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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
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95-3685934
(I.R.S. Employer
Identification No.)
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5775 Morehouse Dr., San Diego, California
(Address of Principal Executive Offices)
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92121-1714
(Zip Code)
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Class
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Number of Shares
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Common Stock, $0.0001 per share par value
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1,727,835,431
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Page
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ITEM 1.
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CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
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March 31,
2013 |
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September 30,
2012 |
||||
ASSETS
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|||||||
Current assets:
|
|
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||||
Cash and cash equivalents
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$
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4,093
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|
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$
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3,807
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Marketable securities
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9,400
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8,567
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Accounts receivable, net
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1,889
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1,459
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|
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Inventories
|
1,484
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1,030
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Deferred tax assets
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318
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309
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Other current assets
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582
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473
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Total current assets
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17,766
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15,645
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Marketable securities
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17,046
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14,463
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Deferred tax assets
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1,229
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1,412
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Assets held for sale
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1,070
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1,109
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Property, plant and equipment, net
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2,971
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2,851
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Goodwill
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3,975
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3,917
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Other intangible assets, net
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2,735
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2,938
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Other assets
|
807
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677
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Total assets
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$
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47,599
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$
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43,012
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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|||||||
Current liabilities:
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||||
Trade accounts payable
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$
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1,628
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$
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1,298
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Payroll and other benefits related liabilities
|
679
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664
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Unearned revenues
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514
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545
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Liabilities held for sale
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538
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1,072
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Other current liabilities
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1,904
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1,723
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Total current liabilities
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5,263
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5,302
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Unearned revenues
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3,697
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3,739
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Liabilities held for sale
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531
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—
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Other liabilities
|
480
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426
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Total liabilities
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9,971
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9,467
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Commitments and contingencies (Note 6)
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Stockholders’ equity:
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Qualcomm stockholders’ equity:
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Preferred stock, $0.0001 par value; 8 shares authorized; none outstanding
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—
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—
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Common stock, $0.0001 par value; 6,000 shares authorized; 1,726 and 1,706 shares issued
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and outstanding, respectively
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—
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—
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Paid-in capital
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12,991
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11,956
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Retained earnings
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23,599
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20,701
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Accumulated other comprehensive income
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1,021
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866
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Total Qualcomm stockholders’ equity
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37,611
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33,523
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Noncontrolling interests
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17
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22
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Total stockholders’ equity
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37,628
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33,545
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Total liabilities and stockholders’ equity
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$
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47,599
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$
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43,012
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Three Months Ended
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Six Months Ended
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||||||||||||
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March 31,
2013 |
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March 25,
2012 |
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March 31,
2013 |
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March 25,
2012 |
||||||||
Revenues:
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||||||||
Equipment and services
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$
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3,990
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$
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3,137
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$
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8,189
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$
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6,305
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Licensing
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2,134
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1,806
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3,954
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3,320
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||||
Total revenues
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6,124
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4,943
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12,143
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9,625
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Operating expenses:
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Cost of equipment and services revenues
