Price Graph
Price
Yield
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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
|
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
95-3685934
(I.R.S. Employer
Identification No.)
|
|
|
|
|
|
5775 Morehouse Dr., San Diego, California
(Address of Principal Executive Offices)
|
|
92121-1714
(Zip Code)
|
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Large accelerated filer
|
x
|
Accelerated filer
|
o
|
Non-accelerated filer
|
o
|
Smaller reporting company
|
o
|
Emerging growth company
|
o
|
|
Class
|
|
Number of Shares
|
|
Common Stock, $0.0001 per share par value
|
|
1,210,305,693
|
|
|
|
|
|
|
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Page
|
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||
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||
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||
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||
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||
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||
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|
|
|
|
|
||
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|
|
|
|
|
||
|
QUALCOMM Incorporated
|
||||
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
||||
|
(In millions, except per share data)
|
||||
|
(Unaudited)
|
||||
|
|
December 30,
2018 |
|
September 30,
2018 |
||||
|
ASSETS
|
|||||||
|
Current assets:
|
|
|
|
||||
|
Cash and cash equivalents
|
$
|
10,066
|
|
|
$
|
11,777
|
|
|
Marketable securities
|
249
|
|
|
311
|
|
||
|
Accounts receivable, net
|
3,426
|
|
|
2,904
|
|
||
|
Inventories
|
1,698
|
|
|
1,693
|
|
||
|
Other current assets
|
855
|
|
|
699
|
|
||
|
Total current assets
|
16,294
|
|
|
17,384
|
|
||
|
Deferred tax assets
|
3,923
|
|
|
936
|
|
||
|
Property, plant and equipment, net
|
2,932
|
|
|
2,975
|
|
||
|
Goodwill
|
6,295
|
|
|
6,498
|
|
||
|
Other intangible assets, net
|
2,746
|
|
|
2,955
|
|
||
|
Other assets
|
2,056
|
|
|
1,970
|
|
||
|
Total assets
|
$
|
34,246
|
|
|
$
|
32,718
|
|
|
|
|
|
|
||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|||||||
|
Current liabilities:
|
|
|
|
||||
|
Trade accounts payable
|
$
|
1,422
|
|
|
$
|
1,825
|
|
|
Payroll and other benefits related liabilities
|
821
|
|
|
1,081
|
|
||
|
Unearned revenues
|
484
|
|
|
500
|
|
||
|
Short-term debt
|
998
|
|
|
1,005
|
|
||
|
Other current liabilities
|
6,831
|
|
|
6,978
|
|
||
|
Total current liabilities
|
10,556
|
|
|
11,389
|
|
||
|
Unearned revenues
|
1,420
|
|
|
1,620
|
|
||
|
Income taxes payable
|
2,174
|
|
|
2,312
|
|
||
|
Long-term debt
|
15,388
|
|
|
15,365
|
|
||
|
Other liabilities
|
1,091
|
|
|
1,225
|
|
||
|
Total liabilities
|
30,629
|
|
|
31,911
|
|
||
|
|
|
|
|
||||
|
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; 1,210 and 1,219 shares issued and outstanding, respectively
|
—
|
|
|
—
|
|
||
|
Retained earnings
|
3,415
|
|
|
542
|
|
||
|
Accumulated other comprehensive income
|
202
|
|
|
265
|
|
||
|
Total stockholders’ equity
|
3,617
|
|
|
807
|
|
||
|
Total liabilities and stockholders’ equity
|
$
|
34,246
|
|
|
$
|
32,718
|
|
|
See accompanying notes.
|
||||
|
QUALCOMM Incorporated
|
||||
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||
|
(In millions, except per share data)
|
||||
|
(Unaudited)
|
||||
|
|
Three Months Ended
|
||||||
|
|
December 30,
2018 |
|
December 24,
2017 |
||||
|
Revenues:
|
|
|
|
||||
|
Equipment and services
|
$
|
3,754
|
|
|
$
|
4,704
|
|
|
Licensing
|
1,088
|
|
|
1,331
|
|
||
|
Total revenues
|
4,842
|
|
|
6,035
|
|
||
|
Costs and expenses:
|
|
|
|
||||
|
Cost of revenues
|
2,188
|
|
|
2,663
|
|
||
|
Research and development
|
1,269
|
|
|
1,420
|
|
||
|
Selling, general and administrative
|
526
|
|
|
773
|
|
||
|
Other
|
149
|
|
|
1,183
|
|
||
|
Total costs and expenses
|
4,132
|
|
|
6,039
|
|
||
|
Operating income (loss)
|
710
|
|
|
(4
|
)
|
||
|
Interest expense
|
(156
|
)
|
|
(170
|
)
|
||
|
Investment and other income, net
|
5
|
|
|
114
|
|
||
|
Income (loss) before income taxes
|
559
|
|
|
(60
|
)
|
||
|
Income tax benefit (expense)
|
509
|
|
|
(5,923
|
)
|
||
|
Net income (loss)
|
$
|
1,068
|
|
|
$
|
(5,983
|
)
|
|
|
|
|
|
||||
|
Basic earnings (loss) per share
|
$
|
0.88
|
|
|
$
|
(4.05
|
)
|
|
Diluted earnings (loss) per share
|
$
|
0.87
|
|
|
$
|
(4.05
|
)
|
|
Shares used in per share calculations:
|
|
|
|
||||
|
Basic
|
1,213
|
|
|
1,477
|
|
||
|
Diluted
|
1,223
|
|
|
1,477
|
|
||
|
See accompanying notes.
|
||||
|
QUALCOMM Incorporated
|
||||
|
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
||||
|
(In millions)
|
||||
|
(Unaudited)
|
||||
|
|
Three Months Ended
|
||||||
|
|
December 30,
2018 |
|
December 24,
2017 |
||||
|
Net income (loss)
|
$
|
1,068
|
|
|
$
|
(5,983
|
)
|
|
Other comprehensive (loss) income, net of income taxes:
|
|
|
|
||||
|
Foreign currency translation losses
|
(24
|
)
|
|
(5
|
)
|
||
|
Reclassification of foreign currency translation losses included in net income (loss)
|
3
|
|
|
—
|
|
||
|
Reclassification of net other-than-temporary losses on available-for-sale securities included in net income (loss)
|
—
|
|
|
1
|
|
||
|
Net unrealized (losses) gains on other available-for-sale securities
|
(5
|
)
|
|
4
|
|
||
|
Reclassification of net realized gains on available-for-sale securities included in net income (loss)
|
(1
|
)
|
|
(1
|
)
|
||
|
Net unrealized gains on derivative instruments
|
16
|
|
|
2
|
|
||
|
Reclassification of net realized (gains) losses on derivative instruments included in net income (loss)
|
(1
|
)
|
|
1
|
|
||
|
Total other comprehensive (loss) income
|
(12
|
)
|
|
2
|
|
||
|
Comprehensive income (loss)
|
$
|
1,056
|
|
|
$
|
(5,981
|
)
|
|
See accompanying notes.
