Annual report pursuant to Section 13 and 15(d)

Segment Information

Segment Information
12 Months Ended
Sep. 25, 2022
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 similarities and the level of centralized resource planning 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, including RFFE, for use in mobile devices; automotive systems for connectivity, digital cockpit and ADAS/AD; and IoT including consumer electronic devices; industrial devices; and edge networking products. 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 and sale of certain wireless products. Our QSI (Qualcomm Strategic Initiatives) reportable segment makes strategic investments. We also have nonreportable segments, including QGOV (Qualcomm Government Technologies) and our cloud AI inference processing initiative.
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, certain 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, asset impairment charges and awards, settlements and/or damages arising from legal or regulatory matters. Our CODM does not evaluate our operating segments using discrete asset information.
The table below presents revenues and EBT for reportable segments (in millions):
2022 2021 2020
QCT $ 37,677  $ 27,019  $ 16,493 
QTL 6,358  6,320  5,028 
QSI 31  45  36 
Reconciling items 134  182  1,974 
Total $ 44,200  $ 33,566  $ 23,531 
QCT $ 12,837  $ 7,763  $ 2,763 
QTL 4,628  4,627  3,442 
QSI (279) 916  (11)
Reconciling items (2,188) (3,032) (475)
Total $ 14,998  $ 10,274  $ 5,719 
The net book value of long-lived tangible assets located outside of the U.S. was $3.5 billion and $2.9 billion at September 25, 2022 and September 26, 2021, respectively. The net book value of long-lived tangible assets located in the U.S. was $2.3 billion and $2.2 billion at September 25, 2022 and September 26, 2021, respectively.
We report revenues from external customers by country based on the location to which our products or services are delivered, which for QCT is generally the country in which our customers manufacture their products, and for licensing revenues, the invoiced addresses of our licensees. As a result, the revenues by country presented herein are not necessarily indicative of either the country in which the devices containing our products and/or intellectual property are ultimately sold to consumers or the country in which the companies that sell the devices are headquartered. For example, China revenues could include revenues related to shipments of integrated circuits for a company that is headquartered in South Korea but that manufactures devices in China, which devices are then sold to consumers in Europe and/or the United States. Revenues by country were as follows (in millions):
2022 2021 2020
China (including Hong Kong) $ 28,119  $ 22,512  $ 14,001 
Vietnam 6,063  3,114  2,212 
South Korea 3,164  2,368  2,964 
United States 1,482  1,406  1,129 
Other foreign 5,372  4,166  3,225 
$ 44,200  $ 33,566  $ 23,531 
Reconciling items for revenues and EBT in a previous table were as follows (in millions):
2022 2021 2020
Nonreportable segments $ 134  $ 128  $ 133 
Unallocated revenues (Note 2) —  54  1,841 
$ 134  $ 182  $ 1,974 
Unallocated revenues (Note 2) $ —  $ 54  $ 1,841 
Unallocated cost of revenues (266) (277) (340)
Unallocated research and development expenses (1,767) (1,820) (1,046)
Unallocated selling, general and administrative expenses (609) (538) (401)
Unallocated other income (Note 2) 1,059  —  28 
Unallocated interest expense (490) (559) (599)
Unallocated investment and other (expense) income, net (91) 166  105 
Nonreportable segments (24) (58) (63)
$ (2,188) $ (3,032) $ (475)
Certain revenues were not allocated to our segments in our management reports because they were not considered in evaluating segment results. Unallocated revenues in fiscal 2021 were comprised of the release of a variable constraint against revenues not previously allocated to our segment results. Unallocated revenues in fiscal 2020 were comprised of licensing revenues from Huawei resulting from the settlement agreement signed in July 2020 and royalties for sales made in the March 2020 and June 2020 quarters under a new global patent license agreement signed in July 2020.