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Replies to post #133421 on Zeev's Turnips Patch-No Politics (ZEEV)
Results of Business Segments
The following tables present segment information (in thousands):
Third Quarter - Fiscal Year 2003
Reconciling
Segments QCT QTL QWI Items (1)
Revenues 557,240 242,479 113,882 (22,334)
Change from prior
quarter (15%) (7%) (5%) N/M
Change from prior year 38% 22% 4% N/M
Earnings (loss)
before taxes 163,114 218,363 6,396 10,181
Change from prior
quarter (27%) (8%) (13%) N/M
Change from prior year 39% 25% 308% N/M
Tax rates
Net income (loss)
Change from prior
quarter
Change from prior year
Diluted net earnings
(loss) per
common share (3)
Change from prior quarter
Change from prior year
QUALCOMM Total
Segments excluding QSI QSI QUALCOMM
Revenues 891,267 30,341 921,608
Change from prior
quarter (12%) 16% (12%)
Change from prior year 24% (39%) 20%
Earnings (loss)
before taxes 398,054 (27,563) 370,491
Change from prior
quarter (14%) 89% 72%
Change from prior year 34% 90% 784%
Tax rates 33% (172%) 48%
Net income (loss) 266,697 (75,008) 191,689
Change from prior
quarter (15%) 64% 86%
Change from prior year 38% 46% 1492%
Diluted net earnings
(loss) per
common share (3) 0.33 (0.09) 0.23
Change from prior
quarter (13%) 65% 77%
Change from prior year 38% 50% 1250%
Second Quarter - Fiscal Year 2003
Reconciling
Segments QCT QTL QWI Items (1)
Revenues 652,873 260,110 119,319 (15,524)
Earnings (loss)
before taxes 223,520 236,192 7,370 (6,431)
Tax rates
Net income (loss)
Diluted net earnings
(loss) per
common share (3)
QUALCOMM Total
Segments excluding QSI QSI QUALCOMM
Revenues 1,016,778 26,265 1,043,043
Earnings (loss)
before taxes 460,651 (245,775) 214,876
Tax rates 32% 14% 52%
Net income (loss) 313,858 (210,842) 103,016
Diluted net earnings
(loss) per
common share (3) 0.38 (0.26) 0.13
Third Quarter - Fiscal Year 2002
Reconciling
Segments QCT QTL QWI Items (1)
Revenues 404,253 198,853 109,581 8,631
Earnings (loss)
before taxes 117,524 174,450 (3,074) 8,906
Tax rates
Net income (loss)
Diluted net earnings
(loss) per
common share (3)
Goodwill
QUALCOMM Amortization Total
Segments excluding QSI QSI and Other (2) QUALCOMM
Revenues 721,318 49,456 143 770,917
Earnings (loss)
before taxes 297,806 (285,454) (66,496) (54,144)
Tax rates 35% 51% (1%) 75%
Net income (loss) 193,574 (139,872) (67,470) (13,768)
Diluted net earnings
(loss) per
common share (3) 0.24 (0.18) (0.09) (0.02)
Nine Months - Fiscal Year 2003
Reconciling
Segments QCT QTL QWI Items (1)
Revenues 1,919,794 758,012 342,182 (43,979)
Earnings (loss)
before taxes 674,916 683,964 16,527 5,598
Tax rates
Net income (loss)
Diluted net earnings
(loss) per
common share (3)
QUALCOMM Total
Segments excluding QSI QSI QUALCOMM
Revenues 2,976,009 85,811 3,061,820
Earnings (loss)
before taxes 1,381,005 (406,389) 974,616
Tax rates 33% 4% 45%
Net income (loss) 925,273 (389,234) 536,039
Diluted net earnings
(loss) per
common share (3) 1.13 (0.48) 0.66
Nine Months - Fiscal Year 2002
Reconciling
Segments QCT QTL QWI Items (1)
Revenues 1,107,212 603,611 329,140 33,306
Earnings (loss)
before taxes 282,189 534,673 (8,271) 28,492
Tax rates
Net income (loss)
Diluted net
earnings (loss)
per common share (3)
Goodwill
QUALCOMM Amortization and Total
Segments excluding QSI QSI Other (2) QUALCOMM
Revenues 2,073,269 92,262 143 2,165,674
Earnings (loss)
before taxes 837,083 (409,241) (195,794) 232,048
Tax rates 35% 56% 0% 27%
Net income (loss) 544,104 (178,370) (196,339) 169,395
Diluted net earnings
(loss) per
common share (3) 0.67 (0.22) (0.24) 0.21
(1) Reconciling items related to revenues consist primarily of other
non-reportable segment revenues less intersegment eliminations.
