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76 qualcomm 2006
Notes to Consolidated Financial Statements continued
During scal 2006, share-based compensation expense included in
unallocated research and development expenses and unallocated
selling, general and administrative expenses totaled $216 million
and $238 million, respectively. Unallocated cost of equipment and
services revenues was comprised entirely of share-based compen-
sation expense.
Segment data includes intersegment revenues. Generally, revenues
between segments are based on prevailing market rates for substan-
tially similar products and services or an approximation thereof.
Specied items included in segment EBT were as follows (in millions):
QCT QTL QWI QSI
Fiscal 2006
Revenues from
external customers $4,314 $2,465 $662 $ —
Intersegment revenues 18 166 8 —
Interest income 1 5 3 6
Interest expense 1 — 1 2
Fiscal 2005
Revenues from
external customers $3,281 $1,710 $634 $ —
Intersegment revenues 9 129 10 —
Interest income — 5 2 4
Interest expense — 1 1 —
Fiscal 2004
Revenues from
external customers $3,107 $1,200 $553 $ —
Intersegment revenues 4 131 18 —
Interest income — 3 1 14
Effectively all equity in losses of investees (Note 5) was recorded
in QSI in scal 2006, 2005 and 2004.
The Company distinguishes revenues from external customers by
geographic areas based on customer location. Sales information
by geographic area was as follows (in millions):
Year Ended
Sept. 24, Sept. 25, Sept. 26,
2006 2005 2004
United States $ 984 $1,015 $1,016
South Korea 2,398 2,083 2,091
Japan 1,573 1,210 877
China 1,266 596 366
Other foreign 1,305 769 530
$7,526 $5,673 $4,880
Segment assets are comprised of accounts receivable and inven-
tories for QCT, QTL and QWI. The QSI segment assets include
certain marketable securities, notes receivable, wireless licenses,
other investments and all assets of QSI’s consolidated subsidiary,
MediaFLO USA, including property, plant and equipment. QSI’s
assets related to the MediaFLO USA business totaled $329 million
and $98 million at September 24, 2006 and September 25, 2005,
respectively. QSI’s assets also included $19 million, $61 million
and $106 million related to investments in equity method investees
at September 24, 2006, September 25, 2005 and September 26,
2004, respectively. Total segment assets differ from total assets
on a consolidated basis as a result of unallocated corporate assets
primarily comprised of cash, cash equivalents, certain marketable
securities, property, plant and equipment, deferred tax assets,
goodwill, certain other intangible assets of nonreportable seg-
ments and capitalized share-based compensation. The net book
value of long-lived assets located outside of the United States
was $69 million, $44 million and $21 million at September 24,
2006, September 25, 2005 and September 26, 2004, respectively.
The net book value of long-lived assets located in the United
States was $1.4 billion, $978 million and $654 million at September
24, 2006, September 25, 2005 and September 26, 2004, respec-
tively. Reconciling items included $228 million and $188 million
at September 24, 2006 and September 25, 2005, respectively,
of goodwill and other assets related to the QUALCOMM MEMS
Technologies division (QMT), a nonreportable segment developing
display technology for mobile devices and other applications.
Revenues from each of the Company’s divisions aggregated into
the QWI reportable segment were as follows (in millions):
Fiscal Year QWBS QGOV QIS
2006 $429 $47 $194
2005 441 50 153
2004 414 41 116
Other reconciling items were comprised as follows (in millions):
Year Ended
Sept. 24, Sept. 25, Sept. 26,
2006 2005 2004
Revenues:
Elimination of intersegment
revenue $(222) $(148) $(153)
Other nonreportable segments 115 48 20
Reconciling items $(107) $(100) $(133)
Earnings (loss) before income taxes:
Unallocated research and
development expenses $(305) $ (45) $ (23)
Unallocated selling, general,
and administrative expenses (290) (17) (41)
Unallocated cost of equipment
and services revenues (41) — —
Unallocated investment
income, net 455 339 192
Other nonreportable segments (98) (45) (39)
Intracompany eliminations (43) (5) (7)
Reconciling items $(322) $227 $ 82