Quarterly report pursuant to Section 13 or 15(d)

Segment Information (Notes)

v3.10.0.1
Segment Information (Notes)
 9 Months Ended
Jun. 24, 2018
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 $124 million and $340 million was recorded in the three and nine months ended June 24, 2018, respectively, were 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 the QCT and QTL segments.
The table below presents revenues, EBT and total assets for reportable segments (in millions):
 
Three Months Ended
 
Nine Months Ended
 
June 24,
2018
 
June 25,
2017
 
June 24,
2018
 
June 25,
2017
Revenues
 
 
 
 
 
 
 
QCT
$
4,087

 
$
4,052

 
$
12,635

 
$
11,829

QTL
1,465

 
1,172

 
4,025

 
5,232

QSI
20

 
56

 
80

 
70

Reconciling items
27

 
91

 
188

 
(744
)
Total
$
5,599

 
$
5,371

 
$
16,928

 
$
16,387

EBT
 
 
 
 
 
 
 
QCT
$
607

 
$
575

 
$
2,170

 
$
1,774

QTL
1,049

 
854

 
2,786

 
4,346

QSI
(7
)
 
55

 
44

 
38

Reconciling items
(693
)
 
(626
)
 
(3,712
)
 
(3,572
)
Total
$
956

 
$
858

 
$
1,288

 
$
2,586

 
 
 
 
 
 
 
 

 
June 24,
2018
 
September 24,
2017
Assets
 
 
 
QCT
$
3,063

 
$
3,830

QTL
1,801

 
1,735

QSI
1,153

 
1,037

Reconciling items
56,073

 
58,884

Total
$
62,090

 
$
65,486


Reconciling items for revenues and EBT in the previous table were as follows (in millions):
 
Three Months Ended
 
Nine Months Ended
 
June 24,
2018
 
June 25,
2017
 
June 24,
2018
 
June 25,
2017
Revenues
 
 
 
 
 
 
 
Nonreportable segments
$
77

 
$
79

 
$
238

 
$
218

Reduction to revenues related to BlackBerry arbitration decision
—

 
12

 
—

 
(962
)
Other unallocated revenues
(50
)
 
—

 
(50
)
 
—

 
$
27

 
$
91

 
$
188

 
$
(744
)
EBT
 
 
 
 
 
 
 
Reduction to revenues related to BlackBerry arbitration decision
$
—

 
$
12

 
$
—

 
$
(962
)
Other unallocated revenues
(50
)
 
—

 
(50
)
 
—

Unallocated cost of revenues
(135
)
 
(188
)
 
(362
)
 
(402
)
Unallocated research and development expenses
(293
)
 
(257
)
 
(844
)
 
(803
)
Unallocated selling, general and administrative expenses
(60
)
 
(197
)
 
(480
)
 
(481
)
Unallocated other expenses (Note 2)
(112
)
 
(9
)
 
(1,605
)
 
(962
)
Unallocated interest expense
(208
)
 
(130
)
 
(556
)
 
(325
)
Unallocated investment and other income, net
255

 
239

 
461

 
646

Nonreportable segments
(90
)
 
(96
)
 
(276
)
 
(283
)
 
$
(693
)
 
$
(626
)
 
$
(3,712
)
 
$
(3,572
)

Other unallocated revenues in the three and nine months ended June 24, 2018 were comprised of a reduction to licensing revenues related to a portion of a business arrangement that resolved a legal dispute and were not allocated to a reportable segment in the Company’s management reports because it will not be considered in evaluating segment results.
Unallocated acquisition-related expenses were comprised as follows (in millions):
 
Three Months Ended
 
Nine Months Ended
 
June 24,
2018
 
June 25,
2017
 
June 24,
2018
 
June 25,
2017
Cost of revenues
$
127

 
$
139

 
$
335

 
$
330

Research and development expenses
2

 
3

 
5

 
18

Selling, general and administrative expenses
20

 
77

 
310

 
195