Composition of Certain Financial Statement Items

Note 2. Composition of Certain Financial Statement Items



Accounts Receivable (in millions)
	December 27, 2015		September 27, 2015
Trade, net of allowances for doubtful accounts of $1 and $6, respectively	$	1,302	$	1,941
Long-term contracts	13		11
Other	8		12
	$	1,323	$	1,964

The decrease in accounts receivable was primarily due to the timing of integrated circuit shipments and the collection of payments from certain of the Company’s licensees.



Inventories (in millions)
	December 27, 2015		September 27, 2015
Raw materials	$	1	$	1
Work-in-process	458		550
Finished goods	757		941
	$	1,216	$	1,492



Other Current Liabilities (in millions)
	December 27, 2015		September 27, 2015
Customer incentives and other customer-related liabilities	$	2,188	$	1,894
Other	422		462
	$	2,610	$	2,356

Other Income, Costs and Expenses. In October 2015, the Company sold its wireless spectrum in the United Kingdom for $232 million in cash and $275 million in deferred payments due in 2020 to 2023, which were recorded at their present values in other assets. The Company recognized a gain on the sale of $380 million in the first quarter of fiscal 2016 in other income. Other income also included $54 million in restructuring and restructuring-related charges, which were partially offset by a $48 million gain on the sale of the Company’s business that provided augmented reality applications, both of which related to the Company’s Strategic Realignment Plan (Note 9).

Other expenses in the three months ended December 28, 2014 were attributable to a $69 million goodwill impairment charge related to the Company’s business that provides push-to-talk enablement services, which was partially offset by a $16 million gain on the sale of certain property, plant and equipment.



Investment Income, Net (in millions)
	Three Months Ended
	December 27, 2015			December 28, 2014
Interest and dividend income	$	136		$	134
Net realized gains on marketable securities	43			156
Net realized gains on other investments	6			10
Impairment losses on marketable securities	(49		)	(62		)
Impairment losses on other investments	(14		)	(3		)
Net (losses) gains on derivative instruments	(3		)	4
Equity in net losses of investees	(20		)	(4		)
	$	99		$	235

Income Taxes (Notes)	3 Months Ended
Income Taxes (Notes)	Dec. 27, 2015
Income Tax Disclosure [Abstract]
Income Taxes	Note 3. Income Taxes The Company estimates its annual effective income tax rate to be approximately 17% for fiscal 2016, which is less than its 19% effective income tax rate for fiscal 2015. Tax benefits from foreign income taxed at rates lower than rates in the United States are expected to be approximately 16% in fiscal 2016, compared to 14% in fiscal 2015. During the first quarter of fiscal 2016, the United States government permanently reinstated the federal research and development tax credit retroactively to January 1, 2015. As a result of the reinstatement, the Company recorded a tax benefit of $79 million in the first quarter of fiscal 2016 related to fiscal 2015. The annual effective tax rate for fiscal 2015 reflected the United States federal research and development tax credit generated through December 31, 2014, the date on which the credit previously expired. Further, the China National Development and Reform Commission (NDRC) imposed a fine of $975 million on the Company in the second quarter of fiscal 2015, which was not deductible for tax purposes and was substantially attributable to a foreign jurisdiction. The effective tax rate of 13% for the first quarter of fiscal 2016 was less than the estimated annual effective tax rate of 17% primarily as a result of the retroactive reinstatement of the United States federal research and development tax credit. Unrecognized tax benefits were $113 million and $40 million at December 27, 2015 and September 27, 2015, respectively. Certain of the Company’s existing tax positions are expected to continue to generate an increase in unrecognized tax benefits through fiscal 2016.

Stockholders' Equity (Notes)

3 Months Ended

Dec. 27, 2015

Stockholders' Equity Attributable to Parent [Abstract]

Stockholders' Equity

Note 4. Stockholders’ Equity

Changes in stockholders’ equity for the three months ended December 27, 2015 were as follows (in millions):



	Qualcomm Stockholders’ Equity			Noncontrolling Interests			Total Stockholders’ Equity
Balance at September 27, 2015	$	31,421		$	(7	)	$	31,414
Net income (loss)	1,498			(2		)	1,496
Other comprehensive loss	(126		)	—			(126		)
Common stock issued under employee benefit plans and related tax benefits	70			—			70
Share-based compensation	260			—			260
Tax withholdings related to vesting of share-based payments	(102		)	—			(102		)
Dividends	(730		)	—			(730		)
Stock repurchases	(2,050		)	—			(2,050		)
Issuance of subsidiary shares to noncontrolling interest	—			1			1
Balance at December 27, 2015	$	30,241		$	(8	)	$	30,233

Accumulated Other Comprehensive Income. Other comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources, other than net income and including foreign currency translation adjustments and unrealized gains and losses on marketable securities and derivative instruments. Changes in the components of accumulated other comprehensive income, net of income taxes, in Qualcomm stockholders’ equity during the three months ended December 27, 2015 were as follows (in millions):



	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 Gain (Loss) on Other Available-for-Sale Securities			Net Unrealized Gain (Loss) on Derivative Instruments		Total Accumulated Other Comprehensive Income
Balance at September 27, 2015	$	(160	)	$	4		$	297		$	54	$	195
Other comprehensive income (loss) before reclassifications	(14		)	(11		)	(109		)	1		(133		)
Reclassifications from accumulated other comprehensive income (loss)	1			(3		)	9			—		7
Other comprehensive income (loss)	(13		)	(14		)	(100		)	1		(126		)
Balance at December 27, 2015	$	(173	)	$	(10	)	$	197		$	55	$	69

Reclassifications from accumulated other comprehensive income related to available-for-sale securities of $6 million and $71 million for the three months ended December 27, 2015 and December 28, 2014, respectively, were recorded in investment income, net (Note 2).

Stock Repurchase Program. On March 9, 2015, the Company announced a stock repurchase program authorizing it to repurchase up to $15 billion of the Company’s common stock. The stock repurchase program has no expiration date. During the three months ended December 27, 2015 and December 28, 2014, the Company repurchased and retired 36,606,000 and 22,940,000 shares of common stock, respectively, for $2.05 billion and $1.66 billion, respectively, before commissions. At December 27, 2015, $4.9 billion remained authorized for repurchase under the Company’s stock repurchase program.

Dividends. Cash dividends announced in the three months ended December 27, 2015 and December 28, 2014 were $0.48 and $0.42 per share, respectively. During the three months ended December 27, 2015 and December 28, 2014, dividends charged to retained earnings were $730 million and $710 million, respectively. On January 12, 2016, the Company announced a cash dividend of $0.48 per share on the Company’s common stock, payable on March 23, 2016 to stockholders of record as of the close of business on March 2, 2016.

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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Debt (Notes)

3 Months Ended

Dec. 27, 2015

Debt Disclosure [Abstract]

Debt

Note 5. Debt

Revolving Credit Facility. The Company has a Revolving Credit Facility that provides for unsecured revolving facility loans, swing line loans and letters of credit in an aggregate amount of up to $4.0 billion, expiring in February 2020. The Revolving Credit Facility requires that the Company 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 the Revolving Credit Facility, of not less than three to one at the end of each fiscal quarter. At December 27, 2015 and September 27, 2015, the Company was in compliance with the covenants, and the Company had not borrowed any funds under the Revolving Credit Facility.

