|
|
|
|
|
|
|
|
☒
|
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
☐
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
Delaware
|
|
95-3685934
|
||
|
(State or Other Jurisdiction of Incorporation or Organization)
|
|
(I.R.S. Employer
Identification No.)
|
||
|
|
|
|
|
|
|
5775 Morehouse Dr.,
|
San Diego,
|
California
|
|
92121-1714
|
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
Title of Each Class
|
Trading Symbol(s)
|
Name of Each Exchange on Which Registered
|
Common stock, $0.0001 par value
|
QCOM
|
NASDAQ Stock Market
|
Large accelerated filer
|
☒
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
Emerging growth company
|
☐
|
|
|
|
|
|
QUALCOMM Incorporated
|
|
Form 10-K
|
|
For the Fiscal Year Ended September 29, 2019
|
|
Index
|
|
|
Page
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
LAA (Licensed Assisted Access), introduced as part of 3GPP Release 13, aggregates unlicensed and licensed spectrum in the downlink and is being deployed globally by mobile operators. LAA is a key technology for many operators with limited licensed spectrum to deliver Gigabit LTE speeds.
|
•
|
eLAA (enhanced LAA) introduced as part of 3GPP Release 14, is an evolution of LAA, enables aggregation of unlicensed and licensed spectrum in the uplink.
|
•
|
RFFE chips and modules (including power amplifier modules, envelope tracker, antenna tuners, diversity modules, RF switches and micro-acoustic RF filters) designed for improved signal performance and reduced power consumption, while simplifying the design for manufacturers to develop LTE/5G multimode, multiband devices, including sub-6 GHz and mmWave devices;
|
•
|
video coding based on the HEVC (high efficiency video codec) standard, which is being deployed to support 4K video and immersive media content;
|
•
|
the latest version of 3GPP’s codec for multimedia use and for voice/speech use;
|
•
|
multimedia transport, including MPEG-DASH (Dynamic Adaptive Streaming over HTTP) enabling advanced multimedia experiences;
|
•
|
security and content protection systems for enhanced device security without compromising the user experience and ultrasonic fingerprint readers for single touch authentication;
|
|
2019
|
|
2018
|
|
2017
|
||||||
QCT
|
$
|
14,639
|
|
|
$
|
17,282
|
|
|
$
|
16,479
|
|
As a percent of total
|
60
|
%
|
|
76
|
%
|
|
74
|
%
|
|||
QTL
|
$
|
4,591
|
|
|
$
|
5,042
|
|
|
$
|
6,412
|
|
As a percent of total
|
19
|
%
|
|
22
|
%
|
|
29
|
%
|
|||
QSI
|
$
|
152
|
|
|
$
|
100
|
|
|
$
|
113
|
|
As a percent of total
|
1
|
%
|
|
—
|
%
|
|
1
|
%
|
•
|
Our Governance. We aim to demonstrate accountability, transparency, integrity and ethical business practices throughout our operations and interactions with our stakeholders.
|
•
|
Our Products. We strive to meet or exceed industry standards for product responsibility and supplier management.
|
•
|
Our Workplace. We endeavor to provide a safe and healthy work environment where diversity is embraced, innovation is encouraged, and opportunities for training, growth and advancement are available for all employees.
|
•
|
Our Community. We have strategic relationships with a wide range of local organizations and programs that develop and strengthen communities worldwide.
|
•
|
Our Commitment to STEM Education. We aim to promote and improve science, technology, engineering and math (STEM) education at all levels and expand opportunities for underrepresented students in STEM careers.
|
•
|
Our Environment. We aim to expand our operations while minimizing our carbon footprint, conserving water and reducing waste.
|
•
|
Qualcomm® Wireless Reach™ Initiative. We invest in strategic programs that foster entrepreneurship, aid in public safety, enhance delivery of health care, enrich teaching and learning and improve environmental sustainability through the use of advanced wireless technologies.
|
•
|
wireless operators and industries beyond traditional cellular communications deploy alternative technologies;
|
•
|
wireless operators delay next-generation network deployments, expansions or upgrades or delay moving customers to 3G/4G and 3G/4G/5G multimode devices, as well as 4G and 5G single-mode devices;
|
•
|
LTE, an OFDMA-based wireless technology, is not more widely deployed or further commercial deployment is delayed;
|
•
|
government regulators delay making sufficient spectrum available for 4G and 5G wireless technologies, including unlicensed spectrum and shared spectrum technologies, thereby delaying or precluding the initial deployment or expanded deployment of these technologies;
|
•
|
wireless operators delay or do not drive improvements in 4G or 5G, or 3G/4G or 3G/4G/5G multimode network performance and capacity;
|
•
|
our customers’ and licensees’ revenues and sales of products, particularly premium-tier products, and services using these technologies, and average selling prices (ASPs) of such products, decline, do not grow or do not grow meaningfully due to, for example, the maturity of smartphone penetration in developed regions;
|
•
|
our intellectual property and technical leadership included in the continued 5G standardization effort is different than in 3G and 4G standards;
|
•
|
the continued standardization or commercial deployment of 5G technologies is delayed;
|
•
|
we are unable to drive the adoption of our products and services into networks and devices, including devices beyond traditional cellular applications, based on CDMA, OFDMA and other communications technologies; or
|
•
|
consumers’ rates of replacement of smartphones and other computing devices decline, do not grow or do not grow meaningfully.
|
•
|
differentiate our integrated circuit products with innovative technologies across multiple products and features (e.g., modem, RFFE, graphics and other processors, camera and connectivity) and with smaller geometry process technologies that drive both performance and lower power consumption;
|
•
|
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;
|
•
|
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, laptops and other computing devices, automobiles, wearables, voice and music and other connected devices and infrastructure products;
|
•
|
maintain or accelerate demand for our integrated circuit products at the premium device tier, while also driving the adoption of our 5G products into high, mid- and low-tier devices across all regions;
|
•
|
continue to be a leader in 4G and 5G technology evolution and continue to innovate and introduce 4G and 5G turnkey, integrated products and services that differentiate us from our competition;
|
•
|
remain a leader in 5G technology development, standardization, intellectual property creation and licensing, and develop, commercialize and be a leading supplier of 5G integrated circuit products and services;
|
•
|
increase or accelerate demand for our semiconductor component products, including RFFE, and our wireless connectivity products, including networking products for consumers, carriers and enterprise equipment and connected devices;
|
•
|
become a leading supplier of RFFE products, which are designed to address cellular radio frequency band fragmentation while improving radio frequency performance and assist original equipment manufacturers in developing multiband, multimode mobile devices;
|
•
|
create standalone value and contribute to the success of our existing businesses through acquisitions, joint ventures and other transactions, and by developing customer, licensee, vendor, distributor and other channel relationships in new industry segments and with disruptive technologies, products and services, such as products for automotive, computing, IoT (including the connected home, smart cities, wearables, voice and music and robotics) and networking, among others;
|
•
|
identify potential acquisition targets that will grow or sustain our business or address strategic needs, reach agreement on terms acceptable to us, close the transactions and effectively integrate these new businesses, products and technologies;
|
•
|
be a leader serving original equipment manufacturers (OEMs), high level operating systems (HLOS) providers, operators, cloud providers 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; and
|
•
|
continue to develop brand recognition to effectively compete against better known companies in computing and other consumer driven segments and to deepen our presence in significant emerging regions and China.
|
•
|
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 raw materials, 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;
|
•
|
our suppliers’ delay in developing leading process technologies, or inability to develop or maintain leading process technologies, including transitions to smaller geometry process technologies;
|
•
|
the loss of a supplier or the inability of a supplier to meet performance, quality or yield specifications or delivery schedules;
|
•
|
additional expense 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; and
|
•
|
natural disasters or geopolitical conflicts impacting our suppliers.
|
•
|
requiring us to use cash to pay the principal of and interest on our indebtedness, thereby reducing the amount of cash available for other purposes;
|
•
|
limiting our ability to obtain additional financing for working capital, capital expenditures, acquisitions, stock repurchases, dividends or general corporate or other purposes;
|
•
|
limiting our flexibility in planning for, or reacting to, changes in our business, our industry and the market; and
|
•
|
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 or downward pressure on average selling prices;
|
•
|
Certain of our revenues that are derived from products that are sold in foreign currencies could decrease, resulting in lower revenues, cash flows and margins;
|
•
|
Certain of our revenues, such as royalties, that are derived from licensee or customer sales denominated in foreign currencies could decrease, resulting in lower revenues and cash flows;
|
•
|
Our foreign suppliers may raise their prices if they are impacted by currency fluctuations, resulting in higher than expected costs, and lower margins and cash flows;
|
•
|
Certain of our costs that are denominated in foreign currencies could increase, resulting in higher than expected costs and cash outflows; and
|
•
|
Foreign exchange hedging exposes us to counterparty risk and may require the payment of structuring fees. If the foreign exchange hedges do not qualify for hedge accounting, the hedge results may cause earnings volatility. The foreign exchange hedging activities are designed to lessen earnings volatility; therefore, hedges may reduce the impact of currency fluctuations to certain revenues and costs.
|
|
United States
|
|
Other Countries
|
|
Total
|
|||
Owned facilities
|
4.4
|
|
|
0.4
|
|
|
4.8
|
|
Leased facilities
|
0.9
|
|
|
5.3
|
|
|
6.2
|
|
Total
|
5.3
|
|
|
5.7
|
|
|
11.0
|
|
|
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)
|
||||||
July 1, 2019 to July 28, 2019
|
2,368
|
|
|
$
|
76.01
|
|
|
2,368
|
|
|
$
|
7,589
|
|
July 29, 2019 to August 25, 2019
|
2,502
|
|
|
71.94
|
|
|
2,502
|
|
|
7,409
|
|
||
August 26, 2019 to September 29, 2019
|
|
|
|
|
|
|
|
|
|||||
Other repurchases
|
4,489
|
|
|
77.07
|
|
|
4,489
|
|
|
7,063
|
|
||
Accelerated share repurchases (3)
|
68,682
|
|
|
|
|
68,682
|
|
|
7,063
|
|
|||
Total
|
78,041
|
|
|
|
|
|
78,041
|
|
|
|
|
(1)
|
Average Price Paid Per Share excludes cash paid for commissions.
|
(2)
|
On July 26, 2018, we announced a repurchase program authorizing us to repurchase up to $30 billion of our common stock. At September 29, 2019, $7.1 billion remained authorized for repurchase. The stock repurchase program has no expiration date. Since September 29, 2019, we repurchased and retired 3.9 million shares of common stock for $300 million. Shares withheld to satisfy statutory tax withholding requirements related to the vesting of share-based awards are not issued or considered stock repurchases under our stock repurchase program and, therefore, are excluded from the table above.
|
(3)
|
In September 2018, we entered into three accelerated share repurchase agreements (ASR Agreements) to repurchase an aggregate of $16.0 billion of our common stock. During the fourth quarter of fiscal 2018, 178.4 million shares were initially delivered to us under the ASR Agreements and were retired. The ASR Agreements were completed during the fourth quarter of fiscal 2019, and an
|
|
Years Ended (1)
|
||||||||||||||||||
|
September 29, 2019
|
|
September 30, 2018
|
|
September 24, 2017
|
|
September 25, 2016
|
|
September 27, 2015
|
||||||||||
|
(In millions, except per share data)
|
||||||||||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues (2)
|
$
|
24,273
|
|
|
$
|
22,611
|
|
|
$
|
22,258
|
|
|
$
|
23,554
|
|
|
$
|
25,281
|
|
Operating income
|
7,667
|
|
|
621
|
|
|
2,581
|
|
|
6,495
|
|
|
5,776
|
|
|||||
Net income (loss) attributable to Qualcomm (2)
|
4,386
|
|
|
(4,964
|
)
|
|
2,445
|
|
|
5,705
|
|
|
5,271
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Per Share Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic earnings (loss) per share attributable to Qualcomm:
|
3.63
|
|
|
(3.39
|
)
|
|
1.66
|
|
|
3.84
|
|
|
3.26
|
|
|||||
Diluted earnings (loss) per share attributable to Qualcomm:
|
3.59
|
|
|
(3.39
|
)
|
|
1.64
|
|
|
3.81
|
|
|
3.22
|
|
|||||
Dividends per share announced
|
2.48
|
|
|
2.38
|
|
|
2.20
|
|
|
2.02
|
|
|
1.80
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash, cash equivalents and marketable securities (3)
|
$
|
12,296
|
|
|
$
|
12,123
|
|
|
$
|
38,578
|
|
|
$
|
32,350
|
|
|
$
|
30,947
|
|
Total assets (3)
|
32,957
|
|
|
32,718
|
|
|
65,498
|
|
|
52,359
|
|
|
50,796
|
|
|||||
Short-term debt (4)
|
2,496
|
|
|
1,005
|
|
|
2,495
|
|
|
1,749
|
|
|
1,000
|
|
|||||
Long-term debt (5)
|
13,437
|
|
|
15,365
|
|
|
19,398
|
|
|
10,008
|
|
|
9,969
|
|
|||||
Other long-term liabilities (6)
|
4,516
|
|
|
3,537
|
|
|
2,432
|
|
|
895
|
|
|
817
|
|
|||||
Total stockholders’ equity (3)
|
4,909
|
|
|
807
|
|
|
30,725
|
|
|
31,768
|
|
|
31,414
|
|
(1)
|
Our fiscal year ends on the last Sunday in September. The fiscal year ended September 29, 2019, September 24, 2017, September 25, 2016 and September 27, 2015 each included 52 weeks. The fiscal year ended September 30, 2018 included 53 weeks.
|
(2)
|
Revenues in fiscal 2019 included $4.7 billion resulting from the settlement with Apple and its contract manufacturers. Revenues in fiscal 2019 also reflected the impact of the adoption of the new revenue recognition guidance in the first quarter of fiscal 2019. Operating income in fiscal 2019 was impacted by a $275 million charge attributed to a fine imposed by the European Commission (EC) and $213 million in net charges related to our Cost Plan. Additionally, net income for fiscal 2019 was impacted by a $2.5 billion charge to income tax expense resulting from the derecognition of a deferred tax asset related to the distributed intellectual property and a tax benefit of $570 million due to establishing new U.S. net deferred tax assets from making certain check-the-box elections.
