Qualcomm Incorporated

QUALCOMM Announces First Quarter Fiscal 2007 Results

San Diego (ots/PRNewswire) - - Revenues US$2.02 Billion, Diluted EPS US$0.38 - Pro Forma Revenues US$2.02 Billion, Diluted EPS US$0.43 - QUALCOMM Reaffirms Most Recent Fiscal 2007 Revenue and Pro Forma Earnings Guidance QUALCOMM Incorporated (Nasdaq: QCOM) today announced results for the first quarter of fiscal 2007 ended December 31, 2006. Total QUALCOMM (GAAP) First Quarter Results Total QUALCOMM results are reported in accordance with generally accepted accounting principles (GAAP). - Revenues: US$2.02 billion, up 16 percent year-over-year and 1 percent sequentially. - Net income: US$648 million, up 5 percent year-over-year and 6 percent sequentially. - Diluted earnings per share: US$0.38, up 6 percent year-over-year and 6 percent sequentially. - Effective tax rate: 17 percent for the quarter. Fiscal 2007 estimated tax rate of approximately 21 percent. - Estimated share-based compensation: US$87 million, net of tax, up 6 percent year-over-year and 14 percent sequentially. - Operating cash flow: US$789 million, up 32 percent year-over-year; 39 percent of revenues. - Return of capital to stockholders: in the quarter, dividends announced totaled US$198 million, or US$0.12 per share, which were paid on January 4, 2007, and US$96 million related to the repurchase of our common stock. QUALCOMM Pro Forma First Quarter Results Pro forma results exclude the QUALCOMM Strategic Initiatives (QSI) segment, certain estimated share-based compensation, certain tax adjustments related to prior years and acquired in-process research and development (R&D) expense. - Revenues: US$2.02 billion, up 16 percent year-over-year and 1 percent sequentially. - Net income: US$722 million, up 8 percent year-over-year and 2 percent sequentially. - Diluted earnings per share: US$0.43, up 10 percent year-over-year and 2 percent sequentially; excludes US$0.01 loss per share attributable to the QSI segment, US$0.05 loss per share attributable to estimated share-based compensation and US$0.02 earnings per share attributable to certain tax adjustments related to prior years. (The sum of pro forma earnings per share and items excluded do not equal total QUALCOMM (GAAP) earnings per share due to rounding). - Effective tax rate: 24 percent for the quarter. Fiscal 2007 estimated tax rate of approximately 25 percent. - Free cash flow: US$544 million, up 2 percent year-over-year; 27 percent of revenues. (Defined as net cash from operating activities less capital expenditures). Detailed reconciliations between total QUALCOMM (GAAP) results and QUALCOMM pro forma results, and cash flow are included at the end of this news release. Prior period reconciliations are presented on our Investor Relations web page at www.qualcomm.com. "Our results this quarter were driven by record 3G handset and chipset shipments," said Dr. Paul E. Jacobs, chief executive officer of QUALCOMM. "The worldwide migration to CDMA-based technologies is accelerating as we continue to execute with our partners to drive innovations into the marketplace." "An increasing number of subscribers and enterprise customers are benefiting from 3G's higher data rates enabling new applications including multimedia, 3D gaming, downloadable navigation and access to the wireless Internet. It is evident that the innovation and competition our business model enables has benefited wireless consumers, operators and manufacturers globally." "Based on our current outlook for CDMA-based handset shipments, we are pleased to reaffirm our calendar year 2007 forecast which represents approximately 28% year-over-year growth. We are also reaffirming our most recent fiscal 2007 revenue and pro forma diluted earnings per share guidance as adjusted by our recently announced acquisitions." Cash and Marketable Securities QUALCOMM's cash, cash equivalents and marketable securities totaled approximately US$10.5 billion at the end of the first quarter of fiscal 2007, compared to US$9.9 billion at the end of fiscal 2006 and US$9.4 billion a year ago. On January 12, 2007, we announced a cash dividend of US$0.12 per common share payable on March 30, 2007 to stockholders of record at the close of business on March 2, 2007. Estimated Share-Based Compensation Total QUALCOMM (GAAP) net income for the first quarter of fiscal 2007 included estimated share-based compensation, net of tax, of US$87 million, or US$0.05 per share, compared to US$82 million, or US$0.05 per share in the prior year quarter. Research and Development (All figures are in US$) Estimated Total QUALCOMM Share-Based QUALCOMM ($ in millions) Pro Forma Compensation QSI (GAAP) First quarter fiscal 2007 $365 $58 $17 $440 As a % of revenue 18% 22% First quarter fiscal 2006 $273 $52 $15 $340 As a % of revenue 16% 20% Year-over-year change ($) 34% 12% 13% 29% Pro forma R&D expenses increased 34 percent year-over-year, primarily due to additional engineering resources for the development of integrated circuit products and other initiatives to support low-cost phones, multimedia applications, high-speed wireless Internet access and multi-mode, multi-band, multi-network products and technologies. Selling, General and Administrative Estimated Total QUALCOMM Share-Based QUALCOMM ($ in millions) Pro Forma Compensation QSI (GAAP) First quarter fiscal 2007 $282 $62 $25 $369 As a % of revenue 14% 18% First quarter fiscal 2006 $168 $58 $13 $239 As a % of revenue 10% 14% Year-over-year change ($) 68% 7% 92% 54% Pro forma selling, general and administrative (SG&A) expenses increased 68 percent year-over-year, largely attributable to increases in legal fees and employee related expenses. The year-over-year increase in QSI SG&A expenses is primarily related to MediaFLO(TM) USA. Effective Income Tax Rate Our fiscal 2007 effective income tax rates are estimated to be 21 percent for total QUALCOMM (GAAP) and 25 percent for QUALCOMM pro forma, compared to fiscal 2006 effective income tax rates of 22 percent for total QUALCOMM (GAAP) and 26 percent for QUALCOMM pro forma. During the first quarter of fiscal 2007, the federal research and development tax credit that expired on December 31, 2005 was extended by Congress for a period of two years beyond the prior expiration date. We recorded a tax benefit of US$33 million, or US$0.02 diluted earnings per share, related to fiscal 2006 in the first quarter of fiscal 2007 due to this retroactive extension. The effective tax rate for the first quarter of fiscal 2007 for total QUALCOMM (GAAP) was 17%, primarily as a result of this benefit. Our first quarter fiscal 2007 QUALCOMM pro forma results exclude this tax benefit attributable to fiscal 2006. QUALCOMM Strategic Initiatives The QSI segment includes our strategic investments, including our MediaFLO USA subsidiary, and related income and expenses. Total QUALCOMM (GAAP) results for the first quarter of fiscal 2007 include US$0.01 loss per share for the QSI segment. The first quarter of fiscal 2007 QSI results included US$42 million in operating expenses, primarily related to MediaFLO USA. Business Outlook The following statements are forward-looking and actual results may differ materially. Please see "Note Regarding Forward-Looking Statements" at the end of this news release for a description of certain risk factors and QUALCOMM's annual and quarterly reports on file with the Securities and Exchange Commission (SEC) for a more complete description of risks. Due to their nature, certain income and expense items, such as realized investment gains or losses in QSI, gains and losses on certain derivative instruments or asset impairments, cannot be accurately forecast. Accordingly, the Company excludes forecasts of such items from its business outlook, and actual results may vary materially from the business outlook if the Company incurs any such income or expense items. Estimated share-based compensation in future periods may vary materially from the business outlook as the methodology used to calculate this estimate is dependent on a variety of assumptions which are subject to market fluctuations and other factors. The following table summarizes total QUALCOMM (GAAP) and QUALCOMM pro forma guidance for the second fiscal quarter and fiscal year 2007 based on the current business outlook. The pro forma business outlook provided below is presented consistent with the presentation of pro forma results provided elsewhere herein. Our license agreement with Nokia Corp. expires in part on April 9, 2007, with Nokia having an option exercisable through the end of 2008 to extend the agreement. The table includes a footnote to size our estimate of the risk, approximately US$0.04 to US$0.06 diluted earnings per share, of Nokia not paying royalties in the fourth quarter of fiscal 2007 for June quarter shipments. Nokia has publicly stated that they intend to continue to use our patents but not pay royalties after the expiration of their rights under those patents on April 9, 2007 should a new license agreement (or extension of the existing agreement) not be reached by that time. As a result, under generally accepted accounting principles, we will be unable to record royalty revenue attributable to Nokia's sales until a court awards damages or agreement with Nokia is reached. If we cannot conclude an extension