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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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1,571,202,188
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Page
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June 28,
2015 |
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September 28,
2014 |
||||
ASSETS
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|||||||
Current assets:
|
|
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||||
Cash and cash equivalents
|
$
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9,987
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|
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$
|
7,907
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Marketable securities
|
11,344
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9,658
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|
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Accounts receivable, net
|
1,961
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2,412
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|
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Inventories
|
1,583
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1,458
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|
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Deferred tax assets
|
472
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577
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|
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Other current assets
|
581
|
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401
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|
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Total current assets
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25,928
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|
22,413
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|
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Marketable securities
|
13,894
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14,457
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Deferred tax assets
|
1,275
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1,174
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Property, plant and equipment, net
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2,574
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|
2,487
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Goodwill
|
4,259
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4,488
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Other intangible assets, net
|
2,405
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|
2,580
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Other assets
|
1,960
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|
975
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|
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Total assets
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$
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52,295
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$
|
48,574
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||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|||||||
Current liabilities:
|
|
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|
||||
Trade accounts payable
|
$
|
1,412
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|
|
$
|
2,183
|
|
Payroll and other benefits related liabilities
|
697
|
|
|
802
|
|
||
Unearned revenues
|
680
|
|
|
785
|
|
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Short-term debt
|
1,000
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|
|
—
|
|
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Other current liabilities
|
2,294
|
|
|
2,243
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|
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Total current liabilities
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6,083
|
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|
6,013
|
|
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Unearned revenues
|
2,576
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|
2,967
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|
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Long-term debt
|
9,913
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—
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Other liabilities
|
527
|
|
|
428
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|
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Total liabilities
|
19,099
|
|
|
9,408
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|
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|
||||
Commitments and contingencies (Note 6)
|
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||||
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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 and paid-in capital, $0.0001 par value; 6,000 shares authorized; 1,578 and 1,669 shares issued and outstanding, respectively
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—
|
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7,736
|
|
||
Retained earnings
|
32,699
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30,799
|
|
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Accumulated other comprehensive income
|
503
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|
634
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Total Qualcomm stockholders’ equity
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33,202
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39,169
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Noncontrolling interests
|
(6
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)
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(3
|
)
|
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Total stockholders’ equity
|
33,196
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|
|
39,166
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Total liabilities and stockholders’ equity
|
$
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52,295
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$
|
48,574
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Three Months Ended
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Nine Months Ended
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||||||||||||
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June 28,
2015 |
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June 29,
2014 |
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June 28,
2015 |
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June 29,
2014 |
||||||||
Revenues:
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||||||||
Equipment and services
|
$
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3,840
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$