Commercial Paper Program. The Company has an unsecured commercial paper program, which provides for the issuance of up to $4.0 billion of commercial paper. Net proceeds from this program are used for general corporate purposes. Maturities of commercial paper can range from 1 day to up to 397 days. At December 27, 2015 and September 27, 2015, the Company had $1.0 billion of outstanding commercial paper recorded as short-term debt with weighted-average interest rates of 0.25% and 0.19%, respectively, which included fees paid to the commercial paper dealers, and weighted-average remaining days to maturity of 30 days and 38 days, respectively. The carrying value of the outstanding commercial paper approximated its estimated fair value at December 27, 2015 and September 27, 2015.

Long-term Debt. The following table provides a summary of the Company’s long-term debt (dollar amounts in millions):



	December 27, 2015				September 27, 2015
	Amount			Effective Rate	Amount			Effective Rate
Floating-rate notes due May 18, 2018	$	250		0.70%	$	250		0.66%
Floating-rate notes due May 20, 2020	250			0.98%	250			0.94%
Fixed-rate 1.40% notes due May 18, 2018	1,250			0.71%	1,250			0.43%
Fixed-rate 2.25% notes due May 20, 2020	1,750			1.71%	1,750			1.62%
Fixed-rate 3.00% notes due May 20, 2022	2,000			2.14%	2,000			2.08%
Fixed-rate 3.45% notes due May 20, 2025	2,000			3.46%	2,000			3.46%
Fixed-rate 4.65% notes due May 20, 2035	1,000			4.74%	1,000			4.74%
Fixed-rate 4.80% notes due May 20, 2045	1,500			4.71%	1,500			4.71%
Total principal	10,000				10,000
Unamortized discount, including debt issuance costs	(62		)		(63		)
Hedge accounting fair value adjustments	12				32
Total long-term debt	$	9,950			$	9,969

The interest rate on the floating rate notes due in 2018 and 2020 for a particular interest period will be a per annum rate equal to three-month LIBOR as determined on the interest determination date plus 0.27% and 0.55%, respectively. Interest is payable in arrears quarterly for the floating-rate notes and semi-annually for the fixed-rate notes. The Company may redeem the 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. The Company may not redeem the floating-rate notes prior to maturity. The Company is not subject to any financial covenants under the notes nor any covenants that would prohibit the Company from incurring additional indebtedness ranking equal to the notes, paying dividends, issuing securities or repurchasing securities issued by it or its subsidiaries. At December 27, 2015 and September 27, 2015, the aggregate fair value of the notes, based on Level 2 inputs, was approximately $9.6 billion.

The Company has entered into interest rate swaps with an aggregate notional amount of $3.0 billion, which effectively converted all of the fixed-rate notes due in 2018 and approximately 43% and 50% of the fixed-rate notes due in 2020 and 2022, respectively, into floating-rate notes. The net gains and losses on the interest rate swaps, as well as the offsetting gains or losses on the related fixed-rate notes attributable to the hedged risks, are recognized in earnings as interest expense in the current period.

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. Cash interest paid related to the Company’s commercial paper program and long-term debt, net of cash received from the related interest rate swaps, was $128 million during the three months ended December 27, 2015. No commercial paper or long-term debt was outstanding in the three months ended December 28, 2014.