|
||||
|
QUALCOMM Incorporated
|
||||
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||
|
(In millions)
|
||||
|
(Unaudited)
|
||||
|
|
Three Months Ended
|
||||||
|
|
December 30,
2018 |
|
December 24,
2017 |
||||
|
Operating Activities:
|
|
|
|
||||
|
Net income (loss)
|
$
|
1,068
|
|
|
$
|
(5,983
|
)
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
||||
|
Depreciation and amortization expense
|
353
|
|
|
363
|
|
||
|
Income tax provision (less than) in excess of income tax payments
|
(663
|
)
|
|
5,694
|
|
||
|
Non-cash portion of share-based compensation expense
|
230
|
|
|
248
|
|
||
|
Net losses (gains) on marketable securities and other investments
|
37
|
|
|
(23
|
)
|
||
|
Indefinite and long-lived asset impairment charges
|
150
|
|
|
—
|
|
||
|
Impairment losses on marketable securities and other investments
|
9
|
|
|
9
|
|
||
|
Other items, net
|
(36
|
)
|
|
(25
|
)
|
||
|
Changes in assets and liabilities:
|
|
|
|
||||
|
Accounts receivable, net
|
415
|
|
|
581
|
|
||
|
Inventories
|
(18
|
)
|
|
162
|
|
||
|
Other assets
|
(148
|
)
|
|
(62
|
)
|
||
|
Trade accounts payable
|
(403
|
)
|
|
(248
|
)
|
||
|
Payroll, benefits and other liabilities
|
(576
|
)
|
|
1,121
|
|
||
|
Unearned revenues
|
(62
|
)
|
|
(75
|
)
|
||
|
Net cash provided by operating activities
|
356
|
|
|
1,762
|
|
||
|
Investing Activities:
|
|
|
|
||||
|
Capital expenditures
|
(152
|
)
|
|
(226
|
)
|
||
|
Purchases of debt and equity marketable securities
|
—
|
|
|
(5,627
|
)
|
||
|
Proceeds from sales and maturities of debt and equity marketable securities
|
35
|
|
|
2,704
|
|
||
|
Acquisitions and other investments, net of cash acquired
|
(56
|
)
|
|
(122
|
)
|
||
|
Proceeds from other investments
|
23
|
|
|
10
|
|
||
|
Other items, net
|
(2
|
)
|
|
—
|
|
||
|
Net cash used by investing activities
|
(152
|
)
|
|
(3,261
|
)
|
||
|
Financing Activities:
|
|
|
|
||||
|
Proceeds from short-term debt
|
1,784
|
|
|
2,116
|
|
||
|
Repayment of short-term debt
|
(1,790
|
)
|
|
(1,149
|
)
|
||
|
Proceeds from issuance of common stock
|
28
|
|
|
134
|
|
||
|
Repurchases and retirements of common stock
|
(1,019
|
)
|
|
(225
|
)
|
||
|
Dividends paid
|
(750
|
)
|
|
(844
|
)
|
||
|
Payments of tax withholdings related to vesting of share-based awards
|
(139
|
)
|
|
(192
|
)
|
||
|
Other items, net
|
(1
|
)
|
|
(5
|
)
|
||
|
Net cash used by financing activities
|
(1,887
|
)
|
|
(165
|
)
|
||
|
Changes in cash and cash equivalents held for sale
|
(25
|
)
|
|
—
|
|
||
|
Effect of exchange rate changes on cash and cash equivalents
|
(3
|
)
|
|
(3
|
)
|
||
|
Net decrease in cash, cash equivalents, restricted cash and restricted cash equivalents
|
(1,711
|
)
|
|
(1,667
|
)
|
||
|
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period
|
11,777
|
|
|
37,029
|
|
||
|
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period
|
$
|
10,066
|
|
|
$
|
35,362
|
|
|
|
|
|
|
||||
|
Reconciliation to the condensed consolidated balance sheets
|
|
|
|
||||
|
Cash and cash equivalents
|
$
|
10,066
|
|
|
$
|
33,362
|
|
|
Restricted cash and restricted cash equivalents included in other assets
|
—
|
|
|
2,000
|
|
||
|
Total cash, cash equivalents, restricted cash and restricted cash equivalents at end of period
|
$
|
10,066
|
|
|
$
|
35,362
|
|
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
|
Three Months Ended
|
||||
|
|
December 30,
2018 |
|
December 24,
2017 |
||
|
Dilutive common share equivalents included in diluted shares
|
10.3
|
|
|
—
|
|
|
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
|
11.7
|
|
|
46.0
|
|
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
|
Three Months Ended
|
||||||
|
|
December 30,
2018 |
|
December 24,
2017 |
||||
|
Cost of revenues
|
$
|
8
|
|
|
$
|
10
|
|
|
Research and development
|
157
|
|
|
156
|
|
||
|
Selling, general and administrative
|
65
|
|
|
82
|
|
||
|
Share-based compensation expense before income taxes
|
230
|
|
|
248
|
|
||
|
Related income tax benefit
|
(48
|
)
|
|
(49
|
)
|
||
|
|
$
|
182
|
|
|
$
|
199
|
|
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
|
Balance as of September 30,
2018 |
|
Adjustment
|
|
Opening Balance as of October 1,
2018 |
||||||
|
Assets
|
|
|
|
|
|
||||||
|
Accounts receivable, net
|
$
|
2,904
|
|
|
$
|
957
|
|
|
$
|
3,861
|
|
|
Other current assets
|
699
|
|
|
1
|
|
|
700
|
|
|||
|
Deferred tax assets
|
936
|
|
|
(98
|
)
|
|
838
|
|
|||
|
Other assets
|
1,970
|
|
|
1
|
|
|
1,971
|
|
|||
|
|
|
|
|
|
|
|
|
||||
|
Liabilities
|
|
|
|
|
|
||||||
|
Unearned revenues, current
|
$
|
500
|
|
|
$
|
6
|
|
|
$
|
506
|
|
|
Other current liabilities
|
6,978
|
|
|
125
|
|
|
7,103
|
|
|||
|
Unearned revenues
|
1,620
|
|
|
(110
|
)
|
|
1,510
|
|
|||
|
|
|
|
|
|
|
||||||
|
Stockholders’ equity
|
|
|
|
|
|
||||||
|
Retained earnings
|
$
|
542
|
|
|
$
|
840
|
|
|
$
|
1,382
|
|
|
|
As of December 30, 2018
|
||||||||||
|
Balance Sheet
|
As Reported
ASC 606
|
|
Adjustment
|
|
ASC 605
|
||||||
|
Assets
|
|
|
|
|
|
||||||
|
Accounts receivable, net
|
$
|
3,426
|
|
|
$
|
(845
|
)
|
|
$
|
2,581
|
|
|
Other current assets
|
855
|
|
|
23
|
|
|
878
|
|
|||
|
Deferred tax assets
|
3,923
|
|
|
56
|
|
|
3,979
|
|
|||
|
Other assets
|
2,056
|
|
|
1
|
|
|
2,057
|
|
|||
|
|
|
|
|
|
|
||||||
|
Liabilities
|
|
|
|
|
|
||||||
|
Unearned revenues, current
|
$
|
484
|
|
|
4
|
|
|
$
|
488
|
|
|
|
Other current liabilities
|
6,831
|
|
|
(271
|
)
|
|
6,560
|
|
|||
|
Unearned revenues
|
1,420
|
|
|
309
|
|
|
1,729
|
|
|||
|
|
|
|
|
|
|
||||||
|
Stockholders’ equity
|
|
|
|
|
|
||||||
|
Retained earnings
|
$
|
3,415
|
|
|
$
|
(807
|
)
|
|
$
|
2,608
|
|
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
|
Three Months Ended December 30, 2018
|
||||||||||
|
Statement of Operations
|
As Reported
ASC 606
|
|
Adjustment
|
|
ASC 605
|
||||||
|
Revenues
|
|
|
|
|
|
||||||
|
Equipment and services
|
$
|
3,754
|
|
|
$
|
(15
|
)
|
|
$
|
3,739
|
|
|
Licensing
|
1,088
|
|
|
51
|
|
|
1,139
|
|
|||
|
Investment and other income, net
|
5
|
|
|
2
|
|
|
7
|
|
|||
|
Income tax benefit
|
509
|
|
|
(5
|
)
|
|
504
|
|
|||
|
Net income
|
1,068
|
|
|
33
|
|
|
1,101
|
|
|||
|
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)
|
||||
|
Accounts Receivable (in millions)
|
|
|
|
||||
|
|
December 30,
2018 |
|
September 30,
2018 |
||||
|
Trade, net of allowances for doubtful accounts of $47 and $56, respectively
|
$
|
2,330
|
|
|
$
|
2,667
|
|
|
Unbilled receivables
|
1,072
|
|
|
201
|
|
||
|
Other
|
24
|
|
|
36
|
|
||
|
|
$
|
3,426
|
|
|
$
|
2,904
|
|
|
Inventories (in millions)
|
|
|
|
||||
|
|
December 30,
2018 |
|
September 30,
2018 |
||||
|
Raw materials
|
$
|
79
|
|
|
$
|
72
|
|
|
Work-in-process
|
763
|
|
|
715
|
|
||
|
Finished goods
|
856
|
|
|
906
|
|
||
|
|
$
|
1,698
|
|
|
$
|
1,693
|
|
|
|
December 30,
2018 |
|
September 30,
