22 unchanged sentences
The information required by this item regarding directors is incorporated by reference to our 2022 Proxy Statement to be filed with the SEC in connection with our 2022 Annual Meeting of Stockholders (2022 Proxy Statement) in “Proposal 1:
−Removed: Election of Directors” under the subheading “Nominees for Election.” Certain information required by this item regarding executive officers is set forth in Item 1 of Part I of this Report under the heading “Information about our Executive Officers.” The information required by this item regarding corporate governance is incorporated by reference to our 2021 Proxy Statement in the section titled “Corporate Governance” under the headings “Code of Ethics and Corporate Governance Principles and Practices” and “Board Meetings, Committees and Attendance.”
+Added: Election of Directors” under the subheading “Nominees for Election.” Certain information required by this item regarding executive officers is set forth in Item 1 of Part I of this Report under the heading “Information about our Executive Officers.” The information required by this item regarding corporate governance is incorporated by reference to our 2022 Proxy Statement in the section titled “Corporate Governance” under the headings “Code of Ethics and Corporate Governance Principles and Practices” and “Board Meetings, Committees and Attendance” and in the section titled “Stock Ownership of Certain Beneficial Owners and Management” under the heading “Delinquent Section 16(a) Reports.”
Executive Compensation
−Removed: The information required by this item is incorporated by reference to our 2021 Proxy Statement in the sections titled “Executive Compensation and Related Information,” “HR and Compensation Committee Report” and “Director Compensation,” and in the section titled “Stock Ownership of Certain Beneficial Owners and Management” under the subheading “Compensation Committee Interlocks and Insider Participation.”
+Added: The information required by this item is incorporated by reference to our 2022 Proxy Statement in the sections titled “Executive Compensation and Related Information,” “Compensation Discussion and Analysis,” “HR and Compensation Committee Report,” “Compensation Tables and Narrative Disclosures” and “Director Compensation,” and in the section titled “Stock Ownership of Certain Beneficial Owners and Management” under the subheading “Compensation Committee Interlocks and Insider Participation.”
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
9 unchanged sentences
(1) Report of Independent Registered Public Accounting Firm F-1
−Removed: Consolidated Balance Sheets at September 27, 2020 and September 29, 2019 F-4
−Removed: Consolidated Statements of Operations for Fiscal 2020, 2019 and 2018 F-5
−Removed: Consolidated Statements of Comprehensive Income (Loss) for Fiscal 2020, 2019 and 2018 F-6
−Removed: Consolidated Statements of Cash Flows for Fiscal 2020, 2019 and 2018 F-7
−Removed: Consolidated Statements of Stockholders’ Equity for Fiscal 2020, 2019 and 2018 F-8
+Added: Consolidated Balance Sheets at September 26, 2021 and September 27, 2020
+Added: Consolidated Statements of Operations for Fiscal 2021, 2020 and 2019
+Added: Consolidated Statements of Comprehensive Income for Fiscal 2021, 2020 and 2019
+Added: Consolidated Statements of Cash Flows for Fiscal 2021, 2020 and 2019
+Added: Consolidated Statements of Stockholders’ Equity for Fiscal 2021, 2020 and 2019
Notes to Consolidated Financial Statements F- 8
−Removed: (2) Schedule II - Valuation and Qualifying Accounts for Fiscal 2020, 2019 and 2018 S-1
+Added: (2) Schedule II - Valuation and Qualifying Accounts for Fiscal 2021, 2020 and 2019
Financial statement schedules other than those listed above have been omitted because they are either not required, not applicable or the information is otherwise included in the notes to the consolidated financial statements.
Number Exhibit Description Form Date of First Filing Exhibit Number Filed Herewith
+Added: 2.1 Agreement and Plan of Merger, dated as of January 12, 2021, among Qualcomm Technologies, Inc., Nile Acquisition Corporation and NuVia, Inc.
+Added: 8-K 1/13/2021 2.1
+Added: 2.2 Agreement and Plan of Merger, dated as of October 4, 2021, by and among QUALCOMM Incorporated, SSW HoldCo LP, SSW Merger Sub Corp and Veoneer, Inc.
+Added: 8-K 10/4/2021 2.1
3.1 Amended and Restated Certificate of Incorporation .
8-K 4/20/2018 3.1
−Removed: Number Exhibit Description Form Date of First Filing Exhibit Number Filed Herewith
3.2 Amended and Restated Bylaws .
35 unchanged sentences
8-K 8/18/2020 4.3
−Removed: 4.18 Form of 1.300% Regulation S Global Notes due 2028.
−Removed: 8-K 8/18/2020 4.4
4.18 Form of 1.650% Rule 144A Global Notes due 2032.
8-K 8/18/2020 4.5
−Removed: 4.20 Form of 1.650% Regulation S Global Notes due 2032.
−Removed: 8-K 8/18/2020 4.6
4.19 Registration Rights Agreement, dated as of August 14, 2020.
8-K 8/18/2020 4.7
−Removed: 4.22 Description of registrant’s securities.
+Added: 4.20 Officers’ Certificate, dated January 6, 2021, for the 1.300% Notes due 2028 and the 1.650% Notes due 2032.
+Added: 10-Q 02/3/2021 4.23
+Added: Number Exhibit Description Form Date of First Filing Exhibit Number Filed Herewith
+Added: 4.21 Form of 1.300% Notes due 2028.
+Added: 10-Q 02/3/2021 4.24
+Added: 4.22 Form of 1.650% Notes due 2032.
+Added: 10-Q 02/3/2021 4.25
+Added: 4.23 Description of regi strant’s securities.
10-K 11/6/2019 4.15
3 unchanged sentences
10-Q 4/29/2020 10.7
−Removed: Number Exhibit Description Form Date of First Filing Exhibit Number Filed Herewith
−Removed: 10.3 Form of Non-Employee Director Deferred Stock Unit Grant Notices and Non-Employee Director Deferred Stock Unit Agreements under the 2016 Long-Term Incentive Plan for non-employee directors residing in the United States.
+Added: 10.3 Form of Non-Employee Director Deferred Stock Unit Grant Notices and Non-Employee Director Deferred Stock Unit Agreements under the 2016 Long-Term Incentive Plan for non-employee directors residing in the United States ( 2016 Form ) .
10-Q 4/20/2016 10.32
−Removed: 10.4 Form of Non-Employee Director Deferred Stock Unit Grant Notice and Non-Employee Director Deferred Stock Unit Agreement under the 2016 Long-Term Incentive Plan for non-employee directors residing in Hong Kong.
+Added: 10.4 Forms of Non-Employee Director Deferred Stock Unit Grant Notices and Non-Employee Director Deferred Stock Unit Agreements under the 2016 Long-Term Incentive Plan for Non-Employee Directors in Hong Kong.
10-Q 4/28/21 10.4
−Removed: 10.5 Amended and Restated Credit Agreement among QUALCOMM Incorporated, the lenders party thereto and Bank of America, N.A., as Administrative Agent, dated as of November 8, 2016.
−Removed: 8-K 11/9/2016 10.2
−Removed: 10.6 Form of Executive Performance Stock Unit Award Grant Notice and Executive Performance Stock Unit Award Agreement under the 2016 Long-Term Incentive Plan, which includes a September 25, 2017 to September 27, 2020 performance period.
+Added: 10.5 Credit Agreement among QUALCOMM Incorporated, the lenders party thereto, the letter of credit issuers party thereto and Bank of America, N.A., as administrative agent, swing line lender and a letter of credit issuer, dated as of December 8, 2020.
8-K 12/10/2020 10.1
−Removed: 10.7 Qualcomm Incorporated Non-Executive Officer Change in Control Severance Plan.
+Added: 10.6 Qualcomm Incorporated Non-Executive Officer Change in Control Severance Plan (as amended and restated).
7/28/2021 10.7
−Removed: 10.8 Form of 2016 Long-Term Incentive Plan Non-Employee Director Deferred Stock Unit Grant Notice and Non-Employee Director Deferred Stock Unit Agreement for Non-Employee Directors in Singapore.
+Added: 10.7 Forms of Non-Employee Director Deferred Stock Unit Grant Notices and Non-Employee Director Deferred Stock Unit Agreements under the 2016 Long-Term Incentive Plan for Non-Employee Directors in Singapore.
10-Q 4/28/21 10.8
−Removed: 10.9 Form of 2016 Long-Term Incentive Plan Non-Employee Director Deferred Stock Unit Grant Notice and Non-Employee Director Deferred Stock Unit Agreement.
+Added: 10.8 Form of 2016 Long-Term Incentive Plan Non-Employee Director Deferred Stock Unit Grant Notice and Non-Employee Director Deferred Stock Unit Agreement ( 2018 Form ) .
10-Q 4/25/2018 10.60
1 unchanged sentence
10-Q 4/25/2018 10.62
−Removed: 10.11 Qualcomm Incorporated Executive Officer Change in Control Severance Plan.
−Removed: 8-K 5/25/2018 10.1
−Removed: 10.12 Qualcomm Incorporated Executive Officer Severance Plan.
−Removed: 8-K 9/21/2018 10.1
+Added: 10.10 Qualcomm Incorporated Executive Officer Change in Control Severance Plan (as amended and restated).
+Added: 10-Q 7/28/2021 10.11
+Added: 10.11 Qualcomm Incorporated Executive Officer Severance Plan (as amended and restated).
+Added: 10-Q 7/28/2021 10.12
10.12 Qualcomm Incorporated 2016 Long-Term Incentive Plan CEO Performance Stock Option Grant Notice and CEO Performance Stock Option Agreement.
10-K 11/7/2018 10.59
−Removed: 10.14 Form of Qualcomm Incorporated 2016 Long-Term Incentive Plan Executive Performance Stock Unit Award Grant Notice and Executive Performance Stock Unit Award Agreement.
−Removed: 10-K 11/7/2018 10.60
−Removed: 10.15 Form of Qualcomm Incorporated 2016 Long-Term Incentive Plan Executive Restricted Stock Unit Grant Notice and Executive Restricted Stock Unit Agreement.
+Added: 10.13 Form of Qualcomm Incorporated 2016 Long-Term Incentive Plan Executive Performance Stock Unit Award Grant Notice and Executive Performance Stock Unit Award Agreement ( 2018 Form ) .
10-K 11/7/2018 10.60
−Removed: 10.16 QUALCOMM Incorporated Non-Qualified Deferred Compensation Plan, as amended and restated effective February 13, 2019.
+Added: 10.14 QUALCOMM Incorporated Non-Qualified Deferred Compensation Plan, as amended and restated effective J an uary 1, 2021 .
10-Q 2/3/2021 10.16
3 unchanged sentences
10-K 11/4/2020 10.22
−Removed: Number Exhibit Description Form Date of First Filing Exhibit Number Filed Herewith
10.17 Form of 202 1 Annual Cash Incentive Plan Performance Unit Agreement (2)
10-Q 2/3/2021 10.19
+Added: Number Exhibit Description Form Date of First Filing Exhibit Number Filed Herewith
10.18 Form of Qualcomm Incorporated 2016 Long-Term Incentive Plan Executive Restricted Stock Unit Grant Notice and Executive Restricted Stock Unit Agreement (2020 Form).
+Added: 10-Q 2/3/2021 10.20
10.19 Form of Qualcomm Incorporated 2016 Long-Term Incentive Plan Executive Performance Stock Unit Award Grant Notice and Executive Performance Stock Unit Award Agreement (2020 Form).
+Added: 10-K 11/4/2020 10.21
+Added: 10.20 Special Advisor Employment Agreement between the Company and Steven M.
+Added: Mollenkopf dated as of January 4, 2021.
+Added: 10-Q 4/28/2021 10.23
+Added: 10.21 Investment and Separation Matters Agreement, dated as of October 4, 2021, by and among QUALCOMM Incorporated, SSW HoldCo LP and SSW Merger Sub Corp (1)
+Added: 8-K 10/4/2021 10.1
+Added: 10.22 Form of Qualcomm Incorporated 2016 Long-Term Incentive Plan Executive Performance Stock Unit Award Grant Notices and Executive Performance Stock Unit Award Agreement (2021 Form).
+Added: 10.23 Form of Qualcomm Incorporated 2016 Long-Term Incentive Plan Executive Restricted Stock Unit Award Grant Notice and Executive Restricted Stock Unit Award Agreement (2021 Form).
10.24 Qualcomm Incorporated 2022 Director Compensation Plan.
1 unchanged sentence
23.1 Consent of Independent Registered Public Accounting Firm.
−Removed: 31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Steve Mollenkopf.
+Added: 31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Cristiano R.
31.2 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Akash Palkhiwala.
32.1 Certification pursuant to 18 U.S.C.
−Removed: Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, for Steve Mollenkopf.
+Added: Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, for Cristiano R.
32.2 Certification pursuant to 18 U.S.C.
11 unchanged sentences
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
−Removed: November 4, 2020
QUALCOMM Incorporated
−Removed: By /s/ Steve Mollenkopf
−Removed: Steve Mollenkopf
−Removed: Chief Executive Officer
+Added: November 3, 2021
+Added: By /s/ Cristiano R.
+Added: President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
Signature Title Date
−Removed: /s/ Steve Mollenkopf Chief Executive Officer and Director November 4, 2020
−Removed: Steve Mollenkopf (Principal Executive Officer)
−Removed: /s/ Akash Palkhiwala Executive Vice President and Chief Financial Officer November 4, 2020
+Added: /s/ Cristiano R.
+Added: Amon President and Chief Executive Officer, and Director November 3, 2021
+Added: Amon (Principal Executive Officer)
+Added: /s/ Akash Palkhiwala Chief Financial Officer November 3, 2021
Akash Palkhiwala (Principal Financial Officer)
1 unchanged sentence
Erin Polek (Principal Accounting Officer)
+Added: /s/ Sylvia Acevedo Director November 3, 2021
+Added: Sylvia Acevedo
/s/ Mark Fields Director November 3, 2021
1 unchanged sentence
Henderson Director November 3, 2021
+Added: /s/ Gregory N.
+Added: Johnson Director November 3, 2021
Livermore Director November 3, 2021
5 unchanged sentences
Rosenfeld Director November 3, 2021
−Removed: /s/ Neil Smit Director November 4, 2020
+Added: /s/ Kornelis (Neil) Smit Director November 3, 2021
+Added: Kornelis (Neil) Smit
/s/ Jean-Pascal Tricoire Director November 3, 2021
5 unchanged sentences
Opinions on the Financial Statements and Internal Control over Financial Reporting
−Removed: We have audited the accompanying consolidated balance sheets of QUALCOMM Incorporated and its subsidiaries as of September 27, 2020 and September 29, 2019, and the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended September 27, 2020, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).
+Added: We have audited the accompanying consolidated balance sheets of QUALCOMM Incorporated and its subsidiaries (the “Company”) as of September 26, 2021 and September 27, 2020, and the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended September 26, 2021, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).
We also have audited the Company's internal control over financial reporting as of September 26, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
24 unchanged sentences
Critical Audit Matters
−Removed: The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.
−Removed: The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
−Removed: Legal and Regulatory Proceedings
−Removed: As described in Notes 1 and 7 to the consolidated financial statements, the Company is currently involved in certain legal and regulatory proceedings.
−Removed: If there is at least a reasonable possibility that a material loss may have been incurred associated with a pending legal and regulatory proceeding, management discloses such fact, and if reasonably estimable, management provides an estimate of the possible loss or range of possible loss.
−Removed: Management records the best estimate of a loss related to pending legal and regulatory proceedings when the loss is considered probable and the amount can be reasonably estimated.
−Removed: Where a range of a loss can be reasonably estimated with no best estimate in the range, management records the minimum estimated liability.
−Removed: As additional information becomes available, management assesses the potential liability related to pending legal or regulatory proceedings and revises the estimates and updates the disclosures accordingly.
−Removed: Significant judgment is required by management in both the determination of probability of loss and the determination as to whether a loss is reasonably estimable.
−Removed: The principal considerations for our determination that performing procedures relating to legal and regulatory proceedings is a critical audit matter are the significant judgment by management when assessing the likelihood of a loss being incurred and when determining whether a reasonable estimate of the loss or range of loss can be made;
−Removed: this led to a high degree of auditor judgment, subjectivity and significant audit effort in evaluating management’s assessment of the loss contingencies associated with the legal and regulatory proceedings.
−Removed: Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.
−Removed: These procedures included testing the effectiveness of controls relating to management’s evaluation of legal and regulatory proceedings, including controls over determining whether a loss is probable and whether the amount of loss can be reasonably estimated, as well as financial statement disclosures.
−Removed: These procedures also included, among others:
−Removed: (i) obtaining and evaluating the letters of audit inquiry with external and internal legal counsel;
−Removed: (ii) reading certain correspondence the Company received from regulators;
−Removed: (iii) reading certain documents the Company has filed with the courts and related counterparty filings;
−Removed: (iv) reading certain documents issued by the courts;
−Removed: (v) evaluating the reasonableness of management’s process for identifying and assessing loss contingencies regarding whether an unfavorable outcome is probable and reasonably estimable;
−Removed: and (vi) evaluating the sufficiency of the Company’s legal and regulatory proceedings disclosures in the consolidated financial statements.
