Qualcomm Incorporated

QUALCOMM Announces Fourth Quarter and Fiscal 2006 Results

    San Diego, November 2 (ots/PRNewswire) -

@@start.t1@@                    Fiscal 2006 Revenues US$7.53 Billion, EPS US$1.44
              Pro Forma Fiscal 2006 Revenues US$7.53 Billion, EPS US$1.64
         Record Fiscal Year Revenues, Net Income and Operating Cash Flows@@end@@

    QUALCOMM Incorporated (Nasdaq: QCOM) today announced results for the fourth fiscal quarter and fiscal 2006 year ended September 24, 2006.

    Total QUALCOMM (GAAP) Results:

    Total QUALCOMM results are reported in accordance with Generally Accepted Accounting Principles (GAAP).

@@start.t2@@      Fourth Quarter
      - Revenues: US$2.00 billion, up 28 percent year-over-year and 2 percent
         sequentially.
      - Net income: US$614 million, up 14 percent year-over-year and down
         5 percent sequentially.
      - Diluted earnings per share: US$0.36, up 13 percent year-over-year and
         down 3 percent sequentially.
      - Effective tax rate: 24 percent.
      - Estimated share-based compensation: US$76 million, net of tax.
      - Operating cash flow: US$952 million, up 1 percent year-over-year;
         48 percent of revenue.
      - Return of capital to stockholders: US$528 million, including
         US$198 million, or US$0.12 per share, of cash dividends and US$330
         million, net of related premiums received, to repurchase 7.6 million
         shares of our common stock.
      Fiscal 2006
      - Revenues: US$7.53 billion, up 33 percent year-over-year.
      - Net income: US$2.47 billion, up 15 percent year-over-year.
      - Diluted earnings per share: US$1.44, up 14 percent year-over-year.
      - Effective tax rate: 22 percent.
      - Estimated share-based compensation: US$320 million, net of tax.
      - Operating cash flow: US$3.25 billion, up 21 percent year-over-year;
         43 percent of revenue.
      - Return of capital to stockholders: US$2.19 billion, including
         US$698 million, or US$0.42 per share, of cash dividends and US$1.49
         billion, net of related premiums received, to repurchase 34.0 million
         shares of our common stock.@@end@@

    QUALCOMM Pro Forma Results:

    Pro forma results exclude the QUALCOMM Strategic Initiatives (QSI) segment, estimated share-based compensation, certain tax adjustments related to prior years and acquired in-process research and development (R&D) expense.

@@start.t3@@      Fourth Quarter
      - Revenues: US$2.00 billion, up 28 percent year-over-year and 2 percent
         sequentially.
      - Net income: US$705 million, up 30 percent year-over-year and down
         3 percent sequentially.
      - Diluted earnings per share: US$0.42, up 31 percent year-over-year and
         even sequentially; excludes US$0.05 loss per share attributable to
         estimated share-based compensation and US$0.01 loss per share
         attributable to certain tax adjustments related to prior years.
      - Effective tax rate: 27 percent.
      - Free cash flow: US$907 million, up 8 percent year-over-year; 45 percent
         of revenue. (Defined as net cash from operating activities less
         capital expenditures).
      Fiscal 2006
      - Revenues: US$7.53 billion, up 33 percent year-over-year.
      - Net income: US$2.80 billion, up 42 percent year-over-year.
      - Diluted earnings per share: US$1.64, up 41 percent year-over-year;
         excludes US$0.02 loss per share related to the QSI segment, US$0.19
         loss per share attributable to estimated share-based compensation,
         US$0.02 net earnings per share attributable to certain tax adjustments
         related to prior years and US$0.01 loss per share related to acquired
         in-process R&D expense.
      - Effective tax rate: 26 percent.
      - Free cash flow: US$3.18 billion, up 42 percent year-over-year;
         42 percent of revenue.@@end@@

    Detailed reconciliations between total QUALCOMM (GAAP) results and QUALCOMM pro forma results, and cash flows are included at the end of this news release. Prior period reconciliations are presented on our Investor Relations web page at www.qualcomm.com.

    "Our record performance in fiscal 2006 was a direct result of the focus and innovation delivered by the employees of QUALCOMM and the success of our partners," said Dr. Paul E. Jacobs, chief executive officer of QUALCOMM. "We achieved record revenues, net income and operating cash flow. We shipped a record 207 million MSM(TM) chips in fiscal 2006 -- up from 151 million in fiscal 2005. As of September 2006, there were approximately 402 million subscribers using third generation (3G) CDMA-based networks worldwide as compared to approximately 273 million at the same point in 2005."

    "3G networks with mobile broadband capability are now widely deployed across the globe, enhancing opportunities to gain new 3G subscribers and for the migration of existing second generation subscribers to 3G. Looking forward to fiscal 2007, our key priorities will be working with our existing chipset customers to improve their market share, winning new customers for our chipset and software solutions, and continuing to expand the base of 3G wireless networks."

    "The competition resulting from our business model has led to continual decreases in selling prices of handsets and significant technology advancements which enable further cost reduction and new revenue streams for our partners. Our Company has built the most valuable and widely licensed portfolio of intellectual property in the wireless industry, which we have consistently made available to all on fair and non-discriminatory terms. We will take the necessary actions to ensure that the technology advances embodied in our intellectual property portfolio are protected and that we are fairly compensated for their use. We will continue to fund an expensive but necessary battle to defend our business in the interest of our shareholders."

    Cash and Marketable Securities

    QUALCOMM's cash, cash equivalents and marketable securities totaled approximately US$9.9 billion at the end of the fourth quarter of fiscal 2006, compared to US$9.5 billion at the end of the prior quarter and US$8.7 billion a year ago. On October 5, 2006, we announced a cash dividend of US$0.12 per common share payable on January 4, 2007 to stockholders of record at the close of business on December 7, 2006.

    Estimated Share-Based Compensation

    In the first quarter of fiscal 2006, we adopted the revised Statement of Financial Accounting Standards No. 123, Share-Based Payment (FAS 123R), which requires that share-based compensation be recorded in our financial statements. We implemented FAS 123R using the modified prospective method. Under this method, prior periods are not revised for comparative purposes. Estimated share-based compensation is included in operating expenses, however, it is not allocated to business segments or included in pro forma results because we do not consider it relevant when evaluating the operating performance of our business. Total QUALCOMM (GAAP) net income for the fourth quarter of fiscal 2006 included estimated share-based compensation of US$76 million, net of tax, or US$0.05 per share.

