The Company will aggressively defend itself and enforce its patent rights against any unlicensed use, and the Company believes the patent infringement claims made against it are without merit. Headquartered in San Diego, QUALCOMM develops, manufactures, markets, licenses and operates advanced communications systems and products based on its proprietary digital wireless technologies. The Company's primary product areas are the OmniTRACs(R) system (a geostationary satellite-based, mobile communications system providing two-way data and position reporting services), CDMA wireless communications systems and products and, in conjunction with others, the development of the Globalstar(TM) low-earth-orbit (LEO) satellite communications system. Other Company products include the Eudora Pro(TM) electronic mail software, ASIC products, and communications equipment and systems for government and commercial customers worldwide. For more information on QUALCOMM products and technologies visit the Company's web site at http://www.qualcomm.com/. Except for the historical information contained herein, this news release contains forward-looking statements that are subject to risks and uncertainties, including timely product development and commercial implementation of the Company's CDMA technology, continued growth in the CDMA subscriber population and the scale up and operations of CDMA systems, timing and receipt of license fees and royalties, the Company's ability to successfully manufacture significant quantities of CDMA or other equipment on a timely and profitable basis and those related to performance guarantees, change in economic conditions of the various markets the Company serves, outcome of litigation matters, as well as the other risks detailed from time to time in the Company's SEC reports, including the report on Form 10-K for the year ended September 29, 1996 and most recent Form 10-Q's. QUALCOMM, OmniTRACS and Eudora are registered trademarks and Eudora Pro, Eudora Light, Eudora WorldMail, Q, QCP-2700, QCP-820, QCP-1920, and QCT-6200 are trademarks of QUALCOMM Incorporated. Globalstar is a trademark of Loral QUALCOMM Satellite Services Incorporated. Macintosh and Windows are trademarks of their respective owners. QUALCOMM Incorporated Condensed Consolidated Balance Sheets (In thousands, except per share data) (Unaudited) ASSETS March 30, September 29, 1997 1996 Current assets: Cash and cash equivalents $406,300 $110,143 Investments 468,732 236,129 Accounts receivable, net 357,667 217,433 Finance receivables 87,063 -- Inventories 207,274 171,511 Other current assets 16,009 15,974 Total current assets 1,543,045 751,190 Property, plant and equipment, net 362,072 352,699 Investments 3,006 8,009 Other assets 131,870 73,432 Total assets $2,039,993 $1,185,330 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $314,805 $229,799 Unearned revenue 17,470 13,226 Bank lines of credit 140,000 80,700 Current portion of long-term debt 3,082 2,234 Total current liabilities 475,357 325,959 Long-term debt 9,283 10,908 Other liabilities 6,864 3,550 Total liabilities 491,504 340,417 Mandatorily redeemable convertible preferred securities of a subsidiary 660,000 -- Stockholders' equity: Preferred stock, $0.0001 par value -- -- Common stock, $0.0001 par value 7 7 Paid-in capital 836,747 819,042 Retained earnings 51,735 25,864 Total stockholders' equity 888,489 844,913 Total liabilities and stockholders' equity $2,039,993 $1,185,330 QUALCOMM Incorporated Condensed Consolidated Statements Of Income (In thousands, except per share data) (Unaudited) Three Months Ended Six Months Ended March 30, March 31, March 30, March 31, 1997 1996 1997 1996 Revenues: Communications systems $507,780 $104,120 $832,360 $192,824 Contract services 49,365 28,036 88,044 60,199 License, royalty and development fees 28,601 17,107 54,282 42,843 Total revenues 585,746 149,263 974,686 295,866 Operating expenses: Communications systems 418,724 78,866 678,209 141,618 Contract services 36,470 18,650 64,195 40,953 Research and development 53,106 35,324 99,284 67,579 Selling and marketing 31,100 16,539 58,041 32,029 General and administrative 22,012 8,464 37,604 19,720 Other 8,792 -- 8,792 -- Total operating expenses 570,204 157,843 946,125 301,899 Operating income 15,542 (8,580) 28,561 (6,033) Interest income 6,548 6,651 11,001 14,527 Interest expense (3,212) (666) (5,196) (1,357) Unrealized gain on trading securities 9,454 -- 9,454 -- Distributions on convertible preferred securities of subsidiary (3,895) -- (3,895) -- Minority interest in (income) loss of consolidated subsidiary (2,110) 2,669 (5,430) 6,984 Income before income taxes 22,327 74 34,495 14,121 Income tax (expense) benefit (5,582) 1,391 (8,624) (2,542) Net income $16,745 $1,465 $25,871 $11,579 Net earnings per common share: Primary $0.23 $0.02 $0.36 $0.17 Fully diluted $0.23 $0.02 $0.36 $0.17 Shares used in per share calculation: Primary 72,821 70,158 71,740 69,673 Fully diluted 73,758 70,158 72,208 69,702 SOURCE QUALCOMM Incorporated CONTACT: Richard Grannis, Investor Relations of QUALCOMM, 619-658-4817, [email protected] (QCOM)