QUALCOMM, OmniTRACS and Eudora are registered trademarks of QUALCOMM Incorporated. Q phone is a trademark of QUALCOMM Incorporated. Globalstar is a trademark of Loral QUALCOMM Satellite Services, Incorporated. cdmaOne is a trademark of the CDMA Development Group. QUALCOMM Incorporated CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except per share data) (Unaudited) ASSETS March 29, September 28, 1998 1997 Current assets: Cash and cash equivalents $ 186,974 $ 248,837 Investments 249,087 448,235 Accounts receivable, net 599,349 445,382 Finance receivables, net 47,720 111,501 Inventories 359,695 225,156 Other current assets 99,382 70,484 Total current assets 1,542,207 1,549,595 Property, plant and equipment, net 518,686 425,090 Investments 111,680 111,786 Finance receivables, net 103,771 -- Other assets 179,387 188,209 Total assets $ 2,455,731 $ 2,274,680 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $ 529,211 $ 409,156 Unearned revenue 52,712 45,084 Bank lines of credit 56,000 110,000 Current portion of long-term debt 2,917 3,238 Total current liabilities 640,840 567,478 Long-term debt 5,530 7,729 Other liabilities 20,949 15,295 Total liabilities 667,319 590,502 Minority interest in consolidated subsidiaries 8,504 -- Company-obligated mandatorily redeemable trust convertible preferred securities of a subsidiary trust holding solely debt securities of the Company 660,000 660,000 Stockholders' equity: Preferred stock, $0.0001 par value -- -- Common stock, $0.0001 par value 7 7 Paid-in capital 939,330 906,373 Retained earnings 180,571 117,798 Total stockholders' equity 1,119,908 1,024,178 Total liabilities and stockholders' equity $ 2,455,731 $ 2,274,680 QUALCOMM Incorporated CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) (Unaudited) Three Months Ended Six Months Ended March 29, March 30, March 29, March 30, 1998 1997 1998 1997 Revenues: Communications systems $ 625,572 $ 507,780 $ 1,302,457 $ 832,360 Contractservices 64,927 49,365 128,958 88,044 License,royalty and developmentfees 70,054 28,601 114,992 54,282 Totalrevenues 760,553 585,746 1,546,407 974,686 Operating expenses: Communicationssystems 485,279 418,724 992,618 678,209 Contract services 49,053 36,470 95,329 64,195 Research and development 76,946 53,106 151,747 99,284 Selling andmarketing 59,728 31,100 115,826 58,041 General and administrative 38,246 22,012 74,715 37,604 Other -- 8,792 11,976 8,792 Total operating expenses 709,252 570,204 1,442,211 946,125 Operating income 51,301 15,542 104,196 28,561 Interest income 9,573 6,548 21,763 11,001 Interest expense (1,685) (3,212) (4,374) (5,196) Unrealized gain on trading securities -- 9,454 -- 9,454 Net gain on sale of investments -- -- 2,950 -- Distributions on trust convertible preferred securities of subsidiary trust (9,927) (3,895) (19,725) (3,895) Minority interest in income of consolidated subsidiary (21,642) (2,110) (17,861) (5,430) Equity in earnings of investees (1,398) -- (4,170) -- Income before income taxes 26,222 22,327 82,779 34,495 Income taxexpense (211) (5,582) (20,006) (8,624) Net income $ 26,011 $ 16,745 $ 62,773 $ 25,871Net earnings per common share: Basic $ 0.38 $ 0.25 $ 0.91 $ 0.39 Diluted $ 0.36 $ 0.23 $ 0.85 $ 0.36 Shares used in pershare calculation: Basic 68,934 67,225 68,705 66,903 Diluted 73,143 72,821 73,643 71,740 SOURCE QUALCOMM Incorporated CONTACT: Julie Cunningham, Vice President, Investor Relations of QUALCOMM Incorporated, 619-658-4224, or fax, 619-651-9303 Web site: http://www.qualcomm.com/