SAN DIEGO, January 28 /PRNewswire/ --

- Revenues US$2.5 Billion, EPS US$0.20 - Pro Forma EPS US$0.31 - Operating Income Exceeds Prior Guidance

Qualcomm Incorporated (Nasdaq: QCOM), a leading developer and innovator of advanced wireless technologies, products and services, today announced results for the first quarter of fiscal 2009 ended December 28, 2008, noting that first quarter fiscal 2009 revenues were at the high end of prior guidance and operating income exceeded prior guidance. However, net income and diluted EPS for the quarter were adversely impacted by other-than-temporary impairments to its marketable securities portfolio.

Total Qualcomm (GAAP) First Quarter Results

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

(All amounts in US dollars unless otherwise noted)

-- Revenues: $2.52 billion, up 3 percent year-over-year and down 25 percent sequentially. -- Operating income: $745 million, down 2 percent year-over-year and 44 percent sequentially. -- Net income: $341 million, down 56 percent year-over-year and 61 percent sequentially. -- Diluted earnings per share: $0.20, down 57 percent year-over-year and 62 percent sequentially. -- Effective tax rate: 24 percent for the quarter. Fiscal 2009 estimated tax rate of approximately 22 percent. -- Estimated share-based compensation: $99 million, net of tax, up 16 percent year-over-year and 1 percent sequentially. -- Operating cash flow: $3.5 billion; included a payment of $2.5 billion received in October 2008 related to the execution of new license and settlement agreements with Nokia Corporation/Nokia Inc. (Nokia). -- Return of capital to stockholders: In the quarter, dividends announced totaled $264 million, or $0.16 per share, which were paid January 7, 2009, and $284 million related to the repurchase of common stock.

Qualcomm Pro Forma First Quarter Results

Pro forma results exclude the Qualcomm Strategic Initiatives (QSI) segment, certain estimated share-based compensation, certain tax items related to prior years and acquired in-process research and development (RD) expense.

-- Revenues: $2.51 billion, up 3 percent year-over-year and down 25 percent sequentially. -- Operating income: $986 million, up 4 percent year-over-year and down 38 percent sequentially. -- Net income: $520 million, down 40 percent year-over-year and 51 percent sequentially. -- Diluted earnings per share: $0.31, down 40 percent year-over-year and 51 percent sequentially; excludes $0.05 loss per share attributable to the QSI segment and $0.06 loss per share attributable to certain estimated share-based compensation. -- Effective tax rate: 25 percent for the quarter and estimated for fiscal 2009. -- Free cash flow: $3.42 billion; included a payment of $2.5 billion received in October 2008 related to the execution of new license and settlement agreements with Nokia. (Defined as net cash from operating activities less capital expenditures.)

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

Despite weak economic conditions, wireless subscribers continue to migrate from second-generation to third-generation CDMA networks around the world. Our first quarter revenues were at the high end of prior guidance and operating income exceeded our prior guidance driven primarily by the mix of higher-end chipsets, higher-priced data capable devices and improved expense management, said Dr. Paul E. Jacobs, chief executive officer of Qualcomm. I am particularly pleased to see healthy demand for 3G as CDMA-based device shipments in the September quarter were at the high end of our prior expectations and reflect more than 30 percent year-over-year growth. While our operating performance was strong, the distress in the global financial markets continued, resulting in additional impairments of our marketable securities portfolio.

The CDMA inventory channel has contracted as we expected, and the business environment continues to remain uncertain. Reduced visibility in the marketplace makes it difficult to forecast future inventory levels or predict when a recovery will begin. As a result, while we continue to estimate healthy growth in the CDMA-device market, we have lowered our shipment estimate for calendar year 2009. Although we are not providing earnings per share guidance due to the volatility of financial markets and the impact it has had and may have on our investment portfolio and net income, we are providing revenue, operating income and our other standard guidance. Qualcomm is very fortunate to have a strong balance sheet and operating cash flows in these difficult times and we are committed to supporting our partners and driving the market forward.

