Qualcomm Announces Third Quarter Fiscal 2011 Results

By Qualcomm Incorporated, PRNE
Tuesday, July 19, 2011

SAN DIEGO, July 20, 2011 -


Revenues $3.6 Billion

GAAP EPS $0.61, Non-GAAP EPS $0.73

–  Raises Fiscal 2011 Revenue and Non-GAAP Earnings
Guidance  

 

Qualcomm Incorporated (Nasdaq:  QCOM), a leading developer
and innovator of advanced wireless technologies, products and
services, today announced results for the third quarter of fiscal
2011 ended June 26, 2011.

“Qualcomm delivered strong year-over-year results again this
quarter as our business performed well across all key guidance
metrics.  In addition, we successfully completed the
acquisition of Atheros, positioning us to further expand our
opportunities going forward,” said Dr. Paul E. Jacobs, chairman and
CEO of Qualcomm.  “Looking forward, we continue to see healthy
growth in CDMA-based device shipments of approximately 18 percent
in calendar year 2011, and we are pleased to be raising our revenue
and Non-GAAP earnings guidance for the fiscal year, driven
primarily by strong global smartphone adoption and the addition of
Atheros.”

Third Quarter Results (GAAP)
 

  • Revenues: (1) $3.62 billion, up 34 percent year-over-year
    (y-o-y) and down 6 percent sequentially.
  • Operating income: (1) $1.11 billion, up 25 percent y-o-y and
    down 22 percent sequentially.
  • Net income: (2) $1.04 billion, up 35 percent y-o-y and 4
    percent sequentially.
  • Diluted earnings per share: (2) $0.61, up 30 percent y-o-y and
    3 percent sequentially.  
  • Effective tax rate: (1) 23 percent for the quarter.
  • Operating cash flow:  $1.26 billion, up 33 percent y-o-y;
    35 percent of revenues.
  • Return of capital to stockholders:  $360 million, or
    $0.215 per share, of cash dividends paid.

(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.

Non-GAAP Third Quarter 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.  Third quarter of fiscal 2011
Non-GAAP results excluded $45 million related to the step-up of
inventories to fair value and $32 million in amortization of
intangible assets that resulted from the acquisition of Atheros
Communications, Inc. (Atheros).  

  • Revenues:  $3.62 billion, up 34 percent y-o-y and down 6
    percent sequentially.
  • Operating income:  $1.39 billion, up 41 percent y-o-y and
    down 16 percent sequentially.
  • Net income:  $1.24 billion, up 32 percent y-o-y and down
    14 percent sequentially.
  • Diluted earnings per share:  $0.73, up 28 percent y-o-y
    and down 15 percent sequentially.  The current quarter
    excludes $0.01 earnings per share attributable to the QSI segment,
    $0.09 loss per share attributable to certain share-based
    compensation and $0.04 loss per share attributable to
    acquisition-related items.
  • Effective tax rate:  21 percent for the quarter.
     
  • Free cash flow:  $1.16 billion, up 22 percent y-o-y; 32
    percent of revenues (defined as net cash from operating activities
    less capital expenditures).

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 comparisons summarized above for the third quarter of
fiscal 2011, the following should be noted:  results for the
second quarter of fiscal 2011 included $401 million in revenues
related to prior quarters as a result of agreements entered into
with two licensees to settle disputes and $120 million in
impairment charges related to our Firethorn division, including
$114 million in goodwill impairment.

Third Quarter Key Business Metrics

  • CDMA-based Mobile Station Modem™ (MSM™) shipments:  120
    million units, up 17 percent y-o-y and 2 percent sequentially.
  • March quarter total reported device sales:  approximately
    $36.4 billion, up 44 percent y-o-y and down 9 percent sequentially.

    • March quarter estimated CDMA-based device shipments:
       approximately 170 to 174 million units, at an estimated
      average selling price of approximately $209 to $215 per unit.
         

Cash and Marketable Securities
 

Our cash, cash equivalents and marketable securities totaled
$20.2 billion at the end of the third quarter of fiscal 2011,
compared to $22.1 billion at the end of the second quarter of
fiscal 2011 and $17.6 billion a year ago.  Upon the close of
the Atheros acquisition on May 24, 2011, we paid $3.1 billion in
cash, net of the cash acquired.  On July 13, 2011, we
announced a cash dividend of $0.215 per share payable on September
23, 2011
to stockholders of record as of August 26, 2011.

Research and Development


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

    Third quarter fiscal
     2011                    $661        $95       $1     $757
    As a % of revenues         18%                          21%
    Third quarter fiscal
     2010(*)                 $546        $72       $5     $623
    As a % of revenues         20%                          23%
    Year-over-year
     change ($)                21%        32%     N/M       22%

    *As adjusted for discontinued operations
    N/M - Not Meaningful

Non-GAAP R&D expenses increased 21 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
                       --------   ------------   ----------- ---    ----

    Third quarter
     fiscal 2011            $365           $84         $18    $8   $475
    As a % of revenues        10%                                    13%
    Third quarter
     fiscal 2010(*)         $321           $63          $-  $(52)  $332
    As a % of revenues        12%                                    12%
    Year-over-year
     change ($)               14%           33%        N/M   N/M     43%

    *As adjusted for discontinued operations

Non-GAAP selling, general and administrative (SG&A) expenses
increased 14 percent y-o-y primarily due to an increase in
employee-related costs.  QSI SG&A expenses for the third
quarter of fiscal 2010 included a $62 million gain on the sale of
our Australia spectrum license.

Effective Income Tax Rate

Our fiscal 2011 effective income tax rates are estimated to be
20 percent for GAAP and 21 percent for Non-GAAP.  Our fiscal
2011 estimated GAAP tax rate increased from our prior estimate of
17 percent primarily as a result of the reclassification of tax
benefits to discontinued operations and lower foreign earnings
related to the step-up of acquired Atheros assets to fair value.
The third quarter GAAP tax rate of 23 percent was a result of this
increase in the estimated annual effective tax rate.

