Qualcomm Incorporated

QUALCOMM Announces First Quarter Fiscal 2006 Results

    San Diego (ots/PRNewswire) -

      - Revenues US$1.74 Billion, Diluted EPS US$0.36
      - Pro Forma Revenues US$1.74 Billion, Diluted EPS US$0.39
      - Reaffirms Fiscal 2006 Guidance

    QUALCOMM Incorporated (Nasdaq: QCOM) today announced results for its first quarter of fiscal 2006 ended December 25, 2005.

    Total QUALCOMM (GAAP) First Quarter Results:

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

@@start.t1@@      - Revenues: US$1.74 billion, up 25 percent year-over-year and 12 percent
      - Net income: US$620 million, up 21 percent year-over-year and 15 percent
      - Diluted earnings per share: US$0.36, up 20 percent year-over-year and
         13 percent sequentially.
      - Effective tax rate: 16 percent for the quarter. Fiscal 2006 estimated
         tax rate of approximately 22 percent.
      - Estimated share-based compensation: US$82 million, net of tax.
      - Operating cash flow: US$596 million, up 50 percent year-over-year;
         34 percent of revenue.
      - Return of capital to stockholders: In the quarter, we announced a new
         US$2.5 billion stock repurchase program to replace the prior program
         which had US$1 billion of repurchase authority remaining, and announced
         dividends totaling US$148 million, or US$0.09 per share, which were
         paid on January 4, 2006.@@end@@

    QUALCOMM Pro Forma First Quarter Results:

    Pro forma results exclude the QUALCOMM Strategic Initiatives (QSI) segment, estimated share-based compensation and tax benefits related to prior years.

@@start.t2@@      - Revenues: US$1.74 billion, up 25 percent year-over-year and 12 percent
      - Net income: US$667 million, up 41 percent year-over-year and 23 percent
      - Diluted earnings per share: US$0.39, up 39 percent year-over-year and
         22 percent sequentially, excludes US$0.01 loss per share attributable
         to the QSI segment, US$0.05 loss per share attributable to estimated
         share-based compensation and US$0.03 earnings per share attributable to
         tax benefits related to prior years.
      - Effective tax rate: 26 percent for the quarter and estimated for fiscal
      - Free cash flow: US$531 million, up 93 percent year-over-year; 30
         percent of revenue. (Defined as net cash from operating activities less
         capital expenditures)@@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.

    "We delivered record first quarter revenue and strong year-over-year growth led by demand for our chips," said Dr. Paul E. Jacobs, CEO of QUALCOMM. "I'm pleased to see continued execution on our product roadmaps as we partner with manufacturers, operators and developers to bring new innovations to market. In emerging wireless markets like China and India, demand for low-end CDMA phones is increasing; in more established markets like the United States, South Korea, Japan and Europe, subscribers continue to migrate and upgrade to feature rich 3G devices and services."

    "Looking forward, we expect continued growth of CDMA2000(R) 1xEV-DO products in North America, Japan, South Korea and Latin America. We remain encouraged by the consumer uptake of WCDMA services in Japan and Europe, and will continue working closely with operators during their ongoing WCDMA and HSDPA network deployment and optimization efforts. We remain well positioned to capitalize on the growth of 3G, thanks to the extensive value chain of partnerships that exists to rapidly bring new innovations to consumers and enterprise customers."

    "QUALCOMM has a proven history of bringing the most advanced wireless technologies to market for large-scale deployments. The recent closure of the Flarion acquisition enhances QUALCOMM's strong position in OFDMA and further demonstrates our commitment to consistently add to our intellectual property (IP) portfolio through internal research and development and acquisition. Our research and development activities combined with our unique business model help enable our partners to supply wireless products and services with new features and functionality that drive incremental revenue growth for the industry."

    Cash and Marketable Securities

    QUALCOMM's cash, cash equivalents and marketable securities totaled approximately US$9.4 billion at the end of the first quarter of fiscal 2006, compared to US$8.7 billion at the end of the prior quarter and US$8.0 billion a year ago. On January 12, 2006, we announced a quarterly cash dividend of US$0.09 per common share, payable on March 24, 2006 to stockholders of record on February 24, 2006.

    Estimated Share-Based Compensation

    In the first quarter of fiscal 2006, we adopted 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. Historically, this had been identified in the footnote disclosures to our financial statements in accordance with FAS 123. We have implemented FAS 123R using the modified prospective method. Under this method, prior periods are not revised for comparative purposes. Our share-based compensation is estimated utilizing a lattice binomial option valuation model and has been classified in the appropriate categories of our operating expenses. However, estimated share-based compensation is not allocated to our business segments because we do not consider it relevant when evaluating the operating performance of our business segments, and is also excluded from QUALCOMM pro forma results. Total QUALCOMM (GAAP) net income for the first quarter of fiscal 2006 included estimated share-based compensation of US$82 million, net of tax, or US$0.05 per share.

