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Document Information Line Items Document
3 Months Ended
Dec. 25, 2011
Jan. 30, 2012
Document Information [Line Items]
Entity Registrant Name QUALCOMM INC/DE
Entity Central Index Key 0000804328
Current Fiscal Year End Date --09-30
Entity Filer Category Large Accelerated Filer
Document Type 10-Q
Document Period End Date Dec 25, 2011
Document Fiscal Year Focus 2012
Document Fiscal Period Focus Q1
Amendment Flag false
Entity Common Stock, Shares Outstanding 1,691,418,257
Entity Well-known Seasoned Issuer Yes
Entity Voluntary Filers No
Entity Current Reporting Status Yes
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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)
In Millions, unless otherwise specified
Dec. 25, 2011
Sep. 25, 2011
Current assets:
Cash and cash equivalents $ 4,964 $ 5,462
Marketable securities 6,576 6,190
Accounts receivable, net 1,035 993
Inventories 714 765
Deferred tax assets 509 537
Other current assets 236 346
Total current assets 14,034 14,293
Marketable securities 10,438 9,261
Deferred tax assets 1,626 1,703
Assets held for sale 746 746
Property, plant and equipment, net 2,607 2,414
Goodwill 3,624 3,432
Other intangible assets, net 3,093 3,099
Other assets 1,438 1,474
Total assets 37,606 36,422
Current liabilities:
Trade accounts payable 974 969
Payroll and other benefits related liabilities 542 644
Unearned revenues 543 610
Loans payable 928 994
Income taxes payable 40 18
Other current liabilities 1,967 2,054
Total current liabilities 4,994 5,289
Unearned revenues 3,535 3,541
Other liabilities 580 620
Total liabilities 9,109 9,450
Commitments and contingencies (Note 6)      
Stockholders' equity:
Preferred stock, $0.0001 par value; 8 shares authorized; none outstanding 0 0
Common stock, $0.0001 par value; 6,000 shares authorized; 1,687 and 1,681 shares issued and outstanding, respectively 0 0
Paid-in capital 10,749 10,394
Retained earnings 17,237 16,204
Accumulated other comprehensive income 495 353
Total Qualcomm stockholders' equity 28,481 26,951
Noncontrolling interests 16 21
Total stockholders’ equity 28,497 26,972
Total liabilities and stockholders' equity $ 37,606 $ 36,422
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CONDENSED CONSOLIDATED BALANCE SHEETS Parentheticals (USD $)
In Millions, except Per Share data, unless otherwise specified
Dec. 25, 2011
Sep. 25, 2011
Preferred stock, par value $ 0.0001 $ 0.0001
Preferred stock, shares authorized 8 8
Preferred stock, shares outstanding 0 0
Common stock, par value $ 0.0001 $ 0.0001
Common stock, shares authorized 6,000 6,000
Common stock, shares issued 1,687 1,681
Common stock, shares outstanding 1,687 1,681
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended
Dec. 25, 2011
Dec. 26, 2010
Revenues:
Equipment and services $ 3,167 $ 2,213 [1]
Licensing 1,514 1,135 [1]
Total revenues 4,681 3,348 [1]
Operating expenses:
Cost of equipment and services revenues 1,754 1,043 [1]
Research and development 873 649 [1]
Selling, general and administrative 503 409 [1]
Total operating expenses 3,130 2,101 [1]
Operating income 1,551 1,247 [1]
Investment income, net (Note 3) 170 223 [1]
Income from continuing operations before income taxes 1,721 1,470 [1]
Income tax expense (321) (218) [1]
Income from continuing operations 1,400 1,252 [1]
Discontinued operations, net of income taxes (Note 8) (5) (82) [1]
Net income 1,395 [2] 1,170 [1]
Net loss attributable to noncontrolling interests 6 0 [1]
Net income attributable to QUALCOMM $ 1,401 $ 1,170 [1]
Basic earnings (loss) per share attributable to Qualcomm:
Continuing operations $ 0.83 $ 0.77 [1]
Discontinued operations $ 0 $ (0.05) [1]
Net income $ 0.83 $ 0.72 [1]
Diluted earnings (loss) per share attributable to Qualcomm:
Continuing operations $ 0.81 $ 0.76 [1]
Discontinued operations $ 0 $ (0.05) [1]
Net income $ 0.81 $ 0.71 [1]
Shares used in per share calculations:
Basic 1,684 1,623 [1]
Diluted 1,721 1,648 [1]
Dividends per share announced $ 0.215 $ 0.19 [1]
[1] As adjusted for discontinued operations (Note 8)
[2] Loss from discontinued operations, net of income taxes, (Note 8) was attributable to Qualcomm.
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Millions, unless otherwise specified
3 Months Ended
Dec. 25, 2011
Dec. 26, 2010
Operating Activities:
Net income $ 1,395 [1] $ 1,170 [2]
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 208 201
Revenues related to non-monetary exchanges (31) (31)
Income tax provision in excess of (less than) income tax payments 118 (1,474)
Non-cash portion of share-based compensation expense 247 174
Incremental tax benefit from stock options exercised (23) (45)
Net realized gains on marketable securities and other investments (44) (127)
Gains on derivative instruments (45) (1)
Net impairment losses on marketable securities and other investments 20 11
Other items, net 6 (1)
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable, net (38) 76
Inventories 50 (45)
Other assets (24) (23)
Trade accounts payable 26 (234)
Payroll, benefits and other liabilities (43) 21
Unearned revenues (43) 376
Net cash provided by operating activities 1,779 48
Investing Activities:
Capital expenditures (359) (102)
Purchases of available-for-sale securities (2,027) (2,309)
Proceeds from sale of available-for-sale securities 1,603 3,024
Purchases of trading securities (1,137) 0
Proceeds from sale of trading securities 148 0
Acquisitions and other investments, net of cash acquired (300) (66)
Other items, net 4 7
Net cash (used) provided by investing activities (2,068) 554
Financing Activities:
Borrowing under loans payable 0 1,083
Repayment of loans payable 0 (1,083)
Proceeds from issuance of common stock 228 791
Incremental tax benefit from stock options exercised 23 45
Repurchase and retirement of common stock (99) 0
Dividends paid (362) (309)
Change in obligation under securtities lending 20 38
Other items, net (1) (4)
Net cash (used) provided by financing activities (191) 561
Effect of exchange rate changes on cash (18) 1
Net (decrease) increase in cash and cash equivalents (498) 1,164
Cash and cash equivalents at beginning of period 5,462 3,547
Cash and cash equivalents at end of period $ 4,964 $ 4,711
[1] Loss from discontinued operations, net of income taxes, (Note 8) was attributable to Qualcomm.
[2] As adjusted for discontinued operations (Note 8)
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Basis of Presentation
3 Months Ended
Dec. 25, 2011
Notes to Financial Statements [Abstract]
Note 1 - Basis of Presentation
Note 1 - Basis of Presentation
     Financial Statement Preparation. These condensed consolidated financial statements have been prepared by QUALCOMM Incorporated (collectively with its subsidiaries, the Company or Qualcomm) in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and the instructions to Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the interim data 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, 2011. 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. The three-month periods ended December 25, 2011 and December 26, 2010 both included 13 weeks.
    The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in the Company’s condensed consolidated financial statements and the accompanying notes. Actual results could differ from those estimates. Certain prior period amounts have been adjusted to reflect the presentation of the FLO TV business as discontinued operations (Note 8).      
     Earnings Per Common Share. Basic earnings per common share is 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 is computed by dividing net income attributable to Qualcomm by the combination of dilutive common share equivalents, comprised of shares issuable under the Company’s share-based compensation plans and shares subject to written put options, and the weighted-average number of common shares outstanding during the reporting period. Dilutive common share equivalents include the dilutive effect of in-the-money share equivalents, which are calculated based on the average share price for each period using the treasury stock method. Under the treasury stock method, the exercise price of an award, if any, the amount of compensation cost, if any, for future service that the Company has not yet recognized, and the estimated tax benefits that would be recorded in paid-in capital, if any, when an award is settled are assumed to be used to repurchase shares in the current period. The incremental dilutive common share equivalents, calculated using the treasury stock method, for the three months ended December 25, 2011 and December 26, 2010 were 37,052,000 and 25,507,000, respectively.
     Employee stock options to purchase approximately 4,471,000 and 60,792,000 shares of common stock during the three months ended December 25, 2011 and December 26, 2010, respectively, were outstanding but not included in the computation of diluted earnings per common share because the effect would be anti-dilutive. Put options outstanding during the three months ended December 25, 2011 to purchase 11,800,000 shares of common stock were not included in the earnings per common share computation because the put options’ exercise prices were less than the average market price of the common stock while they were outstanding, and therefore, the effect on diluted earnings per common share would be anti-dilutive (Note 5). In addition, 675,000 and 467,000 shares of other common stock equivalents outstanding during the three months ended December 25, 2011 and December 26, 2010, respectively, were not included in the computation of diluted earnings per common share because either the effect would be anti-dilutive or certain performance conditions were not satisfied at the end of the period.
Comprehensive Income. Total comprehensive income attributable to Qualcomm consisted of the following (in millions):
 
Three Months Ended
 
December 25,
2011
 
December 26,
2010
Net income
$
1,395

 
$
1,170

Other comprehensive income:
 
 
 
Foreign currency translation
(27
)
 
5

Noncredit other-than-temporary impairment losses and subsequent changes in fair value related to certain available-for-sale debt securities, net of income taxes
1

 
(4
)
Net unrealized gains on other available-for-sale securities and derivative instruments, net of income taxes
175

 
131

Reclassification of net realized gains on available-for-sale securities and derivative instruments included in net income, net of income taxes
(18
)
 
(76
)
Reclassification of other-than-temporary losses on available-for-sale securities included in net income, net of income taxes
9

 
4

Total other comprehensive income
140

 
60

Total comprehensive income
1,535

 
1,230

Comprehensive loss attributable to noncontrolling interests
8

 

Comprehensive income attributable to Qualcomm
$
1,543

 
$
1,230


Components of accumulated other comprehensive income in Qualcomm stockholders’ equity consisted of the following (in millions):
 
December 25,
2011
 
September 25,
2011
Noncredit other-than-temporary impairment losses and subsequent changes in fair value related to certain available-for-sale debt securities, net of income taxes
$
29

 
$
27

Net unrealized gains on other available-for-sale securities, net of income taxes
581

 
427

Net unrealized losses on derivative instruments, net of income taxes
(4
)
 
(15
)
Foreign currency translation
(111
)
 
(86
)
 
$
495

 
$
353


At December 25, 2011 and September 25, 2011, accumulated other comprehensive income included $12 million and $13 million, respectively, of other-than-temporary losses on certain available-for-sale debt securities related to factors other than credit, net of income taxes.
     Share-Based Compensation. Total estimated share-based compensation expense, related to all of the Company’s share-based awards, was comprised as follows (in millions):
 
Three Months Ended
 
December 25,
2011
 
December 26, 2010*
Cost of equipment and services revenues
$
20

 
$
14

Research and development
126

 
85

Selling, general and administrative
101

 
70

Continuing operations
247

 
169

Related income tax benefit
(53
)
 
(55
)
Continuing operations, net of income taxes
194

 
114

Discontinued operations

 
3

Related income tax benefit

 
(1
)
Discontinued operations, net of income taxes

 
2

 
$
194

 
$
116

*As adjusted for discontinued operations (Note 8)
The Company recorded $33 million and $13 million in share-based compensation expense during the three months ended December 25, 2011 and December 26, 2010, respectively, related to share-based awards granted during those periods. In addition, for the three months ended December 25, 2011 and December 26, 2010, $23 million and $45 million, respectively, were reclassified to reduce net cash provided by operating activities with an offsetting increase in net cash provided by financing activities to reflect the incremental tax benefit from stock options exercised in those periods.
At December 25, 2011, total unrecognized compensation costs related to non-vested stock options and restricted stock units granted prior to that date were $537 million and $1.1 billion, respectively, which are expected to be recognized over a weighted-average period of 1.8 years and 2.3 years, respectively. Net share-based awards, after forfeitures and cancellations, granted during the three months ended December 25, 2011 and December 26, 2010 represented 0.5% and 0.4%, respectively, of outstanding shares as of the beginning of each fiscal period. Total share-based awards granted during the three months ended December 25, 2011 and December 26, 2010 each represented 0.5% of outstanding shares as of the end of each fiscal period.
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Composition of Certain Financial Statement Items
3 Months Ended
Dec. 25, 2011
Notes to Financial Statements [Abstract]
Note 2 - Composition of Certain Financial Statement Items
Note 2 — Composition of Certain Financial Statement Items
     Inventories.
 
