Exhibit 99.1
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QUALCOMM Incorporated
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PRESS RELEASE |
5775 Morehouse Drive
San Diego, CA 92121-1714
(858) 587-1121
www.qualcomm.com
FOR IMMEDIATE RELEASE
QUALCOMM Contacts:
Christine Trimble, Corporate Communications
Phone: 1-858-651-3628
Email: corpcomm@qualcomm.com
or
Bill Davidson, Investor Relations
Phone: 1-858-658-4813
Email: ir@qualcomm.com
Flarion Contact:
Ronny Haraldsvik, Marketing
Phone: 1-831-648-1214
Email: ronny@flarion.com
QUALCOMM to Acquire Flarion Technologies
Acquisition Strengthens Companys OFDMA Portfolio for Customers
SAN DIEGO August 11, 2005 QUALCOMM Incorporated (Nasdaq: QCOM), a leading developer and
innovator of Code Division Multiple Access (CDMA) and other advanced wireless technologies, today
announced that it will acquire Flarion Technologies, a pioneer and leading developer of Orthogonal
Frequency Division Multiplex Access (OFDMA) technology and the inventor of FLASH-OFDM®
technology for mobile broadband Internet protocol (IP) services. Flarion, with a world-class team
and an expansive portfolio of OFDMA intellectual property, has worked closely with several
operators worldwide in developing and demonstrating OFDMA technology and products. QUALCOMM will
pay approximately $600 million, net of Flarions projected cash at closing, in QUALCOMM stock and
cash, including the assumption of options and warrants at fair value. Upon the satisfaction of
certain milestones over the next few years, QUALCOMM may also pay an additional $205 million in the
form of cash and QUALCOMM stock. Completion of the acquisition, which is subject to regulatory
approval and other customary closing conditions, is expected later this year.
With this acquisition, QUALCOMM will be in a stronger position to support advanced development in
both CDMA and OFDMA technologies, said Dr. Paul E. Jacobs, CEO of QUALCOMM. The combination of
Flarion and QUALCOMMs engineering resources greatly strengthens our position as a continued
technology innovator and leader in the wireless industry. We believe CDMA will provide the most
advanced, spectrally efficient wide area wireless networks for the foreseeable future, but with
Flarion we can now more effectively support operators who prefer an OFDMA or hybrid OFDM/CDMA track
for differentiating their services.
This combination with QUALCOMM is ideal for Flarion as QUALCOMM has a proven history of bringing
the most advanced technologies to market for large-scale deployments, said Ray Dolan, chairman and
CEO of Flarion. The Flarion team is excited about becoming part of QUALCOMM and working hand in
hand to bring the best solutions to the industry.
The name QUALCOMM is synonymous with excellence, said Rajiv Laroia, founder and CTO of Flarion. Their CDMA wireless technology is the basis of every major international standard.
Both companies value the importance of innovation in solving technical challenges to bring the
right solutions to our customers. The two companies have very similar cultures and the combination
of the two will be positioned very well with respect to both CDMA and OFDMA wireless technologies.
With the transition to third-generation CDMA wireless services well underway, CDMA2000 and WCDMA
continue to experience substantial growth in markets around the world, said Steve Altman,
president of QUALCOMM. The acquisition of Flarion establishes QUALCOMM as a preeminent developer
of emerging OFDMA technologies, enhances our internal OFDMA developments and, when combined with
our existing portfolio, results in our owning an industry-leading OFDMA intellectual property
portfolio.
QUALCOMM will continue to focus on raising throughput and lowering cost of 3G CDMA networks with
advances in receive diversity, interference cancellation, multi-carrier and speech compression.
The introduction of VoIP on data-optimized RF carriers and the integration of
wireless
LAN and multicast technologies, such as OFDM-based FLO (Forward Link Only) technology,
provide increased opportunities for operators to deliver voice, data and wireless multimedia
applications to their subscribers using various frequency bands and the air interface technologies
best suited to the service offering. The addition of Flarions resources will further strengthen
QUALCOMMs position as a leader in designing and licensing OFDMA systems, components and products
for operators interested in OFDMA.
Upon the closing of the transaction, of the $600 million, QUALCOMM estimates that it will issue
stock with a value of approximately $267 million, assume existing Flarion options and warrants with
a fair value of approximately $128 million, and pay approximately $205 million in cash, net of
Flarions projected cash balance. In addition to the initial $600 million, upon the satisfaction
of certain milestones prior to the eighth anniversary of the close of the transaction, QUALCOMM is
expected to issue approximately $35 million of QUALCOMM stock (a portion of which may not be issued
until certain assumed Flarion options and warrants are exercised) and to pay an additional $170
million of cash. QUALCOMM expects approximately $0.03 dilution to pro forma earnings per share in
its fiscal year ending September 2006. Additionally, QUALCOMM expects one-time charges of
approximately $10 million, principally related to in-process research and development, upon
closing. The amounts above are estimates and are subject to change upon closing of the transaction
and reaching the identified milestones.
Flarion was advised by Evercore Partners and QUALCOMM was advised by Morgan Stanley.
Headquartered in Bedminster, N.J., Flarion Technologies has developed and deployed FLASH-OFDM
mobile broadband since 2000. Flarions product line consists of the RadioRouter® base
station, FLASH-OFDM modems, embedded chipsets, and system software to create an end-to-end network
for mobile operators (www.flarion.com).
QUALCOMM Incorporated (www.qualcomm.com) is a leader in developing and delivering innovative
digital wireless communications products and services based on CDMA and other advanced
technologies. Headquartered in San Diego, Calif., QUALCOMM is included in the
S&P 500 Index and is a 2005 FORTUNE 500® company traded on The Nasdaq Stock
Market® under the ticker symbol QCOM.
Except for the historical information contained herein, this news release contains forward-looking
statements that are subject to risks and uncertainties, including the Companys ability to
successfully design and have manufactured significant quantities of CDMA components on a timely and
profitable basis, the extent and speed to which CDMA is deployed, change in economic conditions of
the various markets the Company serves, as well as the other risks detailed from time to time in
the Companys SEC reports, including the report on Form 10-K for the year ended September 26, 2004,
and most recent Form 10-Q.
In connection with the pending transaction, QUALCOMM will file with the SEC a Registration
Statement on Form S-4 containing an Information Statement for the stockholders of Flarion. Flarion
stockholders are urged to read the Registration Statement and the Information Statement when they
are available, as well as all other relevant documents filed or to be filed with the SEC, because
they contain important information about QUALCOMM, Flarion and the proposed transaction. The final
Information Statement will be mailed to stockholders of Flarion after the Registration Statement is
declared effective by the SEC. Flarion stockholders will be able to obtain the Registration
Statement, the Information Statement and any other relevant filed documents for free at the SECs
Web site (www.sec.gov). These documents can also be obtained for free from QUALCOMMs Investor
Relations department (email: ir@qualcomm.com or phone: 1-858-658-4813).
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QUALCOMM
is a registered trademark of QUALCOMM Incorporated. FLO is a
trademark of QUALCOMM Incorporated. FLASH-OFDM is a registered
trademark of Flarion Technologies. CDMA2000 is a registered trademark of the Telecommunications
Industry Association (TIA USA). All other trademarks are the property of their respective owners.