@@start.t3@@      Research and Development
        (US$ in millions)                                      Estimated                    Total
                                                  QUALCOMM      Share-Based                QUALCOMM
                                                 Pro Forma    Compensation      QSI        (GAAP)
        First quarter fiscal 2006        $273                $52          $15         $340
        First quarter fiscal 2005        $219                $--            $9         $228
        Year-over-year change                 25%                                67%          49%@@end@@

    Pro forma research and development (R&D) expenses increased 25 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 access and multimode, multiband, multinetwork products and technologies, including CDMA2000, 1xEV-DO, WCDMA, HSDPA, GSM/GPRS/EDGE and OFDMA, and the development of our iMoD display products. QSI R&D expenses increased year-over-year primarily due to increased expenses related to MediaFLO USA.

@@start.t4@@      Selling, General and Administrative
        (US$ in millions)                                      Estimated                    Total
                                                  QUALCOMM      Share-Based                QUALCOMM
                                                 Pro Forma    Compensation      QSI        (GAAP)
        First quarter fiscal 2006      $168                  $58          $13         $239
        First quarter fiscal 2005      $143                  $--            $5         $148
        Year-over-year change                17%                                 160%          61%@@end@@

    Pro forma selling, general and administrative (SG&A) expenses increased 17 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 and patent activities. QSI SG&A expenses increased year-over-year primarily due to increased expenses related to MediaFLO USA.

    Effective Income Tax Rate

    Our fiscal 2006 effective income tax rate is estimated to be approximately 22 percent, compared to 24 percent in fiscal 2005. Our fiscal  2006 QUALCOMM pro forma effective tax rate is estimated to be approximately  26 percent, compared to 30 percent in fiscal 2005. The decrease in our fiscal  2006 estimated annual effective tax rates compared to our fiscal 2005 tax rates for both total QUALCOMM (GAAP) and QUALCOMM pro forma is primarily the  result of projected increased foreign earnings in 2006 taxed at a lower rate.  A benefit of approximately US$0.03 per share was recorded in the first  quarter of fiscal 2006 related to the expected impact of prior year tax audits completed during the quarter. This benefit reduced the rate for the  first quarter of fiscal 2006 for total QUALCOMM (GAAP) to approximately 16  percent. For fiscal 2006 QUALCOMM pro forma presentation we excluded this  US$0.03 diluted earnings per share benefit to provide a clearer understanding  of our ongoing tax rate and after tax earnings.

    QUALCOMM Strategic Initiatives

    The QSI segment includes our strategic investments and related income and expenses. Total QUALCOMM (GAAP) results for the first quarter of fiscal 2006 include US$0.01 loss per share for the QSI segment compared to US$0.02 diluted earnings per share for the first quarter of fiscal 2005. The first quarter fiscal 2006 QSI results include US$28 million of operating expenses, primarily related to MediaFLO USA, and US$20 million of equity in losses of investees.

    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.

    Although estimated share-based compensation is included in the business outlook for total QUALCOMM (GAAP), actual estimated share-based compensation recorded under FAS 123R 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 variable factors. A pro forma business outlook is provided below consistent with the presentation of pro forma results provided elsewhere herein and also excludes in-process R&D expense related to acquisitions completed in the second  quarter of fiscal 2006.

    We continue to expect strong revenue, earnings and cash flow growth in 2006 and are reaffirming our fiscal 2006 revenue and earnings guidance for total QUALCOMM (GAAP), QUALCOMM pro forma and our 2006 calendar year handset guidance.