@@start.t4@@      Research and Development
                                                                Estimated    In-Process              Total
                                          QUALCOMM      Share-Based        R&D                 QUALCOMM
      (US$ in millions)         Pro Forma  Compensation    Expense      QSI    (GAAP)
      Fourth quarter
        fiscal 2006                    $338              $56                $1          $16      $411
      As a % of revenue                17%                                                              21%
      Fourth quarter
        fiscal 2005                    $255              $--              $--          $16      $271
      As a % of revenue                16%                                                              17%
      Year-over-year
        change ($)                         33%                                                              52%@@end@@

    Pro forma R&D expenses increased 33 percent year-over-year, primarily due to additional engineering resources for the development of integrated circuit products and other initiatives to support low-cost phones, multimedia applications, high-speed wireless Internet access and multi-mode, multi-band, multi-network products and technologies, including CDMA2000(R) 1X, 1xEV-DO, EV-DO Revision A, EV-DO Revision B, WCDMA (including GSM/GPRS/EDGE), HSDPA, HSUPA and OFDMA, and the development of our iMoD(TM) display products using MEMS technology.

@@start.t5@@      Selling, General and Administrative
                                                                                Estimated                 Total
                                                            QUALCOMM    Share-Based              QUALCOMM
      (US$ in millions)                          Pro Forma  Compensation  QSI      (GAAP)
      Fourth quarter fiscal 2006                $237              $62          $22        $321
      As a % of revenue                                 12%                                            16%
      Fourth quarter fiscal 2005                $168              $--          $10        $178
      As a % of revenue                                 11%                                            11%
      Year-over-year change ($)                    41%                            120%         80%@@end@@

    Pro forma selling, general and administrative (SG&A) expenses increased 41 percent year-over-year, largely attributable to increases in employee related expenses to support our growing worldwide customer base and professional fees related to legal activities. The year-over-year increase in QSI SG&A expenses is primarily related to MediaFLO(TM) USA.

    Effective Income Tax Rate

    Our fiscal 2006 effective income tax rates are 22 percent for total QUALCOMM (GAAP) and 26 percent for QUALCOMM pro forma, which are unchanged from our previous estimates.

    QUALCOMM Strategic Initiatives

    The QSI segment includes our strategic investments, including our MediaFLO USA subsidiary, and related income and expenses. Total QUALCOMM (GAAP) results for the fourth quarter of fiscal 2006 included break-even results for the QSI segment consistent with the fourth quarter of fiscal 2005. The fourth quarter of fiscal 2006 QSI results included US$38 million in operating expenses, primarily related to MediaFLO USA, partially offset by US$12 million in realized gains on investments. Results for the QSI segment in the fourth quarter of fiscal 2006 reflect tax benefits as a result of QSI's loss before taxes and realized gains on investments that increased our forecasted utilization of capital loss carryforwards.

    Business Outlook

    The following statements are forward-looking and actual results may differ materially. Please see "Note Regarding Forward-Looking Statements" at the end of this news release for a description of certain risk factors and QUALCOMM's annual and quarterly reports on file with the Securities and Exchange Commission (SEC) for a more complete description of risks. Due to their nature, certain income and expense items, such as realized investment gains or losses in QSI, gains and losses on certain derivative instruments or asset impairments, cannot be accurately forecast. Accordingly, the Company excludes forecasts of such items from its business outlook, and actual results may vary materially from the business outlook if the Company incurs any such income or expense items. Estimated share-based compensation in future periods may vary materially from the business outlook as the methodology used to calculate this estimate is dependent on a variety of assumptions which are subject to market fluctuations and other factors.

    The following table summarizes total QUALCOMM (GAAP) and QUALCOMM pro forma guidance for the first fiscal quarter and fiscal year 2007 based on the current business outlook. The pro forma business outlook provided below is presented consistent with the presentation of pro forma results provided elsewhere herein. The table includes a footnote to size the risk, approximately US$0.04 to US$0.06 diluted earnings per share, of Nokia not paying royalties in the fourth quarter of fiscal 2007 for June quarter shipments. Nokia has publicly stated that they intend to continue to use our patents but not pay royalties after the expiration of their rights under those patents on April 9, 2007 should a new license agreement (or extension of the existing agreement) not be reached by that time. As a result, under generally accepted accounting principles, we will be unable to record royalty revenue attributable to Nokia's sales until a court awards damages or agreement is reached. If we cannot conclude an extension or a new license agreement beyond April 9, 2007, Nokia's rights to sell subscriber products under most of our patents will expire, as will our rights to sell integrated circuits under Nokia's patents. We intend to pursue and obtain injunctions against Nokia's sales as well as damages (which will include interest from the date of infringement) for Nokia's unlicensed sales after April 9, 2007. We will continue to work with Nokia to see if we can reach agreement by April 9, 2007 on terms which we find acceptable but little progress has been made to date. If we are unable to reach agreement, we will aggressively pursue all our legal and business options and assume that Nokia will do likewise.

    The following estimates are approximations and are based on the current business outlook:

@@start.t6@@                                          Business Outlook Summary
      FIRST FISCAL QUARTER
      (all figures in US$)
                                                                                              Current Guidance
                                                                    Q1'06                         Q1'07
                                                                  Results                    Estimates
      QUALCOMM Pro Forma
      Revenues                                                 $1.74B                    $1.98B - $2.08B
      Year-over-year change                                                      increase 14% - 19%
      Diluted earnings per share (EPS)            $0.39                      $0.42 - $0.44
      Year-over-year change                                                        increase 8% - 13%
      Total QUALCOMM (GAAP)
      Revenues                                                 $1.74B                    $1.98B - $2.08B
      Year-over-year change                                                      increase 14% - 19%
      Diluted earnings per share (EPS)            $0.36                      $0.35 - $0.37
      Year-over-year change                                          decrease 3% - increase 3%
      Diluted EPS attributable to QSI            ($0.01)                                ($0.02)
      Diluted EPS attributable to
        estimated share-based compensation      ($0.05)                                ($0.05)
      Diluted EPS attributable to tax
        items related to prior years                 $0.03                                      n/a
      Metrics
      MSM Shipments                                 approx. 47M            approx. 55M - 58M
      CDMA/WCDMA handset units shipped  approx. 52M(i)        approx. 74M - 76M(i)
      CDMA/WCDMA handset unit
        wholesale average selling price  approx. $215(i)              approx. $209(i)
      (i) Shipments in Sept. quarter, reported in Dec. quarter
      FISCAL YEAR
                                                                                                 Current Guidance
                                                                            FY 2006                FY 2007
                                                                            Results            Estimates (1)
      QUALCOMM Pro Forma
      Revenues                                                          $7.53B            $8.1B - $8.6B
      Year-over-year change                                                      increase 8% - 14%
      Diluted earnings per share (EPS)                    $1.64            $1.76 - $1.81
      Year-over-year change                                                      increase 7% - 10%
      Total QUALCOMM (GAAP)
      Revenues                                                          $7.53B            $8.1B - $8.6B
      Year-over-year change                                                      increase 8% - 14%
      Diluted earnings per share (EPS)                    $1.44            $1.45 - $1.50
      Year-over-year change                                                        increase 1% - 4%
      Diluted EPS attributable to in-
        process R&D                                                  ($0.01)                          n/a
      Diluted EPS attributable to QSI                    ($0.02)                      ($0.11)
      Diluted EPS attributable to
        estimated share-based compensation              ($0.19)                      ($0.20)
      Diluted EPS attributable to tax
        items related to prior years                         $0.02                            n/a
      Metrics
      Fiscal year(i) CDMA/WCDMA handset unit
      wholesale average selling price          approx. $215              approx. $205
      (i) Shipments in Sept. to June quarters, reported in Dec. to Sept.
            quarters
      CALENDAR YEAR Handset Estimates
      CDMA/WCDMA handset unit shipments
                                          Prior Guidance  Current Guidance  Current Guidance
                                          Calendar 2006      Calendar 2006        Calendar 2007
                                              Estimates            Estimates              Estimates
      March quarter
        actuals                         approx. 66M            approx. 66M      not provided
      June quarter         approx. 67M - 70M            approx. 70M      not provided
      September quarter         not provided  approx. 74M - 76M      not provided
      December quarter          not provided          not provided      not provided
      Calendar year
        range                        approx. 285M -        approx. 290M -  approx. 368M -
                                                        295M                        298M                  388M
                                              Midpoint                  Midpoint          Midpoint
      CDMA/WCDMA units          approx. 290M          approx. 294M      approx. 378M
      CDMA units                    approx. 190M          approx. 196M      approx. 203M
      WCDMA units                  approx. 100M            approx. 98M      approx. 175M
      (1)  Current FY 2007 estimates do not reflect the potential adverse
      impact on our results, approximately US$0.04 to US$0.06 diluted earnings
      per share, of Nokia not paying royalties in the fourth quarter of fiscal
      2007 for June quarter shipments.  Further details are included in the
      introductory paragraph which precedes this Business Outlook table.
      Sums may not equal totals due to rounding.
      Results of Business Segments (in US$ millions, except per share data):
      Fourth Quarter - Fiscal Year 2006
                                                                                 Reconciling      QUALCOMM
      Segments                              QCT        QTL      QWI      Items (1)      Pro Forma
      Revenues                          $1,147    $705    $180        $(33)            $1,999
      Change from prior year          26%      42%        6%        N/M                    28%
      Change from prior quarter        1%        3%      11%        N/M                      2%
      EBT                                      $279    $635      $27         $20                 $961
      Change from prior year            5%      41%      29%        N/M                    18%
      Change from prior quarter      (8%)      3%      42%        N/M                    (2%)
      Net income (loss)                                                                            $705
      Change from prior year                                                                        30%
      Change from prior quarter                                                                  (3%)
      Diluted EPS                                                                                    $0.42
      Change from prior year                                                                        31%
      Change from prior quarter                                                                    0%
      Diluted shares used                                                                        1,693
      Fourth Quarter - Fiscal Year 2006
                                Estimated                                                              Total
                              Share-Based            Tax        In-Process                 QUALCOMM
      Segments        Compensation (2)  Items (3)    R&D (4)    QSI (5)      (GAAP)
      Revenues                 $--                  $--            $--            $--        $1,999
      Change from
        prior year              --                    --              --              --              28%
      Change from
        prior quarter         --                    --              --              --                2%
      EBT                      $(127)                 $--            $(1)         $(23)         $810
      Change from
        prior year            N/M                  N/M            N/M            N/M                3%
      Change from
        prior quarter        N/M                  N/M            N/M            N/M              (2%)
      Net income
        (loss)                 $(76)                $(16)          $(1)            $2          $614
      Change from
        prior year            N/M                  N/M            N/M            N/M              14%
      Change from
        prior quarter        N/M                  N/M            N/M            N/M              (5%)
      Diluted EPS        $(0.05)            $(0.01)          $--            $--         $0.36
      Change from
        prior year            N/M                  N/M            N/M            N/M              13%
      Change from
        prior quarter        N/M                  N/M            N/M            N/M              (3%)
      Diluted shares
        used                  1,693                1,693         1,693         1,693         1,693
      Third Quarter - Fiscal Year 2006
                                                                                                      Reconciling
      Segments                                              QCT        QTL        QWI      Items (1)
      Revenues                                            $1,133    $683      $162         $(27)
      EBT                                                         303      619         19            35
      Net income (loss)
      Diluted EPS
      Diluted shares used
      Third Quarter - Fiscal Year 2006
                                                                  Estimated                            Total
                                            QUALCOMM        Share-Based                        QUALCOMM
      Segments                         Pro Forma  Compensation (2)    QSI (5)      (GAAP)
      Revenues                          $1,951                $--                    $--        $1,951
      EBT                                        976              (126)                  (26)          824
      Net income (loss)                 726                (83)                    --            643
      Diluted EPS                        $0.42          $(0.05)                  $--         $0.37
      Diluted shares used          1,728            1,728                 1,728         1,728
      Fourth Quarter - Fiscal Year 2005
                                                                                                      Reconciling
      Segments                                                 QCT      QTL      QWI        Items (1)
      Revenues                                                $912      $497    $170         $(19)
      EBT                                                         266        451        21            75
      Net income (loss)
      Diluted EPS
      Diluted shares used
      Fourth Quarter - Fiscal Year 2005
                                                                                                            Total
                                                                    QUALCOMM                        QUALCOMM
      Segments                                                 Pro Forma      QSI (5)        (GAAP)
      Revenues                                                  $1,560          $--            $1,560
      EBT                                                                813          (27)                786
      Net income (loss)                                         543            (5)                538
      Diluted EPS                                                $0.32          $--              $0.32
      Diluted shares used                                  1,686        1,686              1,686
      First Quarter - Fiscal Year 2006
                                                                                  Reconciling    QUALCOMM
      Segments                              QCT      QTL      QWI      Items (1)        Pro Forma
      Revenues                            $1,033  $564    $166        $(22)            $1,741
      EBT                                         300    517        17          72                  906
      Net income (loss)                                                                              667
      Diluted EPS                                                                                    $0.39
      Diluted shares used                                                                        1,702
      First Quarter - Fiscal Year 2006
                                          Estimated                                                      Total
                                         Share-Based                Tax                              QUALCOMM
      Segments                  Compensation (2)        Items (6)        QSI (5)      (GAAP)
      Revenues                            $--                      $--                 $--         $1,741
      EBT                                  (122)                      --                 (48)            736
      Net income (loss)              (82)                      56                 (21)            620
      Diluted EPS                  $(0.05)                 $0.03            $(0.01)         $0.36
      Diluted shares used        1,702                  1,702              1,702          1,702
      Twelve Months - Fiscal Year 2006
                                                                                  Reconciling    QUALCOMM
      Segments                          QCT         QTL        QWI      Items (1)      Pro Forma
      Revenues                        $4,332    $2,631    $670        $(107)          $7,526
      Change from prior year        32%         43%        4%         N/M                  33%
      EBT                                $1,134    $2,397      $80         $195            $3,806
      Change from prior year        33%         44%      40%         N/M                  36%
      Net income (loss)                                                                         $2,804
      Change from prior year                                                                        42%
      Diluted EPS                                                                                    $1.64
      Change from prior year                                                                        41%
      Diluted shares used                                                                        1,711
      Twelve Months - Fiscal Year 2006
                                Estimated                                                              Total
                              Share-Based                Tax         In-Process            QUALCOMM
      Segments        Compensation (2)  Items (3)(6)    R&D (4)      QSI      (GAAP)
      Revenues                 $--                      $--              $--         $--      $7,526
      Change from
        prior year              --                        --                --          --            33%
      EBT                      $(495)                    $--            $(22)    $(133)    $3,156
      Change from
        prior year            N/M                        --                --         N/M            12%
      Net income
        (loss)                $(320)                    $40            $(22)      $(32)    $2,470
      Change from
        prior year            N/M                      N/M              N/M         N/M            15%
      Diluted EPS        $(0.19)                 $0.02         $(0.01)  $(0.02)      $1.44
      Change from
        prior year            N/M                      N/M              N/M         N/M            14%
      Diluted shares
        used                  1,711                  1,711          1,711      1,711        1,711
      Twelve Months - Fiscal Year 2005
                                                                                                    Reconciling
      Segments                                                QCT        QTL      QWI      Items (1)
      Revenues                                            $3,290    $1,839  $644        $(100)
      EBT                                                         852      1,663      57          227
      Net income
      Diluted EPS
      Diluted shares used
      Twelve Months - Fiscal Year 2005
                                                                                                              Total
                                         QUALCOMM                Tax                                QUALCOMM
      Segments                    Pro Forma         Items (7)(8)              QSI      (GAAP)
      Revenues                      $5,673                  $--                      $--      $5,673
      EBT                                2,799                    --                        10        2,809
      Net income                    1,970                    71                      102        2,143
      Diluted EPS                  $1.16                $0.04                  $0.06        $1.26
      Diluted shares used      1,694                1,694                  1,694        1,694@@end@@