2018 |
||||
|
Equity method investments
|
$
|
386
|
|
|
$
|
402
|
|
|
Non-marketable equity investments
|
708
|
|
|
650
|
|
||
|
|
$
|
1,094
|
|
|
$
|
1,052
|
|
|
Other Current Liabilities (in millions)
|
|
|
|
||||
|
|
December 30,
2018 |
|
September 30,
2018 |
||||
|
Customer incentives and other customer-related liabilities
|
$
|
3,494
|
|
|
$
|
3,500
|
|
|
Accrual for EC fine (Note 6)
|
1,155
|
|
|
1,167
|
|
||
|
Income taxes payable
|
484
|
|
|
453
|
|
||
|
RF360 Holdings put and call option
|
1,141
|
|
|
1,137
|
|
||
|
Other
|
557
|
|
|
721
|
|
||
|
|
$
|
6,831
|
|
|
$
|
6,978
|
|
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
Investment and Other Income, Net (in millions)
|
|
|
|
||||
|
|
Three Months Ended
|
||||||
|
|
December 30,
2018 |
|
December 24,
2017 |
||||
|
Interest and dividend income
|
$
|
74
|
|
|
$
|
126
|
|
|
Net (losses) gains on marketable securities
|
(72
|
)
|
|
10
|
|
||
|
Net gains on other investments
|
35
|
|
|
13
|
|
||
|
Impairment losses on marketable securities and other investments
|
(9
|
)
|
|
(9
|
)
|
||
|
Net losses on derivative investments
|
(8
|
)
|
|
(1
|
)
|
||
|
Equity in net losses of investees
|
(21
|
)
|
|
(21
|
)
|
||
|
Net gains (losses) on foreign currency transactions
|
6
|
|
|
(4
|
)
|
||
|
|
$
|
5
|
|
|
$
|
114
|
|
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
|
Total Stockholders’ Equity
|
||
|
Balance at September 30, 2018
|
$
|
807
|
|
|
Cumulative effect of accounting changes (Note 1)
|
3,403
|
|
|
|
Net income
|
1,068
|
|
|
|
Other comprehensive loss
|
(12
|
)
|
|
|
Common stock issued under employee benefit plans and related tax benefits
|
27
|
|
|
|
Share-based compensation
|
249
|
|
|
|
Tax withholdings related to vesting of share-based payments
|
(139
|
)
|
|
|
Dividends
|
(767
|
)
|
|
|
Stock repurchases
|
(1,019
|
)
|
|
|
Balance at December 30, 2018
|
$
|
3,617
|
|
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
|
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 30, 2018
|
$
|
11
|
|
|
$
|
23
|
|
|
$
|
243
|
|
|
$
|
(13
|
)
|
|
$
|
1
|
|
|
$
|
265
|
|
|
Other comprehensive (loss) income before reclassifications
|
(24
|
)
|
|
—
|
|
|
(5
|
)
|
|
16
|
|
|
—
|
|
|
(13
|
)
|
||||||
|
Reclassifications from accumulated other comprehensive income
|
3
|
|
|
—
|
|
|
(51
|
)
|
|
(2
|
)
|
|
—
|
|
|
(50
|
)
|
||||||
|
Other comprehensive (loss) income
|
(21
|
)
|
|
—
|
|
|
(56
|
)
|
|
14
|
|
|
—
|
|
|
(63
|
)
|
||||||
|
Balance at December 30, 2018
|
$
|
(10
|
)
|
|
$
|
23
|
|
|
$
|
187
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
202
|
|
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
|
|
December 30, 2018
|
|
September 30, 2018
|
||||||||
|
|
|
Amount
|
|
Effective
Rate
|
|
Amount
|
|
Effective
Rate
|
||||
|
May 2015 Notes
|
|
|
|
|
|
|
|
|||||
|
|
Floating-rate three-month LIBOR plus 0.55% notes due May 20, 2020
|
$
|
250
|
|
|
3.25%
|
|
$
|
250
|
|
|
2.93%
|
|
|
Fixed-rate 2.25% notes due May 20, 2020
|
1,750
|
|
|
3.18%
|
|
1,750
|
|
|
3.13%
|
||
|
|
Fixed-rate 3.00% notes due May 20, 2022
|
2,000
|
|
|
3.66%
|
|
2,000
|
|
|
3.73%
|
||
|
|
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
|
|
|
4.73%
|
|
1,000
|
|
|
4.73%
|
||
|
|
Fixed-rate 4.80% notes due May 20, 2045
|
1,500
|
|
|
4.72%
|
|
1,500
|
|
|
4.72%
|
||
|
May 2017 Notes
|
|
|
|
|
|
|
|
|||||
|
|
Floating-rate three-month LIBOR plus 0.73% notes due January 30, 2023
|
500
|
|
|
3.32%
|
|
500
|
|
|
3.14%
|
||
|
|
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
|
15,500
|
|
|
|
|
15,500
|
|
|
|
||
|
|
Unamortized discount, including debt issuance costs
|
(82
|
)
|
|
|
|
(85
|
)
|
|
|
||
|
|
Hedge accounting fair value adjustments
|
(30
|
)
|
|
|
|
(50
|
)
|
|
|
||
|
|
Total long-term debt
|
$
|
15,388
|
|
|
|
|
$
|
15,365
|
|
|
|
|
Reported as:
|
|
|
|
|
|
|
|
|||||
|
|
Short-term debt
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
|
Long-term debt
|
15,388
|
|
|
|
|
15,365
|
|
|
|
||
|
|
Total
|
$
|
15,388
|
|
|
|
|
$
|
15,365
|
|
|
|
|
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)
|
||||
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
|
Purchase Obligations
|
|
Operating Leases
|
||||
|
Remainder of fiscal 2019
|
$
|
3,748
|
|
|
$
|
91
|
|
|
2020
|
499
|
|
|
106
|
|
||
|
2021
|
251
|
|
|
83
|
|
||
|
2022
|
45
|
|
|
51
|
|
||
|
2023
|
9
|
|
|
30
|
|
||
|
Thereafter
|
4
|
|
|
43
|
|
||
|
Total
|
$
|
4,556
|
|
|
$
|
404
|
|
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
|
Three Months Ended
|
||||||
|
|
December 30,
2018 |
|
December 24,
2017 |
||||
|
Revenues
|
|
|
|
||||
|
QCT
|
$
|
3,739
|
|
|
$
|
4,651
|
|
|
QTL
|
1,018
|
|
|
1,266
|
|
||
|
QSI
|
27
|
|
|
30
|
|
||
|
Reconciling items
|
58
|
|
|
88
|
|
||
|
Total
|
$
|
4,842
|
|
|
$
|
6,035
|
|
|
EBT
|
|
|
|
||||
|
QCT
|
$
|
598
|
|
|
$
|
955
|
|
|
QTL
|
590
|
|
|
854
|
|
||
|
QSI
|
8
|
|
|
11
|
|
||
|
Reconciling items
|
(637
|
)
|
|
(1,880
|
)
|
||
|
Total
|
$
|
559
|
|
|
$
|
(60
|
)
|
|
|
|
|
|
||||
|
|
December 30,
2018 |
|
September 30,
2018 |
||||
|
Assets
|
|
|
|
||||
|
QCT
|
$
|
2,684
|
|
|
$
|
3,041
|
|
|
QTL
|
2,405
|
|
|
1,472
|
|
||
|
QSI
|
1,296
|
|
|
1,279
|
|
||
|
Reconciling items
|
27,861
|
|
|
26,926
|
|
||
|
Total
|
$
|
34,246
|
|
|
$
|
32,718
|
|
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
|
Three Months Ended
|
||||||
|
|
December 30,
2018 |
|
December 24,
2017 |
||||
|
Revenues
|
|
|
|
||||
|
Nonreportable segments
|
$
|
58
|
|
|
$
|
88
|
|
|
|
$
|
58
|
|
|
$
|
88
|
|
|
EBT
|
|
|
|
||||
|
Unallocated cost of revenues
|
$
|
(114
|
)
|
|
$
|
(117
|
)
|
|
Unallocated research and development expenses
|
(147
|
)
|
|
(280
|
)
|
||
|
Unallocated selling, general and administrative expenses
|
(64
|
)
|
|
(161
|
)
|
||
|
Unallocated other expenses (Note 2)
|
(149
|
)
|
|
(1,183
|
)
|
||
|
Unallocated interest expense
|
(153
|
)
|
|
(170
|
)
|
||
|
Unallocated investment and other income, net
|
20
|
|
|
124
|
|
||
|
Nonreportable segments
|
(30
|
)
|
|
(93
|
)
|
||
|
|
$
|
(637
|
)
|
|
$
|
(1,880
|
)
|
|
|
Three Months Ended
|
||||||
|
|
December 30,
2018 |
|
December 24,
2017 |
||||
|
Cost of revenues
|
$
|
103
|
|
|
$
|
106
|
|
|
Research and development expenses
|
1
|
|
|
2
|
|
||
|
Selling, general and administrative expenses
|
7
|
|
|
76
|
|
||
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
|
Severance Costs
|
|
Other
Costs
|
|
Total
|
||||||
|
Beginning balance of restructuring accrual
|
$
|
61
|
|
|
$
|
22
|
|
|
$
|
83
|
|
|
Costs
|
21
|
|
|
11
|
|
|
32
|
|
|||
|
Cash payments
|
(25
|
)
|
|
(14
|
)
|
|
(39
|
)
|
|||
|
Adjustments
|
(1
|
)
|
|
(2
|
)
|
|
(3
|
)
|
|||
|
Ending balance of restructuring accrual
|
$
|
56
|
|
|
$
|
17
|
|
|
$
|
73
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
Assets
|
|
|
|
|
|
|
|
||||||||
|
Cash equivalents