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

@@start.t5@@                                              Business Outlook Summary
        All figures in US$
                                                                                                Current Guidance
                                                                            Q2'05                    Q2'06
                                                                         Results                 Estimates
        QUALCOMM Pro Forma
        Revenues                                                      $1.37B         $1.63B - $1.73B
        Year-over-year change                                                  increase 19% - 27%
        Diluted earnings per
         share (EPS)                                                 $0.29          $0.35 - $0.37
        Year-over-year change                                                  increase 21% - 28%
        Total QUALCOMM (GAAP)
        Revenues                                                      $1.37B         $1.63B - $1.73B
        Year-over-year change                                                  increase 19% - 27%
        Diluted earnings per share (EPS)                 $0.31          $0.28 - $0.30
        Year-over-year change                                                    decrease 3% - 10%
        Diluted EPS attributable to
         in-process R&D                                                n/a                  ($0.01)
        Diluted EPS attributable to QSI                ($0.01)                  ($0.01)
        Diluted EPS attributable to
         estimated share-based compensation                n/a                  ($0.05)
        EPS attributable to tax benefit
         related to prior years                                $0.03                      n/a
        MSM Shipments                                        approx. 37M                44M - 46M
        CDMA/WCDMA handset units shipped         approx. 52M(i)          59M - 61M(i)
        CDMA/WCDMA handset unit wholesale
         average selling price                        approx. $207(i)                  $209(i)
        (i)Shipments in Dec. quarter, reported in Mar. quarter
                                                                        Prior                      Current
                                                                    Guidance                  Guidance
                                            FY 2005              FY 2006                    FY 2006
                                            Results            Estimates                 Estimates
        QUALCOMM Pro Forma
        Revenues                         $5.67B        $6.7B - $7.1B            $6.7B - $7.1B
         change                                        increase 18% - 25%      increase 18% - 25%
        Diluted earnings
         per share (EPS)              $1.16         $1.43 - $1.47          $1.43 - $1.47
         change                                        increase 23% - 27%      increase 23% - 27%
        Total QUALCOMM (GAAP)
        Revenues                         $5.67B         $6.7B - $7.1B          $6.7B - $7.1B
         change                                        increase 18% - 25%      increase 18% - 25%
        Diluted earnings
         per share (EPS) (1)        $1.26         $1.19 - $1.23          $1.19 - $1.23
         change                                          decrease 2% - 6%        decrease 2% - 6%
        Diluted EPS
         attributable to
         in-process R&D                  n/a                    n/a                      ($0.01)
        Diluted EPS
         attributable to QSI        $0.06                ($0.06)                    ($0.06)
        Diluted EPS
         to estimated
         compensation                      n/a                ($0.18)                    ($0.20)
        Diluted EPS
         to tax benefit
         related to
         prior years                    $0.04                 $0.00                        $0.03
        Fiscal year(ii)
         handset unit
         wholesale average
         selling price         approx. $215            approx. $210          approx. $210
        (ii)Shipments in Sep. to June quarters, reported in Dec. to Sep.
        CALENDAR YEAR Handset Estimates
                                      Prior            Current              Prior            Current
                                    Guidance         Guidance          Guidance          Guidance
          CDMA/WCDMA         Calendar         Calendar          Calendar          Calendar
         handset unit          2005                2005                 2006                 2006
          shipments         Estimates        Estimates         Estimates         Estimates
        March quarter
         actuals          approx. 43M    approx. 43M    not provided    not provided
        June quarter
         actuals          approx. 48M    approx. 48M    not provided    not provided
         quarter            51M - 53M      approx. 52M    not provided    not provided
         quarter         not provided        59M - 61M    not provided    not provided
        Calendar year
         range              200M - 205M    202M - 204M      255M - 270M      255M - 270M
                                    Midpoint         Midpoint          Midpoint          Midpoint
        CDMA/WCDMA units         202M                203M                 262M                 262M
        CDMA units                  158M                158M                 176M                 176M
        WCDMA units                  44M                 45M                  86M                  86M
        (1) The dilution per share related to the acquired in-process R&D and
              the increased estimated share-based compensation for fiscal 2006
              are offset by tax benefits related to prior years, and as a result,
              fiscal 2006 guidance for total QUALCOMM has not changed from our
              prior guidance.@@end@@

