000-19528 | 95-3685934 | |
(Commission File Number) | (IRS Employer Identification No.) |
5775 Morehouse Drive, San Diego, CA | 92121 | |
(Address of principal executive offices) | (Zip Code) |
Exhibit No. | Description | |
99.1 | July 24, 2013 Corrected Press Release by QUALCOMM Incorporated |
QUALCOMM Incorporated | |||||
Date: | July 24, 2013 | By: | /s/ George S. Davis | ||
George S. Davis, | |||||
Executive Vice President and Chief Financial Officer |
Exhibit No. | Description | |
99.1 | July 24, 2013 Corrected Press Release by QUALCOMM Incorporated |
• | Revenues: 1 $6.24 billion, up 35 percent year-over-year (y-o-y) and 2 percent sequentially. |
• | Operating income: 1 $1.68 billion, up 21 percent y-o-y and down 11 percent sequentially. |
• | Net income: 2 $1.58 billion, up 31 percent y-o-y and down 15 percent sequentially. |
• | Diluted earnings per share: 2 $0.90, up 30 percent y-o-y and down 15 percent sequentially. |
• | Effective tax rate: 1 17 percent for the quarter. |
• | Operating cash flow: $2.08 billion, up 125 percent y-o-y; 33 percent of revenues. |
• | Return of capital to stockholders: $1.64 billion, including $1.04 billion through repurchases of 16.7 million shares of common stock and $604 million, or $0.35 per share, of cash dividends paid. |
• | Revenues: $6.24 billion, up 35 percent y-o-y and 2 percent sequentially. |
• | Operating income: $2.04 billion, up 18 percent y-o-y and down 9 percent sequentially. |
• | Net income: $1.82 billion, up 23 percent y-o-y and down 12 percent sequentially. |
• | Diluted earnings per share: $1.03, up 21 percent y-o-y and down 12 percent sequentially. |
• | Effective tax rate: 18 percent for the quarter. |
• | Free cash flow (defined as net cash from operating activities less capital expenditures): $1.85 billion, up 181 percent y-o-y; 30 percent of revenues. |
• | MSMTM chip shipments: 172 million units, up 22 percent y-o-y and down 1 percent sequentially. |
• | March quarter total reported device sales: approximately $56.5 billion, up 18 percent y-o-y and down 8 percent sequentially. |
◦ | March quarter estimated 3G/4G device shipments: approximately 244 to 248 million units, at an estimated average selling price of approximately $227 to $233 per unit. |
($ in millions) | Non-GAAP | QSI | Share-Based Compensation | Acquisition-Related Items | GAAP | ||||||||||||||
Third quarter fiscal 2013 | $ | 1,130 | $ | 1 | $ | 166 | $ | 1 | $ | 1,298 | |||||||||
As % of revenues | 18 | % | 21 | % | |||||||||||||||
Third quarter fiscal 2012 | $ | 832 | $ | 1 | $ | 141 | $ | — | $ | 974 | |||||||||
As % of revenues | 18 | % | 21 | % | |||||||||||||||
Year-over-year change ($) | 36 | % | N/M | 18 | % | N/M | 33 | % |
($ in millions) | Non-GAAP | QSI | Share-Based Compensation | Acquisition-Related Items | GAAP | ||||||||||||||
Third quarter fiscal 2013 | $ | 505 | $ | 6 | $ | 96 | $ | 6 | $ | 613 | |||||||||
As % of revenues | 8 | % | 10 | % | |||||||||||||||
Third quarter fiscal 2012 | $ | 423 | $ | 10 | $ | 104 | $ | 7 | $ | 544 | |||||||||
As % of revenues | 9 | % | 12 | % | |||||||||||||||
Year-over-year change ($) | 19 | % | N/M | (8 | %) | N/M | 13 | % |
FOURTH FISCAL QUARTER | |||||||
Q4 FY12 Results | Current Guidance Q4 FY13 Estimates | ||||||
Revenues | $4.87 | B | $5.9B - $6.6B | ||||
Year-over-year change | increase 21% - 35% | ||||||
Non-GAAP Diluted earnings per share (EPS) | $0.89 | $1.02 - $1.10 | |||||
Year-over-year change | increase 15% - 24% | ||||||
Diluted EPS attributable to QSI | $0.01 | $0.00 | |||||
Diluted EPS attributable to share-based compensation | ($0.13 | ) | ($0.13 | ) | |||
Diluted EPS attributable to acquisition-related items | ($0.04 | ) | ($0.03 | ) | |||
Diluted EPS attributable to tax items | $0.01 | N/A | |||||
GAAP Diluted EPS | $0.73 | $0.86 - $0.94 | |||||
Year-over-year change | increase 18% - 29% | ||||||
Metrics | |||||||
MSM chip shipments | 141M | 171M - 181M | |||||
Year-over-year change | increase 21% - 28% | ||||||
Total reported device sales (1) | approx. $46.5B* | approx. $55.0B - $60.0B* | |||||
Year-over-year change | increase 18% - 29% | ||||||
*Est. sales in June quarter, reported in September quarter |
FISCAL YEAR | ||||||||||
FY 2012 Results (2) | Prior Guidance FY 2013 Estimates (3) | Current Guidance FY 2013 Estimates (3) | ||||||||