|
(3)
|
In the fourth quarter of fiscal 2018, we announced a stock repurchase program authorizing us to repurchase up to $30 billion of our common stock. Under this program, we completed a tender offer and paid an aggregate of $5.1 billion to repurchase shares of our common stock and entered into three accelerated share repurchase agreements to repurchase an aggregate of $16.0 billion of our
|
(4)
|
Short-term debt was comprised of outstanding commercial paper and, in fiscal 2019 and fiscal 2017, the current portion of long-term debt.
|
(5)
|
Long-term debt was comprised of floating- and fixed-rate notes.
|
(6)
|
Other long-term liabilities in this balance sheet data includes non-current income taxes payable and excludes unearned revenues.
|
•
|
From October 2018 through September 2019, approximately 1.4 billion smartphones are estimated to have shipped globally, representing a year-over-year decrease of approximately 4% (IDC, Mobile Phone Tracker, 2019Q3), primarily driven by further lengthening of replacement cycles, particularly in developed regions and China where consumer demand is increasingly driven by new product launches and/or innovation cycles as the industry transitions to 5G.
|
•
|
QCT results in fiscal 2019 were negatively impacted by lower modem sales to Apple.
|
•
|
In April 2019, we entered into settlement agreements with Apple and its contract manufacturers to dismiss all outstanding litigation between the parties. We also entered into a six-year global patent license agreement with Apple, effective as of April 1, 2019, which includes an option for Apple to extend for two additional years, and a multi-year chipset supply agreement with Apple. In the third quarter of fiscal 2019, we recognized licensing revenues of $4.7 billion resulting from the settlement, consisting of a payment from Apple and the release of certain of our obligations to pay Apple and its contract manufacturers customer-related liabilities. In addition, our QTL results for the third and fourth quarters of fiscal 2019 included royalties from Apple and its contract manufacturers for sales made in such quarters.
|
•
|
QTL results in fiscal 2019 reflected certain reductions made in the per unit royalty caps (which provide a maximum royalty amount payable per device) in fiscal 2019 and 2018. While we expect these changes to enhance stability for the long term, they negatively impacted QTL royalty revenues in fiscal 2019. In addition, an increasing number of new and existing licensees have elected to enter into worldwide license agreements covering only our cellular standard essential patents, resulting in lower QTL royalty revenues in fiscal 2019.
|
•
|
QTL revenues in fiscal 2019 included $450 million paid under a second interim agreement with Huawei that concluded in the third quarter of fiscal 2019, and although negotiations continue, we have not reached a final agreement with Huawei. This represents a minimum, non-refundable amount for royalties due and does not reflect the full amount of royalties due under the underlying license agreement. We did not record any revenues in the fourth quarter of fiscal 2019 for royalties due on the sales of Huawei’s products.
|
•
|
In May 2019, in United States Federal Trade Commission (FTC) v. QUALCOMM Incorporated, the court issued an Order ruling against us and imposing certain injunctive relief. We disagree with the court’s conclusions, interpretation of the facts and application of the law. Accordingly, we filed a motion to stay certain of the remedies with, and have appealed the decision to, the Ninth Circuit Court of Appeals (Ninth Circuit). In August 2019, our partial motion to stay was granted in its entirety by the Ninth Circuit. The impact of the Order and the Ninth Circuit granting our motion for partial stay did not have a material impact to QTL licensing revenues recognized in fiscal 2019 based on facts and factors currently known by us.
|
•
|
In July 2019, the European Commission (EC) issued a decision ruling that between 2009 and 2011 we engaged in predatory pricing with respect to two customers and imposed a fine (2019 EC fine) of approximately 242 million Euros, which resulted in a $275 million charge to other expenses in the third quarter of fiscal 2019. In October 2019, we filed an appeal of the EC’s decision, and we provided a financial guarantee to satisfy the obligation in lieu of a cash payment while we appeal the EC’s decision.
|
•
|
In the second quarter of fiscal 2018, we announced a Cost Plan designed to align our cost structure to our long-term margin targets. As part of this plan, we initiated a series of targeted actions across our businesses with the objective to reduce annual costs by $1 billion, excluding incremental costs resulting from any future acquisition of a business. Actions taken under this plan have been completed and resulted in us achieving substantially all of this target in fiscal
|
•
|
Beginning in fiscal 2019, certain provisions of the 2017 U.S. Tax Cuts and Jobs Act (the Tax Legislation) became effective, including new taxes on certain foreign income. Our estimated annual effective tax rate for fiscal 2019 reflected the effects of these provisions of the Tax Legislation, and it also included the effects of tax elections made by several of our foreign subsidiaries in the first quarter of fiscal 2019 to be treated as U.S. branches for federal income tax purposes effective beginning in fiscal 2018 and 2019, which resulted in an income tax benefit of $570 million recorded discretely in the first quarter of fiscal 2019.
|
•
|
During the third quarter of fiscal 2019, the United States Treasury Department issued new temporary regulations that resulted in a change to the deductibility of dividend income received by a U.S. stockholder from a foreign corporation. As a result of this change, pursuant to an agreement with the Internal Revenue Service, we relinquished the federal tax basis step-up of intellectual property that was distributed in fiscal 2018 by one of our foreign subsidiaries to a U.S. subsidiary. Therefore, the related deferred tax asset was derecognized, resulting in a $2.5 billion charge to income tax expense in the third quarter of fiscal 2019.
|
Revenues (in millions)
|
|
|
|
|
|
||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019 vs. 2018 Change
|
|
2018 vs. 2017 Change
|
||||||||||
Equipment and services
|
$
|
14,611
|
|
|
$
|
17,400
|
|
|
$
|
16,647
|
|
|
$
|
(2,789
|
)
|
|
$
|
753
|
|
Licensing
|
9,662
|
|
|
5,211
|
|
|
5,611
|
|
|
4,451
|
|
|
(400
|
)
|
|||||
|
$
|
24,273
|
|
|
$
|
22,611
|
|
|
$
|
22,258
|
|
|
$
|
1,662
|
|
|
$
|
353
|
|
+
|
$4.7 billion in licensing revenues recorded in the third quarter of fiscal 2019 resulting from the settlement with Apple and its contract manufacturers (which were not allocated to our segment results)
|
-
|
$2.7 billion in lower equipment and services revenues from our QCT segment
|
-
|
$451 million in lower licensing revenues from our QTL segment
|
+
|
$962 million reduction to licensing revenues recorded in fiscal 2017 related to the BlackBerry arbitration (which was not allocated to our segment results)
|
+
|
$745 million in higher equipment and services revenues from our QCT segment
|
-
|
$1.4 billion in lower licensing revenues from our QTL segment
|
-
|
$100 million reduction to licensing revenues recorded in fiscal 2018 related to a portion of a business arrangement that resolved a legal dispute (which was not allocated to our segment results)
|
Costs and Expenses (in millions, except percentages)
|
|
|
|
|
|||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019 vs. 2018 Change
|
|
2018 vs. 2017 Change
|
||||||||||
Cost of revenues
|
$
|
8,599
|
|
|
$
|
10,244
|
|
|
$
|
9,792
|
|
|
$
|
(1,645
|
)
|
|
$
|
452
|
|
Gross margin
|
65
|
%
|
|
55
|
%
|
|
56
|
%
|
|
|
|
|
+
|
higher licensing revenues resulting from the settlement with Apple and its contract manufacturers in fiscal 2019
|
-
|
decrease in higher margin QTL licensing revenues as a proportion of total revenues
|
-
|
reduction to licensing revenues recorded in fiscal 2018 related to a portion of a business arrangement that resolved a legal dispute
|
+
|
reduction to licensing revenues recorded in fiscal 2017 related to the BlackBerry arbitration
|
|
2019
|
|
2018
|
|
2017
|
|
2019 vs. 2018 Change
|
|
2018 vs. 2017 Change
|
||||||||||
Research and development
|
$
|
5,398
|
|
|
$
|
5,625
|
|
|
$
|
5,485
|
|
|
$
|
(227
|
)
|
|
$
|
140
|
|
% of revenues
|
22
|
%
|
|
25
|
%
|
|
25
|
%
|
|
|
|
|
-
|
$221 million decrease primarily driven by actions taken under our Cost Plan, partially offset by higher share-based compensation expense and higher employee cash incentive programs
|
+
|
$168 million, net of cost decreases driven by actions taken under our Cost Plan, in higher costs related to the development of wireless and integrated circuit technologies, including 5G technologies and RFFE technologies from the formation of RF360 Holdings in the second quarter of fiscal 2017
|
-
|
$30 million impairment charge on certain intangible assets recorded in fiscal 2017
|
|
2019
|
|
2018
|
|
2017
|
|
2019 vs. 2018 Change
|
|
2018 vs. 2017 Change
|
||||||||||
Selling, general and administrative
|
$
|
2,195
|
|
|
$
|
2,986
|
|
|
$
|
2,658
|
|
|
$
|
(791
|
)
|
|
$
|
328
|
|
% of revenues
|
9
|
%
|
|
13
|
%
|
|
12
|
%
|
|
|
|
|
-
|
$287 million in lower professional fees and costs, primarily driven by Broadcom’s withdrawn takeover proposal in fiscal 2018 and our then proposed acquisition of NXP Semiconductors N.V. (NXP) in fiscal 2018
|
-
|
$235 million in lower litigation costs, primarily resulting from the settlement of our prior dispute with Apple and its contract manufacturers and the end of the District Court trial in the lawsuit filed against us by the FTC
|
-
|
$162 million in lower employee-related expenses, primarily driven by actions taken under our Cost Plan
|
-
|
$75 million in lower sales and marketing expenses, primarily driven by actions taken under our Cost Plan
|
+
|
$325 million in higher litigation costs, with total litigation costs of $554 million and $229 million in fiscal 2018 and fiscal 2017, respectively
|
+
|
$45 million in bad debt expense recorded in fiscal 2018
|
+
|
$42 million in higher professional fees and costs related to other legal matters, which was primarily driven by Broadcom’s withdrawn takeover proposal, partially offset by lower third-party acquisition and integration services fees
|
-
|
$40 million in lower amortization expense, primarily from the formation of RF360 Holdings
|
-
|
$37 million in lower share-based compensation expense, primarily due to actions taken under our Cost Plan
|
|
2019
|
|
2018
|
|
2017
|
|
2019 vs. 2018 Change
|
|
2018 vs. 2017 Change
|
||||||||||
Other
|
$
|
414
|
|
|
$
|
3,135
|
|
|
$
|
1,742
|
|
|
$
|
(2,721
|
)
|
|
$
|
1,393
|
|
+
|
$213 million net charges related to our Cost Plan
|
-
|
$43 million gain due to the partial recovery of a fine imposed in fiscal 2009 resulting from our appeal of the Korea Fair Trade Commission (KFTC) decision
|
-
|
$31 million gain related to a favorable legal settlement
|
-
|
$676 million benefit related to the settlement of the Taiwan Fair Trade Commission (TFTC) investigation
|
+
|
$927 million charge related to the KFTC fine, including related foreign currency losses
|
|
2019
|
|
2018
|
|
2017
|
||||||
Expected income tax provision at federal statutory tax rate
|
$
|
1,571
|
|
|
$
|
97
|
|
|
$
|
1,045
|
|
State income tax provision, net of federal benefit
|
10
|
|
|
2
|
|
|
8
|
|
|||
Derecognition of deferred tax asset on distributed intellectual property
|
2,472
|
|
|
—
|
|
|
—
|
|
|||
Benefits from establishing new U.S. net deferred tax assets
|
(570
|
)
|
|
—
|
|
|
—
|
|
|||
Benefits from foreign-derived intangible income (FDII) deduction
|
(419
|
)
|
|
—
|
|
|
—
|
|
|||
Benefits related to the research and development tax credit
|
(110
|
)
|
|
(136
|
)
|
|
(81
|
)
|
|||
Benefits from foreign income taxed at other than U.S. rates
|
(54
|
)
|
|
(834
|
)
|
|
(963
|
)
|
|||
Nondeductible charges (reversals) related to the EC, KFTC and TFTC investigations
|
51
|
|
|
(119
|
)
|
|
363
|
|
|||
Impact of changes in tax reserves and audit settlements for prior year tax positions
|
20
|
|
|
—
|
|
|
111
|
|
|||
Taxes on undistributed foreign earnings
|
8
|
|
|
87
|
|
|
—
|
|
|||
Toll Charge from U.S. tax reform
|
—
|
|
|
5,236
|
|
|
—
|
|
|||
Valuation allowance on deferred tax asset related to NXP termination fee
|
—
|
|
|
494
|
|
|
—
|
|
|||
Remeasurement of deferred taxes due to changes in statutory rate due to U.S. tax reform
|
—
|
|
|
443
|
|
|
—
|
|
|||
Other
|
116
|
|
|
86
|
|
|
60
|
|
|||
Income tax expense
|
$
|
3,095
|
|
|
$
|
5,356
|
|
|
$
|
543
|
|
|
2019
|
|
2018
|
|
2017
|
|
2019 vs. 2018 Change
|
|
2018 vs. 2017 Change
|
||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
||||||||||
Equipment and services
|
$
|
14,318
|
|
|
$
|
17,060
|
|
|
$
|
16,315
|
|
|
$
|
(2,742
|
)
|
|
$
|
745
|
|
Licensing
|
321
|
|
|
222
|
|
|
164
|
|
|
99
|
|
|
58
|
|
|||||
Total revenues
|
$
|
14,639
|
|
|
$
|
17,282
|
|
|
$
|
16,479
|
|
|
$
|
(2,643
|
)
|
|
$
|
803
|
|
EBT (1)
|
$
|
2,143
|
|
|
$
|
2,966
|
|
|
$
|
2,747
|
|
|
$
|
(823
|
)
|
|
$
|
219
|
|
EBT as a % of revenues
|
15
|
%
|
|
17
|
%
|
|
17
|
%
|
|
(2
|
%)
|
|
—
|
%
|
(1)
|
Earnings (loss) before taxes.
