Accounting Policy on Income Taxes
Income Tax Expense (Benefit)
Effective Income Tax Rate (EITR)
Components of Deferred Tax Assets and Liabilities
Deferred Tax Assets and Liabilities, Classification
Adjustments to Financial Statements: Removal of Deferred Taxes
Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)
Adjusted Current Ratio
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

The asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Tax law and rate changes are reflected in income in the period such changes are enacted. Qualcomm records a valuation allowance to reduce deferred tax assets to the amount that is more likely than not to be realized. Qualcomm includes interest and penalties related to income taxes, including unrecognized tax benefits, within income tax expense. Qualcomm classifies all deferred tax assets and liabilities as noncurrent in the consolidated balance sheets.

Qualcomm’s income tax returns are based on calculations and assumptions that are subject to examination by the Internal Revenue Service and other tax authorities. In addition, the calculation of Qualcomm’s tax liabilities involves dealing with uncertainties in the application of complex tax regulations. Qualcomm recognizes liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. While Qualcomm believes Qualcomm has appropriate support for the positions taken on the tax returns, Qualcomm regularly assesses the potential outcomes of examinations by tax authorities in determining the adequacy of the provision for income taxes. Qualcomm continually assesses the likelihood and amount of potential adjustments and adjusts the income tax provision, income taxes payable and deferred taxes in the period in which the facts that give rise to a revision become known.

Qualcomm recognizes excess tax benefits and shortfall tax detriments associated with share-based awards in the consolidated statements of operations, as a component of income tax expense, when realized.

Source: 10-K (filing date: 2019-11-06).

Qualcomm Inc., income tax expense (benefit), continuing operations

US$ in millions

	12 months ended	Sep 29, 2019		Sep 30, 2018		Sep 24, 2017		Sep 25, 2016		Sep 27, 2015		Sep 28, 2014
	Federal
	State
	Foreign
	Current provision
	Federal
	State
	Foreign
	Deferred provision (benefit)
	Income tax provision

Based on: 10-K (filing date: 2019-11-06), 10-K (filing date: 2018-11-07), 10-K (filing date: 2017-11-01), 10-K (filing date: 2016-11-02), 10-K (filing date: 2015-11-04), 10-K (filing date: 2014-11-05).

Item	Description	The company
Current provision	Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.	Qualcomm Inc.’s current provision increased from 2017 to 2018 but then decreased significantly from 2018 to 2019.
Deferred provision (benefit)	Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations.	Qualcomm Inc.’s deferred provision (benefit) increased from 2017 to 2018 but then slightly decreased from 2018 to 2019.
Income tax provision	Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Qualcomm Inc.’s income tax provision increased from 2017 to 2018 but then slightly decreased from 2018 to 2019.

Qualcomm Inc., effective income tax rate (EITR) reconciliation

		Sep 29, 2019	Sep 30, 2018	Sep 24, 2017	Sep 25, 2016	Sep 27, 2015	Sep 28, 2014
	Federal statutory tax rate
	Effective income tax rate, excluding U.S. tax reform
	Effective income tax rate

Based on: 10-K (filing date: 2019-11-06), 10-K (filing date: 2018-11-07), 10-K (filing date: 2017-11-01), 10-K (filing date: 2016-11-02), 10-K (filing date: 2015-11-04), 10-K (filing date: 2014-11-05).

Item	Description	The company
Effective income tax rate, excluding U.S. tax reform	Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Qualcomm Inc.’s effective income tax rate, excluding U.S. tax reform increased from 2017 to 2018 and from 2018 to 2019.

Qualcomm Inc., components of deferred tax assets and liabilities

US$ in millions

		Sep 29, 2019		Sep 30, 2018		Sep 24, 2017		Sep 25, 2016		Sep 27, 2015		Sep 28, 2014
	Unused tax credits
	Accrued liabilities and reserves
	Unused net operating losses
	Unearned revenues
	Unrealized losses on other investments and marketable securities
	Share-based compensation
	Other
	Gross deferred tax assets
	Valuation allowance
	Net deferred tax assets
	Intangible assets
	Property, plant and equipment
	Unrealized gains on other investments and marketable securities
	Accrued withholding taxes
	Accrued revenues
	Other
	Deferred tax liabilities
	Net deferred tax assets (liabilities)

Based on: 10-K (filing date: 2019-11-06), 10-K (filing date: 2018-11-07), 10-K (filing date: 2017-11-01), 10-K (filing date: 2016-11-02), 10-K (filing date: 2015-11-04), 10-K (filing date: 2014-11-05).