|
$
|
5,336
|
|
|
$
|
2,992
|
|
|
$
|
—
|
|
|
$
|
8,328
|
|
|
Marketable securities:
|
|
|
|
|
|
|
|
||||||||
|
Corporate bonds and notes
|
—
|
|
|
108
|
|
|
—
|
|
|
108
|
|
||||
|
Auction rate securities
|
—
|
|
|
—
|
|
|
35
|
|
|
35
|
|
||||
|
Equity securities
|
141
|
|
|
—
|
|
|
—
|
|
|
141
|
|
||||
|
Total marketable securities
|
141
|
|
|
108
|
|
|
35
|
|
|
284
|
|
||||
|
Derivative instruments
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
||||
|
Other investments
|
364
|
|
|
—
|
|
|
6
|
|
|
370
|
|
||||
|
Total assets measured at fair value
|
$
|
5,841
|
|
|
$
|
3,106
|
|
|
$
|
41
|
|
|
$
|
8,988
|
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
|
Derivative instruments
|
$
|
—
|
|
|
$
|
33
|
|
|
$
|
—
|
|
|
$
|
33
|
|
|
Other liabilities
|
364
|
|
|
—
|
|
|
85
|
|
|
449
|
|
||||
|
Total liabilities measured at fair value
|
$
|
364
|
|
|
$
|
33
|
|
|
$
|
85
|
|
|
$
|
482
|
|
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
|
Current
|
|
Noncurrent (1)
|
||||||||||||
|
|
December 30,
2018 |
|
September 30,
2018 |
|
December 30,
2018 |
|
September 30,
2018 |
||||||||
|
Available-for-sale debt securities:
|
|
|
|
|
|
|
|
||||||||
|
Corporate bonds and notes
|
$
|
108
|
|
|
$
|
144
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Auction rate securities
|
—
|
|
|
—
|
|
|
35
|
|
|
35
|
|
||||
|
Total available-for-sale debt securities
|
108
|
|
|
144
|
|
|
35
|
|
|
35
|
|
||||
|
Equity securities
|
141
|
|
|
167
|
|
|
—
|
|
|
—
|
|
||||
|
Total marketable securities
|
$
|
249
|
|
|
$
|
311
|
|
|
$
|
35
|
|
|
$
|
35
|
|
|
|
December 30,
2018 |
||
|
Years to Maturity
|
|
||
|
Less than one year
|
$
|
108
|
|
|
No single maturity date
|
35
|
|
|
|
Total
|
$
|
143
|
|
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
|
As of September 30, 2018
|
|
As of September 24, 2017
|
||||||||||||||||||||
|
|
As reported
|
|
Adjustment
|
|
As revised
|
|
As reported
|
|
Adjustment
|
|
As revised
|
||||||||||||
|
Deferred tax assets (non-current)
|
$
|
904
|
|
|
$
|
32
|
|
|
$
|
936
|
|
|
$
|
2,900
|
|
|
$
|
12
|
|
|
$
|
2,912
|
|
|
Total assets
|
32,686
|
|
|
32
|
|
|
32,718
|
|
|
65,486
|
|
|
12
|
|
|
65,498
|
|
||||||
|
Other current liabilities
|
6,825
|
|
|
153
|
|
|
6,978
|
|
|
4,756
|
|
|
33
|
|
|
4,789
|
|
||||||
|
Total current liabilities
|
11,236
|
|
|
153
|
|
|
11,389
|
|
|
10,907
|
|
|
33
|
|
|
10,940
|
|
||||||
|
Total liabilities
|
31,758
|
|
|
153
|
|
|
31,911
|
|
|
34,740
|
|
|
33
|
|
|
34,773
|
|
||||||
|
Retained earnings
|
663
|
|
|
(121
|
)
|
|
542
|
|
|
30,088
|
|
|
(21
|
)
|
|
30,067
|
|
||||||
|
Total stockholders’ equity
|
928
|
|
|
(121
|
)
|
|
807
|
|
|
30,746
|
|
|
(21
|
)
|
|
30,725
|
|
||||||
|
Total liabilities and stockholders’ equity
|
32,686
|
|
|
32
|
|
|
32,718
|
|
|
65,486
|
|
|
12
|
|
|
65,498
|
|
||||||
|
|
Year Ended
|
||||||||||||||||||||||
|
|
September 30, 2018
|
|
September 24, 2017
|
||||||||||||||||||||
|
|
As reported
|
|
Adjustment
|
|
As revised
|
|
As reported
|
|
Adjustment
|
|
As revised
|
||||||||||||
|
Licensing revenues
|
$
|
5,332
|
|
|
$
|
(121
|
)
|
|
$
|
5,211
|
|
|
$
|
5,644
|
|
|
$
|
(33
|
)
|
|
$
|
5,611
|
|
|
Total revenues
|
22,732
|
|
|
(121
|
)
|
|
22,611
|
|
|
22,291
|
|
|
(33
|
)
|
|
22,258
|
|
||||||
|
Operating income
|
742
|
|
|
(121
|
)
|
|
621
|
|
|
2,614
|
|
|
(33
|
)
|
|
2,581
|
|
||||||
|
Income before income taxes
|
513
|
|
|
(121
|
)
|
|
392
|
|
|
3,020
|
|
|
(33
|
)
|
|
2,987
|
|
||||||
|
Income tax expense
|
(5,377
|
)
|
|
21
|
|
|
(5,356
|
)
|
|
(555
|
)
|
|
12
|
|
|
(543
|
)
|
||||||
|
Net (loss) income
|
(4,864
|
)
|
|
(100
|
)
|
|
(4,964
|
)
|
|
2,465
|
|
|
(21
|
)
|
|
2,444
|
|
||||||
|
Net (loss) income attributable to Qualcomm
|
(4,864
|
)
|
|
(100
|
)
|
|
(4,964
|
)
|
|
2,466
|
|
|
(21
|
)
|
|
2,445
|
|
||||||
|
Basic (loss) earnings per share
|
(3.32
|
)
|
|
(0.07
|
)
|
|
(3.39
|
)
|
|
1.67
|
|
|
(0.01
|
)
|
|
1.66
|
|
||||||
|
Diluted (loss) earnings per share
|
(3.32
|
)
|
|
(0.07
|
)
|
|
(3.39
|
)
|
|
1.65
|
|
|
(0.01
|
)
|
|
1.64
|
|
||||||
|
|
Three Months Ended September 30, 2018
|
|
Three Months Ended June 24, 2018
|
||||||||||||||||||||
|
|
As reported
|
|
Adjustment
|
|
As revised
|
|
As reported
|
|
Adjustment
|
|
As revised
|
||||||||||||
|
Licensing revenues
|
$
|
1,153
|
|
|
$
|
(25
|
)
|
|
$
|
1,128
|
|
|
$
|
1,489
|
|
|
$
|
(22
|
)
|
|
$
|
1,467
|
|
|
Total revenues
|
5,803
|
|
|
(25
|
)
|
|
5,778
|
|
|
5,599
|
|
|
(22
|
)
|
|
5,577
|
|
||||||
|
Operating (loss) income
|
(654
|
)
|
|
(25
|
)
|
|
(679
|
)
|
|
925
|
|
|
(22
|
)
|
|
903
|
|
||||||
|
(Loss) income before income taxes
|
(775
|
)
|
|
(25
|
)
|
|
(800
|
)
|
|
956
|
|
|
(22
|
)
|
|
934
|
|
||||||
|
Income tax benefit
|
282
|
|
|
5
|
|
|
287
|
|
|
263
|
|
|
5
|
|
|
268
|
|
||||||
|
Net (loss) income
|
(493
|
)
|
|
(20
|
)
|
|
(513
|
)
|
|
1,219
|
|
|
(17
|
)
|
|
1,202
|
|
||||||
|
Basic (loss) earnings per share
|
(0.35
|
)
|
|
(0.01
|
)
|
|
(0.36
|
)
|
|
0.82
|
|
|
(0.01
|
)
|
|
0.81
|
|
||||||
|
Diluted (loss) earnings per share
|
(0.35
|
)
|
|
(0.01
|
)
|
|
(0.36
|
)
|
|
0.82
|
|
|
(0.01
|
)
|
|
0.81
|
|
||||||
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
|
Three Months Ended March 25, 2018
|
|
Three Months Ended December 24, 2017
|
||||||||||||||||||||
|
|
As reported
|
|
Adjustment
|
|
As revised
|
|
As reported
|
|
Adjustment
|
|
As revised
|
||||||||||||
|
Licensing revenues
|
$
|
1,325
|
|
|
$
|
(41
|
)
|
|
$
|
1,284
|
|
|
$
|
1,364
|
|
|
$
|
(33
|
)
|
|
$
|
1,331
|
|
|
Total revenues
|
5,261
|
|
|
(41
|
)
|
|
5,220
|
|
|
6,068
|
|
|
(33
|
)
|
|
6,035
|
|
||||||
|
Operating income (loss)
|
441
|
|
|
(41
|
)
|
|
400
|
|
|
29
|
|
|
(33
|
)
|
|
(4
|
)
|
||||||
|
Income (loss) before income taxes
|
358
|
|
|
(41
|
)
|
|
317
|
|
|
(27
|
)
|
|
(33
|
)
|
|
(60
|
)
|
||||||
|
Income tax benefit (expense)
|
5
|
|
|
8
|
|
|
13
|
|
|
(5,926
|
)
|
|
3
|
|
|
(5,923
|
)
|
||||||
|
Net income (loss)
|
363
|
|
|
(33
|
)
|
|
330
|
|
|
(5,953
|
)
|
|
(30
|
)
|
|
(5,983
|
)
|
||||||
|
Basic earnings (loss) per share
|
0.25
|
|
|
(0.03
|
)
|
|
0.22
|
|
|
(4.03
|
)
|
|
(0.02
|
)
|
|
(4.05
|
)
|
||||||
|
Diluted earnings (loss) per share
|
0.24
|
|
|
(0.02
|
)
|
|
0.22
|
|
|
(4.03
|
)
|
|
(0.02
|
)
|
|
(4.05
|
)
|
||||||
|
|
Three Months Ended September 24, 2017
|
|
Three Months Ended June 25, 2017
|
||||||||||||||||||||
|
|
As reported
|
|
Adjustment
|
|
As revised
|
|
As reported
|
|
Adjustment
|
|
As revised
|
||||||||||||
|
Licensing revenues
|
$
|
1,207
|
|
|
$
|
(17
|
)
|
|
$
|
1,190
|
|
|
$
|
1,250
|
|
|
$
|
(15
|
)
|
|
$
|
1,235
|
|
|
Total revenues
|
5,905
|
|
|
(17
|
)
|
|
5,888
|
|
|
5,371
|
|
|
(15
|
)
|
|
5,356
|
|
||||||
|
Operating income
|
333
|
|
|
(17
|
)
|
|
316
|
|
|
773
|
|
|
(15
|
)
|
|
758
|
|
||||||
|
Income before income taxes
|
434
|
|
|
