Summary
QUALCOMM Incorporated (QCOM) filed an 8-K report on April 19, 2006, to announce its second-quarter financial results for the period ending March 26, 2006. The report primarily highlights the company's use of pro forma financial information, which management employs to assess and benchmark operational performance on a consistent and comparable basis. This pro forma presentation excludes items such as the QUALCOMM Strategic Initiatives (QSI) segment, estimated share-based compensation, certain prior-year tax benefits, and acquired in-process R&D expenses. The company emphasizes that these exclusions are to provide a clearer view of core operating businesses and ongoing performance, free from episodic impacts and non-operational volatilities. Investors should note that while QCOM provides these pro forma figures to offer insight into management's view of operational performance and liquidity, they are non-GAAP measures. The company explicitly states that these pro forma results should be considered in addition to, not as a substitute for, GAAP financial measures. Key pro forma metrics discussed include revenues, operating income, net income, earnings per share, operating cash flow, and free cash flow. Management uses free cash flow, defined as operating cash flow less capital expenditures, to assess the cash available for business growth and shareholder value creation.
Key Highlights
- 1QCOM announced its second-quarter 2006 financial results on April 19, 2006.
- 2The company utilizes pro forma financial information for internal assessment and reporting of operational performance.
- 3Key exclusions from pro forma results include the QSI segment, share-based compensation, certain tax benefits, and acquired in-process R&D.
- 4Pro forma measures are used by management to evaluate core business segments like QCT, QLT, and Wireless & Internet.
- 5The company defines and uses 'free cash flow' (operating cash flow less capital expenditures) to measure cash available for growth and shareholder returns.
- 6Pro forma financial information, including pro forma cash flow including marketable securities, is presented as a non-GAAP measure.
- 7QCOM acknowledges that its pro forma measures may differ from those of other companies and recommends investors consider them alongside GAAP results.