or a new license agreement beyond April 9, 2007, Nokia's rights to sell certain subscriber products (such as cellular phones and wireless personal digital assistant devices) under most of our patents will expire, as will our rights to sell integrated circuits under Nokia's patents. We intend to pursue and obtain injunctions against Nokia's sales as well as damages (which will include interest from the date of infringement) for Nokia's unlicensed sales after April 9, 2007. While we will continue to work with Nokia to see if we can reach an agreement, there is no guarantee that we will be able to successfully resolve this matter before April 9, 2007 on terms which we find acceptable and little progress has been made to date. If we are unable to reach agreement, and Nokia continues to use our unlicensed intellectual property, we will aggressively pursue all our legal and business options and assume that Nokia will do likewise. The following estimates are approximations and are based on the current business outlook: Business Outlook Summary (All figures are in US$) SECOND FISCAL QUARTER Current Guidance Q2'06 Q2'07 Results Estimates(1) QUALCOMM Pro Forma Revenues $1.83B $2.0B - $2.1B Year-over-year change increase 9% - 15% Diluted earnings per share (EPS) $0.41 $0.42 - $0.44 Year-over-year change increase 2% - 7% Total QUALCOMM (GAAP) Revenues $1.83B $2.0B - $2.1B Year-over-year change increase 9% - 15% Diluted earnings per share (EPS) $0.34 $0.35 - $0.37 Year-over-year change increase 3% - 9% Diluted EPS attributable to QSI ($0.01) ($0.02) Diluted EPS attributable to estimated share-based compensation ($0.05) ($0.05) Diluted EPS attributable to in-process R&D ($0.01) n/a Metrics MSM Shipments approx. 49M approx. 55M - 57M CDMA/WCDMA handset units shipped approx. 67M(i) approx. 82M - 86M(i) CDMA/WCDMA handset unit wholesale average selling price approx. $208(i) approx. $217(i) (i)Shipments in Dec. quarter, reported in Mar. quarter FISCAL YEAR Prior Guidance Current Guidance FY 2006 FY 2007 FY 2007 Results Estimates(2)(3) Estimates(2) QUALCOMM Pro Forma Revenues $7.53B $8.1B - $8.6B Year-over-year change increase 8% - 14% Reaffirm Prior Diluted earnings Revenue per share (EPS) $1.64 $1.72 - $1.77 and EPS Guidance Year-over-year change increase 5% - 8% Total QUALCOMM (GAAP) Revenues $7.53B $8.1B - $8.6B Reaffirm Prior Year-over-year change increase 8% - 14% Revenue Guidance Diluted earnings per share (EPS) $1.44 $1.41 - $1.46 $1.44 - $1.49 Year-over-year change decrease 2% - increase 1% even - increase 3% Diluted EPS attributable to in-process R&D ($0.01) n/a n/a Diluted EPS attributable to QSI ($0.02) ($0.11) ($0.10) Diluted EPS attributable to estimated share-based compensation ($0.19) ($0.20) ($0.20) Diluted EPS attributable to tax items related to prior years $0.02 n/a $0.02 Metrics Fiscal year(ii) CDMA/WCDMA handset unit wholesale average selling price approx. $215 approx. $205 approx. $210 (ii)Shipments in Sept. to June quarters, reported in Dec. to Sept. quarters CALENDAR YEAR Handset Estimates Prior Guidance Current Guidance Calendar 2006 Calendar 2006 CDMA/WCDMA handset unit shipments Estimates Estimates March quarter approx. 66M approx. 66M June quarter approx. 70M approx. 70M September quarter approx. 74M - 76M approx. 76M December quarter not provided approx. 82M - 86M Calendar year range (approx.) 290M - 298M 294M - 298M Midpoint Midpoint CDMA/WCDMA units approx. 294M approx. 296M CDMA units approx. 196M approx. 198M WCDMA units approx. 98M approx. 98M Prior Guidance Current Guidance Calendar 2007 Calendar 2007 CDMA/WCDMA handset unit shipments Estimates Estimates March quarter not provided not provided June quarter not provided not provided September quarter not provided not provided December quarter not provided not provided Calendar year range (approx.) 368M - 388M Midpoint Reaffirm Prior CDMA/WCDMA units approx. 378M Calendar 2007 CDMA units approx. 203M Guidance WCDMA units approx. 175M (1) Current Q2'07 estimates incorporate the expected results related to acquisitions completed in the first quarter of fiscal 2007. (2) FY 2007 estimates do not reflect the potential adverse impact on our results, approximately US$0.04 to US$0.06 diluted earnings per share, of Nokia not paying royalties in the fourth quarter of fiscal 2007 for June quarter shipments. Further details are included in the introductory paragraph which precedes this Business Outlook table. (3) Prior Guidance presented above incorporates the US$0.04 dilution estimate for FY 2007 provided on December 3, 2006 related to the acquisitions completed in the first quarter of fiscal 2007. Sums may not equal totals due to