QUALCOMM INC/DE, 10-Q filed on 7/22/2015
Quarterly Report
Document and Entity Information Document
9 Months Ended
Jun. 28, 2015
Jul. 20, 2015
Document Information [Line Items]
 
 
Entity Registrant Name
QUALCOMM INC/DE 
 
Entity Registrant State of Incorporation
Delaware 
 
Entity Address
5775 Morehouse Dr. 
 
Entity City
San Diego 
 
Entity State
California 
 
Entity Zip Code
92121-1714 
 
Entity Phone Number
(858) 587-1121 
 
Entity Employer ID
953685934 
 
Entity Central Index Key
0000804328 
 
Current Fiscal Year End Date
--09-27 
 
Entity Filer Category
Large Accelerated Filer 
 
Document Type
10-Q 
 
Document Period End Date
Jun. 28, 2015 
 
Document Fiscal Year Focus
2015 
 
Document Fiscal Period Focus
Q3 
 
Amendment Flag
false 
 
Entity Common Stock, Shares Outstanding
 
1,571,202,188 
Entity Well-known Seasoned Issuer
Yes 
 
Entity Voluntary Filers
No 
 
Entity Current Reporting Status
Yes 
 
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)
In Millions, unless otherwise specified
Jun. 28, 2015
Sep. 28, 2014
Current assets:
 
 
Cash and cash equivalents
$ 9,987 
$ 7,907 
Marketable securities
11,344 
9,658 
Accounts receivable, net
1,961 
2,412 
Inventories
1,583 
1,458 
Deferred tax assets
472 
577 
Other current assets
581 
401 
Total current assets
25,928 
22,413 
Marketable securities
13,894 
14,457 
Deferred tax assets
1,275 
1,174 
Property, plant and equipment, net
2,574 
2,487 
Goodwill
4,259 
4,488 
Other intangible assets, net
2,405 
2,580 
Other assets
1,960 
975 
Total assets
52,295 
48,574 
Current liabilities:
 
 
Trade accounts payable
1,412 
2,183 
Payroll and other benefits related liabilities
697 
802 
Unearned revenues
680 
785 
Short-term debt
1,000 
0 
Other current liabilities
2,294 
2,243 
Total current liabilities
6,083 
6,013 
Unearned revenues
2,576 
2,967 
Long-term debt
9,913 
0 
Other liabilities
527 
428 
Total liabilities
19,099 
9,408 
Commitments and contingencies (Note 6)
   
   
Qualcomm stockholders' equity:
 
 
Preferred stock, $0.0001 par value; 8 shares authorized; none outstanding
0 
0 
Common stock and paid-in capital, $0.0001 par value; 6,000 shares authorized; 1,578 and 1,669 shares issued and outstanding, respectively
0 
7,736 
Retained earnings
32,699 
30,799 
Accumulated other comprehensive income
503 
634 
Total Qualcomm stockholders' equity
33,202 
39,169 
Noncontrolling interests
(6)
(3)
Total stockholders' equity
33,196 
39,166 
Total liabilities and stockholders' equity
$ 52,295 
$ 48,574 
CONDENSED CONSOLIDATED BALANCE SHEETS PARENTHETICALS (USD $)
In Millions, except Per Share data, unless otherwise specified
Jun. 28, 2015
Sep. 28, 2014
Preferred stock, par value
$ 0.0001 
$ 0.0001 
Preferred stock, shares authorized
8 
8 
Preferred stock, shares outstanding
0 
0 
Common stock, par value
$ 0.0001 
$ 0.0001 
Common stock, shares authorized
6,000 
6,000 
Common stock, shares issued
1,578 
1,669 
Common stock, shares outstanding
1,578 
1,669 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Jun. 28, 2015
Jun. 29, 2014
Jun. 28, 2015
Jun. 29, 2014
Revenues:
 
 
 
 
Equipment and services
$ 3,840 
$ 4,922 
$ 13,459 
$ 13,803 
Licensing
1,992 
1,884 
6,366 
5,992 
Total revenues
5,832 
6,806 
19,825 
19,795 
Costs and expenses:
 
 
 
 
Cost of equipment and services revenues
2,451 
2,740 
8,126 
7,929 
Research and development
1,407 
1,429 
4,133 
4,113 
Selling, general and administrative
577 
582 
1,689 
1,745 
Other
162 
(20)
1,241 
450 
Total costs and expenses
4,597 
4,731 
15,189 
14,237 
Operating income
1,235 
2,075 
4,636 
5,558 
Investment income, net (Note 2)
163 
422 
600 
968 
Income from continuing operations before income taxes
1,398 
2,497 
5,236 
6,526 
Income tax expense
(215)
(260)
(1,029)
(886)
Income from continuing operations
1,183 
2,237 
4,207 
5,640 
Discontinued operations, net of income taxes (Note 9)
0 
0 
0 
430 
Net income
1,183 
2,237 
4,207 
6,070 
Net loss attributable to noncontrolling interests
1 
1 
2 
3 
Net income attributable to Qualcomm
$ 1,184 
$ 2,238 
$ 4,209 
$ 6,073 
Basic earnings per share attributable to Qualcomm:
 
 
 
 
Continuing operations
$ 0.74 
$ 1.33 
$ 2.57 
$ 3.35 
Discontinued operations
$ 0.00 
$ 0.00 
$ 0.00 
$ 0.25 
Net income
$ 0.74 
$ 1.33 
$ 2.57 
$ 3.60 
Diluted earnings per share attributable to Qualcomm:
 
 
 
 
Continuing operations
$ 0.73 
$ 1.31 
$ 2.53 
$ 3.28 
Discontinued operations
$ 0.00 
$ 0.00 
$ 0.00 
$ 0.25 
Net income
$ 0.73 
$ 1.31 
$ 2.53 
$ 3.53 
Shares used in per share calculations:
 
 
 
 
Basic
1,608 
1,683 
1,638 
1,686 
Diluted
1,629 
1,714 
1,661 
1,718 
Dividends per share announced
$ 0.48 
$ 0.42 
$ 1.32 
$ 1.12 
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Jun. 28, 2015
Jun. 29, 2014
Jun. 28, 2015
Jun. 29, 2014
Net income
$ 1,183 
$ 2,237 
$ 4,207 
$ 6,070 
Other comprehensive income (loss), net of income taxes:
 
 
 
 
Foreign currency translation gains (losses)
7 
8 
(25)
14 
Reclassification of foreign currency translation losses included in net income
0 
0 
0 
1 
Noncredit other-than-temporary impairment losses and subsequent changes in fair value related to certain available-for-sale debt securities
(9)
1 
(19)
1 
Reclassification of other-than-temporary losses on available-for-sale securities included in net income
31 
5 
92 
96 
Net unrealized gains on other available-for-sale marketable securities
20 
176 
14 
356 
Reclassification of net realized gains on available-for-sale securities included in net income
(76)
(168)
(251)
(384)
Net unrealized gains on derivative instruments
58 
0 
58 
8 
Reclassification of net realized gains on derivative instruments included in net income
0 
(7)
0 
(20)
Total other comprehensive income (loss)
31 
15 
(131)
72 
Total comprehensive income
1,214 
2,252 
4,076 
6,142 
Comprehensive loss attributable to noncontrolling interests
1 
1 
2 
3 
Comprehensive income attributable to Qualcomm
$ 1,215 
$ 2,253 
$ 4,078 
$ 6,145 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Millions, unless otherwise specified
9 Months Ended
Jun. 28, 2015
Jun. 29, 2014
Operating Activities:
 
 
Net income
$ 4,207 
$ 6,070 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization expense
888 
853 
Gain on sale of discontinued operations
0 
(665)
Long-lived asset and goodwill impairment charges
304 
642 
Income tax provision in excess of income tax payments
159 
244 
Non-cash portion of share-based compensation expense
793 
806 
Incremental tax benefits from share-based compensation
(98)
(239)
Net realized gains on marketable securities and other investments
(399)
(685)
Impairment losses on marketable securities and other investments
161 
170 
Other items, net
(29)
(5)
Changes in assets and liabilities:
 
 
Accounts receivable, net
438 
43 
Inventories
(122)
116 
Other assets
(897)
136 
Trade accounts payable
(769)
321 
Payroll, benefits and other liabilities
(406)
(337)
Unearned revenues
(408)
(202)
Net cash provided by operating activities
3,822 
7,268 
Investing Activities:
 
 
Capital expenditures
(815)
(955)
Purchases of available-for-sale securities
(13,118)
(10,315)
Proceeds from sales and maturities of available-for-sale securities
11,897 
9,744 
Purchases of trading securities
(1,034)
(2,868)
Proceeds from sales and maturities of trading securities
1,008 
2,619 
Purchases of other marketable securities
0 
(220)
Proceeds from sale of discontinued operations, net of cash sold
0 
788 
Proceeds from sales of property, plant and equipment
161 
37 
Acquisitions and other investments, net of cash acquired
(308)
(447)
Other items, net
(11)
65 
Net cash used by investing activities
(2,220)
(1,552)
Financing Activities:
 
 
Proceeds from short-term debt
2,813 
0 
Proceeds from long-term debt
9,937 
0 
Repayment of short-term debt
(1,814)
0 
Proceeds from issuance of common stock
571 
1,147 
Repurchases and retirements of common stock
(9,016)
(3,354)
Dividends paid
(2,142)
(1,884)
Incremental tax benefits from share-based compensation
98 
239 
Other items, net
41 
(65)
Net cash provided (used) by financing activities
488 
(3,917)
Effect of exchange rate changes on cash and cash equivalents
(10)
3 
Net increase in cash and cash equivalents
2,080 
1,802 
Cash and cash equivalents at beginning of period
7,907 
6,142 
Cash and cash equivalents at end of period
$ 9,987 
$ 7,944 
Basis of Presentation
Basis of Presentation
Note 1 — Basis of Presentation
Financial Statement Preparation. These condensed consolidated financial statements have been prepared by QUALCOMM Incorporated (collectively with its subsidiaries, the Company or Qualcomm) in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and the instructions to Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, the interim financial information includes all normal recurring adjustments necessary for a fair statement of the results for the interim periods. These condensed consolidated financial statements are unaudited and should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended September 28, 2014. Operating results for interim periods are not necessarily indicative of operating results for an entire fiscal year. The Company operates and reports using a 52-53 week fiscal year ending on the last Sunday in September. Each of the three-month and nine-month periods ended June 28, 2015 and June 29, 2014 included 13 weeks and 39 weeks, respectively.
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 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 and nine months ended June 28, 2015 were 20,749,000 and 22,447,000, respectively. The dilutive common share equivalents, calculated using the treasury stock method, for the three and nine months ended June 29, 2014 were 30,642,000 and 31,985,000, 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 16,711,000 and 6,067,000 during the three and nine months ended June 28, 2015, respectively, which were primarily attributable to the ASR Agreements (Note 4), and 7,000 and 278,000 during the three and nine months ended June 29, 2014, respectively.
Share-Based Compensation. Total share-based compensation expense, related to all of the Company’s share-based awards, was comprised as follows (in millions):
 
Three Months Ended
 
Nine Months Ended
 
June 28,
2015
 
June 29,
2014
 
June 28,
2015
 
June 29,
2014
Cost of equipment and services revenues
$
10

 
$
12

 
$
33

 
$
37

Research and development
176

 
174

 
508

 
510

Selling, general and administrative
85

 
88

 
252

 
259

Share-based compensation expense before income taxes
271

 
274

 
793

 
806

Related income tax benefit
(58
)
 
(42
)
 
(145
)
 
(151
)
 
$
213

 
$
232

 
$
648

 
$
655

The Company recorded $173 million and $177 million in share-based compensation expense during the nine months ended June 28, 2015 and June 29, 2014, respectively, related to share-based awards granted during those periods. At June 28, 2015, total unrecognized compensation expense related to non-vested restricted stock units granted prior to that date was $1.5 billion, which is expected to be recognized over a weighted-average period of 2.0 years. During the nine months ended June 28, 2015 and June 29, 2014, net share-based awards granted, after forfeitures and cancelations, represented 0.8% of outstanding shares as of the beginning of each fiscal period, and total share-based awards granted represented 0.9% of outstanding shares as of the end of each fiscal period.
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. On July 9, 2015, the FASB voted to defer the effective date by one year, such that the new standard will be effective for the Company starting in the first quarter of fiscal 2019. The FASB will also 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.
Composition of Certain Financial Statement Items
Composition of Certain Financial Statement Items
Note 2 — Composition of Certain Financial Statement Items
Inventories (in millions)
 
 
 
 
June 28,
2015
 
September 28,
2014
Raw materials
$
1

 
$
1

Work-in-process
755

 
656

Finished goods
827

 
801

 
$
1,583

 
$
1,458

 
Other Current Liabilities (in millions)
 
 
 
 
June 28,
2015
 
September 28,
2014
Customer incentives and other customer-related liabilities
$
1,843

 
$
1,777

Other
451

 
466

 
$
2,294

 
$
2,243



Other Costs and Expenses
On February 9, 2015, the Company announced that it had reached a resolution with the China National Development and Reform Commission (NDRC) regarding its investigation of the Company relating to China’s Anti-Monopoly Law (AML) and the Company’s licensing business and certain interactions between the Company’s licensing business and its chipset business. The NDRC issued an Administrative Sanction Decision finding that the Company had violated the AML, and the Company agreed to implement a rectification plan that modifies certain of its business practices in China. In addition, the NDRC imposed a fine on the Company of 6.088 billion Chinese Yuan Renminbi (approximately $975 million), which the Company has paid. The Company recorded the amount of the fine in the second quarter of fiscal 2015 in other expenses. Other expenses in the nine months ended June 28, 2015 also included $255 million and $11 million in impairment charges on goodwill and intangible assets, respectively, related to our content and push-to-talk services and display businesses.
Other expenses in the first nine months of fiscal 2014 were comprised of $607 million in certain property, plant and equipment and goodwill impairment charges related to one of our display businesses and a $16 million goodwill impairment charge related to our former QRS division, partially offset by the reversal of the $173 million accrual recorded in fiscal 2013 related to the ParkerVision verdict (Note 6).

