EXHIBIT 99.1
FOR IMMEDIATE RELEASE
QUALCOMM Contact:
Bill Davidson
Vice President, Investor Relations
1-(858) 658-4813 (ph) 1-(858) 651-9303 (fax)
e-mail: ir@qualcomm.com
QUALCOMM ANNOUNCES THIRD QUARTER FISCAL 2004 RESULTS
REVENUES $1.3 BILLION, EPS $0.58
REVENUES $1.3 BILLION, EPS $0.57 EXCLUDING QSI SEGMENT
SAN DIEGO - July 21, 2004 - QUALCOMM Incorporated (NASDAQ: QCOM) today announced
its results for its third fiscal quarter ended June 27, 2004. Revenues were $1.3
billion in the third quarter of fiscal 2004, up 50 percent year-over-year and 10
percent sequentially. The third quarter fiscal 2004 net income was $486 million,
up 154 percent year-over-year and unchanged sequentially. The third quarter
diluted earnings per share were $0.58, up 152 percent year-over-year and
unchanged sequentially.
The third quarter fiscal 2004 net income excluding the QUALCOMM Strategic
Initiatives (QSI) segment was $483 million, up 81 percent year-over-year and
nine percent sequentially. The third quarter fiscal 2004 diluted earnings per
share excluding the QSI segment were $0.57, up 73 percent year-over-year and
eight percent sequentially. Detailed reconciliations between total QUALCOMM
results and results excluding QSI are included at the end of this news release.
Prior period reconciliations are presented on our Investor Relations web page at
www.qualcomm.com.
"The CDMA market continues to exhibit impressive growth as more subscribers are
enjoying the benefits of third generation CDMA networks throughout the world,"
said Dr. Irwin Mark Jacobs, chairman and CEO of QUALCOMM. "Record demand for our
chipsets and stronger than expected WCDMA sales are driving higher revenues and
earnings. Twenty-one device manufacturers have selected QUALCOMM's chipsets and
system software for their WCDMA deployments. This is the largest customer base
in the industry to work with a single WCDMA wireless chipset provider. This
quarter, WCDMA royalties accounted for 25 percent of total third party
royalties. Based on new and expanding networks and attractive subscriber
equipment entering the market, and with increasing competition among 3G
operators, we expect WCDMA revenue to constitute a growing portion of our
financial results."
-more-
QUALCOMM Announces Third Quarter Fiscal 2004 Results Page 2 of 20
"3G CDMA continues its rapid expansion around the world, with over 117 million
subscribers now utilizing this 3G service following a rapid transition from 2G.
In South Korea, over 7 million subscribers have further upgraded to 1xEV-DO,
demonstrating a large consumer market for broadband wireless data, especially
multimedia downloads and advanced games. In the U. S., with first Verizon
Wireless and more recently Sprint PCS deploying 1xEV-DO, and now AT&T Wireless
launching WCDMA in four markets, we will soon have three nationwide operators as
well as a number of regional operators offering third generation wireless
services to the enterprise and consumer markets. The experience first gained
with CDMA2000 advanced services and devices will benefit all 3G operators,
ensuring the availability of attractive applications and devices and supporting
evaluation of different marketing strategies. QUALCOMM continues to work closely
with all 3G operators to support the successful rollout of CDMA worldwide. We
continue a heavy investment in research and development to ensure the
availability of the services and devices requested by operators, to reduce their
costs, and to further increase the support provided by BREW."
Revenues for the third quarter of fiscal 2004 grew $449 million compared to the
third quarter of fiscal 2003, including a $236 million increase in QUALCOMM CDMA
Technologies (QCT) segment revenues and a $194 million increase in QUALCOMM
Technology Licensing (QTL) segment revenues. QCT sold approximately 35 million
Mobile Station Modem(TM) (MSM(TM)) phone chips in the third quarter of fiscal
2004, compared to 23 million in the third quarter of fiscal 2003. QTL revenues
increased over the prior year due primarily to greater phone sales at higher
average selling prices by our licensees. In the third quarter of fiscal 2004,
our licensees reported CDMA phone sales for the second quarter of fiscal 2004 of
approximately 38 million units, compared to 26 million units reported in the
third quarter of fiscal 2003.
Research and development (R&D) expenses were $194 million in the third quarter
of fiscal 2004, up 43 percent from the third quarter of fiscal 2003, largely
attributable to increases in costs related to integrated circuit products and
corporate initiatives to support multimedia applications, high-speed wireless
Internet access and multimode, multiband, multinetwork products, including
CDMA2000 1xEV-DO/1xEV-DV, GSM1x and WCDMA (UMTS).
QUALCOMM Announces Third Quarter Fiscal 2004 Results Page 3 of 20
Selling, general and administrative (SG&A) expenses were $162 million in the
third quarter of fiscal 2004, up 40 percent from the third quarter of fiscal
2003, largely attributable to increases in employee related expenses, a
charitable grant to an educational institution for the primary purpose of
furthering the study of engineering and math, and legal fees.
Our fiscal 2004 annual effective income tax rates from continuing operations are
estimated to be approximately 29 percent and 30 percent for total QUALCOMM and
QUALCOMM excluding QSI, respectively. The QUALCOMM rate is lower than the
QUALCOMM rate excluding QSI because of capitial losses tax effected in QSI. In
the second quarter fiscal 2004 our annual effective income tax rate from
continuing operations was estimated to be approximately 30 percent for both
total QUALCOMM and QUALCOMM excluding QSI. In the third quarter fiscal 2004 our
tax rates from continuing operations were 27 percent for total QUALCOMM and 28
percent for QUALCOMM excluding QSI. The 27 percent third quarter fiscal 2004 tax
rate from continuing operations was reduced by approximately $26 million related
to the filing of our 2003 federal tax return in June 2004, partially offset by a
$14 million adjustment to our forecast of our ability to utilize capital losses.
In fiscal 2003, our actual effective income tax rates from continuing operations
were approximately 34 percent and 33 percent, for total QUALCOMM and QUALCOMM
excluding QSI, respectively. The lower estimated annual effective tax rates as
compared to the prior fiscal year are largely due to higher foreign earnings
expected in fiscal 2004 which are subject to a lower rate.
