Qualcomm Announces First Quarter Fiscal 2013 Results
FOR IMMEDIATE RELEASE
Qualcomm Contact:
Warren Kneeshaw
Phone: 1-858-658-4813
e-mail:
ir@qualcomm.com
Qualcomm Announces First Quarter Fiscal 2013 Results
Revenues $6.0 Billion
GAAP EPS $1.09, Non-GAAP EPS $1.26
—
Record Quarterly Revenues and Non-GAAP EPS; Raising Fiscal 2013 Guidance —
SAN DIEGO
— January 30, 2013 — Qualcomm Incorporated (Nasdaq: QCOM), a leading
developer and innovator of advanced wireless technologies, products and services, today
announced results for the first quarter of fiscal 2013 ended December 30, 2012.
"
We are pleased to report record quarterly revenues, Non-GAAP EPS and MSM chip
shipments, driven by the growing global demand for smartphones and our industry-leading
portfolio of 3G/LTE chipsets," said Dr. Paul E. Jacobs, chairman and CEO of
Qualcomm.
"Our broad licensing partnerships and extensive chipset roadmap, including our
recently announced best-in-class Qualcomm Snapdragon 800 and 600 processors, position us
well for strong growth, and we are pleased to be raising our revenue and earnings guidance for
fiscal 2013."
First Quarter Results (GAAP)
Revenues: 1 $6.02 billion, up 29 percent year-over-year (y-o-y) and 24 percent
sequentially.
Operating income: 1 $2.09 billion, up 35 percent y-o-y and 69 percent sequentially.
Net income: 2 $1.91 billion, up 36 percent y-o-y and 50 percent sequentially.
Diluted earnings per share: 2 $1.09, up 35 percent y-o-y and 49 percent sequentially.
Effective tax rate: 1 18 percent for the quarter.
Operating cash flow: $1.98 billion, up 11 percent y-o-y; 33 percent of revenues.
1
Throughout this news release, fiscal 2012 results for FLO TV are presented as discontinued operations. Revenues, operating
expenses, operating income, earnings before tax (EBT) and effective tax rates are from continuing operations (i.e., before
adjustments for noncontrolling interests and, for fiscal 2012, discontinued operations), unless otherwise stated.
2
Throughout this news release, net income and diluted earnings per share are attributable to Qualcomm (i.e., after adjustments
for noncontrolling interests and discontinued operations), unless otherwise stated.
Qualcomm Announces First Quarter of Fiscal 2013 Results Page 2 of 16
Return of capital to stockholders: $678 million, including $428 million, or $0.25 per
share, of cash dividends paid, and $250 million through repurchases of 4.3 million
shares of common stock.
Non-GAAP First Quarter Results
Non-GAAP results exclude the QSI segment, certain share-based compensation, certain
acquisition-related items and certain tax items.
Revenues: $6.02 billion, up 29 percent y-o-y and 24 percent sequentially.
Operating income: $2.45 billion, up 31 percent y-o-y and 52 percent sequentially.
Net income: $2.20 billion, up 32 percent y-o-y and 42 percent sequentially.
Diluted earnings per share: $1.26, up 30 percent y-o-y and 42 percent sequentially.
Excludes $0.01 loss per share attributable to QSI, $0.12 loss per share attributable to
certain share-based compensation and $0.04 loss per share attributable to certain
acquisition-related items.
Effective tax rate: 18 percent for the quarter.
Free cash flow (defined as net cash from operating activities less capital expenditures):
$1.85 billion, up 24 percent y-o-y; 31 percent of revenues.
Detailed reconciliations between results reported in accordance with generally accepted
accounting principles (GAAP) and Non-GAAP results are included within this news release.
First Quarter Key Business Metrics
MSMTM chip shipments: 182 million units, up 17 percent y-o-y and 29 percent
sequentially.
September quarter total reported device sales: approximately $53.3 billion, up 29
percent y-o-y and 15 percent sequentially.
o
September quarter estimated 3G/4G device shipments: approximately 233 to
237 million units, at an estimated average selling price of approximately $224
to $230 per unit.
Cash and Marketable Securities
Our cash, cash equivalents and marketable securities totaled $28.4 billion at the end of the first
quarter of fiscal 2013, compared to $22.0 billion a year ago and $26.8 billion at the end of the
Qualcomm Announces First Quarter of Fiscal 2013 Results Page 3 of 16
fourth quarter of fiscal 2012. On January 15, 2013, we announced a cash dividend of $0.25 per
share payable on March 27, 2013 to stockholders of record as of March 8, 2013.