Item	Description	The company
Gross deferred tax assets	Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Qualcomm Inc.’s gross deferred tax assets decreased from 2017 to 2018 but then slightly increased from 2018 to 2019.
Net deferred tax assets	Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Qualcomm Inc.’s net deferred tax assets decreased from 2017 to 2018 but then slightly increased from 2018 to 2019.
Net deferred tax assets (liabilities)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting.	Qualcomm Inc.’s net deferred tax assets (liabilities) decreased from 2017 to 2018 but then slightly increased from 2018 to 2019.

Qualcomm Inc., deferred tax assets and liabilities, classification

US$ in millions

		Sep 29, 2019	Sep 30, 2018	Sep 24, 2017	Sep 25, 2016	Sep 27, 2015	Sep 28, 2014
	Current deferred tax assets
	Non-current deferred tax assets
	Current deferred tax liabilities (included in Other current liabilities)
	Non-current deferred tax liabilities (included in Other liabilities)

Based on: 10-K (filing date: 2019-11-06), 10-K (filing date: 2018-11-07), 10-K (filing date: 2017-11-01), 10-K (filing date: 2016-11-02), 10-K (filing date: 2015-11-04), 10-K (filing date: 2014-11-05).

Item	Description	The company
Non-current deferred tax assets	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent.	Qualcomm Inc.’s non-current deferred tax assets decreased from 2017 to 2018 but then slightly increased from 2018 to 2019.
Non-current deferred tax liabilities (included in Other liabilities)	Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent.	Qualcomm Inc.’s non-current deferred tax liabilities (included in Other liabilities) increased from 2017 to 2018 but then decreased significantly from 2018 to 2019.

Qualcomm Inc., adjustments to financial statements

US$ in millions

		Sep 29, 2019	Sep 30, 2018	Sep 24, 2017	Sep 25, 2016	Sep 27, 2015	Sep 28, 2014
	Adjustment to Current Assets
	Current assets (as reported)
	Less: Current deferred tax assets, net
	Current assets (adjusted)
	Adjustment to Total Assets
	Total assets (as reported)
	Less: Current deferred tax assets, net
	Less: Noncurrent deferred tax assets, net
	Total assets (adjusted)
	Adjustment to Current Liabilities
	Current liabilities (as reported)
	Less: Current deferred tax liabilities, net
	Current liabilities (adjusted)
	Adjustment to Total Liabilities
	Total liabilities (as reported)
	Less: Current deferred tax liabilities, net
	Less: Noncurrent deferred tax liabilities, net
	Total liabilities (adjusted)
	Adjustment to Total Qualcomm Stockholders’ Equity
	Total Qualcomm stockholders’ equity (as reported)
	Less: Net deferred tax assets (liabilities)
	Total Qualcomm stockholders’ equity (adjusted)
	Adjustment to Net Income (loss) Attributable To Qualcomm
	Net income (loss) attributable to Qualcomm (as reported)
	Add: Deferred income tax expense (benefit)
	Net income (loss) attributable to Qualcomm (adjusted)

Based on: 10-K (filing date: 2019-11-06), 10-K (filing date: 2018-11-07), 10-K (filing date: 2017-11-01), 10-K (filing date: 2016-11-02), 10-K (filing date: 2015-11-04), 10-K (filing date: 2014-11-05).

Qualcomm Inc., Financial Data: Reported vs. Adjusted

Qualcomm Inc., adjusted financial ratios

		Sep 29, 2019	Sep 30, 2018	Sep 24, 2017	Sep 25, 2016	Sep 27, 2015	Sep 28, 2014
	Current Ratio
	Reported current ratio
	Adjusted current ratio
	Net Profit Margin
	Reported net profit margin
	Adjusted net profit margin
	Total Asset Turnover
	Reported total asset turnover
	Adjusted total asset turnover
	Financial Leverage
	Reported financial leverage
	Adjusted financial leverage
	Return on Equity (ROE)
	Reported ROE
	Adjusted ROE
	Return on Assets (ROA)
	Reported ROA
	Adjusted ROA

Based on: 10-K (filing date: 2019-11-06), 10-K (filing date: 2018-11-07), 10-K (filing date: 2017-11-01), 10-K (filing date: 2016-11-02), 10-K (filing date: 2015-11-04), 10-K (filing date: 2014-11-05).

