Cover Page
Cover Page - shares | 6 Months Ended | |
Mar. 29, 2020 | Apr. 27, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | QUALCOMM INC/DE | |
Entity Central Index Key | 0000804328 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-27 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 29, 2020 | |
Document Transition Report | false | |
Entity File Number | 0-19528 | |
Entity Registrant State of Incorporation | DE | |
Entity Employer ID | 95-3685934 | |
Entity Address | 5775 Morehouse Dr. | |
Entity City | San Diego | |
Entity State | CA | |
Entity Zip Code | 92121-1714 | |
City Area Code | (858) | |
Entity Phone Number | 587-1121 | |
Title of 12(b) Security | Common Stock, $0.0001 par value | |
Trading Symbol | QCOM | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 1,124,927,980 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) shares in Millions, $ in Millions | Mar. 29, 2020 | Sep. 29, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 8,403 | $ 11,839 |
Marketable securities | 1,543 | 421 |
Accounts receivable, net | 3,081 | 2,471 |
Inventories | 1,700 | 1,400 |
Other current assets | 586 | 634 |
Total current assets | 15,313 | 16,765 |
Deferred tax assets | 1,249 | 1,196 |
Property, plant and equipment, net | 3,358 | 3,081 |
Goodwill | 6,294 | 6,282 |
Other intangible assets, net | 1,889 | 2,172 |
Other assets | 3,835 | 3,461 |
Total assets | 31,938 | 32,957 |
Current liabilities: | ||
Trade accounts payable | 2,061 | 1,368 |
Payroll and other benefits related liabilities | 699 | 1,048 |
Unearned revenues | 529 | 565 |
Short-term debt | 2,499 | 2,496 |
Other current liabilities | 3,986 | 3,458 |
Total current liabilities | 9,774 | 8,935 |
Unearned revenues | 968 | 1,160 |
Income taxes payable | 1,879 | 2,088 |
Long-term debt | 13,449 | 13,437 |
Other liabilities | 2,823 | 2,428 |
Total liabilities | 28,893 | 28,048 |
Commitments and contingencies (Note 5) | ||
Stockholders’ equity: | ||
Preferred stock, $0.0001 par value; 8 shares authorized; none outstanding | $ 0 | $ 0 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 8 | 8 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock and paid-in capital, $0.0001 par value; 6,000 shares authorized; 1,127 and 1,145 shares issued and outstanding, respectively | $ 0 | $ 343 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 6,000 | 6,000 |
Common Stock, Shares, Issued | 1,127 | 1,145 |
Common Stock, Shares, Outstanding | 1,127 | 1,145 |
Retained earnings | $ 2,990 | $ 4,466 |
Accumulated other comprehensive income | 55 | 100 |
Total stockholders’ equity | 3,045 | 4,909 |
Total liabilities and stockholders’ equity | $ 31,938 | $ 32,957 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 29, 2020 | Mar. 31, 2019 | Mar. 29, 2020 | Mar. 31, 2019 | |
Revenues: | ||||
Equipment and services | $ 4,050 | $ 3,753 | $ 7,583 | $ 7,506 |
Licensing | 1,166 | 1,229 | 2,709 | 2,318 |
Total revenues | 5,216 | 4,982 | 10,292 | 9,824 |
Costs and expenses: | ||||
Cost of revenues | 2,297 | 2,179 | 4,410 | 4,367 |
Research and development | 1,468 | 1,308 | 2,873 | 2,577 |
Selling, general and administrative | 483 | 573 | 1,011 | 1,100 |
Other | (23) | (18) | (23) | 130 |
Total costs and expenses | 4,225 | 4,042 | 8,271 | 8,174 |
Operating income | 991 | 940 | 2,021 | 1,650 |
Interest expense | (146) | (162) | (294) | (317) |
Investment and other (expense) income, net | (247) | 28 | (182) | 33 |
Income before income taxes | 598 | 806 | 1,545 | 1,366 |
Income tax (expense) benefit | (130) | (143) | (152) | 365 |
Net income | $ 468 | $ 663 | $ 1,393 | $ 1,731 |
Basic earnings per share | $ 0.41 | $ 0.55 | $ 1.22 | $ 1.43 |
Diluted earnings per share | $ 0.41 | $ 0.55 | $ 1.21 | $ 1.42 |
Shares used in per share calculations: | ||||
Basic | 1,139 | 1,213 | 1,142 | 1,213 |
Diluted | 1,151 | 1,217 | 1,155 | 1,220 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 29, 2020 | Mar. 31, 2019 | Mar. 29, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income | $ 468 | $ 663 | $ 1,393 | $ 1,731 |
Other comprehensive loss, net of income taxes: | ||||
Foreign currency translation losses | (44) | (17) | (13) | (41) |
Net unrealized losses on available-for-sale securities | (5) | (1) | (5) | (6) |
Net unrealized (losses) gains on derivative instruments | (31) | 0 | (28) | 16 |
Other (losses) gains | (1) | (8) | 7 | (8) |
Certain reclassifications included in net income | (1) | (3) | (6) | (2) |
Total other comprehensive loss | (82) | (29) | (45) | (41) |
Comprehensive income | $ 386 | $ 634 | $ 1,348 | $ 1,690 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Operating Activities: | ||
Net Income | $ 1,393 | $ 1,731 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization expense | 691 | 698 |
Income tax provision less than income tax payments | (350) | (958) |
Non-cash portion of share-based compensation expense | 603 | 452 |
Net gains on marketable securities and other investments | (49) | (9) |
Indefinite and long-lived asset impairment charges | 0 | 203 |
Impairment losses on other investments | 337 | 69 |
Other items, net | (75) | (190) |
Changes in assets and liabilities: | ||
Accounts receivable, net | (607) | 200 |
Inventories | (297) | (49) |
Other assets | (71) | 25 |
Trade accounts payable | 755 | (173) |
Payroll, benefits and other liabilities | 24 | (727) |
Unearned revenues | (153) | (122) |
Net Cash Provided by Operating Activities | 2,201 | 1,150 |
Investing Activities: | ||
Capital expenditures | (641) | (322) |
Payments to Acquire Marketable Securities | (1,312) | 0 |
Proceeds from sales and maturities of debt and equity marketable securities | 256 | 96 |
Acquisitions and other investments, net of cash acquired | (128) | (118) |
Other items, net | 56 | 83 |
Net Cash Used by Investing Activities | (1,769) | (261) |
Financing Activities: | ||
Proceeds from short-term debt | 1,116 | 3,297 |
Repayment of short-term debt | (1,116) | (3,303) |
Proceeds from issuance of common stock | 174 | 177 |
Repurchases and retirements of common stock | (2,340) | (1,019) |
Dividends paid | (1,415) | (1,502) |
Payments of tax withholdings related to vesting of share-based awards | (232) | (143) |
Other items, net | (55) | (38) |
Net Cash Used by Financing Activities | (3,868) | (2,531) |
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 |
Net decrease in total cash and cash equivalents | (3,436) | (1,642) |
Total cash and cash equivalents at beginning of period | 11,839 | 11,777 |
Total cash and cash equivalents at end of period | $ 8,403 | $ 10,135 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Millions | Total | Common Stock and Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income [Member] |
Balance at beginning of period at Sep. 30, 2018 | $ 807 | $ 0 | $ 542 | $ 265 |
Common stock issued under employee benefit plans and the related tax benefits | 177 | |||
Repurchases and retirements of common stock | (136) | (883) | ||
Share-based compensation | 486 | |||
Tax withholdings related to vesting of share-based payments | (143) | |||
Cumulative effect of accounting changes | 3,455 | (51) | ||
Net Income | 1,731 | |||
Dividends | (1,536) | |||
Other comprehensive loss | (41) | |||
Balance at end of period at Mar. 31, 2019 | $ 3,866 | 384 | 3,309 | 173 |
Dividends per share announced | $ 1.24 | |||
Balance at beginning of period at Dec. 30, 2018 | $ 3,617 | 0 | 3,415 | 202 |
Common stock issued under employee benefit plans and the related tax benefits | 150 | |||
Repurchases and retirements of common stock | 0 | 0 | ||
Share-based compensation | 237 | |||
Tax withholdings related to vesting of share-based payments | (3) | |||
Cumulative effect of accounting changes | 0 | 0 | ||
Net Income | 663 | |||
Dividends | (769) | |||
Other comprehensive loss | (29) | |||
Balance at end of period at Mar. 31, 2019 | $ 3,866 | 384 | 3,309 | 173 |
Dividends per share announced | $ 0.62 | |||
Balance at beginning of period at Sep. 29, 2019 | $ 4,909 | 343 | 4,466 | 100 |
Common stock issued under employee benefit plans and the related tax benefits | 171 | |||
Repurchases and retirements of common stock | (932) | (1,408) | ||
Share-based compensation | 650 | |||
Tax withholdings related to vesting of share-based payments | (232) | |||
Cumulative effect of accounting changes | 0 | 0 | ||
Net Income | 1,393 | |||
Dividends | (1,461) | |||
Other comprehensive loss | (45) | |||
Balance at end of period at Mar. 29, 2020 | $ 3,045 | 0 | 2,990 | 55 |
Dividends per share announced | $ 1.24 | |||
Balance at beginning of period at Dec. 29, 2019 | $ 4,513 | 0 | 4,376 | 137 |
Common stock issued under employee benefit plans and the related tax benefits | 151 | |||
Repurchases and retirements of common stock | (451) | (1,127) | ||
Share-based compensation | 331 | |||
Tax withholdings related to vesting of share-based payments | (31) | |||
Cumulative effect of accounting changes | 0 | 0 | ||
Net Income | 468 | |||
Dividends | (727) | |||
Other comprehensive loss | (82) | |||
Balance at end of period at Mar. 29, 2020 | $ 3,045 | $ 0 | $ 2,990 | $ 55 |
Dividends per share announced | $ 0.62 |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies Update (Notes) | 6 Months Ended |
Mar. 29, 2020 | |
Basis of Presentation [Abstract] | |
Basis of Presentation and Significant Accounting Policies Update | Basis of Presentation and Significant Accounting Policies Update Financial Statement Preparation. These condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and the instructions to Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, the interim financial information includes all normal recurring adjustments necessary for a fair statement of the results for the interim periods. These condensed consolidated financial statements are unaudited and should be read in conjunction with our Annual Report on Form 10-K for our fiscal year ended September 29, 2019. Operating results for interim periods are not necessarily indicative of operating results for an entire fiscal year. We operate and report using a 52-53 week fiscal year ending on the last Sunday in September. Each of the three and six months ended March 29, 2020 and March 31, 2019 included 13 weeks and 26 weeks, respectively. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in our condensed consolidated financial statements and the accompanying notes. Actual results could differ from those estimates. Certain prior year amounts have been reclassified to conform to the current year presentation. Recently Adopted Accounting Guidance. Leases: In February 2016, the FASB issued new accounting guidance related to leases (ASC 842) that outlines a new comprehensive lease accounting model and requires expanded disclosures. Under the new accounting guidance, we are required to recognize right-of-use assets and corresponding lease liabilities on the consolidated balance sheet. We adopted ASC 842 in the first quarter of fiscal 2020 using the modified retrospective approach, with the cumulative effect of initial adoption recorded as an adjustment to our opening condensed consolidated balance sheet at September 30, 2019. We elected to not record leases with a term of 12 months or less on our consolidated balance sheet. In addition, we applied the package of practical expedients permitted under the transition guidance, which among other things, does not require reassessment of lease classification upon adoption. Prior period results have not been restated and continue to be reported in accordance with the accounting guidance in effect for those periods (ASC 840). Upon adoption, we recorded $449 million of operating lease assets in other assets and $500 million of corresponding lease liabilities ($127 million recorded in other current liabilities and $373 million recorded in other liabilities). The difference between the operating lease assets and liabilities of $51 million primarily related to deferred rent liabilities that existed as of the date of adoption. Finance leases were not material for all periods presented. Adoption of the new accounting guidance did not have a material impact on our condensed consolidated statements of operations or cash flows. Accounting Policy Update. Leases: As a result of the adoption of ASC 842, we revised our lease accounting policy beginning in fiscal 2020 as follows. Operating lease assets and liabilities are recognized for leases with lease terms greater than 12 months based on the present value of the future lease payments over the lease term at the commencement date. Operating leases are included in other assets, other current liabilities and other liabilities on our consolidated balance sheet. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise such option. We account for substantially all lease and related non-lease components together as a single lease component. Operating lease expense is recognized on a straight-line basis over the lease term. Recent Accounting Guidance Not Yet Adopted. Financial Assets: In June 2016, the FASB issued new accounting guidance that changes the accounting for recognizing impairments of financial assets. Under the new accounting guidance, credit losses for financial assets held at amortized cost (such as accounts receivable) will be estimated based on expected losses rather than the current incurred loss impairment model. The new accounting guidance also modifies the impairment model for available-for-sale debt securities. These changes will result in earlier recognition of credit losses, if any. The new accounting guidance generally requires the modified retrospective transition method, with the cumulative effect of applying the new accounting guidance recognized as an adjustment to opening retained earnings in the year of adoption, except for certain financial assets where the prospective transition method is required, such as available-for-sale debt securities for which an other-than-temporary impairment has been recorded. We will adopt the new accounting guidance in the first quarter of fiscal 2021, and the impact of this new accounting guidance will largely depend on the composition and credit quality of our investment portfolio and accounts receivable, as well as economic conditions, at the time of adoption. |
