Price Graph
Price
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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
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Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
|
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95-3685934
(I.R.S. Employer
Identification No.)
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|
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5775 Morehouse Dr., San Diego, California
(Address of Principal Executive Offices)
|
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92121-1714
(Zip Code)
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Large accelerated filer
|
x
|
Accelerated filer
|
o
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Non-accelerated filer
(Do not check if a smaller reporting company)
|
o
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Smaller reporting company
|
o
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Emerging growth company
|
o
|
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Class
|
|
Number of Shares
|
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Common Stock, $0.0001 per share par value
|
|
1,480,363,298
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|
|
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Page
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||
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QUALCOMM Incorporated
|
||||
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
||||
|
(In millions, except per share data)
|
||||
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(Unaudited)
|
||||
|
|
December 24,
2017 |
|
September 24,
2017 |
||||
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ASSETS
|
|||||||
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Current assets:
|
|
|
|
||||
|
Cash and cash equivalents
|
$
|
33,362
|
|
|
$
|
35,029
|
|
|
Marketable securities
|
2,041
|
|
|
2,279
|
|
||
|
Accounts receivable, net
|
3,053
|
|
|
3,632
|
|
||
|
Inventories
|
1,872
|
|
|
2,035
|
|
||
|
Other current assets
|
638
|
|
|
618
|
|
||
|
Total current assets
|
40,966
|
|
|
43,593
|
|
||
|
Marketable securities
|
4,447
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|
|
1,270
|
|
||
|
Deferred tax assets
|
1,241
|
|
|
2,900
|
|
||
|
Property, plant and equipment, net
|
3,224
|
|
|
3,216
|
|
||
|
Goodwill
|
6,638
|
|
|
6,623
|
|
||
|
Other intangible assets, net
|
3,548
|
|
|
3,737
|
|
||
|
Other assets
|
4,287
|
|
|
4,147
|
|
||
|
Total assets
|
$
|
64,351
|
|
|
$
|
65,486
|
|
|
|
|
|
|
||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|||||||
|
Current liabilities:
|
|
|
|
||||
|
Trade accounts payable
|
$
|
1,685
|
|
|
$
|
1,971
|
|
|
Payroll and other benefits related liabilities
|
1,041
|
|
|
1,183
|
|
||
|
Unearned revenues
|
487
|
|
|
502
|
|
||
|
Short-term debt
|
3,465
|
|
|
2,495
|
|
||
|
Other current liabilities
|
5,349
|
|
|
4,756
|
|
||
|
Total current liabilities
|
12,027
|
|
|
10,907
|
|
||
|
Unearned revenues
|
1,906
|
|
|
2,003
|
|
||
|
Income taxes payable
|
3,867
|
|
|
—
|
|
||
|
Long-term debt
|
19,381
|
|
|
19,398
|
|
||
|
Other liabilities
|
3,246
|
|
|
2,432
|
|
||
|
Total liabilities
|
40,427
|
|
|
34,740
|
|
||
|
|
|
|
|
||||
|
Commitments and contingencies (Note 6)
|
|
|
|
||||
|
|
|
|
|
||||
|
Stockholders’ equity:
|
|
|
|
||||
|
Preferred stock, $0.0001 par value; 8 shares authorized; none outstanding
|
—
|
|
|
—
|
|
||
|
Common stock and paid-in capital, $0.0001 par value; 6,000 shares authorized; 1,480 and 1,474 shares issued and outstanding, respectively
|
265
|
|
|
274
|
|
||
|
Retained earnings
|
23,273
|
|
|
30,088
|
|
||
|
Accumulated other comprehensive income
|
386
|
|
|
384
|
|
||
|
Total stockholders’ equity
|
23,924
|
|
|
30,746
|
|
||
|
Total liabilities and stockholders’ equity
|
$
|
64,351
|
|
|
$
|
65,486
|
|
|
See accompanying notes.
|
||||
|
QUALCOMM Incorporated
|
||||
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||
|
(In millions, except per share data)
|
||||
|
(Unaudited)
|
||||
|
|
Three Months Ended
|
||||||
|
|
December 24,
2017 |
|
December 25,
2016 |
||||
|
Revenues:
|
|
|
|
||||
|
Equipment and services
|
$
|
4,704
|
|
|
$
|
4,139
|
|
|
Licensing
|
1,364
|
|
|
1,860
|
|
||
|
Total revenues
|
6,068
|
|
|
5,999
|
|
||
|
Costs and expenses:
|
|
|
|
||||
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Cost of revenues
|
2,663
|
|
|
2,443
|
|
||
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Research and development
|
1,420
|
|
|
1,311
|
|
||
|
Selling, general and administrative
|
773
|
|
|
591
|
|
||
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Other (Note 2)
|
1,183
|
|
|
876
|
|
||
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Total costs and expenses
|
6,039
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|
|
5,221
|
|
||
|
Operating income
|
29
|
|
|
778
|
|
||
|
Interest expense
|
(170
|
)
|
|
(90
|
)
|
||
|
Investment and other income, net (Note 2)
|
114
|
|
|
182
|
|
||
|
(Loss) income before income taxes
|
(27
|
)
|
|
870
|
|
||
|
Income tax expense (Note 3)
|
(5,926
|
)
|
|
(189
|
)
|
||
|
Net (loss) income
|
(5,953
|
)
|
|
681
|
|
||
|
Net loss attributable to noncontrolling interests
|
—
|
|
|
1
|
|
||
|
Net (loss) income attributable to Qualcomm
|
$
|
(5,953
|
)
|
|
$
|
682
|
|
|
|
|
|
|
||||
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Basic (loss) earnings per share attributable to Qualcomm
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$
|
(4.03
|
)
|
|
$
|
0.46
|
|
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Diluted (loss) earnings per share attributable to Qualcomm
|
$
|
(4.03
|
)
|
|
$
|
0.46
|
|
|
Shares used in per share calculations:
|
|
|
|
||||
|
Basic
|
1,477
|
|
|
1,478
|
|
||
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Diluted
|
1,477
|
|
|
1,495
|
|
||
|
|
|
|
|
||||
|
Dividends per share announced
|
$
|
0.57
|
|
|
$
|
0.53
|
|
|
See accompanying notes.
|
||||
|
QUALCOMM Incorporated
|
||||
|
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
|
||||
|
(In millions)
|
||||
|
(Unaudited)
|
||||
|
|
Three Months Ended
|
||||||
|
|
December 24,
2017 |
|
December 25,
2016 |
||||
|
Net (loss) income
|
$
|
(5,953
|
)
|
|
$
|
681
|
|
|
Other comprehensive income (loss), net of income taxes:
|
|
|
|
||||
|
Foreign currency translation losses
|
(5
|
)
|
|
(27
|
)
|
||
|
Noncredit other-than-temporary impairment losses related to certain available-for-sale debt securities and subsequent changes in fair value
|
—
|
|
|
6
|
|
||
|
Reclassification of net other-than-temporary losses on available-for-sale securities included in net (loss) income
|
1
|
|
|
79
|
|
||
|
Net unrealized gains (losses) on other available-for-sale securities
|
4
|
|
|
(210
|
)
|
||
|
Reclassification of net realized gains on available-for-sale securities included in net (loss) income
|
(1
|
)
|
|
(92
|
)
|
||
|
Net unrealized gains on derivative instruments
|
2
|
|
|
2
|
|
||
|
Reclassification of net realized losses on derivative instruments
|
1
|
|
|
—
|
|
||
|
Total other comprehensive income (loss)
|
2
|
|
|
(242
|
)
|
||
|
Total comprehensive (loss) income
|
(5,951
|
)
|
|
439
|
|
||
|
Comprehensive loss attributable to noncontrolling interests
|
—
|
|
|
1
|
|
||
|
Comprehensive (loss) income attributable to Qualcomm
|
$
|
(5,951
|
)
|
|
$
|
440
|
|
|
See accompanying notes.