Research and Development
($ in millions)
Non-GAAP QSI
Share-Based
Compensation GAAP
First quarter fiscal 2013 $ 949 $ 1 $ 156 $ 1,106
As % of revenues 16% 18%
First quarter fiscal 2012 $ 746 $ 1 $ 126 $ 873
As % of revenues 16% 19%
Year-over-year change ($) 27% N/M 24% 27%
N/M - Not Meaningful
Non-GAAP research and development (R&D) expenses increased 27 percent y-o-y primarily
due to an increase in costs related to the development of CDMA-based 3G, OFDMA-based 4G
LTE and other technologies for integrated circuit and related software products and to expand
our intellectual property portfolio.
Selling, General and Administrative
($ in millions)
Non-GAAP QSI
Share-Based
Compensation
Acquisition-
Related Items GAAP
First quarter fiscal 2013 $ 468 $ 7 $ 105 $ 7 $ 587
As % of revenues 8% 10%
First quarter fiscal 2012 $ 381 $ 12 $ 101 $ 9 $ 503
As % of revenues 8% 11%
Year-over-year change ($) 23% N/M 4% N/M 17%
N/M - Not Meaningful
Non-GAAP selling, general and administrative (SG&A) expenses increased 23 percent y-o-y
primarily due to increases in employee-related expenses and costs relating to legal matters.
Effective Income Tax Rates
In the first quarter of fiscal 2013, the effective income tax rates for GAAP and Non-GAAP
were both 18 percent. Starting in the second quarter of fiscal 2013, our fiscal 2013 annual
effective income tax rates are estimated to be approximately 16 percent for GAAP and
Qualcomm Announces First Quarter of Fiscal 2013 Results Page 4 of 16
approximately 17 to 18 percent for Non-GAAP, which include the recent retroactive extension
of the federal R&D tax credit. The R&D tax credit benefit related to fiscal 2012 that will be
recorded in the second quarter of fiscal 2013 will be excluded from Non-GAAP results.
QSI Segment
QSI makes strategic investments, many of which are in early-stage companies, and holds
wireless spectrum. GAAP results for the first quarter of fiscal 2013 included $0.01 loss per
share for QSI.
Business Outlook
The following statements are forward looking, and actual results may differ materially. The
"Note Regarding Forward
-Looking Statements" in this news release provides a description of
certain risks that we face, and our annual and quarterly reports on file with the Securities and
Exchange Commission (SEC) provide a more complete description of risks.
Our outlook does not include provisions for future asset impairments or for pending legal
matters, other than future legal amounts that are probable and estimable. Further, due to their
nature, certain income and expense items, such as realized investment and certain derivative
gains or losses, cannot be accurately forecast. Accordingly, we only include such items in our
business outlook to the extent they are reasonably certain; however, actual results may vary
materially from the business outlook.
The following table summarizes GAAP and Non-GAAP guidance based on the current
business outlook. The Non-GAAP business outlook presented below is consistent with the
presentation of Non-GAAP results included elsewhere herein.