Revenues | $19.12 | B | $24.0B - $25.0B | $24.3B - $25.0B | ||||||
Year-over-year change | increase 26% - 31% | increase 27% - 31% | ||||||||
Non-GAAP Diluted earnings per share (EPS) | $3.71 | $4.40 - $4.55 | $4.48 - $4.56 | |||||||
Year-over-year change | increase 19% - 23% | increase 21% - 23% | ||||||||
Diluted EPS attributable to QSI | $0.40 | $0.01 | $0.04 | |||||||
Diluted EPS attributable to share-based compensation | ($0.47 | ) | ($0.51 | ) | ($0.50 | ) | ||||
Diluted EPS attributable to acquisition-related items | ($0.14 | ) | ($0.16 | ) | ($0.16 | ) | ||||
Diluted EPS attributable to tax items | $0.01 | $0.04 | $0.04 | |||||||
GAAP Diluted EPS | $3.51 | $3.78 - $3.93 | $3.90 - $3.98 | |||||||
Year-over-year change | increase 8% - 12% | increase 11% - 13% | ||||||||
Metrics | ||||||||||
Est. fiscal year* CDMA-based device average selling price range (1) | approx. $216 - $222 | approx. $216 - $224 | approx. $223 - $229 | |||||||
*Shipments in Sept. to June quarters, reported in Dec. to Sept. quarters |
CALENDAR YEAR Device Estimates (1) | ||||
Calendar 2012 Estimates | Prior Guidance Calendar 2013 Estimates | Current Guidance Calendar 2013 Estimates | ||
Est. 3G/4G device shipments | ||||
March quarter | approx. 206M - 211M | not provided | approx. 244M - 248M | |
June quarter | approx. 210M - 214M | not provided | not provided | |
September quarter | approx. 233M - 237M | not provided | not provided | |
December quarter | approx. 279M - 283M | not provided | not provided | |
Est. calendar year range (approx.) | 928M - 945M | 1,015M - 1,085M | 1,015M - 1,085M | |
Est. calendar year midpoint (approx.) (4) | 937M | 1,050M | 1,050M |
(1) | Total reported device sales is the sum of all reported sales in U.S. dollars (as reported to us by our licensees) of all licensed CDMA-based, OFDMA-based and CDMA/OFDMA multimode subscriber devices (including handsets, modules, modem cards and other subscriber devices) by our licensees during a particular period (collectively, 3G/4G devices). The reported quarterly estimated ranges of average selling prices (ASPs) and unit shipments are determined based on the information as reported to us by our licensees during the relevant period and our own estimates of the selling prices and unit shipments for licensees that do not provide such information. Not all licensees report sales, selling prices and/or unit shipments the same way (e.g., some licensees report selling prices net of permitted deductions, such as transportation, insurance and packing costs, while other licensees report selling prices and then identify the amount of permitted deductions in their reports), and the way in which licensees report such information may change from time to time. Total reported device sales, estimated unit shipments and estimated ASPs for a particular period may include prior period activity that was not reported by the licensee until such particular period. |
(2) | FY 2012 results for QSI and GAAP included $0.44 EPS related to a $1.2 billion gain associated with the sale of substantially all of our 700 MHz spectrum, which was recognized in discontinued operations and was excluded from Non-GAAP results. |
(3) | FY 2013 guidance for tax items includes $0.04 EPS related to a tax benefit that resulted from the retroactive reinstatement of the federal R&D tax credit related to fiscal 2012, which was excluded from Non-GAAP results. |
(4) | The midpoints of the estimated calendar year ranges are identified for comparison purposes only and do not indicate a higher degree of confidence in the midpoints. |
SEGMENTS | QCT | QTL | QWI | Non-GAAP Reconciling Items (1) | Non-GAAP (2) | QSI (2) | Share-Based Compensation (2) | Acquisition-Related Items (2) | Tax Items | GAAP | |||||||||||||||||
Q3 - FISCAL 2013 | |||||||||||||||||||||||||||
Revenues | $4,222 | $1,867 | $158 | ($4) | $6,243 | $— | $— | $— | $— | $6,243 | |||||||||||||||||
Change from prior year | 47 | % | 17 | % | (1 | %) | N/M | 35 | % | 35 | % | ||||||||||||||||
Change from prior quarter | 8 | % | (9 | %) | 2 | % | N/M | 2 | % | 2 | % | ||||||||||||||||
Operating income (loss) | $2,035 | ($7) | ($280) | ($71) | $— | $1,677 | |||||||||||||||||||||
Change from prior year | 18 | % | 36 | % | (6 | %) | (16 | %) | 21 | % | |||||||||||||||||