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2,372
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1,783
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4,609
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3,537
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Research and development
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1,214
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954
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2,320
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1,827
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Selling, general and administrative
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661
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595
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1,248
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1,098
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Other
|
—
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97
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—
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97
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||||
Total operating expenses
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4,247
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3,429
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8,177
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6,559
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||||
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Operating income
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1,877
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1,514
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3,966
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3,066
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||||||||
Investment income, net (Note 3)
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259
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220
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497
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389
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Income from continuing operations before income taxes
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2,136
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1,734
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4,463
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3,455
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|
||||
Income tax expense
|
(273
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)
|
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(296
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)
|
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(697
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)
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(617
|
)
|
||||
Income from continuing operations
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1,863
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1,438
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3,766
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2,838
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||||
Discontinued operations, net of income taxes (Note 7)
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—
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761
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—
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756
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|
||||
Net income
|
1,863
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|
|
2,199
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3,766
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3,594
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|
||||
Net loss attributable to noncontrolling interests
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3
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|
31
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|
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6
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|
|
37
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|
||||
Net income attributable to Qualcomm
|
$
|
1,866
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|
$
|
2,230
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|
|
$
|
3,772
|
|
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$
|
3,631
|
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||||||||
Basic earnings per share attributable to Qualcomm:
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||||||||
Continuing operations
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$
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1.08
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$
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0.86
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$
|
2.20
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|
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$
|
1.70
|
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Discontinued operations
|
—
|
|
|
0.45
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—
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|
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0.45
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|
||||
Net income
|
$
|
1.08
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$
|
1.31
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$
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2.20
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$
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2.15
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Diluted earnings per share attributable to Qualcomm:
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|
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|
||||||||
Continuing operations
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$
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1.06
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$
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0.84
|
|
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$
|
2.15
|
|
|
$
|
1.66
|
|
Discontinued operations
|
—
|
|
|
0.44
|
|
|
—
|
|
|
0.44
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|
||||
Net income
|
$
|
1.06
|
|
|
$
|
1.28
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|
|
$
|
2.15
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$
|
2.10
|
|
Shares used in per share calculations:
|
|
|
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|
||||||||
Basic
|
1,722
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|
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1,698
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1,716
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|
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1,691
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|
||||
Diluted
|
1,763
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|
|
1,743
|
|
|
1,757
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|
|
1,732
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|
||||
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|
|
|
|
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|
||||||||
Dividends per share announced
|
$
|
0.250
|
|
|
$
|
0.215
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|
|
$
|
0.500
|
|
|
$
|
0.430
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
March 31,
2013 |
|
March 25,
2012 |
|
March 31,
2013 |
|
March 25,
2012 |
||||||||
Net income
|
$
|
1,863
|
|
|
$
|
2,199
|
|
|
$
|
3,766
|
|
|
$
|
3,594
|
|
Other comprehensive income, net of income taxes:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation
|
(10
|
)
|
|
16
|
|
|
(7
|
)
|
|
(12
|
)
|
||||
Noncredit other-than-temporary impairment losses and subsequent changes in fair value related to certain available-for-sale debt securities
|
9
|
|
|
3
|
|
|
(1
|
)
|
|
4
|
|
||||
Net unrealized gains on other available-for-sale securities and derivative instruments
|
196
|
|
|
320
|
|
|
247
|
|
|
495
|
|
||||
Reclassification of net realized gains on available-for-sale securities and derivative instruments included in net income
|
(56
|
)
|
|
(40
|
)
|
|
(95
|
)
|
|
(57
|
)
|
||||
Reclassification of other-than-temporary losses on available-for-sale securities included in net income
|
2
|
|
|
16
|
|
|
11
|
|
|
25
|
|
||||
Total other comprehensive income
|
141
|
|
|
315
|
|
|
155
|
|
|
455
|
|
||||
Total comprehensive income
|
2,004
|
|
|
2,514
|
|
|
3,921
|
|
|
4,049
|
|
||||
Comprehensive loss attributable to noncontrolling interests
|
3
|
|
|
30
|
|
|
6
|
|
|
38
|
|
||||
Comprehensive income attributable to Qualcomm
|
$
|
2,007
|
|
|
$
|
2,544
|
|
|
$
|
3,927
|
|
|
$
|
4,087
|
|
|
Six Months Ended
|
||||||
|
March 31,
2013 |
|
March 25,
2012 |
||||
Operating Activities:
|
|
|
|
||||
Net income
|
$
|
3,766
|
|
|
$
|
3,594
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
489
|
|
|
419
|
|
||
Gain on sale of wireless spectrum
|
—
|
|
|
(1,179
|
)
|
||
Revenues related to non-monetary exchanges
|
(62
|
)
|
|
(61
|
)
|
||
Income tax provision in excess of income tax payments
|
161
|
|
|
500
|
|
||
Non-cash portion of share-based compensation expense
|
550
|
|
|
488
|
|
||
Incremental tax benefits from share-based compensation
|
(103
|
)
|
|
(98
|
)
|
||
Net realized gains on marketable securities and other investments
|
(179
|
)
|
|
(144
|
)
|
||
Gains on derivative instruments
|
(12
|
)
|
|
(74
|
)
|
||
Other items, net
|
91
|
|
|
62
|
|
||
Changes in assets and liabilities, net of effects of acquisitions:
|
|
|
|
||||
Accounts receivable, net
|
(424
|
)
|
|
(195
|
)
|
||
Inventories
|
(454
|
)
|
|
(21
|
)
|
||
Other assets
|
(201
|
)
|
|
(10
|
)
|
||
Trade accounts payable
|
377
|
|
|
287
|
|
||
Payroll, benefits and other liabilities
|
203
|
|
|
(261
|
)
|
||
Unearned revenues
|
(11
|
)
|
|
360
|
|
||
Net cash provided by operating activities
|
4,191
|
|
|
3,667
|
|
||
Investing Activities:
|
|
|
|
||||
Capital expenditures
|
(494
|
)
|
|
(635
|
)
|
||
Purchases of available-for-sale securities
|
(7,449
|
)
|
|
(7,036
|
)
|
||
Proceeds from sales of available-for-sale securities
|
4,532
|
|
|
3,543
|
|
||
Purchases of trading securities
|
(1,796
|
)
|
|
(1,639
|
)
|
||
Proceeds from sales of trading securities
|
1,598
|
|
|
651
|
|
||
Proceeds from sale of wireless spectrum
|
—
|
|
|
1,925
|
|
||