Cash and Marketable Securities

Our cash, cash equivalents and marketable securities totaled approximately $13.1 billion at the end of the first quarter of fiscal 2009, compared to $11.3 billion at both the end of the fourth quarter of fiscal 2008 and the year ago quarter. On January 16, 2009, we announced a cash dividend of $0.16 per share payable on March 27, 2009 to stockholders of record at the close of business on February 27, 2009.

The distress in global financial markets has continued to suppress the value of our marketable securities portfolio. As a result, in evaluating the recorded values of our marketable securities at December 28, 2008, we determined that $388 million, or approximately 3 percent of the recorded values of our cash, cash equivalents and marketable securities, were other-than-temporarily impaired. In addition, at December 28, 2008 and January 23, 2009, we had net unrealized losses on marketable securities of $1.1 billion.

Research and Development Qualcomm Estimated In- Total Pro Share-Based Process Qualcomm ($ in millions) Forma Compensation RD QSI (GAAP) First quarter fiscal 2009 $511 $69 $- $24 $604 As a % of revenues 20% N/M 24% First quarter fiscal 2008 $430 $57 $2 $22 $511 As a % of revenues 18% N/M 21% Year-over-year change ($) 19% 21% 9% 18%

Pro forma RD expenses increased 19 percent year-over-year, primarily due to an increase in costs related to the development of integrated circuit products, next-generation CDMA and OFDMA technologies, the expansion of our intellectual property portfolio and other initiatives to support the acceleration of advanced wireless products and services, including lower-cost devices, the integration of wireless technologies with consumer electronics and computing, the convergence of multiband, multimode, multinetwork products and technologies, third-party operating systems and services platforms. QSI RD expenses were related to MediaFLO USA.

Selling, General and Administrative Qualcomm Estimated Total Pro Share-Based Qualcomm ($ in millions) Forma Compensation QSI (GAAP) First quarter fiscal 2009 $305 $66 $42 $413 As a % of revenues 12% N/M 16% First quarter fiscal 2008 $308 $58 $23 $389 As a % of revenues 13% N/M 16% Year-over-year change ($) (1%) 14% 83% 6%

Pro forma selling, general and administrative (SGA) expenses decreased by 1 percent year-over-year due to a decrease in costs related to litigation and legal matters partially offset by an increase in employee-related expenses in the first quarter of fiscal 2009. QSI SGA expenses were primarily related to MediaFLO USA.

Effective Income Tax Rate

Our fiscal 2009 effective income tax rates are estimated to be 22 percent for total Qualcomm (GAAP) and 25 percent for Qualcomm pro forma. The first quarter total Qualcomm (GAAP) effective tax rate of 24 percent is higher than the estimated annual effective tax rate primarily due to amounts recorded during the quarter for a valuation allowance on capital losses, partially offset by a tax benefit related to fiscal 2008 as a result of the retroactive reenactment of the federal RD credit.

Qualcomm Strategic Initiatives

The QSI segment is composed of our strategic investments, including our MediaFLO USA subsidiary. Total Qualcomm (GAAP) results for the first quarter of fiscal 2009 included a $0.05 loss per share for the QSI segment. The first quarter of fiscal 2009 QSI results included $102 million in operating expenses, primarily related to MediaFLO USA.

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.

The continuing global financial crisis and the resulting slowdown in the worldwide economy is causing contraction in the CDMA-based channel inventory, resulting in lower demand for CDMA-based MSM integrated circuits, adversely affecting our revenues and operating results. In addition, the financial crisis has had, and may continue to have, an impact on the value of our marketable securities portfolio and net investment income (loss), including other-than-temporary impairments in the first quarter of fiscal 2009. While we do not forecast impairments, we do have net unrealized losses on marketable securities that could be recognized in future periods if market conditions do not improve. Given the unprecedented daily market volatility and the significant judgments involved, accurately forecasting other-than-temporary impairments associated with our marketable securities portfolio is extremely difficult and actual results could vary materially. As a result, while we are providing revenue, operating income and our other standard guidance, we are not providing earnings per share guidance.

Moreover, our outlook does not include provisions for the consequences of injunctions or significant possible damages related to litigation matters, unless damages or injunctions have been awarded by a court. In addition, due to their nature, certain income and expense items, such as realized investment gains or losses, gains and losses on certain derivative instruments or asset impairments, cannot be accurately forecast. Accordingly, we exclude forecasts of such items from our business outlook, and actual results may vary materially from the business outlook if we incur any such income or expense items.

