Qualcomm Announces Fourth Quarter and Fiscal 2011 Results

By Qualcomm Incorporated, PRNE
Tuesday, November 1, 2011

SAN DIEGO, November 2, 2011 -

 

Fiscal 2011 Revenues $15 Billion

GAAP EPS $2.52, Non-GAAP EPS $3.20

- Record Fiscal 2011 Results -

 

Qualcomm Incorporated (Nasdaq: QCOM), a leading developer and innovator of advanced wireless technologies, products and services, today announced results for the fourth fiscal quarter and year ended September 25, 2011.

“I am very pleased with our performance this year as we delivered record revenues, earnings and MSM chipset shipments, driven by the popularity of smartphones, continued adoption of 3G technologies, particularly in emerging regions, and our industry-leading patent portfolio,” said Dr. Paul E. Jacobs, chairman and CEO of Qualcomm. “The breadth and depth of our chipset roadmap, extensive licensing program and diverse set of global partnerships position us well for strong revenue and earnings growth in fiscal 2012. We are excited about the upcoming commercial launch of our groundbreaking Snapdragon multimode LTE solution and continue to invest in and execute on our strategic priorities to drive profitable growth.”

GAAP Results

Qualcomm results are reported in accordance with generally accepted accounting principles (GAAP).

Fourth Quarter Fiscal 2011

  • Revenues:(1) $4.12 billion, up 39 percent year-over-year (y-o-y) and 14 percent sequentially.
  • Operating income:(1) $1.24 billion, up 29 percent y-o-y and 11 percent sequentially.
  • Net income:(2) $1.06 billion, up 22 percent y-o-y and 2 percent sequentially.
  • Diluted earnings per share:(2) $0.62, up 17 percent y-o-y and 2 percent sequentially.  
  • Effective tax rate:(1) 20 percent for the quarter.
  • Operating cash flow:  $1.82 billion, up 67 percent y-o-y; 44 percent of revenues.
  • Return of capital to stockholders:  $361 million, or $0.215 per share, of cash dividends paid and $142 million to repurchase 2.9 million shares of our common stock.
    (1) The results of FLO TV are presented as discontinued operations, and
        prior period amounts have been adjusted accordingly. Revenues,
        operating expenses, operating income, earnings before tax (EBT) and
        effective tax rate throughout this news release are from continuing
        operations (i.e., before discontinued operations and the adjustment
        for noncontrolling interests), unless otherwise stated.
    (2) Net income and diluted earnings per share throughout this news
        release are attributable to Qualcomm (i.e., after discontinued
        operations and adjustment for noncontrolling interests), unless
        otherwise stated.

Fiscal 2011

  • Revenues: $14.96 billion, up 36 percent y-o-y.
  • Operating income:  $5.03 billion, up 35 percent y-o-y.
  • Net income:  $4.26 billion, up 31 percent y-o-y.
  • Diluted earnings per share:  $2.52, up 29 percent y-o-y.  
  • Effective tax rate:  20 percent.
  • Operating cash flow:  $4.90 billion, up 20 percent y-o-y; 33 percent of revenues.
  • Return of capital to stockholders:  $1.49 billion, including $1.35 billion, or $0.81 per share, of cash dividends paid, and $142 million to repurchase 2.9 million shares of our common stock.

Non-GAAP Results

Non-GAAP results exclude the Qualcomm Strategic Initiatives (QSI) segment, certain share-based compensation, certain tax items that are not related to the current year and certain acquisition-related items. Starting with acquisitions completed in the third quarter of fiscal 2011, we changed our methodology for reporting Non-GAAP results to exclude the recognition of the step-up of inventories to fair value and amortization of certain intangible assets, in addition to our historical practice of excluding acquired in-process research and development (R&D) expense.

Fourth Quarter Fiscal 2011

  • Revenues:  $4.12 billion, up 39 percent y-o-y and 14 percent sequentially.
  • Operating income:  $1.62 billion, up 44 percent y-o-y and 17 percent sequentially.
  • Net income:  $1.37 billion, up 24 percent y-o-y and 11 percent sequentially.
  • Diluted earnings per share:  $0.80, up 18 percent y-o-y and 10 percent sequentially.  The current quarter excludes $0.01 loss per share attributable to the QSI segment, $0.12 loss per share attributable to certain share-based compensation, $0.07 loss per share attributable to certain acquisition-related items and $0.02 earnings per share attributable to certain tax-related items.
  • Effective tax rate:  21 percent for the quarter.  
  • Free cash flow (defined as net cash from operating activities less capital expenditures):  $1.69 billion, up 52 percent y-o-y; 41 percent of revenues.

Fiscal 2011

  • Revenues:  $14.96 billion, up 36 percent y-o-y.
  • Operating income:  $6.08 billion, up 41 percent y-o-y.
  • Net income:  $5.41 billion, up 33 percent y-o-y.
  • Diluted earnings per share:  $3.20, up 30 percent y-o-y.  The current fiscal year excludes $0.23 loss per share attributable to the QSI segment, $0.37 loss per share attributable to certain share-based compensation, $0.12 loss per share attributable to certain acquisition-related items and $0.04 earnings per share attributable to certain tax-related items.  
  • Effective tax rate:  21 percent.
  • Free cash flow:  $4.83 billion, up 16 percent y-o-y; 32 percent of revenues.

Detailed reconciliations between results reported in accordance with generally accepted accounting principles (GAAP) and Non-GAAP results are included at the end of this news release.

In the year-over-year comparisons summarized above, the following should be noted: fiscal 2011 results included $401 million in revenues related to prior quarters as a result of agreements entered into with two licensees to settle disputes in the second quarter of fiscal 2011 and $120 million in impairment charges related to our Firethorn division, including $114 million in goodwill impairment; and fiscal 2011 operating and free cash flow reflect the impact of a $1.5 billion income tax payment primarily related to the 2008 license and settlement agreements with Nokia. In addition, fiscal 2011 results included the results of Qualcomm Atheros, Inc., which was acquired on May 24, 2011.

Key Business Metrics

Fourth Quarter Fiscal 2011

  • CDMA-based Mobile Station Modem (MSM®) shipments:  127 million units, up 14 percent y-o-y and 6 percent sequentially.
  • June quarter total reported device sales:  approximately $39.1 billion, up 38 percent y-o-y and 7 percent sequentially.
    • June quarter estimated CDMA-based device shipments:  approximately 187 to 191 million units, at an estimated average selling price of approximately $204 to $210 per unit.    