Acquisitions and other investments, net of cash acquired
|
(132
|
)
|
|
(329
|
)
|
||
Other items, net
|
70
|
|
|
(53
|
)
|
||
Net cash used by investing activities
|
(3,671
|
)
|
|
(3,573
|
)
|
||
Financing Activities:
|
|
|
|
||||
Borrowing under loans and debentures
|
—
|
|
|
232
|
|
||
Repayment of loans
|
—
|
|
|
(151
|
)
|
||
Proceeds from issuance of common stock
|
747
|
|
|
1,135
|
|
||
Incremental tax benefits from share-based compensation
|
103
|
|
|
98
|
|
||
Repurchases and retirements of common stock
|
(250
|
)
|
|
(99
|
)
|
||
Dividends paid
|
(859
|
)
|
|
(729
|
)
|
||
Other items, net
|
(2
|
)
|
|
(39
|
)
|
||
Net cash (used) provided by financing activities
|
(261
|
)
|
|
447
|
|
||
Changes in cash and cash equivalents held for sale
|
31
|
|
|
—
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(4
|
)
|
|
(5
|
)
|
||
Net increase in cash and cash equivalents
|
286
|
|
|
536
|
|
||
Cash and cash equivalents at beginning of period
|
3,807
|
|
|
5,462
|
|
||
Cash and cash equivalents at end of period
|
$
|
4,093
|
|
|
$
|
5,998
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
March 31,
2013 |
|
March 25,
2012 |
|
March 31,
2013 |
|
March 25,
2012 |
||||||||
Cost of equipment and services revenues
|
$
|
17
|
|
|
$
|
17
|
|
|
$
|
37
|
|
|
$
|
36
|
|
Research and development
|
156
|
|
|
126
|
|
|
313
|
|
|
253
|
|
||||
Selling, general and administrative
|
95
|
|
|
97
|
|
|
201
|
|
|
198
|
|
||||
Share-based compensation expense before income taxes
|
268
|
|
|
240
|
|
|
551
|
|
|
487
|
|
||||
Related income tax benefit
|
(48
|
)
|
|
(56
|
)
|
|
(111
|
)
|
|
(109
|
)
|
||||
Share-based compensation expense, net of income taxes
|
$
|
220
|
|
|
$
|
184
|
|
|
$
|
440
|
|
|
$
|
378
|
|
Accounts Receivable (in millions)
|
March 31,
2013 |
|
September 30,
2012 |
||||
Trade, net of allowances for doubtful accounts of $2 and $1, respectively
|
$
|
1,852
|
|
|
$
|
1,418
|
|
Long-term contracts
|
28
|
|
|
32
|
|
||
Other
|
9
|
|
|
9
|
|
||
|
$
|
1,889
|
|
|
$
|
1,459
|
|
Inventories (in millions)
|
March 31,
2013 |
|
September 30,
2012 |
||||
Raw materials
|
$
|
14
|
|
|
$
|
19
|
|
Work-in-process
|
671
|
|
|
531
|
|
||
Finished goods
|
799
|
|
|
480
|
|
||
|
$
|
1,484
|
|
|
$
|
1,030
|
|
Other Current Liabilities (in millions)
|
March 31,
2013 |
|
September 30,
2012 |
||||
Customer incentives and other customer-related liabilities
|
$
|
1,349
|
|
|
$
|
1,107
|
|
Other
|
555
|
|
|
616
|
|
||
|
$
|
1,904
|
|
|
$
|
1,723
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
March 31,
2013 |
|
March 25,
2012 |
|
March 31,
2013 |
|
March 25,
2012 |
||||||||
Interest and dividend income
|
$
|
181
|
|
|
$
|
146
|
|
|
$
|
347
|
|
|
$
|
275
|
|
Interest expense
|
(7
|
)
|
|
(29
|
)
|
|
(15
|
)
|
|
(57
|
)
|
||||
Net realized gains on marketable securities
|
74
|
|
|
90
|
|
|
167
|
|
|
127
|
|
||||
Net realized gains on other investments
|
10
|
|
|
11
|
|
|
12
|
|
|
17
|
|
||||
Impairment losses on marketable securities
|
(10
|
)
|
|
(23
|
)
|
|
(15
|
)
|
|
(37
|
)
|
||||
Impairment losses on other investments
|
(2
|
)
|
|
(1
|
)
|
|
(7
|
)
|
|
(6
|
)
|
||||
Gains on derivative instruments
|
14
|
|
|
28
|
|
|
12
|
|
|
74
|
|
||||
Equity in losses of investees
|
(1
|
)
|
|
(2
|
)
|
|
(4
|
)
|
|
(4
|
)
|
||||
|
$
|
259
|
|
|
$
|
220
|
|
|
$
|
497
|
|
|
$
|
389
|
|
|
Qualcomm Stockholders’ Equity
|
|
Noncontrolling Interests
|
|
Total Stockholders’ Equity
|
||||||
Balance at September 30, 2012
|
$
|
33,523
|
|
|
$
|
22
|
|
|
$
|
33,545
|
|
Net income (loss)
|
3,772
|
|
|
(6
|
)
|
|
3,766
|
|
|||
Other comprehensive income
|
155
|
|
|
—
|
|
|
155
|
|
|||
Common stock issued under employee benefit plans and the related tax benefits, net of shares withheld for taxes
|
725
|
|
|
—
|
|
|
725
|
|
|||
Share-based compensation
|
562
|
|
|
—
|
|
|
562
|
|
|||
Dividends
|
(874
|
)
|
|
—
|
|
|
(874
|
)
|
|||
Stock repurchases
|
(250
|
)
|
|
—
|
|
|
(250
|
)
|
|||
Other
|
(2
|
)
|
|
1
|
|
|
(1
|
)
|
|||
Balance at March 31, 2013
|
$
|
37,611
|
|
|
$
|
17
|
|
|
$
|
37,628
|
|
|
March 31,
2013 |
|
September 30,
2012 |
||||
Foreign currency translation
|
$
|
(114
|
)
|
|
$
|
(107
|
)
|
Noncredit other-than-temporary impairment losses and subsequent changes in fair value related to certain available-for-sale debt securities, net of income taxes
|
25
|
|
|
29
|
|
||
Net unrealized gains on other available-for-sale securities, net of income taxes
|
1,083
|
|
|
942
|
|
||
Net unrealized gains on derivative instruments, net of income taxes
|
27
|
|
|
2
|
|
||
|
$
|
1,021
|
|
|
$
|
866
|
|
|
2013
|
|
2012
|
||||||||||||
|
Per Share
|
|
Total
|
|
Per Share
|
|
Total
|
||||||||
First quarter
|
$
|
0.250
|
|
|
$
|
435
|
|
|
$
|
0.215
|
|
|
$
|
368
|
|
Second quarter
|
0.250
|
|
|
439
|
|
|
0.215
|
|
|
377
|
|
||||
|
$
|
0.500
|
|
|
$
|
874
|
|
|
$
|
0.430
|
|
|
$
|
745
|
|
|
Capital
Leases
|
|
Operating
Leases
|
|
Total
|
||||||
Remainder of fiscal 2013
|
$
|
1
|
|
|
$
|
45
|
|
|
$
|
46
|
|
2014
|
2
|
|
|
143
|
|
|
145
|
|
|||
2015
|
2
|
|
|
92
|
|
|
94
|
|
|||
2016
|
2
|
|
|
39
|
|
|
41
|
|
|||
2017
|
2
|
|
|
31
|
|
|
33
|
|
|||
Thereafter
|
38
|
|
|
57
|
|
|
95
|
|
|||
Total minimum lease payments
|
$
|
47
|
|
|
$
|
407
|
|
|
$
|
454
|
|
Deduct: Amounts representing interest
|
25
|
|
|
|
|
|
|||||
Present value of minimum lease payments
|
22
|
|
|
|
|
|
|||||
Deduct: Current portion of capital lease obligations
|
—
|
|
|
|
|
|
|||||
Long-term portion of capital lease obligations
|
$
|
22
|
|
|
|
|
|
•
|
QCT segment — develops and supplies integrated circuits and system software based on CDMA, OFDMA and other technologies for use in voice and data communications, networking, application processing, multimedia and global positioning system products.
|
•
|
QTL segment — grants licenses or otherwise provides rights to use portions of the Company’s intellectual property portfolio, which, among other rights, includes certain patent rights essential to and/or useful in the manufacture and sale of certain wireless products, including, without limitation, products implementing CDMA2000, WCDMA, CDMA TDD (including TD-SCDMA), GSM/GPRS/EDGE and/or OFDMA standards and their derivatives, and QTL collects license fees as well as royalties based on sales by licensees of products incorporating or using the Company’s intellectual property.
|
•
|
QWI segment — comprised of:
|
•
|
Omnitracs division (formerly QES) — provides fleet management, satellite- and terrestrial-based two-way wireless information and position reporting and other services, software and hardware to transportation and logistics companies;
|
•
|
QIS division — provides content enablement services for the wireless industry and push-to-talk and other software products and services for wireless network operators;
|
•
|
QGOV division — provides development and other services and related products involving wireless communications technologies to government agencies and their contractors; and
|
•
|
QRS (Qualcomm Retail Solutions) division (formerly Firethorn) — builds and manages software applications that enable certain mobile commerce services.
|
•
|
QSI segment — comprised of the Company’s Qualcomm Ventures and Structured Finance & Strategic Investments divisions. QSI makes strategic investments that the Company believes will open new opportunities for its technologies, support the design and introduction of new products or services for voice and data
|
|
QCT
|
|
QTL
|
|
QWI
|
|
QSI
|
|
Reconciling
Items
|
|
Total
|
||||||||||||
For the three months ended:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
March 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenues
|
$
|
3,916
|
|
|
$
|
2,057
|
|
|
$
|
155
|
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
$
|
6,124
|
|
EBT
|
681
|
|
|
1,803
|
|
|
—
|
|
|
33
|
|
|
(381
|
)
|
|
2,136
|
|
||||||
March 25, 2012
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenues
|
$
|
3,059
|
|
|
$
|
1,723
|
|
|
$
|
159
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
4,943
|
|
EBT
|
599
|
|
|
1,540
|
|
|
(10
|
)
|
|
(99
|
)
|
|
(296
|
)
|
|
1,734
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
For the six months ended:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
March 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenues
|
$
|
8,036
|
|
|
$
|
3,813
|
|
|
$
|
301
|
|
|
$
|
—
|
|
|
$
|
(7
|
)
|
|
$
|
12,143
|
|
EBT
|
1,749
|
|
|
3,335
|
|
|
(4
|
)
|
|
16
|
|
|
(633
|
)
|
|
4,463
|
|
||||||
March 25, 2012
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenues
|
$
|
6,143
|
|
|
$
|
3,162
|
|
|
$
|
311
|
|
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
9,625
|
|
EBT
|
1,338
|
|
|
2,808
|
|
|
(9
|
)
|
|
(133
|
)
|
|
(549
|
)
|
|
3,455
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
March 31,
2013 |
|
March 25,
2012 |
|
March 31,
2013 |
|
March 25,
2012 |
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Nonreportable segments
|
$
|
(3
|
)
|
|
$
|
3
|
|
|
$
|
(5
|
)
|
|
$
|
11
|
|
Intersegment eliminations
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
(2
|
)
|
||||
|
$
|
(4
|
)
|
|
$
|
2
|
|
|
$
|
(7
|
)
|
|
$
|
9
|
|
EBT
|
|
|
|
|
|
|
|
||||||||
Unallocated cost of equipment and services revenues
|
$
|
(93
|
)
|
|
$
|
(68
|
)
|
|
$
|
(177
|
)
|
|
$
|
(138
|
)
|
Unallocated research and development expenses
|
(204
|
)
|
|
(176
|
)
|
|
(389
|
)
|
|
(339
|
)
|
||||
Unallocated selling, general and administrative expenses
|
(153
|
)
|
|
(168
|
)
|
|
(264
|
)
|
|
(283
|
)
|
||||
Unallocated investment income, net
|
220
|
|
|
228
|
|
|
468
|
|
|
418
|
|
||||
Nonreportable segments
|
(151
|
)
|
|
(112
|
)
|
|
(271
|
)
|
|
(207
|
)
|
||||
|
$
|
(381
|
)
|
|
$
|
(296
|
)
|
|
$
|
(633
|
)
|
|
$
|
(549
|
)
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
March 31,
2013 |
|
March 25,
2012 |
|
March 31,
2013 |
|
March 25,
2012 |
||||||||
Unallocated cost of equipment and services revenues
|
$
|
76
|
|
|
$
|
51
|
|
|
$
|
140
|
|
|
$
|
102
|
|
Unallocated research and development expenses
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Unallocated selling, general and administrative expenses
|
6
|
|
|
6
|
|
|
13
|
|
|
15
|
|
|
March 31,
2013 |
|
September 30,
2012 |
||||
QCT
|
$
|
3,127
|
|
|
$
|
2,278
|
|
QTL
|
115
|
|
|
63
|
|
||
QWI
|
116
|
|
|
129
|
|
||
QSI
|
1,455
|
|
|
1,424
|
|
||
Reconciling items
|
42,786
|
|
|
39,118
|
|
||
Total consolidated assets
|
$
|
47,599
|
|
|
$
|
43,012
|
|
•
|
Level 1 includes financial instruments for which quoted market prices for identical instruments are available in active markets.
