<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 23, 1998
QUALCOMM INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
0-19528 95-3685934
(Commission File No.) (IRS Employer Identification No.)
6455 LUSK BOULEVARD
SAN DIEGO, CALIFORNIA 92121
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (619) 587-1121
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On September 23, 1998, QUALCOMM Incorporated ("QUALCOMM" or the
"Company") completed the spin-off and distribution (the "Distribution") to its
stockholders of shares of Leap Wireless International, Inc., a Delaware
corporation ("Leap"). As part of the Distribution, effective immediately after
the close of market trading on September 23, 1998, record holders of QUALCOMM
common stock on September 11, 1998 received a dividend of one share of common
stock of Leap for every four shares of common stock of QUALCOMM held by them as
of that date. Regular public trading of Leap shares under the ticker symbol
"LWIN" began on September 24, 1998, at which time QUALCOMM common stock traded
ex-dividend.
In connection with the Distribution, QUALCOMM transferred to Leap
QUALCOMM's joint venture and equity interests in the following domestic and
international emerging terrestrial-based wireless telecommunications operating
companies: Pegaso Telecomunicaciones, S.A. de C.V. (Mexico), Metrosvyaz Limited
(Russia) and Orrengrove Investments Limited (Russia), ChileSat Telefonia
Personal, S.A. (Chile), Chase Telecommunications, Inc. (United States), OzPhone
Pty. Ltd. (Australia), and certain other development-stage businesses. QUALCOMM
and Leap have also agreed that, if certain events occur within eighteen months
after the Distribution, QUALCOMM will transfer to Leap certain assets and
liabilities related to Telesystems of Ukraine, a wireless telecommunications
company in Ukraine. In connection with the Distribution, QUALCOMM also
transferred to Leap $10.0 million cash and certain indebtedness of the operating
companies owed to QUALCOMM in the amount of approximately $113.0 million,
approximately $30.8 million of which is indebtedness under certain convertible
notes, as well as certain miscellaneous assets. QUALCOMM has also made a
substantial funding commitment to Leap in the form of a $265.0 million secured
credit facility. The aggregate net tangible book value of the assets transferred
by QUALCOMM to Leap in connection with the Distribution was $260.5 million.
Leap has agreed to assume certain of QUALCOMM's other obligations to
manage operations of and finance costs relating to ongoing build-outs of the
wireless telecommunications systems being deployed by such operating companies,
including approximately $73.8 million of anticipated funding obligations to
certain of the operating companies, other than equipment financing obligations,
as well as certain miscellaneous liabilities. There can be no assurance that
Leap will fulfill or perform such obligations sufficiently or at all. QUALCOMM
will continue to be a supplier of CDMA equipment and is expected to provide
significant vendor financing to Leap's wireless telecommunications businesses
and ventures.
As a result of the Distribution, QUALCOMM and Leap will operate as
independent publicly traded companies, with no common officers or directors. In
connection with the Distribution, however, Leap issued to QUALCOMM a warrant to
purchase 5,500,000 shares of Leap common stock at a purchase price equal to the
average of the last sales price per share of the Leap common stock on the Nasdaq
National Market for each of the five consecutive trading days beginning with and
including the date of the Distribution, or $6.10625 per share. In addition,
QUALCOMM and Leap will continue to have a relationship as a result of the
following agreements that they entered into in connection with the Distribution:
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SEPARATION AND DISTRIBUTION AGREEMENT. Pursuant to the Separation and
Distribution Agreement, QUALCOMM agreed to transfer to Leap the assets described
above, and Leap agreed to assume the obligations described above. QUALCOMM and
Leap also agreed that, if certain events occur within eighteen months after the
Distribution, QUALCOMM will transfer to Leap certain assets and liabilities
related to Telesystems of Ukraine.
Leap also agreed in the Separation and Distribution Agreement that,
until January 1, 2004, it will deploy, subject to certain specified limited
exceptions, only wireless terrestrial systems using technology and systems known
as cdmaOne.