Composition of Certain Financial Statement Items | Composition of Certain Financial Statement Items Inventories (in millions) March 29, September 29, Raw materials $ 101 $ 77 Work-in-process 802 667 Finished goods 797 656 $ 1,700 $ 1,400 Equity Method and Non-marketable Equity Investments. The carrying values of our equity method and non-marketable equity investments are recorded in other noncurrent assets and were as follows (in millions): March 29, September 29, Equity method investments $ 210 $ 343 Non-marketable equity investments 726 787 $ 936 $ 1,130 The rapid, global spread of the recent coronavirus (COVID-19) pandemic and associated containment and mitigation measures have negatively impacted the condition of economies and financial markets globally, which has negatively impacted certain companies in which we hold non-marketable equity investments, including those accounted for under the equity method, and to a lesser extent, non-marketable debt securities. Significant evaluation and judgments were required in determining if the negative effects of COVID-19 indicate that such investments were impaired, and if so, the extent of such impairment, in the second quarter of fiscal 2020. This included, among other items: (i) assessing the business impacts that COVID-19 had, and we currently expect to have in the future, on our investees, including taking into consideration the investee’s industry and geographic location and the impact to its customers, suppliers and employees, as applicable, (ii) evaluating the investees’ ability to respond to the impacts of COVID-19, including any significant deterioration in the investee’s financial condition and cash flows, as well as assessing liquidity and/or going concern risks and (iii) considering any appreciation in fair value that has not been recognized in the carrying values of such investments. Based on this evaluation, certain of our investments were impaired and written down to their estimated fair values in the second quarter of fiscal 2020 based on information currently known by us (a significant portion of which related to the full impairment of our investment in OneWeb (an equity method investee) who filed for bankruptcy in the second quarter of fiscal 2020) (Note 7). Although we believe that our judgments supporting our impairment assessments are reasonable (which relies on information reasonably available to us), the COVID-19 pandemic makes it challenging for us and our investees to estimate the future performance of our investees’ businesses. As circumstances change and/or new information becomes available, we may be required to record additional impairments in subsequent periods. Short-term Debt (in millions) March 29, September 29, Commercial paper $ 499 $ 499 Current portion of long-term debt 2,000 1,997 $ 2,499 $ 2,496 Subsequent to March 29, 2020, we reduced the total amount available for issuance under our unsecured commercial paper program from $5.0 billion to $4.5 billion. Revolving Credit Facility. We have an Amended and Restated Revolving Credit Facility (Revolving Credit Facility) that provides for unsecured revolving facility loans, swing line loans and letters of credit in an aggregate amount of up to $4.5 billion, which expires on November 8, 2021. At March 29, 2020, no amounts were outstanding under the Revolving Credit Facility. Long-term Debt. At March 29, 2020 and September 29, 2019, we had outstanding interest rate swaps with an aggregate notional amount of $750 million and $1.8 billion, respectively, related to our May 2015 Notes. During the second quarter of fiscal 2020, we terminated interest rate swaps related to our fixed-rate 3.0% notes due May 20, 2022 resulting in a deferred gain of $19 million, which is being amortized to interest expense over the remaining term of the fixed-rate 3.0% notes due May 20, 2022. At March 29, 2020 and September 29, 2019, the aggregate fair value of our remaining outstanding principal floating- and fixed-rate notes, including the current portion of long-term debt, based on Level 2 inputs, was approximately $16.7 billion and $16.5 billion, respectively. Revenues. We disaggregate our revenues by segment (Note 6) and type of products and services (as presented on our condensed consolidated statement of operations), as we believe this best depicts how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by economic factors. Substantially all of QCT’s (Qualcomm CDMA Technologies) revenues consist of equipment revenues that are recognized at a point in time, and substantially all of QTL’s (Qualcomm Technology Licensing) revenues represent licensing revenues that are recognized over time. Revenues recognized from performance obligations satisfied (or partially satisfied) in previous periods were $150 million and $398 million for the three months ended March 29, 2020 and March 31, 2019, respectively, and $178 million and $394 million for the six months ended March 29, 2020 and March 31, 2019, respectively, and primarily related to QTL royalty revenues recognized related to devices sold in prior periods, certain customer incentives and revenues related to a development contract with one of our equity method investees. Unearned revenues (which are considered contract liabilities) consist primarily of license fees for intellectual property with continuing performance obligations. In the six months ended March 29, 2020 and March 31, 2019, we recognized revenues of $307 million and $258 million, respectively, that were recorded as unearned revenues at September 29, 2019 and October 1, 2018, respectively. Remaining performance obligations, substantially all of which are included in unearned revenues, represent the aggregate amount of the transaction price of certain customer contracts yet to be recognized as revenues as of the end of the reporting period and exclude revenues related to (a) contracts that have an original expected duration of one year or less and (b) sales-based royalties (i.e., future royalty revenues) pursuant to our license agreements. Our remaining performance obligations are primarily comprised of certain customer contracts for which QTL received license fees upfront. At March 29, 2020, we had $1.5 billion of remaining performance obligations, of which $284 million, $511 million, $463 million, $202 million and $50 million was expected to be recognized as revenues for the remainder of fiscal 2020 and each of the subsequent four years from fiscal 2021 through 2024, respectively, and $26 million thereafter. Other Income, Costs and Expenses. Other income in the three and six months ended March 29, 2020 consisted of a $23 million gain related to a favorable legal settlement. Other income in the three months ended March 31, 2019 included a $43 million gain due to the partial recovery of a fine imposed in fiscal 2009 resulting from our appeal of the Korea Fair Trade Commission (KFTC), partially offset by $25 million in net restructuring and restructuring-related charges related to our Cost Plan that concluded in fiscal 2019. Other expenses in the six months ended March 31, 2019 included $204 million in net restructuring and restructuring-related charges related to our Cost Plan, partially offset by a $43 million gain due to the partial recovery of a fine we paid to the KFTC and a $31 million gain related to a favorable legal settlement. Investment and Other (Expense) Income, Net (in millions) Three Months Ended Six Months Ended March 29, March 31, March 29, March 31, Interest and dividend income $ 47 $ 78 $ 107 $ 143 Net gains (losses) on marketable securities 55 5 66 (19) Net (losses) gains on other investments (12) 6 36 42 Net (losses) gains on deferred compensation plan assets (72) 37 (42) (2) Impairment losses on other investments (265) (60) (337) (69) Net (losses) gains on derivative investments — (1) 1 (9) Equity in net losses of investees (6) (36) (16) (58) Net gains (losses) on foreign currency transactions 6 (1) 3 5 $ (247) $ 28 $ (182) $ 33 |
Composition of Certain Financia
Composition of Certain Financial Statement Items (Notes) | 6 Months Ended |
Mar. 29, 2020 | |
Balance Sheet Related Disclosures [Abstract] | |
Composition of Certain Financial Statement Items | Composition of Certain Financial Statement Items Inventories (in millions) March 29, September 29, Raw materials $ 101 $ 77 Work-in-process 802 667 Finished goods 797 656 $ 1,700 $ 1,400 Equity Method and Non-marketable Equity Investments. The carrying values of our equity method and non-marketable equity investments are recorded in other noncurrent assets and were as follows (in millions): March 29, September 29, Equity method investments $ 210 $ 343 Non-marketable equity investments 726 787 $ 936 $ 1,130 The rapid, global spread of the recent coronavirus (COVID-19) pandemic and associated containment and mitigation measures have negatively impacted the condition of economies and financial markets globally, which has negatively impacted certain companies in which we hold non-marketable equity investments, including those accounted for under the equity method, and to a lesser extent, non-marketable debt securities. Significant evaluation and judgments were required in determining if the negative effects of COVID-19 indicate that such investments were impaired, and if so, the extent of such impairment, in the second quarter of fiscal 2020. This included, among other items: (i) assessing the business impacts that COVID-19 had, and we currently expect to have in the future, on our investees, including taking into consideration the investee’s industry and geographic location and the impact to its customers, suppliers and employees, as applicable, (ii) evaluating the investees’ ability to respond to the impacts of COVID-19, including any significant deterioration in the investee’s financial condition and cash flows, as well as assessing liquidity and/or going concern risks and (iii) considering any appreciation in fair value that has not been recognized in the carrying values of such investments. Based on this evaluation, certain of our investments were impaired and written down to their estimated fair values in the second quarter of fiscal 2020 based on information currently known by us (a significant portion of which related to the full impairment of our investment in OneWeb (an equity method investee) who filed for bankruptcy in the second quarter of fiscal 2020) (Note 7). Although we believe that our judgments supporting our impairment assessments are reasonable (which relies on information reasonably available to us), the COVID-19 pandemic makes it challenging for us and our investees to estimate the future performance of our investees’ businesses. As circumstances change and/or new information becomes available, we may be required to record additional impairments in subsequent periods. Short-term Debt (in millions) March 29, September 29, Commercial paper $ 499 $ 499 Current portion of long-term debt 2,000 1,997 $ 2,499 $ 2,496 Subsequent to March 29, 2020, we reduced the total amount available for issuance under our unsecured commercial paper program from $5.0 billion to $4.5 billion. Revolving Credit Facility. We have an Amended and Restated Revolving Credit Facility (Revolving Credit Facility) that provides for unsecured revolving facility loans, swing line loans and letters of credit in an aggregate amount of up to $4.5 billion, which expires on November 8, 2021. At March 29, 2020, no amounts were outstanding under the Revolving Credit Facility. Long-term Debt. At March 29, 2020 and September 29, 2019, we had outstanding interest rate swaps with an aggregate notional amount of $750 million and $1.8 billion, respectively, related to