|
•
|
Level 2 includes financial instruments for which there are inputs other than quoted prices included within Level 1 that are observable for the instrument.
|
•
|
Level 3 includes financial instruments for which fair value is derived from valuation techniques in which one or more significant inputs are unobservable, including the Company’s own assumptions.
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash equivalents (1)
|
$
|
1,722
|
|
|
$
|
1,799
|
|
|
$
|
—
|
|
|
$
|
3,521
|
|
Marketable securities
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities and government-related securities
|
770
|
|
|
592
|
|
|
—
|
|
|
1,362
|
|
||||
Corporate bonds and notes
|
—
|
|
|
14,095
|
|
|
—
|
|
|
14,095
|
|
||||
Mortgage- and asset-backed securities
|
—
|
|
|
1,328
|
|
|
312
|
|
|
1,640
|
|
||||
Auction rate securities
|
—
|
|
|
—
|
|
|
84
|
|
|
84
|
|
||||
Common and preferred stock
|
1,394
|
|
|
897
|
|
|
—
|
|
|
2,291
|
|
||||
Equity funds
|
1,173
|
|
|
—
|
|
|
—
|
|
|
1,173
|
|
||||
Debt funds
|
2,372
|
|
|
3,429
|
|
|
—
|
|
|
5,801
|
|
||||
Total marketable securities
|
5,709
|
|
|
20,341
|
|
|
396
|
|
|
26,446
|
|
||||
Derivative instruments
|
—
|
|
|
59
|
|
|
—
|
|
|
59
|
|
||||
Other investments
|
225
|
|
|
—
|
|
|
—
|
|
|
225
|
|
||||
Total assets measured at fair value
|
$
|
7,656
|
|
|
$
|
22,199
|
|
|
$
|
396
|
|
|
$
|
30,251
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Derivative instruments
|
$
|
—
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
10
|
|
Other liabilities
|
225
|
|
|
—
|
|
|
—
|
|
|
225
|
|
||||
Total liabilities measured at fair value
|
$
|
225
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
235
|
|
|
Six Months Ended
March 31, 2013
|
|
Six Months Ended
March 25, 2012
|
||||||||||||||||
|
Auction Rate
Securities
|
|
Other Marketable
Securities
|
|
Auction Rate
Securities
|
|
Other Marketable
Securities
|
|
Other Liabilities
|
||||||||||
Beginning balance of Level 3
|
$
|
118
|
|
|
$
|
203
|
|
|
$
|
124
|
|
|
$
|
27
|
|
|
$
|
7
|
|
Total realized and unrealized gains or losses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Included in investment income, net
|
—
|
|
|
3
|
|
|
—
|
|
|
1
|
|
|
(2
|
)
|
|||||
Included in other comprehensive income
|
1
|
|
|
3
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|||||
Purchases
|
—
|
|
|
127
|
|
|
—
|
|
|
88
|
|
|
—
|
|
|||||
Sales
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Settlements
|
(35
|
)
|
|
(36
|
)
|
|
(4
|
)
|
|
(8
|
)
|
|
—
|
|
|||||
Transfers into Level 3
|
—
|
|
|
18
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|||||
Ending balance of Level 3
|
$
|
84
|
|
|
$
|
312
|
|
|
$
|
120
|
|
|
$
|
115
|
|
|
$
|
5
|
|
|
Current
|
|
Noncurrent
|
||||||||||||
|
March 31,
2013 |
|
September 30,
2012 |
|
March 31,
2013 |
|
September 30,
2012 |
||||||||
Trading:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities and government-related securities
|
$
|
224
|
|
|
$
|
196
|
|
|
$
|
155
|
|
|
$
|
254
|
|
Corporate bonds and notes
|
282
|
|
|
283
|
|
|
321
|
|
|
176
|
|
||||
Mortgage- and asset-backed securities
|
—
|
|
|
—
|
|
|
198
|
|
|
120
|
|
||||
Total trading
|
506
|
|
|
479
|
|
|
674
|
|
|
550
|
|
||||
Available-for-sale:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities and government-related securities
|
353
|
|
|
362
|
|
|
630
|
|
|
592
|
|
||||
Corporate bonds and notes
|
4,881
|
|
|
4,554
|
|
|
8,611
|
|
|
7,570
|
|
||||
Mortgage- and asset-backed securities
|
1,115
|
|
|
1,157
|
|
|
327
|
|
|
241
|
|
||||
Auction rate securities
|
—
|
|
|
—
|
|
|
84
|
|
|
118
|
|
||||
Common and preferred stock
|
23
|
|
|
57
|
|
|
2,268
|
|
|
2,030
|
|
||||
Equity funds
|
—
|
|
|
—
|
|
|
1,173
|
|
|
1,126
|
|
||||
Debt funds
|
2,522
|
|
|
1,958
|
|
|
2,740
|
|
|
1,716
|
|
||||
Total available-for-sale
|
8,894
|
|
|
8,088
|
|
|
15,833
|
|
|
13,393
|
|
||||
Fair value option:
|
|
|
|
|
|
|
|
||||||||
Debt fund
|
—
|
|
|
—
|
|
|
539
|
|
|
520
|
|
||||
Total marketable securities
|
$
|
9,400
|
|
|
$
|
8,567
|
|
|
$
|
17,046
|
|
|
$
|
14,463
|
|
|
Gross Realized Gains
|
|
Gross Realized Losses
|
|
Net Realized Gains
|
||||||
For the three months ended
|
|
|
|
|
|
||||||
March 31, 2013
|
$
|
69
|
|
|
$
|
(4
|
)
|
|
$
|
65
|
|
March 25, 2012
|
64
|
|
|
(4
|
)
|
|
60
|
|
|||
|
|
|
|
|
|
||||||
For the six months ended
|
|
|
|
|
|
||||||
March 31, 2013
|
$
|
153
|
|
|
$
|
(9
|
)
|
|
$
|
144
|
|
March 25, 2012
|
100
|
|
|
(6
|
)
|
|
94
|
|
|
Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Fair Value
|
||||||||
March 31, 2013
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
$
|
2,669
|
|
|
$
|
800
|
|
|
$
|
(5
|
)
|
|
$
|
3,464
|
|
Debt securities (including debt funds)