|
||||
|
QUALCOMM Incorporated
|
||||
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||
|
(In millions)
|
||||
|
(Unaudited)
|
||||
|
|
Three Months Ended
|
||||||
|
|
December 24,
2017 |
|
December 25,
2016 |
||||
|
Operating Activities:
|
|
|
|
||||
|
Net (loss) income
|
$
|
(5,953
|
)
|
|
$
|
681
|
|
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
|
|
|
||||
|
Depreciation and amortization expense
|
363
|
|
|
329
|
|
||
|
Indefinite and long-lived asset impairment charges
|
—
|
|
|
32
|
|
||
|
Income tax provision in excess of (less than) income tax payments (Note 3)
|
5,697
|
|
|
(113
|
)
|
||
|
Non-cash portion of share-based compensation expense
|
248
|
|
|
239
|
|
||
|
Net realized gains on marketable securities and other investments
|
(23
|
)
|
|
(147
|
)
|
||
|
Impairment losses on marketable securities and other investments
|
9
|
|
|
143
|
|
||
|
Other items, net
|
57
|
|
|
(4
|
)
|
||
|
Changes in assets and liabilities:
|
|
|
|
||||
|
Accounts receivable, net
|
581
|
|
|
131
|
|
||
|
Inventories
|
162
|
|
|
(354
|
)
|
||
|
Other assets
|
(56
|
)
|
|
(16
|
)
|
||
|
Trade accounts payable
|
(248
|
)
|
|
(208
|
)
|
||
|
Payroll, benefits and other liabilities
|
1,000
|
|
|
957
|
|
||
|
Unearned revenues
|
(75
|
)
|
|
(84
|
)
|
||
|
Net cash provided by operating activities
|
1,762
|
|
|
1,586
|
|
||
|
Investing Activities:
|
|
|
|
||||
|
Capital expenditures
|
(226
|
)
|
|
(129
|
)
|
||
|
Purchases of available-for-sale marketable securities
|
(5,627
|
)
|
|
(4,117
|
)
|
||
|
Proceeds from sales and maturities of available-for-sale securities
|
2,704
|
|
|
6,891
|
|
||
|
Deposits of investments designated as collateral
|
—
|
|
|
(1,950
|
)
|
||
|
Acquisitions and other investments, net of cash acquired
|
(122
|
)
|
|
(57
|
)
|
||
|
Other items, net
|
10
|
|
|
43
|
|
||
|
Net cash (used) provided by investing activities
|
(3,261
|
)
|
|
681
|
|
||
|
Financing Activities:
|
|
|
|
||||
|
Proceeds from short-term debt
|
2,116
|
|
|
2,727
|
|
||
|
Repayment of short-term debt
|
(1,149
|
)
|
|
(2,727
|
)
|
||
|
Proceeds from issuance of common stock
|
134
|
|
|
131
|
|
||
|
Repurchases and retirements of common stock
|
(225
|
)
|
|
(444
|
)
|
||
|
Dividends paid
|
(844
|
)
|
|
(784
|
)
|
||
|
Payments of tax withholdings related to vesting of share-based awards
|
(192
|
)
|
|
(172
|
)
|
||
|
Other items, net
|
(5
|
)
|
|
(42
|
)
|
||
|
Net cash used by financing activities
|
(165
|
)
|
|
(1,311
|
)
|
||
|
Effect of exchange rate changes on cash and cash equivalents
|
(3
|
)
|
|
(17
|
)
|
||
|
Net (decrease) increase in cash and cash equivalents
|
(1,667
|
)
|
|
939
|
|
||
|
Cash and cash equivalents at beginning of period
|
35,029
|
|
|
5,946
|
|
||
|
Cash and cash equivalents at end of period
|
$
|
33,362
|
|
|
$
|
6,885
|
|
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
|
Three Months Ended
|
||||
|
|
December 24,
2017 |
|
December 25,
2016 |
||
|
Dilutive common share equivalents included in diluted shares
|
—
|
|
|
17.0
|
|
|
Shares of common stock equivalents not included because the effect would be anti-dilutive or certain performance conditions were not satisfied at the end of the period
|
46.0
|
|
|
0.1
|
|
|
|
Three Months Ended
|
||||||
|
|
December 24,
2017 |
|
December 25,
2016 |
||||
|
Cost of revenues
|
$
|
10
|
|
|
$
|
9
|
|
|
Research and development
|
156
|
|
|
153
|
|
||
|
Selling, general and administrative
|
82
|
|
|
77
|
|
||
|
Share-based compensation expense before income taxes
|
248
|
|
|
239
|
|
||
|
Related income tax benefit
|
(49
|
)
|
|
(49
|
)
|
||
|
|
$
|
199
|
|
|
$
|
190
|
|
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
Inventories (in millions)
|
|
|
|
||||
|
|
December 24,
2017 |
|
September 24,
2017 |
||||
|
Raw materials
|
$
|
96
|
|
|
$
|
103
|
|
|
Work-in-process
|
712
|
|
|
799
|
|
||
|
Finished goods
|
1,064
|
|
|
1,133
|
|
||
|
|
$
|
1,872
|
|
|
$
|
2,035
|
|
|
Other Current Liabilities (in millions)
|
|
|
|
||||
|
|
December 24,
2017 |
|
September 24,
2017 |
||||
|
Customer incentives and other customer-related liabilities
|
$
|
2,989
|
|
|
$
|
2,804
|
|
|
Accrual for EC fine (Note 6)
|
1,183
|
|
|
—
|
|
||
|
Accrual for TFTC fine (Note 6)
|
156
|
|
|
778
|
|
||
|
Other
|
1,021
|
|
|
1,174
|
|
||
|
|
$
|
5,349
|
|
|
$
|
4,756
|
|
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
Investment and Other Income, Net (in millions)
|
|
|
|
||||
|
|
Three Months Ended
|
||||||
|
|
December 24,
2017 |
|
December 25,
2016 |
||||
|
Interest and dividend income
|
$
|
126
|
|
|
$
|
167
|
|
|
Net realized gains on marketable securities
|
10
|
|
|
139
|
|
||
|
Net realized gains on other investments
|
13
|
|
|
8
|
|
||
|
Impairment losses on marketable securities
|
(1
|
)
|
|
(122
|
)
|
||
|
Impairment losses on other investments
|
(8
|
)
|
|
(21
|
)
|
||
|
Net (losses) gains on derivative investments
|
(1
|
)
|
|
8
|
|
||
|
Equity in net (losses) earnings of investees
|
(21
|
)
|
|
3
|
|
||
|
Net losses on foreign currency transactions
|
(4
|
)
|
|
—
|
|
||
|
|
$
|
114
|
|
|
$
|
182
|
|
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
|
Total Stockholders’ Equity
|
||
|
Balance at September 24, 2017
|
$
|
30,746
|
|
|
Net loss
|
(5,953
|
)
|
|
|
Other comprehensive income
|
2
|
|
|
|
Common stock issued under employee benefit plans and related tax benefits
|
142
|
|
|
|
Share-based compensation
|
266
|
|
|
|
Tax withholdings related to vesting of share-based payments
|
(192
|
)
|
|
|
Dividends
|
(862
|
)
|
|
|
Stock repurchases
|
(225
|
)
|
|
|
Balance at December 24, 2017
|
$
|
23,924
|
|
|
|
Foreign Currency Translation Adjustment
|
|
Noncredit Other-than-Temporary Impairment Losses and Subsequent Changes in Fair Value for Certain Available-for-Sale Debt Securities
|
|
Net Unrealized Gain (Loss) on Other Available-for-Sale Securities
|
|
Net Unrealized (Loss) Gain on Derivative Instruments
|
|
Other Gains
|
|
Total Accumulated Other Comprehensive Income
|
||||||||||||
|
Balance at September 24, 2017
|
$
|
147
|
|
|
$
|
23
|
|
|
$
|
218
|
|