December 25,
2011
 
September 25,
2011
 
(In millions)
Raw materials
$
14

 
$
15

Work-in-process
235

 
384

Finished goods
465

 
366

 
$
714

 
$
765

 
Other Current Liabilities.
 
December 25,
2011
 
September 25,
2011
 
(In millions)
Customer incentives and other customer-related liabilities
$
1,401

 
$
1,180

Current portion of payable to Broadcom (Note 6)
170

 
170

Payable for unsettled securities trades
75

 
298

Other
321

 
406

 
$
1,967

 
$
2,054

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Investment Income, Net
3 Months Ended
Dec. 25, 2011
Notes to Financial Statements [Abstract]
Note 3 - Investment Income, Net
Note 3 — Investment Income, Net
 
Three Months Ended
 
December 25,
2011
 
December 26, 2010*
 
 
Interest and dividend income
$
130

 
$
131

Interest expense
(27
)
 
(24
)
Net realized gains on marketable securities
37

 
127

Net realized gains on other investments
7

 

Impairment losses on marketable securities
(14
)
 
(8
)
Impairment losses on other investments
(6
)
 
(3
)
Gains on derivative instruments
45

 
1

Equity in losses of investees
(2
)
 
(1
)
 
$
170

 
$
223


*As adjusted for discontinued operations (Note 8)
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Income Taxes
3 Months Ended
Dec. 25, 2011
Notes to Financial Statements [Abstract]
Note 4 - Income Taxes
Note 4 — Income Taxes
The Company estimates its annual effective income tax rate for continuing operations to be approximately 18% for fiscal 2012, compared to the 20% effective income tax rate for fiscal 2011. The United States federal research and development tax credit expired on December 31, 2011. Therefore, the annual effective rate for fiscal 2012 only reflects the federal research and development credit generated through December 31, 2011. The annual effective rate for fiscal 2012 also reflects a lower state rate as a result of California tax legislation enacted in 2009.
The estimated annual effective tax rate for continuing operations for fiscal 2012 of 18% is less than the United States federal statutory rate primarily due to benefits of approximately 17% related to foreign earnings taxed at less than the United States federal rate. The prior fiscal year rate was lower than the United States federal statutory rate primarily due to benefits related to foreign earnings taxed at less than the United States federal rate, partially offset by state taxes and tax expense related to the valuation of deferred tax assets to reflect changes in California law.
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Stockholders' Equity
9 Months Ended
Jun. 26, 2011
Notes to Financial Statements [Abstract]
Note 5 - Stockholders' Equity
Note 5 — Stockholders’ Equity
Changes in stockholders’ equity for the three months ended December 25, 2011 were as follows (in millions):
 
Qualcomm Stockholders’ Equity
 
Noncontrolling Interests
 
Total Stockholders’ Equity
Balance at September 25, 2011
$
26,951

 
$
21

 
$
26,972

Net income (loss) (1)
1,401

 
(6
)
 
1,395

Other comprehensive income (loss)
142

 
(2
)
 
140

Common stock issued under employee benefit plans and the related tax benefits, net of shares withheld for tax
203

 

 
203

Share-based compensation
251

 

 
251

Dividends
(368
)
 

 
(368
)
Stock repurchases
(99
)
 

 
(99
)
Other

 
3

 
3

Balance at December 25, 2011
$
28,481

 
$
16

 
$
28,497


(1) Loss from discontinued operations, net of income taxes, (Note 8) was attributable to Qualcomm.
    
Stock Repurchase Program. During the three months ended December 25, 2011, the Company repurchased and retired 2,046,000 shares of the Company’s common stock for $99 million, before commissions. The Company did not repurchase any shares during the three months ended December 26, 2010. At December 25, 2011, approximately $948 million remained authorized for repurchase under the Company’s stock repurchase program, net of put options outstanding.
In connection with the Company’s stock repurchase program, the Company sold three put options on its own stock during fiscal 2011. At December 25, 2011, the Company had three outstanding put options enabling holders to sell 11,800,000 shares of the Company’s common stock to the Company for approximately $511 million (net of the $75 million in put option premiums received). The put option liability of $35 million at December 25, 2011 was recorded in other current liabilities. During the three months ended December 25, 2011, the Company recognized gains of $45 million in net investment income due to a decrease in the fair value of the put options. No put options were outstanding during the three months ended December 26, 2010.
Dividends. Cash dividends announced in the three months ended December 25, 2011 and December 26, 2010 were $0.215 and $0.190 per share, respectively. During the three months ended December 25, 2011 and December 26, 2010, dividends charged to retained earnings were $368 million and $314 million, respectively. On January 10, 2012, the Company announced a cash dividend of $0.215 per share on the Company’s common stock, payable on March 23, 2012 to stockholders of record as of March 2, 2012.
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Commitments and Contingencies
3 Months Ended
Dec. 25, 2011
Notes to Financial Statements [Abstract]
Note 6 - Commitments and Contingencies
Note 6 — Commitments and Contingencies
Legal Proceedings. Tessera, Inc. v. QUALCOMM Incorporated: On April 17, 2007, Tessera filed a patent infringement lawsuit in the United States District Court for the Eastern District of Texas and a complaint with the United States International Trade Commission (ITC) pursuant to Section 337 of the Tariff Act of 1930 against the Company and other companies, alleging infringement of two patents. The district court action is stayed pending resolution of the ITC proceeding, including all appeals. On May 20, 2009, the ITC issued a limited exclusion order and a cease and desist order, both of which were terminated when the patents expired on September 24, 2010. During the period of the exclusion order, the Company shifted supply of accused chips for customers who manufacture products that may be imported to the United States to a licensed supplier of Tessera, and the Company continued to supply those customers without interruption. The appeals court affirmed the ITC’s orders, and on November 28, 2011, the U.S. Supreme Court denied the Company’s petition for review. On January 18, 2012, pursuant to the parties’ stipulation, the district court in the Eastern District of Texas lifted the stay and ordered the case be moved to the United States District Court for the Northern District of California. Once the stay is lifted, Tessera may continue to seek back damages in the district court, but it may not seek injunctive relief due to the expiration of the patents.
MicroUnity Systems Engineering, Inc. v. QUALCOMM Incorporated, et al.: MicroUnity filed a total of three patent infringement complaints, on March 16, 2010, June 3, 2010 and January 27, 2011, against the Company and a number of other technology companies, including Texas Instruments, Samsung, Apple, Nokia, Google and HTC, in the United States District Court for the Eastern District of Texas. The complaints against the Company alleged infringement of a total of 15 patents, appear to accuse the Company’s Snapdragon products and seek unspecified damages and other relief. The court consolidated the actions in May 2011. On September 30, 2011, the court denied the Company’s motion to sever its case from the other defendants and to transfer the case to the Northern District of California. On January 6, 2012, MicroUnity filed a notice that it will no longer assert two of the patents against the Company and reduce the number of claims in the 13 remaining asserted patents. Trial is scheduled for June 3, 2013.
Broadcom Corporation et al. v. Commonwealth Scientific and Industrial Research Organisation (CSIRO): On November 10, 2009, Broadcom and Atheros (which was acquired by the Company in May 2011) filed a complaint for declaratory judgment against CSIRO in the United States District Court for the Eastern District of Texas, requesting the court to declare, among other things, that United States patent number 5,487,069 (the ’069 Patent) assigned to CSIRO is invalid and unenforceable and that Atheros does not infringe any valid claims of the ’069 Patent. On October 14, 2010, CSIRO filed a complaint against Atheros and Broadcom (amended and consolidated with complaints against other third parties on April 6, 2011) alleging infringement of the ’069 Patent by Atheros’ 802.11/a/g/n products. A claim construction hearing was held on October 4, 2011, and trial is scheduled for April 9, 2012.
MOSAID Technologies Incorporated v. Dell, Inc. et al.: On March 16, 2011, MOSAID filed a complaint against Atheros and 32 other entities in the United States District Court for the Eastern District of Texas alleging that certain of Atheros’ WiFi products infringe United States patent numbers 5,131,006, 5,151,920, 5,422,887, 5,706,428, 6,563,786 and 6,992,972. MOSAID seeks unspecified damages and other relief. The case is early in the discovery phase. Trial is scheduled for August 4, 2014.
India BWA Spectrum: In connection with the BWA spectrum won in India in June 2010, the Company recorded a payment in noncurrent other assets, which was $928 million and $994 million at December 25, 2011 and September 25, 2011, respectively. In addition, the Company created four wholly-owned subsidiaries. On August 9, 2010, each subsidiary filed an application to obtain a license to operate a wireless network on this spectrum for one of the respective regions. Thereafter, two Indian companies each acquired 13% of each subsidiary. On September 21, 2011, the Company received a letter dated September 7, 2011 from the Government of India’s Department of Telecommunications (DoT) (the DoT Letter) notifying the Company that its applications had been rejected based on its conclusion that the applications were filed after the deadline and that the Company was restricted to filing one application rather than four. On September 27, 2011, the Company filed a petition with the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) seeking to overturn the DoT Letter. On September 28, 2011, the TDSAT issued an order granting the Company interim relief, pending a final determination of the case, directing the DoT to (i) not issue the spectrum that has been earmarked to the Company to anyone else and (ii) not forfeit or appropriate the payment that the Company made for the spectrum. On October 10, 2011, one of the Company’s subsidiaries received a letter from the DoT offering to issue it a license that would cover all of India, including the four regions for which the Company won spectrum at the June 2010 auction, assuming that the subsidiary met certain requirements by November 9, 2011. On October 18, 2011, the subsidiary submitted to the DoT a letter accepting the DoT’s offer, requesting issuance of a license as soon as possible after the requirements were met, and stating that upon issuance of the license, the Company’s three other subsidiaries would merge into the subsidiary that had been granted a license. On October 19, 2011, the DoT filed a reply to the Company’s September 27, 2011 petition with the TDSAT. In its reply, the DoT stated that upon issuance of a license, the Company’s subsidiary could apply for assignment of the spectrum, and at that time, the DoT would decide whether to grant the requested assignment and whether the Company’s applications for licenses were timely filed in accordance with its rules. On October 20, 2011, the TDSAT conducted a second hearing on the Company’s case. At the conclusion of the hearing, the TDSAT ordered the DoT to clarify the aforementioned statements in its October 19, 2011 reply in light of its October 10, 2011 offer. On November 2, 2011, the subsidiary made a filing with the DoT to meet the four requirements of the DoT Letter, which included certification by the Company’s subsidiary that no dues were payable to the DoT by either the subsidiary or its shareholders. The TDSAT conducted a hearing on November 8, 2011 and ordered that the subsidiary and the DoT meet to expedite the licensing process. The Company met with the DoT on November 14, 2011 and thereafter provided additional documentation to the DoT. At a December 2, 2011 hearing before the TDSAT, the DoT stated that it had served a provisional assessment on one of the subsidiary’s Indian partners in the amount of approximately $28 million (based on the applicable foreign currency exchange rate on December 25, 2011) in unpaid dues, including interest and penalties. The TDSAT conducted hearings on this matter on December 9, 2011, January 2, 2012 and January 31, 2012. The next hearing is scheduled for February 6, 2012. On January 22, 2012, the Company filed an application requesting that the TDSAT order the DoT to issue the license pursuant to the DoT's October 10, 2011 letter. In the application, the Company argued that the provisional assessment was not a legal basis for the DoT to delay issuing the license. The Company also offered to have its subsidiary execute an undertaking that would take effect upon issuance of the license. In the undertaking, the Company’s subsidiary would agree that if the Indian partner did not pay an amount ultimately found to be due (up to the amount of the assessment), the subsidiary would pay such amount. In addition, the Company offered to have the subsidiary provide a bank guarantee to cover the amount found to be payable if the DoT has any concern about the creditworthiness of the subsidiary. The DOT has been ordered to file a response to the Company’s application on February 3, 2012. If the Company does not ultimately prevail in this matter, the Company’s subsidiary may not receive a license or an assignment of the spectrum that the Company won in the auction; and in either of those events, the Company’s payment for the spectrum may not be returned.
Icera Complaint to the European Commission: On June 7, 2010, the European Commission (the Commission) notified and provided the Company with a redacted copy of a complaint filed with the Commission by Icera, Inc. alleging that the Company has engaged in anticompetitive activity. The Company has been 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. On October 19, 2011, the Commission notified the Company that it should provide to the Commission additional documents and information. The Company continues to cooperate fully with the Commission’s preliminary investigation.