In addition, Leap agreed that, until January 1, 2004, it will, subject
to certain specified limited exceptions, invest only in companies using cdmaOne
systems, in connection with terrestrial wireless activities. Pursuant to the
Separation and Distribution Agreement and subject to certain exceptions,
QUALCOMM will have a non-exclusive, royalty-free license to any patent rights
developed by Leap or any of Leap's affiliates. In addition, pursuant to the
Separation and Distribution Agreement, Leap will grant to QUALCOMM a right of
first refusal for a period of three years with respect to proposed transfers by
Leap of its interests in joint ventures and equity interests, subject to
pre-existing rights of other investors. Leap also agreed to take an active role
in the management of companies with which it has joint venture or equity
interests, consistent with its own business needs and applicable laws,
contractual arrangements and other requirements. Finally, the agreement includes
provisions prohibiting each party from soliciting the employees of the other for
three years.
CREDIT FACILITY. Leap entered into a secured credit facility with
QUALCOMM. The credit facility consists of two sub-facilities. The first
sub-facility enables Leap to borrow up to $35.2 million from QUALCOMM, subject
to the terms thereof. The proceeds from this sub-facility may be used by Leap
solely to meet the normal working capital and operating expenses of Leap,
including salaries and overhead, but excluding, among other things, strategic
capital investments in wireless operators, substantial acquisitions of capital
equipment, and/or the acquisition of telecommunications licenses. The other
sub-facility enables Leap to borrow up to $229.8 million from QUALCOMM, subject
to the terms thereof. The proceeds from this second sub-facility may be used by
Leap solely to make certain identified portfolio investments.
Amounts borrowed under the Credit Facility will be due and payable
approximately eight years following the Distribution Date. QUALCOMM will have a
first priority security interest in, subject to some exceptions, substantially
all of the assets of Leap for so long as any amounts are outstanding under the
Credit Facility. Amounts borrowed under the Credit Facility will bear interest
at a variable rate equal to LIBOR plus 5.25% per annum. Interest will be payable
quarterly beginning September 30, 2001; and prior to such time, accrued interest
shall be added to the principal amount outstanding.
MASTER AGREEMENT REGARDING EQUIPMENT PROCUREMENT. The Master Agreement
Regarding Equipment Procurement sets forth certain obligations of Leap and
QUALCOMM with respect to the purchase and sale of certain terrestrial-based
cdmaOne infrastructure and subscriber equipment.
INTERIM SERVICES AGREEMENT. The Interim Services Agreement governs the
provision by QUALCOMM to Leap, on an interim basis, of certain services (which
may include voice telecommunications and data transmission,
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accounting, financial management, tax, payroll, stockholder and public
relations, legal, human resources administration, procurement, real estate
management and other administrative functions), each as mutually agreed to and
on the terms set forth therein. Leap has agreed to pay QUALCOMM the hourly rate
of the QUALCOMM employees performing such services, plus associated general and
administrative overhead (which shall be deemed to equal an additional 150% of
the hourly rate of the employees) and all out-of-pocket costs and expenses.
These interim services are not expected to extend beyond one year following the
date of the Distribution.
EMPLOYEE BENEFITS AGREEMENT. Pursuant to the Employee Benefits
Agreement, Leap assumed and agreed to pay, perform, fulfill and discharge
certain liabilities to, or relating to, former employees of QUALCOMM or its
affiliates who are now employed by Leap. In addition, Leap was obligated to
grant (in connection with the Distribution) options to purchase shares of Leap
common stock to certain holders of options to purchase shares of QUALCOMM Common
Stock.
TAX AGREEMENT. The Tax Agreement generally will require QUALCOMM to
pay, and indemnify Leap against, all United States federal, state, local and
foreign taxes relating to the businesses conducted by QUALCOMM or its
subsidiaries for any taxable period, other than the following taxes which will
be paid by Leap and against which Leap will indemnify QUALCOMM: (i) all United
States federal, state, local and foreign taxes relating to Leap and its U.S.
subsidiaries for periods after the Distribution; (ii) all United States federal,
state, local and foreign taxes relating to Leap's non-U.S. subsidiaries or any
predecessor or successor thereof for all periods before and after the
Distribution (other than with respect to certain restructuring transactions
incident to the Distribution); and (iii) all United States federal, state, local
and foreign taxes arising out of certain actions taken by, or in respect of,
Leap or any of its subsidiaries that cause adverse tax consequences to QUALCOMM,
Leap or their respective subsidiaries with respect to the Distribution or the
transactions related thereto; provided, however, that under certain limited
circumstances Leap's indemnification obligation described in this subparagraph
(iii) may be reduced.