−Removed: Revenue Recognition - Huawei Agreements
−Removed: As described in Note 2 to the consolidated financial statements, in July 2020, the Company entered into a settlement agreement with Huawei to resolve their prior dispute related to their license agreement that expired on December 31, 2019 and also entered into a new long term, global patent license agreement that applies to sales of certain wireless products by Huawei beginning on January 1, 2020 (collectively “Huawei Agreements”).
−Removed: Amounts due under the settlement agreement are to be paid in installments by the end of June 2021 in accordance with an agreed upon payment schedule.
−Removed: Significant evaluation and judgment were required by management in determining the appropriate accounting for the Huawei Agreements.
−Removed: Management considered, among other items, (i) Huawei’s commitment to perform under the Huawei Agreements (including Huawei’s intent and ability to pay amounts due);
−Removed: (ii) Huawei’s performance to date under the Huawei Agreements (including timely payments made);
−Removed: (iii) Huawei’s current and projected financial condition (including the impact of enacted national security protection policies by the U.S.
−Removed: government on Huawei’s business);
−Removed: and (iv) certain contractual protections obtained under the Huawei Agreements.
−Removed: Based on this evaluation, management concluded the revenue recognition criteria were met, and recorded revenues of $1.8 billion in the fourth quarter of fiscal 2020 related to the full amount due from Huawei under the settlement agreement and amounts for the March 2020 and June 2020 quarters under the new global patent license agreement.
−Removed: In addition, revenues recorded for the fourth quarter of fiscal 2020 included estimated royalties due from Huawei for sales made in the September 2020 quarter under the new global patent license agreement.
−Removed: The principal considerations for our determination that performing procedures relating to revenue recognition for the Huawei Agreements is a critical audit matter are the significant judgment by management in determining the appropriate accounting for the Huawei Agreements, including evaluating the significant judgments related to determining Huawei's commitment to perform its contractual obligations and probability of collection under the Huawei Agreements;
−Removed: this led to a high degree of auditor judgment, subjectivity and significant audit effort in performing procedures to evaluate the appropriateness of revenue recognized for the Huawei Agreements.
+Added: The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.
+Added: The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
+Added: Revenue recognition – Qualcomm CDMA Technologies (QCT) customer incentive arrangements
+Added: As described in Notes 1 and 2 to the consolidated financial statements, the Company’s QCT segment, which recorded revenues of $27.0 billion in fiscal 2021, records reductions to revenues for customer incentive arrangements, including volume-related and other pricing rebates and cost reimbursements for marketing and other activities involving certain products and technologies, in the period that the related revenues are earned.
+Added: For certain QCT customer incentive arrangements, there is complexity in applying certain contractual terms to determine the amount recorded as a reduction to revenues.
+Added: The amounts accrued for customer incentive arrangements are recorded as a reduction to accounts receivable, net or as other current liabilities based on whether the Company has the intent and contractual right of offset.
+Added: Certain amounts recorded as a reduction to revenues for customer incentive arrangements are considered variable consideration and are included in the transaction price primarily based on estimating the most likely amount expected to be provided to the customer.
+Added: The principal considerations for our determination that performing procedures relating to revenue recognition of QCT customer incentive arrangements is a critical audit matter are the significant audit effort in performing procedures and evaluating audit evidence obtained related to the completeness and accuracy of reductions to QCT revenues recognized.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.
−Removed: These procedures included testing the effectiveness of controls relating to the revenue recognition process, including the assessment and evaluation of the Huawei Agreements.
−Removed: These procedures also included, among others, evaluating the revenue recognized for the Huawei Agreements and the reasonableness of significant judgments related to determining Huawei’s commitment to perform its contractual obligations and probability of collection
−Removed: under the Huawei Agreements.
−Removed: Evaluating the reasonableness of management’s judgments included (i) reading the Huawei Agreements;
−Removed: (ii) performing inquiries with key members of management who were involved in the negotiation and execution of the Huawei Agreements;
−Removed: (iii) evaluating Huawei’s compliance with initial payment and reporting obligations under the Huawei Agreements;
−Removed: (iv) evaluating management’s assessment of collectability, including the analysis of the impact of enacted national security protection policies by the U.S.
−Removed: government on Huawei’s business;
−Removed: and (v) confirming the outstanding receivable balance from the settlement agreement as of September 27, 2020 with Huawei.
+Added: These procedures included testing the effectiveness of controls relating to management’s review of and accounting for customer incentive arrangements as well as controls relating to management’s review over the completeness and accuracy of reductions to revenues in fiscal 2021 and accruals for customer incentive arrangements as of the balance sheet date.
+Added: These procedures also included, among others, testing the completeness and accuracy of customer incentive arrangement reductions to revenues and customer incentive arrangement accruals recorded in the consolidated financial statements, and recalculating, on a test basis, reductions to revenues and accruals for customer incentive arrangements based upon customer-specific contractual terms.
/s/ PricewaterhouseCoopers LLP
66 unchanged sentences
Income tax expense ( 1,231 ) ( 521 ) ( 3,095 )
−Removed: Net income (loss) $ 5,198 $ 4,386 $ ( 4,964 )
−Removed: Basic earnings (loss) per share $ 4.58 $ 3.63 $ ( 3.39 )
−Removed: Diluted earnings (loss) per share $ 4.52 $ 3.59 $ ( 3.39 )
+Added: Net income $ 9,043 $ 5,198 $ 4,386
+Added: Basic earnings per share $ 7.99 $ 4.58 $ 3.63
+Added: Diluted earnings per share $ 7.87 $ 4.52 $ 3.59
Shares used in per share calculations:
3 unchanged sentences
QUALCOMM Incorporated
−Removed: CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
+Added: CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions)
2 unchanged sentences
2020 September 29,
−Removed: Net income (loss) $ 5,198 $ 4,386 $ ( 4,964 )
−Removed: Other comprehensive income (loss), net of income taxes:
+Added: Net income $ 9,043 $ 5,198 $ 4,386
+Added: Other comprehensive (loss) income, net of income taxes:
Foreign currency translation gains (losses) 40 60 ( 110 )
−Removed: Net unrealized gains (losses) on certain available-for-sale securities, net of tax (expense) benefit of ($ 1 ), $ 0 and ($ 8 ), respectively
−Removed: Net unrealized gains (losses) on derivative instruments, net of tax (expense) benefit of ($ 8 ), ($ 7 ) and $ 6 , respectively
−Removed: Other gains (losses) 7 ( 19 ) ( 3 )
−Removed: Other reclassifications included in net income (loss), net of tax benefit (expense) of $ 5 , $ 1 and ($ 3 ), respectively
−Removed: ( 11 ) ( 5 ) 8
−Removed: Total other comprehensive income (loss) 107 ( 114 ) ( 119 )
−Removed: Comprehensive income (loss) $ 5,305 $ 4,272 $ ( 5,083 )
+Added: Net unrealized (losses) gains on certain available-for-sale securities ( 5 ) 22 ( 6 )
+Added: Net unrealized (losses) gains on derivative instruments ( 53 ) 29 26
+Added: Other (losses) gains ( 2 ) 7 ( 19 )
+Added: Other reclassifications included in net income ( 59 ) ( 11 ) ( 5 )
+Added: Total other comprehensive (loss) income ( 79 ) 107 ( 114 )
+Added: Comprehensive income $ 8,964 $ 5,305 $ 4,272
See accompanying notes.
6 unchanged sentences
Operating Activities:
−Removed: Net income (loss) $ 5,198 $ 4,386 $ ( 4,964 )
−Removed: Adjustments to reconcile net income (loss) to net cash provided by operating activities:
+Added: Net income $ 9,043 $ 5,198 $ 4,386
+Added: Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense 1,582 1,393 1,401
20 unchanged sentences
Other items, net ( 59 ) 43 67
−Removed: Net cash (used) provided by investing activities ( 5,263 ) ( 806 ) 2,381
+Added: Net cash used by investing activities ( 3,356 ) ( 5,263 ) ( 806 )
Financing Activities:
11 unchanged sentences
Effect of exchange rate changes on cash and cash equivalents 27 24 ( 32 )
−Removed: Net (decrease) increase in total cash and cash equivalents ( 5,132 ) 62 ( 25,252 )
+Added: Net increase (decrease) in total cash and cash equivalents 409 ( 5,132 ) 62
Total cash and cash equivalents at beginning of period 6,707 11,839 11,777
11 unchanged sentences
Balance at beginning of period
−Removed: Common stock issued under employee benefit plans and the related tax benefits
+Added: Common stock issued under employee benefit plans 345 331 417
Repurchases and retirements of common stock
4 unchanged sentences
( 737 ) ( 347 ) ( 268 )
+Added: Stock awards assumed in acquisition 10 — —
Balance at end of period
3 unchanged sentences
Cumulative effect of accounting changes — — 3,455
−Removed: Net income (loss) 5,198 4,386 ( 4,964 )
+Added: Net income 9,043 5,198 4,386
Repurchases and retirements of common stock
6 unchanged sentences
Cumulative effect of accounting changes — — ( 51 )
−Removed: Other comprehensive income (loss) 107 ( 114 ) ( 119 )
+Added: Other comprehensive (loss) income ( 79 ) 107 ( 114 )
Balance at end of period
8 unchanged sentences
We are a global leader in the development and commercialization of foundational technologies for the wireless industry.
−Removed: Our technologies and products are used in mobile devices and other wireless products, including network equipment, broadband gateway equipment, consumer electronic devices and other connected devices, including those used in the internet of things (IoT) and automotive systems for telematics and infotainment.
+Added: Our technologies and products are used in mobile devices and other wireless products, including those used in the internet of things (IoT) and automotive systems for telematics, connectivity and digital cockpit (also known as infotainment).
We derive revenues principally from sales of integrated circuit products and through the licensing of our intellectual property, including patents and other rights.
1 unchanged sentence
The consolidated financial statements include the assets, liabilities and operating results of Qualcomm and its subsidiaries.
−Removed: During the third quarter of fiscal 2018, we eliminated the one-month reporting lag that was used to consolidate RF360 Holdings Singapore Pte., Ltd.
−Removed: (since its formation in fiscal 2017) to provide contemporaneous reporting within our consolidated financial statements.
−Removed: The effect of this change was not material to the consolidated financial statements, and therefore, the impact of eliminating the one-month reporting lag was included in our results of operations for fiscal 2018.
Intercompany transactions and balances have been eliminated.
3 unchanged sentences
the estimation of sales-based royalty revenues;
−Removed: determining the appropriate accounting for the settlement agreement and new global patent license agreement with Huawei;
−Removed: the impairment of non-marketable investments;
+Added: the impairment of non-marketable equity investments;
the valuation of inventories;
5 unchanged sentences
We operate and report using a 52-53 week fiscal year ending on the last Sunday in September.
−Removed: The fiscal year ended September 27, 2020 and September 29, 2019 each included 52 weeks.
−Removed: The fiscal years ended September 30, 2018 included 53 weeks.
+Added: The fiscal years ended September 26, 2021, September 27, 2020 and September 29, 2019 each included 52 weeks.
Recently Adopted Accounting Pronouncements.
−Removed: In February 2016, the Financial Accounting Standards Board (FASB) issued new accounting guidance related to leases (ASC 842) that outlines a new comprehensive lease accounting model and requires expanded disclosures.
+Added: Financial Assets:
+Added: In June 2016, the Financial Accounting Standards Board (FASB) issued new accounting guidance that changed the accounting for recognizing impairments of financial assets (ASC 326).
+Added: Under the new accounting guidance, credit losses for financial assets held at amortized cost (such as accounts receivable) are estimated based on expected losses rather than the previous incurred loss impairment model.
+Added: The new accounting guidance also eliminated the concept of other-than-temporary impairment with credit losses related to available-for-sale debt securities recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities.
+Added: We adopted the new accounting guidance in the first quarter of fiscal 2021 under the modified retrospective transition method, except for certain available-for-sale debt securities where the prospective transition method was required, and as a result, prior period results have not been restated.
+Added: The impact upon adoption was not material to our consolidated financial statements.
+Added: The future impact of such accounting guidance will largely depend on the future composition and credit quality of our investment portfolio and accounts receivable, as well as future economic conditions.
+Added: In February 2016, the FASB issued new accounting guidance related to leases that outlines a new comprehensive lease accounting model and requires expanded disclosures (ASC 842).
Under the new accounting guidance, we are required to recognize right-of-use assets and corresponding lease liabilities on the consolidated balance sheet.
2 unchanged sentences
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.
−Removed: 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).
−Removed: 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).
−Removed: 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 consolidated statements of operations or cash flows.
+Added: Results for fiscal 2019 have not been restated and continue to be reported in accordance with the accounting guidance in effect for those periods.
Revenue Recognition:
2 unchanged sentences
We recognized the cumulative effect of initially applying the new revenue accounting guidance as an adjustment to opening retained earnings.
−Removed: Prior period results have not been restated and continue to be reported in accordance with the accounting guidance in effect for those periods (ASC 605).
Income Taxes:
3 unchanged sentences
We consider all highly liquid investments with original maturities of 90 days or less to be cash equivalents.
−Removed: Cash equivalents are comprised of money market funds, certificates of deposit, commercial paper, corporate bonds and notes, certain bank time and demand deposits and government agencies’ securities.
+Added: Cash equivalents may be comprised of money market funds, certificates of deposit, commercial paper, corporate bonds and notes, certain bank time and demand deposits and government agencies’ securities.
The carrying amounts approximate fair value due to the short maturities of these instruments.
−Removed: Marketable Securities.
−Removed: Marketable securities include marketable equity securities, available-for-sale debt securities and, from time-to-time, certain time deposits.
−Removed: We classify marketable securities as current or noncurrent based on the nature of the
QUALCOMM Incorporated
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: securities and their availability for use in current operations.
+Added: Marketable Securities.
+Added: As a result of the adoption of ASC 326, we revised our accounting policy beginning in fiscal 2021 as follows.
+Added: Marketable securities include marketable equity securities, available-for-sale debt securities and, from time-to-time, certain time deposits.
+Added: We classify marketable securities as current or noncurrent based on the nature of the securities and their availability for use in current operations.
Marketable securities are stated at fair value with all realized and unrealized gains and losses on investments in marketable equity securities and realized gains and losses on available-for-sale debt securities recognized in investment and other income, net.
−Removed: Net unrealized gains or losses on available-for-sale debt securities are recorded as a component of accumulated other comprehensive income, net of income taxes.
−Removed: The realized gains and losses on marketable securities are determined using the specific identification method.
Debt securities are classified as available for sale or held to maturity at the time of purchase and reevaluated at each balance sheet date.
−Removed: At each balance sheet date, we assess available-for-sale debt securities in an unrealized loss position to determine whether the unrealized loss is other than temporary.
−Removed: We consider factors including:
−Removed: the significance of the decline in value as compared to the cost basis;
+Added: The realized and unrealized gains and losses on marketable securities are determined using the specific identification method.
+Added: If a debt security has an unrealized loss and we either intend to sell the security or it is more likely than not that we will be required to sell the security before its anticipated recovery, we record an impairment charge to investment and other income, net for the entire amount of the unrealized loss and adjust the amortized cost basis of the security.
+Added: For the remaining debt securities, if an unrealized loss exists, we separate the impairment into the portion of the loss related to credit factors and the portion of the loss that is not related to credit factors.
+Added: Unrealized gains or unrealized losses that are not related to credit factors on available-for-sale debt securities are recorded as a component of accumulated other comprehensive income, net of income taxes.
+Added: Unrealized losses that are related to credit loss factors on available-for-sale debt securities and subsequent adjustments to the credit loss are recorded as an allowance for credit losses, which is included in investment and other income, net.
+Added: In evaluating whether a credit loss exists, we consider a variety of factors, including the significance of the decline in value as compared to the cost basis;
underlying factors contributing to a decline in the prices of securities in a single asset class;
−Removed: how long the market value of the security has been less than its cost basis;
the security’s relative performance versus its peers, sector or asset class;
3 unchanged sentences
and the outlook for the overall industry in which the investee operates.
−Removed: If a debt security’s market value is below amortized cost and we either intend to sell the security or it is more likely than not that we will be required to sell the security before its anticipated recovery, we record an other-than-temporary impairment charge to investment and other income, net for the entire amount of the impairment.
−Removed: For the remaining debt securities, if an other-than-temporary impairment exists, we separate the other-than-temporary impairment into the portion of the loss related to credit factors, or the credit loss portion, which is recorded as a charge to investment and other income, net, and the portion of the loss that is not related to credit factors, or the noncredit loss portion, which is recorded as a component of other accumulated comprehensive income, net of income taxes.
Equity Method and Non-marketable Equity Investments.
1 unchanged sentence
Our share of gains and losses in equity method investments are recorded in investment and other income, net.
−Removed: We eliminate unrealized profit or loss related to transactions with equity method investees in relation to our ownership interest in the investee, which is recorded as a component of equity in net losses in investees in investment and other income, net.
−Removed: Non-marketable equity investments (for which we do not have significant influence or control) are investments without readily determinable fair values that are recorded based on initial cost minus impairment, if any, plus or minus adjustments resulting from observable price changes in orderly transactions for identical or similar securities.