Investment Income, Net (in millions)
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
June 28,
2015
 
June 29,
2014
 
June 28,
2015
 
June 29,
2014
Interest and dividend income
$
128

 
$
139

 
$
400

 
$
460

Interest expense
(32
)
 
—

 
(34
)
 
(4
)
Net realized gains on marketable securities
117

 
290

 
381

 
660

Net realized gains on other investments
5

 
8

 
18

 
25

Impairment losses on marketable securities
(42
)
 
(8
)
 
(131
)
 
(149
)
Impairment losses on other investments
(13
)
 
(3
)
 
(30
)
 
(21
)
Net gains (losses) on derivative instruments
10

 
(6
)
 
16

 
(1
)
Equity in net losses of investees
(10
)
 
(2
)
 
(23
)
 
(7
)
Net gains on deconsolidation of subsidiaries
—

 
4

 
3

 
5

 
$
163

 
$
422

 
$
600

 
$
968

Income Taxes
Income Taxes
Note 3 — Income Taxes
The Company estimates its annual effective income tax rate for continuing operations to be approximately 19% for fiscal 2015, which is greater than its 14% effective income tax rate for fiscal 2014. Tax benefits from foreign income taxed at rates lower than rates in the United States are expected to be approximately 19% in fiscal 2015, compared to 20% in fiscal 2014.
The effective tax rate of 15% for the third quarter of fiscal 2015 was less than the estimated annual effective tax rate of 19% primarily resulting from an increase in the allocation of expenses to the Company’s United States operations.
During the second quarter of fiscal 2015, the NDRC imposed a $975 million fine on the Company (Note 2). The fine is not deductible for tax purposes. Given the significant unusual nature of the fine, it was accounted for discretely in the second quarter of fiscal 2015. Also, during the second quarter of fiscal 2015, the Company recorded a $61 million tax benefit as a result of a favorable tax audit settlement with the Internal Revenue Service related to Qualcomm Atheros, Inc.’s pre-acquisition 2010 and 2011 tax returns.
During the first quarter of fiscal 2015, the United States government reinstated the federal research and development tax credit retroactively to January 1, 2014 through December 31, 2014. As a result of the reinstatement, the Company recorded a tax benefit of $101 million related to fiscal 2014 in the first quarter of fiscal 2015. Additionally, the estimated annual effective tax rate for fiscal 2015 reflects the United States federal research and development tax credit generated through December 31, 2014, the date on which the credit expired. The annual effective tax rate for fiscal 2014 reflected the tax benefit from the credit generated through December 31, 2013, the date on which the credit previously expired.
Stockholders' Equity
Stockholders' Equity
Note 4 — Stockholders’ Equity
Changes in stockholders’ equity for the nine months ended June 28, 2015 were as follows (in millions):
 
Qualcomm Stockholders’ Equity
 
Noncontrolling Interests
 
Total Stockholders’ Equity
Balance at September 28, 2014
$
39,169

 
$
(3
)
 
$
39,166

Net income (loss)
4,209

 
(2
)
 
4,207

  Other comprehensive loss
(131
)
 
—

 
(131
)
Common stock issued under employee benefit plans and related tax benefits
657

 
—

 
657

Share-based compensation
834

 
—

 
834

Tax withholdings related to vesting of share-based payments
(336
)
 
—

 
(336
)
Dividends
(2,183
)
 
—

 
(2,183
)
Stock repurchases
(9,016
)
 
—

 
(9,016
)
Other
(1
)
 
(1
)
 
(2
)
Balance at June 28, 2015
$
33,202

 
$
(6
)
 
$
33,196


Accumulated Other Comprehensive Income. Changes in the components of accumulated other comprehensive income, net of income taxes, in Qualcomm stockholders’ equity during the nine months ended June 28, 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 28, 2014
$
(113
)
 
$
24

 
$
723

 
$
—

 
$
634

Other comprehensive (loss) income before reclassifications
(25
)
 
(12
)
 
14

 
58

 
35

Reclassifications from accumulated other comprehensive income
—

 
6

 
(172
)
 
—

 
(166
)
Other comprehensive (loss) income
(25
)
 
(6
)
 
(158
)
 
58

 
(131
)
Balance at June 28, 2015
$
(138
)
 
$
18

 
$
565

 
$
58

 
$
503


In the third quarter of fiscal 2015, the Company entered into U.S. Treasury rate locks in anticipation of its debt offering (Note 5), which were designated as cash flow hedges. This resulted in the deferral of gains of $56 million in accumulated other comprehensive income, which will be recognized over the 10- and 30-year lives of the underlying notes associated with the U.S. Treasury rate locks. Reclassifications from accumulated other comprehensive income related to available-for-sale securities and foreign currency translation adjustments of $48 million and $166 million for the three and nine months ended June 28, 2015, respectively, and $163 million and $287 million for the three and nine months ended June 29, 2014, respectively, were recorded in investment income, net (Note 2). Reclassifications from accumulated other comprehensive income related to derivative instruments of $7 million and $20 million for the three and nine months ended June 29, 2014, respectively, were recorded in revenues, cost of equipment and services revenues, research and development expenses and selling, general and administrative expenses.
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.
In May 2015, the Company entered into two accelerated share repurchase agreements (ASR Agreements) with two financial institutions under which the Company paid an aggregate of $5.0 billion upfront to the financial institutions and received from them an initial delivery of 57,737,000 shares of the Company’s common stock, which were retired and recorded as a $4.0 billion reduction to stockholders’ equity. The final number of shares to be repurchased will be based on the volume-weighted average stock price of the Company’s common stock during the terms of the transactions, less a discount and subject to adjustments pursuant to the terms and conditions of the ASR Agreements, and will also be retired upon delivery to the Company and recorded as a reduction to stockholders’ equity. This is evaluated as an unsettled forward contract indexed to the Company’s own stock, with $1.0 billion classified within stockholders’ equity. At settlement, under certain circumstances, one or both of the financial institutions may be required to deliver additional shares of common stock to the Company, or under certain circumstances, the Company may be required to deliver shares of common stock or to make a cash payment to one or both of the financial institutions, with the method of settlement at the Company’s election. The final settlement of the transactions under the ASR Agreements is scheduled to occur in November 2015 but may occur earlier in certain circumstances.
During the nine months ended June 28, 2015 and June 29, 2014, the Company repurchased and retired an additional 56,652,000 and 44,609,000 shares of common stock, respectively, for $4.0 billion and $3.4 billion, respectively, before commissions. To reflect share repurchases in the condensed consolidated balance sheet, the Company (i) reduces common stock for the par value of the shares, (ii) reduces paid-in capital for the amount in excess of par to zero during the quarter in which the shares are repurchased and (iii) records the residual amount to retained earnings. At June 28, 2015, $9.1 billion remained authorized for repurchase under the Company’s stock repurchase program. Since June 28, 2015, the Company repurchased and retired 8,018,000 shares of common stock for $510 million.
Dividends. On July 7, 2015, the Company announced a cash dividend of $0.48 per share on the Company’s common stock, payable on September 23, 2015 to stockholders of record as of the close of business on September 2, 2015. During the nine months ended June 28, 2015 and June 29, 2014, dividends charged to retained earnings were as follows (in millions, except per share data):
 
2015
 
2014
 
Per Share
 
Total
 
Per Share
 
Total
First quarter
$
0.42

 
$
710

 
$
0.35

 
$
599

Second quarter
0.42

 
702

 
0.35

 
599

Third quarter
0.48

 
771

 
0.42

 
718

 
$
1.32

 
$
2,183

 
$
1.12

 
$
1,916

Debt
Debt
Note 5 — Debt
Revolving Credit Facility. In February 2015, the Company entered into 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. Proceeds from the Revolving Credit Facility will be used for general corporate purposes. Loans under the Revolving Credit Facility bear interest, at the option of the Company, at either LIBOR (determined in accordance with the Revolving Credit Facility) plus a margin of 0.7% per annum or the Base Rate (determined in accordance with the Revolving Credit Facility), plus an initial margin of 0% per annum. The Revolving Credit Facility has a facility fee, which initially accrues at a rate of 0.05% per annum. 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 June 28, 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. In March 2015, the Company began 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 June 28, 2015, the Company had $1.0 billion of outstanding commercial paper recorded as short-term debt with a weighted-average interest rate of 0.14%, which included fees paid to the commercial paper dealers, and weighted-average remaining days to maturity of 51 days. The carrying value of the outstanding commercial paper approximated its estimated fair value at June 28, 2015.
Long-term Debt. In May 2015, the Company issued an aggregate principal amount of $10.0 billion of unsecured floating- and fixed-rate notes (the notes) with varying maturities. The proceeds from the notes of $9.9 billion, net of underwriting discounts and offering expenses, were used to fund the ASR Agreements (Note 4) and are also being used for other general corporate purposes. The following table provides a summary of the Company’s long-term debt as of June 28, 2015 (dollar amounts in millions):
 
 
Principal
Amount
 
Effective
Interest Rate
Floating-rate notes due May 18, 2018
 
$
250

 
0.61%
Floating-rate notes due May 20, 2020
 
250

 
0.88%
Fixed-rate 1.40% notes due May 18, 2018
 
1,250

 
0.68%
Fixed-rate 2.25% notes due May 20, 2020
 
1,750

 
1.78%
Fixed-rate 3.00% notes due May 20, 2022
 
2,000

 
2.28%
Fixed-rate 3.45% notes due May 20, 2025
 
2,000

 
3.46%
Fixed-rate 4.65% notes due May 20, 2035
 
1,000

 
4.74%
Fixed-rate 4.80% notes due May 20, 2045
 
1,500

 
4.71%
   Total principal
 
10,000

 
 
Unamortized discount, including debt issuance costs
 
(65
)
 
 
Hedge accounting fair value adjustments
 
(22
)
 
 
   Total long-term debt
 
$
9,913

 
 