@@start.t6@@      Results of Business Segments
      (US dollars in millions, except per share data):
        First Quarter - Fiscal Year 2006
                                                                                         Reconciling        Pro
        Segments                                 QCT         QTL      QWI      Items (1)        Forma
        Revenues                              $1,033      $564    $166         $(22)         $1,741
        Change from prior year              19%        41%        4%         N/M                 25%
        Change from prior quarter         13%        13%      (2%)        N/M                 12%
        EBT                                         $300      $517      $17          $72              $906
        Change from prior year              24%        44%        6%         N/M                 36%
        Change from prior quarter         13%        15%    (19%)        N/M                 11%
        Net income (loss)                                                                                 667
        Change from prior year                                                                          41%
        Change from prior quarter                                                                      23%
        Diluted EPS                                                                                        $0.39
        Change from prior year                                                                          39%
        Change from prior quarter                                                                      22%
        Diluted shares used                                                                          1,702
        First Quarter - Fiscal Year 2006
                                                      Estimated                                            Total
                                                    Share-Based          Tax                        QUALCOMM
                                                 Compensation(2)  Adjustment(3)    QSI      (GAAP)
        Revenues                                      $--                 $--              $--      $1,741
        Change from prior year                 --                  --                --            25%
        Change from prior quarter            --                  --                --            12%
        EBT                                          $(122)                $--            $(48)        $736
        Change from prior year                N/M                  --              N/M              5%
        Change from prior quarter          N/M                  --              N/M          (6%)
        Net income (loss)                        (82)                 56              (21)         620
        Change from prior year                N/M                 N/M              N/M            21%
        Change from prior quarter          N/M                 N/M              N/M            15%
        Diluted EPS                            $(0.05)            $0.03         $(0.01)      $0.36
        Change from prior year                N/M                 N/M              N/M            20%
        Change from prior quarter          N/M                 N/M              N/M            13%
        Diluted shares used                 1,702              1,702          1,702        1,702
        Fourth Quarter - Fiscal Year 2005
                                                                 Reconciling  QUALCOMM          QUALCOMM
        Segments                 QCT      QTL    QWI    Items(1)    Pro Forma    QSI  (GAAP)
        Revenues                $912    $497  $170      $(19)          $1,560      $--  $1,560
        EBT                         266      451      21         75                 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 2005
                                                    Reconciling                                        Total
                                                         Items         QUALCOMM                    QUALCOMM
      Segments        QCT    QTL    QWI        (1)         Pro Forma        QSI         (GAAP)
      Revenues        $865  $400  $159    $(34)        $1,390            $--         $1,390
      EBT                 242    358      16        48              664              40            $704
      Net income                                                        474              39            $513
      Diluted EPS                                                  $0.28         $0.02          $0.30
        shares used                                                 1,704         1,704          1,704
      Second Quarter -- Fiscal Year 2005
      Segments                                              QCT         QTL         QWI         Items(1)
      Revenues                                            $746        $493        $151            $(25)
      EBT                                                      158         448            8                52
      Net income (loss)
      Diluted EPS
      Diluted shares used
      Second Quarter -- Fiscal Year 2005
                                         QUALCOMM            Tax                                  QUALCOMM
      Segments                    Pro Forma      Adjustments(4)          QSI         (GAAP)
      Revenues                      $1,365                 $--                  $--          $1,365
      EBT                                  666                  --                  (33)            $633
      Net income (loss)            487                  55                  (10)            $532
      Diluted EPS                  $0.29              $0.03              $(0.01)          $0.31
      Diluted shares used      1,704              1,704                1,704            1,704
        Twelve Months -- Fiscal Year 2005
        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
                                                                      Tax                                 Total
        Segments                        QUALCOMM      Adjustments                        QUALCOMM
                                          Pro Forma         (4)(5)              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@@

@@start.t7@@      (1) Reconciling items related to revenues consist primarily of other
            non-reportable 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, non-reportable 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 first quarter of fiscal 2006, the Company recorded a
            US$56 million tax benefit, or US$0.03 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 benefit attributable to prior years.
      (4) 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 the tax
            benefit attributable to fiscal 2004.
      (5) 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 benefit attributable to fiscal 2004.
      N/M - Not Meaningful
      Sums may not equal totals due to rounding.@@end@@