Qualcomm Announces First Quarter of Fiscal 2013 Results Page 5 of 16
SECOND FISCAL QUARTER
Q2 FY12 Current Guidance
Results (1) Q2 FY13 Estimates
Revenues $4.94B $5.8B - $6.3B
Year-over-year change increase 17% - 27%
Non-GAAP Diluted earnings per share (EPS) $1.01 $1.10 - $1.18
Year-over-year change increase 9% - 17%
Diluted EPS attributable to QSI $0.41 $0.00
Diluted EPS attributable to share-based compensation ($0.11) ($0.12)
Diluted EPS attributable to acquisition-related items ($0.03) ($0.04)
Diluted EPS attributable to tax items (2) N/A $0.04
GAAP Diluted EPS $1.28 $0.98 - $1.06
Year-over-year change decrease 17% - 23%
Metrics
MSM chip shipments 152M 163M - 173M
Year-over-year change increase 7% - 14%
Total reported device sales (3) approx. $51.7B* approx. $57.5B - $62.5B*
Year-over-year change increase 11% - 21%
*Est. sales in December quarter, reported in March quarter
FISCAL YEAR
FY 2012 Prior Guidance Current Guidance
Results (1) FY 2013 Estimates FY 2013 Estimates
Revenues $19.12B $23.0B - $24.0B $23.4B - $24.4B
Year-over-year change increase 20% - 26% increase 22% - 28%
Non-GAAP Diluted EPS $3.71 $4.12 - $4.32 $4.25 - $4.45
Year-over-year change increase 11% - 16% increase 15% - 20%
Diluted EPS attributable to QSI $0.40 ($0.04) ($0.02)
Diluted EPS attributable to share-based compensation ($0.47) ($0.53) ($0.51)
Diluted EPS attributable to acquisition-related items ($0.14) ($0.15) ($0.15)
Diluted EPS attributable to tax items (2) $0.01 N/A $0.04
GAAP Diluted EPS $3.51 $3.40 - $3.60 $3.61 - $3.81
Year-over-year change decrease 3% - increase 3% increase 3% - 9%
Metrics
Est. fiscal year* 3G/4G device average selling price range (3) approx. $216 - $222 approx. $214 - $226 approx. $214 - $226
*Shipments in Sept. to June quarters, reported in Dec. to Sept. quarters
CALENDAR YEAR Device Estimates (3)
Prior Guidance
Calendar 2012
Estimates
Current Guidance
Calendar 2012
Estimates
Prior Guidance
Calendar 2013
Estimates
Current Guidance
Calendar 2013
Estimates
Est. 3G/4G device shipments
March quarter approx. 206M - 211M approx. 206M - 211M not provided not provided
June quarter approx. 210M - 214M approx. 210M - 214M not provided not provided
September quarter not provided approx. 233M - 237M not provided not provided
December quarter not provided not provided not provided not provided
Est. calendar year range (approx.) 880M - 930M 915M - 940M 1,000M - 1,070M 1,000M - 1,070M
Est. calendar year midpoint (approx.) (4) 905M 928M 1,035M 1,035M
Qualcomm's Business Outlook Summary
(1) Q2 FY12 and FY 2012 results for QSI and GAAP included $0.44 EPS related to a $1.2 billion gain associated with the sale of substantially all
of our 700 MHz spectrum, which was recognized in discontinued operations and was excluded from Non-GAAP results.
(2) In the second quarter of fiscal 2013, we expect to record a tax benefit as a result of the retroactive extension of the federal R&D tax credit
related to fiscal 2012 of approximately $0.04 per share, which will be excluded from Non-GAAP results.
(3) Total reported device sales is the sum of all reported sales in U.S. dollars (as reported to us by our licensees) of all licensed CDMA-based,
OFDMA-based and multimode CDMA/OFDMA subscriber devices (including handsets, modules, modem cards and other subscriber devices)
by our licensees during a particular period (collectively, 3G/4G devices). The reported quarterly estimated ranges of average selling prices
(ASPs) and unit shipments are determined based on the information as reported to us by our licensees during the relevant period and our own
estimates of the selling prices and unit shipments for licensees that do not provide such information. Not all licensees report sales, selling
prices and/or unit shipments the same way (e.g., some licensees report selling prices net of permitted deductions, such as transportation,
insurance and packing costs, while other licensees report selling prices and then identify the amount of permitted deductions in their reports),
and the way in which licensees report such information may change from time to time. Total reported device sales, estimated unit shipments
and estimated ASPs for a particular period may include prior period activity that was not reported by the licensee until such particular period.
(4) The midpoints of the estimated calendar year ranges are identified for comparison purposes only and do not indicate a higher degree of
confidence in the midpoints.
N/A
– Not Applicable
Sums may not equal totals due to rounding.