The interest rate on the floating rate notes due in 2018 and the floating rate notes due in 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 June 28, 2015, the aggregate fair value of the notes, based on Level 2 inputs, was approximately $9.8 billion.
The Company has entered, and may in the future enter, into interest rate swaps to manage interest rate risk on certain notes. Such swaps allow the Company to effectively convert fixed-rate payments into floating-rate payments. 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. In the third quarter of fiscal 2015, the Company 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. The Company recognized $30 million of interest expense on its long-term debt during the three and nine months ended June 28, 2015. The Company did not have any long-term debt outstanding in fiscal 2014.
No principal payments are due on the Company’s notes prior to fiscal 2018. At June 28, 2015, future principal payments were $1.5 billion in fiscal 2018 and $8.5 billion after fiscal 2019; no principal payments were due in fiscal 2019.
Commitments and Contingencies
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. Post-verdict motions, including the Company’s motions for judgment as a matter of law and a new trial on invalidity and non-infringement and ParkerVision’s motions for injunctive relief and ongoing royalties, were filed by January 24, 2014. A hearing on these motions was held on May 1, 2014. 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 the remaining motions 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 will issue a decision sometime in the coming months. 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 now alleges that the Company infringes 11 additional patents and seeks damages and injunctive and other relief. The Company was served with the complaint in this second action on August 28, 2014 and answered on November 17, 2014. The judge’s schedule sets the claim construction hearing for August 12, 2015, the close of discovery for January 2016 and the trial for August 2016.
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 United States International Trade Commission (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 of Delaware 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. On April 2, 2015, the Administrative Law Judge in the ITC investigation issued a claim construction order construing seven claim terms from five of the seven asserted patents. The evidentiary hearing for the investigation was held from June 22 to June 26, 2015. Nvidia withdrew the ITC complaint with respect to four of the patents, but is moving forward with infringement allegations with respect to three of the patents. The Initial Determination of the Administrative Law Judge is due October 9, 2015, and the target date for completion of the investigation by the ITC is set for February 10, 2016. The district court case was stayed on October 23, 2014 pending completion of the ITC investigation including appeals.
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. The Commission is investigating “alleged practices in the form of predatory pricing on certain UMTS standard-compliant chipsets used to deliver cellular mobile broadband access.” The initiation of proceedings merely means that the Commission will deal with the case as a matter of priority. 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 none of the business practices under investigation are in breach of the EU competition rules and will continue to cooperate with the Commission.
Korea Fair Trade Commission (KFTC) Complaint: On January 4, 2010, the KFTC issued a written decision finding that the Company had violated South 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 2015 with respect to this matter.
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 27 different dates, with the next hearing scheduled for August 4, 2015.
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.
The Company is continuing to cooperate with the SEC and the DOJ, but is unable to predict the outcome of their investigations or any actions that the SEC or DOJ may decide to file.
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. 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 continues to cooperate with the FTC as it conducts its investigation.
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. The Commission is investigating “alleged payments, rebates and/or other consideration granted by Qualcomm Incorporated or any of its affiliates and/or subsidiaries (Qualcomm) to smartphone and/or tablet manufacturers which are conditional upon the exclusive or quasi-exclusive use or purchase of Qualcomm products, in particular baseband chipsets, by the respective manufacturer(s).” The initiation of proceedings merely means that the Commission will deal with the case as a matter of priority. 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 none of the business practices under investigation are in breach of the EU competition rules and will continue to cooperate with the Commission.
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). The Company understands that this investigation concerns primarily its licensing business. If a violation of the MRFTA is found, a broad range of remedies is potentially available to the KFTC, including imposing a fine or requiring modifications to the Company’s licensing practices. Given that this investigation is in its early stages, it is difficult to predict the outcome of this matter or what remedies, if any, may be imposed by the KFTC. The Company continues to cooperate with the KFTC 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. The Company has not recorded any accrual at June 28, 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 June 28, 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.
These indemnification arrangements are not initially measured and recognized at fair value because they are deemed to be similar to product warranties in that they relate to claims and/or other actions that could impair the ability of the Company’s direct or indirect customers to use the Company’s products or services. Accordingly, the Company records liabilities resulting from the arrangements when they are probable and can be reasonably estimated. 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 June 28, 2015 associated with these indemnification arrangements, other than insignificant 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 June 28, 2015 for the remainder of fiscal 2015 and for each of the subsequent four years from fiscal 2016 through 2019 were $2.2 billion, $1.2 billion, $921 million, $791 million and $721 million, respectively, and $175 million thereafter. Of these amounts, for the remainder of fiscal 2015 and for each of the subsequent four years from fiscal 2016 through 2019, commitments to purchase integrated circuit product inventories comprised $1.8 billion, $1.0 billion, $771 million, $703 million and $651 million, respectively, and $152 million thereafter. Integrated circuit product inventory obligations represent purchase commitments for wafers, 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, cancelation of outstanding purchase commitments is generally allowed but requires payment of costs incurred through the date of cancelation, and in some cases, incremental fees related to capacity underutilization.
Operating Leases. The Company leases certain of its land, facilities and equipment under noncancelable operating leases, with terms ranging from less than one year to 16 years and with provisions in certain leases for cost-of-living increases. Future minimum lease payments for the remainder of fiscal 2015 and for each of the subsequent four years from fiscal 2016 through 2019 are $23 million, $84 million, $64 million, $33 million and $21 million, respectively, and $16 million thereafter.
Other Commitments. The Company is committed to fund certain strategic investments up to $197 million. Of this amount, $105 million will be funded in fiscal 2015. 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
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. 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 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 recognition of the step-up of inventories to fair value, amortization and impairment of certain intangible assets and certain other acquisition-related charges, and beginning in the first quarter of fiscal 2015, 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. The table below presents revenues and EBT for reportable segments (in millions):
 
QCT
 
QTL
 
QSI
 
Reconciling
Items
 
Total
For the three months ended
 
 
 
 
 
 
 
 
 
June 28, 2015
 
 
 
 
 
 
 
 
 
Revenues
$
3,853

 
$
1,931

 
$
—

 
$
48

 
$
5,832

EBT
289

 
1,654

 
(49
)
 
(496
)
 
1,398

June 29, 2014
 
 
 
 
 
 
 
 
 
Revenues
$
4,957

 
$
1,803

 
$
—

 
$
46

 
$
6,806

EBT
1,116

 
1,550

 
(1
)
 
(168
)
 
2,497

 
 
 
 
 
 
 
 
 
 
For the nine months ended
 
 
 
 
 
 
 
 
 
June 28, 2015
 
 
 
 
 
 
 
 
 
Revenues
$
13,529

 
$
6,162

 
$
—

 
$
134

 
$
19,825

EBT
2,185

 
5,395

 
(82
)
 
(2,262
)
 
5,236

June 29, 2014
 
 
 
 
 
 
 
 
 
Revenues
$
13,816

 
$
5,774

 
$
—

 
$
205

 
$
19,795

EBT
2,762

 
5,054

 
(36
)
 
(1,254
)
 
6,526


Intersegment revenues included in QCT revenues were negligible in all periods presented. All other revenues for reportable segments were from external customers for all periods presented.
Reconciling items in the previous table were as follows (in millions):
 
Three Months Ended
 
Nine Months Ended
 
June 28,
2015
 
June 29,
2014
 
June 28,
2015
 
June 29,
2014
Revenues
 
 
 
 
 
 
 
Nonreportable segments
$
49

 
$
47

 
$
138

 
$
208

Intersegment eliminations
(1
)
 
(1
)
 
(4
)
 
(3
)
 
$
48

 
$
46

 
$
134

 
$
205

EBT
 
 
 
 
 
 
 
Unallocated cost of equipment and services revenues
$
(65
)
 
$
(74
)
 
$
(217
)
 
$
(223
)
Unallocated research and development expenses
(188
)
 
(220
)
 
(624
)
 
(653
)
Unallocated selling, general and administrative expenses
(93
)
 
(107
)
 
(342
)
 
(318
)
Unallocated other (expense) income
(142
)
 
184

 
(1,221
)
 
173

Unallocated investment income, net
193

 
413

 
655

 
985

Nonreportable segments
(201
)
 
(364
)
 
(512
)
 
(1,218
)
Intersegment eliminations
—

 
—

 
(1
)
 
—

 
$
(496
)
 
$
(168
)
 
$
(2,262
)
 
$
(1,254
)

Unallocated other expense for the nine months ended June 28, 2015 included a $975 million charge related to the resolution reached with the NDRC and charges of $235 million and $11 million for impairment of goodwill and intangible assets, respectively, related to three of the Company’s nonreportable segments (Note 2). Nonreportable segments EBT for the nine months ended June 29, 2014 included $607 million in impairment charges related to property, plant and equipment and goodwill (Note 2).
Unallocated acquisition-related expenses were comprised as follows (in millions):
 
Three Months Ended
 
Nine Months Ended
 
June 28,
2015
 
June 29,
2014
 
June 28,
2015
 
June 29,
2014
Cost of equipment and services revenues
$
55

 
$
62

 
$
184

 
$
186

Research and development expenses
3

 
3

 
11

 
26

Selling, general and administrative expenses
20

 
6

 
45

 
19


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, wireless spectrum, other investments and all assets of consolidated subsidiaries included in QSI. Total segment assets differ from total assets on a consolidated basis as a result of unallocated assets primarily comprised of certain cash, cash equivalents, marketable securities, property, plant and equipment, deferred tax assets, goodwill, other intangible assets and assets of nonreportable segments. Segment assets and reconciling items were as follows (in millions):
 
June 28,
2015
 
September 28,
2014
QCT
$
2,977

 
$
3,639

QTL
522

 
161

QSI
697

 
484

Reconciling items
48,099

 
44,290

Total consolidated assets
$
52,295

 
$
48,574

Acquisitions
Acquisitions
Note 8 — Acquisitions
In October 2014, the Company announced that it had reached agreement with CSR plc on the terms of a recommended cash offer to acquire the entire issued and to be issued ordinary share capital of CSR for £9.00 per ordinary share, which values the entire issued and to be issued share capital of CSR at approximately £1.6 billion (approximately $2.4 billion based upon an exchange rate of USD: GBP 1.5634). CSR is an innovator in the development of multifunction semiconductor platforms and technologies for the automotive, consumer and voice and music categories. The acquisition complements the Company’s current offerings by adding products, channels and customers in the growth categories of the Internet of Everything and automotive infotainment, accelerating the Company’s presence and path to leadership. The acquisition has received approval of CSR’s shareholders, and every required regulatory agency has either provided formal written approval or declined to exercise jurisdiction, except for the Ministry of Commerce in China. The completion of the acquisition remains subject to satisfaction of additional conditions. Subject to the satisfaction of these conditions, the acquisition is expected to close by the end of the summer of 2015. In connection with the pending acquisition, the Company agreed to set aside certain cash, cash equivalents and marketable securities (Note 11).
Discontinued Operations
Discontinued Operations
Note 9 — Discontinued Operations
On November 25, 2013, the Company completed its sale of the North and Latin America operations of its Omnitracs division to a U.S.-based private equity firm for cash consideration of $788 million (net of cash sold). As a result, the Company recorded a gain in discontinued operations of $665 million ($430 million net of income tax expense) during fiscal 2014. The revenues and operating results of the North and Latin America operations of the Omnitracs division, which comprised substantially all of the Omnitracs division, were not presented as discontinued operations in any fiscal period because they were immaterial.
Fair Value Measurements
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 June 28, 2015 (in millions):
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets
 
 
 
 
 
 
 
Cash equivalents
$
5,207

 
$
4,465

 
$
—

 
$
9,672

Marketable securities (a)
 
 
 
 
 
 
 
U.S. Treasury securities and government-related securities
44

 
1,137

 
—

 
1,181

Corporate bonds and notes
—

 
16,272

 
—

 
16,272

Mortgage- and asset-backed securities
—

 
1,584

 
181

 
1,765

Auction rate securities
—

 
—

 
46

 
46

Common and preferred stock
753

 
683

 
—

 
1,436

Equity funds
496

 
—

 
—

 
496

Debt funds
—

 
4,042

 
—

 
4,042

Total marketable securities
1,293

 
23,718

 
227

 
25,238

Derivative instruments
2

 
7

 
—

 
9

Other investments (a)
356

 
—

 
—

 
356

Total assets measured at fair value
$
6,858

 
$
28,190

 
$
227

 
$
35,275

Liabilities
 
 
 
 
 
 
 
Derivative instruments
$
—

 
$
23

 
$
—

 
$
23

Other liabilities
310

 
—

 
—

 
310

Total liabilities measured at fair value
$
310

 
$
23

 
$
—

 
$
333


(a) Included amounts that are restricted (Note 11).
Activity between Levels of the Fair Value Hierarchy. There were no significant transfers between Level 1 and Level 2 during the nine months ended June 28, 2015 and June 29, 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 marketable securities classified within Level 3 of the valuation hierarchy (in millions):
 
Nine Months Ended
June 28, 2015
 
Nine Months Ended
June 29, 2014
 
Auction Rate
Securities
 
Mortgage- and Asset-Backed
Securities
 
Auction Rate
Securities
 
Mortgage- and Asset-Backed
Securities
Beginning balance of Level 3
$
83

 
$
186

 
$
83

 
$
239

Total realized and unrealized gains or losses:
 
 
 
 
 
 
 
Included in investment income, net
—

 
3

 
—

 
10

Included in other comprehensive income
—

 
(4
)
 
—

 
(4
)
Purchases
—

 
62

 
—

 
86

Sales
—

 
(46
)
 
—

 
(124
)
Settlements
(37
)
 
(20
)
 
—

 
(28
)
Transfers out of Level 3
—

 
—

 
—

 
(2
)
Ending balance of Level 3
$
46

 
$
181

 
$
83

 
$
177


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. There were no transfers in or out of Level 3 during the nine months ended June 28, 2015. Transfers out of Level 3 during the nine months ended June 29, 2014 primarily consisted of debt securities with significant upgrades in credit ratings.
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 nine months ended June 28, 2015 and June 29, 2014, the Company updated the business plans and related internal forecasts related to certain of the Company’s businesses, resulting in impairment charges to write down certain property, plant and equipment, intangible assets and goodwill (Note 2). The Company determined the fair values using cost, income and market approaches. The estimation of fair value and cash flows 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. During the nine months ended June 28, 2015 and June 29, 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.
Marketable Securities
Marketable Securities
Note 11 — Marketable Securities
Marketable securities were comprised as follows (in millions):
 
Current
 
Noncurrent
 
June 28,
2015
 
September 28,
2014
 
June 28,
2015
 
September 28,
2014
Trading:
 
 
 
 
 
 
 
U.S. Treasury securities and government-related securities
$
329

 
$
320

 
$
6

 
$
38

Corporate bonds and notes
187

 
191

 
379

 
367

Mortgage- and asset-backed securities
—

 
—

 
252

 
237

Total trading
516

 
511

 
637

 
642

Available-for-sale:
 
 
 
 
 
 
 
U.S. Treasury securities and government-related securities
138

 
805

 
708

 
392

Corporate bonds and notes
8,628

 
6,274

 
7,078

 
7,649

Mortgage- and asset-backed securities
1,297

 
1,063

 
216

 
195

Auction rate securities
—

 
—

 
46

 
83

Common and preferred stock
550

 
192

 
886

 
1,605

Equity funds
—

 
—

 
496

 
541

Debt funds
215

 
813

 
3,038

 
2,560

Total available-for-sale
10,828

 
9,147

 
12,468

 
13,025

Fair value option:
 
