Qualcomm 2004 Annual Report Download - page 9

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฀฀฀฀฀฀฀QUALCOMM฀฀05
4฀฀In฀the฀fourth฀quarter฀of฀fiscal฀2004,฀the฀Company฀ceased฀accruing฀estimated฀earned฀royalties฀before฀the฀actual฀amounts฀are฀reported฀by฀the฀Company’s฀licensees.฀For฀financial฀reporting฀
purposes,฀the฀change฀resulting฀from฀the฀new฀royalty฀estimation฀method฀is฀made฀prospectively฀and฀has฀the฀one฀time฀effect฀of฀reducing฀royalty฀revenue฀in฀the฀fourth฀quarter฀of฀fiscal฀2004.฀
Therefore,฀GAAP฀results฀for฀the฀fourth฀quarter฀of฀fiscal฀2004฀do฀not฀reflect฀a฀full฀year฀of฀economic฀performance฀of฀the฀Company’s฀licensing฀business,฀as฀royalty฀revenue฀that฀would฀have฀been฀
recognized฀in฀the฀fourth฀quarter฀of฀fiscal฀2004฀is฀expected฀to฀be฀recognized฀in฀the฀first฀quarter฀of฀fiscal฀2005฀when฀the฀actual฀royalty฀reports฀are฀received฀from฀the฀licensees.฀Further฀details฀
regarding฀the฀change฀from฀the฀“Prior฀Method”฀to฀the฀“New฀Method”฀of฀estimating฀royalties฀can฀be฀found฀in฀the฀Financials฀section฀of฀this฀Annual฀Report,฀beginning฀on฀page฀32.฀A฀full฀com-
parison฀of฀the฀“Prior฀Method”฀and฀the฀“New฀Method”฀of฀estimating฀royalties฀for฀fiscal฀years฀2001฀through฀2004฀is฀presented฀on฀our฀website฀at฀http://www.qualcomm.com/ir/earnings.html.฀฀
5฀See฀“Note฀Regarding฀Use฀of฀Non-GAAP฀Financial฀Measures”฀and฀reconciliations฀on฀page฀33.
Anthony฀S.฀Thornley฀
President฀and฀COO
฀
Dr.฀Irwin฀Mark฀Jacobs฀
Chairman฀and฀CEO
efficiencies฀are฀provided฀through฀the฀MediaFLO™฀media฀
distribution฀system,฀for฀intelligent฀scheduling฀of฀content฀
delivery,฀and฀digital฀rights฀and฀billing฀management.฀฀
The฀Company฀also฀announced฀it฀is฀forming฀a฀network฀
operator฀subsidiary,฀MediaFLO฀USA฀Inc.,฀to฀deploy฀a฀
FLO฀technology-based฀multimedia฀multicasting฀or฀
“mediacasting”฀network฀in฀700฀MHz฀spectrum฀in฀the฀
United฀States.฀MediaFLO฀USA฀will฀operate฀the฀network฀฀
in฀cooperation฀with฀United฀States฀cellular฀network฀
operators,฀enabling฀these฀companies฀to฀offer฀ever฀more฀
compelling฀wireless฀multimedia฀services฀to฀their฀฀
subscribers.฀Together,฀the฀CDMA2000฀1xEV-DO฀and฀
MediaFLO฀mediacasting฀innovations฀enable฀the฀deploy-
ment฀of฀end-to-end฀systems฀that฀will฀drive฀the฀continuing฀
growth฀of฀wireless฀multimedia฀services,฀while฀supporting฀
3G฀operators฀and฀content฀providers฀worldwide.฀
SHARING฀THE฀REWARDS
The฀continuing฀growth฀in฀worldwide฀adoption฀of฀CDMA฀
technology฀has฀significantly฀increased฀the฀cash฀flow฀
and฀earnings฀of฀QUALCOMM,฀and฀we฀are฀pleased฀to฀
share฀this฀success฀with฀our฀stockholders.฀On฀July฀13,฀
the฀Board฀of฀Directors฀declared฀a฀2-for-1฀stock฀split฀in฀
the฀form฀of฀a฀stock฀dividend.฀The฀Board฀also฀authorized฀
a฀40฀percent฀increase฀of฀quarterly฀dividends฀from฀10฀
to฀14฀cents฀per฀quarter฀(pre-split).฀The฀July฀increase฀
marked฀the฀third฀dividend฀increase฀in฀two฀years.฀
QUALCOMM’s฀total฀cash฀and฀marketable฀securities฀
balance฀at฀fiscal฀year฀end฀has฀grown฀to฀approximately฀
$7.6฀billion.฀
As฀planned,฀our฀QUALCOMM฀Strategic฀Initiatives฀(QSI)฀
business฀continues฀to฀evolve฀with฀an฀increasing฀focus฀
on฀investing฀in฀complementary฀technologies.฀Fiscal฀
year฀2004฀revenues฀increased฀by฀27฀percent฀year-over-
year.4฀Fiscal฀2004฀diluted฀earnings฀per฀share฀are฀$1.03,฀
compared฀to฀$0.51฀in฀fiscal฀2003.฀Fiscal฀2004฀diluted฀
pro฀forma฀earnings฀per฀share฀excluding฀$0.02฀earnings฀
per฀share฀attributed฀to฀the฀QSI฀segment฀are฀$1.00.5
Clearly,฀we฀have฀the฀financial฀strength฀and฀other฀
resources฀needed฀to฀continue฀supporting฀customers฀
worldwide฀with฀a฀broad฀range฀of฀new฀technology,฀฀
chipsets,฀software฀and฀services.฀We฀remain฀focused฀฀
on฀enhancing฀the฀wireless฀user฀experience—both฀
consumer฀and฀enterprise—to฀further฀accelerate฀the฀
growth฀of฀products฀and฀services฀using฀CDMA฀tech-
nology.฀On฀behalf฀of฀the฀more฀than฀8,000฀worldwide฀
employees฀of฀QUALCOMM฀who฀are฀working฀to฀achieve฀
that฀goal,฀we฀thank฀you฀for฀your฀continued฀support.฀
Letter฀to฀Stockholders
Anthony฀S.฀Thornley฀(left)฀฀
Dr.฀Irwin฀Mark฀Jacobs฀(right)฀
฀