(17
|
)
|
|
417
|
|
|
858
|
|
|
(15
|
)
|
|
843
|
|
||||||
|
Income tax (expense) benefit
|
(266
|
)
|
|
6
|
|
|
(260
|
)
|
|
7
|
|
|
5
|
|
|
12
|
|
||||||
|
Net income
|
168
|
|
|
(11
|
)
|
|
157
|
|
|
865
|
|
|
(10
|
)
|
|
855
|
|
||||||
|
Net income attributable to Qualcomm
|
168
|
|
|
(11
|
)
|
|
157
|
|
|
866
|
|
|
(10
|
)
|
|
856
|
|
||||||
|
Basic earnings per share
|
0.11
|
|
|
—
|
|
|
0.11
|
|
|
0.59
|
|
|
(0.01
|
)
|
|
0.58
|
|
||||||
|
Diluted earnings per share
|
0.11
|
|
|
—
|
|
|
0.11
|
|
|
0.58
|
|
|
(0.01
|
)
|
|
0.57
|
|
||||||
|
|
Year Ended
|
||||||||||||||||||||||
|
|
September 30, 2018
|
|
September 24, 2017
|
||||||||||||||||||||
|
|
As reported
|
|
Adjustment
|
|
As revised
|
|
As reported
|
|
Adjustment
|
|
As revised
|
||||||||||||
|
Net (loss) income
|
$
|
(4,864
|
)
|
|
$
|
(100
|
)
|
|
$
|
(4,964
|
)
|
|
$
|
2,465
|
|
|
$
|
(21
|
)
|
|
$
|
2,444
|
|
|
Total comprehensive (loss) income
|
(4,983
|
)
|
|
(100
|
)
|
|
(5,083
|
)
|
|
2,421
|
|
|
(21
|
)
|
|
2,400
|
|
||||||
|
Comprehensive (loss) income attributable to Qualcomm
|
(4,983
|
)
|
|
(100
|
)
|
|
(5,083
|
)
|
|
2,422
|
|
|
(21
|
)
|
|
2,401
|
|
||||||
|
|
Three Months Ended June 24, 2018
|
|
Three Months Ended March 25, 2018
|
||||||||||||||||||||
|
|
As reported
|
|
Adjustment
|
|
As revised
|
|
As reported
|
|
Adjustment
|
|
As revised
|
||||||||||||
|
Net income
|
$
|
1,219
|
|
|
$
|
(17
|
)
|
|
$
|
1,202
|
|
|
$
|
363
|
|
|
$
|
(33
|
)
|
|
$
|
330
|
|
|
Total comprehensive income
|
997
|
|
|
(17
|
)
|
|
980
|
|
|
523
|
|
|
(33
|
)
|
|
490
|
|
||||||
|
|
Three Months Ended December 24, 2017
|
|
Three Months Ended June 25, 2017
|
||||||||||||||||||||
|
|
As reported
|
|
Adjustment
|
|
As revised
|
|
As reported
|
|
Adjustment
|
|
As revised
|
||||||||||||
|
Net (loss) income
|
$
|
(5,953
|
)
|
|
$
|
(30
|
)
|
|
$
|
(5,983
|
)
|
|
$
|
865
|
|
|
$
|
(10
|
)
|
|
$
|
855
|
|
|
Total comprehensive (loss) income
|
(5,951
|
)
|
|
(30
|
)
|
|
(5,981
|
)
|
|
925
|
|
|
(10
|
)
|
|
915
|
|
||||||
|
Comprehensive (loss) income attributable to Qualcomm
|
(5,951
|
)
|
|
(30
|
)
|
|
(5,981
|
)
|
|
926
|
|
|
(10
|
)
|
|
916
|
|
||||||
|
QUALCOMM Incorporated
|
||||
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
|
(Unaudited)
|
||||
|
|
Year Ended
|
||||||||||||||||||||||
|
|
September 30, 2018
|
|
September 24, 2017
|
||||||||||||||||||||
|
|
As reported
|
|
Adjustment
|
|
As revised
|
|
As reported
|
|
Adjustment
|
|
As revised
|
||||||||||||
|
Operating Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Net (loss) income
|
$
|
(4,864
|
)
|
|
$
|
(100
|
)
|
|
$
|
(4,964
|
)
|
|
$
|
2,465
|
|
|
$
|
(21
|
)
|
|
$
|
2,444
|
|
|
Income tax provision in excess of (less than) income tax payments
|
4,502
|
|
|
(21
|
)
|
|
4,481
|
|
|
(400
|
)
|
|
(12
|
)
|
|
(412
|
)
|
||||||
|
Payroll, benefits and other liabilities
|
687
|
|
|
121
|
|
|
808
|
|
|
2,103
|
|
|
33
|
|
|
2,136
|
|
||||||
|
Net cash provided by operating activities
|
3,895
|
|
|
—
|
|
|
3,895
|
|
|
5,001
|
|
|
—
|
|
|
5,001
|
|
||||||
|
|
Three Months Ended December 24, 2017
|
||||||||||||||
|
|
As reported
|
|
Reclassification adjustment (1)
|
|
Revision adjustment
|
|
As revised
|
||||||||
|
Operating Activities:
|
|
|
|
|
|
|
|
||||||||
|
Net loss
|
$
|
(5,953
|
)
|
|
$
|
—
|
|
|
$
|
(30
|
)
|
|
$
|
(5,983
|
)
|
|
Income tax provision in excess of (less than) income tax payments
|
5,697
|
|
|
—
|
|
|
(3
|
)
|
|
5,694
|
|
||||
|
Other items, net
|
57
|
|
|
(82
|
)
|
|
—
|
|
|
(25
|
)
|
||||
|
Other assets
|
(56
|
)
|
|
(6
|
)
|
|
—
|
|
|
(62
|
)
|
||||
|
Payroll, benefits and other liabilities
|
1,000
|
|
|
88
|
|
|
33
|
|
|
1,121
|
|
||||
|
Net cash provided by operating activities
|
1,762
|
|
|
—
|
|
|
—
|
|
|
1,762
|
|
||||
|
•
|
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 5.7 billion, which was approximately 71% of total mobile connections at the end of the
first
quarter of fiscal 2019.
(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 in the
first
quarter of
fiscal 2019
were negatively impacted by lower modem sales to Apple.
|
|
•
|
We adopted new revenue recognition accounting guidance in the first quarter of fiscal 2019 that requires us to estimate and recognize QTL royalties in the period in which the associated sales occur, resulting in an acceleration of royalty revenues by one quarter compared to the prior method. As a result of estimation, adjustments will be recorded in subsequent quarters to reflect changes in estimates as new information becomes available, primarily when actual amounts are reported by licensees. Prior period results have not been restated for the adoption of the new accounting guidance and continue to be reported in accordance with the accounting guidance in effect for those periods.
|
|
•
|
QTL results
were negatively impacted by our continued dispute with Apple and its contract manufacturers (who are our licensees). Revenues in the first quarter of fiscal 2019 and the first quarter of fiscal 2018 did not include royalties due on sales of Apple or other products by Apple’s contract manufacturers.
QTL revenues in the first quarter of fiscal 2019 included $150 million of royalties due under an interim agreement with Huawei (who was previously disclosed as the other licensee in dispute). This represents a minimum, non-refundable amount for royalties due for the first quarter of fiscal 2019 by Huawei while negotiations continue. This payment does not reflect the full amount of royalties due under the underlying license agreement.
|
|
•
|
In the second quarter of fiscal 2018, we announced a Cost Plan designed to align our cost structure to our long-term margin targets, under which we continue to execute on a series of targeted actions 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
, excluding litigation costs that are in excess of the baseline spend. We recorded restructuring and restructuring-related charges of
$180 million
in the
first
quarter of
fiscal 2019
related to our Cost Plan.
|
|
•
|
Beginning in fiscal 2019, certain provisions of the 2017 U.S. Tax Cuts and Jobs Act (the Tax Legislation) became effective, including new taxes on certain foreign income. Our estimated annual effective tax rate for fiscal 2019 reflects the effects of these components of the Tax Legislation, and it also includes the effects of tax elections made by several of our foreign subsidiaries in the first quarter of fiscal 2019 to be treated as U.S. branches for federal income tax purposes effective beginning in fiscal 2018 and fiscal 2019, which resulted in an income tax benefit of
$570 million
recorded discretely in the first quarter of fiscal 2019.
|
|
(1)
|
According to GSMA Intelligence estimates as of
January 28, 2019
(estimates excluded Wireless Local Loop).