Commitments and Contingencies (Notes)	3 Months Ended
Commitments and Contingencies (Notes)	Dec. 27, 2015
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Note 6. Commitments and Contingencies Legal Proceedings. ParkerVision, Inc. v. QUALCOMM Incorporated: On July 20, 2011, ParkerVision filed a complaint against the Company in the United States District Court for the Middle District of Florida alleging that certain of the Company’s products infringe seven of its patents alleged to cover direct down-conversion receivers. ParkerVision’s complaint sought damages and injunctive and other relief. Subsequently, ParkerVision narrowed its allegations to assert only four patents. On October 17, 2013, the jury returned a verdict finding all asserted claims of the four at-issue patents to be infringed and finding that none of the asserted claims are invalid. On October 24, 2013, the jury returned a separate verdict assessing total past damages of $173 million and finding that the Company’s infringement was not willful. The Company recorded the verdict amount in fiscal 2013 as a charge in other expenses. On June 20, 2014, the court granted the Company’s motion to overturn the infringement verdict, denied the Company’s motion to overturn the invalidity verdict and denied ParkerVision’s motions for injunctive relief and ongoing royalties as moot. The court then entered judgment in the Company’s favor. As a result of the court’s judgment, the Company is not liable for any damages to ParkerVision, and therefore, the Company reversed all recorded amounts related to the damages verdict in fiscal 2014. On June 25, 2014, ParkerVision filed a notice of appeal with the court. The Court of Appeals for the Federal Circuit heard the appeal on May 8, 2015 and issued a decision on July 31, 2015. The decision affirmed the District Court’s finding of non-infringement and granted in part the Company’s cross-appeal, holding 10 of the 11 asserted claims invalid. A subsequent Petition for Rehearing by ParkerVision was denied on October 2, 2015. On December 16, 2015, ParkerVision was granted an extension of the deadline to file a petition requesting that the United States Supreme Court hear ParkerVision’s appeal of the Federal Circuit decision. The petition is now due on January 29, 2016. On May 1, 2014, ParkerVision filed another complaint against the Company in the United States District Court for the Middle District of Florida alleging patent infringement. On August 21, 2014, ParkerVision amended the compliant, now captioned ParkerVision, Inc. v. QUALCOMM Incorporated, Qualcomm Atheros, Inc., HTC Corporation, HTC America, Inc., Samsung Electronics Co., LTD., Samsung Electronics America, Inc. and Samsung Telecommunications America, LLC, broadening the allegations. ParkerVision alleged that the Company infringes 11 additional patents and seeks damages and injunctive and other relief. On September 25, 2015, ParkerVision filed a motion with the court to sever some claims against the Company and all other defendants into a separate lawsuit. In addition, on December 3, 2015, ParkerVision dismissed six patents from the lawsuit and granted the Company and all other defendants a covenant not to assert those patents against any existing products. The close of discovery is scheduled for April 2016, and the trial is scheduled for November 2016. A claim construction ruling and a ruling on ParkerVision’s severance motion are still pending. On December 14, 2015, ParkerVision filed a third complaint against the Company in the United States District Court for the Middle District of Florida alleging patent infringement. Apple Inc., Samsung Electronics Co., LTD., Samsung Electronics America, Inc., Samsung Telecommunications America, LLC, Samsung Semiconductor, Inc., LG Electronics, Inc., LG Electronics U.S.A., Inc. and LG Electronics MobileComm U.S.A., Inc. are also named defendants. The complaint asserts four additional patents and seeks damages and other relief. On December 15, 2015, ParkerVision filed a complaint with the United States International Trade Commission (ITC) pursuant to Section 337 of the Tariff Act of 1930 against the same parties asserting the same four patents. The complaint seeks an exclusion order barring the importation of products that use either of two Company transceivers or one Samsung transceiver and a cease and desist order preventing the Company and the other defendants from carrying out commercial activities within the United States related to such products. On January 13, 2016, the Company served its answer to the District Court complaint. On January 15, 2016, the ITC instituted an investigation. The ITC has not yet determined a target date for concluding its investigation. Nvidia Corporation v. QUALCOMM Incorporated: On September 4, 2014, Nvidia filed a complaint in the United States District Court for the District of Delaware and also with the ITC pursuant to Section 337 of the Tariff Act of 1930 against the Company, Samsung Electronics Co., Ltd. and other Samsung entities, alleging infringement of seven patents related to graphics processing. In the ITC complaint, Nvidia seeks an exclusion order barring the importation of certain consumer electronics and display device products, including some that incorporate the Company’s chipset products, that infringe, induce infringement and/or contribute to the infringement of at least one of the seven asserted graphics processing patents as well as a cease and desist order preventing the Company from carrying out commercial activities within the United States related to such products. In the District Court complaint, Nvidia is seeking an award of damages for the infringement of the asserted patents, a finding that such infringement is willful and treble damages for such willful infringement, and an order permanently enjoining the Company from infringing the asserted patents. The ITC instituted an investigation into Nvidia’s allegations on October 6, 2014. Nvidia later narrowed the case to three asserted patents. On October 9, 2015, the Administrative Law Judge issued an Initial Determination finding no violation of Section 337 because none of the three patents were both valid and infringed. On October 22, 2015, the Administrative Law Judge issued a recommendation that, if the ITC were to find any violation of Section 337 in the investigation, the ITC should issue a limited exclusion order directed at Samsung’s accused products and a cease and desist order against Samsung but not the Company. On October 26, 2015, Nvidia filed a petition requesting the ITC to review the Initial Determination as to two of the asserted patents, but is no longer pursuing infringement allegations with respect to the third patent. On December 14, 2015, the ITC issued its decision not to review the Initial Determination of the Administrative Law Judge. This made final the determination that the Company did not violate Section 337. Therefore, neither an exclusion order nor a cease and desist order were issued. Nvidia has until February 12, 2016 to file a notice of appeal of the ITC’s determination. The District Court case was stayed on October 23, 2014 pending completion of the ITC investigation, including appeals. LG Electronics, Inc. (LGE) Arbitration: In December 2015, LGE filed an arbitration demand with the International Chamber of Commerce alleging that it overpaid royalties on certain CDMA (including WCDMA) subscriber units based on the alleged effect of specific provisions in its license agreement, and that the Company breached its license agreement with LGE, as well as certain implied covenants. The arbitration demand seeks determination and return of the overpayment and determination of the ongoing royalties owed by LGE. The Company intends to respond to the arbitration demand, denying the allegations and requesting judgment in its favor on all claims. Although the Company believes LGE’s claims are without merit, it has deferred the recognition of revenue related to CDMA subscriber unit royalties reported and paid by LGE in the first quarter of fiscal 2016 because, among other reasons, the matter has been submitted to arbitration for resolution. Japan Fair Trade Commission (JFTC) Complaint: The JFTC received unspecified complaints alleging that the Company’s business practices are, in some way, a violation of Japanese law. On September 29, 2009, the JFTC issued a cease and desist order concluding that the Company’s Japanese licensees were forced to cross-license patents to the Company on a royalty-free basis and were forced to accept a provision under which they agreed not to assert their essential patents against the Company’s other licensees who made a similar commitment in their license agreements with the Company. The cease and desist order seeks to require the Company to modify its existing license agreements with Japanese companies to eliminate these provisions while preserving the license of the Company’s patents to those companies. The Company disagrees with the conclusions that it forced its Japanese licensees to agree to any provision in the parties’ agreements and that those provisions violate the Japanese Antimonopoly Act. The Company has invoked its right under Japanese law to an administrative hearing before the JFTC. In February 2010, the Tokyo High Court granted the Company’s motion and issued a stay of the cease and desist order pending the administrative hearing before the JFTC. The JFTC has held hearings on 31 different dates, with the next hearing scheduled for February 25, 2016. Korea Fair Trade Commission (KFTC) Complaint: On January 4, 2010, the KFTC issued a written decision finding that the Company had violated Korean law by offering certain discounts and rebates for purchases of its CDMA chipsets and for including in certain agreements language requiring the continued payment of royalties after all licensed patents have expired. The KFTC levied a fine, which the Company paid and recorded as an expense in fiscal 2010. The Company appealed to the Seoul High Court, and on June 19, 2013, the Seoul High Court affirmed the KFTC’s decision. On July 4, 2013, the Company filed an appeal with the Korea Supreme Court. There have been no material developments during fiscal 2016 with respect to this matter. Korea Fair Trade Commission (KFTC) Investigation: On March 17, 2015, the KFTC notified the Company that it is conducting an investigation of the Company relating to the Korean Monopoly Regulation and Fair Trade Act (MRFTA). On November 13, 2015, the Company received a case Examiner’s Report (ER) prepared by the KFTC’s investigative staff. The ER alleges, among other things, that the Company is in violation of Korean competition law by licensing its patents exhaustively only to device manufacturers and requiring that its chipset customers be licensed to the Company’s intellectual property. The ER also alleges that the Company obtains certain terms, including royalty terms, that are unfair or unreasonable in its license agreements through negotiations that do not conform to Korean competition law. The ER proposes remedies including modifications to certain business practices and monetary penalties. It remains difficult to predict the outcome of this matter. The Company believes that its business practices do not violate the MRFTA. The Company continues to cooperate with the KFTC as it conducts its investigation. Icera Complaint to the European Commission (Commission): On June 7, 2010, the Commission notified and provided the Company with a redacted copy of a complaint filed with the Commission by Icera, Inc. (subsequently acquired by Nvidia Corporation) alleging that the Company has engaged in anticompetitive activity. The Company was asked by the Commission to submit a preliminary response to the portions of the complaint disclosed to it, and the Company submitted its response in July 2010. Subsequently, the Company has provided and continues to provide additional documents and information as requested by the Commission. On July 16, 2015, the Commission announced that it had initiated formal proceedings in this matter. On December 8, 2015, the Commission announced that it had issued a Statement of Objections expressing its preliminary view that between 