our May 2015 Notes. During the second quarter of fiscal 2020, we terminated interest rate swaps related to our fixed-rate 3.0% notes due May 20, 2022 resulting in a deferred gain of $19 million, which is being amortized to interest expense over the remaining term of the fixed-rate 3.0% notes due May 20, 2022. At March 29, 2020 and September 29, 2019, the aggregate fair value of our remaining outstanding principal floating- and fixed-rate notes, including the current portion of long-term debt, based on Level 2 inputs, was approximately $16.7 billion and $16.5 billion, respectively. Revenues. We disaggregate our revenues by segment (Note 6) and type of products and services (as presented on our condensed consolidated statement of operations), as we believe this best depicts how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by economic factors. Substantially all of QCT’s (Qualcomm CDMA Technologies) revenues consist of equipment revenues that are recognized at a point in time, and substantially all of QTL’s (Qualcomm Technology Licensing) revenues represent licensing revenues that are recognized over time. Revenues recognized from performance obligations satisfied (or partially satisfied) in previous periods were $150 million and $398 million for the three months ended March 29, 2020 and March 31, 2019, respectively, and $178 million and $394 million for the six months ended March 29, 2020 and March 31, 2019, respectively, and primarily related to QTL royalty revenues recognized related to devices sold in prior periods, certain customer incentives and revenues related to a development contract with one of our equity method investees. Unearned revenues (which are considered contract liabilities) consist primarily of license fees for intellectual property with continuing performance obligations. In the six months ended March 29, 2020 and March 31, 2019, we recognized revenues of $307 million and $258 million, respectively, that were recorded as unearned revenues at September 29, 2019 and October 1, 2018, respectively. Remaining performance obligations, substantially all of which are included in unearned revenues, represent the aggregate amount of the transaction price of certain customer contracts yet to be recognized as revenues as of the end of the reporting period and exclude revenues related to (a) contracts that have an original expected duration of one year or less and (b) sales-based royalties (i.e., future royalty revenues) pursuant to our license agreements. Our remaining performance obligations are primarily comprised of certain customer contracts for which QTL received license fees upfront. At March 29, 2020, we had $1.5 billion of remaining performance obligations, of which $284 million, $511 million, $463 million, $202 million and $50 million was expected to be recognized as revenues for the remainder of fiscal 2020 and each of the subsequent four years from fiscal 2021 through 2024, respectively, and $26 million thereafter. Other Income, Costs and Expenses. Other income in the three and six months ended March 29, 2020 consisted of a $23 million gain related to a favorable legal settlement. Other income in the three months ended March 31, 2019 included a $43 million gain due to the partial recovery of a fine imposed in fiscal 2009 resulting from our appeal of the Korea Fair Trade Commission (KFTC), partially offset by $25 million in net restructuring and restructuring-related charges related to our Cost Plan that concluded in fiscal 2019. Other expenses in the six months ended March 31, 2019 included $204 million in net restructuring and restructuring-related charges related to our Cost Plan, partially offset by a $43 million gain due to the partial recovery of a fine we paid to the KFTC and a $31 million gain related to a favorable legal settlement. Investment and Other (Expense) Income, Net (in millions) Three Months Ended Six Months Ended March 29, March 31, March 29, March 31, Interest and dividend income $ 47 $ 78 $ 107 $ 143 Net gains (losses) on marketable securities 55 5 66 (19) Net (losses) gains on other investments (12) 6 36 42 Net (losses) gains on deferred compensation plan assets (72) 37 (42) (2) Impairment losses on other investments (265) (60) (337) (69) Net (losses) gains on derivative investments — (1) 1 (9) Equity in net losses of investees (6) (36) (16) (58) Net gains (losses) on foreign currency transactions 6 (1) 3 5 $ (247) $ 28 $ (182) $ 33 |
Income Taxes (Notes)
Income Taxes (Notes) | 6 Months Ended |
Mar. 29, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 3. Income Taxes We estimate our annual effective income tax rate to be 12% for fiscal 2020, which is lower than the U.S. federal statutory rate, primarily due to a significant portion of our income qualifying for preferential treatment as foreign-derived intangible income (FDII) at a 13% effective tax rate and due to benefits from our research and development tax credit. The effective tax rate of 22% for the second quarter of fiscal 2020 was higher than the estimated annual effective tax rate of 12% primarily due to $28 million of discrete net tax charges recorded in the second quarter of fiscal 2020, principally related to foreign currency losses on a noncurrent receivable related to our refund claim of Korean withholding tax. The United States Treasury Department has issued proposed regulations on several provisions of the 2017 Tax Cuts and Jobs Act, including FDII and interest expense deduction limitations, which may be finalized in the next several months. When finalized, these proposed regulations may adversely affect our provision for income taxes, results of operations and/or cash flows. Unrecognized tax benefits were $1.8 billion and $1.7 billion at March 29, 2020 and September 29, 2019, respectively, and primarily relate to our refund claim of Korean withholding tax. If successful, the refund will result in a corresponding reduction in U.S. foreign tax credits. We expect that the total amount of unrecognized tax benefits at March 29, 2020 will increase in the next 12 months as licensees in Korea continue to withhold taxes on future payments due under their licensing agreements at a rate higher than we believe is owed; such increase is not expected to have a significant impact on our income tax provision. |
Capital Stock (Notes)
Capital Stock (Notes) | 6 Months Ended |
Mar. 29, 2020 | |
Stockholders' Equity Attributable to Parent [Abstract] | |
Capital Stock | Capital Stock Stock Repurchase Program. On July 26, 2018, we announced a stock repurchase program authorizing us to repurchase up to $30 billion of our common stock. In the six months ended March 29, 2020 and March 31, 2019, we repurchased and retired 29.3 million and 16.8 million shares for $2.3 billion and $1.0 billion, respectively, before commissions. To reflect share repurchases in the consolidated balance sheet, we (i) reduce common stock for the par value of the shares, (ii) reduce paid-in capital for the amount in excess of par to zero during the quarter in which the shares are repurchased and (iii) record the residual amount, if any, to retained earnings. At March 29, 2020, $4.7 billion remained authorized for repurchase under our stock repurchase program. Subsequent to March 29, 2020, to maintain our financial liquidity position and flexibility, we suspended our stock repurchases, at least for the near-term, in light of COVID-19. Dividends . On March 10, 2020, we announced a 5% increase in our quarterly dividend per share of common stock from $0.62 to $0.65, which is effective for dividends payable after March 26, 2020. On April 21, 2020, we announced a cash dividend of $0.65 per share on our common stock, payable on June 25, 2020 to stockholders of record as of the close of business on June 4, 2020. Earnings Per Common Share. Basic earnings per common share is computed by dividing net income by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings per share is computed by dividing net income by the combination of the weighted-average number of dilutive common share equivalents, comprised of shares issuable under our share-based compensation plans and shares subject to accelerated share repurchase agreements, if any, and the weighted-average number of common shares outstanding during the reporting period. The following table provides information about the diluted earnings per share calculation (in millions): Three Months Ended Six Months Ended March 29, March 31, March 29, March 31, Dilutive common share equivalents included in diluted shares 12.0 3.8 13.5 7.0 Shares of common stock equivalents not included because the effect would be anti-dilutive or certain performance conditions were not satisfied at the end of the period 0.2 17.2 0.2 14.4 |
Commitments and Contingencies (
Commitments and Contingencies (Notes) | 6 Months Ended |
Mar. 29, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal and Regulatory Proceedings. Consolidated Securities Class Action Lawsuit: On January 23, 2017 and January 26, 2017, securities class action complaints were filed by purported stockholders of us in the United States District Court for the Southern District of California against us and certain of our current and former officers and directors. The complaints alleged, among other things, that we violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 thereunder, by making false and misleading statements and omissions of material fact in connection with certain allegations that we are or were engaged in anticompetitive conduct. The complaints sought unspecified damages, interest, fees and costs. On May 4, 2017, the court consolidated the two actions and appointed lead plaintiffs. On July 3, 2017, the lead plaintiffs filed a consolidated amended complaint asserting the same basic theories of liability and requesting the same basic relief. On September 1, 2017, we filed a motion to dismiss the consolidated amended complaint. On March 18, 2019, the court denied our motion to dismiss the complaint. On January 15, 2020, we filed a motion for judgment on the pleadings. The court has not yet ruled on our motion. We believe the plaintiffs’ claims are without merit. In re Qualcomm/Broadcom Merger Securities Litigation: On June 8, 2018 and June 26, 2018, securities class action complaints were filed by purported stockholders of us in the United States District Court for the Southern District of California against us and two of our current officers. The complaints alleged, among other things, that we violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 thereunder, by failing to disclose that we had submitted a notice to the Committee on Foreign Investment in the United States (CFIUS) in January 2018. The complaints sought unspecified damages, interest, fees and costs. On January 22, 2019, the court appointed the lead plaintiff in the action. On March 18, 2019, the plaintiffs filed a consolidated complaint asserting the same basic theories of liability and requesting the same basic relief. On May 10, 2019, we filed a motion to dismiss the consolidated complaint, and on March 10, 2020, the court granted our motion. The plaintiffs have until May 11, 2020 to file an amended complaint. We believe the plaintiffs’ claims are without merit. Consumer Class Action Lawsuit: Since January 18, 2017, a number of consumer class action complaints have been filed against us in the United States District Courts for the Southern and Northern Districts of California, each on behalf of a putative class of purchasers of cellular phones and other cellular devices. Currently, twenty-two such cases remained outstanding. In April 2017, the Judicial Panel on Multidistrict Litigation transferred the cases that had been filed in the Southern District of California to the Northern District of California. On May 15, 2017, the court entered an order appointing the plaintiffs’ co-lead counsel. On July 11, 2017, the plaintiffs filed a consolidated amended complaint alleging that we violated California and federal antitrust and unfair competition laws by, among other things, refusing to license standard-essential patents to our competitors, conditioning the supply of certain of our baseband chipsets on the purchaser first agreeing to license our entire patent portfolio, entering into exclusive deals with companies, including Apple Inc., and charging unreasonably high royalties that do not comply with our commitments to standard setting organizations. The complaint seeks unspecified damages and disgorgement and/or restitution, as well as an order that we be enjoined from further unlawful conduct. On August 11, 2017, we filed a motion to dismiss the consolidated amended complaint. On November 10, 2017, the court denied our motion, except to the extent that certain claims seek damages under the Sherman Antitrust Act. On July 5, 2018, the plaintiffs filed a motion for class certification, and the court granted that motion on