Qualcomm Announces Record Third Quarter Fiscal 2014 Results

         Qualcomm Announces Record Third Quarter Fiscal 2014 Results

  PR Newswire

  SAN DIEGO, July 23, 2014

- Revenues $6.8 billion

- GAAP EPS $1.31, Non-GAAP EPS $1.44

- Raising Fiscal 2014 EPS Guidance -

SAN DIEGO, July 23, 2014 /PRNewswire/ -- 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 2014
ended June 29, 2014.

"We are pleased to report another record quarter with revenues, earnings per
share and chip shipments reaching all-time highs, driven by broad-based demand
for our industry-leading 3G/4G chipset solutions," said Steve Mollenkopf, CEO
of Qualcomm Incorporated. "Looking forward, although we have lowered our
near-term financial outlook for the licensing business, we are pleased to be
raising our fiscal year earnings per share guidance on better than expected
performance in our semiconductor business."

Third Quarter Results (GAAP)*

  *Revenues: ^1 $6.81 billion, up 9 percent year-over-year (y-o-y) and 7
    percent sequentially.
  *Operating income: ^1 $2.08 billion, up 24 percent y-o-y and 4 percent
    sequentially.
  *Net income: ^2 $2.24 billion, up 42 percent y-o-y and 14 percent
    sequentially.
  *Diluted earnings per share: ^2 $1.31, up 46 percent y-o-y and 15 percent
    sequentially.
  *Effective tax rate: ^1 10 percent.
  *Operating cash flow: $2.67 billion, up 29 percent y-o-y; 39 percent of
    revenues.
  *Return of capital to stockholders: $2.06 billion, including $1.35 billion
    through repurchases of 17.0 million shares of common stock and $706
    million, or $0.42 per share, of cash dividends paid.

^1 Throughout this news release, revenues, operating expenses, operating
income, earnings before tax (EBT) and effective tax rates are from continuing
operations (i.e., before adjustments for noncontrolling interests and
discontinued operations), unless otherwise stated.
^2 Throughout this news release, net income and diluted earnings per share are
attributable to Qualcomm (i.e., after adjustments for noncontrolling interests
and discontinued operations), unless otherwise stated.

Non-GAAP Third Quarter Results*

Non-GAAP results exclude the QSI (Qualcomm Strategic Initiatives) segment and
certain share-based compensation, acquisition-related items and tax items.

  *Revenues: $6.81 billion, up 9 percent y-o-y and 7 percent sequentially.
  *Operating income: $2.43 billion, up 19 percent y-o-y and 4 percent
    sequentially.
  *Net income: $2.47 billion, up 35 percent y-o-y and 10 percent
    sequentially.
  *Diluted earnings per share: $1.44, up 40 percent y-o-y and 10 percent
    sequentially.
  *Effective tax rate: 13 percent.

Detailed reconciliations between GAAP and Non-GAAP results are included within
this news release.

* The following should be considered in regards to the year-over-year and
sequential comparisons:

  *The third quarter of fiscal 2014 results included:

       *$208 million of income, or $0.12 per share, of which $184 million was
         recorded in other income, due to the reversal of accruals related to
         our litigation with ParkerVision; and
       *$164 million of charges, or $0.08 per share, that resulted from an
         impairment on goodwill and long-lived assets related to our QMT
         (Qualcomm MEMS Technologies) division.

  *The third quarter of fiscal 2013 results included:

       *$158 million charge, or $0.06 per share, that resulted from an
         impairment on long-lived assets related to our QMT division.

Third Quarter Key Business Metrics

  *MSM™ chip shipments: 225 million units, up 31 percent y-o-y and 20 percent
    sequentially.
  *March quarter total reported device sales: approximately $58.1 billion, up
    3 percent y-o-y and down 13 percent sequentially.

       *March quarter estimated 3G/4G device shipments: approximately 250 to
         254 million units, at an estimated average selling price of
         approximately $228 to $234 per unit.

Cash and Marketable Securities

Our cash, cash equivalents and marketable securities totaled $32.7 billion at
the end of the third quarter of fiscal 2014, compared to $30.4 billion a year
ago and $32.1 billion at the end of the second quarter of fiscal 2014. On July
18, 2014, we announced a cash dividend of $0.42 per share payable on September
24, 2014 to stockholders of record as of the close of business on September 3,
2014.

Research and Development

($ in millions)    Non-GAAP  QSI  Share-Based        Acquisition-      GAAP
                                  Compensation       Related Items
Third quarter      $  1,251  $ 1  $        174       $        3        $ 1,429
fiscal 2014
As % of revenues   18%                                                 21%
Third quarter      $  1,130  $ 1  $        166       $        1        $ 1,298
fiscal 2013
As % of revenues   18%                                                 21%
Year-over-year     11%       N/M  5%                 N/M               10%
change ($)
N/M - Not Meaningful

Non-GAAP research and development (R&D) expenses increased 11 percent y-o-y
primarily due to an increase in costs to develop CDMA-based 3G, OFDMA-based 4G
LTE and other technologies for integrated circuit and related software
products and to expand our intellectual property portfolio.