|
-
|
$2.7 billion in lower MSM and accompanying unit shipments, primarily driven by lower modem sales to Apple and a decline in demand from OEMs in China
|
-
|
$515 million in lower connectivity product revenues, primarily driven by a decline in demand for Wi-Fi and Bluetooth products from OEMs in China
|
+
|
$552 million in higher revenues per MSM and accompanying unit shipment, primarily driven by a favorable shift in mix related to our premium-tier products
|
-
|
lower QCT revenues
|
+
|
decrease in operating expenses, primarily driven by a decrease in the amount of research and development expense allocated to QCT in fiscal 2019 and actions under our Cost Plan
|
+
|
$825 million in higher RFFE product revenues primarily related to revenues from RF360 Holdings, which was formed in the second quarter of fiscal 2017, and reflected the impact of eliminating a one-month reporting lag in fiscal 2018
|
+
|
$737 million in higher MSM and accompanying unit shipments primarily driven by higher demand from OEMs in China, partially offset by a decline in share at Apple
|
-
|
$719 million decrease due to lower average selling prices and unfavorable product mix
|
-
|
$83 million in lower connectivity product revenues
|
|
2019
|
|
2018
|
|
2017
|
|
2019 vs. 2018 Change
|
|
2018 vs. 2017 Change
|
||||||||||
Licensing revenues
|
$
|
4,591
|
|
|
$
|
5,042
|
|
|
$
|
6,412
|
|
|
$
|
(451
|
)
|
|
$
|
(1,370
|
)
|
EBT
|
$
|
2,954
|
|
|
$
|
3,404
|
|
|
$
|
5,142
|
|
|
$
|
(450
|
)
|
|
$
|
(1,738
|
)
|
EBT as a % of revenues
|
64
|
%
|
|
68
|
%
|
|
80
|
%
|
|
(4
|
%)
|
|
(12
|
%)
|
-
|
$757 million in lower estimated revenues per unit compared to revenues per reported unit, in part reflecting licensees entering into new 5G multimode license agreements with rights to our cellular standard-essential patents only (compared to previous licenses which also included rights to certain other non-cellular essential patents), and decreases in our per unit royalty caps
|
-
|
$150 million in lower royalty revenues from Huawei under the interim agreements
|
+
|
$484 million increase in estimated sales of 3G/4G/5G-based products (including multimode products) compared to reported sales of 3G/4G-based products, primarily due to the new license agreement with Apple, partially offset by a decline in unit demand and a shift in OEM share towards Huawei
|
-
|
higher research and development costs due to an increase in the amount of research and development expense allocated to QTL in fiscal 2019
|
-
|
lower QTL revenues
|
+
|
lower selling, general and administrative expenses, primarily from lower litigation costs and lower bad debt expense
|
-
|
$177 million in lower royalty revenues recognized related to devices sold in prior periods from certain other licensees
|
-
|
higher selling, general and administrative expenses resulting primarily from higher litigation costs
|
-
|
lower QTL revenues
|
|
2019
|
|
2018
|
|
2017
|
|
2019 vs. 2018 Change
|
|
2018 vs. 2017 Change
|
||||||||||
Equipment and services revenues
|
$
|
152
|
|
|
$
|
100
|
|
|
$
|
113
|
|
|
$
|
52
|
|
|
$
|
(13
|
)
|
EBT
|
$
|
344
|
|
|
$
|
24
|
|
|
$
|
65
|
|
|
$
|
320
|
|
|
$
|
(41
|
)
|
+
|
$270 million increase in net gains on investments, primarily driven by gains resulting from the initial public offering of certain non-marketable equity investments
|
+
|
$91 million increase resulting from higher revenues and lower costs associated with certain development contracts with an equity method investee
|
-
|
$41 million increase in impairment losses on investments, primarily related to an equity method investee
|
-
|
$14 million decrease in net gains on investments
|
-
|
$14 million increase in our share of losses in equity method investments
|
-
|
$13 million decrease resulting from lower revenues from certain development contracts with one of our equity method investees
|
•
|
In May 2019, in United States Federal Trade Commission (FTC) v. QUALCOMM Incorporated, the court issued an Order ruling against us and imposing certain injunctive relief. We disagree with the court’s conclusions, interpretation of the facts and application of the law. Accordingly, we filed a motion to stay certain of the remedies with, and have appealed the decision to, the Ninth Circuit Court of Appeals (Ninth Circuit). In August 2019, our partial motion to stay was granted in its entirety by the Ninth Circuit. Regulatory authorities in certain jurisdictions have investigated our business practices and instituted proceedings against us, and they or other regulatory authorities may do so in the future. Additionally, certain of our direct and indirect customers and licensees have pursued, and others may in the future pursue, litigation or arbitration against us related to our business. Unfavorable resolutions of one or more of these matters have had and could in the future have a material adverse effect on our business, revenues, results of operations, financial condition and cash flows. Depending on the matter, various remedies that could result from an unfavorable resolution include, among others, the loss of our ability to enforce one or more of our patents; injunctions; monetary damages or fines or other orders to pay money; the issuance of orders to cease certain conduct or modify our business practices, such as requiring us to reduce our royalty rates, reduce the base on which our royalties are calculated, grant patent licenses to chipset manufacturers, sell chipsets to unlicensed OEMs or modify or renegotiate some or all of our existing license agreements; and determinations that some or all of our license agreements are invalid or unenforceable. These activities have required, and we expect that they will continue to require, the investment of significant management time and attention and have resulted, and we expect that they will continue to result, in increased legal costs until the respective matters are resolved. See “Notes to Consolidated Financial Statements, Note 7. Commitments and Contingencies” and “Part I, Item 1A. Risk Factors” included in this Annual Report, including the Risk Factors entitled “Efforts by some communications equipment manufacturers or their customers to avoid paying fair and reasonable royalties for the use of our intellectual property may require the investment of substantial management time and financial resources and may result in legal decisions or actions by governments, courts, regulators or agencies, Standards Development Organizations (SDOs) or other industry organizations that harm our business,” “Our business, particularly our licensing business, may suffer as a result of adverse rulings in government investigations or proceedings” and “Changes in our patent licensing practices, whether due to governmental investigations or private legal proceedings challenging those practices, or otherwise, could adversely impact our business and results of operations.”
|
•
|
In fiscal 2019, we entered into a second interim agreement with Huawei under which we recognized $450 million of royalty revenues in fiscal 2019. These payments do not reflect the full amount of royalties due under the underlying license agreement. The second interim agreement concluded in the third quarter of fiscal 2019, and although negotiations continue, we have not reached a final agreement with Huawei. We did not record any revenues in the fourth quarter of fiscal 2019 for royalties due on the sales of Huawei’s products. If no agreement is reached, Huawei may not make any other payments or may not make full payments due under the underlying license agreement, which may result in significant legal costs and will negatively impact our future revenues, as well as our financial condition, results of operations and cash flows, until the dispute is resolved.
|
•
|
We expect our business, particularly QCT, to continue to be impacted by industry dynamics, including:
|
•
|
Increased concentration of device share among a few companies, particularly within the premium tier, resulting in significant supply chain leverage for those companies, and exacerbating the negative impact to our business and financial results to the extent those companies do not utilize our chipsets. For example, Huawei has taken, and we believe will continue to take, share in China from other Chinese OEMs, negatively impacting QCT as we sell a limited number of chipsets to Huawei as compared to many of those other OEMs, and the negative impact to our overall business of Huawei share gains at the expense of other Chinese OEMs may be further exacerbated if Huawei continues to not pay us royalties or does not make full payment due to us under its license agreement;
|
•
|
Decisions by companies to utilize their own internally-developed integrated circuit products and/or sell such products to others, including by selling them together with certain of their other products;
|
•
|
Decisions by certain companies to utilize our competitors’ integrated circuit products in all or a portion of their devices. For example, we have not been the sole supplier of modems for iPhone products beginning
|
•
|
Intense competition, particularly in China, as our competitors expand their product offerings and/or reduce the prices of their products as part of a strategy to attract new and/or retain existing customers;
|
•
|
Slow-down in handset demand as the industry transitions from 4G to 5G and continued reduction in demand in developed regions and China;
|
•
|
Lengthened handset replacement cycles and consumer demand, which is increasingly driven by new product launches and/or innovation cycles; and
|
•
|
Continued growth of device share by Chinese OEMs in China and in regions outside of China.
|
•
|
Current U.S./China trade relations and/or national security protection policies may negatively impact our business, growth prospects and results of operations.
|
•
|
Initial commercial 5G network deployments and device launches have begun and will continue into fiscal 2020 and beyond. We believe that 5G technologies will empower a new era of smartphones and connected devices. We also believe that 5G will drive transformation across industries beyond traditional cellular communications that will create new business models and new services. We believe it is important that we remain a leader in 5G technology development, standardization, intellectual property creation and licensing of 5G technologies, and to be a leading developer and supplier of 5G integrated circuit products in order to sustain and grow our business long term.
|
•
|
We continue to invest significant resources to develop our wireless baseband chipsets, and our converged computing/communications (Snapdragon) chipsets, which incorporate technologies in the following areas, among others: advancements in 4G and 5G, OFDM-based Wi-Fi, RF, connectivity, power management, graphics, audio and video codecs, multimedia, artificial intelligence and virtual/augmented reality, and all of which contribute to the expansion of our intellectual property portfolio. We are also investing in targeted opportunities that leverage our existing technical and business expertise to deploy new business models and enter and/or expand into new industry segments and applications, such as products for automotive, computing, IoT (including the connected home, smart cities, wearables, voice and music and robotics) and networking, among others.
|
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|||||||
Cash, cash equivalents and marketable securities
|
$
|
12,296
|
|
|
$
|
12,123
|
|
|
$
|
173
|
|
|
1
|
%
|
Accounts receivable, net
|
2,471
|
|
|
2,904
|
|
|
(433
|
)
|
|
(15
|
%)
|
|||
Inventories
|
1,400
|
|
|
1,693
|
|
|
(293
|
)
|
|
(17
|
%)
|
|||
Short-term debt
|
2,496
|
|
|
1,005
|
|
|
1,491
|
|
|
148
|
%
|
|||
Long-term debt
|
13,437
|
|
|
15,365
|
|
|
(1,928
|
)
|
|
(13
|
%)
|
|||
Net cash provided by operating activities
|
7,286
|
|
|
3,908
|
|
|
3,378
|
|
|
86
|
%
|
|||
Net cash (used) provided by investing activities
|
(806
|
)
|
|
2,381
|
|
|
(3,187
|
)
|
|
(134
|
%)
|
|||
Net cash used by financing activities
|
(6,386
|
)
|
|
(31,500
|
)
|
|
25,114
|
|
|
(80
|
%)
|
|
|
Stock Repurchase Program
|
|
Dividends
|
|
Total
|
|||||||||||||||||
|
|
Shares
|
|
Average Price Paid Per Share (1)
|
|
Amount
|
|
Per Share
|
|
Amount
|
|
Amount
|
|||||||||||
2019
|
|
95.8
|
|
|
$
|
66.18
|
|
|
$
|
1,793
|
|
|
$
|
2.48
|
|
|
$
|
2,968
|
|
|
$
|
4,761
|
|
2018
|
|
278.8
|
|
|
65.41
|
|
|
22,569
|
|
|
2.38
|
|
|
3,466
|
|
|
26,035
|
|
|||||
2017
|
|
22.8
|
|
|
58.87
|
|
|
1,342
|
|
|
2.20
|
|
|
3,252
|
|
|
4,594
|
|
(1)
|
Average Price Paid Per Share in fiscal 2018 and 2019 excludes the impact of the three accelerated share repurchase agreements (the ASR Agreements) executed in September 2018 and completed in September 2019. The average price per share under the ASR Agreements was $64.76.
|
•
|
Our purchase obligations at September 29, 2019, some of which relate to research and development activities and capital expenditures, totaled $2.9 billion and $286 million for fiscal 2020 and 2021, respectively, and $178 million thereafter.
|
•
|
Our research and development expenditures were $5.4 billion in fiscal 2019 and $5.6 billion in fiscal 2018, and we expect to continue to invest heavily in research and development for new technologies, applications and services for voice and data communications.
|
•
|
Cash outflows for capital expenditures were $887 million in fiscal 2019 and $784 million in fiscal 2018. We expect to continue to incur capital expenditures in the future to support our business, including research and development activities.
|
•
|
At September 29, 2019, $1.4 billion was accrued related to two fines imposed by the EC (based on the exchange rate at September 29, 2019, including related foreign currency gains and accrued interest). We have provided financial guarantees in lieu of cash payment to satisfy the obligations while we appeal the EU’s decisions.
|
•
|
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.
|
|
Total
|
|
2020
|
|
2021-2022
|
|
2023-2024
|
|
Beyond
2024
|
|
No
Expiration
Date
|
||||||||||||
Purchase obligations (1)
|
$
|
3,390
|
|
|
$
|
2,926
|
|
|
$
|
394
|
|
|
$
|
69
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Operating lease obligations
|
385
|
|
|
138
|
|
|
163
|
|
|
49
|
|
|
35
|
|
|
—
|
|
||||||
Capital lease obligations (2)
|
28
|
|
|
17
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Equity funding and financing commitments (3)
|
154
|
|
|
5
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
147
|
|
||||||
Long-term debt (4)
|
15,500
|
|
|
2,000
|
|
|
2,000
|
|
|
3,500
|
|
|
8,000
|
|
|
—
|
|
||||||
Other long-term liabilities (5)(6)
|
2,974
|
|
|
250
|
|
|
453
|
|
|
574
|
|
|
1,136
|
|
|
561
|
|
||||||
Total contractual obligations
|
$
|
22,431
|
|
|
$
|
5,336
|
|
|
$
|
3,022
|
|
|
$
|
4,193
|
|
|
$
|
9,172
|
|
|
$
|
708
|
|
(1)
|
Purchase obligations primarily relate to integrated circuit product inventory obligations, which represent purchase commitments for raw materials, semiconductor die, finished goods and manufacturing services, such as wafer bump, probe, assembly and final test. Under our manufacturing relationships with our foundry suppliers and assembly and test service providers, cancelation of outstanding purchase commitments is generally allowed but requires payment of costs incurred through the date of cancelation, and in some cases, incremental fees related to capacity underutilization.
|
(2)
|
Amounts represent future minimum lease payments including interest payments. Capital lease obligations were included in other current liabilities and other noncurrent liabilities in the consolidated balance sheet at September 29, 2019.
|
(3)
|
Certain of these commitments do not have fixed funding dates and are subject to certain conditions and have, therefore, been presented as having no expiration date. Commitments represent the maximum amounts to be funded under these arrangements; actual funding may be in lesser amounts or not at all.
|
(4)
|
The amounts noted herein represent contractual payments of principal only.
|
(5)
|
Certain long-term liabilities reflected on our balance sheet, such as unearned revenues, are not presented in this table because they do not require cash settlement in the future. Other long-term liabilities as presented in this table include the related current portions, as applicable.
|
(6)
|
Our consolidated balance sheet at September 29, 2019 included $1.6 billion in other noncurrent liabilities for uncertain tax positions, which primarily relate to a reduction of U.S. foreign tax credits that will occur if we are successful in our claim for a refund of Korean withholding tax (for which a $1.4 billion receivable was recorded at September 29, 2019). The majority of this liability will be payable when we receive the Korean tax refund, with the remainder payable over periods up to and including the last payment of the Toll Charge in January 2026. The future payments related to uncertain tax positions recorded as other noncurrent liabilities have not been presented in the table above due to the uncertainty of the amounts and timing of cash settlement with the taxing authorities.
|
i.