September 27, 2018. On January 23, 2019, the United States Court of Appeals for the Ninth Circuit (Ninth Circuit) granted us permission to appeal the court’s class certification order. On January 24, 2019, the court stayed the case pending our appeal. On December 2, 2019, a hearing on our appeal of the class certification order was held before the Ninth Circuit. The Ninth Circuit has not yet ruled on our appeal. We believe the plaintiffs’ claims are without merit. Canadian Consumer Class Action Lawsuits: Since November 9, 2017, eight consumer class action complaints have been filed against us in Canada (in the Ontario Superior Court of Justice, the Supreme Court of British Columbia and the Quebec Superior Court), each on behalf of a putative class of purchasers of cellular phones and other cellular devices, alleging various violations of Canadian competition and consumer protection laws. The claims are similar to those in the U.S. consumer class action complaint. The complaints seek unspecified damages. One of the complaints in the Supreme Court of British Columbia has since been discontinued by the plaintiffs. We have not yet answered the complaints. We expect the Ontario and British Columbia complaints will be consolidated into one proceeding in British Columbia with a class certification hearing no earlier than late 2020. Once the certification hearing is scheduled, we expect the court to set a timetable for the exchange of evidence and briefing. As to the complaint filed in Quebec, on April 15, 2019, the Quebec Superior Court held a class certification hearing, and on April 30, 2019, the court issued an order certifying a class. We are awaiting the court to set a timetable for pre-trial steps, including discovery, as well as the exchange of expert evidence. We do not expect the trial to occur before 2022. We believe the plaintiffs’ claims are without merit. Korea Fair Trade Commission (KFTC) Investigation: On March 17, 2015, the KFTC notified us that it was conducting an investigation of us relating to the Korean Monopoly Regulation and Fair Trade Act (MRFTA). On December 27, 2016, the KFTC announced that it had reached a decision in the investigation, finding that we violated provisions of the MRFTA. On January 22, 2017, we received the KFTC’s formal written decision, which found that the following conducts violate the MRFTA: (i) refusing to license, or imposing restrictions on licenses for, cellular communications standard-essential patents with competing modem chipset makers; (ii) conditioning the supply of modem chipsets to handset suppliers on their execution and performance of license agreements with us; and (iii) coercing agreement terms including portfolio license terms, royalty terms and free cross-grant terms in executing patent license agreements with handset makers. The KFTC’s decision orders us to: (a) upon request by modem chipset companies, engage in good-faith negotiations for patent license agreements, without offering unjustifiable conditions, and if necessary submit to a determination of terms by an independent third party; (b) not demand that handset companies execute and perform under patent license agreements as a precondition for purchasing modem chipsets; (c) not demand unjustifiable conditions in our license agreements with handset companies, and upon request renegotiate existing patent license agreements; and (d) notify modem chipset companies and handset companies of the decision and order imposed on us and report to the KFTC new or amended agreements. According to the KFTC’s decision, the foregoing will apply to transactions between us and the following enterprises: (1) handset manufacturers headquartered in Korea and their affiliate companies; (2) enterprises that sell handsets in or to Korea and their affiliate companies; (3) enterprises that supply handsets to companies referred to in (2) above and the affiliate companies of such enterprises; (4) modem chipset manufacturers headquartered in Korea and their affiliate companies; and (5) enterprises that supply modem chipsets to companies referred to in (1), (2) or (3) above and the affiliate companies of such enterprises. The KFTC’s decision also imposed a fine of 1.03 trillion Korean won (approximately $927 million), which we paid on March 30, 2017. We believe that our business practices do not violate the MRFTA. On February 21, 2017, we filed an action in the Seoul High Court to cancel the KFTC’s decision. The Seoul High Court held hearings concluding on August 14, 2019 and, on December 4, 2019, announced its judgment affirming certain portions of the KFTC’s decision and finding other portions of the KFTC’s decision unlawful. The Seoul High Court cancelled the KFTC’s remedial orders described in (c) above, and solely insofar as they correspond thereto, the Seoul High Court cancelled the KFTC’s remedial orders described in (d) above. The Seoul High Court dismissed the remainder of our action to cancel the KFTC’s decision. On December 19, 2019, we filed a notice of appeal to the Korea Supreme Court challenging those portions of the Seoul High Court decision that are not in our favor. The KFTC filed a notice of appeal to the Korea Supreme Court challenging the portions of the Seoul High Court decision that are not in its favor. Both we and the KFTC have filed briefs on the merits. T he Korea Supreme Court has not yet ruled on our appeal or that of the KFTC. Icera Complaint to the European Commission (EC): On June 7, 2010, the EC notified and provided us with a redacted copy of a complaint filed with the EC by Icera, Inc. (subsequently acquired by Nvidia Corporation) alleging that we were engaged in anticompetitive activity. On July 16, 2015, the EC announced that it had initiated formal proceedings in this matter. On July 18, 2019, the EC issued a decision confirming their preliminary view that between 2009 and 2011, we engaged in predatory pricing by selling certain baseband chipsets to two customers at prices below cost with the intention of hindering competition and imposed a fine of approximately 242 million euros. On October 1, 2019, we filed an appeal of the EC’s decision with the General Court of the European Union. The court has not yet ruled on our appeal. We believe that our business practices do not violate the European Union (EU) competition rules. In the third quarter of fiscal 2019, we recorded a charge of $275 million to other expenses related to this EC fine. We provided a financial guarantee in the first quarter of fiscal 2020 to satisfy the obligation in lieu of cash payment while we appeal the EC’s decision. The fine is accruing interest at a rate of 1.50% per annum while it is outstanding. In the fourth quarter of fiscal 2019, we designated the liability as a hedge of our net investment in certain foreign subsidiaries, with gains and losses recorded in accumulated other comprehensive income as a component of the foreign currency translation adjustment. At March 29, 2020, the liability, including related foreign currency gains and accrued interest (which, to the extent they were not related to the net investment hedge, were recorded in investment and other (expense) income, net), was $272 million and included in other current liabilities. European Commission (EC) Investigation: On October 15, 2014, the EC notified us that it was conducting an investigation of us relating to Articles 101 and/or 102 of the Treaty on the Functioning of the European Union (TFEU). On July 16, 2015, the EC announced that it had initiated formal proceedings in this matter. On January 24, 2018, the EC issued a decision finding that pursuant to an agreement with Apple Inc. we paid significant amounts to Apple on the condition that it exclusively use our baseband chipsets in its smartphones and tablets, reducing Apple’s incentives to source baseband chipsets from our competitors and harming competition and innovation for certain baseband chipsets, and imposed a fine of 997 million euros. On April 6, 2018, we filed an appeal of the EC’s decision with the General Court of the European Union. The court has not yet ruled on our appeal. We believe that our business practices do not violate the EU competition rules. In the first quarter of fiscal 2018, we recorded a charge of $1.2 billion to other expenses related to this EC fine. We provided financial guarantees in the third quarter of fiscal 2018 to satisfy the obligation in lieu of cash payment while we appeal the EC’s decision. The fine is accruing interest at a rate of 1.50% per annum while it is outstanding. In the first quarter of fiscal 2019, we designated the liability as a hedge of our net investment in certain foreign subsidiaries, with gains and losses recorded in accumulated other comprehensive income as a component of the foreign currency translation adjustment. At March 29, 2020, the liability, including related foreign currency gains and accrued interest (which, to the extent they were not related to the net investment hedge, were recorded in investment and other (expense) income, net), was $1.1 billion and included in other current liabilities. European Commission (EC) Investigation regarding Radio Frequency Front Ends (RFFE): On December 3, 2019, we received a Request for Information from the EC notifying us that it is investigating whether we engaged in anti-competitive behavior in the European Union (EU)/European Economic Area (EEA) by leveraging our market position in 5G baseband processors in the RFFE space. We have responded to the Request for Information. If a violation is found, a broad range of remedies is potentially available to the EC, including imposing a fine (of up to 10% of our annual revenues) and/or injunctive relief prohibiting or restricting certain business practices. It is difficult to predict the outcome of this matter or what remedies, if any, may be imposed by the EC. We believe that our business practices do not violate the EU competition rules. United States Federal Trade Commission (FTC) v. QUALCOMM Incorporated: On September 17, 2014, the FTC notified us that it was conducting an investigation of us relating to Section 5 of the Federal Trade Commission Act (FTCA). On January 17, 2017, the FTC filed a complaint against us in the United States District Court for the Northern District of California alleging that we were engaged in anticompetitive conduct and unfair methods of competition in violation of Section 5 of the FTCA by conditioning the supply of cellular modem chipsets on the purchaser first agreeing to a license to our cellular standard-essential patents, paying incentives to purchasers of cellular modem chipsets to induce them to accept certain license terms, refusing to license our cellular standard-essential patents to our competitors and entering into alleged exclusive dealing arrangements with Apple Inc. The complaint sought a permanent injunction against our alleged violations of the FTCA and other unspecified ancillary equitable relief. On August 30, 2018, the FTC moved for partial summary judgment that our commitments to license our cellular standard-essential patents to the Alliance for Telecommunications Industry Solutions (ATIS) and the Telecommunications Industry Association (TIA) require us to make licenses available to rival sellers of cellular modem chipsets. On November 6, 2018, the court granted the FTC’s partial summary judgment motion. Trial was held January 4-29, 2019. On May 21, 2019, the court issued an Order setting forth its Findings of Fact and Conclusions of Law. The court concluded that we had monopoly power in the CDMA and premium-tier Long Term Evolution (LTE) cellular modem chip markets, and that we had used that power in these two markets to engage in anticompetitive acts, including (1) using threats of lack of access to cellular modem chip supply to coerce OEMs to accept license terms that include unreasonably high royalty rates; (2) refusing to license our cellular standard-essential patents to competitors selling cellular modem chips; and (3) entering into exclusive dealing arrangements with OEMs that foreclosed our rivals. The court further found that the royalties we charge OEMs are unreasonably high and reflect the use of our monopoly power over CDMA and premium-tier LTE cellular modem chips rather than just the value of our patents. The court concluded that our unreasonably high royalties constitute an anticompetitive surcharge on cellular modem chips sold by our competitors, which increases the effective price of our competitors’ cellular modem chips, reduces their margins and results in exclusivity. The court also found that our practice of not licensing competitors’ cellular modem chips violated our commitments to certain standard-development organizations and a duty under the antitrust laws to license competing cellular modem chip makers and helped us maintain our royalties at unreasonably high levels. Finally, the court found that