UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
November 8, 2007
Date
of Report (Date of earliest event reported)
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
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| 000-19528
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95-3685934 |
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| (Commission File Number)
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(IRS Employer Identification No.) |
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| 5775 Morehouse Drive, San Diego, CA
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92121 |
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| (address of principal executive offices)
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(Zip Code) |
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
TABLE OF CONTENTS
Item 2.02. Results of Operations and Financial Condition
On
November 8, 2007, QUALCOMM Incorporated (“Qualcomm” or the “Company”) issued a press release
regarding the Company’s financial results for its fourth quarter and fiscal year ended September
30, 2007. The full text of the Company’s press release is attached hereto as Exhibit 99.1.
The attached press release presents pro forma financial information that is used by
management (i) to evaluate, assess and benchmark the Company’s operating results on a consistent
and comparable basis, (ii) to measure the performance and efficiency of the Company’s ongoing
core operating businesses, including the Qualcomm CDMA Technologies, Qualcomm Technology
Licensing and Qualcomm Wireless & Internet segments, and (iii) to compare the performance and
efficiency of these segments against each other and against competitors outside the Company. Pro
forma measurements of the following financial data are used by the Company’s management:
revenues, research and development (R&D) expenses, selling, general and administrative (SG&A)
expenses, total operating expenses, operating income, net investment income, income before income
taxes, effective tax rate, net income, diluted earnings per share, operating cash flow and free
cash flow. Management is able to assess what it believes is a more meaningful and comparable set
of financial performance measures for the Company and its business segments by using pro forma
information. As a result, management compensation decisions and the review of executive
compensation by the Compensation Committee of the Board of Directors focus primarily on pro forma
financial measures applicable to the Company and its business segments.
The attached press release presents pro forma information used by management which excludes
the Qualcomm Strategic Initiatives (QSI) segment, certain estimated share-based compensation,
certain tax items related to prior years and acquired in-process R&D. The QSI segment is excluded
because the Company expects to exit its strategic investments at various times and the effects of
fluctuations in the value of such investments are viewed by management as unrelated to the
Company’s operational performance. Estimated share-based compensation, other than amounts related
to share-based awards granted under the executive bonus program, is excluded because management
views the valuation of options and other share-based compensation as theoretical and unrelated to
the Company’s operational performance. Further, share-based compensation is affected by factors
that are subject to change, including the Company’s stock price, stock market volatility,
expected option life, risk-free interest rates and expected dividend payouts in future years.
Moreover, it is generally not an expense that requires or will require cash payment by the
Company. Certain tax items related to prior years are excluded in order to provide a clearer
understanding of the Company’s ongoing tax rate and after tax earnings. Acquired in-process R&D
is excluded because such expense is viewed by management as unrelated to the operating activities
of the Company’s ongoing core businesses.
The attached press release presents free cash flow, defined as net cash provided by operating
activities less capital expenditures, to facilitate an understanding of the amount of cash flow
generated that is available to grow the Company’s business and to create long-term shareholder
value. The Company believes that this presentation is useful in evaluating its operating
performance and financial strength. In addition, management uses this measure to evaluate the
Company’s performance, to value the Company and to compare its operating performance with other
companies in the industry.
The non-GAAP pro forma financial information presented in the attached press release should be
considered in addition to, not as a substitute for, or superior to, financial measures calculated
in accordance with generally accepted accounting principles (GAAP). In addition, “pro forma” is not
a term defined by GAAP, and, as a result, the Company’s measure of pro forma results might be
different than similarly titled measures used by other companies. Reconciliations between total
Qualcomm (GAAP) results and Qualcomm pro forma results and between total Qualcomm (GAAP) cash flow
and Qualcomm pro forma cash flow are presented in the attached press release.