omniture

Qualcomm Announces Third Quarter Fiscal 2013 Results

Qualcomm Incorporated
2013-07-25 12:37 1771

-- Revenues $6.2 billion

-- GAAP EPS $0.90, Non-GAAP EPS $1.03

-- Record Quarterly Revenues; Raising Fiscal 2013 EPS Guidance -

SAN DIEGO, July 25, 2013 /PRNewswire/ -- Qualcomm Incorporated (Nasdaq: QCOM), a leading developer and innovator of advanced wireless technologies, products and services, today announced results for the third quarter of fiscal 2013 ended June 30, 2013.

"We delivered another strong quarter as our Qualcomm Snapdragon solutions were prominent in a broad set of flagship smartphones, and 3G/4G device average selling prices were stronger than expected. We also focused on return of capital to stockholders and increased our stock repurchases and dividends paid during the quarter," said Dr. Paul E. Jacobs, chairman and CEO of Qualcomm. "This quarter, we continued our technology leadership, with our Snapdragon 800 processor powering the world's first LTE-Advanced smartphone. We see expanding opportunities for growth of 3G/4G devices around the globe, driven by the strong pace of innovation in the industry."

Third Quarter Results (GAAP)*

  • 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.

[1] Throughout this news release, fiscal 2012 results for FLO TV are presented as discontinued operations. Revenues, operating expenses, operating income, earnings before tax (EBT) and effective tax rates are from continuing operations (i.e., before adjustments for noncontrolling interests and, for fiscal 2012, discontinued operations), unless otherwise stated.

[2] Throughout this news release, net income and diluted earnings per share are attributable to Qualcomm (i.e., after adjustments for noncontrolling interests and discontinued operations), unless otherwise stated.

Non-GAAP Third Quarter Results*

Non-GAAP results exclude the QSI (Qualcomm Strategic Initiatives) segment and certain share-based compensation, acquisition-related items and tax items.

  • 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.

Detailed reconciliations between results reported in accordance with generally accepted accounting principles (GAAP) and Non-GAAP results are included within this news release.

*The following should be considered in regards to the year-over-year and sequential comparisons: Third quarter fiscal 2013 GAAP and Non-GAAP results 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.

Third Quarter Key Business Metrics

  • MSM™ 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.

Cash and Marketable Securities

Our cash, cash equivalents and marketable securities totaled $30.4 billion at the end of the third quarter of fiscal 2013, compared to $26.5 billion a year ago and $30.5 billion at the end of the second quarter of fiscal 2013. On July 17, 2013, we announced a cash dividend of $0.35 per share payable on September 25, 2013 to stockholders of record as of September 4, 2013. During the third quarter of fiscal 2013, we repurchased and retired 16.7 million shares of common stock for $1.04 billion. Since June 30, 2013, we repurchased and retired an additional 8.4 million shares of common stock for $512 million.

Research and Development


 

 

($ 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%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


N/M - Not Meaningful

Non-GAAP research and development (R&D) expenses increased 36 percent y-o-y primarily due to an increase in costs to develop CDMA-based 3G, OFDMA-based 4G LTE and other technologies for integrated circuit and related software products and to expand our intellectual property portfolio.

Selling, General and Administrative


 

 

($ 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%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


N/M - Not Meaningful

Non-GAAP selling, general and administrative (SG&A) expenses increased 19 percent y-o-y primarily due to increases in employee-related expenses, selling and marketing expenses and professional fees, partially offset by a decrease in costs related to litigation and other legal matters.

Effective Income Tax Rates

Our fiscal 2013 annual effective income tax rates are estimated to be approximately 16 percent for GAAP and approximately 17 to 18 percent for Non-GAAP, consistent with our prior estimates. The third quarter effective income tax rates were 17 percent for GAAP and 18 percent for Non-GAAP.

QSI Segment

QSI makes strategic investments, many of which are in early-stage companies, and holds wireless spectrum. GAAP results for the third quarter of fiscal 2013 included $0.02 earnings per share for QSI. In the third quarter of fiscal 2013, QSI deconsolidated the subsidiaries that hold the BWA spectrum in India.