Reconciling items related to earnings before taxes consist primarily
of corporate expenses, charges that are not allocated to the
segments for management reporting purposes, unallocated net
investment income, non-reportable segment results, interest expense
and the elimination of intercompany profit.
(2) Starting in fiscal 2003, the Company no longer records goodwill
amortization, in accordance with Financial Accounting Standards No.
142. In the third quarter of fiscal 2002, goodwill amortization and
other adjustments included $61.5 million of amortization of
goodwill, $4.0 million of amortization of intangible assets and
$2.3 million of payroll expenses on stock option exercises, offset
by $1.0 million of credits related to the reduction of reserves
established in connection with the Globalstar business and $0.2
million of credits and $0.1 million of revenues related to the sale
of the terrestrial-based CDMA wireless infrastructure business. In
the first nine months of fiscal 2002, goodwill amortization and
other adjustments included $183.8 million of amortization of
goodwill, $10.1 million of amortization of intangible assets and
$5.4 million of payroll expenses on stock option exercises, offset
by $3.1 million of credits related to the reduction of reserves
established in connection with the Globalstar business and
$0.3 million of credits and $0.1 million of revenue related to the
sale of the terrestrial-based CDMA wireless infrastructure business.
With the adoption of FAS 142 in 2003 and given the immateriality of
the other adjustments, the Company no longer makes these adjustments
to its results excluding QSI in fiscal 2003.
(3) The sum of the earnings per share amounts may not equal total
earnings per share due to rounding.
N/M - Not Meaningful
QUALCOMM Incorporated
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THIS SCHEDULE IS TO ASSIST THE READER IN RECONCILING FROM
RESULTS EXCLUDING QSI TO TOTAL QUALCOMM RESULTS
(In thousands, except per share data)
(Unaudited)
Three Months Ended June 29, 2003
Excluding QSI QSI Total QUALCOMM
Revenues:
Equipment and services $652,233 $30,341 $682,574
Licensing and royalty fees 239,034 -- 239,034
891,267 30,341 921,608
Operating expenses:
Cost of equipment and
services revenues 286,250 40,652 326,902
Research and development 134,436 1,254 135,690
Selling, general and
administrative 109,294 8,192 117,486
Amortization of other
acquisition-related
intangible assets 1,951 -- 1,951
Asset impairment charges -- 34,113 34,113
Other -- (30,356) (30,356)
Total operating expenses 531,931 53,855 585,786
Operating income (loss) 359,336 (23,514) 335,822
Interest expense (260) (9,503) (9,763)
Investment income, net 38,978 (a) 5,454 (d) 44,432
Income (loss) before income taxes 398,054 (27,563)(b) 370,491
Income tax expense (131,357)(c) (47,445) (178,802)(c)
Net income (loss) $266,697 $(75,008) $191,689
Net earnings (loss) per
common share:
Diluted $0.33 (e) $(0.09)(e) $0.23 (e)
Shares used in per share
calculations:
Diluted 815,856 815,856 815,856
(a) Includes $29 million in interest income related to cash, cash
equivalents and marketable debt securities, which are not part of the
Company's strategic investment portfolio.
(b) Includes $20 million loss, net of minority interest, of Vesper
Holdings from March 1, 2003 through May 31, 2003 due to the Company's
practice of consolidating foreign subsidiaries one month in arrears.