 
 
 
 
 
 
Debt fund
—

 
—

 
789

 
790

Total marketable securities
$
11,344

 
$
9,658

 
$
13,894

 
$
14,457


In connection with the pending acquisition of CSR (Note 8), the Company agreed to set aside certain cash, cash equivalents and marketable securities to be held for purposes of satisfying payment of the consideration to effect the acquisition, which is expected to close by the end of the summer of 2015. At June 28, 2015, the fair values of the marketable securities that were set aside were $2.9 billion of corporate bonds and notes, $790 million of mortgage- and asset-backed securities and $79 million in U.S. Treasury securities and government-related securities. Additionally, $47 million in cash equivalents, which were recorded as other current assets, were set aside. If the combined fair values fall below approximately £1.9 billion (approximately $2.9 billion using an exchange rate of USD: GBP 1.5634), the Company may be required to set aside additional amounts. Additionally, if certain conditions are met, such as a reduction in the liquidity of any of the securities that are set aside, the Company may be required to liquidate the securities and transfer the cash to a third party until the acquisition closes.
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 June 28, 2015, the Company had an effective ownership interest in the debt fund of 25%. Changes in fair value associated with this investment are recognized in net investment income. During the three and nine months ended June 28, 2015, the changes in fair value associated with this investment were negligible. During the three and nine months ended June 29, 2014, net increases in fair value associated with this investment were $12 million and $30 million, respectively.
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 gains recognized on debt securities classified as trading held at June 28, 2015 were negligible for both the three and nine months ended June 28, 2015. Net gains recognized on debt securities classified as trading held at June 29, 2014 were negligible for both the three and nine months ended June 29, 2014.
At June 28, 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
$
3,750

 
$
11,156

 
$
1,005

 
$
641

 
$
4,812

 
$
21,364


Debt securities with no single maturity date included debt funds, mortgage- and asset-backed securities, auction rate securities and corporate bonds and notes.
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
 
 
 
 
 
June 28, 2015
$
126

 
$
(10
)
 
$
116

June 29, 2014
267

 
(8
)
 
259

 
 
 
 
 
 
For the nine months ended
 
 
 
 
 
June 28, 2015
$
434

 
$
(48
)
 
$
386

June 29, 2014
610

 
(16
)
 
594


Available-for-sale securities were comprised as follows (in millions):
 
Cost
 
Unrealized Gains
 
Unrealized Losses
 
Fair Value
June 28, 2015
 
 
 
 
 
 
 
Equity securities
$
1,543

 
$
391

 
$
(2
)
 
$
1,932

Debt securities (including debt funds)
21,203

 
253

 
(92
)
 
21,364

 
$
22,746

 
$
644

 
$
(94
)
 
$
23,296

September 28, 2014
 
 
 
 
 
 
 
Equity securities
$
1,769

 
$
575

 
$
(6
)
 
$
2,338

Debt securities (including debt funds)
19,582

 
312

 
(60
)
 
19,834

 
$
21,351

 
$
887

 
$
(66
)
 
$
22,172


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):
 
June 28, 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
$
313

 
$
(2
)
 
$
—

 
$
—

Corporate bonds and notes
7,413

 
(59
)
 
142

 
(9
)
Mortgage- and asset-backed securities
874

 
(2
)
 
16

 
—

Auction rate securities
—

 
—

 
46

 
(1
)
Common and preferred stock
155

 
(2
)
 
18

 
—

Debt funds
934

 
(18
)
 
47

 
(1
)
 
$
9,689

 
$
(83
)
 
$
269

 
$
(11
)
 
September 28, 2014
 
Less than 12 months
 
More than 12 months
 
Fair Value
 
Unrealized Losses
 
Fair Value
 
Unrealized Losses
U.S. Treasury securities and government-related securities
$
279

 
$
(2
)
 
$
—

 
$
—

Corporate bonds and notes
4,924

 
(31
)
 
104

 
(4
)
Mortgage- and asset-backed securities
484

 
(1
)
 
52

 
(1
)
Auction rate securities
—

 
—

 
83

 
(1
)
Common and preferred stock
86

 
(3
)
 
52

 
(3
)
Debt funds
133

 
(1
)
 
384

 
(19
)
 
$
5,906

 
$
(38
)
 
$
675

 
$
(28
)

At June 28, 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 were negligible at June 28, 2015 and June 29, 2014, respectively.
Subsequent Event Subsequent Event (Notes)
Subsequent Event
Note 12 - Subsequent Event
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 to reduce annual costs from fiscal 2015 levels of $7.3 billion (adjusted for variable compensation) by approximately $1.1 billion through a series of targeted reductions across the Company’s businesses, particularly in QCT. The Company also plans to reduce annual share-based compensation grants by approximately $300 million. The Company expects these cost initiatives to be fully implemented by the end of fiscal 2016. In connection with this plan, the Company expects to incur approximately $350 million to $450 million in restructuring and restructuring-related charges, of which approximately $100 million to $200 million are expected to be incurred in the fourth quarter of fiscal 2015. Restructuring and restructuring-related charges include an estimate of severance costs, lease termination costs, acceleration of depreciation, consultancy fees and other costs.
Basis of Presentation (Policies)
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 and nine-month periods ended June 28, 2015 and June 29, 2014 included 13 weeks and 39 weeks, respectively.
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 and nine months ended June 28, 2015 were 20,749,000 and 22,447,000, respectively. The dilutive common share equivalents, calculated using the treasury stock method, for the three and nine months ended June 29, 2014 were 30,642,000 and 31,985,000, 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 16,711,000 and 6,067,000 during the three and nine months ended June 28, 2015, respectively, which were primarily attributable to the ASR Agreements (Note 4), and 7,000 and 278,000 during the three and nine months ended June 29, 2014, respectively
Recent Accounting Pronouncements 
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. On July 9, 2015, the FASB voted to defer the effective date by one year, such that the new standard will be effective for the Company starting in the first quarter of fiscal 2019. The FASB will also 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.
Marketable Securities (Policies)
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)
Share-based compensation expense, related to all share-based awards
Total share-based compensation expense, related to all of the Company’s share-based awards, was comprised as follows (in millions):
 
Three Months Ended
 
Nine Months Ended
 
June 28,
2015
 
June 29,
2014
 
June 28,
2015
 
June 29,
2014
Cost of equipment and services revenues
$
10

 
$
12

 
$
33

 
$
37

Research and development
176

 
174

 
508

 
510

Selling, general and administrative
85

 
88

 
252

 
259

Share-based compensation expense before income taxes
271

 
274

 
793

 
806

Related income tax benefit
(58
)
 
(42
)
 
(145
)
 
(151
)
 
$
213

 
$
232

 
$
648

 
$
655

Composition of Certain Financial Statement Items (Tables)
Inventories 
Inventories (in millions)
 
 
 
 
June 28,
2015
 
September 28,
2014
Raw materials
$
1

 
$
1

Work-in-process
755

 
656

Finished goods
827

 
801

 
$
1,583

 
$
1,458

Other Current Liabilities 
Other Current Liabilities (in millions)
 
 
 
 
June 28,
2015
 
September 28,
2014
Customer incentives and other customer-related liabilities
$
1,843

 
$
1,777

Other
451

 
466

 
$
2,294

 
$
2,243

Investment Income, Net 
Investment Income, Net (in millions)
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
June 28,
2015
 
June 29,
2014
 
June 28,
2015
 
June 29,
2014
Interest and dividend income
$
128

 
$
139

 
$
400

 
$
460

Interest expense
(32
)
 
—

 
(34
)
 
(4
)
Net realized gains on marketable securities
117

 
290

 
381

 
660

Net realized gains on other investments
5

 
8

 
18

 
25

Impairment losses on marketable securities
(42
)
 
(8
)
 
(131
)
 
(149
)
Impairment losses on other investments
(13
)
 
(3
)
 
(30
)
 
(21
)
Net gains (losses) on derivative instruments
10

 
(6
)
 
16

 
(1
)
Equity in net losses of investees
(10
)
 
(2
)
 
(23
)
 
(7
)
Net gains on deconsolidation of subsidiaries
—

 
4

 
3

 
5

 
$
163

 
$
422

 
$
600

 
$
968

Stockholders' Equity (Tables)
Changes in stockholders' equity 
Changes in stockholders’ equity for the nine months ended June 28, 2015 were as follows (in millions):
 
Qualcomm Stockholders’ Equity
 
Noncontrolling Interests
 
Total Stockholders’ Equity
Balance at September 28, 2014
$
39,169

 
$
(3
)
 
$
39,166

Net income (loss)
4,209

 
(2
)
 
4,207

  Other comprehensive loss
(131
)
 
—

 
(131
)
Common stock issued under employee benefit plans and related tax benefits
657

 
—

 
657

Share-based compensation
834

 
—

 
834

Tax withholdings related to vesting of share-based payments
(336
)
 
—

 
(336
)
Dividends
(2,183
)
 
—

 
(2,183
)
Stock repurchases
(9,016
)
 
—

 
(9,016
)
Other
(1
)
 
(1
)
 
(2
)
Balance at June 28, 2015
$
33,202

 
$
(6
)
 
$
33,196

Accumulated Other Comprehensive Income 
Accumulated Other Comprehensive Income. Changes in the components of accumulated other comprehensive income, net of income taxes, in Qualcomm stockholders’ equity during the nine months ended June 28, 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 28, 2014
$
(113
)
 
$
24

 
$
723

 
$
—

 
$
634

Other comprehensive (loss) income before reclassifications
(25
)
 
(12
)
 
14

 
58

 
35

Reclassifications from accumulated other comprehensive income
—

 
6

 
(172
)
 
—

 
(166
)
Other comprehensive (loss) income
(25
)
 
(6
)
 
(158
)
 
58

 
(131
)
Balance at June 28, 2015
$
(138
)
 
$
18

 
$
565

 
$
58

 
$
503

Dividends Declared 
During the nine months ended June 28, 2015 and June 29, 2014, dividends charged to retained earnings were as follows (in millions, except per share data):
 
2015
 
2014
 
Per Share
 
Total
 
Per Share
 
Total
First quarter
$
0.42

 
$
710

 
$
0.35

 
$
599

Second quarter
0.42

 
702

 
0.35

 
599

Third quarter
0.48

 
771

 
0.42

 
718

 
$
1.32

 
$
2,183

 
$
1.12

 
$
1,916

Debt (Tables)
Long-term Debt [Text Block]
The following table provides a summary of the Company’s long-term debt as of June 28, 2015 (dollar amounts in millions):
 
 
Principal
Amount
 
Effective
Interest Rate
Floating-rate notes due May 18, 2018
 
$
250

 
0.61%
Floating-rate notes due May 20, 2020
 
250

 
0.88%
Fixed-rate 1.40% notes due May 18, 2018
 
1,250

 
0.68%
Fixed-rate 2.25% notes due May 20, 2020
 
1,750

 
1.78%
Fixed-rate 3.00% notes due May 20, 2022
 
2,000

 
2.28%
Fixed-rate 3.45% notes due May 20, 2025
 
2,000

 
3.46%
Fixed-rate 4.65% notes due May 20, 2035
 
1,000

 
4.74%
Fixed-rate 4.80% notes due May 20, 2045
 
1,500

 
4.71%
   Total principal
 
10,000

 
 
Unamortized discount, including debt issuance costs
 
(65
)
 
 
Hedge accounting fair value adjustments
 
(22
)
 
 
   Total long-term debt
 
$
9,913

 
 
Segment Information (Tables)
Revenues and EBT for reportable segments 
The table below presents revenues and EBT for reportable segments (in millions):
 
QCT
 
QTL
 
QSI
 
Reconciling
Items
 
Total
For the three months ended
 
 
 
 
 
 
 
 
 
June 28, 2015
 
 
 
 
 
 
 
 
 
Revenues
$
3,853

 
$
1,931

 
$
—

 
$
48

 
$
5,832

EBT
289

 
1,654

 
(49
)
 
(496
)
 
1,398

June 29, 2014
 
 
 
 
 
 
 
 
 
Revenues
$
4,957

 
$
1,803

 
$
—

 
$
46

 
$
6,806

EBT
1,116

 
1,550

 
(1
)
 
(168
)
 
2,497

 
 
 
 
 
 
 
 
 
 
For the nine months ended
 
 
 
 
 
 
 
 
 
June 28, 2015
 
 
 
 
 
 
 
 
 
Revenues
$
13,529

 
$
6,162

 
$
—

 
$
134

 
$
19,825

EBT
2,185

 
5,395

 
(82
)
 
(2,262
)
 
5,236

June 29, 2014
 
 
 
 
 
 
 
 
 
Revenues
$
13,816

 
$
5,774

 
$
—

 
$
205

 
$
19,795

EBT
2,762

 
5,054

 
(36
)
 
(1,254
)
 
6,526

Reconciling items for reportable segments - revenues 
Reconciling items in the previous table were as follows (in millions):
 
