Quarterly report pursuant to Section 13 or 15(d)

Segment Information (Notes)

v3.8.0.1
Segment Information (Notes)
 3 Months Ended
Dec. 24, 2017
Segment Reporting [Abstract]  
Segment Information
Segment Information
The Company is organized on the basis of products and services and has three reportable segments. The Company conducts business primarily through its QCT (Qualcomm CDMA Technologies) semiconductor business and its QTL (Qualcomm Technology Licensing) licensing business. QCT develops and supplies integrated circuits and system software based on CDMA, OFDMA and other technologies for use in mobile devices, wireless networks, devices used in the Internet of Things (IoT), broadband gateway equipment, consumer electronic devices and automotive telematics and infotainment systems. QTL grants licenses to use portions of its intellectual property portfolio, which includes certain patent rights essential to and/or useful in the manufacture and sale of certain wireless products. The Company’s 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 mobile health, data center, small cell and other wireless technology and service initiatives.
The Company evaluates the performance of its segments based on earnings (loss) before income taxes (EBT). In fiscal 2018, all of the costs related to pre-commercial research and development of 5G (fifth generation) technology, of which $100 million was recorded in the three months ended December 24, 2017, are included in unallocated corporate research and development expenses, whereas similar costs related to the research and development of other technology, including 3G (third generation) and 4G (fourth generation) technology, were recorded in both the QCT and QTL segments.
The table below presents revenues, EBT and total assets for reportable segments (in millions):
 
Three Months Ended
 
December 24,
2017
 
December 25,
2016
Revenues
 
 
 
QCT
$
4,651

 
$
4,101

QTL
1,299

 
1,811

QSI
30

 
14

Reconciling items
88

 
73

Total
$
6,068

 
$
5,999

EBT
 
 
 
QCT
$
955

 
$
724

QTL
887

 
1,532

QSI
11

 
(17
)
Reconciling items
(1,880
)
 
(1,369
)
Total
$
(27
)
 
$
870

 
 
 
 
 
December 24,
2017
 
September 24,
2017
Assets
 
 
 
QCT
$
3,134

 
$
3,830

QTL
1,693

 
1,735

QSI
1,159

 
1,037

Reconciling items
58,365

 
58,884

Total
$
64,351

 
$
65,486


Reconciling items for revenues and EBT in the previous table were as follows (in millions):
 
Three Months Ended
 
December 24,
2017
 
December 25,
2016
Revenues
 
 
 
Nonreportable segments
$
88

 
$
73

 
$
88

 
$
73

EBT
 
 
 
Unallocated cost of revenues
$
(117
)
 
$
(95
)
Unallocated research and development expenses
(280
)
 
(269
)
Unallocated selling, general and administrative expenses
(161
)
 
(145
)
Unallocated other expenses
(1,183
)
 
(876
)
Unallocated interest expense
(170
)
 
(89
)
Unallocated investment and other income, net
124

 
184

Nonreportable segments
(93
)
 
(79
)
 
$
(1,880
)
 
$
(1,369
)

Unallocated other expenses in the three months ended December 24, 2017 were comprised of the EC fine (Note 6). Unallocated other expenses in the three months ended December 25, 2016 were comprised primarily of the KFTC fine (Note 6).
Unallocated acquisition-related expenses were comprised as follows (in millions):
 
Three Months Ended
 
December 24,
2017
 
December 25,
2016
Cost of revenues
$
106

 
$
84

Research and development expenses
2

 
3

Selling, general and administrative expenses
76

 
61