Selling, General and Administrative

($ in millions)    Non-GAAP  QSI    Share-Based        Acquisition-      GAAP
                                    Compensation       Related Items
Third quarter      $   484   $  4   $        88        $        6        $ 582
fiscal 2014
As % of revenues   7%                                                    9%
Third quarter      $   505   $  6   $        96        $        6        $ 613
fiscal 2013
As % of revenues   8%                                                    10%
Year-over-year     (4%)      (33%)  (8%)               N/M               (5%)
change ($)
N/M - Not Meaningful

Non-GAAP selling, general and administrative (SG&A) expenses decreased 4
percent y-o-y primarily due to a decrease in selling and marketing expenses.

Effective Income Tax Rates

Our fiscal 2014 annual effective income tax rates are estimated to be 14
percent for GAAP and 15 percent for Non-GAAP, both of which include the United
States federal R&D tax credit generated through December 31, 2013, the date on
which the credit expired. During the third quarter of fiscal 2014, we recorded
a $66 million tax benefit as a result of an agreement reached with the
Internal Revenue Service related to transfer pricing on our fiscal 2013 tax
return, which was excluded from Non-GAAP results.

Business Outlook

The following statements are forward looking, and actual results may differ
materially. The "Note Regarding Forward-Looking Statements" in this news
release provides a description of certain risks that we face, and our most
recent quarterly report 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 and certain derivative gains or losses, cannot be
accurately forecast. Accordingly, we only include such items in our financial
outlook to the extent they are reasonably certain; however, actual results may
differ materially from the outlook.

During the fourth quarter of fiscal 2014, we expect to complete a minimum of
$1 billion in stock repurchases under our current stock repurchase program.
Our outlook for fiscal 2014 diluted earnings per share includes an estimate of
the benefit related to stock repurchases.

China continues to present significant opportunities for us, particularly with
the rollout of 4G LTE, but also presents significant challenges, as our
business practices continue to be the subject of an investigation by the China
National Development and Reform Commission (NDRC). Please refer to our
Quarterly Report on Form 10-Q for the third quarter ended June 29, 2014 filed
with the SEC for our most recent disclosures regarding the NDRC investigation.

We also believe that certain licensees in China currently are not fully
complying with their contractual obligations to report their sales of licensed
products to us (which includes certain licensees underreporting a portion of
their 3G/4G device sales and a dispute with a licensee) and that unlicensed
companies may seek to delay execution of new licenses while the NDRC
investigation is ongoing. We expect calendar year 2014 3G/4G device shipments
to be approximately 1.3 billion globally. However, our estimate of calendar
year 2014 3G/4G device shipments that we currently expect to be reported to us
is approximately 1.04 billion to 1.13 billion, which is adjusted for units
that we believe may not be reported to us, are in dispute or are currently
unlicensed. We are taking steps to address these issues, although the timing
of any resolution is uncertain.

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

Qualcomm's Business Outlook Summary
FOURTH FISCAL QUARTER
                                         Q4 FY13              Current Guidance

                                         Results              Q4 FY14
                                                              Estimates
 Revenues                                  $6.48B             $6.5B - $7.4B
 Year-over-year change                                        even -
                                                              increase 14%
 Non-GAAP diluted earnings per share       $1.05              $1.20 - $1.35
 (EPS)
 Year-over-year change                                        increase 14% -
                                                              29%
 Diluted EPS attributable to QSI           ($0.01)            $0.00
 Diluted EPS attributable to share-based   ($0.13)              ($0.13)
 compensation
 Diluted EPS attributable to               ($0.04)              ($0.04)
 acquisition-related items
 GAAP diluted EPS                          $0.86              $1.03 - $1.18
 Year-over-year change                                        increase 20% -
                                                              37%
 Metrics
 MSM chip shipments                      190M                 230M - 245M
 Year-over-year change                                        increase 21% -
                                                              29%
 Total reported device sales (1)         approx.              approx. $53.0B
                                         $60.2B*              - $59.0B*
 Year-over-year change                                        decrease 2% -
                                                              12%
 *Est. sales in June quarter, reported
 in September quarter
FISCAL YEAR
                            FY 2013        Prior Guidance       Current
                                                                Guidance FY
                            Results        FY 2014 Estimates    2014 Estimates
                                           (2)
 Revenues                      $24.87B     $26.0B - $27.5B      $26.3B -
                                                                $27.2B
 Year-over-year change                     increase 5% - 11%    increase 6%
                                                                - 9%
 Non-GAAP diluted EPS          $4.51       $5.05 - $5.25        $5.21 -
                                                                $5.36
 Year-over-year change                     increase 12% - 16%   increase 16%
                                                                - 19%
 Diluted EPS attributable      $0.02                 ($0.01)        ($0.01)
 to QSI
 Diluted EPS attributable
 to share-based                ($0.51)               ($0.51)        ($0.51)
 compensation
 Diluted EPS attributable
 to acquisition-related        ($0.16)               ($0.16)        ($0.16)
 items
 Diluted EPS attributable      $0.04       N/A                      $0.04
 to tax items
 GAAP diluted EPS              $3.91       $4.37 - $4.57        $4.57 -
                                                                $4.72
 Year-over-year change                     increase 12% - 17%   increase 17%
                                                                - 21%
 Metrics
 Est. fiscal year* 3G/4G    approx. $223   approx. $218 -       approx. $222
 device average selling     - $229         $228                 - $228
 price range (1)
 *Shipments in Sept. to
 June quarters, reported in
 Dec. to Sept. quarters
CALENDAR YEAR Device Estimates (1)
                                    Prior        Current Guidance
                       Calendar     Guidance
                       2013         Calendar     Calendar 2014
                                    2014
                       Estimates                 Estimates
                                    Estimates
 Est. 3G/4G device
 shipments
 March quarter         approx. 244M not provided approx. 250M -
                       - 248M                    254M
 June quarter          approx. 260M not provided not provided
                       - 264M
 September quarter     approx. 276M not provided not provided
                       - 280M
 December quarter      approx. 295M not provided not provided
                       - 299M
 Est. calendar year    1,075M -     1,220M -     1,040M - 1,130M
 range (approx.)       1,091M       1,300M       (3)