incentive funds entered into with certain OEMs further harmed competing cellular modem chip makers’ ability to undermine our monopoly position, prevented rivals from entering the market and restricted the sales of those competitors that do enter. The court concluded that the combined effect of our conduct, together with our monopoly power, harmed the competitive process. The court imposed the following injunctive relief: (1) we must not condition the supply of cellular modem chips on a customer’s patent license status, and we must negotiate or renegotiate license terms with customers in good faith under conditions free from the threat of lack of access to or discriminatory provision of cellular modem chip supply or associated technical support or access to software; (2) we must make exhaustive cellular standard-essential patent licenses available to cellular modem chip suppliers on fair, reasonable and non-discriminatory (FRAND) terms and submit, as necessary, to arbitral or judicial dispute resolution to determine such terms; (3) we may not enter into express or de facto exclusive dealing agreements for the supply of cellular modem chips; and (4) we may not interfere with the ability of any customer to communicate with a government agency about a potential law enforcement or regulatory matter. The court also ordered us to submit to compliance and monitoring procedures for a period of seven years and to report to the FTC on an annual basis regarding our compliance with the above remedies. We disagree with the court’s conclusions, interpretation of the facts and application of the law. On May 31, 2019, we filed with the court a Notice of Appeal to the United States Court of Appeals for the Ninth Circuit (Ninth Circuit). On July 8, 2019, we filed a Motion for Partial Stay of Injunction Pending Appeal and a Consent Motion to Expedite Appeal in the Ninth Circuit. On August 23, 2019, the Ninth Circuit granted our Motion. Thus, pending the resolution of the appeal in the Ninth Circuit or until further order of the Ninth Circuit, the portions of the court’s injunction requiring that we must (i) make exhaustive cellular standard-essential patent licenses available to cellular modem chip suppliers and (ii) not condition the supply of cellular modem chips on a customer’s patent license status and must negotiate or renegotiate license terms with customers are stayed. On July 10, 2019, the Ninth Circuit granted our Motion to Expedite Appeal . On February 13, 2020, the Ninth Circuit heard oral argument, but has not yet ruled on our appeal. Contingent losses and other considerations: We will continue to vigorously defend ourself in the foregoing matters. However, litigation and investigations are inherently uncertain, and we face difficulties in evaluating or estimating likely outcomes or ranges of possible loss in antitrust and trade regulation investigations in particular. Other than with respect to the EC fines, we have not recorded any accrual at March 29, 2020 for contingent losses associated with these matters based on our belief that losses, while possible, are not probable. Further, any possible range of loss cannot be reasonably estimated at this time. The unfavorable resolution of one or more of these matters could have a material adverse effect on our business, results of operations, financial condition or cash flows. We are engaged in numerous other legal actions not described above arising in the ordinary course of our business and, while there can be no assurance, believe that the ultimate outcome of these other legal actions will not have a material adverse effect on our business, results of operations, financial condition or cash flows. Indemnifications . We generally do not indemnify our customers, licensees and suppliers for losses sustained from infringement of third-party intellectual property rights. However, we are contingently liable under certain agreements to defend and/or indemnify certain customers, licensees and suppliers against certain types of liability and/or damages arising from the infringement of third-party intellectual property rights. Our obligations under these agreements may be limited in terms of time and/or amount, and in some instances, we may have recourse against third parties for certain payments made by us. Claims and reimbursements under indemnification arrangements have not been material to our consolidated financial statements. At March 29, 2020, accruals for contingent liabilities associated with these indemnification arrangements were negligible. We have not recorded accruals for certain claims under indemnification arrangements based on our belief that additional liabilities, while possible, are not probable. Further, any possible range of loss cannot be reasonably estimated at this time. Operating Leases. We lease certain of our land, facilities and equipment under operating leases, with terms ranging from less than one year to 20 years, some of which include options to extend for up to 20 years. At March 29, 2020, other assets included $475 million of operating lease assets, with corresponding lease liabilities of $132 million recorded in other current liabilities and $389 million recorded in other liabilities. Operating lease expense for the three and six months ended March 29, 2020 was $44 million and $88 million, respectively, and $35 million and $72 million for the three and six months ended March 31, 2019, respectively. Cash paid under our operating leases was $74 million for the six months ended March 29, 2020. As of March 29, 2020, the weighted-average remaining lease term and weighted-average discount rate for operating leases were 6.0 years and 4%, respectively. At March 29, 2020, future lease payments under our operating leases were as follows (in millions): Operating Leases Remainder of fiscal 2020 $ 76 2021 130 2022 109 2023 66 2024 47 Thereafter 172 Total future lease payments 600 Imputed interest (79) Total lease liability balance $ 521 At September 29, 2019, future minimum lease payments under our noncancelable operating leases under ASC 840 were as follows (in millions): Operating Leases 2020 $ 138 2021 97 2022 66 2023 31 2024 18 Thereafter 35 Total $ 385 |
Segment Information (Notes)
Segment Information (Notes) | 6 Months Ended |
Mar. 29, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information We are organized on the basis of products and services and have three reportable segments. We conduct business primarily through our QCT semiconductor business and our QTL licensing business. QCT develops and supplies integrated circuits and system software based on CDMA, OFDMA and other technologies for use in mobile devices, wireless networks, devices used in the Internet of Things (IoT), broadband gateway equipment, consumer electronic devices and automotive telematics and infotainment systems. QTL grants licenses to use portions of our intellectual property portfolio, which includes certain patent rights essential to and/or useful in the manufacture, sale or use of certain wireless products. Our QSI (Qualcomm Strategic Initiatives) reportable segment makes strategic investments and includes revenues and related costs associated with development contracts with an equity method investee. We also have nonreportable segments, including QGOV (Qualcomm Government Technologies) and other technology and service initiatives. We evaluate the performance of our segments based on earnings (loss) before income taxes (EBT). Segment EBT includes the allocation of certain corporate expenses to the segments, including depreciation and amortization expense related to unallocated corporate assets. Certain income and charges are not allocated to segments in our management reports because they are not considered in evaluating the segments’ operating performance. Unallocated income and charges include certain interest expense, certain net investment income, certain share-based compensatio n, gains and losses on our deferred compensation plan liabilities and related assets and certain research and develop ment expenses, selling, general and administrative expenses and other expenses or income that were deemed to be not directly related to the businesses of the segments. Additionally, unallocated charges include recognition of the step-up of inventories and property, plant and equipment to fair value, amortization of certain intangible assets and certain other acquisition-related charges, third-party acquisition and integration services costs and certain other items, which may include major restructuring and restructuring-related costs, goodwill and long-lived asset impairment charges and litigation settlements and/or damages. The table below presents revenues, EBT and total assets for reportable segments (in millions): Three Months Ended Six Months Ended March 29, March 31, March 29, March 31, Revenues QCT $ 4,100 $ 3,722 $ 7,719 $ 7,461 QTL 1,072 1,122 2,477 2,141 QSI 10 98 30 125 Reconciling items 34 40 66 97 Total $ 5,216 $ 4,982 $ 10,292 $ 9,824 EBT QCT $ 667 $ 542 $ 1,145 $ 1,140 QTL 671 674 1,689 1,264 QSI (208) 17 (210) 25 Reconciling items (532) (427) (1,079) (1,063) Total $ 598 $ 806 $ 1,545 $ 1,366 March 29, September 29, Assets QCT $ 3,286 $ 2,307 QTL 1,465 1,541 QSI 1,281 1,708 Reconciling items 25,906 27,401 Total $ 31,938 $ 32,957 Segment assets are comprised of accounts receivable and inventories for all reportable segments other than QSI. QSI segment assets include certain non-marketable equity instruments, receivables and other investments. Total segment assets differ from total assets on a consolidated basis as a result of unallocated corporate assets primarily comprised of certain cash, cash equivalents, marketable and non-marketable securities, property, plant and equipment, deferred tax assets, goodwill, intangible assets, operating lease assets, noncurrent income taxes receivabl es, deferred compensation plan assets and assets of nonreportable segments. QCT accounts receivable increased by 75% in the first six months of fiscal 2020 from $908 million to $1.59 billion, primarily driven by an increase in revenues combined with the timing of integrated circuit shipments during the quarter and a decrease in the relative proportion of customer incentive arrangements that are recorded in accounts receivable. QCT inventories increased by 21% in the first six months of fiscal 2020 from $1.40 billion to $1.70 billion, primarily driven by the ramp in 5G. At March 29, 2020, 26% of total accounts receivable included royalties from Guangdong OPPO Mobile Telecommunications Corp., Ltd. (Oppo) and BBK Communication Technology Co., Ltd. (vivo) (who were previously disclosed as two key Chinese licensees), primarily from sales made in the last four fiscal quarters (including amounts that are not yet due) under license agreements that expired on March 31, 2020. We entered into new long-term, world-wide patent license agreements with these licensees, effective as of April 1, 2020, covering 3G/4G/5G multimode devices. We also reached agreements with these licensees to provide for payment of amounts due under the license agreements that expired on March 31, 2020 and for which certain of such amounts for prior periods were withheld while good faith negotiations occurred. The licensees have agreed to make full payment in the near term according to agreed upon payment schedules. These licensees/customers continue to make timely payments on purchases of integrated circuit products. No reversals of revenues were recognized in the second quarter of fiscal 2020 as a result of these agreements. QSI segment assets, which primarily consist of non-marketable and marketable equity investments, decreased by 25% in the first six months of fiscal 2020 from $1.71 billion to $1.28 billion, primarily due to certain impairment losses on other investments (Note 2) and the sale of certain marketable equity investments. Reconciling items for revenues and EBT in the previous table were as follows (in millions): Three Months Ended Six Months Ended March 29, March 31, March 29, March 31, Revenues Nonreportable segments $ 34 $ 40 $ 66 $ 97 $ 34 $ 40 $ 66 $ 97 EBT Unallocated cost of revenues $ (84) $ (104) $ (175) $ (218) Unallocated research and development expenses (216) (190) (475) (337) Unallocated selling, general and administrative expenses (56) (84) (172) (148) Unallocated other income (expenses) (Note 2) 23 18 23 (130) Unallocated interest expense (145) (159) (293) (313) Unallocated investment and other (expense) income, net (30) 109 52 130 Nonreportable segments (24) (17) (39) (47) $ (532) $ (427) $ (1,079) $ (1,063) |
Fair Value Measurements (Notes)
Fair Value Measurements (Notes) | 6 Months Ended |