QUALCOMM STRATEGIC INITIATIVES
The QUALCOMM Strategic Initiatives (QSI) segment includes our strategic
investments and related income and expenses. Our QSI operator investment
activities continue to decrease as planned. With the sale of TowerCo in the
second quarter of fiscal 2004, we no longer have any investment interest in the
Vesper Operating Companies in Brazil. In the third quarter of fiscal 2004, QSI's
results consisted primarily of $18 million in equity losses, most of which
related to our investment in Inquam, partially offset by $11 million in realized
investment gains and investment income, and $5 million in other income resulting
primarily from the transfer of a portion of our FCC Auction Discount Voucher to
a wireless operator.
STOCK SPLIT
QUALCOMM Announces Third Quarter Fiscal 2004 Results Page 4 of 20
On July 13, 2004, QUALCOMM's Board of Directors declared a two-for-one stock
split of the Company's Common Stock to be effected in the form of a stock
dividend. The non-taxable stock dividend will be distributed on August 13, 2004
to stockholders of record on July 23, 2004. Per share numbers presented herein
are on a pre-stock split basis.
QUARTERLY CASH DIVIDEND
On July 13, 2004, we announced a 40 percent increase in our quarterly dividend
from $0.10 to $0.14 per share of common stock. The new dividend rate will be
effective for the quarterly dividend payable on September 24, 2004 to
stockholders of record at the close of business on August 27, 2004. This
dividend will increase the annual dividend rate to $0.56 per share of common
stock.
BUSINESS OUTLOOK
The following statements are forward-looking and actual results may differ
materially. Please see Note Regarding Forward-Looking Statements in this 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, income related to the use of
our FCC Auction Discount Voucher and asset impairments cannot be accurately
forecast. Accordingly, the Company excludes 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.
FOURTH QUARTER FISCAL 2004
Based on the current business outlook, we anticipate that revenues excluding the
QSI segment in the fourth fiscal quarter will increase 57-65 percent
year-over-year and increase approximately 2-7 percent sequentially. We
anticipate that earnings per share excluding the QSI segment will be
approximately $0.54-$0.57 in the fourth fiscal quarter, compared to $0.29 in the
year ago quarter. This estimate assumes shipments of approximately 36-38 million
MSM phone chips during the quarter.
Based on the current business outlook, we anticipate that total QUALCOMM
revenues in the fourth fiscal quarter will increase approximately 57-65 percent
year-over-year and 2-7 percent sequentially. We anticipate that total QUALCOMM
earnings per share will be approximately $0.53-
QUALCOMM Announces Third Quarter Fiscal 2004 Results Page 5 of 20
$0.56 in the fourth fiscal quarter, including an estimated $0.01 loss per share
attributed to the QSI segment, compared to a $0.07 gain per share in the year
ago quarter.
FISCAL 2004
Based on the current business outlook, we are increasing our guidance for fiscal
2004. We now anticipate that revenues excluding the QSI segment will grow by
approximately 33-35 percent year-over-year and earnings per share excluding the
QSI segment to be in the range of $2.15-$2.18 for fiscal 2004, compared to $1.42
last fiscal year. We estimate the CDMA phone market to be 161-168 million units
in calendar 2004, and we estimate average selling prices of CDMA phones for
fiscal 2004, upon which royalties are calculated, to increase to approximately
$209, compared to our prior estimate of $195.
Based on the current business outlook, we anticipate that total QUALCOMM
revenues will grow by approximately 33-35 percent year-over-year and total
QUALCOMM earnings per share to be in the range of $2.12-$2.15 for fiscal 2004,
compared to $1.01 last fiscal year, including an estimated $0.03 loss per share
attributed to the QSI segment for fiscal 2004.
CASH AND MARKETABLE SECURITIES
QUALCOMM's cash, cash equivalents and both current and noncurrent marketable
securities totaled approximately $7.0 billion at the end of the third quarter of
fiscal 2004, compared to $5.4 billion on September 28, 2003, and $5.0 billion on
June 29, 2003. We paid $81 million in cash dividends, or $0.10 per share, in the
third quarter of fiscal 2004. In the third quarter of fiscal 2004, cash
transfers from QSI were offset by cash transfers to QSI, resulting in net cash
transfers from QSI of zero. Detailed reconciliations between total QUALCOMM cash
flow and cash, cash equivalents and marketable securities excluding the QSI
segment are included in this news release.
QUALCOMM Announces Third Quarter Fiscal 2004 Results Page 6 of 20
RESULTS OF BUSINESS SEGMENTS
The following tables, which present segment information, have been adjusted to
reflect the SnapTrack reorganization (Note 1) and discontinued operations (Note
3) (dollars in thousands, except per share data):
THIRD QUARTER - FISCAL YEAR 2004
RECONCILING QUALCOMM TOTAL
SEGMENTS QCT(1) QTL QWI(1) ITEMS (2) EXCLUDING QSI QSI QUALCOMM
- ------------------------------------ --------- --------- ------- ------------ ------------- ------- ----------
REVENUES 789,978 436,449 149,636 (35,537) 1,340,526 - 1,340,526
--------- --------- ------- ------------ ------------- ------- ----------
CHANGE FROM PRIOR YEAR 43% 80% 26% N/M 50% (100%) 50%
--------- --------- ------- ------------ ------------- ------- ----------
CHANGE FROM PRIOR QUARTER 11% 12% 3% N/M 10% (100%) 10%
--------- --------- ------- ------------ ------------- ------- ----------
EARNINGS BEFORE TAXES 254,160 398,187 4,141 15,734 672,222 (4,169) 668,053
--------- --------- ------- ------------ ------------- ------- ----------
CHANGE FROM PRIOR YEAR 54% 82% (4%) N/M 69% 41% 71%
--------- --------- ------- ------------ ------------- ------- ----------
CHANGE FROM PRIOR QUARTER (1%) 10% 7% N/M 8% 72% 10%
--------- --------- ------- ------------ ------------- ------- ----------
