Composition of Certain Financial Statement Items (Notes)
|6 Months Ended|
Mar. 28, 2021
|Balance Sheet Related Disclosures [Abstract]|
|Composition of Certain Financial Statement Items||Composition of Certain Financial Statement Items
Revolving Credit Facility. On December 8, 2020, we entered into a Revolving Credit Facility replacing our prior Amended and Restated Revolving Credit Facility. There were no outstanding borrowings under the Amended and Restated Revolving Credit Facility at the time of termination. The Revolving Credit Facility provides for unsecured revolving facility loans, swing line loans and letters of credit in an aggregate amount of up to $4.5 billion, which expires on December 8, 2025. At March 28, 2021, no amounts were outstanding under the Revolving Credit Facility. The Revolving Credit Facility requires that we comply with certain financial covenants, including that we maintain an interest coverage ratio, as defined in the agreement. At March 28, 2021, we were in compliance with the applicable covenants under the Revolving Credit Facility.
Interest Rate Swaps. Beginning in the second quarter of 2021, we entered into forward-starting interest rate swaps to hedge the variability of forecasted interest payments on anticipated debt issuances through 2025. At March 28, 2021, the notional amount of the forward-starting interest rate swaps outstanding, which are denominated in U.S. dollars, was $1.2 billion. The fair values of the forward-starting interest rate swaps recorded in other noncurrent assets and other noncurrent liabilities were $23 million and negligible, respectively, at March 28, 2021. Since March 28, 2021, we entered into additional forward-starting interest rate swaps with an aggregate notional amount of $1.1 billion.
Revenues. We disaggregate our revenues by segment (Note 6) and type of products and services (as presented on our condensed consolidated statement of operations), and for our QCT (Qualcomm CDMA Technologies) segment by revenue stream, which is based on industry segment and application in which our products are sold (as presented below). In certain cases, the determination of QCT revenues by industry segment and application requires the use of certain assumptions. Substantially all of QCT’s revenues consist of equipment revenues that are recognized at a point in time, and substantially all of QTL’s (Qualcomm Technology Licensing) revenues represent licensing revenues that are recognized over time and are principally from royalties generated through our licensees’ sales of mobile handsets. QCT revenue streams were as follows (in millions):
(1) Includes revenues from products sold for use in mobile handsets, excluding RFFE (radio frequency front-end) components.
(2) Includes all revenues from sales of 4G, 5G sub-6 and 5G millimeter wave RFFE products (a substantial portion of which are sold for use in handsets).
(3) Includes revenues from products sold for use in automobiles, including telematics, connectivity and digital cockpit.
(4) Primarily includes products sold for use in cellular and non-cellular connected devices within the following industry segments and applications: consumer, computing, industrial, fixed wireless broadband, voice and music and wireless networking.
Revenues recognized from performance obligations satisfied (or partially satisfied) in previous periods were $122 million and $150 million for the three months ended March 28, 2021 and March 29, 2020, respectively, and $176 million and $178 million for the six months ended March 28, 2021 and March 29, 2020, respectively, and primarily related to QTL royalty revenues recognized related to devices sold in prior periods (including adjustments to prior period royalty estimates, in part based on actual reporting of royalties by our licensees) and certain QCT customer incentives.
Unearned revenues (which are considered contract liabilities) consist primarily of license fees for intellectual property with continuing performance obligations. In the six months ended March 28, 2021 and March 29, 2020, we recognized revenues of $314 million and $307 million, respectively, that were recorded as unearned revenues at September 27, 2020 and September 29, 2019, respectively.
Remaining performance obligations, substantially all of which are included in unearned revenues, represent the aggregate amount of the transaction price of certain customer contracts yet to be recognized as revenues as of the end of the reporting period and exclude revenues related to (a) contracts that have an original expected duration of one year or less and (b) sales-based royalties (i.e., future royalty revenues) pursuant to our license agreements. Our remaining performance obligations are primarily comprised of certain customer contracts for which QTL received license fees upfront. At March 28, 2021, we had $1.2 billion of remaining performance obligations, of which $272 million, $535 million, $258 million, $75 million and $26 million was expected to be recognized as revenues for the remainder of fiscal 2021 and each of the subsequent four years from fiscal 2022 through 2025, respectively, and no amounts thereafter.
Concentrations. A significant portion of our revenues are concentrated with a small number of customers/licensees of our QCT and QTL segments. The comparability of customer/licensee concentrations for the interim periods presented are impacted by the timing of customer/licensees device launches and/or innovation cycles and other seasonal trends, among other fluctuations in demand. Revenues from each customer/licensee that were 10% or greater of total revenues were as follows:
* Less than 10%
Accounts receivable at March 28, 2021 and September 27, 2020 included approximately $700 million and $1.3 billion, respectively, excluding the impact of foreign withholding taxes, from Huawei related to the remaining amounts due under the previously disclosed settlement agreement to be paid in installments by the end of June 2021 and estimated royalties for sales made in the March 2021 and September 2020 quarters, respectively, under the global patent license agreement with Huawei. Subsequent to March 28, 2021, Huawei paid the third installment of $300 million (excluding the impact of foreign withholding taxes) under the settlement agreement in accordance with the agreed upon payment schedule.
Other Income, Costs and Expenses. Other income in the three and six months ended March 29, 2020 consisted of a $23 million gain related to a favorable legal settlement.
The entire disclosures of supplemental information, including descriptions and amounts, related to the balance sheet, income statement, and/or cash flow statement.
No definition available.
No definition available.