Korea Fair Trade Commission (KFTC) Complaint: On January 4, 2010, the KFTC issued a written decision, finding that the Company had violated South Korean law by offering certain discounts and rebates for purchases of its CDMA chips 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 in the second quarter of fiscal 2010. The Company is appealing that decision in the Korean courts.
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 eleven different dates, with an additional hearing day scheduled on February 17, 2012 and additional hearing days yet to be scheduled.
Securities and Exchange Commission (SEC) Formal Order of Private Investigation and Department of Justice (DOJ) Investigation: On September 8, 2010, the Company was notified by the SEC’s Los Angeles Regional office of a formal order of private investigation. The Company understands that the investigation arose from a “whistleblower’s” allegations made in December 2009 to the audit committee of the Company’s  Board of Directors and to the SEC. The audit committee completed an internal review of the allegations with the assistance of independent counsel and independent forensic accountants. This internal review into the whistleblower’s allegations and related accounting practices did not identify any errors in the Company's financial statements. On January 27, 2012, the Company learned that the U.S. Attorney’s Office for the Southern District of California/DOJ has begun a preliminary investigation regarding the Company’s compliance with the Foreign Corrupt Practices Act (FCPA), a topic about which the SEC is also inquiring. The Company believes that it is in compliance with the requirements of the FCPA and will continue to cooperate with both agencies.
Other: The Company has been named, along with many other manufacturers of wireless phones, wireless operators and industry-related organizations, as a defendant in three lawsuits pending in Washington D.C. superior court, seeking monetary damages arising out of its sale of cellular phones.
While there can be no assurance of favorable outcomes, the Company believes the claims made by other parties in the foregoing matters are without merit and will vigorously defend the actions. The Company has not recorded any accrual at December 25, 2011 for contingent liabilities or recognized any asset impairment charges associated with the legal proceedings described above based on the Company’s belief that liabilities, while possible, are not probable. Further, any possible range of loss cannot be reasonably estimated at this time. 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 actions will not have a material adverse effect on its operating results, liquidity or financial position.
Litigation Settlement, Patent License and Other Related Items. On April 26, 2009, the Company entered into a Settlement and Patent License and Non-Assert Agreement with Broadcom. The Company agreed to pay Broadcom $891 million, of which $632 million was paid through December 25, 2011, and the remainder will be paid ratably through April 2013. At December 25, 2011, the carrying value of the liability was $253 million, which also approximated the fair value of the contractual liability net of imputed interest.
Loans Payable Related to India BWA Spectrum. In connection with the India BWA spectrum won in India in June 2010, certain of the Company’s subsidiaries in India entered into loan agreements with multiple lenders that are denominated in Indian rupees. The loans bear interest at an annual rate based on the highest rate among the bank lenders, which is reset quarterly, plus 0.25% (10.25% at December 25, 2011) with interest payments due monthly. The loans can be prepaid without penalty on certain dates and are guaranteed by QUALCOMM Incorporated and one of its subsidiaries. In December 2011, the lender that could demand prepayment of its portion of the loans exercised its right requiring the Company to prepay the amount outstanding on February 28, 2012 ($142 million at December 25, 2011). The Company intends to refinance this amount with new loans. The remaining loans ($786 million at December 25, 2011) are due and payable in full in December 2012. The loan agreements also define certain events of default, including, among other things, if certain government authorizations are revoked, terminated, withdrawn, suspended, modified or withheld. If the DoT’s rejection of the Company’s license applications were to be considered an event of default, the bank lenders could have declared the loans due and payable immediately. The Company has received waivers from each of the bank lenders related to this matter until at least April 1, 2012, which are conditioned upon the Company continuing to pursue its legal rights in this matter. The lenders have agreed that any default will be deemed cured under certain circumstances, including if one of the relevant subsidiaries is granted the license and the other three are pursuing a merger into the subsidiary that has been offered a license. The loan agreements contain standard covenants, which, among other things, limit actions by the subsidiaries that are party to the loan agreements, including the incurrence of loans and equity investments, disposition of assets, mergers and consolidations and other matters customarily restricted in such agreements. At December 25, 2011, the aggregate carrying value of the loans was $928 million, which approximated fair value.
Indemnifications. With the exception of the practices of Atheros, 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 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. Under Atheros’ indemnification agreements, software license agreements and product sale agreements, including its standard software license agreements and standard terms and conditions of semiconductor sales, Atheros agrees, subject to restrictions and after certain conditions are met, to indemnify and defend its licensees and customers against third-party claims asserting infringement of certain intellectual property rights, which may include patents, copyrights, trademarks or trade secrets, and to pay any judgments entered on such claims against the licensees or customers. Through December 25, 2011, Atheros 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 Atheros’ products.
These indemnification arrangements are not initially measured and recognized at fair value because they are deemed to be similar to product warranties in that they relate to claims and/or other actions that could impair the ability of the Company’s direct or indirect customers to use the Company’s products or services. Accordingly, the Company records liabilities resulting from the arrangements when they are probable and can be reasonably estimated. Reimbursements under indemnification arrangements have not been material to the Company’s consolidated financial statements. The Company has not recorded any accrual for contingent liabilities at December 25, 2011 associated with these indemnification arrangements, other than negligible amounts for reimbursement of legal costs, based on the Company’s belief that additional liabilities, while possible, are not probable. Further, any possible range of loss cannot be 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. Noncancelable obligations under these agreements at December 25, 2011 for the remainder of fiscal 2012 and for each of the subsequent four years from fiscal 2013 through 2016 were approximately $2.1 billion, $75 million, $39 million, $36 million and $25 million, respectively, and $8 million thereafter. Of these amounts, for the remainder of fiscal 2012 and for fiscal 2013, commitments to purchase integrated circuit product inventories comprised $1.7 billion and $3 million, respectively.
Leases. The future minimum lease payments for all capital leases and operating leases at December 25, 2011 were as follows (in millions):
 
Capital
Leases
 
Operating
Leases
 
Total
Remainder of fiscal 2012
$
8

 
$
100

 
$
108

2013
11

 
112

 
123

2014
11

 
92

 
103

2015
11

 
43

 
54

2016
12

 
28

 
40

Thereafter
293

 
164

 
457

Total minimum lease payments
$
346

 
$
539

 
$
885

Deduct: Amounts representing interest
196

 
 
 
 
Present value of minimum lease payments
150

 
 
 
 
Deduct: Current portion of capital lease obligations
1

 
 
 
 
Long-term portion of capital lease obligations
$
149

 
 
 
 

The Company leases certain of its land, facilities and equipment under noncancelable operating leases, with terms ranging from less than one year to 35 years and with provisions in certain leases for cost-of-living increases. The Company leases certain property under capital lease agreements associated with its discontinued operations (Note 8), primarily related to site leases that have an initial term of five to seven years with renewal options of up to five additional renewal periods. In determining the capital lease classification for the site leases upon commencement of each lease, the Company included all renewal options. As a result of its restructuring plan, the Company does not intend to renew its existing site capital leases. At December 25, 2011, the Company had $130 million of site capital lease assets (which are included in buildings and improvements in property, plant and equipment) and $149 million of capital lease obligations (which are included in other liabilities) that pertain to lease optional renewal periods. The Company expects to write off these amounts at the end of the current contractual lease terms. Any early terminations may impact the amounts that are written off.
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Segment Information
3 Months Ended
Dec. 25, 2011
Notes to Financial Statements [Abstract]
Note 7 - Segment Information
Note 7 — Segment Information
The Company is organized on the basis of products and services. The Company aggregates four of its divisions into the Qualcomm Wireless & Internet (QWI) segment and three of its divisions into the Qualcomm Strategic Initiatives (QSI) segment. Reportable segments are as follows:
Qualcomm CDMA Technologies (QCT) — develops and supplies integrated circuits and system software based on CDMA, OFDMA and other technologies for use in voice and data communications, networking, application processing, multimedia and global positioning system products;
Qualcomm Technology Licensing (QTL) — grants licenses or otherwise provides rights to use portions of the Company’s intellectual property portfolio, which, among other rights, includes certain patent rights essential to and/or useful in the manufacture and sale of certain wireless products, including, without limitation, products implementing cdmaOne, CDMA2000, WCDMA, CDMA TDD (including TD-SCDMA), GSM/GPRS/EDGE and/or OFDMA standards, and collects fixed license fees and royalties in partial consideration for such licenses;
Qualcomm Wireless & Internet (QWI) — comprised of:
Qualcomm Internet Services (QIS) — provides content enablement services for the wireless industry and push-to-talk and other products and services for wireless network operators;
Qualcomm Government Technologies (QGOV) — provides development, hardware, analytical expertise and services to United States government agencies involving wireless communications technologies;
Qualcomm Enterprise Services (QES) — provides satellite- and terrestrial-based two-way wireless connectivity and position location services and sells mobile information units to transportation and logistics companies and other enterprise companies with fleet vehicles; and
Firethorn — builds and manages software applications that enable certain mobile commerce services.
Qualcomm Strategic Initiatives (QSI) — comprised of the Company’s Qualcomm Ventures, Structured Finance & Strategic Investments and FLO TV divisions. QSI makes strategic investments that the Company believes will open new opportunities for its technologies, support the design and introduction of new products or services for voice and data communications or possess unique capabilities or technology. Many of these strategic investments are in early-stage companies. QSI also holds wireless spectrum. The results of QSI’s FLO TV business are presented as discontinued operations (Note 8) and are therefore not included in QSI’s revenues or loss before income taxes.
The Company evaluates the performance of its segments based on earnings (loss) before income taxes (EBT) from continuing operations. Segment EBT includes the allocation of certain corporate expenses to the segments, including depreciation and amortization expense related to unallocated corporate assets. Certain income and charges are not allocated to segments in the Company’s management reports because they are not considered in evaluating the segments’ operating performance. Unallocated income and charges include certain investment income (loss); share-based compensation (Note 1); and certain research and development expenses and other selling and marketing expenses that were deemed to be not directly related to the businesses of the segments. Additionally, starting with acquisitions in the third quarter of fiscal 2011, unallocated charges include recognition of the step-up of inventories to fair value and amortization of certain intangible assets. Such charges related to acquisitions that were completed prior to the third quarter of fiscal 2011 are allocated to the respective segments. The table below presents revenues and EBT for reportable segments (in millions):
 
QCT
 
QTL
 
QWI
 
QSI*
 
Reconciling
Items*
 
Total*
For the three months ended:
 
 
 
 
 
 
 
 
 
 
 
December 25, 2011
 
 
 
 
 
 
 
 
 
 
 
Revenues
$
3,085

 
$
1,440

 
$
152

 
$

 
$
4

 
$
4,681

EBT
739

 
1,267

 
1

 
(34
)
 
(252
)
 
1,721

December 26, 2010
 
 
 
 
 
 
 
 
 
 
 
Revenues
$
2,116

 
$
1,057

 
$
172

 
$

 
$
3

 
$
3,348

EBT
640

 
892

 

 
(21
)
 
(41
)
 
1,470


*As adjusted for discontinued operations (Note 8)
Reconciling items in the previous table were as follows (in millions):
 
Three Months Ended
 
December 25,
2011
 
December 26, 2010*
Revenues
 
 
 
Elimination of intersegment revenues
$
(1
)
 
$
(1
)
Other nonreportable segments
5

 
4

 
$
4

 
$
3

EBT
 
 
 
Unallocated cost of equipment and services revenues
$
(70
)
 
$
(14
)
Unallocated research and development expenses
(162
)
 
(117
)
Unallocated selling, general and administrative expenses
(115
)
 
(85
)
Unallocated investment income, net
190

 
244

Other nonreportable segments
(95
)
 
(69
)
 
$
(252
)
 
$
(41
)

*As adjusted for discontinued operations (Note 8)
Reconciling items for the three months ended December 25, 2011 included $51 million and $9 million of unallocated cost of equipment and services revenues and unallocated selling, general and administrative expenses, respectively, related to the amortization of intangible assets resulting from acquisitions. Other nonreportable segments’ losses before taxes during the three months ended December 25, 2011 and December 26, 2010 were primarily attributable to the Company’s QMT division, a nonreportable segment developing display technology for mobile devices and other applications.
Revenues from external customers and intersegment revenues were as follows (in millions):
 
QCT
 
QTL
 
QWI
For the three months ended:
 
 
 
 
 
December 25, 2011
 
 
 
 
 
Revenues from external customers
$
3,084

 
$
1,440

 
$
152

Intersegment revenues
1

 

 

December 26, 2010
 
 
 
 
 
Revenues from external customers
$
2,115

 
$
1,057

 
$
172

Intersegment revenues
1

 

 


Segment assets are comprised of accounts receivable and inventories for all reportable segments other than QSI. QSI segment assets include certain marketable securities, notes receivable, spectrum licenses, other investments and all assets of QSI’s consolidated subsidiaries. QSI segment assets related to the discontinued FLO TV business totaled $901 million and $913 million at December 25, 2011 and September 25, 2011, respectively. Reconciling items for total assets included $1.0 billion and $806 million at December 25, 2011 and September 25, 2011, respectively, of goodwill and other assets related to the Company’s QMT division. Total segment assets also 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, goodwill, other intangible assets and assets of nonreportable segments. Segment assets and reconciling items were as follows (in millions):
 