Financial ratio	Description	The company
Adjusted current ratio	A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities.	Qualcomm Inc.’s adjusted current ratio deteriorated from 2017 to 2018 but then slightly improved from 2018 to 2019.
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Qualcomm Inc.’s adjusted net profit margin ratio deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Qualcomm Inc.’s adjusted total asset turnover ratio improved from 2017 to 2018 and from 2018 to 2019.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Qualcomm Inc.’s adjusted financial leverage ratio increased from 2017 to 2018 but then slightly decreased from 2018 to 2019 not reaching 2017 level.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Qualcomm Inc.’s adjusted ROE deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Qualcomm Inc.’s adjusted ROA deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.

Qualcomm Inc., Financial Ratios: Reported vs. Adjusted

		Sep 29, 2019	Sep 30, 2018	Sep 24, 2017	Sep 25, 2016	Sep 27, 2015	Sep 28, 2014
	As Reported
	Selected Financial Data (US$ in millions)
	Current assets
	Current liabilities
	Liquidity Ratio
	Current ratio¹
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Adjusted current assets
	Adjusted current liabilities
	Liquidity Ratio
	Adjusted current ratio²

Based on: 10-K (filing date: 2019-11-06), 10-K (filing date: 2018-11-07), 10-K (filing date: 2017-11-01), 10-K (filing date: 2016-11-02), 10-K (filing date: 2015-11-04), 10-K (filing date: 2014-11-05).

2019 Calculations

¹ Current ratio = Current assets ÷ Current liabilities
= hidden ÷ hidden = hidden

² Adjusted current ratio = Adjusted current assets ÷ Adjusted current liabilities
= hidden ÷ hidden = hidden

Liquidity ratio	Description	The company
Adjusted current ratio	A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities.	Qualcomm Inc.’s adjusted current ratio deteriorated from 2017 to 2018 but then slightly improved from 2018 to 2019.

		Sep 29, 2019	Sep 30, 2018	Sep 24, 2017	Sep 25, 2016	Sep 27, 2015	Sep 28, 2014
	As Reported
	Selected Financial Data (US$ in millions)
	Net income (loss) attributable to Qualcomm
	Revenues
	Profitability Ratio
	Net profit margin¹
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Adjusted net income (loss) attributable to Qualcomm
	Revenues
	Profitability Ratio
	Adjusted net profit margin²

Based on: 10-K (filing date: 2019-11-06), 10-K (filing date: 2018-11-07), 10-K (filing date: 2017-11-01), 10-K (filing date: 2016-11-02), 10-K (filing date: 2015-11-04), 10-K (filing date: 2014-11-05).

2019 Calculations

¹ Net profit margin = 100 × Net income (loss) attributable to Qualcomm ÷ Revenues
= 100 × hidden ÷ hidden = hidden

² Adjusted net profit margin = 100 × Adjusted net income (loss) attributable to Qualcomm ÷ Revenues
= 100 × hidden ÷ hidden = hidden

Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Qualcomm Inc.’s adjusted net profit margin ratio deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.

		Sep 29, 2019	Sep 30, 2018	Sep 24, 2017	Sep 25, 2016	Sep 27, 2015	Sep 28, 2014
	As Reported
	Selected Financial Data (US$ in millions)
	Revenues
	Total assets
	Activity Ratio
	Total asset turnover¹
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Revenues
	Adjusted total assets
	Activity Ratio
	Adjusted total asset turnover²

Based on: 10-K (filing date: 2019-11-06), 10-K (filing date: 2018-11-07), 10-K (filing date: 2017-11-01), 10-K (filing date: 2016-11-02), 10-K (filing date: 2015-11-04), 10-K (filing date: 2014-11-05).

2019 Calculations

¹ Total asset turnover = Revenues ÷ Total assets
= hidden ÷ hidden = hidden

² Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= hidden ÷ hidden = hidden

Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Qualcomm Inc.’s adjusted total asset turnover ratio improved from 2017 to 2018 and from 2018 to 2019.

