended June 26, 2016 was comprised of net restructuring and restructuring-related charges related to the Company’s Strategic Realignment Plan (Note 10). Unallocated other expense for the nine months ended June 28, 2015 was comprised of a charge related to the resolution reached with the NDRC and goodwill and intangible asset impairment charges related to three of the Company’s nonreportable segments, partially offset by a gain on the sale of certain property, plant and equipment (Note 2).
Unallocated acquisition-related expenses were comprised as follows (in millions):
 
Three Months Ended
 
Nine Months Ended
 
June 26,
2016
 
June 28,
2015
 
June 26,
2016
 
June 28,
2015
Cost of equipment and services revenues
$
99

 
$
55

 
$
345

 
$
184

Research and development expenses
2

 
3

 
7

 
11

Selling, general and administrative expenses
23

 
20

 
79

 
45