(c) The estimated fiscal year 2003 effective tax rate for operations
excluding QSI and total QUALCOMM are 33% and 45%, respectively. The
change in the estimated 2003 effective tax rate for total QUALCOMM
from 43% used in the second quarter of fiscal 2003 results in a 48%
effective tax rate in the third quarter of fiscal 2003.
(d) Includes $30 million interest income, $21 million other-than-
temporary losses on investments, $21 million equity losses in
investees and $18 million realized gains on marketable securities.
(e) The sum of the earnings per share amounts may not equal total
earnings per share due to rounding.
QUALCOMM Incorporated
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THIS SCHEDULE IS TO ASSIST THE READER IN RECONCILING FROM
RESULTS EXCLUDING QSI TO TOTAL QUALCOMM RESULTS
(In thousands, except per share data)
(Unaudited)
Nine Months Ended June 29, 2003
Excluding QSI QSI Total QUALCOMM
Revenues:
Equipment and services $2,243,708 $85,811 $2,329,519
Licensing and royalty fees 732,301 -- 732,301
2,976,009 85,811 3,061,820
Operating expenses:
Cost of equipment and
services revenues 978,754 118,077 1,096,831
Research and development 374,440 5,530 379,970
Selling, general and
administrative 333,050 68,159 401,209
Amortization of other
acquisition-related
intangible assets 5,888 -- 5,888
Asset impairment charges -- 194,258 194,258
Other -- (30,356) (30,356)
Total operating expenses 1,692,132 355,668 2,047,800
Operating income (loss) 1,283,877 (269,857) 1,014,020
Interest expense (1,974) (18,549) (20,523)
Investment income
(expense), net 99,102 (a) (117,983)(d) (18,881)
Income (loss) before
income taxes 1,381,005 (406,389)(b) 974,616
Income tax (expense) benefit (455,732)(c) 17,155 (438,577)(c)
Net income (loss) $925,273 $(389,234) $536,039
Net earnings (loss) per
common share:
Diluted $1.13 (e) $(0.48)(e) $0.66 (e)
Shares used in per share
calculations:
Diluted 816,563 816,563 816,563
(a) Includes $83 million in interest income related to cash, cash
equivalents and marketable debt securities, which are not part of the
Company's strategic investment portfolio.
(b) Includes $212 million loss, net of minority interest, of Vesper
Holdings from September 1, 2002 through May 31, 2003 due to the
Company's practice of consolidating foreign subsidiaries one month in
arrears.
(c) The estimated fiscal year 2003 effective tax rate for operations
excluding QSI and total QUALCOMM are 33% and 45%, respectively.
(d) Includes $111 million other-than-temporary losses on investments,
$110 million equity losses in investees, $45 million interest income,
$37 million minority interest in loss of consolidated subsidiaries
and $23 million realized gains on marketable securities.
(e) The sum of the earnings per share amounts may not equal total
earnings per share due to rounding.
QUALCOMM Incorporated
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS AND MARKETABLE SECURITIES
THIS SCHEDULE IS TO ASSIST THE READER IN RECONCILING CASH FLOWS FROM CASH
CASH EQUIVALENTS AND MARKETABLE SECURITIES EXCLUDING QSI TO TOTAL
QUALCOMM CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended June 29, 2003 (c)
Excluding Total
QSI QSI QUALCOMM
Earnings before taxes,
depreciation, amortization
and other adjustments (1) $424,137 $26,714 $450,851
Working capital changes
and taxes paid (2) (110,163) 4,411 (105,752)
Net cash provided by
operating activities 313,974 31,125 345,099
Capital expenditures (44,176) (10,859) (55,035)
Net cash provided by
operating activities less
capital expenditures 269,798 20,266 290,064
Net additional share capital 19,980 -- 19,980
Repurchases of common stock (42,047) -- (42,047)
Dividends paid (79,007) -- (79,007)
Net collections of finance
receivables 55 282,734 282,789
Other investments -- (2,062) (2,062)
Other items (1,349) (9,228) (10,577)
Changes in fair value and
other changes to marketable
securities 17,766 32,823 50,589
Marketable securities pending
settlement payment (receipt) 94,712 (4,830) 89,882
Transfer from QSI (3) 354,965 (354,965) --
Transfer to QSI (4) (39,837) 39,837 --
Net increase in cash, cash
equivalents and marketable
securities (5) $595,036 $4,575 $599,611
(1) Reconciliation to GAAP:
Net income (loss) $266,697 $(75,008) $191,689
Non-cash adjustments (a) 153,547 119,969 273,516
Net realized gains on
marketable securities
and other investments (9,892) (18,247) (28,139)
Plus: Taxes paid 13,785 -- 13,785
Earnings before taxes,
depreciation,
amortization and other
adjustments $424,137 $26,714 $450,851
(2) Reconciliation to GAAP:
(Decrease) increase in
cash resulting from
changes in working
capital $(96,378) $4,411 $(91,967)
Minus: Taxes paid (13,785) -- (13,785)
Working capital changes
and taxes paid $(110,163) $4,411 $(105,752)
(3) Cash from loan payments
and sale of equity
securities.