The following table summarizes total Qualcomm (GAAP) and Qualcomm pro forma guidance based on the current business outlook. The pro forma business outlook provided below is presented consistent with the presentation of pro forma results elsewhere herein.

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

Business Outlook Summary SECOND FISCAL QUARTER Q2'08 Current Guidance Results (2) Q2'09 Estimates (3) Qualcomm Pro Forma Revenues $2.60B $2.25B - $2.45B Year-over-year change decrease 6% - 14% Operating income $1.02B $0.75B - $0.85B Year-over-year change decrease 16% - 26% Total Qualcomm (GAAP) Revenues $2.61B $2.25B - $2.45B Year-over-year change decrease 6% - 14% Operating income $0.81B $0.50B - $0.60B Year-over-year change decrease 26% - 38% Operating income (loss) attributable to QSI ($0.07B) ($0.10B) Operating income (loss) attributable to estimated share-based compensation ($0.13B) ($0.15B) Operating Income (loss) attributable to in-process RD (4) n/a not provided Metrics MSM shipments approx. 85M approx. 60M - 65M CDMA/WCDMA devices shipped (1) approx. 112M* approx. 116M - 121M* CDMA/WCDMA device wholesale average selling price (1) approx. $222* approx. $207* * Shipments in December quarter, reported in March quarter FISCAL YEAR Prior Current Guidance Guidance FY 2008 FY 2009 FY 2009 Results Estimates(3) Estimates(3) Qualcomm Pro Forma Revenues $11.13B $10.2B - $10.8B $9.3B - $9.8B Year-over-year change decrease 3% - 8% decrease 12% - 16% Operating income $4.60B $3.7B - $3.9B $3.2B - $3.5B Year-over-year change decrease 15% - 20% decrease 24% - 30% Total Qualcomm (GAAP) Revenues $11.14B $10.2B - $10.8B $9.3B - $9.8B Year-over-year change decrease 3% - 8% decrease 12% - 17% Operating income $3.73B $2.6B - $2.8B $2.2B - $2.5B Year-over-year change decrease 25% - 30% decrease 33% - 41% Operating income (loss) attributable to QSI ($0.32B) ($0.45B) ($0.40B) Operating income (loss) attributable to estimated share-based compensation ($0.54B) ($0.65B) ($0.60B) Operating income (loss) attributable to in-process RD (4) ($0.01B) n/a not provided Metrics Fiscal year* CDMA/WCDMA device wholesale average selling price (1) approx. $219 approx. $195 approx. $202 * Shipments in Sept. to June quarters, reported in Dec. to Sept. quarters CALENDAR YEAR Device Estimates (1) Prior Current Prior Current Guidance Guidance Guidance Guidance Calendar Calendar Calendar Calendar CDMA/WCDMA device 2008 2008 2009 2009 shipments Estimates Estimates Estimates Estimates March quarter approx. 107M approx. 107M not provided not provided June quarter approx. 119M approx. 119M not provided not provided September quarter approx. 121M - 126M approx. 125M not provided not provided December quarter not provided approx. not provided not provided 116M - 121M Calendar year range (approx.) 475M - 485M 468M - 473M 580M - 620M 540M - 590M Midpoint Midpoint Midpoint Midpoint CDMA/WCDMA units approx. 480M approx. 471M approx. 600M approx. 565M CDMA units approx. 213M approx. 209M approx. 230M approx. 212M WCDMA units approx. 267M approx. 262M approx. 370M approx. 353M (1) CDMA/WCDMA device shipments and average selling prices are for estimated worldwide device shipments, including shipments not reported to Qualcomm. (2) Our Q2'08 results do not include royalty revenues attributable to Nokia's sales. (3) While we do not forecast impairments, we do have net unrealized losses on marketable securities that could be recognized in future periods if market conditions do not improve. (4) In January 2009, we acquired handheld graphics and multimedia assets from Advanced Micro Devices. We are still in the process of finalizing the accounting for the acquisition, which may include in-process RD. Sums may not equal totals due to rounding.

