Qualcomm Announces Record Third Quarter Fiscal 2014 Results

         Qualcomm Announces Record Third Quarter Fiscal 2014 Results

Revenues $6.8 billion

GAAP EPS $1.31, Non-GAAP EPS $1.44

- Raising Fiscal 2014 EPS Guidance -

PR Newswire

SAN DIEGO, July 23, 2014

SAN DIEGO, July 23, 2014 /PRNewswire-FirstCall/ -- 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)*

  oRevenues: ^1 $6.81 billion, up 9 percent year-over-year (y-o-y) and 7
    percent sequentially.
  oOperating income: ^1 $2.08 billion, up 24 percent y-o-y and 4 percent
    sequentially.
  oNet income: ^2 $2.24 billion, up 42 percent y-o-y and 14 percent
    sequentially.
  oDiluted earnings per share: ^2 $1.31, up 46 percent y-o-y and 15 percent
    sequentially.
  oEffective tax rate: ^1 10 percent.
  oOperating cash flow: $2.67 billion, up 29 percent y-o-y; 39 percent of
    revenues.
  oReturn 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.

  oRevenues: $6.81 billion, up 9 percent y-o-y and 7 percent sequentially.
  oOperating income: $2.43 billion, up 19 percent y-o-y and 4 percent
    sequentially.
  oNet income: $2.47 billion, up 35 percent y-o-y and 10 percent
    sequentially.
  oDiluted earnings per share: $1.44, up 40 percent y-o-y and 10 percent
    sequentially.
  oEffective 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:

  oThe third quarter of fiscal 2014 results included:

       o$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
       o$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.

  oThe third quarter of fiscal 2013 results included:

       o$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

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

       oMarch 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 andDevelopment

                                         Share-Based   Acquisition-
($ in millions)           Non-GAAP  QSI  Compensation  Related       GAAP
                                                       Items
Third quarter fiscal 2014 $  1,251  $ 1  $    174      $    3        $ 1,429
As % of revenues          18%                                        21%
Third quarter fiscal 2013 $  1,130  $ 1  $    166      $    1        $ 1,298
As % of revenues          18%                                        21%
Year-over-year change ($) 11%       N/M  5%            N/M           10%
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