Fiscal 2011

  • CDMA-based MSM shipments:  483 million units, up 21 percent y-o-y.
  • Total reported device sales:  approximately $149.5 billion, up 41 percent y-o-y.
    • Estimated CDMA-based device shipments:  approximately 717 to 734 million units, at an estimated average selling price of approximately $203 to $209 per unit.

Cash and Marketable Securities

Our cash, cash equivalents and marketable securities totaled $20.9 billion at the end of the fourth quarter of fiscal 2011, compared to $20.2 billion at the end of the third quarter of fiscal 2011 and $18.4 billion a year ago. As of September 25, 2011, $1.0 billion remained authorized for repurchases under our stock repurchase program, net of put options outstanding. In addition to the $142 million in stock repurchases we made during the fourth quarter of fiscal 2011, we repurchased and retired 2.0 million shares of our common stock for approximately $99 million since September 25, 2011. In connection with our stock repurchase program, we sold three put options which, if exercised, will require us to repurchase an additional 11.8 million shares for $586 million. On October 11, 2011, we announced a cash dividend of $0.215 per share payable on December 21, 2011 to stockholders of record as of November 23, 2011.

Research and Development

                                                     Share-Based
    ($ in millions)                       Non-GAAP  Compensation  QSI  GAAP

    Fourth quarter fiscal 2011              $ 731      $ 119     $ 1   $ 851
    As a % of revenues                        18%                        21%
    Fourth quarter fiscal 2010*             $ 547       $ 77     $ 4   $ 628
    As a % of revenues                        19%                        21%
    Year-over-year change ($)                 34%        55%     N/M     36%
    *As adjusted for discontinued
    operations
    N/M - Not Meaningful

Non-GAAP R&D expenses increased 34 percent y-o-y primarily due to an increase in costs related to the development of integrated circuit products, next generation technologies and other initiatives to support the acceleration of advanced wireless products and services.

Selling, General and Administrative

                                                      Acquisition-
                                        Share-Based     Related
    ($ in millions)           Non-GAAP  Compensation     Items      QSI  GAAP

    Fourth quarter fiscal
    2011                         $ 371         $ 110      $ 42      $ 8  $531
    As a % of revenues              9%                                    13%
    Fourth quarter fiscal
    2010*                        $ 364          $ 68       $ -      $ 8  $440
    As a % of revenues             12%                                    15%
    Year-over-year change ($)       2%           62%       N/M      N/M   21%
    *As adjusted for
    discontinued operations
    N/M - Not Meaningful

Non-GAAP selling, general and administrative (SG&A) expenses increased 2 percent y-o-y primarily due to an increase in employee-related costs.

Effective Income Tax Rate

Our fiscal 2011 effective income tax rates for continuing operations were 20 percent for GAAP and 21 percent for Non-GAAP. The fiscal 2011 GAAP effective tax rate included a tax benefit of $44 million related to an agreement reached on a component of our fiscal 2006 through 2010 state tax returns, as well as a tax benefit of $32 million recorded in fiscal 2011 related to fiscal 2010 due to the retroactive extension of the federal research and development tax credit in fiscal 2011. These tax benefits were excluded from our Non-GAAP results.

Qualcomm Strategic Initiatives

The QSI segment makes strategic investments, many of which are in early-stage companies, and holds wireless spectrum. QSI also includes the discontinued operations of our FLO TV business. GAAP results for the fourth quarter fiscal 2011 included a $0.01 loss per share for the QSI segment. The fourth quarter fiscal 2011 QSI results included $27 million dollars in interest expense, related to the India BWA spectrum won in India in June 2010 and the related bank loans. At the end of the fourth quarter fiscal 2011, the aggregate carrying value of the loans was $994 million.

Business Outlook

The following statements are forward looking and actual results may differ materially. The “Note Regarding Forward-Looking Statements” at the end of this news release provides a description of certain risks that we face, and our annual and quarterly reports on file with the Securities and Exchange Commission (SEC) provide a more complete description of risks.

Our outlook does not include provisions for future asset impairments or for pending legal matters, other than future legal amounts that are probable and estimable. Further, due to their nature, certain income and expense items, such as realized investment gains or losses, or gains and losses on certain derivative instruments, cannot be accurately forecast. Accordingly, we only include such items in our business outlook to the extent they are reasonably certain; however, actual results may vary materially from the business outlook.

The following table summarizes GAAP and Non-GAAP guidance based on the current business outlook. The Non-GAAP business outlook presented below is consistent with the presentation of Non-GAAP results included elsewhere herein.

                        Qualcomm's Business Outlook Summary

     FIRST FISCAL QUARTER
                                                              Current
                                                              Guidance
                                   Q1 FY11                    Q1 FY12
                                 Results (1)                  Estimates

    Revenues                         $3.35B                $4.35B - $4.75B
    Year-over-year change                               increase 30% - 42%
    Non-GAAP Diluted earnings
    per share (EPS)                  $0.82                  $0.86 - $0.92
     Year-over-year change                               increase 5% - 12%
       Diluted EPS
       attributable to QSI          ($0.05)                        ($0.02)
       Diluted EPS
       attributable to
       share-based compensation     ($0.07)                        ($0.11)
       Diluted EPS
       attributable to
       acquisition-related items     $0.00                         ($0.03)
       Diluted EPS
       attributable to tax items     $0.02                          $0.00
    GAAP Diluted EPS                 $0.71                  $0.70 - $0.76
     Year-over-year change                       decrease 1% - increase 7%

    Metrics
    MSM shipments              approx. 118M            approx. 146M - 154M
     Year-over-year change                              increase 24% - 31%
    Total reported
    device sales (2)                 $34.0B*               $37.5B - $41.5B*
     Year-over-year change                              increase 10% - 22%
     *Est. sales in September quarter,
      reported in December quarter

     FISCAL YEAR
                                                              Current
                                                              Guidance
                                   FY 2011                    FY 2012
                                   Results                    Estimates

    Revenues                        $14.96B                $18.0B - $19.0B
    Year-over-year change                               increase 20% - 27%
    Non-GAAP Diluted EPS             $3.20                  $3.42 - $3.62
     Year-over-year change                               increase 7% - 13%
       Diluted EPS
       attributable to QSI          ($0.23)                        ($0.04)
       Diluted EPS
       attributable to
       share-based compensation     ($0.37)                        ($0.46)
       Diluted EPS
       attributable to
       acquisition-related items    ($0.12)                        ($0.12)
       Diluted EPS
       attributable to tax items     $0.04                          $0.00

    GAAP Diluted EPS                 $2.52                  $2.80 - $3.00
     Year-over-year change                              increase 11% - 19%

    Metrics
    Est. fiscal year*
    CDMA-based device average
    selling price range (2)     approx $203 - $209      approx $197 - $209
    *Shipments in Sept. to June
    quarters, reported in Dec.
    to Sept. quarters

