Composition of Certain Financial Statement Items
|12 Months Ended|
Sep. 24, 2023
|Balance Sheet Related Disclosures [Abstract]|
|Composition of Certain Financial Statement Items||Composition of Certain Financial Statement Items
Depreciation and amortization expense related to property, plant and equipment for fiscal 2023, 2022 and 2021 was $1.4 billion, $1.3 billion and $1.0 billion, 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 segments, as described in Note 8, as well as the changes in the carrying amounts of goodwill during fiscal 2023 and 2022 (in millions):
(1) Cumulative goodwill impairments were $812 million at both September 24, 2023 and September 25, 2022.
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 $435 million and $546 million at September 24, 2023 and September 25, 2022, respectively. Amortization expense related to these intangible assets was $418 million, $482 million and $537 million for fiscal 2023, 2022 and 2021, respectively. At September 24, 2023, amortization expense related to other intangible assets, including acquired in-process research and development beginning upon the completion of the underlying projects, is expected to be $296 million, $264 million, $250 million, $167 million and $139 million for each of the five years from fiscal 2024 through 2028, respectively, and $292 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). Beginning in the first quarter of fiscal 2023, QCT RFFE (radio frequency front-end) revenues, which were previously presented as a separate revenue stream, are now included within our Handsets, Automotive and internet of things (IoT) revenue streams as applicable. Prior period information has been recast to reflect this change. RFFE revenues include revenues from the sale of 4G, 5G sub 6 and 5G millimeter wave RFFE products (a substantial portion of which relate to mobile handsets) and exclude radio frequency transceiver components. This change aligns with changes made to our internal reporting of revenues. We believe this change provides a more meaningful presentation in understanding QCT revenues going forward, as we expect RFFE revenues to correspond with trends in Handsets, Automotive and IoT (as applicable) and is more consistent with how our revenue diversification is viewed externally. 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.
(2) Includes revenues from products sold for use in automobiles, including connectivity, digital cockpit and ADAS/AD.
(3) Primarily includes products sold for use in the following industries and applications: consumer (including computing, voice and music and XR), edge networking (including mobile broadband and wireless access points) and industrial (including handhelds, retail, tracking and logistics and utilities).
Revenues recognized from performance obligations satisfied (or partially satisfied) in previous periods generally include certain QCT sales-based royalty revenues related to system software, certain amounts related to QCT customer incentives and QTL royalty 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 royalties due) and were as follows (in millions):
Unearned revenues (which are considered contract liabilities) consist primarily of certain customer contracts for which QCT received fees upfront and QTL license fees for intellectual property with continuing performance obligations. In fiscal 2023 and fiscal 2022, we recognized revenues of $355 million and $609 million, respectively, that were recorded as unearned revenues at September 25, 2022 and September 26, 2021, respectively.
Remaining performance obligations, which are primarily included in unearned revenues (as presented on our consolidated balance sheet), 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.
Concentrations. A significant portion of our revenues are concentrated with a small number of customers/licensees of our QCT and QTL (Qualcomm Technology Licensing) segments. The comparability of customer/licensee concentrations for the 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%
We rely on sole- or limited-source suppliers for some products, particularly products in our QCT segment, subjecting us to possible shortages of raw materials or manufacturing capacity. The loss of a supplier or the inability of a supplier to meet performance or quality specifications or delivery schedules could harm our ability to meet our delivery obligations and/or negatively impact our revenues, business operations and ability to compete for future business.
Other Income, Costs and Expenses. in fiscal 2023 consisted of $712 million in total restructuring and restructuring-related charges (substantially all of which related to severance costs, resulting from certain cost reduction actions committed to in fiscal 2023) and a $150 million intangible asset impairment charge related to in-process research and development.
Actions associated with restructuring plans initiated in the first half of fiscal 2023 were substantially completed (including payments of the related severance) by the end of fiscal 2023. Given the continued uncertainty in the macroeconomic and demand environment, we initiated additional restructuring actions in the fourth quarter of fiscal 2023 to enable investments in key growth and diversification opportunities. These actions resulted in $385 million in accrued severance costs in the fourth quarter of fiscal 2023. We anticipate these additional actions to be substantially completed (including payments of the related severance) in the first half of fiscal 2024. We may incur additional restructuring and restructuring-related charges, as the actual amount of costs may differ from our current expectations and estimates.
In the third quarter of fiscal 2022, the General Court of the European Union issued a ruling annulling a decision made by the EC in fiscal 2018. As a result of the court’s decision, we recorded a $1.1 billion benefit to other income in fiscal 2022.
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.