CONVERSION AGREEMENT. Pursuant to the Conversion Agreement, Leap agreed
to issue shares of Leap common stock to holders of QUALCOMM's Trust Convertible
Preferred Securities upon the conversion of such securities and to, at all
times, have reserved and keep available, solely for issuance and delivery upon
such conversion, all Leap common stock issuable from time to time upon such
conversion.
A number of Leap's senior management members were members of QUALCOMM's
senior management and joined Leap from QUALCOMM in connection with the formation
of Leap, including Harvey P. White, Leap's President, Chief Executive Officer
and Chairman of the Board and formerly Vice Chairman of the Board of QUALCOMM;
Thomas J. Bernard, Leap's Executive Vice President and formerly Senior Vice
President of QUALCOMM; and James E. Hoffmann, Leap's Senior Vice President and
General Counsel and formerly Vice President, Legal Counsel of QUALCOMM.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
Not applicable.
(b) PRO FORMA FINANCIAL INFORMATION.
(1) UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL
INFORMATION OF QUALCOMM Incorporated.
The following unaudited pro forma condensed consolidated
financial information is being filed herewith:
<TABLE>
<CAPTION>
Page:
<S> <C>
Unaudited Pro Forma Condensed Consolidated Balance
Sheet at June 28, 1998 7
Unaudited Pro Forma Condensed Consolidated Statement of
Income for the nine months ended June 28, 1998 8
Unaudited Pro Forma Condensed Consolidated Statement of
Income for the year ended September 30, 1997 9
Notes to Unaudited Pro Forma Condensed Consolidated
Financial Information 10
</TABLE>
(c) EXHIBITS.
2.1 Separation and Distribution Agreement between QUALCOMM
and Leap dated September 23, 1998 (incorporated herein
by reference to the Registration Statement on Form 10,
as amended, filed by Leap with the Commission on July 1,
1998, SEC File No. 0-29752 (the "Form 10")).
99.1 Warrant issued to QUALCOMM by Leap (incorporated herein
by reference to Exhibit 4.2 to the Form 10).
99.2 Credit Agreement between QUALCOMM and Leap dated
September 23, 1998 (incorporated herein by reference to
Exhibit 10.1 to the Form 10).
99.3 Tax Matters Agreement between QUALCOMM and Leap dated
September 23, 1998 (incorporated herein by reference to
Exhibit 10.2 to the Form 10).
99.4 Interim Services Agreement between QUALCOMM and Leap
dated September 23, 1998 (incorporated herein by
reference to Exhibit 10.3 to the Form 10).
99.5 Master Agreement Regarding Equipment Procurement 99.4
between QUALCOMM and Leap dated September 23, 1998
(incorporated herein by reference to Exhibit 10.4 to the
Form 10).
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99.6 Employee Benefits Agreement between QUALCOMM and Leap
dated September 23, 1998 (incorporated herein by
reference to Exhibit 10.5 to the Form 10).
99.7 Conversion Agreement between QUALCOMM and Leap dated
September 23, 1998 (incorporated herein by reference to
Exhibit 10.6 to the Form 10).