NET INCOME 482,757 3,667 486,424
------------- ------- ----------
CHANGE FROM PRIOR YEAR 81% N/M 154%
------------- ------- ----------
CHANGE FROM PRIOR QUARTER 9% (92%) 0%
------------- ------- ----------
DILUTED EARNINGS PER COMMON SHARE (4) 0.57 0.00 0.58
------------- ------- ----------
CHANGE FROM PRIOR YEAR 73% 100% 152%
------------- ------- ----------
CHANGE FROM PRIOR QUARTER 8% (100%) 0%
------------- ------- ----------
SECOND QUARTER - FISCAL YEAR 2004
RECONCILING QUALCOMM TOTAL
SEGMENTS QCT(1) QTL QWI(1) ITEMS (2) EXCLUDING QSI QSI QUALCOMM
- -------------------------------------- --------- --------- ------- ------------ ------------- ------- ----------
REVENUES 711,257 390,257 144,627 (30,522) 1,215,619 29 1,215,648
--------- --------- ------- ------------ ------------- ------- ----------
EARNINGS (LOSS) FROM CONTINUING
OPERATIONS BEFORE TAXES 257,956 361,591 3,864 1,704 625,115 (15,055) 610,060
--------- --------- ------- ------------ ------------- ------- ----------
EARNINGS FROM DISCONTINUED OPERATIONS,
NET OF TAX (3) - 47,148 47,148
------------- ------- ----------
NET INCOME 442,419 46,018 488,437
------------- ------- ----------
DILUTED EARNINGS PER COMMON SHARE (4) 0.53 0.05 0.58
THIRD QUARTER - FISCAL YEAR 2003
RECONCILING QUALCOMM TOTAL
SEGMENTS QCT(1)* QTL QWI(1)* ITEMS (2)* EXCLUDING QSI QSI* QUALCOMM*
- ----------------------------------- --------- --------- ------- ------------ ------------- ------- ----------
REVENUES 554,081 242,479 118,594 (23,887) 891,267 325 891,592
--------- --------- ------- ------------ ------------- ------- ----------
EARNINGS (LOSS) FROM CONTINUING
OPERATIONS BEFORE TAXES 165,195 218,363 4,315 10,181 398,054 (7,024) 391,030
--------- --------- ------- ------------ ------------- ------- ----------
LOSS FROM DISCONTINUED OPERATIONS,
NET OF TAX (3) - (49,383) (49,383)
------------- ------- ----------
NET INCOME (LOSS) 266,697 (75,008) 191,689
------------- ------- ----------
DILUTED EARNINGS (LOSS) PER
COMMON SHARE (4) 0.33 (0.09) 0.23
NINE MONTHS - FISCAL YEAR 2004
RECONCILING QUALCOMM TOTAL
SEGMENTS QCT(1) QTL QWI(1) ITEMS (2) EXCLUDING QSI QSI QUALCOMM
- ------------------------------------ --------- --------- ------- ------------ ------------- ------- ----------
REVENUES 2,249,613 1,180,127 432,571 (99,651) 3,762,660 88 3,762,748
--------- --------- ------- ------------ ------------- ------- ----------
CHANGE FROM PRIOR YEAR 18% 56% 19% N/M 26% (91%) 26%
--------- --------- ------- ------------ ------------- ------- ----------
EARNINGS (LOSS) FROM CONTINUING
OPERATIONS BEFORE TAXES 772,593 1,084,451 13,672 33,476 1,904,192 (22,723) 1,881,469
--------- --------- ------- ------------ ------------- ------- ----------
CHANGE FROM PRIOR YEAR 15% 59% (26%) N/M 38% 86% 55%
--------- --------- ------- ------------ ------------- ------- ----------
LOSS FROM DISCONTINUED OPERATIONS,
NET OF TAX (3) - (11,088) (11,088)
------------- ------- ----------
NET INCOME (LOSS) 1,343,905 (16,751) 1,327,154
------------- ------- ----------
DILUTED EARNINGS (LOSS) PER COMMON
SHARE (4) 1.61 (0.02) 1.59
------------- ------- ----------
CHANGE FROM PRIOR YEAR 42% 96% 141%
NINE MONTHS - FISCAL YEAR 2003
RECONCILING QUALCOMM TOTAL
SEGMENTS QCT(1)* QTL QWI(1)* ITEMS (2)* EXCLUDING QSI QSI* QUALCOMM*
- ------------------------------------ --------- --------- ------- ------------ ------------- ------- ----------
REVENUES 1,904,994 758,012 362,450 (49,447) 2,976,009 974 2,976,983
--------- --------- ------- ------------ ------------- ------- ----------
EARNINGS (LOSS) FROM CONTINUING
OPERATIONS BEFORE TAXES 673,024 683,964 18,419 5,598 1,381,005 (163,542) 1,217,463
--------- --------- ------- ------------ ------------- ------- ----------
LOSS FROM DISCONTINUED OPERATIONS,
NET OF TAX (3) - (239,029) (239,029)
------------- ------- ----------
NET INCOME (LOSS) 925,273 (389,234) 536,039
------------- ------- ----------
DILUTED EARNINGS (LOSS) PER COMMON
SHARE (4) 1.13 (0.48) 0.66
------------- ------- ----------
QUALCOMM Announces Third Quarter Fiscal 2004 Results Page 7 of 20
(1) During the second quarter of fiscal 2004, the Company reorganized its
wholly-owned subsidiary, SnapTrack, Inc. (SnapTrack), a developer of
wireless position location technology. The Company previously presented
all of the revenues and operating results of SnapTrack in the QCT segment.
As a result of the reorganization of SnapTrack, revenues and operating
results related to SnapTrack's server software business (software for
location-based services and applications) became part of the QIS division
in the QWI segment. Revenues and operating results related to SnapTrack's
client business (the gpsOne(TM) technology that is embedded within the
integrated circuit products) remain with the QCT segment. Prior period
segment information has been adjusted to conform to the new segment
presentation.
(2) 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.
(3) During fiscal 2004, the Company sold its consolidated subsidiaries, the
Vesper Operating Companies and TowerCo, and returned personal mobile
service (SMP) licenses to Anatel, the telecommunications regulatory agency
in Brazil. The results of operations of the Vesper Operating Companies and
TowerCo, including gains and losses realized on the sales transactions and
the SMP licenses, are presented as discontinued operations. The Company's
statements of operations and cash flows for all prior periods have been
adjusted to present the discontinued operations.
(4) The sum of the earnings per share amounts may not equal total earnings per
share due to rounding.
* As adjusted as described in the notes above.
N/M - Not Meaningful
BUSINESS SEGMENT HIGHLIGHTS
QUALCOMM CDMA TECHNOLOGIES (QCT)
- Shipped approximately 35 million MSM phone chips to customers
worldwide during the third quarter of fiscal 2004, compared to
approximately 23 million units in the third quarter of fiscal 2003
and approximately 32 million units in the second quarter of fiscal
2004.