    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,
    OFDMA-based and CDMA/OFDMA multimode subscriber devices (including
    handsets, modules, modem cards and other subscriber devices) by our
    licensees during a particular period (collectively, 3G/4G devices). The
    reported quarterly estimated ranges of average selling prices (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
(1) shipments the same way (e.g., some licensees report sales net of permitted
    deductions, including transportation, insurance, packing costs and other
    items, while other licensees report sales 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. In addition, certain
    licensees may not report (in the quarter in which they are contractually
    obligated to report) their sales of certain types of subscriber units,
    which (as a result of audits, legal actions or for other reasons) may be
    reported in a subsequent quarter. Accordingly, total reported device
    sales, estimated unit shipments and estimated ASPs for a particular period
    may include prior period activity that was not reported by the licensee
    until such particular period.
    Our prior guidance for fiscal 2014 GAAP diluted EPS excluded a $66 million
(2) tax benefit that we recorded in the third quarter of fiscal 2014 as a
    result of an agreement reached with the Internal Revenue Service, which
    was excluded from our Non-GAAP results.
    We expect calendar year 2014 3G/4G device shipments to be approximately
    1.3 billion globally. However, our estimate of calendar year 2014 3G/4G
    device shipments that we currently expect to be reported to us is
(3) approximately 1.04 billion to 1.13 billion, which is adjusted for units
    that we believe may not be reported to us, are in dispute or are currently
    unlicensed. We are taking steps to address these issues, although the
    timing of any resolution is uncertain.
N/A - Not Applicable
Sums may not equal totals due to rounding.