|
20,673
|
|
|
617
|
|
|
(27
|
)
|
|
21,263
|
|
||||
|
$
|
23,342
|
|
|
$
|
1,417
|
|
|
$
|
(32
|
)
|
|
$
|
24,727
|
|
September 30, 2012
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
$
|
2,599
|
|
|
$
|
628
|
|
|
$
|
(14
|
)
|
|
$
|
3,213
|
|
Debt securities (including debt funds)
|
17,714
|
|
|
573
|
|
|
(19
|
)
|
|
18,268
|
|
||||
|
$
|
20,313
|
|
|
$
|
1,201
|
|
|
$
|
(33
|
)
|
|
$
|
21,481
|
|
|
March 31, 2013
|
||||||||||||||
|
Less than 12 months
|
|
More than 12 months
|
||||||||||||
|
Fair Value
|
|
Unrealized Losses
|
|
Fair Value
|
|
Unrealized Losses
|
||||||||
Corporate bonds and notes
|
$
|
1,661
|
|
|
$
|
(8
|
)
|
|
$
|
83
|
|
|
$
|
(3
|
)
|
Mortgage- and asset-backed securities
|
220
|
|
|
(1
|
)
|
|
13
|
|
|
—
|
|
||||
Auction rate securities
|
—
|
|
|
—
|
|
|
83
|
|
|
(1
|
)
|
||||
Common and preferred stock
|
86
|
|
|
(5
|
)
|
|
10
|
|
|
—
|
|
||||
Debt funds
|
1,213
|
|
|
(14
|
)
|
|
4
|
|
|
—
|
|
||||
|
$
|
3,180
|
|
|
$
|
(28
|
)
|
|
$
|
193
|
|
|
$
|
(4
|
)
|
|
September 30, 2012
|
||||||||||||||
|
Less than 12 months
|
|
More than 12 months
|
||||||||||||
|
Fair Value
|
|
Unrealized Losses
|
|
Fair Value
|
|
Unrealized Losses
|
||||||||
Corporate bonds and notes
|
$
|
723
|
|
|
$
|
(8
|
)
|
|
$
|
256
|
|
|
$
|
(9
|
)
|
Mortgage- and asset-backed securities
|
143
|
|
|
(1
|
)
|
|
7
|
|
|
—
|
|
||||
Auction rate securities
|
—
|
|
|
—
|
|
|
115
|
|
|
(1
|
)
|
||||
Common and preferred stock
|
105
|
|
|
(5
|
)
|
|
9
|
|
|
—
|
|
||||
Equity funds
|
64
|
|
|
(4
|
)
|
|
36
|
|
|
(5
|
)
|
||||
|
$
|
1,035
|
|
|
$
|
(18
|
)
|
|
$
|
423
|
|
|
$
|
(15
|
)
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
March 31,
2013 |
|
March 25,
2012 |
|
March 31,
2013 |
|
March 25,
2012 |
||||||||
Beginning balance of credit losses
|
$
|
19
|
|
|
$
|
46
|
|
|
$
|
31
|
|
|
$
|
46
|
|
Reductions in credit losses related to securities the Company intends to sell
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
|
(1
|
)
|
||||
Credit losses recognized on securities previously not impaired
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Additional credit losses recognized on securities previously impaired
|
—
|
|
|
2
|
|
|
—
|
|
|
3
|
|
||||
Reductions in credit losses related to securities sold
|
(5
|
)
|
|
(4
|
)
|
|
(17
|
)
|
|
(4
|
)
|
||||
Ending balance of credit losses
|
$
|
8
|
|
|
$
|
46
|
|
|
$
|
8
|
|
|
$
|
46
|
|
•
|
We shipped approximately 173 million Mobile Station Modem (MSM) integrated circuits for CDMA- and OFDMA-based wireless devices, an increase of 14%, compared to 152 million MSM integrated circuits in the year ago quarter.
|
•
|
Total reported device sales were approximately $61.1 billion, an increase of approximately 18%, compared to approximately $51.7 billion in the year ago quarter.
(1)
|
•
|
Worldwide wireless connections grew by approximately 2% to reach approximately 6.6 billion.
(2)
|
•
|
Worldwide 3G connections (all CDMA-based) grew by approximately 4% to approximately 2.0 billion, which was approximately 30% of total wireless subscriptions, including approximately 537 million CDMA2000 1X/1xEV-DO subscriptions and approximately 1.5 billion WCDMA/HSPA/TD-SCDMA subscriptions.
(2)
|
(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). Not all licensees report sales the same way (e.g., some licensees report sales net of permitted deductions, such as transportation, insurance and packing costs, while other licensees report sales 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 for a particular period may include prior period activity that was not reported by the licensee until such particular period.
|
(2)
|
According to Wireless Intelligence estimates as of
April 22, 2013,
for the quarter ended March 31, 2013 (estimates exclude Wireless Local Loop).
|
•
|
The worldwide transition from 2G to 3G and 3G/4G networks is expected to continue, including the further expansion of 3G in emerging regions, such as China. We expect that the emergence of lower-end smartphone products will contribute to such expansion.
|
•
|
We expect consumer demand for advanced 3G and 3G/4G multimode devices, including smartphones and data-centric devices, to continue at a strong pace.
|
•
|
We expect that CDMA-based device prices will continue to vary broadly due to the increased penetration of smartphones combined with active competition throughout the world at all price tiers. Additionally, varying rates of economic growth by region and stronger growth of CDMA-based device shipments in emerging regions, as compared to developed regions, are expected to continue to impact the average and range of selling prices of CDMA-based devices.