During the fourth quarter of fiscal 2011, we reached agreement
with the California Franchise Tax Board on a component of our
fiscal 2006 through 2010 tax returns.  As a result of this
agreement, we expect to record a $44 million tax benefit that will
be excluded from our fourth quarter fiscal 2011 Non-GAAP
results.  This estimated benefit, which is included in our
guidance, will reduce our fiscal 2011 estimated GAAP tax rate from
20 percent to 19 percent.

Qualcomm Strategic Initiatives

The QSI segment makes strategic investments in early-stage and
other companies and in wireless spectrum, such as the Broadband
Wireless Access spectrum won in the India auction.  QSI also
includes the discontinued operations of our FLO TV subsidiary.
 GAAP results for the third quarter of fiscal 2011 included
$0.01 earnings per share for the QSI segment.  During the
third quarter of fiscal 2011, in connection with the presentation
of the FLO TV business as discontinued operations and the
requirement to compute the tax effect of discontinued operations on
a discrete basis, we recorded a tax benefit of $43 million for tax
benefits related to losses incurred in the first and second quarter
of fiscal 2011 that were previously included in the calculation of
the estimated annual effective tax rate.

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

      FOURTH FISCAL QUARTER
                                          Q4 FY10       Current Guidance
                                           Results      Q4 FY11 Estimates

        Revenues                            $2.95B        $3.86B - $4.16B
          Year-over-year change                         increase 31% -41%
        Non-GAAP Diluted earnings
         per share (EPS)                     $0.68         $0.75 - $0.80
          Year-over-year change                         increase 10% -18%
            Diluted EPS attributable to QSI ($0.05)                $0.00
            Diluted EPS attributable
             to share-based compensation    ($0.07)               ($0.10)
            Diluted EPS attributable
             to acquisition-related items    $0.00                ($0.07)
            Diluted EPS attributable
             to certain tax items (1)       ($0.02)                $0.02
        GAAP Diluted EPS                     $0.53         $0.60 - $0.65
          Year-over-year change                         increase 13% -23%

        Metrics
        MSM shipments                 approx. 111M     approx. 120M -125M
          Year-over-year change                          increase 8% -13%
        Total reported device sales (2)     $28.3B*       $38.0B - $41.0B*
          Year-over-year change                         increase 34% -45%

        *Est. sales in June quarter, reported in September quarter

      FISCAL YEAR
                           FY 2010       Prior Guidance    Current Guidance
                          Results (3)   FY 2011 Estimates  FY 2011 Estimates

        Revenues             $10.98B    $14.1B - $14.7B     $14.7B - $15.0B
          Year-over-year
           change                     increase 28% -34%   increase 34% -37%
        Non-GAAP Diluted EPS  $2.46      $3.05 - $3.13       $3.15 - $3.20
          Year-over-year change       increase 24% -27%   increase 28% -30%
            Diluted EPS
             attributable
             to QSI           ($0.13)           ($0.22)             ($0.22)
            Diluted EPS
             attributable to
             share-based
             compensation     ($0.27)           ($0.33)             ($0.35)
            Diluted EPS
             attributable to
             acquisition-related
             items             $0.00             $0.00              ($0.12)
            Diluted EPS
             attributable to
             certain tax
             items (1)        ($0.10)            $0.01               $0.04
        GAAP Diluted EPS       $1.96     $2.51 - $2.59       $2.50 - $2.55
          Year-over-year
           change                     increase 28% -32%  increase 28% -30%

        Metrics
        Est. fiscal year*
         CDMA-based device
         average selling
         price
         range (2)  approx $183 -$189  approx $199 -$209   approx $204 -$210

        *Shipments in Sept. to June quarters, reported in Dec. to Sept.
        quarters

      CALENDAR YEAR Device Estimates (2)
                        Calendar 2010      Prior Guidance    Current Guidance
                        Estimates        Calendar 2011       Calendar 2011
                                              Estimates          Estimates
       Est. CDMA-based
        device shipments
       March quarter approx. 134M -138M    not provided  approx. 170M -174M
       June quarter  approx. 153M -157M    not provided        not provided
       September
        quarter      approx. 165M -169M    not provided        not provided
       December
        quarter      approx. 195M -200M    not provided        not provided
       Est. Calendar
        year range
    (approx.)               646M - 663M     750M - 800M         750M - 800M
                              Midpoint         Midpoint            Midpoint
      Est. total
        CDMA-based units  approx. 655M       approx. 775M        approx. 775M
       Est. CDMA units    approx. 238M       approx. 250M        approx. 245M
       Est. WCDMA units   approx. 417M       approx. 525M        approx. 530M

    (1) During the fourth quarter of fiscal 2011, we reached agreement with
        the California Franchise Tax Board on a component of our fiscal 2006
        through 2010 tax returns.  As a result of this agreement, we expect
        to record a $44 million tax benefit that will be excluded from our
        fourth quarter fiscal 2011 Non-GAAP results.
    (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 is reported
        with the activity for the particular period.
    (3) As adjusted to reflect the reclassification of revenues related to
        FLO TV to discontinued operations.