Results of Business Segments

The following table reconciles our Non-GAAP results to our GAAP results ($ in millions, except per share data):
                                Non-GAAP         Non-GAAP               Share-Based    Acquisition-    Tax
SEGMENTS    QCT       QTL       Reconciling      (3)         QSI (3)    Compensation   Related Items   Items  GAAP
                                Items (1) (2)                           (3)            (3)
Q3 - FISCAL 2014
Revenues    $4,957    $1,803    $46              $6,806            $—          $—              $—         $—  $6,806
Change from 17%       (3%)      (70%)            9%                                                           9%
prior year
Change from
prior       17%       (13%)     (13%)            7%                                                           7%
quarter
Operating
income                                           $2,425      ($5)       ($274)         ($71)              $—  $2,075
(loss)
Change from                                      19%         29%        2%             —%                     24%
prior year
Change from
prior                                            4%          17%        (9%)           21%                    4%
quarter
EBT         $1,116    $1,550    $177             $2,843      ($1)       ($274)         ($71)              $—  $2,497
Change from 51%       (5%)      N/M              29%         N/M        2%             —%                     31%
prior year
Change from
prior       51%       (15%)     N/M              7%          97%        (9%)           21%                    10%
quarter
EBT as % of 23%       86%       N/M              42%                                                          37%
revenues
Net income                                       $2,470            $—   ($232)         ($66)           $66    $2,238
(loss)
Change from                                      35%         N/M        (5%)           (3%)            N/M    42%
prior year
Change from
prior                                            10%         N/M        (17%)          19%             N/M    14%
quarter
Diluted EPS                                      $1.44       $0.00      ($0.14)        ($0.04)         $0.04  $1.31
Change from                                      40%         N/M        (8%)           —%              N/M    46%
prior year
Change from
prior                                            10%         N/M        (27%)          20%             N/M    15%
quarter
Diluted                                          1,714       1,714      1,714          1,714           1,714  1,714
shares used
Q2 - FISCAL 2014
Revenues    $4,243    $2,071    $53              $6,367            $—          $—              $—         $—  $6,367
Operating
income                                           2,337       (6)        (251)          (90)            —      1,990
(loss)
EBT         $740      $1,834    $78              2,652       (39)       (251)          (90)            —      2,272
Net income                                       2,255       (17)       (198)          (81)            —      1,959
(loss)
Diluted EPS                                      $1.31       ($0.01)    ($0.11)        ($0.05)            $—  $1.14
Diluted                                          1,719       1,719      1,719          1,719           1,719  1,719
shares used
Q3 - FISCAL 2013
Revenues    $4,222    $1,867    $154             $6,243            $—          $—              $—         $—  $6,243
Operating
income                                           2,035       (7)        (280)          (71)            —      1,677
(loss)
EBT         $738      $1,633    ($161)           2,210       51         (280)          (71)            —      1,910
Net income                                       1,823       43         (222)          (64)            —      1,580
(loss)
Diluted EPS                                      $1.03       $0.02      ($0.13)        ($0.04)            $—  $0.90
Diluted                                          1,765       1,765      1,765          1,765           1,765  1,765
shares used
Q4 - FISCAL 2013
Revenues    $4,457    $1,874    $149             $6,480            $—          $—              $—         $—  $6,480
Operating
income                                           1,940       (11)       (274)          (67)            —      1,588
(loss)
EBT         $702      $1,622    ($151)           2,173       (11)       (274)          (67)            —      1,821
Net income                                       1,818       (24)       (226)          (67)            —      1,501
(loss)
Diluted EPS                                      $1.05       ($0.01)    ($0.13)        ($0.04)            $—  $0.86
Diluted                                          1,738       1,738      1,738          1,738           1,738  1,738
shares used
                                       Non-GAAP         Non-GAAP           Share-Based     Acquisition- Tax
SEGMENTS          QCT      QTL         Reconciling      (3)      QSI (3)   Compensation    Related      Items GAAP
                                       Items (1) (2)                       (3)             Items (3)
9 MONTHS - FISCAL 2014
Revenues          $13,816  $5,774      $205             $19,795       $—            $—             $—      $— $19,795
Change from prior 13%      2%          (54%)            8%                                                    8%
year
Operating income                                        $6,611   ($16)     ($806)          ($231)          $— $5,558
(loss)
Change from prior                                       (2%)     20%       3%              (3%)               (1%)
year
EBT               $2,762   $5,054      ($217)           $7,599   ($36)     ($806)          ($231)          $— $6,526
Change from prior 11%      2%          N/M              3%       N/M       3%              (3%)               2%
year
EBT as % of       20%      88%         N/M              38%                                                   33%
revenues
Discontinued
operations, net                                         $430          $—            $—             $—      $— $430
of tax (4)
Net income (loss)                                       $6,888   ($13)     ($655)          ($213)       $66   $6,073
Change from prior                                       13%      N/M       1%              —%           3%    13%
year
Diluted EPS                                             $4.01    ($0.01)   ($0.38)         ($0.12)      $0.04 $3.53
Change from prior                                       16%      N/M       —%              —%           —%    16%
year
Diluted shares                                          1,718    1,718     1,718           1,718        1,718 1,718
used
9 MONTHS - FISCAL 2013
Revenues          $12,258  $5,680      $447             $18,385       $—            $—             $—      $— $18,385
Operating income                                        6,716    (20)      (829)           (225)        —     5,642
(loss)
EBT               $2,487   $4,968      ($95)            7,360    66        (829)           (225)        —     6,372
Net income (loss)                                       6,094    67        (661)           (212)        64    5,352
Diluted EPS                                             $3.46    $0.04     ($0.38)         ($0.12)      $0.04 $3.04
Diluted shares                                          1,760    1,760     1,760           1,760        1,760 1,760
used
12 MONTHS - FISCAL 2013
Revenues          $16,715  $7,554      $597             $24,866       $—            $—             $—      $— $24,866
Operating income                                        8,657    (31)      (1,103)         (293)        —     7,230
(loss)
EBT               $3,189   $6,590      ($245)           9,534    56        (1,103)         (293)        —     8,194
Net income (loss)                                       7,911    43        (886)           (279)        64    6,853
Diluted EPS                                             $4.51    $0.02     ($0.51)         ($0.16)      $0.04 $3.91
Diluted shares                                          1,754    1,754     1,754           1,754        1,754 1,754
used