+Added: We eliminate unrealized profit or loss related to transactions with equity method investees in relation to our ownership interest in the investee, which is recorded as a component of equity in net earnings (losses) in investees in investment and other income, net.
+Added: Non-marketable equity investments (for which we do not have significant influence or control) are investments without readily determinable fair values that are recorded based on initial cost minus impairment, if any, plus or minus adjustments resulting from observable price changes in orderly transactions for identical or similar securities, if any.
All gains and losses on investments in non-marketable equity securities, realized and unrealized, are recognized in investment and other income, net.
−Removed: We monitor equity method investments and non-marketable equity securities for events or circumstances that could indicate the investments are impaired, such as a deterioration in the investee’s financial condition and business forecasts and lower valuations in recently completed or anticipated financings, and recognize a charge to investment and other income, net for the difference between the estimated fair value and the carrying value.
+Added: We monitor equity method and non-marketable equity investments for events or circumstances that could indicate the investments are impaired, such as a deterioration in the investee’s financial condition and business forecasts and lower valuations in recently completed or anticipated financings, and recognize a charge to investment and other income, net for the difference between the estimated fair value and the carrying value.
For equity method investments, we record impairment losses in earnings only when impairments are considered other-than-temporary.
1 unchanged sentence
Derivative instruments are recorded at fair value and included in other current or noncurrent assets or other current or noncurrent liabilities based on their maturity dates.
−Removed: Counterparties to our derivative instruments are all major banking institutions.
+Added: Counterparties to these derivative instruments are all major banking institutions.
Foreign Currency Hedges:
We manage our exposure to foreign exchange market risks, when deemed appropriate, through the use of derivative instruments, including foreign currency forward and option contracts with financial counterparties, that may or may not be designated as hedging instruments.
−Removed: At September 27, 2020, these derivative instruments have maturity dates of less than twelve months.
+Added: At September 26, 2021, these derivative instruments have maturity dates between one and 21 months.
Gains and losses arising from such contracts that are designated as cash flow hedging instruments are recorded as a component of accumulated other comprehensive income as gains and losses on derivative instruments, net of income taxes.
2 unchanged sentences
The fair values of our foreign currency forward and option contracts used to hedge foreign currency risk designated as cash flow hedges recorded in total assets and in total liabilities were $ 42 million and negligible, respectively, at September 26, 2021.
−Removed: The fair values of our foreign currency forward and option contracts used to hedge foreign currency risk designated as cash flow hedges recorded in total assets were negligible at September 29, 2019.
+Added: The fair values of our foreign currency forward and option contracts used to hedge foreign currency risk designated as cash flow hedges recorded in total assets and in total liabilities were $ 51 million and negligible, respectively, at September 27, 2020.
For foreign currency forward and option contracts not designated as hedging instruments, the changes in fair value are recorded in investment and other income, net in the period of change.
−Removed: The cash flows associated with derivative instruments not designated as hedging instruments are classified as cash flows from operating activities in the consolidated statements of cash flows, which is the same category as the hedged transaction.
−Removed: The fair values of our foreign currency forward and option contracts not designated as hedging instruments were negligible at September 27, 2020 and September 29, 2019.
+Added: The cash flows associated with such derivative instruments not designated as hedging instruments are classified as cash flows from operating activities in the consolidated statements of cash flows, which is the same category as the hedged transaction.
+Added: The fair values of our foreign currency
+Added: QUALCOMM Incorporated
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: forward and option contracts not designated as hedging instruments were negligible at September 26, 2021 and September 27, 2020.
Interest Rate Swaps:
1 unchanged sentence
Such swaps allow us to effectively convert fixed-rate payments into floating-rate payments based on LIBOR.
−Removed: These transactions are designated as fair value hedges, and the gains and losses related to
−Removed: QUALCOMM Incorporated
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: changes in the fair value of the interest rate swaps substantially offset changes in the fair value of the hedged portion of the underlying debt that are attributable to changes in the market interest rates.
+Added: These transactions are designated as fair value hedges, and the gains and losses related to changes in the fair value of the interest rate swaps substantially offset changes in the fair value of the hedged portion of the underlying debt that are attributable to changes in the market interest rates.
The net gains and losses on the interest rate swaps, as well as the offsetting gains or losses on the related fixed-rate debt attributable to the hedged risks, are recognized in earnings as interest expense in the current period.
The interest settlement payments associated with the interest rate swap agreements are classified as cash flows from operating activities in the consolidated statements of cash flows.
−Removed: During fiscal 2020, our remaining interest rate swaps related to certain of our May 2015 Notes were terminated.
−Removed: The aggregate fair value of our interest rate swaps related to long-term debt was negligible at September 29, 2019.
+Added: There were no outstanding interest rate swaps related to long-term debt at September 26, 2021 and September 27, 2020.
+Added: During fiscal 2021, we entered into forward-starting interest rate swaps to hedge the variability of forecasted interest payments on anticipated debt issuances through 2025.
+Added: These transactions are designated as cash flow hedges of a forecasted transaction.
+Added: The gains and losses arising from such contracts are recorded as a component in accumulated other comprehensive income as gains and losses on derivative instruments, net of taxes.
+Added: When the anticipated debt issuances are completed, the hedging gains and losses in accumulated other comprehensive income are reclassified as interest expense over the terms of the related debt issued.
+Added: The fair values of our forward-starting interest rate swaps recorded in total liabilities were $ 105 million at September 26, 2021.
Gross Notional Amounts:
11 unchanged sentences
Indian rupee 1,262 595
+Added: British pound sterling 83 —
Japanese yen 27 33
2 unchanged sentences
Other Hedging Activities.
−Removed: We have designated $ 1.4 billion of foreign currency-denominated liabilities, excluding accrued interest, related to the fines imposed by the European Commission (Note 7) as hedges of our net investment in certain foreign subsidiaries as of September 27, 2020 and September 29, 2019.
−Removed: Gains and losses arising from the portion of these balances that are designated as net investment hedges are recorded in accumulated other comprehensive income as a component of the foreign currency translation adjustment.
+Added: We have designated $ 1.5 billion of foreign currency-denominated liabilities, excluding accrued interest, related to the fines imposed by the European Commission as hedges of our net investment in certain foreign subsidiaries at September 26, 2021 and September 27, 2020.
+Added: Gains and losses arising from the portion of these balances that are designated as net investment hedges are recorded as a component of accumulated other comprehensive income as foreign currency translation adjustment.
Fair Value Measurements.
7 unchanged sentences
• Level 3 includes financial instruments for which fair value is derived from valuation techniques in which one or more significant inputs are unobservable, including our own assumptions.
+Added: QUALCOMM Incorporated
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Assets and liabilities measured at fair value are classified based on the lowest level of input that is significant to the fair value measurement.
4 unchanged sentences
With the exception of auction rate securities, we obtain pricing information from quoted market prices, pricing vendors or quotes from brokers/dealers.
−Removed: We conduct reviews of our primary pricing
−Removed: QUALCOMM Incorporated
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: vendors to determine whether the inputs used in the vendor’s pricing processes are deemed to be observable.
+Added: We conduct reviews of our primary pricing vendors to determine whether the inputs used in the vendor’s pricing processes are deemed to be observable.
The fair value for interest-bearing securities includes accrued interest.
3 unchanged sentences
The fair value of auction rate securities is estimated using a discounted cash flow model that incorporates transaction details, such as contractual terms, maturity and timing and amount of future cash flows, as well as assumptions related to liquidity, default likelihood and recovery, the future state of the auction rate market and credit valuation adjustments of market participants.
−Removed: Though most of the securities we hold are pools of student loans guaranteed by the United States government, prepayment speeds and illiquidity discounts are considered significant unobservable inputs, and therefore, auction rate securities are included in Level 3.
+Added: Though most of the securities we held were pools of student loans guaranteed by the United States government, prepayment speeds and illiquidity discounts are considered significant unobservable inputs, and therefore, auction rate securities were included in Level 3.
+Added: During fiscal 2021, we sold all of our investments held in auction rate securities.
Derivative Instruments:
2 unchanged sentences
Other Investments and Other Liabilities:
−Removed: Other investments and other liabilities included in Level 1 are comprised of our deferred compensation plan liabilities and related assets, which consist of mutual funds and are included in other assets.
−Removed: Gains and losses on the revaluation of our deferred compensation plan assets are recorded in investment and other income, net (Note 2) and are not allocated to our segments.
−Removed: Corresponding offsetting amounts related to the revaluation of our deferred compensation plan liabilities are included in unallocated operating expenses (Note 8).
−Removed: Other investments and other liabilities included in Level 3 are primarily comprised of convertible debt instruments issued by private companies.
−Removed: The fair value of convertible debt instruments is estimated based on the estimated timing and amount of future cash flows, as well as assumptions related to liquidity, default likelihood and recovery.
−Removed: The inputs we use to estimate the fair values of the convertible debt instruments are generally unobservable, and therefore, they are included in Level 3.
+Added: Other investments and other liabilities included in Level 1 are comprised of our deferred compensation plan liabilities and related assets, which consist of mutual funds and are included in other current assets and other assets.
+Added: Gains and losses on the revaluation of our deferred compensation plan assets are recorded in investment and other income, net and are not allocated to our segments.
+Added: Corresponding offsetting amounts related to the revaluation of our deferred compensation plan liabilities are included in unallocated operating expenses.
+Added: Other investments included in Level 3 are comprised of contingently issuable equity instruments and warrants issued in connection with certain mergers and initial public offerings of our non-marketable equity investees and convertible debt instruments issued by private companies.
+Added: The inputs we use to estimate the fair values of these instruments are generally unobservable, and therefore, they are included in Level 3.
+Added: Nonrecurring Fair Value Measurements:
+Added: We measure certain assets and liabilities at fair value on a nonrecurring basis.
+Added: 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, all of which are generally measured based on unobservable inputs using an income or market approach.
Inventories are valued at the lower of cost and net realizable value using the first-in, first-out method.
Recoverability of inventories is assessed based on review of future customer demand that considers multiple factors, including committed purchase orders from customers as well as purchase commitment projections provided by customers and our own forecasts of customer demand, among other factors.
−Removed: This valuation also requires us to make judgments and assumptions based on information currently available about market conditions, including competition, product pricing, product life cycle, development plans and other broader market conditions that may impact customer demand, such as the coronavirus (COVID-19) pandemic in fiscal 2020 that negatively impacted consumer demand for certain devices that incorporate our products.
+Added: This valuation also requires us to make judgments and assumptions based on information currently available about market conditions, including competition, product pricing, product life cycle, development plans and other broader market conditions that may impact customer demand, such as the impact of certain c apacity constraints experienced across the semiconductor industry in fiscal 2021 and the impacts of COVID-19 in fiscal 2020.
As we move to smaller geometry process technologies, the manufacturing lead-time increases, resulting in an increased reliance on our own forecasts of customer demand, rather than our customers’ forecasts.
−Removed: If we overestimate demand for our products, the amount of our loss will be impacted by our contractual ability to reduce inventory purchases from our suppliers.
+Added: If we overestimate demand for our products, the amount of our loss will be impacted by our contractual ability to reduce inventory purchases from our suppliers, including those under our multi-year capacity purchase commitments.
Our assumptions of future product demand are inherently uncertain, and changes in our estimates and assumptions may cause us to record additional write-downs in the future if demand forecasted for specific products is greater than actual demand.
4 unchanged sentences
Leasehold improvements and buildings on leased land are amortized over the shorter of their estimated useful lives, not to exceed 15 years and 30 years, respectively, or the remaining term of the related lease.
−Removed: Other property, plant and equipment have useful lives ranging from 2 to 25 years.
+Added: Other property, plant and equipment
+Added: QUALCOMM Incorporated
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: have useful lives ranging from 2 to 25 years.
Maintenance, repairs and minor renewals or betterments are charged to expense as incurred.
Operating Leases.
−Removed: As a result of the adoption of ASC 842, we revised our operating 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.
6 unchanged sentences
Acquired intangible assets other than goodwill are amortized over their useful lives unless the lives are determined to be indefinite.
−Removed: For intangible assets purchased in a business
−Removed: QUALCOMM Incorporated
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: combination, the estimated fair values of the assets received are used to establish their recorded values.
+Added: For intangible assets purchased in a business combination, the estimated fair values of the assets received are used to establish their recorded values.
For intangible assets acquired in a nonmonetary exchange, the estimated fair values of the assets transferred (or the estimated fair values of the assets received, if more clearly evident) are used to establish their recorded values, unless the values of neither the assets received nor the assets transferred are determinable within reasonable limits, in which case the assets received are measured based on the carrying values of the assets transferred.
28 unchanged sentences
Sales-based royalties are generally based upon a percentage of the wholesale (i.e., licensee’s) selling price of complete licensed products, net of certain permissible deductions (including transportation, insurance, packing costs and other items).
−Removed: We broadly provide per unit royalty caps that apply to certain categories of complete wireless devices, namely smartphones, tablets, laptops and smartwatches, and provide for a maximum royalty amount payable per device.
+Added: We broadly provide per unit royalty caps that apply to certain
+Added: QUALCOMM Incorporated
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: categories of complete wireless devices, namely smartphones, tablets, laptops and smartwatches, and provide for a maximum royalty amount payable per device.
We estimate and recognize sales-based royalties on such licensed products in the period in which the associated sales occur, considering all relevant information (historical, current and forecasted) that is reasonably available to us.
2 unchanged sentences
We also consider in our estimates of sales-based royalties any changes in pricing we plan or expect to make and certain constraints on our ability to estimate such royalties.
−Removed: QUALCOMM Incorporated
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: of recognizing revenues in the period in which the licensees’ sales occur using estimates, adjustments to revenues are required in subsequent periods to reflect changes in estimates as new information becomes available, primarily resulting from actual amounts reported by our licensees.
+Added: As a result of recognizing revenues in the period in which the licensees’ sales occur using estimates, adjustments to revenues are required in subsequent periods to reflect changes in estimates as new information becomes available, primarily resulting from actual amounts reported by our licensees.
License agreements that require payment of license fees contain a single performance obligation that represents ongoing access to a portfolio of intellectual property over the license term since such agreements provide the licensee the right to access a portfolio of intellectual property that exists at inception of the license agreement and to updates and new intellectual property that is added to the licensed portfolio during the term of the agreement that are highly interdependent or interrelated.
15 unchanged sentences
We record reductions to revenues for customer incentive arrangements, including volume-related and other pricing rebates and cost reimbursements for marketing and other activities involving certain of our products and technologies, in the period that the related revenues are earned.
−Removed: The charges for such arrangements are recorded as a reduction to accounts receivable, net or as other current liabilities based on whether we have the intent and contractual right of offset.
−Removed: Certain of these charges are considered variable consideration and are included in the transaction price primarily based on estimating the most likely amount expected to be provided to the customer/licensee.
+Added: For certain QCT (Qualcomm CDMA Technologies) customer incentive arrangements, there is complexity in applying certain contractual terms to determine the amount recorded as a reduction to revenues.
+Added: No significant reversals of revenues have been made related to such amounts previously recorded.
+Added: The amounts accrued for customer incentive arrangements are recorded as a reduction to accounts receivable, net or as other current liabilities based on whether we have the intent and contractual right of offset.
+Added: Certain amounts recorded as a reduction to revenues for customer incentive arrangements are considered variable
+Added: QUALCOMM Incorporated
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: consideration and are included in the transaction price primarily based on estimating the most likely amount expected to be provided to the customer/licensee.
+Added: Adjustments made to revenues in subsequent periods to reflect changes in estimates as new information becomes available are included in our disclosure of revenues recognized from previously satisfied performance obligations.
Revenues recognized from sales of our products and sales-based royalties are generally included in accounts receivable, net (including unbilled receivables) based on our unconditional right to payment for satisfied or partially satisfied performance obligations.
Concentrations.
−Removed: A significant portion of our revenues are concentrated with a small number of customers/licensees of our QCT and QTL segments.
−Removed: Revenues from four customers/licensees comprised 19 %, 12 %, 10 % and 10 % of total consolidated revenues in fiscal 2020.
−Removed: Revenues from three customers/licensees comprised 15 %, 10 % and 24 % of total consolidated revenues in fiscal 2019 and 16 %, 11 % and 11 % in fiscal 2018.
−Removed: Revenues in fiscal 2020 were positively impacted by the settlement of our prior dispute with Huawei (Note 8).
−Removed: Revenues in fiscal 2018 were negatively impacted by our prior dispute with Apple and its contract manufacturers.
+Added: A significant portion of our revenues are concentrated with a small number of customers/licensees of our QCT (Qualcomm CDMA Technologies) and QTL (Qualcomm Technology Licensing) segments.
+Added: The comparability of customer/licensee concentrations for the periods presented are impacted by the timing of customer/licensees device launches and/or innovation cycles, among other fluctuations in demand.
+Added: Revenues from each customer/licensee that were 10% or greater of total revenues were as follows:
+Added: September 26,
+Added: 2021 September 27,
+Added: 2020 September 29,
+Added: Customer/licensee (w) 23 % 10 % 24 %
+Added: Customer/licensee (x) 14 19 15
+Added: Customer/licensee (y) 13 12 10
+Added: Customer/licensee (z) * 10 *
+Added: * Less than 10%
We rely on sole- or limited-source suppliers for some products, particularly products in the QCT segment, subjecting us to possible shortages of raw materials or manufacturing capacity.