Change from prior quarter | (9 | %) | (40 | %) | (4 | %) | 14 | % | (11 | %) | |||||||||||||||||
EBT | $738 | $1,633 | ($16) | ($145) | $2,210 | $51 | ($280) | ($71) | $— | $1,910 | |||||||||||||||||
Change from prior year | 56 | % | 16 | % | N/M | N/M | 15 | % | N/M | (6 | %) | (16 | %) | 21 | % | ||||||||||||
Change from prior quarter | 8 | % | (9 | %) | N/M | N/M | (10 | %) | 55 | % | (4 | %) | 14 | % | (11 | %) | |||||||||||
EBT as % of revenues | 17 | % | 87 | % | N/M | N/M | 35 | % | 31 | % | |||||||||||||||||
Net income (loss) | $1,823 | $43 | ($222) | ($64) | $— | $1,580 | |||||||||||||||||||||
Change from prior year | 23 | % | N/M | (6 | %) | (10 | %) | N/A | 31 | % | |||||||||||||||||
Change from prior quarter | (12 | %) | 19 | % | (1 | %) | 20 | % | N/M | (15 | %) | ||||||||||||||||
Diluted EPS | $1.03 | $0.02 | ($0.13) | ($0.04) | $— | $0.90 | |||||||||||||||||||||
Change from prior year | 21 | % | N/M | (8 | %) | (33 | %) | N/A | 30 | % | |||||||||||||||||
Change from prior quarter | (12 | %) | — | % | (8 | %) | 20 | % | N/M | (15 | %) | ||||||||||||||||
Diluted shares used | 1,765 | 1,765 | 1,765 | 1,765 | 1,765 | 1,765 | |||||||||||||||||||||
Q2 - FISCAL 2013 | |||||||||||||||||||||||||||
Revenues | $3,916 | $2,057 | $155 | ($4) | $6,124 | $— | $— | $— | $— | $6,124 | |||||||||||||||||
Operating income (loss) | 2,233 | (5) | (268) | (83) | $ | 1,877 | |||||||||||||||||||||
EBT | $681 | $1,803 | $— | ($30) | 2,454 | 33 | (268) | (83) | $ | 2,136 | |||||||||||||||||
Net income (loss) | 2,066 | 36 | (220) | (80) | 64 | 1,866 | |||||||||||||||||||||
Diluted EPS | $1.17 | $0.02 | ($0.12) | ($0.05) | $0.04 | $1.06 | |||||||||||||||||||||
Diluted shares used | 1,763 | 1,763 | 1,763 | 1,763 | 1,763 | 1,763 | |||||||||||||||||||||
Q3 - FISCAL 2012 | |||||||||||||||||||||||||||
Revenues | $2,869 | $1,593 | $160 | $4 | $4,626 | $— | $— | $— | $— | $4,626 | |||||||||||||||||
Operating income (loss) | 1,718 | (11) | (264) | (61) | $ | 1,382 | |||||||||||||||||||||
EBT | $472 | $1,407 | ($6) | $49 | 1,922 | (16) | (264) | (61) | $ | 1,581 | |||||||||||||||||
Discontinued operations, net of tax | — | (3) | — | — | — | (3) | |||||||||||||||||||||
Net income (loss) | 1,486 | (11) | (210) | (58) | — | 1,207 | |||||||||||||||||||||
Diluted EPS | $0.85 | ($0.01) | ($0.12) | ($0.03) | $— | $0.69 | |||||||||||||||||||||
Diluted shares used | 1,758 | 1,758 | 1,758 | 1,758 | 1,758 | 1,758 | |||||||||||||||||||||
Q4 - FISCAL 2012 | |||||||||||||||||||||||||||
Revenues | $3,129 | $1,572 | $161 | $9 | $4,871 | $— | $— | $— | $— | $4,871 | |||||||||||||||||
Operating income (loss) | 1,612 | (4) | (284) | (89) | $ | 1,235 | |||||||||||||||||||||
EBT | $486 | $1,370 | ($1) | $65 | 1,920 | (21) | (284) | (89) | $ | 1,526 | |||||||||||||||||
Discontinued operations, net of tax | — | 23 | — | — | — | 23 | |||||||||||||||||||||
Net income (loss) | 1,547 | 14 | (222) | (78) | 10 | 1,271 | |||||||||||||||||||||
Diluted EPS | $0.89 | $0.01 | ($0.13) | ($0.04) | $0.01 | $0.73 | |||||||||||||||||||||
Diluted shares used | 1,745 | 1,745 | 1,745 | 1,745 | 1,745 | 1,745 |
SEGMENTS | QCT | QTL | QWI | Non-GAAP Reconciling Items (1) | Non-GAAP (2) | QSI (2) | Share-Based Compensation (2) | Acquisition-Related Items (2) | Tax Items | GAAP | ||||||||||||||||
9 MONTHS - FISCAL 2013 | ||||||||||||||||||||||||||
Revenues | $12,258 | $5,680 | $459 | ($12) | $18,385 | $— | $— | $— | $— | $18,385 | ||||||||||||||||
Change from prior year | 36 | % | 19 | % | (3 | %) | N/M | 29 | % | 29 | % | |||||||||||||||
Operating income (loss) | $6,716 | ($20) | ($829) | ($225) | $— | $5,642 | ||||||||||||||||||||
Change from prior year | 22 | % | 82 | % | (10 | %) | (26 | %) | 27 | % | ||||||||||||||||
EBT | $2,487 | $4,968 | ($20) | ($75) | $7,360 | $66 | ($829) | ($225) | $— | $6,372 | ||||||||||||||||
Change from prior year | 37 | % | 18 | % | (33 | %) | N/M | 20 | % | N/M | (10 | %) | (26 | %) | 27 | % | ||||||||||
EBT as % of revenues | 20 | % | 87 | % | N/M | N/M | 40 | % | 35 | % | ||||||||||||||||
Net income (loss) | $6,094 | $67 | ($661) | ($212) | $64 | $5,352 | ||||||||||||||||||||
Change from prior year | 24 | % | (90 | %) | (12 | %) | (28 | %) | N/M | 11 | % | |||||||||||||||
Diluted EPS | $3.46 | $0.04 | ($0.38) | ($0.12) | $0.04 | $3.04 | ||||||||||||||||||||