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4,922
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$
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13,459
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$
|
13,803
|
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Licensing
|
1,992
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1,884
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|
6,366
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5,992
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|
||||
Total revenues
|
5,832
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|
|
6,806
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|
19,825
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|
|
19,795
|
|
||||
Costs and expenses:
|
|
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|
|
|
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|
||||||||
Cost of equipment and services revenues
|
2,451
|
|
|
2,740
|
|
|
8,126
|
|
|
7,929
|
|
||||
Research and development
|
1,407
|
|
|
1,429
|
|
|
4,133
|
|
|
4,113
|
|
||||
Selling, general and administrative
|
577
|
|
|
582
|
|
|
1,689
|
|
|
1,745
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|
||||
Other
|
162
|
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(20
|
)
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|
1,241
|
|
|
450
|
|
||||
Total costs and expenses
|
4,597
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|
|
4,731
|
|
|
15,189
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|
14,237
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|
||||
Operating income
|
1,235
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|
|
2,075
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|
|
4,636
|
|
|
5,558
|
|
||||
Investment income, net (Note 2)
|
163
|
|
|
422
|
|
|
600
|
|
|
968
|
|
||||
Income from continuing operations before income taxes
|
1,398
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|
|
2,497
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5,236
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|
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6,526
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|
||||
Income tax expense
|
(215
|
)
|
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(260
|
)
|
|
(1,029
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)
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(886
|
)
|
||||
Income from continuing operations
|
1,183
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|
|
2,237
|
|
|
4,207
|
|
|
5,640
|
|
||||
Discontinued operations, net of income taxes (Note 9)
|
—
|
|
|
—
|
|
|
—
|
|
|
430
|
|
||||
Net income
|
1,183
|
|
|
2,237
|
|
|
4,207
|
|
|
6,070
|
|
||||
Net loss attributable to noncontrolling interests
|
1
|
|
|
1
|
|
|
2
|
|
|
3
|
|
||||
Net income attributable to Qualcomm
|
$
|
1,184
|
|
|
$
|
2,238
|
|
|
$
|
4,209
|
|
|
$
|
6,073
|
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share attributable to Qualcomm:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.74
|
|
|
$
|
1.33
|
|
|
$
|
2.57
|
|
|
$
|
3.35
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
0.25
|
|
||||
Net income
|
$
|
0.74
|
|
|
$
|
1.33
|
|
|
$
|
2.57
|
|
|
$
|
3.60
|
|
Diluted earnings per share attributable to Qualcomm:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.73
|
|
|
$
|
1.31
|
|
|
$
|
2.53
|
|
|
$
|
3.28
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
0.25
|
|
||||
Net income
|
$
|
0.73
|
|
|
$
|
1.31
|
|
|
$
|
2.53
|
|
|
$
|
3.53
|
|
Shares used in per share calculations:
|
|
|
|
|
|
|
|
||||||||
Basic
|
1,608
|
|
|
1,683
|
|
|
1,638
|
|
|
1,686
|
|
||||
Diluted
|
1,629
|
|
|
1,714
|
|
|
1,661
|
|
|
1,718
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Dividends per share announced
|
$
|
0.48
|
|
|
$
|
0.42
|
|
|
$
|
1.32
|
|
|
$
|
1.12
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 28,
2015 |
|
June 29,
2014 |
|
June 28,
2015 |
|
June 29,
2014 |
||||||||
Net income
|
$
|
1,183
|
|
|
$
|
2,237
|
|
|
$
|
4,207
|
|
|
$
|
6,070
|
|
Other comprehensive income (loss), net of income taxes:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation gains (losses)
|
7
|
|
|
8
|
|
|
(25
|
)
|
|
14
|
|
||||
Reclassification of foreign currency translation losses included in net income
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Noncredit other-than-temporary impairment losses and subsequent changes in fair value related to certain available-for-sale debt securities
|
(9
|
)
|
|
1
|
|
|
(19
|
)
|
|
1
|
|
||||
Reclassification of other-than-temporary losses on available-for-sale securities included in net income
|
31
|
|
|
5
|
|
|
92
|
|
|
96
|
|
||||
Net unrealized gains on other available-for-sale marketable securities
|
20
|
|
|
176
|
|
|
14
|
|
|
356
|
|
||||
Reclassification of net realized gains on available-for-sale securities included in net income
|
(76
|
)
|
|
(168
|
)
|
|
(251
|
)
|
|
(384
|
)
|
||||
Net unrealized gains on derivative instruments
|
58
|
|
|
—
|
|
|
58
|
|
|
8
|
|
||||
Reclassification of net realized gains on derivative instruments included in net income
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
(20
|
)
|
||||
Total other comprehensive income (loss)
|
31
|
|
|
15
|
|
|
(131
|
)
|
|
72
|
|
||||
Total comprehensive income
|
1,214
|
|
|
2,252
|
|
|
4,076
|
|
|
6,142
|
|
||||
Comprehensive loss attributable to noncontrolling interests
|
1
|
|
|
1
|
|
|
2
|
|
|
3
|
|
||||
Comprehensive income attributable to Qualcomm
|
$
|
1,215
|
|
|
$
|
2,253
|
|
|
$
|
4,078
|
|
|
$
|
6,145
|
|
|
Nine Months Ended
|
||||||
|
June 28,
2015 |
|
June 29,
2014 |
||||
Operating Activities:
|
|
|
|
|
|||
Net income
|
$
|
4,207
|
|
|
$
|
6,070
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization expense
|
888
|
|
|
853
|
|
||
Gain on sale of discontinued operations
|
—
|
|
|
(665
|
)
|
||
Long-lived asset and goodwill impairment charges
|
304
|
|
|
642
|
|
||
Income tax provision in excess of income tax payments
|
159
|
|
|
244
|
|
||
Non-cash portion of share-based compensation expense
|
793
|
|
|
806
|
|
||
Incremental tax benefits from share-based compensation
|
(98
|
)
|
|
(239
|
)
|
||
Net realized gains on marketable securities and other investments
|
(399
|
)
|
|
(685
|
)
|
||
Impairment losses on marketable securities and other investments
|
161
|
|
|
170
|
|
||
Other items, net
|
(29
|
)
|
|
(5
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Accounts receivable, net
|
438
|
|
|
43
|
|
||
Inventories
|
(122
|
)
|
|
116
|
|
||
Other assets
|
(897
|
)
|
|
136
|
|
||
Trade accounts payable
|
(769
|
)
|
|
321
|
|
||
Payroll, benefits and other liabilities
|
(406
|
)
|
|
(337
|
)
|
||
Unearned revenues
|
(408
|
)
|
|
(202
|
)
|
||
Net cash provided by operating activities
|
3,822
|
|
|
7,268
|
|
||
Investing Activities:
|
|
|
|
||||
Capital expenditures
|
(815
|
)
|
|
(955
|
)
|
||
Purchases of available-for-sale securities
|
(13,118
|
)
|
|
(10,315
|
)
|
||