     CALENDAR YEAR Device
     Estimates (2)
                                                                  Current
                                                  Current        Guidance
                              Prior Guidance     Guidance        Calendar
                               Calendar 2011   Calendar 2011       2012
                                 Estimates       Estimates       Estimates
    Est. CDMA-based device
    shipments
                              approx. 170M -    approx. 170M -   not provided
    March quarter                     174M              174M
                                                approx. 187M -   not provided
    June quarter              not provided              191M  

    September quarter         not provided      not provided     not provided

    December quarter          not provided      not provided     not provided
    Est. Calendar year range
    (approx.)                  750M - 800M       755M - 795M      865M - 935M
                                  Midpoint          Midpoint         Midpoint
    Est. total CDMA-based
    units                     approx. 775M      approx. 775M     approx. 900M

    Est. CDMA units           approx. 245M      approx. 235M     not provided

    Est. WCDMA units          approx. 530M      approx. 540M     not provided
    (1) As adjusted to reflect the reclassification of revenues
        related to FLO TV to discontinued operations.
    (2) Total reported device sales is the sum of all reported sales
        in U.S. dollars (as reported to us by our licensees) of all
        licensed CDMA-based subscriber devices (including handsets,
        modules, modem cards and other subscriber devices) by our
        licensees during a particular period. The reported quarterly
        estimated ranges of ASPs and unit shipments are determined
        based on the information as reported to us by our licensees
        during the relevant period and our own estimates of the
        selling prices and unit shipments for licensees that do not
        provide such information. Not all licensees report sales,
        selling prices and/or unit shipments the same way (e.g., some
        licensees report selling prices net of permitted deductions,
        such as transportation, insurance and packing costs, while
        other licensees report selling prices and then identify the
        amount of permitted deductions in their reports), and the way
        in which licensees report such information may change from
        time to time. Total reported device sales, estimated unit
        shipments and estimated ASPs for a particular period may
        include prior period activity that was not reported by the
        licensee until such particular period.

    Sums may not equal totals due to rounding.

Results of Business Segments

The following tables have been adjusted to reflect discontinued operations (Note 5) (in millions, except per share data):


                                                          Non-GAAP
                                                         Reconciling
    SEGMENTS                      QCT       QTL     QWI   Items (1)  Non-GAAP
    Q4 - FISCAL 2011
    Revenues                    $2,587     $1,361   $163        $6   $4,117
    Change from prior year         39%        48%   (5%)       N/M      39%
    Change from prior
    quarter                        18%         8%   (1%)       N/M      14%
    Operating income
    (loss)                                                           $1,624
    Change from prior year                                              44%
    Change from prior
    quarter                                                             17%
    EBT                           $569     $1,193   ($5)     ($20)   $1,737
    Change from prior year         10%        58%    N/M       N/M      28%
    Change from prior
    quarter                        32%         9%    62%       N/M      10%
    EBT as a % of revenues         22%        88%    N/M       N/M      42%
    Discontinued operations, net of tax (5)                             $ -
    Net income (loss)                                                $1,372
    Change from prior year                                              24%
    Change from prior
    quarter                                                             11%
    Diluted EPS                                                       $0.80
    Change from prior year                                              18%
    Change from prior
    quarter                                                             10%
    Diluted shares used                                               1,716
    Q3 - FISCAL 2011
    Revenues                    $2,194     $1,257   $164        $8   $3,623
    Operating income
    (loss)                                                            1,393
    EBT                            430      1,092   (13)        65    1,574
    Discontinued operations, net of tax (5)                               -
    Net income (loss)                                                 1,240
    Diluted EPS                                                       $0.73
    Diluted shares used                                               1,709
    Q1 - FISCAL 2011
    Revenues                    $2,116     $1,057   $172        $3   $3,348
    Operating income
    (loss)                                                            1,416
    EBT                            640        892      -       128    1,660
    Discontinued operations, net of tax (5)                               -
    Net income (loss)                                                 1,345
    Diluted EPS                                                       $0.82
    Diluted shares used                                               1,648
    Q4 - FISCAL 2010
    Revenues                    $1,860       $921   $171       $ -   $2,952
    Operating income
    (loss)                                                            1,130
    EBT                            519        754    (2)        90    1,361
    Discontinued operations, net of tax (5)                               -
    Net income (loss)                                                 1,105
    Diluted EPS                                                       $0.68
    Diluted shares used                                               1,621
    12 MONTHS - FISCAL 2011
    Revenues                    $8,859     $5,422   $656       $20  $14,957
    Change from prior year         32%        48%     4%       N/M      36%
    Operating income
    (loss)                                                           $6,084
    Change from prior year                                              41%
    EBT                         $2,056     $4,753 ($152)      $183   $6,840
    Change from prior year         21%        57%    N/M     (49%)      34%
    Discontinued operations, net of tax (5)                             $ -
    Net income (loss)                                                $5,407
    Change from prior year                                              33%
    Diluted EPS                                                       $3.20
    Change from prior year                                              30%
    Diluted shares used                                               1,691
    12 MONTHS- FISCAL 2010
    Revenues                    $6,695     $3,659   $628       $ -  $10,982
    Operating income
    (loss)                                                            4,316
    EBT                          1,693      3,020     12       361    5,086
    Discontinued operations, net of tax (5)                               -
    Net income (loss)                                                 4,071
    Diluted EPS                                                       $2.46
    Diluted shares used                                               1,658