rounding. Results of Business Segments The following tables, which present segment information, have been adjusted to reflect the 2007 segment presentation (Notes 1 and 2) (in millions, except per share data): First Quarter - Fiscal Year 2007 Reconciling Segments QCT(1) QTL(1) QWI(2) Items(1)(2)(3) Revenues $1,230 $600 $188 $1 Change from prior year 19% 14% 5% N/M Change from prior quarter 7% (9%) (4%) N/M EBT $316 $498 $20 $118 Change from prior year (7%) 4% 18% N/M Change from prior quarter (2%) (16%) (23%) N/M Net income (loss) Change from prior year Change from prior quarter Diluted EPS Change from prior year Change from prior quarter Diluted shares used Estimated Total QUALCOMM Pro Share-Based Tax QUALCOMM Segments Forma Compensation(4) Items(5) QSI(6) (GAAP) Revenues $2,019 $-- $-- $-- $2,019 Change from prior year 16% -- -- -- 16% Change from prior quarter 1% -- -- -- 1% EBT $952 $(130) $-- $(43) $779 Change from prior year 5% N/M N/M N/M 6% Change from prior quarter (1%) N/M N/M N/M (4%) Net income (loss) $722 $(86) $33 $(21) $648 Change from prior year 8% N/M N/M N/M 5% Change from prior quarter 2% N/M N/M N/M 6% Diluted EPS $0.43 $(0.05) $0.02 $(0.01) $0.38 Change from prior year 10% N/M N/M N/M 6% Change from prior quarter 2% N/M N/M N/M 6% Diluted shares used 1,685 1,685 1,685 1,685 1,685 Fourth Quarter - Fiscal Year 2006 Reconciling Segments QCT(1) QTL(1) QWI(2) Items(1)(2)(3) Revenues $1,147 $661 $196 $(5) EBT 323 591 26 21 Net income (loss) Diluted EPS Diluted shares used Estimated Total QUALCOMM Pro Share-Based Tax In-Process QUALCOMM Segments Forma Compensation(4) Items(7) R&D(8) QSI(6) (GAAP) Revenues $1,999 $-- $-- $-- $-- $1,999 EBT 961 (127) -- (1) (23) 810 Net income (loss) 705 (76) (16) (1) 2 614 Diluted EPS $0.42 $(0.05) $(0.01) $-- $-- $0.36 Diluted shares used 1,693 1,693 1,693 1,693 1,693 1,693 First Quarter - Fiscal Year 2006 Reconciling Segments QCT(1) QTL(1) QWI(2) Items(1)(2)(3) Revenues $1,033 $526 $179 $3 EBT 338 479 17 72 Net income (loss) Diluted EPS Diluted shares used Estimated Total QUALCOMM Pro Share-Based Tax QUALCOMM Segments Forma Compensation(4) Items(9) QSI(6) (GAAP) Revenues $1,741 $-- $-- $-- $1,741 EBT 906 (122) -- (48) 736 Net income (loss) 667 (82) 56 (21) 620 Diluted EPS $0.39 $(0.05) $0.03 $(0.01) $0.36 Diluted shares used 1,702 1,702 1,702 1,702 1,702 Second Quarter - Fiscal Year 2006 Reconciling Segments QCT(1) QTL(1) QWI(2) Items(1)(2)(3) Revenues $1,018 $640 $178 $(2) EBT 291 587 16 68 Net income (loss) Diluted EPS Diluted shares used Estimated Total QUALCOMM Pro Share-Based In-Process QUALCOMM Segments Forma Compensation(4) R&D(8) QSI(6) (GAAP) Revenues $1,834 $-- $-- $-- $1,834 EBT 962 (120) (21) (36) 785 Net income (loss) 706 (78) (21) (14) 593 Diluted EPS $0.41 $(0.05) $(0.01) $(0.01) $0.34 Diluted shares used 1,721 1,721 1,721 1,721 1,721 Twelve Months - Fiscal Year 2006 Reconciling Segments QCT(1) QTL(1) QWI(2) Items(1)(2)(3) Revenues $4,332 $2,467 $731 $(4) EBT $1,298 $2,233 $78 $197 Net income (loss) Diluted EPS Diluted shares used Estimated Total QUALCOMM Pro Share-Based Tax Items In-Process QUALCOMM Segments Forma Compensation(4) (7)(9) R&D(8) QSI (GAAP) Revenues $7,526 $-- $-- $-- $-- $7,526 EBT $3,806 $(495) $-- $(22) $(133) $3,156 Net income (loss) $2,804 $(320) $40 $(22) $(32) $2,470 Diluted EPS $1.64 $(0.19) $0.02 $(0.01) $(0.02) $1.44 Diluted shares used 1,711 1,711 1,711 1,711 1,711 1,711 (1) During the first quarter of fiscal 2007, the Company reassessed the intersegment royalty charged to QCT by QTL and determined that the royalty should be eliminated starting in fiscal 2007 for management reporting purposes to, among other reasons, recognize other value that QTL has increasingly been realizing from QCT. As a result, QCT did not record a royalty to QTL in the first quarter of fiscal 2007, and prior period segment information has been adjusted in the same manner for comparative purposes. (2) During the first quarter of fiscal 2007, the Company reorganized the QUALCOMM Wireless Systems (QWS) division, which sells products and services to Globalstar, into the QWBS division in the QWI segment. Revenues and operating results relating to the QWS business were included in reconciling items through the end of fiscal 2006. Prior period segment information has been adjusted to conform to the new segment presentation. (3) Reconciling items related to revenues consist primarily of other nonreportable segment revenues less intersegment eliminations. Reconciling items related to earnings before taxes consist primarily of certain investment income, research and development expenses and marketing expenses that are not allocated to the segments