Three Months Ended
 
Nine Months Ended
 
June 28,
2015
 
June 29,
2014
 
June 28,
2015
 
June 29,
2014
Revenues
 
 
 
 
 
 
 
Nonreportable segments
$
49

 
$
47

 
$
138

 
$
208

Intersegment eliminations
(1
)
 
(1
)
 
(4
)
 
(3
)
 
$
48

 
$
46

 
$
134

 
$
205

EBT
 
 
 
 
 
 
 
Unallocated cost of equipment and services revenues
$
(65
)
 
$
(74
)
 
$
(217
)
 
$
(223
)
Unallocated research and development expenses
(188
)
 
(220
)
 
(624
)
 
(653
)
Unallocated selling, general and administrative expenses
(93
)
 
(107
)
 
(342
)
 
(318
)
Unallocated other (expense) income
(142
)
 
184

 
(1,221
)
 
173

Unallocated investment income, net
193

 
413

 
655

 
985

Nonreportable segments
(201
)
 
(364
)
 
(512
)
 
(1,218
)
Intersegment eliminations
—

 
—

 
(1
)
 
—

 
$
(496
)
 
$
(168
)
 
$
(2,262
)
 
$
(1,254
)
Reconciling items for reportable segments - EBT 
Unallocated acquisition-related expenses were comprised as follows (in millions):
 
Three Months Ended
 
Nine Months Ended
 
June 28,
2015
 
June 29,
2014
 
June 28,
2015
 
June 29,
2014
Cost of equipment and services revenues
$
55

 
$
62

 
$
184

 
$
186

Research and development expenses
3

 
3

 
11

 
26

Selling, general and administrative expenses
20

 
6

 
45

 
19

Reconciling items in the previous table were as follows (in millions):
 
Three Months Ended
 
Nine Months Ended
 
June 28,
2015
 
June 29,
2014
 
June 28,
2015
 
June 29,
2014
Revenues
 
 
 
 
 
 
 
Nonreportable segments
$
49

 
$
47

 
$
138

 
$
208

Intersegment eliminations
(1
)
 
(1
)
 
(4
)
 
(3
)
 
$
48

 
$
46

 
$
134

 
$
205

EBT
 
 
 
 
 
 
 
Unallocated cost of equipment and services revenues
$
(65
)
 
$
(74
)
 
$
(217
)
 
$
(223
)
Unallocated research and development expenses
(188
)
 
(220
)
 
(624
)
 
(653
)
Unallocated selling, general and administrative expenses
(93
)
 
(107
)
 
(342
)
 
(318
)
Unallocated other (expense) income
(142
)
 
184

 
(1,221
)
 
173

Unallocated investment income, net
193

 
413

 
655

 
985

Nonreportable segments
(201
)
 
(364
)
 
(512
)
 
(1,218
)
Intersegment eliminations
—

 
—

 
(1
)
 
—

 
$
(496
)
 
$
(168
)
 
$
(2,262
)
 
$
(1,254
)
Segment assets and reconciling items 
Segment assets and reconciling items were as follows (in millions):
 
June 28,
2015
 
September 28,
2014
QCT
$
2,977

 
$
3,639

QTL
522

 
161

QSI
697

 
484

Reconciling items
48,099

 
44,290

Total consolidated assets
$
52,295

 
$
48,574

Fair Value Measurements (Tables)
Fair value hierarchy for assets and liabilities measured at fair value on a recurring basis 
The following table presents the Company’s fair value hierarchy for assets and liabilities measured at fair value on a recurring basis at June 28, 2015 (in millions):
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets
 
 
 
 
 
 
 
Cash equivalents
$
5,207

 
$
4,465

 
$
—

 
$
9,672

Marketable securities (a)
 
 
 
 
 
 
 
U.S. Treasury securities and government-related securities
44

 
1,137

 
—

 
1,181

Corporate bonds and notes
—

 
16,272

 
—

 
16,272

Mortgage- and asset-backed securities
—

 
1,584

 
181

 
1,765

Auction rate securities
—

 
—

 
46

 
46

Common and preferred stock
753

 
683

 
—

 
1,436

Equity funds
496

 
—

 
—

 
496

Debt funds
—

 
4,042

 
—

 
4,042

Total marketable securities
1,293

 
23,718

 
227

 
25,238

Derivative instruments
2

 
7

 
—

 
9

Other investments (a)
356

 
—

 
—

 
356

Total assets measured at fair value
$
6,858

 
$
28,190

 
$
227

 
$
35,275

Liabilities
 
 
 
 
 
 
 
Derivative instruments
$
—

 
$
23

 
$
—

 
$
23

Other liabilities
310

 
—

 
—

 
310

Total liabilities measured at fair value
$
310

 
$
23

 
$
—

 
$
333


(a) Included amounts that are restricted (Note 11).
Activity for marketable securities classified within Level 3 of the valuation hierarchy 
The following table includes the activity for marketable securities classified within Level 3 of the valuation hierarchy (in millions):
 
Nine Months Ended
June 28, 2015
 
Nine Months Ended
June 29, 2014
 
Auction Rate
Securities
 
Mortgage- and Asset-Backed
Securities
 
Auction Rate
Securities
 
Mortgage- and Asset-Backed
Securities
Beginning balance of Level 3
$
83

 
$
186

 
$
83

 
$
239

Total realized and unrealized gains or losses:
 
 
 
 
 
 
 
Included in investment income, net
—

 
3

 
—

 
10

Included in other comprehensive income
—

 
(4
)
 
—

 
(4
)
Purchases
—

 
62

 
—

 
86

Sales
—

 
(46
)
 
—

 
(124
)
Settlements
(37
)
 
(20
)
 
—

 
(28
)
Transfers out of Level 3
—

 
—

 
—

 
(2
)
Ending balance of Level 3
$
46

 
$
181

 
$
83

 
$
177


Marketable Securities (Tables)
Composition of marketable securities 
Marketable securities were comprised as follows (in millions):
 
Current
 
Noncurrent
 
June 28,
2015
 
September 28,
2014
 
June 28,
2015
 
September 28,
2014
Trading:
 
 
 
 
 
 
 
U.S. Treasury securities and government-related securities
$
329

 
$
320

 
$
6

 
$
38

Corporate bonds and notes
187

 
191

 
379

 
367

Mortgage- and asset-backed securities
—

 
—

 
252

 
237

Total trading
516

 
511

 
637

 
642

Available-for-sale:
 
 
 
 
 
 
 
U.S. Treasury securities and government-related securities
138

 
805

 
708

 
392

Corporate bonds and notes
8,628

 
6,274

 
7,078

 
7,649

Mortgage- and asset-backed securities
1,297

 
1,063

 
216

 
195

Auction rate securities
—

 
—

 
46

 
83

Common and preferred stock
550

 
192

 
886

 
1,605

Equity funds
—

 
—

 
496

 
541

Debt funds
215

 
813

 
3,038

 
2,560

Total available-for-sale
10,828

 
9,147

 
12,468

 
13,025

Fair value option:
 
 
 
 
 
 
 
Debt fund
—

 
—

 
789

 
790

Total marketable securities
$
11,344

 
$
9,658

 
$
13,894

 
$
14,457

Contractual maturities of available-for-sale debt securities 
At June 28, 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
$
3,750

 
$
11,156

 
$
1,005

 
$
641

 
$
4,812

 
$
21,364

Realized gains and losses on sales of available-for-sale 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
 
 
 
 
 
June 28, 2015
$
126

 
$
(10
)
 
$
116

June 29, 2014
267

 
(8
)
 
259

 
 
 
 
 
 
For the nine months ended
 
 
 
 
 
June 28, 2015
$
434

 
$
(48
)
 
$
386

June 29, 2014
610

 
(16
)
 
594

Composition of available-for-sale securities 
Available-for-sale securities were comprised as follows (in millions):
 
Cost
 
Unrealized Gains
 
Unrealized Losses
 
Fair Value
June 28, 2015
 
 
 
 
 
 
 
Equity securities
$
1,543

 
$
391

 
$
(2
)
 
$
1,932

Debt securities (including debt funds)
21,203

 
253

 
(92
)
 
21,364

 
$
22,746

 
$
644

 
$
(94
)
 
$
23,296

September 28, 2014
 
 
 
 
 
 
 
Equity securities
$
1,769

 
$
575

 
$
(6
)
 
$
2,338

Debt securities (including debt funds)
19,582

 
312

 
(60
)
 
19,834

 
$
21,351

 
$
887

 
$
(66
)
 
$
22,172

Gross unrealized losses and fair values of investments in individual securities classified as available-for-sale in a continuous unrealized loss position deemed to be temporary 
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):
 
June 28, 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
$
313

 
$
(2
)
 
$
—

 
$
—

Corporate bonds and notes
7,413

 
(59
)
 
142

 
(9
)
Mortgage- and asset-backed securities
874

 
(2
)
 
16

 
—

Auction rate securities
—

 
—

 
46

 
(1
)
Common and preferred stock
155

 
(2
)
 
18

 
—

Debt funds
934

 
(18
)
 
47

 
(1
)
 
$
9,689

 
$
(83
)
 
$
269

 
$
(11
)
 
September 28, 2014
 
Less than 12 months
 
More than 12 months
 
Fair Value
 
Unrealized Losses
 
Fair Value
 
Unrealized Losses
U.S. Treasury securities and government-related securities
$
279

 
$
(2
)
 
$
—

 
$
—

Corporate bonds and notes
4,924

 
(31
)
 
104

 
(4
)
Mortgage- and asset-backed securities
484

 
(1
)
 
52

 
(1
)
Auction rate securities
—

 
—

 
83

 
(1
)
Common and preferred stock
86

 
(3
)
 
52

 
(3
)
Debt funds
133

 
(1
)
 
384

 
(19
)
 
$
5,906

 
$
(38
)
 
$
675

 
$
(28
)
Basis of Presentation Earnings Per Common Share (Details)
3 Months Ended 9 Months Ended
Jun. 28, 2015
Jun. 29, 2014
Jun. 28, 2015
Jun. 29, 2014
Incremental Dilutive Common Share Equivalents [Abstract]
 
 
 
 
Dilutive common share equivalents
20,749,000 
30,642,000 
22,447,000 
31,985,000 
Common share equivalents excluded from computation of diluted EPS
16,711,000 
7,000 
6,067,000 
278,000 
Basis of Presentation Share-Based Compensation Expense (Details) (USD $)
3 Months Ended 9 Months Ended
Jun. 28, 2015
Jun. 29, 2014
Jun. 28, 2015
Jun. 29, 2014
Schedule Of Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
 
 
 
 
Share-based compensation expense before income taxes
$ 271,000,000 
$ 274,000,000 
$ 793,000,000 
$ 806,000,000 
Related income tax benefit
(58,000,000)
(42,000,000)
(145,000,000)
(151,000,000)
Share-based compensation expense, net of income taxes
213,000,000 
232,000,000 
648,000,000 
655,000,000 
Share-based compensation expense related to share-based awards granted during period
 
 
173,000,000 
177,000,000 
Cost of equipment and services revenues
 
 
 
 
Schedule Of Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
 
 
 
 
Share-based compensation expense before income taxes
10,000,000 
12,000,000 
33,000,000 
37,000,000 
Research and development
 
 
 
 
Schedule Of Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
 
 
 
 
Share-based compensation expense before income taxes
176,000,000 
174,000,000 
508,000,000 
510,000,000 
Selling, general and administrative
 
 
 
 
Schedule Of Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
 
 
 
 
Share-based compensation expense before income taxes
85,000,000 
88,000,000 
252,000,000 
259,000,000 
Restricted Stock [Member]
 
 
 
 
Schedule Of Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
 
 
 
 
Unrecognized compensation costs related to non-vested restricted stock units
$ 1,500,000,000 
 
$ 1,500,000,000 
 
Weighted average period over which unrecognized compensation expense related to non-vested restricted stock units is expected to be recognized
 
 
2 years 0 months 
 
Equity Compensation Plans Consolidated [Member]
 
 
 
 
Schedule Of Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
 
 
 
 
Net share-based awards granted, after forfeitures and cancellations, in fiscal year as percent of total outstanding stock at beginning of fiscal period
0.80% 
0.80% 
0.80% 
0.80% 
Total share based awards granted in fiscal year as percent of total outstanding stock at end of fiscal period
0.90% 
0.90% 
0.90% 
0.90% 
Composition of Certain Financial Statement Items Inventories (Details) (USD $)
In Millions, unless otherwise specified
Jun. 28, 2015
Sep. 28, 2014
Inventory, Net [Abstract]
 
 
Raw materials
$ 1 
$ 1 
Work-in-process
755 
656 
Finished goods
827 
801 
Inventories
$ 1,583 
$ 1,458 
Composition of Certain Financial Statement Items Other Current Liabilities (Details) (USD $)
In Millions, unless otherwise specified
Jun. 28, 2015
Sep. 28, 2014
Other Liabilities, Current [Abstract]
 