December 25,
2011
 
September 25,
2011
QCT
$
1,519

 
$
1,569

QTL
70

 
36

QWI
133

 
136

QSI
2,320

 
2,386

Reconciling items
33,564

 
32,295

Total consolidated assets
$
37,606

 
$
36,422

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Discontinued Operations
3 Months Ended
Dec. 25, 2011
Notes to Financial Statements [Abstract]
Note 8 - Discontinued Operations
Note 8 — Discontinued Operations
On December 27, 2011, after the close of the first fiscal quarter, the Company completed the sale of substantially all of its 700 MHz spectrum for $1.9 billion. As a result, the Company will recognize a gain in discontinued operations of $1.2 billion in the second quarter of fiscal 2012 related to the close of this transaction. The FLO TV business and network were shut down on March 27, 2011. Since then, the Company has been working to sell the remaining assets and exit contracts. The 700 MHz spectrum is classified as held for sale. All other assets were considered disposed of at December 25, 2011. Accordingly, the results of operations of the FLO TV business are presented as discontinued operations. Loss from discontinued operations includes share-based payments and excludes certain general corporate expenses allocated to the FLO TV business during the periods presented.
Summarized results from discontinued operations were as follows (in millions):
 
Three Months Ended
 
December 25, 2011
 
December 26, 2010
Revenues
$

 
$

Loss from discontinued operations
$
(8
)
 
$
(141
)
Income tax benefit
3

 
59

Discontinued operations, net of income taxes
$
(5
)
 
$
(82
)
At December 25, 2011, total assets and liabilities of the discontinued operations in the condensed consolidated balance sheet were $901 million and $225 million, respectively. The assets primarily consisted of the spectrum held for sale of $746 million and capital lease assets of $130 million. Liabilities primarily consisted of capital lease liabilities of $149 million. The Company has a significant number of site leases, and the Company has corresponding capital lease assets, capital lease liabilities and asset retirement obligations (Note 6). The capital lease assets, included in property, plant and equipment, net, were considered disposed of at March 27, 2011 when the Company shut down the FLO TV business.
Restructuring activities under the Company’s plan related to discontinued operations were initiated in the fourth quarter of fiscal 2010 and are expected to be substantially complete by the end of fiscal 2012 as the Company continues to negotiate the exit of certain contracts and removes certain of its equipment from the network sites. Restructuring charges primarily consist of lease exit and other contract termination costs and certain severance costs. The Company estimates that it will incur future restructuring charges of up to $20 million. The Company may also realize certain gains, primarily due to the potential release of liabilities associated with ongoing efforts to exit certain contracts, the amount of which cannot be reasonably estimated at this time. The restructuring liability, which is reported as a component of other liabilities, consisted of contract termination costs of $37 million and other costs of $3 million at December 25, 2011. During the three months ended December 25, 2011, the Company made payments on amounts previously accrued of $3 million. Future cash expenditures are expected to be in the range of $70 million to $110 million.
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Acquisitions
9 Months Ended
Jun. 26, 2011
Notes to Financial Statements [Abstract]
Note 9 - Acquisitions
Note 9 — Acquisitions
During the three months ended December 25, 2011, the Company acquired five businesses for total cash consideration of $288 million. Technology-based intangible assets recognized in the amount of $32 million are being amortized on a straight-line basis over a weighted-average useful life of six years. The Company recorded $46 million related to two in-process research and development (IPR&D) projects, which are expected to be completed within the next two years. The acquired IPR&D will not be amortized until completion, and upon completion, IPR&D projects will be amortized over their useful lives, which are expected to be nine years. Goodwill recognized in these transactions, of which $61 million is expected to be deductible for tax purposes, was assigned to the Company’s reportable segments as follows: $39 million to QCT, $22 million to QTL and $135 million to a non-reportable segment.
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Fair Value Measurements
3 Months Ended
Dec. 25, 2011
Notes to Financial Statements [Abstract]
Note 10 - Fair Value Measurements
Note 10 — Fair Value Measurements
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants as of the measurement date. Applicable accounting guidance provides an established hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors that market participants would use in valuing the asset or liability. There are three levels of inputs that may be used to measure fair value:
Level 1 includes financial instruments for which quoted market prices for identical instruments are available in active markets.
Level 2 includes financial instruments for which there are inputs other than quoted prices included within Level 1 that are observable for the instrument.
Level 3 includes financial instruments for which fair value is derived from valuation techniques in which one or more significant inputs are unobservable, including the Company’s own assumptions.
Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy.
The following table presents the Company’s fair value hierarchy for assets and liabilities measured at fair value on a recurring basis at December 25, 2011 (in millions):
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets
 
 
 
 
 
 
 
Cash equivalents
$
1,192

 
$
2,857

 
$

 
$
4,049

Marketable securities
 
 
 
 
 
 
 
U.S. Treasury securities and government-related securities
371

 
792

 

 
1,163

Corporate bonds and notes

 
6,320

 

 
6,320

Mortgage- and asset-backed securities

 
671

 
23

 
694

Auction rate securities

 

 
122

 
122

Non-investment-grade debt securities

 
4,045

 
34

 
4,079

Common and preferred stock
1,212

 
694

 

 
1,906

Equity mutual and exchange-traded funds
922

 

 

 
922

Debt mutual funds
1,327

 
481

 

 
1,808

Total marketable securities
3,832

 
13,003

 
179

 
17,014

Derivative instruments

 
17

 

 
17

Other investments
175

 

 

 
175

Total assets measured at fair value
$
5,199

 
$
15,877

 
$
179

 
$
21,255

Liabilities
 
 
 
 
 
 
 
Derivative instruments
$

 
$
56

 
$

 
$
56

Other liabilities
175

 

 
6

 
181

Total liabilities measured at fair value
$
175

 
$
56

 
$
6

 
$
237



Cash Equivalents and Marketable Securities. The Company considers all highly liquid investments, including repurchase agreements, with original maturities of three months or less to be cash equivalents. Cash equivalents are comprised of money market funds, certificates of deposit, commercial paper, government agencies’ securities and repurchase agreements fully collateralized by government agencies’ securities.
With the exception of auction rate securities, the Company obtains pricing information from quoted market prices, pricing vendors or quotes from brokers/dealers. The Company conducts reviews of its primary pricing vendors to determine whether the inputs used in the vendor’s pricing processes are deemed to be observable.
The fair value of U.S. Treasury securities and government-related securities, corporate bonds and notes and common and preferred stock are generally determined using standard observable inputs, including reported trades, quoted market prices, matrix pricing, benchmark yields, broker/dealer quotes, issuer spreads, two-sided markets and/or benchmark securities.
The fair value of debt and equity mutual funds is reported as published net asset values. The Company assesses the daily frequency and size of transactions at published net asset values and/or the fund’s underlying holdings to determine whether fair value is based on observable or unobservable inputs.
The fair value of highly rated mortgage- and asset-backed securities is derived from the use of matrix pricing (prices for similar securities) or, in some cases, cash flow pricing models with observable inputs such as contractual terms, maturity, credit rating and/or securitization structure to determine the timing and amount of future cash flows. Certain mortgage- and asset-backed securities, principally those rated below AAA, may require the use of significant unobservable inputs to estimate fair value, such as default likelihood, recovery rates and prepayment speed.
The fair value of auction rate securities is estimated by the Company using a discounted cash flow model that incorporates transaction details such as contractual terms, maturity and timing and amount of future cash flows, as well as assumptions related to liquidity, default likelihood and recovery, the future state of the auction rate market and credit valuation adjustments of market participants. Though certain of the securities held by the Company are pools of student loans guaranteed by the U.S. government, prepayment speeds and illiquidity discounts are considered significant unobservable inputs. These additional inputs are generally unobservable, and therefore, auction rate securities are included in Level 3.
Derivative Instruments. Derivative instruments include foreign currency option and forward contracts to manage foreign exchange risk for certain foreign currency transactions and certain balances denominated in a foreign currency; option, forward and swap contracts to acquire or reduce foreign exchange risk and/or equity and credit risks for portfolios of marketable securities classified as trading; and written put options to repurchase shares of the Company’s common stock at fixed prices. Derivative instruments that are traded on an exchange are valued using quoted market prices and are included in Level 1. Derivative instruments that are not traded on an exchange are valued using standard calculations/models that are primarily based on observable inputs, such as foreign currency exchange rates, the Company’s stock price, volatilities and interest rates, and therefore, such derivative instruments are included in Level 2.
Other Investments and Other Liabilities. Other investments and other liabilities included in Level 1 are comprised of the Company’s deferred compensation plan liability and related assets, which are invested in mutual funds. Other liabilities included in Level 3 are comprised of put rights held by third parties representing interests in certain of the Company’s subsidiaries. These put rights are valued with a standard option pricing model using significant unobservable inputs.
Activity between Levels of the Fair Value Hierarchy. There were no significant transfers between Level 1 and Level 2 during the three months ended December 25, 2011 or December 26, 2010. When a determination is made to classify an asset or liability within Level 3, the determination is based upon the significance of the unobservable inputs to the overall fair value measurement. The following table includes the activity for marketable securities and other liabilities classified within Level 3 of the valuation hierarchy (in millions):
 
Three Months Ended December 25, 2011
 
Auction Rate
Securities
 
Other Marketable
Securities
 
Other Liabilities
Beginning balance of Level 3
$
124

 
$
27

 
$
7

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

 

 
(1
)
Included in other comprehensive income
(1
)
 

 

Purchases

 
35

 

Settlements
(1
)
 
(5
)
 

Ending balance of Level 3
$
122

 
$
57

 
$
6


 
Three Months Ended December 26, 2010
 
Auction Rate
Securities
 
Other Marketable
Securities
Beginning balance of Level 3
$
126

 
$
18

Total realized and unrealized gains or losses:
 
 
 
Included in other comprehensive income
2

 

Settlements
(2
)
 
(1
)
Ending balance of Level 3
$
126

 
$
17


The Company recognizes transfers into and out of levels within the fair value hierarchy at the end of the fiscal month in which the actual event or change in circumstances that caused the transfer occurs. There were no transfers into or out of Level 3 during the three months ended December 25, 2011 and December 26, 2010.
Nonrecurring Fair Value Measurements. The Company measures certain assets at fair value on a nonrecurring basis. These assets include cost and equity method investments when they are deemed to be other-than-temporarily impaired, assets acquired and liabilities assumed in an acquisition or in a nonmonetary exchange, and property, plant and equipment and intangible assets that are written down to fair value when they are held for sale or determined to be impaired. During the three months ended December 25, 2011 and December 26, 2010, 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.
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Marketable Securities
3 Months Ended
Dec. 25, 2011
Notes to Financial Statements [Abstract]
Note 11 - Marketable Securities
Note 11 — Marketable Securities
Marketable securities were comprised as follows (in millions):
 
Current
 
Noncurrent
 
December 25,
2011
 
September 25,
2011
 
December 25,
2011
 
September 25,
2011
Trading:
 
 
 
 
 
 
 
U.S. Treasury securities and government-related securities
$
230

 
$

 
$
330

 
$

Corporate bonds and notes
266

 

 
91

 

Mortgage- and asset-backed securities

 

 
35

 

Non-investment-grade debt securities

 

 
54

 

Total trading
496

 

 
510

 

Available-for-sale:
 
 
 
 
 
 
 
U.S. Treasury securities and government-related securities
573

 
516

 
30

 
6

Corporate bonds and notes
3,503

 
3,665

 
2,460

 
2,353

Mortgage- and asset-backed securities
527

 
587

 
132

 
91

Auction rate securities

 

 
122

 
124

Non-investment-grade debt securities
20

 
19

 
4,005

 
3,653

Common and preferred stock
130

 
76

 
1,776

 
1,713

Equity mutual and exchange-traded funds

 

 
922

 
845

Debt mutual funds
1,327

 
1,327

 

 

Total available-for-sale
6,080

 
6,190

 
9,447

 
8,785

Fair value option:
 
 
 
 
 
 
 
Debt mutual fund

 

 
481

 
476

Total marketable securities
$
6,576

 
$
6,190

 
$
10,438

 
$
9,261


The Company holds an investment in a debt mutual fund for which the Company elected the fair value option. The investment would have otherwise been recorded using the equity method. The debt mutual fund has no single maturity date. At December 25, 2011, the Company had an effective ownership interest in the debt mutual fund of 21%. Increases in fair value associated with this investment of $5 million were recognized in net investment income during each of the three months ended December 25, 2011 and December 26, 2010. The Company believes that recording the investment at fair value and reporting the investment as a marketable security is preferable to applying the equity method because the Company is able to redeem its shares at net asset value, which is determined daily.
The Company classifies portfolios of debt securities that involve the purchase or sale of derivative instruments to acquire or reduce foreign exchange and/or equity and credit risk as trading. Net losses recognized on debt securities classified as trading still held at December 25, 2011 were $2 million for the three months ended December 25, 2011. The Company did not hold any securities classified as trading at September 25, 2011.
At December 25, 2011, 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
$
799