@@start.t8@@      Business Segment Information
        QUALCOMM CDMA Technologies (QCT)
      - QCT shipped a new record of approximately 47 million MSM chips to
         customers worldwide during the first quarter of fiscal 2006, compared
         to approximately 39 million units in the same quarter of fiscal 2005
         and approximately 40 million units in the fourth quarter of fiscal
         2005. As previously reported, we have surpassed 2 billion cumulative
         chip shipments since we shipped the first CDMA MSM chip in 1996.
      - We announced our DMMX (DO Multicarrier Multilink eXtensions) and HMMX
         (HSDPA Multicarrier Multilink eXtensions) platforms to support the
         long-term roadmaps of EV-DO and HSDPA.
      - The number of 3G CDMA-based devices commercially available
         incorporating our MSMs continues to grow at an accelerating pace, with
         154 1xEV-DO and 55 WCDMA commercial advanced 3G devices launched to
      - We actively supported the world's first widespread High-Speed Downlink
         Packet Access (HSDPA) deployment recently launched by Cingular Wireless
         in the United States in December 2005. We worked with several leading
         device manufacturers to develop and validate multiple mobile devices
         for the HSDPA network, including certain models based on our
         MSM6275(TM) chipset.
      QUALCOMM Technology Licensing (QTL)
      - In the first quarter of fiscal 2006, three new licensees entered into
         CDMA subscriber equipment license agreements. One of the three
         agreements was with a WCDMA licensee in China, bringing the total WCDMA
         agreements with Chinese manufacturers to seven, all at our standard
         royalty rates.
      - Licensee information for the fourth quarter of fiscal 2005 as reported
         by licensees in the first quarter of fiscal 2006:
         -- Worldwide shipments of approximately 52 million CDMA2000 and WCDMA
              subscriber units at an average selling price of approximately
              US$215 were reported.
         -- We estimate WCDMA royalties contributed approximately 40 percent of
              total royalties reported compared to approximately 32 percent in
              the year ago quarter and approximately 41 percent reported in the
              prior quarter.
         -- 22 handset suppliers actively supplied WCDMA products, compared to
              17 reported in the fourth quarter of fiscal 2005.
         -- 48 handset suppliers actively supplied CDMA2000 1x and 1xEV-DO
              products, compared to 46 reported in the fourth quarter of
              fiscal 2005.
      QUALCOMM Wireless & Internet Group (QWI)
      QUALCOMM Internet Services (QIS)
      - As of January 25, 2006, 59 wireless operators were offering BREW
         services in 28 countries, including new customers obtained as part of
         our ELATA acquisition.
      - Through December 2005, three operators, including ALLTEL, O2 and Sprint
         have entered into agreements to license the uiOne user interface
      QUALCOMM Wireless Business Solutions(R) (QWBS)
      - We shipped approximately 11,800 satellite-based systems (OmniTRACS(R),
         EutelTRACS(TM) and TruckMAIL(TM)) in the first quarter of fiscal 2006
         compared to approximately 13,300 in the first quarter of fiscal 2005
         and approximately 11,000 in the fourth quarter of fiscal 2005. This
         brings the cumulative total satellite-based systems shipped worldwide
         to more than 578,000.
      - We shipped approximately 15,100 terrestrial-based systems
         (OmniExpress(R), GlobalTRACS(R) and T2 Untethered TrailerTRACS(TM)) in
         the first quarter of fiscal 2006 compared to approximately 11,600
         terrestrial-based systems in the first quarter of fiscal 2005 and
         approximately 17,500 terrestrial-based systems in the fourth quarter of
         fiscal 2005. This brings the cumulative total terrestrial-based
         systems shipped worldwide to more than 100,000.
      QUALCOMM Strategic Initiatives (QSI)
      MediaFLO USA
      - In December 2005, we announced plans to work with Verizon Wireless to
         bring its customers real-time mobile video over the MediaFLO(TM) USA
         network. We expect Verizon Wireless will be the first wireless service
         provider to use the MediaFLO USA network to deliver mobile TV services.
      - In January 2006, we conducted a live, over-the-air demonstration of FLO
         Technology with LG Electronics MobileComm (LG) and Samsung Electronics
         Co., Ltd., during the 2006 International Consumer Electronics Show in
         Las Vegas. The demonstrations were the first featuring FLO Technology
         on handsets from major device manufacturers.
      - In the second quarter of fiscal 2006, we completed the acquisition of
         Flarion Technologies, Inc., a developer of OFDMA technology.
      - In the second quarter of fiscal 2006 we also completed the acquisition
         of Berkana Wireless Inc., a fabless semiconductor company, that
         provides complementary metal oxide semiconductor (CMOS) radio frequency
         integrated circuits (RFICs).@@end@@

    Conference Call

    QUALCOMM's first quarter fiscal 2006 earnings conference call will be broadcast live on January 25, 2006 beginning at 2:30 p.m. Pacific Standard Time 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 January 25, 2006 beginning at approximately 5:30 p.m. (PST) through February 8, 2006 at 5:30 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 4046245. 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.

    QUALCOMM Incorporated (www.qualcomm.com) is a leader in developing and delivering innovative digital wireless communications products and services based on the Company's CDMA digital technology. Headquartered in San Diego, Calif., QUALCOMM is included in the S&P 500 Index and is a 2005 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 excludes the QUALCOMM Strategic Initiatives (QSI) segment, estimated share-based compensation, tax benefits related to prior years, and acquired in-process  R&D expense. Pro forma financial measures used by the Company's management include pro forma revenues, pro forma cost of equipment and services revenues, pro forma R&D expenses, pro forma SG&A expenses, pro forma total operating expenses, pro forma operating income (loss), pro forma net  investment income, pro forma income before income taxes, pro forma income tax  expense, pro forma effective tax rate, pro forma diluted earnings per share,  pro forma operating cash flow, and pro forma free cash flow. Pro forma information is used by management to evaluate, assess and benchmark the  Company's operating results, and the Company believes that pro forma  reporting represents relevant and useful information that is widely used by  analysts, investors and other interested parties in its industry.