- Shipped CSM(TM) infrastructure chips for 3G CDMA2000 1X and 1xEV-DO
to support approximately 4.6 million equivalent voice channels,
compared to approximately 2.2 million in the third quarter of fiscal
2003 and approximately 5.7 million in the second quarter of fiscal
2004. Equivalent voice channels are provided rather than actual chip
shipments because our CSM infrastructure chips currently support
eight to 32 voice channels per chip.
- Addressed the strong demand for chipsets by adding capacity at
existing suppliers, as well as evaluated potential new suppliers to
supplement future needs.
- Announced the on-time sample shipment of the first chips from the
Enhanced Multimedia Platform. The MSM6150(TM) chipset for
CDMA2000 1X and the MSM6550(TM) chipset for CDMA2000 1X, 1xEV-DO
and GSM/GPRS deliver significantly increased processing capacity and
optimized audio, video, camera and graphics capabilities. These
high-performance, fully integrated single-chip solutions are
optimized to drive demand for data-intensive wireless multimedia.
- Announced the MSM6280(TM) chipset solution, supporting peak data
rates of 7.2 Mbps, to enable higher data rates in support of
advanced data services for High Speed Downlink
QUALCOMM Announces Third Quarter Fiscal 2004 Results Page 8 of 20
Packet Access (HSDPA), a next-generation feature of the WCDMA (UMTS)
standard. Samples of the MSM6280 are expected to ship in the second
half of 2005.
- Announced the Convergence Platform consisting of three chipset
solutions: MSM7200(TM), MSM7500(TM) and MSM7600(TM). These chipsets
will enable the incorporation of consumer electronic functionality
in wireless devices including high-fidelity entertainment,
interactive 3D gaming, a six mega pixel camera interface and 30
frames per second camcorder quality video recording and playback.
- Announced several new multimedia products and developments,
including:
- CMix(TM), a handset messaging technology based on
QUALCOMM's market-proven Compact Media Extensions(TM)
multimedia software.
- Licensing of Q3D(TM) and QXpander(R) technologies from
QSound Labs, Inc., a leading developer of audio and
voice software solutions for a 3D audio experience.
- Announced several new cost effective radioOne(TM) Zero Intermediate
Frequency (ZIF) products and enhancements, including:
- The RFR6135 receive RF chip, a fully integrated radioOne
ZIF solution for CDMA2000 1X and 1xEV-DO to optimize
handset designs for high-band market requirements.
- On-time sample shipping of the single-band RFR6122(TM)
and RFT6122(TM) radioOne ZIF chips, the wireless
industry's first CDMA2000 1X devices developed with RF
CMOS (Complementary Metal Oxide Semiconductor) process
technology.
- Expansion of the RFR6155(TM) device, QUALCOMM's first
dual-band RF CMOS receive chip for CDMA2000 1X, and the
RFT6150(TM) transmit device for dual-band roaming
capabilities.
- The radioOne RFR6275(TM) diversity receive chip to
increase network capacity and deliver higher speed data
rates for HSDPA.
QUALCOMM TECHNOLOGY LICENSING (QTL)
- Reported that licensees around the world are participating in the
growing 3G CDMA market:
- Forty-two subscriber licensees reported sales of
CDMA2000 1X products and 11 subscriber licensees
reported sales of WCDMA (UMTS) products during the
second quarter of fiscal 2004.
QUALCOMM Announces Third Quarter Fiscal 2004 Results Page 9 of 20
- Twelve infrastructure licensees reported sales of
CDMA2000 1X products and 11 infrastructure licensees
reported sales of WCDMA (UMTS) products during the
second quarter of fiscal 2004.
- WCDMA (UMTS) royalties contributed approximately 25
percent of total royalties reported by licensees in the
third quarter for sales in the second quarter of fiscal
2004.
QUALCOMM WIRELESS & INTERNET GROUP (QWI)
QUALCOMM INTERNET SERVICES (QIS)
- Hosted the BREW(R) 2004 Developers Conference in San Diego,
attracting more than 1,600 industry professionals including BREW
developers, publishers, operators and handset manufacturers from
around the world. Currently, 32 wireless operators are offering BREW
services in 22 countries and BREW-based application downloads
exceeded 140 million worldwide.
- Tata Teleservices in India announced the completion of its
deployment of BREW-based wireless services and became the first
operator in the world to launch QUALCOMM's BREWChat(R) push-to-chat
services.
- Announced that Yahoo!(R) Mobile joined the growing global community
of BREW publishers. As a BREW Publisher, Yahoo! Mobile plans to
create and offer wireless versions of its products, such as Yahoo!
Messenger for Mobile, to millions of subscribers.
- Introduced enhancements to the BREW solution, including:
- Value billing capabilities that allow wireless
operators to further monetize BREW applications by
offering customers additional purchase
opportunities within the context of content and
applications on their BREW-enabled devices.
- The newly released BREW 3.1 client software and
BREW UI Toolkit which include enhancements and new
tools designed to simplify and scale the creation
of a fully customized user interface (UI) that
works across multiple devices.
QUALCOMM WIRELESS BUSINESS SOLUTIONS(R) (QWBS)
- Shipped approximately 12,400 OmniTRACS(R) units and related products
in the third quarter of fiscal 2004, compared to approximately 8,400
in the third quarter of fiscal 2003 and 11,200 in the second quarter
of fiscal 2004. This brings the cumulative total number of OmniTRACS
and related product shipments to over 523,000 units shipped
worldwide.
QUALCOMM Announces Third Quarter Fiscal 2004 Results Page 10 of 20
- Announced the availability of QTRACS(R) Web, a new Web-based
interface to the EutelTRACS(TM) mobile communications system, a
satellite-based mobile communications and tracking system that
provides real-time messaging and position reporting between European
fleets and their operations centers.
CONFERENCE CALL
QUALCOMM's third quarter fiscal 2004 earnings conference call will be broadcast
live on July 21, 2004 beginning at 2:30 p.m. Pacific Daylight Time 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 July 21, 2004 beginning at
approximately 4:30 p.m. (PDT) through July 26, 2004. To listen to the replay,
U.S. callers may dial (800) 633-8284 and international callers may dial (402)
977-9140. U.S. and international callers should use reservation number 21199227.
