Quarterly report pursuant to Section 13 or 15(d)

Segment Information (Notes)

v3.21.2
Segment Information (Notes)
 9 Months Ended
Jun. 27, 2021
Segment Reporting [Abstract]  
Segment Information Segment Information
We are organized on the basis of products and services and have three reportable segments. Our operating segments reflect the way our businesses and management/reporting structure are organized internally and the way our Chief Operating Decision Maker (CODM), who is our CEO, reviews financial information, makes operating decisions and assesses business performance. We also consider, among other items, the way budgets and forecasts are prepared and reviewed and the basis on which executive compensation is determined, as well as the similarity of business activities within our operating segments, such as the nature of products, the level of shared products, technology and other resources, production processes and customer base. We conduct business primarily through our QCT semiconductor business and our QTL licensing business. QCT develops and supplies integrated circuits and system software based on 3G/4G/5G and other technologies for use in mobile devices, wireless networks, devices used in IoT, broadband gateway equipment, consumer electronic devices and automotive systems for telematics and infotainment. QTL grants licenses or otherwise provides rights to use portions of our intellectual property portfolio, which includes certain patent rights essential to and/or useful in the manufacture, sale or use of certain wireless products. Our QSI (Qualcomm Strategic Initiatives) reportable segment makes strategic investments and includes revenues and related costs associated with development contracts with an investee. We also have nonreportable segments, including QGOV (Qualcomm Government Technologies), our cloud AI inference processing initiative and other technology and service initiatives.
Our CODM allocates resources to and evaluates the performance of our segments based on revenues and earnings (loss) before income taxes (EBT). 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 our 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, gains and losses on our deferred compensation plan liabilities and related assets 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 recognition of the step-up of inventories and property, plant and equipment to fair value, amortization of certain intangible assets 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 awards, settlements and/or damages arising from legal or regulatory matters.
The table below presents revenues and EBT for reportable segments (in millions):
Three Months Ended Nine Months Ended
June 27,
2021		 June 28,
2020		 June 27,
2021		 June 28,
2020
Revenues
QCT $ 6,472  $ 3,807  $ 19,287  $ 11,526 
QTL 1,489  1,044  4,762  3,520 
QSI 11  3  30  33 
Reconciling items 88  39  151  106 
Total $ 8,060  $ 4,893  $ 24,230  $ 15,185 
EBT
QCT $ 1,795  $ 603  $ 5,299  $ 1,748 
QTL 1,053  646  3,514  2,335 
QSI 156  153  412  (58)
Reconciling items (747) (534) (2,236) (1,612)
Total $ 2,257  $ 868  $ 6,989  $ 2,413 
Reconciling items for revenues and EBT in the previous table were as follows (in millions):
Three Months Ended Nine Months Ended
June 27,
2021		 June 28,
2020		 June 27,
2021		 June 28,
2020
Revenues
Nonreportable segments $ 34  $ 39  $ 97  $ 106 
Unallocated revenues (Note 2) 54  —  54  — 
$ 88  $ 39  $ 151  $ 106 
EBT
Unallocated revenues (Note 2) $ 54  $ —  $ 54  $ — 
Unallocated cost of revenues (73) (87) (220) (262)
Unallocated research and development expenses (505) (271) (1,325) (746)
Unallocated selling, general and administrative expenses (125) (103) (418) (275)
Unallocated other income (Note 2) —  —  —  23 
Unallocated interest expense (138) (142) (420) (434)
Unallocated investment and other income, net 55  76  140  129 
Nonreportable segments (15) (7) (47) (47)
$ (747) $ (534) $ (2,236) $ (1,612)