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
|
ii.
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
|
iii.
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the consolidated financial statements.
|
|
|
Page
|
|
|
|
|
Number
|
|
|
(1) Report of Independent Registered Public Accounting Firm
|
|
F-1
|
|
|
Consolidated Balance Sheets at September 29, 2019 and September 30, 2018
|
|
F-5
|
|
|
Consolidated Statements of Operations for Fiscal 2019, 2018 and 2017
|
|
F-6
|
|
|
Consolidated Statements of Comprehensive Income (Loss) for Fiscal 2019, 2018 and 2017
|
|
F-7
|
|
|
Consolidated Statements of Cash Flows for Fiscal 2019, 2018 and 2017
|
|
F-8
|
|
|
Consolidated Statements of Stockholders’ Equity for Fiscal 2019, 2018 and 2017
|
|
F-9
|
|
|
Notes to Consolidated Financial Statements
|
|
F-10
|
|
|
(2) Schedule II - Valuation and Qualifying Accounts for Fiscal 2019, 2018 and 2017
|
|
S-1
|
|
Exhibit
Number
|
|
Exhibit Description
|
|
Form
|
|
|
|
Date of First Filing
|
|
Exhibit Number
|
|
Filed Herewith
|
2.1
|
|
|
8-K
|
|
|
|
1/13/2016
|
|
2.1
|
|
|
|
2.2
|
|
|
10-Q
|
|
|
|
1/25/2017
|
|
2.3
|
|
|
|
2.3
|
|
|
10-Q
|
|
|
|
1/25/2017
|
|
2.4
|
|
|
|
2.4
|
|
|
10-Q
|
|
|
|
4/19/2017
|
|
2.6
|
|
|
|
3.1
|
|
|
8-K
|
|
|
|
4/20/2018
|
|
3.1
|
|
|
|
3.2
|
|
|
8-K
|
|
|
|
7/17/2018
|
|
3.1
|
|
|
|
4.1
|
|
|
8-K
|
|
|
|
5/21/2015
|
|
4.1
|
|
|
|
4.2
|
|
|
8-K
|
|
|
|
5/21/2015
|
|
4.2
|
|
|
|
4.3
|
|
|
8-K
|
|
|
|
5/21/2015
|
|
4.4
|
|
|
|
4.4
|
|
|
8-K
|
|
|
|
5/21/2015
|
|
4.6
|
|
|
|
4.5
|
|
|
8-K
|
|
|
|
5/21/2015
|
|
4.7
|
|
|
|
4.6
|
|
|
8-K
|
|
|
|
5/21/2015
|
|
4.8
|
|
|
|
4.7
|
|
|
8-K
|
|
|
|
5/21/2015
|
|
4.9
|
|
|
|
4.8
|
|
|
8-K
|
|
|
|
5/21/2015
|
|
4.10
|
|
|
|
4.9
|
|
|
8-K
|
|
|
|
5/31/2017
|
|
4.2
|
|
|
|
4.10
|
|
|
8-K
|
|
|
|
5/31/2017
|
|
4.5
|
|
|
|
4.11
|
|
|
8-K
|
|
|
|
5/31/2017
|
|
4.8
|
|
|
|
4.12
|
|
|
8-K
|
|
|
|
5/31/2017
|
|
4.9
|
|
|
|
4.13
|
|
|
8-K
|
|
|
|
5/31/2017
|
|
4.10
|
|
|
Exhibit
Number
|
|
Exhibit Description
|
|
Form
|
|
|
|
Date of First Filing
|
|
Exhibit Number
|
|
Filed Herewith
|
4.14
|
|
|
8-K
|
|
|
|
5/31/2017
|
|
4.11
|
|
|
|
4.15
|
|
|
|
|
|
|
|
|
|
|
X
|
|
10.1
|
|
|
10-K
|
|
|
|
11/4/2015
|
|
10.1
|
|
|
|
10.2
|
|
|
10-K
|
|
|
|
11/5/2009
|
|
10.84
|
|
|
|
10.3
|
|
|
10-K
|
|
|
|
11/7/2012
|
|
10.105
|
|
|
|
10.4
|
|
|
10-Q
|
|
|
|
4/24/2013
|
|
10.112
|
|
|
|
10.5
|
|
|
10-K
|
|
|
|
11/6/2013
|
|
10.119
|
|
|
|
10.6
|
|
|
10-Q
|
|
|
|
1/28/2015
|
|
10.126
|
|
|
|
10.7
|
|
|
DEF 14A
|
|
|
|
1/21/2016
|
|
Appendix 5
|
|
|
|
10.8
|
|
|
10-Q
|
|
|
|
4/20/2016
|
|
10.32
|
|
|
|
10.9
|
|
|
10-Q
|
|
|
|
4/20/2016
|
|
10.33
|
|
|
|
10.10
|
|
|
10-Q
|
|
|
|
4/20/2016
|
|
10.34
|
|
|
|
10.11
|
|
|
10-K
|
|
|
|
11/2/2016
|
|
10.36
|
|
|
|
10.12
|
|
|
10-K
|
|
|
|
11/2/2016
|
|
10.37
|
|
|
|
10.13
|
|
|
8-K
|
|
|
|
11/9/2016
|
|
10.2
|
|
|
|
10.14
|
|
|
10-K
|
|
|
|
11/1/2017
|
|
10.40
|
|
|
|
10.15
|
|
|
8-K
|
|
|
|
12/22/2017
|
|
10.2
|
|
|
|
10.16
|
|
|
10-Q
|
|
|
|
1/31/2018
|
|
10.42
|
|
|
Exhibit
Number
|
|
Exhibit Description
|
|
Form
|
|
|
|
Date of First Filing
|
|
Exhibit Number
|
|
Filed Herewith
|
10.17
|
|
|
10-Q
|
|
|
|
4/25/2018
|
|
10.58
|
|
|
|
10.18
|
|
|
10-Q
|
|
|
|
4/25/2018
|
|
10.59
|
|
|
|
10.19
|
|
|
10-Q
|
|
|
|
4/25/2018
|
|
10.60
|
|
|
|
10.20
|
|
|
10-Q
|
|
|
|
4/25/2018
|
|
10.62
|
|
|
|
10.21
|
|
|
8-K
|
|
|
|
5/25/2018
|
|
10.1
|
|
|
|
10.22
|
|
|
|
8-K
|
|
|
|
9/21/2018
|
|
10.1
|
|
|
10.23
|
|
|
10-K
|
|
|
|
11/7/2018
|
|
10.58
|
|
|
|
10.24
|
|
|
10-K
|
|
|
|
11/7/2018
|
|
10.59
|
|
|
|
10.25
|
|
|
|
10-K
|
|
|
|
11/7/2018
|
|
10.60
|
|
|
10.26
|
|
|
10-K
|
|
|
|
11/7/2018
|
|
10.61
|
|
|
|
10.27
|
|
|
10-Q
|
|
|
|
1/30/2019
|
|
10.62
|
|
|
|
10.28
|
|
|
10-Q
|
|
|
|
5/1/2019
|
|
10.7
|
|
|
|
10.29
|
|
|
|
|
|
|
|
|
|
|
X
|
|
10.30
|
|
|
|
|
|
|
|
|
|
|
X
|
|
21
|
|
|
|
|
|
|
|
|
|
|
X
|
|
23.1
|
|
|
|
|
|
|
|
|
|
|
X
|
|
31.1
|
|
|
|
|
|
|
|
|
|
|
X
|
|
31.2
|
|
|
|
|
|
|
|
|
|
|
X
|
|
32.1
|
|
|
|
|
|
|
|
|
|
|
X
|
Exhibit
Number
|
|
Exhibit Description
|
|
Form
|
|
|
|
Date of First Filing
|
|
Exhibit Number
|
|
Filed Herewith
|
32.2
|
|
|
|
|
|
|
|
|
|
|
X
|
|
101.INS
|
|
Inline XBRL Instance Document.
|
|
|
|
|
|
|
|
|
|
X
|
101.SCH
|
|
Inline XBRL Taxonomy Extension Schema.
|
|
|
|
|
|
|
|
|
|
X
|
101.CAL
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase.
|
|
|
|
|
|
|
|
|
|
X
|
101.LAB
|
|
Inline XBRL Taxonomy Extension Labels Linkbase.
|
|
|
|
|
|
|
|
|
|
X
|
101.PRE
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase.
|
|
|
|
|
|
|
|
|
|
X
|
101.DEF
|
|
Inline XBRL Taxonomy Extension Definition Linkbase.
|
|
|
|
|
|
|
|
|
|
X
|
104
|
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
|
|
|
|
|
|
|
|
|
|
|
(1)
|
We shall furnish supplementally a copy of any omitted schedule to the Commission upon request.
|
(2)
|
Indicates management contract or compensatory plan or arrangement required to be identified pursuant to Item 15(a).
|
|
|
|
|
|
QUALCOMM Incorporated
|
||
|
|
|
|
|
By
|
/s/ Steve Mollenkopf
|
|
|
|
Steve Mollenkopf
|
|
|
|
Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Steve Mollenkopf
|
|
Chief Executive Officer and Director
|
|
November 6, 2019
|
Steve Mollenkopf
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Akash Palkhiwala
|
|
Executive Vice President and Chief Financial Officer
|
|
November 6, 2019
|
Akash Palkhiwala
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
/s/ Erin Polek
|
|
Senior Vice President and Chief Accounting Officer
|
|
November 6, 2019
|
Erin Polek
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ Barbara T. Alexander
|
|
Director
|
|
November 6, 2019
|
Barbara T. Alexander
|
|
|
|
|
|
|
|
|
|
/s/ Mark Fields
|
|
Director
|
|
November 6, 2019
|
Mark Fields
|
|
|
|
|
|
|
|
|
|
/s/ Jeffrey W. Henderson
|
|
Director
|
|
November 6, 2019
|
Jeffrey W. Henderson
|
|
|
|
|
|
|
|
|
|
/s/ Ann M. Livermore
|
|
Director
|
|
November 6, 2019
|
Ann M. Livermore
|
|
|
|
|
|
|
|
|
|
/s/ Harish Manwani
|
|
Director
|
|
November 6, 2019
|
Harish Manwani
|
|
|
|
|
|
|
|
|
|
/s/ Mark D. McLaughlin
|
|
Chairman
|
|
November 6, 2019
|
Mark D. McLaughlin
|
|
|
|
|
|
|
|
|
|
/s/ Clark T. Randt, Jr.
|
|
Director
|
|
November 6, 2019
|
Clark T. Randt, Jr.