The loss of a supplier or the inability of a supplier to meet performance or quality specifications or delivery schedules could harm our ability to meet our delivery obligations and/or negatively impact our revenues, business operations and ability to compete for future business.
−Removed: Shipping and Handling Costs.
−Removed: Costs incurred for shipping and handling are included in cost of revenues.
−Removed: Amounts billed to a customer for shipping and handling are reported as revenues.
Share-Based Compensation.
Share-based compensation expense for equity-classified awards, principally related to restricted stock units (RSUs), is measured at the grant date, or at the acquisition date for awards assumed in business combinations, based on the estimated fair value of the award and is recognized over the employee’s requisite service period.
−Removed: QUALCOMM Incorporated
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The fair values of RSUs are estimated based on the fair market values of the underlying stock on the dates of grant or dates the RSUs are assumed.
22 unchanged sentences
Resulting translation gains or losses are recorded as a component of accumulated other comprehensive income.
−Removed: Transaction gains or losses related to balances denominated in a currency other than the functional currency are recognized in the consolidated statements of operations.
+Added: Transaction gains or losses related
+Added: QUALCOMM Incorporated
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: to balances denominated in a currency other than the functional currency are recognized in the consolidated statements of operations.
Income Taxes.
16 unchanged sentences
Significant judgments and estimates are required in determining our provision for income taxes, including those related to special deductions such as FDII (foreign-derived intangible income), tax incentives, intercompany research and development cost-sharing arrangements, transfer pricing, tax credits and the realizability of deferred tax assets.
−Removed: While we believe we have appropriate support for the positions we have taken or that we plan to take on our tax returns, we regularly assess the potential outcomes of examinations by taxing
−Removed: QUALCOMM Incorporated
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: authorities in determining the adequacy of our provision for income taxes.
+Added: While we believe we have appropriate support for the positions we have taken or that we plan to take on our tax returns, we regularly assess the potential outcomes of examinations by taxing authorities in determining the adequacy of our provision for income taxes.
Therefore, the actual liability for U.S.
or foreign taxes may be materially different from our estimates, which could result in the need to record additional tax liabilities or potentially reverse previously recorded tax liabilities.
−Removed: We are participating in the Internal Revenue Service (IRS) Compliance Assurance Process program whereby we endeavor to agree with the IRS on the treatment of all issues prior to filing our federal return.
+Added: We are participating in the IRS Compliance Assurance Process program whereby we endeavor to agree with the IRS on the treatment of all issues prior to filing our federal return.
A benefit of participation in this program is that post-filing adjustments by the IRS are less likely to occur.
−Removed: Earnings (Loss) Per Common Share.
−Removed: Basic earnings (loss) per common share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the reporting period.
−Removed: Diluted earnings per common 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.
−Removed: Due to the net loss in fiscal 2018, all of the common share equivalents issuable under share-based compensation plans and the accelerated share repurchase agreements we entered into in fiscal 2018 had an anti-dilutive effect and were therefore excluded from the computation of diluted loss per share.
+Added: Stock Repurchases.
+Added: 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 .
+Added: Earnings (Loss) Per Share.
+Added: Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the reporting period.
+Added: 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 programs, 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):
2 unchanged sentences
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 — 1 8
−Removed: Recent Accounting Pronouncements Not Yet Adopted.
−Removed: Financial Assets:
−Removed: In June 2016, the FASB issued new accounting guidance that changes the accounting for recognizing impairments of financial assets.
−Removed: 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.
−Removed: Our historical credit losses for accounts receivable have been immaterial.
−Removed: The new accounting guidance also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities.
−Removed: These changes will result in earlier recognition of credit losses, if any.
−Removed: 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.
−Removed: We will adopt the new accounting guidance in the first quarter of fiscal 2021.
−Removed: We do not expect this new accounting guidance will have a material impact to our consolidated financial statements at adoption.
−Removed: The future impact of such accounting guidance will largely depend on the future composition and credit quality of our investment portfolio and accounts receivable, as well as future economic conditions.
+Added: QUALCOMM Incorporated
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Composition of Certain Financial Statement Items
5 unchanged sentences
$ 3,579 $ 4,003
−Removed: Accounts receivable at September 27, 2020 included $ 1.3 billion, excluding the impact of foreign withholding taxes, from Huawei related to the remaining amounts due under the settlement agreement and estimated royalties for sales made in the September 2020 quarter.
In July 2020, we entered into a settlement agreement with Huawei to resolve our prior dispute related to the license agreement that expired on December 31, 2019.
We also entered into a new long-term, global patent license agreement that applies to sales of certain wireless products by Huawei beginning on January 1, 2020.
−Removed: Amounts due under the settlement agreement are to be paid in installments by the end of June 2021 in accordance with an agreed upon payment schedule.
−Removed: In the fourth quarter of fiscal 2020, Huawei paid the first installment under the settlement agreement and the royalties due for the March 2020 and June 2020 quarters under the new global patent license agreement.
−Removed: Significant evaluation and judgment were required in determining the appropriate accounting for the settlement agreement and new global patent license agreement with Huawei.
−Removed: We considered, among other items, Huawei’s commitment to perform under such agreements (including Huawei’s intent and ability to pay amounts due), Huawei’s performance to date under the agreements (including timely payments made), Huawei’s current and projected financial condition (including the
−Removed: QUALCOMM Incorporated
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: impact of enacted national security protection policies by the U.S.
−Removed: government on Huawei’s business) and certain contractual protections that we obtained under these agreements.
−Removed: Based on this evaluation, we concluded that the revenue recognition criteria were met, and we recorded revenues of $ 1.8 billion in the fourth quarter of fiscal 2020 related to the full amount due from Huawei under the settlement agreement and amounts paid for the March 2020 and June 2020 quarters under the new global patent license agreement.
−Removed: In addition, QTL results for the fourth quarter of fiscal 2020 included estimated royalties due from Huawei for sales made in the September 2020 quarter under the new global patent license agreement.
−Removed: Although we believe that the judgments supporting our assessment are reasonable based on facts and factors currently known, our judgments, including those discussed in the preceding paragraph, as it relates to future events are inherently uncertain and actual results and outcomes may differ from the results and outcomes currently anticipated.
+Added: As a result, we recorded revenues of $ 1.8 billion in the fourth quarter of fiscal 2020 related to the full amount due from Huawei under the settlement agreement and amounts paid for the March 2020 and June 2020 quarters under the new global patent license agreement.
+Added: Accounts receivable at September 27, 2020 included approximately $ 1.3 billion, excluding the impact of foreign withholding taxes, from Huawei related to the remaining amounts due under the settlement agreement and estimated royalties for sales made in the September 2020 quarter.
+Added: Since September 27, 2020, Huawei paid all such amounts, including the final installment under the settlement agreement in accordance with the agreed upon payment schedule.
Inventories (in millions)
17 unchanged sentences
$ 4,559 $ 3,711
−Removed: Depreciation and amortization expense related to property, plant and equipment for fiscal 2020, 2019 and 2018 was $ 772 million, $ 674 million and $ 776 million, respectively.
+Added: Depreciation and amortization expense related to property, plant and equipment for fiscal 2021, 2020 and 2019 was $ 1.0 billion, $ 772 million and $ 674 million, respectively.
+Added: QUALCOMM Incorporated
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Goodwill and Other Intangible Assets.
3 unchanged sentences
Balance at September 29, 2019 $ 5,565 $ 717 $ — $ 6,282
−Removed: Acquisitions 18 — — 18
−Removed: Impairments (Note 9) — — ( 146 ) ( 146 )
−Removed: Other (1) ( 40 ) ( 1 ) ( 47 ) ( 88 )
+Added: Foreign currency translation adjustments 40 1 — 41
Balance at September 27, 2020 (1) 5,605 718 — 6,323
−Removed: Other (1) 40 1 — 41
+Added: Acquisitions 912 5 — 917
+Added: Foreign currency translation adjustments 6 — — 6
Balance at September 26, 2021 (1) $ 6,523 $ 723 $ — $ 7,246
−Removed: (1) In fiscal 2020, changes in goodwill resulted from certain foreign currency translation adjustments.
−Removed: In fiscal 2019, changes in goodwill amounts resulted from the sale of our mobile health nonreportable segment, foreign currency translation and purchase accounting adjustments.
−Removed: QUALCOMM Incorporated
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) Cumulative goodwill impairments were $ 812 million at both September 26, 2021 and September 27, 2020.
10 unchanged sentences
$ 5,478 $ ( 4,020 ) 11 $ 5,661 $ ( 4,008 ) 11
−Removed: All of these intangible assets are subject to amortization and the amortization expense related to these intangible assets was $ 621 million, $ 727 million and $ 785 million for fiscal 2020, 2019 and 2018, respectively.
−Removed: Amortization expense related to these intangible assets is expected to be $ 519 million, $ 422 million, $ 295 million, $ 136 million and $ 111 million for each of the five years from fiscal 2021 through 2025, respectively, and $ 170 million thereafter.
−Removed: At September 27, 2020 and September 29, 2019, all acquired in-process research and development projects were completed and are being amortized over their useful lives.
+Added: All of these intangible assets are subject to amortization, other than acquired in-process research and development which had a carrying value of $ 247 million at September 26, 2021.
+Added: At September 27, 2020, there was no in-process research and development.
+Added: Amortization expense related to these intangible assets was $ 537 million, $ 621 million and $ 727 million for fiscal 2021, 2020 and 2019, respectively.
+Added: Amortization expense related to these intangible assets and acquired in-process research and development, beginning upon the completion of the underlying projects, is expected to be $ 449 million, $ 340 million, $ 186 million, $ 153 million and $ 132 million for each of the five years from fiscal 2022 through 2026, respectively, and $ 198 million thereafter.
Equity Method and Non-marketable Equity Investments.
−Removed: The carrying values of our equity method and non-marketable equity investments are recorded in other noncurrent assets and were as follows (in millions):
+Added: The carrying values of our equity method and non-marketable equity investments are recorded in other assets and were as follows (in millions):
September 26,
3 unchanged sentences
$ 1,265 $ 982
−Removed: Beginning in the second quarter of fiscal 2020, the rapid, global spread of COVID-19 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.
−Removed: Since the second quarter of fiscal 2020, significant evaluation and judgments were required in determining if the negative effects of COVID-19 indicated that such investments were impaired, and if so, the extent of such impairment.
−Removed: This included, among other items:
−Removed: (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.
−Removed: Based on this evaluation, certain of our investments were impaired and written down to their estimated fair values in fiscal 2020 (a significant portion of which related to the full impairment of our investment in OneWeb, who filed for bankruptcy in the second quarter of fiscal 2020).
−Removed: Although we believe that our judgments supporting our impairment assessments are reasonable (which rely 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.
−Removed: As circumstances change and/or new information becomes available, we may be required to record additional impairments in subsequent periods.
−Removed: Revenues from certain services contracts with OneWeb were $ 36 million, $ 152 million and $ 100 million in fiscal 2020, 2019 and 2018, respectively.
−Removed: During fiscal 2019, non-marketable debt and equity securities (non-cash consideration) with an aggregate estimated fair value of $ 98 million were received related to a development contract with OneWeb that was recognized as revenues in fiscal 2019.
−Removed: In addition, during fiscal 2019, non-marketable equity securities (non-cash consideration) with an estimated fair value of $ 53 million were received in connection with the sale of certain assets as part of the Cost Plan that concluded in fiscal 2019.
−Removed: QUALCOMM Incorporated
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Other Current Liabilities (in millions)
6 unchanged sentences
$ 5,014 $ 4,303
−Removed: Accumulated Other Comprehensive Income.
−Removed: Changes in the components of accumulated other comprehensive income, net of income taxes, in stockholders’ equity during fiscal 2020 were as follows (in millions):
−Removed: Foreign Currency Translation Adjustment Noncredit Other-than-Temporary Impairment Losses and Subsequent Changes in Fair Value for Certain Available-for-Sale Debt Securities Net Unrealized Gains (Losses) on Other Available-for-Sale Debt Securities Net Unrealized Gain (Loss) on Derivative Instruments Other Gains (Losses) Total Accumulated Other Comprehensive Income
−Removed: Balance at September 29, 2019 $ ( 99 ) $ 23 $ 186 $ 8 $ ( 18 ) $ 100
−Removed: Other comprehensive income before reclassifications 60 — 22 29 7 118
−Removed: Reclassifications from accumulated other comprehensive income 7 — ( 2 ) ( 16 ) — ( 11 )
−Removed: Other comprehensive income 67 — 20 13 7 107
−Removed: Balance at September 27, 2020 $ ( 32 ) $ 23 $ 206 $ 21 $ ( 11 ) $ 207
−Removed: Reclassifications from accumulated other comprehensive income related to derivative instruments were $ 16 million during fiscal 2020 and negligible for all other periods presented, and were recorded in revenues, cost of revenues, research and development expenses and selling, general and administrative expenses.
−Removed: Reclassifications from accumulated other comprehensive income in fiscal 2019 included adjustments of $ 51 million to the opening retained earnings balance as a result of the adoption of new accounting guidance in 2019 related to financial instruments and hedge instruments.
−Removed: Other reclassifications from accumulated other comprehensive income related to available-for-sale securities and foreign currency translation adjustments were negligible for all periods presented.
−Removed: We disaggregate our revenues by segment (Note 8), by type of product and services (as presented on our consolidated statement of operations) and, for our QCT segment by revenue stream, which is based on industry segment or application in which our products are sold (as presented below).
−Removed: In certain cases, the determination of QCT revenues by industry segment or application requires the use of certain assumptions.
+Added: QUALCOMM Incorporated
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: We disaggregate our revenues by segment (Note 8), by product and service (as presented on our consolidated statements of operations) and for our QCT segment by revenue stream, which is based on the industry and application in which our products are sold (as presented below).
+Added: In certain cases, the determination of QCT revenues by industry and application requires the use of certain assumptions.
Substantially all of QCT’s revenues consist of equipment revenues that are recognized at a point in time, and substantially all of QTL’s revenues represent licensing revenues that are recognized over time and are principally from royalties generated through our licensees’ sales of mobile handsets.
QCT revenue streams were as follows (in millions):
+Added: 2021 2020 2019
Handsets (1) $ 16,830 $ 10,461 $ 9,793
1 unchanged sentence
Automotive (3) 975 644 640
−Removed: IoT (2) 3,026 2,728
+Added: IoT (internet of things) (4) 5,056 3,026 2,728
Total QCT revenues $ 27,019 $ 16,493 $ 14,639
−Removed: (1) Includes all revenues from sales of RFFE integrated circuit products (substantially all of which are used in handsets).
−Removed: (2) Internet of Things (IoT) revenues primarily include products sold for use in cellular and non-cellular connected devices within the following industry segments or applications:
−Removed: consumer, computing, industrial, fixed wireless broadband, voice and music and wireless networking.
−Removed: QUALCOMM Incorporated
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: Revenues recognized from performance obligations satisfied (or partially satisfied) in previous periods were $ 1.5 billion for fiscal 2020, and primarily related to licensing revenues recognized in the fourth quarter of fiscal 2020 (a portion of which was attributable to fiscal 2020) resulting from the settlement with Huawei, and to a lesser extent, QTL royalty revenues recognized related to devices sold in prior periods (including adjustments to prior period royalty estimates, in part based on actual reporting of royalties by our licensees) and certain QCT customer incentives.
−Removed: Revenues recognized from performance obligations satisfied (or partially satisfied) in previous periods were $ 4.1 billion for fiscal 2019 and primarily related to licensing revenues recognized in the third quarter of fiscal 2019 (a portion of which was attributable to fiscal 2019) resulting from the settlement with Apple and its contract manufacturers in April 2019.
+Added: (1) Includes revenues from products sold for use in mobile handsets, excluding RFFE (radio frequency front-end) components.
+Added: (2) Includes all revenues from sales of 4G, 5G sub-6 and 5G millimeter wave RFFE products (a substantial portion of which are sold for use in mobile handsets) and excludes radio frequency transceiver components.
+Added: (3) Includes revenues from products sold for use in automobiles, including telematics, connectivity and digital cockpit.
+Added: (4) Primarily includes products sold for use in the following industries and applications:
+Added: consumer (including computing, voice and music and XR), industrial (including handhelds, retail, transportation and logistics and utilities) and edge networking (including mobile broadband and wireless access points).
+Added: Revenue recognized from performance obligations satisfied (or partially satisfied) in previous periods were as follows (in millions):
+Added: 2021 (1) 2020 (2) 2019 (3)
+Added: Revenues recognized from previously satisfied performance obligations
+Added: $ 283 $ 1,480 $ 4,080
+Added: (1) Primarily related to certain QCT customer incentives, QTL revenues recognized related to devices sold in prior periods (including adjustments to prior period royalty estimates, which includes the impact of the reporting by our licensees of actual royalty due) and the release of a variable constraint against revenues not previously allocated to our segment results (Note 8).