    Non-GAAP reconciling items related to revenues consisted primarily of
    nonreportable segment revenues less intersegment eliminations. Non-GAAP
    reconciling items related to earnings before taxes consisted primarily of
(1) certain research and development expenses, selling, general and
    administrative expenses, other expenses or income and certain investment
    income that are not allocated to the segments for management reporting
    purposes; nonreportable segment results; and the elimination of
    intersegment profit.
    During the first quarter of fiscal 2014, as a result of the reassessment
    of management reporting, the former Qualcomm Wireless & Internet (QWI)
(2) segment was eliminated. Revenues and operating results for the divisions
    that comprised the QWI segment are included in Non-GAAP reconciling items.
    Prior period information has been adjusted to conform to the current
    presentation.
    At fiscal year end, the sum of the quarterly tax provision (benefit) for
    each column equals the annual tax provision (benefit) for each column
(3) computed in accordance with GAAP. In interim quarters, the sum of these
    provisions (benefits) may not equal the total GAAP tax provision, and this
    difference is allocated to tax provisions (benefits) among the columns.
    During the first quarter of fiscal 2014, a gain of $665 million was
(4) recorded associated with the sale of substantially all of the operations
    of our Omnitracs division.
N/M - Not Meaningful
N/A - Not Applicable
Sums may not equal totals due to rounding.

Conference Call

Qualcomm's third quarter fiscal 2014 earnings conference call will be
broadcast live on July 23, 2014, beginning at 2:45 p.m. Pacific Time (PT) at
http://investor.qualcomm.com/events.cfm . This conference call will include a
discussion of "Non-GAAP financial measures" as 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 other financial and statistical
information to be discussed on the conference call, will be posted at
www.qualcomm.com/investor immediately prior to commencement of the call. An
audio replay will be available at http://investor.qualcomm.com/events.cfm and
via telephone following the live call for 30 days thereafter. To listen to the
replay via telephone, U.S. callers may dial (855) 859-2056 and international
callers may dial (404) 537-3406. Callers should use reservation number
63935250.

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 and Non-GAAP results are presented herein.

The Company uses Non-GAAP financial information (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 QCT (Qualcomm CDMA Technologies) and
QTL (Qualcomm Technology Licensing) segments; and (iii) to compare the
performance and efficiency of these segments against each other and against
competitors. Non-GAAP measurements used by the Company include revenues, cost
of equipment and services revenues, R&D expenses, SG&A expenses, operating
income, net investment income, income or earnings before income taxes,
effective tax rate, net income and diluted earnings per share. The Company 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. The Company presents Non-GAAP
financial information to provide greater transparency to investors with
respect to its use of such information in financial and operational
decision-making.

Non-GAAP information used by management excludes QSI and certain share-based
compensation, acquisition-related items and tax items.

  *QSI is excluded because the Company expects to exit its strategic
    investments at various times, and the effects of fluctuations in the value
    of such investments and realized gains or losses are viewed by management
    as unrelated to the Company's operational performance.
  *Share-based compensation expense primarily relates to restricted stock
    units. Non-cash share-based compensation is excluded because management
    views such expenses as unrelated to the operating activities of the
    Company's ongoing core businesses.
  *Acquisition-related items include amortization and impairment of certain
    intangible assets, recognition of the step-up of inventories to fair value
    and the related tax effects of these items starting with acquisitions
    completed in the third quarter of fiscal 2011, as well as any tax effects
    from restructuring the ownership of such acquired assets. Additionally,
    the Company excludes expenses related to the termination of contracts that
    limit the use of the acquired intellectual property. These
    acquisition-related items are excluded and are not allocated to the
    Company's segments because management views such expenses as unrelated to
    the operating activities of the Company's ongoing core businesses. In
    addition, these charges are impacted by the size and timing of
    acquisitions, potentially obscuring period-to-period comparisons of the
    Company's operating businesses.
  *Certain tax items that are unrelated to the fiscal year in which they are
    recorded are excluded in order to provide a clearer understanding of the
    Company's ongoing Non-GAAP tax rate and after tax earnings.

About Qualcomm

Qualcomm Incorporated (Nasdaq: QCOM) is a world leader in 3G, 4G and
next-generation wireless technologies. Qualcomm Incorporated includes
Qualcomm's licensing business, QTL, and the vast majority of its patent
portfolio. Qualcomm Technologies, Inc., a wholly - owned subsidiary of
Qualcomm Incorporated, operates, along with its subsidiaries, substantially
all of Qualcomm's engineering, research and development functions, and
substantially all of its products and services businesses, including its
semiconductor business, QCT. For more than 25 years, Qualcomm ideas and
inventions have driven the evolution of digital communications, linking people
everywhere more closely to information, entertainment and each other. For more
information, visit www.qualcomm.com .