Proceeds from sales and maturities of available-for-sale securities
|
11,897
|
|
|
9,744
|
|
||
Purchases of trading securities
|
(1,034
|
)
|
|
(2,868
|
)
|
||
Proceeds from sales and maturities of trading securities
|
1,008
|
|
|
2,619
|
|
||
Purchases of other marketable securities
|
—
|
|
|
(220
|
)
|
||
Proceeds from sale of discontinued operations, net of cash sold
|
—
|
|
|
788
|
|
||
Proceeds from sales of property, plant and equipment
|
161
|
|
|
37
|
|
||
Acquisitions and other investments, net of cash acquired
|
(308
|
)
|
|
(447
|
)
|
||
Other items, net
|
(11
|
)
|
|
65
|
|
||
Net cash used by investing activities
|
(2,220
|
)
|
|
(1,552
|
)
|
||
Financing Activities:
|
|
|
|
||||
Proceeds from short-term debt
|
2,813
|
|
|
—
|
|
||
Proceeds from long-term debt
|
9,937
|
|
|
—
|
|
||
Repayment of short-term debt
|
(1,814
|
)
|
|
—
|
|
||
Proceeds from issuance of common stock
|
571
|
|
|
1,147
|
|
||
Repurchases and retirements of common stock
|
(9,016
|
)
|
|
(3,354
|
)
|
||
Dividends paid
|
(2,142
|
)
|
|
(1,884
|
)
|
||
Incremental tax benefits from share-based compensation
|
98
|
|
|
239
|
|
||
Other items, net
|
41
|
|
|
(65
|
)
|
||
Net cash provided (used) by financing activities
|
488
|
|
|
(3,917
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(10
|
)
|
|
3
|
|
||
Net increase in cash and cash equivalents
|
2,080
|
|
|
1,802
|
|
||
Cash and cash equivalents at beginning of period
|
7,907
|
|
|
6,142
|
|
||
Cash and cash equivalents at end of period
|
$
|
9,987
|
|
|
$
|
7,944
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 28,
2015 |
|
June 29,
2014 |
|
June 28,
2015 |
|
June 29,
2014 |
||||||||
Cost of equipment and services revenues
|
$
|
10
|
|
|
$
|
12
|
|
|
$
|
33
|
|
|
$
|
37
|
|
Research and development
|
176
|
|
|
174
|
|
|
508
|
|
|
510
|
|
||||
Selling, general and administrative
|
85
|
|
|
88
|
|
|
252
|
|
|
259
|
|
||||
Share-based compensation expense before income taxes
|
271
|
|
|
274
|
|
|
793
|
|
|
806
|
|
||||
Related income tax benefit
|
(58
|
)
|
|
(42
|
)
|
|
(145
|
)
|
|
(151
|
)
|
||||
|
$
|
213
|
|
|
$
|
232
|
|
|
$
|
648
|
|
|
$
|
655
|
|
Inventories (in millions)
|
|
|
|
||||
|
June 28,
2015 |
|
September 28,
2014 |
||||
Raw materials
|
$
|
1
|
|
|
$
|
1
|
|
Work-in-process
|
755
|
|
|
656
|
|
||
Finished goods
|
827
|
|
|
801
|
|
||
|
$
|
1,583
|
|
|
$
|
1,458
|
|
Other Current Liabilities (in millions)
|
|
|
|
||||
|
June 28,
2015 |
|
September 28,
2014 |
||||
Customer incentives and other customer-related liabilities
|
$
|
1,843
|
|
|
$
|
1,777
|
|
Other
|
451
|
|
|
466
|
|
||
|
$
|
2,294
|
|
|
$
|
2,243
|
|
Investment Income, Net (in millions)
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 28,
2015 |
|
June 29,
2014 |
|
June 28,
2015 |
|
June 29,
2014 |
||||||||
Interest and dividend income
|
$
|
128
|
|
|
$
|
139
|
|
|
$
|
400
|
|
|
$
|
460
|
|
Interest expense
|
(32
|
)
|
|
—
|
|
|
(34
|
)
|
|
(4
|
)
|
||||
Net realized gains on marketable securities
|
117
|
|
|
290
|
|
|
381
|
|
|
660
|
|
||||
Net realized gains on other investments
|
5
|
|
|
8
|
|
|
18
|
|
|
25
|
|
||||
Impairment losses on marketable securities
|
(42
|
)
|
|
(8
|
)
|
|
(131
|
)
|
|
(149
|
)
|
||||
Impairment losses on other investments
|
(13
|
)
|
|
(3
|
)
|
|
(30
|
)
|
|
(21
|
)
|
||||
Net gains (losses) on derivative instruments
|
10
|
|
|
(6
|
)
|
|
16
|
|
|
(1
|
)
|
||||
Equity in net losses of investees
|
(10
|
)
|
|
(2
|
)
|
|
(23
|
)
|
|
(7
|
)
|
||||
Net gains on deconsolidation of subsidiaries
|
—
|
|
|
4
|
|
|
3
|
|
|
5
|
|
||||
|
$
|
163
|
|
|
$
|
422
|
|
|
$
|
600
|
|
|
$
|
968
|
|
|
Qualcomm Stockholders’ Equity
|
|
Noncontrolling Interests
|
|
Total Stockholders’ Equity
|
||||||
Balance at September 28, 2014
|
$
|
39,169
|
|
|
$
|
(3
|
)
|
|
$
|
39,166
|
|
Net income (loss)
|
4,209
|
|
|
(2
|
)
|
|
4,207
|
|
|||
Other comprehensive loss
|
(131
|
)
|
|
—
|
|
|
(131
|
)
|
|||
Common stock issued under employee benefit plans and related tax benefits
|
657
|
|
|
—
|
|
|
657
|
|
|||
Share-based compensation
|
834
|
|
|
—
|
|
|
834
|
|
|||
Tax withholdings related to vesting of share-based payments
|
(336
|
)
|
|
—
|
|
|
(336
|
)
|
|||
Dividends
|
(2,183
|
)
|
|
—
|
|
|
(2,183
|
)
|
|||
Stock repurchases
|
(9,016
|
)
|
|
—
|
|
|
(9,016
|
)
|
|||
Other
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|||
Balance at June 28, 2015
|
$
|
33,202
|
|
|
$
|
(6
|
)
|
|
$
|
33,196
|
|
|
Foreign Currency Translation Adjustment
|
|
Noncredit Other-than-Temporary Impairment Losses and Subsequent Changes in Fair Value for Certain Available-for-Sale Debt Securities
|
|
Net Unrealized Gain (Loss) on Other Available-for-Sale Securities
|
|
Net Unrealized Gain (Loss) on Derivative Instruments
|
|
Total Accumulated Other Comprehensive Income
|
||||||||||
Balance at September 28, 2014
|
$
|
(113
|
)
|
|
$
|
24
|
|
|
$
|
723
|
|
|
$
|
—
|
|
|
$
|
634
|
|
Other comprehensive (loss) income before reclassifications
|
(25
|
)
|
|
(12
|
)
|
|
14
|
|
|
58
|
|
|
35
|
|
|||||
Reclassifications from accumulated other comprehensive income
|
—
|
|
|
6
|
|
|
(172
|
)
|
|
—
|
|
|
(166
|
)
|
|||||
Other comprehensive (loss) income
|
(25
|
)
|
|
(6
|
)
|
|
(158
|
)
|
|
58
|
|
|
(131
|
)
|
|||||
Balance at June 28, 2015
|
$
|
(138
|
)
|
|
$
|
18
|
|
|
$
|
565
|
|
|
$
|
58
|
|
|
$
|
503
|
|
|
2015
|
|
2014
|
||||||||||||
|
Per Share
|
|
Total
|
|
Per Share
|
|
Total
|
||||||||
First quarter
|
$
|
0.42
|
|
|
$
|
710
|
|
|
$
|
0.35
|
|
|
$
|
599
|
|
Second quarter
|
0.42
|
|
|
702
|
|
|
0.35
|
|
|
599
|
|
||||
Third quarter
|
0.48
|
|
|
771
|
|
|
0.42
|
|
|
718
|
|
||||
|
$
|
1.32
|
|
|
$
|
2,183
|
|
|
$
|
1.12
|
|
|
$
|
1,916
|
|
|
|
Principal
Amount
|
|
Effective
Interest Rate
|
||
Floating-rate notes due May 18, 2018
|
|
$
|
250
|
|
|
0.61%
|
Floating-rate notes due May 20, 2020
|
|
250
|
|
|
0.88%
|
|
Fixed-rate 1.40% notes due May 18, 2018
|
|
1,250
|
|
|
0.68%
|
|
Fixed-rate 2.25% notes due May 20, 2020
|
|
1,750
|
|
|
1.78%
|
|
Fixed-rate 3.00% notes due May 20, 2022
|
|
2,000
|
|
|
2.28%
|
|
Fixed-rate 3.45% notes due May 20, 2025
|
|
2,000
|
|
|
3.46%
|
|
Fixed-rate 4.65% notes due May 20, 2035
|
|
1,000
|
|
|
4.74%
|
|
Fixed-rate 4.80% notes due May 20, 2045
|
|
1,500
|
|
|
4.71%
|
|
Total principal
|
|
10,000
|
|
|
|
|
Unamortized discount, including debt issuance costs
|
|
(65
|
)
|
|
|
|
Hedge accounting fair value adjustments
|
|
(22
|
)
|
|
|
|
Total long-term debt
|
|
$
|
9,913
|
|
|
|
|
QCT
|
|
QTL
|
|
QSI
|
|
Reconciling
Items
|
|
Total
|
||||||||||
For the three months ended
|
|
|
|
|
|
|
|
|
|
||||||||||
June 28, 2015
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
3,853
|
|
|
$
|
1,931
|
|
|
$
|
—
|
|
|
$
|
48
|
|
|
$
|
5,832
|
|
EBT
|
289
|
|
|
1,654
|
|
|
(49
|
)
|
|
(496
|
)
|
|
1,398
|
|
|||||
June 29, 2014
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
4,957
|
|
|
$
|
1,803
|
|
|
$
|
—
|
|
|
$
|
46
|
|
|
$
|
6,806
|
|
EBT
|
1,116
|
|
|
1,550
|
|
|
(1
|
)
|
|
(168
|
)
|
|
2,497