|
|
|
|
|
|
|
|
|
|
/s/ Francisco Ros
|
|
Director
|
|
November 6, 2019
|
Francisco Ros
|
|
|
|
|
|
|
|
|
|
/s/ Irene B. Rosenfeld
|
|
Director
|
|
November 6, 2019
|
Irene B. Rosenfeld
|
|
|
|
|
|
|
|
|
|
/s/ Neil Smit
|
|
Director
|
|
November 6, 2019
|
Neil Smit
|
|
|
|
|
|
|
|
|
|
/s/ Anthony J. Vinciquerra
|
|
Director
|
|
November 6, 2019
|
Anthony J. Vinciquerra
|
|
|
|
|
|
September 29,
2019 |
|
September 30,
2018 |
||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
11,839
|
|
|
$
|
11,777
|
|
Marketable securities
|
421
|
|
|
311
|
|
||
Accounts receivable, net
|
2,471
|
|
|
2,904
|
|
||
Inventories
|
1,400
|
|
|
1,693
|
|
||
Other current assets
|
634
|
|
|
699
|
|
||
Total current assets
|
16,765
|
|
|
17,384
|
|
||
Deferred tax assets
|
1,196
|
|
|
936
|
|
||
Property, plant and equipment, net
|
3,081
|
|
|
2,975
|
|
||
Goodwill
|
6,282
|
|
|
6,498
|
|
||
Other intangible assets, net
|
2,172
|
|
|
2,955
|
|
||
Other assets
|
3,461
|
|
|
1,970
|
|
||
Total assets
|
$
|
32,957
|
|
|
$
|
32,718
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|||||||
Current liabilities:
|
|
|
|
||||
Trade accounts payable
|
$
|
1,368
|
|
|
$
|
1,825
|
|
Payroll and other benefits related liabilities
|
1,048
|
|
|
1,081
|
|
||
Unearned revenues
|
565
|
|
|
500
|
|
||
Short-term debt
|
2,496
|
|
|
1,005
|
|
||
Other current liabilities
|
3,458
|
|
|
6,978
|
|
||
Total current liabilities
|
8,935
|
|
|
11,389
|
|
||
Unearned revenues
|
1,160
|
|
|
1,620
|
|
||
Income taxes payable
|
2,088
|
|
|
2,312
|
|
||
Long-term debt
|
13,437
|
|
|
15,365
|
|
||
Other liabilities
|
2,428
|
|
|
1,225
|
|
||
Total liabilities
|
28,048
|
|
|
31,911
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 7)
|
|
|
|
||||
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.0001 par value; 8 shares authorized; none outstanding
|
—
|
|
|
—
|
|
||
Common stock and paid-in capital, $0.0001 par value; 6,000 shares authorized; 1,145 and 1,219 shares issued and outstanding, respectively
|
343
|
|
|
—
|
|
||
Retained earnings
|
4,466
|
|
|
542
|
|
||
Accumulated other comprehensive income
|
100
|
|
|
265
|
|
||
Total stockholders’ equity
|
4,909
|
|
|
807
|
|
||
Total liabilities and stockholders’ equity
|
$
|
32,957
|
|
|
$
|
32,718
|
|
|
Year Ended
|
||||||||||
|
September 29, 2019
|
|
September 30, 2018
|
|
September 24, 2017
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Equipment and services
|
$
|
14,611
|
|
|
$
|
17,400
|
|
|
$
|
16,647
|
|
Licensing
|
9,662
|
|
|
5,211
|
|
|
5,611
|
|
|||
Total revenues
|
24,273
|
|
|
22,611
|
|
|
22,258
|
|
|||
Costs and expenses:
|
|
|
|
|
|
||||||
Cost of revenues
|
8,599
|
|
|
10,244
|
|
|
9,792
|
|
|||
Research and development
|
5,398
|
|
|
5,625
|
|
|
5,485
|
|
|||
Selling, general and administrative
|
2,195
|
|
|
2,986
|
|
|
2,658
|
|
|||
Other
|
414
|
|
|
3,135
|
|
|
1,742
|
|
|||
Total costs and expenses
|
16,606
|
|
|
21,990
|
|
|
19,677
|
|
|||
Operating income
|
7,667
|
|
|
621
|
|
|
2,581
|
|
|||
Interest expense
|
(627
|
)
|
|
(768
|
)
|
|
(494
|
)
|
|||
Investment and other income, net
|
441
|
|
|
539
|
|
|
900
|
|
|||
Income before income taxes
|
7,481
|
|
|
392
|
|
|
2,987
|
|
|||
Income tax expense
|
(3,095
|
)
|
|
(5,356
|
)
|
|
(543
|
)
|
|||
Net income (loss)
|
4,386
|
|
|
(4,964
|
)
|
|
2,444
|
|
|||
Net loss attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
1
|
|
|||
Net income (loss) attributable to Qualcomm
|
$
|
4,386
|
|
|
$
|
(4,964
|
)
|
|
$
|
2,445
|
|
|
|
|
|
|
|
||||||
Basic earnings (loss) per share attributable to Qualcomm
|
$
|
3.63
|
|
|
$
|
(3.39
|
)
|
|
$
|
1.66
|
|
Diluted earnings (loss) per share attributable to Qualcomm
|
$
|
3.59
|
|
|
$
|
(3.39
|
)
|
|
$
|
1.64
|
|
Shares used in per share calculations:
|
|
|
|
|
|
||||||
Basic
|
1,210
|
|
|
1,463
|
|
|
1,477
|
|
|||
Diluted
|
1,220
|
|
|
1,463
|
|
|
1,490
|
|
|
Year Ended
|
||||||||||
|
September 29,
2019 |
|
September 30,
2018 |
|
September 24,
2017 |
||||||
Net income (loss)
|
$
|
4,386
|
|
|
$
|
(4,964
|
)
|
|
$
|
2,444
|
|
Other comprehensive loss, net of income taxes:
|
|
|
|
|
|
||||||
Foreign currency translation (losses) gains
|
(110
|
)
|
|
(136
|
)
|
|
309
|
|
|||
Net unrealized (losses) gains on certain available-for-sale securities, net of tax benefit (expense) of $0, ($8) and $59, respectively
|
(6
|
)
|
|
29
|
|
|
(102
|
)
|
|||
Reclassification of net realized gains on available-for-sale securities included in net income (loss), net of tax expense of $0, $3 and $156, respectively
|
(1
|
)
|
|
(9
|
)
|
|
(286
|
)
|
|||
Net unrealized gains (losses) on derivative instruments, net of tax (expense) benefit of ($7), $6 and $0, respectively
|
26
|
|
|
(17
|
)
|
|
(49
|
)
|
|||
Other (losses) gains, net of tax expense of $0, $0 and $3, respectively
|
(19
|
)
|
|
(3
|
)
|
|
10
|
|
|||
Other reclassifications included in net income (loss), net of tax expense (benefit) of $1, ($6) and ($42), respectively
|
(4
|
)
|
|
17
|
|
|
74
|
|
|||
Total other comprehensive loss
|
(114
|
)
|
|
(119
|
)
|
|
(44
|
)
|
|||
Total comprehensive income (loss)
|
4,272
|
|
|
(5,083
|
)
|
|
2,400
|
|
|||
Comprehensive loss attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
1
|
|
|||
Comprehensive income (loss) attributable to Qualcomm
|
$
|
4,272
|
|
|
$
|
(5,083
|
)
|
|
$
|
2,401
|
|
|
Year Ended
|
||||||||||
|
September 29,
2019 |
|
September 30,
2018 |
|
September 24,
2017 |
||||||
Operating Activities:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
4,386
|
|
|
$
|
(4,964
|
)
|
|
$
|
2,444
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|||||||
Depreciation and amortization expense
|
1,401
|
|
|
1,561
|
|
|
1,461
|
|
|||
Income tax provision in excess of (less than) income tax payments
|
1,976
|
|
|
4,481
|
|
|
(412
|
)
|
|||
Non-cash portion of share-based compensation expense
|
1,037
|
|
|
883
|
|
|
914
|
|
|||
Net gains on marketable securities and other investments
|
(356
|
)
|
|
(124
|
)
|
|
(530
|
)
|
|||
Indefinite and long-lived asset impairment charges
|
203
|
|
|
273
|
|
|
76
|
|
|||
Impairment losses on marketable securities and other investments
|
135
|
|
|
75
|
|
|
177
|
|
|||
Other items, net
|
(272
|
)
|
|
(49
|
)
|
|
(26
|
)
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable, net
|
1,373
|
|
|
734
|
|
|
(1,104
|
)
|
|||
Inventories
|
273
|
|
|
337
|
|
|
(200
|
)
|
|||
Other assets
|
78
|
|
|
24
|
|
|
136
|
|
|||
Trade accounts payable
|
(443
|
)
|
|
(94
|
)
|
|
(45
|
)
|
|||
Payroll, benefits and other liabilities
|
(2,376
|
)
|
|
1,005
|
|
|
2,341
|
|
|||
Unearned revenues
|
(129
|
)
|
|
(234
|
)
|
|
(231
|
)
|
|||
Net cash provided by operating activities
|
7,286
|
|
|
3,908
|
|
|
5,001
|
|
|||
Investing Activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(887
|
)
|
|
(784
|
)
|
|
(690
|
)
|
|||
Purchases of debt and equity marketable securities
|
—
|
|
|
(5,936
|
)
|
|
(19,062
|
)
|
|||
Proceeds from sales and maturities of debt and equity marketable securities
|
139
|
|
|
9,188
|
|
|
41,715
|
|
|||
Purchases of other marketable securities
|
—
|
|
|
(49
|
)
|
|
(2,010
|
)
|
|||
Proceeds from sales and maturities of other marketable securities
|
—
|
|
|
50
|
|
|
2,006
|
|
|||
Acquisitions and other investments, net of cash acquired
|
(252
|
)
|
|
(326
|
)
|
|
(1,544
|
)
|
|||
Proceeds from other investments
|
68
|
|
|
222
|
|
|
23
|
|
|||
Other items, net
|
126
|
|
|
16
|
|
|
25
|
|
|||
Net cash (used) provided by investing activities
|
(806
|
)
|
|
2,381
|
|
|
20,463
|
|
|||
Financing Activities:
|
|
|
|
|
|
||||||
Proceeds from short-term debt
|
5,989
|
|
|
11,131
|
|
|
8,558
|
|
|||
Repayment of short-term debt
|
(6,492
|
)
|
|
(11,127
|
)
|
|
(9,309
|
)
|
|||
Proceeds from long-term debt
|
—
|
|
|
—
|
|
|
10,953
|
|
|||
Repayment of long-term debt
|
—
|
|
|
(5,513
|
)
|
|
—
|
|
|||
Proceeds from issuance of common stock
|
414
|
|
|
603
|
|
|
497
|
|
|||
Repurchases and retirements of common stock
|
(1,793
|
)
|
|
(22,580
|
)
|
|
(1,342
|
)
|
|||
Dividends paid
|
(2,968
|
)
|
|
(3,466
|
)
|
|
(3,252
|
)
|
|||
Payments of tax withholdings related to vesting of share-based awards
|
(266
|
)
|
|
(280
|
)
|
|
(268
|
)
|
|||
Payment of purchase consideration related to RF360 Holdings
|
(1,163
|
)
|
|
(157
|
)
|
|
(115
|
)
|
|||
Other items, net
|
(107
|
)
|
|
(111
|
)
|
|
(151
|
)
|
|||
Net cash (used) provided by financing activities
|
(6,386
|
)
|
|
(31,500
|
)
|
|
5,571
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(32
|
)
|
|
(41
|
)
|
|
48
|
|
|||
Net increase (decrease) in total cash and cash equivalents
|
62
|
|
|
(25,252
|
)
|
|
31,083
|
|
|||
Total cash and cash equivalents at beginning of period
|
11,777
|
|
|
37,029
|
|
|
5,946
|
|
|||
Total cash and cash equivalents at end of period
|
$
|
11,839
|
|
|
$
|
11,777
|
|
|
$
|
37,029
|
|
|
|
|
|
|
|
||||||
Reconciliation to the consolidated balance sheets
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
11,839
|
|
|
$
|
11,777
|
|
|
$
|
35,029
|
|
Restricted cash and restricted cash equivalents included in other assets
|
—
|
|
|
—
|
|
|
2,000
|
|
|||
Total cash and cash equivalents at end of period
|
$
|
11,839
|
|
|
$
|
11,777
|
|
|
$
|
37,029
|
|
|
Year Ended
|
||||||||||
|
September 29,
2019 |
|
September 30,
2018 |
|
September 24,
2017 |
||||||
Total stockholders’ equity, beginning balance
|
$
|
807
|
|
|
$
|
30,725
|
|
|
$
|
31,768
|
|
|
|
|
|
|
|
||||||
Common stock and paid-in capital:
|
|
|
|
|
|
||||||
Balance at beginning of period
|
—
|
|
|
274
|
|
|
414
|
|
|||
Common stock issued under employee benefit plans and the related tax benefits
|
415
|
|
|
612
|
|
|
499
|
|
|||
Repurchases and retirements of common stock
|
(910
|
)
|
|
(1,536
|
)
|
|
(1,342
|
)
|
|||
Share-based compensation
|
1,104
|
|
|
930
|
|
|
975
|
|
|||
Tax withholdings related to vesting of share-based payments
|
(266
|
)
|
|
(280
|
)
|
|
(268
|
)
|
|||
Other
|
—
|
|
|
—
|
|
|
(4
|
)
|
|||
Balance at end of period
|
343
|
|
|
—
|
|
|
274
|
|
|||
|
|
|
|
|
|
||||||
Retained earnings:
|
|
|
|
|
|
||||||
Balance at beginning of period
|
542
|
|
|
30,067
|
|
|
30,936
|
|
|||
Cumulative effect of accounting changes (Note 1)
|
3,455
|
|
|
—
|
|
|
—
|
|
|||
Net income (loss) attributable to Qualcomm
|
4,386
|
|
|
(4,964
|
)
|
|
2,445
|
|
|||
Repurchases and retirements of common stock
|
(883
|
)
|
|
(21,044
|
)
|
|
—
|
|
|||
Dividends
|
(3,034
|
)
|
|
(3,517
|
)
|
|
(3,314
|
)
|
|||
Balance at end of period
|
4,466
|
|
|
542
|
|
|
30,067
|
|
|||
|
|
|
|
|
|
||||||
Accumulated other comprehensive income:
|
|
|
|
|
|
||||||
Balance at beginning of period
|
265
|
|
|
384
|
|
|
428
|
|
|||
Cumulative effect of accounting changes (Note 1)
|
(51
|
)
|
|
—
|
|
|
—
|
|
|||
Other comprehensive loss
|
(114
|
)
|
|
(119
|
)
|
|
(44
|
)
|
|||
Balance at end of period
|
100
|
|
|
265
|
|
|
384
|
|
|||
|
|
|
|
|
|
||||||
Total Qualcomm stockholders’ equity
|
4,909
|
|
|
807
|
|
|
30,725
|
|
|||
|
|
|
|
|
|
||||||
Noncontrolling Interests
|
|
|
|
|
|
||||||
Balance at beginning of period
|
—
|
|
|
—
|
|
|
(10
|
)
|
|||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||
Other
|
—
|
|
|
—
|
|
|
11
|
|
|||
Balance at end of period
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Total stockholders’ equity, ending balance
|
$
|
4,909
|
|
|
$
|
807
|
|
|
$
|
30,725
|
|
|
|
|
|
|
|
||||||
Dividends per share announced
|
$
|
2.48
|
|
|
$
|
2.38
|
|
|
$
|
2.20
|
|
|
Balance at September 30,
2018 |
|
Adjustment
|
|
Opening Balance at October 1,
2018 |
||||||
Assets
|
|
|
|
|
|
||||||
Accounts receivable, net
|
$
|
2,904
|
|
|
$
|
957
|
|
|
$
|
3,861
|
|
Other current assets
|
699
|
|
|
1
|
|
|
700
|
|
|||
Deferred tax assets
|
936
|
|
|
(98
|
)
|
|
838
|
|
|||
Other assets
|
1,970
|
|
|
1
|
|
|
1,971
|
|
|||
|
|
|
|
|
|
||||||
Liabilities
|
|
|
|
|
|
||||||
Unearned revenues, current
|
$
|
500
|
|
|
$
|
6
|
|
|
$
|
506
|
|
Other current liabilities
|
6,978
|
|
|
125
|
|
|
7,103
|
|
|||
Unearned revenues
|
1,620
|
|
|
(110
|
)
|
|
1,510
|
|
|||
|
|
|
|
|
|
||||||
Stockholders’ equity
|
|
|
|
|
|
||||||
Retained earnings
|
$
|
542
|
|
|
$
|
840
|
|
|
$
|
1,382
|
|
|
Balance at September 29, 2019
|
||||||||||
Balance Sheet
|
As Reported
ASC 606
|
|
Adjustment
|
|
ASC 605
|
||||||
Assets
|
|
|
|
|
|
||||||
Accounts receivable, net
|
$
|
2,471
|
|
|
$
|
(1,171
|
)
|
|
$
|
1,300
|
|
Other current assets
|
634
|
|
|
(35
|
)
|
|
599
|
|
|||
Deferred tax assets
|
1,196
|
|
|
140
|
|
|
1,336
|
|
|||
Other assets
|
3,461
|
|
|
(62
|
)
|
|
3,399
|
|
|||
|
|
|
|
|
|
||||||
Liabilities
|
|
|
|
|
|
||||||
Unearned revenues, current
|
$
|
565
|
|
|
$
|
55
|
|
|
$
|
620
|
|
Other current liabilities
|
3,458
|
|
|
(169
|
)
|
|
3,289
|
|
|||
Unearned revenues
|
1,160
|
|
|
182
|
|
|
1,342
|
|
|||
Other liabilities
|
2,428
|
|
|
(58
|
)
|
|
2,370
|
|
|||
|
|
|
|
|
|
||||||
Stockholders’ equity
|
|
|
|
|
|
||||||
Retained earnings
|
$
|
4,466
|
|
|
$
|
(1,138
|
)
|
|
$
|
3,328
|
|
|
Year Ended September 29, 2019
|
||||||||||
Statement of Operations
|
As Reported
ASC 606
|
|
Adjustment
|
|
ASC 605
|
||||||
Revenues
|
|
|
|
|
|
||||||
Equipment and services
|
$
|
14,611
|
|
|
$
|
(106
|
)
|
|
$
|
14,505
|
|
Licensing
|
9,662
|
|
|
(270
|
)
|
|
9,392
|
|
|||
Income tax expense
|
(3,095
|
)
|
|
78
|
|
|
(3,017
|
)
|
|||
Net income
|
4,386
|
|
|
(298
|
)
|
|
4,088
|
|
|
September 29, 2019
|
|
September 30, 2018
|
||||
Forwards
|
$
|
878
|
|
|
$
|
682
|
|
Options
|
176
|
|
|
1,375
|
|
||
Swaps
|
1,750
|
|
|
1,750
|
|
||
|
$
|
2,804
|
|
|
$
|
3,807
|
|
|
September 29, 2019
|
|
September 30, 2018
|
||||
Chinese renminbi
|
$
|
463
|
|
|
$
|
650
|
|
Euro
|
—
|
|
|
938
|
|
||
Indian rupee
|
440
|
|
|
336
|
|
||
Japanese yen
|
12
|
|
|
17
|
|
||
United States dollar
|
1,889
|
|
|
1,866
|
|
||
|
$
|
2,804
|
|
|
$
|
3,807
|
|
•
|
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 our own assumptions.