Note Regarding Forward-Looking Statements

In addition to the historical information contained herein, this news release
contains forward-looking statements that are inherently subject to risks and
uncertainties, including but not limited to: statements regarding our
near-term financial outlook for the licensing business; better than expected
performance in our semiconductor business; stock repurchases that we plan to
complete during the fourth quarter of fiscal 2014 under our current stock
repurchase program; challenges to our business in China; our business outlook;
and our estimates and guidance related to revenues, our fiscal 2014 annual
effective tax rates, GAAP and Non-GAAP diluted earnings per share, MSM chip
shipments, total reported device sales, 3G/4G device average selling price
ranges and 3G/4G device shipments and ranges. Forward-looking statements are
generally identified by words such as "estimates," "guidance," "expects,"
"anticipates," "intends," "plans," "believes," "seeks" and similar
expressions. Actual results may differ materially from those referred to in
the forward-looking statements due to a number of important factors, including
but not limited to: risks associated with the commercial deployment of CDMA,
OFDMA and other communications technologies; continuing growth in our
customers' and licensees' sales of products and services based on these
technologies and our ability to continue to drive customer demand for our
products and services based on these technologies; competition; our dependence
on a small number of customers and licensees; the continued and future success
of our licensing programs; attacks on our licensing business model, including
current and future legal proceedings or actions of governmental or
quasi-governmental bodies or standards or industry organizations; the
enforcement and protection of our intellectual property rights; the commercial
success of our new technologies, products and services; claims by third
parties that we infringe their intellectual property; our dependence on a
limited number of third-party suppliers; our stock price and earnings
volatility; government regulations and policies; acquisitions, strategic
transactions and investments; global economic conditions that impact the
mobile communications industry; foreign currency fluctuations; and failures in
our products or services or in the products of our customers, including those
resulting from security vulnerabilities, defects or errors. These and other
risks are set forth in the Company's Quarterly Report on Form 10-Q for the
third quarter ended June 29, 2014 filed with the SEC. Our reports filed with
the SEC are available on our website at www.qualcomm.com . 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 and MSM are trademarks of Qualcomm Incorporated, registered in the
United States and other countries. All other trademarks are the property of
their respective owners.

Qualcomm Contact: Warren KneeshawVice President, Investor Relations Phone:
1-858-658-4813 e-mail: ir@qualcomm.com

Supplemental Information
(Unaudited)
Three Months Ended June 29, 2014
             Non-GAAP                 Share-Based   Acquisition- Tax      GAAP
             Results      QSI         Compensation  Related      Items
                                                    Items        (a)      Results
($ in
millions,
except per
share data)
  Cost of
  equipment
  and         $ 2,666      $ —          $  12         $  62       $ —      $ 2,740
  services
  revenues
  R&D         1,251        1            174           3           —        1,429
  expenses
  SG&A        484          4            88            6           —        582
  expenses
  Other
  income,     20      (b)  —            —             —           —        20
  net
  Operating
  income      2,425        (5)          (274)         (71)        —        2,075
  (loss)
  Investment
  income,     $ 418   (c)  $ 4    (d)   $  —          $  —        $ —      $ 422
  net
  Tax rate    13%          —%           15%           7%          N/A      10%
  Net income  $ 2,470      $ —          $  (232)      $  (66)     $ 66     $ 2,238
  (loss)
  Diluted     $ 1.44       $ 0.00       $  (0.14)     $  (0.04)   $ 0.04   $ 1.31
  EPS
         Included a $66 million tax benefit related to an agreement reached with
(a)      the Internal Revenue Service related to transfer pricing on our fiscal
         2013 tax return.
         Included $184 million of other income from the reversal of accruals
(b)      related to our litigation with ParkerVision, partially offset by $164
         million of impairment charges on goodwill and long-lived assets related to
         our QMT division.
         Included $288 million in net realized gains on investments, $139 million
(c)      in interest and dividend income and $4 million in gains on deconsolidation
         of subsidiaries, partially offset by $8 million in other-than-temporary
         losses on investments and $5 million in net losses on derivatives.
         Included $10 million in net realized gains on investments, partially
(d)      offset by $3 million in other-than-temporary losses on investments, $2
         million in equity in losses of investees and $1 million in net losses on
         derivatives.



Nine Months Ended June 29, 2014
             Non-GAAP                   Share-Based  Acquisition- Tax      GAAP
             Results      QSI           Compensation Related      Items
                                                     Items        (a)      Results
($ in
millions,
except per
share data)
  Cost of
  equipment
  and         $ 7,706      $ —            $  37        $  186      $ —      $ 7,929
  services
  revenues
  R&D         3,573        4              510          26          —        4,113
  expenses
  SG&A        1,455        12             259          19          —        1,745
  expenses
  Other
  expenses,   450     (e)  —              —            —           —        450
  net
  Operating
  income      6,611        (16)           (806)        (231)       —        5,558
  (loss)
  Investment
  income,     $ 988   (f)  $ (20)   (g)   $  —         $  —        $ —      $ 968
  net
  Tax rate    15%          56%            19%          8%          N/A      14%
  Net income  $ 6,888      $ (13)         $  (655)     $  (213)    $ 66     $ 6,073
  (loss)
  Diluted     $ 4.01       $ (0.01)       $  (0.38)    $  (0.12)   $ 0.04   $ 3.53
  EPS
         Included $607 million of impairment charges on long-lived assets and
         goodwill related to our QMT division and a $16 million goodwill impairment
(e)      charge related to our former QRS (Qualcomm Retail Solutions) division,
         partially offset by the reversal of the $173 million accrual recorded in
         fiscal 2013 related to our litigation with ParkerVision.
         Included $650 million in net realized gains on investments, $459 million in
         interest and dividend income, $5 million in gains on deconsolidation of
(f)      subsidiaries and $1 million in net gains on derivatives, partially offset
         by $124 million in other-than-temporary losses on investments and $3
         million in interest expense.
         Included $46 million in other-than-temporary losses on investments, $7
         million in equity in losses of investees, $2 million in net losses on
(g)      derivatives and $1 million in interest expense, partially offset by $35
         million in net realized gains on investments and $1 million in interest and
         dividend income.
N/A - Not Applicable
Sums may not equal totals due to rounding.



