QUALCOMM REPORTS STRONG THIRD QUARTER RESULTS REVENUES (cont) THIS IS PART THREE OF THREE During the third quarter of fiscal 1997, QUALCOMM recognized an additional $4 million pre-tax earnings in conjunction with the sale of all of the trading securities resulting from the Globalstar Telecommunications Ltd. warrants exercised in the second quarter of fiscal 1997. This is in addition to the nearly $10 million pre-tax income recognized during the second fiscal quarter of 1997 when the securities were adjusted to market price in anticipation of the sale. The Company's interest in Globalstar L.P., which is indirectly owned through certain limited partnerships, continues to be approximately 7 percent. Interest income more than doubled in the third quarter of fiscal 1997, increasing to $12 million as a result of proceeds of a convertible preferred securities offering during the second fiscal quarter of 1997. Interest expense increased to $3 million in the third quarter of fiscal 1997, compared to approximately $1 million in the third quarter of fiscal 1996 as a result of increased bank borrowings to support the working capital needs of QPE. Distributions accrued on convertible preferred securities of $10 million for the third quarter of fiscal 1997 relate to the private placement of $660 million of 5.75 percent Trust Convertible Preferred Securities by QUALCOMM in March 1997. Consistent with the decline in handset revenues, minority interest also declined from the previous quarter to approximately $1 million. QUALCOMM manufactures and sells phone products both through QPE and independently. The Company realized an income tax benefit during the third quarter of fiscal 1997 due to the recognition of the entire deferred tax asset. This asset recognition favorably impacted earnings per share by $.10 in the current quarter, based on the estimated annual tax rate of 20 percent for the year. In future periods, the Company expects that the effective tax rate will be reflective of the tax rate of other California-based companies. 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* Low-Earth-Orbit (LEO) satellite communications system. Other Company products include Eudora Pro(R) electronic mail software, ASICs products, and communications equipment and systems for government and commercial customers worldwide. For more information on QUALCOMM products and technologies, please visit the Company's web site at . Except for the historical information contained herein, this news release contains forward-looking statements that involve risks and uncertainties. The Company's future results could differ materially from those discussed here. Factors that could cause or contribute to such differences include, but are not specifically limited to: the ability to develop and introduce cost effective new products in a timely manner, avoiding delays in the commercial implementation of the Company's Code Division Multiple Access ("CDMA") technology; continued growth in the CDMA subscriber population and the scale-up and operations of CDMA systems; developments in current or future litigation; the Company's ability to effectively manage growth and the intense competition in the wireless communications industry; risks associated with vendor financing; timing and receipt of license fees and royalties; the Company's ability to successfully manufacture and sell significant quantities of CDMA infrastructure equipment on a timely basis; failure to satisfy performance obligations; 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 the most recent Form 10-Qs. 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. cdmaOne is a registered trademark of the CDMA Development Group. SOURCE QUALCOMM, Inc. CONTACT: Julie Cunningham, Director of Investor Relations of QUALCOMM, 619-658-4224, or fax, 619-651-2590, or e-mail: [email protected]/ (QCOM)