2009 and 2011, the Company engaged in predatory pricing by selling certain baseband chipsets to two customers at prices below cost, with the intention of hindering competition. A Statement of Objections informs the subject of the investigation of the allegations against it and provides an opportunity to respond to such allegations. It is not a determination of the final outcome of the investigation. If a violation is found, a broad range of remedies is potentially available to the Commission, including imposing a fine and/or injunctive relief prohibiting or restricting certain business practices. It is difficult to predict the outcome of this matter or what remedies, if any, may be imposed by the Commission. The Company believes that its business practices do not violate the EU competition rules. European Commission (Commission) Investigation: On October 15, 2014, the Commission notified the Company that it is conducting an investigation of the Company relating to Articles 101 and/or 102 of the Treaty on the Functioning of the European Union (TFEU). On July 16, 2015, the Commission announced that it had initiated formal proceedings in this matter. On December 8, 2015, the Commission announced that it had issued a Statement of Objections expressing its preliminary view that since 2011 the Company has paid significant amounts to a customer on condition that it exclusively use the Company’s baseband chipsets in its smartphones and tablets. This conduct has allegedly reduced the customer’s incentives to source chipsets from the Company’s competitors and harmed competition and innovation for certain baseband chipsets. A Statement of Objections informs the subject of the investigation of the allegations against it and provides an opportunity to respond to such allegations. It is not a determination of the final outcome of the investigation. If a violation is found, a broad range of remedies is potentially available to the Commission, including imposing a fine and/or injunctive relief prohibiting or restricting certain business practices. It is difficult to predict the outcome of this matter or what remedies, if any, may be imposed by the Commission. The Company believes that its business practices do not violate the EU competition rules. Securities and Exchange Commission (SEC) Formal Order of Private Investigation and Department of Justice Investigation: On September 8, 2010, the Company was notified by the SEC’s Los Angeles Regional office of a formal order of private investigation. The Company understands that the investigation arose from a “whistleblower’s” allegations made in December 2009 to the audit committee of the Company’s Board of Directors and to the SEC. In 2010, the audit committee completed an internal review of the allegations with the assistance of independent counsel and independent forensic accountants. This internal review into the whistleblower’s allegations and related accounting practices did not identify any errors in the Company’s financial statements. On January 27, 2012, the Company learned that the U.S. Attorney’s Office for the Southern District of California/Department of Justice (collectively, DOJ) had begun an investigation regarding the Company’s compliance with the Foreign Corrupt Practices Act (FCPA). As discussed below, FCPA compliance is also the focus of the SEC investigation. The audit committee conducted an internal review of the Company’s compliance with the FCPA and its related policies and procedures with the assistance of independent counsel and independent forensic accountants. The audit committee has completed this comprehensive review, made findings consistent with the Company’s findings described below and suggested enhancements to the Company’s overall FCPA compliance program. In part as a result of the audit committee’s review, the Company has made and continues to make enhancements to its FCPA compliance program, including implementation of the audit committee’s recommendations. As previously disclosed, the Company discovered, and as a part of its cooperation with these investigations informed the SEC and the DOJ of, instances in which special hiring consideration, gifts or other benefits (collectively, benefits) were provided to several individuals associated with Chinese state-owned companies or agencies. Based on the facts currently known, the Company believes the aggregate monetary value of the benefits in question to be less than $250,000, excluding employment compensation. On March 13, 2014, the Company received a Wells Notice from the SEC’s Los Angeles Regional Office indicating that the staff has made a preliminary determination to recommend that the SEC file an enforcement action against the Company for violations of the anti-bribery, books and records and internal control provisions of the FCPA. The bribery allegations relate to benefits offered or provided to individuals associated with Chinese state-owned companies or agencies. The Wells Notice indicated that the recommendation could involve a civil injunctive action and could seek remedies that include disgorgement of profits, the retention of an independent compliance monitor to review the Company’s FCPA policies and procedures, an injunction, civil monetary penalties and prejudgment interest. A Wells Notice is not a formal allegation or finding by the SEC of wrongdoing or violation of law. Rather, the purpose of a Wells Notice is to give the recipient an opportunity to make a “Wells submission” setting forth reasons why the proposed enforcement action should not be filed and/or bringing additional facts to the SEC’s attention before any decision is made by the SEC as to whether to commence a proceeding. On April 4, 2014 and May 29, 2014, the Company made Wells submissions to the staff of the Los Angeles Regional Office explaining why the Company believes it has not violated the FCPA and therefore enforcement action is not warranted. On November 19, 2015, the DOJ notified the Company that it was terminating its investigation and would not pursue charges in this matter. The DOJ’s decision is independent of the SEC’s investigation, with which we continue to cooperate. Federal Trade Commission (FTC) Investigation: On September 17, 2014, the FTC notified the Company that it is conducting an investigation of the Company relating to Section 5 of the Federal Trade Commission Act (FTCA). The FTC has notified the Company that it is investigating conduct related to standard essential patents and pricing and contracting practices with respect to baseband processors and related products. If a violation of Section 5 is found, a broad range of remedies is potentially available to the FTC, including imposing a fine or requiring modifications to the Company’s business practices. At this stage of the investigation, it is difficult to predict the outcome of this matter or what remedies, if any, may be imposed by the FTC. The Company believes that its business practices do not violate the FTCA. The Company continues to cooperate with the FTC as it conducts its investigation. Taiwan Fair Trade Commission (TFTC) Investigation: On December 4, 2015, the TFTC notified the Company that it is conducting an investigation into whether the Company’s patent licensing arrangements violate the Taiwan Fair Trade Act (TFTA). If a violation is found, a broad range of remedies is potentially available to the TFTC, including imposing a fine or requiring modifications to the Company’s business practices. At this stage of the investigation, it is difficult to predict the outcome of this matter or what remedies, if any, may be imposed by the TFTC. The Company believes that its business practices do not violate the TFTA. The Company continues to cooperate with the TFTC as it conducts its investigation. The Company will continue to vigorously defend itself in the foregoing matters. However, litigation and investigations are inherently uncertain. Accordingly, the Company cannot predict the outcome of these matters. Other than a nominal amount, the Company has not recorded any accrual at December 27, 2015 for contingent losses associated with these matters based on its belief that losses, while possible, are not probable. Further, any possible range of loss cannot be reasonably estimated at this time. The unfavorable resolution of one or more of these matters could have a material adverse effect on the Company’s business, results of operations, financial condition or cash flows. The Company is engaged in numerous other legal actions not described above arising in the ordinary course of its business and, while there can be no assurance, believes that the ultimate outcome of these other legal actions will not have a material adverse effect on its business, results of operations, financial condition or cash flows. Indemnifications. The Company generally does not indemnify its customers and licensees for losses sustained from infringement of third-party intellectual property rights. However, the Company is contingently liable under certain product sales, services, license and other agreements to indemnify certain customers against certain types of liability and/or damages arising from qualifying claims of patent, copyright, trademark or trade secret infringement by products or services sold or provided by the Company. The Company’s obligations under these agreements may be limited in terms of time and/or amount, and in some instances, the Company may have recourse against third parties for certain payments made by the Company. Through December 27, 2015, the Company has received a number of claims from its direct and indirect customers and other third parties for indemnification under such agreements with respect to alleged infringement of third-party intellectual property rights by its products. Reimbursements under indemnification arrangements have not been material to the Company’s consolidated financial statements. The Company has not recorded any accrual for contingent liabilities at December 27, 2015 associated with these indemnification arrangements, other than nominal amounts, based on the Company’s belief that additional liabilities, while possible, are not probable. Further, any possible range of loss cannot be reasonably estimated at this time. Purchase Obligations. The Company has agreements with suppliers and other parties to purchase inventory, other goods and services and long-lived assets. Obligations under these agreements at December 27, 2015 for the remainder of fiscal 2016 and for each of the subsequent four years from fiscal 2017 through 2020 were $3.2 billion, $891 million, $739 million, $718 million and $196 million, respectively, and $14 million thereafter. Of these amounts, for the remainder of fiscal 2016 and for each of the subsequent four years from fiscal 2017 through 2020, commitments to purchase integrated circuit product inventories comprised $2.6 billion, $742 million, $698 million, $699 million and $177 million, respectively, and there were no purchase commitments thereafter. Integrated circuit product inventory obligations represent purchase commitments for semiconductor die, finished goods and manufacturing services, such as wafer bump, probe, assembly and final test. Under the Company’s manufacturing relationships with its 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. Operating Leases. The Company leases certain of its land, facilities and equipment under noncancellable operating leases, with terms ranging from less than one year to 21 years and with provisions in certain leases for cost-of-living increases. Future minimum lease payments at December 27, 2015 for the remainder of fiscal 2016 and for each of the subsequent four years from fiscal 2017 through 2020 were $75 million, $78 million, $45 million, $30 million and $20 million, respectively, and $27 million thereafter. Other Commitments. At December 27, 2015, the Company was committed to fund certain strategic investments up to $431 million. Of this amount, $197 million is expected to be funded in the remainder of fiscal 2016. The remaining commitments represent the maximum amounts that do not have fixed funding dates and/or are subject to certain conditions. Actual funding may be in lesser amounts or not at all.