 
$
4,878

 
$
2,716

 
$
1,034

 
$
3,272

 
$
12,699

Securities with no single maturity date included debt mutual funds, non-investment-grade debt securities, mortgage- and asset-backed securities and auction rate securities.
The Company recorded realized gains and losses on sales of available-for-sale securities as follows (in millions):
 
Gross Realized Gains
 
Gross Realized Losses
 
Net Realized Gains
For the three months ended
 
 
 
 
 
December 25, 2011
$
36

 
$
(2
)
 
$
34

December 26, 2010
128

 
(5
)
 
123

Available-for-sale securities were comprised as follows (in millions):
 
Cost
 
Unrealized Gains
 
Unrealized Losses
 
Fair Value
December 25, 2011
 
 
 
 
 
 
 
Equity securities
$
2,428

 
$
443

 
$
(43
)
 
$
2,828

Debt securities
12,500

 
322

 
(123
)
 
12,699

 
$
14,928

 
$
765

 
$
(166
)
 
$
15,527

September 25, 2011
 
 
 
 
 
 
 
Equity securities
$
2,426

 
$
278

 
$
(70
)
 
$
2,634

Debt securities
12,179

 
294

 
(132
)
 
12,341

 
$
14,605

 
$
572

 
$
(202
)
 
$
14,975


The following table shows the gross unrealized losses and fair values of the Company’s investments in individual securities that are classified as available-for-sale and have been in a continuous unrealized loss position deemed to be temporary for less than 12 months and for more than 12 months, aggregated by investment category (in millions):
 
December 25, 2011
 
Less than 12 months
 
More than 12 months
 
Fair Value
 
Unrealized Losses
 
Fair Value
 
Unrealized Losses
U.S. Treasury securities and government-related securities
$
419

 
$
(2
)
 
$
4

 
$

Corporate bonds and notes
1,930

 
(44
)
 
58

 
(5
)
Auction rate securities
3

 

 
119

 
(3
)
Non-investment-grade debt securities
1,396

 
(60
)
 
32

 
(4
)
Common and preferred stock
313

 
(27
)
 
4

 

Equity mutual and exchange-traded funds
153

 
(16
)
 

 

Debt mutual funds
1,320

 
(5
)
 
1

 

 
$
5,534

 
$
(154
)
 
$
218

 
$
(12
)

 
September 25, 2011
 
Less than 12 months
 
More than 12 months
 
Fair Value
 
Unrealized Losses
 
Fair Value
 
Unrealized Losses
Corporate bonds and notes
$
1,862

 
$
(41
)
 
$
41

 
$

Auction rate securities
3

 

 
121

 
(2
)
Non-investment-grade debt securities
1,867

 
(86
)
 
19

 
(3
)
Common and preferred stock
750

 
(70
)
 
4

 

 
$
4,482

 
$
(197
)
 
$
185

 
$
(5
)

At December 25, 2011, the Company concluded that the unrealized losses on its available-for-sale securities were temporary. Further, for common and preferred stock with unrealized losses, the Company has the ability and the intent to hold such securities until they recover, which is expected to be within a reasonable period of time. For debt securities with unrealized losses, the Company does not have the intent to sell, nor is it more likely than not that the Company will be required to sell, such securities before recovery or maturity.
The following table shows the activity for the credit loss portion of other-than-temporary impairments on debt securities held by the Company (in millions):
 
Three Months Ended
 
December 25,
2011
 
December 26,
2010
Beginning balance of credit losses
$
46

 
$
109

Reductions in credit losses related to securities the Company intends to sell

 
(11
)
Additional credit losses recognized on securities previously impaired
1

 

Reductions in credit losses related to securities sold
(1
)
 
(7
)
Accretion of credit losses due to an increase in cash flows expected to be collected

 
(2
)
Ending balance of credit losses
$
46

 
$
89

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Basis of Presentation (Policies)
3 Months Ended
Dec. 25, 2011
Notes to Financial Statements [Abstract]
Earnings Per Common Share
 Earnings Per Common Share. Basic earnings per common share is 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 is computed by dividing net income attributable to Qualcomm by the combination of dilutive common share equivalents, comprised of shares issuable under the Company’s share-based compensation plans and shares subject to written put options, and the weighted-average number of common shares outstanding during the reporting period. Dilutive common share equivalents include the dilutive effect of in-the-money share equivalents, which are calculated based on the average share price for each period using the treasury stock method. Under the treasury stock method, the exercise price of an award, if any, the amount of compensation cost, if any, for future service that the Company has not yet recognized, and the estimated tax benefits that would be recorded in paid-in capital, if any, when an award is settled are assumed to be used to repurchase shares in the current period. The incremental dilutive common share equivalents, calculated using the treasury stock method, for the three months ended December 25, 2011 and December 26, 2010 were 37,052,000 and 25,507,000, respectively.
     Employee stock options to purchase approximately 4,471,000 and 60,792,000 shares of common stock during the three months ended December 25, 2011 and December 26, 2010, respectively, were outstanding but not included in the computation of diluted earnings per common share because the effect would be anti-dilutive. Put options outstanding during the three months ended December 25, 2011 to purchase 11,800,000 shares of common stock were not included in the earnings per common share computation because the put options’ exercise prices were less than the average market price of the common stock while they were outstanding, and therefore, the effect on diluted earnings per common share would be anti-dilutive (Note 5). In addition, 675,000 and 467,000 shares of other common stock equivalents outstanding during the three months ended December 25, 2011 and December 26, 2010, respectively, were not included in the computation of diluted earnings per common share because either the effect would be anti-dilutive or certain performance conditions were not satisfied at the end of the period.
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Fair Value Measurements Fair Value Measurements (Policies)
3 Months Ended
Dec. 25, 2011
Notes to Financial Statements [Abstract]
Cash Equivalents
The Company considers all highly liquid investments, including repurchase agreements, with original maturities of three months or less to be cash equivalents. Cash equivalents are comprised of money market funds, certificates of deposit, commercial paper, government agencies’ securities and repurchase agreements fully collateralized by government agencies’ securities.
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Marketable Securities Marketable Securities (Policies)
3 Months Ended
Dec. 25, 2011
Notes to Financial Statements [Abstract]
Marketable Securities, Trading Securities
The Company classifies portfolios of debt securities that involve the purchase or sale of derivative instruments to acquire or reduce foreign exchange and/or equity and credit risk as trading.
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Basis of Presentation (Tables)
3 Months Ended
Dec. 25, 2011
Notes to Financial Statements [Abstract]
Total comprehensive income
Total comprehensive income attributable to Qualcomm consisted of the following (in millions):
 
Three Months Ended
 
December 25,
2011
 
December 26,
2010
Net income
$
1,395

 
$
1,170

Other comprehensive income:
 
 
 
Foreign currency translation
(27
)
 
5

Noncredit other-than-temporary impairment losses and subsequent changes in fair value related to certain available-for-sale debt securities, net of income taxes
1

 
(4
)
Net unrealized gains on other available-for-sale securities and derivative instruments, net of income taxes
175

 
131

Reclassification of net realized gains on available-for-sale securities and derivative instruments included in net income, net of income taxes
(18
)
 
(76
)
Reclassification of other-than-temporary losses on available-for-sale securities included in net income, net of income taxes
9

 
4

Total other comprehensive income
140

 
60

Total comprehensive income
1,535

 
1,230

Comprehensive loss attributable to noncontrolling interests
8

 

Comprehensive income attributable to Qualcomm
$
1,543

 
$
1,230

Components of accumulated other comprehensive income
Components of accumulated other comprehensive income in Qualcomm stockholders’ equity consisted of the following (in millions):
 
December 25,
2011
 
September 25,
2011
Noncredit other-than-temporary impairment losses and subsequent changes in fair value related to certain available-for-sale debt securities, net of income taxes
$
29

 
$
27

Net unrealized gains on other available-for-sale securities, net of income taxes
581

 
427

Net unrealized losses on derivative instruments, net of income taxes
(4
)
 
(15
)
Foreign currency translation
(111
)
 
(86
)
 
$
495

 
$
353

Share-based compensation expense, related to all share-based awards
Total estimated share-based compensation expense, related to all of the Company’s share-based awards, was comprised as follows (in millions):
 
Three Months Ended
 
December 25,
2011
 
December 26, 2010*
Cost of equipment and services revenues
$
20

 
$
14

Research and development
126

 
85

Selling, general and administrative
101

 
70

Continuing operations
247

 
169

Related income tax benefit
(53
)
 
(55
)
Continuing operations, net of income taxes
194

 
114

Discontinued operations

 
3

Related income tax benefit

 
(1
)
Discontinued operations, net of income taxes

 
2

 
$
194

 
$
116

*As adjusted for discontinued operations (Note 8)
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Composition of Certain Financial Statement Items (Tables)
3 Months Ended
Dec. 25, 2011
Notes to Financial Statements [Abstract]
Inventories
 Inventories.
 
December 25,
2011
 
September 25,
2011
 
(In millions)
Raw materials
$
14

 
$
15

Work-in-process
235

 
384

Finished goods
465

 
366

 
$
714

 
$
765

Other current liabilities
Other Current Liabilities.
 
December 25,
2011
 
September 25,
2011
 
(In millions)
Customer incentives and other customer-related liabilities
$
1,401

 
$
1,180

Current portion of payable to Broadcom (Note 6)
170

 
170

Payable for unsettled securities trades
75

 
298

Other
321

 
406

 
$
1,967

 
$
2,054

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Investment Income, Net (Tables)
3 Months Ended
Dec. 25, 2011
Notes to Financial Statements [Abstract]
Investment income, net
Investment Income, Net
 
Three Months Ended
 
December 25,
2011
 
December 26, 2010*
 
 
Interest and dividend income
$
130

 
$
131

Interest expense
(27
)
 
(24
)
Net realized gains on marketable securities
37

 
127

Net realized gains on other investments
7

 

Impairment losses on marketable securities
(14
)
 
(8
)
Impairment losses on other investments
(6
)
 
(3
)
Gains on derivative instruments
45

 
1

Equity in losses of investees
(2
)
 
(1
)
 
$
170

 
$
223


*As adjusted for discontinued operations (Note 8)
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Stockholders' Equity (Tables)
3 Months Ended
Dec. 25, 2011
Notes to Financial Statements [Abstract]
Changes in stockholders' equity
Changes in stockholders’ equity for the three months ended December 25, 2011 were as follows (in millions):
 
Qualcomm Stockholders’ Equity
 
Noncontrolling Interests
 
Total Stockholders’ Equity
Balance at September 25, 2011
$
26,951

 
$
21

 
$
26,972

Net income (loss) (1)
1,401

 
(6
)
 
1,395

Other comprehensive income (loss)
142

 
(2
)
 
140

Common stock issued under employee benefit plans and the related tax benefits, net of shares withheld for tax
203

 

 
203

Share-based compensation
251

 

 
251

Dividends
(368
)
 

 
(368
)
Stock repurchases
(99
)
 

 
(99
)
Other

 
3

 
3

Balance at December 25, 2011
$
28,481

 
$
16

 
$
28,497


(1) Loss from discontinued operations, net of income taxes, (Note 8) was attributable to Qualcomm.
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Commitments and Contingencies (Tables)
3 Months Ended
Dec. 25, 2011
Notes to Financial Statements [Abstract]
Future minimum lease payments for all capital leases and operating leases
The future minimum lease payments for all capital leases and operating leases at December 25, 2011 were as follows (in millions):
 
Capital
Leases
 
Operating
Leases
 
Total
Remainder of fiscal 2012
$
8

 
$
100

 
$
108

2013
11

 
112

 
123

2014
11

 
92

 
103

2015
11

 
43

 
54

2016
12

 
28

 
40

Thereafter
293

 
164

 
457

Total minimum lease payments
$
346

 
$
539

 
$
885

Deduct: Amounts representing interest
196

 
 
 
 
Present value of minimum lease payments
150

 
 
 
 
Deduct: Current portion of capital lease obligations
1

 
 
 
 
Long-term portion of capital lease obligations
$
149

 
 
 
 
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Segment Information (Tables)
3 Months Ended
Dec. 25, 2011
Notes to Financial Statements [Abstract]
Revenues and EBT for reportable segments
The table below presents revenues and EBT for reportable segments (in millions):
 
QCT
 
QTL
 
QWI
 
QSI*
 
Reconciling
Items*
 
Total*
For the three months ended:
 
 
 
 
 
 
 
 
 
 
 