|
|
2019
|
|
2018
|
|
2017
|
|||
Dilutive common share equivalents included in diluted shares
|
10.4
|
|
|
—
|
|
|
13.0
|
|
Shares of common stock equivalents not included because the effect would be anti-dilutive or certain performance conditions were not satisfied at the end of the period
|
7.5
|
|
|
51.2
|
|
|
3.0
|
|
Accounts Receivable (in millions)
|
|
|
|
||||
|
September 29, 2019
|
|
September 30, 2018
|
||||
Trade, net of allowances for doubtful accounts of $47 and $56, respectively
|
$
|
1,046
|
|
|
$
|
2,667
|
|
Unbilled receivables
|
1,411
|
|
|
201
|
|
||
Other
|
14
|
|
|
36
|
|
||
|
$
|
2,471
|
|
|
$
|
2,904
|
|
Inventories (in millions)
|
|
|
|
||||
|
September 29, 2019
|
|
September 30, 2018
|
||||
Raw materials
|
$
|
77
|
|
|
$
|
72
|
|
Work-in-process
|
667
|
|
|
715
|
|
||
Finished goods
|
656
|
|
|
906
|
|
||
|
$
|
1,400
|
|
|
$
|
1,693
|
|
Property, Plant and Equipment (in millions)
|
September 29, 2019
|
|
September 30, 2018
|
||||
Land
|
$
|
170
|
|
|
$
|
186
|
|
Buildings and improvements
|
1,546
|
|
|
1,575
|
|
||
Computer equipment and software
|
1,356
|
|
|
1,419
|
|
||
Machinery and equipment
|
4,007
|
|
|
3,792
|
|
||
Furniture and office equipment
|
86
|
|
|
85
|
|
||
Leasehold improvements
|
301
|
|
|
325
|
|
||
Construction in progress
|
182
|
|
|
79
|
|
||
|
7,648
|
|
|
7,461
|
|
||
Less accumulated depreciation and amortization
|
(4,567
|
)
|
|
(4,486
|
)
|
||
|
$
|
3,081
|
|
|
$
|
2,975
|
|
|
QCT
|
|
QTL
|
|
Nonreportable Segments
|
|
Total
|
||||||||
Balance at September 24, 2017
|
$
|
5,581
|
|
|
$
|
741
|
|
|
$
|
301
|
|
|
$
|
6,623
|
|
Impairments (Note 10)
|
—
|
|
|
(22
|
)
|
|
(107
|
)
|
|
(129
|
)
|
||||
Other (1)
|
6
|
|
|
(1
|
)
|
|
(1
|
)
|
|
4
|
|
||||
Balance at September 30, 2018 (2)
|
5,587
|
|
|
718
|
|
|
193
|
|
|
6,498
|
|
||||
Acquisitions
|
18
|
|
|
—
|
|
|
—
|
|
|
18
|
|
||||
Impairments (Note 10)
|
—
|
|
|
—
|
|
|
(146
|
)
|
|
(146
|
)
|
||||
Other (1)
|
(40
|
)
|
|
(1
|
)
|
|
(47
|
)
|
|
(88
|
)
|
||||
Balance at September 29, 2019 (2)
|
$
|
5,565
|
|
|
$
|
717
|
|
|
$
|
—
|
|
|
$
|
6,282
|
|
(1)
|
Includes changes in goodwill amounts resulting from the sale of our mobile health nonreportable segment in fiscal 2019, foreign currency translation and purchase accounting adjustments.
|
(2)
|
Cumulative goodwill impairments were $812 million and $666 million at September 29, 2019 and September 30, 2018, respectively.
|
|
September 29, 2019
|
|
September 30, 2018
|
||||||||||||||||
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Weighted-average amortization period
(years)
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Weighted-average amortization period
(years)
|
||||||||
Technology-based
|
$
|
5,958
|
|
|
$
|
(3,851
|
)
|
|
10
|
|
$
|
6,334
|
|
|
$
|
(3,461
|
)
|
|
10
|
Other
|
134
|
|
|
(69
|
)
|
|
9
|
|
149
|
|
|
(67
|
)
|
|
8
|
||||
|
$
|
6,092
|
|
|
$
|
(3,920
|
)
|
|
10
|
|
$
|
6,483
|
|
|
$
|
(3,528
|
)
|
|
10
|
|
September 29,
2019 |
|
September 30,
2018 |
||||
Equity method investments
|
$
|
343
|
|
|
$
|
402
|
|
Non-marketable equity investments
|
787
|
|
|
650
|
|
||
|
$
|
1,130
|
|
|
$
|
1,052
|
|
Other Current Liabilities (in millions)
|
|
|
|
||||
|
September 29,
2019 |
|
September 30,
2018 |
||||
Customer incentives and other customer-related liabilities
|
$
|
1,129
|
|
|
$
|
3,500
|
|
Accrual for EC fines (Note 7)
|
1,379
|
|
|
1,167
|
|
||
Income taxes payable
|
480
|
|
|
453
|
|
||
RF360 Holdings Put and Call Option (Note 9)
|
—
|
|
|
1,137
|
|
||
Other
|
470
|
|
|
721
|
|
||
|
$
|
3,458
|
|
|
$
|
6,978
|
|
|
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 Gains (Losses) on Other Available-for-Sale Securities
|
|
Net Unrealized Gain (Loss) on Derivative Instruments
|
|
Other Gains (Losses)
|
|
Total Accumulated Other Comprehensive Income
|
||||||||||||
Balance at September 30, 2018
|
$
|
11
|
|
|
$
|
23
|
|
|
$
|
243
|
|
|
$
|
(13
|
)
|
|
$
|
1
|
|
|
$
|
265
|
|
Other comprehensive (loss) income before reclassifications
|
(110
|
)
|
|
—
|
|
|
(6
|
)
|
|
26
|
|
|
(19
|
)
|
|
(109
|
)
|
||||||
Reclassifications from accumulated other comprehensive income
|
—
|
|
|
—
|
|
|
(51
|
)
|
|
(5
|
)
|
|
—
|
|
|
(56
|
)
|
||||||
Other comprehensive (loss) income
|
(110
|
)
|
|
—
|
|
|
(57
|
)
|
|
21
|
|
|
(19
|
)
|
|
(165
|
)
|
||||||
Balance at September 29, 2019
|
$
|
(99
|
)
|
|
$
|
23
|
|
|
$
|
186
|
|
|
$
|
8
|
|
|
$
|
(18
|
)
|
|
$
|
100
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Cost of revenues
|
$
|
35
|
|
|
$
|
38
|
|
|
$
|
38
|
|
Research and development
|
725
|
|
|
594
|
|
|
588
|
|
|||
Selling, general and administrative
|
277
|
|
|
251
|
|
|
288
|
|
|||
Share-based compensation expense before income taxes
|
1,037
|
|
|
883
|
|
|
914
|
|
|||
Related income tax benefit
|
(184
|
)
|
|
(140
|
)
|
|
(161
|
)
|
|||
|
$
|
853
|
|
|
$
|
743
|
|
|
$
|
753
|
|
Investment and Other Income, Net (in millions)
|
|
|
|
|
|
||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Interest and dividend income
|
$
|
316
|
|
|
$
|
625
|
|
|
$
|
619
|
|
Net gains on marketable securities
|
288
|
|
|
41
|
|
|
456
|
|
|||
Net gains on other investments
|
68
|
|
|
83
|
|
|
74
|
|
|||
Impairment losses on marketable securities and other investments
|
(135
|
)
|
|
(75
|
)
|
|
(177
|
)
|
|||
Net (losses) gains on derivative instruments
|
(14
|
)
|
|
(27
|
)
|
|
32
|
|
|||
Equity in net losses of investees
|
(93
|
)
|
|
(145
|
)
|
|
(74
|
)
|
|||
Net gains (losses) on foreign currency transactions
|
11
|
|
|
37
|
|
|
(30
|
)
|
|||
|
$
|
441
|
|
|
$
|
539
|
|
|
$
|
900
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Current provision (benefit):
|
|
|
|
|
|
||||||
Federal
|
$
|
1,563
|
|
|
$
|
2,559
|
|
|
$
|
72
|
|
State
|
2
|
|
|
(1
|
)
|
|
3
|
|
|||
Foreign
|
(407
|
)
|
|
777
|
|
|
1,256
|
|
|||
|
1,158
|
|
|
3,335
|
|
|
1,331
|
|
|||
Deferred provision (benefit):
|
|
|
|
|
|
||||||
Federal
|
2,037
|
|
|
1,846
|
|
|
(598
|
)
|
|||
State
|
17
|
|
|
1
|
|
|
4
|
|
|||
Foreign
|
(117
|
)
|
|
174
|
|
|
(194
|
)
|
|||
|
1,937
|
|
|
2,021
|
|
|
(788
|
)
|
|||
|
$
|
3,095
|
|
|
$
|
5,356
|
|
|
$
|
543
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
United States
|
$
|
7,042
|
|
|
$
|
(1,834
|
)
|
|
$
|
(795
|
)
|
Foreign
|
439
|
|
|
2,226
|
|
|
3,782
|
|
|||
|
$
|
7,481
|
|
|
$
|
392
|
|
|
$
|
2,987
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Expected income tax provision at federal statutory tax rate
|
$
|
1,571
|
|
|
$
|
97
|
|
|
$
|
1,045
|
|
State income tax provision, net of federal benefit
|
10
|
|
|
2
|
|
|
8
|
|
|||
Derecognition of deferred tax asset on distributed intellectual property
|
2,472
|
|
|
—
|
|
|
—
|
|
|||
Benefits from establishing new U.S. net deferred tax assets
|
(570
|
)
|
|
—
|
|
|
—
|
|
|||
Benefits from foreign-derived intangible income (FDII) deduction
|
(419
|
)
|
|
—
|
|
|
—
|
|
|||
Benefits related to research and development tax credits
|
(110
|
)
|
|
(136
|
)
|
|
(81
|
)
|
|||
Benefits from foreign income taxed at other than U.S. rates
|
(54
|
)
|
|
(834
|
)
|
|
(963
|
)
|
|||
Nondeductible charges (reversals) related to the EC, KFTC and TFTC investigations
|
51
|
|
|
(119
|
)
|
|
363
|
|
|||
Impact of changes in tax reserves and audit settlements for prior year tax positions
|
20
|
|
|
—
|
|
|
111
|
|
|||
Taxes on undistributed foreign earnings
|
8
|
|
|
87
|
|
|
—
|
|
|||
Toll Charge from U.S. tax reform
|
—
|
|
|
5,236
|
|
|
—
|
|
|||
Valuation allowance on deferred tax assets related to NXP termination fee
|
—
|
|
|
494
|
|
|
—
|
|
|||
Remeasurement of deferred taxes due to changes in statutory rate due to U.S. tax reform
|
—
|
|
|
443
|
|
|
—
|
|
|||
Other
|
116
|
|
|
86
|
|
|
60
|
|
|||
|
$
|
3,095
|
|
|
$
|
5,356
|
|
|
$
|
543
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Additional income tax expense
|
$
|
—
|
|
|
$
|
652
|
|
|
$
|
493
|
|
Reduction to diluted earnings (loss) per share
|
—
|
|
|
0.45
|
|
|
0.33
|
|
|
September 29, 2019
|
|
September 30, 2018
|
||||
Unused tax credits
|
$
|
1,137
|
|
|
$
|
1,044
|
|
Accrued liabilities and reserves
|
648
|
|
|
396
|
|
||
Unused net operating losses
|
619
|
|
|
696
|
|
||
Unearned revenues
|
376
|
|
|
478
|
|
||
Unrealized losses on other investments and marketable securities
|
164
|
|
|
126
|
|
||
Share-based compensation
|
115
|
|
|
97
|
|
||
Other
|
144
|
|
|
26
|
|
||
Total gross deferred tax assets
|
3,203
|
|
|
2,863
|
|
||
Valuation allowance
|
(1,672
|
)
|
|
(1,529
|
)
|
||
Total net deferred tax assets
|
1,531
|
|
|
1,334
|
|
||
Intangible assets
|
(216
|
)
|
|
(322
|
)
|
||
Property, plant and equipment
|
(102
|
)
|
|
(49
|
)
|
||
Unrealized gains on other investments and marketable securities
|
(99
|
)
|
|
(26
|
)
|
||
Accrued withholding taxes
|
(19
|
)
|
|
(90
|
)
|
||
Accrued revenues
|
—
|
|
|
(202
|
)
|
||
Other
|
(2
|
)
|
|
—
|
|
||
Total deferred tax liabilities
|
(438
|
)
|
|
(689
|
)
|
||
Net deferred tax assets
|
$
|
1,093
|
|
|
$
|
645
|
|
Reported as:
|
|
|
|
||||
Non-current deferred tax assets
|
$
|
1,196
|
|
|
$
|
936
|
|
Non-current deferred tax liabilities (1)
|
(103
|
)
|
|
(291
|
)
|
||
|
$
|
1,093
|
|
|
$
|
645
|
|
(1)
|
Non-current deferred tax liabilities were included in other liabilities in the consolidated balance sheets.