Results of Business Segments (in millions, except per share data): First Quarter - Fiscal Year 2009 Pro Forma Reconciling Segments QCT QTL QWI Items (1) Revenues $1,334 $1,006 $170 $1 Change from prior year (15%) 55% (19%) N/M Change from prior quarter (24%) (27%) (11%) N/M Operating income (loss) Change from prior year Change from prior quarter EBT $168 $874 $3 $(351) Change from prior year (64%) 62% (88%) N/M Change from prior quarter (63%) (30%) N/M N/M EBT as a % of revenues 13% 87% 2% N/M Net income (loss) Change from prior year Change from prior quarter Diluted EPS Change from prior year Change from prior quarter Diluted shares used Qualcomm Estimated Total Pro Share-Based Qualcomm Segments Forma Compensation(2) QSI (3) (GAAP) Revenues $2,511 $- $6 $2,517 Change from prior year 3% 500% 3% Change from prior quarter (25%) 20% (25%) Operating income (loss) $986 $(145) $(96) $745 Change from prior year 4% (17%) (48%) (2%) Change from prior quarter (38%) 1% 1% (44%) EBT $694 $(145) $(98) $451 Change from prior year (38%) (17%) (78%) (52%) Change from prior quarter (49%) 1% 6% (59%) EBT as a % of revenues 28% N/M N/M 18% Net income (loss) $520 $(99) $(80) $341 Change from prior year (40%) (18%) (300%) (56%) Change from prior quarter (51%) (1%) 2% (61%) Diluted EPS $0.31 $(0.06) $(0.05) $0.20 Change from prior year (40%) (20%) (400%) (57%) Change from prior quarter (51%) 0% 0% (62%) Diluted shares used 1,667 1,667 1,667 1,667 Fourth Quarter - Fiscal Year 2008 Pro Forma Reconciling Segments QCT QTL QWI Items (1) Revenues $1,761 $1,374 $190 $4 Operating income (loss) EBT 449 1,247 (24) (315) Net income (loss) Diluted EPS Diluted shares used Qualcomm Estimated Total Pro Share-Based Qualcomm Segments Forma Compensation(2) QSI (3) (GAAP) Revenues $3,329 $- $5 $3,334 Operating income (loss) 1,578 (146) (97) 1,335 EBT 1,357 (146) (104) 1,107 Net income (loss) 1,058 (98) (82) 878 Diluted EPS $0.63 $(0.06) $(0.05) $0.52 Diluted shares used 1,678 1,678 1,678 1,678 First Quarter - Fiscal Year 2008 Pro Forma Reconciling Segments QCT QTL QWI Items (1) Revenues $1,574 $650 $210 $5 Operating income (loss) EBT 470 541 24 76 Net income (loss) Diluted EPS Diluted shares used Qualcomm Estimated In- Total Pro Share-Based Process Qualcomm Segments Forma Compensation(2) RD QSI (3) (GAAP) Revenues $2,439 $- $- $1 $2,440 Operating income (loss) 948 (124) (2) (65) 757 EBT 1,111 (124) (2) (55) 930 Net income (loss) 872 (84) (1) (20) 767 Diluted EPS $0.52 $(0.05) $- $(0.01) $0.46 Diluted shares used 1,664 1,664 1,664 1,664 1,664 Second Quarter - Fiscal Year 2008 Pro Forma Reconciling Segments QCT QTL QWI Items (1) Revenues $1,620 $795 $ 194 $(5) Operating income (loss) EBT 427 684 - (12) Net income (loss) Diluted EPS Diluted shares used Qualcomm Estimated Total Pro Share-Based Qualcomm Segments Forma Compensation(2) QSI (3) (GAAP) Revenues $2,604 $- $2 $2,606 Operating income (loss) 1,017 (130) (74) 813 EBT 1,099 (130) (63) 906 Net income (loss) 894 (88) (40) 766 Diluted EPS $0.54 $(0.05) $(0.02) $0.47 Diluted shares used 1,643 1,643 1,643 1,643 Twelve Months - Fiscal Year 2008 Pro Forma Reconciling Segments QCT QTL QWI Items (1) Revenues $6,717 $3,622 $785 $6 Operating income (loss) EBT 1,833 3,142 (1) (290) Net income (loss) Diluted EPS Diluted shares used Qualcomm Estimated In- Total Pro Share-Based Process Qualcomm Segments Forma Compensation(2) RD QSI (3) (GAAP) Revenues $11,130 $- $- $12 $11,142 Operating income (loss) 4,604 (540) (14) (320) 3,730 EBT 4,684 (540) (14) (304) 3,826 Net income (loss) 3,740 (365) (13) (202) 3,160 Diluted EPS $2.25 $(0.22) $(0.01) $(0.12) $1.90 Diluted shares used 1,660 1,660 1,660 1,660 1,660 (1) Pro forma reconciling items related to revenues consist primarily of other nonreportable segment revenues less intersegment eliminations. Pro forma reconciling items related to earnings before taxes consist primarily of certain investment income, research and development expenses and marketing expenses that are not allocated to the segments for management reporting purposes, nonreportable segment results and the elimination of intersegment profit. (2) Certain share-based compensation is included in operating expenses as part of employee-related costs but is not allocated to the Company's segments as such costs are not considered relevant by management in evaluating segment performance. (3) 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 items column and the tax provisions related to estimated share-based compensation and in-process RD from the tax provision for total Qualcomm (GAAP). N/M - Not Meaningful Sums may not equal totals due to rounding.

