Qualcomm 1999 Annual Report Download - page 64

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QUALCOMM Incorporated
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Sales information by geographic area for the years ended
September 30 is as follows (in thousands):
1999 1998 1997
United States $ 2,459,838 $ 2,213,738 $ 1,469,051
South Korea 881,494 633,142 451,989
Other Foreign 595,967 500,990 175,325
$ 3,937,299 $ 3,347,870 $ 2,096,365
The Company distinguishes revenues from external customers by
geographic areas based on customer location.
The net book value of long-lived assets located outside of the United
States was $16 million, $15 million and $1 million at September 30, 1999,
1998 and 1997, respectively.
SUBSEQUENT EVENTS
In October 1999, 1,803,792 Trust Convertible Preferred Securities
were converted into 2,482,739 shares of common stock. The conversion
resulted in an approximate $90 million reduction in the recorded oblig-
ation to Trust Convertible Preferred Securities holders.
On November 2, 1999, the Company’s Board of Directors approved,
subject to stockholders’ approval, a four-for-one stock split of the
Company’s common stock and an increase in the number of authorized
shares of common stock to three billion shares. The Board of Directors
also authorized a special meeting of stockholders for the purposes of
approving the stock split and the proposed share increase. The special
stockholders meeting is expected to be held on or about December 20,
1999. If the stockholders approve the stock split and the proposed
increase in the authorized number of shares, the stock split will be
implemented as soon as practicable following the special meeting.
Common stock shares outstanding (in thousands), giving retroactive
effect to the stock split, at September 30, 1999 and 1998 are 646,363 and
564,726, respectively (unaudited). Pro forma earnings per common
share, giving retroactive effect to the stock split, are as follows (shares
in thousands):
Years Ended September 30,
1999 1998 1997
(unaudited)
Net earnings per common share:
Basic $ 0.34 $ 0.20 $ 0.17
Diluted $ 0.31 $ 0.18 $ 0.16
Shares used in per share calculations:
Basic 594,714 553,623 538,681
Diluted 649,889 591,697 575,097
On November 10, 1999, QUALCOMM entered into an agreement with
Korea Telecom Freetel (“KT Freetel”) pursuant to which QUALCOMM
agreed to invest approximately $200 million in KT Freetel to purchase
1.95% of KT Freetel’s common stock and zero coupon bonds of KT
Freetel with warrants to purchase additional common shares. KT
Freetel has agreed to commercially deploy high data rate (“HDR”) tech-
nology, subject to the successful completion of technical and
marketing trials. If KT Freetel meets certain obligations related to HDR
technology, QUALCOMM is required to purchase the shares underlying
the warrants, for which the bond could be used as payment in full.
SUMMARIZED QUARTERLY DATA (UNAUDITED)
The following financial information reflects all normal recurring
adjustments which are, in the opinion of management, necessary for a
fair statement of the results of the interim periods. Summarized quar-
terly data for fiscal 1999 and 1998 is as follows (in thousands, except
per share data):
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
1999
Revenues $ 941,223 $ 932,395 $ 1,004,066 $ 1,059,615
Gross profit(1) 298,833 308,620 406,399 438,375
Operating income 77,948 5,189 98,379 223,624
Net income (loss) 48,530 (42,620) 58,948 136,021
Basic net earnings (loss)
per common share(2) $ 0.34 $ (0.29) $ 0.39 $ 0.86
Diluted net earnings (loss)
per common share(2) $ 0.33 $ (0.29) $ 0.35 $ 0.73
1998
Revenues $ 785,854 $ 760,553 $ 875,497 $ 925,966
Gross profit(1) 232,239 226,221 250,817 305,194
Operating income 52,895 51,301 53,353 85,116
Net income 36,762 26,011 5,843 39,916
Basic net earnings
per common share(2) $ 0.27 $ 0.19 $ 0.04 $ 0.28
Diluted net earnings
per common share(2) $ 0.25 $ 0.18 $ 0.04 $ 0.27
(1) Gross profit is calculated by subtracting cost of revenues from total revenues.
(2) Earnings per share are computed independently for each of the quarters presented.
Therefore, the sum of the quarterly net earnings per share will not necessarily equal
the total for the year.
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