+Added: (2) Primarily related to licensing revenues recognized in the fourth quarter of fiscal 2020 (a portion of which was attributable to fiscal 2020) resulting from the settlement with Huawei and, to a lesser extent, QTL royalties recognized related to devices sold in prior periods (including adjustments to prior period royalty estimates, which includes the impact of the reporting by our licensees of actual royalties due) and certain QCT customer incentives.
+Added: (3) Primarily related to licensing revenues recognized in the third quarter of fiscal 2019 (a portion of which was attributable to fiscal 2019) resulting from the settlement with Apple and its contract manufacturers in April 2019.
Unearned revenues (which are considered contract liabilities) consist primarily of license fees for intellectual property with continuing performance obligations.
−Removed: In fiscal 2020 and fiscal 2019, we recognized revenues of $ 540 million and $ 481 million, respectively, that were recorded as unearned revenues at September 29, 2019 and October 1, 2018, respectively.
+Added: In fiscal 2021 and fiscal 2020, we recognized revenues of $ 557 million and $ 540 million, respectively, that were recorded as unearned revenues at September 27, 2020 and September 29, 2019, 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.
−Removed: At September 27, 2020, we had $ 1.4 billion of remaining performance obligations, of which $ 581 million, $ 493 million, $ 234 million, $ 64 million and $ 26 million is expected to be recognized as revenues for each of the subsequent five years from fiscal 2021 through 2025, respectively, with no amounts expected thereafter.
+Added: At September 26, 2021, we had $ 1.1 billion of remaining performance obligations, of which $ 653 million, $ 308 million, $ 84 million, $ 31 million and $ 2 million is expected to be recognized as revenues for each of the subsequent five years from fiscal 2022 through 2026, respectively, and no amounts expected thereafter.
Share-based Compensation Expense.
7 unchanged sentences
$ 1,235 $ 974 $ 853
−Removed: Other Income, Costs and Expenses.
−Removed: Other expenses in fiscal 2020 consisted of $ 28 million in gains related to a favorable legal settlement.
−Removed: Other expenses in fiscal 2019 consisted of a $ 275 million charge related to a fine imposed by the European Commission (EC) related to the Icera complaint (2019 EC fine) (Note 7) and $ 213 million in net charges related to our Cost Plan that concluded in fiscal 2019, partially offset by a $ 43 million gain due to the partial recovery of a fine imposed in 2009 resulting from our appeal of the Korea Fair Trade Commission (KFTC) decision and a $ 31 million gain related to a favorable legal settlement.
−Removed: Other expenses in fiscal 2018 consisted of a $ 2.0 billion charge related to a fee paid in connection with the termination of our purchase agreement to acquire NXP Semiconductors N.V., a $ 1.2 billion charge for the fine imposed by the EC related to an investigation (2018 EC fine) (Note 7) and $ 629 million in restructuring and restructuring-related charges related to our Cost Plan, partially offset by a $ 676 million benefit related to the settlement of the Taiwan Fair Trade Commission (TFTC) investigation.
−Removed: Total restructuring and restructuring-related charges related to the Cost Plan were as follows (in millions):
−Removed: 2019 2018 (1) Total
−Removed: Restructuring-related charges (2) $ 151 $ 334 $ 485
−Removed: Restructuring charges (3) 62 353 415
−Removed: $ 213 $ 687 $ 900
−Removed: (1) During fiscal 2018, we recorded restructuring and restructuring-related charges of $ 629 million in other expenses and charges of $ 58 million in investment and other income, net.
−Removed: (2) Restructuring-related charges primarily related to asset impairment charges in fiscal 2019 and 2018 and also included a $ 52 million net gain in fiscal 2019 from the sale of certain assets related to wireless electric vehicle charging applications and the sale of our mobile health nonreportable segment, as well as a $ 41 million gain in fiscal 2018 resulting from fair value adjustments of certain contingent consideration related to a business combination.
−Removed: (3) Restructuring charges primarily consisted of severance and consulting costs in fiscal 2019 and 2018, which were payable in cash .
QUALCOMM Incorporated
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: Other Income, Costs and Expenses.
+Added: Other expenses in fiscal 2020 consisted of $ 28 million in gains related to a favorable legal settlement.
+Added: Other expenses in fiscal 2019 consisted of a $ 275 million charge related to a fine imposed by the European Commission (EC) related to the Icera complaint (2019 EC fine) (Note 7) and $ 213 million in net charges related to our Cost Plan that concluded in fiscal 2019 (primarily related to certain asset impairment charges and also included a $ 52 million net gain from the sale of certain assets related to wireless electric vehicle charging applications and the sale of our mobile health nonreportable segment), partially offset by a $ 43 million gain due to the partial recovery of a fine imposed in 2009 resulting from our appeal of the Korea Fair Trade Commission (KFTC) decision and a $ 31 million gain related to a favorable legal settlement.
Investment and Other Income, Net (in millions)
5 unchanged sentences
Impairment losses on other investments ( 33 ) ( 405 ) ( 135 )
−Removed: Net gains (losses) on derivative instruments 8 ( 14 ) ( 27 )
−Removed: Equity in net losses of investees ( 21 ) ( 93 ) ( 145 )
+Added: Net (losses) gains on derivative instruments ( 14 ) 8 ( 14 )
+Added: Equity in net earnings (losses) of investees 13 ( 21 ) ( 93 )
Net (losses) gains on foreign currency transactions ( 32 ) ( 25 ) 11
$ 1,044 $ 66 $ 441
+Added: I n fiscal 2020, the rapid, global spread of COVID-19 and associated containment and mitigation measures negatively impacted the condition of economies and financial markets globally, which 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.
+Added: As a result, certain of our investments were impaired and written down to their estimated fair values in fiscal 2020 (a significant portion of which related to the full impairment of our investment in OneWeb, who filed for bankruptcy in the second quarter of fiscal 2020).
The components of the income tax provision were as follows (in millions):
2 unchanged sentences
Federal $ 942 $ 210 $ 1,563
−Removed: State 1 2 ( 1 )
Foreign 518 526 ( 407 )
1,468 737 1,158
−Removed: Deferred provision (benefit):
+Added: Deferred (benefit) provision:
Federal ( 251 ) ( 192 ) 2,037
2 unchanged sentences
$ 1,231 $ 521 $ 3,095
−Removed: The foreign component of the income tax provision (benefit) included foreign withholding taxes on royalty revenues included in U.S.
+Added: The foreign component of the income tax provision included foreign withholding taxes on royalty revenues included in U.S.
The components of income before income taxes by U.S.
4 unchanged sentences
$ 10,274 $ 5,719 $ 7,481
−Removed: In fiscal 2018, the foreign component of income before income taxes in foreign jurisdictions primarily consisted of income earned in Singapore.
QUALCOMM Incorporated
1 unchanged sentence
The following is a reconciliation of the expected statutory federal income tax provision to our actual income tax provision (in millions, except percentages).
+Added: Substantially all of our income is in the U.S., of which a significant portion qualifies for preferential treatment as FDII at a 13 % effective tax rate.
2021 2020 2019
Expected income tax provision at federal statutory tax rate $ 2,158 $ 1,201 $ 1,571
−Removed: State income tax provision, net of federal benefit 7 10 2
−Removed: Benefit from foreign-derived intangible income (FDII) deduction ( 381 ) ( 419 ) —
−Removed: Benefit related to research and development tax credits ( 125 ) ( 110 ) ( 136 )
+Added: Benefit from FDII deduction ( 550 ) ( 381 ) ( 419 )
Excess tax benefit associated with share-based awards ( 265 ) ( 83 ) ( 27 )
−Removed: Benefit from foreign income taxed at other than U.S.
−Removed: rates ( 11 ) ( 54 ) ( 834 )
+Added: Benefit related to research and development tax credits ( 195 ) ( 125 ) ( 110 )
Derecognition of deferred tax asset on distributed intellectual property — — 2,472
1 unchanged sentence
net deferred tax assets — — ( 570 )
−Removed: Nondeductible charges (reversals) related to the EC, KFTC and TFTC investigations — 51 ( 119 )
−Removed: Toll Charge from U.S.
−Removed: tax reform — — 5,236
−Removed: Valuation allowance on deferred tax assets related to the NXP termination fee — — 494
−Removed: Remeasurement of deferred taxes due to changes in the statutory rate due to U.S.
−Removed: tax reform — — 443
Other 83 ( 91 ) 178
$ 1,231 $ 521 $ 3,095
−Removed: Effective tax rate 9 % 41 % N/M
−Removed: N/M - Not meaningful
−Removed: The 2017 Tax Cuts and Jobs Act (the Tax Legislation) was enacted in fiscal 2018, which, among other things, lowered the corporate income tax rate to 21%, and as a fiscal-year taxpayer, certain provisions of the Tax Legislation became effective for us at the beginning of fiscal 2019, including FDII (foreign-derived intangible income).
−Removed: In response to the Tax Legislation and to better align our profits with our activities, we implemented certain tax restructuring in fiscal 2018 and 2019.
−Removed: As a result, beginning in fiscal 2019, substantially all of our income is in the U.S., of which a significant portion qualifies for preferential treatment as FDII at a 13 % effective tax rate.
−Removed: Our annual effective tax rate for fiscal 2018 reflected a blended federal statutory rate of approximately 25 %.
−Removed: In the fourth quarter of fiscal 2020, the United States Treasury Department issued final regulations on deductions for FDII, which are retroactive to fiscal 2019.
−Removed: As a result of these regulations, our fiscal 2020 annual effective tax rate increased by approximately 1 %.
−Removed: In the first quarter of fiscal 2021, the United States Treasury Department issued final regulations on the foreign tax credit, which we anticipate will adversely affect our effective tax rate.
−Removed: The impact of these regulations, which are retroactive to fiscal 2019, has not been included in our fiscal 2020 effective tax rate.
−Removed: While we continue to evaluate these new regulations, we currently do not expect the adverse impact to fiscal 2019 and 2020 to be significant.
−Removed: As a result of the Tax Legislation, in fiscal 2019, several of our foreign subsidiaries made elections to be treated as U.S.
+Added: Effective tax rate 12 % 9 % 41 %
+Added: In fiscal 2019, several of our foreign subsidiaries made elections to be treated as U.S.
branches for federal income tax purposes (commonly referred to as “check-the-box” elections) effective beginning in fiscal 2018 and 2019.
−Removed: Although beginning in fiscal 2019 the income of these entities is included in our consolidated U.S.
−Removed: tax return, we believe that by treating these foreign subsidiaries as U.S.
−Removed: branches for federal income taxes, rather than controlled foreign corporations, we will significantly reduce the risk of being subject to GILTI (global intangible low-taxed income) and BEAT (base-erosion and anti-abuse tax) taxes.
As a result of making these check-the-box elections, we recorded a tax benefit of $ 570 million in the first quarter of fiscal 2019 due to establishing new U.S.
7 unchanged sentences
stockholder from a foreign corporation.
−Removed: As a result of this change, pursuant to an agreement with the Internal Revenue Service, we relinquished the federal tax basis step-up of intellectual property that was distributed in fiscal 2018 by one of our foreign subsidiaries to a U.S.
+Added: As a result of this change, pursuant to an agreement with the IRS, we relinquished the federal tax basis step-up of intellectual property that was distributed in fiscal 2018 by one of our foreign subsidiaries to a U.S.
Therefore, the related deferred tax asset was derecognized, resulting in a $ 2.5 billion charge to income tax expense in fiscal 2019.
−Removed: In fiscal 2019, as a result of recent court rulings in Korea, among other factors, we decided to apply for a partial refund claim for taxes previously withheld from licensees in Korea on payments due under their license agreements to which we
−Removed: QUALCOMM Incorporated
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: have claimed a foreign tax credit in the United States.
−Removed: As a result, $ 1.6 billion and $ 1.4 billion was recorded as a noncurrent income taxes receivable (recorded in other assets) at September 27, 2020 and September 29, 2019, respectively, and $ 1.6 billion and $ 1.4 billion was recorded a noncurrent liability for uncertain tax benefits of (recorded in other liabilities) at September 27, 2020 and September 29, 2019, respectively.
−Removed: In fiscal 2018, as a result of the Tax Legislation, we recorded a charge of $ 5.7 billion to income tax expense, comprised of $ 5.2 billion related to the estimated one-time repatriation tax on deemed repatriated earnings and profits of U.S.-owned foreign subsidiaries (the Toll Charge) and $ 438 million resulting from the remeasurement of U.S.
−Removed: deferred tax assets and liabilities that existed at the end of fiscal 2017 at a lower enacted corporate income tax rate, which included a $ 135 million tax benefit recorded in fiscal 2018 related to the remeasurement of a U.S.
−Removed: deferred tax liability that was established as a result of a change in one of our tax positions due to Tax Legislation.
−Removed: After application of certain tax credits, the total cash payment is $ 2.5 billion.
−Removed: At September 27, 2020, we estimated remaining future payments of $ 2.0 billion for the Toll Charge, after application of certain tax credits (including excess tax credits generated in fiscal 2019), which is payable in installments over the next six years.
+Added: In fiscal 2019, as a result of certain court rulings in Korea, among other factors, we decided to apply for a partial refund claim for taxes previously withheld from licensees in Korea on payments due under their license agreements to which we have claimed a foreign tax credit in the United States.
+Added: As a result, $ 1.9 billion and $ 1.6 billion was recorded as a noncurrent income taxes receivable (recorded in other assets) at September 26, 2021 and September 27, 2020, respectively, and $ 1.9 billion and $ 1.6 billion was recorded as a noncurrent liability for uncertain tax benefits (recorded in other liabilities) at September 26, 2021 and September 27, 2020, respectively.
+Added: At September 26, 2021, we estimated remaining future payments of $ 1.9 billion for a one-time repatriation tax accrued in fiscal 2018, after application of certain tax credits, which is payable in installments over the next five years.
At September 26, 2021, $ 196 million was recorded in other current liabilities, reflecting the next installment due in January 2022.
−Removed: Income tax expense for fiscal 2018 was also impacted by the charge recorded in fiscal 2018 related to the termination fee paid to NXP, which did not result in a tax benefit after the consideration of realizability of such loss.
−Removed: Fiscal 2018 income tax expense was impacted by the EC fine and settlement with the TFTC, which were not deductible for tax purposes (or taxable in the case of the settlement) and which were attributable to foreign jurisdictions and to the United States.
−Removed: Certain of our tax incentives in Singapore expired in March 2017.
−Removed: In fiscal 2018, we entered into a new tax incentive agreement in Singapore that results in a reduced tax rate from March 2017 through March 2022, provided that we meet specified employment and investment criteria in Singapore.
−Removed: Our Singapore tax rate will increase in March 2022 as a result of expiration of these incentives and again in March 2027 upon the expiration of tax incentives under a prior agreement.
−Removed: During fiscal 2018, one of our Singapore subsidiaries distributed certain intellectual property to a U.S.
−Removed: subsidiary reducing the benefit of these tax incentives almost entirely going forward.
−Removed: Without these tax incentives, our income tax expense would have been higher in fiscal 2018 by $ 652 million and impacted earnings per share by $ 0.45 per share.
−Removed: The impact in fiscal 2019 and 2020 was not significant.
We continue to assert that certain of our foreign earnings are not indefinitely reinvested.
At September 26, 2021, we had not recorded a deferred tax liability of approximately $ 63 million related to foreign withholding taxes on approximately $ 761 million of undistributed earnings of certain subsidiaries that we continue to consider to be indefinitely reinvested outside the United States.
−Removed: Should we decide to no longer indefinitely reinvest such earnings outside the United States, we would have to adjust the income tax provision in the period we make such determination.
+Added: Should we decide to no longer indefinitely reinvest such earnings outside the U.S., we would have to adjust the income tax provision in the period we make such determination.
+Added: We have tax incentives in Singapore that require we meet specified employment and other criteria.
+Added: Although our profit in Singapore has declined as a result of our 2018 restructuring and such tax incentives were not significant for all periods presented, failure to meet these incentive requirements through March 2022 could require us to refund previously realized material tax benefits for 2017 and 2018.
QUALCOMM Incorporated
4 unchanged sentences
Unused tax credits $ 1,504 $ 1,311
−Removed: Accrued liabilities and reserves 812 648
+Added: Customer incentives 762 537
Unused net operating losses 663 576
+Added: Accrued liabilities and reserves 483 275
+Added: Operating lease liabilities 188 107
Unearned revenues 181 262
−Removed: Unrealized losses on other investments and marketable securities 235 164
Share-based compensation 175 151
−Removed: Operating lease liabilities 107 —
+Added: Unrealized losses on other investments and marketable securities 106 235
Other 165 141
2 unchanged sentences
Total net deferred tax assets 2,301 1,867
+Added: Unrealized gains on other investments and marketable securities ( 215 ) ( 97 )
Intangible assets ( 198 ) ( 181 )
−Removed: Property, plant and equipment ( 162 ) ( 102 )
Operating lease assets ( 174 ) ( 100 )
−Removed: Unrealized gains on other investments and marketable securities ( 97 ) ( 99 )
+Added: Property, plant and equipment ( 111 ) ( 162 )
Other ( 76 ) ( 32 )
5 unchanged sentences
(1) Non-current deferred tax liabilities were included in other liabilities in the consolidated balance sheets.