                                           Tax   Acquisition-
                            Share-Based   Items    Related
    SEGMENTS               Compensation*   (2)    Items (3)   QSI (4)*  GAAP*
    Q4 - FISCAL
    2011
    Revenues                         $ -     $ -         $ -      $ -  $4,117
    Change from
    prior year                                                            39%
    Change from
    prior
    quarter                                                               14%
    Operating
    income
    (loss)                        ($252)     $ -      ($125)     ($9)  $1,238
    Change from
    prior year                     (61%)                 N/A      40%     29%
    Change from
    prior
    quarter                        (31%)               (62%)      10%     11%
    EBT                           ($252)     $ -      ($125)    ($34)  $1,326
    Change from
    prior year                     (61%)                 N/A     (6%)     13%
    Change from
    prior
    quarter                        (31%)               (62%)    (13%)      4%
    EBT as a %
    of revenues                                                           32%
    Discontinued
    operations, net of
    tax (5)                         ($1)     $ -         $ -     ($5)    ($6)
    Net income
    (loss)                        ($214)    $ 40      ($120)    ($22)  $1,056
    Change from
    prior year                     (78%)     N/M         N/A      73%     22%
    Change from
    prior
    quarter                        (46%)     N/M       (64%)      N/M      2%
    Diluted EPS                  ($0.12)   $0.02     ($0.07)  ($0.01)   $0.62
    Change from
    prior year                     (71%)     N/M         N/A      80%     17%
    Change from
    prior
    quarter                        (33%)     N/M       (75%)      N/M      2%
    Diluted
    shares used                    1,716   1,716       1,716    1,716   1,716
    Q3 - FISCAL
    2011
    Revenues                         $ -     $ -         $ -      $ -  $3,623
    Operating
    income
    (loss)                         (193)       -        (77)     (10)   1,113
    EBT                            (193)       -        (77)     (30)   1,274
    Discontinued
    operations, net of
    tax (5)                            -       -           -       44      44
    Net income
    (loss)                         (147)     (4)        (73)       19   1,035
    Diluted EPS                  ($0.09)     $ -     ($0.04)    $0.01   $0.61
    Diluted
    shares used                    1,709   1,709       1,709    1,709   1,709
    Q1 - FISCAL
    2011
    Revenues                         $ -     $ -         $ -      $ -  $3,348
    Operating
    income
    (loss)                         (169)       -           -        -   1,247
    EBT                            (169)       -           -     (21)   1,470
    Discontinued
    operations, net of
    tax (5)                          (2)       -           -     (80)    (82)
    Net income
    (loss)                         (116)      28           -     (87)   1,170
    Diluted EPS                  ($0.07)   $0.02         $ -  ($0.05)   $0.71
    Diluted
    shares used                    1,648   1,648       1,648    1,648   1,648
    Q4 - FISCAL
    2010
    Revenues                         $ -     $ -         $ -      $ -  $2,952
    Operating
    income
    (loss)                         (157)       -           -     (15)     958
    EBT                            (157)       -           -     (32)   1,172
    Discontinued
    operations, net of
    tax (5)                          (3)       -           -     (70)    (73)
    Net income
    (loss)                         (120)    (40)           -     (80)     865
    Diluted EPS                  ($0.07) ($0.02)         $ -  ($0.05)   $0.53
    Diluted
    shares used                    1,621   1,621       1,621    1,621   1,621
    12 MONTHS - FISCAL
    2011
    Revenues                         $ -     $ -         $ -      $ - $14,957
    Change from
    prior year                                                             36%
    Operating
    income
    (loss)                        ($813)     $ -      ($208)    ($37)  $5,026
    Change from
    prior year                     (36%)                 N/M      N/M     35%
    EBT                           ($813)     $ -      ($208)   ($132)  $5,687
    Change from
    prior year                     (36%)                 N/M      N/M     27%
    Discontinued
    operations, net of
    tax (5)                         ($5)     $ -         $ -   ($308)  ($313)
    Net income
    (loss)                        ($624)     $62      ($200)   ($385)  $4,260
    Change from
    prior year                     (41%)     N/M         N/M    (75%)     31%
    Diluted EPS                  ($0.37)   $0.04     ($0.12)  ($0.23)   $2.52
    Change from
    prior year                     (37%)     N/M         N/M    (77%)     29%
    Diluted
    shares used                    1,691   1,691       1,691    1,691   1,691
    12 MONTHS-
    FISCAL 2010
    Revenues                         $ -     $ -         $ -      $ - $10,982
    Operating
    income
    (loss)                         (597)       -         (3)       11   3,727
    EBT                            (597)       -         (3)        7   4,493
    Discontinued
    operations, net of
    tax (5)                         (11)       -           -    (262)   (273)
    Net income
    (loss)                         (442)   (159)         (3)    (220)   3,247
    Diluted EPS                  ($0.27) ($0.10)         $ -  ($0.13)   $1.96
    Diluted
    shares used                    1,658   1,658       1,658    1,658   1,658
    (1) Non-GAAP reconciling items related to revenues consist
        primarily of other nonreportable segment revenues less
        intersegment eliminations. Non-GAAP reconciling items
        related to earnings before taxes consist primarily of
        certain investment income or losses, interest expense,
        research and development expenses, sales and marketing
        expenses and other operating expenses that are not
        allocated to the segments for management reporting
        purposes, nonreportable segment results and the
        elimination of intersegment profit.
    (2) During the first quarter of fiscal 2011, we recorded a tax
        benefit of $32 million related to fiscal 2010 due to the
        retroactive extension of the federal R&D tax credit.
        During the fourth quarter of fiscal 2011, we recorded a
        tax benefit of $44 million related to an agreement reached
        on a component of our fiscal 2006 through 2010 state tax
        returns. Also, during the first, second, third and fourth
        quarters of fiscal 2011, we recorded $3 million, $3
        million, $4 million and $4 million, respectively, in state
        tax expense because deferred revenues related to the
        license agreement signed in the first quarter of fiscal
        2010 with Samsung is taxable in fiscal 2011 but the
        resulting deferred tax asset will reverse in future years
        when our state tax rate will be lower. Our quarterly and
        2011 Non-GAAP results exclude these items.
    (3) Beginning in the third quarter of fiscal 2011, Non-GAAP
        results exclude certain items related to acquisitions.
        During the third and fourth quarters of fiscal 2011,
        Non-GAAP results excluded $45 million and $37 million,
        respectively, related to the step-up of inventories to
        fair value and $32 million and $88 million, respectively,
        in amortization of intangible assets that resulted from
        acquisitions completed in the third and fourth quarters of
        fiscal 2011.
    (4) 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 Non-GAAP tax provision, the tax items
        column and the tax provision related to share-based
        compensation from the GAAP tax provision.
    (5) During fiscal 2011, we shut down the FLO TV business and
        network. The results of FLO TV are presented as
        discontinued operations, and prior period amounts have
        been adjusted accordingly.

    * As adjusted for discontinued operations
    N/M - Not Meaningful
    N/A - Not Applicable
    Sums may not equal totals due to rounding.

Conference Call

Qualcomm’s fourth quarter fiscal 2011 earnings conference call will be broadcast live on November 2, 2011, beginning at 1:45 p.m. Pacific Time (PT) on the Company’s web site at: www.qualcomm.com. This conference call may contain forward-looking financial information and 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, 2011, beginning at approximately 5:30 p.m. PT through December 2, 2011 at 9:00 p.m. PT. To listen to the replay, U.S. callers may dial (855) 859-2056 and international callers may dial +1-404-537-3406. U.S. and international callers should use reservation number 14571452. An audio replay of the conference call will be available on the Company’s web site at www.qualcomm.com following the live call.