Segment Information (Notes)

3 Months Ended

Dec. 27, 2015

Segment Reporting [Abstract]

Segment Information

Note 7. Segment Information

The Company is organized on the basis of products and services. The Company conducts business primarily through two reportable segments: QCT (Qualcomm CDMA Technologies) and QTL (Qualcomm Technology Licensing), and its QSI (Qualcomm Strategic Initiatives) reportable segment makes strategic investments and includes revenues and related costs associated with development contracts with an equity method investee. The Company also has nonreportable segments, including its small cells, data center and other wireless technology and service initiatives.

The Company evaluates the performance of its segments based on earnings (loss) before income taxes (EBT) from continuing operations. Segment EBT includes the allocation of certain corporate expenses to the segments, including depreciation and amortization expense related to unallocated corporate assets. Certain income and charges are not allocated to segments in the Company’s management reports because they are not considered in evaluating the segments’ operating performance. Unallocated income and charges include certain interest expense; certain net investment income; certain share-based compensation; 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. Additionally, unallocated charges include amortization and impairment of certain intangible assets, recognition of the step-up of inventories to fair value and certain other acquisition-related charges, third-party acquisition and integration services costs and certain other items, which may include major restructuring and restructuring-related costs, goodwill and long-lived asset impairment charges and litigation settlements and/or damages.

Segment assets are comprised of accounts receivable and inventories for all reportable segments other than QSI. QSI segment assets include certain marketable securities, notes receivable, other investments and all assets of consolidated subsidiaries included in QSI. The increase in QSI assets was primarily a result of a receivable that was recorded in connection with the sale of wireless spectrum during the first quarter of fiscal 2016 (Note 2). 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 securities, property, plant and equipment, deferred tax assets, intangible assets and assets of nonreportable segments.

The table below presents revenues, EBT and total assets for reportable segments (in millions):



	QCT		QTL		QSI			Reconciling Items			Total
For the three months ended
December 27, 2015
Revenues	$	4,096	$	1,607	$	9		$	63		$	5,775
EBT	590		1,339		359			(578		)	1,710
December 28, 2014
Revenues	$	5,242	$	1,816	$	—		$	41		$	7,099
EBT	1,146		1,579		(1		)	(426		)	2,298
Total assets
December 27, 2015	2,132		346		924			46,827			50,229
September 27, 2015	2,923		438		812			46,623			50,796

Reconciling items in the previous table were as follows (in millions):



	Three Months Ended
	December 27, 2015			December 28, 2014
Revenues
Nonreportable segments	$	64		$	43
Intersegment eliminations	(1		)	(2		)
	$	63		$	41
EBT
Unallocated cost of equipment and services revenues	$	(150	)	$	(79	)
Unallocated research and development expenses	(216		)	(210		)
Unallocated selling, general and administrative expenses	(127		)	(150		)
Unallocated other expense, net	(6		)	(69		)
Unallocated interest expense	(70		)	—
Unallocated investment income, net	114			231
Nonreportable segments	(124		)	(148		)
Intersegment eliminations	1			(1		)
	$	(578	)	$	(426	)

Unallocated other expense for the three months ended December 27, 2015 was comprised of net restructuring and restructuring-related charges related to the Company’s Strategic Realignment Plan (Note 9). Unallocated other expense for the three months ended December 28, 2014 was comprised of a goodwill impairment charge related to the Company’s business that provides push-to-talk enablement services to wireless operators (Note 2).

Unallocated acquisition-related expenses were comprised as follows (in millions):



	Three Months Ended
	December 27, 2015		December 28, 2014
Cost of equipment and services revenues	$	140	$	67
Research and development expenses	3		4
Selling, general and administrative expenses	29		12

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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Acquisitions (Notes)	3 Months Ended
Acquisitions (Notes)	Dec. 27, 2015
Acquisitions [Abstract]
Acquisitions	Note 8. Acquisitions During the three months ended December 27, 2015, the Company acquired three businesses for total cash consideration of $407 million, net of cash acquired. Technology-based intangible assets recognized in the amount of $248 million are being amortized on a straight-line basis over a weighted-average useful life of five years. The Company recognized $172 million in goodwill related to these transactions, all of which was assigned to the Company’s QCT segment and of which $23 million is expected to be deductible for tax purposes.

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

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Strategic Realignment Plan [Abstract]

Strategic Realignment Plan (Notes)

3 Months Ended

Dec. 27, 2015

Strategic Realignment Plan

Note 9. Strategic Realignment Plan

On July 22, 2015, the Company announced a Strategic Realignment Plan designed to improve execution, enhance financial performance and drive profitable growth as the Company works to create sustainable long-term value for stockholders. As part of this, among other actions, the Company is implementing a cost reduction plan, which includes a series of targeted reductions across the Company’s businesses, particularly in QCT, and a reduction to its annual share-based compensation grants. The Company expects these cost reduction initiatives to be substantially implemented by the end of fiscal 2016. During the three months ended December 27, 2015, the Company recorded restructuring charges of $51 million, including consulting costs of $25 million and severance costs of $23 million, restructuring-related charges of $3 million and a $48 million gain on the sale of the Company’s business that provided augmented reality applications, since such sale was executed in connection with the Strategic Realignment Plan, and all of which were included in other income (Note 2) in reconciling items (Note 7). Restructuring activities were initiated in the fourth quarter of fiscal 2015, and a total of $196 million in net restructuring and restructuring-related charges were incurred through the first quarter of fiscal 2016. In connection with this plan, the Company expects to incur additional restructuring and restructuring-related charges of approximately $100 million to $200 million, which primarily consist of severance and consulting costs. The remaining costs are expected to be incurred in fiscal 2016 and fiscal 2017, and the majority are expected to be settled in cash.

