8-KEarnings & ResultsExhibits & Filings

QUALCOMM INC/DE 8-K Report, Financial Results (Jul 20, 2005)

Filed July 20, 2005For Securities:QCOM

Summary

QUALCOMM Incorporated (QCOM) filed an 8-K on July 20, 2005, to announce its third fiscal quarter ended June 26, 2005, financial results. The primary focus of this filing is the extensive use of pro forma financial measurements by management to present the company's performance. These pro forma figures are presented to offer a clearer view of ongoing core operations by excluding the QUALCOMM Strategic Initiatives (QSI) segment, which involves strategic investments with varying exit strategies. Furthermore, the company is providing pro forma results to allow for comparable analysis. This includes adjustments for a new royalty recording method, the exclusion of one-time tax benefits from fiscal 2004 to highlight the ongoing tax rate, and the inclusion of marketable securities in pro forma cash flow to better reflect liquidity. Investors are advised to consider these non-GAAP measures alongside GAAP results, as they are intended to provide supplemental insights into operational performance and liquidity.

Key Highlights

  • 1QUALCOMM Incorporated (QCOM) reported its third fiscal quarter financial results on July 20, 2005.
  • 2The company heavily utilizes pro forma financial measurements in its reporting.
  • 3Pro forma results are presented to exclude the QUALCOMM Strategic Initiatives (QSI) segment, focusing on core businesses like QCT, QTL, and QWI.
  • 4Adjustments are made to facilitate comparable analysis, including changes in royalty recording methods.
  • 5One-time tax benefits from fiscal year 2004 are excluded from fiscal 2005 pro forma results for clarity on the ongoing tax rate.
  • 6Pro forma cash flow includes marketable securities to provide a more comprehensive view of the company's liquidity, as management considers these readily available assets.
  • 7Investors are encouraged to review these non-GAAP measures in conjunction with GAAP financial statements.

Frequently Asked Questions

QUALCOMM is using pro forma financial results to provide investors and analysts with a clearer view of its ongoing core operating businesses. This presentation excludes the QUALCOMM Strategic Initiatives (QSI) segment, which involves strategic investments, and also adjusts for changes in accounting methods (like royalty recording) and one-time events (like tax benefits) to ensure comparability across periods and better reflect operational performance and liquidity.

The QSI segment represents strategic investments that have varying exit strategies and can cause fluctuations in value unrelated to QUALCOMM's core operational performance. By excluding QSI, the company aims to present a more representative view of the performance of its core businesses, such as QUALCOMM CDMA Technologies (QCT), QUALCOMM Technology Licensing (QTL), and QUALCOMM Wireless and Internet (QWI).

Under GAAP, marketable securities are often treated as inflows or outflows in the statement of cash flows as they are purchased or sold. However, QUALCOMM's management views certain marketable securities as liquid assets that are part of their cash management strategy, designed to increase yields. The pro forma cash flow presentation includes these marketable securities to better represent the company's overall liquidity, as they can be settled relatively quickly if needed, rather than treating their purchase and sale as operational cash movements.

No, investors should not rely solely on the pro forma financial information. The company explicitly states that these non-GAAP pro forma measures should be considered in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The pro forma figures are intended to provide supplemental insights and facilitate comparison.