    The Company's management uses pro forma financial information excluding QSI and share-based compensation to evaluate, assess and benchmark the Company's operating results because the effects of fluctuations in the Value of investments and share-based compensation are viewed by management as unrelated to the Company's operational performance, and share-based compensation is not an expense that requires or will require cash payment by the Company. QSI results relate to strategic investments for which the Company has exit strategies of varying durations. The Company believes That financial data excluding the QSI segment and the estimate of share-based compensation provides investors with meaningful information about the Company's ongoing core operating businesses, including QUALCOMM CDMA Technologies, QUALCOMM Technology Licensing and QUALCOMM Wireless & Internet. This presentation is also useful to investors in evaluating performance on a basis that is consistent and comparable with periods prior to the adoption of FAS 123R in the first quarter of fiscal 2006.

    The Company presents pro forma results excluding certain tax benefits related to prior years to provide management, as well as investors, a clearer understanding of its ongoing tax rate and after tax earnings. The Company believes that this presentation is useful in evaluating performance on a consistent and comparable basis.

    The Company presents pro forma financial information for fiscal 2006 excluding acquired in-process R&D expense to evaluate, assess and benchmark the Company's operating performance because acquired in-process R&D expense  is viewed by management as unrelated to the operating activities of the Company's ongoing core businesses. Management believes that this presentation  Is useful to evaluate performance on a consistent and comparable basis.

    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 to fund operations, which result from cash management strategies designed to increase yields. However, 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." Since the GAAP statements of cash flows reconcile the Company's beginning and ending cash  and cash equivalents balances, the purchases and sales of marketable securities are presented as inflows and outflows. For purposes of 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. If required, most of such investments could be  settled relatively quickly as additional cash resources are needed. The  Company believes that this non-GAAP presentation is a helpful measure of the  Company's liquidity.

    The Company presents free cash flow, defined as net cash provided by operating activities less capital expenditures, for the first quarter of fiscal 2006 and 2005, 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 and investors use 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 technology; as  well as the other risks detailed from time-to-time in the Company's SEC  reports.

    QUALCOMM, Mobile Station Modem, MSM, FLO, MediaFLO, MSM6275, OmniTRACS, EutelTRACS, TruckMAIL, OmniExpress, GlobalTRACS, T2 Untethered TrailerTRACS and BREW are trademarks and/or service marks of QUALCOMM Incorporated. CDMA2000(R) is a registered trademark of the Telecommunications Industry Association. All other trademarks are the property of their respective owners.

@@start.t9@@      QUALCOMM Contact:
      Bill Davidson
      Vice President, Investor Relations
      +1-858-658-4813 (ph) +1-858-651-9303 (fax)
      e-mail: ir@qualcomm.com
                                                QUALCOMM Incorporated
                                    (In US$ millions, except per share data)
                                            Three Months Ended December 25, 2005
                                                         Estimated                                      Total
                                  QUALCOMM      Share-Based          Tax                  QUALCOMM
                                 Pro Forma    Compensation    Adjustment    QSI        (GAAP)
         Equipment and
          services              $1,150                 $--              $--        $--      $1,150
         Licensing and
          royalty fees            591                  --                --         --          591
                                        1,741                  --                --         --        1,741
        Operating expenses:
         Cost of equipment
          and services
          revenues                  505                  12                --         --          517
         Research and
          development              273                  52                --         15          340
         Selling, general
          administrative         168                  58                --         13          239
         Total operating
          expenses                  946                 122                --         28        1,096
        Operating income
         (loss)                        795                (122)                         (28)         645
        Investment income
         (expense), net          111(a)            --                 --        (20)(b)      91
        Income (loss) before
         income taxes              906                (122)              --        (48)         736
        Income tax (expense)
         benefit                    (239)(c)            40                56         27        (116)(c)
        Net income (loss)      $667                $(82)            $56      $(21)        $620
        Earnings (loss)
         per common share:
          Diluted                 $0.39            $(0.05)         $0.03  $(0.01)      $0.36
        Shares used in
         per share
          Diluted                 1,702              1,702          1,702    1,702        1,702
        Operating Cash Flow  $713              $(101)(e)        $--      $(16)        $596
        Operating Cash Flow
         as a % of Revenue        41%                                                                 34%
        Free Cash Flow (d)    $531              $(101)(e)        $--      $(47)        $383
        Free Cash Flow as
         a % of Revenue            30%                                                                22%@@end@@