|
|
2019
|
|
2018
|
|
2017
|
||||||
Beginning balance of unrecognized tax benefits
|
$
|
217
|
|
|
$
|
372
|
|
|
$
|
271
|
|
Additions based on prior year tax positions
|
1,238
|
|
|
7
|
|
|
92
|
|
|||
Reductions for prior year tax positions and lapse in statute of limitations
|
(3
|
)
|
|
(11
|
)
|
|
(11
|
)
|
|||
Additions for current year tax positions
|
253
|
|
|
18
|
|
|
23
|
|
|||
Settlements with taxing authorities
|
—
|
|
|
(169
|
)
|
|
(3
|
)
|
|||
Ending balance of unrecognized tax benefits
|
$
|
1,705
|
|
|
$
|
217
|
|
|
$
|
372
|
|
|
2019
|
|
Balance at beginning of period
|
1,219
|
|
Issued
|
22
|
|
Repurchased
|
(96
|
)
|
Balance at end of period
|
1,145
|
|
|
Number of Shares
|
|
Weighted-Average
Grant Date Fair
Value
|
|
Aggregate Intrinsic
Value
|
|||||
|
(In thousands)
|
|
|
|
(In billions)
|
|||||
RSUs outstanding at September 30, 2018
|
23,097
|
|
|
$
|
62.12
|
|
|
|
||
RSUs granted
|
20,879
|
|
|
63.10
|
|
|
|
|||
RSUs canceled/forfeited
|
(2,812
|
)
|
|
62.45
|
|
|
|
|||
RSUs vested
|
(14,475
|
)
|
|
62.64
|
|
|
|
|||
RSUs outstanding at September 29, 2019
|
26,689
|
|
|
$
|
62.57
|
|
|
$
|
2.0
|
|
|
|
September 29, 2019
|
|
September 30, 2018
|
||||||||
|
|
Amount
|
|
Effective Rate
|
|
Amount
|
|
Effective Rate
|
||||
May 2015 Notes
|
|
|
|
|
|
|
|
|||||
|
Floating-rate three-month LIBOR plus 0.55% notes due May 20, 2020
|
$
|
250
|
|
|
2.74%
|
|
$
|
250
|
|
|
2.93%
|
|
Fixed-rate 2.25% notes due May 20, 2020
|
1,750
|
|
|
2.64%
|
|
1,750
|
|
|
3.13%
|
||
|
Fixed-rate 3.00% notes due May 20, 2022
|
2,000
|
|
|
2.89%
|
|
2,000
|
|
|
3.73%
|
||
|
Fixed-rate 3.45% notes due May 20, 2025
|
2,000
|
|
|
3.46%
|
|
2,000
|
|
|
3.46%
|
||
|
Fixed-rate 4.65% notes due May 20, 2035
|
1,000
|
|
|
4.73%
|
|
1,000
|
|
|
4.73%
|
||
|
Fixed-rate 4.80% notes due May 20, 2045
|
1,500
|
|
|
4.72%
|
|
1,500
|
|
|
4.72%
|
||
May 2017 Notes
|
|
|
|
|
|
|
|
|||||
|
Floating-rate three-month LIBOR plus 0.73% notes due January 30, 2023
|
500
|
|
|
3.06%
|
|
500
|
|
|
3.14%
|
||
|
Fixed-rate 2.60% notes due January 30, 2023
|
1,500
|
|
|
2.70%
|
|
1,500
|
|
|
2.70%
|
||
|
Fixed-rate 2.90% notes due May 20, 2024
|
1,500
|
|
|
3.01%
|
|
1,500
|
|
|
3.01%
|
||
|
Fixed-rate 3.25% notes due May 20, 2027
|
2,000
|
|
|
3.45%
|
|
2,000
|
|
|
3.46%
|
||
|
Fixed-rate 4.30% notes due May 20, 2047
|
1,500
|
|
|
4.47%
|
|
1,500
|
|
|
4.47%
|
||
|
Total principal
|
15,500
|
|
|
|
|
15,500
|
|
|
|
||
|
Unamortized discount, including debt issuance costs
|
(75
|
)
|
|
|
|
(85
|
)
|
|
|
||
|
Hedge accounting fair value adjustments
|
9
|
|
|
|
|
(50
|
)
|
|
|
||
|
Total long-term debt
|
$
|
15,434
|
|
|
|
|
$
|
15,365
|
|
|
|
Reported as:
|
|
|
|
|
|
|
|
|||||
|
Short-term debt
|
$
|
1,997
|
|
|
|
|
$
|
—
|
|
|
|
|
Long-term debt
|
13,437
|
|
|
|
|
15,365
|
|
|
|
||
|
Total
|
$
|
15,434
|
|
|
|
|
$
|
15,365
|
|
|
|
|
Purchase Obligations
|
|
Operating Leases
|
||||
2020
|
$
|
2,926
|
|
|
$
|
138
|
|
2021
|
286
|
|
|
97
|
|
||
2022
|
108
|
|
|
66
|
|
||
2023
|
53
|
|
|
31
|
|
||
2024
|
16
|
|
|
18
|
|
||
Thereafter
|
1
|
|
|
35
|
|
||
Total
|
$
|
3,390
|
|
|
$
|
385
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Revenues
|
|
|
|
|
|
||||||
QCT
|
$
|
14,639
|
|
|
$
|
17,282
|
|
|
$
|
16,479
|
|
QTL
|
4,591
|
|
|
5,042
|
|
|
6,412
|
|
|||
QSI
|
152
|
|
|
100
|
|
|
113
|
|
|||
Reconciling items
|
4,891
|
|
|
187
|
|
|
(746
|
)
|
|||
Total
|
$
|
24,273
|
|
|
$
|
22,611
|
|
|
$
|
22,258
|
|
EBT
|
|
|
|
|
|
||||||
QCT
|
$
|
2,143
|
|
|
$
|
2,966
|
|
|
$
|
2,747
|
|
QTL
|
2,954
|
|
|
3,404
|
|
|
5,142
|
|
|||
QSI
|
344
|
|
|
24
|
|
|
65
|
|
|||
Reconciling items
|
2,040
|
|
|
(6,002
|
)
|
|
(4,967
|
)
|
|||
Total
|
$
|
7,481
|
|
|
$
|
392
|
|
|
$
|
2,987
|
|
Assets
|
|
|
|
|
|
||||||
QCT
|
$
|
2,307
|
|
|
$
|
3,041
|
|
|
$
|
3,830
|
|
QTL
|
1,541
|
|
|
1,472
|
|
|
1,735
|
|
|||
QSI
|
1,708
|
|
|
1,279
|
|
|
1,037
|
|
|||
Reconciling items
|
27,401
|
|
|
26,926
|
|
|
58,896
|
|
|||
Total
|
$
|
32,957
|
|
|
$
|
32,718
|
|
|
$
|
65,498
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
China (including Hong Kong)
|
$
|
11,610
|
|
|
$
|
15,149
|
|
|
$
|
14,579
|
|
Ireland
|
2,957
|
|
|
1
|
|
|
—
|
|
|||
United States
|
2,774
|
|
|
603
|
|
|
513
|
|
|||
South Korea
|
2,400
|
|
|
3,175
|
|
|
3,538
|
|
|||
Other foreign
|
4,532
|
|
|
3,683
|
|
|
3,628
|
|
|||
|
$
|
24,273
|
|
|
$
|
22,611
|
|
|
$
|
22,258
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Revenues
|
|
|
|
|
|
||||||
Nonreportable segments
|
$
|
168
|
|
|
$
|
287
|
|
|
$
|
311
|
|
Reduction to revenues related to BlackBerry arbitration decision
|
—
|
|
|
—
|
|
|
(962
|
)
|
|||
Other unallocated revenues
|
4,723
|
|
|
(100
|
)
|
|
(95
|
)
|
|||
|
$
|
4,891
|
|
|
$
|
187
|
|
|
$
|
(746
|
)
|
EBT
|
|
|
|
|
|
||||||
Reduction to revenues related to BlackBerry arbitration decision
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(962
|
)
|
Other unallocated revenues
|
4,723
|
|
|
(100
|
)
|
|
(95
|
)
|
|||
Unallocated cost of revenues
|
(430
|
)
|
|
(486
|
)
|
|
(517
|
)
|
|||
Unallocated research and development expenses
|
(989
|
)
|
|
(1,154
|
)
|
|
(1,056
|
)
|
|||
Unallocated selling, general and administrative expenses
|
(413
|
)
|
|
(576
|
)
|
|
(647
|
)
|
|||
Unallocated other expenses (Note 2)
|
(414
|
)
|
|
(3,135
|
)
|
|
(1,742
|
)
|
|||
Unallocated interest expense
|
(619
|
)
|
|
(761
|
)
|
|
(488
|
)
|
|||
Unallocated investment and other income, net
|
243
|
|
|
566
|
|
|
913
|
|
|||
Nonreportable segments
|
(61
|
)
|
|
(356
|
)
|
|
(373
|
)
|
|||
|
$
|
2,040
|
|
|
$
|
(6,002
|
)
|
|
$
|
(4,967
|
)
|
|
2019
|
|
2018 (1)
|
|
Total
|
||||||
Restructuring-related charges (2)
|
$
|
151
|
|
|
$
|
334
|
|
|
$
|
485
|
|
Restructuring charges (3)
|
62
|
|
|
353
|
|
|
415
|
|
|||
|
$
|
213
|
|
|
$
|
687
|
|
|
$
|
900
|
|
(1)
|
During fiscal 2018, we recorded restructuring and restructuring-related charges of $629 million in other expenses and charges of $58 million in investment and other income, net.
|
(2)
|
Restructuring-related charges primarily related to asset impairment charges in fiscal 2019 and 2018 and also included a $52 million net gain in fiscal 2019 from the sale of certain assets related to wireless electric vehicle charging applications and the sale of our mobile health nonreportable segment, as well as a $41 million gain in fiscal 2018 resulting from fair value adjustments of certain
|
(3)
|
Restructuring charges primarily consisted of severance and consulting costs in fiscal 2019 and 2018, which were payable in cash.
