MEDIA RELEASE PR39234
Qualcomm Announces Second Quarter Fiscal 2010 Results
SAN DIEGO, Apr. 22 /PRNewswire-AsiaNet/ --
Revenues $2.7 Billion, EPS $0.46
Pro Forma EPS $0.59
Raises Fiscal 2010 Earnings Guidance
Qualcomm Incorporated (Nasdaq: QCOM), a leading developer and innovator
of advanced wireless technologies, products and services, today announced
results for the second quarter of fiscal 2010 ended March 28, 2010.
"We delivered strong financial results this quarter, driven by healthy 3G
device shipments and greater than expected demand for our chipsets. 3G
subscribers have now surpassed 1 billion worldwide and with the 3G auction
process underway in India, the 3G footprint continues to expand globally,"
said Dr. Paul E. Jacobs, chairman and CEO of Qualcomm. "Calendar year 2010 3G
device shipments are progressing in line with our expectations, and although
we're continuing to operate in a competitive chipset pricing environment,
we're positioned to continue to grow share through new partner engagements
and our broad, industry-leading 3G chipset roadmap. Our business is executing
well and we are pleased to be raising our earnings guidance for the fiscal
year."
Second Quarter Results (GAAP)
- Revenues: $2.66 billion, compared to $2.46 billion in the prior
year and $2.67 billion in the prior quarter.
- Operating income: $776 million, compared to an operating loss of
$10 million in the prior year* and operating income of $879 million
in the prior quarter.
- Net income: $774 million, compared to a net loss of $289 million in
the prior year* and net income of $841 million in the prior quarter.
- Diluted earnings per share: $0.46, compared to a diluted loss per
share of $0.18 in the prior year* and diluted earnings per share of
$0.50 in the prior quarter.
- Effective tax rate: 20 percent for the quarter.
- Operating cash flow: $793 million, down 37 percent year-over-year; 30
percent of revenues.
- Return of capital to stockholders: $1.99 billion, including $279
million, or $0.17 per share, of cash dividends paid, and $1.71
billion to repurchase 43.9 million shares of our common stock.
* The second quarter of fiscal 2009 results reflected a $748 million
litigation settlement charge related to a settlement and patent agreement
with Broadcom Corporation.
Pro Forma Second Quarter Results
Pro forma results exclude the Qualcomm Strategic Initiatives (QSI)
segment, certain share-based compensation, certain tax items that are not
related to the current year and acquired in-process research and development
(R&D) expense.
- Revenues: $2.66 billion, compared to $2.45 billion in the prior
year and $2.67 billion in the prior quarter.
- Operating income: $1.07 billion, compared to $214 million in the
prior year* and $1.13 billion in the prior quarter.
- Net income: $989 million, compared to a net loss of $46 million in
the prior year* and net income of $1.04 billion in the prior quarter.
- Diluted earnings per share: $0.59, compared to a diluted loss per
share of $0.03 in the prior year* and diluted earnings per share of
$0.62 in the prior quarter. The current quarter excludes $0.05 loss
per share attributable to the QSI segment, $0.06 loss per share
attributable to certain share-based compensation and $0.02 loss per
share attributable to certain tax items.
- Effective tax rate: 21 percent for the quarter.
- Free cash flow: $823 million, down 29 percent year-over-year; 31
percent of revenues (defined as net cash from operating activities less
capital expenditures).
* The second quarter of fiscal 2009 results reflected a $748 million
litigation settlement charge related to a settlement and patent agreement
with Broadcom Corporation.
Detailed reconciliations between results reported in accordance with
generally accepted accounting principles (GAAP) and pro forma results are
included at the end of this news release. Prior period reconciliations are
Cash and Marketable Securities
Our cash, cash equivalents and marketable securities totaled
approximately $18.2 billion at the end of the second quarter of fiscal
2010, compared to $18.9 billion at the end of the first quarter of fiscal
2010 and $14.0 billion a year ago. On April 8, 2010, we announced a cash
dividend of $0.19 per share payable on June 25, 2010 to stockholders of
record as of May 28, 2010.
Research and Development
Share- In-
Pro Based Process
($ in millions) Forma Compensation R&D QSI GAAP
------ ------------- -------- --- ----
Second quarter
fiscal 2010 $547 $75 $3 $23 $648
As a % of revenues 21% N/M 24%
Second quarter
fiscal 2009 $506 $68 $6 $24 $604
As a % of revenues 21% N/M 25%
Year-over-year change ($) 8% 10% N/M (4%) 7%
N/M - Not Meaningful
Pro forma R&D expenses increased 8 percent year-over-year, primarily due
to an increase in costs related to the development of integrated circuit
products, next-generation CDMA and OFDMA technologies, the expansion of our
intellectual property portfolio and other initiatives to support the
acceleration of advanced wireless products and services. QSI R&D expenses
were primarily related to our FLO TV(TM) subsidiary.
Selling, General and Administrative
Share-
Based
($ in millions) Pro Forma Compensation QSI GAAP
--------- ------------- --- ----
Second quarter fiscal 2010 $305 $69 $56 $430
As a % of revenues 11% N/M 16%
Second quarter fiscal 2009 $289 $62 $24 $375
As a % of revenues 12% N/M 15%
Year-over-year change ($) 6% 11% 133% 15%
Pro forma selling, general and administrative (SG&A) expenses increased 6
percent year-over-year, primarily due to an increase in patent-related costs.
QSI SG&A expenses increased 133 percent year-over-year, primarily due to an
increase in selling and marketing expenses related to FLO TV.
Effective Income Tax Rate
Our fiscal 2010 effective income tax rates are estimated to be
approximately 21 percent for GAAP and approximately 21 to 22 percent for pro
forma. Our estimate of the fiscal 2010 GAAP effective tax rate includes tax
expense of approximately $130 million that arises because deferred revenue
related to the 2008 license and settlement agreements with Nokia is taxable
in fiscal 2010, but the resulting deferred tax asset will reverse in future
years when our state tax rate will be lower as a result of California tax
legislation enacted in 2009. This tax expense was excluded from our pro forma
results to provide a clearer understanding of our ongoing tax rate and after
tax earnings.