Business Outlook

The following statements are forward looking, and actual results may differ materially. The "Note Regarding Forward-Looking Statements" in this news release provides a description of certain risks that we face, and our annual and quarterly reports on file with the Securities and Exchange Commission (SEC) provide a more complete description of risks.

Our outlook does not include provisions for future asset impairments or for pending legal matters, other than future legal amounts that are probable and estimable. Further, due to their nature, certain income and expense items, such as realized investment and certain derivative gains or losses, cannot be accurately forecast. Accordingly, we only include such items in our business outlook to the extent they are reasonably certain; however, actual results may vary materially from the business outlook.

The following table summarizes GAAP and Non-GAAP guidance based on the current business outlook. The Non-GAAP business outlook presented below is consistent with the presentation of Non-GAAP results included elsewhere herein.

Qualcomm's Business Outlook Summary


 

 

 

FOURTH FISCAL QUARTER

 

 

 

 

Q4 FY12
Results

 

Current Guidance
Q4 FY13 Estimates

 

 

 

Revenues

 

 

$4.87B

 

$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

 

 

$19.12B

 

$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.

 

 

 

 

 


N/A - Not Applicable
Sums may not equal totals due to rounding.

Results of Business Segments

The following table reconciles our Non-GAAP results to our GAAP results (in millions, except per share data):


 

 

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.

 

 

 

 

 


N/M - Not Meaningful
N/A - Not Applicable
Sums may not equal totals due to rounding.

Conference Call

Qualcomm's third quarter fiscal 2013 earnings conference call will be broadcast live on July 24, 2013, beginning at 1:45 p.m. Pacific Time (PT) at http://investor.qualcomm.com/events.cfm. This conference call will include a discussion of "Non-GAAP financial measures" as defined in Regulation G. The most directly comparable GAAP financial measures and information reconciling these Non-GAAP financial measures to the Company's financial results prepared in accordance with GAAP, as well as other financial and statistical information to be discussed on the conference call, will be posted at www.qualcomm.com/investor immediately prior to commencement of the call. An audio replay will be available at http://investor.qualcomm.com/events.cfm and via telephone following the live call for 30 days thereafter. To listen to the replay via telephone, U.S. callers may dial (855) 859-2056, and international callers may dial (404) 537-3406. Callers should use reservation number 15022636.

Note Regarding Use of Non-GAAP Financial Measures

The Non-GAAP financial information presented herein should be considered in addition to, not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. In addition, "Non-GAAP" is not a term defined by GAAP, and as a result, the Company's measure of Non-GAAP results might be different than similarly titled measures used by other companies. Reconciliations between GAAP and Non-GAAP results are presented herein.

The Company uses Non-GAAP financial information (i) to evaluate, assess and benchmark the Company's operating results on a consistent and comparable basis; (ii) to measure the performance and efficiency of the Company's ongoing core operating businesses, including the QCT (Qualcomm CDMA Technologies), QTL (Qualcomm Technology Licensing) and QWI (Qualcomm Wireless & Internet) segments; and (iii) to compare the performance and efficiency of these segments against each other and against competitors. Non-GAAP measurements of the following financial data are used by the Company: revenues, cost of revenues, R&D expenses, SG&A expenses, other operating expenses, operating income (loss), net investment income (loss), income (loss) before income taxes, effective tax rate, net income (loss), diluted earnings (loss) per share, operating cash flow and free cash flow. The Company is able to assess what it believes is a more meaningful and comparable set of financial performance measures for the Company and its business segments by using Non-GAAP information. As a result, management compensation decisions and the review of executive compensation by the Compensation Committee of the Board of Directors focus primarily on Non-GAAP financial measures applicable to the Company and its business segments. The Company presents Non-GAAP financial information to provide greater transparency to investors with respect to its use of such information in financial and operational decision-making.

Non-GAAP information used by management excludes QSI and certain share-based compensation, acquisition-related items and tax items.

  • 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.

The Company presents free cash flow, defined as net cash provided by operating activities less capital expenditures, to facilitate an understanding of the amount of cash flow generated that is available to grow its business and to create long-term stockholder value. In addition, management uses this measure to evaluate the Company's performance and to compare its operating performance with other companies in the industry.