|
•
|
We continue to invest significant resources toward the development of technologies and products for voice and data communications, primarily in the wireless industry, including advancements to 3G, 3G/4G and 4G LTE (an OFDMA-based standard) technologies, wireless baseband chips, our converged computing/communications
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||
|
March 31, 2013
|
|
March 25, 2012
|
|
Change
|
|
March 31, 2013
|
|
March 25, 2012
|
|
Change
|
||||||||||||
Research and development
|
$
|
1,214
|
|
|
$
|
954
|
|
|
$
|
260
|
|
|
$
|
2,320
|
|
|
$
|
1,827
|
|
|
$
|
493
|
|
% of revenues
|
20
|
%
|
|
19
|
%
|
|
|
|
19
|
%
|
|
19
|
%
|
|
|
||||||||
Selling, general, and administrative
|
$
|
661
|
|
|
$
|
595
|
|
|
$
|
66
|
|
|
$
|
1,248
|
|
|
$
|
1,098
|
|
|
$
|
150
|
|
% of revenues
|
11
|
%
|
|
12
|
%
|
|
|
|
10
|
%
|
|
11
|
%
|
|
|
||||||||
Other
|
$
|
—
|
|
|
$
|
97
|
|
|
$
|
(97
|
)
|
|
$
|
—
|
|
|
$
|
97
|
|
|
$
|
(97
|
)
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
March 31, 2013
|
|
March 25, 2012
|
|
March 31, 2013
|
|
March 25, 2012
|
||||
Expected income tax provision at federal statutory tax rate
|
35
|
%
|
|
35
|
%
|
|
35
|
%
|
|
35
|
%
|
Benefits from foreign income taxed at other than U.S. rates
|
(17
|
%)
|
|
(17
|
%)
|
|
(17
|
%)
|
|
(17
|
%)
|
Benefits related to the research and development tax credit
|
(6
|
%)
|
|
(1
|
%)
|
|
(3
|
%)
|
|
(1
|
%)
|
Other
|
1
|
%
|
|
—
|
%
|
|
1
|
%
|
|
1
|
%
|
Effective tax rate
|
13
|
%
|
|
17
|
%
|
|
16
|
%
|
|
18
|
%
|
|
QCT
|
|
QTL
|
|
QWI
|
|
QSI
|
||||||||
Three Months Ended March 31, 2013
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
3,916
|
|
|
$
|
2,057
|
|
|
$
|
155
|
|
|
$
|
—
|
|
EBT (1)
|
681
|
|
|
1,803
|
|
|
—
|
|
|
33
|
|
||||
EBT as a % of revenues
|
17
|
%
|
|
88
|
%
|
|
—
|
%
|
|
|
|||||
Three Months Ended March 25, 2012
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
3,059
|
|
|
$
|
1,723
|
|
|
$
|
159
|
|
|
$
|
—
|
|
EBT (1)
|
599
|
|
|
1,540
|
|
|
(10
|
)
|
|
(99
|
)
|
||||
EBT as a % of revenues
|
20
|
%
|
|
89
|
%
|
|
(6
|
%)
|
|
|
|||||
Six Months Ended March 31, 2013
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
8,036
|
|
|
$
|
3,813
|
|
|
$
|
301
|
|
|
$
|
—
|
|
EBT (1)
|
1,749
|
|
|
3,335
|
|
|
(4
|
)
|
|
16
|
|
||||
EBT as a % of revenues
|
22
|
%
|
|
87
|
%
|
|
(1
|
%)
|
|
|
|||||
Six Months Ended March 25, 2012
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
6,143
|
|
|
$
|
3,162
|
|
|
$
|
311
|
|
|
$
|
—
|
|
EBT (1)
|
1,338
|
|
|
2,808
|
|
|
(9
|
)
|
|
(133
|
)
|
||||
EBT as a % of revenues
|
22
|
%
|
|
89
|
%
|
|
(3
|
%)
|
|
|
(1)
|
Earnings (loss) before taxes.
|
•
|
Our research and development expenditures were
$2.3 billion
during the
first six months
of fiscal
2013
and $3.9 billion in fiscal
2012
, and we expect to continue to invest heavily in research and development for new technologies, applications and services for voice and data communications, primarily in the wireless industry.
|
•
|
Cash outflows for capital expenditures were
$494 million
during the
first six months
of fiscal
2013
and $1.3 billion in fiscal 2012, respectively, including approximately $480 million in fiscal 2012 related to the construction of a new manufacturing facility in Taiwan for our QMT division. We expect to continue to incur capital expenditures in the future to support our businesses, including research and development activities. Future capital expenditures may be impacted by transactions that are currently not forecasted.
|
•
|
Our purchase obligations for the remainder of fiscal
2013
and for fiscal 2014, some of which relate to research and development activities and capital expenditures, totaled
$3.4 billion
and
$447 million
, respectively, at
March 31, 2013
.
|
•
|
We expect to continue making strategic investments and acquisitions, the amounts of which could vary significantly, to open new opportunities for our technologies, obtain development resources, grow our patent portfolio or pursue new business.
|
•
|
At
March 31, 2013
, we had loan and debenture liabilities in the aggregate of
$1.1 billion
, which were classified as held for sale, related to the BWA spectrum won in India that are denominated in Indian rupees. At
March 31, 2013
, loans in the aggregate of
$455 million
are due and payable in full on
May 31, 2014
, one loan in the amount of
$76 million
is due and payable on
December 1, 2014
, and
$530 million
in debentures, including accrued interest, are due and payable in full on
June 25, 2017
. Each holder has the right to demand redemption of its portion of the debentures outstanding on
June 25, 2013
subject to sufficient prior written notice. The loans bear interest at rates that are reset quarterly (
9.75%
at
March 31, 2013
); interest payments are due monthly. The debentures bear interest at an agreed-upon annual rate, which is compounded annually and reset semi-annually beginning on June 25, 2013 (
10.25%
at
March 31, 2013
) with interest due upon redemption.
|
•
|
wireless operators delay 3G and/or 3G/4G multimode deployments, expansions or upgrades and/or delay moving 2G customers to 3G, 3G/4G multimode or 4G wireless devices;
|
•
|
LTE, an OFDMA-based 4G wireless standard, is not more widely deployed or commercial deployment is delayed;
|
•
|
government regulators delay the reallocation of 2G spectrum to allow wireless operators to upgrade to 3G, thereby restricting the expansion of 3G wireless connectivity, primarily outside of major population areas;
|
•
|
wireless operators are unable to drive improvements in 3G network performance and/or capacity; or
|
•
|
wireless operators and other industries using these technologies deploy other technologies.
|
•
|
increase and/or accelerate demand for our integrated circuit products and drive their adoption into the most popular device models and across a broad spectrum of devices, such as smartphones, tablets and other mobile computing devices, and into a new generation of products for consumer electronics and connectivity, including gaming, wireless charging, eHealth and the connected home;
|
•
|
strengthen our integrated circuit product roadmap for, and develop channel relationships in, emerging geographic regions requiring turnkey product offerings for low-end smartphones;
|
•
|
be a preferred partner (and sustain preferred relationships) providing products that support Android, Windows Phone/RT and other operating system platforms to the partners that effectively commercialize new devices using these platforms;
|
•
|
continue to be a leader in 4G technology evolution, including expansion of our OFDMA-based single mode licensing program, and continue our timely introduction of 4G turnkey, integrated products and services;
|
•
|
be a leader serving original equipment manufacturers, high level operating systems (HLOS) providers, operators and other industry participants as new market entrants and other factors affect the industry landscape;
|
•
|
become a leading supplier of small cell technology (which allows inexpensive cell sites deployed by users to connect to traditional cellular networks through wired internet connections) to enable significant network capacity expansion to meet anticipated growth in mobile data traffic;
|
•
|
develop brand recognition as we compete against better known companies in mobile computing and other consumer driven arenas;
|
•
|
focus our service businesses on key opportunities, such as wireless charging, eHealth and machine-to-machine technologies (allowing both wireless and wired systems to communicate with other devices) that create standalone value and/or contribute to the success of our other businesses; and
|
•
|
succeed in significant foreign regions, such as China, India and Europe.
|
•
|
volatility of the stock market in general and technology-based companies in particular that is often unrelated to the operating performance of any specific public company;
|
•
|
announcements concerning us, our competitors or our customers, including the selection of wireless communications technology by wireless operators and the timing of the roll-out of those systems, the use of our or our competitors’ semiconductor components in wireless devices by certain manufacturers or the business performance of our customers;
|
•
|
international developments, such as technology mandates, political developments or changes in economic policies;
|
•
|
changes in recommendations of securities analysts;
|
•
|
earnings (or forecasts) that fail to meet financial guidance that we provided to investors or the expectations of investment analysts or investors;
|
•
|
proprietary rights, product or patent litigation taken or threatened against us or against our customers or licensees;
|
•
|
strategic transactions, such as spin-offs, acquisitions and divestitures;
|
•
|
unexpected and/or significant changes in the average selling price of our licensees’ products and our products;
|
•
|
unresolved disputes with licensees that result in non-payment and/or non-recognition of royalty revenues that may be owed to us;
|
•
|
declines in the value or performance of our significant marketable securities portfolio, which is subject to financial market volatility and liquidity, interest rate, credit and other risks; or
|
•
|
inquiries, rumors or allegations regarding our financial disclosures, practices or compliance programs.