    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)
    --------                     ---     ---      ---      -----------
    Q3 - FISCAL 2011
    ----------------
    Revenues                  $2,194   $1,257     $164             $8
      Change from prior year      30%      48%       1%           N/M
      Change from prior
       quarter                    12%    (28%)       4%           N/M
    Operating income
     (loss)
      Change from prior year
      Change from prior
       quarter
    EBT                         $430   $1,092     ($13)           $65
      Change from prior year       6%      62%     N/M            N/M
      Change from prior
       quarter                     3%    (31%)     N/M            N/M
    EBT as a % of revenues        20%      87%     N/M            N/M
    Discontinued
     operations, net of
     tax (5)
    Net income (loss)
      Change from prior year
      Change from prior
       quarter
    Diluted EPS
      Change from prior year
      Change from prior
       quarter
    Diluted shares used
    Q2 - FISCAL 2011
    ----------------
    Revenues                  $1,962   $1,746     $157             $5
    Operating income
     (loss)
    EBT                          417    1,575     (135)            13
    Discontinued
     operations, net of
     tax (5)
    Net income (loss)
    Diluted EPS
    Diluted shares used
    Q1 - FISCAL 2011
    ----------------
    Revenues                  $2,116   $1,057     $172             $3
    Operating income
     (loss)
    EBT                          640      892        -            128
    Discontinued
     operations, net of
     tax (5)
    Net income (loss)
    Diluted EPS
    Diluted shares used
    Q4 - FISCAL 2010
    ----------------
    Revenues                  $1,860     $921     $171             $-
    Operating income
     (loss)
    EBT                          519      754       (2)            90
    Discontinued
     operations, net of
     tax (5)
    Net income (loss)
    Diluted EPS
    Diluted shares used
    Q3 - FISCAL 2010
    ----------------
    Revenues                  $1,691     $847     $162             $-
    Operating income
     (loss)
    EBT                          404      673        6             78
    Discontinued
     operations, net of
     tax (5)
    Net income (loss)
    Diluted EPS
    Diluted shares used

                                                           Tax
                                                          Items
    SEGMENTS                  Non-GAAP    Share-Based       (2)
    --------                  --------  Compensation*    ------
                                        -------------
    Q3 - FISCAL 2011
    ----------------
    Revenues                    $3,623              $-        $-
      Change from prior year        34%
      Change from prior
       quarter                     (6%)
    Operating income
     (loss)                     $1,393           ($193)        -
      Change from prior year        41%           (33%)
      Change from prior
       quarter                    (16%)              3%
    EBT                         $1,574           ($193)        -
      Change from prior year        36%           (33%)
      Change from prior
       quarter                    (16%)              3%
    EBT as a % of revenues          43%            N/M
    Discontinued
     operations, net of
     tax (5)                        $-              $-        $-
    Net income (loss)            1,240            (147)       (4)
      Change from prior year        32%           (32%)      N/M
      Change from prior
       quarter                    (14%)            (1%)      N/M
    Diluted EPS                  $0.73          ($0.09)       $-
      Change from prior year        28%           (29%)      N/M
      Change from prior
       quarter                    (15%)              -       N/M
    Diluted shares used          1,709           1,709     1,709
    Q2 - FISCAL 2011
    ----------------
    Revenues                    $3,870              $-        $-
    Operating income
     (loss)                      1,652            (199)        -
    EBT                          1,870            (199)        -
    Discontinued
     operations, net of
     tax (5)                         -              (2)        -
    Net income (loss)            1,450            (146)       (3)
    Diluted EPS                  $0.86          ($0.09)       $-
    Diluted shares used          1,689           1,689     1,689
    Q1 - FISCAL 2011
    ----------------
    Revenues                    $3,348              $-        $-
    Operating income
     (loss)                      1,416            (169)        -
    EBT                          1,660            (169)        -
    Discontinued
     operations, net of
     tax (5)                         -              (2)        -
    Net income (loss)            1,345            (116)       28
    Diluted EPS                  $0.82          ($0.07)    $0.02
    Diluted shares used          1,648           1,648     1,648
    Q4 - FISCAL 2010
    ----------------
    Revenues                    $2,952              $-        $-
    Operating income
     (loss)                      1,130            (157)        -
    EBT                          1,361            (157)        -
    Discontinued
     operations, net of
     tax (5)                         -              (3)        -
    Net income (loss)            1,105            (120)      (40)
    Diluted EPS                  $0.68          ($0.07)   ($0.02)
    Diluted shares used          1,621           1,621     1,621
    Q3 - FISCAL 2010
    ----------------
    Revenues                    $2,700              $-        $-
    Operating income
     (loss)                        991            (145)        -
    EBT                          1,161            (145)        -
    Discontinued
     operations, net of
     tax (5)                         -              (3)        -
    Net income (loss)              936            (111)      (54)
    Diluted EPS                  $0.57          ($0.07)   ($0.03)
    Diluted shares used          1,642           1,642     1,642

                                Acquisition-
                                   Related
    SEGMENTS                      Items (3)    QSI (4)*     GAAP
    --------                    ------------   --------     ----
    Q3 - FISCAL 2011
    ----------------
    Revenues                             $-        $-    $3,623
      Change from prior year                                 34%
      Change from prior
       quarter                                               (6%)
    Operating income
     (loss)                            ($77)     ($10)   $1,113
      Change from prior year            N/A       N/M        25%
      Change from prior
       quarter                          N/M        41%      (22%)
    EBT                                ($77)     ($30)   $1,274
      Change from prior year            N/A       N/M        18%
      Change from prior
       quarter                          N/M        35%      (21%)
    EBT as a % of revenues              N/M       N/M        35%
    Discontinued
     operations, net of
     tax (5)                             $-       $44       $44
    Net income (loss)                   (73)       19     1,035
      Change from prior year            N/A       N/M        35%
      Change from prior
       quarter                          N/M       N/M         4%
    Diluted EPS                      ($0.04)    $0.01     $0.61
      Change from prior year            N/A       N/M        30%
      Change from prior
       quarter                          N/M       N/M         3%
    Diluted shares used               1,709     1,709     1,709
    Q2 - FISCAL 2011
    ----------------
    Revenues                             $-        $-    $3,870
    Operating income
     (loss)                              (6)      (17)    1,430
    EBT                                  (6)      (46)    1,619
    Discontinued
     operations, net of
     tax (5)                              -      (267)     (269)
    Net income (loss)                    (6)     (296)      999
    Diluted EPS                          $-    ($0.18)    $0.59
    Diluted shares used               1,689     1,689     1,689
    Q1 - FISCAL 2011
    ----------------
    Revenues                             $-        $-    $3,348
    Operating income
     (loss)                               -         -     1,247
    EBT                                   -       (21)    1,470
    Discontinued
     operations, net of
     tax (5)                              -       (80)      (82)
    Net income (loss)                     -       (87)    1,170
    Diluted EPS                          $-    ($0.05)    $0.71
    Diluted shares used               1,648     1,648     1,648
    Q4 - FISCAL 2010
    ----------------
    Revenues                             $-        $-    $2,952
    Operating income
     (loss)                               -       (15)      958
    EBT                                   -       (32)    1,172
    Discontinued
     operations, net of
     tax (5)                              -       (70)      (73)
    Net income (loss)                     -       (80)      865
    Diluted EPS                          $-    ($0.05)    $0.53
    Diluted shares used               1,621     1,621     1,621
    Q3 - FISCAL 2010
    ----------------
    Revenues                             $-        $-    $2,700
    Operating income
     (loss)                               -        47       893
    EBT                                   -        60     1,076
    Discontinued
     operations, net of
     tax (5)                              -       (62)      (65)
    Net income (loss)                     -        (4)      767
    Diluted EPS                          $-        $-     $0.47
    Diluted shares used               1,642     1,642     1,642