Qualcomm Strategic Initiatives
The QSI segment is composed of our strategic investments, including FLO
TV. GAAP results for the second quarter of fiscal 2010 included a $0.05
diluted loss per share for the QSI segment. The second quarter of fiscal 2010
QSI results included $134 million in operating expenses, primarily related
to FLO TV.
Business Outlook and Description of Changes to QTL Metrics
The following statements are forward looking and actual results may
differ materially. The "Note Regarding Forward-Looking Statements" at the end
of 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.
As a result of our analysis of information recently received from
licensee audits and public disclosures concerning licensee market share, unit
shipments and average selling prices (ASPs) as well as our evaluation of the
evolving CDMA-based device industry (particularly the growth of the modem
card/module device segment), we have adjusted some of the underlying
assumptions used to estimate licensee unit shipments and ASPs, which we
believe will improve our estimates. Also, beginning with this earnings
release, we will provide investors with the total subscriber device sales
reported to us by subscriber licensees during the relevant period, without
adjustment for the differences in how licensees report sales information
(e.g., some licensees report selling prices net of permitted deductions, such
as transportation, insurance and packing costs, while other licensees do
not). We believe the changes referenced above will continue to help investors
understand important trends in our licensing business. We plan to discuss
these changes in greater detail on our earnings call beginning at 1:45pm
Pacific Time today.
For comparative purposes only, we are providing a table herein entitled
"Changes to QTL Metrics" to show for fiscal 2009 and for the first quarter of
fiscal 2010: 1) total reported subscriber device sales; 2) our prior ASP
estimates and subscriber device shipment estimates; and 3) ASP estimates and
subscriber device shipment estimates applying our adjusted estimation
assumptions.
Our outlook does not include provisions for the consequences of
injunctions, damages or fines related to any pending legal matters unless
awarded or imposed by a court, governmental entity or other regulatory body.
In addition, due to their nature, certain income and expense items, such as
realized investment gains or losses, gains and losses on certain derivative
instruments or asset impairments, cannot be accurately forecast. While we do
not forecast impairments, we have temporary unrealized losses on marketable
securities that could be recognized as other-than-temporary losses in future
periods if financial conditions affecting those securities do not improve.
Accordingly, we exclude forecasts of such items from our business outlook,
and actual results may vary materially from the business outlook if we incur
any such income or expense items.
The following table summarizes GAAP and pro forma guidance based on the
current business outlook. The pro forma business outlook presented below is
consistent with the presentation of pro forma results elsewhere herein.
The following estimates are approximations and are based on the current
business outlook:
Qualcomm's Business Outlook Summary
-----------------------------------
THIRD FISCAL QUARTER
--------------------
Current Guidance
Q3 FY10 Estimates
-----------------
Pro Forma
Revenues $2.50B - $2.70B
Year-over-year change decrease 2% - 9%
Diluted earnings per share (EPS) $0.51 - $0.55
decrease 6% -increase 2%
Year-over-year change
GAAP
Revenues $2.50B - $2.70B
Year-over-year change decrease 2% - 9%
Diluted EPS $0.40 - $0.44
Year-over-year change decrease 9% - even
Diluted EPS attributable to QSI ($0.02)
Diluted EPS attributable to share-based
compensation ($0.07)
Diluted EPS attributable to certain tax items (1) ($0.02)
Metrics
MSM shipments approx. 97M - 102M
Year-over-year change increase 3% - 9%
Total reported device sales (2) $24.0B - $26.0B*
Year-over-year change increase 13% - 23%
*Est. sales in March quarter, reported in June quarter
FISCAL YEAR
-----------
Current Guidance
FY 2010 Estimates
-----------------
Pro Forma
Revenues $10.40B - $11.00B
Year-over-year change even - increase 6%
Diluted EPS $2.21 - $2.32
Year-over-year change increase 69% - 77%
GAAP
Revenues $10.40B - $11.00B
Year-over-year change even - increase 6%
Diluted EPS $1.71 - $1.82
Year-over-year change increase 80% - 92%
Diluted EPS attributable to QSI ($0.15)
Diluted EPS attributable to share-based
compensation ($0.27)
Diluted EPS attributable to certain tax items
(1) ($0.08)
Metrics
Est. fiscal year* CDMA-based device average
selling price range (2) approx. $182 - $188
*Shipments in Sept. to June quarters, reported in Dec. to Sept.
quarters
---------------------------------------------------------------
CALENDAR YEAR Device Estimates (2)
----------------------------------
Current Guidance
Calendar 2010
Estimates
---------
Est. CDMA-based device shipments
March quarter not provided
June quarter not provided
September quarter not provided
December quarter not provided
---------------- ------------
Est. Calendar year range (approx.) 600M - 650M
---------------------------------- -----------
Midpoint
Est. total CDMA-based units approx. 625M
Est. CDMA units approx. 236M
Est. WCDMA units approx. 389M
---------------- ------------
(1) The estimate of our fiscal 2010 GAAP effective tax rate includes
tax expense of approximately $130 million that arises because
deferred revenue related to the 2008 license and settlement
agreements with Nokia is taxable in fiscal 2010 but the resulting
deferred tax asset will reverse in future years when our state tax
rate will be lower as a result of California tax legislation enacted
in 2009.
(2) 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 subscriber devices (including handsets, modules, modem
cards and other subscriber devices) by our licensees during a
particular period. As with our prior estimates of CDMA-based device
ASPs and unit shipments, the reported quarterly estimated ranges of
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 (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.