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.
QUALCOMM Incorporated (www.qualcomm.com) is a leader in developing and
delivering innovative digital wireless communications products and services
based on the Company's CDMA digital technology. Headquartered in San Diego,
Calif., QUALCOMM is included in the S&P 500 Index and is a 2003 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 financial information excluding the QUALCOMM Strategic
Initiatives (QSI) segment to facilitate evaluation by management, investors and
analysts of its ongoing core operating businesses, including QUALCOMM CDMA
Technologies (QCT), QUALCOMM Technology Licensing (QTL) and QUALCOMM Wireless &
Internet (QWI). QSI results relate to
QUALCOMM Announces Third Quarter Fiscal 2004 Results Page 11 of 20
strategic investments for which the Company has exit strategies of varying
durations. Management believes that the information excluding QSI presents a
more representative measure of the operating and liquidity performance of the
Company because it excludes the effect of fluctuations in the values of
investments that are unrelated to the Company's operational performance.
The Company presents cash flow information excluding QSI and including
marketable securities. 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 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 Accounting 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. The financial information excluding
QSI should be considered in addition, not as a substitute for, or superior to,
financial measures calculated in accordance with GAAP. Reconciliations between
total QUALCOMM results and results excluding QSI and between total QUALCOMM cash
flow and cash, cash equivalents and marketable securities excluding the QSI
segment 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 and WCDMA (UMTS), both domestically
and internationally; our dependence on major customers and licensees;
QUALCOMM Announces Third Quarter Fiscal 2004 Results Page 12 of 20
fluctuations in the demand for CDMA based products, services or applications;
foreign currency fluctuations; strategic loans, investments and transactions the
we have or may pursue; dependence on third party manufacturers and suppliers;
our ability to maintain and improve operational efficiencies and profitability;
developments in current and future litigation as well as other risks detailed
from time-to-time in the Company's SEC reports.
###
QUALCOMM(R), Mobile Station Modem(TM), MSM(TM), gpsOne(TM), CSM(TM),
MSM6150(TM), MSM6550(TM), MSM6280(TM), MSM7200(TM), MSM7500(TM), MSM7600(TM),
CMix(TM), Compact Media Extensions(TM), radioOne(TM), RFR6135(TM), RFR6122(TM),
RFT6122(TM), RFR6155(TM), RFT6150(TM), RFR6275(TM), BREW(R), BREWChat(R),
QUALCOMM Wireless Business Solutions(R), OmniTRACS(R), QTRACS(R) and
EutelTRACS(TM) are trademarks and/or service marks of QUALCOMM Incorporated. All
other trademarks are the property of their respective owners.
QUALCOMM Announces Third Quarter Fiscal 2004 Results Page 13 of 20
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 27, 2004
-----------------------------------------------------
TOTAL
EXCLUDING QSI QSI QUALCOMM
------------ ----------- -------------
Revenues:
Equipment and services $ 887,901 $ - $ 887,901
Licensing and royalty fees 452,625 - 452,625
------------ ----------- -------------
1,340,526 - 1,340,526
------------ ----------- -------------
Operating expenses:
Cost of equipment and services revenues 369,189 - 369,189
Research and development 193,608 - 193,608
Selling, general and administrative 158,968 2,831 161,799
Amortization of other acquisition-related
intangible assets 407 - 407
Other (1,119) (5,225) (6,344)
------------ ----------- -------------
Total operating expenses 721,053 (2,394) 718,659
------------ ----------- -------------
Operating income 619,473 2,394 621,867
Investment income, net 52,749(a) (6,563)(c) 46,186
------------ ----------- -------------
Income (loss) before income taxes 672,222 (4,169) 668,053
Income tax (expense) benefit (189,465)(b) 7,836 (181,629)(b)
------------ ----------- -------------
Net income $ 482,757 $ 3,667 $ 486,424
============ =========== =============
Net earnings per common share:
Diluted $ 0.57(d) $ 0.00(d) $ 0.58(d)
============ =========== =============
Shares used in per share calculations:
Diluted 841,118 841,118 841,118
============ =========== =============
(a) Includes $38 million in interest income related to cash, cash equivalents
and marketable securities, which are not part of the Company's strategic
investment portfolio.
(b) The fiscal year 2004 estimated effective tax rate for continuing
operations for total QUALCOMM and QUALCOMM excluding QSI are approximately
29% and 30%, respectively.
(c) Includes $18 million equity in losses of investees, partially offset by $7
million in realized gains on investments, $2 million in interest income
and $2 million in gains on derivatives.
(d) The sum of the earnings per share amounts may not equal total earnings per
share due to rounding.
QUALCOMM Announces Third Quarter Fiscal 2004 Results Page 14 of 20
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 27, 2004
----------------------------------------------------
EXCLUDING TOTAL
QSI QSI QUALCOMM
------------- --------- -----------
Revenues:
Equipment and services $ 2,560,345 $ 88 $ 2,560,433
Licensing and royalty fees 1,202,315 - 1,202,315
------------- --------- -----------
3,762,660 88 3,762,748
------------- --------- -----------
Operating expenses:
Cost of equipment and services revenues 1,074,054 - 1,074,054
Research and development 512,569 - 512,569
Selling, general and administrative 410,281 11,799 422,080
Amortization of other acquisition-related
intangible assets 4,163 - 4,163
Other (1,161) (15,776) (16,937)
------------- --------- -----------
Total operating expenses 1,999,906 (3,977) 1,995,929
------------- --------- -----------
Operating income 1,762,754 4,065 1,766,819
Investment income (expense), net 141,438(a) (26,788)(d) 114,650
------------- --------- -----------
Income (loss) from continuing operations before income taxes 1,904,192 (22,723) 1,881,469
Income tax (expense) benefit (560,287)(c) 17,060 (543,227)(c)
------------- --------- -----------
Income (loss) from continuing operations 1,343,905 (5,663) 1,338,242
Loss from discontinued operations, net of income taxes (b) - (11,088) (11,088)
------------- --------- -----------
Net income (loss) $ 1,343,905 $ (16,751) $ 1,327,154
============= ========= ===========
Diluted earnings (loss) per common share
from continuing operations (e) $ 1.61 $ (0.01) $ 1.60
============= ========= ===========
Diluted loss per common share from
discontinued operations (e) $ - $ (0.01) $ (0.01)
============= ========= ===========
Diluted earnings (loss) per common share (e) $ 1.61 $ (0.02) $ 1.59
============= ========= ===========
Shares used in per share calculations:
Diluted 834,633 834,633 834,633
============= ========= ===========
(a) Includes $118 million in interest income related to cash, cash equivalents
and marketable securities, which are not part of the Company's strategic
investment portfolio.