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
For the nine months ended
|
|
|
|
|
|
|
|
|
|
||||||||||
June 28, 2015
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
13,529
|
|
|
$
|
6,162
|
|
|
$
|
—
|
|
|
$
|
134
|
|
|
$
|
19,825
|
|
EBT
|
2,185
|
|
|
5,395
|
|
|
(82
|
)
|
|
(2,262
|
)
|
|
5,236
|
|
|||||
June 29, 2014
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
13,816
|
|
|
$
|
5,774
|
|
|
$
|
—
|
|
|
$
|
205
|
|
|
$
|
19,795
|
|
EBT
|
2,762
|
|
|
5,054
|
|
|
(36
|
)
|
|
(1,254
|
)
|
|
6,526
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 28,
2015 |
|
June 29,
2014 |
|
June 28,
2015 |
|
June 29,
2014 |
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Nonreportable segments
|
$
|
49
|
|
|
$
|
47
|
|
|
$
|
138
|
|
|
$
|
208
|
|
Intersegment eliminations
|
(1
|
)
|
|
(1
|
)
|
|
(4
|
)
|
|
(3
|
)
|
||||
|
$
|
48
|
|
|
$
|
46
|
|
|
$
|
134
|
|
|
$
|
205
|
|
EBT
|
|
|
|
|
|
|
|
||||||||
Unallocated cost of equipment and services revenues
|
$
|
(65
|
)
|
|
$
|
(74
|
)
|
|
$
|
(217
|
)
|
|
$
|
(223
|
)
|
Unallocated research and development expenses
|
(188
|
)
|
|
(220
|
)
|
|
(624
|
)
|
|
(653
|
)
|
||||
Unallocated selling, general and administrative expenses
|
(93
|
)
|
|
(107
|
)
|
|
(342
|
)
|
|
(318
|
)
|
||||
Unallocated other (expense) income
|
(142
|
)
|
|
184
|
|
|
(1,221
|
)
|
|
173
|
|
||||
Unallocated investment income, net
|
193
|
|
|
413
|
|
|
655
|
|
|
985
|
|
||||
Nonreportable segments
|
(201
|
)
|
|
(364
|
)
|
|
(512
|
)
|
|
(1,218
|
)
|
||||
Intersegment eliminations
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||
|
$
|
(496
|
)
|
|
$
|
(168
|
)
|
|
$
|
(2,262
|
)
|
|
$
|
(1,254
|
)
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 28,
2015 |
|
June 29,
2014 |
|
June 28,
2015 |
|
June 29,
2014 |
||||||||
Cost of equipment and services revenues
|
$
|
55
|
|
|
$
|
62
|
|
|
$
|
184
|
|
|
$
|
186
|
|
Research and development expenses
|
3
|
|
|
3
|
|
|
11
|
|
|
26
|
|
||||
Selling, general and administrative expenses
|
20
|
|
|
6
|
|
|
45
|
|
|
19
|
|
|
June 28,
2015 |
|
September 28,
2014 |
||||
QCT
|
$
|
2,977
|
|
|
$
|
3,639
|
|
QTL
|
522
|
|
|
161
|
|
||
QSI
|
697
|
|
|
484
|
|
||
Reconciling items
|
48,099
|
|
|
44,290
|
|
||
Total consolidated assets
|
$
|
52,295
|
|
|
$
|
48,574
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
5,207
|
|
|
$
|
4,465
|
|
|
$
|
—
|
|
|
$
|
9,672
|
|
Marketable securities (a)
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities and government-related securities
|
44
|
|
|
1,137
|
|
|
—
|
|
|
1,181
|
|
||||
Corporate bonds and notes
|
—
|
|
|
16,272
|
|
|
—
|
|
|
16,272
|
|
||||
Mortgage- and asset-backed securities
|
—
|
|
|
1,584
|
|
|
181
|
|
|
1,765
|
|
||||
Auction rate securities
|
—
|
|
|
—
|
|
|
46
|
|
|
46
|
|
||||
Common and preferred stock
|
753
|
|
|
683
|
|
|
—
|
|
|
1,436
|
|
||||
Equity funds
|
496
|
|
|
—
|
|
|
—
|
|
|
496
|
|
||||
Debt funds
|
—
|
|
|
4,042
|
|
|
—
|
|
|
4,042
|
|
||||
Total marketable securities
|
1,293
|
|
|
23,718
|
|
|
227
|
|
|
25,238
|
|
||||
Derivative instruments
|
2
|
|
|
7
|
|
|
—
|
|
|
9
|
|
||||
Other investments (a)
|
356
|
|
|
—
|
|
|
—
|
|
|
356
|
|
||||
Total assets measured at fair value
|
$
|
6,858
|
|
|
$
|
28,190
|
|
|
$
|
227
|
|
|
$
|
35,275
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Derivative instruments
|
$
|
—
|
|
|
$
|
23
|
|
|
$
|
—
|
|
|
$
|
23
|
|
Other liabilities
|
310
|
|
|
—
|
|
|
—
|
|
|
310
|
|
||||
Total liabilities measured at fair value
|
$
|
310
|
|
|
$
|
23
|
|
|
$
|
—
|
|
|
$
|
333
|
|
|
Nine Months Ended
June 28, 2015
|
|
Nine Months Ended
June 29, 2014
|
||||||||||||
|
Auction Rate
Securities
|
|
Mortgage- and Asset-Backed
Securities
|
|
Auction Rate
Securities
|
|
Mortgage- and Asset-Backed
Securities
|
||||||||
Beginning balance of Level 3
|
$
|
83
|
|
|
$
|
186
|
|
|
$
|
83
|
|
|
$
|
239
|
|
Total realized and unrealized gains or losses:
|
|
|
|
|
|
|
|
||||||||
Included in investment income, net
|
—
|
|
|
3
|
|
|
—
|
|
|
10
|
|
||||
Included in other comprehensive income
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
||||
Purchases
|
—
|
|
|
62
|
|
|
—
|
|
|
86
|
|
||||
Sales
|
—
|
|
|
(46
|
)
|
|
—
|
|
|
(124
|
)
|
||||
Settlements
|
(37
|
)
|
|
(20
|
)
|
|
—
|
|
|
(28
|
)
|
||||
Transfers out of Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||
Ending balance of Level 3
|
$
|
46
|
|
|
$
|
181
|
|
|
$
|
83
|
|
|
$
|
177
|
|
|
Current
|
|
Noncurrent
|
||||||||||||
|
June 28,
2015 |
|
September 28,
2014 |
|
June 28,
2015 |
|
September 28,
2014 |
||||||||
Trading:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities and government-related securities
|
$
|
329
|
|
|
$
|
320
|
|
|
$
|
6
|
|
|
$
|
38
|
|
Corporate bonds and notes
|
187
|
|
|
191
|
|
|
379
|
|
|
367
|
|
||||
Mortgage- and asset-backed securities
|
—
|
|
|
—
|
|
|
252
|
|
|
237
|
|
||||
Total trading
|
516
|
|
|
511
|
|
|
637
|
|
|
642
|
|
||||
Available-for-sale:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities and government-related securities
|
138
|
|
|
805
|
|
|
708
|
|
|
392
|
|
||||
Corporate bonds and notes
|
8,628
|
|
|
6,274
|
|
|
7,078
|
|
|
7,649
|
|
||||
Mortgage- and asset-backed securities
|
1,297
|
|
|
1,063
|
|
|
216
|
|
|
195
|
|
||||
Auction rate securities
|
—
|
|
|
—
|
|
|
46
|
|
|
83
|
|
||||
Common and preferred stock
|
550
|
|
|
192
|
|
|
886
|
|
|
1,605
|
|
||||
Equity funds
|
—
|
|
|
—
|
|
|
496
|
|
|
541
|
|
||||
Debt funds
|
215
|
|
|
813
|
|
|
3,038
|
|
|
2,560
|
|
||||
Total available-for-sale
|
10,828
|
|
|
9,147
|
|
|
12,468
|
|
|
13,025
|
|
||||
Fair value option:
|
|
|
|
|
|
|
|
||||||||
Debt fund
|
—
|
|
|
—
|
|
|
789
|
|
|
790
|
|
||||
Total marketable securities
|
$
|
11,344
|
|
|
$
|
9,658
|
|
|
$
|
13,894
|
|
|
$
|
14,457
|
|
|
Gross Realized Gains
|
|
Gross Realized Losses
|
|
Net Realized Gains
|
||||||
For the three months ended
|
|
|
|
|
|
||||||
June 28, 2015
|
$
|
126
|
|
|
$
|
(10
|
)
|
|
$
|
116
|
|
June 29, 2014
|
267
|
|
|
(8
|
)
|
|
259
|
|
|||
|
|
|
|
|
|
||||||
For the nine months ended
|
|
|
|
|
|
||||||
June 28, 2015
|
$
|
434
|
|
|
$
|
(48
|
)
|
|
$
|
386
|
|
June 29, 2014
|
610
|
|
|
(16
|
)
|
|
594
|
|
|
Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Fair Value
|
||||||||
June 28, 2015
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
$
|
1,543
|
|
|
$
|
391
|
|
|
$
|
(2
|
)
|
|
$
|
1,932
|
|
Debt securities (including debt funds)
|
21,203
|
|
|
253
|
|
|
(92
|
)
|
|
21,364
|
|
||||
|
$
|
22,746
|
|
|
$
|
644
|
|
|
$
|
(94
|
)
|
|
$
|
23,296
|
|
September 28, 2014
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
$
|
1,769
|
|
|
$
|
575
|
|
|
$
|
(6
|
)
|
|
$
|
2,338
|
|
Debt securities (including debt funds)
|
19,582
|
|
|
312
|
|
|
(60
|
)
|
|
19,834
|
|
||||
|
$
|
21,351
|
|
|
$
|
887
|
|
|
$
|
(66
|
)
|
|
$
|
22,172
|
|
|
June 28, 2015
|
||||||||||||||
|
Less than 12 months
|
|
More than 12 months
|
||||||||||||
|
Fair Value
|
|
Unrealized Losses
|
|
Fair Value
|
|
Unrealized Losses