for management reporting purposes, nonreportable segment results and the elimination of intercompany profit. (4) Certain share-based compensation is included in operating expenses as part of employee-related costs but is not allocated to our segments as such costs are not considered relevant by management in evaluating segment performance. Estimated share-based compensation, presented above and excluded from pro forma results, does not include US$1 million, net of tax, related to share-based awards granted under the executive bonus program. (5) During the first quarter of fiscal 2007, the federal R&D tax credit that expired on December 31, 2005 was extended by Congress for a period of two years beyond the prior expiration date. We recorded a tax benefit of US$33 million, or US$0.02 diluted earnings per share, related to fiscal 2006 in the first quarter of fiscal 2007 due to this retroactive extension. The effective tax rate for the first quarter of fiscal 2007 for total QUALCOMM (GAAP) was 17% primarily as a result of this benefit. Our first quarter fiscal 2007 QUALCOMM pro forma results exclude this tax benefit attributable to 2006. (6) At fiscal year-end, the sum of the quarterly tax provisions for each column, including QSI, equals the annual tax provisions for each column computed in accordance with GAAP. In interim quarters, the tax provision for the QSI operating segment is computed by subtracting the tax provision for QUALCOMM pro forma, the tax adjustment column and the tax provision related to estimated share-based compensation from the tax provision for total QUALCOMM (GAAP). (7) During the fourth quarter of fiscal 2006, the Company refined its estimate of R&D costs allocable to the Company's foreign operations to reflect actual results and updated its forecast of future benefits under an intercompany cost sharing agreement. Due to this adjustment, the effective tax rate in the fourth quarter of fiscal 2006 for total QUALCOMM (GAAP) includes US$33 million of tax expense, or US$0.02 per diluted share, related to fiscal 2004. In addition, the Company recorded a US$17 million tax benefit, or US$0.01 diluted earnings per share, related to the impact of prior year tax audits completed during the fourth quarter of fiscal 2006. For fiscal 2006 pro forma presentation, results were adjusted to exclude these tax adjustments related to prior years. (8) During fiscal 2006, the Company recorded US$22 million of expenses related to acquired in-process R&D associated with three acquisitions completed during the year. US$21 million of this expense was recorded in the second quarter of fiscal 2006 and US$1 million was recorded in the fourth quarter of fiscal 2006. For fiscal 2006 pro forma presentation, results were adjusted to exclude these expenses. (9) During the first quarter of fiscal 2006, the Company recorded a US$56 million tax benefit, or US$0.03 diluted earnings per share, related to the expected impact of prior year tax audits completed during that quarter. For fiscal 2006 pro forma presentation, results were adjusted to exclude this tax adjustment attributable to prior years. N/M - Not Meaningful Sums may not equal totals due to rounding. Conference Call QUALCOMM's first quarter fiscal 2007 earnings conference call will be broadcast live on January 24, 2007 beginning at 1:45 p.m. Pacific Standard Time (PST) on the Company's web site at: www.qualcomm.com. This conference call may contain forward-looking financial information. The conference call will include a discussion of "non-GAAP financial measures" as that term is defined in Regulation G. The most directly comparable GAAP financial measures and information reconciling these non-GAAP financial measures to the Company's financial results prepared in accordance with GAAP, as well as the other material financial and statistical information to be discussed in the conference call, will be posted on the Company's Investor Relations web site at www.qualcomm.com immediately prior to commencement of the call. A taped audio replay will be available via telephone on January 24, 2007 beginning at approximately 5:30 p.m. (PST) through February 7, 2007 at 9:00 p.m. (PST). To listen to the replay, U.S. callers may dial +1(800)642-1687 and international callers may dial +1(706)645-9291. U.S. and international callers should use reservation number 4455735. An audio replay of the conference call will be available on the Company's web site at www.qualcomm.com for two weeks following the live call. Editor's Note: If you would like to view the web slides that accompany this earnings release and conference call, please view the QUALCOMM Investor Relations