@@start.t10@@      (a) Includes US$91 million in interest income related to cash, cash
            equivalents and marketable securities, which are not part of the
            Company's strategic investment portfolio, US$20 million in net
            realized gains on marketable securities and US$4 million in net gains
            on derivative instruments, partially offset by US$3 million in other-
            than-temporary losses on marketable securities and US$1 million of
            interest expense.
      (b) Includes US$20 million in equity in losses of investees.
      (c) The first quarter of fiscal 2006 tax rate of 16% for total QUALCOMM
            (GAAP) is lower than the estimated annual effective tax rate of 22%
            due primarily to US$56 million of tax benefits recorded in the first
            quarter related to the expected impact of prior year tax audits
            completed in the quarter. The fiscal year 2006 estimated effective
            tax rate is approximately 22% for total QUALCOMM (GAAP) and
            approximately 26% for QUALCOMM pro forma.
      (d) 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
            December 25, 2005, included herein.
      (e) Tax benefits from stock options exercised during the quarter.@@end@@

@@start.t11@@                                            QUALCOMM Incorporated
                                                      CASH FLOWS
                                                (In US$ millions)
                                                Three Months Ended December 25, 2005
                                                         Estimated                                      Total
                                      QUALCOMM  Share-Based          Tax                  QUALCOMM
                                    Pro Forma  Compensation    Adjustment  QSI      (GAAP)
        Earnings before
         and other
         adjustments (1)          $927        $(101)(b)         $--        $(27)        $799
        Working capital
         changes and taxes
         paid (2)                      (214)          --                 --          11         (203)
        Net cash provided
         (used) by operating
         activities                    713         (101)                --         (16)         596
         expenditures                (182)          --                 --         (31)        (213)
        Free cash flow
         (Net cash provided
         by operating
         activities less
         expenditures)                531         (101)                --         (47)         383
        Net additional
         share capital                181            --                 --            --         181
        Tax benefits
         from stock
         options exercised
         during the quarter         --          101(b)            --            --         101
        Other investments
         and acquisitions            (4)          --                 --            (2)         (6)
        Other items, net                3            --                 --              3            6
        Changes in fair
         value and other
         changes to
         securities                      49            --                 --              6          55
         securities pending
         settlement                      (3)          --                 --            --          (3)
        Transfer from
         QSI (3)                            8            --                 --            (8)         --
        Transfer to
         QSI (4)                         (54)          --                 --            54          --
        Net increase in
         cash, cash
         equivalents and
         securities (5)            $711          $--                $--            $6        $717
        (1) Reconciliation
                to GAAP:
                 Net income
                  (loss)                $667         $(82)              $56         $(21)      $620
                  compensation         --            82                 --            --          82
                 Other non-cash
                  adjustments (a)  268         (101)(b)         (56)          (6)        105
                 Net realized
                  gains on
                  and other
                  investments         (20)          --                 --            --         (20)
                 Net taxes paid        12            --                 --            --          12
                 Earnings before
                  and other
                  adjustments        $927        $(101)              $--         $(27)      $799
        (2) Reconciliation
                to GAAP:
                 Increase in
                  cash resulting
                  from changes
                  in working
                  capital            $(202)         $--                $--          $11      $(191)
                 Net taxes paid      (12)          --                 --            --         (12)
                 Working capital
                  changes and
                  taxes paid        $(214)         $--                $--          $11      $(203)
        (3) Cash from loan
                payments and
                sale of equity
        (4) Funding for
                strategic debt
                and equity
                investments and
                other QSI
                operating expenses.
        (5) Reconciliation to
                GAAP cash flow
                 Net increase
                  in cash and cash
                  (GAAP)              $(493)         $--              $--          $--      $(493)
                    Plus: Net
                      purchases of
                      securities    1,158            --                --            --      1,158
                    Plus: Net
                      increase in
                      fair value
                      and other
                      changes to
                      securities         49            --                --              6          55
                    Less: Net
                      decrease in
                      settlement         (3)          --                --            --          (3)
                 Net increase in
                  cash, cash
                  equivalents and
                  securities         $711          $--              $--            $6        $717
        (a) See detail on the following page.
        (b) Tax benefits from stock options exercised during the quarter.
                                                  QUALCOMM Incorporated
                                              SUPPLEMENTAL DETAIL TO THE
                                                      (In US$ millions)
                                                  Three Months Ended December 25, 2005
                                                            Estimated                                  Total
                                        QUALCOMM      Share Based         Tax                 QUALCOMM
                                        Pro Forma    Compensation  Adjustment  QSI    (GAAP)
        (a) Other non-cash
                are comprised
                and amortization    $57              $--              $--          $1         $58
              Gain or loss on
                instruments              (4)              --                --          --          (4)
                losses on
                securities and
                other investments      3                --                --          --            3
              Equity in losses
                of investees            --                --                --          20          20
              Tax benefits from
                stock options
                exercised during
                the quarter              --            (101)              --          --        (101)
              Non-cash income
                tax expense
                (benefit)                227                --              (56)        (27)        144
              Other non-cash
                charges and
                (credits)                (15)              --                --          --         (15)
              Total non-cash
                adjustments          $268          $(101)          $(56)        $(6)      $105@@end@@