|
$
|
(8
|
)
|
|
$
|
4
|
|
|
$
|
384
|
|
|
Other comprehensive income (loss) before reclassifications
|
(5
|
)
|
|
—
|
|
|
4
|
|
|
2
|
|
|
—
|
|
|
1
|
|
||||||
|
Reclassifications from accumulated other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||
|
Other comprehensive income (loss)
|
(5
|
)
|
|
—
|
|
|
4
|
|
|
3
|
|
|
—
|
|
|
2
|
|
||||||
|
Balance at December 24, 2017
|
$
|
142
|
|
|
$
|
23
|
|
|
$
|
222
|
|
|
$
|
(5
|
)
|
|
$
|
4
|
|
|
$
|
386
|
|
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
|
|
December 24, 2017
|
|
September 24, 2017
|
||||||||
|
|
|
Amount
|
|
Effective
Rate
|
|
Amount
|
|
Effective
Rate
|
||||
|
May 2015 Notes
|
|
|
|
|
|
|
|
|||||
|
|
Floating-rate three-month LIBOR plus 0.27% notes due May 18, 2018
|
$
|
250
|
|
|
1.77%
|
|
$
|
250
|
|
|
1.65%
|
|
|
Floating-rate three-month LIBOR plus 0.55% notes due May 20, 2020
|
250
|
|
|
2.04%
|
|
250
|
|
|
1.92%
|
||
|
|
Fixed-rate 1.40% notes due May 18, 2018
|
1,250
|
|
|
2.22%
|
|
1,250
|
|
|
1.93%
|
||
|
|
Fixed-rate 2.25% notes due May 20, 2020
|
1,750
|
|
|
2.40%
|
|
1,750
|
|
|
2.20%
|
||
|
|
Fixed-rate 3.00% notes due May 20, 2022
|
2,000
|
|
|
2.88%
|
|
2,000
|
|
|
2.65%
|
||
|
|
Fixed-rate 3.45% notes due May 20, 2025
|
2,000
|
|
|
3.46%
|
|
2,000
|
|
|
3.46%
|
||
|
|
Fixed-rate 4.65% notes due May 20, 2035
|
1,000
|
|
|
4.74%
|
|
1,000
|
|
|
4.74%
|
||
|
|
Fixed-rate 4.80% notes due May 20, 2045
|
1,500
|
|
|
4.71%
|
|
1,500
|
|
|
4.71%
|
||
|
May 2017 Notes
|
|
|
|
|
|
|
|
|||||
|
|
Floating-rate three-month LIBOR plus 0.36% notes due May 20, 2019
|
750
|
|
|
1.92%
|
|
750
|
|
|
1.80%
|
||
|
|
Floating-rate three-month LIBOR plus 0.45% notes due May 20, 2020
|
500
|
|
|
1.98%
|
|
500
|
|
|
1.86%
|
||
|
|
Floating-rate three-month LIBOR plus 0.73% notes due January 30, 2023
|
500
|
|
|
2.17%
|
|
500
|
|
|
2.11%
|
||
|
|
Fixed-rate 1.85% notes due May 20, 2019
|
1,250
|
|
|
2.00%
|
|
1,250
|
|
|
2.00%
|
||
|
|
Fixed-rate 2.10% notes due May 20, 2020
|
1,500
|
|
|
2.19%
|
|
1,500
|
|
|
2.19%
|
||
|
|
Fixed-rate 2.60% notes due January 30, 2023
|
1,500
|
|
|
2.70%
|
|
1,500
|
|
|
2.70%
|
||
|
|
Fixed-rate 2.90% notes due May 20, 2024
|
1,500
|
|
|
3.01%
|
|
1,500
|
|
|
3.01%
|
||
|
|
Fixed-rate 3.25% notes due May 20, 2027
|
2,000
|
|
|
3.46%
|
|
2,000
|
|
|
3.46%
|
||
|
|
Fixed-rate 4.30% notes due May 20, 2047
|
1,500
|
|
|
4.47%
|
|
1,500
|
|
|
4.47%
|
||
|
Total principal
|
21,000
|
|
|
|
|
21,000
|
|
|
|
|||
|
|
Unamortized discount, including debt issuance costs
|
(102
|
)
|
|
|
|
(106
|
)
|
|
|
||
|
|
Hedge accounting fair value adjustments
|
(20
|
)
|
|
|
|
—
|
|
|
|
||
|
|
Total
|
$
|
20,878
|
|
|
|
|
$
|
20,894
|
|
|
|
|
Reported as:
|
|
|
|
|
|
|
|
|||||
|
|
Short-term debt
|
$
|
1,497
|
|
|
|
|
$
|
1,496
|
|
|
|
|
|
Long-term debt
|
19,381
|
|
|
|
|
19,398
|
|
|
|
||
|
|
Total
|
$
|
20,878
|
|
|
|
|
$
|
20,894
|
|
|
|
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
|
Integrated Circuit Purchase Obligations
|
|
Other Purchase Obligations
|
|
Operating Leases
|
||||||
|
Remainder of fiscal 2018
|
$
|
2,946
|
|
|
$
|
884
|
|
|
$
|
85
|
|
|
2019
|
846
|
|
|
241
|
|
|
105
|
|
|||
|
2020
|
272
|
|
|
159
|
|
|
79
|
|
|||
|
2021
|
71
|
|
|
56
|
|
|
59
|
|
|||
|
2022
|
26
|
|
|
11
|
|
|
39
|
|
|||
|
Thereafter
|
—
|
|
|
3
|
|
|
18
|
|
|||
|
Total
|
$
|
4,161
|
|
|
$
|
1,354
|
|
|
$
|
385
|
|
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
|
Three Months Ended
|
||||||
|
|
December 24,
2017 |
|
December 25,
2016 |
||||
|
Revenues
|
|
|
|
||||
|
QCT
|
$
|
4,651
|
|
|
$
|
4,101
|
|
|
QTL
|
1,299
|
|
|
1,811
|
|
||
|
QSI
|
30
|
|
|
14
|
|
||
|
Reconciling items
|
88
|
|
|
73
|
|
||
|
Total
|
$
|
6,068
|
|
|
$
|
5,999
|
|
|
EBT
|
|
|
|
||||
|
QCT
|
$
|
955
|
|
|
$
|
724
|
|
|
QTL
|
887
|
|
|
1,532
|
|
||
|
QSI
|
11
|
|
|
(17
|
)
|
||
|
Reconciling items
|
(1,880
|
)
|
|
(1,369
|
)
|
||
|
Total
|
$
|
(27
|
)
|
|
$
|
870
|
|
|
|
|
|
|
||||
|
|
December 24,
2017 |
|
September 24,
2017 |
||||
|
Assets
|
|
|
|
||||
|
QCT
|
$
|
3,134
|
|
|
$
|
3,830
|
|
|
QTL
|
1,693
|
|
|
1,735
|
|
||
|
QSI
|
1,159
|
|
|
1,037
|
|
||
|
Reconciling items
|
58,365
|
|
|
58,884
|
|
||
|
Total
|
$
|
64,351
|
|
|
$
|
65,486
|
|
|
|
Three Months Ended
|
||||||
|
|
December 24,
2017 |
|
December 25,
2016 |
||||
|
Revenues
|
|
|
|
||||
|
Nonreportable segments
|
$
|
88
|
|
|
$
|
73
|
|
|
|
$
|
88
|
|
|
$
|
73
|
|
|
EBT
|
|
|
|
||||
|
Unallocated cost of revenues
|
$
|
(117
|
)
|
|
$
|
(95
|
)
|
|
Unallocated research and development expenses
|
(280
|
)
|
|
(269
|
)
|
||
|
Unallocated selling, general and administrative expenses
|
(161
|
)
|
|
(145
|
)
|
||
|
Unallocated other expenses
|
(1,183
|
)
|
|
(876
|
)
|
||
|
Unallocated interest expense
|
(170
|
)
|
|
(89
|
)
|
||
|
Unallocated investment and other income, net
|
124
|
|
|
184
|
|
||
|
Nonreportable segments
|
(93
|
)
|
|
(79
|
)
|
||
|
|
$
|
(1,880
|
)
|
|
$
|
(1,369
|
)
|
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
|
Three Months Ended
|
||||||
|
|
December 24,
2017 |
|
December 25,
2016 |
||||
|
Cost of revenues
|
$
|
106
|
|
|
$
|
84
|
|
|
Research and development expenses
|
2
|
|
|
3
|
|
||
|
Selling, general and administrative expenses
|
76
|
|
|
61
|
|
||
|
Cash paid to TDK at close
|
$
|
1,463
|
|
|
Fair value of Put and Call Option
|
1,112
|
|
|
|
Fair value of contingent consideration and other deferred payments
|
496
|
|
|
|
Total purchase price
|
$
|
3,071
|
|
|
Cash and cash equivalents
|
$
|
306
|
|
|
Accounts receivable
|
303
|
|
|
|
Inventories
|
260
|
|
|
|
Intangible assets subject to amortization:
|
|
||
|
Technology-based intangible assets
|
738
|
|
|
|
Customer-related intangible assets
|
87
|
|
|
|
Marketing-related intangible assets
|
8
|
|
|
|
In-process research and development (IPR&D)
|
75
|
|
|
|
Property, plant and equipment
|
821
|
|
|
|
Goodwill
|
843
|
|
|
|
Other assets
|
31
|
|
|
|
Total assets
|
3,472
|
|
|
|
Liabilities
|
(401
|
)
|
|
|
|
$
|
3,071
|
|
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
Assets
|
|
|
|
|
|
|
|
||||||||