Change from prior year | 22 | % | (90 | %) | (12 | %) | (33 | %) | N/M | 9 | % | |||||||||||||||
Diluted shares used | 1,760 | 1,760 | 1,760 | 1,760 | 1,760 | 1,760 | ||||||||||||||||||||
9 MONTHS - FISCAL 2012 | ||||||||||||||||||||||||||
Revenues | $9,012 | $4,755 | $471 | $13 | $14,251 | $— | $— | $— | $— | $14,251 | ||||||||||||||||
Operating income (loss) | 5,489 | (112) | (751) | (178) | — | 4,448 | ||||||||||||||||||||
EBT | $1,810 | $4,215 | ($15) | $105 | 6,115 | (149) | (751) | (178) | — | 5,037 | ||||||||||||||||
Discontinued operations, net of tax | — | 754 | (1) | — | — | 753 | ||||||||||||||||||||
Net income (loss) | 4,917 | 675 | (589) | (165) | — | 4,838 | ||||||||||||||||||||
Diluted EPS | $2.83 | $0.39 | ($0.34) | ($0.09) | $— | $2.78 | ||||||||||||||||||||
Diluted shares used | 1,740 | 1,740 | 1,740 | 1,740 | 1,740 | 1,740 | ||||||||||||||||||||
12 MONTHS - FISCAL 2012 | ||||||||||||||||||||||||||
Revenues | $12,141 | $6,327 | $633 | $20 | $19,121 | $— | $— | $— | $— | $19,121 | ||||||||||||||||
Operating income (loss) | 7,100 | (116) | (1,035) | (267) | — | 5,682 | ||||||||||||||||||||
EBT | $2,296 | $5,585 | ($15) | $168 | 8,034 | (170) | (1,035) | (267) | — | 6,562 | ||||||||||||||||
Discontinued operations, net of tax | — | 777 | (1) | — | — | 776 | ||||||||||||||||||||
Net income (loss) | 6,463 | 690 | (811) | (243) | 10 | 6,109 | ||||||||||||||||||||
Diluted EPS | $3.71 | $0.40 | ($0.47) | ($0.14) | $0.01 | $3.51 | ||||||||||||||||||||
Diluted shares used | 1,741 | 1,741 | 1,741 | 1,741 | 1,741 | 1,741 |
(1) | Non-GAAP reconciling items related to revenues consisted primarily of nonreportable segment revenues less intersegment eliminations. Non-GAAP reconciling items related to earnings before taxes consist primarily of certain costs of equipment and services revenues, research and development expenses, sales and marketing expenses, other operating expenses and certain investment income or losses and interest expense that are not allocated to the segments for management reporting purposes; nonreportable segment results; and the elimination of intersegment profit. |
(2) | At fiscal year end, the sum of the quarterly tax provision (benefit) for each column equals the annual tax provision (benefit) for each column computed in accordance with GAAP. In interim quarters, the sum of these provisions (benefits) may not equal the total GAAP tax provision, and this difference is allocated to tax provisions (benefits) among the columns. |
• | QSI is excluded because the Company expects to exit its strategic investments at various times, and the effects of fluctuations in the value of such investments and realized gains or losses are viewed by management as unrelated to the Company’s operational performance. |
• | Share-based compensation expense primarily relates to restricted stock units and stock options. Certain share-based compensation is excluded because management views such expenses as unrelated to the operating activities of the Company’s ongoing core businesses. Further, the fair values of share-based awards are affected by factors that are variable on each grant date, which may include the Company’s stock price, stock market volatility, expected award life, risk-free interest rates and expected dividend payouts in future years. |
• | Acquisition-related items relate to amortization and impairment of certain intangible assets, recognition of the step-up of inventories to fair value and the related tax effects of these items starting with acquisitions completed in the third quarter of fiscal 2011, as well as any tax effects from restructuring the ownership of such acquired assets. Additionally, starting with acquisitions completed in the fourth quarter of fiscal 2012, the Company began excluding expenses related to the termination of contracts that limit the use of the acquired intellectual property. These acquisition-related items are excluded and are not allocated to the Company’s segments because management views such expenses as unrelated to the operating activities of the Company’s ongoing core businesses. In addition, these charges are impacted by the size and timing of acquisitions, potentially obscuring period to period comparisons of the Company’s operating businesses. |
