QUALCOMM Announces Fourth Quarter and Fiscal 2006 Results

San Diego, November 2 (ots/PRNewswire) -

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

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

Total QUALCOMM (GAAP) Results:

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

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

QUALCOMM Pro Forma Results:

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

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

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

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

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

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

Cash and Marketable Securities

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

Estimated Share-Based Compensation

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

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

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

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

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

Effective Income Tax Rate

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

QUALCOMM Strategic Initiatives

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

Business Outlook

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

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

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

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

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

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

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

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

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

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

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

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

N/M - Not Meaningful

Sums may not equal totals due to rounding.

Conference Call

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

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

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

Note Regarding Use of Non-GAAP Financial Measures

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

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

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

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

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

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

Note Regarding Forward-Looking Statements

In addition to the historical information contained herein, this
news release contains forward-looking statements that are subject to
risks and uncertainties. Actual results may differ substantially from
those referred to herein due to a number of factors, including but
not limited to risks associated with: the rate of development,
deployment and commercial acceptance of CDMA-based networks and
CDMA-based technology, including CDMA2000 1X, 1xEV-DO, WCDMA and
HSDPA both domestically and internationally; Our dependence on major
customers and licensees; fluctuations in the demand For CDMA-based
products, services or applications; foreign currency fluctuations;
strategic loans, investments and transactions the Company has or may
pursue; our dependence on third party manufacturers and suppliers;
our ability to maintain and improve operational efficiencies and
profitability; developments in current and future litigation; the
development, deployment and commercial acceptance of the MediaFLO
USA network and FLO(TM) technology; as well as the other risks
detailed from time-to-time in the Company's SEC reports.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