|
Cash equivalents
|
$
|
30,384
|
|
|
$
|
1,874
|
|
|
$
|
—
|
|
|
$
|
32,258
|
|
|
Marketable securities:
|
|
|
|
|
|
|
|
||||||||
|
U.S. Treasury securities and government-related securities
|
4,419
|
|
|
4
|
|
|
—
|
|
|
4,423
|
|
||||
|
Corporate bonds and notes
|
—
|
|
|
1,775
|
|
|
—
|
|
|
1,775
|
|
||||
|
Mortgage- and asset-backed and auction rate securities
|
—
|
|
|
95
|
|
|
38
|
|
|
133
|
|
||||
|
Equity and preferred securities and equity funds
|
42
|
|
|
—
|
|
|
—
|
|
|
42
|
|
||||
|
Debt funds
|
—
|
|
|
112
|
|
|
—
|
|
|
112
|
|
||||
|
Total marketable securities
|
4,461
|
|
|
1,986
|
|
|
38
|
|
|
6,485
|
|
||||
|
Derivative instruments
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
||||
|
Other investments
|
412
|
|
|
—
|
|
|
141
|
|
|
553
|
|
||||
|
Total assets measured at fair value
|
$
|
35,257
|
|
|
$
|
3,868
|
|
|
$
|
179
|
|
|
$
|
39,304
|
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
|
Derivative instruments
|
$
|
—
|
|
|
$
|
37
|
|
|
$
|
—
|
|
|
$
|
37
|
|
|
Other liabilities
|
412
|
|
|
—
|
|
|
195
|
|
|
607
|
|
||||
|
Total liabilities measured at fair value
|
$
|
412
|
|
|
$
|
37
|
|
|
$
|
195
|
|
|
$
|
644
|
|
|
|
Current
|
|
Noncurrent
|
||||||||||||
|
|
December 24,
2017 |
|
September 24,
2017 |
|
December 24,
2017 |
|
September 24,
2017 |
||||||||
|
Available-for-sale:
|
|
|
|
|
|
|
|
||||||||
|
U.S. Treasury securities and government-related securities
|
$
|
14
|
|
|
$
|
23
|
|
|
$
|
4,409
|
|
|
$
|
959
|
|
|
Corporate bonds and notes
|
1,775
|
|
|
2,014
|
|
|
—
|
|
|
271
|
|
||||
|
Mortgage- and asset-backed and auction rate securities
|
95
|
|
|
93
|
|
|
38
|
|
|
40
|
|
||||
|
Equity and preferred securities and equity funds
|
42
|
|
|
36
|
|
|
—
|
|
|
—
|
|
||||
|
Debt funds
|
112
|
|
|
109
|
|
|
—
|
|
|
—
|
|
||||
|
Total available-for-sale
|
2,038
|
|
|
2,275
|
|
|
4,447
|
|
|
1,270
|
|
||||
|
Time deposits
|
3
|
|
|
4
|
|
|
—
|
|
|
—
|
|
||||
|
Total marketable securities
|
$
|
2,041
|
|
|
$
|
2,279
|
|
|
$
|
4,447
|
|
|
$
|
1,270
|
|
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
|
December 24,
2017 |
||
|
Years to Maturity
|
|
||
|
Less than one year
|
$
|
5,151
|
|
|
One to five years
|
1,047
|
|
|
|
Five to ten years
|
—
|
|
|
|
Greater than ten years
|
—
|
|
|
|
No single maturity date
|
245
|
|
|
|
Total
|
$
|
6,443
|
|
|
|
For the three months ended
|
||||||
|
|
December 24,
2017 |
|
December 25,
2016 |
||||
|
Gross realized gains
|
$
|
2
|
|
|
$
|
248
|
|
|
Gross realized losses
|
—
|
|
|
(109
|
)
|
||
|
Net realized gains
|
$
|
2
|
|
|
$
|
139
|
|
|
|
December 24, 2017
|
|
September 24, 2017
|
||||
|
Equity securities
|
|
|
|
||||
|
Cost
|
$
|
8
|
|
|
$
|
8
|
|
|
Unrealized gains
|
34
|
|
|
28
|
|
||
|
Unrealized losses
|
—
|
|
|
—
|
|
||
|
Fair value
|
42
|
|
|
36
|
|
||
|
Debt securities (including debt funds)
|
|
|
|
||||
|
Cost
|
6,432
|
|
|
3,497
|
|
||
|
Unrealized gains
|
14
|
|
|
13
|
|
||
|
Unrealized losses
|
(3
|
)
|
|
(1
|
)
|
||
|
Fair value
|
6,443
|
|
|
3,509
|
|
||
|
|
$
|
6,485
|
|
|
$
|
3,545
|
|
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
•
|
The transition of wireless networks and devices to 3G/4G (CDMA single-mode, OFDMA single-mode and CDMA/OFDMA multi-mode) continued around the world. 3G/4G connections grew sequentially by approximately 4% to approximately 4.8 billion, which was approximately 62% of total mobile connections at the end of the first quarter of fiscal 2018.
(1)
|
|
•
|
We continue to invest significant resources toward advancements primarily in support of 4G- and 5G-based technologies as well as other technologies to extend the demand for our products and generate new or expanded licensing opportunities, including within adjacent industry segments outside traditional cellular industries, such as automotive, the Internet of Things (IoT) and networking.
|
|
•
|
QCT results were positively impacted by higher modem sales for the new iPhone product launch and results from our RF360 Holdings joint venture, which was formed in the second quarter of fiscal 2017.
|
|
•
|
QTL results were negatively impacted by our continued dispute with Apple and its contract manufacturers (who are Qualcomm licensees), as well as the previously disclosed dispute with another licensee. We did not record any revenues in the
first
quarter of
fiscal 2018
for royalties due on sales of Apple’s or the other licensee’s products.
|
|
•
|
On December 22, 2017, tax reform legislation known as the Tax Cuts and Jobs Act (the Tax Legislation) was enacted in the United States (U.S.). As a result of such enactment, net loss for the
first
quarter of
fiscal 2018
included an estimated
$6.0 billion
charge to income tax expense comprised of a one-time tax on deemed repatriated earnings and profits of U.S.-owned foreign subsidiaries (the Toll Charge) of
$5.3 billion
,a charge of
$562 million
resulting from the remeasurement of deferred tax assets and liabilities that existed at the end of fiscal 2017 at a lower enacted corporate tax rate and
$86 million
resulting from our decision to no longer indefinitely reinvest certain foreign earnings. We currently estimate that we will pay
$3.3 billion
for the Toll Charge, after application of certain tax credits (including those that are expected to be generated in fiscal 2018), which is payable in installments over eight years beginning on January 15, 2019. Such amounts are subject to change, possibly materially, during a
|
|
•
|
On January 24, 2018, the European Commission (EC) issued a decision finding that certain terms of an agreement with a customer violate European Union competition law and imposed a fine of approximately
997 million
Euros (approximately
$1.2 billion
based on the exchange rate at December 24, 2017), which was recorded as a charge to other expenses in the first quarter of fiscal 2018. We intend to appeal the EC’s decision to the General Court of the European Union.
|
|
(1)
|
According to GSMA Intelligence estimates as of
January 29, 2018
(estimates excluded Wireless Local Loop).