• | Certain tax items that were recorded in each fiscal year presented, but that were unrelated to the fiscal year in which they were recorded, are excluded in order to provide a clearer understanding of the Company’s ongoing Non-GAAP tax rate and after tax earnings. |
Non-GAAP Results | QSI | Share-Based Compensation | Acquisition-Related Items (a) | GAAP Results | ||||||||||||||||||||||
($ in millions, except per share data) | ||||||||||||||||||||||||||
Cost of equipment and services revenues | $ | 2,415 | $ | — | $ | 18 | $ | 64 | $ | 2,497 | ||||||||||||||||
R&D | 1,130 | 1 | 166 | 1 | 1,298 | |||||||||||||||||||||
SG&A | 505 | 6 | 96 | 6 | 613 | |||||||||||||||||||||
Other operating expenses | 158 | (b) | — | — | — | 158 | ||||||||||||||||||||
Operating income (loss) | 2,035 | (7 | ) | (280 | ) | (71 | ) | 1,677 | ||||||||||||||||||
Investment income, net | $ | 175 | (c) | $ | 58 | (d) | $ | — | $ | — | $ | 233 | ||||||||||||||
Tax rate | 18 | % | 20 | % | 21 | % | 10 | % | 17 | % | ||||||||||||||||
Net income (loss) | $ | 1,823 | $ | 43 | $ | (222 | ) | $ | (64 | ) | $ | 1,580 | ||||||||||||||
Diluted earnings (loss) per share (EPS) | $ | 1.03 | $ | 0.02 | $ | (0.13 | ) | $ | (0.04 | ) | $ | 0.90 | ||||||||||||||
Operating cash flow | $ | 2,157 | $ | (5 | ) | $ | (75 | ) | $ | — | $ | 2,077 | ||||||||||||||
Operating cash flow as % of revenues | 35 | % | N/A | N/A | N/A | 33 | % | |||||||||||||||||||
Free cash flow (e) | $ | 1,850 | $ | (12 | ) | $ | (75 | ) | $ | — | $ | 1,763 | ||||||||||||||
Free cash flow as % of revenues | 30 | % | N/A | N/A | N/A | 28 | % |
(a) | Included amortization and impairment of certain intangible assets and the recognition of the step-up of inventories to fair value. |
(b) | Included a $158 million loss, or $0.06 per share, that resulted from an impairment charge on certain long-lived assets related to our QMT division. |
(c) | Included $179 million in interest and dividend income, $15 million in net realized gains on investments and $5 million in net gains on derivatives, partially offset by $22 million in other-than-temporary losses on investments, $1 million in losses on deconsolidation of subsidiaries and $1 million in interest expense. |
(d) | Included $45 million in net realized gains on investments, $22 million in gains on deconsolidation of subsidiaries and $3 million in interest and dividend income, partially offset by $6 million in interest expense, $5 million in other-than-temporary losses on investments and $1 million in equity in net losses of investees. |
(e) | Free cash flow is defined as net cash provided by operating activities less capital expenditures. Reconciliation of these amounts is included in the “Reconciliation of Non-GAAP Free Cash Flows to Net Cash Provided by Operating Activities (GAAP) and Other Supplemental Disclosures” for the three months ended June 30, 2013 included herein. |
Non-GAAP Results | QSI | Share-Based Compensation | Acquisition-Related Items (a) | Tax Items (b) | GAAP Results | ||||||||||||||||||||||||||
($ in millions, except per share data) | |||||||||||||||||||||||||||||||
Cost of equipment and services revenues | $ | 6,848 | $ | — | $ | 55 | $ | 203 | $ | — | $ | 7,106 | |||||||||||||||||||
R&D | 3,135 | 3 | 478 | 2 | — | 3,618 | |||||||||||||||||||||||||
SG&A | 1,528 | 17 | 296 | 20 | — | 1,861 | |||||||||||||||||||||||||
Other operating expenses | 158 | (c) | — | — | — | 158 | |||||||||||||||||||||||||
Operating income (loss) | 6,716 | (20 | ) | (829 | ) | (225 | ) | — | 5,642 | ||||||||||||||||||||||
Investment income, net | $ | 644 | (d) | $ | 86 | (e) | $ | — | $ | — | $ | — | $ | 730 | |||||||||||||||||
Tax rate | 17 | % | 9 | % | 20 | % | 6 | % | N/A | 16 | % | ||||||||||||||||||||
Net income (loss) | $ | 6,094 | $ | 67 | $ | (661 | ) | $ | (212 | ) | $ | 64 | $ | 5,352 | |||||||||||||||||
Diluted earnings (loss) per share (EPS) | $ | 3.46 | $ | 0.04 | $ | (0.38 | ) | $ | (0.12 | ) | $ | 0.04 | $ | 3.04 | |||||||||||||||||
Operating cash flow | $ | 6,469 | $ | (23 | ) | $ | (178 | ) | $ | — | $ | — | $ | 6,268 | |||||||||||||||||
Operating cash flow as % of revenues | 35 | % | N/A | N/A | N/A | N/A | 34 | % | |||||||||||||||||||||||
Free cash flow (f) | $ | 5,696 | $ | (58 | ) | $ | (178 | ) | $ | — | $ | — | $ | 5,460 | |||||||||||||||||
Free cash flow as % of revenues | 31 | % | N/A | N/A | N/A | N/A | 30 | % | |||||||||||||||||||||||