December 25, 2011
 
 
 
 
 
 
 
 
 
 
 
Revenues
$
3,085

 
$
1,440

 
$
152

 
$

 
$
4

 
$
4,681

EBT
739

 
1,267

 
1

 
(34
)
 
(252
)
 
1,721

December 26, 2010
 
 
 
 
 
 
 
 
 
 
 
Revenues
$
2,116

 
$
1,057

 
$
172

 
$

 
$
3

 
$
3,348

EBT
640

 
892

 

 
(21
)
 
(41
)
 
1,470


*As adjusted for discontinued operations (Note 8)
Reconciling items - revenue
Reconciling items in the previous table were as follows (in millions):
 
Three Months Ended
 
December 25,
2011
 
December 26, 2010*
Revenues
 
 
 
Elimination of intersegment revenues
$
(1
)
 
$
(1
)
Other nonreportable segments
5

 
4

 
$
4

 
$
3

EBT
 
 
 
Unallocated cost of equipment and services revenues
$
(70
)
 
$
(14
)
Unallocated research and development expenses
(162
)
 
(117
)
Unallocated selling, general and administrative expenses
(115
)
 
(85
)
Unallocated investment income, net
190

 
244

Other nonreportable segments
(95
)
 
(69
)
 
$
(252
)
 
$
(41
)

*As adjusted for discontinued operations (Note 8)
Reconciling items - EBT
Reconciling items in the previous table were as follows (in millions):
 
Three Months Ended
 
December 25,
2011
 
December 26, 2010*
Revenues
 
 
 
Elimination of intersegment revenues
$
(1
)
 
$
(1
)
Other nonreportable segments
5

 
4

 
$
4

 
$
3

EBT
 
 
 
Unallocated cost of equipment and services revenues
$
(70
)
 
$
(14
)
Unallocated research and development expenses
(162
)
 
(117
)
Unallocated selling, general and administrative expenses
(115
)
 
(85
)
Unallocated investment income, net
190

 
244

Other nonreportable segments
(95
)
 
(69
)
 
$
(252
)
 
$
(41
)

*As adjusted for discontinued operations (Note 8)
Revenues from external customers and intersegment revenues
Revenues from external customers and intersegment revenues were as follows (in millions):
 
QCT
 
QTL
 
QWI
For the three months ended:
 
 
 
 
 
December 25, 2011
 
 
 
 
 
Revenues from external customers
$
3,084

 
$
1,440

 
$
152

Intersegment revenues
1

 

 

December 26, 2010
 
 
 
 
 
Revenues from external customers
$
2,115

 
$
1,057

 
$
172

Intersegment revenues
1

 

 

Segment assets and reconciling items
Segment assets and reconciling items were as follows (in millions):
 
December 25,
2011
 
September 25,
2011
QCT
$
1,519

 
$
1,569

QTL
70

 
36

QWI
133

 
136

QSI
2,320

 
2,386

Reconciling items
33,564

 
32,295

Total consolidated assets
$
37,606

 
$
36,422

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Discontinued Operations (Tables)
3 Months Ended
Dec. 25, 2011
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block]
Summarized results from discontinued operations were as follows (in millions):
 
Three Months Ended
 
December 25, 2011
 
December 26, 2010
Revenues
$

 
$

Loss from discontinued operations
$
(8
)
 
$
(141
)
Income tax benefit
3

 
59

Discontinued operations, net of income taxes
$
(5
)
 
$
(82
)
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Fair Value Measurements (Tables)
3 Months Ended
Dec. 25, 2011
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 December 25, 2011 (in millions):
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets
 
 
 
 
 
 
 
Cash equivalents
$
1,192

 
$
2,857

 
$

 
$
4,049

Marketable securities
 
 
 
 
 
 
 
U.S. Treasury securities and government-related securities
371

 
792

 

 
1,163

Corporate bonds and notes

 
6,320

 

 
6,320

Mortgage- and asset-backed securities

 
671

 
23

 
694

Auction rate securities

 

 
122

 
122

Non-investment-grade debt securities

 
4,045

 
34

 
4,079

Common and preferred stock
1,212

 
694

 

 
1,906

Equity mutual and exchange-traded funds
922

 

 

 
922

Debt mutual funds
1,327

 
481

 

 
1,808

Total marketable securities
3,832

 
13,003

 
179

 
17,014

Derivative instruments

 
17

 

 
17

Other investments
175

 

 

 
175

Total assets measured at fair value
$
5,199

 
$
15,877

 
$
179

 
$
21,255

Liabilities
 
 
 
 
 
 
 
Derivative instruments
$

 
$
56

 
$

 
$
56

Other liabilities
175

 

 
6

 
181

Total liabilities measured at fair value
$
175

 
$
56

 
$
6

 
$
237

Activity for marketable securities classified within Level 3 of the valuation hierarchy
The following table includes the activity for marketable securities and other liabilities classified within Level 3 of the valuation hierarchy (in millions):
 
Three Months Ended December 25, 2011
 
Auction Rate
Securities
 
Other Marketable
Securities
 
Other Liabilities
Beginning balance of Level 3
$
124

 
$
27

 
$
7

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

 

 
(1
)
Included in other comprehensive income
(1
)
 

 

Purchases

 
35

 

Settlements
(1
)
 
(5
)
 

Ending balance of Level 3
$
122

 
$
57

 
$
6


 
Three Months Ended December 26, 2010
 
Auction Rate
Securities
 
Other Marketable
Securities
Beginning balance of Level 3
$
126

 
$
18

Total realized and unrealized gains or losses:
 
 
 
Included in other comprehensive income
2

 

Settlements
(2
)
 
(1
)
Ending balance of Level 3
$
126

 
$
17

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Marketable Securities (Tables)
3 Months Ended
Dec. 25, 2011
Notes to Financial Statements [Abstract]
Marketable securities
Marketable securities were comprised as follows (in millions):
 
Current
 
Noncurrent
 
December 25,
2011
 
September 25,
2011
 
December 25,
2011
 
September 25,
2011
Trading:
 
 
 
 
 
 
 
U.S. Treasury securities and government-related securities
$
230

 
$

 
$
330

 
$

Corporate bonds and notes
266

 

 
91

 

Mortgage- and asset-backed securities

 

 
35

 

Non-investment-grade debt securities

 

 
54

 

Total trading
496

 

 
510

 

Available-for-sale:
 
 
 
 
 
 
 
U.S. Treasury securities and government-related securities
573

 
516

 
30

 
6

Corporate bonds and notes
3,503

 
3,665

 
2,460

 
2,353

Mortgage- and asset-backed securities
527

 
587

 
132

 
91

Auction rate securities

 

 
122

 
124

Non-investment-grade debt securities
20

 
19

 
4,005

 
3,653

Common and preferred stock
130

 
76

 
1,776

 
1,713

Equity mutual and exchange-traded funds

 

 
922

 
845

Debt mutual funds
1,327

 
1,327

 

 

Total available-for-sale
6,080

 
6,190

 
9,447

 
8,785

Fair value option:
 
 
 
 
 
 
 
Debt mutual fund

 

 
481

 
476

Total marketable securities
$
6,576

 
$
6,190

 
$
10,438

 
$
9,261

Available-for-sale securities
At December 25, 2011, 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
$
799

 
$
4,878

 
$
2,716

 
$
1,034

 
$
3,272

 
$
12,699

Securities with no single maturity date included debt mutual funds, non-investment-grade debt securities, mortgage- and asset-backed securities and auction rate securities.
The Company recorded realized gains and losses on sales of available-for-sale securities as follows (in millions):
 
Gross Realized Gains
 
Gross Realized Losses
 
Net Realized Gains
For the three months ended
 
 
 
 
 
December 25, 2011
$
36

 
$
(2
)
 
$
34

December 26, 2010
128

 
(5
)
 
123

Available-for-sale securities were comprised as follows (in millions):
 
Cost
 
Unrealized Gains
 
Unrealized Losses
 
Fair Value
December 25, 2011
 
 
 
 
 
 
 
Equity securities
$
2,428

 
$
443

 
$
(43
)
 
$
2,828

Debt securities
12,500

 
322

 
(123
)
 
12,699

 
$
14,928

 
$
765

 
$
(166
)
 
$
15,527

September 25, 2011
 
 
 
 
 
 
 
Equity securities
$
2,426

 
$
278

 
$
(70
)
 
$
2,634

Debt securities
12,179

 
294

 
(132
)
 
12,341

 
$
14,605

 
$
572

 
$
(202
)
 
$
14,975

Investments 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):
 
December 25, 2011
 
Less than 12 months
 
More than 12 months
 
Fair Value
 
Unrealized Losses
 
Fair Value
 
Unrealized Losses
U.S. Treasury securities and government-related securities
$
419

 
$
(2
)
 
$
4

 
$

Corporate bonds and notes
1,930

 
(44
)
 
58

 
(5
)
Auction rate securities
3

 

 
119

 
(3
)
Non-investment-grade debt securities
1,396

 
(60
)
 
32

 
(4
)
Common and preferred stock
313

 
(27
)
 
4

 

Equity mutual and exchange-traded funds
153

 
(16
)
 

 

Debt mutual funds
1,320

 
(5
)
 
1

 

 
$
5,534

 
$
(154
)
 
$
218

 
$
(12
)

 
September 25, 2011
 
Less than 12 months
 
More than 12 months
 
Fair Value
 
Unrealized Losses
 
Fair Value
 
Unrealized Losses
Corporate bonds and notes
$
1,862

 
$
(41
)
 
$
41

 
$

Auction rate securities
3

 

 
121

 
(2
)
Non-investment-grade debt securities
1,867

 
(86
)
 
19

 
(3
)
Common and preferred stock
750

 
(70
)
 
4

 

 
$
4,482

 
$
(197
)
 
$
185

 
$
(5
)
Activity for credit loss portion of other-than-temporary impairments on debt securities
The following table shows the activity for the credit loss portion of other-than-temporary impairments on debt securities held by the Company (in millions):
 
Three Months Ended
 
December 25,
2011
 
December 26,
2010
Beginning balance of credit losses
$
46

 
$
109

Reductions in credit losses related to securities the Company intends to sell

 
(11
)
Additional credit losses recognized on securities previously impaired
1

 

Reductions in credit losses related to securities sold
(1
)
 
(7
)
Accretion of credit losses due to an increase in cash flows expected to be collected