|
|
Revenues (in millions)
|
|||||||||||
|
|
Three Months Ended
|
||||||||||
|
|
December 24,
2017 |
|
December 25,
2016 |
|
Change
|
||||||
|
Equipment and services
|
$
|
4,704
|
|
|
$
|
4,139
|
|
|
$
|
565
|
|
|
Licensing
|
1,364
|
|
|
1,860
|
|
|
(496
|
)
|
|||
|
|
$
|
6,068
|
|
|
$
|
5,999
|
|
|
$
|
69
|
|
|
Costs and Expenses (in millions)
|
|||||||||||
|
|
Three Months Ended
|
||||||||||
|
|
December 24,
2017 |
|
December 25,
2016 |
|
Change
|
||||||
|
Cost of revenues
|
$
|
2,663
|
|
|
$
|
2,443
|
|
|
$
|
220
|
|
|
Gross margin
|
56
|
%
|
|
59
|
%
|
|
|
||||
|
|
Three Months Ended
|
||||||||||
|
|
December 24,
2017 |
|
December 25,
2016 |
|
Change
|
||||||
|
Research and development
|
$
|
1,420
|
|
|
$
|
1,311
|
|
|
$
|
109
|
|
|
% of revenues
|
23
|
%
|
|
22
|
%
|
|
|
||||
|
Selling, general and administrative
|
$
|
773
|
|
|
$
|
591
|
|
|
$
|
182
|
|
|
% of revenues
|
13
|
%
|
|
10
|
%
|
|
|
||||
|
Other
|
$
|
1,183
|
|
|
$
|
876
|
|
|
$
|
307
|
|
|
Interest Expense and Investment and Other Income, Net (in millions)
|
|||||||||||
|
|
Three Months Ended
|
||||||||||
|
|
December 24,
2017 |
|
December 25,
2016 |
|
Change
|
||||||
|
Interest expense
|
$
|
170
|
|
|
$
|
90
|
|
|
$
|
80
|
|
|
|
|
|
|
|
|
||||||
|
Investment and other income, net
|
|
|
|
|
|
||||||
|
Interest and dividend income
|
$
|
126
|
|
|
$
|
167
|
|
|
$
|
(41
|
)
|
|
Net realized gains on marketable securities
|
10
|
|
|
139
|
|
|
(129
|
)
|
|||
|
Net realized gains on other investments
|
13
|
|
|
8
|
|
|
5
|
|
|||
|
Impairment losses on marketable securities and other investments
|
(9
|
)
|
|
(143
|
)
|
|
134
|
|
|||
|
Equity in net (losses) earnings of investees
|
(21
|
)
|
|
3
|
|
|
(24
|
)
|
|||
|
Net losses on foreign currency transactions
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|||
|
Net (losses) gains on derivative instruments
|
(1
|
)
|
|
8
|
|
|
(9
|
)
|
|||
|
|
$
|
114
|
|
|
$
|
182
|
|
|
$
|
(68
|
)
|
|
Income Tax Expense (in millions)
|
|||||||||||
|
|
Three Months Ended
|
||||||||||
|
|
December 24, 2017
|
|
December 25, 2016
|
|
Change
|
||||||
|
Income tax expense
|
$
|
5,926
|
|
|
$
|
189
|
|
|
$
|
5,737
|
|
|
Effective tax rate
|
N/M
|
|
22
|
%
|
|
N/M
|
|||||
|
|
Three Months Ended
|
||||||
|
(in millions)
|
December 24,
2017 |
|
December 25,
2016 |
||||
|
Revenues
|
|
|
|
||||
|
QCT
|
$
|
4,651
|
|
|
$
|
4,101
|
|
|
QTL
|
1,299
|
|
|
1,811
|
|
||
|
QSI
|
30
|
|
|
14
|
|
||
|
EBT (1)
|
|
|
|
||||
|
QCT
|
$
|
955
|
|
|
$
|
724
|
|
|
QTL
|
887
|
|
|
1,532
|
|
||
|
QSI
|
11
|
|
|
(17
|
)
|
||
|
EBT as a % of revenues
|
|
|
|
||||
|
QCT
|
21
|
%
|
|
18
|
%
|
||
|
QTL
|
68
|
%
|
|
85
|
%
|
||
|
(1)
|
Earnings (loss) before taxes.
|
|
•
|
On November 6, 2017, Broadcom Limited (Broadcom) announced an unsolicited proposal (the Proposed Transaction) to acquire all of the outstanding shares of our common stock for per share consideration of $70.00, consisting of $60.00 in cash and $10.00 in Broadcom shares. On November 12, 2017, following a comprehensive review conducted in consultation with financial and legal advisors, our Board of Directors unanimously rejected the Proposed Transaction, concluding that it dramatically undervalues the Company. Following our announcement on November 13, 2017, Broadcom announced that it remains fully committed to pursuing its acquisition of Qualcomm for the consideration offered on November 6, 2017. Additionally, on December 11, 2017, Broadcom filed preliminary proxy materials with the Securities and Exchange Commission in connection with its planned solicitation of proxies to elect 11 nominees to our Board of Directors at our 2018 Annual Meeting of Stockholders to be held on March 6, 2018. On December 22, 2017, we announced that our Board of Directors, following the recommendation of the Board’s Governance Committee, unanimously determined not to nominate any of the 11 candidates assembled by Broadcom to replace our current directors. Responding to the Proposed Transaction has required, and may continue to require, that we devote significant resources and management time and attention and incur additional expenses and costs.
|
|
•
|
On
October 27, 2016
, we announced a definitive agreement under which Qualcomm River Holdings, B.V., an indirect, wholly owned subsidiary of QUALCOMM Incorporated, will acquire NXP Semiconductors N.V. (NXP). Pursuant to the definitive agreement, Qualcomm River Holdings has commenced a tender offer to acquire all of the issued and outstanding common shares of NXP for
$110
per share in cash, for estimated total cash consideration to be paid to NXP’s shareholders of
$38 billion
. NXP is a leader in high-performance, mixed-signal semiconductor electronics in automotive, broad-based microcontrollers, secure identification, network processing and RF power products. The transaction is subject to receipt of regulatory clearance under applicable laws and other closing conditions, including the tender of at least
80%
of the issued and outstanding common shares of NXP in the offer (provided that the minimum tender threshold may be reduced to a percentage not less than
70%
with the prior written consent of NXP). The transaction is expected to close in early 2018. We intend to fund the transaction with cash generated from our May 2017 debt offering as well as cash, cash equivalents and marketable securities held by our foreign entities and use of a Term Loan, which we expect to draw on at close. We expect that this acquisition will continue to require us to devote significant resources and management time and attention and utilize a substantial portion of our cash, cash equivalents and marketable securities.
|
|
•
|
On January 16, 2018, we announced a cost reduction plan designed to align our cost structure to our long-term margin targets. As part of this plan, we will implement a series of targeted reductions across our businesses to reduce annual costs by
$1 billion
, excluding incremental costs resulting from any future acquisition of a business. We expect these cost reductions to be fully captured in fiscal 2019. We are in the process of finalizing our plan, as well as the restructuring and restructuring-related costs we expect to incur to execute our plan.
|
|
•
|
Regulatory authorities in certain jurisdictions continue to investigate our business practices, and other regulatory authorities may do so in the future. Unfavorable resolutions of one or more of these matters have had and could in the future have a material adverse effect on our business with remedies that include, among others, injunctions, monetary damages or fines or other orders to pay money, and the issuance of orders to cease certain conduct and/or modify our business practices. Additionally, certain of our direct and indirect customers and licensees, including Apple, have pursued, and others may in the future pursue, litigation or arbitration against us related to our business. Unfavorable resolutions of one or more of these matters have had and could in the future have a material adverse effect on our business, including monetary damages. These activities have required, and we expect that they will continue to require, the investment of significant management time and attention and have resulted, and we expect that they will continue to result, in increased legal costs. See “Notes to Condensed Consolidated Financial Statements, Note 6. Commitments and Contingencies” included in this Quarterly Report.