|
|
Revenues (in millions)
|
|||||||||||
|
|
Three Months Ended
|
||||||||||
|
|
December 30,
2018 |
|
December 24,
2017 |
|
Change
|
||||||
|
Equipment and services
|
$
|
3,754
|
|
|
$
|
4,704
|
|
|
$
|
(950
|
)
|
|
Licensing
|
1,088
|
|
|
1,331
|
|
|
(243
|
)
|
|||
|
|
$
|
4,842
|
|
|
$
|
6,035
|
|
|
$
|
(1,193
|
)
|
|
-
|
$920 million
in lower equipment and services revenues from our QCT segment
|
|
-
|
$248 million
in lower licensing revenues from our QTL segment
|
|
Costs and Expenses (in millions)
|
|||||||||||
|
|
Three Months Ended
|
||||||||||
|
|
December 30,
2018 |
|
December 24,
2017 |
|
Change
|
||||||
|
Cost of revenues
|
$
|
2,188
|
|
|
$
|
2,663
|
|
|
$
|
(475
|
)
|
|
Gross margin
|
55
|
%
|
|
56
|
%
|
|
|
||||
|
|
Three Months Ended
|
||||||||||
|
|
December 30,
2018 |
|
December 24,
2017 |
|
Change
|
||||||
|
Research and development
|
$
|
1,269
|
|
|
$
|
1,420
|
|
|
$
|
(151
|
)
|
|
% of revenues
|
26
|
%
|
|
24
|
%
|
|
|
||||
|
-
|
$153 million decrease
primarily driven by actions under our Cost Plan
, partially offset by higher costs related to the development of 5G wireless and integrated circuit technologies
|
|
|
Three Months Ended
|
||||||||||
|
|
December 30,
2018 |
|
December 24,
2017 |
|
Change
|
||||||
|
Selling, general and administrative
|
$
|
526
|
|
|
$
|
773
|
|
|
$
|
(247
|
)
|
|
% of revenues
|
11
|
%
|
|
13
|
%
|
|
|
||||
|
-
|
$63 million in lower professional fees and costs related to non-litigation legal matters
|
|
-
|
$45 million in bad debt expense recorded in the first quarter of fiscal 2018
|
|
-
|
$43 million in lower employee-related expenses
|
|
-
|
$21 million in lower sales and marketing expenses
|
|
-
|
$18 million in lower share-based compensation expense
|
|
|
Three Months Ended
|
||||||||||
|
|
December 30,
2018 |
|
December 24,
2017 |
|
Change
|
||||||
|
Other
|
$
|
149
|
|
|
$
|
1,183
|
|
|
$
|
(1,034
|
)
|
|
Interest Expense and Investment and Other Income, Net (in millions)
|
|||||||||||
|
|
Three Months Ended
|
||||||||||
|
|
December 30,
2018 |
|
December 24,
2017 |
|
Change
|
||||||
|
Interest expense
|
$
|
156
|
|
|
$
|
170
|
|
|
$
|
(14
|
)
|
|
|
|
|
|
|
|
||||||
|
Investment and other income, net
|
|
|
|
|
|
||||||
|
Interest and dividend income
|
$
|
74
|
|
|
$
|
126
|
|
|
$
|
(52
|
)
|
|
Net (losses) gains on marketable securities
|
(72
|
)
|
|
10
|
|
|
(82
|
)
|
|||
|
Net gains on other investments
|
35
|
|
|
13
|
|
|
22
|
|
|||
|
Impairment losses on marketable securities and other investments
|
(9
|
)
|
|
(9
|
)
|
|
—
|
|
|||
|
Equity in net losses of investees
|
(21
|
)
|
|
(21
|
)
|
|
—
|
|
|||
|
Net gains (losses) on foreign currency transactions
|
6
|
|
|
(4
|
)
|
|
10
|
|
|||
|
Net losses on derivative instruments
|
(8
|
)
|
|
(1
|
)
|
|
(7
|
)
|
|||
|
|
$
|
5
|
|
|
$
|
114
|
|
|
$
|
(109
|
)
|
|
Income Tax (Benefit) Expense (in millions)
|
|||||||||||
|
|
Three Months Ended
|
||||||||||
|
|
December 30, 2018
|
|
December 24, 2017
|
|
Change
|
||||||
|
Income tax (benefit) expense
|
$
|
(509
|
)
|
|
$
|
5,923
|
|
|
$
|
(6,432
|
)
|
|
Effective tax rate
|
(91
|
%)
|
|
N/M
|
|
|
N/M
|
|
|||
|
|
Three Months Ended
|
||||||
|
|
December 30,
2018 |
|
December 24,
2017 |
||||
|
Expected income tax provision at federal statutory tax rate
|
$
|
117
|
|
|
$
|
(15
|
)
|
|
Benefits from establishing new U.S. net deferred tax assets
|
(570
|
)
|
|
—
|
|
||
|
Benefits from foreign income taxed at other than U.S. rates
|
4
|
|
|
7
|
|
||
|
Benefits related to the research and development tax credit
|
(24
|
)
|
|
1
|
|
||
|
Foreign-derived intangible income (FDII)
|
(41
|
)
|
|
—
|
|
||
|
Toll Charge from U.S. tax reform
|
—
|
|
|
5,307
|
|
||
|
Remeasurement of deferred taxes due to changes in statutory tax rate
|
—
|
|
|
567
|
|
||
|
Foreign withholding taxes
|
—
|
|
|
86
|
|
||
|
Other
|
5
|
|
|
(30
|
)
|
||
|
Income tax (benefit) expense
|
$
|
(509
|
)
|
|
$
|
5,923
|
|
|
|
Three Months Ended
|
||||||||||
|
(in millions)
|
December 30,
2018 |
|
December 24,
2017 |
|
Change
|
||||||
|
Revenues
|
|
|
|
|
|
||||||
|
Equipment and services
|
$
|
3,678
|
|
|
$
|
4,598
|
|
|
$
|
(920
|
)
|
|
Licensing
|
61
|
|
|
53
|
|
|
8
|
|
|||
|
Total revenues
|
$
|
3,739
|
|
|
$
|
4,651
|
|
|
$
|
(912
|
)
|
|
EBT (1)
|
$
|
598
|
|
|
$
|
955
|
|
|
$
|
(357
|
)
|
|
EBT as a % of revenues
|
16
|
%
|
|
21
|
%
|
|
(5
|
%)
|
|||
|
(1)
|
Earnings (loss) before taxes.
|
|
-
|
$700 million in lower MSM and accompanying unit shipments, primarily due to a decline in share at Apple
|
|
-
|
$280 million decrease due to lower average selling prices
|
|
-
|
$154 million in lower RFFE product revenues, primarily due to a decline in share at Apple
|
|
-
|
$92 million in lower connectivity product revenues
|
|
+
|
$256 million due to favorable product mix
|
|
-
|
decrease in QCT revenues
|
|
-
|
decrease in gross margin percentage, primarily driven by lower average selling prices, partially offset by higher-margin product mix and lower average unit costs
|
|
+
|
decrease in operating expenses,
primarily driven by actions under our Cost Plan
|
|
|
Three Months Ended
|
||||||||||
|
(in millions)
|
December 30,
2018 |
|
December 24,
2017 |
|
Change
|
||||||
|
Licensing revenues
|
$
|
1,018
|
|
|
$
|
1,266
|
|
|
$
|
(248
|
)
|
|
EBT
|
$
|
590
|
|
|
$
|
854
|
|
|
$
|
(264
|
)
|
|
EBT as a % of revenues
|
58
|
%
|
|
67
|
%
|
|
(9
|
%)
|
|||
|
-
|
$210 million in lower estimated revenues per unit compared to revenues per reported unit
|
|
-
|
$207 million decrease in estimated sales of CDMA-based products (including multi-mode products that also implement OFDMA) compared to reported sales of CDMA-based products
|
|
+
|
$150 million under an interim agreement with Huawei
|
|
+
|
$30 million increase in royalty revenues recognized related to devices sold in prior periods
|
|
-
|
higher research and development costs due to an increase in the amount of research and development expense allocated to QTL in fiscal 2019
|
|
-
|
lower QTL revenues
|
|
+
|
lower selling, general and administrative expenses resulting primarily from lower bad debt expense and lower litigation costs
|
|
|
Three Months Ended
|
||||||||||
|
(in millions)
|
December 30,
2018 |
|
December 24,
2017 |
|
Change
|
||||||
|
Equipment and services revenues
|
$
|
27
|
|
|
$
|
30
|
|
|
$
|
(3
|
)
|
|
EBT
|
8
|
|
|
11
|
|
|
(3
|
)
|
|||
|
-
|
$23 million net loss on investments in marketable equity securities
|
|
+
|
$20 million net gain on investments in non-marketable equity securities
|
|
•
|
In the second quarter of fiscal 2018, we announced a Cost Plan designed to align our cost structure to our long-term margin targets. As part of this plan, we continue to execute on a series of targeted actions 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, excluding litigation costs that are in excess of the baseline spend. In connection with this plan, we expect to incur additional restructuring and restructuring-related charges of up to
$50 million
, and since the inception of the Cost Plan, we have incurred a total of
$867 million
in net restructuring and restructuring-related charges.
|
|
•
|
Regulatory authorities in certain jurisdictions continue to investigate our business practices and institute proceedings against us, including the lawsuit filed against us by the United States Federal Trade Commission (FTC), which trial took place in January 2019, and other regulatory authorities may do so in the future. Additionally, certain of our
|
|
•
|
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 our licensees) are required to pay to us for use of our intellectual property. In the
first three months
of
fiscal 2019
, 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 them to pay the required royalties, and against Apple, as described more fully in this Quarterly Report in “Notes to Condensed Consolidated Financial Statements, Note 6. Commitments and Contingencies.” We did not record any revenues in
first three months
of
fiscal 2019
or in fiscal 2018 for royalties due on sales from Apple’s contract manufacturers, 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 significant 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. In the first quarter of fiscal 2019, we entered into a second interim agreement with Huawei in which Huawei agreed to make three quarterly payments of $150 million (for sales made in consecutive calendar quarters beginning with the quarter ended December 2018) as minimum, non-refundable payments for royalties due for sales of licensed products by Huawei during the relevant quarter while negotiations continue. We recognized $150 million of royalty revenues in the first quarter of fiscal 2019 under the interim agreement. These payments do not reflect the full amount of royalties due under the underlying license agreement. If we do not reach a final agreement with Huawei prior to the conclusion of the interim agreement, Huawei may not make any other payments or may not make full payments under the underlying license agreement, which may result in significant legal costs, due to exercising the dispute resolution provision in the license agreement, and will negatively impact our future revenues, as well as our financial condition, results of operations and cash flows until the dispute is resolved.
|
|
•
|
To position QTL for stability on a long-term basis, we have announced that our cellular standard-essential patent only licensing terms, including 3G, 4G and 5G through Release 15 for both single mode and multi-mode devices worldwide, will remain at the same rate, consistent with our licensing program established in China for 3G and 4G devices. A number of our licensees have entered into cellular standard-essential patent only agreements on a worldwide basis, and we expect more of our licensees may enter into such cellular standard-essential patent only agreements in the future. In addition, in fiscal 2018, we reduced the per unit royalty cap on smartphones. While we expect these developments to enhance stability for the long term, they negatively impact QTL royalty revenues.
|
|
•
|
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, and exacerbating the negative impact to our business and financial results if any of those companies do not utilize our chipsets;
|
|
•
|
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;
|
|
•
|
Decisions by certain companies to utilize our competitors’ integrated circuit products in all or a portion of their devices. For example, we have not been the sole supplier of modems for iPhone products beginning with products that launched in September 2016, as Apple utilizes modems from one or more of our competitors in a portion of such devices. Apple is solely using one or more of our competitors’ modems, rather than our modems, in its 2018 iPhone release and may take similar actions in the future. Accordingly, QCT revenues from modem sales for iPhones have declined in the first quarter of fiscal 2019 and may fluctuate 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 automotive, IoT and networking. Apple’s sourcing of integrated circuit products 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;
|
|
•
|
Further lengthening of replacement cycles as smartphone penetration increases and consumer demand is increasingly driven by new product launches and/or innovation cycles;
|
|
•
|
Continued growth of device share by Chinese OEMs in China and in regions outside of China; and
|
|
•
|
Increasing consumer demand for 3G/4G smartphone products in emerging regions driven by availability of lower-tier 3G/4G devices.
|
|
•
|
Current U.S./China trade relations may negatively impact our business, growth prospects and results of operations.