    (1) Reconciling items related to revenues consist primarily of other nonreportable segment revenues less intersegment eliminations. Reconciling items related to earnings before taxes consist primarily of corporate expenses, charges that are not allocated to the segments for management reporting purposes, unallocated net investment income, nonreportable segment results, interest expense and the elimination of intercompany profit.

    (2) During the first quarter of fiscal 2006, the Company adopted the fair value recognition provisions of FAS 123R using a modified prospective application. Under this method, prior periods are not revised for comparative purposes. Share-based compensation is included in operating expenses as part of employee-related costs but is not allocated to our segments as these estimated costs are not considered relevant by management in evaluating segment performance.

    (3) During the fourth quarter of fiscal 2006, the Company refined its estimate of R&D costs allocable to the Company's foreign operations to reflect our actual results and updated forecast of future benefits to the parties under an intercompany cost sharing agreement. Due to this adjustment, the effective tax rate in the fourth quarter of fiscal 2006 for total QUALCOMM (GAAP) includes US$33 million of tax expense, or US$0.02 per diluted share, related to fiscal 2004. In addition, the Company recorded a US$17 million tax benefit, or US$0.01 diluted earnings per share, related to the impact of prior year tax audits completed during the fourth quarter of fiscal 2006. For fiscal 2006 pro forma presentation, results have been adjusted to exclude these tax adjustments related to prior years.

    (4) During fiscal 2006, the Company recorded US$22 million of expenses related to acquired in-process R&D associated with three acquisitions completed during the year. US$21 million of this expense was recorded in the second quarter of fiscal 2006 and US$1 million was recorded in the fourth quarter of fiscal 2006. For fiscal 2006 pro forma presentation, results have been adjusted to exclude these expenses as they are unrelated to the Company's ongoing core operating businesses and are also not allocated to our segments as these costs are not considered relevant by management in evaluating segment performance.

    (5) At fiscal year-end, the sum of the quarterly tax provisions for each column, including QSI, equals the annual tax provisions for each column computed in accordance with GAAP. In interim quarters, the tax provision for the QSI operating segment is computed by subtracting the tax provision for QUALCOMM pro forma, the tax adjustment column and the tax provision related to estimated share-based compensation from the tax provision for total QUALCOMM (GAAP).

    (6) During the first quarter of fiscal 2006, the Company recorded a US$56 million tax benefit, or US$0.03 diluted earnings per share, related to the expected impact of prior year tax audits completed during the quarter. For fiscal 2006 pro forma presentation, results have been adjusted to exclude this tax adjustment attributable to prior years.

    (7) During the second quarter of fiscal 2005, the Company decreased its estimate of R&D costs allocable to the Company's foreign operations under an intercompany cost sharing agreement. Due to this change in estimate, the effective tax rate in the second quarter for total QUALCOMM (GAAP) included a US$55 million benefit, or US$0.03 diluted earnings per share, related to fiscal 2004. For fiscal 2005 pro forma presentation, results have been adjusted to exclude this tax adjustment attributable to fiscal 2004.

    (8) During the third quarter of fiscal 2005, the Company made an election to compute its California tax on the basis of its U.S. operations only, which resulted in a US$38 million tax benefit. Our effective tax rate in the third quarter of fiscal 2005 for total QUALCOMM (GAAP) includes a US$16 million tax benefit, or US$0.01 diluted earnings per share, for this California tax election related to fiscal 2004. For fiscal 2005 pro forma presentation, results have been adjusted to exclude the tax adjustment attributable to fiscal 2004.

    N/M - Not Meaningful

    Sums may not equal totals due to rounding.

    Conference Call

    QUALCOMM's fourth quarter fiscal 2006 earnings conference call will be broadcast live on November 2, 2006 beginning at 1:45 p.m. Pacific Standard Time (PST) on the Company's web site at: www.qualcomm.com. This conference call may contain forward-looking financial information. The conference call will include a discussion of "non-GAAP financial measures" as that term is defined in Regulation G. The most directly comparable GAAP financial measures and information reconciling these non-GAAP financial measures to the Company's financial results prepared in accordance with GAAP, as well as the other material financial and statistical information to be discussed in the conference call, will be posted on the Company's Investor Relations web site at www.qualcomm.com immediately prior to commencement of the call. A taped audio replay will be available via telephone on November 2, 2006 beginning at approximately 5:30 p.m. (PST) through November 16, 2006 at 9:00 p.m. (PST). To listen to the replay, U.S. callers may dial +1-800-642-1687 and international callers may dial +1-706-645-9291. U.S. and international  callers should use reservation number 7440137. An audio replay of the conference call will be available on the Company's web site at www.qualcomm.com for two weeks following the live call.

    Editor's Note: If you would like to view the web slides that accompany this earnings release and conference call, please view the QUALCOMM Investor Relations web site at http://investor.qualcomm.com/results.cfm .

    QUALCOMM Incorporated (www.qualcomm.com) is a leader in developing and delivering innovative digital wireless communications products and services based on CDMA and other advanced technologies. Headquartered in San Diego, Calif., QUALCOMM is included in the S&P 500 Index and is a 2006 FORTUNE 500(R) company traded on The Nasdaq Stock Market(R) under the ticker symbol QCOM.