|
||||||||
U.S. Treasury securities and government-related securities
|
$
|
313
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Corporate bonds and notes
|
7,413
|
|
|
(59
|
)
|
|
142
|
|
|
(9
|
)
|
||||
Mortgage- and asset-backed securities
|
874
|
|
|
(2
|
)
|
|
16
|
|
|
—
|
|
||||
Auction rate securities
|
—
|
|
|
—
|
|
|
46
|
|
|
(1
|
)
|
||||
Common and preferred stock
|
155
|
|
|
(2
|
)
|
|
18
|
|
|
—
|
|
||||
Debt funds
|
934
|
|
|
(18
|
)
|
|
47
|
|
|
(1
|
)
|
||||
|
$
|
9,689
|
|
|
$
|
(83
|
)
|
|
$
|
269
|
|
|
$
|
(11
|
)
|
|
September 28, 2014
|
||||||||||||||
|
Less than 12 months
|
|
More than 12 months
|
||||||||||||
|
Fair Value
|
|
Unrealized Losses
|
|
Fair Value
|
|
Unrealized Losses
|
||||||||
U.S. Treasury securities and government-related securities
|
$
|
279
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Corporate bonds and notes
|
4,924
|
|
|
(31
|
)
|
|
104
|
|
|
(4
|
)
|
||||
Mortgage- and asset-backed securities
|
484
|
|
|
(1
|
)
|
|
52
|
|
|
(1
|
)
|
||||
Auction rate securities
|
—
|
|
|
—
|
|
|
83
|
|
|
(1
|
)
|
||||
Common and preferred stock
|
86
|
|
|
(3
|
)
|
|
52
|
|
|
(3
|
)
|
||||
Debt funds
|
133
|
|
|
(1
|
)
|
|
384
|
|
|
(19
|
)
|
||||
|
$
|
5,906
|
|
|
$
|
(38
|
)
|
|
$
|
675
|
|
|
$
|
(28
|
)
|
•
|
We shipped approximately
225 million
Mobile Station Modem (MSM) integrated circuits for CDMA- and OFDMA-based wireless devices, consistent with the approximately
225 million
MSM integrated circuits in the year ago quarter.
|
•
|
Total reported device sales were approximately
$60.4 billion
, an increase of approximately
4%
, compared to approximately
$58.1 billion
in the year ago quarter.
(1)
|
•
|
Worldwide cellular connections grew sequentially by approximately
1%
to reach approximately
7.2 billion
.
(2)
|
•
|
Worldwide 3G/4G connections (CDMA-based, OFDMA-based and CDMA/OFDMA multimode) grew sequentially by approximately
5%
to approximately
3.3 billion
, which was approximately 45% of total cellular connections.
(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, including transportation, insurance, packing costs and other items, 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. In addition, certain licensees may not report (in the quarter in which they are contractually obligated to report) their sales of certain types of subscriber units, which (as a result of audits, legal actions or for other reasons) may be reported in a subsequent quarter. Accordingly, 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 GSMA Intelligence estimates as of
July 20, 2015
for the quarter ended June 30, 2015.
|
•
|
On July 22, 2015, we announced a Strategic Realignment Plan designed to improve execution, enhance financial performance and drive profitable growth as we work to create sustainable long-term value for stockholders. The core elements of this plan include (a) right-sizing our cost structure; (b) reviewing alternatives to our corporate and financial structure; (c) reaffirming our plan to return significant capital to stockholders; (d) adding new Directors with complementary skills while reducing the average tenure of our Board of Directors; (e) further aligning executive compensation with performance and stockholder return objectives; and (f) making disciplined investments in areas that build upon our core technologies and capabilities and offer attractive growth opportunities and returns.
|
•
|
In order to right-size our cost structure, we are planning to reduce our annual costs from fiscal 2015 levels of
$7.3 billion
(adjusted for variable compensation) by approximately
$1.1 billion
through a series of targeted reductions across Qualcomm’s businesses, particularly in QCT. We also plan to reduce annual share-based compensation grants by approximately
$300 million
. We expect these cost initiatives to be fully implemented by the end of fiscal 2016. In connection with this plan, we expect to incur approximately
$350 million
to
$450 million
in restructuring and restructuring-related charges, of which approximately
$100 million
to
$200 million
are expected to be incurred in the fourth quarter of fiscal 2015. Restructuring and restructuring-related charges include an estimate of severance costs, lease termination costs, acceleration of depreciation, consultancy fees and other costs.
|
•
|
Our business has been impacted by changing industry dynamics, including: an increased shift in share among our customers within the premium tier, which will continue to negatively impact sales of our integrated Snapdragon processors and skew our product mix towards lower-margin modem chipsets in this tier; an increased use of internally-developed integrated circuit products by certain of our OEM (original equipment manufacturer) customers, which has led to a decline in share at a large customer; and the acceleration of intense competition in the low-tier, particularly in China. We anticipate that our results of operations, particularly for
|
•
|
We continue to invest significant resources toward advancements in 3G, 3G/4G multimode and 4G LTE technologies, audio and video codecs, wireless baseband chips, our converged computing/communications (Snapdragon) chips, graphics, connectivity, multimedia products, software and services. We are also investing in targeted opportunities that utilize our existing technical and business expertise to deploy new business models and enter into new industry segments, such as products designed for implementation of small cells to address the challenge of meeting the increased demand for data; products for the connected home and the Internet of Things; automotive; networking; mobile computing; very high speed connectivity; data centers; mobile health; wireless charging; and machine learning, including robotics.
|
•
|
Further expansion of 3G and 3G/4G multimode in emerging regions, particularly in China. We expect that the increased availability of low-tier 3G/4G smartphone products will help enable such expansion.
|
•
|
We expect that 3G/4G device prices will continue to vary broadly due to the increased penetration of smartphones combined with competition throughout the world at all price tiers. Additionally, varying rates of economic growth by region, and stronger growth of device shipments in emerging regions as compared to developed regions, are expected to continue to impact the average and range of selling prices of 3G/4G devices.
|
•
|
China continues to present significant opportunities for us, particularly with the rollout of 3G/4G LTE multimode. We expect the rollout of 4G services in China will encourage competition and growth, bring the benefits of 3G/4G LTE multimode to consumers, encourage consumers to replace 2G (GSM) and 3G devices and enable new opportunities (e.g., machine-to-machine) for the industry. However, our success in China is in part dependent upon the rate of commercialization of products based on 4G LTE (an OFDMA-based standard) in China.