|
|
•
|
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 expect initial commercial 5G network deployments and device launches to begin in calendar 2019. We believe that 5G technologies will empower a new era of smartphones and connected devices. We also believe that 5G will drive transformation across industries beyond traditional cellular communications that will create new business models and new services. We believe it is important that we remain a leader in 5G technology development, standardization, intellectual property creation and licensing of 5G technologies, and to be a leading developer and supplier of 5G integrated circuit products and services in order to sustain and grow our business long term.
|
|
•
|
We continue to invest significant resources to develop our wireless baseband chipsets, and our converged computing/communications (Snapdragon) chipsets, which incorporate technologies in the following areas, among others: advancements in 4G and 5G, OFDM-based Wi-Fi, RFFE, connectivity, power management, graphics, audio and video codecs, multimedia, artificial intelligence (AI) and virtual/augmented reality, and all of which contribute to the expansion of our intellectual property portfolio. We are also investing in targeted opportunities that leverage our existing technical and business expertise to deploy new business models and enter and/or expand into new industry segments and applications, such as products for automotive, IoT (including the connected home, smart cities, wearables, voice and music and robotics), networking, computing and AI, such as machine learning, among others.
|
|
|
December 30,
2018 |
|
September 30,
2018 |
|
$ Change
|
|
% Change
|
|||||||
|
Cash, cash equivalents and marketable securities
|
$
|
10,350
|
|
|
$
|
12,123
|
|
|
$
|
(1,773
|
)
|
|
(15
|
%)
|
|
Accounts receivable, net
|
3,426
|
|
|
2,904
|
|
|
522
|
|
|
18
|
%
|
|||
|
Inventories
|
1,698
|
|
|
1,693
|
|
|
5
|
|
|
—
|
%
|
|||
|
Short-term debt
|
998
|
|
|
1,005
|
|
|
(7
|
)
|
|
(1
|
%)
|
|||
|
Long-term debt
|
15,388
|
|
|
15,365
|
|
|
23
|
|
|
—
|
%
|
|||
|
Noncurrent income taxes payable
|
2,174
|
|
|
2,312
|
|
|
(138
|
)
|
|
(6
|
%)
|
|||
|
|
Three Months Ended
|
|||||||||||||
|
|
December 30,
2018 |
|
December 24,
2017 |
|
$ Change
|
|
% Change
|
|||||||
|
Net cash provided by operating activities
|
$
|
356
|
|
|
$
|
1,762
|
|
|
$
|
(1,406
|
)
|
|
(80
|
%)
|
|
Net cash used by investing activities
|
(152
|
)
|
|
(3,261
|
)
|
|
3,109
|
|
|
(95
|
%)
|
|||
|
Net cash used by financing activities
|
(1,887
|
)
|
|
(165
|
)
|
|
(1,722
|
)
|
|
N/M
|
|
|||
|
•
|
We expect the majority of the charges incurred in connection with our Cost Plan will result in cash payments. Our restructuring accrual was
$73 million
at
December 30, 2018
, and we expect to incur additional restructuring and restructuring-related charges of up to
$50 million
.
|
|
•
|
Our purchase obligations at
December 30, 2018
, some of which relate to research and development activities and capital expenditures, totaled
$3.7 billion
and
$499 million
for fiscal 2019 and 2020, respectively, and
$309 million
thereafter.
|
|
•
|
Our research and development expenditures were
$1.3 billion
in the
first three months
of
fiscal 2019
and
$5.6 billion
in fiscal 2018, 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
$152 million
in the
first three months
of
fiscal 2019
and
$784 million
in fiscal 2018. We expect to continue to incur capital expenditures in the future to support our business, including research and development activities.
|
|
•
|
The EC imposed a fine on us, of which
$1.2 billion
was accrued at December 30, 2018 (based on the exchange rate at
December 30, 2018
, including related foreign currency gains and accrued interest). In the third quarter of 2018,
|
|
•
|
In August 2019, we have the option to acquire (and the minority owner has the option to sell) the minority ownership interest in the RF360 Holdings joint venture for $1.15 billion. The accreted value of such amount was included in other current liabilities at December 30, 2018.
|
|
•
|
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.
|
|
•
|
wireless operators and industries beyond traditional cellular communications deploy alternative technologies;
|
|
•
|
wireless operators delay next-generation network deployments, expansions or upgrades or delay moving customers to
3G/4G and 3G/4G/5G multi-mode devices, as well as 3G, 4G and 5G single-mode 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 and 5G wireless technologies, including unlicensed spectrum and shared spectrum technologies, 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 capacity;
|
|
•
|
our customers’ and licensees’ revenues and sales of products, particularly premium-tier products, and services using these technologies, and average selling prices (ASPs) of such products, decline, do not grow or do not grow 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 deployment of 5G technologies is delayed;
|
|
•
|
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; or
|
|
•
|
consumers’ rates of replacement of smartphones and other computing devices decline, do not grow or do not grow as anticipated.
|
|
•
|
differentiate our integrated circuit products with innovative technologies across multiple products and features (e.g., modem, radio frequency front-end (RFFE), graphics and 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;
|
|
•
|
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 and other computing devices, automobiles, wearables and voice and music and other connected devices and infrastructure products;
|
|
•
|
maintain 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 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 and 5G 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 and 5G 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 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, close the transactions and effectively integrate these new businesses, products and technologies;
|
|
•
|
create standalone value and contribute to the success of our existing businesses through acquisitions, joint ventures and other transactions, and by developing customer, licensee, vendor, distributor and other channel relationships in new industry segments and with disruptive technologies, products and services, such as products for automotive, IoT (including the connected home, smart cities, wearables, voice and music and robotics), networking, computing and AI, such as 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, commercialize and be a leading supplier of 5G integrated circuit products and services; and
|
|
•
|
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 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 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
|
|
•
|
natural disasters or geopolitical conflicts 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
|
|
•
|
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 or downward pressure on average selling prices;
|
|
•
|
Certain of our revenues that are derived from products that are sold in foreign currencies could decrease, resulting in lower revenues, cash flows and margins;
|
|
•
|
Certain of our revenues, such as royalties, that are derived from licensee or customer sales denominated in foreign currencies could decrease, resulting in lower revenues and cash flows;
|
|
•
|
Our foreign suppliers may raise their prices if they are impacted by currency fluctuations, resulting in higher than expected costs, lower margins and cash flows;
|
|
•
|
Certain of our costs that are denominated in foreign currencies could increase, resulting in higher than expected costs and cash outflows; and
|
|
•
|
Foreign exchange hedging exposes us to counterparty risk and may require the payment of structuring fees. If the foreign exchange hedges do not qualify for hedge accounting, the hedge results may cause earnings volatility. The foreign exchange hedging activities are designed to lessen earnings volatility; therefore, hedges may reduce the impact of currency fluctuations to certain revenues and costs.
|
|
|
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)
|
||||||
|
October 1, 2018 to October 28, 2018
|
3,777
|
|
|
$
|
65.36
|
|
|
3,777
|
|
|
$
|
8,609
|
|
|
October 29, 2018 to November 25, 2018
|
13,025
|
|
|
59.25
|
|
|
13,025
|
|
|
7,838
|
|
||
|
November 26, 2018 to December 30, 2018
|
—
|
|
|
—
|
|
|
—
|
|
|
7,838
|
|
||
|
Total
|
16,802
|
|
|
|
|
|
16,802
|
|
|
|
|
||
|
(1)
|
Average Price Paid Per Share excludes cash paid for commissions.
|
|
(2)
|
On
July 26, 2018
, we announced a new repurchase program authorizing us to repurchase up to
$30 billion
of our common stock. At
December 30, 2018
,
$7.8 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
|
|
2.1
|
|
|
8-K
|
|
000-19528/ 161339867
|
|
1/13/2016
|
|
2.1
|
|
|
|
|
2.2
|
|
|
10-Q
|
|
000-19528/ 17546539
|
|
1/25/2017
|
|
2.3
|
|
|
|
|
2.3
|
|
|
10-Q
|
|
000-19528/ 17546539
|
|
1/25/2017
|
|
2.4
|
|
|
|
|
2.4
|
|
|
10-Q
|
|
000-19528/
17770305
|
|
4/19/2017
|
|
2.6
|
|
|
|
|
3.1
|
|
|
8-K
|
|
000-19528/ 18766678
|
|
4/20/2018
|
|
3.1
|
|
|
|
|
3.2
|
|
|
8-K
|
|
000-19528/ 18957073
|
|
7/17/2018
|
|
3.1
|
|
|
|
|
4.1
|
|
|
8-K
|
|
000-19528/ 15880967
|
|
5/21/2015
|
|
4.1
|
|
|
|
|
4.2
|
|
|
8-K
|
|
000-19528/ 15880967
|
|
5/21/2015
|
|
4.2
|
|
|
|
|
4.3
|
|
|
8-K
|
|
000-19528/ 15880967
|
|
5/21/2015
|
|
4.4
|
|
|
|
|
4.4
|
|
|
8-K
|
|
000-19528/ 15880967
|
|
5/21/2015
|
|
4.6
|
|
|
|
|
4.5
|
|
|
8-K
|
|
000-19528/ 15880967
|
|
5/21/2015
|
|
4.7
|
|
|
|
|
4.6
|
|
|
8-K
|
|
000-19528/ 15880967
|
|
5/21/2015
|
|
4.8
|
|
|
|
|
4.7
|
|
|
8-K
|
|
000-19528/ 15880967
|
|
5/21/2015
|
|
4.9
|
|
|
|
|
4.8
|
|
|
8-K
|
|
000-19528/ 15880967
|
|
5/21/2015
|
|
4.10
|
|
|
|
|
4.9
|
|
|
8-K
|
|
000-19528/ 17882336
|
|
5/31/2017
|
|
4.2
|
|
|
|
|
4.10
|
|
|
8-K
|
|
000-19528/ 17882336
|
|
5/31/2017
|
|
4.5
|
|
|
|
|
4.11
|
|
|
8-K
|
|
000-19528/ 17882336
|
|
5/31/2017
|
|
4.8
|
|
|
|
|
4.12
|
|
|
8-K
|
|
000-19528/ 17882336
|
|
5/31/2017
|
|
4.9
|
|
|
|
|
4.13
|
|
|
8-K
|
|
000-19528/ 17882336
|
|
5/31/2017
|
|
4.10
|
|
|
|
|
Exhibit
Number
|
|
Exhibit Description
|
|
Form
|
|
File No./ Film No.