The restructuring accrual, a portion of which is included in payroll and other benefits related liabilities with the remainder included in other current liabilities, is expected to be substantially paid within the next 12 months. Changes in the restructuring accrual during the three months ended December 27, 2015 were as follows (in millions):



	Severance Costs			Other Costs			Total
Beginning balance of restructuring accrual	$	122		$	31		$	153
Additional costs	27			28			55
Cash payments	(15		)	(44		)	(59		)
Adjustments	(4		)	—			(4		)
Ending balance of restructuring accrual	$	130		$	15		$	145

Fair Value Measurements (Notes)

3 Months Ended

Dec. 27, 2015

Fair Value Measurements

Note 10. Fair Value Measurements

The following table presents the Company’s fair value hierarchy for assets and liabilities measured at fair value on a recurring basis at December 27, 2015 (in millions):



	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents	$	2,364	$	3,847	$	—	$	6,211
Marketable securities
U.S. Treasury securities and government-related securities	89		914		—		1,003
Corporate bonds and notes	—		15,810		—		15,810
Mortgage- and asset-backed and auction rate securities	—		1,743		174		1,917
Equity and preferred securities and equity funds	1,119		376		—		1,495
Debt funds	—		3,453		—		3,453
Total marketable securities	1,208		22,296		174		23,678
Derivative instruments	—		18		—		18
Other investments	306		—		—		306
Total assets measured at fair value	$	3,878	$	26,161	$	174	$	30,213
Liabilities
Derivative instruments	$	—	$	6	$	—	$	6
Other liabilities	306		—		—		306
Total liabilities measured at fair value	$	306	$	6	$	—	$	312

Activity between Levels of the Fair Value Hierarchy. There were no significant transfers between Level 1 and Level 2 during the three months ended December 27, 2015 and December 28, 2014. When a determination is made to classify an asset or liability within Level 3, the determination is based upon the significance of the unobservable inputs to the overall fair value measurement. The following table includes the activity for mortgage- and asset-backed and auction rate securities classified within Level 3 of the valuation hierarchy (in millions):



	Three Months Ended
	December 27, 2015			December 28, 2014
Beginning balance of Level 3	$	224		$	269
Total realized and unrealized gains or losses:
Included in other comprehensive income (loss)	(1		)	—
Purchases	—			29
Sales	(1		)	(24		)
Settlements	(36		)	(44		)
Transfers out of Level 3	(12		)	—
Ending balance of Level 3	$	174		$	230

The Company recognizes transfers into and out of levels within the fair value hierarchy at the end of the fiscal month in which the actual event or change in circumstances that caused the transfer occurs. Transfers out of Level 3 during the three months ended December 27, 2015 primarily consisted of debt securities with significant upgrades in credit ratings or for which there were observable inputs. There were no transfers into or out of Level 3 during the three months ended December 28, 2014.

Nonrecurring Fair Value Measurements. The Company measures certain assets at fair value on a nonrecurring basis. These assets include cost and equity method investments when they are deemed to be other-than-temporarily impaired, assets acquired and liabilities assumed in an acquisition or in a nonmonetary exchange, and property, plant and equipment and intangible assets that are written down to fair value when they are held for sale or determined to be impaired. During the three months ended December 28, 2014, the Company updated the business plans and related internal forecasts related to one of the Company’s businesses, resulting in an impairment charge to write down goodwill (Note 2). The Company determined the fair value using an income approach. The estimation of fair value and cash flows used in the fair value measurement required the use of significant unobservable inputs, and as a result, the fair value measurement was classified as Level 3. During the three months ended December 27, 2015 and December 28, 2014, the Company 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.

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Marketable Securities (Notes)

3 Months Ended

Dec. 27, 2015

Marketable Securities [Abstract]

Marketable Securities

Note 11. Marketable Securities

Marketable securities were comprised as follows (in millions):



	Current				Noncurrent
	December 27, 2015		September 27, 2015		December 27, 2015		September 27, 2015
Trading:
U.S. Treasury securities and government-related securities	$	—	$	—	$	61	$	12
Corporate bonds and notes	—		—		300		364
Mortgage- and asset-backed and auction rate securities	—		—		279		242
Total trading	—		—		640		618
Available-for-sale:
U.S. Treasury securities and government-related securities	160		156		782		691
Corporate bonds and notes	7,942		7,926		7,568		7,112
Mortgage- and asset-backed and auction rate securities	1,339		1,302		299		263
Equity and preferred securities and equity funds	174		377		1,321		1,253
Debt funds	—		—		2,870		2,909
Total available-for-sale	9,615		9,761		12,840		12,228
Fair value option:
Debt fund	—		—		583		780
Total marketable securities	$	9,615	$	9,761	$	14,063	$	13,626

The Company holds an investment in a debt fund for which the Company elected the fair value option because the Company is able to redeem its shares at net asset value, which is determined daily. The investment would have otherwise been recorded using the equity method. The debt fund has no single maturity date. At December 27, 2015, the Company had an effective ownership interest in the debt fund of 22%. Changes in fair value associated with this investment are recognized in net investment income. During the three months ended December 27, 2015 and December 28, 2014, the changes in fair value associated with this investment were negligible.

The Company classifies certain portfolios of debt securities that utilize derivative instruments to acquire or reduce foreign exchange, interest rate and/or equity, prepayment and credit risks as trading. Net losses recognized on debt securities classified as trading held at December 27, 2015 and December 28, 2014 were negligible and $12 million during the three months ended December 27, 2015 and December 28, 2014, respectively.

At December 27, 2015, the contractual maturities of available-for-sale debt securities were as follows (in millions):



Years to Maturity
Less Than One Year		One to Five Years		Five to Ten Years		Greater Than Ten Years		No Single Maturity Date		Total
$	3,142	$	10,947	$	1,721	$	643	$	4,507	$	20,960

Debt securities with no single maturity date included debt funds, mortgage- and asset-backed securities and auction rate securities.

The Company recorded realized gains and losses on sales of available-for-sale securities as follows (in millions):



	Gross Realized Gains		Gross Realized Losses			Net Realized Gains
For the three months ended
December 27, 2015	$	50	$	(12	)	$	38
December 28, 2014	180		(8		)	172

Available-for-sale securities were comprised as follows (in millions):



	Cost		Unrealized Gains		Unrealized Losses			Fair Value
December 27, 2015
Equity securities	$	1,266	$	251	$	(22	)	$	1,495
Debt securities (including debt funds)	21,234		132		(406		)	20,960
	$	22,500	$	383	$	(428	)	$	22,455
September 27, 2015
Equity securities	$	1,394	$	264	$	(28	)	$	1,630
Debt securities (including debt funds)	20,459		185		(285		)	20,359
	$	21,853	$	449	$	(313	)	$	21,989

The following table shows the gross unrealized losses and fair values of the Company’s investments in individual securities that are classified as available-for-sale and have been in a continuous unrealized loss position deemed to be temporary for less than 12 months and for more than 12 months, aggregated by investment category (in millions):



	December 27, 2015
	Less than 12 months					More than 12 months
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. Treasury securities and government-related securities	$	808	$	(12	)	$	20	$	(2	)
Corporate bonds and notes	10,466		(132		)	956		(108		)
Mortgage- and asset-backed and auction rate securities	1,220		(7		)	164		(1		)
Equity and preferred securities and equity funds	360		(22		)	2		—
Debt funds	1,923		(138		)	79		(6		)
	$	14,777	$	(311	)	$	1,221	$	(117	)



	September 27, 2015
	Less than 12 months					More than 12 months
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. Treasury securities and government-related securities	$	304	$	(4	)	$	—	$	—
Corporate bonds and notes	7,656		(93		)	368		(62		)
Mortgage- and asset-backed and auction rate securities	862		(3		)	108		(1		)
Equity and preferred securities and equity funds	392		(28		)	17		—
Debt funds	1,792		(117		)	124		(5		)
	$	11,006	$	(245	)	$	617	$	(68	)

At December 27, 2015, the Company concluded that the unrealized losses on its available-for-sale securities were temporary. Further, for common stock and for equity and debt funds with unrealized losses, the Company has the ability and the intent to hold such securities until they recover, which is expected to be within a reasonable period of time. For debt securities and preferred stock with unrealized losses, the Company does not have the intent to sell, nor is it more likely than not that the Company will be required to sell, such securities before recovery or maturity.