(b) The results of operations related to the Vesper Operating Companies,
TowerCo and the SMP licenses, including gains and losses realized on sales
transactions, are presented as discontinued operations.
(c) The fiscal year 2004 estimated effective tax rate for continuing
operations for total QUALCOMM and QUALCOMM excluding QSI are approximately
29% and 30%, respectively.
(d) Includes $54 million equity in losses of investees and $1 million in
other-than-temporary losses on marketable securities, partially offset by
$14 million in interest income, $12 million in realized gains on
investments and $3 million gain on derivatives.
(e) The sum of the earnings per share amounts may not equal total earnings per
share due to rounding.
QUALCOMM Announces Third Quarter Fiscal 2004 Results Page 15 of 20
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 27, 2004
---------------------------------------------
EXCLUDING TOTAL
QSI QSI QUALCOMM
---------- ---------- ---------
Earnings before taxes, depreciation, amortization and other adjustments (1) $ 693,178 $ 6,050 $ 699,228
Working capital changes and taxes paid (2) (235,049) (1,778) (236,827)
---------- ---------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 458,129 4,272 462,401
Capital expenditures (76,030) - (76,030)
---------- ---------- ---------
FREE CASH FLOW (NET CASH PROVIDED BY OPERATING ACTIVITIES LESS
CAPITAL EXPENDITURES) 382,099 4,272 386,371
Net additional share capital 69,189 - 69,189
Dividends paid (81,134) - (81,134)
Net collections of finance receivables 575 - 575
Net collections (issuance) of notes receivables 37,098 (3,639) 33,459
Other investments (509) (15,900) (16,409)
Other items (191) 6,498 6,307
Changes in fair value and other changes to marketable securities (48,883) 10,407 (38,476)
Marketable securities pending settlement payment 5,654 - 5,654
Transfer from QSI (3) 21,207 (21,207) -
Transfer to QSI (4) (20,837) 20,837 -
---------- ---------- ---------
NET INCREASE IN CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES (5) $ 364,268 $ 1,268 $ 365,536
========= ========== =========
(1) Reconciliation to GAAP:
Net income $ 482,757 $ 3,667 $ 486,424
Non-cash adjustments (a) 220,555 9,866 230,421
Net realized gains on marketable securities and other investments (9,979) (7,483) (17,462)
Taxes refunded (155) - (155)
---------- ---------- ---------
Earnings before taxes, depreciation, amortization and other adjustments $ 693,178 $ 6,050 $ 699,228
========= ========== =========
(2) Reconciliation to GAAP:
Decrease in cash resulting from changes in working capital $ (235,204) $ (1,778) $(236,982)
Taxes refunded 155 - 155
---------- ---------- ----------
Working capital changes and taxes paid $ (235,049) $ (1,778) $(236,827)
========= ========== =========
(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 in cash and cash equivalents (GAAP) $ 62,226 $ - $ 62,226
Plus: Net purchase (proceeds) of marketable securities 345,269 (9,137) 336,132
Plus: Net increase (decrease) in fair value and other changes to
marketable securities (48,881) 10,405 (38,476)
Plus: Net increase in marketable securities pending settlement payment 5,654 - 5,654
---------- ---------- ---------
Net increase in cash, cash equivalents and marketable securities $ 364,268 $ 1,268 $ 365,536
========== ========== =========
(a) See detail following the nine month cash flow.
QUALCOMM Announces Third Quarter Fiscal 2004 Results Page 16 of 20
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 27, 2004
-----------------------------------------
EXCLUDING TOTAL
QSI QSI QUALCOMM
------------ ---------- -----------
Earnings before taxes, depreciation, amortization and other adjustments (1) $ 1,970,759 $ 21,994 $ 1,992,753
Working capital changes and taxes paid (2) (286,667) 5,482 (281,185)
----------- ---------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,684,092 27,476 1,711,568
Capital expenditures (193,581) (10) (193,591)
----------- ---------- -----------
FREE CASH FLOW (NET CASH PROVIDED BY OPERATING ACTIVITIES LESS
CAPITAL EXPENDITURES) 1,490,511 27,466 1,517,977
Net additional share capital 200,698 - 200,698
Proceeds from put options 5,103 5,103
Dividends paid (193,696) - (193,696)
Net collections of finance receivables 1,728 193,308 195,036
Net collections (issuance) of notes receivables 37,098 (33,922) 3,176
Other investments (16,567) (29,543) (46,110)
Other items (2,372) (11,023) (13,395)
Changes in fair value and other changes to marketable securities (36,562) 36,538 (24)
Marketable securities pending settlement receipt (8,859) - (8,859)
Net cash used by discontinued operations - (20,257) (20,257)
Transfer from QSI (3) 282,881 (282,881) -
Transfer to QSI (4) (130,791) 130,791 -
----------- ---------- -----------
NET INCREASE IN CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES (5) $ 1,629,172 $ 10,477 $ 1,639,649
=========== ========== ===========
(1) Reconciliation to GAAP:
Net income (loss) from continuing operations $ 1,343,905 $ (5,663) $ 1,338,242
Non-cash adjustments (b) 652,856 39,702 692,558
Net realized gains on marketable securities and other investments (20,986) (12,045) (33,031)
Taxes refunded (5,016) - (5,016)
----------- ---------- -----------
Earnings (loss) before taxes, depreciation, amortization and other adjustments $ 1,970,759 $ 21,994 $ 1,992,753
=========== ========== ===========
(2) Reconciliation to GAAP:
(Decrease) increase in cash resulting from changes in working capital $ (291,683) $ 5,482 $ (286,201)
Taxes refunded 5,016 - 5,016
----------- ---------- -----------
Working capital changes and taxes paid $ (286,667) $ 5,482 $ (281,185)
=========== ========== ===========
(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) $ (27,872) $ (8,478) $ (36,350)
Plus: Net purchase (proceeds) of marketable securities 1,702,465 (17,583) 1,684,882
Plus: Net (decrease) increase in fair value and other changes to
marketable securities (36,562) 36,538 (24)
Plus: Net increase in marketable securities pending settlement receipt (8,859) - (8,859)
----------- ---------- -----------
Net increase in cash, cash equivalents and marketable securities $ 1,629,172 $ 10,477 $ 1,639,649
=========== ========== ===========
(b) See detail on the following page.