    Note Regarding Use of Non-GAAP Financial Measures

    The Company presents pro forma financial information that is used by management (i) to evaluate, assess and benchmark the Company's operating results on a consistent and comparable basis, (ii) to measure the performance and efficiency of the Company's ongoing core operating businesses, including the QUALCOMM CDMA Technologies, QUALCOMM Technology Licensing and QUALCOMM Wireless & Internet segments, and (iii) to compare the performance and efficiency of these segments against each other and against competitors outside the Company. Pro forma measurements of the following financial data are used by the Company's management: revenues, R&D expenses, SG&A expenses, total operating expenses, operating income, net investment income, income before income taxes, effective tax rate, net income, diluted earnings per share, operating cash flow and free cash flow.

    Pro forma information used by management excludes the QUALCOMM Strategic Initiatives (QSI) segment, estimated share-based compensation, certain tax adjustments related to prior years and acquired in-process R&D expense. The QSI segment is excluded because the Company expects to exit its strategic investments at various times and the effects of fluctuations in the value of such investments are viewed by management as unrelated to the Company's operational performance. Estimated share-based compensation is excluded because management views the valuation of options and other share-based compensation as theoretical and unrelated to the Company's operational performance as it is affected by factors that are subject to change on each grant date including the Company's stock price, stock market volatility, expected option life, risk-free interest rates and expected dividend payouts in future years. Moreover, it is not an expense that requires or will require cash payment by the Company. Certain tax adjustments related to prior years are excluded in order to provide a clearer understanding of the Company's ongoing tax rate and after tax earnings. Acquired in-process R&D expense in fiscal 2006 is excluded because such expense is incurred infrequently and is viewed by management as unrelated to the operating activities of the Company's ongoing core businesses.

    Management is able to assess what it believes is a more meaningful and comparable set of financial performance measures for the Company and its business segments by eliminating the episodic impact of strategic investments in QSI and items such as acquired in-process R&D, as well as the inherent, non-operational volatility of share-based compensation. As a result, management compensation decisions and the review of executive compensation by the Compensation Committee of the Board of Directors focus primarily on pro forma financial measures applicable to the Company and its business segments.

    The Company's management uses pro forma cash flow information including marketable securities to analyze increases and decreases in certain of its liquid assets, comprised of cash, cash equivalents and marketable securities. Management views certain marketable securities as liquid assets available on short notice to fund operations, acquisitions, strategic initiatives, stock repurchases and dividends even though these marketable securities do not meet the definition of cash equivalents in accordance with Statement of Financial Accounting Standards No. 95, "Statement of Cash Flows." The GAAP statements of cash flows present the purchases and sales of marketable securities as inflows and outflows. For internal analysis of the Company's cash position, management does not view these transactions as inflows and outflows from the business, but as cash management transactions. The Company believes that this non-GAAP presentation is a helpful and practical measure of the Company's liquidity.

    The Company presents free cash flow, defined as net cash provided by operating activities less capital expenditures, to facilitate an understanding of the amount of cash flow generated that is available to grow its business and to create long-term shareholder value. The Company believes that this presentation is useful in evaluating its operating performance and financial strength. In addition, management uses this measure to value the Company and to compare its operating performance with other companies in the industry.

    The non-GAAP pro forma financial information presented herein should be considered in addition to, not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. In addition, pro forma is not a term defined by GAAP, and, as a result, the Company's measure of pro forma results might be different than similarly titled measures used by other companies. Reconciliations between total QUALCOMM (GAAP) results and QUALCOMM pro forma results and total QUALCOMM (GAAP) cash flow and QUALCOMM pro forma changes in cash, cash equivalents and marketable securities are presented herein.

    Note Regarding Forward-Looking Statements

    In addition to the historical information contained herein, this news release 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 limited to risks associated with: the rate of development, deployment and commercial acceptance of CDMA-based networks and CDMA-based technology, including CDMA2000 1X, 1xEV-DO, WCDMA and HSDPA both domestically and internationally;  Our dependence on major customers and licensees; fluctuations in the demand  For CDMA-based products, services or applications; foreign currency  fluctuations; strategic loans, investments and transactions the Company has  or may pursue; our dependence on third party manufacturers and suppliers; our  ability to maintain and improve operational efficiencies and profitability;  developments in current and future litigation; the development, deployment  and commercial acceptance of the MediaFLO USA network and FLO(TM) technology;  as well as the other risks detailed from time-to-time in the Company's SEC  reports.

    (C) 2006 QUALCOMM Incorporated. All rights reserved. QUALCOMM is a registered trademark of QUALCOMM Incorporated. CDMA2000(R) is a registered trademark of the Telecommunications Industry Association. All other trademarks are the property of their respective owners.

      QUALCOMM Contact:
      Bill Davidson
      Vice President, Investor Relations
      +1-858-658-4813 (ph) +1-858-651-9303 (fax)
      e-mail: ir@qualcomm.com

@@start.t7@@                                                QUALCOMM Incorporated
                                  CONSOLIDATED STATEMENTS OF OPERATIONS
                  THIS SCHEDULE IS TO ASSIST THE READER IN RECONCILING FROM
                              PRO FORMA RESULTS TO TOTAL QUALCOMM RESULTS
                                    (In US$ millions, except per share data)
                                                        (Unaudited)
                                                 Three Months Ended September 24, 2006
                                                    Estimated                                         Total
                            QUALCOMM    Share-Based      Tax    In-Process         QUALCOMM
                            Pro Forma  Compensation  Items        R&D        QSI    (GAAP)
      Revenues:
        Equipment and
         services        $1,264            $--          $--          $--      $--      $1,264
        Licensing
         and
         royalty fees      735              --            --            --        --          735
         Total
          revenues        1,999              --            --            --        --        1,999
      Operating
        expenses:
        Cost of
         equipment
         and services
         revenues            577                9            --            --        --          586
        Research and
         development        338              56            --              1        16          411
        Selling,
         general and
         administrative  237              62            --            --        22          321
         Total
          operating
          expenses        1,152            127            --              1        38        1,318
      Operating
        income (loss)      847          (127)          --            (1)    (38)         681
      Investment
        income, net         114 (a)        --            --            --        15 (b)    129
      Income (loss)
        before income
        taxes                  961          (127)          --            (1)    (23)         810
      Income tax
        (expense)
        benefit            (256) (c)      51          (16)          --        25 (d)  (196) (c)
      Net income
        (loss)                $705          $(76)        $(16)         $(1)      $2         $614
      Earnings
        (loss) per
        common share:
         Diluted          $0.42        $(0.05)    $(0.01)    $(0.00) $0.00        $0.36
      Shares used in
        per share
        calculations:
         Diluted          1,693         1,693        1,693        1,693  1,693        1,693
      Supplemental
        Financial Data:
      Operating Cash
        Flow                $1,007          $(27) (f)  $--         $--      $(28)        $952
      Operating Cash
        Flow as a %
        of Revenue            50%                                                                        48%
      Free Cash
        Flow (e)            $907          $(27) (f)  $--         $--      $(57)        $823
      Free Cash Flow
        as a % of
        Revenue                 45%                                                                        41%@@end@@

    (a) Includes US$100 million in interest and dividend income related to cash, cash equivalents and marketable securities, which are not part of the Company's strategic investment portfolio, and US$30 million in net realized gains on investments, partially offset by US$11 million in losses on derivative instruments, primarily related to the increase in the fair value of the put option liabilities related to our share repurchase program, US$3 million in other-than-temporary losses on investments and US$2 million in interest expense.