Conference Call

Qualcomm's first quarter fiscal 2009 earnings conference call will be broadcast live on January 28, 2009 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 January 28, 2009, beginning at approximately 5:30 p.m. PST through February 28, 2009 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 80271812. 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: To view the web slides that accompany this earnings release and conference call, please go to the Qualcomm Investor Relations website at http://investor.qualcomm.com/results.cfm.

Qualcomm Incorporated (Nasdaq: QCOM) 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 SP 100 Index, the SP 500 Index and is a 2008 FORTUNE 500(R) company. For more information, please visit www.qualcomm.com.

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, RD expenses, SGA expenses, total operating expenses, operating income, net investment income (loss), income before income taxes, effective tax rate, net income, diluted earnings 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 pro forma 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 pro forma financial measures applicable to the Company and its business segments.

Pro forma information used by management excludes the QSI segment, certain estimated share-based compensation, certain tax items related to prior years and acquired in-process RD. 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, 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. Moreover, it is generally not an expense that requires or will require cash payment by the Company. Further, share-based compensation related to 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 related to prior years are excluded in order to provide a clearer understanding of the Company's ongoing pro forma tax rate and after tax earnings. The Company decided to include the benefit of the retroactive extension of the federal research and development tax credit in pro forma results starting in fiscal 2009 because it recurs with relative frequency and would have been included in the Company's pro forma results for the prior year if it had been reenacted in the prior fiscal year. Acquired in-process RD is excluded because such expense is viewed by management as unrelated to the operating activities of the Company's ongoing core businesses.

The Company presents free cash flow, defined as net cash provided by operating activities less capital expenditures, to facilitate an understanding of the amount of cash flow generated that is available to grow its business and to create long-term 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 evaluate the Company's performance, 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 between total Qualcomm (GAAP) cash flow and Qualcomm pro forma cash flow 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 deployment of our technologies in wireless networks and of 3G wireless communications, equipment and services, including CDMA2000 1X, 1xEV-DO, WCDMA, HSPA and OFDMA both domestically and internationally; the current uncertainty of global economic conditions and its potential impact on demand for our products, services or applications and our marketable securities portfolio; attacks on our 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 major customers and licensees; foreign currency fluctuations; strategic loans, investments and transactions we have or may pursue; our dependence on third-party manufacturers and suppliers; our ability to maintain and improve operational efficiencies and profitability; 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 our SEC reports.