                                                    (In US$ millions)
                                                                Three Months Ended December 26, 2004
                                                                      QUALCOMM                         QUALCOMM
                                                                    Pro Forma            QSI         (GAAP)
         Net cash provided by operating
          activities                                              $387                $10          $397
         Capital expenditures                                (112)              (76)         (188)
         Free cash flow (Net cash provided
          by operating activities less
          capital expenditures)                            $275              $(66)         $209
                                                    QUALCOMM Incorporated
                                        CONDENSED CONSOLIDATED BALANCE SHEETS
                                        (In US$ millions, except per share data)
                                                                                December 25,  September 25,
                                                                                      2005                      2005
                Current assets:
                  Cash and cash equivalents                        $1,577                  $2,070
                  Marketable securities                                5,407                    4,478
                  Accounts receivable, net                              728                        544
                  Inventories                                                  195                        177
                  Deferred tax assets                                      351                        343
                  Other current assets                                    141                        179
                                Total current assets                    8,399                    7,791
                Marketable securities                                  2,414                    2,133
                Property, plant and equipment,
                 net                                                              1,154                    1,022
                Goodwill                                                          571                        571
                Deferred tax assets                                         405                        444
                Other assets                                                    486                        518
                                Total assets                              $13,429                 $12,479
                                        LIABILITIES AND STOCKHOLDERS' EQUITY
                Current liabilities:
                  Trade accounts payable                                $431                      $376
                  Payroll and other benefits
                    related liabilities                                    179                        196
                  Dividends payable                                         148                         --
                  Unearned revenue                                          149                        163
                  Other current liabilities                            253                        335
                              Total current
                                liabilities                                  1,160                    1,070
                Unearned revenue                                              141                        146
                Other liabilities                                            156                        144
                              Total liabilities                          1,457                    1,360
                Stockholders' equity:
                  Preferred stock, $0.0001 par
                    value; issuable in series;
                    8 shares authorized; none
                    outstanding at
                    December 25, 2005 and
                    September 25, 2005,
                    respectively                                                 --                         --
                  Common stock, $0.0001 par
                    value; 6,000 shares
                    authorized; 1,650 and 1,641
                    shares issued and outstanding
                    at December 25, 2005 and
                    September 25, 2005,
                    respectively                                                 --                         --
                  Paid-in capital                                         7,134                    6,753
                  Retained earnings                                      4,800                    4,328
                  Accumulated other
                    comprehensive income                                    38                         38
                              Total stockholders'
                                equity                                         11,972                  11,119
                              Total liabilities and
                                stockholders' equity                 $13,429                 $12,479
                                                    QUALCOMM Incorporated
                                         (In US$ millions, except per share data)
                                                                                  Three Months Ended
                                                                         December 25,          December 26,
                                                                                2005                        2004
                  Equipment and services                        $1,150                      $978
                  Licensing and royalty fees                      591                        412
                                                                                1,741                    1,390
                Operating expenses:
                  Cost of equipment and
                    services revenues                                  517                        430
                  Research and development                         340                        228
                  Selling, general and
                    administrative                                        239                        148
                Total operating expenses                         1,096                        806
                Operating income                                         645                        584
                Investment income, net                                 91                        120
                Income before income taxes                         736                        704
                      Income tax expense                              (116)                    (191)
                Net income                                                 $620                      $513
                Basic earnings per common share              $0.38                    $0.31
                Diluted earnings per common
                 share                                                      $0.36                    $0.30
                Shares used in per share
                    Basic                                                  1,645                    1,639
                    Diluted                                                1,702                    1,704
                Dividends per share announced                 $0.09                    $0.07@@end@@

SAN DIEGO, January 25 /PRNewswire/ --

    Web site:  http://www.qualcomm.com

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

Bill Davidson, Vice President, Investor Relations of QUALCOMM  
Incorporated, +1-858-658-4813, fax, +1-858-651-9303, ir@qualcomm.com;
NOTE TO EDITORS:  If you would like additional information on
QUALCOMM, please view the QUALCOMM press room at

Weitere Meldungen: Qualcomm Incorporated

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