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
6,493
|
|
|
$
|
4,084
|
|
|
$
|
—
|
|
|
$
|
10,577
|
|
Marketable securities:
|
|
|
|
|
|
|
|
||||||||
Corporate bonds and notes
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
||||
Auction rate securities
|
—
|
|
|
—
|
|
|
35
|
|
|
35
|
|
||||
Equity and preferred securities
|
418
|
|
|
—
|
|
|
—
|
|
|
418
|
|
||||
Total marketable securities
|
418
|
|
|
4
|
|
|
35
|
|
|
457
|
|
||||
Derivative instruments
|
—
|
|
|
25
|
|
|
—
|
|
|
25
|
|
||||
Other investments
|
416
|
|
|
—
|
|
|
73
|
|
|
489
|
|
||||
Total assets measured at fair value
|
$
|
7,327
|
|
|
$
|
4,113
|
|
|
$
|
108
|
|
|
$
|
11,548
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Derivative instruments
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Other liabilities
|
416
|
|
|
—
|
|
|
35
|
|
|
451
|
|
||||
Total liabilities measured at fair value
|
$
|
416
|
|
|
$
|
1
|
|
|
$
|
35
|
|
|
$
|
452
|
|
|
As of September 30, 2018
|
||||||||||
|
As reported
|
|
Adjustment
|
|
As revised
|
||||||
Deferred tax assets (noncurrent)
|
$
|
904
|
|
|
$
|
32
|
|
|
$
|
936
|
|
Total assets
|
32,686
|
|
|
32
|
|
|
32,718
|
|
|||
Other current liabilities
|
6,825
|
|
|
153
|
|
|
6,978
|
|
|||
Total current liabilities
|
11,236
|
|
|
153
|
|
|
11,389
|
|
|||
Total liabilities
|
31,758
|
|
|
153
|
|
|
31,911
|
|
|||
Retained earnings
|
663
|
|
|
(121
|
)
|
|
542
|
|
|||
Total stockholders’ equity
|
928
|
|
|
(121
|
)
|
|
807
|
|
|||
Total liabilities and stockholders’ equity
|
32,686
|
|
|
32
|
|
|
32,718
|
|
|
Year Ended
|
||||||||||||||||||||||
|
September 30, 2018
|
|
September 24, 2017
|
||||||||||||||||||||
|
As reported
|
|
Adjustment
|
|
As revised
|
|
As reported
|
|
Adjustment
|
|
As revised
|
||||||||||||
Licensing revenues
|
$
|
5,332
|
|
|
$
|
(121
|
)
|
|
$
|
5,211
|
|
|
$
|
5,644
|
|
|
$
|
(33
|
)
|
|
$
|
5,611
|
|
Total revenues
|
22,732
|
|
|
(121
|
)
|
|
22,611
|
|
|
22,291
|
|
|
(33
|
)
|
|
22,258
|
|
||||||
Operating income
|
742
|
|
|
(121
|
)
|
|
621
|
|
|
2,614
|
|
|
(33
|
)
|
|
2,581
|
|
||||||
Income before income taxes
|
513
|
|
|
(121
|
)
|
|
392
|
|
|
3,020
|
|
|
(33
|
)
|
|
2,987
|
|
||||||
Income tax expense
|
(5,377
|
)
|
|
21
|
|
|
(5,356
|
)
|
|
(555
|
)
|
|
12
|
|
|
(543
|
)
|
||||||
Net (loss) income
|
(4,864
|
)
|
|
(100
|
)
|
|
(4,964
|
)
|
|
2,465
|
|
|
(21
|
)
|
|
2,444
|
|
||||||
Net (loss) income attributable to Qualcomm
|
(4,864
|
)
|
|
(100
|
)
|
|
(4,964
|
)
|
|
2,466
|
|
|
(21
|
)
|
|
2,445
|
|
||||||
Basic (loss) earnings per share
|
(3.32
|
)
|
|
(0.07
|
)
|
|
(3.39
|
)
|
|
1.67
|
|
|
(0.01
|
)
|
|
1.66
|
|
||||||
Diluted (loss) earnings per share
|
(3.32
|
)
|
|
(0.07
|
)
|
|
(3.39
|
)
|
|
1.65
|
|
|
(0.01
|
)
|
|
1.64
|
|
|
Year Ended
|
||||||||||||||||||||||
|
September 30, 2018
|
|
September 24, 2017
|
||||||||||||||||||||
|
As reported
|
|
Adjustment
|
|
As revised
|
|
As reported
|
|
Adjustment
|
|
As revised
|
||||||||||||
Net (loss) income
|
$
|
(4,864
|
)
|
|
$
|
(100
|
)
|
|
$
|
(4,964
|
)
|
|
$
|
2,465
|
|
|
$
|
(21
|
)
|
|
$
|
2,444
|
|
Total comprehensive (loss) income
|
(4,983
|
)
|
|
(100
|
)
|
|
(5,083
|
)
|
|
2,421
|
|
|
(21
|
)
|
|
2,400
|
|
||||||
Comprehensive (loss) income attributable to Qualcomm
|
(4,983
|
)
|
|
(100
|
)
|
|
(5,083
|
)
|
|
2,422
|
|
|
(21
|
)
|
|
2,401
|
|
|
Year Ended September 30, 2018
|
||||||||||||||
|
As reported
|
|
Reclassification adjustment (1)
|
|
Revision adjustment
|
|
As revised
|
||||||||
Operating Activities:
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(4,864
|
)
|
|
$
|
—
|
|
|
$
|
(100
|
)
|
|
$
|
(4,964
|
)
|
Income tax provision in excess of (less than) income tax payments
|
4,502
|
|
|
—
|
|
|
(21
|
)
|
|
4,481
|
|
||||
Other items, net
|
129
|
|
|
(178
|
)
|
|
—
|
|
|
(49
|
)
|
||||
Other assets
|
30
|
|
|
(6
|
)
|
|
—
|
|
|
24
|
|
||||
Payroll, benefits and other liabilities
|
687
|
|
|
197
|
|
|
121
|
|
|
1,005
|
|
||||
Net cash provided by operating activities
|
3,895
|
|
|
13
|
|
|
—
|
|
|
3,908
|
|
||||
|
|
|
|
|
|
|
|
||||||||
|
Year Ended September 24, 2017
|
||||||||||||||
|
As reported
|
|
Reclassification adjustment (1)
|
|
Revision adjustment
|
|
As revised
|
||||||||
Operating Activities:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
2,465
|
|
|
$
|
—
|
|
|
$
|
(21
|
)
|
|
$
|
2,444
|
|
Income tax provision in excess of (less than) income tax payments
|
(400
|
)
|
|
—
|
|
|
(12
|
)
|
|
(412
|
)
|
||||
Other items, net
|
146
|
|
|
(172
|
)
|
|
—
|
|
|
(26
|
)
|
||||
Other assets
|
169
|
|
|
(33
|
)
|
|
—
|
|
|
136
|
|
||||
Payroll, benefits and other liabilities
|
2,103
|
|
|
205
|
|
|
33
|
|
|
2,341
|
|
||||
Net cash provided by operating activities
|
5,001
|
|
|
—
|
|
|
—
|
|
|
5,001
|
|
|
1st Quarter
|
|
2nd Quarter
|
|
3rd Quarter
|
|
4th Quarter
|
||||||||
2019 (1)
|
|
|
|
|
|
|
|
||||||||
Revenues (2)
|
$
|
4,842
|
|
|
$
|
4,982
|
|
|
$
|
9,635
|
|
|
$
|
4,814
|
|
Operating income (2)
|
710
|
|
|
940
|
|
|
5,317
|
|
|
701
|
|
||||
Net income (2)
|
1,068
|
|
|
663
|
|
|
2,149
|
|
|
506
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share (3):
|
$
|
0.88
|
|
|
$
|
0.55
|
|
|
$
|
1.77
|
|
|
$
|
0.42
|
|
Diluted earnings per share (3):
|
0.87
|
|
|
0.55
|
|
|
1.75
|
|
|
0.42
|
|
||||
|
|
|
|
|
|
|
|
||||||||
2018 (1) (4)
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
6,035
|
|
|
$
|
5,220
|
|
|
$
|
5,577
|
|
|
$
|
5,778
|
|
Operating (loss) income (5)
|
(4
|
)
|
|
400
|
|
|
903
|
|
|
(679
|
)
|
||||
Net (loss) income (5)
|
(5,983
|
)
|
|
330
|
|
|
1,202
|
|
|
(513
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic (loss) earnings per share (3):
|
$
|
(4.05
|
)
|
|
$
|
0.22
|
|
|
$
|
0.81
|
|
|
$
|
(0.36
|
)
|
Diluted (loss) earnings per share (3):
|
(4.05
|
)
|
|
0.22
|
|
|
0.81
|
|
|
(0.36
|
)
|
(1)
|
Amounts, other than per share amounts, are rounded to millions each quarter. Therefore, the sum of the quarterly amounts may not equal the annual amounts reported.
|
(2)
|
Revenues, operating income and net income in the third quarter of fiscal 2019 included licensing revenues recognized of $4.7 billion resulting from the settlement with Apple and its contract manufacturers. Operating income and net income in the third quarter of fiscal 2019 were impacted by a $275 million charge related to the 2019 EC Fine. Net income in the first quarter of fiscal 2019 was impacted by an income tax benefit of $570 million due to establishing new U.S. net deferred tax assets from making certain check-the-box elections. Net income in the third quarter of fiscal 2019 was impacted by a $2.5 billion charge to income tax expense resulting from the derecognition of a deferred tax asset related to the distributed intellectual property.
|
(3)
|
Earnings (loss) per share and earnings per share attributable to Qualcomm are computed independently for each quarter and the full year based upon respective average shares outstanding. Therefore, the sum of the quarterly (loss) earnings per share amounts may not equal the annual amounts reported.
|
(4)
|
As previously disclosed in our Quarterly Reports on Form 10-Q for the quarters ended December 30, 2018, March 31, 2019 and June 30, 2019, we revised certain prior period financial information for an immaterial error related to the recognition of certain royalty revenues of our QTL segment (Note 1).
|
(5)
|
Operating loss and net loss in the fourth quarter of fiscal 2018 were impacted by a $2.0 billion charge related to the NXP termination fee. Net loss in the first quarter of fiscal 2018 was impacted by a $5.9 billion provisional charge to income tax expense due to the effects of the Tax Legislation. Additionally, operating income and net loss in the first quarter of fiscal 2018 were impacted by a $1.2 billion charge related to the 2018 EC fine.
|
|
Balance at
Beginning of
Period
|
|
Charged
(Credited) to
Costs and
Expenses
|
|
Deductions
|
|
Balance at
End of
Period
|
||||||||
Year ended September 29, 2019
|
|
|
|
|
|
|
|
||||||||
Allowance on trade receivables
|
$
|
56
|
|
|
$
|
3
|
|
|
$
|
(12
|
)
|
|
$
|
47
|
|
Valuation allowance on deferred tax assets
|
1,529
|
|
|
143
|
|
|
—
|
|
|
1,672
|
|
||||
|
$
|
1,585
|
|
|
$
|
146
|
|
|
$
|
(12
|
)
|
|
$
|
1,719
|
|
Year ended September 30, 2018
|
|
|
|
|
|
|
|
||||||||
Allowance on trade receivables
|
$
|
11
|
|
|
$
|
45
|
|
|
$
|
—
|
|
|
$
|
56
|
|
Valuation allowance on deferred tax assets
|
863
|
|
|
666
|
|
|
—
|
|
|
1,529
|
|
||||
|
$
|
874
|
|
|
$
|
711
|
|
|
$
|
—
|
|
|
$
|
1,585
|
|
Year ended September 24, 2017
|
|
|
|
|
|
|
|
||||||||
Allowance on trade receivables
|
$
|
1
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
11
|
|
Valuation allowance on deferred tax assets
|
754
|
|
|
109
|
|
|
—
|
|
|
863
|
|
||||
|
$
|
755
|
|
|
$
|
119
|
|
|
$
|
—
|
|
|
$
|
874
|
|
Emp #: «ID»
|
Date of Grant: «Grant_Date»
|
Emp #: «ID»
|
Date of Grant: «Grant_Date»
|
TSR Percentile Rank
|
Payout Percentage
|
90th percentile and above
|
200%
|
50th percentile
|
100% (Target)
|
25th percentile
|
25%
|
Below 25th percentile
|
0%
|
TSR Percentile Rank =
|
(N – R)
|
* 100
|
N
|
(1)
|
Provided that in the event of an acquisition with a purchase price as determined in accordance with GAAP that is greater than $5 billion, solely for purposes of calculating Adjusted GAAP Equity for the fiscal year in which such acquisition closes (but for no
|
(2)
|
Provided that in the event of an acquisition with a purchase price as determined in accordance with GAAP that is greater than $5 billion, the after-tax impact of expense (e.g. interest expense) or amortization of premiums or discounts related to debt issued or assumed by Qualcomm Incorporated or any of its subsidiaries in connection with or related to such acquisition shall be excluded for the fiscal year in which the acquisition closes, and if such debt is incurred in the fiscal year prior to the year in which such acquisitions closes, for such prior fiscal year and the year in which the acquisition closes (but for no other years);
|
•
|
severance and benefits (including COBRA and outplacement expenses);
|
•
|
consulting costs;
|
•
|
increased security costs;
|
•
|
acceleration of depreciation and/or amortization expense;
|
•
|
facilities and lease termination or abandonment charges;
|
•
|
asset impairment charges and/or contract terminations;
|
•
|
third-party business separation costs; and
|
•
|
relocation costs as a result of an office or facility closure.
|
ROIC
|
ROIC Payout Percentage
|
«ROIC Percentage A»
|
200%
|
«ROIC Percentage B»
|
100%
|
«ROIC Percentage C»
|
33%
|
Below «ROIC Percentage C»
|
0% Payout
|
Subsidiaries of Qualcomm Incorporated
|
State or Other Jurisdiction of Incorporation
|
QUALCOMM CDMA Technologies Asia-Pacific Pte. Ltd.
|
Singapore
|
Qualcomm Global Trading Pte. Ltd.
|
Singapore
|
Qualcomm Technologies International, Ltd.
|
United Kingdom
|
Qualcomm Technologies, Inc.
|
Delaware
|
RF360 Europe GmbH
|
Germany
|
RF360 Singapore Pte. Ltd.
|
Singapore
|
SnapTrack, Inc.
|
California
|
1.
|
I have reviewed this Annual Report on Form 10-K 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 the 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 Annual Report on Form 10-K 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 the 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/ Akash Palkhiwala
|
|
Akash Palkhiwala
|
|
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/ Akash Palkhiwala
|
|
Akash Palkhiwala
|
|
Executive Vice President and
Chief Financial Officer
|
|