                                                              Non-GAAP
                                                            Reconciling
    SEGMENTS                      QCT     QTL     QWI        Items (1)
    --------                      ---     ---     ---        -----------
    Q2 - FISCAL 2010
    ----------------
    Revenues                   $1,537    $974    $152              ($2)
    Operating income (loss)
    EBT                           344     821      (1)              94
    Discontinued operations,
     net of tax (5)
    Net income (loss)
    Diluted EPS
    Diluted shares used
    Q1 - FISCAL 2010
    ----------------
    Revenues                   $1,608    $917    $142               $1
    Operating income (loss)
    EBT                           425     772       9              104
    Discontinued operations,
     net of tax (5)
    Net income (loss)
    Diluted EPS
    Diluted shares used
    9 MONTHS - FISCAL 2011
    ----------------------
    Revenues                   $6,272  $4,061    $493              $14
      Change from prior year       30%     48%      8%             N/M
    Operating income (loss)
      Change from prior year
    EBT                        $1,487  $3,559   ($147)            $205
      Change from prior year       27%     57%    N/M              N/M
    Discontinued operations,
     net of tax (5)
    Net income (loss)
      Change from prior year
    Diluted EPS
      Change from prior year
    Diluted shares used
    9 MONTHS - FISCAL 2010
    ----------------------
    Revenues                   $4,835  $2,738    $456               $1
    Operating income (loss)
    EBT                         1,173   2,266      14              274
    Discontinued operations,
     net of tax (5)
    Net income (loss)
    Diluted EPS
    Diluted shares used
    12 MONTHS - FISCAL 2010
    -----------------------
    Revenues                   $6,695  $3,659    $628               $-
    Operating income (loss)
    EBT                         1,693   3,020      12              361
    Discontinued operations,
     net of tax (5)
    Net income (loss)
    Diluted EPS
    Diluted shares used

                                               Share-       Tax Items
    SEGMENTS                   Non-GAAP        Based            (2)
    --------                   --------    Compensation*   ----------
                                           -------------
    Q2 - FISCAL 2010
    ----------------
    Revenues                      $2,661              $-          $-
    Operating income (loss)        1,065            (150)          -
    EBT                            1,258            (150)          -
    Discontinued operations,
     net of tax (5)                    -              (3)          -
    Net income (loss)                989             (98)        (33)
    Diluted EPS                    $0.59          ($0.06)     ($0.02)
    Diluted shares used            1,678           1,678       1,678
    Q1 - FISCAL 2010
    ----------------
    Revenues                      $2,668              $-          $-
    Operating income (loss)        1,134            (147)          -
    EBT                            1,310            (147)          -
    Discontinued operations,
     net of tax (5)                    -              (3)          -
    Net income (loss)              1,041            (114)        (32)
    Diluted EPS                    $0.62          ($0.07)     ($0.02)
    Diluted shares used            1,691           1,691       1,691
    9 MONTHS - FISCAL 2011
    ----------------------
    Revenues                     $10,840              $-          $-
      Change from prior year          35%
    Operating income (loss)       $4,461           ($561)          -
      Change from prior year          40%           (27%)
    EBT                           $5,104           ($561)          -
      Change from prior year          37%           (27%)
    Discontinued operations,
     net of tax (5)                   $-             ($4)          -
    Net income (loss)              4,036            (410)         21
      Change from prior year          36%            (27%)       N/M
    Diluted EPS                    $2.40          ($0.24)      $0.01
      Change from prior year          35%            (26%)       N/M
    Diluted shares used            1,682           1,682       1,682
    9 MONTHS - FISCAL 2010
    ----------------------
    Revenues                      $8,030              $-          $-
    Operating income (loss)        3,189            (441)          -
    EBT                            3,727            (441)          -
    Discontinued operations,
     net of tax (5)                    -              (8)          -
    Net income (loss)              2,967            (322)       (119)
    Diluted EPS                    $1.78          ($0.19)     ($0.07)
    Diluted shares used            1,670           1,670       1,670
    12 MONTHS - FISCAL 2010
    -----------------------
    Revenues                     $10,982              $-          $-
    Operating income (loss)        4,316            (597)          -
    EBT                            5,086            (597)          -
    Discontinued operations,
     net of tax (5)                    -             (11)          -
    Net income (loss)              4,071            (442)       (159)
    Diluted EPS                    $2.46          ($0.27)     ($0.10)
    Diluted shares used            1,658           1,658       1,658