Editor’s Note: To view the web slides that accompany this earnings release and conference call, please go to the Qualcomm Investor Relations website at: investor.qualcomm.com/results.cfm

Qualcomm Incorporated (Nasdaq: QCOM) is a world leader in 3G and next-generation mobile technologies. For more than 25 years, Qualcomm ideas and inventions have driven the evolution of digital communications, linking people everywhere more closely to information, entertainment and each other. For more information, visit www.qualcomm.com

Note Regarding Use of Non-GAAP Financial Measures

The Non-GAAP 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, “Non-GAAP” is not a term defined by GAAP, and as a result, the Company’s measure of Non-GAAP results might be different than similarly titled measures used by other companies. Reconciliations between GAAP results and Non-GAAP results are presented herein.

The Company presents Non-GAAP 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. Non-GAAP 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 (loss), net investment income (loss), income (loss) before income taxes, effective tax rate, net income (loss), diluted earnings (loss) per share, operating cash flow and free cash flow. 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 using Non-GAAP information. As a result, management compensation decisions and the review of executive compensation by the Compensation Committee of the Board of Directors focus primarily on Non-GAAP financial measures applicable to the Company and its business segments.

Non-GAAP information used by management excludes the QSI segment, certain share-based compensation, certain tax items and certain acquisition-related items. 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 and realized gains or losses are viewed by management as unrelated to the Company’s operational performance. Share-based compensation, other than amounts related to share-based awards granted under a bonus program that may result in the issuance of unrestricted shares of the Company’s common stock, is excluded because management views such share-based compensation as unrelated to the Company’s operational performance. Further, share-based compensation related to stock options is affected by factors that are subject to change, including the Company’s stock price, stock market volatility, expected option life, risk-free interest rates and expected dividend payouts in future years. Certain tax items that were recorded in reported earnings in each fiscal year presented, but were unrelated to the fiscal year in which they were recorded, are excluded in order to provide a clearer understanding of the Company’s ongoing Non-GAAP tax rate and after tax earnings. In fiscal 2011, the Company began excluding the benefit of retroactive extensions of the federal R&D tax credit from Non-GAAP results because the Company does not include the potential extension of the credit in its business outlook due to uncertainty as to whether and when the federal R&D tax credit will be retroactively extended. In addition to its historical practice of excluding acquired in-process research and development expenses from Non-GAAP results, the Company began excluding recognition of the step-up of inventories to fair value and amortization of certain intangible assets starting with acquisitions completed in the third quarter of fiscal 2011. These certain acquisition-related items are excluded and no longer allocated to the Company’s segments because management has concluded that such expenses should not be considered when assessing segment performance as they are unrelated to the operating activities of the Company’s ongoing core businesses. In addition, these charges are significantly impacted by the size and timing of acquisitions, potentially obscuring period to period comparisons of the Company’s operating businesses.

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 stockholder value. The Company believes that this presentation is useful in evaluating its operating performance and financial strength. In addition, management uses this measure to evaluate the Company’s performance, to value the Company and to compare its operating performance with other companies in the industry.

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 commercial deployment of, and demand for, our technologies in communications products and services; the uncertainty of global economic conditions and their potential impacts on demand for our products, services or applications and on the value of our marketable securities; competition; our dependence on major customers and licensees; attacks on our licensing business model, including results of current and future litigation and arbitration proceedings, as well as actions of governmental or quasi-governmental bodies, and the costs we incur in connection therewith, including potentially damaged relationships with customers and operators who may be impacted by the results of these proceedings; our dependence on third-party suppliers; foreign currency fluctuations; strategic investments and transactions we have or may pursue, including our investment in the BWA Spectrum in India which is currently subject to legal proceedings; failures, defects or errors in our products and services or in the products of our customers; the commercial success of our QMT division’s IMOD display technology; as well as the other risks detailed from time-to-time in our SEC reports, including the report on Form 10-K for the year ended September 25, 2011. We undertake no obligation to update, or continue to provide information with respect to, any forward-looking statement or risk factor, whether as a result of new information, future events or otherwise.

Qualcomm is a registered trademark of Qualcomm Incorporated. MSM is a registered trademark of Qualcomm Incorporated. CDMA2000 is a registered trademark of the Telecommunications Industry Association (TIA USA). All other trademarks are the property of their respective owners.

Qualcomm Contact:
Warren Kneeshaw
Phone: +1-858-658-4813
e-mail: ir@qualcomm.com

                              Qualcomm Incorporated
               Supplemental Information for the Three Months Ended
                                September 25, 2011
                                   (Unaudited)

                           Non-GAAP    Share-Based       Tax
                           Results     Compensation     Items
     ($ in millions
     except per share
     data)

           Cost of
           equipment and
           services
           revenues      $ 1,391           $ 23         $ -

           R&D               731            119           -

           SG&A              371            110           -

           Operating
           income (loss)   1,624           (252)           -

           Investment
           income
           (loss), net       113 (b)           -           -

           Tax rate          21%             15%         N/A

           Net income
           (loss)        $ 1,372         $ (214)        $ 40 (d)

           Diluted
           earnings
           (loss) per
           share (EPS)    $ 0.80        $ (0.12)       $ 0.02

           Operating
           cash flow     $ 1,886          $ (16)         $ -
           Operating
           cash flow as
           % of revenues     46%             N/A         N/A

           Free cash
           flow (e)      $ 1,692          $ (16)         $ -
           Free cash
           flow as a %
           of revenues       41%             N/A         N/A

                            Acquisition-
                               Related                     GAAP
                              Items (a)          QSI      Results
     ($ in millions
     except per share
     data)

           Cost of
           equipment and
           services
           revenues              $ 83            $ -      $ 1,497

           R&D                      -              1          851

           SG&A                    42              8          531

           Operating
           income (loss)        (125)            (9)        1,238

           Investment
           income
           (loss), net              -           (25) (c)       88

           Tax rate               N/M            N/M          20%

           Net income
           (loss)             $ (120)         $ (22)      $ 1,056

           Diluted
           earnings
           (loss) per
           share (EPS)       $ (0.07)        $(0.01)       $ 0.62

           Operating
           cash flow              $ -         $ (50)      $ 1,820
           Operating
           cash flow as
           % of revenues          N/A            N/A          44%