|
•
|
Our products and those of our customers and licensees that are sold outside the United States may become less price-competitive;
|
•
|
Certain of our revenues, such as royalties, that are derived from licensee or customer sales that are denominated in foreign currencies could decrease;
|
•
|
Foreign exchange hedging transactions that we engage in to reduce the impact of currency fluctuations may require the payment of structuring fees, limit the U.S. dollar value of royalties from licensees’ sales that are denominated in foreign currencies, cause earnings volatility if the hedges do not qualify for hedge accounting and expose us to counterparty risk if the counterparty fails to perform;
|
•
|
We may need additional cash to settle our loan and debenture obligations, and the related interest, that are denominated in Indian rupees;
|
•
|
The U.S. dollar value of our marketable securities that are denominated directly or indirectly in foreign currencies may decline; and
|
•
|
Labor and the cost of goods in currencies other than the U.S. dollar may increase, resulting in higher than expected costs.
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
Interest Rate Sensitivity
Amount by Expected Maturity
Average Interest Rates
(Dollars in millions)
|
|||||||||||||||||||||||||||||||
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
Thereafter
|
|
No Single
Maturity
|
|
Total
|
||||||||||||||||
Fixed interest-bearing securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash and cash equivalents
|
$
|
1,333
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,333
|
|
Interest rate
|
0.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Trading securities
|
$
|
64
|
|
|
$
|
363
|
|
|
$
|
231
|
|
|
$
|
62
|
|
|
$
|
56
|
|
|
$
|
182
|
|
|
$
|
595
|
|
|
$
|
1,553
|
|
Interest rate
|
0.9
|
%
|
|
2.8
|
%
|
|
3.5
|
%
|
|
3.8
|
%
|
|
4.8
|
%
|
|
4.5
|
%
|
|
2.8
|
%
|
|
|
|||||||||
Other marketable securities
|
$
|
987
|
|
|
$
|
1,230
|
|
|
$
|
2,035
|
|
|
$
|
1,425
|
|
|
$
|
1,042
|
|
|
$
|
3,200
|
|
|
$
|
4,597
|
|
|
$
|
14,516
|
|
Interest rate
|
0.8
|
%
|
|
2.0
|
%
|
|
1.6
|
%
|
|
2.4
|
%
|
|
2.8
|
%
|
|
5.1
|
%
|
|
1.9
|
%
|
|
|
|||||||||
Interest rate swaps (receive)
|
$
|
—
|
|
|
$
|
28
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
68
|
|
|
$
|
37
|
|
|
$
|
—
|
|
|
$
|
133
|
|
Interest rate
|
|
|
3.0
|
%
|
|
|
|
|
|
8.9
|
%
|
|
4.3
|
%
|
|
|
|
|
|||||||||||||
Interest rate swaps (pay)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
17
|
|
|
$
|
16
|
|
|
$
|
—
|
|
|
$
|
37
|
|
Interest rate
|
|
|
|
|
|
|
1.0
|
%
|
|
3.4
|
%
|
|
4.4
|
%
|
|
|
|
|
|||||||||||||
Interest rate swaptions (call)
|
$
|
371
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
371
|
|
Interest rate
|
3.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest rate swaptions (put)
|
$
|
51
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
51
|
|
Interest rate
|
3.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Floating interest-bearing securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash and cash equivalents
|
$
|
2,188
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,188
|
|
Interest rate
|
0.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Trading securities
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
3
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
142
|
|
|
$
|
166
|
|
Interest rate
|
|
|
1.3
|
%
|
|
0.8
|
%
|
|
1.0
|
%
|
|
|
|
3.7
|
%
|
|
2.4
|
%
|
|
|
|||||||||||
Other marketable securities
|
$
|
181
|
|
|
$
|
1,058
|
|
|
$
|
322
|
|
|
$
|
600
|
|
|
$
|
394
|
|
|
$
|
2,002
|
|
|
$
|
2,190
|
|
|
$
|
6,747
|
|
Interest rate
|
1.2
|
%
|
|
1.2
|
%
|
|
1.8
|
%
|
|
1.5
|
%
|
|
4.9
|
%
|
|
6.3
|
%
|
|
3.6
|
%
|
|
|
|||||||||
Interest rate swaps (receive)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
17
|
|
|
$
|
16
|
|
|
$
|
—
|
|
|
$
|
37
|
|
Interest rate
|
|
|
|
|
|
|
1.0
|
%
|
|
1.0
|
%
|
|
3.9
|
%
|
|
|
|
|
|||||||||||||
Interest rate swaps (pay)
|
$
|
—
|
|
|
$
|
28
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
68
|
|
|
$
|
37
|
|
|
$
|
—
|
|
|
$
|
133
|
|
Interest rate
|
|
|
1.0
|
%
|
|
|
|
|
|
1.0
|
%
|
|
2.0
|
%
|
|
|
|
|
|||||||||||||
Loans and debentures (1)
|
$
|
530
|
|
|
$
|
455
|
|
|
$
|
76
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,061
|
|
Interest rate
|
10.3
|
%
|
|
9.8
|
%
|
|
9.8
|
%
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Denominated in Indian rupees.
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
ITEM 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
OTHER INFORMATION
|
ITEM 6.
|
EXHIBITS
|
Exhibit
Number
|
|
Description
|
3.1
|
|
Restated Certificate of Incorporation, as amended. (1)
|
3.2
|
|
Certificate of Amendment of Certificate of Designation of Series A Junior Participating Preferred Stock. (2)
|
3.4
|
|
Amended and Restated Bylaws. (3)
|
4.1
|
|
Amended and Restated Rights Agreement dated as of September 26, 2005 between the Company and Computershare Trust Company, N.A., as successor Rights Agent to Computershare Investor Services LLC. (2)
|
4.2
|
|
Amendment dated as of December 7, 2006 to the Amended and Restated Rights Agreement dated as of September 26, 2005 between the Company and Computershare Trust Company, N.A., as successor Rights Agent to Computershare Investor Services LLC. (4)
|
10.112
|
|
2006 Long-Term Incentive Plan, as amended and restated. (5)
|
10.113
|
|
Amended and Restated QUALCOMM Incorporated 2001 Employee Stock Purchase Plan. (5)
|
31.1
|
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Paul E. Jacobs.
|
31.2
|
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for George S. Davis.
|
32.1
|
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, for Paul E. Jacobs.
|
32.2
|
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, for George S. Davis.
|
101.INS
|
|
XBRL Instance Document. (6)
|
101.SCH
|
|
XBRL Taxonomy Extension Schema. (6)
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase. (6)
|
101.LAB
|
|
XBRL Taxonomy Extension Labels Linkbase. (6)
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase. (6)
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase. (6)
|
(1)
|
Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 25, 2012.