                                  Acquisition-
                                   Related        QSI
    SEGMENTS                       Items (3)      (4)*    GAAP
    --------                      ------------    ----    ----
    Q2 - FISCAL 2010
    ----------------
    Revenues                              $-       $-   $2,661
    Operating income (loss)               (3)     (16)     896
    EBT                                   (3)     (16)   1,089
    Discontinued operations,
     net of tax (5)                        -      (75)     (78)
    Net income (loss)                     (3)     (81)     774
    Diluted EPS                           $-   ($0.05)   $0.46
    Diluted shares used                1,678    1,678    1,678
    Q1 - FISCAL 2010
    ----------------
    Revenues                              $-       $-   $2,668
    Operating income (loss)                -       (7)     980
    EBT                                    -       (7)   1,156
    Discontinued operations,
     net of tax (5)                        -      (54)     (57)
    Net income (loss)                      -      (54)     841
    Diluted EPS                           $-   ($0.03)   $0.50
    Diluted shares used                1,691    1,691    1,691
    9 MONTHS - FISCAL 2011
    ----------------------
    Revenues                              $-       $-  $10,840
      Change from prior year                                35%
    Operating income (loss)             ($83)    ($28)  $3,789
      Change from prior year             N/M      N/M       37%
    EBT                                 ($83)    ($97)  $4,363
      Change from prior year             N/M      N/M       31%
    Discontinued operations,
     net of tax (5)                        -    ($303)   ($307)
    Net income (loss)                    (79)    (364)   3,204
      Change from prior year             N/M      N/M       35%
    Diluted EPS                       ($0.05)  ($0.22)   $1.90
      Change from prior year             N/M      N/M       33%
    Diluted shares used                1,682    1,682    1,682
    9 MONTHS - FISCAL 2010
    ----------------------
    Revenues                              $-       $-   $8,030
    Operating income (loss)               (3)      25    2,770
    EBT                                   (3)      39    3,322
    Discontinued operations,
     net of tax (5)                        -     (192)    (200)
    Net income (loss)                     (3)    (141)   2,382
    Diluted EPS                           $-   ($0.08)   $1.43
    Diluted shares used                1,670    1,670    1,670
    12 MONTHS - FISCAL 2010
    -----------------------
    Revenues                              $-       $-  $10,982
    Operating income (loss)               (3)      11    3,727
    EBT                                   (3)       7    4,493
    Discontinued operations,
     net of tax (5)                        -     (262)    (273)
    Net income (loss)                     (3)    (220)   3,247
    Diluted EPS                           $-   ($0.13)   $1.96
    Diluted shares used                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
           reenactment of the federal R&D tax credit. Also, during the
           first, second and third quarter of fiscal 2011, we recorded $3
           million, $3 million and $4 million, respectively, 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.
           Our first, second and third quarter fiscal 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
           quarter of fiscal 2011, Non-GAAP results excluded $45 million
           related to the step-up of inventories to fair value and $32
           million in amortization of intangible assets that resulted from
           the acquisition of Atheros.
    (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 third quarter fiscal 2011 earnings conference call
will be broadcast live on July 20, 2011, beginning at 1:45 p.m.
Pacific Time
(PT) on the Company’s web site at: href="www.qualcomm.com/">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 href="www.qualcomm.com/">www.qualcomm.com
immediately prior to commencement of the call.  A taped audio
replay will be available via telephone on July 20, 2011, beginning
at approximately 5:00 p.m. PT through August 20, 2011 at 9:00 p.m.
PT
.  To listen to the replay, U.S. callers may dial (800)
642-1687 and international callers may dial +1-706-645-9291.
 U.S. and international callers should use reservation number
78821001.  An audio replay of the conference call will be
available on the Company’s web site at href="www.qualcomm.com/">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:
href="investor.qualcomm.com/results.cfm">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
wireless communications, connecting people more closely to
information, entertainment and each other.  Today, Qualcomm
technologies are powering the convergence of mobile communications
and consumer electronics, making wireless devices and services more
personal, affordable and accessible to people everywhere.  For
more information, please visit href="www.qualcomm.com/">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 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.  We
believe this practice also conforms to the approach taken by many
other leading technology companies.

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 rate of deployment and adoption of, and demand for, our
technologies in communications, products and services; the
uncertainty of global economic conditions and its potential impact
on demand for our products, services or applications and 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 manufacturers and
suppliers; foreign currency fluctuations; strategic investments and
transactions we have or may pursue; defects or errors in our
products and services; the development and commercial success of
our QMT division’s mirasol® 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 26,
2010
and the most recent Form 10-Q.  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.
 Mobile Station Modem, MSM, and FLO TV are trademarks of
Qualcomm Incorporated.  mirasol is a registered trademark of
Qualcomm MEMS Technologies, Inc.  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 June 26, 2011
                                 (Unaudited)                                   Non-GAAP  Share-Based    Tax
                                  Results   Compensation  Items
                                  -------   ------------  -----
     ($ in millions except per
      share data)

      Cost of Sales               $1,204             $14    $-

      R&D                            661              95     -

      SG&A                           365              84     -

      Operating income (loss)      1,393            (193)    -

      Investment income (loss),
       net                           181  (b)          -     -

      Tax rate                        21%             24%  N/A

      Net income (loss)           $1,240           $(147)  $(4) (d)

      Diluted earnings (loss) per
       share (EPS)                 $0.73          $(0.09)   $-

      Operating cash flow         $1,379            $(35)   $-
      Operating cash flow as % of
       revenues                       38%            N/A   N/A

      Free cash flow (e)          $1,160            $(35)   $-
      Free cash flow as a % of
       revenues                       32%            N/A   N/A

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

      Cost of Sales                   $59         $1      $1,278

      R&D                               -          1         757

      SG&A                             18          8         475

      Operating income (loss)         (77)       (10)      1,113

      Investment income (loss),
       net                              -        (20) (c)    161

      Tax rate                        N/M        N/M          23%

      Net income (loss)              $(73)       $19      $1,035

      Diluted earnings (loss) per
       share (EPS)                 $(0.04)     $0.01       $0.61

      Operating cash flow              $-       $(80)     $1,264
      Operating cash flow as % of
       revenues                       N/A        N/A          35%