99.8 Press release dated September 23, 1998.
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QUALCOMM Incorporated
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands, except per share data)
<TABLE>
<CAPTION>
JUNE 28, 1998
--------------------------------------------------------
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA (1)
---------- ----------- ------------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 179,905 $ 0 $ 179,905
Investments 118,454 0 118,454
Accounts receivable, net 787,865 0 787,865
Finance receivables 45,242 0 45,242
Inventories 393,805 0 393,805
Other current assets 112,834 0 112,834
---------- ---------- ----------
Total current assets 1,638,105 0 1,638,105
Property, plant and equipment, net 565,671 0 565,671
Investments 111,626 (37,034)(2) 74,592
Finance receivables, net 132,663 0 132,663
Other assets 187,299 33,079(3) 220,378
---------- ---------- ----------
Total assets $2,635,364 $ (3,955) $2,631,409
========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 551,777 $ 803(4) $ 552,580
Unearned revenue 92,494 0 92,494
Bank lines of credit 138,000 0 138,000
Current portion of long-term debt 2,959 0 2,959
---------- ---------- ----------
Total current liabilities 785,230 803 786,033
Long-term debt 4,734 0 4,734
Other liabilities 23,591 0 23,591
---------- ---------- ----------
Total liabilities 813,555 803 814,358
Minority interest in consolidated
subsidiaries 27,195 0 27,195
---------- ---------- ----------
Company-obligated mandatorily
redeemable trust convertible
preferred securities of a
subsidiary trust holding solely
debt securities of the Company 660,000 0 660,000
---------- ---------- ----------
Stockholders' equity:
Preferred stock, $0.0001 par value 0 0 0
Common stock, $0.0001 par value 7 0 7
Paid-in capital 948,193 0 948,193
Retained earnings 186,414 (4,758)(2)(3)(4) 181,656
---------- ---------- ----------
Total stockholders' equity 1,134,614 (4,758) 1,129,856
---------- ---------- ----------
Total liabilities and stockholders' equity $2,635,364 $ (3,955) $2,631,409
========== ========== ==========
</TABLE>
See accompanying notes to unaudited pro forma condensed
consolidated financial information
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QUALCOMM Incorporated
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
(In thousands, except per share data)
<TABLE>
<CAPTION>
NINE MONTHS ENDED JUNE 28, 1998
----------------------------------------------------------
HISTORICAL PRO FORMA PRO FORMA (1)
ADJUSTMENTS
<S> <C> <C> <C>
Revenues:
Communications systems $ 2,061,084 $ 0 $ 2,061,084
Contract services 198,905 0 198,905
License, royalty and development fees 161,915 0 161,915
----------- ----------------- -----------
Total revenues 2,421,904 0 2,421,904
----------- ----------------- -----------
Operating expenses:
Communications systems 1,566,671 0 1,566,671
Contract services 145,956 0 145,956
Research and development 244,557 0 244,557
Selling and marketing 180,519 0 180,519
General and administrative 114,676 (16,188)(5) 98,488
Other 11,976 0 11,976
----------- ----------------- -----------
Total operating expenses 2,264,355 (16,188) 2,248,167
----------- ----------------- -----------
Operating income 157,549 16,188 173,737
Interest income 32,435 0 32,435
Interest expense (6,166) 0 (6,166)
Net gain on sale of investments 2,950 0 2,950
Write-off of investment in other
entity (20,000) 0 (20,000)
Distributions on trust convertible
preferred securities of subsidiary
trust (29,496) 0 (29,496)
Minority interest in income of
consolidated subsidiary (36,557) 0 (36,557)
Equity in losses of investees (9,707) 7,278(6) (2,429)
----------- ----------------- -----------
Income before income taxes 91,008 23,466 114,474
Income tax expense (22,392) (4,533)(7) (26,925)
----------- ----------------- -----------
Net income $ 68,616 $ 18,933 $ 87,549
=========== ================= ===========
Net earnings per common share:
Basic $ 1.00 $ 1.27
=========== ===========
Diluted $ 0.93 $ 1.19
=========== ===========
Shares used in per share calculation:
Basic 68,899 68,899
=========== ===========
Diluted 73,754 73,754
=========== ===========
</TABLE>
See accompanying notes to unaudited pro forma condensed
consolidated financial information
8
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QUALCOMM Incorporated
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
(In thousands, except per share data)
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30, 1997
----------------------------------------------------------------
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA (1)
<S> <C> <C> <C>
Revenues:
Communications systems $ 1,733,169 $ 0 $ 1,733,169
Contract services 211,661 0 211,661
License, royalty and development fees 151,535 0 151,535
----------------- ----------- -----------
Total revenues 2,096,365 0 2,096,365
Operating expenses:
Communications systems 1,361,641 0 1,361,641
Contract services 156,365 0 156,365
Research and development 235,922 0 235,922
Selling and marketing 147,040 0 147,040
General and administrative 89,148 (1,361)(5) 87,787
Other 8,792 0 8,792
----------------- ----------- -----------
Total operating expenses 1,998,908 (1,361) 1,997,547
----------------- ----------- -----------
Operating income 97,457 1,361 98,818
Interest income 34,845 0 34,845
Interest expense (11,012) 0 (11,012)
Gain on sale of trading securities 13,400 0 13,400
Distributions on trust convertible
preferred securities of subsidiary
trust (23,277) 0 (23,277)
Minority interest in income of
consolidated subsidiary (2,979) 0 (2,979)
----------------- ----------- -----------
Income before income taxes 108,434 1,361 109,795
Income tax expense (16,500) (204)(7) (16,704)
----------------- ----------- -----------
Net income $ 91,934 $ 1,157 $ 93,091
================= =========== ===========
Net earnings per common share:
Basic $ 1.37 $ 1.38
================= ===========
Diluted $ 1.28 $ 1.29
================= ===========
Shares used in per share calculation:
Basic 67,335 67,335
================= ===========
Diluted 71,887 71,887
================= ===========
</TABLE>
See accompanying notes to unaudited pro forma condensed
consolidated financial information
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QUALCOMM Incorporated
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(In thousands)
(1) The unaudited pro forma condensed consolidated financial statements
give retroactive effect to the spin-off of Leap Wireless International,
Inc. ("Leap"). Pro forma balance sheet and statement of income
adjustments as of and for the nine months ended June 28, 1998 are
presented as of and for the nine months ended May 31, 1998. Pro forma
statement of income adjustments for the year ended September 30, 1997
are presented for the year ended August 31, 1997, Leap's fiscal
year-end.
(2) Reflects $42,777 in investments in wireless telecommunications
operating companies transferred to Leap net of $4,735 profit and $1,008
interest income previously eliminated in connection with transactions
with equity investees.
(3) Reflects a $15,000 note receivable transferred to Leap and $48,079 in
assets to be recorded by QUALCOMM in connection with the spin-off.
Assets recorded by QUALCOMM include: a warrant to purchase 5.5 million
shares of Leap common stock valued at predecessor basis of $36,289, and
a call option related to Leap's obligation to issue common stock to
holders of QUALCOMM's Trust Convertible Preferred Securities upon the
conversion of such securities at a fair value of $11,790.
(4) Reflects a $2,897 reduction related to Leap accounts payable and a
$3,700 increase in payables resulting from transaction costs related to
the spin-off. Transaction costs consist primarily of investment
banking, legal and accounting fees, printing and registration expenses.
(5) Reflects Leap's general and administrative expenses.
(6) Reflects reversal of (a) $1,535 in equity losses and (b) $4,735 profit
and $1,008 interest income previously eliminated in connection with
transactions with equity investees.
(7) Pro forma adjustments have been tax affected at a 15% incremental
income tax rate for the year ended September 30, 1997 and at a 28%
incremental tax rate for the nine months ended June 28, 1998.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
QUALCOMM INCORPORATED
Dated: October 7, 1998 By: /s/ STEVEN R. ALTMAN
------------------------------------
Steven R. Altman
Executive Vice President and
General Counsel, Assistant Secretary
and General Manager, Technology
Transfer & Strategic Alliances
Division
11
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INDEX TO EXHIBITS
2.1 Separation and Distribution Agreement between QUALCOMM and Leap
dated September 23, 1998 (incorporated herein by reference to
the Registration Statement on Form 10, as amended, filed by Leap
with the Commission on July 1, 1998, SEC File No. 0-29752 (the
"Form 10")).
99.1 Warrant issued to QUALCOMM by Leap (incorporated herein by
reference to Exhibit 4.2 to the Form 10).
99.2 Credit Agreement between QUALCOMM and Leap dated September 23,
1998 (incorporated herein by reference to Exhibit 10.1 to the
Form 10).
99.3 Tax Matters Agreement between QUALCOMM and Leap dated September
23, 1998 (incorporated herein by reference to Exhibit 10.2 to
the Form 10).
99.4 Interim Services Agreement between QUALCOMM and Leap dated
September 23, 1998 (incorporated herein by reference to Exhibit
10.3 to the Form 10).
99.5 Master Agreement Regarding Equipment Procurement 99.4 between
QUALCOMM and Leap dated September 23, 1998 (incorporated herein
by reference to Exhibit 10.4 to the Form 10).
99.6 Employee Benefits Agreement between QUALCOMM and Leap dated
September 23, 1998 (incorporated herein by reference to Exhibit
10.5 to the Form 10).