Changes to QTL Metrics
Fiscal 2009
Q1 Q2 Q3 Q4 FY09
-- -- -- -- ----
Total reported
device sales
(in
billions)(1) $26.6 $25.8 $21.2 $24.9 $98.5
Est. CDMA-based
device ASP,
previously
reported(2) $212 $201 $191 $196 $200
Adjustment 2 5 5 7 5
- - - - -
Midpoint(3) of
est. CDMA-based
device ASP
range(2)
(applying
adjusted
assumptions) $214 $206 $196 $203 $205
Est. CDMA-based
device ASP
range
(applying
adjusted
assumptions)(2) $211-$217 $203-$209 $193-$199 $200-$206 $202-$208
Est. CDMA-based
device
shipments,
previously
reported
(2) 125 128 111 127 492
Adjustment (1) (3) (3) (5) (12)
-- -- -- -- ---
Midpoint(3) of
est. CDMA-based
device
shipments
range(2)
(applying
adjusted
assumptions) 124 125 108 122 480
Est. CDMA-based
device
shipments range
(applying
adjusted
assumptions)(2) 122-126 123-127 106-110 120-124 472-488
Fiscal 2010
Q1
Total reported
device sales
(in
billions)(1) $24.5
Est. CDMA-based
device ASP,
previously
reported(2) $184
Adjustment 8
-
Midpoint(3) of
est. CDMA-based
device ASP
range(2)
(applying
adjusted
assumptions) $192
Est. CDMA-based
device ASP
range
(applying
adjusted
assumptions)(2) $189-$195
Est. CDMA-based
device
shipments,
previously
reported
(2) 133
Adjustment (5)
--
Midpoint(3) of
est. CDMA-based
device
shipments
range(2)
(applying
adjusted
assumptions) 128
Est. CDMA-based
device
shipments range
(applying
adjusted
assumptions)(2) 126-130
(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 subscriber devices (including handsets, modules, modem
cards and other subscriber devices) by our licensees during a
particular period. Not all licensees report sales the same (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.
(2) As with our prior estimates of CDMA-based device ASPs and unit
shipments, the reported quarterly estimated ranges of 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 selling prices
and/or unit shipments the same (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.
(3) The midpoints of the estimated ASP and device shipment ranges
for the relevant periods are identified for comparison purposes only
and do not indicate a higher degree of confidence in the midpoints.
Note : Fiscal year device shipments by licensees occur in the September
to June quarters and are reported to Qualcomm in the December to September
fiscal quarters, one quarter in arrears.
Sums may not equal total due to rounding.
Results of Business Segments (in millions, except per share data):
Q2 - FISCAL 2010
----------------
Pro Forma
Reconciling Pro
Items Forma
SEGMENTS QCT QTL QWI (1)(5) (5)
-------- --- --- --- ------------ ------
Revenues $1,537 $974 $152 ($2) $2,661
Change from prior
year 17% 2% (14%) N/M 9%
Change from prior
quarter (4%) 6% 7% N/M 0%
Operating income
(loss) $1,065
Change from prior
year 398%
Change from prior
quarter (6%)
EBT $344 $821 ($1) $94 $1,258
Change from prior
year 59% (2%) N/M N/M N/M
Change from prior
quarter (19%) 6% N/M N/M (4%)
EBT as a % of
revenues 22% 84% (1%) N/M 47%
Net income (loss) $989
Change from prior
year N/M
Change from prior
quarter (5%)
Diluted EPS $0.59
Change from prior
year N/M
Change from prior
quarter (5%)
Diluted shares used 1,678
Share-
Based Tax In-
Compen- Items Process
SEGMENTS sation(2) (3) R&D QSI (4) GAAP (5)
-------- --------- ----- -------- ------- --------
Revenues $2 $2,663
Change from prior
year (75%) 8%
Change from prior
quarter 0% 0%
Operating income
(loss) ($154) ($3) ($132) $776
Change from prior
year (10%) N/M (69%) N/M
Change from prior
quarter (2%) N/A (27%) (12%)
EBT ($154) ($3) ($136) $965
Change from prior
year (10%) N/M (33%) N/M
Change from prior
quarter (2%) N/A (27%) (8%)
EBT as a % of
revenues N/M N/M N/M 36%
Net income (loss) ($98) ($33) ($3) ($81) $774
Change from prior
year 32% N/M N/M (45%) N/M
Change from prior
quarter 14% N/M N/A (50%) (8%)
Diluted EPS ($0.06) ($0.02) ($0.05) $0.46
Change from prior
year 33% N/M N/M (67%) N/M
Change from prior
quarter 14% N/M N/A (67%) (8%)
Diluted shares used 1,678 1,678 1,678 1,678 1,678
Q1 - FISCAL 2010
----------------
Pro Forma
Reconciling Pro
Items Forma
SEGMENTS QCT QTL QWI (1)(5) (5)
-------- --- --- --- ------------ ------
Revenues $1,608 $917 $142 $1 $2,668
Operating income
(loss) 1,134
EBT 425 772 9 104 1,310
Net income (loss) 1,041
Diluted EPS $0.62
Diluted shares used 1,691
Share-
Based Tax In-
Compen- Items Process
SEGMENTS sation(2) (3) R&D QSI (4) GAAP (5)
-------- --------- ----- -------- ------- --------
Revenues $2 $2,670
Operating income
(loss) (151) - - (104) 879
EBT (151) - - (107) 1,052
Net income (loss) (114) (32) - (54) 841
Diluted EPS ($0.07) ($0.02) ($0.03) $0.50
Diluted shares used 1,691 1,691 1,691 1,691 1,691
Q2 - FISCAL 2009
----------------
Pro Forma
Reconciling Pro
Items Forma
SEGMENTS QCT QTL QWI (1)(5) (5)
-------- --- --- --- ------------ ------
Revenues $1,316 $954 $176 $1 $2,447
Operating income
(loss) 214
EBT 217 839 25 (934) 147
Net loss (46)
Diluted EPS ($0.03)
Diluted shares used 1,651
Share-
Based Tax In-
Compen- Items Process
SEGMENTS sation(2) (3) R&D QSI (4) GAAP (5)
-------- --------- ----- -------- ------- --------
Revenues $8 $2,455
Operating income
(loss) (140) - (6) (78) (10)
EBT (140) - (6) (102) (101)
Net loss (145) (36) (6) (56) (289)
Diluted EPS ($0.09) ($0.02) ($0.03) ($0.18)
Diluted shares used 1,651 1,651 1,651 1,651 1,651
Q3 - FISCAL 2009
----------------
Pro Forma
Reconciling Pro
Items Forma
SEGMENTS QCT QTL QWI (1)(5) (5)
-------- --- --- --- ------------ ------
Revenues $1,786 $807 $148 $3 $2,744
Operating income
(loss) 1,122
EBT 548 663 (3) (7) 1,201
Net income (loss) 903
Diluted EPS $0.54
Diluted shares used 1,675
Share-
Based Tax In-
Compen- Items Process
SEGMENTS sation(2) (3) R&D QSI (4) GAAP (5)