Mar. 29, 2020 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following table presents our fair value hierarchy for assets and liabilities measured at fair value on a recurring basis at March 29, 2020 (in millions): Level 1 Level 2 Level 3 Total Assets Cash equivalents $ 2,898 $ 4,529 $ — $ 7,427 Marketable securities: U.S. Treasury securities and government-related securities — 3 — 3 Corporate bonds and notes — 1,253 — 1,253 Mortgage- and asset-backed and auction rate securities — 48 33 81 Equity securities 239 — — 239 Total marketable securities 239 1,304 33 1,576 Derivative instruments — 9 — 9 Other investments 404 — 39 443 Total assets measured at fair value $ 3,541 $ 5,842 $ 72 $ 9,455 Liabilities Derivative instruments $ — $ 29 $ — $ 29 Other liabilities 405 — 39 444 Total liabilities measured at fair value $ 405 $ 29 $ 39 $ 473 Activity within Level 3 of the Fair Value Hierarchy. Other investments and other liabilities included in Level 3 at March 29, 2020 were comprised of non-marketable debt instruments and contingent consideration related to business combinations, respectively. Activity for marketable securities, other investments and other liabilities classified within Level 3 of the valuation hierarchy was insignificant during the six months ended March 29, 2020, which was primarily related to impairments of certain of our non-marketable debt instruments (Note 2) and purchases of non-marketable debt instruments, and the six months ended March 31, 2019, which was primarily related to the issuance of a non-marketable debt instrument by a private company. Assets Measured and Recorded at Fair Value on a Nonrecurring Basis. We measure certain assets and liabilities at fair value on a nonrecurring basis. These assets and liabilities include equity method and non-marketable equity investments, assets acquired and liabilities assumed in an acquisition or in a nonmonetary exchange, and property, plant and equipment and intangible assets that are written down to fair value when they are held for sale or determined to be impaired. During the six months ended March 29, 2020, certain of our non-marketable equity investments were written down to their estimated fair values, which was recorded as a component of impairment losses on other investments in investment and other expense, net (Note 2). For a significant portion of these impairments, the estimated fair values resulted in a full write-off of the carrying values. The estimation of fair values was judgmental in nature and involved the use of significant estimates and assumptions. We determined these fair value measurements primarily using a market approach and key inputs and assumptions included estimated market value of assets, ability of investees to access additional financing or otherwise continue as a going concern and liquidation and other rights of the securities we hold. During the six months ended March 31, 2019, certain intangible assets and goodwill were written down to their estimated fair values. We also measured certain non-marketable equity securities received as non-cash consideration at fair value on a nonrecurring basis. We determined these fair value measurements using market and income approaches and key inputs and assumptions included projected cash flows, estimated selling prices, volatility and the rights of the securities we hold. |
Marketable Securities
Marketable Securities | 6 Months Ended |
Mar. 29, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Marketable Securities | Note 8. Marketable Securities We classify marketable securities as current or noncurrent based on the nature of the securities and their availability for use in current operations. Our marketable securities were comprised as follows (in millions): Current Noncurrent (1) March 29, September 29, March 29, September 29, Available-for-sale debt securities: U.S. Treasury securities and government-related securities $ 3 $ — $ — $ — Corporate bonds and notes 1,253 4 — — Mortgage- and asset-backed and auction rate securities 48 — 33 35 Total available-for-sale debt securities 1,304 4 33 35 Equity securities 239 417 — 1 Total marketable securities $ 1,543 $ 421 $ 33 $ 36 (1) Noncurrent marketable securities were included in other assets. The contractual maturities of available-for-sale marketable debt securities were as follows (in millions): March 29, Years to Maturity Less than one year $ 813 One to five years 443 No single maturity date 81 Total $ 1,337 Debt securities with no single maturity date included mortgage- and asset-backed securities and auction rate securities. |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies Update (Policies) | 6 Months Ended |
Mar. 29, 2020 | |
Basis of Presentation [Abstract] | |
Fiscal Period, Policy | We operate and report using a 52-53 week fiscal year ending on the last Sunday in September. Each of the three and six months ended March 29, 2020 and March 31, 2019 included 13 weeks and 26 weeks, respectively. |
Use of Estimates, Policy | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in our condensed consolidated financial statements and the accompanying notes. Actual results could differ from those estimates. |
Recent Accounting Pronouncements, Policy | Leases: In February 2016, the FASB issued new accounting guidance related to leases (ASC 842) that outlines a new comprehensive lease accounting model and requires expanded disclosures. Under the new accounting guidance, we are required to recognize right-of-use assets and corresponding lease liabilities on the consolidated balance sheet. We adopted ASC 842 in the first quarter of fiscal 2020 using the modified retrospective approach, with the cumulative effect of initial adoption recorded as an adjustment to our opening condensed consolidated balance sheet at September 30, 2019. We elected to not record leases with a term of 12 months or less on our consolidated balance sheet. In addition, we applied the package of practical expedients permitted under the transition guidance, which among other things, does not require reassessment of lease classification upon adoption. Prior period results have not been restated and continue to be reported in accordance with the accounting guidance in effect for those periods (ASC 840). Upon adoption, we recorded $449 million of operating lease assets in other assets and $500 million of corresponding lease liabilities ($127 million recorded in other current liabilities and $373 million recorded in other liabilities). The difference between the operating lease assets and liabilities of $51 million primarily related to deferred rent liabilities that existed as of the date of adoption. Finance leases were not material for all periods presented. Adoption of the new accounting guidance did not have a material impact on our condensed consolidated statements of operations or cash flows. Accounting Policy Update. Leases: As a result of the adoption of ASC 842, we revised our lease accounting policy beginning in fiscal 2020 as follows. Operating lease assets and liabilities are recognized for leases with lease terms greater than 12 months based on the present value of the future lease payments over the lease term at the commencement date. Operating leases are included in other assets, other current liabilities and other liabilities on our consolidated balance sheet. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise such option. We account for substantially all lease and related non-lease components together as a single lease component. Operating lease expense is recognized on a straight-line basis over the lease term. Recent Accounting Guidance Not Yet Adopted. Financial Assets: In June 2016, the FASB issued new accounting guidance that changes the accounting for recognizing impairments of financial assets. Under the new accounting guidance, credit losses for financial assets held at amortized cost (such as accounts receivable) will be estimated based on expected losses rather than the current incurred loss impairment model. The new accounting guidance also modifies the impairment model for available-for-sale debt securities. These changes will result in earlier recognition of credit losses, if any. The new accounting guidance generally requires the modified retrospective transition method, with the cumulative effect of applying the new accounting guidance recognized as an adjustment to opening retained earnings in the year of adoption, except for certain financial assets where the prospective transition method is required, such as available-for-sale debt securities for which an other-than-temporary impairment has been recorded. We will adopt the new accounting guidance in the first quarter of fiscal 2021, and the impact of this new accounting guidance will largely depend on the composition and credit quality of our investment portfolio and accounts receivable, as well as economic conditions, at the time of adoption. |
Equity and Cost Method Investments, Policy | The rapid, global spread of the recent coronavirus (COVID-19) pandemic and associated containment and mitigation measures have negatively impacted the condition of economies and financial markets globally, which has negatively impacted certain companies in which we hold non-marketable equity investments, including those accounted for under the equity method, and to a lesser extent, non-marketable debt securities. Significant evaluation and judgments were required in determining if the negative effects of COVID-19 indicate that such investments were impaired, and if so, the extent of such impairment, in the second quarter of fiscal 2020. This included, among other items: (i) assessing the business impacts that COVID-19 had, and we currently expect to have in the future, on our investees, including taking into consideration the investee’s industry and geographic location and the impact to its customers, suppliers and employees, as applicable, (ii) evaluating the investees’ ability to respond to the impacts of COVID-19, including any significant deterioration in the investee’s financial condition and cash flows, as well as assessing liquidity and/or going concern risks and (iii) considering any appreciation in fair value that has not been recognized in the carrying values of such investments. Based on this evaluation, certain of our investments were impaired and written down to their estimated fair values in the second quarter of fiscal 2020 based on information currently known by us (a significant portion of which related to the full impairment of our investment in OneWeb (an equity method investee) who filed for bankruptcy in the second quarter of fiscal 2020) (Note 7). Although we believe that our judgments supporting our impairment assessments are reasonable (which relies on information reasonably available to us), the COVID-19 pandemic makes it challenging for us and our investees to estimate the future performance of our investees’ businesses. As circumstances change and/or new information becomes available, we may be required to record additional impairments in subsequent periods |
Revenue Recognition | We disaggregate our revenues by segment (Note 6) and type of products and services (as presented on our condensed consolidated statement of operations), as we believe this best depicts how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by economic factors. Substantially all of QCT’s (Qualcomm CDMA Technologies) revenues consist of equipment revenues that are recognized at a point in time, and substantially all of QTL’s (Qualcomm Technology Licensing) revenues represent licensing revenues that are recognized over time. |
Stockholders' equity policy, Stock repurchases | To reflect share repurchases in the consolidated balance sheet, we (i) reduce common stock for the par value of the shares, (ii) reduce paid-in capital for the amount in excess of par to zero during the quarter in which the shares are repurchased and (iii) record the residual amount, if any, to retained earnings |
Segment Reporting Policy | We are organized on the basis of products and services and have three reportable segments. |
Segment Reporting EBT Policy | We evaluate the performance of our segments based on earnings (loss) before income taxes (EBT). Segment EBT includes the allocation of certain corporate expenses to the segments, including depreciation and amortization expense related to unallocated corporate assets. Certain income and charges are not allocated to segments in our management reports because they are not considered in evaluating the segments’ operating performance. Unallocated income and charges include certain interest expense, certain net investment income, certain share-based compensatio n, gains and losses on our deferred compensation plan liabilities and related assets and certain research and develop ment expenses, selling, general and |
Composition of Certain Financ_2
Composition of Certain Financial Statement Items (Tables) | 6 Months Ended |
Mar. 29, 2020 | |
Balance Sheet Related Disclosures [Abstract] | |
Inventories | Inventories (in millions) March 29, September 29, Raw materials $ 101 $ 77 Work-in-process 802 667 Finished goods 797 656 $ 1,700 $ 1,400 |