		Sep 29, 2019	Sep 30, 2018	Sep 24, 2017	Sep 25, 2016	Sep 27, 2015	Sep 28, 2014
	As Reported
	Selected Financial Data (US$ in millions)
	Total assets
	Total Qualcomm stockholders’ equity
	Solvency Ratio
	Financial leverage¹
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Adjusted total assets
	Adjusted total Qualcomm stockholders’ equity
	Solvency Ratio
	Adjusted financial leverage²

Based on: 10-K (filing date: 2019-11-06), 10-K (filing date: 2018-11-07), 10-K (filing date: 2017-11-01), 10-K (filing date: 2016-11-02), 10-K (filing date: 2015-11-04), 10-K (filing date: 2014-11-05).

2019 Calculations

¹ Financial leverage = Total assets ÷ Total Qualcomm stockholders’ equity
= hidden ÷ hidden = hidden

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Qualcomm stockholders’ equity
= hidden ÷ hidden = hidden

Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Qualcomm Inc.’s adjusted financial leverage ratio increased from 2017 to 2018 but then slightly decreased from 2018 to 2019 not reaching 2017 level.

		Sep 29, 2019	Sep 30, 2018	Sep 24, 2017	Sep 25, 2016	Sep 27, 2015	Sep 28, 2014
	As Reported
	Selected Financial Data (US$ in millions)
	Net income (loss) attributable to Qualcomm
	Total Qualcomm stockholders’ equity
	Profitability Ratio
	ROE¹
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Adjusted net income (loss) attributable to Qualcomm
	Adjusted total Qualcomm stockholders’ equity
	Profitability Ratio
	Adjusted ROE²

Based on: 10-K (filing date: 2019-11-06), 10-K (filing date: 2018-11-07), 10-K (filing date: 2017-11-01), 10-K (filing date: 2016-11-02), 10-K (filing date: 2015-11-04), 10-K (filing date: 2014-11-05).

2019 Calculations

¹ ROE = 100 × Net income (loss) attributable to Qualcomm ÷ Total Qualcomm stockholders’ equity
= 100 × hidden ÷ hidden = hidden

² Adjusted ROE = 100 × Adjusted net income (loss) attributable to Qualcomm ÷ Adjusted total Qualcomm stockholders’ equity
= 100 × hidden ÷ hidden = hidden

Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Qualcomm Inc.’s adjusted ROE deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.

		Sep 29, 2019	Sep 30, 2018	Sep 24, 2017	Sep 25, 2016	Sep 27, 2015	Sep 28, 2014
	As Reported
	Selected Financial Data (US$ in millions)
	Net income (loss) attributable to Qualcomm
	Total assets
	Profitability Ratio
	ROA¹
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Adjusted net income (loss) attributable to Qualcomm
	Adjusted total assets
	Profitability Ratio
	Adjusted ROA²

Based on: 10-K (filing date: 2019-11-06), 10-K (filing date: 2018-11-07), 10-K (filing date: 2017-11-01), 10-K (filing date: 2016-11-02), 10-K (filing date: 2015-11-04), 10-K (filing date: 2014-11-05).

2019 Calculations

¹ ROA = 100 × Net income (loss) attributable to Qualcomm ÷ Total assets
= 100 × hidden ÷ hidden = hidden

² Adjusted ROA = 100 × Adjusted net income (loss) attributable to Qualcomm ÷ Adjusted total assets
= 100 × hidden ÷ hidden = hidden

Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Qualcomm Inc.’s adjusted ROA deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.

	Qualcomm Inc.	Other companies (not purchased previously)
Financial Statements
Common-Size Financial Statements
Analysis of Financial Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis of Components of Financial Statements
Financial Reporting Quality

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Financial Statements
Common-Size Financial Statements
Analysis of Financial Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis of Components of Financial Statements
Financial Reporting Quality

Qualcomm Inc. (QCOM)

Analysis of Income Taxes

Accounting Policy on Income Taxes

Income Tax Expense (Benefit)

Effective Income Tax Rate (EITR)

Components of Deferred Tax Assets and Liabilities

Deferred Tax Assets and Liabilities, Classification

Adjustments to Financial Statements: Removal of Deferred Taxes

Qualcomm Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Qualcomm Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Current Ratio

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)