(a) | Included amortization and impairment of certain intangible assets, expense associated with the termination of a contract and the recognition of the step-up of inventories to fair value. |
(b) | Included a $64 million tax benefit as a result of the retroactive reinstatement of the federal R&D tax credit related to fiscal 2012. |
(c) | Included a $158 million loss, or $0.06 per share, that resulted from an impairment charge on certain long-lived assets related to our QMT division. |
(d) | Included $521 million in interest and dividend income, $147 million in net realized gains on investments and $17 million in net gains on derivatives, partially offset by $36 million in other-than-temporary losses on investments, $4 million in interest expense and $1 million in losses on deconsolidation of subsidiaries. |
(e) | Included $92 million in net realized gains on investments, $22 million in gains on deconsolidation of subsidiaries and $8 million in interest and dividend income, partially offset by $18 million in interest expense, $13 million in other-than-temporary losses on investments and $5 million in equity in net losses of investees. |
(f) | Free cash flow is defined as net cash provided by operating activities less capital expenditures. Reconciliation of these amounts is included in the “Reconciliation of Non-GAAP Free Cash Flows to Net Cash Provided by Operating Activities (GAAP) and Other Supplemental Disclosures” for the nine months ended June 30, 2013 included herein. |
Three Months Ended June 30, 2013 | |||||||||||||||
Non-GAAP | QSI | Share-Based Compensation | GAAP | ||||||||||||
Net cash provided (used) by operating activities | $ | 2,157 | $ | (5 | ) | $ | (75 | ) | (a) | $ | 2,077 | ||||
Less: capital expenditures | (307 | ) | (7 | ) | — | (314 | ) | ||||||||
Free cash flow | $ | 1,850 | $ | (12 | ) | $ | (75 | ) | $ | 1,763 | |||||
Revenues | $ | 6,243 | $ | — | $ | — | $ | 6,243 | |||||||
Free cash flow as % of revenues | 30 | % | N/A | N/A | 28 | % | |||||||||
Nine Months Ended June 30, 2013 | |||||||||||||||
Non-GAAP | QSI | Share-Based Compensation | GAAP | ||||||||||||
Net cash provided (used) by operating activities | $ | 6,469 | $ | (23 | ) | $ | (178 | ) | (a) | $ | 6,268 | ||||
Less: capital expenditures | (773 | ) | (35 | ) | — | (808 | ) | ||||||||
Free cash flow | $ | 5,696 | $ | (58 | ) | $ | (178 | ) | $ | 5,460 | |||||
Revenues | $ | 18,385 | $ | — | $ | — | $ | 18,385 | |||||||
Free cash flow as % of revenues | 31 | % | N/A | N/A | 30 | % | |||||||||
Three Months Ended June 24, 2012 | |||||||||||||||
Non-GAAP | QSI | Share-Based Compensation | GAAP | ||||||||||||
Net cash provided (used) by operating activities | $ | 972 | $ | (21 | ) | $ | (29 | ) | (a) | $ | 922 | ||||
Less: capital expenditures | (314 | ) | (85 | ) | — | (399 | ) | ||||||||
Free cash flow | $ | 658 | $ | (106 | ) | $ | (29 | ) | $ | 523 | |||||
Nine Months Ended June 24, 2012 | |||||||||||||||
Non-GAAP | QSI | Share-Based Compensation | GAAP | ||||||||||||
Net cash provided (used) by operating activities | $ | 4,906 | $ | (190 | ) | $ | (127 | ) | (a) | $ | 4,589 | ||||
Less: capital expenditures | (949 | ) | (85 | ) | — | (1,034 | ) | ||||||||
Free cash flow | $ | 3,957 | $ | (275 | ) | $ | (127 | ) | $ | 3,555 |
(a) | Incremental tax benefits from share-based compensation during the period. |
Three Months Ended June 30, 2013 | |||||||||||||||||||||||
Non-GAAP Results | QSI | Share-Based Compensation | Acquisition-Related Items | Tax Items | GAAP Results | ||||||||||||||||||
Income (loss) from continuing operations before income taxes | $ | 2,210 | $ | 51 | $ | (280 | ) | $ | (71 | ) | $ | — | $ | 1,910 | |||||||||
Income tax (expense) benefit | (387 | ) | (10 | ) | 58 | 7 | — | (332 | ) | ||||||||||||||
Income (loss) from continuing operations | $ | 1,823 | $ | 41 | $ | (222 | ) | $ | (64 | ) | $ | — | $ | 1,578 | |||||||||
Tax rate | 18 | % | 20 | % | 21 | % | 10 | % | N/A | 17 | % | ||||||||||||
Nine Months Ended June 30, 2013 | |||||||||||||||||||||||
Non-GAAP Results | QSI | Share-Based Compensation | Acquisition-Related Items | Tax Items (b) | GAAP Results | ||||||||||||||||||
Income (loss) from continuing operations before income taxes | $ | 7,360 | $ | 66 | $ | (829 | ) | $ | (225 | ) | $ | — | $ | 6,372 | |||||||||