-------- --------- ----- -------- ------- --------
Revenues $9 $2,753
Operating income
(loss) (151) - - (77) 894
EBT (151) - - (66) 984
Net income (loss) (127) - - (39) 737
Diluted EPS ($0.08) ($0.02) $0.44
Diluted shares
used 1,675 1,675 1,675 1,675 1,675
6 MONTHS -FISCAL 2010
---------------------
Pro Forma
Reconciling Pro
Items Forma
SEGMENTS QCT QTL QWI (1)(5) (5)
-------- --- --- --- ------------ ------
Revenues $3,144 $1,891 $294 $0 $5,329
Change from prior
year 19% (4%) (15%) N/M 7%
Operating income
(loss) $2,198
Change from prior
year 83%
EBT $769 $1,594 $8 $195 $2,566
Change from prior
year 100% (7%) (71%) N/M 205%
Net income (loss) $2,030
Change from prior
year 330%
Diluted EPS $1.21
Change from prior
year 332%
Diluted shares used 1,685
Share-
Based Tax In-
Compen- Items Process
SEGMENTS sation(2) (3) R&D QSI (4) GAAP (5)
-------- --------- ----- -------- ------- --------
Revenues $4 $5,333
Change from prior
year (69%) 7%
Operating income
(loss) ($304) ($3) ($236) $1,655
Change from prior
year (7%) (36%) 125%
EBT ($304) ($3) ($243) $2,016
Change from prior
year (7%) N/M (22%) 476%
Net income (loss) ($211) ($65) ($3) ($136) $1,615
Change from prior
year 13% N/M N/M (1%) N/M
Diluted EPS ($0.13) ($0.04) ($0.08) $0.96
Change from prior
year 13% N/M N/M 0% N/M
Diluted shares used 1,685 1,685 1,685 1,685 1,685
6 MONTHS - FISCAL 2009
----------------------
Pro Forma
Reconciling Pro
Items Forma
SEGMENTS QCT QTL QWI (1)(5) (5)
-------- --- --- --- ------------ ------
Revenues $2,650 $1,961 $346 $2 $4,959
Operating income (loss) 1,200
EBT 385 1,713 28 (1,285) 841
Net income (loss) 472
Diluted EPS $0.28
Diluted shares used 1,665
Share-
Based Tax In-
Compen- Items Process
SEGMENTS sation(2) (3) R&D QSI (4) GAAP (5)
-------- --------- ----- -------- ------- --------
Revenues $13 $4,972
Operating income
(loss) (285) - (6) (174) 735
EBT (285) - (6) (200) 350
Net income
(loss) (243) (36) (6) (135) 52
Diluted EPS ($0.15) ($0.02) ($0.08) $0.03
Diluted shares used 1,665 1,665 1,665 1,665 1,665
FISCAL YEAR 2009
----------------
Pro Forma
Reconciling Pro
Items Forma
SEGMENTS QCT QTL QWI (1)(5) (5)
-------- --- --- --- ------------ ------
Revenues $6,135 $3,605 $641 $6 $10,387
Operating income
(loss) 3,153
EBT 1,441 3,068 20 (1,502) 3,027
Net income (loss) 2,187
Diluted EPS $1.31
Diluted shares used 1,673
Share-
Based Tax In-
Compen- Items Process
SEGMENTS sation(2) (3) R&D QSI (4) GAAP (5)
-------- --------- ----- -------- ------- --------
Revenues $29 $10,416
Operating income
(loss) (584) - (6) (337) 2,226
EBT (584) - (6) (361) 2,076
Net income (loss) (455) 118 (6) (252) 1,592
Diluted EPS ($0.27) $0.07 ($0.15) $0.95
Diluted shares used 1,673 1,673 1,673 1,673 1,673
(1) Pro forma reconciling items related to revenues consist
primarily of other nonreportable segment revenues less
intersegment eliminations. Pro forma reconciling items
related to earnings before taxes consist primarily of
certain investment income or losses, research and
development expenses, sales and marketing expenses and
other operating expenses that are not allocated to the
segments for management reporting purposes, nonreportable
segment results and the elimination of intersegment profit.
(2) Certain share-based compensation is included in
operating expenses as part of employee-related costs but
is not allocated to the Company's segments as such costs
are not considered relevant by management in evaluating
segment performance.
(3) During the first and second quarters of fiscal 2010,
the Company recorded $32 million and $33 million in state
tax expense, respectively, or $0.02 diluted loss per share
for each quarter, that arises because deferred revenue
related to the license and settlement agreements with Nokia
is taxable in fiscal 2010 but the resulting deferred tax
asset will reverse in future years when the Company's state
tax rate will be lower.
(4) At fiscal year-end, the sum of the quarterly tax
provisions for each column, including QSI, equals the
annual tax provisions for each column computed in
accordance with GAAP. In interim quarters, the tax
provision for the QSI operating segment is computed by
subtracting the pro forma tax provision, the tax items
column and the tax provision related to share-based
compensation from the GAAP tax provision.
(5) Fiscal 2009 results included a $783 million charge
related to a litigation settlement and patent agreement
with Broadcom Corporation, including $748 million recorded
in the second quarter of fiscal 2009 and $35 million
recorded in the fourth quarter of 2009. The fourth quarter
of fiscal 2009 results also included a $230 million charge
related to a fine that had been announced by the Korea Fair
Trade Commission.
N/M - Not Meaningful
Sums may not equal totals due to rounding.
Conference Call
Qualcomm's second quarter fiscal 2010 earnings conference call will be
broadcast live on April 21, 2010 beginning at 1:45 p.m. Pacific Time (PT) on
forward-looking financial information and will include a discussion of
"non-GAAP financial measures" as that term is 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 the other material financial and
statistical information to be discussed in the conference call, will be
immediately prior to commencement of the call. A taped audio replay will be
available via telephone on April 21, 2010, beginning at approximately 5:30
p.m. PT through May 21, 2010 at 9:00 p.m. PT. To listen to the replay, U.S.
callers may dial +1-800-642-1687 and international callers may dial
+1-706-645-9291. U.S. and international callers should use reservation number
5349272. An audio replay of the conference call will be available on the
live call.