(4) Funding for strategic debt
and equity investments,
operations of Vesper and
other QSI operating
expenses.
(5) Reconciliation to GAAP
cash flow statement:
Net decrease in cash
and cash equivalents
(GAAP) $(185,846) $(9,170) $(195,016)
Plus: Net purchase
(proceeds) of
marketable securities 668,404 (14,248) 654,156
Plus: Net increase in
fair value and other
changes to marketable
securities 17,766 32,823 50,589
Plus: Net increase in
marketable securities
pending settlement
payment (receipt) 94,712 (4,830) 89,882
Net increase in cash,
cash equivalents and
marketable securities $595,036 $4,575 $599,611
(a) See detail following the nine month cash flow schedule.
QUALCOMM Incorporated
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS AND MARKETABLE SECURITIES
THIS SCHEDULE IS TO ASSIST THE READER IN RECONCILING CASH FLOWS FROM CASH,
CASH EQUIVALENTS AND MARKETABLE SECURITIES EXCLUDING QSI TO TOTAL
QUALCOMM CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended June 29, 2003 (c)
Excluding Total
QSI QSI QUALCOMM
Earnings before taxes,
depreciation, amortization
and other adjustments (1) $1,475,201 $(16,830) $1,458,371
Working capital changes
and taxes paid (2) (227,637) 23,692 (203,945)
Net cash provided by
operating activities 1,247,564 6,862 1,254,426
Capital expenditures (157,515) (28,491) (186,006)
Net cash provided by operating
activities less capital
expenditures 1,090,049 (21,629) 1,068,420
Net additional share capital 132,676 -- 132,676
Repurchases of common stock (158,488) -- (158,488)
Dividends paid (79,007) -- (79,007)
Net collections of finance
receivables 6,845 654,956 661,801
Other investments -- (33,800) (33,800)
Other items (2,628) (31,391) (34,019)
Changes in fair value and
other changes to marketable
securities 42,123 46,151 88,274
Marketable securities pending
settlement payment (receipt) 127,767 (9,542) 118,225
Transfer from QSI (3) 747,665 (747,665) --
Transfer to QSI (4) (149,330) 149,330 --
Net increase in cash, cash
equivalents and marketable
securities (5) $1,757,672 $6,410 $1,764,082
(1) Reconciliation to GAAP:
Net income (loss) $925,273 $(389,234) $536,039
Non-cash adjustments (b) 487,992 395,800 883,792
Net realized gains on
marketable securities
and other investments (16,011) (23,396) (39,407)
Plus: Taxes paid 77,947 -- 77,947
Earnings (loss) before
taxes, depreciation,
amortization and other
adjustments $1,475,201 $(16,830) $1,458,371
(2) Reconciliation to GAAP:
(Decrease) increase in
cash resulting from
changes in working
capital $(149,690) $23,692 $(125,998)
Minus: Taxes paid (77,947) -- (77,947)
Working capital changes
and taxes paid $(227,637) $23,692 $(203,945)
(3) Cash from loan payments
and sale of equity
securities.
(4) Funding for strategic
debt and equity
investments, operations
of Vesper and other
QSI operating expenses.