Income tax (expense) benefit | (1,267 | ) | (6 | ) | 168 | 13 | 64 | (1,028 | ) | ||||||||||||||
Income (loss) from continuing operations | $ | 6,093 | $ | 60 | $ | (661 | ) | $ | (212 | ) | $ | 64 | $ | 5,344 | |||||||||
Tax rate | 17 | % | 9 | % | 20 | % | 6 | % | N/A | 16 | % | ||||||||||||
(a) | At fiscal year end, the sum of the quarterly tax provision (benefit) for each column equals the annual tax provision (benefit) for each column computed in accordance with GAAP. In interim quarters, the sum of these provisions (benefits) may not equal the total GAAP tax provision, and this difference is allocated to tax provisions (benefits) among the columns. |
(b) | During the second quarter of fiscal 2013, we recorded a tax benefit of $64 million related to fiscal 2012 due to the retroactive reinstatement of the federal R&D tax credit. |
June 30, 2013 | September 30, 2012 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 2,533 | $ | 3,807 | |||
Marketable securities | 8,928 | 8,567 | |||||
Accounts receivable, net | 1,949 | 1,459 | |||||
Inventories | 1,727 | 1,030 | |||||
Deferred tax assets | 329 | 309 | |||||
Other current assets | 506 | 473 | |||||
Total current assets | 15,972 | 15,645 | |||||
Marketable securities | 18,941 | 14,463 | |||||
Deferred tax assets | 1,446 | 1,412 | |||||
Assets held for sale | — | 1,109 | |||||
Property, plant and equipment, net | 2,974 | 2,851 | |||||
Goodwill | 3,995 | 3,917 | |||||
Other intangible assets, net | 2,690 | 2,938 | |||||
Other assets | 791 | 677 | |||||
Total assets | $ | 46,809 | $ | 43,012 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Trade accounts payable | $ | 1,850 | $ | 1,298 | |||
Payroll and other benefits related liabilities | 713 | 664 | |||||
Unearned revenues | 482 | 545 | |||||
Liabilities held for sale | — | 1,072 | |||||
Other current liabilities | 1,983 | 1,723 | |||||
Total current liabilities | 5,028 | 5,302 | |||||
Unearned revenues | 3,679 | 3,739 | |||||
Other liabilities | 519 | 426 | |||||
Total liabilities | 9,226 | 9,467 | |||||
Stockholders’ equity: | |||||||
Qualcomm stockholders’ equity: | |||||||
Preferred stock, $0.0001 par value; issuable in series; 8 shares authorized; none outstanding | — | — | |||||
Common stock, $0.0001 par value; 6,000 shares authorized; 1,722 and 1,706 shares issued and outstanding, respectively | — | — | |||||
Paid-in capital | 12,316 | 11,956 | |||||
Retained earnings | 24,564 | 20,701 | |||||
Accumulated other comprehensive income | 698 | 866 | |||||
Total Qualcomm stockholders’ equity | 37,578 | 33,523 | |||||
Noncontrolling interests | 5 | 22 | |||||
Total stockholders’ equity | 37,583 | 33,545 | |||||
Total liabilities and stockholders’ equity | $ | 46,809 | $ | 43,012 |
Three Months Ended | Nine Months Ended | ||||||||||||||
June 30, 2013 | June 24, 2012 | June 30, 2013 | June 24, 2012 | ||||||||||||
Revenues: | |||||||||||||||
Equipment and services | $ | 4,286 | $ | 2,948 | $ | 12,474 | $ | 9,253 | |||||||
Licensing | 1,957 | 1,678 | 5,911 | 4,998 | |||||||||||
Total revenues | 6,243 | 4,626 | 18,385 | 14,251 | |||||||||||
Operating expenses: | |||||||||||||||
Cost of equipment and services revenues | 2,497 | 1,719 | 7,106 | 5,255 | |||||||||||
Research and development | 1,298 | 974 | 3,618 | 2,801 | |||||||||||
Selling, general and administrative | 613 | 544 | 1,861 | 1,643 | |||||||||||
Other | 158 | 7 | 158 | 104 | |||||||||||
Total operating expenses | 4,566 | 3,244 | 12,743 | 9,803 | |||||||||||
Operating income | 1,677 | 1,382 | 5,642 | 4,448 | |||||||||||
Investment income, net | 233 | 199 | 730 | 589 | |||||||||||
Income from continuing operations before income taxes | 1,910 | 1,581 | 6,372 | 5,037 | |||||||||||
Income tax expense | (332 | ) | (375 | ) | (1,028 | ) | (993 | ) | |||||||
Income from continuing operations | 1,578 | 1,206 | 5,344 | 4,044 | |||||||||||
Discontinued operations, net of income taxes | — | (3 | ) | — | 753 | ||||||||||
Net income | 1,578 | 1,203 | 5,344 | 4,797 | |||||||||||
Net loss attributable to noncontrolling interests | 2 | 4 | 8 | 41 | |||||||||||
Net income attributable to Qualcomm | $ | 1,580 | $ | 1,207 | $ | 5,352 | $ | 4,838 | |||||||
Basic earnings per share attributable to Qualcomm: | |||||||||||||||
Continuing operations | $ | 0.91 | $ | 0.70 | $ | 3.11 | $ | 2.40 | |||||||