The ending balance of the credit loss portion of other-than-temporary impairments on debt securities held by the Company was $22 million and negligible at December 27, 2015 and December 28, 2014, respectively.

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs

The entire disclosure for investments in certain debt and equity securities.

+ References + Details

Subsequent Event (Notes)	3 Months Ended
Subsequent Event (Notes)	Dec. 27, 2015
Subsequent Event [Abstract]
Subsequent Events [Text Block]	Note 12. Subsequent Event In January 2016, the Company announced that it had reached agreement with TDK Corporation to form a joint venture, under the name RF360 Holdings Singapore Pte. Ltd., to enable delivery of radio frequency front-end (RFFE) modules and RF filters into fully integrated products for mobile devices and Internet of Things (IoT) applications, among others. The joint venture will initially be owned 51% by the Company and 49% by TDK. Certain intellectual property, patents and filter and module design and manufacturing assets will be carved out of existing TDK businesses and be acquired by the joint venture, with certain assets acquired by the Company. The purchase price of the Company’s interest in the joint venture and the assets to be transferred to the Company is $1.2 billion, to be adjusted for working capital, outstanding indebtedness and certain capital expenditures, among other things. Additionally, the Company has the option to acquire (and TDK has an option to sell) TDK’s interest in the joint venture for $1.15 billion 30 months after the closing date. TDK will be entitled to up to a total of $200 million in payments based on sales of RF filter functions over the three-year period after the closing date, which is a substitute for and in lieu of any right of TDK to receive any profit sharing, distributions, dividends or other payments of any kind or nature. The transaction is subject to receipt of regulatory approvals and other closing conditions and is expected to close by early 2017.

Basis of Presentation (Policies)	3 Months Ended
Basis of Presentation (Policies)	Dec. 27, 2015
Basis of Presentation [Abstract]
Fiscal Period, Policy	The Company operates and reports using a 52-53 week fiscal year ending on the last Sunday in September. Each of the three-month periods ended December 27, 2015 and December 28, 2014 included 13 weeks.
Use of Estimates, Policy	The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in the Company’s condensed consolidated financial statements and the accompanying notes. Actual results could differ from those estimates. Certain prior year amounts have been reclassified to conform to the current year presentation.
Earnings Per Share, Policy	Earnings Per Common Share. Basic earnings per common share are computed by dividing net income attributable to Qualcomm by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings per common share are computed by dividing net income attributable to Qualcomm by the combination of dilutive common share equivalents, comprised of shares issuable under the Company’s share-based compensation plans and shares subject to written put options and/or accelerated share repurchase agreements, if any, and the weighted-average number of common shares outstanding during the reporting period. Dilutive common share equivalents include the dilutive effect of in-the-money share equivalents, which are calculated based on the average share price for each period using the treasury stock method. Under the treasury stock method, the exercise price of an award, if any, the amount of compensation cost for future service that the Company has not yet recognized, if any, and the estimated tax benefits that would be recorded in paid-in capital when an award is settled, if any, are assumed to be used to repurchase shares in the current period. The dilutive common share equivalents, calculated using the treasury stock method, for the three months ended December 27, 2015 and December 28, 2014 were 14,430,000 and 25,003,000, respectively. Shares of common stock equivalents outstanding that were not included in the computation of diluted earnings per common share because the effect would be anti-dilutive or certain performance conditions were not satisfied at the end of the period were 1,172,000 and 1,470,000 during the three months ended December 27, 2015 and December 28, 2014, respectively.
Recent Accounting Pronouncements, Policy	Recent Accounting Pronouncements. In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, “Revenue from Contracts with Customers,” which outlines a comprehensive revenue recognition model and supersedes most current revenue recognition guidance. The new standard requires a company to recognize revenue upon transfer of goods or services to a customer at an amount that reflects the expected consideration to be received in exchange for those goods or services. ASU 2014-09 defines a five-step approach for recognizing revenue, which may require a company to use more judgment and make more estimates than under the current guidance. The new standard will be effective for the Company starting in the first quarter of fiscal 2019. The FASB will permit entities to adopt one year earlier if they choose (i.e., the original effective date). The new standard allows for two methods of adoption: (a) full retrospective adoption, meaning the standard is applied to all periods presented, or (b) modified retrospective adoption, meaning the cumulative effect of applying the new standard is recognized as an adjustment to the opening retained earnings balance. The Company does not intend to adopt the standard early and is in the process of determining the adoption method as well as the effects the adoption will have on its consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes,” which requires all deferred tax assets and liabilities to be classified as noncurrent on the balance sheet. The new accounting guidance is effective for annual reporting periods beginning after December 15, 2016 and interim periods therein. Early adoption is permitted as of the beginning of interim or annual reporting periods. The Company plans to adopt the standard prospectively in the second quarter of fiscal 2016. In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities,” which requires that (i) all equity investments, other than equity-method investments, in unconsolidated entities generally be measured at fair value through earnings and (ii) when the fair value option has been elected for financial liabilities, changes in fair value due to instrument-specific credit risk will be recognized separately in other comprehensive income. Additionally, the ASU changes the disclosure requirements for financial instruments. The new standard will be effective for the Company starting in the first quarter of fiscal 2019. Early adoption is permitted for certain provisions. The Company is in the process of determining the effects the adoption will have on its consolidated financial statements as well as whether to adopt certain provisions early.

Marketable Securities (Policies)	3 Months Ended
Marketable Securities (Policies)	Dec. 27, 2015
Marketable Securities [Abstract]
Marketable Securities, Trading Securities	The Company classifies certain portfolios of debt securities that utilize derivative instruments to acquire or reduce foreign exchange, interest rate and/or equity, prepayment and credit risks as trading

Basis of Presentation (Tables)

3 Months Ended

Dec. 27, 2015

Basis of Presentation [Abstract]

Total share-based compensation expense, related to all of the Company’s share-based awards, was comprised as follows (in millions):



	Three Months Ended
	December 27, 2015			December 28, 2014
Cost of equipment and services revenues	$	10		$	12
Research and development	165			174
Selling, general and administrative	72			87
Share-based compensation expense before income taxes	247			273
Related income tax benefit	(60		)	(44		)
	$	187		$	229

Composition of Certain Financial Statement Items (Tables)

3 Months Ended

Dec. 27, 2015

Other Current Liabilities

Accounts Receivable



Accounts Receivable (in millions)
	December 27, 2015		September 27, 2015
Trade, net of allowances for doubtful accounts of $1 and $6, respectively	$	1,302	$	1,941
Long-term contracts	13		11
Other	8		12
	$	1,323	$	1,964

Inventories



Inventories (in millions)
	December 27, 2015		September 27, 2015
Raw materials	$	1	$	1
Work-in-process	458		550
Finished goods	757		941
	$	1,216	$	1,492



Other Current Liabilities (in millions)
	December 27, 2015		September 27, 2015
Customer incentives and other customer-related liabilities	$	2,188	$	1,894
Other	422		462
	$	2,610	$	2,356