|
|
Date of First Filing
|
|
Exhibit Number
|
|
Filed Herewith
|
|
4.14
|
|
|
8-K
|
|
000-19528/ 17882336
|
|
5/31/2017
|
|
4.11
|
|
|
|
|
10.62
|
|
|
|
|
|
|
|
|
|
|
X
|
|
|
31.1
|
|
|
|
|
|
|
|
|
|
|
X
|
|
|
31.2
|
|
|
|
|
|
|
|
|
|
|
X
|
|
|
32.1
|
|
|
|
|
|
|
|
|
|
|
X
|
|
|
32.2
|
|
|
|
|
|
|
|
|
|
|
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 |
|---|---|---|---|
Primary Responsibilities The HR and Compensation Committee designs the compensation plans and determines compensation levels for our Chief Executive Officer, other executive officers and directors; administers and approves stock offerings under our employee stock purchase and long-term incentive plans; reviews our employee compensation and talent management policies and practices; administers our incentive compensation repayment policy; reviews our stock ownership guidelines for executive officers and directors; reviews our policies, programs and initiatives focusing on workforce diversity, equity and inclusion; monitors the effectiveness of strategic initiatives designed to attract, engage, motivate and retain employees (human capital management); and reviews executive officer development and succession planning, among other functions. | |||
A significant portion of our executive officers’ compensation varies with the Company’s performance. For fiscal 2024, 61% of our CEO’s target total direct compensation and 60% of our other named executive officers’ (NEOs’) aggregate target total direct compensation was based on Company performance. Our LTIP and Change in Control Severance Plan include a “double-trigger” provision for vesting of equity in connection with a change in control. In the event of a change in control where the acquirer assumes our outstanding unvested equity awards, the vesting of an executive officer’s awards would accelerate only if the executive officer experiences a qualifying termination of employment in connection with the change in control. Awards that are not assumed will vest in accordance with the terms of the Long-Term Incentive Plan (LTIP) and applicable award agreements. We have a balanced approach to our incentive compensation programs with differentiated measures and time periods, and an ACIP modifier for human capital advancements. Our fiscal 2024 Annual Cash Incentive Plan (ACIP) is based on one year Adjusted Revenues and Adjusted Operating Income, with a modifier for human capital advancements. Performance stock units (PSUs) are based on three-year relative total stockholder return (RTSR) and Adjusted Earnings Per Share (EPS) performance and have a three-year cliff vest. Restricted stock units (RSUs) vest annually over three years. We have limits on the amounts of variable compensation that may be earned. Earned amounts under our ACIP are limited to 2x target amounts, and earned PSUs are limited to 2x target shares. We further limit earned RTSR PSUs to no more than the target shares if absolute total stockholder return (TSR) is negative over the three-year performance period, regardless of the level of RTSR. We have an incentive compensation repayment (“clawback”) policy that is applicable to cash and equity incentive compensation. We require executive officers to repay to us earned amounts under our ACIP and PSUs if required by our clawback policy, applicable regulations or stock exchange rules. A copy of our clawback policy is publicly filed with our Annual Report on Form 10-K. We have robust stock ownership guidelines. Our CEO is required to own 10x his salary and our other executive officers are required to own 2x their respective salaries in our common stock. As of December 15, 2024, all of our NEOs met their stock ownership guidelines. Additional information regarding stock ownership of management is contained in the “Stock Ownership of Certain Beneficial Owners and Management” section on page 47 . We manage potential compensation-related risks to the Company. We perform annual risk assessments for our executive compensation program, as well as incentive arrangements below the executive level. This review is supported by Pay Governance, the HR and Compensation Committee’s independent compensation consultant. We engage independent advisors. The HR and Compensation Committee obtains advice and assistance from external legal and other advisors. Its independent compensation consultant, Pay Governance, provides information and advice regarding compensation philosophy, objectives and strategy, including trends and regulatory and governance considerations related to executive compensation. | |||
| |
Name and Principal Position
|
| |
Year
|
| |
Salary
($) |
| |
Bonus
($) |
| |
Stock
Awards ($) |
| |
Non-Equity
Incentive Plan Compensation ($) |
| |
All Other
Compensation ($) |
| |
Total
($) |
| |||||||||||||||||||||
| |
Cristiano R. Amon
President and Chief Executive Officer |
| | | | 2024 | | | | | | 1,350,000 | | | | | | — | | | | | | 20,000,084 | | | | | | 3,753,000 | | | | | | 828,490 | | | | | | 25,931,574 | | |
| | | | 2023 | | | | | | 1,346,154 | | | | | | — | | | | | | 21,110,241 | | | | | | 540,000 | | | | | | 493,940 | | | | | | 23,490,335 | | | |||
| | | | 2022 | | | | | | 1,150,000 | | | | | | — | | | | | | — | | | | | | 2,737,000 | | | | | | 867,113 | | | | | | 4,754,113 | | | |||
| |
Akash Palkhiwala
Chief Financial Officer and Chief Operating Officer |
| | | | 2024 | | | | | | 848,151 | | | | | | — | | | | | | 10,000,421 | | | | | | 1,877,000 | | | | | | 106,194 | | | | | | 12,831,766 | | |
| | | | 2023 | | | | | | 750,214 | | | | | | — | | | | | | 7,390,206 | | | | | | 225,000 | | | | | | 151,539 | | | | | | 8,516,959 | | | |||
| | | | 2022 | | | | | | 750,214 | | | | | | — | | | | | | — | | | | | | 1,339,000 | | | | | | 186,556 | | | | | | 2,275,770 | | | |||
| |
James H. Thompson
Chief Technology Officer |
| | | | 2024 | | | | | | 900,058 | | | | | | — | | | | | | 10,000,205 | | | | | | 1,877,000 | | | | | | 171,614 | | | | | | 12,948,877 | | |
| | | | 2023 | | | | | | 900,058 | | | | | | — | | | | | | 9,500,276 | | | | | | 270,000 | | | | | | 123,544 | | | | | | 10,793,878 | | | |||
| | | | 2022 | | | | | | 900,058 | | | | | | — | | | | | | — | | | | | | 1,607,000 | | | | | | 149,775 | | | | | | 2,656,833 | | | |||
| |
Alexander H. Rogers
President, Qualcomm Technology Licensing and Global Affairs |
| | | | 2024 | | | | | | 800,010 | | | | | | — | | | | | | 6,000,327 | | | | | | 1,557,000 | | | | | | 80,046 | | | | | | 8,437,383 | | |
| | | | 2023 | | | | | | 800,010 | | | | | | — | | | | | | 6,330,200 | | | | | | 224,000 | | | | | | 145,453 | | | | | | 7,499,663 | | | |||
| | | | 2022 | | | | | | 800,010 | | | | | | — | | | | | | — | | | | | | 1,333,000 | | | | | | 153,777 | | | | | | 2,286,787 | | | |||
| |
Ann Chaplin
General Counsel and Corporate Secretary |
| | | | 2024 | | | | | | 700,000 | | | | | | — | | | | | | 5,250,210 | | | | | | 973,000 | | | | | | 42,750 | | | | | | 6,965,960 | | |
| | | | 2023 | | | | | | 700,000 | | | | | | — | | | | | | 4,480,192 | | | | | | 140,000 | | | | | | 207,970 | | | | | | 5,528,162 | | | |||
| | | | 2022 | | | | | | 619,231 | | | | | | 1,250,000 | | | | | | 5,500,250 | | | | | | 833,000 | | | | | | 157,255 | | | | | | 8,359,736 | | | |||
Customers
Price
Yield
| Owner | Position | Direct Shares | Indirect Shares |
|---|---|---|---|
| THOMPSON JAMES H | - | 277,799 | 45,453 |
| THOMPSON JAMES H | - | 242,114 | 45,453 |
| Palkhiwala Akash J. | - | 53,112 | 0 |
| AMON CRISTIANO R | - | 40,500 | 172,015 |
| ROGERS ALEXANDER H | - | 23,637 | 0 |
| ROGERS ALEXANDER H | - | 20,762 | 0 |
| ACE HEATHER S | - | 13,196 | 22,793 |
| MCLAUGHLIN MARK D | - | 8,903 | 23,138 |
| TRICOIRE JEAN-PASCAL | - | 8,301 | 0 |
| CHAPLIN ANN C | - | 7,362 | 0 |
| Smit Neil | - | 6,267 | 0 |
| CATHEY JAMES J | - | 4,972 | 0 |
| CATHEY JAMES J | - | 4,450 | 0 |
| Henderson Jeffrey William | - | 2,105 | 0 |
| MYERS MARIE | - | 677 | 0 |
| MARTIN NEIL | - | 461 | 0 |
| MARTIN NEIL | - | 247 | 0 |
| ACEVEDO SYLVIA | - | 54 | 0 |
| Miller Jamie S | - | 0 | 6,018 |
| AMON CRISTIANO R | - | 0 | 232,661 |