About Qualcomm

Qualcomm Incorporated (Nasdaq: QCOM) is a world leader in 3G, 4G and next-generation wireless technologies. Qualcomm Incorporated includes Qualcomm's licensing business, QTL, and the vast majority of its patent portfolio. Qualcomm Technologies, Inc., a wholly-owned subsidiary of Qualcomm Incorporated, operates, along with its subsidiaries, substantially all of Qualcomm's engineering, research and development functions, and substantially all of its products and services businesses, including its semiconductor business, QCT. For more than 25 years, Qualcomm ideas and inventions have driven the evolution of digital communications, linking people everywhere more closely to information, entertainment and each other. For more information, visit www.qualcomm.com.

Note Regarding Forward-Looking Statements

In addition to the historical information contained herein, this news release contains forward-looking statements that are inherently subject to risks and uncertainties, including but not limited to statements regarding the expanding opportunities for growth of 3G/4G devices around the globe driven by the strong pace of innovation in the industry; our business outlook; and our estimates and guidance related to revenues, GAAP and Non-GAAP diluted earnings per share, effective income tax rates, MSM chip shipments, total reported device sales, 3G/4G device average selling price ranges and 3G/4G device shipments, ranges and midpoints. Forward-looking statements are generally identified by words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "guidance" and similar expressions. Actual results may differ materially from those referred to in the forward-looking statements due to a number of important factors, including but not limited to risks associated with the commercial deployment of our technologies and our customers' and licensees' sales of equipment, products and services based on these technologies; competition; our dependence on a small number of customers and licensees; attacks on our licensing business model, including current and future legal proceedings and actions of governmental or quasi-governmental bodies; our dependence on third-party suppliers, including the potential impact of supply constraints; the enforcement and protection of our intellectual property rights; claims by third parties that we infringe their intellectual property; global economic conditions that impact the communications industry and the potential impact on demand for our products and our customers' and licensees' products; our stock price and earnings volatility; strategic transactions and investments; the commercial success of our QMT division's display technology; foreign currency fluctuations; and failures, defects or errors in our products and services or in the products of our customers and licensees. These and other risks are set forth in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2012 and Quarterly Report on Form 10-Q for the third quarter ended June 30, 2013 filed with the SEC. Our reports filed with the SEC are available on our website at www.qualcomm.com. We undertake no obligation to update, or continue to provide information with respect to, any forward-looking statement or risk factor, whether as a result of new information, future events or otherwise.

Qualcomm, Snapdragon and MSM are trademarks of Qualcomm Incorporated, registered in the United States and other countries. All other trademarks are the property of their respective owners.

Qualcomm Contact:
Warren Kneeshaw
Phone: 1-858-658-4813
e-mail: ir@qualcomm.com

Qualcomm Incorporated

 

 

Supplemental Information for the Three Months Ended June 30, 2013

 

 

(Unaudited)

 

 

 

 

 

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.

 

 

 


N/A - Not Applicable
Sums may not equal totals due to rounding.

Qualcomm Incorporated

 

 

Supplemental Information for the Nine Months Ended June 30, 2013

 

 

(Unaudited)

 

 

 

 

 

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.

 

 

 


N/A - Not Applicable
Sums may not equal totals due to rounding.


 

 

Qualcomm Incorporated

 

 

Reconciliation of Non-GAAP Free Cash Flows to

 

 

Net Cash Provided by Operating Activities (GAAP)

 

 

and Other Supplemental Disclosures

 

 

(In millions)

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


N/A - Not Applicable

Qualcomm Incorporated

 

 

Reconciliation of Non-GAAP Tax Rates to GAAP Tax Rates (a)

 

 

(In millions)

 

 

(Unaudited)

 

 

 

 

 

 

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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Sums may not equal totals due to rounding.

Qualcomm Incorporated

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

(In millions, except per share data)

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 




 

 

Qualcomm Incorporated

 

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

(In millions, except per share data)

 

 

(Unaudited)

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Qualcomm Incorporated

 

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

(In millions)

 

 

(Unaudited)

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 




Source: Qualcomm Incorporated
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