Editor's Note: To view the web slides that accompany this earnings
release and conference call, please go to the Qualcomm Investor Relations
Qualcomm Incorporated (Nasdaq: QCOM) is a leader in developing and
delivering innovative digital wireless communications products and services
based on CDMA and other advanced technologies. Headquartered in San Diego,
Calif., Qualcomm is included in the S&P 100 Index, the S&P 500 Index and is a
2010 FORTUNE 500(R) company. For more information, please visit
Note Regarding Use of Non-GAAP Financial Measures
The Company presents pro forma financial information that is used by
management (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 Qualcomm CDMA Technologies, Qualcomm Technology Licensing and Qualcomm
Wireless & Internet segments; and (iii) to compare the performance and
efficiency of these segments against each other and against competitors
outside the Company. Pro forma measurements of the following financial data
are used by the Company's management: revenues, R&D expenses, SG&A expenses,
total 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. Management 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 pro forma 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 pro forma
financial measures applicable to the Company and its business segments.
Pro forma information used by management excludes the QSI segment,
certain share-based compensation, certain tax items and acquired in-process
R&D. The QSI segment 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 are viewed by management as unrelated to the
Company's operational performance. Share-based compensation, other than
amounts related to share-based awards granted under a bonus program that may
result in the issuance of unrestricted shares of the Company's common stock,
is excluded because management views such share-based compensation as
unrelated to the Company's operational performance. Moreover, it is generally
not an expense that requires or will require cash payment by the Company.
Further, share-based compensation related to stock options is affected by
factors that are subject to change, including the Company's stock price,
stock market volatility, expected option life, risk-free interest rates and
expected dividend payouts in future years. Certain tax items that were
recorded in reported earnings in each fiscal year presented, but 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 pro forma
tax rate and after tax earnings. Acquired in-process R&D is excluded because
such expense is viewed by management as unrelated to the operating activities
of the Company's ongoing core businesses.
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 shareholder value. The Company believes
that this presentation is useful in evaluating its operating performance and
financial strength. In addition, management uses this measure to evaluate the
Company's performance, to value the Company and to compare its operating
performance with other companies in the industry.
The non-GAAP pro forma 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, "pro forma" is not
a term defined by GAAP, and, as a result, the Company's measure of pro forma
results might be different than similarly titled measures used by other
companies. Reconciliations between GAAP results and pro forma results are
presented herein.
Note Regarding Forward-Looking Statements
In addition to the historical information contained herein, this news
release contains forward-looking statements that are subject to risks and
uncertainties. Actual results may differ substantially from those referred to
herein due to a number of factors, including but not limited to risks
associated with: the rate of deployment and adoption of, and demand for, our
technologies in wireless networks and of wireless communications, equipment
and services, including CDMA2000 1X, 1xEV-DO, WCDMA, HSPA, TD-SCDMA and OFDMA
both domestically and internationally; the uncertainty of global economic
conditions and its potential impact on demand for our products, services or
applications and the value of our marketable securities; attacks on our
business model, including results of current and future litigation and
arbitration proceedings, as well as actions of governmental or
quasi-governmental bodies, and the costs we incur in connection therewith,
including potentially damaged relationships with customers and operators who
may be impacted by the results of these proceedings; our dependence on major
customers and licensees; our dependence on third-party manufacturers and
suppliers; our ability to maintain and improve operational efficiencies and
profitability; the development, deployment and commercial acceptance of the
FLO TV network and FLO(TM) technology; the development and commercial
acceptance of the mirasol(R) display technology; foreign currency
fluctuations; strategic investments and transactions we have or may pursue;
as well as the other risks detailed from time-to-time in our SEC reports,
including the report on Form 10-K for the year ended September 27, 2009 and
most recent Form 10-Q. The Company undertakes 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 is a registered trademark of Qualcomm Incorporated. FLO TV and
FLO are trademarks of Qualcomm Incorporated. mirasol is a registered
trademark of Qualcomm MEMS Technologies, Inc. CDMA2000 is a registered
trademark of the Telecommunications Industry Association (TIA USA). 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
CONSOLIDATED STATEMENTS OF OPERATIONS
This schedule is to assist the reader in reconciling from
Pro Forma results to GAAP results
(In millions, except per share data)
(Unaudited)
Three Months Ended March 28, 2010
---------------------------------
Share-
Pro Based Tax
Forma Compensation Items
------ ------------ -----
Revenues:
Equipment and
services $1,593 $- $-
Licensing and
royalty fees 1,068 - -
----- --- ---
Total revenues 2,661 - -
----- --- ---
Operating
expenses:
Cost of equipment
and services
revenues 744 10 -
Research and
development 547 75 -
Selling, general
and
administrative 305 69 -
--- --- ---
Total operating
expenses 1,596 154 -
----- --- ---
Operating income
(loss) 1,065 (154) -
Investment income
(loss), net 193 (a) - -
--- --- ---
Income (loss)
before income
taxes 1,258 (154) -
Income tax
(expense)
benefit (269) (c) 56 (33) (e)
---- --- ---
Net income (loss) $989 $(98) $(33)
==== ==== ====
Earnings (loss)
per common
share:
Diluted $0.59 $(0.06) $(0.02)
===== ====== ======
Shares used in
per share
calculations:
Diluted 1,678 1,678 1,678
===== ===== =====
Supplemental
Financial Data:
----------------
Operating Cash
Flow $908 $(18) (g) $-
Operating Cash
Flow as a % of
Revenues 34%
Free Cash Flow
(f) $823 $(18) (g) $-
Free Cash Flow as
a % of Revenues 31%
----------------- ---
Three Months Ended March 28, 2010
---------------------------------
In-
Process
R&D QSI GAAP
--- --- ----
Revenues:
Equipment and
services $- $2 $1,595
Licensing and
royalty fees - - 1,068
--- --- -----
Total revenues - 2 2,663
--- --- -----
Operating
expenses:
Cost of equipment
and services
revenues - 55 809
Research and
development 3 23 648
Selling, general
and
administrative - 56 430
--- --- ---
Total operating
expenses 3 134 1,887
--- --- -----
Operating income
(loss) (3) (132) 776
Investment income
(loss), net - (4) (b) 189
--- --- ---
Income (loss)
before income
taxes (3) (136) 965
Income tax
(expense)
benefit - 55 (d) (191) (c)
--- --- ----
Net income (loss) $(3) $(81) $774
=== ==== ====
Earnings (loss)
per common
share:
Diluted $(0.00) $(0.05) $0.46
====== ====== =====
Shares used in
per share
calculations:
Diluted 1,678 1,678 1,678
===== ===== =====
Supplemental
Financial Data:
----------------
Operating Cash
Flow $- $(97) $793
Operating Cash
Flow as a % of
Revenues N/M 30%
Free Cash Flow
(f) $- $(120) $685
Free Cash Flow as
a % of Revenues N/M 26%
----------------- --- ---
(a) Included $129 million in interest and dividend income related to
cash, cash equivalents and marketable securities, which were not
part of the Company's strategic investment portfolio, $80 million in
net realized gains on investments and $3 million in gains on
derivatives, partially offset by $15 million in other-than-
temporary losses on investments and $4 million in interest expense.