           Free cash
           flow (e)               $ -         $ (50)      $ 1,626
           Free cash
           flow as a %
           of revenues            N/A            N/A          39%
    (a)       Included $37 million related to the step-up of inventories to
              fair value and $88 million in amortization of intangible assets
              that resulted from acquisitions completed in the third and
              fourth quarters of fiscal 2011.
    (b)       Included $112 million in interest and dividend income related
              to cash, cash equivalents and marketable securities, which were
              not part of our strategic investments, and $33 million in net
              realized gains on investments, partially offset by $23 million
              in other-than-temporary losses on investments, $5 million in
              losses on derivatives and $4 million in interest expense.
    (c)       Included $27 million in interest expense and $4 million in
              other-than-temporary losses on investments, partially offset by
              $6 million in interest and dividend income related to cash,
              cash equivalents and marketable securities.
    (d)       Included a $44 million tax benefit related toanagreement
              reached on a component of our fiscal 2006 through 2010 state
              tax returns, partially offset by $4 million in state tax
              expense because deferred revenue related to the license
              agreement signed in the first quarter of fiscal 2010 with
              Samsung is taxable in fiscal 2011 but the resulting deferred
              tax asset will reverse in future years when our state tax rate
              will be lower.
    (e)       Free cash flow is calculated as net cash provided by operating
              activities less capital expenditures. Reconciliation of these
              amounts is included in the "Reconciliation of Non-GAAP Free
              Cash Flows to Net Cash Provided by Operating Activities (GAAP)
              and Other Supplemental Disclosures" for the three months ended
              September 25, 2011, included herein.

    N/M - Not Meaningful
    N/A - Not Applicable
    Sums may not equal totals due to rounding.
                              Qualcomm Incorporated
               Supplemental Information for the Twelve Months Ended
                                September 25, 2011
                                   (Unaudited)

                               Non-GAAP     Share-Based      Tax
                               Results    Compensation (a)  Items
     ($ in millions except
     per share data)

            Cost of
            equipment and
            services
            revenues         $ 4,662              $ 67      $ -

            R&D                2,585               397        -

            SG&A               1,512               349        -

            Operating income
            (loss)             6,084 (c)         (813)        -

            Investment
            income (loss),
            net                  756 (d)             -        -

            Tax rate             21%               24%      N/A

            Net income
            (loss)           $ 5,407           $ (624)     $ 62 (f)

            Diluted earnings
            (loss) per share
            (EPS)             $ 3.20          $ (0.37)     $ 0.04

            Operating cash
            flow             $ 5,418           $ (183)      $ -
            Operating cash
            flow as % of
            revenues             36%               N/A      N/A

            Free cash flow
            (g)              $ 4,830           $ (183)      $ -
            Free cash flow
            as a % of
            revenues             32%               N/A      N/A
                                            Acquisition-
                                             Related                 GAAP
                                             Items (b)    QSI (a)   Results
     ($ in millions except
      per share data)

                 Cost of equipment and
                 services revenues            $ 143           $ 5     $ 4,877

                 R&D                              6             7       2,995

                 SG&A                            59            25       1,945

                 Operating income (loss)      (208)          (37)       5,026

                 Investment income (loss),
                 net                              -          (95) (e)     661

                 Tax rate                       N/M           N/M         20%

                 Net income (loss)          $ (200)       $ (385)     $ 4,260

                 Diluted earnings (loss) per
                 share (EPS)               $ (0.12)      $ (0.23)      $ 2.52

                 Operating cash flow            $ -       $ (335)     $ 4,900
                 Operating cash flow as % of
                 revenues                       N/A           N/A         33%

                 Free cash flow (g)             $ -       $ (340)     $ 4,307
                 Free cash flow as a % of
                 revenues                       N/A           N/A         29%
    (a)       During fiscal 2011, the Company shut down the FLO TV business
              and network. The results of FLO TV are presented as
              discontinued operations, and prior period amounts have been
              adjusted accordingly.
    (b)       Beginning in the third quarter of fiscal 2011, Non-GAAP results
              exclude certain items related to acquisitions. During fiscal
              2011, Non-GAAP results excluded $82 million related to the
              step-up of inventories to fair value and $120 million in
              amortization of intangible assets that resulted from
              acquisitions completed in the third and fourth quarters of
              fiscal 2011. In addition, fiscal 2011 Non-GAAP results excluded
              $6 million in acquired in-process research and development
              expense.
    (c)       Operating income during fiscal 2011 included impairment charges
              of $120 million related to our Firethorn division, including
              $114 million in goodwill impairment.
    (d)       Included $480 million in interest and dividend income related
              to cash, cash equivalents and marketable securities, which were
              not part of our strategic investments, $335 million in net
              realized gains on investments and $1 million in equity in
              earnings of investees, partially offset by $39 million in
              other-than-temporary losses on investments, $15 million in
              interest expense and $6 million in losses on derivatives.
    (e)       Included $99 million in interest expense, $13 million in
              other-than-temporary losses on investments and $8 million in
              equity in losses of investees, partially offset by $20 million
              in interest and dividend income related to cash, cash
              equivalents and marketable securities, $3 million in gains on
              derivatives and $2 million in net realized gains on
              investments.
    (f)       Included a tax benefit of $44 million related toanagreement
              reached on a component of our fiscal 2006 through 2010 state
              tax returns and a $32 million tax benefit related to fiscal
              2010 due to the retroactive extension of the federal R&D tax
              credit, partially offset by $14 million in state tax expense
              because deferred revenues related to the license agreement
              signed in the first quarter of fiscal 2010 with Samsung is
              taxable in fiscal 2011 but the resulting deferred tax asset
              will reverse in future years when our state tax rate will be
              lower.
    (g)       Free cash flow is calculated as net cash provided by operating
              activities less capital expenditures. Reconciliation of these
              amounts is included in the "Reconciliation of Non-GAAP Free
              Cash Flows to Net Cash Provided by Operating Activities (GAAP)
              and Other Supplemental Disclosures" for the twelve months ended
              September 25, 2011, included herein.

    N/M - Not Meaningful
    N/A - Not Applicable
    Sums may not equal totals due to rounding.
                              Qualcomm Incorporated
                  Reconciliation of Non-GAAP Free Cash Flows to
                Net Cash Provided by Operating Activities (GAAP)
                       and Other Supplemental Disclosures
                                  (In millions)
                                   (Unaudited)

                                  Three Months Ended September 25, 2011

                                         Share-Based
                             Non-GAAP    Compensation       QSI        GAAP
    Net cash provided (used)
    by operating activities   $ 1,886          $ (16) (a)  $ (50)     $ 1,820
    Less: capital
    expenditures                (194)               -           -       (194)
    Free cash flow            $ 1,692          $ (16)      $ (50)     $ 1,626

    Revenues                  $ 4,117             $ -         $ -     $ 4,117
    Free cash flow as a % of
    revenues                      41%             N/A         N/A         39%

    Other supplemental cash
    disclosures:
    Cash transfers from QSI       $ 2             $ -       $ (2)         $ -
    Cash transfers to QSI
    (b)                          (62)               -          62           -
    Net cash transfers         $ (60)             $ -        $ 60         $ -