Investment Income, net



Investment Income, Net (in millions)
	Three Months Ended
	December 27, 2015			December 28, 2014
Interest and dividend income	$	136		$	134
Net realized gains on marketable securities	43			156
Net realized gains on other investments	6			10
Impairment losses on marketable securities	(49		)	(62		)
Impairment losses on other investments	(14		)	(3		)
Net (losses) gains on derivative instruments	(3		)	4
Equity in net losses of investees	(20		)	(4		)
	$	99		$	235

Stockholders' Equity (Tables)

3 Months Ended

Dec. 27, 2015

Stockholders' Equity Attributable to Parent [Abstract]

Changes in Stockholders Equity

Changes in stockholders’ equity for the three months ended December 27, 2015 were as follows (in millions):



	Qualcomm Stockholders’ Equity			Noncontrolling Interests			Total Stockholders’ Equity
Balance at September 27, 2015	$	31,421		$	(7	)	$	31,414
Net income (loss)	1,498			(2		)	1,496
Other comprehensive loss	(126		)	—			(126		)
Common stock issued under employee benefit plans and related tax benefits	70			—			70
Share-based compensation	260			—			260
Tax withholdings related to vesting of share-based payments	(102		)	—			(102		)
Dividends	(730		)	—			(730		)
Stock repurchases	(2,050		)	—			(2,050		)
Issuance of subsidiary shares to noncontrolling interest	—			1			1
Balance at December 27, 2015	$	30,241		$	(8	)	$	30,233

Accumulated Other Comprehensive Income

Accumulated Other Comprehensive Income. Other comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources, other than net income and including foreign currency translation adjustments and unrealized gains and losses on marketable securities and derivative instruments. Changes in the components of accumulated other comprehensive income, net of income taxes, in Qualcomm stockholders’ equity during the three months ended December 27, 2015 were as follows (in millions):



	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 Gain (Loss) on Other Available-for-Sale Securities			Net Unrealized Gain (Loss) on Derivative Instruments		Total Accumulated Other Comprehensive Income
Balance at September 27, 2015	$	(160	)	$	4		$	297		$	54	$	195
Other comprehensive income (loss) before reclassifications	(14		)	(11		)	(109		)	1		(133		)
Reclassifications from accumulated other comprehensive income (loss)	1			(3		)	9			—		7
Other comprehensive income (loss)	(13		)	(14		)	(100		)	1		(126		)
Balance at December 27, 2015	$	(173	)	$	(10	)	$	197		$	55	$	69

Debt (Tables)

3 Months Ended

Dec. 27, 2015

Debt Disclosure [Abstract]

Schedule of long-term debt

The following table provides a summary of the Company’s long-term debt (dollar amounts in millions):



	December 27, 2015				September 27, 2015
	Amount			Effective Rate	Amount			Effective Rate
Floating-rate notes due May 18, 2018	$	250		0.70%	$	250		0.66%
Floating-rate notes due May 20, 2020	250			0.98%	250			0.94%
Fixed-rate 1.40% notes due May 18, 2018	1,250			0.71%	1,250			0.43%
Fixed-rate 2.25% notes due May 20, 2020	1,750			1.71%	1,750			1.62%
Fixed-rate 3.00% notes due May 20, 2022	2,000			2.14%	2,000			2.08%
Fixed-rate 3.45% notes due May 20, 2025	2,000			3.46%	2,000			3.46%
Fixed-rate 4.65% notes due May 20, 2035	1,000			4.74%	1,000			4.74%
Fixed-rate 4.80% notes due May 20, 2045	1,500			4.71%	1,500			4.71%
Total principal	10,000				10,000
Unamortized discount, including debt issuance costs	(62		)		(63		)
Hedge accounting fair value adjustments	12				32
Total long-term debt	$	9,950			$	9,969

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6479336&loc=d3e64711-112823

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
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Reference 5: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=34725769&loc=d3e28878-108400

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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Reference 8: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 835
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Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6451184&loc=d3e28551-108399

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21521-112644

Revenues and EBT for reportable segments

Segment Information (Tables)

3 Months Ended

Dec. 27, 2015

Segment Reporting [Abstract]

The table below presents revenues, EBT and total assets for reportable segments (in millions):



	QCT		QTL		QSI			Reconciling Items			Total
For the three months ended
December 27, 2015
Revenues	$	4,096	$	1,607	$	9		$	63		$	5,775
EBT	590		1,339		359			(578		)	1,710
December 28, 2014
Revenues	$	5,242	$	1,816	$	—		$	41		$	7,099
EBT	1,146		1,579		(1		)	(426		)	2,298
Total assets
December 27, 2015	2,132		346		924			46,827			50,229
September 27, 2015	2,923		438		812			46,623			50,796

Reconciling items for reportable segments - revenues

Reconciling items in the previous table were as follows (in millions):



	Three Months Ended
	December 27, 2015			December 28, 2014
Revenues
Nonreportable segments	$	64		$	43
Intersegment eliminations	(1		)	(2		)
	$	63		$	41
EBT
Unallocated cost of equipment and services revenues	$	(150	)	$	(79	)
Unallocated research and development expenses	(216		)	(210		)
Unallocated selling, general and administrative expenses	(127		)	(150		)
Unallocated other expense, net	(6		)	(69		)
Unallocated interest expense	(70		)	—
Unallocated investment income, net	114			231
Nonreportable segments	(124		)	(148		)
Intersegment eliminations	1			(1		)
	$	(578	)	$	(426	)

Reconciling items for reportable segments - EBT

Unallocated acquisition-related expenses were comprised as follows (in millions):



	Three Months Ended
	December 27, 2015		December 28, 2014
Cost of equipment and services revenues	$	140	$	67
Research and development expenses	3		4
Selling, general and administrative expenses	29		12

Reconciling items in the previous table were as follows (in millions):



	Three Months Ended
	December 27, 2015			December 28, 2014
Revenues
Nonreportable segments	$	64		$	43
Intersegment eliminations	(1		)	(2		)
	$	63		$	41
EBT
Unallocated cost of equipment and services revenues	$	(150	)	$	(79	)
Unallocated research and development expenses	(216		)	(210		)
Unallocated selling, general and administrative expenses	(127		)	(150		)
Unallocated other expense, net	(6		)	(69		)
Unallocated interest expense	(70		)	—
Unallocated investment income, net	114			231
Nonreportable segments	(124		)	(148		)
Intersegment eliminations	1			(1		)
	$	(578	)	$	(426	)

Strategic Realignment Plan (Tables)

3 Months Ended

Dec. 27, 2015

Strategic Realignment Plan [Abstract]

Restructuring and Related Costs

The restructuring accrual, a portion of which is included in payroll and other benefits related liabilities with the remainder included in other current liabilities, is expected to be substantially paid within the next 12 months. Changes in the restructuring accrual during the three months ended December 27, 2015 were as follows (in millions):



	Severance Costs			Other Costs			Total
Beginning balance of restructuring accrual	$	122		$	31		$	153
Additional costs	27			28			55
Cash payments	(15		)	(44		)	(59		)
Adjustments	(4		)	—			(4		)
Ending balance of restructuring accrual	$	130		$	15		$	145

Fair Value Measurements (Tables)

3 Months Ended

Dec. 27, 2015