    (b) Includes US$12 million in net realized gains on investments, US$2 million in interest and dividend income and US$1 million in equity in income of investees.

    (c) The fourth quarter of fiscal 2006 tax rates are approximately 24% for total QUALCOMM (GAAP) and approximately 27% for QUALCOMM pro forma.

    (d) At fiscal year-end, the sum of the quarterly tax provisions for each column, including QSI, will equal the annual tax provisions for each column computed in accordance with GAAP. In interim quarters, the tax provision for the QSI operating segment is computed by subtracting the tax provision for QUALCOMM pro forma and the tax provision related to estimated share-based compensation from the tax provision for total QUALCOMM (GAAP).

    (e) Free Cash Flow is calculated as net cash provided by operating activities less capital expenditures. Reconciliation of these amounts is included in the Condensed Consolidated Statements of Cash Flows and Marketable Securities for the three months ended September 24, 2006, included herein.

    (f) Tax benefits from stock options exercised during the quarter.

@@start.t8@@                                            QUALCOMM Incorporated
                                CONSOLIDATED STATEMENTS OF OPERATIONS
                THIS SCHEDULE IS TO ASSIST THE READER IN RECONCILING FROM
                          PRO FORMA RESULTS TO TOTAL QUALCOMM RESULTS
                                 (In US$ millions, except per share data)
                                                    (Unaudited)
                                                 Twelve Months Ended September 24, 2006
                                                 Estimated                                          Total
                              QUALCOMM    Share-Based    Tax  In-Process         QUALCOMM
                            Pro Forma  Compensation  Items      R&D        QSI    (GAAP)
      Revenues:
        Equipment
         and services  $4,776            $--          $--        $--         $--    $4,776
        Licensing
         and royalty
         fees                 2,750              --            --         --          --      2,750
         Total
          revenues         7,526              --            --         --          --      7,526
      Operating
        expenses:
        Cost of
         equipment
         and services
         revenues          2,141              41            --         --          --      2,182
        Research and
         development      1,236            216            --         22          64      1,538
        Selling,
         general and
         administrative    808            238            --         --          70      1,116
         Total
          operating
          expenses         4,185            495            --         22         134      4,836
      Operating
        income (loss)    3,341          (495)          --        (22)      (134)    2,690
      Investment
        income, net          465 (a)        --            --         --            1 (b)  466
      Income (loss)
        before income
        taxes                 3,806          (495)          --        (22)      (133)    3,156
      Income tax
        (expense)
        benefit          (1,002) (c)    175            40         --         101 (d) (686) (c)
      Net income
        (loss)              $2,804         $(320)         $40      $(22)      $(32)  $2,470
      Earnings (loss)
        per common
        share:
         Diluted            $1.64        $(0.19)      $0.02  $(0.01)  $(0.02)    $1.44
      Shares used in
        per share
        calculations:
         Diluted            1,711         1,711        1,711    1,711      1,711      1,711
      Supplemental
        Financial Data:
      Operating Cash
        Flow                 $3,746         $(403) (f)  $--        $--        $(90)  $3,253
      Operating Cash
        Flow as a % of
        Revenue                  50%                                                                      43%
      Free Cash
        Flow (e)          $3,180         $(403) (f)    --        $--      $(209)  $2,568
      Free Cash Flow
        as a % of
        Revenue                  42%                                                                      34%@@end@@

    (a) Includes US$410 million in interest and dividend income related to cash, cash equivalents and marketable securities, which are not part of the Company's strategic investment portfolio, and US$106 million in net realized gains on investments, partially offset by US$29 million in losses on derivative instruments, primarily related to the increase in the fair values of the put option liabilities related to our share repurchase program, US$20 million in other-than-temporary losses on investments and US$2 million of interest expense.

    (b) Includes US$30 million in net realized gains on investments and US$6 million in interest and dividend income, partially offset by US$29 million in equity in losses of investees, US$4 million in other-than-temporary losses on investments and US$2 million of interest expense.

    (c) The annual effective tax rate for fiscal 2006 for total QUALCOMM (GAAP) is approximately 22% and QUALCOMM pro forma is approximately 26%.

    (d) At fiscal year-end, the sum of the quarterly tax provisions for each column, including QSI, equals the annual tax provisions for each column computed in accordance with GAAP. The fiscal 2006 QSI tax provision includes tax benefits as a result of QSI's loss before taxes and realized gains on investments that increased our forecasted utilization of capital loss carryforwards.

    (e) Free Cash Flow is calculated as net cash provided by operating activities less capital expenditures. Reconciliation of these amounts is included in the Condensed Consolidated Statements of Cash Flows and Marketable Securities for the twelve months ended September 24, 2006, included herein.

    (f) Tax benefits from stock options exercised during the period.