website at http://investor.qualcomm.com/results.cfm . QUALCOMM Incorporated (www.qualcomm.com) is a leader in developing and delivering innovative digital wireless communications products and services based on CDMA and other advanced technologies. Headquartered in San Diego, Calif., QUALCOMM is included in the S&P 500 Index and is a 2006 FORTUNE 500(R) company traded on The Nasdaq Stock Market(R) under the ticker symbol QCOM. Note Regarding Use of Non-GAAP Financial Measures The Company presents pro forma financial information that is used by management (i) to evaluate, assess and benchmark the Company's operating results on a consistent and comparable basis, (ii) to measure the performance and efficiency of the Company's ongoing core operating businesses, including the QUALCOMM CDMA Technologies, QUALCOMM Technology Licensing and QUALCOMM Wireless & Internet segments, and (iii) to compare the performance and efficiency of these segments against each other and against competitors outside the Company. Pro forma measurements of the following financial data are used by the Company's management: revenues, R&D expenses, SG&A expenses, total operating expenses, operating income, net investment income, income before income taxes, effective tax rate, net income, diluted earnings per share, operating cash flow and free cash flow. Management 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 eliminating the episodic impact of strategic investments in QSI and items such as acquired in-process R&D, as well as the inherent, non-operational volatility of share-based compensation. As a result, management compensation decisions and the review of executive compensation by the Compensation Committee of the Board of Directors focus primarily on pro forma financial measures applicable to the Company and its business segments. Pro forma information used by management excludes the QUALCOMM Strategic Initiatives (QSI) segment, certain estimated share-based compensation, certain tax adjustments related to prior years and acquired in-process R&D expense. The QSI segment 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 are viewed by management as unrelated to the Company's operational performance. Estimated share-based compensation, other than amounts related to share-based awards granted under the executive bonus program, is excluded because management views the valuation of options and other share-based compensation as theoretical and unrelated to the Company's operational performance as it is affected by factors that are subject to change on each grant date, including the Company's stock price, stock market volatility, expected option life, risk-free interest rates and expected dividend payouts in future years. Moreover, it is not an expense that requires or will require cash payment by the Company. Certain tax adjustments related to prior years are excluded in order to provide a clearer understanding of the Company's ongoing tax rate and after tax earnings. Acquired in-process R&D expense in fiscal 2006 is excluded because such expense is incurred infrequently and is viewed by management as unrelated to the operating activities of the Company's ongoing core businesses. 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 shareholder value. The Company believes that this presentation is useful in evaluating its operating performance and financial strength. In addition, management uses this measure to value the Company and to compare its operating performance with other companies in the industry. The non-GAAP pro forma 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, pro forma is not a term defined by GAAP, and, as a result, the Company's measure of pro forma results might be different than similarly titled measures used by other companies. Reconciliations between total QUALCOMM (GAAP) results and QUALCOMM pro forma results and total QUALCOMM (GAAP) cash flow and QUALCOMM pro forma cash flow are presented herein. Note Regarding Forward-Looking Statements In addition to the historical information contained herein, this news release contains forward-looking statements that are subject to risks and uncertainties. Actual results may differ substantially from those referred to herein due to a number of factors, including but not limited to risks associated with: the rate of development, deployment and commercial acceptance of CDMA-based networks and CDMA-based technology, including CDMA2000 1X, 1xEV-DO, WCDMA and HSDPA both domestically and internationally; our dependence on major customers and licensees; attacks on our licensing business model, including results of current and future litigation as well as actions