Qualcomm Announces First Quarter of Fiscal 2013 Results Page 6 of 16
Results of Business Segments
The following table reconciles our Non-GAAP results to our GAAP results (in millions, except per share data):
SEGMENTS QCT QTL QWI
Non-GAAP
Reconciling
Items (1)
Non-GAAP
(2) QSI (2)
Share-Based
Compensation (2)
Acquisition-
Related Items
(2) Tax Items GAAP
Q1 - FISCAL 2013
Revenues $4,120 $1,757 $146 ($5) $6,018 $ - $ - $ - $ - $6,018
Change from prior year 34% 22% (4%) N/M 29% 29%
Change from prior quarter 32% 12% (9%) N/M 24% 24%
Operating income (loss) $2,447 ($8) ($281) ($70) $ - $2,088
Change from prior year 31% 38% (14%) (17%) 35%
Change from prior quarter 52% (100%) 1% 21% 69%
EBT $1,068 $1,532 ($3) $98 $2,695 ($17) ($281) ($70) $ - $2,327
Change from prior year 45% 21% N/M 78% 31% 50% (14%) (17%) 35%
Change from prior quarter 120% 12% N/M 51% 40% 19% 1% 21% 52%
EBT as % of revenues 26% 87% N/M N/M 45% 39%
Net income (loss) $2,204 ($12) ($219) ($67) $ - $1,906
Change from prior year 32% 45% (13%) (22%) N/A 36%
Change from prior quarter 42% N/M 1% 14% N/M 50%
Diluted EPS $1.26 ($0.01) ($0.12) ($0.04) $ - $1.09
Change from prior year 30% 0% (9%) (33%) N/A 35%
Change from prior quarter 42% N/M 8% 0% N/M 49%
Diluted shares used 1,751 1,751 1,751 1,751 1,751 1,751
Q4 - FISCAL 2012
Revenues $3,129 $1,572 $161 $9 $4,871 $ - $ - $ - $ - $4,871
Operating income (loss) 1,612 (4) (284) (89) - 1,235
EBT $486 $1,370 ($1) $65 1,920 (21) (284) (89) - 1,526
Discontinued operations, net of tax
- 23 - - - 23
Net income (loss) 1,547 14 (222) (78) 10 1,271
Diluted EPS $0.89 $0.01 ($0.13) ($0.04) $0.01 $0.73
Diluted shares used 1,745 1,745 1,745 1,745 1,745 1,745
Q2 - FISCAL 2012
Revenues $3,059 $1,723 $159 $2 $4,943 $ - $ - $ - $ - $4,943
Operating income (loss) 1,900 (89) (240) (57) - 1,514
EBT $599 $1,540 ($10) $1 2,130 (99) (240) (57) - 1,734
Discontinued operations, net of tax
- 761 - - - 761
Net income (loss) 1,759 707 (184) (52) - 2,230
Diluted EPS $1.01 $0.41 ($0.11) ($0.03) $ - $1.28
Diluted shares used 1,743 1,743 1,743 1,743 1,743 1,743
Q1 - FISCAL 2012
Revenues $3,085 $1,440 $152 $4 $4,681 $ - $ - $ - $ - $4,681
Operating income (loss) 1,871 (13) (247) (60) - 1,551
EBT $739 $1,267 $1 $55 2,062 (34) (247) (60) - 1,721
Discontinued operations, net of tax
- (5) - - - (5)
Net income (loss) 1,672 (22) (194) (55) - 1,401
Diluted EPS $0.97 ($0.01) ($0.11) ($0.03) $ - $0.81
Diluted shares used 1,721 1,721 1,721 1,721 1,721 1,721
12 MONTHS - FISCAL 2012
Revenues $12,141 $6,327 $633 $20 $19,121 $ - $ - $ - $ - $19,121
Operating income (loss) 7,100 (116) (1,035) (267) - 5,682
EBT $2,296 $5,585 ($15) $168 8,034 (170) (1,035) (267) - 6,562
Discontinued operations, net of tax
- 777 (1) - - 776
Net income (loss) 6,463 690 (811) (243) 10 6,109
Diluted EPS $3.71 $0.40 ($0.47) ($0.14) $0.01 $3.51
Diluted shares used 1,741 1,741 1,741 1,741 1 ,741 1,741
(1) Non-GAAP reconciling items related to revenues consist primarily of other nonreportable segment revenues less intersegment
eliminations. Non-GAAP reconciling items related to earnings before taxes consist primarily of certain costs of equipment and services
revenues, research and development expenses, sales and marketing expenses, other operating expenses and certain investment income or
losses and interest expense that are not allocated to the segments for management reporting purposes; nonreportable segment results; and
the elimination of intersegment profit.
(2) At fiscal year end, the sum of the quarterly tax provision (benefit) for each column equals the annual tax provision (benefit) for each
column computed in accordance with GAAP. In interim quarters, the sum of these provisions (benefits) may not equal the total GAAP
tax provision, and this difference is allocated to tax provisions (benefits) among the columns.
N/M
– Not Meaningful
N/A
– Not Applicable
Sums may not equal totals due to rounding.