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

Qualcomm Contact: John Gilbert Phone: +1-858-658-4813 e-mail: ir@qualcomm.com Qualcomm Incorporated CONSOLIDATED STATEMENTS OF OPERATIONS This schedule is to assist the reader in reconciling from Qualcomm Pro Forma results to Total Qualcomm (GAAP) results (In millions, except per share data) (Unaudited) Three Months Ended December 28, 2008 Qualcomm Estimated Total Pro Share-Based Qualcomm Forma Compensation QSI (GAAP) Revenues: Equipment and services $1,417 $- $6 $1,423 Licensing and royalty fees 1,094 - - 1,094 Total revenues 2,511 - 6 2,517 Operating expenses: Cost of equipment and services revenues 709 10 36 755 Research and development 511 69 24 604 Selling, general and administrative 305 66 42 413 Total operating expenses 1,525 145 102 1,772 Operating income (loss) 986 (145) (96) 745 Investment loss, net (292)(a) - (2)(b) (294) Income (loss) before income taxes 694 (145) (98) 451 Income tax (expense) benefit (174)(c) 46 18(d) (110)(c) Net income (loss) $520 $(99) $(80) $341 Earnings (loss) per common share: Diluted $0.31 $(0.06) $(0.05) $0.20 Shares used in per share calculations: Diluted 1,667 1,667 1,667 1,667 Supplemental Financial Data: Operating Cash Flow $3,629 $(16)(f) $(112) $3,501 Operating Cash Flow as a % of Revenues 145% N/M 139% Free Cash Flow(e) $3,419 $(16)(f) $(136) $3,267 Free Cash Flow as a % of Revenues 136% N/M 130% (a) Included $388 million in other-than-temporary losses on investments, which were not part of the Company's strategic investment portfolio, $38 million in net realized losses on investments and $1 million in interest expense, partially offset by $135 million in interest and dividend income related to cash, cash equivalents and marketable securities. (b) Included $4 million in other-than-temporary losses on investments, $2 million in interest expense and $1 million in equity in losses of investees, partially offset by $5 million in net realized gains on investments. (c) The first quarter of fiscal 2009 effective tax rates were approximately 24% for total Qualcomm (GAAP) and 25% for Qualcomm pro forma, which included a tax benefit of $38 million and $37 million, respectively, related to fiscal 2008 as a result of the retroactive reenactment of the federal RD credit. Historically, similar tax benefits have been excluded from Qualcomm pro forma results. (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. In interim quarters, the tax provision for the QSI operating segment is computed by subtracting the tax provision for Qualcomm pro forma, the tax items column and the tax provisions related to estimated share-based compensation and in-process RD 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 Reconciliation of Pro Forma Free Cash Flows to Total Qualcomm (GAAP) net cash provided by operating activities and other supplemental disclosures for the three months ended December 28, 2008, included herein. (f) Incremental tax benefits from stock options exercised during the period.

Qualcomm Incorporated Reconciliation of Pro Forma Free Cash Flows to Total Qualcomm (GAAP) net cash provided by operating activities and other supplemental disclosures (In millions) (Unaudited) Three Months Ended December 28, 2008 Qualcomm Estimated Total Pro Share-Based Qualcomm Forma Compensation QSI (GAAP) Net cash provided (used) by operating activities $3,629 $(16)(a) $(112) $3,501 Less: capital expenditures (210) - (24) (234) Free cash flow $3,419 $(16) $(136) $3,267 Other supplemental cash disclosures: Cash transfers from QSI (1) $11 $- $(11) $- Cash transfers to QSI (2) (152) - 152 - Net cash transfers $(141) $- $141 $- (1) Cash from sale of strategic debt and equity investments and partial settlement of investment receivables. (2) Funding for strategic debt and equity investments, capital expenditures and other QSI operating expenses. Three Months Ended December 30, 2007 Qualcomm Estimated In- Total Pro Share-Based Process Qualcomm Forma Compensation RD QSI (GAAP) Net cash provided (used) by operating activities $1,014 $(48)(a) $(2) $(84) $880 Less: capital expenditures (106) - - (21) (127) Free cash flow $908 $(48) $(2) $(105) $753 (a) Incremental tax benefits from stock options exercised during the period. Qualcomm Incorporated CONDENSED CONSOLIDATED BALANCE SHEETS (In millions, except per share data) (Unaudited) ASSETS December September 28, 2008 28, 2008 Current assets: Cash and cash equivalents $3,826 $1,840 Marketable securities 5,183 4,571 Accounts receivable, net 943 4,038 Inventories 458 521 Deferred tax assets 299 289 Collateral held under securities lending 11 173 Other current assets 290 291 Total current assets 11,010 11,723 Marketable securities 4,048 4,858 Deferred tax assets 996 830 Property, plant and equipment, net 2,262 2,162 Goodwill 1,494 1,517 Other intangible assets, net 3,080 3,104 Other assets 565 369 Total assets $23,455 $24,563 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Trade accounts payable $376 $570 Payroll and other benefits related liabilities 347 406 Dividends payable 264 - Income taxes payable 48 20 Unearned revenues 403 394 Obligations under securities lending 11 173 Other current liabilities 633 728 Total current liabilities 2,082 2,291 Unearned revenues 3,666 3,768 Income taxes payable 240 227 Other liabilities 330 333 Total liabilities 6,318 6,619 Stockholders' equity: Preferred stock, $0.0001 par value; issuable in series; 8 shares authorized; none outstanding at December 28, 2008 and September 28, 2008 - - Common stock, $0.0001 par value; 6,000 shares authorized; 1,649 and 1,656 shares issued and outstanding at December 28, 2008 and September 28, 2008, respectively - - Paid-in capital 7,413 7,511 Retained earnings 10,794 10,717 Accumulated other comprehensive loss (1,070) (284) Total stockholders' equity 17,137 17,944 Total liabilities and stockholders' equity $23,455 $24,563