(b) Included $3 million in interest expense and $1 million in other-
than-temporary losses on investments.
(c) The second quarter of fiscal 2010 effective tax rates were 20%
for GAAP and 21% for pro forma.
(d) At fiscal year-end, the sum of the quarterly tax provisions for
each column, including QSI, equals the annual tax provisions for
each column computed in accordance with GAAP. In interim quarters,
the tax provision for the QSI operating segment is computed by
subtracting the pro forma tax provision, the tax items column and
the tax provision related to share-based compensation from the GAAP
tax provision.
(e) During the second quarter of fiscal 2010, the Company recorded a
$33 million state tax expense, or $0.02 diluted loss per share, that
arises because deferred revenue related to the license and
settlement agreements with Nokia is taxable in fiscal 2010 but the
resulting deferred tax asset will reverse in future years when the
Company's state tax rate will be lower.
(f) Free Cash Flow is calculated as net cash provided by operating
activities less capital expenditures. Reconciliation of these
amounts is included in the Reconciliation of Pro Forma Free Cash
Flows to Net Cash Provided by Operating Activities (GAAP) and other
supplemental disclosures for the three months ended March 28, 2010,
included herein.
(g) Incremental tax benefits from stock options exercised during the
period.
Qualcomm Incorporated
CONSOLIDATED STATEMENTS OF OPERATIONS
This schedule is to assist the reader in reconciling from
Pro Forma results to GAAP results
(In millions, except per share data)
(Unaudited)
Six Months Ended March 28, 2010
-------------------------------
Share-
Pro Based Tax
Forma Compensation Items
------ ------------ -----
Revenues:
Equipment and
services $3,253 $- $-
Licensing and
royalty fees 2,076 - -
----- --- ---
Total revenues 5,329 - -
----- --- ---
Operating
expenses:
Cost of equipment
and services
revenues 1,502 21 -
Research and
development 1,049 147 -
Selling, general
and
administrative 580 136 -
--- --- ---
Total operating
expenses 3,131 304 -
----- --- ---
Operating income
(loss) 2,198 (304) -
Investment income
(loss), net 368 (a) - -
--- --- ---
Income (loss)
before income
taxes 2,566 (304) -
Income tax
(expense)
benefit (536) (c) 93 (65) (e)
---- --- ---
Net income (loss) $2,030 $(211) $(65)
====== ===== ====
Earnings (loss)
per common
share:
Diluted $1.21 $(0.13) $(0.04)
===== ====== ======
Shares used in
per share
calculations:
Diluted 1,685 1,685 1,685
===== ===== =====
Supplemental
Financial Data:
----------------
Operating cash
flow $2,246 $(31) (g) $-
Operating cash
flow as a % of
revenues 42%
Free cash flow
(f) $2,094 $(31) (g) $-
Free cash flow as
a % of revenues 39%
----------------- ---
Six Months Ended March 28, 2010
-------------------------------
In-
Process
R&D QSI GAAP
--- --- ----
Revenues:
Equipment and
services $- $4 $3,257
Licensing and
royalty fees - - 2,076
--- --- -----
Total revenues - 4 5,333
--- --- -----
Operating
expenses:
Cost of equipment
and services
revenues - 101 1,624
Research and
development 3 45 1,244
Selling, general
and
administrative - 94 810
--- --- ---
Total operating
expenses 3 240 3,678
--- --- -----
Operating income
(loss) (3) (236) 1,655
Investment income
(loss), net - (7) (b) 361
--- --- ---
Income (loss)
before income
taxes (3) (243) 2,016
Income tax
(expense)
benefit - 107 (d) (401) (c)
--- --- ----
Net income (loss) $(3) $(136) $1,615
=== ===== ======
Earnings (loss)
per common
share:
Diluted $(0.00) $(0.08) $0.96
====== ====== =====
Shares used in
per share
calculations:
Diluted 1,685 1,685 1,685
===== ===== =====
Supplemental
Financial Data:
----------------
Operating cash
flow $- $(183) $2,032
Operating cash
flow as a % of
revenues N/M 38%
Free cash flow
(f) $- $(227) $1,836
Free cash flow as
a % of revenues N/M 34%
----------------- --- ---
(a) Included $274 million in interest and dividend income related to
cash, cash equivalents and marketable securities, which were not
part of the Company's strategic investment portfolio, and $171
million in net realized gains on investments, partially offset by
$66 million in other-than-temporary losses on investments, $10
million in interest expense and $1 million in losses on derivatives.
(b) Included $7 million in other-than-temporary losses on
investments, $6 million in interest expense and $5 million in equity
in losses of investees, partially offset by $11 million in net
realized gains on investments.
(c) The first six months of fiscal 2010 effective tax rates were 20%
for GAAP and 21% for pro forma.
(d) At fiscal year-end, the sum of the quarterly tax provisions for
each column, including QSI, equals the annual tax provisions for
each column computed in accordance with GAAP. In interim quarters,
the tax provision for the QSI operating segment is computed by
subtracting the pro forma tax provision, the tax items column and
the tax provision related to share-based compensation from the GAAP
tax provision.