      Free cash flow (e)               $-       $(80)     $1,045
      Free cash flow as a % of
       revenues                       N/A        N/A          29%
    (a)      Beginning in the third quarter of fiscal 2011, Non-GAAP
             results exclude certain items related to acquisitions.
             During the third quarter of fiscal 2011, Non-GAAP
             results excluded $45 million related to the step-up of
             inventories to fair value and $32 million in
             amortization of intangible assets that resulted from the
             acquisition of Atheros.
    (b)      Included $117 million in interest and dividend income
             related to cash, cash equivalents and marketable
             securities, which were not part of the Company's
             strategic investments, and $72 million in net realized
             gains on investments, partially offset by $5 million in
             other-than-temporary losses on investments and $3
             million in interest expense.
    (c)      Included $25 million in interest expense and $5 million
             in other-than-temporary losses on investments,
             partially offset by $10 million in interest and dividend
             income related to cash, cash equivalents and marketable
             securities.
    (d)      Included $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
             June 26, 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 Nine Months Ended June 26, 2011
                                  (Unaudited)                                    Non-GAAP   Share-Based        Tax
                                   Results    Compensation (a)  Items
                                   -------    ------------      -----
     ($ in millions except per
      share data)

      Cost of Sales                 $3,272              $44      $-

      R&D                            1,855              277       -

      SG&A                           1,138              240       -

      Operating income (loss)        4,461  (c)        (561)      -

      Investment income (loss), net    643  (d)           -       -

      Tax rate                          21%              28%    N/A

      Net income (loss)             $4,036            $(410)    $21  (f)

      Diluted earnings (loss) per
       share (EPS)                   $2.40           $(0.24)  $0.01

      Operating cash flow           $3,532            $(167)     $-
      Operating cash flow as % of
       revenues                         33%             N/A     N/A

      Free cash flow (g)            $3,138            $(167)     $-
      Free cash flow as a % of
       revenues                         29%             N/A     N/A

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

      Cost of Sales                     $59          $5      $3,380

      R&D                                 6           6       2,144

      SG&A                               18          17       1,413

      Operating income (loss)           (83)        (28)      3,789

      Investment income (loss), net       -         (69) (e)    574

      Tax rate                          N/M         N/M          20%

      Net income (loss)                $(79)      $(364)     $3,204

      Diluted earnings (loss) per
       share (EPS)                   $(0.05)     $(0.22)      $1.90

      Operating cash flow                $-       $(285)     $3,080
      Operating cash flow as % of
       revenues                         N/A         N/A          28%

      Free cash flow (g)                 $-       $(291)     $2,680
      Free cash flow as a % of
       revenues                         N/A         N/A          25%        (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 the third quarter of fiscal 2011, Non-GAAP results
               excluded $45 million related to the step-up of
               inventories to fair value and $32 million in amortization
               of intangible assets that resulted from the acquisition of
               Atheros. In addition, during the first nine months of
               fiscal 2011, Non-GAAP results excluded $6 million in
               acquired in-process research and development expense.
    (c)        During the first nine months of fiscal 2011, we recorded
               impairment charges of $120 million related to our
               Firethorn division, including $114 million in goodwill
               impairment.
    (d)        Included $369 million in interest and dividend income
               related to cash, cash equivalents and marketable
               securities, which were not part of our strategic
               investments, and $302 million in net realized gains on
               investments, partially offset by $16 million in other-
               than-temporary losses on investments and $11 million in
               interest expense.
    (e)        Included $72 million in interest expense, $10 million in
               other-than-temporary losses on investments and $5
               million in equity in losses of investees, partially offset
               by $15 million in interest and dividend income related to
               cash, cash equivalents and marketable securities and $1
               million in net realized gains on investments.
    (f)        Included a tax benefit of $32 million related to fiscal
               2010 due to the retroactive reenactment of the federal R&D
               tax credit and $10 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.
    (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 nine months ended June
               26, 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 June 26, 2011
                                 --------------------------------                                  Share-Based
                   Non-GAAP      Compensation            QSI       GAAP
                   --------      ------------            ---       ----
    Net cash
     provided
     (used) by
     operating
     activities       $1,379           $(35) (a)        $(80)    $1,264
    Less:  capital
     expenditures       (219)             -                -       (219)
                        ----            ---              ---       ----
      Free cash flow  $1,160           $(35)            $(80)    $1,045
                      ======           ====             ====     ======

    Revenues          $3,623             $-               $-     $3,623
    Free cash flow
     as a % of
     revenues             32%           N/A              N/M         29%

    Other
     supplemental
     cash
     disclosures:
       Cash transfers
        from QSI         $(4)            $-               $4         $-
       Cash transfers
        to QSI (b)       (89)             -               89          -
                         ---            ---              ---        ---
         Net cash
          transfers     $(93)            $-              $93         $-
                        ====            ===              ===        ===

                                 Nine Months Ended June 26, 2011
                                 -------------------------------                                     Share-Based
                      Non-GAAP      Compensation           QSI          GAAP
                      --------      ------------           ---          ----
    Net cash
     provided
     (used) by
     operating
     activities          $3,532           $(167) (a)      $(285)      $3,080
    Less:  capital
     expenditures          (394)              -              (6)        (400)
                           ----             ---             ---         ----
      Free cash flow     $3,138           $(167)          $(291)      $2,680
                         ======           =====           =====       ======

    Revenues            $10,840              $-              $-      $10,840
    Free cash flow
     as a % of
     revenues                29%            N/A             N/M           25%

    Other
     supplemental
     cash
     disclosures:
       Cash transfers
        from QSI (c)        $67              $-            $(67)          $-
       Cash transfers
        to QSI (b)         (330)              -             330            -
                           ----             ---             ---          ---
         Net cash
          transfers       $(263)             $-            $263           $-
                          =====             ===            ====          ===

                                 Three Months Ended June 27, 2010
                                 --------------------------------

                                     Share-Based
                       Non-GAAP      Compensation          QSI         GAAP
                       --------      ------------          ---         ----
    Net cash
     provided
     (used) by
     operating
     activities          $1,051         $(3) (a)         $(97)         $951
    Less:  capital
     expenditures           (97)          -               (20)         (117)
                            ---         ---               ---          ----
      Free cash flow       $954         $(3)            $(117)         $834
                           ====         ===             =====          ====