−Removed: At September 27, 2020, we had unused federal net operating loss carryforwards of $ 167 million expiring from 2021 through 2035, unused state net operating loss carryforwards of $ 579 million expiring from 2021 through 2040 and unused foreign net operating loss carryforwards of $ 2.2 billion, of which $ 2.0 billion expire in 2027.
+Added: At September 26, 2021, we had unused federal net operating loss carryforwards of $ 214 million, of which $ 150 million expire from 2022 through 2035 and $ 64 million may be carried forward indefinitely, unused state net operating loss carryforwards of $ 474 million expiring from 2022 through 2040 and unused foreign net operating loss carryforwards of $ 2.3 billion, of which substantially all may be carried forward indefinitely.
At September 26, 2021, we had unused state tax credits of $ 1.3 billion, of which substantially all may be carried forward indefinitely, unused federal tax credits of $ 215 million expiring from 2026 through 2031 and unused tax credits of $ 51 million in foreign jurisdictions expiring from 2033 through 2041.
We do not expect our federal net operating loss carryforwards to expire unused.
−Removed: At September 27, 2020, we have provided a valuation allowance on certain state tax credits, foreign deferred tax assets, federal capital losses, federal foreign tax credits and state net operating losses of $ 1.1 billion, $ 524 million, $ 29 million, $ 28 million and $ 14 million, respectively.
−Removed: The valuation allowance reflects the uncertainties surrounding our ability to generate sufficient future taxable income in certain foreign and state tax jurisdictions to utilize our net operating losses and our ability to generate sufficient capital gains to utilize all capital losses.
+Added: At September 26, 2021, we have provided a valuation allowance on certain state tax credits, foreign deferred tax assets and state net operating losses of $ 1.3 billion, $ 607 million and $ 13 million, respectively.
+Added: The valuation allowance reflects the uncertainties surrounding our ability to generate sufficient future taxable income in certain foreign and state tax jurisdictions to utilize our net operating losses.
We believe, more likely than not, that we will have sufficient taxable income after deductions related to share-based awards to utilize our remaining deferred tax assets.
9 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: Of the $ 1.9 billion of unrecognized tax benefits, $ 1.8 billion has been recorded to other noncurrent liabilities.
+Added: Of the $ 2.1 billion of unrecognized tax benefits, $ 1.9 billion has been recorded to other liabilities.
We believe that it is reasonably possible that certain unrecognized tax benefits recorded at September 26, 2021 may result in a cash payment in fiscal 2022.
1 unchanged sentence
The unrecognized tax benefits differ from the amount that would affect our effective tax rate primarily because the unrecognized tax benefits were included on a gross basis and did not reflect related receivables or secondary impacts, such as the federal deduction for state taxes, adjustments to deferred tax assets and the valuation allowance that might be required if our tax positions are sustained.
−Removed: The increase in unrecognized tax benefits in fiscal 2020 and fiscal 2019 was primarily due to our decision in fiscal 2019 to request for a refund of Korean withholding tax (which had an insignificant impact to our income tax provision).
+Added: The increase in unrecognized tax benefits for all periods presented was primarily due to expected refunds of Korean withholding tax previously paid (which had an insignificant impact to our income tax provision).
If successful, the refund will result in a corresponding reduction in U.S.
2 unchanged sentences
such increase is not expected to have a significant impact on our income tax provision.
−Removed: We file income tax returns in the United States federal jurisdiction and various state and foreign jurisdictions.
−Removed: We are currently a participant in the IRS Compliance Assurance Process, whereby we and the IRS endeavor to agree on the treatment of all tax issues prior to the tax return being filed.
+Added: At September 26, 2021, total interest and penalties related to unrecognized tax benefits accrued in other current liabilities and other liabilities was $ 184 million, with a corresponding noncurrent income taxes receivable of $ 107 million recorded in other assets for expected refunds of certain tax benefits.
+Added: We file income tax returns in the U.S.
+Added: federal jurisdiction and various state and foreign jurisdictions.
+Added: We are currently a participant in the IRS Compliance Assurance Process (CAP) Program, whereby we and the IRS endeavor to agree on the treatment of all tax issues prior to the tax return being filed.
We are no longer subject to U.S.
federal income tax examinations for years prior to fiscal 2018.
−Removed: We are subject to examination by the California Franchise Tax Board for fiscal years after 2014.
−Removed: We are also subject to examination in other taxing jurisdictions in the United States and numerous foreign jurisdictions.
+Added: We are also subject to examination in other taxing jurisdictions in the U.S.
+Added: and numerous foreign jurisdictions.
These examinations are at various stages with respect to assessments, claims, deficiencies and refunds, many of which are open for periods after fiscal 2001.
2 unchanged sentences
However, the final determination of tax audits and any related legal proceedings could materially differ from amounts reflected in our income tax provision and the related accruals.
−Removed: Cash amounts paid for income taxes, net of refunds received, were $ 830 million, $ 1.1 billion and $ 877 million for fiscal 2020, 2019 and 2018, respectively.
+Added: Cash amounts paid for income taxes, net of refunds received, were $ 1.5 billion, $ 830 million and $ 1.1 billion for fiscal 2021, 2020 and 2019, respectively.
Capital Stock
1 unchanged sentence
On July 26, 2018, we announced a stock repurchase program authorizing us to repurchase up to $ 30.0 billion of our common stock.
−Removed: The stock repurchase program has no expiration date.
−Removed: In the first quarter of fiscal 2021, we resumed stock repurchases under the stock repurchase program, which we had suspended in the third quarter of fiscal 2020 in light of COVID-19 to maintain our financial liquidity position and flexibility.
−Removed: In September 2018, we entered into three accelerated share repurchase agreements (ASR Agreements) with three financial institutions under which we paid an aggregate of $ 16.0 billion upfront to the financial institutions and received from them an initial delivery of 178 million shares of our common stock, which were retired and recorded as a $ 12.8 billion reduction to stockholders’ equity.
−Removed: The remaining $ 3.2 billion was recorded as a reduction to stockholders’ equity as an unsettled forward contract indexed to our own stock.
−Removed: During September 2019, the ASR Agreements were completed, and an additional 69 million shares were delivered to us, which were retired, and the forward contract was settled with no adjustment to stockholders’ equity.
−Removed: In total, we purchased 247 million shares based on the volume-weighted average stock price of our common stock during the terms of the transactions, less a discount.
−Removed: During fiscal 2020, 2019 and 2018, we repurchased and retired an additional 31 million, 27 million and 24 million shares of common stock, respectively, for $ 2.4 billion, $ 1.8 billion and $ 1.4 billion, respectively, before commissions.
−Removed: 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.
−Removed: At September 27, 2020, $ 4.6 billion remained authorized for repurchase under our stock repurchase program.
+Added: On October 12, 2021, we announced a new $ 10.0 billion stock repurchase authorization, which is in addition to the remaining repurchase authority of $ 0.9 billion under the aforementioned program.
+Added: The stock repurchase programs have no expiration date.
+Added: Since September 26, 2021, we repurchased and retired 5.4 million shares of common stock for $ 703 million.
Shares Outstanding.
3 unchanged sentences
On October 13, 2021 , we announced a cash dividend of $ 0.68 per share on our common stock, payable on December 16, 2021 to stockholders of record as of the close of business on December 2, 2021 .
−Removed: QUALCOMM Incorporated
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Employee Benefit Plans
−Removed: Employee Savings and Retirement Plan.
−Removed: We have a 401(k) plan that allows eligible employees to contribute up to 85 % of their eligible compensation, subject to annual limits.
−Removed: We match a portion of the employee contributions and may, at our discretion, make additional contributions based upon earnings.
−Removed: Our contribution expense was $ 69 million, $ 64 million and $ 78 million in fiscal 2020, 2019 and 2018, respectively.
Equity Compensation Plans.
On March 10, 2020, our stockholders approved the amended and restated Qualcomm Incorporated 2016 Long-Term Incentive Plan (the 2016 Plan), including an increase in the share reserve by 75 million shares.
−Removed: The 2016 Plan provides for the grant of incentive and nonstatutory stock options, stock appreciation rights, restricted stock, unrestricted stock, restricted stock units, performance units, performance shares, deferred compensation awards and other stock-based awards.
+Added: The 2016 Plan provides for the grant of RSUs and other stock-based awards.
The Board of Directors may amend or terminate the 2016 Plan at any time.
1 unchanged sentence
At September 26, 2021, approximately 71 million shares were available for future grant under the 2016 Plan.
+Added: QUALCOMM Incorporated
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
RSUs are share awards that entitle the holder to receive shares of our common stock upon vesting.
The RSUs generally include dividend-equivalent rights and vest over three years from the date of grant.
−Removed: A summary of RSU transactions that contain only service requirements to vest for all equity compensation plans follows:
−Removed: Number of Shares Weighted-Average
−Removed: Grant Date Fair
−Removed: Value Aggregate Intrinsic
−Removed: (In millions) (In billions)
+Added: A summary of RSU transactions under our 2016 Plan that contain only service requirements to vest follows:
+Added: Number of Shares
+Added: (in millions) Weighted-Average
+Added: Grant Date Fair Value
RSUs outstanding at September 27, 2020 32 $ 74.99
RSUs granted 16 124.22
+Added: RSUs assumed in acquisition 1 133.65
RSUs canceled/forfeited ( 2 ) 97.81
1 unchanged sentence
RSUs outstanding at September 26, 2021 29 102.83
−Removed: The weighted-average estimated fair values of employee RSUs that contain only service requirements to vest granted during fiscal 2019 and 2018 were $ 63.10 and $ 62.61 per share, respectively.
+Added: The weighted-average estimated grant date fair values of employee RSUs under our 2016 Plan that contain only service requirements to vest granted during fiscal 2020 and 2019 were $ 82.57 and $ 63.10 per share, respectively.
Upon vesting, we issue new shares of common stock.
3 unchanged sentences
At September 26, 2021, total unrecognized compensation expense related to such non-vested RSUs granted prior to that date was $ 2.0 billion, which is expected to be recognized over a weighted-average period of 1.7 years.
−Removed: The total vest-date fair value of such RSUs that vested during fiscal 2020, 2019 and 2018 was $ 1.3 billion, $ 977 million and $ 940 million, respectively.
−Removed: The total shares withheld to satisfy statutory tax withholding requirements related to all share-based awards were approximately 4 million in fiscal 2020, 2019 and 2018, and were based on the value of the awards on their vesting dates as determined by our closing stock price.
+Added: The total vest-date fair value of such RSUs that vested during fiscal 2021, 2020 and 2019 was $ 2.6 billion, $ 1.3 billion and $ 977 million, respectively.
+Added: The total shares withheld to satisfy statutory tax withholding requirements related to all share-based awards were 5 million in fiscal 2021 and 4 million in fiscal 2020 and 2019, and were based on the value of the awards on their vesting dates as determined by our closing stock price.
The total tax benefits realized, including the excess tax benefits, related to share-based awards during fiscal 2021, 2020 and 2019 were $ 567 million, $ 273 million and $ 237 million, respectively.
3 unchanged sentences
The employee stock purchase plan includes a non-423(b) plan.
−Removed: On March 23, 2018, our stockholders approved an amendment to the Amended and Restated QUALCOMM Incorporated 2001 Employee Stock Purchase Plan to increase the share reserve by 30 million shares.
−Removed: The shares authorized under the plan were approximately 102 million at September 27, 2020.
−Removed: The shares reserved for future issuance were approximately 28 million at September 27, 2020.
−Removed: During fiscal 2020, 2019 and 2018, approximately 5 million, 6 million and 6 million shares, respectively, were issued under the plan at an average price of $ 66.53 , $ 42.13 and $ 49.41 per share, respectively.
+Added: The shares reserved for future issuance under the employee stock purchase plan were 25 million at September 26, 2021.
+Added: During fiscal 2021, 2020 and 2019, 3 million, 5 million and 6 million shares, respectively, were issued under the plan at an average price of $ 107.48 , $ 66.53 and $ 42.13 per share, respectively.
At September 26, 2021, total unrecognized compensation expense related to non-vested purchase rights granted prior to that date was $ 35 million.
We recorded cash received from the exercise of purchase rights of $ 343 million, $ 306 million and $ 257 million during fiscal 2021, 2020 and 2019, respectively.
−Removed: Long-term Debt.
−Removed: In May 2020, we issued unsecured fixed-rate notes, consisting of $ 1.2 billion fixed-rate 2.15 % notes and $ 800 million fixed-rate 3.25 % notes (May 2020 Notes) that mature on May 20, 2030 and May 20, 2050, respectively.
−Removed: The proceeds from the May 2020 Notes, net of underwriting discounts and offering expenses, were used to repay the $ 250
QUALCOMM Incorporated
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: million floating-rate and $ 1.75 billion fixed-rate notes that matured on May 20, 2020, which were classified as short-term debt at September 29, 2019.
−Removed: In August 2020, we completed an exchange of $ 2.0 billion of our outstanding fixed-rate notes maturing between 2022 and 2025 (Old Notes) for $ 1.0 billion fixed-rate 1.30 % notes due May 20, 2028 and $ 1.2 billion fixed-rate 1.65 % notes due May 20, 2032 (August 2020 Notes).
−Removed: In connection with this exchange, we also repurchased $ 202 million of the Old Notes from holders not eligible to participate in the exchange, which resulted in a $ 17 million loss on extinguishment recorded in interest expense.
+Added: Long-term Debt.
The following table provides a summary of our long-term debt and current portion of long-term debt:
11 unchanged sentences
2,000 2.31 % - 3.30 %
+Added: 2,000 2.31 % - 3.30 %
August 2020 Notes 2028 - 2032
2,207 1.98 % - 2.66 %
+Added: 2,207 1.96 % - 2.65 %
Total principal 15,472 15,472
Unamortized discount, including debt issuance costs ( 234 ) ( 260 )
−Removed: Hedge accounting fair value adjustments 14 9
+Added: Hedge accounting adjustments 7 14
Total long-term debt $ 15,245 $ 15,226
3 unchanged sentences
At September 26, 2021, future principal payments were $ 1.5 billion in fiscal 2022, $ 1.5 billion in fiscal 2023, $ 914 million in fiscal 2024, $ 1.4 billion in fiscal 2025 and $ 10.2 billion after fiscal 2026.
−Removed: no principal payments are due in fiscal 2021.
−Removed: At September 27, 2020 and September 29, 2019, the aggregate fair value of the notes, based on Level 2 inputs, was approximately $ 17.5 billion and $ 16.5 billion, respectively.
+Added: At September 26, 2021, the aggregate fair value of the notes, based on Level 2 inputs, was approximately $ 17.0 billion.
+Added: At September 26, 2021, with the exception of $ 500 million of outstanding unsecured floating-rate notes due January 30, 2023, all of our outstanding long-term debt is comprised of unsecured fixed-rate notes.
We may redeem the outstanding fixed-rate notes at any time in whole, or from time to time in part, at specified make-whole premiums as defined in the applicable form of note.
1 unchanged sentence
The obligations under the notes rank equally in right of payment with all of our other senior unsecured indebtedness and will effectively rank junior to all liabilities of our subsidiaries.
−Removed: At September 27, 2020, with the exception of $ 500 million of outstanding unsecured floating-rate notes due January 30, 2023, all of our outstanding long-term debt is comprised of unsecured fixed-rate notes.
The effective interest rates for the notes include the interest on the notes, amortization of the discount, which includes debt issuance costs, and if applicable, adjustments related to hedging.
2 unchanged sentences
Commercial Paper Program .
−Removed: In fiscal 2020, we reduced the total amount available for issuance under our unsecured commercial paper program from $ 5.0 billion to $ 4.5 billion.
+Added: We have an unsecured commercial paper program, which provides for the issuance of up to $ 4.5 billion.
Net proceeds from this program are used for general corporate purposes.
Maturities of commercial paper can range from 1 to up to 397 days.
−Removed: At September 27, 2020 and September 29, 2019, we had $ 500 million and $ 499 million, respectively, of outstanding commercial paper recorded as short-term debt with a weighted-average interest rate of 0.21 % and 2.17 %, respectively, which included fees paid to the commercial paper dealers, and weighted-average remaining days to maturity of 37 days and 41 days, respectively.
−Removed: The carrying value of the outstanding commercial paper approximated its estimated fair value at September 27, 2020 and September 29, 2019.
+Added: At September 26, 2021 and September 27, 2020, we had $ 500 million of outstanding commercial paper recorded as short-term debt with a weighted-average interest rate of 0.13 % and 0.21 %, respectively, which included fees paid to the commercial paper dealers.
+Added: At September 26, 2021 and September 27, 2020, the weighted-average remaining days to maturity were 39 days and 37 days, respectively.
+Added: The carrying value of the outstanding commercial paper approximated its estimated fair value at September 26, 2021.
Revolving Credit Facility.
−Removed: 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.
−Removed: At September 27, 2020 and September 29, 2019, no amounts were outstanding under the Revolving Credit Facility.
+Added: On December 8, 2020, we entered into a Revolving Credit Facility replacing our prior Amended and Restated Revolving Credit Facility.
