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NOTE 14. SUMMARIZED QUARTERLY DATA (UNAUDITED)
The following fi nancial information refl ects all normal recurring adjustments that are, in the opinion of management, necessary for a fair statement
of the results of the interim periods.
The table below presents quarterly data for the years ended September 25, 2005 and September 26, 2004 (in millions, except per share data):
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr(3)
2005
Revenues(1) $1,390 $1,365 $1,358 $1,560
Operating income(1) 584 572 560 670
Net income(1) 513 532 560 538
Basic earnings per common share(2) $ 0.31 $ 0.32 $ 0.34 $ 0.33
Diluted earnings per common share(2) $ 0.30 $ 0.31 $ 0.33 $ 0.32
2004
Revenues(1) $1,207 $1,216 $1,341 $1,118
Operating income(1) 568 577 622 362
Income from continuing operations(1) 411 441 486 387
Net income(1) 352 488 486 393
Basic earnings per common share from continuing operations(2) $ 0.26 $ 0.27 $ 0.30 $ 0.24
Basic earnings per common share(2) $ 0.22 $ 0.30 $ 0.30 $ 0.24
Diluted earnings per common share from continuing operations(2) $ 0.25 $ 0.26 $ 0.29 $ 0.23
Diluted earnings per common share(2) $ 0.21 $ 0.29 $ 0.29 $ 0.23
(1) Revenues, operating income, income from continuing operations and net income are rounded to millions each quarter. Therefore, the sum of the quarterly amounts
may not equal the annual amounts reported.
(2) Earnings per share are computed independently for each quarter and the full year based upon respective average shares outstanding. Therefore, the sum of the
quarterly earnings per share amounts may not equal the annual amounts reported.
(3) Prior to the fourth quarter of fi scal 2004, the Company recorded royalty revenues from certain licensees based on estimates of royalties during the period they
were earned. Starting in the fourth quarter of fi scal 2004, the Company began recognizing royalty revenues solely based on royalties reported by licensees during
the quarter (Note 1). The change in the timing of recognizing royalty revenue was made prospectively and had the initial one-time effect of reducing royalty revenues
recorded in the fourth quarter of fi scal 2004.
(1) During fi scal 2004, the Company sold its consolidated subsidiaries, the Vésper
Operating Companies and TowerCo, and returned personal mobile service (SMP)
licenses to Anatel, the telecommunications regulatory agency in Brazil. The
results of operations including gains and losses realized on the sales transac-
tions and the SMP licenses, are presented as discontinued operations. As such,
Revenue, Gross Margin and Free Cash Flow results presented do not include
the results from these discontinued operations.
(2) The Company effected a two-for-one stock split in August 2004. All references
to share amounts have been restated to refl ect the stock split.
(3) See “Note Regarding Use of Non-GAAP Financial Measures” on page 75 and
“Reconciliation of Non-GAAP Financial Measures” on page 76.
Financial Highlights Notes continued from inside cover gatefold
(4) Free Cash Flow is calculated as cash fl ow from operations less capital expen-
ditures, both of which are presented in the GAAP statement of cash fl ows.
(5) In the fourth quarter of fi scal 2004, the Company adopted a new method of
recording royalties, based solely on reports received from licensees for royalty
bearing sales of equipment in the prior quarter. Under the prior method of
recording royalties, the Company recorded an estimate of earned royalties for
certain licensees in the quarter preceding its receipt of licensee reports. This
change was made on a prospective basis in the fourth quarter of fi scal 2004
and as a result, GAAP results for fi scal 2004 refl ect only partial economic
performance of the Company’s licensing business as royalty revenue that
would have been recognized in the fourth quarter of fi scal 2004 was
recognized in the fi rst quarter of fi scal 2005.
Safe Harbor Statement
In addition to the historical information contained herein, this annual
report contains forward-looking statements that are subject to risks
and uncertainties. Actual results may differ substantially from those
referred to herein due to a number of factors, including but not lim-
ited to risks associated with: the rate of development, deployment
and commercial acceptance of CDMA-based networks and CDMA-
based technology, including CDMA2000 1X and WCDMA (UMTS),
both domestically and internationally; growth of the wireless industry;
our dependence on major customers and licensees, fl uctuations in
the demand for CDMA-based products, services or applications;
foreign currency fl uctuations; strategic loans, investments and
transactions the Company has or may pursue; dependence on third-
party manufacturers and suppliers; our ability to maintain and
improve operational effi ciencies and profi tability; the Flarion acqui-
sition; the development of FLO technology, the MDS and related
equipment; the ability of MediaFLO USA to establish the necessary
partnerships and deliver in a timely manner the intended services;
developments in current and future litigation as well as other risks
detailed from time-to-time in the Company’s SEC reports.
Notes to Consolidated Financial Statements continued