|
|
•
|
We are currently in dispute with Apple surrounding what we believe is an attempt by Apple to reduce the amount of royalties that its contract manufacturers (who are Qualcomm licensees) are required to pay to us for use of our intellectual property. Such contract manufacturers did not fully report and did not pay royalties due on sales of Apple products. We have taken action against Apple’s contract manufacturers, to compel such licensees to pay the required royalties, and against Apple, as described more fully elsewhere in this Quarterly Report in “Notes to Condensed Consolidated Financial Statements, Note 6.” Additionally, the other licensee in dispute did not report or pay royalties due in the first quarter of fiscal 2018. We did not record any revenues in the first quarter of fiscal 2018 for royalties due on sales of Apple’s or the other licensee’s products, and as a result, QTL revenues and EBT were negatively impacted by these continued disputes. We expect these companies will continue to take such actions in the future, resulting in increased legal costs and negatively impacting our future revenues, as well as our financial condition, results of operations and cash flows until the respective disputes are resolved
.
|
|
•
|
We continue to believe that certain licensees, particularly in China, are not fully complying with their contractual obligations to report their sales of licensed products to us, and certain companies, including unlicensed companies, particularly in emerging regions, including China, are delaying execution of new license agreements. We have made substantial progress in reaching agreements with many companies, primarily in China. However, negotiations with certain licensees and unlicensed companies are ongoing. We believe that the conclusion of new agreements with these companies will result in improved reporting. Additionally, we believe our increased efforts in the areas of compliance will improve reporting but will also result in increased costs to the business. Litigation and/or other actions, such as those recently taken against Apple and its contract manufacturers, may be necessary to compel licensees to report and pay the required royalties for sales they have not previously reported and/or to compel unlicensed companies to execute licenses. Such litigation or other actions would result in increased legal costs.
|
|
•
|
We expect our business, particularly QCT, to continue to be impacted by industry dynamics, including:
|
|
•
|
Concentration of device share among a few companies within the premium tier, resulting in significant supply chain leverage for those companies;
|
|
•
|
Decisions by companies to utilize their own internally-developed integrated circuit products and/or sell such products to others, including by bundling with other products, increasing competition;
|
|
•
|
Decisions by certain companies to utilize our competitors’ integrated circuit products in all or a portion of their devices. For example, commencing with the iPhone 7 (which was released in September 2016), we are no longer the sole supplier of modems for new iPhone product launches, as Apple utilizes modems from one of our competitors in a portion of such devices. We expect that in the future Apple will utilize our competitors’ modems in a portion of (or potentially all) iPhones. Accordingly, QCT revenues from modem sales for iPhones declined in fiscal 2017 and may continue to decline in the future, in part depending on the extent of Apple’s utilization of competitors’ modems and the mix of the various versions of its products that are sold. Overall QCT revenues, as well as profitability, may similarly decline unless offset by sales of integrated circuit products to other customers, including those outside of traditional cellular industries, such as the Internet of Things (IoT), automotive and networking. Apple’s dual sourcing does not impact our licensing revenues since our licensing revenues from Apple products are not dependent upon whether such products include our chipsets;
|
|
•
|
Intense competition, particularly in China, as our competitors expand their product offerings and/or reduce the prices of their products as part of a strategy to attract new and/or retain existing customers;
|
|
•
|
Lengthening replacement cycles in developed regions, where the smartphone industry is mature, premium-tier smartphones are common and consumer demand is increasingly driven by new product launches and/or innovation cycles;
|
|
•
|
Lengthening replacement cycles in emerging regions as smartphone penetration increases; and
|
|
•
|
Increasing consumer demand for 3G/4G smartphone products in emerging regions driven by availability of lower-tier 3G/4G devices.
|
|
•
|
We expect the ongoing rollout of 4G services in emerging regions will encourage competition and growth, bringing the benefits of 3G/4G LTE multi-mode to consumers.
|
|
•
|
We continue to invest significant resources toward advancements in 4G and 5G technologies, OFDM-based WLAN technologies, wireless baseband chips, our converged computing/communications (Snapdragon) chips, radio frequency front-end (RFFE), connectivity, power management, graphics, audio and video codecs, multimedia
|
|
|
December 24,
2017 |
|
September 24,
2017 |
|
$ Change
|
|
% Change
|
|||||||
|
Cash, cash equivalents and marketable securities
|
$
|
39,850
|
|
|
$
|
38,578
|
|
|
$
|
1,272
|
|
|
3
|
%
|
|
Accounts receivable, net
|
3,053
|
|
|
3,632
|
|
|
(579
|
)
|
|
(16
|
%)
|
|||
|
Inventories
|
1,872
|
|
|
2,035
|
|
|
(163
|
)
|
|
(8
|
%)
|
|||
|
Short-term debt
|
3,465
|
|
|
2,495
|
|
|
970
|
|
|
39
|
%
|
|||
|
Long-term debt
|
19,381
|
|
|
19,398
|
|
|
(17
|
)
|
|
—
|
%
|
|||
|
Long-term income taxes payable
|
3,867
|
|
|
—
|
|
|
3,867
|
|
|
N/M
|
|
|||
|
|
Three Months Ended
|
|||||||||||||
|
|
December 24,
2017 |
|
December 25,
2016 |
|
$ Change
|
|
% Change
|
|||||||
|
Net cash provided by operating activities
|
$
|
1,762
|
|
|
$
|
1,586
|
|
|
$
|
176
|
|
|
11
|
%
|
|
Net cash (used) provided by investing activities
|
(3,261
|
)
|
|
681
|
|
|
(3,942
|
)
|
|
N/M
|
|
|||
|
Net cash used by financing activities
|
(165
|
)
|
|
(1,311
|
)
|
|
1,146
|
|
|
N/M
|
|
|||
|
•
|
In connection with our cost reduction plan announced on January 16, 2018, we expect to incur restructuring and restructuring-related charges, the majority of which are expected to result in cash payments. We are in the process of finalizing our plan, as well as the restructuring and restructuring-related costs we expect to incur to execute our plan.
|
|
•
|
Our purchase obligations at
December 24, 2017
, some of which relate to research and development activities and capital expenditures, totaled
$3.8 billion
and
$1.1 billion
for fiscal 2018 and 2019, respectively, and
$0.6 billion
thereafter.
|
|
•
|
Our research and development expenditures were
$1.4 billion
in the first quarter of
fiscal 2018
and
$5.5 billion
in
fiscal 2017
, and we expect to continue to invest heavily in research and development for new technologies, applications and services for voice and data communications.
|
|
•
|
Cash outflows for capital expenditures were
$226 million
in the first quarter of
fiscal 2018
and
$690 million
in
fiscal 2017
. We anticipate that capital expenditures will be higher in
fiscal 2018
as compared to
fiscal 2017
, primarily due to an increase in estimated capital expenditures of approximately $100 million related to the manufacturing operations of our RF360 Holdings joint venture. We also expect to continue to incur capital expenditures in the future to support our business, including research and development activities. Future capital expenditures may be impacted by transactions that are currently not forecasted.
|
|
•
|
The TFTC imposed a fine on us of approximately 23.4 billion Taiwan Dollars (approximately
$781 million
based on the exchange rate at
December 24, 2017
), which will be paid in 60 monthly installments beginning on January 30, 2018.
|
|
•
|
The EC imposed a fine on us of approximately 997 million Euros (approximately
$1.2 billion
based on the exchange rate at
December 24, 2017
). We intend to provide a financial guarantee within three months of the notification date to satisfy the obligation.
|
|
•
|
We expect to continue making strategic investments and acquisitions, the amounts of which could vary significantly, to open new opportunities for our technologies, obtain development resources, grow our patent portfolio or pursue new businesses.
|
|
•
|
we could be required to pay a termination fee to NXP of
$2.0 billion
;
|
|
•
|
we will have incurred and may continue to incur costs relating to the proposed transaction, many of which are payable by us whether or not the proposed transaction is completed;
|
|
•
|
matters relating to the proposed transaction (including integration planning) require substantial commitments of time and resources by our management team and numerous others throughout our organization, which could otherwise have been devoted to other opportunities;
|
|
•
|
we may be subject to legal proceedings related to the proposed transaction or the failure to complete the proposed transaction;
|
|
•
|
the failure to consummate the proposed transaction may result in negative publicity and a negative perception of us in the investment community; and
|
|
•
|
any disruptions to our business resulting from the announcement and pendency of the proposed transaction, including any adverse changes in our relationships with our customers, suppliers, partners or employees, may continue or intensify in the event the proposed transaction is not consummated.