Qualcomm Announces First Quarter of Fiscal 2013 Results Page 7 of 16
Conference Call
Qualcomm
's first quarter fiscal 2013 earnings conference call will be broadcast live on January
30, 2013, beginning at 1:45 p.m. Pacific Time (PT) at
http://investor.qualcomm.com/events.cfm
. This conference call will include a discussion of
"
Non-GAAP financial measures" as defined in Regulation G. The most directly comparable
GAAP financial measures and GAAP reconciliation information, as well as the other material
financial and statistical information to be discussed on the conference call, will be posted at
www.qualcomm.com/investor
immediately prior to commencement of the call. An audio
replay will be available at
http://investor.qualcomm.com/events.cfm and via telephone for 30
days shortly following the live call. To listen to the replay via telephone, U.S. callers may dial
(855) 859-2056, and international callers may dial (404) 537-3406. Callers should use
reservation number 85067601.
Note Regarding Use of Non-GAAP Financial Measures
The Non-GAAP financial information presented herein should be considered in addition to, not
as a substitute for, or superior to, financial measures calculated in accordance with GAAP. In
addition, "Non
-GAAP" is not a term defined by GAAP, and as a result, the Company's
measure of Non-GAAP results might be different than similarly titled measures used by other
companies. Reconciliations between GAAP and Non-GAAP results are presented herein.
The Company uses Non-GAAP financial information (i) to evaluate, assess and benchmark the
Company's operating results on a c
onsistent and comparable basis; (ii) to measure the
performance and efficiency of the Company's ongoing core operating businesses, including the
QCT, QTL and QWI segments; and (iii) to compare the performance and efficiency of these
segments against each other and against competitors outside the Company. Non-GAAP
measurements of the following financial data are used by the Company: revenues, cost of
revenues, R&D expenses, SG&A expenses, other operating expenses, operating income (loss),
net investment income (loss), income (loss) before income taxes, effective tax rate, net income
(loss), diluted earnings (loss) per share, operating cash flow and free cash flow. The Company
is able to assess what it believes is a more meaningful and comparable set of financial
performance measures for the Company and its business segments by using Non-GAAP
information. As a result, management compensation decisions and the review of executive
compensation by the Compensation Committee of the Board of Directors focus primarily on
Qualcomm Announces First Quarter of Fiscal 2013 Results Page 8 of 16
Non-GAAP financial measures applicable to the Company and its business segments. The
Company presents Non-GAAP financial information to provide greater transparency to
investors with respect to its use of such information in financial and operational decisionmaking.
Non-GAAP information used by management excludes QSI, certain share-based
compensation, certain acquisition-related items and certain tax items.
QSI is excluded because the Company expects to exit its strategic investments at various
times, and the effects of fluctuations in the value of such investments and realized gains or
losses
are viewed by management as unrelated to the Company's operational performance.
Share-based compensation expense primarily relates to restricted stock units and stock
options. Certain share-based compensation is excluded because management views such
expenses as unrelated to the operating activities of th
e Company's ongoing core business.
Further, the fair values of share-based awards are affected by factors that are variable on
each grant date, which may include
the Company's stock price, stock market volatility,
expected award life, risk-free interest rates and expected dividend payouts in future years.
Acquisition-related items relate to amortization and impairment charges of certain
intangible assets, recognition of the step-up of inventories to fair value and the related tax
effects of these items starting with acquisitions completed in the third quarter of fiscal
2011, as well as any tax effects from restructuring the ownership of such acquired assets.
Additionally, starting with acquisitions completed in the fourth quarter of fiscal 2012, the
Company began excluding expenses related to the termination of contract(s) that limit the
use of the acquired intellectual property. These certain acquisition-related items are
excluded and are not allocated to
the Company's segments because management views
such expenses as
unrelated to the operating activities of the Company's ongoing core
business. In addition, these charges are impacted by the size and timing of acquisitions,
potentially obscuring period to period comparisons of the Company's operating businesses.
Certain tax items that were recorded in each fiscal year presented, but that were unrelated
to the fiscal year in which they were recorded, are excluded in order to provide a clearer
understanding of the Company's ongoing Non
-GAAP tax rate and after tax earnings.
Qualcomm Announces First Quarter of Fiscal 2013 Results Page 9 of 16
The Company presents free cash flow, defined as net cash provided by operating activities less
capital expenditures, to facilitate an understanding of the amount of cash flow generated that is
available to grow its business and to create long-term stockholder value. The Company
believes that this presentation is useful in evaluating its operating performance and financial
strength.
In addition, management uses this measure to evaluate the Company's performance
and to compare its operating performance with other companies in the industry.