(5) Reconciliation to GAAP
cash flow statement:
Net increase (decrease)
in cash and cash
equivalents (GAAP) $402,188 $(14,067) $388,121
Plus: Net purchase
(proceeds) of
marketable securities 1,187,679 (16,132) 1,171,547
Plus: Net increase in
fair value and other
changes to marketable
securities 42,123 46,151 88,274
Plus: Net increase in
marketable securities
pending settlement
payment (receipt) 127,767 (9,542) 118,225
Less: Proceeds from
trading securities
included in working
capital change (2,085) -- (2,085)
Net increase in cash,
cash equivalents and
marketable securities $1,757,672 $6,410 $1,764,082
(b) See detail on the following page.
QUALCOMM Incorporated
SUPPLEMENTAL DETAIL TO THE
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS AND MARKETABLE
SECURITIES
(In thousands)
(Unaudited)
Three Months Ended June 29, 2003
Excluding Total
QSI QSI QUALCOMM
(a) Non-cash adjustments are
comprised of:
Depreciation and
amortization $35,476 $7,567 $43,043
Asset impairment and
related charges -- 34,113 34,113
Change in fair values
of derivative
investments -- 1,381 1,381
Other-than-temporary
losses on marketable
securities and other
investments -- 21,105 21,105
Minority interest in
loss of consolidated
subsidiaries -- (242) (242)
Equity in losses of
investees 45 20,993 21,038
Non-cash income tax
expense 117,571 47,446 165,017
Other non-cash charges
and credits 455 (12,394) (11,939)
Total non-cash adjustments $153,547 $119,969 273,516
Nine Months Ended June 29, 2003
Excluding Total
QSI QSI QUALCOMM
(b) Non-cash adjustments are
comprised of:
Depreciation and
amortization $101,216 $31,353 $132,569
Asset impairment and
related charges -- 194,258 194,258
Change in fair values
of derivative
investments -- 1,261 1,261
Other-than-temporary
losses on marketable
securities and other
investments 349 111,306 111,655
Minority interest in
loss of consolidated
subsidiaries -- (36,795) (36,795)
Equity in losses of
investees 45 110,219 110,264
Non-cash income tax
expense 377,785 (17,155) 360,630
Other non-cash charges
and credits 8,597 1,353 9,950
Total non-cash adjustments $487,992 $395,800 883,792
(c) The Company's management uses this non-GAAP presentation to analyze
increases and decreases in certain of its liquid assets, comprised of
cash, cash equivalents and marketable securities. Management views
certain marketable debt securities as liquid assets available to fund
operations, which result from cash management strategies designed to
increase yields. However, these instruments do not meet the
definition of cash equivalents in accordance with Statement of
Financial Standards No. 95, "Statement of Cash Flows" and must be
excluded from the GAAP statements of cash flows. Since the GAAP
statements of cash flows reconcile the Company's beginning and ending
cash and cash equivalents balances, the purchases and sales of
marketable securities are presented as inflows and outflows. For
internal analysis of the Company's cash position, management does not
view these transactions as inflows and outflows from the business,
but as cash management transactions. If required, such investments
could be settled relatively quickly as additional cash resources are
needed. The Company believes that this non-GAAP presentation is a
helpful measure of the Company's liquidity.