QUALCOMM Announces Third Quarter Fiscal 2004 Results Page 17 of 20
SUPPLEMENTAL DETAIL TO THE
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS AND MARKETABLE SECURITIES
(IN THOUSANDS)
(UNAUDITED)
THREE MONTHS ENDED JUNE 27, 2004
--------------------------------
EXCLUDING TOTAL
QSI QSI QUALCOMM
--------- -------- ---------
(a) Non-cash adjustments are comprised of:
Depreciation and amortization $ 38,902 $ 1,281 $ 40,183
Change in fair values of derivative instruments (4,976) (1,697) (6,673)
Other-than-temporary losses on marketable securities and other investments - 18 18
Equity in losses of investees 140 17,601 17,741
Non-cash income tax expense (benefit) 165,741 (7,836) 157,905
Other non-cash charges 20,748 499 21,247
--------- -------- ---------
Total non-cash adjustments $ 220,555 $ 9,866 $ 230,421
========= ======== =========
NINE MONTHS ENDED JUNE 27, 2004
-------------------------------
EXCLUDING TOTAL
QSI QSI QUALCOMM
--------- -------- ---------
(b) Non-cash adjustments are comprised of:
Depreciation and amortization $ 116,533 $ 3,808 $ 120,341
Change in fair values of derivative instruments (4,673) (2,931) (7,604)
Other-than-temporary losses on marketable securities and other investments - 1,538 1,538
Equity in losses of investees 732 53,978 54,710
Non-cash income tax expense (benefit) 513,331 (17,059) 496,272
Other non-cash charges 26,933 368 27,301
--------- -------- ---------
Total non-cash adjustments $ 652,856 $ 39,702 $ 692,558
========= ======== =========
QUALCOMM Announces Third Quarter Fiscal 2004 Results Page 18 of 20
QUALCOMM INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
ASSETS
QUALCOMM
EXCLUDING
QSI QSI (a) QUALCOMM QUALCOMM
JUNE 27, JUNE 27, JUNE 27, SEPTEMBER 28,
2004 2004 2004 2003
----------- --------- ------------ -------------
Current assets:
Cash and cash equivalents $ 2,008,744 $ - $ 2,008,744 $ 2,045,094
Marketable securities 3,425,752 68,631 3,494,383 2,516,003
Accounts receivable, net 897,540 76 897,616 483,793
Inventories, net 109,489 - 109,489 110,351
Deferred tax assets (a) 503,751 - 503,751 611,536
Other current assets 88,919 266 89,185 181,987
----------- --------- ------------ -------------
Total current assets 7,034,195 68,973 7,103,168 5,948,764
Marketable securities 1,392,017 116,256 1,508,273 810,654
Property, plant and equipment, net 590,683 - 590,683 622,265
Goodwill, net 355,567 - 355,567 346,464
Deferred tax assets (a) 246,181 - 246,181 406,746
Other assets 175,468 242,244 417,712 687,543
----------- --------- ------------ -------------
Total assets $ 9,794,111 $ 427,473 $ 10,221,584 $ 8,822,436
=========== ========= ============ =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 239,270 $ 548 $ 239,818 $ 195,065
Payroll and other benefits
related liabilities 157,550 496 158,046 141,000
Unearned revenue 159,626 2 159,628 174,271
Current portion of long-term debt - - - 102,625
Other current liabilities 240,551 7,977 248,528 195,241
----------- --------- ------------ -------------
Total current liabilities 796,997 9,023 806,020 808,202
Unearned revenue 176,901 - 176,901 236,732
Long-term debt - - - 123,302
Other liabilities 97,412 - 97,412 55,628
----------- --------- ------------ -------------
Total liabilities 1,071,310 9,023 1,080,333 1,223,864
----------- --------- ------------ -------------
Stockholders' equity:
Preferred stock, $0.0001 par
value - - - -
Common stock, $0.0001 par value 82 - 82 81
Paid-in capital 6,686,866 - 6,686,866 6,324,971
Retained earnings 2,430,747 - 2,430,747 1,297,289
Accumulated other comprehensive
(loss) income (53,186) 76,742 23,556 (23,769)
----------- --------- ------------ -------------
Total stockholders' equity 9,064,509 76,742 9,141,251 7,598,572
----------- --------- ------------ -------------
Total liabilities and
stockholders' equity $10,135,819 $ 85,765 $ 10,221,584 $ 8,822,436
=========== ========= ============ =============
(a) Deferred tax assets and liabilities are not allocated to the Company's
segments. Net deferred tax assets and liabilities, if any, of subsidiaries
that are consolidated by QSI are reflected as QSI assets and liabilities.