Qualcomm Incorporated CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except per share data) (Unaudited) Three Months Ended December December 28, 2008 30, 2007 Revenues: Equipment and services $1,423 $1,703 Licensing and royalty fees 1,094 737 Total revenues 2,517 2,440 Operating expenses: Cost of equipment and services revenues 755 783 Research and development 604 511 Selling, general and administrative 413 389 Total operating expenses 1,772 1,683 Operating income 745 757 Investment (loss) income, net (294) 173 Income before income taxes 451 930 Income tax expense (110) (163) Net income $341 $767 Basic earnings per common share $0.21 $0.47 Diluted earnings per common share $0.20 $0.46 Shares used in per share calculations: Basic 1,653 1,635 Diluted 1,667 1,664 Dividends per share paid $- $- Dividends per share announced $0.16 $0.14

Qualcomm Incorporated CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) (Unaudited) Three Months Ended December December 28, 2008 30, 2007 Operating Activities: Net income $341 $767 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 152 108 Revenues related to non-monetary exchanges (29) - Non-cash portion of income tax expense 45 72 Non-cash portion of share-based compensation expense 145 125 Incremental tax benefit from stock options exercised (16) (48) Net realized losses (gains) on marketable securities and other investments 33 (82) Other-than-temporary losses on marketable securities and other investments 392 57 Other items, net (14) 4 Changes in assets and liabilities, net of effects of acquisitions: Accounts receivable, net 2,716 43 Inventories 65 (47) Other assets (19) 11 Trade accounts payable (192) (77) Payroll, benefits and other liabilities (54) (35) Unearned revenues (64) (18) Net cash provided by operating activities 3,501 880 Investing Activities: Capital expenditures (234) (127) Purchases of available-for-sale securities (2,586) (1,684) Proceeds from sale of available-for-sale securities 1,373 2,492 Cash received for partial settlement of investment receivables 202 - Other investments and acquisitions, net of cash acquired (14) (229) Change in collateral held under securities lending 162 138 Other items, net (4) - Net cash (used) provided by investing activities (1,101) 590 Financing Activities: Proceeds from issuance of common stock 26 77 Incremental tax benefit from stock options exercised 16 48 Repurchase and retirement of common stock (285) (900) Change in obligations under securities lending (162) (138) Other items, net (1) (1) Net cash used by financing activities (406) (914) Effect of exchange rate changes on cash (8) 1 Net increase in cash and cash equivalents 1,986 557 Cash and cash equivalents at beginning of period 1,840 2,411 Cash and cash equivalents at end of period $3,826 $2,968

John Gilbert of Qualcomm Incorporated, +1-858-658-4813, ir@qualcomm.com