+Added: There were no outstanding borrowings under the Amended and Restated Revolving Credit Facility at the time of termination and September 27, 2020.
+Added: The Revolving Credit Facility 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 December 8, 2025.
+Added: At September 26, 2021, no amounts were outstanding under the Revolving Credit Facility.
Debt Covenants.
−Removed: The Revolving Credit Facility requires that we comply with certain covenants, including one financial covenant to maintain a ratio of consolidated earnings before interest, taxes, depreciation and amortization to consolidated interest expense, as defined in each of the respective agreements, of not less than three to one at the end of each fiscal quarter.
−Removed: We are not subject to any financial covenants under the notes nor any covenants that would prohibit us from incurring additional indebtedness ranking equal to the notes, paying dividends, issuing securities or repurchasing securities issued by us
+Added: The Revolving Credit Facility requires that we comply with certain covenants, including that we maintain an interest coverage ratio as defined in the agreement.
+Added: We are not subject to any financial covenants under the notes nor any covenants that would prohibit us from incurring additional indebtedness ranking equal to the notes, paying dividends, issuing securities or repurchasing securities issued by us or our subsidiaries.
+Added: At September 26, 2021, we were in compliance with the applicable covenants under the Revolving Credit Facility.
QUALCOMM Incorporated
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: or our subsidiaries.
−Removed: At September 27, 2020 and September 29, 2019, we were in compliance with the applicable covenants under the Revolving Credit Facility.
Commitments and Contingencies
4 unchanged sentences
The complaints sought unspecified damages, interest, fees and costs.
−Removed: On May 4, 2017, the court consolidated the two actions and appointed lead plaintiffs.
−Removed: 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.
−Removed: On September 1, 2017, we filed a motion to dismiss the consolidated amended complaint.
−Removed: On March 18, 2019, the court denied our motion to dismiss.
+Added: On May 4, 2017, the court consolidated the two actions.
+Added: On July 3, 2017, the plaintiffs filed a consolidated amended complaint asserting the same basic theories of liability and requesting the same basic relief.
+Added: On September 1, 2017, we filed a motion to dismiss the consolidated amended complaint, and on March 18, 2019, the court denied our motion.
On January 15, 2020, we filed a motion for judgment on the pleadings.
2 unchanged sentences
In re Qualcomm/Broadcom Merger Securities Litigation:
−Removed: 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.
+Added: 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 then 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.
−Removed: 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.
−Removed: On May 11, 2020, the plaintiffs filed a second amended complaint, and on June 25, 2020, we filed a motion to dismiss that complaint.
−Removed: On October 8, 2020, the court heard oral arguments on our motion to dismiss, following which it granted our motion and dismissed the case with prejudice.
+Added: On May 11, 2020, the plaintiffs filed a second amended complaint, and on October 8, 2020, the court granted our motion to dismiss the case with prejudice.
+Added: On November 7, 2020, the plaintiffs filed a notice of appeal with the United States Court of Appeals for the Ninth Circuit (Ninth Circuit).
+Added: A hearing on the appeal is scheduled for November 16, 2021.
We believe the plaintiffs’ claims are without merit.
−Removed: Consumer Class Action Lawsuit:
+Added: Consumer Class Action Lawsuits:
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.
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.
−Removed: 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.
2 unchanged sentences
On November 10, 2017, the court denied our motion, except to the extent that certain claims seek damages under the Sherman Antitrust Act.
−Removed: On July 5, 2018, the plaintiffs filed a motion for class certification, and the court granted that motion on September 27, 2018.
−Removed: 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.
−Removed: On January 24, 2019, the court stayed the case pending our appeal.
+Added: On July 5, 2018, the plaintiffs filed a motion for class certification, and on September 27, 2018, the court granted that motion.
+Added: On January 23, 2019, the Ninth Circuit granted us permission to appeal the court’s class certification order, and 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.
−Removed: The Ninth Circuit has not yet ruled on our appeal.
+Added: On September 29, 2021, the Ninth Circuit vacated the district court’s class certification order, ruling that the court had failed to correctly assess the propriety of applying California law to a nationwide class.
+Added: The Ninth Circuit remanded the case to the district court and instructed the court to consider the effect of United States Federal Trade Commission (FTC) v.
+Added: QUALCOMM Incorporated (which the Ninth Circuit decided in favor of Qualcomm in August 2020) on this case.
We believe the plaintiffs’ claims are without merit.
−Removed: Since November 2017, several other 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) and Israel (in the Haifa District Court), each on behalf of a putative class of purchasers of cellular phones and other cellular devices, alleging violations of certain of those countries’ competition and consumer protection laws.
+Added: Since November 2017, several other 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), Israel (in the Haifa District Court) and the United Kingdom (in the Competition Appeal Tribunal), each on behalf of a putative class of purchasers of cellular phones and other cellular devices, alleging violations of certain of those countries’ competition and consumer protection laws.
The claims in these complaints are similar to those in the U.S.
consumer class action complaints.
−Removed: The complaints seek unspecified damages.
+Added: The complaints seek damages.
We believe the plaintiffs’ claims are without merit.
2 unchanged sentences
On May 1, 2014, ParkerVision filed a complaint against us in the United States District Court for the Middle District of Florida alleging that certain of our products infringed seven ParkerVision patents.
−Removed: On August 21, 2014, ParkerVision amended the complaint, then captioned ParkerVision, Inc.
−Removed: QUALCOMM Incorporated, Qualcomm Atheros, Inc., HTC Corporation, HTC America, Inc., Samsung Electronics Co., LTD., Samsung Electronics America, Inc.
−Removed: and Samsung Telecommunications America, LLC, broadening the allegations.
−Removed: ParkerVision alleged that we infringed 11 ParkerVision patents and sought damages and injunctive and other relief.
−Removed: ParkerVision has subsequently reduced the number of patents asserted to four, granted covenants not to sue on the other patents, and dismissed the Samsung and HTC entities from the case.
+Added: On August 21, 2014, ParkerVision amended the complaint, alleging that we infringed 11 ParkerVision patents and sought damages and injunctive and other relief.
+Added: ParkerVision has subsequently reduced the number of patents asserted to three.
The asserted patents are now expired, and injunctive relief is no longer available.
ParkerVision continues to seek damages related to the sale of many of our radio frequency (RF) products sold between 2008 and 2018.
−Removed: Trial is currently scheduled to begin on May 3, 2021, but may be delayed due to the
−Removed: QUALCOMM Incorporated
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: COVID-19 pandemic.
−Removed: We have previously prevailed on infringement claims asserted by ParkerVision in related lawsuits and have successfully invalidated a number of their patent claims in patent office proceedings.
+Added: On March 26, 2021, the court issued an order stating that trial is extremely unlikely to occur before November or December 2021, if then.
We believe that ParkerVision’s claims are without merit.
1 unchanged sentence
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).
−Removed: On December 27, 2016, the KFTC announced that it had reached a decision in the investigation, finding that we violated provisions of the MRFTA.
+Added: QUALCOMM Incorporated
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: 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:
25 unchanged sentences
On June 8, 2020, the KFTC informed us that it was conducting an investigation of us relating to the MRFTA.
−Removed: The KFTC has not provided a formal notice on the scope of their investigation, but we believe it concerns our business practices in connection with our sale of radio frequency front end (RFFE) components.
+Added: The KFTC has not provided a formal notice on the scope of its investigation, but we believe it concerns our business practices in connection with our sale of radio frequency front-end (RFFE) components.
+Added: We continue to cooperate with the KFTC as it conducts its investigation.
If a violation is found, a broad range of remedies is potentially available to the KFTC, including imposing a fine (of up to 3% of our sales in the relevant markets during the alleged period of violation) and/or injunctive relief prohibiting or restricting certain business practices.
5 unchanged sentences
On July 16, 2015, the EC announced that it had initiated formal proceedings in this matter.
−Removed: 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.
+Added: On July 18, 2019, the EC issued a decision finding 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.
5 unchanged sentences
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.
−Removed: At September 27, 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 income, net), was $ 286 million and included in other current liabilities.
+Added: At September 26, 2021, the liability, including related foreign currency losses and accrued interest (which, to the extent they were not related to the net investment hedge, were recorded in investment and other income, net), was $ 292 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).
−Removed: 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.
−Removed: we paid significant amounts to Apple on the condition that it
−Removed: QUALCOMM Incorporated
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: 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.
+Added: 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.
−Removed: The court has not yet ruled on our appeal.
+Added: From May 4, 2021 to May 6, 2021, a hearing on our appeal was held before the court.
+Added: The court has not yet issued a ruling.
We believe that our business practices do not violate the EU competition rules.
+Added: QUALCOMM Incorporated
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In the first quarter of fiscal 2018, we recorded a charge of $ 1.2 billion to other expenses related to this EC fine.
3 unchanged sentences
At September 26, 2021, 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 income, net), was $ 1.2 billion and included in other current liabilities.
−Removed: European Commission (EC) Investigation regarding Radio Frequency Front End (RFFE):
−Removed: 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.
−Removed: We have responded to the Request for Information.
−Removed: 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.
−Removed: It is difficult to predict the outcome of this matter or what remedies, if any, may be imposed by the EC.
−Removed: We believe that our business practices do not violate the EU competition rules.
−Removed: United States Federal Trade Commission (FTC) v.
−Removed: QUALCOMM Incorporated:
−Removed: 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).
−Removed: 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.
−Removed: The complaint sought a permanent injunction against our alleged violations of the FTCA and other unspecified ancillary equitable relief.
−Removed: 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.
−Removed: On November 6, 2018, the court granted the FTC’s partial summary judgment motion.
−Removed: Trial was held January 4-29, 2019.
−Removed: On May 21, 2019, the court issued an Order setting forth its Findings of Fact and Conclusions of Law.
−Removed: 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;
−Removed: (2) refusing to license our cellular standard-essential patents to competitors selling cellular modem chips;
−Removed: and (3) entering into exclusive dealing arrangements with OEMs that foreclosed our rivals.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: The court concluded that the combined effect of our conduct, together with our monopoly power, harmed the competitive process.
−Removed: The court imposed the following injunctive relief:
−Removed: (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;
−Removed: (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;
−Removed: (3) we may not enter into express or de facto exclusive dealing agreements for the supply of cellular modem chips;
−Removed: 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.
−Removed: 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.
−Removed: We disagree with the court’s conclusions, interpretation of the facts and application of the law.
−Removed: 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).
−Removed: 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
−Removed: QUALCOMM Incorporated
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: On August 23, 2019, the Ninth Circuit granted our Motion for Partial Stay.
−Removed: Thus, pending the resolution of the appeal in the Ninth Circuit or until further order of the Ninth Circuit, the portions of the district 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.
−Removed: On July 10, 2019, the Ninth Circuit granted our Motion to Expedite Appeal.
−Removed: On February 13, 2020, the Ninth Circuit heard oral argument.
−Removed: On August 11, 2020, the Ninth Circuit issued its opinion, which reversed the district court’s judgment, vacated its injunction and vacated its partial grant of summary judgment.
−Removed: The Ninth Circuit stated that the district court erred in holding that we are under an antitrust duty to license rival chip manufacturers and noted that our practice of licensing our standard-essential patents exclusively at the OEM level does not violate the antitrust laws.
−Removed: The Ninth Circuit also held that the district court’s “anticompetitive surcharge” theory failed to state a cogent theory of anticompetitive harm and that our patent-licensing royalties and “no license, no chips” policy do not impose an anticompetitive surcharge on rivals’ modem chip sales and do not undermine competition in either the CDMA or premium LTE chip markets.
−Removed: While agreeing with the district court that our 2011 and 2013 agreements with Apple were structured like exclusive dealing contracts, the Ninth Circuit nonetheless held that neither agreement had the actual or practical effect of substantially foreclosing competition in the CDMA modem chip market, and because Apple terminated these agreements years ago, the district court had improperly issued an injunction.
−Removed: The Ninth Circuit noted that neither the Sherman Act nor any other law prohibits companies like us from (1) licensing their standard-essential patents independently from their chip sales and collecting royalties, and/or (2) limiting their chip customer base to licensed OEMs.
−Removed: On September 25, 2020, the FTC filed a Petition for Rehearing En Banc .
−Removed: On October 28, 2020, the Ninth Circuit denied the FTC’s petition.
Contingent Losses and Other Considerations:
4 unchanged sentences
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.
−Removed: We are engaged in numerous other legal actions not described above arising in the ordinary course of our business (for example, proceedings relating to employment matters or the initiation or defense of proceedings relating to intellectual property rights) 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.
+Added: We are engaged in numerous other legal actions not described above arising in the ordinary course of our business (for example, proceedings relating to employment matters or the initiation or defense of proceedings relating to intellectual property rights) and, while there can be no assurance, we 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 .
5 unchanged sentences
Further, any possible range of loss cannot be reasonably estimated at this time.
−Removed: QUALCOMM Incorporated
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Purchase Obligations .
We have agreements with suppliers and other parties to purchase inventory, other goods and services and long-lived assets.
−Removed: Integrated circuit product inventory obligations represent purchase commitments for raw materials, semiconductor die, finished goods and manufacturing services, such as wafer bump, probe, assembly and final test.
−Removed: Under our manufacturing relationships with our foundry suppliers and assembly and test service providers, cancellation of outstanding purchase commitments is generally allowed but requires payment of costs incurred through the date of cancellation, and in some cases, incremental fees related to capacity underutilization.
−Removed: Obligations under our purchase agreements, which primarily relate to integrated circuit product inventory obligations, at September 27, 2020 were as follows (in millions):
−Removed: September 27,
−Removed: Total $ 6,060
+Added: During fiscal 2021, we entered into several multi-year capacity purchase commitments with certain suppliers of our integrated circuit products.
+Added: Integrated circuit product inventory obligations represent purchase commitments (including those under multi-year capacity purchase commitments to the extent such minimum amounts are both fixed and determinable) for raw materials, semiconductor die, finished goods and manufacturing services, such as wafer bump, probe, assembly and final test.
+Added: Under our manufacturing relationships with our foundry suppliers and assembly and test service providers, cancellation of outstanding purchase commitments is generally allowed but may result in the payment of costs incurred through the date of cancellation, and in some cases, incremental fees and/or the loss of amounts paid in advance related to capacity underutilization and the failure to meet future minimum purchase volumes under multi-year capacity purchase commitments.
+Added: Obligations under our purchase agreements, which primarily relate to integrated circuit product inventory obligations, at September 26, 2021 totaled $ 23.5 billion of which, $ 12.9 billion is expected to be paid in the next 12 months.
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.
−Removed: At September 27, 2020, other assets included $ 460 million of operating lease assets, with corresponding lease liabilities of $ 134 million recorded in other current liabilities and $ 371 million recorded in other liabilities.
+Added: As of September 26, 2021 and September 27, 2020, the weighted-average remaining lease term for operating leases were 7 years and 6 years, respectively.
Operating lease expense for fiscal 2021, 2020 and 2019 was $ 203 million, $ 181 million and $ 146 million, respectively.
−Removed: Cash paid under our operating leases was $ 153 million for fiscal 2020.
−Removed: As of September 27, 2020, the weighted-average remaining lease term and weighted-average discount rate for operating leases were 6 years and 4 %, respectively.
+Added: At September 26, 2021, other assets included $ 513 million of operating lease assets, with corresponding lease liabilities of $ 126 million recorded in other current liabilities and $ 428 million recorded in other liabilities .
+Added: At September 27, 2020, other assets included $ 460 million of operating lease assets, with corresponding lease liabilities of $ 134 million recorded in other current liabilities and $ 371 million recorded in other liabilities.
+Added: QUALCOMM Incorporated
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
At September 26, 2021, future lease payments under our operating leases were as follows (in millions):
4 unchanged sentences
Total lease liability balance $ 554
−Removed: At September 29, 2019, future minimum lease payments under our noncancelable operating leases under ASC 840 were as follows (in millions):
−Removed: September 29,
−Removed: Thereafter 35
−Removed: QUALCOMM Incorporated
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: Other Commitments .
−Removed: At September 27, 2020, we have committed to fund certain strategic investments up to $ 185 million, of which $ 103 million is expected to be funded in fiscal 2021.
−Removed: The substantial majority of the remaining commitments do not have fixed funding dates and are subject to certain conditions.
−Removed: Commitments represent the maximum amounts to be funded under these arrangements;
−Removed: actual funding may be in lesser amounts or not at all.
Segment Information
1 unchanged sentence
Our operating segments reflect the way our businesses and management/reporting structure are organized internally and the way our Chief Operating Decision Maker (CODM), who is our CEO, reviews financial information, makes operating decisions and assesses business performance.
−Removed: We also consider, among other items, the way budgets and forecasts are prepared and reviewed and the basis on which executive compensation is determined, as well as the similarity of business activities within our operating segments, such as the nature of products, the level of shared products, technology and other resources, production processes and customer base.
−Removed: We conduct business primarily through our QCT (Qualcomm CDMA Technologies) semiconductor business and our QTL (Qualcomm Technology Licensing) licensing business.
−Removed: QCT develops and supplies integrated circuits and system software based on 3G/4G/5G 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 systems for telematics and infotainment.