(e) During the first six months of fiscal 2010, the Company recorded
a $65 million state tax expense, or $0.04 diluted loss per share,
that arises because deferred revenue related to the license and
settlement agreements with Nokia is taxable in fiscal 2010 but the
resulting deferred tax asset will reverse in future years when the
Company's state tax rate will be lower.
(f) Free cash flow is calculated as net cash provided by operating
activities less capital expenditures. Reconciliation of these
amounts is included in the Reconciliation of Pro Forma Free Cash
Flows to Net Cash Provided by Operating Activities (GAAP) and other
supplemental disclosures for the six months ended March 28, 2010,
included herein.
(g) Incremental tax benefits from stock options exercised during the
period.
Qualcomm Incorporated
Reconciliation of Pro Forma Free Cash Flows to
Net Cash Provided by Operating Activities (GAAP)
and other supplemental disclosures
(In millions)
(Unaudited)
Three Months Ended March 28, 2010
---------------------------------
Share-
Based Tax
Pro Forma Compensation Items
--------- ------------ -----
Net cash provided (used) by
operating activities $908 $(18) (a) $-
Less: capital expenditures (85) - -
--- --- ---
Free cash flow $823 $(18) $-
==== ==== ===
Other supplemental cash
disclosures:
Cash transfers from QSI (1) $1 $- $-
Cash transfers to QSI (2) (130) - -
---- --- ---
Net cash transfers $(129) $- $-
===== === ===
Three Months Ended March 28, 2010
---------------------------------
In-
Process
R&D QSI GAAP
--- --- ----
Net cash provided (used) by
operating activities $- $(97) $793
Less: capital expenditures - (23) (108)
--- --- ----
Free cash flow $- $(120) $685
=== ===== ====
Other supplemental cash
disclosures:
Cash transfers from QSI (1) $- $(1) $-
Cash transfers to QSI (2) - 130 -
--- --- ---
Net cash transfers $- $129 $-
=== ==== ===
Six Months Ended March 28, 2010
-------------------------------
Share-
Based Tax
Pro Forma Compensation Items
--------- ------------ -----
Net cash provided (used) by
operating activities $2,246 $(31) (a) $-
Less: capital expenditures (152) - -
---- --- ---
Free cash flow $2,094 $(31) $-
====== ==== ===
Other supplemental cash
disclosures:
Cash transfers from QSI (1) $13 $- $-
Cash transfers to QSI (2) (243) - -
---- --- ---
Net cash transfers $(230) $- $-
===== === ===
Six Months Ended March 28, 2010
-------------------------------
In-
Process
R&D QSI GAAP
--- --- ----
Net cash provided (used) by
operating activities $- $(183) $2,032
Less: capital expenditures - (44) (196)
--- --- ----
Free cash flow $- $(227) $1,836
=== ===== ======
Other supplemental cash
disclosures:
Cash transfers from QSI (1) $- $(13) $-
Cash transfers to QSI (2) - 243 -
--- --- ---
Net cash transfers $- $230 $-
=== ==== ===
(1) Cash from sale of equity investments.
(2) Funding for strategic debt and equity investments, capital
expenditures and other QSI operating expenses.
Three Months Ended March 29, 2009
---------------------------------
Share-
Based Tax
Pro Forma Compensation Items
--------- ------------ -----
Net cash provided (used) by
operating activities $1,359 $(16) (a) $-
====== ====
Less: capital expenditures (206) - -
---- --- ===
Free cash flow $1,153 $(16) $-
====== ==== ===
Three Months Ended March 29, 2009
---------------------------------
In-
Process
R&D QSI GAAP
--- --- ----
Net cash provided (used) by
operating activities $- $(80) $1,263
===
Less: capital expenditures - (28) (234)
--- === ====
Free cash flow $- $(108) $1,029
=== ===== ======
Six Months Ended March 29, 2009
-------------------------------
Share-Based Tax
Pro Forma Compensation Items
--------- ------------ -----
Net cash provided (used) by
operating activities $4,988 $(32) (a) $-
Less: capital expenditures (415) - -
---- --- ---
Free cash flow $4,573 $(32) $-
====== ==== ===
Six Months Ended March 29, 2009
-------------------------------
In-
Process
R&D QSI GAAP
--- --- ----
Net cash provided (used) by
operating activities $- $(192) $4,764
Less: capital expenditures - (53) (468)
--- --- ----
Free cash flow $- $(245) $4,296
=== ===== ======
(a) Incremental tax benefits from stock options exercised during the
period.