|
|
•
|
wireless operators and industries beyond traditional cellular communications deploy alternative technologies;
|
|
•
|
wireless operators delay next-generation network deployments, such as 5G, expansions or upgrades and/or delay moving 2G customers to 3G, 3G/4G multi-mode or 4G wireless devices;
|
|
•
|
LTE, an OFDMA-based wireless technology, is not more widely deployed or further commercial deployment is delayed;
|
|
•
|
government regulators delay making sufficient spectrum available for 3G, 4G, new unlicensed technologies that we are developing in conjunction with 3G and 4G, as well as for 5G, thereby restricting the ability of wireless operators to deploy or expand the use of these technologies;
|
|
•
|
wireless operators delay or do not drive improvements in 3G, 4G or 3G/4G multi-mode network performance and/or capacity;
|
|
•
|
our customers’ and licensees’ revenues and sales of products, particularly premium-tier products, and services using these technologies do not grow or do not grow as quickly as anticipated due to, for example, the maturity of smartphone penetration in developed regions;
|
|
•
|
our intellectual property and technical leadership included in the 5G standardization effort is different than in 3G and 4G standards;
|
|
•
|
the standardization and/or deployment of 5G technology is delayed; and/or
|
|
•
|
we are unable to drive the adoption of our products and services into networks and devices, including devices beyond traditional cellular applications, based on CDMA, OFDMA and other communications technologies.
|
|
•
|
differentiate our integrated circuit products with innovative technologies across multiple products and features (e.g., modem, radio frequency front-end (RFFE), graphics and/or other processors, camera and connectivity) and with smaller geometry process technologies that drive performance;
|
|
•
|
develop and offer integrated circuit products at competitive cost and price points to effectively cover both emerging and developed geographic regions and all device tiers;
|
|
•
|
continue to drive the adoption of our integrated circuit products into the most popular device models and across a broad spectrum of devices, such as smartphones, tablets, laptops, other computing devices, automobiles, wearables and voice and music and other connected devices and infrastructure products;
|
|
•
|
maintain and/or accelerate demand for our integrated circuit products at the premium device tier, while increasing the adoption of our products in mid- and low-tier devices, in part by strengthening our integrated circuit product roadmap for, and developing channel relationships in, emerging geographic regions, such as China and India, and by providing turnkey products, which incorporate our integrated circuits, for low- and mid-tier smartphones, tablets and laptops;
|
|
•
|
continue to be a leader in 4G technology evolution, including expansion of our LTE-based single-mode licensing program in areas where single-mode products are commercialized, and continue to innovate and introduce 4G turnkey, integrated products and services that differentiate us from our competition;
|
|
•
|
be a leader serving original equipment manufacturers, high level operating systems (HLOS) providers, operators, cloud providers and other industry participants as competitors, new industry entrants and other factors continue to affect the industry landscape;
|
|
•
|
be a preferred partner (and sustain preferred relationships) providing integrated circuit products that support multiple operating system and infrastructure platforms to industry participants that effectively commercialize new devices using these platforms;
|
|
•
|
increase and/or accelerate demand for our semiconductor component products, including RFFE, and our wired and wireless connectivity products, including networking products for consumers, carriers and enterprise equipment and connected devices;
|
|
•
|
identify potential acquisition targets that will grow or sustain our business or address strategic needs, reach agreement on terms acceptable to us and effectively integrate these new businesses and/or technologies;
|
|
•
|
create standalone value and/or contribute to the success of our existing businesses through acquisitions, joint ventures and other transactions (and/or by developing customer, licensee and/or vendor relationships) in new industry segments and/or disruptive technologies, products and/or services (such as products for automotive, IoT (including the connected home, smart cities, wearables, voice and music and robotics), data center, networking, computing, and machine learning, among others);
|
|
•
|
become a leading supplier of RFFE products, which are designed to address cellular radio frequency band fragmentation while improving radio frequency performance and assist original equipment manufacturers in developing multiband, multi-mode mobile devices;
|
|
•
|
be a leader in 5G technology development, standardization, intellectual property creation and licensing and develop and commercialize 5G integrated circuit products and services; and/or
|
|
•
|
continue to develop brand recognition to effectively compete against better known companies in computing and other consumer driven segments and to deepen our presence in significant emerging geographic regions.
|
|
•
|
a reduction, interruption, delay or limitation in our product supply sources;
|
|
•
|
a failure by our suppliers to procure raw materials or to provide or allocate adequate manufacturing or test capacity for our products;
|
|
•
|
our suppliers’ inability to react to shifts in product demand or an increase in raw material or component prices;
|
|
•
|
our suppliers’ delay in developing leading process technologies, or inability to develop or maintain leading process technologies, including transitions to smaller geometry process technologies;
|
|
•
|
the loss of a supplier or the inability of a supplier to meet performance, quality or yield specifications or delivery schedules;
|
|
•
|
additional expense and/or production delays as a result of qualifying a new supplier and commencing volume production or testing in the event of a loss of or a decision to add or change a supplier; and/or
|
|
•
|
natural disasters or geopolitical conflicts, particularly in Asia, impacting our suppliers.
|
|
•
|
requiring us to use cash to pay the principal of and interest on our indebtedness, thereby reducing the amount of cash available for other purposes;
|
|
•
|
limiting our ability to obtain additional financing for working capital, capital expenditures, acquisitions, stock repurchases, dividends or other general corporate and other purposes;
|
|
•
|
limiting our flexibility in planning for, or reacting to, changes in our business and our industry; and/or
|
|
•
|
increasing our vulnerability to interest rate fluctuations to the extent a portion of our debt has variable interest rates.
|
|
•
|
Our products and those of our customers and licensees that are sold outside the United States may become less price-competitive, which may result in reduced demand for those products and/or downward pressure on average selling prices;
|
|
•
|
Certain of our revenues, such as royalties, that are derived from licensee or customer sales denominated in foreign currencies could decrease;
|
|
•
|
Our foreign suppliers may raise their prices if they are impacted by currency fluctuations, resulting in higher than expected costs and lower margins;
|
|
•
|
Certain of our costs that are derived from supply contracts denominated in foreign currencies could increase; and/or
|
|
•
|
Foreign exchange hedging transactions that we engage in to reduce the impact of currency fluctuations may require the payment of structuring fees, limit the U.S. dollar value of royalties from licensees’ sales that are denominated in foreign currencies, cause earnings volatility if the hedges do not qualify for hedge accounting and expose us to counterparty risk if the counterparty fails to perform.
|
|
|
Total Number of
Shares Purchased
|
|
Average Price Paid Per Share (1)
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares that May Yet Be
Purchased Under the Plans or Programs
(2)
|
||||||
|
|
(In thousands)
|
|
|
|
(In thousands)
|
|
(In millions)
|
||||||
|
September 25, 2017 to October 22, 2017
|
752
|
|
|
$
|
53.19
|
|
|
752
|
|
|
$
|
1,604
|
|
|
October 23, 2017 to November 19, 2017
|
1,743
|
|
|
60.22
|
|
|
1,743
|
|
|
1,499
|
|
||
|
November 20, 2017 to December 24, 2017
|
1,221
|
|
|
65.49
|
|
|
1,221
|
|
|
1,419
|
|
||
|
Total
|
3,716
|
|
|
|
|
|
3,716
|
|
|
|
|
||
|
(1)
|
Average Price Paid Per Share excludes cash paid for commissions.
|
|
(2)
|
On
March 9, 2015
, we announced a repurchase program authorizing us to repurchase up to
$15 billion
of our common stock. At
December 24, 2017
,
$1.4 billion
remained authorized for repurchase. The stock repurchase program has no expiration date.
|
|
Exhibit
Number
|
|
Exhibit Description
|
|
Form
|
|
File No./ Film No.