−Removed: QTL grants licenses or otherwise provides rights 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.
−Removed: Our QSI (Qualcomm Strategic Initiatives) reportable segment makes strategic investments and includes revenues and related costs associated with development contracts with an investee.
−Removed: We also have nonreportable segments, including QGOV (Qualcomm Government Technologies), our cloud AI inference processing initiative and other technology and service initiatives.
+Added: We also consider, among other items, the way budgets and forecasts are prepared and reviewed and the basis on which executive compensation is determined, as well as the similarity of activities within our operating segments, such as the nature of products, the level of shared products, technology and other resources, production processes and customer base.
+Added: We conduct business primarily through our QCT semiconductor business and our QTL licensing business.
+Added: QCT develops and supplies integrated circuits and system software based on 3G/4G/5G and other technologies, including RFFE, for use in mobile devices, automotive systems for telematics, connectivity and digital cockpit and IoT including wireless networks, broadband gateway equipment, consumer electronic devices and industrial devices.
+Added: QTL grants licenses or otherwise provides rights to use portions of our intellectual property portfolio, which includes certain patent rights essential to and/or useful in the manufacture and sale of certain wireless products.
+Added: Our QSI reportable segment makes strategic investments.
+Added: We also have nonreportable segments, including QGOV and our cloud AI inference processing initiative and other technology and service initiatives.
Our CODM allocates resources to and evaluates the performance of our segments based on revenues and earnings (loss) before income taxes (EBT).
1 unchanged sentence
Certain income and charges are not allocated to segments in our management reports because they are not considered in evaluating the segments’ operating performance.
−Removed: Unallocated income and charges include certain interest expense, certain net investment income, certain share-based compensation, gains and losses on our deferred compensation plan liabilities and related assets and certain research and development 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.
+Added: Unallocated income and charges include certain interest expense, certain net investment income, certain share-based compensation, gains and losses on our deferred compensation plan liabilities and related assets and certain research and development expenses, certain 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 awards, settlements and/or damages arising from legal or regulatory matters.
−Removed: In fiscal 2018, all of the costs ($ 474 million) related to pre-commercial research and development of 5G technologies were included in unallocated corporate research and development expenses, whereas similar costs related to the research and development of other technologies, including 3G and 4G technologies, were recorded in the QCT and QTL segments.
−Removed: Beginning in fiscal 2019, all research and development costs associated with 5G technologies were included in segment results.
−Removed: Additionally, beginning in fiscal 2019, certain research and development costs associated with early research and development that were historically included in our QCT segment were allocated to our QTL segment.
−Removed: The net effect of these changes negatively impacted QTL’s EBT by $ 489 million in fiscal 2019 and positively impacted QCT’s EBT by $ 160 million in fiscal 2019.
+Added: Our CODM does not evaluate our operating segments using discrete asset information.
QUALCOMM Incorporated
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: The table below presents revenues, EBT and total assets for reportable segments (in millions):
+Added: The table below presents revenues and EBT for reportable segments (in millions):
2021 2020 2019
9 unchanged sentences
Total $ 10,274 $ 5,719 $ 7,481
−Removed: QCT $ 3,990 $ 2,307 $ 3,041
−Removed: QTL 1,601 1,541 1,472
−Removed: QSI 1,371 1,708 1,279
−Removed: Reconciling items 28,632 27,401 26,926
−Removed: Total $ 35,594 $ 32,957 $ 32,718
−Removed: Segment assets are comprised of accounts receivable and inventories for QCT and QTL.
−Removed: QSI segment assets include certain non-marketable equity instruments, receivables and other investments.
−Removed: QSI assets at September 27, 2020, September 29, 2019 and September 30, 2018 included $ 110 million, $ 230 million and $ 283 million, respectively, related to investments in equity method investees.
−Removed: 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, accounts receivable from Huawei related to the remaining amounts due under the settlement agreement (Note 2), property, plant and equipment, deferred tax assets, goodwill, intangible assets, operating lease assets, noncurrent income taxes receivables, deferred compensation plan assets and assets of nonreportable segments.
−Removed: The net book value of long-lived tangible assets located outside of the United States was $ 2.3 billion, $ 1.4 billion and $ 1.4 billion at September 27, 2020, September 29, 2019 and September 30, 2018, respectively.
−Removed: The net book value of long-lived tangible assets located in the United States was $ 1.9 billion, $ 1.7 billion and $ 1.6 billion at September 27, 2020, September 29, 2019 and September 30, 2018, respectively.
+Added: The net book value of long-lived tangible assets located outside of the U.S.
+Added: was $ 2.9 billion and $ 2.3 billion at September 26, 2021 and September 27, 2020, respectively.
+Added: The net book value of long-lived tangible assets located in the U.S.
+Added: was $ 2.2 billion and $ 1.9 billion at September 26, 2021 and September 27, 2020, respectively.
We report revenues from external customers by country based on the location to which our products or services are delivered, which for QCT is generally the country in which our customers manufacture their products, and for licensing revenues, the invoiced addresses of our licensees.
14 unchanged sentences
Nonreportable segments $ 128 $ 133 $ 168
−Removed: Unallocated revenues 1,841 4,723 ( 100 )
+Added: Unallocated revenues (Note 2) 54 1,841 4,723
$ 182 $ 1,974 $ 4,891
−Removed: Unallocated revenues $ 1,841 $ 4,723 $ ( 100 )
+Added: Unallocated revenues (Note 2) $ 54 $ 1,841 $ 4,723
Unallocated cost of revenues ( 277 ) ( 340 ) ( 430 )
6 unchanged sentences
$ ( 3,032 ) $ ( 475 ) $ 2,040
−Removed: Certain revenues (and reduction to revenues) were not allocated to our segments in our management reports because they were not considered in evaluating segment results.
−Removed: Unallocated revenues in fiscal 2020 were comprised of licensing revenues from Huawei resulting from the settlement agreement and royalties for sales made in the March 2020 and June 2020 quarters under the new global patent license agreement (Note 2).
+Added: Certain revenues were not allocated to our segments in our management reports because they were not considered in evaluating segment results.
+Added: Unallocated revenues in fiscal 2021 were comprised of the release of a variable constraint against revenues not previously allocated to our segment results.
+Added: Unallocated revenues in fiscal 2020 were comprised of licensing revenues from Huawei resulting from the settlement agreement signed in July 2020 and royalties for sales made in the March 2020 and June 2020 quarters under the new global patent license agreement signed in July 2020.
Unallocated revenues in fiscal 2019 were comprised of licensing revenues resulting from the settlement with Apple and its contract manufacturers in April 2019.
−Removed: Unallocated revenues in fiscal 2018 were comprised of reductions to licensing revenues related to the portions of business arrangements that resolved legal disputes and were not allocated to our QTL segment.
+Added: On March 16, 2021 (the Closing Date), we completed the acquisition of NuVia, Inc.
+Added: (NUVIA) for $ 1.1 billion (net of cash acquired), substantially all of which was paid in cash.
+Added: In connection with the acquisition, we assumed or replaced unvested NUVIA stock awards with Qualcomm stock awards with an estimated fair value of $ 258 million, for which $ 10 million was attributable to pre-acquisition services and included in the purchase price, and the remaining amount is recognized as compensation expense over the related post-acquisition requisite service period of up to four years .
+Added: NUVIA has certain in-process technologies and is comprised of a CPU (central processing unit) and technology design team with expertise in high performance processors, SoC (system-on-chip) and power management for compute-intensive devices and applications.
+Added: Upon completion of development, NUVIA’s technologies are expected to be integrated into certain QCT products.
+Added: The allocation of the purchase price to the assets acquired and liabilities assumed based on their fair values was as follows (in millions):
+Added: In-process research and development (IPR&D) 247
+Added: Other assets 26
+Added: Total assets 1,332
+Added: Liabilities ( 68 )
+Added: Net assets acquired $ 1,264
+Added: Goodwill recognized in this transaction is not deductible for tax purposes and was allocated to our QCT segment for annual impairment testing purposes.
+Added: Goodwill is primarily attributable to assembled workforce and certain revenue and cost synergies expected to arise after the acquisition.
+Added: IPR&D is related to a single project, which is expected to be completed in fiscal 2023 and, upon completion, will be amortized over its useful life, which is expected to be seven years .
+Added: The estimated fair value of the IPR&D asset acquired was determined using an income approach based on significant inputs that were not observable.
+Added: Our results of operations for fiscal 2021 included the operating results of NUVIA since the Closing Date, the amounts of which were not material.
+Added: Pro forma results of operations have not been presented because the effects of this acquisition were not material to our consolidated results of operations.
+Added: QUALCOMM Incorporated
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fair Value Measurements
3 unchanged sentences
Marketable securities:
−Removed: Treasury securities and government-related securities — 10 — 10
Corporate bonds and notes — 4,459 — 4,459
−Removed: Mortgage- and asset-backed and auction rate securities — 66 35 101
Equity securities 682 — — 682
+Added: Mortgage- and asset-backed securities — 147 — 147
+Added: Treasury securities and government-related securities — 10 — 10
Total marketable securities 682 4,616 — 5,298
5 unchanged sentences
Total liabilities measured at fair value $ 685 $ 111 $ — $ 796
−Removed: Activity within Level 3 of the Fair Value Hierarchy.
−Removed: Other investments included in Level 3 at September 27, 2020 and September 29, 2019 were comprised of non-marketable debt instruments, and other liabilities included in Level 3 at September 29, 2019 were comprised of contingent consideration related to business combinations.
−Removed: Activity for marketable securities, other investments and other liabilities classified within Level 3 of the valuation hierarchy was insignificant during fiscal 2020 (primarily related to impairment of certain of our non-marketable debt instruments, purchases and settlements of
−Removed: QUALCOMM Incorporated
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: non-marketable debt instruments and payments of contingent consideration related to certain business acquisitions) and fiscal 2019 (primarily related to issuances of non-marketable debt instruments and payments of contingent consideration).
−Removed: Nonrecurring Fair Value Measurements.
−Removed: We measure certain assets and liabilities at fair value on a nonrecurring basis.
−Removed: 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.
−Removed: During fiscal 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 income, net (Note 2), and certain other non-marketable equity investments were remeasured to their estimated fair values based on observable price changes in orderly transactions for identical or similar securities, which was recorded as a component of net gains on other investments in investment and other income, net (Note 2).
−Removed: For a significant portion of the impairments, the estimated fair values resulted in a full write-off of the carrying values.
−Removed: The estimation of fair values was judgmental in nature and involved the use of significant estimates and assumptions.
−Removed: 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, volatility and liquidation and other rights of the securities we hold.
−Removed: During 2019, certain property, plant and equipment, non-marketable equity investments, intangible assets and goodwill were written down to their estimated fair values.
−Removed: We also measured certain non-marketable equity investments received as non-cash consideration at fair value on a nonrecurring basis (Note 2).
−Removed: We determined these fair value measurements using cost, market and income approaches.
−Removed: The estimation of fair value used in the fair value measurements required the use of significant unobservable inputs, and as a result, the fair value measurements were classified as Level 3.
−Removed: We did not have any other significant assets or liabilities that were measured at fair value on a nonrecurring basis in periods subsequent to initial recognition for all periods presented.
Marketable Securities
−Removed: 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):
5 unchanged sentences
Available-for-sale debt securities:
−Removed: Treasury securities and government-related securities $ 10 $ — $ — $ —
Corporate bonds and notes $ 4,459 $ 4,049 $ — $ —
Mortgage- and asset-backed and auction rate securities 147 66 — 35
+Added: Treasury securities and government-related securities 10 10 — —
Total available-for-sale debt securities 4,616 4,125 — 35
9 unchanged sentences
One to five years 3,219
+Added: Five to ten years 9
No single maturity date 147
Total $ 4,616
−Removed: Debt securities with no single maturity date included mortgage- and asset-backed securities and auction rate securities.
−Removed: At September 27, 2020, unrealized gains and unrealized losses on available-for-sale debt securities were $ 20 million and negligible, respectively.
−Removed: At September 29, 2019, unrealized gains and losses on available-for-sale debt securities were negligible.
+Added: Debt securities with no single maturity date included mortgage- and asset-backed securities.
QUALCOMM Incorporated
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: Summarized Quarterly Data (Unaudited)
−Removed: The following financial information reflects all normal recurring adjustments that are, in the opinion of management, necessary for a fair statement of the results of the interim periods.
−Removed: The table below presents quarterly data for fiscal 2020 and 2019 (in millions, except per share data):
−Removed: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
−Removed: Revenues (2) $ 5,077 $ 5,216 $ 4,893 $ 8,346
−Removed: Operating income (2) 1,030 991 782 3,452
−Removed: Net income (2) 925 468 845 2,960
−Removed: Basic earnings per share (4) $ 0.81 $ 0.41 $ 0.75 $ 2.62
−Removed: Diluted earnings per share (4) 0.80 0.41 0.74 2.58
−Removed: Revenues (3) $ 4,842 $ 4,982 $ 9,635 $ 4,814
−Removed: Operating income (3) 710 940 5,317 701
−Removed: Net income (3) 1,068 663 2,149 506
−Removed: Basic earnings per share (4) $ 0.88 $ 0.55 $ 1.77 $ 0.42
−Removed: Diluted earnings per share (4) 0.87 0.55 1.75 0.42
−Removed: (1) Amounts, other than per share amounts, are rounded to millions each quarter.
−Removed: Therefore, the sum of the quarterly amounts may not equal the annual amounts reported.
−Removed: (2) Revenues, operating income and net income in the fourth quarter of fiscal 2020 included $ 1.8 billion resulting from the settlement of our prior dispute with Huawei.
−Removed: Net income in the second quarter of fiscal 2020 was impacted by $ 265 million in non-marketable investment impairments due in part from the impact that the COVID-19 pandemic had on certain of our investees.
−Removed: (3) Revenues, operating income and net income in the third quarter of fiscal 2019 included $ 4.7 billion resulting from the settlement with Apple and its contract manufacturers.
−Removed: Operating income and net income in the third quarter of fiscal 2019 were impacted by a $ 275 million charge related to the 2019 EC Fine.
−Removed: Net income in the first quarter of fiscal 2019 was impacted by an income tax benefit of $ 570 million due to establishing new U.S.
−Removed: net deferred tax assets from making certain check-the-box elections.
−Removed: Net income in the third quarter of fiscal 2019 was impacted by a $ 2.5 billion charge to income tax expense resulting from the derecognition of a deferred tax asset related to the distributed intellectual property.
−Removed: (4) Earnings per share and earnings per share are computed independently for each quarter and the full year based upon respective average shares outstanding.
−Removed: Therefore, the sum of the quarterly earnings per share amounts may not equal the annual amounts reported.
+Added: Subsequent Events
+Added: In October 2021, we and SSW Partners, a New York-based investment partnership, entered into a definitive agreement (the Merger Agreement) to acquire Veoneer, Inc.
+Added: (Veoneer) for $ 37.00 per share in cash, which values the estimated total cash consideration to be paid to Veoneer’s shareholders, inclusive of amounts expected to be paid at closing for Veoneer’s outstanding equity awards and convertible senior notes due 2024, at approximately $ 4.5 billion.
+Added: At closing, SSW Partners will acquire all of the outstanding capital stock of Veoneer, shortly after which it will sell Veoneer’s Arriver business to Qualcomm and retain Veoneer’s Tier-1 automotive supplier businesses.
+Added: Following close of the Arriver business sale, we intend to incorporate Arriver’s computer vision, drive policy and driver assistance technologies into our Snapdragon automotive platform to deliver an open and competitive ADAS (advanced driver assistance systems) platform for automakers and Tier-1 automotive suppliers.
+Added: The acquisition is subject to a number of conditions, including receipt of United States and other regulatory approvals and the approval of Veoneer’s shareholders, and is not required to be completed by Qualcomm and SSW Partners prior to April 4, 2022.
+Added: Subject to the satisfaction of these conditions, the acquisition is expected to close in 2022.
+Added: We will fund substantially all of the cash consideration that SSW Partners will pay to Veoneer’s shareholders in exchange for (i) our right to acquire, and SSW Partners’ obligation to sell to us, Veoneer’s Arriver business and (ii) our right to receive a portion of the proceeds upon the sale of Veoneer’s Tier-1 automotive supplier businesses by SSW Partners.
+Added: In addition, we will provide a loan facility (or guarantee amounts provided by a third party) that provides financing to Veoneer to support the Arriver business, to the extent requested by Veoneer in the event that the acquisition has not closed, for the quarter commencing April 1, 2022 and each of the two subsequent quarters, of $ 120 million per quarter (up to $ 360 million in the aggregate), which amounts may be forgiven in certain circumstances in which the Merger Agreement is terminated.
+Added: An additional $ 120 million for the first quarter of calendar 2023 may be provided under the loan facility if the final outside date, as defined in the Merger Agreement is extended to April 4, 2023.
+Added: In accordance with the Merger Agreement, we paid to Magna International Inc.
+Added: (Magna) a termination fee of $ 110 million in October 2021 on behalf of Veoneer in connection with the termination of the previously announced agreement and plan of merger, dated as of July 22, 2021, by and among Magna and Veoneer.
QUALCOMM Incorporated
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.