                                  Twelve Months Ended September 25, 2011

                                         Share-Based
                             Non-GAAP    Compensation       QSI        GAAP
    Net cash provided (used)
    by operating activities   $ 5,418         $ (183) (a) $ (335)     $ 4,900
    Less: capital
    expenditures                (588)               -         (5)       (593)
    Free cash flow            $ 4,830         $ (183)     $ (340)     $ 4,307

    Revenues                 $ 14,957             $ -         $ -    $ 14,957
    Free cash flow as a % of
    revenues                      32%             N/A         N/A         29%

    Other supplemental cash
    disclosures:
    Cash transfers from QSI
    (c)                          $ 69             $ -      $ (69)         $ -
    Cash transfers to QSI
    (b)                         (392)               -         392           -
    Net cash transfers        $ (323)             $ -       $ 323         $ -

                                  Three Months Ended September 26, 2010

                                           Share-Based
                             Non-GAAP     Compensation      QSI        GAAP
    Net cash provided (used)
    by operating activities   $ 1,214          $ (11) (a) $ (110)     $ 1,093
    Less: capital
    expenditures                (101)               -        (12)       (113)
    Free cash flow            $ 1,113          $ (11)     $ (122)       $ 980

                                  Twelve Months Ended September 26, 2010

                                         Share-Based
                             Non-GAAP    Compensation       QSI        GAAP
    Net cash provided (used)
    by operating activities   $ 4,511          $ (45) (a) $ (390)     $ 4,076
    Less: capital
    expenditures                (350)               -        (76)       (426)
    Free cash flow            $ 4,161          $ (45)     $ (466)     $ 3,650

    (a) Incremental tax benefits from stock options exercised during the
        period.
    (b) Primarily funding for strategic debt and equity investments
        and QSI operating expenses.
    (c) Primarily from the issuance of subsidiary shares to noncontrolling
        interests.
    N/A - Not Applicable
                              Qualcomm Incorporated
              Reconciliation of Non-GAAP Tax Rate to GAAP Tax Rate
                                  (in millions)
                                   (Unaudited)

                      Three Months Ended September 25, 2011

                      Non-GAAP    Share-Based        Tax
                      Results     Compensation    Items (a)

    Income (loss)
    from continuing
    operations before
    income taxes       $ 1,737         $ (252)          $ -
    Income tax
    (expense) benefit    (365)              39           40
    Income (loss)
    from continuing
    operations         $ 1,372         $ (213)         $ 40

    Tax rate               21%             15%          N/A

                         Three Months Ended September 25, 2011

                       Acquisition-
                        Related           QSI              GAAP
                         Items            (b)            Results

    Income
    (loss) from
    continuing
    operations
    before
    income taxes           $ (125)      $ (34)           $ 1,326
    Income tax
    (expense)
    benefit                     5          10               (271)
    Income
    (loss) from
    continuing
    operations             $ (120)      $ (24)           $ 1,055

    Tax rate                  N/M         N/M                 20%

                     Twelve Months Ended September 25, 2011

                      Non-GAAP    Share-Based        Tax
                      Results     Compensation    Items (a)

    Income (loss)
    from continuing
    operations before
    income taxes       $ 6,840         $ (813)         $ -
    Income tax
    (expense) benefit  (1,433)            194           62
    Income (loss)
    from continuing
    operations         $ 5,407         $ (619)        $ 62

    Tax rate               21%             24%         N/A

                       Twelve Months Ended September 25, 2011

                           Acquisition-
                            Related       QSI        GAAP
                             Items         (b)      Results

    Income
    (loss) from
    continuing
    operations
    before
    income taxes             $ (208)    $ (132)      $ 5,687
    Income tax
    (expense)
    benefit                       8         37        (1,132)
    Income
    (loss) from
    continuing
    operations               $ (200)     $ (95)      $ 4,555

    Tax rate                    N/M         28%           20%
    (a)          During the first quarter of fiscal 2011, we recorded a tax
                 benefit of $32 million related to fiscal 2010 due to the
                 retroactive reenactment of the federal R&D tax credit.
                 During the fourth quarter of fiscal 2011, we recorded a tax
                 benefit of $44 million related to an agreement reached on a
                 component of our fiscal 2006 through 2010 state tax returns.
                 We also recorded $4 million and $14 million in state tax
                 expense during the fourth quarter and fiscal 2011,
                 respectively, because deferred revenue related to the
                 license agreement signed in the first quarter of fiscal 2010
                 with Samsung is taxable in fiscal 2011 but the resulting
                 deferred tax asset will reverse in future years when our
                 state tax rate will be lower.
    (b)          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 Non-GAAP tax
                 provision, the tax items column and the tax provision
                 related to share-based compensation from the GAAP tax
                 provision.

    N/M - Not Meaningful
    Sums may not equal totals due to rounding
                              Qualcomm Incorporated
                           CONSOLIDATED BALANCE SHEETS
                      (In millions, except per share data)
                                   (Unaudited)

                                     ASSETS

                                               September 25,     September 26,
                                                   2011              2010
    Current assets:
    Cash and cash equivalents                       $ 5,462           $ 3,547
    Marketable securities                             6,190             6,732
    Accounts receivable, net                            993               730
    Inventories                                         765               528
    Deferred tax assets                                 537               321
    Other current assets                                346               275
    Total current assets                             14,293            12,133
    Marketable securities                             9,261             8,123
    Deferred tax assets                               1,703             1,922
    Assets held for sale                                746                 -
    Property, plant and equipment, net                2,414             2,373
    Goodwill                                          3,432             1,488
    Other intangible assets, net                      3,099             3,022
    Other assets                                      1,474             1,511
    Total assets                                   $ 36,422          $ 30,572

                      LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
    Trade accounts payable                            $ 969             $ 764
    Payroll and other benefits related
    liabilities                                         644               467
    Unearned revenues                                   610               623
    Loans payable                                       994             1,086
    Income taxes payable                                 18             1,443
    Other current liabilities                         2,054             1,085
    Total current liabilities                         5,289             5,468
    Unearned revenues                                 3,541             3,485
    Other liabilities                                   620               761
    Total liabilities                                 9,450             9,714

