Composition of Certain Financial Statement Items
|12 Months Ended|
Sep. 26, 2021
|Balance Sheet Related Disclosures [Abstract]|
|Composition of Certain Financial Statement Items||Composition of Certain Financial Statement Items
In July 2020, we entered into a settlement agreement with Huawei to resolve our prior dispute related to the license agreement that expired on December 31, 2019. We also entered into a new long-term, global patent license agreement that applies to sales of certain wireless products by Huawei beginning on January 1, 2020. As a result, we recorded revenues of $1.8 billion in the fourth quarter of fiscal 2020 related to the full amount due from Huawei under the settlement agreement and amounts paid for the March 2020 and June 2020 quarters under the new global patent license agreement. Accounts receivable at September 27, 2020 included approximately $1.3 billion, excluding the impact of foreign withholding taxes, from Huawei related to the remaining amounts due under the settlement agreement and estimated royalties for sales made in the September 2020 quarter. Since September 27, 2020, Huawei paid all such amounts, including the final installment under the settlement agreement in accordance with the agreed upon payment schedule.
Depreciation and amortization expense related to property, plant and equipment for fiscal 2021, 2020 and 2019 was $1.0 billion, $772 million and $674 million, respectively.
Goodwill and Other Intangible Assets. We allocate goodwill to our reporting units for impairment testing purposes. The following table presents the goodwill allocated to our reportable and nonreportable segments, as described in Note 8, as well as the changes in the carrying amounts of goodwill during fiscal 2021 and 2020 (in millions):
(1) Cumulative goodwill impairments were $812 million at both September 26, 2021 and September 27, 2020.
The components of other intangible assets, net were as follows (in millions):
All of these intangible assets are subject to amortization, other than acquired in-process research and development which had a carrying value of $247 million at September 26, 2021. At September 27, 2020, there was no in-process research and development. Amortization expense related to these intangible assets was $537 million, $621 million and $727 million for fiscal 2021, 2020 and 2019, respectively. Amortization expense related to these intangible assets and acquired in-process research and development, beginning upon the completion of the underlying projects, is expected to be $449 million, $340 million, $186 million, $153 million and $132 million for each of the five years from fiscal 2022 through 2026, respectively, and $198 million thereafter.
Equity Method and Non-marketable Equity Investments. The carrying values of our equity method and non-marketable equity investments are recorded in other assets and were as follows (in millions):
Revenues. We disaggregate our revenues by segment (Note 8), by product and service (as presented on our consolidated statements of operations) and for our QCT segment by revenue stream, which is based on the industry and application in which our products are sold (as presented below). In certain cases, the determination of QCT revenues by industry 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 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 mobile handsets) and excludes radio frequency transceiver components.
(3) Includes revenues from products sold for use in automobiles, including telematics, connectivity and digital cockpit.
(4) Primarily includes products sold for use in the following industries and applications: consumer (including computing, voice and music and XR), industrial (including handhelds, retail, transportation and logistics and utilities) and edge networking (including mobile broadband and wireless access points).
Revenue recognized from performance obligations satisfied (or partially satisfied) in previous periods were as follows (in millions):
(1) Primarily related to certain QCT customer incentives, QTL revenues recognized related to devices sold in prior periods (including adjustments to prior period royalty estimates, which includes the impact of the reporting by our licensees of actual royalty due) and the release of a variable constraint against revenues not previously allocated to our segment results (Note 8).
(2) Primarily related to licensing revenues recognized in the fourth quarter of fiscal 2020 (a portion of which was attributable to fiscal 2020) resulting from the settlement with Huawei and, to a lesser extent, QTL royalties recognized related to devices sold in prior periods (including adjustments to prior period royalty estimates, which includes the impact of the reporting by our licensees of actual royalties due) and certain QCT customer incentives.
(3) Primarily related to licensing revenues recognized in the third quarter of fiscal 2019 (a portion of which was attributable to fiscal 2019) resulting from the settlement with Apple and its contract manufacturers in April 2019.
Unearned revenues (which are considered contract liabilities) consist primarily of license fees for intellectual property with continuing performance obligations. In fiscal 2021 and fiscal 2020, we recognized revenues of $557 million and $540 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 September 26, 2021, we had $1.1 billion of remaining performance obligations, of which $653 million, $308 million, $84 million, $31 million and $2 million is expected to be recognized as revenues for each of the subsequent five years from fiscal 2022 through 2026, respectively, and no amounts expected thereafter.
Share-based Compensation Expense. Total share-based compensation expense, related to all of our share-based awards, was comprised as follows (in millions):
Other Income, Costs and Expenses. Other expenses in fiscal 2020 consisted of $28 million in gains related to a favorable legal settlement. Other expenses in fiscal 2019 consisted of a $275 million charge related to a fine imposed by the European Commission (EC) related to the Icera complaint (2019 EC fine) (Note 7) and $213 million in net charges related to our Cost Plan that concluded in fiscal 2019 (primarily related to certain asset impairment charges and also included a $52 million net gain from the sale of certain assets related to wireless electric vehicle charging applications and the sale of our mobile health nonreportable segment), partially offset by a $43 million gain due to the partial recovery of a fine imposed in 2009 resulting from our appeal of the Korea Fair Trade Commission (KFTC) decision and a $31 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.