 
(2
)
Ending balance of credit losses
$
46

 
$
89

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Basis of Presentation (Details) (USD $)
3 Months Ended 12 Months Ended
Dec. 25, 2011
Dec. 26, 2010
Sep. 30, 2012
Sep. 25, 2011
Notes to Financial Statements [Abstract]
Number of weeks in a fiscal period 13 weeks 13 weeks 52-53 week 52-53 week
Incremental Dilutive Common Share Equivalents [Abstract]
Incremental dilutive common share equivalents (in shares) 37,052,000 25,507,000
Accumulated Other Comprehensive Income (Loss) [Abstract]
Other-than-temporary loss, not credit loss, net of tax, available-for-sale securities $ 12,000,000 $ 13,000,000
Share-Based Compensation [Abstract]
Share-based compensation expense related to share-based award 33,000,000 13,000,000
Incremental tax benefit from stock options exercised 23,000,000 45,000,000
Total unrecognized compensation cost for non-vested stock options 537,000,000
Total unrecognized compensation cost for non-vested employee restricted stock units $ 1,100,000,000
Weighted-average recognition period for non-vested employee stock options (in years) 1.8
Weighted average recognition period for non-vested employee restricted stock units (in years) 2.3
Net share-based awards granted, after forfeitures and cancellations, as a percentage of outstanding shares as of the beginning of each fiscal period 0.50% 0.40%
Total share-based awards granted during the period as a percentage of outstanding shares as of the end of each fiscal period 0.50% 0.50%
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Basis of Presentation Earnings Per Common Share (Details)
3 Months Ended
Dec. 25, 2011
Dec. 26, 2010
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of EPS 4,471,000 60,792,000
Written Put Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of EPS 11,800,000
Other Common Stock Equivalents [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of EPS 675,000 467,000
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Basis of Presentation Comprehensive Income (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Dec. 25, 2011
Dec. 26, 2010
Total Comprehensive Income [Abstract]
Net income $ 1,395 [1] $ 1,170 [2]
Other comprehensive income:
Foreign currency translation (27) 5
Noncredit other-than-temporary impairment losses and subsequent changes in fair value related to certain available-for-sale debt securities, net of income taxes 1 (4)
Net unrealized gains on other available-for-sale securities and derivative instruments, net of income taxes 175 131
Reclassification of net realized gains on available-for-sale securities and derivative instruments included in net income, net of income taxes (18) (76)
Reclassification of other-than-temporary losses on available-for-sale securities included in net income, net of income taxes 9 4
Total other comprehensive income 140 60
Total comprehensive income 1,535 1,230
Comprehensive loss attributable to noncontrolling interests 8 0
Comprehensive income attributable to QUALCOMM $ 1,543 $ 1,230
[1] Loss from discontinued operations, net of income taxes, (Note 8) was attributable to Qualcomm.
[2] As adjusted for discontinued operations (Note 8)
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Basis of Presentation Accumulated Other Comprehensive Income (Details) (USD $)
In Millions, unless otherwise specified
Dec. 25, 2011
Sep. 25, 2011
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Noncredit other-than-temporary impairment losses and subsequent changes in fair value related to certain available-for-sale debt securities, net of income taxes $ 29 $ 27
Net unrealized gains on other available-for-sale securities, net of income taxes 581 427
Net unrealized losses on derivative instruments, net of income taxes (4) (15)
Foreign currency translation (111) (86)
Total accumulated other comprehensive income $ 495 $ 353
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Basis of Presentation Share-Based Compensation Expense (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Dec. 25, 2011
Dec. 26, 2010
Share-based Compensation, Allocation and Classification in Financial Statements [Abstract]
Cost of equipment and services revenues $ 20 $ 14 [1]
Research and development 126 85 [1]
Selling, general and administrative 101 70 [1]
Continuing operations 247 169 [1]
Related income tax benefit (53) (55) [1]
Continuing operations, net of income taxes 194 114 [1]
Discontinued operations 0 3 [1]
Related income tax benefit 0 (1) [1]
Discontinued operations, net of income taxes 0 2 [1]
Share-based compensation expense, net of income taxes $ 194 $ 116 [1]
[1] As adjusted for discontinued operations (Note 8)
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Composition of Certain Financial Statement Items Inventories (Details) (USD $)
In Millions, unless otherwise specified
Dec. 25, 2011
Sep. 25, 2011
Inventory, Net [Abstract]
Raw materials $ 14 $ 15
Work-in-process 235 384
Finished goods 465 366
Inventories $ 714 $ 765
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Composition of Certain Financial Statement Items Other Current Liabilities (Details) (USD $)
In Millions, unless otherwise specified
Dec. 25, 2011
Sep. 25, 2011
Other Liabilities, Current [Abstract]
Customer incentives and other customer-related liabilities $ 1,401 $ 1,180
Current portion of payable to Broadcom (Note 6) 170 170
Payable for unsettled securities trades 75 298
Other 321 406
Other current liabilities $ 1,967 $ 2,054
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Investment Income, Net (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Dec. 25, 2011
Dec. 26, 2010
Components of investment income, net [Abstract]
Interest and dividend income $ 130 $ 131 [1]
Interest expense (27) (24) [1]
Net realized gains on marketable securities 37 127 [1]
Net realized gains on other investments 7 0 [1]
Impairment losses on marketable securities (14) (8) [1]
Impairment losses on other investments (6) (3) [1]
Gains on derivative instruments 45 1 [1]
Equity in losses of investees (2) (1) [1]
Investment income, net $ 170 $ 223 [1]
[1] As adjusted for discontinued operations (Note 8)
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Income Taxes (Details)
12 Months Ended
Sep. 30, 2012
Sep. 25, 2011
Notes to Financial Statements [Abstract]
Annual effective income tax rate (estimated for fiscal 2012) 18.00% 20.00%
Tax benefit related to foreign earnings 17.00%
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Stockholders' Equity (Details) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended
Mar. 25, 2012
Dec. 25, 2011
Dec. 26, 2010
Stock repurchase program [Abstract]
Shares repurchased and retired, shares 2,046,000 0
Shares repurchased and retired, value $ 99 $ 0
Authorized dollar amount remaining available under stock repurchase program, net of put options outstanding 948
Option Indexed to Issuer's Equity, Indexed Shares 11,800,000
Maximum value, net of premiums received, of outstanding options indexed to issuers equity 511
Premiums received from put option derivative instruments 75
Put option contracts derivative liabilities at fair value 35
Gain on put option derivatives recorded in net investment income 45 0
Dividends [Abstract]
Dividends per share announced (in dollars per share) $ 0.215 $ 0.215 $ 0.19 [1]
Dividends charged to retained earnings $ 368 $ 314
Dividends Payable, Date Declared, Day, Month and Year Jan 10, 2012
Dividends Payable, Date to be Paid, Day, Month and Year Mar 23, 2012
Dividends Payable, Date of Record, Day, Month and Year Mar 2, 2012
[1] As adjusted for discontinued operations (Note 8)
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Stockholders' Equity Changes in Stockholders' Equity (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Dec. 25, 2011
Dec. 26, 2010
Balance at beginning period $ 26,972
Net income (loss) 1,395 [1] 1,170 [2]
Other comprehensive income (loss) 140 60
Common stock issued under employee benefit plans and the related tax benefits, net of shares withheld for tax 203
Share-based compensation 251
Dividends (368) (314)
Stock repurchases (99)
Other 3
Balance at ending period 28,497
Qualcomm Stockholders' Equity [Member]
Balance at beginning period 26,951
Net income (loss) 1,401 [1]
Other comprehensive income (loss) 142
Common stock issued under employee benefit plans and the related tax benefits, net of shares withheld for tax 203
Share-based compensation 251
Dividends (368)
Stock repurchases (99)
Other 0
Balance at ending period 28,481
Noncontrolling Interests [Member]
Balance at beginning period 21
Net income (loss) (6) [1]
Other comprehensive income (loss) (2)
Common stock issued under employee benefit plans and the related tax benefits, net of shares withheld for tax 0
Share-based compensation 0
Dividends 0
Stock repurchases 0
Other 3
Balance at ending period $ 16
[1] Loss from discontinued operations, net of income taxes, (Note 8) was attributable to Qualcomm.
[2] As adjusted for discontinued operations (Note 8)
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Commitments and Contingencies (Details) (USD $)
3 Months Ended
Dec. 25, 2011
Sep. 25, 2011
Apr. 26, 2009
Legal Proceedings [Abstract]
Expiration date of subject patents Sep 24, 2010
Payment in noncurrent other assets $ 928,000,000 $ 994,000,000
Noncontrolling Interest, Description two Indian companies each acquired 13% of each subsidiary
Provisional assesment of unpaid dues of subsidiary partner in India 28,000,000
Litigation Settlement Patent License And Other Related Items [Abstract]
Broadcom settlement 891,000,000
Paid portion of Broadcom settlement 632,000,000
Last payment date of the remaining payments of the Broadcom settlement April 2013
Carrying value and fair value (net of imputed interest) of the settlement liability 253,000,000
Loans Payable Related to India BWA Spectrum [Abstract]
Interest rate spread percentage 0.25%
India BWA spectrum loans interest rate percentage 10.25%
India BWA spectrum loan demanded for prepayment payment date Feb 28, 2012
India BWA spectrum loans demanded for prepayment 142,000,000
India BWA spectrum loans not subject to prepayment 786,000,000
India BWA spectrum loans not subject to prepayment payment date December 2012
Carrying value of refinanced loans 928,000,000 994,000,000
Purchase Obligations [Abstract]
Unrecorded noncancelable obligations for remainder of fiscal 2012 2,100,000,000
Unrecorded noncancelable obligations for fiscal 2013 75,000,000
Unrecorded noncancelable obligations for fiscal 2014 39,000,000
Unrecorded noncancelable obligations for fiscal 2015 36,000,000
Unrecorded noncancelable obligations for fiscal 2016 25,000,000
Unrecorded noncancelable obligations thereafter 8,000,000
Inventory purchase commitments for remainder of fiscal 2012 1,700,000,000
Inventory purchase commitments for fiscal 2013 3,000,000
Leases [Abstract]
Low range of noncancelable operating lease terms less than one year
High range of noncancelable operating lease terms 35 years
Low range of initial capital lease terms (in years) 5
High range of initial capital lease terms (in years) 7
Maximum number of capital lease renewal options 5
Total capital lease asset expected to be written off due to restructuring plan at the end of the contractual lease term 130,000,000
Total capital lease obligation expected to be written off due to restructuring plan at the end of the contractual lease term $ 149,000,000
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Commitments and Contingencies Capital and Operating Leases (Details) (USD $)
In Millions, unless otherwise specified
Dec. 25, 2011
Capital Leases, Future Minimum Payments Due [Abstract]
Remainder of fiscal 2012 - Capital leases $ 8
2013 - Capital leases 11
2014 - Capital leases 11
2015 - Capital leases 11
2016 - Capital leases 12
Thereafter - Capital leases 293
Total minimum lease payments - Capital leases 346
Deduct: Amounts representing interest - Capital leases 196
Present value of minimum lease payments - Capital leases 150
Deduct: Current portion of capital lease obligations 1
Long-term portion of capital lease obligations 149
Operating Leases, Future Minimum Payments Due [Abstract]
Remainder of fiscal 2012 - Operating leases 100
2013 - Operating leases 112
2014 - Operating leases 92
2015 - Operating leases 43
2016 - Operating leases 28
Thereafter - Operating leases 164
Total minimum lease payments - Operating leases 539
Total Capital and Operating Leases, Future Minimum Payments Due [Abstract]
Remainder of fiscal 2012 - Total 108
2013 - Total 123
2014 - Total 103
2015 - Total 54
2016 - Total 40
Thereafter - Total 457
Total minimum lease payments - Total $ 885
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Segment Information (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Dec. 25, 2011
Sep. 25, 2011
Notes to Financial Statements [Abstract]
Number of QWI aggregated divisions 4
Number of QSI aggregated divisions 3
Revenues and EBT for reportable segments [Line Items]
Unallocated cost of equipment and services revenue resulting from acquisitions $ 51
Unallocated selling, general and administrative expenses resulting from acquisitions 9
FLO TV assets included in QSI's assets 901 913
QMT assets included in reconciling items $ 1,000 $ 806
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Segment Information Revenues and EBT for Reportable Segments (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Dec. 25, 2011
Dec. 26, 2010
Sep. 25, 2011
Revenues and EBT for reportable segments [Line Items]
Revenues $ 4,681 $ 3,348 [1]
EBT 1,721 1,470 [1]
Segment Reporting Information, Operating Income (Loss) [Abstract]
Assets 37,606 36,422
QCT
Revenues and EBT for reportable segments [Line Items]
Revenues 3,085 2,116
EBT 739 640
Segment Reporting Information, Operating Income (Loss) [Abstract]
Revenue from external customers 3,084 2,115
Intersegment revenues 1 1
Assets 1,519 1,569
QTL
Revenues and EBT for reportable segments [Line Items]
Revenues 1,440 1,057
EBT 1,267 892
Segment Reporting Information, Operating Income (Loss) [Abstract]
Revenue from external customers 1,440 1,057
Intersegment revenues 0 0
Assets 70 36
QWI
Revenues and EBT for reportable segments [Line Items]
Revenues 152 172
EBT 1 0
Segment Reporting Information, Operating Income (Loss) [Abstract]
Revenue from external customers 152 172
Intersegment revenues 0 0
Assets 133 136
QSI
Revenues and EBT for reportable segments [Line Items]
Revenues 0 0 [1]
EBT (34) (21) [1]