                                 Nine Months Ended June 27, 2010
                                 -------------------------------                                     Share-Based
                      Non-GAAP      Compensation           QSI          GAAP
                      --------      ------------           ---          ----
    Net cash
     provided
     (used) by
     operating
     activities          $3,297           $(34) (a)      $(280)       $2,983
    Less:  capital
     expenditures          (249)             -             (64)         (313)
                           ----            ---             ---          ----
      Free cash flow     $3,048           $(34)          $(344)       $2,670
                         ======           ====           =====        ======

    (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) Cash primarily from the issuance of subsidiary shares to
        noncontrolling interests.
    N/M - Not Meaningful
    N/A - Not Applicable
                                Qualcomm Incorporated
              Reconciliation of Non-GAAP Tax Rate to GAAP Tax Rate
                                 (in millions)
                                  (Unaudited)

                                      Three Months Ended June 26, 2011
                                      --------------------------------
                                    Non-GAAP      Share-Based     Tax Items
                                    Results       Compensation        (a)
                                    -------       ------------      ------

    Income (loss) from continuing
     operations before income
     taxes                            $1,574             $(193)         $-
    Income tax (expense) benefit        (334)               46          (4)
                                        ----               ---         ---
      Income from continuing
       operations                     $1,240             $(147)        $(4)
                                      ======             =====         ===

    Tax rate                              21%               24%        N/A

                                       Acquisition-
                                         Related                    GAAP
                                          Items        QSI (b)    Results
                                          -----        -------    -------

    Income (loss) from continuing
     operations before income
     taxes                                    $(77)        $(30)    $1,274
    Income tax (expense) benefit                 4           (1)      (289)
                                               ---          ---       ----
      Income from continuing
       operations                             $(73)        $(31)      $985
                                              ====         ====       ====

    Tax rate                                   N/M          N/M         23%

                                     Nine Months Ended June 26, 2011
                                     -------------------------------
                                   Non-GAAP        Share-Based     Tax Items
                                    Results        Compensation       (a)
                                    -------        ------------      ------

    Income (loss) from continuing
     operations before income
     taxes                            $5,104             $(561)          $-
    Income tax (expense) benefit      (1,068)              155           21
                                      ------               ---          ---
      Income from continuing
       operations                     $4,036             $(406)         $21
                                      ======             =====          ===

    Tax rate                              21%               28%         N/A

                                       Acquisition-
                                         Related                    GAAP
                                          Items        QSI (b)    Results
                                          -----        -------    -------

    Income (loss) from continuing
     operations before income
     taxes                                    $(83)      $(97)    $4,363
    Income tax (expense) benefit                 4         26       (862)
                                               ---        ---       ----
      Income from continuing
       operations                             $(79)      $(71)    $3,501
                                              ====       ====     ======

    Tax rate                                   N/M        N/M         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. Also, during the first,
           second and third quarter of fiscal 2011, we recorded $3 million,
           $3 million and $4 million, respectively, 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.
    (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
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                      (In millions, except per share data)
                                  (Unaudited)

                                     ASSETS
                                                         June        September
                                                          26,            26,
                                                         2011           2010
                                                         ----           ----
    Current assets:
      Cash and cash equivalents                        $5,746          $3,547
      Marketable securities                             4,982           6,732
      Accounts receivable, net                            832             730
      Inventories                                         753             528
      Deferred tax assets                                 310             321
      Other current assets                                210             275
                                                          ---             ---
              Total current assets                     12,833          12,133
    Marketable securities                               9,493           8,123
    Deferred tax assets                                 1,884           1,922
    Assets held for sale                                  746               -
    Property, plant and equipment, net                  2,267           2,373
    Goodwill                                            3,195           1,488
    Other intangible assets, net                        3,098           3,022
    Other assets                                        1,584           1,511
                                                        -----           -----
              Total assets                            $35,100         $30,572
                                                      =======         =======

                      LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
      Trade accounts payable                             $761            $764
      Payroll and other benefits related
       liabilities                                        568             467
      Unearned revenues                                   541             623
      Loans payable                                     1,092           1,086
      Income taxes payable                                 84           1,443
      Other current liabilities                         1,418           1,085
                                                        -----           -----
             Total current liabilities                  4,464           5,468
    Unearned revenues                                   3,630           3,485
    Other liabilities                                     705             761
             Total liabilities                          8,799           9,714
                                                        -----           -----

    Stockholders' equity:
    Qualcomm Incorporated (Qualcomm) Stockholders'
     equity:
      Preferred stock, $0.0001 par value; issuable in
       series;
        8 shares authorized; none outstanding
         at June 26, 2011 and September 26,
         2010                                               -               -
      Common stock, $0.0001 par value; 6,000 shares
       authorized;
        1,677 and 1,612 shares issued and
         outstanding at June 26, 2011 and
         September 26, 2010, respectively                   -               -
      Paid-in capital                                  10,011           6,856
      Retained earnings                                15,516          13,305
      Accumulated other comprehensive income              744             697
                                                          ---             ---
             Total Qualcomm stockholders' equity       26,271          20,858
    Noncontrolling interests                               30               -
                                                          ---             ---
             Total stockholders' equity                26,301          20,858
                Total liabilities and stockholders
                 equity                               $35,100         $30,572
                                                      =======         =======


                                    Qualcomm Incorporated
                       CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                             (In millions, except per share data)
                                         (Unaudited)

                                    Three Months Ended   Nine Months Ended
                                    ------------------   -----------------
                                     June 26, June 27,  June 26,   June 27,
                                        2011     2010*     2011      2010*
                                        ----     -----     ----      -----

    Revenues:
      Equipment and services          $2,297     $1,766  $6,550     $5,021
      Licensing and royalty fees       1,326        934   4,290      3,009
                                       -----        ---   -----      -----
      Total revenues                   3,623      2,700  10,840      8,030
                                       -----      -----  ------      -----