 
Customer incentives and other customer-related liabilities
$ 1,843 
$ 1,777 
Other
451 
466 
Other current liabilities
$ 2,294 
$ 2,243 
Composition of Certain Financial Statement Items Other Costs and Expenses (Details)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended 3 Months Ended 9 Months Ended
Jun. 28, 2015
USD ($)
Jun. 29, 2014
USD ($)
Sep. 29, 2013
USD ($)
Mar. 29, 2015
China, Yuan Renminbi
CNY
Mar. 29, 2015
United States of America, Dollars
USD ($)
Jun. 28, 2015
Unallocated Other Income [Member]
USD ($)
Jun. 29, 2014
Other Segments [Member]
USD ($)
Government Fine Amount
 
 
 
 6,088 
$ 975 
$ 975 
 
Goodwill impairment charge
255 
16 
 
 
 
235 
 
Impairment of Intangible Assets
 
 
 
 
 
11 
 
Long-lived asset and goodwill impairment charges
304 
642 
 
 
 
 
607 
ParkerVision verdict amount
 
 
$ 173 
 
 
 
 
Composition of Certain Financial Statement Items Investment Income, Net (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Jun. 28, 2015
Jun. 29, 2014
Jun. 28, 2015
Jun. 29, 2014
Investment Income, Net [Abstract]
 
 
 
 
Interest and dividend income
$ 128 
$ 139 
$ 400 
$ 460 
Interest expense
(32)
0 
(34)
(4)
Net realized gains on marketable securities
117 
290 
381 
660 
Net realized gains on other investments
5 
8 
18 
25 
Impairment losses on marketable securities
(42)
(8)
(131)
(149)
Impairment losses on other investments
(13)
(3)
(30)
(21)
Net gains (losses) on derivative instruments
10 
(6)
16 
(1)
Equity in net losses of investees
(10)
(2)
(23)
(7)
Net gains on deconsolidation of subsidiaries
0 
4 
3 
5 
Investment income, net
$ 163 
$ 422 
$ 600 
$ 968 
Income Taxes (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended 9 Months Ended 3 Months Ended
Jun. 28, 2015
Mar. 29, 2015
Dec. 28, 2014
Sep. 28, 2014
Sep. 27, 2015
Scenario, Forecast [Member]
Jun. 28, 2015
Unallocated Other Income [Member]
Mar. 29, 2015
United States of America, Dollars
Income Tax Disclosure [Abstract]
 
 
 
 
 
 
 
Effective income tax rate for continuing operations
15.00% 
 
 
14.00% 
19.00% 
 
 
Tax benefits from foreign income taxed at rates lower than rates in the United States
 
 
 
20.00% 
19.00% 
 
 
Government Fine Amount
 
 
 
 
 
$ 975 
$ 975 
Recognized Tax Benefit Resulting from Settlement with Taxing Authority
 
61 
 
 
 
 
 
Tax Benefit Recognized In Period Related To Prior Period Attributable To Research and Development Tax Credit
 
 
$ 101 
 
 
 
 
Stockholders' Equity Changes in Stockholders' Equity (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Jun. 28, 2015
Mar. 29, 2015
Dec. 28, 2014
Jun. 29, 2014
Mar. 30, 2014
Dec. 29, 2013
Jun. 28, 2015
Jun. 29, 2014
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
Balance at beginning of period
 
 
$ 39,166 
 
 
 
$ 39,166 
 
Net income attributable to Qualcomm
1,184 
 
 
2,238 
 
 
4,209 
6,073 
Net loss attributable to noncontrolling interests
(1)
 
 
(1)
 
 
(2)
(3)
Net income
1,183 
 
 
2,237 
 
 
4,207 
6,070 
Other comprehensive loss
31 
 
 
15 
 
 
(131)
72 
Common stock issued under employee benefit plans and related tax benefits
 
 
 
 
 
 
657 
 
Share-based compensation
 
 
 
 
 
 
834 
 
Tax withholding related to vesting of share-based payments
 
 
 
 
 
 
(336)
 
Dividends
(771)
(702)
(710)
(718)
(599)
(599)
(2,183)
(1,916)
Stock repurchases
 
 
 
 
 
 
(9,016)
 
Other
 
 
 
 
 
 
(2)
 
Balance at end of period
33,196 
 
 
 
 
 
33,196 
 
Qualcomm Stockholders' Equity [Member]
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
Balance at beginning of period
 
 
39,169 
 
 
 
39,169 
 
Net income attributable to Qualcomm
 
 
 
 
 
 
4,209 
 
Other comprehensive loss attributable to Qualcomm
 
 
 
 
 
 
(131)
 
Common stock issued under employee benefit plans and related tax benefits
 
 
 
 
 
 
657 
 
Share-based compensation
 
 
 
 
 
 
834 
 
Tax withholding related to vesting of share-based payments
 
 
 
 
 
 
(336)
 
Dividends
 
 
 
 
 
 
(2,183)
 
Stock repurchases
 
 
 
 
 
 
(9,016)
 
Other
 
 
 
 
 
 
(1)
 
Balance at end of period
33,202 
 
 
 
 
 
33,202 
 
Noncontrolling Interests [Member]
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
Balance at beginning of period
 
 
(3)
 
 
 
(3)
 
Net loss attributable to noncontrolling interests
 
 
 
 
 
 
(2)
 
Other comprehensive loss attributable to noncontrolling Interests
 
 
 
 
 
 
0 
 
Common stock issued under employee benefit plans and related tax benefits
 
 
 
 
 
 
0 
 
Share-based compensation
 
 
 
 
 
 
0 
 
Tax withholding related to vesting of share-based payments
 
 
 
 
 
 
0 
 
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders
 
 
 
 
 
 
0 
 
Stock repurchases
 
 
 
 
 
 
0 
 
Other
 
 
 
 
 
 
(1)
 
Balance at end of period
$ (6)
 
 
 
 
 
$ (6)
 
Stockholders' Equity Accumulated Other Comprehensive Income (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Jun. 28, 2015
Jun. 29, 2014
Jun. 28, 2015
Jun. 29, 2014
Unrealized Gain (Loss) on Interest Rate Cash Flow Hedges, Pretax, Accumulated Other Comprehensive Income (Loss)
$ 56 
 
 
 
Description of Recognition of Interest Rate Cash Flow Hedge Gain (Loss)
recognized over the 10- and 30-year lives of the underlying notes associated with the U.S. Treasury rate locks 
 
 
 
Investment income, net
163 
422 
600 
968 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
 
 
Beginning balance total accumulated other comprehensive income
 
 
634 
 
Ending balance total accumulated other comprehensive income
503 
 
503 
 
Foreign Currency Translation Adjustment [Member]
 
 
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
 
 
Beginning balance total accumulated other comprehensive income
 
 
(113)
 
Other comprehensive (loss) income before reclassifications
 
 
(25)
 
Reclassifications from accumulated other comprehensive income
 
 
0 
 
Other comprehensive (loss) income
 
 
(25)
 
Ending balance total accumulated other comprehensive income
(138)
 
(138)
 
Noncredit Other-than-Temporary Impairment Losses and Subsequent Changes in Fair Value for Certain Available-for-Sale Debt Securities [Member]
 
 
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
 
 
Beginning balance total accumulated other comprehensive income
 
 
24 
 
Other comprehensive (loss) income before reclassifications
 
 
(12)
 
Reclassifications from accumulated other comprehensive income
 
 
6 
 
Other comprehensive (loss) income
 
 
(6)
 
Ending balance total accumulated other comprehensive income
18 
 
18 
 
Net Unrealized Gain (Loss) on Other Available-for-Sale Securities [Member]
 
 
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
 
 
Beginning balance total accumulated other comprehensive income
 
 
723 
 
Other comprehensive (loss) income before reclassifications
 
 
14 
 
Reclassifications from accumulated other comprehensive income
 
 
(172)
 
Other comprehensive (loss) income
 
 
(158)
 
Ending balance total accumulated other comprehensive income
565 
 
565 
 
Net Unrealized Gain (Loss) on Derivative Instruments [Member]
 
 
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
 
 
Beginning balance total accumulated other comprehensive income
 
 
0 
 
Other comprehensive (loss) income before reclassifications
 
 
58 
 
Reclassifications from accumulated other comprehensive income
 
 
0 
 
Other comprehensive (loss) income
 
 
58 
 
Ending balance total accumulated other comprehensive income
58 
 
58 
 
Total Accumulated Other Comprehensive Income Attributable to Qualcomm [Member]
 
 
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
 
 
Beginning balance total accumulated other comprehensive income
 
 
634 
 
Other comprehensive (loss) income before reclassifications
 
 
35 
 
Reclassifications from accumulated other comprehensive income
 
 
(166)
 
Other comprehensive (loss) income
 
 
(131)
 
Ending balance total accumulated other comprehensive income
503 
 
503 
 
Reclassification out of Accumulated Other Comprehensive Income [Member]
 
 
 
 
Investment income, net
48 
163 
166 
287 
Revenues Costs And Expenses
 
$ 7 
 
$ 20 
Stockholders' Equity (Details) (USD $)
9 Months Ended 1 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended
Jun. 28, 2015
Mar. 9, 2015
Jul. 22, 2015
Subsequent Event
Jun. 28, 2015
Noncontrolling Interests [Member]
Jun. 28, 2015
Qualcomm Stockholders' Equity [Member]
Jun. 28, 2015
Accelerated Share Repurchase Program [Member]
Jun. 28, 2015
Open Market Repurchases [Member]
Jun. 29, 2014
Open Market Repurchases [Member]
Stock repurchase program [Abstract]
 
 
 
 
 
 
 
 
Authorized amount
 
$ 15,000,000,000 
 
 
 
 
 
 
Upfront payment under Accelerated Share Repurchase agreements
5,000,000,000 
 
 
 
 
 
 
 
Shares repurchased and retired, shares
 
 
8,018,000 
 
 
57,737,000 
56,652,000 
44,609,000 
Stock Repurchased and Retired During Period, Value
9,016,000,000 
 
510,000,000 
0 
9,016,000,000 
4,000,000,000 
4,000,000,000 
3,400,000,000 
Unsettled Forward Contract Indexed to Issuer's Stock, classified within Stockholder's Equity
 
 
 
 
 
1,000,000,000 
 
 
Accounting for share repurchases in Balance Sheet
To reflect share repurchases in the condensed consolidated balance sheet, the Company (i) reduces common stock for the par value of the shares, (ii) reduces paid-in capital for the amount in excess of par to zero during the quarter in which the shares are repurchased and (iii) records the residual amount to retained earnings 
 
 
 
 
 
 
 
Stock Repurchase Program, Remaining Authorized Repurchase Amount
$ 9,100,000,000 
 
 
 
 
 
 
 
Stockholders' Equity Dividends (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended 0 Months Ended
Jun. 28, 2015
Mar. 29, 2015
Dec. 28, 2014
Jun. 29, 2014
Mar. 30, 2014
Dec. 29, 2013
Jun. 28, 2015
Jun. 29, 2014
Jul. 7, 2015
Subsequent Event
Dividends
 
 
 
 
 
 
 
 
 
Dividends Payable, Date Declared
 
 
 
 
 
 
 
 
Jul. 07, 2015 
Dividends per share announced
$ 0.48 
$ 0.42 
$ 0.42 
$ 0.42 
$ 0.35 
$ 0.35 
$ 1.32 
$ 1.12 
$ 0.48 
Dividends Payable, Date to be Paid
 
 
 
 
 
 
 
 
Sep. 23, 2015 
Dividends Payable, Date of Record
 
 
 
 
 
 
 
 
Sep. 02, 2015 
Dividends
$ 771 
$ 702 
$ 710 
$ 718 
$ 599 
$ 599 
$ 2,183 
$ 1,916 
 
Debt (Details) (USD $)
3 Months Ended 9 Months Ended
Jun. 28, 2015
Jun. 28, 2015
Sep. 28, 2014
Short-term Debt [Line Items]
 
 
 
Line of Credit Facility, Initiation Date
 
Feb. 18, 2015 
 
Line of Credit Facility, Maximum Borrowing Capacity
$ 4,000,000,000 
$ 4,000,000,000 
 
Line of Credit Facility, Expiration Date
 
Feb. 18, 2020 
 
Line of Credit Facility, Interest Rate During Period
at the option of the Company, at either LIBOR (determined in accordance with the Revolving Credit Facility) plus a margin of 0.7% per annum or the Base Rate (determined in accordance with the Revolving Credit Facility), plus an initial margin of 0% per annum. 
 