Reconciliation of Non-GAAP Tax Rates to GAAP Tax Rates (a)
(Unaudited)
Three Months Ended June 29, 2014
($ in      Non-GAAP                     Share-Based       Acquisition-     Tax     GAAP
millions)  Results         QSI          Compensation      Related          Items   Results
                                                          Items            (b)
Income
(loss)
from
continuing  $    2,843     $   (1)      $     (274)       $      (71)      $  —    $ 2,497
operations
before
income
taxes
Income tax
(expense)   (373)          —            42                5                66      (260)
benefit
Income
(loss)
from        $    2,470     $   (1)      $     (232)       $      (66)      $  66   $ 2,237
continuing
operations
Tax rate   13%             —%           15%               7%               N/A     10%
Nine Months Ended June 29, 2014
($ in       Non-GAAP                  Share-Based       Acquisition-      Tax      GAAP
millions)   Results       QSI         Compensation      Related Items     Items    Results
                                                                          (b)
Income
(loss)
from
continuing  $ 7,599       $ (36)      $   (806)         $    (231)        $  —     $ 6,526
operations
before
income
taxes
Income tax
(expense)   (1,141)       20          151               18                66       (886)
benefit
Income
(loss)
from        $ 6,458       $ (16)      $   (655)         $    (213)        $  66    $ 5,640
continuing
operations
Tax rate    15%           56%         19%               8%                N/A      14%



    At fiscal year end, the sum of the quarterly tax provision (benefit) for
    each column equals the annual tax provision (benefit) for each column
(a) computed in accordance with GAAP. In interim quarters, the sum of these
    provisions (benefits) may not equal the total GAAP tax provision, and
    this difference is allocated to tax provisions (benefits) among the
    columns.
    During the third quarter of fiscal 2014, we recorded a $66 million tax
(b) benefit as a result of an agreement reached with the Internal Revenue
    Service related to transfer pricing on our fiscal 2013 tax return.
N/A - Not Applicable

Qualcomm Incorporated
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except per share data)
(Unaudited)
                                             June 29, 2014  September 29, 2013
ASSETS
Current assets:
Cash and cash equivalents                    $   7,944      $   6,142
Marketable securities                        10,209         8,824
Accounts receivable, net                     2,084          2,142
Inventories                                  1,185          1,302
Deferred tax assets                          451            573
Other current assets                         535            572
Total current assets                         22,408         19,555
Marketable securities                        14,563         14,440
Deferred tax assets                          1,195          1,059
Property, plant and equipment, net           2,555          2,995
Goodwill                                     4,183          3,976
Other intangible assets, net                 2,608          2,553
Other assets                                 843            938
Total assets                                 $   48,355     $   45,516
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable                       $   1,900      $   1,554
Payroll and other benefits related           740            839
liabilities
Unearned revenues                            705            501
Other current liabilities                    2,676          2,319
Total current liabilities                    6,021          5,213
Unearned revenues                            3,168          3,666
Other liabilities                            379            550
Total liabilities                            9,568          9,429
Stockholders' equity:
Qualcomm stockholders' equity:
Preferred stock, $0.0001 par value; 8 shares —              —
authorized; none outstanding
Common stock and paid-in capital, $0.0001
par value; 6,000 shares authorized; 1,678    8,346          9,874
and 1,685 shares issued and outstanding,
respectively
Retained earnings                            29,618         25,461
Accumulated other comprehensive income       825            753
Total Qualcomm stockholders' equity          38,789         36,088
Noncontrolling interests                     (2)            (1)
Total stockholders' equity                   38,787         36,087
Total liabilities and stockholders' equity   $   48,355     $   45,516