@@start.t9@@                                            QUALCOMM Incorporated
      CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS AND MARKETABLE SECURITIES
      THIS SCHEDULE IS TO ASSIST THE READER IN RECONCILING PRO FORMA CASH FLOWS
      FROM CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES TO TOTAL QUALCOMM
                                                      CASH FLOWS
                                                (In US$ millions)
                                                    (Unaudited)
                                                    Three Months Ended September 24, 2006
                                                      Estimated                                          Total
                                  QUALCOMM    Share-Based      Tax  In-Process         QUALCOMM
                                  Pro Forma  Compensation  Items        R&D      QSI    (GAAP)
      Earnings (loss)
        before taxes,
        depreciation,
        amortization
        and other
        adjustments (1)      $1,019         $(27)          $--        $--      $(34)    $958
      Working
        capital
        changes and
        taxes paid (2)            (12)          --              --         --          6         (6)
      Net cash
        provided
        (used) by
        operating
        activities                1,007          (27)            --         --        (28)      952
      Capital
        expenditures              (100)          --              --         --        (29)    (129)
      Free cash flow
        (Net cash
        provided by
        operating
        activities
        less capital
        expenditures)              907          (27)            --         --        (57)      823
      Net additional
        share capital                69            --              --         --         --         69
      Repurchase and
        retirement of
        common stock              (335)          --              --         --         --      (335)
      Tax benefits
        from stock
        options
        exercised
        during the
        period                          --            27              --         --         --         27
      Dividends paid            (198)          --              --         --         --      (198)
      Other
        investments
        and
        acquisitions,
        net of cash
        acquired                      (13)          --              --         --         (4)      (17)
      Other items,
        net                                (8)          --              --         --          1         (7)
      Changes in
        fair value
        and other
        changes to
        marketable
        securities                  164            --              --         --          6        170
      Marketable
        securities
        pending
        settlement                  (61)          --              --         --         --        (61)
      Transfer from
        QSI (3)                         13            --              --         --        (13)        --
      Transfer to
        QSI (4)                        (61)          --              --         --         61         --
      Net increase
        (decrease) in
        cash, cash
        equivalents
        and
        marketable
        securities (5)          $477          $--            $--        $--        $(6)    $471
      (1)
        Reconciliation
        to GAAP:
        Net income
         (loss)                      $705         $(76)         $(16)      $(1)        $2      $614
        Share-based
         compensation,
         net of tax
         benefit                        --            76              --         --         --         76
        Other
         adjustments (a)         286          (27) (b)      16          1        (24)      252
        Net realized
         gains on
         marketable
         securities
         and other
         investments                (30)          --              --         --        (12)      (42)
        Net taxes paid              58            --              --         --         --         58
        Earnings (loss)
         before taxes,
         depreciation,
         amortization
         and other
         adjustments          $1,019         $(27)          $--        $--      $(34)    $958
      (2)
        Reconciliation
        to GAAP:
        Increase in
         cash resulting
         from changes
         in working
         capital                    $46          $--              $--        $--         $6        $52
        Net taxes paid          (58)          --                --         --         --        (58)
        Working capital
         changes and
         taxes paid              $(12)         $--              $--        $--         $6        $(6)
      (3) Cash from
        loan payments
        and sale of
        equity
        securities.
      (4) Funding for
        strategic debt
        and equity
        investments
        and other QSI
        operating
        expenses.
      (5)
        Reconciliation
        to GAAP cash
        flow statement:
        Net increase
         in cash and
         cash
         equivalents
         (GAAP)                    $452          $--              $--        $--        $--      $452
        Net sales and
         maturities of
         marketable
         securities                (78)          --                --         --        (12)      (90)
        Net increase
         in fair value
         and other
         changes to
         marketable
         securities                164            --                --         --          6        170
        Net decrease
         in marketable
         securities
         pending
         settlement                (61)          --                --         --         --        (61)
        Net increase
         (decrease)
         in cash, cash
         equivalents
         and
         marketable
         securities              $477          $--              $--        $--      $(6)      $471
        (a) See detail below.
        (b) Tax benefits from stock options exercised during the period.
                                                QUALCOMM Incorporated
      CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS AND MARKETABLE SECURITIES
      THIS SCHEDULE IS TO ASSIST THE READER IN RECONCILING PRO FORMA CASH FLOWS
        FROM CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES TO TOTAL QUALCOMM
                                                         CASH FLOWS
                                                  (In US$ millions)
                                                        (Unaudited)
                                            Twelve Months Ended September 24, 2006
                                                    Estimated                                            Total
                                 QUALCOMM    Share-Based      Tax  In-Process          QUALCOMM
                                 Pro Forma  Compensation  Items        R&D      QSI      (GAAP)
      Earnings (loss)
        before taxes,
        depreciation,
      amortization
        and other
        adjustments (1)  $3,961          $(403)         $--         $--    $(120)  $3,438
      Working capital
        changes and
        taxes paid (2)        (215)              --            --          --         30        (185)
      Net cash
        provided
        (used) by
        operating
        activities            3,746            (403)          --          --        (90)    3,253
      Capital
        expenditures          (566)              --            --          --      (119)      (685)
      Free cash flow
        (Net cash
        provided by
        operating
        activities
        less capital
        expenditures)        3,180            (403)          --          --      (209)    2,568
      Net additional
        share capital          692                --            --          --         --         692
      Repurchase and
        retirement of
        common stock        (1,500)              --            --          --         --    (1,500)
      Tax benefits
        from stock
        options
        exercised
        during the
        period                        --              403            --          --         --         403
      Proceeds from
        put options                11                --            --          --         --          11
      Dividends paid         (698)              --            --          --         --        (698)
      Other investments
        and acquisitions,
        net of cash
        acquired                 (389)              --            --          --        (18)      (407)
      Other items, net         (8)              --            --          --         10            2
      Changes in fair
        value and other
        changes to
        marketable
        securities                175                --            --          --         54         229
      Marketable
        securities
        pending
        settlement                (32)              --            --          --                      (32)
      Transfer from
        QSI (3)                      54                --            --          --        (54)         --
      Transfer to
        QSI (4)                  (231)              --            --          --        231          --
      Net increase
        in cash, cash
        equivalents
        and marketable
        securities (5)    $1,254              $--          $--         $--        $14    $1,268
      (1)
        Reconciliation
        to GAAP:
        Net income
        (loss)                 $2,804          $(320)         $40        $(22)    $(32)  $2,470
        Share-based
         compensation,
         net of tax
         benefit                    --              320            --          --         --         320
        Other
         adjustments (a)  1,091            (403) (b)  (40)         22        (58)        612
        Net realized
         gains on
         marketable
         securities
         and other
         investments          (106)              --            --          --        (30)      (136)
        Net taxes paid         172                --            --          --         --         172
        Earnings
         (loss) before
         taxes,
         depreciation,
         amortization
         and other
         adjustments        $3,961          $(403)         $--         $--    $(120)  $3,438
      (2)
        Reconciliation
        to GAAP:
        (Decrease)
         increase in
         cash resulting
         from changes
         in working
         capital                 $(43)            $--          $--         $--        $30        $(13)
        Net taxes paid        (172)              --            --          --         --        (172)
        Working capital
         changes and
         taxes paid          $(215)            $--          $--         $--        $30      $(185)
      (3) Cash from
        loan payments
        and sale of
        equity
        securities.
      (4) Funding for
        strategic debt
        and equity
        investments and
        other QSI
        operating
        expenses.
      (5)
        Reconciliation
        to GAAP cash
        flow statement:
        Net decrease in
         cash and cash
         equivalents
         (GAAP)                 $(463)            $--          $--         $--        $--      $(463)
        Net purchases
         and maturities
         of marketable
         securities          1,574                --            --          --        (40)    1,534
        Net increase in
         fair value and
         other changes to
         marketable
         securities              175                --            --          --         54         229
        Net decrease in
         marketable
         securities
         pending
         settlement              (32)              --            --          --         --         (32)
        Net increase in
         cash, cash
         equivalents
         and marketable
         securities         $1,254              $--          $--         $--        $14    $1,268
      (a)  See detail below.
      (b)  Tax benefits from stock options exercised during the period.