 
Line of Credit Facility, Commitment Fee Percentage, per annum
0.05% 
 
 
Line of Credit Facility, Covenant Terms
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 
 
 
Line of Credit Facility, Covenant Compliance
the Company was in compliance with the covenants 
 
 
Short-term debt
1,000,000,000 
1,000,000,000 
0 
Commercial Paper [Member]
 
 
 
Short-term Debt [Line Items]
 
 
 
Short-term debt, Maximum Borrowing Capacity
$ 4,000,000,000 
$ 4,000,000,000 
 
Short-term debt, Weighted Average Interest Rate
0.14% 
0.14% 
 
Minimum [Member] |
Commercial Paper [Member]
 
 
 
Short-term Debt [Line Items]
 
 
 
Short-term debt Instrument, Term
1 day 
 
 
Maximum [Member] |
Commercial Paper [Member]
 
 
 
Short-term Debt [Line Items]
 
 
 
Short-term debt Instrument, Term
397 days 
 
 
Weighted Average [Member] |
Commercial Paper [Member]
 
 
 
Short-term Debt [Line Items]
 
 
 
Short-term debt Instrument, Remaining Term
51 days 
 
 
Long-term Debt (Details) (USD $)
3 Months Ended 9 Months Ended
Jun. 28, 2015
Jun. 28, 2015
Jun. 29, 2014
Sep. 28, 2014
Debt Instrument [Line Items]
 
 
 
 
Long-term Debt, Face Amount
$ 10,000,000,000 
$ 10,000,000,000 
 
 
Proceeds from long-term debt
 
9,937,000,000 
0 
 
Long-term Debt, Principal Amount
10,000,000,000 
10,000,000,000 
 
 
Debt Instrument, Unamortized Discount
(65,000,000)
(65,000,000)
 
 
Hedge Accounting Fair Value Adjustments Related To Long Term Debt
(22,000,000)
(22,000,000)
 
 
Long-term debt, carrying amount
9,913,000,000 
9,913,000,000 
 
0 
Long-term Debt, Fair Value
9,800,000,000 
9,800,000,000 
 
 
Interest Rate Swaps, Aggregate Notional Amount
3,000,000,000 
3,000,000,000 
 
 
Interest Expense, Long-term Debt
30,000,000 
30,000,000 
 
 
Repayments of long-term debt in fiscal 2018
1,500,000,000 
1,500,000,000 
 
 
Repayments of long-term debt after fiscal 2019
8,500,000,000 
8,500,000,000 
 
 
Floating-rate notes due May 18, 2018 [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Long-term Debt, Principal Amount
250,000,000 
250,000,000 
 
 
Debt Instrument, Effective Interest Rate
0.61% 
0.61% 
 
 
Debt Instrument, Interest Rate Terms
 
The interest rate on the floating rate notes due in 2018 and the floating rate notes due in 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. 
 
 
Floating-rate notes due May 20, 2020 [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Long-term Debt, Principal Amount
250,000,000 
250,000,000 
 
 
Debt Instrument, Effective Interest Rate
0.88% 
0.88% 
 
 
Debt Instrument, Interest Rate Terms
 
The interest rate on the floating rate notes due in 2018 and the floating rate notes due in 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. 
 
 
Fixed-rate 1.40% notes due May 18, 2018 [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Long-term Debt, Principal Amount
1,250,000,000 
1,250,000,000 
 
 
Debt Instrument, Effective Interest Rate
0.68% 
0.68% 
 
 
Fixed-rate 2.25% notes due May 20, 2020 [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Long-term Debt, Principal Amount
1,750,000,000 
1,750,000,000 
 
 
Debt Instrument, Effective Interest Rate
1.78% 
1.78% 
 
 
Fixed-rate 3.00% notes due May 20, 2022 [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Long-term Debt, Principal Amount
2,000,000,000 
2,000,000,000 
 
 
Debt Instrument, Effective Interest Rate
2.28% 
2.28% 
 
 
Fixed-rate 3.45% notes due May 20, 2025 [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Long-term Debt, Principal Amount
2,000,000,000 
2,000,000,000 
 
 
Debt Instrument, Effective Interest Rate
3.46% 
3.46% 
 
 
Fixed-rate 4.65% notes due May 20, 2035 [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Long-term Debt, Principal Amount
1,000,000,000 
1,000,000,000 
 
 
Debt Instrument, Effective Interest Rate
4.74% 
4.74% 
 
 
Fixed-rate 4.80% notes due May 20, 2045 [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Long-term Debt, Principal Amount
$ 1,500,000,000 
$ 1,500,000,000 
 
 
Debt Instrument, Effective Interest Rate
4.71% 
4.71% 
 
 
Commitments and Contingencies (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Jun. 28, 2015
Sep. 29, 2013
Legal Proceedings [Abstract]
 
 
ParkerVision verdict amount
 
$ 173 
Assessment of SEC and DOJ investigation
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. 
 
Commitments and Contingencies Purchase Obligations (Details) (USD $)
Jun. 28, 2015
Unrecorded Unconditional Purchase Obligation [Line Items]
 
Unrecorded obligations for remainder of fiscal 2015
$ 2,200,000,000 
Unrecorded obligations for fiscal 2016
1,200,000,000 
Unrecorded obligations for fiscal 2017
921,000,000 
Unrecorded obligations for fiscal 2018
791,000,000 
Unrecorded obligations for fiscal 2019
721,000,000 
Unrecorded obligations thereafter
175,000,000 
Inventories [Member]
 
Unrecorded Unconditional Purchase Obligation [Line Items]
 
Unrecorded obligations for remainder of fiscal 2015
1,800,000,000 
Unrecorded obligations for fiscal 2016
1,000,000,000 
Unrecorded obligations for fiscal 2017
771,000,000 
Unrecorded obligations for fiscal 2018
703,000,000 
Unrecorded obligations for fiscal 2019
651,000,000 
Unrecorded obligations thereafter
$ 152,000,000 
Commitments and Contingencies Capital and Operating Leases (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Jun. 28, 2015
Capital and operating leases [Abstract]
 
Description of Leasing Arrangements, Operating Leases
The Company leases certain of its land, facilities and equipment under noncancelable operating leases, with terms ranging from less than one year to 16 years and with provisions in certain leases for cost-of-living increases. 
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
 
Remainder of fiscal 2015 - Operating leases
$ 23 
Fiscal 2016 - Operating leases
84 
Fiscal 2017 - Operating leases
64 
Fiscal 2018 - Operating leases
33 
Fiscal 2019 - Operating leases
21 
Thereafter - Operating leases
$ 16 
Commitments and Contingencies Equity Funding Commitments (Details) (USD $)
In Millions, unless otherwise specified
Jun. 28, 2015
Commitments and Contingencies Disclosure [Abstract]
 
Other Commitments
$ 197 
Other commitments for remainder of fiscal 2015
$ 105 
Segment Information (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended
Jun. 28, 2015
Jun. 29, 2014
Jun. 28, 2015
Jun. 29, 2014
Sep. 28, 2014
Jun. 28, 2015
QCT [Member]
Jun. 29, 2014
QCT [Member]
Jun. 28, 2015
QCT [Member]
Jun. 29, 2014
QCT [Member]
Sep. 28, 2014
QCT [Member]
Jun. 28, 2015
QTL [Member]
Jun. 29, 2014
QTL [Member]
Jun. 28, 2015
QTL [Member]
Jun. 29, 2014
QTL [Member]
Sep. 28, 2014
QTL [Member]
Jun. 28, 2015
QSI [Member]
Jun. 29, 2014
QSI [Member]
Jun. 28, 2015
QSI [Member]
Jun. 29, 2014
QSI [Member]
Sep. 28, 2014
QSI [Member]
Jun. 28, 2015
Reconciling Items [Member]
Jun. 29, 2014
Reconciling Items [Member]
Jun. 28, 2015
Reconciling Items [Member]
Jun. 29, 2014
Reconciling Items [Member]
Sep. 28, 2014
Reconciling Items [Member]
Jun. 28, 2015
Nonreportable Segments [Member]
Jun. 29, 2014
Nonreportable Segments [Member]
Jun. 28, 2015
Nonreportable Segments [Member]
Jun. 29, 2014
Nonreportable Segments [Member]
Jun. 28, 2015
Unallocated cost of equipment and services revenues [Member]
Jun. 29, 2014
Unallocated cost of equipment and services revenues [Member]
Jun. 28, 2015
Unallocated cost of equipment and services revenues [Member]
Jun. 29, 2014
Unallocated cost of equipment and services revenues [Member]
Jun. 28, 2015
Unallocated research and development expenses [Member]
Jun. 29, 2014
Unallocated research and development expenses [Member]
Jun. 28, 2015
Unallocated research and development expenses [Member]
Jun. 29, 2014
Unallocated research and development expenses [Member]
Jun. 28, 2015
Unallocated selling, general and administrative expenses [Member]
Jun. 29, 2014
Unallocated selling, general and administrative expenses [Member]
Jun. 28, 2015
Unallocated selling, general and administrative expenses [Member]
Jun. 29, 2014
Unallocated selling, general and administrative expenses [Member]
Jun. 28, 2015
Unallocated Other Income [Member]
Jun. 29, 2014
Unallocated Other Income [Member]
Jun. 28, 2015
Unallocated Other Income [Member]
Jun. 29, 2014
Unallocated Other Income [Member]
Jun. 28, 2015
Unallocated Investment Income, Net [Member]
Jun. 29, 2014
Unallocated Investment Income, Net [Member]
Jun. 28, 2015
Unallocated Investment Income, Net [Member]
Jun. 29, 2014
Unallocated Investment Income, Net [Member]
Jun. 28, 2015
Intersegment Eliminations [Member]
Jun. 29, 2014
Intersegment Eliminations [Member]
Jun. 28, 2015
Intersegment Eliminations [Member]
Jun. 29, 2014
Intersegment Eliminations [Member]
Mar. 29, 2015
United States of America, Dollars
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting, Factors Used to Identify Entity's Reportable Segments
 
 
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 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
$ 5,832 
$ 6,806 
$ 19,825 
$ 19,795 
 
$ 3,853 
$ 4,957 
$ 13,529 
$ 13,816 
 
$ 1,931 
$ 1,803 
$ 6,162 
$ 5,774 
 
$ 0 
$ 0 
$ 0 
$ 0 
 
$ 48 
$ 46 
$ 134 
$ 205 
 
$ 49 
$ 47 
$ 138 
$ 208 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ (1)
$ (1)
$ (4)
$ (3)
 
Earnings before taxes
1,398 
2,497 
5,236 
6,526 
 
289 
1,116 
2,185 
2,762 
 
1,654 
1,550 
5,395 
5,054 
 
(49)
(1)
(82)
(36)
 
(496)
(168)
(2,262)
(1,254)
 
(201)
(364)
(512)
(1,218)
(65)
(74)
(217)
(223)
(188)
(220)
(624)
(653)
(93)
(107)
(342)
(318)
(142)
184 
(1,221)
173 
193 
413 
655 
985 
0 
0 
(1)
0 
 
Government Fine Amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
975 
 
 
 
 
 
 
 
 
 
975 
Goodwill impairment charge
 
 
255 
16 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
235 
 
 
 
 
 
 
 
 
 
 
Impairment of Intangible Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
11 
 
 
 
 
 
 
 
 
 
 
Long-lived asset and goodwill impairment charges
 
 
304 
642 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
607 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unallocated acquisition-related expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
55 
62 
184 
186 
3 
3 
11 
26 
20 
6 
45 
19 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets
$ 52,295 
 
$ 52,295 
 
$ 48,574 
$ 2,977 
 
$ 2,977 
 
$ 3,639 
$ 522 
 
$ 522 
 
$ 161 
$ 697 
 
$ 697 
 
$ 484 
$ 48,099 
 
$ 48,099 
 
$ 44,290 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquisitions (Details) (Subsequent Event)
In Billions, except Per Share data, unless otherwise specified
Jul. 21, 2015
USD ($)
Jul. 21, 2015
GBP (£)
Jul. 14, 2015
Business Acquisition [Line Items]
 
 
 
Business Acquisition, Share Price
 
£ 9.00 
 
Business Acquisition, Total Price
$ 2.4 
£ 1.6 
 
Foreign Currency Exchange Rate, Remeasurement
 
 
1.5634 
Discontinued Operations (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended
Jun. 28, 2015
Jun. 29, 2014
Sep. 28, 2014
Discontinued Operations and Disposal Groups [Abstract]
 
 
 
Proceeds from sale of discontinued operations, net of cash sold
$ 0 
$ 788 
$ 788 
Gain on sale of discontinued operations
0 
665 
665 
Gain on sale of discontinued operations, net of income tax expense
 
 
$ 430 
Fair Value Measurements Fair Value Hierarchy (Details) (USD $)
In Millions, unless otherwise specified
Jun. 28, 2015
Assets, Fair Value Disclosure [Abstract]
 
Assets, Fair Value Disclosure, Recurring
$ 35,275 
Liabilities, Fair Value Disclosure [Abstract]
 
Total liabilities measured at fair value
333 
Level 1 [Member]
 
Assets, Fair Value Disclosure [Abstract]
 
Assets, Fair Value Disclosure, Recurring
6,858 
Liabilities, Fair Value Disclosure [Abstract]
 
Total liabilities measured at fair value
310 
Level 2 [Member]
 
Assets, Fair Value Disclosure [Abstract]
 
Assets, Fair Value Disclosure, Recurring
28,190 
Liabilities, Fair Value Disclosure [Abstract]
 
Total liabilities measured at fair value
23 
Level 3 [Member]
 
Assets, Fair Value Disclosure [Abstract]
 
Assets, Fair Value Disclosure, Recurring
227 
Liabilities, Fair Value Disclosure [Abstract]
 
Total liabilities measured at fair value
0 
Fair Value, Measurements, Recurring [Member]
 