                                           Share-Based   Acquisition-
($ in millions)           Non-GAAP  QSI    Compensation  Related       GAAP
                                                         Items
Third quarter fiscal 2014 $  484    $  4   $    88       $    6        $ 582
As % of revenues          7%                                           9%
Third quarter fiscal 2013 $  505    $  6   $    96       $    6        $ 613
As % of revenues          8%                                           10%
Year-over-year change ($) (4%)      (33%)  (8%)          N/M           (5%)
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 believemay 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
                                                               Current
                                            Q4 FY13            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 (EPS)     $1.05           $1.20 - $1.35
 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. $60.2B*    approx. $53.0B
                                                               - $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
                              Results          FY 2014 Estimates FY 2014
                                               (2)               Estimates
   Revenues                      $24.87B       $26.0B - $27.5B   $26.3B -
                                                                 $27.2B
   Year-over-year change                       increase 5% -     increase 6%
                                               11%               - 9%
   Non-GAAP diluted EPS          $4.51         $5.05 - $5.25     $5.21 -
                                                                 $5.36
   Year-over-year change                       increase 12% -    increase 16%
                                               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% -    increase 17%
                                               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 Guidance  Current Guidance
                          Calendar 2013
                                              Calendar 2014   Calendar 2014
                          Estimates
                                              Estimates       Estimates
 Est. 3G/4G device
 shipments
 March quarter            approx. 244M - 248M not provided    approx. 250M -
                                                              254M
 June quarter             approx. 260M - 264M not provided    not provided
 September quarter        approx. 276M - 280M not provided    not provided
 December quarter         approx. 295M - 299M not provided    not provided
 Est. calendar year range 1,075M - 1,091M     1,220M - 1,300M 1,040M - 1,130M
 (approx.)                                                   (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 believemay 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                     Share-Based  Acquisition-
SEGMENTS  QCT    QTL    Reconciling Non-GAAP QSI (3) Compensation Related      Tax   GAAP
                        Items (1)   (3)              (3)          Items (3)    Items
                        (2)
Q3 - FISCAL 2014
Revenues  $4,957 $1,803 $46         $6,806      $—       $—           $—         $—  $6,806
Change
from      17%    (3%)   (70%)       9%                                               9%
prior
year
Change
from      17%    (13%)  (13%)       7%                                               7%
prior
quarter
Operating
income                              $2,425   ($5)    ($274)       ($71)          $—  $2,075
(loss)
Change
from                                19%      29%     2%           —%                 24%
prior
year
Change
from                                4%       17%     (9%)         21%                4%
prior
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      51%    (15%)  N/M         7%       97%     (9%)         21%                10%
prior
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                                10%      N/M     (17%)        19%          N/M   14%
prior
quarter
Diluted                             $1.44    $0.00   ($0.14)      ($0.04)      $0.04 $1.31
EPS
Change
from                                40%      N/M     (8%)         —%           N/M   46%
prior
year
Change
from                                10%      N/M     (27%)        20%          N/M   15%
prior
quarter
Diluted
shares                              1,714    1,714   1,714        1,714        1,714 1,714
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                             $1.31    ($0.01) ($0.11)      ($0.05)        $—  $1.14
EPS
Diluted
shares                              1,719    1,719   1,719        1,719        1,719 1,719
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                             $1.03    $0.02   ($0.13)      ($0.04)        $—  $0.90
EPS
Diluted
shares                              1,765    1,765   1,765        1,765        1,765 1,765
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                             $1.05    ($0.01) ($0.13)      ($0.04)        $—  $0.86
EPS
Diluted
shares                              1,738    1,738   1,738        1,738        1,738 1,738
used

                            Non-GAAP                     Share-Based  Acquisition-
SEGMENTS     QCT     QTL    Reconciling Non-GAAP QSI (3) Compensation Related      Tax   GAAP
                            Items (1)   (3)              (3)          Items (3)    Items
                            (2)
9 MONTHS - FISCAL 2014
Revenues     $13,816 $5,774 $205        $19,795     $—       $—           $—         $—  $19,795
Change from  13%     2%     (54%)       8%                                               8%
prior year
Operating
income                                  $6,611   ($16)   ($806)       ($231)         $—  $5,558
(loss)
Change from                             (2%)     20%     3%           (3%)               (1%)
prior year
EBT          $2,762  $5,054 ($217)      $7,599   ($36)   ($806)       ($231)         $—  $6,526
Change from  11%     2%     N/M         3%       N/M     3%           (3%)               2%
prior year
EBT as % of  20%     88%    N/M         38%                                              33%
revenues
Discontinued
operations,                             $430        $—       $—           $—         $—  $430
net of tax
(4)
Net income                              $6,888   ($13)   ($655)       ($213)       $66   $6,073
(loss)
Change from                             13%      N/M     1%           —%           3%    13%
prior year
Diluted EPS                             $4.01    ($0.01) ($0.38)      ($0.12)      $0.04 $3.53
Change from                             16%      N/M     —%           —%           —%    16%
prior year
Diluted                                 1,718    1,718   1,718        1,718        1,718 1,718
shares 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                              6,094    67      (661)        (212)        64    5,352
(loss)
Diluted EPS                             $3.46    $0.04   ($0.38)      ($0.12)      $0.04 $3.04
Diluted                                 1,760    1,760   1,760        1,760        1,760 1,760
shares 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                              7,911    43      (886)        (279)        64    6,853
(loss)
Diluted EPS                             $4.51    $0.02   ($0.51)      ($0.16)      $0.04 $3.91
Diluted                                 1,754    1,754   1,754        1,754        1,754 1,754
shares 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/investorimmediately prior to commencement of the call. An
audio replay will be available at http://investor.qualcomm.com/events.cfmand
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.