|
(2)
|
Filed as an exhibit to the Registrant’s Current Report on Form 8-K filed on September 30, 2005.
|
(3)
|
Filed as an exhibit to the Registrant’s Current Report on Form 8-K filed on July 11, 2012.
|
(4)
|
Filed as an exhibit to the Registrant’s Current Report on Form 8-K filed on December 12, 2006.
|
(5)
|
Indicates management or compensatory plan or arrangement.
|
(6)
|
Furnished, not filed.
|
|
QUALCOMM Incorporated
|
|
/s/ George S. Davis
|
|
George S. Davis
|
|
Executive Vice President and
|
|
Chief Financial Officer
|
|
|
Page
|
|
|
|
|
|
|
|
1.
|
Establishment, Purpose and Term of Plan
|
1
|
|
|
|
1.1
|
Establishment
|
1
|
|
|
1.2
|
Purpose
|
1
|
|
|
1.3
|
Term of Plan
|
1
|
|
2.
|
Definitions and Construction
|
1
|
|
|
|
2.1
|
Definitions
|
1
|
|
|
2.2
|
Construction
|
8
|
|
3.
|
Administration
|
8
|
|
|
|
3.1
|
Administration by the Committee
|
8
|
|
|
3.2
|
Authority of Officers
|
8
|
|
|
3.3
|
Administration with Respect to Insiders
|
8
|
|
|
3.4
|
Committee Complying with Section 162(m)
|
9
|
|
|
3.5
|
Powers of the Committee
|
9
|
|
|
3.6
|
Indemnification
|
10
|
|
|
3.7
|
Arbitration
|
10
|
|
|
3.8
|
Repricing Prohibited
|
11
|
|
4.
|
Shares Subject to Plan
|
11
|
|
|
|
4.1
|
Maximum Number of Shares Issuable
|
11
|
|
|
4.2
|
Adjustments for Changes in Capital Structure
|
12
|
|
5.
|
Eligibility and Award Limitations
|
12
|
|
|
|
5.1
|
Persons Eligible for Awards
|
12
|
|
|
5.2
|
Participation
|
12
|
|
|
5.3
|
Incentive Stock Option Limitations
|
13
|
|
|
5.4
|
Award Limits
|
13
|
|
6.
|
Terms and Conditions of Options
|
14
|
|
|
|
6.1
|
Exercise Price
|
14
|
|
|
6.2
|
Exercisability and Term of Options
|
15
|
|
|
6.3
|
Payment of Exercise Price
|
15
|
|
|
6.4
|
Effect of Termination of Service
|
16
|
|
|
6.5
|
Transferability of Options
|
16
|
|
7.
|
Terms and Conditions of Stock Appreciation Rights
|
17
|
|
|
|
Page
|
|
|
|
|
|
|
|
|
7.1
|
Types of SARs Authorized
|
17
|
|
|
7.2
|
Exercise Price
|
17
|
|
|
7.3
|
Exercisability and Term of SARs
|
17
|
|
|
7.4
|
Deemed Exercise of SARs
|
17
|
|
|
7.5
|
Effect of Termination of Service
|
18
|
|
|
7.6
|
Nontransferability of SARs
|
18
|
|
8.
|
Terms and Conditions of Restricted Stock Awards
|
18
|
|
|
|
8.1
|
Types of Restricted Stock Awards Authorized
|
18
|
|
|
8.2
|
Purchase Price
|
18
|
|
|
8.3
|
Purchase Period
|
18
|
|
|
8.4
|
Vesting and Restrictions on Transfer
|
18
|
|
|
8.5
|
Voting Rights; Dividends and Distributions
|
19
|
|
|
8.6
|
Effect of Termination of Service
|
19
|
|
|
8.7
|
Nontransferability of Restricted Stock Award Rights
|
19
|
|
9.
|
Terms and Conditions of Performance Awards
|
19
|
|
|
|
9.1
|
Types of Performance Awards Authorized
|
20
|
|
|
9.2
|
Initial Value of Performance Shares and Performance Units
|
20
|
|
|
9.3
|
Establishment of Performance Period, Performance Goals and Performance Award Formula
|
20
|
|
|
9.4
|
Measurement of Performance Goals
|
20
|
|
|
9.5
|
Settlement of Performance Awards
|
21
|
|
|
9.6
|
Voting Rights; Dividend Equivalent Rights and Distributions
|
21
|
|
|
9.7
|
Effect of Termination of Service
|
22
|
|
|
9.8
|
Nontransferability of Performance Awards
|
22
|
|
10.
|
Terms and Conditions of Restricted Stock Unit Awards
|
23
|
|
|
|
10.1
|
Grant of Restricted Stock Unit Awards
|
23
|
|
|
10.2
|
Vesting
|
23
|
|
|
10.3
|
Voting Rights, Dividend Equivalent Rights and Distributions
|
23
|
|
|
10.4
|
Effect of Termination of Service
|
24
|
|
|
10.5
|
Settlement of Restricted Stock Unit Awards
|
24
|
|
|
10.6
|
Nontransferability of Restricted Stock Unit Awards
|
24
|
|
|
|
Page
|
|
|
|
|
|
|
|
11.
|
Deferred Compensation Awards
|
24
|
|
|
|
11.1
|
Establishment of Deferred Compensation Award Programs
|
24
|
|
|
11.2
|
Terms and Conditions of Deferred Compensation Awards
|
25
|
|
12.
|
Other Stock-Based Awards
|
26
|
|
|
13.
|
Effect of Change in Control on Options and SARs
|
26
|
|
|
|
13.1
|
Accelerated Vesting
|
26
|
|
|
13.2
|
Assumption or Substitution
|
27
|
|
|
13.3
|
Effect of Change in Control on Awards Other Than Options and SARs
|
27
|
|
14.
|
Compliance with Securities Law
|
27
|
|
|
15.
|
Tax Withholding
|
28
|
|
|
|
15.1
|
Tax Withholding in General
|
28
|
|
|
15.2
|
Withholding in Shares
|
28
|
|
16.
|
Amendment or Termination of Plan
|
28
|
|
|
17.
|
Miscellaneous Provisions
|
28
|
|
|
|
17.1
|
Repurchase Rights
|
28
|
|
|
17.2
|
Provision of Information
|
29
|
|
|
17.3
|
Rights as Employee, Consultant or Director
|
29
|
|
|
17.4
|
Rights as a Stockholder
|
29
|
|
|
17.5
|
Fractional Shares
|
29
|
|
|
17.6
|
Severability
|
29
|
|
|
17.7
|
Beneficiary Designation
|
29
|
|
|
17.8
|
Unfunded Obligation
|
30
|
|
French Addendum
|
31
|
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of QUALCOMM Incorporated;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Paul E. Jacobs
|
|
Paul E. Jacobs
|
|
Chief Executive Officer and Chairman
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of QUALCOMM Incorporated;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ George S. Davis
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George S. Davis
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Executive Vice President and Chief Financial Officer
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(1)
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The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
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(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Paul E. Jacobs
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|
Paul E. Jacobs
|
|
Chief Executive Officer and Chairman
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(1)
|
The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
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(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ George S. Davis
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|
George S. Davis
|
|
Executive Vice President and Chief Financial Officer
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