Equity Securities without Readily Determinable Fair Value | The carrying values of our equity method and non-marketable equity investments are recorded in other noncurrent assets and were as follows (in millions): March 29, September 29, Equity method investments $ 210 $ 343 Non-marketable equity investments 726 787 $ 936 $ 1,130 |
Schedule of Short-term Debt | Short-term Debt (in millions) March 29, September 29, Commercial paper $ 499 $ 499 Current portion of long-term debt 2,000 1,997 $ 2,499 $ 2,496 |
Investment and Other Income, Net | Investment and Other (Expense) Income, Net (in millions) Three Months Ended Six Months Ended March 29, March 31, March 29, March 31, Interest and dividend income $ 47 $ 78 $ 107 $ 143 Net gains (losses) on marketable securities 55 5 66 (19) Net (losses) gains on other investments (12) 6 36 42 Net (losses) gains on deferred compensation plan assets (72) 37 (42) (2) Impairment losses on other investments (265) (60) (337) (69) Net (losses) gains on derivative investments — (1) 1 (9) Equity in net losses of investees (6) (36) (16) (58) Net gains (losses) on foreign currency transactions 6 (1) 3 5 $ (247) $ 28 $ (182) $ 33 |
Capital Stock Earnings per Comm
Capital Stock Earnings per Common Share (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The following table provides information about the diluted earnings per share calculation (in millions): Three Months Ended Six Months Ended March 29, March 31, March 29, March 31, Dilutive common share equivalents included in diluted shares 12.0 3.8 13.5 7.0 Shares of common stock equivalents not included because the effect would be anti-dilutive or certain performance conditions were not satisfied at the end of the period 0.2 17.2 0.2 14.4 |
Commitments and Contingencies_2
Commitments and Contingencies (Tables) | 6 Months Ended |
Mar. 29, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Lessee, Operating Lease, Liability, Maturity [Table Text Block] | future lease payments under our operating leases were as follows (in millions): Operating Leases Remainder of fiscal 2020 $ 76 2021 130 2022 109 2023 66 2024 47 Thereafter 172 Total future lease payments 600 Imputed interest (79) Total lease liability balance $ 521 |
Schedule of future minimum lease payments for operating leases | future minimum lease payments under our noncancelable operating leases under ASC 840 were as follows (in millions): Operating Leases 2020 $ 138 2021 97 2022 66 2023 31 2024 18 Thereafter 35 Total $ 385 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Mar. 29, 2020 | |
Segment Reporting [Abstract] | |
Revenues, EBT, and Assets for reportable segments | The table below presents revenues, EBT and total assets for reportable segments (in millions): Three Months Ended Six Months Ended March 29, March 31, March 29, March 31, Revenues QCT $ 4,100 $ 3,722 $ 7,719 $ 7,461 QTL 1,072 1,122 2,477 2,141 QSI 10 98 30 125 Reconciling items 34 40 66 97 Total $ 5,216 $ 4,982 $ 10,292 $ 9,824 EBT QCT $ 667 $ 542 $ 1,145 $ 1,140 QTL 671 674 1,689 1,264 QSI (208) 17 (210) 25 Reconciling items (532) (427) (1,079) (1,063) Total $ 598 $ 806 $ 1,545 $ 1,366 March 29, September 29, Assets QCT $ 3,286 $ 2,307 QTL 1,465 1,541 QSI 1,281 1,708 Reconciling items 25,906 27,401 Total $ 31,938 $ 32,957 |
Reconciling items for reportable segments - revenues | Reconciling items for revenues and EBT in the previous table were as follows (in millions): Three Months Ended Six Months Ended March 29, March 31, March 29, March 31, Revenues Nonreportable segments $ 34 $ 40 $ 66 $ 97 $ 34 $ 40 $ 66 $ 97 EBT Unallocated cost of revenues $ (84) $ (104) $ (175) $ (218) Unallocated research and development expenses (216) (190) (475) (337) Unallocated selling, general and administrative expenses (56) (84) (172) (148) Unallocated other income (expenses) (Note 2) 23 18 23 (130) Unallocated interest expense (145) (159) (293) (313) Unallocated investment and other (expense) income, net (30) 109 52 130 Nonreportable segments (24) (17) (39) (47) $ (532) $ (427) $ (1,079) $ (1,063) |
Reconciling items for reportable segments - EBT | Reconciling items for revenues and EBT in the previous table were as follows (in millions): Three Months Ended Six Months Ended March 29, March 31, March 29, March 31, Revenues Nonreportable segments $ 34 $ 40 $ 66 $ 97 $ 34 $ 40 $ 66 $ 97 EBT Unallocated cost of revenues $ (84) $ (104) $ (175) $ (218) Unallocated research and development expenses (216) (190) (475) (337) Unallocated selling, general and administrative expenses (56) (84) (172) (148) Unallocated other income (expenses) (Note 2) 23 18 23 (130) Unallocated interest expense (145) (159) (293) (313) Unallocated investment and other (expense) income, net (30) 109 52 130 Nonreportable segments (24) (17) (39) (47) $ (532) $ (427) $ (1,079) $ (1,063) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Mar. 29, 2020 | |
Fair Value Measurements [Abstract] | |
Fair value hierarchy for assets and liabilities measured at fair value on a recurring basis | The following table presents our fair value hierarchy for assets and liabilities measured at fair value on a recurring basis at March 29, 2020 (in millions): Level 1 Level 2 Level 3 Total Assets Cash equivalents $ 2,898 $ 4,529 $ — $ 7,427 Marketable securities: U.S. Treasury securities and government-related securities — 3 — 3 Corporate bonds and notes — 1,253 — 1,253 Mortgage- and asset-backed and auction rate securities — 48 33 81 Equity securities 239 — — 239 Total marketable securities 239 1,304 33 1,576 Derivative instruments — 9 — 9 Other investments 404 — 39 443 Total assets measured at fair value $ 3,541 $ 5,842 $ 72 $ 9,455 Liabilities Derivative instruments $ — $ 29 $ — $ 29 Other liabilities 405 — 39 444 Total liabilities measured at fair value $ 405 $ 29 $ 39 $ 473 |
Marketable Securities (Tables)
Marketable Securities (Tables) | 6 Months Ended |
Mar. 29, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Marketable Securities | Our marketable securities were comprised as follows (in millions): Current Noncurrent (1) March 29, September 29, March 29, September 29, Available-for-sale debt securities: U.S. Treasury securities and government-related securities $ 3 $ — $ — $ — Corporate bonds and notes 1,253 4 — — Mortgage- and asset-backed and auction rate securities 48 — 33 35 Total available-for-sale debt securities 1,304 4 33 35 Equity securities 239 417 — 1 Total marketable securities $ 1,543 $ 421 $ 33 $ 36 (1) Noncurrent marketable securities were included in other assets. |
Investments Classified by Contractual Maturity Date | The contractual maturities of available-for-sale marketable debt securities were as follows (in millions): March 29, Years to Maturity Less than one year $ 813 One to five years 443 No single maturity date 81 Total $ 1,337 |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies Update Recently Adopted Accounting Pronouncements (Details) - USD ($) $ in Millions | Mar. 29, 2020 | Sep. 30, 2019 |
New Accounting Pronouncements [Abstract] | ||
Operating Lease, Right-of-Use Asset | $ 475 | $ 449 |
Operating Lease, Liability | 521 | 500 |
Operating Lease, Liability, Current | 132 | 127 |
Operating Lease, Liability, Noncurrent | $ 389 | 373 |
Deferred Rent Credit | $ 51 |
Composition of Certain Financ_3
Composition of Certain Financial Statement Items Inventories (Details) - USD ($) $ in Millions | Mar. 29, 2020 | Sep. 29, 2019 |
Inventory, Net [Abstract] | ||
Raw materials | $ 101 | $ 77 |
Work-in-process | 802 | 667 |
Finished goods | 797 | 656 |
Total inventories | $ 1,700 | $ 1,400 |
Composition of Certain Financ_4
Composition of Certain Financial Statement Items Equity Method and Non-marketable Equity Investments (Details) - USD ($) $ in Millions | Mar. 29, 2020 | Sep. 29, 2019 |
Equity Method and Non-marketable Equity Investments [Abstract] | ||
Equity Method Investments | $ 210 | $ 343 |
Non-marketable equity investments | 726 | 787 |
Carrying value of equity method and non-marketable equity investments | $ 936 | $ 1,130 |
Composition of Certain Financ_5
Composition of Certain Financial Statement Items Short-term Debt (Details) - USD ($) $ in Millions | Mar. 30, 2020 | Mar. 29, 2020 | Sep. 29, 2019 |
Short-term Debt [Abstract] | |||
Commercial Paper | $ 499 | $ 499 | |
Current portion of long-term debt | 2,000 | 1,997 | |
Debt, Current | 2,499 | $ 2,496 | |
Short-term Debt [Line Items] | |||
Line of Credit Facility, Average Outstanding Amount | 0 | ||
Revolving Credit Facility [Member] | November 2021 [Member] | |||
Short-term Debt [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity | 4,500 | ||
Commercial Paper [Member] | November 2021 [Member] | |||
Short-term Debt [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 5,000 | ||
Commercial Paper [Member] | November 2021 [Member] | Subsequent Event [Member] | |||
Short-term Debt [Line Items] | |||
Line Of Credit Facility Reduced Maximum Borrowing Capacity | $ 4,500 |
Composition of Certain Financ_6
Composition of Certain Financial Statement Items Long-term Debt (Details) - USD ($) $ in Millions | Mar. 29, 2020 | Sep. 29, 2019 |
Debt Instrument [Line Items] | ||
Deferred Gain (Loss) on Discontinuation of Interest Rate Swap | $ 19 | |
Long-term Debt, Fair Value | $ 16,700 | $ 16,500 |
Fixed Rate 3.00% notes due May 20, 2022 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, stated interest rate | 3.00% | |
Interest Rate Swap [Member] | ||
Debt Instrument [Line Items] | ||
Derivative, Notional Amount | $ 750 | $ 1,800 |
Composition of Certain Financ_7
Composition of Certain Financial Statement Items Revenue recognition (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 29, 2020 | Mar. 31, 2019 | Mar. 29, 2020 | Mar. 31, 2019 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Contract with Customer, Performance Obligation Satisfied in Previous Period | $ 150 | $ 398 | $ 178 | $ 394 |
Contract with Customer, Liability, Revenue Recognized | 307 | $ 258 | ||
Revenue, Remaining Performance Obligation, Amount | 1,500 | 1,500 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-03-30 | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Revenue, Remaining Performance Obligation, Amount | $ 284 | $ 284 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 6 months | 6 months | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-09-28 | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Revenue, Remaining Performance Obligation, Amount | $ 511 | $ 511 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year | 1 year | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-09-27 | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Revenue, Remaining Performance Obligation, Amount | $ 463 | $ 463 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year | 1 year | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-09-26 | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Revenue, Remaining Performance Obligation, Amount | $ 202 | $ 202 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year | 1 year | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-09-25 | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Revenue, Remaining Performance Obligation, Amount | $ 50 | $ 50 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year | 1 year | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-09-30 | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Revenue, Remaining Performance Obligation, Amount | $ 26 | $ 26 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year | 1 year |
Composition of Certain Financ_8
Composition of Certain Financial Statement Items Other Income, Costs and Expenses (Details) - USD ($) $ in Millions | Mar. 30, 2017 | Mar. 29, 2020 | Mar. 31, 2019 | Mar. 29, 2020 | Mar. 31, 2019 |
Loss Contingencies [Line Items] | |||||
Gain (Loss) Related to Litigation Settlement | $ 23 | $ 23 | $ 31 | ||
Restructuring and restructuring-related charges | $ 25 | 204 | |||
KFTC Complaint [Member] | |||||
Loss Contingencies [Line Items] | |||||
Loss Contingency, Loss in Period | $ 927 | $ (43) | $ (43) |
Composition of Certain Financ_9
Composition of Certain Financial Statement Items Investment and Other Income, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 29, 2020 | Mar. 31, 2019 | Mar. 29, 2020 | Mar. 31, 2019 | |
Investment Income, Net [Abstract] | ||||
Interest and dividend income | $ 47 | $ 78 | $ 107 | $ 143 |
Net gains (losses) on marketable securities | 55 | 5 | 66 | (19) |
Net (losses) gains on other investments | (12) | 6 | 36 | 42 |
Net (losses) gains on deferred compensation plan assets | (72) | 37 | (42) | (2) |
Impairment losses on other investments | (265) | (60) | (337) | (69) |
Net (losses) gains on derivative investments | 0 | (1) | 1 | (9) |
Equity in net losses of investees | (6) | (36) | (16) | (58) |
Net gains (losses) on foreign currency transactions | 6 | (1) | 3 | 5 |