  oQSI 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.
  oShare-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.
  oAcquisition-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.
  oCertain 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,
visitwww.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 Kneeshaw
Vice President, Investor Relations
Phone: 1-858-658-4813
e-mail: ir@qualcomm.com

Supplemental Information
(Unaudited)
Three Months Ended June 29, 2014
                                                                      
            Non-GAAP     
            Results                  Share-Based   Acquisition- Tax      GAAP
                         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     
            Results                    Share-Based  Acquisition- Tax      GAAP
                         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
                                              Acquisition-   Tax
($ in                   QSI     Share-Based    Related        Items   GAAP
millions)    Non-GAAP           Compensation   Items          (b)     Results
             Results
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   Results
                                               Items          (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,   September 29,
                                                      2014       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 liabilities        740        839
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 and 1,685 shares       8,346      9,874
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,  June 30,  June 29,   June 30,
                                      2014      2013      2014       2013
Revenues:
Equipment and services                $ 4,922   $ 4,286   $ 13,803   $ 12,474
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 development              1,429     1,298     4,113      3,618
Selling, general and administrative   582       613       1,745      1,861
Other                                 (20)      158       450        158
Total costs and expenses              4,731     4,566     14,237     12,743
Operating income                      2,075     1,677     5,558      5,642
Investment income, net                422       233       968        730
Income from continuing operations     2,497     1,910     6,526      6,372
before income taxes
Income tax expense                    (260)     (332)     (886)      (1,028)
Income from continuing operations     2,237     1,578     5,640      5,344
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 Qualcomm   $ 2,238   $ 1,580   $ 6,073    $ 5,352
Basic earnings per share attributable
to Qualcomm:
Continuing operations                 $ 1.33    $ 0.91    $ 3.35     $ 3.11
Discontinued operations               —         —         0.25       —
Net income                            $ 1.33    $ 0.91    $ 3.60     $ 3.11
Diluted earnings per share
attributable to Qualcomm:
Continuing operations                 $ 1.31    $ 0.90    $ 3.28     $ 3.04
Discontinued operations               —         —         0.25       —
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 share announced         $ 0.42    $ 0.35    $ 1.12     $ 0.85

Qualcomm Incorporated
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
                                      Three Months Ended  Nine Months Ended
                                      June 29,  June 30,  June 29,   June 30,
                                      2014      2013      2014       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 amortization expense 292       255       853        744
Gain on sale of discontinued          —         —         (665)      —
operations
Revenues related to non-monetary      (31)      (31)      (93)       (93)
exchanges
Long-lived asset and goodwill         164       163       642        191
impairment charges
Income tax provision (less than) in   (24)      59        244        220
excess 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      (298)     (60)      (685)      (239)
securities and other investments
Impairment losses on marketable       11        27        170        49
securities and other investments
Other items, net                      46        5         88         34
Changes in assets and liabilities:
Accounts receivable, net              139       (21)      43         (445)
Inventories                           (37)      (245)     116        (699)
Other assets                          9         90        136        (111)
Trade accounts payable                286       221       321        598
Payroll, benefits and other           (235)     (151)     (337)      52
liabilities
Unearned revenues                     (90)      (19)      (202)      (30)
Net cash provided by operating        2,673     2,077     7,268      6,268
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 securities       (1,054)   (862)     (2,868)    (2,658)
Proceeds from sales and maturities of 826       767       2,619      2,365
trading securities
Purchases of other marketable         (220)     —         (220)      —
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 and debentures  —         534       —          534
Repayment of loans and debentures     —         (492)     —          (492)
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 financing activities (1,976)   (1,272)   (3,917)    (1,533)
Changes in cash and cash equivalents  —         (46)      —          (15)
held for sale
Effect of exchange rate changes on    4         (3)       3          (7)
cash and cash equivalents
Net increase (decrease) in cash and   1,607     (1,560)   1,802      (1,274)
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

SOURCE Qualcomm Incorporated

Website: http://www.qualcomm.com
 
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