|
•
|
In February 2015, we reached a resolution with the NDRC regarding its investigation and agreed to implement a rectification plan that modifies certain of our business practices in China. The rectification plan provides, among other things, that for licenses of only our 3G and 4G essential Chinese patents for branded devices sold for use in China starting on January 1, 2015 (and reported to us in the third quarter of fiscal 2015), we will charge running royalties at royalty rates of 5% for 3G CDMA or WCDMA devices (including multimode 3G/4G devices) and 3.5% for 4G devices that do not implement CDMA or WCDMA (including 3-mode LTE-TDD devices), in each case using a royalty base of 65% of the net selling price.
|
•
|
Despite the resolution of the NDRC investigation, China continues to present significant challenges for us. We continue to believe that certain licensees in China are not fully complying with their contractual obligations to report their sales of licensed products to us (which includes 3G/4G units that we believe are not being reported by certain licensees). We continue to make progress, with licensees executing agreements based on the new China terms, and with several other licensees informing us that they intend to retain the terms of their existing agreements. Negotiations with certain other licensees are ongoing, and we expect it will take some time to conclude these negotiations. We believe that the conclusion of new agreements with these licensees will result in improved reporting by these licensees, including with respect to sales of three-mode devices (i.e., devices that implement GSM, TD-SCDMA, and LTE) sold in China. However, litigation and/or other actions may be necessary to compel licensees to report and pay the required royalties for sales they have not previously reported and to compel unlicensed companies to execute new licenses.
|
•
|
In October 2014, we announced that we had reached agreement with CSR plc on the terms of a recommended cash offer to acquire the entire issued and to be issued ordinary share capital of CSR for
£9.00
per ordinary share, which values the entire issued and to be issued share capital of CSR at approximately
£1.6 billion
(approximately
$2.4 billion
based upon an exchange rate of USD: GBP
1.5634
). CSR is an innovator in the development of multifunction semiconductor platforms and technologies for the automotive, consumer and voice and music categories. The acquisition complements our current offerings by adding products, channels and customers in the growth categories of the Internet of Everything and automotive infotainment, accelerating our presence and path to leadership. The acquisition has received approval of CSR’s shareholders, and every required regulatory agency has either provided formal written approval or declined to exercise jurisdiction, except for the Ministry of Commerce in China. The completion of the acquisition remains subject to the satisfaction of additional conditions. Subject to the satisfaction of these conditions, the acquisition is expected to close by the end of the summer of 2015.
|
Revenues (in millions)
|
|
|
|
|
|
|
|||||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||
|
June 28, 2015
|
|
June 29, 2014
|
|
Change
|
|
June 28, 2015
|
|
June 29, 2014
|
|
Change
|
||||||||||||
Equipment and services
|
$
|
3,840
|
|
|
$
|
4,922
|
|
|
$
|
(1,082
|
)
|
|
$
|
13,459
|
|
|
$
|
13,803
|
|
|
$
|
(344
|
)
|
Licensing
|
1,992
|
|
|
1,884
|
|
|
108
|
|
|
6,366
|
|
|
5,992
|
|
|
374
|
|
||||||
|
$
|
5,832
|
|
|
$
|
6,806
|
|
|
$
|
(974
|
)
|
|
$
|
19,825
|
|
|
$
|
19,795
|
|
|
$
|
30
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||
|
June 28, 2015
|
|
June 29, 2014
|
|
Change
|
|
June 28, 2015
|
|
June 29, 2014
|
|
Change
|
||||||||||||
Research and development
|
$
|
1,407
|
|
|
$
|
1,429
|
|
|
$
|
(22
|
)
|
|
$
|
4,133
|
|
|
$
|
4,113
|
|
|
$
|
20
|
|
% of revenues
|
24
|
%
|
|
21
|
%
|
|
|
|
21
|
%
|
|
21
|
%
|
|
|
||||||||
Selling, general, and administrative
|
$
|
577
|
|
|
$
|
582
|
|
|
$
|
(5
|
)
|
|
$
|
1,689
|
|
|
$
|
1,745
|
|
|
$
|
(56
|
)
|
% of revenues
|
10
|
%
|
|
9
|
%
|
|
|
|
9
|
%
|
|
9
|
%
|
|
|
||||||||
Other
|
$
|
162
|
|
|
$
|
(20
|
)
|
|
$
|
182
|
|
|
$
|
1,241
|
|
|
$
|
450
|
|
|
$
|
791
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
June 28, 2015
|
|
June 29, 2014
|
|
June 28, 2015
|
|
June 29, 2014
|
||||
Expected income tax provision at federal statutory tax rate
|
35
|
%
|
|
35
|
%
|
|
35
|
%
|
|
35
|
%
|
Benefits from foreign income taxed at other than U.S. rates
|
(22
|
%)
|
|
(23
|
%)
|
|
(19
|
%)
|
|
(21
|
%)
|
Benefits related to the research and development tax credit
|
(1
|
%)
|
|
(1
|
%)
|
|
(3
|
%)
|
|
(1
|
%)
|
Tax impact of NDRC fine
|
—
|
|
|
—
|
|
|
7
|
%
|
|
—
|
|
Tax audit impacts, net
|
—
|
|
|
—
|
|
|
(1
|
%)
|
|
—
|
|
Other
|
3
|
%
|
|
(1
|
%)
|
|
1
|
%
|
|
1
|
%
|
Effective tax rate
|
15
|
%
|
|
10
|
%
|
|
20
|
%
|
|
14
|
%
|
(in millions)
|
QCT
|
|
QTL
|
|
QSI
|
||||||
Three Months Ended June 28, 2015
|
|
|
|
|
|
||||||
Revenues
|
$
|
3,853
|
|
|
$
|
1,931
|
|
|
$
|
—
|
|
EBT
(1)
|
289
|
|
|
1,654
|
|
|
(49
|
)
|
|||
EBT as a % of revenues
|
8
|
%
|
|
86
|
%
|
|
|
||||
Three Months Ended June 29, 2014
|
|
|
|
|
|
||||||
Revenues
|
$
|
4,957
|
|
|
$
|
1,803
|
|
|
$
|
—
|
|
EBT
(1)
|
1,116
|
|
|
1,550
|
|
|
(1
|
)
|
|||
EBT as a % of revenues
|
23
|
%
|
|
86
|
%
|
|
|
||||
Nine Months Ended June 28, 2015
|
|
|
|
|
|
||||||
Revenues
|
$
|
13,529
|
|
|
$
|
6,162
|
|
|
$
|
—
|
|
EBT
(1)
|
2,185
|
|
|
5,395
|
|
|
(82
|
)
|
|||
EBT as a % of revenues
|
16
|
%
|
|
88
|
%
|
|
|
|
|||
Nine Months Ended June 29, 2014
|
|
|
|
|
|
||||||
Revenues
|
$
|
13,816
|
|
|
$
|
5,774
|
|
|
$
|
—
|
|
EBT
(1)
|
2,762
|
|
|
5,054
|
|
|
(36
|
)
|
|||
EBT as a % of revenues
|
20
|
%
|
|
88
|
%
|
|
|
|
(1)
|
Earnings (loss) before taxes.