|
|
Date of First Filing
|
|
Exhibit Number
|
|
Filed Herewith
|
|
|
Master Transaction Agreement, dated January 13, 2016, by and among Qualcomm Global Trading Pte. Ltd., each other Purchaser Group member, TDK Japan, each other Seller Group member, and, solely for purposes of Section 10.9 thereof, QUALCOMM Incorporated. (1)
|
|
8-K
|
|
000-19528/ 161339867
|
|
1/13/2016
|
|
2.1
|
|
|
|
|
|
Amendment #1, dated December 20, 2016, to Master Transaction Agreement, dated January 13, 2016, by and among Qualcomm Global Trading Pte. Ltd., each other Purchaser Group member, TDK Japan, each other Seller Group member, and, solely for purposes of Section 10.9 thereof, QUALCOMM Incorporated. (1)
|
|
10-Q
|
|
000-19528/ 17546539
|
|
1/25/2017
|
|
2.3
|
|
|
|
|
|
Amendment #2, dated January 19, 2017, to Master Transaction Agreement, dated January 13, 2016, by and among Qualcomm Global Trading Pte. Ltd., each other Purchaser Group member, TDK Japan, each other Seller Group member, and, solely for purposes of Section 10.9 thereof, QUALCOMM Incorporated. (1)
|
|
10-Q
|
|
000-19528/ 17546539
|
|
1/25/2017
|
|
2.4
|
|
|
|
|
|
Amendment #3, dated February 3, 2017, to Master Transaction Agreement, dated January 13, 2016, by and among Qualcomm Global Trading Pte. Ltd., each other Purchaser Group member, TDK Japan, each other Seller Group member, and, solely for purposes of Section 10.9 thereof, QUALCOMM Incorporated. (1)
|
|
10-Q
|
|
000-19528/
17770305
|
|
4/19/2017
|
|
2.6
|
|
|
|
|
|
Purchase Agreement dated as of October 27, 2016 by and between Qualcomm River Holdings, B.V. and NXP Semiconductors N.V. (1)
|
|
8-K
|
|
000-19528/ 161956228
|
|
10/27/2016
|
|
2.1
|
|
|
|
|
|
Restated Certificate of Incorporation, as amended.
|
|
10-Q
|
|
000-19528/ 161775595
|
|
7/20/2016
|
|
3.1
|
|
|
|
|
|
Amended and Restated Bylaws.
|
|
8-K
|
|
000-19528/ 161769723
|
|
7/15/2016
|
|
3.2
|
|
|
|
|
|
Indenture, dated May 20, 2015, between the Company and U.S. Bank National Association, as trustee.
|
|
8-K
|
|
000-19528/ 15880967
|
|
5/21/2015
|
|
4.1
|
|
|
|
|
|
Officers’ Certificate, dated May 20, 2015, for the Floating Rate Notes due 2018, the Floating Rate Notes due 2020, the 1.400% Notes due 2018, the 2.250% Notes due 2020, the 3.000% Notes due 2022, the 3.450% Notes due 2025, the 4.650% Notes due 2035 and the 4.800% Notes due 2045.
|
|
8-K
|
|
000-19528/ 15880967
|
|
5/21/2015
|
|
4.2
|
|
|
|
|
|
Form of Floating Rate Notes due 2018.
|
|
8-K
|
|
000-19528/ 15880967
|
|
5/21/2015
|
|
4.3
|
|
|
|
|
|
Form of Floating Rate Notes due 2020.
|
|
8-K
|
|
000-19528/ 15880967
|
|
5/21/2015
|
|
4.4
|
|
|
|
|
|
Form of 1.400% Notes due 2018.
|
|
8-K
|
|
000-19528/ 15880967
|
|
5/21/2015
|
|
4.5
|
|
|
|
|
|
Form of 2.250% Notes due 2020.
|
|
8-K
|
|
000-19528/ 15880967
|
|
5/21/2015
|
|
4.6
|
|
|
|
|
|
Form of 3.000% Notes due 2022.
|
|
8-K
|
|
000-19528/ 15880967
|
|
5/21/2015
|
|
4.7
|
|
|
|
|
|
Form of 3.450% Notes due 2025.
|
|
8-K
|
|
000-19528/ 15880967
|
|
5/21/2015
|
|
4.8
|
|
|
|
|
|
Form of 4.650% Notes due 2035.
|
|
8-K
|
|
000-19528/ 15880967
|
|
5/21/2015
|
|
4.9
|
|
|
|
|
|
Form of 4.800% Notes due 2045.
|
|
8-K
|
|
000-19528/ 15880967
|
|
5/21/2015
|
|
4.10
|
|
|
|
|
Exhibit
Number
|
|
Exhibit Description
|
|
Form
|
|
File No./ Film No.
|
|
Date of First Filing
|
|
Exhibit Number
|
|
Filed Herewith
|
|
|
Officers’ Certificate, dated May 26, 2017, for the Floating Rate Notes due 2019, the Floating Rate Notes due 2020, the Floating Rate Notes due 2023, the 1.850% Notes due 2019, the 2.100% Notes due 2020, the 2.600% Notes due 2023, the 2.900% Notes due 2024, the 3.250% Notes due 2027 and the 4.300% Notes due 2047.
|
|
8-K
|
|
000-19528/ 17882336
|
|
5/31/2017
|
|
4.2
|
|
|
|
|
|
Form of Floating Rate Notes due 2019.
|
|
8-K
|
|
000-19528/ 17882336
|
|
5/31/2017
|
|
4.3
|
|
|
|
|
|
Form of Floating Rate Notes due 2020.
|
|
8-K
|
|
000-19528/ 17882336
|
|
5/31/2017
|
|
4.4
|
|
|
|
|
|
Form of Floating Rate Notes due 2023.
|
|
8-K
|
|
000-19528/ 17882336
|
|
5/31/2017
|
|
4.5
|
|
|
|
|
|
Form of 1.850% Notes due 2019.
|
|
8-K
|
|
000-19528/ 17882336
|
|
5/31/2017
|
|
4.6
|
|
|
|
|
|
Form of 2.100% Notes due 2020.
|
|
8-K
|
|
000-19528/ 17882336
|
|
5/31/2017
|
|
4.7
|
|
|
|
|
|
Form of 2.600% Notes due 2023.
|
|
8-K
|
|
000-19528/ 17882336
|
|
5/31/2017
|
|
4.8
|
|
|
|
|
|
Form of 2.900% Notes due 2024.
|
|
8-K
|
|
000-19528/ 17882336
|
|
5/31/2017
|
|
4.9
|
|
|
|
|
|
Form of 3.250% Notes due 2027.
|
|
8-K
|
|
000-19528/ 17882336
|
|
5/31/2017
|
|
4.10
|
|
|
|
|
|
Form of 4.300% Notes due 2047.
|
|
8-K
|
|
000-19528/ 17882336
|
|
5/31/2017
|
|
4.11
|
|
|
|
|
|
Amendment to the Qualcomm Incorporated 2006 and 2016 Long-Term Incentive Plans, as amended and restated. (2)
|
|
8-K
|
|
000-19528/ 0171271241
|
|
12/22/2017
|
|
10.2
|
|
|
|
|
|
Qualcomm Incorporated Non-Executive Officer Change in Control Severance Plan.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
Form of 2018 Annual Cash Incentive Plan Performance Unit Agreement. (2)
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
Form of Executive Restricted Stock Unit Grant Notice and Executive Restricted Stock Unit Agreement under the 2016 Long-Term Incentive Plan (FY2017/FY2018). (2)
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Steve Mollenkopf.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for George S. Davis.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, for Steve Mollenkopf.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, for George S. Davis.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
101.INS
|
|
XBRL Instance Document.
|
|
|
|
|
|
|
|
|
|
X
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema.
|
|
|
|
|
|
|
|
|
|
X
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase.
|
|
|
|
|
|
|
|
|
|
X
|
|
101.LAB
|
|
XBRL Taxonomy Extension Labels Linkbase.
|
|
|
|
|
|
|
|
|
|
X
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase.
|
|
|
|
|
|
|
|
|
|
X
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
QUALCOMM Incorporated
|
|
|
/s/ George S. Davis
|
|
|
George S. Davis
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
| FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
|---|
| DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
|---|
No information found
Customers
Price
Yield
| Owner | Position | Direct Shares | Indirect Shares |
|---|