About Qualcomm
Qualcomm Incorporated (Nasdaq: QCOM) is a world leader in 3G, 4G and next-generation
wireless technologies.
Qualcomm Incorporated includes Qualcomm's licensing business,
QTL, and the vast majority of its patent portfolio. Qualcomm Technologies, Inc., a whollyowned
subsidiary of Qualcomm Incorporated, operates, along with its subsidiaries,
substantially all of Qualcomm's engineering, research and development functions, and
substantially all of its products and services businesses, including its semiconductor business,
QCT. For more than 25 years, Qualcomm ideas and inventions have driven the evolution of
digital communications, linking people everywhere more closely to information, entertainment
and each other. For more information, visit
www.qualcomm.com.
Note Regarding Forward-Looking Statements
In addition to the historical information contained herein, this news release contains forwardlooking
statements that are inherently subject to risks and uncertainties, including but not
limited to statements regarding
the Company's broad licensing partnerships and extensive
chipset roadmap positioning it for strong growth;
the Company's business outlook; estimates
and guidance related to revenues, GAAP and Non-GAAP diluted earnings per share,
effective income tax rates, MSM chip shipments, total reported device sales, 3G/4G device
average selling price ranges and 3G/4G device shipment ranges and midpoints; and the
treatment of the tax credit benefit resulting from the retroactive extension of the federal R&D
tax credit. Forward-
looking statements are generally identified by words such as "expects,"
"anticipates," "intends," "plans," "believes," "seeks," "estimates," "guidance" and similar
expressions. Actual results may differ materially from those referred to in the forwardlooking
statements due to a number of important factors, including but not limited to risks
associated with the commercial deployment of our technologies
and our customers' and
licensees' sales of equipment, products and
services based on these technologies;
Qualcomm Announces First Quarter of Fiscal 2013 Results Page 10 of 16
competition; our dependence on a small number of customers and licensees; attacks on our
licensing business model, including current and future legal proceedings and actions of
governmental or quasi-governmental bodies; our dependence on third-party suppliers,
including the potential impact of supply constraints; the enforcement and protection of our
intellectual property rights; claims by third parties that we infringe their intellectual property;
global economic conditions that impact the communications industry and the potential
impact on demand for our products
and our customers' and licensees' products; our stock
price and earnings volatility; strategic transactions and investments; the commercial success
of our QMT
division's display technology; foreign currency fluctuations; and failures,
defects or errors in our products and services or in the products of our customers and
licensees
. These and other risks are set forth in the Company's Annual Report on Form 10-K
for the fiscal year ended September 30, 2012 and Quarterly Report on Form 10-Q for the
fiscal quarter ended December 30, 2012 filed with the SEC. Our reports filed with the SEC
are available on our website at
www.qualcomm.com. We undertake no obligation to update,
or continue to provide information with respect to, any forward-looking statement or risk
factor, whether as a result of new information, future events or otherwise.
###
Qualcomm, Snapdragon and MSM are trademarks of Qualcomm Incorporated, registered in the United States and
other countries. All other trademarks are the property of their respective owners.
Qualcomm Announces First Quarter of Fiscal 2013 Results Page 11 of 16
GAAP
Results
($ in millions, except per share data)
Cost of equipment and services revenues $ 2,154 $ - $ 20 $ 63 $ 2,237
R&D 949 1 156 - 1,106
SG&A 468 7 105 7 587
Operating income (loss) 2,447 (8) (281) (70) 2,088
Investment income (loss), net $ 248
(b) $ (9) (c) $ - $ - $ 239
Tax rate 18% 12% 22% 4% 18%
Net income (loss) $ 2,204 $ (12) $ (219) $ (67) $ 1,906
Diluted earnings (loss) per share (EPS) $ 1.26 $ (0.01) $ (0.12) $ (0.04) $ 1.09
Operating cash flow $ 2,046 $ (10) $ (61) $ - $ 1,975
Operating cash flow as % of revenues 34% N/A N/A N/A 33%
Free cash flow
(d)
$ 1,853 $ (22) $ (61) $ - $ 1,770
Free cash flow as % of revenues 31% N/A N/A N/A 29%
Related
Items (a)
Qualcomm Incorporated
Results
Non-GAAP Share-Based
Compensation
Supplemental Information for the Three Months Ended December 30, 2012
(Unaudited)
QSI
Acquisition-
(a) Included amortization and impairment charges of certain intangible assets, expense associated with the termination of a contract of an
acquiree and the recognition of the step-up of inventories to fair value.
