Quarterly report pursuant to Section 13 or 15(d)

Composition of Certain Financial Statement Items (Notes)

v3.7.0.1
Composition of Certain Financial Statement Items (Notes)
 6 Months Ended
Mar. 26, 2017
Balance Sheet Related Disclosures [Abstract]  
Composition of Certain Financial Statement Items
Composition of Certain Financial Statement Items
Accounts Receivable (in millions)
 
 
 
 
March 26,
2017
 
September 25,
2016
Trade, net of allowances for doubtful accounts of $1 and $1, respectively
$
4,177

 
$
2,194

Long-term contracts
12

 
20

Other
12

 
5

 
$
4,201

 
$
2,219


Approximately half of the increase in accounts receivable was due to the underpayment of royalties reported by and deemed collectible from certain of the Company’s licensees that manufacture products for Apple. This same amount is recorded in customer-related liabilities for Apple, since the Company does not have the contractual right to offset these amounts. The remaining increase in accounts receivable resulted from the timing of the collection of payments from certain of the Company’s other licensees, the acquisition of receivables in connection with the RF360 Holdings joint venture (Note 8) and the timing of integrated circuit shipments.
Inventories (in millions)
 
 
 
 
March 26,
2017
 
September 25,
2016
Raw materials
$
73

 
$
1

Work-in-process
1,018

 
847

Finished goods
975

 
708

 
$
2,066

 
$
1,556


Other Current Liabilities (in millions)
 
 
 
 
March 26,
2017
 
September 25,
2016
Customer incentives and other customer-related liabilities
$
2,665

 
$
1,710

Accrual for BlackBerry arbitration decision (Note 6)
974

 
—

Accrual for KFTC decision (Note 6)
921

 
—

Other
890

 
551

 
$
5,450

 
$
2,261


Other Income, Costs and Expenses. Other expenses in the three months ended March 26, 2017 consisted of $53 million in foreign currency losses related to the fine imposed by the Korea Fair Trade Commission (KFTC), which was accrued in the first quarter of fiscal 2017 (Note 6), and $25 million in restructuring and restructuring-related charges related to the Company’s Strategic Realignment Plan, which was substantially implemented in fiscal 2016. Other expenses in the six months ended March 26, 2017 consisted of a $921 million charge related to the KFTC fine, including related foreign currency losses, and $33 million in restructuring and restructuring-related charges related to the Company’s Strategic Realignment Plan.
Other expenses in the three months ended March 27, 2016 consisted of restructuring and restructuring-related charges related to the Company’s Strategic Realignment Plan. Other income in the six months ended March 27, 2016 included a gain of $380 million on the sale of wireless spectrum in the United Kingdom that was held by the QSI (Qualcomm Strategic Initiative) segment in the first quarter of fiscal 2016 for $232 million in cash and $275 million in deferred payments due in 2020 to 2023, which were recorded at their present values in other assets. Other income in the six months ended March 27, 2016 also included $129 million in restructuring and restructuring-related charges, which were partially offset by a $48 million gain on the sale of the Company’s business that provided augmented reality applications, both of which related to the Company’s Strategic Realignment Plan.
Investment Income, Net (in millions)
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
March 26,
2017
 
March 27,
2016
 
March 26,
2017
 
March 27,
2016
Interest and dividend income
$
153

 
$
158

 
$
320

 
$
295

Net realized gains on marketable securities
67

 
1

 
206

 
43

Net realized gains on other investments
21

 
23

 
30

 
30

Impairment losses on marketable securities
(3
)
 
(41
)
 
(125
)
 
(90
)
Impairment losses on other investments
(2
)
 
(2
)
 
(23
)
 
(16
)
Equity in net losses of investees
(14
)
 
(11
)
 
(11
)
 
(31
)
Net gains (losses) on derivative investments
13

 
(1
)
 
20

 
(5
)
 
$
235

 
$
127

 
$
417

 
$
226