QUALCOMM Incorporated
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)
ASSETS
QUALCOMM
Excluding
QSI QSI (a)(b) QUALCOMM QUALCOMM
June 29, June 29, June 29, September 29,
2003 2003 2003 2002
Current assets:
Cash and cash
equivalents $1,785,824 $9,001 $1,794,825 $1,406,704
Marketable
securities 2,524,102 41,091 2,565,193 1,411,178
Accounts
receivable, net 577,016 43,064 620,080 536,950
Finance
receivables, net 3,505 382 3,887 388,396
Inventories, net 111,890 11,107 122,997 88,094
Deferred tax
assets (b) 608,528 -- 608,528 122
Other current
assets 114,244 22,000 136,244 109,322
Total current
assets 5,725,109 126,645 5,851,754 3,940,766
Marketable securities 469,903 133,673 603,576 381,630
Finance receivables,
net 4,187 180,083 184,270 442,934
Other investments 4,722 133,952 138,674 276,414
Property, plant and
equipment, net 508,918 110,471 619,389 686,283
Goodwill, net 344,753 1,865 346,618 344,803
Deferred tax
assets (b) 309,314 -- 309,314 7,493
Other assets 231,371 185,036 416,407 425,725
Total assets $7,598,277 $871,725 $8,470,002 $6,506,048
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts
payable $108,258 $64,834 $173,092 $209,418
Payroll and other
benefits related
liabilities 117,284 8,265 125,549 126,005
Unearned revenue 171,367 6,758 178,125 183,482
Current portion of
long-term debt -- 98,416 98,416 19,355
Other current
liabilities 243,210 28,936 272,146 136,726
Total current
liabilities 640,119 207,209 847,328 674,986
Unearned revenue 258,147 135 258,282 259,995
Long-term debt -- 107,118 107,118 94,288
Other liabilities 48,552 3,127 51,679 40,283
Total liabilities 946,818 317,589 1,264,407 1,069,552
Minority interest in
consolidated
subsidiaries 50 -- 50 44,540
Stockholders' equity:
Preferred stock,
$0.0001 par value -- -- -- --
Common stock,
$0.0001 par value 80 -- 80 79
Paid-in capital 6,184,743 -- 6,184,743 4,918,202
Retained earnings 1,061,656 -- 1,061,656 604,624
Accumulated other
comprehensive loss (29,421) (11,513) (40,934) (130,949)
Total
stockholders'
equity 7,217,058 (11,513) 7,205,545 5,391,956
Total
liabilities and
stockholders'
equity $8,163,926 $306,076 $8,470,002 $6,506,048
(a) Includes the consolidated Vesper Holdings balance sheet at May 31,
2003. The Company consolidates foreign subsidiaries one month in
arrears.
(b) Deferred tax assets and liabilities are not allocated to the
Company's segments. A valuation allowance was provided on all net
deferred tax assets of investments that are consolidated by QSI,
including Vesper, because of uncertainty regarding their realization.
QUALCOMM Incorporated
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
June 29, June 30, June 29, June 30,
2003 2002 2003 2002
Revenues:
Equipment and
services $682,574 $575,434 $2,329,519 $1,568,656
Licensing and
royalty fees 239,034 195,483 732,301 597,018
921,608 770,917 3,061,820 2,165,674
Operating expenses:
Cost of equipment
and services
revenues 326,902 288,162 1,096,831 825,273
Research and
development 135,690 118,086 379,970 341,709
Selling, general
and administrative 117,486 152,072 401,209 376,797
Amortization of
goodwill and other
acquisition-related
intangible assets 1,951 65,024 5,888 192,437
Asset impairment
charges 34,113 -- 194,258 --
Other (30,356) 8,955 (30,356) 8,955
Total operating
expenses 585,786 632,299 2,047,800 1,745,171
Operating income 335,822 138,618 1,014,020 420,503
Interest expense (9,763) (8,639) (20,523) (17,357)
Investment income
(expense), net 44,432 (184,123) (18,881) (171,098)
Income (loss) before
income taxes 370,491 (54,144) 974,616 232,048
Income tax (expense)
benefit (178,802) 40,376 (438,577) (62,653)
Net income (loss) $191,689 $(13,768) $536,039 $169,395
Net earnings (loss)
per common share:
Basic $0.24 $(0.02) $0.68 $0.22
Diluted $0.23 $(0.02) $0.66 $0.21
Shares used in per share
calculations:
Basic 790,511 773,127 787,606 768,663
Diluted 815,856 773,127 (a) 816,563 809,169
Dividends declared
per share $0.05 $-- $0.10 $--
(a) The diluted share base excludes the potential dilutive effect of
common share equivalents related to outstanding stock options,
calculated using the treasury stock method, as these shares are anti-
dilutive.
07/23/03 4:17 PM
AI