Qualcomm Incorporated
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
                   Three Months Ended                Nine Months Ended
                   June 29, 2014     June 30, 2013   June 29, 2014   June 30,
                                                                     2013
Revenues:
Equipment and      $    4,922        $   4,286       $  13,803       $ 12,474
services
Licensing          1,884             1,957           5,992           5,911
Total revenues     6,806             6,243           19,795          18,385
Costs and
expenses:
Cost of equipment
and services       2,740             2,497           7,929           7,106
revenues
Research and       1,429             1,298           4,113           3,618
development
Selling, general   582               613             1,745           1,861
and administrative
Other              (20)              158             450             158
Total costs and    4,731             4,566           14,237          12,743
expenses
Operating income   2,075             1,677           5,558           5,642
Investment income, 422               233             968             730
net
Income from
continuing         2,497             1,910           6,526           6,372
operations before
income taxes
Income tax expense (260)             (332)           (886)           (1,028)
Income from
continuing         2,237             1,578           5,640           5,344
operations
Discontinued
operations, net of —                 —               430             —
income taxes
Net income         2,237             1,578           6,070           5,344
Net loss
attributable to    1                 2               3               8
noncontrolling
interests
Net income
attributable to    $    2,238        $   1,580       $  6,073        $ 5,352
Qualcomm
Basic earnings per
share attributable
to Qualcomm:
Continuing         $    1.33         $   0.91        $  3.35         $ 3.11
operations
Discontinued       —                 —               0.25            —
operations
Net income         $    1.33         $   0.91        $  3.60         $ 3.11
Diluted earnings
per share
attributable to
Qualcomm:
Continuing         $    1.31         $   0.90        $  3.28         $ 3.04
operations
Discontinued       —                 —               0.25            —
operations
Net income         $    1.31         $   0.90        $  3.53         $ 3.04
Shares used in per
share
calculations:
Basic              1,683             1,727           1,686           1,720
Diluted            1,714             1,765           1,718           1,760
Dividends per      $    0.42         $   0.35        $  1.12         $ 0.85
share announced
Qualcomm Incorporated
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
                      Three Months Ended              Nine Months Ended
                      June 29, 2014    June 30,       June 29, 2014  June 30,
                                       2013                          2013
Operating Activities:
Net income            $     2,237      $    1,578     $      6,070   $ 5,344
Adjustments to
reconcile net income
to net cash provided
by operating
activities:
Depreciation and      292              255            853            744
amortization expense
Gain on sale of
discontinued          —                —              (665)          —
operations
Revenues related to
non-monetary          (31)             (31)           (93)           (93)
exchanges
Long-lived asset and
goodwill impairment   164              163            642            191
charges
Income tax provision
(less than) in excess (24)             59             244            220
of income tax
payments
Non-cash portion of
share-based           274              281            806            831
compensation expense
Incremental tax
benefits from         (70)             (75)           (239)          (178)
share-based
compensation
Net realized gains on
marketable securities (298)            (60)           (685)          (239)
and other investments
Impairment losses on
marketable securities 11               27             170            49
and other investments
Other items, net      46               5              88             34
Changes in assets and
liabilities:
Accounts receivable,  139              (21)           43             (445)
net
Inventories           (37)             (245)          116            (699)
Other assets          9                90             136            (111)
Trade accounts        286              221            321            598
payable
Payroll, benefits and (235)            (151)          (337)          52
other liabilities
Unearned revenues     (90)             (19)           (202)          (30)
Net cash provided by  2,673            2,077          7,268          6,268
operating activities
Investing Activities:
Capital expenditures  (158)            (314)          (955)          (808)
Purchases of
available-for-sale    (2,488)          (4,663)        (10,315)       (12,112)
securities
Proceeds from sales
and maturities of     4,060            2,805          9,744          7,337
available-for-sale
securities
Purchases of trading  (1,054)          (862)          (2,868)        (2,658)
securities
Proceeds from sales
and maturities of     826              767            2,619          2,365
trading securities
Purchases of other    (220)            —              (220)          —
marketable securities
Proceeds from sale of
discontinued          —                —              788            —
operations, net of
cash sold
Acquisitions and
other investments,    (100)            (47)           (447)          (179)
net of cash acquired
Other items, net      40               (2)            102            68
Net cash provided
(used) by investing   906              (2,316)        (1,552)        (5,987)
activities
Financing Activities:
Borrowing under loans —                534            —              534
and debentures
Repayment of loans    —                (492)          —              (492)
and debentures
Proceeds from
issuance of common    194              217            1,147          964
stock
Incremental tax
benefits from         70               75             239            178
share-based
compensation
Repurchases and
retirements of common (1,350)          (1,039)        (3,354)        (1,289)
stock
Dividends paid        (706)            (604)          (1,884)        (1,463)
Other items, net      (184)            37             (65)           35
Net cash used by      (1,976)          (1,272)        (3,917)        (1,533)
financing activities
Changes in cash and
cash equivalents held —                (46)           —              (15)
for sale
Effect of exchange
rate changes on cash  4                (3)            3              (7)
and cash equivalents
Net increase
(decrease) in cash    1,607            (1,560)        1,802          (1,274)
and cash equivalents
Cash and cash
equivalents at        6,337            4,093          6,142          3,807
beginning of period
Cash and cash
equivalents at end of $     7,944      $    2,533     $      7,944   $ 2,533
period



Website: http://www.qualcomm.com
 
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