Quarterly report pursuant to Section 13 or 15(d)

Segment Information

v2.4.1.9
Segment Information
 6 Months Ended
Mar. 29, 2015
Notes to Financial Statements [Abstract]  
Segment Information
Note 8 — Segment Information
The Company is organized on the basis of products and services. The Company conducts business primarily through two reportable segments: QCT (Qualcomm CDMA Technologies) and QTL (Qualcomm Technology Licensing), and its QSI (Qualcomm Strategic Initiatives) reportable segment makes strategic investments. The Company also has nonreportable segments, including its QMT (Qualcomm MEMS Technologies), Pixtronix and Small Cells divisions and other wireless technology and service initiatives.
The Company evaluates the performance of its segments based on earnings (loss) before income taxes (EBT) from continuing operations. 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 the Company’s management reports because they are not considered in evaluating the segments’ operating performance. Unallocated income and charges include certain net investment income; certain share-based compensation; 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 to fair value, amortization and impairment of certain intangible assets and certain other acquisition-related charges, and beginning in the first quarter of fiscal 2015, 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 litigation settlements and/or damages. The table below presents revenues and EBT for reportable segments (in millions):
 
QCT
 
QTL
 
QSI
 
Reconciling
Items
 
Total
For the three months ended
 
 
 
 
 
 
 
 
 
March 29, 2015
 
 
 
 
 
 
 
 
 
Revenues
$
4,434

 
$
2,414

 
$
—

 
$
46

 
$
6,894

EBT
750

 
2,162

 
(32
)
 
(1,341
)
 
1,539

March 30, 2014
 
 
 
 
 
 
 
 
 
Revenues
$
4,243

 
$
2,071

 
$
—

 
$
53

 
$
6,367

EBT
740

 
1,834

 
(39
)
 
(263
)
 
2,272

 
 
 
 
 
 
 
 
 
 
For the six months ended
 
 
 
 
 
 
 
 
 
March 29, 2015
 
 
 
 
 
 
 
 
 
Revenues
$
9,676

 
$
4,230

 
$
—

 
$
87

 
$
13,993

EBT
1,896

 
3,741

 
(33
)
 
(1,767
)
 
3,837

March 30, 2014
 
 
 
 
 
 
 
 
 
Revenues
$
8,859

 
$
3,971

 
$
—

 
$
159

 
$
12,989

EBT
1,646

 
3,504

 
(35
)
 
(1,086
)
 
4,029


Intersegment revenues included in QCT revenues were negligible in all periods presented. All other revenues for reportable segments were from external customers for all periods presented.
Reconciling items in the previous table were as follows (in millions):
 
Three Months Ended
 
Six Months Ended
 
March 29,
2015
 
March 30, 2014
 
March 29, 2015
 
March 30, 2014
Revenues
 
 
 
 
 
 
 
Nonreportable segments
$
47

 
$
53

 
$
90

 
$
162

Intersegment eliminations
(1
)
 
—

 
(3
)
 
(3
)
 
$
46

 
$
53

 
$
87

 
$
159

EBT
 
 
 
 
 
 
 
Unallocated cost of equipment and services revenues
$
(74
)
 
$
(75
)
 
$
(152
)
 
$
(148
)
Unallocated research and development expenses
(226
)
 
(217
)
 
(437
)
 
(434
)
Unallocated selling, general and administrative expenses
(100
)
 
(85
)
 
(249
)
 
(210
)
Unallocated other expense
(1,010
)
 
—

 
(1,079
)
 
(12
)
Unallocated investment income, net
232

 
314

 
462

 
571

Nonreportable segments
(163
)
 
(200
)
 
(311
)
 
(853
)
Intersegment eliminations
—

 
—

 
(1
)
 
—

 
$
(1,341
)
 
$
(263
)
 
$
(1,767
)
 
$
(1,086
)

Unallocated other expense for the six months ended March 29, 2015 included a $975 million charge related to the resolution reached with the NDRC (Note 7) and $104 million in goodwill impairment charges related to two of the Company’s nonreportable segments (Note 11). Nonreportable segments EBT for the six months ended March 30, 2014 included $444 million in impairment charges related to property, plant and equipment (Note 11).
Unallocated acquisition-related expenses were comprised as follows (in millions):
 
Three Months Ended
 
Six Months Ended
 
March 29,
2015
 
March 30,
2014
 
March 29,
2015
 
March 30,
2014
Cost of equipment and services revenues
$
63

 
$
62

 
$
129

 
$
123

Research and development expenses
3

 
22

 
8

 
23

Selling, general and administrative expenses
13

 
6

 
25

 
13


Segment assets are comprised of accounts receivable and inventories for all reportable segments other than QSI. QSI segment assets include certain marketable securities, notes receivable, wireless spectrum, other investments and all assets of consolidated subsidiaries included in QSI. Total segment assets differ from total assets on a consolidated basis as a result of unallocated corporate assets primarily comprised of certain cash, cash equivalents, marketable securities, property, plant and equipment, deferred tax assets, goodwill, other intangible assets and assets of nonreportable segments. Segment assets and reconciling items were as follows (in millions):
 
March 29,
2015
 
September 28,
2014
QCT
$
3,412

 
$
3,639

QTL
475

 
161

QSI
614

 
484

Reconciling items
42,672

 
44,290

Total consolidated assets
$
47,173

 
$
48,574