of governmental or quasi-governmental bodies, and the costs we incur in connection therewith; fluctuations in the demand for CDMA-based products, services or applications; foreign currency fluctuations; strategic loans, investments and transactions the Company has or may pursue; our dependence on third party manufacturers and suppliers; our ability to maintain and improve operational efficiencies and profitability; the development, deployment and commercial acceptance of the MediaFLO USA network and FLO(TM) technology; as well as the other risks detailed from time-to-time in the Company's SEC reports. (C) 2007 QUALCOMM Incorporated. All rights reserved. QUALCOMM is a registered trademark of QUALCOMM Incorporated. CDMA2000(R) is a registered trademark of the Telecommunications Industry Association. All other trademarks are the property of their respective owners. QUALCOMM Contact: John Gilbert Vice President of Investor and Industry Analyst Relations +1(858)658-4813 (ph) +1(858)651-9303 (fax) e-mail: ir@qualcomm.com QUALCOMM Incorporated CONSOLIDATED STATEMENTS OF OPERATIONS THIS SCHEDULE IS TO ASSIST THE READER IN RECONCILING FROM PRO FORMA RESULTS TO TOTAL QUALCOMM RESULTS (In millions US, except per share data) (Unaudited) Three Months Ended December 31, 2006 Estimated Total QUALCOMM Share-Based QUALCOMM Pro Forma Compensation(a) Tax Items QSI (GAAP) Revenues: Equipment and services $1,342 $-- $-- $-- $1,342 Licensing and royalty fees 677 -- -- -- 677 Total revenues 2,019 -- -- -- 2,019 Operating expenses: Cost of equipment and services revenues 624 10 -- -- 634 Research and development 365 58 -- 17 440 Selling, general and administrative 282 62 -- 25 369 Total operating expenses 1,271 130 -- 42 1,443 Operating income (loss) 748 (130) -- (42) 576 Investment income, net 204(b) -- -- (1)(c) 203 Income (loss) before income taxes 952 (130) -- (43) 779 Income tax (expense) benefit (230)(d) 44 33 22(e) (131)(d) Net income (loss) $722 $(86) $33 $(21) $648 Earnings (loss) per common share: Diluted $0.43 $(0.05) $0.02 $(0.01) $0.38 Shares used in per share calculations: Diluted 1,685 1,685 1,685 1,685 1,685 Supplemental Financial Data: Operating Cash Flow $834 $(32)(g) $-- $(13) $789 Operating Cash Flow as a % of Revenues 41% 39% Free Cash Flow (f) $544 $(32)(g) $-- $(45) $467 Free Cash Flow as a % of Revenues 27% 23% (a) Estimated share-based compensation presented above and excluded from pro forma results does not include US$1 million, net of tax, related to share-based awards granted under the executive bonus program. (b) Includes US$142 million in interest and dividend income related to cash, cash equivalents and marketable securities, which are not part of the Company's strategic investment portfolio, and US$63 million in net realized gains on investments, partially offset by US$1 million in interest expense. (c) Includes US$1 million in losses on derivatives, US$1 million in interest expense and US$1 million in other-than-temporary losses on investments, partially offset by US$1 million in net realized gains on investments and US$1 million in interest and dividend income. (d) The first quarter of fiscal 2007 tax rates are approximately 17% for total QUALCOMM (GAAP) and approximately 24% for QUALCOMM pro forma. (e) At fiscal year-end, the sum of the quarterly tax provisions for each column, including QSI, will equal the annual tax provisions for each column computed in accordance with GAAP. In interim quarters, the tax provision for the QSI operating segment is computed by subtracting the tax provision for QUALCOMM pro forma and the tax provision related to estimated share-based compensation from the tax provision for total QUALCOMM (GAAP). (f) 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 Pro Forma Free Cash Flows to Net Cash Provided by Operating Activities for Total QUALCOMM for the three months ended December 31, 2006, included herein. (g) Tax benefits from stock options exercised during the quarter. QUALCOMM Incorporated RECONCILIATION OF PRO FORMA FREE CASH FLOWS TO TOTAL QUALCOMM (GAAP) NET CASH PROVIDED BY OPERATING ACTIVITIES AND OTHER SUPPLEMENTAL DISCLOSURES (In millions) (Unaudited) Three Months Ended December 31, 2006 Estimated Total QUALCOMM Share-Based QUALCOMM Pro Forma Compensation QSI (GAAP) Net cash provided (used) by operating activities $834 $(32)(a) $(13) $789 Less: capital expenditures (290) -- (32) (322) Free cash flow $544 $(32) $(45) $467 Other supplemental cash disclosures: Cash transfers from QSI(1) $7 $-- $(7) $-- Cash transfers to QSI(2) (95) -- 95 -- Net cash transfers from (to)/from QSI $(88) $-- $88 $-- (1) Cash from loan payments and sale of equity