                                            QUALCOMM Incorporated
              SUPPLEMENTAL DETAIL TO THE CONDENSED CONSOLIDATED STATEMENTS OF
                                CASH FLOWS AND MARKETABLE SECURITIES
                                                (In US$ millions)
                                                    (Unaudited)
                                                Three Months Ended September 24, 2006
                                                      Estimated                                          Total
                                  QUALCOMM    Share-Based      Tax  In-Process         QUALCOMM
                                  Pro Forma  Compensation  Items      R&D        QSI      (GAAP)
      (a) Other
        adjustments
        are comprised
        of:
      Depreciation
        and
        amortization              $79              $--          $--        $--         $3         $82
      Losses on
        derivative
        instruments                 11                --            --         --         --          11
      Other-than-
        temporary
        losses on
        marketable
        securities
        and other
        investments                  3                --            --         --         --            3
      Equity in
        earnings of
        investees                    --                --            --         --         (1)         (1)
      Tax benefits
        from stock
        options
        exercised
        during the
        period                         --              (27)          --         --         --         (27)
      Non-cash
        income tax
        expense
        (benefit)                  199                --            16         --        (25)        190
      Other items,
        net                              (6)              --            --          1         (1)         (6)
      Total other
        adjustments              $286            $(27)         $16         $1      $(24)        $252
                                                 Twelve Months Ended September 24, 2006
                                                    Estimated                                              Total
                                 QUALCOMM    Share-Based      Tax  In-Process          QUALCOMM
                                 Pro Forma  Compensation  Items      R&D         QSI    (GAAP)
      (a) Other
        adjustments
        are comprised
        of:
      Depreciation
        and
        amortization            $263              $--          $--        $--         $9        $272
      Losses on
        derivative
        instruments                 29                --            --         --         --          29
      Other-than-
        temporary
        losses on
        marketable
        securities
        and other
        investments                 20                --            --         --          4          24
      Equity in
        losses of
        investees                    --                --            --         --         29          29
      Tax benefits
        from stock
        options
        exercised
        during the
        period                         --            (403)          --         --         --        (403)
      Non-cash
        income tax
        expense
        (benefit)                  830                --          (40)        --      (101)        689
      Other items,
        net                            (51)              --            --         22          1         (28)
      Total other
        adjustments          $1,091          $(403)        $(40)      $22      $(58)      $612
            RECONCILIATION OF PRIOR YEAR PRO FORMA FREE CASH FLOW TO NET CASH
                                                         PROVIDED
                                              BY OPERATING ACTIVITIES
                                                  (In US$ millions)
                                                        (Unaudited)
                                                              Three Months Ended September 25, 2005
                                                                                                          Total
                                                                  QUALCOMM                        QUALCOMM
                                                                  Pro Forma         QSI         (GAAP)
      Net cash provided by operating
        activities                                              $964            $(19)         $945
      Capital expenditures                                (126)            (12)         (138)
      Free cash flow (Net cash provided by
        operating activities less capital
        expenditures)                                         $838            $(31)         $807
                                                            Twelve Months Ended September 25, 2005
                                                                                                         Total
                                                                  QUALCOMM                        QUALCOMM
                                                                  Pro Forma         QSI         (GAAP)
      Net cash provided by operating
        activities                                          $2,722            $(36)      $2,686
      Capital expenditures                                (482)            (94)         (576)
      Free cash flow (Net cash provided by
        operating activities less capital
        expenditures)                                      $2,240          $(130)      $2,110
                                                QUALCOMM Incorporated
                                          CONSOLIDATED BALANCE SHEETS
                                    (In millions, except per share data)
                                                            ASSETS
                                                                          September 24,      September 25,
                                                                                  2006                  2005
      Current assets:
        Cash and cash equivalents                                $1,607                $2,070
        Marketable securities                                        4,114                 4,478
        Accounts receivable, net                                      700                    544
        Inventories                                                          250                    177
        Deferred tax assets                                              235                    343
        Other current assets                                            143                    179
         Total current assets                                        7,049                 7,791
      Marketable securities                                         4,228                 2,133
      Property, plant and equipment, net                    1,482                 1,022
      Goodwill                                                              1,230                    571
      Deferred tax assets                                                512                    444
      Other assets                                                          707                    518
      Total assets                                                    $15,208              $12,479
                                    LIABILITIES AND STOCKHOLDERS' EQUITY
      Current liabilities:
        Trade accounts payable                                        $420                  $376
        Payroll and other benefits related
         liabilities                                                         273                    196
        Unearned revenue                                                  197                    163
        Other current liabilities                                    532                    335
         Total current liabilities                                1,422                 1,070
      Unearned revenue                                                    141                    146
      Other liabilities                                                  239                    144
         Total liabilities                                            1,802                 1,360
      Stockholders' equity:
        Preferred stock, $0.0001 par value;
         issuable in series; 8 shares authorized;
         none outstanding at September 24, 2006
         and September 25, 2005, respectively                  --                      --
        Common stock, $0.0001 par value;
         6,000 shares authorized; 1,652 and
         1,640 shares issued and outstanding at
         September 24, 2006 and September 25, 2005,
         respectively                                                         --                      --
        Paid-in capital                                                 7,242                 6,753
        Retained earnings                                              6,100                 4,328
        Accumulated other comprehensive income                 64                      38
         Total stockholders' equity                            13,406                11,119
         Total liabilities and stockholders'
          equity                                                         $15,208              $12,479
                                                QUALCOMM Incorporated
                                  CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (In US$ millions, except per share data)
                                        Three Months Ended                Twelve Months Ended
                                September 24,  September 25,  September 24, September 25,
                                      2006                 2005                2006                2005
      Revenues:
        Equipment and
         services                $1,264            $1,035              $4,776          $3,744
        Licensing and
         royalty fees              735                 525                2,750            1,929
         Total revenues        1,999              1,560                7,526            5,673
      Operating expenses:
        Cost of
         equipment and
         services revenues      586                 441                2,182            1,645
        Research and
         development                411                 271                1,538            1,011
        Selling, general
         and administrative    321                 178                1,116                631
         Total operating
          expenses                1,318                 890                4,836            3,287
      Operating income          681                 670                2,690            2,386
      Investment income,
        net                              129                 116                  466                423
      Income before
        income taxes                810                 786                3,156            2,809
      Income tax expense      (196)              (248)                (686)            (666)
      Net income                  $614                $538              $2,470          $2,143
      Basic earnings per
        common share            $0.37              $0.33                $1.49            $1.31
      Diluted earnings per
        common share            $0.36              $0.32                $1.44            $1.27
      Shares used in per
        share calculations:
         Basic                      1,652              1,634                1,659            1,638
         Diluted                  1,693              1,686                1,711            1,694
      Dividends per share
        paid                         $0.12              $0.07                $0.42            $0.32
      Dividends per share
        announced                 $0.12              $0.07                $0.42            $0.32
      Web site: http://www.qualcomm.com
                      http://investor.qualcomm.com/results.cfm@@end@@

ots Originaltext: Qualcomm Incorporated
Im Internet recherchierbar: http://www.presseportal.ch

Contact:
Bill Davidson, Vice President of Global Marketing and Investor
Relations of QUALCOMM Incorporated, +1-858-658-4813, or fax,
+1-858-651-9303, ir@qualcomm.com



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