    Stockholders' equity:
    Qualcomm stockholders' equity:
    Preferred stock, $0.0001 par value;
    issuable in series;
    8 shares authorized; none outstanding at
    September 25, 2011 and September 26, 2010             -                 -
    Common stock, $0.0001 par value; 6,000
    shares authorized;
    1,681 and 1,612 shares issued and
    outstanding at
    September 25, 2011 and September 26, 2010,
    respectively                                          -                 -
    Paid-in capital                                  10,394             6,856
    Retained earnings                                16,204            13,305
    Accumulated other comprehensive income              353               697
    Total Qualcomm stockholders' equity              26,951            20,858
    Noncontrolling interests                             21                 -
    Total stockholders' equity                       26,972            20,858
    Total liabilities and stockholders' equity     $ 36,422          $ 30,572
                              Qualcomm Incorporated
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (In millions, except per share data)
                                   (Unaudited)

                          Three Months Ended           Twelve Months Ended
                     September 25,  September 26,  September 25, September 26,
                         2011             2010*          2011         2010*

    Revenues:
    Equipment and
    services               $ 2,673        $ 1,950      $ 9,223      $ 6,971
    Licensing                1,444          1,002        5,734        4,011
    Total revenues           4,117          2,952       14,957       10,982

    Operating
    expenses:
    Cost of
    equipment and
    services
    revenues                 1,497            926        4,877        3,301
    Research and
    development                851            628        2,995        2,451
    Selling, general
    and
    administrative             531            440        1,945        1,503
    Other                        -              -          114            -
    Total operating
    expenses                 2,879          1,994        9,931        7,255

    Operating income         1,238            958        5,026        3,727

    Investment
    income, net                 88            214          661          766
    Income from
    continuing
    operations
    before income
    taxes                    1,326          1,172        5,687        4,493
    Income tax
    expense                  (271)          (234)      (1,132)        (973)
    Income from
    continuing
    operations               1,055            938        4,555        3,520
    Discontinued
    operations, net
    of income taxes            (6)           (73)        (313)        (273)
    Net Income               1,049            865        4,242        3,247
    Net loss
    attributable to
    noncontrolling
    interests                    7              -           18            -
    Net income
    attributable to
    Qualcomm               $ 1,056          $ 865      $ 4,260      $ 3,247

    Basic earnings
    (loss) per share
    attributable to
    Qualcomm:
    Continuing
    operations              $ 0.63         $ 0.59       $ 2.76       $ 2.15
    Discontinued
    operations                   -         (0.05)       (0.19)       (0.17)
    Net income              $ 0.63         $ 0.54       $ 2.57       $ 1.98
    Diluted earnings
    (loss) per share
    attributable to
    Qualcomm:
    Continuing
    operations              $ 0.62         $ 0.58       $ 2.70       $ 2.12
    Discontinued
    operations                   -         (0.05)       (0.18)       (0.16)
    Net income              $ 0.62         $ 0.53       $ 2.52       $ 1.96
    Shares used in
    per share
    calculations:
    Basic                    1,681          1,608        1,658        1,643
    Diluted                  1,716          1,621        1,691        1,658

    Dividends per
    share announced        $ 0.215         $ 0.19       $ 0.81       $ 0.72

    *As adjusted for discontinued operations
                              Qualcomm Incorporated
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (In millions)
                                   (Unaudited)

                             Three Months Ended         Twelve Months Ended
                           September      September    September    September
                              25,            26,          25,          26,
                             2011           2010         2011         2010
    Operating
    Activities:
    Net income               $ 1,049        $ 865      $ 4,242      $ 3,247
    Adjustments to
    reconcile net income
    to net cash provided
    by
    operating
    activities:
    Depreciation and
    amortization                 241          171        1,061          666
    Goodwill impairment            -            -          114            -
    Revenues related to
    non-monetary
    exchanges                   (30)         (31)        (123)        (130)
    Income tax provision
    in excess of (less
    than) income tax
    payments                      14           36      (1,204)          116
    Non-cash portion of
    share-based
    compensation expense         256          159          824          612
    Incremental tax
    benefit from stock
    options exercised           (16)         (11)        (183)         (45)
    Net realized gains
    on marketable
    securities and other
    investments                 (33)        (131)        (337)        (405)
    Net impairment
    losses on marketable
    securities and other
    investments                   26           23           52          125
    Other items, net            (12)            6           12         (64)
    Changes in assets
    and liabilities, net
    of effects of
    acquisitions:
    Accounts receivable,
    net                        (161)           73        (140)         (18)
    Inventories                 (19)         (87)         (62)         (80)
    Other assets                (34)           11         (70)         (60)
    Trade accounts
    payable                      165          125         (26)          148
    Payroll, benefits
    and other
    liabilities                  362         (68)          572        (229)
    Unearned revenues             12         (48)          168          193
    Net cash provided by
    operating activities       1,820        1,093        4,900        4,076
    Investing
    Activities:
    Capital expenditures       (194)        (113)        (593)        (426)
    Advanced payment on
    spectrum                       -            -            -      (1,064)
    Purchases of
    available-for-sale
    securities               (2,677)      (1,924)     (10,948)      (8,973)
    Proceeds from sale
    of
    available-for-sale
    securities                 1,306        3,086       10,661       10,440
    Purchases of other
    marketable
    securities                     -        (850)            -        (850)
    Cash received for
    partial settlement
    of investing
    receivables                    -            1           18           34
    Atheros acquisition,
    net of cash acquired           -            -      (3,130)            -
    Other investments
    and acquisitions,
    net of cash acquired       (362)         (49)        (494)         (94)
    Other items, net               1            6          (3)           94
    Net cash (used)
    provided by
    investing activities     (1,926)          157      (4,489)        (839)
    Financing
    Activities:
    Borrowing under
    loans payable                295            -        1,555        1,064
    Repayment of loans
    payable                    (295)            -      (1,555)            -
    Proceeds from
    issuance of common
    stock                        255          170        2,647          689
    Proceeds from put
    option premiums               75            -           75            -
    Proceeds from
    issuance of
    subsidiary shares to
    noncontrolling
    interests                      -            -           62            -
    Incremental tax
    benefit from stock
    options exercised             16           11          183           45
    Repurchase and
    retirement of common
    stock                      (142)        (122)        (142)      (3,016)
    Dividends paid             (361)        (305)      (1,346)      (1,177)
    Change in obligation
    under securities
    lending                        4                        46            -
    Other items, net             (1)          (9)          (7)         (10)
    Net cash (used)
    provided by
    financing activities       (154)        (255)        1,518      (2,405)
    Effect of exchange
    rate changes on cash        (24)           11         (14)          (2)
    Net (decrease)
    increase in cash and
    cash equivalents           (284)        1,006        1,915          830
    Cash and cash
    equivalents at
    beginning of period        5,746        2,541        3,547        2,717
    Cash and cash
    equivalents at end
    of period                $ 5,462      $ 3,547      $ 5,462      $ 3,547

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