Segment Reporting Information, Operating Income (Loss) [Abstract]
Assets 2,320 2,386
Reconciling Items [Member]
Revenues and EBT for reportable segments [Line Items]
Revenues 4 3 [1]
EBT (252) (41) [1]
Segment Reporting Information, Operating Income (Loss) [Abstract]
Assets 33,564 32,295
Elimination of intersegment revenues [Member]
Revenues and EBT for reportable segments [Line Items]
Revenues (1) (1) [1]
Non-reportable segment [Member]
Revenues and EBT for reportable segments [Line Items]
Revenues 5 4 [1]
Unallocated cost of equipment and services revenues [Member]
Revenues and EBT for reportable segments [Line Items]
EBT (70) (14) [1]
Unallocated research and development expenses [Member]
Revenues and EBT for reportable segments [Line Items]
EBT (162) (117) [1]
Unallocated selling, general and administrative expenses [Member]
Revenues and EBT for reportable segments [Line Items]
EBT (115) (85) [1]
Unallocated investment income, net [Member]
Revenues and EBT for reportable segments [Line Items]
EBT 190 244 [1]
Other nonreportable segments [Member]
Revenues and EBT for reportable segments [Line Items]
EBT $ (95) $ (69) [1]
[1] As adjusted for discontinued operations (Note 8)
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Discontinued Operations (Details) (USD $)
3 Months Ended
Mar. 25, 2012
Dec. 25, 2011
Dec. 26, 2010
Dec. 27, 2011
Sep. 25, 2011
Notes to Financial Statements [Abstract]
Date of completed sale of spectrum licenses 12/27/2011
Proceeds from sale of spectrum licenses $ 1,900,000,000
Gain in discontinued operations from sale of spectrum licenses 1,200,000,000
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract]
Revenues 0 0
Income (loss) from discontinued operations (8,000,000) (141,000,000)
Income tax benefit 3,000,000 59,000,000
Discontinued operations, net of income taxes (5,000,000) (82,000,000) [1]
Disposal Group, Including Discontinued Operation, Classified Balance Sheet Disclosures [Abstract]
Total carrying amount of assets of discontinued operations 901,000,000
Total carrying amount of liabilities of discontinued operations 225,000,000
Spectrum held for sale 746,000,000 746,000,000
Capital lease assets 130,000,000
Capital lease liabilities $ 149,000,000
[1] As adjusted for discontinued operations (Note 8)
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Discontinued Operations by Type (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Dec. 25, 2011
Restructuring and Related Cost [Line Items]
Maximum estimated future restructuring charges $ 20
Payments on amounts previously accrued 3
Minimum expected future cash expenditures 70
Maximum expected future cash expenditures 110
Contract termination costs [Member]
Restructuring and Related Cost [Line Items]
Restructuring accrual 37
Other costs [Member]
Restructuring and Related Cost [Line Items]
Restructuring accrual $ 3
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Acquisitions (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Dec. 25, 2011
Business Acquisition, Purchase Price Allocation [Abstract]
Number of businesses acquired 5
Cash consideration paid for businesses acquired $ 288
Acquired technology-based intangible assets 32
Acquired in-process research and development (IPR&D) 46
Number of in-process research and development projects 2
Acquired in-process research and development estimated completion period 2
Goodwill recognized from businesses acquired, expected to be deductible for tax purposes 61
Technology-based [Member]
Business Acquisition, Purchase Price Allocation [Abstract]
Weighted-average useful life of intangible assets acquired (in years) 6
IPR&D [Member]
Business Acquisition, Purchase Price Allocation [Abstract]
Weighted-average useful life of intangible assets acquired (in years) 9
QCT [Member]
Acquisitions [Abstract]
Goodwill 39
QTL [Member]
Acquisitions [Abstract]
Goodwill 22
Non-reportable segment [Member]
Acquisitions [Abstract]
Goodwill $ 135
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Fair Value Measurements Fair Value Hierarchy (Details) (USD $)
In Millions, unless otherwise specified
Dec. 25, 2011
Assets [Abstract]
Cash equivalents $ 4,049
Marketable Securities [Abstract]
U.S. Treasury securities and government-related securities 1,163
Corporate bonds and notes 6,320
Mortgage- and asset-backed securities 694
Auction rate securities 122
Non-investment-grade debt securities 4,079
Common and preferred stock 1,906
Equity mutual and exchange-traded funds 922
Debt mutual funds 1,808
Total marketable securities 17,014
Derivative instruments 17
Other investments 175
Total assets measured at fair value 21,255
Liabilities [Abstract]
Derivative instruments 56
Other liabilities 181
Total liabilities measured at fair value 237
Level 1 [Member]
Assets [Abstract]
Cash equivalents 1,192
Marketable Securities [Abstract]
U.S. Treasury securities and government-related securities 371
Corporate bonds and notes 0
Mortgage- and asset-backed securities 0
Auction rate securities 0
Non-investment-grade debt securities 0
Common and preferred stock 1,212
Equity mutual and exchange-traded funds 922
Debt mutual funds 1,327
Total marketable securities 3,832
Derivative instruments 0
Other investments 175
Total assets measured at fair value 5,199
Liabilities [Abstract]
Derivative instruments 0
Other liabilities 175
Total liabilities measured at fair value 175
Level 2 [Member]
Assets [Abstract]
Cash equivalents 2,857
Marketable Securities [Abstract]
U.S. Treasury securities and government-related securities 792
Corporate bonds and notes 6,320
Mortgage- and asset-backed securities 671
Auction rate securities 0
Non-investment-grade debt securities 4,045
Common and preferred stock 694
Equity mutual and exchange-traded funds 0
Debt mutual funds 481
Total marketable securities 13,003
Derivative instruments 17
Other investments 0
Total assets measured at fair value 15,877
Liabilities [Abstract]
Derivative instruments 56
Other liabilities 0
Total liabilities measured at fair value 56
Level 3 [Member]
Assets [Abstract]
Cash equivalents 0
Marketable Securities [Abstract]
U.S. Treasury securities and government-related securities 0
Corporate bonds and notes 0
Mortgage- and asset-backed securities 23
Auction rate securities 122
Non-investment-grade debt securities 34
Common and preferred stock 0
Equity mutual and exchange-traded funds 0
Debt mutual funds 0
Total marketable securities 179
Derivative instruments 0
Other investments 0
Total assets measured at fair value 179
Liabilities [Abstract]
Derivative instruments 0
Other liabilities 6
Total liabilities measured at fair value $ 6
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Fair Value Measurements Activity Between Levels of the Fair Value Hierarchy (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Dec. 25, 2011
Dec. 26, 2010
Other Liabilities [Member]
Activity for Marketable Securities Classified Within Level 3 of the Valuation Hierarchy [Roll Forward]
Beginning balance of Level 3 $ 7
Total realized and unrealized gains or losses [Abstract]
Included in investment income, net (1)
Included in other comprehensive income 0
Purchases 0
Settlements 0
Ending balance of Level 3 6
Auction Rate Securities [Member]
Activity for Marketable Securities Classified Within Level 3 of the Valuation Hierarchy [Roll Forward]
Beginning balance of Level 3 124 126
Total realized and unrealized gains or losses [Abstract]
Included in investment income, net 0
Included in other comprehensive income (1) 2
Purchases 0
Settlements (1) (2)
Ending balance of Level 3 122 126
Other Marketable Securities [Member]
Activity for Marketable Securities Classified Within Level 3 of the Valuation Hierarchy [Roll Forward]
Beginning balance of Level 3 27 18
Total realized and unrealized gains or losses [Abstract]
Included in investment income, net 0
Included in other comprehensive income 0 0
Purchases 35
Settlements (5) (1)
Ending balance of Level 3 $ 57 $ 17
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Marketable Securities (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Dec. 25, 2011
Dec. 26, 2010
Marketable Securities [Abstract]
Effective ownership interest in debt mutual fund (fair value option) 21.00%
Changes in fair value of debt mutual fund (fair value option) $ 5 $ 5
Trading securities, unrealized holding loss $ 2
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Marketable Securities Marketable Securities Table (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Dec. 25, 2011
Dec. 26, 2010
Sep. 25, 2011
Trading Securities [Abstract]
Trading Securities - Current $ 496 $ 0
Trading Securities - Noncurrent 510 0
Available-for-sale Securities [Abstract]
Available-for-sale - Current 6,080 6,190
Available-for-sale - Noncurrent 9,447 8,785
Fair Value Option [Abstract]
Debt mutual fund - Current 0 0
Debt mutual fund - Noncurrent 481 476
Marketable Securities - Current 6,576 6,190
Marketable Securities - Noncurrent 10,438 9,261
Contractual maturities of available-for-sale debt securities [Abstract]
Years to Maturity - Less Than One Year 799
Years to Maturity - One to Five Years 4,878
Years to Maturity - Five to Ten Years 2,716
Years to Maturity - Greater Than Ten Years 1,034
Years to Maturity - No Single Maturity Date 3,272
Total 12,699
Realized Gains and Losses on Sales of Available-for-sale Securities [Abstract]
Gross Realized Gains 36 128
Gross Realized Losses (2) (5)
Net Realized Gains 34 123
Available-for-sale Securities [Abstract]
Cost 14,928 14,605
Unrealized Gains 765 572
Unrealized Losses (166) (202)
Fair Value 15,527 14,975
Investments Classified as Available-for-sale in a Continuous Unrealized Loss Position Deemed to be Temporary [Abstract]
Less than 12 months - Fair Value 5,534 4,482
Less than 12 months - Unrealized Losses (154) (197)
More than 12 months - Fair Value 218 185
More than 12 months - Unrealized Losses (12) (5)
Activity for Credit Loss Portion of Other-than-temporary Impairments on Debt Securities [Roll Forward]
Beginning balance of credit losses 46 109
Reductions in credit losses related to securities the Company intends to sell 0 (11)
Additional credit losses recognized on securities previously impaired 1 0
Reductions in credit losses related to securities sold (1) (7)
Accretion of credit losses due to an increase in cash flows expected to be collected 0 (2)
Ending balance of credit losses 46 89
U.S. Treasury securities and government-related securities [Member]
Trading Securities [Abstract]
Trading Securities - Current 230 0
Trading Securities - Noncurrent 330 0
Available-for-sale Securities [Abstract]
Available-for-sale - Current 573 516
Available-for-sale - Noncurrent 30 6
Investments Classified as Available-for-sale in a Continuous Unrealized Loss Position Deemed to be Temporary [Abstract]
Less than 12 months - Fair Value 419
Less than 12 months - Unrealized Losses (2)
More than 12 months - Fair Value 4
More than 12 months - Unrealized Losses 0
Corporate bonds and notes [Member]
Trading Securities [Abstract]
Trading Securities - Current 266 0
Trading Securities - Noncurrent 91 0
Available-for-sale Securities [Abstract]
Available-for-sale - Current 3,503 3,665
Available-for-sale - Noncurrent 2,460 2,353
Investments Classified as Available-for-sale in a Continuous Unrealized Loss Position Deemed to be Temporary [Abstract]
Less than 12 months - Fair Value 1,930 1,862
Less than 12 months - Unrealized Losses (44) (41)
More than 12 months - Fair Value 58 41
More than 12 months - Unrealized Losses (5) 0
Mortgage- and asset-backed securities [Member]
Trading Securities [Abstract]
Trading Securities - Current 0 0
Trading Securities - Noncurrent 35 0
Available-for-sale Securities [Abstract]
Available-for-sale - Current 527 587
Available-for-sale - Noncurrent 132 91
Auction rate securities [Member]
Available-for-sale Securities [Abstract]
Available-for-sale - Current 0 0
Available-for-sale - Noncurrent 122 124
Investments Classified as Available-for-sale in a Continuous Unrealized Loss Position Deemed to be Temporary [Abstract]
Less than 12 months - Fair Value 3 3
Less than 12 months - Unrealized Losses 0 0
More than 12 months - Fair Value 119 121
More than 12 months - Unrealized Losses (3) (2)
Non-investment-grade debt securities [Member]
Trading Securities [Abstract]
Trading Securities - Current 0 0
Trading Securities - Noncurrent 54 0
Available-for-sale Securities [Abstract]
Available-for-sale - Current 20 19
Available-for-sale - Noncurrent 4,005 3,653
Investments Classified as Available-for-sale in a Continuous Unrealized Loss Position Deemed to be Temporary [Abstract]
Less than 12 months - Fair Value 1,396 1,867
Less than 12 months - Unrealized Losses (60) (86)
More than 12 months - Fair Value 32 19
More than 12 months - Unrealized Losses (4) (3)
Common and preferred stock [Member]
Available-for-sale Securities [Abstract]
Available-for-sale - Current 130 76
Available-for-sale - Noncurrent 1,776 1,713
Investments Classified as Available-for-sale in a Continuous Unrealized Loss Position Deemed to be Temporary [Abstract]
Less than 12 months - Fair Value 313 750
Less than 12 months - Unrealized Losses (27) (70)
More than 12 months - Fair Value 4 4
More than 12 months - Unrealized Losses 0 0
Equity mutual funds and exchange-traded funds [Member]
Available-for-sale Securities [Abstract]
Available-for-sale - Current 0 0
Available-for-sale - Noncurrent 922 845
Investments Classified as Available-for-sale in a Continuous Unrealized Loss Position Deemed to be Temporary [Abstract]
Less than 12 months - Fair Value 153
Less than 12 months - Unrealized Losses (16)
More than 12 months - Fair Value 0
More than 12 months - Unrealized Losses 0
Debt mutual funds [Member]
Available-for-sale Securities [Abstract]
Available-for-sale - Current 1,327 1,327
Available-for-sale - Noncurrent 0 0
Investments Classified as Available-for-sale in a Continuous Unrealized Loss Position Deemed to be Temporary [Abstract]
Less than 12 months - Fair Value 1,320
Less than 12 months - Unrealized Losses (5)
More than 12 months - Fair Value 1
More than 12 months - Unrealized Losses 0
Equity securities [Member]
Available-for-sale Securities [Abstract]
Cost 2,428 2,426
Unrealized Gains 443 278
Unrealized Losses (43) (70)
Fair Value 2,828 2,634
Debt securities [Member]
Available-for-sale Securities [Abstract]
Cost 12,500 12,179
Unrealized Gains 322 294
Unrealized Losses (123) (132)
Fair Value $ 12,699 $ 12,341
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