|
RECONCILIATION OF PRO FORMA AND GAAP NET INCOME AND DILUTED EARNINGS (LOSS) PER SHARE
| (in millions, except per share data) |
2005 |
|
2004 |
|
2003 |
|
2002 |
|
2001 |
|
| |
| Total GAAP net income(a) |
$ |
2,143 |
|
$ |
1,720 |
|
$ |
827 |
|
$ |
360 |
|
$ |
(578 |
) |
| Less: QSI net income (loss) |
|
102 |
|
|
12 |
|
|
(334 |
) |
|
(180 |
) |
|
(931 |
) |
| Less: Other pro forma adjustments, net of tax(b) |
|
71 |
|
|
(92 |
) |
|
1 |
|
|
(237 |
) |
|
(344 |
) |
| |
| Pro forma net income |
$ |
1,970 |
|
$ |
1,800 |
|
$ |
1,160 |
|
$ |
777 |
|
$ |
697 |
|
| |
| Total GAAP diluted earnings per share(a) |
$ |
1.26 |
|
$ |
1.03 |
|
$ |
0.51 |
|
$ |
0.22 |
|
$ |
(0.38 |
) |
| Less: QSI diluted earnings per share |
|
0.06 |
|
|
0.01 |
|
|
(0.20 |
) |
|
(0.11 |
) |
|
(0.62 |
) |
| Less: Other pro forma adjustments, net of tax(b) |
|
0.04 |
|
|
(0.06 |
) |
|
— |
|
|
(0.15 |
) |
|
(0.23 |
) |
| |
| Pro forma diluted earnings per share(d) |
$ |
1.16 |
|
$ |
1.07 |
|
$ |
0.71 |
|
$ |
0.48 |
|
$ |
0.43 |
|
| |
| Shares used in per share calculations:(c) |
| GAAP diluted shares |
|
1,694 |
|
|
1,675 |
|
|
1,636 |
|
|
1,619 |
|
|
1,512 |
|
| Pro forma diluted shares(d) |
|
1,694 |
|
|
1,675 |
|
|
1,636 |
|
|
1,619 |
|
|
1,614 |
|
| (a) |
In the fourth quarter of fiscal 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 fiscal 2004 and as a result, GAAP results for fiscal 2004 reflect only partial economic performance of the Company’s licensing business as royalty revenue that would have been recognized in the fourth quarter of fiscal 2004 was recognized in the first quarter of fiscal 2005. |
| (b) |
Other pro forma adjustments are comprised of: |
|
Results for QTL under the new method of recording
royalty revenue(a) |
$ |
— |
|
$ |
(151 |
) |
$ |
1 |
|
$ |
28 |
|
$ |
22 |
|
| Amortization of goodwill and other intangible assets |
|
— |
|
|
— |
|
|
— |
|
|
(259 |
) |
|
(256 |
) |
| Stock option payroll tax expense |
|
— |
|
|
— |
|
|
— |
|
|
(6 |
) |
|
(13 |
) |
| Globalstar |
|
— |
|
|
— |
|
|
— |
|
|
4 |
|
|
(57 |
) |
| Legal settlement |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(69 |
) |
| Other |
|
— |
|
|
— |
|
|
— |
|
|
8 |
|
|
(11 |
) |
| |
| Total pro forma adjustments before taxes |
$ |
— |
|
$ |
(151 |
) |
$ |
1 |
|
$ |
(225 |
) |
$ |
(384 |
) |
| |
One-time tax benefit recorded in fiscal 2005 related
to fiscal 2004 |
|
71 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Income tax benefit (expense) related to pro forma
adjustments before taxes |
|
— |
|
|
59 |
|
|
— |
|
|
(12 |
) |
|
58 |
|
| Accounting change, net of tax |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(18 |
) |
| |
| Total pro forma adjustments, net of tax |
$ |
71 |
|
$ |
(92 |
) |
$ |
1 |
|
$ |
(237 |
) |
$ |
(344 |
) |
| |
| Net pro forma adjustments on a diluted per share basis |
$ |
0.04 |
|
$ |
(0.06 |
) |
$ |
0.00 |
|
$ |
(0.15 |
) |
$ |
(0.23 |
) |
| |
RECONCILIATION OF FREE CASH FLOW TO NET CASH PROVIDED BY OPERATING ACTIVITIES
| (in millions) |
2005 |
|
2004 |
|
2003 |
|
2002 |
|
2001 |
|
| |
| Net cash provided by operating activities (GAAP) |
$ |
2,686 |
|
$ |
2,481 |
|
$ |
1,824 |
|
$ |
1,263 |
|
$ |
1,051 |
|
| Less capital expenditures (GAAP) |
|
(576 |
) |
|
(332 |
) |
|
(202 |
) |
|
(127 |
) |
|
(114 |
) |
| |
| Free Cash Flow |
$ |
2,110 |
|
$ |
2,149 |
|
$ |
1,622 |
|
$ |
1,136 |
|
$ |
937 |
|
| |
|