Assets, Fair Value Disclosure [Abstract]
 
Cash equivalents
9,672 
Marketable Securities [Abstract]
 
U.S. Treasury securities and government-related securities
1,181 
Corporate bonds and notes
16,272 
Mortgage- and asset-backed securities
1,765 
Auction rate securities
46 
Common and preferred stock
1,436 
Equity funds
496 
Debt funds
4,042 
Total marketable securities
25,238 
Derivative instruments
9 
Other investments
356 1
Liabilities, Fair Value Disclosure [Abstract]
 
Derivative instruments
23 
Other liabilities
310 
Fair Value, Measurements, Recurring [Member] |
Level 1 [Member]
 
Assets, Fair Value Disclosure [Abstract]
 
Cash equivalents
5,207 
Marketable Securities [Abstract]
 
U.S. Treasury securities and government-related securities
44 
Corporate bonds and notes
0 
Mortgage- and asset-backed securities
0 
Auction rate securities
0 
Common and preferred stock
753 
Equity funds
496 
Debt funds
0 
Total marketable securities
1,293 
Derivative instruments
2 
Other investments
356 1
Liabilities, Fair Value Disclosure [Abstract]
 
Derivative instruments
0 
Other liabilities
310 
Fair Value, Measurements, Recurring [Member] |
Level 2 [Member]
 
Assets, Fair Value Disclosure [Abstract]
 
Cash equivalents
4,465 
Marketable Securities [Abstract]
 
U.S. Treasury securities and government-related securities
1,137 
Corporate bonds and notes
16,272 
Mortgage- and asset-backed securities
1,584 
Auction rate securities
0 
Common and preferred stock
683 
Equity funds
0 
Debt funds
4,042 
Total marketable securities
23,718 
Derivative instruments
7 
Other investments
0 1
Liabilities, Fair Value Disclosure [Abstract]
 
Derivative instruments
23 
Other liabilities
0 
Fair Value, Measurements, Recurring [Member] |
Level 3 [Member]
 
Assets, Fair Value Disclosure [Abstract]
 
Cash equivalents
0 
Marketable Securities [Abstract]
 
U.S. Treasury securities and government-related securities
0 
Corporate bonds and notes
0 
Mortgage- and asset-backed securities
181 
Auction rate securities
46 
Common and preferred stock
0 
Equity funds
0 
Debt funds
0 
Total marketable securities
227 
Derivative instruments
0 
Other investments
0 1
Liabilities, Fair Value Disclosure [Abstract]
 
Derivative instruments
0 
Other liabilities
$ 0 
Fair Value Measurements Activity Between Levels of the Fair Value Hierarchy, Assets (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Jun. 28, 2015
Jun. 29, 2014
Auction Rate Securities [Member]
 
 
Activity for Marketable Securities Classified Within Level 3 of the Valuation Hierarchy [Roll Forward]
 
 
Beginning balance of Level 3
$ 83 
$ 83 
Total realized and unrealized gains or losses included in investment income, net
0 
0 
Total realized and unrealized gains or losses included in other comprehensive income
0 
0 
Purchases
0 
0 
Sales
0 
0 
Settlements
(37)
0 
Transfers out of Level 3
0 
0 
Ending balance of Level 3
46 
83 
Mortgage- and asset-backed securities [Member]
 
 
Activity for Marketable Securities Classified Within Level 3 of the Valuation Hierarchy [Roll Forward]
 
 
Beginning balance of Level 3
186 
239 
Total realized and unrealized gains or losses included in investment income, net
3 
10 
Total realized and unrealized gains or losses included in other comprehensive income
(4)
(4)
Purchases
62 
86 
Sales
(46)
(124)
Settlements
(20)
(28)
Transfers out of Level 3
0 
(2)
Ending balance of Level 3
$ 181 
$ 177 
Marketable Securities (Details) (USD $)
3 Months Ended 9 Months Ended
Jun. 29, 2014
Jun. 29, 2014
Jun. 28, 2015
Sep. 28, 2014
Jun. 28, 2015
U.S. Treasury securities and government-related securities [Member]
Sep. 28, 2014
U.S. Treasury securities and government-related securities [Member]
Jun. 28, 2015
Corporate bonds and notes
Sep. 28, 2014
Corporate bonds and notes
Jun. 28, 2015
Mortgage- and asset-backed securities [Member]
Sep. 28, 2014
Mortgage- and asset-backed securities [Member]
Jun. 28, 2015
Auction rate securities
Sep. 28, 2014
Auction rate securities
Jun. 28, 2015
Common and preferred stock
Sep. 28, 2014
Common and preferred stock
Jun. 28, 2015
Equity funds
Sep. 28, 2014
Equity funds
Jun. 28, 2015
Debt funds
Sep. 28, 2014
Debt funds
Jul. 14, 2015
Subsequent Event [Member]
Jul. 21, 2015
Subsequent Event [Member]
United Kingdom, Pounds
Jul. 21, 2015
Subsequent Event [Member]
United States of America, Dollars
Trading Securities [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Trading - Current
 
 
$ 516,000,000 
$ 511,000,000 
$ 329,000,000 
$ 320,000,000 
$ 187,000,000 
$ 191,000,000 
$ 0 
$ 0 
 
 
 
 
 
 
 
 
 
 
 
Trading - Noncurrent
 
 
637,000,000 
642,000,000 
6,000,000 
38,000,000 
379,000,000 
367,000,000 
252,000,000 
237,000,000 
 
 
 
 
 
 
 
 
 
 
 
Available-for-sale Securities [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Available-for-sale - Current
 
 
10,828,000,000 
9,147,000,000 
138,000,000 
805,000,000 
8,628,000,000 
6,274,000,000 
1,297,000,000 
1,063,000,000 
0 
0 
550,000,000 
192,000,000 
0 
0 
215,000,000 
813,000,000 
 
 
 
Available-for-sale - Noncurrent
 
 
12,468,000,000 
13,025,000,000 
708,000,000 
392,000,000 
7,078,000,000 
7,649,000,000 
216,000,000 
195,000,000 
46,000,000 
83,000,000 
886,000,000 
1,605,000,000 
496,000,000 
541,000,000 
3,038,000,000 
2,560,000,000 
 
 
 
Fair Value Option [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair value option - Current
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0 
0 
 
 
 
Fair value option - Noncurrent
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
789,000,000 
790,000,000 
 
 
 
Total marketable securities - Current
 
 
11,344,000,000 
9,658,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total marketable securities - Noncurrent
 
 
13,894,000,000 
14,457,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restricted Marketable Securities
 
 
 
 
79,000,000 
 
2,900,000,000 
 
790,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
Restricted Cash and Cash Equivalents, Current
 
 
47,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Threshold To Set Aside Marketable Securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,900,000,000 
2,900,000,000 
Foreign Currency Exchange Rate, Remeasurement
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.5634 
 
 
Effective ownership interest in debt fund (fair value option)
 
 
25.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net increases in fair value recognized in investment income
$ 12,000,000 
$ 30,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Marketable Securities Available-for-sale Securities (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Jun. 28, 2015
Jun. 29, 2014
Jun. 28, 2015
Jun. 29, 2014
Sep. 28, 2014
Contractual maturities of available-for-sale debt securities [Abstract]
 
 
 
 
 
Years to Maturity - Less Than One Year
$ 3,750 
 
$ 3,750 
 
 
Years to Maturity - One to Five Years
11,156 
 
11,156 
 
 
Years to Maturity - Five to Ten Years
1,005 
 
1,005 
 
 
Years to Maturity - Greater Than Ten Years
641 
 
641 
 
 
Years to Maturity - No Single Maturity Date
4,812 
 
4,812 
 
 
Realized Gains and Losses on Sales of Available-for-sale Securities [Abstract]
 
 
 
 
 
Gross Realized Gains
126 
267 
434 
610 
 
Gross Realized Losses
(10)
(8)
(48)
(16)
 
Net Realized Gains
116 
259 
386 
594 
 
Available-for-sale Securities [Abstract]
 
 
 
 
 
Available-for-sale Equity Securities, Amortized Cost Basis
1,543 
 
1,543 
 
1,769 
Available-for-sale Equity Securities, Accumulated Gross Unrealized Gain, before Tax
391 
 
391 
 
575 
Available-for-sale Equity Securities, Accumulated Gross Unrealized Loss, before Tax
(2)
 
(2)
 
(6)
Available-for-sale Securities Equity Securities, Fair Value
1,932 
 
1,932 
 
2,338 
Available-for-sale Debt Securities (including debt funds), Amortized Cost Basis
21,203 
 
21,203 
 
19,582 
Available-for-sale Debt Securities (including debt funds), Accumulated Gross Unrealized Gain, before Tax
253 
 
253 
 
312 
Available-for-sale Debt Securities (including debt funds), Accumulated Gross Unrealized Loss, before Tax
(92)
 
(92)
 
(60)
Available-for-sale Debt Securities, Fair Value
21,364 
 
21,364 
 
19,834 
Cost
22,746 
 
22,746 
 
21,351 
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax
644 
 
644 
 
887 
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax
(94)
 
(94)
 
(66)
Fair Value
23,296 
 
23,296 
 
22,172 
Investments Classified as Available-for-sale in a Continuous Unrealized Loss Position Deemed to be Temporary [Abstract]
 
 
 
 
 
Less than 12 months - Fair Value
9,689 
 
9,689 
 
5,906 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss
(83)
 
(83)
 
(38)
More than 12 months - Fair Value
269 
 
269 
 
675 
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss
(11)
 
(11)
 
(28)
U.S. Treasury securities and government-related securities [Member]
 
 
 
 
 
Investments Classified as Available-for-sale in a Continuous Unrealized Loss Position Deemed to be Temporary [Abstract]
 
 
 
 
 
Less than 12 months - Fair Value
313 
 
313 
 
279 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss
(2)
 
(2)
 
(2)
More than 12 months - Fair Value
0 
 
0 
 
0 
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss
0 
 
0 
 
0 
Corporate bonds and notes
 
 
 
 
 
Investments Classified as Available-for-sale in a Continuous Unrealized Loss Position Deemed to be Temporary [Abstract]
 
 
 
 
 
Less than 12 months - Fair Value
7,413 
 
7,413 
 
4,924 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss
(59)
 
(59)
 
(31)
More than 12 months - Fair Value
142 
 
142 
 
104 
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss
(9)
 
(9)
 
(4)
Mortgage- and asset-backed securities [Member]
 
 
 
 
 
Investments Classified as Available-for-sale in a Continuous Unrealized Loss Position Deemed to be Temporary [Abstract]
 
 
 
 
 
Less than 12 months - Fair Value
874 
 
874 
 
484 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss
(2)
 
(2)
 
(1)
More than 12 months - Fair Value
16 
 
16 
 
52 
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss
0 
 
0 
 
(1)
Auction rate securities
 
 
 
 
 
Investments Classified as Available-for-sale in a Continuous Unrealized Loss Position Deemed to be Temporary [Abstract]
 
 
 
 
 
Less than 12 months - Fair Value
0 
 
0 
 
0 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss
0 
 
0 
 
0 
More than 12 months - Fair Value
46 
 
46 
 
83 
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss
(1)
 
(1)
 
(1)
Common and preferred stock
 
 
 
 
 
Investments Classified as Available-for-sale in a Continuous Unrealized Loss Position Deemed to be Temporary [Abstract]
 
 
 
 
 
Less than 12 months - Fair Value
155 
 
155 
 
86 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss
(2)
 
(2)
 
(3)
More than 12 months - Fair Value
18 
 
18 
 
52 
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss
0 
 
0 
 
(3)
Debt funds
 
 
 
 
 
Investments Classified as Available-for-sale in a Continuous Unrealized Loss Position Deemed to be Temporary [Abstract]
 
 
 
 
 
Less than 12 months - Fair Value
934 
 
934 
 
133 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss
(18)
 
(18)
 
(1)
More than 12 months - Fair Value
47 
 
47 
 
384 
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss
$ (1)
 
$ (1)
 
$ (19)
Subsequent Event (Details) (Subsequent Event [Member], USD $)
1 Months Ended
Jul. 22, 2015
Subsequent Event [Line Items]
 
Spending base
$ 7,300,000,000 
Minimum [Member]
 
Subsequent Event [Line Items]
 
Restructuring and Related Cost, Expected Cost
350,000,000 
Maximum [Member]
 
Subsequent Event [Line Items]
 
Restructuring and Related Cost, Expected Cost
450,000,000 
Fourth quarter of Fiscal 2015 [Member] |
Minimum [Member]
 
Subsequent Event [Line Items]
 
Restructuring and Related Cost, Expected Cost
100,000,000 
Fourth quarter of Fiscal 2015 [Member] |
Maximum [Member]
 
Subsequent Event [Line Items]
 
Restructuring and Related Cost, Expected Cost
200,000,000 
Reduced operating expenses [Member]
 
Subsequent Event [Line Items]
 
Effect on Future Earnings, Amount
1,100,000,000 
Reduced value of share-based awards [Member]
 
Subsequent Event [Line Items]
 
Effect on Future Earnings, Amount
$ 300,000,000