Why is QUALCOMM providing financial results that exclude the QSI segment?

QUALCOMM is providing results excluding the QUALCOMM Strategic Initiatives (QSI) segment on a non-GAAP basis to offer investors a clearer view of its ongoing core operating businesses, such as QUALCOMM CDMA Technologies (QCT), QUALCOMM Technology Licensing (QTL), and QUALCOMM Wireless and Internet (QWI). The company believes this presentation better reflects the operational performance by excluding the impact of strategic investments with variable exit strategies.

What is the significance of the non-GAAP cash flow information presented?

The non-GAAP cash flow information presented includes marketable securities and excludes the QSI segment. QUALCOMM's management views certain marketable debt securities as liquid assets available to fund operations, even though they may not meet the strict GAAP definition of cash equivalents. This presentation is intended to provide a more helpful measure of the company's liquidity for investors.

Are these non-GAAP financial measures a replacement for GAAP measures?

No, QUALCOMM explicitly states that these non-GAAP financial measures should be considered in addition to, not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Reconciliations between the total QUALCOMM results and the results excluding QSI, as well as between total cash flow and the non-GAAP cash flow presentation, are provided in the press release.

What is the QSI segment?

The QSI segment refers to QUALCOMM's strategic investments. These are investments for which the company has exit strategies of varying durations. The financial results of this segment are excluded from the primary non-GAAP operational and liquidity metrics presented to allow for a more focused analysis of the company's core businesses.

QCOM 8-K SEC Disclosure

Summary

QUALCOMM Incorporated (QCOM) filed an 8-K on July 23, 2003, primarily to furnish a press release detailing its financial results for the third fiscal quarter ended June 29, 2003. A key aspect of this filing is the company's use of non-GAAP financial measures. QUALCOMM is presenting its results excluding the QUALCOMM Strategic Initiatives (QSI) segment to provide investors with a clearer view of its ongoing core operating businesses, such as QCT, QTL, and QWI. This approach aims to isolate the performance of its primary revenue-generating segments from the impact of strategic investments with variable exit strategies. Furthermore, the filing highlights QUALCOMM's presentation of non-GAAP cash flow information that includes marketable securities and excludes the QSI segment. The company believes this provides a more representative measure of its liquidity by treating certain marketable debt securities as liquid assets available for operations, even though they don't meet the strict GAAP definition of cash equivalents. Investors are advised to consider these non-GAAP figures alongside, but not as a substitute for, their GAAP counterparts, as reconciliations are provided in the press release.

Key Highlights

1QCOM filed an 8-K on July 23, 2003, furnishing its Q3 2003 earnings press release.
2The company is presenting financial results excluding its QUALCOMM Strategic Initiatives (QSI) segment on a non-GAAP basis.
3This non-GAAP presentation aims to offer a more representative view of the company's core operating businesses (QCT, QTL, QWI).
4QSI results relate to strategic investments with varying exit strategies, and their exclusion is intended to improve evaluation of operational performance.
5QUALCOMM is also providing non-GAAP cash flow information that includes marketable securities and excludes QSI.
6This enhanced cash flow view is presented to better reflect the company's liquidity and management's analysis of liquid assets.
7Reconciliations between total company results and the non-GAAP measures are provided in the accompanying press release.

QUALCOMM INC/DE 8-K Report (Jul 23, 2003)

Summary

Key Highlights

Frequently Asked Questions