Discontinued operations | — | — | — | 0.45 | |||||||||||
Net income | $ | 0.91 | $ | 0.70 | $ | 3.11 | $ | 2.85 | |||||||
Diluted earnings per share attributable to Qualcomm: | |||||||||||||||
Continuing operations | $ | 0.90 | $ | 0.69 | $ | 3.04 | $ | 2.35 | |||||||
Discontinued operations | — | — | — | 0.43 | |||||||||||
Net income | $ | 0.90 | $ | 0.69 | $ | 3.04 | $ | 2.78 | |||||||
Shares used in per share calculations: | |||||||||||||||
Basic | 1,727 | 1,715 | 1,720 | 1,699 | |||||||||||
Diluted | 1,765 | 1,758 | 1,760 | 1,740 | |||||||||||
Dividends per share announced | $ | 0.35 | $ | 0.25 | $ | 0.85 | $ | 0.68 |
Three Months Ended | Nine Months Ended | ||||||||||||||
June 30, 2013 | June 24, 2012 | June 30, 2013 | June 24, 2012 | ||||||||||||
Operating Activities: | |||||||||||||||
Net income | $ | 1,578 | $ | 1,203 | $ | 5,344 | $ | 4,797 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
Depreciation and amortization | 255 | 221 | 744 | 640 | |||||||||||
Gain on sale of wireless spectrum | — | — | — | (1,179 | ) | ||||||||||
Revenues related to non-monetary exchanges | (31 | ) | (31 | ) | (93 | ) | (92 | ) | |||||||
Income tax provision in excess of (less than) income tax payments | 59 | (261 | ) | 220 | 239 | ||||||||||
Non-cash portion of share-based compensation expense | 281 | 264 | 831 | 752 | |||||||||||
Incremental tax benefits from share-based compensation | (75 | ) | (29 | ) | (178 | ) | (127 | ) | |||||||
Net realized gains on marketable securities and other investments | (60 | ) | (70 | ) | (239 | ) | (214 | ) | |||||||
Other items, net | 195 | 38 | 274 | 26 | |||||||||||
Changes in assets and liabilities, net of effects of acquisitions: | |||||||||||||||
Accounts receivable, net | (21 | ) | (54 | ) | (445 | ) | (249 | ) | |||||||
Inventories | (245 | ) | (32 | ) | (699 | ) | (53 | ) | |||||||
Other assets | 90 | (21 | ) | (111 | ) | (31 | ) | ||||||||
Trade accounts payable | 221 | (90 | ) | 598 | 197 | ||||||||||
Payroll, benefits and other liabilities | (151 | ) | (151 | ) | 52 | (412 | ) | ||||||||
Unearned revenues | (19 | ) | (65 | ) | (30 | ) | 295 | ||||||||
Net cash provided by operating activities | 2,077 | 922 | 6,268 | 4,589 | |||||||||||
Investing Activities: | |||||||||||||||
Capital expenditures | (314 | ) | (399 | ) | (808 | ) | (1,034 | ) | |||||||
Purchases of available-for-sale securities | (4,663 | ) | (4,768 | ) | (12,112 | ) | (11,804 | ) | |||||||
Proceeds from sales of available-for-sale securities | 2,805 | 2,231 | 7,337 | 5,774 | |||||||||||
Purchases of trading securities | (862 | ) | (641 | ) | (2,658 | ) | (2,280 | ) | |||||||
Proceeds from sales of trading securities | 767 | 646 | 2,365 | 1,297 | |||||||||||
Proceeds from sale of wireless spectrum | — | — | — | 1,925 | |||||||||||
Acquisitions and other investments, net of cash acquired | (47 | ) | (348 | ) | (179 | ) | (677 | ) | |||||||
Other items, net | (2 | ) | (23 | ) | 68 | (76 | ) | ||||||||
Net cash used by investing activities | (2,316 | ) | (3,302 | ) | (5,987 | ) | (6,875 | ) | |||||||
Financing Activities: | |||||||||||||||
Borrowing under loans and debentures | 534 | 478 | 534 | 710 | |||||||||||
Repayment of loans and debentures | (492 | ) | (440 | ) | (492 | ) | (591 | ) | |||||||
Proceeds from issuance of common stock | 217 | 223 | 964 | 1,358 | |||||||||||
Incremental tax benefits from share-based compensation | 75 | 29 | 178 | 127 | |||||||||||
Repurchases and retirements of common stock | (1,039 | ) | (373 | ) | (1,289 | ) | (472 | ) | |||||||
Dividends paid | (604 | ) | (429 | ) | (1,463 | ) | (1,158 | ) | |||||||
Change in obligation under securities lending | 27 | 242 | 27 | 203 | |||||||||||
Other items, net | 10 | 83 | 8 | 83 | |||||||||||
Net cash (used) provided by financing activities | (1,272 | ) | (187 | ) | (1,533 | ) | 260 | ||||||||
Changes in cash and cash equivalents held for sale | (46 | ) | — | (15 | ) | — | |||||||||
Effect of exchange rate changes on cash | (3 | ) | (19 | ) | (7 | ) | (24 | ) | |||||||
Net decrease in cash and cash equivalents | (1,560 | ) | (2,586 | ) | (1,274 | ) | (2,050 | ) | |||||||
Cash and cash equivalents at beginning of year | 4,093 | 5,998 | 3,807 | 5,462 | |||||||||||
Cash and cash equivalents at end of year | $ | 2,533 | $ | 3,412 | $ | 2,533 | $ | 3,412 |