QUALCOMM Announces Third Quarter Fiscal 2004 Results Page 19 of 20
QUALCOMM INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
--------------------- -------------------------
JUNE 27 JUNE 29 JUNE 27 JUNE 29
2004 2003 (a) 2004 2003 (a)
--------- --------- ----------- -----------
Revenues:
Equipment and services $ 887,901 $ 652,558 $ 2,560,433 $ 2,244,682
Licensing and royalty fees 452,625 239,034 1,202,315 732,301
--------- --------- ----------- -----------
1,340,526 891,592 3,762,748 2,976,983
--------- --------- ----------- -----------
Operating expenses:
Cost of equipment and services revenues 369,189 286,293 1,074,054 978,975
Research and development 193,608 135,690 512,569 379,970
Selling, general and administrative 161,799 115,506 422,080 353,851
Amortization of acquisition-related intangible assets 407 1,951 4,163 5,887
Asset impairment and related charges - 34,113 - 34,113
Other (6,344) (30,356) (16,937) (30,356)
--------- --------- ----------- -----------
Total operating expenses 718,659 543,197 1,995,929 1,722,440
--------- --------- ----------- -----------
Operating income 621,867 348,395 1,766,819 1,254,543
Investment income (expense), net 46,186 42,635 114,650 (37,080)
--------- --------- ----------- -----------
Income from continuing operations before income taxes 668,053 391,030 1,881,469 1,217,463
Income tax expense (181,629) (149,958) (543,227) (442,395)
--------- --------- ----------- -----------
Income from continuing operations 486,424 241,072 1,338,242 775,068
--------- --------- ----------- -----------
Loss from discontinued operations - (49,383) (11,088) (239,029)
--------- --------- ----------- -----------
Net income $ 486,424 $ 191,689 $ 1,327,154 $ 536,039
========= ========= =========== ===========
Basic earnings per common share from continuing
operations $ 0.60 $ 0.30 $ 1.66 $ 0.98
Basic loss per common share from discontinued
operations - (0.06) (0.01) (0.30)
--------- --------- ----------- -----------
Basic earnings per common share $ 0.60 $ 0.24 $ 1.65 $ 0.68
========= ========= =========== ===========
Diluted earnings per common share from continuing
operations $ 0.58 $ 0.30 $ 1.60 $ 0.95
Diluted loss per common share from discontinued
operations - (0.07) (0.01) (0.29)
--------- --------- ----------- -----------
Diluted earnings per common share $ 0.58 $ 0.23 $ 1.59 $ 0.66
========= ========= =========== ===========
Shares used in per share calculations:
Basic 810,882 790,511 805,843 787,606
========= ========= =========== ===========
Diluted 841,118 815,856 834,633 816,563
========= ========= =========== ===========
Dividends per share paid $ 0.10 $ 0.10 $ 0.24 $ 0.10
========= ========= =========== ===========
Dividends per share announced $ - $ 0.05 $ 0.24 $ 0.10
========= ========= =========== ===========
(a) As adjusted to present results related to Vesper, TowerCo and SMP licenses
as discontinued operations.
QUALCOMM Announces Third Quarter Fiscal 2004 Results Page 20 of 20
QUALCOMM INCORPORATED
PRIOR PERIOD SUPPLEMENTAL SCHEDULE
THIS SCHEDULE IS PROVIDED SOLELY FOR THE PURPOSES OF RECONCILING NON-GAAP
FINANCIAL MEASURES RELATED TO PRIOR PERIODS
(UNAUDITED)
SIX MONTHS ENDED MARCH 28, 2004
-------------------------------------------
EXCLUDING TOTAL
QSI QSI QUALCOMM
----------- --------- ----------
Revenues 2,422,134 88 2,422,222
----------- --------- ----------
Income (loss) from continuing operations before income taxes 1,231,970 (18,554) 1,213,416
Income tax (expense) benefit (370,822)(b) 9,224 (361,598)(b)
----------- --------- ----------
Income (loss) from continuing operations 861,148 (9,330) 851,818
Loss from discontinued operations, net of income taxes (a) - (11,088) (11,088)
----------- --------- ----------
Net income (loss) $ 861,148 $ (20,418) $ 840,730
=========== ========= ==========
Diluted earnings (loss) per common share
from continuing operations (d) $ 1.04 $ (0.01) $ 1.02
=========== ========= ==========
Diluted loss per common share from
discontinued operations (d) $ - $ (0.01) $ (0.01)
=========== ========= ==========
Diluted earnings (loss) per common share (d) $ 1.04 $ (0.02) $ 1.01
=========== ========= ==========
Shares used in per share calculations:
Diluted 831,391 831,391 831,391
=========== ========= ==========
THREE MONTHS ENDED SEPTEMBER 28, 2003
-------------------------------------------
Revenues 870,367 174 870,541
----------- --------- ----------
Income (loss) from continuing operations before income taxes 352,376 (4,629) 347,747
Income tax (expense) benefit (116,284)(c) 23,089 (93,195)(c)
----------- --------- ----------
Income from continuing operations 236,092 18,460 254,552
Income from discontinued operations, net of income taxes (a) - 36,850 36,850
----------- --------- ----------
Net income $ 236,092 $ 55,310 $ 291,402
=========== ========= ==========
Diluted earnings per common share
from continuing operations (d) $ 0.29 $ 0.03 $ 0.31
=========== ========= ==========
Diluted earnings per common share from
discontinued operations (d) $ - $ 0.04 $ 0.04
=========== ========= ==========
Diluted earnings loss per common share (d) $ 0.29 $ 0.07 $ 0.35
=========== ========= ==========
Shares used in per share calculations:
Diluted 821,330 821,330 821,330
=========== ========= ==========
TWELVE MONTHS ENDED SEPTEMBER 28, 2003
-------------------------------------------
Revenues 3,846,376 1,148 3,847,524
----------- --------- ----------
Income (loss) from continuing operations before income taxes 1,733,381 (168,171) 1,565,210
Income tax (expense) benefit (572,016) (c) 36,426 (535,590) (c)
----------- --------- ----------
Income (loss) from continuing operations 1,161,365 (131,745) 1,029,620
Loss from discontinued operations, net of income taxes (a) - (202,179) (202,179)
----------- --------- ----------
Net income (loss) $ 1,161,365 $(333,924) $ 827,441
=========== ========= ==========
Diluted earnings (loss) per common share
from continuing operations (d) $ 1.42 $ (0.16) $ 1.26
=========== ========= ==========
Diluted loss per common share from
discontinued operations (d) $ - $ (0.25) $ (0.25)
=========== ========= ==========
Diluted earnings loss per common share (d) $ 1.42 $ (0.41) $ 1.01
=========== ========= ==========
Shares used in per share calculations:
Diluted 817,755 817,755 817,755
=========== ========= ==========
(a) The results of operations related to the Vesper Operating Companies,
TowerCo and the SMP licenses, including gains and losses realized on sales
transactions, are presented as discontinued operations.
(b) The second quarter of fiscal 2004, estimated annual effective tax rate for
continuing operations for both total QUALCOMM and QUALCOMM excluding QSI
was approximately 30%.
(c) The fiscal year 2003 effective tax rates for continuing operations for
total QUALCOMM and QUALCOMM excluding QSI were approximately 34% and 33%,
respectively.
(d) The sum of the earnings per share amounts may not equal total earnings
per share due to rounding.
Revenues and earnings excluding the QSI segment, including for forward
looking periods, are calculated as total QUALCOMM revenues and earnings
less revenues and earnings attributed to the QSI segment. No other
adjustments are made.