Qualcomm Incorporated
Reconciliation of Diluted EPS Guidance
--------------------------------------
THIRD FISCAL QUARTER
--------------------
Q3 FY09 Current Guidance
Results Q3 FY10 Estimates
--------- ------- -----------------
Pro Forma
Diluted earnings per share
(EPS) $0.54 $0.51 - $0.55
Year-over-year change decrease 6% - increase 2%
----
GAAP
Diluted EPS $0.44 $0.40 - $0.44
Year-over-year change decrease 9% - even
Diluted EPS attributable to
QSI ($0.02) ($0.02)
Diluted EPS attributable to
share-based compensation ($0.08) ($0.07)
Diluted EPS attributable to
certain tax items $0.00 ($0.02)
Diluted EPS attributable to
in-process R&D $0.00 N/A
-----
FISCAL YEAR
-----------
FY 2009 Current Guidance
Results FY 2010 Estimates
--------- ------- -----------------
Pro Forma
Diluted EPS $1.31 $2.21 - $2.32
Year-over-year change increase 69% - 77%
----
GAAP
Diluted EPS $0.95 $1.71 - $1.82
Year-over-year change increase 80% - 92%
Diluted EPS attributable to
QSI ($0.15) ($0.15)
Diluted EPS attributable to
share-based compensation ($0.27) ($0.27)
Diluted EPS attributable to
certain tax items $0.07 ($0.08)
Diluted EPS attributable to
in-process R&D $0.00 N/A
--------------------------- ----- ---
N/A- Not applicable
Qualcomm Incorporated
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except per share data)
(Unaudited)
ASSETS
September
March 28, 27,
2010 2009
---- ----
Current assets:
Cash and cash equivalents $2,553 $2,717
Marketable securities 8,603 8,352
Accounts receivable, net 680 700
Inventories 402 453
Deferred tax assets 204 149
Other current assets 210 199
--- ---
Total current assets 12,652 12,570
Marketable securities 7,057 6,673
Deferred tax assets 1,376 843
Property, plant and equipment, net 2,374 2,387
Goodwill 1,483 1,492
Other intangible assets, net 3,093 3,065
Other assets 462 415
--- ---
Total assets $28,497 $27,445
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $545 $636
Payroll and other benefits related
liabilities 368 480
Unearned revenues 592 441
Income taxes payable 764 29
Other current liabilities 1,061 1,227
----- -----
Total current liabilities 3,330 2,813
Unearned revenues 3,687 3,464
Other liabilities 760 852
--- ---
Total liabilities 7,777 7,129
----- -----
Stockholders' equity:
Preferred stock, $0.0001 par value; issuable in
series;
8 shares authorized; none outstanding at
March 28, 2010 and September 27, 2009 - -
Common stock, $0.0001 par value; 6,000 shares
authorized;
1,640 and 1,669 shares issued and outstanding at
March 28, 2010 and September 27, 2009,
respectively - -
Paid-in capital 7,613 8,493
Retained earnings 12,287 11,235
Accumulated other comprehensive income 820 588
--- ---
Total stockholders' equity 20,720 20,316
------ ------
Total liabilities and stockholders'
equity $28,497 $27,445
======= =======
Qualcomm Incorporated
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
------------------ ----------------
March March March March
28, 29, 28, 29,
2010 2009 2010 2009
---- ---- ---- ----
Revenues:
Equipment and services $1,595 $1,412 $3,257 $2,835
Licensing and royalty fees 1,068 1,043 2,076 2,137
----- ----- ----- -----
Total revenues 2,663 2,455 5,333 4,972
----- ----- ----- -----
Operating expenses:
Cost of equipment and
services revenues 809 738 1,624 1,493
Research and development 648 604 1,244 1,207
Selling, general and
administrative 430 375 810 789
Litigation settlement,
patent license
and other related items - 748 - 748
--- --- --- ---
Total operating expenses 1,887 2,465 3,678 4,237
----- ----- ----- -----
Operating income (loss) 776 (10) 1,655 735
Investment income (loss),
net 189 (91) 361 (385)
--- --- --- ----
Income (loss) before income
taxes 965 (101) 2,016 350
Income tax expense (191) (188) (401) (298)
---- ---- ---- ----
Net income (loss) $774 $(289) $1,615 $52
==== ===== ====== ===
Basic earnings (loss) per
common share $0.47 $(0.18) $0.97 $0.03
===== ====== ===== =====
Diluted earnings (loss) per
common share $0.46 $(0.18) $0.96 $0.03
===== ====== ===== =====
Shares used in per share
calculations:
Basic 1,662 1,651 1,667 1,652
===== ===== ===== =====
Diluted 1,678 1,651 1,685 1,665
===== ===== ===== =====
Dividends per share paid $0.17 $0.32 $0.34 $0.32
===== ===== ===== =====
Dividends per share
announced $0.17 $0.16 $0.34 $0.32
===== ===== ===== =====
Qualcomm Incorporated
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Three Months Ended Six Months Ended
------------------ ----------------
March 28, March 29, March 28, March 29,
--------- --------- --------- ---------
2010 2009 2010 2009
---- ---- ---- ----
Operating Activities:
Net income (loss) $774 $(289) $1,615 $52
Adjustments to reconcile
net income (loss) to
net cash provided by
operating activities:
Depreciation and
amortization 167 154 329 306
Revenues related to non-
monetary exchanges (31) (29) (68) (57)
Income tax provision
(less than) in excess
of income tax payments (38) 121 (6) 166
Non-cash portion of
share-based
compensation expense 153 140 304 285
Incremental tax benefit
from stock options
exercised (18) (16) (31) (32)
Net realized (gains)
losses on marketable
securities and other
investments (80) - (182) 33
Impairment losses on
marketable securities
and other investments 16 209 73 601
Other items, net (8) (5) (4) (20)
Changes in assets and
liabilities, net of
effects of
acquisitions:
Accounts receivable, net (52) 108 35 2,824
Inventories (49) 48 52 113
Other assets (38) (11) (70) (30)
Trade accounts payable 145 89 (81) (103)
Payroll, benefits and
other liabilities (115) 764 (239) 710
Unearned revenues (33) (20) 305 (84)
--- --- --- ---
Net cash provided by
operating activities 793 1,263 2,032 4,764
--- ----- ----- -----
Investing Activities:
Capital expenditures (108) (234) (196) (468)
Purchases of available-
for-sale securities (2,382) (1,710) (4,480) (4,296)
Proceeds from sale of
available-for-sale
securities 2,228 1,088 4,241 2,461
Cash received for
partial settlement of
investment receivables 25 115 33 317
Other investments and
acquisitions, net of
cash acquired (22) (26) (28) (40)
Change in collateral
held under securities
lending - 11 - 173
Other items, net 4 10 3 6
--- --- --- ---
Net cash used by
investing activities (255) (746) (427) (1,847)
---- ---- ---- ------
Financing Activities:
Proceeds from issuance
of common stock 332 75 484 101
Incremental tax benefit
from stock options
exercised 18 16 31 32
Repurchase and
retirement of common
stock (1,715) - (1,715) (285)
Dividends paid (279) (528) (563) (528)
Change in obligations
under securities
lending - (11) - (173)
Other items, net - (2) (1) (3)
--- --- --- ---
Net cash used by
financing activities (1,644) (450) (1,764) (856)
------ ---- ------ ----
Effect of exchange rate
changes on cash (1) (1) (5) (9)
--- --- --- ---
Net (decrease) increase
in cash and cash
equivalents (1,107) 66 (164) 2,052
Cash and cash
equivalents at
beginning of period 3,660 3,826 2,717 1,840
----- ----- ----- -----
Cash and cash
equivalents at end of
period $2,553 $3,892 $2,553 $3,892
====== ====== ====== ======
SOURCE: Qualcomm Incorporated
CONTACT: Warren Kneeshaw of Qualcomm Incorporated,
+1-858-658-4813,
ir@qualcomm.com
NEWS 