    Operating expenses:
      Cost of equipment and
       services revenues               1,278        852   3,380      2,375
      Research and development           757        623   2,144      1,822
      Selling, general and
       administrative                    475        332   1,413      1,063
      Goodwill impairment                  -          -     114          -
                                         ---        ---     ---        ---
          Total operating expenses     2,510      1,807   7,051      5,260
                                       -----      -----   -----      -----

    Operating income                   1,113        893   3,789      2,770

    Investment income, net               161        183     574        552
                                         ---        ---     ---        ---
      Income from continuing
       operations before income
       taxes                           1,274      1,076   4,363      3,322
    Income tax expense                  (289)      (244)   (862)      (740)
                                        ----       ----    ----       ----
      Income from continuing
       operations                        985        832   3,501      2,582
    Discontinued operations, net
     of income taxes                      44        (65)   (307)      (200)
                                         ---        ---    ----       ----
      Net Income                       1,029        767   3,194      2,382
    Net loss attributable to
     noncontrolling interests              6          -      10          -
                                         ---        ---     ---        ---
      Net income attributable to
       Qualcomm                       $1,035       $767  $3,204     $2,382
                                      ======       ====  ======     ======

    Basic earnings (loss) per
     share attributable to
     Qualcomm:
      Continuing operations            $0.59      $0.51   $2.13      $1.56
      Discontinued operations           0.03      (0.04)  (0.19)     (0.12)
                                        ----      -----   -----      -----
      Net income                       $0.62      $0.47   $1.94      $1.44
                                       =====      =====   =====      =====
    Diluted earnings (loss) per
     share attributable to
     Qualcomm:
      Continuing operations            $0.58      $0.51   $2.09      $1.55
      Discontinued operations           0.03      (0.04)  (0.19)     (0.12)
                                        ----      -----   -----      -----
      Net income                       $0.61      $0.47   $1.90      $1.43
                                       =====      =====   =====      =====
    Shares used in per share
     calculations:
    Basic                              1,673      1,629   1,650      1,654
                                       =====      =====   =====      =====
    Diluted                            1,709      1,642   1,682      1,670
                                       =====      =====   =====      =====

    Dividends per share
     announced                        $0.215     $0.190  $0.595     $0.530
                                      ======     ======  ======     ======

    *As adjusted for discontinued operations

                                Qualcomm Incorporated
                   CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (In millions)
                                    (Unaudited)

                                  Three Months Ended     Nine Months Ended
                                  ------------------     -----------------
                                   June 26, June 27,   June 26,   June 27,
                                      2011     2010       2011       2010
                                      ----     ----       ----       ----
    Operating Activities:
    Net income                      $1,029     $767     $3,194     $2,382
    Adjustments to reconcile
     net income to net cash
     provided by
           operating activities:
       Depreciation and
        amortization                   185      166       820        495
       Goodwill impairment               -        -       114          -
       Revenues related to non-
        monetary exchanges             (31)     (31)      (93)       (99)
       Income tax provision in
        excess of (less than)
        income tax payments            116       86    (1,218)        80
       Non-cash portion of
        share-based
        compensation expense           193      149       568        453
       Incremental tax benefit
        from stock options
        exercised                      (35)      (3)     (167)       (34)
       Net realized gains on
        marketable securities
        and other investments          (73)     (92)     (304)      (274)
       Net impairment losses on
        marketable securities
        and other investments           10       29        26        102
       Other items, net                  5      (66)       23        (70)
    Changes in assets and
     liabilities, net of
     effects of acquisitions:
        Accounts receivable, net        (2)    (126)       21        (91)
        Inventories                     38      (45)      (43)         7
        Other assets                   (17)      (1)      (36)       (71)
        Trade accounts payable         (46)     104      (191)        23
        Payroll, benefits and
         other liabilities             (59)      78       210       (161)
        Unearned revenues              (49)     (64)      156        241
                                       ---      ---       ---        ---
        Net cash provided by
         operating activities        1,264      951     3,080      2,983
                                     -----      ---     -----      -----
    Investing Activities:
      Capital expenditures            (219)    (117)     (400)      (313)
      Advanced payment on
       spectrum                          -   (1,064)        -     (1,064)
      Purchases of available-
       for-sale securities          (2,426)  (2,569)   (8,271)    (7,049)
      Proceeds from sale of
       available-for-sale
       securities                    3,888    3,113     9,355      7,354
      Atheros acquisition, net
       of cash acquired             (3,130)       -    (3,130)         -
      Other acquisitions and
       investments, net of cash
       acquired                         (6)     (17)      (95)       (45)
      Other items, net                 (45)      85       (22)       121
                                       ---      ---       ---        ---
        Net cash used by
         investing activities       (1,938)    (569)   (2,563)      (996)
                                    ------     ----    ------       ----
    Financing Activities:
      Borrowing under loans
       payable                           -    1,064     1,260      1,064
      Repayment of loans
       payable                           -        -    (1,260)         -
      Proceeds from issuance of
       common stock                    368       35     2,392        519
      Proceeds from issuance of
       subsidiary shares to
       noncontrolling interests          -        -        62          -
      Incremental tax benefit
       from stock options
       exercised                        35        3       167         34
      Repurchase and retirement
       of common stock                   -   (1,178)        -     (2,893)
      Dividends paid                  (360)    (309)     (985)      (872)
      Other items, net                  10       (1)       36         (2)
                                       ---      ---       ---        ---
        Net cash provided (used)
         by financing activities        53     (386)    1,672     (2,150)
                                       ---     ----     -----     ------
      Effect of exchange rate
       changes on cash                   -       (8)       10        (13)
                                       ---      ---       ---        ---
      Net (decrease) increase
       in cash and cash
       equivalents                    (621)     (12)    2,199       (176)
    Cash and cash equivalents
     at beginning of period          6,367    2,553     3,547      2,717
                                     -----    -----     -----      -----
      Cash and cash equivalents
       at end of period             $5,746   $2,541    $5,746     $2,541
                                    ======   ======    ======     ======

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