(b) Included $164 million in interest and dividend income and $91 million in net realized gains on investments, partially offset by $4 million
in other-than-temporary losses on investments, $2 million in interest expense and $1 million in losses on derivatives.
(c) Included $6 million in other-than-temporary losses on investments, $6 million in interest expense and $3 million in equity in losses of
investees, partially offset by $5 million in net realized gains on investments and $1 million in interest and dividend income.
(d) Free cash flow is calculated as net cash provided by operating activities less capital expenditures. Reconciliation of these amounts is
included in the "Reconciliation of Non
-GAAP Free Cash Flows to Net Cash Provided by Operating Activities (GAAP) and Other
Supplemental Disclosures" for the three months
ended December 30, 2012 included herein.
N/A
– Not Applicable
Sums may not equal totals due to rounding.
Qualcomm Announces First Quarter of Fiscal 2013 Results Page 12 of 16
Share-Based
Non-GAAP QSI Compensation GAAP
Net cash provided (used) by operating activities
$ 2,046 $ (10) $ (61) (a) $ 1,975
Less: capital expenditures (193) (12) - (205)
Free cash flow
$ 1,853 $ (22) $ (61) $ 1,770
Revenues $ 6,018 $ - $ - $ 6,018
Free cash flow as % of revenues 31%
N/A N/A 29%
Other supplemental cash disclosures:
Cash transfers from QSI (b) $ 7 $ (7) $ - $ -
Cash transfers to QSI (c) (103) 103 - -
Net cash transfers $ (96) $ 96 $ - $ -
Share-Based
Non-GAAP QSI Compensation GAAP
Net cash provided (used) by operating activities
$ 1,850 $ (48) $ (23) (a) $ 1,779
Less: capital expenditures (359) - - (359)
Free cash flow
$ 1,491 $ (48) $ (23) $ 1,420
Qualcomm Incorporated
Reconciliation of Non-GAAP Free Cash Flows to
Net Cash Provided by Operating Activities (GAAP)
(In millions)
and Other Supplemental Disclosures
Three Months Ended December 30, 2012
(Unaudited)
Three Months Ended December 25, 2011
(a) Incremental tax benefits from share-based compensation during the period.
(b) Primarily cash from sale of equity securities and other investments.
(c) Primarily funding for strategic debt and equity investments, other investing activities and QSI operating and capital expenditures.
N/A - Not Applicable
Qualcomm Announces First Quarter of Fiscal 2013 Results Page 13 of 16
Acquisition-
Non-GAAP Share-Based Related GAAP
Results QSI Compensation Items Results
Income (loss) from continuing operations
before income taxes $ 2,695 $ (17) $ (281) $ (70) $ 2,327
Income tax (expense) benefit (491) 2 62 3 (424)
Income (loss) from continuing operations $ 2,204 $ (15) $ (219) $ (67) $ 1,903
Tax rate 18% 12% 22% 4% 18%
Three Months Ended December 30, 2012
Qualcomm Incorporated
Reconciliation of Non-GAAP Tax Rates to GAAP Tax Rates (a)
(in millions)
(Unaudited)
(a) At fiscal year end, the sum of the quarterly tax provision (benefit) for each column equals the annual tax provision (benefit) for each
column computed in accordance with GAAP. In interim quarters, the sum of these provisions (benefits) may not equal the total GAAP
tax provision, and this difference is allocated to tax provisions (benefits) among the columns.
Sums may not equal totals due to rounding.