QUALCOMM Incorporated
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS AND MARKETABLE SECURITIES
THIS SCHEDULE IS TO ASSIST THE READER IN RECONCILING PRO FORMA CASH FLOWS
FROM CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES TO TOTAL QUALCOMM
CASH FLOWS
(In US$ millions)
(Unaudited)
Three Months Ended September 24, 2006
Estimated Total
QUALCOMM Share-Based Tax In-Process QUALCOMM
Pro Forma Compensation Items R&D QSI (GAAP)
Earnings (loss)
before taxes,
depreciation,
amortization
and other
adjustments (1) $1,019 $(27) $-- $-- $(34) $958
Working
capital
changes and
taxes paid (2) (12) -- -- -- 6 (6)
Net cash
provided
(used) by
operating
activities 1,007 (27) -- -- (28) 952
Capital
expenditures (100) -- -- -- (29) (129)
Free cash flow
(Net cash
provided by
operating
activities
less capital
expenditures) 907 (27) -- -- (57) 823
Net additional
share capital 69 -- -- -- -- 69
Repurchase and
retirement of
common stock (335) -- -- -- -- (335)
Tax benefits
from stock
options
exercised
during the
period -- 27 -- -- -- 27
Dividends paid (198) -- -- -- -- (198)
Other
investments
and
acquisitions,
net of cash
acquired (13) -- -- -- (4) (17)
Other items,
net (8) -- -- -- 1 (7)
Changes in
fair value
and other
changes to
marketable
securities 164 -- -- -- 6 170
Marketable
securities
pending
settlement (61) -- -- -- -- (61)
Transfer from
QSI (3) 13 -- -- -- (13) --
Transfer to
QSI (4) (61) -- -- -- 61 --
Net increase
(decrease) in
cash, cash
equivalents
and
marketable
securities (5) $477 $-- $-- $-- $(6) $471
(1)
Reconciliation
to GAAP:
Net income
(loss) $705 $(76) $(16) $(1) $2 $614
Share-based
compensation,
net of tax
benefit -- 76 -- -- -- 76
Other
adjustments (a) 286 (27) (b) 16 1 (24) 252
Net realized
gains on
marketable
securities
and other
investments (30) -- -- -- (12) (42)
Net taxes paid 58 -- -- -- -- 58
Earnings (loss)
before taxes,
depreciation,
amortization
and other
adjustments $1,019 $(27) $-- $-- $(34) $958
(2)
Reconciliation
to GAAP:
Increase in
cash resulting
from changes
in working
capital $46 $-- $-- $-- $6 $52
Net taxes paid (58) -- -- -- -- (58)
Working capital
changes and
taxes paid $(12) $-- $-- $-- $6 $(6)
(3) Cash from
loan payments
and sale of
equity
securities.
(4) Funding for
strategic debt
and equity
investments
and other QSI
operating
expenses.
(5)
Reconciliation
to GAAP cash
flow statement:
Net increase
in cash and
cash
equivalents
(GAAP) $452 $-- $-- $-- $-- $452
Net sales and
maturities of
marketable
securities (78) -- -- -- (12) (90)
Net increase
in fair value
and other
changes to
marketable
securities 164 -- -- -- 6 170
Net decrease
in marketable
securities
pending
settlement (61) -- -- -- -- (61)
Net increase
(decrease)
in cash, cash
equivalents
and
marketable
securities $477 $-- $-- $-- $(6) $471
(a) See detail below.
(b) Tax benefits from stock options exercised during the period.
QUALCOMM Incorporated
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS AND MARKETABLE SECURITIES
THIS SCHEDULE IS TO ASSIST THE READER IN RECONCILING PRO FORMA CASH FLOWS
FROM CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES TO TOTAL QUALCOMM
CASH FLOWS
(In US$ millions)
(Unaudited)
Twelve Months Ended September 24, 2006
Estimated Total
QUALCOMM Share-Based Tax In-Process QUALCOMM
Pro Forma Compensation Items R&D QSI (GAAP)
Earnings (loss)
before taxes,
depreciation,
amortization
and other
adjustments (1) $3,961 $(403) $-- $-- $(120) $3,438
Working capital
changes and
taxes paid (2) (215) -- -- -- 30 (185)
Net cash
provided
(used) by
operating
activities 3,746 (403) -- -- (90) 3,253
Capital
expenditures (566) -- -- -- (119) (685)
Free cash flow
(Net cash
provided by
operating
activities
less capital
expenditures) 3,180 (403) -- -- (209) 2,568
Net additional
share capital 692 -- -- -- -- 692
Repurchase and
retirement of
common stock (1,500) -- -- -- -- (1,500)
Tax benefits
from stock
options
exercised
during the
period -- 403 -- -- -- 403
Proceeds from
put options 11 -- -- -- -- 11
Dividends paid (698) -- -- -- -- (698)
Other investments
and acquisitions,
net of cash
acquired (389) -- -- -- (18) (407)
Other items, net (8) -- -- -- 10 2
Changes in fair
value and other
changes to
marketable
securities 175 -- -- -- 54 229
Marketable
securities
pending
settlement (32) -- -- -- (32)
Transfer from
QSI (3) 54 -- -- -- (54) --
Transfer to
QSI (4) (231) -- -- -- 231 --
Net increase
in cash, cash
equivalents
and marketable
securities (5) $1,254 $-- $-- $-- $14 $1,268
(1)
Reconciliation
to GAAP:
Net income
(loss) $2,804 $(320) $40 $(22) $(32) $2,470
Share-based
compensation,
net of tax
benefit -- 320 -- -- -- 320
Other
adjustments (a) 1,091 (403) (b) (40) 22 (58) 612
Net realized
gains on
marketable
securities
and other
investments (106) -- -- -- (30) (136)
Net taxes paid 172 -- -- -- -- 172
Earnings
(loss) before
taxes,
depreciation,
amortization
and other
adjustments $3,961 $(403) $-- $-- $(120) $3,438
(2)
Reconciliation
to GAAP:
(Decrease)
increase in
cash resulting
from changes
in working
capital $(43) $-- $-- $-- $30 $(13)
Net taxes paid (172) -- -- -- -- (172)
Working capital
changes and
taxes paid $(215) $-- $-- $-- $30 $(185)
(3) Cash from
loan payments
and sale of
equity
securities.
(4) Funding for
strategic debt
and equity
investments and
other QSI
operating
expenses.
(5)
Reconciliation
to GAAP cash
flow statement:
Net decrease in
cash and cash
equivalents
(GAAP) $(463) $-- $-- $-- $-- $(463)
Net purchases
and maturities
of marketable
securities 1,574 -- -- -- (40) 1,534
Net increase in
fair value and
other changes to
marketable
securities 175 -- -- -- 54 229
Net decrease in
marketable
securities
pending
settlement (32) -- -- -- -- (32)
Net increase in
cash, cash
equivalents
and marketable
securities $1,254 $-- $-- $-- $14 $1,268
(a) See detail below.
(b) Tax benefits from stock options exercised during the period.
QUALCOMM Incorporated
SUPPLEMENTAL DETAIL TO THE CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS AND MARKETABLE SECURITIES
(In US$ millions)
(Unaudited)
Three Months Ended September 24, 2006
Estimated Total
QUALCOMM Share-Based Tax In-Process QUALCOMM
Pro Forma Compensation Items R&D QSI (GAAP)
(a) Other
adjustments
are comprised
of:
Depreciation
and
amortization $79 $-- $-- $-- $3 $82
Losses on
derivative
instruments 11 -- -- -- -- 11
Other-than-
temporary
losses on
marketable
securities
and other
investments 3 -- -- -- -- 3
Equity in
earnings of
investees -- -- -- -- (1) (1)
Tax benefits
from stock
options
exercised
during the
period -- (27) -- -- -- (27)
Non-cash
income tax
expense
(benefit) 199 -- 16 -- (25) 190
Other items,
net (6) -- -- 1 (1) (6)
Total other
adjustments $286 $(27) $16 $1 $(24) $252
Twelve Months Ended September 24, 2006
Estimated Total
QUALCOMM Share-Based Tax In-Process QUALCOMM
Pro Forma Compensation Items R&D QSI (GAAP)
(a) Other
adjustments
are comprised
of:
Depreciation
and
amortization $263 $-- $-- $-- $9 $272
Losses on
derivative
instruments 29 -- -- -- -- 29
Other-than-
temporary
losses on
marketable
securities
and other
investments 20 -- -- -- 4 24
Equity in
losses of
investees -- -- -- -- 29 29
Tax benefits
from stock
options
exercised
during the
period -- (403) -- -- -- (403)
Non-cash
income tax
expense
(benefit) 830 -- (40) -- (101) 689
Other items,
net (51) -- -- 22 1 (28)
Total other
adjustments $1,091 $(403) $(40) $22 $(58) $612
RECONCILIATION OF PRIOR YEAR PRO FORMA FREE CASH FLOW TO NET CASH
PROVIDED
BY OPERATING ACTIVITIES
(In US$ millions)
(Unaudited)
Three Months Ended September 25, 2005
Total
QUALCOMM QUALCOMM
Pro Forma QSI (GAAP)
Net cash provided by operating
activities $964 $