|
•
|
In connection with our Strategic Realignment Plan, we expect to incur approximately
$350 million
to
$450 million
in restructuring and restructuring-related charges, the majority of which will result in cash payments.
|
•
|
Our research and development expenditures were
$4.1 billion
during the
first nine months of fiscal 2015
and $5.5 billion in fiscal
2014
, 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.
|
•
|
Our purchase obligations for the remainder of fiscal
2015
and for fiscal 2016, some of which relate to research and development activities and capital expenditures, totaled
$2.2 billion
and
$1.2 billion
, respectively, at
June 28, 2015
.
|
•
|
Cash outflows for capital expenditures were
$815 million
during the
first nine months of fiscal 2015
and $1.2 billion in fiscal
2014
. We expect to continue to incur capital expenditures in the future to support our business, including research and development activities. Future capital expenditures may be impacted by transactions that are currently not forecasted.
|
•
|
In October 2014, we announced that we had reached agreement with CSR plc on the terms of a recommended cash offer to acquire the entire issued and to be issued ordinary share capital of CSR for £9.00 per ordinary share, which values the entire issued and to be issued share capital of CSR at approximately
£1.6 billion
(approximately
$2.4 billion
based upon an exchange rate of USD: GBP
1.5634
). We expect to use existing cash resources to fund the acquisition. The acquisition has received approval from CSR’s shareholders, and every required regulatory agency has either provided formal written approval or declined to exercise jurisdiction, except for the Ministry of Commerce in China. The completion of the acquisition remains subject to the satisfaction of additional conditions. Subject to the satisfaction of these conditions, the acquisition is expected to close by the end of the summer of 2015.
|
•
|
We expect to continue making strategic investments and acquisitions, the amounts of which could vary significantly, to open new opportunities for our technologies, obtain development resources, grow our patent portfolio or pursue new businesses.
|
•
|
wireless operators and industries beyond traditional cellular communications deploy alternative technologies;
|
•
|
wireless operators delay 3G and 3G/4G multimode network 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 technology, is not more widely deployed or further commercial deployment is delayed;
|
•
|
government regulators delay making sufficient spectrum available for 3G and/or 3G/4G networks, thereby restricting the expansion of 3G/4G wireless connectivity to keep pace with consumer demand;
|
•
|
wireless operators are unable to drive improvements in 3G or 3G/4G multimode network performance and/or capacity;
|
•
|
our customers’ and licensees’ revenues and sales of products, particularly premium-tier products, and services using these technologies, do not grow or do not grow as quickly as anticipated, due to, for example, the maturity of smartphone penetration in developed regions (where premium-tier products are common); and/or
|
•
|
we are unable to drive the adoption of our products and services into networks and devices based on CDMA, OFDMA and other communications technologies.
|
•
|
differentiate our integrated circuit products with innovative technologies across multiple products and features (e.g., modem, radio frequency front end, central, graphics and/or other processors, camera and connectivity) and with smaller geometry process technologies that drive performance;
|
•
|
develop and offer integrated circuit products at competitive cost and price points to effectively cover both emerging and developed geographic regions and all device tiers;
|
•
|
continue to drive the adoption of our integrated circuit products into the most popular device models and across a broad spectrum of devices, such as smartphones, tablets and other connected devices, and infrastructure products;
|
•
|
maintain and/or accelerate demand for our integrated circuit products at the premium device tier, while increasing the adoption of our products in mid- and low-tier devices and in the turnkey product channel, in part by strengthening our integrated circuit product roadmap for, and developing channel relationships in, emerging geographic regions, such as China and India, and by providing turnkey products, which incorporate our integrated circuits, for low- and mid-tier smartphones and tablets;
|
•
|
continue to be a leader in 4G technology evolution, including expansion of our OFDMA-based single mode licensing program, and continue to innovate and introduce 4G turnkey, integrated products and services that differentiate us from our competition;
|
•
|
be a leader serving original equipment manufacturers, high level operating systems (HLOS) providers, operators and other industry participants as competitors, new industry entrants and other factors continue to affect the industry landscape;
|
•
|
be a preferred partner (and sustain preferred relationships) providing integrated circuit products that support multiple operating system and infrastructure platforms to industry participants that effectively commercialize new devices using these platforms;
|
•
|
increase and/or accelerate demand for our wired and wireless connectivity products, including networking products for consumers, carriers and enterprise equipment and connected devices;
|
•
|
become a leading supplier of small cell modems (which enable inexpensive cell sites deployed by users to connect to traditional cellular networks through wired internet connections) and products that enable Wi-Fi access to support significant network capacity expansion that will be needed to meet anticipated growth in mobile data traffic;
|
•
|
identify potential acquisition targets that will grow or sustain our business or address strategic needs, reach agreement on terms acceptable to us and effectively integrate these new businesses and/or technologies;
|
•
|
create stand-alone value and/or contribute to the success of our existing businesses through acquisitions and other investments (and/or by developing customer, licensee and/or vendor relationships) in new industry segments and/or disruptive technologies, products and/or services (such as the connected home and the Internet of Things, automotive products, networking, mobile computing, mobile health, machine learning, including robotics and wireless charging, among others); and/or
|
•
|
continue to develop brand recognition to effectively compete against better known companies in mobile computing and other consumer driven segments and to deepen our presence in significant emerging geographic regions.
|
•
|
a reduction, interruption, delay or limitation in our product supply sources;
|
•
|
a failure by our suppliers to procure raw materials or to provide or allocate adequate manufacturing or test capacity for our products;
|
•
|
our suppliers’ inability to react to shifts in product demand or an increase in raw material or component prices;
|
•
|
the loss of a supplier or the inability of a supplier to meet performance or quality specifications or delivery schedules; and/or
|
•
|
additional expense and/or production delays as a result of qualifying a new supplier and commencing volume production or testing in the event of a loss of or a decision to add or change a supplier.
|
•
|
requiring us to use cash to pay the principal of and interest on our indebtedness, thereby reducing the amount of cash flow available for other purposes;
|
•
|
limiting our ability to obtain additional financing for working capital, capital expenditures, acquisitions, stock repurchases, dividends or other general corporate and other purposes;
|
•
|
limiting our flexibility in planning for, or reacting to, changes in our business and our industry; and/or
|
•
|
increasing our vulnerability to interest rate fluctuations to the extent a portion of our debt has variable interest rates.
|
•
|
Our products and those of our customers and licensees that are sold outside the United States may become less price-competitive, which may result in reduced demand for those products and/or downward pressure on average selling prices;
|
•
|
Certain of our revenues, such as royalties, that are derived from licensee or customer sales denominated in foreign currencies could decrease;
|
•
|
Our foreign suppliers may raise their prices if they are impacted by currency fluctuations, resulting in higher than expected costs and lower margins; and/or
|
•
|
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.