securities. (2) Funding for strategic debt and equity investments and other QSI operating expenses. Three Months Ended December 25, 2005 Estimated Total QUALCOMM Share-Based QUALCOMM Pro Forma Compensation QSI (GAAP) Net cash provided (used) by operating activities $713 $(101)(a) $(16) $596 Less: capital expenditures (182) -- (31) (213) Free cash flow $531 $(101) $(47) $383 (a) Tax benefits from stock options exercised during the period. QUALCOMM Incorporated CONDENSED CONSOLIDATED BALANCE SHEETS (In millions, except per share data) (Unaudited) ASSETS December 31, September 24, 2006 2006 Current assets: Cash and cash equivalents $2,649 $1,607 Marketable securities 3,298 4,114 Accounts receivable, net 693 700 Inventories 330 250 Deferred tax assets 229 235 Other current assets 180 143 Total current assets 7,379 7,049 Marketable securities 4,598 4,228 Property, plant and equipment, net 1,559 1,482 Goodwill 1,320 1,230 Deferred tax assets 441 512 Other assets 1,041 707 Total assets $16,338 $15,208 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Trade accounts payable $471 $420 Payroll and other benefits related liabilities 205 273 Dividend payable 198 -- Unearned revenue 253 197 Other current liabilities 631 532 Total current liabilities 1,758 1,422 Unearned revenue 144 141 Other liabilities 261 239 Total liabilities 2,163 1,802 Stockholders' equity: Preferred stock, $0.0001 par value; issuable in series; 8 shares authorized; none outstanding at December 31, 2006 and September 24, 2006 -- -- Common stock, $0.0001 par value; 6,000 shares authorized; 1,655 and 1,652 shares issued and outstanding at December 31, 2006 and September 24, 2006, respectively -- -- Paid-in capital 7,427 7,242 Retained earnings 6,549 6,100 Accumulated other comprehensive income 199 64 Total stockholders' equity 14,175 13,406 Total liabilities and stockholders' equity $16,338 $15,208 QUALCOMM Incorporated CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except per share data) (Unaudited) Three Months Ended December 31, December 25, 2006 2005 Revenues: Equipment and services $1,342 $1,150 Licensing and royalty fees 677 591 Total revenues 2,019 1,741 Operating expenses: Cost of equipment and services revenues 634 517 Research and development 440 340 Selling, general and administrative 369 239 Total operating expenses 1,443 1,096 Operating income 576 645 Investment income, net 203 91 Income before income taxes 779 736 Income tax expense (131) (116) Net income $648 $620 Basic earnings per common share $0.39 $0.38 Diluted earnings per common share $0.38 $0.36 Shares used in per share calculations: Basic 1,653 1,645 Diluted 1,685 1,702 Dividends per share paid $-- $-- Dividends per share announced $0.12 $0.09 QUALCOMM Incorporated CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) (Unaudited) Three Months Ended December 31, December 25, 2006 2005 Operating Activities: Net income $648 $620 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 91 58 Non-cash portion of share-based compensation expense 130 122 Incremental tax benefits from stock options exercised (32) (101) Net realized gains on marketable securities and other investments (64) (20) Equity in losses of investees -- 20 Non-cash income tax expense 54 104 Other items, net 5 (16) Changes in assets and liabilities, net of effects of acquisitions: Accounts receivable, net (9) (171) Inventories (81) (18) Other assets (98) 16 Trade accounts payable 47 87 Payroll, benefits and other liabilities 38 (86) Unearned revenue 60 (19) Net cash provided by operating activities 789 596 Investing Activities: Capital expenditures (322) (213) Purchases of available-for-sale securities (1,673) (3,318) Proceeds from sale of available-for-sale securities 2,436 2,160 Other investments and acquisitions, net of cash acquired (220) (6) Other items, net (2) 4 Net cash provided (used) by investing activities 219 (1,373) Financing Activities: Proceeds from issuance of common stock 97 181 Repurchase and retirement of common stock (96) -- Incremental tax benefits from stock options exercised 32 101 Net cash provided by financing activities 33 282 Effect of exchange rate changes on cash 1 2 Net increase (decrease) in cash and cash equivalents 1,042 (493) Cash and cash equivalents at beginning of period 1,607 2,070 Cash and cash equivalents at end of period $2,649 $1,577 Web site: http://www.qualcomm.com ots Originaltext: Qualcomm Incorporated Im Internet recherchierbar: http://www.presseportal.ch Contact: John Gilbert, Vice President of Investor and Industry Analyst Relations of QUALCOMM Incorporated, +1-858-658-4813, or fax, +1-858-651-9303, ir@qualcomm.com

Das könnte Sie auch interessieren: