QUALCOMM INC/DE, 10-Q filed on 7/19/2017
Quarterly Report
v3.7.0.1
Document and Entity Information Document - shares
9 Months Ended
Jun. 25, 2017
Jul. 17, 2017
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 --09-24  
Entity Filer Category Large Accelerated Filer  
Document Type 10-Q  
Document Period End Date Jun. 25, 2017  
Document Fiscal Year Focus 2017  
Document Fiscal Period Focus Q3  
Amendment Flag false  
Entity Common Stock, Shares Outstanding   1,476,066,796
Entity Well-known Seasoned Issuer Yes  
Entity Voluntary Filers No  
Entity Current Reporting Status Yes  
v3.7.0.1
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Millions
Jun. 25, 2017
Sep. 25, 2016
Current assets:    
Cash and cash equivalents $ 14,909 $ 5,946
Marketable securities 5,954 12,702
Accounts receivable, net 3,532 2,219
Inventories 2,002 1,556
Other current assets 624 558
Total current assets 27,021 22,981
Marketable securities 16,889 13,702
Deferred tax assets 2,747 2,030
Property, plant and equipment, net 3,164 2,306
Goodwill 6,523 5,679
Other intangible assets, net 3,880 3,500
Other assets 4,155 2,161
Total assets 64,379 52,359
Current liabilities:    
Trade accounts payable 1,508 1,858
Payroll and other benefits related liabilities 1,089 934
Unearned revenues 513 509
Short-term debt 2,495 1,749
Other current liabilities 3,558 2,261
Total current liabilities 9,163 7,311
Unearned revenues 2,111 2,377
Long-term debt 19,403 10,008
Other liabilities 2,419 895
Total liabilities 33,096 20,591
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; 1,476 shares issued and outstanding 225 414
Retained earnings 30,778 30,936
Accumulated other comprehensive income 291 428
Total Qualcomm stockholders' equity 31,294 31,778
Noncontrolling interests (11) (10)
Total stockholders' equity 31,283 31,768
Total liabilities and stockholders' equity $ 64,379 $ 52,359
v3.7.0.1
CONDENSED CONSOLIDATED BALANCE SHEETS PARENTHETICALS - $ / shares
Jun. 25, 2017
Sep. 25, 2016
Preferred stock, par value $ 0.0001 $ 0.0001
Preferred stock, shares authorized 8,000,000 8,000,000
Preferred stock, shares outstanding 0 0
Common stock, par value $ 0.0001 $ 0.0001
Common stock, shares authorized 6,000,000,000 6,000,000,000
Common stock, shares issued 1,476,000,000 1,476,000,000
Common stock, shares outstanding 1,476,000,000 1,476,000,000
v3.7.0.1
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
shares in Millions, $ in Millions
3 Months Ended 9 Months Ended
Jun. 25, 2017
Jun. 26, 2016
Jun. 25, 2017
Jun. 26, 2016
Revenues:        
Equipment and services $ 4,121 $ 3,875 $ 11,949 $ 11,311
Licensing 1,250 2,169 4,438 6,059
Total revenues 5,371 6,044 16,387 17,370
Costs and expenses:        
Cost of revenues 2,488 2,534 7,140 7,210
Research and development 1,391 1,268 4,087 3,922
Selling, general and administrative 710 620 1,917 1,817
Other (Note 2) 9 30 962 (270)
Total costs and expenses 4,598 4,452 14,106 12,679
Operating income 773 1,592 2,281 4,691
Interest expense (133) (75) (330) (221)
Investment and other income, net (Note 2) 218 176 635 403
Income before income taxes 858 1,693 2,586 4,873
Income tax benefit (expense) 7 (250) (290) (770)
Net income 865 1,443 2,296 4,103
Net loss attributable to noncontrolling interests 1 1 1 3
Net income attributable to Qualcomm $ 866 $ 1,444 $ 2,297 $ 4,106
Basic earnings per share attributable to Qualcomm $ 0.59 $ 0.98 $ 1.55 $ 2.76
Diluted earnings per share attributable to Qualcomm $ 0.58 $ 0.97 $ 1.54 $ 2.74
Shares used in per share calculations:        
Basic 1,478 1,471 1,478 1,487
Diluted 1,491 1,486 1,491 1,500
Dividends per share announced $ 0.57 $ 0.53 $ 1.63 $ 1.49
v3.7.0.1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Jun. 25, 2017
Jun. 26, 2016
Jun. 25, 2017
Jun. 26, 2016
Net income $ 865 $ 1,443 $ 2,296 $ 4,103
Other comprehensive income (loss), net of income taxes:        
Foreign currency translation gains (losses) 138 5 128 (6)
Reclassification of foreign currency translation (gains) losses included in net income (1) 15 (1) 21
Noncredit other-than-temporary impairment losses related to certain available-for-sale debt securities and subsequent changes in fair value 0 1 6 (49)
Reclassification of net other-than-temporary losses on available-for-sale securities included in net income 1 27 82 128
Net unrealized gains (losses) on other available-for-sale securities 37 176 (104) 135
Reclassification of net realized gains on available-for-sale securities included in net income (72) (35) (200) (76)
Net unrealized losses on derivative instruments (40) (4) (43) (4)
Reclassification of net realized gains on derivative instruments (3) (1) (5) 0
Total other comprehensive income (loss) 60 184 (137) 149
Total comprehensive income 925 1,627 2,159 4,252
Comprehensive loss attributable to noncontrolling interests 1 1 1 3
Comprehensive income attributable to Qualcomm $ 926 $ 1,628 $ 2,160 $ 4,255
v3.7.0.1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Millions
9 Months Ended
Jun. 25, 2017
Jun. 26, 2016
Operating Activities:    
Net income $ 2,296 $ 4,103
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization expense 1,064 1,092
Indefinite and long-lived asset impairment charges 76 94
Income tax provision less than income tax payments (467) (236)
Gain on sale of wireless spectrum 0 (380)
Non-cash portion of share-based compensation expense 712 730
Incremental tax benefits from share-based compensation (38) (3)
Net realized gains on marketable securities and other investments (375) (142)
Impairment losses on marketable securities and other investments 163 138
Other items, net 14 0
Changes in assets and liabilities:    
Accounts receivable, net (1,021) 39
Inventories (182) 169
Other assets 111 153
Trade accounts payable (543) 263
Payroll, benefits and other liabilities 615 (434)
Unearned revenues (149) (270)
Net cash provided by operating activities 2,276 5,316
Investing Activities:    
Capital expenditures (428) (389)
Purchases of available-for-sale marketable securities (15,509) (12,960)
Proceeds from sales and maturities of available-for-sale marketable securities 19,643 10,303
Purchases of trading securities 0 (177)
Proceeds from sales and maturities of trading securities 0 779
Purchases of other marketable securities (705) 0
Proceeds from sales of other marketable securities 0 450
Deposits of investments designated as collateral (2,000) 0
Acquisitions and other investments, net of cash acquired (1,401) (663)
Proceeds from sale of wireless spectrum 0 232
Other items, net 58 196
Net cash used by investing activities (342) (2,229)
Financing Activities:    
Proceeds from short-term debt 6,848 6,633
Repayment of short-term debt (7,598) (5,885)
Proceeds from long-term debt 10,953 0
Proceeds from issuance of common stock 331 422
Repurchases and retirements of common stock (1,027) (3,698)
Dividends paid (2,411) (2,208)
Incremental tax benefits from share-based compensation 38 3
Other items, net (133) (32)
Net cash provided (used) by financing activities 7,001 (4,765)
Effect of exchange rate changes on cash and cash equivalents 28 3
Net increase (decrease) in cash and cash equivalents 8,963 (1,675)
Cash and cash equivalents at beginning of period 5,946 7,560
Cash and cash equivalents at end of period $ 14,909 $ 5,885
v3.7.0.1
Basis of Presentation (Notes)
9 Months Ended
Jun. 25, 2017
Basis of Presentation [Abstract]  
Basis of Presentation
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 25, 2016. 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 25, 2017 and June 26, 2016 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.
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 the weighted-average number of common shares outstanding during the reporting period. The dilutive common share equivalents, calculated using the treasury stock method, were 12,221,000 and 13,511,000 in the three and nine months ended June 25, 2017, respectively, and 14,812,000 and 13,325,000 in the three and nine months ended June 26, 2016, 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 561,000 and 3,815,000 in the three and nine months ended June 25, 2017, respectively, and 1,378,000 and 3,150,000 in the three and nine months ended June 26, 2016, 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 25,
2017
 
June 26,
2016
 
June 25,
2017
 
June 26,
2016
Cost of equipment and services revenues
$
10

 
$
10

 
$
30

 
$
31

Research and development
147

 
152

 
455

 
478

Selling, general and administrative
70

 
73

 
227

 
221

Share-based compensation expense before income taxes
227

 
235

 
712

 
730

Related income tax benefit
(28
)
 
(38
)
 
(113
)
 
(126
)
 
$
199

 
$
197

 
$
599

 
$
604


At June 25, 2017, total unrecognized compensation expense related to nonvested restricted stock units granted prior to that date was $1.1 billion, which is expected to be recognized over a weighted-average period of 1.8 years.
Recent Accounting Pronouncements. In May 2014, the FASB issued new guidance related to revenue recognition, which outlines a comprehensive revenue recognition model and supersedes most current revenue recognition guidance. The new guidance requires a company to recognize revenue as control of goods or services transfers to a customer at an amount that reflects the expected consideration to be received in exchange for those goods or services. It defines a five-step approach for recognizing revenue, which may require a company to use more judgment and make more estimates than under the current guidance. The Company will adopt the new guidance in the first quarter of fiscal 2019. Two methods of adoption are permitted: (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 guidance is recognized as an adjustment to the opening retained earnings balance. The Company currently expects the adoption of this new guidance to most significantly impact its licensing business. Specifically, the Company expects a change in the timing of revenues recognized from sales-based royalties. The Company currently recognizes sales-based royalties as revenues in the period in which such royalties are reported by licensees, which is after the conclusion of the quarter in which the licensees’ sales occur and when all other revenue recognition criteria are met. Under the new guidance, the Company will be required to estimate and recognize sales-based royalties in the period in which the associated sales occur, resulting in an acceleration of revenue recognition compared to the current method. Upon adoption of the new guidance, licenses to use portions of the Company’s intellectual property portfolio will be considered one performance obligation, and license fees will be recognized as revenues on a straight-line basis over the term of the license agreement, which is similar to the recognition of license revenues under the current guidance. The Company currently accounts for customer incentive arrangements in its licensing and chip businesses, including volume-related and other pricing rebates or cost reimbursements for marketing and other activities involving certain of the Company’s products and technologies, primarily based on the maximum potential liability. Under the new guidance, the Company expects to estimate the amount of the customer incentive. The Company does not otherwise expect the adoption of the new guidance will have a material impact on its businesses and is in the process of determining the adoption method.
In January 2016, the FASB issued new guidance on classifying and measuring financial instruments, which requires that (i) all equity investments, other than equity-method investments, in unconsolidated entities generally be measured at fair value through earnings and (ii) when the fair value option has been elected for financial liabilities, changes in fair value due to instrument-specific credit risk be recognized separately in other comprehensive income. Additionally, it changes the disclosure requirements for financial instruments. The new guidance will be effective for the Company starting in the first quarter of fiscal 2019. Early adoption is permitted for certain provisions. The Company does not intend to adopt any provisions of the new guidance early and is in the process of determining the effects the adoption will have on its consolidated financial statements.
In February 2016, the FASB issued new guidance related to leases that outlines a comprehensive lease accounting model and supersedes the current lease guidance. The new guidance requires lessees to recognize lease liabilities and corresponding right-of-use assets for all leases with lease terms of greater than 12 months. It also changes the definition of a lease and expands the disclosure requirements of lease arrangements. The new guidance must be adopted using the modified retrospective approach and will be effective for the Company starting in the first quarter of fiscal 2020. Early adoption is permitted. The Company does not intend to adopt the new guidance early and is in the process of determining the effects the adoption will have on its consolidated financial statements.
In March 2016, the FASB issued new guidance that changes the accounting for share-based payments, including income taxes, classification of awards and classification in the statement of cash flows. The new guidance will increase the number of shares an employer can withhold to cover income taxes on share-based payment awards and still qualify for the exemption to liability classification. In addition, under the new guidance, excess tax benefits or deficiencies associated with share-based payment awards will be recognized through earnings when the awards vest or settle, rather than in stockholders’ equity. As a result, subsequent to adoption, the Company’s income tax expense and associated effective tax rate will be impacted by fluctuations in stock price between the grant dates and vesting dates of equity awards. The new guidance will be effective for the Company starting in the first quarter of fiscal 2018.
In June 2016, the FASB issued new guidance that changes the accounting for recognizing impairments of financial assets. Under the new guidance, credit losses for certain types of financial instruments will be estimated based on expected losses. The new guidance also modifies the impairment models for available-for-sale debt securities and for purchased financial assets with credit deterioration since their origination. The new guidance will be effective for the Company starting in the first quarter of fiscal 2021. Early adoption is permitted starting in the first quarter of fiscal 2020. The Company is in the process of determining the effects the adoption will have on its consolidated financial statements as well as whether to adopt the new guidance early.
In August 2016, the FASB issued new guidance related to the classification of certain cash receipts and cash payments on the statement of cash flows. The accounting standard update will be effective for the Company beginning in the first quarter of fiscal 2019 on a retrospective basis, and early adoption is permitted. The Company does not intend to adopt the new guidance early and is in the process of determining the effects the adoption will have on its consolidated financial statements.
In October 2016, the FASB issued new guidance that changes the accounting for income tax effects of intra-entity transfers of assets other than inventory. Under the new guidance, the selling (transferring) entity is required to recognize a current tax expense or benefit upon transfer of the asset. Similarly, the purchasing (receiving) entity is required to recognize a deferred tax asset or deferred tax liability, as well as the related deferred tax benefit or expense, upon receipt of the asset. The new guidance will be effective for the Company starting in the first quarter of fiscal 2019 on a modified retrospective basis, and early adoption is permitted. The Company does not intend to adopt the new guidance early and is in the process of determining the effects the adoption will have on its consolidated financial statements.
v3.7.0.1
Composition of Certain Financial Statement Items (Notes)
9 Months Ended
Jun. 25, 2017
Balance Sheet Related Disclosures [Abstract]  
Composition of Certain Financial Statement Items
Composition of Certain Financial Statement Items
Accounts Receivable (in millions)
 
 
 
 
June 25,
2017
 
September 25,
2016
Trade, net of allowances for doubtful accounts of $11 and $1, respectively
$
3,500

 
$
2,194

Long-term contracts
22

 
20

Other
10

 
5

 
$
3,532

 
$
2,219


Approximately 75% of the increase in accounts receivable was due to the short payment of royalties reported by and deemed collectible from Apple’s contract manufacturers. This same amount is recorded in customer-related liabilities for Apple, since the Company does not have the contractual right to offset these amounts. The remaining increase in accounts receivable resulted from the accounts receivable relating to the Company’s recently formed RF360 Holdings joint venture (Note 8) and the timing of the collection of payments from certain of the Company’s other licensees.
Inventories (in millions)
 
 
 
 
June 25,
2017
 
September 25,
2016
Raw materials
$
80

 
$
1

Work-in-process
902

 
847

Finished goods
1,020

 
708

 
$
2,002

 
$
1,556


Other Current Liabilities (in millions)
 
 
 
 
June 25,
2017
 
September 25,
2016
Customer incentives and other customer-related liabilities
$
2,589

 
$
1,710

Other
969

 
551

 
$
3,558

 
$
2,261


Customer incentives and other customer-related liabilities substantially consist of amounts payable to customers for incentive and other arrangements, including volume-related and other pricing rebates and cost reimbursements for marketing and other activities involving certain of the Company’s products and technologies. The corresponding charges for such arrangements were recorded as a reduction to revenues.
Other Income, Costs and Expenses. Other expenses in the nine months ended June 25, 2017 consisted of a $927 million charge related to the KFTC fine (Note 6), including related foreign currency losses, and $35 million in restructuring and restructuring-related charges related to the Company’s Strategic Realignment Plan. Other expenses in the three months ended June 26, 2016 consisted of restructuring and restructuring-related charges related to the Company’s Strategic Realignment Plan. Other income in the nine months ended June 26, 2016 included a gain of $380 million on the sale of wireless spectrum in the United Kingdom that was held by the QSI (Qualcomm Strategic Initiative) segment in the first quarter of fiscal 2016 for $232 million in cash and $275 million in deferred payments due in 2020 to 2023, which were recorded at their present values in other assets. Other income in the nine months ended June 26, 2016 also included $158 million in restructuring and restructuring-related charges, which were partially offset by a $48 million gain on the sale of the Company’s business that provided augmented reality applications, both of which related to the Company’s Strategic Realignment Plan.
Investment and Other Income, Net (in millions)
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
June 25,
2017
 
June 26,
2016
 
June 25,
2017
 
June 26,
2016
Interest and dividend income
$
147

 
$
156

 
$
466

 
$
451

Net realized gains on marketable securities
124

 
56

 
330

 
99

Net realized gains on other investments
15

 
13

 
45

 
43

Impairment losses on marketable securities
(2
)
 
(20
)
 
(127
)
 
(109
)
Impairment losses on other investments
(13
)
 
(13
)
 
(36
)
 
(29
)
Equity in net losses of investees
(31
)
 
(18
)
 
(42
)
 
(49
)
Net losses on foreign currency transactions
(26
)
 

 
(26
)
 

Net gains (losses) on derivative investments
4

 
2

 
25

 
(3
)
 
$
218

 
$
176

 
$
635

 
$
403

v3.7.0.1
Income Taxes (Notes)
9 Months Ended
Jun. 25, 2017
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
The Company estimates its annual effective income tax rate to be approximately 11% for fiscal 2017, which is less than its 17% effective income tax rate for fiscal 2016. Tax benefits from foreign income taxed at rates lower than rates in the United States are expected to be approximately 27% in fiscal 2017, compared to 16% in fiscal 2016, primarily resulting from lower estimated United States revenues related to decreased royalty revenues from Apple’s contract manufacturers and the BlackBerry arbitration (Note 6). In the nine months ended June 25, 2017, the Company recorded a charge of $927 million related to the KFTC fine (Note 6), which is not deductible for tax purposes and is attributable to both the United States and a foreign jurisdiction. The estimated annual effective tax rate of 11% for fiscal 2017 also reflects the increase in the Company’s Singapore tax rate as a result of the expiration of certain of its tax incentives in March 2017, which is partially offset by tax benefits resulting from the increase in the Singapore tax rate that will be in effect when certain deferred tax assets are scheduled to reverse. The annual effective tax rate of 17% for fiscal 2016 reflected a $101 million tax benefit recorded discretely in the third quarter of fiscal 2016 resulting from a worthless stock deduction on a domestic subsidiary of one of the Company’s former display businesses and a $79 million benefit recorded discretely in the first quarter of fiscal 2016 related to fiscal 2015 resulting from the retroactive and permanent reinstatement of the United States federal research and development tax credit.
The effective tax rate of 1% benefit for the third quarter of fiscal 2017 was less than the estimated annual effective tax rate of 11% provision primarily resulting from a reduction in the third quarter of fiscal 2017 to the Company’s expected United States revenues principally related to decreased royalty revenues from Apple’s contract manufacturers (Note 6).
Unrecognized tax benefits were $278 million and $271 million at June 25, 2017 and September 25, 2016, respectively. The Company believes that it is reasonably possible that the total amounts of unrecognized tax benefits at June 25, 2017 may increase or decrease in the next 12 months.
The Company is subject to income taxes in the United States and numerous foreign jurisdictions and is currently under examination by the United States and various other tax authorities worldwide, most notably in countries where the Company earns a routine return and tax authorities believe substantial value-add activities are performed. These examinations are at various stages with respect to assessments, claims, deficiencies and refunds. As of June 25, 2017, the Company believes that adequate amounts have been reserved based on facts known. The Company continually assesses the likelihood and amount of potential adjustments and adjusts the income tax provision, income taxes payable and deferred taxes in the period in which the facts give rise to a revision become known, which may have a negative impact on the Company’s results of operations.
v3.7.0.1
Stockholders' Equity (Notes)
9 Months Ended
Jun. 25, 2017
Stockholders' Equity Attributable to Parent [Abstract]  
Stockholders' Equity
Stockholders’ Equity
Changes in stockholders’ equity in the nine months ended June 25, 2017 were as follows (in millions):
 
Qualcomm Stockholders’ Equity
 
Noncontrolling Interests
 
Total Stockholders’ Equity
Balance at September 25, 2016
$
31,778

 
$
(10
)
 
$
31,768

Net income (loss)
2,297

 
(1
)
 
2,296

Other comprehensive loss
(137
)
 

 
(137
)
Common stock issued under employee benefit plans and related tax benefits
345

 

 
345

Share-based compensation
758

 

 
758

Tax withholdings related to vesting of share-based payments
(263
)
 

 
(263
)
Dividends
(2,457
)
 

 
(2,457
)
Stock repurchases
(1,027
)
 

 
(1,027
)
Balance at June 25, 2017
$
31,294

 
$
(11
)
 
$
31,283


Accumulated Other Comprehensive Income. Changes in the components of accumulated other comprehensive income, net of income taxes, in Qualcomm stockholders’ equity in the nine months ended June 25, 2017 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 25, 2016
$
(161
)
 
$
6

 
$
532

 
$
51

 
$
428

Other comprehensive income (loss) before reclassifications
128

 
6

 
(104
)
 
(43
)
 
(13
)
Reclassifications from accumulated other comprehensive (loss) income
(1
)
 
11

 
(129
)
 
(5
)
 
(124
)
Other comprehensive income (loss)
127

 
17

 
(233
)
 
(48
)
 
(137
)
Balance at June 25, 2017
$
(34
)
 
$
23

 
$
299

 
$
3

 
$
291


In the nine months ended June 25, 2017, the Company entered into U.S. Treasury forward starting interest rate swaps in anticipation of its May 2017 debt offering (Note 5), which were designated as cash flow hedges. This resulted in the deferral of losses of $51 million in accumulated other comprehensive income, which will be recognized ratably over the 10- and 30-year terms of the underlying notes associated with the swaps. Reclassifications from accumulated other comprehensive income related to available-for-sale securities of $71 million and $118 million in the three and nine months ended June 25, 2017, respectively, and $22 million and $5 million in the three and nine months ended June 26, 2016, respectively, were recorded in investment and other income, net (Note 2). Reclassifications from accumulated other comprehensive income related to foreign currency translation losses were $15 million and $21 million in the three and nine months ended June 26, 2016 and were recorded in selling, general and administrative expenses and other operating 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 the nine months ended June 25, 2017 and June 26, 2016, the Company repurchased and retired 16,669,000 and 70,168,000 shares for $1.0 billion and $3.7 billion, respectively, before commissions. At June 25, 2017, $2.0 billion remained authorized for repurchase under the Company’s stock repurchase program.
Dividends. On July 13, 2017, the Company announced a cash dividend of $0.57 per share on the Company’s common stock, payable on September 20, 2017 to stockholders of record as of the close of business on August 30, 2017. In the nine months ended June 25, 2017 and June 26, 2016, dividends charged to retained earnings were as follows (in millions, except per share data):
 
2017
 
2016
 
Per Share
 
Total
 
Per Share
 
Total
First quarter
$
0.53

 
$
801

 
$
0.48

 
$
730

Second quarter
0.53

 
798

 
0.48

 
726

Third quarter
0.57

 
858

 
0.53

 
794

 
$
1.63

 
$
2,457

 
$
1.49

 
$
2,250

v3.7.0.1
Debt (Notes)
9 Months Ended
Jun. 25, 2017
Debt Disclosure [Abstract]  
Debt
Debt
Revolving Credit Facility. In November 2016, the Company amended and restated its existing Revolving Credit Facility that provides for unsecured revolving facility loans, swing line loans and letters of credit (Amended and Restated Revolving Credit Facility) to increase the aggregate amount available to $5.0 billion, of which $530 million and $4.47 billion will expire in February 2020 and November 2021, respectively. The Company had not previously borrowed any funds under the existing Revolving Credit Facility. Proceeds from the Amended and Restated Revolving Credit Facility are expected to be used for general corporate purposes. Loans under the Amended and Restated Revolving Credit Facility will bear interest, at the option of the Company, at either the reserve-adjusted Eurocurrency Rate (determined in accordance with the Amended and Restated Revolving Credit Facility) or the Base Rate (determined in accordance with the Amended and Restated Revolving Credit Facility), in each case plus an applicable margin based on the Company’s long-term unsecured senior, non-credit enhanced debt ratings. The initial margins over the reserve-adjusted Eurocurrency Rate and the Base Rate will be 0.70% and 0.00% per annum, respectively. The Amended and Restated Revolving Credit Facility has a facility fee, which initially accrues at a rate of 0.05% per annum. At June 25, 2017, the Company had not borrowed any funds under the Amended and Restated Revolving Credit Facility.
Commercial Paper Program. The Company has an unsecured commercial paper program, which provides for the issuance of up to $5.0 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 25, 2017 and September 25, 2016, the Company had $999 million and $1.7 billion, respectively, of outstanding commercial paper recorded as short-term debt with weighted-average interest rates of 0.97% and 0.52%, respectively, which included fees paid to the commercial paper dealers and weighted-average remaining days to maturity of 28 days and 36 days, respectively. The carrying value of the outstanding commercial paper approximated its estimated fair value at June 25, 2017 and September 25, 2016.
Bridge Loan Facility. In October 2016, the Company entered into commitment letters pursuant to which the Company received commitments for senior unsecured bridge facility loans in an aggregate principal amount up to $13.6 billion (Bridge Loan Facility). Proceeds from the Bridge Loan Facility, if drawn, were intended to be used to finance, in part, the proposed acquisition of NXP by Qualcomm River Holdings B.V., a wholly owned subsidiary of the Company (Qualcomm River Holdings) (Note 8). Subsequently, the commitments available under the Bridge Loan Facility were reduced to $7.1 billion upon the Company entering into a $4.0 billion Term Loan Facility, described below, and the sale of certain assets by NXP Semiconductors N.V. for estimated net cash proceeds of $2.5 billion in February 2017. In May 2017, in connection with the Company’s issuance of an aggregate principal amount of $11.0 billion of unsecured floating-rate and fixed-rate notes, described below, the commitments available under the Bridge Loan Facility were reduced such that there were no remaining commitments available, and the Bridge Loan Facility was terminated. The Company had not previously borrowed any funds under the Bridge Loan Facility. The Bridge Loan Facility had a ticking fee, which accrued at a rate of 0.05% per annum commencing on December 26, 2016.
Term Loan Facility. In November 2016, the Company entered into a Credit Agreement that provides for senior unsecured delayed-draw term facility loans in an aggregate amount of $4.0 billion (Term Loan Facility). Proceeds from the Term Loan Facility, if drawn, will be used to finance the proposed acquisition of NXP. Commitments under the Term Loan Facility will expire on the first to occur of (i) the consummation of the proposed acquisition of NXP without using loans under the Term Loan Facility, (ii) the termination of Qualcomm River Holdings’s obligation to consummate the proposed acquisition of NXP and (iii) October 27, 2017 (unless such date is extended in accordance with the NXP purchase agreement). Loans under the Term Loan Facility will mature on the third anniversary of the date on which they are funded and will bear interest at either the reserve-adjusted Eurocurrency Rate (determined in accordance with the Term Loan Facility) or the Base Rate (determined in accordance with the Term Loan Facility), in each case plus an applicable margin based on the Company’s long-term unsecured senior, non-credit enhanced debt ratings. The initial margins over the reserve-adjusted Eurocurrency Rate and the Base Rate will be 0.875% and 0.00% per annum, respectively. The Term Loan Facility has a ticking fee, which initially accrues at a rate of 0.05% per annum commencing on December 26, 2016. At June 25, 2017, the Company had not borrowed any funds under the Term Loan Facility.
Long-Term Debt. In May 2017, the Company issued an aggregate principal amount of $11.0 billion of unsecured floating-rate and fixed-rate notes with varying maturities. The proceeds from the notes of approximately $10.95 billion, net of underwriting discounts and offering expenses, are intended to be used to finance, in part, the Company’s proposed acquisition of NXP and other related transactions and for general corporate purposes. The following table provides a summary of the Company’s long-term debt (in millions except percentages):
 
 
June 25, 2017
 
September 25, 2016
 
 
Amount
 
Effective
Rate
 
Amount
 
Effective
Rate
May 2015 Issuance
 
 
 
 
 
 
 
 
Floating-rate three-month LIBOR plus 0.27% notes due May 18, 2018
$
250

 
1.50%
 
$
250

 
1.14%
 
Floating-rate three-month LIBOR plus 0.55% notes due May 20, 2020
250

 
1.78%
 
250

 
1.42%
 
Fixed-rate 1.40% notes due May 18, 2018
1,250

 
1.69%
 
1,250

 
0.93%
 
Fixed-rate 2.25% notes due May 20, 2020
1,750

 
2.07%
 
1,750

 
1.69%
 
Fixed-rate 3.00% notes due May 20, 2022
2,000

 
2.51%
 
2,000

 
2.04%
 
Fixed-rate 3.45% notes due May 20, 2025
2,000

 
3.46%
 
2,000

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

 
4.74%
 
1,000

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

 
4.71%
 
1,500

 
4.71%
May 2017 Issuance
 
 
 
 
 
 
 
 
Floating-rate three-month LIBOR plus 0.36% notes due May 20, 2019
750

 
1.68%
 

 
 
 
Floating-rate three-month LIBOR plus 0.45% notes due May 20, 2020
500

 
1.74%
 

 
 
 
Floating-rate three-month LIBOR plus 0.73% notes due January 30, 2023
500

 
2.00%
 

 
 
 
Fixed-rate 1.85% notes due May 20, 2019
1,250

 
2.00%
 

 
 
 
Fixed-rate 2.10% notes due May 20, 2020
1,500

 
2.20%
 

 
 
 
Fixed-rate 2.60% notes due January 30, 2023
1,500

 
2.70%
 

 
 
 
Fixed-rate 2.90% notes due May 20, 2024
1,500

 
3.01%
 

 
 
 
Fixed-rate 3.25% notes due May 20, 2027
2,000

 
3.46%
 

 
 
 
Fixed-rate 4.30% notes due May 20, 2047
1,500

 
4.47%
 

 
 
 
Total principal
21,000

 
 
 
10,000

 
 
 
Unamortized discount, including debt issuance costs
(110
)
 
 
 
(57
)
 
 
 
Hedge accounting fair value adjustments
9

 
 
 
65

 
 
 
Total
$
20,899

 
 
 
$
10,008

 
 
Reported as:
 
 
 
 
 
 
 
 
Short-term debt
$
1,496

 
 
 
$

 
 
 
Long-term debt
19,403

 
 
 
10,008

 
 
 
Total
$
20,899

 
 
 
$
10,008

 
 

Interest is payable in arrears quarterly for the floating-rate notes and semi-annually for the fixed-rate notes. The Company’s 2019 floating-rate notes, 2020 floating-rate notes, 2019 fixed-rate notes and 2020 fixed-rate notes issued in May 2017 for an aggregate principal amount of $4.0 billion are subject to a special mandatory redemption at a price equal to 101% of the aggregate principal amount, plus accrued and unpaid interest to, but excluding, the date of such mandatory redemption. The redemption is required on the first to occur of (i) the termination of the NXP purchase agreement or (ii) October 27, 2017 (or such later date on or prior to June 1, 2018 to which such date is extended in accordance with the NXP purchase agreement). The Company may redeem the other 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 other 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. The obligations under the notes rank equally in right of payment with all of the Company’s other senior unsecured indebtedness and will effectively rank junior to all liabilities of the Company’s subsidiaries. At June 25, 2017 and September 25, 2016, the aggregate fair value of the notes, based on Level 2 inputs, was approximately $21.5 billion and $10.6 billion, respectively.
In connection with the May 2015 debt issuance, 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 in interest expense in the current period. The Company did not enter into similar interest rate swaps in connection with the May 2017 debt issuance.
The effective interest rates for the notes include the interest on the notes, amortization of the discount, which includes debt issuance costs, and if applicable, adjustments related to hedging. Cash interest paid related to the Company’s commercial paper program and long-term debt, net of cash received from the related interest rate swaps, was $289 million and $270 million in the nine months ended June 25, 2017 and June 26, 2016.
Debt Covenants. The Amended and Restated Revolving Credit Facility and the Term Loan Facility require, and the Bridge Loan Facility and prior Revolving Credit Facility required, 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 each of the respective agreements, of not less than three to one at the end of each fiscal quarter. At June 25, 2017 and September 25, 2016, the Company was in compliance with the applicable covenants under each facility outstanding at such time.
v3.7.0.1
Commitments and Contingencies (Notes)
9 Months Ended
Jun. 25, 2017
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies
Commitments and Contingencies
Legal Proceedings. ParkerVision, Inc. v. QUALCOMM Incorporated: On May 1, 2014, 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 certain ParkerVision patents. On August 21, 2014, ParkerVision amended the complaint, now captioned ParkerVision, Inc. v. QUALCOMM Incorporated, Qualcomm Atheros, Inc., HTC Corporation, HTC America, Inc., Samsung Electronics Co., LTD., Samsung Electronics America, Inc. and Samsung Telecommunications America, LLC, broadening the allegations. ParkerVision alleged that the Company infringes 11 ParkerVision patents and seeks damages and injunctive and other relief. On September 25, 2015, ParkerVision filed a motion with the court to sever some claims against the Company and all other defendants into a separate lawsuit. In addition, on December 3, 2015, ParkerVision dismissed six patents from the lawsuit and granted the Company and all other defendants a covenant not to assert those patents against any existing products. On February 2, 2016, after agreement among the parties, the District Court stayed the remainder of the case pending the resolution of the complaint filed by ParkerVision against the Company and other parties with the United States International Trade Commission (ITC) described below. The Company had previously filed Inter-Partes Review petitions with the United States Patent and Trademark Office (USPTO) to invalidate all asserted claims of several of the remaining patents. On March 7, 2017, the USPTO decided in the Company’s favor with respect to all asserted claims of one such patent. After the ITC action described below was closed, the parties agreed to further stay the District Court case pending ParkerVision’s appeals of the USPTO’s invalidation decisions.
On December 14, 2015, ParkerVision filed another complaint against the Company in the United States District Court for the Middle District of Florida alleging patent infringement. Apple Inc., Samsung Electronics Co., LTD., Samsung Electronics America, Inc., Samsung Telecommunications America, LLC, Samsung Semiconductor, Inc., LG Electronics, Inc., LG Electronics U.S.A., Inc. and LG Electronics MobileComm U.S.A., Inc. were also named defendants. The complaint asserts that certain of the Company’s products infringe four additional ParkerVision patents and seeks damages and other relief. On December 15, 2015, ParkerVision filed a complaint with the ITC pursuant to Section 337 of the Tariff Act of 1930 against the same parties asserting the same four patents. The complaint seeks an exclusion order barring the importation of products that use either of two Company transceivers or one Samsung transceiver and a cease and desist order preventing the Company and the other defendants from carrying out commercial activities within the United States related to such products. On January 13, 2016, the Company served its answer to the District Court complaint. On January 15, 2016, the ITC instituted an investigation. The District Court case was stayed on February 12, 2016 pending completion of the ITC investigation. Subsequently, ParkerVision announced that it had reached a settlement with Samsung which dismissed the Samsung entities from the ITC investigation and related District Court case. On February 2, 2017, the ITC granted ParkerVision’s motion to drop all but one patent and one accused product from the ITC investigation. On March 12, 2017, one day before the ITC hearing was scheduled to begin, ParkerVision moved to withdraw its ITC complaint in its entirety. The Company and the other defendants did not oppose the withdrawal of the complaint. On April 28, 2017, the ITC formally closed the investigation. On May 4, 2017, ParkerVision filed a motion to reopen the related District Court case, and the District Court granted the motion on May 26, 2017. The parties are currently negotiating a schedule for the District Court proceeding.
The Company believes ParkerVision’s claims are without merit.
BlackBerry Limited (BlackBerry) Arbitration: On April 20, 2016, the Company and BlackBerry entered into an agreement to arbitrate BlackBerry’s allegation that it overpaid royalties on certain past sales of subscriber units based on the alleged effect of specific provisions in its license agreement. The arbitration hearing was held during the week of February 27, 2017 by a three-judge panel under the rules of the Judicial Arbitration and Mediation Services in San Diego, California. On April 11, 2017, the panel provided its decision, finding that the Company must pay to BlackBerry $815 million, plus interest at a rate of 10% from June 2015. The decision was limited to prepayment provisions unique to BlackBerry’s license agreement with the Company and has no impact on agreements with any other licensee. The decision was binding and not subject to appeal. The decision also found that BlackBerry was entitled to recover its reasonable attorneys’ fees in an amount to be determined by the panel. As a result, the Company recorded a reduction to licensing revenues of $974 million in the second quarter of fiscal 2017. On May 25, 2017, BlackBerry and the Company entered into a Joint Stipulation Regarding Final Award Agreement agreeing that the Company would pay BlackBerry $940 million to cover the award amount, pre-judgment interest and attorneys’ fees. This also reflected certain amounts that were owed to the Company by Blackberry. As a result, in the third quarter of fiscal 2017, the Company recorded royalty revenues in the QTL segment of $22 million, with the remaining amount recorded as an adjustment to revenues related to the arbitration decision. The Company paid this amount to BlackBerry on May 26, 2017.
Apple Inc. (Apple) v. QUALCOMM Incorporated: On January 20, 2017, Apple filed a complaint against the Company in the United States District Court for the Southern District of California seeking declarations with respect to several of the Company’s patents and alleging that the Company breached certain agreements and violated federal antitrust and California state unfair competition laws. In particular, Apple seeks declaratory judgments of non-infringement by Apple of nine of the Company’s patents, or in the alternative, a declaration of royalties Apple must pay for the patents. Apple further seeks a declaration that the Company’s sale of baseband chipsets exhausts the Company’s patent rights for patents embodied in those chipsets. Separately, Apple seeks to enjoin the Company from seeking excessive royalties from Apple and to disgorge royalties paid by Apple’s contract manufacturers that the court finds were not fair, reasonable and non-discriminatory (FRAND). Apple also claims that the Company’s refusal to make certain payments to Apple under a Business Cooperation and Patent Agreement (Cooperation Agreement) constitutes a breach of contract in violation of California law and seeks damages in the amount of the unpaid payments, alleged to be approximately $1 billion. In addition, Apple claims that the Company has refused to deal with competitors in contravention of the Company’s agreements with applicable standard setting organizations, has used its market position to impose contractual obligations on Apple that prevented Apple from challenging the Company’s licensing practices, has tied the purchase of the Company’s CDMA-enabled and premium LTE-enabled chipsets to licensing certain of the Company’s patents and has required Apple to purchase baseband chipsets exclusively from the Company as a condition of the Company’s payment to Apple of certain rebates, in violation of Section 2 of the Sherman Act and the California Unfair Competition Law. Apple seeks injunctive relief with respect to these claims and a judgment awarding its expenses, costs and attorneys’ fees.
On April 10, 2017, the Company filed its Answer and Counterclaims (amended on May 24, 2017) in response to Apple’s complaint denying Apple’s claims and asserting claims against Apple. The counterclaims against Apple include tortious interference with the Company’s long-standing Subscriber Unit License Agreements (SULAs) with third-party contract manufacturers of Apple devices, causing those contract manufacturers to withhold certain royalty payments owed to the Company; breach of contract and the implied covenant of good faith and fair dealing relating to the parties’ Cooperation Agreement; unjust enrichment and declaratory relief relating to the Cooperation Agreement; breach of contract based on Apple’s failure to pay amounts owed to the Company under a Statement of Work relating to a high-speed feature of the Company’s chipsets; breach of the parties’ software agreement; and violation of California Unfair Competition Law based on (i) Apple’s falsely claiming that there was “no discernible difference” between iPhones using the Company’s chipsets and iPhones using Intel Corp.’s chipsets, and (ii) Apple’s threatening the Company to prevent it from promoting the superior performance of the Company’s own chipsets. The Company also seeks declaratory judgments that the Company has satisfied its FRAND commitments with respect to Apple, and that the Company’s SULAs with the contract manufacturers do not violate either competition law or the Company’s FRAND commitments. On June 19, 2017, Apple filed a Partial Motion to Dismiss the Company’s counterclaim for violation of the California Unfair Competition Law. A hearing on that motion is scheduled for September 29, 2017. On June 20, 2017, Apple filed an Answer and Affirmative Defenses to the rest of the Company’s counterclaims, and also filed an Amended Complaint adding claims for declaratory judgments of invalidity of the nine patents that are subject to declaratory judgment claims in the original complaint, adding new declaratory judgment claims for non-infringement, invalidity and a declaration of royalties for nine more patents. Apple also added claims for declaratory judgments that certain of the Company’s agreements are unenforceable. The Company’s deadline to respond to the Amended Complaint is July 21, 2017. On July 18, 2017, Apple filed a motion to consolidate this action with QUALCOMM Incorporated v. Compal Electronics, Inc. et al., discussed below.
On January 23, 2017, an Apple subsidiary in China filed two complaints against the Company in the Beijing Intellectual Property Court. On March 31, 2017, the court granted an application by Apple Inc. to join the actions as a plaintiff, and Apple amended the complaints. One of the complaints alleges a violation of China’s Anti-Monopoly Law (AML complaint); the other complaint requests a determination of the terms of a patent license between the Company and Apple (FRAND complaint). In particular, the AML complaint alleges that (i) the Company has abused its dominant position in communication standard-essential patents licensing markets and certain global baseband chipset markets by charging and offering royalty terms that were excessively high; (ii) the Company refused to license certain implementers of standardized technologies, including Apple and baseband chipset manufacturers; (iii) the Company forced Apple to use only the Company’s products and services; and (iv) the Company bundled licenses to standard-essential patents with licenses to non-standard-essential patents and imposed other unreasonable or discriminatory trading terms on Apple in violation of the AML. The AML complaint seeks a decree that the Company cease the alleged abuse of dominance, as well as damages in the amount of 1 billion Chinese Renminbi (approximately $146 million based on the exchange rate on June 25, 2017). The FRAND complaint makes allegations similar to the AML complaint and further alleges that the Company refused to offer licensing terms for the Company’s cellular standard-essential patents consistent with the Company’s FRAND licensing commitments and failed to provide to Apple certain information about the Company’s patents. The FRAND complaint seeks (i) a declaration that the license terms offered to Apple by the Company for its mobile communication standard essential patents are not compliant with FRAND; (ii) an order that the Company cease its actions that allegedly violate the Company’s FRAND obligations, including pricing on unfair, unreasonable and excessive terms, refusing to deal, imposing unreasonable trade conditions and failing to provide information on the Company’s patents; and (iii) a determination of FRAND-compliant license terms for the Company’s Chinese standard-essential patents. Apple also seeks its expenses in each of the cases. On March 3, 2017, the Company filed objections to the court’s jurisdiction in these cases. On April 17, 2017, the Company filed (i) new jurisdictional objections to the amended complaints; and (ii) opinions on Apple Inc.’s application to join the suits as a plaintiff. On May 17, 2017, the Company filed supplemental jurisdictional objections.
On February 16, 2017, Apple and one of its Japanese subsidiaries filed four complaints against the Company in the Tokyo District Court. In three of the complaints, Apple seeks declaratory judgment of non-infringement by Apple of three of the Company’s patents. Apple further seeks a declaration that the Company’s patent rights with respect to those three patents are exhausted by the Company’s SULAs with the contract manufacturers of Apple’s devices as well as the Company’s sale of baseband chipsets. Apple also seeks an award of fees. On May 15, 2017, the Company learned of the fourth complaint. In that complaint, Apple and one of its Japanese subsidiaries seek damages of 100 million Japanese Yen (approximately $1 million based on the exchange rate on June 25, 2017) from the Company, based on allegations that the Company violated the Japanese Antimonopoly Act and the Japanese Civil Code. In particular, the fourth complaint alleges that (i) the Company holds a monopoly position in the market for baseband processor chipsets that implement certain cellular standards; (ii) the Company collects double royalties through its license agreements and the sale of chipsets; (iii) the Company refused to grant Apple a license on FRAND terms and forced Apple to execute a rebate agreement under unreasonable conditions; (iv) the Company refused to grant Apple a direct license; and (v) the Company demanded a license fee based on the market value of the total device. The Company has filed answers to two of the complaints and intends to file answers to the others prior to their due dates.
On March 2, 2017, the Company learned that Apple and certain of its European subsidiaries issued a Claim Form against the Company in the UK High Court of Justice, Chancery Division, Patents Court on January 23, 2017. The Claim Form alleges several European competition law claims, including refusal to license competing chipmakers, failure to offer Apple a direct license to the Company’s standard-essential patents on FRAND terms, demanding excessive royalties for the Company’s standard-essential patents, and demanding excessive license fees for the use of the Company’s standard-essential patents in connection with chipsets purchased from the Company. Apple also seeks declarations that it is a willing licensee and that commercial activity in relation to its iPhones and iPads attributable to, implemented by, or using the Company’s chipsets does not infringe any of the Company’s patents because the Company either exhausted its patent rights or granted Apple an implied license. Finally, Apple claims that five of the Company’s European (UK) patents are invalid.
On April 20, 2017, the Company was informed that on April 18, 2017, Apple and one of its Taiwanese subsidiaries filed a complaint against the Company in the Taiwan Intellectual Property Court alleging that the Company has abused a dominant market position in licensing wireless standard-essential patents and selling baseband chipsets, including improper pricing, refusal to deal, exclusive dealing, tying, imposing unreasonable trade terms and discriminatory treatment. The complaint seeks rulings that the Company not use the sales price of the terminal device as the royalty base for standard-essential patents; not leverage its cellular standard-essential patents to obtain licenses of our non-standard-essential patents or demand cross-licenses without proper compensation; not refuse, reduce, delay or take any other action to limit the supply of its baseband chipsets to non-licensees; that the Company must license its standard-essential patents on FRAND terms; and that the Company shall not, based on standard-essential patents, seek injunctions. The complaint also seeks damages of 10 million New Taiwan Dollars (less than $1 million based on the exchange rate on June 25, 2017), among other relief.
On July 14, 2017, the Company filed a motion for anti-suit injunction in the Southern District of California, asking the court to enjoin Apple from pursuing its foreign actions in the UK, China, Japan and Taiwan and from initiating other duplicative foreign actions, while the action in the Southern District of California is pending. Apple’s opposition to this motion is due on August 4, 2017. A hearing on this motion is scheduled for August 18, 2017.
The Company believes Apple’s claims in the above matters are without merit.
QUALCOMM Incorporated v. Compal Electronics, Inc. et al.: On May 17, 2017, the Company filed a complaint in the United States District Court for the Southern District of California against Compal Electronics, Inc. (Compal), FIH Mobile, Ltd., Hon Hai Precision Industry Co., Ltd. (together with FIH Mobile, Ltd., Foxconn), Pegatron Corporation (Pegatron) and Wistron Corporation (Wistron) asserting claims for injunctive relief, specific performance, declaratory relief and damages stemming from the defendants’ breach of contracts by ceasing the payment of royalties for iPhones and other devices which they manufacture for Apple. On May 24, 2017, the Company filed a Motion for Preliminary Injunction seeking to enjoin each of the defendants from violating their license agreements during the pendency of the litigation. On July 17, 2017, Compal, Foxconn, Pegatron and Wistron each filed third party complaints for contractual indemnity against Apple seeking to join Apple as a party to the action. On July 18, 2017, Apple filed an answer to these third party complaints acknowledging its indemnity agreements and consenting to be joined. On that same date, the defendants and Apple filed papers opposing the motion for preliminary injunction. A hearing on the preliminary injunction motion is scheduled for August 15, 2017. Also on July 18, 2017, the defendants filed an Answer and Counterclaims to the complaint, asserting defenses and counterclaims similar to allegations previously made by Apple in the Southern District of California case, discussed above. In addition, the defendants asserted certain new claims, including claims under Section 1 of the Sherman Act and California’s Cartwright Act. The defendants seek damages, declaratory relief, injunctive relief, restitution of certain royalties and other relief. Finally, on July 18, 2017, Apple filed a motion to consolidate this action with the Apple Inc. v. QUALCOMM Incorporated case in the Southern District of California, discussed above.
The Company believes Compal’s, Foxconn’s, Pegatron’s and Wistron’s claims in the above matter are without merit.
QUALCOMM Incorporated v. Apple Inc.: On July 6, 2017, the Company filed a complaint in the United States District Court for the Southern District of California against Apple asserting claims for damages and injunctive relief for infringement of six of the Company’s patents directed to a variety of features found in iPhone models. On July 7, 2017, the Company filed a complaint in the United States International Trade Commission (ITC) against Apple requesting that the ITC institute an investigation pursuant to Section 337 of the Tariff Act of 1930 based on Apple’s infringement of the same six patents. The Company is seeking a limited exclusion order and cease and desist order against importation of iPhone models that do not contain a Qualcomm brand baseband processor. The patents have not been declared as essential to any standards organization and are not subject to commitments to license on FRAND terms.
On July 17, 2017, the Company filed complaints against Apple and certain of its subsidiaries in the Federal Republic of Germany, asserting infringement of one patent in the Mannheim Regional Court and infringement of another patent in Munich District Court. The complaints seek remedies including damages and injunctive relief. The patents have not been declared as essential to any standards organization and are not subject to commitments to license on FRAND terms.
3226701 Canada, Inc. v. QUALCOMM Incorporated et al: On November 30, 2015, plaintiffs filed a securities class action complaint against the Company and certain of its current and former officers in the United States District Court for the Southern District of California. On April 29, 2016, plaintiffs filed an amended complaint. On January 27, 2017, the court dismissed the amended complaint in its entirety, granting leave to amend. On March 17, 2017, plaintiffs filed a second amended complaint, alleging that the Company and certain of its current and former officers violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, by making false and misleading statements regarding the Company’s business outlook and product development between November 19, 2014 and July 22, 2015. The second amended complaint seeks unspecified damages, interest, attorneys’ fees and other costs. On May 8, 2017, the Company filed a motion to dismiss the second amended complaint, which motion is pending. The Company believes the plaintiffs’ claims are without merit.
Consolidated Securities Class Action Lawsuit: On January 23, 2017 and January 26, 2017, respectively, two securities class action complaints were filed by purported stockholders of the Company in the United States District Court for the Southern District of California against the Company and certain of its current and former officers and directors. The complaints alleged, among other things, that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder, by making false and misleading statements and omissions of material fact in connection with certain allegations that the Company is or was engaged in anticompetitive conduct. The complaints sought unspecified damages, interest, fees and costs. On May 4, 2017, the court consolidated the two actions and appointed lead plaintiffs. On July 3, 2017, the lead plaintiffs filed a consolidated amended complaint asserting the same basic theories of liability and requesting the same basic relief. The defendants’ response to the consolidated amended complaint is due on September 1, 2017. The Company believes the plaintiffs’ claims are without merit.
Consumer Class Action Lawsuit: Since January 18, 2017, more than thirty consumer class action complaints have been filed against the Company in the United States District Courts for the Southern and Northern Districts of California, each on behalf of a putative class of purchasers of cellular phones and other cellular devices. In April 2017, the Judicial Panel on Multidistrict Litigation transferred the cases that had been filed in the Southern District of California to the Northern District of California. On May 15, 2017, the court entered an order appointing the plaintiffs’ co-lead counsel, and on May 25, 2017, set a trial date of April 29, 2019. On July 11, 2017, plaintiffs filed a Consolidated Amended Complaint alleging that the Company violated California and federal antitrust and unfair competition laws by, among other things, refusing to license standard-essential patents to its competitors, conditioning the supply of certain of its baseband chipsets on the purchaser first agreeing to license the Company’s entire patent portfolio, entering into exclusive deals with companies including Apple Inc., and charging unreasonably high royalties that do not comply with the Company’s commitments to standard setting organizations. The complaint seeks unspecified damages and disgorgement and/or restitution, as well as an order that the Company be enjoined from further unlawful conduct. The Company believes the plaintiffs’ claims are without merit. 
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 36 different dates, with the next hearing scheduled for September 5, 2017.
Korea Fair Trade Commission (KFTC) Complaint: On January 4, 2010, the KFTC issued a written decision finding that the Company had violated Korean law by offering certain discounts and rebates for purchases of its CDMA chipsets and for including in certain agreements language requiring the continued payment of royalties after all licensed patents have expired. The KFTC levied a fine, which the Company paid and recorded as an expense in fiscal 2010. The Company appealed to the Seoul High Court, and on June 19, 2013, the Seoul High Court affirmed the KFTC’s decision. On July 4, 2013, the Company filed an appeal with the Korea Supreme Court. There have been no material developments since then with respect to this matter.
Korea Fair Trade Commission (KFTC) Investigation: On March 17, 2015, the KFTC notified the Company that it was conducting an investigation of the Company relating to the Korean Monopoly Regulation and Fair Trade Act (MRFTA). On December 27, 2016, the KFTC announced that it had reached a decision in the investigation, finding that the Company has violated provisions of the MRFTA. On January 22, 2017, the Company received the KFTC’s formal written decision, which finds that the following conducts violate the MRFTA: (i) refusing to license, or imposing restrictions on licenses for, cellular communications standard-essential patents with competing modem chipset makers; (ii) conditioning the supply of modem chipsets to handset suppliers on their execution and performance of license agreements with the Company; and (iii) coercing agreement terms including portfolio license terms, royalty terms and free cross-grant terms in executing patent license agreements with handset makers. The KFTC’s decision orders the Company to: (i) upon request by modem chipset companies, engage in good-faith negotiations for patent license agreements, without offering unjustifiable conditions, and if necessary submit to a determination of terms by an independent third party; (ii) not demand that handset companies execute and perform under patent license agreements as a precondition for purchasing modem chips; (iii) not demand unjustifiable conditions in the Company’s license agreements with handset companies, and upon request renegotiate existing patent license agreements; and (iv) notify modem chipset companies and handset companies of the decision and order imposed on the Company and report to the KFTC new or amended agreements. According to the KFTC’s decision, the foregoing will apply to transactions between the Company and the following enterprises: (i) handset manufacturers headquartered in Korea and their affiliate companies; (ii) enterprises that sell handsets in or to Korea and their affiliate companies; (iii) enterprises that supply handsets to companies referred in (ii) above and the affiliate companies of such enterprises; (iv) modem chipset manufacturers headquartered in Korea and their affiliate companies; and (v) enterprises that supply modem chipsets to companies referred in (i), (ii) or (iii) above and the affiliate companies of such enterprises. The KFTC’s decision also imposed a fine of approximately 1.03 trillion Korean Won (approximately $927 million), which was paid on March 30, 2017. The Company believes that its business practices do not violate the MRFTA, and on February 21, 2017 filed an action in the Seoul High Court to cancel the KFTC’s decision. On the same day, the Company filed an application with the Seoul High Court to stay the decision’s remedial order pending the Seoul High Court’s final judgment on the Company’s action to cancel the KFTC’s decision. The Seoul High Court held hearings on the Company’s application to stay the decision’s remedial order on July 10, 2017 and July 14, 2017. The Seoul High Court has not ruled on the Company’s action to cancel the KFTC’s decision or its application to stay the decision’s remedial order. The Seoul High Court ordered supplemental submissions related to the stay proceeding to be submitted by August 11, 2017.
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 provided additional documents and information as requested by the Commission. On July 16, 2015, the Commission announced that it had initiated formal proceedings in this matter. On December 8, 2015, the Commission announced that it had issued a Statement of Objections expressing its preliminary view that between 2009 and 2011, the Company engaged in predatory pricing by selling certain baseband chipsets to two customers at prices below cost, with the intention of hindering competition. A Statement of Objections informs the subject of the investigation of the allegations against it and provides an opportunity to respond to such allegations. It is not a determination of the final outcome of the investigation. On August 15, 2016, the Company submitted its response to the Statement of Objections. If a violation is found, a broad range of remedies is potentially available to the Commission, including imposing a fine and/or injunctive relief prohibiting or restricting certain business practices. It is difficult to predict the outcome of this matter or what remedies, if any, may be imposed by the Commission. The Company believes that its business practices do not violate the European Union (EU) competition rules.
European Commission (Commission) Investigation: On October 15, 2014, the Commission notified the Company that it is conducting an investigation of the Company relating to Articles 101 and/or 102 of the Treaty on the Functioning of the European Union. On July 16, 2015, the Commission announced that it had initiated formal proceedings in this matter. On December 8, 2015, the Commission announced that it had issued a Statement of Objections expressing its preliminary view that since 2011 the Company has paid significant amounts to a customer on condition that it exclusively use the Company’s baseband chipsets in its smartphones and tablets. This conduct has allegedly reduced the customer’s incentives to source chipsets from the Company’s competitors and harmed competition and innovation for certain baseband chipsets. A Statement of Objections informs the subject of the investigation of the allegations against it and provides an opportunity to respond to such allegations. It is not a determination of the final outcome of the investigation. On June 27, 2016, the Company submitted its response to the Statement of Objections. If a violation is found, a broad range of remedies is potentially available to the Commission, including imposing a fine and/or injunctive relief prohibiting or restricting certain business practices. It is difficult to predict the outcome of this matter or what remedies, if any, may be imposed by the Commission. The Company believes that its business practices do not violate the EU competition rules.
United States Federal Trade Commission (FTC) v. QUALCOMM Incorporated: On September 17, 2014, the FTC notified the Company that it was conducting an investigation of the Company relating to Section 5 of the Federal Trade Commission Act (FTCA). On January 17, 2017, the FTC filed a complaint against the Company in the United States District Court for the Northern District of California alleging that the Company engaged in anticompetitive conduct and unfair methods of competition in violation of Section 5 of the FTCA by conditioning the supply of baseband processors on the purchaser first agreeing to a license to the Company’s standard-essential patents, paying incentives to purchasers of baseband processors to induce them to accept certain license terms, refusing to license its standard-essential patents to the Company’s competitors and entering into alleged exclusive dealing arrangements with Apple Inc. The complaint seeks a permanent injunction against the Company’s alleged violations of the FTCA and other unspecified ancillary equitable relief. The Company filed a motion to dismiss the FTC’s complaint on April 3, 2017, which the court denied on June 26, 2017. On April 19, 2017, the court set a trial date for January 4, 2019. The Company believes the FTC’s claims are without merit.
Taiwan Fair Trade Commission (TFTC) Investigation: On December 4, 2015, the TFTC notified the Company that it is conducting an investigation into whether the Company’s patent licensing arrangements violate the Taiwan Fair Trade Act (TFTA). On April 27, 2016, the TFTC specified that the allegations under investigation include whether: (i) the Company jointly licensed its patents rather than separately licensing standard-essential patents and non-standard-essential patents; (ii) the Company’s royalty charges are unreasonable; (iii) the Company unreasonably required licensees to grant it cross-licenses; (iv) the Company failed to provide lists of licensed patents to licensees; (v) the Company violated a FRAND licensing commitment by declining to grant licenses to chipset makers; (vi) the Company declined to sell chipsets to unlicensed potential customers; and (vii) the Company provided royalty rebates to certain companies in exchange for their exclusive use of the Company’s chipsets. If a violation is found, a broad range of remedies is potentially available to the TFTC, including imposing a fine or requiring modifications to the Company’s business practices. At this stage of the investigation, it is difficult to predict the outcome of this matter or what remedies, if any, may be imposed by the TFTC. The Company believes that its business practices do not violate the TFTA. The Company continues to cooperate with the TFTC as it conducts its investigation.
The Company will continue to vigorously defend itself in the foregoing matters. However, litigation and investigations are inherently uncertain. Accordingly, the Company cannot predict the outcome of these matters. The Company has not recorded any accrual at June 25, 2017 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 25, 2017, the Company has received a number of claims from its direct and indirect customers and other third parties for indemnification under such agreements with respect to alleged infringement of third-party intellectual property rights by its products. Reimbursements under indemnification arrangements have not been material to the Company’s consolidated financial statements. The Company has not recorded any accrual for contingent liabilities at June 25, 2017 associated with these indemnification arrangements 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 25, 2017 for the remainder of fiscal 2017 and for each of the subsequent four years from fiscal 2018 through 2021 were $3.6 billion, $1.8 billion, $1.0 billion, $373 million and $122 million, respectively, and $28 million thereafter. Of these amounts, for the remainder of fiscal 2017 and for each of the subsequent four years from fiscal 2018 through 2021, commitments to purchase integrated circuit product inventories comprised $2.9 billion, $1.5 billion, $875 million, $297 million, $76 million, respectively, and $28 million thereafter. Integrated circuit product inventory obligations represent purchase commitments for raw materials, semiconductor die, finished goods and manufacturing services, such as wafer bump, probe, assembly and final test. Under the Company’s manufacturing relationships with its foundry suppliers and assembly and test service providers, 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 21 years and with provisions in certain leases for cost-of-living increases. Future minimum lease payments at June 25, 2017 for the remainder of fiscal 2017 and for each of the subsequent four years from fiscal 2018 through 2021 were $30 million, $110 million, $93 million, $71 million and $51 million, respectively, and $86 million thereafter.
Other Commitments. At June 25, 2017, the Company was committed to fund certain strategic investments up to $537 million. Of this amount, $85 million is expected to be funded in the remainder of fiscal 2017. 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.
v3.7.0.1
Segment Information (Notes)
9 Months Ended
Jun. 25, 2017
Segment Reporting [Abstract]  
Segment Information
Segment Information
The Company is organized on the basis of products and services. The Company conducts business primarily through two reportable segments, QCT (Qualcomm CDMA Technologies) and QTL (Qualcomm Technology Licensing), and its QSI (Qualcomm Strategic Initiatives) reportable segment makes strategic investments and includes revenues and related costs associated with development contracts with an equity method investee. QCT develops and supplies integrated circuits and system software for use in mobile devices, wireless networks, broadband gateway equipment and consumer electronic devices. QTL grants licenses to use portions of its intellectual property portfolio, which includes certain patent rights essential to and/or useful in the manufacture and sale of certain wireless products. The Company also has nonreportable segments, including its mobile health, data center, small cell and other wireless technology and service initiatives.
The Company evaluates the performance of its segments based on earnings (loss) before income taxes (EBT). Segment EBT includes the allocation of certain corporate expenses to the segments, including depreciation and amortization expense related to unallocated corporate assets. Certain income and charges are not allocated to segments in the Company’s management reports because they are not considered in evaluating the segments’ operating performance. Unallocated income and charges include certain interest expense; certain net investment income; certain share-based compensation; and certain research and development expenses, selling, general and administrative expenses and other expenses or income that were deemed to be not directly related to the businesses of the segments. Additionally, unallocated charges include recognition of the step-up of inventories to fair value, amortization of certain intangible assets and certain other acquisition-related charges, third-party acquisition and integration services costs and certain other items, which may include major restructuring and restructuring-related costs, goodwill and long-lived asset impairment charges and litigation settlements and/or damages. Additionally, starting with acquisitions in the second quarter of fiscal 2017, unallocated charges include recognition of the depreciation related to the step-up of property, plant and equipment to fair value. Such charges related to acquisitions that were completed prior to the second quarter of fiscal 2017 continue to be allocated to the respective segment, and such amounts are not material. All of the costs related to the initial research of 5G (fifth generation) technology are included in unallocated corporate research and development expenses, whereas initial costs related to the research of 3G (third generation) and 4G (fourth generation) technology were recorded in both the QCT segment and unallocated corporate research and development expenses based on the nature of the activity. Fiscal 2016 results have not been revised as such costs were incurred prior to fiscal 2014.
Segment assets are comprised of accounts receivable and inventories for all reportable segments other than QSI. QSI segment assets are comprised primarily of certain non-marketable equity instruments and other investments and a receivable from the sale of wireless spectrum in fiscal 2016 (Note 2). The increase in QCT segment assets resulted primarily from the Company’s recently formed RF360 Holdings joint venture in the second quarter of fiscal 2017 (Note 8). The increase in QTL segment assets was due to an increase in accounts receivable (Note 2). Total segment assets differ from total assets on a consolidated basis as a result of unallocated corporate assets primarily comprised of certain cash, cash equivalents, marketable securities, property, plant and equipment, deferred tax assets, intangible assets and assets of nonreportable segments.
The table below presents revenues, EBT and total assets for reportable segments (in millions):
 
QCT
 
QTL
 
QSI
 
Reconciling
Items
 
Total
For the three months ended
 
 
 
 
 
 
 
 
 
June 25, 2017
 
 
 
 
 
 
 
 
 
Revenues
$
4,052

 
$
1,172

 
$
56

 
$
91

 
$
5,371

EBT
575

 
854

 
55

 
(626
)
 
858

June 26, 2016
 
 
 
 
 
 
 
 
 
Revenues
$
3,853

 
$
2,038

 
$
12

 
$
141

 
$
6,044

EBT
365

 
1,749

 
(5
)
 
(416
)
 
1,693

 
 
 
 
 
 
 
 
 
 
For the nine months ended
 
 
 
 
 
 
 
 
 
June 25, 2017
 
 
 
 
 
 
 
 
 
Revenues
$
11,829

 
$
5,232

 
$
70

 
$
(744
)
 
$
16,387

EBT
1,774

 
4,346

 
38

 
(3,572
)
 
2,586

June 26, 2016
 
 
 
 
 
 
 
 
 
Revenues
$
11,285

 
$
5,780

 
$
33

 
$
272

 
$
17,370

EBT
1,125

 
4,945

 
400

 
(1,597
)
 
4,873

 
 
 
 
 
 
 
 
 
 
Total assets
 
 
 
 
 
 
 
 
 
June 25, 2017
$
3,656

 
$
1,814

 
$
975

 
$
57,934

 
$
64,379

September 25, 2016
2,995

 
644

 
910

 
47,810

 
52,359


Reconciling items in the previous table were as follows (in millions):
 
Three Months Ended
 
Nine Months Ended
 
June 25,
2017
 
June 26,
2016
 
June 25,
2017
 
June 26,
2016
Revenues
 
 
 
 
 
 
 
Nonreportable segments
$
79

 
$
142

 
$
218

 
$
274

BlackBerry arbitration (Note 6)
12

 

 
(962
)
 

Intersegment eliminations

 
(1
)
 

 
(2
)
 
$
91

 
$
141

 
$
(744
)
 
$
272

EBT
 
 
 
 
 
 
 
BlackBerry arbitration (Note 6)
$
12

 
$

 
$
(962
)
 
$

Unallocated cost of revenues
(188
)
 
(130
)
 
(402
)
 
(397
)
Unallocated research and development expenses
(257
)
 
(199
)
 
(803
)
 
(602
)
Unallocated selling, general and administrative expenses
(197
)
 
(121
)
 
(481
)
 
(373
)
Unallocated other expenses, net
(9
)
 
(30
)
 
(962
)
 
(110
)
Unallocated interest expense
(130
)
 
(74
)
 
(325
)
 
(217
)
Unallocated investment and other income, net
239

 
185

 
646

 
388

Nonreportable segments
(96
)
 
(47
)
 
(283
)
 
(286
)
 
$
(626
)
 
$
(416
)

$
(3,572
)

$
(1,597
)

The impact to revenues related to the BlackBerry arbitration decision (Note 6) was not allocated to QTL in the Company’s management reports because it will not be considered in evaluating segment results. Unallocated other expenses in the nine months ended June 25, 2017 were comprised of the fine imposed by the KFTC (Note 6) and restructuring and restructuring-related charges related to the Company’s Strategic Realignment Plan, which was substantially implemented in fiscal 2016 (Note 2). Unallocated other expenses in the nine months ended June 26, 2016 were comprised of net restructuring and restructuring-related charges associated with the Company’s Strategic Realignment Plan.
Unallocated acquisition-related expenses were comprised as follows (in millions):
 
Three Months Ended
 
Nine Months Ended
 
June 25,
2017
 
June 26,
2016
 
June 25,
2017
 
June 26,
2016
Cost of revenues
$
139

 
$
99

 
$
330

 
$
345

Research and development expenses
3

 
2

 
18

 
7

Selling, general and administrative expenses
77

 
23

 
195

 
79

v3.7.0.1
Acquisitions (Notes)
9 Months Ended
Jun. 25, 2017
Acquisitions [Abstract]  
Acquisitions
Acquisitions
RF360 Holdings. On February 3, 2017 (the Closing Date), the Company and TDK Corporation (TDK) completed the formation of a joint venture, under the name RF360 Holdings Singapore Pte. Ltd. (RF360 Holdings), to enable delivery of radio frequency front-end (RFFE) modules and radio frequency (RF) filters into fully integrated products for mobile devices and Internet of Things (IoT) applications, among others. The joint venture is initially owned 51% by Qualcomm Global Trading Pte. Ltd. (Qualcomm Global Trading), a Singapore corporation and wholly-owned subsidiary of the Company, and 49% by EPCOS AG (EPCOS), a German wholly-owned subsidiary of TDK. Certain intellectual property, patents and filter and module design and manufacturing assets were carved out of existing TDK businesses and are owned by the joint venture, and certain assets were acquired directly by affiliates of the Company. Qualcomm Global Trading has the option to acquire (and EPCOS has an option to sell) EPCOS’s interest in the joint venture for $1.15 billion (Settlement Amount) 30 months after the Closing Date (the Put and Call Option).
EPCOS will be entitled to up to a total of $200 million in payments based on sales of RF filter functions over the three-year period after the Closing Date, which is a substitute for and in lieu of the right of EPCOS to receive any profit sharing, distributions, dividends or other payments of any kind or nature. Such contingent consideration was recorded as a liability at fair value at close, with future changes in fair value recorded in earnings.
RF360 Holdings is a variable interest entity, and its results of operations and statement of financial position are included in the Company’s consolidated financial statements (on a one-month reporting lag) as the governance structure of RF360 Holdings provides the Company with the power to direct the activities of the joint venture that most significantly impact its economic performance, such as operating decisions related to research and development, manufacturing and sales and marketing of its products. Since the Put and Call Option is considered a financing of the Company’s purchase of EPCOS’s interest in RF360 Holdings, noncontrolling interest is not recorded in the Company’s consolidated financial statements. Therefore, the Put and Call Option was recorded as a liability at fair value at close and included in other noncurrent liabilities. The liability is being accreted to the Settlement Amount, with the offset recorded as interest expense. The carrying value of the Put and Call Option approximated its estimated fair value at June 25, 2017.
The total purchase price consisted of the following (in millions):
Cash paid to TDK at close
$
1,463

Fair value of Put and Call Option
1,112

Fair value of contingent consideration and other deferred payments
495

Total purchase price
$
3,070


The Company has not finalized the purchase price allocation. Accordingly, the preliminary purchase price allocation shown below could change as the fair values of the tangible and intangible assets acquired and liabilities assumed and the related income tax effects are finalized during the remainder of the measurement period (which will not exceed 12 months from the Closing Date). The preliminary allocation of the purchase price to the assets acquired and liabilities assumed based on their fair values was as follows (in millions):
Cash and cash equivalents
$
306

Accounts receivable
303

Inventories
261

Intangible assets subject to amortization:
 
Technology-based intangible assets
738

Customer-related intangible assets
87

Marketing-related intangible assets
8

In-process research and development (IPR&D)
75

Property, plant and equipment
837

Goodwill
812

Other assets
42

Total assets
3,469

Liabilities
(399
)
 
$
3,070


The Company recognized $812 million in goodwill related to this transaction, of which $287 million is expected to be deductible for tax purposes. The goodwill recognized was allocated to the QCT segment for annual impairment testing purposes. The goodwill is primarily attributable to the assembled workforce and synergies expected to arise after the acquisition. Each category of intangible assets acquired will be amortized on a straight-line basis over the weighted-average useful lives of seven years for technology-based intangible assets, nine years for customer-related intangible assets and one year for marketing-related intangible assets. On the acquisition date, IPR&D consisted of four projects. Upon completion, the IPR&D projects will be amortized over their useful lives of six years. The estimated fair values of the intangible assets and the property, plant and equipment acquired were primarily determined using the income approach and cost approach, respectively, both of which were based on significant inputs that were not observable.
The Company’s results of operations for the three and nine months ended June 25, 2017 included the operating results of RF360 Holdings on a one-month reporting lag since the date of acquisition, the amounts of which were not material. The following table presents the unaudited pro forma results for the three and nine months ended June 25, 2017 and June 26, 2016. The unaudited pro forma financial information combines the results of operations of Qualcomm and RF360 Holdings as though the companies had been combined as of the beginning of fiscal 2016. The pro forma information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at such time. The unaudited pro forma results presented below include adjustments for the step-up of inventories to fair value, amortization and depreciation of identified intangible assets and property, plant and equipment, adjustments for certain acquisition-related charges, interest expense related to the Put and Call Option and related tax effects (in millions):
 
(Unaudited)
 
Three Months Ended
 
Nine Months Ended
 
June 25,
2017
 
June 26,
2016
 
June 25,
2017
 
June 26,
2016
Pro forma revenues
$
5,371

 
$
6,329

 
$
16,902

 
$
18,139

Pro forma net income attributable to Qualcomm
893

 
1,471

 
2,435

 
4,120


NXP. On October 27, 2016, the Company announced a definitive agreement under which Qualcomm River Holdings, B.V. (Qualcomm River Holdings), an indirect, wholly owned subsidiary of QUALCOMM Incorporated, will acquire NXP Semiconductors N.V. Pursuant to the definitive agreement, Qualcomm River Holdings has commenced a tender offer to acquire all of the issued and outstanding common shares of NXP for $110 per share in cash, for estimated total cash consideration to be paid to NXP’s shareholders of $38 billion. NXP is a leader in high-performance, mixed-signal semiconductor electronics in automotive, broad-based microcontrollers, secure identification, network processing and RF power products.
The transaction is expected to close by the end of calendar 2017 and is subject to receipt of regulatory approvals in various jurisdictions and other closing conditions, including the tender of at least 80% of the issued and outstanding common shares of NXP in the offer (provided that the minimum tender threshold may be reduced to a percentage not less than 70% with the prior written consent of NXP). At an Extraordinary General Meeting of NXP’s shareholders held on January 27, 2017, NXP’s shareholders approved certain matters relating to the transaction, including the appointment of designees of Qualcomm River Holdings to NXP’s board of directors (effective upon the closing of the transaction) and certain transactions that are intended to be consummated after the completion of the tender offer.
In May 2017, the Company issued an aggregate principal amount of $11.0 billion of unsecured floating- and fixed-rate notes with varying maturities, of which a portion will be used to fund the purchase price and other related transactions. In addition, the Company has secured $4.0 billion in committed financing through a Term Loan Facility, which is expected to be drawn on at the close of the NXP transaction (Note 5). The remaining amount will be funded with cash held by foreign entities.
Qualcomm River Holdings and NXP may terminate the definitive agreement under certain circumstances. If the definitive agreement is terminated by NXP in certain circumstances, NXP will be required to pay Qualcomm River Holdings a termination fee of $1.25 billion. If the definitive agreement is terminated by Qualcomm River Holdings under certain circumstances involving the failure to obtain the required regulatory approvals or the failure of NXP to complete certain pre-closing reorganization steps in all material respects, Qualcomm River Holdings will be required to pay NXP a termination fee of $2.0 billion. In November 2016, as required by the definitive agreement, Qualcomm River Holdings entered into four letters of credit for an aggregate amount of $2.0 billion related to the potential termination fee payable to NXP. Pursuant to the terms of each letter of credit, NXP will have the right to draw amounts to fund certain termination compensation owed by Qualcomm River Holdings to NXP if the definitive agreement is terminated under certain circumstances. The letters of credit expire on June 30, 2018 or if drawn on by NXP or surrendered by Qualcomm River Holdings. Each letter of credit is required to be fully cash collateralized in an amount equal to 100% of its face value through deposits with the issuers of the letters of credit. Qualcomm River Holdings is restricted from using the funds deposited as collateral while the letters of credit are outstanding. At June 25, 2017, the letters of credit were fully collateralized through bank time deposits and money market funds, which were recorded as other noncurrent assets.
v3.7.0.1
Fair Value Measurements (Notes)
9 Months Ended
Jun. 25, 2017
Notes to Financial Statements [Abstract]  
Fair Value Measurements
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 25, 2017 (in millions):
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets
 
 
 
 
 
 
 
Cash equivalents
$
3,540

 
$
10,133

 
$

 
$
13,673

Marketable securities
 
 
 
 
 
 
 
U.S. Treasury securities and government-related securities
2,766

 
73

 

 
2,839

Corporate bonds and notes

 
17,822

 

 
17,822

Mortgage- and asset-backed and auction rate securities

 
958

 
40

 
998

Equity and preferred securities and equity funds
32

 

 

 
32

Debt funds

 
447

 

 
447

Total marketable securities
2,798

 
19,300

 
40

 
22,138

Derivative instruments

 
21

 

 
21

Other investments
358

 

 
135

 
493

Total assets measured at fair value
$
6,696

 
$
29,454

 
$
175

 
$
36,325

Liabilities
 
 
 
 
 
 
 
Derivative instruments
$

 
$
7

 
$

 
$
7

Other liabilities
358

 

 
193

 
551

Total liabilities measured at fair value
$
358

 
$
7

 
$
193

 
$
558


Activity between Levels of the Fair Value Hierarchy. There were no significant transfers between Level 1 and Level 2 in the nine months ended June 25, 2017 and June 26, 2016. The Company recognizes transfers into and out of levels within the fair value hierarchy at the end of the fiscal month in which the actual event or change in circumstances that caused the transfer occurs. Transfers of marketable securities out of Level 3 in the nine months ended June 26, 2016 primarily consisted of debt securities with significant upgrades in credit ratings or for which there were observable inputs.
Other investments and other liabilities included in Level 3 at June 25, 2017 were comprised of convertible debt instruments issued by private companies and contingent consideration related to business combinations, respectively, in the nine months ended June 25, 2017. There were no transfers of convertible debt instruments or contingent consideration amounts into or out of Level 3 during the nine months ended June 25, 2017. 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 fair value of convertible debt instruments is estimated by the Company based on the estimated timing and amount of future cash flows, as well as assumptions related to liquidity, default likelihood and recovery. The fair value of contingent consideration related to business combinations is estimated by the Company using a real options approach, which includes inputs, such as projected financial information, market volatility, discount rates and timing of contractual payments. The inputs used by the Company to estimate the fair values of the convertible debt instruments and contingent consideration are generally unobservable, and therefore, they are included in Level 3.
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. In the nine months ended June 25, 2017 and June 26, 2016, the Company did not have any significant assets or liabilities that were measured at fair value on a nonrecurring basis in periods subsequent to initial recognition.
v3.7.0.1
Marketable Securities (Notes)
9 Months Ended
Jun. 25, 2017
Marketable Securities [Abstract]  
Marketable Securities
Marketable Securities
Marketable securities were comprised as follows (in millions):
 
Current
 
Noncurrent
 
June 25,
2017
 
September 25,
2016
 
June 25,
2017
 
September 25,
2016
Available-for-sale:
 
 
 
 
 
 
 
U.S. Treasury securities and government-related securities
$
2,738

 
$
1,116

 
$
101

 
$
1,099

Corporate bonds and notes
2,769

 
10,159

 
15,053

 
8,584

Mortgage- and asset-backed and auction rate securities
104

 
1,363

 
894

 
534

Equity and preferred securities and equity funds
32

 
64

 

 
1,682

Debt funds
106

 

 
341

 
1,803

Total available-for-sale
5,749

 
12,702

 
16,389

 
13,702

Time deposits
205

 

 
500

 

Total marketable securities
$
5,954

 
$
12,702

 
$
16,889

 
$
13,702


At June 25, 2017, marketable securities also included $705 million of time deposits with original maturities that range from 91 to 181 days.
At June 25, 2017, 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
$
9,705

 
$
9,910

 
$
1,046

 
$
1

 
$
1,444

 
$
22,106


Debt securities with no single maturity date included debt funds, mortgage- and asset-backed securities and auction rate securities.
The Company recorded realized gains and losses on sales of available-for-sale securities as follows (in millions):
 
Gross Realized Gains
 
Gross Realized Losses
 
Net Realized Gains
For the three months ended
 
 
 
 
 
June 25, 2017
$
119

 
$
(8
)
 
$
111

June 26, 2016
62

 
(8
)
 
54

 
 
 
 
 
 
For the nine months ended
 
 
 
 
 
June 25, 2017
$
422

 
$
(116
)
 
$
306

June 26, 2016
146

 
(30
)
 
116


Available-for-sale securities were comprised as follows (in millions):
 
Cost
 
Unrealized Gains
 
Unrealized Losses
 
Fair Value
June 25, 2017
 
 
 
 
 
 
 
Equity securities
$
5

 
$
27

 
$

 
$
32

Debt securities (including debt funds)
21,981

 
136

 
(11
)
 
22,106

 
$
21,986

 
$
163

 
$
(11
)
 
$
22,138

September 25, 2016
 
 
 
 
 
 
 
Equity securities
$
1,554

 
$
204

 
$
(12
)
 
$
1,746

Debt securities (including debt funds)
24,363

 
388

 
(93
)
 
24,658

 
$
25,917

 
$
592

 
$
(105
)
 
$
26,404


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 25, 2017
 
Less than 12 months
 
More than 12 months
 
Fair Value
 
Unrealized Losses
 
Fair Value
 
Unrealized Losses
U.S. Treasury securities and government-related securities
$
205

 
$
(3
)
 
$

 
$

Corporate bonds and notes
1,680

 
(8
)
 
5

 

Mortgage- and asset-backed and auction rate securities
51

 

 
41

 

 
$
1,936

 
$
(11
)
 
$
46

 
$

 
September 25, 2016
 
Less than 12 months
 
More than 12 months
 
Fair Value
 
Unrealized Losses
 
Fair Value
 
Unrealized Losses
U.S. Treasury securities and government-related securities
$
444

 
$
(5
)
 
$
16

 
$

Corporate bonds and notes
2,775

 
(12
)
 
1,033

 
(65
)
Mortgage- and asset-backed and auction rate securities
337

 
(3
)
 
211

 
(2
)
Equity and preferred securities and equity funds
312

 
(4
)
 
130

 
(8
)
Debt funds

 

 
309

 
(6
)
 
$
3,868

 
$
(24
)
 
$
1,699

 
$
(81
)

In connection with the pending NXP transaction (Note 8), the Company has begun, and expects to continue, to divest a substantial portion of its marketable securities portfolio in order to finance, in part, that transaction. Marketable securities that were expected to be used to finance the NXP transaction were classified as noncurrent at June 25, 2017 as they are not considered available for current operations. Given the change in the Company’s intention to sell certain marketable securities, the Company recognized other-than-temporary impairment losses in the nine months ended June 25, 2017 for certain marketable securities (Note 2) and may recognize additional losses prior to the sale of such marketable securities. For the remaining available-for-sale securities, which are not expected to be sold to finance the NXP transaction, the Company concluded that the unrealized losses were temporary at June 25, 2017. Further, for debt securities and preferred stock with unrealized losses, the Company did not have the intent to sell, nor was it more likely than not that the Company would be required to sell, such securities before recovery or maturity.
v3.7.0.1
Basis of Presentation (Policies)
9 Months Ended
Jun. 25, 2017
Basis of Presentation [Abstract]  
Fiscal Period, Policy
The Company operates and reports using a 52-53 week fiscal year ending on the last Sunday in September. Each of the three-month and nine-month periods ended June 25, 2017 and June 26, 2016 included 13 weeks and 39 weeks, respectively.
Use of Estimates, Policy
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in the Company’s condensed consolidated financial statements and the accompanying notes. Actual results could differ from those estimates.
Earnings Per Share, Policy
Earnings Per Common Share. Basic earnings per common share are computed by dividing net income attributable to Qualcomm by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings per common share are computed by dividing net income attributable to Qualcomm by the combination of dilutive common share equivalents, comprised of shares issuable under the Company’s share-based compensation plans and the weighted-average number of common shares outstanding during the reporting period.
Recent Accounting Pronouncements, Policy
Recent Accounting Pronouncements. In May 2014, the FASB issued new guidance related to revenue recognition, which outlines a comprehensive revenue recognition model and supersedes most current revenue recognition guidance. The new guidance requires a company to recognize revenue as control of goods or services transfers to a customer at an amount that reflects the expected consideration to be received in exchange for those goods or services. It defines a five-step approach for recognizing revenue, which may require a company to use more judgment and make more estimates than under the current guidance. The Company will adopt the new guidance in the first quarter of fiscal 2019. Two methods of adoption are permitted: (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 guidance is recognized as an adjustment to the opening retained earnings balance. The Company currently expects the adoption of this new guidance to most significantly impact its licensing business. Specifically, the Company expects a change in the timing of revenues recognized from sales-based royalties. The Company currently recognizes sales-based royalties as revenues in the period in which such royalties are reported by licensees, which is after the conclusion of the quarter in which the licensees’ sales occur and when all other revenue recognition criteria are met. Under the new guidance, the Company will be required to estimate and recognize sales-based royalties in the period in which the associated sales occur, resulting in an acceleration of revenue recognition compared to the current method. Upon adoption of the new guidance, licenses to use portions of the Company’s intellectual property portfolio will be considered one performance obligation, and license fees will be recognized as revenues on a straight-line basis over the term of the license agreement, which is similar to the recognition of license revenues under the current guidance. The Company currently accounts for customer incentive arrangements in its licensing and chip businesses, including volume-related and other pricing rebates or cost reimbursements for marketing and other activities involving certain of the Company’s products and technologies, primarily based on the maximum potential liability. Under the new guidance, the Company expects to estimate the amount of the customer incentive. The Company does not otherwise expect the adoption of the new guidance will have a material impact on its businesses and is in the process of determining the adoption method.
In January 2016, the FASB issued new guidance on classifying and measuring financial instruments, which requires that (i) all equity investments, other than equity-method investments, in unconsolidated entities generally be measured at fair value through earnings and (ii) when the fair value option has been elected for financial liabilities, changes in fair value due to instrument-specific credit risk be recognized separately in other comprehensive income. Additionally, it changes the disclosure requirements for financial instruments. The new guidance will be effective for the Company starting in the first quarter of fiscal 2019. Early adoption is permitted for certain provisions. The Company does not intend to adopt any provisions of the new guidance early and is in the process of determining the effects the adoption will have on its consolidated financial statements.
In February 2016, the FASB issued new guidance related to leases that outlines a comprehensive lease accounting model and supersedes the current lease guidance. The new guidance requires lessees to recognize lease liabilities and corresponding right-of-use assets for all leases with lease terms of greater than 12 months. It also changes the definition of a lease and expands the disclosure requirements of lease arrangements. The new guidance must be adopted using the modified retrospective approach and will be effective for the Company starting in the first quarter of fiscal 2020. Early adoption is permitted. The Company does not intend to adopt the new guidance early and is in the process of determining the effects the adoption will have on its consolidated financial statements.
In March 2016, the FASB issued new guidance that changes the accounting for share-based payments, including income taxes, classification of awards and classification in the statement of cash flows. The new guidance will increase the number of shares an employer can withhold to cover income taxes on share-based payment awards and still qualify for the exemption to liability classification. In addition, under the new guidance, excess tax benefits or deficiencies associated with share-based payment awards will be recognized through earnings when the awards vest or settle, rather than in stockholders’ equity. As a result, subsequent to adoption, the Company’s income tax expense and associated effective tax rate will be impacted by fluctuations in stock price between the grant dates and vesting dates of equity awards. The new guidance will be effective for the Company starting in the first quarter of fiscal 2018.
In June 2016, the FASB issued new guidance that changes the accounting for recognizing impairments of financial assets. Under the new guidance, credit losses for certain types of financial instruments will be estimated based on expected losses. The new guidance also modifies the impairment models for available-for-sale debt securities and for purchased financial assets with credit deterioration since their origination. The new guidance will be effective for the Company starting in the first quarter of fiscal 2021. Early adoption is permitted starting in the first quarter of fiscal 2020. The Company is in the process of determining the effects the adoption will have on its consolidated financial statements as well as whether to adopt the new guidance early.
In August 2016, the FASB issued new guidance related to the classification of certain cash receipts and cash payments on the statement of cash flows. The accounting standard update will be effective for the Company beginning in the first quarter of fiscal 2019 on a retrospective basis, and early adoption is permitted. The Company does not intend to adopt the new guidance early and is in the process of determining the effects the adoption will have on its consolidated financial statements.
In October 2016, the FASB issued new guidance that changes the accounting for income tax effects of intra-entity transfers of assets other than inventory. Under the new guidance, the selling (transferring) entity is required to recognize a current tax expense or benefit upon transfer of the asset. Similarly, the purchasing (receiving) entity is required to recognize a deferred tax asset or deferred tax liability, as well as the related deferred tax benefit or expense, upon receipt of the asset. The new guidance will be effective for the Company starting in the first quarter of fiscal 2019 on a modified retrospective basis, and early adoption is permitted. The Company does not intend to adopt the new guidance early and is in the process of determining the effects the adoption will have on its consolidated financial statements.
Segment Reporting, Policy
The Company evaluates the performance of its segments based on earnings (loss) before income taxes (EBT). Segment EBT includes the allocation of certain corporate expenses to the segments, including depreciation and amortization expense related to unallocated corporate assets. Certain income and charges are not allocated to segments in the Company’s management reports because they are not considered in evaluating the segments’ operating performance. Unallocated income and charges include certain interest expense; certain net investment income; certain share-based compensation; and certain research and development expenses, selling, general and administrative expenses and other expenses or income that were deemed to be not directly related to the businesses of the segments. Additionally, unallocated charges include recognition of the step-up of inventories to fair value, amortization of certain intangible assets and certain other acquisition-related charges, third-party acquisition and integration services costs and certain other items, which may include major restructuring and restructuring-related costs, goodwill and long-lived asset impairment charges and litigation settlements and/or damages. Additionally, starting with acquisitions in the second quarter of fiscal 2017, unallocated charges include recognition of the depreciation related to the step-up of property, plant and equipment to fair value.
v3.7.0.1
Basis of Presentation (Tables)
9 Months Ended
Jun. 25, 2017
Basis of Presentation [Abstract]  
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 25,
2017
 
June 26,
2016
 
June 25,
2017
 
June 26,
2016
Cost of equipment and services revenues
$
10

 
$
10

 
$
30

 
$
31

Research and development
147

 
152

 
455

 
478

Selling, general and administrative
70

 
73

 
227

 
221

Share-based compensation expense before income taxes
227

 
235

 
712

 
730

Related income tax benefit
(28
)
 
(38
)
 
(113
)
 
(126
)
 
$
199

 
$
197

 
$
599

 
$
604

v3.7.0.1
Composition of Certain Financial Statement Items (Tables)
9 Months Ended
Jun. 25, 2017
Balance Sheet Related Disclosures [Abstract]  
Accounts Receivable
Accounts Receivable (in millions)
 
 
 
 
June 25,
2017
 
September 25,
2016
Trade, net of allowances for doubtful accounts of $11 and $1, respectively
$
3,500

 
$
2,194

Long-term contracts
22

 
20

Other
10

 
5

 
$
3,532

 
$
2,219

Inventories
Inventories (in millions)
 
 
 
 
June 25,
2017
 
September 25,
2016
Raw materials
$
80

 
$
1

Work-in-process
902

 
847

Finished goods
1,020

 
708

 
$
2,002

 
$
1,556

Other Current Liabilities
Other Current Liabilities (in millions)
 
 
 
 
June 25,
2017
 
September 25,
2016
Customer incentives and other customer-related liabilities
$
2,589

 
$
1,710

Other
969

 
551

 
$
3,558

 
$
2,261

Investment and Other Income, Net
Investment and Other Income, Net (in millions)
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
June 25,
2017
 
June 26,
2016
 
June 25,
2017
 
June 26,
2016
Interest and dividend income
$
147

 
$
156

 
$
466

 
$
451

Net realized gains on marketable securities
124

 
56

 
330

 
99

Net realized gains on other investments
15

 
13

 
45

 
43

Impairment losses on marketable securities
(2
)
 
(20
)
 
(127
)
 
(109
)
Impairment losses on other investments
(13
)
 
(13
)
 
(36
)
 
(29
)
Equity in net losses of investees
(31
)
 
(18
)
 
(42
)
 
(49
)
Net losses on foreign currency transactions
(26
)
 

 
(26
)
 

Net gains (losses) on derivative investments
4

 
2

 
25

 
(3
)
 
$
218

 
$
176

 
$
635

 
$
403

v3.7.0.1
Stockholders' Equity (Tables)
9 Months Ended
Jun. 25, 2017
Stockholders' Equity Attributable to Parent [Abstract]  
Changes in Stockholders Equity
Changes in stockholders’ equity in the nine months ended June 25, 2017 were as follows (in millions):
 
Qualcomm Stockholders’ Equity
 
Noncontrolling Interests
 
Total Stockholders’ Equity
Balance at September 25, 2016
$
31,778

 
$
(10
)
 
$
31,768

Net income (loss)
2,297

 
(1
)
 
2,296

Other comprehensive loss
(137
)
 

 
(137
)
Common stock issued under employee benefit plans and related tax benefits
345

 

 
345

Share-based compensation
758

 

 
758

Tax withholdings related to vesting of share-based payments
(263
)
 

 
(263
)
Dividends
(2,457
)
 

 
(2,457
)
Stock repurchases
(1,027
)
 

 
(1,027
)
Balance at June 25, 2017
$
31,294

 
$
(11
)
 
$
31,283

Changes in Accumulated Other Comprehensive Income
Changes in the components of accumulated other comprehensive income, net of income taxes, in Qualcomm stockholders’ equity in the nine months ended June 25, 2017 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 25, 2016
$
(161
)
 
$
6

 
$
532

 
$
51

 
$
428

Other comprehensive income (loss) before reclassifications
128

 
6

 
(104
)
 
(43
)
 
(13
)
Reclassifications from accumulated other comprehensive (loss) income
(1
)
 
11

 
(129
)
 
(5
)
 
(124
)
Other comprehensive income (loss)
127

 
17

 
(233
)
 
(48
)
 
(137
)
Balance at June 25, 2017
$
(34
)
 
$
23

 
$
299

 
$
3

 
$
291

Dividends Declared
In the nine months ended June 25, 2017 and June 26, 2016, dividends charged to retained earnings were as follows (in millions, except per share data):
 
2017
 
2016
 
Per Share
 
Total
 
Per Share
 
Total
First quarter
$
0.53

 
$
801

 
$
0.48

 
$
730

Second quarter
0.53

 
798

 
0.48

 
726

Third quarter
0.57

 
858

 
0.53

 
794

 
$
1.63

 
$
2,457

 
$
1.49

 
$
2,250

v3.7.0.1
Debt (Tables)
9 Months Ended
Jun. 25, 2017
Debt Disclosure [Abstract]  
Schedule of long-term debt
The following table provides a summary of the Company’s long-term debt (in millions except percentages):
 
 
June 25, 2017
 
September 25, 2016
 
 
Amount
 
Effective
Rate
 
Amount
 
Effective
Rate
May 2015 Issuance
 
 
 
 
 
 
 
 
Floating-rate three-month LIBOR plus 0.27% notes due May 18, 2018
$
250

 
1.50%
 
$
250

 
1.14%
 
Floating-rate three-month LIBOR plus 0.55% notes due May 20, 2020
250

 
1.78%
 
250

 
1.42%
 
Fixed-rate 1.40% notes due May 18, 2018
1,250

 
1.69%
 
1,250

 
0.93%
 
Fixed-rate 2.25% notes due May 20, 2020
1,750

 
2.07%
 
1,750

 
1.69%
 
Fixed-rate 3.00% notes due May 20, 2022
2,000

 
2.51%
 
2,000

 
2.04%
 
Fixed-rate 3.45% notes due May 20, 2025
2,000

 
3.46%
 
2,000

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

 
4.74%
 
1,000

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

 
4.71%
 
1,500

 
4.71%
May 2017 Issuance
 
 
 
 
 
 
 
 
Floating-rate three-month LIBOR plus 0.36% notes due May 20, 2019
750

 
1.68%
 

 
 
 
Floating-rate three-month LIBOR plus 0.45% notes due May 20, 2020
500

 
1.74%
 

 
 
 
Floating-rate three-month LIBOR plus 0.73% notes due January 30, 2023
500

 
2.00%
 

 
 
 
Fixed-rate 1.85% notes due May 20, 2019
1,250

 
2.00%
 

 
 
 
Fixed-rate 2.10% notes due May 20, 2020
1,500

 
2.20%
 

 
 
 
Fixed-rate 2.60% notes due January 30, 2023
1,500

 
2.70%
 

 
 
 
Fixed-rate 2.90% notes due May 20, 2024
1,500

 
3.01%
 

 
 
 
Fixed-rate 3.25% notes due May 20, 2027
2,000

 
3.46%
 

 
 
 
Fixed-rate 4.30% notes due May 20, 2047
1,500

 
4.47%
 

 
 
 
Total principal
21,000

 
 
 
10,000

 
 
 
Unamortized discount, including debt issuance costs
(110
)
 
 
 
(57
)
 
 
 
Hedge accounting fair value adjustments
9

 
 
 
65

 
 
 
Total
$
20,899

 
 
 
$
10,008

 
 
Reported as:
 
 
 
 
 
 
 
 
Short-term debt
$
1,496

 
 
 
$

 
 
 
Long-term debt
19,403

 
 
 
10,008

 
 
 
Total
$
20,899

 
 
 
$
10,008

 
 
v3.7.0.1
Segment Information (Tables)
9 Months Ended
Jun. 25, 2017
Segment Reporting [Abstract]  
Revenues, EBT and Total Assets for reportable segments
The table below presents revenues, EBT and total assets for reportable segments (in millions):
 
QCT
 
QTL
 
QSI
 
Reconciling
Items
 
Total
For the three months ended
 
 
 
 
 
 
 
 
 
June 25, 2017
 
 
 
 
 
 
 
 
 
Revenues
$
4,052

 
$
1,172

 
$
56

 
$
91

 
$
5,371

EBT
575

 
854

 
55

 
(626
)
 
858

June 26, 2016
 
 
 
 
 
 
 
 
 
Revenues
$
3,853

 
$
2,038

 
$
12

 
$
141

 
$
6,044

EBT
365

 
1,749

 
(5
)
 
(416
)
 
1,693

 
 
 
 
 
 
 
 
 
 
For the nine months ended
 
 
 
 
 
 
 
 
 
June 25, 2017
 
 
 
 
 
 
 
 
 
Revenues
$
11,829

 
$
5,232

 
$
70

 
$
(744
)
 
$
16,387

EBT
1,774

 
4,346

 
38

 
(3,572
)
 
2,586

June 26, 2016
 
 
 
 
 
 
 
 
 
Revenues
$
11,285

 
$
5,780

 
$
33

 
$
272

 
$
17,370

EBT
1,125

 
4,945

 
400

 
(1,597
)
 
4,873

 
 
 
 
 
 
 
 
 
 
Total assets
 
 
 
 
 
 
 
 
 
June 25, 2017
$
3,656

 
$
1,814

 
$
975

 
$
57,934

 
$
64,379

September 25, 2016
2,995

 
644

 
910

 
47,810

 
52,359

Reconciling items for reportable segments - revenues
Reconciling items in the previous table were as follows (in millions):
 
Three Months Ended
 
Nine Months Ended
 
June 25,
2017
 
June 26,
2016
 
June 25,
2017
 
June 26,
2016
Revenues
 
 
 
 
 
 
 
Nonreportable segments
$
79

 
$
142

 
$
218

 
$
274

BlackBerry arbitration (Note 6)
12

 

 
(962
)
 

Intersegment eliminations

 
(1
)
 

 
(2
)
 
$
91

 
$
141

 
$
(744
)
 
$
272

EBT
 
 
 
 
 
 
 
BlackBerry arbitration (Note 6)
$
12

 
$

 
$
(962
)
 
$

Unallocated cost of revenues
(188
)
 
(130
)
 
(402
)
 
(397
)
Unallocated research and development expenses
(257
)
 
(199
)
 
(803
)
 
(602
)
Unallocated selling, general and administrative expenses
(197
)
 
(121
)
 
(481
)
 
(373
)
Unallocated other expenses, net
(9
)
 
(30
)
 
(962
)
 
(110
)
Unallocated interest expense
(130
)
 
(74
)
 
(325
)
 
(217
)
Unallocated investment and other income, net
239

 
185

 
646

 
388

Nonreportable segments
(96
)
 
(47
)
 
(283
)
 
(286
)
 
$
(626
)
 
$
(416
)

$
(3,572
)

$
(1,597
)
Reconciling items for reportable segments - Revenues and EBT
Unallocated acquisition-related expenses were comprised as follows (in millions):
 
Three Months Ended
 
Nine Months Ended
 
June 25,
2017
 
June 26,
2016
 
June 25,
2017
 
June 26,
2016
Cost of revenues
$
139

 
$
99

 
$
330

 
$
345

Research and development expenses
3

 
2

 
18

 
7

Selling, general and administrative expenses
77

 
23

 
195

 
79

Reconciling items in the previous table were as follows (in millions):
 
Three Months Ended
 
Nine Months Ended
 
June 25,
2017
 
June 26,
2016
 
June 25,
2017
 
June 26,
2016
Revenues
 
 
 
 
 
 
 
Nonreportable segments
$
79

 
$
142

 
$
218

 
$
274

BlackBerry arbitration (Note 6)
12

 

 
(962
)
 

Intersegment eliminations

 
(1
)
 

 
(2
)
 
$
91

 
$
141

 
$
(744
)
 
$
272

EBT
 
 
 
 
 
 
 
BlackBerry arbitration (Note 6)
$
12

 
$

 
$
(962
)
 
$

Unallocated cost of revenues
(188
)
 
(130
)
 
(402
)
 
(397
)
Unallocated research and development expenses
(257
)
 
(199
)
 
(803
)
 
(602
)
Unallocated selling, general and administrative expenses
(197
)
 
(121
)
 
(481
)
 
(373
)
Unallocated other expenses, net
(9
)
 
(30
)
 
(962
)
 
(110
)
Unallocated interest expense
(130
)
 
(74
)
 
(325
)
 
(217
)
Unallocated investment and other income, net
239

 
185

 
646

 
388

Nonreportable segments
(96
)
 
(47
)
 
(283
)
 
(286
)
 
$
(626
)
 
$
(416
)

$
(3,572
)

$
(1,597
)
v3.7.0.1
Acquisitions (Tables)
9 Months Ended
Jun. 25, 2017
Acquisitions [Abstract]  
Schedule of Business Acquisitions by Acquisition [Table Text Block]
The total purchase price consisted of the following (in millions):
Cash paid to TDK at close
$
1,463

Fair value of Put and Call Option
1,112

Fair value of contingent consideration and other deferred payments
495

Total purchase price
$
3,070

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]
The preliminary allocation of the purchase price to the assets acquired and liabilities assumed based on their fair values was as follows (in millions):
Cash and cash equivalents
$
306

Accounts receivable
303

Inventories
261

Intangible assets subject to amortization:
 
Technology-based intangible assets
738

Customer-related intangible assets
87

Marketing-related intangible assets
8

In-process research and development (IPR&D)
75

Property, plant and equipment
837

Goodwill
812

Other assets
42

Total assets
3,469

Liabilities
(399
)
 
$
3,070

Business Acquisition, Pro Forma Information [Table Text Block]
The unaudited pro forma results presented below include adjustments for the step-up of inventories to fair value, amortization and depreciation of identified intangible assets and property, plant and equipment, adjustments for certain acquisition-related charges, interest expense related to the Put and Call Option and related tax effects (in millions):
 
(Unaudited)
 
Three Months Ended
 
Nine Months Ended
 
June 25,
2017
 
June 26,
2016
 
June 25,
2017
 
June 26,
2016
Pro forma revenues
$
5,371

 
$
6,329

 
$
16,902

 
$
18,139

Pro forma net income attributable to Qualcomm
893

 
1,471

 
2,435

 
4,120

v3.7.0.1
Fair Value Measurements (Tables)
9 Months Ended
Jun. 25, 2017
Notes to Financial Statements [Abstract]  
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 25, 2017 (in millions):
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets
 
 
 
 
 
 
 
Cash equivalents
$
3,540

 
$
10,133

 
$

 
$
13,673

Marketable securities
 
 
 
 
 
 
 
U.S. Treasury securities and government-related securities
2,766

 
73

 

 
2,839

Corporate bonds and notes

 
17,822

 

 
17,822

Mortgage- and asset-backed and auction rate securities

 
958

 
40

 
998

Equity and preferred securities and equity funds
32

 

 

 
32

Debt funds

 
447

 

 
447

Total marketable securities
2,798

 
19,300

 
40

 
22,138

Derivative instruments

 
21

 

 
21

Other investments
358

 

 
135

 
493

Total assets measured at fair value
$
6,696

 
$
29,454

 
$
175

 
$
36,325

Liabilities
 
 
 
 
 
 
 
Derivative instruments
$

 
$
7

 
$

 
$
7

Other liabilities
358

 

 
193

 
551

Total liabilities measured at fair value
$
358

 
$
7

 
$
193

 
$
558


v3.7.0.1
Marketable Securities (Tables)
9 Months Ended
Jun. 25, 2017
Marketable Securities [Abstract]  
Composition of marketable securities
Marketable securities were comprised as follows (in millions):
 
Current
 
Noncurrent
 
June 25,
2017
 
September 25,
2016
 
June 25,
2017
 
September 25,
2016
Available-for-sale:
 
 
 
 
 
 
 
U.S. Treasury securities and government-related securities
$
2,738

 
$
1,116

 
$
101

 
$
1,099

Corporate bonds and notes
2,769

 
10,159

 
15,053

 
8,584

Mortgage- and asset-backed and auction rate securities
104

 
1,363

 
894

 
534

Equity and preferred securities and equity funds
32

 
64

 

 
1,682

Debt funds
106

 

 
341

 
1,803

Total available-for-sale
5,749

 
12,702

 
16,389

 
13,702

Time deposits
205

 

 
500

 

Total marketable securities
$
5,954

 
$
12,702

 
$
16,889

 
$
13,702

Contractual maturities of available-for-sale debt securities
At June 25, 2017, 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
$
9,705

 
$
9,910

 
$
1,046

 
$
1

 
$
1,444

 
$
22,106

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 25, 2017
$
119

 
$
(8
)
 
$
111

June 26, 2016
62

 
(8
)
 
54

 
 
 
 
 
 
For the nine months ended
 
 
 
 
 
June 25, 2017
$
422

 
$
(116
)
 
$
306

June 26, 2016
146

 
(30
)
 
116

Composition of available-for-sale securities
Available-for-sale securities were comprised as follows (in millions):
 
Cost
 
Unrealized Gains
 
Unrealized Losses
 
Fair Value
June 25, 2017
 
 
 
 
 
 
 
Equity securities
$
5

 
$
27

 
$

 
$
32

Debt securities (including debt funds)
21,981

 
136

 
(11
)
 
22,106

 
$
21,986

 
$
163

 
$
(11
)
 
$
22,138

September 25, 2016
 
 
 
 
 
 
 
Equity securities
$
1,554

 
$
204

 
$
(12
)
 
$
1,746

Debt securities (including debt funds)
24,363

 
388

 
(93
)
 
24,658

 
$
25,917

 
$
592

 
$
(105
)
 
$
26,404

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 25, 2017
 
Less than 12 months
 
More than 12 months
 
Fair Value
 
Unrealized Losses
 
Fair Value
 
Unrealized Losses
U.S. Treasury securities and government-related securities
$
205

 
$
(3
)
 
$

 
$

Corporate bonds and notes
1,680

 
(8
)
 
5

 

Mortgage- and asset-backed and auction rate securities
51

 

 
41

 

 
$
1,936

 
$
(11
)
 
$
46

 
$

 
September 25, 2016
 
Less than 12 months
 
More than 12 months
 
Fair Value
 
Unrealized Losses
 
Fair Value
 
Unrealized Losses
U.S. Treasury securities and government-related securities
$
444

 
$
(5
)
 
$
16

 
$

Corporate bonds and notes
2,775

 
(12
)
 
1,033

 
(65
)
Mortgage- and asset-backed and auction rate securities
337

 
(3
)
 
211

 
(2
)
Equity and preferred securities and equity funds
312

 
(4
)
 
130

 
(8
)
Debt funds

 

 
309

 
(6
)
 
$
3,868

 
$
(24
)
 