Qualcomm Announces First Quarter of Fiscal 2013 Results Page 14 of 16
December 30, September 30,
2012 2012
Current assets:
Cash and cash equivalents $ 4,293 $ 3,807
Marketable securities 8,982 8,567
Accounts receivable, net 1,647 1,459
Inventories 1,277 1,030
Deferred tax assets 309 309
Other current assets 595 473
Total current assets 17,103 15,645
Marketable securities 15,096 14,463
Deferred tax assets 1,327 1,412
Assets held for sale 1,037 1,109
Property, plant and equipment, net 2,874 2,851
Goodwill 3,929 3,917
Other intangible assets, net 2,826 2,938
Other assets 649 677
Total assets $ 44,841 $ 43,012
Current liabilities:
Trade accounts payable $ 1,657 $ 1,298
Payroll and other benefits related liabilities 618 664
Unearned revenues 733 545
Liabilities held for sale 524 1,072
Other current liabilities 1,473 1,723
Total current liabilities 5,005 5,302
Unearned revenues 3,516 3,739
Liabilities held for sale 526 -
Other liabilities 440 426
Total liabilities 9,487 9,467
Stockholders' equity:
Qualcomm stockholders' equity:
Preferred stock, $0.0001 par value; 8 shares authorized; none outstanding - -
Common stock, $0.0001 par value; 6,000 shares authorized; 1,716
and 1,706 shares issued and outstanding, respectively - -
Paid-in capital 12,282 11,956
Retained earnings 22,172 20,701
Accumulated other comprehensive income 880 866
Total Qualcomm stockholders' equity
35,334 33,523
Noncontrolling interests 20 22
Total stockholders' equity
35,354 33,545
Total liabilities and stockholders' equity
$ 44,841 $ 43,012
Qualcomm Incorporated
(Unaudited)
ASSETS
LIABILITIES AND STOCKHOLDERS' EQUITY
(In millions, except per share data)
CONDENSED CONSOLIDATED BALANCE SHEETS
Qualcomm Announces First Quarter of Fiscal 2013 Results Page 15 of 16
December 30, December 25,
2012 2011
Revenues:
Equipment and services $ 4,199 $ 3,167
Licensing 1,819 1,514
Total revenues 6,018 4,681
Operating expenses:
Cost of equipment and services revenues 2,237 1,754
Research and development 1,106 873
Selling, general and administrative 587 503
Total operating expenses 3,930 3,130
Operating income 2,088 1,551
Investment income, net 239 170
Income from continuing operations before income taxes 2,327 1,721
Income tax expense (424) (321)
Income from continuing operations 1,903 1,400
Discontinued operations, net of income taxes - (5)
Net income 1,903 1,395
3 6
Net income attributable to Qualcomm $ 1,906 $ 1,401
Basic earnings per share attributable to Qualcomm:
Continuing operations $ 1.12 $ 0.83
Discontinued operations - -
Net income $ 1.12 $ 0.83
Diluted earnings per share attributable to Qualcomm:
Continuing operations $ 1.09 $ 0.81
Discontinued operations - -
Net income $ 1.09 $ 0.81
Shares used in per share calculations:
Basic 1,709 1,684
Diluted 1,751 1,721
Dividends per share announced $ 0.250 $ 0.215
Net loss attributable to noncontrolling interests
Three Months Ended
Qualcomm Incorporated
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
Qualcomm Announces First Quarter of Fiscal 2013 Results Page 16 of 16
December 30,
2012
December 25,
2011
Operating Activities:
Net income $ 1 ,903 $ 1,395
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 2 41 208
Revenues related to non-monetary exchanges (31) (31)
Income tax provision in excess of income tax payments 1 95 118
Non-cash portion of share-based compensation expense 2 83 247
Incremental tax benefit from share-based compensation (61) (23)
Net realized gains on marketable securities and other investments (96) (44)
Losses (gains) on derivative instruments 1 (45)
Net impairment losses on marketable securities and other investments 1 0 20
Other items, net 2 8 6
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable, net (185) (38)
Inventories (247) 50
Other assets (51) (24)
Trade accounts payable 3 76 26
Payroll, benefits and other liabilities (387) (43)
Unearned revenues (4) (43)
Net cash provided by operating activities 1 ,975 1,779
Investing Activities:
Capital expenditures (205) (359)
Purchases of available-for-sale securities (3,289) (2,027)
Proceeds from sale of available-for-sale securities 2 ,226 1,603
Purchases of trading securities (970) (1,137)
Proceeds from sale of trading securities 1 ,024 148
Acquisitions and other investments, net of cash acquired (39) (300)
Other items, net 2 6 4
Net cash used by investing activities (1,227) (2,068)
Financing Activities:
Proceeds from issuance of common stock 3 40 228
Incremental tax benefit from share-based compensation 6 1 23
Repurchases and retirements of common stock (250) (99)
Dividends paid (428) (362)
Change in obligation under securities lending 3 20
Other items, net (1) (1)
Net cash used by financing activities (275) (191)
Changes in cash and cash equivalents held for sale 1 3 -
Effect of exchange rate changes on cash and cash equivalents - (18)
Net increase (decrease) in cash and cash equivalents
4 86 (498)
Cash and cash equivalents at beginning of period
3 ,807 5,462
Cash and cash equivalents at end of period
$ 4 ,293 $ 4,964