99.7 Conversion Agreement between QUALCOMM and Leap dated September
23, 1998 (incorporated herein by reference to Exhibit 10.6 to
the Form 10).
99.8 Press release dated September 23, 1998.
<PAGE> 1
EXHIBIT 99.8
QUALCOMM COMPLETES SPIN-OFF OF LEAP WIRELESS INTERNATIONAL
SAN DIEGO - September 23, 1998 - QUALCOMM Incorporated (NASDAQ: QCOM) today
announced that it has completed the spin-off and distribution to its
stockholders of shares of Leap Wireless International, Inc. (NASDAQ: LWIN). As
part of the distribution, effective immediately after the close of market
trading on September 23, 1998, record holders of QUALCOMM common stock on
September 11, 1998 will receive a dividend of one (1) share of common stock of
Leap Wireless for every four (4) shares of common stock of QUALCOMM held by them
as of that date. Regular public trading of Leap Wireless shares under the ticker
symbol "LWIN" will begin as of September 24, 1998, at which time QUALCOMM common
stock will trade ex-dividend.
The strategy of Leap Wireless will be to invest in wireless consortia with
partners that offer financial resources, spectrum or familiarity with the local
market to facilitate deployment. Leap Wireless currently owns, manages, supports
and operates joint venture and equity interests in Pegaso Telecomunicaciones,
S.A. de C.V. (Mexico), Metrosyvaz Limited (Russia) and Orrengrove Investments
Limited (Russia), ChileSat Telefonia Personal, S.A. (Chile), Chase
Telecommunications, Inc. (United States), OzPhone Pty. Ltd. (Australia), and
certain other development-stage businesses.
"In emerging markets, the need for rapidly expanding telecommunications
infrastructure is not a luxury item, but a fundamental need, and wireless is the
fastest and most cost-effective way to meet the demand," said Harvey P. White,
chairman and CEO of Leap Wireless. "We have chosen to focus on CDMA because we
believe that it is the best technology to provide the capacity and quality to
meet customer demand. In addition, by using CDMA, we will not have to sacrifice
quality for mobility. We will be able to provide high quality voice and data
services that just happen to be mobile."
Mr. White was a co-founder of QUALCOMM who served as its president until just
prior to the distribution.
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 geostationery 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 Eudora Pro(R) electronic
mail software, ASIC 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 http://www.qualcomm.com.
<PAGE> 2
Headquartered in San Diego, Leap Wireless is a wireless communications carrier
that deploys CDMA networks in domestic and international markets with strong
growth potential. In conjunction with its strategic partners, Leap Wireless is
building or anticipates building a combination of fixed and mobile wireless
solutions in Mexico, Chile, Australia, Russia and the United States. The world
is going wireless, and Leap believes CDMA is the technology of choice to
increase the teledensity that is critical to economic growth. For each of its
ventures, Leap Wireless expects to be actively involved in the management of the
networks, combining its experience in international markets with its wireless
technical expertise in CDMA. Leap Wireless is dedicated to bringing the economic
benefits of a reliable, cost-effective and high-quality telecommunications
infrastructure to emerging markets. For more information about Leap Wireless,
please visit the company's web site beginning September 24, 1998 at
http://www.leapwireless.com.
Except for the historical information contained herein, this news release
contains forward-looking statements that are subject to risks and uncertainties,
including risks associated with the lack of Leap Wireless operating history,
uncertainty of future profitability of Leap Wireless, international risks and
change in economic conditions of the various markets QUALCOMM serves and Leap
Wireless may serve. These and other risks are detailed from time to time in
QUALCOMM's SEC reports, including the report on Form 10-K for the year ended
September 28, 1997 and most recent Form 1O-Q, as well as in the Information
Statement on Form 10, as amended, filed by Leap Wireless in connection with the
distribution.
# # #
QUALCOMM, OmniTRACS, Eudora and Eudora Pro are registered trademarks of QUALCOMM
Incorporated. Globalstar is a trademark of Loral QUALCOMM Satellite Services,
Incorporated.
QUALCOMM Contacts:
Christine Trimble
Corporate Public Relations
(619) 651-3628
Julie Cunningham
Investor Relations
(619) 658-4224
Leap Wireless International Contact:
Rochelle Bold
Investor Relations
619-845-6016