$
1,699

 
$
(81
)
v3.7.0.1
Basis of Presentation Earnings Per Common Share (Details) - shares
3 Months Ended 9 Months Ended
Jun. 25, 2017
Jun. 26, 2016
Jun. 25, 2017
Jun. 26, 2016
Basis of Presentation [Abstract]        
Dilutive common share equivalents 12,221,000 14,812,000 13,511,000 13,325,000
Common share equivalents excluded from computation of diluted EPS 561,000 1,378,000 3,815,000 3,150,000
v3.7.0.1
Basis of Presentation Share-Based Compensation (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Jun. 25, 2017
Jun. 26, 2016
Jun. 25, 2017
Jun. 26, 2016
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]        
Share-based compensation expense before income taxes $ 227 $ 235 $ 712 $ 730
Related income tax benefit (28) (38) (113) (126)
Share-based compensation expense, net of income taxes 199 197 599 604
Restricted Stock [Member]        
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]        
Unrecognized compensation costs related to non-vested restricted stock units 1,100   $ 1,100  
Weighted-average period over which unrecognized compensation expense related to nonvested restricted stock units is expected to be recognized     1 year 10 months  
Cost of equipment and service revenues [Member]        
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]        
Share-based compensation expense before income taxes 10 10 $ 30 31
Research and development [Member]        
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]        
Share-based compensation expense before income taxes 147 152 455 478
Selling, general and administrative [Member]        
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]        
Share-based compensation expense before income taxes $ 70 $ 73 $ 227 $ 221
v3.7.0.1
Composition of Certain Financial Statement Items Accounts Receivable (Details) - USD ($)
$ in Millions
Jun. 25, 2017
Sep. 25, 2016
Accounts Receivable [Abstract]    
Trade, net of allowance for doubtful accounts of $11 and $1, respectively $ 3,500 $ 2,194
Long-term contracts 22 20
Other 10 5
Accounts receivable, net 3,532 2,219
Allowance for doubtful accounts related to trade receivables $ 11 $ 1
v3.7.0.1
Composition of Certain Financial Statement Items Inventories (Details) - USD ($)
$ in Millions
Jun. 25, 2017
Sep. 25, 2016
Inventory, Net [Abstract]    
Raw materials $ 80 $ 1
Work-in-process 902 847
Finished goods 1,020 708
Inventories $ 2,002 $ 1,556
v3.7.0.1
Composition of Certain Financial Statement Items Other Current Liabilities (Details) - USD ($)
$ in Millions
Jun. 25, 2017
Sep. 25, 2016
Other Current Liabilities [Line Items]    
Customer incentives and other customer-related liabilities $ 2,589 $ 1,710
Other 969 551
Other current liabilities $ 3,558 $ 2,261
v3.7.0.1
Composition of Certain Financial Statement Items Other Income, Costs and Expenses (Details) - USD ($)
$ in Millions
9 Months Ended
Jun. 25, 2017
Jun. 26, 2016
Restructuring and restructuring-related charges $ 35 $ 158
Gain on sale of wireless spectrum 0 380
Proceeds from sale of wireless spectrum 0 232
Deferred payments   275
Gain on Disposition of Business   $ 48
KFTC [Member]    
KFTC fine $ 927  
Minimum [Member]    
Deferred payments, Due date   Jan. 01, 2020
Maximum [Member]    
Deferred payments, Due date   Dec. 31, 2023
v3.7.0.1
Composition of Certain Financial Statement Items Investment and Other Income, Net (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Jun. 25, 2017
Jun. 26, 2016
Jun. 25, 2017
Jun. 26, 2016
Investment Income, Net [Abstract]        
Interest and dividend income $ 147 $ 156 $ 466 $ 451
Net realized gains on marketable securities 124 56 330 99
Net realized gains on other investments 15 13 45 43
Impairment losses on marketable securities (2) (20) (127) (109)
Impairment losses on other investments (13) (13) (36) (29)
Equity in net losses of investees (31) (18) (42) (49)
Net losses on foreign currency transactions (26) 0 (26) 0
Net gains (losses) on derivative investments 4 2 25 (3)
Investment and other income, net $ 218 $ 176 $ 635 $ 403
v3.7.0.1
Income Taxes (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended 12 Months Ended
Jun. 25, 2017
Jun. 25, 2017
Sep. 24, 2017
Sep. 25, 2016
Income Taxes [Line Items]        
Effective income tax rate (1.00%)     17.00%
Tax benefits from foreign income taxed at rates lower than rates in the United States       16.00%
Tax benefit from a worthless stock deduction on a domestic subsidiary       $ 101
Tax benefits as a result of R&D tax credit reinstatement related to prior years       79
Unrecognized Tax Benefits $ 278 $ 278   $ 271
Scenario, Forecast [Member]        
Income Taxes [Line Items]        
Effective income tax rate     11.00%  
Tax benefits from foreign income taxed at rates lower than rates in the United States     27.00%  
KFTC [Member]        
Income Taxes [Line Items]        
KFTC fine   $ 927    
v3.7.0.1
Stockholders' Equity Changes in Stockholders' Equity (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Jun. 25, 2017
Mar. 26, 2017
Dec. 25, 2016
Jun. 26, 2016
Mar. 27, 2016
Dec. 27, 2015
Jun. 25, 2017
Jun. 26, 2016
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Balance at beginning of the period     $ 31,768       $ 31,768  
Net income attributable to Qualcomm $ 866     $ 1,444     2,297 $ 4,106
Net Loss attributable to noncontrolling interests (1)     (1)     (1) (3)
Net income 865     1,443     2,296 4,103
Other comprehensive income (loss) 60     184     (137) 149
Common stock issued under employee benefit plans and related tax benefits             345  
Share-based compensation             758  
Tax withholdings related to vesting of share-based payments             (263)  
Dividends (858) $ (798) (801) $ (794) $ (726) $ (730) (2,457) (2,250)
Stock repurchases             (1,027) $ (3,700)
Balance at end of the period 31,283           31,283  
Parent [Member]                
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Balance at beginning of the period     31,778       31,778  
Net income attributable to Qualcomm             2,297  
Other comprehensive loss attributable to Qualcomm             (137)  
Common stock issued under employee benefit plans and related tax benefits             345  
Share-based compensation             758  
Tax withholdings related to vesting of share-based payments             (263)  
Dividends             (2,457)  
Stock repurchases             (1,027)  
Balance at end of the period 31,294           31,294  
Noncontrolling Interests [Member]                
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Balance at beginning of the period     $ (10)       (10)  
Net Loss attributable to noncontrolling interests             (1)  
Other comprehensive loss attributable to noncontrolling interest             0  
Common stock issued under employee benefit plans and related tax benefits             0  
Share-based compensation             0  
Tax withholdings related to vesting of share-based payments             0  
Dividends - Noncontrolling interest             0  
Stock repurchases             0  
Balance at end of the period $ (11)           $ (11)  
v3.7.0.1
Stockholders' Equity Accumulated Other Comprehensive Income (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Jun. 25, 2017
Jun. 26, 2016
Jun. 25, 2017
Jun. 26, 2016
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Investment and other income, net $ 218 $ 176 $ 635 $ 403
Accumulated Other Comprehensive Income Attributable to Parent, Net of Tax [Roll Forward]        
Balance at beginning of period     428  
Balance at end of period 291   291  
Foreign Currency Translation Adjustment [Member]        
Accumulated Other Comprehensive Income Attributable to Parent, Net of Tax [Roll Forward]        
Balance at beginning of period     (161)  
Other comprehensive income (loss) before reclassifications     128  
Reclassifications from accumulated other comprehensive (loss) income     (1)  
Other comprehensive income (loss)     127  
Balance at end of period (34)   (34)  
Noncredit Other-than-Temporary Impairment Losses and Subsequent Changes in Fair Value for Certain Available-for-Sale Debt Securities [Member]        
Accumulated Other Comprehensive Income Attributable to Parent, Net of Tax [Roll Forward]        
Balance at beginning of period     6  
Other comprehensive income (loss) before reclassifications     6  
Reclassifications from accumulated other comprehensive (loss) income     11  
Other comprehensive income (loss)     17  
Balance at end of period 23   23  
Net Unrealized Gain (Loss) on Other Available-for-Sale Securities [Member]        
Accumulated Other Comprehensive Income Attributable to Parent, Net of Tax [Roll Forward]        
Balance at beginning of period     532  
Other comprehensive income (loss) before reclassifications     (104)  
Reclassifications from accumulated other comprehensive (loss) income     (129)  
Other comprehensive income (loss)     (233)  
Balance at end of period 299   299  
Net Unrealized Gain (Loss) on Derivative Instruments [Member]        
Accumulated Other Comprehensive Income Attributable to Parent, Net of Tax [Roll Forward]        
Balance at beginning of period     51  
Other comprehensive income (loss) before reclassifications     (43)  
Reclassifications from accumulated other comprehensive (loss) income     (5)  
Other comprehensive income (loss)     (48)  
Balance at end of period 3   3  
Total Accumulated Other Comprehensive Income [Member]        
Accumulated Other Comprehensive Income Attributable to Parent, Net of Tax [Roll Forward]        
Balance at beginning of period     428  
Other comprehensive income (loss) before reclassifications     (13)  
Reclassifications from accumulated other comprehensive (loss) income     (124)  
Other comprehensive income (loss)     (137)  
Balance at end of period 291   291  
Reclassification out of Accumulated Other Comprehensive Income [Member]        
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Investment and other income, net $ 71 22 118 5
Reclassifications from AOCI related to foreign currency translation losses recorded in SG&A and other operating expenses   $ 15   $ 21
Interest Rate Swap [Member]        
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Unrealized loss on interest rate cash flow hedges, pretax, recorded in Accumulated Other Comprehensive Income     $ 51  
Description of Reclassification of Interest Rate Swaps Cash Flow Hedge Gain (Loss)     recognized ratably over the 10- and 30-year terms of the underlying notes associated with the swaps  
v3.7.0.1
Stockholders' Equity Share Repurchase Program (Details) - USD ($)
9 Months Ended
Jun. 25, 2017
Jun. 26, 2016
Mar. 09, 2015
Equity, Class of Treasury Stock [Line Items]      
Authorized amount     $ 15,000,000,000
Stock repurchased and retired during period, shares 16,669,000 70,168,000  
Stock repurchased and retired during period, value $ 1,027,000,000 $ 3,700,000,000  
Remaining authorized amount $ 2,000,000,000    
v3.7.0.1
Stockholders' Equity Dividends (Details) - USD ($)
$ / shares in Units, $ in Millions
1 Months Ended 2 Months Ended 3 Months Ended 9 Months Ended
Jul. 13, 2017
Aug. 30, 2017
Sep. 20, 2017
Jun. 25, 2017
Mar. 26, 2017
Dec. 25, 2016
Jun. 26, 2016
Mar. 27, 2016
Dec. 27, 2015
Jun. 25, 2017
Jun. 26, 2016
Dividends [Line Items]                      
Dividends per share announced       $ 0.57 $ 0.53 $ 0.53 $ 0.53 $ 0.48 $ 0.48 $ 1.63 $ 1.49
Dividends charged to retained earnings       $ 858 $ 798 $ 801 $ 794 $ 726 $ 730 $ 2,457 $ 2,250
Subsequent Event [Member]                      
Dividends [Line Items]                      
Dividends per share announced $ 0.57                    
Dividends Payable, Date declared Jul. 13, 2017                    
Dividends Payable, Date to be paid     Sep. 20, 2017                
Dividends Payable, Date of record   Aug. 30, 2017                  
v3.7.0.1
Credit Facilities (Details) - USD ($)
$ in Millions
9 Months Ended 12 Months Ended
Jun. 25, 2017
Sep. 25, 2016
Mar. 26, 2017
Oct. 27, 2016
Commercial Paper [Member]        
Line of Credit Facility [Abstract]        
Credit Facility, Maximum Borrowing Capacity $ 5,000      
Outstanding Commercial Paper Classified as Short-term debt $ 999 $ 1,700    
Commercial Paper, Weighted Average Interest Rate 0.97% 0.52%    
Commercial Paper [Member] | Minimum [Member]        
Line of Credit Facility [Abstract]        
Debt Instrument, Term 1 day      
Commercial Paper [Member] | Maximum [Member]        
Line of Credit Facility [Abstract]        
Debt Instrument, Term 397 days      
Commercial Paper [Member] | Weighted Average [Member]        
Line of Credit Facility [Abstract]        
Commercial Paper, Weighted Average Remaining Term 28 days 36 days    
Bridge Loan Facility [Member]        
Line of Credit Facility [Abstract]        
Credit Facility, Maximum Borrowing Capacity     $ 7,100 $ 13,600
Line of Credit Facility, Decrease $ 2,500      
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 each of the respective agreements, 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 applicable covenants      
Line of Credit Facility, Commitment Fee Description The Bridge Loan Facility had a ticking fee, which accrued at a rate of 0.05% per annum commencing on December 26, 2016.      
Term Loan Facility [Member]        
Line of Credit Facility [Abstract]        
Credit Facility, Maximum Borrowing Capacity $ 4,000      
Line of Credit Facility, Description will expire on the first to occur of (i) the consummation of the proposed acquisition of NXP without using loans under the Term Loan Facility, (ii) the termination of Qualcomm River Holdings’s obligation to consummate the proposed acquisition of NXP and (iii) October 27, 2017 (unless such date is extended in accordance with the NXP purchase agreement).      
Line of Credit Facility, Interest Rate Description will bear interest at either the reserve-adjusted Eurocurrency Rate (determined in accordance with the Term Loan Facility) or the Base Rate (determined in accordance with the Term Loan Facility), in each case plus an applicable margin based on the Company’s long-term unsecured senior, non-credit enhanced debt ratings. The initial margins over the reserve-adjusted Eurocurrency Rate and the Base Rate will be 0.875% and 0.00% per annum, respectively.      
Debt Instrument, Term 3 years      
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 each of the respective agreements, 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 applicable covenants      
Line of Credit Facility, Commitment Fee Description The Term Loan Facility has a ticking fee, which initially accrues at a rate of 0.05% per annum commencing on December 26, 2016.      
Revolving Credit Facility [Member]        
Line of Credit Facility [Abstract]        
Credit Facility, Maximum Borrowing Capacity $ 5,000      
Line of Credit Facility, Interest Rate Description Loans under the Amended and Restated Revolving Credit Facility will bear interest, at the option of the Company, at either the reserve-adjusted Eurocurrency Rate (determined in accordance with the Amended and Restated Revolving Credit Facility) or the Base Rate (determined in accordance with the Amended and Restated Revolving Credit Facility), in each case plus an applicable margin based on the Company’s long-term unsecured senior, non-credit enhanced debt ratings. The initial margins over the reserve-adjusted Eurocurrency Rate and the Base Rate will be 0.70% and 0.00% per annum, respectively      
Debt Instrument, Fee The Amended and Restated Revolving Credit Facility has a facility fee, which initially accrues at a rate of 0.05% per annum.      
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 each of the respective agreements, 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 applicable covenants      
Revolving Credit Facility [Member] | February 2020 [Member]        
Line of Credit Facility [Abstract]        
Credit Facility, Maximum Borrowing Capacity $ 530      
Credit Facility, Expiration Date Feb. 18, 2020      
Revolving Credit Facility [Member] | November 2021 [Member]        
Line of Credit Facility [Abstract]        
Credit Facility, Maximum Borrowing Capacity $ 4,470      
Credit Facility, Expiration Date Nov. 08, 2021      
v3.7.0.1
Debt Long-term Debt (Details) - USD ($)
$ in Millions
9 Months Ended 12 Months Ended
Jun. 25, 2017
Jun. 26, 2016
Sep. 25, 2016
Long-term Debt [Abstract]      
Long-term debt, Principal amount $ 21,000   $ 10,000
Unamortized discount including debt issuance costs, Net (110)   (57)
Hedge accounting fair value adjustments 9   65
Long-term Debt, Fair Value 21,500   10,600
Interest paid related to commercial paper and long-term debt, net of cash received from the related interest rate swaps 289 $ 270  
Long-term debt, included in short-term debt     0
Long-term debt, included in long-term debt 19,403   10,008
Debt, Long-term and Short-term, Combined Amount 20,899   10,008
Long-term debt, included in short-term debt $ 1,496    
Special mandatory redemption description, aggregate principal amount and redemption price The Company’s 2019 floating-rate notes, 2020 floating-rate notes, 2019 fixed-rate notes and 2020 fixed-rate notes issued in May 2017 for an aggregate principal amount of $4.0 billion are subject to a special mandatory redemption at a price equal to 101% of the aggregate principal amount, plus accrued and unpaid interest to, but excluding, the date of such mandatory redemption.    
Special mandatory redemption description of terms and dates The redemption is required on the first to occur of (i) the termination of the NXP purchase agreement or (ii) October 27, 2017 (or such later date on or prior to June 1, 2018 to which such date is extended in accordance with the NXP purchase agreement).    
May 2017 debt issuance [Member]      
Long-term Debt [Abstract]      
Long-term debt, Principal amount $ 11,000    
Proceeds from long-term debt 10,950    
Floating-rate three-month LIBOR plus 0.27% notes due May 18, 2018 [Member]      
Long-term Debt [Abstract]      
Long-term debt, Principal amount $ 250   $ 250
Long-term debt, Effective Interest Rate 1.50%   1.14%
Long-term debt, Maturity date May 18, 2018   May 18, 2018
Long-term debt, Basis Spread on Variable Rate 0.27%   0.27%
Long-term debt, Interest rate terms Variable per annum rate equal to three-month LIBOR as determined on the interest determination date plus 0.27%.    
Floating-rate three-month LIBOR plus 0.55% notes due May 20, 2020 [Member]      
Long-term Debt [Abstract]      
Long-term debt, Principal amount $ 250   $ 250
Long-term debt, Effective Interest Rate 1.78%   1.42%
Long-term debt, Maturity date May 20, 2020   May 20, 2020
Long-term debt, Basis Spread on Variable Rate 0.55%   0.55%
Long-term debt, Interest rate terms Variable per annum rate equal to three-month LIBOR as determined on the interest determination date plus 0.55%.    
Fixed-rate 1.40% notes due May 18, 2018 [Member]      
Long-term Debt [Abstract]      
Long-term debt, Principal amount $ 1,250   $ 1,250
Long-term debt, Effective Interest Rate 1.69%   0.93%
Long-term debt, Stated Interest Rate 1.40%   1.40%
Long-term debt, Maturity date May 18, 2018   May 18, 2018
Fixed-rate 2.25% notes due May 20, 2020 [Member]      
Long-term Debt [Abstract]      
Long-term debt, Principal amount $ 1,750   $ 1,750
Long-term debt, Effective Interest Rate 2.07%   1.69%
Long-term debt, Stated Interest Rate 2.25%   2.25%
Long-term debt, Maturity date May 20, 2020   May 20, 2020
Percentage of Debt Hedged by Interest Rate Derivatives 43.00%    
Fixed-rate 3.00% notes due May 20, 2022 [Member]      
Long-term Debt [Abstract]      
Long-term debt, Principal amount $ 2,000   $ 2,000
Long-term debt, Effective Interest Rate 2.51%   2.04%
Long-term debt, Stated Interest Rate 3.00%   3.00%
Long-term debt, Maturity date May 20, 2022   May 20, 2022
Percentage of Debt Hedged by Interest Rate Derivatives 50.00%    
Fixed-rate 3.45% notes due May 20, 2025 [Member]      
Long-term Debt [Abstract]      
Long-term debt, Principal amount $ 2,000   $ 2,000
Long-term debt, Effective Interest Rate 3.46%   3.46%
Long-term debt, Stated Interest Rate 3.45%   3.45%
Long-term debt, Maturity date May 20, 2025   May 20, 2025
Fixed-rate 4.65% notes due May 20, 2035 [Member]      
Long-term Debt [Abstract]      
Long-term debt, Principal amount $ 1,000   $ 1,000
Long-term debt, Effective Interest Rate 4.74%   4.74%
Long-term debt, Stated Interest Rate 4.65%   4.65%
Long-term debt, Maturity date May 20, 2035   May 20, 2035
Fixed-rate 4.80% notes due May 20, 2045 [Member]      
Long-term Debt [Abstract]      
Long-term debt, Principal amount $ 1,500   $ 1,500
Long-term debt, Effective Interest Rate 4.71%   4.71%
Long-term debt, Stated Interest Rate 4.80%   4.80%
Long-term debt, Maturity date May 20, 2045   May 20, 2045
Floating-rate three-month LIBOR plus 0.36% notes due May 20, 2019 [Member]      
Long-term Debt [Abstract]      
Long-term debt, Principal amount $ 750   $ 0
Long-term debt, Effective Interest Rate 1.68%    
Long-term debt, Maturity date May 20, 2019    
Long-term debt, Basis Spread on Variable Rate 0.36%    
Long-term debt, Interest rate terms Variable per annum rate equal to three-month LIBOR as determined on the interest determination date plus 0.36%.    
Floating-rate three-month LIBOR plus 0.45% notes due May 20, 2020 [Member]      
Long-term Debt [Abstract]      
Long-term debt, Principal amount $ 500   0
Long-term debt, Effective Interest Rate 1.74%    
Long-term debt, Maturity date May 20, 2020    
Long-term debt, Basis Spread on Variable Rate 0.45%    
Long-term debt, Interest rate terms Variable per annum rate equal to three-month LIBOR as determined on the interest determination date plus 0.45%.    
Floating-rate three-month LIBOR plus 0.73% notes due January 30, 2023 [Member]      
Long-term Debt [Abstract]      
Long-term debt, Principal amount $ 500   0
Long-term debt, Effective Interest Rate 2.00%    
Long-term debt, Maturity date Jan. 30, 2023    
Long-term debt, Basis Spread on Variable Rate 0.73%    
Long-term debt, Interest rate terms Variable per annum rate equal to three-month LIBOR as determined on the interest determination date plus 0.73%.    
Fixed-rate 1.85% notes due May 20, 2019 [Member]      
Long-term Debt [Abstract]      
Long-term debt, Principal amount $ 1,250   0
Long-term debt, Effective Interest Rate 2.00%    
Long-term debt, Stated Interest Rate 1.85%    
Long-term debt, Maturity date May 20, 2019    
Fixed-rate 2.10% notes due May 20, 2020 [Member]      
Long-term Debt [Abstract]      
Long-term debt, Principal amount $ 1,500   0
Long-term debt, Effective Interest Rate 2.20%    
Long-term debt, Stated Interest Rate 2.10%    
Long-term debt, Maturity date May 20, 2020    
Fixed-rate 2.60% notes due January 30, 2023 [Member]      
Long-term Debt [Abstract]      
Long-term debt, Principal amount $ 1,500   0
Long-term debt, Effective Interest Rate 2.70%    
Long-term debt, Stated Interest Rate 2.60%    
Long-term debt, Maturity date Jan. 30, 2023    
Fixed-rate 2.90% notes due May 20, 2024 [Member]      
Long-term Debt [Abstract]      
Long-term debt, Principal amount $ 1,500   0
Long-term debt, Effective Interest Rate 3.01%    
Long-term debt, Stated Interest Rate 2.90%    
Long-term debt, Maturity date May 20, 2024    
Fixed-rate 3.25% notes due May 20, 2027 [Member]      
Long-term Debt [Abstract]      
Long-term debt, Principal amount $ 2,000   0
Long-term debt, Effective Interest Rate 3.46%    
Long-term debt, Stated Interest Rate 3.25%    
Long-term debt, Maturity date May 20, 2027    
Fixed-rate 4.30% notes due May 20, 2047 [Member]      
Long-term Debt [Abstract]      
Long-term debt, Principal amount $ 1,500   $ 0
Long-term debt, Effective Interest Rate 4.47%    
Long-term debt, Stated Interest Rate 4.30%    
Long-term debt, Maturity date May 20, 2047    
Interest Rate Swap [Member]      
Long-term Debt [Abstract]      
Gross notional amount of Derivatives $ 3,000    
v3.7.0.1
Commitments and Contingencies Legal Proceedings (Details)
$ in Millions, ₩ in Billions
3 Months Ended 9 Months Ended
Jun. 25, 2017
USD ($)
Mar. 26, 2017
USD ($)
Jun. 26, 2016
USD ($)
Jun. 25, 2017
KRW (₩)
Jun. 25, 2017
USD ($)
Jun. 26, 2016
USD ($)
Loss Contingencies [Line Items]            
Revenues $ 5,371   $ 6,044   $ 16,387 $ 17,370
Blackberry [Member]            
Loss Contingencies [Line Items]            
Litigation Settlement, Amount   $ 815        
Loss Contingency, Loss in Period   $ 974        
Loss Contingency, Payment         940  
Revenues $ 22          
KFTC [Member]            
Loss Contingencies [Line Items]            
Loss Contingency, Loss in Period         $ 927  
KFTC [Member] | Korea (South), Won            
Loss Contingencies [Line Items]            
Loss Contingency, Loss in Period | ₩       ₩ 1,030    
v3.7.0.1
Commitments and Contingencies Purchase Obligations (Details)
$ in Millions
Jun. 25, 2017
USD ($)
Unrecorded Unconditional Purchase Obligation [Line Items]  
Remainder of fiscal 2017 - Unrecorded obligations $ 3,600
Fiscal 2018 - Unrecorded obligations 1,800
Fiscal 2019 - Unrecorded obligations 1,000
Fiscal 2020 - Unrecorded obligations 373
Fiscal 2021 - Unrecorded obligations 122
Thereafter - Unrecorded obligations 28
Inventories [Member]  
Unrecorded Unconditional Purchase Obligation [Line Items]  
Remainder of fiscal 2017 - Unrecorded obligations 2,900
Fiscal 2018 - Unrecorded obligations 1,500
Fiscal 2019 - Unrecorded obligations 875
Fiscal 2020 - Unrecorded obligations 297
Fiscal 2021 - Unrecorded obligations 76
Thereafter - Unrecorded obligations $ 28
v3.7.0.1
Commitments and Contingencies Operating Leases (Details)
$ in Millions
9 Months Ended
Jun. 25, 2017
USD ($)
Leases, Operating [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 21 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 2017 - Operating Leases $ 30
Fiscal 2018 - Operating leases 110
Fiscal 2019 - Operating leases 93
Fiscal 2020 - Operating leases 71
Fiscal 2021 - Operating leases 51
Thereafter - Operating leases $ 86
v3.7.0.1
Commitments and Contingencies Other Commitments (Details)
$ in Millions
Jun. 25, 2017
USD ($)
Other Commitments [Abstract]  
Other Commitments $ 537
Remainder of fiscal 2017 - Other Commitments $ 85
v3.7.0.1
Segment Information (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Jun. 25, 2017
Jun. 26, 2016
Jun. 25, 2017
Jun. 26, 2016
Sep. 25, 2016
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 and includes revenues and related costs associated with development contracts with an equity method investee    
Revenues $ 5,371 $ 6,044 $ 16,387 $ 17,370  
Earnings before taxes 858 1,693 2,586 4,873  
Total assets 64,379   64,379   $ 52,359
Cost of revenues (2,488) (2,534) (7,140) (7,210)  
Research and development expense (1,391) (1,268) (4,087) (3,922)  
Selling, general and administrative expense (710) (620) (1,917) (1,817)  
Other expenses, net (9) (30) (962) 270  
Interest expense (133) (75) (330) (221)  
Investment and other income, net 218 176 635 403  
QCT [Member]          
Segment Reporting Information [Line Items]          
Revenues 4,052 3,853 11,829 11,285  
Earnings before taxes 575 365 1,774 1,125  
Total assets 3,656   3,656   2,995
QTL [Member]          
Segment Reporting Information [Line Items]          
Revenues 1,172 2,038 5,232 5,780  
Earnings before taxes 854 1,749 4,346 4,945  
Total assets 1,814   1,814   644
QSI [Member]          
Segment Reporting Information [Line Items]          
Revenues 56 12 70 33  
Earnings before taxes 55 (5) 38 400  
Total assets 975   975   910
Nonreportable Segments [Member]          
Segment Reporting Information [Line Items]          
Revenues 79 142 218 274  
Earnings before taxes (96) (47) (283) (286)  
Reconciling Items [Member]          
Segment Reporting Information [Line Items]          
Revenues 91 141 (744) 272  
Earnings before taxes (626) (416) (3,572) (1,597)  
Total assets 57,934   57,934   $ 47,810
Cost of revenues (188) (130) (402) (397)  
Research and development expense (257) (199) (803) (602)  
Selling, general and administrative expense (197) (121) (481) (373)  
Other expenses, net (9) (30) (962) (110)  
Interest expense (130) (74) (325) (217)  
Investment and other income, net 239 185 646 388  
Intersegment Eliminations [Member]          
Segment Reporting Information [Line Items]          
Revenues 0 (1) 0 (2)  
Cost of equipment and service revenues [Member] | Reconciling Items [Member]          
Segment Reporting Information [Line Items]          
Unallocated acquisition-related expenses 139 99 330 345  
Research and development expenses [Member] | Reconciling Items [Member]          
Segment Reporting Information [Line Items]          
Unallocated acquisition-related expenses 3 2 18 7  
Selling, general and administrative expenses [Member] | Reconciling Items [Member]          
Segment Reporting Information [Line Items]          
Unallocated acquisition-related expenses 77 23 195 79  
Blackberry [Member]          
Segment Reporting Information [Line Items]          
Revenues 22        
Blackberry [Member] | Reconciling Items [Member]          
Segment Reporting Information [Line Items]          
Revenues $ 12 $ 0 $ (962) $ 0  
v3.7.0.1
Acquisitions (Details)
$ / shares in Units, $ in Millions
3 Months Ended 9 Months Ended 30 Months Ended
Jun. 25, 2017
USD ($)
$ / shares
Jun. 26, 2016
USD ($)
Jun. 25, 2017
USD ($)
$ / shares
Jun. 26, 2016
USD ($)
Aug. 03, 2019
USD ($)
Mar. 26, 2017
USD ($)
Feb. 03, 2017
USD ($)
projects
Oct. 27, 2016
USD ($)
Sep. 25, 2016
USD ($)
Business Acquisition [Line Items]                  
Long-term debt, Principal amount $ 21,000   $ 21,000           $ 10,000
Goodwill $ 6,523   $ 6,523           $ 5,679
RF360 Holdings [Member]                  
Business Acquisition [Line Items]                  
Business Acquisition, Percentage of Voting Interested Acquired 51.00%   51.00%            
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners 49.00%   49.00%            
Time period after which option becomes exercisable     30 months            
Maximum amount of contingent consideration $ 200   $ 200            
Cash consideration     1,463            
Fair value of put and call option to acquire noncontrolling interest 1,112   1,112            
Fair value of contingent consideration and deferred payments 495   495            
Total purchase price     3,070            
Cash and cash equivalents             $ 306    
Accounts receivable             303    
Inventories             261    
Property, plant and equipment             837    
Goodwill             812    
Other assets             42    
Total assets             3,469    
Liabilities             (399)    
Assets acquired and liabilities assumed, net             3,070    
Business Acquisition, Goodwill, Expected Tax Deductible Amount 287   287            
Pro forma revenues 5,371 $ 6,329 16,902 $ 18,139          
Pro forma net income attributable to Qualcomm $ 893 $ 1,471 $ 2,435 $ 4,120          
NXP [Member]                  
Business Acquisition [Line Items]                  
Business Acquisition, Date of Acquisition Agreement     Oct. 27, 2016            
Cash consideration     $ 38,000            
Business Acquisition, Share Price | $ / shares $ 110   $ 110            
Business Combination, Termination Fee, Specified Circumstances, Payable to Acquirer     $ 1,250            
Business Combination, Termination Fee, Specified Circumstances, Payable to Target     2,000            
Letters of Credit Outstanding, Amount $ 2,000   $ 2,000            
Minimum [Member] | NXP [Member]                  
Business Acquisition [Line Items]                  
Business Acquisition, Percentage of Voting Interested Acquired 80.00%   80.00%            
Minimum [Member] | Minimum subject to NXP written consent (Member) [Member]                  
Business Acquisition [Line Items]                  
Business Acquisition, Percentage of Voting Interested Acquired 70.00%   70.00%            
Term Loan Facility [Member]                  
Business Acquisition [Line Items]                  
Line of Credit Facility, Maximum Borrowing Capacity $ 4,000   $ 4,000            
Bridge Loan Facility [Member]                  
Business Acquisition [Line Items]                  
Line of Credit Facility, Maximum Borrowing Capacity           $ 7,100   $ 13,600  
Technology-Based Intangible Assets [Member] | RF360 Holdings [Member]                  
Business Acquisition [Line Items]                  
Intangibles assets subject to amortization             738    
Weighted-average amortization period     7 years            
Customer-Related Intangible Assets [Member] | RF360 Holdings [Member]                  
Business Acquisition [Line Items]                  
Intangibles assets subject to amortization             87    
Weighted-average amortization period     9 years            
Marketing-Related Intangible Assets [Member] | RF360 Holdings [Member]                  
Business Acquisition [Line Items]                  
Intangibles assets subject to amortization             8    
Weighted-average amortization period     1 year            
Other Intangible Assets [Member] | RF360 Holdings [Member]                  
Business Acquisition [Line Items]                  
In-process research and development (IPR&D)             $ 75    
Number Of In-Process Research And Development Projects | projects             4    
In-Process Research and Development Estimated Useful Life Upon Completion     6 years            
Scenario, Forecast [Member] | RF360 Holdings [Member]                  
Business Acquisition [Line Items]                  
Exercise price of option to acquire noncontrolling interest         $ 1,150        
May 2017 debt issuance [Member]                  
Business Acquisition [Line Items]                  
Long-term debt, Principal amount $ 11,000   $ 11,000            
v3.7.0.1
Fair Value Measurements Fair Value Hierarchy (Details) - Fair Value, Measurements, Recurring [Member]
$ in Millions
Jun. 25, 2017
USD ($)
Assets  
Cash equivalents $ 13,673
Marketable securities 22,138
Derivative instruments 21
Other investments 493
Total assets measured at fair value 36,325
Liabilities  
Derivative instruments 7
Other liabilities 551
Total liabilities measured at fair value 558
Level 1 [Member]  
Assets  
Cash equivalents 3,540
Marketable securities 2,798
Derivative instruments 0
Other investments 358
Total assets measured at fair value 6,696
Liabilities  
Derivative instruments 0
Other liabilities 358
Total liabilities measured at fair value 358
Level 2 [Member]  
Assets  
Cash equivalents 10,133
Marketable securities 19,300
Derivative instruments 21
Other investments 0
Total assets measured at fair value 29,454
Liabilities  
Derivative instruments 7
Other liabilities 0
Total liabilities measured at fair value 7
Level 3 [Member]  
Assets  
Cash equivalents 0
Marketable securities 40
Derivative instruments 0
Other investments 135
Total assets measured at fair value 175
Liabilities  
Derivative instruments 0
Other liabilities 193
Total liabilities measured at fair value 193
U.S. Treasury securities and government-related securities [Member]  
Assets  
Marketable securities 2,839
U.S. Treasury securities and government-related securities [Member] | Level 1 [Member]  
Assets  
Marketable securities 2,766
U.S. Treasury securities and government-related securities [Member] | Level 2 [Member]  
Assets  
Marketable securities 73
U.S. Treasury securities and government-related securities [Member] | Level 3 [Member]  
Assets  
Marketable securities 0
Corporate bonds and notes [Member]  
Assets  
Marketable securities 17,822
Corporate bonds and notes [Member] | Level 1 [Member]  
Assets  
Marketable securities 0
Corporate bonds and notes [Member] | Level 2 [Member]  
Assets  
Marketable securities 17,822
Corporate bonds and notes [Member] | Level 3 [Member]  
Assets  
Marketable securities 0
Mortgage- and asset-backed and auction rate securities [Member]  
Assets  
Marketable securities 998
Mortgage- and asset-backed and auction rate securities [Member] | Level 1 [Member]  
Assets  
Marketable securities 0
Mortgage- and asset-backed and auction rate securities [Member] | Level 2 [Member]  
Assets  
Marketable securities 958
Mortgage- and asset-backed and auction rate securities [Member] | Level 3 [Member]  
Assets  
Marketable securities 40
Equity and preferred securities and equity funds [Member]  
Assets  
Marketable securities 32
Equity and preferred securities and equity funds [Member] | Level 1 [Member]  
Assets  
Marketable securities 32
Equity and preferred securities and equity funds [Member] | Level 2 [Member]  
Assets  
Marketable securities 0
Equity and preferred securities and equity funds [Member] | Level 3 [Member]  
Assets  
Marketable securities 0
Debt funds [Member]  
Assets  
Marketable securities 447
Debt funds [Member] | Level 1 [Member]  
Assets  
Marketable securities 0
Debt funds [Member] | Level 2 [Member]  
Assets  
Marketable securities 447
Debt funds [Member] | Level 3 [Member]  
Assets  
Marketable securities $ 0
v3.7.0.1
Marketable Securities (Details) - USD ($)
$ in Millions
3 Months Ended
Jun. 25, 2017
Sep. 25, 2016
Schedule of Marketable Securities [Line Items]    
Available-for-sale - Current $ 5,749 $ 12,702
Available-for-sale - Noncurrent 16,389 13,702
Total marketable securities - Current 5,954 12,702
Total marketable securities - Noncurrent 16,889 13,702
U.S. Treasury securities and government-related securities [Member]    
Schedule of Marketable Securities [Line Items]    
Available-for-sale - Current 2,738 1,116
Available-for-sale - Noncurrent 101 1,099
Corporate bonds and notes [Member]    
Schedule of Marketable Securities [Line Items]    
Available-for-sale - Current 2,769 10,159
Available-for-sale - Noncurrent 15,053 8,584
Mortgage- and asset-backed and auction rate securities [Member]    
Schedule of Marketable Securities [Line Items]    
Available-for-sale - Current 104 1,363
Available-for-sale - Noncurrent 894 534
Equity and preferred securities and equity funds [Member]    
Schedule of Marketable Securities [Line Items]    
Available-for-sale - Current 32 64
Available-for-sale - Noncurrent 0 1,682
Debt funds [Member]    
Schedule of Marketable Securities [Line Items]    
Available-for-sale - Current 106 0
Available-for-sale - Noncurrent 341 1,803
Bank Time Deposits [Member]    
Schedule of Marketable Securities [Line Items]    
Other Marketable Securities, Noncurrent 500 0
Other Marketable Securities, Current 205 $ 0
Time deposits, Total $ 705  
Minimum [Member]    
Schedule of Marketable Securities [Line Items]    
Maturity of Time Deposits 91 days  
Maximum [Member]    
Schedule of Marketable Securities [Line Items]    
Maturity of Time Deposits 181 days  
v3.7.0.1
Marketable Securities Available-for-sale Securities (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Jun. 25, 2017
Jun. 26, 2016
Jun. 25, 2017
Jun. 26, 2016
Sep. 25, 2016
Contractual maturities of available-for-sale debt securities [Abstract]          
Years to Maturity - Less Than One Year $ 9,705   $ 9,705    
Years to Maturity - One to Five Years 9,910   9,910    
Years to Maturity - Five to Ten Years 1,046   1,046    
Years to Maturity - Greater Than Ten Years 1   1    
Years to Maturity - No Single Maturity Date 1,444   1,444    
Realized Gains and Losses on Sales of Available-for-sale Securities [Abstract]          
Gross Realized Gains 119 $ 62 422 $ 146  
Gross Realized Losses (8) (8) (116) (30)  
Net Realized Gains 111 $ 54 306 $ 116  
Available-for-sale Securities [Abstract]          
Available-for-sale Equity Securities, Cost 5   5   $ 1,554
Available-for-sale Equity Securities, Unrealized Gains 27   27   204
Available-for-sale Equity Securities, Unrealized Losses 0   0   (12)
Available-for-sale Securities Equity Securities, Fair Value 32   32   1,746
Available-for-sale Debt Securities (including debt funds), Cost 21,981   21,981   24,363
Available-for-sale Debt Securities (including debt funds), Unrealized Gains 136   136   388
Available-for-sale Debt Securities (including debt funds), Unrealized Losses (11)   (11)   (93)
Available-for-sale Debt Securities, Fair Value 22,106   22,106   24,658
Available-for-sale Securities, Cost 21,986   21,986   25,917
Available-for-sale Securities, Unrealized Gains 163   163   592
Available-for-sale Securities, Unrealized Losses (11)   (11)   (105)
Fair Value 22,138   22,138   26,404
Investments Classified as Available-for-sale in a Continuous Unrealized Loss Position Deemed to be Temporary [Abstract]          
Less than 12 months - Fair Value 1,936   1,936   3,868
More than 12 months - Fair Value 46   46   1,699
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Unrealized losses (11)   (11)   (24)
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Unrealized losses 0   0   (81)
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 205   205   444
More than 12 months - Fair Value 0   0   16
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Unrealized losses (3)   (3)   (5)
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Unrealized losses 0   0   0
Corporate bonds and notes [Member]          
Investments Classified as Available-for-sale in a Continuous Unrealized Loss Position Deemed to be Temporary [Abstract]          
Less than 12 months - Fair Value 1,680   1,680   2,775
More than 12 months - Fair Value 5   5   1,033
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Unrealized losses (8)   (8)   (12)
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Unrealized losses 0   0   (65)
Mortgage- and asset-backed and auction rate 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 51   51   337
More than 12 months - Fair Value 41   41   211
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Unrealized losses 0   0   (3)
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Unrealized losses $ 0   $ 0   (2)
Equity and preferred securities and equity funds [Member]          
Investments Classified as Available-for-sale in a Continuous Unrealized Loss Position Deemed to be Temporary [Abstract]          
Less than 12 months - Fair Value         312
More than 12 months - Fair Value         130
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Unrealized losses         (4)
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Unrealized losses         (8)
Debt funds [Member]          
Investments Classified as Available-for-sale in a Continuous Unrealized Loss Position Deemed to be Temporary [Abstract]          
Less than 12 months - Fair Value         0
More than 12 months - Fair Value         309
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Unrealized losses         0
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Unrealized losses         $ (6)