|
|
Total Number of
Shares Purchased
|
|
Average Price Paid Per Share (1)
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares that May Yet Be
Purchased Under the Plans or Programs
(2)
|
||||||
|
(In thousands)
|
|
|
|
(In thousands)
|
|
(In millions)
|
||||||
March 30, 2015 to April 26, 2015
|
5,061
|
|
|
$
|
68.18
|
|
|
5,061
|
|
|
$
|
14,198
|
|
April 27, 2015 to May 24, 2015
|
|
|
|
|
|
|
|
|
|||||
Accelerated share repurchases (3)
|
57,737
|
|
|
|
|
57,737
|
|
|
9,198
|
|
|||
May 25, 2015 to June 28, 2015
|
892
|
|
|
67.29
|
|
|
892
|
|
|
9,138
|
|
||
Total (3)
|
63,690
|
|
|
68.05
|
|
|
63,690
|
|
|
|
|
(1)
|
Average Price Paid Per Share excludes cash paid for commissions.
|
(2)
|
On
March 9, 2015
, we announced a new repurchase program authorizing us to repurchase up to
$15 billion
of our common stock. At
June 28, 2015
,
$9.1 billion
remained authorized for repurchase. The stock repurchase program has no expiration date. Since
June 28, 2015
, we repurchased and retired
8.0 million
shares of common stock for
$510 million
.
|
(3)
|
In
May 2015
, we entered into two accelerated share repurchase agreements (ASR Agreements) to repurchase an aggregate of
$5.0 billion
of our common stock. During the
third
quarter of fiscal
2015
,
57.7 million
shares were delivered to us under the ASR Agreements, constituting the initial delivery of shares under the ASR Agreements, and were retired. Pursuant to the terms of the ASR Agreements, the final number of shares and the average purchase price will be determined at the end of the applicable purchase periods, which is expected to occur in or before
November 2015
.
|
Exhibit
Number
|
|
Exhibit Description
|
|
Form
|
|
File No./ Film No.
|
|
Date of First Filing
|
|
Exhibit Number
|
|
Filed Herewith
|
3.1
|
|
Restated Certificate of Incorporation, as amended.
|
|
10-Q
|
|
000-19528/ 12766084
|
|
4/18/12
|
|
3.1
|
|
-
|
3.4
|
|
Amended and Restated Bylaws.
|
|
8-K
|
|
000-19528/12958032
|
|
7/11/12
|
|
3.4
|
|
-
|
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.
|
|
8-K
|
|
000-19528/051113779
|
|
9/30/05
|
|
99.1
|
|
-
|
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.
|
|
8-K
|
|
000-19528/061271210
|
|
12/12/06
|
|
99.1
|
|
-
|
4.3
|
|
Indenture, dated May 20, 2015, between the Company and U.S. Bank National Association, as trustee.
|
|
8-K
|
|
000-19528/ 15880967
|
|
5/21/2015
|
|
4.1
|
|
-
|
4.4
|
|
Officers’ Certificate, dated May 20, 2015, for the Floating Rate Notes due 2018, the Floating Rate Notes due 2020, the 1.400% Notes due 2018, the 2.250% Notes due 2020, the 3.000% Notes due 2022, the 3.450% Notes due 2025, the 4.650% Notes due 2035 and the 4.800% Notes due 2045.
|
|
8-K
|
|
000-19528/ 15880967
|
|
5/21/2015
|
|
4.2
|
|
-
|
4.5
|
|
Form of Floating Rate Notes due 2018.
|
|
8-K
|
|
000-19528/ 15880967
|
|
5/21/2015
|
|
4.3
|
|
-
|
4.6
|
|
Form of Floating Rate Notes due 2020.
|
|
8-K
|
|
000-19528/ 15880967
|
|
5/21/2015
|
|
4.4
|
|
-
|
4.7
|
|
Form of 1.400% Notes due 2018.
|
|
8-K
|
|
000-19528/ 15880967
|
|
5/21/2015
|
|
4.5
|
|
-
|
4.8
|
|
Form of 2.250% Notes due 2020.
|
|
8-K
|
|
000-19528/ 15880967
|
|
5/21/2015
|
|
4.6
|
|
-
|
4.9
|
|
Form of 3.000% Notes due 2022.
|
|
8-K
|
|
000-19528/ 15880967
|
|
5/21/2015
|
|
4.7
|
|
-
|
4.10
|
|
Form of 3.450% Notes due 2025.
|
|
8-K
|
|
000-19528/ 15880967
|
|
5/21/2015
|
|
4.8
|
|
-
|
4.11
|
|
Form of 4.650% Notes due 2035.
|
|
8-K
|
|
000-19528/ 15880967
|
|
5/21/2015
|
|
4.9
|
|
-
|
4.12
|
|
Form of 4.800% Notes due 2045.
|
|
8-K
|
|
000-19528/ 15880967
|
|
5/21/2015
|
|
4.10
|
|
-
|
10.128
|
|
Amended and Restated QUALCOMM Incorporated 2001 Employee Stock Purchase Plan, as amended
|
|
-
|
|
-
|
|
-
|
|
-
|
|
X
|
10.130
|
|
Master Confirmation - Accelerated Stock Buyback, dated as of May 20, 2015, between the Company and Goldman, Sachs & Co.
|
|
8-K
|
|
000-19528/ 15881368
|
|
5/21/2015
|
|
10.1
|
|
-
|
10.131
|
|
Master Confirmation - Accelerated Stock Buyback, dated as of May 20, 2015, between the Company and Morgan Stanley & Co. LLC.
|
|
8-K
|
|
000-19528/ 15881368
|
|
5/21/2015
|
|
10.2
|
|
-
|
31.1
|
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Steve Mollenkopf.
|
|
-
|
|
-
|
|
-
|
|
-
|
|
X
|
31.2
|
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for George S. Davis.
|
|
-
|
|
-
|
|
-
|
|
-
|
|
X
|
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 Steve Mollenkopf.
|
|
-
|
|
-
|
|
-
|
|
-
|
|
X
|
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.
|
|
-
|
|
-
|
|
-
|
|
-
|
|
X
|
Exhibit
Number
|
|
Exhibit Description
|
|
Form
|
|
File No./ Film No.
|
|
Date of First Filing
|
|
Exhibit Number
|
|
Filed Herewith
|
101.INS
|
|
XBRL Instance Document.
|
|
-
|
|
-
|
|
-
|
|
-
|
|
X
|
101.SCH
|
|
XBRL Taxonomy Extension Schema.
|
|
-
|
|
-
|
|
-
|
|
-
|
|
X
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase.
|
|
-
|
|
-
|
|
-
|
|
-
|
|
X
|
101.LAB
|
|
XBRL Taxonomy Extension Labels Linkbase.
|
|
-
|
|
-
|
|
-
|
|
-
|
|
X
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase.
|
|
-
|
|
-
|
|
-
|
|
-
|
|
X
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase.
|
|
-
|
|
-
|
|
-
|
|
-
|
|
X
|
|
QUALCOMM Incorporated
|
|
/s/ George S. Davis
|
|
George S. Davis
|
|
Executive Vice President and Chief Financial Officer
|
|
|
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/ Steve Mollenkopf
|
|
Steve Mollenkopf
|
|
Chief Executive Officer
|
|
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/ George S. Davis
|
|
George S. Davis
|
|
Executive Vice President and Chief Financial Officer
|
|
1.
|
The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Steve Mollenkopf
|
|
Steve Mollenkopf
|
|
Chief Executive Officer
|
|
1.
|
The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ George S. Davis
|
|
George S. Davis
|
|
Executive Vice President and Chief Financial Officer
|
|