Investment and other (expense) income, net | $ (247) | $ 28 | $ (182) | $ 33 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Mar. 29, 2020 | Mar. 31, 2019 | Mar. 29, 2020 | Mar. 31, 2019 | Sep. 27, 2020 | Sep. 29, 2019 | |
Income Taxes [Line Items] | ||||||
Effective income tax rate (benefit) | 22.00% | |||||
Income tax (expense) benefit | $ (130) | $ (143) | $ (152) | $ 365 | ||
Unrecognized tax benefits | 1,800 | $ 1,800 | $ 1,700 | |||
Internal Revenue Service (IRS) [Member] | ||||||
Income Taxes [Line Items] | ||||||
Income tax (expense) benefit | $ 28 | |||||
Forecast [Member] | ||||||
Income Taxes [Line Items] | ||||||
Effective income tax rate (benefit) | 12.00% | |||||
Forecast [Member] | FDII Effective Tax Rate [Member] | ||||||
Income Taxes [Line Items] | ||||||
Effective income tax rate (benefit) | 13.00% |
Capital Stock Share Repurchase
Capital Stock Share Repurchase Program (Details) - USD ($) shares in Millions, $ in Millions | 6 Months Ended | ||
Mar. 29, 2020 | Mar. 31, 2019 | Jul. 26, 2018 | |
Equity, Class of Treasury Stock [Line Items] | |||
Authorized amount | $ 30,000 | ||
Open Market Repurchases [Member] | |||
Equity, Class of Treasury Stock [Line Items] | |||
Stock repurchases and retired during the period, shares | 29.3 | 16.8 | |
Stock repurchased and retired during period, value | $ 2,300 | $ 1,000 | |
$30B stock repurchase program announced July 26, 2018 [Member] | |||
Equity, Class of Treasury Stock [Line Items] | |||
Remaining authorized amount | $ 4,700 |
Capital Stock Dividends (Detail
Capital Stock Dividends (Details) - $ / shares | Jun. 25, 2020 | Jun. 04, 2020 | Apr. 21, 2020 | Mar. 29, 2020 | Mar. 31, 2019 | Mar. 29, 2020 | Mar. 31, 2019 | Mar. 10, 2020 |
Subsequent Event [Line Items] | ||||||||
Percentage increase in common stock dividend per share announced | 5.00% | |||||||
Dividends per share announced | $ 0.62 | $ 0.62 | $ 1.24 | $ 1.24 | ||||
Amount of Increased Common Stock Dividends per Share Announced | $ 0.65 | |||||||
Subsequent Event [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Dividends per share announced | $ 0.65 | |||||||
Dividends Payable, Date Declared | Apr. 21, 2020 | |||||||
Dividends Payable, Date to be Paid | Jun. 25, 2020 | |||||||
Dividends Payable, Date of Record | Jun. 4, 2020 |
Capital Stock Earnings per Co_2
Capital Stock Earnings per Common Share (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 29, 2020 | Mar. 31, 2019 | Mar. 29, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||||
Dilutive common share equivalents included in diluted shares | 12 | 3.8 | 13.5 | 7 |
Shares of common stock equivalents not included because the effect would be anti-dilutive or certain performance conditions were not satisfied at the end of the period | 0.2 | 17.2 | 0.2 | 14.4 |
Commitments and Contingencies L
Commitments and Contingencies Legal and Regulatory Proceedings (Details) € in Millions, $ in Millions, ₩ in Billions | Jul. 18, 2019EUR (€) | Jan. 24, 2018EUR (€) | Mar. 30, 2017USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 24, 2017KRW (₩) | Dec. 24, 2017USD ($) | Mar. 31, 2019USD ($) | Mar. 29, 2020USD ($) |
Loss Contingencies [Line Items] | |||||||||
Loss Contingency Accrual | $ 0 | ||||||||
KFTC Complaint [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Loss contingency, loss in period | $ (927) | $ 43 | $ 43 | ||||||
KFTC Complaint [Member] | Korea (South), Won | |||||||||
Loss Contingencies [Line Items] | |||||||||
Loss contingency, loss in period | ₩ | ₩ (1,030) | ||||||||
Icera Complaint to EC [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Loss contingency, loss in period | $ (275) | ||||||||
Per annum interest rate for outstanding fines | 1.50% | ||||||||
Accrual for EC fine - other current liabilities | $ 272 | ||||||||
Icera Complaint to EC [Member] | Euro Member Countries, Euro | |||||||||
Loss Contingencies [Line Items] | |||||||||
Loss contingency, loss in period | € | € (242) | ||||||||
EC [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Loss contingency, loss in period | $ (1,200) | ||||||||
Per annum interest rate for outstanding fines | 1.50% | ||||||||
Accrual for EC fine - other current liabilities | $ 1,100 | ||||||||
EC [Member] | Euro Member Countries, Euro | |||||||||
Loss Contingencies [Line Items] | |||||||||
Loss contingency, loss in period | € | € (997) |
Commitments and Contingencies O
Commitments and Contingencies Operating Leases (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Mar. 29, 2020 | Mar. 31, 2019 | Mar. 29, 2020 | Mar. 31, 2019 | Sep. 30, 2019 | Sep. 29, 2019 | |
Leases, Operating [Abstract] | ||||||
Description of lessee leasing arrangements, operating leases | We lease certain of our land, facilities and equipment under operating leases, with terms ranging from less than one year to 20 years, some of which include options to extend for up to 20 years. | |||||
Operating Lease, Right-of-Use Asset | $ 475 | $ 475 | $ 449 | |||
Operating Lease, Liability, Current | 132 | 132 | 127 | |||
Operating Lease, Liability, Noncurrent | 389 | 389 | 373 | |||
Operating Lease, Expense | $ 44 | 88 | ||||
Operating Leases, Rent Expense | $ 35 | $ 72 | ||||
Operating Lease, Payments | $ 74 | |||||
Operating Lease, Weighted Average Remaining Lease Term | 6 years | 6 years | ||||
Operating Lease, Weighted Average Discount Rate, Percent | 4.00% | 4.00% | ||||
Operating Leases, Future Payments Due, Fiscal Year Maturity [Abstract] | ||||||
Lessee, Operating Lease, Liability, Payments, Remainder of Fiscal Year | $ 76 | $ 76 | ||||
Lessee, Operating Lease, Liability, Payments, Due Year Two | 130 | 130 | ||||
Lessee, Operating Lease, Liability, Payments, Due Year Three | 109 | 109 | ||||
Lessee, Operating Lease, Liability, Payments, Due Year Four | 66 | 66 | ||||
Lessee, Operating Lease, Liability, Payments, Due Year Five | 47 | 47 | ||||
Lessee, Operating Lease, Liability, Payments, Due after Year Five | 172 | 172 | ||||
Total future lease payments | 600 | 600 | ||||
Imputed interest | (79) | (79) | ||||
Operating Lease, Liability | $ 521 | $ 521 | $ 500 | |||
Remainder due in fiscal year - operating leases | $ 138 | |||||
Due in two years - operating leases | 97 | |||||
Due in three years - operating leases | 66 | |||||
Due in four years - operating leases | 31 | |||||
Due in five years - operating leases | 18 | |||||
Thereafter - operating leases | 35 | |||||
Operating Leases, Future Minimum Payments Due | $ 385 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Mar. 29, 2020 | Mar. 31, 2019 | Mar. 29, 2020 | Mar. 31, 2019 | Sep. 29, 2019 | |
Segment Reporting Information [Line Items] | |||||
Revenues | $ 5,216 | $ 4,982 | $ 10,292 | $ 9,824 | |
EBT | 598 | 806 | 1,545 | 1,366 | |
Assets | 31,938 | 31,938 | $ 32,957 | ||
Accounts receivable, net | 3,081 | 3,081 | 2,471 | ||
Inventories | 1,700 | 1,700 | 1,400 | ||
Revenue Reversal Recognized | 0 | ||||
Cost of revenues | (2,297) | (2,179) | (4,410) | (4,367) | |
Research and development expense | (1,468) | (1,308) | (2,873) | (2,577) | |
Selling, general and administrative expense | (483) | (573) | (1,011) | (1,100) | |
Other expenses | 23 | 18 | 23 | (130) | |
Interest expense | (146) | (162) | (294) | (317) | |
Investment and other (expense) income, net | (247) | 28 | (182) | 33 | |
Reconciling Items [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 34 | 40 | 66 | 97 | |
EBT | (532) | (427) | (1,079) | (1,063) | |
Assets | 25,906 | 25,906 | 27,401 | ||
Cost of revenues | (84) | (104) | (175) | (218) | |
Research and development expense | (216) | (190) | (475) | (337) | |
Selling, general and administrative expense | (56) | (84) | (172) | (148) | |
Other expenses | 23 | 18 | 23 | (130) | |
Interest expense | (145) | (159) | (293) | (313) | |
Investment and other (expense) income, net | (30) | 109 | 52 | 130 | |
QCT [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 4,100 | 3,722 | 7,719 | 7,461 | |
EBT | 667 | 542 | 1,145 | 1,140 | |
Assets | $ 3,286 | $ 3,286 | 2,307 | ||
Increase in Accounts Receivable | 75.00% | 75.00% | |||
Accounts receivable, net | $ 1,590 | $ 1,590 | 908 | ||
Increase in Inventory | 21.00% | 21.00% | |||
Inventories | $ 1,700 | $ 1,700 | 1,400 | ||
QTL [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 1,072 | 1,122 | 2,477 | 2,141 | |
EBT | 671 | 674 | 1,689 | 1,264 | |
Assets | $ 1,465 | $ 1,465 | 1,541 | ||
Portion of accounts receivable including estimated royalties due from two key Chinese licensees | 26.00% | 26.00% | |||
QSI [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | $ 10 | 98 | $ 30 | 125 | |
EBT | (208) | 17 | (210) | 25 | |
Assets | $ 1,281 | $ 1,281 | $ 1,708 | ||
Decrease in non-marketable and marketable equity investments | (25.00%) | (25.00%) | |||
Other Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | $ 34 | 40 | $ 66 | 97 | |
EBT | $ (24) | $ (17) | $ (39) | $ (47) |
Fair Value Measurements Fair Va
Fair Value Measurements Fair Value Hierarchy (Details) - Fair Value, Recurring [Member] $ in Millions | Mar. 29, 2020USD ($) |
Assets | |
Cash equivalents | $ 7,427 |
Marketable securities | 1,576 |
Derivative instruments | 9 |
Other investments | 443 |
Total assets measured at fair value | 9,455 |
Liabilities | |
Derivative instruments | 29 |
Other liabilities | 444 |
Total liabilities measured at fair value | 473 |
Level 1 [Member] | |
Assets | |
Cash equivalents | 2,898 |
Marketable securities | 239 |
Derivative instruments | 0 |
Other investments | 404 |
Total assets measured at fair value | 3,541 |
Liabilities | |
Derivative instruments | 0 |
Other liabilities | 405 |
Total liabilities measured at fair value | 405 |
Level 2 [Member] | |
Assets | |
Cash equivalents | 4,529 |
Marketable securities | 1,304 |
Derivative instruments | 9 |
Other investments | 0 |
Total assets measured at fair value | 5,842 |
Liabilities | |
Derivative instruments | 29 |
Other liabilities | 0 |
Total liabilities measured at fair value | 29 |
Level 3 [Member] | |
Assets | |
Cash equivalents | 0 |
Marketable securities | 33 |
Derivative instruments | 0 |
Other investments | 39 |
Total assets measured at fair value | 72 |
Liabilities | |
Derivative instruments | 0 |
Other liabilities | 39 |
Total liabilities measured at fair value | 39 |
US Treasury and Government-Related Securities | |
Assets | |
Marketable securities | 3 |
US Treasury and Government-Related Securities | Level 1 [Member] | |
Assets | |
Marketable securities | 0 |
US Treasury and Government-Related Securities | Level 2 [Member] | |
Assets | |
Marketable securities | 3 |
US Treasury and Government-Related Securities | Level 3 [Member] | |
Assets | |
Marketable securities | 0 |
Corporate bonds and notes | |
Assets | |
Marketable securities | 1,253 |
Corporate bonds and notes | Level 1 [Member] | |
Assets | |
Marketable securities | 0 |
Corporate bonds and notes | Level 2 [Member] | |
Assets | |
Marketable securities | 1,253 |
Corporate bonds and notes | Level 3 [Member] | |
Assets | |
Marketable securities | 0 |
Mortgage- and asset-backed and auction rate securities [Member] | |
Assets | |
Marketable securities | 81 |
Mortgage- and asset-backed and auction rate securities [Member] | Level 1 [Member] | |
Assets | |
Marketable securities | 0 |
Mortgage- and asset-backed and auction rate securities [Member] | Level 2 [Member] | |
Assets | |
Marketable securities | 48 |
Mortgage- and asset-backed and auction rate securities [Member] | Level 3 [Member] | |
Assets | |
Marketable securities | 33 |
Equity securities [Member] | |
Assets | |
Marketable securities | 239 |
Equity securities [Member] | Level 1 [Member] | |
Assets | |
Marketable securities | 239 |
Equity securities [Member] | Level 2 [Member] | |
Assets | |
Marketable securities | 0 |
Equity securities [Member] | Level 3 [Member] | |
Assets | |
Marketable securities | $ 0 |
Marketable Securities (Details)
Marketable Securities (Details) - USD ($) $ in Millions | Mar. 29, 2020 | Sep. 29, 2019 |
Marketable Securities [Line Items] | ||
Available-for-sale Securities, Current | $ 1,304 | $ 4 |
Marketable securities | 1,543 | 421 |
Available-for-sale Securities, Noncurrent | 33 | 35 |
Marketable Securities, Noncurrent | 33 | 36 |
Less than one year | 813 | |
One to five years | 443 | |
No single maturity date | 81 | |
Debt Securities, Available-for-sale | 1,337 | |
US Treasury and Government-Related Securities | ||
Marketable Securities [Line Items] | ||
Available-for-sale Securities, Current | 3 | 0 |
Available-for-sale Securities, Noncurrent | 0 | 0 |
Corporate Bond Securities | ||
Marketable Securities [Line Items] | ||
Available-for-sale Securities, Current | 1,253 | 4 |
Available-for-sale Securities, Noncurrent | 0 | 0 |
Mortgage- and asset-backed and auction rate securities [Member] | ||
Marketable Securities [Line Items] | ||
Available-for-sale Securities, Current | 48 | 0 |
Available-for-sale Securities, Noncurrent | 33 | 35 |
Equity securities [Member] | ||
Marketable Securities [Line Items] | ||
Marketable securities | 239 | 417 |
Marketable Securities, Noncurrent | $ 0 | $ 1 |